What You Need to Know About Horseracing Partnerships & Syndicates
How does a horseracing partnership or horseracing syndicate work? There are companies that run horseracing partnerships and syndicates. These allow several people to own the same racehorse. For a person to join in with a horse racing partnership, the person must buy into the partnership by buying a share of the horse. The share is a percentage of the cost of the horse and sometimes a markup of that cost as determined by the horseracing partnership company.
If you become a racehorse partner, the costs you pay will be determined by the share that you own. This means that the expenses each month are divided according to the size of each partner?s share of the partnership. The shares that the partners own are each a percentage of the total ownership of the horse. Not all of the shares are the same size. Someone with a larger share will pay more of the expenses than someone with a smaller share. But, someone with a larger share will also earn a larger share of the profits.
Each horseracing partnership or syndicate operates slightly differently based on policies set forth by their respective company or managing partner. Because there are variables across the board, it would be in your best interest to obtain data from several likely partnerships and compare what they have to offer before making a final decision. By doing some research and making comparisons, you will have a better feel for where you would like to make your investment.
A few other things to remember during your comparison:
* What are the minimum share and maximum share amounts that are currently available?
* Is there a management fee involved? If so, what is the amount? Who is the partnership?s current managing partner? Are the other owners able to contact the managing partner?
* Where does the partnership get the horses? Are they purchased at auction, from private sales or are they bred at the stables?
* Is the pedigree information available to you?
* Does this particular syndicate race regionally or nationally?
* Can you get a list of racetracks they are planning to race?
* Does the partnership / syndicate assist you in obtaining a license?
* What kind of documentation will the partnership give you to help with tax preparation at the end of the year?
* Are racehorse partnership shares based on a percentage of the actual purchase price of the horse or do they add a mark-up?
* How long is the contract for co-ownership?
* Will your monthly fee include the cost of insurance?
* If you should decide to back out of the partnership, how is it done?
As is apparent, there are a number of considerations to keep in mind when deciding on a horse racing partnership. When approaching each of the syndicates that you are interested in, tale a checklist and question list with you. Then, compare each syndicate?s answers with the others. This will give you the information you need to make the best decision about your investment.
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