
[Federal Register Volume 80, Number 149 (Tuesday, August 4, 2015)]
[Notices]
[Pages 46365-46368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-19018]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 31728; 812-14337]


AMG Pantheon Private Equity Fund, LLC, et al.; Notice of 
Application

July 29, 2015.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice of an application under section 6(c) of the Investment 
Company Act of 1940 (the ``Act'') for an exemption from sections 18(c) 
and 18(i) of the Act and for an order pursuant to section 17(d) of the 
Act and rule 17d-1 under the Act.

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SUMMARY OF APPLICATION:  Applicants request an order to permit certain 
registered closed-end management investment companies to issue multiple 
classes of units of beneficial interest (``Units'') with varying sales 
loads and to impose asset-based distribution and/or service fees, and 
contingent deferred sales loads (``CDSCs'').

APPLICANTS:  AMG Pantheon Private Equity Fund, LLC (the ``Feeder 
Fund''), AMG Pantheon Private Equity Master Fund, LLC (the ``Master 
Fund''), Pantheon Ventures (US) LP (the ``Adviser'') and AMG 
Distributors, Inc. (the ``Placement Agent'').

FILING DATES:  The application was filed on July 25, 2014, and amended 
on December 30, 2014 and May 13, 2015.

HEARING OR NOTIFICATION OF HEARING:  An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by writing to the Commission's 
Secretary and serving applicants with a copy of the request, personally 
or by mail. Hearing requests should be received by the Commission by 
5:30 p.m. on August 21, 2015, and should be accompanied by proof of 
service on the applicants, in the form of an affidavit, or, for 
lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, 
hearing requests should state

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the nature of the writer's interest, any facts bearing upon the 
desirability of a hearing on the matter, the reason for the request, 
and the issues contested. Persons who wish to be notified of a hearing 
may request notification by writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street NE., Washington, DC 20549-1090. Applicants, c/o Mark Duggan, AMG 
Funds LLC, 800 Connecticut Avenue, Norwalk, Connecticut 06854.

FOR FURTHER INFORMATION CONTACT: Barbara T. Heussler, Senior Counsel, 
at (202) 551-6990 or Mary Kay Frech, Branch Chief, at (202) 551-6821 
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's Web site by searching for the file number, or an applicant 
using the Company name box, at http://www.sec.gov/search/search.htm or 
by calling (202) 551-8090.

