Cathie Wood Targets Bitcoin Bull Tesla 20% of Returns
Not unexpectedly, Cathie Wood's Ark Investment Management has been taken over by a private equity group.
Anyone could see their three-digit returns, count the cash to their traded funds and see their rising success on Twitter. Except the Ark is much larger and rentable than it seems.
Wood, Ark's CEO, told Bloomberg's interview "Front Row" "We're up to 50 billion dollars." "We are very profitable for our business."
Ark handles retail and institutional accounts as well as non-U.S. funds, besides $30.5 billion of assets in its seven ETFs. The markets. The markets. The ETF alone produces at least 225 million dollars a year.
This puts Ark, founded in 2014, in a league with established companies like Gamco Investors Inc., Mario Gabelli and underlines the stakes with Resolut Investment Managers in Wood's fight. A month ago, Resolute and the private equity group behind her, Kelso & Co., appeared hollow to avoid acquiring a big interest in Ark. Now the controversy leads to a friendly settlement that puts Wood in charge.
"We are still in negotiations," she said. "We are still in negotiations. "We wanted our partner to be fair and square, and things are working out, I guess."
A Resolute representative refused to comment.
Wood has not stopped publishing any of the best figures in money management history because of the confusion. The ETF returned 152 percent to its $ 16.4 billion in Ark Innovation by 2020. More than doubled three other ETFs.
Read more: JPMorgan for Largest Active ETF Cathie Wood Takes Crown
The majority of ETFs watch index or market passively. Ark's are handled actively. Wood, 65, formed the company primarily to invest in creativity which was disruptive. She and her 25-man team examine patterns and gather stocks in five areas: artificial intelligence, robotic technology, energy storage, DNA sequencing, and technology blockchain.
Wood's cynicism as well as disdain for social media was prevalent in August 2018 when the Innovation ETF retained less than $2 billion of assets, implying that Tesla Inc. would have surpassed $4,000 over five years. In the meantime the stock has more than 10 times increased and has split between the five and 1 times. Whilst Tesla is still her top holding, the most important wager in the Innovation ETF is collectively a health oriented stock.
"Tesla is still running but I would have to say that from genomic space, the greatest upside surprises will come," Wood said in the interview. "This is because DNA convergence, artificial intelligence and gene therapy, especially the editing of crispr genes, will cure disease."
Player of Bitcoin
Wood was also a Bitcoin enthusiast, and he was able to make some early money returns. But Ark concluded that it was not suitable for ETFs, having discovered an adverse tax law. Bitcoin, which first hit $20,000, is 7% in certain separate Ark accounts this week. She remained "extremely bullish," he said.
When Wood was the Chief Investment Officer on global thematic initiatives at AllianceBernstein Holding LP, the concept for active ETFs focused on disruptive techniques emerged. In general, rather than mutual funds, they were lower cost and more tax-efficient.
When her pitch was rejected, Wood left for Ark. She remembers Peter Kraus as CEO, "very suspicious."
"We were quite the loss company and I felt it acute because for the first three years I funded most of it," Wood said. "We have built it. They haven't been here."
Wood wanted a partner to sell Ark's goods without any experience in ETFs and just $40 million in assets after 2 1/2 years. This is how Resolute came in. It purchased a minority stake in 2016, including a control purchase option.
'Virtual Round'
Ark found its foundation soon and Wood and its analysts developed a Twitter profile with the use of this profile to post updates, videos and podcasts, to request feedback and stress tests. It finds many of Ark's accomplishments to be the secret of social media.
"It gave us the competitive advantage of not allowing their portfolio managers or analysts to talk about their research by compliance departments in other organizations." "There is a virtuous cycle here and a viral network effect also occurs."
Wood has announced that its investments are more than doubling in the next five years and will return at least 20% every year. Wood is one of the few CEOs in finance to award her achievement. She also points out this as encouragement to her field's other women.
"No-one, for better or worse, can take me my track record," said Wood. "Is it a ticket for a greater success if you build one over a long period of time and succeed."
Cathie Wood is radically disrupting the way money is allocated. Fighting the rise of passive – what she calls the “greatest misallocation of resources in history” – Wood’s funds are actively managed exchange-traded funds that give investors exposure to public companies in key areas of innovation.