Document ID: SEC-2014-1971-0001
Agency: sec
Document Type: Notice
Title: Applications: TPG Specialty Lending, Inc., et al.
Posted Date: 2014-11-24T05:00Z

[Federal Register Volume 79, Number 226 (Monday, November 24, 2014)]
[Notices]
[Pages 69890-69894]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27696]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31338; File No. 812-13980]

TPG Specialty Lending, Inc., et al.; Notice of Application

November 18, 2014.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order pursuant to sections 
57(a)(4) and 57(i) of the Investment Company Act of 1940 (the ``Act'') 
and rule 17d-1 under the Act permitting certain joint transactions 
otherwise prohibited by section 57(a)(4) of the Act.

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SUMMARY: Summary of Application: Applicants request an order to permit 
a business development company (``BDC'') to co-invest in portfolio 
companies with affiliated investment funds.

Applicants:  TPG Specialty Lending, Inc. (the ``Company''); TSL 
Advisers, LLC (``TSL Advisers''); TPG Opportunities Partners II (A), 
L.P., TPG Opportunities Partners II (B), L.P., TPG Opportunities 
Partners II (C), L.P., TPG Opportunities Partners III (A), L.P., TPG 
Opportunities Partners III (B), L.P., TPG Opportunities Partners III 
(C), L.P., Super TAO MA, L.P., TSSP Adjacent Opportunities Partners, 
L.P., TSSP Adjacent Opportunities Partners (A), L.P., TPG Partners VI, 
L.P., TPG FOF VI-A, L.P., and TPG FOF VI-B, L.P. (together, the 
``Existing Affiliated Funds''); and, TPG Opportunities Advisers, LLC, 
TPG Opportunities II Management, LLC, TPG Opportunities III Management, 
LLC, TSSP Adjacent Opportunities Management, LLC, TPG Capital Advisors, 
LLC, and TPG VI Management, LLC (collectively, ``Existing Advisers to 
Affiliated Funds'').

DATES: Filing Dates: The application was filed on November 23, 2011, 
and amended on April 23, 2013, September 17, 2013, January 23, 2014, 
May 6, 2014, and September 11, 2014.

Hearing or Notification of Hearing:  An order granting the requested 
relief 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 December 15, 2014, 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 writing to the 
Commission's Secretary.

ADDRESSES: The Commission: Secretary, U.S. Securities and Exchange 
Commission, 100 F St. NE., Washington, DC 20549-1090. Applicants: TPG 
Capital Advisors, LLC, 301 Commerce Street, Suite 3300, Fort Worth, TX 
76102.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 
551-6870 or David P. Bartels, Branch Chief,

[[Page 69891]]

