1 

Investment Advisers Act of 1940 – Section 203(a) 

Credit Agricole Asset Management Alternative Investments, Inc. 

August 7, 2006 

 Our Ref. No. 20066201132 

 Credit Agricole Asset

 Management Alternative 

RESPONSE OF THE OFFICE OF CHIEF COUNSEL Investments, Inc. 

DIVISION OF INVESTMENT MANAGEMENT File No. 132-3 

Your letter dated July 11, 2006 requests our assurance that we would not 

recommend enforcement action to the Commission against Credit Agricole Asset 

Management Alternative Investments, Inc. (“CAAM-AI, Inc.”) under section 203(a) of 

the Investment Advisers Act of 1940 (the “Act”) if CAAM-AI, Inc. does not register with 

the Commission as an investment adviser. As we explain below, based on the facts and 

representations in your letter, we believe that CAAM-AI, Inc. would be prohibited by 

section 203A(1) of the Act from registering with the Commission as an investment 

adviser. 

Facts 

You state the following: CAAM-AI, Inc., a Delaware corporation with its 

principal office and place of business in Chicago, is an indirect, wholly owned subsidiary 

of Credit Agricole Asset Management (“CAAM”). CAAM is the asset management 

subsidiary of CA Group, a network of banks headed by Credit Agricole SA. CAAM 

operates its alternative investment business through a group of subsidiaries located in 

Europe and the United States (collectively, the “CAAM-AI Group”) and through other 

affiliates located in Asia, the Middle East and elsewhere.1 The CAAM-AI Group 

You represent the following: The CAAM-AI Group consists of CAAM-AI, Inc., 

Credit Agricole Asset Management Alternative Investments Services, Inc. (“CAAM-AI 

Services”), Credit Agricole Asset Management Alternative Investments, SAS (“CAAMAI, SAS”), Credit Agricole Asset Management Alternative Investments, SAS (London 

Branch) (“CAAM-AI, SAS LB”), Credit Agricole Asset Management Alternative 

Investments, Ltd. (“CAAM-AI, Ltd.”), and Credit Agricole Alternative Investment 

Products Group SGR S.p.A. (“CA-AIPG Milan”). CAAM indirectly owns 100% of 

CAAM-AI, Inc., CAAM-AI Services, CAAM-AI, SAS, CAAM-AI, SAS LB, and 

CAAM-AI, Ltd. CAAM indirectly owns 30% of CA-AIPG Milan, and other subsidiaries 

of Credit Agricole SA own the remaining 70%. CAAM-AI, Inc. and CAAM-AI Services 

are the only CAAM-AI Group entities that are located in the United States, and CAAMAI Services does not provide investment advisory services. 
 2 

manages various funds of hedge funds, which invest in hedge funds managed by persons 

located in the United States and Europe, and one member of the CAAM-AI Group, 

CAAM-AI, Ltd., also presently manages one managed account program organized in

Bermuda (the funds of hedge funds and managed account program, collectively, the 

“Funds”). None of the Funds is organized in the United States, and none of the Funds 

permits investments by persons residing in the United States or by any person defined as 

a “U.S. person” under Regulation S under the Securities Act of 1933. The CAAM-AI 

Group does not serve as an investment adviser to any investment company registered 

under the Investment Company Act of 1940 (the “Company Act”). 

2 You represent that CAAM-AI, Ltd. is exempt from registration by the Bermuda 

Monetary Authority but generally is subject to regulation and supervision in Bermuda by 

the Minister of Finance of Bermuda. You further represent that CAAM-AI, SAS is 

regulated in France by the Autorité de Marchés Financiers and that CA-AIPG Milan is 

regulated in Italy by the Bank of Italy. 

3 You represent that CAAM-AI, Inc. provides similar advice to the managed 

account program. Managers are selected for portions of the assets in the managed 

account program, but the assets are not invested in the hedge funds themselves. 

CAAM-AI, Inc. provides advice only to three of its affiliates in the CAAM-AI 

Group and that advice relates only to the Funds. In particular, CAAM-AI, Inc. provides 

advice to CAAM-AI, Ltd., CA-AIPG Milan and CAAM-AI, SAS, which are investment 

managers located outside of the United States and are regulated by non-U.S. regulatory 

bodies having jurisdiction over their activities.2

 CAAM-AI, Inc. provides the following 

services to CAAM-AI, Ltd., CA-AIPG Milan and CAAM-AI, SAS: (i) identifying the 

universe of investment funds organized outside of the United States that are managed by 

managers located in the United States from a group of approximately 5,000 private 

investment funds and hedge funds; (ii) on a weekly or more frequent basis, 

recommending for consideration for inclusion in the various funds of funds, a “short list” 

of approximately 150 funds, including advice tailored to assist CAAM-AI, Ltd., CAAIPG Milan and CAAM-AI, SAS in determining for each fund of funds which 

underlying funds it should invest in as well as the percentage of its assets it should invest 

in various underlying funds; (iii) conducting due diligence on the managers of such 

funds; (iv) providing reports on each such manager, including the manager’s 

organization, investment process and risk controls; and (v) providing research on industry 

trends.3

CAAM-AI, Ltd., CA-AIPG Milan and CAAM-AI, SAS have ultimate decisionmaking authority pursuant to their investment management contracts with the individual 

Funds. CAAM-AI, Inc. does not have the authority to decide which securities, i.e., 

interests in the underlying hedge funds, to purchase or sell for CAAM-AI Ltd., CA-AIPG 

Milan or CAAM-AI, SAS, and CAAM-AI, Inc. is not responsible for arranging or 

effecting the purchase or sale of interests in the fund of hedge funds. CAAM-AI, Inc. 

also does not have the authority to decide which managers to hire or fire for the managed 

account program. 
 3 

4 Section 203(b) of the Act excludes certain investment advisers from the 

registration requirements. 

