Bordeaux Is Illiquid and Other Wine Investment Hazards

More than half a dozen firms peddling wine investments in the U.K. alone went belly up last year. Why have there been so many flops?

“Most funds collapse because they have the wrong structure, the wrong strategy and no focus on how to exit,” says Brian Mota, co-manager of The Wine Trust, a U.S. fund founded in 2010 with $15 million to $20 million in assets. Mota is convinced The Wine Trust’s private-equity-fund-type setup, in which investors’ money is locked in for eight years, is the most appropriate for wine, Bloomberg Markets magazine will report in its February issue.