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Peter Shakeshaft discusses fine wine investment on CNBC

Peter Shakeshaft discusses fine wine investment on CNBC

The wine investment market is in particularly good health right now with double-digit growth predicted for the year ahead and exceptional Parker scores being recorded for the latest vintage.

Robert Parker, the world’s leading authority on fine wine, recently released his ratings for the Bordeaux 2010 vintage, which was confirmed as outstanding, with 10 wines getting a perfect 100 score. Nearly half of all the perfect scores given during the 35 years of the ratings have come during the 2009 and 2010 vintages reviewed in the past two years.

The results and their effect on the fine wine investment market have proven popular with the business press, with broadcaster CNBC keen to sit down with Peter Shakeshaft, chairman of Vin-X, the UK’s fastest growing fine wine specialist, and discuss what the implications would be hoping to make a buck out of a bottle.

This morning, Peter appeared live on their Squawk Box Europe show – which runs in advance of the opening of the daily European markets – to discuss the results in more detail with anchors Geoff Cutmore and Karen Tso.

As well as specifically discussing the impact of the Parker scores on the market and picking out some particularly promising Bordeaux wine investment options – namely the perfect scoring Pontet Canet – Peter also analysed wine’s potential as a long-term alternative investment option.

The Squawk Box team were surprised to learn that over the Queen’s 60 year reign, wine has provided the best return of any alternative investment of more than 11 percent. This is more than many other asset classes including art, classic cars, silver and even gold and is certainly something for investors to raise their glasses to.

Peter also shed some light on the growing demand for fine wine in emerging markets including China, Brazil and Russia, with the latter seeing particularly strong growth for fine wine, especially amongst female investors.

Whilst the Parker scores provided a clear indication of the direction the market is taking right now it’s safe to say that the progress of the fine wine market will be of interest to both investors and the press in general for many years to come and we look forward to Peter discussing on our TVs and radios again in the near future.

Keepin’ it real

At a time when stock markets are particularly volatile and the Euro uncertain, an increasing number of people and businesses are choosing to invest in real assets like gold, wine, art and timber. This isn’t because they have a penchant for shiny things or enjoy a good Châteauneuf-du-Pape but simply because real assets are proving solid investment opportunities.

CHATEAUNEUF DU PAPE

One of the main attractions of investing in real assets is that they are very much uncorrelated to global equities. Whether global stock indices go up or down, your real asset returns will not automatically follow them. The safest things to invest in are physical; this can be anything from gold to vintage wine to stamps.

The point is that unlike equity they are tangible assets. Share prices can plummet in a matter of minutes but if you invest in timber, for example, it will still be in the plantation in the morning. So while their value may increase or decrease, tangible assets will not disappear or fluctuate in size. This can be hugely reassuring from an investor’s point of view and investors can also visit their real assets, whether this is in a bonded warehouse or a plantation in Brazil.

Another reason why people are investing in real assets is to diversify their investment portfolio away from traditional assets. There are a lot of pension funds that have a requirement for real assets. The more diverse the investments you have the higher the probability of one of your investments increase in value.

In addition, if your assets are too similar and the market drops, then the value of your entire portfolio will be hit. With forestry and wine, in particular, it is possible to diversify your investments within the different types of timber and vintages available. This diversity is a rare opportunity within the investment world.

Interestingly, a survey in the Sunday Times last year asked leading financial advisers, estate agents and fund managers where they would invest a spare £100,000. The answers were revealing – they included shotguns, wine, property, classic cars, agricultural land, timber and gold bullion. If you were to ask me, I would choose vintage watches and Louboutins!

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