Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 / Notices 58691 

the list with any updated information 

for the duration of the investment and 

for a period of not less than six years 

thereafter, the first two years in an 

easily accessible place. 

9. Prior to reliance on the requested 

order and subsequently in connection 

with the approval of any investment 

advisory contract under section 15 of 

the Act, the Board of each Fund of 

Funds, including a majority of the 

Independent Trustees, will find that the 

advisory fees charged under the 

advisory contract are based on services 

provided that are in addition to, rather 

than duplicative of, services provided 

under the advisory contract(s) of any 

Underlying Fund in which the Fund of 

Funds may invest. Such finding, and the 

basis upon which the finding was made, 

will be recorded fully in the minute 

books of the appropriate Fund of Funds. 

10. The Funds of Funds’ Adviser will 

waive fees otherwise payable to it by a 

Fund of Funds in an amount at least 

equal to any compensation (including 

fees received pursuant to any plan 

adopted by an Unaffiliated Fund 

pursuant to rule 12b–1 under the Act) 

received from an Unaffiliated 

Underlying Fund by the Funds of 

Funds’ Adviser, or an affiliated person 

of the Fund of Funds’ Adviser, other 

than any advisory fees paid to the Fund 

of Funds’ Adviser or its affiliated person 

by the Unaffiliated Fund, in connection 

with the investment by the Fund of 

Funds in the Unaffiliated Underlying 

Fund. Any Fund of Funds’ Sub-Adviser 

will waive fees otherwise payable to the 

Fund of Funds’ Sub-Adviser, directly or 

indirectly, by the Fund of Funds in an 

amount at least equal to any 

compensation received from an 

Unaffiliated Underlying Fund by the 

Fund of Funds’ Sub-Adviser, or an 

affiliated person of the Fund of Funds’ 

Sub-Adviser, other than any advisory 

fees paid to the Fund of Funds’ SubAdviser or its affiliated person by an 

Unaffiliated Fund, in connection with 

the investment by the Fund of Funds in 

the Unaffiliated Underlying Fund made 

at the direction of the Fund of Funds’ 

Sub-Adviser. In the event that the Fund 

of Funds’ Sub-Adviser waives fees, the 

benefit of the waiver will be passed 

through to the Fund of Funds. 

11. With respect to Registered 

Separate Accounts that invest in a Fund 

of Funds, no sales load will be charged 

at the Fund of Funds level or at the 

Underlying Fund level. Other sales 

charges and service fees, as defined in 

NASD Conduct Rule 2830, if any, will 

be charged at the Fund of Funds level 

or at the Underlying Fund level, not 

both. With respect to other investments 

in a Fund of Funds, any sales charges 

and/or service fees charged with respect 

to shares of a Fund of Funds will not 

exceed the limits applicable to funds of 

funds set forth in NASD Conduct Rule 

2830. 

12. No Underlying Fund will acquire 

securities of any other investment 

company or company relying on section 

3(c)(1) or 3(c)(7) of the Act in excess of 

the limits contained in section 

12(d)(1)(A) of the Act, except to the 

extent that such Underlying Fund: (a) 

Receives securities of another 

investment company as a dividend or as 

a result of a plan of reorganization of a 

company (other than a plan devised for 

the purpose of evading section 12(d)(1) 

of the Act); or (b) acquires (or is deemed 

to have acquired) securities of another 

investment company pursuant to 

exemptive relief from the Commission 

permitting such Underlying Fund to: (i) 

Acquire securities of one or more 

investment companies for short-term 

cash management purposes, or (ii) 

engage in interfund borrowing and 

lending transactions. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23691 Filed 10–6–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. IC–28431; 812–13540] 

Eaton Vance Floating-Rate Income 

Trust, et al.; Notice of Application 

October 2, 2008. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of application for an 

order under section 6(c) of the 

Investment Company Act of 1940 

(‘‘Act’’) for an exemption from sections 

18(a)(1)(A) and (B) of the Act. 

APPLICANTS: Eaton Vance Floating-Rate 

Income Trust, Eaton Vance Senior 

Floating-Rate Trust, Eaton Vance Senior 

Income Trust, Eaton Vance Credit 

Opportunities Fund, and Eaton Vance 

Limited Duration Income Fund (each, a 

‘‘Fund’’ and collectively, ‘‘Funds’’). 

