Correspondence 0001398344-24-009102 from Cascade Private Capital Fund (CIK 0001864609)
Cascade Private Capital Fund (CIK 0001864609)
Date: May 9, 2024 · CIK: 0001864609 · Accession: 0001398344-24-009102
AI Filing Summary & Sentiment
File numbers found in text: 333-277947, 811-23700
Letter
VIA EDGAR TRANSMISSION Washington, D.C. 20549 Attention: Lisa Larkin Re: Cascade Private Capital Fund (the “Fund” or the “Registrant”) (File Nos. 333-277947; 811-23700); Response to Comments on N-2
Dear Ms. Larkin:
This letter responds to the Staff’s comments that you provided via telephone on April 29, 2024 and May 8, 2024, in connection with the Staff’s review of the Fund’s registration statement filing under the Securities Act of 1933, as amended (the “1933 Act”) and the Investment Company Act of 1940, as amended (the “1940 Act”) on Form N-2 on March 14, 2024 (“Registration Statement”). The changes to the Fund’s disclosure discussed below will be reflected in a revised prospectus and statement of additional information filed pursuant to Rule 424 under the 1933 Act.
For your convenience, we have repeated each comment below in bold, and our responses follow the Staff’s comments. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Registration Statement, unless otherwise indicated.
Prospectus – Cover Pages
1. On p. i, in the definition of “Private Capital,” please explain what “other private market investments” are.
The Registrant will replace “other private market investments” with “structured equity securities that have both equity and credit qualities.”
2. On p. i, please explain in plain English what “vintage years” are.
The Registrant will add disclosure responsive to this comment.
3. With respect to the Fund’s 80% investment policy, please revise the clause “intends to invest” to “will invest.”
The Registrant will make the requested change.
4. Please add disclosure regarding the notice period for changing the Fund’s 80% investment policy.
The Registrant will add disclosure stating that the Fund’s 80% investment policy may be changed without Shareholder approval upon at least 60 days’ prior written notice to Shareholders.
5. On the cover page of the prospectus/page i, please describe the investment rating of the Fund’s debt investments.
The Registrant will add disclosure responsive to this comment.
6. Please note the status of the Fund’s exemptive relief permitting it to offer more than one class of shares consistently throughout the Registration Statement.
The Registrant will confirm the consistency of this disclosure throughout the Registration Statement. The Registrant’s investment adviser, Cliffwater LLC, has received exemptive relief from the Commission (Investment Company Act Release No. 33365, issued February 1, 2019) permitting any fund for which Cliffwater LLC acts as investment adviser and which operates as an interval fund pursuant to Rule 23c-3 under the Investment Company Act to offer multiple classes of shares.
7. On page ii, within the description of the interval fund policies, please describe the interval for pricing and repayment of the Fund’s semi-annual repurchase offers.
The Registrant will add the requested disclosure.
8. In the list of bullet points on page ii, please add to the end of the first bullet point the following text: “Thus, an investment in the Fund may not be suitable for investors who may need the money they invest in a specified timeframe.” The fourth bullet point of the list may be deleted.
The Registrant will make the requested changes.
9. Please add to the list of bullet points beginning on page ii the following three bullets: (1) The amount of distributions that the Fund may pay, if any, is uncertain; (2) The fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the Fund’s performance, such as from offering proceeds, borrowings, and amounts from the Fund’s affiliates that are subject to repayment by investors; (3) An investor will pay a sales load of up to [__]% and offering expenses of up to [__]% on the amount invested. If you pay the maximum aggregate [__]% for sales load and offering expenses, you must experience a total return on your net investment of [__]% in order to recover these expenses.
The Registrant will add the first two applicable requested bullet point items. The Registrant notes that it does not currently offer a share class that is sold subject to either (a) a sales load, or (b) offering expenses, and the third bullet point addition is thus inapplicable.
10. Please add a reference to leverage to the eighth bullet point in the list that begins on page ii (i.e., “Shares are speculative and involve a high degree of risk and leverage. See “General Risks.””).
The Registrant will make the requested changes.
Prospectus
11. In the “Investment Objective” on page 1, it is the Staff’s view that unfunded capital commitments are not investments for purposes of an 80% investment policy. Please revise the disclosure to indicate that unfunded capital commitments will not be included in the Fund’s 80% investment policy calculation.
The Registrant will add disclosure noting that unfunded capital commitments are not counted for purposes of calculating the Fund’s 80% policy.
12. Under “Private Capital Strategy Descriptions – Buyouts” on page 2, please describe in plain English what “control investments” are.
The Registrant will make the requested revision.
13. Under “Private Capital Strategy Descriptions – Private Debt” on page 2, please describe in plain English what “receivables factoring” is.
