July 3, 2014 / 11:09 AM / 5 years ago

A Swiss oil trader, his cowgirl daughter and the rodeo art of 'cutting'

CALGARY Alberta (Reuters) - Nine years ago, Swiss oil trading billionaire Daniel Jaeggi was looking for a new place where his 14-year-old daughter Constance could learn to ride horses. She loved riding, but was afraid of the “shouty” teacher at the nearby stables.

So dad found a place across the border in France that happened to teach Western riding on American quarter horses - setting in motion the unlikely partnership of a vast commodity trading company based in austere, alpine Switzerland and a niche sport invented by Wild West cattle ranchers.

Constance quit English-style riding, learned to sit a Western saddle and fell in love with a rodeo event known as “cutting”, a sport borne out of routine ranch work that involves separating a single cow from its herd.

Mercuria, the upstart trading house that Jaeggi co-founded a decade ago and now rivals global giants such as Glencore, is the lead sponsor of the National Horse Cutting Association World Series of Cutting, and has invested more than $2.5 million over the last six years.

“I got into it as a way of sharing an activity with the children but pretty soon got the bug,” Jaeggi told Reuters by email. He is anxious that his own trading fame doesn’t overshadow the sport but is unabashed about his passion.

“It is definitely addictive.”

Constance now owns a ranch in Texas and is considered one of the best non-professional riders in the sport, which combines a rider’s skill and a horse’s training.

Jaeggi shies away from talking about his own aptitude for cutting, but Chubby Turner, resident trainer at the family’s Texan ranch and a leading competitor in the Open World Championship, said he and Constance have “natural ability”.

“They are both very coachable and strive for perfection,” Turner said.

Jaeggi’s two passions - cutting and oil trading - will come together later this week at the Calgary Stampede, the 10-day rodeo and festival that engulfs Canada’s oil capital every July. Mercuria Energy Group flags and signs will be dotted all over the Stampede grounds.

Since co-founding Mercuria with partner Marco Dunand in 2004, the company has ballooned into one of the top four commodity trading houses in the world, turning over more than $100 billion in 2013 and buying JPMorgan’s physical commodities business earlier this year, a deal that will dramatically expand its Canadian desk.

While it’s roots are in Europe, the company’s growing operations in North America - from Alberta to Texas and Oklahoma - helped forge its sponsorship of horse cutting.

“(These are) all regions where oil and cattle historically go hand in hand, so a partnership with the NCHA came naturally to us,” said Jaeggi.


Like most classic rodeo events, cutting grew out of ranch work. Cowboys would ride into a herd to check for signs of illness such as foot rot or pneumonia and drive out cows in need of medical attention. Some ranchers, convinced their horses were more skilled than others, turned it into a competition.

It is also unique among rodeo disciplines. For one, it requires competitors to work together. In addition to the main rider, four other competitors in the arena known as herdholders and turnbacks help control the remainder of the herd.

A more unusual facet of the sport is that the horse is expected to do much of the work by itself.

After “cutting” the cow away from the herd, the rider effectively lets go of the reins and the horse takes over, controlling the cow and keeping it from turning back to the herd without the rider steering.

In the timed two-and-a-half minute event, judges award points on how skilfully the horse controls the cow, with two or three cows being cut from the herd in that time.

“It’s kind of like (American) football for horses. The herd becomes the defensive end zone the cow is trying to get to, and it’s up to the horse to stop that from happening,” said Ty Hillman, manager of industry relations at the National Horse Cutting Association (NCHA), which has more than 16,000 members.

Once the “cut” has been made, it is a fine line between the rider moving with the horse to help preserve its advantage, and not throwing it off balance, Jaeggi said.

Given how much a rider relies on the horse, the animal’s instincts and muscle memory are crucial. While training goes a long way, the top cutting horses tend to be those with the best breeding and usually the highest price tag.

Some say the lower technical ability needed to compete in cutting makes it more inclusive than most other rodeo disciplines. Others argue it is one of the more elite Western sports, as the best horses are so expensive - some yearlings sell for between $150,000 and $200,000 - and cattle are involved, incurring yet more cost.

“It was always the businessman, the oil guy, who could go out and afford the good horses back in the 1960s, and the trainer would haul it,” said trainer Guy Heintz, who owns a ranch near Calgary and won the Stampede cutting event in 2009 on a horse he raised and trained.

Still, prize money at the lucrative top shows is in the region of $200,000, and Hillman estimates the offspring of the all-time leading sire in the NCHA, a stallion called High Brow Cat, have won roughly $50 million over the years.


Done well, cutting is mesmerizing to watch. At his barn in the foothills of the Rocky Mountains, Kent Williamson trains horses for the sport using buffalo, which are both cheaper and smarter than cattle.

Once a horse is “hooked” onto a buffalo, the two animals became mirror images, locked in a delicate dance that Williamson called the “balance point”.

A year ago that training went to waste when the worst floods in Alberta’s history left much of Calgary’s Stampede Park underwater. Despite frantic clean-up efforts that enabled the rodeo to go ahead, organizers were forced to cancel some events, including cutting.

This year Stampede will welcome back the event.

In the Mercuria NCHA World Series of Cutting, the Swiss trading house adds $50,000 to the entry fees pot, meaning the winner at Stampede will likely net between $7,000 and $10,000.

“Everybody wants to be able to show at Calgary Stampede,” said trainer Heintz. “It’s one of the biggest events and there’s a lot of prize money. Everybody wants to say they were there.”

Reporting by Nia Williams; Editing by Jonathan Leff and Ken Wills

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