SUMMARY OF APPLICATION: Applicants 

request an order (‘‘Order’’) granting an 

exemption from sections 18(a)(1)(A) and 

(B) of the Act for a two-year period 

immediately following the date of the 

Order. The Order would permit each 

Fund to issue debt securities subject to 

asset coverage of 200% that would be 

used to refinance all of the Fund’s 

issued and outstanding auction 

preferred shares (‘‘APS Shares’’). The 

Order also would permit each Fund to 

declare dividends or any other 

distributions on, or purchase, capital 

stock during the term of the Order, 

provided that any class of senior 

securities representing indebtedness has 

asset coverage of at least 200% after 

deducting the amount of such 

transaction. 

FILING DATES: The application was filed 

on June 10, 2008, and amended on July 

2, 2008, July 29, 2008, and September 2, 

2008. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the application will be 

issued unless the Commission orders a 

hearing. Interested persons may request 

a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on October 22, 2008, 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 

Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1090. 

Applicants: c/o Frederick S. Marius, 

Chief Legal Officer, Eaton Vance 

Management, 255 State Street, Boston, 

MA 02109. 

FOR FURTHER INFORMATION CONTACT: 

Courtney S. Thornton, Senior Counsel, 

at (202) 551–6812, or Janet M. 

Grossnickle, Assistant Director, at (202) 

942–6821 (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 Room, 100 F Street, 

NE., Washington, DC 20549–1520 (tel. 

202–551–5850). 

Applicants’ Representations 

1. Each of the Funds is organized as 

a Massachusetts business trust and is a 

closed-end management investment 

company registered under the Act. Each 

Fund is advised by Eaton Vance 

Management (‘‘Eaton Vance’’) and has 

issued and outstanding a class of 

common shares and a class of one or 

more series of APS Shares. 

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58692 Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 / Notices 

1Applicants note that the cost of the replacement 

leverage is expected, over time, to be lower than the 

total cost of APS Shares based on the Maximum 

Rates applicable to the APS Shares of those Funds. 

2Eaton Vance and its affiliates, including the 

Funds, have recently obtained no-action relief from 

the Commission staff in connection with Liquidity 

Protected Preferred Shares (‘‘LPP Shares’’), a new 

type of preferred stock that the Funds potentially 

would issue to supplement or replace the existing 

APS Shares. See Eaton Vance Management, SEC 

No-Action Letter (June 13, 2008). 

3Section 18(h) of the Act defines asset coverage 

of a senior security representing indebtedness of an 

issuer as the ratio which the value of the total assets 

of the issuer, less all liabilities and indebtedness 

not represented by senior securities, bears to the 

aggregate amount of senior securities representing 

indebtedness of the issuer. The section defines asset 

coverage of the preferred stock of an issuer as the 

ratio which the value of the total assets of the 

issuer, less all liabilities and indebtedness not 

represented by senior securities, bears to the 

aggregate amount of senior securities representing 

indebtedness of the issuer plus the amount the class 

of senior security would be entitled to on 

involuntary liquidation. 

2. Applicants state that the Funds 

issued their outstanding APS Shares for 

purposes of investment leverage to 

augment the amount of investment 

capital available for use in the pursuit 

of their investment objectives. 

Applicants state that, through the use of 

leverage, the Funds seek to enhance the 

investment return available to the 

holders of their common shares by 

earning a rate of portfolio return (which 

includes the return obtained from 

securities purchased from the proceeds 

of APS Share offerings) that exceeds the 

dividend rate that the Funds pay to 

holders of the APS Shares. Applicants 

represent that APS shareholders are 

entitled to receive a stated liquidation 

preference amount of $25,000 per share 

(plus any accumulated but unpaid 

dividends) in any liquidation, 

dissolution, or winding up of the 

relevant Fund before any distribution or 

payment to holders of the Fund’s 

common shares. They state that 

dividends declared and payable on APS 

Shares have a similar priority over 

dividends declared and payable on the 

Funds’ common shares. In addition, 

applicants state that APS Shares are 

‘‘perpetual’’ securities and are not 

subject to mandatory redemption by a 

Fund (provided certain asset coverage 

tests are met). Further, applicants state 

that APS Shares are redeemable at each 

Fund’s option. 

