Excelsior Private Markets Fund II (Master), LLC, et al., 18023-18028 [2017-07539]

Download as PDF Federal Register / Vol. 82, No. 71 / Friday, April 14, 2017 / Notices work for the Federal Government under contract. Number of Respondents: 112,894 (SF 85P); 11,717 (SF 85P–S). Estimated Time per Respondent: 155 minutes (SF 85P); 10 minutes (SF 85P– S). Total Burden Hours: 291,643 (SF 85P); 1,953 (SF 85P–S). U.S. Office of Personnel Management. Kathleen M. McGettigan, Acting Director. [FR Doc. 2017–07609 Filed 4–13–17; 8:45 am] BILLING CODE 6325–53–P POSTAL REGULATORY COMMISSION [Docket Nos. MC2017–110 and CP2017–158, MC2017–111 and CP2017–159, MC2017–112 and CP2017–160, MC2017–113, and CP2017–161] New Postal Products Postal Regulatory Commission. Notice. AGENCY: ACTION: The Commission is noticing a recent Postal Service filing for the Commission’s consideration concerning a negotiated service agreement. This notice informs the public of the filing, invites public comment, and takes other administrative steps. DATES: Comments are due: April 18, 2017. SUMMARY: Submit comments electronically via the Commission’s Filing Online system at https:// www.prc.gov. Those who cannot submit comments electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT section by telephone for advice on filing alternatives. ADDRESSES: FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202–789–6820. SUPPLEMENTARY INFORMATION: Table of Contents I. Introduction II. Docketed Proceeding(s) sradovich on DSK3GMQ082PROD with NOTICES I. Introduction The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list. VerDate Sep<11>2014 16:21 Apr 13, 2017 Jkt 241001 Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request’s acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request. The public portions of the Postal Service’s request(s) can be accessed via the Commission’s Web site (https:// www.prc.gov). Non-public portions of the Postal Service’s request(s), if any, can be accessed through compliance with the requirements of 39 CFR 3007.40. The Commission invites comments on whether the Postal Service’s request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II. II. Docketed Proceeding(s) 1. Docket No(s).: MC2017–110 and CP2017–158; Filing Title: Request of the United States Postal Service to Add Priority Mail Contract 305 to Competitive Product List and Notice of Filing (Under Seal) of Unredacted Governors’ Decision, Contract, and Supporting Data; Filing Acceptance Date: April 10, 2017; Filing Authority: 39 U.S.C. 3642 and 39 CFR 3020.30 et seq.; Public Representative: Max E. Schnidman; Comments Due: April 18, 2017. 2. Docket No(s).: MC2017–111 and CP2017–159; Filing Title: Request of the United States Postal Service to Add Priority Mail Contract 306 to Competitive Product List and Notice of Filing (Under Seal) of Unredacted Governors’ Decision, Contract, and Supporting Data; Filing Acceptance Date: April 10, 2017; Filing Authority: 39 U.S.C. 3642 and 39 CFR 3020.30 et seq.; Public Representative: Max E. Schnidman; Comments Due: April 18, 2017. 3. Docket No(s).: MC2017–112 and CP2017–160; Filing Title: Request of the PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 18023 United States Postal Service to Add Priority Mail Contract 307 to Competitive Product List and Notice of Filing (Under Seal) of Unredacted Governors’ Decision, Contract, and Supporting Data; Filing Acceptance Date: April 10, 2017; Filing Authority: 39 U.S.C. 3642 and 39 CFR 3020.30 et seq.; Public Representative: Katalin K. Clendenin; Comments Due: April 18, 2017. 4. Docket No(s).: MC2017–113 and CP2017–161; Filing Title: Request of the United States Postal Service to Add Priority Mail Express & Priority Mail Contract 45 to Competitive Product List and Notice of Filing (Under Seal) of Unredacted Governors’ Decision, Contract, and Supporting Data; Filing Acceptance Date: April 10, 2017; Filing Authority: 39 U.S.C. 3642 and 39 CFR 3020.30 et seq.; Public Representative: Katalin K. Clendenin; Comments Due: April 18, 2017. This notice will be published in the Federal Register. Stacy L. Ruble, Secretary. [FR Doc. 2017–07563 Filed 4–13–17; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Release No. IC–32597; File No. 812–14548– 05] Excelsior Private Markets Fund II (Master), LLC, et al. April 10, 2017. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. AGENCY: Notice of application for an order under section 17(d) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by section 17(d) of the Act and rule 17d–1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to permit certain closed-end management investment companies to co-invest in portfolio companies with each other and with affiliated investment funds. APPLICANTS: Excelsior Private Markets Fund II (Master), LLC (‘‘Excelsior Private Markets II’’); Excelsior Private Markets Fund III (Master), LLC (‘‘Excelsior Private Markets III’’); NB Crossroads Private Markets Fund IV Holdings LLC (‘‘NB Crossroads’’); UST Global Private Markets Fund, LLC (‘‘UST Global’’); Excelsior Venture E:\FR\FM\14APN1.SGM 14APN1 18024 Federal Register / Vol. 82, No. 71 / Friday, April 14, 2017 / Notices Partners III, LLC (‘‘Excelsior Venture III’’ and, collectively with Excelsior Private Markets II, Excelsior Private Markets III, NB Crossroads and UST Global, the ‘‘Existing Regulated Entities’’); Neuberger Berman Investment Advisers LLC (‘‘NBIA’’); NB Alternatives Advisers LLC (‘‘NBAA’’); NB ASGA Fund Holdings LP, NB Canafund Private Debt LP, NB Caspian Holdings LP, NB CPEG Fund Holdings LP, NB Crossroads XXI—LC Holdings LP, NB Crossroads XXI—MC Holdings LP, NB Crossroads XXI—SS Holdings LP, NB Crossroads XXI—VC Holdings LP, NB Crystal PE Holdings LP, NB Flamingo Private Debt LP, NB Granite Private Debt LP, NB— Iowa’s Private Universities LP, NB LAOF—Holdings LP, NB PEP Holdings Limited, NB Pine Private Debt LP, NB Private Debt Fund LP, NB Private Debt II Holdings LP, NB Private Equity Credit Opportunities Holdings LP, NB Renaissance Partners Holdings S.a.r.l., NB RP Co-Investment & Secondary Fund LLC, NB RPPE Partners LP, NB SBS US 1 Fund LP, NB SOF 2016–A Master LP, NB SOF III Holdings LP, NB SOF IV Holdings LP, NB SOF IV Cayman Holdings LP, NB-Sompo RA Holdings LP, NB Sonoran Fund Limited Partnership, NB Strategic Co-Investment Partners III Holdings LP, NB Wildcats Fund LP, Columbia NB Crossroads Fund II LP, NorthBound Emerging Manager Fund II—A LP, NorthBound NCRS Fund LP, and NYSCRF NB Co-Investment Fund LLC (collectively, the ‘‘Existing Affiliated Funds’’). FOR FURTHER INFORMATION CONTACT: James D. McGinnis, Senior Counsel, at (202) 551–3025 or Holly Hunter-Ceci, Acting Assistant Chief Counsel, at (202) 551–6825 (Chief Counsel’s Office, Division of Investment Management). 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 https:// www.sec.gov/search/search.htm or by calling (202) 551–8090. 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 May 5, 2017, 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, 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. Applicants’ Representations 1. NB Crossroads is a Delaware limited liability corporation organized as a closed-end management investment company. NB Crossroads’s investment objective is to provide attractive riskadjusted returns through diversified portfolio of professionally managed private equity funds and select direct investments in portfolio companies. The board of managers (‘‘Board’’) of NB Crossroads has six members, each of whom is not an ‘‘interested person’’ of NB Crossroads within the meaning of Section 2(a)(19) of the Act (each is an ‘‘Independent Manager’’).1 2. Excelsior Private Markets II is a Delaware limited liability company organized as a closed-end management investment company. Excelsior Private Markets II seeks to provide attractive long-term returns to investors through investments in a diversified portfolio of professionally managed private equity funds and select direct investments in portfolio companies. The Board of Excelsior Private Markets II has six members, each of whom is an Independent Manager. 3. Excelsior Private Markets III is a Delaware limited liability company organized as a closed-end management investment company. Excelsior Private Markets III seeks to provide attractive long-term returns to investors through investments in a diversified portfolio of professionally managed private equity funds and select direct investments in portfolio companies. The Board of Excelsior Private Markets III has six members, each of whom is an Independent Manager. 4. UST Global is a Delaware limited liability company organized as a closedend management v company. UST Global seeks long-term capital appreciation by investing in a Secretary, U.S. Securities and Exchange Commission, 100 F St. NE., Washington, DC 20549–1090. 1 The term ‘‘Independent Manager’’ refers to the independent managers, directors or trustees of any Regulated Entity (defined below). The application was filed on September 17, 2015, and amended on February 4, 2016; September 20, 2016; February 27, 2017; and March 28, 2017. FILING DATES: HEARING OR NOTIFICATION OF HEARING: sradovich on DSK3GMQ082PROD with NOTICES Applicants: 1290 Avenue of the Americas, New York, NY 10104. ADDRESSES: VerDate Sep<11>2014 16:21 Apr 13, 2017 Jkt 241001 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 diversified group of private equity funds formed by a fund sponsor or sponsors experienced in making private equity investments. The Board of UST Global has six members, each of whom is an Independent Manager. 