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Leading bloodstock agent, Suman Hedge, has been very busy over the last six months, heading buying lists across the country.
Here, Hedge chats with The Impact about his buying process, the philosophy that allows him to buy at the top end and how he sees the market’s twists and turns over the next few years.
Q: Recently, you bought 14 mares in the broodmare sales, spending about A$7.15 million? Is this an accurate number for the kind of monies you spend annually? Also, will you be buying more mares either at auction or privately?
A: Yes, that’s about right. We won't be buying any more for the clients that have gotten involved with us. However, we may do something of the Great Southern sale. Our planned purchases for this year are done and dusted.
Q: Where are these mares going?
A: The majority of the mares that we purchased will be residing or living at Milburn Creek in New South Wales. Some of them will be going to other farms but the majority will be going to Milburn.
Q: And these mares were purchased for different owners. Is that correct? Would you be involved in the breeding plans as well?
A:Yes. The mares are for different owners and I will be managing all the matings for all the mares purchased this year.
Q: Your 2021 yearling purchases reached an eyewatering A$11.62 million for 36 horses between the Gold Coast Sales in January to the Easter Yearling Sale. Is this a typical annual spend?
A:I'm not really like this. We have taken on a few larger clients. We have also started doing some work for Rosemount Stud. They set up a Victorian Stallion Alliance which is a group with the goal of purchasing top-quality colts with the intention of racing and hopefully producing stallion. We started that in January at the Magic Million sale and that went all the way through to the Easter sale. These colts will be trained by the likes of Mick Price, Peter Moody, Gai Waterhouse, Anthony Freedman, Danny O’Brien, Maher/Eustace and John O’Shea. This has been a bit of a break-out year for us and we have been a lot more active particularly at the higher end of the market.
Q: Would you say that this year the market has been an exceptionally buoyant market, compared to the last couple of years?
A: It definitely has been it's been an unusual year because coming into this year, the market recovered. Last year, everyone was really nervous about COVID19 and what sort of effect it would have on the marketplace this year. Just not knowing how the sales were going to look in terms of participation and whether buyers would be active with their buying online and how strong people would be. But here in Australia, our domestic economy has been pretty strong. We've been a lot less affected in other countries by COVID19 itself and were able to manage that situation a little bit better than other countries, probably because of our isolation. And the money that’s usually spent on other things like travel abroad has ended up staying home and a lot of them are investing in bloodstock in the horse racing because we've managed to keep racing going. Many have also started getting into the breeding side of the industry.
Q: Given your bloodstock investments are you expecting the market to get stronger and much more buoyant as time progresses? What, what sort of vision did you and your clients have when you started planning for these purchases?
A: I think that there are many different scenarios. Where you've got weanlings, which we are involved heavily in and pin hooking, one buys horses at a price where you know, with improvement and with good management over time you'll hopefully realize a profit. So those much more short-term goals. But because the weanling market was particularly strong, it's been much harder to procure the horses that we would like. The figures we would have like we have to pay a lot more than we would have liked. But if you don't do it then you just don't participate. You know, you either are going and buying inferior horses which are much more speculative, which is not what we like to do. We like to play at the higher end of the market and where the risk profile is lower and clients are a little bit more safeguarded.
With yearlings we were going out and identifying the horses which we thought were the best athletes and, we just had to meet the market, which was particularly strong.
And with mares, we were looking at long-term investments where we want to see this mare for the next 5 – 10 years living on our farm. Even though they've been quite expensive, we would hope that we can deliver some good results and have the right type of assets there for our clients. So, it's all a little bit different, but with broodmares, we are far happier to pay a premium to make sure that we get the ones we want because we see them as a long-term asset for us.
Q: And lastly, looking forward, where do you see the market going? Given the market’s buoyancy do you expect more buyers banding together to buy mares or to buy yearling colts with the vision to find top sires?
A: I mean, I think it was going to be at some point it's inevitable that there's going to be a correction in the market. So, whether that correction happens next year or the year after that is going to come because it's just not practical for the market to be, you know, growing and going up as quickly as it is. It's not in line with other economic markers. So, there is going to be a correction and when that happens, that will naturally cause different reactions and attrition within the markets,
I think, we have time to the question about whether that change will be in purchasing. it will. It will because it's simply too hard to be able to buy these horses on your own so yes, I expect more groups of people to come together to buy horses. In the case of broodmares. I think we'll still be in the domain of individual buyers. Although there may be some groups that form because of their portfolios and try to do it that way. That could happen. But I think, for the most part, they usually owned by individuals just because of the nature of breeding those mares and the fact that people have their own choice about, you know, beliefs as to how they do things which down and say like to use. And it becomes tricky when you've got multiple people are involved because invariably people start arguing and then it just becomes untidy. So usually that doesn't work. So don't see that changing much but with yearlings weanlings, and, and absolutely, there will be more groups of people getting together and saying, well, why should we bidding against each other and pushing the prices up? You know, we can, we can do these things together. Yes, will get less money but will be risking as well. . Risk out of the whole thing, so that's already happening. Quite a bit. And they are getting very well rewarded. At the moment, we don't have enough horses to meet the demand domestically and also, we provide horses to places like Hong Kong and Singapore. So, I think the market is very sort of reactionary and people tend to just follow.
You just have to be nimble and look at it all and look at it practically and try to adapt to whatever is going on.
Q: In November when you start your cycle, do you sort of sit down as a team and plan your season strategy based on how you think the market will perform?
A: It's constantly moving all the time. So, we don't try to overthink things. We just look at what we want. What a priority for us to get and then we try to focus in and we don't worry about what other people valuations to see. I want to get involved and participate in the sales and that’s the most important thing and try not to get caught up in all of the white noise in the background.
People think things are expensive now, but they forget that everything's always expensive. You've if you want to participate in this industry where there's so much competition it's going to be that way. And you either do it or take the risk. And you take the good with the bad and sometimes make mistakes.
We have our own convictions and we concentrate on what we do and then the other stuff really up in the air.