Document ID: SEC-2020-2087-0001
Agency: sec
Document Type: Notice
Title: Application: Signature PE Fund, LLC and McDermott Will and Emery LLP
Posted Date: 2020-12-29T05:00Z

[Federal Register Volume 85, Number 249 (Tuesday, December 29, 2020)]
[Notices]
[Pages 85773-85778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28642]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 34145; 813-00395]

Signature PE Fund, LLC and McDermott Will & Emery LLP

December 21, 2020
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

-----------------------------------------------------------------------

    Notice of 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 sections 9, 17, 30, and 36 
through 53, and the rules and regulations under the Act (the ``Rules 
and Regulations''). With respect to sections 17(a), (d), (f), (g) and 
(j) of the Act, sections 30(a), (b), (e), and (h) of the Act and the 
Rules and Regulations and rule 38a-1 under the Act, applicants request 
a limited exemption as set forth in the application.

Summary of Application: Applicants request an order to exempt certain 
limited liability companies, partnerships, trusts, corporations or 
other entities (``Investment Funds'') formed for the benefit of 
eligible employees of McDermott Will & Emery LLC and its affiliates 
from certain provisions of the Act. Each Investment Fund will be an 
``employees' securities company'' within the meaning of section 
2(a)(13) of the Act.

Applicants: Signature PE Fund, LLC (the ``Initial Fund'') and McDermott 
Will & Emery LLP.

Filing Dates: The application was filed on February 26, 2019 and 
amended on August 19, 2019, July 21, 2020 and December 1, 2020.

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 emailing the Commission's Secretary at 
Secretarys-Office@sec.gov and serving applicants with a copy of the 
request by email. Hearing requests should be received by the Commission 
by 5:30 p.m. on January 15, 2021, and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by emailing the 
Commission's Secretary at Secretarys-Office@sec.gov.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission: 
Secretarys-Office@sec.gov. Applicants: McDermott Will & Emery LLP: 
elaurenson@mwe.com.

FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel, 
at (202) 551-6990, or Trace W. Rakestraw, Branch Chief, at (202) 551-
6825 (Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. McDermott Will & Emery LLP is a law firm organized as an 
Illinois limited liability partnership (together with any 
``affiliates'' as defined in rule 12b-2 under the Securities Exchange 
Act of 1934 (the ``Exchange Act'') of McDermott Will & Emery LLP that 
are organized to practice law, any successor entity of McDermott Will & 
Emery LLP or its affiliates or any entity that results from a 
reorganization of McDermott

[[Page 85774]]

