backBlood-Ex... an evolution in Racehorse ownership
The soft launch of the world’s first bloodstock share exchange
Noon, 16 June 2008
The team behind the highly successful launch of Re-Offer.com which recently staged the world’s first online Breeze-Up sale has created yet another ‘first’ for the world of racing and bloodstock ownership
Today sees the soft launch of www.blood-ex.com the first international online bloodstock share exchange for the fractional ownership of racehorses. The official full launch of the Exchange will take place in the summer. The Blood-Ex site makes it simple for anyone, even those with little or no knowledge, to acquire shares in a top quality racehorse for just a few pounds per share.
Throughout the coming week registered users at www.blood-ex.com will be able to ‘trade’ in the horses running at Royal Ascot by taking part in the ‘live user simulation period’ to enable people to become familiar with using the Exchange. The ‘live user simulation period’ will allow owners of racehorses an opportunity to see what would happen if they decide to sell minority interests in their racehorses on an exchange. On registration, the accounts of users participating in the ‘live user simulation period’ will be credited with a notional £1,000 of value allowing them to build up and trade their portfolio of horses engaged at the Royal Ascot meeting this week. On Monday, 23rd June all simulation trades recorded during the Royal Ascot trial will be wiped off the Exchange and all user accounts will be reset to a zero balance in preparation for the full global launch of the service in the summer when the trading platform will be Live.
A spokesman for Blood-Ex said... ‘we want to give everyone an exciting opportunity to try the Exchange for themselves. The quality of racing at Royal Ascot guarantees an exceptionally active trading environment and owners of racehorses will be able to witness, at first hand, the market value and commercial interest in their horses. The transparency of the market will be very exciting’.
The Concept
In the run up to the full launch of the Exchange in the summer any owner with a horse ‘in training’ can register to list part of their horse on Blood-Ex. That proportion of the ownership is broken down into Beneficial shares and those shares are made available on the Exchange for purchase and resale. Blood-Ex users can select the horse and the number of shares they want to buy. At all times they remain in complete control of how much money they spend. As a result, racehorse owners are able to liquidate capital tied up in horses currently running whilst retaining control of the horse.
To ensure quality, Blood-Ex restricts the Exchange listings to horses that have a global handicap rating equal to 85 in the UK or its equivalent anywhere in the racing world. Racehorses that have not yet attained such a rating will also be eligible to have their shares listed on www.blood-ex.com provided that they sold at public auction in the previous twelve months for a value of not less than £40,000 or US $80,000 or the currency equivalent in any major racing location through the world. Alternatively, an owner whose horse does not meet either the rating (85 rated) or valuation (£40,000) criteria can apply to Blood-Ex for an exemption which will particularly appeal to owner/breeders wishing to partially liquidate their commercial interests in young or un-raced horses. Blood-Ex (The International Bloodstock Share Exchange) also offers users access to various information and links that will assist purchasers in researching the available horses. The initial ‘indicative share price’ is set by the valuation team at Blood-Ex until an owner applies to list their shares at which time a formal ‘offer’ price will be established by the owner indicating at what price they are willing to sell. The existence of both the Bid and Offer price establishes the value and liquidity for each horse quoted.
Purpose
The purpose of Blood-Ex is to widen the appeal and accessibility of racehorse ownership globally. In addition, the service will allow owners to partially liquidate a portion of their ownership of a racehorse at any stage throughout its racing career. Blood-Ex will make it easier for owners to invest further in racing by enabling them to free up capital presently locked in to horses which they are already racing. Previously, some owners have felt constrained by a need to sell a racehorse before acquiring another and Blood-Ex believes that this may be causing some owners to avoid any participation in the early yearlings sales which take place annually. In addition, recent press reports suggest that the bloodstock markets are being targeted by Hedge Fund managers with one new $100m (£51m) fund having already been announced in New York. A spokesman for Blood-Ex commented; ‘It is important to racing that it is able to attract such new money and the Exchange allows this involvement to be made in a way which the fund management community understands and is comfortable with’.
Buying and Selling
Once listed on the International Bloodstock Share Exchange (Blood-Ex) shares can be bought and sold as often as Blood-Ex users like. The share value fluctuates depending, amongst other criteria, on the performance of the horse on the racetrack. Speculation and other market forces such as injury may also affect the value of any horse quoted. As a result trading activity is likely to be high in the moments just before or after the horse has run a race. All shares purchased through Blood-Ex will carry automatic mortality insurance the value of which is calculated by the average valuation of the horse on Blood-Ex during the prior 90 day trading period. This means that shareholders are able to recover some, if not all, of the value of their shareholding in the event that any horse loses its life in normal circumstances.
