In the world of horse racing, shared ownership is a growth business. Al Senter talks to one of the founders of Highclere Racing, whose blue-chip reputation has done much to revive the idea of syndicates in the UK
Newbury racecourse, beside the main railway line from Paddington to the West Country, is enjoying one of its less hectic days. Intermittent showers persuade the sparse crowd to take permanent shelter within the towering stands. But in Highclere Racing's private box there is excited chatter. Its instantly recognisable light blue silks with dark blue armlets and cap are represented by two horses this afternoon—the unconsidered Altar, and the hot favourite Treat, who on all the available evidence, should make short work of her rivals.
Whoops of disbelieving joy, when Altar is cajoled to victory by a nose, at generous odds of 16-1, turn to despair when Treat performs with the enthusiasm of an arthritic donkey. Long faces gather in the unsaddling enclosure to hear the post-mortem from trainer Mick Channon, once an England football international. Scoring goals in World Cups suddenly seems much easier than trying to fathom the enigmatic nature of the thoroughbred racehorse.
Highclere Racing, described as "the Rolls-Royce of racing syndicates" by one of its adherents, is the brainchild of Harry Herbert, the second son of the Queen's late racing manager Lord Carnarvon, and his brother-in-law, bloodstock expert John Warren. Herbert is very much the public face of the syndicate: Warren allows his well regarded judgment of a horse's potential to do his talking for him.
Herbert compares Highclere to a luxury goods company: it's at the top of the market, owning 39 potentially top-class horses spread between 21 syndicates, each with 10 to 20 members. Shares can cost anything from £7,500 to £30,000, depending on the individual syndicate and the number of syndicates one wishes to join. One member estimates she spends £16,000 a year on her interests in three horses belonging to three different syndicates. This sum covers all expenses including management and training fees, vets' bills, transport costs and the other myriad costs that racehorse ownership entails.
It was while Herbert was in the US that he first became interested in multiple ownership. "I was working in Kentucky and I saw limited partnerships in action and I was impressed by how professionally they were run," he says. "In Britain, costs were continuing to rise but prize money wasn't keeping pace—I felt there was a definite market for properly run syndicates."
Initially supported by two wealthy businessmen, Herbert launched Kennet Valley Thoroughbreds in 1988 and got off to a good start when two horses bought for the Cartier Million race finished second and third, bagging the firm £300,000 in prize money. Highclere Racing was launched with Warren in 1992 and, despite the recession, quickly earned itself a reputation for the astuteness of its purchases and the racing record of its representatives.
In flat racing a horse reaches its peak at the age of three and the five British Classics; the 1,000 and 2,000 Guineas, the Oaks, Derby and St. Leger are all restricted to three-year-olds. When Herbert and Warren cast their eyes over the juvenile parade at the yearling sales, they are looking for a specific type of horse. "We're looking for a good conformation and a pedigree that will mature as a three-year-old and hopefully be good enough to contest a Classic," says Herbert.
The statistics are impressive. Highclere runners have, so far, earned £2.5m in prize money and 25 per cent were sold on at a profit. The average purchase price of a yearling paid by Highclere was £45,516 and the average sale price was £141,6000. Since 1992, Highclere has spent £13.6m on bloodstock, but sold them for £18.4m. And during the 2006 flat season, 60 per cent of Highclere horses either won or were placed in their races.
"Belonging to a Highclere syndicate is not just about going racing," argues Herbert. "It's also about staying in the Jockey Club Rooms in Newmarket and about being out on the gallops early on a misty morning. It's exciting and it gets people hooked. You watch your horse exercising and you begin to feel something of the massive anticipation building in advance of the race. I've seen CEOs of blue-chip companies so moved by the experience that tears have started to run down their cheeks."
Scarlet Leatham has been a member of several Highclere syndicates over the past decade and is an enthusiastic advocate. "I can't recommend Highclere highly enough. You always have a good time whether you have a horse running or not. You go to the stables, you see your horse working on the gallops and you build a rapport with it. Highclere offers a very personal service and you feel well looked after. There are disappointments in racing, of course, but the good days are fantastic and the highs are terrific."