The Registrant will make the requested revision.
14. Please describe supplementally whether there is any exemptive relief required for the Fund’s investment in CCLFX.
The Fund’s investment in Cliffwater Corporate Lending Fund will be made in accordance with Section 12(d)(1)(F) of the Investment Company Act.
15. With respect to “Private Capital Investment Structures” on page 3, please describe supplementally what the Fund’s “semi-liquid or listed investments” will be, and how these are considered investments in Private Capital.
Semi-liquid investments as used in the Prospectus refer to closed-end funds and business development companies, whether or not listed on an exchange, that may be bought and sold in transactions between market participants. Listed investments include money market funds, mutual funds, exchange-traded funds, listed closed-end funds and listed business development corporations. Semi-liquid and listed investments that have the characteristics of Private Capital, as described in the Fund’s Prospectus, will be considered Private Capital Investments for purposes of the Fund’s 80% policy, whereas those that do not have the characteristics of Private Capital will not.
16. In romanette ii in the first paragraph under “Private Capital Investment Structures,” please explain what “other private assets” are.
The Registrant will add the following disclosure to as a parenthetical following “other private assets”:
“(investments in the capital structure (equity or possibly debt) of individual companies, or of a portfolio of companies, being sold on the secondary market)”
17. Please supplementally explain how “other liquid investments” (romanette v in the first paragraph under “Private Capital Investment Structures”) are investments in Private Capital.
The Fund’s investment in “other liquid investments” in romanette v addresses investments, such as ETFs, that may not be Private Capital Assets and would not be counted as Private Capital Assets for purposes of the Fund’s 80% policy.
18. Please clarify how the inclusion of listed and exchange traded investments in the first sentence of the first paragraph under “Private Capital Investment Structures” does not contradict the statement “The Fund’s Investments will typically not be registered with the SEC or any state securities commission and will typically not be listed on any national securities exchange.”
The Registrant will include language responsive to this comment.
19. Please add “as defined below” for the first use of Co-Investments on page 4.
The Registrant will make the requested addition.
20. Please describe whether Co-Investments, as defined in this document, are those that require exemptive relief under the Investment Company Act.
The Co-Investments as described in the Prospectus and Statement of Additional Information do not require exemptive relief under the Investment Company Act. The Fund’s Co-Investments will be direct investments made alongside the general partner of a Private Capital Fund, which is the common use of the term in the industry. The Fund does not invest in privately negotiated transactions alongside other affiliated funds in transactions that would require exemptive relief.
21. In the first paragraph under “Manager/Fund Selection” on page 5, please describe in plain English the disclosure in the parenthetical following romanette i.
The Registrant will revise the first paragraph under “Manager/Fund Selection” to describe the referenced disclosure in plain English.
22. Please explain in plain English the meaning of “allocation of carry” in the parenthetical following romanette iv in the first paragraph on page 5.
The Registrant will revise the language in the parenthetical to read:
“allocation of realized gains and income between investors in a private equity fund and the fund’s manager”
23. In the paragraph under “Co-Investment Selection” on page 6, please describe in plain English what is meant by “producing base case and downside cases” in romanette iv.
The Registrant will add disclosure responsive to this item.
24. Please describe the “other vehicles” referenced in the last sentence of the second paragraph on page 7.
The Registrant will add disclosure describing “other vehicles” in the above-referenced paragraph.
25. In the discussion under “Subsidiaries” on page 8, please disclose that the term “subsidiary” includes entities that engage in investment activities in securities or other assets that are primarily controlled by the Fund. Please disclose that the Fund complies with the provisions of the Investment Company Act governing investment policies (per Section 8) on an aggregate basis with the subsidiary. Please disclose that the Fund complies with the provisions of the Investment Company Act governing capital structure and leverage (Section 18) on an aggregate basis with the subsidiary such that the Fund treats the subsidiary’s debt as its own for purposes of Section 18.
The Registrant will revise the above-referenced paragraph to read as follows (added text underlined):
“The Fund may make investments through direct and indirect wholly owned subsidiaries that engage in investment activities in securities or other assets that are primarily controlled by the Fund (each a “Subsidiary” and collectively, the “Subsidiaries”). Such Subsidiaries will not be registered under the 1940 Act; however, the Fund will wholly own and control any Subsidiaries. The Board has oversight responsibility for the investment activities of the Fund, including its investment in any Subsidiary, and th
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filename1.htm
Faegre
Drinker Biddle & Reath LLP
One
Logan Square, Suite 2000
Philadelphia,
PA 19103
Phone:
(215) 988-2700
Fax:
(215) 988-2757
www.faegredrinker.com
May
9, 2024
VIA
EDGAR TRANSMISSION
U.S.
