Old Gold Racing

October 14, 2024

What is a Syndicate and How Do They Work?

This is our comprehensive guide to racing syndicates: how they work, the costs involved and the benefits.

Curious about racehorse ownership? Wondering: "What is a racing syndicate?" or "How do racing syndicates work?"? Perhaps you're trying to understand the difference between a syndicate and a club...

Whether you're new to the world of racehorse ownership or looking to explore affordable options, you've come to the right place...

A horse racing syndicate offers a budget-friendly way to experience the thrill of owning a racehorse without the hefty costs associated with full ownership. With syndicates like Old Gold Racing, you can co-own a racehorse, earn prize money, enjoy exclusive perks, and be part of a vibrant community of racing enthusiasts.

Not ready for full ownership? Old Gold Racing also provides a free-to-join club, perfect for those curious about racehorse ownership but not ready to commit financially. This guide will explain what a horse racing syndicate is, how it works, and the differences between syndicates and racing clubs.

What is a Racing Syndicate?

A horse racing syndicate allows a group of people to collectively own a racehorse by pooling their resources. Instead of bearing the full cost of purchasing, training and maintaining a horse alone, syndicate members share the expenses. In return, each member owns a percentage of the horse and enjoys the perks of ownership without the financial burden of going solo.

How Do Horse Racing Syndicates Work?

Below, we have tried to define some of the key terms involved in racehorse syndication.

1. Shares: A share in a racing syndicate consists of a product (the racehorse), a service (syndicate management/experience delivery), and recurring costs (training and vets bills etc.).

2. Costs: At first glance, a syndicate offering 3,000 shares in a racehorse at £60 each is valuing that racehorse at £180,000. However, there are far more costs involved than the racehorse alone. These include:

Bloodstock agent: If purchasing a horse via a bloodstock agent, a commission is charged

Training: Costs vary from trainer to trainer, but £2,500 per month is about average.

Insurance: It is important to insure the horse in case it suffers a serious injury or dies.

Veterinary: Just like us, racehorses need routine maintenance and medical care.

Racing fees: It costs money to enter horses into races, transport them to races and pay stable staff to attend to them at the racecourse.

Contingency: Horse racing is an unpredictable sport, so having a little extra money in the syndicate account to cover unforeseen circumstances is always a good idea.

Management: This is the 'service' fee mentioned above. Syndicate managers (such as Old Gold Racing) can have lots of members of staff working on fulfilment, customer service, marketing, administration etc., all of whom need to be paid.

The Racehorse: Of course, a portion of the fee goes towards a share in the racehorse too!

If you would like to see how these costs break down in the case of an actual racing syndicate, click here and select a horse to view the cost breakdown for that syndicate.

3. Syndicate terms: Many of the above costs aren't due all at once, but accrue over time. The costs involved in running a syndicate over a particular period are built into the initial share price. This period is known as the 'syndicate term'.

Syndicate terms usually last between 12 and 24 months. Towards the end of the term, owners are invited to renew their shareholding. The window of time in which owners can renew shares is called the renewal period.

In essence, this is the syndicate manager asking owners, "Do you want to continue owning this horse and paying the associated costs for the next syndicate term?".

Renewing your ownership tends to cost less than the initial share because you don't pay for a racehorse twice (you already own it, after all). Instead, owners only have to pay the service and recurring costs when they renew.

4. Syndicate net: When a syndicate manager sets a share price, they are projecting the likely recurring costs over the syndicate term. This often includes a contingency in case the horse gets injured or runs in high-class races.

There is therefore sometimes money left in the syndicate account at the end of the term. The money left over is known as the 'syndicate net'. A good (and honest) syndicate manager should return these funds to owners at the end of the syndicate term.

Old Gold Racing does this through its wallet feature. At the end of the term, the syndicate net is distributed to owners' wallets. Owners can access their wallets through the owners-only login and either withdraw the funds they've accrued or use them to discount the renewal and share purchase costs.

5. Relinquishment: If you choose not to renew your ownership in a racehorse by paying the renewal fee, you are said to relinquish your ownership. At this point, you are no longer an owner. However, you do still own a percentage of an asset: the racehorse.

Now, syndicate manager policies vary on this point, but at Old Gold Racing, we return the pro-rated value of the racehorse to people who relinquish their shares. Otherwise would be profiting by selling the same racehorse twice, which doesn't seem right. The value of a racehorse fluctuates across its lifetime, so we make sure to get an independent valuation done before the end of the renewal period.

The Benefits of Joining a Horse Racing Syndicate

The benefits of joining a racing syndicate vary greatly between different syndicate managers. We would recommend doing your research to weight up the different options. Below, we focus on the benefits of joining an Old Gold Racing syndicate in particular.

1. Affordability: Full racehorse ownership can cost tens (even hundreds) of thousands of pounds. With Old Gold Racing, you can own a share for as little as £35.

2. Share of Prize Money: As a syndicate member, you'll receive a share of any prize money your horse wins, proportionate to your shareholding. It is important to note that across UK racing, it is customary for the trainer and jockey to receive 10% each of the prize money.

Therefore, if you own 3 shares in a 3,000-share racehorse and that horse wins £10,000 then £8,000 will be distributed to shareholders, meaning that you (as someone who owns a one-thousandth of the horse) will receive £8.

