The American thoroughbred is a risky investment, whether you’re the one buying it hay or putting $2 on its nose. Odds are, the return is either going to be mostly large amounts of fertilizer or worthless paper slips swirling about the grandstand.
But consider the current financial arc of one Mucho Macho Man, a leggy beast that a group of Atlanta-area owners are planning to ride all the way to the Kentucky Derby.
He was bought at birth for $60,000; then sold, in shares, for $80,000; then repackaged and sold — 70 percent of him, that is — for $210,000.
Now, ranked third in the Associated Press’ list of Derby hopefuls last week, Mucho Macho Man “is a bargain; he’s worth 10 times that, easily,” said his majority owner. That, in case your calculator is fried, would be more than $2 million.
There were more than 27,000 thoroughbreds foaled in 2010. Each year, the dream of finding the few champions among the herd of claimers is what keeps people sending horses to the post. Which makes it real news when owners from a state without horse racing strike equine gold.
Starting gate
Let’s introduce some of the people behind the horse. It gets a little complicated. In fact, the Mucho Macho Man winner’s circle photo looks like an Osmond family reunion once everyone who has a share crowds into the frame.
At the base of the ownership pyramid are Suwanee residents Dean and Patti Reeves. Both are successful business folk — he in construction, she in outdoor advertising — who five years ago barely knew a sire from a dam.
A chance encounter with another couple while vacationing in the Turks and Caicos islands in 2007 — you just don’t find good thoroughbred racing connections at Dollywood — planted a seed. Dean Reeves had been to 22 Kentucky Derbys as a spectator. His new acquaintance, Bob Ades, actually had owned a horse that ran in the Derby. They began talking. Could spending be far behind?
“You know,” Reeves told him, “I’d love to be in the horse-racing business, but I don’t know the people.”
“You don’t just walk up and buy a horse.”
The next time the two met was at a yearling sale in Kentucky. Reeves and Ades spent $100,000 on a horse named Fearless. “When I first hit [Patti] with the amount of money you have to spend, she took a deep breath and said, ‘Honey, if that’s what you want to do, I’m all behind you.’”
Fearless finished in the money once in three races before suffering a torn tendon.
All legs
The first impression of horse-owning was a kick in the hind quarters. Nevertheless, Dean and Patti Reeves pressed on. They bought shares in two horses, then bought two more outright and began their own stable, Reeves Thoroughbred Racing, operating out of several race tracks. With a few more recent purchases, they currently stable seven horses.
Last July, it began to get really interesting. The couple won their first races with a horse named Cause I Can. And Dean, who began studying bloodlines like a rabid monarchist, spotted another 2-year-old he liked. This one had finished second in a six-furlong maiden race at Florida’s Calder Race Course. Reeves bought 70 percent of Mucho Macho Man from an outfit called Dream Team Racing.
The local connection atop Dream Team Racing is Kostas Hatzikoutelis, a Smyrna wireless-accessory executive who partnered with a Charlotte software consultant, Jim Culver, to build a horse syndication business. They developed a model of buying mid-range-value horses, syndicating them and spreading the risk as much as possible among a wide range of investors.
Together with a Florida breeder, they had interest in a gangly colt that at first was thought to be stillborn. “All of a sudden, eight or 10 minutes later, he stood up,” Hatzikoutelis said. At first, they thought of naming him Lazarus. But more in keeping with the horse’s breeding — his sire was Macho Uno — they settled on Mucho Macho Man.
A late-birth (June) foal that won’t actually turn 3 until after the Belmont Stakes, Mucho Macho Man was all legs. “A lot of people kind of shy away from that [body type],” Hatzikoutelis said. “They’re very fragile creatures, and the leggier they are, the more prone they are to injury.
“We saw a very natural ability for him to stay healthy, go through the training regimen and keep developing.”
Rising star
By early 2010, the group brought in another partner, bought the horse outright from the breeder and began selling shares. There would be a total of 10 partners, some buying in for as little as 1 percent ($800) of the $80,000 syndication.
A 34-year-old banker from Snellville, Gregg Sherrington, owns, maybe, one ear of Mucho Macho Man. Yet, for his initial $800 investment, he is now a partner in a Kentucky Derby hopeful.
