It is increasingly common for hedge funds to have an unusual or esoteric investment strategy. But in times of global uncertainty, they are certainly cementing their alternative image.

It is increasingly common for hedge funds to have an unusual or esoteric investment strategy. But in times of global uncertainty, they are certainly cementing their alternative image. Days after it emerged that hedge funds are buying into agricultural land to exploit rising food prices and commodity prices, in trots a company that could be the first to create a racehorse hedge fund.

International Equine Acquisitions Holdings, a New York-based corporation and a majority owner of Big Brown, the early favourite to win the 134th Kentucky Derby, is turning itself into a hedge fund, according to reports.

It is currently raising USD100m to buy, sell and breed horses, and will operate like a hedge fund, collecting management and performance fees. The founders want to take the company public before the end of the year. Under its new hedge fund-like structure, investors will each own a part of all of the firm's assets. An independent auditor will value the fund each quarter, and it will offer investors quarterly liquidity.

Racehorses are a valuable enough commodity, but are they worth building a hedge fund around? Maybe. More than USD15.4 billion was bet on horses in North America last year, more than USD1.1bn was distributed in purses, and more than USD1.2bn was spent purchasing thoroughbreds, according to the Jockey Club, the American stud registry.

In theory, this could translate into a good opportunity for punters. And what better punters than hedge funds to become involved?