New Hedge Fund on the Block

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The days of families raising a surprise horse racing champion or a group of friends buying the horse of their dreams are almost gone. These days, only the big hitters in the racing industry are able to throw money around, and when a lone horse racing enthusiast wants to join in on the racing action it is easier to invest in a hedge fund where there is more than just one horse running. Unfortunately, hedge funds have received a lot of criticism over the years, but the new Thoroughbred Legends Racing Fund seems as if it might be a fund with a difference.

Hedge Funds are often in the line of fire as many believe that the horses become mere commodities and that their welfare and future after racing is neglected by the furious search of champions to please their investors. It also unsettles the horse racing community that anyone is able to invest in the fund and some of those investors might be people who do not invest for the sport or because of their care for horses, but simply for the money. Taking all the negativity in regard to hedge funds into consideration, the Thoroughbred Legends Racing Fund is hoping to improve the reputation of these funds.

Firstly, and most importantly, the Thoroughbred Legends Racing Fund is a joint venture of three of the horse racing world’s most respected trainers. Bob Baffert, D. Wayne Lukas and Nick Zito will still train the horses of their respective clients, but will also use their expertise and years of knowledge to try and raise a hedge fund of approximately $75 million to $125 million during the year. Their main aim is to develop thoroughbreds, which will see them purchasing horses that have not been raced, such as the yearlings, instead of the established champions that hedge funds tend to go for. Buying unraced horses allows the fund to purchase horses at a better price and will help them to establish their goal of having a hundred-horse stable within three years. Investors are therefore required to invest an estimated minimum amount of $3 million over the three year period, of which the fund receives a twenty percent performance/profit fee and a management fee of two percent.

Both Nick Zito and D. Wayne Lukas have been inducted into the National Museum of Racing and Hall of Fame for their contributions to the horse racing industry, and by joining forces with Bob Baffert, investors will have trainers looking after their interest who have won quite a few Triple Crown Races. These trainers have left their mark on seven Belmont Stakes races, one Breeders’ Cup, nine Kentucky Derbies and no less than ten Preakness Stakes races. It is hoped that the fund will not only generate profit for investors, but that more horses will have the opportunity to be trained professionally and in future be racing legends in their own right.