Cathie Wood's Ark pitches mom-and-pop investors on exposure to Elon Musk's startupsNEWS | 17 December 2024In an email to subscribers, Ark Invest highlighted its exposure to Elon Musk's private companies.
Its venture fund includes stakes in SpaceX, X, and xAI, totaling nearly 15% of net assets.
Ark Invest hyped Musk's influence with Donald Trump, saying his companies could also benefit.
Cathie Wood's Ark Invest is banking on Elon Musk, the world's richest man whose closeness with President-elect Donald Trump has launched him to a new pinnacle of fame, to deliver new retail investors to its flock.
The fund recently sent an email to subscribers pitching investors on the money management fund's exposure to startups owned and run by Musk.
Ark Invest operates an itty-bitty, $70 million fund to invest in private tech companies and allows regular investors to buy and sell shares on a regular basis.
The fund has gathered stakes in some of the most valuable and hyped startups in tech, including OpenAI, Anthropic, and Stripe, though, in a recent interview, Ark Invest "futurist" and fund manager Brett Winton acknowledged that its modest check sizes limit the kind of returns investors can expect.
"We're excited to bring you a unique opportunity to gain exposure to some of Elon Musk's most sought-after private companies through the ARK Venture Fund," Ark said in an email sent on Tuesday. "These companies are typically inaccessible to everyday investors, making our fund one of the only and easiest ways to gain exposure to Musk's game-changing innovations."
Three of Musk's private companies — SpaceX, X (formerly known as Twitter), and xAI — accounted for nearly 15% of the fund's total assets as of October 31, according to Ark Invest. SpaceX was Ark Venture Fund's largest holding, with about 13% of assets, worth an estimated $8.7 million.
In the email, Ark emphasized Musk's clout with President-Elect Donald Trump as reason to believe his companies will benefit financially under the incoming administration.
"Musk's recent involvement in U.S. policy discussions under the Trump administration is paving the way for a stronger environment for innovation in the United States," it said. "This support could potentially fuel his companies' growth and amplify their ability to lead in key areas of technology and sustainability — putting ARK Venture Fund investors at the forefront of this transformative era."
This election cycle, Musk went from Trump megadonor to self-proclaimed "buddy in chief" to government efficiency boss. He's sat in on job interviews for Trump's Cabinet and calls with foreign dignitaries. In his new role, Musk has promised to slash excess regulation, which has dealmakers on both sides of the aisle ecstatic about all the potential mergers and acquisitions that might now go through.
In a recent interview, Winton illuminated the factors that drove Ark's investments in Musk's companies.
"Elon is an amazing entrepreneur, and the evidence is in the rocket that lands on the launch tower," Winton said. "One of the key determining characteristics to success is an unrelenting urgency even as you grow, and he clearly imbues his companies with that urgency. So, I think having an exposure across all of Elon Musk's enterprises is actually a reasonable exposure to take."
Winton noted that the venture fund also has stakes in companies that compete with some of Musk's ventures, including OpenAI, Anthropic, and Figure AI.
Read the email from Ark below:Author: Melia Russell. Source
