No.
812-14374
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FIRST AMENDED AND RESTATED APPLICATION FOR
AN ORDER UNDER SECTIONS 17(d) AND 57(i) OF THE INVESTMENT COMPANY ACT OF 1940 AND RULE 17d-1 UNDER THE INVESTMENT COMPANY ACT OF
1940 PERMITTING CERTAIN JOINT TRANSACTIONS OTHERWISE PROHIBITED BY SECTIONS 17(d) AND 57(a)(4) OF THE INVESTMENT COMPANY ACT OF
1940 AND RULE 17d-1.
ALCENTRA CAPITAL CORPORATION
Alcentra
Middle Market Fund IV, L.P.
ALCENTRA NY, LLC
ALCENTRA LIMITED
ALCENTRA BDC EQUITY HOLDINGS, LLC
BNY MELLON ALCENTRA MULTI-STRATEGY CREDIT FUND, INC.
THE DREYFUS CORPORATION
200 Park Avenue, 7th Floor
New York, NY 10166
(212) 922-8240
All Communications, Notices and Orders to:
| Paul J. Echausse, Esq. |
Jeff S. Prusnofsky, Esq. |
|
Alcentra Capital Corporation
President and Chief Executive Officer |
BNY Mellon Alcentra
Multi-Strategy Credit Fund, Inc. |
| 200 Park Avenue, 7th Floor |
Vice President |
| New York, New York 10166 |
200 Park Avenue |
| (212) 9228240 |
New York, New York 10166 |
| |
(212) 922-6796 |
Copies to:
| Steven B. Boehm, Esq. |
David Stephens, Esq. |
| Harry S. Pangas, Esq. |
Nicole M. Runyan, Esq. |
| Sutherland Asbill & Brennan LLP |
Stroock & Stroock & Lavan LLP |
| 700 Sixth Street, N.W. |
180 Maiden Lane |
| Washington, D.C. 20001 |
New York, New York 10038 |
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
| In the Matter of: |
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FIRST AMENDED AND RESTATED APPLICATION FOR AN ORDER UNDER SECTIONS
17(d) AND 57(i) OF THE INVESTMENT COMPANY ACT OF 1940 AND RULE 17d-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 PERMITTING CERTAIN
JOINT TRANSACTIONS OTHERWISE PROHIBITED BY SECTIONS 17(d) AND 57(a)(4) OF THE INVESTMENT COMPANY ACT OF 1940 AND RULE 17d-1.
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| ALCENTRA CAPITAL CORPORATION |
) |
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| Alcentra Middle Market Fund IV, L.P. |
) |
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| ALCENTRA NY, LLC |
) |
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| ALCENTRA LIMITED |
) |
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| ALCENTRA BDC EQUITY HOLDINGS, LLC |
) |
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| BNY MELLON ALCENTRA MULTI-STRATEGY |
) |
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| CREDIT FUND, INC. |
) |
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| THE DREYFUS CORPORATION |
) |
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| |
) |
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| Paul J. Echausse, Esq. |
) |
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| President and Chief Executive Officer |
) |
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| Alcentra Capital Corp |
) |
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| 200 Park Avenue, 7th Floor |
) |
|
| New York, New York 10166 |
) |
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| |
) |
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| Jeff S. Prusnofsky, Esq. |
) |
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| Vice President |
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| BNY Mellon Alcentra Multi-Strategy |
) |
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| Credit Fund, Inc. |
) |
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| 200 Park Avenue |
) |
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| New York, New York 10166 |
) |
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) |
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| File No. 812-14347 |
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| Investment Company Act of 1940 |
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INTRODUCTION
The following entities hereby apply for
an order (the “Order”) of the U.S. Securities and Exchange Commission (the “Commission”)
pursuant to Sections 17(d) and 57(i) of the Investment Company Act of 1940, as amended (the “Act”),1
and Rule 17d-1 thereunder,2 authorizing certain joint
transactions that may otherwise be prohibited by either or both of Sections 17(d) and 57(a)(4) of the Act:
| • | Alcentra Capital Corporation (the “Company”), |
1
Unless otherwise indicated, all section references herein are to the Act.
2 Unless otherwise indicated, all
rule references herein are to rules under the Act.
| • | BNY Mellon Alcentra Multi-Strategy Credit Fund, Inc.
(“BAMSCF,” and together with the Company, the “Existing Regulated Funds”), |
| • | Alcentra BDC Equity Holdings, LLC (the “Subsidiary”), |
| • | Alcentra Middle Market Fund IV, L.P. (the “Existing
Co-Investment Affiliate”), |
| • | Alcentra NY, LLC (“Alcentra NY”),
|
| • | Alcentra
Limited (together with Alcentra NY, the “Alcentra Advisers”), and |
| • | The
Dreyfus Corporation (“Dreyfus,” and together with the Existing
Regulated Funds, the Subsidiary, the Existing Co-Investment Affiliate, and the Alcentra
Advisers, the “Applicants”). |
In particular, the relief requested in
this application (the “Application”) would allow a Regulated Fund3 (or a Wholly-Owned Investment Sub, as defined below) and one or more other Regulated Funds (or a
Wholly-Owned Investment Sub) and/or one or more Co-Investment Affiliates4 to participate in the same investment opportunities through a proposed co-investment program (the “Co-Investment
Program”) where such participation would otherwise be prohibited by Sections 17(d) and 57(a)(4) and Rule 17d-1.
As used herein, “Co-Investment Transaction” means any transaction in which a Regulated Fund (or a
Wholly-Owned Investment Sub) participated together with one or more other Regulated Funds (or a Wholly-Owned Investment Sub)
and/or one or more Co-Investment Affiliates in reliance on the Order. “Potential
Co-Investment Transaction” means any investment opportunity in which a Regulated Fund (or a Wholly-Owned
Investment Sub) could not participate together with one or more other Regulated Funds (or a Wholly-Owned Investment Sub)
and/or one or more Co-Investment Affiliates without obtaining and relying on the Order.
“Wholly-Owned Investment Sub”
means an entity (i) that is wholly-owned by a Regulated Fund (with the 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 the Regulated Fund (and, in the case of any SBIC Subsidiaries, to maintain a license under the SBA Act and issue debentures
guaranteed by the SBA); (iii) with respect to which the Board of a Regulated Fund5
has the sole authority to make all determinations with respect to the Wholly-Owned Investment Sub’s participation
under the conditions to this Application; and (iv) that would be an investment company but for Section 3(c)(1) or 3(c)(7) of the
Act. The Subsidiary is a Wholly-Owned Investment Sub, and any future subsidiaries of the Regulated Funds that participate in the
Co-Investment Program will be Wholly-Owned Investment Subs.
