81_FR_64411 81 FR 64230 - AB Private Credit Investors Corporation, et al.; Notice of Application

81 FR 64230 - AB Private Credit Investors Corporation, et al.; Notice of Application

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 181 (September 19, 2016)

Page Range64230-64234
FR Document2016-22427

Federal Register, Volume 81 Issue 181 (Monday, September 19, 2016) 
[Federal Register Volume 81, Number 181 (Monday, September 19, 2016)]
[Notices]
[Pages 64230-64234]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-22427]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-32261; File No. 812-14453]


AB Private Credit Investors Corporation, et al.; Notice of 
Application

September 13, 2016.
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.

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SUMMARY OF APPLICATION:  Applicants request an order to permit a 
business development company (``BDC'') and certain closed end 
investment companies to co-invest in portfolio companies with each 
other and with affiliated investment funds.

APPLICANTS:  AB Private Credit Investors Corporation (``AB BDC I''), AB 
Private Credit Investors Middle Market Direct Lending Fund, L.P. (``AB 
PCI Fund I''), AB Energy Opportunity Fund, L.P. (``AB Energy Fund,'' 
and together with AB PCI Fund I, the ``Existing Affiliated Funds''), 
and AB Private Credit Investors LLC (``AB-PCI''), on behalf of itself 
and its successors.\1\
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    \1\ The term ``successor,'' as applied to each AB-PCI 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 April 30, 2015, and amended 
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on October 5, 2015 and May 24, 2016.

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 7, 2016, 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.

[[Page 64231]]


ADDRESSES:  Brent J. Fields, Secretary, U.S. Securities and Exchange 
Commission, 100 F St. NE., Washington, DC 20549-1090. Applicants, 1345 
Avenue of the Americas, New York, NY 10105.

FOR FURTHER INFORMATION CONTACT:  Christine Y. Greenlees, Senior 
Counsel, at (202) 551-6879, 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.

Applicants' Representations

    1. AB BDC I, a Maryland corporation, is organized as a closed-end 
management investment company that will elect to be regulated as a BDC 
under section 54(a) of the Act prior to the effectiveness of the 
requested order.\2\ AB BDC I's Objectives and Strategies \3\ are to 
principally generate current income through direct investments in 
private loans and notes and, to a lesser extent, long-term capital 
appreciation through private equity investments. The board of directors 
of AB BDC I (the ``AB BDC I Board'') is comprised of three directors. 
The AB BDC I Board and any board of directors of a Future Regulated 
Fund (defined below) (the ``Boards'' and each a ``Board'') will be 
comprised of directors, a majority of whom will not be ``interested 
persons,'' within the meaning of section 2(a)(19) of the Act (the 
``Non-Interested Directors''), of AB BDC I or any Future Regulated 
Fund.
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    \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.
    \3\ ``Objectives and Strategies'' means a Regulated Fund's 
(defined below) investment objectives and strategies, as described 
in the Regulated Fund's registration statement on Form N-2 or Form 
10-12G, as applicable, 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.
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    2. AB PCI Fund I is a Delaware limited partnership that is exempt 
from registration pursuant to section 3(c)(7) of the Act. AB PCI Fund 
I's investment objective and strategies are to generate both current 
income and long-term capital appreciation through debt and equity 
investments.
    3. AB Energy Fund is a Delaware limited partnership that is exempt 
from registration pursuant to section 3(c)(7) of the Act. AB Energy 
Fund's investment objective and strategies are to generate attractive 
risk-adjusted returns, through current income and capital gains, by 
capitalizing on private and public debt and equity investment 
opportunities in North American oil and gas producers.
    4. AB-PCI, a Delaware limited liability company, is registered with 
the Commission as an investment adviser under the Investment Advisers 
Act of 1940 (the ``Advisers Act''). AB-PCI is a wholly-owned subsidiary 
of AllianceBernstein L.P., a New York based global asset management 
firm. AB-PCI will serve as investment adviser to AB BDC I and currently 
serves as investment adviser to the Existing Affiliated Funds.
    5. 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 AB-PCI 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, 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) 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\
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    \4\ ``Regulated Fund'' means AB BDC I 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 a BDC, (b) whose investment adviser is an 
AB-PCI Adviser, and (c) that intends to participate in the Co-
Investment Program. The term ``AB-PCI Adviser'' means (a) AB-PCI and 
(b) any future investment adviser that is controlled by AB-PCI and 
is registered as an investment adviser under the Advisers Act.
    \5\ ``Affiliated Fund'' means the Existing Affiliated Funds and 
any Future Affiliated Fund. ``Future Affiliated Fund'' means any 
entity (a) whose investment adviser is an AB-PCI 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.
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    6. Applicants state that any of the Regulated Funds 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 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

[[Page 64232]]

Fund and the Wholly-Owned Investment Sub.
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    \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.
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    7. When considering Potential Co-Investment Transactions for any 
Regulated Fund, the applicable AB-PCI Adviser will consider only the 
Objectives and Strategies, investment policies, investment positions, 
capital available for investment, 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\
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    \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 AB-PCI 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 Board members 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 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.
    10. 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.
    11. Applicants also represent that if an AB-PCI Adviser or its 
principals, or any person controlling, controlled by, or under common 
control with an AB-PCI Adviser or its principals, and the Affiliated 
Funds (collectively, the ``Holders'') own in the aggregate more than 
25% of the outstanding voting shares of a Regulated Fund (the 
``Shares''), then the Holders will vote such Shares as required under 
condition 14.

