New Venture Opens-up Whisky as Tangible Alternative Asset Class – Scotch Whisky News
New venture opens-up whisky as tangible alternative asset class
Liquid gold an alternative to solid gold?
A FORMER Master Distiller has launched a new company in the UK that invests and trades in rare and premium whisky. The Whisky Trading Company, founded late last year and now being opened-up to wider investors, aims to deliver returns in excess of 15 percent per annum.
The company has identified 3,000 bottles as part of its initial investment (some distilled before World War II) and £450,000 has already been raised to secure options on this initial stock. The investment opportunity is now being widened as it seeks to raise an additional £2-4 million to capitalise on market opportunities.
The new venture has been set up as an Enterprise Investment Scheme (EIS) in the UK, delivering additional tax benefits for early investors.
Investing in the top 10 performing whiskies from the beginning of 2008 to the end of 2012 would have seen returns of 508 percent; the top 100 returned 306 percent, the top 250 returned 225 percent; and the top 1,000 saw a return of 123 percent, as per data from UK auctions (Whisky Highland).
With a huge market already well-established in fine wine investment, whisky as an alternative investment market is dynamically growing both at home and abroad. Whisky auction houses in the UK alone saw 14,000 bottles sold in 2012, a huge jump from just 2,000 in 2008. By 2020, this number is estimated to grow by 114 percent to 30,000 bottles. Globally 2012 saw around 75,000 bottles auctioned valued at £11 million, and this is expected to double in volume to 150,000 bottles in 2020 with values trebling to £33 million, suggesting the trend towards premiumisation will continue.
The Whisky Trading Company was founded in October 2012 by David Robertson, formerly Rare Whisky Director at The Dalmore and prior to this Master Distiller at The Macallan, who has over 20 years in the whisky industry, and Lindon Neil, a former investment banker at RBS and Wachovia Bank. David previously secured the sale of the world’s first £100,000 bottle, a 64-year old Dalmore Trinitas, in 2010.
Commenting on the launch of The Whisky Trading Company, David Robertson said: “There is a finite stock of premium whisky and a growing demand. Every bottle sold and taken out of circulation decreases the stock available and raises the value of the remainder. We want to capitalise on this, whilst also providing investors an attractive investment proposition given the EIS structure.
“The important point to remember about whisky as an alternative asset class is that unlike wine the product doesn’t have a cellaring period and will never perish and turn to vinegar. It is a far more stable liquid investment as a result. And the volume of premium bottles being traded continues to grow significantly year-on-year, with more than 17,000 expected through 2013.
“We want to capitalise on that and deliver significant returns to investors.”
Notes:
- EIS: The Whisky Trading Company qualifies under EIS rules in order to deliver tax benefits for investors based in the United Kingdom, depending on their circumstances. The main benefits are:
- Income tax relief of 30 percent of the subscription (£1m cap per investor);
- The ability to carry back the income tax relief to 2011/2012 for tax relief at 30 percent (£500k investment cap per investor);
- Unlimited capital gains tax deferral relief;
- Capital gains tax exemption on disposal of the shares; and
- Unlimited 100 percent IHT relief after two years.
- Investment in alternative assets is becoming increasingly popular. An increasing number of investors are putting some of their wealth into more tangible assets such as fine wine, art, classic cars, coins, jewellery, stamps, watches and now whisky, which diversifies their portfolio. They are deemed to be investments that are less correlated with macroeconomic shocks, the performance of the macro economy and the volatility of the stock market.
- Global socio-economic trends have led to an increase in the demand for luxury goods, which includes premium whisky around the world in both mature and emerging markets.
- The most valuable whisky ever sold at UK retail was 64-year old The Dalmore Trinitas, which fetched £120,000 in Harrods in 2010.
- The most valuable globally was a 62-year-old The Dalmore Sinclair, sold at Changi Airport, Singapore, which sold for £135,000 in 2011. (First sold in 2002 for £25,000 at auction, a second bottle was acquired and drunk at Penny Hill Park Hotel in April 2005 for £32,000 and the final bottle was then placed with Changi airport in 2011.)
- The value of rare and collectable whisky depends on reputation of distillery and the quality of the whisky itself. The most sought after whiskies usually originate from a number of places: extinct distilleries, classed as “silent stills” e.g. Brora, Port Ellen, Rosebank; older aged vintage bottles; certain brands – particularly iconic brands such as The Macallan, The Dalmore, Balvenie and Glenfiddich, and, in particular, limited edition varieties – for example, Macallan released 2,012 bottles to celebrate Queen Elizabeth’s Diamond Jubilee and The Dalmore have recently released their Constellation Collection – and, finally, having a bottle in its original packaging – a liquid time capsule!
- All auction figures and statistics in this press release are attributable to Whisky Highland.
About The Whisky Trading Company
The Whisky Trading Company is a specialist rare whisky merchant established in London and Edinburgh in 2012. It offers a unique opportunity for UK taxpayers to participate in the returns attainable from the rare whisky market by investing in a start-up supported by the benefits of the Enterprise Investment Scheme (EIS), a government-sponsored initiative to encourage investment in UK enterprise.
The company buys and trades only the rarest and super premium of whiskies and aims to deliver returns in excess of 15 percent per annum to its investors and shareholders. As with fine wine, there is finite supply and growing demand for rare whisky, with every bottle sold and consumed increasing the scarcity and this value of remaining stock. These market conditions coupled with our expertise in the industry deliver a strong investment opportunity for investors seeking to diversify their funds into alternative assets.
The company was set up and is managed by whisky expert David Robertson, who has over 20 years’ experience in the whisky industry including as Master Distiller at The Macallan. He also created and sold the world’s first £100,000 bottle of whisky, a 64-year-old Dalmore Trinitas.















