China's first wine investment fund offers wealthy buyers 15% returns
Aspirational Chinese investors are flocking to the potential gains offered by the Dinghong Fund
China's first wine investment fund is not short of takers.
The Dinghong Fund aims to provide 15% returns and has already met with excitement from the country's high-net worth individuals, eager to help the fund raise an initial Rmb200m ($31m) by the end of September.
"They think that starting with Rmb200m is not enough," co-founder Ling Zhijun told the UK's Financial Times newspaper.
"So we have to explain that we can't invest it all at once. Investing over time is a better way to spread out the risk."
The fund will target leading Burgundy and Bordeaux vintages and aspires to provide similar successes to those seen from other global wine funds, such as the UK-based Vintage Wine Fund, which has enjoyed a 67.2% increase in worth since its launch in 2003.
After the initial excitement of the launch, we expect the Dinghong Fund to remain popular in the long-term among the hugely aspirational high-net worth individuals in the country, who have been behind a great shift eastwards of wine sales in recent times.
The Wine Spectator Auction Index revealed that takings at Hong Kong wine auctions between April and June this year grew by 80% on the same period in 2010.
Collectibles funds are becoming increasingly popular among wealthy individuals around the globe.
A $400m photography fund, Sobranie.Photoeffect, opened in Russian this April, offering a 14% return for investors putting up a minimum stake of $16,700.
The fund is believed to contain more than 295,000 original prints worth around $467m.
In January, Dubai-based bank Emirates NBD announced it would work in partnership with London's Fine Art Fund Group to offer consulting advice to banking clients looking to invest in art.
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