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Lifestyle Investment - The Other Alternative for Savvy Investors?

05/06/2012 19:48 | Updated 05 August 2012

It was just a month ago that the movers and shakers of the wine world got back from their very first taste of Bordeaux 2011. The results of the tasting were mixed and, with the financial crisis still roaring, the question of wine as an attractive alternative investment continues to be debated.

As indicated by the London International Vintners Exchange (LIVEX), investments in fine wine have produced a 195% return over the past seven years. There is a growing demand for the stuff from China, Russia and Brazil, the new powerhouses of the world-wide economy. The world apparently continues to be fascinated by the drink that can "make women's eyes sparkle'' and grown-up men smile like kids on Christmas day.

Now, the thinking caps are on. Who will be the first to create the most sophisticated investment product - the one able to cater for and attract both passionate wine lovers and high-return-driven, savvy investors?

The range of products is expanding. There are the most sophisticated, regulated products, such as The Wine Source Fund - a London listed fund based on a rather elaborate ecosystem involving a French merchant company and a UK distributer pairing rare Bordeaux with up and coming burgundy and rare whiskies, "for a balanced portfolio able to benefit from longer and shorter production cycles", says founder Philippe Kalmbach.

Then there are products belonging to the more traditional wine investment platform like that offered by The Antique Wines Company. Founded by world-class wine expert, Stephen Williams, AWC presents a very appealing alternative for wine lovers looking for bespoke cellar management services paired with the opportunity to make a substantial return. They held a superb event at the Hong Kong Club at the end of March that was remarkable on several counts, not least of which being the comparative tasting of six fantastic Bordeaux that included Haut-Brion 1990, scored by Robert Parker at a staggering 98 points... and truly to die for.

Another unusual element of the evening was the mix of people there. Of the roughly twenty people attending the private event only three were Asian. This crystallises the still subtle dominance of the expatriate community when it comes to wine, even in a region tagged as a growing market. The sponsor of the event - The Real Asset Boutique - contributed to the uniqueness of the evening. The Real Asset Boutique is the first ever asset-management company offering tangible alternative investment in London based providers of modern art, prime central London real estate and fine wines. Their offerings are specifically targeted at the European expatriate communities in Asia. As a niche market it is an interesting concept. It benefits from a natural flow of high net worth individuals between the two continents and builds on the converging interests between prime property, fine wine and collectible modern art.

Is this the premise of a new vision for savvy investors? Lifestyle investments? Lifestyle investment in luxury products that appear relatively crisis immune? This is the trend to watch in 2012.

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