at (202) 551-6821 (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 Web site 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. The Company is a Delaware corporation organized as a closed-end 
management investment company that has elected to be regulated as a BDC 
under section 54(a) of the Act.\1\ The Company's Objectives and 
Strategies \2\ are to generate current income and capital appreciation 
through direct investments in senior secured loans, mezzanine loans 
and, to a lesser extent, equity securities, of U.S. domiciled Middle 
Market Issuers.\3\ The Company is managed under the direction of a 
board of directors (``Board'') consisting of five members, three of 
whom are not ``interested persons'' as defined in section 2(a)(19) of 
the Act (``Independent Directors'').\4\ TSL Advisers, a Delaware 
limited liability company registered as an investment adviser under the 
Investment Advisers Act of 1940 (the ``Advisers Act''), serves as 
investment adviser to the Company.
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    \1\ Section 2(a)(48) defines a BDC to be any closed-end 
investment company that operates for the purpose of making 
investments in securities described in sections 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
    \2\ The Company's ``Objectives and Strategies'' means its 
investment objectives and strategies, as described in its 
registration statement on Form N-2, other filings the Company has 
made with the Commission under the Securities Act of 1933 (the 
``Securities Act''), or under the Securities Exchange Act of 1934, 
as amended, and the Company's reports to shareholders.
    \3\ Applicants define ``Middle Market Issuers'' as companies 
that have annual earnings before interest, income taxes, 
depreciation and amortization of $10 million to $250 million.
    \4\ No Independent Director will have any direct or indirect 
financial interest in any Co-Investment Transaction or any interest 
in any portfolio company, other than an interest (if any) in the 
securities of the Company.
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    2. Each of the Existing Affiliated Funds is a private investment 
fund relying on the exception from the definition of ``investment 
company'' under the Act provided in section 3(c)(1) or 3(c)(7). The 
Existing Advisers to Affiliated Funds serve as the investment advisers 
to the Existing Affiliated Funds. Each of the Existing Advisers to 
Affiliated Funds is organized as a Delaware limited liability company 
and registered as an investment adviser under the Advisers Act.
    3. Applicants state that TSL Advisers and the Existing Advisers to 
Affiliated Funds are under common control because they are each under 
the indirect control of David Bonderman and James Coulter (the ``TPG 
Founders'').\5\
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    \5\ Applicants represent that the TPG Founders are the sole 
shareholders of the ultimate general partner of entities that 
indirectly hold all of the voting power of each Adviser.
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    4. Applicants seek an order (``Order'') to permit the Company, on 
the one hand, and any Affiliated Fund,\6\ on the other hand, to 
participate in the same Origination Opportunities and Follow-On 
Investments where such participation would otherwise be prohibited 
under section 57(a)(4) and the rules under the Act (``Co-Investment 
Program''). ``Co-Investment Transaction'' means any transaction in an 
Origination Opportunity or any Follow-On Investment in which the 
Company (or any Wholly-Owned Investment Subsidiary of the Company, 
defined below) participated together with one or more Affiliated Funds 
in reliance on the Order. ``Potential Co-Investment Transaction'' means 
any investment opportunity in an Origination Opportunity or Follow-On 
Investment in which the Company (or any Wholly-Owned Investment 
Subsidiary) could not participate together with an Affiliated Fund 
without obtaining and relying on the Order.\7\ An ``Origination 
Opportunity'' is (a) an investment opportunity wherein the investing 
fund would underwrite and provide the initial funding for a loan to a 
Middle Market Issuer (as opposed to purchasing the loan from another 
party) and (b) any related opportunity to invest in equity, options, 
warrants, conversion rights or other equity-related instruments as part 
of the same transaction. A ``Follow-On Investment'' is any investment 
in an issuer in which the Company and one or more Affiliated Funds have 
completed a Co-Investment Transaction (defined below) and in which the 
Company remains invested at the time the investment opportunity arises.
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    \6\ ``Affiliated Fund'' means any Existing Affiliated Fund or 
any entity (a) whose investment adviser is an Adviser, (b) that 
would be an investment company but for section 3(c)(1) or 3(c)(7) of 
the Act, and (c) will have investment objectives and strategies 
similar to those of the Company or an Existing Affiliated Fund. The 
term ``Adviser'' means TSL Advisers and the Existing Advisers to 
Affiliated Funds, and any future investment adviser that controls, 
is controlled by or under common control with TSL Advisers and is 
registered under the Advisers Act.
    \7\ All existing entities that currently intend to rely upon the 
requested Order have been named as applicants. Any other existing or 
future entity that subsequently relies on the Order will comply with 
the terms and conditions of the application.
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    5. Applicants state that, pursuant to written policies and 
procedures that each of the Advisers has adopted, the Company has the 
right to determine its level of participation in an Origination 
Opportunity or an opportunity for Follow-On Investment before the 
Advisers allocate any portion of such opportunity to another client. 
According to Applicants, this means that the Company may choose to 
participate to the full extent of an Origination Opportunity or 
opportunity for Follow-On Investment, with the Affiliated Funds 
receiving no allocation of that opportunity, or may choose a lower 
amount of participation, with the remainder of the opportunity only 
then being offered to the Affiliated Funds. This arrangement is 
referred to in the application as the Company's ``Allocation 
Preference.'' \8\ Applicants state that the Company disclosed the 
Allocation Preference to investors in its private placement memorandum 
and registration statement on Form N-2, and represent that the 
Allocation Preference will not be changed.
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    \8\ A Follow-On Investment may not itself fall within the 
definition of an Origination Opportunity; however, applicants intend 
to treat any additional investments in an issuer in the same manner 
as the Origination Opportunity giving rise to the Follow-On 
Investment. Applicants believe that once the Company has an 
investment in an issuer pursuant to an Origination Opportunity, it 
is fair and appropriate for any additional investments in such 
issuer under the Co-Investment Program to be subject to the 
Company's Allocation Preference.
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    6. Applicants represent that each Adviser has adopted procedures to 
ensure that each Origination Opportunity identified by any Adviser and 
each Follow-On investment is first offered to the Company. Applicants 
state that the first step once an investment opportunity is identified 
by any Adviser is for the Legal Department to be advised of the 
opportunity and assess whether the investment opportunity is within the 
Company's Allocation Preference.\9\ Applicants assert that the 
determinations and referral process is an objective and mechanical 
process with no discretion involved.\10\ The Company will not be