3. Applicants state that prior to 

February 2008, dividend rates on the 

APS Shares for each dividend period 

were set at the market clearing rate 

determined through an auction process 

that brought together bidders, who 

sought to buy APS Shares, and holders 

of APS Shares, who sought to sell their 

APS Shares. Applicants explain that 

their by-laws provide that if an auction 

fails to clear (because of an imbalance 

of sell orders over bids), the dividend 

payment rate over the next dividend 

period is set at a specified maximum 

applicable rate (the ‘‘Maximum Rate’’) 

determined by reference to a short-term 

market interest rate (such as LIBOR or 

a commercial paper rate). Applicants 

state that an unsuccessful auction is not 

a default; the relevant Applicant 

continues to pay dividends to all 

holders of APS Shares, but at the 

specified Maximum Rate rather than a 

market clearing rate. 

4. Applicants state that if investors 

did not purchase all of the APS Shares 

tendered for sale at an auction, dealers 

historically would enter into the auction 

and purchase any excess shares to 

prevent the auction from failing. 

Applicants represent that this auction 

mechanism generally provided readily 

available liquidity to holders of APS 

Shares for almost twenty years. 

Applicants believe that many investors 

invested short-term cash balances in 

APS Shares believing they were safe 

short-term investments and, in many 

cases, the equivalent of cash. 

5. Applicants state that in February 

2008, the financial institutions that 

historically provided ‘‘back stop’’ 

liquidity to APS Share auctions stopped 

participating in them and the auctions 

began to fail. Applicants state that 

beginning on February 13, 2008, all 

closed-end funds advised by Eaton 

Vance that had outstanding APS Shares 

(including the Funds) experienced 

auction failures due to an imbalance 

between buy and sell orders. Applicants 

also state that there is no established 

secondary market that would provide 

holders of APS Shares with the 

liquidation preference of $25,000 per 

share. Applicants state that four of the 

five Funds to date have redeemed 

approximately two-thirds of their APS 

Shares with borrowings from a 

commercial paper conduit facility, but 

have been prohibited from redeeming 

their remaining APS Shares because, 

among other reasons, they would not 

have the 300% asset coverage required 

by section 18(a)(1) of the Act after a full 

redemption of the APS Shares. As a 

result, applicants state that there is 

currently no reliable mechanism for 

holders of APS Shares to obtain 

liquidity, and believe that, industrywide, the current lack of liquidity is 

causing distress for a substantial 

number of APS shareholders and 

creating severe hardship for many 

investors. 

6. Applicants seek relief for a period 

of two years to facilitate temporary 

borrowings by the Funds that would 

enhance their ability to provide a 

liquidity solution to the holders of their 

APS Shares in the near term 1 while 

they seek a more permanent form of 

replacement leverage.2 Because of the 

limited availability of debt financing in 

the current, severely constrained capital 

markets, the applicants believe that the 

negotiation, execution and closing of a 

borrowing transaction to replace the 

leverage currently represented by the 

APS Shares, if it can be effected, might 

take several months following the 

issuance of the Order. Once the debt 

incurred in replacement of the APS 

Shares is in place, it is uncertain 

whether and when the applicants will 

be able to issue LPP Shares to replace 

the debt, or how quickly the securities 

and capital markets will return to 

conditions that would enable the 

applicants to achieve compliance with 

the asset coverage requirements that 

would apply in the absence of the Order 

through some other means. In light of 

these factors, and given the continuing 

unsettled state of the securities and 

capital markets, which makes it 

impossible to establish a precise 

schedule for consummating capital 

markets transactions, the applicants 

believe that a two-year exemption 

period is reasonable and appropriate. 

Each Fund’s refinancing of APS Shares 

would be subject to the Fund obtaining 

any necessary approval of changes to 

the Fund’s fundamental investment 

policies and approval of the refinancing 

arrangements by the Fund’s board of 

trustees (‘‘Board’’). 

Applicants’ Legal Analysis 

1. Section 18(a)(1)(A) of the Act 

provides that it is unlawful for any 

registered closed-end investment 

company to issue any class of senior 

security representing indebtedness, or to 

sell such security of which it is the 

issuer, unless the class of senior security 

will have an asset coverage of at least 

300% immediately after issuance or 

sale. Section 18(a)(2)(A) of the Act 

provides that it is unlawful for any 

registered closed-end investment 

company to issue any class of senior 

security that is a stock, or to sell any 

such security of which it is the issuer, 

unless the class of senior security will 

have an asset coverage of at least 200% 

immediately after such issuance or 

sale.3

2. Section 18(a)(1)(B) prohibits a 

closed-end fund from declaring a 

dividend or other distribution on, or 

purchasing, its own capital stock unless 

its outstanding indebtedness will have 

an asset coverage of at least 300% 

immediately after deducting the amount 

of such dividend, distribution or 

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Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 / Notices 58693 

4An exception is made for the declaration of a 

dividend on a class of preferred stock if the senior 

security representing indebtedness has an asset 

coverage of at least 200% at the time of declaration 

after deduction of the amount of such dividend. See 

section 18(a)(1)(B) of the Act. 