5. Excelsior Venture III is a Delaware limited liability company organized as a closed-end management v company. Excelsior Venture III seeks long-term capital appreciation primarily by investing in private domestic venture capital companies and other private companies, and, to a lesser extent, domestic and international private funds, negotiated private investments in public companies and international direct investments. The Board of Excelsior Venture III has three members, each of whom is an Independent Manager. 6. NBIA is a Delaware limited liability company that is registered as an investment adviser with the Commission under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). NBIA serves as the investment adviser to each Existing Regulated Entity. NBIA is an indirect, whollyowned subsidiary of Neuberger Berman Group LLC (‘‘Neuberger Berman’’). 7. NBAA is a Delaware limited liability company that is registered as an investment adviser with the Commission under the Advisers Act. NBAA serves as the investment adviser to certain Existing Affiliated Funds and as the sub-adviser to each Existing Regulated Entity. NBAA is an indirect, wholly-owned subsidiary of Neuberger Berman. 8. The Existing Affiliated Funds pursue strategies focused on investing in a portfolio of professionally managed private equity funds and select direct investments in portfolio companies. Each Existing Affiliated Fund is advised by an Existing NB Adviser 2 and would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act. 9. Applicants seek an order (‘‘Order’’) to permit a Regulated Entity 3 and one or more other Regulated Entities and one or more Affiliated Funds 4 to (a) 2 ‘‘Existing NB Adviser’’ means NBIA or NBAA. Entity’’ refers to any Existing Regulated Entity and any Future Regulated Entity. ‘‘Future Regulated Entity’’ means any closed-end management investment company formed in the future that is registered under the Act and is advised by a Regulated Entity Adviser and subadvised by NBAA. ‘‘Regulated Entity Adviser’’ means (a) NBIA and (b) any future investment adviser that controls, is controlled by, or is under common control with NBIA and is registered as an investment adviser under the Advisers Act. 4 ‘‘Affiliated Fund’’ means any Existing Affiliated Fund or any Future Affiliated Fund. ‘‘Future Affiliated Fund’’ means any investment fund that would be an ‘‘investment company’’ but for section 3(c)(1) or 3(c)(7) of the Act, is formed in the future, 3 ‘‘Regulated E:\FR\FM\14APN1.SGM 14APN1 Federal Register / Vol. 82, No. 71 / Friday, April 14, 2017 / Notices sradovich on DSK3GMQ082PROD with NOTICES participate in the same investment opportunities through a proposed coinvestment program where such participation would otherwise be prohibited under section 17 of the Act; and (b) make additional investments in securities of such issuers (‘‘Follow-On Investments’’), including through the exercise of warrants, conversion privileges, and other rights to purchase securities of the issuers. ‘‘Co-Investment Transaction’’ means any transaction in which a Regulated Entity (or its WhollyOwned Investment Subsidiary, as defined below) participated together with one or more other Regulated Entities and/or Affiliated Funds in reliance on the requested Order. ‘‘Potential Co-Investment Transaction’’ means any investment opportunity in which a Regulated Entity (or its WhollyOwned Investment Subsidiaries) could not participate together with one or more other Regulated Entities and/or one or more Affiliated Funds without obtaining and relying on the Order.5 10. Applicants state that a Regulated Entity may, from time to time, form one or more Wholly-Owned Investment Subsidiaries.6 Such a subsidiary would be prohibited from investing in a CoInvestment Transaction with any other Regulated Entity or Affiliated Fund because it would be a company controlled by its parent Regulated Entity for purposes of rule 17d-1. Applicants request that each Wholly-Owned Investment Subsidiary be permitted to participate in Co-Investment Transactions in lieu of its parent Regulated Entity and that the WhollyOwned Investment Subsidiary’s participation in any such transaction be treated, for purposes of the Order, as though the parent Regulated Entity were and is advised by an Adviser. The term ‘‘Adviser’’ means any Existing NB Adviser or any Regulated Entity Adviser. No Affiliated Fund is or will be a subsidiary of a Regulated Entity. 5 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. 6 The term ‘‘Wholly-Owned Investment Subsidiary’’ means an entity: (a) That is whollyowned by a Regulated Entity (with such Regulated Entity at all times holding, beneficially and of record, 100% of the voting and economic interests); (b) whose sole business purpose is to hold one or more investments on behalf of such Regulated Entity; (c) with respect to which the board of directors of such Regulated Entity has the sole authority to make all determinations with respect to the entity’s participation under the conditions of the application; and (d) that would be an investment company but for section 3(c)(1) or 3(c)(7) of the Act. All subsidiaries participating in Co-Investment Transactions will be Wholly-Owned Investment Subsidiaries and will have Objectives and Strategies (as defined below) that are either the same as, or a subset of, their parent Regulated Entity’s Objectives and Strategies. VerDate Sep<11>2014 16:21 Apr 13, 2017 Jkt 241001 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 Regulated Entity’s investments and, therefore, no conflicts of interest could arise between the Regulated Entity and the Wholly-Owned Investment Subsidiary. The Regulated Entity’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 Regulated Entity’s Board would be informed of, and take into consideration, any proposed use of a Wholly-Owned Investment Subsidiary in the Regulated Entity’s place. If the Regulated Entity 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 Regulated Entity and the WhollyOwned Investment Subsidiary. 11. When considering Potential CoInvestment Transactions for any Regulated Entity, the relevant Adviser will consider only the Objectives and Strategies,7 investment policies, investment positions, capital available for investment, and other pertinent factors applicable to that Regulated Entity. The Advisers expect that any portfolio company that is an appropriate investment for a Regulated Entity should also be an appropriate investment for one or more other Regulated Entities and/or one or more Affiliated Funds, with certain exceptions based on available capital or diversification.8 12. Other than pro rata dispositions and Follow-On Investments as provided in conditions 7 and 8, and after making the determinations required in conditions 1 and 2(a), the applicable Adviser will present each Potential CoInvestment Transaction and the proposed allocation to the directors of the Board eligible to vote on that CoInvestment Transaction (the ‘‘Eligible Directors’’) 9 and the majority of such 7 The term ‘‘Objectives and Strategies’’ means a Regulated Entity’s investment objectives and strategies as described in the Regulated Entity’s registration statement on Form N–2, other filings the Regulated Entity has made with the Commission under the Securities Act of 1933 (the ‘‘Securities Act’’) or the Securities Exchange Act of 1934, and the Regulated Entity’s reports to shareholders. 8 The Regulated Entities, however, will not be obligated to invest, or co-invest, when investment opportunities are referred to them. 9 Eligible Directors may not have a financial interest in such transaction, plan, or arrangement. PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 18025 managers of the Board who are Independent Managers (a ‘‘Required Majority’’) will approve each CoInvestment Transaction prior to any investment by the participating Regulated Entity. 13. With respect to the pro rata dispositions and Follow-On Investments provided in conditions 7 and 8, a Regulated Entity may participate in a pro rata disposition or Follow-On Investment without obtaining prior approval of the Required Majority if, among other things: (i) The proposed participation of each Regulated Entity and each Affiliated Fund in such disposition is proportionate to its outstanding investments in the issuer immediately preceding the disposition or Follow-On Investment, as the case may be; and (ii) the Board of the Regulated Entity has approved that Regulated Entity’s participation in pro rata dispositions and Follow-On Investments as being in the best interests of the Regulated Entity. If the Board does not so approve, any such disposition or Follow-On Investment will be submitted to the Regulated Entity’s Eligible Directors. The Board of any Regulated Entity may at any time rescind, suspend or qualify its approval of pro rata dispositions and Follow-On Investments with the result that all dispositions and/or Follow-On Investments must be submitted to the Eligible Directors. 14. No Independent Manager of a Regulated Entity will have a direct or indirect financial interest in any CoInvestment Transaction (other than indirectly through share ownership in one of the Regulated Entities), including any interest in any company whose securities would be acquired in a CoInvestment Transaction. 