Will & Emery LLP or its affiliates into a different type of entity or 
into an entity organized under the laws of another jurisdiction (the 
``Company'')). McDermott Will & Emery LLP is an international law firm 
that is owned exclusively by its capital partners.
    2. The Initial Fund is a Delaware limited liability company formed 
pursuant to a limited liability agreement. The applicants may in the 
future offer subsequent pooled investment vehicles substantially 
similar in all material respects (other than form of organization, 
investment objective and strategy, and other differences described in 
the application) to Eligible Investors (as defined below) (the 
``Subsequent Funds'' and, together with the Initial Fund included in 
the term ``Investment Funds''). The applicants anticipate that each 
Subsequent Fund also will be structured as a limited liability company 
although a Subsequent Fund could be structured as a domestic or 
offshore general partnership, limited partnership, trust, corporation, 
or other form of business entity. The organizational documents for the 
Investment Funds are the ``Investment Fund Agreements.'' An Investment 
Fund may include a single vehicle designed to issue interests in series 
or having similar features to enable a single Investment Fund to 
function as if it were several successive Investment Funds for ease of 
administration. Each Investment Fund will be an employees' securities 
company within the meaning of section 2(a)(13) of the Act.
    3. The Initial Fund has been established to enable certain Eligible 
Investors to participate in certain investment opportunities that come 
to the attention of the Company. These opportunities may include 
investments in operating businesses or real estate, separate accounts 
with registered or unregistered investment advisers, investments in 
pooled investment vehicles such as registered investment companies and 
investment companies exempt from registration under the Act, commodity 
pools, co-investments in operating entities and other investments (each 
particular investment being referred to herein as an ``Investment''). 
Applicants submit that a substantial community of interest exists among 
the Company and the members of the Investment Funds (``Members''). The 
Company will ``control'' each Investment Fund within the meaning of 
section 2(a)(9) of the Act.
    4. Interests in an Investment Fund (``Interests'') will be offered 
and sold in reliance upon the exemption from registration under section 
4(2) of the Securities Act of 1933 (the ``Securities Act'') or pursuant 
to Regulation D under the Securities Act, or outside the United States 
in a transaction exempt under Regulation S under the Securities Act. 
Interests in any Investment Fund (other than short-term paper) will 
offered solely to the Company or Eligible Investors. ``Eligible 
Investors'' means persons who at the time of investment are (a) 
partners of the Company and senior administrative employees of the 
Company (``Eligible Employees''), (b) the immediate family members of 
Eligible Employees, which are parents, children, grandchildren, spouses 
or spousal equivalents of children, spouses or spousal equivalents, and 
siblings, including step or adoptive relationships (``Eligible Family 
Members''), and (c) trusts or other entities or arrangements the sole 
beneficiaries of which consist of Eligible Employees or their Eligible 
Family Members, or the settlors and the trustees of which consist of 
Eligible Employees or Eligible Employees together with Eligible Family 
Members (``Eligible Trusts'').\1\ To qualify as an Eligible Investor 
with respect to an Investment Fund, each such person must, if 
purchasing an Interest from an Investment Fund or from a Member, be an 
Accredited Investor as that term is defined in Rule 501(a) of 
Regulation D of the Securities Act, or, in the case of Eligible Trusts, 
a trust, entity or arrangement for which an Eligible Employee, who is 
an Accredited Investor, is a settlor and principal investment decision 
maker. The Company will be an Accredited Investor. Prior to offering 
Interests to an Eligible Employee or Eligible Family Member, the 
Investment Committee (as defined below) must reasonably believe that 
the Eligible Employee or Eligible Family Member is a sophisticated 
investor capable of understanding and evaluating the risks of 
participating in the Investment Fund without the benefit of regulatory 
safeguards. The Investment Committee may impose more restrictive 
standards for Eligible Investors in its discretion. The beneficial 
owners of an Eligible Trust will be persons eligible to hold interests 
in employees' securities companies as defined in section 2(a)(13) of 
the Act.
---------------------------------------------------------------------------

    \1\ If an Eligible Trust is an entity or arrangement other than 
a trust, (a) the reference to ``settlor'' shall be construed to mean 
a person who created the vehicle or arrangement, alone or together 
with other Eligible Investors, and also contributed funds or other 
assets to the vehicle, and (b) the reference to ``trustee'' shall be 
construed to mean a person who performs functions similar to those 
of a trustee.
---------------------------------------------------------------------------

    5. Each Investment Fund will be managed and administered by an 
investment committee (``Investment Committee''). The Investment 
Committee will be comprised of not less than three partners of the 
Company who are appointed to the Investment Committee by the Company's 
management committee. All investment decisions on behalf of an 
Investment Fund (including with respect to any series thereof) will be 
made by the Investment Committee.
    6. An Investment Fund may have an administrator 
(``Administrator''). The Administrator may be an employee of the 
Company or the Investment Committee may determine to engage a third 
party to act as Administrator for an Investment Fund. The Administrator 
will in no event be a Member or otherwise hold any other security of an 
Investment Fund unless qualified as an Eligible Investor. The 
Administrator will not recommend Investments or exercise investment 
discretion. The only functions of the Administrator will be 
ministerial.
    7. The specific investment objectives and strategies for an 
Investment Fund will be set forth in an informative memorandum relating 
to the Interests being offered and in the relevant Investment Fund 
Agreement, and each Eligible Investor will receive a copy of the 
informative memorandum and Investment Fund Agreement before making an 
investment in an Investment Fund. The terms of an Investment Fund will 
be disclosed to each Eligible Investor at the time the investor is 
invited to participate in that Investment Fund.
    8. The value of the Members' capital accounts will be determined at 
such times as the Investment Committee deems appropriate or necessary; 
however, such valuation will be done at least annually at the 
Investment Fund's fiscal year-end. The Investment Committee will value 
the assets held by an Investment Fund at the current market price 
(closing price) in the case of marketable securities. All other 
securities and assets will be valued by the Investment Committee in 
good faith at fair value.
    9. Each Investment Fund will generally bear its own expenses. The 
Company may be reimbursed by an Investment Fund for reasonable and 
necessary out of pocket costs directly associated with the organization 
and operation of the Investment Fund, including administrative expenses 
and overhead expenses. No Investment Fund will be charged legal fees by 
the Company. There will be no allocation of any of the Company's 
operating expenses to the Investment Funds other than those 
specifically related to the provision of administrative services by

