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Federal Register / Vol. 86, No. 24 / Monday, February 8, 2021 / Notices
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Muzinich Proprietary Accounts may be deemed to be persons related to a Regulated Fund in a manner described by section 57b or section 17d in the case of Regulated Funds that are registered under the Act and rule 17d 1 from participating in the CoInvestment Program.
4. 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.
5. 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, for each Regulated Fund the Adviser manages, of all Potential CoInvestment Transactions that i an Adviser considers for any other Regulated Fund or Affiliated Fund and ii fall within the Regulated Funds then-current Objectives and Strategies and Board-Established Criteria.
b When an Adviser to a Regulated Fund is notified of a Potential CoInvestment Transaction under
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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 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 Advisers to be invested in the Potential Co-Investment Transaction by the participating Regulated Funds and any participating Affiliated Funds, collectively, exceeds the amount of the investment opportunity, the investment opportunity will be allocated among them pro rata based on the size of the Internal Orders, as described in section III.A.1.b. of the application. Each Adviser to a participating Regulated Fund will promptly notify and provide the Eligible Directors with information concerning the Affiliated Funds and Regulated Funds order sizes to assist the Eligible Directors with their review of the applicable Regulated Funds investments for compliance with these Conditions.
c After making the determinations required in Condition 1b above, each Adviser to a participating Regulated Fund will distribute written information concerning the Potential Co-Investment Transaction including the amount proposed to be invested by each participating Regulated Fund and each participating Affiliated Fund to the Eligible Directors of its participating Regulated Funds for their consideration. A Regulated Fund will enter into a Co-Investment Transaction with one or more other Regulated Funds or Affiliated Funds only if, prior to the Regulated Funds participation 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 Regulated Fund and its equity holders and do not involve overreaching in respect of the Regulated Fund or its equity holders on the part of any person concerned;
ii the transaction is consistent with:
A The interests of the Regulated Funds equity holders; and B the Regulated Funds then-current Objectives and Strategies;
iii the investment by any other Regulated Funds or Affiliated Funds would not disadvantage the Regulated Fund, and participation by the
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Regulated Fund would not be on a basis different from, or less advantageous than, that of any other Regulated Funds or Affiliated Funds participating in the transaction;
provided that the Required Majority shall not be prohibited from reaching the conclusions required by this Condition 2ciii if:
A The settlement date for another Regulated Fund or an Affiliated Fund in a Co-Investment Transaction is later than the settlement date for the Regulated Fund by no more than ten business days or earlier than the settlement date for the Regulated Fund by no more than ten business days, in either case, so long as: x The date on which the commitments of the Affiliated Funds and Regulated Funds are made is the same; and y 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; or B any other Regulated Fund or Affiliated Fund, but not the Regulated Fund itself, gains the right to nominate a director for election to a portfolio companys board of directors, the right to have a board observer or any similar right to participate in the governance or management of the portfolio company so long as: x The Eligible Directors will have the right to ratify the selection of such director or board observer, if any;
y the Adviser agrees to, and does, provide periodic reports to the Regulated Funds Board with respect to the actions of such director or the information received by such board observer or obtained through the exercise of any similar right to participate in the governance or management of the portfolio company;
and z any fees or other compensation that any other Regulated Fund or Affiliated Fund or any affiliated person of any other Regulated Fund or Affiliated Fund receives in connection with the right of one or more Regulated Funds or Affiliated Funds 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 any participating Affiliated Funds who may, in turn, share their portion with their affiliated persons and any participating Regulated Funds in accordance with the amount of each such partys investment; and iv the proposed investment by the Regulated Fund will not involve compensation, remuneration or a direct
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