Is a Partnership Right for You?Our panelists discuss expectations, communication and transparency in partnerships
By Dana Byerly, Hello Race Fans Co-founder
In our Overview of Ownership, we noted that managed partnerships, also referred to as racing syndicates, “diffuse expenses while limiting exposure to loss.” If you’ve ever considered taking the plunge into ownership, those can be very attractive qualities.
But what should one look for in a partnership? What kinds of questions should one ask when researching a potential partnership? And what should one expect in terms of communication and transparency from a partnership? We’ve enlisted the help of three owner/operators of small, locally based partnerships to discuss these issues and more!
Ted Grevelis of Grevelis Racing (blog) is based at Canterbury Park and races at Tampa Bay Downs, Frank Vespe of That’s Amore Stable (blog) is based in Maryland and runs throughout the Mid-Atlantic region and Steve Zorn of Castle Village Farm Partnership (blog) is based in New York. Notably, all three started off as owners in a partnership before striking out on their own and all three blog about racing and ownership. In fact, I’ve had the pleasure of getting to know all of these fine gentlemen through various online communities, most currently TURF, an excellent place to find quality racing blogs!
On to the discussion, where our panelists speak frankly about ownership and expectations, along with providing some insight into and tips about what to look for, or not, in a prospective partnership.
Tell us a bit about your partnership, how long it’s been in operation, your focus and why you chose to start it. And, did any of you participate in a partnership, managed or otherwise, as an owner before starting your own?
I started as a small partner in a partnership group in California. We had a horse make it to the Cal Cup Classic in 2005 (he finished 5th) and we flew out for the race. We were in the walking ring at Santa Anita and, interestingly enough, our trainer was Doug O’Neill (trainer of I’ll Have Another). It was an awesome experience and when I got back to Minnesota I bought 20% of a small group to race two horses at Canterbury Park run by my friend, chart caller and bloodstock agent David Miller. Folks at work were really intrigued by what I was doing and eventually decided that they wanted to won part of a horse, too. I gathered up several of them (and their money) and went to David and he told me. “Ted, I don’t care for this part of the business, you put the group together, why don’t you run it?” So I did. Grevelis Racing was born then, in 2006.
We enlisted the help of Canterbury Park Hall of Fame trainer Bernell Rhone to claim our first horse (Bernell trained one of our partnership horses which is how I knew him). Fizzy Pop won three races for us before he was claimed away. A new group was created and we claimed Tabby Lane who has won 8 times for us over the past 2+ years. We have another group that bought a 40% stake in a 2-year-old filly names E Sveikata (“Kat”) who is getting ready to head to Kathleen O’Connell in Florida after prepping at Eisaman Equine. Hopefully you’ll see her at Calder later this summer.
Not every group has been successful (we had one maiden that would gallop all day the wrong way around the track but when you turned her around she’d throw her rider – she never made it to the races) and I’ve focused on claiming since that’s where we’ve had most of our success. I feel that we have a trainer who is an exemplary horseman and can improve on the vast majority of other trainer’s work so we try and claim low, win a few and sell even or high.
We’re small and stay that way. I try to have less than 10 partners in a group and be folks that I know or are referred by others. We raise about $20,000 per partnership and try and claim between $10,000 and $16,000, leaving some money in the bank for bills until we can, hopefully, generate income. These aren’t investment vehicles, but groups of friends and others that I have a relationship with that can’t afford to buy and race a horse themselves, but together they can. I charge a small monthly fee to cover out of pocket expenses and a small percentage of the purse when the horse hits the board. As part of our contracts we donate 1% of earned purse money to equine related charities (an idea I took from Steve’s contracts). We’ve settled on the Minnesota Retired Racehorse Project, a local organization that helps retrain and re-home horses that have raced at Canterbury Park but need to move on to other careers. If we’re going to participate in this game, we need to take care of our athletes.
