'Rare fine wines, billionaires... The two go hand-in-hand, says new research'

paulfrasercollectibles

2015-06-26 11:55:18

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'Rare fine wines, billionaires... The two go hand-in-hand, says new research'

Paul examines why Forbes magazine's new rich list could be a good reason to pop a fine wine cork

This month, Forbes magazine has released its influential rich list, tracking the fortunes of the world's billionaires.

Despite the recession, the number of "super rich" has reportedly increased by 27% over the last year with a reported 1,011 billionaires worldwide.

#1Carlos Slim Helu, Mexico (net worth: $53.5bn)

Wealthiest among these is Carlos Slim Helu "and family", the self-made Mexican tycoon who pounced on the privatisation ofhis country's national telephone company in the 1990s.

Self-made man: Carlos Slim Helu, reportedly worth $53.5bn

After coming third on Forbes' list, last year, the 70-year-old widower has now shot up to first place, with a reported net worth of $53.5bn.

At second and third place in the billionaires' hit parade are Bill Gates, the Microsoft Chairman (net worth: $53bn), and Warren Buffett, the investor and philanthropist ($47bn).

Incidentally, it is often said that Buffett's shrewd investment skills were inspired by his Depression-scarred parents... and a childhood obsession with stamp collecting.

Bill Gates is also a prolific collector of art and rare manuscripts.

Liv-Ex, the leading fine wines market analyst, has analysed Forbes' list.

Through its own research, Liv-Ex has tracked fine-wine prices against the number of Billionaires in the world.

The chart below shows Liv-Ex's findings over an8 year period...

A pretty good match!

Fine wines and the world's wealthy

Now, while Liv-Ex'schart doesn't claim to represent the wine spending habits of the world's rich, it does show thehigh level of interest in fine wine investment.

Anincreasing number of people areturningto finewine as a viable investment.

Recent stories in our wine news archive show how record prices are being set - pretty much every other week.

Shortly before Christmas, last year, UK newspaper The Telegraph ran a story entitled "Red wine offers 900% investment return" based on research by Liv-Ex.

"The investment return from the red wine from Bordeaux is greater than that achieved by investors in the stock market, property, oil, stamps and fine art, according to the London International Vintners Exchange," - the Telegraph

The article cited the incredible investment performances of certain wines such as a 12 bottle case of 1982 Lafite Rothschild, which rose in value by 857% over the past decade.

The continuing rise of Asia

Two-thirds of the new entrants to Forbes' rich list come from Asia.

China reportedly has the second highest number of billionaires, second only to the US.

In January of this year, the first Sotheby's stand-alone wine sale in Hong Kong realised exceptional salesof $6,784,842 in 10 hours.

This was way above the sale's high overall estimate of $5.2m.

It was also Sotheby's highest total ever achieved for a single day wine sale.

It's time to invest in fine wine...

The fine wine market has transformed in the past decade, with global turnover increasing from under $1bn a year to more than $3bn, according to other Liv-Ex research.

The attractions of wine investment are easy to understand. Prices rise based on a simple equation of supply v demand.

Limited quantity vintages continue to be consumed, this adds to the rarity causing prices to rise.

Another benefit is that fine wine is classed as a wasting asset, meaning there is no Capital Gains Tax to be paid on profits when you sell.

As with any alternative investment, getting the right information is crucial for a successful investment.

So, if you're interested in purchasingfine wines please give our team a call on +44 (0) 117 933 9503 or email info@paulfrasercollectibles.com

Regards

Paul

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