Citing an increased demand for wine investment across Asia, a London based fine wines investment company has opened a new office in Hong Kong. So is conspicuous consumption on the way back?
Cult Wines, a specialist in the acquisition and investment management of fine wines, has officially opened its first office in Asia, placing a team in Hong Kong to manage and grow its already significant client base in the region, the company said in a press release today.
Of global sales in 2016 of $25 million, Asia has been Cult Wine’s biggest growth market, rising from 20 percent in 2014 to 30 percent by end August 2016, representing $7 million in annual sales, with an expectation of that growing to 40 percent of total sales by the end of 2017.
Since August 2014, the company’s Asian client base has grown steadily fuelled by growth in both mainland China and Hong Kong-based high net worth individuals with the company dealing with more than 250 customers in the region.
Stricter Capital Controls
The industry’s leading benchmark, the Liv-ex Fine Wine 100, was up almost 25 percent in 2016, its highest level since 2011. The Liv-ex FW 50, which tracks the ten most recent vintages of the Bordeaux First Growths was up 28 percent in the same period, but current market levels remain below the long term trend.
Using these indices, Cult Wine’s Portfolio Index, which tracks the performance in GBP sterling across all wines held in private client portfolios, and is revalued monthly, was up more that 75 percent over the past six years.
«With the devaluation of the RMB as well as the Chinese government putting stricter capital controls in place, limiting the options for private individuals to make overseas foreign investment, we have seen increased interest from China-based clients looking at alternatives such as wine investment, and we expect this to continue,» said Tom Gearing, Managing Director at Cult Wines.