The stable led to my blog, which led to my summer freelance gig as beat reporter for the Daily Racing Form at Canterbury Park and occasional stories for Midwest Thoroughbred Magazine. I love this game/sport/industry (take your pick!) and am thrilled to be a part of it and enable other fans to get a taste of it.
I’m an early adopter. Was a partner in the 1990s in what I’m pretty sure were the first two internet-based racing partnerships: Virtual Owners Partnership, which evolved out of the email Derby List, and Cyberspace Racing Team. When the CRT horse in New York was claimed away, and the partners in the rest of the country didn’t want to use the claim money to replace it, I took the Castle Village Farm name, which we’d used for a little one-horse small partnership that included racing writer Paul Moran and the late legendary sprint handicapper Stuie “Beef” Rubin, and used that to keep most of the CRT New York-area folks in the game.
For a trainer, we chose a total novice, Leah Gyarmati. She’d worked for Allen Jerkens, gone off to Alabama for a master’s degree in theology, came back, tried being a jockey for a while (all of 13 career wins), worked for Mike Hushion, and was trying to decide whether to go to law school or stay in racing. My wife and I, law professors, convinced her to stay at the track, which may or may not have been the right move for her, but certainly worked out well for us.
The first horse we claimed for the new Castle Village Farm, in July 1999, was Flippy Diane, a five-year-old mare who was coming off a layoff for $20,000. Two races later, in our turquoise and magenta silks, Flippy won the $100,000 Maryland Million Distaff. Girl horse, girl trainer, and girl rider (Diane Nelson). Easy game, right?
We went on with some more claimers, then gradually started buying yearlings and 2-year-olds, the best of which was NY-bred Introspect, winner of the Hollie Hughes Handicap at Aqueduct and a close runner-up in the Hudson Handicap, New York’s sprint championship. Over the years, we’ve had some 80 horses, some for only a start or two, some for long careers. At one point we had more than a dozen horses, but we’ve cut back to a more manageable 4-6 at any one time. Over the years, nearly 300 people have passed through our partnership ranks, including one whose ashes we scattered at the Saratoga finish line. We’ve tried partnerships based in Florida, New Jersey and Ontario, but are now back to our roots, racing almost exclusively on the NYRA circuit. And, after long stints with Leah and Bill Turner, all our horses are now in Bruce Brown’s barn at Belmont — the same Barn 63 where our Cyberspace racing Team horse, Aloha Sunrise, was stabled with P G Johnson way back when.
We have two basic principles: offering partnerships that are inexpensive enough for the average race fan to have a chance to experience the thrill of owning a race horse, and doing the best we can to make sure that our horses have a comfortable and dignified second career or retirement when they can no longer race.
As for the first, we generally form one-horse partnerships, with a capital of between $25,000 and $50,000, with minimum shares newcomers and $500 for those who are already in another Castle Village Farm partnershipâ€¦ We don’t mark the partnership interests up much — just a small sales charge and a finder’s fee for locating the horse. And we limit overhead to actual out of pocket costs to keep the office running. If I make any money, it’s because a horse does well, and then I get a small percentage of the purse. We also send our partners detailed, transparent monthly financials, so they can see the costs actually involved. Good thing that my wife and I have day jobs (still teaching in law school), since running the partnerships is much more a labor of love than a profit-making enterprise.
On the second point, we’ve arranged retirement homes for several dozen of our horses. Three of them are still at the track as stable ponies for trainers or outriders, several more are competing in equestrian events, some are riding horses, some are productive broodmares, and some are just living out their days in comfortable homes. Our partners have several times generously contributed to buy back horses that looked as if they were approaching the end of their careers, and we earmark 1% of our purses for equine charities, primarily horse rescue. We’re in the process of setting up a 501(c)(3) charitable arm, to formalize our rescue and retirement efforts, and we contribute to the “Ferdinand Fund” established by NYRA to provide support for existing rescue and retirement organizations.
Those are the basics. Lots more, of course, at our site.
