[Federal Register Volume 80, Number 171 (Thursday, September 3, 2015)]
[Notices]
[Pages 53377-53381]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-21866]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31799; File No. 812-14396]


Full Circle Capital Corporation et al.; Notice of Application

August 28, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of application for an order pursuant to section 57(i) of 
the Investment Company Act of 1940 (the ``Act'') and rule 17d-1 under 
the Act to permit certain joint transactions otherwise prohibited by 
section 57(a)(4) of the Act and rule 17d-1 under the Act.

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

APPLICANTS: Full Circle Capital Corporation (the ``Company''), Full 
Circle Private Investments LLC (``FCPI Fund''), Full Circle Healthcare 
Capital, LLC (the ``Healthcare Fund,'' and together with FCPI Fund, the 
``Existing Funds''), Full Circle Advisors, LLC (the ``Adviser''), Full 
Circle West, Inc., FC New Media, Inc., TransAmerican Asset Servicing 
Group, Inc., FC New Specialty Foods, Inc. and FC Takoda Holdings, LLC, 
(collectively, the ``Full Circle Subsidiaries,'' and together with the 
Company, the Existing Funds and the Adviser, the ``Applicants'').

DATES: Filing Dates: The application was filed on December 4, 2014 and 
amended on May 1, 2015.

HEARING OR NOTIFICATION OF HEARING: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on September 22, 2015, and should be accompanied by proof of 
service on applicants, in the form of an affidavit or, for lawyers, a 
certificate of service. Pursuant to rule 0-5 under the Act, hearing 
requests should state the nature of the writer's interest, any facts 
bearing upon the desirability of a hearing on the matter, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
St., NE., Washington, DC 20549-1090.

[[Page 53378]]

Applicants: 102 Greenwich Avenue, 2nd Floor, Greenwich, CT 06830.