15. Under condition 15, if an Adviser, its principals, or any person controlling, controlled by, or under common control with the Adviser or its principals, and the Affiliated Funds (collectively, the ‘‘Holders’’) own in the aggregate more than 25 percent of the outstanding voting shares of a Regulated Entity (the ‘‘Shares’’), then the Holders will vote such Shares as directed by an independent third party when voting on matters specified in the condition. Applicants believe that this condition will ensure that the Independent Managers will act independently in evaluating the co-investment program, because the ability of an Adviser or its principals to influence the Independent Managers by a suggestion, explicit or implied, that the Independent Managers can be removed will be limited significantly. Applicants represent that the Independent Managers will evaluate E:\FR\FM\14APN1.SGM 14APN1 18026 Federal Register / Vol. 82, No. 71 / Friday, April 14, 2017 / Notices and approve any such independent third party, taking into account its qualifications, reputation for independence, cost to the Regulated Entity’s shareholders, and other factors that they deem relevant. sradovich on DSK3GMQ082PROD with NOTICES Applicants’ Legal Analysis 1. Section 17(d) of the Act and rule 17d–1 under the Act prohibit 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. Applicants state that in the absence of the requested relief, the Regulated Entities may be, in some circumstances, limited in their ability to participate in attractive and appropriate investment opportunities. Applicants believe that the proposed terms and conditions will ensure that the Co-Investment Transactions are consistent with the protection of each Regulated Entity’s shareholders and with the purposes intended by the policies and provisions of the Act. Applicants state that the Regulated Entities’ participation in the Co-Investment Transactions will be consistent with the provisions, policies, and purposes of the Act and on a basis that is not different from or less advantageous than that of other participants. Applicants’ Conditions Applicants agree that the Order will be subject to the following conditions: 1. Each time an Adviser considers a Potential Co-Investment Transaction for another Regulated Entity or an Affiliated Fund that falls within a Regulated Entity’s then-current Objectives and Strategies, the Regulated Entity’s Adviser will make an independent determination of the appropriateness of the investment for the Regulated Entity in light of the Regulated Entity’s thencurrent circumstances. 2. (a) If the Adviser deems a Regulated Entity’s participation in any Potential Co-Investment Transaction to be appropriate for the Regulated Entity, the Adviser will then determine an appropriate level of investment for the Regulated Entity. (b) If the aggregate amount recommended by the applicable Adviser to be invested by the applicable VerDate Sep<11>2014 16:21 Apr 13, 2017 Jkt 241001 Regulated Entity in the Potential CoInvestment Transaction together with the amount proposed to be invested by the other participating Regulated Entities and Affiliated Funds, collectively, in the same transaction, exceeds the amount of the investment opportunity, the investment opportunity will be allocated among them pro rata based on each participant’s capital available for investment in the asset class being allocated, up to the amount proposed to be invested by each. The applicable Adviser will provide the Eligible Directors of each participating Regulated Entity with information concerning each participating party’s available capital to assist the Eligible Directors with their review of the Regulated Entity’s investments for compliance with these allocation procedures. (c) After making the determinations required in conditions 1 and 2(a), the applicable Adviser will distribute written information concerning the Potential Co-Investment Transaction (including the amount proposed to be invested by each Regulated Entity and each Affiliated Fund) to the Eligible Directors of each participating Regulated Entity for their consideration. A Regulated Entity will co-invest with another Regulated Entity or an Affiliated Fund only if, prior to the Regulated Entity’s participation in the Potential Co-Investment Transaction, a Required Majority concludes that: (i) The terms of the Potential CoInvestment Transaction, including the consideration to be paid, are reasonable and fair to the Regulated Entity and its investors and do not involve overreaching in respect of the Regulated Entity or its investors on the part of any person concerned; (ii) the Potential Co-Investment Transaction is consistent with: (A) The interests of the Regulated Entity’s investors; and (B) the Regulated Entity’s then-current Objectives and Strategies; (iii) the investment by any other Regulated Entities or any Affiliated Funds would not disadvantage the Regulated Entity, and participation by the Regulated Entity would not be on a basis different from or less advantageous than that of any other Regulated Entities or any Affiliated Funds; provided that, if any other Regulated Entity or any Affiliated Fund, but not the Regulated Entity itself, 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 shall not PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 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; and (B) the applicable Adviser agrees to, and does, provide periodic reports to the Board of the Regulated Entity with respect to the actions of such director or the information received by such 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 any Regulated Entity or any Affiliated Fund or any affiliated person of any Regulated Entity or any Affiliated Fund receives in connection with the right of a Regulated Entity or an 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 participating Affiliated Funds (who may each, in turn, share its portion with its affiliated persons) and the participating Regulated Entities in accordance with the amount of each party’s investment; and (iv) the proposed investment by the Regulated Entity will not benefit any Adviser, the other Regulated Entities, the Affiliated Funds or any affiliated person of any of them (other than the parties to the Co-Investment Transaction), except (A) to the extent permitted by condition 13, (B) to the extent permitted by section 17(e) of the Act, as applicable, (C) indirectly, as a result of an interest in the securities issued by one of the parties to the CoInvestment Transaction, or (D) in the case of fees or other compensation described in condition 2(c)(iii)(C). 3. Each Regulated Entity has the right to decline to participate in any Potential Co-Investment Transaction or to invest less than the amount proposed. 4. The applicable Adviser will present to the Board of each Regulated Entity, on a quarterly basis, a record of all investments in Potential Co-Investment Transactions made by any of the other Regulated Entities or Affiliated Funds during the preceding quarter that fell within the Regulated Entity’s thencurrent Objectives and Strategies that were not made available to the Regulated Entity, and an explanation of why the investment opportunities were not offered to the Regulated Entity. All information presented to the Board pursuant to this condition will be kept for the life of the Regulated Entity and at least two years thereafter, and will be E:\FR\FM\14APN1.SGM 14APN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 71 / Friday, April 14, 2017 / Notices subject to examination by the Commission and its staff. 5. Except for Follow-On Investments made in accordance with condition 8,10 a Regulated Entity will not invest in reliance on the Order in any issuer in which another Regulated Entity, Affiliated Fund, or any affiliated person of another Regulated Entity or Affiliated Fund is an existing investor. 6. A Regulated Entity will not participate in any Potential CoInvestment Transaction unless the terms, conditions, price, class of securities to be purchased, settlement date, and registration rights will be the same for each participating Regulated Entity and Affiliated Fund. The grant to another Regulated Entity or an Affiliated Fund, but not the Regulated Entity, 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 6, if conditions 2(c)(iii)(A), (B) and (C) are met. 7. (a) If any Regulated Entity or an Affiliated Fund elects to sell, exchange or otherwise dispose of an interest in a security that was acquired in a CoInvestment Transaction, the applicable Adviser will: (i) Notify each Regulated Entity that participated in the Co-Investment Transaction of the proposed disposition at the earliest practical time; and (ii) formulate a recommendation as to participation by each Regulated Entity in the disposition. (b) Each Regulated Entity 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 Regulated Entities and Affiliated Funds. (c) A Regulated Entity may participate in such disposition without obtaining prior approval of the Required Majority if: (i) The proposed participation of each Regulated Entity and each Affiliated Fund in such disposition is proportionate to its outstanding investments in the issuer immediately preceding the disposition; (ii) the Board of the Regulated Entity has approved as being in the best interests of the Regulated Entity the ability to participate in such dispositions on a pro rata basis (as described in greater detail 10 This exception applies only to Follow-On Investments by a Regulated Entity in issuers in which that Regulated Entity already holds investments. VerDate Sep<11>2014 16:21 Apr 13, 2017 Jkt 241001 in the application); and (iii) the Board of the Regulated Entity is provided on a quarterly basis with a list of all dispositions made in accordance with this condition. In all other cases, the Adviser will provide its written recommendation as to the Regulated Entity’s participation to the Regulated Entity’s Eligible Directors, and the Regulated Entity will participate in such disposition solely to the extent that a Required Majority determines that it is in the Regulated Entity’s best interests. (d) Each Regulated Entity and each Affiliated Fund will bear its own expenses in connection with any such disposition. 