Affordability of owning a racehorse - should you invest?

14 August 2019
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Affordablity of owning a racehorse 

Buying your very own racehorse takes the racing experience to a whole new level, and it’s surprisingly affordable. 

This year, the UK will see more than 1,500 recognised horseraces taking place across 60 courses. The world of horseracing is one of exhilaration, majesty and glamour, and, perhaps surprisingly, is suited to more budgets than you might think.
 
“The thrill of ownership is one of the best experiences. Once it’s got hold of you, it’s rare you can let it go,” explains Charlie Liverton, Chief Executive of the Racehorse Owners Association. “Many people become owners because of their love of the thoroughbred, the competitive spirit and the experience the race day itself brings, as well as the non-race-day experiences such as visits to the training yards and engagement with fellow owners at events up and down the country.”
 
Quite simply, owning a racehorse is fun. This is certainly the opinion of Tom Dascombe, a winning racehorse trainer who for the past 10 years has held the position of Trainer at Cheshire’s Manor House Stables, home to 90 horses and co-owned by ex-England footballer Michael Owen.
 
“I would always advise someone new to the industry to buy half of two horses, because you’re doubling your chance of having fun,” says Dascombe. “If you’re an individual owner and you go to the races and your horse runs badly, you’ve got nobody to commiserate with, and if your horse wins you’ve got nobody to celebrate with. If you have half a horse with somebody else, then the chances are you’re going to have a better day out.”
 

The trainer

Regardless of whether you go for sole, partnership or syndicate ownership, the trainer will be the most important part of this journey, and that includes the purchase. In Liverton’s words: “The trainer should come first.”
 
The horse’s programme will largely be down to the trainer; your involvement as an owner is being kept abreast of the horse’s progress and, of course, race entries – but you can really be involved as much or as little as you want. “Some owners want to know every time their horse blows its nose, and some are very happy for you to just ring them up and say the horse is running next week,” Dascombe says.
 
“Some will want to be involved in where you plan to run the horse, some just want the horse to have the best opportunity to run in the right race and others simply own a horse because they want it to run at their local track.”
 
Those considering ownership because of their love of the animal need not be concerned when it comes to its welfare, with some of the best stable staff in the world working in this industry. “We’re very lucky that British racing is one of the best regulated horseracing jurisdictions in the world, and that’s both during the horse’s racing career and afterwards,” says Liverton. Each race entry comes with a fixed levy that funds Retraining of Racehorses, an organisation that supports the welfare of horses after their racing career. 

Ownership models

The beauty of owning a racehorse is financial accessibility. You can enter into some form of ownership by spending as little as £5,000 or as much as £1.5 million.
 
Sole ownership – the more expensive option – gives you complete control of your experience, from what type of horse you buy, whom you want as its trainer and your choice of jockey colours – something that can get complicated when you have a group of 10 owners.
 
If sole ownership isn’t for you, though, partnerships and syndicates offer lower-cost options for those wishing to club together, but there are some key differences between the two, namely when it comes to registration, to which fees apply.
 
Partnerships require all members to register ownership – which comes with the added benefit of multiple owners appearing on the race card – and while registration is cheaper than for a syndicate, it is per horse. Syndicates dictate that all members are treated as co-owners, though only require the syndicator(s) (those who actually manage the syndicate) to register ownership, and while registration is considerably more expensive, it is not horse-specific.
 
And there’s no reason to suggest these multi-owner structures offer a too-many-cooks culture – in fact, quite the opposite. “Multiple ownerships are often easier to deal with, because you can’t be expected to communicate with 10 people via telephone,” explains Dascombe, who adds that in syndicates or partnerships with large numbers of people, communication often takes place through a simple voice message on WhatsApp – this way, the trainer can guarantee every owner gets the same message and information.
 
Co-ownership structures can also be used as a risk-reducing factor, if you’re really after that race-day win. Lots of people will group together, but instead of buying one horse, they’ll buy three or four. “They’ve got the equivalent of a horse each, but by spreading that risk they’ve got more runners, and four chances of finding a really good horse, instead of one,” explains Liverton. “The view often is, ‘if we club together, we’ll have more fun.’”

Ready, set, buy!

Owning a racehorse isn’t something you do with the expectation of a return on your investment, so if you’re looking to make money, this isn’t the opportunity for you. At best, the prize money will contribute towards – not offset – operating costs and reduce your annual expenditure. Alternatively, if you’re lucky, you may make a significant return with the sale of your racehorse, either in the UK or the burgeoning markets of Hong Kong, Singapore, Australia and the Middle East.
 
Prospective owners must first understand what they’re looking to get out of their ownership experience. If the off-course element – going to see the horse in the yard – is the appeal, finding a trainer within your vicinity is important. If the race-day experience is the pull – as is the case for those whom Liverton terms “the City-based owner of tomorrow” – then geographical location becomes less of a factor.
 
You should also consider whether you prefer national hunt racing (jumps) or flat racing, and choose a trainer based on your preference. “Then go and talk to that trainer and build up a level of comfort, whereby the experience provided by that trainer and their team will match what you’re looking to get out of your ownership experience,” says Liverton.
 
Dascombe’s final piece of advice? Do it for fun. “To any person who comes to me and says they’d like to buy a horse, I’d say make sure you make the most of it and enjoy it, because you can’t guarantee that you’re going to get a winner. Lots of horses do make an awful lot of money for people, but the higher percentage just cost people, so go in with your eyes open,” advises Dascombe. “And if you do have a great racehorse, well, that’s a bonus.”
 

Cost after purchase

Buying a racehorse – or part of one – is just one element of the finances you should consider. The cost of ownership beyond purchase tends to be broken up as follows. 

 

Registration

  • Fees based on type of ownership must be paid to the British Horseracing Authority (BHA). Sole ownership registration fees can reach above £300, partnerships above £350 and syndicates above £550.

Training

  • Depending on whether your horse is trained for flat or jump racing, base fees range from approximately £18,000 to £28,000, according to trainer Tom Dascombe. There are, of course, additional costs, such as vet fees, jockey schooling fees and trainers’ commission.

Racing

  • In 2015, the average flat entry fee was £2,283 (the fee for jumps was significantly lower at £773). Jockey fees come in at an additional charge per race – £127 for a flat jockey and £173 for a jump jockey.

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