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Sommeliers look at their best options - 29th November 2008
By Oliver Charles Gearing -

As the number of wine funds grows, who better to advise on purchases than those who know wine best. Below are the comments made by some of the well known and leading sommeliers.

Domaine Roulot Meursault Les Luchets, 1996 - A mineral-driven, with an oak background is delicious, pure and so clean. “This winemaker doesn’t get enough respect”.

Château de Beaucastel Chateauneuf-du-Pape, 1999 - It’s not as alcohol-driven as a California cabernet; it’s more balanced, but still remains powerful and rich. A one that is worth keeping an eye on.

Antica Terra Willamette Valley Pinot Noir, 2006. Produced in Oregon seen as a top-tier wine in three or four year’s time. A sommelier describes this wine as a “pedigree of the winemaker”.

Emrich-Schönleber Riesling Mineral, 2007. A sommelier describes the wine as “Riesling is an undervalued variety and with this wine the quality is way higher than the price “.

To date, wine companies have focused exclusively on first-growth Bordeaux, from known brands and best possible vintages. For example one fund is packed with products of storied chateaux, including Latour, Lafite-Rothschild, and Margaux, from years such as 1982, 1989-90, 1995-96, 2000 and 2005. The $22m under management equates to roughly 1,700 cases, stored in special warehouse. It includes one of the priciest cases of 2005 Petrus valued at 35,000k.

Such funds are capitalizing is burgeoning Chinese, Indian and Russian money, as the countries’ financial elites acquire a taste for the fine wine.

This is not to say that fine wine is always up on a high. As with any asset, it is dependent on supply and demand. If the emerging market sees their wealth melt away thanks to a global slowdown – the demand for pricey vintages could decrease as well.

It is fair to say with many investments, it is a question of access. Products of the great chateaux are parceled out, often to professional wine brokers with long-standing relationships. While individual investors have little clout, wine funds offer proper connections to obtain the fine wine in the first place.

When the time to sell comes, it is the professionals who usually find buyers at the right price. For a private investor the market is little, like swimming with sharks.

The personal pleasures of wine collecting fights against the tactile benefits of owning and holding the precious bottles. Unfortunately, wine funds keep a military control of their stock, since the supply chain from chateau to final storage facility has to be “pristine and well-documented”. Wine funds continue to gain traction. As this economic downturn has worsened, the traditional “alternative” assets such as commodities and real estate have been sinking together with the Dow.

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