The speed with which the Aquis operation has gained a foothold in the industry since entering the market three seasons ago has been quite astonishing.
Key to their success has been the number of partnerships Aquis have entered into along the way with like-minded enterprises which is seen as the modern way to grow as a business. Bluebloods spoke with Aquis’ Chief Executive Officer Shane McGrath in the lead up to the Easter Sale.
Shane, I can’t imagine the original Aquis business model and associated plan could have predicted just how quickly the company has embedded itself as a key entity within the industry. Where do you see that business model at this moment?
The current Aquis business model is evolving all the time. By way of an example it has been well documented we are building a very strong team of individuals respected throughout the industry, to ensure we and our clients have every chance of success going forward.
Currently we are focused on three key components which are: that we stand commercial stallions we believe our clients can consistently turn a profit from; that we are breeders ourselves and that every foal we have is destined for a sale if suitable; and that we are investors looking to support the market by buying colts that we see as potential stallions if they perform on the track.
We have the advantage of being new, we are taking on new ideas, adopting fresh ways of looking at things and we aren’t restricted by tradition and tied into old ways. Our current business model recognises the way the industry has evolved on an association and relationship basis and teaming up with the right partners is now a key component of being successful.
Looking at those strands individually what was the raison d’etre with the stallion selection process?
From the time we took over the Canungra property in Queensland the business has had a national approach, but we’ve always been mindful of the Queensland industry and the role we could play to help reinvigorate it. We listened to Queensland breeders who told us they sought to use proven stallions at prices that they could make a commercial return on, so we stood horses like Holy Roman Emperor, Husson and Domesday. We were delighted when the industry supported us as evidenced by Holy Roman Emperor and Domesday both covering over 100 mares in their first season with us.
We were also aware of the need to bring some new blood to the market and again we listened to Queensland breeders when they pinpointed the region lacked a truly fast son of Champion Sire Snitzel. We were able to secure Spill The Beans who advertised his ability winning the Gr.2 QTC Cup at his final start in Brisbane. Again, the decision has been supported by the industry as he covered over 200 mares in his first season.
And how did the reverse shuttle deal for Spill The Beans come about?
The National Stud in Newmarket, through Johnny McKeever, was looking for a son of Snitzel, such is his global reputation. After inspecting several of his sons they approached us about Spill The Beans as they thought he was the closest match with his sire. Again, we saw it as building another partnership similar to the one we have with Tara Farm in Ireland who stand our Caulfield Guineas winner Divine Prophet in the Northern Spring.
Digressing, the partnership with Emirates Park gives you a presence in the Hunter Valley and a ready-made stallion roster. I’m struggling to think of a similar arrangement on the world stage, certainly not one of the size of your two entities. What can you tell us about it?
In its simplest form it is a landlord/tenant arrangement but comes with the added responsibility of Aquis being custodians of the Emirates Park breeding stock. We have taken a long-term lease on the property, recognised as one of “the jewels” in the Hunter Valley, and manage the stallions and 100 or so Emirates broodmares and young stock. It’s exciting and one benefit is we’ve been able to offer terms that make Emirates Park an attractive option for our Queensland çlients to access high quality Hunter Valley stallions.
You mentioned that breeding to sell is a key component of the business, what stage is the development of that strand at present?
The plan with all our foals is straight forward, we are a selling business and that is how we generate revenue. Every foal we breed will be targeted at a sale if they are of the desired standard and we’ll take 20of ours and our client’s best to Riverside ready to sell. We don’t hold the good ones back, every foal or yearling is for sale.
Last year we bred around 200 mares of our own and 100 of Emirates stock which is a sizeable portion of the breeding population, as a whole. While it was important to the business to have a critical mass to start with, the key now is refining the quality of the breeding stock we have specifically to suit the stallion shares we hold, which is an ever-evolving process.
One thing we are conscious of is we are always breeding to appeal to international buyers, but to truly understand what they want you have to have some “skin in the game”. To achieve that we race horses overseas, we shuttle stallions and we breed mares to our stallions and others in the Northern Hemisphere where again we are building partnerships.
And what of the Aquis racing interests, what strategy do you employ when acting as a buyer?
We are looking to identify colts that suit our trainers, that will work within our system and that with an ounce of luck will find a place in the stallion barn.
As part of the national approach our racing stock are predominantly trained in Queensland by Toby Edmonds, Tony Gollan and Steven O’Dea, but then we have partnered with trainers of the calibre of Gai Waterhouse and Adrian Bott, Chris Waller, Peter and Paul Snowden, David Hayes, Mick Price and Ciaron Maher in horses that we’ve purchased which gives us a presence outside of Queensland. We also support a number of other trainers that have supported us, again often outside Queensland.
We are thrilled by what our racing stables have achieved in a short space of time under the management of Kacy Fogden
at our Canungra base, with its world-class pre-training facilities. Just this calendar year we have been involved in over 50 wins to date and we’ve been part of the ownership of the last two Magic Millions Classic winners in Houtzen and Sunlight. Also, through partnerships, we have been fortunate enough to be involved in racing Extreme Choice and Invader, the latter now an exciting addition to our stallion roster that we hope will catapult us into the A-League.
Overseas we recently had a winner with Kevin Ryan in England thanks to a War Front colt called V J Day and in America we race horses in partnership with Stonestreet Stables where our Kitten’s Joy colt Machtree recently won at Gulfstream Park.
Whilst the owners of Aquis, the Fung family, have only been involved in the industry for a short while, they have been operating Aquis’ other business portfolios in Australia for 30-odd years. Time spent in Australia has engrained them within the Australian culture and larrikin lifestyle, which explains the emphasis on strong partnerships and fostering mutually beneficial business relationships.