25408 Federal Register / Vol. 65, No. 84 / Monday, May 1, 2000 / Notices

24 15 U.S.C. 78mm(a)(1).

1 Investment Company Act Release Nos. 22324

(Nov. 6, 1996) (notice) and 22370 (Dec. 4, 1996)

(order).

proposed rule changes are necessary or

appropriate to further the Exchange

Act’s regulatory objectives during the

one-year period of the temporary

exemption. Access to the NASD’s

fundamentally important and core

services will be independently

maintained by the NASD and fully

subject to the Exchange Act’s regulatory

scheme, including the proposed rule

change requirements of Section 19(b).

Fair competition will be maintained in

the market to provide enhanced

software products to broker-dealers.

Under these circumstances, the

Commission believes at this point that

competitive forces can be relied upon to

produce software products at fair prices

that meet the needs of broker-dealers. In

sum, the Commission believes that FSI

will neither be unnecessarily hampered

in its competition to provide software

services to broker-dealers nor given an

unfair competitive advantage because of

its ownership by Nasdaq.

For the reasons discussed above, the

Commission finds that the temporary

conditional exemption requested by the

NASD is necessary or appropriate in the

public interest and is consistent with

the protection of investors.

It Is Therefore Ordered, pursuant to

Section 36(a)(1) of the Act,24 that the

NASD’s application for a temporary

conditional exemption (Form Type 34–

36 MR; File No. 79–9) is granted for a

period of one year until April 24, 2001.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–10725 Filed 4–28–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. IC–24402, 812–11650]

The Pacific Corporate Group Private

Equity Fund, et al., Notice of

Application

April 24, 2000.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for an

order under section 17(d) of the

Investment Company Act of 1940

(‘‘Act’’) and rule 17d–1 under the Act to

permit certain joint transactions.

SUMMARY OF APPLICATION: The Pacific

Corporate Group Private Equity Fund,

formerly known as The Alternative

Investment Fund (the ‘‘Fund’’), and

Pacific Corporate Group, Inc., formerly

known as Pacific Corporate Advisors,

Inc. (the ‘‘Adviser’’), seek to amend a

prior order (‘‘Prior Order’’) that permits

the Fund to co-invest with other

investment vehicles managed by the

Adviser or its affiliates and/or, under

certain circumstances, with the Adviser

or its affiliates. The amended order

(‘‘Amended Order’’) would revise

certain conditions of the Prior Order.

Applicants: The Fund and the Adviser.

FILING DATES: The application was filed

on June 9, 1999, and amended on

February 7, 2000. Applicants agree to

file an amendment during the notice

period, the substance of which is

reflected in this notice.

Hearing or Notification of Hearing: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicants with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

May 19, 2000, and should be

accompanied by proof of service on

applicants, in the form of an affidavit,

or, for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549–

0609. Applicants, c/o Brown & Wood

LLP, One World Trade Center, New

York, New York 10048.

FOR FURTHER INFORMATION CONTACT:

Paula L. Kashtan, Senior Counsel, at

(202) 942–0615, or Mary Kay Frech,

Branch Chief, at (202) 942–0564

(Division of Investment Management,

Office of Investment Company

Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch, 450 Fifth

Street, NW., Washington, DC 20549–

0102 (telephone (202) 942–8090).

Applicants’ Representations

1. The Fund is a closed-end

management investment company

registered under the Act. The Adviser

serves as investment adviser to the Fund

and is registered under the Investment

Advisers Act of 1940. The Fund invests

in private equity investments either

directly or indirectly through

underlying partnerships managed by an

adviser not affiliated with the Adviser.

2. On December 4, 1996, the SEC

issued the Prior Order to applicants

under section 6(c) of the Act exempting

applicants from section 12(d)(1)(A) of

the Act and pursuant to section 17(d) of

the Act and rule 17d–1 under the Act.1

The Prior Order permits the Fund and

Subsequent Funds, as defined in the

Prior Order (together with the Fund, the

‘‘Funds’’), to: (i) invest in unaffiliated

private investment companies exempt

from the definition of an investment

company by section 3(c)(1) of the Act;

and (ii) co-invest with Private Funds, as

defined in the Prior Order, managed by

the Adviser or its affiliates and/or,

under certain circumstances, with the

Adviser or its affiliates (‘‘CoInvestments’’).

3. Applicants state that, as a result of

amendments to section 3(c)(1) of the Act

that became effective in 1997, relief

from the provisions of section

12(d)(1)(A) of the Act granted in the

Prior Order is no longer required.