3
The term “Regulated Funds” means the Existing Regulated Funds and any future closed-end
investment companies that (a) are registered under the Act or have elected to be regulated as a business development company (“BDC”)
under the Act, (b) will be advised by an Adviser, and (c) that intend to participate in the Co-Investment Program. The term “Adviser”
means (a) Alcentra NY or Alcentra Limited and (b) any other existing or future investment adviser that controls, is controlled
by or is under common control with Alcentra NY or Alcentra Limited, and is registered as an investment adviser under the Investment
Advisers Act of 1940 (the “Advisers Act”), including Dreyfus. The Alcentra Advisers and Dreyfus are direct
or indirect wholly-owned subsidiaries of The Bank of New York Mellon Corporation (“BNY Mellon”). All
references herein to the term “Adviser” include successors-in-interest to the Adviser. A successor-in-interest is
limited to any entity resulting from a name change, a reorganization of the Adviser into another jurisdiction or a change in the
type of business organization.
4 The term “Co-Investment
Affiliates” means the Existing Co-Investment Affiliate and any Future Co-Investment Affiliate. “Future
Co-Investment Affiliate” means any entity (i) whose investment adviser is an Adviser, (ii) that would be an investment
company but for Section 3(c)(1) or 3(c)(7) of the Act and (iii) that intends to participate in the Co-Investment Program.
5 The term “Board”
means, with respect to any Regulated Fund, the board of directors of that Regulated Fund (including the “Alcentra
Board” (as defined below) and the “BAMSCF Board” (as defined below)).
A Regulated Fund may, from time to time,
form one or more Wholly-Owned Investment Subs. Such a subsidiary would be prohibited from investing in a Co-Investment Transaction
with any Co-Investment Affiliate or another Regulated Fund because it would be a company controlled by the Regulated Fund for purposes
of Sections 17(d) and 57(a)(4) and Rule 17d-l. Applicants request that a Wholly-Owned Investment Sub be permitted to participate
in Co-Investment Transactions in lieu of the Regulated Fund that owns it and that the Wholly-Owned Investment Sub’s participation
in any such transaction be treated, for purposes of the Order, as though the Regulated Fund were participating directly. Applicants
represent that this treatment is justified because a Wholly-Owned Investment Sub would have no purpose other than serving as a
holding vehicle for the Regulated Fund’s investments and, therefore, no conflicts of interest could arise between the Regulated
Fund and the Wholly-Owned Investment Subs. The Board would make all relevant determinations under the conditions with regard to
a Wholly-Owned Investment Sub’s participation in a Co-Investment Transaction, and the Board would be informed of, and take
into consideration, any proposed use of a Wholly-Owned Investment Sub in the Regulated Fund’s place. If a Regulated Fund
proposes to participate in the same Co-Investment Transaction with any of its Wholly-Owned Investment Subs, the Board will also
be informed of, and take into consideration, the relative participation of the Regulated Fund and the Wholly-Owned Investment Sub.
All existing entities that currently intend
to rely on the Order have been named as Applicants. Any other existing or future entity that relies on the Order in the future
will comply with the terms and conditions of the Application.
The Company was organized as a corporation
under the General Corporate Laws of the State of Maryland on June 6, 2013 for the purpose of operating as an externally-managed,
non-diversified, closed-end management investment company that has elected to be regulated as a business development company (“BDC”)
under the 1940 Act.6 In connection with its initial public
offering of common stock (the “IPO”), on March 12, 2014, the Company filed a registration statement
on Form N-2, as subsequently amended and supplemented. On May 8, 2014, the Company filed a notice under Form N-54A to be subject
to Sections 55 through 65 of the 1940 Act and filed a registration statement on Form 8-A to register its common stock under Section
12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”). Accordingly, the Company is
subject to the periodic reporting requirements under Section 13(a) of the 1934 Act. In addition, on May 8, 2014, the SEC declared
the Company’s registration statement on Form N-2 effective. The Company’s common stock is listed on the NASDAQ Global
Select Market under the symbol “ABDC”. The Company’s principal place of business is 200 Park Avenue, 7th Floor,
New York, New York 10166.
6
Section 2(a)(48) defines a BDC to be any closed-end investment company that operates for the purpose of making investments in securities
described in Section 55(a)(1) through 55(a)(3) and makes available significant managerial assistance with respect to the issuers
of such securities.
The Subsidiary is a Wholly-Owned Investment
Sub, as defined above, the sole business purpose of which is to hold one or more investments on behalf of the Company. As a result,
the Subsidiary does not have a specific investment objective and strategy. Because the Subsidiary is a wholly-owned, consolidated
subsidiary of the Company, and the Company’s investment adviser is Alcentra NY, Alcentra NY also manages the assets of the
Subsidiary. The Subsidiary is a Delaware entity.
The Company intends to make an election
to be treated for tax purposes as a regulated investment company (“RIC”) under the Internal Revenue Code
of 1986, as amended (the “Code”), and intends to continue to make such election in the future.
The Company’s investment objective
is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies
in the form of subordinated debt and, to a lesser extent, senior debt and minority equity investments. Investment decisions for
the Company are made by Alcentra NY in accordance with the policies approved by the Board.
The Company’s business and affairs
are managed under the direction of a board of directors (the “Alcentra Board”). The Alcentra Board currently
consists of five members, three of whom are not “interested persons” of the Company as defined in Section 2(a)(19)
(the “Independent Directors”).7
No Independent Director will have any direct or indirect financial interest in any Co-Investment Transaction or any interest in
any portfolio company, other than through an interest (if any) in the securities of the Company.
In May, 2014, the Company priced its initial
public offering, selling 7,416,666 shares, including the underwriters’ over-allotment, at a price of $15.00 per share with
net proceeds of approximately $107.9 million. Immediately prior to the Offering, BNY Mellon-Alcentra Mezzanine III, L.P. (“Fund
III”) sold all of its assets other than its investment in the shares of common stock and warrants of GTT Communications
(the “Fund III Acquired Assets”) to the Company for $64.4 million in cash and $91.5 million in shares
of the Company’s common stock. Concurrent with the Company’s acquisition of the Fund III Acquired Assets, the Company
also purchased for $29 million in cash certain additional investments (the “Warehouse Portfolio”) from
BNY Alcentra Group Holdings, Inc. (the “Alcentra Group”). The Warehouse Portfolio consisted of approximately
$29 million in debt investments.
7
The term “Independent Directors” as used in this application, interchangeably refers to the directors
of a Regulated Fund who are not “interested persons” of the Regulated Fund as defined in Section 2(a)(19) of the Act.
No Independent Director of a Regulated Fund will have a financial interest in any Co-Investment Transaction, other than indirectly
through share ownership in one of the Regulated Funds.
The Company entered into a senior secured
term loan agreement (the “Bridge Facility”) with ING Capital LLC as lender that it used to fund the purchase
of the Warehouse Portfolio and to fund the cash portion of the consideration paid to Fund III. In May 2014, the Company used $94.2
million of the proceeds from the Offering to repay the Bridge Facility in full.
The Company has entered into an investment
advisory agreement with Alcentra NY and an administrative agreement with State Street Bank and Trust Company.
| B. | The Existing Co-Investment Affiliate |
Alcentra Middle Market Fund IV, L.P. was
formed as a Delaware limited partnership on September 16, 2014. The Existing Co-Investment Affiliate’s investment objective
is to generate both current income and capital appreciation primarily by making direct investments in lower middle-market companies
in the form of senior debt, unitranche debt, subordinated debt and minority equity investments. The Existing Co-Investment Affiliate
currently has no investments. The Existing Co-Investment Affiliate is managed by Alcentra NY.
