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Asked for appraisals of wine funds, several financial investors declined comment because of the esoteric nature of such investments.
Those wine funds that do allow quick redemptions invest in the most traded grapes, like Bordeaux.At least investors can derive more enjoyment from owning valuables than they can from a framed share certificate.
"The success of the two previous wine funds -- they were up on average 25percentt per annum -- and the attraction they had among wine collectors and investors" gave him the idea of opening the new fund, he said.
Hype generated this year by the 2005 Bordeaux, considered the best in a generation, has helped.Interest in wine investment has also spurred the creation of new wine funds, including the Fine Wine Fund in August, charging a 2% management fee and 15% performance fee.
With wine becoming more popular and wine futures starting to trade this fall in Paris, it was only a matter of time before wine funds were born.
There are two primary ways of investing in wine: buying actual cases or bottles and storing them until sale or simply putting money into wine funds.
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The wine fund takes a much kinder approach.
The AWM Fine Wine Fund Ltd. bills itself as the world's first mutual wine fund that invests entirely in actual bottles of wine.
It was Mr. Kaufman's partner, Mr. Owsley, who suggested they start a wine fund that would offer debt financing in addition to private equity.
The idea for a private equity wine fund was born when Mr. Bronfman, 59, left Diageo in 2003 and set out to create his own portfolio of premium wineries.
The Orange Wine Fund, listed on the Euronext stock exchange in Amsterdam, was started less than four months ago and intends to invest both in wine and in companies in the industry.
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