Accordingly, applicants request that

conditions 2 through 7 of the Prior

Order be deleted. Applicants represent

and understand that, except as

requested in the application, the

representation set forth in and the terms

and provisions of the Prior Order

remain unchanged.

Applicants’ Conditions

Applicants agree that the Amended

Order granting the requested relief shall

be subject to the following conditions:

1. A majority of the trustees of each

Fund (‘‘Trustees’’) will not be

‘‘interested persons,’’ as defined in

section 2(a)(19) of the Act, of the Fund

(‘‘Non-Interested Trustees’’).

2. No Co-Investments (except for

follow-on investments made pursuant to

condition 9 below) will be made

pursuant to the requested order with

respect to portfolio companies in which

the Adviser, any Fund or Private Fund,

or any of their affiliates has previously

acquired an interest.

3. The Trustees of each Fund

participating in a Co-Investment,

including a majority of the NonInterested Trustees, will approve CoInvestments in advance. To facilitate the

Trustees’ determinations, the Adviser

will provide the Trustees of a Fund with

periodic information listing all

investments made by the other Funds,

the Private Funds, and/or the Adviser or

its affiliate, as applicable, that would be

suitable for investment by a Fund.

4. (a) Before making a Co-Investment,

the Adviser will make a preliminary

Federal Register / Vol. 65, No. 84 / Monday, May 1, 2000 / Notices 25409

determination as to whether each

particular Co-Investment opportunity

meets the Fund’s investment objective,

policies, and restrictions. Co-Investment

opportunities will be offered to eligible

Funds and Private Funds in amounts

proportionate to capital available for

investment at the time of such

opportunities. The Adviser will

maintain written records of the factors

considered in any preliminary

determination.

(b) Following the making of the

determination referred to in (a),

information concerning the proposed

Co-Investment will be distributed to the

Trustees. Such information will be

presented in written form and will

include the name of each Fund and each

Private Fund that may participate and,

if permitted by condition 5 below, the

Adviser or its affiliate and the maximum

amount offered to each entity.

(c) Information regarding the

Adviser’s preliminary determinations

referred to in (a) will be reviewed by the

Trustees, including the Non-Interested

Trustees. The Trustees, including a

majority of the Non-Interested Trustees,

will make an independent decision as to

whether to participate and the extent of

participation in a Co-Investment based

on such factors as are deemed

appropriate under the circumstances. If

a majority of the Non-Interested

Trustees of the Fund determines that the

amount proposed to be invested by the

Fund is not sufficient to obtain an

investment position that they consider

appropriate under the circumstances,

the Fund will not participate in the CoInvestment. Similarly, the Fund will not

participate in a Co-Investment if a

majority of the Non-Interested Trustees

of the Fund determines that the amount

proposed to be invested is an amount in

excess of that which is determined to be

appropriate under the circumstances,

although the Non-Interested Trustees

may make a determination that the

Fund take other than their allotted

portion of an investment, pursuant to

condition 6 below. A Fund will only

make a Co-Investment if a majority of

the Non-Interested Trustees of the Fund

prior to making the Co-Investment

conclude, after consideration of all

information deemed relevant (including

the extent to which such participation is

on a basis different from or less

advantageous than that of other

participants), that the investments by

any Private Fund and/or the Adviser or

its affiliates, as applicable, would not

disadvantage the Fund in the making of

such investment, in maintaining its

investment position or in disposing of

such investment, and that participation

by the Fund would not be on a basis

different from or less advantageous than

that of such Private fund and/or the

Adviser or its affiliate, as applicable.

The Non-Interested Trustees will

maintain at the Fund’s office written

records of the factors considered in any

decision regarding the proposed CoInvestment.

(d) The Non-Interested Trustees will,

for purposes of reviewing each

recommendation of the Adviser, request

such additional information from the

Adviser as they deem necessary for the

exercise of their reasonable business

judgment, and they will also employ

such experts, including lawyers and

accountants, as they deem appropriate

for the reasonable exercise of this

oversight function.

5. The Trustees, including a majority

of the Non-Interested Trustees, will

make their own decision and have the

right to decide not to participate in a

particular Co-Investment. There will be

no consideration paid to the Adviser or

its affiliates, directly or indirectly,

including without limitation any type of

brokerage commission, in connection

with a Co-Investment. However, the

Adviser and its affiliates (i) may seek

reimbursement from direct investment

issuers for documented out-of-pocket

expenses approved by the Trustees

incurred by the Adviser or its affiliates

in connection with a direct investment,

(ii) will continue to receive advisory

and other fees from the Fund and the

Private Funds, and (iii) may participate

in any Co-Investment that is a direct

investment wherein the Adviser or its

affiliate is required by the placement

agent offering shares of the Fund or a

Subsequent Fund at the time of the

offering or by a Private Fund to commit

to co-invest in all direct investments

with such entity in the amount of 1%

of the investment of each such entity

participating in the offering.

