Syndicates – Is it time for proper regulation?

There is no denying that the advent of syndicates has had a massive, beneficial effect on horseracing both here in the UK and elsewhere.  Those who follow my musings on here will know that my support for them, and any means we can find to introduce new people to the joys of racehorse ownership, is something I have long supported.  A well run, accountable syndicate is fantastic for all concerned and I do not wish to give the impression that issues are widespread in this part of the racing industry – they are not!  We are lucky to have a majority of honest syndicate managers but they can be cruelly tarred with the wrong brush because of the unscrupulous and poorly regulated activities of a few.

Never a day goes by without a syndicate winning a race in the UK, with some regularly featuring in Group races.  The chance that a well run syndicate or racing club offers to its syndicate examplemembers to reach the highest levels of racing for affordable sums has to be welcomed, and has certainly given a new market to breeders who can now offer horses to a wider pool of buyers or even lease horses in order to gain the benefits of race results, whilst reducing the outlay to syndicate and club members in buying horses in the first place.


The RSA is a welcome, albeit self-regulated, part of syndication

Of course, in previous times, syndicates and clubs tended to be partnerships between exisiting owners, close family, established business partners or run by newspapers (Daily Mirror Racing Club for example) or other established agencies.  However with the relaxation of qualifying criteria by the BHA a few years ago, and the abundance of horses at the lower end of the sales spectrum, this is no longer always the case.  As a result total strangers can now become partners in a horse, marketing on social media allows syndicates to fairly easily reach mass markets and to offer what appear to be, in the majority, excellent deals.  The only issue is that the framework seems to be missing vital protections for many people involved in the process:

Members – they are asked to pay a fee either as a lump sum or on-going monthly payments – some both.  This may include actually owning a part of the horse or it can be just a lease basis where they pay the training and other fees but never own the horse.  This was the case famously with Rock of Gibraltar at Coolmore and Motivator and the Royal Ascot Racing Club – both of which ended with unhappy partners.

Syndicate / Club Managers – they are required to perhaps carry the cost of the horse until the shares are sold and may find that they are left with uncovered debts in the event that members cannot be found or fail to pay their dues.  Of course they can use syndicates to finance their own racing apsirations and, in some cases, run the horse under their own name and fail to inform the authorities of any other involvements.  That demands a high level of trust from members, and from the BHA with their integrity concerns.  Worse still they are entrusted with other people’s money with no requirement to provide accounts to the BHA, and only annually (based on BHA / ROA best practice) to members.

Trainers – they have to provide training for a horse where they know all the shares are not sold and therefore may have to give a discount as a result.  They may decide to take a part of the horse to ease the burden.  And if it all goes wrong, whilst the BHA provides for such eventualities, it can take a number of months with mounting costs to resolve,


Rebecca Menzies was forced to take control after the failure of EPDS – a move which saved members the loss of money – but should it be down to trainers to sort this?

and if the trainer then sells the horse as is his or her right, they can be accused of robbing the membership of their horse.  The well documented cases recently of this happening such as EPDS Racing in June 2019 serve testament to this.

Breeders – they sometimes lease their horses, may  reduce the selling price or on a “no win – no fee” sale basis, or may even give surplus stock away to new syndicates to help them start up and to reduce holdings of unsold, well bred stock.  If that goes wrong then they have a horse that never races and may even be returned in the event of syndicate failure – an unproven, older and unsellable mouth to feed.

If you visit the BHA or ROA websites you can download draft syndicate agreements.  These seem at first sight to be ideal for purpose, but they refer to areas of ownership and regulation which some syndicate managers and members do not understand.  I know from experience that when a dispute is raised with the BHA over ownership issues, they simply tell the parties to go to court as they are not interested.  Certainly the syndicate manager / senior partners have to be registered owners, but this can be circumvented fairly easily by using a proxy to “keep the costs down”.

