SEC Company Response from PIMCO Dynamic Income Opportunities Fund (PDO) (CIK 0001798618) (PDO) — Mar 24, 2020
PIMCO Dynamic Income Opportunities Fund (PDO) (CIK 0001798618)
Date: March 24, 2020 · CIK: 0001798618 · Accession: 0001683863-20-000787
AI Filing Summary & Sentiment
File numbers found in text: 333-235966, 811-23505
Referenced dates: December 11, 2018
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission patrick.valenti@ropesgray.com Re: PIMCO Dynamic Income Opportunities Fund (formerly, PIMCO Tactical Income Fund) File Nos. 333-235966 and 811-23505
Dear Ms. Dubey:
Thank you for your letter, dated February 13, 2020, setting forth comments from the staff (the "Staff") of the Securities and Exchange Commission (the "SEC") to the initial Registration Statement on Form N-2 (the "Registration Statement") relating to the common shares of beneficial interest of PIMCO Dynamic Income Opportunities Fund (formerly, PIMCO Tactical Income Fund) (the "Fund"), which was filed with the SEC on January 17, 2020. Any disclosure changes described in the below responses will be reflected, to the extent applicable, in Pre-Effective Amendment No. 1 to the Registration Statement, to be filed on or about March 24, 2020, or in additional pre-effective amendments to be filed subsequently. Capitalized terms not otherwise defined herein have the meanings given to them in the Registration Statement.
The following sets forth the Staff's comments and the Fund's responses thereto.
PROSPECTUS
Cover Page
1.Comment: The second sentence under "Leverage" states that the Fund may enter into credit default swaps. Please disclose whether the Fund will buy and/or sell credit default swaps.
Response: The Fund respectfully refers the Staff to pages 99 and 111 of the Fund's prospectus (the "Prospectus"), which disclose that the Fund may buy and sell credit default swaps. However, in response to the Staff's comment, the Fund has made additional clarifications in this regard throughout the Registration Statement where appropriate, including in the "Leverage" section of the cover page to the Prospectus.
Prospectus Summary
2.Comment: We note that the synopsis is 41 pages long. The synopsis should provide a
"clear and concise [emphasis added]" description of the key features of the offering and the Fund, with cross-references to relevant disclosure elsewhere in the Prospectus or Statement of Additional Information. Please revise. See Instruction to Item 3.2. of Form N-2.
Response: The Fund has revised and reduced the Prospectus summary and believes the revised level of disclosure is appropriate.
Prospectus Summary — Investment Objectives and Strategies (pages 3–5)
3.Comment: The second sentence of this section states that the Fund may invest through Subsidiaries. Please respond to the following comments with respect to the Subsidiaries, including the REIT Subsidiary.
a.Disclose that the Fund complies with the provisions of the Investment Company Act of 1940 ("1940 Act") governing investment policies (Section 8) and capital structure and leverage (Section 18) on an aggregate basis with the Subsidiaries.
Response: The Fund advises the Staff that it no longer intends to form a REIT Subsidiary. Accordingly, the Fund has removed all references to a REIT Subsidiary from the Registration Statement. As it relates to the use of Subsidiaries more generally, however, the Fund has added the following disclosure to the Registration Statement:
The Fund will treat a Subsidiary's assets as assets of the Fund for purposes of determining compliance with various provisions of the 1940 Act applicable to the Fund, including those relating to investment policies (Section 8), affiliated transactions and custody (Section 17) and capital structure and leverage (Section 18).
b.Disclose that each investment adviser to a Subsidiary complies with provisions of the 1940 Act relating to investment advisory contracts (Section 15) as an investment adviser to the Fund under Section 2(a)(20) of the 1940 Act. Please confirm that the investment advisory contract between a Subsidiary and its investment adviser is filed as an exhibit to the registration statement.
Response: As discussed in previous correspondence with the Staff, PIMCO and the Fund respectfully disagree with the Staff's position.1 However, solely for purposes of having the Registration Statement declared effective, the Fund confirms that each investment adviser to a Subsidiary will comply with the provisions of the 1940 Act relating to investment advisory contracts (Section 15) as an investment adviser to the Fund. The requested disclosure will be reflected
1See response 17.b in the letter dated December 11, 2018 from Ropes & Gray LLP on behalf of PIMCO Energy and Tactical Credit Opportunities Fund.
in the Registration Statement and any such investment advisory contract will be filed as an exhibit to the Registration Statement. The Fund notes that, for purposes of this response, the board of trustees of the Fund, rather than the board of directors of the Subsidiary, if different, will be responsible for taking any actions or fulfilling any obligations under Section 15 of the 1940 Act with respect to the Subsidiary's investment management agreement.
