Oct. 22 (Bloomberg) -- Highclere Thoroughbred Racing, the syndicate that owned the world’s top-rated horse Harbinger, will sell out all its shares next year, Managing Director Harry Herbert said.
“We’ve had tremendous demand this year, having had the success we’ve had with Harbinger but also with the (other) Royal Ascot winners,” Herbert said in an interview at the annual parade of yearlings in the grounds of Highclere Castle, his Victorian gothic family home in Newbury, England.
Highclere, which puts together ownership groups for racehorses, this season produced a company record 41 winners, including three at Royal Ascot. It has made more than 1.3 million pounds ($2.1 million) in prize money for its part-owners, who include actress Elizabeth Hurley and Manchester United manager Alex Ferguson. The syndicate is currently ranked fourth on the owners’ list for total prize money won this season.
For the price of part-ownership of a horse, people have the chance to participate in a sport dominated by Sheikh Mohammed bin Rashid Al Maktoum, the ruler of Dubai and the world’s biggest racehorse-owner, and Irish millionaires John Magnier and J.P. McManus.
It costs about 20,000 pounds a year on average to train a racehorse. Highclere offers shares ranging from 6,950 pounds to 36,950 pounds a year, which includes all the costs, including training fees, vet and feed bills. Any prize money will be shared by the syndicate owners, while further profits may be made from stud fees and from sales.
It’s also possible to make no money at all.
“If your intention is to make money, then probably nobody should ever invest in horses,” Bill Oppenheim, a bloodstock and breeding expert who has followed the industry for more than 35 years, said in an interview.
“But if you like horses, then there are ways to manage your investment -- given the economics of the business, which are not great as far as owning racehorses is concerned,” said Oppenheim, who is a columnist for the Thoroughbred Daily News.
Census, a Highclere horse in which Hurley owns a share, won his first race in Bath last weekend as the actress watched with her family.
Harbinger was rated the world’s best racehorse after he won the King George VI and Queen Elizabeth Stakes at Ascot in July by 11 lengths in a record time. The colt, which cost 189,000 pounds three years ago and was owned by a syndicate of 12 people, accumulated more than 700,000 pounds in winnings during his racing career. They included victory in the Hardwicke Stakes in this year’s Royal Ascot meeting in June.
After winning the “King George,” Harbinger was hurt in training and was sold to Japan to take up stud duties for “a huge figure,” Herbert said in an interview in Newmarket, England, on Oct. 6. “Twelve owners will have an enormous pay day,” he said at the time.
Herbert expects to sell all of Highclere’s 10 syndicates, made up of 19 horses in total, by the end of this week.
“That’s probably half a million pounds worth of yearlings more than in the previous year,” he said. “We haven’t seen a downturn, maybe because we are at a level that is still very affordable to people.”
Herbert said part of Highclere’s success is related to John Warren, the company’s chief horse-buyer, who has been scouting 100 horses a day in the past six weeks to fill the 10 syndicates.
“I’m trying to find the champion out of very immature, young horses,” Warren, who is also bloodstock adviser to Queen Elizabeth II, said in an interview. “It’s a matter of trying to put all of the pieces of the jigsaw together before I finally make the decision.”
Warren said he selects horses on their temperament, pedigree, coats, length and muscle tone.
“In the business of talent-spotting, there are probably 50 to 100 people in the world that are quite accomplished at doing that,” Oppenheim said. “John would rate among the very top rung of them, he’s got a very good record.”
“Our horses cost an average of 100,000 pounds or so,” Warren said. “It wouldn’t be impossible for Sheikh Mohammed or John Magnier to spend 2 million pounds on three horses. If we do one thing well, it is that we buy with caution. We take the view that they are an expensive commodity and don’t want to make mistakes. We spent a tremendous amount of time de-risking and taking the negatives out.”
Erol Ezen, who buys and sells shops on London’s Oxford Street, was one of dozens of potential part-owners who checked out the yearlings at this week’s annual parade of young, untrained racehorses at Highclere Stud, located a five-minute drive from Highclere Castle.
Ezen spent 16,950 pounds on a stake in a 20-share syndicate consisting of two horses that cost 105,000 pounds on average.
“I’ve always loved horseracing,” said Ezen, who owns stakes in six different horses. “I haven’t actually sat down and worked out the cost. But I don’t expect to make any money at all. Being part of Highclere is an incredible experience. It’s really good fun. If the horses win, then that’s a bonus.”
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