8. (a) If a Regulated Entity or an Affiliated Fund desires to make a Follow-On Investment in a portfolio company whose securities were acquired in a Co-Investment Transaction, the applicable Adviser will: (i) Notify each Regulated Entity that participated in the Co-Investment Transaction of the proposed transaction at the earliest practical time; and (ii) formulate a recommendation as to the proposed participation, including the amount of the proposed Follow-On Investment, by each Regulated Entity. (b) A Regulated Entity may participate in such Follow-On Investment without obtaining prior approval of the Required Majority if: (i) The proposed participation of each Regulated Entity and each Affiliated Fund in such investment is proportionate to its outstanding investments in the issuer immediately preceding the Follow-On Investment; and (ii) the Board of the Regulated Entity has approved as being in the best interests of the Regulated Entity the ability to participate in Follow-On Investments on a pro rata basis (as described in greater detail in the application). In all other cases, the Adviser will provide its written recommendation as to the Regulated Entity’s participation to the Eligible Directors, and the Regulated Entity will participate in such Follow-On Investment solely to the extent that a Required Majority determines that it is in the Regulated Entity’s best interests. (c) If, with respect to any Follow-On Investment: (i) The amount of a Follow-On Investment is not based on the Regulated Entities’ and the Affiliated Funds’ outstanding investments immediately preceding the Follow-On Investment; and (ii) the aggregate amount recommended by the Adviser to be invested by each Regulated Entity in the Follow-On Investment, together with the amount proposed to be invested by PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 18027 the participating Affiliated Funds in the same transaction, exceeds the amount of the opportunity; then the amount invested by each such party will be allocated among them pro rata based on each party’s capital available for investment in the asset class being allocated, up to the amount proposed to be invested by each. (d) The acquisition of Follow-On Investments as permitted by this condition will be considered a CoInvestment Transaction for all purposes and subject to the other conditions set forth in the application. 9. The Independent Managers of each Regulated Entity will be provided quarterly for review all information concerning Potential Co-Investment Transactions and Co-Investment Transactions, including investments made by other Regulated Entities and the Affiliated Funds that the Regulated Entity considered but declined to participate in, so that the Independent Managers may determine whether all investments made during the preceding quarter, including those investments which the Regulated Entity considered but declined to participate in, comply with the conditions of the Order. In addition, the Independent Managers will consider at least annually the continued appropriateness for the Regulated Entity of participating in new and existing Co-Investment Transactions. 10. Each Regulated Entity will maintain the records required by section 57(f)(3) of the Act as if each of the Regulated Entities were a business development company (as defined in section 2(a)(48) of the Act) and each of the investments permitted under these conditions were approved by the Required Majority under section 57(f) of the Act. 11. No Independent Manager of a Regulated Entity will also be a director, general partner, managing member or principal, or otherwise an ‘‘affiliated person’’ (as defined in the Act) of an Affiliated Fund. 12. The expenses, if any, associated with acquiring, holding or disposing of any securities acquired in a CoInvestment 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 an Adviser under the investment advisory agreements with the Regulated Entities and the Affiliated Funds, be shared by the Affiliated Funds and the Regulated Entities in proportion to the relative amounts of the securities held or to be acquired or disposed of, as the case may be. E:\FR\FM\14APN1.SGM 14APN1 sradovich on DSK3GMQ082PROD with NOTICES 18028 Federal Register / Vol. 82, No. 71 / Friday, April 14, 2017 / Notices 13. Any transaction fee 11 (including break-up or commitment fees but excluding broker’s fees contemplated by section 17(e) of the Act, as applicable), received in connection with a CoInvestment Transaction will be distributed to the participating Regulated Entities and Affiliated Funds on a pro rata basis based on the amounts they invested or committed, as the case may be, in such Co-Investment Transaction. If any transaction fee is to be held by the Adviser pending consummation of the transaction, the fee will be deposited into an account maintained by the 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 participating Regulated Entities and Affiliated Funds based on the amounts they invest in such Co-Investment Transaction. None of the Affiliated Funds, the Advisers, the other Regulated Entities or any affiliated person of the Regulated Entities or Affiliated Funds 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 Regulated Entities 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 agreements between the Advisers and the Regulated Entities or the Affiliated Funds). 14. The Advisers will each maintain policies and procedures reasonably designed to ensure compliance with the foregoing conditions. These policies and procedures will require, among other things, that the applicable Regulated Entity Adviser will be notified of all Potential Co-Investment Transactions that fall within a Regulated Entity’s then-current Objectives and Strategies and will be given sufficient information to make its independent determination and recommendations under conditions 1, 2(a), 7 and 8. 15. If the Holders own in the aggregate more than 25 percent of the Shares of a Regulated Entity, then the Holders will vote such Shares as directed by an independent third party when voting on (1) the election of directors; (2) the removal of one or more directors; or (3) all other matters under either the Act or 11 Applicants are not requesting and the staff is not providing any relief for transaction fees received in connection with any Co-Investment Transaction. VerDate Sep<11>2014 16:21 Apr 13, 2017 Jkt 241001 applicable State law affecting the Board’s composition, size or manner of election. 16. Each Regulated Entity’s chief compliance officer, as defined in Rule 38a–1(a)(4) under the 1940 Act, will prepare an annual report for its Board each year that evaluates (and documents the basis of that evaluation) the Regulated Entity’s compliance with the terms and conditions of the application and the procedures established to achieve such compliance. For the Commission, by the Division of Investment Management, under delegated authority. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–07539 Filed 4–13–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80416; File No. SR–MIAX– 2017–15] Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule April 10, 2017. Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 6, 2017, Miami International Securities Exchange LLC (‘‘MIAX Options’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing a proposal to amend the MIAX Options Fee Schedule (the ‘‘Fee Schedule’’). The Exchange initially filed the proposal on March 29, 2017 (SR–MIAX– 2017–14). That filing was withdrawn and replaced with the current filing (SR–MIAX–2017–15). The text of the proposed rule change is available on the Exchange’s Web site at https://www.miaxoptions.com/rulefilings, at MIAX’s principal office, and 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00062 Fmt 4703 Sfmt 4703 at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fee Schedule to permit Exchange Market Makers 3 to appoint Electronic Exchange Members 4 (‘‘EEMs’’), and vice versa, as ‘‘Affiliates,’’ solely for purposes of calculating transaction volume in order to qualify for certain transaction rebates and fee incentives under the Fee Schedule. The Exchange notes that this concept of appointment between market makers and order flow providers currently exists at a number of other exchanges, including Bats BZX Exchange, Inc. (‘‘BATS’’), Bats EDGX Exchange, Inc. (‘‘EDGX’’), Chicago Board Options Exchange, Incorporated (‘‘CBOE’’), NYSE Amex Options LLC (‘‘Amex Options’’), and NASDAQ PHLX LLC (‘‘PHLX’’), as more fully discussed below. In order for the Exchange to implement this concept of appointment, the Exchange proposes to amend the definition of ‘‘Affiliate’’ contained in Section (1)(a)(i), footnote 1, of the Fee Schedule. Footnote 1 currently reads: ‘‘For purposes of the MIAX Options Fee Schedule, the term ‘‘Affiliate’’ means an affiliate of a Member of at least 75% common ownership between the firms as reflected on each firm’s Form BD, Schedule A (‘‘Affiliate’’).’’ 3 The term ‘‘Market Makers’’ refers to Lead Market Makers (‘‘LMMs’’), Primary Lead Market Makers (‘‘PLMMs’’), and Registered Market Makers (‘‘RMMs’’) collectively. See Exchange Rule 100. A Directed Order Lead Market Maker (‘‘DLMM’’) and Directed Primary Lead Market Maker (‘‘DPLMM’’) is a party to a transaction being allocated to the LMM or PLMM and is the result of an order that has been directed to the LMM or PLMM. See Footnote 2 to the Fee Schedule. 4 The term ‘‘EEM’’ refers to the holder of a Trading Permit who is not a Market Maker. See Exchange Rule 100. E:\FR\FM\14APN1.SGM 14APN1

