Introducing Lux Thematic Public Investing
For more than two decades, Lux has taken a first principles, thematic approach to deep science and technology — partnering with extraordinary founders to help build iconic and enduring companies.
While the entrepreneurial journey often begins in universities, labs and garages, founders can scale their companies to thousands of employees and rapidly grow into global businesses with private investment capital as fuel and patient support. With vertiginous success, the typically exclusive access of private investors gives way to easily accessible public listings. From symbolic market bell ringing ceremonies, significant growth and development can continue apace, with new product and geographic expansion and compounding shareholder returns for years to come.
Partnering with remarkable company founders on every step of their journey — often from company inception through IPO — means Lux’s own journey has naturally evolved to now include all stages of value capture from de novo company creation and early-stage venture capital to opportunistic growth and thematic public investing, the latter initially through Lux-advised indexes and Exchange-Traded Funds (ETFs). Over the past 12 months, Lux has launched multiple representative and carefully constructed thematic Indexes: Nasdaq Lux Health Tech Index (NASDAQ: NQHTEC), Lux Bio Tech Index (Bloomberg: LUXBT), Lux Manufacturing Tech Index (Bloomberg: LUXMT) and Lux Automation Tech Index (Bloomberg: LUXAT).
In areas like health technology, we have had great private market success. Today, we continue ahead with the official launch of a listed ETF that will invest in publicly-traded companies focused on health and tech innovations in medical and surgical devices, clinical diagnostics and digital health. It is called the First Trust Nasdaq Lux Digital Health Solutions ETF (NASDAQ: EKG), based on the Nasdaq Lux Health Tech Index.
Why now move from tracking leading innovators (in representative Indexes) to allocating capital behind these ideas (in investable ETFs)? The equity market pullback in life sciences and technology provides a more attractive entry point for long-term investors seeking exposure to secular mega-trends that we believe have duration into the decades. We expect Lux-affiliated ETFs to be among the most meaningful public shareholders of the next generation of emerging technology innovators and leaders.
The enabling tool for Lux to efficiently operate its thematic investment franchise is a product from a new startup called Thematic. The company was originally incubated inside Lux alongside serial technology entrepreneur and CEO Steve Carpenter. The core team hails from BlackRock, Dropbox, PayPal, Brex, and Plaid. Thematic is a modern platform for easily building, launching and managing custom investment products at scale, with an initial focus on indexes, ETFs and other structured products. These impressive digital tools will soon be available for others beyond Lux to use.
The world of technology investing has been converging between private and public strategies for years — initially driven by hedge funds crossing over into late-stage private investments. Lux is leading the way forward by bringing its direct experience in identifying, investing and building winning companies across emerging thematic technology trends to benchmarks of publicly-traded leaders and innovators.
Peter Hébert & Josh Wolfe