Crowns 3’s Charles Seddon on Investment-Grade Whisky’s Lucrative Appeal
One sign that it might be time to start collecting whisky? Rare whisky outperformed investments in both wine and gold in 2015. We asked Crowns 3 Worldwide Luxury Group Director Charles Seddon about what collectors are buying to expand their whisky investment portfolios.
A pioneer of whisky investment in Asia, Crowns 3 is a hub for securing and trading whisky that was established to meet the region’s growing demand for rare single malt. The company assists private clients in building high-yield portfolios consisting of investment-grade whiskies, rare bottlings, and private cask offerings from distilleries.
Crowns 3 was originally set up to accommodate elite investors and collectors of fine wines from Bordeaux and Burgundy. In 2008 to 2009, the wine market began to plateau and the company started looking for an alternative product.
“The Chinese ramped up the prices of your first growths such as Château Lafite and it was all getting a bit too ridiculous,” says Seddon. “We looked at whisky as that particular alternative, and it certainly has worked. The difference is with single malt and wine is the production levels, and this market that we deal with is driven by supply and demand.”
Unlike commercial suppliers, from whom one can easily buy a bottle of a popular brand, Crowns 3 trades in limited editions and hard-to-find whisky bottles. “For the majority of our clients, we try to provide a very bespoke sort of service and I always say it: We are not Diageo. We don’t claim to be,” shares Seddon. “We wouldn’t be able to compete. Where we differ is our family business that provides a little service for our clientele where they can get that little dram that no one else can get.”
The company trades everything from special rare cask bottles from 18 years up to 26 to 27 years old to casks of The Dalmore, Bowmore, Highland Park, and Macallan priced from over $1000 to $125,000 or more, depending on the bottle. “The clientele might be the investor who has everything. A person who has that much money, he has all that he can dream of, but you know, that little bottle of 1945 or that little bottle of 1954, we might have it for him,” enthuses Seddon.
Crowns 3’s clients can even request to create their own unique dram of whisky. “A hotel can create their own brand of Macallan whisky to celebrate,” he explains. “For example, Genting Highlands. It was their 50th anniversary a couple of years ago and they were looking to purchase a cask of whisky that is 50 years old.”
There are also clients who make investments as a group. Some groups will visit a distillery in Scotland and buy an entire cask. “They will go into the market as group of friends. Some of the casks can be quite expensive so they split the cask,” shares Seddon. “The cask whisky will never be shipped over to Asia. It would stay in Scotland. It is a great way for the client to go over, visit his whisky, because every year that goes by the whisky becomes older.” If the client buys a 24-year-old whisky and keeps it in the barrel for six years in Scotland, it will become a 30-year-old whisky. “But there’s no level to say how long he will keep it in the barrel. It’s entirely up to him,” he adds.
How does one begin to invest in whisky? “If you like something, buy it to drink, or buy it to collect as well,” he advises. “If you really like it, buy as many as you can.” Whisky collectors often buy to drink rather than to sell. But due to the limited supply of old malt whiskies, with prices going up exponentially year after year, a secondary market in the auction houses has emerged. “In Hong Kong, if you look at auctions popping up, I would say in excess of six auctions per year. There is that secondary market and the clients are doing well. Some clients who invested three to four years ago have maybe started to look at liquidating and selling their stock,” says Seddon.