Who is an owner? What's your story?

[parsixfarms]

Originally Posted by Storm Cadet

Guys: Here's an excellent article/transcript from Bloodhorse regarding ownership by Terry Finley of West Point TB. Great read: Great question and answer from the public!

http://www.bloodhorse.com/talkinhorses/TF071207.asp

Terry Finley's first answer in that chat is almost comical when he says that it "is very important ... to keep your distractions down at the sale and be as focused as possible." This coming from a guy who every time I saw him over four days at the Timonium yearling sale last fall was playing cards under the tent adjacent to the sales pavilion with bloodstock agents and pinhookers.

[The Bid]

It really is funny, the entire article is funny. The only part I like about it is the guys from Cleveland calling in, they are great guys.

[parsixfarms]

The most telling statement is where he says that "We do not take a position in the horses ourselves if we can help it." So basically, the West Point principals are participating in the horse business entirely with other people's money, with West Point incurring risk only if their rather large mark-ups fail to cover any unsold shares in the horses.

[Storm Cadet]

Originally Posted by parsixfarms

The most telling statement is where he says that "We do not take a position in the horses ourselves if we can help it." So basically, the West Point principals are participating in the horse business entirely with other people's money, with West Point incurring risk only if their rather large mark-ups fail to cover any unsold shares in the horses.

All the horse partnership companies operate that way. That's their goal as we discussed earlier. Sell out all partnerships. If you build 10 homes in a development, does the builder only sell 9?

[parsixfarms]

Storm Cadet,

I fail to see your point. As the manager of a small upstate NY partnership, I find it much easier to recommend that people buy into a horse in which I already have a significant stake. It's one thing to say that their goal is to sell out all shares in all horses. Who doesn't want to do this? It's quite another thing to say that their goal is to sell out shares in horses in which they do not want to risk their own money. And they are clearly saying that they do not want to have any "skin in the game."

[Storm Cadet]

Originally Posted by parsixfarms

Storm Cadet,

I fail to see your point. As the manager of a small upstate NY partnership, I find it much easier to recommend that people buy into a horse in which I already have a significant stake. It's one thing to say that their goal is to sell out all shares in all horses. Who doesn't want to do this? It's quite another thing to say that their goal is to sell out shares in horses in which they do not want to risk their own money. And they are clearly saying that they do not want to have any "skin in the game."

Do you charge management fees to your clients or any markups on purchase fees, trainers fees or anything else?

[parsixfarms]

Originally Posted by Storm Cadet

Do you charge management fees to your clients or any markups on purchase fees, trainers fees or anything else?

No, I don't. I am simply reimbursed for the actual expenses that I incur on behalf of the stable.

[NoLuvForPletch]

Originally Posted by Storm Cadet

All the horse partnership companies operate that way. That's their goal as we discussed earlier. Sell out all partnerships. If you build 10 homes in a development, does the builder only sell 9?

Actually, all horse partnerships do not operate this way. The partnership I am involved in does have a position in the horse. As Terry says, their partnerships are not for everyone. I'm not defending that statement, but at least they are open about it and are comfortable with the idea that they are purchasing an animal for a significant amount less than what they are syndicating it for. It is the buyer's responsibility to understand what the deal is and that they are paying $44,000 for 10% of a horse that WPT purchased at auction for $205,000.

Personally I think it is tough enough break even in the game that paying twice as much for an animal than it was valued at auction just a short time prior is tough to swallow. On top of that they charge a maintainance fee and take money off the top of the earnings after a certain level. For each of the good stories (Flashy Bull, High Finance and Dream Rush) there are 5 not so good one's.

But like I previously stated, if you are looking for the stuff that they are offering for the mark-up (whatever that might be when they call themselves the "Ritz Carlton of the Industry"), apparently they are your guys.

[Storm Cadet]

Like Terry said, and I'm not endorsing West Point here, I left them years ago, is that some FOR PROFIT business models like his, Dogwood, Peachtree, Sovereign et al, do operate this way and they are very successfull with it.It's just another business model that they are comfortable with. It is NOT for everybody and they admit it!

I would love to start a stable and share like you do. We all split the risk! In fact a group of former CVF owners are trying to form their own with the main startup person holding 50% stake.

[geeker2]

I am envious..I am involved in a Racing Partnership where we can even get he Major Partner to give us the Financials.

Needless to say the experience has been less than fulfilling

[The Bid]

How envious can one be of a business outline that doubles the purchase price of a horse? You would think they were brokering diamonds or selling cars, to me its excessive