Derivative products only recently authorised in the US are behind a string of new exchange traded funds allowing investors to bet on highly sought-after unlisted companies such as Anthropic and OpenAI. So-called perpetual futures, or "perps", let the ETFs offer exposure to private companies without owning the underlying asset. The recent slew of launches marks the latest attempt to sell access to often highly illiquid private stocks through ETFs, the world's most liquid fund structure. If the funds prove successful, analysts say the strategy could lead to an explosion of ETFs offering exposure to private companies.
"There is no question that these products will make it easier to get exposure to [unlisted] companies," said Benjamin Schiffrin, director of securities policy at advocacy group Better Markets. "The problem is that it's a risky way of doing it. They are essentially bets. You are not owning the underlying assets." Schiffrin called on regulators to "take a hard look at these products".
Previous ETF issuers sought exposure to unlisted companies by holding private stock directly or through special-purpose vehicles, but those strategies were limited by the need to build an inventory of hard-to-access shares. Perpetual futures were cleared to trade in the US only in May this year. Unlike traditional futures, they have no expiry date, and contracts reset at intervals, often of one day or eight hours.
For unlisted companies there is often no observable reference price, only snapshots from funding rounds or private transactions. Exchanges such as Binance, Coinbase and Hyperliquid have calculated their own reference prices from bids and offers submitted through market makers, sometimes guided by external indications of value. Schiffrin said the perp itself is effectively "making up the reference price, which seems pretty risky". Two US ETFs launched this month by Leverage Shares and Corgi Funds hold total return swaps linked to perps to access Anthropic and OpenAI, and several more filings have followed.
Source: Financial Times Companies · Summarized by HeadlinesBriefing