Friday, December 01, 2006

Young wine fanatic ups the ante

Rudy Kurniawan inhabits a high-rolling club of aficionados where cases go for $75,000. His passion has driven up prices -- but don't call him a collector.

By Corie Brown
Los Angeles Times Staff Writer

December 1, 2006

DRESSED IN scruffy jeans, a tight, gray T-shirt and cowboy boots, Rudy Kurniawan slid into a front-row seat at a Christie's Beverly Hills auction room. He didn't blend with the cashmere and Cole Haan crowd hoping to pick up a few bottles of rare and old wine. And it wasn't just his wardrobe.

In a few short hours that Saturday afternoon, the then-29-year-old Indonesian-born Kurniawan spent an estimated $500,000. For one case of 24 half-bottles of 1947 Chateau Cheval Blanc, the famed St. Emilion premier cru, he dropped $75,000. Then he bought a second case of the same wine for nearly as much.

A week later, he went on another spending spree at a Zachys auction at the Peninsula Hotel in Beverly Hills. Then came buying binges in New York at Sotheby's and at an Acker Merrall & Condit auction. During the last several years, Kurniawan has spent an estimated $1 million a month bidding at nearly every auction of old and rare wine in the country.

He spoke heavily accented English when he came to Los Angeles to attend Cal State Northridge 11 years ago, had his first taste of fine wine only six years ago, and makes his home in Arcadia. But Kurniawan has enough family money to have amassed one of the world's premier wine collections, estimated at its peak to be more than 50,000 bottles of the most celebrated Bordeaux and Burgundy wines of the last century.

And he's still buying. Though he's culled his old wine collection, selling off duplicates in two recent Acker Merrall sales that grossed $35.4 million, he continues to buy entire cellars directly from other collectors as well as at auction, and he's investing heavily in young wine as it is released from Europe's top producers.

Simple passion is his explanation. "I'm not a collector. I'm a drinker," Kurniawan says, his eyes smiling behind black-framed glasses sporting the silver dagger insignia of rocker-chic jeweler Chrome Hearts. Now 30, he gels his straight black hair off his soft-featured face. "People who know me and come to see my cellar know that they can drink whatever they want. Wine is something you open and you share."

A slight man whose unconscious self-confidence is the only tip-off that he's old enough to drink, Kurniawan would rather the world didn't know much about him. He won't disclose the identify of his family or the source of their fortune. His father, he says, gave him an Indonesian surname that is different from the family's Chinese name to allow him to maintain his autonomy.

Kurniawan's outsize taste for old wine, however, has changed the market, say auction house insiders. Since he started buying, prices for rare wine have skyrocketed. As he stepped up his acquisitions in 2004, a dozen other ultra-rich buyers emerged to compete with him for the best bottles. And the market for old wine exploded.

The average price of a bottle of wine sold at auction has increased 62% from the first quarter of 2001 through the end of the third quarter of 2006, according to Wine Market Journal, an online service that tracks wine auctions around the world. Last year, the dollar value of the old wine market rose 31%, with a total of $166 million spent at auction worldwide.

The rise has been much steeper for the rare wines Kurniawan favors. One example: At the start of 2001, bottles of Bordeaux's famed 1945 Mouton Rothschild, on average, sold for $3,759. At a recent auction, a bottle sold for $10,337, according to Wine Market Journal.

"The market has changed radically," says Allen Meadows, editor of Burghound, a leading international publication tracking Burgundy wine, who believes that Kurniawan's heavy buying has been a significant factor. "I used to go out and buy old Burgundy whenever I wanted to. It was cheaper than the new stuff. Now, older wines are selling for 20 times what I used to pay only a couple of years ago."

CHINESE by heritage but born in Jakarta, Indonesia, Kurniawan is the youngest son of a family that, he says, owns businesses in China and Indonesia. His father died six years ago, and his oldest brother is now in charge of the family's affairs, he says. "My family is very private," he notes.

The family also is close-knit. Kurniawan settled in Arcadia because his mother, a frequent houseguest, felt at home in the Chinese-language community. "I'm Chinese," Kurniawan says. "If my family comes over — they don't speak English — it's easier for them there. My family is very traditional, strict. I'm the rebel of the family, doing my own thing."

Rebellion, to Kurniawan, means embracing Western culture and making Los Angeles his home. Although his brothers and cousins attended college in the United States, he says he is the only one who stayed. And soon he will move out of Arcadia. For the last year, Kurniawan has been renovating a mansion in Bel Air Crest that will bring him closer to his network of wine friends. He drives a limited-edition black Continental Flying Spur Bentley, one of several cars, including a black Ferrari, in his garage. While gray T-shirts and jeans are his preferred wardrobe, he flashes a Patek Philippe Nautilus 5712 on his wrist.