Agencies

[Federal Register Volume 82, Number 71 (Friday, April 14, 2017)]
[Notices]
[Pages 18023-18028]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07539]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-32597; File No. 812-14548-05]


Excelsior Private Markets Fund II (Master), LLC, et al.

April 10, 2017.
AGENCY:  Securities and Exchange Commission (``Commission'').

ACTION:  Notice.

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    Notice of application for an order under section 17(d) of the 
Investment Company Act of 1940 (the ``Act'') and rule 17d-1 under the 
Act to permit certain joint transactions otherwise prohibited by 
section 17(d) of the Act and rule 17d-1 under the Act.

Summary of Application: Applicants request an order to permit certain 
closed-end management investment companies to co-invest in portfolio 
companies with each other and with affiliated investment funds.

Applicants: Excelsior Private Markets Fund II (Master), LLC 
(``Excelsior Private Markets II''); Excelsior Private Markets Fund III 
(Master), LLC (``Excelsior Private Markets III''); NB Crossroads 
Private Markets Fund IV Holdings LLC (``NB Crossroads''); UST Global 
Private Markets Fund, LLC (``UST Global''); Excelsior Venture

[[Page 18024]]

Partners III, LLC (``Excelsior Venture III'' and, collectively with 
Excelsior Private Markets II, Excelsior Private Markets III, NB 
Crossroads and UST Global, the ``Existing Regulated Entities''); 
Neuberger Berman Investment Advisers LLC (``NBIA''); NB Alternatives 
Advisers LLC (``NBAA''); NB ASGA Fund Holdings LP, NB Canafund Private 
Debt LP, NB Caspian Holdings LP, NB CPEG Fund Holdings LP, NB 
Crossroads XXI--LC Holdings LP, NB Crossroads XXI--MC Holdings LP, NB 
Crossroads XXI--SS Holdings LP, NB Crossroads XXI--VC Holdings LP, NB 
Crystal PE Holdings LP, NB Flamingo Private Debt LP, NB Granite Private 
Debt LP, NB--Iowa's Private Universities LP, NB LAOF--Holdings LP, NB 
PEP Holdings Limited, NB Pine Private Debt LP, NB Private Debt Fund LP, 
NB Private Debt II Holdings LP, NB Private Equity Credit Opportunities 
Holdings LP, NB Renaissance Partners Holdings S.a.r.l., NB RP Co-
Investment & Secondary Fund LLC, NB RPPE Partners LP, NB SBS US 1 Fund 
LP, NB SOF 2016-A Master LP, NB SOF III Holdings LP, NB SOF IV Holdings 
LP, NB SOF IV Cayman Holdings LP, NB-Sompo RA Holdings LP, NB Sonoran 
Fund Limited Partnership, NB Strategic Co-Investment Partners III 
Holdings LP, NB Wildcats Fund LP, Columbia NB Crossroads Fund II LP, 
NorthBound Emerging Manager Fund II--A LP, NorthBound NCRS Fund LP, and 
NYSCRF NB Co-Investment Fund LLC (collectively, the ``Existing 
Affiliated Funds'').

Filing Dates: The application was filed on September 17, 2015, and 
amended on February 4, 2016; September 20, 2016; February 27, 2017; and 
March 28, 2017.

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 May 5, 2017, 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, 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, U.S. Securities and Exchange Commission, 100 F 
St. NE., Washington, DC 20549-1090. Applicants: 1290 Avenue of the 
Americas, New York, NY 10104.

FOR FURTHER INFORMATION CONTACT:  James D. McGinnis, Senior Counsel, at 
(202) 551-3025 or Holly Hunter-Ceci, Acting Assistant Chief Counsel, at 
(202) 551-6825 (Chief Counsel's Office, Division of Investment 
Management).

