Cathie Wood retains majority ownership of Ark Invest following bid for control by minority shareholder
- Cathie Wood, the founder of Ark Invest, has retained control of her asset-management company that focuses on investing in innovative and disruptive companies.
- Ark's distributor, Resolute Investment Managers, had sought to exercise an option it acquired in 2016 to purchase a controlling voting and equity interest in the company.
- Ark Invest said on Monday that it had repurchased the option from Resolute for an undisclosed amount and would continue to use Resolute to help distribute its exchange-traded funds and mutual funds.
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Cathie Wood will retain control of her asset-management company that has made waves in the investment industry over the past few years.
Ark Invest, which Wood founded in 2014, entered a monthlong battle for controlling interest in the firm after its distributor sought to take control of it via an option it acquired in July 2016.
Ark Invest offers exchange-traded funds, mutual funds, and other investment vehicles such as separately managed accounts that invest in companies enabling disruptive innovation in fields like artificial intelligence, genomics, and cryptocurrency.
After Ark's founding, there was little uptake in its investment products by professional investors, so it hired Resolute Investment Managers to help distribute its ETFs and mutual funds. As part of the distribution deal struck in 2016, Resolute acquired a minority stake in Ark Invest and an option that gave it the right to acquire a controlling stake in the company in early 2021.
With strong inflows into Ark Invest's products over the past couple of years - due in part to Ark's stellar performance and its track record of investing early in companies like Tesla - Resolute's option to acquire a majority stake in the company became more attractive.
Wood said in an interview with Bloomberg earlier this month that Ark Invest now manages $50 billion in assets.
"Our business is very profitable," Wood told Bloomberg.
Ark's flagship fund, the Ark Innovation ETF, alone generates annual revenue of $67 million based on its AUM as of September 30. The ETF had surged 166% year-to-date as of Thursday's close.
Ark Invest said on Monday that it reacquired the option from Resolute for an undisclosed sum. Wood will remain the firm's majority shareholder, and Ark Invest will retain Resolute's distribution services for its products in a long-term agreement. It did not disclose the length of the agreement.