We note that this response will be observed by the Fund, but does not necessarily represent the position or policy of other funds managed by PIMCO, each of which is governed by its own registration statement.
c.Disclose that each Subsidiary complies with 1940 Act provisions relating to affiliated transactions and custody (Section 17).
Response: Please see the response to comment 3.a above.
d.Disclose any of a Subsidiary's principal investment strategies or principal risks that constitute principal investment strategies or principal risks of the Fund.
Response: The Fund confirms that the principal investment strategies and principal risks disclosed in the Registration Statement with respect to the Fund include the principal investment strategies or principal risks of any currently contemplated Subsidiary.
e.Confirm to us that the financial statements of each wholly-owned Subsidiary will be consolidated with those of the Fund.
Response: The Fund does not currently have any Subsidiaries, but anticipates that it may invest in Subsidiaries as a principal investment strategy going forward. The Fund confirms that it will consolidate the financial statements of any future Subsidiary with those of the Fund to the extent permissible by SEC rules and applicable accounting rules.
f.Confirm in correspondence that (a) a Subsidiary's management fee (including any performance fee) will be included in the "Management Fee" line item of the fee table and a Subsidiary's expenses will be included in the "Other Expenses" line item of the fee table; (b) if a Subsidiary is not organized in the U.S., the Subsidiary and its board of directors will agree to designate an agent for service of process in the U.S.; and (c) a Subsidiary and its board of directors will agree to inspection by the staff of the Subsidiary's books and records, which will be maintained in accordance with Section 31 of the 1940 Act.
Response: With respect to (a), as discussed in previous correspondence with the
Staff, PIMCO and the Fund respectfully disagree with the Staff's position.2 However, solely for purposes of having the Registration Statement declared
2See response 17.g in the letter dated December 11, 2018 from Ropes & Gray LLP on behalf of PIMCO Energy and Tactical Credit Opportunities Fund.
effective, to the extent a Subsidiary's financial statements are consolidated with the Fund's, the Fund will include each Subsidiary's management fee, if any, in the "Management Fees" line item of the fee table and include each Subsidiary's expenses, if any, in the line item "Other Expenses" of the fee table. We note that this response will be observed by the Fund, but does not necessarily represent the position or policy of other funds managed by PIMCO, each of which is governed by its own registration statement.
With respect to (b), the Fund confirms that, for any Subsidiary that is not organized in the United States, such Subsidiary will either have a third-party designated agent for service of process in the United States or the Fund will constitute such Subsidiary's United States agent for service.
With respect to (c), the Fund confirms that it will agree to inspection of its Subsidiaries' books and records by the Staff, and will maintain such books in accordance with Section 31 of the 1940 Act and the rules thereunder.
Prospectus Summary — Investment Objectives and Strategies — Portfolio Management Strategies — Duration Management (page 5)
4.Comment: The fifth sentence of this section states that the Fund's duration strategy may entail maintaining a negative average portfolio duration from time to time, which would potentially benefit the portfolio in an environment of rising market interest rates but generally adversely impact the portfolio in an environment of falling or neutral market interest rates. Please disclose how the Fund would seek to achieve its investment objective by maintaining a negative average portfolio duration. Please also clarify how maintaining a negative average portfolio duration would "potentially benefit" or "adversely impact" the Fund's portfolio (e.g., portfolio would rise in value or fall in value).
Response: In response to the Staff's comment, the Fund will revise the applicable disclosure in the "Investment Objectives and Strategies—Portfolio Management Strategies—Duration Management" section of the Prospectus, as follows:
The Fund's duration strategy may entail maintaining a negative average portfolio duration from time to time, which would potentially benefit the portfolio in an environment of rising market interest rates, but would generally adversely impact the portfolio in an environment of falling or neutral market interest rates. The Fund may employ a negative portfolio duration for risk management purposes (including as a hedge against a sudden decline in interest rates) or as part of the Fund's interest rate exposure strategy and may maintain a negative duration by the use of, without limitation, particular classes or types of securities that benefit from rising interest rates (such as inverse floating rate securities) or derivative instruments. When the Fund's average portfolio duration is negative and interest rates rise, the value of the Fund's debt portfolio would generally be expected to appreciate in value, all other things being equal. The inverse would generally be the case when the Fund's average portfolio duration is positive. See "Principal Risks of the Fund—Interest Rate Risk."