[[Page 85775]]

the Company to the Investment Funds and disclosed to Eligible 
Investors. Some of the investment opportunities available to an 
Investment Fund may involve parties for which the Company was, is or 
will be retained to act as legal counsel, and the Company may be paid 
by such parties or their affiliates for legal services and for related 
disbursements and charges. These amounts paid to the Company will not 
be paid by an Investment Fund itself but by the entities in which an 
Investment Fund invests or their affiliates. No management fee or other 
compensation will be paid by an Investment Fund or the Members to the 
Investment Committee or any member of the Investment Committee. Also, 
no fee of any kind will be charged in connection with the sale of 
Interests in an Investment Fund.
    10. Within 120 days after the end of each fiscal year, or as soon 
as practicable thereafter, each Investment Fund will send its Members 
an annual report regarding its operations. The annual report of an 
Investment Fund will contain financial statements audited by an 
independent accounting firm. For purposes of this requirement, 
``audit'' has the meaning defined in rule 1-02(d) of Regulation S-X. An 
Investment Fund will maintain a file containing any financial 
statements and other information received from the issuers of the 
Investments held by the Investment Fund and will make such file 
available for inspection by its Members in accordance with its 
Investment Fund Agreement. An Investment Fund, within 90 days after the 
end of the fiscal year of such Investment Fund, or as soon as 
practicable thereafter, will transmit a report to each Member setting 
out information with respect to that Member's distributive share of 
income gains, losses, credits and other items for federal income tax 
purposes resulting from the operation of the Investment Fund during 
that year.
    11. Members will not be entitled to redeem their respective 
Interests in an Investment Fund. A Member will be permitted to transfer 
his or her Interest only with the express consent of the Investment 
Committee, which consent may be given or withheld in the Investment 
Committee's sole and absolute discretion, and then only to an Eligible 
Investor. A Member will not be subject to removal except for good cause 
as determined by the Investment Committee or if the Investment 
Committee, in its discretion, deems such withdrawal to be in the best 
interest of the Investment Fund. The Interests of a Member who is no 
longer eligible to own interests in an employees' securities company as 
defined in section 2(a)(13) of the Act will be repurchased, subject to 
the minimum payment provisions described below. The Investment 
Committee does not currently intend to require any Member to 
withdraw.\2\ Upon withdrawal or sale of a Member's Interest, the 
Investment Fund or purchaser will at a minimum pay to the Member the 
lesser of (a) the amount of such Member's drawn Capital Commitment 
(defined below) plus interest (calculated at a rate determined by the 
Investment Committee to be reasonably comparable to interest earned by 
the Investment Fund on temporary investments) less prior distributions, 
or (b) the fair market value of the Interest as determined at the time 
of such withdrawal or sale in good faith by the Investment Committee. 
If a Member that is a Eligible Employee ceases to be a partner or 
senior administrative employee of the Company, such Member and related 
Eligible Investors will continue to be Members of an Investment Fund 
although with the consent of the Investment Committee, such Member and 
related Eligible Investors may be permitted to assign all or a portion 
of such Member's Interest to other Eligible Investors.
---------------------------------------------------------------------------

    \2\ The following circumstances, among others, could warrant the 
withdrawal of a Member or sale of a Member's Interests to another 
Eligible Investor: If a Member who is an Eligible Employee ceases to 
be a partner or senior administrative employee of the Company; an 
Eligible Family Member's or Eligible Trust's related Eligible 
Employee ceases to be a partner or senior administrative employee of 
the Company; a Member defaults on his or her obligations to the 
Investment Fund; adverse tax consequences were to inure to the 
Investment Fund or a Member were that Member to remain a Member; or 
a situation in which the continued membership of the Member would 
violate applicable law or regulations.
---------------------------------------------------------------------------

