Eldon Farm: region’s new major player

Virginia-based operation has earned an Eclipse Award and sold a $2.1 million broodmare—and that’s just for starters.

Story by Joe Clancy Jr. Photographs by Douglas Lees.

At a steeplechase tailgate party in 2001, Ken Luke turned to trainer Doug Fout and announced, “I want to get into this—get into racing. How do I do it?”
Having heard that particular statement from others dozens of times in the past, Fout made small talk and went on about his day. A few months later the two met again, and Luke restated his goal. This time Fout listened.

“I almost never pay attention to people when they ask me the first time, because usually they aren’t serious,” explained Fout. “If they ask a second time, they’re serious.”
This man was—and is— serious.

Very quickly, Luke has evolved into a Thoroughbred industry player—racing, buying, selling and breeding quality horses, building a farm and making inroads with some of the game’s biggest names. Luke’s Eldon Farm races over jumps with Fout, competes on the flat with trainers Todd Pletcher and Kiaran McLaughlin, and sells at auction with Taylor Made and Gainesway.

Already, Eldon has copped an Eclipse Award—with 2004 champion steeplechaser Hira­pour (Ire)—and sold a $2.1 million broodmare, Chimichurri, a graded-winning daughter of Elusive Quality who brought that price, in foal to Unbridled’s Song, at the 2005 Keeneland November sale.

“I got interested in steeplechasing, and we thought, ‘Why not try the commercial side?’ ” recalled Luke. “We went very cautiously and carefully just by buying some horses to pinhook in 2003. Then we added some breeding, at least at a small level. It all started as a way to do more with the asset of the farm.”

Eldon Farm boasts 400 acres of lush turf near Keswick, Va., not far from Charlottesville. A cattle farm when Luke purchased it in 1999, Eldon has been transformed with two barns, a guest house, miles of fencing and some of the best bloodstock in the Mid-Atlantic region, including yearlings by Mineshaft, Vindication, Elusive Quality and Tale of the Cat.
Eldon’s business model focuses on quality, merging two important elements—Luke’s working capital and the vast equine knowledge of a team of advisers and staff. Eldon’s corporate structure starts with Rob Nelson, a longtime steeplechase owner and Virginia real estate specialist who was selling farm and estate properties when he took on Luke as a client. After Nelson found the Eldon property for Luke, he delivered much more.

The Eldon team also includes bloodstock manager Debbie Easter, a past president of the Virginia Thoroughbred Association who previously managed Albemarle Stud in Free Union, Va.; farm manager Ronnie Rhodes, a conformation expert with a show horse background; plus Noel Twyman (a former steeplechase jockey and flat/steeplechase trainer who ran a successful yearling-breaking business for years), Randy Miles (who breaks Eldon’s young horses), veterinarian Lisa Casinella and former Overbrook Farm employee Wayne Smith (who will run the new commercial barn at Eldon).

“I had met all these people with the horse knowledge, but they didn’t have capital to play at a different [higher] level,” said Luke. “There was an immense base of knowledge. I don’t know whose idea it was, but we just started thinking about taking advantage of it. We wanted to develop a strategy to become a high-end niche player.”

To all of that horse background, Luke brings a business acumen that plays well in the Thoroughbred industry. He dispatched Nelson and Easter on fact-finding trips to Kentucky, where they picked the brains at Gainesway, Fasig-Tipton and elsewhere before activating Eldon.

“If I’ve brought anything to the table, it’s the business thinking,” Luke noted. “Discipline. It’s hard, because I get excited, too; but if you marry the business with the horse expertise, I think you come out with a better decision. A lot of people would shy away from this business, because they don’t have the horse knowledge. I never would have attempted to do this without this group of people.”

Luke co-founded MedQuest Associates Inc., a medical imaging company, in 1993, and helped steer the firm to a spot on the Atlanta Business Chronicle’s list of fastest-growing private companies. MedQuest operates about 100 MRI and CT scan centers nationwide. In 2002, JPMorgan Partners LLC paid $350 million for a large stake in MedQuest, though Luke and his business partner, Gene Venesky, are still the firm’s biggest individual shareholders.

Before MedQuest, Luke worked in the banking industry for seven years, as well as in medical marketing/sales. But despite his impressive corporate resume, he is a farm boy. Now 57, he grew up on his family’s southern Georgia farm, which grew peanuts, cotton and tobacco. It was also home to some cows and the obligatory handful of horses. Luke’s father, Johnny J. Luke, still actively farms at age 81.

