Horse Racing Partnerships 101: How are Training Expenses Paid with an LRF Horse?


It’s one of the most frequently asked questions we receive and for good reason. Understanding the risks and exposure is important when evaluating any investment. Owning a share in an LRF horse racing partnership comes with two expenditures. The initial share price to purchase the horse and upkeep/expenses. All partners pay all expenses from “Day 1”, no matter when you purchased your share of the racehorse. While this may seem like a daunting task, with LRF’s customer service, we make it easy.

On average, we budget $60,000 a year in expenses for each horse. Therefore, a 5% share of an LRF racehorse costs the investor $3,000 or – since we bill quarterly – $750 each quarter. LRF does not mark-up expenses or receive a monthly management fee. A typical LRF partnership lasts 2-3 years. Thus, a 5% share costs the partner $3,000 a year, or $9,000 over 3 years. In over 200 LRF partnerships, I can’t recall any partner being exposed financially for anything more than the initial share price plus $9,000 (for 5%). And that only happened once. We use that as our “worst case” scenario. Any partnership that has lasted longer than 3 years involved a horse that was racing/earning income to offset the expenses.

In order to operate this unique model and allow for partnership bills to be paid on time with each trainer and vendor, LRF issues four capital calls a year. In March, June, September, and December. These capital calls are simply advances and are deposited in the partnership’s separate bank account. These funds are then drawn down to pay expenses associated with the partnership. Before a capital call is issued, the managing partners review the partnership books and estimate the next quarter’s expenses. Each partner is also sent a quarterly accounting statement showing all expenditures. 

Each LRF partner receives their quarterly capital call statement via email and all of the partner’s horses are listed on one statement. The partner may write one check to cover all of the payments or use a credit card.

ALL UNUSED EXPENSES ARE REFUNDED TO EACH PARTNER. The dissolution of our partnerships occur when the horse is sold and usually consists of two distributions.  One for the sale of the horse and the other, a refund of any excess capital calls. 

Due to this exclusive model, LRF distributes all purses AS THEY ARE RECEIVED. Each partner receives a purse check generally within four weeks from the horse crossing the finish line. To save on accounting costs, we may group smaller/nominal 4th or 5th place purse together with the next race.

That’s the LRF accounting model in a nutshell. Other horse racing partnerships and thoroughbred syndicates do it differently. Not sure there is a right or a wrong way. We feel bill paying is a hassle for individual horse owners – and as part of the LRF Experience we minimize the mundane task so you can focus on the fun of owning a thoroughbred racehorse.