80 FR 26114 - TCW Direct Lending LLC, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 87 (May 6, 2015)

Page Range		26114-26118
FR Document		2015-10585
Federal Register, Volume 80 Issue 87 (Wednesday, May 6, 2015)
[Federal Register Volume 80, Number 87 (Wednesday, May 6, 2015)]
[Notices]
[Pages 26114-26118]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-10585]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31589; File No. 812-14382]


TCW Direct Lending LLC, et al.; Notice of Application

April 30, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

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

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

    Summary of Application: Applicants request an order to permit a 
business development company (``BDC'') and certain closed end 
investment

[[Page 26115]]

companies to co-invest in portfolio companies with each other and with 
affiliated investment funds.
    Applicants: TCW Direct Lending LLC (the ``Company''), TCW DL Fund 
I, L.P. (the ``Private Fund''), and TCW Asset Management Company 
(``TCWAMC'') on behalf of itself and its successors.\1\
---------------------------------------------------------------------------

    \1\ The term ``successor,'' as applied to each Adviser (defined 
below), means an entity that results from a reorganization into 
another jurisdiction or change in the type of business organization.
---------------------------------------------------------------------------

    Filing Dates: The application was filed on October 23, 2014 and 
amended on December 12, 2014 and April 6, 2015. Applicants have agreed 
to file an amendment during the notice period, the substance of which 
is reflected herein.
    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 26, 2015, and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
St. NE., Washington, DC 20549-1090. Applicants: 865 S. Figueroa Street, 
Suite 1800, Los Angeles, CA 90017.

FOR FURTHER INFORMATION CONTACT: Jaea F. Hahn, Senior Counsel, at (202) 
551-6870 or David P. Bartels, Branch Chief, at (202) 551-6821 (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 http://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. The Company, a Delaware limited liability company, is organized 
as a closed-end management investment company that has elected to be 
regulated as a BDC under Section 54(a) of the Act.\2\ Applicants state 
that the Company seeks to generate risk-adjusted returns primarily 
through direct investments in senior secured loans issued to middle 
market companies or other companies that are engaged in various 
businesses. The board of directors (``Board'') of the Company is 
comprised of five directors, three of whom are not ``interested 
persons'' within the meaning of section 2(a)(19) of the Act (the ``Non-
Interested Directors'').
---------------------------------------------------------------------------

    \2\ Section 2(a)(48) defines a BDC to be any closed-end 
investment company that operates for the purpose of making 
investments in securities described in sections 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
---------------------------------------------------------------------------

    2. The Private Fund is organized as a limited partnership under 
Delaware law, and would be an investment company but for the exclusion 
from the definition of investment company provided by section 3(c)(7) 
of the Act. Applicants state that the Private Fund's investment 
objectives and policies are substantially similar to the Objectives and 
Strategies of the Company.\3\
---------------------------------------------------------------------------

    \3\ ``Objectives and Strategies'' means a Regulated Fund's 
investment objectives and strategies, as described in the Regulated 
Fund's registration statement on Form 10 (or if applicable, Form N-
2), other filings the Regulated Fund has made with the Commission 
under the Securities Act of 1933 (the ``Securities Act''), or under 
the Securities Exchange Act of 1934, and the Regulated Fund's 
reports to shareholders.
---------------------------------------------------------------------------

    3. TCWAMC, a California corporation, is registered with the 
Commission as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act'') and serve as investment adviser to the 
Company and the Private Fund.
    4. Applicants seek an order (``Order'') to permit one or more 
Regulated Funds \4\ and/or one or more Affiliated Funds \5\ to 
participate in the same investment opportunities through a proposed co-
investment program (the ``Co-Investment Program'') where such 
participation would otherwise be prohibited under section 57(a)(4) and 
rule 17d-1 by (a) co-investing with each other in securities issued by 
issuers in private placement transactions in which an Adviser 
negotiates terms in addition to price; \6\ and (b) making additional 
investments in securities of such issuers, including through the 
exercise of warrants, conversion privileges, and other rights to 
purchase securities of the issuers (``Follow-On Investments''). ``Co-
Investment Transaction'' means any transaction in which a Regulated 
Fund (or its Wholly-Owned Investment Sub, as defined below) 
participated together with one or more other Regulated Funds and/or one 
or more Affiliated Funds in reliance on the requested Order. 
``Potential Co-Investment Transaction'' means any investment 
opportunity in which a Regulated Fund (or its Wholly-Owned Investment 
Sub, as defined below) could not participate together with one or more 
Affiliated Funds and/or one or more other Regulated Funds without 
obtaining and relying on the Order.\7\
---------------------------------------------------------------------------

