Whiskey as an Alternative Investment?

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Dec 6, 2018 5:52 am

Dear Fellow Advisors. I'm looking for a little direction and feedback. I'm not looking to sell anything or promote my business in any way, so please just some helpful feedback would be great. I'll explain what it's all about and then what I'm looking help with should make sense.

After spending 15 years in the financial world I've crossed over to something I'm passionate about - Whiskey. Given my background in investments, I've structured on an opportunity for private investors to purchase casks of newly made Irish Whiskey Wholesale from the largest distillery in Ireland, store it in their secure government bonded warehouse, have it fully insured against fire, theft, and damage and also create an exit strategy for them to sell the whiskey at a premium once mature to some well known Irish whiskey brands.

The long as short of how I was able to do this is after 2008, a lot of distilleries don't want to take on debt to pay for their running costs until the whiskey matures and can be sold to whiskey brands (might surprise some of you, but not all whiskey brands you see on the shelves have their own distillery, Johnny Walker in Scotland, for example, is a very large example of this. They don't own a single distillery, they buy from commercial distilleries and blend themselves). The other issue in this dilemma is whiskey brands also dont want to tie up capital and buy the whiskey newly made if they don't have to. They prefer to buy it already mature, put into bottle and sell it right away to keep their capital moving. This has created an interesting opportunity for private investors to hold the whiskey until it matures (3 years, 5 years 15 years, or however long they like. The longer the better as whiskey goes up in value based on age, not market fluctuations). So I felt this was a great hedge against the markets and a far better safe harbor than cash or bonds.

So the help I'm looking for, is that Irish Whiskey is obviously not a financially regulated product yet. However it is heavily regulated by The Irish Government to ensure they get their excise tax on every drop so its very secure while in bonded storage. And as an investment, it never leaves the bonded facility. The investor simply sells its ownership to the whiskey brand at maturity. Is this the type of product a US-based financial advisor can sell? I'm guessing some FA's can sell alternative investments such as this and some can't. If I was to create a campaign to reach out to FA's, Family offices ect to educate them on this to offer to clients, what area should I direct my efforts to? Any help with this would be greatly appreciated.