The idea of owning a racehorse will seem fantastical to many. It is an expensive and unforgiving pastime, costing large amounts of money for often very little return. Owners tend to be rich, able to cope with the slings and arrows of outrageous fortune that tend to accompany having horses running in races that they won’t win most of the time. Even so, there are ways for people with less disposable income to get involved with the weird and wonderful world of ownership, with taking part in a syndicate being one of the most obvious.
Syndicates tend to be groups of people that range from five to 20, who each pay an amount towards the ownership of a horse. The horse will race under the name of the syndicate and the jockey will wear their colours, whilst the syndicate itself will have a code of conduct that everyone that is part of it will have agreed to. Syndicates tend to have a lead agent, who is the point person for decision making and takes on the responsibility of the administration and the management of the horse and the syndicate in general, allowing others to take a back seat.
How Syndicates Work
In essence, a horse owning syndicate involves a certain number of people that all pay a set fee in order to own a horse. It really is that simple, with the main detail being in how they are operated. Some horses will come with 1% shares, whilst others will come with shares that are worth 25%. It is common for horses to have share offerings of between 5% and 10%, which are available to buy outright or between a group and continue to be sold until 100% of the horse has been bought up by the members that make up the syndicate.
Syndication is designed to allow numerous people to own a horse or part of a horse, which then gives them associated benefits. An example might be a group of five friends who come together to buy 5% of a horse, meaning that they own 1% each, presuming that they’ve paid an equal amount. This means that they are also responsible for 1% of the horse’s upkeep costs, which allows them to keep their overall expenditure down. Given the extreme expensive of horse ownership, this is a clever way of doing it for less money.
Why Use A Syndicate?
One of the most obvious questions that people will ask is why they would want to become part of a syndicate. Given the costly nature of horse ownership as a hobby, syndication is a much more cost effective way of participating in the world of horse racing ownership with other people who will share a similar interest. Not only this, but working with a licensed syndicator allows people that only have a limited experience, or no experience at all, in owning a horse to do so in what is a far less risky manner, trusting others to make the big decisions.
The day-to-day running of things is handled by the syndicate operator, meaning that you simply need to read your update emails in order to understand what it is that is going on with your horse. It is a great way of getting to understand the ins and outs of the horse racing industry under the expert guidance of someone who is experienced in it. Each syndicate will have its own advantages and benefits, but there are some that tend to be standard within the world of syndication, as follows:
- Regular updates on how the horse is doing
- Visits to the horse
- Sharing in any prize money
- A say in how the horse is trained and looked after
- The privileges of ownership on race days
Syndicators will usually have prior arrangements with trainers, meaning that they have good enough relationships with them to grant you more regular access simply because you’re part of a syndicate. They are often affiliated with several horses, simply because of how syndication works as a business model. Typically speaking, people will buy a horse or several horses at a market before then selling shares of the horses to others. There could be 10 10% shares available, say, or 20 5% shares, making it cheaper for them to afford the horse too.
Who Can Join A Syndicate?
In short, there are very few things that will stop you from being able to become part of a horse racing syndicate. As long as you haven’t been banned from taking part in horse racing by the British Horseracing Authority and are not banned from owning horses or anything else, the likelihood is that you’ll be entitled to join a syndicate. Syndicators are professionals and have associated licences, so if you’re thinking of buying a share in a horse then you’d do well to do your research and check the licence of the person selling.
Just because you can join a syndicate, of course, doesn’t necessarily mean that you should. You need to weigh up the costs and the downsides of being involved in ownership, given that you’ll often have to pay a monthly fee in addition to the initial share cost. Some syndicates will also be expected to take care of unexpected costs between them, such as vet’s bills or the cost of transporting your horse to a race. If they are put forward for a race in a foreign country, this can suddenly become quite an expensive hobby.
What Syndicate Owners Should Expect
There are a few things that people that are part of a syndicate can expect from their experience. For starters, some syndicates may allow the members to choose the name of the horse. This might involve all members being asked to put forward a name suggestion, at which point a vote will be taken by all of those involved to decide upon the winning name. Majority will rule, provided the suggested name is one that is allowed and passes through the vetting process offered by the British Horseracing Authority.
It goes without saying that each syndicate will be different in how it handles various aspects of the ownership of a horse. Never is this more true than when it comes to the dishing out of any prize money. Some syndicators will take a cut for themselves then divvy the rest out, whilst others will see every person involved in the syndicate get a cut that is equal to their share. Sometimes, when it is only a small amount, it is held onto by the syndicator in order to pay for numerous different things to do with the upkeep of the horse.
There are numerous different benefits that go the way of an owner on race days. It is typical for named shareholders of a syndicated horse to get a member’s pass for courses when the horse is taking part in a race, with guest passes also common. This means that you will be able to enter the course where the race is taking place for free, with access to other areas that are restricted for owners also expected. Should your horse win its race, you will be invited to the winners’ enclosure after the race is completed.
What Is Your Syndicate For?
One of the most important questions that anyone joining a syndicate will need to ask not only themselves but also the rest of the syndicate members is what the purpose of the syndicate actually is. In short, there are three main reasons why syndicates would be formed: to make money, to have fun or to own a championship racehorse. If you’ve decided to join a syndicate for anything other than the middle reason then you’re almost certainly destined for disappointment. Most owners ever see much money from a racehorse.
There have been countless people that have gone bankrupt trying to own a championship horse, so you’d be made to decide to join a syndicate for that reason alone. There are too few races and too many horses to ever have any sort of guarantee of success when you take to the field and that is without even thinking about the main races. You might dream of winning the Cheltenham Gold Cup with your horse, but unless you’ve got enough money to invest in some of the best horses on the planet, you’re probably not going to succeed.
Ultimately, this is probably the most important question that anyone thinking of buying shares in a racehorse needs to ask themselves. You would be much better off saving your money if you’re determined to win a championship race or to make money out of the whole thing. For some, though, the lure is too much to resist and the only question that you’ll want to ask yourself is how big a stake to buy. Obviously, the larger the stake is, the more say you’ll get to have in the horse’s outcome, but the larger your costs will be.