Nobles Crus price estimates for Burgundy were much less overvalued than price estimates for Bordeaux. Based on the comparison between the prices (August 31, 2012) provided by Elite Advisers and Liv-Ex for a representative sample, Nobles Crus estimates exceeded those of Liv-Ex by 39.02% for Bordeaux and by 20.72% for Burgundy. It is likely that this difference has increased, as valuations of Nobles Crus appear not to have changed much while Bordeaux prices went down and Burgundy prices rose. Mainly taking Burgundy, large shareholders have got a good deal at the expense of small shareholders.
On the other hand Elite Partners said: "We entered into a negotiation during several months on the selection of bottles to be part of the reimbursement in kind (the Bottles)." Large shareholders have therefore participated in the selection of bottles. Obviously they will have refused any suspicious bottles. However, with the Nobles Crus purchase methods (purchases from individuals, restaurants, etc ...), there may well be a significant number of 'bad' bottles in stock.
The shareholder who completed the transaction is undoubtedly Banca Generali. Not only did they place Nobles Crus shares in their clients' portfolios but they had previously acquired a very large number of parts for nine sub-funds of their Luxembourg SICAV BG Selection Sicav.
In its accounts of 31/12/2013, BG Selection Sicav already accounts for a fixed loss of 15% (haircut) on their Nobles Crus shares compared to the Net Asset Value published by Nobles Crus.'
It is interesting to note that the Generali Fund Management offices are located in the same building as the Elite Advisers offices.