SEC Company Response from Evanston Alternative Opportunities Fund (CIK 0001589390) — Feb 27, 2020
Evanston Alternative Opportunities Fund (CIK 0001589390)
Date: Feb. 27, 2020 · CIK: 0001589390 · Accession: 0000898432-20-000209
AI Filing Summary & Sentiment
File numbers found in text: 333-219360, 811-22904
Letter
VIA EDGAR Division of Investment Management Attention: Rebecca Marquigny Re: Evanston Alternative Opportunities Fund — File Nos. 333-219360 and 811-22904 Proxy Statement on Schedule 14A
Dear Ms. Marquigny:
On behalf of Evanston Alternative Opportunities Fund (the “Fund”), we submit this letter in response to comments received by telephone on February 18, 2020, from the staff (“Staff”) of the Securities and Exchange Commission (the “SEC”) with respect to the preliminary proxy statement on Schedule 14A of the Fund filed on February 10, 2020 (the “Proxy Statement”). We have discussed the Staff’s comments with representatives of the Fund. The Staff’s comments are described below and have been summarized to the best of our understanding. Where a response provides revised Proxy Statement language, additions are bolded and underlined and deletions are bolded and struck. Where applicable, the Fund will make conforming changes in each place where similar language appears. Unless otherwise stated, capitalized terms have the same meaning as in the Proxy Statement.
1.
Comment — The Staff notes that page 1 of the shareholder letter describes the anticipated change as follows: “The Adviser is in the process of making certain changes to its ownership structure whereby the portion of the Adviser currently owned by private funds sponsored by TA Associates, Inc. will be directly or indirectly acquired primarily by employees of the Adviser during the first quarter of 2020 (the “Proposed Transaction”).” Please consider describing the Proposed Transaction in a more concise manner.
Response — In response to the Staff’s comment, the Fund will revise the noted disclosure as follows:
The Adviser is in the process of making certain changes to its ownership structure. whereby Evanston Capital Management, L.P., an entity that is anticipated to be primarily owned by employees of the Adviser, will acquire all of the equity interests in the Adviser, including the portion of the Adviser currently owned by private funds sponsored by TA Associates, Inc. will be directly or indirectly acquired primarily by employees of the
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Adviser (the “Proposed Transaction”) during the first quarter of 2020(the “Proposed Transaction”).
2.
Comment — The Staff notes that page 1 of the shareholder letter includes the following sentence: “The Interim Advisory Agreement will automatically terminate upon the approval of shareholders of the Fund of the New Advisory Agreement.” For clarity, please describe with more particularity when this agreement would terminate, and state whether there is a possibility that the Interim Advisory Agreement would not be needed.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
To allow the Adviser to continue serving as the investment adviser to the Fund without any interruption, after the termination of the Current Advisory Agreement, the Board of Trustees of the Fund (the “Board”) has approved an interim investment advisory agreement between the Adviser and the Fund (the “Interim Advisory Agreement”) that meets the requirements of Rule 15a-4 under the 1940 Act, including that the duration of the Interim Advisory Agreement will be no greater than 150 days following the termination of the Current Advisory Agreement, but in all other respects has identical terms as the Current Advisory Agreement. The Interim Advisory Agreement will automatically terminate upon the approval of shareholders of the Fund of the New Advisory Agreement. As an example, if the Proposed Transaction closed on March 31, 2020, which would result in the Current Advisory Agreement terminating on that date, the Interim Advisory Agreement would terminate on the earlier of the approval of the New Advisory Agreement by shareholders or August 28, 2020. Shareholders are being asked to approve the New Advisory Agreement on May 11, 2020.
Supplementally, the Fund notes that because the Proposed Transaction is expected to close by the end of the first quarter and shareholders are being asked to approve the New Advisory Agreement on May 11, 2020, the Interim Advisory Agreement is expected to be required.
3.
Comment — The Staff notes that the shareholder letter states: “Please submit your proxy via the internet, phone or mail as soon as possible.” Please specifically state the date by which the executed proxy card has to be received to be counted.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
To ensure that your vote is counted, your executed proxy card must be received by 11:59 p.m. (Eastern Time) on Sunday, May 10, 2020.
4.
Comment —The Staff notes that the Fund includes phone numbers for Ken Meister and Tracey Balderson in the Notice of Special Meeting of Shareholders. Please confirm these phone numbers are toll-free or update with toll-free numbers.
