80_FR_60920 80 FR 60726 - Triton Pacific Investment Corporation, Inc., et al.;

80 FR 60726 - Triton Pacific Investment Corporation, Inc., et al.;

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 194 (October 7, 2015)

Page Range60726-60730
FR Document2015-25465

Federal Register, Volume 80 Issue 194 (Wednesday, October 7, 2015) 
[Federal Register Volume 80, Number 194 (Wednesday, October 7, 2015)]
[Notices]
[Pages 60726-60730]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-25465]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31856; File No. 812-14122]


Triton Pacific Investment Corporation, Inc., et al.; Notice of 
Application

September 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 to permit certain joint transactions otherwise 
prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 
under the Act.

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

Applicants:  Triton Pacific Investment Corporation, Inc. (the 
``Company''), Triton Pacific Income & Growth Fund IV, LP (``Fund IV''), 
Triton Pacific Platinum Fund IV, LP (``Platinum IV'' and, together with 
Fund IV, the ``Existing Affiliated Private Funds''), TPCP Fund Manager 
IV, LLC (the ``Fund Manager''), Triton Pacific Adviser, LLC (the ``BDC 
Adviser''), Triton Pacific Capital Partners, LLC (``TPCP''), and Triton 
Pacific Group, Inc. (``TPG'').

Filing Dates:  The application was filed on February 8, 2013, and 
amended on May 17, 2013, July 15, 2013, December 18, 2013, June 12, 
2014, November 25, 2014, May 28, 2015, and September 29, 2015.

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 October 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:  Brent J. Fields, Secretary, U.S. Securities and Exchange 
Commission, 100 F St. NE., Washington, DC 20549-1090. Applicants: 10877 
Wilshire Blvd., 12th Floor, Los Angeles, CA 90024.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873 or Mary Kay Frech, 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.

[[Page 60727]]

Applicants' Representations

    1. The Company, a Maryland corporation, 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. \1\ The Company's Objectives and 
Strategies\2\ are to maximize total return by generating current income 
from debt investments and long term capital appreciation from equity 
investments. The Company invests primarily in debt and equity 
investments in small and mid-sized private U.S. companies. The board of 
directors of the Company (for any Regulated Fund, the ``Board'') is 
comprised of five members, three of whom are not ``interested persons'' 
as defined in section 2(a)(19) of the Act (``Independent Directors''). 
Craig Faggen (the ``Principal'') serves as a director on the Company's 
Board and as the Company's chief executive officer. The Principal 
controls TPG, TPCP, and the BDC Adviser.
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    \1\ Section 2(a)(48) defines a BDC to be any closed-end 
investment company that operates for the purpose of making 
investments in securities described in sections 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
    \2\ ``Objectives and Strategies'' means a Regulated Fund's (as 
defined below) investment objectives and strategies, as described in 
the Regulated Fund's registration statement on Form N-2, other 
filings the Regulated Fund makes 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.
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    2. The Existing Affiliated Private Funds are parallel funds. Fund 
IV is a Delaware limited partnership and Platinum IV is a Delaware 
limited liability company. Each Existing Affiliated Private Fund would 
be an investment company but for section 3(c)(1) or 3(c)(7) of the Act. 
The investment strategy of each Existing Affiliated Private Fund is to 
generate current income and capital appreciation by investing in small 
and mid-sized private U.S. companies. The Existing Affiliated Private 
Funds and the Company have similar investment strategies.
    3. The BDC Adviser, a Delaware limited liability company, is 
registered as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act''). The BDC Adviser serves as investment 
adviser to the Company and the Existing Affiliated Private Funds.
    4. The Fund Manager, a Delaware limited liability company, is the 
general partner of the Existing Affiliated Private Funds. TPCP, a 
California limited liability company, is the managing member of the 
Fund Manager. TPG, a California corporation, is the managing member of 
TPCP.
    5. Applicants seek an order (``Order'') to permit one or more 
Regulated Funds\3\ and/or one or more Affiliated Private Funds\4\ 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 (``Co-Investment Program''); \5\ 
and (b) making additional investments in securities of such issuers, 
including through the exercise of warrants, conversion privileges, and 
other rights to purchase additional 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 Private 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) could not participate together with one or more 
other Regulated Funds and/or one or more Affiliated Private Funds 
without obtaining and relying on the Order.\6\
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    \3\ ``Regulated Funds'' 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 the BDC Adviser and 
any future investment adviser that controls, is controlled by, or is 
under common control with the BDC Adviser and is registered as an 
investment adviser under the Advisers Act. All references to the 
term ``Adviser'' include successors-in-interest to the Adviser. A 
successor-in-interest is limited to an entity that results from a 
reorganization into another jurisdiction or change in the type of 
business organization.
    \4\ ``Affiliated Private Fund'' means the Existing Affiliated 
Private Funds and any Future Affiliated Private Fund. ``Future 
Affiliated Private 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.
    \5\ 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.
    \6\ All existing entities that currently intend to rely on the 
Order have been named as applicants. Any other existing or future 
entity that subsequently relies on the Order will comply with the 
terms and conditions of the application.
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    6. Applicants state that a Regulated Fund may, from time to time, 
form one or more Wholly-Owned Investment Subs.\7\ Such a subsidiary 
would be prohibited from investing in a Co-Investment Transaction with 
any other Regulated Fund or Affiliated Private 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 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 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 of the Regulated 
Fund will also be informed of, and take into consideration, the 
relative participation of the Regulated Fund and the Wholly-Owned 
Investment Sub.
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    \7\ 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 beneficially holding, directly or indirectly, 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.
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    7. When considering Potential Co-Investment Transactions for any 
Regulated Fund, the Adviser will consider only the Objectives and 
Strategies, investment policies, investment positions, capital 
available for investment (``Available Capital''), and other pertinent 
factors applicable to that Regulated Fund.\8\ The Adviser

