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Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices the other participating Regulated Funds and Affiliated 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 participants capital available for investment in the asset class being allocated, 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 partys available capital to assist the Eligible Directors with their review of the Regulated Funds investments for compliance with these allocation procedures.
c After making the determinations required in conditions 1 and 2a, 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 Affiliated Fund to the Eligible Directors of each participating Regulated Fund for their consideration.
A Regulated Fund will co-invest with one or more other Regulated Funds and/
or one or more Affiliated Funds only if, prior to the Regulated Funds participation in the Potential CoInvestment Transaction, a Required Majority concludes that:
i The terms of the Potential CoInvestment 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 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 Regulated Fund would not be on a basis different from or less advantageous than that of other Regulated Funds or Affiliated Funds; provided that, if 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 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 shall not be interpreted to prohibit the Required Majority from
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reaching the conclusions required by this condition 2ciii, if:
A The Eligible Directors will have the right to ratify the selection of such director or board observer, if any;
B the applicable 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 C any fees or other compensation that any Affiliated Fund or any Regulated Fund or any affiliated person of any Affiliated Fund or any Regulated Fund receives in connection with the right of an Affiliated Fund or a 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 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 partys investment; and iv the proposed investment by the Regulated Fund will not benefit the Advisers, the Affiliated 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 17e or 57k 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 2ciiiC.
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 the Board of each Regulated Fund, on a quarterly basis, a record of all investments in Potential Co-Investment Transactions made by any of the other Regulated Funds or Affiliated Funds during the preceding quarter that fell within the Regulated Funds thencurrent 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 Board pursuant to this condition will be kept for the life of the Regulated Fund and at least two years thereafter, and will be
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subject to examination by the Commission and its staff.
5. Except for Follow-On Investments made in accordance with condition 8,13
a Regulated Fund will not invest in reliance on the Order in any issuer in which another Regulated Fund, Affiliated Fund, or any affiliated person of another Regulated Fund or Affiliated Fund is an existing investor.
6. A Regulated Fund will not participate in any Potential CoInvestment 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 Fund. The grant to an Affiliated Fund or another Regulated Fund, but not the Regulated Fund, of the right to nominate a director for election to a portfolio companys 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 2ciiiA, B
and C are met.
7.a If any Affiliated Fund or any Regulated Fund elects to sell, exchange or otherwise dispose of an interest in a security that was acquired in a CoInvestment 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 Funds and any other Regulated Fund.
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 Fund in such disposition is proportionate to its outstanding investments in the issuer immediately preceding the disposition; ii the Board of the Regulated Fund has approved as being in the best interests of the Regulated Fund the ability to participate in such dispositions on a pro rata basis as described in greater detail in the 13 This exception applies only to Follow-On Investments by a Regulated Fund in issuers in which that Regulated Fund already holds investments.

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