San Antonio Express-News (Sunday)
‘BRAGGING RIGHTS’
Flux: Texas breeder compares buying, selling exotic animals to dealing in Ferraris.
GOLIAD — Brian Gilroy’s path to breeding exotic animals in Central and South Texas actually started out as a way to claim a tax write-off.
Gilroy, who previously founded an oil and gas exploration company, took his accountant’s advice to buy livestock — only he chose to own non-native livestock rather than cattle or horses like most Texas ranchers.
He leased some property in Mountain Home in the Hill Country and started buying exotic animals.
“I didn’t buy them with the intent of building a business or even with the intent of making money,” Gilroy said while giving a tour of his WildLife Partners’ ranch in Goliad. “I was just going to have fun with my friends and with my kids.”
That was around 2012. Within a few years, he figured he’d better start generating some revenue or the taxman might frown on the deductions he was taking. So he started offering hunts.
Gilroy, however, discovered hosting hunters wasn’t his thing and eventually gravitated to breeding. He placed ads in a publication with listings for Texas ranches offering to buy exotic animals, and the venture took off.
Today, Gilroy’s San Antoniobased WildLife Partners has three ranches: 300 acres it owns and 1,200 it leases in Mountain Home; 1,750 acres it owns in Goliad; and 1,000 acres it owns near Pearsall. The company expects to complete the purchase of 4,000 acres in Carrizo Springs for the company’s fourth and final ranch in
April.
It bills itself as the “largest buyer and seller of high valued exotic wildlife in the United States.”
Some 3,000 animals, representing about 50 species, roam the three ranches. They include Cape buffalo, Grévy’s zebra, bongo, gemsbok, sable antelope and black-bearded wildebeest.
WildLife Partners doesn’t own the animals, though. They’re owned by investors in partnerships. There are anywhere from eight to 18 investors in each partnership.
From a lodge at the Goliad ranch, the WildLife Partners CEO and co-founder recently discussed
the company’s operations. The following has been edited for clarity and brevity.
Q: Explain how the partnerships work.
A: For each partnership that we manage, it is $5 million (to invest). We get paid $375,000 a year to manage that group of animals. And we don’t make money on that. Where we are making our money … is that my company owns all of the land. So essentially our land is getting paid for as the result of managing these partnerships. The management fee is paying for the use of the land, as well as the feed and the labor that we have here.
The management fee is generated from the sale of offspring. We don’t bill any of the partners for that. It comes directly off the revenue. So when we sell the offspring, there’s an allocation for the management fee out of that. My brother (Chris) and I, as the primary owners of this business — this is not a huge income producer for us. We’re not making a bunch of income out of it.
So this ranch will get paid for as the result of raising all these animals here. And so, that’s what we’re in this for. This is a real estate deal for my brother and I. We’re accumulating assets and real estate as a result of managing these animals. The animals are all owned by the investors. They get a 100 percent tax deduction.
They get access to the ranch.
In addition to working here, we work with about 500 landowners in Texas. We sell them animals and then we buy all their offspring. The only difference is, I don’t charge them a management fee. I just make a gap between the wholesale and retail spread. It’s 30 percent. So a zebra, for example, I sell for $6,500. I buy that zebra for $5,000, so I make
$1,500 a head for every one of those I sell.
I have expenses in that, because I’ve got meds and transport trailers. I’ve got a fleet of trailers and trucks that are on the road six days a week in Texas — buying, catching and delivering animals.
Q: You’ve disclosed the company has had growing pains. Was it profitable last year?
A: Yes. We went from a $5 million loss in 2019 to about a $1 million profit (on about $20 million in revenue) in 2020.
Q: Why are you buying another ranch?
A: I’m completely out of land right now. We are doing the best we can to provide the animals the best habitat possible. And so we’re not going to just pack ’em in like a feedlot where there’s no grass. So land management is a primary part of what we do. And so this ranch is fully stocked. It’s up and running. The land in Pearsall, we are fully stocked. I mean, we’re still adding some animals in, but essentially we’re fully stocked on that ranch. And I don’t have room for an additional partnership.
So the new ranch, we will be able to house somewhere around five partnerships there, and I will not operate any more than that. That’s the max number of partnerships. We will reach terminal velocity.