5 An adviser is "regulated or required to be regulated" in the state in which it has its 

principal office and place of business if that state has enacted an investment adviser 

statute. See Rules Implementing Amendments to the Investment Advisers Act of 1940, 

Investment Advisers Act Release No. 1633 (May 15, 1997). 

6 The glossary of terms in Form ADV generally defines “discretionary authority” as 

the authority to decide which securities to purchase and sell for the client or to decide 

which investment advisers to retain on behalf of the client. 

7 We note that the antifraud provisions of section 206 of the Act apply to all 

investment advisers whether they are required to register with the Commission or not. 

Analysis

Section 203(a) of the Act generally provides that it is unlawful for any investment 

adviser, unless registered under the section, to make use of the mails or any 

instrumentality of interstate commerce (U.S. jurisdictional means) in connection with his 

or its business as an investment adviser.4 Section 203A(a)(1) of the Act, however, 

prohibits certain investment advisers from registering under section 203(a). Section 

203A(a)(1) of the Act provides that: 

No investment adviser that is regulated or required to be regulated as an 

investment adviser in the State in which it maintains its principal office and place 

of business5 shall register under section 203, unless the investment adviser -- (A) 

has assets under management of not less than $25,000,000, or such higher amount 

as the Commission may, by rule, deem appropriate in accordance with the 

purposes of this title; or (B) is an adviser to an investment company registered 

under [the Company Act] . . . . 

Section 203A(a)(2) of the Act defines “assets under management” to mean “the securities 

portfolios with respect to which an investment adviser provides continuous and regular 

supervisory or management services.” Instruction 5.b(3) to Part 1A of Form ADV states 

that a person provides “continuous and regular supervisory or management services with 

respect to an account” if that person: (a) has discretionary authority6 over and provides 

ongoing supervisory or management services with respect to the account; or (b) does not 

have discretionary authority over the account, but has ongoing responsibility to select or 

make recommendations, based upon the needs of the client, as to specific securities or 

other investments that the account may purchase or sell and, if such recommendations are 

accepted by the client, the person is responsible for arranging or effecting the purchase or 

sale. 

Based on the facts and representations in your letter, CAAM-AI, Inc. would be 

prohibited by section 203A(a)(1) from registering with the Commission.7

 You represent 
 4 

See Goldstein v. SEC, 451 F.3d 873, 2006 U.S. App LEXIS 15760 at *7 (D.C. Cir. 

2006). 

8 See supra n. 5. Section 8A of the Illinois Securities Law of 1953 generally 

requires investment advisers to register. You represent that CAAM-AI, Inc. is exempt 

from registration because, during the preceding twelve consecutive months, CAAM-AI, 

Inc. has not had more than five clients in Illinois. See Section 130.805 Regulations under 

the Illinois Securities Law of 1953. Telephone conversation between Sara P. Crovitz of 

the staff and Wesley G. Nissen, counsel to CAAM-AI, Inc., on August 7, 2006. 

that CAAM-AI, Inc., which maintains its principal office and place of business in Illinois, 

is regulated or required to be regulated as an investment adviser in Illinois for purposes of 

section 203A(a)(1).8 You represent further that CAAM-AI, Inc. does not act as an 

adviser to an investment company registered under the Company Act. CAAM-AI, Inc. 

has no assets under management because it does not provide continuous and regular 

supervisory or management services. You represent that CAAM-AI, Inc. does not have 

the authority to decide which securities, i.e., underlying funds, to purchase or sell for 

CAAM-AI Ltd., CA-AIPG Milan or CAAM-AI, SAS, is not responsible for arranging or 

effecting the purchase or sale of interests in the fund of hedge funds, and does not have 

the authority to decide which managers to hire or fire for CAAM-AI, Ltd., CA-AIPG 

Milan or CAAM-AI, SAS or for the managed account program. As a result, CAAM-AI, 

Inc. would be prohibited by section 203A(1) of the Act from registering with the 

Commission as an investment adviser. 

Sara Crovitz 

Senior Counsel 
WINSTON & STRAWN LLP 


43 RUE DU RHONE 35 WEST WACKER DRIVE 200 PARK AVENUE 

1204 GENEVA. SWITZERLAND CHICAGO, ILLINOIS 60601-9703 NEW YORK, NEW YORK 10166-4193 

BUCKLERSBURY HOUSE 21 AVENUE VICTOR HUGO 

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LONDON, EC4N 8NH 

333 SOUTH GRAND AVENUE FACSIMILE (312) 558-5700 101 CALIFORNIA STREET 

SAN FRANCISCO, CALIFORNIA 941 11-5894 

LOS ANGELES. CALIFORNIA 90071-1543 

1700 K STREET, N.W. 

WASHINGTON. D.C. 20006-3817 

WESLEY G. NISSEN 

(312) 558-5804 

July 11,2006 

wnissen 9winston.com 

Office of Chief Counsel 

Securities and Exchange Commission 

450 Fifth Street, N.W. 

Washington, D.C. 20549 

Re: Credit Agricole Asset Management Alternative Investments, Inc. 

Ladies and Gentlemen: 

We are writing to you on behalf of our client, Credit Agricole Asset Management 

Alternative Investments, Inc. ("CAAM AI, Inc."). We are requesting your assurance that the 

staff (the "Staff') of the Securities and Exchange Commission (the "SEC") would not 

recommend enforcement action if CAAM AI, Inc. undertakes the activities described herein 

without registering under the Investment Advisers Act of 1940, as amended (the "Advisers Act") 

subject to the representations and undertakings described below. 

I. Introduction 

Background information relating to CAAM AI, Inc. and its affiliates is provided below in 

Section I1 of this letter. Such background information relates to the organizational structure, 

business activities, and regulation by foreign regulatory authorities of these entities. Section I11 

of this letter describes the ambiguous regulatory circumstances that necessitate no-action relief. 

