ARK Invest, a leading investment firm run by star fund manager Cathie Wood, has rolled out a new investment vehicle focused on private markets for retail clients.
The ARK Venture Fund was launched in partnership with Andreessen Horowitz-backed brokerage Titan and will only be available to users of the online platform, according to a joint statement by ARK and Titan on Tuesday morning.
The new fund, which Wood teased last month, comes after the manager submitted a filing with the Securities and Exchange Commission SEC Feb. 3 to roll out a new investment strategy that focuses on illiquid securities and limits investor exits in times of volatility.
The effort comes during a downturn in Wood's eight exchange-traded funds, particularly in the flagship ARK Innovation ARKK strategy, which has shed 60% year-to-date. ARK recently shut down one of its ETFs and stepped down as portfolio manager for the firm's two index funds.
Despite its free fall from the Pandemic highs, ARK has been able to keep investors on board and draw new inflows. In August, the popular ARKK ETF recorded $803 in redemptions, the biggest monthly outflow since September, according to Bloomberg data.
By founding the ARK Venture Fund, we seek to disrupt venture capital, giving all investors access to the most innovative companies throughout their private and public market life cycles, according to Wood.
Retail investors can allocate minimum of $500 to companies pre-IPO.
In the original SEC document, ARK Invest applied for a closed-ended interval fund, a type of investment strategy that does not trade on an exchange and periodically offers to repurchase its shares from investors.
The joint fund is set to mimic ARK's investments in the disruptive tech themes that her ETFs focus on robotics, energy storage, genomics, artificial intelligence, and blockchain technology, but in private companies, allowing for longer hold on investor assets during times of market turbulence.
Titan co-founder and Co-CEO Joe Percoco told Yahoo Finance that turbulence is something that is to be expected when you're a long-term innovation investor. If you're an investor, you need to separate the risk — the plane going down, versus buckle up, there's turbulence, and right now we're seeing a period of exceptional turbulence. Percoco said that the role of an investor is to assess how much volatility they are comfortable with in pursuit of long-term innovation.
Titan recently expanded its brokerage's offerings to allow retail investors to allocate real estate and private credits in a bid to expand retail access to private markets, partnering with Apollo Global Management and the Carlyle Group on the products.
The firm told Yahoo Finance that it was working on introducing other new asset classes and funds from a larger lineup of investment managers in the coming months.
The ARK Venture Fund is expected to collect an annual fee of 2.75%, on top of Titan's 1% per year advisory fee on deposits of $10,000 or more on the platform, or $5 per month for deposits less than $10,000.