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55182 Federal Register / Vol. 70, No.

181 / Tuesday, September 20, 2005 / Notices

investment securities (as defined in operating company are more advisory contracts without the approval
Section 3(a)(2) of the Act) of $5.1 billion appropriately analyzed by looking at its of holders of the company’s outstanding
constituted approximately 48% of revenues. Applied states that, for the voting securities.
Applied’s total assets (excluding four quarters ending January 30, 2005, APPLICANTS: Peter Kiewit Sons’’, Inc.
Government securities and cash items), its revenues from operations 3 (‘‘Kiewit’’) and Kiewit Investment Fund
consolidated with its wholly-owned represented approximately 99% of its LLLP (the ‘‘Fund’’).
subsidiaries.2 More than 99% of total revenues, and its revenues from FILING DATES: The application was filed
Applied’s investment securities investments, or net investment income, on July 25, 2005 and amended on
consisted of Capital Preservation represented approximately 1% of its August 29, 2005 and September 13,
Investments. Applied’s remaining total revenues. Applied expects that as 2005.
investment securities consisted of its business continues in the future, the
investments in businesses with HEARING OR NOTIFICATION OF HEARING: An
percentage of its total revenues derived
complementary products, services and/ from operating activities will ordinarily order granting the application will be
or technologies and an interest in a be over 90% and the percentage derived issued unless the Commission orders a
limited partnership that invests in early- from investments will ordinarily be hearing. Interested persons may request
stage companies involving under 10%. a hearing by writing to the
nanotechnology and/or communications 7. Applied thus asserts that it satisfies Commission’s Secretary and serving
technology. Applied anticipates that its the standards for an order under section applicants with a copy of the request,
investment securities other than Capital 3(b)(2) of the Act. personally or by mail. Hearing requests
Preservation Investments will not should be received by the Commission
exceed 10% of Applied’s total Applicant’s Conditions by 5:30 p.m. on October 11, 2005, and
consolidated assets (excluding 1. Applied will continue to allocate should be accompanied by proof of
Government securities and cash items) and use its accumulated cash and service on applicants, in the form of an
in the future. Applied further states that investment securities for bona fide affidavit or, for lawyers, a certificate of
a significant portion of its assets consist business purposes. service. Hearing requests should state
of intangible assets such as internally- 2. Applied will refrain from investing the nature of the writer’s interest, the
developed intellectual property that are or trading in securities for short-term reason for the request, and the issues
not included in the value of Applied’s speculative purposes. contested. Persons who wish to be
total assets for purposes of determining For the Commission, by the Division of notified of a hearing may request
Applied’s status under the Act. Applied Investment Management, under delegated notification by writing to the
states that the asset tests used in authority. Commission’s Secretary.
connection with sections 3(a)(1)(c) and Jonathan G. Katz, ADDRESSES: Secretary, U.S. Securities
3(b) of the Act therefore significantly Secretary. and Exchange Commission, 100 F
understate the relative value of [FR Doc. 05–18614 Filed 9–19–05; 8:45 am] Street, NE., Washington, DC 20549–
Applied’s non-investment security BILLING CODE 8010–01–P 9303. Applicants, Tobin A. Schropp,
assets. Peter Kiewit Sons’, Inc., Kiewit Plaza,
e. Sources of Income and Revenue. Omaha, Nebraska, 68131 and Robert A.
Applied states that for the four quarters SECURITIES AND EXCHANGE Giles, Jr., Kiewit Investment Fund LLLP,
ended January 30, 2005, its operating COMMISSION 73 Tremont Street, Boston
activities produced 94% of its net Massachusetts 02108.
[Investment Company Act Release No.
income after taxes, while its investment FOR FURTHER INFORMATION CONTACT:
27066; 813–357]
securities produced 6% of its net Shannon Conaty, Senior Counsel, at
income on a tax-equivalent basis. Peter Kiewit Sons’, Inc. and Kiewit (202) 551–6827 or Janet M. Grossnickle,
However, for the fiscal year ended Investment Fund LLLP; Notice of Branch Chief, at (202) 551–6821
October 26, 2003, Applied had Application (Division of Investment Management,
operating losses while deriving net Office of Investment Company
income from its investment securities. September 14, 2005.
