Do fillies/mares with racing upside command a premium?

Cover image courtesy of Inglis

This year’s Inglis Chairman’s Sale and Magic Millions National Broodmare Sale are set to offer a host of talented fillies and mares including Tutta La Vita (The Autumn Sun), Kimochi (Brave Smash {Jpn}) and Chain Of Lightning (Fighting Sun) who present buyers with opportunities to tap into prospects with significant racing upside.

Table: The 10 most expensive racing and breeding prospects sold in Australia

Of the most expensive mares sold in Australia, many have been sold as racing and breeding prospects. While not all have gone on to race for their new owners, of those that have, Sunshine In Paris (Invader) and Montefilia (Kermadec {NZ}) stand out as remarkable investments.

Sunshine In Paris was a lightly raced Group 1 winner when she realised $3.9 million at last year’s Magic Millions National Broodmare Sale to James Harron Bloodstock.

Now owned by John Camilleri's Fairway Thoroughbreds, she won the G2 Sheraco S., first-up which earned her a slot in the $20 million The Everest only to be scratched due to a a minor ligament strain. Returning from a lengthy spell, she was a narrow runner-up in this year’s G1 The Galaxy, worth $1 million.

As a 4-year-old, a host of opportunities lie ahead for the Annabel Neasham-trained mare including another possible tilt in this year's edition of The Everest.

Similarly, Montefilia, a four-time Group 1 winner, was featured at last year’s Inglis Chairman’s Sale. She was purchased by Yulong Investments for $3.4 million and subsequently transferred to trainer Chris Waller. Following the transfer, Montefilia claimed the $2 million G2 Hill S., effectively recouping nearly 40 per cent of her purchase price with that single victory.

Table: The 10 most expensive racing and breeding prospects sold in the US

In the United States, a similar trend is observed, with 70 per cent of the top 10 highest-priced mares over the past five years being sold as both racing and breeding prospects.

A notable example is Royal Delta (USA) (Empire Maker {USA}), a dual Grade 1-winning Champion 3-year-old filly, who was purchased for a substantial US$8.5 million (AU$13,005,000) by Besilu Stables at the 2011 Keeneland November Sale. Under her new ownership, Royal Delta raced 14 times, achieving seven wins, including four additional Grade 1 victories, and even secured two Eclipse Awards along way. Throughout her career with the new team, she earned over US$3.1 million (AU$4,737,000), significantly offsetting her initial purchase cost.

Similarly, multiple Grade 1 winner Shedaresthedevil (USA) (Daredevil {USA}) and seven-time Grade 1 winner Monomoy Girl (USA) (Tapizar {USA}), who were purchased for US$5 million (AU$7,650,000) and US$9.5 million (AU$14,535,000) respectively as racing and breeding prospects, went on to achieve additional Graded stakes success, helping to recoup a portion of their initial investment costs.

Table: The 10 most expensive racing and breeding prospects sold in Europe

Notably, three of the top 10 highest-priced European racing and breeding prospects have been acquired for racing interests in Australia. These include Alcohol Free (Ire) (No Nay Never {Ire}), Via Sistina (Ire) (Fastnet Rock), and Place Du Carrousel (Ire) (Lope De Vega {Ire}), all racing in the Yulong green and white silks.

Via Sistina was a standout acquisition at last year’s Tattersalls December Breeding Stock sale, purchased for 2.7 million gns (AU$5.46 million). A winner of the G1 Pretty Polly Stakes in Ireland, the 6-year-old mare kicked off her Australian campaign with a dominant victory in the G1 Ranvet Stakes, with Yulong Investment's other high-profile purchase, Place Du Carrousel, finishing second.

Via Sistina's recent runner-up finish in the $5 million G1 Queen Elizabeth S. has earned her new owners approximately $1.1 million, effectively reducing her net cost to just over $4.36 million, even before she transitions to breeding.

Additionally, Coolmore and its partners acquired Rougir (Fr) (Territories {Ire}) for €3 million (AU$4,920,600) at the 2021 Arqana December Breeding Stock sale. As a Group 1-winning 3-year-old filly, they decided to continue her training, which paid off as she went on to secure further Grade 1 victories in the United States, bringing in over US$500,000 (AU$765,000) in prizemoney for her connections.