The Fund has also made corresponding summary changes in the "Investment Objectives and Strategies—Portfolio Management Strategies—Duration Management" section of the Prospectus summary.
Prospectus Summary — Portfolio Contents (pages 5–7)
5.Comment: The first paragraph of this section sets forth the types of debt obligations and numerous other instruments in which the Fund may invest. Please review this disclosure and limit the disclosure to only the types of investments in which the Fund will principally invest. Please move disclosure of any non-principal investments to a separate section outside of the Prospectus Summary. See Item 8.2.b.(1) of Form N-2. See also Item 8.4. of Form N-2 and Instruction a. thereto; ADI 2019-08 – Improving Principal Risks Disclosure (at text preceding footnote 7).
Response: The Fund confirms that the above-referenced disclosure, as revised in the Registration Statement, includes only the types of investments in which the Fund may principally invest. As disclosed in the Fund's principal investment strategies, the Fund utilizes a dynamic asset allocation strategy among multiple sectors in the global credit markets. Accordingly, the Fund has the flexibility to allocate its assets among a variety of corporate debt, mortgage-related and other asset-backed securities, government and sovereign debt, taxable municipal bonds, and other fixed-, variable- and floating-rate income-producing securities of U.S. and foreign issuers, including emerging market issuers, from time to time and as market conditions change.
6.Comment: The second paragraph of this section states that the Fund's real estate investments may include direct investments in commercial and residential real estate, including land, for-sale and for-rent housing, office, hotel, retail and industrial investments. Please disclose the limit on the Fund's direct investment in real estate, including investments made by the REIT Subsidiary. Also, please provide us with a detailed analysis on how the Fund is an "investment company" as defined in Section
3(a)(1)(A) or Section 3(a)(1)(C) of the 1940 Act. In your response, please address why the Fund will establish a REIT Subsidiary through which it can hold real property and how this affects the investment company status analysis. We may have more comments after reviewing your response.
Response: Please see the response to comment 3.a above regarding REIT Subsidiaries. The Fund also advises the Staff that it no longer intends to invest in real estate, other than REITs, as a principal investment strategy. Accordingly, the Fund has removed all references to real estate investments, other than REITs, in the principal investment strategy disclosure in the Registration Statement. In light of these revisions to the Fund's principal investment strategies, the Fund does not believe a detailed analysis regarding its investment company status is necessary.
7.Comment: Please disclose any targeted allocation the Fund expects to have for its portfolio with respect to real estate and real estate-related investments.
Response: Please see the responses to comments 3.a and 6 above.
8.Comment: Please disclose how the Fund seeks to achieve its investment objective through its direct investments in commercial and residential real estate (i.e., how the Fund will receive income from these investments and how these investments will achieve capital appreciation). Please also describe in greater detail the Fund's direct investments in commercial and residential real estate (e.g., whether the Fund will invest in foreign real estate; what types of land, residential, office, retail and industrial properties the Fund will hold). In addition, please enhance the risk disclosure of the Fund's direct investments in real estate in the Principal Risks of the Fund section of the Prospectus to reflect the specific corresponding risks of the types and location of real estate in which the Fund will invest.
Response: Please see the responses to comments 3.a and 6 above.
9.Comment: On page 6, the last sentence of the fifth paragraph states that the Fund may engage in short sales. Please confirm whether the Fund intends to use short sales and, if so, please include an estimate of dividend and interest expense on short sales in the fee table. Alternatively, please disclose that the Fund has no current intention to engage in short sales (i.e., the Fund will not engage in short sales within one year of the effective date of the registration statement).
Response: The Fund confirms that it may use short sales and, to the extent the Fund anticipates engaging in short sales during its first year, an estimate of the interest and dividend expenses to be paid on such transactions will be reflected in the fee table in accordance with Form N-2.
10.Comment: On page 6, the second sentence of the sixth paragraph states that the Fund may invest in other investment companies. Please confirm that, if necessary, the expenses of such investments will be reflected in a separate Acquired Fund Fees and Expenses line item in the fee table. See Instruction 10 to Item 3.1 of Form N-2.