Applicants' Representations

    1. The Feeder Fund and the Master Fund, each organized as a 
Delaware limited liability company, are registered under the Act as 
closed-end, non-diversified management investment companies. The Feeder 
Fund intends to invest substantially all of its assets in the Master 
Fund in reliance on section 12(d)(1)(E) of the Act. The Master Fund 
expects to pursue its investment objective by investing primarily in 
private equity investments. To maintain liquidity, the Master Fund will 
invest in exchange-traded funds (``ETFs'') designed to track equity 
indexes and, to a lesser extent, in cash and short-term securities. In 
addition, the Master Fund may use derivative instruments, primarily 
equity options and swaps, for hedging purposes to help protect the 
value of its ETF investments.
    2. The Adviser, a Delaware limited partnership, is registered as an 
investment adviser under the Investment Advisers Act of 1940 and serves 
as investment adviser to the Feeder Fund and the Master Fund. The 
Placement Agent, a broker-dealer registered under the Securities 
Exchange Act of 1934 (``1934 Act''), acts as the principal underwriter 
of the Feeder Fund. Affiliated Managers Group, Inc., a publicly-traded 
company, indirectly owns a majority of the interests of the Adviser and 
indirectly owns 100% of the shares of the Placement Agent. The 
Placement Agent is under common control with the Adviser and is an 
affiliated person, as defined in section 2(a)(3) of the Act, of the 
Adviser.
    3. The Feeder Fund offers its Units \1\ in private placement 
transactions on a continuous basis at net asset value per unit, as 
described in the Feeder Fund's confidential memorandum (``Confidential 
Memorandum'').\2\ Units of the Feeder Fund are not offered or traded in 
a secondary market and are not listed on any securities exchange or 
quoted on any quotation medium. Applicants do not expect that any 
secondary market will develop for the Units.
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    \1\ ``Units'' includes any other equivalent designation of a 
proportionate ownership interest of the Feeder Fund (or any other 
registered closed-end management investment company relying on the 
requested order).
    \2\ The Units are currently only being sold and will only be 
sold to persons who are ``accredited investors,'' as defined in 
Regulation D under the Securities Act of 1933 (``Securities Act''). 
The Feeder Fund reserves the right to conduct a public offering of 
the Units under the Securities Act in the future.
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    4. The Feeder Fund currently offers a single class of Units (the 
``Advisory Class Units'') at net asset value subject to an asset-based 
distribution and/or service fee (``Distribution and/or Service Fee'') 
pursuant to a distribution and service plan adopted in conformity with 
rule 12b-1 under the Act (a ``Distribution and Service Plan''). The 
Feeder Fund proposes to offer continuously two additional classes of 
Units, each having its own expense structure (``Transactional Class 
Units'' and ``Institutional Class Units''), in addition to any 
additional classes of Units that may be offered in the future. The 
Transactional Class Units would be offered at net asset value and may 
(but would not necessarily) be subject to a front-end sales load and an 
annual asset-based Distribution and/or Service Fee. The Institutional 
Class Units would be offered at net asset value, and it is anticipated 
that they would not be subject to a front-end sales load or an annual 
asset-based Distribution and/or Service Fee. All the classes would be 
subject to minimum purchase requirements.
    5. In order to provide a limited degree of liquidity to 
unitholders, the Feeder Fund may from time to time offer to repurchase 
Units at their then current net asset value pursuant to written tenders 
by unitholders in accordance with rule 13e-4 under the 1934 Act.\3\ 
Repurchases will be made at such times, in such amounts and on such 
terms as may be determined by the Feeder Fund's board of directors 
(``Board''), in its sole discretion.\4\ The Adviser anticipates that it 
will recommend to the Board that the Feeder Fund repurchase Units from 
investors on a quarterly basis.
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    \3\ Likewise, the Master Fund's repurchase offers are conducted 
pursuant to rule 13e-4 under the 1934 Act.
    \4\ Units are subject to an early withdrawal fee at a rate of 2% 
of the aggregate net asset value of the unitholder's Units 
repurchased by the Feeder Fund (the ``Early Withdrawal Fee'') if the 
interval between the date of purchase of the Units and the valuation 
date with respect to the repurchase of those Units is less than one 
year. The Early Withdrawal Fee will equally apply to all classes of 
Units of the Feeder Fund, consistent with section 18 of the Act and 
rule 18f-3 under the Act. To the extent the Feeder Fund determines 
to waive, impose scheduled variations of, or eliminate the Early 
Withdrawal Fee, it will comply with the requirements of rule 22d-1 
under the Act as if the Early Withdrawal Fee were a CDSC and as if 
the Feeder Fund were an open-end investment company and the Feeder 
Fund's waiver, scheduled variation or elimination of the Early 
Withdrawal Fee will apply uniformly to all unitholders of the Feeder 
Fund regardless of class.
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    6. Applicants request that the order also apply to any other 
registered closed-end management investment company that conducts a 
continuous offering of its Units, existing now or in the future, for 
which the Adviser or the Placement Agent or any entity controlling, 
controlled by, or under common control with the Adviser or the 
Placement Agent acts as investment adviser or principal underwriter, 
and which provides periodic liquidity with respect to its Units through 
tender offers conducted in compliance with rule 13e-4 under the 1934 
Act.\5\
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    \5\ The Feeder Fund and any other investment company relying on 
the requested relief will do so in a manner consistent with the 
terms and conditions of the application. Applicants represent that 
any person presently intending to rely on the requested relief is 
listed as an applicant.
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    7. Applicants represent that the asset-based Distribution and/or 
Service Fees will comply with the provisions of rule 2830(d) of the 
Conduct Rules of the National Association of Securities Dealers, Inc. 
(``NASD Conduct Rule 2830'') as if that rule applied to the Feeder 
Fund.\6\ Applicants also represent that the Feeder Fund will disclose 
in its Confidential Memorandum or prospectus, the fees, expenses and 
other characteristics of each class of Units offered for sale by the 
Confidential Memorandum or prospectus, as is required for open-end, 
multiple class funds under Form N-1A. The Feeder Fund will disclose 
fund expenses borne by unitholders during the reporting period in 
shareholder reports and describe in its Confidential Memorandum or 
prospectus any arrangements that result in breakpoints

