Calamos Hunt Alternative Income Fund, et al., 68691-68695 [2021-26299]
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Federal Register / Vol. 86, No. 230 / Friday, December 3, 2021 / Notices
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: December 6,
2021.
ADDRESSES: 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.
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
SUMMARY:
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I. Introduction
II. Docketed Proceeding(s)
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.
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 website (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
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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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 3030, and 39
CFR part 3040, 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 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: CP2020–82; Filing
Title: USPS Notice of Amendment to
Parcel Select & Parcel Return Service
Contract 10, Filed Under Seal; Filing
Acceptance Date: November 24, 2021;
Filing Authority: 39 CFR 3035.105;
Public Representative: Kenneth R.
Moeller; Comments Due: December 6,
2021.
2. Docket No(s).: MC2022–25 and
CP2022–27; Filing Title: USPS Request
to Add Priority Mail Contract 731 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: November 24, 2021;
Filing Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Christopher C. Mohr; Comments Due:
December 6, 2021.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2021–26233 Filed 12–2–21; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34428; File No. 812–15204]
Calamos Hunt Alternative Income
Fund, et al.
November 30, 2021.
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
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companies to co-invest in portfolio
companies with each other and with
affiliated investment funds.
APPLICANTS: Calamos Hunt Alternative
Income Fund (‘‘Calamos Hunt Fund’’ or
the ‘‘Existing Regulated Entity’’),
Calamos Advisors LLC (‘‘Calamos
Advisors’’) and Hunt Capital
Management, LLC (‘‘HCM’’).
DATES: The application was filed on
February 19, 2021, and amended on
June 24, 2021 and September 30, 2021.
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 emailing the
Commission’s Secretary at SecretarysOffice@sec.gov and serving applicants
with a copy of the request by email.
Hearing requests should be received by
the Commission by 5:30 p.m. on
December 23, 2021, and should be
accompanied by proof of service on
applicants, in the form of an affidavit or,
for lawyers, a certificate of service.
Pursuant to Rule 0–5 under the Act,
hearing requests should state the nature
of the writer’s interest, the reason for the
request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary at
Secretarys-Office@sec.gov.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, SecretarysOffice@sec.gov. Applicants:
legalnotices@calamos.com.
FOR FURTHER INFORMATION CONTACT:
Bruce R. MacNeil, Senior Counsel, at
(202) 551–6817 or Kaitlin C. Bottock,
Branch Chief, 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
website 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. Calamos Hunt Fund is a Delaware
statutory trust and is a diversified,
closed-end management investment
company operated as an interval fund
and registered under the Act. Calamos
Hunt Fund’s investment objective is to
produce current income with a
secondary objective of capital
appreciation. The board of directors
(‘‘Board’’) of the Calamos Hunt Fund
has five members, four of whom not an
‘‘interested person’’ of the Calamos
Hunt Fund within the meaning of
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Section 2(a)(19) of the Act (the
‘‘Independent Trustees’’).1
2. Calamos Advisors serves as the
investment advisor to the Existing
Regulated Entity. Calamos Advisors is
registered as an investment advisor
under the Investment Advisers Act of
1940 (‘‘Advisers Act’’).
3. HCM is a Delaware limited liability
company that is registered as an
investment adviser under the Advisers
Act. HCM serves as the sub-advisor to
the Existing Regulated Entity. Calamos
Advisors is not an affiliated person (as
defined in Section 2(a)(3) of the Act) of
HCM.
4. Applicants seek an order (‘‘Order’’)
to permit a Regulated Entity 2 and one
or more other Regulated Entities and
one or more Affiliated Funds 3 to (a)
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
1 The term ‘‘Independent Trustees’’ refers to the
independent directors, managers, or trustees of any
Regulated Entity (defined below).
2 ‘‘Regulated Entity’’ means the Existing
Regulated Entity and any Future Regulated Entity.
