Praveen Krishnamurthy is a co-founder of Orcus Capital Advisors, a wealth management firm, and calls himself a ‘Fine Wine Investment Specialist'.
Wine, as an investment asset class, is just beginning to happen in India. Unlike other beverages, wine matures with age, and therefore its value increases. So you buy a case of wine, keep it for a few years, then sell it for a profit. Simple, right?
Wrong. To invest, you need to know wine. Praveen, come in, please.
How it started
The fascinating story of investing in wine begins in France, circa 1855, when Napoleon III made an epochal order, to grade the 60-odd vineyards (chateaux) in the Bordeaux region. This classification, says Praveen, is still a crucial factor in price discovery.
There are eight chateaux in the ‘investment grade'—La tour, La fite, Margaux, Haut Brion, Lynch Bages, Mouton Rothschild, Petrus and Cheval Blanc. These are geographical appellations and what is produced in one terroir cannot be produced by others. Consequently, there is a natural limit on how much each chateau produces each year. It is in the order of 15,000 cases (12 bottles of 750 ml) each year. Usually, the cases are bought en primeur even before they are bottled and there is an active future markets here.
How do you invest in wine? An expert such as Praveen Krishnamurthy will give you several options of wines with value appreciation in mind. Many factors affect the prices—vintage, of course, but also, the weather conditions of the year of bottling, availability and importantly, the rating given by a man called Robert Parker, an expert wine valuer hated in Bordeaux, for he has got it wrong only three times in the last 35 years.
More: The Hindu