SEC Company Response from GUGGENHEIM STRATEGIC OPPORTUNITIES FUND (GOF) (CIK 0001380936) (GOF) — Nov 24, 2010
GUGGENHEIM STRATEGIC OPPORTUNITIES FUND (GOF) (CIK 0001380936)
Date: Nov. 24, 2010 · CIK: 0001380936 · Accession: 0000891804-10-005809
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-168044, 811-21982
Letter
Office of Investment Management 100 F Street, NE Washington, DC 20549 RE: Claymore/Guggenheim Strategic Opportunities Fund File Nos. 811-21982 and 333-168044
Dear Ms. Browning:
We are in receipt of your letter, dated August 5, 2010, which sets forth your comments to the registration statement on Form N-2 filed by Claymore/Guggenheim Strategic Opportunities Fund (the “Fund”) on July 9, 2010 (the “Registration Statement”). We have considered your comments to the Registration Statement and, on behalf of the Fund, our responses to these comments are set forth below.
These changes will be reflected in Pre-Effective Amendment No. 1 to the Registration Statement, which the Fund intends to file on or about November 24, 2010 and will be marked to show all changes made since the initial filing of the Registration Statement.
General
Comment 1
Please advise the staff whether the Financial Industry Regulatory Authority has reviewed and passed upon the terms of the distribution arrangements, including all the compensation payable to the underwriters.
Response 1
Prior to any offering under the Fund’s shelf registration statement involving a FINRA Member, the base prospectus will be filed with FINRA and a “conditional no objections” letter will be received from FINRA. In connection with an offering under the Fund’s shelf registration statement involving a FINRA Member, such FINRA Member will file the terms of such offering with FINRA and receive a “415 no objections” letter approving the final offering terms and arrangements, including all the compensation payable to the underwriters.
Kimberly A. Browning
November 24, 2010
Page 2
—Calculation of Registration Fee Under the Securities Act of 1933
Comment 2
Please revise the Table to conform to the column presentation format and content requirements of Form N-2. In particular, please add a column entitled “Proposed Maximum Offering Price Per Unit” and revise the heading “Aggregate Offering Price” to “Proposed Maximum Aggregate Offering Price.”
Response 2
The Fund has revised the table accordingly. The Fund notes that it is registering a presently indeterminate number of Common Shares and therefore has calculated the registration fee “on the basis of the maximum aggregate offering price of all the securities listed in the ‘Calculation of Registration Fee’ table” in accordance with Rule 457(o) under the Securities Act of 1933, as amended, which states that in this case “[t]he number of shares or units of securities need not be included in the ‘Calculation of Registration Fee’ Table.” The Fund has added additional footnote disclosure below the table regarding the calculation of the fee pursuant to Rule 457(o).
Prospectus—Outside Front Cover Page—Total Offering Table
Comment 3
Please advise the staff why the base prospectus does not contain a form of the proceeds table as required by Item 1.1.g of Form N-2.
Response 3
The base prospectus does not contain a form of proceeds table because no securities will be offered pursuant to the base prospectus, unless accompanied by a prospectus supplement. Since no offering of securities is being made pursuant to the base prospectus without an accompanying prospectus supplement, the form of proceeds table is not required. Each prospectus supplement, other than a prospectus supplement relating to an at-the-market offering, will contain a form of proceeds table in accordance with the requirements of Item 1.1.g of Form N-2 with respect to that offering. Each prospectus supplement relating to an at-the-market offering will contain the information required by Instruction 1 to Item 1.1.g of Form N-2.
Comment 4
Please advise the staff why the filing does not include a form of the prospectus supplement?
Response 4
The Fund has included a form of prospectus supplement as requested.
Prospectus—Cover Page—Investment Parameters
Comment 5
The cover page discloses that the Fund may invest up to 60 percent of its “total assets in Income Securities rated below-investment grade (commonly referred to as ‘high-yield’ or ‘junk bonds’).” The latest
Kimberly A. Browning
November 24, 2010
Page 3
semi-annual report of the Fund indicates that the Fund invests less than 18 percent of its assets in junk. Should the cover page, summary or the prospectus disclosure be modified to reflect that the Fund invests over 71 percent of its assets in investment grade securities?