Like Steve and Ted, I began in racing partnerships. In my case, my wife Erin semi-sandbagged me one evening with the idea. She’d been researching it for some time and identified a possible partnership for us that was local and that fit our budget. We went and visited, bought in, and were very excited for the very first horse we’d ever owned a piece of to run; he lost by more than 30 lengths. But, hey, that’s racing.
Actually, I blame two horses for all of this: Funny Cide and a truly awful race mare named Princess Lorna. Funny Cide, of course, won two legs of the Triple Crown before finishing third in the Belmont. We were at his Derby win (and enjoyed that exacta quite a bit), and as it happened, the late Dave Mahan, who was one of the major partners in Sackatoga, was a friend of Erin’s father. Dave was no blue-blood, and we enjoyed talking horses with him on a couple of occasions. So with Funny Cide, the notion that ordinary people like us could own good racehorses began to seem feasible. Then there was Princess Lorna, who I think took 27 tries to break her maiden. We happened to be there the day she did, and Erin nudged me down to see the horse and her connections in the winners’ circle after the race. They were something of a ragtag group, but their smiles told the story: anyone would be happy to win the Kentucky Derby, but if even an awful horse like Princess Lorna could bring that sort of joy, how could we not get involved?
Anyway, after a couple of years in others’ partnerships, we struck out on our own by claiming horses. We had success doing that, and that led to the first claiming partnership that we ran. Our first claim with that group was a gelding named Skeleton Crew, and I remember being extra-nervous before his first race with us; I knew he would probably be a good claim, but I wanted our new partners to have a good maiden voyage. Fortunately, the only other speed in the race scratched out, and the competitive portion of the race was over in about three jumps when our guy had cleared the field under a rating hold. One easy win, and our new group was under way.
We’ve done both claiming partnerships and groups where we’ve bought yearlings or 2-year-olds and babied them to the track. We’ve had a couple of dozen runners in our silks over the last few years, and like Steve was saying, some we owned their whole careers, while others we owned for just a start or two. While probably most, or at least most of the well-known, partnerships focus on buying young horses before they race, I think there’s a lot to be said for claiming partnerships, especially for people new in the game. They’re a good way to get to racing very quickly, and you’re much more likely to get a horse worth about what you paid for him through the claim box.
We’ve put a real emphasis on two things in our partnerships: communicating with our partners with honesty and integrity and taking care of our horses. A lot of people in other partnerships I’ve spoken with over the years have felt like they didn’t know what was going on with their horses and that they only heard from the manager when it was time to pony up money. We’ve worked hard to make sure that people understand not only what decisions we’re making but also why we’re making them, what considerations go into them, and what other alternatives we considered. I’ve always felt that if we want people to feel like owners, we need to treat them that way. As for the horses, we subscribe to the old racing saw that if you take care of the horses, they’ll take care of you. We make sure they get great treatment when they’re in our barn, and when it comes time for them to find another career, we make sure they find a soft landing. We don’t have a formal percentage donation as Steve and Ted do (good idea, guys!), but we’ve actively supported both horse-related and backstretch charities. (Here’s a great story, from our blog, about the actions of a couple of our partners to buy and retire a local hard-knocker named Norjac)
We’re based in Maryland, and one of the nice things about being here is how many tracks are within easy shipping distance. We’ve also run in Delaware, New Jersey, Pennsylvania, West Virginia, Virginia — and for good measure, Florida, which is a somewhat more challenging ship. That lets you find the right kinds of races for your horse, whatever he needs.
Racing can be a tough game, but the feeling of winning a race really is like few other feelings. One of the best parts of running partnerships has been the chance to share that feeling with lots of other people, many of whom hadn’t experienced it before. Of course, it can be tough to convince them to leave the winners’ circle after that, but that’s a small price to pay!
Great stuff everyone; it’s interesting to see the paths that brought each of you to where you are today. A few things came up that I’d like to discuss further before we move on to your our next question.
