If you have your heart set on investing in up-and-coming private companies, options exist, but are limited. Destiny Tech100 (DXYZ) is a closed-end fund that began trading on the New York Stock Exchange on March 26. It offers exposure to some of the top venture-backed private technology companies, including SpaceX, OpenAi, Epic Games, Chime Financial, Klarna Bank, Discord and Stripe. This is a closed-end fund, and like all closed-end funds it essentially consists of a box that holds assets, in this case shares of private tech companies. During an initial public offering, the fund issues a limited number of shares that trade on an exchange. As a result, market demand and trading activity can be just as important as the fundamentals of the companies in the box. Closed-end funds usually trade at a discount to their net asset value because the cost of running the fund has to be subtracted. Not in the case of the Destiny Tech100. In this case, there’s big retail interest in accessing shares of private companies like SpaceX, but because those shares are not publicly available, investors have bid up the price of the fund far beyond the total value of the fund’s assets, or NAV. How far have they bid them up? Since it began trading on March 26, the fund has gone from a low of $8.25 to $105, and is now trading above $25. However, as of Dec. 31, the net asset value of the securities was $4.84 a share. With 10.8 million shares issued, the net assets of the firm is $52.6 million, but it is currently trading with a market capitalization of $278 million. Destiny Tech100 Net assets (12/31/23): $52.6 million Current market capitalization: $278 million In other words, this fund is trading at a large premium to the value of the underlying shares. Its current price assumes that the value of all the underlying shares once they go public (or are acquired) is more than five times their last valuation. Why would investors do this? Obviously, there is a strong desire to get into hot private market tech companies, even if at an irrational cost. That appears to be the prime motivator. The fact that there is a very limited supply of shares is also a critical factor. Given the limited supply, and intense investor demand, a company would rationally make a decision to float more shares. That is exactly what they are doing. The company filed a $1 billion stock offering this Tuesday. Isn’t there a better way for investors to get access to private shares? There have been other attempts to get around this problem with closed-end funds trading at huge premiums or discounts. The simplest way to do this would be to float an exchange traded fund, or ETF, that held these private shares. This is not yet feasible because ETFs have to be able to continuously create or redeem shares in the underlying securities. There is not sufficient liquidity in these private tech names to allow this. There are other attempts to get around the problem. In late 2022, Cathie Wood launched the ARKVX Venture Fund (ARKVX), an interval closed-end fund. This fund also invests in private tech companies like SpaceX, FigureAI, Epic Games and OpenAI, but also owns public companies like Coinbase and Robinhood . When investors purchase shares of an interval fund, the shares are issued at the net asset value, so there is no premium or discount. However, investors can only sell their shares back to the fund at predetermined intervals, usually quarterly. In the case of ARKV, investors can sell back their shares on a quarterly basis up to 5% of the NAV of the fund. Private funds for qualified investors are also available. Forge Global launched the Forge Accuity Private Market Index, a market capitalization weighted index that tracks the performance of 60 late-stage venture-backed private companies like SpaceX and Epic Games. The index is already being used in the Accuidity Megacorn Fund. This is a private fund for qualified purchasers with a net worth of at least $5 million and has a minimum ticket size of $100,000. Bottom line: there is no easy way to access private shares. Note: Howe Ng from Forge Global and Brett Winton, chief futuris at, ARK Investment, will be on ETF Edge today at 1:10 p.m. ET. ETFEdge.cnbc.com