Beruflich Dokumente
Kultur Dokumente
Contents
Introduction & Cult Wines Ltd Page 3 Director Proles Tom Gearing Philip Gearing Page 4
The Market Overview Market Size Wine Market Performance Emerging Markets Inuence
Page 5-8
Our Investment Grade Criteria Robert Parker Jr Vintage Branding & Marketing
Page 10-11
Page 12
Why Invest in Fine Wine? Page 13-14 Additional Motives for Investing in Fine Wine SWAG Tax Ecient Investing
Why Invest with Cult Wines? What do we Oer? How to Begin? How Does the Investment Work?
Page 15-16
Page 17
Page 18
Contact Details
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Introduction
With the emergence of new markets in Asia increasing global demand the delicate balance of managing supply and demand has never been more acute, probably in the entire history of the ne wine market. The market for ne wine has increased steadily over the last 5 years and this has been exacerbated by the emergence of China as a world superpower alongside continuing demand for ne wine in the BRIC nations. The competition for the worlds greatest wines is increasing exponentially, increasing market condence that we will see continued growth over the short, medium and long term.
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Director Proles
and nished runner-up in Season 8 of the BBCs The Apprentice after battling against 15 other candidates over 12 gruelling weeks for the opportunity to win a 250,000 investment from Lord Alan Sugar. Toms rm belief in ne wine as an asset class, saw him pitch a ne wine investment fund idea to Lord Sugar and his advisors which was described by Mike Soutar as one of the best business plans Ive ever read.
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The Market
The Market
*Cult Wines Index: Tracks a basket of 10 wines representative of our stock exposure.
Fine Wine has also been proven to be a wellestablished asset class in times of nancial turmoil, providing a safe haven for investors. As the search for asset diversication, capital growth and an ination hedge grows, it is clear that interest in this market both from individual and institutional investors is rising fast. The establishment of Wine Investment Funds in the UK, China & most recently France highlights
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A proven track record: Between 1950-1985 the Vintage Claret Index demonstrated an average annual compound return of 15.2% The 1983-2002 Fine Wine Index showed average annual compound growth of 12.3% Between 2003-2007 the Liv-ex 100 average annual compound growth rate was 15.3% Between 2007-2012 the Liv-ex 100 has returned 65%, despite experiencing two economic downturns in that period.
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The Market
The Far East, most notably Hong Kong and China have had an enormous impact, it is clear that the regions buyers are the driving force behind the positive trajectory of Bordeaux Fine Wine in the last few years. Hong Kong has led the way for the Far East and in 2008 they abolished import duty and taxes on Fine Wine, becoming the rst tax free wine port amongst the major economies. As a result wine imports rose by 88% in the immediate wake of the duty abolition and it is estimated that as wine sales fall in Europe they will double in Asia to US$17 billion by the end of 2012 and US$27 billion by 2017. This will be driven largely by mainland China where economic growth, rising income and lifestyle changes have led to a 360% increase in wine imports since 2005. As a result the Asian Fine Wine Market is expected to be worth $870million within the next 10 years. Mainland buyers are pricing out consumers from Japan, Taiwan and in some cases Hong Kong in their quest for top quality Bordeaux Chateaux. This has led to a staggering appreciation of prices for First Growth since 2009. Coupled alongside Chinas economic growth, which has seen its economy becomes the worlds second largest,
China is now the worlds 5th largest wine consumer. It has overtaken the UK and Germany as the largest wine importer last summer, and Hong Kong has surpassed New York as the worlds biggest wine-auction market. It is now the place to auction ne wine, and this dominance has seen both Ch. Late-Rothschild and Ch. Latour hold private cellar auctions in Hong Kong. The level of global interest in wine investment is continuing to rise according to new gures released by Vinexpo, which show a 25 per cent increase in visitor numbers to its recent Asia-Pacic event. The traditional markets of Europe and North America underpin the marketplace but it is the emerging markets that keep it buoyant. With the continuing economic development of the BRIC countries is it only natural that we are witnessing a new inux of consumers for luxury goods such as ne wine. Take India: It has emerged as one of the fastest growing markets for wine yet for the countrys cast population of 1.1billion; consumption remains extremely low, indicating huge growth potential. We are already starting to see signs of various factors such as government policies, increasing disposable income and the inuence of western culture driving Indian demand for ne wine.