Applied states that its net income does AGENCY: Securities and Exchange
not always accurately reflect its Commission (‘‘Commission’’). SUPPLEMENTARY INFORMATION: The
operating activities since its net income ACTION: Notice of an application for an following is a summary of the
fluctuates unpredictably with the cycles order under section 6(b) of the application. The complete application
of the semiconductor industry. Applied Investment Company Act of 1940 (the may be obtained for a fee at the
thus believes that its activities as an ‘‘Act’’) granting an exemption from Commission’s Public Reference Desk,
section 15(a) of the Act and the rules 100 F Street, NE., Washington, DC,
2 Applied states that consolidation provides a and regulations thereunder. 20549–0102 (tel. (202) 551–5850).
more accurate picture of its primary business of
developing, manufacturing, marketing and servicing
Applicants’ Representations
integrated circuit fabrication equipment because 1. Kiewit, a Delaware corporation, is
Applied does not have any independent business Applicants request an order to permit
operations separate from the activities of its wholly- the board of directors of an ‘‘employees’’ a large construction contractor operating
owned subsidiaries. Applied has not sold any securities company’’ as defined in primarily in the North American
subsidiaries in over 20 years, and those sales were section 2(a)(13) of the Act to enter into market. Through various subsidiaries,
related to its business as a supplier of integrated joint ventures and partnerships, Kiewit
circuit fabrication equipment and services. Since and materially amend investment
the subsidiaries being consolidated are all wholly-
provides construction services to a
owned, consolidation will not result in the type of 3 For the reasons stated above, revenues of broad range of public and private
distortions that could result from consolidating Applied’s wholly-owned subsidiaries were customers. It also owns and operates
other types of subsidiaries. Applied also has a 50% consolidated for purposes of this discussion. several coal mining operations.
owned subsidiary that is dormant, has no Applied consolidates its wholly-owned subsidiaries
operations and has not been consolidated for when preparing its financial statements in
Pursuant to the terms of its
purposes of determining Applied’s status under the accordance with Generally Accepted Accounting organizational documents, Kiewit’s
Act. Principles. common stock (‘‘Kiewit Stock’’)

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Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices 55183

generally may only be owned by offering, the Fund intends to offer Units other Fund Advisers. Within the
directors and full-time employees of continuously and accept applications to framework of the investment policies set
Kiewit and its current or former purchase Units at the end of the second forth in the Fund’s registration
subsidiaries, joint ventures and and fourth calendar quarters of each statement, and subject to supervision
partnerships. year. Units will not be transferable and oversight by the Fund Board, a
2. The Fund, a Delaware limited except with the prior written consent of Fund Adviser will develop an
liability limited partnership, is the Fund and then only to Eligible investment program with respect to its
registered under the Act as a non- Holders. Units are not redeemable at the allocated assets. Each investment
diversified, closed-end management option of a holder of Units advisory contract or material
investment company, and will at all (‘‘Unitholder’’).5 amendment to such a contract will be
times operate as an ‘‘employees’’ 4. Applicants believe that the Fund approved by the Fund Board, including
securities company’’ within the will provide a cost-effective opportunity a majority of the Directors that are not
meaning of section 2(a)(13) of the Act. to access types of investments and interested persons of the Fund within
Kiewit, or a wholly-owned subsidiary, professional investment management the meaning of section 2(a)(19) of the
will be the general partner of the Fund that otherwise may not be available to Act, in accordance with section 15(c) of
(the ‘‘General Partner’’). To the fullest key employees of the Kiewit Group on the Act.7 All Fund Advisers will be
extent permitted under the Delaware an individual basis. The Fund’s subject to removal by the Fund Board at
Revised Uniform Limited Partnership investment objective is long-term capital any time, without penalty, on not more
Act (‘‘DRULPA’’), the General Partner growth with consideration given to than sixty days’ written notice.
