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The saddle club - By Indulekha Aravind / Business Standard

Posted on - 21 Jan 2013


The saddle club
Always wanted to own a horse but didn't have the money? Join a racing syndicate
By Indulekha Aravind / Business Standard
Ashwin Mehta, a Mumbai-based entrepreneur, was fascinated by horses for as long as he could remember. “I used to ride as a child, and would read any material on horses that I could get my hands on,” he recalls. From riding, he went on to buying horses and entering them in races. But a few years ago, the cost of thoroughbreds skyrocketed, making it difficult for individual owners like him to indulge in their favourite pastime, says Mehta. The solution? Buying a horse jointly with six of his friends, instead of footing the bill alone. “The idea is to enjoy the races. The degree of enjoyment is the same to me, whether I own a horse individually or with six others,” says the 61-year-old.
Mehta opted for what is known in racing circles as syndicate ownership. This is akin to fractal ownership of other luxury purchases like private aircraft, and works on the same principle — making something that is otherwise unaffordable accessible by splitting the costs among a number of owners. The returns are split between the syndicate members.
This means that instead of the Rs 6-10 lakh you would have to cough up if you were buying a thoroughbred on your own, you can own one (rather, a share in one) for as little as Rs 30,000-50,000, depending on the number of members in your syndicate and price of the horse. Apart from the initial outlay, you would have to spend Rs 15,000-20,000 a month on the horse’s maintenance, but this would also be shared among your fellow-members, and you would get to enjoy the benefits individual owners do, such as leading your horse out on race day, etc. One person in the syndicate — typically, the most experienced — will be the principal member who will handle all the paperwork.
Abroad, racing syndicates are common and membership can even run into hundreds in countries like the UK. The 2005 Epsom Derby, for instance, was won by a horse owned by a 230-member syndicate. In India, however, racing syndicates have between five and 20 members. “Although we allow syndicates to have up to 20 members, the average number is six or seven,” says Vivek Jain, ex-chairman of the Royal Western India Turf Club in Mumbai, one of the five main race clubs in the country. “Allowing syndicates was our response when the initial investment started becoming too high for an individual. We also wanted to get more people to own horses, and this seemed to be a good way to do this,” says D M Kumaraswamy, chairman of the Bangalore Turf Club.
Marthand Singh Mahindra, owner of Broadacres Stud Farm in Bangalore, recalls how it all started in the city. “A few of us, members of the Karnataka Breeders Association, realised we needed more people to sell to, so we decided to promote syndicate ownership which could bring in new people,” he says. After the clubs changed the rules to allow this new form of ownership, the association put out flyers around the city. “There we were, ten of us, sitting in the Bangalore Turf Club, hoping someone would show up,” says Mahindra. That someone turned out to be S P Thirunavukkarasu, or “Thiru”, a senior executive with an MNC, who had seen one of their ads. “I had always had a passion for races but the race club had an elite air about it. So this was a great opportunity to enter the sport,” says Thiru.
Beginning with five members and a horse called “Just Do It”, he went on to be part of syndicates with eight and ten members. Though he exited the syndicate model in 2007 to focus on owning horses in partnership with two or three others, it was syndicates that allowed a first-timer like him to enter horse racing, he says. “Owning a horse is still a way to tell the world you have arrived. It lets you rub shoulders with the rich and famous,” says Zeyn Mirza, managing director of United Racing and Bloodstock Breeders, Vijay Mallya’s racing operations.
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Owning a horse jointly and spreading your risk would thus appear to be the ideal way to enter the racing arena, especially for first-timers. And yet, the syndicate model in India has not enjoyed the kind of success it has abroad. “Racing syndicates are not that popular here, although it can be a great advantage to small owners by allowing them to own more horses within their budget,” says Kelly Kotwal, director of marketing at Poonawalla Stud Farms, which produces 75 to 85 thoroughbreds a year.
Only about 10 per cent of his buyers belong to syndicates, says Kotwal, and most of them are owners already registered at clubs, and not first-timers. In Bangalore, while 42 syndicates are registered with the Turf Club, including all-women syndicates led by the country’s first female jockey, Silva Storai, only four are currently active. The situation is better in Mumbai, which has 86 registered syndicates, a number that’s increased by 30 over the last few years, according to Jain. “It’s becoming popular but I would say it’s been reasonably successful, not wildly successful,” says Jain, adding that a few syndicates are added every year. At least some of the members, he says, are first-time buyers.
At the Royal Calcutta Turf Club, Racing Vice-President Robin Corner concurs that the model has not been as successful as they would like it to be. But Corner is hopeful. “In the present scenario of rising costs, it’s a must,” he says.
One factor hampering the growth of racing syndicates could be the lack of a horse-racing culture in India, unlike in England or Australia. “Here, people might decide to form a syndicate suddenly at a pub and pool in the money but when they realise that their horse is not doing as well as they expected it to, they lose interest,” says Arjun Mangalorkar, a trainer.
Another appears to be disagreements among members. Thirunavukkarasu says he opted out of syndicates finally because of “disgruntled elements”. “There were even disagreements about what to name the horse,” he says. Mehta, who has had a successful run with his syndicates, says disagreements were avoided primarily because the other members had faith in him. “You need to understand that this is a sport where things can go wrong very easily. Ideally, your syndicate should have members who know each other well and trust you,” feels Mehta. Others feel that clubs should market the concept of racing syndicates better, so that more people become aware of it.
Race clubs remain optimistic about the syndicate model, hoping it will attract more people, especially first-timers, to buy horses and also mitigate the negative connotations horse-racing evokes because of its links with gambling. And given the rising cost of ownership, it might well be the way forward.
But whether you’re buying a thoroughbred alone or with a bunch of friends (or strangers), Mehta advises, “don’t look at it as a business investment. Do it only if you have a passion for it.”

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