Cartwright
Thoroughbred Ownership Groups-
How They Work
Cartwright Thoroughbreds develops, procures and manages horse ownership
packages for racing enthusiasts to share in as a group. Our goal
is to allow members to experience the exciting world of thoroughbred
racing while mitigating the risk of their investment.
A group of members join together and their investment is diversified
across a multi-horse package. As a result, members share in the
prestige and excitement of owning thoroughbreds without the full
financial commitments, administrative responsibilities, and risks
associated with full ownership.
The company advances every effort to acquire and develop winning
horses for our members, but is equally committed to providing investors
with as positive a personal experience as a financial one.
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An
Example Owner Group Package
This
horse package proposes an initial contribution of $60,000 (total)
from a group of four investors, calling for an investment of $15,000
per member. $40,000 of the total is allocated toward the purchase
of percentage ownership among several racehorses. For example, the
group may purchase 50% of one horse, 25% of another, and 25 % of
a third, acquiring partial interests in three different horses.
The remaining $20,000 is maintained in a business account covering
operational and administrative day-to-day expenses primarily including,
but not limited to, training and racing costs. All purse monies
earned by the horses are deposited into this account.
Monies are first applied to pay the ongoing operational costs of
maintaining the stable and the account must maintain at least three
(3) months estimated operating costs at all times. In the event
that this minimum balance is reached and the account needs to be
replenished, a capital call covering an estimated three (3) months
expenses may be necessary to meet ongoing operational obligations.
The average cost of training and racing one horse is estimated at
$2,500 per month. As the LLC will own portions of several horses,
it is estimated the operating costs will be the equivalent of owning
a full percentage of one horse.
CLICK
HERE to see a "cost structure" chart for this example
Ownership Group.
In
the event that a member is unable or unwilling to meet additional
contribution requirements his or her ownership shares are made available
first to the remaining members and manager then to approved new
investors. If a member defaults on his/her obligation to contribute
supplemental capital calls to cover expenses and fails to sell or
transfer the ownerships interest, the company may call that ownership’s
interests for a nominal amount as outlined in the Operating Agreement.
Additional upfront costs include formation of the LLC and the associated
monthly fees for the LLC administrative maintenance including legal
and accounting expenditures.
At the end of each year, disbursements will be made to the members based on the account balance of December 31. All monies in excess of six months estimated expenses will be disbursed to each member in accordance with his/her respective share. For example, if the business account holds $55,000 on December 31, each member will receive $10,000. That is, $15,000 will be kept to cover six months expenses and the remaining $40,000 will be disbursed to each member as a return on their investment.
Once each member has recouped their initial $15,000.00 investment and profits are earned, only then shall the manager collect a fee equal to a 20% share of all profits thereafter. While the manager may reimburse himself for out-of-pocket expenses associated with the operation of the LLC, he will not receive compensation until each investor has their initial investment returned.
How
are the horses selected for purchase?
It
is the Manager’s, Bill Cartwright,
duty to select and purchase horse shares for the LLC. The Manager
may employ one of any several different strategies based on his
own knowledgebase and expertise. Horses will be selected according
to confirmation, bloodlines, and the manager’s overall assessment
of the horses fitness and look. The horses may be purchased privately
or at public auctions.
Horses
will generally be based in the Midwest, competing in Illinois, Kentucky
and Florida. It will be each member’s responsibility to be
licensed in each state that the horses will be racing. Cost of a
National license is $150. Fingerprints will be required.