A Secretive Owner of Triple-Crown Contender Justify: George Soros

If the strapping chestnut colt Justify wins the Belmont Stakes on Saturday to become just the 13th horse in history to claim horse racing’s Triple Crown, two of the three groups that have an ownership stake in the horse’s breeding rights will be front and center during the celebration.

WinStar Farm, one of North America’s leading thoroughbred racing and breeding operations, owns 60 percent of Justify’s breeding rights. China Horse Club owns 25 percent. A third group, a secretive entity that holds the remaining 15 percent, will remain out of the spotlight because it vigorously avoids any public attention. It is a company controlled by top employees of the billionaire investor George Soros.

Mr. Soros’s connection to Justify, which was not previously reported, has garnered little notice in the sport despite the horse’s rousing success in the Kentucky Derby and the Preakness Stakes because his group tries to operate almost invisibly. Several officials, who sit atop one of the biggest owners in stallion equity in the world, declined to comment about Mr. Soros’s involvement in horse racing through his fund.

Mr. Soros’s investment firm, Soros Fund Management, is behind SF Bloodstock and SF Racing Group, an international breeding and racing operation started in 2008. Executives from the investment firm oversee the breeding and horse ownership businesses. Gavin Murphy, an Australian based in New York who has served as the Soros Fund’s longtime tax counsel, is the manager of SF Bloodstock and SF Racing Group. Christopher Naunton, chief financial officer for the Soros Fund’s family office, is the president of SF Bloodstock and SF Racing Group, corporate filings show. Tom Ryan, an Irishman based in Lexington, Ky., is the team’s bloodstock agent.

SF, which is also a part-owner of Newgate Farm in Australia, has breeding stock in the United States, Australia, England, Ireland and France. It could not be determined how much money Mr. Soros’s firm has committed to the horse racing business.

SF Bloodstock, which according to court filings is owned by SF Agricultural Holdings L.L.C., employs a for-profit model and focuses on the breeding side of the industry, purchasing stallions, or shares in them, and broodmares while selling yearlings at auction. In 2015, it entered into a three-year partnership with WinStar Farm and China Horse Club that allowed them to spend big while spreading risk at yearling and 2-year-old sales. That is how the group partly acquired Justify and the third-place Kentucky Derby finisher Audible, but it quickly sold its racing rights in those horses to Head of Plains Partners and Starlight Racing.

“To me, and the couple guys that I do this with, it’s more fun to be in the winner’s circle when Justify wins the Derby holding the trophy,” said Sol Kumin, a hedge fund executive who runs Head of Plains. “So you kind of have to pick. If this became my full-time job, which it won’t, I would have a different program, focusing more on the stallion business and breeding. Now we still want to make money, and so far we’ve done well, but it’s hard.”

Just days after Justify’s Preakness victory, chatter began to surface about a $60 million deal with the rival farm Coolmore for his breeding rights. The deal is believed to include a bonus of about $25 million if he were to win the Triple Crown and would allow the partners to retain some shares and lifetime breeding rights in the horse. It was agreed to before the Preakness, people familiar with the deal said.

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SOURCE: New York Times