Wednesday, 3 September 2014
Last updated 13 hours ago
Jan 27 2011 | 2:13pm ET
Some people crack a bottle of bubbly to celebrate the end of a successful career: former UK hedge fund manager Mark Driver has decided to make his own. After leaving his post as co-manager of the $5 billion Horseman Global Fund, Driver has relocated to the South Downs of England to establish the Rathfinny vineyard and winery. He recently told FINalternatives' Mary Campbell how climate change, Plumpton College and his own love of wine conspired to prompt this unusual second act.
Can you tell me something about your background in finance and the factors behind your rather dramatic recent career change?
I spent nearly 15 years as a stock broker, from the mid-‘80s through to the late ‘90s. In 1999, I was working for a firm called DLJ—Donaldson, Lufkin & Jenrette—and they were taken over by Credit Suisse. I was approached during the summer prior to that move by John Horseman, and he asked me if I was interested in joining him to help set up a hedge fund. And so…I joined John, there were three original partners, and we set up Horseman Capital…We started with about $14 million and peak assets, in total, were up $6 billion. So it was a very successful business, we put on some very good performance during the 2000s, …we were able to latch onto some very good long-term trends and we were doing well.
Then at the end of 2009…John decided that he’d really had enough and he wanted to step away from day-to-day management of the fund and he encouraged me to do the same…because we worked as co-managers on what was called the Horseman Global Fund, which at the time was close to a $5 billion fund. And he was quite keen for us to both step away, which I agreed to and so, at the end of 2009, that left me with complete freedom… I thought, ‘Well, what am I going to do?’ because I’m a young man, I’m only 46. And I thought, ‘I want to do something else, there’s something else in me.’
So I had a look around and one of the things that I’ve always loved is wine…and [during a trip to New Zealand in the 1990s] I fell in love with the idea of opening a winery. But I was busy doing other things for the last 20 years, and then this opportunity came along and I thought, perhaps this is a good opportunity to do it. So the motivation was really 1) the fact that I’d stopped being involved with day-to-day management of the Horseman Global Fund and 2) a long-held ambition to be involved in the wine industry.
And had you envisioned being involved in the wine industry in England?
[Laughs] No, never. I never did—I really thought that I would own something overseas. The thing that really changed my mind was in 2009—you know I analyze things, I spend my day looking at new projects, that’s what I’ve done for the last 25 years of my life, and I looked at the English wine industry and I thought ‘Now what’s going on here?’ because I suddenly found that I was able to do a viticulture degree at…Brighton University, [at] a college called Plumpton College. And I thought, ‘I can study viticulture in England? Why?’ And I started looking into the English wine industry and there’s something really exciting happening here because…we are benefiting from climate change. Just the slight increase in temperature that’s affecting England is really helping the ripening of grapes. And so, whilst five or 10 or 20 years ago grapes were really struggling to ripen in this country…over the last 20 years there’s been a very slight increase in temperature and we’re getting better ripeness. Plus, we’ve got much better trained people, so Plumpton College and climate change are really responsible for changing the English wine industry.
I then started looking at various vineyards already established in England, and I found that they’re winning awards. Quite remarkably, not just locally, they’re winning international awards. For example, there’s a wine producer in Sussex, south of England…a place called Ditchling, and there’s a vineyard there called Ridgeview and Ridgeview, …in September of last year…were voted the best sparkling wine in the world. This is an award given out by Decanter Magazine, and it’s never gone outside of France. It’s being seen as very, very similar to the 1970s when in blind tastings—and these are all blind tastings—the Californians suddenly beat the Bordeaux producers for red wine.
What’s happening is that the whole Champagne region is also warming up, so they’re suffering slightly from climate change—it’s not necessarily noticeable at this stage—but the Champagne region has effectively moved about 80 miles north. And the home of Champagne now is the South Downs of England which are exactly the same geological structure—they’re chalky slopes, quite thin soil but they’re getting decent weather and they’re getting the right sort of ripeness and they’re getting the right sort of acidity, which is making fantastic sparkling wines.
Having decided to make wine in England, was it difficult to find land?