“Early as we could walk we worked on the farm, so by 18 I was running,” remembered Luke, echoing the thoughts of many a farmer’s son. “College looked really good, but you don’t appreciate the values and all the things you’re taught on a farm until you get away from it.”

Luke rode horses on the farm, and gained an appreciation for them—even if Georgia cow ponies are a long way from million-dollar yearlings.

“To be in this business you have to love animals,” Luke said. “You couldn’t just be in it to make a business out of it unless you have an appreciation for the animals. You’ve got to love them, love to see them race. They are the best four-legged creatures put on earth. I compare them to people—their personalities, the way they perform or don’t perform. There’s not a lot of difference between horses and people when it comes to that.”

The farm.
Eldon Farm dates back to a 1735 land grant made up of nearly 18,000 acres along the Southwest Mountains. Named after Britain’s Lord Eldon, the farm has changed hands numerous times over the years through marriages, deaths and bankruptcies. It was renamed Brookwood in 1904, and then re-renamed Eldon in 1924. A fire took the original house that year, and the current home was substantially remodeled in 1937. Eldon has been residence to an invalid clock collector and operated for a time as the Eldon Farm Egg Factory—renowned for the size of its eggs and the strength of their shells.

Luke bought the property as a future retirement home for himself and his wife, Maureen. Daughters Stephanie and Emily were in college, the business tasks were decreasing and the hubbub of Atlanta had become a little too much, so relocating to a Virginia farm made sense. But then the work began. The place was covered with wire fence for cattle, and it needed a thorough overhaul—which it received.

“In a couple of years we have turned it into a showplace, but all we were doing [at first] was cutting hay,” said Nelson. “That’s what started the whole thing. We looked at what else we could do.”

Steeplechasing came first, but a steeplechase owner doesn’t need a 400-acre farm, and the financial side of the American jump game just isn’t substantial enough. “Steeplechase was for fun and amusement,” explained Nelson. “We had a different perspective than we do now. Now we’re trying.”

As a result of that effort, Eldon is now home to 25 horses—mares, foals, some layups, yearlings not quite ready to be broken and so on. Most of the farm’s mares foal in Kentucky, but they live at Eldon. Plans call for a broodmare band of 10 to 12. Maybe the same land that helped to grow those big, strong eggs will produce champion runners.

The horses.
Eldon’s first Thoroughbred was the steeplechaser Imperial Gold, a New Zealand import who won in his second start in 2002, followed by a stakes score the next year. The hook was set, and soon the stable included additional steeplechasers—purchased in the U.S., New Zealand and England.

Hirapour arrived in 2003, the product of a perfect storm of circumstances. The Irish-bred had won five consecutive hurdle races in England, rocketing from maiden to highly regarded prospect. Fout had told an English agent to look for a quality horse. The call came in August; by November, Hirapour had won a Grade 1 novice stakes. Running in the Eldon colors, Hirapour has won five races and earned $484,790, while bronzing a reputation as one of the game’s hardest-trying horses, never finishing worse than third in 11 American starts.

“The most joy any horse has provided has been Hirapour,” said Luke. “Everybody tells me how lucky I am, and I believe it. He’s such an animal, just a joy to watch.”
No Eldon horse has raced as often as Hirapour or with as much success—though plenty of others have provided thrills. A Kingmambo filly sold for $900,000 at Saratoga in 2004. A Mr. Greeley colt brought $950,000 at Saratoga in 2005. A Forest Wildcat filly went for $440,000 in 2005. Each was a pinhook success, bought as a weanling or yearling and sold as a yearling or 2-year-old.

Like most buyers, Eldon works hard to dig up value and takes a team approach to the buying process. First, Luke, Nelson and Easter decide what to put on the shopping list— colts, fillies, horses by certain sires, future race horses or potential pinhooks. In advance of the sale, the team uses the catalog to create personal short lists (though they’re never exactly short, said Nelson). The day before the sale, the lists get compared, critiqued and trimmed. At the sale, Eldon representatives look at every horse—at least for the first couple of books—in teams of two dispatched by Easter. Then they regroup throughout the day and further shorten the list to a few favorites. All the while, Casinella works to ensure the horses on the list fit the bill medically.

“We’re a very picky group,” said Nelson. “Everybody comes from different disciplines, and we have to have a consensus to keep a horse on our list. If we don’t have it, the horse gets knocked off. Sometimes, somebody’s got to make an allowance. Ronnie might have to give on the conformation end because Debbie and Noel see the race horse. There have been some fairly warm discussions.”

