JG (or others) Question on partnerships
Duckgawd
Senior Member
Wanted to pick your brain and get some info on getting involved in a partnership, and maybe even dogwood or any other recomendations. As a follower for years of horse racing and always having the dream of owning one, i have turned to looking at a partnership as an entry point into the sport without sucha huge financial burden. With keeping a horse in training costing some where on the low end of 50k upwards from there, what is a realastic investment one would need to get involved in a partnership? And yes knowing that its for the enjoyment and thrill then an investment. Is there a minium % one needs to buy of a horse? Not that you or anyone else has to give specifics about your own endevours, just curious on getting some information on where to start and mabe a realistic intitial investment and a realistic number for ongoing expenses. Thanks in advance.
Comments
Your questions are quite difficult to answer with any level of specificity. A partnership or syndicate is a fine way to enter horse ownership, but make sure you know and trust those whom you are getting involved with. As a minority owner, you likely won't have too much say when it comes to decisions regarding a horse's race path.
Initial investment? Completely depends. You can find a group throwing in on a 10 claimer,or investing in a horse for a stable buying half a million dollar horses. Crunch your numbers, find out how much you are willing (and financially able) to invest initially and a yearly budget to maintain for stable fees, vet bills, etc. Remember, a lot of unexpected things may arise.
Make sure to get everything in writing detailing your level of involvement, what types of fees you are responsible for, what happens if the horse is sold, etc. There are a LOT of variables (again, going back to trusting those you are getting involved with). Good luck to you and hopefully you invest in the next Palace Malice!
Another point is whether you are getting a horse who is race ready, or one who will require more time and training. They all have the same costs.
The traditional partnerships like Dogwood sell a 1/4 share, or something like 23.25%, and the managing partner retains around 5%. Once the horse goes into training with a trainer, you are hit with a "Daily Rate", which can vary depending on your choice of trainers and where they are located. Naturally, it costs less to have a horse at the lesser tracks than it does to stable at Palm Meadows or Keeneland.
FWIT, the biggest change over the past 10 years or so has been the Vet bills. They have really gotten out of hand. Other costs are not as bad, but you need to remember that you are responsible for all costs, including the operating expenses for the managing partner. This is where it can become hairy, especially if you have a managing partner who looks at his partners investment as a subsidy for his life style. I won't mention names, but I did hear someone mention a guy named Barry?
Now a days, you can get involved with a first rate outfit for as little as 5%, sometimes lower. But you are probably getting a chance to have a real racehorse, something bred 5x to Mr. P/Northern Dancer bloodlines.
The flip side is getting in at a much lower level and having fun. You won't have much of a shot at running at the highest levels, but you can still have fun and your investment won't become a financial disaster if everything turns south. This is what I am doing now and its why I'm on the lookout for claimers who could be competitive this winter at Oaklawn. Let me know if anything looks good!
GL, Kenny