[Federal Register Volume 77, Number 214 (Monday, November 5, 2012)]
[Notices]
[Pages 66493-66497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26910]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30252; File No. 812-13740]


Van Eck Funds, et al.; Notice of Application

October 25, 2012.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order under section 17(d) of the 
Investment Company Act of 1940 (the ``Act'') and rule 17d-1 under the 
Act to permit certain joint transactions otherwise prohibited by 
section 17(d) of the Act and rule 17d-1 under the Act.

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Summary of Application: Applicants request an order to permit certain 
registered open-end management investment companies to co-invest in 
Covered Private Placements (as defined below) with each other and/or 
with one or more affiliated private investment companies.

Applicants: Van Eck Funds, Van Eck VIP Trust (formerly known as Van Eck 
Worldwide Insurance Trust) (each, an ``Existing Investment Company,'' 
and together, the ``Existing Investment Companies''), Global Energy 
Opportunity Partners LP, Global Energy Opportunity Fund, Ltd., Hard 
Asset Partners LP, Hard Assets Portfolio Ltd., Hard Assets ERISA Ltd., 
Hard Asset Partners 2X LP, Hard Assets 2X Fund Ltd., Hard Assets 2X 
Master Fund Ltd., Hard Assets Opportunity Fund LP, Hard Assets 
Opportunity Fund Ltd., Hard Assets Opportunity Master Fund Ltd., G-175 
Strategies LP, G-175 Strategies Ltd., G-175 Strategies Master Fund 
Ltd., Van Eck Veda Emerging Markets Long/Short Fund LP, Van Eck Veda 
Emerging Markets Long/Short Fund Ltd., Van Eck Veda Emerging Markets 
Long/Short Master Fund Ltd. (each, an ``Existing Unregistered 
Account,'' and collectively, the ``Existing Unregistered Accounts''), 
Van Eck Associates Corporation (``VEAC'') and Van Eck Absolute Return 
Advisers Corporation (``VEARA'').

DATES: Filing Dates: The application was filed on December 31, 2009, 
and amended on June 29, 2010, April 27, 2012 and October 19, 2012.

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 November 21, 2012, and should be accompanied by proof of 
service on applicants, 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 who wish to be notified of a hearing may request 
notification by writing to the Commission's Secretary.

ADDRESSES: Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange 
Commission, 100 F St. NE., Washington, DC 20549-1090. Applicants: c/o 
Joseph J. McBrien, Esq., Senior Vice President and General Counsel, Van 
Eck Associates Corporation, 335 Madison Avenue, 19th Floor, New York, 
NY 10017-4632.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873 or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Office of Investment Company Regulation, 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://

[[Page 66494]]

