The world's first private equity whisky fund - Platinum Whisky Investment Fund - has begun capital raising in Hong Kong, offering investors an opportunity to capitalize on the global growth in demand for single malt Scotch whisky.
The fund is being launched with a target commitment of US$10 million and a minimum subscription of US$250,000. It is being administered by Sinopac Solutions & Services. It expects to launch in June this year.
"The fund is a closed-ended, structured private equity investment vehicle that provides unique access to an increasingly rare product," said Rickesh Kishnani, the fund's chief executive officer. "We bring our inside knowledge of the whisky industry to bear in the sourcing of rare product from a proprietary network at under-market prices and this also allows us to trade stock at premium values," he added.
Annual sales of single malt Scotch whisky increased by 190% from US$390 million to US$1.1 billion in the past 10 years, according to the Scotch Whisky Association, driven by the relative scarcity of the premium, vintage product.
Investment Grade Scotch (IGS) indices produced by Whisky Highland UK show that in the last three years sales of the top 1,000 single malts were up 130%, the top 250 single malts up 200% and the top 100 single malts up 230%.
Working with Kishnani is its chief investment officer, David Robertson, who has 20 years' experience in the industry and is a former master distiller at The Macallan and former Rare Whisky Director at The Dalmore.
"Production of aged whisky takes time and current demand is outstripping supply, especially in Asia. The Platinum Whisky Investment Fund will acquire large parcels of premium whiskies at below market prices to take a strong niche position in the market," Robertson said. "Rickesh has strong relationships with distributors and I bring long-standing relationships with renowned distilleries, private collectors and suppliers. Together, this gives us a compelling offer for disposal direct to auction houses and privately to whisky buyers, including affluent connoisseurs, investors and collectors," he added.
Premium whisky is a collectible asset with value appreciation primarily due to its rarity. It is part of a growing trend towards collectibles as an alternative investment class. Collectible investments have performed well versus most traditional asset classes in the five-year period 2008-2013. Purely as an investment, premium whisky has significantly outperformed other collectibles including art, rare stamps, rare coins and fine wine.
Whisky is non-perishable and does not age in the bottle, therefore its price remains relatively stable and it is easier to store than wine. Single malt whisky is produced only at one distillery, is made exclusively from malted barley and is aged a minimum of three years in oak casks.
Scotch whisky can only be made in Scotland.