[[Page 60728]]

expects that any portfolio company that is an appropriate investment 
for a Regulated Fund should also be an appropriate investment for one 
or more other Regulated Funds and/or one or more Affiliated Private 
Funds, with certain exceptions based on Available Capital or 
diversification.\9\
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    \8\ ``Available Capital'' consists solely of liquid assets not 
held for permanent investment, including cash, amounts that can 
currently be drawn from lines of credit, and marketable securities 
held for short-term purposes. In addition, for the Affiliated 
Private Funds, Available Capital would include bona fide uncalled 
capital commitments that can be called by the settlement date of the 
Co-Investment Transaction.
    \9\ The Regulated Funds, 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 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.
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    \10\ In the case of a Regulated Fund that is a registered 
closed-end fund, the directors that make up the Required Majority 
will be determined as if the Regulated Fund were a BDC subject to 
section 57(o).
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    9. 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 Private Fund in such disposition or Follow-On Investment 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.
    10. No Independent Director of a Regulated Fund will have a direct 
or indirect financial interest in any Co-Investment Transaction, other 
than through share ownership in one of the Regulated Funds, including 
any interest in securities of a company whose securities are acquired 
in the Co-Investment Transaction.
    11. Under condition 14, if an Adviser, the Principal, any person 
controlling, controlled by, or under common control with the Adviser or 
the Principal, and the Affiliated Private Funds (collectively, the 
``Holders'') own in the aggregate more than 25% of the outstanding 
voting securities of the Company or another a Regulated Fund 
(``Shares''), then the Holders will vote such Shares as directed by an 
independent third party when voting on matters specified in the 
condition. Applicants believe that this condition will ensure that the 
Independent Directors will act independently in evaluating the Co-
Investment Program, because the ability of an Adviser or the Principal 
to influence the Independent Directors by a suggestion, explicit or 
implied, that the Independent Directors can be removed will be limited 
significantly. Applicants represent that the Independent Directors will 
evaluate and approve any such voting trust or proxy adviser, taking 
into accounts its qualifications, reputation for independence, cost to 
the shareholders, and other factors that they deem relevant.

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 Private 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 any Order granting the requested relief shall 
be subject to the following conditions:
    1. Each time an Adviser considers a Potential Co-Investment 
Transaction for the Affiliated Private Funds or another Regulated Fund 
that falls within a Regulated Fund's then-current Objectives and 
Strategies, the Adviser will make an independent determination of the 
appropriateness of the investment for the 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, the Adviser 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

[[Page 60729]]

the other participating Regulated Funds and Affiliated Private 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 participating party'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 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 
the Affiliated Private Funds) to the Eligible Directors of each 
participating Regulated Fund for their consideration. A Regulated Fund 
will co-invest with one or more Regulated Funds and/or one or more 
Affiliated Private 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 other Regulated Funds or the Affiliated 
Private 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 the 
Affiliated Private Funds; provided that, if any other Regulated Fund or 
the Affiliated Private Funds, 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 will not be interpreted to prohibit the Required 
Majority from reaching the conclusions required by this condition 
(2)(c)(iii), if:
    (A) the Eligible Directors will have the right to ratify the 
selection of such director or board observer, if any;
    (B) the Adviser agrees to, and does, provide, periodic reports to 
the Regulated Fund's Board with respect to the actions of the director 
or the information received by the board observer or obtained through 
the exercise of any similar right to participate in the governance or 
management of the portfolio company; and
    (C) any fees or other compensation that the Affiliated Private 
Funds or any Regulated Fund or any affiliated person of the Affiliated 
Private Funds or any Regulated Fund receives in connection with the 
right of the Affiliated Private Funds or the 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 Private 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 Private 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 each Regulated Fund's 
Board, on a quarterly basis, a record of all investments in Potential 
Co-Investment Transactions made by any of the other Regulated Funds or 
the Affiliated Private 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 Regulated Fund's 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 or Affiliated 
Private Fund or any affiliated person of another Regulated Fund or 
Affiliated Private Fund is an existing investor.
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    \11\ This exception only applies to Follow-On Investments by a 
Regulated Fund in issuers in which that Regulated Fund already holds 
investments.
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    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 
Private Fund. The grant to any Affiliated Private 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 Private 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 Private 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 Private Fund 
in such disposition is proportionate to its outstanding investments in 
the issuer immediately preceding the disposition; (ii) the Regulated 
Fund's Board has approved as being in the best interests of the 
Regulated Fund the ability to participate in such dispositions on a pro 
rata basis

[[Page 60730]]