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in or elimination of sales loads.\7\ The Feeder Fund and the Placement 
Agent will also comply with any requirements that may be adopted by the 
Commission or FINRA regarding disclosure at the point of sale and in 
transaction confirmations about the costs and conflicts of interest 
arising out of the distribution of open-end investment company shares, 
and regarding prospectus disclosure of sales loads and revenue sharing 
arrangements as if those requirements applied to the Feeder Fund and 
the Placement Agent.\8\ In addition, applicants will comply with 
applicable enhanced fee disclosure requirements for funds of funds.\9\
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    \6\ Any references to NASD Conduct Rule 2830 include any 
successor or replacement rule to NASD Conduct Rule 2830 that may be 
adopted by the Financial Industry Regulatory Authority (``FINRA'').
    \7\ See Shareholder Reports and Quarterly Portfolio Disclosure 
of Registered Management Investment Companies, Investment Company 
Act Release No. 26372 (Feb. 27, 2004) (adopting release); and 
Disclosure of Breakpoint Discounts by Mutual Funds, Investment 
Company Act Release No. 26464 (June 7, 2004) (adopting release).
    \8\ See Confirmation Requirements and Point of Sale Disclosure 
Requirements for Transactions in Certain Mutual Funds and Other 
Securities, and Other Confirmation Requirement Amendments, and 
Amendments to the Registration Form for Mutual Funds, Investment 
Company Act Release No. 26341 (Jan. 29, 2004) (proposing release).
    \9\ Fund of Funds Investments, Investment Company Act Release 
Nos. 26198 (Oct. 1, 2003) (proposing release) and 27399 (Jun. 20, 
2006) (adopting release). See also Rules 12d1-1, et seq. under the 
Act.
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    8. The Feeder Fund will allocate all expenses incurred by it among 
the various classes of Units based on the respective net assets of the 
Feeder Fund attributable to each such class, except that the net asset 
value and expenses of each class will reflect the expenses associated 
with the Distribution and Service Plan of that class (if any), 
shareholder service fees attributable to a particular class, and any 
other incremental expenses of that class. Expenses of the Feeder Fund, 
allocated to a particular class of the Feeder Fund's Units, will be 
borne on a pro rata basis by each outstanding Unit of that class. 
Applicants state that the Feeder Fund will comply with the provisions 
of rule 18f-3 under the Act as if it were an open-end investment 
company.
    9. The Feeder Fund may offer an exchange privilege or conversion 
feature on certain of its future classes of Units, and any such 
privilege or feature introduced in the future will comply with rule 
11a-1, rule 11a-3, and rule18f-3 under the Act as if the Feeder Fund 
were an open-end investment company.
    10. In the event the Feeder Fund imposes a CDSC, the applicants 
will comply with the provisions of rule 6c-10 under the Act, as if that 
rule applied to closed-end management investment companies. With 
respect to any waiver of, scheduled variation in, or elimination of the 
CDSC, the Feeder Fund will comply with rule 22d-1 under the Act and 
apply the CDSC uniformly to all unitholders of a given class.

