[Federal Register Volume 80, Number 194 (Wednesday, October 7, 2015)]
[Notices]
[Pages 60726-60730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25465]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-31856; File No. 812-14122]


Triton Pacific Investment Corporation, Inc., et al.; Notice of 
Application

September 30, 2015.
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 to permit certain joint transactions otherwise 
prohibited by sections 17(d) and 57(a)(4) of the Act and rule 17d-1 
under the Act.

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Summary of Application:  Applicants request an order to permit certain 
business development companies (``BDCs'') and closed-end management 
investment companies to co-invest in portfolio companies with each 
other and with affiliated investment funds.

Applicants:  Triton Pacific Investment Corporation, Inc. (the 
``Company''), Triton Pacific Income & Growth Fund IV, LP (``Fund IV''), 
Triton Pacific Platinum Fund IV, LP (``Platinum IV'' and, together with 
Fund IV, the ``Existing Affiliated Private Funds''), TPCP Fund Manager 
IV, LLC (the ``Fund Manager''), Triton Pacific Adviser, LLC (the ``BDC 
Adviser''), Triton Pacific Capital Partners, LLC (``TPCP''), and Triton 
Pacific Group, Inc. (``TPG'').

Filing Dates:  The application was filed on February 8, 2013, and 
amended on May 17, 2013, July 15, 2013, December 18, 2013, June 12, 
2014, November 25, 2014, May 28, 2015, and September 29, 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 October 26, 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:  Brent J. Fields, Secretary, U.S. Securities and Exchange 
Commission, 100 F St. NE., Washington, DC 20549-1090. Applicants: 10877 
Wilshire Blvd., 12th Floor, Los Angeles, CA 90024.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-6873 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.

[[Page 60727]]

Applicants' Representations

    1. The Company, a Maryland corporation, is 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 maximize total return by generating current income 
from debt investments and long term capital appreciation from equity 
investments. The Company invests primarily in debt and equity 
investments in small and mid-sized private U.S. companies. The board of 
directors of the Company (for any Regulated Fund, the ``Board'') is 
comprised of five members, three of whom are not ``interested persons'' 
as defined in section 2(a)(19) of the Act (``Independent Directors''). 
Craig Faggen (the ``Principal'') serves as a director on the Company's 
Board and as the Company's chief executive officer. The Principal 
controls TPG, TPCP, and the BDC Adviser.
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    \1\ 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.
    \2\ ``Objectives and Strategies'' means a Regulated Fund's (as 
defined below) investment objectives and strategies, as described in 
the Regulated Fund's registration statement on Form N-2, other 
filings the Regulated Fund makes 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. The Existing Affiliated Private Funds are parallel funds. Fund 
IV is a Delaware limited partnership and Platinum IV is a Delaware 
limited liability company. Each Existing Affiliated Private Fund would 
be an investment company but for section 3(c)(1) or 3(c)(7) of the Act. 
The investment strategy of each Existing Affiliated Private Fund is to 
generate current income and capital appreciation by investing in small 
and mid-sized private U.S. companies. The Existing Affiliated Private 
Funds and the Company have similar investment strategies.
    3. The BDC Adviser, a Delaware limited liability company, is 
registered as an investment adviser under the Investment Advisers Act 
of 1940 (the ``Advisers Act''). The BDC Adviser serves as investment 
adviser to the Company and the Existing Affiliated Private Funds.
    4. The Fund Manager, a Delaware limited liability company, is the 
general partner of the Existing Affiliated Private Funds. TPCP, a 
California limited liability company, is the managing member of the 
Fund Manager. TPG, a California corporation, is the managing member of 
TPCP.
    5. Applicants seek an order (``Order'') to permit one or more 
Regulated Funds\3\ and/or one or more Affiliated Private Funds\4\ 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 Adviser 
negotiates terms in addition to price (``Co-Investment Program''); \5\ 
and (b) making additional investments in securities of such issuers, 
including through the exercise of warrants, conversion privileges, and 
other rights to purchase additional securities of the issuers 
(``Follow-On Investments''). ``Co-Investment Transaction'' means any 
transaction in which a Regulated Fund (or its Wholly-Owned Investment 
Sub, as defined below) participated together with one or more other 
Regulated Funds and/or one or more Affiliated Private 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 
other Regulated Funds and/or one or more Affiliated Private Funds 
without obtaining and relying on the Order.\6\
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    \3\ ``Regulated Funds'' means the Company 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 BDC, (b) whose investment adviser 
is an Adviser, and (c) that intends to participate in the Co-
Investment Program. The term ``Adviser'' means the BDC Adviser and 
any future investment adviser that controls, is controlled by, or is 
under common control with the BDC Adviser and is registered as an 
investment adviser under the Advisers Act. All references to the 
term ``Adviser'' include successors-in-interest to the Adviser. A 
successor-in-interest is limited to an entity that results from a 
reorganization into another jurisdiction or change in the type of 
business organization.
    \4\ ``Affiliated Private Fund'' means the Existing Affiliated 
Private Funds and any Future Affiliated Private Fund. ``Future 
Affiliated Private Fund'' means any entity (a) whose investment 
adviser is an 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.
    \5\ 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.
    \6\ All existing entities that currently intend to rely on the 
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 a Regulated Fund may, from time to time, 
form one or more Wholly-Owned Investment Subs.\7\ Such a subsidiary 
would be prohibited from investing in a Co-Investment Transaction with 
any other Regulated Fund or Affiliated Private 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 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 of the Regulated 
Fund will also be informed of, and take into consideration, the 
relative participation of the Regulated Fund and the Wholly-Owned 
Investment Sub.
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    \7\ 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 beneficially holding, directly or indirectly, 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 Adviser will consider only the Objectives and 
Strategies, investment policies, investment positions, capital 
available for investment (``Available Capital''), and other pertinent 
factors applicable to that Regulated Fund.\8\ The Adviser

