LOUISVILLE, Ky. – Seth Klarman fancies himself a bit of a contrarian. It is a philosophy that has helped make him one of the most successful investors in America. It is a philosophy that has made him one of the most successful owners in Thoroughbred racing. When it comes to the Kentucky Derby, Klarman also has been somewhat of a contrarian. In Cloud Computing and Early Voting, Klarman and his trainer, Chad Brown, held out two horses who could have gotten into the Kentucky Derby field if there was a desire to run. Instead, those horses were pointed to and won the Preakness, the middle jewel of racing’s Triple Crown. For a Baltimore native like Klarman, the Preakness is a big deal. For a horse owner who has played at the highest level for decades, there are plenty of races Klarman is desirous of winning, including, obviously, the Derby. “For me, it would certainly be a nice milestone, but I’d also be delighted to win the Travers, delighted to win a Belmont. I’d be delighted to win another Preakness,” said Klarman. “I’m always delighted if we are competitive in Breeders’ Cup races. To me [the Derby] is exceptional, it’s special, but there are other races that are at least toward that echelon as well.” Saturday, Klarman, 68, will be represented in the Derby by Emerging Market, his fifth Kentucky Derby starter. Emerging Market, a son of Candy Ride, has won both of his starts. A horse has not won the Kentucky Derby entering the race with only two starts since Leonatus in 1883. Since 1937, seven horses with two or fewer starts – Bert G ran in 1945 with one start – have competed in the Derby, with T O Password, fifth in 2024, the best result. “When you say it hasn’t been done since the 1800s you might as well say it’s never been done,” Brown said. :: DRF Kentucky Derby Package: Save on Past Performances, Clocker Reports, Betting Strategies, and more. Klarman said the decisions to skip the Derby with Cloud Computing and Early Voting were not difficult. Cloud Computing had placed in the Grade 3 Gotham and Grade 2 Wood Memorial but didn’t win either one. Early Voting won the then Grade 3 Withers but lost the Wood Memorial by a neck. “It felt like they weren’t quite there, it felt like we would be throwing them to the wolves,” Klarman said. “They were competitive in the prep races, but they weren’t dominant in any of the prep races, so the idea that we might hold them back to win a different jewel of the Triple Crown made enormous sense to me.” Bringing Emerging Market to the Derby with just two starts was something Klarman was hesitant about at first. But after discussions with Brown, the reasons for running made sense. First, the horse showed talent and heart winning the Grade 2 Louisiana Derby at 1 3/16 miles, just a sixteenth of a mile shorter than the Derby. That came six weeks after a big-figure debut win Feb. 7 at Tampa Bay Downs. Klarman and Brown believe the six weeks to the Kentucky Derby gives Emerging Market plenty of time to return to his best race. Both Cloud Computing and Early Voting had six weeks between their Wood Memorial appearances and the Preakness. If Emerging Market had been held out for the Preakness, that would have been eight weeks between starts. “For a whole lot of reasons, if we’re ever going to try somebody lightly raced in the Derby this seemed like the horse,” Klarman said. “As Chad has said in interviews, he has felt this horse is special – not just talented, but special, almost uniquely talented.” Emerging Market was purchased for a reasonable $185,000 at the Keeneland September yearling sale. Brown said there were several things about the horse as a yearling that may have turned off buyers at the sale. Emerging Market was a cribber, a vice a horse has where it grabs something with its teeth, arches its neck, and makes a sucking-air sound. Second, Brown said Emerging Market was feminine-looking. Lastly, he had a flaxen mane that Brown called “unsightly.” That mane has since darkened to match the colt’s chestnut coat, Brown said. :: Get DRF Kentucky Oaks & Derby Clocker Reports by Mike Welsch and the DRF Clocker Team Brown credited bloodstock agent Mike Ryan for imploring him to take another look at Emerging Market as he walked in the back of the sales pavilion before entering the sales ring. “The best way I can describe it is he was walking like a cheetah,” Brown said. Brown said he bid on the horse, got him for $185,000, and headed to the airport. “He was the last one I bought at the sale,” Brown said. Emerging Market was one of the early arrivals in Brown’s barn last May and had nine workouts from May 13 to July 7 leading up to what was supposed to be a Saratoga debut. But Emerging Market suffered a cut in his stall, causing him to miss some training. Emerging Market was back on the work tab in late August, but by early fall he developed a case of pneumonia. Brown held Emerging Market in as high regard as he did Paladin, a horse who officially won twice at 2, including the Grade 2 Remsen, and then took the Risen Star in his 3-year-old debut. Paladin suffered a condylar fracture and is out for basically the rest of the year Emerging Market finally made it to the races Feb. 7 at Tampa, a card highlighted by the Sam F. Davis, won by Renegade, coincidentally a 2-year-old rival of Paladin. Emerging Market ran by the highly regarded debut runner Powershift, trained by Todd Pletcher. In the Louisiana Derby, Emerging Market was able to prevail over a game Pavlovian, who was leaning on Emerging Market in deep stretch. “If this horse stepped up and surprised me, that he’d be able to do that, I wouldn’t run him,” Brown said. “He’s no surprise to me.” :: Get DRF Kentucky Oaks & Derby Betting Strategies by Marcus Hersh and David Aragona. Full analysis and wager recommendations! As a billionaire investor and hedge fund manager, Klarman certainly has the means to buy horses at the high end of the market. He is a value investor by trade and he has taken the same approach to his racing stable. He likes to buy various types of runners, and not just focus on colts who could potentially be classic types. Typically, he buys horses between $150,000 to $350,000 at the sales. “The reason is largely it seems like you don’t do particularly better if you spend more than that in terms of winning percentage, in terms of graded stakes-winning percentage, so the ROI is better in that price range,” Klarman said. “If you go much higher, you’re going to have fewer horses, fewer shots on goal, and maybe with no better success.” Since joining forces with Brown almost 20 years ago, Klarman has campaigned 22 individual Grade 1 winners, including Bricks and Mortar, who was the 2019 Horse of the Year. Klaravich has made it to four Kentucky Derbies – three with Brown. In 2017, they finished fifth with Practical Joke, who was a talented miler. Now they’re here looking to make history with a lightly raced runner whose potential may have yet to be tapped. “I don’t go in with the confidence that we’re going to win, but based on Chad’s body language, based on the way the horse has spoken for himself, I think we have a really solid shot,” Klarman said. Hard to be contrarian about that. :: Want to learn more about handicapping and wagering? Check out DRF's Handicapping 101 and Wagering 101 pages.