03/27/2013 12:34PM

Fasig-Tipton Florida: Polarized juvenile market yields big prices, high buyback rate

Photos by Z
Randy Hartley (left) and Dean DeRenzo at the 2013 Fasig-Tipton selected 2-year-olds in training sale, where they sold the sale-topping juvenile, a Bernardini colt, for $1.6 million.

Patronized by a diverse group of wealthy buyers, Fasig-Tipton’s Florida select 2-year-old sale Monday rang up big gains in average and median prices, another sign that the luxury market for elite prospective racehorses is strengthening.

But that’s only part of the story, consignors say. The high-end juvenile market continues to be rigidly polarized, and the Florida sale’s 41 percent buyback rate, combined with the fact that 58 of the original 136-horse catalog scratched before the auction, hinted that the high-risk yearling-to-juvenile resale business is as tough as ever.

“These are new days and new times, but I do think we’re off the bottom,” said Becky Thomas of Sequel Bloodstock, which sold all four of the horses it offered in Florida, led by a $650,000 Bernardini colt whom Three Chimneys and Alex Solis III signed for.

“I’ve not been close to my reserves on any of the horses I’ve led through here,” she added. “But it is very, very thin, and these yearlings that cost a lot of our consignors $200,000 or $300,000, we’ve got to be able to make enough money on individual horses to pay for the ones that don’t make this sale or that end up with issues. I came in with lower purchase prices than a lot of consignors, and I’m happy I wasn’t in too deep on my yearling prices. There are going to be some people who are rewarded with high-dollar yearlings, but I think the safer ground for us is to try to stay a little on the lower side and try to appeal to a broader base.”

Some of the higher-end pinhooks did pay off, as in the case of the auction’s most expensive colt and filly. The sale-topping Bernardini colt originally cost Randy Hartley and Dean De Renzo $250,000 at the Fasig-Tipton Kentucky July select yearling sale; on Monday, they sold him to Robert LaPenta (with Steve Young acting as agent) for $1.6 million.

The filly was the auction’s only juvenile by A.P. Indy and a member of that sire’s final crop. A $300,000 Keeneland September yearling purchase, she went for $1.1 million Monday on a final bid from Green Hills Farm.

Thomas also had a good pinhooking return when she and Carrie Brogden partnered to sell a $650,000 Bernardini colt from Hard Spun’s family. The Feb. 11 colt is out of the Honor Grades winner A Precious Memory. Brogden’s Select Sales agency first consigned the Bernardini colt to Fasig-Tipton’s Saratoga select yearling sale last season. Thomas bought him there for $200,000 but accepted Brogden’s request to retain an interest in the bay.

Solis, one of the agents involved in buying the $650,000 Bernardini colt, noted that the competition for such high-level juveniles remains fierce. “You’ve got to step up,” Solis said. “It’s very difficult to buy here. The horses that are falling through, they didn’t check all the boxes for this sale.”

“The buyback rate’s higher than we would have liked,” Fasig-Tipton Chief Executive Boyd Browning acknowledged, “and the reality is that there were some horses withdrawn because consignors perceived a lack of likely success in the run-up to the sales ring. It’s a polarized market that’s very good when the horses met all the criteria, and there are a lot of criteria you have to meet at a 2-year-olds-in-training sale. You have to look good at the end of the shank; you have to breeze well; you have to video well; you have to vet well; and you have to continue to walk well.”

The Florida auction’s highly select nature is a strength, but as the foal crop declines, it’s also a potential weakness, sales participants say, especially when competing juvenile markets like the Ocala Breeders’ Sales Co. in Ocala, Fla., provide a larger array of offerings.

“The quality here is excellent, but they’re either on them or they’re not,” said buying agent James Delahooke. “The quality’s here, but whether the buyers are, I’m not so sure. I think the problem they have is that there are more and more people talking about the Ocala Breeders’ Sales, where there’s so much more choice. To come all this way when they’re going to sell 50 horses, it’s not big enough. I’m sure if they could have gotten 200 horses, they would have had them, but they obviously weren’t offered the horses for this sale.”

That may be a catch-22, Solis pointed out. “Of course, you want more horses, but the quality of horses that needs to be here, they’re very expensive,” he said. “You’re not going to get a big catalog.”

Brogden acknowledged that the Florida sale can be risky, even for consignors with knockout prospects, because buyers there are willing to walk away if one element falls short of their high expectations. But she said the auction’s reputation as a source of graded winners – and home-run prices for the right horse – makes it an important date on the calendar.

“The thing that holds this sale up is all the graded stakes winners that come out of it,” Brogden said. “If you look at the numbers – Graydar, Joyful Victory, and all these top, top horses – there’s the quandary. You have six Grade 1 winners in the past 12 months out of this sale.”

Fasig-Tipton isn’t planning any immediate changes to the auction format, Browning said. “Will we evaluate the things we thought went well? Yes,” Browning said. “Will we evaluate the things we didn’t think were as successful at this sale? Absolutely. I would love to go back to the days of having 350 horses. It was a different time in the marketplace.”