www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. Each Existing Investment Company, a Massachusetts business 
trust, is registered under the Act as an open-end management investment 
company. Each Existing Investment Company currently offers separate 
series and may offer additional series in the future. The board of 
trustees of each Existing Investment Company and the board of trustees 
or directors of any other Fund (as defined below) (each, a ``Board'') 
has or will have a majority of trustees who are or will be persons who 
are not ``interested persons'' as defined in section 2(a)(19) of the 
Act (collectively, ``Independent Trustees''). VEAC, a Delaware 
corporation, is registered as an investment adviser under the 
Investment Advisers Act of 1940 (the ``Advisers Act''). VEAC serves as 
the investment adviser to the Existing Investment Companies.
    2. Each Existing Unregistered Account is formed as a Delaware 
limited partnership, a company incorporated under the laws of the 
Cayman Islands, or a company organized under the laws of the British 
Virgin Islands. The Existing Unregistered Accounts are not registered 
as investment companies under the Act in reliance on either section 
3(c)(1) or section 3(c)(7) of the Act.\1\ VEARA, a Delaware corporation 
and a wholly owned subsidiary of VEAC, is registered as an investment 
adviser under the Advisers Act. VEARA serves as the general partner or 
the investment adviser or both to each Existing Unregistered Account.
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    \1\ This includes those Unregistered Accounts that are organized 
under the laws of a non-U.S. jurisdiction and that rely on 
interpretations by the staff of the Commission extending the 
requirements of sections 3(c)(1) and 3(c)(7) of the Act for the 
purposes of applying section 7(d) of the Act.
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    3. Applicants request an order (``Order'') under section 17(d) of 
the Act and rule 17(d)-1 under the Act to permit the Funds: \2\ (a) To 
invest jointly among themselves and/or one or more of the Unregistered 
Accounts in private placement \3\ transactions in which a Van Eck 
Advisernegotiates terms in addition to price (``Covered Private 
Placements''); and (b) make follow-on investments in Covered Private 
Placements of such issuers, including through the exercise of warrants, 
conversion privileges, and other rights associated with Covered Private 
Placements (``Follow-On Investments''). Any investment opportunity 
described above in which a Fund could not participate together with one 
or more Funds or one or more Unregistered Accounts without obtaining 
and relying on the Order is referred to as a ``Potential Joint 
Investment,'' and any investment opportunity described above in which a 
Fund participated together with one or more Funds or one or more 
Unregistered Accounts in reliance on the Order is referred to as a 
``Joint Investment.'' Each Fund and Unregistered Account may invest its 
Total Available Capital \4\ in Covered Private Placements; provided 
that, with respect to each Fund, the Fund's investment is limited by 
its Objectives and Strategies.\5\
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    \2\ Applicants request that the Order apply to (i) all other 
existing or future registered investment companies or series thereof 
(together with the Existing Investment Companies or series thereof, 
the ``Funds'') for which VEAC or any other person controlling, 
controlled by or under common control with VEAC serves as investment 
adviser (each, a ``Fund Adviser''); (ii) all other existing or 
future accounts or pooled investment vehicles that are not 
registered investment companies and are not required to register as 
investment companies under the Act, and for which VEARA, VEAC or 
another person controlling, controlled by or under common control 
with VEARA or VEAC serves as general partner or investment adviser 
(such accounts and investment funds, together with the Existing 
Unregistered Accounts, are referred to as the ``Unregistered 
Accounts''); and (iii) any other person controlling, controlled by 
or under common control with VEARA or VEAC that serves as general 
partner or investment adviser to any Fund or Unregistered Account 
(the ``Van Eck Advisers''). All entities that currently intend to 
rely on the requested Order are named as applicants. All other 
existing or future entities that will rely on the requested Order 
will comply with the terms and conditions of the application.
    \3\ The term ``private placement'' refers to a transaction in 
which the offer and sale of securities by the issuer are exempt from 
registration under the Securities Act of 1933 (``Securities Act'').
    \4\ ``Total Available Capital'' means, with respect to each Fund 
and each Unregistered Account, the total assets of such Fund or 
Unregistered Account plus all amounts readily available for 
investment by means of the exercise of rights, if any, of the 
Unregistered Account to make a capital call on investors.
    \5\ ``Objectives and Strategies'' means the investment 
objectives and strategies of a Fund, as described in the Fund's 
registration statement on Form N-1A, other filings the Fund has made 
with the Commission under the Securities Act, or under the 
Securities Exchange Act of 1934, and the Fund's report to 
shareholders.
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    4. When considering Potential Joint Investments for any Fund, the 
Fund Adviser will consider only the Objectives and Strategies, 
investment policies, investment positions, capital available for 
investment, and other pertinent factors applicable to that Fund. 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 Fund Adviser will present each Potential 
Joint Investment and the proposed allocation to the trustees eligible 
to vote under section 57(o) of the Act (``Eligible Trustees''), and the 
``required majority,'' as defined in section 57(o) of the Act 
(``Required Majority''), will approve each Joint Investment prior to 
any investment by the participating Fund.
    5. With respect to the pro rata dispositions and Follow-On 
Investments provided in conditions 7 and 8, a 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 Fund and Unregistered Account 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 Fund has approved that 
Fund's participation in pro rata dispositions and Follow-On Investments 
as being in the best interests of the Fund. If the Board does not so 
approve, any such disposition or Follow-On Investment will be submitted 
to the Fund's Eligible Trustees. The Board of any 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 Trustees.
    6. Applicants state that no Independent Trustee of a Fund will have 
a financial interest in any Joint Investment.

Applicants' Legal Analysis

    1. 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.
    2. Section 2(a)(3)(E) of the Act provides that an ``affiliated 
person'' of another person includes any investment adviser of such 
other person if such other person is an investment company. Section 
2(a)(3)(C) of the Act provides that an ``affiliated person'' of another 
person includes any person directly or indirectly controlling, 
controlled by, or under common control, with such person. Section 
2(a)(9) of the Act, in relevant part, defines control as the power to 
exercise a controlling influence over the management or policies of a 
company.

