AUGUST NEWSLETTER: INVESTMENT UPDATE

15-Aug-2018


AUGUST NEWSLETTER: INVESTMENT UPDATE

FACT OF THE MONTH

Lafite Rothschild estate offers bottles of ’98 to the French football team!

In recognition of the French team winning the World Cup, Lafite Rothschild gave a bottle of the 1998 vintage to each of the players, a nod to the victory of the first world cup they won in 1998.

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SUMMER HEAT WAVE

You may well wonder how the heat has been affecting the upcoming 2018 vintage. The reality – both good and bad. The extreme weather has resulted in unusual storms, with hail damage impacting some vineyards, followed by more recent thunderstorms. However, the high temperatures have generally benefitted the vines, and crops across France are up around 30% on last years’ yield. Volume does not mean quality, though, and the intense heat, stressing the vines, has resulted in mildew causing a major headache to vineyard owners. It is likely to be one of the earliest harvests in years, with Champagne already over a fortnight ahead of schedule. The forest fires in California have generally not affected the region too badly.

HAUT-BRION ’89 LEADS YEAR’S TRADING

The 1989 vintage of first growth Haut-Brion is the leading wine traded by value on the Liv-ex Exchange so far this year.

Due to the fame of this estate, the perfect score given by Robert Parker (100/100), and supply levels diminishing as it nears the 30-year threshold, the prices have been steadily rising over the last 2 months. Recently a case traded for £25,000, a new all-time high.

The 2015 vintage is also performing strongly – the next two top performing wines are also first growths, Lafite and Margaux 2015. The Margaux in particular is continuing its extraordinary run.

Broadly considered the best wine of the vintage and released in a special commemorative bottle to mark its bicentenary, and coinciding with the death of their head wine maker and technical director Paul Pontallier, the wine has effectively doubled in price since becoming physical, rising from £6,600 to £12,950. A 96.2% growth!

Three other wines from the 2015 vintage were also featured – Haut-Brion and two second labels, Petit Mouton and Carruades de Lafite.

LIV-EX REVEALS MOST SEARCHED WINES

Fine wine exchange Liv-ex has revealed the 50 most searched for wines listed on its platform so far this year, and while it’s still dominated by Bordeaux there are some new interlopers from elsewhere in the fine wine world.
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Each summer, Liv-ex reveals the most searched for wines, giving an indication of where the attention of the global fine wine merchants is focused. Moreover, it points towards which wines are emerging and declining in the market. 

As in 2017, the top 5 hasn’t changed and Bordeaux still dominates the ranking.

Only Margaux moved up a spot, taking the 3rd place from Haut Brion.

Of the 50-strong list, a full 44 of them are Bordeaux labels but even among these there are some new entries. The most notable of these has been Carmes de Haut-Brion, which has shot up a whole 34 places to reach number 44 on the list – although its trade by value is still very low. Clerc Milon, Domaine de Chevalier and Conseillante, in 46th, 48th and 50th positions respectively, are also new to the list.

 

 

PERFORMANCE UPDATE

Our performance on behalf of our clients has increased to +11.5% year-on-year, significantly outperforming the market index and most other asset classes.

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We have been very actively trading over the last month, both on behalf of clients and directly with our international trade network. We made a sizeable investment in the top wines from the Bordeaux 2017 en primeur, which we carefully analysed and believe will perform well, purchasing over €700,000 worth on behalf of private clients and for our own stock. Our trade clients in Asia have been actively buying many wines, but significant trades (five figures and upwards) have included a number of vintages of Petrus, Petit Mouton, Calon Segur, and Lafite, especially the 1998 and 2014 vintages.

We also help clients to sell their private collections, through the trade and at auction. We acquired a beautiful collection of mature Bordeaux, in pristine condition and worth over £30,000, for which there is high demand. Outside of our core activity with fine Bordeaux, we have been buying wines on behalf of our clients from the World over, including Champagne, Australian shiraz, flagship wines from Chile and Spain, and even English bubbly.

CRU WINE INVESTMENT STARTS BUILDING WINE CELLARS

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Are you looking for the perfect wine cellar to be built in your home, to enhance and display your passion? As you can see, CWI has been thinking about this for some time, and we are now offering a professional service to design and build luxury wine cellars.

More to be revealed shortly.

If you would like to hear more or receive a quotation for building a wine cellar in your home, kindly email us on: info@cruwineinvestment.com

CWI TEAM CONTINUES TO EXPAND

This month we would like to warmly welcome both Vincent Clarke and Thomas D’Halluin, who have joined our London office.

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Vincent has joined us as Head of Trade & Private clients at the beginning of July after a successful career at Armit Wines. After serving in the British Army with the Scots Guards, Vincent followed his heart and made the transition to the wine trade. By working with some of the top merchants in London, he has gained vast experience in the world of Fine Wine, dealing with collectors, investors, and the trade. He has a preference for Bordeaux, Champagne, and the wines of Piedmont, but believes there is always a perfect wine for every occasion.
Favourite wine: Château Haut-Brion, Krug, Bruno Giacosa
v.clarke@cruwineinvestment.com

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Thomas has joined us as fine wine trader at the beginning of July and is going to do a 6-months internship with us. For many years, Thomas has been interested in French wines, especially in Bordeaux. He is doing his masters at the KEDGE Business school in Bordeaux and is president of the largest student oenology association in France. This gave him the opportunity to visit and taste all the great wines of this beautiful region. He has rubbed shoulders with the merchants of Bordeaux, and has a close connection with some wine-growing families. In addition, he is a champagne lover!
Favourite wine: Château Figeac, Pol Roger Sir Winston Churchill.
t.dhalluin@cruwineinvestment.com

VINEYARD REAL-ESTATE PRICES STILL RISING

Every year, the French national land agency SAFER releases its roundup of vineyard prices. And it’s been a busy year.

The number of vineyard sales in 2017 was the highest for 25 years across France, with the Loire and Burgundy seeing the biggest rises in the numbers of purchase and Champagne representing the biggest in value.

The overall value of these transactions comes to about €1.25 billion, an increase of 59.9% compared to 2016.

Looking specifically at Bordeaux, just under 3% of the entire vineyards of Bordeaux changed hands in 2017, around 3000 ha.

Margaux and St-Julien stay at an average of €1.2 million/ha, while Pauillac remains at €2 million/ha, on average. However, this pales in comparison to grand cru sites in Burgundy’s Cote d’Or, which cost €6 million/ha on average.

In Bordeaux, it is the right bank that has seen the biggest increases. In Saint Emilion, prices showed a rise of 20,000€/ha, and Pomerol recorded a 15% rise, from €1.3 million to €1.5 million/ha. This gives a clear indication that investors are backing the wine industry, and fresh investment tends to go hand in hand with increasing quality.

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