Jooste’s horses: shutting the stable door ...
The ‘Robin Hood of Epsom’ spent enormous sums on thoroughbreds. Now he is having to sell them
In recent days, Markus Jooste has become the whipping boy of the investment industry. This week, the epidemic spread to the horse racing world, in which Jooste (56) had been the owner of the largest number of thoroughbred horses in SA.
This week Jooste’s company, Mayfair Speculators, sold one of his prized horses — Legal Eagle — to former Tekkie Town owner Braam van Huyssteen for R3.2m. Expect more sales.
It will be a bitter pill for the sport’s fallen "Mr Big" to swallow.
Jooste is so enamoured with racing that Steinhoff’s UK discount retailer Poundland this year clinched a 10-year deal to take over the famous Epsom Hill, which overlooks the track where the Epsom Derby is held every June.
"Just call me ‘Robin Hood of Epsom’," Jooste quipped in May, when the news broke. In light of revelations in the past three weeks of Steinhoff’s "accounting irregularities" and Jooste’s abrupt resignation as CEO, that comment seems deeply ironic. As British tabloid The Sun put it: "Jooste decided not to buy a ticket to watch his Derby prospect Douglas Macarthur at Epsom — instead he bought a hill."
Though he is seen by some local racing enthusiasts as a brash owner, he has been lauded by others. "He has only done good things for the sport," says Larry Weinstein, CEO of the Racing Association of SA.
Catherine Hartley, CEO of the Thoroughbred Breeders Association, says he has "been a massive contributor to the thoroughbred industry for many years".
This year, for the 10th time in a row, Jooste was named the Equus SA racehorse owner of the year. Klawervlei Stud, which is situated near Bonnievale in the Western Cape, and in which Jooste has a stake, was named the Equus best breeding stud.
Last year, Jooste told the Financial Mail: "Outside of rugby, horse racing is the sport I love the most. I watch all the races on my computer in the evening, because every day there are horses running somewhere in the world. I’m in the breeding business privately and if you breed a horse that wins, né, that’s like watching your child competing at primary school.
"It’s very relaxing to me and gives me the comfort of thinking in a different world to that of Steinhoff."
Jooste owns Klawervlei with close friends businessman Chris van Niekerk and Investec Plc MD Bernard Kantor, and John Koster.
Now, with his wealth on the rocks (his personal stake in Steinhoff has fallen by R3.2bn to R316m in the past three weeks), Jooste could become a liability to the industry.
"Jooste will have to liquidate assets to pay fines and legal costs to keep himself out of jail," says Warren Jervis of Old Mutual Asset Management.
Says 36One Asset Management’s Evan Walker: "Civil and criminal litigation could drag on for 10 years."
Certainly, Jooste has never been afraid of parting with money to get the horses he wants. He proved this in characteristically grandiose style at the Cape Premier thoroughbred yearling sales in January 2016, when Mayfair Speculators, partnering with Coolmore Stud in Australia, bought a colt called Silver Coin for R6m — R800,000 more than the previous record.
Actually, Silver Coin was just one of 22 yearlings bought at the auction by Mayfair Speculators for a total of R24.5m, while Klawervlei was the top vendor, raking in R38m.
But Jooste was not content to be the biggest fish in the relatively small pond of SA horse racing; he tried to emulate this in Europe, too.
In France in 2014, he made a splash at the Arqana August yearling sale. First, Mayfair Speculators snapped up a filly for €700,000, then it topped this by bidding €1.1m for a colt.
Jooste acted to increase his firepower in Europe in 2016 through partnerships with Coolmore, China Horse Club and Qatar Racing. The alliance kicked off by buying 20 yearlings.
The Epsom Hill deal, which made headlines in the UK, considering the track’s much-storied history, spoke of Jooste’s desire to plant a flag firmly in Europe as well as in SA.
The Epsom deal was struck with Investec, the banking group that sponsors the Epsom Derby. Considering Jooste’s friendship with Kantor, it probably wasn’t especially difficult to nail down the deal. Today, that hill has been renamed Poundland Hill.
Now that Jooste is having to sell his horses, will his partners take them off his hands at market prices? Or will they follow human nature and go on the hunt for bargains? Either way, Weinstein believes the racing industry is resilient enough to overcome the challenge.
"Jooste is the biggest racehorse owner in SA but, even then, he has a total of only 300 horses in training and a number of [about 100] brood mares," says Weinstein. "There are 5,000 race horses in SA so Jooste’s number is not enough to cripple the industry."