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Response — In response to the Staff’s comment, the Fund will revise the disclosure with a toll-free number as follows:
If you would like additional information concerning the proposals described above, please call Ken Meister (President and Chief Operating Officer, 847-328-4476) or Tracey Balderson (Vice President – Investor Administration, 847-563-5157) of Evanston Capital Management, LLC Monday through Friday between 8:30 a.m. and 5:00 p.m. (Central Time) at 833-877-0116.
5.
Comment — Under “Proposal 1” on page 1 of the Questions and Answers section of the Proxy Statement:
a.
Please explicitly state that the Proxy Statement is not asking shareholders to approve the Proposed Transaction.
b.
The Staff notes the following sentence: “The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction.” Please explain what this means to shareholders in practical terms. Would the current advisory agreement remain in effect if the shareholders reject the proposal? If either proposal requires the other to be approved, please state so.
Response — In response to the Staff’s comments, the Fund will add the following disclosure:
The Proposed Transaction will be deemed a change of control of the Adviser that would result in an “assignment” of the Current Advisory Agreement under the 1940 Act. To allow the Adviser to continue serving as the investment adviser to the Fund without any interruption after the termination of the Current Advisory Agreement, the Board has approved an interim investment advisory agreement between the Adviser and the Fund (the “Interim Advisory Agreement”) that meets the requirements of Rule 15a-4 under the 1940 Act, including that the duration of the Interim Advisory Agreement will be no greater than 150 days following the termination of the Current Advisory Agreement. The Interim Advisory Agreement will automatically terminate upon the approval of shareholders of the Fund of the New Advisory Agreement. As an example, if the Proposed Transaction closed on March 31, 2020, which would result in the Current Advisory Agreement terminating on that date, the Interim Advisory Agreement would terminate on the earlier of the approval of the New Advisory Agreement by shareholders or August 28, 2020. Shareholders are being asked to approve the New Advisory Agreement on May 11, 2020.
Under Section 15 of the 1940 Act, the Adviser can continue to serve as the investment adviser to the Fund under the New Advisory Agreement only if the agreement is approved by the Independent Trustees and shareholders of the Fund. Accordingly, shareholders of the Fund are being asked to approve the New Advisory Agreement. No changes are
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
expected in the services provided by the Adviser to the Fund or in the personnel at the Adviser providing those services.
The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction. If the Proposed Transaction is not consummated, the Current Advisory Agreement would not be terminated and would remain in effect. Approval of Proposal 1 is not contingent on approval of Proposal 2 also being received at the Meeting. Shareholders are NOT being asked to approve the Proposed Transaction.
6.
Comment — Under “Proposal 2” on page 2 of the Questions and Answers section of the Proxy Statement, the Staff notes the following sentence: “The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction.” Please explain what this means to shareholders in practical terms. Will Mr. Adams become a member of board if approved by shareholders, but the Proposed Transaction is not consummated? If either proposal requires the other to be approved, please state so.
Response — In response to the Staff’s comments, the Fund will add the following disclosure:
In connection with the change of control, the Adviser has agreed to take certain actions to comply with Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive “safe harbor” for the Adviser or any affiliated persons thereof to receive any amount or benefit in connection with a change in control of the Adviser as long as at least 75% of the Trustees of the Fund are not “interested persons” as the term is defined in the 1940 Act (“Independent Trustees”), among other requirements. The Board currently consists of less than 75% Independent Trustees. Accordingly, shareholders of the Fund are being asked to approve the election of Mr. Adams as an Independent Trustee to satisfy this condition under Section 15(f).
The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction. If the Proposed Transaction is not consummated, Mr. Adams will not become a trustee of the Fund. Approval of Proposal 2 is not contingent on approval of Proposal 1 also being received at the Meeting. Shareholders are NOT being asked to approve the Proposed Transaction.
7.
Comment — Under “How do I vote” on page 4 of the Questions and Answers section of the Proxy Statement, please specifically state the date by which the executed proxy card has to be received to be counted.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
To ensure that your vote is counted, your executed proxy card must be received by 11:59 p.m. (Eastern Time) on Sunday, May 10, 2020.
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
8.
Comment —On Page 5 of the Proxy Statement, under “Solicitation of Proxies,” please state that $3,000 is the approximate cost of the entire solicitation, not just the Broadridge portion of a larger solicitation expense. If in fact total expenses are higher, indicate the total approximate cost.
