Ilen River Partners announced it has launched the Irish Whiskey Growth Fund, Ireland’s first investment fund dedicated to the whiskey industry.
With backing from the Ireland Strategic Investment Fund (ISIF), the fund has an initial corpus of €10 million (US$11.7m) and will offer financing and industry advice targeted toward the long-term need of distilleries and businesses operating in the whiskey production and supply chain.
Co-founded only this year by managing partner Fearghal Ó Ríordáin and principal Triona Hourihane, Ilen River’s thesis is based on the pillars of deep sectoral knowledge, patience, long-term vision, and real partnerships with emerging businesses, according to the firm’s website.
The funding will be secured by the borrowers’ existing whiskey stock, and under the structure of the deals, the fund will not be seeking to appoint directors. Existing management teams will continue in place to run the borrowing business, and strategic advice will be provided by Alan Rutherford, the former whiskey production director for Diageo; Gordon Steele, the founding director of the Scotch Whisky Research Institute; and Jack O’Shea, the former European general manager for Alltech, who played a key role in the establishment of the Pearse Lyons Distillery in Dublin, according to the Spirits Business.
“With this access to growth capital complementing existing sources of equity finance, business owners will be able to focus their efforts on producing quality whiskey and achieving scale,” stated Ilen River Partners.
Liquid Gold
The Irish Whiskey Growth Fund may be the first such fund in Ireland, but it is not the first vehicle dedicated to the spirit. Sweden boasts the Single Malt Fund. Founded by CEO Christian Svantesson, The Single Malt Fund is the first publicly traded investment vehicle dedicated to whiskey.
“Instead of gold, we buy liquid gold,” Svantesson told Atlas Obscura in January of this year.
Whiskey is the fastest growing category in the global spirits industry. In 2015 the value of Irish whiskey exports was more than €400 million (US$470 million). By last year the value of the country’s exports reached €600 million (US$706 million), and by 2020, Ireland’s whiskey exports are expected to exceed €850 million (US$1 billion), and by 2030, €2 billion (US$2.35 billion), according to Ó Ríordáin.
Jameson Irish Whiskey, which dominates the Irish whiskey sector with 70 percent of the global market, saw sales of $713 million in 2016, however, competition is growing as demand increases.
Whiskey industry veteran John Teeling spoke of rising demand, telling the Irish Times that global demand could result in a shortage of Irish Whiskey in the near term – something that is already playing out in Japan.
“The sector brings significant benefits to the Irish economy,” said Ó Ríordáin. “By way of comparison, exports of Scotch whisky contributed approximately €4.9 billion to the UK economy last year. As part of the lending process, the fund will provide flexible, tailored financing, strategic commercial advice and specialist industry expertise for developing and growing a whiskey business. We now look forward to engaging with whiskey businesses across the country.”
-Lynda Kiernan