Racing uncertainties

Dominic Prince says you’d have to be potty to buy a racehorse as an investment — unless your name happened to be John Magnier or Sheikh Mohammed Al Maktoum

Owning and breeding a thoroughbred racehorse can be a mouth-wateringly profitable enterprise. Sir Percy, winner of last year’s Epsom Derby, cost a piffling 16,000 guineas when he was knocked down to the Pakenham family at auction as a yearling, and costs about the same in training fees each year. To date he has won a little over £1 million in a racing career of just two seasons. Not a bad return on capital, but the risk-reward ratio is huge — and it can safely be said that anyone who buys a racehorse as an investment is potty.

That said, the really big money will come when Sir Percy retires to stud, probably at the end of the 2007 season. At that point he’ll be worth around £6 million — not a huge amount, but then he’s not particularly well bred and in racing breeding counts for everything.