Pomona Investment Fund
Consolidated Schedule of Investments (unaudited)
June 30, 2020
| Private Equity Investments a, h (95.25%) | Geographic | Original | ||||||||||
| Direct Investments/Co-Investments (6.24%) | Shares | Region b | Acquisition Date | Fair Value | ||||||||
| AAA Partners, Inc. c | 744,628 | North America | 06/21/2019 | $ | 1,700,296 | |||||||
| Investcorp Aspen Offshore Fund, L.P. | North America | 07/01/2019 | 4,977,840 | |||||||||
| Roark Capital Partners II Sidecar, L.P. c | North America | 10/18/2018 | 823,326 | |||||||||
| WP AUSA, L.P. c | North America | 07/22/2019 | 5,450,851 | |||||||||
| Total Direct Investments/Co-Investments (6.24%) | 12,952,313 | |||||||||||
| Primary Investments (1.18%) | ||||||||||||
| Aberdeen U.S. Private Equity VIII (Offshore), L.P. c | Europe | 04/11/2019 | 438,989 | |||||||||
| Hellman & Friedman Capital Partners IX (Parallel), L.P. c | North America | 09/28/2018 | 421,870 | |||||||||
| Roark Capital Partners V (TE) L.P. c | North America | 04/30/2018 | 1,581,952 | |||||||||
| The Veritas Capital Fund VII, L.P. c | North America | 10/10/2019 | (4,498 | ) | ||||||||
| Total Primary Investments (1.18%) | 2,438,313 | |||||||||||
| Seasoned Primary Investments (8.24%) | ||||||||||||
| Aerospace, Transportation and Logistics Fund II LP | North America | 03/31/2019 | 1,248,972 | |||||||||
| Avista Capital Partners (Offshore) IV, L.P. | North America | 12/01/2017 | 578,390 | |||||||||
| Gryphon Partners IV, L.P. | North America | 06/24/2016 | 8,363,797 | |||||||||
| Ironsides Offshore Direct Investment Fund V, L.P. c | North America | 12/31/2019 | 2,739,521 | |||||||||
| Merit Mezzanine Fund VI, L.P. | North America | 03/02/2018 | 2,007,536 | |||||||||
| VSS Structured Capital Parallel III, L.P. | North America | 01/26/2018 | 2,165,227 | |||||||||
| Total Seasoned Primary Investments (8.24%) | 17,103,443 | |||||||||||
| Secondary Investments (79.59%) | ||||||||||||
| ABRY Partners V, L.P. | North America | 12/31/2018 | 62,530 | |||||||||
| Advent International GPE VII-B Limited Partnership | North America | 06/30/2015 | 2,664,131 | |||||||||
| Advent International GPE VII-C Limited Partnership c | North America | 12/31/2019 | 2,370,244 | |||||||||
| Altor 2003 Fund (No. 1) LP c | Europe | 12/31/2018 | 7,091 | |||||||||
| AP VIII Private Investors, LLC | Europe | 06/28/2019 | 3,866,207 | |||||||||
| AP VIII Private Investors Offshore (USD), L.P. | Europe | 06/30/2017 | 192,553 | |||||||||
| Apax Europe VI - A, L.P. | Europe | 12/30/2016 | 464,123 | |||||||||
| Apollo Investment Fund VI, L.P. c | North America | 12/31/2018 | 71,064 | |||||||||
| Apollo Investment Fund VII, L.P. | North America | 09/29/2017 | 139,963 | |||||||||
| Ares Corporate Opportunities Fund III, L.P. c | North America | 12/31/2019 | 515,114 | |||||||||
| Audax Mezzanine Fund III, L.P. | North America | 09/30/2016 | 1,888,743 | |||||||||
| Audax Private Equity Fund, L.P. c | North America | 12/31/2018 | 3,553 | |||||||||
| Audax Private Equity Fund II, L.P. c | North America | 12/31/2018 | 30,098 | |||||||||
| Audax Private Equity Fund III, L.P. | North America | 09/30/2015 | 305,282 | |||||||||
| Audax Private Equity Fund IV, L.P. | North America | 09/29/2017 | 215,946 | |||||||||
| Audax Senior Loan Fund III, L.P. | North America | 09/28/2018 | 457,186 | |||||||||
| Avista Capital Partners (Offshore) II, L.P. c | North America | 12/31/2019 | 395,381 | |||||||||
| Avista Capital Partners III, L.P. c | North America | 12/31/2019 | 60,429 | |||||||||
