1107008 Informal Interpretation

From: (Redacted)
Sent: Thursday, July 28, 2011 2:20PM
To: Verne,B. Michael
Subject: Associates Questions

HiMr. Verne,

Iparticipated in the Ropes web-discussion (which was very helpful) and I have acouple of follow up questions:

1. I asked this question on the Q&A, but didn't feelthat it was completely understood, so I would appreciate your thoughts on it-one fund holds 49% of Company X; an Associate (another sister fund) also holds2% of Company X. If NAICS overlap exists with respect to Company X and thetarget/seller, do you disclose under Item 6(c)(ii) (J think, per theinstructions, it would be "none"), Item 7(a) (per the instructions,again "none"), Item 7(b)(ii) and 7(d) (per the instructions, I think"none" -- I would think a less than 5% holding of an Associate wouldnot be an Associate, so, would not be subject to these items). If this is thecase, no disclosure of 50%+ holding would result (no different than the oldform), nor will there be any disclosure of the Associate's holdings (sinceunder 5%) in the Acquiring Fund's identical holdings (only the Acquiring Fund'sdisclosure under 6(c)(i), setting forth a non-controlling 49% interest -so, noadditional disclosure of the 2% holdings results). Is this correct -or do weneed to disclose somewhere that the Sponsor holds a controlling interest ofCompany X via multiple sister funds?

2. I was confused about the Club Holding Corp. discussion(that the new form results in greater disclosure of the Club member sponsorsholdings) -if there is no Sponsor acquiring more than 50% in the aggregate (viamultiple sister funds) (Le., 30% Sponsor X, 40% Sponsor V, 30% Sponsor Z) -I amnot sure that there would be any more disclosure than under the old form (Le.,just the item 6(b) information, which existed in the old form). In addition, ina 50/50 deal (with a lot of sister funds for each Sponsor), I guess theimportant question is whether the new Club Holding Corp. has an investmentmanager (to go down to the Associates of the investment manager). If that isthe case, I suppose you could have 2 Sponsors with sister funds aggregating to50%, without the requirement of disclosure of control in subsequent HSR filingsfor a non-investment managing Sponsor, even if it has 50% (i.e., 2Sponsors, 50/50 (when taking into account the multiple sister funds each has),with only one (or none) of the Sponsor being the investment manager). Also, whatif there is no "investment manager" - the Club Holding Corp. has 1director each appointed by the 2 sponsors, but with no investment managercontract.

Iwould appreciate your thoughts on these two questions.