‘Some people have been burnt’ – Digital sales driving demand for bloodstock due diligence

It was not all that long ago that bloodstock agents would be rubbing their hands together at the conclusion of the Great Southern Sale in Melbourne.

The broodmare session of the all-encompassing sale, which has gradually reduced in size and has become solely a foal sale, would conclude a series of live breeding stock auctions conducted by Inglis and Magic Millions.

Now there’s no broodmare session, the preceding Australian Broodmare Sale in Sydney was conducted on Inglis Digital and more and more breeding prospects are being offered online.

As the digital space took hold, particularly during the pandemic, agents’ services in the private market were increasingly seen as surplus to requirements.

The vendor and buyer didn’t need the go-between, and commissions went directly to the auction houses.

But the market has evolved with an online auction on effectively every week as Inglis and Magic Millions operate on alternate fortnights and New Zealand Bloodstock’s Gavelhouse online sales are thrown in for good measure.

Boomer Bloodstock’s Craig Rounsefell says more buyers are doing something of a full circle by being prepared to pay for agents’ advice and to have them perform due diligence on shortlisted mares.

“I’m getting more and more work for the online sales because a lot of these horses, I’ve seen them as yearlings or I’ve seen their relations as yearlings,” Rounsefell says. 

“I can do all the due diligence, the checking of vet certificates and all the normal checks and balances and you’re making the different calls to the people selling and just checking up on everything. 

“That way, you’ve got a bit more confidence because obviously at a live auction, all those things take place. But online, I think some people have been burnt by not doing their due diligence and when their horse arrives, it’s not what they were expecting.”

It’s that safety net provided by an extra set of eyes, accessed at a live auction, that some buyers are now seeking through the online marketplace.

“When online sales came on, it was taking business away from the agents, but now there might be a little bit of a shift in terms of buyers wanting to get agents involved to protect them,” he said.

“There’s obviously significantly less private trades happening, but, as all markets do, they change, and agents are getting more involved for clients online.”

Queensland-based agent Jim Clarke has played a small role in the private mares’ market but admits they are few and far between.

“I’ve bought a couple each year that way at varying levels, but it’s not easy to find them,” he says.

“The ones that I’ve managed by have been ones that I’ve kind of just researched, looked up, identified, and rang up to see if they’d sell them and probably as much as anything that’s fillies off the track at this time of the year, rather than pregnant mares.” 

Fellow agent Suman Hedge understands the changing market, even though he would be interested in buying mares privately if they were available.

“More often than not, unless you’ve got this really, really compelling offer from someone, which is just impossible to say no to, you’re nearly better off testing the market,” Hedge says.

“But every now and then you just get such a good offer. It’s like somebody offers you something for your house and it’s just a good offer, so you take it.”

Stallion deals have been the realm of the private market, particularly given the complexity of some of those arrangements, but even that is changing.

On Wednesday, Inglis announced its Digital Bullring concept, with Group 1-winning sprinter Reserve Bank, a four-year-old stallion prospect, to be offered next week via the private auction space.

Earlier this year, Coolmore used the Riverside Stables complex in the lead-up to the Inglis Easter sale to negotiate a $30 million deal with syndicator Roll The Dice Racing to buy into Golden Slipper-winning colt Guest House, the son of Home Affairs.

Two years ago, it was Clarke who was the go-between for the owners of Magic Millions 2YO Classic winner Storm Boy, fielding offers from a range of studs in the aftermath of his January victory without a sales company in sight.

But Inglis saw an avenue whereby its digital platform could play a role

“I suppose to put it in one line, it’s a format that allows a private trade to happen, but with the benefits of the auction process to get the best possible price (for the vendors),” Inglis Digital business manager Nick Melmeth told The Straight.

“When it’s stallions or stallion prospects, you know the studs that are going to be involved and then you can judge it around the level of the stock.

“It’s going to be like a Mahogany room and the high rollers that you let in (at the casino). “

Melmeth says that confirmation that the Mick Price and Mick Kent Jnr-trained Group 1 Goodwood winner Reserve Bank would be offered via the Bullring had already garnered interest.