08/07/2008 11:00PM

Fasig-Tipton weathers fiscal squalls


LEXINGTON, Ky. - D. G. Van Clief Jr., chairman of Fasig-Tipton, has reason to be satisfied with the current state of affairs at the nation's oldest Thoroughbred auction house. Despite a tougher economy, the sale company's 2008 Saratoga select yearling auction managed to bring in figures close to last year's. And the company's long-term future looks bright, thanks to Fasig-Tipton's April sale to the Dubai-based Synergy corporation.

It's hard to believe that just 17 years ago Fasig-Tipton was on the brink of closure.

After the 1991 Saratoga auction, when the average and median prices fell to $120,496 and $80,000, Van Clief feared "we'd be putting a padlock on the gates."

"It was a combination of factors which included a crashing Thoroughbred market and a shrinking market share for this company, along with the fact that the company was carrying too much debt at the time," Van Clief recalled. "That contrived to put the company in real jeopardy."

The jarring 1991 losses made one fact brutally clear: Fasig-Tipton needed to change.

"I'll always remember at our board meeting following that sale, looking through the results for a strategy to take the company forward," Van Clief said. "What we very clearly saw was the fact that the market had stopped putting a premium on pedigree if the pedigree wasn't matched by good conformation. It had started putting a premium of well-conformed, well-made young athletes."

The Hettinger family led a refinancing effort at Fasig-Tipton, acquiring a majority interest in the company in 1991. And the company restructured its management and staff.

"We brought real horsemen in to run the company," Van Clief said. "Our goal was to create a company run by horsemen for horsemen."

Fasig-Tipton gradually regained a toehold in the market, aided by booming yearling sales from the late 1990s and into the 2000s.

So what's next? Since Synergy announced the Fasig-Tipton purchase, little has changed outwardly, and company executives say they are in a "brainstorming phase."

The sale announcement hinted at possible new paths, such as new racehorse owner recruitment programs, but so far Fasig-Tipton executives are keeping mum.

"The company's been in great shape for a long time and long since regained its market share," Van Clief said. "It's regained its reputation for integrity and service. I think there's a bright future ahead. There are no concrete plans that we can talk about yet, but the goal will be to make it a stronger, better corporation in every way."

Testing requests rise

Fasig-Tipton received steroid test requests for 30 of the 122 yearlings it sold at the Aug. 4-5 Saratoga select auction. That's about 25 percent of the horses sold and is up sharply from the Kentucky July sale, where buyers requested tests for just 7 percent, or 22, of the 305 yearlings sold. None of the July yearlings tested positive for exogenous anabolic steroids. The Saratoga test results could be back by Monday, according to Fasig-Tipton chief operating officer Boyd Browning.

"This is only the second sale where we have had steroid tests," he said. "Generally speaking, the more expensive the horse, the more likely I would think it would be to be tested."

Seeking the Dia returning

Seeking the Dia, a son of Storm Cat and European champion Seeking the Pearl, will return to the United States and enter stud at Hill 'n' Dale Farms in Lexington. The 7-year-old horse is a six-time stakes winner in Japan, on turf and dirt, and retires with a lifetime record of 7 wins from 27 starts and more than $5 million in earnings. He won or placed in 10 Japanese Group 1 events, including a runner-up finish in the 2005 Japan Cup Dirt.

Bred by Jayeff B Stables, Seeking the Dia is Storm Cat's leading money earner and hails from the family of the highly successful sire Lyphard.

Seeking the Dia's stud fee has yet to be determined.

New group goes shopping

The economic downturn hasn't scared away every new or middle-market investor in the Thoroughbred business, as some sellers have feared. Barry Irwin of Team Valor International said that a new syndication group offered by Team Valor quickly attracted 17 first-time investors. The draw? A low investment price in a package of horses, allowing them to spread risk while maximizing their chances of fun.

"I went to the Fasig-Tipton July sale with the intention of buying a couple of horses," Irwin said, "and I realized it was a buyer's market. The horses I liked that normally I would expect to go for $250,000 to $300,000 were going for $75,000 to $90,000, so I started buying."

Irwin bought seven yearlings and put them in a package with a shares as small as 1 percent for $6,800.

The lesson, Irwin thinks, is that the current Thoroughbred marketplaces could provide opportunities for new buyers.

* The ashes of 2004 juvenile champion Vindication, who died last month at age 8, will be interred at his owners' Kentucky farm. Satish Sanan, whose family campaigned Vindication in its Padua Stables colors, said this week that Vindication's ashes will rest in an equine cemetery at the family's Bluegrass Heights near Lexington.

* The Racing Post has reported the death of stallion Ela-Mana-Mou at Simmonstown Stud in Ireland at age 32. A Pitcairn horse, he was a Group 1 winner and sired such Group 1 winners as Snurge and Double Trigger.