Catton Casks recognises the uniquely lucrative investment potential posed by buying and maturing casks of aged Scotch whisky
Whisky is not just for drinking, it can be treated much like any commodity, such as a tax-efficient investment opportunity managed by specialist brokers Catton Casks. Through its extensive network within the industry, Catton Casks is able to procure Scotch Single Malt whisky casks directly from either distilleries at wholesale prices or well-established market suppliers. These casks range from new-make spirit to blue chip, fine and rare casks.
Catton Casks has strong relationships with Scotland’s most recognised bonded warehouses, which specialise in the maturation of single malt, and this is where the company’s private investors’ stock is stored. The warehouses offer multiple services to help with the maturation, and this provides comfort for Catton Cask clients, knowing that the spirit is being monitored by professionals and getting better with age.
“Ultimately, the purpose of whisky is to be consumed,” explains co-founder Alexander Brown. “Our vision is to align private investors directly to the end consumer. There are many benefits of doing it this way: firstly we can allow clients to have access to cask investment, and secondly we can supply the demand to the end consumer by bottling the cask and selling the bottles under our own brand.’’
Alexander formed the company with friends Charles Cregeen and Aaron Jaques. The three worked in financial markets and commodities and all shared a passion for whisky. Through their knowledge, they established close relationships with key distilleries, allowing Catton Casks to purchase casks at provenance, or wholesale, prices.
“We can bridge the gap between the client and the distillery,” says Alexander. “It is important to be as close to source as possible. Investors want to get in at the bottom to avoid all the people in the middle taking their cut.’’
After sitting down with a client to discuss their investment strategy – the amount they wish to invest, their goals and the length of their investment – Catton Casks creates a portfolio. If clients are looking for a short-term strategy, they can buy a cask that has already matured for 10 years or so; if they are seeking a long-term investment, they can buy a new-make spirit and wait for it to mature.
Alexander highlights the benefits of whisky as an investment strategy: it is low risk and tax efficient, incurring neither VAT nor duty on the basis the casks are sold in bond. Moreover, Catton Casks will deal with insurance for the entirety of the investment, and storage for the first five years, taking a commission only on the net profit once a sale has been executed.
Catton Casks offers several exit strategies. Casks can be sold at auction, sold to other investors, or offered to independent bottlers and other businesses. Uniquely, Catton Casks has a buy-back option, meaning it will buy the casks back from clients at market rates. This is possible because the founders have also formed an independent bottling arm of their business, allowing them to bottle exceptional whisky under their own label – a demonstration of the passion for whisky that separates Catton Casks from its competitors.
“It’s the only investment in the world with a full life cycle,” says Charles. “It’s produced, it matures, it’s bottled, released and then consumed. Once a cask is bottled, it is out of circulation, which therefore diminishes supply and pushes demand. That’s why it is so unique.’’