Taking the Reins of Investment Opportunities Phoenix AZ

And they’re off! A female racehorse known as Nicole’s Dream thundered to victory on the racetrack 17 times in three years to win more than $750,000—more than double her expenses during that time, Michael Faber, manager of Dare to Dream Stable, a racehorse syndicate based in Illinois, said. Throughout the filly’s racing career, her owners were able to visit the stables, observe warm-ups and practice runs and experience the thrill of the winner’s circle. Their participation in her success was possible because of a partnership established through Dare to Dream Stable.

A syndicate allows investors to own shares in a racehorse, splitting the costs of purchase, training and maintenance between several partners. This not only makes Thoroughbred ownership accessible to those who cannot afford a high-caliber horse alone, but offers an excellent opportunity for those who prefer to diversify their investments across multiple horses. A partnership through a syndicate takes much of the pressure off investors by providing accommodation, training and management of the horse’s racing career.

Syndicates originated with a man named Cot Campbell, president of Dogwood Stable Inc., founded in 1973. “I bought a horse with a couple of friends,” Campbell said. “[I] conceived the idea of doing a limited partnership, which had never been done in racing....I was told that you couldn’t do that, but I didn’t know any better and I did do it...and the next thing I knew a lot of publicity had been generated about this new concept.”

Syndicates allow investors to diversify their investments across multiple horses Today, Dogwood and Dare to Dream are two of many such syndicates that offer investors shares in potential champion Thoroughbreds. Such organizations typically mark up the horse before selling shares, retain a small share themselves and partake in the winnings. However, each syndicate approaches partnerships a little differently.

After keeping a 5 percent interest in each horse, Dogwood Stable divides the remaining 95 percent into four 23.75 percent shares in a general partnership. Dogwood partnerships are racing only, as the stable does not participate in breeding. A horse is sold—for a profit, if all goes well—once his racing days are over, Campbell said.

Dare to Dream Stable has a flexible investment approach, Faber said. “We typically offer...anywhere from $1,500 to $25,000 and more....We try to have something for everybody,” he said.

Another syndicate, Team Valor International, has a third approach. “We limit the extent of anybody’s participation [in one horse] to 10 percent, as we encourage our partners to spread their risk over several horses if possible,” Barry Irwin, president of Team Valor, said. Team Valor’s partnerships are all in the limited liability company format to provide an extra level of security to investors, Irwin said.

Some groups may charge extra management fees or offer a professional's services to help plan investors’ free...

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