Wave Financial Group and Wilderness Trail Distillery launch Kentucky Whiskey fund
Wave Financial Group (Wave), a regulated asset management firm focused on digital assets, is working with Wilderness Trail Distillery to launch the Wave Kentucky Whiskey 2020 Digital Fund, Ltd, the first tokenised US whiskey barrel fund available to the market.
The fund will allow investors to diversify into an asset that is not normally considered investable, but offers attractive potential returns as bourbon whiskey goes through the ageing process in barrel. The fund will soon be made accessible alongside Wave’s other digital asset funds.
Since 2010 sales of whiskey have consistently grown year-on-year, driven by consumer preferences shifting towards higher end spirits and growing global demand. Whiskey was the most exported US spirit in 2018*, with international sales of whiskey expected to grow at rates between 3.6% and 4.5% in the years from 2020 through 2023. Tokenisation is providing access to assets that would not normally be considered as investable, radically changing the way investors can own certain assets and opening up new opportunities to markets that have the potential to provide strong returns.
Benjamin Tsai, President at Wave and manager of the fund, says: “The Wave Kentucky Whiskey 2020 Digital Fund provides investors a rare opportunity to access this unique asset class traditionally unavailable due to high upfront costs and purchase minimums, low liquidity, scarcity of production capacity, and technical know-how. Wave’s relationship with leading distiller Wilderness Trail leverages Wave Financial’s expertise with Wilderness Trail’s operational excellence,”
Kentucky Bourbon production capacity has been notoriously scarce due to the spirit’s growing demand, making the relationship between Wave Financial and leading Kentucky distiller Wilderness Trail Distillery even more significant. Known for pushing the limits of innovation by reinventing the status quo of fermentation and distillation techniques, Wilderness Trail is highly regarded for mastering the rare sweet mash technique in Bourbon production. Wilderness Trail is a premium producer of Kentucky wheated and high-rye Bourbons, and as the 14th largest Bourbon distillery in the world, joined the Kentucky Distillers’ Association’s most elite members featured on the famous Kentucky Bourbon Trail® in December 2019.
Marc Dottore, owner of the high-end boutique distillery Dueling Grounds Distillery, and advisor to the project, says: “When the team at Wave Financial outlined the vision for this unique investment fund I knew that Wilderness Trail Distillery would be the ideal partner for manufacturing and storage. Shane Baker and Dr. Pat Heist have built a company that is highly nimble yet poised to become one of the major Kentucky Bourbon producers in the next 10 years. They have the capability of creating a bespoke high quality product and the manufacturing capacity to fill an order of this size.”
The two firms are pioneering a unique investment opportunity, while also creating a brand new market for the trading of ageing whiskey. To do this, the Wave Kentucky Whiskey 2020 Digital Fund will hold newly filled barrels of premium Kentucky Bourbon whiskey and store them throughout the ageing process. Investors can own shares in the fund represented through tokens, expected to be tradable on leading digital security exchanges, providing investors the opportunity to trade in and out of the fund during its lifetime. For investors who do not require this liquidity, but still want access to investment in the aging of this leading Kentucky Bourbon, a more familiar investment structure can be used, mirroring traditional funds.
Adam Johnson, the Senior Director of Kentucky Bourbon Trail Experiences at the Kentucky Distillers’ Association, says: “Kentucky Bourbon is a traditional and timeless craft, but can also push things forward in innovative ways. This fund will allow for a new and dynamic way to enjoy America’s native spirit.”
David Siemer, CEO of Wave, adds: “Kentucky Bourbon has long been known to be the finest of Bourbons, with domestic and international interest increasing steadily. The Wave Kentucky Whiskey 2020 Fund provides a novel way for those passionate about whiskey to get involved in its creation, while also appealing to those who are just seeking high-returning investment opportunities.”