AGAINST THE ODDS
South African horse racing was in a sorry state a few years ago. Now things are looking up, thanks in large measure to a man who doesn’t bet on horses and says he wants to make their owners feel like heroes
When Greg Bortz first came to Kenilworth racecourse, he found a property with leaking roofs, broken escalators, peeling paint and toilets that didn’t flush. The restaurant had the feel of a “a hospital canteen, with plasterboard ceilings, old blue carpets”, he says. “It was the worst of the worst.”
The businessman is speaking to the FM from his office at Kenilworth, a spacious grey room with a view of the racecourse. Two large TVs are tuned into horse racing events in other parts of the world. Elsewhere in the complex, that same restaurant has been kitted out with “top of the line” finishes that preserve the heritage and history of racing. It’s one small change in a much larger turnaround.
Bortz made a dramatic entry to local horse racing in mid-2022 when, on the day Cape Racing was about to default on its payroll obligations, he stepped in with an emergency loan.
The focus, he says, “was on saving racing, first and foremost”. Then it was about picking up Cape Racing’s real estate, located in Kenilworth, Durbanville and Milnerton, “and really taking it to the next level”.
At the time, horse racing in South Africa was in a nosedive. It had been one of the casualties of the Steinhoff implosion; disgraced CEO Markus Jooste was not just the largest racehorse owner in the sector, his company Mayfair Investments was also the largest shareholder in JSE-listed Phumelela — the biggest horse racing and betting operator in South Africa — and Phumelela’s shares had tanked by association. Then came Covid and the hard lockdowns that brought races to an abrupt halt.
By May 2020, Phumelela had filed for business rescue. Three months later, it was bought by Mary Slack (of the Oppenheimer family) — a move that is widely credited as saving the country’s racing industry.
Now Bortz — who doesn’t bet on horses — has become a key player and is driving the turnaround at Kenilworth, along with Owen Heffer of sports betting company Hollywoodbets (they’re also in partnership in Durban).
Bortz is no newcomer to this game. The Durban-born businessman, also the CEO of Grand Parade Investments and founder of private equity fund
Creo Capital Partners, moved to California at a young age, making his money by buying distressed companies and turning them around. “I love distressed companies,” he says.
He’s undertaken turnarounds in the food sector, insurance and apparel and hosiery, and gleaned insight about how to extract yield from real estate assets. Now, he’s entering horse racing through Cape Racing, whose properties have a combined value estimated to be north of R700m.
“The turnaround philosophy is always the same,” he says, “but the industry is different.”
Part of the plan is to stimulate interest in, and demand for, the racing product and its horses. If more people buy horses, there are more horses in the races — which spurs interest and ups the excitement and opportunities for people to place bets. The larger plan is the turnaround of the racecourses themselves.
Bortz has no shortage of ideas on this front. He envisages a lifestyle and leisure destination at Kenilworth.
There will be a family-friendly entertainment centre with running trails, restaurants, a children’s emporium and fan parks with huge screens. A convention centre and a hotel may be on the cards in the more distant future.
Instead of people heading to the V&A Waterfront, Bortz wants them to head to Kenilworth for a run, a sandwich or a game of padel. “The kids’ section will be sensational,” he adds.
It’s not just Kenilworth. Over in Durbanville, he and Heffer are working with Rabie Property Group to build a residential development at the racecourse.
In part the upgrades are about enhancing the feeling of exclusivity for horse owners and “treating them like heroes”, says Bortz.
“The feeling you have when you have a horse that wins a race is like no other ... I don’t play golf, but I’m presuming that if you hit a hole in one, it’s the equivalent jubilation,” he says.
“But if you’re doing it and not having enjoyment, walking into leaking surroundings, you don’t want to bring friends because it’s so decrepit, you will leave the sport. So it’s about celebrating the owner, making them feel special and increasing prize money stakes to make the silly economic proposal less silly.”
There’s not much money in owning a racehorse, he says. “It’s like owning a yacht. You get enormous joy out of it if you enjoy that sort of thing, but you can’t ever say it makes financial sense. It’s not an investment. It’s an entertainment expense,” he says.
It comes at no small cost. As far as breeding is concerned, stallions cost R15,000-R250,000 a service — so you need financial heft behind you, says
Justin Snaith, one of the top trainers in South Africa. Treatment and care of the horses is complicated when they have to perform at a high level, he adds. That’ sa cost, along with the keep of the horse and vets’ bills, that will typically set an owner back R12,000-R13,000 a month, says Bortz — and they would recover a third to half of that.
As one owner tells the FM, she writes the cost off from day one. In her case, horse racing offers an intergenerational experience and is more about the social scene.
A financier adds: it’s about “return on ego”. And while there are tax benefits, there are not as many as there used to be. “You play golf, it costs you money, you have a boat, it costs you money ...
It’s about spending time with people. You’ll have fun, you’ll meet some people, you make some contacts, maybe do some business.”
For owner and breeder Gaynor
Rupert, it’s about the full experience. “I love everything about it,” she tells the FM. “Some people prefer the breeding or the racing, whereas I enjoy every aspect of it from the breeding shed to seeing the horses on the track.”
And, she adds, it’s not necessarily about owning a horse outright. Groups of people buy small stakes in horses, with some horses having as many as 500 owners. “You can have as much fun and excitement if you own the left hoof as owning the entire horse,” Rupert says.
Still, on race day, no-one seems to mind that it’s not the best investment vehicle. In January, Kenilworth hosted both the L’Ormarins King’s Plate — won by Rupert’s Charles Dickens — and the World Sports Betting Cape Town Met. They had their fair share of glitz and glamour, offering a place for visitors to showcase fashion, take a flutter and socialise after the races. The Met even had a mobile spa.
Rupert has been involved in horse racing for years, having bought her first filly in 1986. Today, she owns Drakenstein Stud in the Franschhoek Valley (most breeders are in Franschhoek,
Ceres and Beaufort West). In her mind, the industry is looking up, and she says it’s chalk and cheese from the “bad old days of Phumelela”. Hundreds of millions have been spent on fixing Kenilworth, the stakes are up, and more people are coming from around the world. “They love the Cape,” she adds.
As Snaith tells it, people also come from all over to purchase horses in
South Africa, looking for a horse with temperament, pedigree, confirmation and movement.
Still, Rupert says, the export market is limited by stringent requirements, which leave local owners unable to send their horses to many parts of the world. If the export protocol could be sorted out, she adds, it would unleash the industry.
“People love racing in South Africa, it’s a fraction of the price, and we have very good horses. However, we cannot get our horses out of the country because of African horse sickness, so our prices are much lower than they should be.”
It seems an unnecessary thing at that. Research has shown that it’s virtually impossible to export a case of African horse sickness — a chance of something like less than one in 800-million, she says. “Unfortunately, it’s a government to government [issue] and it takes a long time,” she says. “The EU did an audit some time ago and we are hopeful of a good outcome.”
For now, things seem on the up all round. As Snaith tells the FM, he was about to leave South Africa during lockdown, and take up training work abroad. “But when these individuals came in to save the day, I felt I had to support this. Now I feel I’ve made the right decision staying in Cape Town.”