Important Facts About Syndicates and Horseracing Partnerships
January 28th, 2009
Companies that put together syndicates and horseracing partnerships do so in order to split the costs related to the horse by allowing several people to own a share of the horse. That share must be purchased by anyone wanting to belong to a horse racing partnership. The price paid will be a specific percentage of the horse?s cost and it may include a mark up if desired by the horseracing partnership company.
If you become a racehorse partner, the costs you pay will be determined by the share that you own. This means that the expenses each month are divided according to the size of each partner?s share of the partnership. The shares that the partners own are each a percentage of the total ownership of the horse. Not all of the shares are the same size. Someone with a larger share will pay more of the expenses than someone with a smaller share. But, someone with a larger share will also earn a larger share of the profits.
Each horseracing partnership or syndicate operates slightly differently based on policies set forth by their respective company or managing partner. Because there are variables across the board, it would be in your best interest to obtain data from several likely partnerships and compare what they have to offer before making a final decision. By doing some research and making comparisons, you will have a better feel for where you would like to make your investment.
Some other things you need to know when comparing syndicates include:
* What are the minimum share and maximum share amounts that are currently available?
* Is there a management fee involved? If so, what is the amount? Who is the partnership?s current managing partner? Are the other owners able to contact the managing partner?
* From where do the horses come? Does the racing stable breed them or purchase them from auctions or private sales?
* Do you have access to see the horses pedigree information?
* Does this particular syndicate race regionally or nationally?
* Which tracks do they plan to race on?
* Will the syndicate or partnership help you to get your license?
* What documentation will you receive at year-end for tax purposes?
* Are racehorse partnership shares based on a percentage of the actual purchase price of the horse or do they add a mark-up?
* What is the length of the co-ownership contract?
* Is insurance included as part of the monthly expenses?
* How do you leave the partnership should you choose to do so?
As you can see, there are many things to consider when choosing a horse racing partnership. Approach each syndicate with a list of questions and a checklist so you can make an objective decision. By doing some research and making comparisons, you will be in a better position to choose the best horse racing partnership in which to make your investment.
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