The world’s first private equity whisky fund has raised $12 million – here’s what their investment strategy is like

Rickesh Kishnani
Whisky Investment Fund

There’s a saying that you should put your money where your mouth is – and that is precisely what a group of whisky lovers did.

A first of its kind, the Whisky Investment Fund closed at the end of June this year, with a total of $12 million in commitments – $2 million more than the target set at its 2014 launch.

Out of the total amount raised, $9 million has so far been deployed into 14,000 bottles, making the fund one of the largest investment collections of single malt whisky in the world.

Over the next four years, the fund’s prized bottles will be sold through an exclusive distribution partnership with the Quintessentially group.

Co-founders of the fund Rickesh Kishnani and David Robertson first discussed starting the fund in 2013, after observing a growing demand for single malt whisky across the UK, US, and Asia.

The logic for starting the fund is really quite simple, Kishnani tells Business Insider over e-mail.

“Back in the 1980s and early 1990s, the distilleries simply didn’t put enough whisky into casks for long term aging to meet the demand we have in the world today,” he says. This has resulted in a steady increase of prices for rare single malt whiskies in the past five years.

As a result, the duo decided they would invest in old single malt collections so they could sell them back into the market at a profit as supply continues to decrease and demand rises.

It helps that Robertson, who was previously a master distiller at The Macallan and the former rare whisky director of The Dalmor, had the right contacts to access rare bottles of whisky.

On his end, Kishnani, who is Managing Director APAC for Wine & Spirits at Quintessentially, banked on his own wine distribution experience to identify and reach potential investors across Asia.

Hong Kong-based Kishnani says that 50% of the fund’s investors were from Hong Kong and around 10% were based in Singapore, which is the leading importer of single malt whiskey in Southeast Asia.

“According to the Scotch Whisky Assoication, GBP 225 million of Scotch was imported to Singapore in 2016 making it the third largest importer in the world (behind the US and France and just ahead of Taiwan),” he tells us.

Single malt whisky has “several unique attributes compared to other alcohol categories that we felt made a strong case for an investment opportunity”, Kishnani says.

These include:

  • Distillers have no way to produce new supply of old whisky in the short term because aged single malt whisky takes decades to produce
  • Whisky has no shelf life and never goes bad.
  • Storage and transportation of whisky is generally easy, and does not require temperature or humidity control.
  • Whisky, no matter the type, has seen an increase in demand across the globe in recent years.

Among the oldest in the fund’s collection are a bottle of Highland Park and a bottle Laphrioag, both distilled in 1902, and bottled by famed spirits merchant Berry Bros at the turn of the century.

The highest age bottle in the collection is a Glendiffich, which is one of 64 bottles distilled in 1937 and bottled in 2001 as a 64-year-old whisky.

And the rarest bottle in the fund is a Macallan Adami, a 60-year-old whisky which was distilled in 1926 and bottled in 2002 in a bottle specially designed by Italian painter Valerio Adami. Only 12 such bottles were created, and the fund is in possession of bottle number 8 – an auspicious number in Chinese culture.

If you’re inspired to start your own whisky collection, take note that choosing the right bottles isn’t an easy task.

Kishani says a good bottle worth investing in should be limited in supply; rare (generally older age statements 18 years and above); high in demand with a strong history of price appreciation; and has a good, trusted source.

With the demand for whisky growing, Robertson has further plans to set up his own distillery. When it launches in 2018, the Holyrood Distillery will be the first distillery to operate in the heart of Edinburgh since 1925. It will produce a range of spirits including gin, vodka, rum, and you guessed it – single malt whisky.