A pair of articles published last week--first by Le Vif/L’Express, Belgium’s largest francophone daily newspaper, and then by the Financial Times--accuse fund managers of over-stating the market prices of the wines it owns by as much as 37 percent.

The Nobles Crus fund, started in 2008 by Luxembourg-based Elite Advisors, invests in high-end wine--“mainly grands crus from Burgundy and Bordeaux, with a small allocation in Italy and Spain”--and has more than €100 million in assets under management, the company reported in an August press release.

The 54,000 bottles in its portfolio were selected by a team led by “Christian Roger, permanent member of the Grand Jury Européen de Dégustation and recognised expert in both investment management and oenology,” the firm said.

The recent Belgian and British press accounts rely on data from Liv-ex, a large London-based wine fine marketplace, as well as comments from Jean Walravens, a Brussels-based independent financial analyst, who told the British paper that Nobles Crus’ returns “do not reflect reality”. The FT also quoted Chris Smith, a competitive fund manager, and John Stimpfig, a writer for Decanter magazine, who both said Liv-ex prices served as the industry standard for pricing information.

According to the FT “Nobles Crus values its holdings at much higher prices than those used by 10 of its rivals” and the fund “has reported gains in net asset value every single month since the start of 2011, even as the benchmark Liv-ex Fine Wine 100 index tumbled by 23 per cent.”

In response to Delano’s inquiries, a statement from Elite Advisors co-founders Miriam Mascherin (photo) and Michel Tamisier argued that “the Liv-ex 100 [is] an index significant to the restricted UK market but with limited impact, if any, on the internationally renowned wine merchants dealing on a global level through recognized reference market players and valuation criteria commonly used by the well versed experts.”

To contrast the FT’s report that “Nobles Crus’s 50 largest holdings of Bordeaux” were “37 per cent higher” than Liv-ex valuations, Mascherin and Tamisier retorted that “prices quoted from the wine search engine Wine Searcher” only show a “4.52% deviation” from the fund’s valuation.

While Le Vif wrote that the fund’s performance is due to “creative accounting practices,” Mascherin and Tamisier said that “accounting is handled by our depositary bank and complies with international accounting standards. Nobles Crus has absolutely no implications in or influence on the accounting standards used.”

Managers’ figures

The fund is registered with Luxembourg’s financial regulator CSSF and is audited by Deloitte, Mascherin told Delano separately. “Every year we publish in our annual report all sales showing purchase, valuation and sale price. We insist yet again on our total transparency,” she noted on Thursday.

Mascherin provided Delano with five examples of sales from the past year, including the auction of six magnums of a Veneto that fetched 35% more than its valued price, and the sale of 36 bottles of a Bordeaux that yielded 9% less than its estimated valuation. The other figures show that Nobles Crus sold their wine with a profit between eight and 11% above valuation prices.