Applicants' Legal Analysis

Multiple Classes of Shares

    1. Section 18(c) of the Act provides, in relevant part, that a 
closed-end investment company may not issue or sell any senior security 
if, immediately thereafter, the company has outstanding more than one 
class of senior security. Applicants state that the creation of 
multiple classes of Units of the Feeder Fund may be prohibited by 
section 18(c).
    2. Section 18(i) of the Act provides that each share of stock 
issued by a registered management investment company will be a voting 
stock and have equal voting rights with every other outstanding voting 
stock. Applicants state that permitting multiple classes of Units of 
the Feeder Fund may violate section 18(i) of the Act because each class 
would be entitled to exclusive voting rights with respect to matters 
solely related to that class.
    3. Section 6(c) of the Act provides that the Commission may exempt 
any person, security or transaction or any class or classes of persons, 
securities or transactions from any provision of the Act, or from any 
rule under the Act, if and to the extent such exemption is necessary or 
appropriate in the public interest and consistent with the protection 
of investors and the purposes fairly intended by the policy and 
provisions of the Act. Applicants request an exemption under section 
6(c) from sections 18(c) and 18(i) to permit the Feeder Fund to issue 
multiple classes of Units.\10\
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    \10\ The Master Fund will not issue multiple classes of its 
units and is an applicant because of the master-feeder structure.
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    4. Applicants submit that the proposed allocation of expenses and 
voting rights among multiple classes is equitable and will not 
discriminate against any group or class of unitholders. Applicants 
submit that the proposed arrangements would permit the Feeder Fund to 
facilitate the distribution of Units and provide investors with a 
broader choice of unitholder options. Applicants assert that the 
proposed closed-end investment company multiple class structure does 
not raise the concerns underlying section 18 of the Act to any greater 
degree than open-end investment companies' multiple class structures 
that are permitted by rule 18f-3 under the Act. Applicants state that 
the Feeder Fund will comply with the provisions of rule 18f-3 as if it 
were an open-end investment company.

CDSCs

    5. Applicants believe that the requested relief meets the standards 
of section 6(c) of the Act. Rule 6c-10 under the Act permits open-end 
investment companies to impose CDSCs, subject to certain conditions. 
Applicants state that any CDSC imposed by the Feeder Fund will comply 
with rule 6c-10 under the Act as if the rule were applicable to closed-
end investment companies. The Feeder Fund also will disclose CDSCs in 
accordance with the requirements of Form N-1A concerning CDSCs as if 
the Feeder Fund were an open-end investment company. Applicants further 
state that the Feeder Fund will apply the CDSC (and any waivers or 
scheduled variations of the CDSC) uniformly to all unitholders of a 
given class and consistently with the requirements of rule 22d-1 under 
the Act.

Asset-Based Distribution and/or Service Fees

    6. Section 17(d) of the Act and rule 17d-1 under the Act prohibit 
an affiliated person of a registered investment company or an 
affiliated person of such person, acting as principal, from 
participating in or effecting any transaction in connection with any 
joint enterprise or joint arrangement in which the investment company 
participates unless the Commission issues an order permitting the 
transaction. In reviewing applications submitted under section 17(d) 
and rule 17d-1, the Commission considers whether the participation of 
the investment company in a joint enterprise or joint arrangement is 
consistent with the provisions, policies and purposes of the Act, and 
the extent to which the participation is on a basis different from or 
less advantageous than that of other participants.
    7. Rule 17d-3 under the Act provides an exemption from section 
17(d) and rule 17d-1 to permit open-end investment companies to enter 
into distribution arrangements pursuant to rule 12b-1 under the Act. 
Applicants request an order under section 17(d) and rule 17d-1 under 
the Act to permit the Feeder Fund to impose asset-based Distribution 
and/or Service Fees. Applicants have agreed to comply with rules 12b-1 
and 17d-3 as if those rules applied to closed-end investment companies.

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Applicants' Condition

    The Applicants agree that any order granting the requested relief 
will be subject to the following condition:
    Applicants will comply with the provisions of rules 6c-10, 12b-1, 
17d-3, 18f-3, 22d-1, and, where applicable, 11a-3 under the Act, as 
amended from time to time or replaced, as if those rules applied to 
closed-end management investment companies, and will comply with the 
NASD Conduct Rule 2830, as amended from time to time, as if that rule 
applied to all closed-end management investment companies.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-19018 Filed 8-3-15; 8:45 am]
BILLING CODE 8011-01-P


