Having a flutter on race day is exciting, but how much more exciting would it be to partially own a winning horse? Around 1 in 244 Australians know that feeling, as research suggests that's how many of us own at least one share in a racehorse.
Read on for what you need to know about the risks, costs, and due diligence required before buying shares in a racehorse.
In this guide
How do shares in a racehorse work?
The most common way to own a share in a racehorse is through a horse racing syndicate. A racehorse syndicator purchases young and unraced horses and advertises them for syndication.
A common offering might be 5 or 10% shares, although smaller shares are usually available on request. The benefit of buying a share of this amount means your name goes in the book on race day as an owner, bringing with it all the race day owner perks.
Each syndicate member is typically responsible for their ownership. Therefore, if you owned a 10% syndication, you are responsible for paying 10% of the costs, but you’ll reap 10% of prize winnings.
Due diligence before investing
Like any investment, research is key. Before joining a syndicate it’s important to look into the background of any racehorse syndicators.
These are some of the key indicators to look for.
- An experienced operator with an established record in the industry.
- An operator who is a licensed syndicator and licensed through the Australian Securities Investment Commission (or is an approved promoter through another licensee).
- An operator who provides a Product Disclosure Statement that outlines all the details including ongoing costs and fees.
How much does buying a share in a racehorse cost?
The answer to this question varies greatly. The most expensive yearling sold in 2020 cost $1.9 million, but a share can start from a few thousand dollars.
Is a racehorse a profitable investment?
Yes and no. While it is possible to buy a horse for cheap and win big — netting the profits one can dream of — but generally a horse racing syndicate is not a sound investment.
Ongoing costs after your initial syndication and horse purchase costs, such as trainers, agistments, racing fees, vets and more, all add up quickly. Costs have risen substantially over the past couple of years.
Success in horse racing is often a matter of good luck, although technological advancements through racehorse breeding software could provide an edge for an especially diligent punter.
Where can you buy racehorse shares?
You can buy shares in a racehorse online with services like Bloodstock and Grand Syndicates, among others, but there are a few steps on the road to partial racehorse ownership.
Start by choosing a trainer and then look for a syndicator. If you are setting up your own syndication with family and friends, there is typically a setup fee of $275 per syndicate plus an annual renewal fee of $55.
If it’s your first time it’s best to seek advice from a professional bloodstock agent. The Federation of Bloodstock Agents Australia has 28 accredited members to assist you through purchasing a racehorse right through to the management of your racing or future breeding aspirations.
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