Ever since the London International Vintners Exchange, more familiarly known as Liv-Ex, got up and running in 1999, wine investment funds have grown in popularity. Now China, as befits a nation whose status-obsessed wealthy are suitably obsessed with buying fine wine, is to get its own, the Financial Times reports. The Dinghong Fund, also known as the DeRouge Fund, plans to raise 1 billion yuan ($156 million) from investors that it will invest in Bordeaux and Burgundy vintages. Minimum initial investment will be for 1 million yuan locked in for five years. (Update: Three-fifths of the fund will be invested in wine and the remaining two-fifths in wine futures; the fund is aiming for a return of 15%.) The fund is co-founded by Ling Zhijun, a Shanghai-based asset manager and oenophile.
Another sign of a Bordeaux bubble?
Footnote: Chinese investors have been active participants in international fine wine investment funds and in funds that invest in a range of investment-grade collectibles from art, to diamonds and rare musical instruments. China Daily recently wrote about Chinese millionaires’ interest in these so-called passion funds. With buyers from China already driving prices at art and fine-wine auctions, this Bystander expects a bull market for investment funds specializing in wine and art.