Response 5
The Fund seeks to achieve its investment objective by opportunistically investing in a wide range of Income Securities and Common Equity Securities, each as more fully described in the Prospectus. As a result, the Fund’s allocations to any given asset class or type of investment will vary over time, subject to the limitations and restrictions set forth in the Prospectus and SAI. Disclosure of the Fund’s current allocations to each type of security in which it may invest is not required by Form N-2 and the Fund believes that selectively disclosing its current allocations to certain types of investments would not benefit shareholders, particularly in light of the fact that the Prospectus relates to offerings on a delayed or continuous basis and such allocations may change over time. However, the Fund has added disclosure in the summary and body of the Prospectus that the percentage of its total assets allocated to a given type of investment may at any time be significantly less than the maximum amount permitted and has added disclosure under the heading “Investment Objective and Policies—Investment Policies—Credit Quality” that the Fund may investment without limitation in investment grade securities. In addition, the Fund notes that the Fund’s financial statements for the fiscal year ended May 31, 2010, including the portfolio of investments, will be incorporated by reference in the SAI.
Prospectus—Prospectus Summary—Investment Funds
Comment 6
The summary discloses that the Fund’s collective definition of “Investment Funds” includes “private investment funds.” Please disclose in plain English that private investment funds are commonly known as “hedge funds.”
Response 6
The Fund has added the requested disclosure.
Prospectus—Prospectus Summary—Affiliated Investment Funds
Comment 7
The summary and prospectus disclose that the Fund may invest in “Affiliated Investment Funds,” and that managed assets is reduced by those investment for purposes of calculating the advisory fee. Please delete the reference to these investments, or disclose prominently that the Fund is currently not investing in Affiliated Funds, and cannot do so unless the Fund files an application for, and the SEC issues an order of, exemption from provisions of the Investment Company Act 1940 Act (“1940 Act”). Please also disclose there is no assurance such an order would be issued.
Kimberly A. Browning
November 24, 2010
Page 4
Response 7
As investments in Affiliated Investment Funds is not presently a principal investment strategy of the Fund, the Fund has moved the discussion of Affiliated Investment Funds to the Statement of Additional Information and has added the referenced disclosure.
Prospectus—Prospectus Summary—Investment Objective and Philosophy
Comment 8
The investment objective of the Fund is total return, consisting of capital appreciation and income. The most recent semi-annual report indicates the Fund invests approximately 10 percent of its assets in common stock and primarily in debt securities rated above investment grade. Please disclose how the Fund obtains capital appreciation.
Response 8
The Fund’s investment objective is to maximize total return through a combination of current income and capital appreciation. In order to seek to achieve its investment objective, the Fund opportunistically invests in a wide range of Income Securities and Common Equity Securities, each as more fully described in the Prospectus. As a result, the Fund’s allocations to any given asset class or type of investment will vary over time, subject to the limitations and restrictions set forth in the Prospectus and SAI. The Fund may seek capital appreciation through its investments in Common Equity Securities and Income Securities, including through capital appreciation in the prices of Income Securities held by the Fund. Depending on the Fund’s allocations at any given time, the principal component of the Fund’s total return may be either current income or capital appreciation. In the current market environment, the Fund is seeking to maximize total return primarily though current income, supplemented by capital appreciation. The Sub-Adviser believes that the Fund’s current portfolio is structured to maximize total return in current market environments, in a manner consistent with the Fund’s investment objective, policies and restrictions.
Prospectus—Prospectus Summary—Investment Portfolio
Comment 9
This section lists the types of income securities in which the Fund will invest. The third bullet identifies “structured finance investments.” The latest semi-annual report of the Fund indicates that the Fund invests almost 67 percent of its assets in asset and mortgage-backed securities, and only 16 percent in corporate bonds. Should the summary and prospectus be revised to reflect the prevalence of structured finance investments?
Response 9
The Fund seeks to achieve its investment objective by opportunistically investing in a wide range of Income Securities and Common Equity Securities, each as more fully described in the Prospectus. As a result, the
Kimberly A. Browning
November 24, 2010
Page 5
Fund’s allocations to any given asset class or type of investment will vary over time, subject to the limitations and restrictions set forth in the Prospectus and SAI. In light of the current prevalence of structured finance investments, the Fund has added additional disclosure regarding such investments and their attendant risks in the Prospectus Summary and body of the Prospectus.