    12. Each Member of an Investment Fund will make a separate capital 
commitment to the Investment Fund (``Capital Commitment'') relating to 
each Investment Fund in which such Member is participating. To provide 
flexibility in connection with an Investment Fund's obligation to 
contribute capital to fund an Investment of an Investment Fund and to 
meet the expenses with respect to that Investment Fund, the Investment 
Fund Agreements may provide that the Investment Fund may engage in 
borrowings in connection with such funding of Investments. Any 
borrowings by an Investment Fund with respect to the funding of 
Investments will be non-recourse to the Members \3\ but may be secured 
by a pledge of the Members' respective capital accounts and unfunded 
Capital Commitments. An Investment Fund will not borrow from any person 
if the borrowing would cause any person not named in section 2(a)(13) 
of the Act to own any outstanding securities of an Investment Fund 
(other than short-term paper). If the Company makes a loan to an 
Investment Fund, the Company (as lender) will be entitled to receive 
interest, provided that the rate will be no less favorable to the 
borrower than the rate obtainable on an arm's length basis. An 
Investment Fund will not lend any funds to the Company. If the Company 
extends a loan to an Eligible Investor in respect of any Investment 
Fund, the loan will be made at an interest rate no less favorable than 
that which could be obtained on an arm's length basis. Loans will not 
be extended or arranged if otherwise prohibited by law, including the 
Sarbanes-Oxley Act of 2002.
---------------------------------------------------------------------------

    \3\ This excludes indebtedness incurred specifically on behalf 
of a Member where the Member has agreed to guarantee the loan or to 
act as co-obligor on the loan.
---------------------------------------------------------------------------

    13. The Investment Funds will not acquire any security issued by a 
registered investment company if immediately after the acquisition the 
Investment Fund would own more than 3% of the total outstanding voting 
stock of the registered investment company.

Applicants' Legal Analysis

    1. Section 6(b) of the Act provides, in part, that the Commission 
will exempt employees' securities companies from the provisions of the 
Act to the extent that the exemption is consistent with the protection 
of investors. Section 6(b) provides that the Commission will consider, 
in determining the provisions of the Act from which the company should 
be exempt, the company's form of organization and capital structure, 
the persons owning and controlling the company's securities, the price 
of the company's securities and the amount of any sales load, the 
disposition of the proceeds of any sales of the company's securities, 
how the company's funds are invested, and the relationship between the 
company and the issuers of the securities in which it invests. Section 
2(a)(13) defines an employees' securities company as any investment 
company all of whose securities (other than short-term paper) are 
beneficially owned (a) by current or former employees, or persons on 
retainer, of one or more affiliated employers, (b) by immediate family 
members of such persons, or (c) by such employer or employers together 
with any of the persons in (a) or (b).

[[Page 85776]]

