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

The realm that goes under the term of tokenization or digital assets continues to spread, and now it includes fine Bordeaux wine from France. A Singapore-based exchange is developing the new offering.

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 ADDX, 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.