Syndicates grab share of glory
Highclere Racing's owners are reaping the reward of their investment, writes Ronan Groome
Published 22/08/2010 | 05:00
Buying a racehorse isn't easy. Owning a racehorse isn't easy. And being successful with a racehorse certainly isn't easy.
But like most things in life, people have found a way round the problem and found a way of making money by offering a service to do so.
If you managed to get a look at any of the big race meetings from England over the past few weeks, you may have noticed distinctive light blue colours with a navy cap first past the post more than once, then to be greeted by a number of people back in the parade ring looking like they have just won the lottery.
Well, they may as well have. Harbinger earned over half a million pounds sterling and the accolade of the world's highest-rated horse in training for his 11-length romp in the King George, while Memory catapulted herself to the top of the 1,000 Guineas market with the lightning turn of foot she showed at Goodwood, and Approve landed his second Group Two of the year last week in the Gimcrack at York, taking his earnings to over £160,000, and still only a two-year-old.
So who are these lucky people? And how are they so lucky? Well, when you look at it, it's actually quite simple. They are all members of Highclere Thoroughbred Racing, a company that specialises in putting together small groups of people to share in a number of top-quality racehorses. It enables the owners to enjoy racing at the highest level, at the top meetings at Royal Ascot, Newmarket, York and so on, breaking the cost barrier and taking away the intimidation and confusion associated with becoming a first-time owner.
Set up by Harry Herbert back in 1992, Highclere Thoroughbred Racing quickly became Europe's leading syndicate company due to its phenomenal early success, which included the purchase of two champion sprinters Lake Coniston, bought for 22,000 guineas and sold on for £2.5m and Tamarisk, bought for 75,000 guineas and sold to Coolmore for £3.5m.
Early success reached a peak with champion filly Petrushka, which became the first syndicate-owned horse to win a Classic, went on to be sold for a world record £5.25m. And it was Derby day, in 2005, that changed the face of Flat-racing ownership when Motivator, owned by the 230-member Royal Ascot Racing Syndicate, managed by Herbert, took the Derby with a scintillating performance.
Herbert sees his company as a hand-held and cost-effective way for people looking to get into ownership. Highclere place a huge emphasis on personal service, and Herbert devotes a lot of time to making each syndicate member feel like the actual owner. Members can go and see their horse and chat to the trainer at any time, and they are always kept up to date with e-mails, texts and phone calls. It is perhaps these characteristics that have seen Highclere Thoroughbred Racing become the success it is, with people subscribing from all over the world.
There are around 20 syndicates organised and managed by Highclere Thoroughbred Racing that own two horses or more each currently in training. Herbert is aided by his brother-in-law and well-known bloodstock agent John Warren, who has been mainly responsible for buying the horses for Highclere since the beginning in 1992. The two of them go to all the big sales every year, with an aim to buy 20 top-class yearlings for in and around 100,000 guineas. The yearlings are then brought back to Herbert's Highclere Stud near Newbury, where they are broken and then made available for current or potential owners to see on an open day yearling parade in October.
Alex Ferguson, Jodie Kidd and Simon Cowell are all well-known personalities involved in syndicates, but Highclere Racing is certainly not all about the wealthy: 20 shares in the Masquerade syndicate, which owns Memory and another horse as well, cost less than £12,000 each for 20 lucky people. Most of the shares get sold in June and syndicates vary between 10 and 20 shareholders, while shares vary between as low as £6,000 up to a maximum of £36,000 and most syndicates will separately own more than one horse. People wanting to invest in a horse won't know the people they will be syndicated with, so it also gives people the opportunity to socialise with other racing people.
Once the set fee is paid at the start, subscribers enter into a contract which sees them as a part-owner of the horse, with Herbert and the rest of his team acting effectively as the racing manager. Herbert makes the decisions regarding trainer selection, and decides when the horse should be sold on. Highclere are predominantly a selling business.
Subscribers will never see a training bill, vet fee or entry fee after they have paid up at the start, which is a far cry from what sole racehorse owners experience. It is estimated that it currently costs over £25,000 a year to train, insure, travel and vet one horse in the UK, which is fairly similar to what it is in Ireland. In addition, the average price of a yearling at last year's Tattersalls October sale was 114,000 guineas. For the same money that it costs to train one horse for one year, a Highclere owner can enjoy three 100,000 guineas animals with all training fees paid through to the end of their three-year-old career.
Past successes have laid the foundation for the company to grow, and this season has been the most successful thus far; Approve's Group Two victory at York was the 28th winner of the season and ninth Group race win for the Highclere syndicates. And while Harbinger's retirement is a disappointment, the 12 lucky syndicate owners still have the consolation of a piece of whatever this year's King George winner makes when Highclere sell him on for stud duties.
The devastating performance in the King George was widely regarded as one of the best performances seen at Ascot in 50 years and his retirement comes nine months after Sea The Stars was valued at £60m, Harbinger's value won't get close to that -- he was unraced as a two-year-old and only won over a mile and a half, no shorter -- but syndicate owners can expect at the very least, more than a fairly healthy return on their £36,000 investment, on what has been a record season for Highclere Thoroughbred Racing.