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Q&A: Case Clay, Three Chimneys Farm president
President of Three Chimneys, a prominent Kentucky stud farm and auction consignor that recently joined Brazilian-based breeder and owner Goncalo Torrealba to purchase broodmare Pure Clan, in foal to Bernardini, for $4.5 million. The price topped the 11-day Keeneland November sale. Soon after, Clay − son of the farm’s founders, Robert and Blythe Clay − confirmed that the Midway, Ky., nursery had formed a partnership with Torrealba’s newest venture, Borges Torrealba.
The deal combined two of Three Chimneys Farm’s traditional ideals: strong internationalism and a desire to operate at the high end of the Thoroughbred business. It also came a little more than a year after Three Chimneys struck a similar partnership with Everett Dobson, an Oklahoma City telecommunications entrepreneur and commercial Thoroughbred breeder who became a minority partner in the farm’s stallion business in August 2011.
Three Chimneys has 12 stallions on its roster, including two who will begin their stud careers there in 2013: Caleb’s Posse, who won last year’s Breeders’ Cup Dirt Mile, and Brilliant Speed, the 2011 Blue Grass Stakes winner and a son of the influential Three Chimneys stallion Dynafomer, who died in April.
How did the Borges Torrealba deal come about? My father has had about a 25-year relationship with Goncalo Torrealba, who used to board mares here. In fact, when Cara Rafaela was carrying Bernardini, she was here at Three Chimneys before being sold privately. So we’ve had a longstanding relationship with him and have kept in touch over the yearsGoncalo invited Dad down to Carnival in February, and Goncalo was talking about how he and his family members were thinking of getting more involved in North America. They kind of flirted with the idea of doing something together. About 30 or 40 days ago, Goncalo called and said, ‘We’ve organized some things, and we’d like to talk.’ His desire to join our operation and our business model fits perfectly with our vision for the next 40 years, so it was easy to proceed.
As we look forward, the opportunity to align with Goncalo keeps us strong, with the resources to compete with other global breeding operations and to attract new stallion prospects and acquire new bloodstock. It helps us continue to provide our customers with a high level of service and care for their horses. It allows us to continue to operate as a family-run operation, and at the same time it gives us the resources to remain at the high end.
He’s a partner with Three Chimneys; he has invested in Three Chimneys in a partnership.
How does this affect the deal Three Chimneys made with Everett Dobson in your stallion operation? It doesn’t affect it in any way. Everett is still our partner in the stallions, and Goncalo is a partner on a bigger scale.
How many mares do you foresee owning with Borges Torrealba? It’s going to be a quality-over-quantity model, and I would say about 20 mares is going to be the ideal number. It’s going to be commercial breeding, with an eye on keeping some fillies to stay in the families. It will be a year-to-year thing, but, loosely, selling colts and keeping fillies is something that’s been batted around in our meetings.
How does this differ from Torealba’s well-known Stud TNT program? Stud TNT is Goncalo’s own, and it’s his personal project and business in Brazil. Borges Torrealba is Goncalo, his siblings, and his mother. Stud TNT will still operate as it has.
Many people who watch the sales worry that too many of North America’s top mares are being sold overseas. Do you agree? The big operations are getting the best quality, and they have for the last 20 years. So this partnership allows us to play on that stage, the big stage, and try to keep some of them in America. We’re very close friends with the Japanese buyers, and we do a lot of business with them and sell to them, but we also want to keep some of the mares here in this country, and this gives us an opportunity to do that.
I think a large part of why these big mares recently went for so much money is that the supply is down. But there’s international trade, and big operations sometimes sell their mares. There’s so much quality at farms like Juddmonte and the Aga Khan, and there is a private market internationally. If we can get some of those families from overseas, then we bring that blood back here.
There’s a shortage of high-end mares in America, therefore there’s a shortage of high-end babies of those mares. If we can acquire some mares and sell babies out of them, that’s a good business opportunity for us. The international aspect strengthens that.
Some also believe the U.S. lacks good stamina sire lines of the kind Dynaformer provided. Do you think that’s true? I do, and I think it’s because they’re not commercial. It’s ironic, because I think everybody wants to win the Kentucky Derby, which is 1 1/4 miles, but you’re breeding these speedy-looking horses. It’s hard to stand a stallion with stamina in his pedigree, because it’s difficult to get the mare support.
Being by Dynaformer helps a horse like Brilliant Speed. A sire with stamina in his pedigree has to be a son of something major. We use Dynaformer in our conversations with breeders about Brilliant Speed. And he’s one of those few Dynaformers that are good looking, so when he got off the plane after the Breeders’ Cup, breeders have been very pleased with him.
How do your overseas offices help to strengthen your business here in Kentucky? For example, we board mares for Japanese clients. Our office in Japan allows them to, on their time and in their language, call our representative and ask them anything. They e-mail us, and we answer the question overnight. In England, we have a Tattersalls consignment, and Ed Sackville is able to organize everything. He has close relationships over there, and if people are more comfortable dealing with Ed than they are with someone over here, then they have the freedom to do that. Each country is a little bit different, but this is a relationship business, and it helps strengthen the relationships overseas.