Kurniawan plans to go into the retail wine business. With partner Paul Wasserman, a local specialist in Burgundy wines, he says he will open a wine store near the Grove shopping center in the Fairfax district. The plan is to specialize in the expensive wines he loves to drink but also to offer wines that will appeal to more cost-conscious shoppers. With a bit of his own collection in the mix, the shop will give Kurniawan a public presence in the Los Angeles wine community.

It was at a birthday dinner honoring his father at a restaurant on San Francisco's Fisherman's Wharf just before he died that Kurniawan took his first sip of fine wine — a 1995 Opus One, the most expensive wine on the list at $150 a bottle. The restaurant is long forgotten, he says, but after that first taste, wine became a consuming passion.

Over a recent lunch at Patina, Kurniawan tried to describe the intense pleasure he says he experiences when he tastes a great wine. "It's the balance, the perfect combination of New World extraction and Old World finesse and elegance," he said. Though he now speaks flawless English, Kurniawan was frustrated as he searched for the right words. Finally, he said, "I don't think I can describe it."

Like most young wine collectors, Kurniawan started out buying high-priced California Cabernet Sauvignons — including Screaming Eagle, Harlan Estate and Colgin Cellars. He's moved on to Bordeaux and Burgundy wines; Domaine de la Romanée-Conti, the legendary Burgundy domaine that produces some of the world's most expensive wines, is his current favorite.

He says he has tasted enough French wines from the 1800s to say the best wines ever made were produced before the devastating phylloxera infestation in the 1860s. "I prefer mature, fully integrated wines," he says. "You can talk about those bottles for the rest of your life."

After 140 years in the bottle, these pre-phylloxera wines still taste "fresh" to Kurniawan. The outrageous claim is difficult to challenge. Only a handful of people in the world can say they've tasted enough of these wines to argue the point.

For this lunch, he's brought along a 1962 Domaine Roumier Bonnes-Mares, a vintage of grand cru Burgundy that recently sold for $6,912 at auction. This bottle, Kurniawan says, is "still young" by his standards.

While the sommelier carefully opens the rare wine, Kurniawan turns his attention to the 2-month-old Chihuahua, Chloe, he has cradled inside his white leather jacket. No one says a word when he offers his dog a sip of water from his water glass.

Kurniawan is an important guest at Patina. Among his wine friends, the young connoisseur is known to be an extremely generous host, throwing frequent dinner parties there and at other haute cuisine restaurants.

The dinner parties are a chance for Kurniawan to taste several of his wines at once, he says. Though he has read a few wine books, he says tasting is the best way to learn about wine. It's an extremely expensive approach to wine education. And while "it's not an overly intellectual approach," says Burghound's Meadows, a frequent guest at those dinners, "we'd all learn by tasting if we could afford to do it."

These lavish dinners are Kurniawan's calling card into a rarefied social circle. "Wine is a vehicle that connects people," he says. Among his Los Angeles wine friends are Univision Chief Financial Officer Andrew W. Hobson and investment banker Joe Wender, husband of California vintner Ann Colgin, as well as music industry executives and movie producers.

Kurniawan's social circle also includes the dozen bankers, real estate tycoons and venture capitalists who bid against him at auctions. "We all know each other," says Eric Greenberg, 41, chief executive of Innovation Investments, a San Francisco dot-com investor. "We compete against each other, and then we drink together."

Last year, Kurniawan flew Julian Serrano, executive chef at Picasso in Las Vegas' Bellagio hotel, and his kitchen staff to Los Angeles for a dinner party for 20 of his friends. His prerenovation Bel Air house, he realized too late, wasn't equipped to handle the elaborate meal Serrano planned to create. So Kurniawan paid Josiah Citrin, chef-owner of Mélisse in Santa Monica, to allow Serrano to clear out part of the restaurant's kitchen so he could make the dinner there.

There was 1962 Moët & Chandon brut Champagne to go with a wild rice cake topped with caviar. Magnums of 1978 Henri Jayer Vosne-Romanée Cros Parantoux were paired with roasted pigeon. Magnums of 1947 Pommery & Greno Champagne accompanied mascarpone gnocchi with Alba truffles. Double-magnums of 1959 Chateau Lafite Rothschild were opened to drink with the Kobe beef. The final flourish: the 1947 Chateau Cheval Blanc that Kurniawan bought at Christie's for $75,000 a case.

