Cathie Wood is doubling down on her conviction in disruptive innovation — but this time, with a different approach.
The star fund manager who runs the popular Ark Invest family of exchange-traded funds will foray into private companies with a new investment strategy that focuses on illiquid securities and limits investor exits in times of volatility, a Feb. 3 filing by the firm with the U.S. Securities and Exchange Commission revealed.
A spokesperson for Ark Invest confirmed to Yahoo Finance that the investment management firm filed for the fund but declined to provide additional information while the application undergoes review by the SEC.
The move comes during a challenging time for Ark’s other funds, including its tech-heavy flagship Ark Innovation ETF (ARKK), which have been wrought by a broader sell-off in the technology sector as investors bracing for the Federal Reserve to end its easy money policies dial back on risk and dump high-growth assets in favor of value stocks.
According to the SEC document, Ark Investment Management applied 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. The Ark Venture Fund, what the new fund is dubbed, will conduct quarterly repurchase offers for between 5% and 25% of the fund’s outstanding shares of beneficial interest at net asset value, per the filing.
Wood’s new fund is set to mimic the company's investments in disruptive tech themes that her ETFs comprise but in private companies, allowing for longer hold times on investor assets during periods of market turbulence. Genomic revolution companies, automation transformation companies, energy transformation companies, artificial intelligence companies, next generation internet companies and fintech innovation companies — including those focused on crypto and blockchain — are among Ark Venture’s prospective investments, according to the firm’s SEC filing.
“In seeking to achieve its investment objective, the fund may invest, without limit, in privately placed or restricted securities, illiquid securities and securities in which no secondary market is readily available, including those of private companies,” Ark noted in the filing.
ARKK, the firm’s flagship ETF, has lost more than half its value from its peak as worries of a ramp-up on interest rate hikes by the Fed send growth stocks cratering. The fund ended last year down 27% after posting a return of 150% in 2020. Ark’s other funds are also down more than 20% this year.
Ark Innovation was mostly flat on Monday, down slightly by 0.62% to $72.30 share as of 12:11 p.m. ET. -0.45 (-0.62%)
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc