Decanter World Wine AwardsNobles Crus wine fund valuations under spotlight
- Monday 8 October 2012
Elite Advisers Mascherin (left) and Tamisier
The Financial Times asked wine trading platform Liv-ex to value 50 wines from Nobles Crus, the Luxembourg-based wine fund, part of Elite Advisers.
Nobles Crus, founded in 2007 by financiers Miriam Mascherin and Michel Tamisier, is one of the world’s biggest wine funds, with capital of €109.1m, and stock of more than 60,000 bottles of mainly high-end Bordeaux and Burgundy. The minimum investment is €125,000.
The Liv-ex valuation, based in the mid-price between bid and offer on its trading platform, was 36.7% lower than Nobles Crus’ valuation.
For instance, Liv-ex valued Chateau Lafite 2010 at €840 compared to Nobles Crus’ €1017.
Ten wine funds are valued by Liv-ex including the Wine Investment Fund and Wine Asset Managers (WAM).
Nobles Crus defends its valuations by saying that it is ‘in line with the global market’ and with the average price on search engine wine-searcher.com, which is based on retail prices with sales tax removed.
Nobles Crus Burgundies has significant holdings of DRC and Henri Jayer. It valued Jayer’s 1987 Echézeaux at €3025.86 per bottle in December 2011.
This had gone up to €4075.33 on 31 August. On wine-searcher the highest price for this wine is €3,262, from Red Wine Exchange in Hong Kong.
An automatic process will soon be introduced, Mascherin said.
This will ‘enlarge the source of information used for pricing. After having carried out extensive tests it has no impact on our current valuation, which validates and confirms what we do today.’
Nobles Crus is unusual in holding a significant proportion of old vintages in its fund. In December 2011, 23% of its Bordeaux was pre-1970 and 9% in Burgundy.
The Wine Investment Fund has nothing earlier than 1990, while 5%-6% of WAM stock is pre-1990.
Regarding provenance Mascherin said, ‘We only buy wine where sources can be proven and blind testing can be carried out. Any wine that has already been counterfeited is handled with the utmost caution and we would only buy from recognized approved sources.’
In April 2010 the Guernsey-based Vinum Fine Wine Fund was closed by its directors after the Guernsey Financial Services Commission (GFSC) raised concerns over its valuation methodology.
Have your say!
Mike
November 29 22:30
I agree with your comments but Jim has a point too.
Indeed :
1) auction prices, used by Nobles crus, do not reflect the amount actually going back to the seller's pocket after tax and commission (often times above 20%)
2) liv-ex represents 75% of total sales of traded wine in the secondary market, and as such, is probably the best indicator of true wine prices
3) Bordeaux's market place prices do not differ much from liv-ex quotes, both being based on real sales (I am in the wine business)
Giles Cadman
October 16 17:33
Liv-ex is flawed as are all of the valuers out there for NAV Fund Values, they provide a great insight for retail customers, but thats about it. It is open to manipulation and interpretation. The very fact they have different prices should demonstrate this. The Royal Institute of Chartered Surveyors have a Red Book which sets out how to value. The book runs into many pages, I can't imagine that Liv-Ex or any of the other platforms has such detailed notes or a document of that substance to refer to.
Selma
October 12 13:26
Jim, what's your point? Fund valuations are never at fire-sale prices.. they always assume an orderly exit. Do you have any idea how funds which invest in financial assets work?
I used to think that you were actually trying to do something good. Now I think you just have some personal mission to ruin th lives of those more successful than yours.
Jim Budd
October 09 07:35
Li-ex's mid price is an indicator of the trade to trade price. With a large wine fund it is unlikely that if there was a rush of redemptions that all the necessary wine could be sold at retail.