The world of global finance offers an intimidating myriad of options for investors to secure their funds in a range of instruments ranging from traditional mutual funds to ETFs. There are even socially-motivated products such as those premised on environmental social and governance or ESG principles. But sophisticated investors know that there is much more to the world of modern finance outside of stocks or bonds and, no, this isn’t about cryptocurrency. Investing in hard assets was traditionally reserved for real estate, gold, or silver, among others, but modern firms are pioneering new asset-backed instruments such as CaskX, founded by Jeremy Kasler, a company that purchases and holds whiskey casks as investments on behalf of clients seeking healthy returns from sources outside of the traditional markets.
With over two decades of professional experience working in finance, founder and CEO Jeremy Kasler outlines the unique proposition that CaskX offers potential investors. As with fine art, premium whiskey offers a unique opportunity to diversify into an asset that is coveted, treasured, collected, and, above all, remains a reliable store of value for years to come. But don’t worry, even if you don’t know anything about whiskey, CaskX is there to help clients get a foothold in the market and welcomes investors who value a diverse portfolio.
Maintaining a global presence, CaskX approaches each client with a bespoke strategy that is tailor-made to contour around a person’s goals, dreams, and ultimate desires. Jeremy Kasler outlines how challenging this can be, particularly with an asset such as whiskey, and how CaskX’s innovative approach delivers long-term value for its clients. Speaking with Jeremy Kasler about the future of CaskX, we get a glimpse of the company’s plans to launch its own CaskX label. We conclude the interview with a peek into the daily life of a financial pioneer and we get to know a little bit more about Jeremy Kasler, the person, and what drives him in business and in life. He also shares with us some of his favorite quotes as well as what he would change about our world as it currently stands.
Jeremy, start by telling us about your unique company and investment opportunity, CaskX.
CaskX helps private individuals build portfolios of whiskey as a way to diversify their investments holdings with a tangible asset that gets better with time. One of the most interesting characteristics of whiskey as an investment is that it changes as it gets older. The older the whiskey becomes the more desirable it becomes as a bottled expression. Whiskey cask investments have also remained a discreet, convenient, and easily transferred source of value.
What are the benefits of investing in barrels of whiskey?
The biggest benefit of investing in barrels of whiskey is that it is a tangible asset class that actually gets better with time. Whereas the value of most tangibles is driven exclusively by supply and demand, whiskey is unique in that time is the key factor that determines its value. If you consider other tangible assets, like art or precious metals, the value in the future is dictated only by the assumption that people will be willing to pay more for it at that time. The asset itself remains unchanged. Barreled whiskey is different in that it does change, becoming a more distinguished asset the longer it is allowed to age.
Many people don’t realize that whiskey only matures while it is inside of the barrel, once it is bottled the maturation process stops. So, investing in barrels is the only way to capitalize on this characteristic.
In addition to the manner in which whiskey ages, CaskX sees bourbon as a spirit that still has a large potential for growth. The bourbon industry is currently at the same stage that Scotch was 20 years ago. If it follows a similar path, then investors stand to reap exceptional returns as bourbon becomes increasingly valuable. Even in the unexpected occurrence of a recession, whiskey has been proven over time to remain consistent. Add to that unprecedented global demand and the potential for investment is high.
Is there an interest from people to diversify investments from stocks into more tangible objects such as alcohol?
Yes. Financial advisors today are recommending that investors increase the percentage of their portfolio that is allocated to tangibles as a hedge against inflation and volatility in traditional financial markets. Tangible assets have a strong resilience to inflationary pressure as their supply remains limited even as more currency is printed. There is a surge in investment in art, collectibles, coins, precious metals and more – all driven by the desire to have more tangibles in investor portfolios. Among the alternatives, whiskey offers one of the most compelling choices
due to the unique way in which it matures over time.
Unlike NFTs or Dogecoin, whiskey is an asset that can be physically seen and passed on to the next generation. This type of investment has shown unparalleled returns, outperforming all major markets and equities. With the help of CaskX financial advisors, we ensure that investors are always protected and offer multiple exit strategies as well. If you add to your portfolio each year you have a powerful investment strategy. After an estimated 5 years, one can trade out each year and take the profits or put the profits back in to build a portfolio. We expect the value of casks to double every 5 years or so.
