Question
From: (redacted)
Sent: Thursday, November 03, 2005 12:53 PM
To: Verne,B. Michael
Subject: BeneficialOwnership Question
Mike,
I am writing toask your opinion as to who holds the shares of the Portfolio Companies in thefollowing situation:
A group ofinstitutional investors has formed a "Fund" to make investments inPortfolio Companies. The Fund is not a legal entity; rather the investors areparties to an agreement that outlines when/how investments are made. Generally,a financial advisor makes recommendations about companies in which the investorgroup might consider making investments. For each potential transaction, theinvestors individually decide whether to invest or not. If an investment ismade, shares of the Portfolio Company are acquired and registered in the nameof the Management Company or a nominee. The Management Company manages theinvestment for the investor group, including voting the shares of PortfolioCompanies. The investors own the beneficial interests in the shares ofPortfolio Companies in proportion to the amount of their investment in theFund.
Under thesefacts, can you confirm that, for HSR purposes,the individual investors, rather than the Fund (which is not an entity) or theManagement Company "hold", (i.e., have beneficial ownership of) theshares of the Portfolio Companies? If you need additional details to make yourdetermination, please let me know.