More wine! Highbrow investment fund sets sights on Hong Kong wine trade

Riding the craze for fine wine in Hong Kong, niche wine investment fund Lunzer Wine Investments will be setting up its first office in the city in March next year.

The move is an attempt to cash in on Chinese investors’ seemingly insatiable appetite for rare vintages, according to a South China Morning Post interview with Peter Lunzer, the firm’s CEO.

It’s not another gimmicky financial scheme -- wine investment is more recession-proof than wildly swinging stocks or bonds, Lunzer tells the SCMP. Another wine investor explains it to the AFP: "Fine wine … is something that cannot be replenished. Its value is bound to rise. Every time someone opens a bottle of 1982 Chateau Lafite-Rothschild, the rest of the world is deprived of one more.”

Lunzer has had a shiny track record, returning close to 14 percent for the Bordeaux Reds that it invests in. The London-based firm also plans to set up storage facilities in the city, a natural move after the government abolished wine duty in early 2008, said the SCMP.

Lunzer’s Asian venture is yet another indicator of the snowballing demand for fine wines in Hong Kong and China.

The Hong Kong Trade Development council expects Asian wine consumption to hit US$27 billion by 2017, double this year’s figures. Last weeks’ Hong Kong International Wine and Spirits fair drew 520 exhibitors, twice last year’s figure, reported the AFP. And Hong Kong climbed ahead of New York and London as the world’s biggest market for fine wines in Sotheby’s and Christie’s wine auctions last month. 

It's news for cigar-smoking investment bankers and pension fund managers to cheer -- Hong Kong is that much closer to becoming Asia's wine hub.