At some point most regular racegoers have had more than a passing interest or desire to own a racehorse, or at least a part of one. Here we discuss the pros and cons, the costs, the highs and the lows of being a part of a racehorse syndicate. Owning your own racehorse is a dream for most racegoers. However, the costs involved can be staggering. Horse racing is called the sport of kings for a reason! The purchase price of a racehorse can vary from a few thousand pounds to millions of pounds, and the amount of money you are prepared to spend in no way guarantees success on the turf.
At last years 2023 Cheltenham Racing Festival, a horse called Hewick, which was bought for £800, ran in the Gold Cup. Hewick has already won seven races including the 2023 Ladbrokes King George VI Chase for its owner and has won more than £613,000 in prize money to date. At the other end of the scale, a horse named The Green Monkey, which was a descendant of the legendary Northern Dancer, was purchased for £12 million, was a complete flop, and was retired after racing only three times. You pay your money, and you take your chances in the racing game.
Also, the initial purchase cost of the horse is just the start. The annual cost of keeping a horse in training is circa £23,000 for a horse running on the flat and around £16,000 for a jumps horse. On top of this, there can be a multitude of additional costs for jockey retainers, trainer commissions, special schooling fees, among many others. Let’s not forget another £5,000 a year on average you will need to shell out on race entry and declaration fees, transport, and other ad hoc expenses. An example of the costs involved in the training fees of a National Hunt racehorse can be seen at Jonjo O’Neill’s stables here: https://www.jonjooneillracing.com/training-fees.html
Oh, and don’t forget the costs of your own racing silks or colours… They will set you back another £5,000 plus VAT. As the old adage goes: "How do you make a small fortune from horse racing?" Start with a very large one…
Fortunately, there are a number of alternative methods to become involved in owning a racehorse without incurring the significant costs of sole ownership explained above. The most common are:
Partnership: This is a shared ownership scheme that allows the participating partners to split the costs (and profits) according to the percentage of ownership each partner has.
Syndicate: This is when a number of buyers share in the ownership of the horse. The number of syndicate members can vary but is usually between 12 and 20. In most instances, the members of the syndicate do not know each other. The syndicate is run and managed by a manager who is the liaison between the trainer and the members. In most cases, the trainer of the horse has complete control and will decide if and when the horse runs, where it runs, what distance(s) it will run, who the jockey will be, and everything else concerned with the horse. This is racehorse ownership one step removed.
Racing Club: This is basically a very low-cost subscription service, usually paid annually, that allows you to become involved in racehorse ownership. Usually, a 0.25% share of the horse is purchased for one racing season only. It’s not uncommon to have circa 75 – 100+ subscribers per horse. Prices can vary from as little as £39 up to a few hundred pounds depending on the quality of the horse and who is the trainer. Such subscriptions are often sold as gift packs for birthdays or Christmas presents. Most syndicates offer stable visits to see the horse, but due to the high number of subscribers, a ballot is held to determine who gets the owners' badges when the horse runs. Normally, such syndicates operate via a dedicated website or portal where information and updates regarding the horse can be accessed and viewed. It’s a very low-cost, fun way of getting involved in the horse racing game. An example of such syndicates, what is involved, and how they operate can be found here: https://www.ownaracehorse.co.uk/index.php
Be it a horse racing partnership, syndicate or racing club there is both pros and cons that should be considered before taking the plunge and investing your money.
The Pros: It is a very easy and quick way to become directly involved in horse racing. Attempting to do it yourself from the beginning is a potential minefield. As you become involved, you will learn how things work behind the scenes. Horse racing is a complicated business, and it's very easy to lose your money very quickly if you lack experience or are uniformed.
Being part of a syndicate or club allows you to build contacts and gain knowledge. You will discover if owning a racehorse really is for you and what’s involved. If you like it and enjoy it, then you can progress to a partnership or maybe one day even become a sole owner. We have met and know people who have gone from zero to owning a string of racehorses in a very short time. It really is an exciting and addictive hobby.
Horse racing is a very social sport. As part of a racing syndicate or club, you will, without a doubt, meet people from all walks of life and backgrounds. In all likelihood, you will travel to new and different places to watch your horse run. It can be a lot more fun to do things as a group than as an individual.
Stable visits: You get the chance to visit the stables of the trainer of your horse to see it and also see other racehorses. It’s an opportunity and an experience that not a lot of racegoers actually get. It is fun. It is exciting, and again, it is very social.
The Cons: In our opinion, the biggest negative about being part of a syndicate or club is the lack of control or input regarding any issue with the horse. The honest truth is, and we know from our own experience, that you have zero say regardless of what you are told before you commit and sign the agreement. Usually, the trainer of the horse has total control and what he says goes. After the trainer, the people who run and manage the syndicate are next in line. Very rarely, if ever, will you be consulted on any aspect of the horse.
Summary: If it’s your first venture into any kind of racehorse ownership, then a syndicate or racing club is a great place to start. You will learn quickly and gain both contacts and knowledge as you progress while having a lot of fun, meeting new people, and enjoying new experiences.
Your financial investment and exposure is known and capped before you start. There will be no nasty surprises or unexpected costs that suddenly come out of the blue.
In our experience, the pros most certainly outweigh the cons, and it is a stress free way of dipping your toe into the big and exciting world of racehorse ownership.