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Individual investors would get access to the VC market through the ARK Venture Fund for as little as $500.
On Monday, September 27, Cathie Wood’s asset management firm Ark Invest unveiled a new venture capital (VC) fund. This fund specifically targets small and individual markets giving them exposure to the VC market with a minimum investment of just $500.
Ark Invest Reveals a VC Fund
The Ark Venture Fund will be actively managed and comprise 70% of private firms and 30% of public companies that focus on technology-driven innovation. Investors can access this fund through the investing app Titan, a startup backed by VC giant Andreessen Horowitz.
The Ark Venture will charge investors a flat management fee of 2.75%. Also, there will be no additional charges for load fess or carried interests. As per Ark, the total expense ratio for the fund will be around 4.2%. Speaking to CNBC on this development, Cathie Wood said:
“We are doubling down on innovation. Ark is moving from social media and social marketing into social distribution, direct to consumer. Pretty exciting. We are offering investors something they’ve not been able to access before.”
Sailing through Tough Times
Ark’s flagship Innovation Fund (ARKK) gained a lot of appreciation last year as growth stocks were rallying hard. However, amid the tightening monetary conditions and rising interest rates, the ARKK Fund has come under severe pressure.
The ARKK fund is down 60% this year so far in 2022. It is also more than 70% down from its peak in November 2021 last year.
Amid this year’s market crash, Ark Invest has been making major structural changes to its portfolio. Earlier in July, Ark Invest sold more than 1.4 million shares of Coinbase (NASDAQ: COIN). The sale of the COIN stock was spread across three different exchange-traded funds – Ark Innovation (ARKK), Next Generation Internet (ARKW), and Fintech Innovation (ARKF).
Ark Invest was one of the biggest backers of Coinbase when it debuted on Wall Street last year. However, the sale of its COIN holdings came following an SEC investigation into Coinbase earlier this year. The COIN stock is already down by more than 75% since the beginning of this year 2022.
On the other hand, Ark Invest continues to remain bullish on its other big bet on Tesla Motors. Cathie Wood noted:
“What we said during COVID-19 about innovation solving problems will move into overdrive. Tesla poised to “deliver truly exponential growth for many, many years” as it expands its autonomous driving programs.”
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