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Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Notices
Nevertheless, in all cases, i the date on which the commitment of the Affiliated Funds and Regulated Funds is made will be the same even where the settlement date is not and ii the earliest settlement date and the latest settlement date of any Affiliated Fund or Regulated Fund participating in the transaction will occur within ten business days of each other.

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E. Holders 17. Under Condition 15, if an Adviser, its principals, or any person controlling, controlled by, or under common control with the Adviser or its 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 in the same percentages as the Regulated Funds other shareholders not including the Holders when voting on matters specified in the Condition.
Applicants believe that this Condition will ensure that the Independent Trustees will act independently in evaluating Co-Investment Transactions, because the ability of the Adviser or its principals to influence the Independent Trustees by a suggestion, explicit or implied, that the Independent Trustees can be removed will be limited significantly.
Applicants Legal Analysis 1. Section 17d of the Act and rule 17d1 under the Act prohibit participation by a registered investment company and an affiliated person in any joint enterprise or other joint arrangement or profit-sharing plan, as defined in the rule, without prior approval by the Commission by order upon application. Section 17d of the Act and rule 17d1 under the Act are applicable to Regulated Funds that are registered closed-end investment companies.
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.

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3. Co-Investment Transactions are prohibited by either or both of rule 17d 1 and section 57a4 without a prior exemptive order of the Commission to the extent that the Affiliated Funds and the Regulated Funds participating in such transactions fall within the category of persons described by rule 17d1 and/or section 57b, as applicable, vis-a-vis each participating Regulated Fund. Each of the participating Regulated Funds and Affiliated Funds may be deemed to be affiliated persons vis-a-vis a Regulated Fund within the meaning of section 2a3 by reason of common control because i Hamilton Lane manages, and may be deemed to control, the Existing Affiliated Funds and any other Affiliated Fund will be managed by, and may be deemed to be controlled by, an Adviser to Affiliated Funds; ii Hamilton Lane is the investment adviser to, and may be deemed to control, the Fund and an Adviser to the Regulated Funds will be the investment adviser to, and may be deemed to control, any Future Regulated Fund; and iii the Advisers to Affiliated Funds and the Advisers to Regulated Funds are under common control. Thus, each of the Affiliated Funds could be deemed to be a person related to the Regulated Funds in a manner described by section 57b and related to the other Regulated Funds in a manner described by rule 17d1; and therefore the prohibitions of rule 17d1 and section 57a4 would apply respectively to prohibit the Affiliated Funds from participating in Co-Investment Transactions with the Regulated Funds.
4. Because the Hamilton Lane Proprietary Accounts are controlled by the Adviser or its affiliates and, therefore, may be under common control with the Fund, any future Advisers, and any Future Regulated Funds, the Hamilton Lane Proprietary Accounts could be deemed to be persons related to the Regulated Funds or a company controlled by the Regulated Funds in a manner described by section 57b and also prohibited from participating in the co-investment program. Each Regulated Fund would also be related to each other Regulated Fund in a manner described by section 57b or rule 17d1, as applicable, and thus prohibited from participating in Co-Investment Transactions with each other.
5. In passing upon applications under rule 17d1, the Commission considers whether a 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
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or less advantageous than that of other participants.
6. Applicants state that in the absence of the requested relief, in many circumstances the Regulated Funds would be limited in their ability to participate in attractive and appropriate investment opportunities. Applicants state that, as required by rule 17d1b, the Conditions ensure that the terms on which Co-Investment Transactions may be made will be consistent with the participation of the Regulated Funds being on a basis that it is neither different from nor less advantageous than other participants, thus protecting the equity holders of any participant from being disadvantaged. Applicants further state that the Conditions ensure that all Co-Investment Transactions are reasonable and fair to the Regulated Funds and their shareholders and do not involve overreaching by any person concerned, including the Advisers.
Applicants state that the Regulated Funds participation in the CoInvestment Transactions in accordance with the Conditions will be consistent with the provisions, policies, and purposes of the Act and would be done in a manner 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. Identification and Referral of Potential Co-Investment Transactions a The Advisers will establish, maintain and implement policies and procedures reasonably designed to ensure that each Adviser is promptly notified of all Potential Co-Investment Transactions that fall within the thencurrent Objectives and Strategies and Board-Established Criteria of any Regulated Fund the Adviser manages.
b When an Adviser to a Regulated Fund is notified of a Potential CoInvestment Transaction under Condition 1a, the Adviser will make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Funds then-current circumstances.
2. Board Approvals of Co-Investment Transactions a If an 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 Advisers to be
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