In addition, Section I11 also contains an analysis of the reasons why, without the requested relief, 

CAAM AI, Inc. would have to register under the Advisers Act and why it would be appropriate 

for the Staff to recommend to the SEC that no action be taken if CAAM AI, Inc. does not 

register as an investment adviser under the Advisers Act. Section IV sets forth the 

representations and undertakings of CAAM AI, Inc. in connection with this request for relief. 

Lastly, Section V summarizes the analysis and conclusions found in Section 111. 

11. Background 

Organizational Structure 

Credit Agricole SA is the lead bank of a group of banks that includes a network of French 

regional banks and a number of French and international bank and financial services subsidiaries 

("CA Group"). CA Group is the largest banking group in France and one of the largest banking 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 2 

groups in the world based on shareholders' equity. As of December 3 1,2004, on a consolidated 

basis, Credit Agricole SA had total assets of 815.3 billion Euros, 405.8 billion Euros in funds 

under management and 24.9 billion Euros in shareholders' equity. Credit Agricole SA's shares 

are listed on the Premier march6 of Euronext Paris, which is France's principal securities 

exchange. 

Credit Agricole Asset Management ("CAAM) is the asset management subsidiary of 

CA Group and has several investment centers worldwide including Paris, London, Milan, 

Madrid, Hong Kong, Singapore, Tokyo and Seoul. As of December 31,2005, CAAM had 491.2 

billion Euros in assets under management and 2063 employees including 530 professionals 

dedicated to portfolio management. CAAM is among the leaders in Europe in several key asset 

management areas. 

CAAM indirectly through Credit Agricole Asset Management Alternative Investments 

Holding S.A. ("CAAM AIH") owns 100% of CAAM AI, Inc., Credit Agricole Asset 

Management Alternative Investments Services, Inc. ("CAAM A1 Services"), Credit Agricole 

Asset Management Alternative Investments, SAS ("CAAM A1 SAS"), Credit Agricole Asset 

Management Alternative Investments, SAS (London Branch) ("CAAM AI, SAS LB"), and 

Credit Agricole Asset Management Alternative Investments, Ltd. ("CAAM A1 Ltd."). CAAM 

AIH owns 30% of Credit Agricole Alternative Investment Products Group SGR S.p.A. ("CA 

AIPG Milan") with the remaining 70% being held by other subsidiaries of Credit Agricole SA. 

CAAM A1 Services, CAAM A1 SAS, CAAM AI, SAS LB, CA AIPG Milan and CAAM A1 Ltd. 

hereinafter collectively are referred to as the "Participating ~ffiliates."' . 

The alternative investment business initially was established in June, 1992 as a division 

of CAAM. In November, 2001, CAAM consolidated all of its alternative investment activities 

into a group of subsidiaries, the Credit Agricole Asset Management Alternative Investments 

Group ("CAAM A1 Group"), which now includes CAAM AI, Inc., CAAM A1 Services, CAAM 

A1 SAS, CAAM AI, SAS LB, CAAM A1 Ltd. and CA AIPG Milan. Overall, CAAM operates 

its alternative investment business through the CAAM A1 Group and through other affiliates 

located in Asia, the Middle East and elsewhere. 

Two entities within the CAAM A1 Group are located in the United States, CAAM AI, 

Inc. and CAAM A1 Services. CAAM AI, Inc., a Delaware corporation with its office and 

principal place of business in Chicago, Illinois, was formed on May 20, 19992 and was acquired 

1. 
 CAAM owns 100% of CAAM AIH, a company organized and existing under the laws of France. CAAM 

AIH is the holding company that directly owns 100% of CAAM AI, IN. and the Participating Affiliates. 

2 CAAM AI, Inc. originally was incorporated under the name Alternative Investment Managers Corp. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1, 2006 

Page 3 

by CAAM in 2001.' CAAM AI, Inc. is regulated by the Commodity Futures Trading 

Commission (the "CFTC") as a commodity trading advisor ("CTA") and commodity pool 

operator ("CPO") and is a member of the National Futures Association. CAAM A1 Services is a 

Delaware corporation formed on May 13, 1997.~ As of December 3 1,2005, CAAM AI, Inc. had 

eleven employees and CAAM A1 Services had nineteen employees. The unaudited revenues for 

CAAM AI, Inc. and CAAM A1 Services as of December 31, 2005 were 35.7 million United 

States Dollars and 18.6 million United States Dollars, respectively. 

The remaining entities within the CAAM A1 Group are located outside the United States 

and are overseen by various regulatory bodies having jurisdiction over their activities. CAAM 

A1 SAS is an asset management company domiciled in Paris and is registered with the Autoritk 

des MarchCs Financiers (the "AMY). CAAM AI, SAS LB is the London based branch of 

CAAM A1 SAS. CAAM AI, SAS LB is regulated by the Financial Services Authority (the 

"FSA") and serves as a consultant to CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan. 

CAAM A1 Ltd. is a Bermuda exempted company and is subject to supervision by the Minister of 

Finance of Bermuda. CA AIPG Milan is based in Milan and is regulated by the Bank of Italy. 

Activities of the CAAMAI Group 

The CAAM A1 Group manages various funds of hedge funds for investment by foreign 

clients.' These funds of funds invest in hedge funds of managers located in the United States and 

Europe. The CAAM A1 Group has no US clients and does not permit investments in these 

vehicles by US clients. Consistent with the foregoing, the CAAM A1 Group does not serve as 

adviser to any company registered under the Investment Company Act of 1940, as amended. 

Within the CAAM A1 Group, each entity performs a variety of functions in connection with 

these investment vehicles, such as due diligence, risk management, marketing and administrative 

services. 

