Breeding now the focus as Phoenix Thoroughbreds consolidates fast start
Martin Stevens speaks to the operation's Amer Abdulaziz and Tom Ludt
Phoenix Thoroughbreds has grown rapidly from seemingly nothing to become one of the major – and most talked about – players in the global bloodstock industry.
At the start of 2017 few would have heard of the organisation, but throughout the year agent Kerri Radcliffe signed for in excess of £25 million-worth of bloodstock on its behalf, including seven-figure top lots at Arqana's breeze-up and August yearling auctions – the unbeaten €1.4 million Street Sense colt Walk In The Sun and a €1.55m Dubawi colt out of Falmouth Stakes winner Giofra.
Some of the two-year-old purchases announced themselves as serious prospects carrying the white silks with orange stars of Phoenix Thoroughbreds, headed by Grade 1 Starlet Stakes heroine Dream Tree, a $750,000 acquisition from Fasig-Tipton at Florida.
She has been complemented by stakes performers Lansky, a 300,000gns Tattersalls buy, and Take Me With You, another Florida graduate who cost $800,000.
A significant stallion share in Prix de la Foret winner and National Stud newcomer Aclaim was taken and waves were made at the breeding-stock sales too, with $3m paid for Nickname, a Grade 1-winning daughter of Scat Daddy, and 925,000gns given for the Listed-placed Sir Percy mare Oakley Girl.
But in the space of a year, things already look very different at Phoenix Thoroughbreds. The association with Radcliffe was abruptly brought to an end last month and former Vinery Stud president Tom Ludt has been brought in as vice-president to oversee operations for founder and chairman Amer Abdulaziz, with agent Dermot Farrington also helping to steer the ship in Australia.
The roster of trainers in Europe has grown to encompass Ed Vaughan – who has the Arqana sale-topping Dubawi colt in his care –along with Robert Cowell, John Oxx, Sir Michael Stoute and the principal conditioner Jeremy Noseda.
In the US, Dream Tree's trainer Bob Baffert is joined in overseeing the organisation's purchases by Steve Asmussen, Chad Brown and Todd Pletcher.
Purchases at this spring's two-year-old sales have been made by the trainers feeding into Abdulaziz and Ludt.
Activity appears to be more restrained in Europe than in 2017, with one lot signed for in the name of Phoenix Thoroughbreds at each of this month's Goffs UK and Tattersalls Craven breeze-up sales for £140,000 and 160,000gns apiece – albeit the fund was underbidder on other lots and netted another three for a total outlay of $1.9m at Ocala last month.
Miraculously, in its first year of existence, Phoenix Thoroughbreds also heads to the Kentucky Derby with a live chance as Gronkowski, a Lonhro colt bought for 300,000gns at the Craven Sale, has won his last four starts for Noseda, en route to the run for the roses.
Abulaziz and Ludt took time out from a hectic schedule at Tattersalls last week – having just touched down from Australia, where seven lots were sold at the Inglis Easter Yearling Sale and a lifetime breeding right in I Am Invincible was bought at the company's Chairman's Sale – to explain how it has actually taken years for Phoenix Thoroughbreds to become an overnight success, and to dispel some misconceptions.
“We've been working on the project for four years getting the structure and investors in place and we're going to be fully regulated by the authorities in Luxembourg within the next two to three weeks,” says Abdulaziz.
“Getting the approval takes a long time. We're the only regulated thoroughbred fund out there, so the regulators don't tend to understand the structure of the racing industry and have been puzzled by it, but everybody has bought into the concept now.
“We couldn't have hoped for so much success so early, but with the quality of horse we bought we expected some good results. That's why we focussed on the highest quality from the beginning – we wanted to make a splash straight away.
“The reason for that is it convinces more and more people to invest in our fund. We always needed to establish a good track record in year one.”
In order for Phoenix Thoroughbreds to be able to return a healthy dividend to investors, the emphasis is now shifting towards breeding-stock.
“Racing represents only a small portion of the fund,” says Abdulaziz. “We didn't mean to focus on it but had to do that in the first year, because we wanted to get public recognition. A lot of the money will go on the breeding stock – the broodmares and the stallions – as we're hoping the profits will come from there.
“In Europe we only have Aclaim at the moment, and in Australia we have a leg in Invader and have just bought the breeding right in I Am Invincible. The idea is to get more and more, but everyone knows how hard it is to find the right stallion. We've had lots of opportunities presented to us but we're being selective.”
Selling the name of the game
Although Phoenix Thoroughbreds has made its name as a free-spending buyer, the necessity of rewarding investors means we should get used to regarding it as much as a seller.
“The aim is to start flipping horses,” says Abdulaziz. “We'll assess the situation as we get nearer the time. We'll look at the yearlings and decide if we want to keep or sell. But if we do sell, we'll sell the top-quality horses we breed so people keep coming back to us. We want to send a message to the outside world that we're not only buyers but also sellers.”
Ludt, perhaps with less of the emotional attachment that Abdulaziz has towards horses who are the fruit of years of toil to establish the fund, takes a more hard-nosed approach. He concedes that more could have been done to let people know Phoenix Thoroughbreds is first and foremost a commercial entity.
“I'd have a different view to Amer since I'm new in the organisation,” he says. “In my opinion, before I entered, I don't think people saw us as an operation that would sell. I would guess that some of the potential speculative offers for horses didn't come our way thinking we would never sell.
