UKV INTERNATIONAL AG is a Swiss-based specialist luxury fine wine, champagne and whisky company, dedicated to sourcing the most esteemed labels from the world’s finest vineyards and distilleries.

It services a wide range of collectors, consumers and, in more recent times, predominantly private investors.

UKV operates in conjunction with several exclusive independent merchants, brokers, and agents with territory concessions for specific exclusive brands and labels.

It offers clients a complete end-to-end package, so they can have as much or as little involvement in the actual acquisitions or sale of stock in their portfolio.

We caught up with Oliver O’Donovan, Luxury Asset Portfolio Manager at UKV, to find out more…

Oliver O’Donovan, Luxury Asset Portfolio Manager at UKV International AG

What sets UKV International AG apart from its competitors?

The biggest difference is how we engage with our clients, giving them a personal level of involvement in the market and with UKV as a business. We refrain from the typical industry jargon, instead speaking with clients in a way they can understand the concept of enjoying the market rather than simply buying and selling or collecting for future consumption.

We hold several social events where clients can meet one another and share their own experience of the market, their dealings with UKV and other interests so they are part of a community rather than clients in isolation.

Describe your average investor…

The type of client has changed over the last few years, and we are seeing more serious investors entering the marketplace owing to the volatility in mainstream markets and a change in mindset about what they can get out of a market. This is largely owing to the growth and awareness of the potential of luxury wine and whisky within the global trading arena and possibly that as a consumable soft commodity the asset is tangible, which gives it substance and intrinsic value beyond the actual content
of the bottle or cask.

Talk us through the investment journey.

The journey starts by establishing what the individual is looking for out of the market – if they are looking for their own consumption or for future sale back into the market either in the cask or bottling the whisky for resale at a future date.

We give clients a better understanding of how and what the benefits of buying into wine or whisky and walk them through the buying and selling process from entry to exit.

How do you select the whisky?

The selection process is based initially on the client’s budget, the ideal holding period and the purpose of the purchase. With this information we look at the most suited wine or whisky to meet the client’s timeframe and desired outcome.

We only select branded names and producers for both wine and whisky as these are the brands that dominate auction house sales and the secondary market.

Whisky casks and cellar master assessing the barrels

What happens to the actual whisky?

In reality, the cask whisky will remain in bonded storage while the natural aging process takes place which can be from five to 20 years depending on how long the client wishes to retain the cask. In many cases a cask will be resold while still in the barrel or cask to another buyer retaining the HMRC duty and VAT suspended status. Some will remain in storage for 20 years before being bottled.

Why has whisky become such a profitable commodity in recent years?

The popularity is really down to the stability and growth of the market, which has created a larger audience – especially in emerging economies where newfound wealth has opened the doors to a much wider wealthy sector around the globe. Whisky is often seen as a status symbol by those that wish to show their success and standing within social circles. This has increased the demand hugely while production remains quite limited when it comes to the top echelons of makers.

Has the pandemic affected the market?

Luxury consumables have performed extremely well as wealthy consumers who have also been forced into lockdown have substituted going out to wine and dine with enjoying this instead from the comfort of their own homes. And so consumption of single malts and fine bordeaux and burgundies has risen, partially as a form of escape to combat the social constraints that have been forced upon them.

Without giving away too many trade secrets, is there one area of the market or one distillery you are particularly interested in moving forward?

There are several factors of interest, but the biggest is the middle-aged, matured cask of well-known branded whiskies. The new trade deals the UK is currently establishing post Brexit are with some of the largest consumer markets on the planet and the semi, middle matured casks are where the money is to be made in the top 100 whisky brands. Casks that are between ten and 12 years old now will undoubtedly see a high increase in value as they reach 20 to 25-year-old status.

What are your longer-term predictions for the whisky market?

Long-term, with population growth and consumption on an exponential increase, Scottish distilleries will be hard pushed to meet future demand. There is some concern that production levels may decrease as a result of the global demand for – and predicted shortage of – quality graded barley in the next ten to 20 years. So there will be many high-quality individual brands that find demand outstrips supply.

Personally, we cannot see the popularity of the best whisky or fine wine ever decreasing, as younger generations get introduced to the market. As they come to taste, enjoy and experience some of these truly outstanding brands and labels, they will understand what makes them so desirable – and a new cycle of collectors, consumers and investors will enter the marketplace.

One has to take on board, the making of the best whiskies and wines is a highly skilled and time-consuming art and a real way of life for most distilleries and vineyard owners. They consistently need to produce a calibre of whisky or wine they can put their brand or label on, without risking their long-standing reputation and market standing, so to get the perfect balance of a naturally produced consumable each and every vintage or production year is not easy by any means. This is where the value comes into the whole equation, and those that have a passion for drinking the finest are happy to pay handsomely for the privilege.

Do you see the space changing in the next decade?

We think the space will change but this will be owing to the market growth in different international consumer and collector markets, so it can only become better subscribed to in years to come. Both whisky and fine wine have or are becoming a real safe haven for those that need a medium or long-term shelter where they can park funds without high financial exposure, but can still enjoy excellent annual performance.

Do you have a personal favourite whisky – to consume rather than invest in?

Although it is legendary around the world and may possibly seem an obvious choice, in preference to any of Scotland’s offerings it would have to be a well-aged Macallan. In my opinion, it stands head and shoulders above the rest and you just cannot match it for well-rounded balance and flavour, so it would always be my whisky of choice, and clearly the older the better. Let’s hope you’re buying.

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