Fiduciary Style: The New Backstretch Standard?
A racehorse owner's credo. From an outsider, 1 year into the ownership game.
I recently converted from longtime horse racing hobbyist to considering myself firmly in the business. By some standards, that means spending 500 hours a year working on things related to the development, maintenance and growth of being a racehorse owner. In full, or as part of a partnership. The latter is one of the strongest growth trends in the industry. And I’m smack dab in the middle of it
I’m also a former “investment fiduciary.” What does that mean? In my prior career, which I retired from in 2020 after 27 years, my job was to put the goals, concerns, aspirations and risk attitude of my clients first. No exceptions! In my particular field, that meant managing their money in a manner which was 100% putting them first. No commission distractions, or “good enough” type of business ethics and service was acceptable. It is the same thing that all registered investment advisor principals, client advisors, CPAs and attorneys commit to.
I’m several years removed from that field, though as you can tell if you Google or ask AI about “Rob Isbitts investing approach” or something like that, you’ll get more than you bargained for. In my first 5 years of semi-retirement, I’ve continued as an investment researcher and writer, including my work at our separate, investment-oriented Substack site, ETFYourself.com.
I don’t provide personalized, fiduciary advice anymore. But 1,000+ published articles and lots of investment intellectual property later, I still try to convey what I’ve experienced, so that people can learn from that. Then handle it as they see fit. As I say, “use the Y in DIY investor - take what I do and say about investing, and figure out what matters to you.”
Yet when it comes to investing in a different asset class - racehorses - now I am the DIY investor. A role-reversal I find both exciting and fascinating. And given my background in professional asset management, I’m not fazed by the endless parade of discouraging sentiments toward the racing industry, and of racehorse ownership.
Why? Because I’ve been doing my due diligence. As any owner of any asset should.
The biggest barrier to entry for professional investors in the horse business has historically been the “Transparency Gap.” For over a century, the backstretch of a racetrack has been a place of opaque billing, unaligned incentives, and “trust me” handshakes. To professionalize this, management must move away from the “hobbyist” mindset and adopt what we call a Fiduciary Style.
In the financial world, a fiduciary is legally bound to act in the client’s best interest. In the racing world, where that legal designation doesn’t always exist in the same way, a “Fiduciary Style” means voluntarily adopting those principles. It starts with the ongoing expenses of keeping a horse fit to race on a regular basis. That can even go as far as capping expenses.
Or, in the case of the first partnership I joined up with, In Front Racing Stables, no ongoing bills at all. My friend, In Front founder Howie Heiberger, is one of a small number of racehorse partnerships that trade off a portion of the racing purses won, in exchange for the trainer covering their own monthly expenses. As with anything in business and really in life, there are tradeoffs. Or as I say in my other biz, there is return and risk. They are 2 dials, to be turned up and down as one wishes.
Of course, that involves a lot of searching, testing, and (there’s that phrase again) due diligence. Racing is a game, and it was a hobby for me for some time. A fun little weekend thing. Then I decided to put more of an effort toward it. And what I’ve found is this:
There are many ways to “do” racehorse ownership. There are ways to do it in a way that risks a lot of money that doesn’t have to be risked. And other ways that are akin to “trust me” when they need not be that way.
Those with the big-big-big money get what they pay for: white glove service and business acumen. The rest have many excellent resources and outlets to work with. But telling them apart can be difficult. Racehorse ownership’s “middle class” draws in a lot of top-10% wealth types. But separating what will be a good experience, win or lose at the track, from the rest is not very structured.
Nor is the process finding it efficient. It took me years before I made even a tiny move, committing hundreds of dollars, then thousands. It doesn’t have to be that difficult. And if this site and the people in my racing network have anything to do with it, it won’t be forever.
Transparency, trust and business process are what I’ve found to be the differentiators so far. And for the sake of the racing industry’s long-term survival, I’d like to see them communicate the multi-pronged value of this experience and venture. Namely:
You are in the sports business, and it feels like it. Not just a fan.
The learning curve is infinite. You can never know enough. Every day, every race, is a new piece of the puzzle. Just ask the lifers about that. I was once told that happiness is all about having things to look forward to. This business brings you that, regardless of how many times you stand in the winner’s circle. Put another way, TRYING to win in this game, a very tough task, is one of the central parts of doing it. The challenge.
If the financials are what drives you, you might see some very nice ROI (Return on Investment), especially after-tax, thanks to the massive tax incentives now being granted to racehorse owners. But if making a profit while acknowledging the risk is all you care about, maybe look into venture capital or private equity. Where all you get is a number telling you what you won or lost.
I say no thanks to that “experience.” This one, owning racehorses in one of many forms available, this experience and lifestyle, plus the people you meet and your access to the sport as an owner? I choose that!
And, while I decided to make it more of my “time allocation” in my 60s, devoting at least double the litmus test of 500 hours a year to it for a while now, that’s not for everyone. Dabblers can trade off time, effort and risk by outsourcing the parts of being an owner they prefer not to think about for a moment. And let the horsemen and their team fill you in as things progress.
The racing industry helps itself when it thinks and acts more like fiduciaries do
So that’s a former fiduciary (me) thinking like a fiduciary (old habits die hard) even though I no longer act in that capacity. But people in the racing business can certainly “act in a fiduciary manner” toward their investors - transparency, clarity on costs and markups, and simply telling it is like it is, in English, not industry-speak?
Examples include the traditional training model—where a trainer sends a monthly invoice for whatever was spent on vets, feed, and vitamins—is a recipe for friction. It places the owner in a defensive position, constantly questioning the “mystery bills” that arrive after the fact.
A professionalized model could replace this with a Capped Day Rate. When a trainer agrees to a flat, all-inclusive rate that covers labor, feed, and routine care, the incentives are suddenly perfectly aligned. The trainer doesn’t make their profit by marking up a blacksmith bill; they make their profit by being efficient and, most importantly, by winning races and earning their 10% share of the purse.
This transparency is amplified by the use of Technology and Open Communication. In 2026, there is no excuse for an owner not to have real-time access to scouting reports and financial ledgers. By treating the stable like a boutique private equity fund—with regular reporting and professional oversight—we remove the “mystery” that has kept so many smart investors on the sidelines. It turns the ownership experience from a stressful “black box” into an intellectual pursuit that mirrors the way successful people manage the rest of their wealth.
And that’s something I know about. More than a little. Hopefully, through having people join me in this Substack community, participate in the chat, tell their interested friends and family, and provide ideas for future content and features, we can make a small dent. Or, maybe a big one.