What You Need to Know About Horseracing Partnerships & Syndicates
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.
There are different rules in place for every horseracing partnership or syndicate out there. Each group is governed by either the company that runs the partnership or by the managing partner. There are so many possibilities involved in these partnerships, doing some comparison shopping is recommended. To do this properly, ask several partnerships for data in order to find out what you have to gain from each. By comparing syndicates before making your decision, you will be making a far more informed choice.
Some other things you need to know when comparing syndicates include:
* What are the minimum share and maximum share amounts that are currently available?
* Can owners contact the managing partner? Who is it? Is there are fee for managing the partnership? How much is the fee?
* 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 the syndicate you’re interested in race nationally or only regionally?
* Can you get a list of racetracks they are planning to race?
* Does the partnership / syndicate assist you in obtaining a 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?
* If you should decide to back out of the partnership, how is it done?
As this list shows, there are many considerations when picking the best horse racing partnership. As you decide between the available syndicates, ask plenty of questions and use a checklist. This will allow you to easily compare the syndicates to each other and to make the best possible investment decision.