In a recent case a breeder had attended the sales in September 2018 with a well bred yearling colt which failed to sell.  Left with fields full of mares and fillies, the breeder contacted a trainer and asked if he would take the horse and either sell it to existing owners or perhaps offer it to a syndicate so as to reduce purchase costs and allow affordable ownership to its members.  In the meantime the breeder agreed to pay a small “keep fee” to cover feed and stables, and, in the event of a sale they could either recoup that cost from the sale or, as in this case, simply retain a small percentage of the horse to race.  After all it would assist any syndicate to know that at least some of the shares were already taken.  The horse would then run as “X Syndicate & Partners” with the breeder remaining separate to the syndicate financially but in partnership with it.

Early in 2019 the trainer was approached by an individual looking to set up a syndicate, and of course the horse in question was ideal for this.  My understanding is that the trainer agreed to reduce training fees for a short period to allow shares to be sold and retain whatever shares were still left until they were sold if required to do so.  Obviously the longer the shares went unsold, the more the trainer invested of his own time and money and as such a “premium” was agreed whereby there was a small intial fee to cover the transfer of the shareholding to the new member (and reimburse the trainer) whilst the new member would then pay a small monthly all-inclusive fee to the syndicate for training etc.  The breeder was not aware of any of this and indeed did not need to be given his share would not be part of the syndicate anyway.

Early in July, alarm bells rang when the trainer contacted the breeder to say he did not know what to do with the horse as the training fees were not paid by the syndicate.  Certainly he had received some fees but with a horse in training now for 6 months, the costs were mounting and the syndicate had not updated him with the amount of shares sold.   Furthermore, a social event in aid of the Injured Jockeys Fund had been organised by the syndicate manager,  held in June and a donation of around £900 had been raised.  The event was also used as a members’ social event and marketing opportunity to attract new shareholders.  The trainer had contacted the IJF to see if that money had been paid to them, and it had not.

Next, the syndicate manager contacted the members and said he could no longer run the syndicate and volunteered the breeder to run the syndicate.  Obviously this was a unilateral decision by the syndicate manager, but the breeder, left with little other options, asked the syndicate manager to forward details of ownership shares, funds paid etc. in order that the necessary due diligence could be carried out and a decision made by the breeder if they would take the syndicate over.  As you may already have guessed, all of a sudden this information was not forthcoming.  Furthermore, the syndicate manager contacted the members, who by now were rightly feeling that there was a scam going on, and said that the breeder and the trainer had somehow planned it all and that he, as well as them, were victims of a pre-planned conspiracy – even posting such on social media.

To be clear, the trainer is a very successful Group winning professional of the highest integrity and the breeder had simply given a horse away and kept a small interest in order to, at the very least, ensure the horse was fed and cared for until a buyer could be secured, and for which he had no expectation of a fee.  Additionally, save for attending an owners’ day in April 2019, the breeder had no other contact with the syndicate and had received no money or benefits from anyone in the deal.

The circumstances in this case show how an unscrupulous syndicate manager can not only receive thousands of pounds from people with little or no understanding of the BHA requirements or regulations around syndication, but as a result can dupe them into thinking none of it is his fault and that rather than giving them a copy of the accounts to assess, instead is trying to say 2 other parties with far more to lose than could ever be gained, should be questioned and asked to account for the money – despite having never received any of the money he so cruelly duped from the members and witheld from the IJF.

As discussed at length by many in the racing community in June when EPDS collapsed, it is surely time to ensure such group ownerships are properly registered and administered, have a base-line financial deposit scheme (trainers after all have to show a £40K available cash fund to be licensed), and there is recourse for all parties in the event of failure or wrong-doing.  Syndicates are vital to the future of racing and ALL concerned deserve the protection and reassurance such requirments would offer.  Exisiting syndicates and racing clubs, run by professionals of the highest integrity have nothing to fear, and new syndicates and members can feel they are joining a well managed and financially protected agreement.


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