Nine contenders in this year's 20-horse Derby field were owned by some form of partnership, and top owners and trainers expect that percentage to rise in the coming years. WinStar Farm and the China Horse Club, which paired to buy Justify, will run another horse, Quip, against him in the Preakness.
Often, the horse, the jockey and the trainer are merely front-facing talent representing a larger corporation with a chief executive, stakeholders and an array of side interests. There's still the mystery and romance of unearthing a horse for the ages from the thousands of 1- and 2-year-old runners who go on sale every year. But there's also lots of talk about pooling resources and mitigating risk.
"I think people's appetite to buy million-dollar yearlings has changed," said Elliott Walden, president and CEO of WinStar Farm. "And I think the only way they're doing it now is through a partnership."
Ownership syndicates — in which investors buy shares of an individual horse — have been around for generations. And the sport began to take on more of a Wall Street sheen in the 2000s, when, for example, 2008 Derby and Preakness champion Big Brown was backed by a fund billing itself as International Equine Acquisitions Holdings, which ultimately crashed and burned.
But the unions between deep-pocketed owners — other examples include Kentucky's Stonestreet Farms and European racing giant Coolmore or New York moguls Vinnie Viola and Mike Repole — have increased in frequency and complexity over the past five years.
It's a way to reduce, or at least share, some of the pain in a sport full of bad news and busted investments.
This new reality is one the top trainers in the sport have accepted quickly. In Justify's case, that means Baffert, who has a chance to tie the all-time record of seven Preakness wins Saturday. But the same ownership team also has Audible, who finished third in the Derby, with trainer Todd Pletcher.
"There's a point man, and it's Elliott, so I just basically talk to Elliott, and he talks to everyone else," Baffert said in explaining how the arrangement works from his end. "It's pretty easy and simple, really. I just tell him the way it is, and he understands everything. We have mutual respect."
WinStar Farm — 2,700 acres in the heart of Kentucky horse country with bronze steeds greeting visitors from atop two stone columns beside the gate — represents the old and the new of the racing industry. Dallas-based telecommunications executive Kenny Troutt bought the place in 2000, but to build it up, he tabbed Walden, a third-generation horseman who'd saddled two Kentucky Derby runners-up.
They created a traditional racing and breeding operation in many respects, producing 2010 Derby winner Super Saver among many other champions, but they also kept an eye on the changing dynamics of the business. That meant alliances, and a few years ago, bloodstock adviser Tom Ryan suggested WinStar pair up with China Horse Club.
The club's founder, Teo Ah Khing, is a self-described billionaire from Malaysia who designed the opulent Meydan Racecourse in Dubai. He burst onto the American scene last year when the club's filly, Baffert-trained Abel Tasman, won the $1 million Kentucky Oaks. At the post-race news conference, Teo stunned listeners when he said the club had begun with 100 members, each of whom bought in for a minimum of $1 million. His far-flung plans include an annual racing festival in China and a racing-themed development on the Caribbean island of St. Lucia.
As China Horse Club planned its entry to the United States, Teo did not want to act alone.
"When you're buying and selling colts, everyone knows there's an element of risk to it," Wallace said. "To some degree, it's a numbers game. You feel you've got to buy a certain amount of horses — somewhere between 20 and 25 — to make the model work. By having partners, it just allows you to spread your capital farther."
The fledgling international operation might have seemed an odd partner for one of the most successful farms in Kentucky, but Walden said the foundation of the pairing is simple.
"I like Teo. He's a very nice man who has a lot of class, and we share a lot of the same values," he said. "It's not just about the dollars and cents of it. Because there's nothing worse than owning a good horse with a bad partner. It makes everything difficult."
WinStar and China Horse Club would buy 20-25 horses a year and hold equal shares of their owning and breeding rights. Executives from both entities would attend sales and debate the merits of each prospective purchase.
Such conversations are occasionally contentious, but no one disagreed about Justify when WinStar and China Horse Club bought him for $500,000 in September 2016. He was among the partnership's second batch of horses.
"He was a beautiful horse," Wallace said on the phone from his native New Zealand. "He wasn't easy to find, but he was easy to like. He caught the eye, filled the eye, and he still does to this day."
Beyond expansive pairings between entities such as WinStar and China Horse Club sit investors who scan the prospects a few months before the Triple Crown series and look for smart buying opportunities.
It makes sense to engage with such buyers, Walden said, because WinStar reduces its financial risk on horses that are — percentage-wise — unlikely to win one of the Triple Crown races.
"Whenever you have a good horse, you get a lot of phone calls," he said. "It's an attractive time to take a little money off the table. You get on that Derby trail, and there's 10 or 15 horses whose valuation are increased, and there's really only one of them that's going to be worth it at the end of the year."
That's where Boston-based hedge fund manager Sol Kumin, who played lacrosse at Hopkins and now sits on the university's Board of Trustees, comes into the story.
Kumin jumped into the racing business four years ago at the urging of his buddy, Nantucket contractor Jay Hanley. He's succeeded quickly, spending most of his money on low-risk fillies but occasionally taking a plunge on a big-ticket colt such as 2016 Preakness champion Exaggerator. Last winter, he wasn't sure whether any of his horses would qualify for the Derby, so he approached Walden about buying a piece of Justify, at the time a promising horse who'd never run against serious competition.
Walden said yes, as long as Kumin also agreed to buy a piece of Audible. Just like that, he owned 15 percent of the horses who would finish first and third in the $2 million Derby. As for how to split the winnings among everybody, that's up to the owners.
Kumin knows some people see a decided lack of romance in the way he achieved his first Derby victory, a milestone many big-time owners never achieve.
He acknowledged that he develops deeper feelings for horses when he buys them as yearlings and takes a direct hand in managing their careers. For example, he'd seen Justify in person exactly twice before the week of the Derby.
"Bob Baffert and Elliott Walden are making the decisions, so that's not a situation where I have to worry," he said.
But he also disagrees with critics who suggest his part of the glory is somehow unearned. He still had to bet on the correct horses.
"People say it's not pure or not real," Kumin said. "But I find that a bit unfair. I've been part of 28 Grade 1 winners in three years, and zero of them were Grade 1 winners when I bought them."
Starlight Racing, a syndicate run by Louisville, Ky., resident Jack Wolf that includes Giants executive Chris Mara, also bought a share of Justify around the same time.
After he romped to victory over the mud at Churchill Downs, the podium at the post-Derby news conference practically overflowed with owners who could not thank one another quickly enough.
In Baltimore, Justify will have the carnival with him, from Kentucky and China, Boston and New Zealand.
"I've been asked if it's a bad thing," Walden said. "And I don't see it that way. It's a hard business to own horses. We should honor anybody who wants to own a racehorse."