In reliance on the exclusion from the definition
of “investment company” provided by Section 3(c)(1) or 3(c)(7) of the 1940 Act, none of the Co-Investment Affiliates
will be registered under the 1940 Act.
BAMSCF was organized as a corporation under
the General Corporate Laws of the State of Maryland on December 11, 2014. BAMSCF is a non-diversified, closed-end management investment
company registered under the 1940 Act. In preparation for its initial offering of common stock (which has not occurred as of the
date hereof), on December 16, 2014, BAMSCF filed a registration statement on Form N-2. BAMSCF’s investment objective is to
seek total return consisting of capital appreciation and income. Under normal market conditions, BAMSCF will invest at least 80%
of its managed assets in credit instruments and other investments with similar economic characteristics. BAMSCF seeks to achieve
its investment objective by investing in credit instruments, including, but not limited to: first- and second-lien senior secured
loans; senior unsecured, mezzanine and other collateralized and uncollateralized subordinated loans; unitranche loans; corporate
debt obligations other than loans; and structured products, including collateralized bond, loan and other debt obligations, structured
notes and credit-linked notes. Shares of BAMSCF’s common stock will be offered only to “qualified clients” (as
defined in Rule 205-3 under the Advisers Act), and will not be listed for trading on any securities exchange. BAMSCF's principal
place of business is 200 Park Avenue, New York, New York 10166.
Prior to the commencement of BAMSCF’s
operations, BAMSCF and Dreyfus intend to enter into an investment management agreement pursuant to which Dreyfus will furnish a
continuous investment program for BAMSCF’s portfolio and generally manage BAMSCF’s investments in accordance with the
stated policies of BAMSCF, subject to the general supervision of the board of directors of BAMSCF (the “BAMSCF Board”).
Dreyfus intends to engage the Alcentra Advisers to serve as BAMSCF’s sub-advisers pursuant to separate sub-advisory agreements.
Dreyfus also will maintain office facilities on behalf of BAMSCF, and furnish statistical and research data, clerical help, accounting,
data processing, bookkeeping and internal auditing and certain other required services to BAMSCF. Dreyfus also will perform certain
other administrative services for BAMSCF.
Dreyfus will be responsible for the overall
management of BAMSCF’s portfolio and for the supervision and ongoing monitoring of the Alcentra Advisers, but will not be
responsible for making or ratifying any investment decisions made by the Alcentra Advisers. Pursuant to the proposed sub-advisory
agreements, the Alcentra Advisers will be responsible for implementation of BAMSCF’s investment strategy and investment of
BAMSCF’s assets on a day-to-day basis in accordance with BAMSCF’s investment objective and policies. An investment
committee comprised of senior portfolio managers of the Alcentra Advisers will make all determinations regarding allocations and
reallocations of BAMSCF’s assets among various credit strategies. That investment committee will meet at least quarterly
to review the percentage allocations to each credit strategy and rebalance BAMSCF’s portfolio and/or modify the target allocations.
Except for BAMSCF’s direct lending strategy, the primary portfolio managers of the Alcentra Advisers will be responsible
for investment decisions with respect to a particular credit strategy. With respect to BAMSCF’s direct lending strategy,
the primary portfolio manager will make non-discretionary investment recommendations to the U.S. Investment Committee of Alcentra
NY, which is ultimately responsible for making investment decisions for that strategy.
It is anticipated that the BAMSCF Board
will be comprised entirely of Independent Directors. No Independent Director will have any direct or indirect financial interest
in any Co-Investment Transaction or any interest in any portfolio company, other than through an interest (if any) in the securities
of BAMSCF. BAMSCF intends to make an election to be treated for tax purposes as a RIC under the Code, and intends to continue to
make such election in the future.
Alcentra NY is organized as a limited liability
company under the laws of the state of Delaware. Alcentra NY is a subsidiary of the Alcentra Group, which is an indirect wholly-owned
subsidiary of BNY Mellon. Alcentra NY is registered with the Commission pursuant to Section 203 of the Advisers Act.
Alcentra NY serves as investment adviser
to the Company pursuant to an investment advisory agreement and also serves as investment adviser to the Existing Co-Investment
Affiliate. Alcentra NY reviews investments with respect to the Company and the Existing Co-Investment Affiliate and determines
whether or not each entity should invest in a new portfolio company and, if so, to what extent.
In addition, Alcentra NY is proposed to
serve as a sub-adviser to BAMSCF. Alcentra NY would be responsible for implementation of certain of BAMSCF’s investment strategies
and investment of the portion of BAMSCF’s assets allocated to those investment strategies on a day-to-day basis in accordance
with BAMSCF’s investment objective and policies. Through this ability to select investments, Alcentra NY, together with Alcentra
Limited, would have ultimate authority with respect to BAMSCF’s investments, subject in each case to the oversight of the
BAMSCF Board. Dreyfus, as investment manager to BAMSCF, would participate in neither the selection nor the ratification of investments.
Alcentra Limited is incorporated in the
United Kingdom and Wales. Alcentra Limited is a subsidiary of the Alcentra Group, which is an indirect wholly-owned subsidiary
of BNY Mellon. Alcentra Limited is registered with the Commission pursuant to Section 203 of the Advisers Act.
Alcentra Limited is proposed to serve as
a sub-adviser to BAMSCF. Alcentra Limited would be responsible for implementation of certain of BAMSCF’s investment strategies
and investment of the portion of BAMSCF’s assets allocated to those investment strategies on a day-to-day basis in accordance
with BAMSCF’s investment objective and policies. Through this ability to select investments, Alcentra Limited, together with
Alcentra NY, would have ultimate authority with respect to BAMSCF’s investments, subject in each case to the oversight of
the BAMSCF Board. Dreyfus, as investment manager to BAMSCF, would participate in neither the selection nor the ratification of
investments.
Dreyfus is a corporation organized under
the laws of the State of New York. Dreyfus is a wholly-owned subsidiary of BNY Mellon and is the primary mutual fund business of
BNY Mellon, a global financial services company focused on helping clients manage and service their financial assets, operating
in 35 countries and serving more than 100 markets. BNY Mellon Investment Management is one of the world’s leading investment
management organizations, and one of the top U.S. wealth managers, encompassing BNY Mellon’s affiliated investment management
firms, wealth management services and global distribution companies. Dreyfus is registered with the Commission pursuant to Section
203 of the Advisers Act.
Dreyfus is proposed to serve as investment
manager to BAMSCF. Dreyfus will be responsible for the overall management of BAMSCF’s portfolio and for the supervision and
ongoing monitoring of the Alcentra Advisers, but will not be responsible for making or ratifying any investment decisions made
by the Alcentra Advisers.
| II. | RELIEF FOR PROPOSED CO-INVESTMENT TRANSACTIONS |
A. Co-Investment Transactions by the Regulated
Funds and the Co-Investment Affiliates
1. Mechanics of the Co-Investment Program
Upon issuance of the requested Order, the
Advisers will manage the Regulated Funds and the Co-Investment Affiliates in the same manner that they have managed them in the
past. However, rather than making separate investments, Regulated Funds and Co-Investment Affiliates could co-invest in the Co-Investment
Program.
