As someone who already loved wine, he was keen to start building a wine portfolio for himself. However, he says everything was geared to an older generation living in large houses, not a 20-something living in Los Angeles. This dilemma provided the creative spark for his latest venture, Vinovest, a tech-focused platform designed to democratise fine wine – and now whisky – investment. The platform allows users to build a profile and create a portfolio that suits their investment goals while also gaining access to products that would normally be difficult for anyone outside of the wine environment to know about.

Today, the company has more than US$100m in assets under management, and 250,000 users worldwide. Two years ago, it branched out into whisky, allowing investors to diversify their portfolios to multiple asset classes by investing in casks of whiskies, including American bourbon and rye, and single malt Scotch. The company’s ‘whole-cask model’ means investors own the entire cask of whisky rather than just a share of one or an abstract volume of spirit split across many casks, as is commonly offered elsewhere. This guarantees complete control for the client when it comes to managing the cask, its maturation, and exit strategy.

For whisky casks, investment starts at US$1750 for American whiskey and US$15,000 for Scotch whisky. Zhang says the fractional cask ownership model has never appealed to him: “We wanted people to have that full sense of ownership.”

Leading the whisky space is Rachel Hanson, who recently joined the company as director of whiskey sales. Hanson began her career in New York, helping to run events for Dewar’s, before working in brand management, sales development, and then running a distribution business in Minnesota focused on fine wine and craft spirits.

“That first part of my career gave me a great look into this world. At the time it wasn’t a normal thing for a 20-something woman in America to be doing. But my entire perspective on whisky was shaped by my immersion into Scotch in that initial period,” she says. Today, her focus is on building out the partnerships that allow Vinovest to purchase casks of whisky directly from the makers and ensuring the company’s whisky portfolio continues to broaden. “The biggest challenge is finding the best value for clients and understanding when an ‘opportunity’ is not an opportunity or won’t be down the line,” she adds.

Clients must agree to hold the barrels for between three and five years — unless something crops up that gives an unexpected exit opportunity. Zhang highlights a recent case where they were contacted by an Indian company looking to purchase substantial volumes of bulk bourbon, so clients were given the opportunity to divest sooner because there was a buyer. While these opportunities are rare, Zhang says it showcases a growing appetite globally for American whiskey.

Clients pay fees of between 2.25 per cent and 2.85 per cent to cover costs of storage and insurance, with extra fees if someone wishes to bottle their cask instead of selling it when the time comes to divest. The company rarely sources from third parties, with the intention that working directly with producers gives the best access and opportunity for clients. Both Zhang and Hanson conceptualise the model as a quasi-loan company for the producers.

“Stock management is a big topic with producers, as is working capital. With the long-term nature of our investors, we are also a long-term partner to the producers. If they want to then buy that stock back after three to five years, then they’re effectively loaning it to us in the meantime, and our clients get a return at the end of it,” says Zhang. Hanson says the direct nature of the partnerships means there is a greater understanding of what will be potentially valuable down the line. “The people that are buying the barrels back are telling me what they’re going to be looking for in the future, so I can try to understand what things have the best chance at being sold,” she says.

Currently, the company works with around 15 different brands, but that number is increasing, with producers from Japan and Ireland coming on board this year. When it comes to Scotch whisky, while the current cask opportunities come in the form of older aged stock, Hanson says to watch this space, as she’s also beginning to see opportunities for sourcing new-make and younger aged stock. “The focus is on buying not one or 10 barrels, but hundreds, so that they can be sold in five or 10 years in tranches to big blending houses which are so important in Scotch,” she says.

In order to help educate clients, the company produces numerous videos and toolkits, alongside offering video calls with advisors to dig deeper into what someone is aiming for with their investments. But being from a tech background, Zhang says a key thing he wanted to implement for clients was the more personalised experience. “Once you buy a cask, you have to hold it for a long time, and it’s going to be boring if we only give updates based on price. We want to deepen people’s connection to the brands, so part of what we do is give investors the opportunity to get up close with the asset they own,” he says, explaining the company organises annual trips for clients to visit and sample their barrels. 

Vinovest has also started creating client experiences, such as special dinners with the distilleries themselves, to get people up close and personal with makers. Zhang concludes that the main thing setting Vinovest apart is its approach. “The DNA of the company is very different from any others out there.”

While the market is always changing, Hanson says she sees positive opportunities ahead, too. “While I agree that the growth was unsustainable for the last 15 years, I disagree that consumer profiles are just going to change back to vodka. I feel really good about where whisky is going.”

Disclaimer: This feature is a paid advertising promotion created and published by Whisky Magazine on behalf of Vinovest. Investment in cask whisky is not regulated in the UK and Vinovest is not regulated by the Financial Conduct Authority. Investment values can fluctuate and could go down as well as up during the course of the investment.  Any investments are done so at the risk of the investor. A whisky cask does not come with a regulated financial product’s standard protections.

Risks with the potential to influence a cask’s value include global falls in demand; oversupply of whisky from distillers; global legal changes that could impact whisky sales, including tariffs; alcohol prohibition; changing consumer trends; global conflicts or natural disasters with resultant impact on global supply chains.

This advertorial should be taken as informational in nature and does not constitute financial advice. Seek a qualified, independent financial advisor for investment guidance. While Whisky Magazine has undertaken reasonable due diligence in the production of this advertorial, the information presented in this text relating to Vinovest has been self-reported by the advertiser and is not independently verifiable.