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Head-over-hoof: Horse sells for record $8 million

Photographer | Tattersalls

For Tattersalls bloodstock auction in Suffolk, U.K., selling thoroughbred racing horses is big business. This week has demonstrated just how big, following the record-breaking sale of a horse for 5 million guineas, equivalent to £5.3 million ($8.4 million).

The unnamed filly's sale to Sheikh Joaan Al Thani — a member of the Qatari royal family — marked the highest price fetched by a horse in European auction history, as well as the highest price ever for a one-year-old horse. It topped the previous record sale of a mare, "Magical Romance", in 2006 for 4.6 million guineas, and was double the amount the most expensive yearling was sold for last year.

(Read more: Horse cents: Racehorse prices back on the run)

Buyers and sellers present at this year's record-breaking auction said it illustrated how the global economic downturn had had little effect on the horse breeding industry.

"There has been no recession, maybe a little bit at the bottom end, some of the smaller breeders. Some of the city boys that are in little syndicates, maybe they have held back a bit, but for the big horses at the top end, the market is very healthy," said Alastair Donald, a bloodstock agent from Sackville Donald, who buys and sells race horses for clients mainly based in Hong Kong, Australia and U.S.

Jimmy George, marketing director at Tattersalls, said that despite the health of the industry, 5 million guineas for a horse — who is yet to make her racecourse debut — remained exceptional.

(Read more: Moving million-dollar racehorses)

"There are people out there willing to spend that kind of money on a top-class yearling, that has not been the case for a while, but it is at the moment," he said.

Horses have traditionally always been sold at auction in guineas — the equivalent of one British pound and one shilling pre-decimalisation — but Tattersalls is the only auction house that still prices in guineas.

New money

The Dubai ruling family and Irish tycoon John Magnier, who runs Coolmore stud farm, have long been the biggest buyers of top horses at auctions. However, they have been met with new contenders in the Qatari royal family in recent years, who are giving the "old guard" a run for their money.

"The newcomers are definitely the Qatari royal family," said George. "They have made a significant impact on the sport in the last couple of years and are very active here this week."

Harry Herbert, managing director of Highclere Thoroughbred Racing, a syndicate that counts celebrities such as Sir Alex Ferguson and Elizabeth Hurley among its shareholders, added that Qatari money was "fantastic" for the sport.

(Read more: Thoroughbred prices on the mend)

"I think they are definitely heavyweight contenders, they are in it for the long run. They have a taste for it, you cannot put a price on the buzz and excitement of winning. It is why the Queen (Elizabeth II) does it, it is why my shareholders do it and it is why Sheikh Joaan does it," he said.

For smaller-scale buyers, syndicates exist that enable people to join forces and buy shares in a horse. Syndicates are normally divided into 20 shares, with each share costing around £16,000.

"It is purely for the fun of it, the dream is right here – maybe that will be the horse that wins the Derby, and that is what fuels people to do this. What I am trying to offer is the best way of doing it without spending vast sums. We give a very high level of information to our owners, everyone is treated entirely as if they own the horse outright," said Herbert.

Herbert himself grew up on the grounds of Highclere castle, known to viewers worldwide as "Downton Abbey". Many of the events put on for Highclere shareholders are in the grounds of the estate that is home to the fictional Lord and Lady Grantham.

(Read more: What it costs to own your own Downton Abbey)

"My brother-in-law is John Warren, who is the Queen's bloodstock buyer, and he is an incredible buyer. He has always bought all of our horses. Even though this sale averages over 200,000 guineas a horse, we have bought some here for 100,000. We bought a horse this morning for 135,000," Herbert said.

"We will have a parade of all the new yearlings at Highclere castle the week after next for prospective shareholders," he added.

(Read more: Downton Abbey popularity spurs merchandise)

Donald added that he chose to sell horses to foreign buyers because prize money overseas tends to be much heftier than in the U.K., where it can be very difficult to make your money back on an expensive horse.

"Horses that run in foreign countries are running for decent prize money, so they can afford to buy our horses for a lot of money. The ones I buy for Hong Kong for 500,000 guineas have a good chance of earning that back – whereas in the U.K., it is very, very hard," he said.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave

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