It’s striking that each of you started out owning as partners and then started your own partnerships. I always assumed that getting involved, as an owner via a partnership was a gateway drug, so to speak. Have any of your had partners struck out on their own as owners? Is that an occasional or common occurrence?
Up to this point I have not had anyone set off on their own, but I have had a couple of partners pull folks together under a group to buy a larger share of another horse. I’ve also had a partner go ahead and buy into other horses when we didn’t have anything available. Without fail, folks that get involved want to be involved more. At a place like Canterbury, which we call home, where you can really get out on a beautiful backside, the staff is great, you can feed your horse a carrot and really be a part of the process, partners want to experience it more. What’s been outstanding is that a lot of our partners are younger (30’s and 40’s) and these folks getting involved is great for the future of the game.
Here are a few notes:
Many Castle Village Farm partners have used our low-cost, low-risk partnerships as an entry into the game, and then moved on to greater involvement. One of our (relatively) wealthier partners went on to form his own group with a few friends, and three brothers, all members of our very first partnership, went off to create a family partnership that is still active.
We even had a sales rep for the CVF partnership who, apparently chafing under the weight of not being in charge, went off to set up his own rival group, not to mention one of our partners who delivered our email list to yet another rival. Not an easy business!
“Gateway drug” is a good term you use, Dana, and I think it applies both in the sense that it often leads to greater involvement and in the sense that, like other gateway drugs, sometimes it doesn’t lead to anything else at all. Most of the people we’ve had through the door have continued to be involved in racing, usually either with more of our partnerships or by striking out on their own, once in a while by getting involved in other groups that work better geographically for them.
But not everyone. This is a tough game, and ownership isn’t for everyone: it’s a long, slow, expensive process that involves a few peaks and a lot of valleys. Some folks try out ownership and decide they’d rather just continue to watch and wager on races, and that’s a perfectly good outcome. I’d put it this way: everyone can have fun owning a stakes horse, but you really only know if this game is for you if you have a bad horse and can still take joy from that or, even more to the point, you have a horse to which something bad happens and you still want to be involved in the game. That’s the test, I think, and those are the people who go on to thrive in racing.
Racing is a lot of journey, usually for not much destination, and that doesn’t work for everyone. Folks who have been around the game for very long have a million stories about the “masters of the universe” types who have triumphed in everything who spend a lot of money, get good people, and still end up with lousy horses — and then become frustrated and quit. It’s that kind of game: trainer D. Wayne Lukas has won the Preakness five times, which is one of saying that he’s lost 32 times. If you can’t take any joy from the experiences of the 32, you probably won’t ever get to the five.
Great points, Frank! A batter can fail 7 out of 10 times in baseball and still be considered a superstar while in racing; a 20% win rate is exceptional. That means we’ll be a success failing 80% of the time. We try to be very clear about those odds up front, but until someone is in that situation, they don’t know how they’ll respond. I’m as competitive as the next guy and I want my horses entered where they can win but you need to take joy in the entire experience or you’ll be miserable. We all want the home run horse – and I think we all strive for that – but I think we’d all settle or those that pay the bills and let the partners get their picture taken every once in a while.
I find it hard to explain to people that, from a handicapping perspective, a trainer stat in the 20% range is notable. I can only imagine what it’s like to communicate that to partners who may not already have that understanding.
With that in mind, let’s move on to some discussion on the types of things of partners should expect, or not, from a logistical point of view. I have a couple of questions on this front, but let’s start with this: Assuming that every organization handles it a bit differently, where can partners expect to have their input considered? Do any of you have a formal or informal process for discussing things like naming the horse, a next move, who to claim, etc.? I would imagine that you have some folks that are happy to let you and the trainer do all the decision-making and some that would like to be more involved in the process. Is that the case?
