ARK Invest launches private fund for retail clients with a16z-backed Titan

ARK Invest, the innovation-focused investment firm run by star fund manager Cathie Wood, has rolled out a highly-anticipated new investment vehicle that gives retail investors access to venture capital.

The ARK Venture Fund was launched in partnership with Andreessen Horowitz-backed brokerage Titan and will be exclusively available to users of the online platform, ARK and Titan announced in a joint statement on Tuesday morning.

“By launching the ARK Venture Fund, we seek to disrupt venture capital, offering all investors access to what we believe are the most innovative companies throughout their private and public market life cycles,” Wood said in a statement.

The new investment vehicle will allow retail investors to allocate to companies pre-IPO with a minimum of $500 and is expected to collect an annual fee of 2.75%. The fund will waive Titan’s 1% per year advisory fees on deposits of at least $10,000 or the $5 per month fee for deposits of less than $10,000.

The endeavor comes during a downturn across Wood’s eight exchange-traded funds — particularly in the flagship ARK Innovation (ARKK) strategy, which has shed 60% year-to-date. ARK also recently shut down one of its ETFs and stepped down as portfolio manager for the firm’s two index funds.

"When you're a long-term innovation investor, turbulence is to be expected," Titan Co-Founder and Co-CEO Joe Percoco told Yahoo Finance. "If you're an investor, one needs to separate risk — the plane going down, versus buckle up, there's turbulence — and right now, we're seeing a period of exceptional turbulence. But ARK's job as an investor is to assess how much volatility they are comfortable with in pursuit of long-term innovation."

ARK has been able to keep investors on board and attract new inflows despite its free-fall from pandemic highs. In August, however, the popular ARKK ETF recorded $803 in redemptions, the biggest monthly outflow since last September, according Bloomberg data.

The new joint fund is set to mimic ARK's investments in the disruptive tech themes that her ETFs focus on — robotics, energy storage, genomic sequencing, artificial intelligence, and blockchain technology — but in private companies, allowing for longer hold times on investor assets during periods of market turbulence.

On Feb 3., ARK submitted a filing with the Securities and Exchange Commission (SEC) to roll out a new investment strategy that focuses on illiquid securities and limits investor exits in times of volatility. The application is for a closed-ended interval fund, a type of investment strategy that does not trade on an exchange and periodically offers to repurchase its shares from investors.

Titan Co-Founder Joe Percoco x Cathie Wood. (Source: Titan)
Titan Co-Founder Joe Percoco x Cathie Wood. (Source: Titan)

Titan recently expanded the brokerage’s offerings to allow its retail investor base to allocate to real estate and private credits amid a broader push to expand retail access to private markets, partnering with Apollo Global Management and the Carlyle Group on the products.

The firm told Yahoo Finance it was working on introducing other new asset classes and funds from a larger lineup of investment managers in the coming months.

Correction: This post has been updated to clarify the fees associated with the ARK Venture Fund.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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