Response — In response to the Staff’s comment, the Fund has reviewed Item 4(a) of Schedule 14A, which requires in relevant part as follows: (1) if the solicitation is to be made by specially, engaged employees or paid solicitors, state (i) the material features of any contract or arrangement for such solicitation and identify the parties, and (ii) the cost or anticipated cost thereof; and (2) state the names of the persons by whom the cost of solicitation has been or will be borne, directly or indirectly. Accordingly, the Fund will revise the disclosure as follows:
The Adviser has retained Broadridge Financial Solutions (“Broadridge”), a third party proxy vendor, to assist in the proxy solicitation and tabulation. The Adviser, and not the Fund, will bear all costs related to the Proposed Transaction and this Proxy Statement. This includes Broadridge’s fees, which are estimated to be approximately $4,200$3,000, which includes and include the costs of typesetting, filing, printing, and mailing the proxy materials. but excludes The Adviser will also bear any legal expenses to prepare the proxy materials and other miscellaneous related expenses.
9.
Comment — On Page 6 of the Proxy Statement, the Staff notes the following sentence: “With respect to Proposal 2, the affirmative vote of a plurality of votes cast at the Meeting is required for the approval of the election of William Adams IV as a Trustee, as long as a quorum is present at the Meeting.” Please clarify the practical effect of the plurality requirement in this scenario where the nominee runs unopposed.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
With respect to Proposal 2, the affirmative vote of a plurality of votes cast at the Meeting is required for the approval of the election of William Adams IV as a Trustee, as long as a quorum is present at the Meeting. A nominee achieves a plurality by receiving the highest number of favorable votes cast for an open directorship position, even if they do not receive a majority of the votes cast. When a nominee runs unopposed and receives any votes, other votes to withhold and votes against have no effect on the outcome of the election.
10.
Comment — The Staff notes that the discussion of the Board’s approval of the proposals is described in the future tense in certain locations, but in other locations it is in the past tense. Please make consistent.
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Response — The Fund will revise the Proxy Statement to consistently use the past tense when discussing the Board’s approval of the proposals. Supplementally, the Fund notes that the Membership Interest Purchase Agreement has now been signed and the language in the Proxy Statement with respect to this agreement will be adjusted accordingly.
11.
Comment — Please confirm whether Adam Blitz owns 10% or more of the outstanding voting securit
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CORRESP
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filename1.htm
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Cal J. Gilmartin
(617) 951-9103 (phone)
cal.gilmartin@klgates.com
February 27, 2020
VIA EDGAR
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 02549
Attention: Rebecca Marquigny
Re:
Evanston Alternative Opportunities Fund — File Nos. 333-219360 and 811-22904
Proxy Statement on Schedule 14A
Dear Ms. Marquigny:
On behalf of Evanston Alternative Opportunities Fund (the “Fund”), we submit this letter in response to comments received by telephone on February 18, 2020, from the staff (“Staff”) of the
Securities and Exchange Commission (the “SEC”) with respect to the preliminary proxy statement on Schedule 14A of the Fund filed on February 10, 2020 (the “Proxy Statement”). We have discussed the Staff’s comments with representatives of the Fund.
The Staff’s comments are described below and have been summarized to the best of our understanding. Where a response provides revised Proxy Statement language, additions are bolded and underlined and deletions are bolded and struck. Where applicable,
the Fund will make conforming changes in each place where similar language appears. Unless otherwise stated, capitalized terms have the same meaning as in the Proxy Statement.
1.
Comment — The Staff notes that page 1 of the shareholder letter describes the anticipated change as follows: “The Adviser is in the process of making certain changes to its ownership structure
whereby the portion of the Adviser currently owned by private funds sponsored by TA Associates, Inc. will be directly or indirectly acquired primarily by employees of the Adviser during the first quarter of 2020 (the “Proposed
Transaction”).” Please consider describing the Proposed Transaction in a more concise manner.
Response — In response to the Staff’s comment, the Fund will revise the noted disclosure as follows:
The Adviser is in the process of making certain changes to its ownership structure. whereby Evanston Capital Management, L.P., an entity that is anticipated to be primarily owned by employees of the Adviser, will acquire all of the equity interests in the Adviser, including the portion of the
Adviser currently owned by private funds sponsored by TA Associates, Inc. will be directly or indirectly acquired primarily by employees of the
1
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Adviser (the “Proposed Transaction”) during
the first quarter of 2020(the “Proposed Transaction”).
2.
