94-10889. The Haven Fund, et al.; Notice of Application  

  • [Federal Register Volume 59, Number 87 (Friday, May 6, 1994)]
    [Unknown Section]
    [Page 0]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-10889]
    
    
    [[Page Unknown]]
    
    [Federal Register: May 6, 1994]
    
    
    -----------------------------------------------------------------------
    
    SECURITIES AND EXCHANGE COMMISSION
    [Rel. No. IC-20262, 812-8898]
    
     
    
    The Haven Fund, et al.; Notice of Application
    
    April 29, 1994.
    AGENCY: Securities and Exchange Commission (``SEC``).
    
    ACTION: Notice of Application for Exemption under the Investment 
    Company Act of 1940 (the ``Act'').
    
    -----------------------------------------------------------------------
    
    APPLICANTS: The Haven Fund (the ``Fund''), HCM Partners, L.P. (the 
    ``Partnership''), and Haven Capital Management, Inc. (the ``Adviser'').
    
    RELEVANT ACT SECTIONS: Order requested under section 17(b) of the Act 
    for an exemption from section 17(a) of the Act.
    
    SUMMARY OF APPLICATION: Applicants seek an order that would permit the 
    exchange of shares of the Fund for portfolio securities of the 
    Partnership. Thereafter, the Partnership will dissolve and distribute 
    the shares it received in the exchange pro rata to its partners.
    
    FILING DATE: The application was filed on March 18, 1994. By 
    supplemental letter dated April 29, 1994, counsel to applicants agreed 
    to file an amendment during the notice period to make certain changes 
    to its application. This notice reflects the changes to be made to the 
    application by that amendment.
    
    HEARING OR NOTIFICATION OF HEARING: An order granting the application 
    will be issued unless the SEC orders a hearing. Interested persons may 
    request a hearing by writing to the SEC's Secretary and serving 
    applicants with a copy of the request, personally or by mail. Hearing 
    requests should be received by the SEC by 5:30 p.m. on May 24, 1994, 
    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 SEC's 
    Secretary.
    
    ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549. 
    Applicants, c/o Haven Capital Management, Inc., 655 Third Avenue, New 
    York, New York 10017.
    
    FOR FURTHER INFORMATION CONTACT:
    Deepak T. Pai, Staff Attorney, at (202) 942-0574, or Robert A. 
    Robertson, Branch Chief, at (202) 942-0564 (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 
    SEC's Public Reference Branch.
    
