Magic Millions Proves Sales Market Still Strong

Syndicators have reported continued insatiable demand for shares in racehorses, following an affluent Magic Millions yearling sale on the Gold Coast, giving confidence to the strength of the middle market underlying racehorse ownership in Australia.  

Some prominent players in the industry had forecast an element of trepidation within the market leading into the season-opening auction, amid suggestions of a retracting economy and rising interest rates, factors that would likely put a squeeze on the disposable income of Australian households—in contrast with the relentless demand for racehorse ownership during the Covid-19 pandemic.

However, the record-breaking Magic Millions sale defied any such pessimism within the bloodstock industry, as unprecedented aggregate and average figures were set on the Gold Coast.

While the strength at the top end of the market was prevalent for all to see, and resulted in four $2 million-plus (AU) lots for the first time at Magic Millions, the middle market also played its hand, as syndicators splashed in excess of AU$24 million across the seven-day sale.

And their confidence in the market appears to be justified, with one syndicator reporting shares in all 10 of their horses purchased last week to be already “70 percent sold,” less than 48 hours after the conclusion of the Magic Millions sale on Jan. 16.

Victoria-based syndicators Bennett Racing spent AU$2,465,000 (US$1,722,936) during the Magic Millions sale, breaking their record price paid for a yearling no less than four times, as the operation secured an AU$400,000 Snitzel  (US$279,584) filly, alongside an AU$370,000 (US$258,615) filly by Zoustar  in conjunction with Gai Waterhouse and Adrian Bott, an AU$330,000 (US$230,657) Extreme Choice colt with Ciaron Maher, and an AU$310,000 (US$216,678) colt by the same Newgate stallion.

“The market was very solid. I think it’s the strongest market that we’ve ever been involved with,” said Nathan Bennett, principal of Bennett Racing.

“All the nice horses were making good money, and everything in Australia is going up (in price). The old $150,000 horse is now $250,000, so if you don’t back yourself in, you’re not going to be able to buy those horses.

Sales were brisk at the Magic Millions Gold Coast Yearling Sale

“The take up of shares has been fantastic. From the 10 horses we’ve purchased, we’re sitting at about 70 percent sold across the horses. Some are pretty much done, others have a little way to go, but 70 percent across all 10 is a good position to be in.”

Syndicators expending with record purchases was not an uncommon feature of the Gold Coast yearling sale. In addition to Bennett Racing’s new benchmark, Jamie Walter of Proven Thoroughbreds went to AU$470,000 (US$328,511) for a filly by Deep Field, surpassing the AU$450,000 Walter paid in 2021 for Proven’s listed-winning filly Stroll.

Joe O’Neill’s Prime Thoroughbreds and Triple Crown Syndications last week both went to their second-highest-ever price paid for a yearling; Darby Racing paid AU$1,705,000 (US$1,191,727) for eight yearlings; while Star Thoroughbreds, the leading buyer by aggregate among syndicators with 11 purchases amassing AU$2.9 million (US$2,026,984), paid a top price of AU$410,000 (US$286,574) for a filly by I Am Invincible .

Dynamic Syndications were also active at the Magic Millions sale, purchasing 13 horses for a total of AU$2,040,000 (US$1,425,878).

Among those lots was a three-quarter brother to Capitalist, a Pierro  colt out of a half sister to Fastnet Rock, and a Justify   colt out of a half-sister to group 1 winner Takedown.

Dynamic director Adam Watt spoke of how he believed the middle market presented an opportunity at the Gold Coast, with that section of the market “not as strong” as he had anticipated.

“We exceeded the quality of the horses we wanted, so we were delighted to be able to walk away with what we did,” said Adam Watt of Dynamic Syndications. “I think the market at the moment is a two-speed market, and I think that’s probably backed up by the median and the sale averages.

“The big stallion funds are going to unprecedented levels, but I thought that in the middle market there was unbelievable value for money. We’ve walked away with three Snitzels with two of them out of proper black-type mares.

“We thought some of those horses would go for much more than what we were able to get them for. I thought they’d well and truly exceed our values for what we could go to with our budgets.”

Watt said Dynamic, who sold out of all shares of horses purchased last year in November, were “ahead” of where they were 12 months ago in terms of share take up from their clients.

“Take up of shares has been unbelievable,” he said. “People are still after quality. It doesn’t matter what environment you’re in, economically, people will still want quality.

“They still want to go out and buy BMWs and look at nice homes, and the bloodstock market is exactly the same. When you’re giving people the opportunity to race three-quarter brothers to Capitalists and horses out of half-relations to Fastnet Rock…  we went there and shopped really hard and our clients have responded in kind.”