Spruce Lane Pinhook
What is pinhooking?
The purchase of thoroughbred horses, either privately or at public auction, at one stage in their lives and reselling them at another stage for profit is considered a pinhook. Spruce Lane Pinhook has an annual weanling (thoroughbreds less than 1 year old) to yearling (thoroughbreds that are 1 year old) pinhook partnership. We begin with purchasing young thoroughbreds from the months of November through January. After we buy, we will turn them out at Mike and Natanya McMahon’s Spruce Lane Farm to mature through the winter and spring. Beginning in early summer the horses will enter sales preparation with an exercise and feed program to aid with their development into athletes. Our goal is to place each horse in a yearling sale that will optimize their profitability based on their pedigree and physical conformation.
The ’20-’21 Spruce Lane Pinhook Partnership will open September 1 and closes November 8th 2020
- We seek to arbitrage the value discrepancies between the weanling and future equine sales markets, also known as “pinhooking” by leveraging our deep knowledge and skills to target elite equine athletes and sell them profitably in forward markets
- Place weanlings in a yearling sale where they will sell at or above the average sale price, thereby achieving a positive ROI
- Leveraging our expertise and successful eight year track record by increasing our capital under management
- Management has experience in investing and managing “pinhooking or other trades” across multiple economic and equine markets
- The thoroughbred industry operates outside the general economy. It often lags behind on the fall and recovers quicker
- Foal crop has declined while purse structures have increased leading to a higher cost of goods
- Our research indicates that the market can easily withstand an investment of $2.5mm and that that investment can in turn be sold profitably in the short term
- The attraction of weanlings as an investment is that they provide an opportunity for portfolio diversification into an area that has historically and currently provides high returns and has shown a low correlation to other asset classes
- The experience and knowledge of Spruce Lane Pinhooking’s management enables them to identify elite equine athletes for investment at an early age
- Historically the elite equine athletes have provided significant financial returns and given market trends and opportunities, management expects it to continue to do so
- Structure: Limited Liability Company (LLC)
- Maximum Fund Size: $2.5 million
- Minimum Investment: $25,000
- Founded 2006: 12 year operating history
- Funds Due: November 5th of pinhook year
- All funds collected will cover purchase and expenses for the term of the investment
- McMahon & Hill Bloodstock LLC
- Deep knowledge of the equine markets – over $30MM of purchases in the public markets since 2001, representing nearly 700 horses
- Substantial private market sales representing over 250 transactions On going and up to the minute research on global racing results which directly impact intrinsic value of weanlings at auction
- Access to one of the leading thoroughbred veterinarians with unparalleled knowledge of cutting edge equine veterinary technology
- A thorough review of ALL market candidates which yields superior bidding strategy
- A refined decision making process, the results of working together since 2001 which provides solid, rational purchase decisions
- Integrity and honesty are our core principals
- Similar to our Bourbon Lane Racing Stable, we invest in each pinhooking LLC at the same level as our partners.
- We represent six generations of horsemen, our reputation is too valuable to risk for any one trade
- Our goal is to conduct our business profitably, while maintaining the highest level of integrity and transparency in the industry
- Thorough understanding of the market since 2001 of market volatility while remaining profitable
- Proven and tested method for targeting elite equine athletes
- Our unique pre-purchase strategy targets individuals who have the potential to return multiples on their purchase price
|Horse||Purchased as Weanling||Selling Price||Highest Racing Level|
|Pavel||$90k||$100k||Grade 1 winner|
|Union Strike||$130k||$375k||Grade 1 winner|
|Mopotism||$135k||$200k||Grade 2 winner, multiple Grade 1 place|
|Co Cola||$75k||$59k||Grade 3 place|
|Ferocious||$75k||$145k||Grade 3 place|
|Yuvetsi||$180k||$420k||Grade 3 place|
|Southern Honey||$155k||$180k||Grade 3 winner, multiple Grade 2 place|
|Barry Lee||$210k||$380k||Grade3 place|
|Alternative Route||$275k||$325k||Blacktype winner|
- Management compensation: 2% of purchase and sale price, 20% of true net profits
- Investment includes expense budget
- Managing members are responsible for all management decisions
- All purchases are insured for mortality
- Weanlings will board at Spruce Lane Farm, owned and operated by Mike & Natanya McMahon, or at farms which our operated by our pinhook partners
- Weanlings may be owned completely or in partnership with other clients of McMahon & Hill Bloodstock, LLC
- Operating and Admission Agreements are available upon request
The Spruce Lane Pinhooking Partnership is our annual investment in young thoroughbreds. Starting in November we purchase weanlings to resell as yearlings. This is a great entry point for those interested in exploring the thoroughbred industry through a relatively stable investment that has a long history of providing strong financial returns.
We keep our partners up to date throughout the investment term with pedigree updates, general sire news and state of the industry insights. Additionally, you will recieve photos and reports on their progress as they mature. We continue to monitor all of our graduates throughout their careers both on and off the race track.
Spruce Lane Farm
Spruce Lane Farm is owned by Michael and Natanya McMahon and was bought in 2005. The farm is located adjacent to WinStar, Lane’s End and Three Chimneys and at one time bordered all three. The soil is very desirable and the land is high providing excellent drainage. The farm was originally a Revolutionary War land grant to the Hedden family, who operated a beef and tobacco farm for many generations.
After renovations and construction of numerous large paddocks, barns, and a 60’ round pen , the farm is a perfect fit for the Spruce Lane Pinhook yearlings. The horses start in large groups and are separated off into pairs and then singles. Walking begins 90 days before the targeted yearling sale and after progressing to 40 minutes of walking exercise per day, 6 days per week, the round pen work commences. This is followed by ponying and swimming if necessary.
Our goal for the yearlings is to develop a smart, relaxed, physically sound and fit horse who is ready for tack and the track. Our boutique setting and high human to horse ratio and low horse to acre ratio make Spruce Lane Farm a favorite among buyers looking for the special hands on, natural approach. We invite your visit!
Marketwatch: Jamie Hill on Sires, Pinhooking
Listen to the Bloodhorse Marketwatch podcast with Jamie Hill discussing stallions, pinhooking, and racing.