Q&A
Scott Sciberras Co-founder and CEO WHISKEY & WEALTH CLUB
Years in the industry 21 Fast fact The Whiskey & Wealth Club gives investors access to the wholesale cask whiskey market in Ireland and Scotland
The advantages of investing in whiskey How does cask whiskey investment work? In Scotland and Ireland, new-make spirit must be allowed to mature for a minimum of three years before it can be called whiskey. The maturation period can be anywhere from three to 20 or more years. The return on investment is determined by the quality of the whiskey and how long an investor chooses to age their casks. The whiskey-making process is both capital- and labour-intensive. The minimum three-year maturation period means distilleries can only begin to capitalize on their casks after this time. Therefore, to cover costs and raise capital, distilleries allow private investors to purchase new-make spirit through a wholesaler like us. We purchase casks of premium new-make – single-malt or pot-still – spirit at discounted wholesale rates. Once matured, the investor can then decide to go down the bottling route or sell for profits ranging from 10% to 30%-plus per annum, depending on the chosen exit strategy and the market, Irish or Scotch.
How common is this type of investment? Are there many opportunities? The Irish whiskey market is an upcoming market that has bounced back to where it once was. The market is projected to continue its strong growth for the next 20 to 30 years. As demand for whiskey grows and more brands enter the market, they will require mature stock to bottle their own whiskey. This is where the investors come in. They can sell their mature casks to new brands to meet the global surge in popularity of Irish whiskey. The Scotch whisky market is more established,
Three firms strike private markets partnership
Mackenzie Investments (a subsidiary of IGM Financial), Great-West Lifeco and Northleaf Capital Partners have formed a strategic relationship to expand private market offerings across the IGM and Great-West channels. Mackenzie and GreatWest will jointly acquire a non-controlling interest in Northleaf, a global private equity, private credit and infrastructure fund manager with $17 billion in AUM. The deal will enhance Mackenzie’s ability to offer private market solutions through retail advisors and financial institutions.
with a greater variety of distilleries and brands already sourcing whisky. This provides a strong secondary market for investors. The key for an investor is to focus on the quality of the whiskey, the entry price, the rarity and the brand behind it. This will ensure a good exit strategy and great ROI after five, 10, 15 or even 20 years.
Are there any specific risks investors need to be aware of? One thing all investors must bear in mind is that not all whiskey is the same. Cheaper whiskies, known as blends, only contain 10% to 20% of malt or pot-still whiskey. At the Whiskey & Wealth Club, we sell 100% premium single-malt or single pot-still, which is very different to the cheaper blended alternatives. It is important to invest in quality casks of whiskey. Whiskey is deemed high-quality if it comes from a brand that is not mass-produced.
How can investors get involved? You do not need to be part of a club to invest in cask whiskey. Our goal when we founded the Whiskey & Wealth Club was to open the cask whiskey market to private investors who were not already in that exclusive industry. We pair new investors with one of our wealth advisors, who guide them through the whole process. Outside of lockdown, clients can attend distillery tours to see where their casks are produced and stored. They also get an opportunity to taste the whiskey while on site – a big part of the experience for whiskey lovers.
Pollitt introduces flow-through mining LP
Pollitt Investment Counsel has launched the Plutus Super Flow-Through Limited Partnership to high-net-worth investors. The LP aims to invest in flowthrough shares of resource companies with involvement in mineral exploration in Canada while maximizing tax benefits for investors. Managed by Pollitt Investment Counsel president and portfolio manager Yvan Grégoire, the LP will be run using a fundamental and quantitative approach to stock selection. The minimum initial subscription size is 50 units ($5,000).
AGF reaffirms commitment to alternative space
AGF has bolstered its presence in alternatives by expanding an existing partnership and establishing a new advisory committee. The firm has entered into a definitive option agreement with alternative capital provider SAF Group, which will help AGF bring new investment products to market while also paving a path toward a joint private credit firm in the future. In addition, AGF created the AGF Alternatives Advisory Committee to “provide strategic insight and advice to the executive management team.”
www.wealthprofessional.ca
12-13_Update ALT-SUBBED.indd 13
13
16/10/2020 5:02:00 AM