UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-23778
ARK Venture Fund
(Exact name of registrant as specified in charter)
c/o ARK Investment Management LLC
200 Central Avenue, Suite 220
St. Petersburg, FL 33701
(Address of principal executive offices) (Zip code)
Corporation Service Company
251 Little Falls Drive
Wilmington, DE 19808
(Name and address of agent for service)
Registrant’s telephone number, including area code: (727) 810-8160
Date of fiscal year end: July 31
Date of reporting period: January 31, 2023
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a) | The Report to Shareholders is attached herewith. |
SEMI-ANNUAL REPORT
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Chief Investment Officer and Chief Executive Officer
ARK Investment Management LLC
| ■ | | | Information Technology | | | | | 39.2% | | |
| ■ | | | Health Care | | | | | 17.6 | | |
| ■ | | | Communication Services | | | | | 15.9 | | |
| ■ | | | Consumer Discretionary | | | | | 8.9 | | |
| ■ | | | Money Market Fund | | | | | 6.8 | | |
| ■ | | | Industrials | | | | | 6.2 | | |
| ■ | | | Financials | | | | | 5.4 | | |
| | | | | | | | | 100.0 | | |
| | | Shares/ Principal/Units | | | Cost | | | Value | | |||||||||
COMMON STOCKS IN PUBLIC COMPANIES – 56.5% | | ||||||||||||||||||
AUTOMOBILES – 6.4% | | ||||||||||||||||||
Tesla, Inc.* | | | | | 4,752 | | | | | $ | 749,341 | | | | | $ | 823,142 | | |
BIOTECHNOLOGY – 7.6% | | ||||||||||||||||||
Beam Therapeutics, Inc.* | | | | | 2,890 | | | | | | 111,317 | | | | | | 125,571 | | |
CRISPR Therapeutics AG (Switzerland)* | | | | | 6,113 | | | | | | 284,085 | | | | | | 311,885 | | |
Exact Sciences Corp.* | | | | | 3,844 | | | | | | 162,283 | | | | | | 259,547 | | |
Prime Medicine, Inc.* | | | | | 15,679 | | | | | | 281,979 | | | | | | 275,637 | | |
| | | | | | | | | | | 839,664 | | | | | | 972,640 | | |
CAPITAL MARKETS – 5.5% | | ||||||||||||||||||
Coinbase Global, Inc., Class A* | | | | | 11,934 | | | | | | 554,582 | | | | | | 697,900 | | |
ENTERTAINMENT – 8.6% | | ||||||||||||||||||
ROBLOX Corp., Class A* | | | | | 14,472 | | | | | | 492,360 | | | | | | 538,503 | | |
Roku, Inc.* | | | | | 9,871 | | | | | | 529,972 | | | | | | 567,583 | | |
| | | | | | | | | | | 1,022,332 | | | | | | 1,106,086 | | |
HOTELS, RESTAURANTS & LEISURE – 2.6% | | ||||||||||||||||||
DraftKings, Inc., Class A* | | | | | 22,316 | | | | | | 322,357 | | | | | | 334,517 | | |
IT SERVICES – 10.4% | | ||||||||||||||||||
Block, Inc.* | | | | | 4,312 | | | | | | 268,501 | | | | | | 352,376 | | |
Shopify, Inc., Class A (Canada)* | | | | | 5,026 | | | | | | 160,933 | | | | | | 247,631 | | |
Twilio, Inc., Class A* | | | | | 12,289 | | | | | | 689,540 | | | | | | 735,374 | | |
| | | | | | | | | | | 1,118,974 | | | | | | 1,335,381 | | |
LIFE SCIENCES TOOLS & SERVICES – 2.2% | | ||||||||||||||||||
10X Genomics, Inc., Class A* | | | | | 6,069 | | | | | | 217,400 | | | | | | 284,211 | | |
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT – 2.8% | | ||||||||||||||||||
NVIDIA Corp. | | | | | 1,822 | | | | | | 240,600 | | | | | | 355,964 | | |
SOFTWARE – 10.4% | | ||||||||||||||||||
UiPath, Inc., Class A* | | | | | 21,362 | | | | | | 279,063 | | | | | | 328,120 | | |
Unity Software, Inc.* | | | | | 10,824 | | | | | | 360,237 | | | | | | 384,469 | | |
Zoom Video Communications, Inc., Class A* | | | | | 8,237 | | | | | | 649,608 | | | | | | 617,775 | | |
| | | | | | | | | | | 1,288,908 | | | | | | 1,330,364 | | |
TOTAL COMMON STOCKS IN PUBLIC COMPANIES | | | | | 6,354,158 | | | | | | 7,240,205 | | |
| | | Acquisition Date | | | Shares/ Principal/Units | | | Cost | | | Value | | ||||||||||||
COMMON STOCKS IN PRIVATE COMPANIES – 12.7% | | ||||||||||||||||||||||||
ENTERTAINMENT – 2.1% | | ||||||||||||||||||||||||
Discord, Inc.*(a)(b) | | | | | 11/14/22 | | | | | | 960 | | | | | $ | 360,000 | | | | | $ | 264,000 | | |
INTERNET – 5.4% | | ||||||||||||||||||||||||
