It is a thrilling sport that seems restricted to a privileged number of people who understand the business of the thoroughbred.  It can be an intimidating world for those of us that have never previously been involved with race horses. It can be tricky enough to know where to start if a person has a background in the equine industry but the jargon of bloodstock pedigrees, trainers and training fees, boarding etc. can be downright overwhelming to the uninitiated.

It is a shame to be turned back before you get to the starting gate, so to speak, as it is such an exciting industry. A mentor who can help one learn the ropes in any subject matter is extremely valuable and thoroughbred racing is no different. An excellent way to find an advisor in the horse racing world is to become involved with a race horse syndicate.

What is a Thoroughbred Syndicate?

A thoroughbred syndicate is essentially a partnership formed to carry on a business; in this case the ownership of one or more racehorses, with a view to making a profit. Each partner is entitled to a share of the profit and is liable for a share of any loss.

With a racehorse syndicate, you and your partners purchase a share in a race horse and spread the risk among the group. Any thoroughbred investment is highly speculative, but sharing that risk and having access to the leadership and advice of experienced thoroughbred people reduces the risk for first time owners considerably.

Benefits of Syndicate Participation

For many fans, racing partnerships, also called racing syndicates, open the door to Thoroughbred ownership. Unlike individual ownership, partnerships offer the ability to choose your level of participation. You get the full benefit of being a Thoroughbred owner at a fraction of the cost. Benefits of the partnership structure include the ease of formation and dissolution as well as the flexible management structure.

Adam Lee is the creator of the new website Inside Alberta Racing which provides an informative tool for new owners who are trying to become involved in the world of thoroughbred racing. Lee constructed the web site after becoming frustrated with the difficulty of joining the thoroughbred industry in Alberta as an owner. “We didn’t know anyone in the industry and didn’t know where to start,” said Lee.

After discovering the blog on the Horse Racing Alberta site written by John Stavroupoulos called Do You Want to Own a Racehorse?, Lee discovered the benefits of becoming involved with horse racing through a syndicate. He became an owner through Stavropoulos’ syndicate, Venture Syndicate, and notes that “John has done a fantastic job of helping us in our first year as owners and we are now hoping to help others.”

A syndicate already has the trainer, veterinarian and groom established and often the horse as well. A reputable syndicate has the experience to examine bloodstock pedigrees to advise on the selection of a horse for the group. The syndicate group has advisors in the leadership team to enable effective decisions to be made.

Additional benefits of joining a syndicate for a new owner are the social opportunities and connections. A syndicate allows you to be introduced to experts in the industry and have fun with other people who share a passion for horse racing.

Factors to Consider in Selecting a Syndicate

Before you join a syndicate, you should look into the structure of that particular partnership and ensure it is set up in a way that will offer you a rewarding and enjoyable experience.  You need to understand at the outset what your investment will be getting you.

What does the share purchase agreement stipulate in terms of participation in expenses throughout the season? Some syndicates may require you to pay additional costs for expenses such as veterinary care, racing silks, and entry fees while others will cover most, or all, of the associated fees. An investor needs to examine carefully the type of syndicate structure offered and what the obligations of each investor are in the arrangement.

Jason Pitruniak of Run For Fun Stables, a syndicate based out of St. Albert, Alberta, states that “although syndicates will vary on a case by case basis, the goal is always the same – acquire horses and run them for fun with the potential to make a profit.” He explains that some syndicates may have a minimum buy-in amount in addition to a monthly fee, while others will have no buyin, where each partner would be responsible for only the monthly fees of a racehorse already owned by the syndicate.

The fact that a syndicate is a partnership agreement means that the contracts can be structured in a number of different ways. As with any contract, the investor must read the fine print carefully to ensure that he or she knows what is being signed. If you participate in a syndicate opportunity in which the horse is already owned by the syndicate (no buy-in), each owner is normally responsible for their share of the horse’s monthly expenses.

If the horse is sold or claimed from the syndicate group, usually the predetermined value of the horse is deducted and returned to the original investment group and any proceeds left over are split among the remaining investors.

A second syndicate option is the claiming syndicate in which a share of a horse claimed will cost each investor a certain predetermined percentage of the claiming price in addition to the monthly expenses. Each claiming syndicate price will therefore vary depending upon the claiming level of the horse chosen.

