Partnerships provide management and leadership from industry professionals, so partners can focus on enjoying the perks and benefits of ownership. Lower costs and risks associated with the Partnerships enable many to participate where they otherwise could not.  All partners, regardless of their percentage ownership, can enjoy many of the benefits that come with the title of owner including: access to the paddock, trainers and jockeys. 

Many racing enthusiasts join partnerships to fulfill a dream and experience life on the inside of the racing world.  For some, it is all about making it to the winner’s circle and the possibility of owning a piece of that next great horse. 

Partnerships, or syndications, vary in cost, benefits and other important items.  Research and references are important and perhaps the most critical factor in selecting a group to partner with is the level of trust and comfort with management.  Partnerships can vary significantly with respect to communicating with partners, sharing information and being available to meet and discuss strategies. 

Finding the right partnership to work with can be a challenge.  Here are some Frequently Asked Questions that might help the process:

Q.  What are some important things to look for in a partnership?

A.  We suggest focusing on the following items when interviewing a partnership:

1) Management - speak to the owners/managers of the partnership to determine if their philosophies are in line with yours.  Get a sense of their openness to communicate and to being available. 

2) Expertise - assess the quality and experience of the team, especially trainers.  Statistics are important, but experience and position in the industry is critical.  Finding an organization that has brought together successful professionals is important, and combining that with a firm that provides a personal touch can be the difference.

3) References - perhaps the most important thing you can do is ask to speak to 3-4 current partners.  it is the best way to learn about the "intangibles" including the overall experience.  Is this group serious about succeeding?  Are they fun to work with? Do they have an open door policy and are they detailed and frequent in providing information and updates?

Q.  How are expenses and profits handled?

A.   This can vary greatly among partnerships.  Ideally, each partnership should be a separate corporation, often an LLC.  All income and expenses of the partnership are distributed equally among the partners in proportion to each partner's equity percentage.  On the cost side, depending on whether a horse is actively training, monthly costs to maintain the horse may range from $2,000 - $3,500 with each partner responsible for his percentage share.

The hope, of course is that earnings from purses more than offset these costs.  Below is an example of how purse money may be distributed:

There are of course differences among partnership firms, and many factors can affect the financial picture.  There are no guarantees that a partnership will be profitable, and typically all money invested is at risk.  But teaming up with a group that makes solid business decisions is important.

Q.  How do partnerships vary?

A.   There are a number of options available that range from low priced "claiming" partnerships to groups that invest in some of the best prospects in the industry - and the price differences can be great.

So cost is one key differentiator - geography is another.  Some look for partnerships that  manage horses close to their home so they can attend races more frequently - others look to race in the major markets like the NY or California circuits - regardless of where they live.

Size of the partnerships can greatly impact the experience as well.  Larger stables that may have 100's of partners may provide many options, but likely can not provide a personal relationship.   Smaller stables may not have as many offerings to choose from, but owners will likely "feel" much closer to the operation and have the ability to be more involved.

Tips and Other Considerations

1) Diversify!!!   Once you decide what organization to work with, consider taking your budget amount and spreading it over several horses.  If the Partnership you are working with requires a minimum share percentage of 10% - ask about spreading that 10% over 2-3 horses.  Many organizations will accommodate this, but you do need to ask.

2) Budget - When assessing your comfort level with a budget amount keep in mind that a horse that is actively training may have expense of $2,500 - 3,500 per month.  Make sure your share of this cost is in line with your personal budget.  Winnings may offset these costs, or better yet provide a profit, but understanding potential costs are important.

3) Goals - While your dreams may include winning the Kentucky Derby and owning a horse worth 50 million dollars, it is important that your primary goal in joining a partnership is to experience all of the joys of thoroughbred racehorse ownership.  If your mindset is right, you won't be disappointed.  Not to say dreams can't come true...someone has to win the Derby!