Eldon could buy almost any horse at any sale, but tries to follow the model. Spend too much on a potential pinhook, and there’s no profit. Easter does as much homework as she can to decipher potential prices from owners and consignors, but the rest comes down to instinct, feel and bravery.

“The prices are somewhat surreal right now, and it’s not like there’s a data base full of comparables we can go back and look at,” said Nelson, using jargon from his real estate days. “We set a price and normally go a tick or two over. Ken is there, and it comes down to how infatuated he is with the horse or how much he’s willing to stomach. If it’s a horse we’re buying to keep, we generally will spend the money. Otherwise, it’s a matter of ‘Can we buy the horse for a certain price and turn around and pinhook it in six to eight months and come out well ahead?’ We’re looking for a significant gain.”

The business.
Keeping in mind that Eldon didn’t begin with the goal of becoming a pinhooking power, all the success is either beginner’s luck or the result of a well-crafted plan—or both. Luke and Nelson will admit that, certainly, they’ve enjoyed plenty of luck, but neither pays full credit to the fates.

“Ken likes a challenge and likes to make money,” asserted Nelson. “For him it’s another business that couldn’t be any more challenging or any more risky. That’s part of the appeal.”

Before launching the farm, Nelson and Easter spent extended periods in Kentucky looking at horses and generally examining the industry.

“We went to Bill Graves [at Fasig-Tipton] for free advice, and he was extraordinarily helpful,” said Nelson. “The last three years they have given us a lot of good guidance and gone out of their way to help a young farm get underway—from setting reserves to [letting us know] who we’re up against. We’re at a different level now, and we need to know what we’re doing.”

Kentucky farms opened their gates to Eldon representatives, who needed to make decisions on sires, on where to send sales horses, on how to build barns. No one at Eldon is a beginner, but everyone needed more information.

“Debbie and I just went around to as many farms as they would let us on, to see how they were laid out, how they did business, how they took care of their horses,” recalled Nelson. “Gainesway really made a point of befriending us and answering questions, took us seriously. It would have been easy to leave us alone.”

Not anymore. Before they show the Eldon team a horse, most representatives from Kentucky farms now want assurances that it won’t be resold. Big names such as Jess Jackson, who bought Chimichurri (from a partnership of Eldon and Taylor Made Sales Agency), and John Ferguson, who bought the Mr. Greeley colt at Saratoga, know the Eldon Farm name.

Chimichurri was purchased for $675,000 at the 2003 Keene­land November sale as a brood­mare prospect, not as a pin­hook, but she became too valuable not to sell—and that’s where Luke’s past business expertise comes into play.
“I don’t know that many people in [this] business, so we just go out there and do our thing,” said Luke. “We change the way we do things, too—evolve into a different strategy like any business; it can’t be stagnant.”

Nelson pointed to the power of the sales market as a key ingredient in Eldon’s success. “We’ve gotten away from buying broodmares, because the prices are so inflated,” he stated. “It makes business sense to sell into this market—why wouldn’t we be selling? We bought mares to keep, but we can’t help but sell.”

The future.
Eldon Farm barely existed as a Thoroughbred entity three years ago, so talk of the future may sound premature—it’s all the future. Yet success breeds discussion, and Eldon has admittedly taken a conservative route thus far.

The next three years will include more pinhooking—the 2006 yearlings (four homebreds and two purchases) should sell well, and they will be joined by eight 2-year-olds.
“We’d step it up 10-fold if we could find the horses,” noted Nelson. “Stepping up to buy quality works. We’d much prefer to buy small numbers of good horses, try to get the best.”

Luke sings the same tune, albeit with a more corporate mentality. “There are 35,000 Thoroughbreds foaled a year, and only a very small percentage get to the races and are successful enough to become stakes winners,” he pointed out.

“It’s hugely skewed toward trying to find the quality horse. Everyone told me that. But when I looked at the numbers, I saw how true it was. The premise is to only play at the highest level we can afford. Let’s not get below a certain standard, because you have more risk of not being successful.”

Value fuels the engine, and it would have been easy for Luke to double or triple his initial investment in search of a home run. Instead, he’s wisely built the foundation of a power­house in the game for the long haul.

“The safest thing to do is to be conservative on the front end of any business until you learn it,” he said. “We’re always looking for value—buy the value horse who might turn into a nice surprise. It’s hard to do, but it’s the way to do it. You can find the value horse. For someone wanting to get into this, that’s what I would tell them.”