5See supra note 2. 

6Applicants state that the bulk of each Fund’s 

portfolio is in floating rate senior secured loans. 

Applicants believe that it is difficult to sell such 

loans at par value in the current market because of 

market makers’ own impaired capital positions. 

Applicants expect, however, that the loans 

generally will be repaid in full as they come due. 

Applicants thus believe it would be 

disadvantageous to sell the loans at less than par 

into the current market. 

7Applicants acknowledge that managing any 

portfolio that relies on borrowing for leverage 

entails the risk that, when the borrowing matures 

and must be repaid or refinanced, an economically 

attractive form of replacement leverage may not be 

available in the capital markets. For that reason, any 

portfolio that relies on borrowing for leverage is 

subject to the risk that it may have to deleverage, 

which could be disadvantageous to the portfolio’s 

common shareholders. Applicants therefore state 

that they regard leveraging through borrowing as 

potentially a temporary, interim step, with the 

issuance of new preferred stock as a possible 

longer-term replacement source of portfolio 

leverage, such as LPP Shares. 

purchase price.4 Section 18(a)(2)(B) 

prohibits a closed-end fund from 

declaring a dividend or other 

distribution on, or purchasing, its own 

common stock unless its outstanding 

preferred stock will have an asset 

coverage of at least 200% immediately 

after deducting the amount of such 

dividend, distribution or purchase 

price. 

3. Section 6(c) of the Act provides, in 

relevant part, that the Commission, by 

order upon application, may 

conditionally or unconditionally 

exempt any person, security, or 

transaction from any provision of the 

Act if and to the extent necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. 

4. Applicants request that the 

Commission issue an Order under 

section 6(c) of the Act to exempt each 

Fund from the 300% asset coverage 

requirements set forth in sections 

18(a)(1)(A) and (B) of the Act. 

Specifically, the Funds seek relief from 

the section 18 asset coverage 

requirements for senior securities 

representing indebtedness for a period 

not to exceed two years from the date 

on which the requested Order is issued 

(the ‘‘Exemption Period’’) to permit the 

Funds to refinance any outstanding APS 

Shares issued prior to February 1, 2008 

with debt so long as they have 200% 

asset coverage, rather than the 300% 

asset coverage that would ordinarily 

apply under section 18 to senior 

securities representing indebtedness, (a) 

when they incur that debt, and (b) when 

they declare dividends or any other 

distributions on, or purchase, their 

capital stock, after deduction of the 

amount of such dividend, distribution 

or purchase price. Applicants state that, 

except as permitted under the requested 

Order, if issued, the Funds would meet 

all of the asset coverage requirements of 

section 18(a) of the Act. In addition, 

applicants state that each Fund that 

borrows in reliance on the Order will 

either pay down or refinance the debt 

within the Exemption Period so that the 

Fund would, at the expiration of the 

Exemption Period and thereafter, 

comply with the applicable asset 

coverage requirements (200% for equity 

or 300% for debt) under section 18 of 

the Act. 

5. Applicants state that section 18 

reflects congressional concerns 

regarding preferential treatment for 

certain classes of shareholders, complex 

capital structures, and the use of 

excessive leverage. Applicants submit 

that another concern was that senior 

securities gave the misleading 

impression of safety from risk. 

Applicants believe that the request for 

temporary relief is necessary, 

appropriate and in the public interest 

and that such relief is consistent with 

the protection of investors and the 

purposes intended by the policy and 

provisions of section 18. 

