Del Mar Online Racing Community
Chat about horses, racing, and the industry.
We got in our first partnership 2 years ago. Today, we have a 2, 3, 4 year old filly, all with the same managing partner (separate LLCs) - all of the horses are based in S. Cali.
Here are a some considerations -
*** What is the experience of the managing partner and what is the track record
*** Look at the business model - all managing partners mark-up their horses...some mark them a lot more than others. I would lean towards a syndicate that the managing partner retains some ownership.
*** Which trainers are utilized by the partnership? I follow the S. Cali circuit - there are some successful trainers there that I would never consider having a horse I partially own
*** How are expenses billed...are they marked up? How are purse distributions paid out?
*** How are syndicates ended - specifically the money split and retirement plans (if not claimed)
*** There is a high probability your horse will be laid up at times...what farm does the managing partner utilize? I did not consider this before participating but have since visited the farm we use - it is an outstanding facility w/ great manager - http://www.magalifarms.com
*** Communication - this is important. We have frequent conversations, email updates and even youtube videos of every work.
*** Other items you may want to consider are insurance and taxes
Most partnerships I keep up with are purchasing horses at auction, except Team Valor. There are always smaller operations focusing on the claiming game.
Go in expecting anything can happen. Getting a horse to the track and into a race is a major accomplishment in of itself. Having a winner is even harder. This is a high risk adventure - it is possible to get in with someone with a great track record and end up with horse that may take a year to get on the track...meanwhile you will have your share of the expenses. And, once you get to the track the reality might be your $100,000 horse belongs in a claiming race. You have to be realistic - you have to put your horse in a race where it belongs. This happened to our 3 yr old filly...she was struggling to get that confidence from a win so we voted to drop her into $35-40k claiming from MSW. I felt based on her previous races a claim would be highly unlikely (almost everyone was in agreement). That one worked out - she won and was not claimed. Her next race was a starter allowance which she also won. Saying that someone could have read between the past performance lines and decided she was a good claim.
We have been very fortunate. Our 4 yr old filly is still running and will likely return a profit. It has been a roller coaster, though. Last year she had a chip removed and missed 7 months. And, even though she won a small stakes race this year it has been tough. She has raced against some very nice fillies, including Princess Arabella, Mamma Kimbo, & Teddy's Promise.
Our 2 yr filly was relatively inexpensive and is California bred so, she's eligible for some of that bonus purse money. She is unplaced (4th) after her first race but, she is working well and will stretch out in her next start.
As you can tell my preference is for fillies. In my opinion, although colts have more upside potential it also involves more risk. Once the decision is made that your cold has to be gelded just to get him to the track that upside potential is gone.
Last comment, even though the economy in general appears to be slowly recovering the thoroughbred auction economy is very healthy, ie auction prices are the rise.
Every partnership that I know of has markups....most partnerships that acquire horses at auction markup that cost vs recurring expenses. Let's run through the acquisition process for a horse -
1) Need cash on hand - a lot of cash these days
2) Team travels to the auction
3) Selecting bloodstock requires a tremendous amount of competency; we have used a team with decades of experience. There's lots of science based processes...conformation analysis, video stride analysis, pedigree analysis and even heart analysis. Ultimately it's a gut feel based on experience in addition to real analysis. (I don't have this except some pedigee knowledge...thus leveraging a partnership with this is great)
4) Team may or may not win (or even bid) on any horses; travel to the next auction and process starts over
5) If a horse is selected he/she must be transported back to the home track...or farm if there's more training to do.
The markup includes all of this work but, one has to feel comfortable with the markup. The biggest syndicator in the game also has one of the higher markups. My preferences is to work with a smaller operation.
By being part of a syndicate we reduce our risks while enjoying many of the ownership benefits. If you have the means, desire, expertise, time and risk tolerance you probably want to consider outright 100% ownership and skip the partnerships.
ever heard of a guy named peter miller? you can buy into horses with him that he bought at auction for his cost.
the guys that run your partnership are better than peter miller? BTW there are lots of top trainers that will do that.
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