A kinder, gentler Horse Hedge Fund?

[alphanumeric1]

From the Wall Street Journal:
They're Off: Trainers to Start Horse Fund
By Jon Weinbach

Three of thoroughbred racing's most-successful trainers are teaming up for a venture that will buy, train and sell horses for investors in a move that underscores the rising costs of the sport and comes on the heels of Triple Crown buzz.

The Thoroughbred Legends Racing Fund, which is to be announced Monday, aims to raise $75 million to $125 million by late August and create a 100-horse stable within three years. The horses will be selected and trained by D. Wayne Lukas, Bob Baffert and Nick Zito, ...

[freddymo]

Originally Posted by alphanumeric1

From the Wall Street Journal:
They're Off: Trainers to Start Horse Fund
By Jon Weinbach

Three of thoroughbred racing's most-successful trainers are teaming up for a venture that will buy, train and sell horses for investors in a move that underscores the rising costs of the sport and comes on the heels of Triple Crown buzz.

The Thoroughbred Legends Racing Fund, which is to be announced Monday, aims to raise $75 million to $125 million by late August and create a 100-horse stable within three years. The horses will be selected and trained by D. Wayne Lukas, Bob Baffert and Nick Zito, ...

Poor Zito what in the world has he gotten himself into...Isn't legends another way of saying has beens which Zito clearly is NOT..

[blackthroatedwind]

You're way wrong on this one Freddy.

[jms62]

Originally Posted by blackthroatedwind

You're way wrong on this one Freddy.

That can be taken 2 ways..

1. Zito is a has been.

2. Baffert and Lukas are NOT....


I would say it is #2 because Zito is clearly NOT a has been and once again he beats me out of a Super in the 3rd/4th slots with Anak Nakal....

[freddymo]

Originally Posted by blackthroatedwind

You're way wrong on this one Freddy.

Perhaps...I really don't get how these funds will help do anything but create my Tom Foolery and scandal. How in the world are three horseman running private operations going to be able to determine when they are buying and or selling a horse for or against themselves.. Not that any of these people are bad or will want to hurt anyone as i am sure the intentions are the very best.. I have my concerns:Lapenta likes a colt because Zito says so, Earnhardt likes the same colt because baffert says so and Lukas on behalf of the fund likes him as well... Houston we have a potential problem...I used the names I know they aren't meant to be anything other then a reference point and are mentioned without any malice.

[freddymo]

Originally Posted by jms62

That can be taken 2 ways..

1. Zito is a has been.

2. Baffert and Lukas are NOT....


I would say it is #2 because Zito is clearly NOT a has been and once again he beats me out of a Super in the 3rd/4th slots with Anak Nakal....

neither BTW thinks its a good idea to start the fund he knows I don't think any of these HOF trainers are superior horseman

[GBBob]

or, this could be set up so it's an incredible financial opportunity for Zito. I may be way off base, but it seems that he will be the key man in that group and may be compensated accordingly.

[blackthroatedwind]

Originally Posted by freddymo

Perhaps...I really don't get how these funds will help do anything but create my Tom Foolery and scandal. How in the world are three horseman running private operations going to be able to determine when they are buying and or selling a horse for or against themselves.. Not that any of these people are bad or will want to hurt anyone as i am sure the intentions are the very best.. I have my concerns:Lapenta likes a colt because Zito says so, Earnhardt likes the same colt because baffert says so and Lukas on behalf of the fund likes him as well... Houston we have a potential problem...I used the names I know they aren't meant to be anything other then a reference point and are mentioned without any malice.

Have you read the article or do you know anything about this fund?

[blackthroatedwind]

Originally Posted by freddymo

neither BTW thinks its a good idea to start the fund he knows I don't think any of these HOF trainers are superior horseman

Can you translate this?

[freddymo]

Originally Posted by GBBob

or, this could be set up so it's an incredible financial opportunity for Zito. I may be way off base, but it seems that he will be the key man in that group and may be compensated accordingly.

