Cathie Wood grew ARK Investment Management to more than $18 billion in assets in just six years. Now, an early backer of the exchange-traded fund company wants a bigger piece of the start-up it helped rise to prominence.

Resolute Investment Managers, a distributor for mutual fund and ETF companies including ARK and American Beacon Advisors, plans to exercise its option to purchase a controlling stake in ARK early next year, according to a regulatory filing. This option was included as part of the minority stake in Wood’s firm that Resolute took in July 2016.

At that time, ARK was a small start-up operating out of what Resolute chief executive office and president Gene Needles has described to II as a small midtown office without working air conditioning. Earlier that year, in March 2016, the ETF company had raised its first big institutional allocation, when the State of Michigan Retirement Systems invested $200 million. Before that, Wood told II that ARK only had about $40 million under management.

Since then, ARK has grown dramatically, thanks in large part to an unflinchingly bullish position in Tesla. In this year alone, the firm’s flagship ARK Innovation ETF has grown from $1.86 billion at the end of December to nearly $9 billion at the end of September. 

In a statement provided to media outlets, Wood said she and the firm’s other employee-owners were “disappointed that Resolute Investment Managers, Inc., and its private equity owner, Kelso & Company, have chosen to issue this unwelcome notice that they intend to seize control of our business.”

“The remarkable success of our team is rooted firmly in a culture of transparency, collaboration, and employee ownership,” Wood added. “We do not believe that equity ownership by a party tangential to our business is in the best interest of ARK’s stakeholders.”

The response from ARK — pushing back against an option that was in the original contract — is “not common at all” in these kinds of deals, according to an executive at a firm that buys stakes in asset and wealth managers. He spoke anonymously because he was not familiar with the specifics of ARK’s deal with Resolute.

“A minority deal is only a minority deal if these sorts of stipulations and conditions are not attached to it,” he said. “When you do a deal where someone takes a stake with the option to buy more, you’re selling a strategic stake to someone who ultimately can control the business.”

[II Deep Dive: Cathie Wood Still Thinks Tesla Is Going to $6,800. Why?]

In the regulatory filing, ARK said that Resolute notified the ETF company of its plans on October 29. Just a few days before, on October 26, ARK had put out a press release announcing a request for proposal process to potentially replace Resolute Investment Distributors, a Resolute affiliate, as the distributor of ARK’s U.S. retail and institutional products.

“In the best interest of shareholders and stakeholders, ARK is commencing a process to evaluate potential strategic partners for U.S. distribution,” ARK said in the October 26 statement. The firm added that Resolute Investment Distributors would be considered in the evaluation and RFP process.

In a statement provided to II, a spokesperson for Resolute noted that the net assets of ARK’s ETFs have grown from $60 million to $18 billion since Resolute’s affiliate became the ARK’s sole U.S. selling agent in November 2016. 

“Resolute Investment Managers remains the largest non-employee shareholder of ARK Investment Management and its affiliated entities and sits on the boards of directors of ARK Investment Management and its affiliated entities,” the statement continued. “As such, we remain committed to the mutual success of both ARK and Resolute Investment Managers.”