Arch To Launch Wine, China-Focused Energy Funds

Jun 8 2007 | 11:21am ET

U.K.-based Arch Financial Products is looking for a little wine to complement its cheese. The US$425 million firm is launching an absolute-return premium wine fund this summer, which will invest exclusively in vintages from the top chateaux in Bordeaux.

“We have obtained privileged access and assured provenance—correct storage, limited movement throughout its life—through our internal specialist here and professional industry partners of typically world-recognised brands established over several centuries,” said Stephen Decani, Arch’s head of group business development.

“As a firm we have already invested in some extremely rare parcels, including 1945 Mouton Rothschild, 1961 Haut-Brion and 2003 Lafite Rothschild.”

The firm is betting that long-term prices will grow as the supply of vintages decreases and demand increases.

The identity of the portfolio manager, fees and terms could not be obtained by press time. 

Arch is also beginning to raise capital for a China-focused energy fund, which will invest in private equity and specialist-finance-type deals across the Far East and Middle East, with a big focus on China, Decani said. “The fund will be run with two joint venture partners in the region—one a financial services firm with significant presence in the region, while the other is an economic advisory business to governments, trade bodies and the energy industry in China and internationally.”

Key drivers for the new offering include huge energy supplies and demand domestically, improving regulation and investment process, the Chinese government’s move to encouraging external investment, and a “huge wall” of Chinese money that will eventually be able to invest in deals within their own country, according to Decani.

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