Known as the sport of kings, racing has always attracted wealthy investors keen to own a winning horse. But today, the ownership of racehorses is no longer the preserve of the wealthy and appeals to an ever-widening pool of international investors.
Prices for individual racehorses start at just under €1,000 (Dh5,167), but can reach more than €100 million at auction.
At the top end, the market for racehorses is dominated by wealthy individuals. But syndicated ownership of racehorses is a growing trend, opening the door to investors with more modest means. It is even possible to buy part-ownership of a horse over the internet for as little as €50 a month.
It's no coincidence that many of the world's leading racehorse owners are from the Middle East. The development of thoroughbred horses has roots in the Middle East, with every thoroughbred descended from one of three stallions through their male line: the Darley Arabian, the Byerley Turk and the Godolphin Arabian.
The Darley Arabian is the most important of these, with 95 per cent of thoroughbreds in the UK, for instance, believed to trace back to this one stallion.
But Middle Eastern racehorse owners often look to other countries, in particular the UK, for the best horses.
The Dubai World Cup might be the world's richest horse race with a prize of US$10m (Dh36.7m), but the King George VI and Queen Elizabeth Stakes at Ascot, Britain's most important open-age flat race, is a bigger event on the international racing calendar, says one racing industry source in the Middle East. This is despite the fact that the prize money for this race is only £1m (Dh5.8m).
Races in the UK have a long-standing international reputation for being well run and for showcasing the worlds's best racehorses. Middle Eastern racehorse owners from countries such as the UAE play a key role in maintaining the UK's reputation as a global horse-racing hub.
"The links between the UK and UAE are very strong, with the Maktoum family, the largest racehorse owners in the world, choosing to base their operations in the UK," says Jason Singh, a spokesman for Tattersalls, the leading UK horse auctioneer.
"There are also numerous Dubai and Middle Eastern owners who race in the UK and the Dubai Carnival, which takes place in the first three months of each year, attracts horses from all around the world, but most prominently from the UK."
Godolphin is the Maktoum family's private horse-racing stable that is headquartered in the Emirates and was founded in 1992 by Sheikh Mohammed bin Rashid, the Vice President of the UAE and Ruler of Dubai.
Winning the right races is crucial if a thoroughbred is to go on to be a champion capable of commanding large fees at stud. Two elements determine the value of a racehorse: one is its ability to win races and the other is its pedigree. A good combination of these two factors will produce a thoroughbred horse with a high-breeding value.
The most expensive horse that Tattersalls has sold is a mare called Magical Romance, which sold for £4.83m in 2006 to the Rothschild family. According to Tattersalls, Magical Romance is the ideal example of a mare that fulfils all the necessary criteria for a top racehorse.
"She was beautiful to look at, had a pedigree that was of the highest quality and she was also a very good racehorse, winning at Group One level," says Mr Singh. "When horses of her quality come onto the open market, they make a lot of money because of the scarcity of her kind.
"If you do get things right and get a horse of superior ability, then the returns can be very rewarding. The top stallion in the world right now is a horse called Galileo and he would probably be worth in the region of £100 million, generating as he does around £25 million a year in stud fees, if not more."
But it is also possible to buy a racehorse at auction for as little as €970. Auctioneers, however, warn against trying too hard to snap up the cheapest available bargain. With training fees generally costing more than €20,000 a year, it usually makes sense for purchasers to buy a more expensive horse before investing in further training.
In any case, trainers will sell investors a part share in a good horse. It is usual for even wealthy individuals to own a quarter or even a tenth share in a good thoroughbred. There are also syndicates that offer shares in several different horses as part of the same package to help widen the prospect of getting a good horse.
In between the two extremes of buying a horse for less than €1,000 and paying more than €100m, there is a wide range of racehorses. Some are thoroughbreds that have not won an important race, while others have managed to win the odd race despite having a poor pedigree. According to Tattersalls, a horse called Sir Percy won the Epsom Derby in 2006, but sold for just $5,000 because of its pedigree. But, providing a horse has a decent pedigree, its value will be hugely enhanced if it can run important races. A stallion with a good pedigree that wins big races can often earn more than €10m a year at stud.
"The UK still has arguably the best bloodstock in the world and races in a drug-free environment," Mr Singh says. "There is also an emphasis on stamina in the UK and Europe that doesn't exist to the same degree elsewhere."
However, Australasia, North America and Japan also have large established racing and breeding industries and are significant players on the world stage. There are also well-established industries in South Africa, Hong Kong, the Middle East and South America.
This means that investors who do not happen to be based in a horse-racing centre, such as the UK or Japan, have traditionally had to spend additional cash travelling to horse auctions and races. But, today, there are a number of ways to buy a share in a good horse for a fraction of the usual cost and monitor its progress over the internet.
In May, two UK horse-racing professionals, Eamonn Wilmott and James Knight, started a Twitter-based syndicate. More than 50 investors responded via Twitter, the online social-networking service that enables users to send and read text-based posts. By pooling their resources, the investors were able to buy a colt the members of the Twitter-born syndicate called Trending. The new owners designed and voted on their own racing colours over the internet. Trending's owners now follow the horse's training via regular video updates.
Calling itself Social Media Racing, the new online syndication service is determined to take racehorse ownership to a far wider group of investors than would have been possible before the internet.
Social Media Racing's latest online offering to would-be racehorse owners is the opportunity to become part of an online syndicate for as little as £45 a month. The 140 Characters Partnership, named after the maximum number of characters allowed on a Twitter posting, offers part ownership of two leased fillies: the four-year-old Sweet Secret and two-year-old Miss Socialite.
More syndicates are now being planned by Social Media Racing and will be aimed at a variety of price levels with various trainers experienced in both flat racing and jumps. Whatever deal they go for, internet investors will have the opportunity to view their horse's progress online.
But anyone thinking of buying a racehorse, or even an online share in one, should regard their ownership as a hobby rather than an investment. Although some racehorse owners can make vast fortunes with a winner sent out to stud, most horses do not achieve this.
A novice to the sport also lacks the knowledge to make a fully informed decision about which horse to buy. Anyone buying a horse at auction is also traditionally vulnerable to various scams and cons that have been around since mankind first harnessed wild ponies more than 3,500 years ago.
"Owning a racehorse is not for everyone and from an investment point of view, it is very high risk," says Mr Singh.
Despite being known as the sport of kings, horse racing is gradually becoming more democratic with a rapidly growing number of investment vehicles being made available at every price range.
This will have the long-term effect of injecting not only large sums of capital into the sport, but also a far wider global pool of racehorse owners.