Tell us about CaskX’s worldwide client base. What are the challenges of getting new investors?
We currently have offices located in Los Angeles, Louisville, Sydney and Hong Kong, which leads us to having the ability to reach investors from all over the world. We tailor each investors’ portfolio to fit their objectives so there is a significant time commitment on the part of the CaskX team in order to select casks that match their profile. Whiskey must undergo the maturation
process that creates its color and bold taste – so we advise investors to approach whiskey as a long-term investment, allowing 6-8 years for it to be fully developed. For investors that are looking for a quick profit, whiskey is not a suitable investment strategy.
What is the buy-in per barrel and what can clients expect to make on their return when they sell?
Barrels vary in price depending on the distillery and the origin of the liquid. Historically, investors have observed capital growth of approximately 15% per annum on whiskey cask investments.
Choosing the right distillery, the right age, and the right cask, is the key to maximizing returns. It is important to note that CaskX offers cask investments exclusively to accredited investors, as defined by the SEC.
The company will launch its own CaskX label in the future. Tell us about the CaskX label and when it should hit the market.
We can’t tell you too much at this point, but these bottles will be very exciting. Each cask of whiskey is completely unique and our goal will be to showcase the characteristics of our distillery partners in a unique way. We’ll be looking to showcase whiskey in a manner that takes you back in time to when craftsmanship and quality were the only factors that mattered. Pioneers such as Julian Van Winkle brought a new standard to the industry and we’ll be looking to carry this forward.
CaskX’s headquarters are in Beverly Hills, but the whiskey barrels are kept in Tennessee and Kentucky, the home of American bourbon. Can you tell us about the storage facilities?
The whiskey casks are safely stored in federally licensed facilities with all assets being fully insured to protect investors in the unlikely event of a loss. Casks must be fully stored at these facilities during the maturation process as every distilled spirit is closely monitored by the government during the entire maturation process until it is bottled. The warehouse staff closely controls access to the facilities along with regular inspections of the casks to ensure that they are maturing in the manner intended. CaskX also provides an annual audit by a third party accounting firm in order to give clients full transparency as to the validity of their investments. By working directly with distilleries, CaskX also offers exclusive VIP tours for our investors to visit the distilleries.
Do you need to know anything about whiskey to invest in CaskX?
No, but many investors do choose to invest because they are passionate about “liquid gold.” For those who love the spirit, investing in whiskey combines passion with the potential for profit. It’s the chance to take an active role in the industry by helping to finance the spirit of tomorrow, today. Investors get a unique experience while their portfolio grows stronger with each year that the whiskey ages.
Since founding CaskX in 2019, what have been some of the challenges you have faced?
The legalities in running an investment focused business here in the US is way more onerous than it is in the UK, Hong Kong or Australia where I have run business previously. There are endless hoops to jump through but once the path is cleared it’s just a matter of running the business within the SEC guidelines.
Jeremy, you have more than two decades of experience working in specialty finance. Firstly, what is specialty finance and secondly, what influenced you to get into the sector?
To be more exact I would use alternative assets. Mainly in the wine, art and whiskey field. I first discovered wine investment as an avid wine lover. I realized I was making more money from my wine collection than my share portfolio. This led me to start a wine investment business, followed by Chinese contemporary art and now whiskey.
How is a day in your life?
I’m a big believer in early rising. I’m up at 4am every weekday. I enjoy this part of the day as its quiet, relaxing and I have a chance to read the papers online and do a little work. I’m at the gym at 6am. Again, I like the idea of having completed a positive action before most people wake. I’m in the office at 7am and work until 3pm. This gives me time to spend with my wife after work where we will normally go for a hike or maybe the beach in Summer. Most evenings we cook at home, either a BBQ in summer or inside in winter.
What is something most people don’t know about you?
I used to sell hotdogs. I was 19 and living in London and started a hotdog business. Working hours from 9pm to 4am in the city Center, so a very challenging environment.
Choose two of your favorite quotes and write them here
“I’ve seen the future and it works” And Spike Milligan’s tombstone inscription “I told you I was sick”
If you had the power to change just one thing in the world, what would it be?
Right now, homelessness in Los Angeles.
To learn more about Jeremy Kasler and CaskX please visit https://caskx.com