    2. Section 7 of the Act generally prohibits investment companies 
that are not registered under section 8 of the Act from selling or 
redeeming their securities. Section 6(e) of the Act provides that, in 
connection with any order exempting an investment company from any 
provision of section 7, certain provisions of the Act, as specified by 
the Commission, will be applicable to the company and other persons 
dealing with the company as though the company were registered under 
the Act. Applicants request an order under sections 6(b) and 6(e) of 
the Act exempting applicants from all provisions of the Act, except 
sections 9, 17, 30, 36 through 53, and the Rules and Regulations. With 
respect to sections 17(a), (d), (f), (g) and (j) and 30(a), (b), (e) 
and (h) of the Act and the Rules and Regulations, and rule 38a-1 under 
the Act, applicants request a limited exemption as set forth in the 
application.
    3. Section 17(a) of the Act generally prohibits any affiliated 
person of a registered investment company, or any affiliated person of 
an affiliated person, acting as principal, from knowingly selling or 
purchasing any security or other property to or from the company. 
Applicants request an exemption from section 17(a) to permit an 
Investment Fund to invest in or participate as a selling security-
holder in a principal transaction with one or more affiliated persons 
(as defined in section 2(a)(3) of the Act) of an Investment Fund 
(``First-Tier Affiliates'') and affiliated persons of such First-Tier 
Affiliates (``Second-Tier Affiliates,'' and together with First-Tier 
Affiliates, ``Affiliates'').
    4. Applicants submit that the exemptions sought from section 17(a) 
are consistent with the purposes of the Act and the protection of 
investors. Applicants state that the Members will be informed in an 
Investment Fund's offering materials of the possible extent of the 
dealings by such Investment Fund and any portfolio company with the 
Company. Applicants also state that, as professionals sophisticated and 
experienced in business and financial matters, the Members will be able 
to evaluate the risks associated with those dealings. Applicants assert 
that the community of interest among the Investment Committee, the 
Members and the Company will serve to reduce the risk of abuse in 
transactions involving an Investment Fund and the Company.
    5. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
any affiliated person of a registered investment company, or any 
affiliated person of such person, acting as principal, from 
participating in any joint arrangement with the registered investment 
company unless authorized by the Commission. Applicants request an 
exemption from section 17(d) and rule 17d-1 to the extent necessary to 
permit an Investment Fund to engage in transactions in which an 
Affiliate participates as a joint or a joint and several participant 
with such Investment Fund.
    6. Joint transactions in which an Investment Fund could participate 
might include the following: (a) A joint investment by one or more 
Investment Funds in a security in which the Company or another 
Investment Fund is a joint participant or plans to become a 
participant; (b) a joint investment by one or more Investment Funds in 
another Investment Fund; and (c) a joint investment by one or more 
Investment Funds in a security in which an Affiliate is an investor or 
plans to become an investor, including situations in which an Affiliate 
has a partnership or other interest in, or compensation arrangements 
with, such issuer, sponsor or offeror.
    7. Applicants assert that compliance with section 17(d) and rule 
17d-1 would cause an Investment Fund to forego investment opportunities 
simply because a Member, the Company or other Affiliates also had made, 
or is concurrently making, a similar investment. In addition, because 
attractive investment opportunities of the types considered by an 
Investment Fund often require that each participant make available 
funds in an amount that may be substantially greater than that 
available to the investor alone, there may be certain attractive 
opportunities of which an Investment Fund may be unable to take 
advantage except as a co-participant with other persons, including 
Affiliates. Applicants believe that the flexibility to structure co- 
and joint investments in the manner described above will not involve 
abuses of the type section 17(d) and rule 17d-1 were designed to 
prevent. Applicants acknowledge that any transactions subject to 
section 17(d) and rule 17d-1 for which exemptive relief has not been 
requested in the application would require specific approval by the 
Commission.
    8. Section 17(f) of the Act designates the entities that may act as 
investment company custodians, and rule 17f-2 under the Act allows an 
investment company to act as self-custodian. Applicants request an 
exemption to permit the following exceptions from the requirements of 
rule 17f-2: (i) Compliance with paragraph (b) of the rule may be 
achieved through safekeeping in the locked files of the Company or a 
partner of the Company; (ii) for the purposes of the rule, (A) 
employees of the Company will be deemed employees of the Investment 
Funds, (B) officers and members of the Investment Committee will be 
deemed to be officers of such Investment Funds, and (C) the Investment 
Committee will be deemed to be the board of directors of such 
Investment Funds; and (iii) instead of the verification procedure under 
paragraph (f) of the rule, verification will be effected quarterly by 
two partners or employees, each of whom shall have sufficient 
knowledge, sophistication and experience in business matters to perform 
such examination. Applicants expect that most of the Investments will 
be evidenced by partnership agreements or similar documents. Such 
instruments are most suitably kept in the Company's files, where they 
can be referred to as necessary. Applicants will comply with all other 
provisions of rule 17f-2.
    9. Section 17(g) and rule 17g-1 generally require the bonding of 
officers and employees of a registered investment company who have 
access to its securities or funds. Rule 17g-1 requires that a majority 
of directors who are not interested persons of a registered investment 
company (``disinterested directors'') take certain actions and give 
certain approvals relating to fidelity bonding. Applicants request an 
exemption from the requirement, contained in rule 17g-1, that a 
majority of the ``directors'' of the Investment Funds who are not 
``interested persons'' of the respective Investment Funds (as defined 
in the Act) take certain actions and make certain approvals concerning 
bonding and request instead that such actions and approvals be taken by 
the Investment Committee, regardless of whether any of them is deemed 
to be an interested person of the Investment Funds. Each member of the 
Investment Committee will be an interested person of the Investment 
Funds.
    10. The Investment Funds request an exemption from the requirements 
of rule 17g-1(g) and (h) relating to the filing of copies of fidelity 
bonds and related information with the Commission and relating to the 
provisions of notices to the board of directors. Applicants also 
request an exemption from the requirements of rule 17g-1(j)(3) that the 
Investment Funds have a majority of disinterested directors, that those 
disinterested directors select and nominate any other disinterested 
directors, and that any legal counsel for those disinterested directors 
be independent legal counsel. Applicants believe that the filing 
requirements of