Securities and Exchange Commission
100
F Street, N.E.
Washington,
D.C. 20549
Attention:
Lisa Larkin
Re: Cascade
Private Capital Fund (the “Fund” or the “Registrant”) (File Nos.
333-277947; 811-23700); Response
to Comments on N-2
Dear
Ms. Larkin:
This
letter responds to the Staff’s comments that you provided via telephone on April 29, 2024 and May 8, 2024, in connection with
the Staff’s review of the Fund’s registration statement filing under the Securities Act of 1933, as amended (the
“1933 Act”) and the Investment Company Act of 1940, as amended (the “1940 Act”) on Form N-2 on March 14,
2024 (“Registration Statement”). The changes to the Fund’s disclosure discussed below will be reflected in a
revised prospectus and statement of additional information filed pursuant to Rule 424 under the 1933 Act.
For
your convenience, we have repeated each comment below in bold, and our responses follow the Staff’s comments. Capitalized
terms not otherwise defined herein shall have the meaning ascribed to them in the Registration Statement, unless otherwise indicated.
Prospectus
– Cover Pages
1. On
p. i, in the definition of “Private Capital,” please explain what “other
private market investments” are.
The
Registrant will replace “other private market investments” with “structured equity securities that have both equity and credit qualities.”
2. On
p. i, please explain in plain English what “vintage years” are.
The
Registrant will add disclosure responsive to this comment.
3. With
respect to the Fund’s 80% investment policy, please revise the clause “intends
to invest” to “will invest.”
1
The
Registrant will make the requested change.
4. Please
add disclosure regarding the notice period for changing the Fund’s 80% investment
policy.
The Registrant will add disclosure stating that the Fund’s 80% investment policy
may be changed without Shareholder approval upon at least 60 days’ prior written
notice to Shareholders.
5. On
the cover page of the prospectus/page i, please describe the investment rating of the
Fund’s debt investments.
The Registrant will add disclosure responsive to this comment.
6. Please
note the status of the Fund’s exemptive relief permitting it to offer more than
one class of shares consistently throughout the Registration Statement.
The Registrant will confirm the consistency of this disclosure throughout the Registration
Statement. The Registrant’s investment adviser, Cliffwater LLC, has received exemptive
relief from the Commission (Investment Company Act Release No. 33365, issued February
1, 2019) permitting any fund for which Cliffwater LLC acts as investment adviser and
which operates as an interval fund pursuant to Rule 23c-3 under the Investment Company
Act to offer multiple classes of shares.
7. On
page ii, within the description of the interval fund policies, please describe the interval
for pricing and repayment of the Fund’s semi-annual repurchase offers.
The Registrant will add the requested disclosure.
8. In
the list of bullet points on page ii, please add to the end of the first bullet point
the following text: “Thus, an investment in the Fund may not be suitable for investors
who may need the money they invest in a specified timeframe.” The fourth bullet
point of the list may be deleted.
The Registrant will make the requested changes.
9. Please
add to the list of bullet points beginning on page ii the following three bullets: (1) The amount of distributions that the Fund
may pay, if any, is uncertain; (2) The fund may pay distributions in significant part from sources that may not be available in
the future and that are unrelated to the Fund’s performance, such as from offering proceeds, borrowings, and amounts from
the Fund’s affiliates that are subject to repayment by investors; (3) An investor will pay a sales load of up to [__]% and
offering expenses of up to [__]% on the amount invested. If you pay the maximum aggregate [__]% for sales load and offering expenses,
you must experience a total return on your net investment of [__]% in order to recover these expenses.
2
The Registrant will add the first two applicable requested bullet point items. The Registrant
notes that it does not currently offer a share class that is sold subject to either (a)
a sales load, or (b) offering expenses, and the third bullet point addition is thus inapplicable.
10. Please
add a reference to leverage to the eighth bullet point in the list that begins on page
ii (i.e., “Shares are speculative and involve a high degree of risk and leverage.
See “General Risks.””).
The Registrant will make the requested changes.
Prospectus
11. In
the “Investment Objective” on page 1, it is the Staff’s view that unfunded
capital commitments are not investments for purposes of an 80% investment policy. Please
revise the disclosure to indicate that unfunded capital commitments will not be included
in the Fund’s 80% investment policy calculation.
The Registrant will add disclosure noting that unfunded capital commitments are not counted
for purposes of calculating the Fund’s 80% policy.
12. Under
“Private Capital Strategy Descriptions – Buyouts” on page 2, please
describe in plain English what “control investments” are.
The Registrant will make the requested revision.
