ARK Venture Fund

Verdict

• ALIGNMENT: Above Average

  • ARK charges a flat 2.75% management fee (no carried interest) and CEO Cathie Wood has $1 M+ of her own money in the fund, signaling real conviction. That skin-in-the-game plus a fee waiver that caps total expenses at 2.90% through 2025 helps bridge manager-investor interests.
  • Still, the base fee accrues daily regardless of performance, so ARK collects paychecks even during drawdowns. Investors should view the alignment as strong philosophically but only partial financially once the waiver expires.

• Performance: Average

  • Since launching in late 2022, ARKVX has compounded about 6% annually—respectable given a volatile tech backdrop but a step behind major equity indexes that topped 10%. Early gains sprang from private re-valuations of SpaceX, Epic Games, and OpenAI, balanced by markdowns in smaller holdings.
  • The fund’s hybrid public-private mix should blunt some IPO-market freezes, yet NAVs can spike or slump when big positions reprice. Expect lumpy, venture-style return patterns rather than smooth ETF-like growth.

• Market Risk: High

  • Portfolio is 85%+ innovation-themed tech companies—great in AI booms, brutal in rate shocks. Because holdings are mostly private, daily volatility looks low on paper, but true economic risk mirrors high-beta public comps once they list.
  • Public equities inside the fund provide liquidity but add correlation to growth indexes. If tech multiples compress or exits stall, NAV write-downs could compound quickly. Investors must stomach headline swings and multi-year lock-ups between liquidity windows.

• Business Risk: High

  • As an interval fund, ARKVX avoids forced selling during panics, letting managers ride out venture cycles while offering 5% quarterly redemptions. ARK’s brand, research bench, and co-investor network secure coveted deal flow.
  • Yet the fund’s AUM (~$156 M) is modest, so each large private stake has outsized influence on results. Rising success fees for placement agents and the cost of due-diligence teams add overhead pressure if growth in assets stalls.

• Debt Risk: Low

  • ARKVX itself employs zero fund-level leverage; private companies inside may carry debt, but late-stage VC rounds are equity-heavy, limiting interest-rate exposure.
  • That said, convertible notes and SAFE agreements could dilute returns if down-rounds spark repricing. Investors aren’t on the hook for fund-level margin calls, but they still face valuation hits if portfolio companies lever up ahead of tough capital markets.

• Liquidity Risk: Above Average

  • Redemptions occur only four times per year, capped at 5% of outstanding shares. If exit requests exceed the limit, payouts get prorated, forcing some investors to wait multiple quarters.
  • NAV marks lag real-time sentiment, so a wave of bad tech news could trigger a redemption queue precisely when private stakes are hardest to offload. HENRYs should treat the money as locked for several years and keep emergency funds elsewhere.

• Transparency: Below Average

  • ARK publishes daily NAVs, top-holding lists, and quarterly commentary that breaks down private vs. public weights—rare openness for a venture vehicle. Third-party auditors review valuations, and fee math is spelled out clearly in FAQs.
  • Still, private-company financials remain confidential, and fair-value marks arrive quarterly, not daily. Investors rely on ARK’s internal models between financing rounds, so public-market equivalents offer more immediate price discovery.

• Disclaimer

  All Rights Reserved. The data and analyses contained herein are the property of Noyack and are protected by copyright and other intellectual property laws. The information provided is intended solely for informational purposes and should not be construed as investment advice. It is not an offer to buy or sell a security, and it is not intended to be used as the sole basis for any investment decision. The information contained in this document is believed to be accurate and reliable based on sources believed to be reliable, but Noyack makes no representation or warranty, express or implied, as to its completeness, accuracy, or timeliness. The data and analyses are subject to change without notice and Noyack is not obligated to update this information. The use of the information contained in this document is at the sole risk of the reader, and Noyack shall not be responsible for any losses, damages, or expenses incurred by any person as a result of reliance on the information contained herein. Noyack does not endorse or approve any investment or trading strategy and does not guarantee any specific outcome or profit. The reader should always conduct their own independent analysis and consult with a qualified financial advisor before making any investment decisions. This document may contain forward-looking statements and projections which are subject to risks and uncertainties, and actual results may differ materially. Past performance is not indicative of future results. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Noyack reserves the right to modify or discontinue the provision of the information contained in this document, in whole or in part, at any time and without notice. The information contained in this document is provided “as is” and Noyack makes no representation or warranty of any kind, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of the information contained in this document. Noyack shall not be liable for any errors or omissions contained in this document or for any damages whatsoever arising out of or in connection with the use of this document.