Money: How to play the horses and win
Instead of just betting, you could part own a racehorse, says Faith Glasgow
Sunday 12 September 1999
But what if you want to back the horses rather than the shares? Horses are a bigger gamble but, for the same price as a portfolio of shares, you can.
Steve Edmunds had always followed the horses, but as a bartender on the QE2 liner he did not anticipate much likelihood of owning one - until a chance conversation with a QE2 guest, the horse trainer Lady Anne Herries (wife of Colin Cowdrey), gave him the idea of pooling resources through a syndicate of staff.
He rounded up a group of 10 enthusiastic colleagues, each of whom contributed pounds 750 towards the initial outlay on a horse, and went shopping at Lady Anne's stables. Eventually he picked on an unknown quantity, a partly- trained two-year-old called Taufan's Melody, and bought him for pounds 4,750.
"Lady Anne told me that he could be something or he could be nothing," he recalls. The All At Sea syndicate reluctantly coughed up another pounds 750 each to cover training costs, registration fees, silks and other initial expenses.
But when he did race, several months later, Taufan's Melody turned out to be something in quite a big way - he won his first race at Goodwood by six lengths with odds of 20-1 and has since won another nine races, earning more than pounds 600,000 in prize money for the syndicate.
The winnings have enabled All At Sea to buy two more horses, though they have proved less successful than Taufan's Melody. Mr Edmunds has since started the Cottage Inn syndicate (named after the pub he now runs) and bought Meilleur.
Twenty years ago, horse racing syndicates were the province of wealthy investors. But times have changed, and Mr Edmunds and his friends are part of a new trend: now the British Horseracing Board (BHB) reports a marked increase in the number of syndicates run by ordinary folk.
John Penny, who is based in Sussex and now runs four syndicates, started in 1994 by attending an owners' seminar run by the BHB. It gave him useful guidance on how to go about setting up a partnership and the practicalities of owning a horse. After that, rather than club together with friends, he advertised for his first partners in the Racing Post - he ended up with syndicate of 12 members who each contributed pounds 400 a share, as well as monthly running costs of pounds 120.
The BHB emphasises, however, that it is important to start off with the right frame of mind: only put money into a syndicate that you can afford to lose.
So how can you get involved, and how much do you need? If you want to dip an experimental toe in horsey waters, membership of a racing club is a good way to start. These clubs - lists of which are available from the BHB - may have hundreds, or even thousands, of members, and may own several horses. And at an average cost of pounds 200 a year they won't unsaddle your bank balance.
Racing partnerships are much smaller in scale and, therefore, offer a considerably greater level of involvement. If you don't fancy starting from scratch with a bunch of mates, you may be able to buy shares in a horse through a trainer - once again, the BHB can provide a list of suitable trainers.
When it comes to buying a horse, you can either select a trainer with whom you feel comfortable and ask him or her to find one for you, or go to a bloodstock agent, who will usually find a horse at auction. An agent will charge 5 per cent commission, but has a lot more time to dedicate to the quest.
How much you spend depends on the size of the syndicate, but the BHB says that the average cost works out at around pounds 18,000. Then there are running costs, which typically total around pounds 15,000 a year. Split between 20, that amounts to around pounds 750 each, or pounds 62.50 per month.
The next owners' seminar will be held by the BHB on 27 & 28 September at Newmarket racecourse. It costs pounds 225 plus VAT (refunded if you buy a racehorse). Telephone 01753 441198 for more details.
IN THE SADDLE
What will the partnership be called? It must be registered with Weatherby's (01933 440077)
Which members (at least two) will be registered as owners?
How are shares to be split?
How often will capital contributions be made, and for what costs?
How will decisions be made over the horse's career?
What about insurance for the horse?
Will the partnership be VAT registered?
What will be done with any prize money?
Who will manage the accounts?
When and how will new members be admitted?
What happens if a member wishes to leave?
What are members' voting rights?
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