June 24, 2013 – According to Wealth Briefing Asia, the Sport of Kings is still tops for investors and will increase in 2013.
Despite race horses being seen as one of the riskiest investments individuals can make, the popularity and levels of financial investments in them by high net worth individuals is set to increase in 2013, especially in emerging markets, according to the recent Knight Frank Wealth Report.
The report revealed that sports teams and activities is now the sixth most popular investment of passion among the global HNW community, ranking behind other popular investments such as art, wine and classic cars.
This is no surprise to Daniel Cook, managing director of Eclipse Equine Advisory, the HNW equine advisory firm, as he believes many HNW individuals in emerging markets already have an appetite for investing in horses – despite the possible risks.
“High-performance horses, unlike the other investment in passion categories, offer their owners the real life excitement of sporting competition, as well as a chance to enjoy the investment with family and friends at world-class events,” said Cook.
The report also showed that growth in sports teams and activities spending is predominately led by HNW individuals in the Middle East and Africa, with an anticipated increase of 10 per cent in 2013, while Australasia is forecast to maintain a year-on-year growth of 5 per cent.
Cook attributes this growth to the popularity of racing in the Middle East.
“Bearing in mind the Middle East’s love affair with racing this might be expected, although we are seeing an interest in other disciplines such as show jumping, eventing and dressage which is a result of Saudi Arabia’s success in the 2012 London Olympics. Australia also has a longstanding passion for horse racing with the industry generating in excess of AU$6.2 billion each year,” said Cook.
Investment in this category is only expected to grow by 2 per cent in Asia in 2013, although this is ahead of Europe and North America, where investment is declining.
Cook said this marginal rise in Asia was contrary to the number of enquiries the firm was experiencing in its Hong Kong office.
“As wealth increases, we are seeing increasing interest from Chinese HNW individuals in owning horses overseas, not only in Hong Kong but also in Singapore, Australia, the UK and the US, whether through individual ownership, by participating in syndicates and even in owning equestrian estates there,” he said.