For fans of horse racing, there are few more inclusive ways to get involved in the sport than buying a racehorse. However, ownership of thoroughbreds can often be a risky venture, as there is no guarantee that the star that you have brought will reach the highest level. Therefore, there comes a risk-and-reward type approach, with many looking to invest their funds.
Owners will the deepest pockets are able to take more aggressive approaches when it comes to finding a potential superstar, while there are a number of other angles available for those that don’t wish to spend as much on their equine star. So, what are the factors to consider when making an invest on a racehorse that can eventually make its way into the Breeders’ Cup winners?
Can You Invest in a Racehorse Without Losing Money?
In truth, those looking for a risk-free investment are probably heading down the wrong route if looking at the sport of horse racing, as there is no guarantee that you will see returns.
As one of the world’s most unpredictable sports, racing is ridiculously challenging to unearth a potential superstar, with those that have experienced the most success being backed heavily by leading studs. Therefore, racehorse investment is likely taken up by those who have an underlying passion for the game, with results and returns treated as a benefit rather than an expectation.
There is no sure-fire way to find a potential champion. Otherwise, every owner in the world will be winning major purses throughout the season. While sire lines and past performances of progeny can all point breeders and owners in the right direction, it isn’t uncommon for those runners with perfect profiles to fail to reach the same heights as their sires.
That is undeniably the biggest factor that is considered by those looking to make multi-million dollar purchases at sale events at Keeneland, Ascot, and Newmarket.
Racehorse Costs
The unpredictable nature of horse racing makes ownership a very expensive venture, especially if you’re aiming to buy a runner that will compete at the very highest level. A championship-calibre horse in the United States can cost between $100,000 and $300,000, while this sum could also increase to the millions.
Following this, a day rate should be paid to a trainer, which could reach a fee of $120. It also costs owners money to maintain horse welfare, with outgoing bills including vets, dentists, and a blacksmith. Additional fees will also come when it’s time for your horse to run, as a sum must be paid to enter a horse into a race. It is worth mentioning that while trainers don’t take a fee from the day rate, they will take a 10% cut of the prize money won by the horse that they are training.
As well as this, the jockey will also take a cut of the prize money for their ride on your horse. Therefore, if you’re to venture down the route of ownership, then you should ensure that you have deep pockets to cover all the potential costs.
Is There a Safer Racehorse Investment?
While sole ownership of a racehorse can be a hugely exciting venture for fans of the sport, it can often be extremely expensive with no promise of returns. Therefore, it isn’t uncommon for those looking to make an investment to go into partnership with like-minded individuals.
Syndicate ownership enables all fans to get involved in the sport, with the increased price put down, giving the holder a bigger share of the runner. However, syndicates reduce the risk of the investment, as you won’t stand to lose as much money should your horse not be a proven competitor on track at the highest level. Shares of racehorses differ in price, and a decision can be made regarding the sum that you wish to pay revolving around how much you want to get back from the experience.
For example, stakes in horses at under $100 will give owners very limited in terms of the prize money share, as you will likely own 0.01% of the runner. However, you can instead opt to put down a great share in the horse if you wish to pick up more of the prize money. But, syndicate ownership appears to be the future of horse racing, as it gives those looking to get involved in the sport the perfect opportunity to do so.
Any syndicate will also give members the opportunity to get track passes for the day, meaning that you can stand in the parade ring and get close to your horse before it takes to the track. You can also get your voice heard by discussing tactics with the jockey.
Overall, it gives you the ideal racehorse ownership experience without having to pay mega-money for the runner on track. However, those with deeper pockets will continue to chase the dream with their investments to try and find the next superstar.
