Investors can now buy and sell tokens based on vintage French wines on ADDX
SINGAPORE — Wine collectors and enthusiasts can now buy and sell tokens based on a portfolio of vintage French wines on ADDX, the private market exchange announced on Wednesday.
The portfolio will include 359 bottles of wine from top wineries in France’s Burgundy region, including Domaine Coche-Dury and Domaine Leroy, and will be worth more than $1 million. About half of the bottles carry Grand Cru appellations, which is the highest level of wine classification in Burgundy, ADDX said. The vintages of the wines are between 2006 and 2020.
The portfolio will be managed by Provenance Treasures, which is a licensed wholesale wine and liquor trader, a subsidiary of Singapore-listed plastics company Intraco.
To date, Provenance Treasures has purchased and taken delivery of 234 bottles of wine valued at approximately $696,000. He expects the other 125 bottles, worth around $386,000, to arrive in Singapore in November.
To allow more accredited investors to invest their money, the wallet was digitized and split into fractions, or tokens, on ADDX – a process known as tokenization.
Primary subscriptions for tokens were completed at 83 cents each at a minimum subscription size of 1,000 tokens, or $830. This means investors can own a fraction of the wine portfolio for as little as $830.
The tokens were fully subscribed by investors, many of whom are wine connoisseurs, according to ADDX. Starting Wednesday, these investors can also sell their tokens on ADDX.
As a portfolio manager, Provenance Treasures will have the discretion to sell the wine for a return on investment after taking into account factors such as the economic environment, demand and supply of the selected wines, price trends expected and global trends in wine consumption.
However, investors will have first right of refusal to buy that bottle at the potential sale price before any sale is executed, ADDX said.
Provenance Treasures may return the proceeds of any sale to investors as capital and redeem a corresponding number of tokens from investors, or reinvest the proceeds by importing new bottles of wine.
These decisions will be taken in consultation with the French distributor of Burgundy wines Domaine Wines, based in Singapore and shareholder of Provenance Treasures.
There is also an investment hurdle rate of return of 8% per year. This means that Provenance Treasures will only receive management or performance fees when returns are above the hurdle rate.
The development comes at a time when the value of fine wine as an investment class has appreciated 137% over the past decade, according to a 2022 wealth report from real estate agency Knight Frank.
ADDX Managing Director Choo Oi-Yee said, “Provenance Treasures’ Burgundy wine portfolio is the first luxury asset listed by ADDX. The deal allows investors to own and trade coveted premium wines, while earning a return through portfolio value appreciation.