Prospectus—Prospectus Summary—Personal Property Asset Companies
Comment 10
The summary discloses that the Fund may invest in “Personal Property Asset Companies.” The summary states that these companies “own, produce, refine, process, transport and market ‘personal property assets’.” While the definition of a Personal Property Asset Company appears to be rather expansive, the summary and prospectus only give a few examples of companies that qualify, namely, “special situation transportation assets (e.g., railcars, ships, airplanes and automobiles) and collectibles (e.g., antiques, wine and fine art) (‘Personal Property Companies’).” Please clarify in the prospectus the nature of these companies, and why the performance of them is not expected to be highly correlated with traditional market indices. How much may the Fund invest in these companies, and disclose why the investments are made.
Response 10
Personal Property Asset Companies constitute a category of issuers of Income Securities and Common Equity Securities in which the Fund may invest. Given that these issuers presented special risk considerations that may not be present with other issuers, the Fund believed that additional disclosure was warranted. However, like other categories of issuers, the Fund has not adopted percentage limitations with respect to such categories of issuers other than those set forth in the Prospectus and SAI and would invest in Personal Property Asset Companies for the same reasons the Fund would invest in any other issuer of Income Securities or Common Equity Securities, to seek to achieve the Fund’s investment objective to maximize total return through a combination of current income and capital appreciation.
Personal Property Asset Companies include companies that seek to profit from the ownership, rental, leasing, financing or disposition of personal (as opposed to real) property. The Fund has revised disclosure to clarify the nature of these companies.
Prospectus—Prospectus Summary—Financial Leverage
Comment 11
This section discloses the various means the Fund may use to borrow or leverage. It appears from the most recent semi-annual report that the principal means of leverage for the Fund recently has been through
Kimberly A. Browning
November 24, 2010
Page 6
reverse repurchase agreements. Should the summary or the prospectus be revised to reflect more precisely how the Fund is leveraging?
Response 11
As noted in the Fund’s annual report to shareholders for the fiscal year ended May 31, 2010, “[f]rom the Fund’s inception through late 2008, GPAM employed leverage through reverse repurchase agreements, under which they lend securities and receive cash in return which can be used for additional investments. In November 2008, the Fund entered into a committed financing facility through BNP Paribas, a leading European bank. [The Fund] currently employs leverage via both reverse repurchase agreements and the BNP Paribas facility, in addition to the TALF program.” Each form of Financial Leverage currently utilized by the Fund is discussed in the Fund’s Prospectus. On the inside front cover page of the Prospectus and in the Prospectus Summary and body of the Prospectus, the percentage of the Fund’s Managed Assets attributable to each form of Financial Leverage utilized by the Fund, as of May 31, 2010, is disclosed. In addition, the Fund has reviewed disclosure throughout the Prospectus and made revisions where appropriate to properly reflect the Fund’s current use of Financial Leverage.
Comment 12
The term “Financial Leverage” as used in the prospectus appears to include any borrowings or issuance of preferred shares, and not those used for the purpose of purchasing additional securities (rather than the payment of outstanding liabilities or expenses). Please clarify the definition.
Response 12
“Financial Leverage” as defined in the prospectus includes (i) the issuance of senior securities, (ii) borrowings or the issuance of debt or (iii) reverse repurchase agreements, dollar rolls or similar transactions. As noted above, the Fund has reviewed disclosure throughout the Prospectus and made revisions where appropriate to properly reflect the Fund’s current use of Financial Leverage.
Prospectus—Prospectus Summary—Special Risk Considerations
Comment 13
It appears that the Fund will engage in various transactions involving counterparty risks. Accordingly, please add a paragraph that discloses all counterparty risk factors. In particular, disclose how the adviser assesses the creditworthiness of counterparties.
Response 13
The Fund has added the requested disclosure.
Comment 14
Under “Private Securities Risks,” please disclose the liquidity of these investments. Also, disclose the limit, if any, on the amount of assets the Fund may invest in illiquid investments.
Kimberly A. Browning
November 24, 2010
Page 7
Response 14
The Fund has added the requested disclosure.
Prospectus—Prospectus Summary—Summary of Fund Expenses
Comment 15
The investment advisor is compensated based on Managed Assets. The fee table discloses annual fund expenses, including advisory fees, on the basis of net assets. Please include a footnote to explain the conversion of Managed Assets to net assets.
Response 15
The Fund has added the requested footnote.
Comment 16
In the fee table, please revise the caption “Acquired Investment Fund fees and expenses” to “Acquired Fund Fees and Expenses.” See General Instruction 10.a. to Item 3 of Form N-2.
Response 16
The Fund has revised the caption as requested.
