Understanding Splint Invest’s Asset Valuation Process

The Importance of Accurate Comparisons 

Before diving into individual asset categories, it's important to understand the necessity of accurate comparisons. Comparing assets that aren't truly similar can lead to misleading valuations. For instance, using the price of low-mileage cars to value high-mileage cars can result in overvaluation. This principle of accurate, applicable comparisons is fundamental to Splint Invest's valuation approach. 

And now let's dive into the different categories: 

Wine Investments 

Valuing wine investments necessitates a careful consideration of several factors unique to each bottle or portfolio. Typically, Splint Invest relies on prices from secondary markets such as the Liv-Ex fine wine exchange. Key considerations include: 

Calculation Approach: The value of a wine portfolio is calculated as a weighted sum of individual bottle valuations, leveraging the proprietary Splint valuation model. For instance, if an asset originally valued at €10,000 increases to €12,500, reflecting a 25% return, this adjustment directly influences asset and investment unit prices. 

Whisky Casks 

Whisky casks have a near-linear price development, making their valuation simpler. Splint Invest uses a proprietary model that assumes linear growth over the investment horizon, complemented by half-yearly re-valuations of the experts based on traded casks. 

Example Calculation: 

If a whisky cask purchased for €10,000 has an estimated multiple on invested capital (MOIC) of 2.5, the yearly return and quarterly return are factored into the valuation. If supplier estimates also suggest a value increase, the final valuation combines these inputs. 

Whisky Bottles 

Valuing whisky bottles involves averaging resale prices from secondary markets, factoring in vintage specifics and asset completeness (e.g., including original packaging). Key considerations include: 

Calculation Approach: The valuation formula incorporates a weighted average of resale prices and market indices (RareWhisky101 Apex 1000, or Icon100), balancing asset specifics and broader market trends.  

If the reference price of a whisky bottle is €12,500 that was originally purchased for €10,000, and indices A and B have changes of +10% and -5% respectively, the valuation model calculates:  

Return = 0.8×0.25 + 0.1×0.1 − 0.05×0.05 = 0.205  

Thus, the new asset value is = 10,000×1.205 = 12,050. 

Watches 

For watch investments, Splint assesses resale values by considering factors like brand reputation, asset condition, and completeness (including papers and boxes). Key considerations include: 

Calculation Approach: The valuation model typically uses the secondary market transaction prices weighted by asset condition and completeness factors, ensuring accurate reflection of market realities. 

If a watch bought for €10,000 is traded at €12,500 with all complete box & paper and mint condition, the new asset value is = 10,000×1.25 = 12,500. 

Art – Developed Artists 

Valuing artworks from established artists involves a comparative sales approach, analysing recent auction results and gallery prices. Key considerations include: 

Calculation Approach: Fair Market Value is determined based on a weighted average of comparable sales, adjusted for specific artwork conditions and artist reputation. 

For an Andy Warhol print with comparable sales of €50,000, €55,000, and €52,000, the average sale price is = (50,000 + 55,000 + 52,000) / 3 = 52,333 

With a weight factor of 1.05 as the example might show one of the most beloved motif, the fair market value is = 1.05×52,333 =54,950 

Art – Emerging Artists 

For emerging artists, valuation relies on gallery price developments and, if available, auction results. Key considerations include: