With ARK Invest, Investors Can Access A Timely Opportunity To Invest In Private Innovation

The Importance Of Investing In Private Companies

A rising share of the global growth fuelled by innovation occurs apart from public markets, before companies reach the IPO stage. The significant advances in artificial intelligence, robotics, precision medicine, next generation cloud infrastructure, and reusable space technologies often are achieved by private companies. That shift increases the importance of accessing private markets. According to U.S. Federal Reserve data, the estimated value of US private companies now exceeds $10 trillion, underscoring the structural change in terms of when some of the most meaningful investment value is generated.³

Unfortunately, access to private markets historically has been limited to a relatively small, fortunate group of investors. In Europe, regulatory frameworks such as the Markets in Financial Instruments Directive II (MiFID II) restrict private asset access to institutional investors, primarily, creating a disconnect between the growing demand for private innovation exposure and the ability to access it through regulated investment structures.⁴

ARK Invest Offers A Way In

In 2022, ARK Investment Management LLC overcame that disconnect in the United States by launching its ARK Venture Fund (ARKVX), an evergreen crossover strategy that provides exposure to private innovators like SpaceX and OpenAI⁵ —two convention-breaking companies transforming aerospace and artificial intelligence, respectively.⁶ A US-specific investment vehicle,⁷ the ARK Venture Fund established the operational foundations for a similar European vehicle. Bolstered by its open research ecosystem and long-term engagement with founders, ARK Investment Management has secured direct access to some of the most important private companies, investing in breakthrough technologies at scale without relying on intermediated structures like Special Purpose Vehicles (SPVs) operated by third parties, whose significant premiums and fees diminish the returns possible through direct investment in private companies. Importantly, even retail investors—even those who do not meet the conventional requirements for professional investors are able to participate in the global growth fuelled by innovation happening apart from the public markets.

ARK’s differentiation stems from two of its core capabilities.

1. ARK focuses solely on disruptive innovation, using a research platform that integrates top-down technology modelling with bottom-up company analysis. The approach tracks the cost declines in five innovation platforms—artificial intelligence, robotics, multiomics, public blockchains, and energy storage—including their underlying technologies, their anticipated adoption patterns, and the convergences occurring across them. In doing so, ARK has the skillset to identify companies positioned to benefit from long-term innovation trends.
2. ARK’s open research model attracts founders, academics, and venture capitalists engaged in the relevant subject matter, cultivating relationships and creating a powerful feedback loop that supports deal sourcing and strengthen ARK’s ability to invest in companies directly. Specifically, through its regulatory structure and relationships, ARK invests directly onto the cap table of the private companies.

The graphic below⁸ illustrates some of ARK Venture’s many unique qualities.

What does all this mean for investors, especially those previously shunned from investing in private companies? They now have early and more direct access to private companies, with fewer layers of intermediation and fees, and with portfolio exposure that aligns more closely with how and when innovation-driven value is being created.

Why Invest In Private Innovation Now?

Many of today’s most influential technology companies reach significant scale, revenue maturity, and strategic importance whilst private. ARK’s private equity strategies focus on later-stage, high-growth companies with established products, institutional backing, revenue generation, and clear pathways to long-term value creation. And there’s never been a better time to do so.

Public equity benchmarks increasingly capture a shrinking share of innovation-led growth. By the time many companies reach public markets, a meaningful portion of their value creation has already occurred. That has widened the gap between where technological progress is monetised and where traditional listed market exposure begins.

The shift matters significantly for portfolio construction. Indeed, we believe investors seeking long-term growth drivers must look beyond public equities to maintain exposure to innovation at scale. Private innovation exposure can be a wise complement to public market allocations and better align portfolios with where disruptive growth is emerging.

The ARK Private Innovation ELTIF is designed for that purpose. It provides a regulated way to integrate late-stage private innovation into portfolios.

The ARK Private Innovation ELTIF now offers several potential advantages for investors:

• Direct Access To Late-Stage Private Innovation: The ARK Private Innovation ELTIF ensures exposure to private companies at a stage where their products, revenues, and business models are more established, enabling investors to engage with innovation-led value creation before companies enter the public markets.
• Portfolio Integration Beyond Listed Equities: By incorporating private companies alongside public innovation exposure, investors can compose their portfolios in ways that tap into the locus of long-term technological growth, complementing traditional public equity allocations.

For investors evaluating how to access private innovation exposure within a regulated framework, the ARK Private Innovation ELTIF offers a practical route to companies that have been difficult to access. As part of a broader portfolio discussion, investors should consider this allocation in the context of their long-term objectives and risk tolerance.

Investors interested in this opportunity should contact their investment adviser or platform for guidance on availability and suitability.