It’s all I can manage as a company. And it’s at five partnerships there, two partnerships here, two partnerships in Pearsall and one partnership in Mountain Home. These partnerships terminate in six years. So they have a six-year term and we liquidate. And so the way that it works is, I’ll have land opening up in Mountain Home by the time that I fill the place in Carrizo Springs, and then this place will open up. So we will then be rolling. In other words, I won’t have more partnerships than that in operation at any given time.
Q: Is hunting allowed here?
A: On this ranch, there are some white-tail deer that were here prior to us buying this ranch. And we don’t need them here.
They’re really big. And so some of our partners that are involved with our company, people that are invested with us, this last deer season, they came here and I think they hunted four or five deer. Apart from that, there’s no hunting.
Q: So there’s no hunting of exotic animals on any of your ranches?
A: Zero. None whatsoever. It wasn’t that way in the beginning.
Q: Do you sell exotic animals to commercial hunting operations?
A: That is not our business as a focus. I’m not going to tell you there’s not cases where we sell an animal to someone and it ultimately gets hunted. I don’t have a restriction on the animal. When I sell the animal to them, they own it. It’s theirs. They can do whatever they want to do with it. But our focus is not to sell to that group. Our focus is to sell to a private landowner that doesn’t want to sell hunts. Hunting is not their gig. They simply want to own the animals because they like looking at them and they’re breeding them. And it’s a tax write-off.
When people think about the exotic wildlife industry in Texas, they immediately associate that with canned hunting (of captivebred wildlife). That is the reputation that the industry has carried for decades. The reason for that is, that’s the only story that’s ever been told. Landowners are not coming forward and telling a story to the media. So the story that gets told is about the commercial hunting ranch that’s selling hunts to whoever it is that’s flying in from around the country. Well, that sector does exist, but it’s the smallest sector of the industry.
The foundation of the industry was born as the result of surplus zoo animals being given to landowners to look after and to see if they could breed them in a prolific way. As a result of that, we have a multimillion-dollar industry that exists in Texas today. But it’s absolutely the result of zoos.
What’s happened is, these small groups of animals that have left zoos have been turned into these huge populations within our state. There are species like dama gazelles, Grévy’s zebra, addax, scimitar oryx. There’s a long list of animals that are critically endangered or they are extinct in their native range and they exist in huge numbers in the state of Texas.
In large part they exist because the guy who owns a huge construction company or owns an interest in the Spurs or owns an interest in this or that or the other, they own ranches and they like looking at ’em. These animals are no different than owning a Ferrari. There is a bragging right associated with owning them. When someone comes into your ranch and you have these animals, you look like the coolest guy in town. It’s not to say they don’t hunt some on their land, but as a rule, their land is serving as a wildlife sanctuary.
Texas has something to be very proud of. We have taken our land and used it to save species, not because we want to go and shoot them because we have great big egos, but because we have great big egos and we like looking at them. It’s cool. It’s neat. There is a commercial model that has been created that preserves wildlife and it provides this economic incentive and people are diving into it. And I can’t keep up with the demand.
Q: Last year, the Express-News wrote about a lawsuit WildLife Partners’ former president had filed against you. He alleged you used money raised from investors to support your lifestyle. You’ve told me that article cost the company $3.5 million. How so?
A: So we have a network of firms, financial services firms, that sell the partnership interests. We don’t actually do that ourselves. I’m not involved in any element of that. So it’s a network of broker-dealers, and they sell it and their customers had made commitments to participate. And then reading the article, they just said, “We’re out. We don’t want to be a part of that.” We’ve actually documented it’s $3.5 million worth of lost investment as the result of people reading that specific article. (Gilroy has disputed the allegations and countersued.)
Q: How many animals did you lose as a result of February’s winter storm?
A: Out of our 3,000 animals, we lost 59 animals during the storm. We were hauling water in, breaking ice out of water troughs. We were feeding all day. We were building bedding. Anywhere where we could find a spot out of the wind, we were putting coastal hay down in a bed about 18 inches thick. Giving them somewhere to lay down. When it’s super cold, and these animals are laying on the ground, and adding to it, it’s wet, they get hypothermia really quick.
If we found an animal that was down, that was hypothermic, we would bring it into a barn, put it under a heater, warm it back up, give it water, give it food and then let it back out. We had probably 15 or 20 animals that we were able to save doing that. I cannot take the credit. Our staff is who did that. It was a remarkable thing to watch. They literally saved the investors who own these animal … millions of dollars in losses.