CAAM A1 Ltd. and CAAM A1 SAS manage funds of hedge funds seeking optimal riskadjusted returns consistent with each fund's mandate. CAAM A1 SAS acts as the investment 

manager for all French domiciled private investment funds. CA AIPG Milan is an investment 

manager for several Italian domiciled funds. CAAM A1 Ltd. acts as the investment manager for 

3 As a result of this acquisition, CAAM recognized the benefit to its foreign clients of having an affiliate 

located in the United States, which would have greater access to fund managers located in the United 

States. CAAM AI, Inc. was not acquired to gain access to US clients. 

4 CAAM A1 Services originally was incorporated under the name Segespar Investment Services, Inc. 

' The Staff previously has taken the position that the definition of a "U.S. Person" contained in Rule 902(k) 

of Regulation S under the Securities Act of 1933, as amended, can provide guidance for purposes of 

determining what constitutes a "U.S. Person" under the Advisers Act. For purposes of this letter, we use 

the term US client to mean U.S. Persons as so defined in Rule 902(k) and foreign client to mean any person 

that is not a U.S. Person. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1, 2006 

Page 4 

offshore funds that are domiciled outside of France and Italy. CAAM A1 Ltd. also currently has 

a managed account program which is organized in Bermuda. This managed account program 

hires independent investment advisers to manage segregated portfolios of assets drawn from 

accounts participating in the program. As managers for these funds, CAAM A1 Ltd., CAAM A1 

SAS and CA AIPG Milan have been appointed investment managers by the respective funds, 

and are named accordingly in the corresponding fund prospectuses or offering documents. In all, 

the managers within the CAAM A1 Group manage a total of thirty-five (35) funds and one (1) 

managed account platform (hereinafter referred to as the "Funds"). None of the Funds are 

located in the United States. 

In constructing the investment portfolios of the Funds, CAAM A1 Ltd., CAAM A1 SAS 

and CA AIPG Milan rely on CAAM AI, Inc. and CAAM AI, SAS LB to provide consultancy 

services regarding the underlying hedge fund investments and proposals for allocation. Each of 

these entities provides research, due diligence results or information regarding a different aspect 

of the underlying investments and investment managers. 

CAAM AI, Inc. provides advice only to three of its affiliates in the CAAM A1 Group, 

and that advice relates only to the Funds. In particular, CAAM AI, Inc. provides advice to 

CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan, which are investment managers located 

outside of the United States and are regulated by non-U.S. regulatory bodies having jurisdiction 

over their activities. CAAM AI, Inc. provides the following services to CAAM A1 Ltd., CAAM 

A1 SAS and CA AIPG Milan: (i) identifying the universe of investment funds organized outside 

the Unites States managed by managers located in the United States from a group of 

approximately 5,000 private investment funds and hedge funds; (ii) on a weekly or more 

frequent basis, recommending for consideration for inclusion in the various funds of funds, a 

"short list" of approximately 150 funds, including advice tailored to assist CAAM A1 Ltd., 

CAAM A1 SAS and CA AIPG Milan in determining for each fund of funds which underlying 

funds it should invest in as well as the percentage of its assets it should invest in various 

underlying funds; (iii) conducting due diligence on the managers of such funds; (iv) providing 

reports on each such manager, including the manager's organization, investment process and risk 

controls; and (v) providing research on industry trend^.^ In addition to these activities, CAAM 

AI, Inc. provides similar advice to CAAM A1 Ltd. with respect to the managed account program. 

With respect to the managed account program, managers are selected for portions of the assets in 

the managed account program. 

As noted above, CAAM AI, Inc. is registered with the CFTC as a CTA and CPO. 

Nonetheless, the exemption from registration as an investment adviser provided by Section 

203(b)(6) for a CTA "whose business does not consist primarily of acting as an investment 

6 As discussed in Section I11 of this letter, CAAM AI, Inc. believes that these activities would constitute 

investment advice as defined in the Advisers Act. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 5 

adviser" would appear not to apply. As indicated, it is impossible to conclude that CAAM AI, 

Inc.'s business does not consist primarily of acting as an investment adviser. 

CAAM AI, Inc. provides the information described above to an investment committee for 

the Funds, which is comprised of CAAM AI, Inc.'s chief executive officer (who also serves as a 

director of CAAM AI, Ltd. and an executive officer of CAAM AI, SAS), a director of CAAM 

AI, Inc., and an executive officer of CAAM AI, SAS (who also serves as a director of CAAM 

AI, Ltd. and as a director of CA AIPG Milan). The investment committee reviews the 

information provided by CAAM AI, Inc. and makes recommendations to CAAM AI, Ltd., CA 

AIPG Milan and CAAM AI, SAS. CAAM AI, Ltd., CA AIPG Milan and CAAM AI, SAS 

typically follow the recommendations of the investment committee. CAAM AI, Ltd., CA AIPG 

Milan or CAAM AI, SAS make the ultimate decision for a Fund to invest in a particular 

underlying fund or to hire or fire a particular manager. CAAM AI, Ltd., CA AIPG Milan and 

CAAM AI, SAS have ultimate decision making authority pursuant to their investment 

management contracts with the individual Funds and their sub-advisory agreements with CAAM 

AI, Inc. CAAM AI, Inc. has no direct contractual relationship with the Funds. 

