Any other business: The banker's horseplay: Richard Heley

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LAST month's Department of Trade and Industry report put the merchant banker Richard Heley in the firing line when it revealed his role in the disastrous purchase of Atlantic Computers by British & Commonwealth in 1988. B&C's advisory team at Barclays de Zoete Wedd, led by Heley, was sharply criticised.

But chances are that Heley will weather the storm. He has already survived six years of litigation over B&C's failed deal with Quadrex and has gone on to become head of corporate finance and now vice-chairman at Hill Samuel. There, as the man who kept the heavily indebted Brent Walker pubs and betting shops empire afloat, he has already amassed 'well over a seven-figure sum' in salary and bonuses.

In 1990, he started looking for interesting ways to invest it. One might expect a merchant banker to be in touch with a few up-and-coming entrepreneurs in some fast-growing field such as biotechnology or multimedia. But Heley's approach was rather more old-fashioned. The property slump had made country house prices look more attractive than they had for years. At the same time, keeping and training his two horses - Bernando and Harrison Himself - for dressage (the equine equivalent of figure skating) was costing him around pounds 16,000 a year.

So when a leading dressage trainer, Judy Cammaerts, left her employer, Heley decided to install her at a property of his own with a view to setting up a top-level competition and training yard. This would boost the capital value of his property and provide a dividend in the form of keep for his own mounts.

It was a difficult investment. There are more horses in Britain now - 750,000 - than at the height of the carriage era, and equine sports are growing fast. But so is the number of farmers scaling back production under the set-aside incentives and seeking other uses for their farm buildings. England is strewn with stabling and paddocks where the owners do not have to fully reflect the cost in the prices they charge when they run riding schools and livery stables. Start-ups find it hard to compete.

Heley realised that expertise and location were the way to create a top yard. He picked Greatfurze, a pounds 350,000 Victorian farmhouse in Buckinghamshire. 'We are just next door to Addington, where Britain's only international dressage event takes place,' he says.

Stabling for 10, all-weather schooling areas, secure tack room, 10 acres and the ability to rent 34 more, and two staff bedrooms in the main house accounted for about pounds 100,000 of the price. Meanwhile, demand for Ms Cammaerts' skills in training horse and rider at pounds 25 an hour, plus her income from judging competitions, meant that she could operate on a freelance basis, without Heley having to pay her a salary. She pays for hay, feed and other supplies for the establishment.

The two grooms and a student work like medieval apprentices for bed, board and pocket money of 'well, tens of pounds a week', says Heley, slightly embarrassed. 'Everyone knows there's no money in it.' Or not for the grooms, anyway.

Heley has all the figures at his fingertips as he sits by the Aga stove at Greatfurze, explaining his investment. 'People are prepared to pay between pounds 20,000 and pounds 100,000 for a really good dressage horse. But there is no tradition of breeding dressage horses here because there is no nationally controlled body, unlike in Germany. And dressage is the fastest-growing equine sport.'

Though we excel at three-day eventing, of which dressage is part - Britain won the world three-day event championship last week - interest has centred on the more robust pursuits of cross-country and, to a lesser extent, show-jumping.

Dressage is much less dangerous than going hell-for-leather across country and this helps explain its growth in popularity. Heley believes that if he can build Greatfurze into one of the best small dressage yards in the country, based on the skills of one of only 20 top-class trainers, he will be able to sell at a sizeable premium to the value of the property.

More speculatively, if one of his own horses turns out to be a winner, he stands to gain from the rise in its own value and from stud fees.

The biggest risk to his strategy is that his trainer will leave and that he will be unable to find a replacement - but then horses and gambling have always been stablemates.

Despite the stream of figures, it is clear this is not just a matter of cold-blooded investment. Bernando snorts outside the kitchen window as a groom hoses him down in the brilliant sunlight. We are only 10 miles from Milton Keynes, but the new townscape has been replaced by a timeless landscape of the horse, where every field looks like a painting by Stubbs, and gleaming chestnuts and bays flick flies from one another's noses in the shade of oaks. 'There is nothing like waking up and looking out and seeing your own horses running round the paddocks,' Heley says.

'You can't put a price on the fun factor,' the normally strait-laced banker remarks. And it is the fun factor rather than the potential premium that seems to be driving his latest decision to invest another pounds 130,000 on more stabling and groom accommodation.

The DTI may wish Heley and BZW had examined B&C's valuation of Atlantic Computers somewhat more rigorously. But it seems a fair bet that his own investment will turn out rather better than that one.

(Photograph omitted)

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