SAILLANS, France - Is he a vintner or is he a money manager? It depends on which business card he hands you. Colin Ferenbach actually is both, although he calls the former activity "a very expensive hobby" and considers the latter his career.
If you want investment management, Mr. Ferenbach can provide you with two forms of an equity style that selects stocks that show growth-at-reasonable-price characteristics through Haven Capital Management Inc., New York. The strategy in both forms is value oriented and contrarian. For separate accounts, which total $600 million from a mostly institutional client base, the strategy stays within the midcap range. The Haven Fund, an $84 million mutual fund, invests in a more diverse capitalization range. Mr. Ferenbach is a founder and portfolio co-manager at Haven Capital; his partner and co-manager is Dennis Durkin.
Retired from Goldman
The Haven Fund began as a limited partnership that invested the assets of retired partners of Goldman Sachs Asset Management, New York, said Mr. Ferenbach, who was a marketer at Goldman Sachs for many years. The limited partnership was converted to a mutual fund in 1984 and opened to outside investors, partially to create more liquidity and because the limited partnership had to be dissolved after 10 years. Many Goldman Sachs ex-partners remain invested with Haven, which was named by a client who noticed the nautical art on Mr. Ferenbach's office walls depicted safe-haven harbors around the world and related that theme to the focus of the investment strategy - protection of principal.
Just running a money management firm would be more than enough challenge for most people, especially in the mid-1990s when value and midcap stocks were punished so brutally. But Mr. Ferenbach had another project in the midst of times he described as "quite hard" for the money management firm.
He and a partner decided to make an investment in France "that could not miss" in late 1986, when the exchange rate was 10 francs to the dollar. Mr. Ferenbach looked at all sorts of properties and in "a fit of madness" bought a centuries-old vineyard, Chateau La Vieille Cure (which translates as the Old Parsonage) in Saillans in the Bordeaux region of France. Financing for the purchase of the vineyard - 100% of it - came from the French government.
"We should have bought an apartment in Paris. It would have been a lot less trouble," he said. But he was a wine lover and when he saw the Chateau La Vieille Cure, he knew the land could produce "a very good bottle of wine." The vines themselves were in good shape, but soon after buying the vineyard, it became obvious the winery had to be completely modernized.
With a new wine-making facility, good grapes and a manager who had wine flowing in his veins - he grew up next door to the Old Parsonage and has his own vineyard - Mr. Ferenbach assumed selling the wine would be like selling the corn and soybeans he grew on his farm in Maryland. But he found the Bordeaux wine trade very clubby, and initially unwilling to sell La Chateau La Vieille Cure wine.
So Mr. Ferenbach put his experience as a marketer to work and made his own markets for his wine. A lucky break put the wine onto the shelves of Sainsbury's PLC, the U.K.'s largest grocer, in the late 1980s; Sainsbury's still buys 1,000 cases a year. Similar breaks and much hard work to build a brand name finally made the Bordeaux wine traders take notice and they began to sell Chateau Le Vieille Cure wine in the later part of the 1990s.
Some in U.S.
Only 15% of Mr. Ferenbach's vintages are sold to the U.S. market, but they are available in some East Coast retail shops for around $22 per bottle and in New York City restaurants for $45 to $60 per bottle. Despite the per-bottle price, Mr. Ferenbach said he mainly uses the vineyard investment as a tax loss. He and his partner have made money only once in the 16 years they've owned the property, although 2001 is already shaping up to be "a gangbuster year" in which Chateau La Vieille Cure will again turn a profit.
Mr. Ferenbach, who started in the money management business in 1957, said he has no intention of retiring - he's much too busy and is obviously having too much fun. He and Mr. Durkin are formulating a succession plan for Haven Capital and likely will bring in several younger managers and give them an equity stake at some point.
If and when he does retire, Mr. Ferenbach will face new challenges. Which hobby to focus on - making wine, growing grain crops or sailing? And where to live - New York City, an American farmhouse in rural Maryland or a French country house with a pool in a small town in the middle of Bordeaux wine country.