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 https://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. NB Crossroads is a Delaware limited liability corporation 
organized as a closed-end management investment company. NB 
Crossroads's investment objective is to provide attractive risk-
adjusted returns through diversified portfolio of professionally 
managed private equity funds and select direct investments in portfolio 
companies. The board of managers (``Board'') of NB Crossroads has six 
members, each of whom is not an ``interested person'' of NB Crossroads 
within the meaning of Section 2(a)(19) of the Act (each is an 
``Independent Manager'').\1\
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    \1\ The term ``Independent Manager'' refers to the independent 
managers, directors or trustees of any Regulated Entity (defined 
below).
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    2. Excelsior Private Markets II is a Delaware limited liability 
company organized as a closed-end management investment company. 
Excelsior Private Markets II seeks to provide attractive long-term 
returns to investors through investments in a diversified portfolio of 
professionally managed private equity funds and select direct 
investments in portfolio companies. The Board of Excelsior Private 
Markets II has six members, each of whom is an Independent Manager.
    3. Excelsior Private Markets III is a Delaware limited liability 
company organized as a closed-end management investment company. 
Excelsior Private Markets III seeks to provide attractive long-term 
returns to investors through investments in a diversified portfolio of 
professionally managed private equity funds and select direct 
investments in portfolio companies. The Board of Excelsior Private 
Markets III has six members, each of whom is an Independent Manager.
    4. UST Global is a Delaware limited liability company organized as 
a closed-end management v company. UST Global seeks long-term capital 
appreciation by investing in a diversified group of private equity 
funds formed by a fund sponsor or sponsors experienced in making 
private equity investments. The Board of UST Global has six members, 
each of whom is an Independent Manager.
    5. Excelsior Venture III is a Delaware limited liability company 
organized as a closed-end management v company. Excelsior Venture III 
seeks long-term capital appreciation primarily by investing in private 
domestic venture capital companies and other private companies, and, to 
a lesser extent, domestic and international private funds, negotiated 
private investments in public companies and international direct 
investments. The Board of Excelsior Venture III has three members, each 
of whom is an Independent Manager.
    6. NBIA is a Delaware limited liability company that is registered 
as an investment adviser with the Commission under the Investment 
Advisers Act of 1940 (the ``Advisers Act''). NBIA serves as the 
investment adviser to each Existing Regulated Entity. NBIA is an 
indirect, wholly-owned subsidiary of Neuberger Berman Group LLC 
(``Neuberger Berman'').
    7. NBAA is a Delaware limited liability company that is registered 
as an investment adviser with the Commission under the Advisers Act. 
NBAA serves as the investment adviser to certain Existing Affiliated 
Funds and as the sub-adviser to each Existing Regulated Entity. NBAA is 
an indirect, wholly-owned subsidiary of Neuberger Berman.
    8. The Existing Affiliated Funds pursue strategies focused on 
investing in a portfolio of professionally managed private equity funds 
and select direct investments in portfolio companies. Each Existing 
Affiliated Fund is advised by an Existing NB Adviser \2\ and would be 
an investment company but for section 3(c)(1) or 3(c)(7) of the Act.
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    \2\ ``Existing NB Adviser'' means NBIA or NBAA.
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    9. Applicants seek an order (``Order'') to permit a Regulated 
Entity \3\ and one or more other Regulated Entities and one or more 
Affiliated Funds \4\ to (a)

[[Page 18025]]

participate in the same investment opportunities through a proposed co-
investment program where such participation would otherwise be 
prohibited under section 17 of the Act; and (b) make additional 
investments in securities of such issuers (``Follow-On Investments''), 
including through the exercise of warrants, conversion privileges, and 
other rights to purchase securities of the issuers. ``Co-Investment 
Transaction'' means any transaction in which a Regulated Entity (or its 
Wholly-Owned Investment Subsidiary, as defined below) participated 
together with one or more other Regulated Entities and/or Affiliated 
Funds in reliance on the requested Order. ``Potential Co-Investment 
Transaction'' means any investment opportunity in which a Regulated 
Entity (or its Wholly-Owned Investment Subsidiaries) could not 
participate together with one or more other Regulated Entities and/or 
one or more Affiliated Funds without obtaining and relying on the 
Order.\5\
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    \3\ ``Regulated Entity'' refers to any Existing Regulated Entity 
and any Future Regulated Entity. ``Future Regulated Entity'' means 
any closed-end management investment company formed in the future 
that is registered under the Act and is advised by a Regulated 
Entity Adviser and sub-advised by NBAA. ``Regulated Entity Adviser'' 
means (a) NBIA and (b) any future investment adviser that controls, 
is controlled by, or is under common control with NBIA and is 
registered as an investment adviser under the Advisers Act.
    \4\ ``Affiliated Fund'' means any Existing Affiliated Fund or 
any Future Affiliated Fund. ``Future Affiliated Fund'' means any 
investment fund that would be an ``investment company'' but for 
section 3(c)(1) or 3(c)(7) of the Act, is formed in the future, and 
is advised by an Adviser. The term ``Adviser'' means any Existing NB 
Adviser or any Regulated Entity Adviser. No Affiliated Fund is or 
will be a subsidiary of a Regulated Entity.
    \5\ 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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    10. Applicants state that a Regulated Entity may, from time to 
time, form one or more Wholly-Owned Investment Subsidiaries.\6\ Such a 
subsidiary would be prohibited from investing in a Co-Investment 
Transaction with any other Regulated Entity or Affiliated Fund because 
it would be a company controlled by its parent Regulated Entity for 
purposes of rule 17d-1. Applicants request that each Wholly-Owned 
Investment Subsidiary be permitted to participate in Co-Investment 
Transactions in lieu of its parent Regulated Entity and that the 
Wholly-Owned Investment Subsidiary's participation in any such 
transaction be treated, for purposes of the Order, as though the parent 
Regulated Entity 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 Regulated Entity's investments and, therefore, no 
conflicts of interest could arise between the Regulated Entity and the 
Wholly-Owned Investment Subsidiary. The Regulated Entity'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 Regulated Entity's Board would be informed of, and 
take into consideration, any proposed use of a Wholly-Owned Investment 
Subsidiary in the Regulated Entity's place. If the Regulated Entity 
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 Regulated Entity and the Wholly-Owned Investment Subsidiary.
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    \6\ The term ``Wholly-Owned Investment Subsidiary'' means an 
entity: (a) That is wholly-owned by a Regulated Entity (with such 
Regulated Entity at all times holding, beneficially and of record, 
100% of the voting and economic interests); (b) whose sole business 
purpose is to hold one or more investments on behalf of such 
Regulated Entity; (c) with respect to which the board of directors 
of such Regulated Entity has the sole authority to make all 
determinations with respect to the entity's participation under the 
conditions of the application; and (d) that would be an investment 
company but for section 3(c)(1) or 3(c)(7) of the Act. All 
subsidiaries participating in Co-Investment Transactions will be 
Wholly-Owned Investment Subsidiaries and will have Objectives and 
Strategies (as defined below) that are either the same as, or a 
subset of, their parent Regulated Entity's Objectives and 
Strategies.
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    11. When considering Potential Co-Investment Transactions for any 
Regulated Entity, the relevant Adviser will consider only the 
Objectives and Strategies,\7\ investment policies, investment 
positions, capital available for investment, and other pertinent 
factors applicable to that Regulated Entity. The Advisers expect that 
any portfolio company that is an appropriate investment for a Regulated 
Entity should also be an appropriate investment for one or more other 
Regulated Entities and/or one or more Affiliated Funds, with certain 
exceptions based on available capital or diversification.\8\
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    \7\ The term ``Objectives and Strategies'' means a Regulated 
Entity's investment objectives and strategies as described in the 
Regulated Entity's registration statement on Form N-2, other filings 
the Regulated Entity has made with the Commission under the 
Securities Act of 1933 (the ``Securities Act'') or the Securities 
Exchange Act of 1934, and the Regulated Entity's reports to 
shareholders.
    \8\ The Regulated Entities, however, will not be obligated to 
invest, or co-invest, when investment opportunities are referred to 
them.
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    12. Other than pro rata dispositions and Follow-On Investments as 
provided in conditions 7 and 8, and after making the determinations 
required in conditions 1 and 2(a), the applicable Adviser will present 
each Potential Co-Investment Transaction and the proposed allocation to 
the directors of the Board eligible to vote on that Co-Investment 
Transaction (the ``Eligible Directors'') \9\ and the majority of such 
managers of the Board who are Independent Managers (a ``Required 
Majority'') will approve each Co-Investment Transaction prior to any 
investment by the participating Regulated Entity.
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    \9\ Eligible Directors may not have a financial interest in such 
transaction, plan, or arrangement.
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    13. With respect to the pro rata dispositions and Follow-On 
Investments provided in conditions 7 and 8, a Regulated Entity may 
participate in a pro rata disposition or Follow-On Investment without 
obtaining prior approval of the Required Majority if, among other 
things: (i) The proposed participation of each Regulated Entity and 
each Affiliated Fund in such disposition is proportionate to its 
outstanding investments in the issuer immediately preceding the 
disposition or Follow-On Investment, as the case may be; and (ii) the 
Board of the Regulated Entity has approved that Regulated Entity's 
participation in pro rata dispositions and Follow-On Investments as 
being in the best interests of the Regulated Entity. If the Board does 
not so approve, any such disposition or Follow-On Investment will be 
submitted to the Regulated Entity's Eligible Directors. The Board of 
any Regulated Entity may at any time rescind, suspend or qualify its 
approval of pro rata dispositions and Follow-On Investments with the 
result that all dispositions and/or Follow-On Investments must be 
submitted to the Eligible Directors.
    14. No Independent Manager of a Regulated Entity will have a direct 
or indirect financial interest in any Co-Investment Transaction (other 
than indirectly through share ownership in one of the Regulated 
Entities), including any interest in any company whose securities would 
be acquired in a Co-Investment Transaction.
    15. Under condition 15, if an Adviser, its principals, or any 
person controlling, controlled by, or under common control with the 
Adviser or its principals, and the Affiliated Funds (collectively, the 
``Holders'') own in the aggregate more than 25 percent of the 
outstanding voting shares of a Regulated Entity (the ``Shares''), then 
the Holders will vote such Shares as directed by an independent third 
party when voting on matters specified in the condition. Applicants 
believe that this condition will ensure that the Independent Managers 
will act independently in evaluating the co-investment program, because 
the ability of an Adviser or its principals to influence the 
Independent Managers by a suggestion, explicit or implied, that the 
Independent Managers can be removed will be limited significantly. 
Applicants represent that the Independent Managers will evaluate

