ARK Branches Into Private Equity

ARK Invest Management is seeking to start a closed-end private equity fund to invest in companies not yet public or offering illiquid securities.

In filings to the SEC Thursday, the outfit led by Cathie Wood aims to invest in U.S. and international companies deemed to fit the disruptive innovation thesis and themes that underpin the flagship ARK Innovation ETF (ARKK). The ARK Venture Fund is primarily targeting private placement investments and other securities without a liquid secondary market, but also reserves the right to include publicly traded stock, and allocate up to 33% of the fund’s assets in leveraged instruments.

The fund also has a mechanism for locking up investor assets over a longer period of time by limiting 5-25% of its shares outstanding for repurchase every quarter.

It is not clear when the fund would become effective with the SEC, or when it could begin accepting investments. The filing also doesn’t list an annual management fee.

Interest in ARK soared in 2020 after ARKK trounced the pronounced growth of the S&P 500 and the Invesco QQQ Trust (QQQ), but that ETF and its sister funds struggled in the tail end of 2021 and into the start of 2022 as the Fed signaled its intent to hike interest rates.

While ARKK has gained a net $61 million worth of inflows this year thanks to investors with high confidence in the theme, its other funds have lost a combined $710 million.

Contact Dan Mika at [email protected], and follow him on Twitter