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Charles Banks

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Profile

Terroir Capital founder Charles Banks has a passion for great wine, which is why he uses his capital management skills to help support its creation. Born in Virginia in 1967, Banks grew up in Georgia and pursued his higher education there, earning a BA in History and Philosophy from The University of Georgia in 1990. In 1992, he took a wealth management position with CSI Capital Management. By the time he was 32, he was serving as CEO. Then he decided to make an unexpected pivot.

In 2000, Arnon Milchan and Jerry Levin made the sharp young financier a proposal. They had a vineyard development project in the works, and they wanted Banks to be a partner. Banks jumped on board, and Jonata was born. Six years later, he made his second foray into the wine business, joining with Stan Kroenke to purchase Napa Valley’s Screaming Eagle Winery. Banks radically revamped the already respected winery. To the chagrin of many, he tore out 70% of the vines, releasing the vineyard from obligations to sell grapes to other wineries and creating scarcity. In just two years, the price of a Screaming Eagle Cabernet had gone from $250 to $750.

In 2009, Kroneke bought out Banks’s share of their joint-owned vineyards. Banks decided to take advantage of the situation, turning it into an opportunity to focus on Terroir Capital. While he’d founded Terroir in 2004, they had yet to acquire their first winery. Banks had big dreams for the enterprise, envisioning it as a global wine company. He was no longer intrigued by the flashy scene he’d encountered surrounding Screaming Eagle, however. Instead, he turned his sights towards fostering authentic wineries quietly making excellent wines.

The first of those wineries was Mulderbosch Vineyard, a South African winery Terroir purchased in May 2011. By 2015, Banks’s insights had helped the winery become a thriving enterprise, bottling 270,000 cases of wine per year. Banks has since grown Terroir into an underground international wine web. Investments include Trinity Hill in New Zealand, Maison L’Oree in Burgundy, and Mayacamas Vineyards, Sandhi, Qupé and Wind Gap in California. Banks is also an investor in Tennessee luxury hotel Blackberry Farm and Santa Barbara’s Inn at Mattei’s Tavern. By 2016, Terroir Capital was managing around $200 million of assets in wine and hospitality.

Banks lives with his wife, Ali, and their children in Atlanta, GA. In summer 2011, the couple launched Cultivate. The philanthropic wine company sources juice from across the globe and donates 10% of sales to charitable causes.

(Sources used to write this entrepreneur’s profile include a Wines and Vines article from September 2014, a Vinepair article from February 2016, a Forbes article from January 2016, a Decanter interview from May 2015, the Sandhi Wines website, and the entrepreneur’s LinkedIn)

Companies and Investments

Terroir Capital (Founder, Managing Partner), Cultivate (Co-founder), Screaming Eagle (Former Owner), Jonata (Former Owner), CSI Capital Management (President)

Lessons Learned

You have to look at what the consumer is seeing. In today’s world, the consumer has the ability to buy or not buy what they want; they are the most important aspect of ensuring if your investment succeeds or fails. Just because you as an investor are passionate about something, it does not mean the consumer will be, and it’s important to recognize that… One has to ask themselves, do consumers actually want this. (Charles Banks on putting yourself in the shoes of the consumer when developing products, in a Vinepair article)

We weren’t seeking a ‘perfection’ that would filter out the character of the place. We embraced the wabi-sabi of imperfection. That’s the day I felt, ‘Well, it’s working—Mayacamas is driving the story, not Charles Banks, not Andy Erickson. That’s the authenticity. That’s the voice of this brand.’ (Charles Banks on placing a premium on enhancing a business’s character rather than dictating it, in a Forbes article)

When we are looking at a potential acquisition, we put it through several filters. First and foremost, we look at the people. Are they a fit? People are everything to me in business. Our partners need to fit in with each other and share our values. Next, we look at the place and the story to make sure they are inspiring, fit with the rest of the portfolio and don’t create conflicts for our team. Third is potential. We must see and feel the potential to make something special and make a difference. We need to make wines that make a statement and have the potential to define whatever category we are in. Whether it’s the Chardonnay of Sandhi, the rosé of Mulderbosch or the Cabernet of Mayacamas, we have the goal to be definitive. The final criterion is financial. We need to see a clear path to profitability and long-term sustainability. Our job ultimately is to provide the capital and discipline to get there. Sometimes this requires significant patience. It took me six years to buy Mayacamas and over three to buy Mulderbosch—well worth the wait in both instances! (Charles Banks on the multi-faceted considerations when looking at a potential acquisition, in a Wine and Vines article)

Inspiring Quotes

I cant understand why people are frightened by new ideas - Im frightened by old ones.

John Cage

Friendship is unnecessary, like philosophy, like art…It has no survival value; rather it is one of those things which give value to survival.

C.S. Lewis

Charles Banks's Quotes

People are everything to me in business.

Charles Banks

The best rule of investing is: do you actually understand everything that could go wrong? You may not be able to prevent it, but do you at least know what could happen?

Charles Banks

We are looking for definitive projects. We always ask, ‘Can we be a game changer here?

Charles Banks

Influential Books

Mentors

Arnon Milchan, Jerry Levin

References


Technical

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