How to Own Shares in a Race Horse

For most of us, the idea of owning a race horse is pie in the sky. We might like the idea, but it’s incredibly unlikely to happen.

Owning any sort of horse is expensively prohibitive, what with the amount they eat, stabling fees, veterinary bills, and the need to keep them exercised; but owning a race horse has extra costs on top, such and transportation, any race entry fees, insurance, and of course, training and jockey fees.

If your horse then goes on to win sod all then you have forked out an awful lot of money that you are never going to see again.

That’s not a financial risk that your average joe or jane can responsibly take, so owning race horses tends to be the preserve of the wealthy, or moderately wealthy at least.

However, in these days of innovation and problem solving – and money making, let’s face it – there is a way that the likes of us can get in on the action and own a race horse, at least partially.

You have probably heard of syndicates, they exist in all sorts of things, and horse racing is one of them.

Traditionally, these would be private arrangements whereby a small group of friends or business people would pool their money to cover the costs, and each own a share of the horse relative to the amount of money they put in. The group would usually be relatively small though – say between 5 and 20 people.

The internet made bringing people together so much easier though, so now a syndicate can be hundreds strong, and full of people who own shares in the same horse but who have never met or even spoken to each other. F

or a very small cost, it is possible to become a shareholder in a race horse via one of these organised syndicates, and this is how they work.

What is the Difference Between a Horse Racing Syndicate and a Club?

Rather confusingly, there are a couple of types of shared ownership when it comes to race horses, and even more confusingly, the terms are often used interchangeably.

Officially though, they are two different things.

Over time, the lines between syndicates and clubs have been blurred as more and more joint ownership schemes and companies are dreamt up, all with different fee structures and the like.

In this article, we will use both terms interchangeably, but if you are interested in becoming a race horse shareholder, you should pay attention to the differences and go with the option that suits you best.

How do Race Horse Syndicates and Clubs Work?

Much like a business that floats on the stock exchange, race horse syndicates work by selling shares in individual horses.

They might look at the horse’s overall value, estimate how much it will cost to keep and train, stick some profit on the top as a fee for running the thing, and then split the final amount into a few thousand equal parts.

That would create several thousand shares in the horse that could be sold individually.

If we come up with a fictitious horse – let’s call it SharingisCaring – and make up some wildly inaccurate numbers, we might end up with something like this:

• Cost of horse – £25,000
• Training costs for 1 year – £12,000
• Other costs – £6,000
• Fee for organisers – £7,000
• Total – £50,000

So, they need to sell £50,000 worth of shares to redeem their costs and make some money, even if SharingisCaring never wins a race.

They could sell 2 shares for £25k each, but that would still be out of the realms of possibility for most people; or they could sell 50,000 shares for £1 each, but that would be nightmare to manage.

So they need to balance the number of shares they create so that selling them and keeping in touch with all the shareholders isn’t unmanageable, but at the same time they need to keep each share attractively priced.

A few realistic options might be:

• 2,000 shares at £25 each
• 1,500 shares at £33.33 each
• 1,000 shares at £50 each

Creating 1,500 shares leaves each share costing £33.33 which is not a very easy number to work with, so 2,000 or 1,000 shares would probably be best.

People could then buy as many shares as they were comfortable with, and would own a very small portion of SharingisCaring and be entitled to a percentage of any money it makes in the races.

If SharingisCaring was broken down into 1,000 shares and won £10,000 in its first race, each share would receive £10 of those winnings. Therefore, if you owned 5 shares you would receive £50 from that win.

Now, a lot of syndicates in particular limit the number of shareholders they will accept, which of course makes each share more expensive, but plenty make things much more accessible. In fact, with many schemes that split shares into the thousands, by buying one share you are only buying around a quarter of a percent of the horse, maybe even less.

They are all slightly different though, and we will go into that in more detail below.

Costs, Fees, and Benefits

Just as two businesses in the same field will have different approaches and market strategies, so do online racing syndicates.

There is no one size fits all description for the different types of shared ownership schemes, but even though they are all different, many have a lot in common.

Fee structures, syndicate size, and length of ownership are the three biggest considerations, and perhaps the easiest way to talk about them is to look at a few examples.

In most cases, you will find that there is nothing significant that one shared ownership scheme offers and another doesn’t, but the extent of each consideration can vary quite widely.

For example, while with one syndicate you might get access to 100% of the races your horse runs in and be able to visit the stables whenever you like, at another these things might be available only on a very limited basis.

Anyway, let’s look at a few different real world options.

Owners Group

Very large syndicate, very cheap, single annual payment, limited control and access

In business since 2014, Owners Group is one of the longest running and most trusted syndicate organisers of its kind.

They usually have between 60 and 70 horses working with lots of different trainers, including big names like Paul Nicholls, Nicky Henderson, and Emma Lavelle.

The company is aimed very much at everyday people with an interest in racing, rather than those who might be looking to invest large amounts of money.

The number of shares in each horse is usually set around the 2,000 – 3,000 mark, and can cost as little as £33. This buys 12 months of ownership with no other fees to pay, but if you want to carry on as a shareholder the following year there will be another, likely reduced, fee. This is because the initial fee also covers the capital to buy the horse in the first place.

The brilliant thing about Owners group is their transparency.

There is an up-to-date brief on each horse as well as full pedigree information, and a detailed cost breakdown of each share.

Looking at one horse as an example, WouldUbeWell, the £49 cost per share breakdown can be seen below:

So you know exactly what you are paying for.