6. The Fund will be entitled to

purchase a portion of each CoInvestment equal to the ratio of its

capital available for investment to the

capital available for investment of each

other Co-Investment participant

(including the interest of the Adviser or

its affiliate). Any Co-Investment

participant may determine not to take

its full allocation, as long as, in the case

of a Fund, a majority of the NonInterested Trustees determines that not

doing so would be in the best interest

of the Fund. All follow-on investments

(as defined in condition 9 below),

including the exercise of warrants or

other rights to purchase securities of the

issuer, will be allocated in the same

manner as initial Co-Investments. If a

Fund or Private Fund decides to

participate in a Co-Investment

opportunity to a lesser extent than its

full allocation, that entity’s portion may

be allocated to the other Co-Investment

participants based on their respective

capital available for investment. If one

or more Funds decline to participate in

a Co-Investment opportunity, the

remaining Funds and the Private Funds

shall have the right to pursue such

investment independently. Similarly, if

one or more Private Funds decline to

participate in a Co-Investment

opportunity, the remaining Private

Funds and the Funds shall have the

right to pursue such investment

independently.

7. Co-Investments in securities by a

Fund with any other Fund, any Private

Fund, and/or the Adviser or its affiliate,

as applicable, will consist of the same

class of securities, including the same

registration rights (if any), and other

rights related thereto, purchased at the

same unit consideration, and the

approval of such transactions, including

the determination of the terms of the

transactions by the Fund’s NonInterested Trustees, will be made in the

same time period.

8. Except as described below, the

Funds, the Private Funds and/or the

Adviser or its affiliate, as applicable,

will participate in the disposition of

securities held by them as CoInvestments on a proportionate basis at

the same time and on the same terms

and conditions (a ‘‘lock-step’’

disposition). For this purpose, a

distribution of securities to the partners

or shareholders of a Private Fund upon

dissolution shall not be deemed a

‘‘disposition’’ of securities. (However, to

the extent that a Private Fund

distributes securities in dissolution to

partners or shareholders who are

affiliates of the Funds, such partners or

shareholders will be bound by the lockstep disposition procedures established

herein.) If a Fund or a Private Fund

elects to dispose of a security purchased

in a Co-Investment with one or more

Funds or Private Funds, notice of the

proposed sale will be given to the NonInterested Trustees of the relevant

Fund(s) and to the relevant Private

Fund(s) at the earliest practical time.

The Funds, the Private Funds, and/or

the Adviser or its affiliate, as applicable,

will participate in the disposition of

such security on a lock-step basis,

unless the Non-Interested Trustees of a

Fund determine that the Fund should

not participate in such sale or not

participate on a lock-step basis. A Fund

need not participate on a lock-step basis

in the disposition of securities sold by

any other Fund or a Private Fund if the

Non-Interested Trustees of the Fund

find that the retention or sale, as the

25410 Federal Register / Vol. 65, No. 84 / Monday, May 1, 2000 / Notices

case may be, of the securities is fair to

the Fund and that the Fund’s

participation or choice not to participate

in the sale on a lock-step basis is not the

result of overreaching by any other

Fund, and Private Fund, and/or the

Adviser or its affiliate, as applicable. If

such a finding is not made, then the

relevant Fund must participate in such

sale on the basis of lock-step

disposition. Like a Fund, a Private Fund

may elect not to participate in a sale of

securities held as Co-Investments or not

to participate on a lock-step basis. If at

any time the result of a proposed

disposition of any portfolio security

held by a Fund or a Private Fund would

alter the proportionate holdings of each

class of securities held by the other

Funds, Private Funds, and/or the

Adviser or its affiliate, as applicable,

holding the Co-Investment, then the

Non-Interested Trustees of the Fund or

Funds involved must determine that

such a result is fair to the relevant

Fund(s) and is not the result of

overreaching by any other Fund, any

Private Fund, and/or the Adviser or its

affiliate, as applicable. The NonInterested Trustees will record in the

records of the Fund the basis for their

decisions as to whether to participate in

such sale.

9. If a Fund or a Private Fund

determines that it should make a

‘‘follow-on’’ investment (i.e., an

additional investment in a portfolio

company in which a Co-Investment has

been made pursuant to the order

requested hereby) in a particular

portfolio company whose securities are

held by it and one or more Funds, or to

exercise warrants or other rights to

purchase securities of such an issuer,

notice of such transaction will be

provided to such other Fund(s),

including its or their Non-Interested

Trustees at the earliest practical time.