(as described in greater detail in the application); and (iii) the 
Regulated Fund's Board 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.
    (d) Each Affiliated Private Fund and each Regulated Fund will bear 
their own expenses in connection with any such disposition.
    8. (a) If any Affiliated Private 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 
Private Fund in such investment is proportionate to its outstanding 
investments in the issuer immediately preceding the Follow-On 
Investment; and (ii) the Regulated Fund's Board 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 Private Funds' outstanding investments 
immediately preceding the Follow-On Investment; and
    (ii) the aggregate amount recommended by the applicable Adviser to 
be invested by each Regulated Fund in the Follow-On Investment, 
together with the amount proposed to be invested by the participating 
Affiliated Private 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 Available Capital, 
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 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 the Affiliated Private 
Funds that the Regulated Fund considered but declined to participate 
in, so that the Independent Directors may determine whether all 
investments made during the preceding quarter, including investments 
that the Regulated Fund considered but declined to participate in, 
comply with the conditions of the Order. In addition, the Independent 
Directors will consider at least annually the continued appropriateness 
for the 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).
    11. No Independent 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 any of the 
Affiliated Private Funds.
    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 investment advisory 
agreements with the Regulated Funds and the Affiliated Private Funds, 
be shared by the Regulated Funds and the Affiliated Private Funds in 
proportion to the relative amounts of the securities held or 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 by 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 the Affiliated Private 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 the Adviser at a bank or banks 
having the qualifications prescribed in section 26(a)(1) of the Act, 
and the account will earn a competitive rate of interest that will also 
be divided pro rata among the participating Regulated Funds and the 
Affiliated Private Funds based on the amounts they invest in such Co-
Investment Transaction. None of the Affiliated Private Funds, the 
Advisers, the other Regulated Funds, or any affiliated person of the 
Regulated Funds or the Affiliated Private 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 Private 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 respective 
agreements between the Adviser and the Regulated Funds or the 
Affiliated Private Funds).
    14. If the Holders own in the aggregate more than 25% of the 
outstanding Shares of a Regulated Fund, then the Holders will vote such 
Shares as directed by an independent third party (such as the trustee 
of a voting trust or a proxy adviser) when voting on (1) the election 
of directors; (2) the removal of one or more directors; or (3) any 
matters requiring approval by the vote of a majority of the outstanding 
voting securities, as defined in section 2(a)(42) of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-25465 Filed 10-6-15; 8:45 am]
 BILLING CODE 8011-01-P