“It's something I've talked to Amer about in a couple of our meetings, saying I think we've got to get the message out there that we're in this for the business, like a lot of people. Because a lot of people would make the assumption that, maybe like a Coolmore or Goldolphin horse, a Phoenix horse isn't a viable sale prospect and that's simply not true.”
So, in a future when Phoenix Thoroughbreds is even more firmly established, would a filly like Dream Tree be for sale to an owner wanting a ready-made Classic horse?
“That's going to be the challenging part of the fund,” says Ludt. “It sounds like a vague answer, which we don't want to do, but everything we have is for sale – just as it should be for any operation. I have a major responsibility to advise Amer on at what point they're for sale. It'll be the age-old problem that we want to sell high and people want to buy low.
“No doubt a filly like her we'd have to seriously consider do we breed her and sell her in foal, or do we keep her and sell foals out of her? It's a hard question early in her three-year-old season but we have a big responsibility to our investors.
“It's a good problem to have though. If we're scratching our head over selling a filly like that, or a piece of one to form a partnership, it means we've made a great horse. And there'll be deals we'll have to accept. It's our fiscal responsibility for us to do that.”
You can almost sense Abdulaziz wince at the mention of selling another horse like Dream Tree before the full extent of her talent had unfolded. How hard would he find that?
“I can answer that for him: very,” Ludt laughs.
A chuckle from Abdulaziz acknowledges the truth behind the joke and he adds: “They do become like your babies, but Tom is absolutely right. There comes a time when as much as we love them, we cannot be attached to them. We have to think of our investors and we'll look at selling on a case-by-case basis.”
Growth in the future
Besides which, it sounds as though there are going to be many more horses for Abdulaziz to spread his affections between in the medium-term.
“Because we're a fund structure, investors want to get their money back after five years,” he explains. “But what will happen is the investment period is four years and we'll liquidate in the fifth year. The top-quality horses there before the liquidation – whether it's a successful stallion, broodmare or two-year-old – will be carried over into the second fund.
“In year three we're launching our second fund, which will be twice as big as the first one. The reason we're doing it that way is we'll have our track record by then; people know us, we've established credibility in the market and we've also shown our investors that this can be done – money can be made from horses.
“More than likely, the investors in fund number one will be the same people investing in the second fund and then we'll hopefully attract new people as well.”
So far, the investors have not been disclosed, but they are not shadowy figures lurking in the background and Abdulaziz has plans to get some hooked on horses by bringing them closer to the action.
“We're educating them about horses as none of them come from the industry,” he says. “We do hope to get people from within the sport to invest but at the moment we have outsiders.
“Hopefully with time we'll take them to sales and to farms to see stallions. By the middle of this year, we'll get these people engaged with those activities.”
Because Phoenix Thoroughbreds has gone from nought to sixty in a matter of seconds, misunderstandings around the operation have arisen, such as the nature of those investors. And it is not, the key players are keen to stress, able to buy success at any cost.
“We were trying to buy yearlings in Australia a few weeks ago but the market was so strong we had to be wise because it's an investment fund,” Ludt says. “But we bought a breeding right in I Am Invincible, we bought a filly and we sold some.”
“We're not people who came from nowhere and started throwing money around,” Abdulaziz adds. “We have fund managers to report back to, and the transparency has to be 200 per cent being regulated in Luxembourg. We like the transparency.”
Gronkowski's participation in the Kentucky Derby next month, so soon after Phoenix Thoroughbreds entered the public consciousness, should help Abdulaziz achieve his aim of attracting more investors.
It will also surely bring a special satisfaction for a man who grew to love racing by visiting Golden Gate Fields while attending Berkeley and was enthralled by the rivalry between Easy Goer and Sunday Silence.
“We've worked so hard on this for the last four years, so to see it come to life and to compete in an industry dominated by private businesses, it makes us very proud,” he says. “Nothing like this has been done before. That's why it's such an achievement.”
Tom Ludt on some of Phoenix Thoroughbreds' top prospects...
3yo b c Youmzain-Atarfe (Anabaa)
Trained by Jeremy Noseda
He just had a minor setback. This business keeps you on your toes. He'll be out for around 60 days. The good, fast ones seem to be the ones who get hurt, the slow ones are just fine!
3yo b f Uncle Mo-Afleet Maggi (Afleet Alex)
She's the definition of what we're looking to do – an early two-year-old and a Grade 1 winner. We've given her a break, she's back in light training, and will miss the Kentucky Oaks but we'll have her back sharp this summer. She did a lot early, and we considered pushing her onto the Oaks, but thought best not to.
3yo b c Dark Angel-Goldthroat (Zafonic)
He had a small throat surgery, a tie forward, so will be a little bit delayed. He's out of commission and I'd be hard pressed to think he'll run until June.
Take Me With You
3yo b f Scat Daddy-Me And Miss Jones (Smarty Jones)
The weather's created a bit of a setback; it's the same for all horses but watching her train this week she's a little bit backward from where we would want her to be. The plan is to get another race into her and get her to Royal Ascot.
Walk In The Sun
3yo b c Street Sense-Mystic Melody (Seattle Slew)
The plan is to run him in a stakes race in early May and hope for the performance we're looking for to move onto Royal Ascot.
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