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 AB-PCI 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 AB-PCI 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 AB-PCI 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 AB-PCI 
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 capital 
available for investment in the asset class being allocated, up to the 
amount proposed to be invested by each. The applicable AB-PCI 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

[[Page 64233]]

compliance with these allocation procedures.
    (c) After making the determinations required in conditions 1 and 
2(a), the applicable AB-PCI 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 participating 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 AB-PCI 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 AB-PCI 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 AB-PCI 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.
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    \11\ This exception applies only 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 
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 AB-PCI 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 AB-PCI 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 Fund and each Regulated Fund will bear its own 
expenses in connection with any such disposition.

[[Page 64234]]

    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 AB-PCI 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 AB-PCI 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 AB-PCI 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 
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 participant's capital available for 
investment in the asset class being allocated, up to the amount 
proposed to be invested by each.
    (d) The acquisition of Follow-On Investments as permitted by this 
condition will be considered a Co-Investment Transaction for all 
purposes and subject to the other conditions set forth in the 
application.
    9. The 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 AB-PCI 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 \12\ (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 AB-PCI Adviser 
pending consummation of the transaction, the fee will be deposited into 
an account maintained by such AB-PCI 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 AB-PCI 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 AB-PCI Adviser, investment 
advisory fees paid in accordance with the agreement between the AB-PCI 
Adviser and the Regulated Fund or Affiliated Fund.
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    \12\ Applicants are not requesting and the staff is not 
providing any relief for transaction fees received in connection 
with any Co-Investment Transaction.
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    14. If the Holders own in the aggregate more than 25% of the Shares 
of a Regulated Fund, then the Holders will vote such Shares as directed 
by an independent third party when voting on (1) the election of 
directors; (2) the removal of one or more directors; or (3) any other 
matter under either the Act or applicable State law affecting the 
Board's composition, size or manner of election.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-22427 Filed 9-16-16; 8:45 am]
 BILLING CODE 8011-01-P