Response: The Fund does not currently anticipate that any fees and expenses incurred indirectly by the Fund as a result of an investment in shares of one or more Acquired Funds (as defined in Form N-2) would exceed 0.01% of the Fund's aver
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March 24, 2020
VIA EDGAR
Division of Investment Management
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Attn: Ms. Anu Dubey
Patrick J. Valenti T +1 312 845 1371
patrick.valenti@ropesgray.com
Re:
PIMCO Dynamic Income Opportunities Fund (formerly, PIMCO Tactical Income Fund)
File Nos. 333-235966 and 811-23505
Dear Ms. Dubey:
Thank you for your letter, dated February 13, 2020, setting forth comments from the staff (the "Staff") of the Securities and Exchange Commission (the "SEC") to the initial Registration Statement on Form N-2 (the "Registration Statement") relating to the common shares of beneficial interest of PIMCO Dynamic Income Opportunities Fund (formerly, PIMCO Tactical Income Fund) (the "Fund"), which was filed with the SEC on January 17, 2020. Any disclosure changes described in the below responses will be reflected, to the extent applicable, in Pre-Effective Amendment No. 1 to the Registration Statement, to be filed on or about March 24, 2020, or in additional pre-effective amendments to be filed subsequently. Capitalized terms not otherwise defined herein have the meanings given to them in the Registration Statement.
The following sets forth the Staff's comments and the Fund's responses thereto.
PROSPECTUS
Cover Page
1.Comment: The second sentence under "Leverage" states that the Fund may enter into credit default swaps. Please disclose whether the Fund will buy and/or sell credit default swaps.
Response: The Fund respectfully refers the Staff to pages 99 and 111 of the Fund's prospectus (the "Prospectus"), which disclose that the Fund may buy and sell credit default swaps. However, in response to the Staff's comment, the Fund has made additional clarifications in this regard throughout the Registration Statement where appropriate, including in the "Leverage" section of the cover page to the Prospectus.
Prospectus Summary
2.Comment: We note that the synopsis is 41 pages long. The synopsis should provide a
"clear and concise [emphasis added]" description of the key features of the offering and the Fund, with cross-references to relevant disclosure elsewhere in the Prospectus or Statement of Additional Information. Please revise. See Instruction to Item 3.2. of Form N-2.
Response: The Fund has revised and reduced the Prospectus summary and believes the revised level of disclosure is appropriate.
Prospectus Summary — Investment Objectives and Strategies (pages 3–5)
3.Comment: The second sentence of this section states that the Fund may invest through Subsidiaries. Please respond to the following comments with respect to the Subsidiaries, including the REIT Subsidiary.
a.Disclose that the Fund complies with the provisions of the Investment Company Act of 1940 ("1940 Act") governing investment policies (Section 8) and capital structure and leverage (Section 18) on an aggregate basis with the Subsidiaries.
Response: The Fund advises the Staff that it no longer intends to form a REIT Subsidiary. Accordingly, the Fund has removed all references to a REIT Subsidiary from the Registration Statement. As it relates to the use of Subsidiaries more generally, however, the Fund has added the following disclosure to the Registration Statement:
The Fund will treat a Subsidiary's assets as assets of the Fund for purposes of determining compliance with various provisions of the 1940 Act applicable to the Fund, including those relating to investment policies (Section 8), affiliated transactions and custody (Section 17) and capital structure and leverage (Section 18).
b.Disclose that each investment adviser to a Subsidiary complies with provisions of the 1940 Act relating to investment advisory contracts (Section 15) as an investment adviser to the Fund under Section 2(a)(20) of the 1940 Act. Please confirm that the investment advisory contract between a Subsidiary and its investment adviser is filed as an exhibit to the registration statement.
Response: As discussed in previous correspondence with the Staff, PIMCO and the Fund respectfully disagree with the Staff's position.1 However, solely for purposes of having the Registration Statement declared effective, the Fund confirms that each investment adviser to a Subsidiary will comply with the provisions of the 1940 Act relating to investment advisory contracts (Section 15) as an investment adviser to the Fund. The requested disclosure will be reflected
1See response 17.b in the letter dated December 11, 2018 from Ropes & Gray LLP on behalf of PIMCO Energy and Tactical Credit Opportunities Fund.
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in the Registration Statement and any such investment advisory contract will be filed as an exhibit to the Registration Statement. The Fund notes that, for purposes of this response, the board of trustees of the Fund, rather than the board of directors of the Subsidiary, if different, will be responsible for taking any actions or fulfilling any obligations under Section 15 of the 1940 Act with respect to the Subsidiary's investment management agreement.
We note that this response will be observed by the Fund, but does not necessarily represent the position or policy of other funds managed by PIMCO, each of which is governed by its own registration statement.
c.Disclose that each Subsidiary complies with 1940 Act provisions relating to affiliated transactions and custody (Section 17).
Response: Please see the response to comment 3.a above.
d.Disclose any of a Subsidiary's principal investment strategies or principal risks that constitute principal investment strategies or principal risks of the Fund.
Response: The Fund confirms that the principal investment strategies and principal risks disclosed in the Registration Statement with respect to the Fund include the principal investment strategies or principal risks of any currently contemplated Subsidiary.
e.Confirm to us that the financial statements of each wholly-owned Subsidiary will be consolidated with those of the Fund.
Response: The Fund does not currently have any Subsidiaries, but anticipates that it may invest in Subsidiaries as a principal investment strategy going forward. The Fund confirms that it will consolidate the financial statements of any future Subsidiary with those of the Fund to the extent permissible by SEC rules and applicable accounting rules.
f.Confirm in correspondence that (a) a Subsidiary's management fee (including any performance fee) will be included in the "Management Fee" line item of the fee table and a Subsidiary's expenses will be included in the "Other Expenses" line item of the fee table; (b) if a Subsidiary is not organized in the U.S., the Subsidiary and its board of directors will agree to designate an agent for service of process in the U.S.; and (c) a Subsidiary and its board of directors will agree to inspection by the staff of the Subsidiary's books and records, which will be maintained in accordance with Section 31 of the 1940 Act.
Response: With respect to (a), as discussed in previous correspondence with the
Staff, PIMCO and the Fund respectfully disagree with the Staff's position.2 However, solely for purposes of having the Registration Statement declared
2See response 17.g in the letter dated December 11, 2018 from Ropes & Gray LLP on behalf of PIMCO Energy and Tactical Credit Opportunities Fund.
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effective, to the extent a Subsidiary's financial statements are consolidated with the Fund's, the Fund will include each Subsidiary's management fee, if any, in the "Management Fees" line item of the fee table and include each Subsidiary's expenses, if any, in the line item "Other Expenses" of the fee table. We note that this response will be observed by the Fund, but does not necessarily represent the position or policy of other funds managed by PIMCO, each of which is governed by its own registration statement.
With respect to (b), the Fund confirms that, for any Subsidiary that is not organized in the United States, such Subsidiary will either have a third-party designated agent for service of process in the United States or the Fund will constitute such Subsidiary's United States agent for service.
With respect to (c), the Fund confirms that it will agree to inspection of its Subsidiaries' books and records by the Staff, and will maintain such books in accordance with Section 31 of the 1940 Act and the rules thereunder.
Prospectus Summary — Investment Objectives and Strategies — Portfolio Management Strategies — Duration Management (page 5)
4.Comment: The fifth sentence of this section states that the Fund's duration strategy may entail maintaining a negative average portfolio duration from time to time, which would potentially benefit the portfolio in an environment of rising market interest rates but generally adversely impact the portfolio in an environment of falling or neutral market interest rates. Please disclose how the Fund would seek to achieve its investment objective by maintaining a negative average portfolio duration. Please also clarify how maintaining a negative average portfolio duration would "potentially benefit" or "adversely impact" the Fund's portfolio (e.g., portfolio would rise in value or fall in value).
Response: In response to the Staff's comment, the Fund will revise the applicable disclosure in the "Investment Objectives and Strategies—Portfolio Management Strategies—Duration Management" section of the Prospectus, as follows:
The Fund's duration strategy may entail maintaining a negative average portfolio duration from time to time, which would potentially benefit the portfolio in an environment of rising market interest rates, but would generally adversely impact the portfolio in an environment of falling or neutral market interest rates. The Fund may employ a negative portfolio duration for risk management purposes (including as a hedge against a sudden decline in interest rates) or as part of the Fund's interest rate exposure strategy and may maintain a negative duration by the use of, without limitation, particular classes or types of securities that benefit from rising interest rates (such as inverse floating rate securities) or derivative instruments. When the Fund's average portfolio duration is negative and interest rates rise, the value of the Fund's debt portfolio would generally be expected to appreciate in value, all other things being equal. The inverse would generally be the case when the Fund's average portfolio duration is positive. See "Principal Risks of the Fund—Interest Rate Risk."
