WAVE Financial: Whiskey investing, made easy with Symbol blockchain
Challenge
Exposure to this unique hard asset with impressive historical returns typically requires high upfront costs and industry expertise. Investments in whiskey typically require a multi-year lock up without cash flows, due to the aging process.
While Kentucky bourbon production capacity is scarce due to bourbon’s high demand, Wave Financial has successfully partnered with a leading Kentucky craft distiller and member of the Kentucky Bourbon Trail.
The fund aims to generate a 20% IRR over a six-year investment horizon.
The fund will hold up to 25,000 barrels of 2020-vintage Kentucky Bourbon, and intends to realize returns through the strategic sale of barrels during the fund’s lifetime.
Having researched multiple real assets such as real estate, wine, and art, our in-depth analysis found that the potential value appreciation of premium Kentucky whiskey during its ageing process is very attractive. Our fund will not only provide investors with unique access to a normally inaccessible asset but as a regulated fund manager, Wave Financial takes investor protection and suitability very seriously. We very are excited to be working with NEM to make this a reality.
Why Symbol?
Transfer restrictions, lockup periods, and privacy are important considerations the Wave team thought through when selecting a protocol partner for their digital security. Symbol’s hybrid structure brings advantages from both private and public blockchains and provides much needed flexibility when issuing digital securities.
Benjamin Tsai
President, Managing Partner & Portfolio Manager, WAVE Financial
Approach
1. Asset-backed – Fund owns the underlying asset and will liquidate barrels to generate cash flows in advantageous times.
2. Access – Investors gain access to a historically high performing asset class without administrative or operational hassle.
3. Liquidity – Tokenized fund in order to create a secondary market so that investors can trade in and out of their investment.
Benefit
1. Fractional Ownership – The purchase or sale of shares representing whiskey barrels can be done in partial quantities, rather than requiring the transfer of whole barrels.
2. Liquidity – Tokenization allows for 24/7 trading, with tokens tradeable on select digital security exchanges.
3. Faster Settlement – While traditional whiskey asset transfers require bonded notes and extensive legal contracts, token trading settles almost instantaneously.
In November 2020, Wave Financial won the “Best of Class” TADS (Tokenised Assets & Digitisation Securities) award for best asset backed token.
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