64230 Federal Register / Vol. 81, No. 181 / Monday, September 19, 2016 / Notices (ii) the aggregate amount proportion to the relative amounts of the SECURITIES AND EXCHANGE recommended by the applicable Adviser securities held or to be acquired or COMMISSION to be invested by the applicable disposed of, as the case may be. Regulated Fund in the Follow-On [Release No. IC–32261; File No. 812–14453] 13. Any transaction fee (including Investment, together with the amount break-up or commitment fees but AB Private Credit Investors proposed to be invested by the other excluding broker’s fees contemplated by Corporation, et al.; Notice of participating Regulated Funds and Affiliated Funds, collectively, in the section 17(e) or 57(k) of the Act, as Application same transaction, exceeds the amount of applicable), received in connection with September 13, 2016. the investment opportunity; then the a Co-Investment Transaction will be distributed to the participating AGENCY: Securities and Exchange investment opportunity will be Commission (‘‘Commission’’). allocated among them pro rata based on Regulated Funds and Affiliated Funds on a pro rata basis based on the amounts ACTION: Notice of application for an each participant’s Available Capital, up they invested or committed, as the case order under sections 17(d) and 57(i) of to the maximum amount proposed to be may be, in such Co-Investment the Investment Company Act of 1940 invested by each. (d) The acquisition of Follow-On Transaction. If any transaction fee is to (the ‘‘Act’’) and rule 17d–1 under the Investments as permitted by this Act permitting certain joint transactions be held by an Adviser pending condition will be considered a Co- otherwise prohibited by sections 17(d) consummation of the transaction, the Investment Transaction for all purposes and 57(a)(4) of the Act and under rule fee will be deposited into an account 17d–1 under the Act. and subject to the other conditions set maintained by such Adviser at a bank or forth in this application. banks having the qualifications 9. The Non-Interested Directors of SUMMARY OF APPLICATION: Applicants prescribed in section 26(a)(1) of the Act, request an order to permit a business each Regulated Fund will be provided and the account will earn a competitive development company (‘‘BDC’’) and quarterly for review all information rate of interest that will also be divided certain closed end investment concerning Potential Co-Investment Transactions and Co-Investment pro rata among the participating companies to co-invest in portfolio Transactions, including investments Regulated Funds and Affiliated Funds companies with each other and with made by other Regulated Funds or based on the amounts they invest in affiliated investment funds. Affiliated Funds that the Regulated such Co-Investment Transaction. None APPLICANTS: AB Private Credit Investors Fund considered but declined to of the Affiliated Funds, the Advisers, Corporation (‘‘AB BDC I’’), AB Private participate in, so that the Non-Interested the other Regulated Funds or any Credit Investors Middle Market Direct Directors may determine whether all affiliated person of the Regulated Funds Lending Fund, L.P. (‘‘AB PCI Fund I’’), investments made during the preceding or Affiliated Funds will receive AB Energy Opportunity Fund, L.P. (‘‘AB quarter, including those investments additional compensation or Energy Fund,’’ and together with AB that the Regulated Fund considered but remuneration of any kind as a result of PCI Fund I, the ‘‘Existing Affiliated declined to participate in, comply with or in connection with a Co-Investment Funds’’), and AB Private Credit the conditions of the Order. In addition, Transaction (other than (a) in the case Investors LLC (‘‘AB–PCI’’), on behalf of the Non-Interested Directors will of the Regulated Funds and the itself and its successors.1 consider at least annually the continued Affiliated Funds, the pro rata FILING DATES: The application was filed appropriateness for the Regulated Fund transaction fees described above and on April 30, 2015, and amended on of participating in new and existing Co- fees or other compensation described in October 5, 2015 and May 24, 2016. Investment Transactions. condition 2(c)(iii)(C); and (b) in the case HEARING OR NOTIFICATION OF HEARING: 10. Each Regulated Fund will of an Adviser, investment advisory fees An order granting the requested relief maintain the records required by section 57(f)(3) of the Act as if each of the paid in accordance with the agreement will be issued unless the Commission Regulated Funds were a BDC and each between the Adviser and the Regulated orders a hearing. Interested persons may of the investments permitted under Fund or Affiliated Fund. request a hearing by writing to the these conditions were approved by the 14. If the Holders own in the aggregate Commission’s Secretary and serving Required Majority under section 57(f) of more than 25% of the Shares of a applicants with a copy of the request, the Act. personally or by mail. Hearing requests Regulated Fund, then the Holders will 11. No Non-Interested Director of a should be received by the Commission vote such Shares as directed by an Regulated Fund will also be a director, by 5:30 p.m. on October 7, 2016, and independent third party when voting on should be accompanied by proof of general partner, managing member or (1) the election of directors; (2) the principal, or otherwise an ‘‘affiliated service on applicants, in the form of an removal of one or more directors; or (3) affidavit or, for lawyers, a certificate of person’’ (as defined in the Act) of an any other matter under either the 1940 Affiliated Fund. service. Pursuant to rule 0–5 under the Act or applicable State law affecting the Act, hearing requests should state the 12. The expenses, if any, associated Board’s composition, size or manner of nature of the writer’s interest, any facts with acquiring, holding or disposing of election. bearing upon the desirability of a any securities acquired in a Co- Investment Transaction (including, For the Commission, by the Division of hearing on the matter, the reason for the without limitation, the expenses of the Investment Management, under delegated request, and the issues contested. distribution of any such securities authority. Persons who wish to be notified of a mstockstill on DSK3G9T082PROD with NOTICES registered for sale under the Securities Robert W. Errett, hearing may request notification by Act) will, to the extent not payable by writing to the Commission’s Secretary. Deputy Secretary. the Advisers under their respective [FR Doc. 2016–22426 Filed 9–16–16; 8:45 am] 1 The term ‘‘successor,’’ as applied to each AB– investment advisory agreements with BILLING CODE 8011–01–P PCI Adviser (defined below), means an entity that Affiliated Funds and the Regulated results from a reorganization into another Funds, be shared by the Regulated jurisdiction or change in the type of business Funds and the Affiliated Funds in organization. VerDate Sep<11>2014 21:47 Sep 16, 2016 Jkt 238001 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 E:\FR\FM\19SEN1.SGM 19SEN1

