Fund Investing in Wine Favours Burgundies over Bordeaux

Written by: Tsveta van Son
October 24, 2019

Bloomberg recently reported that Elite Advisers SA’s wine fund Nobles Crus, one of Europe’s largest funds investing in wine, was boosting its Burgundy holdings over Bordeaux. Rare Burgundies have been enjoying increasing interest among investors in the last few months, with demand being most obvious at several recent auctions.

**Wine Fund Turns to Burgundies over Clarets**
Nobles Crus fund, whose assets include a Romanee-Conti 1915 Domaine de la Romanee-Conti harvested during World War I as well as Chateau d’Yquem Sauternes dating back to 1811, aims to keep more than 50 percent of its holdings in Burgundy, and as much as 55 to 60 percent, when appropriate. Bloomberg quoted Christian Roger, chief executive of Gruppo Vino e Finanza, Nobles Crus’ manager, as pointing out that people were becoming more interested in Burgundy. “I don’t think the prices are too high,” he opined. “I think there will be other domaines which will be sought.”

**“Hottest Auction Label”*8
Among the Burgundy domaines attracting most interest among those investing in wine is Domaine de la Romanee-Conti, with Bloomberg quoting wine and spirits columnist Elin McCoy as describing it as “the hottest label at auction today”. McCoy noted that among the reasons for the label’s recent popularity were its rarity and reputation as well as “the current craze for Burgundy”, mostly among Chinese collectors.

In the past few months Asian customers have shown significant interest in investing in wine from Burgundy, with the most recent example being Christie’s Hong Kong auction of wines from the Henry Tang collection which saw investors snap up all of the 809 featured lots. The collection included a wide range of Burgundy wines, from top level Grand Cru to village level and renowned Domaines to lesser-known up-and-coming producers. The auction’s top performer was a six-magnum lot of Romanee Conti Domaine de la Romanee Conti 1995, which sold for HK$1.2 million (£101,798), above its pre-sale estimate of HK$700,000 – HK$1,000,000.

Christie’s March sale in New York also saw some healthy Burgundy demand, with a lot of Domaine de la Romanee-Conti Assortment from 2000 fetching $22,990 (£15,114), comfortably above its high estimate of $20,000. In February, Sotheby’s (NYSE:BID) reported that at its London auction, a lot of six bottles of white Montrachet 1993 Domaine de la Romanee-Conti Grand Cru Burgundy went under the hammer for £21,150, whereas a similar half-case fetched £18,800, with both lots going to Asian buyers.

!m[Burgundy Maintains Momentum At Auctions](/uploads/story/1692/thumbs/pic1_inline.jpg)
**Label Diversification**
Among the reasons for the growing demand for rare Burgundies is perhaps the attempt of traders and collectors investing in wine to diversify away from heavily-traded clarets. Bloomberg quoted Miriam Wilson, one of the founders Elite Advisers SA, as noting that the fund did not only have Bordeaux wines, which are the most popular in the UK market.
“We have the Burgundy wines, we have the top wines from Italy and from Spain, and this diversification has given us the performance,” she explained.

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