We certainly get a mix of opinions in our groups – even though our groups are small. We set up a private Yahoo! Group for each partnership where I post updates, financial statements, photos, PPs, result charts, etc. Hopefully it is the basis of some spirited discussions. If there is a major decision to be made I try and put up a poll to get member input. For example, we had an offer to purchase a horse of ours soon after we claimed her. I set out the parameters of the deal and then let the group vote. The vote was to keep her and race her, so that’s what we did. Day to day decisions like where to race next are usually left up to the trainer and I, though if there are a couple of possible fits I’ll throw it open to the group for input: you never know, someone may have a viewpoint that makes you reconsider what you thought may be the way to go. There are folks that like to be more involved in the process and I encourage them to ask questions and get an understanding of the business – these are the owners of the future and the more they know, the more they will enjoy the game.
There does need to be some control over trainer access. We can’t have a dozen people all trying to call the trainer for updates and give input so I am the conduit between the trainer and the group. Fortunately we have had trainers that are very welcoming and enjoy interacting with partners. The one limitation we do put on visits is on race day – the horse needs to be left to his/her race day routine on that day.
There definitely are ranges of involvement — some partners want to go out and see the horse as often as possible, attend all the races, have long conversations about the horses, etc., while others are perfectly happy to wait for email updates.
We do have some parts of the partner input process that are formalized, while others are a little bit more informal. For example, since the only kind of insurance you can buy for racehorses is mortality, I have the group vote on whether they want that or not. People generally come down in favor, but my thought on this has been that it’s their — well, all of our — money, and if they’d prefer to save the money and assume what is generally a very small risk, that’s OK with me. I explain the pros and cons, answer any questions, and then let them decide. Another area where I’ve run a formal process has been naming the horses. When we have a horse who has no name, I usually go through a probably too complicated process where each person can submit names, then the group votes to cull the names down to a smaller number, and finally votes for their favorite out of the finalists. I’m not sure that I’ve loved the names we’ve come up with through that process, but they’re certainly better than some of the names that are out there, and people seem to enjoy the process.
On other issues — whether to claim a horse, what level to run the next start, etc. — I often try to take the temperature of the group while retaining decision making authority for myself. What I mean by that is that I’ll solicit people’s opinions, and if they’ve thought of things that I hadn’t, or if the group is strongly in favor of one course of action, then those are things that we need to take into consideration as we make a decision. On the other hand, I’m being paid for my experience and expertise in making these sorts of decisions, so I’ll ultimately make the call and go from there. When claiming a horse, there’s another wrinkle in the mix, too. Our trainer has the absolute right to veto any claim we want to make based on what he sees physically of the horse before the race. He and I will have agreed beforehand that we like a certain horse, but if he sees something in the paddock — say, he sees evidence of an old ankle injury that worries him — then he can decide not to drop the slip. That gives us our best chance of getting horses that are sound, which is absolutely critical when claiming horses.
Ted raises a really important point about trainer access, and partners occasionally don’t quite understand it. They think, “Well, I’ll just be quiet and stay out of the way, so there’s no big deal.” But as Ted notes, the issue isn’t one person showing up — it’s what happens when four or five or six all decide to come on the same day. As much as we all enjoy a morning on the backside and interacting with the trainer and seeing our horses, it’s important to keep in mind that this is a workplace, too. So my rule has always been that people wanting to visit with the trainer need to arrange it through me. Our trainers have always been friendly and open to that, so it’s never a problem, and this just protects their time.
All in all, interacting with the partners is one of the really fun parts of racing partnerships, and taking people through the experience of owning Thoroughbreds is great fun. I think one of the most important things we can do as managers is to set expectations properly, so that people have a good sense going in of what their rights and responsibilities are going to be.
We maintain two-way communication by having a Yahoo Group for each partnership, so the messages are not just top-down — our letting the partners know what’s happening with their horse — but also bottom-up. We have a few partners who pore through the new condition book the moment NYRA posts it online and suggest races, but the great majority are content to have me and our trainer, Bruce Brown, make the decisions.
