Investors with an affinity for fine wines, especially those from France’s esteemed Burgundy region, will now be able to invest in the luxury asset through the private market exchange ADDX.
A tokenised Burgundy fine wine portfolio has been added to the exchange by its manager Provenance Treasures, a licensed wholesale wine and alcohol trading company that is a subsidiary of Singapore Exchange mainboard-listed company Intraco Ltd.
All of the portfolio’s wines have been sourced from the famed French region, including from famous wineries Domaine Coche-Dury and Domaine Leroy.
While the indicative worth of each bottle ranges from hundreds of dollars to thousands, about half of the bottles carry ‘Grand Cru’ appellations; the highest tier of wine classification in Burgundy.
The vintage years of the wines fall between 2006 and 2020.
The primary subscription for the wine tokens was completed in September at S$0.83 per token, with the minimum subscription size set at 1,000 tokens, or S$830, to give investors fractional access to the investment deal.
Following this, the secondary trading of tokens is now live on the ADDX exchange.
Portfolio management
The investment hurdle return rate is set at eight per cent per annum, with the portfolio manager only receiving management or performance fees when returns are above that rate.
To date, Provenance Treasures has purchased and taken delivery of 234 bottles of wines with an indicative worth of S$696,000.
The company has confirmed that it is expecting another 125 bottles with an indicative worth of S$386,000 to arrive at its wine storage facility in Singapore this month.
As portfolio manager, Provenance Treasures has the discretion to make wine-trading decisions in consultation with its shareholder Domaine Wines; a Singapore wine distributor with a focus on French Burgundy wine.
Provenance Treasures will take into consideration factors such as the prevailing general economic environment, consumers’ demand and wineries’ supply situation of selected wines, expected price trends and global wine consumption trends, with the goal of optimising investment returns.
The portfolio manager may sell bottles to wine merchants, wine collectors or hospitality and food and beverage operators, but before any sale is executed, investors will be given the first right of refusal to purchase that bottle at the prospective sale price.
Following the sale, the portfolio manager is likely to either return the proceeds of wine sales to investors as capital and redeem a corresponding number of tokens from investors, or it may also decide not to return the capital, and instead reinvest the sale proceeds by importing new bottles of wine.
Recognising the accelerating demand for digital assets, Intraco’s executive chairman and director, Mak Lye Mun, comments on how the company is “pleased to partner with Domaine Wines to launch the first Burgundy wine tokens on ADDX. The tokenisation of the wines is another step towards Intraco’s strategy to expand into the digital assets business.”
He confirms that the company will continue “to identify more suitable assets classes in Singapore and the region for tokenisation, as alternative investment opportunities.”
Pointing to Knight Frank‘s latest wealth report, which indicates that the value of fine wine as an investment class has appreciated 137 per cent over the past decade, Oi-Yee Choo, CEO of the private market exchange ADDX, discusses how wine investments can play a unique role in portfolio diversification.
She explains how the exchange’s latest luxury listing of fine wines offers “a comprehensive shelf of investment opportunities for investors to construct their own private market portfolio, across multiple asset classes and different segments of the risk curve.”
“With heightened concern over rising inflation and market volatility,” she adds, “investors are increasingly re-allocating capital toward private markets as they seek resilience and diversification.”