[[Page 66495]]

    3. Applicants state that the Funds and the Unregistered Accounts 
are sponsored and managed by Van Eck Advisers. The Fund Advisers, to 
the extent they are investment advisers of the Funds, are affiliated 
persons of the Funds within the meaning of section 2(a)(3)(E) of the 
Act. The Van Eck Advisers also could be deemed to be affiliated persons 
of the Funds and/or Unregistered Accounts under section 2(a)(3)(C) to 
the extent the Van Eck Advisers are deemed to control the Funds and/or 
Unregistered Accounts. Accordingly, the Funds and the Unregistered 
Accounts could be affiliated persons of one another to the extent they 
are deemed to be under the common control of the Van Eck Advisers. 
Applicants state that if the Funds and the Unregistered Accounts are 
deemed to be affiliated persons of one another, the proposed Joint 
Investments could be considered prohibited transactions under section 
17(d) and rule 17d-1.
    4. Applicants state that in the absence of the requested relief, 
the 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 Joint Investments are consistent with the protection of each 
Fund's investors and with the purposes intended by the policies and 
provisions of the Act. Applicants state that the Funds' participation 
in the Joint Investments 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 will 
be subject to the following conditions:
    1. Each time a Van Eck Adviser considers a Potential Joint 
Investment for an Unregistered Account or another Fund that falls 
within a Fund's then-current Objectives and Strategies, the Fund 
Adviser will make an independent determination of the appropriateness 
of the investment for the Fund in light of the Fund's then-current 
circumstances.
    2. (a) If the Fund Adviser deems a Fund's participation in any 
Potential Joint Investment to be appropriate for the Fund, it will then 
determine an appropriate level of investment for the Fund.
    (b) If the aggregate amount recommended by the Van Eck Advisers to 
be invested in the Potential Joint Investment by the Funds and the 
Unregistered Accounts, collectively, in the same transaction, exceeds 
the amount of the investment opportunity, the amount proposed to be 
invested by each party will be allocated among them pro rata based on 
each party's Total Available Capital, up to the amount proposed to be 
invested by each. The Fund Adviser will provide the Eligible Trustees 
with information concerning each participating party's Total Available 
Capital to assist the Eligible Trustees with their review of the Fund's 
investments for compliance with these allocation procedures.
    (c) After making the determinations required in conditions 1 and 
2(a), the Fund Adviser will distribute written information concerning 
the Potential Joint Investment (including the amount proposed to be 
invested by each Fund and any Unregistered Account) to the Eligible 
Trustees for their consideration. A Fund will co-invest with another 
Fund or an Unregistered Account only if, prior to participating in the 
Potential Joint Investment, a Required Majority concludes that:
    (i) The terms of the transaction, including the consideration to be 
paid, are reasonable and fair to the Fund and its shareholders and do 
not involve overreaching in respect of the Fund or its shareholders on 
the part of any person concerned;
    (ii) The transaction is consistent with:
    (A) The interests of the shareholders of the Fund; and
    (B) The Fund's then-current Objectives and Strategies;
    (iii) The investment by other Funds or Unregistered Accounts would 
not disadvantage the Fund, and participation by the Fund would not be 
on a basis different from or less advantageous than that of other Funds 
or Unregistered Accounts; provided that, if any other Fund or 
Unregistered Account, but not the 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 Trustees will have the right to ratify the 
selection of such director or board observer, if any;
    (B) The Fund Adviser agrees to, and does, provide, periodic reports 
to the 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 any Unregistered Account or 
any Fund or any affiliated person of any Unregistered Account or Fund 
receives in connection with the right of the Unregistered Account or 
the 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 Unregistered Accounts (who may, in turn, share their 
portion with their affiliated persons) and the participating Funds in 
accordance with the amount of each party's investment; and
    (iv) The proposed investment by the Fund will not benefit a Van Eck 
Adviser, any other Funds, the Unregistered Accounts or any affiliated 
person of any of them (other than the parties to the Joint Investment), 
except (A) to the extent permitted by condition 13, (B) to the extent 
permitted by section 17(e) of the Act, (C) indirectly, as a result of 
an interest in the securities issued by one of the parties to the Joint 
Investment, or (D) in the case of fees or other compensation described 
in condition 2(c)(iii)(C).
    3. Each Fund has the right to decline to participate in any 
Potential Joint Investment or to invest less than the amount proposed.
    4. The Fund Adviser will present to the Board on a quarterly basis, 
a record of all investments in Potential Joint Investments made by any 
of the other Funds or any of the Unregistered Accounts during the 
preceding quarter that fell within the Fund's then-current Objectives 
and Strategies that were not made available to the Fund, and an 
explanation of why the investment opportunities were not offered to the 
Fund. All information presented to the Board pursuant to this condition 
will be kept for the life of the 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, a Fund will not invest in reliance on the Order in any 
issuer in which another Fund or an Unregistered Account or any 
affiliated person of such Fund or Unregistered Account is an existing 
investor.
    6. A Fund will not participate in any Potential Joint Investment 
unless the terms, conditions, price, class of securities to be 
purchased, settlement date, and registration rights will be the same 
for each participating Fund and Unregistered Account. The grant to an 
Unregistered Account or another Fund,