60726 Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices 19(b)(3)(A)(iii) of the Act 11 and Rule file number should be included on the SUMMARY OF APPLICATION: Applicants 19b–4(f)(6) thereunder.12 Because the subject line if email is used. To help the request an order to permit certain proposed rule change does not: (i) Commission process and review your business development companies Significantly affect the protection of comments more efficiently, please use (‘‘BDCs’’) and closed-end management investors or the public interest; (ii) only one method. The Commission will investment companies to co-invest in impose any significant burden on post all comments on the Commission’s portfolio companies with each other and competition; and (iii) become operative Internet Web site (http://www.sec.gov/ with affiliated investment funds. prior to 30 days from the date on which rules/sro.shtml). Copies of the APPLICANTS: Triton Pacific Investment it was filed, or such shorter time as the submission, all subsequent Corporation, Inc. (the ‘‘Company’’), Commission may designate, if amendments, all written statements Triton Pacific Income & Growth Fund consistent with the protection of with respect to the proposed rule IV, LP (‘‘Fund IV’’), Triton Pacific investors and the public interest, the change that are filed with the Platinum Fund IV, LP (‘‘Platinum IV’’ proposed rule change has become Commission, and all written and, together with Fund IV, the effective pursuant to Section 19(b)(3)(A) communications relating to the ‘‘Existing Affiliated Private Funds’’), of the Act and Rule 19b–4(f)(6)(iii) proposed rule change between the TPCP Fund Manager IV, LLC (the ‘‘Fund thereunder. Commission and any person, other than Manager’’), Triton Pacific Adviser, LLC A proposed rule change filed under those that may be withheld from the (the ‘‘BDC Adviser’’), Triton Pacific Rule 19b–4(f)(6) 13 normally does not public in accordance with the Capital Partners, LLC (‘‘TPCP’’), and become operative prior to 30 days after provisions of 5 U.S.C. 552, will be Triton Pacific Group, Inc. (‘‘TPG’’). the date of the filing. However, pursuant available for Web site viewing and FILING DATES: The application was filed to Rule 19b4(f)(6)(iii),14 the Commission printing in the Commission’s Public on February 8, 2013, and amended on may designate a shorter time if such Reference Section, 100 F Street NE., May 17, 2013, July 15, 2013, December action is consistent with the protection Washington, DC 20549–1090. Copies of 18, 2013, June 12, 2014, November 25, of investors and the public interest. the filing will also be available for 2014, May 28, 2015, and September 29, At any time within 60 days of the inspection and copying at the NYSE’s 2015. filing of such proposed rule change, the principal office and on its Internet Web HEARING OR NOTIFICATION OF HEARING: An Commission summarily may site at www.nyse.com. All comments order granting the requested relief will temporarily suspend such rule change if received will be posted without change; be issued unless the Commission orders it appears to the Commission that such the Commission does not edit personal a hearing. Interested persons may action is necessary or appropriate in the identifying information from request a hearing by writing to the public interest, for the protection of submissions. You should submit only Commission’s Secretary and serving investors, or otherwise in furtherance of information that you wish to make applicants with a copy of the request, the purposes of the Act. If the available publicly. All submissions personally or by mail. Hearing requests Commission takes such action, the should refer to File Number SR– should be received by the Commission Commission shall institute proceedings NYSEMKT–2015–66 and should be by 5:30 p.m. on October 26, 2015, and under Section 19(b)(2)(B) 15 of the Act to submitted on or before October 28, should be accompanied by proof of determine whether the proposed rule 2015. service on applicants, in the form of an change should be approved or For the Commission, by the Division of affidavit or, for lawyers, a certificate of disapproved. Trading and Markets, pursuant to delegated service. Pursuant to rule 0–5 under the IV. Solicitation of Comments authority.16 Act, hearing requests should state the Interested persons are invited to Robert W. Errett, nature of the writer’s interest, any facts submit written data, views, and Deputy Secretary. bearing upon the desirability of a arguments concerning the foregoing, [FR Doc. 2015–25464 Filed 10–6–15; 8:45 am] hearing on the matter, the reason for the including whether the proposed rule request, and the issues contested. BILLING CODE 8011–01–P change is consistent with the Act. Persons who wish to be notified of a Comments may be submitted by any of hearing may request notification by the following methods: SECURITIES AND EXCHANGE writing to the Commission’s Secretary. COMMISSION ADDRESSES: Brent J. Fields, Secretary, Electronic Comments: U.S. Securities and Exchange • Use the Commission’s Internet Commission, 100 F St. NE., Washington, [Release No. IC–31856; File No. 812–14122] comment form (http://www.sec.gov/ DC 20549–1090. Applicants: 10877 rules/sro.shtml); or Triton Pacific Investment Corporation, Wilshire Blvd., 12th Floor, Los Angeles, • Send an email to rule-comments@ CA 90024. Inc., et al.; Notice of Application sec.gov. Please include File Number SR– FOR FURTHER INFORMATION CONTACT: NYSEMKT–2015–66 on the subject line. September 30, 2015. Laura J. Riegel, Senior Counsel, at (202) Paper Comments: AGENCY:Securities and Exchange 551–6873 or Mary Kay Frech, Branch Commission (‘‘Commission’’). Chief, at (202) 551–6821 (Chief • Send paper comments in triplicate Counsel’s Office, Division of Investment to Brent J. Fields, Secretary, Securities ACTION: Notice of application for an Management). and Exchange Commission, 100 F Street order under sections 17(d) and 57(i) of SUPPLEMENTARY INFORMATION: The asabaliauskas on DSK5VPTVN1PROD with NOTICES NE., Washington, DC 20549–1090. the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the following is a summary of the All submissions should refer to File application. The complete application Number SR–NYSEMKT–2015–66. This Act to permit certain joint transactions otherwise prohibited by sections 17(d) may be obtained via the Commission’s 11 15 and 57(a)(4) of the Act and rule 17d–1 Web site by searching for the file U.S.C. 78s(b)(3)(A)(iii). 12 17 CFR 240.19b–4(f)(6). under the Act. number, or for an applicant using the 13 17 CFR 240.19b–4(f)(6). Company name box, at http:// 14 17 CFR 240.19b–4(f)(6)(iii). www.sec.gov/search/search.htm or by 15 15 U.S.C. 78s(b)(2)(B). 16 17 CFR 200.30–3(a)(12). calling (202) 551–8090. 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Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices 60727 Applicants’ Representations member of the Fund Manager. TPG, a 6. Applicants state that a Regulated 1. The Company, a Maryland California corporation, is the managing Fund may, from time to time, form one corporation, is organized as a closed- member of TPCP. or more Wholly-Owned Investment end management investment company 5. Applicants seek an order (‘‘Order’’) Subs.7 Such a subsidiary would be that has elected to be regulated as a BDC to permit one or more Regulated Funds3 prohibited from investing in a Co- under section 54(a) of the Act. 1 The and/or one or more Affiliated Private Investment Transaction with any other Company’s Objectives and Strategies2 Funds4 to participate in the same Regulated Fund or Affiliated Private are to maximize total return by investment opportunities through a Fund because it would be a company generating current income from debt controlled by its parent Regulated Fund proposed co-investment program (the investments and long term capital for purposes of section 57(a)(4) and rule ‘‘Co-Investment Program’’) where such appreciation from equity investments. 