13. Under
“Private Capital Strategy Descriptions – Private Debt” on page 2, please
describe in plain English what “receivables factoring” is.
The Registrant will make the requested revision.
14. Please
describe supplementally whether there is any exemptive relief required for the Fund’s
investment in CCLFX.
The Fund’s investment in Cliffwater Corporate Lending Fund will be made in accordance
with Section 12(d)(1)(F) of the Investment Company Act.
15. With
respect to “Private Capital Investment Structures” on page 3, please describe
supplementally what the Fund’s “semi-liquid or listed investments”
will be, and how these are considered investments in Private Capital.
Semi-liquid investments as used in the Prospectus refer to closed-end funds and business
development companies, whether or not listed on an exchange, that may be bought and sold
in transactions between market participants. Listed investments include money market
funds, mutual funds, exchange-traded funds, listed closed-end funds and listed business
development corporations. Semi-liquid and listed investments that have the characteristics
of Private Capital, as described in the Fund’s Prospectus, will be considered Private
Capital Investments for purposes of the Fund’s 80% policy, whereas those that do
not have the characteristics of Private Capital will not.
3
16. In
romanette ii in the first paragraph under “Private Capital Investment Structures,”
please explain what “other private assets” are.
The Registrant will add the following disclosure to as a parenthetical following “other
private assets”:
“(investments
in the capital structure (equity or possibly debt) of individual companies, or of a portfolio of companies, being sold on the
secondary market)”
17. Please
supplementally explain how “other liquid investments” (romanette v in the
first paragraph under “Private Capital Investment Structures”) are investments
in Private Capital.
The Fund’s investment in “other liquid investments” in romanette v
addresses investments, such as ETFs, that may not be Private Capital Assets and would
not be counted as Private Capital Assets for purposes of the Fund’s 80% policy.
18. Please
clarify how the inclusion of listed and exchange traded investments in the first sentence
of the first paragraph under “Private Capital Investment Structures” does
not contradict the statement “The Fund’s Investments will typically not be
registered with the SEC or any state securities commission and will typically not be
listed on any national securities exchange.”
The Registrant will include language responsive to this comment.
19. Please
add “as defined below” for the first use of Co-Investments on page 4.
The Registrant will make the requested addition.
20. Please
describe whether Co-Investments, as defined in this document, are those that require
exemptive relief under the Investment Company Act.
The Co-Investments as described in the Prospectus and Statement of Additional Information
do not require exemptive relief under the Investment Company Act. The Fund’s Co-Investments
will be direct investments made alongside the general partner of a Private Capital Fund,
which is the common use of the term in the industry. The Fund does not invest in privately
negotiated transactions alongside other affiliated funds in transactions that would require
exemptive relief.
4
21. In
the first paragraph under “Manager/Fund Selection” on page 5, please describe
in plain English the disclosure in the parenthetical following romanette i.
The Registrant will revise the first paragraph under “Manager/Fund Selection”
to describe the referenced disclosure in plain English.
22. Please
explain in plain English the meaning of “allocation of carry” in the parenthetical
following romanette iv in the first paragraph on page 5.
The Registrant will revise the language in the parenthetical to read:
“allocation of realized gains and income between investors in a private equity
fund and the fund’s manager”
23. In
the paragraph under “Co-Investment Selection” on page 6, please describe
in plain English what is meant by “producing base case and downside cases”
in romanette iv.
The Registrant will add disclosure responsive to this item.
24. Please
describe the “other vehicles” referenced in the last sentence of the second
paragraph on page 7.
The Registrant will add disclosure describing “other vehicles” in the above-referenced
paragraph.
25. In
the discussion under “Subsidiaries” on page 8, please disclose that the term
“subsidiary” includes entities that engage in investment activities in securities
or other assets that are primarily controlled by the Fund. Please disclose that the Fund
complies with the provisions of the Investment Company Act governing investment policies
(per Section 8) on an aggregate basis with the subsidiary. Please disclose that the Fund
complies with the provisions of the Investment Company Act governing capital structure
and leverage (Section 18) on an aggregate basis with the subsidiary such that the Fund
treats the subsidiary’s debt as its own for purposes of Section 18.
The Registrant will revise the above-referenced paragraph to read as follows (added text
underlined):
“The
Fund may make investments through direct and indirect wholly owned subsidiaries that engage in investment activities in securities
or other assets that are primarily controlled by the Fund (each a “Subsidiary” and collectively, the “Subsidiaries”).
Such Subsidiaries will not be registered under the 1940 Act; however, the Fund will wholly own and control any Subsidiaries. The
Board has oversight responsibility for the investment activities of the Fund, including its investment in any Subsidiary, and
th