Private Investment Firm Seeks Time to Divest to Avoid Registration
A private investment firm has filed an exemptive application to avoid investment company registration as it transitions to comply with the applicable exemptions. The applicant, which generally invests for the purpose of managing and holding operating companies, inadvertently came under the Investment Company Act because investor redemptions resulting from the financial crisis caused the company to hold more than 45% of its assets or derive more than 45% of its net income from non-majority owned operating companies. The application asserts that the firm is taking ongoing affirmative steps to bring bad assets below the 45% threshold but needs more time to complete all the necessary transactions. The exemptive application would provide relief for up to a year.