Thoroughbred Horseracing Partnerships : A Complete Introduction
Have you considered a thoroughbred racehorse investment, but you had no idea where to begin or whether it would be affordable? If you have ever been curious about this, you?re in good company. Many potential investors think about buying an interest in a well-known thoroughbred racehorse. In reality, the best-known thoroughbreds don?t have investing shares available, but there are others that have horseracing partnership opportunities available.
The investment opportunities offered by thoroughbred horseracing partnerships are shares in the partnership that can be as small as 1% of the partnership up to as much as 45% of the partnership. However large your ownership is in the horse will determine your share percentage. This also is a representation of your costs and earnings.
By joining a horseracing partnership, you reduce your amount of inherent risk from 100% to an amount equal to your percentage of ownership in the thoroughbred. For example, if you wanted to buy a small interest to get your feet wet and get a feel for the industry, you could purchase a share as small as 1%. If on the other hand, you have been around the industry for a while and feel comfortable with your financial position, you could purchase a heftier share of up to 45%.
In the United States, there are many stables with available horseracing partnerships and syndicates that are open to co-ownership investments. The rules and management style of each of these partnerships will differ. Before investing in a partnership or syndicate, become familiar with several of them in order to choose the best one for your specific goals in investing.
A few things to consider about syndicates or partnerships:
* Does the group have your intended share percentage available? For instance, some groups may not have shares available of less than 5%.
* Is the share price of the partnership based on only the cost of the horse or is it based on a cost plus a markup?
* Does the partnership charge any fees for management?
* Will you be responsible for monthly costs that are for more than the upkeep of the horse? For example, there may be advertising costs due. While advertising can be helpful, it can also be expensive.
* Will the managing partner be available to you, and will that partner be willing to meet with you before and after the contract is signed?
There are a lot of investment opportunities associated with thoroughbred horseracing, but there is also plenty of risk. It is possible to lose your investment as easily as profiting from it. But by joining other owners in a horseracing partnership or a syndicate, you share the risk with others as well as the costs.
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