The thoroughbred industry welcomes new owners. Being a racehorse owner is a thrill like no other! The purpose of this guide is to walk you down the path to racehorse ownership and put you in the picture
Investing in thoroughbred racing and breeding may offer exciting business opportunities but it is important to recognize that it is of a speculative nature. The investment is not for everyone, but it may be right for you. Before you get involved you need to accept that horses are not machines and there is no “guarantee” to your investment. The risks are high but the rewards both financial and emotional can be substantial.
It may be prudent to begin by answering these questions.
a) What level of financial resources do I wish to allocate to my racing interests?
Determine the total amount you are prepared to invest and develop a budget to be allocated towards initial purchase and monthly expenditure. The amount of financial resource you are prepared to allocate is often a good guide in determining the most appropriate form of ownership.
b) Do you prefer to invest as an individual or in a group?
Although your level of investment should serve as a guide in determining the appropriate form of ownership for you, you may be the type of person who prefers to call all the shots, assume all the risks and take all the glory! Or, do you prefer to spread your risks and share the rewards?
c) What time period is involved?
In selecting a horse, you need to consider whether you are looking for a quick return offered by a precocious animal or are prepared to wait a little longer for a more stoutly based option.
TYPES OF OWNERSHIP
You have two ownership options, namely owning or leasing. Owning entails purchasing a horse from a bloodstock auction, or privately from a trainer, breeder or stud farm.
- Individual ownership means that you are responsible for all the costs and collect the lion’s share of the winnings.
- Partnerships can be formed. Sharing the costs and benefits, the thrill of ownership and the excitement of race days makes this a popular one for first-time owners. It also allows owners to spread their investment and enjoy an interest in more than one horse.
- Syndicates consist of between five and twenty people. It’s a low cost option and allows owners to invest in quite a number of horses, increasing the chances of having an interest in a winner.
- Companies and Close Corporations can also register with The National Horseracing Authority as owners of racehorses.
Thoroughbred horseracing is a team sport. In addition to a good horse, the team needs a good trainer. It would be wise to exercise as much care in selecting your trainer and/or bloodstock agent as you would in selecting a horse. Consultants can come in various forms, from trainer, bloodstock agent, pedigree advisor, vet, to an experienced owner.
SELECTING A TRAINER
It is a good idea to select your trainer before purchasing your thoroughbred. This is a very important consideration, as he or she can give invaluable advice in the selection and purchasing process. There are training centres around all the major cities in South Africa. In choosing your trainer it is advisable to select one that is based not too far from your home.
You can study the trainer’s performance chart and select any of the trainers but there are other factors to consider. Some trainers prefer to run small, quality yards with a minimum band of owners. Although they may not be log leaders, their percentage of winners to runners is often a good yardstick but bear in mind that some of the smaller yards do not have the top stock.
The owner/trainer relationship is probably the most important in racing. Take your time and select the individual that suits your needs and personality.
The RA has developed some minimum standards that are expected from an owner and from a trainer.
It is important that among other details you establish the following:
- How often should you reasonably expect the trainer to communicate with you?
- When do you wish to be consulted?
- What are the arrangements for visiting the yard?
- Would you like the trainer to attend sales and make purchases on your behalf?
Public Auction – Auction sales offer the widest selection and often assure fair market values for horses. Auction sales are held throughout the year with major sales being as follows:
Yearling Sales – January/February – Cape Town
National Yearling Sales – March/April – Johannesburg
Yearling Sales – July – Durban
Two-year-old Sales – August – Johannesburg
Bloodstock SA : Emperors Palace – Ready To Run Sale – November – Johannesburg
Many other sales take place during the year and details of these can be obtained from your local racing organization.
Auction procedures – The auction purchase process can be separated into three stages:
Before the sale:
a) Complete the paperwork.
b) Establish credit.
c) Review conditions of sale (printed in catalogue).
d) Meet with your consultants (agent and/or trainer) to select horses. Devise a first-look list and a subsequent short list. The short list will be dependent on the conformation inspection of each horse.
e) Assign responsibilities:
- Bidding arrangements
- Post-sale arrangements
During the sale
a) All horses on the preliminary list should be inspected.
b) Inspect your final candidates several times. Do not be afraid to go back for a second and third look.
c) You may wish to have a veterinarian perform a pre-purchase examination.
d) Bidding – do not permit yourself to get carried away when bidding.
e) Follow your initial plan and stay within your identified budget.
f) Bid only on horses on your short-list, exercise control and stay within the pre-determined price limit for that horse.
a) Payment – Payment for the purchases should be consistent with the arrangements made with the sales company. Upon payment, buyers will be given a stable release and at a later stage the National Horseracing Authority change of ownership certificate from the sales company.
b) Successful bidders must make the necessary arrangements for the transport from the sales ground and the board and care of their purchase.
Insuring your purchase is optional and a number of factors have to be taken into account:
- Racehorses move faster and train more vigorously than any other athletes and therefore at a greater potential risk. As such are you happy to carry the risk of your investment yourself?
- Selecting a broker is an important decision. Choose a professional, registered bloodstock insurance broker. Consult with the RA.
- Once you have taken the decision to insure, you are obligated to ensure that your trainer keeps your broker informed of any illness or injury suffered by the horses and to notify them of any operations, eg. Gelding.
Registration with the National Horseracing Authority
Registering your racing colours:
Every owner has to be registered with the National Horseracing Authority of South Africa. Registration forms can be obtained from either the Racing Association or directly from the National Authority (contact details provided).
Each owner, on the acceptance of his/her application, can visit the NHRA to select his/her individual racing colours. These will be the colours/silks worn by the jockey who will be riding your horse in a race. A selection of available colours will be shown to you but failing you finding a suitable choice, you may design your own racing colours within certain restrictions. These will then be approved by the National Horseracing Authority.
Making up your racing silks.
There are a number of persons who make up racing silks. For contact details of these persons please consult your closest Owners Association.
Registering your horse.
Once application for ownership has been accepted and you have purchased your racehorse, this racehorse has to be registered in either the individual, partnership or syndicate name. On the successful purchase of your horse, the registration papers will be forwarded to you by the relevant sales company. You have to lodge the change of ownership forms with the National Horseracing Authority.