    \4\ ``Regulated Fund'' means the Company and any Future 
Regulated Fund. ``Future Regulated Fund'' means any closed-end 
management investment company (a) that is registered under the Act 
or has elected to be regulated as BDC, (b) whose investment adviser 
is an Adviser, and (c) that intends to participate in the Co-
Investment Program. The term ``Adviser'' means (a) TCWAMC and (b) 
any future investment adviser that controls, is controlled by or is 
under common control with TCWAMC and is registered as an investment 
adviser under the Advisers Act.
    \5\ ``Affiliated Fund'' means the Private Fund and any Future 
Affiliated Fund. ``Future Affiliated Fund'' means any entity (a) 
whose investment adviser is an Adviser, (b) that would be an 
investment company but for section 3(c)(1) or 3(c)(7) of the Act, 
and (c) that intends to participate in the Co-Investment Program.
    \6\ The term ``private placement transactions'' means 
transactions in which the offer and sale of securities by the issuer 
are exempt from registration under the Securities Act.
    \7\ All existing entities that currently intend to rely upon the 
requested Order have been named as applicants. Any other existing or 
future entity that subsequently relies on the Order will comply with 
the terms and conditions of the application.
---------------------------------------------------------------------------

    5. Applicants state that a Regulated Fund may, from time to time, 
form one or more Wholly-Owned Investment Subs.\8\ Such a subsidiary 
would be prohibited from investing in a Co-Investment Transaction with 
any Affiliated Fund or Regulated Fund because it would be a company 
controlled by its parent Regulated Fund for purposes of Section 
57(a)(4) and rule 17d-1. Applicants request that each Wholly-Owned 
Investment Sub be permitted to participate in Co-Investment 
Transactions in lieu of its parent Regulated Fund and that the Wholly-
Owned Investment Sub's participation in any such transaction be 
treated, for purposes of the requested order, as though the parent 
Regulated Fund were participating directly. Applicants represent that 
this treatment is justified because a Wholly-Owned Investment Sub would 
have no purpose other than serving as a holding vehicle

[[Page 26116]]

for the Regulated Fund's investments and, therefore, no conflicts of 
interest could arise between the Regulated Fund and the Wholly-Owned 
Investment Sub. The Regulated Fund's Board would make all relevant 
determinations under the conditions with regard to a Wholly-Owned 
Investment Sub's participation in a Co-Investment Transaction, and the 
Regulated Fund's Board would be informed of, and take into 
consideration, any proposed use of a Wholly-Owned Investment Sub in the 
Regulated Fund's place. If the Regulated Fund proposes to participate 
in the same Co-Investment Transaction with any of its Wholly-Owned 
Investment Subs, the Board will also be informed of, and take into 
consideration, the relative participation of the Regulated Fund and the 
Wholly-Owned Investment Sub.
---------------------------------------------------------------------------

    \8\ The term ``Wholly-Owned Investment Sub'' means an entity (i) 
that is wholly-owned by a Regulated Fund (with the Regulated Fund at 
all times holding, beneficially and of record, 100% of the voting 
and economic interests); (ii) whose sole business purpose is to hold 
one or more investments on behalf of the Regulated Fund; (iii) with 
respect to which the Regulated Fund's Board has the sole authority 
to make all determinations with respect to the entity's 
participation under the conditions of the application; and (iv) that 
would be an investment company but for Section 3(c)(1) or 3(c)(7) of 
the Act.
---------------------------------------------------------------------------

