Syndicate Funding
Typically the cost of keeping and training racehorses is one of the major factors responsible for the growing popularity of syndicate ownership.
The partnership clearly needs income for expenses to be met and the Agreement provides funding from the following:
- Regular monthly payments from each member, normally to be paid on the first of each month by standing order. This figure is currently from £390 for each 10% share held.
- Prize money and sponsorship. Any income the horse may earn by win or place money and under the terms of a sponsorship agreement from which the horse may benefit.
- VAT is reclaimed and added to the syndicate kitty.
- Net sale proceeds – when the syndicate is terminated.
Expenses in some months may be higher or lower than the members’ contributions, but the most important assurance is that the members know from the outset what their monthly commitment is.
The costs involved in training your horse and the expenses the syndicate has to meet vary from month to month and can include the following:
- Training and Keep
- Shoeing and Veterinary Services
- Jockeys and Entries Fees
- Gallop Fees
- Insurance – all our horses are insured for the duration of the partnership
- Management fees and expenses
- Transport to race meetings
- Miscellaneous (stable staff presents, photos, accountancy fees etc)
Members will not be asked for more funds during the first 12 months.
Following this the manager may have to advise the members of any increase in the monthly payment to meet increased overheads, but in the past this has often been kept at the same level for over a four to five year period, with prudent management.
The Partnership Agreement provides that any deficit when the syndicate is terminated is met by the Syndicate Manager of HP Racing – the members are not liable for this.
Prize Money Distribution and Returns on Your Investment
Prize money is added together with members’ payments and treated as income.
Dividends are paid out as follows:
- At the end of each accounting period when there is a surplus of income over expenditure. The manager will pay out a dividend after allowing for future liabilities or as the members may determine.
- When a syndicate is terminated, all surplus of income, which includes sale proceeds over expenditure, will be paid to the members after accounting for debts and liabilities of the syndicate at that date, in the ratio of the members’ shareholding.
- An interim dividend may be paid out to members before the accounting date is due but this is to be at the sole discretion of the manager.
This is common practice, particularly in relation of VAT which has been refundable since 1993 both on expenditure and costs paid by each member for their share.
Through the years we have had winners and placed horses at over forty courses.
Owners’ Complimentary Badges
We will always ensure that each registered owner gets a complimentary Owner’s Badge when their horse runs.
We have a very good relationship with most of the racecourses we patronise and whilst there are occasionally restrictions on the number of badges allowed at big meetings like the Cheltenham Festival and Royal Ascot, the system works very well.
We endeavour to make sure each paying syndicate member of the partnership has an Owner’s Badge. Any extra expense for badges is usually met by the funds of your horse.
Jockeys
Everybody of course has their favourite jockey – we have used many of the best over the years including William Buick, Hollie Doyle, Tom Marquand, Jim Crowley, Ryan Moore, Nico de Boinville and James Bowen.
In the past we have been delighted to have had winning associations with the likes of: Sir Anthony McCoy, Barry Geraghty, Richard Johnson, Mick Fitzgerald, Kieran Fallon, Richard Quinn, John Reid, Willie Carson, Lester Piggott, Joe Mercer, Steve Cauthen, Pat Eddery and Walter Swinburn.
The trainers are responsible for booking the jockeys and obviously where a jockey is retained by a certain stable, they would normally be the rider.
Racecourse Hospitality and other benefits
There is no better way to come and see your horse run than in the comfort of your own Box with lunch and tea. We are often able to arrange hospitality facilities for our owners when we have runners and although this does not happen every time our horses run, it is something we aim to arrange for the enjoyment of our owners.
Obviously it depends on the racecourse and the availability at the time but has proved extremely popular over the years – win, lose or draw.
The cost of this hospitality and entertainment is met by the funds in hand of your own horse and is included in your monthly syndicate funding.
We have had some memorable days at Cheltenham, Goodwood, Sandown, Huntingdon, Leicester, Warwick, Kempton, Newbury, Newmarket and Lingfield, to name a few.
We also had for a number of years a very generous facility from Goodwood racecourse of a chalet at their main Glorious Goodwood meeting and owners of all our horses are always made to feel welcome and enjoy what is always a spectacular day’s racing.
New to HP Racing owners has been exclusive invitations to the Osborne Gallery, to preview equine art exhibitions and has proved very popular.
Also available to HP Racing owners, a behind the scenes day at the leading yearling sales, Tattersalls at Newmarket, with Bloodstock Agent Anthony Bromley. A fascinating glimpse of what goes in to selecting potential future stars.
Private visits arranged to leading studs, including Whitsbury Manor Stud and Juddmonte Banstead Manor Stud, to view the top class stallions.
Sale Proceeds
When a partnership horse is finally sold (always by a majority vote from the members), the subsequent net sale proceeds are added to the syndicate account and divided amongst the members pro-rata of share held.
Retiring From A Syndicate
The procedure for a member to retire or opt out of a syndicate is clearly laid down in the Syndicate Agreement and is as follows:
A retiring member must inform the Racing Manager, who will offer the share for sale to the other syndicate members.
Should no syndicate member wish to take over the retiring partner’s share, the member may then sell the share outside the syndicate and find a buyer through the normal channels which is primarily the member’s responsibility – although HP Racing will be happy to advise.
In the event that the majority of the members wish to retire from a syndicate, the horse would then be sent to the sales to dissolve the syndicate or sold privately if the majority agree.