[[Page 69892]]

obligated to invest, or co-invest, when Origination Opportunities or 
Follow-On Investments are referred to it.
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    \9\ The term ``Legal Department'' refers to the supervised 
persons (as defined by the Advisers Act) of the Advisers who provide 
legal services and advice to the Advisers. Applicants state that, as 
a group of entities under common control, the Advisers all share the 
services of the Legal Department. As such, the Legal Department acts 
on behalf of the Advisers, and actions taken, or not taken, and 
determinations made by the Legal Department for purposes of 
complying with the terms and conditions of this application will be 
attributed to each of the Advisers.
    \10\ Applicants represent that, as part of the Advisers' written 
policies and procedures, the Legal Department's determination with 
regard to each investment opportunity will be documented in TSL 
Adviser's allocation log.
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    7. Once the Legal Department has determined that an opportunity is 
an Origination Opportunity or potential Follow-On Investment, TSL 
Advisers will make an independent determination of the appropriateness 
of the investment for the Company, as required under condition 1. If 
TSL Advisers deems the Company's participation in such investment to be 
appropriate, it will then determine an appropriate size of the 
Company's investment. In selecting investments for the Company, TSL 
Advisers will consider only the Objectives and Strategies, investment 
policies, investment positions, capital available for investment, and 
other pertinent factors applicable to the Company. Although the Company 
has an Allocation Preference over all Origination Opportunities and 
Follow-On Investments, the Affiliated Funds have investment strategies 
that could result in particular Origination Opportunities being 
attractive and appropriate for one or more of them as well as for the 
Company. Under the Co-Investment Program, if the amount of the 
investment opportunity were to exceed the amount TSL Advisers 
determined was appropriate for the Company to invest, then the excess 
amount would be offered to one or more Affiliated Funds as a Potential 
Co-Investment Transaction. When determining if an Affiliated Fund 
should participate in a Potential Co-Investment Transaction offered to 
it, the applicable Adviser will review the Potential Co-Investment 
Transaction for each Affiliated Fund that it advises based only upon 
the investment objectives, investment policies, investment position, 
capital available for investment, and other pertinent factors 
applicable to that particular investing entity.
    8. Other than pro rata dispositions as provided in condition 6, and 
after making the determinations required in conditions 1 and 2(a), TSL 
Advisers will present each Potential Co-Investment Transaction and the 
proposed allocation to the directors of the Board eligible to vote 
under section 57(o) of the Act (``Eligible Directors''), and the 
``required majority,'' as defined in section 57(o) of the Act 
(``Required Majority''), will approve each Co-Investment Transaction 
prior to any investment by the Company.
    9. With respect to the pro rata dispositions provided in condition 
6, the Company may participate in a pro rata disposition without 
obtaining prior approval of the Required Majority if, among other 
things: (i) The proposed participation of the Company and the 
participating Affiliated Fund in such disposition is proportionate to 
its outstanding investments in the issuer immediately preceding the 
disposition, as the case may be; and (ii) the Board has approved the 
Company's participation in pro rata dispositions as being in the best 
interests of the Company. If the Board does not so approve, any such 
dispositions will be submitted to the Company's Eligible Directors. The 
Board may at any time rescind, suspend or qualify its approval of pro 
rata dispositions with the result that all dispositions must be 
submitted to the Eligible Directors.
    10. Applicants state that the Company may, from time to time, form 
one or more Wholly-Owned Investment Subsidiaries.\11\ Such a subsidiary 
would be prohibited from investing in a Co-Investment Transaction with 
an Affiliated Fund because it would be a company controlled by the 
Company for purposes of section 57(a)(4) and rule 17d-1. Applicants 
request that each Wholly-Owned Investment Subsidiary be permitted to 
participate in Co-Investment Transactions in lieu of the Company and 
that the Wholly-Owned Investment Subsidiary's participation in any such 
transaction be treated, for purposes of the requested order, as though 
the Company were participating directly. Applicants represent that this 
treatment is justified because a Wholly-Owned Investment Subsidiary 
would have no purpose other than serving as a holding vehicle for the 
Company's investments and, therefore, no conflicts of interest could 
arise between the Company and the Wholly-Owned Investment Subsidiary. 
The Company's Board would make all relevant determinations under the 
conditions with regard to a Wholly-Owned Investment Subsidiary's 
participation in a Co-Investment Transaction, and the Company's Board 
would be informed of, and take into consideration, any proposed use of 
a Wholly-Owned Investment Subsidiary in the Company's place. If the 
Company proposes to participate in the same Co-Investment Transaction 
with any of its Wholly-Owned Investment Subsidiaries, the Board will 
also be informed of, and take into consideration, the relative 
participation of the Company and the Wholly-Owned Investment 
Subsidiary.
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    \11\ The term ``Wholly-Owned Investment Subsidiary'' means an 
entity (a) whose sole business purpose is to hold one or more 
investments on behalf of the Company; (b) that is wholly-owned by 
the Company (with the Company at all times holding, beneficially and 
of record, 100% of the voting and economic interests); (c) with 
respect to which the Company's Board has the sole authority to make 
all determinations with respect to participation under the 
conditions of the application; (d) that does not pay a separate 
advisory fee, including any performance-based fee, to any person; 
and (e) that would be an investment company but for section 3(c)(1) 
or 3(c)(7) of the Act.
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Applicants' Legal Analysis