Comment — The Staff notes that page 1 of the shareholder letter includes the following sentence: “The Interim Advisory Agreement will automatically terminate upon the approval of shareholders of
the Fund of the New Advisory Agreement.” For clarity, please describe with more particularity when this agreement would terminate, and state whether there is a possibility that the Interim Advisory Agreement would not be needed.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
To allow the Adviser to continue serving as the investment adviser to the Fund without any interruption, after the termination of the Current Advisory Agreement, the Board of
Trustees of the Fund (the “Board”) has approved an interim investment advisory agreement between the Adviser and the Fund (the “Interim Advisory Agreement”) that meets the requirements of Rule 15a-4 under the 1940 Act, including that the duration of
the Interim Advisory Agreement will be no greater than 150 days following the termination of the Current Advisory Agreement, but in all other respects has identical terms as the Current Advisory Agreement. The Interim Advisory Agreement will
automatically terminate upon the approval of shareholders of the Fund of the New Advisory Agreement. As an example, if the Proposed Transaction closed on March 31, 2020, which would result in the Current Advisory
Agreement terminating on that date, the Interim Advisory Agreement would terminate on the earlier of the approval of the New Advisory Agreement by shareholders or August 28, 2020. Shareholders are being asked to approve the New Advisory Agreement
on May 11, 2020.
Supplementally, the Fund notes that because the Proposed Transaction is expected to close by the end of the first quarter and shareholders are being asked to approve the New
Advisory Agreement on May 11, 2020, the Interim Advisory Agreement is expected to be required.
3.
Comment — The Staff notes that the shareholder letter states: “Please submit your proxy via the internet, phone or mail as soon as possible.” Please specifically state the date by which the
executed proxy card has to be received to be counted.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
To ensure that your vote is counted, your executed proxy card must be received by 11:59 p.m. (Eastern Time) on Sunday, May 10, 2020.
4.
Comment —The Staff notes that the Fund includes phone numbers for Ken Meister and Tracey Balderson in the Notice of Special Meeting of Shareholders. Please confirm these phone numbers are
toll-free or update with toll-free numbers.
2
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Response — In response to the Staff’s comment, the Fund will revise the disclosure with a toll-free number as follows:
If you would like additional information concerning the proposals described above, please call Ken Meister (President and Chief Operating Officer,
847-328-4476) or Tracey Balderson (Vice President – Investor Administration, 847-563-5157) of Evanston Capital Management, LLC Monday through Friday between 8:30 a.m. and
5:00 p.m. (Central Time) at 833-877-0116.
5.
Comment — Under “Proposal 1” on page 1 of the Questions and Answers section of the Proxy Statement:
a.
Please explicitly state that the Proxy Statement is not asking shareholders to approve the Proposed Transaction.
b.
The Staff notes the following sentence: “The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction.” Please explain what this means to shareholders in practical terms. Would the current
advisory agreement remain in effect if the shareholders reject the proposal? If either proposal requires the other to be approved, please state so.
Response — In response to the Staff’s comments, the Fund will add the following disclosure:
The Proposed Transaction will be deemed a change of control of the Adviser that would result in an “assignment” of the Current Advisory Agreement under the 1940 Act. To allow the
Adviser to continue serving as the investment adviser to the Fund without any interruption after the termination of the Current Advisory Agreement, the Board has approved an interim investment advisory agreement between the Adviser and the Fund (the
“Interim Advisory Agreement”) that meets the requirements of Rule 15a-4 under the 1940 Act, including that the duration of the Interim Advisory Agreement will be no greater than 150 days following the termination of the Current Advisory Agreement.
The Interim Advisory Agreement will automatically terminate upon the approval of shareholders of the Fund of the New Advisory Agreement. As an example, if the Proposed Transaction closed on March 31, 2020, which
would result in the Current Advisory Agreement terminating on that date, the Interim Advisory Agreement would terminate on the earlier of the approval of the New Advisory Agreement by shareholders or August 28, 2020. Shareholders are being asked
to approve the New Advisory Agreement on May 11, 2020.
Under Section 15 of the 1940 Act, the Adviser can continue to serve as the investment adviser to the Fund under the New Advisory Agreement only if the agreement is approved by
the Independent Trustees and shareholders of the Fund. Accordingly, shareholders of the Fund are being asked to approve the New Advisory Agreement. No changes are
3
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
expected in the services provided by the Adviser to the Fund or in the personnel at the Adviser providing those services.
The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction. If the Proposed Transaction is not
consummated, the Current Advisory Agreement would not be terminated and would remain in effect. Approval of Proposal 1 is not contingent on approval of Proposal 2 also being received at the Meeting. Shareholders are NOT being asked to approve the
Proposed Transaction.
6.
