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Federal Register / Vol. 86, No. 38 / Monday, March 1, 2021 / Notices
application; and iii the Board of the Regulated Fund 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 Funds 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 Funds best interests.
d Each Affiliated Fund and each Regulated Fund will bear its own expenses in connection with any such disposition.
8.a If any Affiliated 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 Fund in such investment is proportionate to its outstanding investments in the issuer immediately preceding the Follow-On Investment; and ii the Board of the Regulated Fund 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 Funds 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 Funds 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 Funds outstanding investments immediately preceding the Follow-On Investment; and ii the aggregate amount recommended by the 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 Funds in the
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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 partys capital available for investment in the asset class to be allocated, 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 CoInvestment Transaction for all purposes and subject to the other conditions set forth in the application.
9. The Non-Interested 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 and Affiliated Funds that the Regulated Fund considered but declined to participate in, so that the Non-Interested Directors may determine whether all investments made during the preceding quarter, including those investments which the Regulated Fund considered but declined to participate in, comply with the conditions of the Order. In addition, the Non-Interested 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 57f3 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 57f of the Act.
11. No Non-Interested 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 an Affiliated Fund.
12. The expenses, if any, associated with acquiring, holding or disposing of any securities acquired in a CoInvestment 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 respective investment advisory agreements with Affiliated Funds and the Regulated Funds, be shared by the Regulated Funds and the Affiliated Funds in proportion to the relative amounts of the securities held or to be acquired or disposed of, as the case may be.

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13. Any transaction fee 14 including break-up or commitment fees but excluding brokers fees contemplated by section 17e or 57k of the Act, as applicable, received in connection with a Co-Investment Transaction will be distributed to the participating Regulated Funds and Affiliated 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 such Adviser at a bank or banks having the qualifications prescribed in section 26a1 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 Affiliated Funds based on the amounts they invest in such Co-Investment Transaction. None of the Affiliated Funds, the Advisers, the other Regulated Funds or any affiliated person of the Regulated Funds or Affiliated 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 Funds, the pro rata transaction fees described above and fees or other compensation described in condition 2ciiiC; and b in the case of an Adviser, investment advisory fees paid in accordance with the agreement between the Adviser and the Regulated Fund or Affiliated Fund.
14. If the Holders own in the aggregate more than 25 percent of the Shares of a Regulated Fund, then the Holders will vote such Shares in the same percentages as the Regulated Funds other shareholders not including the Holders when voting on 1 the election of directors; 2 the removal of one or more directors; or 3 any other matter under either the Act or applicable State law affecting the Boards composition, size or manner of election.
15. Each Regulated Funds chief compliance officer, as defined in rule 38a1a4 under the Act, will prepare an annual report for its Board each year that evaluates and documents the basis of that evaluation the Regulated Funds compliance with the terms and conditions of the application and the procedures established to achieve such compliance.
14 Applicants are not requesting and the staff is not providing any relief for transaction fees received in connection with any Co-Investment Transaction.

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