In selecting investments for
the Regulated Funds, an Adviser will consider only the investment objective, investment policies, investment position,
capital available for investment, and other pertinent factors applicable to each Regulated Fund. Likewise, when selecting
investments for the Co-Investment Affiliates, the Advisers will select investments for the Co-Investment Affiliates,
considering only the investment objective, investment policies, investment position, capital available for investment, and
other pertinent factors applicable to each Co-Investment Affiliate. As described herein, each of the Co-Investment Affiliates
has or will have investment objectives and strategies that are similar to or overlap with the Objectives and Strategies8 of each of the Regulated Funds. To the extent there is an investment that falls within the Objectives
and Strategies of one or more Regulated Funds and the investment objectives and strategies of one or more of the
Co-Investment Affiliates, the Advisers would expect such Regulated Funds and Co-Investment Affiliates to co-invest with each
other, with certain exceptions based on available capital or diversification, as discussed below.9
Under the Co-Investment Program, each Co-Investment
Transaction would be allocated among the participating Regulated Funds and Co-Investment Affiliates. Each Potential Co-Investment
Transaction and the proposed allocation of each investment opportunity would be approved prior to the actual investment by the
Required Majority of each Regulated Fund.10
All subsequent activity, meaning
either to: (a) sell, exchange or otherwise dispose of an investment (collectively, a “Disposition”)
or (b) complete a Follow-On Investment,11 in
respect of an investment acquired in a Co-Investment Transaction will be made in accordance with the terms and conditions set
forth in this Application. With respect to the pro rata Dispositions and Follow-On Investments provided in conditions 7 and
8, a Regulated Fund may participate in a pro rata Disposition or Follow-On Investment without obtaining prior approval of the
Required Majority if, among other things: (i) the proposed participation of each Co-Investment Affiliate and Regulated Fund
in such Disposition or Follow-On Investment is proportionate to its outstanding investments in the issuer immediately
preceding the Disposition or Follow-On Investment, as the case may be; and (ii) the Board of the Regulated Fund has approved
that Regulated Fund’s participation in pro rata Dispositions and Follow-On Investments as being in the best interests
of the Regulated Fund. If the Board does not so approve, any such Disposition or Follow-On Investment will be submitted to
the Regulated Fund’s Eligible Directors. The Board of any Regulated Fund may at any time rescind, suspend or qualify
its approval of pro rata Dispositions and Follow-On Investments with the result that all Dispositions and/or Follow-On
Investments must be submitted to the Eligible Directors.
8
The term “Objectives and Strategies,” with respect to each Regulated Fund, means the Regulated
Fund’s investment objectives and strategies, as described in the Regulated Fund’s registration statement on Form N-2,
other filings the Regulated Fund has made with the Commission under the 1933 Act, or under the Securities Exchange Act of 1934,
as amended, and the Regulated Fund’s reports to stockholders.
9
The Regulated Funds, however, will not be obligated to invest, or co-invest, when investment opportunities are referred to them.
10
The term “Required Majority” has the meaning provided in
Section 57(o) of the Act. The term “Eligible Directors” means the directors who are eligible to vote
under section 57(o). 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 57(o).
11 The term “Follow-On
Investment” means any additional investment in an existing portfolio company, including the exercise of warrants,
conversion privileges or other similar rights to acquire additional securities of the portfolio company.
The Co-Investment Program stipulates that
the terms, conditions, price, class of securities, settlement date, and registration rights applicable to each Regulated Fund’s
and to each Co-Investment Affiliate’s purchase be the same.
The amount of each Regulated Fund’s
capital available for investment will be determined based on the amount of cash on hand, existing commitments and reserves, if
any, the targeted leverage level, targeted asset mix and other investment policies and restrictions set from time to time by the
Board of the applicable Regulated Fund or imposed by applicable laws, rules, regulations or interpretations. Likewise, a Co-Investment
Affiliate’s capital available for investment is determined based on the amount of cash on hand, existing commitments and
reserves, if any, the targeted leverage level, targeted asset mix and other investment policies and restrictions set by the Co-Investment
Affiliate’s directors, general partners or adviser or imposed by applicable laws, rules, regulations or interpretations.
2. Reasons for Co-Investing
It is expected that co-investment in portfolio
companies by the Regulated Funds and the Co-Investment Affiliates will increase the number of favorable investment opportunities
for each Regulated Fund. The Co-Investment Program will be effected for a Regulated Fund only if it is approved by the Regulated
Fund’s Required Majority on the basis that it would be advantageous for the Regulated Fund to have the additional capital
from the Co-Investment Affiliates and/or other Regulated Funds available to meet the funding requirements of attractive investments
in portfolio companies. A Regulated Fund that makes investments of the type contemplated by the Regulated Funds typically limits
its participation in any one transaction to a specific dollar amount, which may be determined by legal or internally imposed prudential
limits on exposure in a single investment.
In view of the foregoing, in cases where
an Adviser identifies investment opportunities requiring larger capital commitments, the Adviser must seek the participation of
other entities with similar investment styles. The availability of the Co-Investment Affiliates or additional Regulated Funds as
investing partners of a Regulated Fund may alleviate some of that necessity in certain circumstances. A Regulated Fund could lose
some investment opportunities if its Adviser cannot provide “one-stop” financing to a potential portfolio company.
Portfolio companies may reject an offer of funding arranged by an Adviser due to a Regulated Fund’s inability to commit the
full amount of financing required by the portfolio company in a timely manner (i.e., without the delay that typically would be
associated with obtaining single-transaction exemptive relief from the Commission). By reducing the number of occasions on which
a Regulated Fund’s individual or aggregate investment limits require the Advisers to arrange a syndication with unaffiliated
entities, such Regulated Fund will likely be required to forego fewer suitable investment opportunities. With the assets of the
other Regulated Funds and the Co-Investment Affiliates available for co-investment, there should be an increase in the number of
opportunities accessible to each Regulated Fund.
The Advisers and the Board of each Regulated
Fund believe that it will be advantageous for each Regulated Fund to co-invest with one or more other Regulated Funds and/or one
or more Co-Investment Affiliates and that these co-investments would be consistent with the investment objectives, investment policies,
investment positions, investment strategies, investment restrictions, regulatory requirements and other pertinent factors applicable
to each Regulated Fund.
The Advisers also believe that co-investment
among the Regulated Funds and the Co-Investment Affiliates will afford each Regulated Fund the ability to achieve greater diversification
and, together with the other Regulated Funds and the Co-Investment Affiliates, the opportunity to exercise greater influence on
the portfolio companies in which they co-invest.
