What to Know Before Buying Shares in a Racehorse & How Much it Costs
If you’re considering investing in a racehorse and want to know more about buying shares, the costs involved and the risks associated with owning a racehorse, the article below outlines what you should know before taking the plunge.
Understanding Racehorse Ownership Shares
Owning a racehorse is a fairly expensive exercise, so many people choose to invest in a racehorse through buying shares. When you buy a share in a racehorse you are part of a syndicate of other shareholders who jointly own the horse, which makes it a more cost-effective option.
In a racing syndicate, each shareholder owns a portion of the horse, with shareholders splitting the costs of training and upkeep of the horse. The dividends or income from the horse can be split amongst the shareholders in a variety of ways, depending on the terms of the syndicate.
Benefits of Owning a Racehorse
Apart from the financial benefits of owning a share in a racehorse, such as prize money, there are many other advantages such as:
• Being part of an exciting and exhilarating world of horse racing.
• Enjoying the camaraderie of a syndicate, and being part of a team.
• Society visits to the horse and the chance to train it in a unique environment.
• Social events, such as a day at the races (e.g. Derby, Grand National etc), private hiring at racing events and exhibitions etc.
Risks of Owning a Racehorse
Owning a racehorse is not without its risks – it is an inherently risky activity.
• Injury or illness of the horse – As a racehorse owner, you have to have veterinary cover for the horse, in case of any injuries or illness, which can be costly.
• Risk of underperformance – Even with the most talented horses, there is still a possibility that a horse may not perform to its potential.
• Fluctuating market for horses – The value of a horse, and therefore the value of your share, can fluctuate significantly.
• Lord Haven’t You Heard syndicates – Some syndicates may not be particularly well managed, and you may not get the return of investment you’re expecting.
How Much Does It Cost To Buy A Share In A Racehorse?
When researching how much it costs to buy a share in a racehorse, it’s important to consider both the upfront costs and the ongoing costs associated with owning a racehorse.
Upfront Costs
• Purchase Price – The purchase price of the horse is the initial outlay, and is generally agreed before the purchase.
• Veterinary Fees – This can include pre-purchase exams and any other additional tests.
• Training Fees – This includes the cost of transport and accommodation if necessary.
Ongoing Costs
• Feed costs and veterinary care – This includes supplements, bedding and veterinary fees.
• Farrier and transport costs – This includes the cost of transport to race meetings and visits to the stud farm.
• Jockey and horse insurance – This includes insurance to cover any injuries, illness or death of the horse.
• Race preparation – This includes the cost of training, as well as any additional riders and staff required.
• Race entry fees and stable fees – These include the cost of entering a race, as well as stable fees.
• Syndicate / owners representative fees – Depending on the terms of the syndicate, you may have to pay an owners representative fee.
Racehorse ownership can be both exciting and rewarding, although it’s important to be aware of the risks involved. Before taking the plunge and investing in a racehorse, make sure you understand the upfront and ongoing costs involved.
It’s also important to make sure you’re investing in a syndicate that is well managed, so that you can be sure of getting the return of investment you’re expecting. With the right approach, investing in a racehorse can be a great way to enter the exciting world of horse racing.
