Over 150,000 spectators watched Mage, a 3-year-old colt, win the run for the roses at the 2023 Kentucky Derby this past weekend. Mage held 15 to 1 odds in the tight two-minute race. Perhaps watching the race but not in the stands were 4oo investors that had purchased a 25% stake in the horse on a little-known investing app called Commonwealth.
When the offering was launched, Mage Assistant Trainer and co-owner Gustavo Delgado Jr. said, “We are very excited about Mage. He is a horse with a strong character and a nice physical. Everything about him makes us think that he will be a special horse.”
I guess he was right.
Commonwealth is an investment platform that provides fractional ownership in horses as well as golfers. You can participate for as little as $50. The security is offered via the Regulation A (Reg A+) exemption enabled by Dalmore Group – a FINRA-regulated broker-dealer.
According to the Offering Circular, in 2022, the company, Commonwealth Thoroughbreds LLC, acquired ownership interests in four thoroughbreds, including Mage. Commonwealth sought to sell up to 3,428 shares, raising a total of $171,400. The opportunity to purchase ownership in Mage closed in December 2022.
Dalmore commented on the success of Mage, saying fractional ownership is a “game changer” for horse racing as well as many other industries like fine art and real estate – enabling smaller investors to gain exposure to historically expensive or difficult-to-access asset classes. Dalmore stated:
“Horse racing, long considered the sport of kings, was traditionally a playground for the wealthy. However, fractional ownership has democratized the sport, allowing everyday people to invest in racehorses and share in the excitement and potential financial rewards … Mage’s triumph has undoubtedly sent ripples through the horse racing community, making fractional ownership an increasingly popular investment option. As more people become aware of the potential benefits and accessibility of this investment method, we can expect to see even more racehorses with diverse ownership structures. This democratization of the sport has the potential to make horse racing more inclusive but may also lead to an influx of fresh talent, as more individuals can participate in breeding, training, and racing thoroughbreds.”
Commonwealth posted that people said Mage was too small and too inexperienced – and they were wrong. The platform added that Mage delivered a final time of 2:01.57 – the 28th fastest in the 149-year history of the race. Mage won a prize of $1.86 million.
As for investors, they expect to receive a cut of the winnings for their investments. There are also certain perks affiliated with the securities offering, which can help attract enthusiasts in verticals like horse racing.
As for Mage, so far, the horse has garnered $2.1 million in four starts – two coming in first. The next race could be the Preakness later this month – something the owners and trainers are discussing right now, determining if Mage can be ready for the second stop in a possible run for the Triple Crown.
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