pursuant to the Fund’s amended and consistency of returns. Under normal 6. There will be no sales load or any
restated limited partnership agreement market conditions, the Fund’s assets other distribution fee charged to Eligible
(‘‘Partnership Agreement’’) will will be invested in a variety of Holders during the initial sale of Units
irrevocably delegate management, securities, including U.S. and non-U.S. or any subsequent sale of Units. The
control and operation of the Fund and equities and fixed-income instruments Fund will not issue senior securities or
its business and affairs to the Fund’s and other investment funds that are borrow money for investment purposes.
Board of Directors (‘‘Fund Board’’, and registered investment companies or The Fund also will not invest in
each member thereof a ‘‘Director’’) private investment funds excepted from securities issued by Kiewit, any
pursuant to section 17–403 of the the definition of ‘‘investment company’’ affiliated person of Kiewit or any
DRULPA.1 All but two of the five pursuant to section 3(c)(1) or 3(c)(7) of investment company, Private Portfolio
current Directors are directors, officers the Act (‘‘Private Portfolio Funds’’), Fund or alternative investment vehicle
or employees of Kiewit and Directors including Private Portfolio Funds that sponsored by or affiliated with Kiewit or
that are officers, directors or employees are commonly referred to as hedge any of its affiliated persons; provided
of Kiewit will comprise a majority of the funds.6 that the Fund may invest in an
Fund Board in the future. 5. The Fund will retain a primary investment company, Private Portfolio
3. The Fund is designed as a long- investment adviser and it may Fund or alternative investment vehicle
term investment vehicle for key determine to retain other investment that is an affiliated person of an
employees and former key employees of advisers in the future (each, a ‘‘Fund employee or former employee of Kiewit
Kiewit and its affiliated companies and Adviser’’). Any Fund Adviser will be or its affiliated companies (that is not a
their immediate family members. Units registered under the Advisers Act. The current or former director or officer of
of limited partnership interests of the Fund’s primary Fund Adviser will make Kiewit or its affiliated companies) solely
Fund (‘‘Units’’) will be offered pursuant recommendations to the Fund Board by virtue of such person holding a
to offerings registered under the regarding the allocation of portions of limited partnership interest in such
Securities Act of 1933, as amended the Fund’s assets to the management of entity.
(‘‘Securities Act’’) and will be sold only
to Eligible Holders.2 Eligible Holders any particular person (or group of persons) would Applicants’ Legal Analysis
consist of (i) current and former be considered an ‘‘employee’’ or ‘‘person on
retainer’’ within the meaning of section 2(a)(13) of 1. Section 6(b) of the Act provides, in
employees or persons on retainer of the the Act. part, that the Commission will exempt
Kiewit Group,3 within the meaning of 5 The Fund, subject to approval by the Fund
employees’ securities companies from
section 2(a)(13) of the Act (‘‘Eligible Board, will conduct tender offers for 5% to 25% of the provisions of the Act to the extent
Employees’’); (ii) Directors retained by the Fund’s outstanding Units at least semi-annually
commencing in January 2006. No repurchase, that the exemption is consistent with
the Fund; (iii) immediate family redemption or other fee will be assessed by the the protection of investors. Section 6(b)
members, within the meaning of section Fund on any repurchase of Units. provides that the Commission will
2(a)(13) of the Act, of such Directors or 6 As discussed more fully in the application, the
consider, in determining the provisions
Eligible Employees; or (iv) members of Fund, at Kiewit’s expense, will make available to
of the Act from which the company
the Kiewit Group.4 After the initial each offeree that does not meet the standard of an
‘‘accredited investor’’ as set forth in rule 501(a) should be exempt, the company’s form
1 Applicants represent that the delegation of
under the Securities Act (a ‘‘Non-Accredited of organization and capital structure, the
Offeree’’) an investment adviser registered under persons owning and controlling its
duties by the General Partner to the Fund Board the Investment Advisers Act of 1940, as amended
