Collecting Fine Wines Could Be a Good Investment, Say Experts
Hazel Parry 30 November 2008
If there is one thing wine experts appear to agree on, it is that Bordeaux remains a safe option when looking for a fine-wine investment.
Anthony Hanson, senior consultant with Christie’s wine department, says Bordeaux over the years has proved fairly safe and dependable.
“However, I would put in a word for Burgundy too,” he said.
Buying at auction or from a reputable merchant is just one way of starting your collection, and Mr. Hanson says Christie’s experts are willing to advise anyone considering this type of investment. It is also advisable to go for wines rated by renowned critics such as Robert Parker, and to ensure they are insured at replacement value and stored in the best possible conditions.
Greg De’eb, general manager of Crown Wine Cellars in Hong Kong, says he has seen more collectors shipping wine back to Hong Kong since the wine tax was removed in the last budget.
“Hong Kong is the wine paradise at the moment. It is the only developed economy with no tax and no VAT. Worldwide, collectors have now accepted that wine can travel around the world in refrigerated containers and it doesn’t affect their value. What determines the price is the condition of the bottle, has the label been scratched, is it in its original case and where has it been stored?” he said.
But there are other options for those who don’t have the knowledge or confidence to make the purchases themselves, such as wine investment funds and brokers.
For Hong Kong investors, the Wine Investment Fund is like a mutual fund, based in Bermuda with a portfolio of Bordeaux wines. The minimum investment over a five-year term is £10,000 (HK$119,000), with a management fee for private investors of 1.5 per cent a year and a performance fee of 20 per cent.
“Our first tranche was issued in 2003 and for every £100 pounds the investors gave us, they got back £208.61. They’re very happy and we are very happy,” said director Andrew della Cassa.
Premium Liquid Assets, a brokerage, buys the wines for investors, stores and insures them for three years and then sells them. The minimum investment is one case - 12 bottles - which at current prices would be around HK$60,000.
A fee of 12 per cent is paid only when the wine is sold, says Angelina Teh, the company’s senior portfolio manager based in Hong Kong.
“It’s very simple,” says Ms. Teh.
“We send the client a quarterly valuation. If they are comfortable with the appreciation, they can liquidate before the end of the three years but we do not refund you any part of the storage or insurance [fees].”
At the end of the day, as with all investment, wine carries risks. Journalist Jim Budd keeps a log on his website, Investdrinks.org, of wine investment troubles and the companies involved. He also offers some sobering advice in the current climate.
“If you do want to invest in wine, wait until you judge the market has bottomed out, then buy. The old adage still applies - buy at the right time, at the right price with right provenance and from a reputable company, and store it in your own name,” he advises.
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Collecting Fine Wines Could Be a Good Investment, Say Experts
Hazel Parry
30 November 2008
If there is one thing wine experts appear to agree on, it is that Bordeaux remains a safe option when looking for a fine-wine investment.
Anthony Hanson, senior consultant with Christie’s wine department, says Bordeaux over the years has proved fairly safe and dependable.
“However, I would put in a word for Burgundy too,” he said.
Buying at auction or from a reputable merchant is just one way of starting your collection, and Mr. Hanson says Christie’s experts are willing to advise anyone considering this type of investment. It is also advisable to go for wines rated by renowned critics such as Robert Parker, and to ensure they are insured at replacement value and stored in the best possible conditions.
Greg De’eb, general manager of Crown Wine Cellars in Hong Kong, says he has seen more collectors shipping wine back to Hong Kong since the wine tax was removed in the last budget.
“Hong Kong is the wine paradise at the moment. It is the only developed economy with no tax and no VAT. Worldwide, collectors have now accepted that wine can travel around the world in refrigerated containers and it doesn’t affect their value. What determines the price is the condition of the bottle, has the label been scratched, is it in its original case and where has it been stored?” he said.
But there are other options for those who don’t have the knowledge or confidence to make the purchases themselves, such as wine investment funds and brokers.
For Hong Kong investors, the Wine Investment Fund is like a mutual fund, based in Bermuda with a portfolio of Bordeaux wines. The minimum investment over a five-year term is £10,000 (HK$119,000), with a management fee for private investors of 1.5 per cent a year and a performance fee of 20 per cent.
“Our first tranche was issued in 2003 and for every £100 pounds the investors gave us, they got back £208.61. They’re very happy and we are very happy,” said director Andrew della Cassa.
Premium Liquid Assets, a brokerage, buys the wines for investors, stores and insures them for three years and then sells them. The minimum investment is one case - 12 bottles - which at current prices would be around HK$60,000.
A fee of 12 per cent is paid only when the wine is sold, says Angelina Teh, the company’s senior portfolio manager based in Hong Kong.
“It’s very simple,” says Ms. Teh.
“We send the client a quarterly valuation. If they are comfortable with the appreciation, they can liquidate before the end of the three years but we do not refund you any part of the storage or insurance [fees].”
At the end of the day, as with all investment, wine carries risks. Journalist Jim Budd keeps a log on his website, Investdrinks.org, of wine investment troubles and the companies involved. He also offers some sobering advice in the current climate.
“If you do want to invest in wine, wait until you judge the market has bottomed out, then buy. The old adage still applies - buy at the right time, at the right price with right provenance and from a reputable company, and store it in your own name,” he advises.
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