Ex-Tesla exec ventures into ETF space

Former Tesla Inc. and Lyft Inc. executive Jon McNeill is launching a firm that will run exchange-traded funds that focus on artificial intelligence and electrification.

McNeill, the cofounder of DVx Ventures, is teaming up with ETF industry pioneer Adam Patti to set up the new firm, VistaShares, according to a regulatory filing. DVx is known as a so-called hatch studio, creating its own companies from scratch instead of investing in those developed externally. 

VistaShares will offer thematic ETFs, a corner of the asset-management industry that has been hit with heavy outflows over the past two years, primarily because such funds tend to focus on growth stocks that struggled after the Federal Reserve began raising interest rates in 2022. 

There are already many thematic ETFs targeting AI and electrification, which can make competing for inflows difficult, said Breanne Dougherty, head of thematic strategy for Bloomberg Intelligence.

“They are moving into a crowded space,” Dougherty said. “My question is ‘What are they bringing to the table that is different?”’

A potential differentiator may be the two people who will initially run VistaShares. 

McNeill, Tesla’s former head of global sales and one of Elon Musk’s top executives, left in 2018 to become chief operating officer of rival Lyft and help take the ride-hailing startup public. McNeill is also on the board of General Motors Co. and is vice chairman of its Cruise autonomous-car unit.  

Patti previously helped run a Time Inc. division that included Fortune and Money magazines as well as CNNMoney.com. In 2007, he co-founded IndexIQ, a sponsor of ETFs that specialize in alternative investment strategies. A unit of New York Life Insurance Co. acquired IndexIQ in 2015. 

DVx, which McNeill co-founded after leaving Lyft in 2019, has started more than a dozen companies — relying in part on capital the firm raises from its VC investors — including startups in industries such as software-as-a-service, electronic vehicles and AI. VistaShares would be its first attempt to develop an asset manager. Once DVx’s companies are up and running, it generally brings in outside executives to run them. 

The VistaShare ETFs will offer exposure to what the firm calls supercycles, describing them on its website as “long-term trends that disrupt current economic models through leading edge technological advancements.”

Representatives for DVx and VistaShares declined to comment.