If further vindication was required that purchasing fine wines has sound investment potential, all one needs to do is look at the results of a recent auction of fine wines in New York City, where a number of new world records were set.
In order to convince clients to invest in fine wines requires satisfying a whole set of criteria, including having a proven track record of growth, a renowned reputation and good secondary market demand. Interest in purchasing fine wines has become global, with especially strong interest coming from the Far East.
Traditionally it has been the vintage Bordeaux wines that have dominated the investment portfolios; however more recently it is top Burgundy wines that have proved to be a real attraction, with the Liv-ex 100 index rising by 7.3 percent in the first four months of the year.
In order to compliment 10 years of trading solely in Bordeaux classified growths, BWC Management
& Consulting decided to widen their portfolio of wines by adding those from Burgundy and Tuscany (Super Tuscans); all of which satisfy the demanding criteria.
Burgundy is very well known for the quality of its wines and its excellent market performance; however Tuscany has also performed very strongly with the Super Tuscan 50 Index outperforming the Liv-ex 50 since 2007. In the five year period up to June 2012, the Super Tuscan wines, which consist of the last ten vintages of Masseto, Ornellaia, Sassicaia, Solaia and Tignanello showed a five-year-return of 76 percent.
At a recent New York auction held at the end of April, 96 percent of the wine, totalling $2.48 million was sold. It was the DRC Burgundy wines which took the honours, with nine of the ten lots at the auction being from the Domaine. The top lot at the auction was a three magnum OWC of the 2001 Romanee-Conti selling for $61,500; this was followed by a 12 bottle case of 1978 La Tache selling for $59,040 and in third place a three bottle OWC of 1999 Romanee-Conti, going for $39,360.
A total of 43 new world records were set at the auction, with more than half being Burgundy wines; however whilst they dominated, it was apparent how much the global wine market has diversified, with world records for Super Tuscan wines including Masseto and Soldera.
Of all the Super Tuscan wines, the recent sale of a 15 litre bottle of Nebuchadnezzar, of Masseto for $49,000 could well result in a surge in demand for this and other Tuscan wines of similar quality. Since 1998 the value of Masseto has increased by 448 percent.
The trend towards diversification and collectors wanting to expand their wine portfolios has seen Italian wines and especially the Super Tuscans emerge as a strong alternative to the Bordeaux and Burgundies.
At a recent trade fair in Hong Kong, Arlene King, chief wine buyer for BWC Management & Consulting
announced that the company would be adding other wine growing regions to its list of products after 10 years of trading solely in Bordeaux wines.