    1. Section 57(a)(4) of the Act prohibits certain affiliated persons 
of a BDC from participating in joint transactions with the BDC (or a 
company controlled by such BDC) in contravention of rules as prescribed 
by the Commission. Under section 57(b)(2) of the Act, any person who is 
directly or indirectly controlling, controlled by, or under common 
control with a BDC is subject to section 57(a)(4). Section 57(i) of the 
Act provides that, until the Commission prescribes rules under section 
57(a)(4), the Commission's rules under section 17(d) of the Act 
applicable to registered closed-end investment companies will be deemed 
to apply to transactions subject to section 57(a)(4). Because the 
Commission has not adopted any rules under section 57(a)(4), rule 17d-1 
applies to joint transactions with the Company because it is a BDC.
    2. Rule 17d-1 under the Act prohibits affiliated persons of a 
registered investment company from participating in joint transactions 
with the company unless the Commission has granted an order permitting 
such transactions. In passing upon applications under rule 17d-1, the 
Commission considers whether the company's participation in the joint 
transaction is consistent with the provisions, policies, and purposes 
of the Act and the extent to which such participation is on a basis 
different from or less advantageous than that of other participants.
    3. Co-Investment Transactions would be prohibited by section 
57(a)(4) and rule 17d-1 without a prior exemptive order of the 
Commission to the extent that the Affiliated Funds fall within the 
category of persons described by section 57(b) vis-[agrave]-vis the 
Company. Applicants state that Company's ability to complete Co-
Investment Transactions in portfolio companies will increase favorable 
investment opportunities for the Company.
    4. Applicants believe that Co-Investment Transactions would 
necessarily be fair to the Company because they would only occur if TSL 
Advisers determined that the investment opportunity exceeded the 
Company's desired investment in the

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opportunity. Applicants believe that the proposed terms and conditions 
will ensure that the terms on which Co-Investment Transactions may be 
made are consistent with the participation of the Company being on a 
basis that is neither different from nor less advantageous than other 
participants, thus protecting the shareholders of the Company from 
being disadvantaged, and are consistent with the purposes intended by 
the policies and provisions of the Act.