The Adviser will formulate a

recommendation as to the proposed

participation by a Fund in a follow-on

investment and provide the

recommendation to the Non-Interested

Trustees of the Fund along with notice

of the total amount of the follow-on

investment. Each Fund’s Non-Interested

Trustees will make their own

determination with respect to follow-on

investments. Follow-on investments

will be entered into on the same basis

as initial Co-investments and will be

subject to the same approval procedure

as those required for initial CoInvestments. Assuming that the amount

of a follow-on investment available to a

Fund is not based on the amount of the

fund’s initial Co-Investment, the relative

amount of investment by each Fund

participating in a follow-on investment

will be based on a ratio derived by

comparing the capital available for

investment of each participating Fund,

Private Fund and/or the Adviser or its

affiliate, as applicable, with the total

amount of the available follow-on

investment. Each Fund will participate

in such investment if a majority of its

Non-Interested Trustees determines that

such action is in the best interest of the

Fund. The Non-Interested Trustees of

each Fund will record in their records

the recommendation of the Adviser and

their decision as to whether to engage in

a follow-on transaction with respect to

that portfolio company, as well as the

basis for such decision.

10. A decision by the Trustees of a

Fund (i) not to participate in a CoInvestment, (ii) to take less or more than

the Fund’s full pro rata allocation, or

(iii) not to sell, exchange, or otherwise

dispose of a Co-Investment in the same

manner and at the same time as another

Fund or a Private Fund shall include a

finding that such decision is fair and

reasonable to the Fund and not the

result of overreaching of the Fund or its

securityholders by the Private Funds

and/or the Adviser or its affiliate, as

applicable. The Non-Interested Trustees

of each Fund will be provided quarterly

for review all information concerning

Co-Investments made by the Funds, the

Private Funds, and/or the Adviser or its

affiliate, as applicable, including CoInvestments in which the Fund declined

to participate, so they may determine

whether all Co-Investments made

during the preceding quarter, including

those Co-Investments they declined,

complied with the conditions set forth

above. In addition, the Non-Interested

Trustees of each Fund will consider at

least annually the continuing

appropriateness of the standards

established for Co-Investments by the

Fund, including whether use of such

standards continues to be in the best

interest of the Fund and its

securityholders and does not involve

overreaching of the Fund or its

securityholders on the part of any party

concerned.

11. No Non-Interested Trustee of a

Fund will be an affiliated person of a

Private Fund or have had, at any time

since the beginning of the last two

completed fiscal years of any Private

Fund, a material business or

professional relationship with any

Private Fund.

12. A Fund, each Private Fund, and/

or the Adviser or its affiliate, as

applicable, will each bear its own

expenses associated with the

disposition of portfolio securities. The

expenses, if any, of distributing and

registering securities under the

Securities Act sold by the Fund, one or

more Private funds, and/or the Adviser

or its affiliate, as applicable, at the same

time will be shared by the Fund, the

selling Private Fund(s), and/or the

Adviser or its affiliate, as applicable, in

proportion to the relative amounts they

are selling.

13. Other than as provided in

condition 5, neither the Adviser nor any

of its affiliates (other than the Private

Funds pursuant to any order issued on

this application) nor any director of the

Fund will participate in a CoInvestment with the Fund unless a

separate exemptive order with respect to

such Co-Investment has been obtained.

For this purpose, the term ‘‘participate’’

shall not include either the existing

interests of the Adviser or its affiliates

in, or their management fee and expense

reimbursement arrangements with,

Private Funds, and the term

‘‘participate’’ shall also not include any

reimbursement from direct investment

issuers described in condition 5 above.

14. The Fund will maintain all

records required of it by the Act, and all

records referred to or required under

these conditions will be available for

inspection by the SEC. The Fund will

also maintain the records required by

section 57(f)(3) of the Act as if the Fund

was a business development company

and the Co-Investments were approved

by the Non-Interested Trustees under

section 57(f).

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–10730 Filed 4–28–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

Agency Meeting

Notice is hereby given, pursuant to

the provisions of the Government in the

Sunshine Act, Pub. L. 94–409, that the

Securities and Exchange Commission

will hold the following meeting during

the week of May 1, 2000.

A closed meeting will be held on

Wednesday, May 3, 2000 at 11 a.m.

Commissioners, Counsel to the

Commissioners, the Secretary to the

Commission, and recording secretaries

will attend the closed meeting. Certain

staff members who have an interest in

the matters may also be present.

The General Counsel of the

Commission, or his designee, has

certified that, in his opinion, one or

more of the exemptions set forth in 5