THE RIS­ING TIDE OF LIQ­UID AS­SETS

SAVOUR For rel­a­tively mod­est amounts up front, fine wines can de­liver ex­cel­lent re­turns when di­ver­si­fy­ing your port­fo­lio.

Robb Report (Malaysia) - - Savour - April - 2018 By WIL­LIAM KEL­LEY

At first glance, fine wine presents al­most un­lim­ited op­por­tu­ni­ties for pas­sion­ate in­vestors. While drinkers might balk at the US$3,000 (RM12,000) av­er­age price of a bot­tle of Petrus, one of Bordeaux’s great­est reds, that sum is triv­ial be­side the cost of a new Bu­gatti sports car or Patek Philippe watch.

“In the last few years, it has been the top wines from the best pro­duc­ers in great, ma­ture vin­tages that have ap­pre­ci­ated the most,” ob­serves Jamie Ritchie, head of Sotheby’s global wine busi­ness. As prices for young wines soared at the be­gin­ning of the mil­len­nium, ma­ture bot­tles in­creas­ingly looked like a com­pelling propo­si­tion.

Red Bur­gundy has led the field by a sig­nif­i­cant mar­gin, says Ritchie, as bot­tles of the re­gion’s most cov­eted es­tates have mul­ti­plied in value. This ap­pre­ci­a­tion has oc­curred with young wines as well as old. The wines of Do­maine de la Ro­ma­nee- Conti (DRC), one of the re­gion’s most pres­ti­gious ad­dresses, have wit­nessed par­tic­u­lar growth. “Even when clients with­out much knowl­edge of Bur­gundy have in­vested in DRC, it’s amaz­ing to see how well some of their pur­chases have per­formed,” notes Julien Froger, di­rec­tor of Hong Kong–based L’im­per­a­trice, a spe­cial­ist Bur­gundy im­porter. “For ex­am­ple, La Tache 2004 and 2007 (the least at­trac­tive vin­tages of the decade, thus the cheap­est) have more than dou­bled in price over the past four years. Even DRC’S Echezeaux (typ­i­cally among the least ar­dently pur­sued grand crus in the do­maine’s port­fo­lio) saw prices in­crease by nearly 50 per cent in the past year.” What ap­plies to DRC ap­plies equally to other bench­mark pro­duc­ers. The wines of Do­maine Leroy, Do­maine Ar­mand Rousseau and Do­maine Roumier have ex­pe­ri­enced

Ma­ture bot­tles in­creas­ingly looked like a com­pelling propo­si­tion.

While trends in the world of fine wine are driven by nu­mer­ous fac­tors, qual­ity and scarcity in­vari­ably top the list. Well- in­formed oenophiles will likely be eye­ing the fol­low­ing hand­ful of pro­duc­ers in the near fu­ture. sim­i­lar gains. In Hong Kong, Froger points out, bot­tles of Musigny from Leroy and Roumier now trade for the same sums as DRC’S best, hav­ing re­spec­tively tripled and dou­bled in price in just a few years.

“The list of col­lectible grow­ers has been ex­pand­ing,” says Ritchie, cit­ing Do­maines Mugneret- Gi­bourg and Robert Groffier as ex­am­ples. Froger men­tions Do­maines Syl­vain Cathiard and Ce­cile Trem­blay as two new stars; War­ren Leonard of Wash­ing­ton DC’S Wey­gandt Wines points to Do­maine Four­rier; and Pa­trick O’con­nor of London’s Fine + Rare sin­gles out Ar­naud Ente and Do­maine Bi­zot. “Buy­ers who’ve al­ready as­sem­bled sub­stan­tial cel­lars are com­ing to see pro­duc­ers such as th­ese as a key com­po­nent of their col­lec­tions,” ob­serves O’con­nor.

An­other re­gion that has wit­nessed rapid growth is Pied­mont in north­ern Italy. Ac­cord­ing to Wine Lis­ter, the re­gion’s five top brands – which in­clude pro­duc­ers Bar­tolo Mas­carello and Gi­a­como Con­terno – have been ap­pre­ci­at­ing by 26 per cent over the last two years.

Where does Bordeaux – long the dom­i­nant re­gion in the fine-wine trade in terms of both value and vol­ume – fit into this equa­tion? An­thony Maxwell, di­rec­tor of Livex, a London-based ex­change for in­vest­ment­grade wine, says: “Bordeaux was 90 per cent plus of the mar­ket a few years ago and is now circa 70 per cent.”

But if Bordeaux’s ap­pre­ci­a­tion has been slug­gish, the re­gion does seem to be re­bound­ing from the price crash that be­gan in 2011. Some pro­duc­ers have per­formed es­pe­cially strongly. Wine Lis­ter points to such ex­am­ples as Le Pin and Chateaux Figeac, while Ritchie sin­gles out Chateaux Pon­tetCanet and Mon­trose as high per­form­ers.

Oenophiles in search of op­por­tu­ni­ties are find­ing their quest a com­pli­cated one. Bur­gundy seems set to con­tinue soar­ing, but th­ese wines are dif­fi­cult to find thanks to the re­gion’s mi­nus­cule vol­ume of pro­duc­tion. DRC’S Ro­ma­nee-conti vine­yard, for ex­am­ple, yields around 5,000 bot­tles in a good year; by com­par­i­son, Bordeaux’s Chateau Lafite Roth­schild pro­duces 240,000 bot­tles in an ex­cel­lent vin­tage. “Bur­gundy will al­ways be the ul­ti­mate col­lectible, but it’s a tapped mar­ket,” says som­me­lier-turned-wine­maker Ra­jat Parr. “Re­tail­ers will only sell the top wines to good cus­tomers who sup­port their port­fo­lios across the board.”

Fur­ther com­pli­cat­ing mat­ters, re­lease prices are higher than they once were for ex- do­maine and ex- Chateau. Not long ago, a keenly priced al­lo­ca­tion of blue- chip Bur­gundies bought di­rectly from the source amounted to a li­cence to print money. But to­day, ac­cord­ing to Greg Castells, pres­i­dent of Mar­tine’s Wines: “Pro­duc­ers have caught up on pric­ing.” Castells, who im­ports the cov­eted Bur­gundies of the re­gion’s grande dame, Lalou Bize-leroy, ob­serves that for­merly un­der­val­ued wines have been rad­i­cally repo­si­tioned in the last decade in re­sponse to their bur­geon­ing mar­ket value. “The days of mak­ing a 600 per cent re­turn on a bot­tle are long gone,” he con­cludes.

Bur­gundy still of­fers op­por­tu­ni­ties for in­vest­ment. The same scarcity that makes the wines so hard to lo­cate also guar­an­tees their ap­pre­ci­a­tion. But build­ing a mean­ing­ful col­lec­tion to­day likely re­quires ex­pert ad­vice

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.