Joining a syndicate has become an entry point for many into the world of racehorse ownership, writes Rachel Bridge.

If you have ever secretly dreamed of owning a racehorse but have been put off by the enormous cost of buying and training one, then it may be time to think again. With even a modest horse costing upwards of €13,000 to buy and training fees averaging €14,000 a year, going it alone is a serious financial commitment with no guarantee of any return.

However, the past few years have seen a big increase in the number of racing syndicates being formed on both sides of the Atlantic.

There are just over 1,000 syndicates registered in Ireland but, of these, 600 were formed within the past year.

Syndicates share the costs of buying, training and entering horses for races, and any winnings, between several investors and so offer a way of enjoying the benefits of ownership without breaking the bank.

According to the British Horseracing Board, about 11,000 horses in training in Britain are owned by syndicates and the figure is rising. In Ireland, individual ownership is still the preferred choice but syndicates are becoming more popular.

Of the 4,774 horses in training in Ireland, 1,300 are in the hands of syndicates.

Many syndicates are open to anyone who wishes to join, and the cost of getting involved can start from less than £200 a year.

The term "syndicate" covers everything from a small partnership of up to 20 people who share ownership of one horse, to racing clubs that have thousands of members and dozens of horses in training, so it is important to choose one that best fits your budget and lifestyle.

Woodhaven Stud in Berkshire, for example, syndicates its two-year-old horses to a maximum of 10 owners and is offering eight shares in a filly called Turtle Island for £1,250 sterling (€1,900), with each member paying £225 a month to cover training costs.

At the other end of the scale, Elite Racing Club in Wiltshire costs just £169 to join but has about 10,000 members and retains legal ownership of the 20 or more horses it has in training.

Whichever type of syndicate you choose, you should be prepared to lose a lot more than you win. In spite of the well-publicised success of Manchester United manager Sir Alex Ferguson, who turned £120,000 into £30 million when his part-owned horse won the Prix du Moulin race in Paris, the British Horseracing Board's marketing manager, Mr Paul Struthers, warns that, on average, racehorse owners only ever recover 23 per cent of their investment.

"Owning a racehorse should not be regarded as a wise investment strategy. People have got to be prepared to lose everything," he says.

Indeed, for most part-owners, reward comes largely from the privileges that ownership confers, such as free entry to race days, access to special facilities, visits to the stables and the excitement of following a horse's progress.

It is a philosophy echoed by the syndicate managers. Mr Matthew Budden, racing manager of Elite Racing Club, says: "It is not a financial investment, it is about having a good time and it would be foolish to go into horse racing with any other expectations."

Last year, its members received a dividend of just £20 each as their share of winnings, even though one of the horses, Soviet Song, won £116,000 at Ascot and is worth several million pounds.

In the US, Mr Manny Cadima, who runs the Thoroughbred Racing Nation Ownership Programme in Kentucky, says, while most of its 350 members have managed to break even over the years, they do not get involved with the expectation of reaping a big financial return.

The programme operates by selling 1 per cent shares in a horse for between $150 (€140) and $275 a share, with members then paying $25 a month to cover training fees.

Since starting up the programme five years ago, Mr Cadima has increased the number of horses syndicated from one to 11 in response to demand: "Out here in Kentucky, just about everybody dreams of owning a racehorse or being involved in racing and this is a way in which the average person can take part.

"Most people aren't in it for the money. They are in it for the fun and the camaraderie and the activities we offer."

Membership perks include free entry to the Churchill Downs racetrack, meetings with jockeys and trainers, regular seminars on aspects of horseracing and organised trips to racecourses.

At Diamond Racing in Leighton Buzzard, Bedfordshire, meanwhile, racing manager Mr Steve Goodwin takes the view that the best way of making money out of racehorses is by betting on them.

Indeed, as part of their ownership scheme, in which Diamond Racing retains a 65 per cent share of the horse and sells the remaining 35 per cent in 1 per cent shares for £75 a month, investors are also given access to an information line offering regular betting tips.

Mr Goodwin says: "We tell our members they have no chance of making money from owning the horses. They should consider it money down the drain. We had a horse that won seven races in two years and yet its winnings only just covered costs.

"But a lot of our members cover their ownership costs by making money on betting."

Last year, some owners, who paid £900 for a share for the full 12 months, received a dividend of £300 at the end of the year, but others received nothing at all, depending on which of Diamond Racing's nine horses they had invested in.

With so many different syndicates on offer, the key thing is to do some thorough research before handing over any money.

The internet-based Racing Guild, for example, was set up two years ago with the aim of attracting 60 investors prepared to pay a one-off fee of £600 and then £50 a month to own and train three horses. Two years on, however, the syndicate has only 24 members and has had to stop training one of the three horses to save costs.

Mr Struthers says people should visit the stables and talk to the manager and trainer to ensure they are happy with the arrangement before signing up. "You have got to go into it with your eyes open. There is something about horseracing that can make people forget their common sense."

The British Horseracing Board has a directory of partnerships and syndicates on its website, www.bhp.co.uk, and also produces a free practical guide to ownership.

A final word of warning, however. Owning even part of a racehorse can be seriously addictive.

Mr Carl Leafe, who manages the syndicates at Woodhaven Stud, says about 90 per cent of the people who join one of their syndicates go on to buy a racehorse of their own. - (Financial Times Service)