China’s Hina to launch vineyard fund

And with increased consumption comes a greater appreciation. While some drinkers are still happy to mix their burgundy with Coca-Cola, others recognize wine's investment potential.

"Chinese are now demanding for top-tier wines and they understand the sector quite a bit," Hanson Li, managing director of Hina Group, one of the leading Chinese PE and M&A corporate finance boutiques, tells AVCJ. "At the same time, many investors are also looking to invest outside of China and their favorite sector is real estate."

Put the two together and you come up with vineyards. Hina has launched the Hina Vineyard Fund, which is seeking to raise $100 million from high net worth individuals in China. A first close is expected within six months.

The fund will primarily invest in premium vineyards in Napa and Sonoma, but also look at opportunities in Mendocino and Santa Barbara. Located at the north of San Pablo Bay in California, Napa is widely considered as one of the best viticulture areas in the US.

"The best opportunity comes from the supply and demand imbalance: premium vineyards are limited and the demand for good grapes is increasing. Historically, premium grape prices in Napa have appreciated by more than 8% per year," says Li. "If you go to countries or regions in the US where they have a lot of vineyards for bulk grapes, the opportunity is less attractive."

Hina has some previous experience in the industry through its Beijing-based renminbi-denominated private equity fund. Last year, the fund led a RMB54 million ($8.6 million) round of financing for Xinjiang Xiangdu Winery, a leading fine wine producer in the western China's Xinjiang region. The due diligence process required Hina to research the domestic wine market and, at the same time, San Francisco-based Li was appointed to evaluate relevant opportunities in the US.

After a concerted networking effort, the Chinese investment boutique signed up a string of US industry veterans as co-GPs. They include Richard Wollack, founder of Napa-based Premier Pacific Vineyards; Skip Whitney, a principal with real estate firm Kidder Mathews; and Frank Farella, a founding partner of law firm Farella Braun + Martel, which represents several premium wineries and vineyards in Napa.

"Richard has spent many years in vineyard and real estate investing and Frank has been in the industry for over 40 years, their networks and expertise are expected to help us with deal sourcing, comprehensive due diligence, and asset management" Li adds.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Fundraising
• Consumer
• Greater China
• Fundraising
• Consumer
• China