6. Applicants note that the illiquidity 

of APS Shares is a unique, exigent 

situation that is posing urgent, and in 

some cases devastating, hardships on 

APS shareholders. Applicants represent 

that the proposed replacement of the 

APS Shares with debt would provide 

liquidity for the Funds’ APS 

shareholders while the Funds continue 

their efforts to obtain a more permanent 

form of financing (such as through the 

issuance of LPP Shares) that fully 

complies with the asset coverage 

requirements of section 18.5

7. Applicants state that the requested 

Order would permit the Funds to 

continue to provide their common 

shareholders with the enhanced returns 

that leverage may provide. Applicants 

also represent that the Order would help 

avoid the potential harm to common 

shareholders that could result if the 

Funds were to deleverage their 

portfolios in the current difficult market 

environment 6 or that could result if a 

reduction in investment return reduced 

the market price of common shares. 

8. Applicants believe that the interests 

of both classes of the Funds’ current 

investors would be well served by the 

requested order—the APS shareholders 

because they would achieve the 

liquidity that the market currently 

cannot provide (as well as full recovery 

of the liquidation value of their shares) 

and the common shareholders because 

the cost of the new form of leverage 

would, over time, be lower than that of 

the total cost of the APS Shares based 

on their Maximum Rates and the 

adverse consequences of deleveraging 

would be avoided. 

9. Applicants represent that the 

proposed borrowing would be obtained 

from banks, insurance companies or 

qualified institutional buyers (as 

defined in Rule 144(a)(1) under the 

Securities Act of 1933) who would be 

capable of assessing the risk associated 

with the transaction. Applicants also 

state that, to the extent the Act’s asset 

coverage requirements were aimed at 

limiting leverage because of its potential 

to magnify losses as well as gains, they 

believe that the proposal would not 

unduly increase the speculative nature 

of the Funds’ common shares because 

the relief is temporary and the Funds 

would be no more highly leveraged if 

they replace the existing APS Shares 

with borrowing.7 Applicants also state 

that the proposed liquidity solution 

would not make the Funds’ capital 

structure more complex, opaque, or 

hard to understand or result in 

pyramiding or inequitable distribution 

of control. 

10. Applicants state that the current 

state of the credit markets, which has 

affected the APS Shares, is an historic 

event of unusual severity, which 

requires a creative and flexible response 

on the part of both the public and 

private sectors. Applicants believe that 

these issues have created an urgent need 

for limited, quick, thoughtful and 

responsive solutions. Applicants believe 

that the request meets the standards for 

exemption under section 6(c) of the Act. 

Applicants’ Conditions 

Applicants agree that any order 

granting the requested relief shall be 

subject to the following conditions: 

1. Each Fund that borrows subject to 

200% asset coverage under the order 

will do so only if such Fund’s Board, 

including a majority of the trustees who 

are not ‘‘interested persons’’ (as defined 

in section 2(a)(19) of the Act) 

(‘‘Independent Trustees’’), shall have 

determined that such borrowing is in 

the best interests of such Fund, its 

common shareholders, and its APS 

shareholders. Each Fund shall make and 

preserve for a period of not less than six 

years from the date of such 

determination, the first two years in an 

mstockstill on PROD1PC66 with NOTICES

58694 Federal Register / Vol. 73, No. 195 / Tuesday, October 7, 2008 / Notices 

1A ‘‘carried interest’’ is an allocation to the 

Manager based on net gains in addition to the 

amount allocable to such entity in proportion to its 

capital contributions. A Manager that is registered 

as an investment adviser under the Advisers Act 

may charge a carried interest only if permitted by 

rule 205–3 under the Advisers Act. Any carried 

interest paid to a Manager that is not registered 

under the Advisers Act will comply with section 

easily accessible place, minutes 

specifically describing the deliberations 

by the Board and the information and 

documents supporting those 

deliberations, the factors considered by 

the Board in connection with such 

determination, and the basis of such 

determination. 

2. Upon expiration of the Exemption 

Period, each Fund will have asset 

coverage of at least 300% for each class 

of senior security representing 

indebtedness. 

3. The Board of any Fund that has 

borrowed in reliance on the order shall 

receive and review, no less frequently 

than quarterly during the Exemption 

Period, detailed progress reports 

prepared by management (or other 

parties selected by the Independent 

Trustees) regarding and assessing the 

efforts that the applicant has 

undertaken, and the progress that the 

applicant has made, towards achieving 

compliance with the appropriate asset 

coverage requirements under section 18 

by the expiration of the Exemption 

Period. The Board, including a majority 

of the Independent Trustees, will make 

such adjustments as it deems necessary 

or appropriate to ensure that the 

applicant comes into compliance with 

section 18 of the Act within a 

reasonable period of time, not to exceed 

the expiration of the Exemption Period. 

