Whiskey as an Alternative Investment?
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.
We manage as sole financial advisers for 36,000+ self directed retirement asset accounts (SDIRAs) based out of the United States with assets under our tax advisory valuing more than US $ 2.25 Billion. Most of this tax deferred / tax saving asset money has been into certified Gold and Short Term Notes all this time. However, we are now trying to diversify this portfolio for our customers and I am deeply interested in exploring Whisky as an alternate investment product for wealth building.
While rare collection purchases turn prohibitive investment in a US Self Directed Retirement Asset, investing into the casks would be a very invaluable proposition for these account holders, especially as the average age of these account holders is between 33 and 38. Fractional ownership of each cask distributed among our wealth management clients extend a value generating investment asset opportunity, tax deferred and capital gains exempt…
Plus we understand the pain and effort one undertakes in negotiating the wholesale pricing, arrangement of tours and helping investors own this highly qualitative scotch. 99% of these account holders are of Indian Descent and they love Single Malt Scotch all the time.
On the size and scope, these Retirement asset holders will not only be able to invest part of their existing asset but also a portion of the year on year contributions they make into the account to have tax deferral / savings.
I will therefore be deeply obliged if you could guide us how we will be able to take this forward.
(a) we plan using the IRA money to directly source the product with ownership passing to the Retirement Asset account directly - we share a portion of the discounts bargained by you for us on the volume
(b) we plan floating a specific purpose entity and tokenize each cask into asset tokens (1 liter Instrument) for raising money from accreditor investors and the SPV will invest and own the casks.
The size of investment would be progressive as customers deposit into the accounts on a monthly basis.
Thanking you for your time, I request your kind response so we can build a formidable progress into this effort.
Chief Business Architect
Interups Inc [OTCQB: ITUP]
90 State Street, Office 700 - Suite 40
Albany NY 12207
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