will be substantially identical to the delegation (‘‘Advisers Act’’) that meets the requirements set securities, the price of the company’s
described in Federated Core Trust II, SEC No- forth in rule 501(h) under the Securities Act and is securities and the amount of any sales
Action Letter (Feb. 6, 2002). independent from Kiewit, the Fund and the Fund load, the disposition of the proceeds of
2 The Fund has filed a registration statement in
Advisers (the ‘‘Investment Professional’’). Prior to
connection with a proposed public offering of an investment in the Fund whether during the
any sales of the company’s securities,
Units. The registration statement was declared initial sale of Units or any subsequent sale of Units,
effective and the Fund commenced a public offering each Non-Accredited Offeree will be given the 7 The Fund Board will consider the following
on July 26, 2005. opportunity to consult on a one-on-one basis with factors, among others, prior to any such approval:
3 The term ‘‘Kiewit Group’’ refers to Kiewit and the nature and quality of services to be rendered,
such Investment Professional for the purpose of
any affiliated company of Kiewit of which Kiewit assisting the Non-Accredited Offeree in evaluating the expected total revenue and profit of a Fund
is an affiliated company, as defined in section the merits and risks of a prospective investment in Adviser as a result of its relationship with the Fund,
2(a)(2) of the Act. the Fund and the appropriateness of an investment any economies of scale that a Fund Adviser may
4 Applicants are not asking the Commission to in the Fund in light of his or her particular experience as the Fund grows, and the
decide, nor is the Commission deciding, whether circumstances. competitiveness of fees, costs and expense ratios.

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55184 Federal Register / Vol. 70, No. 181 / Tuesday, September 20, 2005 / Notices

how the company’s funds are invested, the Kiewit Group will receive any Applicants believe that key employees
and the relationship between the compensation from the Fund. No of the Kiewit Group that invest in the
company and the issuers of the Director will be an interested person of Fund would expect the Fund Board to
securities in which it invests. Section any Fund Adviser within the meaning exercise overall supervisory
2(a)(13) defines an employees’ securities of section 2(a)(19) of the Act and it is responsibility for the management and
company as any investment company expected that all Directors will be investment of the Fund’s assets on an
all of whose securities (other than short- Unitholders in the Fund.8 Further, ongoing basis.11
term paper) are beneficially owned (a) applicants state that most of the
by current or former employees, or Directors are directors, officers and 7. Applicants further represent that
persons on retainer, of one or more employees of Kiewit who share an the following additional safeguards exist
affiliated employers, (b) by immediate essential community of interest with to protect Unitholders: (i) The Fund’s
family members of such persons, or (c) key employees and their immediate financial statements will be audited by
by such employer or employers together family members and have a a nationally recognized independent
with any of the persons in (a) or (b). considerable interest in seeing that the certified public accounting firm; (ii)
2. Section 15(a) of the Act provides, Fund is managed consistent with the each Fund Adviser will be registered
in relevant part, that it is unlawful for interests of such key employees and with the Commission and will be
any person to act as an investment their immediate family members. retained pursuant to an arms-length
adviser to a registered investment Applicants believe that the arms-length negotiation; (iii) participation in the
company except pursuant to a written relationship between the Fund Board Fund is entirely voluntary; (iv)
contract that has been approved by the and any Fund Adviser, the community Unitholders will not be charged a sales
vote of a majority of the company’s of interest that will exist among load or any other distribution fee; and
outstanding voting securities. Unitholders and Directors and the (v) the Fund will not invest, directly or
Applicants request an order under Directors’ fiduciary duties will reduce indirectly, in securities issued by any
section 6(b) of the Act exempting the the risk of abuses that section 15(a) of member of the Kiewit Group.
