Silver Spurs Equine LLC based in Cave Creek, Ariz., is one of the few firms trying to raise the bar on equine syndicates. Staffed with professionals from both the investment and equine fields, Silver Spurs employs a more methodical and diversified approach to reining syndicates than seen elsewhere. Drawing on the practices of asset management firms that incubate mutual funds or hedge funds to determine how a specific strategy will perform in actual market conditions, Silver Spurs has established a proprietary training and evaluation program for competition horses and breeding stallions.
The firm turned to Bret Stone, a 26-time world champion and 1992 NHRA Futurity winner, to direct their efforts. Stone and syndicate manager Michael Miola apply a very critical eye to breeding stallions and competition prospects, working together to identify and purchase the strongest animals. "As the saying goes, garbage in, garbage out-by restricting our efforts to only the highest quality prospects, we increase our chances for success," says Miola of their process.
Over the past few years, Silver Spurs has systematically acquired what it believes to be the best breeding and competition livestock with a goal of creating a super-elite line of reining horses. Once achieved, they will be able to control the supply and, in turn, the value of the properties. Part of the strategy was implemented last September with the purchase of Boomernic, the world's 12th Million Dollar Sire and the only living son of a Million Dollar Sire to become one himself.
With a litany of honors, championships and earnings to his name, Boomernic "will become the cornerstone of the Silver Spurs breeding program," says Stone. Ongoing searches for suitable additions have allowed them to anonymously acquire through dealers the best Boomernic mares and colts alive today, along with offspring of other Million Dollar Sires. This means that all the offspring from Silver Spurs breeding program, managed by Miola's wife, Michelle, have the genes of Boomernic and several of the other Sires. "Michael will make sure that all of the great ones are eventually owned by Silver Spurs and our investors," Stone says with a smile, exhibiting confidence in both the strategy and their ability to execute it.
Silver Spurs offers a variety of syndicates with different investment objectives. A short-term investment, for instance, is structured around 2- and 3-year-old horses trained to compete in NRHA Futurity reining competitions. The objective is to win as much money as possible during the available timeframe, then sell the proven horses to equestrians to compete in NRHA events for aged horses (4 years old and older) and, ultimately, in the 2010 World Equestrian Games where reining horses must be at least 6 years old.
Conversely, their longer-term investments are focused on breeding their Million Dollar Sire, Boomernic, to several proven broodmares each year with the goal of creating an elite line of champion prospects.
The syndicates do, however, share a common exit strategy. As soon as the present value of a syndicate's horses exceeds the future earning potential- from competition winnings, the market value of its livestock, or both-the syndicate is liquidated.
Most syndicates focus on a single aspect of reining, but Silver Spurs is active in breeding, training, sales and competition-a fact that distinguishes them from their competitors. "There is a strong probability that several of our prospects and offspring will become tomorrow's champions," says Stone. But Miola emphasizes that counting on the creation of superstars is foolish. "At the end of the day we're an investment firm, and we have to generate results for our members. With diversification and careful management, we can deliver consistent and reliable performance."
Reining is all about having fun, but the competitive spirit is alive and well at Silver Spurs where the team shows up each day with every expectation of winning!
Michael Miola is co-chairman of NorthStar Financial Services Group LLC, a pioneer in the mutual fund and ETF industry, and manager of Silver Spurs Equine LLC. More information can be found at www.SilverSpursEquine.com.