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Business as usual for super-rich at the Sales

The economy may be struggling but the big horse traders are recession-proof, writes Greg Wood

At 2.30pm yesterday afternoon, shares in the Royal Bank of Scotland were down by 40%, Iceland was still teetering on the edge of bankruptcy and the wider global economy was, by common consent, in a headlong rush towards meltdown. Meanwhile, in Newmarket, a handsome, well-related yearling colt by Oasis Dream was about to walk into the main sales ring at Tattersalls. Nine minutes later, the hammer came down at 500,000gns. Welcome to Planet Tatts, where the crunch is confined to the Caesar salad.

The market in dreams, apparently, is more recession-proof than most, and at Tattersalls, they have been buying and selling hope for centuries. The dreams at the October Yearling Sale, meanwhile, are as big as they come. This is Europe's premier bloodstock auction, and three future Derby winners have passed through its ring in the last four years alone. If you want to find a horse for the Classics, the October Sale is the obvious place to start.

A total of 610 lots are in the catalogue for the most exclusive part of the sale, which ends on Wednesday, with 203 scheduled for their brief turn in the ring yesterday. In one door and out the other, with a new owner and hopefully a five- or six-figure price tag, is how it has always worked, and for all the prevailing gloom in the financial markets, yesterday was little different.

Each time the hammer came down, it was a small testament to the power of optimism in uncertain times. Last year, 639 yearlings were offered in the first part of the October Sale, and 510 found new homes, at an average price of 127,298gns: four lots went for a million guineas or more, with the top lot, a filly by Sadler's Wells, going for 2.5m guineas. As breeders and potential owners arrived in Newmarket yesterday, the question in every mind was whether the prices would hold up.

The first lot, a chestnut filly by Pivotal, sold for 150,000gns, which rather suggested that the answer might be yes. The Coolmore operation moved into action as early as lot 4, a bay colt by Sadler's Wells, who went for 280,000gns, and their great rival Sheikh Mohammed, represented by the bloodstock agent John Ferguson, responded immediately with a successful bid of 200,000gns for a colt by Cape Cross.

"It would be pretty peculiar if the market were not affected by what's going on in the outside world, as every other market has been," said Michael Bell, whose Derby winner, Motivator, was bought at the October Sale for just 75,000gns. "But the top end does appear to be pretty resilient. The big battalions have got a lot behind them, and if there's a shortage of punters it is going to be in the middle market.

"People are thinking, do they want to buy a new car, pay the school fees or buy a racehorse, and obviously the racehorse is not going to be priority number one. But from a buyer's point of view, it is cheaper, so to some extent you could argue that it makes more sense to have your money in a potentially high-class racehorse than it does in a bank that might go tits up."

Harry Herbert, who is both a breeder via Highclere Bloodstock and a syndicate manager via Highclere Thoroughbred Racing, was duly playing both sides of the market yesterday. "The nice horses are selling really well," he said, "but it's a bit more spotty underneath that. There's not the strength in depth at 100,000gns and more - but then if you turned on the news, you'd never buy a horse at all.

"Overall, I'd say that we will probably be one syndicate down on last year, which isn't a disaster, but there's definitely a bit more resistance in the market now."

A truer test of the health of the bloodstock market may be the second part of the October Sale next week, when the real bread-and-butter horses will appear. For now, though, Tattersalls' executives seemed satisfied with a first-day average of nearly 120,000gns, for all that the sale still awaits its first million-guinea lot.

"Of course, there's going to be an effect with all the City boys missing out on their bonuses, and the only question is how much," Jason Singh, Tattersalls' marketing manager, said, "but if it holds up like it has so far, we'll be very pleased."

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