In a world of trade bedlam, could it be time to look at alternative investments?
Whisky: That’s right! You would be more than justified to be shocked and correct to think how is this even possible.
Yet some of the world’s most esteemed and prominent distilleries offset their costs in storage by offering maturing and limited-edition casks for investment or rebottling; subsequently offering incredible returns for those willing to play the waiting game. Riverside Whisky Partners are one such company to make this possible.
Whatever the occasion throughout the world, tumblers are raised in celebration or to lament a loss. One can count on a variation of knowledgeable wisdom from those in the know: “Birthdays come and go, but the love of Whisky is forever.”
For generations Scotch whisky is seen as a symbol of British craftsmanship, that exudes longevity, resilience and is dependable. Historically documented as far back as 1494, with tax records from the Scottish Exchequer Rolls indicating that a friar named ‘John Cor acquired eight bolls of malted barley to create Aqua vitae’. Given the time span of its existence and its robust appeal to withstand economic disruption and uncertainty, whisky remains one of a handful of tangible assets whose future remains extremely bright. Even during the recent pandemic, 2020 exports had a global reach, accruing over £3.8 billion in sales. Projections for 2021 were given another boost, when the Biden administration agreed to suspend the 25% tariff imposed on Scotch whisky imports by the Trump administration.
As any whisky lover is likely to tell you, ‘There are few things in life that get better with age, but whisky is one of them’. Collectors and investors have found that bottles and casks from high profile distilleries become more valuable with scarcity as stock levels diminish. These price surges are directly linked to pre-bottled cask stock that still needs time to mature at the distilleries and investment analyst have identified this fact and developed a familiarity to these market trends to capitalise on the supply chain shortfalls as market demand grows.
Whisky as an investment choice attracts more curiosity from those regarded as professional level investors, and with good reason. In 2019, a single bottle of Macallan 1926 sold for £1.5 million, with a cask of Macallan distilled in 1989 acquired for £161,500 a gain of more than £1.3m which equals an average annual increase of over 27% and enough to make anyone curious.
The Knight Frank Luxury Investment Index tracks the sale prices of luxury goods, for which whisky is classed as one such asset. They found whisky outperforming all other categories, including diamonds, classic cars and art over a 10 year period leading up to 2019. This performance evidence stacks in favour of whisky investment, therefore is seen and implemented as a serious trade and or business that is highly investable over a 5–10-year term.
If one has funds available for the medium term and decides to look at the whisky investment sector, then there is an array of iconic brands in casks to choose from for acquisition. Headline grabbing prices of rare bottles such as the aforementioned bottle of Macallan 1926 can only fuel the interest in the market and although an isolated example this is enough to draw attention from professional investors who often choose whisky as an alternative and buy into young or 10- to 12-year-old single malts in the cask, building a portfolio of leading brands in varying ages to obtain a good return on investment. Whilst some may view the market as taking a punt, the established brands regularly achieve double digit annual growth. Those who are more adventurous frequently choose to invest in a new distillery more as a business venture, and their funds help the business boost cashflow, in the hope of raising the profile and success of the distillery, resulting in financial reward for the investor.
As the market has consistently shown higher performance than mainstream investment sectors and serious investors now view whisky as a real asset class that can be traded internationally, there is a growing number of specialist companies dedicated to investment in cask whisky. Riverside Whisky Partners is the latest company to join these rankings and clearly is a serious contender, bringing years of experience, knowledge and investor understanding from other investment sectors to the whisky market.
A spokesperson from Riverside Whisky Partners was quoted as saying “Our knowledgeable investors are diversifying portfolios and moving to tangible alternatives like whisky that offer greater stability and attractive levels of potential growth over the medium term. Many choose to acquire casks of younger spirits that still need time to fully mature which they will hold for 5 to 8 years before releasing back into the market, either through auction or in some cases back to the distilleries. Entry levels for these younger whiskies make ownership accessible to most and portfolios can be built in blocks or stages so although whisky is not a short-term hold, it offers flexibility both at entry and exit”.
For more information visit www.riversidewhiskypartners.com or call +44 (0) 208 176 4464
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