Thoroughbred Horseracing Partnerships : A Complete Introduction

Posted on | January 23, 2009 |

Have you ever wanted to invest in a thoroughbred racehorse but didn’ know where to begin, or if you would be able to afford such a commitment? If you have, rest assured you are not alone. Many people would love to own an interest in their favorite thoroughbred racehorse. Although your favorite probably won’t be available (or affordable!), there are many others with open horseracing partnership shares.

The investment opportunities offered by thoroughbred horseracing partnerships are shares in the partnership that can be as small as 1% of the partnership up to as much as 45% of the partnership. However large your ownership is in the horse will determine your share percentage. This also is a representation of your costs and earnings.

When you join a horseracing partnership, you are assuming a smaller risk then if you owned a horse outright. The amount of risk you assume is the amount of your thoroughbred ownership percentage. For instance, to begin in the industry, you may buy a very small percentage in a partnership- perhaps a small as 1%. However, if you are familiar with the industry and are confident in your investment, you may purchase a larger share of as high as 45% of the thoroughbred.

Across the United States, there are a number of racing stables that engage in syndicates and horseracing partnerships that offer co-ownership. Each of these partnerships or syndicates is a little different in how they choose to manage their group. Before you invest in a partnership, you must be familiar with the rules of several horseracing partnerships and syndicates in order to find the one that matches your investment goals.

When thinking about partnerships or syndicates, consider:

* Does the partnership offer the size share you are interested in? Some groups do not offer shares smaller than 5%.

* Is the share price of the partnership based on only the cost of the horse or is it based on a cost plus a markup?

* Do they charge management fees?

* Will you be responsible for monthly costs that are for more than the upkeep of the horse? For example, there may be advertising costs due. While advertising can be helpful, it can also be expensive.

* Will you be able to meet with the managing partner before you sign the contract as well as after you sign?

The sport of thoroughbred horseracing offers many investment opportunities but you must remember the stakes are high. You could just as easily lose as you could win. However, by joining a horse racing partnership or syndicate you can defray some of the costs and risks associated with being an owner.

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