    6. When considering Potential Co-Investment Transactions for any 
Regulated Fund, the applicable Adviser will consider only the 
Objectives and Strategies, investment policies, investment positions, 
capital available for investment as described in the application 
(``Available Capital''), and other pertinent factors applicable to that 
Regulated Fund. The Board of each Regulated Fund, including the Non-
Interested Directors has (or will have prior to relying on the 
requested Order) determined that it is in the best interests of the 
Regulated Fund to participate in the Co-Investment Transaction.\9\
---------------------------------------------------------------------------

    \9\ The Regulated Funds, however, will not be obligated to 
invest, or co-invest, when investment opportunities are referred to 
them.
---------------------------------------------------------------------------

    7. 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 Adviser will present each 
Potential Co-Investment Transaction and the proposed allocation to the 
directors of the Board eligible to vote under section 57(o) of the Act 
(``Eligible Directors''), and the ``required majority,'' as defined in 
section 57(o) of the Act (``Required Majority'') \10\ will approve each 
Co-Investment Transaction prior to any investment by the participating 
Regulated Fund.
---------------------------------------------------------------------------

    \10\ In the case of a Regulated Fund that is a registered 
closed-end fund, the Board members that make up the Required 
Majority will be determined as if the Regulated Fund were a BDC 
subject to Section 57(o).
---------------------------------------------------------------------------

    8. With respect to the pro rata dispositions and Follow-On 
Investments provided in conditions 7 and 8, a Regulated Fund 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 Fund and 
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 Fund has approved that Regulated Fund's participation in pro 
rata dispositions and Follow-On Investments as being in the best 
interests of the Regulated Fund. If the Board does not so approve, any 
such disposition or Follow-On Investment will be submitted to the 
Regulated Fund's Eligible Directors. The Board of any Regulated Fund 
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.
    9. No Non-Interested Director of a Regulated Fund will have a 
financial interest in any Co-Investment Transaction, other than through 
share ownership in one of the Regulated Funds.

Applicants' Legal Analysis

    1. Section 57(a)(4) of the Act prohibits certain affiliated persons 
of a BDC from participating in joint transactions with the BDC or a 
company controlled by a BDC in contravention of rules as prescribed by 
the Commission. Under section 57(b)(2) of the Act, any person who is 
directly or indirectly controlling, controlled by, or under common 
control with a BDC is subject to section 57(a)(4). Applicants submit 
that each of the Regulated Funds and Affiliated Funds could be deemed 
to be a person related to each Regulated Fund in a manner described by 
section 57(b) by virtue of being under common control. Section 57(i) of 
the Act provides that, until the Commission prescribes rules under 
section 57(a)(4), the Commission's rules under section 17(d) of the Act 
applicable to registered closed-end investment companies will be deemed 
to apply to transactions subject to section 57(a)(4). Because the 
Commission has not adopted any rules under section 57(a)(4), rule 17d-1 
also applies to joint transactions with Regulated Funds that are BDCs. 
Section 17(d) of the Act and rule 17d-1 under the Act are applicable to 
Regulated Funds that are registered closed-end investment companies.
    2. 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 Funds would 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 Fund's shareholders 
and with the purposes intended by the policies and provisions of the 
Act. Applicants state that the Regulated Funds' 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 an Affiliated Fund or another Regulated Fund that falls 
within a Regulated Fund's then-current Objectives and Strategies, the 
Regulated Fund's Adviser will make an independent determination of the 
appropriateness of the investment for such Regulated Fund in light of 
the Regulated Fund's then-current circumstances.
    2.(a) If the Adviser deems a Regulated Fund's participation in any 
Potential Co-Investment Transaction to be appropriate for the Regulated 
Fund, it will then determine an appropriate level of investment for the 
Regulated Fund.
    (b) If the aggregate amount recommended by the applicable Adviser 
to be invested by the applicable Regulated Fund in the Potential Co-
Investment Transaction, together with the amount proposed to be 
invested by the other participating Regulated Funds 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 Available Capital, up 
to the amount proposed to be invested by each. The applicable Adviser 
will provide the Eligible Directors of each participating Regulated 
Fund with information concerning each participating party's Available 
Capital to