‘‘Future Regulated Entity’’ means any closed-end
management investment company formed in the
future that is (a) registered under the Act, (b) whose
investment advisor is a Calamos Affiliated Advisor,
(c) whose investment sub-advisor is a Hunt
Affiliated Advisor, and (d) that intends to
participate in the co-investment program described
in the Application. The term ‘‘Calamos Affiliated
Advisor’’ means (a) Calamos Advisors and (b) any
future investment advisor that is controlled by or
under common control with Calamos Advisors and
is registered as an investment advisor under the
Advisers Act. The term ‘‘Hunt Affiliated Advisor’’
means HCM, any investment advisor controlled by
HCM or any future investment advisor that (i) is
controlled by HCM, (ii) is registered as an
investment advisor under the Advisers Act, and (iii)
is not a Regulated Entity or a subsidiary of a
Regulated Entity. The term ‘‘Advisor’’ means (a) any
Calamos Affiliated Advisor or (b) any Hunt
Affiliated Advisor; provided that a Hunt Affiliated
Advisor serving as a sub-advisor to an Affiliated
Fund (defined below) is included in this term only
if (i) the investment advisor is also a Hunt Affiliated
Advisor and (ii) such Advisor controls the entity.
Applicants state that the Calamos Affiliated
Advisors will only be subject to Conditions 2(c)(iv),
12 and 13 of the application.
3 ‘‘Affiliated Fund’’ means any Future Affiliated
Fund or any Hunt Proprietary Account. ‘‘Future
Affiliated Fund’’ means any investment fund that
would be an ‘‘investment company’’ but for Section
3(c)(1), 3(c)(5)(C) or 3(c)(7) of the Act, is formed in
the future, and whose investment advisor (and any
sub-advisor, if any) is a Hunt Affiliated Advisor. No
Affiliated Fund is or will be a subsidiary of a
Regulated Entity. ‘‘Hunt Proprietary Account’’
means HCM in a principal capacity, and any direct
or indirect, wholly-owned subsidiary of HCM that,
from time to time, invests in and holds, in a
principal capacity, financial assets of the type and
nature pursued by the Calamos Hunt Fund.
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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.4
5. Applicants state that Calamos
Advisors has delegated responsibility
for the co-investment program to HCM
and cannot cause the Calamos Hunt
Fund or any Affiliated Fund to enter
into a Potential Co-Investment
Transaction. Applicants further state
that (a) HCM has sole responsibility for
causing a Regulated Entity to enter into
a Potential Co-Investment Transaction
and (b) a Hunt Affiliated Advisor is
responsible for ensuring that the
Regulated Entities and any Affiliated
Funds comply with the conditions of
the application, subject to oversight of
the applicable Board.
6. Applicants state that a Regulated
Entity may, from time to time, form one
or more Wholly-Owned Investment
Subsidiaries.5 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
4 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. No
Regulated Entity or Affiliated Fund that relies on
this Order will rely on any other order of the
Commission authorizing Co-Investment
Transactions pursuant to section 17(d) and 57(i) of
the 1940 Act and no entity that relies on another
such order of the Commission will rely on this
Order.
5 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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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
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.
7. When considering Potential CoInvestment Transactions for any
Regulated Entity, the relevant Advisor
will consider only the Objectives and
Strategies,6 investment policies,
investment positions, capital available
for investment, and other pertinent
factors applicable to that Regulated
Entity. The Advisors 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.7
8. 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
6 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.
7 The Regulated Entities, however, will not be
obligated to invest, or co-invest, when investment
opportunities are referred to them.
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Advisor 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
Trustees’’) 8 and the majority of such
directors of the Board who are
Independent Trustees (a ‘‘Required
Majority’’) will approve each CoInvestment Transaction prior to any
investment by the participating
Regulated Entity.
9. 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 Trustees. 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 Trustees.
10. No Independent Trustee 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.
11. Under condition 15, if an Advisor,
its principals, or any person controlling,
controlled by, or under common control
with the Advisor 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 required under
Condition 15. Applicants believe that
this condition will ensure that the
Independent Trustees will act
independently in evaluating the co8 Eligible Trustees may not have a financial
interest in such transaction, plan, or arrangement.
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investment program, because the ability
of an Advisor or its principals to
influence the Independent Trustees by a
suggestion, explicit or implied, that the
Independent Trustees can be removed
will be limited significantly. Applicants
represent that the Independent Trustees
will evaluate 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.
