Cathie Wood’s New Venture Fund Gives Access to Well-Traded Assets for $500

(Bloomberg) — Cathie Wood’s ARK Investment Management launched a new fund that will give almost any investor easy access to harder-to-trade assets — although there’s a limit to how quickly they can cash out.

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The firm announced Tuesday that its long-awaited ARK Venture Fund is now available to all US investors through an investment app called Titan. The fund, which has a minimum investment of $500, will target mostly private companies focused on technology-driven innovation, as well as some public firms and other venture capital funds.

The ARK Venture Fund has been on the cards since February, when an initial filing revealed plans for a closed-end “interim” product that would put Wood’s core strategy into the less liquid assets. Interim funds are structured to give investors less control over how and when they can withdraw their money. Investors may redeem up to 5% of the net asset value of the venture fund each quarter.

A key feature of the fund will be the timeframes, according to Max Friedrich, a research analyst with ARK. Unlike many venture capital funds, it will not be forced to sell a position after an IPO.

“We can hold on to our private companies when they go public, and we can take advantage of value creation throughout the life of a private company,” he said in an interview. “With the early feedback we’re getting from private companies, we hear that’s a very strong value proposition to be a true long-term partner.”

ARK is excited to be moving into “social distribution” through Titan, he said. The minimum investment of $500 means that any individual US investor can invest “without meeting qualification or accreditation thresholds,” according to a press release.

The actively managed vehicle charges a management fee of 2.75%, with an estimated total expense ratio of 4.22%.

Read more: Cathie Wood Focuses on Illiquid Assets in the Limiting Out Fund

ARK will look to expand beyond Titan to offer the venture fund on adviser platforms, although there is no timeline yet, according to Will Summerlin, another ARK research analyst. He said the product will have an exposure of about 30% on public markets, and 70% privately.

“Some of the portfolio companies on the public side will be names that you would also find in other ARK public equity strategies, but are particularly liquid and can help as one of the ways we can generate liquidity to pay investors for fear that. redemption on a quarterly basis,” Friedrich said.

(Updates throughout)

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