Comment 17
Footnote 6 to the fee table states that Acquired Fund Fees and Expenses (“AFFE”), “include estimates of base fees plus performance-
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CORRESP
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filename1.htm
gug49104-corresp.htm
[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
November 24, 2010
Kimberly A. Browning
Senior Counsel
U.S. Securities and Exchange Commission
Office of Investment Management
Mail Stop 8626
100 F Street, NE
Washington, DC 20549
RE: Claymore/Guggenheim Strategic Opportunities Fund
File Nos. 811-21982 and 333-168044
Dear Ms. Browning:
We are in receipt of your letter, dated August 5, 2010, which sets forth your comments to the registration statement on Form N-2 filed by Claymore/Guggenheim Strategic Opportunities Fund (the “Fund”) on July 9, 2010 (the “Registration Statement”). We have considered your comments to the Registration Statement and, on behalf of the Fund, our responses to these comments are set forth below.
These changes will be reflected in Pre-Effective Amendment No. 1 to the Registration Statement, which the Fund intends to file on or about November 24, 2010 and will be marked to show all changes made since the initial filing of the Registration Statement.
General
Comment 1
Please advise the staff whether the Financial Industry Regulatory Authority has reviewed and passed upon the terms of the distribution arrangements, including all the compensation payable to the underwriters.
Response 1
Prior to any offering under the Fund’s shelf registration statement involving a FINRA Member, the base prospectus will be filed with FINRA and a “conditional no objections” letter will be received from FINRA. In connection with an offering under the Fund’s shelf registration statement involving a FINRA Member, such FINRA Member will file the terms of such offering with FINRA and receive a “415 no objections” letter approving the final offering terms and arrangements, including all the compensation payable to the underwriters.
Kimberly A. Browning
November 24, 2010
Page 2
—Calculation of Registration Fee Under the Securities Act of 1933
Comment 2
Please revise the Table to conform to the column presentation format and content requirements of Form N-2. In particular, please add a column entitled “Proposed Maximum Offering Price Per Unit” and revise the heading “Aggregate Offering Price” to “Proposed Maximum Aggregate Offering Price.”
Response 2
The Fund has revised the table accordingly. The Fund notes that it is registering a presently indeterminate number of Common Shares and therefore has calculated the registration fee “on the basis of the maximum aggregate offering price of all the securities listed in the ‘Calculation of Registration Fee’ table” in accordance with Rule 457(o) under the Securities Act of 1933, as amended, which states that in this case “[t]he number of shares or units of securities need not be included in the ‘Calculation of Registration Fee’ Table.” The Fund has added additional footnote disclosure below the table regarding the calculation of the fee pursuant to Rule 457(o).
Prospectus—Outside Front Cover Page—Total Offering Table
Comment 3
Please advise the staff why the base prospectus does not contain a form of the proceeds table as required by Item 1.1.g of Form N-2.
Response 3
The base prospectus does not contain a form of proceeds table because no securities will be offered pursuant to the base prospectus, unless accompanied by a prospectus supplement. Since no offering of securities is being made pursuant to the base prospectus without an accompanying prospectus supplement, the form of proceeds table is not required. Each prospectus supplement, other than a prospectus supplement relating to an at-the-market offering, will contain a form of proceeds table in accordance with the requirements of Item 1.1.g of Form N-2 with respect to that offering. Each prospectus supplement relating to an at-the-market offering will contain the information required by Instruction 1 to Item 1.1.g of Form N-2.
Comment 4
Please advise the staff why the filing does not include a form of the prospectus supplement?
Response 4
The Fund has included a form of prospectus supplement as requested.
Prospectus—Cover Page—Investment Parameters
Comment 5
The cover page discloses that the Fund may invest up to 60 percent of its “total assets in Income Securities rated below-investment grade (commonly referred to as ‘high-yield’ or ‘junk bonds’).” The latest
Kimberly A. Browning
November 24, 2010
Page 3
semi-annual report of the Fund indicates that the Fund invests less than 18 percent of its assets in junk. Should the cover page, summary or the prospectus disclosure be modified to reflect that the Fund invests over 71 percent of its assets in investment grade securities?