17d-1. Applicants request that each participation would otherwise be The Company invests primarily in debt Wholly-Owned Investment Sub be prohibited under section 57(a)(4) and and equity investments in small and permitted to participate in Co- rule 17d-1 by (a) co-investing with each Investment Transactions in lieu of its mid-sized private U.S. companies. The other in securities issued by issuers in parent Regulated Fund and that the board of directors of the Company (for private placement transactions in which Wholly-Owned Investment Sub’s any Regulated Fund, the ‘‘Board’’) is an Adviser negotiates terms in addition participation in any such transaction be comprised of five members, three of to price (‘‘Co-Investment Program’’); 5 treated, for purposes of the Order, as whom are not ‘‘interested persons’’ as and (b) making additional investments though the parent Regulated Fund were defined in section 2(a)(19) of the Act in securities of such issuers, including participating directly. Applicants (‘‘Independent Directors’’). Craig Faggen through the exercise of warrants, represent that this treatment is justified (the ‘‘Principal’’) serves as a director on conversion privileges, and other rights because a Wholly-Owned Investment the Company’s Board and as the to purchase additional securities of the Sub would have no purpose other than Company’s chief executive officer. The issuers (‘‘Follow-On Investments’’). ‘‘Co- serving as a holding vehicle for the Principal controls TPG, TPCP, and the Investment Transaction’’ means any Regulated Fund’s investments and, BDC Adviser. transaction in which a Regulated Fund therefore, no conflicts of interest could 2. The Existing Affiliated Private (or its Wholly-Owned Investment Sub, arise between the Regulated Fund and Funds are parallel funds. Fund IV is a as defined below) participated together the Wholly-Owned Investment Sub. The Delaware limited partnership and with one or more other Regulated Funds Regulated Fund’s Board would make all Platinum IV is a Delaware limited and/or one or more Affiliated Private relevant determinations under the liability company. Each Existing Funds in reliance on the requested conditions with regard to a Wholly- Affiliated Private Fund would be an Order. ‘‘Potential Co-Investment Owned Investment Sub’s participation investment company but for section Transaction’’ means any investment in a Co-Investment Transaction, and the 3(c)(1) or 3(c)(7) of the Act. The opportunity in which a Regulated Fund Regulated Fund’s Board would be investment strategy of each Existing (or its Wholly-Owned Investment Sub) informed of, and take into Affiliated Private Fund is to generate could not participate together with one consideration, any proposed use of a current income and capital appreciation or more other Regulated Funds and/or Wholly-Owned Investment Sub in the by investing in small and mid-sized one or more Affiliated Private Funds Regulated Fund’s place. If the Regulated private U.S. companies. The Existing without obtaining and relying on the Fund proposes to participate in the Affiliated Private Funds and the Order.6 same Co-Investment Transaction with Company have similar investment any of its Wholly-Owned Investment strategies. 3 ‘‘Regulated Funds’’ means the Company and any Subs, the Board of the Regulated Fund 3. The BDC Adviser, a Delaware Future Regulated Fund. ‘‘Future Regulated Fund’’ will also be informed of, and take into limited liability company, is registered means any closed-end management investment consideration, the relative participation as an investment adviser under the company (a) that is registered under the Act or has elected to be regulated as BDC, (b) whose of the Regulated Fund and the Wholly- Investment Advisers Act of 1940 (the investment adviser is an Adviser, and (c) that Owned Investment Sub. ‘‘Advisers Act’’). The BDC Adviser intends to participate in the Co-Investment 7. When considering Potential Co- serves as investment adviser to the Program. The term ‘‘Adviser’’ means the BDC Investment Transactions for any Company and the Existing Affiliated Adviser and any future investment adviser that controls, is controlled by, or is under common Regulated Fund, the Adviser will Private Funds. control with the BDC Adviser and is registered as consider only the Objectives and 4. The Fund Manager, a Delaware an investment adviser under the Advisers Act. All Strategies, investment policies, limited liability company, is the general references to the term ‘‘Adviser’’ include investment positions, capital available partner of the Existing Affiliated Private successors-in-interest to the Adviser. A successor- in-interest is limited to an entity that results from for investment (‘‘Available Capital’’), Funds. TPCP, a California limited a reorganization into another jurisdiction or change and other pertinent factors applicable to liability company, is the managing in the type of business organization. that Regulated Fund.8 The Adviser 4 ‘‘Affiliated Private Fund’’ means the Existing 1 Section 2(a)(48) defines a BDC to be any closed- Affiliated Private Funds and any Future Affiliated 7 The term ‘‘Wholly-Owned Investment Sub’’ end investment company that operates for the Private Fund. ‘‘Future Affiliated Private Fund’’ means an entity: (i) That is wholly-owned by a purpose of making investments in securities means any entity (a) whose investment adviser is Regulated Fund (with the Regulated Fund at all described in sections 55(a)(1) through 55(a)(3) of the an Adviser, (b) that would be an investment times beneficially holding, directly or indirectly, Act and makes available significant managerial company but for section 3(c)(1) or 3(c)(7) of the Act, 100% of the voting and economic interests); (ii) assistance with respect to the issuers of such and (c) that intends to participate in the Co- asabaliauskas on DSK5VPTVN1PROD with NOTICES whose sole business purpose is to hold one or more securities. Investment Program. investments on behalf of the Regulated Fund; (iii) 5 The term ‘‘private placement transactions’’ 2 ‘‘Objectives and Strategies’’ means a Regulated with respect to which the Regulated Fund’s Board Fund’s (as defined below) investment objectives means transactions in which the offer and sale of has the sole authority to make all determinations and strategies, as described in the Regulated Fund’s securities by the issuer are exempt from registration with respect to the entity’s participation under the registration statement on Form N–2, other filings under the Securities Act. conditions of the application; and (iv) that would the Regulated Fund makes with the Commission 6 All existing entities that currently intend to rely be an investment company but for section 3(c)(1) or under the Securities Act of 1933 (the ‘‘Securities on the Order have been named as applicants. Any 3(c)(7) of the Act. Act’’), or under the Securities Exchange Act of other existing or future entity that subsequently 8 ‘‘Available Capital’’ consists solely of liquid 1934, and the Regulated Fund’s reports to relies on the Order will comply with the terms and assets not held for permanent investment, including shareholders. conditions of the application. Continued VerDate Sep<11>2014 18:12 Oct 06, 2015 Jkt 238001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1

