Would We Do It? Invest In Fine Wine?
Of course, neither TWIF nor any other recognised player in the fine wine investment world has a crystal ball. Risks plainly remain and indeed their information memorandum is replete with them – no less than three full pages of the 30-page document are devoted to a description of the risks attendant on investing in wine and on an investment via a mutual fund in general terms and via the TWIF product in particular.
And it’s a case of ‘all care and no responsibility’, in the sense that – absent fraud or gross negligence – investors formally absolve TWIF and its management from liability for any losses incurred in investing in the fund. There is of course nothing unusual in this per se – listed company shareholders are similarly positioned – but, as noted early in the piece, fine wine as an investment product has attracted its fair share of shysters.
Mostly though, such scams typically promote direct investment in physical wine – which oftentimes doesn’t exist – and are parlayed via aggressive cold calling to gullible punters sucked in by glib promises of high returns but who, when all’s said and done, ought to know better. This is the stuff of the FSA’s ‘Investment Scam’ advice and, doubtless, will be the focus of the just-announced initiative between The Met’s NFIB – National Fraud Investigation Bureau – and the newly-formed Wine Investment Association.
It’s a world apart though from investing in wine via established and visible investment funds, with track records and credentials. As noted, the investment is not risk-free and The Wine Investment Fund for one makes no bones about it. It’s also of course – at least not until a change in the law and the FSA’s negative stance – not an investment option available to ordinary British investors.
Be that as it may, the responses provided by TWIF to our questions go some way towards recalibrating our earlier reservations about fine wine investment. Would we put hard-earned cash into a wine investment fund rather than pony up quite a few pounds now and again to enjoy a first growth Bordeaux just coming into its prime? Not if the portfolio selection was our call – that would be rather more a gamble than an investment. But with trustworthy, level-headed expertise in our corner, and sharing our risk? Perhaps.