2. 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 Advisor 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
Advisor 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 Advisor deems a
Regulated Entity’s participation in any
Potential Co-Investment Transaction to
be appropriate for the Regulated Entity,
the Advisor will then determine an
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appropriate level of investment for the
Regulated Entity.
(b) If the aggregate amount
recommended by the applicable Advisor
to be invested by the applicable
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 Advisor will provide the
Eligible Trustees of each participating
Regulated Entity with information
concerning each participating party’s
available capital to assist the Eligible
Trustees 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 Advisor 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
Trustees 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
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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 Trustees will have
the right to ratify the selection of such
director or board observer, if any; and
(B) the applicable Advisor 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
Advisor, 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 Advisor 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
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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
subject to examination by the
Commission and its staff.
5. Except for Follow-On Investments
made in accordance with condition 8,9
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
Advisor 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.10
(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
9 This exception applies only to Follow-On
Investments by a Regulated Entity in issuers in
which that Regulated Entity already holds
investments.
10 Any Hunt Proprietary Account that is not
advised by an Advisor is itself deemed to be an
Advisor for purposes of Conditions 7(a)(i) and
8(a)(i).
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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
Advisor will provide its written
recommendation as to the Regulated
Entity’s participation to the Regulated
Entity’s Eligible Trustees, 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 Advisor
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
Advisor will provide its written
recommendation as to the Regulated
Entity’s participation to the Eligible
Trustees, 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
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Federal Register / Vol. 86, No. 230 / Friday, December 3, 2021 / Notices
Funds’ outstanding investments
immediately preceding the Follow-On
Investment; and
(ii) the aggregate amount
recommended by the Advisor 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 CoInvestment Transaction for all purposes
and subject to the other conditions set
forth in the application.
9. The Independent Trustees 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
Trustees 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 Trustees will
consider at least annually the continued
appropriateness for the Regulated Entity
of participating in new and existing CoInvestment 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 Trustee 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 Advisor under the investment
VerDate Sep<11>2014
18:06 Dec 02, 2021
Jkt 256001
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.
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 Advisor pending
consummation of the transaction, the
fee will be deposited into an account
maintained by the Advisor 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 Advisors,
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 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
Advisors, investment advisory fees paid
in accordance with the agreements
between the Advisors and the Regulated
Entities or the Affiliated Funds).
14. The Advisors 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 Advisor will
be notified of all Potential CoInvestment 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
11 Applicants are not requesting and the staff is
not providing any relief for transaction fees
received in connection with any Co-Investment
Transaction.
PO 00000
Frm 00071
Fmt 4703
Sfmt 4703
68695
a Regulated Entity, then the Holders
will vote such Shares in the same
percentages as the Regulated Entity’s
other shareholders (not including the
Holders) 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), will prepare an annual
report for its Board 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.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–26299 Filed 12–2–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–93676; File No. SR–MIAX–
2021–58]
Self-Regulatory Organizations; Miami
International Securities Exchange,
LLC; Notice of Filing of a Proposed
Rule Change To Adopt Exchange Rule
532, Order and Quote Price Protection
Mechanisms and Risk Controls
November 29, 2021.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on November
16, 2021, Miami International Securities
Exchange, LLC (‘‘MIAX Options’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. 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
adopt new Exchange Rule 532, Order
and Quote Price Protection Mechanisms
and Risk Controls; amend Exchange
15 U.S.C. 78s(b)(1).
15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1
2
E:\FR\FM\03DEN1.SGM
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]]>Agencies
[Federal Register Volume 86, Number 230 (Friday, December 3, 2021)]
[Notices]
[Pages 68691-68695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26299]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 34428; File No. 812-15204]
Calamos Hunt Alternative Income Fund, et al.
November 30, 2021.
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: Calamos Hunt Alternative Income Fund (``Calamos Hunt
Fund'' or the ``Existing Regulated Entity''), Calamos Advisors LLC
(``Calamos Advisors'') and Hunt Capital Management, LLC (``HCM'').
DATES: The application was filed on February 19, 2021, and amended on
June 24, 2021 and September 30, 2021.