[[Page 18026]]

and approve any such independent third party, taking into account its 
qualifications, reputation for independence, cost to the Regulated 
Entity's shareholders, and other factors that they deem relevant.

Applicants' Legal Analysis

    1. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
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. Applicants state that in the absence of the requested relief, 
the Regulated Entities may be, in some circumstances, limited in their 
ability to participate in attractive and appropriate investment 
opportunities. Applicants believe that the proposed terms and 
conditions will ensure that the Co-Investment Transactions are 
consistent with the protection of each Regulated Entity's shareholders 
and with the purposes intended by the policies and provisions of the 
Act. Applicants state that the Regulated Entities' participation in the 
Co-Investment Transactions will be consistent with the provisions, 
policies, and purposes of the Act and on a basis that is not different 
from or less advantageous than that of other participants.

Applicants' Conditions

    Applicants agree that the Order will be subject to the following 
conditions:
    1. Each time an Adviser considers a Potential Co-Investment 
Transaction for another Regulated Entity or an Affiliated Fund that 
falls within a Regulated Entity's then-current Objectives and 
Strategies, the Regulated Entity's Adviser will make an independent 
determination of the appropriateness of the investment for the 
Regulated Entity in light of the Regulated Entity's then-current 
circumstances.
    2. (a) If the Adviser deems a Regulated Entity's participation in 
any Potential Co-Investment Transaction to be appropriate for the 
Regulated Entity, the Adviser will then determine an appropriate level 
of investment for the Regulated Entity.
    (b) If the aggregate amount recommended by the applicable Adviser 
to be invested by the applicable Regulated Entity in the Potential Co-
Investment Transaction together with the amount proposed to be invested 
by the other participating Regulated Entities and Affiliated Funds, 
collectively, in the same transaction, exceeds the amount of the 
investment opportunity, the investment opportunity will be allocated 
among them pro rata based on each participant's capital available for 
investment in the asset class being allocated, up to the amount 
proposed to be invested by each. The applicable Adviser will provide 
the Eligible Directors of each participating Regulated Entity with 
information concerning each participating party's available capital to 
assist the Eligible Directors with their review of the Regulated 
Entity's investments for compliance with these allocation procedures.
    (c) After making the determinations required in conditions 1 and 
2(a), the applicable Adviser will distribute written information 
concerning the Potential Co-Investment Transaction (including the 
amount proposed to be invested by each Regulated Entity and each 
Affiliated Fund) to the Eligible Directors of each participating 
Regulated Entity for their consideration. A Regulated Entity will co-
invest with another Regulated Entity or an Affiliated Fund only if, 
prior to the Regulated Entity's participation in the Potential Co-
Investment Transaction, a Required Majority concludes that:
    (i) The terms of the Potential Co-Investment Transaction, including 
the consideration to be paid, are reasonable and fair to the Regulated 
Entity and its investors and do not involve overreaching in respect of 
the Regulated Entity or its investors on the part of any person 
concerned;
    (ii) the Potential Co-Investment Transaction is consistent with:
    (A) The interests of the Regulated Entity's investors; and
    (B) the Regulated Entity's then-current Objectives and Strategies;
    (iii) the investment by any other Regulated Entities or any 
Affiliated Funds would not disadvantage the Regulated Entity, and 
participation by the Regulated Entity would not be on a basis different 
from or less advantageous than that of any other Regulated Entities or 
any Affiliated Funds; provided that, if any other Regulated Entity or 
any Affiliated Fund, but not the Regulated Entity itself, 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 shall 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; and
    (B) the applicable Adviser agrees to, and does, provide periodic 
reports to the Board of the Regulated Entity with respect to the 
actions of such director or the information received by such 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 any Regulated Entity or any 
Affiliated Fund or any affiliated person of any Regulated Entity or any 
Affiliated Fund receives in connection with the right of a Regulated 
Entity or an 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 
participating Affiliated Funds (who may each, in turn, share its 
portion with its affiliated persons) and the participating Regulated 
Entities in accordance with the amount of each party's investment; and
    (iv) the proposed investment by the Regulated Entity will not 
benefit any Adviser, the other Regulated Entities, the Affiliated Funds 
or any affiliated person of any of them (other than the parties to the 
Co-Investment Transaction), except (A) to the extent permitted by 
condition 13, (B) to the extent permitted by section 17(e) of the Act, 
as applicable, (C) indirectly, as a result of an interest in the 
securities issued by one of the parties to the Co-Investment 
Transaction, or (D) in the case of fees or other compensation described 
in condition 2(c)(iii)(C).
    3. Each Regulated Entity has the right to decline to participate in 
any Potential Co-Investment Transaction or to invest less than the 
amount proposed.
    4. The applicable Adviser will present to the Board of each 
Regulated Entity, on a quarterly basis, a record of all investments in 
Potential Co-Investment Transactions made by any of the other Regulated 
Entities or Affiliated Funds during the preceding quarter that fell 
within the Regulated Entity's then-current Objectives and Strategies 
that were not made available to the Regulated Entity, and an 
explanation of why the investment opportunities were not offered to the 
Regulated Entity. All information presented to the Board pursuant to 
this condition will be kept for the life of the Regulated Entity and at 
least two years thereafter, and will be

