Excelsior Private Markets Fund II (Master), LLC, et al., 18023-18028 [2017-07539]
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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.
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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
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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
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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:
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Applicants: 1290 Avenue of the
Americas, New York, NY 10104.
ADDRESSES:
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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
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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.
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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.
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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
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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.
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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
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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
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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
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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.
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16:21 Apr 13, 2017
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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.
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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.
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16:21 Apr 13, 2017
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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.
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]]>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.
-----------------------------------------------------------------------
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).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\2\ ``Existing NB Adviser'' means NBIA or NBAA.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\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
