the bordeaux first growth plus cell cell

THE
BORDEAUX
FIRST
GROWTH
PLUS
CELL
THE
VINUM FINE
WINE FUND PCC LTD
Introduction
The greatest wines in the world are extraordinarily complex creations, each wine
an expression of time and place, passion and artistry.
The vineyards of Bordeaux in France produce the worlds most expensive and
sought after wines, with the most outstanding, evolving after years of bottle
ageing.
Worldwide demand for these fine, rare and vintage wines is growing, the buoyant
trade reflecting the purchasing power of traditional buyers and the expanding
business elite, particularly in the emerging markets around the world.
The
Bordeaux First Growth Plus cell of the Vinum Fine Wine Fund PCC is a fund
to enable investors to capitalise on the proven investment returns from fine and
rare Bordeaux wine. The Fund is a permissible asset for SIPP, SSAS, 'wrapper'
arrangements and offshore investment bonds as well as allowing for direct
investments to be made.
For the first time private individuals and pension funds plus offshore investment
wrappers have a vehicle for investing in the physical commodity of fine wine with
the potential for long-term gains. This offers crucial diversification into a
non-correlated asset class.
A £20,000 minimum investment gives access to the specified range of
investment grade wines, carefully selected by the Specialist Wine Advisor to
maximise returns and minimise risks over the medium to long-term. The aim is to
provide above average annual compound rates of return compared to more
traditional forms of investment such as equities.
Having reviewed the full range of Bordeaux wines and their investment potential,
the managers along with the sponsors of this cell – Gateway Consortium
International Limited – have refined their selection criteria to a universe of 18
wines. These wines have generated consistently higher returns than the general
universe and are therefore specially selected.
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Historically, wine has demonstrated a long-term consistent return on
Investment. For the best wines from the better vintages, the values of the
finest Bordeaux claret can be tracked comprehensively for more than 200
years.
Burgeoning wealth in the emerging markets is pushing the prices of these
desirable wines higher and it is this demand that has been a key driver
responsible for the significant price increase of the best wines.
Pauillac
Wine
3
Year
1000
2050
1600
3235
2300
5700
2150
5550
% Gain
130.01
178.05
34.38
71.56
1996
2000
2003
2005
1450
2000
2000
3700
7100
10650
7250
9200
389.63
432.49
262.49
148.65
1996
2000
2003
2005
1650
2100
2100
4400
5950
8000
7250
10200
260.61
280.95
245.24
131.82
Mouton
Mouton
Mouton
Mouton
1996
2000
2003
2005
Lafite
Lafite
Lafite
Lafite
Latour
Latour
Latour
Latour
Case Price at Release Price @20.05.08
Investing in Wine
Wine is a unique investment and the production of each vintage is strictly controlled
by the French government. Each Bordeaux château is allowed to produce limited
quantities and for the best wines this can be considerably less than the demands of
the worldwide market. This is strictly controlled by the Institut d’Appelations d’Origine.
This government organisation limits both the number of labels each vineyard is
permitted and the volume of wine that can be produced per hectare.
In 2003, the world-renowned Château Latour produced only 9,600 cases of this much
acclaimed vintage, a finite supply that will diminish as consumption begins. With a
wine as highly rated and regarded as this the remaining stocks should rise in value as
bottles are consumed because of the current and increasing demand. Historically,
wines from 1961, such as Château Latour and Château Haut-Brion have exemplified
this trend.
The limited production with the inability to produce any more of a given vintage, plus
the increasing demand for these wines, ensures a healthy and robust market for the
growth in value of this commodity – giving wine one of its unique investment criteria.
Pomerol
Wine
Petrus
Petrus
Petrus
Petrus
Year
1996
2000
2003
2005
Case Price at Release
Price @20.05.08
8950
29000
13300
35500
% Gain
104.34
176.19
155.77
129.03
Lafleur
Lafleur
Lafleur
Lafleur
1996
2000
2003
2005
1100
3000
2800
7500
1850
15000
4500
18000
77.27
400.00
60.72
140.00
4380
10500
5200
15500
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Investment Fundamentals
The past five years has seen a dramatic increase in demand
for Alternative Investments or asset classes, the stimulus for
this trend resulting largely from the Hedge Fund phenomenon.
Rules applying to the majority of mainstream financial
products, particularly packaged products, have made access
to these Alternative Investments either expensive or out of
reach for many investors.
The Vinum Fine Wine Fund PCC provides easy access to wine
as an Alternative Investment in order to take full advantage of
this non-correlated asset class with the associated reduction
in volatility. This can significantly enhance a broadly-based
portfolio adding a new dimension and balance.
The Fund's Investment Managers, guided by the Specialist
Wine Advisor, will seek to minimise individual investment risk
by generating a spread of holdings in the selected châteaux
defined for this cell. The Advisor will apply the following
criteria - vintage, château, classification, format, commune
and wine scores from Robert Parker; James Suckling and
others - that determine the Bordeaux and wider market.
Correlation of Fine Wine to other Asset Classes
(rolling 5 years to September 2007)
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
-20.0%
-40.0%
-60.0%
-80.0%
-100.0%
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Wine shows less than a 20% correlation to other asset classes
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Fund Details
Pessac
Wine
Haut Brion
Haut Brion
Haut Brion
Haut Brion
Year
1996
2000
2003
2005
Case Price at Release
995
1704
1600
3595
Price @20.05.08
% Gain
126.12
240.38
34.38
119.75
Price @20.05.08
% Gain
256.67
271.43
157.32
110.23
2250
5800
2150
7900
Margaux
Wine
Margaux
Margaux
Margaux
Margaux
Year
1996
2000
2003
2005
Case Price at Release
1500
2100
2050
4400
5350
7800
5275
9250
The Fund aims to achieve capital appreciation over the medium to long-term by investing in a
diversified portfolio of rare and fine wines from Bordeaux. These are selected as being good
investment opportunities by the Fund’s wine and financial experts who are targeting to achieve in
excess of 15%-18% annualised return.