[[Page 18027]]

subject to examination by the Commission and its staff.
    5. Except for Follow-On Investments made in accordance with 
condition 8,\10\ a Regulated Entity will not invest in reliance on the 
Order in any issuer in which another Regulated Entity, Affiliated Fund, 
or any affiliated person of another Regulated Entity or Affiliated Fund 
is an existing investor.
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    \10\ This exception applies only to Follow-On Investments by a 
Regulated Entity in issuers in which that Regulated Entity already 
holds investments.
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    6. A Regulated Entity 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 each participating Regulated Entity and Affiliated 
Fund. The grant to another Regulated Entity or an Affiliated Fund, but 
not the Regulated Entity, 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 6, if conditions 
2(c)(iii)(A), (B) and (C) are met.
    7. (a) If any Regulated Entity or an Affiliated Fund elects to 
sell, exchange or otherwise dispose of an interest in a security that 
was acquired in a Co-Investment Transaction, the applicable Adviser 
will:
    (i) Notify each Regulated Entity that participated in the Co-
Investment Transaction of the proposed disposition at the earliest 
practical time; and
    (ii) formulate a recommendation as to participation by each 
Regulated Entity in the disposition.
    (b) Each Regulated Entity 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 
Regulated Entities and Affiliated Funds.
    (c) A Regulated Entity may participate in such disposition without 
obtaining prior approval of the Required Majority if: (i) The proposed 
participation of each Regulated Entity and each Affiliated Fund in such 
disposition is proportionate to its outstanding investments in the 
issuer immediately preceding the disposition; (ii) the Board of the 
Regulated Entity has approved as being in the best interests of the 
Regulated Entity the ability to participate in such dispositions on a 
pro rata basis (as described in greater detail in the application); and 
(iii) the Board of the Regulated Entity is provided on a quarterly 
basis with a list of all dispositions made in accordance with this 
condition. In all other cases, the Adviser will provide its written 
recommendation as to the Regulated Entity's participation to the 
Regulated Entity's Eligible Directors, and the Regulated Entity will 
participate in such disposition solely to the extent that a Required 
Majority determines that it is in the Regulated Entity's best 
interests.
    (d) Each Regulated Entity and each Affiliated Fund will bear its 
own expenses in connection with any such disposition.
    8. (a) If a Regulated Entity or an Affiliated Fund desires to make 
a Follow-On Investment in a portfolio company whose securities were 
acquired in a Co-Investment Transaction, the applicable Adviser will:
    (i) Notify each Regulated Entity that participated in the Co-
Investment Transaction of the proposed transaction at the earliest 
practical time; and
    (ii) formulate a recommendation as to the proposed participation, 
including the amount of the proposed Follow-On Investment, by each 
Regulated Entity.
    (b) A Regulated Entity may participate in such Follow-On Investment 
without obtaining prior approval of the Required Majority if: (i) The 
proposed participation of each Regulated Entity and each Affiliated 
Fund in such investment is proportionate to its outstanding investments 
in the issuer immediately preceding the Follow-On Investment; and (ii) 
the Board of the Regulated Entity has approved as being in the best 
interests of the Regulated Entity the ability to participate in Follow-
On Investments on a pro rata basis (as described in greater detail in 
the application). In all other cases, the Adviser will provide its 
written recommendation as to the Regulated Entity's participation to 
the Eligible Directors, and the Regulated Entity will participate in 
such Follow-On Investment solely to the extent that a Required Majority 
determines that it is in the Regulated Entity's best interests.
    (c) If, with respect to any Follow-On Investment:
    (i) The amount of a Follow-On Investment is not based on the 
Regulated Entities' and the Affiliated Funds' outstanding investments 
immediately preceding the Follow-On Investment; and
    (ii) the aggregate amount recommended by the Adviser to be invested 
by each Regulated Entity in the Follow-On Investment, together with the 
amount proposed to be invested by the participating Affiliated Funds in 
the same transaction, exceeds the amount of the opportunity; then the 
amount invested by each such party will be allocated among them pro 
rata based on each party's capital available for investment in the 
asset class being allocated, up to the amount proposed to be invested 
by each.
    (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.
    9. The Independent Managers of each Regulated Entity will be 
provided quarterly for review all information concerning Potential Co-
Investment Transactions and Co-Investment Transactions, including 
investments made by other Regulated Entities and the Affiliated Funds 
that the Regulated Entity considered but declined to participate in, so 
that the Independent Managers may determine whether all investments 
made during the preceding quarter, including those investments which 
the Regulated Entity considered but declined to participate in, comply 
with the conditions of the Order. In addition, the Independent Managers 
will consider at least annually the continued appropriateness for the 
Regulated Entity of participating in new and existing Co-Investment 
Transactions.
    10. Each Regulated Entity will maintain the records required by 
section 57(f)(3) of the Act as if each of the Regulated Entities were a 
business development company (as defined in section 2(a)(48) of the 
Act) and each of the investments permitted under these conditions were 
approved by the Required Majority under section 57(f) of the Act.
    11. No Independent Manager of a Regulated Entity will also be a 
director, general partner, managing member or principal, or otherwise 
an ``affiliated person'' (as defined in the Act) of an Affiliated Fund.
    12. 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 an Adviser under the investment advisory 
agreements with the Regulated Entities and the Affiliated Funds, be 
shared by the Affiliated Funds and the Regulated Entities in proportion 
to the relative amounts of the securities held or to be acquired or 
disposed of, as the case may be.

[[Page 18028]]

    13. Any transaction fee \11\ (including break-up or commitment fees 
but excluding broker's fees contemplated by section 17(e) of the Act, 
as applicable), received in connection with a Co-Investment Transaction 
will be distributed to the participating Regulated Entities and 
Affiliated Funds on a pro rata basis based on the amounts they invested 
or committed, as the case may be, in such Co-Investment Transaction. If 
any transaction fee is to be held by the Adviser pending consummation 
of the transaction, the fee will be deposited into an account 
maintained by the 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 participating Regulated Entities and Affiliated Funds based on the 
amounts they invest in such Co-Investment Transaction. None of the 
Affiliated Funds, the Advisers, the other Regulated Entities or any 
affiliated person of the Regulated Entities or Affiliated Funds 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 Regulated Entities 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 
agreements between the Advisers and the Regulated Entities or the 
Affiliated Funds).
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    \11\ Applicants are not requesting and the staff is not 
providing any relief for transaction fees received in connection 
with any Co-Investment Transaction.
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    14. The Advisers will each maintain policies and procedures 
reasonably designed to ensure compliance with the foregoing conditions. 
These policies and procedures will require, among other things, that 
the applicable Regulated Entity Adviser will be notified of all 
Potential Co-Investment Transactions that fall within a Regulated 
Entity's then-current Objectives and Strategies and will be given 
sufficient information to make its independent determination and 
recommendations under conditions 1, 2(a), 7 and 8.
    15. If the Holders own in the aggregate more than 25 percent of the 
Shares of a Regulated Entity, then the Holders will vote such Shares as 
directed by an independent third party when voting on (1) the election 
of directors; (2) the removal of one or more directors; or (3) all 
other matters under either the Act or applicable State law affecting 
the Board's composition, size or manner of election.
    16. Each Regulated Entity's chief compliance officer, as defined in 
Rule 38a-1(a)(4) under the 1940 Act, will prepare an annual report for 
its Board each year that evaluates (and documents the basis of that 
evaluation) the Regulated Entity's compliance with the terms and 
conditions of the application and the procedures established to achieve 
such compliance.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07539 Filed 4-13-17; 8:45 am]
 BILLING CODE 8011-01-P
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