Team

Howard Cai, Investment Advisor

Chinese food critic, whisky expert, and international food judge. Founder of the Howard Cai® Restaurant, he devotes himself to the internationalization of Chinese food and the blending of Chinese cuisine and Western wine. He is known as a taste designer and have won many awards in different industries.

Terence Lam, CEO

Motorola & HTC Executive. Fintech Startup Founder. Adjunct Business School Lecturer. Harvard Business School Alumnus. Whisky Investor. Hong Kong, Beijing & Singapore.

Jonathan Chan, Director Of Technology

Director Of Technology at Loopnest Accelerator, Blockchain Analyst, Senior Developer. Hong Kong, China and Sinapore.

Daniel Wang, CTO

Founder & CEO of Loopring Foundation. Sr. Software Engineer, Google & ZhongAn Insurance. Technology innovator. Shanghai, Beijing, California & New York.

Alvin Ip, CIO

Senior FX Trader, Executive & Wine

Entrepreneur. JP Morgan & BNP. Former Responsible Officer for SFC Type 9 License. Horse Owner and Racing Enthusiast

Professional Team:

• Digital Asset Exchange: CryptoSX Digital Asset Exchange

• Lead Legal Advice: Sidley Austin

• Tax & Audit: Crowe Global

• Offshore Lawyers:  Walkers Law firm

• Finance & FinTech: Loopnest Accelerator

Value Proposition

The fund was designed to provide more exposure to Fine Scottish Whisky as an asset class. The HCS Whisky Fund (“HCS”) provides lower barriers to entry through “Fractionalized” ownership (vs. whole barrels). HCS Investors will also benefit from a diversification by investing in multi-barrel portfolio (vs. single barrels) and will have higher liquidity via secondary market trading since it is utilizing blockchain in raising funds via Digital Asset Token Offering (DATO).

The fund has also been designed to have stable funding source for long term “buy and hold” strategy via closed-end structure and has the expertise of the SEA’s leading independent bottler (IB), Howard Cai. 

HCS Maximizes the ultimate selling price of assets through use of Howard Cai® Selected brand and existing distribution network of high-end restaurants, casino hotels & duty free shops such as The Whisky Dungeon by Howard Cai®. HCS also has an enhanced security and transparency via FinTech atop traditional, proven Cayman SPC structure and is loaded with the Best-in-class compliance and integrity enhanced by best-in-class advisors.

Market

The global financial market began to decline on the 21st of February 2020, however the whisky bottled market broke the macro-trend start from the 28th of February of the same year. While as of today the global markets are still in decline, Scotland’s distilleries are still gearing up as the whisky value keep on steadily rising with a value of USD1.04 Billion compared to USD939.10 Million with almost 12% increase over the span of 12 months. 

According to the latest Knight Frank wealth report, as of December 2020, rare whisky had an underwhelming year compared to other alternative or luxury investments. In disagreement with Rare Whisky 101’s reported 6.73% gain in 2020, the Knight Frank model indicates a 3.5% decrease instead. However, rare whisky is still the most valuable investment over a 10 year period within the same model, which may suggest that the recent dip is a good time to enter the rare whisky market.

Secondary Market

In May 2021, the Fund units (HCS Whisky Tokens) were officially listed on Cryptosx Digital Exchange. As this is a brand new investment product, the initial trading activity is relatively slow. However, with the platform exposure, it is expected that the secondary market will become more active with increased liquidity. At present, the trading price in the secondary market is over $1,450. The market premium reflects the optimistic expec­tation that investors have on our fund

HCS Whisky Fund Performance & NAV:

In the first quarter of 2020, the fund carried out active asset allocation and was able to maintain a relatively stable position holding 269 barrels of high-grade single malt Scotch whisky barrels designated by Investment Advisor. In terms of value, 70% of the fund holdings were aged casks, 30% were younger casks. If calculated based on the number of barrels, 12% of fund holdings were aged barrels and 88% were younger barrels.

 By the end of Q2 2021, over 27.0 % of fund holdings are aged casks and 72.0% are younger casks.

The Net Asset Value of HCS has increased by more than 24% since inception in March 2020.

 Notable Fund Holdings:

• Highland Park
• Macallan
• Bowmore
• Benrinnes
• Howard Cai x Fan Zeng

Tokenomics:

Token Name: HCS Whisky Token

Token Symbol: HCS

Total Token Supply: 4,990,100

Token Price: $1496 (30 August 2021)

The Future

With increased worldwide demand of whisky, the value of whisky in casks will only increase, in particular more aged whisky, along with the value of whisky produced in 2020 and 2021 during the global pandemic due to the closures of distilleries which meant that there was reduced supply. Recent data collated this year has been reflective of the trends which have been witnessed in the whisky market over the past few years, with extremely reassuring outcomes. 

If growth continues at a comparable rate, the data suggests that investments made in to casks could see their investment double in value over the next five years. In times of great uncertainty, these findings provide great prospects for future days ahead.

Fedaa Refai,
Director, Bellator Consulting
fedaa@bellator-consulting.com