Comment — Under “Proposal 2” on page 2 of the Questions and Answers section of the Proxy Statement, the Staff notes the following sentence: “The implementation of each Proposal is contingent upon
the consummation of the Proposed Transaction.” Please explain what this means to shareholders in practical terms. Will Mr. Adams become a member of board if approved by shareholders, but the Proposed Transaction is not consummated? If
either proposal requires the other to be approved, please state so.
Response — In response to the Staff’s comments, the Fund will add the following disclosure:
In connection with the change of control, the Adviser has agreed to take certain actions to comply with Section 15(f) of the 1940 Act. Section 15(f) provides a non-exclusive
“safe harbor” for the Adviser or any affiliated persons thereof to receive any amount or benefit in connection with a change in control of the Adviser as long as at least 75% of the Trustees of the Fund are not “interested persons” as the term is
defined in the 1940 Act (“Independent Trustees”), among other requirements. The Board currently consists of less than 75% Independent Trustees. Accordingly, shareholders of the Fund are being asked to approve the election of Mr. Adams as an
Independent Trustee to satisfy this condition under Section 15(f).
The implementation of each Proposal is contingent upon the consummation of the Proposed Transaction. If the Proposed Transaction is not
consummated, Mr. Adams will not become a trustee of the Fund. Approval of Proposal 2 is not contingent on approval of Proposal 1 also being received at the Meeting. Shareholders are NOT being asked to approve the Proposed Transaction.
7.
Comment — Under “How do I vote” on page 4 of the Questions and Answers section of the Proxy Statement, please specifically state the date by which the executed proxy card has to be received to be
counted.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
To ensure that your vote is counted, your executed proxy card must be received by 11:59 p.m. (Eastern Time) on Sunday, May 10, 2020.
4
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
8.
Comment —On Page 5 of the Proxy Statement, under “Solicitation of Proxies,” please state that $3,000 is the approximate cost of the entire solicitation, not just the Broadridge portion of a
larger solicitation expense. If in fact total expenses are higher, indicate the total approximate cost.
Response — In response to the Staff’s comment, the Fund has reviewed Item 4(a) of Schedule 14A, which requires in relevant part as
follows: (1) if the solicitation is to be made by specially, engaged employees or paid solicitors, state (i) the material features of any contract or arrangement for such solicitation and identify the parties, and (ii) the cost or anticipated cost
thereof; and (2) state the names of the persons by whom the cost of solicitation has been or will be borne, directly or indirectly. Accordingly, the Fund will revise the disclosure as follows:
The Adviser has retained Broadridge Financial Solutions (“Broadridge”), a third party proxy vendor, to assist in the proxy solicitation and tabulation. The Adviser, and not the Fund, will bear all costs related to the Proposed Transaction and this Proxy Statement. This includes
Broadridge’s fees, which are estimated to be approximately $4,200$3,000, which includes and include the costs of typesetting, filing, printing, and mailing the proxy materials. but excludes The Adviser will also bear any legal expenses to prepare the proxy materials and other
miscellaneous related expenses.
9.
Comment — On Page 6 of the Proxy Statement, the Staff notes the following sentence: “With respect to Proposal 2, the affirmative vote of a plurality of votes cast at the Meeting is required for
the approval of the election of William Adams IV as a Trustee, as long as a quorum is present at the Meeting.” Please clarify the practical effect of the plurality requirement in this scenario where the nominee runs unopposed.
Response — In response to the Staff’s comment, the Fund will add the following disclosure:
With respect to Proposal 2, the affirmative vote of a plurality of votes cast at the Meeting is required for the approval of the election of William Adams IV as a Trustee, as
long as a quorum is present at the Meeting. A nominee achieves a plurality by receiving the highest number of favorable votes cast for an open directorship position, even if they do not receive a majority of the
votes cast. When a nominee runs unopposed and receives any votes, other votes to withhold and votes against have no effect on the outcome of the election.
10.
Comment — The Staff notes that the discussion of the Board’s approval of the proposals is described in the future tense in certain locations, but in other locations it is in the past tense.
Please make consistent.
5
K&L GATES LLP
STATE STREET FINANCIAL CENTER
ONE LINCOLN STREET
BOSTON, MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Response — The Fund will revise the Proxy Statement to consistently use the past tense when discussing the Board’s approval of the
proposals. Supplementally, the Fund notes that the Membership Interest Purchase Agreement has now been signed and the language in the Proxy Statement with respect to this agreement will be adjusted accordingly.
11.
Comment — Please confirm whether Adam Blitz owns 10% or more of the outstanding voting securit