Cathie Wood’s ARK Investment Management firm (ARKK) unveiled a new fund that allows any individual investor to invest in less-liquid assets. The ARK Venture Fund is open to anyone who can bear the minimum initial investment of $500 and a management fee of 2.75%. This makes it a one-of-its-kind venture capital fund that lets smaller individual investors access assets that could traditionally be accessed only by high-net-worth investors or institutions.
Individuals can invest in the ARK Venture Fund through the fintech startup Titan’s investing app. The fund will also be available for investment to registered investment advisers, family offices, wealthy individuals, and institutional investors through other platforms. Investors’ ability to withdraw from the fund, however, will be restricted.
The fund will aim to make its investments mostly in private companies in all stages of operations, constituting 70% of the fund portfolio. Additionally, some publicly traded companies, including high-growth technology firms, will also be a part of the basket.
Cathie Wood and her firm ARK gathered quite a bit of public interest at the height of the pandemic as its exchange-traded funds (ETFs) garnered remarkable returns on the back of more appetite among investors to take risks, encouraged by the government’s economic recovery initiatives.
However, this year has been difficult for the ETFs because high-interest rates and inflation have kept investors away from investing in unprofitable companies with a high growth runway. Although the firm’s ETFs are down this year, inflows have remained steady.