Foreign-owned wine fund set up in China

Societe Generale (SocGen), a leading French financial institution, announced this month a plan to launch a wine fund in China, targeting the country’s fast growing new rich.

The French bank received approval to start wine funds on the mainland under the qualified domestic investor (QDII) scheme. It will be the first overseas financial group to issue a Bordeaux wine fund in China mainland, in Beijing.

According to previous wine fund management experience in Europe, the average annual return rate of Bordeaux wine fund is about 10 per cent, said Hsiao-yun Lee, the chief executive officer of China-based SocGen.

“There are increasingly more young wealthy people interested in drinking and collecitng wine, and many of them see wine as a sign of a high quality of life”, said Lee. A report from HSBC Holding Plc showed the average of rich people on China mainland is 36, compared with 48 in Hong Kong and 43 in Taiwan.

More than good news for fine wine investors, this is clearly a sign that fine wine is welcome by banking groups and their clients as a recognised asset class.

Source: ChinaDaily.com, Boltons Wine Investment, October 2010