Collective Fun – the growth of breeding syndicates

It has been recognised for years now that syndicates are the way forward for expanding the ranks of owners. The likes of Kennet Valley Thoroughbreds, Middleham Park Racing and Nick Bradley Racing have become part of the fabric of the sport in Britain, and new clubs are springing up all the time.

The bloodstock industry has been slower to grasp the benefits of shared investment, though, even when it has been obvious for a long time that the number of breeders is plummeting, and that there is a pressing need to find new people to own mares and foals – or, more to the point, shares in them at a smaller cost.

However, breeding clubs and syndicates have started to grow in number in recent years, and the successful example set by Newsells Park Stud should have accelerated the launch of more in the future.

Newsells Park Stud’s racing and breeding funds are the brainchild of tech entrepreneur Graham Smith-Bernal, who bought the Hertfordshire nursery lock, stock and barrel in 2021.

The first such syndicate was launched last year, and its portfolio contained the blue-chip broodmares Beautiful Timing, Espressoo and Sibila Spain, the two-year-old Sea The Stars filly Hatysa and a certain three-year-old filly by home sire Nathaniel named You Got To Me, in whom the stud had bought a half-share from Valmont after she won a Kempton maiden on debut in the autumn of her juvenile campaign.

“We had a lot of people ask how they could get involved with the breeding side”

You Got To Me put the Newsells Park Stud racing and breeding fund’s name in lights when she won the Irish Oaks last summer and again when she sold to Amo Racing for 4,800,000gns at the Tattersalls December Mares Sale, despite the best efforts of Smith-Bernal to keep hold of her.

“It all stems from the racing syndicates that Graham introduced soon after he bought the stud,” says Newsells Park general manager Julian Dollar. “We had a lot of people visit the stud, fall in love with the horses and surroundings, and ask how they could get more involved with the breeding side because of that.

“That’s why the racing and breeding fund was launched. It allows people to get involved with our business model of buying mares, mating them as well as we can while being commercial, and seeing where we are after three or four years before making a decision about whether we need to keep them or move them on.

“It’s exactly how we do things anyway, but with other people involved. We’re 50 per cent shareholders in everything, so our goals are very much aligned.”

The first investors, who paid £100,000 for each share, enjoyed a charmed introduction to syndication, thanks to You Got To Me’s exploits.

“Graham thought it would be fun to put her in the syndicate and we all had the most amazing year with her,” says Dollar. “It was a dream start to the venture, having a filly win a Classic and sell for a fortune.

“Mind you, I’m not telling tales out of school when I say that we had hoped not to have to sell her, and breed from her ourselves in the future, especially when she’s by Nathaniel and there’s an emotional connection. But of course if you get the opportunity to make a nice profit it’s hard to turn it down. We and most of the investors are business people at the end of the day, after all.

“The market was so hot last year that the partners saw an opportunity to sell, and took it. Graham was desperate to keep her, but the price simply went beyond our reach. He gave it a bloody good swing, though.”

He adds with a laugh: “Don’t worry, I’ve been at pains to tell the syndicate members they’re never going to have it as good as that again.”

Another Classic winner might be hard to emulate, but the quality contained in the racing and breeding fund 2025, which had almost sold out at the time of writing, gives the next round of investors a decent chance of success.

The portfolio is comprised of the broodmares Art Of Magic and Zasha and the Listed-winning Sea The Stars four-year-old filly Grand Stars, purchased for €800,000 at Arqana in December, as well as four two-year-old fillies, all siblings or offspring of Group 1 winners: a Frankel full-sister to Without Parole, a Frankel three-parts sister to Waldgeist, a Siyouni half-sister to Legatissimo, and a daughter of St Mark’s Basilica and Talent.

“Those two-year-old fillies are unbelievably well bred and are all really lovely individuals,” says Dollar. “People might not expect us to syndicate them but doing so is mutually beneficial, as it has given us an opportunity to race some or our best bred horses that we would have otherwise have had to sell.

“It’s a fantastic chance for us to retain those potentially important future broodmares for the stud, and to race them with some great people.”

Dollar admits to being wary of the concept of sharing ownership of the stud’s prime stock, but has come around to it – and now preaches its virtues with the zeal of a convert.