I am a Zito guy.. And one can make the argument that trainers have to juggle the common interests of several owners all the time.. The difference to me is agenda.. With 100mil the agenda is not going to be racing in anything but Graded stakes(save the preps etc.)..saving 100mil can be intoxicating for someone to have. Ask IEAH and there 5 mil they paid for Court Fees

[ELA]

Already, absent of all facts, everyone has the fund pegged with all of the problems, conflicts of interest, and so on. Just look at the mindset around here. Come on.

This doesn't have to be "anything" that people say it is. Any trainer doesn't have to be "anything" just because someone said so -- has been, not, etc.

Eric

[freddymo]

Originally Posted by blackthroatedwind

Have you read the article or do you know anything about this fund?

Yes looking to get the red herring to comb thru it thoroughly.. I am troubled that horses are entering Wall St. The world were horses trade, and race is not regulated and that is the part that scares me. This could be the beginning of the end.

[freddymo]

Originally Posted by ELA

Already, absent of all facts, everyone has the fund pegged with all of the problems, conflicts of interest, and so on. Just look at the mindset around here. Come on.

This doesn't have to be "anything" that people say it is. Any trainer doesn't have to be "anything" just because someone said so -- has been, not, etc.

Eric

Just me not everyone... It's sort of like making a theme park with dinosaurs no matter how many things you think of in advance something is bound to go very wrong. It's a round peg trying to go in a square hole.. I am guessing professional folks are trying to bring honor to the sham of IEAH and still earn a fair buck. The people and effort aren't the issue it's the execution that will be the down fall.

[-BT-]

Lukas huh?
I have seen him with 1 maybe 2 stakes/handicap caliber horses over the last 12-18th months.... granted the man is a HOF i think he might be slipping a little. His big buyer Van Meter has been pumping a lot of money into his horses and i don't see many results/return for the money.
It will be interested to see if this venture works, but i don't why all the sudden people are trying to form some sort of "hedge fund" partnership for horse racing


and i think for the record IEAH shorted big brown

-bt-

[freddymo]

Originally Posted by -BT-

Lukas huh?
I have seen him with 1 maybe 2 stakes/handicap caliber horses over the last 12-18th months.... granted the man is a HOF i think he might be slipping a little. His big buyer Van Meter has been pumping a lot of money into his horses and i don't see many results/return for the money.
It will be interested to see if this venture works, but i don't why all the sudden people are trying to form some sort of "hedge fund" partnership for horse racing


and i think for the record IEAH shorted big brown

-bt-

10 to 20 mil reasons why without any success needed

[-BT-]

Originally Posted by freddymo

10 to 20 mil reasons why without any success needed

just b/c a partnership has the term hedge fund in it doesn't automatically make it a money maker. They're gonna have to take the good with the bad and eat some horses they can't pinhhook or sell outright. I wonder hows all the major owners for these trainers feel about this?

-bt-

[Scav]

Originally Posted by -BT-

Lukas huh?
I have seen him with 1 maybe 2 stakes/handicap caliber horses over the last 12-18th months.... granted the man is a HOF i think he might be slipping a little. His big buyer Van Meter has been pumping a lot of money into his horses and i don't see many results/return for the money.
It will be interested to see if this venture works, but i don't why all the sudden people are trying to form some sort of "hedge fund" partnership for horse racing


and i think for the record IEAH shorted big brown

-bt-

It is becuase it is a hot word, that is all. The word Hedge Fund elludes things like success/power/largeness, but all it really is, is a high level partnership

[Cannon Shell]

I think that it is hard to believe that people with the kind of money needed to invest in something like this would actually do so. First of all it cant possibly show a profit because there simply isnt enough money available to win. Stud fees are in decline (which they need to be) and therefore the pot of gold at the end of the rainbow is going to be smaller. Before you think about saying Big Brown, remember that the deal made his 'value' worth $50 million, the actual amount of cash that they got was far less than that. As a matter of fact his loss as well as some of the recent big money, early retirement studs not performing at high levels makes me think that the price of stallions outside of the ones Darley wants is going down.

