INVESTMENT OBJECTIVE

• Develop an investment product with excellent opportunities for long term investors

• Grow a portfolio aiming at double digit annual returns over any 10 year period

• Maintain a low downside risk thanks to the purchase of quality properties with great prospects at  a deep discount within an international diversified portfolio

• Control the entire value chain of the wine industry. From owning the properties and growing         
  grapes on the vines, to selling bottles of wine to international distributors or to end-users      
  through a dedicated web shop

• Explore and manage vineyards. Upgrade, renovate and reconvert assets and buildings with the  
  aim to improve operational and cost efficiency

• Produce Premium, Top Premium and Icon wines for international clients

• Develop an investment portfolio with very low correlation to traditional investments like stocks  
   and bonds

• Manage a portfolio that will give investors an effective hedge against inflation

• Become one of the largest, most respected and profitable vineyard managers in the world
   through a regulated fund owned by its shareholders 

 

 

INVESTMENT STRATEGY & CRITERIA

The policy and strategy used to pursue the investment objective is to invest in many aspects directly (e.g. vineyards and wine cellars) or indirectly related (e.g. barrel makers, wine distribution companies) to the wine industry. Initial countries of focus are Spain, Portugal, France, Romania and Italy. In a second phase countries like Croatia, Greece, Bulgaria and non-EU countries may be explored if unique opportunities arise.
The management of the Fund uses its vast resources to search and locate interesting investment properties on a continuous basis in the fund’s target countries.




 Investment criteria


 Investment criteria cannot be specified exactly as prospective opportunities need to be assessed on a case-by-case basis. However, target acquisitions are generally required to meet most of the following investment criteria.


• Potential of min. 12% ROI after 3-5 years of management, exclusive the potential increase of the   real estate value when turning plots of agricultural land into wine production units of  
  marketable wine brands. Exceptions may be made for properties in France where the ROI may be
  lower due to higher purchase prices of vineyards

• Minimum 40Ha of vineyards with the possibility to expand the property to min. 150Ha (except for
  properties in France and especially in the Bordeaux and Burgundy regions where much smaller
  properties are common)

• Properties or areas with a good to very good Terroir (see below) to produce wines of Premium, Top Premium and Icon quality

• Sufficient historical rainfall with available natural water reserves and no other historical
  agricultural issues.

• Low probability of effect of climate change which will be measured by way of historical meteorological data

• Easy access to transport network via road and rail

• Possibility to expand existing wine making facilities e.g. storage and wine related production
   units

• Potential of expanded production capacity of 300,000 to 500,000 bottles annually post
  improvements

• Priority given to fully operational properties that contribute to the cash flow of the Fund within
   24 months

• Acquisition price of max. 50% of their real intrinsic value as determined by an independent
   appraiser and validated by the AIFM. Stress test the forced sales value of a property to be not
   less than the initial purchase price.

• Scalability of properties to a multiple of its initial agricultural vineyard hectares in order to
   reduce the total average purchase price per hectare of productive farmland

• Availability of EU grants on additional constructions, improvements and material

• Exclude speculative properties and adhere to a buy and hold strategy creating valuable assets
   and marketable wine brands with high profit margins.

• Possibility for selected properties to be transformed into a complete wine resort experience
   including wine tasting, fine dining and luxury accommodation.

• Opportunistic acquisition of cooperatives enabling the Fund to buy the harvest of large surfaces
   of wine grapes at low prices and produce premium quality tailor made wines for sizeable
   international buyers 

Terroir

The Fund will continuously search for domains that are ideally situated with a great “Terroir” (the term refers to the natural environment of a specific region that offers a complex interaction of climate, microclimate, soil composition and character, drainage, sunlight exposure, and elevation which all contribute to the unique character of wines from a specific locality) and thus ideal to be reconverted into model vineyards par excellence that will produce top quality wines. In order to do so the Fund will focus on purchasing properties in Mediterranean Europe and possibly some new wine countries (e.g. Argentina, Chili, South-Africa) where the profit potential tends to be the highest because of the much lower initial investment to buy and cultivate a vineyard. 

 

 

ELIGIBLE ASSETS FOR INVESTMENTS

Although the Fund may invest in many sub-sectors of the wine business, its core strategy is to invest in new or existing vineyards and their management, reconversion and cultivation to produce Premium, Top Premium and Icon quality wines. The Fund intends to invest at least 80% of its portfolio in vineyards and related real-estate through one or more Special Purpose Vehicles(SPVs)

Eligible Assets for investments include but are not limited to:
• Vineyards
• Agricultural land
• Buildings and other wine related real estate
• Wine cooperatives (organisations whose objective is to engage in any activity, that is directly or indirectly related to the wine industry)
• Improvement, Reconversion and restructuring of vineyards
• Management of vineyards
• Storage house or cellars for storing wine (sometimes referred to as “Bodegas”)
• Production of Wines including bottling lines
• Wine distribution companies globally
• Building/Chateaux and wine cellars renovations; environmentally friendly vineyard treatments 


Sales of Assets

The Fund intends to make investments that will be held for the long-term appreciation of capital and income, however from time to time the Fund may sell any asset if there is a convincing case that by selling such an asset the Fund may realize substantial profits. Ideally (but not required in order to sell) other more interesting buying alternatives should be available in the short term. Sales may also occur to provide liquidity for the purchase of an asset deemed to be more beneficial.