| Avista Healthcare Partners, L.P. c | North America | 12/31/2019 | 2,000,534 | |||||||||
| Bain Capital Asia Fund II, L.P. c | North America | 12/31/2019 | 1,124,256 | |||||||||
| Bain Capital Distressed and Special Situations 2013 E, L.P. c | North America | 06/30/2015 | 212,081 | |||||||||
| Bain Capital Europe Fund III, L.P. c | North America | 12/30/2016 | 460,190 | |||||||||
| Bain Capital Fund VII, L.P. | North America | 12/29/2017 | 5,042,782 | |||||||||
| Bain Capital Fund VIII, L.P. c | North America | 12/30/2015 | 12,525 | |||||||||
| Bain Capital Fund VIII-E, L.P. c | North America | 12/31/2018 | 4,714 | |||||||||
| Bain Capital Fund IX, L.P. c | North America | 12/31/2018 | 350,243 | |||||||||
| Bain Capital Fund X, L.P. | North America | 12/30/2015 | 1,909,851 | |||||||||
| Bain Capital VII Coinvestment Fund, L.P. | North America | 12/29/2017 | 71,475 | |||||||||
| Bain Capital VIII Coinvestment Fund, L.P. c | North America | 12/31/2018 | 1,441 | |||||||||
| Bain Capital IX Coinvestment Fund, L.P. c | North America | 12/31/2018 | 62,942 | |||||||||
| BC Asia III Private Investors, L.P. c | North America | 06/30/2020 | 2,205,801 | |||||||||
| BC Europe IV Private Investors, L.P. c | North America | 06/30/2020 | 1,069,505 | |||||||||
| BC Life Sciences Private Investors, L.P. c | North America | 06/30/2020 | 2,043,187 | |||||||||
| BC XI Private Investors, L.P. c | North America | 06/30/2020 | 2,736,930 | |||||||||
| BC XII Private Investors, L.P. c | North America | 06/30/2020 | 1,872,273 | |||||||||
| BCP V-S L.P. c | North America | 09/29/2017 | 38,453 | |||||||||
| Berkshire Fund VI, Limited Partnership c | North America | 12/31/2018 | 4,459,460 | |||||||||
| Berkshire Fund VII, L.P. | North America | 12/31/2018 | 255,788 | |||||||||
| Blackstone Capital Partners V L.P. | North America | 09/29/2017 | 310,927 | |||||||||
| Carlyle Partners V, L.P. c | North America | 12/31/2019 | 153,848 | |||||||||
| CDRF8 Private Investors, LLC c | North America | 06/30/2017 | 166,871 | |||||||||
| Cerberus Institutional Partners, L.P. - Series Three | North America | 12/30/2016 | 6,014 | |||||||||
| Cerberus Institutional Partners, L.P. - Series Four | North America | 12/30/2016 | 602,628 | |||||||||
| CHP III, L.P. c | North America | 09/29/2017 | 333,871 | |||||||||
| CI Capital Investors II, L.P. c | North America | 12/31/2019 | 324,934 | |||||||||
| CI Capital Investors III, L.P. c | North America | 12/31/2019 | 1,050,627 | |||||||||
| Clearlake Capital Partners IV, L.P. | North America | 12/31/2019 | 2,240,131 | |||||||||
| Clearlake Opportunities Partners (P-Offshore), L.P. | North America | 12/31/2019 | 662,841 | |||||||||
| Comvest Capital II International (Cayman), L.P. c | North America | 06/29/2018 | 359,392 | |||||||||
| Comvest Capital III International (Cayman), L.P. | North America | 06/29/2018 | 1,968,007 | |||||||||
| DCM IV, L.P. c | North America | 06/30/2015 | 663,200 | |||||||||
| DCM V, L.P. c | North America | 06/30/2015 | 464,961 | |||||||||
| DCM VI, L.P. c | North America | 06/30/2015 | 1,219,655 | |||||||||
| Francisco Partners II, L.P. c | North America | 12/31/2018 | 145,628 | |||||||||
| FSN Capital IV L.P. c | Europe | 12/31/2019 | 447,861 | |||||||||
| General Atlantic Investment Partners 2013, L.P. | North America | 12/31/2019 | 3,232,000 | |||||||||
| GESD Investors II, L.P. c | North America | 09/29/2017 | 884,064 | |||||||||
| Green Equity Investors V, L.P. | North America | 09/29/2017 | 2,764,923 | |||||||||
Pomona Investment Fund
