09/07/2017 1:10PM

Q and A with China Horse Club's Michael Wallace

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Debra A. Roma
Multiple Grade 1 winner Abel Tasman is among the current success stories for the nascent China Horse Club.

China Horse Club has wasted no time establishing itself as a force to be reckoned with on the global stage since its founding in 2013.

In just four years, the high-dollar investment and lifestyle group has purchased top-end broodmares and racing prospects at auction, bought shares in elite stallions, and found ontrack success with runners like Kentucky Oaks winner Abel Tasman. Major Kentucky operations have become fast partners with China Horse Club, most notably WinStar Farm, with which they race several horses in tandem.

One of the guiding forces behind China Horse Club’s rapid ascent has been Michael Wallace, the group’s head of bloodstock and racing.

A New Zealand native and resident, Wallace has led China Horse Club’s presence at auctions and represented the group at major races worldwide since 2014, coinciding with the club’s expansion into the North American market after laying its foundations in Australia.

Wallace, 37, has shopped at auctions in the United States, England, Ireland, France, Australia, New Zealand, and South Africa – all jurisdictions where the group has raced or plans to expand.

Though he holds a prominent position within China Horse Club, Wallace also operates Waterford Bloodstock, his own independent bloodstock company in New Zealand.

Wallace spoke with Daily Racing Form in August about his view of the North American yearling market from an international buyer’s perspective, his methods, and the impact of their Oaks winner, Abel Tasman.

What is your general assessment of the North American yearling market today?

We just came off of Saratoga, and all the metrics there were all very solid. I think it’s in a nice position currently where good prices can be obtained, but it’s not out of kilter. It’s not crazy, where money is being spent completely frivolously. I think it’s at a pretty good equilibrium at this moment.

Will you be shopping the Fasig-Tipton Turf Showcase?

For sure. We have to go and look. You never know what’s going to be there. We run a European racing arm, so that’s always of interest to us. There’s some great American turf racing, and a volume of racing [in Australia]. We’re going to go and look to support that sale. I think, in time, it’ll hopefully find its little spot on the calendar and become a fixture.

Is turf a segment China Horse Club specifically targets within the North American market, or do you typically aim for dirt here because that’s what is prominent?

When we go to the yearling sales, ultimately our plan is to acquire a number of colts. Predominantly, we try to acquire a dirt stallion. Will we end up with some turf runners out of that group? Naturally, and they’ll take their place on the turf, but the intention is to buy the dirt horses, because that’s the driving force around it, especially in the stallion market.

Keeneland September puts 1,200 horses on offer in its first week. How does your personal preparation change for high-population sales compared with smaller catalogs?

You’ve got to find an extra pair of shoes, that’s the first thing you do. You know they’re going to be long days with a lot of walking and concentration having to be done. It’s just a matter of having a good team around us.

We’re lucky that we can divide and conquer with a group of people from our various groups [partnerships with WinStar Farm and SF Bloodstock] to get that done. We cross over each other, so there’s a couple sets of eyes on each horse, because sometimes you get fatigued, you get tired. We feel that if you get a couple sets of eyes on each animal, the filter generally starts to work.

Once you’ve made that first look-through, then it’s just a matter of people getting their heads together and seeing what we like and don’t like. Hopefully, the cards fall your way from there with the bidding and you acquire them.

What are the most important aspects you focus on when inspecting a yearling at auction?

It’s different. We come up here and we have to take a different view from what we’re looking at than in Australia. In Australia, we’re looking for predominantly six- and seven-furlong, early, precocious 2-year-old-looking types, whereas up here, we’re looking for something completely different.

I like to see tension in the hind leg, good tension through the pastern is quite important to me. I love a horse with a bit of girth, and one thing I really like to see is a well-set-back wither into the back. Those are the first few things that I’ll be looking for and break it down from there very quickly.

China Horse Club had a major breakthrough early in its existence when Abel Tasman won the Kentucky Oaks. How far did it go in legitimizing China Horse Club in the scope of the North American racing and bloodstock industry?

There was a plan to race worldwide and become involved worldwide, but it was felt you couldn’t become heavily involved in all places at one time, so we focused on Australia and spent a lot of time and money developing there originally with a view of growing, always with an eye on coming to America. When you do it, you’ve got to be ready to do it properly and become involved.

A couple years down the track, we’d felt like we’d proven ourselves in Australia and now it was time to increase our presence in America. The crop we have running at the moment are 3-year-olds, our first foray into buying and racing horses in the U.S.

To get a filly like Abel Tasman – and we’ve had another Grade 1 winner in Yellow Agate, and we’ve had horses like American Anthem and One Liner – these sorts of horses are what we’ve wanted to achieve, and getting it done has been greatly satisfying, especially on Abel Tasman. It’s not lost on us the enormity and privilege that comes with winning a classic like the Oaks, and how difficult it is to do.

[Abel Tasman] came across the radar for Mick Flanagan [China Horse Club’s European representative], and we took a good look at her, and it seemed to fit. When we bought her, did we think at this time we’d be sitting on three Grade 1’s in a row and the dominant filly of the year? No, that wasn’t the case. Naturally, we thought she’d have the ability to compete at a Grade 1 level and win Grade 1’s, but it’s been a dream result.

Everybody’s gotten a great thrill out of it, and it’s provided a platform that’s heightened mainland Chinese people to become involved with us, and specifically in the North American racing scene.

How much of an impact does a win like the Kentucky Oaks have in attracting Chinese investors?

We had a group of people with us at the Oaks – probably eight or nine people that came over from mainland China – that participated in the day. Some had owned horses before, and others hadn’t experienced racing or ownership.

To see the effect that it had on those people and how much it invigorated them, and how it conversely got them involved in the process firsthand, was great to see. It’s a feeling that everybody knows you can’t bottle and sell, but if you could, you’d sell a lot of it. It’s a great platform to encourage involvement in the industry.

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