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The Market
Key notes from Asia-Pacic Wealth Report by Cap Gemini & Merill Lynch
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Asia-Pacic HNWIs appetite for investments of passion increased in 2010, portfolio diversication has emerged as a strong driver of such demand by HNWIs in Asia-Pacic. Asia-Pacic HNWIs continued to favour Luxury Collectibles as a hedge against ination and currency risk, as well as for aesthetic and cultural appeal. HNWIs from China, India, Singapore, and Hong Kong were especially active in the investments of passion space in 2010.
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You dont have to be an expert to prot from wine. Just invest with one.
Simply call one of our portfolio managers today to see what we can do for you.
Robert Parker Jr
Robert Parker is the preeminent wine critic and has been predicting and inuencing wine market trends for over 25 years. He has helped dene the modern wine market and his ratings are probably the most signicant contributing factors in setting the prices for newly released wines. His 100-point scoring model and uniquely styled tasting notes in his publication The Wine Advocate are without doubt the most widely used by rms and collectors worldwide. The price surge for the 2009 vintage is the most recent example of Parkers inuence on the market. The U.S. wine critic awarded 18 Chateaux the perfect 100pts score, prompting an increase in price of 50-100% for certain wines.
Vintage
Vintage quality is very dependent on climate factors, making each vintage unique, separating the average from the good and the good from the great. The exceptional vintages have an elevated status and greater demand which commands a premium in price. Other vintages may reach their drinking windows earlier than others, aecting consumption patterns. With outstanding vintages such as the lauded 1961 and 1982, and more recently 2005, 2009 and 2010, global demand for these wines amongst consumers, collectors and investors is rising fast, which can lead to sustained price development. Nevertheless, weaker vintages (o-prime), with substantially lower release prices, can also deliver strong investment potential and each vintage is assessed on its own merit alongside other contributing factors.
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2008 Late bottles display the Chinese symbol for 8 which is considered lucky
Mouton chose Chinese artist Xu Lei to design the label for the 2008 vintage
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The investment objective is to generate high capital appreciation across short, medium and long term strategies through investment in both physical and en primeur wines from Bordeaux and other selected regions. Portfolios are created for each individual client based on risk and term strategy. Each portfolio targets a return in excess of 15% per annum over a recommended investment term of 5 years. Portfolios do not have a xed term and clients can liquidate all or any part of their portfolio at any stage, typically when advised by their Portfolio Manager. This is free of any early termination or cancellation charges. We apply an active approach to portfolio management and will seek to achieve maximum performance for clients through detailed analysis and specic market factors as determined by our analysts. Portfolio Managers keep clients up to date with the performance of their stocks and will approach clients on an individual basis, making personalised recommendations to enhance their portfolio. Outperforming the Market: Through our stock selection strategy, intuitive reactions to specic market conditions and a well-planned exit strategy, we are able to outperform the key market indices.
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SWAG
SWAG, which is short for silver, wine, art and gold, is the term coined by Joe Roseman, a former hedge fund manager, in his book Swag: Alternative Investments for the Coming Decade. SWAG assets tend to have the ability to last and perform well and they provide portfolio protection in a way that traditional nancial assets do not. Equities can go bust and bonds can default, but a bottle of Late will always be a bottle of Late. Many nancial analysts struggle to value assets like SWAG because it does not have an income stream. However, the nancial pages are littered with examples of equities with income streams that analysts have badly misjudged as income streams dont really help analysts see those bombshells coming. Ideally, the addition of a new asset causes the overall return of the portfolio to rise or stay the same but at the same time reduces the volatility. Historically, ne wine has managed to do that as academic research shows that ne wine has a low correlation with traditional nancial assets. In his point of view, there are two key drivers for wine prices. Firstly, the very best wines are highly restricted in supply and therefore the supply curve for these wines is almost perfectly inelastic. Secondly, demand is rising constantly and this will continue to be a key factor. He believes wine is an asset that needs to be held for the medium term and as a part of a well-constructed portfolio.
Investing in ne wine is a good way to preserve wealth in times of rapidly rising ination
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The Cult Wines Team in Bordeaux for the En Primeur Tastings Apr 2012
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Cult Wines do not levy any early redemption charges at any stage or charge any selling commission.
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Enjoy Wine
From New World Pinots, Barolos and Tuscans, Burgundy and the most prestigious Bordeaux estates we hope to introduce wine enthusiasts of all levels to the worlds premier wine producers. Furthermore we are happy to arrange private tastings for friends, small groups or corporate events.
Feel free to contact a member of our team to arrange a tasting or simply to request further information.
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Above: An interview with Tom Gearing featured in Britains best-selling nancial magazine - MoneyWeek Right: Director Philip Gearing has been involved in the market since 2001 Financial Times
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