[[Page 85777]]

rule 17g-1 are burdensome and unnecessary as applied to the Investment 
Funds. The Investment Committee will maintain the materials otherwise 
required to be filed with the Commission by rule 17g-1(g) and the 
applicants agree that all such material will be subject to examination 
by the Commission and its staff. The Investment Committee will 
designate a person to maintain the records otherwise required to be 
filed with the Commission under paragraph (g) of the rule. The 
Investment Funds will comply with all other requirements of rule 17g-1. 
The fidelity bond of the Investment Funds will cover the Investment 
Committee, and all employees of the Company who have access to the 
securities or funds of the Investment Funds.
    11. Applicants request an exemption from the requirements, 
contained in section 17(j) of the Act and rule 17j-1 under the Act, 
that every registered investment company adopt a written code of ethics 
and every ``access person'' of such registered investment company 
report to the investment company with respect to transactions in any 
security in which such access person has, or by reason of the 
transaction acquires, any direct or indirect beneficial ownership. 
Applicants request an exemption from the requirements in rule 17j-1, 
with the exception of rule 17j-1(b), because they are burdensome and 
unnecessary as applied to an Investment Funds and because the exemption 
is consistent with the policy of the Act. Requiring the Investment 
Funds to adopt a written code of ethics and requiring access persons to 
report each of their securities transactions would be time-consuming 
and expensive and would serve little purpose in light of, among other 
things, the community of interest among the Members of the Investment 
Funds by virtue of their common association with the Company. 
Accordingly, the requested exemption is consistent with the purposes of 
the Act because the dangers against which section 17(j) and rule 17j-1 
are intended to guard are not present in the case of the Investment 
Funds.
    12. Applicants request an exemption from the requirements in 
sections 30(a), 30(b), and 30(e) of the Act, and the Rules and 
Regulations under those sections, that registered investment companies 
file with the Commission and mail to their shareholders certain 
periodic reports and financial statements. Applicants contend that the 
forms prescribed by the Commission for periodic reports have little 
relevance to an Investment Fund and would entail administrative and 
legal costs that outweigh any benefit to the Members. Applicants 
request exemptive relief to the extent necessary to permit an 
Investment Fund to report annually to their Members. Applicants also 
request an exemption from section 30(h) of the Act to the extent 
necessary to exempt the Investment Committee, any 10 percent 
shareholder, and any other person who may be deemed to be an officer, 
director, member of an advisory board, or otherwise subject to section 
30(h), from filing Forms 3, 4 and 5 under section 16 of the Exchange 
Act with respect to their ownership of Interests in the Investment 
Funds. Applicants assert that, because there is no trading market for 
Interests and the transfer of Interests is severely restricted, these 
filings are unnecessary for the protection of investors and burdensome 
to those required to make them.
    13. Rule 38a-1 requires investment companies to adopt, implement 
and periodically review written policies reasonably designed to prevent 
violation of the federal securities laws and to appoint a chief 
compliance officer. Each Investment Fund will comply with rule 38a-
1(a), (c) and (d), except that (i) the members of the Investment 
Committee will fulfill the responsibilities assigned to the Investment 
Fund's board of directors under the rule, and (ii) because all members 
of the Investment Committee would be considered interested persons of 
the Investment Funds, approval by a majority of the disinterested board 
members required by rule 38a-1 will not be obtained. In addition, the 
Investment Funds will comply with the requirement in rule 38a-
1(a)(4)(iv) that the chief compliance officer meet with the 
disinterested directors by having the chief compliance officer meet 
with the members of the Investment Committee.