FOR FURTHER INFORMATION CONTACT: Kyle R. Ahlgren, Senior Counsel, at 
(202) 551-6857 or Holly Hunter-Ceci, Branch Chief, at (202) 551-6825 
(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. The Company is a Maryland corporation organized as a closed-end 
management investment company that has elected to be regulated as a BDC 
under section 54(a) of the Act.\1\ The Company's Objectives and 
Strategies \2\ are to generate both current income and capital 
appreciation through debt and equity investments, primarily in senior 
secured loans and, to a lesser extent, second lien loans and mezzanine 
loans and equity securities issued by lower middle-market companies 
that operate in a diverse range of industries. The Company has a six-
member board of directors (the ``Board''), of which four members are 
not ``interested persons'' of the Company within the meaning of section 
2(a)(19) of the Act (the ``Independent Directors'').
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    \1\ Section 2(a)(48) of the Act defines a BDC to be any closed-
end investment company that operates for the purpose of making 
investments in securities described in sections 55(a)(1) through 
55(a)(3) of the Act and makes available significant managerial 
assistance with respect to the issuers of such securities.
    \2\ ``Objectives and Strategies'' means a fund's investment 
objectives and strategies, as described in the fund's registration 
statement on Form N-2, other filings the fund has made with the 
Commission under the Securities Act of 1933, or under the Securities 
Exchange Act of 1934, and the fund's reports to shareholders.
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    2. FCPI Fund is a Delaware limited liability company managed by the 
Adviser that has not yet held a closing and currently has no 
investments. FCPI Fund's investment objective is to generate both 
current income and capital appreciation through debt and equity 
investments. The Healthcare Fund is a Delaware limited liability 
company managed by the Adviser that has not yet held a closing and 
currently has no investments. The Healthcare Fund's investment 
objective is to generate both current income and capital appreciation 
through debt and equity investments in the healthcare industry. Each 
Existing Fund intends to rely on the exclusion from the definition of 
``investment company'' provided by section 3(c)(1) or 3(c)(7) of the 
Act.
    3. Each Full Circle Subsidiary is a Delaware entity and Wholly-
Owned Investment Sub \3\ whose assets are managed by the Adviser and 
whose sole business purpose is to hold one or more investments on 
behalf of the Company.
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    \3\ The term ``Wholly-Owned Investment Sub'' means an entity (a) 
whose sole business purpose is to hold one or more investments on 
behalf of the Company (and, in the case of an SBIC Subsidiary (as 
defined below), maintain a license under the SBA Act (as defined 
below) and issue debentures guaranteed by the SBA (as defined 
below)); (b) that is wholly-owned by the Company (with the Company 
at all times holding, beneficially and of record, 100% of the voting 
and economic interests), (c) with respect to which the Board has the 
sole authority to make all determinations with respect to the 
entity's participation under the conditions to the Application; and 
(d) that would be an investment company but for section 3(c)(1) or 
3(c)(7) of the Act. All subsidiaries of the Company participating in 
co-investment transactions under the terms of the Application will 
be Wholly-Owned Investment Subs and will have Objectives and 
Strategies that are either the same as, or a subset of, the 
Company's Objectives and Strategies. The term ``SBIC Subsidiary'' 
means a Wholly-Owned Investment Sub that is licensed by the Small 
Business Administration (the ``SBA'') to operate under the Small 
Business Investment Act of 1958, as amended, (the ``SBA Act'') as a 
small business investment company (an ``SBIC'').
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    4. The Adviser is a privately-held Delaware limited liability 
company registered with the Commission as an investment adviser under 
the Investment Advisers Act of 1940. The Adviser serves as investment 
adviser to the Company and to each Existing Fund.
    5. Applicants seek an order (``Order'') under sections 57(a)(4) and 
57(i) of the Act and rule 17d-1 under the Act to allow the Company, on 
one hand, and one or more Funds,\4\ on the other hand, 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.
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    \4\ ``Fund'' means: (i) The Existing Funds; and (ii) any Future 
Fund. ``Future Fund'' means an entity: (i) Whose investment adviser 
is the Adviser; and (ii) that would be an investment company but for 
section 3(c)(1) or 3(c)(7) of the Act. 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 the Company may, from time to time, form a 
Wholly-Owned Investment Sub, each of which would be prohibited from 
investing in a Co-Investment Transaction \5\ with any Fund because it 
would be a company controlled by the Company 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 the Company and that the Wholly-Owned 
Investment Sub's participation in any such transaction be treated, for 
purposes of the Order, as though the Company 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 Company's investments and, therefore, no 
conflicts of interest could arise between the Company and the Wholly-
Owned Investment Sub. Applicants further represent that the 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 Board would be informed of, and take into 
consideration, any proposed use of a Wholly-Owned Investment Sub in the 
Company's place. If the Company 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 Company and the Wholly-Owned Investment 
Sub.
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    \5\ ``Co-Investment Transaction'' means any transaction in which 
the Company (or a Wholly-Owned Investment Sub) participated together 
with one or more Funds in reliance on the requested Order.
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    7. The Co-Investment Program requires that the terms, conditions, 
price, class of securities, settlement date, and registration rights 
applicable to any of the Funds' purchases be the same as those 
applicable to the Company's purchase. In selecting investments for the 
Company, the Adviser will consider only the investment objective, 
investment policies, investment position, capital available for 
investment (``Available Capital''),\6\ and other pertinent factors 
applicable to the Company. Likewise, when selecting investments for the 
Funds, the Adviser will select investments considering, in each case, 
only the investment objective, investment policies, investment 
position, Available Capital, and other pertinent factors applicable to 
that

[[Page 53379]]

particular investing entity. Each of the Funds has, or will have, 
investment objectives and strategies that are similar or identical to 
the Company's Objectives and Strategies.
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    \6\ The amount of the Company's Available Capital will be 
determined based on the amount of cash on hand, existing commitments 
and reserves, if any, the targeted leverage level, targeted asset 
mix and other investment policies and restrictions set from time to 
time by the Board or imposed by applicable laws, rules, regulations 
or interpretations. Likewise, a Fund's Available Capital is 
determined based on the amount of cash on hand, existing commitments 
and reserves, if any, the targeted leverage level, targeted asset 
mix and other investment policies and restrictions set by the Fund's 
directors, general partners or adviser or imposed by applicable 
laws, rules, regulations or interpretations.
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    8. Other than pro rata dispositions and Follow-On Investments \7\ 
as provided in conditions 7 and 8, and after making the determinations 
required in conditions 1 and 2(a), the Adviser will present each 
Potential Co-Investment Transaction \8\ 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'') \9\ will approve 
each Co-Investment Transaction prior to any investment by the Company.
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    \7\ ``Follow-On Investment'' means any additional investment in 
an existing portfolio company, including the exercise of warrants, 
conversion privileges or other similar rights to acquire additional 
securities of the portfolio company.
    \8\ ``Potential Co-Investment Transaction'' means any investment 
opportunity in which the Company (or a Wholly-Owned Investment Sub) 
could not participate together with one or more Funds without 
obtaining and relying on the Order.
    \9\ 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, the Company 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 the Company in such 
disposition or Follow-On Investment is proportionate to its outstanding 
investments in the issuer immediately preceding the disposition or 
Follow-On Investment, as the case may be; and (ii) the Board has 
approved the Company's participation in pro rata dispositions and 
Follow-On Investments as being in the best interests of the Company. If 
the Board does not so approve, any such disposition or Follow-On 
Investment will be submitted to the Eligible Directors. The Board may 
at any time rescind, suspend or qualify its approval of pro rata 
dispositions and Follow-On Investments with the result that all 
dispositions and/or Follow-On Investments must be submitted to the 
Eligible Directors.
    10. No Independent Director will have any direct or indirect 
financial interest in any Co-Investment Transaction or any interest in 
any portfolio company, other than through an interest (if any) in the 
securities of the Company.
    11. Under condition 14, if the Adviser, the principals of the 
Adviser (``Principals''), any person controlling, controlled by, or 
under common control with the Adviser or the Principals, and the Funds 
(collectively, the ``Holders'') own in the aggregate more than 25% of 
the outstanding voting securities of the Company (``Shares''), then the 
Holders will vote such Shares as directed by an independent third party 
(such as the trustee of a voting trust or a proxy adviser) when voting 
on (1) the election of directors; (2) the removal of one or more 
directors; or (3) any matters requiring approval by the vote of a 
majority of the outstanding voting securities, as defined in Section 
2(a)(42) of the Act.