Federal Register / Vol. 81, No. 181 / Monday, September 19, 2016 / Notices 64231 ADDRESSES: Brent J. Fields, Secretary, 3. AB Energy Fund is a Delaware Investment Transaction’’ means any U.S. Securities and Exchange limited partnership that is exempt from investment opportunity in which a Commission, 100 F St. NE., Washington, registration pursuant to section 3(c)(7) Regulated Fund (or its Wholly-Owned DC 20549–1090. Applicants, 1345 of the Act. AB Energy Fund’s Investment Sub) could not participate Avenue of the Americas, New York, NY investment objective and strategies are together with one or more Affiliated 10105. to generate attractive risk-adjusted Funds and/or one or more other FOR FURTHER INFORMATION CONTACT: returns, through current income and Regulated Funds without obtaining and Christine Y. Greenlees, Senior Counsel, capital gains, by capitalizing on private relying on the Order.7 at (202) 551–6879, or Mary Kay Frech, and public debt and equity investment 6. Applicants state that any of the Branch Chief, at (202) 551–6821 (Chief opportunities in North American oil and Regulated Funds may, from time to Counsel’s Office, Division of Investment gas producers. 4. AB–PCI, a Delaware limited time, form one or more Wholly-Owned Management). Investment Subs.8 Such a subsidiary liability company, is registered with the SUPPLEMENTARY INFORMATION: The would be prohibited from investing in a Commission as an investment adviser following is a summary of the Co-Investment Transaction with any under the Investment Advisers Act of application. The complete application Affiliated Fund or Regulated Fund 1940 (the ‘‘Advisers Act’’). AB–PCI is a may be obtained via the Commission’s wholly-owned subsidiary of because it would be a company Web site by searching for the file AllianceBernstein L.P., a New York controlled by its parent Regulated Fund number, or for an applicant using the based global asset management firm. for purposes of section 57(a)(4) and rule Company name box, at http:// AB–PCI will serve as investment adviser 17d–1. Applicants request that each www.sec.gov/search/search.htm or by to AB BDC I and currently serves as Wholly-Owned Investment Sub be calling (202) 551–8090. investment adviser to the Existing permitted to participate in Co- Applicants’ Representations Affiliated Funds. Investment Transactions in lieu of its 5. Applicants seek an order (‘‘Order’’) parent Regulated Fund and that the 1. AB BDC I, a Maryland corporation, to permit one or more Regulated Funds 4 Wholly-Owned Investment Sub’s is organized as a closed-end and/or one or more Affiliated Funds 5 to participation in any such transaction be management investment company that participate in the same investment treated, for purposes of the requested will elect to be regulated as a BDC under opportunities through a proposed co- Order, as though the parent Regulated section 54(a) of the Act prior to the investment program (the ‘‘Co- Fund were participating directly. effectiveness of the requested order.2 AB Investment Program’’) where such Applicants represent that this treatment BDC I’s Objectives and Strategies 3 are to participation would otherwise be is justified because a Wholly-Owned principally generate current income prohibited under section 57(a)(4) and Investment Sub would have no purpose through direct investments in private rule 17d–1 by (a) co-investing with each other than serving as a holding vehicle loans and notes and, to a lesser extent, other in securities issued by issuers in for the Regulated Fund’s investments long-term capital appreciation through private placement transactions in which and, therefore, no conflicts of interest private equity investments. The board of an AB–PCI Adviser negotiates terms in could arise between the Regulated Fund directors of AB BDC I (the ‘‘AB BDC I addition to price; 6 and (b) making and the Wholly-Owned Investment Sub. Board’’) is comprised of three directors. additional investments in securities of The Regulated Fund’s Board would The AB BDC I Board and any board of such issuers, including through the make all relevant determinations under directors of a Future Regulated Fund exercise of warrants, conversion the conditions with regard to a Wholly- (defined below) (the ‘‘Boards’’ and each privileges, and other rights to purchase Owned Investment Sub’s participation a ‘‘Board’’) will be comprised of securities of the issuers (‘‘Follow-On in a Co-Investment Transaction, and the directors, a majority of whom will not Investments’’). ‘‘Co-Investment Regulated Fund’s Board would be be ‘‘interested persons,’’ within the Transaction’’ means any transaction in informed of, and take into meaning of section 2(a)(19) of the Act which a Regulated Fund (or its Wholly- consideration, any proposed use of a (the ‘‘Non-Interested Directors’’), of AB Owned Investment Sub, defined below) Wholly-Owned Investment Sub in the BDC I or any Future Regulated Fund. participated together with one or more Regulated Fund’s place. If the Regulated 2. AB PCI Fund I is a Delaware other Regulated Funds and/or one or Fund proposes to participate in the limited partnership that is exempt from more Affiliated Funds in reliance on the same Co-Investment Transaction with registration pursuant to section 3(c)(7) requested