X Holdings, Inc. (Twitter)*(a)(b) | | | | | 10/28/22 | | | | | | 1,000 | | | | | | 1,000,000 | | | | | | 689,299 | | |
SOFTWARE – 5.2% | | ||||||||||||||||||||||||
Epic Games, Inc.*(a)(b)(c) | | | | | 9/23/22 | | | | | | 874 | | | | | | 665,525 | | | | | | 665,528 | | |
TOTAL COMMON STOCKS IN PRIVATE COMPANIES | | | | | 2,025,525 | | | | | | 1,618,827 | | |
| | | Acquisition Date | | | Shares/ Principal/Units | | | Cost | | | Value | | ||||||||||||
PREFERRED STOCKS IN PRIVATE COMPANIES – 11.2% | | ||||||||||||||||||||||||
HEALTHCARE PRODUCTS – 8.1% | | ||||||||||||||||||||||||
Freenome, Inc.*(a)(b) | | | | | 9/23/22 | | | | | | 85,711 | | | | | $ | 999,990 | | | | | $ | 1,031,103 | | |
TRANSPORTATION – 3.1% | | ||||||||||||||||||||||||
Flexport, Inc.*(a)(b) | | | | | 9/23/22 | | | | | | 29,629 | | | | | | 404,992 | | | | | | 413,028 | | |
TOTAL PREFERRED STOCKS IN PRIVATE COMPANIES | | | | | 1,404,982 | | | | | | 1,444,131 | | | ||||||||||||
SIMPLE AGREEMENT TO PURCHASE EQUITY IN PRIVATE COMPANIES – 14.1% | | ||||||||||||||||||||||||
COMMERCIAL SERVICES – 3.1% | | ||||||||||||||||||||||||
Chipper Cash*(a)(b) | | | | | 9/23/22 | | | | | | 400,000 | | | | | | 400,000 | | | | | | 400,000 | | |
SOFTWARE – 11.0% | | ||||||||||||||||||||||||
MosaicML*(a)(b) | | | | | 9/23/22 | | | | | | 400,000 | | | | | | 400,000 | | | | | | 400,000 | | |
Replit, Inc.*(a)(b) | | | | | 1/23/23 | | | | | | 1,000,000 | | | | | | 1,000,000 | | | | | | 1,000,000 | | |
| | | | | | | | | | | | | | | | | 1,400,000 | | | | | | 1,400,000 | | |
TOTAL SIMPLE AGREEMENT TO PURCHASE EQUITY IN PRIVATE COMPANIES | | | | | 1,800,000 | | | | | | 1,800,000 | | |
| | | Shares/ Principal/Units | | | Cost | | | Value | | |||||||||
MONEY MARKET FUND – 6.9% | | ||||||||||||||||||
Dreyfus Government Cash Management, 4.23%(d) | | | | | 879,682 | | | | | | 879,682 | | | | | $ | 879,682 | | |
TOTAL INVESTMENTS – 101.4% | | | | | 12,464,347 | | | | | | 12,982,845 | | | ||||||
Liabilities in Excess of Other Assets – (1.4)% | | | | | | | | | | | | | | | | | (181,626) | | |
Net Assets – 100.0% | | | | $ | 12,801,219 | | |
Investment in Securities | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||||||||||||
Common Stocks in Public Companies* | | | | $ | 7,240,205 | | | | | $ | — | | | | | $ | — | | | | | $ | 7,240,205 | | |
Simple Agreement to Purchase Equity in Private Companies* | | | | | — | | | | | | — | | | | | | 1,800,000 | | | | | | 1,800,000 | | |
Common Stocks in Private Companies* | | | | | — | | | | | | — | | | | | | 1,618,827 | | | | | | 1,618,827 | | |
Preferred Stocks in Private Companies* | | | | | — | | | | | | — | | | | | | 1,444,131 | | | | | | 1,444,131 | | |
Money Market Fund | | | | | 879,682 | | | | | | — | | | | | | — | | | | | | 879,682 | | |
Total | | | | $ | 8,119,887 | | | | | $ | — | | | | | $ | 4,862,958 | | | | | $ | 12,982,845 | | |
| | | Common Stocks In Private Companies | | | Preferred Stocks In Private Companies | | | Simple Agreement To Purchase Equity In Private Companies | | | Total | | ||||||||||||
Balance as of September 1, 2022* | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Purchases | | | | | 2,025,525 | | | | | | 1,404,982 | | | | | | 1,800,000 | | | | | | 5,230,507 | | |
Sales | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Transfer into Level 3 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Transfer out of Level 3 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net Realized Gain (Loss) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net Change in Unrealized Appreciation (Depreciation) | | | | | (406,698) | | | | | | 39,149 | | | | | | — | | | | | | (367,549) | | |
Balance as of January 31, 2023 | | | | $ | 1,618,827 | | | | | $ | 1,444,131 | | | | | $ | 1,800,000 | | | | | $ | 4,862,958 | | |
Net Change in Unrealized Appreciation (Depreciation) on Level 3 securities still held as of January 31, 2023 | | | | | (406,698) | | | | | | 39,149 | | | | | | 1,800,000 | | | | | | (367,549) | | |