    Applicants' Representations
    
        1. The Partnership was organized in 1984 as a limited partnership 
    under New York state Law. It has not been registered under the Act in 
    reliance upon section 3(c)(1) of the Act, and the Partnership interests 
    have not been registered under the Securities Act of 1933 in reliance 
    upon section 4(2) thereof. The general partners of the Partnership, 
    Messrs. Stephen Ely, Colin C. Ferenbach, and Denis M. Turko (the 
    ``General Partners''), have exclusive control over the management and 
    business of the Partnership. The General Partners have maintained an 
    investment in the Partnership not less that 1% of the net assets of the 
    Partnership, and are allocated net income, gains, and losses of the 
    Partnership in proportion to their respective investments.
        2. The Fund is the initial series of The Haven Capital Management 
    Trust, a business trust formed under the laws of Delaware on March 17, 
    1994. The Fund, an open-end management investment company, filed a 
    notification of registration under the Act on Form N-8A and a 
    registration statement under the Act and the Securities Act on Form N-
    1A on March 18, 1994. The registration statement has not yet been 
    declared effective, and no offering of shares has commenced.
        3. The Adviser is the investment adviser to the Partnership and 
    will be the investment adviser to the Fund. PFPC, Inc. and Provident 
    Distributors, Inc., which are not affiliated with any of the 
    applicants, will act as the Fund's administrator and principal 
    underwriter, respectively. The Fund does not currently intend to enlist 
    the assistance of other broker-dealers to market shares and there is no 
    intention to advertise the Fund in newspapers or other media. Neither 
    the Adviser nor Provident intends to solicit widespread public interest 
    in the Fund.
        4. Applicants propose that, prior to offering the shares to the 
    public, the Fund will exchange shares for the assets of the 
    Partnership, less funds required to pay the liabilities of the 
    Partnership. Thereafter, the Partnership will dissolve and distribute 
    the shares it received to its partners pro rata, including the General 
    Partners. Partners of the Partnership will constitute all of the 
    holders of shares, except for shares representing seed capital 
    contributed to the Fund by the Adviser pursuant to section 14(a) of the 
    Act. The Fund was designed as a successor investment vehicle to the 
    Partnership, with investment objectives and policies substantially the 
    same as those of the Partnership. The same persons who selected the 
    investments for the Partnership will select them for the Fund.
        5. The Fund intends to adopt a plan of distribution pursuant to 
    rule 12b-1 under the Act. Under the rule 12b-1 plan, the Fund may spend 
    no more than 0.25% of its average daily net assets for sales activities 
    including compensation paid to Provident and the printing and mailing 
    of prospectuses and sales literature. The Fund will comply with rules 
    regarding distribution expenses adopted by the National Association of 
    Securities Dealers.
        6. The proposed exchange will be effected pursuant to an agreement 
    and plan of exchange (the ``Plan'') to be approved by the limited 
    partners of the Partnership. Under the Plan, the portfolio securities 
    of the Partnership will be acquired at their independent ``current 
    market price,'' as defined in rule 17a-7 under the Act. The Fund will 
    not acquire securities that, in the opinion of the Adviser, are 
    overvalued or would result in a violation of the Fund's investment 
    objectives, policies, or restrictions. It is not expected that the 
    Partnership will hold any such securities. Any remaining securities 
    will be liquidated by the partnership for cash and these proceeds 
    distributed pro rata to the partners of the Partnership.
        7. The General Partners of the Partnership will consider the 
    desirability of the exchange from the point of view of the Partnership 
    and must conclude that (a) the exchange is in the best interests of the 
    Partnership and its partners and (b) upon the exchange, the interests 
    of the partners of the Partnership will not be diluted as a result of 
    the exchange.
        8. The Fund's board of trustees will consider the desirability of 
    the exchange from the point of view of the Fund and a majority of the 
    trustees, including a majority of the non-interested members, must 
    conclude that: (a) The exchange is desirable as a business matter from 
    the point of view of the Fund; (b) the exchange is in the best interest 
    of the Fund; (c) upon the exchange, the interests of existing 
    shareholders of the Fund will not be diluted as a result of the 
    exchange; and (d) the terms of the exchange as reflected in the Plan 
    have been designed to meet the criteria contained in section 17(b) of 
    the Act. The trustees will consider each aspect of the exchange, 
    including: (i) The method of valuing the portfolio securities to be 
    acquired from the Partnership, (ii) the value of the shares to be 
    delivered to the Partnership, (iii) the procedure for selecting among 
    the portfolio securities of the Partnership, (iv) the possibility of 
    incurring excessive brokerage costs, (v) the allocation of the costs of 
    the exchange, (vi) the possibility of adverse tax consequences to 
    future shareholders of the Fund, (vii) the benefits from the exchange 
    accruing to the Adviser, and (viii) the benefits from the exchange 
    accruing to the General Partners.
        9. The exchange will not be effected unless: (a) The registration 
    statements of the Fund have been declared effective, (b) the limited 
    partners of the Partnership have approved the Plan and an amendment to 
    the partnership agreement authorizing the General Partners to take such 
    actions as they deem necessary or appropriate to effect the exchange, 
    (c) the requested order has been granted, and (d) the limited partners 
    have received an opinion of counsel that: (i) The distribution of 
    shares from the Partnership to its limited partners, which will be in 
    liquidation of the Partnership, will not cause taxable gain or loss to 
    be recognized by the limited partners, (ii) the basis to the limited 
    partners for the shares will be equal to the adjusted basis of the 
    limited partners' interests in the Partnership, and (iii) the limited 
    partners' holding periods with respect to the shares will include their 
    holding periods for their Partnership interests.
        10. The Partnership, the Fund, and the Adviser will each pay their 
    respective costs in connection with the forming of the Fund and 
    completing the exchange. No brokerage commission, fee, or other 
    remuneration will be paid in connection with the exchange.
    
    Applicants' Legal Conclusions
    
        1. Section 17(a) of the Act generally prohibits an affiliated 
    person of a registered investment company from selling to or purchasing 
    from such investment company any security. The Fund and the Partnership 
    may be affiliated persons of each other because they are under the 
    common control of the Adviser and the General Partners. Thus, the 
    proposed exchange may be prohibited by section 17(a). Section 17(b) 
    authorizes the SEC to exempt a proposed transaction from section 17(a) 
    if evidence establishes that the terms of the transaction, including 
    the consideration to be paid or received, are reasonable and fair and 
    do not involve overreaching on the part of any person concerned, the 
    transaction is consistent with the policies of the registered 
    investment company, and the transaction is consistent with the general 
    purposes of the Act.
        2. Applicants believe that the proposed transaction satisfies the 
    criteria of section 17(b). They contend that because the Fund and the 
    Partnership have similar investment objectives and policies, the Fund 
    will obtain portfolio securities that initially will be substantially 
    identical to those held by the Partnership. The Fund will acquire the 
    Partnership securities at their independent ``current market price.'' 
    Applicants believe that this price will be as advantageous to the Fund 
    as open-market purchases. In addition, by acquiring suitable securities 
    from the Partnership, the Fund will avoid incurring brokerage and other 
    transactions costs. Applicants believe that the exchange can be viewed 
    as a change in the form in which the assets are held, rather than as a 
    disposition giving rise to section 17(a) concerns.
    
        For the Commission, by the Division of Investment Management, 
    under delegated authority.
    Jonathan G. Katz,
    Secretary.
    [FR Doc. 94-10889 Filed 5-5-94; 8:45 am]
    BILLING CODE 8010-01-M
    
    
    

Document Information

Published:
05/06/1994
Department:
Securities and Exchange Commission
Entry Type:
Uncategorized Document
Action:
Notice of Application for Exemption under the Investment Company Act of 1940 (the ``Act'').
Document Number:
94-10889
Dates:
The application was filed on March 18, 1994. By supplemental letter dated April 29, 1994, counsel to applicants agreed to file an amendment during the notice period to make certain changes to its application. This notice reflects the changes to be made to the application by that amendment.
Pages:
0-0 (1 pages)
Docket Numbers:
Federal Register: May 6, 1994, Rel. No. IC-20262, 812-8898