Order. ‘‘Potential Co- any of its Wholly-Owned Investment of the Act. AB PCI Fund I’s investment Subs, the Board will also be informed objective and strategies are to generate 4 ‘‘Regulated Fund’’ means AB BDC I and any of, and take into consideration, the both current income and long-term Future Regulated Fund. ‘‘Future Regulated Fund’’ relative participation of the Regulated capital appreciation through debt and means any closed-end management investment company (a) that is registered under the Act or has equity investments. elected to be regulated as a BDC, (b) whose 7 All existing entities that currently intend to rely investment adviser is an AB–PCI Adviser, and (c) upon the requested Order have been named as 2 Section 2(a)(48) defines a BDC to be any closed- that intends to participate in the Co-Investment applicants. Any other existing or future entity that end investment company that operates for the Program. The term ‘‘AB–PCI Adviser’’ means (a) subsequently relies on the Order will comply with purpose of making investments in securities AB–PCI and (b) any future investment adviser that the terms and conditions of the application. described in sections 55(a)(1) through 55(a)(3) of the is controlled by AB–PCI and is registered as an 8 The term ‘‘Wholly-Owned Investment Sub’’ Act and makes available significant managerial investment adviser under the Advisers Act. means an entity (i) that is wholly-owned by a assistance with respect to the issuers of such 5 ‘‘Affiliated Fund’’ means the Existing Affiliated Regulated Fund (with the Regulated Fund at all securities. Funds and any Future Affiliated Fund. ‘‘Future times holding, beneficially and of record, 100% of mstockstill on DSK3G9T082PROD with NOTICES 3 ‘‘Objectives and Strategies’’ means a Regulated Affiliated Fund’’ means any entity (a) whose the voting and economic interests); (ii) whose sole Fund’s (defined below) investment objectives and investment adviser is an AB–PCI Adviser, (b) that business purpose is to hold one or more strategies, as described in the Regulated Fund’s would be an investment company but for section investments on behalf of the Regulated Fund; (iii) registration statement on Form N–2 or Form 10– 3(c)(1) or 3(c)(7) of the Act, and (c) that intends to with respect to which the Regulated Fund’s Board 12G, as applicable, other filings the Regulated Fund participate in the Co-Investment Program. has the sole authority to make all determinations has made with the Commission under the Securities 6 The term ‘‘private placement transactions’’ with respect to the entity’s participation under the Act of 1933 (the ‘‘Securities Act’’), or under the means transactions in which the offer and sale of conditions of the application; and (iv) that would Securities Exchange Act of 1934, and the Regulated securities by the issuer are exempt from registration be an investment company but for section 3(c)(1) or Fund’s reports to shareholders. under the Securities Act. 3(c)(7) of the Act. 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64232 Federal Register / Vol. 81, No. 181 / Monday, September 19, 2016 / Notices Fund and the Wholly-Owned Investments must be submitted to the or less advantageous than that of other Investment Sub. Eligible Directors. participants. 7. When considering Potential Co- 10. No Non-Interested Director of a 3. Applicants state that in the absence Investment Transactions for any Regulated Fund will have a financial of the requested relief, the Regulated Regulated Fund, the applicable AB–PCI interest in any Co-Investment Funds would be, in some Adviser will consider only the Transaction, other than through share circumstances, limited in their ability to Objectives and Strategies, investment ownership in one of the Regulated participate in attractive and appropriate policies, investment positions, capital Funds. investment opportunities. Applicants available for investment, and other 11. Applicants also represent that if believe that the proposed terms and pertinent factors applicable to that an AB–PCI Adviser or its principals, or conditions will ensure that the Co- Regulated Fund. The Board of each any person controlling, controlled by, or Investment Transactions are consistent Regulated Fund, including the Non- under common control with an AB–PCI with the protection of each Regulated Interested Directors has (or will have Adviser or its principals, and the Fund’s shareholders and with the prior to relying on the requested Order) Affiliated Funds (collectively, the purposes intended by the policies and determined that it is in the best interests ‘‘Holders’’) own in the aggregate more provisions of the Act. Applicants state of the Regulated Fund to participate in than 25% of the outstanding voting that the Regulated Funds’ participation the Co-Investment Transaction.9 shares of a Regulated Fund (the in the Co-Investment Transactions will 8. Other than pro rata dispositions be consistent with the provisions, ‘‘Shares’’), then the Holders will vote and Follow-On Investments as provided policies, and purposes of the Act and on such Shares as required under condition in conditions 7 and 8, and after making a basis that is not different from or less 14. the determinations required in advantageous than that of other conditions 1 