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Breeding Capital branches out to Australia

BREEDING CAPITAL plc, the tax-efficient bloodstock investment fund run by Simon Marsh, William Sporborg and Christopher Holdsworth Hunt, has expanded into the southern hemisphere with the private purchase of two mares in partnership with Yarraman Park Stud in Australia's Hunter Valley.

William Sporborg

William Sporborg: travelled to Australia to strike the deal

  PICTURE: Dan Abraham  

The relationship with Yarraman Park, owned by brothers Arthur and Harry Mitchell, came about through "personal connections and meetings and references," said Sporborg, who along with Marsh travelled to Australia to strike the deal in May. He added: "They're very well known players, we knew them, and they came very well professionally recommended."

Yarraman Park has been associated with some high-value mares, and broke the Australian public auction record for a thoroughbred when selling the mare Virage de Fortune for A$3.4 million at the 2007 Inglis Easter Broodmare Sale.

The two mares acquired by Breeding Capital are Banc De Fortune, a Group 1 placed daughter of Galileo out of the dual Group 1 winning Danehill mare Danendri, and multiple Group winner Mimi Lebrock, by Show A Heart out of God Love It, by St Covet. Both mares are due to visit leading Australian sire Redoute's Choice.

The mares belong to the portfolio of Breeding Capital's second intake of investors, begun in 2008. The group is still adding capital, and the plan is to buy two to three high-quality mares either through public auction or privately, said Sporborg.

While with advice from consultants Charlie Gordon-Watson, Adrian Nicoll and Michael Youngs, the directors intend to hunt "in all the obvious places", they are inclined to search out private purchases. Sporborg said that despite the downturn in last year's breeding stock sales, they were outbid repeatedly at last winter's Tattersalls December sales and he expects competition to be just as fierce for the most desirable lots this year.

The 2006 fund was off to a grand start with broodmare sales in 2007, having sold £1.7m of stock from a £500,000 investment. But with a background in financial investment, Sporborg is not bullish on the general economic outlook for the next three years. However, he believes there are niches that remain to exploit.

"We think the bloodstock market correlates much more strongly with the housing market than with the equities market," he said. "I see a rocky time for the housing market, but also recognize it is very segmented - if you have buy-to-lets in Grimsby you're going to struggle, but if you have mansions in Hampshire, it's a different story. There are segments that will continue to do very well."

The idea behind Breeding Capital is to operate among the Hampshire mansions, he added.

The directors hosted open days for their 250 investors over the last couple of weeks at Lord and Lady Lloyd Webber's Watership Down Stud in Berkshire, where the 23 northern hemisphere horses owned by both funds are kept.

About half the investors, which include such eminent names as Sir Alex Ferguson, the Duke of Roxburghe and Sir David Sieff, are invested in both funds, which have a lifespan of four years.





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