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Into the red

Why is Chateau Lafite so incredibly popular with China’s new rich? Its terroir? Its expense? Yes, and definitely yes. But some sommeliers suggest another reason: the Chinese find it easy to pronounce (“la feet”). Certainly it rolls off the tongue a little more easily than Domaine de la Romanee-Conti.

Thankfully for millionaire Chinese intimidated by the more complicated pronunciations – but still keen to profit from the boom in fine wine – a new option has arrived. Pacific Investment Management is launching China’s first ever wine fund.

“The China market is ready for such a financial product,” chairman Christie Ling Zhijun told the South China Morning Post this week. The Beijing-based Dinghong Wine Investment Fund will begin roadshows in Shanghai this week, offering wealthy Chinese a ‘liquid’ alternative to their usual diet of stocks and real estate. Ling aims to raise Rmb200 million initially and Rmb1 billion within five years. The plan is to invest in fine wines from Bordeaux and Burgundy, buying 60% by bottle and the remainder in barrels.

With markets cratering around the world, it might seem a strange time to launch an investment fund of any kind. But Ling reckons she will be offering her investors a unique product that will deliver “handsome returns, which will be little affected by the economic environment.” If past performance is anything to go by, she might be right…


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