Affordable Ownership
Blood-Ex is designed to broaden the appeal and access to racehorse ownership whilst also making it affordable for everyone. Shares purchased on Blood-ex give the buyer a ‘beneficial commercial interest’ in any horse whose owner has listed shares in that horse on the Exchange. Previously an individual wishing to enjoy a shared interest in a racehorse would either have needed a significant amount of money or they needed to be part of a racing club or syndicate. Even through these options the cost of ownership can be prohibitive given the requirement of ‘owners’ to contribute towards training and other up keep costs. Uniquely, therefore, shares purchased on Blood-Ex are free of any liability by the buyer to contribute to the running costs and training fees of the horse. However, in return, the purchaser does not receive any element of prize money. Nick Carthy, Head of Technical Development at the Exchange says; ‘Blood-Ex will give new definition to the meaning of a racing syndicate. In addition we hope to attract and convert those people who may consider wagering to be a form of investment, to understand and appreciate that Blood-Ex not only has many of the attributes which they seek but that it might also be capable of offering them alternative value’.
If the Registered and legal Owner (at Weatherbys or the international equivalent) subsequently decides to sell the interest in the horse which they have listed on the Exchange, then the shares on the Exchange are automatically suspended at which time the current holders of any ‘exchange shares’ will receive their portion of the proceeds from the sale of that horse once the sale has been concluded.
Blood-Ex creates the opportunity for its users to trade in and out of shares as many times as they desire building up a portfolio of bloodstock interests along the way. Importantly, this has the effect of spreading risk for buyers.
Sellers
Registered owners can sell up to 49.9% of any horse they own or 75% of their legal shareholding in that horse. When an owner applies to list their shares on the Exchange their ownership of the horse is checked with the racing administrator in their country (Weatherbys in the UK) and the interest of Blood-Ex in the shares of that owner is formally recorded.
Background
Blood-Ex has been developed by the same team that delivered Re-Offer.com, the Online Bloodstock Auction Site. Over £1m of bloodstock has now passed through Re-Offer.com since its inception just six weeks ago. In addition, the team also delivered the world’s first online Breeze-Up sale earlier this month to widespread acclaim.
www.Blood-Ex.com is the brainchild of Valentine Feerick, a leading racehorse owner.
During the development of Blood-Ex extensive conversations have taken place with The British Horseracing Authority and Weatherbys whose support and cooperation has been invaluable. Prior to launch Blood-Ex was also presented to the National Executive Council of The Racehorse Owners Association. The Exchange will be rolled out internationally over the next 18 months with discussions beginning to take place in North America. Middle East and Asia
Quotes
Valentine Feerick – for Blood-Ex
‘With the coming age of the internet it seems logical that an international bloodstock share exchange for racehorses will play an important role in broadening the appeal, accessibility and liquidity of racehorse ownership. I firmly believe that racehorse owners around the globe want to be able to liquidate racehorse assets at a time of their choosing thus enabling them to increase and manage their involvement in the thoroughbred markets. I could not be more excited and my pride in the development and technical teams who built both www.blood-ex.com and www.re-offer.com is immense in all respects.’
Paul Dixon – President of the Racehorse Owners Association speaking in his personal capacity
‘I welcome any innovation which would entice new owners. The International Bloodstock Share Exchange (Blood-Ex) not only gives existing owners the chance to liquidate their assets at any time of year and not to have to wait for a particular sale but also allows prospective new owners to buy in a small percentage and sample the delights of racehorse ownership. I am sure it will be a great success.’
James Oldring – for British Horseracing Authority
‘The development of Blood-Ex is an exciting innovation in the world of racehorse ownership, with the capacity to bring the excitement and drama of racing to a whole new audience. The scope for the site to appeal to a global market means that British racing can continue to be recognised as the best in the world.’
Andy Stewart – leading racehorse owner and joint owner of record breaking Royal Ascot bound 3yo Fleeting Spirit
‘Almost all markets have an on line system for speed, transparency and convenience. I am extremely impressed by this innovation.’
Anthony Stroud – leading international bloodstock agent
‘This is a very innovative idea, has huge scope, potential and implications for the bloodstock world. ’
Media Opportunities
• Valentine Feerick and Alison Murray are available for interview and comment.
Contact Information
For further information please contact:
Nick Carthy at ncarthy@blood-ex.com or telephone 00 44 1525 864061