Food + drink

Funding Your Whisky with Whisky

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Not many funds can claim to be fun. But if whisky and investments are your kinds of thing, then The B28 Whisky Fund is something that may pique your interest.

Mike Soldner, the founder of The Whisky Fund, seems to think that you should enjoy yourself, get a little education and make some money at the same time. A big fan of scotch whisky and rum himself, Soldner is the founder of the B28 bar (he has sold his interest in the B28 bar in Singapore) and is one of the pioneers of the local whisky scene.

He describes The B28 Whisky Fund as a mutual fund setup, as opposed to a pure investment vehicle. During their initial phase, he started off with 20 lots at S$25,000, where investors can combine as many lots as they wanted. Essentially, he says, everyone becomes an owner of the company, and with attractive benefits. In addition to getting coupon payments, they can buy whiskies from the fund at better prices, which is a lot like being part of a private club with access to hard-to-get whisky — which we imagine, is part of the attraction to begin with.

“Being a whisky aficionado is definitely helpful. It’s not just a straight up kind [of fund] where you put down S$25,000, make seven percent a year. It’s also the access to the whiskies, and just other things that won’t be sort of floating around in retail,” said Soldner. He adds that the coupon payment works like a bond, which pays out in cash or inventory. It rises to eight per cent for a S$50,000 investment, and a full ten per cent for S$100,000. In the event of a bumper year where the investment grade whiskies perform well, investors will get their special dividend.

At least on the surface, the downside seems somewhat palatable, assuming that it’s a small investment for you to begin with. “The entire time, the money is in whisky,” explains Soldner. “So the worst case scenario is that everyone gets to have whisky. If everything goes wrong, it’s not sitting in a kind of a strictly mathematical or financial vehicle. It’s actually a physical product that’s held in bond and owned by us. So that’s sort of our, doomsday scenario, but it’s still not that bad when you think about it,” he said.

 

How it works

Soldner explains that The B28 Whisky Fund is effectively a three-tier system, each with a category of products for sale or investment. The first consists of products that they “can move quite easily.” As of now, it is made up mostly of relatively affordable offerings from Hunter Laing, specifically the Old Malt Cask (OMC) range. The purpose of this first tier, Soldner explains, is to “pay the bills” as well as the coupons to their investors.

HunterLaing

The second tier covers purchases of entire casks that are exclusive. Soldner buys good and highly sought-after casks straight from the distillery — for example, a cask of Lagavulin, which in itself is notoriously difficult to get and is very desirable.

The third tier comprises of unique official releases that Soldner describes as a “buy and hold thing.” Once he feels that the time is right, they will sell, and this is how investors will get their special dividend.

The scarcity premium when coupled with true aficionados who are willing to pay or invest gives Soldner the confidence that the market will stay bullish since the quantity of these whiskies is finite. “I think that’s a tremendous vehicle for indulging your passion and making a bit of money, and you know, being able to buy and possess a resource that has to increase in value because it decreases in quantity,” said Soldner.

It sounds elementary; rare, desirable bottles can be purchased if you have sufficient capital, but being able to acquire them at a price where you can turn a reasonable or healthy profit now or in the future is a different story. But Soldner’s experience and contacts are necessary to make it happen.

 

Whiskies and Rum

OMC

Whisky drinkers, in general, will have an interest because they distribute the Hunter Laing range of whisky and rum here. For those unfamiliar, Hunter Laing is run by Stewart Laing, one-half of the brothers Laing, both of whom used to helm the famous Douglas Laing & Co together. Hunter Laing offers the Old Malt Cask (OMC) and Old & Rare, which are some of the most recognisable series of independent bottlings of single cask whisky in the market. The OMC offers the same bang for the buck quality they are known for. The luxurious Old & Rare signifies the best whisky in their range, complete with a wooden presentation box. Also, they will also be distributing a new series of single cask rum called Kill Devil.

As a bar owner, Soldner understands more than most about what people more or less are receptive to. As such, the Hunter Laing range has a wide variety of styles, and the first batch of OMCs featured one whisky from each major region (Islay, Speyside, Highlands, etc.), and three Islay distilleries for the Old & Rare, each with a distinctly different personality.

Soldner himself is a fan of rum, which also explains a little why he brought in Kill Devil as well. Rum accounts for less than 20 per cent of The B28 Whisky Fund portfolio, but Soldner is hoping that people will be interested in trying out the single cask rum, which has the added benefit of a relatively attractive price. His initial selection consisted of five bottles from different distilleries to showcase a distinctive style.

Investment structure aside, The B28 Whisky Fund looks like a sensible model built on a tangible product range that isn’t particularly high risk, so it warrants some study. For those of us who aren’t interested in the investment parts, Soldner’s new enterprise will bring another steady stream of well-curated whisky and rum for the community.

 

*Readers of activeage.co are advised that this material is provided for informational purposes only. It does not constitute a recommendation or an offer to provide any financial product or service. The views and opinions expressed are those of the interviewee only and we have assumed without independent verification the accuracy and completeness of such information, and neither agree nor disagree with the content herein.

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