A private fund, holder of shares in trending companies such as OpenAI, Anthropic, and SpaceX, has just entered the stock market. It is trading at 173 dollars, with a NAV per share of 18.97 dollars.
In general, closed-end funds and holdings are traded at a discount on the stock exchange, mainly due to lack of liquidity and management fees. But when you have the most popular companies of the moment in your portfolio, you can escape the rule. Indeed, the top seven positions of the fund are well known to the public: Anthropic in first place, followed by Databricks, OpenAI, Anduril, Ramp, SpaceX, and Epic Games.
With the unique enthusiasm for unlisted tech recently, this IPO had all the ingredients to attract speculators. And that’s exactly what happened. With 100,000 pre-listing investors and over 650 million dollars in capital, Fundrise Innovation is now one of the largest venture capital funds listed in the United States.
However, a large part of the initial investors are not allowed to sell their shares before six months – which amounts to 90% of the fund’s value according to Bloomberg. This low float is one of the factors responsible for the surge in the early days of listing.
At the height of the frenzy, the shares were traded at over 30 times the NAV (net asset value of the fund). The thesis is simple, and appealing: at a time when many listed companies prefer to wait until they have reached a considerable size before going public, Fundrise wants to offer individuals a way to invest in these companies.
That being said, even if one can debate the solidity of the NAV, since some valuations may be approximate, a premium of such magnitude seems hard to justify. And we are not in a unique case. The example of Destiny Tech100 can help investors take a step back. This fund, which also holds shares in SpaceX and OpenAI, had a similarly spectacular first week of trading in April 2024, before significantly retracing. However, the stock continues to trade at a premium as it is priced at 28 dollars for a NAV per share of 19.97 dollars.