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 emailing the Commission's
Secretary at [email protected] and serving applicants with a
copy of the request by email. Hearing requests should be received by
the Commission by 5:30 p.m. on December 23, 2021, and should be
accompanied by proof of service on applicants, in the form of an
affidavit or, for lawyers, a certificate of service. Pursuant to Rule
0-5 under the Act, hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by emailing the Commission's Secretary at [email protected].
ADDRESSES: Secretary, U.S. Securities and Exchange Commission,
[email protected]. Applicants: [email protected].
FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, at
(202) 551-6817 or Kaitlin C. Bottock, Branch Chief, 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 website 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. Calamos Hunt Fund is a Delaware statutory trust and is a
diversified, closed-end management investment company operated as an
interval fund and registered under the Act. Calamos Hunt Fund's
investment objective is to produce current income with a secondary
objective of capital appreciation. The board of directors (``Board'')
of the Calamos Hunt Fund has five members, four of whom not an
``interested person'' of the Calamos Hunt Fund within the meaning of
[[Page 68692]]
Section 2(a)(19) of the Act (the ``Independent Trustees'').\1\
---------------------------------------------------------------------------
\1\ The term ``Independent Trustees'' refers to the independent
directors, managers, or trustees of any Regulated Entity (defined
below).
---------------------------------------------------------------------------
2. Calamos Advisors serves as the investment advisor to the
Existing Regulated Entity. Calamos Advisors is registered as an
investment advisor under the Investment Advisers Act of 1940
(``Advisers Act'').
3. HCM is a Delaware limited liability company that is registered
as an investment adviser under the Advisers Act. HCM serves as the sub-
advisor to the Existing Regulated Entity. Calamos Advisors is not an
affiliated person (as defined in Section 2(a)(3) of the Act) of HCM.
4. Applicants seek an order (``Order'') to permit a Regulated
Entity \2\ and one or more other Regulated Entities and one or more
Affiliated Funds \3\ to (a) 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.\4\
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\2\ ``Regulated Entity'' means the Existing Regulated Entity and
any Future Regulated Entity. ``Future Regulated Entity'' means any
closed-end management investment company formed in the future that
is (a) registered under the Act, (b) whose investment advisor is a
Calamos Affiliated Advisor, (c) whose investment sub-advisor is a
Hunt Affiliated Advisor, and (d) that intends to participate in the
co-investment program described in the Application. The term
``Calamos Affiliated Advisor'' means (a) Calamos Advisors and (b)
any future investment advisor that is controlled by or under common
control with Calamos Advisors and is registered as an investment
advisor under the Advisers Act. The term ``Hunt Affiliated Advisor''
means HCM, any investment advisor controlled by HCM or any future
investment advisor that (i) is controlled by HCM, (ii) is registered
as an investment advisor under the Advisers Act, and (iii) is not a
Regulated Entity or a subsidiary of a Regulated Entity. The term
``Advisor'' means (a) any Calamos Affiliated Advisor or (b) any Hunt
Affiliated Advisor; provided that a Hunt Affiliated Advisor serving
as a sub-advisor to an Affiliated Fund (defined below) is included
in this term only if (i) the investment advisor is also a Hunt
Affiliated Advisor and (ii) such Advisor controls the entity.
Applicants state that the Calamos Affiliated Advisors will only be
subject to Conditions 2(c)(iv), 12 and 13 of the application.
\3\ ``Affiliated Fund'' means any Future Affiliated Fund or any
Hunt Proprietary Account. ``Future Affiliated Fund'' means any
investment fund that would be an ``investment company'' but for
Section 3(c)(1), 3(c)(5)(C) or 3(c)(7) of the Act, is formed in the
future, and whose investment advisor (and any sub-advisor, if any)
is a Hunt Affiliated Advisor. No Affiliated Fund is or will be a
subsidiary of a Regulated Entity. ``Hunt Proprietary Account'' means
HCM in a principal capacity, and any direct or indirect, wholly-
owned subsidiary of HCM that, from time to time, invests in and
holds, in a principal capacity, financial assets of the type and
nature pursued by the Calamos Hunt Fund.
\4\ 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. No Regulated Entity or
Affiliated Fund that relies on this Order will rely on any other
order of the Commission authorizing Co-Investment Transactions
pursuant to section 17(d) and 57(i) of the 1940 Act and no entity
that relies on another such order of the Commission will rely on
this Order.
