Older vintages ripe for investment, says fund director

Vintage wines and Cognac produced more than a Century ago are undervalued in the fine wine market, according to the director of the Oracle Paradis Wine Fund.

David Nathan-Maister (pictured) believes that prices for some ‘very old wines’ and Cognac will increase as fine wine collectors and buyers follow a ‘natural progression’, primarily from Bordeaux first-growths to Burgundy and then to older and more niche wines.

His comments come after the Oracle Paradis Wine Fund announced it has bought a 1781 Chateau Chalon, one of the oldest surviving white wines from vineyards in Jura, France. It paid EUR38,000 for one bottle, sourced from the private cellar of winemaker Jean Bourdy.

The deal is part of an investment strategy at Oracle Paradis to secure old vintages, which has so far included 19th Century Cognac, pre-1920s Tokai and now Chateau Chalon.

‘There are people who are going to go into those areas,’ said Nathan-Maister.

‘We’re very conscious of the fact that we’re not operating in the same wine investment market as that up to 2009,’ he told decanter.com.

He referred to the fall in prices for top Bordeaux over the past couple of years and the broad-based expectation that prices are likely to increase again at some point, but more slowly than before.

‘It makes sense to put part of our assets in traditional areas,’ he said. But, he added that older vintages remain undervalued and represent a good opportunity, because ‘our investors are in it for the long-term. They’re not looking to put GBP10,000 in and take it out within a year’.

In its first six months of operation, Oracle has raised its initial US$5m from just 12 investors, with those from the former

Soviet Union forming the biggest single group.

The group aims to increase its fund to $15m within the next 12 months, which is generally the minimum level at which institutional investors would consider getting involved.

Written by Chris Mercer