As stated above, CAAM AI, Inc. only has three clients of its own (its affiliates, CAAM 

A1 Ltd., CAAM A1 SAS and CA AIPG Milan). CAAM AI, Inc. does not communicate with,' or 

make recommendations to, its affiliates' clients, which are funds of hedge funds, or the investors 

in those ~unds.' In addition, CAAM AI, Inc. has no direct investment advisory relationship with 

any of its affiliates' clients and its name does not appear in any prospectuses which are currently 

provided to the investors in the Funds managed by CAAM A1 Inc.'s affiliates.' Clients of 

CAAM A1 Group contract directly with CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan 

and all investment advisory communications with such clients are undertaken exclusively by 

CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan. Clients are aware that CAAM AI, Inc. is 

an affiliate of the other entities within CAAM A1 Group, but they understand that CAAM AI, 

Inc. provides investment advisory services only to CAAM A1 Ltd., CAAM A1 SAS and CA 

AIPG Milan, and not directly to such clients. Moreover, CAAM AI, Inc. is not responsible for 

arranging or effecting purchases or sales of interests in the Funds. 

z 	 Under very limited circumstances, foreign clients that are visiting the United States may visit the offices of 

CAAM AI, Inc. and CAAM A1 Services. Such clients are accompanied at all times by a representative of 

CAAM A1 SAS. It also is made clear to such clients that CAAM AI, Inc. provides services to CAAM A1 

Ltd., CAAM A1 SAS and CA AIPG Milan, but no services are provided directly to the clients. 

8 As previously noted, CAAM A1 Group has no US clients. 

9 Promotional materials utilized by CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan may reference the 

fact that CAAM AI, Inc. is an affiliate of the CAAM A1 Group. Those references will make clear that 

CAAM AI, Inc. only provides advisory services to CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan, 

and does not render investment advisory services directly to clients. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 6 

CMM AI, SAS LB undertakes research and due diligence activities similar to those 

provided by CMM AI, Inc. as described above, except with respect to European and Asianbased private investment funds and hedge funds. It also has only three clients, its affiliates, 

CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan to which it provides these advisory 

services. 

CAAM A1 SAS is in charge of selecting the investment strategies considered appropriate 

to meet the stated objectives of a Fund. In addition it constructs a proposed global strategic asset 

allocation at the beginning of each year. 

In addition to the advisory services explained above, CAAM A1 SAS conducts all 

marketing and sales activities for the CAAM A1 Group. However, no marketing is done in the 

United States or to US Persons. 

CAAM A1 Services provides administration, accounting, valuation, information 

technology, legal and compliance services to CMM A1 Group. In connection with the 

provision of these services, representatives of CAAM A1 Services may communicate directly 

with clients of the CAAM A1 Group, but such communications are of a purely administrative 

nature. CAAM A1 Services does not render any investment advice. 

Regulation of the Participating Aflliates 

The activities of the foreign entities within the CAAM A1 Group are overseen by various 

regulatory bodies in the jurisdictions where such entities re~ide.~ CAAM A1 SAS is regulated in 

France by the AMF as a "sociCtC de gestion de portefeuilles," which is the equivalent of an 

investment adviser in the United States, with permitted activities analogous to those of US 

investment advisers. CAAM A1 SAS is regulated pursuant to the French Monetary and Financial 

Code, under provisions that are derived from European Union directives (those directives are 

also applicable to the United Kingdom regulatory regime which oversees the activities of CAAM 

AI, SAS LB). 

Asset management companies in France must be registered with the AMF and must 

comply with risk management rules, including capital adequacy requirements and risk 

diversification ratios, and implement internal control rules. The AMF also promulgates 

regulations applicable to asset management companies in areas such as insider trading and 

-'O It should be noted that CAAM AI, Inc.'s activities are limited to providing investment advisory services to 

and together with affiliates within the CAAM A1 Group. Because such affiliates are subject to significant 

regulation outside the United States, and the managers of the Funds themselves are subject to foreign 

regulation, we do not believe that foreign clients of the CAAM A1 Group have any expectation of 

protection under the Advisers Act. These clients generally rely on the protection afforded by the laws of 

foreign jurisdictions. Nor do we believe there is a basis for such clients having any expectation of such 

protection under the laws of the United States in the future. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 7 

market manipulation and has the power to investigate the activities of asset management 

companies. Other regulations applicable to asset management companies require periodic 

reporting, such as the reporting of trading of financial instruments to the AMF, as well as the 

publication of financial statements in accordance with accounting requirements that are specific 

to the relevant types of entities. 

CMM AI, SAS LB is regulated in the United Kingdom by the FSA, a statutory body 

established under the Financial Services and Markets Act 2000 to regulate financial services in 

the United Kingdom and to protect the rights of customers. By law, most financial services firms 

must be authorized by the FSA to do business in the United Kingdom. Firms, such as CMM 

AI, SAS LB, established in another European Economic Area country, may be authorized in the 

United Kingdom if they are regulated by their own country and have notified the FSA that they 

want to do business in the United Kingdom. Firms that are authorized must meet and continue to 

demonstrate set standards in areas such as training and competence, financial stability, personal 

account dealing, financial promotions and fair customer treatment. 

The FSA uses a risk-based approach to monitoring firms. Risks are assessed in terms of 

their impact and probability. Assessment and ongoing monitoring is coordinated through an 

FSA relationship manager, who carries out regular visits and risk assessments and determines a 

risk mitigation program proportionate to the risks identified. The FSA has centralized its 

supervision of all firms within CA Group in the United Kingdom within a single team in charge 

of the ongoing relationship between the FSA and CA Group's United Kingdom entities. 

Notification of material changes and periodic reporting to the FSA is done through the 

relationship manager. 

Where necessary, the FSA has the authority to investigate, discipline or prosecute any 

firm or individual who violates FSA rules or the provisions of the Financial Services and 

Markets Act 2000, working with other regulatory bodies and law enforcement in other countries 

as necessary. 

