Scotch single malt whiskey is a luxury product you can't stop talking about. Everyone has encountered it at one time or another: over dinner, on a business trip or simply at home. But it is the same "water of life" that took a more than surprising turn about fifteen years ago: it became a Dutch investment property, "made in Sassenheim. Anno 2021, exclusive bottles and barrels of Scotch single malt may rival other, often more mainstream investments such as stocks or real estate. "Anyone who does not consider exclusive whiskies as an investment object is thinking too classically," says the company.
Text: Jacob-Jan Esmeijer
Online editing: Mical Joseph
Image: John van Helvert
Facts don't lie. And they are historical data that underscore the value development of Scotch single malt. But how is it that water, a distillation process, a barrel AND time add so much to the value of whisky? For an answer, we have to go back two decades. At the time, Michel Kappen, CEO of Scotch Whisky Investments, personally experienced that the prices of bottles of single malt whisky were skyrocketing. An extensive survey of five hundred different whiskies between 1936 and 2008 led to a bizarre discovery: Kappen concluded an annual increase in value of 6.6 percent. The principle is very simple, according to Kappen. "The longer a whisky matures, the more the value increases. On the one hand, the quality increases, because the taste develops when whisky is in barrel longer. And the older this whisky, the tastier ánd scarcer it becomes. We experience this particularly with 25- and 30-year-old whiskies whose prices are skyrocketing. A 30-year-old bottle costs a few hundred euros, those of 40 years and older easily cost thousands of euros per bottle. So time is money when it comes to the Scotch distillate. After all, a 40-year-old whiskey will have to age in barrel for 40 years before it can call itself 40 years old."
So investing in whisky could be a consideration for those who want to diversify their investable assets. Unlike investments in art, vintage cars and real estate, an investment in whiskey has no maintenance costs. In addition, bottles are also quicker to trade. Investing in whisky is possible at Scotch Whisky Investments from as little as a few thousand euros; anyone can create an account on the World Whisky Index free of charge and then buy and sell bottles independently on this trading platform. As a lock on the door: in 2014, Scotch Whisky Investments received a license from the Authority for the Financial Markets (AFM) that allows whisky to be offered as an investment asset. "I can imagine that this is a more than reassuring thought for potential investors considering single malt whisky as a serious option," concludes Kappen.
For those who do not want to have to worry about selling their whisky portfolio, the Wealth Management product is worth considering. Many of Michel Kappens clients have struggled with the prospect of eventually selling through the World Whisky Index and urged him to come up with an appropriate solution for this. With its Wealth Management product, Scotch Whisky Investments has responded. And that Asset Management is an outright success is evidenced by the more than two hundred clients who invest at least 100,000 euros per person in whisky. "These are not all 'new' clients, by the way. Half of this group once started with an amount of between 50,000 and 100,000 euros and have since 'switched', whereby the original portfolio can be brought in. Incidentally, investors do not have to put in 100,000 euros immediately to start with Wealth Management. With an amount of 50,000 euros you can get acquainted with it for a year. If you like it, you pay the second part. Should it not be what you imagine it to be, the deposit is returned with a 4.6 percent net fee. Transparency is almost non-existent."
Investing in whiskey is also possible in the superlative at Scotch Whisky Investments. For those who want to think (even) bigger within Asset Management, the Scotch Whisky Investors Club may be the next step. With an investment of €250,000 or more, you automatically become a member. The group where everyone invests between 250,000 and five million euros in whisky now consists of over one hundred and twenty investors. Membership includes Golden Opportunities, where members can supplement their portfolios with "whisky gems" - windfalls that Scotch Whisky Investments has managed to get its hands on. For example, one Golden Opportunity earlier this year involved a 58-year-old 1950 The Macallan with a market value of between 8,250 and 9,400 euros. "Our Investors Club members were able to purchase this limited edition for only 6,500 euros per bottle. We expect these Golden Opportunities to develop over a five-year period with a return of 15 percent per year. Not surprising in itself that of the 240 bottles available, none were available after three months."
'First-time investor' Henk van Dongen was introduced to Michel Kappen and Scotch Whisky Investments in 2004. Van Dongen and Kappen had many discussions over the years about the viability of "investing in whiskey. Van Dongen: "We came to the conclusion that buying up certain bottles from distilleries that had already closed would be a good start. Nothing more would ever be made from those. So the rarer, the better the price trend. And that turned out to be the case." Van Dongen believed in the concept and thus became the 46th investor in Sassenheim, a true early bird. For completeness: the counter has now passed the 25,000 portfolio mark. What once began for Van Dongen with a sum of 5,000 euros has now expanded through bottles sold and returns achieved - with a barrel of Clynelish topping the list. "On this barrel I made an extremely high return, a few hundred percent even," he says. Henk van Dongen currently has a whiskey portfolio consisting of bottles and a barrel. The way the value is developing now, Van Dongen dares to claim that this will allow him to retire two years earlier. "With that, it's a nice retirement income. And the value of my barrel is not yet optimal: in the coming years it could look even better. Switching to Wealth Management is the next phase where I make a five-year commitment. By then I will be sixty and I will have the choice of what to do with the barrel. With the money freed up then, I can consider either working less or quitting altogether."
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