and 2(a), the AB–PCI Applicants’ Legal Analysis participants. Adviser will present each Potential Co- 1. Section 57(a)(4) of the Act prohibits Applicants’ Conditions Investment Transaction and the certain affiliated persons of a BDC from proposed allocation to the directors of Applicants agree that the Order will participating in joint transactions with the Board eligible to vote under section be subject to the following conditions: the BDC or a company controlled by a 57(o) of the Act (‘‘Eligible Directors’’), 1. Each time an AB–PCI Adviser BDC in contravention of rules as and the ‘‘required majority,’’ as defined considers a Potential Co-Investment prescribed by the Commission. Under in section 57(o) of the Act (‘‘Required Transaction for an Affiliated Fund or section 57(b)(2) of the Act, any person Majority’’) 10 will approve each Co- another Regulated Fund that falls within who is directly or indirectly controlling, Investment Transaction prior to any a Regulated Fund’s then-current controlled by, or under common control investment by the participating Objectives and Strategies, the Regulated with a BDC is subject to section 57(a)(4). Regulated Fund. Fund’s AB–PCI Adviser will make an 9. With respect to the pro rata Applicants submit that each of the Regulated Funds and Affiliated Funds independent determination of the dispositions and Follow-On Investments could be deemed to be a person related appropriateness of the investment for provided in conditions 7 and 8, a to each Regulated Fund in a manner such Regulated Fund in light of the Regulated Fund may participate in a pro described by section 57(b) by virtue of Regulated Fund’s then-current rata disposition or Follow-On being under common control. Section circumstances. Investment without obtaining prior approval of the Required Majority if, 57(i) of the Act provides that, until the 2. (a) If the AB–PCI Adviser deems a among other things: (i) The proposed Commission prescribes rules under Regulated Fund’s participation in any participation of each Regulated Fund section 57(a)(4), the Commission’s rules Potential Co-Investment Transaction to and Affiliated Fund in such disposition under section 17(d) of the Act be appropriate for the Regulated Fund, is proportionate to its outstanding applicable to registered closed-end it will then determine an appropriate investments in the issuer immediately investment companies will be deemed level of investment for the Regulated preceding the disposition or Follow-On to apply to transactions subject to Fund. Investment, as the case may be; and (ii) section 57(a)(4). Because the (b) If the aggregate amount the Board of the Regulated Fund has Commission has not adopted any rules recommended by the applicable AB–PCI approved that Regulated Fund’s under section 57(a)(4), rule 17d–1 also Adviser to be invested by the applicable participation in pro rata dispositions applies to joint transactions with Regulated Fund in the Potential Co- and Follow-On Investments as being in Regulated Funds that are BDCs. Section Investment Transaction, together with the best interests of the Regulated Fund. 17(d) of the Act and rule 17d–1 under the amount proposed to be invested by If the Board does not so approve, any the Act are applicable to Regulated the other participating Regulated Funds such disposition or Follow-On Funds that are registered closed-end and Affiliated Funds, collectively, in the Investment will be submitted to the investment companies. same transaction, exceeds the amount of Regulated Fund’s Eligible Directors. The 2. Section 17(d) of the Act and rule the investment opportunity, the Board of any Regulated Fund may at any 17d–1 under the Act prohibit affiliated investment opportunity will be time rescind, suspend or qualify its persons of a registered investment allocated among them pro rata based on approval of pro rata dispositions and company from participating in joint each participant’s capital available for Follow-On Investments with the result transactions with the company unless investment in the asset class being that all dispositions and/or Follow-On the Commission has granted an order allocated, up to the amount proposed to permitting such transactions. In passing be invested by each. The applicable AB– mstockstill on DSK3G9T082PROD with NOTICES 9 The Regulated Funds, however, will not be upon applications under rule 17d–1, the PCI Adviser will provide the Eligible obligated to invest, or co-invest, when investment Commission considers whether the Directors of each participating opportunities are referred to them. company’s participation in the joint Regulated Fund with information 10 In the case of a Regulated Fund that is a transaction is consistent with the concerning each participating party’s registered closed-end fund, the Board members that make up the Required Majority will be determined provisions, policies, and purposes of the available capital to assist the Eligible as if the Regulated Fund were a BDC subject to Act and the extent to which such Directors with their review of the section 57(o). participation is on a basis different from Regulated Fund’s investments for VerDate Sep<11>2014 21:47 Sep 16, 2016 Jkt 238001 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 E:\FR\FM\19SEN1.SGM 19SEN1

