Spendthrift and MyRacehorse galloping ahead into international expansion

Flush with the brilliance radiated by likely American Horse of the Year Authentic, co-owners Spendthrift Farm and MyRacehorse are anticipating the addition of more high-profile horses into their venture, which both acknowledge as successful beyond anything they imagined.

Breeders who have recently visited Authentic at Spendthrift in Lexington, where the Kentucky Derby and Breeders’ Cup Classic winner will stand in 2021, have heard that champion Monomoy Girl and fellow multiple Grade 1-winning older female Got Stormy could soon be available through micro-share investment opportunities offered by MyRacehorse.

Spendthrift acquired both mares at the recent Fasig-Tipton November sale, paying $9.5 million for Monomoy Girl and $2.7m for Got Stormy, and already has announced that both five-year-olds will continue their racing careers next year.

Citing regulations of the US Securities and Exchange Commission (SEC), which oversees capital investment markets, neither Spendthrift general manager Ned Toffey nor MyRacehorse chief executive Michael Behrens said they could comment about the possibility of micro-shares in the marquee mares being offered to the public.

Yet neither denied that such plans are in the works.

“As always, I would say, ‘Stay tuned,’” Behrens remarked prior to revealing that MyRacehorse is galloping ahead into international expansion.

The pioneering business intends to be active with fractional racehorse investment offerings in Australia by early 2021 and is currently examining the best way to possibly launch in some European countries.

“Their market is so exciting,” Behrens said of Australia, where racehorse syndications flourish and racing’s popularity is vibrant.

“We also have been looking very aggressively at Europe,” he continued. “In the UK, there don’t seem to be many regulations and restrictions and there have been others who have done a modest version of what we do.”

In the US, three-year-old Authentic has blazed a trail for MyRacehorse and his reported 5,314 share owners, leaving many people who have even the slightest interest in horseracing clamouring for chances to breathe the rare-air experiences involved with an elite runner.

“It’s not possible to describe what Authentic has meant to us,” declared Behrens, who founded the MyRacehorse venture and forged ties with Spendthrift after leaving his position as chief marketing officer for online mattress retailer Casper Sleep Inc. “My vocabulary is not good enough to put it into words.”

Ned Toffey: B Wayne Hughes “has been very involved and is a big supporter of MyRacehorse”Credit: Fasig-Tipton Photos

Spendthrift owner B Wayne Hughes “has been very involved and is a big supporter of MyRacehorse,” Toffey said. “We look forward to working with them more, and we want to provide [potential investors] with high-quality horses.

“Michael Behrens did a tremendous job in getting MyRacehose off the ground. When he pitched his idea to us, we loved it. We think it is the kind of thing that can be a big boost to racing.

“We see this as something that helps the entire industry, and right now, we think that is very important.”

Spendthrift, which also operates a breeding and racing operation in Australia, spent a total of $27.315m on 12 fillies and mares at Fasig-Tipton and Keeneland this month, and Toffey said that, in addition to Monomoy Girl and Got Stormy, two others purchased could return to competition.

They are four-year-old stakes winner and multiple graded stakes-placed Motion Emotion, an $800,000 acquisition, and five-year-old multiple graded winner Secret Message, a $625,000 purchase.

Monomoy Girl, America’s champion three-year-old filly in 2018 and the winner of seven Grade 1 events while earning $4,426,818 to date, is the undeniable headliner in the group that Spendthrift purchased.

The charismatic chestnut daughter of Tapizar, who Toffey has said will continue to be trained by Brad Cox, has gained a big fan base following her success this year, culminating with a romp in the Breeders’ Cup Distaff, after being sidelined in 2019 by setbacks including colic. She is a clear favourite to earn champion older female honours for 2020.

Monomoy Girl was acquired by Spendthrift for $9.5m after her victory in the Breeders' Cup DistaffCredit: Fasig-Tipton Photo/Photos by Z

Got Stormy, a daughter of Get Stormy who has defeated males in Grade 1 company and who transformed from an exceptional miler into a swift sprinter on turf, will continue to be trained by Mark Casse. She has won two Grade 1 events and placed in five others while banking $2,021,378.

While potential investor opportunities in specific horses could not be discussed due to SEC rules, Behrens said he has found, generally, that demand for high-quality thoroughbreds has risen so much on the heels of Authentic’s exploits that it cannot be fully met at this point.

MyRacehorse purchased 17 yearlings at Fasig-Tipton and Keeneland in September, including 13 in partnership with Spendthrift, for a total of $4.205m, with the group featuring sons of Into Mischief, American Pharoah and War Front, as well as daughters of Uncle Mo, Empire Maker and Gun Runner.

Behrens said available micro-shares in all 17 yearlings sold out prior to ever being offered to the general public. Under the MyRacehorse system, those registered with the organisation are notified of upcoming offerings immediately after they are submitted for SEC review and then allowed to indicate their interest in participating and given priority to purchase.

Some horses also have been offered in a “bundle” together, with required investment per micro-share as low as $50.

“When the price isn’t an issue, it really changes the way people view it - no matter how you enjoy the sport, it allows you to get involved,” said Behrens, emphasising the potential excitement in the racing experience as a key factor in attracting investors from casual fans to professional athletes in other sports.

Long-time breeders also have purchased shares, as have others connected to the business such as family members of Jill Baffert, wife of Authentic’s trainer Bob Baffert, he said.

“What we learned during all the high-profile media coverage of Authentic has opened us up to the idea that we were initially thinking way too small,” Behrens added, noting that he is exploring more ways to acquire promising new horses for the venture’s portfolio.

“And the more we lower the price, the more people can get involved. We don’t want financial pressure to cloud the enjoyment of the sport.”

Once fans are allowed to freely attend racing and related farm or other events, assuming that restrictions due to Covid-19 are eventually relaxed, then Behrens said investors can enjoy even more experiences with their horses.

Currently, there are approximately 60 horses within the MyRacehorse stable and a database of more than 30,000 potential and current investors that is “growing fast”.

Written into the original deal under which MyRacehorse acquired a 12.5 per cent interest in Authentic, a son of Spendthrift’s leading American sire Into Mischief, was language stating that those who purchased one or more of the 12,500 micro-shares that were offered at $206 each could come to Spendthrift and racetracks to visit the horse.

Spendthrift Farm, where owners will be looking to go once Covid-19 relentsCredit: Racing Post Photos

The micro-share owners participate in purse earnings and stallion revenue, although it will take years for the debt accrued under the partial purchase terms, including bonuses earned by Spendthrift for Authentic’s Derby, Classic and other feats, to be paid prior to revenue commencing.

Authentic’s valuation would be approximately $34.77m, according to the agreement with MyRacehorse as filed with the SEC.

Meanwhile, the reaction from breeders to Authentic, who will stand the upcoming season for a $75,000 fee, has been “overwhelming, both in terms of the number and the quality of the submissions of mares,” Toffey said.

“It’s a very high bar to gain acceptance to him. The impressive thing is, of the mares submitted, you’d have a hard time distinguishing Authentic’s book from Into Mischief’s,” he added.

Into Mischief, who just surpassed Tapit’s 2016 record for single-season progeny earnings with over $19.99m with five weeks of racing still remaining in 2020, will stand next season for $225,000, the highest advertised fee in North America. The stallion covered 248 mares this past season, according to the Jockey Club.