[[Page 26117]]

assist the Eligible Directors with their review of the Regulated Fund'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 participating Regulated Fund and 
Affiliated Fund) to the Eligible Directors of each participating 
Regulated Fund for their consideration. A Regulated Fund will co-invest 
with one or more other Regulated Funds and/or one or more Affiliated 
Funds only if, prior to the Regulated Fund'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 
Fund and its shareholders and do not involve overreaching in respect of 
the Regulated Fund or its shareholders on the part of any person 
concerned;
    (ii) the Potential Co-Investment Transaction is consistent with:
    (A) the interests of the shareholders of the Regulated Fund; and
    (B) the Regulated Fund's then-current Objectives and Strategies;
    (iii) the investment by any other Regulated Funds or Affiliated 
Funds would not disadvantage the Regulated Fund, and participation by 
the Regulated Fund would not be on a basis different from or less 
advantageous than that of other Regulated Funds or Affiliated Funds; 
provided that, if any other Regulated Fund or Affiliated Fund, but not 
the Regulated Fund 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;
    (B) the applicable Adviser agrees to, and does, provide periodic 
reports to the Regulated Fund's Board 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 Affiliated Fund or any 
Regulated Fund or any affiliated person of any Affiliated Fund or any 
Regulated Fund receives in connection with the right of an Affiliated 
Fund or a Regulated 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 each may, in turn, share its 
portion with its affiliated persons) and the participating Regulated 
Funds in accordance with the amount of each party's investment; and
    (iv) the proposed investment by the Regulated Fund will not benefit 
the Advisers, the Affiliated Funds or the other Regulated 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) or 57(k) 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 Fund 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 Fund, on a quarterly basis, a record of all investments in 
Potential Co-Investment Transactions made by any of the other Regulated 
Funds or Affiliated Funds during the preceding quarter that fell within 
the Regulated Fund's then-current Objectives and Strategies that were 
not made available to the Regulated Fund, and an explanation of why the 
investment opportunities were not offered to the Regulated Fund. All 
information presented to the Board pursuant to this condition will be 
kept for the life of the Regulated Fund 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,\11\ a Regulated Fund will not invest in reliance on the 
Order in any issuer in which another Regulated Fund, Affiliated Fund, 
or any affiliated person of another Regulated Fund or Affiliated Fund 
is an existing investor.
---------------------------------------------------------------------------

    \11\ This exception applies only to Follow-On Investments by a 
Regulated Fund in issuers in which that Regulated Fund already holds 
investments.
---------------------------------------------------------------------------

    6. A Regulated Fund 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 Fund and Affiliated 
Fund. The grant to an Affiliated Fund or another Regulated Fund, but 
not the Regulated Fund, 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 Affiliated Fund or any Regulated Fund elects to sell, 
exchange or otherwise dispose of an interest in a security that was 
acquired in a Co-Investment Transaction, the applicable Advisers will:
    (i) notify each Regulated Fund 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 Fund in the disposition.
    (b) Each Regulated Fund will have the right to participate in such 
disposition on a proportionate basis, at the same price and on the same 
terms and conditions as those applicable to the participating 
Affiliated Funds and Regulated Funds.
    (c) A Regulated Fund may participate in such disposition without 
obtaining prior approval of the Required Majority if: (i) The proposed 
participation of each Regulated Fund 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 Fund has approved as being in the best interests of the 
Regulated Fund 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 Fund 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 Fund's participation to the Eligible Directors, and 
the Regulated Fund will participate in such disposition solely to the 
extent that a Required Majority determines that it is in the Regulated 
Fund's best interests.