The other factor that will be hard to understand is the ego factor. Not of the trainers but of the owners. If you put up $5 million bucks with an individual trainer the owner will not only be the main client for the trainer, he will get a lot of leeway and certainly some say in what goes on. With a fund like this although these guys will surely do everything possible to keep them happy, you are just another investor.

The key element to me of the whole IEAH deal was they were investing money in an equine hospital accross the street from Belmont. That can be a revenue generator right from the start and is a solid asset. If these guys start buying yearlings this year they cant possibly hope to make any signifigant money until 2011. Insurance, training bills, etc are going to be substanial especially when you consider that they will be acquiring stock in 2009 and 2010 that will be adding to expenses and not generating any revenue. Unless they come up with the next big thing, they will be really in deep.

The other factor is how do the state commissions deal with this? What if Lukas has a horse in the Derby for a seperate owner and Zito has a hedge fund horse. Isnt Lukas a part owner in Zito's horse because he is involved with the fund? What if the fund horse is undefeated and sheikh Mo said he will give them 100 million if he wins the derby? What a position that puts Lukas in, especially if he has the 2nd choice who happens to be a gelding.

Personally I think one of the negatives of this game is people coming into the sport expecting to make money. Sure everybody says that it is so hard but many of these guys have been very successful in business and believe that they are smarter than everybody else. If a fund like this fails, which I think it will, I just worry that the negative backlash will make it even harder to attract new investors especially in troubling economic times.

[asudevil]

Originally Posted by Cannon Shell

I think that it is hard to believe that people with the kind of money needed to invest in something like this would actually do so. First of all it cant possibly show a profit because there simply isnt enough money available to win. Stud fees are in decline (which they need to be) and therefore the pot of gold at the end of the rainbow is going to be smaller. Before you think about saying Big Brown, remember that the deal made his 'value' worth $50 million, the actual amount of cash that they got was far less than that. As a matter of fact his loss as well as some of the recent big money, early retirement studs not performing at high levels makes me think that the price of stallions outside of the ones Darley wants is going down.

The other factor that will be hard to understand is the ego factor. Not of the trainers but of the owners. If you put up $5 million bucks with an individual trainer the owner will not only be the main client for the trainer, he will get a lot of leeway and certainly some say in what goes on. With a fund like this although these guys will surely do everything possible to keep them happy, you are just another investor.

The key element to me of the whole IEAH deal was they were investing money in an equine hospital accross the street from Belmont. That can be a revenue generator right from the start and is a solid asset. If these guys start buying yearlings this year they cant possibly hope to make any signifigant money until 2011. Insurance, training bills, etc are going to be substanial especially when you consider that they will be acquiring stock in 2009 and 2010 that will be adding to expenses and not generating any revenue. Unless they come up with the next big thing, they will be really in deep.

The other factor is how do the state commissions deal with this? What if Lukas has a horse in the Derby for a seperate owner and Zito has a hedge fund horse. Isnt Lukas a part owner in Zito's horse because he is involved with the fund? What if the fund horse is undefeated and sheikh Mo said he will give them 100 million if he wins the derby? What a position that puts Lukas in, especially if he has the 2nd choice who happens to be a gelding.

Personally I think one of the negatives of this game is people coming into the sport expecting to make money. Sure everybody says that it is so hard but many of these guys have been very successful in business and believe that they are smarter than everybody else. If a fund like this fails, which I think it will, I just worry that the negative backlash will make it even harder to attract new investors especially in troubling economic times.

Perfectly stated.....couldn't agree more on every point!

[hoovesupsideyourhead]

[quote=freddymo]horseman running private operations going to be able to determine when they are buying and or selling a horse for or against themselves..see bobby frankle and his boy reid.. whats the difference.. these three are at least the best you could have imo