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The Fund has also made corresponding summary changes in the "Investment Objectives and Strategies—Portfolio Management Strategies—Duration Management" section of the Prospectus summary.
Prospectus Summary — Portfolio Contents (pages 5–7)
5.Comment: The first paragraph of this section sets forth the types of debt obligations and numerous other instruments in which the Fund may invest. Please review this disclosure and limit the disclosure to only the types of investments in which the Fund will principally invest. Please move disclosure of any non-principal investments to a separate section outside of the Prospectus Summary. See Item 8.2.b.(1) of Form N-2. See also Item 8.4. of Form N-2 and Instruction a. thereto; ADI 2019-08 – Improving Principal Risks Disclosure (at text preceding footnote 7).
Response: The Fund confirms that the above-referenced disclosure, as revised in the Registration Statement, includes only the types of investments in which the Fund may principally invest. As disclosed in the Fund's principal investment strategies, the Fund utilizes a dynamic asset allocation strategy among multiple sectors in the global credit markets. Accordingly, the Fund has the flexibility to allocate its assets among a variety of corporate debt, mortgage-related and other asset-backed securities, government and sovereign debt, taxable municipal bonds, and other fixed-, variable- and floating-rate income-producing securities of U.S. and foreign issuers, including emerging market issuers, from time to time and as market conditions change.
6.Comment: The second paragraph of this section states that the Fund's real estate investments may include direct investments in commercial and residential real estate, including land, for-sale and for-rent housing, office, hotel, retail and industrial investments. Please disclose the limit on the Fund's direct investment in real estate, including investments made by the REIT Subsidiary. Also, please provide us with a detailed analysis on how the Fund is an "investment company" as defined in Section
3(a)(1)(A) or Section 3(a)(1)(C) of the 1940 Act. In your response, please address why the Fund will establish a REIT Subsidiary through which it can hold real property and how this affects the investment company status analysis. We may have more comments after reviewing your response.
Response: Please see the response to comment 3.a above regarding REIT Subsidiaries. The Fund also advises the Staff that it no longer intends to invest in real estate, other than REITs, as a principal investment strategy. Accordingly, the Fund has removed all references to real estate investments, other than REITs, in the principal investment strategy disclosure in the Registration Statement. In light of these revisions to the Fund's principal investment strategies, the Fund does not believe a detailed analysis regarding its investment company status is necessary.
7.Comment: Please disclose any targeted allocation the Fund expects to have for its portfolio with respect to real estate and real estate-related investments.
Response: Please see the responses to comments 3.a and 6 above.
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8.Comment: Please disclose how the Fund seeks to achieve its investment objective through its direct investments in commercial and residential real estate (i.e., how the Fund will receive income from these investments and how these investments will achieve capital appreciation). Please also describe in greater detail the Fund's direct investments in commercial and residential real estate (e.g., whether the Fund will invest in foreign real estate; what types of land, residential, office, retail and industrial properties the Fund will hold). In addition, please enhance the risk disclosure of the Fund's direct investments in real estate in the Principal Risks of the Fund section of the Prospectus to reflect the specific corresponding risks of the types and location of real estate in which the Fund will invest.
Response: Please see the responses to comments 3.a and 6 above.
9.Comment: On page 6, the last sentence of the fifth paragraph states that the Fund may engage in short sales. Please confirm whether the Fund intends to use short sales and, if so, please include an estimate of dividend and interest expense on short sales in the fee table. Alternatively, please disclose that the Fund has no current intention to engage in short sales (i.e., the Fund will not engage in short sales within one year of the effective date of the registration statement).
Response: The Fund confirms that it may use short sales and, to the extent the Fund anticipates engaging in short sales during its first year, an estimate of the interest and dividend expenses to be paid on such transactions will be reflected in the fee table in accordance with Form N-2.
10.Comment: On page 6, the second sentence of the sixth paragraph states that the Fund may invest in other investment companies. Please confirm that, if necessary, the expenses of such investments will be reflected in a separate Acquired Fund Fees and Expenses line item in the fee table. See Instruction 10 to Item 3.1 of Form N-2.
Response: The Fund does not currently anticipate that any fees and expenses incurred indirectly by the Fund as a result of an investment in shares of one or more Acquired Funds (as defined in Form N-2) would exceed 0.01% of the Fund's aver