Applicants' Conditions

    Applicants agree that any order granting the requested relief will 
be subject to the following conditions:
    1. Each proposed transaction, to which an Investment Fund is a 
party, otherwise prohibited by section 17(a) or section 17(d) and rule 
17d-1 (the ``Section 17 Transactions'') will be effected only if the 
Investment Committee determines that: (a) The terms of the Section 17 
Transaction, including the consideration to be paid or received, are 
fair and reasonable to Members of the Investment Fund and do not 
involve overreaching of the Investment Fund or its Members on the part 
of any person concerned; and (b) the Section 17 Transaction is 
consistent with the interests of the Members of the Investment Fund, 
the Investment Fund's organizational documents and the Investment 
Fund's reports to its Members.
    In addition, the Investment Committee will record and preserve a 
description of such Section 17 Transactions, the findings of the 
Investment Committee, the information or materials upon which their 
findings are based and the basis therefor. All such records will be 
maintained for the life of the Investment Fund and at least six years 
thereafter and will be subject to examination by the Commission and its 
staff. All such records will be maintained in an easily accessible 
place for at least the first two years.
    2. If purchases or sales are made by an Investment Fund from or to 
an entity affiliated with the Investment Fund by reason of a member of 
the Investment Committee (a) serving as an officer, director, general 
partner or investment adviser of the entity, or (b) having a 5% or more 
investment in the entity, such individual will not participate in the 
Investment Fund's determination of whether or not to effect the 
purchase or sale.
    3. The Investment Committee will adopt, and periodically review and 
update, procedures designed to ensure that reasonable inquiry is made, 
prior to the consummation of any Section 17 Transaction, with respect 
to the possible involvement in the transaction of any affiliated person 
or promoter of or principal underwriter for the Investment Fund, or any 
affiliated person of such a person, promoter, or principal underwriter.
    4. The Investment Committee will not purchase for an Investment 
Fund any Investment in which a Co-Investor, as defined below, has or 
proposes to acquire the same class of securities of the same issuer, 
where the investment involves a joint enterprise or other joint 
arrangement within the meaning of rule 17d-1 in which the Investment 
Fund and the Co-Investor are participants, unless any such Co-Investor, 
prior to disposing of all or part of its investment: (a) Gives the 
Investment Fund holding such investment sufficient, but not less than 
one day's notice of its intent to dispose of its investment, and (b) 
refrains from disposing of its investment unless the Investment Fund 
holding such investment has the opportunity to dispose of its 
investment prior to or concurrently with, on the same terms as, and on 
a pro rata basis with the Co-Investor. The term ``Co-Investor'' with 
respect to an Investment Fund means any person who is: (a) An 
affiliated person of the Investment Fund; (b) the

[[Page 85778]]

Company; (c) a current partner, lawyer employed by or key 
administrative employee of the Company; (d) an entity in which the 
Company or a member of the Investment Committee acts as an officer, 
director, or general partner, or has a similar capacity to control the 
sale or disposition of the entity's securities; or (e) an investment 
vehicle offered, sponsored, or managed by the Company or an affiliated 
person of the Company.
    The restrictions contained in this condition, however, shall not be 
deemed to limit or prevent the disposition of an investment by a Co-
Investor: (a) To its direct or indirect wholly-owned subsidiary, to any 
company (a ``Parent'') of which the Co-Investor is a direct or indirect 
wholly-owned subsidiary, or to a direct or indirect wholly-owned 
subsidiary of its Parent; (b) to immediate family members of the Co-
Investor or a trust established for the benefit of any such family 
member; (c) when the investment is comprised of securities that are 
listed on a national securities exchange registered under section 6 of 
the Exchange Act; (d) when the investment is comprised of securities 
that are national market system (``NMS'') stocks pursuant to section 
11A(a)(2) of the Exchange Act and rule 600(a) of Regulation NMS 
thereunder; (e) when the investment is comprised of securities that are 
listed on or traded on any foreign securities exchange or board of 
trade that satisfies regulatory requirements under the law of the 
jurisdiction in which such foreign securities exchange or board of 
trade is organized similar to those that apply to a national securities 
exchange or a national market system of securities; or (f) when the 
investment is comprised of securities that are government securities as 
defined in section 2(a)(16) of the Act.
    5. An Investment Fund will send, within 120 days after the end of 
its fiscal year, or as soon as practicable thereafter, to each Member 
who had an interest in the Investment Fund at any time during the 
fiscal year then ended, reports and information regarding the 
Investments, including financial statements for such Investment Fund 
audited by an independent accounting firm. The Investment Committee 
will make a valuation or have a valuation made of all of the assets of 
an Investment Fund as of each fiscal year end. In addition, within 90 
days after the end of each fiscal year of the Investment Fund, or as 
soon as practicable thereafter, the Investment Fund shall send a report 
to each person who was a Member at any time during the fiscal year then 
ended setting forth such tax information as shall be necessary for the 
preparation by the Member of his or her federal and state income tax 
returns and a report of the investment activities of the Investment 
Fund during such year.
    6. An Investment Fund will maintain and preserve, for the life of 
the Investment Fund and at least six years thereafter, such accounts, 
books, and other documents as constitute the record forming the basis 
for the audited financial statements and annual reports of the 
Investment Fund to be provided to its Members, and agrees that all such 
records will be subject to examination by the Commission and its staff. 
All such records will be maintained in an easily accessible place for 
at least the first two years.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-28642 Filed 12-28-20; 8:45 am]
BILLING CODE 8011-01-P