Alberto Bottega is a pioneer of the application of the mathematical approach to asset management and investment in SA. As a one-time experimental physicist, he is conscious of the power of symmetry and patterns in both nature and the financial markets - and says SA is now well into the third phase of a stock market boom. His life to date can also be divided into three cycles: experimental physicist, investment analyst and wine farmer.
“I was born in Milan during the war, lived in rural Friuli and came to SA in 1951 when I was eight years old. I can remember the fresh Milanese panettone, and picking grapes in the vineyards.”
After a PhD in experimental nuclear physics at UCT and nine years of analytical research at AECI, which sponsored his studies, Bottega started doing consulting work in financial mathematics - “operations research, that kind of stuff”, he says. In 1985, he joined G T Ferreira, Laurie Dippenaar and Paul Harris in the early days of Rand Merchant Bank (RMB) and helped to launch the futures and options market in SA.
“My eureka moment came when I went to Chicago with Paul Harris in the mid-1980s,” says Bottega (64). “I was fascinated with the trading pits and the power of the market. RMB futures became the SA Futures Exchange [Safex] and both [JSE head] Russell Loubser and [former Safex chairman] Stuart Reese worked for RMB’s capital market. We used to make the market with interesting folk like David Bullard.
“A few years later we started RMB Asset Management with R150m under management, which became R15bn in five years. It was a time when merchant banks were taking the bread out of the mouths of insurance companies.”
So what prompted the wine cycle?
“Making wine was always an idyllic dream for me and I was looking for something to do when I retired - something to keep me busy and challenged,” says Bottega. “The idea of retiring to a farm was appealing. I started reading Wine magazine and went on two overseas trips in the mid-1990s - one to France organised by the Cape Wine Academy and one to Italy with Giorgio dalla Cia, who was then making wine at Meerlust. Giorgio comes from a village 15 km away from our family home in Friuli.”
Bottega found wine confusing and intriguing. “There were good wines and bad wines and I soon found out the problems with making good wine after investing in Whalehaven, just outside Hermanus. Pinot noir is a very temperamental grape and we lost a lot of wine - three harvests, to be exact. I learnt the hard way how to make good wine, but with much friendly advice from many in the wine industry. However, getting it to market is something else entirely.”
Indeed, there is so much good wine around and so few specialist shops. “When you buy a farm and start making wine, that’s the fun part. It’s the challenge I enjoy the most - experimenting with the degree of ripeness of the grapes and playing around with wood.” Bottega’s background in experimental physics had some use after all.
But the biggest challenge, he says, is a marketing one - how to get someone to want to buy a bottle of your wine.
Bottega bought a farm - “which we named Da Capo, Italian for from the beginning’ - on Sir Lowry’s Pass at the end of 1997 and planted vineyards with a mix of French and Italian cultivars. “The plan is to continue making classic styles at Whalehaven, while the Da Capo fruit will go into our Idiom brand, which is made in a rich, riper, more intense style.”
Wine and banking have a curious conjunction - FirstRand’s Ferreira has invested a huge amount of time and money in Tokara, and all the significant wine shows and competitions (with the notable exception of the Soweto Wine Festival) are sponsored by banks. Bottega makes a couple of interesting points regarding this phenomenon.
“Wine is a cultural thing, it is central to celebration and it gets people thinking about things they have in common,” he says. “Making wine is very basic, yet it is like fine art and has a strong transcendental and aspirational component, which is something that appeals to bankers. And there’s a good precedent in the Rothschilds and Bordeaux, where many estates were essentially created in an 18th-century banking boom and several are owned by insurance companies.
“And of course, making wine is not cheap - you need money. In fact, it’s very difficult to make money from wine. But it certainly gives one pleasure to see people enjoying one’s wine.”
Source: Neil Pendock, for Financial Mail.
http://secure.financialmail.co.za/07/0504/people/people.htm
