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Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices
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 Regulated Fund and the Wholly-Owned Investment Sub.
6. When considering Potential CoInvestment Transactions for any Regulated Fund, the applicable Adviser will consider only the Objectives and Strategies,9 investment policies, investment positions, capital available for investment,10 and other pertinent factors applicable to that Regulated Fund. The Regulated Funds Adviser 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 Funds, with certain exceptions based on capital available for investment or diversification. The Board of each Regulated Fund, including the Non-Interested Directors, has determined, or will have determined, that it is in the best interests of the Regulated Fund to participate in CoInvestment Transactions.11
7. 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 2a, the Adviser will present each Potential Co-Investment Transaction and the proposed allocation to the directors of the Board eligible to vote on that Co-Investment Transaction under section 57o of the Act Eligible Directors, and the required majority of such directors of the Board, as defined in section 57o of the Act Required Majority 12 will approve each CoInvestment Transaction prior to any 9 Objectives and Strategies means a Regulated Funds investment objectives and strategies, as described in the Regulated Funds registration statement on Form N2, other filings the Regulated Fund has made with the Commission under the Securities Act, or under the Securities Exchange Act of 1934, and the Regulated Funds reports to shareholders.
10 The amount of each Regulated Funds capital available for investment 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 of the applicable Regulated Fund or imposed by applicable laws, rules, regulations or interpretations.
11 The Regulated Funds, however, will not be obligated to invest, or co-invest, when investment opportunities are referred to them.
12 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 57o.

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investment by the participating Regulated Fund.
8. 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 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 Funds 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 Funds 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.
9. No Non-Interested Director of a Regulated Fund will have a financial interest in any Co-Investment Transaction, other than indirectly through share ownership in one of the Regulated Funds.
10. If the Advisers, their principal owners the Principals, or any person controlling, controlled by, or under common control with the Advisers or the Principals, and the Affiliated Funds collectively, the Holders own in the aggregate more than 25 percent of the outstanding voting shares of a Regulated Fund the Shares, then the Holders will vote such Shares as required under condition 14.
Applicants Legal Analysis 1. Section 17d of the Act and rule 17d1 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 17d1, the Commission considers whether the companys 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.

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2. Similarly, with regard to BDCs, section 57a4 of the Act generally prohibits certain persons specified in section 57b from participating in joint transactions with the BDC or a company controlled by the BDC in contravention of rules as prescribed by the Commission. Section 57i of the Act provides that, until the Commission prescribes rules under section 57a4, the Commissions rules under section 17d of the Act applicable to registered closed-end investment companies will be deemed to apply to transactions subject to section 57a4. Because the Commission has not adopted any rules under section 57a4, rule 17d1 also applies to joint transactions with Regulated Funds that are BDCs.
3. Applicants state that in the absence of the requested relief, in some circumstances the Regulated Funds would be limited in their ability to participate in attractive and appropriate investment opportunities. Applicants believe that the proposed terms and conditions set forth in the application ensure that the proposed Co-Investment Transactions are consistent with the protection of each Regulated Funds shareholders and with the purposes intended by the policies and provisions of the Act. Applicants believe that the participation of the Regulated Funds in the Co-Investment Transactions done in accordance with the proposed terms and conditions would be consistent with the provisions, policies, and purposes of the Act and would be done in a manner that was not different from, or less advantageous than, the other participants.
Applicants Conditions Applicants agree that the Order shall be subject to the following conditions:
1. Each time an Adviser considers a Potential Co-Investment Transaction for an Affiliated Fund or another Regulated Fund that falls within a Regulated Funds then-current Objectives and Strategies, the Regulated Funds Adviser will make an independent determination of the appropriateness of the investment for such Regulated Fund in light of the Regulated Funds thencurrent circumstances.
2.a If the Adviser deems a Regulated Funds participation in any Potential Co-Investment Transaction to be appropriate for the Regulated Fund, it 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 CoInvestment Transaction, together with the amount proposed to be invested by
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