B. Applicable Law
1. Sections 17(d), 57(a)(4) and 57(i)
of the Act, and Rule 17d-1 thereunder
Section 17(d) of the Act generally prohibits
an affiliated person (as defined in Section 2(a)(3) of the Act), or an affiliated person of such affiliated person, of a registered
closed- end investment company acting as principal, from effecting any transaction in which the registered closed-end investment
company is a joint or a joint and several participant, in contravention of such rules as the Commission may prescribe for the purpose
of limiting or preventing participation by the registered closed-end investment company on a basis different from or less advantageous
than that of such other participant. Rule 17d-1 under the Act generally prohibits participation by a registered investment company
and an affiliated person (as defined in Section 2(a)(3) of the Act) or principal underwriter for that investment company, or an
affiliated person of such affiliated person or principal underwriter, in any “joint enterprise or other joint arrangement
or profit-sharing plan,” as defined in the rule, without prior approval by the Commission by order upon application.
Section 57(a)(4) makes it unlawful for
any person who is related to a BDC in a manner described in Section 57(b), acting as principal, knowingly to effect any transaction
in which the BDC is a joint or a joint and several participant with that person in contravention of rules and regulations as the
Commission may prescribe for the purpose of limiting or preventing participation by the BDC on a basis less advantageous than that
of the other participant. Although the Commission has not adopted any rules expressly under Section 57(a)(4), Section 57(i) provides
that the rules under Section 17(d) applicable to registered closed-end investment companies (e.g., Rule 17d-1) are, in the
interim, deemed to apply to transactions subject to Section 57(a). Rule 17d-1, as made applicable to BDCs by Section 57(i), prohibits
any person who is related to a BDC in a manner described in Section 57(b), as modified by Rule 57b-1, acting as principal, from
participating in, or effecting any transaction in connection with, any joint enterprise or other joint arrangement or profit-sharing
plan in which the BDC is a participant, unless an application regarding the joint enterprise, arrangement, or profit-sharing plan
has been filed with the Commission and has been granted by an order entered prior to the submission of the plan or any modification
thereof to security holders for approval, or prior to its adoption or modification if not so submitted.
In passing upon applications under Rule
17d-1, the Commission will consider whether the participation by the BDC in such 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.
2. Section 57(b) of the Act and Rule
57b-1 thereunder
Section 57(b), as modified by Rule 57b-1,
specifies the persons to whom the prohibitions of Section 57(a)(4) apply. These persons include the following: (1) any director,
officer, employee, or member of an advisory board of a BDC or any person (other than the BDC itself) who is, within the meaning
of Section 2(a)(3)(C), an affiliated person of any such person; or (2) any investment adviser or promoter of, general partner in,
principal underwriter for, or person directly or indirectly either controlling, controlled by, or under common control with a BDC
(except the BDC itself and any person who, if it were not directly or indirectly controlled by the BDC, would not be directly or
indirectly under the control of a person who controls the BDC), or any person who is, within the meaning of Section 2(a)(3)(C)
or (D), an affiliated person of such person.
Rule 57b-1 under the Act exempts certain
persons otherwise related to a BDC in a manner described in Section 57(b)(2) of the Act from being subject to the prohibitions
of Section 57(a). Specifically, this rule states that the provisions of Section 57(a) shall not apply to any person: (a) solely
because that person is directly or indirectly controlled by a BDC; or (b) solely because that person is directly or indirectly
controlling, controlled by, or under common control with, a person described in (a) of the rule or is an officer, director, partner,
copartner, or employee of a person described in (a) of the rule.
Section 2(a)(9) defines “control”
as the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the
result of an official position with such company. The statute also sets forth the interpretation that any person who owns beneficially,
either directly or through one or more controlled companies, more than 25 percent of the voting securities of a company shall be
presumed to control such company; any person who does not so own more than 25 percent of the voting securities of a company shall
be presumed not to control such company; and a natural person shall be presumed not to be a controlled person.
Section 2(a)(3)(C) defines an “affiliated
person” of another person as “any person directly or indirectly controlling, controlled by, or under common control
with, such other person.”
C. Need for Relief
Co-Investment Transactions may be prohibited
by Sections 17(d) and/or 57(a)(4) and Rule 17d-1 without a prior order of the Commission to the extent that the Co-Investment Affiliates
and the other Regulated Funds fall within the category of persons described by Section 17(d) or 57(b), as modified by Rule 57b-1
thereunder, vis-à-vis each Regulated Fund. Each of the other Regulated Funds and the Co-Investment Affiliates may be deemed
to be affiliated persons of a Regulated Fund within the meaning of Section 2(a)(3) by reason of common control because (i) Alcentra
NY advises and may be deemed to control the Existing Co-Investment Affiliate and any Future Co-Investment Affiliate will be advised
and may be deemed to be controlled by an Adviser, (ii) an Adviser(s) advises and may be deemed to control the Existing Regulated
Funds and any future Regulated Fund will be advised and may be deemed to be controlled by an Adviser, and (iii) the Advisers are
controlled by the same persons. Thus, each other Regulated Fund and Co-Investment Affiliate could be deemed to be a person related
to a Regulated Fund in a manner described by Section 57(b) and therefore prohibited by Sections 17(d) and 57(a)(4) and Rule 17d-1
from participating in Co-Investment Transactions with each Regulated Fund.
D. Requested Relief
Accordingly, Applicants respectfully request
an Order of the Commission, pursuant to Sections 17(d) and 57(i) and Rule 17d-1, permitting a Regulated Fund and one or more other
Regulated Funds and/or one or more Co-Investment Affiliates to participate in the same investment opportunities through the Co-Investment
Program.
E. Precedents
The Commission has
granted co-investment relief on numerous occasions in recent years.12 Applicants submit that the formulae and procedures set forth as conditions for the relief requested
herein are consistent with the range of investor protection found in the cited orders. We note, in particular, that
the co-investment protocol to be followed by the Applicants here is substantially similar to the protocol followed by
Fifth Street Finance Corp. and its affiliates, for which an order was granted on September 9, 2014.13
12
See e.g., Garrison Capital Inc., et al. (File No. 812-14097) Investment Company Act Rel. No. 31373 (December 15,
2014) (notice) and 31409 (January 12, 2015) (order); TPG Specialty Lending, Inc., et al. (File No. 812-13980) Investment Company
Release No. 31338 (November 18, 2014) (notice) and 31379 (December 16, 2014) (order); Monroe Capital Corporation, et al. (File
No. 812-14028) Investment Company Release No. 31253 (September 19, 2014) (notice) and 31286 (October 15, 2014) (order); Fifth Street
Finance Corp., et al. (File No. 812-14132) Investment Company Act Rel. No. 31212 (August 14, 2013) (notice) and 31247 (September
9, 2014) (order); Solar Capital Ltd., et al. (File No. 812-14195) Investment Company Act Rel. No. 31143 (July 1, 2014) (notice)
and 31187 (July 28, 2014) (order); WhiteHorse Finance, Inc., et al. (File No. 812-14120) Investment Company Act Rel. No. 31080
(June 12, 2014) (notice) and 31152 (July 8, 2014) (order); PennantPark Investment Corp., et al. (File No. 812-14134) Investment
Company Act Rel. No. 30985 (March 19, 2014) (notice) and 31015 (April 15, 2014) (order); NF Investment Corp., et al. (File No.