[[Page 26118]]

    (d) Each Affiliated Fund and each Regulated Fund will bear its own 
expenses in connection with any such disposition.
    8.(a) If any Affiliated Fund or any Regulated Fund desires to make 
a Follow-On Investment in a portfolio company whose securities were 
acquired in a Co-Investment Transaction, the applicable Advisers will:
    (i) notify each Regulated Fund 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 Fund.
    (b) A Regulated Fund may participate in such Follow-On Investment 
without obtaining prior approval of the Required Majority if: (i) The 
proposed participation of each Regulated Fund 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 Fund has approved as being in the best interests 
of the Regulated Fund 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 Fund's participation to the Eligible 
Directors, and the Regulated Fund will participate in such Follow-On 
Investment solely to the extent that a Required Majority determines 
that it is in the Regulated Fund's best interests.
    (c) If, with respect to any Follow-On Investment:
    (i) the amount of the opportunity is not based on the Regulated 
Funds' and the Affiliated Funds' outstanding investments immediately 
preceding the Follow-On Investment; and
    (ii) the aggregate amount recommended by the applicable Adviser to 
be invested by the applicable Regulated Fund in the Follow-On 
Investment, together with the amount proposed to be invested by the 
other participating Regulated Funds and Affiliated Funds, collectively, 
in the same transaction, exceeds the amount of the investment 
opportunity; then the investment opportunity will be allocated among 
them pro rata based on each participant's Available Capital, up to the 
maximum 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 this 
application.
    9. The Non-Interested Directors of each Regulated Fund will be 
provided quarterly for review all information concerning Potential Co-
Investment Transactions and Co-Investment Transactions, including 
investments made by other Regulated Funds or Affiliated Funds that the 
Regulated Fund considered but declined to participate in, so that the 
Non-Interested Directors may determine whether all investments made 
during the preceding quarter, including those investments that the 
Regulated Fund considered but declined to participate in, comply with 
the conditions of the Order. In addition, the Non-Interested Directors 
will consider at least annually the continued appropriateness for the 
Regulated Fund of participating in new and existing Co-Investment 
Transactions.
    10. Each Regulated Fund will maintain the records required by 
Section 57(f)(3) of the Act as if each of the Regulated Funds were a 
BDC and each of the investments permitted under these conditions were 
approved by the Required Majority under Section 57(f) of the Act.
    11. No Non-Interested Director of a Regulated Fund 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 the Advisers under their respective 
investment advisory agreements with Affiliated Funds and the Regulated 
Funds, be shared by the Regulated Funds and the Affiliated Funds 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 (including break-up or commitment fees but 
excluding broker's fees contemplated Section 17(e) or 57(k) of the Act, 
as applicable), received in connection with a Co-Investment Transaction 
will be distributed to the participating Regulated Funds 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 an Adviser pending consummation of 
the transaction, the fee will be deposited into an account maintained 
by such 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 Funds and Affiliated Funds based on the amounts 
they invest in such Co-Investment Transaction. None of the Affiliated 
Funds, the Advisers, the other Regulated Funds or any affiliated person 
of the Regulated Funds 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 Funds 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 an Adviser, 
investment advisory fees paid in accordance with the agreement between 
the Adviser and the Regulated Fund or Affiliated Fund.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Brent J. Fields,
Secretary.
[FR Doc. 2015-10585 Filed 5-5-15; 8:45 am]
 BILLING CODE 8011-01-P
26114 Federal Register / Vol. 80, No. 87 / Wednesday, May 6, 2015 / Notices

