12 October 2006

Burgundy the new Bordeaux?

According to an article in Bloomberg.com it seems that investment gurus do have a heart after all. Acquiring heritage, sponsoring struggling craftsmen, investing in legends..... it all comes down to wine -French wine. But where do these financial whizzes/moghuls invest? The choice seems to be either classic (bordeaux and regions) or ambitious (Burgundy).
Here is a list of recent buyers and acquisitions:

Bordeaux:
Bernard Arnault and Albert Frère. Château La Tour du Pin (grand cru Saint Emilion)
Bouygues brothers. Château Montrose (Saint Estèphe)

Burgundy:
Francois-Henri Pinault (already the owner of the Chateau Latour-Bordeaux). Domaine Engel -côte de Nuits parcels - located in Clos Vougeot, Echezeaux, Grand Echezeaux and Vosne-Romanee premier cru - six planted hectares but no buildings or equipment for 13M€ (30% above the normal price).

So Pinault in Pinot country? and at that price? There is concern within the industry that such an inflated price will not only drive up land prices but that Pinault will attempt to recoup his investment by charging inflated prices for Domaine Engel - forcing similar properties to follow suit. Good news for investments in the area, mainly American. For example, Robert Lyster, co-founder of hedge fund Lyster Watson Management Inc. has found a new investment for his hedge fund millions, the land rich, cash poor, winemaking lifestyle.

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