To the average person, investing money can seem like a daunting and scary prospect. If you are not an expert in business, finance, or any other specialist area, it may seem difficult to understand how to choose an asset class or an individual investment.
For most people, investment is something that they do to help fund their retirement. They earn money throughout their working life, putting a small amount away each month to be able to cover their expenses in the future.
However, for the successful people who earn amounts way beyond what the average person can expect to make, investing is a much bigger part of their lives. Sometimes an investment might just be a hobby.
And while the average person may just choose to invest in blue chip stocks, bonds, and perhaps some precious metals, a richer person may choose other, more exotic investment options.
Investing in Racehorses
One of these more exotic options is an investment in a share of a racehorse. Buying a portion of a horse instead of owning it entirely is far more common. This is because it helps to spread the risk of the investment.
A typical horse can cost as much as £50,000. Some racehorses can go for much more, with the most expensive being Elizabeth Browning, which sold for £735,000.
There are on-going costs too, with veterinary bills, training fees, and other costs you would expect to pay when keeping an animal.
Investors in racehorses expect to see a return in three ways, all of which are linked to success on the track. The first source of a return comes from prize money that is won from entering races. For example, Room Number won the recent Iron Jack Maiden Handicap at Wagga in Australia. This yielded $11,200 in prize money, which will be shared among its owners.
Other returns can come from the sale of the horse either to another owner/syndicate, or for breeding after its racing career is over.
So who are some of the most successful personal brands that have invested in racehorses?
Sir Alex Ferguson
Sir Alex Ferguson is one of the best known names in English and international football. He was responsible for turning Manchester United into the powerhouse it has become, winning more league titles than any other team in England. He began investing in racehorses while he was still at United, but has carried on into his retirement.
It hasn’t been a huge earner for him, with most of his horses losing money, although he has had some successes. He earned the most from I’m Fraam Govan, generating him £45,231 in 2013, although his most famous horse was The Rock of Gibraltar.
Another footballing legend, Michael Owen was a player for Liverpool, Real Madrid and Manchester United. He has since gone on to have a career in football broadcasting.
Michael Owen has his own stables in the English county of Cheshire, where he and other footballers keep their horses. His most famous horse was Brown Panther, the King George V Stakes winner at Ascot in 2011.
Spielberg is a man that needs no introduction. His record in Hollywood is legendary, and he is considered by many as the pioneer of the American New Wave movement in filmmaking.
Spielberg’s interest in horses can be seen in the 2013 blockbuster, War Horse. He has been investing in racehorses for longer though. He has had investments in many successful horses, including AtswhatImtalkinbout which placed in the 2003 Kentucky Derby.
There are many celebrity chefs, but arguably no one has as good of a personal brand as Heston Blumenthal. Any chef can rustle you up a tasty dish, but can they create a dining experience that uses science to tell a story that stimulates all of your senses?
Outside of his kitchen/laboratory, Blumenthal is one of many celebrities that own thoroughbred racehorses.
Jeremy Kyle is a television presenter most famous for his Jeremy Kyle Show that aired on the UK’s ITV channel, and that later found itself on the US airwaves. In more recent years he has been involved in horse racing through investing in a syndicate. Unlike some other celebrities, Kyle has seen some success with his investments.
Dame Judi Dench
The legendary actress who’s received no fewer than seven Oscar nominations is a lover of horses. As well as continuing to star in Blockbuster titles despite being 85 years old, she’s spent many years investing in racehorses.
She too has enjoyed some success with horses like As De Mee and Smokey Oakey.
MC Hammer shot to fame thanks to “Can’t Touch This”. He funneled some of his earnings from this into starting his own stable called Oaktown in 1991. That same year, his horse Lite Light won the Kentucky Derby, and another of his horses finished third in 1992.
He remains involved in horse racing today, although he hasn’t had much financial success.
Legendary guitarist for the Rolling Stones, Ronnie Wood is known for living a life of excess. As part of this he funneled some of his money into buying racehorses, including Sandymount Duke which won as a 40/1 outsider at Listowel in 2014.
This isn’t his only winner though, he’s had several during his horseracing investment career.
Perhaps because of influence from Sir Alex Ferguson, perhaps because he just wanted to use some of his vast footballing wealth. Regardless, former Manchester United player, Wayne Rooney also invests in race horses.
He hasn’t had much luck though. Most of his horses retired after a string of unsuccessful races. One of the horses he bought was unnamed at the time of purchase, with Wayne calling it “Switcharooney”.
Wayne’s horses were kept at Michael Owen’s stables, and regularly raced at nearby Chester racecourse during the early to mid 2010s.
Many celebrities have made investments in racehorses, but few have been able to make significant returns. Instead, it seems that most make the investments because of their love for horses and as a different way to wager on horse racing.