60728 Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices expects that any portfolio company that 10. No Independent Director of a 17(d) of the Act and rule 17d-1 under is an appropriate investment for a Regulated Fund will have a direct or the Act are applicable to Regulated Regulated Fund should also be an indirect financial interest in any Co- Funds that are registered closed-end appropriate investment for one or more Investment Transaction, other than investment companies. other Regulated Funds and/or one or through share ownership in one of the 2. Section 17(d) of the Act and rule more Affiliated Private Funds, with Regulated Funds, including any interest 17d-1 under the Act prohibit affiliated certain exceptions based on Available in securities of a company whose persons of a registered investment Capital or diversification.9 securities are acquired in the Co- company from participating in joint Investment Transaction. transactions with the company unless 8. Other than pro rata dispositions 11. Under condition 14, if an Adviser, the Commission has granted an order and Follow-On Investments as provided the Principal, any person controlling, permitting such transactions. In passing in conditions 7 and 8, and after making controlled by, or under common control upon applications under rule 17d-1, the the determinations required in with the Adviser or the Principal, and Commission considers whether the conditions 1 and 2(a), the Adviser will the Affiliated Private Funds company’s participation in the joint present each Potential Co-Investment (collectively, the ‘‘Holders’’) own in the transaction is consistent with the Transaction and the proposed allocation aggregate more than 25% of the provisions, policies, and purposes of the to the directors of the Board eligible to outstanding voting securities of the Act and the extent to which such vote under section 57(o) of the Act Company or another a Regulated Fund participation is on a basis different from (‘‘Eligible Directors’’), and the ‘‘required (‘‘Shares’’), then the Holders will vote or less advantageous than that of other majority,’’ as defined in section 57(o) of such Shares as directed by an participants. the Act (‘‘Required Majority’’)10 will independent third party when voting on 3. Applicants state that in the absence approve each Co-Investment matters specified in the condition. of the requested relief, the Regulated Transaction prior to any investment by Applicants believe that this condition Funds would be, in some the participating Regulated Fund. will ensure that the Independent circumstances, limited in their ability to 9. With respect to the pro rata Directors will act independently in participate in attractive and appropriate dispositions and Follow-On Investments evaluating the Co-Investment Program, investment opportunities. Applicants provided in conditions 7 and 8, a because the ability of an Adviser or the believe that the proposed terms and Regulated Fund may participate in a pro Principal to influence the Independent conditions will ensure that the Co- rata disposition or Follow-On Directors by a suggestion, explicit or Investment Transactions are consistent Investment without obtaining prior implied, that the Independent Directors with the protection of each Regulated approval of the Required Majority if, can be removed will be limited Fund’s shareholders and with the among other things: (i) The proposed significantly. Applicants represent that purposes intended by the policies and participation of each Regulated Fund the Independent Directors will evaluate provisions of the Act. Applicants state and Affiliated Private Fund in such and approve any such voting trust or that the Regulated Funds’ participation disposition or Follow-On Investment is proxy adviser, taking into accounts its in the Co-Investment Transactions will proportionate to its outstanding qualifications, reputation for be consistent with the provisions, investments in the issuer immediately independence, cost to the shareholders, policies, and purposes of the Act and on preceding the disposition or Follow-On and other factors that they deem a basis that is not different from or less Investment, as the case may be; and (ii) relevant. advantageous than that of other the Board of the Regulated Fund has Applicants’ Legal Analysis participants. approved that Regulated Fund’s Applicants’ Conditions participation in pro rata dispositions 1. Section 57(a)(4) of the Act prohibits and Follow-On Investments as being in certain affiliated persons of a BDC from Applicants agree that any Order the best interests of the Regulated Fund. participating in joint transactions with granting the requested relief shall be If the Board does not so approve, any the BDC or a company controlled by a subject to the following conditions: such disposition or Follow-On BDC in contravention of rules as 1. Each time an Adviser considers a Investment will be submitted to the prescribed by the Commission. Under Potential Co-Investment Transaction for Regulated Fund’s Eligible Directors. The section 57(b)(2) of the Act, any person the Affiliated Private Funds or another Board of any Regulated Fund may at any who is directly or indirectly controlling, Regulated Fund that falls within a time rescind, suspend or qualify its controlled by, or under common control Regulated Fund’s then-current approval of pro rata dispositions and with a BDC is subject to section 57(a)(4). Objectives and Strategies, the Adviser Applicants submit that each of the will make an independent Follow-On Investments with the result Regulated Funds and Affiliated Private determination of the appropriateness of that all dispositions and/or Follow-On Funds could be deemed to be a person the investment for the Regulated Fund Investments must be submitted to the related to each Regulated Fund in a in light of the Regulated Fund’s then- Eligible Directors. manner described by section 57(b) by current circumstances. virtue of being under common control. 2. (a) If the Adviser deems a Regulated cash, amounts that can currently be drawn from lines of credit, and marketable securities held for Section 57(i) of the Act provides that, Fund’s participation in any Potential short-term purposes. In addition, for the Affiliated until the Commission prescribes rules Co-Investment Transaction to be Private Funds, Available Capital would include under section 57(a)(4), the appropriate for the Regulated Fund, the bona fide uncalled capital commitments that can be Commission’s rules under section 17(d) Adviser will then determine an asabaliauskas on DSK5VPTVN1PROD with NOTICES called by the settlement date of the Co-Investment Transaction. of the Act applicable to registered appropriate level of investment for the 9 The Regulated Funds, however, will not be closed-end investment companies will Regulated Fund. obligated to invest, or co-invest, when investment be deemed to apply to transactions (b) If the aggregate amount opportunities are referred to them. subject to section 57(a)(4). Because the recommended by the applicable Adviser 10 In the case of a Regulated Fund that is a Commission has not adopted any rules to be invested by the applicable registered closed-end fund, the directors that make up the Required Majority will be determined as if under section 57(a)(4), rule 17d-1 also Regulated Fund in the Potential Co- the Regulated Fund were a BDC subject to section applies to joint transactions with Investment Transaction, together with 57(o). Regulated Funds that are BDCs. Section the amount proposed to be invested by VerDate Sep<11>2014 18:12 Oct 06, 2015 Jkt 238001 PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1

Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices 60729 the other participating Regulated Funds (A) the Eligible Directors will have the subject to examination by the and Affiliated Private Funds, right to ratify the selection of such Commission and its staff. collectively in the same transaction, director or board observer, if any; 5. Except for Follow-On Investments exceeds the amount of the investment (B) the Adviser agrees to, and does, made in accordance with condition 8,11 opportunity, the investment opportunity provide, periodic reports to the a Regulated Fund will not invest in will be allocated among them pro rata Regulated Fund’s Board with respect to reliance on the Order in any issuer in based on each participating party’s the actions of the director or the which another Regulated Fund or Available Capital, up to the amount information received by the board Affiliated Private Fund or any affiliated proposed to be invested by each. The observer or obtained through the person of another Regulated Fund or applicable Adviser will provide the exercise of any similar right to Affiliated Private Fund is an existing Eligible Directors of each participating participate in the governance or investor. Regulated Fund with information management of the portfolio company; 6. A Regulated Fund will not concerning each participating party’s and participate in any Potential Co- Available Capital to assist the Eligible (C) any fees or other compensation Investment Transaction unless the Directors with their review of the that the Affiliated Private Funds or any terms, conditions, price, class of Regulated Fund’s investments for Regulated Fund or any affiliated person securities to be purchased, settlement compliance with these allocation of the Affiliated Private Funds or any date, and registration rights will be the procedures. Regulated Fund receives in connection same for each participating Regulated (c) After making the determinations with the right of the Affiliated Private Fund and Affiliated Private Fund. The required in conditions 1 and 2(a), the Funds or the Regulated Fund to grant to any Affiliated Private Fund or applicable Adviser will distribute nominate a director or appoint a board another Regulated Fund, but not the written information concerning the observer or otherwise to participate in Regulated Fund, of the right to nominate Potential Co-Investment Transaction the governance or management of the a director for election to a portfolio (including the amount proposed to be portfolio company will be shared company’s board of directors, the right invested by each participating Regulated proportionately among the participating to have an observer on the board of Fund and the Affiliated Private Funds) Affiliated Private Funds (who each may, directors or similar rights to participate to the Eligible Directors of each in turn, share its portion with its in the governance or management of the participating Regulated Fund for their affiliated persons) and the participating portfolio company will not be consideration. A Regulated Fund will Regulated Funds in accordance with the interpreted so as to violate this co-invest with one or more Regulated amount of each party’s investment; and condition 6, if conditions 2(c)(iii)(A), (B) Funds and/or one or more Affiliated and (C) are met. (iv) the proposed investment by the Private Funds only if, prior to the 7. (a) If any Affiliated Private Fund or Regulated Fund will not benefit the Regulated Fund’s participation in the any Regulated Fund elects to sell, Advisers, the Affiliated Private Funds or Potential Co-Investment Transaction, a exchange or otherwise dispose of an the other Regulated Funds or any Required Majority concludes that: interest in a security that was acquired (i) the terms of the Potential Co- affiliated person of any of them (other than the parties to the Co-Investment in a Co-Investment Transaction, the Investment Transaction, including the applicable Advisers will: consideration to be paid, are reasonable Transaction), except (A) to the extent permitted by condition 13, (B) to the (i) notify each Regulated Fund that and fair to the Regulated Fund and its participated in the Co-Investment shareholders and do not involve extent permitted by section 17(e) or 57(k) of the Act, as applicable, (C) Transaction of the proposed disposition overreaching in respect of the Regulated at the earliest practical time; and Fund or its shareholders on the part of indirectly, as a result of an interest in the securities issued by one of the (ii) formulate a recommendation as to any person concerned; participation by each Regulated Fund in (ii) the Potential Co-Investment parties to the Co-Investment Transaction, or (D) in the case of fees or the disposition. Transaction is consistent with: (b) Each Regulated Fund will have the (A) the interests of the shareholders of other compensation described in condition 2(c)(iii)(C). right to participate in such disposition the Regulated Fund; and (B) the Regulated Fund’s then-current 3. Each Regulated Fund has the right on a proportionate basis, at the same Objectives and Strategies; to decline to participate in any Potential price and on the same terms and (iii) the investment by other Regulated Co-Investment Transaction or to invest conditions as those applicable to the Funds or the Affiliated Private Funds less than the amount proposed. participating Affiliated Private Funds would not disadvantage the Regulated 4. The applicable Adviser will present and Regulated Funds. Fund, and participation by the to each Regulated Fund’s Board, on a (c) A Regulated Fund may participate Regulated Fund would not be on a basis quarterly basis, a record of all in such disposition without obtaining different from or less advantageous than investments in Potential Co-Investment prior approval of the Required Majority that of other Regulated Funds or the Transactions made by any of the other if: (i) The proposed participation of each Affiliated Private Funds; provided that, Regulated Funds or the Affiliated Regulated Fund and each Affiliated if any other Regulated Fund or the Private Funds during the preceding Private Fund in such disposition is Affiliated Private Funds, but not the quarter that fell within the Regulated proportionate to its outstanding Regulated Fund itself, gains the right to Fund’s then-current Objectives and investments in the issuer immediately nominate a director for election to a Strategies that were not made available preceding the disposition; (ii) the asabaliauskas on DSK5VPTVN1PROD with NOTICES portfolio company’s board of directors to the Regulated Fund, and an Regulated Fund’s Board has approved as or the right to have a board observer or explanation of why the investment being in the best interests of the any similar right to participate in the opportunities were not offered to the Regulated Fund the ability to participate governance or management of the Regulated Fund. All information in such dispositions on a pro rata basis portfolio company, such event will not presented to the Regulated Fund’s Board 11 This exception only applies to Follow-On be interpreted to prohibit the Required pursuant to this condition will be kept Investments by a Regulated Fund in issuers in Majority from reaching the conclusions for the life of the Regulated Fund and which that Regulated Fund already holds required by this condition (2)(c)(iii), if: at least two years thereafter, and will be investments. VerDate Sep<11>2014 18:12 Oct 06, 2015 Jkt 238001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1

