Investor Note · 14 May 2026
The Private AI Edge. Why the Next Generation of ETFs Holds What Passive Cannot.
Active ETFs grew 29× in nine years. The next iteration — daily-liquidity wrappers with a private sleeve — is already trading, and the most valuable AI companies live inside it.
Invesense Research · ETFGI · ICI · BBH 2025 Global ETF Investor Survey · SEC Rule 6c-11 · Yahoo Finance · 2016–2026
+2,785%
Active ETF AUM growth
2016–2025
$1.5T
Active ETF AUM at
year-end 2025
94%
of 500 institutions feel
under-exposed to private
$2.84T
Six private AI giants —
larger than Meta
Active ETFs grew from $52 billion in 2016 to nearly $1.5 trillion by the end of 2025 — a +2,785% expansion in under a decade. That structural shift, powered by the SEC’s Rule 6c-11 in September 2019, is now entering its second phase: active ETFs with measured allocations to private companies. Interval fund assets with private market exposure nearly quintupled from $18.6 billion in January 2020 to $93.4 billion by January 2025, with 16 new filings since the start of 2024 alone. The 2025 BBH Global Investor Survey found that 34% of 500 institutional investors plan to allocate to private markets through ETF structures, 94% feel under-exposed, and 91% plan to increase. The wrapper is proven. The demand for private access inside it is accelerating.
01
The Active ETF Explosion.
$10,000 allocated to active ETFs in 2016 rode an asset class that grew 29× in nine years. The SEC’s Rule 6c-11 eliminated the need for individual exemptive relief, enabling semi-transparent and fully active structures to proliferate. The result: over 1,200 new active ETF launches since 2019. Interval funds — the precursor structure for private market access — grew from 60 funds in 2018 to 93 today, with assets quintupling to $93.4 billion. The structure works. The next iteration — daily-liquidity ETFs with a private sleeve — is already trading.
02
The Pioneers Are Proving the Model.
ERShares launched XOVR in August 2024 — the first daily-liquidity ETF to blend public equities with a policy-capped private sleeve. Within 19 months it reached $486 million in AUM, holds SpaceX and Anduril Industries alongside public innovators like NVIDIA and Meta, and became the first ETF to hold a private company (Klarna) that subsequently went public inside the same fund during the 2025 Klarna IPO. SpaceX alone is the fund’s largest single position at 9.5% of the portfolio.
The demand signal extends beyond XOVR. Destiny Tech100 (DXYZ) launched as a closed-end fund holding 32 venture-backed private technology companies and traded at a 100%+ premium to NAV at its peak — a direct measure of unmet retail demand. ARK Venture Fund (ARKVX) runs an interval fund with direct positions in SpaceX, OpenAI, and FigureAI, attracting $304 million at a $500 minimum. The asymmetric return profile is the draw: Groq went from a $2.8 billion valuation to approximately $20 billion in 16 months through its Nvidia acquisition — a 7× exit that public markets rarely deliver in that timeframe.
| Fund | Structure | AUM | Expense | Private Access | Liquidity |
|---|---|---|---|---|---|
| XOVR | ETF | $486M | 0.75% | Direct (SpaceX, Klarna) | Daily |
| DXYZ | Closed-End | $310M | — | Direct (32 companies) | Daily (exchange) |
| ARKVX | Interval Fund | $304M | ~2.75% | Direct (SpaceX, OpenAI) | Quarterly (5%) |
| BIZD | ETF | $1.42B | 12.86% | Indirect (BDC lending) | Daily |
| PSP | ETF | $226M | 1.80% | Indirect (listed PE) | Daily |
03
AI Makes Private Access Essential.
The most valuable AI companies are staying private longer. SpaceX is valued at approximately $1.25 trillion, with a targeted $1.5 trillion IPO in mid-2026. OpenAI raised $110 billion from Amazon, Nvidia, and SoftBank, reaching a reported valuation near $840 billion. Anthropic closed a $30 billion Series G at $380 billion. Databricks completed a $4 billion Series L in December 2025 at $134 billion and filed confidentially for a Q2 2026 IPO. These are not speculative early-stage bets — they are the infrastructure layer of artificial intelligence, and they are not available in any passive index.
The combined valuation of just six private AI companies — SpaceX, OpenAI, Anthropic, Stripe, Databricks, and xAI — is approximately $2.84 trillion. That is larger than Meta’s entire market capitalisation and approaching Amazon’s. The global AI market is projected to grow from $184 billion in 2024 to $827 billion by 2030, a 28% CAGR, and a significant share of that value creation is occurring in companies that are private today. A public-only AI ETF does not merely underperform — it structurally cannot access the core of the AI value chain.
Our View
We believe the active ETF with private market access is the most important structural innovation in asset management since the original ETF wrapper. The returns that matter most in AI — SpaceX, OpenAI, Anthropic — are locked behind private markets. An ETF that can access them while maintaining daily liquidity on the public book represents a fundamentally different product category.
The first Shariah-compliant version of this structure does not exist. We intend to build it.
Speak with our investment team
For a deeper discussion on how these themes apply to your portfolio, we welcome a conversation.
Invesense Asset Management Ltd. is regulated by the Dubai Financial Services Authority (DFSA). This material is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Past performance is not indicative of future results. Private market investments involve additional risks including illiquidity and limited transparency. Active ETF AUM data: ETFGI and industry reports (2016–2025). Interval fund AUM: ICI data (2020–2025). ETF fund data: Yahoo Finance and Invesense Research, as of 2 April 2026. Private company valuations: latest funding round announcements and secondary market data. Computations by Invesense Research.
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