Battle for the Golden Goose (ARK Investment VS Resolute Investment Managers)

ARK is a top-performing fund manager and Resolute is a distributor for mutual funds and ETFs. Cathie Wood is the CEO/CIO & majority owner of ARK.

Recently, Resolute has announced that it will exercise its option to buy more shares and take majority control of ARK. This option was included as part of the minority stake in Wood’s firm that Resolute took in July 2016.

At that time, ARK was an unknown small-timer ($40M AUM) but has since turned into a well-known investment manager with $30B AUM.

The announcement came 3 days after ARK announced it is seeking for proposal "to explore the potential replacement of Resolute Investment Distributors, an affiliate of ARK's minority partner, as a distributor of its U.S. retail and institutional products and services." This did not go well with Resolute, who has the exclusivity agreement to distribute ARK funds in the US.

Interestingly, the reply by ARK "The remarkable success of our team is rooted firmly in a culture of transparency, collaboration, and employee ownership. We do not believe that equity ownership by a party tangential to our business is in the best interest of ARK's stakeholders."

seems to have more common ground with Resolute's ultimate owner Kelso & Company whose founder Louis Kelso invented the Employee Stock Ownership Plan. Taken from its website, "The tenets of the Kelso ESOP heritage, including a significant alignment of interest and history of partnership, remain key components of the firm's strategy and differentiation."

While both sides are pulling power moves and threatening poison pills, please remember the partnerships, managers and investors who fed the goose and turned it into the golden goose today.

https://www.pionline.com/money-management/resolute-take-majority-ownership-ark-investment-management