July 21, 2015

Re: Definition of the Term “Fiduciary” (RIN 1210-AB32); Best Interest Contract Exemption 

(ZRIN 1210-ZA25)

Dear Office of Regulations and Interpretation,

I am a Direct Investments industry professional who is writing to you today with respect to the 

Department’s proposed rule defining who is a “fiduciary” by reason of providing investment 

advice for a fee or other compensation (the “Conflict of Interest Rule”) and the related Best 

Interest Contract Exemption (the “BIC Exemption”). I appreciate the opportunity to comment on 

this important regulatory action. 

My primary concern relates to the Department’s definition of “Assets” in the BIC Exemption. 

The Department has requested comment on the proposed definition of Assets and has 

specifically asked that commenters who believe that additional investments should be included in 

the scope of the exemption provide the Department with information supporting their inclusion. 

Direct Investment products, such as non-listed Real Estate Investment Trusts (“REITs”), 

Business Development Companies (“BDCs”), energy and equipment leasing programs, and 

private equity offerings, are important investment vehicles for American investors trying to save 

for their retirement. None of these products have been addressed by the Department in the Rule 

or included in the BIC; this will have the impact of effectively making such investments 

unavailable to qualified IRA investors. I believe that direct investment products should be 

included as “Assets” within the “BIC” exemption either by the removal by the Department of a 

“legal list” of “Assets” or by the inclusion of direct investment products on the “legal list.”

Direct investment products are distributed by highly regulated broker-dealers, who must follow 

rules from the SEC, FINRA and state regulators. Furthermore, most direct investment products 

are subject to higher disclosure and investor qualification requirements than many other financial 

products. In addition, FINRA Rule 2310 imposes additional transparency requirements on 

broker-dealer distributed direct investment products.

Most importantly though, direct investments are not only a common investment for retail 

investors generally, but are also a common investment for IRAs. As of December 31, 2014,

investors held more than $84 billion of non-listed REIT and BDC shares in their accounts, 

according to DST Systems. In 2014 alone more than $16 billion was invested in non-listed 

REITs and over $5 billion invested in BDCs. For the year ended December 31, 2014, 

approximately 41% of the non-listed REIT investments were held by IRAs and approximately 

48% of the BDC investments were held by IRAs. There are almost 3 million retail accounts 

invested in BDCs and non-listed REITs alone. Of these retail accounts, 43% or over 1.2 million 

are IRAs. Non-listed REITs and BDCs serve an important purpose in portfolios because nonlisted BDCs and REITs generally do not correlate with S&P 500 returns, thus providing 

diversification. Finally, non-listed REITs and BDCs have favorable standard deviation rates, 

demonstrating that there is less volatility in their share price and performance over time, another 
positive attribute. There is no principled reason why an IRA investor may not choose to invest in 

non-listed REITs or BDCs, not to mention have the option to invest in other product not 

currently considered “Assets” such as private equity funds and oil and gas programs.

Additionally, as stated in its name, the TriLinc Global Impact Fund focuses on impact investing. 

Simply stated, impact investing is investing with the specific objective of achieving both a

competitive financial return and positive, measurable economic, social and/or environmental 

impact. Impact investing is an emerging asset class that has captured the attention of some of the 

most sophisticated money managers in the world, who understand the power of mobilizing 

private capital to help solve some of the world’s biggest social and economic challenges. JP 

Morgan Global Research reports that impact investing is expected to constitute 5% to 10% of 

investor portfolios within 10 years. Further, according to the U.S. State Department, this 

emerging class of investors is generating business opportunities that analysts estimate could 

reach between $500 billion and several trillion dollars over the next decade. IRA investors 

should not be precluded from participating in such an important new asset class that has the 

potential to benefit much of humanity.

For all the reasons I mention above, I urge the Department to revise the BIC Exemption in order 

to include Direct Investment Products within its scope, either by doing away with a list of 

specific Assets or by adding Direct Investment Products to that list. I appreciate your time and 

attention in ensuring that retirement investors are provided with the broadest array of investment 

options, while taking all possible measures to avoid conflicted advice.

Sincerely,

Gloria S. Nelund

Chairman & CEO

TriLinc Global Impact Fund

1230 Rosecrans Ave., Suite 605

Manhattan Beach, CA 90266