Cask100 is being officially launched this month and the fine wine and whisky investment fund will be regulated by the Bermuda Monetary Authority, its founders said.
The $20m, closed-end fund is set to encompass a diverse portfolio of investment-grade wines and whiskies, said the firms, which together launched a similar fund for the art market in 2022.
Brian Ward, director of fine wine and whisky at Winston Art Group, told Decanter he expected a high proportion of the fund’s early investors to come from the US, where investing in wine and spirits as an asset class was still a relatively new concept.
He will lead a valuation committee that is to work with independent experts to oversee appraisals and purchases of wines and whiskies. For spirits, the fund will include some casks alongside rare bottles.
Artory will use blockchain technology to securely store due diligence data on the assets, and make this accessible to investors, the firms said.
Only open to verified, accredited investors, Cask100 required a minimum investment amount of $10,000 in the first funding round, and this was set to rise to $50,000 in the future.
The Cask100 logo. Credit: Winston Art Group / Artory.
Ward, who previously worked for Benchmark Wine Group before joining Winston Art Group in 2015, said wines will be purchased from a variety of trade sources, including recognised merchants and auction houses, plus producers. He said sourcing would rarely include buying from private collectors, ‘unless the provenance is perfect’.
Wines will be stored with Uovo in the US, formerly Domaine, and with London City Bond in the UK, he added.
‘It’s a five-year fund, which means it’s a closed fund, so once an investor puts in their [$10,000 minimum], then that money is relatively locked up for five years until we liquidate. We will offer annual distributions, probably starting in year two, as we see opportunities to sell.’
A sedate fine wine market in 2023
Due to the subdued nature of the fine wine market at present, initial purchases would focus on ‘the more tried and true’ investment-grade names from key regions, such as Champagne, Tuscany and Burgundy, Ward said.
He said the team may also explore relative value opportunities in second and third growth Bordeaux. In whisky, the fund is set to include rare Scotch and Japanese whiskies, but the team also sees bourbon as a potential growth area.
Charles Curtis MW, a fine wine consultant who is also Decanter’s Burgundy correspondent, is a member of the fund’s board. He said, ‘I think the Cask100 investment fund offers a very interesting opportunity for investors looking for exposure to this asset class without excessive risk, because it will offer a diverse portfolio of wines, spirits in bottle, and spirits in cask that should participate in the growth of the category without being too concentrated in any specific position.’
However, there is of course never a guarantee of returns. The Liv-ex 1000 index, one barometer of price performance published by Liv-ex, a global marketplace for the trade, fell in value by 9.5% in the first eight months of 2023, although it was still up by almost 24% over five years.
Elizabeth von Habsburg, founder and managing director of Winston Art Group, said in a press release about Cask100, ‘We believe that the wine and whisky markets are well-positioned for long-term growth, with historically strong results, and we’re confident that our investment strategy will deliver attractive returns to our investors.’
Ward said, ‘I think wine and whisky have really become an asset for investment and I don’t think that’s going to change.’
Investors will also have opportunities to purchase wines and spirits for their personal cellars, as well as visit producers and attend tastings, he said. Buying options might include blue-chip wines, such as First Growths, but not exclusively. ‘We’ll also offer a tonne of fun drinking wines, so it doesn’t have to be investment,’ he said.
Always seek independent, professional advice before making investment decisions.