The Fund invests in the physical commodity of wine and seeks to generate investment returns from
the growth in value of the individual holdings. This may be combined with traditional investments
using cash or near cash instruments and using hedging to cover foreign currency exposure.
The Vinum Fine Wine Fund PCC is the first authorised Class B collective investment scheme in
Guernsey, (which invests in wine as a physical asset) to be given approval by the Guernsey
Financial Services Commission. The fund has a Channel Islands Stock Exchange listing and is a
Guernsey based protected cell company, so benefiting from the tax efficiency of the island.
St Emilion
Wine
Ausone
Ausone
Ausone
Ausone
Year
1996
2000
2003
2005
Case Price at Release
1061
4000
3050
8000
Price @20.05.08
2950
15900
13200
22500
% Gain
178.00
297.50
332.78
181.25
6
Key Fund Members
The selection and acquisition of the individual wine holdings are key
to the success of the Fund. The Specialist Wine Advisor is Andy
Lench, who has an exemplary record of achievement spanning more
than 20 years. His passion for, and comprehensive knowledge of, the
top wines of Bordeaux have been fundamental to his outstanding
results to date. Whether investing for himself or his multi-million
dollar wine business based in the USA.
Resident at his wine producing château in Bordeaux for six months of
the year, Andy’s extensive portfolio of contacts and connections
gives him access to an unsurpassed source of fine and rare wines
enabling him to hunt down the deals that are key to investment
success.
John Kolasa also has extensive experience of Bordeaux having
moved there over 25 years ago. He has amassed extensive
experience in the region's wine industry. John manages wine
production and the sale of fine wines, as well as estates including
the prestigious Château Latour.
Now administrator for the multifaceted wine businesses of the
Wertheimer family, John manages all aspects of two famous
châteaux, Rauzan Ségla and Canon. He also runs the négociant
business Ulysse Cazabonne and the retail outlet La Cave d'Ulysse
based in Margaux.
Robert Lench has more than 20 years comprehensive experience in
the financial services sector, and specialises in investment funds.
Marketing Director of a leading stockbroker, and Sales Director of the
largest ever UK unit trust launch, among other prominent roles. His
knowledge of the technical and legislative elements has formed the
foundations of the Fund. Robert has been increasingly involved with
Bordeaux and its wines since 1989 and now works primarily within
the wine industry.
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SECRETARY & REGISTRAR
LISTING AGENT
LEGAL ADVISORS
AOS Fund Services Limited
Newhaven Trust Company
AO Hall
Registered Office:
(Channel Islands) Limited
Le Marchant House
3rd Floor Nat West House
P O Box 212
Le Marchant Street
Le Truchot
One Lefebyre Street
St Peter Port
St Peter Port
St Peter Port
Guernsey GY1 2JJ
Guernsey GY1 1WD
Guernsey GY1 4JE
THE CUSTODIAN
INDEPENDENT VALUER
FEES AND EXPENSES:
Butterfield Bank (Guernsey) Ltd
CVBG
Initial charge 7.75%
Registered Office:
35 Rue De Bordeaux
Withdrawal potentially subject
Regency Court
33290 Parempuyre
up to three months notice
Glategny Esplanade
France
Management Fee 1.75%
St Peter Port
Performance Fee 20% of
Guernsey GY1 3AP
growth
subject to hurdle rate
SPECIALIST WINE ADVISOR
AUDITOR OF THE SCHEME
Mr A D Lench
BDO Novus Limited
Minimum investment £20,000
Château Carignan
Elizabeth House
Minimum addition £10,000
60 Allée des Châteaux
St Peter Port
33360 Carignan de Bordeaux
Guernsey GY1 3LL
France
Hurdle Euribor
IDENTIFIERS:
SEDOL: - B39T4N9
ISIN: - GG00B39T4N96
RISK WARNINGS (General)
The Guernsey Financial Services Commission has authorised the Fund as a Class B Collective Investment Scheme under the
Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended). It must be distinctly understood that in giving this
authorisation the Commission does not vouch for the financial soundness or the correctness of any of the statements made or
opinions expressed with regard to the Fund. Shareholders in the Fund are not eligible for the payment of any compensation
under the Collective Investment Schemes (Compensation of Investors) Rules 1988 made under the Protection of Investors
(Bailiwick of Guernsey) Law, 1987 (as amended). Investors should be aware that the authorisation as mentioned in the paragraph
above represents a precedent for a collective investment scheme authorised in Guernsey that invests in wine as a physical asset.
Therefore, no track record exists for such a product. It must be emphasised that the value of Shares will fluctuate in accordance
with the value of the underlying investment and, in certain circumstances, can go down as well as up. Past performance is not an
indication of future performance. There is no obligation to redeem Shares at the Subscription Price originally paid. An investment
in a Cell of the Fund should only be made by persons who are able to bear the risk of loss of capital invested. Investors should
have sufficient financial awareness to evaluate risks; persons not able to assess the risks should not consider an investment, and
consult their financial advisor.
With thanks to the Chateaux, Deepix and other associates for supplying images used in this brochure.
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The Vinum Fine Wine Fund PCC Ltd
2 The Mews
16 Holly Bush Lane
Sevenoaks
Kent
TN13 3TH
Tel: +44 (0)1732 455931
Fax: +44 (0)1732 463422
Email: [email protected]
www.vinumfinewinefund.com
THE
VINUM FINE
WINE FUND PCC LTD