I started the search at the end of ’09 and it took me over 12 months to find some…I thought it would take longer to be honest, but I found this place called Rathfinny, and Rathfinny is, I think, one of the best sites in the whole of England for grapes because it’s a perfect south-facing slope, it’s on chalk, it has reasonably fertile soil, but more importantly, it’s very, very close to the sea but protected from the sea breezes by a ridge of land. The risk that you have in this part of the world is the late spring frosts and yet this sight is really frost free, so it’s unlikely that it will be affected by late-spring frosts, which kill off your vines. It’s got a fantastic microclimate and I think it’s a perfect slope—and there’s a whole slope, it’s all south-facing, and I’ve got 600 acres which I can plant out.
You started your viticulture course at Plumpton College in September? What’s that been like?
Oh, that’s been tough [laughs]. Going back to study at age 46 is hard. But, there are some great, bright, motivated people on the course. And there’s a real buzz about it because…it’s a career-driven course, everybody wants to get involved in the wine industry. A lot of them want to get involved in England, a few want to go abroad. But yeah, it’s been tough. And we’ve had to go back to basics, so I’ve been learning chemistry and biology and soil science and all those sort of subjects; things that I haven’t done for close to 30 years.
Do you have homework?
Oh yes. This morning I was in the middle of a big essay, which I had to do on vineyard establishment and the clones and cultivars and what you would do to soils and everything else.
Someone in your position could just hire people with this knowledge, but you obviously have a real interest in learning yourself, why is that?
My view was that, yes I could hire people, however, I need to know what those people are telling me. It’s a very technical subject and it’s not something you can just bluff your way through [or] pick up, necessarily, as you go along…Because my background was in finance, [not] farming or agriculture—the most I’ve grown is I’ve planted some plants in our garden or grown some tomatoes in a greenhouse—my view was, I really need to know what makes things work. And more importantly, I want to be involved, I don’t want somebody else to run it, I want to be involved in the wine making.
According to your web site, you’ve selected your first 72,000 vines and they’re under cultivation in Germany. Can you tell me something about this process?
Vines in Europe, they’re all grafted vines. So you choose a root stock, which is suitable for the soil, which we’ve done, and then the top gets grafted on, the variety that you want, the cultivar. So I’m planting a mixture of Pinot Noir, Chardonnay, and Pinot Meunier. I’m also planting a little bit of Riesling for some still wine. The first three….are classic sparkling wine varieties.
I’ve been dealing with some of the bigger nurseries in Europe, you have a choice really of either going to France or to Germany and I looked at them both and I decided I wanted to deal with Germany because I’m buying a particular type of vine,…called a high-grafted vine, and the Germans are some of the biggest producers of high-graft in Europe….They’ll be grafted with a lot of French and a couple of German varieties. …Essentially, I’m planting internationally recognized cultivars or clones but they just happen to be made in Germany.
Do you anticipate producing wine in 2014?
That’s correct, yes. We might get a little bit in 2013 [but] it’s more likely [that in] 2014 we’ll have our first vintage and we’ll make sparkling wine and still wine. The still wine will be available at the end of that year [or] beginning of the next, and the sparkling wine will take about three years…because we will be producing sparkling wine by the traditional method, where you have a secondary fermentation. Basically… you have a primary fermentation…and after it’s fermented and you’ve made a base wine, you put that wine into a bottle. You add a little bit of yeast, a little bit of sugar—because you’ve already fermented away most of the sugar—and you put a cap on it and you leave it. And what happens is all the CO2 coming from that fermentation, instead of escaping out through the top of the bottle, goes into the wine and that’s what creates your bubbles.
In Champagne they leave that for a minimum of 15 months, I’m going to be leaving mine for a minimum of two years, and then we’ll taste it and see what it’s like and then we’ll probably leave it for another year. So we’ll be leaving it probably for about three years in the lees, which is the yeast, and that puts all the flavor into sparkling wine. It’s a very complex process. And then you have to do something called riddling—in France they call it ‘remuage’—and remuage or riddling is basically the turning of the bottle. That then shakes the yeast down into the neck of the bottle, then you take out that little pluck of yeast, and you put a cork in.
And that’s why good quality fizz is expensive because basically it takes you about three to four years to produce it. So we’ll be selling that first batch of sparkling wine as our Rathfinny Sparkling in 2017. We may be able to sell some in 2016—we’ll be making a brut and a pink and the pink tends to mature a bit quicker, so that may be available in 2016.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
The twin debacles of MF Global and PFG have damaged the reputation of the futures industry demanding an examination of customer protection rules. New rules are being implemented, which will add cost a...