CAN WINE BECOME ONE OF THE PROTAGONISTS OF ALTERNATIVE INVESTMENTS TO THE TRADITIONAL ASSET CLASSES?

One year after the international economic crisis hit, Liv-Ex, the index that represents the 100 most prestigious and sought after wines in the world, has begun to show some more comforting signs (in August it rose by 5%, the highest increase since mid 2007). This increase could bring wine back among the leading investments whose earnings are not attached to traditional asset classes. Specialized investment funds of this sort already exist, like the “Vintage Wine Fund” that has over 100 million euros invested with Bordeaux the central part of its portfolio and, which, in recent years, has maintained a constant value; or like the “Noble Crus”, which includes Credit Suisse, HSBC, Bnp Parisbas, and Credit Agricole among its investors who manage 15 million euros; or the stock company “Winecapital” whose subscribers are entrepreneurs and professionals with a passion for wine, entering at a minimum quota of 50,000 euros for at least 3 years and minimum guaranteed earnings of 10%.

Though investing in wine is definitely considered a prestigious investment it is not, however, a choice without risks. One of the most evident criticisms is that of liquidity. At the moment one exits a fund, in fact, the holder must sell the bottles of wine, which, at a specific time might be hard to liquidate at the price desired. Not only: selling wine is not for just anyone. It takes years of experience and solid relations based on trust to negotiate a sale.