Ark Funds Launching New Fund That Could Invest In Private Companies

One of the biggest and most well-known ETF companies is launching a new closed-end fund that provides major differences from its existing ETFs.

What Happened: Ark Funds, the company founded by Cathie Wood, has filed to launch Ark Venture, a new interval fund.

Ark Venture can invest in privately placed and restricted securities, something the other Ark ETFs don't do.

“In seeking to achieve its investment objective, the Fund may invest, without limit, in privately placed or restricted securities, illiquid securities and securities in which no secondary market is readily available, including those of private companies.”

An interval fund conducts quarterly repurchase offers for between 5% and 25% of the outstanding shares at net asset value.

The company expects to repurchase the minimum of 5% of outstanding shares each quarter.

The fund will not be listed on a national securities exchange, a major difference from the existing Ark ETFs. Ark Venture will be an unlisted closed-end fund.

The Ark Venture fund comes with a minimum investment of $1,000. Additional investments can be made in any amount.

Investment Themes: In a similar fashion to existing Ark Funds like Ark Innovation ETF ARKK, Ark Next Generation Internet ETF ARKWArk Genomic Revolution ETF ARKG, Ark Space & Exploration ETF ARKX, and the Ark Fintech Innovation ETF ARKF, Ark Venture has a forward-looking, long-term horizon.

Major areas of interest for the fund will be genomics, automation and manufacturing, transportation, energy, artificial intelligence, shared technology, infrastructure and services and fintech.

The filing says the fund could invest in Bitcoin BTC through an investment like the Grayscale Bitcoin Trust GBTC or a private company that invests in Bitcoin.

Why It’s Important: Having a $1,000 minimum investment and trading off major exchanges could mean the fund is invested in by people who also have a forward-looking outlook and/or believe in the disruptive innovation push laid out by Wood.

The fund could hold companies like Tesla Inc TSLATeladoc Health TDOC, Zoom Video Communications ZM​​​​​​, and Coinbase Global Inc COIN that are large holdings in existing Ark ETFs.

The ability to invest in private companies could be appealing to investors, as Wood could invest in companies like SpaceX, Stripe, and others that fit the mold of disruptive technology but have not been publicly listed. A fund vehicle that offered investments in both Tesla and SpaceX could be incredibly attractive to investors and fans of Elon Musk. 

© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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