60730 Federal Register / Vol. 80, No. 194 / Wednesday, October 7, 2015 / Notices (as described in greater detail in the invested by the participating Affiliated applicable) received in connection with application); and (iii) the Regulated Private Funds in the same transaction, a Co-Investment Transaction will be Fund’s Board is provided on a quarterly exceeds the amount of the opportunity, distributed to the participating basis with a list of all dispositions made then the amount invested by each such Regulated Funds and the Affiliated in accordance with this condition. In all party will be allocated among them pro Private Funds on a pro rata basis based other cases, the Adviser will provide its rata based on each party’s Available on the amounts they invested or written recommendation as to the Capital, up to the amount proposed to committed, as the case may be, in such Regulated Fund’s participation to the be invested by each. Co-Investment Transaction. If any Eligible Directors, and the Regulated (d) The acquisition of Follow-On transaction fee is to be held by an Fund will participate in such Investments as permitted by this Adviser pending consummation of the disposition solely to the extent that a condition will be considered a Co- transaction, the fee will be deposited Required Majority determines that it is Investment Transaction for all purposes into an account maintained by the in the Regulated Fund’s best interests. and subject to the other conditions set Adviser at a bank or banks having the (d) Each Affiliated Private Fund and forth in the application. qualifications prescribed in section each Regulated Fund will bear their 9. The Independent Directors of each 26(a)(1) of the Act, and the account will own expenses in connection with any Regulated Fund will be provided earn a competitive rate of interest that such disposition. quarterly for review all information will also be divided pro rata among the 8. (a) If any Affiliated Private Fund or concerning Potential Co-Investment participating Regulated Funds and the any Regulated Fund desires to make a Transactions and Co-Investment Affiliated Private Funds based on the Follow-On Investment in a portfolio Transactions, including investments amounts they invest in such Co- company whose securities were made by other Regulated Funds or the Investment Transaction. None of the acquired in a Co-Investment Affiliated Private Funds that the Affiliated Private Funds, the Advisers, Transaction, the applicable Advisers Regulated Fund considered but declined the other Regulated Funds, or any will: to participate in, so that the affiliated person of the Regulated Funds (i) notify each Regulated Fund that Independent Directors may determine or the Affiliated Private Funds will participated in the Co-Investment whether all investments made during receive additional compensation or Transaction of the proposed transaction the preceding quarter, including remuneration of any kind as a result of at the earliest practical time; and investments that the Regulated Fund or in connection with a Co-Investment (ii) formulate a recommendation as to considered but declined to participate Transaction (other than (a) in the case the proposed participation, including in, comply with the conditions of the of the Regulated Funds and the the amount of the proposed Follow-On Order. In addition, the Independent Affiliated Private Funds, the pro rata Investment, by each Regulated Fund. Directors will consider at least annually transaction fees described above and (b) A Regulated Fund may participate the continued appropriateness for the fees or other compensation described in in such Follow-On Investment without Regulated Fund of participating in new condition 2(c)(iii)(C) and (b) in the case obtaining prior approval of the Required and existing Co-Investment of an Adviser, investment advisory fees Majority if: (i) The proposed Transactions. 10. Each Regulated Fund will paid in accordance with the respective participation of each Regulated Fund maintain the records required by section agreements between the Adviser and the and each Affiliated Private Fund in such 57(f)(3) of the Act as if each of the Regulated Funds or the Affiliated investment is proportionate to its Regulated Funds were a BDC and each Private Funds). outstanding investments in the issuer 14. If the Holders own in the aggregate immediately preceding the Follow-On of the investments permitted under more than 25% of the outstanding Investment; and (ii) the Regulated these conditions were approved by the Shares of a Regulated Fund, then the Fund’s Board has approved as being in Required Majority under section 57(f). 11. No Independent Director of a Holders will vote such Shares as the best interests of the Regulated Fund Regulated Fund will also be a director, directed by an independent third party the ability to participate in Follow-On general partner, managing member or (such as the trustee of a voting trust or Investments on a pro rata basis (as principal, or otherwise an ‘‘affiliated a proxy adviser) when voting on (1) the described in greater detail in the person’’ (as defined in the Act), of any election of directors; (2) the removal of application). In all other cases, the of the Affiliated Private Funds. one or more directors; or (3) any matters Adviser will provide its written 12. The expenses, if any, associated requiring approval by the vote of a recommendation as to the Regulated with acquiring, holding or disposing of majority of the outstanding voting Fund’s participation to the Eligible any securities acquired in a Co- securities, as defined in section 2(a)(42) Directors, and the Regulated Fund will Investment Transaction (including, of the Act. participate in such Follow-On Investment solely to the extent that a without limitation, the expenses of the For the Commission, by the Division of Required Majority determines that it is distribution of any such securities Investment Management, under delegated registered for sale under the Securities authority. in the Regulated Fund’s best interests. (c) If, with respect to any Follow-On Act) will, to the extent not payable by Robert W. Errett, Investment: the Advisers under their investment Deputy Secretary. (i) the amount of the opportunity is advisory agreements with the Regulated [FR Doc. 2015–25465 Filed 10–6–15; 8:45 am] not based on the Regulated Funds’ and Funds and the Affiliated Private Funds, BILLING CODE 8011–01–P the Affiliated Private Funds’ be shared by the Regulated Funds and asabaliauskas on DSK5VPTVN1PROD with NOTICES outstanding investments immediately the Affiliated Private Funds in preceding the Follow-On Investment; proportion to the relative amounts of the SMALL BUSINESS ADMINISTRATION and securities held or be acquired or (ii) the aggregate amount disposed of, as the case may be. [Disaster Declaration #14484 and #14485] recommended by the applicable Adviser 13. Any transaction fee (including Florida Disaster #FL–00107 to be invested by each Regulated Fund break-up or commitment fees but in the Follow-On Investment, together excluding broker’s fees contemplated by AGENCY:U.S. Small Business with the amount proposed to be section 17(e) or 57(k) of the Act, as Administration. VerDate Sep<11>2014 18:12 Oct 06, 2015 Jkt 238001 PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 E:\FR\FM\07OCN1.SGM 07OCN1


Document Created: 2015-12-15 08:48:46
Document Modified: 2015-12-15 08:48:46
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice 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 to permit certain joint transactions otherwise prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 under the Act.
DatesThe application was filed on February 8, 2013, and amended on May 17, 2013, July 15, 2013, December 18, 2013, June 12, 2014, November 25, 2014, May 28, 2015, and September 29, 2015.
ContactLaura J. Riegel, Senior Counsel, at (202) 551-6873 or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Chief Counsel's Office, Division of Investment Management).
FR Citation80 FR 60726 
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