CAAM A1 Ltd. is exempt fiom registration by the Bermuda Monetary Authority but 

generally is subject to the regulation and supervision by the Minister of Finance of Bermuda 

pursuant to the provisions of The Companies Act 1981 as fiom time to time amended. CAAM 

A1 Ltd. must comply with laws and regulations in Bermuda and is subject to sanctions in the 

event of breaches of such laws and regulations, including liquidation of CAAM A1 Ltd. and the 

imposition of fines against directors and officers. The Minister of Finance may authorize 

investigations into the affairs of CAAM A1 Ltd. and based upon the results of such investigations 

may require CAAM A1 Ltd. to take such measures as the Minister of Finance may impose. 

The Bermuda mutual fund companies advised by CAAM A1 Ltd. are regulated under the 

Bermuda Monetary Authority Collective Investment Scheme Regulations 1998. These 

regulations require the appointment of an investment adviser that has been pre-approved by the 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 8 

Authority. CAAM A1 Ltd. has been formally approved to act as the investment adviser to each 

of the Bermuda mutual fund companies that it advises. 

CA AIPG Milan is regulated in Italy by the Bank of Italy. In connection therewith, CA 

AIPG Milan is required to make periodic filings with the Bank of Italy, must respond to requests 

for information and is subject to inspections. 

111. Discussion and Analysis 

Introduction- Request for No-Action Relief 

As discussed below, we believe that acting in good faith in the face of ambiguity, CAAM 

AI, Inc. would be required to register under the Advisers Act in the absence of the requested 

relief. We believe that the Staff should grant CAAM AI, Inc. the requested relief and not 

recommend enforcement action to the SEC if CAAM AI, Inc. does not register under the 

Advisers Act. We believe that under a conducts and effectsU analysis of potential registration, 

CAAM AI, Inc. is entitled to the requested relief because it only provides investment advice to 

three of its foreign affiliates which are themselves regulated by foreign regulatory authorities. 

We believe, however, that prior Staff guidance effectively requiring a US resident adviser to 

register under the Advisers Act despite the fact that such adviser only had foreign clients should 

not be applied to CAAM AI, Inc. We further believe that CAAM AI, Inc. should not be treated 

as an investment adviser to its affiliates' clients. We conclude by noting that an analysis of the 

relative burdens imposed on CAAM AI, Inc., if required to register as an investment adviser, 

justifies the requested relief. 

Given the limited nature of the activities performed by CAAM AI, Inc. in the United 

States and the fact that CAAM AI, Inc. currently does not advise US clients, CAAM AI, Inc. 

proposes that it be able to undertake the activities described herein with respect to foreign 

clientsu solely in accordance with applicable foreign law without being required thereby to 

register under the Advisers Act and without complying with the provisions of the Advisers Act 

so long as acts or omissions of CAAM AI, Inc. involve essentially no conduct or have no 

material effects in the United ~tates.~ 

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I I U.S. Securities and Exchange Commission, Division of Investment Management. Protecting Investors: A 

Half Century of Investment Company Regulation, May 1992, p. 221 -236. 

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12 CAAM AI, Inc. has three clients, all of which are foreign affiliates. Moreover, CAAM A1 Group has all 

foreign, non-US clients. Nonetheless, as discussed in this Section 111, CAAM AI, Inc. should not have to 

treat the clients of its affiliates as its own clients, because it does not provide advice that is specific to these 

clients, since only its affiliates have discretion over the assets of these clients, and CAAM AI, Inc., for all 

intents and purposes, has no contact with these clients. 

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13 CAAM AI, Inc. greatly appreciates and respects the Staffs concern regarding the United States being used 

as a haven to manufacture fraudulent schemes whose victims are foreign. However, this concern should 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 9 

Advisers Act Registration Requirement 

CAAM AI, Inc. makes the requested relief because it finds itself in an extremely 

ambiguous regulatory void and in a unique position. As discussed in Section I1 of this letter, 

CAAM AI, Inc. provides investment advisory services exclusively to three clients which are 

foreign affiliates within the CAAM A1 Group: CAAM A1 Ltd., CAAM A1 SAS and CA AIPG 

Milan. CAAM AI, Inc. believes that these activities constitute investment advice under the 

Advisers Act. Under Section 202(a)(ll) of the Advisers Act, an "investment adviser" is defined 

as any person who, for compensation, is engaged in the business of providing advice to others or 

issuing reports or analyses regarding securities. 

In Gim-Seong Seow, the Staff stated that even if a US resident adviser provides 

investment advisory services exclusively to foreign clients, it is still required to register under the 

Advisers ~ct.~ Based on the facts, as set forth previously, without the requested relief, CAAM 

AI, Inc. could be required to register under the Advisers Act, because it is a US resident adviser 

that provides investment advice on a continuous and regular basis to CAAM A1 Ltd., CAAM A1 

SAS and CA AIPG Milan. 

Furthermore, prior Staff positions as well as application of Section 208 of the Advisers 

Act, raise the question as to whether the Staff would look through CAAM A1 Ltd., CAAM A1 

SAS and CA AIPG Milan and take the position that such affiliates' clients also are those of 

CAAM AI, Inc. for the purpose of determining the number of CAAM AI, Inc.'s client^.^ 

We believe that CAAM AI, Inc. should not be considered to be the adviser of its 

affiliates' clients. The Staff previously has taken the position that where a sub-adviser provides 

advice to an investment adviser without consideration of the ultimate clients, only the investment 

adviser, and not the investment adviser's clients, is deemed to be a client of the sub-advi~er.~ 

CAAM AI, Inc. only provides CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan with 

general research findings on offshore funds while CAAM A1 Ltd., CAAM A1 SAS and CA 

not be present in CAAM AI, Inc.'s situation. .As described in footnote 10, foreign clients of CAAM A1 

Ltd., CAAM A1 SAS and CA AIPG Milan have no expectation of being protected by the regulation 

afforded by the United States. Rather, such clients reasonably can be expected to look toward the 

regulatory protections afforded by the countries in which both they and the regulated CAAM A1 Group 

affiliates are located. 

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14 Gim-Seong Seow, October 30, 1987. 