There are a few specific decisions that partners have the right, under the partnership decision, to veto, such as putting a horse in for a too-low claiming price. But in 13 years, they’ve never exercised that right. Of course, I’m cognizant of the concerns when, say, we enter a horse for $15,000 that we’d claimed for $30,000. And we’ve lost a few to claims that we thought were highly unlikely. Sometimes that’s a good thing, as when David Jacobson claimed two from us, for $50,000 and $75,000, that weren’t worth nearly that much. Sometimes that’s a bad thing, as when we tried to steal a race with a horse coming off a winter layoff and got claimed.
At one time, we had a lot of partners who thought they were going to make money in racing. They could be difficult, since most of the time one doesn’t make money. We’ve since pared our group down to those who understand and agree with the way we operate, and we’ve had a corresponding decrease in complaints.
We’re now pretty much a claiming partnership, so when we’re looking for a horse, I post analyses of upcoming races, and a number of partners make suggestions of possible claims. But the final decision belongs to Bruce and me.
When we do buy babies, we have the partners vote on possible names, though I reserve the right to veto a choice. That’s produced a few excellent names (e.g., Talking Blues, by Silver Music out of Time to Chat; Brave Sir Robin, by Runaway Groom out of Brave Hearted; and Watson I Need You, by Phone Trick out of Pleasent Ring, as well as some really boring ones. But it’s always fun for the partners.
As for stable access, we don’t let partners phone the trainer — way too disruptive, but we do maintain pretty much an open-house policy at the barn. Generally, Sunday mornings are prime visiting hours, but partners who can’t make it then are welcome other times, as long as they give advance notice. And Bruce’s ban is right next to the Belmont training track, so there’s always something going on.
I’d like to expand a bit on the trainer relationship that Steve touched on. You go out and hire a trainer because he or she is an expert in the art and science of training racehorses. It’s important for your partners to realize that the trainer knows more than they do. I’ve been in this game in various capacities since I was in graduate school in the late 80’s and our trainer, Bernell Rhone, has forgotten more than I’ll ever know about racing. When it comes to claiming I rely on Bernell heavily. He’s proven to be an expert at it in his 30 years of training horses. He’s not shy to tell me if a horse I’m eyeing looks awful or has some flaw that I missed. More often, when we are ready to claim we’ll compare notes and we’ll narrow down the candidates and then go ahead and pick one to go after.
Your trainer knows information that you don’t: how certain trainers prep their horses; what the mindset is for some trainers; what the horse looks like on the ground as opposed to in your Daily Racing Form. As an example, we claimed Tabby Lane, one of our current horses, when she came right back at a claiming level she just won at Tampa Bay Downs. For a 4 year old filly this could raise some red flags since she should be on the improve. However, Bernell knew that her trainer had no intention of bringing her north to Delaware or Parx because he’s watched that pattern for years. The goal was to get the purse money and make sure she got claimed. She’s won seven times and over $70,000 at Tampa and Canterbury for us since. You’d never get this information out of a past performance. Your trainer is a professional – treat him like one and leverage his/her expertise. They’re not getting rich on their day rate; they make their money when they win and want to do so almost as badly as you do.
The one conflict that exists with virtually all trainers concerns claiming prices and the desire to win. Now that everyone has access to all the stats all the time, owners often base their decisions on whom to use as a trainer on the trainers’ win percentage (Ken Ramsey, for example, will tell you that he’s a “numbers guy” and won’t hire a trainer with a win percentage below 20%). Also, as Ted pointed out, the trainer really only makes money on a win.
So, if you just claimed a nice horse for $25,000, it might make sense for the trainer to enter it back for, say, $16,000 and get the win purse, even at the risk — which is the owner’s more than the trainer’s — of having the horse claimed away. In New York, David Jacobson and Rudy Rodriguez do this a lot. If the strategy works, and the owner gets the win purse plus the claim money, the owner can more or less break even. But if the horse doesn’t win and gets claimed, then the owner has a significant loss.