Racing upside enhances market value

While it's difficult to estimate the price of acquisitions should they have been sold solely as breeding prospects, it's clear that racing upside enhances market value.

Henry Field, Managing Director of leading mare consignment Newgate Farm affirms that racing potential can substantially increase a mare’s value.

“In terms of mare acquisitions, we consider their estimated value plus potential earnings capacity. For instance, if a filly is valued at $1 million, and she has the potential to earn an additional half-a-million on the track, we might value her at $1.5 million,” Field explained.

Vin Cox, with his deep understanding of the mare market, agrees that racing success can add considerable value to a mare’s purchase price.

“The market certainly gets very excited about the prospect of racing on. People are attracted to the possibility of earning further black type and certainly more prize money."

“Adding a Group 1 victory can increase a mare’s value by about 30 to 40 per cent, on top of her pedigree and previous winnings.” Cox stated.

From his experience at Magic Millions, Cox noted that fillies and mares with potential upcoming races or a few more seasons left tend to fetch higher prices.

“Certainly from my experience going back to my Magic Millions days, fillies and mares that had a prospect of a race coming up or a season or two in front of them made overs.”

Premium prices but potential significant returns

While racing prospects often command a premium, there remains significant potential for buyers to realise substantial returns.

“Montefilia is a great example of the value of racing upside. Purchased for $3.4 million, her win in the $2 million G2 Hill Stakes effectively reduced her net cost to about $2.25 million," Field emphasised.

“We strongly felt that a mare like Montefilia had the racing upside to win a race like that (the G2 Hill Stakes). Mr Zhang and Yulong were smart enough to handicap the value of her potential racing upside and ended up buying what was one of the steals of the sales year.”

While still a substantial sum, it's crucial to note her promising future as a breeding prospect. For example, despite not racing on for her new connections, the progeny of a high-profile Group 1 winning mare like Sunlight (Zoustar), have been highly profitable. Her first two yearlings, sired by Justify (USA) and Wootton Bassett (GB) sold for a combined $2.8 million, already recuperating over 60 per cent of her $4.2 million purchase price.

Transparency the key for both parties

While such offerings hold considerable potential for high returns, Field emphasises the success of such high-stake investments hinges significantly on transparency, ensuring confidence for both buyers and sellers.

“At Newgate, we ensure that buyers have access to X-rays and scopes and maintain a completely transparent record of the horses’ racing potential. This level of transparency, which is standard at broodmare sales in America, is something we strive to emulate to enhance the professionalism and integrity of our consignments in Australia.

“I think plain and simply, Australian breeding stock consignments haven't been good enough. And that's where we found those big edges to try and increase the professionalism and transparency on that side of the business.

“Buyers are paying us for confidence in the integrity of our consignment. When mare owners are paying to consult with us and when buyers are purchasing off us, they are paying for the confidence of the integrity in our consignment”, Field concluded.

That said, if sellers can convincingly assure the marketplace of the real racetrack potential of their elite racing prospects, they can yield significant returns, just as buyers who successfully identify such mares can benefit greatly.

Opportunities knock

With an impressive lineup of promising fillies and mares set for the Inglis Chairman’s Sale and Magic Millions National Broodmare Sale, buyers are spoilt for choice.

The Inglis Chairman’s Catalogue highlights exceptional 3-year-old fillies such as Tutta La Vita and Kimochi, both lightly raced with significant racing potential. Tutta La Vita, trained by Chris Waller, is preparing for the Queensland Winter Carnival, with races like the G2 The Roses and G1 Queensland Oaks on her agenda. With these races offering nearly $1 million in prizemoney, her new owner could see a swift return on investment, not even factoring in potential earnings from next season's races.

Should the new owners choose to continue racing them, both fillies could target lucrative events such as the G1 George Main S., G1 Epsom H., and the $10 million Golden Eagle during their 4-year-old spring campaigns.

At the Magic Millions edition, the spotlight is on Chain Of Lightning, the G1 T J Smith S.-winning mare, who comes with an invitation to Royal Ascot's prestigious G1 Queen Elizabeth II Jubilee S. in June.

Additionally, promising 3-year-old stakes winners Legacies (Justify) and Facile (Trapeze Artist) are on offer, providing buyers with opportunities to acquire top-tier racing talent with substantial upside.