Asset Type | | | Fair Value as of January 31, 2023 | | | Valuation Approach | | | Significant Unobservable Inputs | | | Impact to value if Input Increases* | | | Range | | | Weighted Average | | |||
Simple Agreement to Purchase Equity in Private Companies | | | | $ | 1,800,000 | | | | Market Approach | | | Precedent Transactions | | | Increase | | | N/A | | | N/A | |
Common Stocks in Private Companies | | | | | 1,618,827 | | | | Market Approach | | | Precedent Transactions | | | Increase | | | N/A | | | N/A | |
| | | | | | | | | Market Approach | | | Revenue Discount | | | Decrease | | | 34% | | | 34% | |
| | | | | | | | | Market Approach | | | Enterprise Value/Adj EBITDA | | | Increase | | | 38.9 | | | 38.9 | |
| | | | | | | | | Market Approach | | | Calibration | | | Increase | | | 6.80% | | | 6.80% | |
Preferred Stocks in Private Companies | | | | | 1,444,131 | | | | Market Approach | | | Precedent Transactions | | | Increase | | | N/A | | | N/A | |
| | | | | | | | | Market Approach | | | Calibration | | | Increase | | | 3.2% – 3.3% | | | 3.23% | |
| ASSETS: | | | | | | | |
| Investments in non-affiliated securities at market value (Note 2) | | | | $ | 12,982,845 | | |
| Receivables: | | | | | | | |
| Capital shares sold | | | | | 82,405 | | |
| Dividends | | | | | 4,929 | | |
| Prepaid expenses | | | | | 7,427 | | |
| Total Assets | | | | | 13,077,606 | | |
| LIABILITIES: | | | | | | | |
| Payables: | | | | | | | |
| Management fees (Note 3) | | | | | 27,140 | | |
| Other accrued expenses | | | | | 249,247 | | |
| Total Liabilities | | | | | 276,387 | | |
| NET ASSETS | | | | $ | 12,801,219 | | |
| NET ASSETS CONSIST OF: | | | | | | | |
| Paid-in capital | | | | $ | 12,780,946 | | |
| Total distributable earnings | | | | | 20,273 | | |
| NET ASSETS | | | | $ | 12,801,219 | | |
| Shares outstanding, no par value (unlimited shares authorized) | | | | | 666,490 | | |
| Net asset value, per share | | | | $ | 19.21 | | |
| Investments in non-affiliated securities at cost | | | | $ | 12,464,347 | | |
| INVESTMENT INCOME: | | | | | | | |
| Unaffiliated dividend income | | | | $ | 27,501 | | |
| Total Income | | | | | 27,501 | | |
| EXPENSES: | | | | | | | |
| Professional fees | | | | | 129,102 | | |
| Custody and administration fees | | | | | 117,440 | | |
| Management fees (Note 3) | | | | | 90,030 | | |
| Consulting fees | | | | | 83,975 | | |
| Trustee fees | | | | | 34,095 | | |
| Other expenses | | | | | 71,084 | | |
| Total Expenses | | | | | 525,726 | | |
| Net Investment Loss | | | | | (498,225) | | |
| NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: | | | | | | | |
| Net Change in unrealized appreciation on: | | | | | | | |
| Investments in non-affiliated securities | | | | | 518,498 | | |
| Net realized and unrealized gain on investments | | | | | 518,498 | | |
| Net Increase in Net Assets Resulting From Operations | | | | $ | 20,273 | | |
| OPERATIONS: | | | | | | | |
| Net investment loss | | | | $ | (498,225) | | |
| Net change in unrealized appreciation on investments | | | | | 518,498 | | |
| Net increase in net assets resulting from operations | | | | | 20,273 | | |
| SHAREHOLDER TRANSACTIONS: | | | | | | | |
| Proceeds from Shares sold | | | | | 12,680,946 | | |
| Net increase in net assets resulting from shareholder transactions | | | | | 12,680,946 | | |
| Increase in net assets | | | | | 12,701,219 | | |
| NET ASSETS: | | | | | | | |
| Beginning of period | | | | | 100,000 | | |
| End of period | | | | $ | 12,801,219 | | |
| CHANGES IN SHARES OUTSTANDING: | | | | | | | |
| Shares outstanding, beginning of period | | | | | 5,000 | | |
| Shares sold | | | | | 661,490 | | |
| Shares outstanding, end of period | | | | | 666,490 | | |
| Cash flows used in operating activities: | | | | | | | |
| Net increase in net assets resulting from operations | | | | $ | 20,273 | | |