Applicants' Legal Analysis

    1. Section 57(a)(4) of the Act makes it unlawful for any person who 
is related to a BDC in a manner described in section 57(b), acting as 
principal, knowingly to effect any transaction in which the BDC is a 
joint or a joint and several participant with that person in 
contravention of rules and regulations as the Commission may prescribe 
for the purpose of limiting or preventing participation by the BDC on a 
basis less advantageous than that of the other participant. Although 
the Commission has not adopted any rules expressly under section 
57(a)(4), section 57(i) provides that the rules under section 17(d) 
applicable to registered closed-end investment companies (e.g., rule 
17d-1) are, in the interim, deemed to apply to transactions subject to 
section 57(a). Rule 17d-1, as made applicable to BDCs by section 57(i), 
prohibits any person who is related to a BDC in a manner described in 
section 57(b), acting as principal, from participating in, or effecting 
any transaction in connection with, any joint enterprise or other joint 
arrangement or profit-sharing plan in which the BDC is a participant, 
unless an application regarding the joint enterprise, arrangement, or 
profit-sharing plan has been filed with the Commission and has been 
granted by an order entered prior to the submission of the plan or any 
modification thereof, to security holders for approval, or prior to its 
adoption or modification if not so submitted.
    2. Section 57(b) specifies the persons to whom the prohibitions of 
section 57(a)(4) apply. These persons include the following: (1) Any 
director, officer, employee, or member of an advisory board of a BDC or 
any person (other than the BDC itself) who is, within the meaning of 
section 2(a)(3)(C), an affiliated person of any such person; or (2) any 
investment adviser or promoter of, general partner in, principal 
underwriter for, or person directly or indirectly either controlling, 
controlled by, or under common control with a BDC (except the BDC 
itself and any person who, if it were not directly or indirectly 
controlled by the BDC, would not be directly or indirectly under the 
control of a person who controls the BDC), or any person who is, within 
the meaning of section 2(a)(3)(C) an affiliated person of such person. 
Section 2(a)(9) defines ``control'' as the power to exercise a 
controlling influence over the management or policies of a company, 
unless such power is solely the result of an official position with 
such company. The statute also sets forth the interpretation that any 
person who owns beneficially, either directly or through one or more 
controlled companies, more than 25 percent of the voting securities of 
a company shall be presumed to control such company; any person who 
does not so own more than 25 percent of the voting securities of a 
company shall be presumed not to control such company; and a natural 
person shall be presumed not to be a controlled person.
    3. Applicants state that in the absence of the requested relief, 
transactions effected as part of the Co-Investment Program would be 
prohibited by section 57(a)(4) and rule 17d-1 to the extent that the 
Funds fall within the category of persons described by section 57(b) 
vis-[agrave]-vis the Company. The Existing Funds may be deemed to be 
affiliated persons of the Company within the meaning of section 
2(a)(3)(C) by reason of common control because the Adviser manages and 
may be deemed to control the Company and the Existing Funds. Similarly, 
each Future Fund may be deemed to be an affiliated person of the 
Company within the meaning of section 2(a)(3)(C) by reason of common 
control because the Adviser will manage and may be deemed to control 
each Future Fund. Thus, each of the Funds could be deemed to be a 
person related to the Company in a manner described by section 57(b) 
and therefore prohibited by section 57(a)(4) and rule 17d-1 from 
participating in the Co-Investment Program.
    4. In passing upon applications under rule 17d-1, the Commission 
will consider whether the participation by the BDC in such 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.
    5. Applicants submit that the fact that the Required Majority will 
approve each Co-Investment Transaction before investment, and other 
protective conditions set forth in the Application,