[[Page 66496]]

but not the 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 Unregistered Account or Fund elects to sell, exchange 
or otherwise dispose of an interest in a security that was acquired in 
a Joint Investment, the Van Eck Adviser will:
    (i) Notify each Fund that participated in the Joint Investment of 
the proposed disposition at the earliest practical time; and
    (ii) Formulate a recommendation as to participation by each Fund in 
the disposition.
    (b) Each 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 Unregistered Accounts 
and any other Fund.
    (c) A Fund may participate in such disposition without obtaining 
prior approval of the Required Majority if: (i) The proposed 
participation of each Fund and Unregistered Account in such disposition 
is proportionate to its outstanding investments in the issuer 
immediately preceding the disposition; (ii) the Board of the Fund has 
approved as being in the best interests of the 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 each Fund is 
provided on a quarterly basis with a list of all dispositions made in 
accordance with this condition. In all other cases, the Fund Adviser 
will provide its written recommendation as to the Fund's participation 
to the Eligible Trustees, and the Fund will participate in such 
disposition solely to the extent that a Required Majority determines 
that it is in the Fund's best interests.
    (d) Each Unregistered Account and each Fund will bear its own 
expenses in connection with any such disposition.
    8. (a) If any Unregistered Account or Fund desires to make a 
Follow-On Investment in a portfolio company whose securities were 
acquired in a Joint Investment, the Van Eck Adviser will:
    (i) Notify each Fund that participated in the Joint Investment 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 
Fund.
    (b) A Fund may participate in such Follow-On Investment without 
obtaining prior approval of the Required Majority if: (i) the proposed 
participation of each Fund and Unregistered Account in such investment 
is proportionate to its outstanding investments in the issuer 
immediately preceding the Follow-On Investment; and (ii) the Board of 
the Fund has approved as being in the best interests of the 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 Fund Adviser will provide its written recommendation as to the 
Fund's participation to the Eligible Trustees, and the Fund will 
participate in such Follow-On Investment solely to the extent that a 
Required Majority determines that it is in the Fund's best interests.
    (c) If, with respect to any Follow-On Investment:
    (i) The amount of the opportunity is not based on the Funds' and 
Unregistered Accounts' outstanding investments immediately preceding 
the Follow-On Investment; and
    (ii) The aggregate amount recommended by the Fund Adviser to be 
invested by the Fund in the Follow-On Investment, together with the 
amount proposed to be invested by any other Fund and the Unregistered 
Account 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 Total 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 Joint Investment for all purposes and 
subject to the other conditions set forth in the application.
    9. The Independent Trustees of each Fund will be provided quarterly 
for review all information concerning Potential Joint Investments and 
Joint Investments, including investments made by other Funds or 
Unregistered Accounts that the Fund considered but declined to 
participate in, so that the Independent Trustees may determine whether 
all investments made during the preceding quarter, including those 
investments that the Fund considered but declined to participate in, 
comply with the conditions of the Order. In addition, the Independent 
Trustees will consider at least annually the continued appropriateness 
for the Fund of participating in new and existing Joint Investments.
    10. Each Fund will maintain the records required by section 
57(f)(3) of the Act as if each of the investments permitted under these 
conditions were approved by the Required Majority under section 57(f).
    11. No Independent Trustee of a 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 
Unregistered Accounts.
    12. The expenses, if any, associated with acquiring, holding or 
disposing of any securities acquired in a Joint Investment (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 a Van Eck Adviser under its investment advisory 
agreements with the Funds and the Unregistered Accounts, be shared by 
the Funds and the Unregistered Accounts in proportion to the relative 
amounts of the securities held or being 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) of the Act) 
received in connection with a Joint Investment will be distributed to 
the participating Funds and Unregistered Accounts on a pro rata basis 
based on the amounts they invested or committed, as the case may be, in 
such Joint Investment. If any transaction fee is to be held by a Van 
Eck Adviser pending consummation of the transaction, the fee will be 
deposited into an account maintained by the Van Eck 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 Funds and Unregistered Accounts 
based on the amounts they invest in such Joint Investment. None of the 
Unregistered Accounts, the Van Eck Adviser nor any affiliated person 
(as defined in the Act) of the Funds will receive additional 
compensation or remuneration of any kind as a result of or in 
connection with a Joint Investment (other than (a) in the case of the 
Funds and the Unregistered Accounts, 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 the Van Eck Adviser, investment 
advisory fees paid in accordance with the agreements between the Van 
Eck Adviser and the Funds or the Unregistered Accounts).


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    For the Commission, by the Division of Investment Management, 
under delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-26910 Filed 11-2-12; 8:45 am]
BILLING CODE 8011-01-P