[[Page 60728]]

expects that any portfolio company that is an appropriate investment 
for a Regulated Fund should also be an appropriate investment for one 
or more other Regulated Funds and/or one or more Affiliated Private 
Funds, with certain exceptions based on Available Capital or 
diversification.\9\
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    \8\ ``Available Capital'' consists solely of liquid assets not 
held for permanent investment, including cash, amounts that can 
currently be drawn from lines of credit, and marketable securities 
held for short-term purposes. In addition, for the Affiliated 
Private Funds, Available Capital would include bona fide uncalled 
capital commitments that can be called by the settlement date of the 
Co-Investment Transaction.
    \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 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 directors 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 Private Fund 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 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 Independent Director of a Regulated Fund will have a direct 
or indirect financial interest in any Co-Investment Transaction, other 
than through share ownership in one of the Regulated Funds, including 
any interest in securities of a company whose securities are acquired 
in the Co-Investment Transaction.
    11. Under condition 14, if an Adviser, the Principal, any person 
controlling, controlled by, or under common control with the Adviser or 
the Principal, and the Affiliated Private Funds (collectively, the 
``Holders'') own in the aggregate more than 25% of the outstanding 
voting securities of the Company or another a Regulated Fund 
(``Shares''), then the Holders will vote such Shares as directed by an 
independent third party when voting on matters specified in the 
condition. Applicants believe that this condition will ensure that the 
Independent Directors will act independently in evaluating the Co-
Investment Program, because the ability of an Adviser or the Principal 
to influence the Independent Directors by a suggestion, explicit or 
implied, that the Independent Directors can be removed will be limited 
significantly. Applicants represent that the Independent Directors will 
evaluate and approve any such voting trust or proxy adviser, taking 
into accounts its qualifications, reputation for independence, cost to 
the shareholders, and other factors that they deem relevant.