Unlike some syndicates, Old Gold Racing does not take a percentage of the prize money its horses win.

3. Stay Updated: A key part of a syndicate manager's job is to keep owners updated on their racehorse(s). The quality, frequency and delivery of updates varies from syndicate to syndicate.

At Old Gold Racing we pride ourselves on having some of the best-briefed owners on the planet. We share video, photo and text updates on every horse in our weekly Saturday update email, we send email and app updates whenever your horse is entered or declared, and we send pre-race and post-race emails, including correspondence from the horse's trainer and/or jockey. In addition to this, we run live feeds via our app on racedays so that you can stay up to date with behind-the-scenes action when your horse runs.

We also run an exciting weekly newsletter, Racing Weekly, in which you'll find some of the most exclusive and exciting interviews from across the industry, insights and tips into upcoming race meetings, as well as brilliant competitions.

4. Owners Badges & Raceday Experiences: Racecourses allocate a certain number of owner's badges whenever a horse is declared to run. When there are more owners than badges, the badges are allocated via a ballot. Owners can throw their name into the hat to win an owner's badge if they can attend the racecourse. Owner's badges allow attendees to access different areas of the racecourse and usually include a free meal.

It is worth noting that even if you do not win an owner's badge, it is still worth turning up to watch your horse run, not just because there will be other likeminded owners you can meet, but also because the thrill of watching your horse run (and win!) is like nothing else...

Furthermore, Old Gold Racing will always send a company representative to the racecourse to guide you through your day at the races as an owner. This isn't the case with many other syndicates.

5. Stable Visits: As with owner's badges, tickets to stable visits are allocated by ballot. There are usually 100 or so spots available and anyone who wins the ballot will have the opportunity to take a tour of the stables, meet the racehorse trainer, ask any question they might have and - most importantly - meet their horse in person.

At Old Gold Racing we try and couple stable visits with a trip to the pub or the racecourse afterwards (two of our favourite places!).

6. Exclusive Events: Old Gold Racing runs a variety of online and in-person events throughout the year, exclusive to Old Gold Racing owners. These include breakfast Q&A's with trainers, 'Goes Racing' events with expert panels, marquee access and raceday tickets, and Zoom preview evenings ahead of big race meetings. If you'd like to find out a bit more about the events we offer, head to our events and benefits page, here.

7. Over 30 Exclusive Benefits and Discounts: Old Gold Racing also offers holiday and hospitality deals as well as merchandise discounts from a wide range of partners. Club members and owners have access to more than 30 (and counting!) deals and discounts.

8. Friendly, Welcoming Community: Old Gold Racing is known for its approachable, knowledgeable team and its fantastic community of owners. It's an opportunity to meet new people and have a great time on the racecourse, even if you're new to the sport.

Not Ready to Join a Syndicate? Try Old Gold Racing's FREE Club

If you're not ready to commit, explore the Old Gold Racing free-to-join club. This no-risk, all-reward option lets you experience the world of syndicates without financial commitment. Club members receive:

A free share in the club horse, Henry Box Brown, a winning National Hunt racehorse.

Regular weekly updates on your horse's journey.

Access to events and social opportunities with other members.

Community engagement via exclusive online groups

Access to exclusive benefits, discounts and deals.

This is an ideal way to test the waters of racehorse ownership before you think about purchasing a share. Click here to learn more.

Horse Racing Syndicate vs Racing Club: What's the Difference?

Unsure about the difference between a syndicate and a racing club? Here's a quick comparison:

Syndicate: Offers actual ownership of a racehorse share, including prize money and a say in the horse's career.

Racing Club: More passive; you pay a membership fee but do not own a share, and usually won't receive prize money. Clubs often include a lot of the perks involved in racehorse ownership, without the actual ownership piece.

How to Join a Horse Racing Syndicate with Old Gold Racing

Ready to get started? Joining Old Gold Racing is simple:

1. Explore the FREE club: Start with the no-risk, free-to-join club. (Or skip straight to step 2!)

2. Choose Your Horse: Browse the available racehorses and pick one that excites you.

3. Pick Your Share: Purchase a share based on your budget and preferences. Select a range of different welcome packs, from a free digital pack to a Gift of Gold, which includes a framed photograph of your horse, a certificate of ownership and more.

4. Pay Your Fees: Pay the one-off purchase fee - Old Gold Racing ensures transparency with no hidden costs.

5. Enjoy the perks: From stable visits to raceday access, immerse yourself in the experience.

Conclusion: Join the Thrill of Horse Racing with Old Gold Racing

Whether you're eager to join a syndicate or want to explore racehorse ownership through the free club, Old Gold Racing offers a fun, affordable, and inclusive experience. With clear pricing, a welcoming community, and perks like owner's badges, prize money, and exclusive events, Old Gold Racing is the perfect entry point for anyone curious about the world of horse racing.

Start your journey today - join the free club or purchase a share and discover the excitement of racehorse ownership! Also, if you have any further questions about how it works, don' hesitate to drop us an email at [email protected] or call the office on 01242 650 640. Our office hours are 9 am - 5 pm, Monday to Friday.