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15 Footnote 243 of Investment Advisers Act Release No. 2333 (December 2, 2004) provides in part: 

"Advisers may not circumvent [registration] by delegating the advisory function to 

subadvisers, including subadvisers that might not be identified in the fund's offering 

materials, or by establishing a "manager of managers" structure." 

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16 Copeland Financial Services, Inc., September 2 1, 1992. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 10 

AIPG Milan make the ultimate investment decisions on behalf of their clients. CAAM AI, Inc. 

has no discretion over the management of the affiliates' client assets. Consequently, CAAM AI, 

Inc. should not be subjected to the Advisers Act because it essentially only has three clients 

(CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan), all three of which are foreign affiliates 

and are regulated by their respective regulatory authorities in other countries. If the Staff took 

the position that it is necessary to count CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan's 

clients as CAAM AI, Inc.'s own as well, then the total number of clients would be above 

fourteen" (CAAM A1 Ltd., CAAM A1 SAS and CA AIPG Milan currently have 35 non-US 

Funds as clients). 

Notwithstanding the fact that CAAM AI, Inc. could be required to register under the 

Advisers Act for the reasons set out above, CAAM AI, Inc. requests assurance that the Staff 

would not recommend enforcement action by the SEC if CAAM AI, Inc. does not register under 

the Advisers Act because the requested relief is consistent with the Staffs historical position 

regarding the limitations on the extraterritorial reach of the Advisers ~ c and t the ~ fact that 

requiring that CAAM AI, Inc. register as an investment adviser under the Advisers Act would be 

unduly burdensome without a proportionate or commensurate regulatory benefit to any clients, 

whether US or foreign. 

Regulation Across Territorial Borders 

In numerous no-action lettersYB the Staff has set forth its policy regarding the application 

of the Advisers Act across territorial borders or when foreign clients are involved. In one such 

letter, The National Mutual Group, the Staff found that the following factors warranted a 

limitation of the Advisers Act as applied to an adviser of foreign clients: (i) the lack of US public 

policy interests served by applying the Advisers Act to wholly or predominantly foreign 

relationships and transactions; (ii) the significant regulatory burdens that would be imposed on 

the regulated entity; (iii) principles of international comity and greater interests of foreign 

governments in regulating those who conduct business from within their countries with their 

citizens and residents; (iv) the absence of any expectations by foreign clients that the provisions 

of the Advisers Act apply to their relationships with the registered entity; (v) the adverse effects 

that extraterritorial application of the Advisers Act would have on foreign competition and 

commerce; (vi) the fact that the conditions imposed by the Staff in granting relief address and 

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17 Section 203(b)(3) of the Advisers Act. 

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18 U.S. Securities and Exchange Commission, Division of Investment Management. Protecting Investors: A 

HalfCentuiy of Investment Company Regulation, May 1992,p. 221-236. 

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19 Royal Bank of Canada, June 3, 1998; ABN AMRO Bank, N V., July 1, 1997; Murray Johnstone Holdings 

Ltd., October 7, 1994; Merculy Asset Management. plc., April 16, 1993; The National Mutual Group, 

March 8, 1993; Uniao de Bancos de Brasileiros S.A., July 28, 1992; Richard Ellis, September 17, 198 1. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 11 

provide reasonable assurances for the satisfaction of regulatory concerns arising under the 

Advisers Act in respect of such foreign dealings.20 

An analysis of the The National Mutual Group factors weighs in favor of granting 

CAAM AI, Inc. the requested relief. The most critical factor is that foreign clients have no 

expectation that the provisions of the Advisers Act apply to their relationship with the CAAM A1 

Group. CAAM AI, Inc.'s activities are limited to providing advisory services to advisory 

affiliates within the CAAM A1 Group, and it has no direct investment advisory relationship with 

its affiliates' clients. These clients contract with and consider themselves to be clients of the 

CAAM A1 Group or, more specifically of the advisory affiliates with whom they have 

investment management agreements, not clients of CAAM AI, Inc. Because the other entities 

within the CAAM A1 Group are subject to oversight by applicable foreign regulators, these 

clients expect protection under these regulatory schemes, not the Advisers Act. 

Furthermore, this situation also merits relief because the United States would not have a 

significant regulatory interest in CAAM AI, Inc.'s activities involving foreign clients. The 

activities CAAM AI, Inc. undertakes in the United States are extremely limited and involve no 

US clients. This should be contrasted with previous letters that dealt with advisers who provided 

advice directly to US clients. CAAM AI, Inc.'s activities generally only involve direct contact 

with its direct clients, which are foreign affiliates. As a result, the United States does not have a 

significant regulatory interest in requiring that CAAM AI, Inc. register under the Advisers Act. 

Moreover, the regulators of other countries that regulate the investment advice provided 

by the other entities within the CAAM A1 Group have a much greater interest than the United 

States in regulating the investment advice because the foreign clients expect that such regulators 

are monitoring the activities of the CAAM A1 Group entities. As stated previously, those clients 

do not expect protection under the Advisers Act. 

Lastly, we believe that requiring that CAAM AI, Inc. register as an investment adviser 

under the Advisers Act would be unduly burdensome without a proportionate or commensurate 

regulatory benefit to any clients, whether US or foreign. Advisers Act Rules 204A-1 and 206(4)- 

7 significantly increase the rigorous regulation of registered investment advisers. However, 

CAAM AI, Inc. already is regulated by the CFTC and CAAM AI, Inc.'s affiliates are already 

regulated heavily by foreign governments. Requiring that CAAM AI, Inc. register such that it is 

subject to further regulation under the Advisers Act would be duplicative and burdensome with 

very little, if any, regulatory benefit. 