A third type of syndicate option is to participate in the purchase of shares of a thoroughbred at a bloodstock sale. The syndicate cost then will be dependent upon the purchase price of the horse chosen by the syndicate to purchase and the amount used to cover upcoming expenses.

To get an idea what expenses may look like in Alberta, Pitruniak estimates that the monthly costs for a 10% share in a syndicate operating in Alberta are usually about $100 – $120 per month throughout January, February and March; about $150 – $160 per month per 10% share from April through October during the race season; about $40 per month per 10% share during November and December when there is no racing and the horse is on vacation or rest.

Given the unpredictability of the thoroughbred industry, an investor always has to be aware that there may be unexpected expenses that arise along the way and further capital may be called upon from the syndicate investors.

An additional point to consider when choosing a syndicate is the background and experience of the leadership team. Are they thoroughbred people with years of experience and a solid reputation in the industry? Make sure that the individuals behind the syndicate are reliable and responsible and try to get some references from others that have been involved with the syndicate. You will want to make sure that the horses chosen by the syndicate are competitive with solid pedigrees and in good health.

The level and type of communication between the syndicate management team and the owners are further factors to consider in making your decision. Responsible bloodstock advisors and trainers will take a more active role with their clients and help them to learn about their investment. The more you, as a syndicate owner, learn about the racehorse, the clearer your understanding of your horse’s abilities will be and the easier it will be to have a realistic picture of the syndicate’s program. An enlightened syndicate management team will enable you as an investor to learn more about the race horse industry and pedigrees, conformation, training, feeding and other related aspects of running a horse.

The Venture Syndicate formed by John Stavropoulos in July 2010 is an example of a well organized and effectively run ownership group. Stavropoulos purchased the four-year-old filly, Rafflesia, who had been racing competitively at Woodbine, in the spring of 2010 specifically for the purpose of creating a syndicate. Stavropoulos communicated his message to potential investors through a blog written on the Alberta horse racing website He wrote a series of three posts called “Do You Want to Own a Racehorse?” followed by an ownership seminar that he hosted at Northlands Park in July.

At the seminar, Rafflesia was brought over to the paddock “where everyone could see and touch her.” His only rule to potential investors was that the person had to be a new owner – no existing owners were allowed to participate. The seminar was a success and resulted in “14 enthusiastic people writing cheques to buy an interest in the horse, and everyone marched into the racing office to get licensed. By noon, a 15 person syndicate, me and 14 brand new owners, had formed Venture Syndicate.”

The new forms of social media should be an important communication tool for any syndicate group. Stavropoulos communicated with the syndicate through email, a dedicated Facebook page for Venture Syndicate and through Twitter. Rafflesia raced through the summer and into the fall for the Venture Syndicate but didn’t reach the winner’s circle until September 26 when she won by 6 lengths. “The Venture Syndicate has ended up being more rewarding than I could ever have imagined,” said Stavropolos. The owners are a diverse group with people from Calgary, Edmonton and even Vancouver. Most of the owners attended every race at Northlands Park and “…one owner even made a five-hour drive from southern Alberta to Edmonton just to watch Rafflesia have a morning workout.”

Venture Syndicate provides a great example of the social and educational benefits of a syndicate, Stavropoulos remarks that “the syndicate has created many friendships, and syndicate members have already expanded their ownership by purchasing horses on their own.”

Certain syndicates will permit more of an educational experience and interactive approach allowing you to visit the barns, talk with the trainer, see your horse and help out at races. Adam Lee comments that his experience with the Venture Syndicate and trainer Tim Rycroft was very positive in this regard allowing him to ask all the questions he wanted on many different levels.

Lee said that the owners like to be involved even though “…from a trainer’s perspective, it requires a lot of patience!” Other syndicates will want you to restrict your participation to a seat in reserved seating enabling you to watch your horse at races. Either way, you should always have access to updates on how your horse in regards to training and health.

Certain syndicates are structured in interesting ways that may also be appealing. The Racing for a Cause syndicate set up by Dr. Brenda Abbey is organized by “Alberta Professionals forming Racehorse Partnerships to Benefit Charities.” Racing for a Cause creates an additional option in their ownership to donate part of the horse’s winnings to a Charitable Cause of each individual’s choice.

Getting involved in a syndicate is an educational, economical and fun way to become a thoroughbred owner. It is worth investigating if you have always wanted to be involved in horse racing but haven’t been sure where to start.