Cask whisky offers investors a very specific benefit, which is that whisky when aged in a barrel is continuously improving in quality. Whisky, unlike wine, does not age in a bottle, so the period of maturation where the whisky improves and develops the most takes place within a cask. This means that the spirit is not only getting older and scarcer but it is also getting vastly better in quality.
Whilst maturing, the whisky is also affected by a small amount of evaporation known as the angel share. During the maturing process, approximately 2% of the volume of the cask evaporates which means there is less available which again, triggers an increase in value.
Demand for cask whisky also comes from an investment perspective, where investors have seen the market's resilience and benefits over a number of years. Across the board, safe haven assets become increasingly popular in times of economic turmoil and this includes cask whisky. This has led to an increased amount of individuals seeking out cask whisky with the aim of profiting from its maturation. This will often result in the value of these assets increasing.
Cask whisky, by nature, is a market that is driven by the laws of supply and demand. Because of the fact that a large portion of this demand comes from the consumption of the asset it means that the market experiences a very low level of correlation to traditional investments such as the stock market. This enables investors in cask whisky to maintain a level of stability within their portfolios that many other areas of investment do not offer.
Permanent depreciation of supply for whisky casks comes predominantly from two areas, bottling and consumption. During the holding period of a whisky cask, the spirit is continuously ageing, meaning that as time goes on and casks get bottled, ultimately halting the ageing process, the amount of that whisky that exists decreases permanently. This coupled with the fact that the bottles of whisky are being consumed, means that it created irreplaceable gaps in the market. Once whisky from a particular year or cask is consumed, it cannot be recreated leaving the supply of that specific whisky permanently lessened typically leading to an increase in the value of the remaining product.
As with any investment market, there are risks that any investor should carefully consider. It is important to note that the cask whisky market is not regulated, and we at Liquid Opulence are not financial advisors. However, we do have decades of experience within the market and are experts in our field. As a company, we do not offer any financial guarantees about the performance of your investment. For any general financial advice, we urge you to contact a financial advisor or consultant. Understanding and mitigating the risks can help investors to make informed decisions and maximise the potential of their whisky portfolio.
Investing in cask whisky starts with determining your goals. It is important to consider factors such as; your entry-level, risk appetite, and length of hold. To help you navigate this process, we encourage you to speak with our team of experts. This discussion can take place either via the telephone, video call or face-to-face and the aim is to enable your broker to get an insight into your goals, motivations and capabilities so as to assist you in the best possible way and get a clear understanding of what you are looking to achieve with this investment.
Throughout the process, our education team will be on hand to ensure that we continuously meet your market knowledge and understanding requirements.
After the discussion, a proposal containing a portfolio and strategy in line with your investment goals will be offered to you. A presentation on the objectives of the strategy and a Q&A session will take place at this stage.
Once you’re happy and ready to proceed, the asset will be secured via a holding deposit. This allows our brokers to reserve the whisky under your name, freeze the current trading price and guarantee the availability of your stock. This holding period gives you time to complete the onboarding process without the risk of losing the asset.
Trade documents will be issued immediately after placing the deposit and can be sent to you via post or digitally depending on preference.
Upon completion of the trade documents, you are able to fully settle the trade and complete the acquisition process.
Throughout your lifetime as a client of Liquid Opulence, you will receive continual updates and education on the market, from either your market representative or a member of our education team. As an owner of cask whisky, you will also have access to a client portal, which allows you to view your assets. Samples and regauges of your whisky are also available upon request.