[Federal Register Volume 67, Number 6 (Wednesday, January 9, 2002)]
[Notices]
[Pages 1251-1252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-525]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IA-2008; 803-142]


Longview Management Group LLC; Notice of Application

January 3, 2002.
AGENCY: Securities and Exchange Commission (the ``SEC'').

ACTION: Notice of Application for Exemption under the Investment 
Advisers Act of 1940 (``Advisers Act'').

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    Applicant: Longview Management Group LLC (``Longview'').
    Relevant Advisers Act Sections: Exemption requested under section 
202(a)(11)(F) from section 202(a)(11) of the Advisers Act.
SUMMARY OF APPLICATION: Applicant requests an order declaring it to be 
a person not within the intent of section 202(a)(11), which defines the 
term ``investment adviser.''

FILING DATES: The application was filed on August 6, 1999 and amended 
on November 5, 2001 and December 19, 2001.
    Hearing or Notification of Hearing: An order granting the 
application will be issued unless the SEC orders a hearing. Interested 
persons may request a hearing by writing to the SEC's Secretary and 
serving applicant with a copy of the request, personally or by mail. 
Hearing requests should be received by the SEC by 5:30 p.m. on January 
30, 2002, and should be accompanied by proof of service on 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 SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 5th Street, NW., Washington, DC 20549-
0609. Applicant, Longview Management Group LLC, 222 North LaSalle 
Street, Suite 2000, Chicago, IL 60601.

FOR FURTHER INFORMATION CONTACT: Don L. Evans, Staff Attorney, at (202) 
942-0529 or Jennifer L. Sawin, Assistant Director, at (202) 942-0719 
(Division of Investment Management, Office of Investment Adviser 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
SEC's Public Reference Branch, 450 5th Street, NW., Washington, DC 
20549-0102, (202) 942-8090.

Applicant's Representations

    1. Applicant was organized in 1998 and is an investment adviser 
registered under the Advisers Act. Applicant is a ``family office'' for 
the members of the extended Crown family and was created to conduct the 
investment affairs and manage the assets of the Crown family. 
Applicant's sole equity holder is the Edward Memorial Trust, the 
ultimate beneficiaries of which solely are members of the Crown family.
    2. Applicant represents that, although it employs a small number of 
non-Crown family members to assist in its day-to-day operations, most 
of its officers, employees and portfolio managers are Crown family 
members. Crown family members are solely responsible for key decisions, 
such as asset allocation and security selection, over Longview 
accounts.
    3. Applicant performs advisory and portfolio management services 
for Crown family members and for individual accounts, trusts, 
corporations, partnerships and other entities that are beneficially 
owned by or for the benefit of the various members of the Crown Family 
and which are operated by members of the family (``Crown Family 
Investment Entities'').
    4. Applicant also provides portfolio management services to three 
types of charitable entities: (1) charitable entities created solely by 
the Crown family and administered under the sole discretion of the 
Crown family, (2) a charitable entity created by the Crown family but 
under the control of an independent board of directors, which includes 
members of the Crown family, and (3) a charitable entity which was 
formed and funded by friends of Henry Crown after his death and which 
is managed by Applicant.
    5. Applicant also provides advisory and portfolio management 
services for the assets of a small number of individuals who are not 
members of the Crown family. Applicant provides advisory and portfolio 
management services to the families of two longtime Crown family 
employees. The two employees are now deceased and the assets were 
placed under Longview's management prior to their deaths. Applicant 
also manages the assets of two individuals that the Crown family has 
allowed to invest, along with family members, in a Crown Family 
Investment Entity that holds a diversified basket of marketable 
securities. These two individuals are a long-time former employee of 
Henry Crown & Company with over 40 years of service to the Crown 
family, and a long-time Crown family attorney with over 50 years of

[[Page 1252]]

service to the family. Applicant states that the number of investments 
by these individuals has declined over time and is no longer permitted. 
In addition, Applicant manages certain investment vehicles (e.g., 
limited liability companies or limited partnerships) (each such entity 
an ``Investment Vehicle'') that the Crown family uses to purchase an 
asset such as an operating entity. On occasion, the Crown family has 
permitted a non-Crown family member to participate in the Investment 
Vehicle. The total amount of non-Crown family member assets to which 
Applicant provides services is less than 1.34% of the total assets 
managed by Applicant.
    6. Applicant does not hold itself out to the public as an 
investment adviser and states that it is not listed in the phone book 
or any other directory as an investment adviser. Applicant does not 
engage in any advertising, attend investment management-related 
conferences as a vendor, or conduct any marketing activities.
    7. Applicant states that it does provide, as a part of the 
comprehensive services it provides to Crown family members, a limited 
amount of certain administrative services to its clients, through a 
contract with Henry Crown & Company LLC (``HC&Co.'').
    8. Applicant represents that the fees charged for its investment 
advisory services are far below market prices for such services because 
they are intended to cover Applicant's costs for providing such 
services and not to serve as a profit center for the Crown family. 
Applicant states that it uses the fees it receives to pay for the 
administrative services HC&Co. provides through its contract with 
Applicant.
    9. Applicant has no public clients in the sense of retail or 
institutional investors and has no plans, now or in the future, to 
solicit or accept clients from the retail public.

Applicant's Legal Analysis

    1. Section 202(a)(11) of the Advisers Act defines ``investment 
adviser'' to mean ``any person who, for compensation, engages in the 
business of advising others . . . as to the value of securities or as 
to the advisability of investing in, purchasing, or selling securities, 
or who, for compensation and as a part of a regular business, issues or 
promulgates analyses or reports concerning securities. . . .''
    2. Section 202(a)(11)(F) of the Advisers Act authorizes the SEC to 
exclude from the definition of ``investment adviser'' persons that are 
not within the intent of section 202(a)(11).
    3. Section 203(a) of the Advisers Act requires investment advisers 
to register with the SEC. Section 203(b) of the Advisers Act provides 
exemptions from this registration requirement. Applicant asserts that 
it has determined it does not qualify for any of the exemptions 
provided by section 203(b). Applicant states that it is not prohibited 
from registering with the SEC under section 203A(a) of the Advisers 
Act.
    4. Applicant asserts that there is no public interest in requiring 
it to be registered under the Advisers Act. Applicant states that it is 
a private organization that was formed to be the ``family office'' for 
the Crown family. Applicant represents that all of its clients have a 
close relationship with the Crown family in that they are all either 
immediate members of the Crown family, a Crown Family Investment Entity 
or a limited number of close, long-time family associates and their 
descendants, as well as the senior executives of Longview and certain 
operating companies. Applicant states that it was organized to provide 
a ``family office'' for the Crown family, and that is, and will be, the 
sole purpose for its existence.
    5. Applicant requests exemptive relief from section 203(a) of the 
Advisers Act and requests that the SEC issue an order under section 
202(a)(11)(F) declaring it to be a person not within the intent of 
section 202(a)(11).

Applicant's Conditions

    1. Non-Crown family members to whom Longview provides investment 
advice, including through investments in Crown Family Investment 
Entities, are limited to their current investments.
    2. No new non-Crown family member may make an investment in a Crown 
Family Investment Entity or in an Investment Vehicle to which Longview 
provides investment advice.
    3. Longview will not enter into any new advisory relationships with 
a non-Crown family member.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-525 Filed 1-8-02; 8:45 am]
BILLING CODE 8010-01-P