Stud investments attract interest

Press, 2 June 1984, Page 21

Stud investments attract interest

By

NEILL BIRSS

Partnerships in throughbred studs are the latest wave of new investment being offered to the public. The initial attraction is the tax advantage: investments in stallions are entitled to 50 per cent depreciation from the first year, those in broodmares are eligible for SSUrd per cent depreciation, and when these mares are 12 years old or more the whole of the

investment can be written off in the first year. Newmarket Breeding, Ltd, and Company was registered in Auckland yesterday. It is being promoted by the merchant banker, Fay, Richwhite. On a smaller scale, Fencourt Farm Stud, Ltd, and Company of Cambridge, has attracted wide investor interest in the South Island from advertising in “The Press” and in Dunedin. Mr Michael Martin, the codirector of Fencourt, was in

Christchurch yesterday. He said that investors were being offered partnership shares at $lOOO each. This would entitle them to an ownership share in a selection of bloodstock. In the first year, a partner with $lO,OOO invested would be entitled to a tax write-off of about $4200. He emphasised however, that the major aim of the investment was to make profit and further New Zealand's bloodstock industry. The firm had retained Mr Jim Campin, a well-known racing breeder and the owner of the prominent stallion, Vice-Regal, as a bloodstock adviser. The firm’s partnership concept had aroused more interest in the South Island than the North, he said, perhaps because a number of private partnership bloodstock ventures had recently been floated in the North. He claimed more than 300 people had applied for prospectuses after the firm’s advertising. Newmarket Breeding, Ltd, and Company, is a $3.5M venture which says it intends to buy premium quality mares “at the top end of the bloodstock market” with a strong emphasis towards bloodlines popular in the Australian and South-East Asian markets. “Shares in selected stallions will also be purchased to ensure that the yearlings produced by the partnership meet the demand from international buyers,” the company says in a press release. The mares purchased by Newmarket will be agisted at Mr Jim Otway’s Trelwaney Stud at Cambridge. In the last four decades, Trelwaney Stud has produced either the dams or sires of seven Melbourne Cup winners. Decisions relating to bloodstock purchase for the partnership will be made by Mr Otway in conjunction with Mr Patrick Hogan, who will act as bloodstock consultant. Mr Hogan stands Sir Tristram and Danzatore at his Cambridge Stud. The partnership will have 3500 units of $lOOO each. The offer opens on June 12 and will close on August 31 unless earlier filled. Applications must be for a minimum of five units, and 25 per cent of the capital subscribed for is to be paid on application, with the remainder paid in instalments in July and September. Newmarket Breeding will extend Fay, Richwhite’s involvement in the bloodstock industry to almost SIOM. According to the promoters’ statement in the prospectus, the partnership follows on from the Saratoga Breeding and Epsom Breeding partnerships previously formed by Fay, Richwaite. According to its prospectus, the Fenceurt Farm Stud has a capital of 750 units of $lOOO, of which 730 are available on subscription, and $475 of this is payable on application. Fencourt Farm Stud Ltd, is the “general partner.” Mr Martin, and his co-promoter, Mr P. L. Kerr, of Christchurch, are the first of the two special partners. Between them, they beneficially hold 20 of the $lOOO units. In the case of Newmarket Breeding, Newmarket Breeding, Ltd, wholly owned by Fay, Richwaite, and Company Ltd, the promoter, is the “general partner.” The prospectus says the only special partners at present are Messrs H. M. G. Fay and D. M. Richwaite, each of whom “beneficially owns,” one unit (the prospectus says they will subscribe for further units).