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 Private 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 any Order granting the requested relief shall 
be subject to the following conditions:
    1. Each time an Adviser considers a Potential Co-Investment 
Transaction for the Affiliated Private Funds or another Regulated Fund 
that falls within a Regulated Fund's then-current Objectives and 
Strategies, the Adviser will make an independent determination of the 
appropriateness of the investment for the Regulated Fund in light of 
the Regulated Fund's then-current circumstances.
    2. (a) If the Adviser deems a Regulated Fund's participation in any 
Potential Co-Investment Transaction to be appropriate for the Regulated 
Fund, the Adviser will then determine an appropriate level of 
investment for the Regulated Fund.
    (b) If the aggregate amount recommended by the applicable Adviser 
to be invested by the applicable Regulated Fund in the Potential Co-
Investment Transaction, together with the amount proposed to be 
invested by

[[Page 60729]]

the other participating Regulated Funds and Affiliated Private 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 participating party's Available 
Capital, up to the amount proposed to be invested by each. The 
applicable 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 
compliance with these allocation procedures.
    (c) After making the determinations required in conditions 1 and 
2(a), the applicable Adviser will distribute written information 
concerning the Potential Co-Investment Transaction (including the 
amount proposed to be invested by each participating Regulated Fund and 
the Affiliated Private Funds) to the Eligible Directors of each 
participating Regulated Fund for their consideration. A Regulated Fund 
will co-invest with one or more Regulated Funds and/or one or more 
Affiliated Private 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 other Regulated Funds or the Affiliated 
Private Funds would not disadvantage the Regulated Fund, and 
participation by the Regulated Fund would not be on a basis different 
from or less advantageous than that of other Regulated Funds or the 
Affiliated Private Funds; provided that, if any other Regulated Fund or 
the Affiliated Private Funds, 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 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 Regulated 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 the Affiliated Private 
Funds or any Regulated Fund or any affiliated person of the Affiliated 
Private Funds or any Regulated Fund receives in connection with the 
right of the Affiliated Private Funds or the 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 Private 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 Advisers, the Affiliated Private 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 Adviser will present to each Regulated Fund's 
Board, on a quarterly basis, a record of all investments in Potential 
Co-Investment Transactions made by any of the other Regulated Funds or 
the Affiliated Private 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 Regulated Fund's 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 or Affiliated 
Private Fund or any affiliated person of another Regulated Fund or 
Affiliated Private Fund is an existing investor.
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    \11\ This exception only applies 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 
Private Fund. The grant to any Affiliated Private 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 Private 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 
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 Private 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 Private Fund 
in such disposition is proportionate to its outstanding investments in 
the issuer immediately preceding the disposition; (ii) the Regulated 
Fund's Board has approved as being in the best interests of the 
Regulated Fund the ability to participate in such dispositions on a pro 
rata basis

[[Page 60730]]

(as described in greater detail in the application); and (iii) the 
Regulated Fund's 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 
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 Private Fund and each Regulated Fund will bear 
their own expenses in connection with any such disposition.
    8. (a) If any Affiliated Private 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 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 
Private Fund in such investment is proportionate to its outstanding 
investments in the issuer immediately preceding the Follow-On 
Investment; and (ii) the Regulated Fund's Board 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 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 Private Funds' outstanding investments 
immediately preceding the Follow-On Investment; and
    (ii) the aggregate amount recommended by the applicable 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 Private 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, 
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 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 the Affiliated Private 
Funds that the Regulated Fund considered but declined to participate 
in, so that the Independent Directors may determine whether all 
investments made during the preceding quarter, including investments 
that the Regulated Fund 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 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).
    11. No Independent 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 any of the 
Affiliated Private 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 Securities Act) will, to 
the extent not payable by the Advisers under their investment advisory 
agreements with the Regulated Funds and the Affiliated Private Funds, 
be shared by the Regulated Funds and the Affiliated Private Funds in 
proportion to the relative amounts of the securities held or be 
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) 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 the Affiliated Private 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 
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) 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 the 
Affiliated Private Funds based on the amounts they invest in such Co-
Investment Transaction. None of the Affiliated Private Funds, the 
Advisers, the other Regulated Funds, or any affiliated person of the 
Regulated Funds or the Affiliated Private 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 Private 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 Adviser, 
investment advisory fees paid in accordance with the respective 
agreements between the Adviser and the Regulated Funds or the 
Affiliated Private Funds).
    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. 2015-25465 Filed 10-6-15; 8:45 am]
 BILLING CODE 8011-01-P