The wines for that dinner were worth hundreds of thousands of dollars. But the evening was no more spectacular than most of Kurniawan's dinner parties. "It's like this every time," says one frequent guest. "No one is as generous as Rudy."

As usual, he turned wine appreciation into a guessing game. After a team of eight sommeliers appeared around the table to pour each wine from crystal decanters, there was a pause to allow everyone to swirl and sniff, then sip. One by one, Kurniawan asked each guest to name the producer, the vintage, even the vineyard.

A potentially humiliating experience became a genteel parlor game in Kurniawan's hands. The guesses were wild and only occasionally near the mark. And it was with evident joy that Kurniawan revealed the identity of the wines, each more spectacular than anyone had guessed.

JOHN KAPON, the 36-year-old son of Acker Merrall owner Michael Kapon, created the wine retailer's auction division in the mid-1990s. He quickly realized that he could use private dinners to create an insiders club for high-rolling collectors such as Kurniawan. His annual "Wines of the Century" weekend costs $20,000 to $25,000 a person, and that's just for three meals and a total of 90 2-ounce tastings of rare and old wine.

Currently the youngest president of an auction house, Kapon is the only auctioneer who works with a gavel in one hand and a glass of wine in the other. And he was the first to notice Kurniawan's appetite for wine.

"He got me into wine," Kurniawan says of Kapon. "He would tell me what to do, what to buy. Now it's a disease. There's always something I want to try, something I don't know."

If you are spending freely, it doesn't take long to be noticed. "In the wine world, you can be somebody quickly," says Rob Rosania, a 35-year-old principal in Stellar Management, a New York City real estate concern. His cellar isn't as large as Kurniawan's, he says. But he's catching up. Nothing in the world, according to Rosania, creates the instant credibility that you get from pulling the cork on a rare bottle of Burgundy.

There is a lot of "reckless" spending, says American wine critic Robert M. Parker Jr. "These guys have to have it. It's a sign of status." Price, he says, is irrelevant to them.

There are serious pitfalls to buying old wine, Kurniawan says. Counterfeit wines and wines damaged during shipment or poor storage are common. Only after he'd tasted hundreds of bottles did Kurniawan learn how to spot the fakes, he says. He studies the corks for signs of tampering, knows the telling details of the labels for all of the top wines, and can spot bottle markings that don't match that bottle's label.

But identifying wines that have been damaged during handling can be more difficult. As rare wine changes hands more frequently, it's nearly impossible to track a bottle's history, Kurniawan says. Did it sit on a loading dock in the hot sun, even for a day, back in the 1970s? Then chances are it's cooked, ruined. And with rare wine, there are no returns, according to the auction houses.

For longtime collectors, today's high prices mean it's time to sell. "I have 4,000 to 5,000 bottles in my cellar," says Joe Smith, the former chief executive of Capitol-EMI records. Bottles of Henri Jayer Burgundy that he bought for $40 are now worth thousands of dollars each. "I'm selling," Smith says. "Let these guys have their bragging rights."

In the time that Kurniawan has been a force in the wine market, the nature of wine auctions has changed radically. Zachys was the first auction house to serve food and encourage bidders to drink during the auction. Though Sotheby's and Christie's haven't totally abandoned their button-down culture, they've begun serving lunches.

At a recent Zachys auction at the Peninsula Hotel in Beverly Hills, nine guys at the back of the room were partying as they bid. Their table was littered with wine bottles: a 1991 Sassicaia super-Tuscan, Williams Selyem Pinot Noirs and a Paul Hobbs Cabernet Sauvignon. Laptop computers were wedged between wine glasses; paddles were thrust high in the air as the men bid aggressively for the big names in California wines.

At other tables, clothing magnate Georges Marciano, film director James L. Brooks, celebrity photographer Phil Ramey, entertainment attorney Howard Weitzman and movie producer Arthur Sarkissian nibbled the free sushi and truffle-oil-flavored popcorn while they sipped the free Champagne.

Conspicuous by his absence was Kurniawan. "Rudy has been a huge force in the market," says Brian Orcutt, a consultant who buys wine at auction for wealthy collectors. "But it's difficult to continue at that pace. There isn't that much reason to buy the sixth case of 1961 Latour."

True enough, says Kurniawan, who recently began pursuing a new passion: art collecting. Lately he has purchased paintings by Edward Ruscha, Andy Warhol and Damien Hirst. "Art makes wine look cheap," he says.

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