Nobles Crus wine fund valuations under spotlight

Valuations of fine wines by the Nobles Crus wine fund have been questioned by the Financial Times and by French website LeVif/L’Express.

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.

Written by Jim Budd