Robinhood Ventures Fund II priced 8 million common shares at $25 each, creating a $200 million gross initial public offering for a fund designed to give retail investors exposure to private companies.
Robinhood said the shares are expected to begin trading on the New York Stock Exchange on Aug. 13 under the ticker RVII. The offering is expected to close Aug. 14, subject to customary conditions.
The fund's total size is $225.5 million before deducting the sales load and offering expenses. That could rise to $255.5 million if underwriters exercise their 30-day option to buy another 1.2 million shares at the offering price, less discounts and commissions.
If trading begins as expected, investors will be able to buy RVII shares for exposure to the fund's private-company portfolio. Robinhood's disclosures say some exposure may be held through illiquid private vehicles with capital calls and additional fees.
What Investors Are Buying
RVII is a business development company, a type of closed-end fund that issues a fixed number of shares and does not redeem them at a shareholder's request. Robinhood said the vehicle has no accreditation requirement or investment minimum.
In an Aug. 3 launch announcement, Robinhood said RVII then included 80 private companies, with more expected to be added. Its mandate covers seed investments in early- and growth-stage private companies across sectors, focusing on businesses that participated in Y Combinator or have a founder who did.
Robinhood Ventures, the fund's adviser and a wholly owned Robinhood Markets subsidiary, charges a base management fee equal to 2% of net assets annually, calculated and paid quarterly. It also receives an annual incentive fee equal to 20% of cumulative realized capital gains, after realized losses, unrealized depreciation and previously paid incentive fees.
The fund may use leverage, and private vehicles in its portfolio may impose additional fees. Exchange trading would give shareholders a potential route to sell without waiting for a private company to exit, but an active market is not guaranteed. RVII shares may trade above or below net asset value, and investors cannot require the fund to redeem them.