Wednesday, 15 October 2014

Our Reaction to Booming Bloodstock Prices – Building the Pipeline in Different Ways

I’m writing this while listening to the Newmarket Tattersalls sale on the computer in the background. While it is obviously great for the vendors and the bloodstock industry to be harvesting such returns, it is definitely a head-scratcher. We have had trainers and agents looking closely at both National Hunt horses and the yearlings for the Flat at the various sales, and they are staggered by how many distinctly average horses are realising such enormous sums. At the Derby sale in Ireland (where we bought The Fugitive), there were numerous store horses going through for €150k+, none more so than the procession of Yeats’ progeny who were bought back in by the Magnier clan. Again at the Goffs Orby sale, records were broken and that momentum has continued through Tattersalls Book 1 and into Book 2. At our own level, there is just no way at all that we can chase these prices, not that we would want to. It is becoming increasingly clear that the dominance of NH owners with Messrs. Henderson, Mullins and Nicholls means that when they clash, the prices rapidly escalate to the ludicrous. Equally on the Flat, there is a platinum tier of global owners for whom money doesn’t matter.

So as a result of all of this, in Owners for Owners it is time to take stock. We’re not prepared to pay the sums required, and equally not prepared to lower the quality standards. What is our current thinking?

On the Flat we’ve commissioned Karl Burke and his family to work with us through Book 2 and then the Deauville Arqana sale next week, where we had tremendous success last year buying our two 90+ rated colts, Lord Ben Stack and Jolievitesse, both of whom have won and shown more than enough promise to indicate that they could easily be winning Group horses next season. All the owners now have the Dante meeting at York pencilled in their diaries, and we’ll be disappointed if one of them doesn’t go for the eponymous race itself. We’ve also joined forces with one of our key owners, Tim Dykes, who is investing in buying a number of fillies, both to race and to breed. By doing this we have been able to increase the budget to a maximum of £80,000 (inclusive of commissions etc.) and this is going to be a joint ownership: 50/50 between OfO and Tim. That way our owners can buy into the horse in shares for less than a total of £40,000. Bearing in mind how well we have done this year, please let me know as soon as possible if you’d like to be involved. At the moment the plan is to race the filly for two years and then we would breed from her. We’ll be giving owners the options of buying in either to race only, or to race and breed.

For NH, I was very struck by some comments made recently by Dan Skelton, who is pursuing what he termed, “the Marks & Spencer supply chain model of building a supply pipeline”. That is something that we are also going to pursue. Rather than just buying ready-to-race horses, such as those who have won their point-to-points, we are going to invest in a number of foals and have commissioned top agents Aiden Murphy and Gerry Hogan to act on our behalf at the upcoming foal sale at Tattersalls in Ireland, week commencing 10th November; and also Anthony Honeyball and Rachael Green. We would then have three horses in the pipeline and can make decisions as they develop whether we retain them so that they come in to racing in two to three years’ time, or sell them in the normal way as store horses. While it is higher risk, we’re hoping that by buying three we will have at least one or two able to race for us at a lower total price than investing in equally high-risk store horses or paying over the top for the winning Irish pointer.

As you can see, therefore, there is a shift of emphasis where over time we may accommodate not just buying policy around “buying to race” but also “breeding to race”. The intention is to do this in a balanced and judicious way while still working closely with our trainers and agents to buy horses able to come in to training on a much shorter timescale. As ever, I’ll be circulating details of the next opportunities for owners to become involved with us as co-owners. Watch this space!

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