Response 5
The Fund seeks to achieve its investment objective by opportunistically investing in a wide range of Income Securities and Common Equity Securities, each as more fully described in the Prospectus. As a result, the Fund’s allocations to any given asset class or type of investment will vary over time, subject to the limitations and restrictions set forth in the Prospectus and SAI. Disclosure of the Fund’s current allocations to each type of security in which it may invest is not required by Form N-2 and the Fund believes that selectively disclosing its current allocations to certain types of investments would not benefit shareholders, particularly in light of the fact that the Prospectus relates to offerings on a delayed or continuous basis and such allocations may change over time. However, the Fund has added disclosure in the summary and body of the Prospectus that the percentage of its total assets allocated to a given type of investment may at any time be significantly less than the maximum amount permitted and has added disclosure under the heading “Investment Objective and Policies—Investment Policies—Credit Quality” that the Fund may investment without limitation in investment grade securities. In addition, the Fund notes that the Fund’s financial statements for the fiscal year ended May 31, 2010, including the portfolio of investments, will be incorporated by reference in the SAI.
Prospectus—Prospectus Summary—Investment Funds
Comment 6
The summary discloses that the Fund’s collective definition of “Investment Funds” includes “private investment funds.” Please disclose in plain English that private investment funds are commonly known as “hedge funds.”
Response 6
The Fund has added the requested disclosure.
Prospectus—Prospectus Summary—Affiliated Investment Funds
Comment 7
The summary and prospectus disclose that the Fund may invest in “Affiliated Investment Funds,” and that managed assets is reduced by those investment for purposes of calculating the advisory fee. Please delete the reference to these investments, or disclose prominently that the Fund is currently not investing in Affiliated Funds, and cannot do so unless the Fund files an application for, and the SEC issues an order of, exemption from provisions of the Investment Company Act 1940 Act (“1940 Act”). Please also disclose there is no assurance such an order would be issued.
Kimberly A. Browning
November 24, 2010
Page 4
Response 7
As investments in Affiliated Investment Funds is not presently a principal investment strategy of the Fund, the Fund has moved the discussion of Affiliated Investment Funds to the Statement of Additional Information and has added the referenced disclosure.
Prospectus—Prospectus Summary—Investment Objective and Philosophy
Comment 8
The investment objective of the Fund is total return, consisting of capital appreciation and income. The most recent semi-annual report indicates the Fund invests approximately 10 percent of its assets in common stock and primarily in debt securities rated above investment grade. Please disclose how the Fund obtains capital appreciation.
Response 8
The Fund’s investment objective is to maximize total return through a combination of current income and capital appreciation. In order to seek to achieve its investment objective, the Fund opportunistically invests in a wide range of Income Securities and Common Equity Securities, each as more fully described in the Prospectus. As a result, the Fund’s allocations to any given asset class or type of investment will vary over time, subject to the limitations and restrictions set forth in the Prospectus and SAI. The Fund may seek capital appreciation through its investments in Common Equity Securities and Income Securities, including through capital appreciation in the prices of Income Securities held by the Fund. Depending on the Fund’s allocations at any given time, the principal component of the Fund’s total return may be either current income or capital appreciation. In the current market environment, the Fund is seeking to maximize total return primarily though current income, supplemented by capital appreciation. The Sub-Adviser believes that the Fund’s current portfolio is structured to maximize total return in current market environments, in a manner consistent with the Fund’s investment objective, policies and restrictions.
Prospectus—Prospectus Summary—Investment Portfolio
Comment 9
This section lists the types of income securities in which the Fund will invest. The third bullet identifies “structured finance investments.” The latest semi-annual report of the Fund indicates that the Fund invests almost 67 percent of its assets in asset and mortgage-backed securities, and only 16 percent in corporate bonds. Should the summary and prospectus be revised to reflect the prevalence of structured finance investments?
Response 9
The Fund seeks to achieve its investment objective by opportunistically investing in a wide range of Income Securities and Common Equity Securities, each as more fully described in the Prospectus. As a result, the
Kimberly A. Browning
November 24, 2010
Page 5
Fund’s allocations to any given asset class or type of investment will vary over time, subject to the limitations and restrictions set forth in the Prospectus and SAI. In light of the current prevalence of structured finance investments, the Fund has added additional disclosure regarding such investments and their attendant risks in the Prospectus Summary and body of the Prospectus.
Prospectus—Prospectus Summary—Personal Property Asset Companies
Comment 10
The summary discloses that the Fund may invest in “Personal Property Asset Companies.” The summary states that these companies “own, produce, refine, process, transport and market ‘personal property assets’.” While the definition of a Personal Property Asset Company appears to be rather expansive, the summary and prospectus only give a few examples of companies that qualify, namely, “special situation transportation assets (e.g., railcars, ships, airplanes and automobiles) and collectibles (e.g., antiques, wine and fine art) (‘Personal Property Companies’).” Please clarify in the prospectus the nature of these companies, and why the performance of them is not expected to be highly correlated with traditional market indices. How much may the Fund invest in these companies, and disclose why the investments are made.
