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A fine whine: A Bordeaux Fund
Posted: 16:45 Fri 07 Feb 2014
by jdaw1
The Financial Times, in a part of an article entitled [url=http://www.ft.com/cms/s/0/307e85d4-8f3c-11e3-9cb0-00144feab7de.html]A fine whine[/url], wrote:With a bit of luck, you didn’t invest in
Fine Wine’s Bordeaux Fund. Launched in 2008, it’s to be wound up and £100 invested then will turn into about £42. We’re constantly being told that wine is one of those wonderful alternative asset classes that have made returns from shares look pedestrian, so this sort of performance is something of a shock.
Andrew della Casa of Anpero Capital, which advised the fund, says that the bottles themselves didn’t do too badly. The damage was done by gearing up the fund and the management and storage charges.
Together, these turned an 8 per cent gain over five years into the 58 per cent loss. Mr della Casa says other funds advised by Anpero have done better, but the Bordeaux Fund is another reminder of Woody Allen’s definition of a stockbroker as a man who invests your money until it’s all gone.
Re: A fine whine: A Bordeaux Fund
Posted: 17:00 Fri 07 Feb 2014
by PhilW
Perhaps instead of charging (say) 1.5% of investor's fund value per year, the stockbroking firm received (say) 20% of the fund's gains for that year but also had to cover (say) 20% of the loss if the fund value fell over that year, as well as requiring that the company has sufficient capital to a value of (say) 20% of all funds held. That would provide some focus on deciding the real level of risk vs reward both for the company as well as the customer.
Re: A fine whine: A Bordeaux Fund
Posted: 21:30 Fri 07 Feb 2014
by LGTrotter
Rather than take Phil's route of considering how to make things better in the future I will take the title at face value and whinge a bit.
I have bought, rather than invested in, Bordeaux off and on since the '96 came out, stopping at 2009. I really struggled to pay the 2009 prices, not just because of petty pecunary considerations but mainly because the numbers were preposterous. I never bought for investment, but when the prices of the carruades de lafite and Duhart Milon 2000s got amazing a couple of years back I sold them and bought port, bien sur. I think I will keep the rest of my purchases to drink. Was it a wise investment? If you want to drink claret yes, to make money, not really.
As an investment class they are awful, but not as awful as buying port en primeur, which as far as I can tell has never made money.