812-14161) Investment Company Act Rel. No. 30900 (January 31, 2014) (notice) and 30968 (February 26, 2014) (order); Prospect Capital
Corporation, et al. (File No. 812-14199) Investment Company Act Rel. No. 30855 (January 13, 2014) (notice) and 30909 (February
10, 2014) (order); Medley Capital Corporation, et al. (File No. 812-14020) Investment Company Act Rel. No. 30769
(Oct. 28, 2013) (notice) and 30807 (Nov. 25, 2013) (order).
13
Fifth Street Finance Corp., et al. (File No. 812-14132) Investment Company Act Rel. No. 31212 (August 14, 2014) (notice) and 31247
(September 9, 2014) (order).
F. Applicants’ Legal Arguments
Rule 17d-1 was promulgated by the Commission
pursuant to Section 17(d) and made applicable to BDCs by Section 57(i). Paragraph (a) of Rule 17d-1 permits an otherwise prohibited
person, acting as principal, to participate in, or effect a transaction in connection with, a joint enterprise or other joint
arrangement or profit-sharing plan in which a BDC is a participant if an application regarding the joint enterprise, arrangement,
or profit-sharing plan has been filed with the Commission and has been granted by an order issued prior to the submission of such
plan or any modification thereof to security holders for approval, or prior to its adoption or modification if not so submitted.
Paragraph (b) of Rule 17d-1 states that in passing upon applications under that rule, the Commission will consider whether the
participation by the investment company in such joint enterprise, joint arrangement, or profit-sharing plan on the basis proposed
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.
Applicants submit that the fact that the
Required Majority will approve each Co-Investment Transaction before the investment is made, and other protective conditions set
forth in this Application will ensure that the Regulated Funds will be treated fairly.
The conditions to which the requested relief
will be subject are designed to ensure that the Advisers or the principals of the Advisers would not be able to favor the Co-Investment
Affiliates over the Regulated Funds, or one Regulated Fund over another Regulated Fund, through the allocation of investment opportunities
among them. Because many attractive investment opportunities for a Regulated Fund will also be attractive investment opportunities
for one or more Co-Investment Affiliates and/or one or more other Regulated Funds, Applicants submit that the Co-Investment Program
presents an attractive alternative to the institution of some form of equitable allocation protocol for the allocation of 100%
of individual investment opportunities to one Regulated Fund or the Co-Investment Affiliates as opportunities arise.
Applicants submit that each Regulated Fund’s
participation in the Co-Investment Transactions will be consistent with the provisions, policies, and purposes of the Act and on
a basis that is not different from or less advantageous than that of other participants. Applicants believe that the conditions
will ensure that the Advisers would not be able to favor the Co-Investment Affiliates over the Regulated Funds, or one Regulated
Fund over another Regulated Fund, through the allocation of investment opportunities among them.
After making the determinations required
in conditions 1 and 2(a), other than in the case of pro rata Dispositions and Follow-On Investments as provided for in conditions
7 and 8, the applicable Adviser(s) will present each Potential Co-Investment Transaction and the proposed allocation to the Eligible
Directors, and the Required Majority will approve each Co-Investment Transaction prior to any investment by the Regulated Fund.
Applicants believe that participation by
the Regulated Funds in pro rata Dispositions and Follow-On Investments, as provided in conditions 7 and 8, is consistent with the
provisions, policies and purposes of the 1940 Act and will not be made on a basis different from or less advantageous than that
of other participants. A formulaic approach, such as pro rata dispositions and Follow-On Investments, eliminates the discretionary
ability to make allocation determinations, and in turn eliminates the possibility for overreaching and promotes fairness.
G. Conditions
Applicants agree that any Order of the
Commission granting the requested relief will be subject to the following conditions:
| 1. | Each time an Adviser considers a Potential Co-Investment Transaction for a Co-Investment Affiliate or another Regulated Fund
that falls within a Regulated Fund’s then-current Objectives and Strategies, the applicable Adviser(s) will make an independent
determination of the appropriateness of the investment for the Regulated Fund in light of the Regulated Fund’s then-current
circumstances. |
| 2. | a. If the applicable Adviser(s) deems a Regulated Fund’s participation in any Potential Co-Investment Transaction to
be appropriate for the Regulated Fund, the applicable Adviser(s) will then determine an appropriate level of investment for the
Regulated Fund. |
b. If the aggregate amount recommended by the applicable
Adviser(s) to be invested by the applicable Regulated Fund in the Potential Co-Investment Transaction, together with the amount
proposed to be invested by the other participating Regulated Funds and Co-Investment Affiliates, collectively, in the same transaction,
exceeds the amount of the investment opportunity, the amount proposed to be invested be each such party will be allocated among
them pro rata based on each participating party’s capital available for investment in the asset class being allocated, up
to the amount proposed to be invested by each. The applicable Adviser(s) will provide the Eligible Directors of each participating
Regulated Fund with information concerning each participating party’s available capital to assist the Eligible Directors
with their review of the Regulated Fund’s investments for compliance with these allocation procedures.
c. After making the determinations required in conditions
1 and 2(a), the applicable Adviser(s) will distribute written information concerning the Potential Co-Investment Transaction, including
the amount proposed to be invested by each Regulated Fund and each Co-Investment Affiliate 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
Co-Investment Affiliates only if, prior to the Regulated Fund’s participation in the Potential Co-Investment Transaction,
a Required Majority concludes that:
i. the
terms of the Potential Co-Investment Transaction, including the consideration to be paid, are reasonable and fair to the Regulated
Fund and its stockholders and do not involve overreaching in respect of the Regulated Fund or its stockholders on the part of
any person concerned
ii. the
Potential Co-Investment Transaction is consistent with:
A. the interests of the Regulated Fund’s
stockholders; and
B. the Regulated Fund’s then-current
Objectives and Strategies;
iii. the
investment by the other Regulated Funds or any Co-Investment Affiliates 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 any other Regulated Fund or Co-Investment
Affiliate; provided that, if any other Regulated Fund or Co-Investment Affiliate, but not the Regulated Fund itself, gains the
right to nominate a director for election to a portfolio company’s 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 reaching the conclusions required by this condition 2(c)(iii), 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(s) agree
to, and do, provide periodic reports to the Board of the Regulated Fund 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 other Regulated Fund, or any Co-Investment Affiliate, or any affiliated person of either receives in connection with the
right of any other Regulated Fund or a Co-Investment Affiliate 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
Co-Investment Affiliates (which each may, in turn, share its portion with its affiliated persons) and the participating Regulated
Funds in accordance with the amount of each party’s investment; and
iv. the
proposed investment by the Regulated Fund will not benefit the Advisers, the Co-Investment Affiliates, 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 Sections 17(e) or 57(k) 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 2(c)(iii)(C).
| 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(s) 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 and Co-Investment Affiliates during the preceding
quarter that fell within the Regulated Fund’s then-current 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 subject to examination by the Commission and its staff. |
| 5. | Except for Follow-On Investments made in accordance with condition 8 below,14 a Regulated Fund will not invest in reliance on the Order in any issuer in which another Regulated Fund,
Co-Investment Affiliate, or any affiliated person of another Regulated Fund or Co-Investment Affiliate is an existing
investor. |
| 6. | A Regulated Fund will not participate in any Potential Co-Investment 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 Co-Investment Affiliate. The grant to a Co-Investment Affiliate or another Regulated Fund, but not the Regulated Fund, of the
right to nominate a director for election to a portfolio company’s 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 2(c)(iii)(A), (B) and (C) are met. |
| 7. | a. If any Co-Investment Affiliate or any Regulated Fund elects to sell, exchange or otherwise dispose of an interest in
a security that was acquired in a Co-Investment Transaction, the applicable Adviser(s) 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 any
participating Co-Investment Affiliates and any other Regulated Funds.