Response 10
Personal Property Asset Companies constitute a category of issuers of Income Securities and Common Equity Securities in which the Fund may invest. Given that these issuers presented special risk considerations that may not be present with other issuers, the Fund believed that additional disclosure was warranted. However, like other categories of issuers, the Fund has not adopted percentage limitations with respect to such categories of issuers other than those set forth in the Prospectus and SAI and would invest in Personal Property Asset Companies for the same reasons the Fund would invest in any other issuer of Income Securities or Common Equity Securities, to seek to achieve the Fund’s investment objective to maximize total return through a combination of current income and capital appreciation.
Personal Property Asset Companies include companies that seek to profit from the ownership, rental, leasing, financing or disposition of personal (as opposed to real) property. The Fund has revised disclosure to clarify the nature of these companies.
Prospectus—Prospectus Summary—Financial Leverage
Comment 11
This section discloses the various means the Fund may use to borrow or leverage. It appears from the most recent semi-annual report that the principal means of leverage for the Fund recently has been through
Kimberly A. Browning
November 24, 2010
Page 6
reverse repurchase agreements. Should the summary or the prospectus be revised to reflect more precisely how the Fund is leveraging?
Response 11
As noted in the Fund’s annual report to shareholders for the fiscal year ended May 31, 2010, “[f]rom the Fund’s inception through late 2008, GPAM employed leverage through reverse repurchase agreements, under which they lend securities and receive cash in return which can be used for additional investments. In November 2008, the Fund entered into a committed financing facility through BNP Paribas, a leading European bank. [The Fund] currently employs leverage via both reverse repurchase agreements and the BNP Paribas facility, in addition to the TALF program.” Each form of Financial Leverage currently utilized by the Fund is discussed in the Fund’s Prospectus. On the inside front cover page of the Prospectus and in the Prospectus Summary and body of the Prospectus, the percentage of the Fund’s Managed Assets attributable to each form of Financial Leverage utilized by the Fund, as of May 31, 2010, is disclosed. In addition, the Fund has reviewed disclosure throughout the Prospectus and made revisions where appropriate to properly reflect the Fund’s current use of Financial Leverage.
Comment 12
The term “Financial Leverage” as used in the prospectus appears to include any borrowings or issuance of preferred shares, and not those used for the purpose of purchasing additional securities (rather than the payment of outstanding liabilities or expenses). Please clarify the definition.
Response 12
“Financial Leverage” as defined in the prospectus includes (i) the issuance of senior securities, (ii) borrowings or the issuance of debt or (iii) reverse repurchase agreements, dollar rolls or similar transactions. As noted above, the Fund has reviewed disclosure throughout the Prospectus and made revisions where appropriate to properly reflect the Fund’s current use of Financial Leverage.
Prospectus—Prospectus Summary—Special Risk Considerations
Comment 13
It appears that the Fund will engage in various transactions involving counterparty risks. Accordingly, please add a paragraph that discloses all counterparty risk factors. In particular, disclose how the adviser assesses the creditworthiness of counterparties.
Response 13
The Fund has added the requested disclosure.
Comment 14
Under “Private Securities Risks,” please disclose the liquidity of these investments. Also, disclose the limit, if any, on the amount of assets the Fund may invest in illiquid investments.
Kimberly A. Browning
November 24, 2010
Page 7
Response 14
The Fund has added the requested disclosure.
Prospectus—Prospectus Summary—Summary of Fund Expenses
Comment 15
The investment advisor is compensated based on Managed Assets. The fee table discloses annual fund expenses, including advisory fees, on the basis of net assets. Please include a footnote to explain the conversion of Managed Assets to net assets.
Response 15
The Fund has added the requested footnote.
Comment 16
In the fee table, please revise the caption “Acquired Investment Fund fees and expenses” to “Acquired Fund Fees and Expenses.” See General Instruction 10.a. to Item 3 of Form N-2.
Response 16
The Fund has revised the caption as requested.
Comment 17
Footnote 6 to the fee table states that Acquired Fund Fees and Expenses (“AFFE”), “include estimates of base fees plus performance-