controlled by or under common control compares to the performance of less than six years thereafter, the first
with such investment adviser(s). comparable securities purchased during two years in an easily accessible place.
5. The Fund of Funds Adviser, or a comparable period of time in 10. Before approving any advisory
trustee or Sponsor of an Investing Trust, underwritings other than Affiliated contract under section 15 of the Act, the
as applicable, will waive fees otherwise Underwritings or to a benchmark such board of directors or trustees of each
payable to it by the Fund of Funds in as a comparable market index; and (iii) Investing Management Company
an amount at least equal to any whether the amount of securities including a majority of the disinterested
compensation (including fees received purchased by the Fund in Affiliated directors or trustees, will find that the
pursuant to any plan adopted by a Fund Underwritings and the amount advisory fees charged under such
under rule 12b–l under the Act) purchased directly from an contract are based on services provided
received from a Fund by the Fund of Underwriting Affiliate have changed that will be in addition to, rather than
Funds Adviser, or trustee or Sponsor of significantly from prior years. The duplicative of, the services provided
the Investing Trust, or an affiliated Board will take any appropriate actions under the advisory contract(s) of any
person of the Fund of Funds Adviser, or based on its review, including, if Fund in which the Investing
trustee or Sponsor of the Investing appropriate, the institution of Management Company may invest.
Trust, other than any advisory fees paid procedures designed to ensure that These findings and their basis will be
to the Fund of Funds Adviser, or trustee purchases of securities in Affiliated fully recorded in the minute books of
or Sponsor of an Investing Trust, or its Underwritings are in the best interest of the appropriate Investing Management
affiliated person by the Fund, in shareholders of the Fund. Company.
connection with the investment by the 8. Each Fund will maintain and 11. Any sales charges and/or service
Fund of Funds in the Fund. Any Fund preserve permanently in an easily fees charged with respect to shares of a
of Funds Sub-Adviser will waive fees accessible place a written copy of the Fund of Funds will not exceed the
otherwise payable to the Fund of Funds procedures described in the preceding limits applicable to a fund of funds as
Sub-Adviser, directly or indirectly, by condition, and any modifications to set forth in NASD Conduct Rule 2830.
the Investing Management Company in such procedures, and will maintain and 12. No Fund will acquire securities of
an amount at least equal to any preserve for a period of not less than six an investment company or company
compensation received from a Fund by years from the end of the fiscal year in relying on section 3(c)(1) or 3(c)(7) of
the Fund of Funds Sub-Adviser, or an which any purchase in an Affiliated the Act in excess of the limits contained
affiliated person of the Fund of Funds Underwriting occurred, the first two in section 12(d)(1)(A) of the Act, except
Sub-Adviser, other than any advisory years in an easily accessible place, a to the extent the Fund acquires
fees paid to the Fund of Funds Sub- written record of each purchase of securities of another investment
Adviser or its affiliated person by the securities in Affiliated Underwritings company pursuant to exemptive relief
Fund, in connection with the once an investment by a Fund of Funds from the Commission permitting the
investment by the Investing in the securities of the Fund exceeds the Fund to acquire securities of one or
Management Company in the Fund limit of section 12(d)(1)(A)(i) of the Act, more investment companies for short-
made at the direction of the Fund of setting forth from whom the securities term cash management purposes.
Funds Sub-Adviser. In the event that the were acquired, the identity of the
Fund of Funds Sub-Adviser waives fees, underwriting syndicate’s members, the For the Commission, by the Division of
the benefit of the waiver will be passed terms of the purchase, and the Investment Management, under delegated
authority.
through to the Investing Management information or materials upon which
Company. the Board’s determinations were made. Brent J. Fields,
6. No Fund of Funds or Fund of 9. Before investing in a Fund in Secretary.
Funds Affiliate (except to the extent it excess of the limit in section [FR Doc. 2015–10586 Filed 5–5–15; 8:45 am]
is acting in its capacity as an investment 12(d)(1)(A), a Fund of Funds and the BILLING CODE 8011–01–P
adviser to a Fund) will cause a Fund to Trust will execute a FOF Participation
purchase a security in any Affiliated Agreement stating, without limitation,
Underwriting. that their respective boards of directors SECURITIES AND EXCHANGE
7. The Board of a Fund, including a or trustees and their investment COMMISSION
majority of the non-interested Board advisers, or trustee and Sponsor, as [Release No. IC–31589; File No. 812–14382]
members, will adopt procedures applicable, understand the terms and
reasonably designed to monitor any conditions of the order, and agree to TCW Direct Lending LLC, et al.; Notice
purchases of securities by the Fund in fulfill their responsibilities under the of Application
an Affiliated Underwriting, once an order. At the time of its investment in
investment by a Fund of Funds in the Shares of a Fund in excess of the limit April 30, 2015.
securities of the Fund exceeds the limit in section 12(d)(1)(A)(i), a Fund of AGENCY: Securities and Exchange
of section 12(d)(1)(A)(i) of the Act, Funds will notify the Fund of the Commission (‘‘Commission’’).
including any purchases made directly investment. At such time, the Fund of ACTION: Notice of application for an
from an Underwriting Affiliate. The Funds will also transmit to the Fund a order under sections 17(d) and 57(i) of
Board will review these purchases list of the names of each Fund of Funds the Investment Company Act of 1940
periodically, but no less frequently than Affiliate and Underwriting Affiliate. The (the ‘‘Act’’) and rule 17d–1 under the
annually, to determine whether the Fund of Funds will notify the Fund of Act permitting certain joint transactions
purchases were influenced by the any changes to the list of the names as otherwise prohibited by sections 17(d)
tkelley on DSK3SPTVN1PROD with NOTICES