[[Page 53380]]

will ensure that the Company will be treated fairly. The conditions to 
which the requested relief will be subject are designed to ensure that 
neither the Adviser nor Principal would be able to favor the Funds over 
the Company through the allocation of investment opportunities among 
them. Because almost every attractive investment opportunity for the 
Company will also be an attractive investment opportunity for the 
Funds, Applicants submit that the Co-Investment Program presents an 
attractive alternative to the institution of some form of equitable 
allocation protocol for the allocation of 100% of individual investment 
opportunities to either the Company or the Funds as opportunities 
arise. Applicants submit that the Company's 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 the Adviser considers a Potential Co-Investment 
Transaction for a Fund that falls within the Company's then-current 
Objectives and Strategies, the Adviser will make an independent 
determination of the appropriateness of the investment for the Company 
in light of the Company's then-current circumstances.
    2. (a) If the Adviser deems the Company's participation in any 
Potential Co-Investment Transaction to be appropriate for the Company, 
it will then determine an appropriate level of investment for the 
Company.
    (b) If the aggregate amount recommended by the Adviser to be 
invested in the Potential Co-Investment Transaction by the Company, 
together with the amount proposed to be invested by the Funds, 
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 
Available Capital in the asset class being allocated, up to the amount 
proposed to be invested by each. The Adviser will provide the Eligible 
Directors with information concerning each participating party's 
Available Capital to assist the Eligible Directors with their review of 
the Company's investments for compliance with these allocation 
procedures.
    (c) After making the determinations required in conditions 1 and 
2(a), the Adviser will distribute written information concerning the 
Potential Co-Investment Transaction (including the amount proposed to 
be invested by each Fund) to the Eligible Directors for their 
consideration. The Company will co-invest with one or more Funds only 
if, prior to participating in the Potential Co- Investment Transaction, 
a Required Majority concludes that:
    (i) The terms of the transaction, including the consideration to be 
paid, are reasonable and fair to the Company and its shareholders and 
do not involve overreaching in respect of the Company 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 Company; and
    (B) the Company's then-current Objectives and Strategies;
    (iii) the investment by the Funds would not disadvantage the 
Company, and participation by the Company would not be on a basis 
different from or less advantageous than that of the Funds; provided 
that, if any Fund, but not the Company itself, gains the right to 
nominate a director for election to a portfolio company's board of 
directors or the right to have a board observer or any similar right to 
participate in the governance or management of the portfolio company, 
such event will not be interpreted to prohibit the Required Majority 
from reaching the conclusions required by this condition (2)(c)(iii), 
if
    (A) the Eligible Directors will have the right to ratify the 
selection of such director or board observer, if any;
    (B) the Adviser agrees to, and does, provide, periodic reports to 
the 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 Fund or any affiliated 
person of any Fund receives in connection with the right of 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 Funds (who may, 
in turn, share their portion with their affiliated persons) and the 
Company in accordance with the amount of each party's investment; and
    (iv) the proposed investment by the Company will not benefit the 
Adviser or the 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. The Company has the right to decline to participate in any 
Potential Co-Investment Transaction or to invest less than the amount 
proposed.
    4. The Adviser will present to the Board, on a quarterly basis, a 
record of all investments in Potential Co-Investment Transactions made 
by the Funds during the preceding quarter that fell within the 
Company's then-current Objectives and Strategies that were not made 
available to the Company, and an explanation of why the investment 
opportunities were not offered to the Company. All information 
presented to the Board pursuant to this condition will be kept for the 
life of the Company 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, the Company will not invest in reliance on the Order in 
any issuer in which any Fund or any affiliated person of the Funds is 
an existing investor.
    6. The Company 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 the Company as for the each participating Fund. The grant to a 
Fund, but not the Company, 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 Fund elects to sell, exchange or otherwise dispose of 
an interest in a security that was acquired in a Co-Investment 
Transaction, the Adviser will:
    (i) Notify the Company of the proposed disposition at the earliest 
practical time; and
    (ii) formulate a recommendation as to participation by the Company 
in the disposition.
    (b) The Company will have the right to participate in such 
disposition on a proportionate basis, at the same price and on the same 
terms and conditions

