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15/12/2017

Investment and LiveTrade Update

by The Investment Team

2017 closing statements

Given the elevated trade volumes that characterised 2017 it is a little surprising that the LT Index moved up just 4% through the course of the year. A ‘goldilocks’ balance of buyers and sellers saw a generally efficient transfer between sellers looking to lock in profits from recent price increases and an export orientated buyer meeting consumption and inventory demand.

Taking a step back 2017 was a further stage of normalisation following the 2009-2014 boom and bust. Demand was broad based with a healthy thirst across regions and vintages. In Bordeaux, the 1st Growths starred with Lafite first amongst equals and young/cheap vintages again finding greatest favour (special mention must be given to the second wines which soared in a manner reminiscent of 2010). Burgundy edged up to yet more giddy heights whilst Champagne continued its inexorable progress towards the investment mainstream.

EP 2016 proved a tremendous fillip to market sentiment and prices in 2017 and will continue to be a presence through the years ahead. We appreciated the absence of Parker from the frontline of commentary which served to demonstrate both his importance as much as to reassure that all will be well without him.

On this note, the future of Bordeaux criticism – and EP in particular – is now in uncharted territory as we look forward to the unshackled Neal Martin teaming up with Antonio Galloni at Vinous, and The Wine Advocate’s Editor-in-Chief Lisa Perotti-Brown taking the Bordeaux EP hotseat for herself for the 2017 campaign. It seems the lure of ‘the old days’ and Parker’s consistent and relatively predictable scoring remains reassuring and thus the power of the 100RP label appears as strong as ever. Make no mistake, the importance of sound criticism is vital to the health of the ‘relative value’ trading model so we will be watching developments extremely closely.

LiveTrade and the importance of Portfolio Management

2017 was certainly the year you took hold of your wine collections and portfolios and gave them a good old-fashioned ‘shake down’. With the global market still thriving there has been, and continues to be, demand for wines of all shapes, sizes and vintages – and the combination of our live valuation system and the guaranteed buying prices on our LiveTrade screen have enabled hundreds of clients to release the equity tied up in their Reserves. In many cases this has been reinvested into a new wine investment opportunity, and in others it has been a case of ‘I used to like this, but now I like this, so I’ll free up the cash to buy the wines I really want to drink.’

What is clear is that there’s never been more appetite for really making sure that your collection is working for you, regardless of your aims and ambitions for it. With a 450% increase in the monthly number of client-executed trades through the screen and a progressive doubling of the average trade value over the year the total value of wine bought and sold directly through LiveTrade has risen from under £200,000 per month in January to over £1.4m per month in November – a sign of real confidence in both the market and our willingness to deal within it.

We firmly believe that there is much more to come as more of you look to maximise the capabilities of your wine collections, rotating, liquidating and upgrading your wines to suit both your tastes and the market conditions.

Wishing you all a very happy Christmas and a prosperous New Year.