investment by the Fund of Funds in the soon as reasonably practicable after a and 57(a)(4) of the Act and under rule
Fund. The Board will consider, among change occurs. The Fund and the Fund 17d–1 under the Act.
other things: (i) Whether the purchases of Funds will maintain and preserve a
were consistent with the investment copy of the order, the FOF Participation Summary of Application: Applicants
objectives and policies of the Fund; (ii) Agreement, and the list with any request an order to permit a business
how the performance of securities updated information for the duration of development company (‘‘BDC’’) and
purchased in an Affiliated Underwriting the investment and for a period of not certain closed end investment

VerDate Sep<11>2014 18:43 May 05, 2015 Jkt 235001 PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM 06MYN1
26118 Federal Register / Vol. 80, No. 87 / Wednesday, May 6, 2015 / Notices

(d) Each Affiliated Fund and each and subject to the other conditions set banks having the qualifications
Regulated Fund will bear its own forth in this application. prescribed in Section 26(a)(1) of the Act,
expenses in connection with any such 9. The Non-Interested Directors of and the account will earn a competitive
disposition. each Regulated Fund will be provided rate of interest that will also be divided
8.(a) If any Affiliated Fund or any quarterly for review all information pro rata among the participating
Regulated Fund desires to make a concerning Potential Co-Investment Regulated Funds and Affiliated Funds
Follow-On Investment in a portfolio Transactions and Co-Investment based on the amounts they invest in
company whose securities were Transactions, including investments such Co-Investment Transaction. None
acquired in a Co-Investment made by other Regulated Funds or of the Affiliated Funds, the Advisers,
Transaction, the applicable Advisers Affiliated Funds that the Regulated the other Regulated Funds or any
will: Fund considered but declined to affiliated person of the Regulated Funds
(i) notify each Regulated Fund that participate in, so that the Non-Interested or Affiliated Funds will receive
participated in the Co-Investment Directors may determine whether all additional compensation or
Transaction of the proposed transaction investments made during the preceding remuneration of any kind as a result of
at the earliest practical time; and quarter, including those investments or in connection with a Co-Investment
(ii) formulate a recommendation as to that the Regulated Fund considered but Transaction (other than (a) in the case
the proposed participation, including declined to participate in, comply with of the Regulated Funds and the
the amount of the proposed Follow-On the conditions of the Order. In addition, Affiliated Funds, the pro rata
Investment, by each Regulated Fund. the Non-Interested Directors will transaction fees described above and
(b) A Regulated Fund may participate consider at least annually the continued fees or other compensation described in
in such Follow-On Investment without appropriateness for the Regulated Fund condition 2(c)(iii)(C); and (b) in the case
obtaining prior approval of the Required of participating in new and existing Co- of an Adviser, investment advisory fees
Majority if: (i) The proposed Investment Transactions. paid in accordance with the agreement
participation of each Regulated Fund 10. Each Regulated Fund will between the Adviser and the Regulated
and each Affiliated Fund in such maintain the records required by Fund or Affiliated Fund.
investment is proportionate to its Section 57(f)(3) of the Act as if each of For the Commission, by the Division of
outstanding investments in the issuer the Regulated Funds were a BDC and Investment Management, under delegated
immediately preceding the Follow-On each of the investments permitted under authority.
Investment; and (ii) the Board of the these conditions were approved by the Brent J. Fields,
Regulated Fund has approved as being Required Majority under Section 57(f) of Secretary.
in the best interests of the Regulated the Act.
[FR Doc. 2015–10585 Filed 5–5–15; 8:45 am]
Fund the ability to participate in 11. No Non-Interested Director of a
BILLING CODE 8011–01–P
Follow-On Investments on a pro rata Regulated Fund will also be a director,
basis (as described in greater detail in general partner, managing member or
the application). In all other cases, the principal, or otherwise an ‘‘affiliated
SECURITIES AND EXCHANGE
Adviser will provide its written person’’ (as defined in the Act) of an
COMMISSION
recommendation as to the Regulated Affiliated Fund.
Fund’s participation to the Eligible 12. The expenses, if any, associated [Release No. 34–74849; File No. SR–NYSE–
Directors, and the Regulated Fund will with acquiring, holding or disposing of 2015–02]
participate in such Follow-On any securities acquired in a Co-
Investment Transaction (including, Self-Regulatory Organizations; New
Investment solely to the extent that a
without limitation, the expenses of the York Stock Exchange LLC; Notice of
Required Majority determines that it is
distribution of any such securities Filing of Proposed Rule Change
in the Regulated Fund’s best interests.
(c) If, with respect to any Follow-On registered for sale under the Securities Amending Sections 312.03(b) and
Investment: Act) will, to the extent not payable by 312.04 of the NYSE Listed Company
(i) the amount of the opportunity is the Advisers under their respective Manual To Exempt Early Stage
not based on the Regulated Funds’ and investment advisory agreements with Companies From Having To Obtain
the Affiliated Funds’ outstanding Affiliated Funds and the Regulated Shareholder Approval Before Issuing
investments immediately preceding the Funds, be shared by the Regulated Shares for Cash to Related Parties,
Follow-On Investment; and Funds and the Affiliated Funds in Affiliates of Related Parties or Entities
(ii) the aggregate amount proportion to the relative amounts of the in Which a Related Party has a
recommended by the applicable Adviser securities held or to be acquired or Substantial Interest
to be invested by the applicable disposed of, as the case may be. April 30, 2015.
Regulated Fund in the Follow-On 13. Any transaction fee (including Pursuant to Section 19(b)(1) 1 of the
Investment, together with the amount break-up or commitment fees but Securities Exchange Act of 1934 (the
proposed to be invested by the other excluding broker’s fees contemplated ‘‘Act’’) 2 and Rule 19b–4 thereunder,3
participating Regulated Funds and Section 17(e) or 57(k) of the Act, as notice is hereby given that, on April 16,
Affiliated Funds, collectively, in the applicable), received in connection with 2015, New York Stock Exchange LLC
same transaction, exceeds the amount of a Co-Investment Transaction will be (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
the investment opportunity; then the distributed to the participating the Securities and Exchange
investment opportunity will be Regulated Funds and Affiliated Funds Commission (the ‘‘Commission’’) the
allocated among them pro rata based on on a pro rata basis based on the amounts proposed rule change as described in
tkelley on DSK3SPTVN1PROD with NOTICES

