Reasons to invest in whisky
Whisky is an emerging asset where both the growth and returns have been notable in the past five years. For investors of fine wine, whisky represents the perfect partner to a diverse portfolio of tangible and rare assets.
Limited Downside Risk
Unlike financial markets, there is limited downside risk to holding a tangible asset with intrinsic value such as whisky. Investors are covered through insurance that protects their assets in storage at one of our warehouses.
Furthermore, it is worth remembering that whisky is undrinkable when it is distilled (made), and must be matured in oak barrels for a regulated minimum of three years, although the average period of maturation is nine years. During maturation the whisky continually improves, becoming of increasing value to its owners. Therefore, time is the friend of the whisky investor, and the maturation period for whisky should ensure that the downside risk for investors is limited.
The Knight Frank rare whisky 100 index (KFRW100), which tracks actual UK auction prices, increased by almost 40% in 2018. In 2019, prices have continued to appreciate for the right bottles from the right distilleries. At ‘The Ultimate Whisky Collection’ at Sotheby’s in October 2019 (where London Barrelhouse were active participants) we saw a bottle of 60-year-old 1926 Macallan sell for a record-breaking £1.5 million.
Whisky continues to go from strength to strength around the world. There is a growing global market for premium spirits, of which whisky is well-placed to take advantage thanks to its authenticity, provenance and quality. In 2018, the export value of scotch whisky grew 7.8% by value, to a record £4.70bn.
Thanks to rules that insist all casks of scotch whisky must be held in a government bonded warehouse, each cask is tracked the moment it is distilled and sealed in the cask. This means every bottle produced from the cask can be authenticated as true whisky of the highest standard and you can invest with complete confidence you are buying the real thing.