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What is a Distribution?
Vint monitors market conditions to identify opporunities to exit assets in collections to maximize returns.
When Vint sells a portion of assets in a collection, the proceeds from the sale minus any applicable taxes are considered distributions that will be dispersed to investors on a pro-rata basis.
Example Distribution Breakdown
Let’s run through a sample breakdown of a distribution.
Our Example Collection has a few key stats to it.
- 100 bottles
- $100,000 Collection Offering Value
- $100/share
- 1,000 shares
Each bottle has an Implicit Value relative to the Collection Offering Value. To keep it simple, let’s make each bottle worth 1% of the Collection Offering Value.
Vint identifies an exit opportunity for 10 of the bottles in the collection for $11,000 net any applicable taxes. This amount represents the total distribution to be dispersed back to investors.
Vint has $11,000 to distribute evenly across the 1,000 shares in the collection, or pro-rata. For every share that an investor owns in the Example Collection, they will receive $11 at the end of the quarter.
How do Distributions affect my investments?
After receiving a distribution, your Position NAV is decreased by the amount of the Implied Value of Assets sold. In the example above, if you owned 50 shares (5%), your Position NAV would decrease from $5,000 to $4,500. You would have received a distribution of $550.
When do Distributions happen?
Vint does not make commitment to distributions for any individual collection. If there are distributions for a collection, Vint will send distributions on a quarterly basis.
Tax Implications
Investors who have not received a distribution have no tax filing obligations for that tax year.
Investors who receive distributions are subject to Qualified Dividend Tax, which will be a 0, 15%, or 20% tax based on your income level. Investors will receive a 1099-DIV form.
How does Vint decide when to sell a collection?
The team at Vint makes use of our extensive network of wine merchants, collectors, and third-party exchanges to understand the demand for various assets under management. We take a data-driven approach to maximizing returns that starts with our initial investment thesis and ends with us exiting a collection. In short, we look for, and list our assets, at pricing that hits our targets for returns given ever-changing market trends.
Why is Vint returning funds before the full collection is sold?
Our collections are unique as they are comprised of many unique assets. The majority of our collections will be sold to multiple parties and at different intervals. Rather than sitting on cash, Vint has decided to return those funds to allow our investors to do with it what they believe is best.
Why is cost basis included in the distribution?
Unlike distributions from a stock or real estate investment, Vint distributions are generated on the sale of an asset. The underlying Collection Net Asset Value (NAV) is reduced in value proportionally to the % of the collection that was sold. Similarly, an investor's Position Net Asset Value (NAV) is reduced in value proportionally to the % of the collection sold.