Whether or not the spread of syndicates has made racehorse ownership more democratic, and less the preserve of the landed gentry and millionaires, is debatable. Glancing round the Highclere box at Newbury, there is an air of discreet prosperity rather than conspicuous wealth. To be able to afford the average £16,000 outlay and to be free to come racing on a weekday afternoon implies self-employed affluence, early retirees with a comfortable pension, or inherited wealth perhaps. But there are no stereotypes. Herbert points out that Highclere also has a number of celebrities among its ranks, including the rugby union players Lawrence Dallaglio and Mike Tindall, and the actor James Nesbitt.
"My colleagues in Highclere come from all backgrounds, although they're all professional people," says Leatham. "Going racing is a bit like playing a round of golf. You're out in the fresh air. There's a social element and a betting element and you have an immediate bond with the people you meet because you have a love of racing in common. I get very excited when our horses are running. I'm a screamer and so my husband insists that I watch the race from the other end of the grandstand."
Highclere may be the industry leader but it operates along similar lines to the many other multi-owner partnerships that have sprung up in recent years. Figures from racing's governing body, the British Horseracing Board (BHB) indicate that the fastest growth in ownership has occurred in multi-owner partnerships. While the overall number of registered owners has risen 4.8 per cent from 8,898 in 2002 to 9,329 in 2006, multi-ownership has grown at three times that pace from 6,055 to 6,904 (14 per cent). With the average annual price of keeping a horse in training said to be in the region of £16,000, the benefits of shared ownership and shared costs are obvious.
For most syndicate members, the pleasure of owning a share of a couple of racehorses far outweighs either the potential prize money or the probable profit when the horse is sold in the autumn of its three-year career. BHB industry marketing manager James Oldring stresses that racehorse ownership should never be anything other than an enjoyable pastime.
"Let's not pretend that racehorse ownership is a sound investment. It is not," he says. "People should think of belonging to a racing partnership as a hobby with an outside chance of bringing a financial reward. Instead, it has a huge social function; you become part of an enormous group of like-minded people and that is one of the bonuses." Even with more than £100m of total annual prize money, he says, the average return for a UK owner is between 23 and 27 per cent of outgoings.
Herbert and his small team appear to be happy to go that extra mile to provide a good service to their membership. "We act as racing managers and we try to give our members an experience that is as close as possible to what a sole owner would receive," he says. "One of the biggest questions facing people who come into ownership for the first time is, 'who do I trust'? Back in the late 1980s, racehorse syndication was a dirty word. Too often it was badly run and frequently it was rather shady. We've worked hard to prove that it needn't be that way.
"We're encouraging a new wave of potential owners. We've made it much more accessible and we've helped to counter some of the bad publicity that racing has received recently by promoting a much more positive aspect of it."
The chatter in those private boxes is clearly set to get louder.
Taken for a ride
British Horseracing Board (BHB) industry marketing manager James Oldring has some sound advice for those considering a syndicate
"Choosing a trainer is a bit like choosing a school for your child," he explains. "Make sure that you'll get on with your trainer and with your partnership manager. Ring up your potential trainer and speak to him or her."
Not all of us have deep enough pockets to join one of Highclere's syndicates and claim a piece of a potential Derby winner. So what are the alternatives? "You could do worse than have a share in a sprinter on the flat, who'll turn up at the racecourse and run week in, week out," says Oldring. "But short races can be very competitive and there are always hard-luck stories. So it might be better to take a share in a National Hunt horse, although it will run less often, and in the winter. It depends on when you'd rather go racing—in the sunshine at Glorious Goodwood, or on a rain-swept February afternoon in Folkestone. The choice is yours."
This month, the racing world decamps to York where the prestigious three-day Ebor meeting takes place on the historic Knavesmire. Two years ago, Folga, a three-year-old filly syndicated by the BHB in a competition, won a valuable sprint at this fixture at odds of 14-1. According to Oldring, one of the syndicate members bashed the bookies so hard that day he was able to buy a new bathroom suite from his winnings and the fixtures and fittings are now known as the Folga suite in her honour. What greater glory could a racehorse have?
For a partnership directory listing the facilities that each trainer has, showing their approximate training costs and the good horses they have trained in the past visit: www.welcometoracehorseownership.co.uk