“We’re not betting the groceries on this,” he said. “It’s entertainment as much as anything, no different than getting season tickets to a football team.”
“It’s fun to watch their excitement,” said Hatzikoutelis of the smallest investors. “There’s no way at this point — having offers in the millions on this guy — that they’d be able to afford it otherwise. We’re kind of proud of that relationship.”
This horse has brought together a large, disparate group of speculators, proving that the Sport of Kings also sometimes can be the Sport of Construction Bosses, Cell Phone Gadget Purveyors and Bank Officers.
They convened at Fair Grounds Race Course in New Orleans on Feb. 19 when their long-striding rising star won the Risen Star Stakes, pushing his graded stakes earnings to $270,000, and seemingly safely qualifying for a spot in the 20-horse Kentucky Derby. The field is based on earnings, and Mucho Macho Man currently ranks seventh among the prospects.
Each owner, no matter his stake, was highly excited in the stretch run of the race that likely will catapult them to a box seat in Louisville.
A home video of the finish caught Reeves jumping around and screaming like his suit coat was on fire.
And, according to 1-percenter Sherrington, “I couldn’t hold my binoculars so I could see anything, I was shaking so much.”
Long-distance stride
The next planned outing for Mucho Macho Man is the $1 million Louisiana Derby back at the Fair Grounds on March 26. From there, they will all be walking on eggshells hoping that the horse can make it in one piece to the first Saturday in May.
In their grandest dreams, Mucho Macho Man will arrive in Louisville as one of the hot stories of the week, the kind that might draw in that vast pool of viewers who believe the entire sport is based on three races a year.
On his own merits, he can be a dynamic animal. He has the look — complete with a white patch on his face, that, if you squint hard enough, can look like a lightning bolt.
And he has a style fit for the classic distances, that long stride chewing up great swatches of ground in a stretch run.
Reeves recognized these traits before buying his majority share. Advisers actually had steered him to the horse that beat Mucho Macho Man in that first race, another Derby candidate named Gourmet Dinner. But he liked Mucho Macho Man better.
“This guy looks like he has a big stride. I’d like to put that in a classic distance,” Reeves said, recounting his thought process at the time. “He gets out of the gate real well. And he’s got speed if he needs it.”
“I really think he’s a Belmont Stakes horse,” said Hatzikoutelis, pointing to the last and longest of the Triple Crown races. “Great cruising speed. Great tactical speed to put himself where he needs to be. A long, grinding finish, not a tremendous burst of speed. And great tenacity to stay in there.”
Human element
There are a stable full of human stories to go along with that of the horse.
His trainer, Kathy Ritvo, watched the 2008 Derby from the critical care unit of a Miami hospital while awaiting a transplant for her deteriorating heart. She finally got one six months later. Mucho Macho Man is the most promising horse of her extended lifetime, giving her a chance to become the first woman trainer to win a Kentucky Derby.
Jockey Rajiv Maragh was new aboard Mucho Macho Man at the Risen Star. Just a day before the race, the horse’s regular jockey, Eibar Coa, suffered a serious spinal cord injury in a spill at Gulfstream. In a gesture meant to assure the injured jockey that he still was a part of the team, Reeves visited Coa at his Florida hospital and delivered a check for $18,000, which would have been the jockey’s share had he been aboard for the Risen Star.
A horse like this has the potential to keep the money flowing, in both winnings and future breeding fees — and that income grows exponentially should he win the Louisiana Derby or any of the Triple Crown races. But at this stage, insist those with the most to gain, there are motivations far beyond filling up the bottom line.
“You can’t put a price tag on this phase of our lives that we’re in now, regardless of what happens,” Patti Reeves said.
“I could have sold this horse for a tremendous amount of money, but I’d be so depressed now,” her husband said. “It’s what we enjoy doing. It gives us something to look forward to. At the end of the day, the people in this business do it because they love what they’re doing. They love being around the horses.”
When that one rare horse comes along and repays the love at the finish line, there’s the kind of emotional return you just can’t get from, say, the bond market.
About the Author
