New fund to help wealthy wine lovers invest in top vineyards

A new investment fund that enables wealthy wine lovers and institutions to buy vineyard stakes in both renowned and up-and-coming regions, from Piedmont to Kent, is being launched.

Rising prices for quality vineyard land, fuelled by investor interest from Silicon Valley to China, has prompted a sister company of the Wine Source Group, WSF SICAV plc, to develop a regulated Vineyard and Terroir Fund.

It aims to attract wealthy individuals and institutions with a keen interest in fine wine to build a portfolio of vineyards around the world with a total market value of €50 million.

Investors must put up at least €200,000 or $200,000 and will be committed for a minimum of five years.

Partnerships with hotly tipped winemakers will be an important part of the process, said the WSF SICAV group, which already has strong links to many of the wine world’s renowned regions and runs the regulated Wine Source Fund for investing in fine wines and spirits.

Winemaker partners can help to identify good vineyard sites and fund managers believe the vehicle can also provide promising, younger producers with the capital establish their own vineyards.

Investors will also get privileged access to vineyard sites and wines, the group said, without disclosing estimates on potential returns on investment.

The fund won’t initially target the world’s most expensive vineyards, in areas such as Pauillac, Napa Valley or Burgundy’s grands crus – where French land agency Safer recently said one hectare of vines may cost up to €14.5m.

‘In Burgundy, we’re looking more at premier cru level,’ said Simon Lurton, co-portfolio manager of the Vineyard and Terroir Fund, who explained that these areas offered prospects of better returns.

Burgundy, Piedmont and the Northern Rhône sit alongside California’s Central Coast, Beaujolais cru vineyards and also the UK on the fund’s initial hit-list.

‘We think the UK is an up-and-coming region,’ said Lurton. ‘There are some quality wines and producers who want to expand, and the price of land has increased in the last few years.’

Bordeaux is not a focus for now, but Lurton said that some areas, such as Pessac-Léognan and Pomerol, were on the company’s radar for the future.

Environmental values will be examined when considering whether a producer or vineyard plot should be part of the fund, added Lurton.

He stopped short of saying the fund would focus on organically-farmed land, but said low chemical use would be important. ‘There is a new generation of winemakers using responsible vineyard practices,’ he said.

The Vineyard and Terroir Fund is a subfund of Malta-incorporated WSF SICAV plc and is ‘fully regulated under the European fund investment laws’, said the group.

Those investing at least 200,000 euros or dollars before 1 April 2020 will pay a 1% management fee. This will rise to 2% after that date. Anyone investing at least 500,000 euros or dollars will pay the 1% fee regardless of the date.

Partner winemakers will have an opportunity to purchase their vineyard plots outright after five years, said the group.


See also: Prices for top French vineyards rise again in 2018