Federal Register / Vol. 81, No. 181 / Monday, September 19, 2016 / Notices 64233 compliance with these allocation of any Affiliated Fund or any Regulated Investment Transaction unless the procedures. Fund receives in connection with the terms, conditions, price, class of (c) After making the determinations right of an Affiliated Fund or a securities to be purchased, settlement required in conditions 1 and 2(a), the Regulated Fund to nominate a director date, and registration rights will be the applicable AB–PCI Adviser will or appoint a board observer or otherwise same for each participating Regulated distribute written information to participate in the governance or Fund and Affiliated Fund. The grant to concerning the Potential Co-Investment management of the portfolio company an Affiliated Fund or another Regulated Transaction (including the amount will be shared proportionately among Fund, but not the Regulated Fund, of proposed to be invested by each the participating Affiliated Funds (who the right to nominate a director for participating Regulated Fund and each may, in turn, share its portion with election to a portfolio company’s board Affiliated Fund) to the Eligible Directors its affiliated persons) and the of directors, the right to have an of each participating Regulated Fund for participating Regulated Funds in observer on the board of directors or their consideration. A Regulated Fund accordance with the amount of each similar rights to participate in the will co-invest with one or more other party’s investment; and governance or management of the Regulated Funds and/or one or more (iv) the proposed investment by the portfolio company will not be Affiliated Funds only if, prior to the Regulated Fund will not benefit the AB– interpreted so as to violate this Regulated Fund’s participation in the PCI Advisers, the Affiliated Funds or condition 6, if conditions 2(c)(iii)(A), (B) Potential Co-Investment Transaction, a the other Regulated Funds or any and (C) are met. Required Majority concludes that: affiliated person of any of them (other 7. (a) If any Affiliated Fund or any (i) The terms of the Potential Co- than the parties to the Co-Investment Regulated Fund elects to sell, exchange Investment Transaction, including the Transaction), except (A) to the extent or otherwise dispose of an interest in a consideration to be paid, are reasonable permitted by condition 13, (B) to the security that was acquired in a Co- and fair to the Regulated Fund and its extent permitted by section 17(e) or Investment Transaction, the applicable shareholders and do not involve 57(k) of the Act, as applicable, (C) AB–PCI Advisers will: overreaching in respect of the Regulated indirectly, as a result of an interest in (i) Notify each Regulated Fund that Fund or its shareholders on the part of the securities issued by one of the participated in the Co-Investment any person concerned; parties to the Co-Investment Transaction of the proposed disposition (ii) the Potential Co-Investment Transaction, or (D) in the case of fees or at the earliest practical time; and Transaction is consistent with: (ii) formulate a recommendation as to other compensation described in (A) The interests of the shareholders participation by each Regulated Fund in condition 2(c)(iii)(C). of the Regulated Fund; and 3. Each Regulated Fund has the right the disposition. (B) the Regulated Fund’s then-current (b) Each Regulated Fund will have the to decline to participate in any Potential Objectives and Strategies; right to participate in such disposition Co-Investment Transaction or to invest (iii) the investment by any other on a proportionate basis, at the same less than the amount proposed. price and on the same terms and Regulated Funds or Affiliated Funds 4. The applicable AB–PCI Adviser would not disadvantage the Regulated conditions as those applicable to the will present to the Board of each Fund, and participation by the participating Affiliated Funds and Regulated Fund, on a quarterly basis, a participating Regulated Fund would not Regulated Funds. record of all investments in Potential (c) A Regulated Fund may participate be on a basis different from or less Co-Investment Transactions made by in such disposition without obtaining advantageous than that of other any of the other Regulated Funds or prior approval of the Required Majority Regulated Funds or Affiliated Funds; Affiliated Funds during the preceding if: (i) The proposed participation of each provided that, if any other Regulated quarter that fell within the Regulated Regulated Fund and each Affiliated Fund or Affiliated Fund, but not the Fund’s then-current Objectives and Fund in such disposition is Regulated Fund itself, gains the right to Strategies that were not made available proportionate to its outstanding nominate a director for election to a to the Regulated Fund, and an investments in the issuer immediately portfolio company’s board of directors explanation of why the investment preceding the disposition; (ii) the Board or the right to have a board observer or opportunities were not offered to the of the Regulated Fund has approved as any similar right to participate in the Regulated Fund. All information being in the best interests of the governance or management of the presented to the Board pursuant to this Regulated Fund the ability to participate portfolio company, such event shall not condition will be kept for the life of the in such dispositions on a pro rata basis be interpreted to prohibit the Required Regulated Fund and at least two years (as described in greater detail in the Majority from reaching the conclusions thereafter, and will be subject to application); and (iii) the Board of the required by this condition (2)(c)(iii), if: examination by the Commission and its Regulated Fund is provided on a (A) The Eligible Directors will have staff. quarterly basis with a list of all the right to ratify the selection of such 5. Except for Follow-On Investments dispositions made in accordance with director or board observer, if any; (B) the applicable AB–PCI Adviser made in accordance with condition 8,11 this condition. In all other cases, the agrees to, and does, provide periodic a Regulated Fund will not invest in AB–PCI Adviser will provide its written reports to the Regulated Fund’s Board reliance on the Order in any issuer in recommendation as to the Regulated with respect to the actions of such which another Regulated Fund, Fund’s participation to the Eligible director or the information received by Affiliated Fund, or any affiliated person Directors, and the Regulated Fund will such board observer or obtained through of another Regulated Fund or Affiliated participate in such disposition solely to mstockstill on DSK3G9T082PROD with NOTICES the exercise of any similar right to Fund is an existing investor. the extent that a Required Majority participate in the governance or 6. A Regulated Fund will not determines that it is in the Regulated management of the portfolio company; participate in any Potential Co- Fund’s best interests. and 11 This exception applies only to Follow-On (d) Each Affiliated Fund and each (C) any fees or other compensation Investments by a Regulated Fund in issuers in Regulated Fund will bear its own that any Affiliated Fund or any which that Regulated Fund already holds expenses in connection with any such Regulated Fund or any affiliated person investments. disposition. VerDate Sep<11>2014 21:47 Sep 16, 2016 Jkt 238001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 E:\FR\FM\19SEN1.SGM 19SEN1

