Cathie Wood's New Venture Fund Offers Access to Hard-to-Trade Assets for Just $500

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

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

The ARK Venture Fund has been in the cards since February, when an initial filing revealed plans for a closed-ended “interval” product that would take Wood’s flagship strategy into these less-liquid assets. Interval funds are structured to give investors less control over how and when they can pull out their money. Up to 5% of the net asset value of the venture fund can be redeemed by investors every quarter.

A key aspect of the fund will be its time horizons, according to Max Friedrich, a research analyst with ARK. Unlike many venture-capital funds, it won’t be forced to sell a position after an IPO.

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

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

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

Read more: Cathie Wood Targets Illiquid Assets in Fund That Curbs Exits

ARK will look to expand beyond Titan to offer the venture fund on advisor platforms, although there’s not yet a timeline for that, according to Will Summerlin, another ARK research analyst. He said the product will have a roughly 30% exposure to public markets, and 70% to private.

“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 especially liquid and can help as one of the ways for us to generate liquidity to pay out investors in case they want redeem on a quarterly basis,” said Friedrich.

(Updates throughout)