Australia's International Wine Investment Fund has further diversified its business with the purchase of an 11% in Californian service group Vintage Nurseries.

In its first move into the US market the Fund has paid A$7.8m (US$3.9m) for the share. Vintage Nurseries is the second largest supplier of grapevine rootstock in the US.

About 80% of the Fund's A$265m portfolio is invested in BRL Hardy but the fund's management want to reduce this to 66.5% by June and increase its assets to A$500m in three years.

It has already invested in French groups Gabriel Maffre and Michel Laroche and German retailer Hawesko Holdings.

Investment manager Robert Clifton-Bligh said wine suppliers offered yields between 4% and 7% higher than branded wine companies. The Fund intended to use Vintage Nurseries knowledge and expertise to pursue other investments in the sector in Europe and South America.