Cathie Wood Buys Back Option That Had Threatened Control of Ark

Claire Ballentine

30 Dec 2020, 05:37 AM IST

(Bloomberg) -- The fight for control of Ark Investment Management is over after Chief Executive Officer Cathie Wood purchased the option that threatened her control.

Wood entered into an agreement with Resolute Investment Managers that allows her to remain as Ark’s majority shareholder, according to statement Monday. Ark, which has $43.6 billion in assets under management, will retain Resolute’s distribution services for its products.

Cathie Wood Buys Back Option That Had Threatened Control of Ark

Wood repurchased the option for an undisclosed sum. The transaction was financed through a “multi-tranche term loan financing facility provided by Eldridge Corporate Funding LLC,” according to the statement.

Last month, Resolute moved to exercise its option, acquired in July 2016, to purchase a controlling voting and equity interest in Ark. Resolute’s actions came only three days after Ark said it would explore the potential replacement of Resolute Investment Distributors Inc. -- an affiliate of Resolute Investment Managers -- to distribute its products. Wood said at the time that she was “disappointed” in Resolute’s move.

“Cathie Wood and her team have done an exemplary job building ARK Invest from the ground up, and we look forward to supporting the firm’s momentum for years to come,” Gene Needles, Resolute’s chief executive officer, said in a statement. “We’re pleased to continue being an instrumental part of ARK’s growth, a role we have fulfilled since acquiring a minority investment in the company in 2016.”

Earlier this month, Wood told Bloomberg News that the dispute was headed toward an amicable agreement that would leave her in control. She said Monday that she was “delighted to have reaffirmed the partnership with Resolute for our U.S. distribution.”

Ark’s exchange-traded funds soared in popularity this year, catapulting Wood into the limelight as one of the first star ETF active managers. Her ARK Innovation ETF (ARKK) just experienced another record week of inflows, boosting total cash added this year to $9.5 billion. The fund is up more than 170% year to date.