Overview of Racing Partnerships
The most common racing partnerships are structured as follows:
- A managing partner buys a horse for $80,000
- The horse is marked- up and syndicated for $140,000
- Four general partners buy quarter shares for $35,000
Each partner has paid a premium price for a share in one horse. Given the nature and difficulty of the racing business, each investor has a very low chance of recouping the investment.
I believe that there are three major weaknesses with this partnership structure, and I try to address them with the structure of the AliFyfe Racing Partnership
These three major weaknesses are:
1) The interests of the managing partner and the four partners are not aligned. The managing partner is in the syndication business and has made his profit up-front by charging the four partners a premium mark-up. The general partners are in the racing business and to make a return they need to cover the value of the horse, ongoing training fees and the mark-up on the horse.
2) The second weakness is that the general partners only have an interest in one horse. Given the highly speculative nature of racehorses (and the fact that most run fairly slowly), the chances of a successful investment are low. It’s much better to have an interest in more than one horse.
3) The managing partner, in order to make a viable business model, must put together a lot of partnerships. This of course means buying a lot of horses, which will mean that quality is compromised.
For any potential owner with limited funds to invest, the Alifyfe Racing Partnership structure offers the most potential for a successful horse and a return on the investment.
AliFyfe Racing 2018 Partnership Structure
AliFyfe Racing will form only ONE partnership each year. I believe that the structure of the partnership will provide potential investors with the best chance of getting a decent horse for a reasonable investment.
- AliFyfe Racing has purchased one horse at the Saratoga NY Bred Yearling sale in August 2017.
- Alifyfe Racing will also purchase two horses at the March/April 2018 Ocala sales.
Two of the horses will be trained by David Donk and based in New York at Belmont Park. The other horse will be trained by Michael Stidham.
AliFyfe Racing 2018 Partnership – Benefits
AliFyfe Racing is a fully paid up partner like everyone else. The interests of all partners are aligned and success or failure is spread equally.
For a similar cost to an investment in a one horse partnership, the partner now has an interest in three horses, which will significantly increase the odds of owning a successful horse and getting a return on the investment. Despite these better odds, it’s still a risky investment and partners need to understand that part and have similar goals to those outlined below.
There will only be one partnership. This keeps the buying process highly selective and uncompromised by the need to purchase many horses to syndicate. By limiting the quantity of horse we are buying, we are hopeful that we will be able to find quality horses that will give partners value for the money invested.
Partnership Philosophy and Goals
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- Pick great horses.
- Recognizing that investing in racehorses is risky, we maximize the potential to earn a return.
- Make ownership fun! Business can be fun, too.
- Constant updates on the progress of the horses.
- Arrange stable visits to see the horses and watch them train.
- Meet trainers and jockeys.
- Arrange visits to sales.
- Fun, fun, fun days at the races!
- Be in the paddock before the race. Dress up! Our horses will appreciate it.
- Champagne after the race, win or lose. Most horses lose more races than they win, so a positive outlook is always welcome.
- We are trying to strike gold and have a BIG horse!
There is no greater thrill in sports than cheering your horse down the stretch to victory and having your picture taken in the winner’s circle.
What other business can also offer this level of enjoyment?
Care to join the fun?
Contact us for more information.