He says: “I worked for the Thompsons at Cheveley Park Stud, Dr Tony Ryan at Castleton Lyons in Kentucky and then Klaus Jacobs at Newsells Park Stud, and they were all fabulous people who did their own thing, breeding and racing privately with their own ideas. I didn’t have much experience of syndicates, or public ownership, so I wasn’t sure about it all.

“At one point I did say to Graham that we’re a stud, but are racing more of our colts than fillies, and that it didn’t make sense to me. But he’s something of a visionary who can see how things need to evolve and adapt in order to survive and thrive, and he assured me that we needed to move in a different direction.

There aren’t enough people who can participate at that level on their own

“I see it now, it makes sense for our finances and our enjoyment. It’s been fascinating to see the pleasure that syndicates bring, and Graham has kept it to people with similar interests who will enjoy each other’s company. They’ve had a great time visiting the stud, joining events and going on all sorts of tours. I think I’d taken for granted how thrilling breeding horses is to outsiders.”

Dollar adds that the syndicates have the potential to be beneficial not only to Newsells Park Stud, but also to the wider industry.

“It’s great that there are some big new players spending a lot of money at the sales, and along with the high-rolling owners who have been in the game for years, they’ve made the top end of the market look incredibly healthy; but you do have to question how robust it is in the middle,” he reasons.

“There aren’t enough people who can participate at that level on their own, but if you can encourage people of decent net worth to come in as part of a collective, they might just have the confidence to get involved.

“We need those people for our business to succeed, and by going in half with them on some of our best horses, we’re showing how serious we are about getting them in. Hopefully, if they enjoy it, they’ll come in on another fund, and if they really get hooked they’ll make investments of their own. That’s why someone like Graham, a British breeder committed to the home industry, has been such a positive influence since he’s got more involved.”

Taylor Made in Kentucky has also seen the light when it comes to syndicating breeding-stock. It’s hardly surprising that it should have innovated in this area in America when the company slogan is “with us, you’re family”.

Taylor Made already operated the successful shared racehorse ownership programme Medallion Racing – whose silks have been carried by Donnacha O’Brien’s brilliant filly Porta Fortuna – and it has recently added Premier Mare Packages (PMP) to its offering.

“The initiative was started to accomplish two things,” explains Taylor Made president and CEO Mark Taylor. “First, we wanted to bring new people into the breeding business with quality mares within a model that more people could afford. Secondly, we’re concerned about the shrinking foal crop and the ripple effect it’s having throughout our industry.

“There is a lot of emphasis put on developing new racehorse owners, but we saw a void in developing new breeders.”

Taylor says no parameters have been set regarding the price-point or profile of the PMP mare acquisitions.

He continues: “To date, our lowest-priced purchase was $115,000 and our highest price was $650,000. There are 17 mares on Taylor Made now which are in the PMP programme. We look for mares who can produce foals that will fit Saratoga as well as the first three books of Keeneland September.

“Part of our philosophy is to allow the investors to participate at a higher market level within a group than they could afford individually.”

PMP is still relatively new, but it has already enjoyed some good results with the mares in its portfolio. A Charlatan colt who was the first offspring of Diamond Ore, a Tapit half-sister to Arrogate in whom Clearsky Farm is a partner, sold for $550,000 at the Fasig-Tipton Saratoga Sale last summer, and the next evening a Not This Time filly out of the Street Cry mare Amen Sista made $610,000 in the same ring.

That must have been music to the ears of PMP investors, who are a diverse group according to Taylor.

“We have approximately 35 partners in the PMP mares,” he says. “Some are involved with multiple mares. The group of investors includes 15 totally new people to breeding thoroughbreds, ten who used to have their own independent breeding programme but scaled down or stopped breeding altogether, and seven who invest in addition to having their own mares.”

As with the Newsells Park Stud racing and breeding fund, the syndicate has been a boon for winning over newcomers to the delights of breeding.

Taylor says: “Someone famous once remarked that breeding thoroughbreds is like playing chess with Mother Nature, and PMP allows new investors to learn about a process that has been challenging horsemen for centuries.

