A new investment fund to be launched by Ark Invest, an asset management firm focused on disruptive innovation, will primarily hold publicly traded companies related to space exploration, including suborbital aerospace technologies such as drones and electric aircraft.
The ArkX fund, an actively managed exchange-traded fund (ETF), will invest more than 80 percent of its assets in companies “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the service of the earth,” according to a filing with the Securities and Exchanges Commission (SEC).
In addition to satellites, launch vehicles and related enabling technologies, the fund will focus on suborbital aerospace companies “including drones, air taxis and electric aviation vehicles,” the filing states. Ark analysts declined to comment on the new ArkX fund at this time.
Numerous space stocks jumped on Thursday after the fund was announced, despite no news yet of which companies will be initially included. Virgin Galactic Holdings (SPCE) surged more than 14 percent, and Maxar Technologies (MAXR) jumped over 20 percent. Nasdaq-listed EHang, which plans to introduce urban air mobility operations in China via its autonomous EH216 air taxi, jumped to almost $50 per share, about four times the company’s initial public offering price last December.
ArkQ, an ETF owned by the asset management firm that focuses on autonomous technology and robotics, recently increased its ownership of Experience Investment Corp — the blank-check firm that intends to merge with Blade Urban Air Mobility — to more than 66,000 shares, still less than 0.05 percent of the ETF’s total holdings by value.
Ark Invest and its chief executive/investment officer, Catherine Wood, have gained prominence over the past year as the firm’s flagship innovation fund returned more than 170 percent in gains, in part due to significant holdings of Tesla and other electric vehicle stocks. It is now the largest active ETF in the world, and Ark’s total assets under management top $40 billion at the time of this writing.
Centered on disruptive innovation, Ark’s investment strategy centers on exponential technologies with the potential to radically change the world, including artificial intelligence, DNA sequencing, robotics, 3D printing, and battery storage.
In 2018, Ark energy storage and electric vehicle analyst Sam Korus identified improving battery storage as the primary technology unlocking opportunities for affordable electric air taxis, with autonomy further improving the cost equation for services. While this thesis is nothing new to eVTOL developers and investors, Ark’s interest serves as validation — and potentially a source of great financial support — for the industry.
Lilium, previously reported to be searching for a special purpose acquisition company (SPAC) through which to access public markets, is rumored to be an acquisition target for Zanite Acquisition Corp., a SPAC run by aerospace executives Kenneth Ricci and Steven Rosen. With only $200 million in assets committed to the SPAC, however, Ricci and Rosen would likely need to secure a large private investment in public equity — or PIPE — in order to provide the funding Lilium needs to fuel its ambitious vehicle and ecosystem development projects.
As EV and battery stocks have surged on expectations of future vehicle market share, numerous eVTOL companies are considering either an IPO or SPAC to capitalize on sector-wide interest. With Ark expressing great interest in drones, electric aircraft and air taxi services, there is even more draw for eVTOL companies to consider going public.
The ArkX ETF will launch on March 29 of this year, according to Ark’s SEC filing.