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20 The National Mutual Group at 26969. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 12 

Registration of US Resident Adviser with Only Foreign Clients 

Similarly, we do not believe that the Staffs finding in Gim-Seong Seow should be applied 

to the present situation because the concerns expressed in that letter are either answered or are 

not present in CAAM AI, Inc.'s circumstances. In Gim-Seong Seow, the Staff had to determine 

whether a US resident investment adviser providing services exclusively to foreign clients was 

required to register under the Advisers Act if the adviser used the foreign clients' funds to invest 

in the securities of US issuers. The Staff determined that such an adviser would be required to 

register under the Advisers Act and provided four policy reasons for its position. First, the Staff 

stated that it is common for a governmental entity to regulate the activities of people who are 

citizens of or residing within its territorial jurisdiction even though they may be carrying on 

business or providing services to people outside its territorial jurisdiction. Second, the Staff 

believed that it is reasonable for foreigners to expect that a person doing business in the United 

States will be subject to United States laws. Third, the Staff reasoned that not requiring resident 

advisers to exclusively foreign clients to register, would create a competitive disadvantage for 

other domestic advisers registered under the Adviser Act who have both United States and 

foreign clients and could create a disincentive to advisers to serve US clients. Finally, the Staff 

stated that, given the primarily antifraud purposes of the Advisers Act, and relevant case law 

against allowing the United States to be used as a base for manufacturing fraudulent security 

devices or schemes for export, even when they are peddled only to foreigners, registration of 

resident advisers who give advice only to foreigners seems warranted. 

An analysis of these policy reasons as applied to CAAM AI, Inc. shows that an 

unregistered CAAM AI, Inc. does not create the problems that those policy reasons address. As 

stated previously, CAAM AI, Inc. only provides investment advice to its affiliates and does not 

deal directly with any of its affiliates' clients. These clients contract with and consider 

themselves to be clients of the CAAM A1 Group, not clients of CAAM AI, Inc. Accordingly, 

they do not expect protection under the Advisers Act but rather of the regulators of the managers, 

whom they appointed as investment managers and with whom they have a management 

agreement. Similarly, because the other entities of the CAAM A1 Group that deal directly with 

such clients are regulated by foreign regulatory authorities, the concern that fraud may be 

manufactured within the United States and exported to the foreign clients is greatly reduced, if 

not eliminated. Likewise, given the limited activities of CAAM AI, Inc., CAAM AI, Inc. does 

not provide itself nor any member of CAAM A1 Group with any competitive advantage that 

arises out of CAAM AI, Inc.'s unregistered status. 

Most importantly, the case at hand can be distinguished from Gim-Seong Seow. GimSeong Seow provided the United States with a greater regulatory interest than does CAAM AI, 

Inc. because Gim-Seong Seow dealt with a US resident investment adviser that provided 

investment advice directly to foreign clients with absolutely no regulation of such activities if the 

investment adviser did not register under the Advisers Act. CAAM AI, Inc., on the other hand, 

only provides advice to its foreign affiliates, which are themselves regulated by the countries in 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 13 

which they reside. Accordingly, unlike the situation in Gim-Seong Seow, there would be no 

absence of governmental regulation in CAAM AI, Inc.'s situation. 

Furthermore, while unclear from the facts set forth in Gim-Seong Seow, it can be inferred 

that the adviser in Gim-Seong Seow had more than fourteen foreign clients andlor held itself out 

as an adviser, whereas CAAM AI, Inc. only has three direct clients: CAAM A1 Ltd., CAAM A1 

SAS and CA AIPG Milan. 

IV. Representations and Undertakings 

Based upon the analysis set forth above, we believe that our request for no-action relief is 

consistent with the SECYs historical position regarding the limitations on the extraterritorial reach 

of the Advisers ~ct." In connection with such request, CMM AI, Inc. hereby makes certain 

representations and warranties on behalf of itself and the Participating Affiliates (the 

"Undertakings"): 

1. CAAM AI, Inc. will only render investment advice to Participating Affiliates 

that provide investment advisory services that are subject to the regulatory regimes of 

other countries. 

2. Based on their advisory activities, the Participating Affiliates, if viewed 

independently, would not be required to register under the Advisers Act. 

3. If CAAM AI, Inc. provides investment advice to a Participating Affiliate which 

itself would be required to register under the Advisers Act, CAAM AI, Inc. will register 

under the Advisers Act and comply in all respects with all the requirements of the 

Advisers Act. 

V. Conclusion 

Given the Staffs historical position on the extraterritorial reach of the Advisers Act, the 

limited nature of the activities performed by CAAM AI, Inc. in the United States, and the fact 

that CAAM AI, Inc. only advises affiliated non-US clients which are foreign- regulated entities, 

CAAM AI, Inc. believes that the requested relief would provide equitable relief from the 

potentially redundant regulatory burdens to which CAAM AI, Inc. otherwise would be subject to 

without any detrimental affect on any clients or US regulatory interests. 

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2 1 U.S. Securities and Exchange Commission, Division of Investment Management. Protecting Investors: A 

HavCentuv of Investment Company Regulation, May 1992, p. 221-236. 
WINSTON & STRAWN LLP 

Office of Chief Counsel 

Securities and Exchange Commission 

July 1 1,2006 

Page 14 

For the reasons set forth above, we request assurances that the Staff would not 

recommend enforcement action to the SEC if CAAM AI, Inc. undertakes the activities described 

herein without registering under the Adviser's Act .22 

If you have any questions or seek additional information regarding this request, please 

contact the undersigned at 3 12-558-5804. 

Sincerely, 

(7 

~eslep. Nissen 

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22 While this letter addresses the issue of whether CAAM AI, Inc. is required to register under the Advisers 

Act, it goes without saying that if CAAM AI, Inc. is granted the requested relief, none of the Participating 

Affiliates would be required to register under the Advisers Act based on the facts and Undertakings 

described herein.