I almost always have my trainer run a newly claimed horse back at the claim price or higher at least twice before we drop to a lower level, unless we discover that we’ve claimed an unsound horse. I figure that two chances is enough to see if the horse has the upside potential we hoped for when we made the claim.
Another issue on the owner-trainer relationship is finding a trainer who’ll tell you the truth about a horse’s physical condition. Too many still adhere to the maxim of treating owners like mushrooms — keep them in the dark and cover them in horse [manure]. So if everything’s not proceeding on schedule, I’ll sometimes stop by the barn and feel the horse’s legs for myself, or ask the trainer to get a vet to come in and then talk directly with the vet. I don’t blame the trainer, but it’s just a precaution I’ve learned over the year, with a number of different trainers, that’s necessary.
Good points being raised, and I think they really revolve around the issue of trust: of the partnership manager, and of the trainer.
For owners considering coming into partnerships, the key questions to resolve, I think, are these: do you trust the partnership manager to act in your and the horse’s best interests, and does the partnership manager seem to trust and have a good working relationship with the trainers you’ll use. So my advice to people considering getting into partnerships would be to push on those questions to try to get satisfactory answers.
I’m always dubious when I hear people who are too concerned with trainer win percentage. A lot of trainers build a strong win percentage on putting horses a step or two below where they belong — so, in Steve’s example, running a legit $25,000 horse for $16,000. That’s a situation where your horse will be 6-5, probably win, and might get claimed. There’s nothing wrong about doing that, but it’s definitely not in the best interests of a person in a partnership who owns a piece of a horse or two. For that person, the best approach is to place horses where they fit — in races where they’ll be, say, 3-1, have a solid shot to win, and some chance of getting claimed, but if they do, it’ll be for what they’re worth, rather than at a discount. Yes, you want to win races, but at the same time you want someone who will take care of the horses and who will communicate frankly and honestly with owners.
The other point raised here is that your trainer is a professional — but he’s not the only professional you deal with. As an owner and manager, I make it a point to have relationships with our vets, with the farms where we send layups and babies, etc. — and our trainer endorses that. I once was on a panel at a new owners seminar, and I suggested to someone that rather than wait for his trainer, with whom he was exasperated, he go straight to the vet for info. A couple of trainers on the panel gave me sour looks, because of the “mushroom” syndrome Steve noted. But it’s pretty much insane for an owner to allow these decisions to be made without his input or participation, and I wouldn’t send horses to someone who didn’t agree with me on that.
Well done, you’ve started to answer my last question! Frank already laid out some specifics, but assuming that someone is shopping around versus being referred by a friend, how might one go about trying to determine if the partnership manager will act in their or the horse’s best interest? Are there any obvious warning signs when doing due diligence? What kinds of questions can potential partners ask to make these determinations?
What to look for in a partnership? As in any other “investment,” transparency is important. Can the prospective partner understand the partnership agreement? Does the partnership provide regular, easy-to-read financials? Do current partners have good things to say about the partnership’s management? If they won’t let you talk with current partners, be suspicious, very suspicious.
Other factors: How welcoming is the partnership to barn visits? How do they deal with the issue of thoroughbred retirement? Are the other partners fun to be around? How does management communicate to the partners, and, as important, how do partners communicate to management and each other?
Small, affordable partnerships can’t provide the level of hand-holding and customer service that the big outfits like Team Valor or West Point do. But prospective partners should be aware that all that service comes at a price. The big outfits mark up their horses a LOT, which small partnerships generally don’t (though there are exceptions, e.g., Karakorum). Most small partnerships don’t actually provide a full-time income for their managers, so both the managers and the partners are in it for the excitement, not the money.
I’d love to add to what Steve said, but he nailed it. Be comfortable with who you enter into a relationship with and be realistic about expectations so you can really enjoy the entire ownership experience.
And there you have it, a look at some of the ins and outs of racing partnerships. Are you in one of the areas where our panelist operate? If so, please check them out!