14
This exception applies only to Follow-On Investments by a Regulated Fund in issuers in which that Regulated Fund already holds
investments.
c. A Regulated Fund may participate in such Disposition
without obtaining prior approval of the Required Majority if: (i) the proposed participation of each Co-Investment Affiliate and
Regulated 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 this 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 applicable Adviser(s) will provide its written recommendation as to the Regulated Fund’s participation to the Regulated
Fund’s 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 Fund’s best interests
d. Each Co-Investment Affiliate and each Regulated
Fund will bear its own expenses in connection with any such Disposition.
| 8. | a. If any Co-Investment Affiliate 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 Adviser(s) 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 Co-Investment Affiliate
and each Regulated Fund in such investment is proportionate to its outstanding investments in the issuer immediately preceding
the Follow-On Investment; (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 this Application); and
(iii) the Board of the Regulated Fund is provided on a quarterly basis with a list of all Follow-On Investments made in accordance
with this condition. In all other cases, the applicable Adviser(s) will provide its written recommendation as to the Regulated
Fund’s 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 Fund’s best interests.
c. If, with respect to any Follow-On
Investment:
i. the amount of the Follow-On
Investment is not based on the Co-Investment Affiliates’ and the Regulated Funds’ outstanding investments immediately
preceding the Follow-On Investment; and
ii. the aggregate amount recommended
by the applicable Adviser(s) to be invested by each Regulated Fund in the Follow-On Investment, together with the amount proposed
to be invested by the participating Co-Investment Affiliates in the same transaction, exceeds the amount of the opportunity, then
the amount to be invested by each such party will be allocated among them pro rata based on each participating party’s capital
available for investment in the asset class being 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 Co-Investment Transaction for
all purposes and subject to the other conditions set forth in this Application. |
| 9. | The Independent 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 the Co-Investment Affiliates and the other
Regulated Funds that the Regulated Fund considered but declined to participate in, so that the Independent Directors may determine
whether all investments made during the preceding quarter, including those investments that the Regulated Fund considered but declined
to participate in, comply with the conditions of the Order. In addition, the Independent 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 57(f)(3) 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 57(f) of
the Act. |
| 11. | No Independent 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 any Co-Investment Affiliate. |
| 12. | The expenses, if any, associated with acquiring, holding or disposing of any securities acquired in a Co-Investment Transaction
(including, without limitation, the expenses of the distribution of any such securities registered for sale under the 1933 Act)
will, to the extent not payable by the Advisers under their respective advisory agreements with the Co-Investment Affiliates and
the Regulated Funds, be shared by the participating Co-Investment Affiliates and the participating Regulated Funds in proportion
to the relative amounts of the securities held or being acquired or disposed of, as the case may be. |
| 13. | Any transaction fee15 (including break-up or commitment
fees but excluding broker’s fees contemplated by Section 17(e) or 57(k) of the
Act, as applicable) received in connection with a Co-Investment Transaction will be distributed
to the participating Co-Investment Affiliates and Regulated Funds on a pro rata basis
based on the amount they each 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 the Adviser
at a bank or banks having the qualifications prescribed in Section 26(a)(1) of the Act,
and the account will earn a competitive rate of interest that will also be divided pro
rata among the participating Co-Investment Affiliates and Regulated Funds based on the
amount each invests in such Co-Investment Transaction. None of the Co-Investment Affiliates,
the Regulated Funds, the Advisers nor any affiliated person of the Regulated Funds or
Co-Investment Affiliates 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 Co-Investment Affiliates and the Regulated Funds, the pro rata transaction
fees described above and fees or other compensation described in condition 2(c)(iii)(C),
and (b) in the case of the Advisers, investment advisory fees paid in accordance with
their respective investment advisory agreements with the Regulated Funds and Co-Investment
Affiliates). |
Please address all communications concerning
this Application and the Notice and Order to:
Paul J. Echausse, Esq.
Alcentra Capital Corporation
President and Chief Executive Officer
200 Park Avenue, 7th Floor
New York, NY 10166
(212) 922-8240
Jeff S. Prusnofsky, Esq.
Vice President
BNY Mellon Alcentra Multi-Strategy Credit Fund, Inc.
200 Park Avenue
New York, New York 10166
(212) 922-6796
15 Applicants are not requesting and the staff is
not providing any relief for transaction fees received in connection with any Co-Investment Transaction.
Please address any questions, and a copy
of any communications, concerning this Application, the Notice and Order to:
Steven B. Boehm, Esq.
Harry S. Pangas, Esq.
Sutherland Asbill & Brennan LLP
700 Sixth Street, N.W.
Washington, D.C. 20001
David Stephens, Esq.
Nicole M. Runyan, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
Pursuant to Rule 0-2(c) under the Act,
Applicants hereby state that each Regulated Fund, by resolution duly adopted by each Board, in the case of the Company, on October
16, 2014 (attached hereto as Exhibit B-1), and, in the case of BAMSCF, on March 23, 2015 (attached hereto as Exhibit B-2), has
authorized to cause to be prepared and to execute and file with the Commission this Application and any amendment thereto under
Section 57(i) of the Act and Rule 17d-1 under the Act, for an order pursuant to Section 57(i) of the Act, and Rule 17d-1 under
the Act, permitting certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of such Act and Rule 17d-1.
Each person executing the Application on behalf of the Applicants says that he has duly executed the Application for and on behalf
of the Applicants; that he is authorized to execute the Application pursuant to the terms of an operating agreement, management
agreement or otherwise; and that all actions by members, directors or other bodies necessary to authorize each such deponent to
execute and file the Application have been taken.