| Adjustments to reconcile net increase in net assets from operations to net cash provided by/(used in) operating activities: | | | | | | | |
| Payments for purchases of investments | | | | | (11,584,665) | | |
| Payments for net purchases of short-term investment securities | | | | | (879,682) | | |
| Net change in unrealized gain on: | | | | | | | |
| Investments in non-affiliated securities | | | | | (518,498) | | |
| (Increase) decrease in assets: | | | | | | | |
| Proceeds from shares sold | | | | | (82,405) | | |
| Dividends and Interest | | | | | (4,929) | | |
| Prepaid expenses | | | | | (7,427) | | |
| Increase (decrease) in liabilities: | | | | | | | |
| Management fees | | | | | 27,140 | | |
| Other accrued expenses | | | | | 249,247 | | |
| Net cash used in operating activities | | | | $ | (12,780,946) | | |
| Cash flows provided by financing activities: | | | | | | | |
| Proceeds from Shares sold | | | | $ | 12,680,946 | | |
| Net cash provided by financing activities | | | | $ | 12,680,946 | | |
| Net increase (decrease) in cash | | | | $ | (100,000) | | |
| Cash: | | | | | | | |
| Beginning of period | | | | $ | 100,000 | | |
| End of period | | | | $ | — | | |
| | | Period Ended January 31, 2023(1) (Unaudited) | | |||
Per Share Data: | | | | | | | |
Net asset value, beginning of period | | | | $ | 20.00 | | |
Net investment loss(2) | | | | | (0.99) | | |
Net realized and unrealized gain on investments | | | | | 0.20 | | |
Total loss from investment operations | | | | | (0.79) | | |
Net asset value, end of period | | | | $ | 19.21 | | |
Total Return at Net Asset Value(3) | | | | | (3.95)% | | |
Ratios/Supplemental Data: | | | | | | | |
Net assets, end of period (000’s omitted) | | | | $ | 12,801 | | |
Ratio to average net assets of: | | | | | | | |
Expenses | | | | | 12.04%(5) | | |
Net investment loss | | | | | (11.50)%(5) | | |
Portfolio turnover rate | | | | | —%(6) | | |
Fund | | | Cost | | | Gross Unrealized Appreciation | | | Gross Unrealized Depreciation | | | Net Unrealized Appreciation | | ||||||||||||
ARK Venture Fund | | | | $ | 12,464,347 | | | | | $ | 968,366 | | | | | $ | (449,868) | | | | | $ | 518,498 | | |
ARK Investment Management LLC
200 Central Avenue, Suite 220
St. Petersburg, FL 33701
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Foreside Fund Services, LLC
Three Canal Plaza, Suite 100
Portland, ME 04101
1500 J Street
Modesto, CA 95354
Ernst & Young LLP
One Manhattan West
New York, NY 10001
(b) | Not applicable. |
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) | Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1(a) of this form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a) | Not applicable. |
(b) | Not applicable. |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of trustees, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.
Item 11. Controls and Procedures.
(a) | As of a date within 90 days of the filing date of this Form N-CSR, the registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) | Not applicable. |
(a)(2) | Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
(a)(2)(1) | Not applicable. |
(a)(2)(2) | Not applicable. |
(b) | Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | ARK Venture Fund |
By (Signature and Title)* | /s/ Catherine D. Wood | |
Catherine D. Wood, Chief Executive Officer and Chief Investment Officer | ||
(principal executive officer) |
Date | March 31, 2023 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title)* | /s/ Catherine D. Wood | |
Catherine D. Wood, Chief Executive Officer and Chief Investment Officer | ||
(principal executive officer) |
Date | March 31, 2023 |
By (Signature and Title)* | /s/ William C. Cox | |
William C. Cox, Treasurer and Chief Financial Officer | ||
(principal financial officer) |
Date | March 31, 2023 |
* Print the name and title of each signing officer under his or her signature