The programme also gives people behind-the-scenes access to a working farm

“The ability to come to our farm anytime they like to see their horse is one of the best things for the clients. They have access to come and bring friends and family, too. Seeing young foals running in the field and knowing that you had a hand in creating something with so much potential is truly unique.

“The programme also gives people behind-the-scenes access to a working farm. They get to learn about the systems and processes we have in place to give our mares the best possible chance to produce a top-class racehorse.

“We believe that we’re only scratching the surface with PMP. Many people are looking for opportunities to create experiences that can be life-changing. We provide investment opportunities but also learning and lifestyle opportunities that are very family-friendly. Some of our partners love to bring kids and grandkids to the farm for visits.”

Medallion Racing has dovetailed with PMP, in that some of the people who owned shares in racehorses can now also call themselves breeders.

“There has been some crossover,” acknowledges Taylor. “Brad McNulty is from Indianapolis and originally was more into mares but then branched out into our PMP platform. Dave Barger is another great example. He is from Michigan and originally reached out through our website inquiring about Medallion. Since then, he has branched out and recently bought into an American Pharoah mare who is due to foal in the next few weeks.

“Many of our customers love learning about the whole spectrum of the thoroughbred industry. Having both breeding and racing partnerships allows us to get people involved on both sides of the business if they’re interested.”

Newsells Park Stud and Taylor Made’s partnerships are pretty high-end, but budding breeders who also want to get involved but don’t have such deep pockets needn’t despair, as the National Stud in Newmarket last year relaunched its breeders club after a hiatus.

There was “a great reception” to the National Stud breeding club when its return was announced last year

It purchased two mares for the syndicate at the sales last winter: Ocean Paradise, a well-bred daughter of New Approach whose first two foals are winners, and Hot Flush, a Siyouni mare from the family of Pour Moi. Both were in foal, to Pinatubo and Kameko respectively.

The cost of a one per cent share in the mares is £1,850, which includes the purchase price, 2025 covering fee and first year’s keep, with £750 per year payable each year thereafter. Investors receive regular updates on their stock and can visit the farm and take part in various social events.

“It’s not the first time the National Stud has done something like this, there were breeding clubs in operation until the economic downturn in 2010,” says the farm’s head of bloodstock Joe Bradley. “We thought the time was right to bring them back and reinvigorate them for the modern world.

“The club is whatever anyone wants it to be, really. We’ve welcomed some people who have never been into breeding before – which is great as it ticks the box of providing access to the industry, one of the pillars of our business – but we’ve also encouraged lapsed breeders who would like to come back in at a financially sustainable level, and got other current clients who want to support us in other ways on board.

“It’s been a great success so far, touch wood. Ocean Paradise and Hot Flush are nice, exciting, commercial mares and both safely foaled in the last few weeks. They are going to be covered by our stallions here now – Ocean Paradise by Bradsell and Hot Flush by Lope Y Fernandez.”

Bradley reports that there was “a great reception” to the National Stud breeding club when its return was announced last year.

“Shares sold quickly and the members seem to love it,” he continues. “We have a Whatsapp group that’s always very active, with lots of information, photos and opinions shared.

“Plenty of them have come to the stud to see the mares, and they get a lot out of it. Even better, they bring their partner, family members or friends who might watch racing but have never been involved, and they enjoy it too, and will hopefully be inspired to get involved at a reasonable level as well.

“The members are involved in all of the decision-making, we talk through every process with them, and happily they seem to agree with most of our opinions on what course of action to take.”

Bradley is another advocate of the mutually advantageous nature of breeding syndicates, and would like to see more of them introduced.

“It’s satisfying to bring new people into the breeding industry, but everyone has a responsibility to do that, not just us, and it’s good to see a lot of other studs have embraced clubs too,” he says.

“It’s a great thing to do, and I think it’s worth saying that we actually found it pretty easy to get enough people to sign up; it’s good for other farms who might be in two minds about doing it to know that it’s feasible.

“It’s also good for the National Stud too, of course. We own 75 per cent of both of the new mares, so we’ve been able to expand our broodmare band while also bringing new people into the game. It works for everybody.”

There aren’t many market initiatives that don’t have a catch, or stories without a downside, but breeding clubs appear to be one. Fingers crossed they can help arrest the worrying decline in foaling numbers.