SINGAPORE - Wine collectors and enthusiasts can now buy and sell tokens based on a portfolio of vintage French wines on ADDX, the private market exchange said on Wednesday.
The portfolio will comprise 359 bottles of wine sourced from top wineries in the Burgundy region of France, including Domaine Coche-Dury and Domaine Leroy, and will be worth more than $1 million. About half of the bottles carry Grand Cru appellations, the highest tier of wine classification in Burgundy, ADDX said. The vintage years of the wines fall between 2006 and 2020.
The portfolio will be managed by Provenance Treasures, which is a licensed wholesale wine and alcohol trader that is a subsidiary of Singapore-listed plastics company Intraco.
To date, Provenance Treasures has purchased and taken delivery of 234 bottles of wine worth around $696,000. It is expecting the other 125 bottles, valued at around $386,000, to arrive in Singapore in November.
To enable a wider pool of accredited investors to put their money in, the portfolio has been digitalised and broken down into fractions, or tokens, on ADDX – a process known as tokenisation.
Primary subscriptions for the tokens were completed at 83 cents each at a minimum subscription size of 1,000 tokens, or $830. This means investors can own a fraction of the portfolio of wines for as little as $830.
The tokens have been fully subscribed by investors, many of whom are wine connoisseurs, according to ADDX. From Wednesday, those investors can also sell their tokens on ADDX.
As portfolio manager, Provenance Treasures will be given the discretion to sell the wine for investment returns after considering factors such as the economic environment, demand and supply of the selected wines, expected price trends and global wine consumption trends.
However, investors will be given the first right of refusal to purchase the bottles at the prospective sale price before any sale is executed, ADDX said.
Provenance Treasures may return proceeds of any sale to investors as capital and redeem a corresponding number of tokens from investors, or reinvest the proceeds by importing new bottles of wine.
Such decisions will be taken in consultation with French Burgundy wine distributor Domaine Wines, which is based in Singapore and is a shareholder of Provenance Treasures.
There is also an investment hurdle return rate of 8 per cent per annum. This means that Provenance Treasures will receive management or performance fees only when returns are above the hurdle rate.
The development comes at a time when the value of fine wine as an investment class has appreciated 137 per cent over the past decade, according to a 2022 wealth report by real estate agency Knight Frank.
ADDX chief executive Choo Oi-Yee said: “The Burgundy wine portfolio by Provenance Treasures is the first luxury asset ADDX has listed. The deal allows investors to own and trade coveted, top-quality wines, while earning a return through an appreciation in the value of the portfolio.”