Nowadays, Australian racing and breeding attracts a stunning range of the game's biggest international investors, alongside a domestic ownership base which makes it the envy of the bloodstock world.
The gathering of the nations at the Asian Racing Conference this week focuses us on the most progressive and prosperous racing nations on the planet. No country boasts the prize money of Japan, none are as prosperous as Hong Kong and there's no jurisdiction on earth where the population as a whole is quite as embedded in the culture of the sport as Australia. The history of racing in Hong Kong dates to the British occupation in 1841; Australia's foundation bloodstock arrived with the First Fleet in 1788 in the form of 3 mares and a stallion sourced from, wait for it, the Cape of Good Hope, an irony considering that Australasia is closed to our horses these days unless they undertake an arduous 12 month journey around the globe in order to get there. The Japanese were "Johnny-come-latelys" relatively speaking, yet, driven by the enterprise principally of a single family, they've arrived on the world's racing stage with a bang. The pre-eminence of Japan racing's "royal family" was as evident as ever in the outcome of their two major races on the weekend, where Katsumi Yoshida's Northern Farm trifecta'd the million dollar event at Kyoto, and supplied the exacta in the other major race at Nakayama.
Today though, is Australia's day, where, if you think that their racing ranks are dominated by a small domestic clique, drawn from the squattocracy and the upper tiers of the professional classes in the cities, then you're only a few decades out of date. However, you might as well be a millennium behind, such has been the change in the sport's demographic in recent years. Nowadays, Australian racing and breeding attracts a stunning range of the game's biggest international investors, alongside a domestic ownership base which makes it the envy of the bloodstock world.
John Berry's commentary on the recent Magic Millions sale at the Gold Coast sums up the situation perfectly. The line-up of overseas buyers was dazzling, including WinStar, Spendthrift, John Sikura, Katsumi Yoshida, China Horse Club, Shadwell, and Qatar Racing. Alongside these, dozens of domestic syndicators competed to unearth the future star racehorses, star stallions and star broodmares which will surely graduate from the auction. While there is a significant level of syndicate involvement in ownership around the world, in Australia its extent is unparalleled. Its popularity is based on three principal factors. Firstly, racing takes a more prominent place in society there than in probably any other country in the world. Secondly, prize money is extremely good. Thirdly, the valuations of Australian breeding stock have been boosted in recent years by burgeoning international involvement in the country.
In short, an Australian who outlays, say, $30,000 for a 10% share in a racehorse can feel that he is taking part in a mainstream and fashionable pastime, has a realistic chance of getting a significant return on his investment through prize money, and could possibly have a valuable commodity, whether stallion or broodmare, to sell at the end.
Furthermore, the fact that Australian syndicators are regulated as tightly as stock exchange traders (hence the reassurance in newspaper advertisements that the syndicator is "holder of AFS license number …") gives investors a confidence in the probity of the deal which is not always mirrored in syndicates elsewhere.
For every high-profile debacle (such as the infamous purchase of Black Caviar's yearling half-brother 'Jimmy' for $5million in 2013, when the upshot was that the sales company was not paid, the horse died in mysterious circumstances and both the syndicator and the investors' money disappeared) there are more than enough cases of syndicates being run with total transparency and honesty to maintain the confidence of potential investors. Black Caviar herself ranks as the most successful syndicated racehorse, but that is merely because she ranked in a league of her own as a racehorse, dominating the international sprinting ranks like no other.
She is, though, far from the country's only high-profile syndication success story. Investors in the country's numerous syndicate-owned champions have ended up not only having the ride of their lives, but also making big profits, and have done so so noticeably that they have encouraged the continuing growth of this form of ownership. While the primary dividend to the share-holder in a good horse is the prize money, the secondary one, the horse's breeding value, has swelled enormously in recent years thanks to the international interest in Australian bloodstock. A generation ago, Robert Sangster and Sheikh Hamdan bin Rashid al Maktoum were pretty much the only major international investors making a big impact on the Australian bloodstock scene. Sangster became a major player in the early '80s, his legacy continuing to this day in Australia through his son Adam. The Maktoums followed, as did Nelson Bunker Hunt, but only Sheikh Hamdan remained a major investor throughout.
Sheikh Mohammed, though, has reinforced his presence in Australia this century, most notably with the purchase of Woodlands Stud in 2008, and this has proved crucial to Darley's emergence as a major dual-hemisphere breeding operation. The shuttle-stallion boom has been key to the increased involvement of major North American and European studs in the Australian market. Coolmore was the first to put down antipodean roots, initially through links which Robert Sangster developed with the Lindsay Park training and breeding operation of the late, great Colin Hayes and then through its connections with Arrowfield. Vinery followed suit, and the importance of shuttling has continued to grow, to the extent that the ability to earn money in both hemispheres is now crucial to the valuation of a stallion. The Golden Slipper Stakes (Gr.1) has been pivotal to the commercial development of Australian racing, and last season's winner Vancouver sums up the situation perfectly. 2008 Golden Slipper winner Sebring proved a great advertisement for the syndication business. He was bought by Star Thoroughbreds as a yearling for A$130,000 before earning A$2,537,060 for his connections. Widden Stud then bought a controlling interest in him in a deal which reportedly valued him at A$30million, and he now commands a fee of A$66,000. Vancouver, though, provides an even better illustration.
Bought at the 2013 Magic Millions Yearling Sale for A$185,000 by Gai Waterhouse acting with bloodstock agent James Harron, he was raced by a syndicate comprising some established patrons of the stable. His Golden Slipper victory last March took his 2-year-old earnings to A$2,332,500, a figure which was dwarfed by the A$40million valuation at which a controlling interest in him was sold shortly afterwards to a consortium headed by Coolmore and also including the China Horse Club.
That A$40million valuation emphasizes the importance of shuttling to the major studs' economies. It might prove hard to recoup that investment if Vancouver covers only in Australia, but there is significant potential for profit if his stud career blossoms in Europe too. Under the circumstances, it is no surprise that Vancouver is following the likes of Haradasun, Starspangledbanner and So You Think to Aidan O'Brien's stable in Ireland to try to establish his reputation in Europe. In doing so, he is providing a reminder that the Australian bloodstock.
Editor's note: My topic, as I explained earlier, at the Asian Racing Conference is South Africa's case for an easing and a rationalization of the protocol criteria for the export of equids from our country. As I've said, Australia's foundation stock were sourced here, and in 1795 South Africa sent a further 41 animals out, followed by a third draft of 15 before 1800. Remarkably, in as bold an example of how the world works and the extent to which necessity dictates convenience, during the two World Wars alone (ignoring our contributions to Queen Victoria's little wars in the 19th century,) we sent a further 450 0000 horses from these shores, none of which were ever to return, without transmitting the African Horse Sickness virus to anyone. Followers of these columns will get first-hand updates of my address (Tuesday 26th January) and that of Dr. John Grewar, who makes the scientific case for us on Wednesday 27th January.