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Cathie Wood’s Ark Boosts Compliance Team After Rapid Fund Growth

Dec. 15, 2021, 10:30 AM

At Cathie Wood’s investment firm, rapid inflows of cash following a blockbuster 2020 led its in-house legal and compliance team to nearly double in size this year.

Ark Investment Management added three people to a now seven-person unit. They include D. Forest Wolfe, a legal veteran of Angelo Gordon & Co. and Morgan Stanley, as general counsel—a position that had been vacant for five years.

Growth and performance helped drive the need to expand the team, Kellen Carter, the firm’s corporate counsel and chief compliance officer, said in an email. He and Wolfe are the only in-house lawyers at Ark, he said.

Though returns in the firm’s exchange-traded funds have slipped this year, the flagship Ark Innovation ETF returned 149% in 2020, making it one of the best-performing funds in the U.S. Investors sunk $14.5 billion into Ark funds in 2021, Bloomberg News reported July 31.

Wood, a former chief investment officer for thematic portfolios at AllianceBernstein Holdings LP, an asset management giant that reshuffled its own in-house legal leadership earlier this year, co-founded Ark in 2014.

Before joining Ark, Wolfe spent nearly a dozen years at New York-based alternative asset manager Angelo Gordon, where he was a managing director, general counsel, and chief compliance officer.

At Morgan Stanley, where he was an executive director of legal, Wolfe handled legal matters for private wealth management from 2004 to 2009.

Ark added Wolfe, a former Sullivan & Cromwell corporate associate, to its staff August, Carter said. Wolfe didn’t immediately respond to a request for comment.

Compliance Team

Besides Wolfe, Ark’s legal and compliance additions this year include compliance manager Harry Skirlis, a former managing director and head of equity trading for the Bank of New York Mellon Corp.

Compliance associate Makenzi Cella also joined Ark after serving as compliance analyst at King Street Capital Management LP and HSBC Securities USA Inc.

Ark director of compliance Kathleen Fontano was hired in November 2020 from Atlantic Investment Management Inc., an equity investment firm where she spent more than three years in the same job.

The firm’s other compliance professionals are director of compliance Romane Somaroo and due diligence and compliance manager Ariel Harrison, a former private equity paralegal at Weil, Gotshal & Manges, according to Ark’s website.

Somaroo was hired in 2018 and Harrison came aboard the following year.

Carter, the firm’s compliance chief, spent more than four years as an attorney and compliance examiner at the Securities and Exchange Commission in New York. He was also a manager at Ernst & Young prior to joining Ark in 2016.

In recent years, Carter has also held the additional title of chief legal officer for Ark’s exchange traded funds. He exchanged correspondence with the SEC this year over proposed rule changes for public listings via deals with increasingly popular special purpose acquisition companies, in which Ark has made investments.

Carter is listed among Ark’s senior management in the firm’s most recent Form ADV filed Nov. 5 with the SEC, which shows it had more than $55 billion in assets under management as of Feb. 28. Wolfe and his new role are not named in the document.

Angelo Gordon

Wolfe joined Angelo Gordon in 2009 and left the firm sometime this year, according to his LinkedIn profile. Angelo Gordon didn’t respond to a request for comment about his departure, nor did the firm’s current general counsel, Christopher Moore.

Moore is a former Goodwin Procter partner hired last year from his prior role as general counsel for General Electric Capital Corp.

Angelo Gordon disclosed in a pair of securities filings dated Nov. 25, 2020, for two public entities the firm controls—AG Mortgage Investment Trust Inc. and Chicago-based, middle-market direct lender AG Twin Brook BDC Inc.—that Moore would on an interim basis succeed outgoing former general counsel and compliance chief Raul Moreno. The latter had also been a senior counsel at Angelo Gordon.

Chegg Inc., an education technology company that added a new legal chief last year, hired Moreno as a deputy general counsel earlier this year.

AG Mortgage’s website states that Jenny Neslin, a former deputy general counsel at Colony Capital Inc., an investment firm now called DigitalBridge Group Inc., came aboard this past April as its new general counsel and corporate secretary. In November, Neslin also took on those same roles for AG Twin Brook.

Top Legal Job

Wolfe is the first person to hold the general counsel position at Ark since October 2016, when former co-founder, general counsel, and COO Jane Kanter left after a little more than two years at the firm.

Prior to joining Wood’s firm, Kanter was an associate legal counsel in the SEC’s Division of Investment Management and former head of the agency’s investment company disclosures study. She also was a lawyer for investment manager T. Rowe Price Group Inc. and partner at the law firms Dechert and Katten Muchin Rosenman.

After leaving Ark, Kanter spent two years as a managing partner and chief counsel and compliance officer for San Francisco-based asset manager Manifold Partners LLC before becoming COO in early 2020 for 2nd Vote Advisers LLC.

Kanter is now a board member for the investment adviser’s principal owner, 2nd Vote Value Investments LLC, and board chair for Highline Management Inc., which oversees the management of several public funds investing in alternative assets.

Dechert, where Kanter served as a senior financial services partner in Washington prior to retiring from the firm to help start Ark, has previously done legal work for Wood’s firm, according to securities filings and trademark records. Kanter also advised Ark and Wood during her time in private practice.

Ark avoided a potential fight over its management a year ago this month when Wood purchased an option from Resolute Investment Managers Inc. that threatened her control. Davis Polk & Wardwell advised Wood on that matter, while Proskauer Rose and Skadden, Arps, Slate, Meagher & Flom took the lead for Ark and Resolute, respectively, according to a statement announcing the agreement.

In October, Ark announced plans to close its New York office that month and relocate its headquarters to St. Petersburg, Fla. Wood praised her firm’s new hometown for its commitment to innovation, likening it to Austin, Texas, another city that has also become a hot spot for lawyers.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com;
John Hughes in Washington at jhughes@bloombergindustry.com