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Federal Register / Vol. 86, No. 119 / Thursday, June 24, 2021 / Notices
EU is a relying adviser of FEAC and acts as the adviser to certain Existing Affiliated Funds. Certain accounts that the Existing Advisers and their direct and indirect wholly-owned subsidiaries may hold various financial assets in a principal capacity the Existing Proprietary Accounts and together with any Future Proprietary Account, the Proprietary Accounts.
6. The Existing Affiliated Funds are the investment funds identified in Appendix A to the application.
Applicants represent that each Existing Affiliated Fund is a separate and distinct legal entity and each would be an investment company but for section 3c1, 3c5C or 3c7 of the Act.
7. Applicants state that a Regulated Fund may, from time to time, form one or more Wholly-Owned Investment Subs.8 Such a subsidiary may be prohibited from investing in a CoInvestment Transaction with a Regulated Fund other than its parent or any Affiliated Fund because it would be a company controlled by its parent Regulated Fund for purposes of section 57a4 and rule 17d1. Applicants request that each Wholly-Owned Investment Sub be permitted to participate in Co-Investment Transactions in lieu of the Regulated Fund that owns it and that the WhollyOwned Investment Subs participation in any such transaction be treated, for purposes of the Order, as though the parent Regulated Fund were participating directly.
Applicants Representations A. Allocation Process
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8. Applicants represent that they have established processes for allocating initial investment opportunities, opportunities for subsequent investments in an issuer and dispositions of securities holdings reasonably designed to treat all clients fairly and equitably. Further, applicants represent that these processes will be extended and modified in a manner reasonably designed to ensure that the additional transactions permitted under the Order will both i be fair and equitable to the Regulated Funds and 8 Wholly-Owned Investment Sub means an entity i that is wholly-owned by a Regulated Fund or a Future Regulated Fund with such Regulated Fund at all times holding, beneficially and of record, 100% of the voting and economic interests;
ii whose sole business purpose is to hold one or more investments on behalf of such Regulated Fund; iii with respect to which such Regulated Funds Board has the sole authority to make all determinations with respect to the entitys participation under the Conditions; and iv that would be an investment company but for section 3c1 or 3c7 of the Act.

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the Affiliated Funds and ii comply with the Conditions.
9. Specifically, applicants state that the Advisers are organized and managed such that teams and investment committees Investment Teams and Investment Committees, responsible for evaluating investment opportunities and making investment decisions on behalf of clients are promptly notified of the opportunities. If the requested Order is granted, the Advisers will establish, maintain and implement policies and procedures reasonably designed to ensure that, when such opportunities arise, the Advisers to the relevant Regulated Funds are promptly notified and receive the same information about the opportunity as any other Advisers considering the opportunity for their clients. In particular, consistent with Condition 1, if a Potential CoInvestment Transaction falls within the then-current Objectives and Strategies 9
and any Board-Established Criteria 10 of a Regulated Fund, the policies and procedures will require that the relevant Investment Teams and Investment Committees responsible for that Regulated Fund receive sufficient information to allow the Regulated 9 Objectives and Strategies means i with respect to any Regulated Fund other than a BDC
Downstream Fund, its investment objectives and strategies, as described in its most current registration statement on Form N2, other current filings with the Commission under the Securities Act of 1933 the Securities Act or under the Securities Exchange Act of 1934, as amended, and its most current report to stockholders, and ii with respect to any BDC Downstream Fund, those investment objectives and strategies described in its disclosure documents including private placement memoranda and reports to equity holders and organizational documents including operating agreements.
10 Board-Established Criteria means criteria that the Board of a Regulated Fund may establish from time to time to describe the characteristics of Potential Co-Investment Transactions regarding which the Adviser to the Regulated Fund should be notified under Condition 1. The Board-Established Criteria will be consistent with the Regulated Funds Objectives and Strategies. If no BoardEstablished Criteria are in effect, then the Regulated Funds Adviser will be notified of all Potential CoInvestment Transactions that fall within the Regulated Funds then-current Objectives and Strategies. Board-Established Criteria will be objective and testable, meaning that they will be based on observable information, such as industry/
sector of the issuer, minimum EBITDA of the issuer, asset class of the investment opportunity or required commitment size, and not on characteristics that involve a discretionary assessment. The Adviser to the Regulated Fund may from time to time recommend criteria for the Boards consideration, but Board-Established Criteria will only become effective if approved by a majority of the Independent Directors. The Independent Directors of a Regulated Fund may at any time rescind, suspend or qualify its approval of any Board-Established Criteria, though applicants anticipate that, under normal circumstances, the Board would not modify these criteria more often than quarterly.

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Funds Adviser to make its independent determination and recommendations under the Conditions.
10. The Adviser to each applicable Regulated Fund will then make an independent determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Funds then-current circumstances. If the Adviser to a Regulated Fund deems the Regulated Funds participation in such Potential Co-Investment Transaction to be appropriate, then it will formulate a recommendation regarding the proposed order amount for the Regulated Fund.
11. Applicants state that, for each Regulated Fund and Affiliated Fund whose Adviser recommends participating in a Potential CoInvestment Transaction, the applicable Investment Committee will approve the investment and the investment amount.
Applicants state further that the applicable Investment Committee will notify the allocation committee that coordinates and facilitates an order submission process with a designated representative of each applicable investment committee of a Regulated Fund and Affiliated Fund to the extent such investment is consistent with its Board-Established Criteria and/or falls within its then-current Objectives and Strategies. Prior to the External Submission as defined below, each proposed order or investment amount may be reviewed and adjusted, in accordance with the applicable Advisers written allocation policies and procedures, by both the allocation committee and applicable investment committee of the Adviser.11 The order of a Regulated Fund or Affiliated Fund resulting from this process is referred to as its Internal Order. The Internal Order will be submitted for approval by the Required Majority of any participating Regulated Funds in accordance with the Conditions.12
11 The reason for any such adjustment to a proposed order amount will be documented in writing and preserved in the records of the Advisers.
12 Required Majority means a required majority, as defined in section 57o of the Act. 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.
In the case of a BDC Downstream Fund with a board of directors or the equivalent, the members that make up the Required Majority will be determined as if the BDC Downstream Fund were a BDC subject to section 57o. In the case of a BDC Downstream Fund with a transaction committee or advisory committee, the committee members that make up the Required Majority will be determined as if the BDC Downstream Fund were a BDC subject to section 57o and as if the committee members were directors of the fund.

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