Fund from section 15(a) of the Act and the Act is designed to prevent.9
the rules and regulations thereunder 5. Applicants further believe that Applicants’ Condition
solely to the extent necessary to permit Unitholders will expect the Fund Board
the Fund to enter into and materially to select and monitor Fund Advisers. The applicants agree that any order
amend investment advisory contracts The Fund will disclose in its prospectus granting the requested relief will be
with Fund Advisers without approval the existence, substance, and effect of subject to the following condition:
by Unitholders holding a majority of the the relief requested in the application
outstanding voting securities of the The Fund will operate in compliance
and it will hold itself out to Eligible
Fund. Each investment advisory with the Act pending final
Holders as employing the management
contract with any Fund Adviser will structure described in the application. determination of the application,
comply with all other requirements of The prospectus also will prominently provided that the Fund may rely on rule
the Act and the Advisers Act, including disclose that the Fund Board has 6b–1 under the Act solely to implement
that the renewal of the contract is ultimate responsibility to oversee Fund the relief specifically requested in the
subject to annual review by the Fund Advisers and recommend their hiring, application from section 15(a) of the
Board after its initial term. For the termination, and replacement. Act.
reasons discussed below, applicants 6. Key employees of the Kiewit Group For the Commission, by the Division of
believe that the requested exemption have historically invested significant Investment Management, pursuant to
from section 15(a) is consistent with the portions of their personal financial delegated authority.
protection of investors and the purposes assets in Kiewit Stock, which effectively Jonathan G. Katz,
of the Act. results in Kiewit directors, officers and
3. Applicants state that, because the Secretary.
other senior management being
Fund may engage multiple Fund responsible for such employees’ [FR Doc. 05–18612 Filed 9–19–05; 8:45 am]
Advisers, it is important that the Fund financial well being through their BILLING CODE 8010–01–P
Board have the capability to quickly management of Kiewit. Because of this
reallocate assets among Fund Advisers historical and ongoing relationship
and retain a new Fund Adviser in the between Kiewit’s stockholders and
event that any such Fund Adviser senior management of Kiewit and the
performs poorly or the Fund Board disclosure discussed above,10
determines that Fund assets should be
reallocated to asset classes, strategies or 8 Applicants state that the Fund Board’s sole

styles for which existing Fund Advisers obligation with respect to the Fund is managing the
delegates have the discretion to replace and retain
are not able to manage most efficiently. Fund in the Fund’s and Unitholders’ best interests
and that the Fund Board and the Directors will not advisers or terminate investment options and
Unitholder approval each time that a reinvest the assets without employee consent.
have any obligation to any person or entity that
new Fund Adviser is retained or an benefits from the Fund. 11 This overall supervisory responsibility
existing contract with a Fund Adviser is 9 Unitholders also will be able to elect Directors includes: (i) Evaluating and selecting Fund
materially amended or assigned would in accordance with section 16(a) of the Act and, Advisers to manage all or a part of the Fund’s
impose a substantial burden on the under the Partnership Agreement, Unitholders that assets; (ii) negotiating and approving contracts with
own, in the aggregate, 10% of outstanding Units
Fund. Applicants assert that the may call a special meeting of Unitholders for the
Fund Advisers; (iii) when appropriate, approving
requested relief will result in substantial the allocation and reallocation of the Fund’s assets
purpose of electing Directors. As a result,
among multiple Fund Advisers; (iv) monitoring and
cost-savings to the Fund and other Unitholders have the ability to replace the Fund
Board if a sufficient amount of Unitholders so evaluating the performance of the Fund Advisers;
efficiencies. and (v) approving and monitoring the
4. Applicants state that Kiewit (not desire.
10 Applicants also note that the Fund’s method of implementation of procedures reasonably designed
any Fund Adviser or any affiliated operation, including its proposed investment to ensure that the Fund Advisers comply with the
person of any Fund Adviser) is the strategy, is analogous to the operation of certain Fund’s investment objective, policies and
sponsor of the Fund and no member of employee benefit plans, where employers or their restrictions and with the Act.

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