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5. Applicants state that Calamos Advisors has delegated
responsibility for the co-investment program to HCM and cannot cause
the Calamos Hunt Fund or any Affiliated Fund to enter into a Potential
Co-Investment Transaction. Applicants further state that (a) HCM has
sole responsibility for causing a Regulated Entity to enter into a
Potential Co-Investment Transaction and (b) a Hunt Affiliated Advisor
is responsible for ensuring that the Regulated Entities and any
Affiliated Funds comply with the conditions of the application, subject
to oversight of the applicable Board.
6. Applicants state that a Regulated Entity may, from time to time,
form one or more Wholly-Owned Investment Subsidiaries.\5\ 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.
---------------------------------------------------------------------------
\5\ 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.
---------------------------------------------------------------------------
7. When considering Potential Co-Investment Transactions for any
Regulated Entity, the relevant Advisor will consider only the
Objectives and Strategies,\6\ investment policies, investment
positions, capital available for investment, and other pertinent
factors applicable to that Regulated Entity. The Advisors 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.\7\
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\6\ 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.
\7\ The Regulated Entities, however, will not be obligated to
invest, or co-invest, when investment opportunities are referred to
them.
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8. 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
[[Page 68693]]
Advisor 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 Trustees'') \8\ and the
majority of such directors of the Board who are Independent Trustees (a
``Required Majority'') will approve each Co-Investment Transaction
prior to any investment by the participating Regulated Entity.
---------------------------------------------------------------------------
\8\ Eligible Trustees may not have a financial interest in such
transaction, plan, or arrangement.
---------------------------------------------------------------------------
9. 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 Trustees. 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 Trustees.
10. No Independent Trustee 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.
11. Under condition 15, if an Advisor, its principals, or any
person controlling, controlled by, or under common control with the
Advisor 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 required under Condition 15.
Applicants believe that this condition will ensure that the Independent
Trustees will act independently in evaluating the co-investment
program, because the ability of an Advisor or its principals to
influence the Independent Trustees by a suggestion, explicit or
implied, that the Independent Trustees can be removed will be limited
significantly. Applicants represent that the Independent Trustees will
evaluate 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.
2. 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 Advisor 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 Advisor 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 Advisor deems a Regulated Entity's participation in
any Potential Co-Investment Transaction to be appropriate for the
Regulated Entity, the Advisor will then determine an appropriate level
of investment for the Regulated Entity.
(b) If the aggregate amount recommended by the applicable Advisor
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 Advisor will provide
the Eligible Trustees of each participating Regulated Entity with
information concerning each participating party's available capital to
assist the Eligible Trustees 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 Advisor 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 Trustees 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
[[Page 68694]]
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 Trustees will have the right to ratify the
selection of such director or board observer, if any; and
(B) the applicable Advisor 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 Advisor, 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 Advisor 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 subject to examination by the
Commission and its staff.
5. Except for Follow-On Investments made in accordance with
condition 8,\9\ 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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\9\ 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 Advisor
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.\10\
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\10\ Any Hunt Proprietary Account that is not advised by an
Advisor is itself deemed to be an Advisor for purposes of Conditions
7(a)(i) and 8(a)(i).
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(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 Advisor will provide its written
recommendation as to the Regulated Entity's participation to the
Regulated Entity's Eligible Trustees, 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 Advisor 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 Advisor will provide its
written recommendation as to the Regulated Entity's participation to
the Eligible Trustees, 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
[[Page 68695]]
Funds' outstanding investments immediately preceding the Follow-On
Investment; and
(ii) the aggregate amount recommended by the Advisor 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 Trustees 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 Trustees 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 Trustees
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 Trustee 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 Advisor 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.
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 Advisor pending consummation
of the transaction, the fee will be deposited into an account
maintained by the Advisor 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 Advisors, 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 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
Advisors, investment advisory fees paid in accordance with the
agreements between the Advisors 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 Advisors 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 Advisor 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 in
the same percentages as the Regulated Entity's other shareholders (not
including the Holders) 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), will prepare an annual report for its Board 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.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-26299 Filed 12-2-21; 8:45 am]
BILLING CODE 8011-01-P
