In wake of Brexit, British bloodstock is a bet

By now, the results of Brexit have been heard around the world and the news that a majority of British people have voted for the United Kingdom to “Leave” the European Union.

The question for many is what impact will that decision have, for American buyers, on the bloodstock markets in North America. In short, probably not much.

American breeders tend to stick to the tried and true pedigrees that have made America’s racing product famous around the world for winners of the Kentucky Derby and Breeders’ Cup races.

Brexit Turns Markets Upside Down

Despite “Remain” being the odds-on favorite to win the vote, it proves that bookmakers do get it wrong when it comes to handicapping public sentiment that pertains to things that aren’t based on past performances.

When the markets opened on Friday, the uncertainty of Thursday’s vote was felt worldwide as stocks and money traded down across the globe beginning with the British pound seeing a 7% loss against the dollar.

However, this should have little effect on the high-end buyers of European bloodstock who are not limited to making deals in only one or another of the currencies of the EU, the UK or in American dollars.

But the price drop may lure American-based owners to England to buy in the sales later in the year if the exchange rates have not adjusted by then. And it may entice American horsemen to think about sending a prized mare to the breeding shed with a world-class stallion like Frankel who’s stud fee has dropped by 10 percent to a little more than $170,000 from the high of $190,000 before the Brexit.

Of course, any loss in value at the sales or in the breeding shed could easily be regained by simply raising prices.

Long term we don’t really know what affect Brexit will have on the horse racing industry in the UK but for the time being Frankel looks like a good bet for the Americans.