If you are considering becoming a new horse owner, here are some helpful tips and advice provided by Gavelhouse, who have helped hundreds of people join syndicates and partnerships and live the dream of seeing your horse in the winners’ circle.
One of the great things about racehorse ownership is that there are different types of options available, depending on budget and the level of involvement you are looking for. Unlike single ownership, where the horse has only one owner who buys a horse, chooses the colours, covers all the costs, makes all the decisions and enjoys all of the rewards, you may decide to be a part of a syndicate ownership - where the thrill of winning can be just as rewarding and electrifying for even the smallest shareholder.
Here are some options, to allow you a better understanding of racing partnerships and ownership.
PARTNERSHIP - Licensed Trainer
A partnership is the most common form of ownership. It provides the partners with many advantages, such as the sharing of costs - and the fun. Partnerships are limited to between two and ten people. They can be formed between anyone - family, friends, work mates, sports teams, whoever. In most cases it requires one enthusiastic senior partner to liaise directly with the trainer. It's that person's role to make sure all the partners are kept up to date with the preparation and progress of your horse. When there are more than four partners, under the Rules of Racing, one person must be appointed as the Racing Manager.
SYNDICATES - Licensed & Approved Syndicators
A syndicate is another common form of multiple person-ownership. Syndicates and Partnerships have many similarities although syndicates are registered differently, and operate under a different set of rules defined in the Rules of Racing. Syndicates must appoint an official Syndicate Manager who is then authorised to control the syndicate. The Syndicate Manager is responsible for communication between the syndicate members and the trainer, and accounting functions. Their role is vital to the enjoyment members derive from being involved. This is an option if you don't wish to take on the full expense of ownership straight away.
LEASING - An Alternative to ownership
Leasing provides the opportunity for people to race a horse without having to get the capital investment to purchase the horse to begin with. Essentially the horse belongs to the owner (Lessor) and he enters into an Agreement to Lease the horse out to a person or partnership or syndicate (Lessee) for racing purposes, for a percentage of all prize money earned. The lessee is responsible for the costs associated with the care and racing of the horse and collects the rewards from racing. Leases are subject to the registration of a formal lease agreement that is held by principal racing bodies. The terms of a lease vary from lease to lease, often with a right of purchase. At the end of the Lease term, the owner retains control of the horse for breeding, racing or sale purposes.
Licensed and Approved Syndicators
Regulations and licensing requirements differ greatly from country to country around the world. It is always imperative you ensure your Syndicator is authorised to provide product advice and deal in horse racing schemes.
All principal Racing Bodies will be able to provide you with a list of Authorised Syndicators who are licensed to market and promote shares to potential buyers.
Australian Securities & Investments Commission (ASIC) issues all approved syndicators with an AFS License Number to provide product advice and deal in horse racing schemes. A requirement from the lead regulator is all AFS Licence holders must provide potential investors with an approved PDS (Product Disclosure Statement). This document details unencumbered ownership and all relevant charges associated with the horse racing scheme.
New Zealand Thoroughbred Racing are the regulatory body, who under The Rules of Racing and in accordance with the Code of Practice covering public syndication of thoroughbred bloodstock, established under the Securities Act (Bloodstock) Exception Notice 2002, approve all authorised syndicators.
Syndications are subject to the rules of the National Horse Racing Authority governing the following procedures:
a) Every member must complete a required form to be accepted as a member of the Jockey Club.
b) A Syndicate (as opposed to a partnership) must have a minimum of 5 members, but not more than 20.
c) The Syndicate must nominate one person to act on it's behalf, but each Syndicate member (a Syndicate is regarded as a Juristic Person) is bound by any Syndicate decision.
d) The Syndicate must have a consistution and also be bound by the Jockey Club constitution, and every member must sign same. A Syndicate secretary must keep minutes of any meeting or decision within the Syndicate's own constitution, it can make it's own rules, regulations and conditions, so long as they do not contravene the Jockey Club's rules.
e) Syndicates may appoint a professional manager.
Once you have decided that you want to get involved in Racehorse Ownership, it could well be one of the most exciting and exhilarating experiences you will enjoy during your life. Many partnerships have succeeded brilliantly in this format.
The quality of advice that you receive in your early entry into buying a share in a racehorse, is likely to have a major influence on your future success and it is therefore important that you take your time choosing the right Syndicator, as getting along with your Syndicator is a very important part of the thrill of ownership. Often equine experts will tell you success with thoroughbreds, is all about selecting the right people.
Gavelhouse is very pleased to showcase some of the leading Syndicators and their unraced stock in the Southern Hemisphere, who are not only authorised to offer you shares in various horses, but also are some of the most established and successful syndication companies in the world today.
Whether you are buying your first racehorse, or are looking to join the winners circle by being part of a syndication, there will be a horse and budget to suit your needs - our approved syndicators are the best people who can assist you with getting started.
Good luck and enjoy the ride!
Here are some FAQ's about costs:
What does it cost each month to cover expenses & what does it include?
Based on a 10% share, you should allow NZ$250, AU$300, ZAR500 (this can vary depending on the trainer and location). This amount includes Training fees, transport, agistment (spelling), Farriers, Veterinary expenses, strapper costs, race day costs, supplements.
Are there any other costs?
There may be some unaccounted costs, which could include special nomination and acceptance fees for major races, depending on the level of achievement your horse has obtained and unforeseen medical bills for any injury sustained.
Is my account the same each month?
No, your costs will fluctuate depending on whether your horse is in pre-training and racing or in the spelling paddock. The average horse costs approximately NZ$30,000, AU$35,000, ZAR60,000 per year to train, so if you allocate your monthly average fee above, this will generally cover your share.
Who will send out my monthly account?
Generally, all accounts are sent to the registered owner or syndicate manager directly from the trainer, vet or spelling farm.
Does the Syndicator provide finance?
This facility is available with some approved syndicators.
Who is responsible for naming the horse?
When you buy into a yearling or an unraced 2YO, you are generally invited to submit a name suggestion for your horse.
Can I visit my racehorse?
Owners can visit their horses at the spelling farm or the trainers stable by making an appointment. Generally your syndicator will arrange "preview days" to view your horse at the designated times, plus you can watch them work early mornings and attend jump outs and trials.
Will my name appear in the Race Book?
Once a horse is officially named (registered), you will be registered as an owner in that horse and your name, or that of your syndicate will appear in the race book, based on 10% share ownership.
How do I receive Prize Money?
Generally, all stake money is paid out to each shareholder at the end of each month, that prize money is received from the various race clubs.
This guide does not constitute legal advice. We encourage you to seek your own professional advice to find out how the various Regulatory Authorities rules apply to you. It is your responsibility to determine your obligations.