Applicants' Conditions

    Applicants agree that the Order granting the requested relief will 
be subject to the following conditions:
    1. The Company will receive an Allocation Preference with respect 
to all Origination Opportunities and potential Follow-On Investments. 
The Advisers will ensure that TSL Advisers and the Company are notified 
of all Origination Opportunities. Each time TSL Advisers considers a 
Potential Co-Investment for the Company, it will make an independent 
determination of the appropriateness of the investment for the Company 
in light of the Company's then-current circumstances.
    2. (a) If TSL Advisers deems the Company's participation in any 
Potential Co-Investment Transaction to be appropriate for the Company, 
it will then determine an appropriate level of investment for the 
Company.
    (b) The Company has the right to participate in the Potential Co-
Investment Transaction to the full extent TSL Advisers deems 
appropriate, and the participating Affiliated Funds will be allocated 
the remaining excess amount.
    (c) After making the determinations required in conditions 1 and 
2(a) above, TSL Advisers will distribute written information concerning 
the Potential Co-Investment Transaction, including the amounts proposed 
to be invested by the Affiliated Funds, to the Eligible Directors for 
their consideration. The Company will co-invest with one or more 
Affiliated Funds only if, prior to the Company's and any Affiliated 
Fund's participation in the Co-Investment Transaction, a Required 
Majority concludes that:
    (i) The terms of the transaction, including the consideration to be 
paid, are reasonable and fair and do not involve overreaching in 
respect of the Company or its shareholders on the part of any person 
concerned;
    (ii) the transaction is consistent with:
    (A) The interests of the shareholders of the Company; and
    (B) the Company's then-current Objectives and Strategies;
    (iii) the investment by the Affiliated Fund(s) would not 
disadvantage the Company, and participation by the Company is not on a 
basis different from or less advantageous than that of an Affiliated 
Fund; provided that, if an Affiliated Fund, but not the Company, gains 
the right to nominate a director for election to a portfolio company's 
board of directors or the right to have a board observer or any similar 
right to participate in the governance or management of the portfolio 
company, such event will not be interpreted to prohibit the Required 
Majority from reaching the conclusions required by this condition 
(2)(c)(iii), if:
    (A) The Eligible Directors will have the right to ratify the 
selection of such director or board observer, if any;
    (B) the applicable Adviser agrees to, and does, provide periodic 
reports to the Company's Board with respect to the actions of the 
director or the information received by the board observer or obtained 
through the exercise of any similar right to participate in the 
governance or management of the portfolio company; and
    (C) any fees or other compensation that the Affiliated Fund or any 
affiliated person of an Affiliated Fund receives in connection with the 
right of the Affiliated Fund to nominate a director or appoint a board 
observer or otherwise to participate in the governance or management of 
the portfolio company will be shared proportionately among the 
Affiliated Fund (which may, in turn, share its portion with its 
affiliated persons) and the Company in accordance with the amount of 
each party's investment; and
    (iv) the proposed investment by the Company will not benefit any 
Adviser, Affiliated Fund or any affiliated person thereof (other than 
the participating Affiliated Funds), except (A) to the extent permitted 
by condition 12, (B) to the extent permitted by section 17(e) or 57(k) 
of the Act, as applicable, (C) in the case of fees or other 
compensation described in condition 2(c)(iii)(C), or (D) indirectly, as 
a result of an interest in the securities issued by one of the parties 
to the Co-Investment Transaction.
    3. The Company has the right to decline to participate in any 
Potential Co-Investment Transaction or to invest less than the amount 
proposed.
    4. Except for Follow-On Investments made in accordance with 
condition 7, the Company will not invest in reliance on the Order in 
any issuer in which any Affiliated Fund or any affiliated person of an 
Affiliated Fund is an existing investor.
    5. The Company will not participate in any Potential Co-Investment 
Transaction unless the terms, conditions, price, class of securities to 
be purchased, settlement date, and registration rights will be the same 
for the Company as for the participating Affiliated Funds. The grant to 
an Affiliated Fund, but not the Company, of the right to nominate a 
director for election to a portfolio company's board of directors, the 
right to have an observer on the board of directors or similar rights 
to participate in the governance or management of the portfolio company 
will not be interpreted so as to violate this condition 5, if 
conditions 2(c)(iii)(A), (B) and (C) are met.
    6. (a) If any of the Affiliated Funds elects to sell, exchange or 
otherwise dispose of an interest in a security that was acquired by the 
Company and such Affiliated Fund in a Co-Investment Transaction, then:
    (i) The relevant Adviser will notify the Company of the proposed 
disposition at the earliest practical time; and
    (ii) TSL Advisers will formulate a recommendation as to 
participation by the Company in the disposition.
    (b) The Company will have the right to participate in such 
disposition on a proportionate basis, at the same price and on the same 
terms and conditions as those applicable to the participating 
Affiliated Fund(s).
    (c) The Company may participate in such disposition without 
obtaining prior approval of the Required Majority if: (i) The proposed 
participation of the Company and each participating Affiliated Fund in 
such disposition is proportionate to its outstanding investment in the 
issuer immediately preceding the disposition; (ii) the Board has 
approved as being in the best interests of the Company the ability to 
participate in such dispositions on a pro rata basis (as described in 
greater detail in the application); and (iii) the Board is provided on 
a quarterly basis with a list of all dispositions made in accordance 
with this condition. In all other cases, TSL Advisers will provide its 
written recommendation as to the Company's participation to the 
Eligible Directors, and the Company will participate in such 
disposition solely to the extent that a Required Majority determines 
that it is in the Company's best interests.
    (d) The Company and each participating Affiliated Fund will bear 
its own expenses in connection with any such disposition.
    7. (a) If any Affiliated Fund desires to make a Follow-On 
Investment then:

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    (i) The relevant Adviser will notify the Company of the proposed 
transaction at the earliest practical time; and
    (ii) TSL Advisers will formulate a recommendation as to the 
proposed participation, including the amount of the proposed Follow-On 
Investment, by the Company.
    (b) The Company has the right to participate in the Follow-On 
Investment to the full extent TSL Advisers deems appropriate, and the 
participating Affiliated Funds will be allocated the remaining excess 
amount.
    (c) TSL Advisers will provide its written recommendation as to the 
Company's participation to the Eligible Directors, and the Company will 
participate in such Follow-On Investment solely to the extent that a 
Required Majority determines that it is in the Company's best interest.
    (d) The acquisition of Follow-On Investments as permitted by this 
condition will be considered a Co-Investment Transaction for all 
purposes and subject to the other conditions set forth in the 
application.
    8. The Independent Directors will be provided quarterly for review 
all information concerning Potential Co-Investment Transactions and Co-
Investment Transactions, including investments made by an Affiliated 
Fund that the Company participated in and investments made by an 
Affiliated Fund that the Company considered but declined to co-invest 
in, so that the Independent Directors may determine whether all 
investments made during the preceding quarter, including those 
investments that the Company considered but declined to participate in, 
comply with the conditions of the Order. In addition, the Independent 
Directors will consider at least annually the continued appropriateness 
for the Company of participating in new and existing Co-Investment 
Transactions.
    9. The Company will maintain the records required by section 
57(f)(3) of the Act as if each of the investments permitted under these 
conditions were approved by the Required Majority under section 57(f).
    10. No Independent Director will also be a director, general 
partner, managing member or principal, or otherwise an ``affiliated 
person'' (as defined in the Act) of any of the Affiliated Funds.
    11. The expenses, if any, associated with acquiring, holding or 
disposing of any securities acquired in a Co-Investment Transaction 
(including, without limitation, the expenses of the distribution of any 
such securities registered for sale under the Securities Act) will, to 
the extent not payable by the Advisers to Affiliated Funds under their 
respective investment advisory agreements with the Affiliated Funds, be 
shared by the Company and the Affiliated Funds in proportion to the 
relative amounts of the securities to be acquired, held or disposed of, 
as the case may be.
    12. Any transaction fee (including any break-up fees or commitment 
fees but excluding broker's fees contemplated section 17(e) or 57(k) of 
the Act, as applicable), received in connection with a Co-Investment 
Transaction will be distributed to the Company and the Affiliated Funds 
on a pro rata basis based on the amount they invested or committed, as 
the case may be, in such Co-Investment Transaction. If any transaction 
fee is to be held by an Adviser pending consummation of the 
transaction, the fee will be deposited into an account maintained by 
such investment adviser at a bank or banks having the qualifications 
prescribed in section 26(a)(1) of the Act, and the account will earn a 
competitive rate of interest that will also be divided pro rata among 
the Company and the Affiliated Funds based on the amount they invest in 
such Co-Investment Transaction. None of the Affiliated Funds, Advisers, 
nor any affiliated person of the Company will receive additional 
compensation or remuneration of any kind as a result of or in 
connection with a Co-Investment Transaction (other than (a) in the case 
of the Company and the Affiliated Funds, the pro rata transaction fees 
described above and fees or other compensation described in condition 
2(c)(iii)(C); and (b) in the case of the Advisers, investment advisory 
fees paid in accordance with the Company's and the Affiliated Funds' 
respective investment advisory agreements).

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-27696 Filed 11-21-14; 8:45 am]
BILLING CODE 8011-01-P