64234 Federal Register / Vol. 81, No. 181 / Monday, September 19, 2016 / Notices 8. (a) If any Affiliated Fund or any concerning Potential Co-Investment maintained by such AB–PCI Adviser at Regulated Fund desires to make a Transactions and Co-Investment a bank or banks having the Follow-On Investment in a portfolio Transactions, including investments qualifications prescribed in section company whose securities were made by other Regulated Funds or 26(a)(1) of the Act, and the account will acquired in a Co-Investment Affiliated Funds that the Regulated earn a competitive rate of interest that Transaction, the applicable AB–PCI Fund considered but declined to will also be divided pro rata among the Advisers will: participate in, so that the Non-Interested participating Regulated Funds and (i) Notify each Regulated Fund that Directors may determine whether all Affiliated Funds based on the amounts participated in the Co-Investment investments made during the preceding they invest in such Co-Investment Transaction of the proposed transaction quarter, including those investments Transaction. None of the Affiliated at the earliest practical time; and that the Regulated Fund considered but Funds, the AB–PCI Advisers, the other (ii) formulate a recommendation as to declined to participate in, comply with Regulated Funds or any affiliated person the proposed participation, including the conditions of the Order. In addition, of the Regulated Funds or Affiliated the amount of the proposed Follow-On the Non-Interested Directors will Funds will receive additional Investment, by each Regulated Fund. consider at least annually the continued compensation or remuneration of any (b) A Regulated Fund may participate appropriateness for the Regulated Fund kind as a result of or in connection with in such Follow-On Investment without of participating in new and existing Co- a Co-Investment Transaction (other than obtaining prior approval of the Required Investment Transactions. (a) in the case of the Regulated Funds Majority if: (i) The proposed 10. Each Regulated Fund will and the Affiliated Funds, the pro rata participation of each Regulated Fund maintain the records required by section transaction fees described above and and each Affiliated Fund in such 57(f)(3) of the Act as if each of the fees or other compensation described in investment is proportionate to its Regulated Funds were a BDC and each condition 2(c)(iii)(C); and (b) in the case outstanding investments in the issuer of the investments permitted under of an AB–PCI Adviser, investment immediately preceding the Follow-On these conditions were approved by the advisory fees paid in accordance with Investment; and (ii) the Board of the Required Majority under section 57(f) of the agreement between the AB–PCI Regulated Fund has approved as being the Act. Adviser and the Regulated Fund or in the best interests of the Regulated 11. No Non-Interested Director of a Affiliated Fund. Fund the ability to participate in Regulated Fund will also be a director, 14. If the Holders own in the aggregate Follow-On Investments on a pro rata general partner, managing member or more than 25% of the Shares of a basis (as described in greater detail in principal, or otherwise an ‘‘affiliated Regulated Fund, then the Holders will the application). In all other cases, the person’’ (as defined in the Act) of an vote such Shares as directed by an AB–PCI Adviser will provide its written Affiliated Fund. independent third party when voting on recommendation as to the Regulated 12. The expenses, if any, associated (1) the election of directors; (2) the Fund’s participation to the Eligible with acquiring, holding or disposing of removal of one or more directors; or (3) Directors, and the Regulated Fund will any securities acquired in a Co- any other matter under either the Act or participate in such Follow-On Investment Transaction (including, applicable State law affecting the Investment solely to the extent that a without limitation, the expenses of the Board’s composition, size or manner of Required Majority determines that it is distribution of any such securities election. in the Regulated Fund’s best interests. registered for sale under the Securities For the Commission, by the Division of (c) If, with respect to any Follow-On Act) will, to the extent not payable by Investment Management, under delegated Investment: the AB–PCI Advisers under their authority. (i) The amount of the opportunity is respective investment advisory Robert W. Errett, not based on the Regulated Funds’ and agreements with Affiliated Funds and Deputy Secretary. the Affiliated Funds’ outstanding the Regulated Funds, be shared by the [FR Doc. 2016–22427 Filed 9–16–16; 8:45 am] investments immediately preceding the Regulated Funds and the Affiliated BILLING CODE 8011–01–P Follow-On Investment; and Funds in proportion to the relative (ii) the aggregate amount amounts of the securities held or to be recommended by the AB–PCI Adviser to SECURITIES AND EXCHANGE acquired or disposed of, as the case may be invested by each Regulated Fund in COMMISSION be. the Follow-On Investment, together 13. Any transaction fee 12 (including [Release No. 34–78820; File No. SR–IEX– with the amount proposed to be break-up or commitment fees but 2016–13] invested by the participating Affiliated excluding broker’s fees contemplated Funds in the same transaction, exceeds section 17(e) or 57(k) of the Act, as Self-Regulatory Organizations; the amount of the opportunity; then the applicable), received in connection with Investors Exchange LLC; Notice of amount invested by each such party will a Co-Investment Transaction will be Filing and Immediate Effectiveness of be allocated among them pro rata based distributed to the participating Proposed Rule Change To Amend Rule on each participant’s capital available Regulated Funds and Affiliated Funds 11.340 To Modify Certain Data for investment in the asset class being on a pro rata basis based on the amounts Collection Requirements of the allocated, up to the amount proposed to they invested or committed, as the case Regulation NMS Plan To Implement a be invested by each. (d) The acquisition of Follow-On may be, in such Co-Investment Tick Size Pilot Program Investments as permitted by this Transaction. If any transaction fee is to mstockstill on DSK3G9T082PROD with NOTICES September 13, 2016. condition will be considered a Co- be held by an AB–PCI Adviser pending consummation of the transaction, the Pursuant to Section 19(b)(1) 1 of the Investment Transaction for all purposes Securities Exchange Act of 1934 (the and subject to the other conditions set fee will be deposited into an account ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 forth in the application. 12 Applicants are not requesting and the staff is 9. The Non-Interested Directors of not providing any relief for transaction fees 1 15 U.S.C. 78s(b)(1). each Regulated Fund will be provided received in connection with any Co-Investment 2 15 U.S.C. 78a. quarterly for review all information Transaction. 3 17 CFR 240.19b–4. 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Document Created: 2016-09-17 02:30:25
Document Modified: 2016-09-17 02:30:25
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 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.
DatesThe application was filed on April 30, 2015, and amended
ContactChristine Y. Greenlees, Senior Counsel, at (202) 551-6879, or Mary Kay Frech, Branch Chief, at (202) 551-6821 (Chief Counsel's Office, Division of Investment Management).
FR Citation81 FR 64230 
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