Want To Invest In Fine Wine? There's A Token For That

Editorial Staff

3 November 2022

The tokenization revolution continues to roll and its latest area is owning fine wines – often very expensive as money has poured into the space.

Singapore-based , the private market exchange that is using blockchain-driven tech to change access to assets, has brought out a curated portfolio of vintage wines from the Burgundy region of France, including Domaine Coche-Dury and Domaine Leroy.

In September, the primary subscription for these wine tokens was completed at S$0.83 ($0.59) per token. The minimum subscription size was set at 1,000 tokens or $$830, to give investors fractional access to the investment deal. The secondary trading of tokens is now live on the ADDX exchange.

The rollout of this new offering is yet another example of how digital assets – to use a broad term – are said to be widening access to assets ranging from private equity to works of art. See an overview of developments here.

The portfolio is managed by Provenance Treasures a licensed wholesale wine and alcohol trading company that is a subsidiary of Singapore Exchange mainboard-listed company Intraco Limited. The investment hurdle return rate is 8 per cent per annum, where the portfolio manager will only receive management or performance fees when returns are above the hurdle rate. To date, Provenance Treasures has purchased and taken delivery of 234 bottles of wines with an indicative worth of S$696,000. It is expecting another 125 bottles with an indicative worth of S$386,000 to arrive in Singapore by November 2022.

The vintage years of the wines fall between 2006 and 2020.

As portfolio manager, Provenance Treasures has the discretion to make wine-trading decisions in consultation with Domaine Wines, a shareholder of Provenance Treasures. Founded in 2014, Domaine Wines is a Singapore wine distributor that focuses on French Burgundy wine.

Provenance Treasures will take into consideration factors such as the prevailing general economic environment, consumers’ demand and wineries’ supply situation of selected wines, expected price trends and global wine consumption trends, with the goal of optimising investment returns.

Provenance Treasures may then return the proceeds of wine sales to investors as capital and redeem a corresponding number of tokens from investors. The portfolio manager may also decide not to return the capital, and instead reinvest the sale proceeds by importing new bottles of wine.

Founded in 2017, ADDX says it cuts manual interventions in the issuance, custody and distribution of private market investments. It can cut minimum investment sizes down from $1 million to $5,000, thereby expanding investor access to private markets. To date, ADDX has listed more than 40 deals involving blue-chip names such as Hamilton Lane, Partners Group, Investcorp, Singtel, UOB, as well as Temasek-owned entities Mapletree, Azalea, SeaTown and Fullerton Fund Management.