Under Armour Founder Kevin Plank and Shared Account  This story appears in the Dec. 5 Investment Guide issue of Forbes Magazine. Click here for the full Investment Guide 2012 special report.  Thoroughbreds remain a bad investment overall. But a new breed of owner is trying to minimize the risk and maximize the fun.  Kevin Plank, founder and CEO of Under Armour, the sports-apparel company with $1 billion-plus in annual revenues, ­doesn’t start something on a whim. The 39-year-old is all about winning. Right now he wants to win Thoroughbred racing’s Triple Crown.  So he started big four years ago, scooping up an icon of the sport’s glory days, 530-acre Sagamore Farm, outside of Baltimore. The farm was given to Alfred G. Vanderbilt II on his 21st birthday and produced such legends as Native Dancer, who is buried in the property’s graveyard, situated between the training track and training barn. Plank plowed money into the dilapidated spread, installing 14 miles of whitewashed oak-board fence lines and a three-quarter-mile training track made from state-of-the-art synthetic material, including recycled Under Armour shirts.  A rich man’s money pit? Not to hear Plank tell it. He expects his newfound passion to pay tangible dividends. “I have a big philosophy in business. Everything we do has to make money—not because it’s a greedy, capitalist thing. It’s because it’s about winning. It’s about success,’’ he says, adding that he’s not interested in having to explain to the Internal Revenue Service why his operation lost money “seven years in a row.” (It’s easier for a taxpayer to deduct horse losses if he makes a profit in at least two years out of seven.)  Four years into it Plank is surely still losing money. So far this year, in 51 races Sagamore starters have won $436,821, crossing the wire first ten times. Last year Sagamore starters earned $1,447,320 in 40 races. If he does make a profit, Plank will stand out from the horseflesh dabblers of yore.  The sport of kings, after all, is one of the answers to the classic joke about the best way to make a small fortune (start with a large one). For decades it’s been a fun, glamorous and largely fruitless investment for most, especially as lotteries and casinos have devastated the pari-mutuel business. Plank is one of a handful of young, wealthy investors who believe they can defy the odds through diversification—meaning owning lots of horses. Sagamore currently has 45, including 10 broodmares and 20 horses in training. VitaminWater founder Mike Repole owns 75 Thoroughbreds.
“You would be an idiot to get into a racing partnership strictly as an investment,” drawls Campbell. “It’s the kind of thing that could shoot the moon and have incredible returns, but you’d better not count on it. The pleasure aspect has got to be strong. It’s a speculative deal. It’s something that might make money. It’s got good tax benefits if it doesn’t, and third, and maybe most important … it’s a hell of a lot of fun.”