WHAT’S THE STORY?
Fed up with low interest rates from high street banks but sick of keeping your cash under your mattress?
The founders of the world’s first regulated single malt whisky fund say they can turn liquid gold into cold, hard cash.
WHAT, PHILOSOPHER’S STONE-STYLE?
Not exactly. The ancient myth saw alchemists turn base metal into precious materials, this scheme sees investors buy into a collection rare and limited-edition varieties then take a share of profits from their sale.
Members will also get the chance to buy up the hard-to-come-by bottles as the fund “realises it investments”.
WHERE IS IT BASED – EDINBURGH? ABERDEEN?
Stockholm. The fund is the brainchild of Swedish “whisky enthusiast” Christian Svantesson and has permission to launch on the Nordic Growth Market (NGM) exchange.
It will be supervised by the Swedish Financial Supervisory Authority and offers a target return rate of 10 per cent every year.
DIDN’T SEE THAT COMING...
Well, the Scotch whisky industry may be homegrown, but it has international reach.
Exports increased by four per cent in 2016, breaking the £1 billion barrier for the first time.
More than 1.2bn bottles made their way to 182 countries as the volume of exports went up by almost five per cent.
It is the biggest net contributor to the UK’s balance of trade goods and accounts for more than one fifth of all British food and drink exports.
The European Union is the industry’s largest overseas regional market, followed by North America and Asia.
On a country level, sales to America are worth £865 million, with demand growing in India and Colombia.
WILL THE FUND’S NUMBERS BE AS IMPRESSIVE?
That remains to be seen.
Malts will be chosen for the collection by five “internationally acclaimed” portfolio managers, with sales to the open market managed through its website.
Svantesson claims it is a reaction to increasing demand for rare examples of what is already a prestige product.
Demand for single malts in America shot up by 22 per cent in 2016, reaching £267m, and last week Dunfermline-based brokers Rare Whisky 101 revealed the domestic auction market for rarities had exceeded £25m in a single year for the first time.
The record figure for 2017 marks a 76 per cent increase on the £14.2m spent the year before.
WHEN WILL DEMAND DRY UP?
Unlike the “water of life”, that’s unclear, but the fund liquidates after six years.
Svantesson said: “With global demand for rare whisky continuing to soar, I hope that our fund will make the rare whisky market more inclusive and accessible for even more rare whisky enthusiasts.
“Knowing how much my own limited rare whiskies have appreciated in value, I spotted an opportunity to take a more professional approach to the whisky investor market.
“I couldn’t resist the temptation to combine my passion for whisky with my entrepreneurial drive. I wanted to create a commodity fund for whisky – regulated, transparent, and listed on a public exchange, preferably in Sweden.”
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