Enjoying the UKV blog?
WATCH VIDEOS

Investors put their questions to experienced cask broker

Oct 23, 2021 8:50:36 PM / by Charles Agutter

Earlier this month, we published an article, highlighting guidance for prospective cask investors, published by the Scottish Whisky Association. We received a lot of positive engagements and praise from our followers, for helping bring more transparency to the cask investment market. In this follow-up article, prospective clients put their questions to Zach Sekha, one of UKV International's top whisky brokers... 

 

I hear a great deal of specialist knowledge is required to choose the ‘right’ casks for investing. How will I know the whisky I'm investing in is any good?

John, Aberdeen

In many respects, cask whisky is no different to any other commodity, where values can rise and fall in line with supply and demand. However, where whisky does differ from other commodities, is in the selection of casks that are most likely to deliver returns that outperform the market.

This is where whisky brokers come in. Choosing the right broker is the key to unlocking maximum returns, whilst minimising your exposure to the risks of the market.

UKV International has been helping investors like yourself for over a decade. All of our brokers have at least five years industry experience, and a track record of success to go with it. Your dedicated broker will guide you through the selection process, so you can be confident in the cask(s) you’re investing in.

In addition, your investment is intrinsically linked to our brokers’ performance and compensation structure. Your broker will receive 10% of the profit when they realise your investment; therefore, the more capital they make you, the more they make themselves.

 

A lot of companies like yours have popped up over the past several years, offering different investment methods: everything from cask-share schemes to specialist whisky investment funds... and even crypto currency tied to maturing whisky stock – all promising good returns. What kind of investment are UKV offering and what are the risks?

Michael, Uxbridge

The reason so many companies and schemes have popped up is because of the success of the market. However, you are right to be cautious. Not all brokers are equal. And neither are the investments they’re promoting.

Cask share schemes, for example, can be lucrative. They may also seem like a sensible way to reduce your risk / exposure. This however, is an illusion. The drawback of such schemes is that, if anything happens to the investment company, or the cask you’ve invested in, major complications can arise.

Investing in the full asset (i.e the whole cask) puts the investor in control of their investment, and removes the complications associated with more complex schemes. And at UKV, this is exactly the type of investment we offer.

As far as the risks are concerned, we categorically do not guarantee a return on your investment. Like all investments, cask whisky comes with its own risks. If we consider average market returns over the past decade, investors have typically seen returns in the range of 5-10% per annum. However, due to the success and expertise of our brokers, UKV clients typically enjoy even better returns, usually in the range of 10-15% per annum.

 

Cask whisky investment is not regulated by the Financial Conduct Authority. Does this mean my investment is unprotected from fraud and other illicit practices?

Andrew, Chester

Cask investments are not regulated or protected by the FCA, but there are many investments that aren’t, property being just one example. The FCA only regulates financial instruments such as CFD’s, Bonds, Equities etc.

However, your investment is in safe hands with UKV. Your capital is protected by an FCA registered solicitor until you receive your asset held under the HMRC provision and your certificates notarised by all the parties involved.

The term for this level of protection is commonly called ‘escrow’ and is the same protocol used when purchasing a property. UKV pays for the services of this solicitors, in order to protect ourselves as well as our investors.

 

I read online that one of the most common issues is overvaluation, with casks often being sold to investors at 2-4 times their market value. How do I know I am paying a fair market price for my cask?

Daniel, Beaconsfield

It’s a valid concern and there have undoubtedly been instances of rogue firms taking advantage of naive investors, who don’t understand the market.

However, our structure and operating model ensures this cannot happen. In fact, it would make no sense for us to sell casks above their current market value. As highlighted in our response to Andrew’s question, the performance of our clients’ investments (over time) is intrinsically linked to our brokers’ performance and compensation structure.

As one of the market leaders, with significant capital at our disposal and long-standing relationships in the trade, we are able leverage our scale to acquire whiskies early and at great value, which is how we are able to achieve such lucrative returns for our investors.

Topics: Whisky Investing, whisky investment, Scotch Whisky

Charles Agutter

Written by Charles Agutter

UKV International

Whisky Investing Video

Request Whisky Investment Brochure

Recent Articles

Wine Investment Guides

intro
performance
taxation

Sign Up to UKV Wine Investment News!

WINE & WHISKY INVESTING VIDEOS

UKV International have produced a range of exclusive video content to support your wine and whisky investment journey and our exclusive  investment events which we host on a regular basis throughout the year.

 

UKV Investors Q & A's

Feedback and opinions from fine wine investors and their buying and selling experience with UKV International and the wine investment services offered. 

 

Investing in Casked Whisky

Over the last decade; investing in whisky has become increasingly popular, but why is there such a deluge of shrewd investors taking advantage of the market?

 

Vintage and Fine Wine Investment Explained

An insight into vintage and fine wine investing -  the leading alternative asset class, governed by a unique set of market fundamentals and possibly the investment of the last decade!

FEATURED ARTICLES

.

Take Advantage of the Fine Wine Boom in 2020!

wine-investment-graph

So, What Will The Wine Market Look Like in 2020?

According to the history books, fine wine is one of the most best performing assets of the last decade. However that doesn’t mean that the market never changes. Consumption and demand varies from country to country and emerging trends can often drive up the price of certain wines.

READ MORE

Fine Wine Investment: 4 Fundamental Rules to Success

4-rules

 There are only four fundamental ways to invest successfully in wine.

Investor behavior is determined not just by rational risk-return considerations, but also by hidden psychological biases that influence individuals to make less than optimal decisions.

FIND OUT MORE

Why do individual investors often ignore lucrative opportunities?

romanee

This behavior poses a conundrum, or seems irrational – and that’s because it is.

Alternative Investments pose an interesting paradox:  with the consistent growth and often tax-free capital gains these assets consistently deliver, why aren’t more  individual investors participating in the market to reap outsized rewards with relatively low risk?

READ MORE

.

Get the Latest Wine
Investment News & Insights to
your inbox every month!

Start your Wine Investment journey today.

UKV INTERNATIONAL AG can help select and acquire some of the best investment fine wines and champagne through our very extensive independent network of wine industry contacts.

We’re here to help potential and experienced investors who look to acquire the most prestigious vintage fine wine labels from the leading vineyards of France, Italy and Spain.

 (+41) 43 5084066

Follow Us:

GET STARTED
READ REVIEWS