Data from Cult Wines, a UK specialist in the acquisition and investment management of fine wines, suggest that Asian investors have piled into the asset class following the depreciation of sterling in the wake of the Brexit referendum.
The company, which recently acquired the Queen’s Award for Enterprise (International Trade), a UK award set up to recognise companies, said its own sales were expected to jump 47% this year when compared to the 2015/16 period. Currently, the business claims some 2,000 clients across 66 countries.
The interest among Asian investors has increased sharply, particularly from Hong Kong, where the local currency is pegged to the dollar, which has strengthened significantly against the pound over the past year. Cult Wines opened a local office there last year. It expects a 38% increase in its Asian business by the end of 2017; over the past four years its CAGR for the Asian region has been 235%. Hong Kong sales are expected to rise from £6m already seen in the region this year-to-date, to some £20m by 2020.
Cult Wines notes that the sector’s benchmark Liv-ex Wine 100 index has gained some 17% since the UK voted to exit the EU. The index stands at a five-year high, and a recent survey of Liv-ex members found they expect the fine wine market to rise another 8% this year.
The fine wine secondary market is valued at some $4bn globally, according to Cult Wines, and is seen to offer defensive and diversification properties that are non-correlated to other financial assets.