06-2764. Man-Glenwood Lexington, LLC, et al.; Notice of Application

March 16, 2006.

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 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 companies to issue multiple classes of shares and to impose asset-based distribution fees.

Applicants: Man-Glenwood Lexington, LLC (“Lexington”), Man-Glenwood Lexington TEI, LLC (“TEI”), Glenwood Capital Investments, L.L.C. (“Adviser”), and Man Investments Inc. (“Distributor”).

Filing Dates: The application was filed on February 11, 2004, and amended on February 24, 2006, and March 15, 2006.

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 April 10, 2006, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, 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 Steven Zoric Esq., Man Investments Inc., 123 N. Wacker Drive, 28th Floor, Chicago, IL 60606.

FOR FURTHER INFORMATION CONTACT:

Julia Kim Gilmer, Senior Counsel, at [phone], or Janet M. Grossnickle, Branch Chief, at [phone] (Division of Investment Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION:

The following is a summary of the application. The complete application may be obtained for a fee at the Commission's Public Reference Desk, 100 F Street, NE., Washington, DC 20549-0102 (tel. [phone]).

Applicants' Representations

1. Lexington, TEI, and Man-Glenwood Lexington Associates Portfolio, LLC (the “Portfolio Company”) are continuously offered closed-end management investment companies registered under the Act and organized as Delaware limited liability companies. Lexington and TEI (collectively, the “Feeder Funds”) operate as feeder funds in a master-feeder structure and invest all or substantially all of their investable assets in the Portfolio Company. The Portfolio Company, which acts as the master fund to the Feeder Funds, is a fund of hedge funds.

2. The Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 and serves as investment adviser to the Portfolio Company. The Distributor, a broker-dealer registered under the Securities Exchange Act of 1934 (“1934 Act”), acts as the principal underwriter to the Feeder Funds. The Distributor 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.

Applicants request that the order also apply to any other continuously offered registered closed-end management investment company existing now or in the future for which the Adviser, the Distributor, or any entity controlling, controlled by, or under common control with the Adviser, the Distributor, or any entity controlling, controlled by, or under common control with the Adviser or the Distributor acts as investment adviser or principal underwriter, and which provides periodic liquidity with respect to its proportionate ownership interests (“Units”) pursuant to rule 13e-4 under the 1934 Act (collectively, with the Feeder Funds, the “Funds”).^[1]

3. The Feeder Funds continuously offer their Units to the public pursuant to rule 415 under the Securities Act of 1933 at net asset value and each currently offers a single class of Units subject to a front-end sales load as a percentage of the public offering price and an investor servicing fee. Units of the Feeder Funds are not listed on any securities exchange and do not trade on an over-the-counter system such as the National Association of Securities Dealers Automated Quotation System. Applicants do not expect that any secondary market will for the Units. To provide a limited degree of liquidity to investors, the Feeder Funds ordinarily will offer to repurchase Units quarterly at their then current net asset value pursuant to rule 13e-4 under the 1934 Act. The amount, timing and terms of any repurchase offer would remain within the discretion of each Feeder Fund's Board.

4. The Feeder Funds seek the flexibility to be structured as multiple class funds and propose to offer two additional classes of Units.^[2] Class A Units would be offered at net asset value, plus a front-end sales charge and an annual asset-based service and/or distribution fee of up to 0.25% and 0.75%, respectively, of average monthly net assets. Class 1 Units would be offered at net asset value with no front-end sales load or asset-based service and/or distribution fees and would be offered only to institutions and investors who compensate their financial intermediary directly. The Funds may in the future adopt these classes or another sales charge structure.

5. Applicants represent that any asset-based service and distribution fees will comply with the provisions of rule 2830(d) of the Conduct Rules of the National Association of Securities Dealers, Inc. (“NASD Sales Charge Rule”) as if that rule applied to the Feeder Funds. Applicants also represent that each Fund will disclose in its prospectus, the fees, expenses and other characteristics of each class of Units offered for sale by the prospectus as is required for open-end multiple class funds under Form N-1A. As is required for open-end funds, each Fund will disclose its expenses in shareholder reports, and disclose any arrangements that result in breakpoints in or elimination of sales loads in its prospectus.^[3] Each Fund and the Distributor will also comply with any requirements that may be adopted by the Commission 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 Funds and the Distributor.^[4]

6. Each Feeder Fund will allocate all expenses incurred by it among the various classes of Units based on the net assets of the Feeder Fund attributable to each class, except that the net asset value and expenses of each class will reflect distribution fees, service fees, and any other incremental expenses of that class. Expenses of a Feeder Fund allocated to a particular class of Units will be borne on a pro rata basis by each outstanding Unit of that class. The Funds will not offer exchange privileges. Units will not be subject to an early withdrawal charge.

Applicants' Legal Analysis

Multiple Classes of Units

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 Funds 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 Funds 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 Funds to issue multiple classes of Units.

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 Unit holders. Applicants submit that the proposed arrangements would permit the Funds to facilitate the distribution of their Units and provide investors with a broader choice of Unit holder 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. A Fund may create additional classes of Units or vary the characteristics of the proposed Class A and Class I Units, but each Fund will comply with the provisions of rule 18f-3 as if it were an open-end investment company.

Asset-Based Distribution Fees

1. 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.

2. 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 Funds to impose asset-based distribution fees. Applicants have agreed to comply with rules 12b-1 and 17d-3 as if those rules applied to closed-end investment companies.

Applicants' Condition

Applicants agree that any order granting the requested relief will be subject to the following condition:

Applicants will comply with the provisions of rules 12b-1, 17d-3, and 18f-3 under the Act, as amended from time to time, as if those rules applied to closed-end management investment companies, and will comply with the NASD Sales Charge Rule, 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.

Nancy M. Morris,

Secretary.

Footnotes

1.  Any Fund relying on the requested relief will do so in a manner consistent with the terms and conditions of the application. Applicants represent that each investment company presently intending to rely on the requested relief is listed as an applicant.

2.  The Feeder Funds may designate their existing Units as Initial Class Units. The Initial Class would be closed to new investors and would only be available to those Unit holders who currently hold Initial Class Units.

3.  See Shareholder Reports and Quarterly Portfolio Disclosure of Registered Management Investment Companies, Investment Company Act Release No. 26372 (February 27, 2004) (adopting release) (requiring open-end investment companies to disclose fund expenses in shareholder reports); and Disclosure of Breakpoint Discounts by Mutual Funds, Investment Company Act Release No. 26464 (June 7, 2004) (adopting release) (requiring open-end investment companies to provide prospectus disclosure of certain sales load information)

4.  Confirmation Requirements and Point of Sale Disclosure Requirements for Transactions and Certain Manual Funds and Other Securities, and Other Confirmation Requirement Amendments, and Amendments to the Registration Form for Mutual Funds, Investment Company Act Release No. 26341 (January 29, 2004) (proposing release).