Global Group’s long-term in­vest­ment in race­horses in the UK places the com­pany in a prime po­si­tion to cap­i­talise on new mar­kets for the sport of kings

Hong Kong Tatler - - Tatler Focus | Global Group -

There are many sys­tems for bet­ting on horses. Some pun­ters reckon they can spot a win­ner from the way it walks, oth­ers like to an­a­lyse odds or the form book, and some just pick a name they like. But Johnny Hon, founder and chair­man of the Global Group, has a more pa­tient strat­egy— breed­ing race­horses in an­tic­i­pa­tion of gal­lop­ing Chi­nese de­mand.

It is a strat­egy founded on an an­cient pas­sion. Horses are one of the most preva­lent mo­tifs in Chi­nese art and cul­ture, and the coun­try’s tra­di­tion of horse rac­ing has a his­tory that stretches back at least as far as the Zhou dy­nasty more than 2,000 years ago. By the 19th cen­tury, the Shang­hai Race Club was the big­gest race­course in the world.

How­ever, the sport has been all but banned for the past 50 years or more, yet Hon sees that chang­ing. Bet­ting is still not le­gal, but mock races are al­ready be­ing staged and some es­ti­mates sug­gest there are as many as 1,000 race­horses in the coun­try, with plans to build 11 world-class race­courses across the na­tion. In ad­di­tion, it has re­cently been re­ported that the gov­ern­ment will al­low horse rac­ing in the is­land province of Hainan in the fu­ture.

As with every­thing in China, the po­ten­tial is huge; one need only look at the growth of Macau’s gam­ing in­dus­try or the rev­enue and sta­tus of the Hong Kong Jockey Club.

“I think that le­gal bet­ting on horse rac­ing across China will al­most cer­tainly hap­pen one day, quite pos­si­bly un­der a state lottery scheme,” says Hon. “When you con­sider that the price peo­ple are will­ing to pay for a year­ling de­pends on the de­mand, you could eas­ily see that go­ing up five or 10 times if many high-net-worth in­di­vid­u­als in China as­pire to buy a race­horse. I think that is the trend, so it’s a long-term game for us.” To cap­i­talise on this game, Hon has spent the past few years in­vest­ing in a port­fo­lio of race­horses in the UK. Prize money at Bri­tish races is rel­a­tively mod­est due to the in­tense com­pe­ti­tion there, but the real div­i­dend comes from es­tab­lish­ing strong blood­stock. The off­spring of win­ning horses com­mand higher prices and a suc­cess­ful filly can go on to breed for 15 years or more. “The goal is to build up a long-term as­set base,” says Hon. “Ul­ti­mately, we would like to race in­ter­na­tion­ally. Not just in the UK or France, but also in Sin­ga­pore and Hong Kong, and per­haps else­where.” The Global Group has 40 horses in its op­er­a­tion in the UK and has re­cently hired French cham­pion jockey Gérald Mossé to ride out the horses on a daily ba­sis and help guide the pro­gramme. It is also build­ing a rac­ing op­er­a­tion in France, where prize money is higher than in the UK. The plan is that by the time China opens up to horse rac­ing, per­haps within the next 10 years, the Global Group will have a well-es­tab­lished stock that will rep­re­sent a con­sid­er­able re­turn for the group and its in­vest­ment part­ners. “It’s re­ally in keep­ing with the phi­los­o­phy of the Global Group—to be a bridge be­tween East and West, but also to have that fo­cus on the life­style side of things,” says Hon. “Horse rac­ing is a fan­tas­tic in­vest­ment op­por­tu­nity, but it’s also a great hobby and a good way to build re­la­tion­ships. Some­one like Sheikh Mo­hammed bin Rashid Al Mak­toum, the ruler of Dubai, prob­a­bly won’t take your phone calls, but if you beat one of his horses at Royal As­cot, he will come and talk to you.” This fo­cus on pas­sion in­vest­ments makes the Global Group a pop­u­lar part­ner with fam­ily of­fices. Fine wines, world-class art, glam­orous horse-rac­ing events or back­stage passes at a mu­si­cal ... Hon likes his clients to have fun while the Global Group is build­ing their wealth.

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