Robinhood Markets is seeking to raise US$1bn from a closed-end fund designed to invest in private companies, broadening access to retail investors ahead of what could be one of the biggest IPO cycles in capital markets history.
Goldman Sachs is sole bookrunner on the proposed sale of 40m shares, including 5m by Robinhood itself, at US$25.00, with pricing expected after the market close on Wednesday, February 25.
“We want to do for private markets what we’ve already done for public markets and make them accessible to all, regardless of who you are and what your bank balance is,” Robinhood Markets CFO Shiv Verma said on a livestreamed YouTube presentation Tuesday.
Set up in September 2025, Robinhood Ventures Fund I (RVF) has already invested roughly US$275m across seven private companies, including US$75m in Databricks and US$50m in Revolut. As of January 31, those investments were valued at US$281.9m. The fund also has an agreement purchase US$14.6m secondary shares of Stripe.
The new fund comes after the SEC relaxed long-standing restrictions on closed-end funds that invest heavily in private assets. Previously, funds with more than 15% of assets in private investments were restricted to accredited investors -- defined as US$1m net worth for individuals and US$5m for corporations. The new rules allow broader retail participation, providing a structural advantage to products like RVF.
Robinhood’s clients will be able to participate in the closed-end fund through the broker’s IPO Access portal, including purchasing fractional shares, a feature that could help drive large-scale retail participation.
Closed-end fund IPOs and similar de novo funding vehicles historically have struggled because of fees paid and drag on investment. Bill Ackman’s Pershing Square Asset Management, for instance, was forced to abandon plans for a closed-end fund of Pershing Square USA in late 2024, downsizing the initial target from US$25bn to US$2bn before ultimately pulling the plug.
RVF is hoping to address concerns over investment drag by launching with an existing portfolio.
Robinhood has also agreed to lower fees to 1% of AUM for the first six months and not charging a 20% performance fee, a standard feature of traditional hedge funds, VCs and private equity funds. The base fee rises to 2% of AUM after six months, or about US$25m annually on the US$1.275bn of AUM after the IPO.
RVF intends to employ leverage up to the maximum of 33.3% of AUM allowable for US closed end funds.
Goldman Sachs stands to collect a US$31.25m of fees from the RVF IPO on the number of shares being sold in the base deal, blended as 3.5% for the first US$500,000 and 2.75% for the rest. The bank has an option to sell an additional 6m shares on which it would be paid a 1.5% fee if exercised.
After underwriting fees and excluding secondary shares sold by Robinhood, RVF is raising US$847.6m in net proceeds.
The open question is whether Robinhood's vast user base will seize on the offering. There is clear precedent for the value of private investments in the public markets.
The Destiny Tech100 closed-end fund, whose largest holding is SpaceX, trades at US$29.45, or 147% of its last reported US$19.97 NAV per share as of December 31. That fund has taken advantage of that premium valuation by selling stock on the open market, including US$244.6m raised in the fourth quarter via an ATM program being administered by Jefferies.
Cathie Wood’s Ark Investment Management’s ARK Venture Fund is another closed-end fund. The ARK Venture Fund, whose holdings include SpaceX, xAI, Databricks, Groq and OpenAI, carries a 2.9% net expense ratio, requires minimum US$500 investment and is not traded on exchange with liquidity available on a quarterly basis and redemptions limited to 5% of AUM.
For Robinhood, the RVF closed-end fund is an extension of firm's broader push into private assets. Last summer, the broker launched tokenized access to OpenAI and SpaceX shares in Europe via special purpose vehicles -- an initiative that immediately drew backlash from OpenAI, which argued the tokens did represent actual equity.