each participant’s Available Capital, up they invested or committed, as the case Items I, II, and III below, which Items
to the maximum amount proposed to be may be, in such Co-Investment have been prepared by the self-
invested by each. Transaction. If any transaction fee is to regulatory organization. The
(d) The acquisition of Follow-On be held by an Adviser pending
Investments as permitted by this consummation of the transaction, the 1 15 U.S.C. 78s(b)(1).
condition will be considered a Co- fee will be deposited into an account 2 15 U.S.C. 78a.
Investment Transaction for all purposes maintained by such Adviser at a bank or 3 17 CFR 240.19b–4.

VerDate Sep<11>2014 18:43 May 05, 2015 Jkt 235001 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 E:\FR\FM\06MYN1.SGM 06MYN1
Document Created: 2015-12-16 07:40:51
Document Modified: 2015-12-16 07:40:51
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of application for an order under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ``Act'') and rule 17d- 1 under the Act permitting certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and under rule 17d-1 under the Act.
Dates		The application was filed on October 23, 2014 and amended on December 12, 2014 and April 6, 2015. Applicants have agreed to file an amendment during the notice period, the substance of which is reflected herein.
Contact		Jaea F. Hahn, Senior Counsel, at (202) 551-6870 or David P. Bartels, Branch Chief, at (202) 551-6821 (Chief Counsel's Office, Division of Investment Management).
FR Citation		80 FR 26114