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Vinum Fine Wine Fund shut down

The Vinum Fine Wine fund has been closed down after a string of valuation errors were uncovered.

The fund had been suspended in January this year when the problems came to light, but administrators PSG and the custodian, Butterfield Bank, could not resolve the issues.

The problems lay in the failure of the valuers to take into account changes in how fees were amortised. This led them to calculate the Net Asset Values (NAV) incorrectly.

Following on from this it was discovered that a large number of wines in Vinum’s portfolio had been valued inaccurately. Back in January, PSG announced that the valuation errors had lead to the Bordeaux first growth plus cell being overvalued by 7%.

The Guernsey Financial Services Commission (GFSC) grew increasingly worried at the length of time taken to sort out the problems and pressure mounted to change certain aspects of the fund.

According to the board of directors, these were changes Vinum was unwilling to take.

In a letter to shareholders, the board said: “The directors have concluded that it is no longer in the investors’ best interests to continue the fund, and therefore the directors regret that the most prudent course of action is to instigate an orderly closure of the fund as quickly as possible.”

The directors are now considering the best course of action to take to protect their investors’ interests. A timetable for closing the fund is expected to appear in the coming weeks.

Rupert Millar, 22.04.2010

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