[[Page 53381]]

as those applicable to the participating Funds.
    (c) The Company may participate in such disposition without 
obtaining prior approval of the Required Majority if: (i) The proposed 
participation of the Company and each Fund in such disposition is 
proportionate to its outstanding investment in the issuer immediately 
preceding the disposition; (ii) the Board has approved as being in the 
best interests of the Company the ability to participate in such 
dispositions on a pro rata basis (as described in greater detail in the 
Application); and (iii) the Board is provided on a quarterly basis with 
a list of all dispositions made in accordance with this condition. In 
all other cases, the Adviser will provide its written recommendation as 
to the Company's participation to the Eligible Directors, and the 
Company will participate in such disposition solely to the extent that 
a Required Majority determines that it is in the Company's best 
interests.
    (d) The Company and each participating Fund will bear its own 
expenses in connection with any such disposition.
    8. (a) If any Fund desires to make a Follow-On Investment in a 
portfolio company whose securities were acquired in a Co-Investment 
Transaction, the Adviser will:
    (i) Notify the Company 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 the 
Company.
    (b) The Company may participate in such Follow-On Investment 
without obtaining prior approval of the Required Majority if: (i) The 
proposed participation of the Company and each Fund in such investment 
is proportionate to its outstanding investments in the issuer 
immediately preceding the Follow-On Investment; and (ii) the Board has 
approved as being in the best interests of the Company the ability to 
participate in Follow-On Investments on a pro rata basis (as described 
in greater detail in the Application). In all other cases, the Adviser 
will provide its written recommendation as to the Company's 
participation to the Eligible Directors, and the Company will 
participate in such Follow-On Investment solely to the extent that a 
Required Majority determines that it is in the Company's best 
interests.
    (c) If, with respect to any Follow-On Investment:
    (i) The amount of the opportunity is not based on the Company's and 
the Funds' outstanding investments immediately preceding the Follow-On 
Investment; and
    (ii) the aggregate amount recommended by the Adviser to be invested 
by the Company in the Follow-On Investment, together with the amount 
proposed to be invested by the participating Funds in the same 
transaction, exceeds the amount of the opportunity;

then the amount invested by each such party will be allocated among 
them pro rata based on each party's Available Capital 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 Independent Directors will be provided quarterly for review 
all information concerning Potential Co-Investment Transactions and Co-
Investment Transactions, including investments made by the Funds that 
the Company considered but declined to participate in, so that the 
Independent Directors may determine whether all investments made during 
the preceding quarter, including those investments that the Company 
considered but declined to participate in, comply with the conditions 
of the order. In addition, the Independent Directors will consider at 
least annually the continued appropriateness for the Company of 
participating in new and existing Co-Investment Transactions.
    10. The Company will maintain the records required by section 
57(f)(3) as if each of the investments permitted under these conditions 
were approved by the Required Majority under section 57(f).
    11. No Independent Director 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 Funds.
    12. The expenses, if any, associated with acquiring, holding or 
disposing of any securities acquired in a Co-Investment Transaction 
(including, without limitation, the expenses of the distribution of any 
such securities registered for sale under the 1933 Act) will, to the 
extent not payable by the Adviser under its respective investment 
advisory agreements with the Company and the Funds, be shared by the 
Company and the Funds 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 \10\ (including break-up or commitment fees 
but excluding broker's fees contemplated by section 17(e) or 57(k), as 
applicable) received in connection with a Co-Investment Transaction 
will be distributed to the Company and the participating 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 the Adviser pending consummation of the transaction, the fee 
will be deposited into an account maintained by the Adviser at a bank 
or banks having the qualifications prescribed in section 26(a)(1), and 
the account will earn a competitive rate of interest that will also be 
divided pro rata among the Company and the participating Funds based on 
the amounts they invest in such Co-Investment Transaction. None of the 
Adviser, the Funds, nor any affiliated person of the Company 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 Company and the participating 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 the Adviser, 
investment advisory fees paid in accordance with the respective 
agreements between the Adviser and the Company or the Funds).
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    \10\ 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 
outstanding Shares of a Regulated Fund, then the Holders will vote such 
Shares as directed by an independent third party (such as the trustee 
of a voting trust or a proxy adviser) when voting on (1) the election 
of directors; (2) the removal of one or more directors; or (3) any 
matters requiring approval by the vote of a majority of the outstanding 
voting securities, as defined in section 2(a)(42) of the Act.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21866 Filed 9-2-15; 8:45 am]
BILLING CODE 8011-01-P