[Federal Register Volume 65, Number 61 (Wednesday, March 29, 2000)]
[Notices]
[Pages 16674-16675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7727]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 24363; 811-2144]


Baker, Fentress & Company; Notice of Application

March 23, 2000.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application for deregistration under section 8(f) 
of the Investment Company Act of 1940 (the ``Act'').

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SUMMARY OF APPLICATION: Baker, Fentress & Company (``Company'') 
requests an order declaring that it has ceased to be an investment 
company.

Filing Dates: The application was filed on September 8, 1999. Applicant 
has agreed to file an amendment during the notice period, the substance 
of which is reflected in the notice.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicant with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on April 23, 2000, and should be accompanied by proof of service 
on the applicant, in the form of an affidavit or, for lawyers, a 
certificate of service. Hearing requests should state the nature of the 
writer's interest, the reason for the request, and the issues 
contested. Persons may request notification of a hearing by writing to 
the Commission's Secretary.

ADDRESSES: Secretary, Commission, 450 Fifth Street, NW., Washington, DC 
20549-0609. Applicant, 200 West Madison Street, Chicago, IL 60606.

FOR FURTHER INFORMATION CONTACT: Deepak T. Pai, Senior Counsel, at 
(202) 942-0574, or Mary Kay Frech, Branch Chief, at (202) 942-0564 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the Commission's Public Reference Branch, 450 Fifth Street, NW, 
Washington, DC 20549-0102 (telephone (202) 942-8090).

Applicant's Representations

    1. The Company is a non-diversified closed-end management 
investment company registered under the Act. The Company's shares trade 
under the symbol ``BKF'' on the New York Stock Exchange.
    2. In June 1996, the Company acquired Levin Management Co., Inc. 
(``Levin Management'') and its subsidiaries, including John A. Levin & 
Co., Inc. (``Levco,'' together with Levin Management and Levco's 
subsidiaries, the ``Levco Companies''), a registered investment 
adviser, as a vehicle through which the Company believed it could 
develop a broader financial services business.\1\ The Company owns 100% 
of Levin Management, which in turn owns 100% of Levco. Levco owns 100% 
of LEVCO GP, Inc., which is the general partner of several investment 
partnerships managed by Levco, and LEVCO Securities, Inc., a registered 
broker-dealer. Levin Management provides administrative and management 
services to Levco and its subsidiaries.
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    \1\ The Company received an exemptive order under the Act in 
connection with that transaction. See Baker, Fentress & Company, 
Investment Company Act Release Nos. 21890 (April 15, 1996) (Notice) 
and 21949 (May 10, 1996) (Order).
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    3. The Company's investment portfolio consisted of the following: 
(a) a diversified portfolio of investments in publicly-traded, 
predominantly large-cap companies; (b) investment in private placement 
securities; (c) Levco Companies; and (d) a 78.5% interest in 
Consolidated-Tomoka Land Company (``CTO'').
    4. On June 17, 1999, the Board, including those directors who are 
not ``interested persons'' of the Company as defined in section 
2(a)(19) of the Act, considered and unanimously approved the Plan for 
Distribution of Assets of the Company (the ``Plan'') and authorized the 
Plan's submission to the Company's shareholders. The Plan authorized 
the Company to: (a) stop investing in accordance with the Company's 
current investment objectives, restrictions and policies, liquidate the 
securities held in the public portfolio and continue liquidating the 
private portfolio; (b) invest the proceeds of the liquidation in short-
term, liquid investments; (c) distribute the proceeds of the 
liquidation and the Company's shares of CTO to its shareholders; (d) 
prepare and file the documents necessary to deregister the Company as 
an investment company; and (e) continue in business as a holding 
company, the principal remaining asset of which will be the Levco 
Companies. On August 19, 1999, the Company's shareholders approved the 
Plan and the deregistration of the Company under the Act.
    5. The Company states that it has completed implementing the Plan. 
The principal asset of the Company now are the Levco Companies.

Applicant's Legal Analysis

    1. Section 8(f) of the Act provides that whenever the Commission, 
upon application or its own motion, finds that a registered investment 
company has ceased to be an investment company, the Commission shall so 
declare by order and upon the taking effect of such order, the 
registration of such company shall cease to be in effect.
    2. Section 3(a)(1)(A) of the Act defines an investment company as 
an issuer which ``is or holds itself out as being engaged primarily * * 
* in the business of investing, reinvesting, or trading in 
securities.'' The Company states that it is not an investment company 
as defined in section 3(a)(1)(A) of the Act, but is a holding company 
that owns the Levco Companies.
    3. Section 3(a)(1)(C) of the Act defines an investment company as 
any issuer which ``is engaged in the business of investing, 
reinvesting, owning, holding, or trading in securities, and owns or 
proposes to acquire investment securities having a value exceeding 40% 
of the value of such issuer's total assets (exclusive of Government 
securities and cash items) on an unconsolidated basis.'' \2\ The 
Company states that it is

[[Page 16675]]

not an investment company as defined in section 3(a)(1)(C) because the 
Company does not own, and does not propose to acquire, ``investment 
securities'' having a value exceeding 40% of the value of its total 
assets. The Company states that its interest in Levin Management, its 
wholly-owned subsidiary, represents approximately 96% of the Company's 
total assets on an unconsolidated basis. The Company further states 
that Levin Management's only asset is its 100% ownership interest in 
Levco. The Company states that Levco is not an investment company 
within the meaning of section 3(a) of the Act.
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    \2\ Investment securities are defined in section 3(a)(2) of the 
Act to include all securities except (a) Government securities, (b) 
securities issued by employees' securities companies, and (c) 
securities issued by majority owned subsidiaries of the owner which 
are not investment companies, and are not relying on the exception 
from the definition of investment company in sections 3(c)(1) or 
3(c)(7) of the Act.
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    4. The Company thus states that it has ceased to be an investment 
company, and that it is entitled to an order deregistering the Company 
under the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-7727 Filed 3-28-00; 8:45 am]
BILLING CODE 8010-01-M