The results from thoroughbred racing's most recent highly publicized attempt at a hedge fund has apparently whetted the appetite of investors for a shot at the gold ring or the Triple Crown or just some of that alleged $50 million that is going to be paid for syndication of Big Brown. Three of racing's most well known and well respected trainers are today announcing  the formation of a new fund yesterday to invest in horses, to be purchased by and trained by the three of them. D. Wayne Lukas, Bob Baffert and Nick Zito plan to raise between $75 and $125 million by late August and to create a 100 horse stable within three years.

The three trainers have put up some of the most impressive numbers ever seen in racing. Among them, they have won 26 Triple Crown races since 1980, including Saturday's Belmont Stakes by the Nick Zito trained D'Tara, and have earned over $460 million in purse money. The three feel that this is the kind of money that is increasingly necessary in order to compete for the top of line horses with petrodollar billionaires from the Middle East and elsewhere who have increasingly sent prices skyrocketing.

While it will be interesting to see if these three can actually work together after so many years of competition, I would much rather be an investor in this fund than the fund that is being put together by the guys that own Big Brown. The fees are the same here - the managers (including the three trainers) are taking a standard management fee of 2% plus a 20% profits interest but your odds of making money are exponentially greater when the minds selecting horses and training them are three of the greatest trainers of their generation. Of course, the downside here is that the minimum investment is $3 million and your money is tied up for three years, but that is hardly different from a typical hedge fund. Should be fun to watch and if they successfully raise the money, the next Keeneland yearling sale should be very interesting.

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