Each Fund will make and preserve 

minutes describing these reports and the 

Board’s review, including copies of such 

reports and all other information 

provided to or relied upon by the Board, 

for a period of not less than six years 

from the date of such determination, the 

first two years in an easily accessible 

place. 

By the Commission. 

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–23672 Filed 10–6–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

28428; 813–00355] 

HLHZ Investments II, LLC and 

Houlihan, Lokey, Howard & Zukin, Inc.; 

Notice of Application 

September 30, 2008. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application for an 

order under sections 6(b) and 6(e) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) granting an exemption from all 

provisions of the Act, except section 9 

and sections 36 through 53, and the 

rules and regulations under the Act. 

With respect to sections 17 and 30 of the 

Act, and the rules and regulations 

thereunder, and rule 38a-1 under the 

Act, the exemption is limited as set 

forth in the application. 

Summary of Application: Applicants 

request an order to exempt certain 

limited liability companies and other 

investment vehicles established 

primarily for the benefit of eligible 

employees of Houlihan, Lokey, Howard 

& Zukin, Inc. (‘‘HLHZ’’) and its affiliates 

from certain provisions of the Act. Each 

limited liability company or other 

investment vehicle will be an 

‘‘employees’ securities company’’ 

within the meaning of section 2(a)(13) of 

the Act. 

Applicants: HLHZ Investments II, LLC 

(the ‘‘Initial Fund’’) and HLHZ. 

Filing Dates: The application was 

filed on August 26, 2004 and amended 

on November 17, 2004, March 14, 2008, 

and June 20, 2008. Applicants have 

agreed 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 Commission orders a 

hearing. Interested persons may request 

a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on October 27, 2008, 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 

Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street, 

NE., Washington, DC 20549–1090; 

Applicants, 1930 Century Park West, 

Los Angeles, CA 90067–6802. 

FOR FURTHER INFORMATION CONTACT: 

Laura J. Riegel, Senior Counsel, at (202) 

551–6873 or Julia Kim Gilmer, Branch 

Chief, at (202) 551–6821 (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 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549–1520 (telephone (202) 551–5850). 

Applicants’ Representations 

1. HLHZ is an investment banking 

firm organized under the laws of the 

State of California. HLHZ provides a 

range of investment banking services, 

including mergers and acquisitions, 

financing, financial opinions and 

advisory services and financial 

restructuring. HLHZ and its ‘‘affiliates,’’ 

as defined in rule 12b–2 under the 

Securities Exchange Act of 1934 (the 

‘‘1934 Act’’), are referred to collectively 

as ‘‘HLHZ Group’’ and each entity 

within HLHZ Group is referred to 

individually as a ‘‘HLHZ Group entity.’’ 

2. The Initial Fund is a California 

limited liability company. HLHZ Group 

may offer in the future other investment 

vehicles identical in all material 

respects to the Initial Fund (other than 

investment objectives and strategies and 

form of organization) (together with the 

Initial Fund, the ‘‘Funds’’). Each Fund 

will be a limited liability company or 

other investment vehicle formed as an 

‘‘employees’ security company’’ within 

the meaning of section 2(a)(13) of the 

Act. Each Fund will operate as a nondiversified, closed-end management 

company. The Funds have been or will 

be established primarily for key 

employees of the HLHZ Group as part 

of a program designed to create capital 

building opportunities that are 

competitive with those at other 

investment banking firms and to 

facilitate its recruitment of high caliber 

professionals. 

3. Each Fund will have a managing 

member or general partner (‘‘Manager’’) 

that is an HLHZ Group entity and that 

will manage, operate, and control such 

Fund. The Manager will be registered as 

an investment adviser under the 

Investment Advisers Act of 1940 (the 

‘‘Advisers Act’’) if required by 

applicable law. HLHZ, the Manager of 

the Initial Fund, is exempt from 

registration as an investment adviser 

under the Advisers Act. The Manager 

will be authorized to delegate 

investment management responsibility 

to a HLHZ Group entity or a committee 

of HLHZ Group employees. The 

ultimate responsibility for the Funds’ 

investments will remain with the 

Manager. The Manager may be entitled 

to receive compensation or a 

performance-based fee (a ‘‘carried 

interest’’).1

mstockstill on PROD1PC66 with NOTICES