All requirements for the execution and
filing of this Application in the name and on behalf of each Applicant by the undersigned have been complied with and the undersigned
is fully authorized to do so and has duly executed this Application this 2nd day of April, 2015.
| |
ALCENTRA CAPITAL CORPORATION |
| |
|
|
| |
By: |
|
/s/ Paul
J. Echausse |
| |
Name: |
|
Paul J. Echausse |
| |
Title: |
|
President and Chief Executive Officer |
| |
|
| |
Alcentra Middle Market Fund IV, L.P. |
| |
|
| |
By: |
|
/s/ Paul
J. Echausse |
| |
Name: |
|
Paul J. Echausse |
| |
Title: |
|
Authorized Person |
| |
|
|
|
| |
ALCENTRA NY, LLC |
| |
|
| |
By: |
|
/s/ Paul
J. Echausse |
| |
Name: |
|
Paul J. Echausse |
| |
Title: |
|
Authorized Person |
| |
Alcentra LIMITED |
| |
|
| |
By: |
|
/s/ Paul
J. Echausse |
| |
Name: |
|
Paul J. Echausse |
| |
Title: |
|
Authorized Person |
| |
|
|
|
| |
Alcentra BDC EQUITY HOLDINGS, LLC |
| |
|
| |
By: |
|
/s/ Paul
J. Echausse |
| |
Name: |
|
Paul J. Echausse |
| |
Title: |
|
Authorized Person |
| |
|
|
|
| |
BNY MELLON ALCENTRA
MULTI-STRATEGY Credit FUND, INC. |
| |
|
| |
By: |
|
/s/ Jeff
S. Prusnofsky |
| |
Name: |
|
Jeff S. Prusnofsky |
| |
Title: |
|
Authorized Person |
| |
|
|
|
| |
THE DREYFUS CORPORATION |
| |
|
| |
By: |
|
/s/ James
Bitetto |
| |
Name: |
|
James Bitetto |
| |
Title: |
|
Authorized Person |
EXHIBIT A-1
VERIFICATION
The undersigned states that he has duly
executed the attached application, dated as of April 2, 2015, for and on behalf of Alcentra Capital Corporation, Alcentra Middle
Market Fund IV, L.P., Alcentra NY, LLC, Alcentra Limited and Alcentra BDC Equity Holdings, LLC, that he is the Chief Executive
Officer and President of Alcentra Capital Corporation and an authorized person of Alcentra Middle Market Fund IV, L.P., Alcentra
NY, LLC, Alcentra Limited and Alcentra BDC Equity Holdings, LLC; and that all action necessary to authorize the undersigned to
execute and file such instrument has been taken. The undersigned further states that he is familiar with such instrument, and
the contents thereof, and that the facts set forth are true to the best of his knowledge, information and belief.
|
|
/s/ Paul
J. Echausse |
| |
Name: |
|
Paul J. Echausse |
| |
Date: |
|
April 2, 2015 |
EXHIBIT
A-2
VERIFICATION
The undersigned states that he has duly
executed the attached application, dated as of April 2, 2015, for and on behalf of BNY Mellon Alcentra Multi-Strategy Credit Fund,
Inc.; that he is a Vice President of BNY Mellon Alcentra Multi-Strategy Credit Fund, Inc.; and that all action necessary
to authorize the undersigned to execute and file such instrument has been taken. The undersigned further states that he is familiar
with such instrument, and the contents thereof, and that the facts set forth are true to the best of his knowledge, information
and belief.
|
|
/s/ Jeff
S. Prusnofsky |
| |
Name: |
|
Jeff S. Prusnofsky |
| |
Date: |
|
April 2, 2015 |
EXHIBIT
A-3
VERIFICATION
The undersigned states that he has duly
executed the attached application, dated as of April 2, 2015, for and on behalf of The Dreyfus Corporation; that he is the Secretary
of The Dreyfus Corporation; and that all action necessary to authorize the undersigned to execute and file such instrument
has been taken. The undersigned further states that he is familiar with such instrument, and the contents thereof, and that the
facts set forth are true to the best of his knowledge, information and belief.
|
|
/s/ James
Bitetto |
| |
Name: |
|
James Bitetto |
| |
Date: |
|
April 2, 2015 |
EXHIBIT B-1
Resolutions of the Board of Directors
of Alcentra Capital Corporation
WHEREAS, the
Board of Directors has reviewed the Company’s Co-Investment Exemptive Application (the “Exemptive Application”),
a copy of which is attached hereto as Exhibit A, for an order of the U.S. Securities and Exchange Commission (the “SEC”)
pursuant to Sections 57(a)(4) and 57(i) of the Investment Company Act of 1940, as amended (the “1940 Act”),
and Rule 17d-1 promulgated under the 1940 Act, permitting certain joint transactions that otherwise may be prohibited by Section 57(a)(4)
of the Act.
NOW,
THEREFORE, BE IT RESOLVED, that the Officers, shall be, and each of them individually hereby is, authorized, empowered and
directed, in the name and on behalf of the Company, to cause to be executed, delivered and filed with the SEC the Exemptive Application,
in substantially the form attached hereto as Exhibit A; and
FURTHER
RESOLVED, that the Officers shall be, and each of them individually hereby is, authorized, empowered and directed, in the name
and on behalf of the Company, to cause to be made, executed, delivered and filed with the SEC any amendments to the Exemptive Application
and any additional applications for exemptive relief as are determined necessary, advisable or appropriate by any of the Officers
in order to effectuate the foregoing resolutions, such determination to be conclusively evidenced by the taking of any such action;
and
FURTHER RESOLVED,
that all acts and things previously done by any of the Officers, on or prior to the date hereof, in the name and on behalf of the
Company in connection with the foregoing resolutions are in all respects authorized, ratified, approved, confirmed and adopted
as the acts and deeds by and on behalf of the Company; and
FURTHER RESOLVED,
that the Officers be, and each of them hereby is, authorized, empowered and directed to certify and deliver copies of these resolutions
to such governmental bodies, agencies, persons, firms or corporations as the Officers may deem necessary and to identify by his
or her signature or certificate, or in such form as may be required, the documents and instruments presented to and approved herein
and to furnish evidence of the approval, by an officer authorized to give such approval, of any document, instrument or provision
or any addition, deletion or change in any document or instrument.
(Approved by unanimous written consent
of the Board of Directors on October 16, 2014)
EXHIBIT
B-2
Resolutions of the Sole Director of
BNY Mellon Alcentra Multi-Strategy Credit Fund, Inc.
RESOLVED, that
the officers and agents of the Fund, be, and hereby are, authorized and directed to file with the Securities and Exchange Commission
(the “Commission”) the Application for an order pursuant to Sections 17(d) and 57(i) of the Investment
Company Act of 1940, as amended (the “1940 Act”) and Rule 17d-1 thereunder for an exemption permitting
certain joint transactions otherwise prohibited by Sections 17(d) and 57(a)(4) of the 1940 Act and Rule 17d-1, in substantially
the form presented to the sole Director, and that each of the officers and agents of the Fund, acting alone, hereby is authorized,
empowered and directed on behalf of the Fund, to cause to be prepared, executed and filed with the Commission any and all amendments
of and exhibits to said Application, to be in such form as the officers or agents of the Fund shall approve, such approval to be
conclusively evidenced by their filing thereof; and it was further
RESOLVED, that
each officer and agent of the Fund, acting with advice of counsel, be, and hereby is, authorized and empowered to make such changes
as may be necessary by reason of any comment on such materials by the Commission or for any other reason deemed appropriate by
the officers or agents of the Fund; and it was further
RESOLVED, that
each officer and agent of the Fund, acting alone, be, and hereby is, authorized, empowered and directed to take any and all additional
acts and to prepare, execute and deliver any and all other agreements, documents, instruments and certificates, as they, or any
of them acting alone deems necessary, appropriate or convenient to carry out the intent and purposes of the foregoing resolutions,
such determination to be conclusively evidenced by the taking of such actions and the preparation, execution and delivery of such
agreements, documents, instruments and certificates.
(Approved by written consent of the Sole Director on March 23,
2015)
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