Part 1: Types of Racehorse Ownership
By Emily Schulz
So you wanna be a racehorse owner?
With so many ways to become a racehorse owner, here are our tips to find out what type of ownership is best for you.
If you’ve always wanted to own a racehorse and not quite sure how to get started, or maybe you’re already a part of a syndicate but want to go out on your own and try your luck. Well, Fred’s here to help.
Owning a racehorse is like no other sporting experience - we know because we have plenty of them (including a few handy ones)! The chance to get up close and personal with a 600kg athlete is second to none,and calling them your own is such a rewarding experience, but nothing beats that winning owner feeling!
Let’s start with the why...
First off, you have to ask yourself, why do you want to be an owner? There are lots of reasons why and people need to understand the risks and rewards of investing in a racehorse before doing so. You might want to own a racehorse as a hobby in your retirement, or because Bob down at the pub is an owner or just because you love the animal. Whatever your reason is, it’s important to know that getting into ownership is not necessarily a guaranteed financial investment where you would expect your bank balance to grow. Horses that win prizemoney to pay for their upkeep is a great start and anything more is a bonus, but it’s the thrill of the journey which should fuel your passion for ownership.
How much does it cost to own a horse?
Horse racing was once called the Sport of Kings due to only being attainable by the wealthy. In this day and age, racehorse ownership in Australia is easily accessible and can be very affordable depending on your own personal circumstances. Let’s jump into the different ways you can own a racehorse depending on your budget and how involved you’d like to be.
Sole Owner: If you’ve got lots of money to burn, this is the type of ownership for you! Being an outright owner means that you get the opportunity to make all the decisions to do with the horse’s career with direct communication with the stable. You will get the sole naming rights to the horse and you can choose your own silks! All this power comes at a big price however also comes with bigger rewards if you get a good one. The initial outlay will be the purchase price of the horse as well as it’s training fees and upkeep which will be 100% your financial responsibility. If you’re new to the game, we would advise consulting a trainer or bloodstock agent before purchasing a horse on your own.
Part Owner: This is the most common type of ownership because it’s simple and more cost effective. It involves different people taking a small percentage in a horse and dividing up the costs, with prizemoney allocated according to percentage size. Each horse can have 20 named owners and/or syndicates, either directly with a trainer or via a syndicator. Racehorse ownership can be a roller coaster ride and it’s great to have people with similar interests around for the high and lows, as well as meet other part-owners in the process.
Syndicate: If you would like to share the costs amongst people you know, you may create a syndicate for up to 20 people. You get to choose the name of your syndicate and nominate a syndicate manager. The manager is in charge of sharing communications about the horse, distributing prizemoney, paying bills associated with the horse as well as chasing up any poor payers! We recommend communicating and sharing news about your horse with your syndicate members through your private syndicate chat group on the Fred App.
Syndicator: A syndicator is a company that buys racehorses from the sales and sells shares (generally 5% and 10%) publicly. They must hold an Australian Financial Services Licence (AFSL) or be an approved promoter which means they can use somebody else’s licence. They are legally required to provide a Product Disclosure Statement (PDS) for each horse which entails all the ins and outs of costs for the horse, procedures that will occur later down the track such as how the horse will be named and lots more. Like with any financial decision, it’s important to read the PDS to understand your rights and responsibilities.
Enough of all the jargon, getting into a horse from a syndicator is the most popular for newbies to get involved in the racing game as it can be relatively inexpensive. Syndicators may charge a small administration fee but in return you can expect more of the social stuff and communication is all taken care of. If you’re looking for a fun and social way to own racehorses, go through a syndicator.
Lessee: This is an uncommon route to ownership but is a much cheaper option to dip your toe in. You are basically renting a horse for a set period of time while it is in training, paying for its upkeep and sharing in the fun and hopefully prize money. There are no upfront costs making it an extremely attractive proposition however the breeder or trainer will then retain ownership for breeding after the horse has finished racing.
Racing Club: This is a particularly new way into ‘micro’ ownership in Australia, adopted from overseas. You pay an annual fee which is used for horse purchases, training fees, administration and social events to get the full experience of ownership. Everything is managed and administered by the club manager and you get the opportunity to own however many horses the club owns. This creates a really affordable way to get into ownership whilst meeting new people and building a real community vibe.
So there you have it - the amount you’re willing to invest determines the amount of risk you take on as an owner. The experience and involvement you want to have should be paramount as a deciding factor when choosing what type of ownership you’d like to sink your teeth into. There will be lots of money spent, prizemoney won and bets lost, but it’s all about what happens in between, that’s where the magic happens. To round it off, we would recommend getting into ownership with a group of mates to share the thrills (and expenses!), smaller shares in multiple horses are preferred over big shares in a singular horse and you’ll have a better understanding of a racehorse in training and better chance of success. With that, scrap a few smashed avos and with those savings you could be a racehorse owner in no time!
Keep your eyes peeled for Part 2: Choosing a Trainer or a Syndicator
Know anyone that would love to be an owner? Send them this blog post and invite them to join Fred here.
