Just think:

If you had invested in horses instead of that technology stock, it could be you grinning broadly in the winner's circle at the Derby. For many adventurous investors, a racehorse investment combines the excitement of a thrilling hobby with the very real possibility of making a serious profit. The love of horses and racing are the main reasons many investors consider horse racing, says Dirk Karl Eisele, CEO of the leading bloodstock agency 'BBA GERMANY' and expert who acquires and manages horses.

"The beauty and grace of the animals, the remarkable cross section of people who are found in racing --

professionals, owners and fans -- and the incomparable thrill of being closely associated to a

good class horse are all invariably contributing factors," he says. "And then there's the potential to earn money." Harriet Loder, a member of 'BBA GERMANY', agrees it can be a powerful personal experience.

"Investment in racehorses is an indulgence in a hobby that can have the cachet of investing," she says.

The hobby is the main reason she's involved, she says, but the horses she's involved with have done

well.


Roping in the dough

Investments in racehorses can range from a handful of twenties to millions of euros. There's a wide range of money to be made, as there is a wide range of investments. While some horses are relatively inexpensive, thoroughbreds can go for hundreds of thousands. Here are some examples of Dirk Karl Eisele’s success purchases:


  1. Bullet    Mandalara, was sold to a French syndicate of investors originally for €175,000. Only three months later, she's been a financial star, earning more than €1.5 million for the investors and selling her for €1,7 million at the Arqana Deauville December Breeding Stock Sale.


  1. Bullet    At the same sale BBA Germany advised a client to buy a 3-year-old filly in training by Acatenango for €110.000, subsequently she won a €250,000 race, breaking the track record, following year she was sold at the Tattersalls December Sale for €1.2 Million Guineas.


  1. Bullet    BBA Germany purchased a mare in foal to Monsun for €30.000 and 2 years later her yearling sold for €170.000.

  2. Bullet    BBA Germany privately purchased a yearling filly for €75.000, only 4 month later she sold for €210.000.


Eisele is quick to warn that not all horses will realize such a return. Unlike traditional investment properties, horses are living creatures that can get injured or sick. The possibility of joining a syndicate will help to look out for your best interests.


Thoroughbred racing has been known to many as the Sport of Kings, it is attainable to all of us. Eisele

admits that it is true that investing in racehorses is speculative when compared to more traditional investment vehicles, he says that one major piece of common-sense advice can make it all worthwhile.

And when smart, conservative business principles are applied, associated with top class bloodstock management, especially at the beginning, Eisele says, such an investment can prove to be far less speculative than many would believe possible.


Love it or leave it

Julian Ince, owner of the Normandie-based stud farm Haras du Logis states that investing in racehorses is both sport, passion and can be a way of investment. He adds that "the potential gain can be enormous, if the investor/gambler buys wisely, and manages their investments carefully with expert advise!" Everyone who invests should value the fun of the experience, he says. "Investing just for the purpose of making a profit could be foolish. The rewards are in the fun sport way of life and always the potential to hugh profits!"


Joe Hernon, Chairman of the European Breeders' Federation says, "Investing in a racehorse can be the thrill of a life time! The excitement of seeing your horse winning in your colours is an unrivalled experience! Of course great majority of racehorses do not achieve the kind of fame and earnings of a Champion like Sea The Stars or a Zenyatta but they can. And that is what is achievable!"


Opportunities to invest vary There are different types of investments. Partnerships are becoming increasingly popular. But just as important as the form of ownership is the area of investment. Some investors like the breeding aspect, while others only want to be involved in racing. Some like colts who have a Derby future and potential skyrocketing profits. Others prefer fillies, who don't make as much as colts, but have a residual breeding value after their careers are over.


Investors need to define their goals clearly. Some high-level partnerships buy the most expensive prospects to race with the intention of making them valuable for breeding. These usually require investments of more than €50,000. For investors who disregard breeding potential, investments range from as little as €5.000 to €50,000 or more. Some require all the money in advance while others allow for monthly or quarterly payment of expenses. Regardless of the form of investment, Harriet warns, a potential investor needs to find an experienced adviser, one familiar with the sector of the business in which the investor wants to place money. "I strongly recommend anyone new to racing to first get involved with a proven agency with a track record to match," Harriet says. "The most critical decision is choosing the right adviser."

Investing in Thoroughbred

Breeding & Racing

Deauville July Yearling Sales
2010, France

BBA Germany | Mob: +49 172 2902404 | Phone: +49 202 8979900 | Fax: +49 202 8979901 |  dirk.eisele@bbagermany.com