Online capital formation or investment crowdfunding has created a new paradigm for all investors seeking access to private securities as well as novel assets that were previously challenging to purchase. Today, it is common for platforms to allow individuals to invest in early-stage private firms, collectibles, real estate, art, horses, cars, and more. A young platform has now created a first (as far as we know) the ability to invest in barrels of bourbon and casks of single malt scotch. CaskX, a Los Angeles-based operation, allows individuals to create an investment portfolio made up of whiskey barrels.
To quote the company’s website:
“CaskX was founded at the crossroads of passion and finance. While our team has always loved whiskey, it wasn’t until 2010 that we were first introduced to one of the most profound discoveries of our lives: individuals could purchase and own entire casks of whiskey … we discovered that whiskey casks had been sold to private individuals for centuries in order to provide the cashflow that distilleries needed to survive. The only problem was that up until this point cask investment was limited to insiders, large dealers and institutional buyers. There were only a select few with access to this lucrative industry.”
CaskX promotes the historical increase in the value of the barrels of whiskey. The company shares that since 2010, bourbon casks have appreciated 13.5% per year on average. Single-barrel Scotch performs about the same, with a yearly average return of over 12%.
As we all know, whiskey improves with age, with the top brands aged 20 years or more.
For investors, the barrels must be stored in a licensed facility during the term of the investment. CaskX says that they are ready to help investors resell, bottle, and distribute the whiskey when it has come of age.
While all investments entail risk, you may find this investment platform of interest if you are a whiskey or bourbon enthusiast. CaskX only accepts accredited investors, and much of the platform requires the creation of an account to view current offerings. But as the world of alternative assets expands, and technology has evolved to facilitate digital trading, investment opportunities like bourbon start to make sense.