Additionally, those 3,000 shares represent 100% ownership of the horse. So where some syndicate companies might only sell a portion of the shares to the retail market, Owners Group sell the lot.

The downside with this sort of set up is that you aren’t going to be able to get properly involved with your horse, because there are too many shareholders to accommodate.

That said, owners of shares can apply for owner’s badges when the horse runs, and these are issued by ballot (sometimes free, sometimes at reduced rates), and stable visits usually occur once per year too if interested.

Shareholders can sell out if they want to, so it’s not a huge commitment, and while shares are owned weekly updates on the horse are sent out along with betting tips when it runs, as well as videos of the horse in training. There may also be occasions when share holders are asked to vote on a big decision online, but ultimately, Owners Group have the final say.

All shareholders receive a shareholder certificate and welcome pack at the outset, so it’s a nice idea as a gift for a racing fan, or as a bit of fun for someone who wants to feel a bit more involved.

Dooley Thoroughbreds

Small syndicate, expensive, single annual payment, owners make decisions

Three brothers from Manchester who loved horse racing but did not have a background in the sport created this syndicate.

Their approach is to keep each syndicate small, with a maximum of ten owners per horse, so each shareholder gets to have more of a say in what goes on with their horse.

It’s a more hands on approach, and the ownership feels more legitimate than those where each share only costs £30-£50.

The cheapest entry point here is around £4,000 for the first year, then an annual fee of around £2,000-£3,000 for costs.

The reason the initial cost is higher is to cover the purchase of the horse, and of course, for a horse that has better prospects the fee cost could be much more.

So shareholders are buying in for 12 months at a time, but they are free to sell up after each year if they want to, for example if their financial circumstances have changed.

The benefit of larger shares between a smaller number of people, is that each owner has more direct access to their horse, its trainer, and the jockey on race days.

Free owner’s access to the races when the horse is running is always available, rather than having to apply for a random draw, and visits to the stables are possible too.

Newmarket Racing Club

Small syndicate, expensive, up front and ongoing fees, long term ownership, decision making

An interesting hybrid approach has been adopted by Newmarket Racing Club.

It’s a smaller operation working with just a handful of trainers and a more select stable of horses.

There are two ways to buy shares in horses with them:

• Outright ownership
• Lease ownership

Outright ownership is much more usual for them, and this works by paying an upfront fee to buy into the syndicate, and then a monthly fee that is equivalent to the percentage of shares that you own.

For example, one of their horses at the time of writing, a 9 year old gelding called Balgair, was available at the following rates:

% Share	Upfront Fee	Monthly Fee
2.5%	£445.00	£98.13
5%	£890.00	£196.25
7.5%	£1,335.00	£294.39
10%	£1,780.00	£392.52
12.5%	£2,225.00	£490.65
15%	£2,670.00	£588.78
17.5%	£3,115.00	686.91%

Alternatively, a much younger horse was only available from 5% shares starting at £2,950 up front and £190,19 per month in fees.

It would be possible to sell your shares to someone else, but they would be your responsibility until a buyer could be found.

The other option that is sometimes available, is lease ownership.

With this option, you are only signing up for a set period of time and for a fixed fee too, so there are no monthly costs or extra fees.

Whichever option you choose someone else is in charge of decision making, but since the number of shareholders is usually limited to around 20, opinions from owners are welcomed.

Owner’s badges on race days and stable visits are always available, plus, VIP hospitality at the racecourse is included.

Other Considerations

This is just three examples out of many many shared ownership schemes, all with their own little quirks and unique features.

Another, called RaceShare, works in a similar way to Owners Group but they also have ‘packages’, whereby an investor can buy a share in 4 different horses all in one go, and at a slight discount.

The idea is to make the racing season more fun by owning horses in more races, but without breaking the bank.

Another company, imaginatively named Racehorse-Ownership, do a similar thing, but instead of packages they offer a VIP membership which buys you 1 share in every horse on the site.

RaceShare also have their own online TV channel where owners can watch races that their horses are running in.

Many other companies offer free betting tips on the horses as part of the deal too, and not always just on the horses you own shares in.

Inside info and education in general are useful extras that can often be found though, such as the company giving their opinion on what fair odds would be for your horse.

Some even have their own merchandise such as umbrellas, jackets, hats and keyrings, although these are not usually free.

There will be other features and ideas out there, or that are dreamed up as the years go on, but the fundamentals are what your costs are, how they are spread out, how much input you have in the horse’s career, and how long you own the shares that you pay for.

Is Joining a Race Horse Syndicate a Good Investment?

Although it’s true that you can make money by owning shares in a racehorse, the likelihood is that you won’t.

Most horses don’t have long and successful careers, many never even win a race, certainly not one with a big purse, so as an investment it’s probably not a very good idea.

Despite the fact that you will be, by definition, and investor if you do buy into a shared ownership scheme of some kind, it’s best to think of it as a way to enjoy the sport on a deeper level.

Take advantage of the ownership benefits on race days, go to the stables and see the horses, talk to the trainers and the jockeys and be stimulated by reading the updates and insider info – but don’t do it to try and make money.

You can think of it like buying an experience day, but it lasts at least a year and comes in a few different forms.

You could say that those people paying more and joining smaller syndicates are making a real investment, but it’s all relative. Anyone who can afford to spend thousands of pounds on a 5% share of a horse probably has a lot more money than the rest of us.

However much you are willing and able to spend on buying shares in race horses, there’s nothing to stop you taking it seriously and thoroughly researching the horses available before you come to a decision on which, if any, to buy shares in.

This can be part of the fun if you like looking into pedigrees and form etc.