June 10 (Bloomberg) -- Nick Zito, Bob Baffert and D. Wayne Lukas, thoroughbred trainers who have won a combined 26 Triple Crown races, will help manage a venture capital fund that plans to raise $75 million to buy racehorses.

Baffert, Lukas and Zito will select the horses in auctions, train them and form part of the management team, said Olin Gentry, a co-founder of the fund who helped bring the trainers together. The fund, known as Thoroughbred Legends Racing Stable, plans to buy as many as 100 horses a year over the next three years, Gentry said in a telephone interview from his office in Lexington, Kentucky.

``When we've got a bankroll behind us, we're dangerous,'' Baffert, 55, said in a telephone interview from Santa Anita Park in Arcadia, California. Baffert won back-to-back Kentucky Derbies in 1997 and 1998 with horses he purchased for clients for a combined $97,000. Picking horses ``is a gift that we have,'' he said.

Thoroughbred Legends joins International Equine Acquisitions Holdings Inc., the group that owns a majority stake in Kentucky Derby and Preakness winner Big Brown, in pitching horseracing funds to investors as money-making ventures. Traditional horseracing partnerships such as Aiken, South Carolina-based Dogwood Stable Inc. downplay the chance to make money, luring in clients instead by playing up the excitement of the sport.

``It's a risky business,'' said Gentry, a 41-year-old Kentucky native who has been involved in the thoroughbred industry for more than two decades. ``We're trying to put ourselves in the best possible position to make money.''

Garden City, New York-based IEAH is trying to set up a $100 million racehorse hedge fund. Michael Iavarone, co-president at IEAH, hadn't disclosed that he had been fined, censured and suspended by securities regulators for unauthorized trades in 1999.

Won't Be Hindered

Gentry said he isn't worried that the Iavarone controversy will hinder Thoroughbred Legends' efforts to raise capital.

``We don't view ourselves as competitors,'' Gentry said.

Unlike IEAH, which buys many of its horses, including Big Brown, after they've started their racing career, Thoroughbred Legends will focus on purchasing one-year-old and two-year-old horses at auction that haven't competed.

``We're going to buy the Big Browns before they become the Big Browns,'' Baffert said. ``We don't want to pay the premium'' on established racehorses, he said.

The fund will collect a 2 percent management fee and keep 20 percent of profits, Gentry said.

The Wall Street Journal reported yesterday that investors will have to commit a minimum of $3 million over three years. Gentry declined to comment on those investment figures.

Belmont Winner

Zito two years ago picked out Da' Tara, the three-year-old colt that won the Belmont Stakes on June 7, ruining Big Brown's bid to become the first Triple Crown winner in 30 years. Zito, who also trains Da' Tara, said in a telephone interview from his barn at Belmont Park in Elmont, New York, that he and the other two trainers will retain their clients.

Gentry said he hatched the idea for Thoroughbred Legends over the past year with co-founders Thomas Gaines and Tripp Hardy. Gentry and Gaines run Gaines-Gentry Thoroughbreds LLC, a breeding operation based in Lexington. Hardy has invested in mares and stallions with Gaines-Gentry.

Management Group

The co-founders and the trainers will form the management group of the fund. Gentry said he approached the three trainers with the proposal several months ago.

``It's different than anything I've seen -- three titans joining forces,'' Gentry said.

Lukas, 72, and Zito, 60, were both inducted into the National Museum of Racing and Hall of Fame in the past decade. The three trainers combined won 15 of 18 Triple Crown races over a six-year period in the 1990s.

Business has slowed for Lukas and Baffert in recent years after many of their top clients died. Other clients took their horses away from them. Neither Lukas nor Baffert has won a Triple Crown race in the past six years.

``I lost a lot of my clients; so did Wayne,'' Baffert said. ``They died.''

To contact the reporter on this story: David Papadopoulos at papadopoulos@bloomberg.net

Last Updated: June 10, 2008 00:03 EDT