Consolidated Schedule of Investments (unaudited) (continued)
June 30, 2020
| Private Equity Investments a, h (95.25%) (continued) | Geographic | Original | ||||||
| Secondary Investments (79.59%) (continued) | Region b | Acquisition Date | Fair Value | |||||
| Gridiron Capital Fund II, L.P. c | North America | 12/31/2019 | $ | 1,617,404 | ||||
| Gridiron Energy Feeder I, L.P. c | North America | 05/10/2017 | 2,414,500 | |||||
| GS Capital Partners VI Parallel, L.P. c | North America | 12/31/2019 | 135,100 | |||||
| GSO Capital Opportunities Overseas Fund L.P. c | North America | 12/30/2015 | 44,912 | |||||
| GSO Private Investors Offshore II, L.P. | North America | 06/30/2017 | 52,147 | |||||
| H.I.G. Bayside Debt & LBO Fund II, L.P. | North America | 12/31/2018 | 392,501 | |||||
| H.I.G. Capital Partners IV, L.P. | North America | 12/31/2018 | 799,773 | |||||
| Harvest Partners V, L.P. | North America | 12/29/2017 | 1,989 | |||||
| Hellman & Friedman Capital Partners VI, L.P. | North America | 03/31/2019 | 339,379 | |||||
| Hellman & Friedman Capital Partners VII (Parallel), L.P. | North America | 06/28/2019 | 9,416,693 | |||||
| HgCapital 5 L.P. c | Europe | 12/31/2018 | 31,167 | |||||
| Insight Equity I LP c | North America | 12/31/2018 | 24,033 | |||||
| Insight Equity II LP c | North America | 12/31/2018 | 796,589 | |||||
| Insight Partners Continuation Fund, L.P. | North America | 08/14/2019 | 7,220,108 | |||||
| Insight Venture Partners (Cayman) VIII, L.P. c | North America | 09/30/2019 | 2,286,117 | |||||
| Insight Venture Partners (Cayman) IX, L.P. | North America | 09/30/2019 | 2,071,578 | |||||
| Insight Venture Partners Coinvestment Fund II, L.P. c | North America | 06/30/2015 | 699,855 | |||||
| Insight Venture Partners Coinvestment Fund III, L.P. c | North America | 06/30/2015 | 205,618 | |||||
| Insight Venture Partners Coinvestment Fund (Delaware) III, L.P. c | North America | 09/30/2019 | 419,451 | |||||
| Insight Venture Partners Growth-Buyout Coinvestment Fund (Cayman), L.P. | North America | 09/30/2019 | 785,363 | |||||
| Insight Venture Partners Growth-Buyout Coinvestment Fund, L.P. | North America | 09/30/2019 | 48,951 | |||||
| Insight Venture Partners VI, L.P. | North America | 06/30/2015 | 19,149 | |||||
| Insight Venture Partners VII, L.P. c | North America | 06/30/2015 | 2,761,673 | |||||
| Insight Venture Partners VIII (Co-Investors), L.P. c | North America | 12/31/2019 | 273,641 | |||||
| Insight Venture Partners VIII, L.P. | North America | 06/30/2015 | 3,472,462 | |||||
| Insight Venture Partners IX, L.P. | North America | 09/30/2019 | 53,270 | |||||
| J.W. Childs Equity Partners III, L.P. c | North America | 12/31/2018 | 7,216 | |||||
| JMI Equity Fund VI, L.P. c | North America | 09/29/2017 | 20,357 | |||||
| Kelso Investment Associates VIII, L.P. | North America | 09/29/2017 | 1,054,415 | |||||
| KKR 2006 Fund L.P. | North America | 09/29/2017 | 263,980 | |||||
| KKR 2006 Private Investors Offshore, L.P. | North America | 06/30/2017 | 445,563 | |||||
| KPS Special Situations Fund III, L.P. | North America | 09/29/2017 | 15,522 | |||||
| KPS Special Situations Fund III, L.P. (Supplemental - Feeder), Ltd. | North America | 12/29/2017 | 24,613 | |||||
| Littlejohn Fund III, L.P. c | North America | 12/31/2018 | 22,200 | |||||
| Littlejohn Fund IV, L.P. | North America | 12/30/2015 | 587,926 | |||||
| Madison Dearborn Capital Partners IV, L.P. c | North America | 12/31/2019 | 474,936 | |||||
| Madison International Real Estate Liquidity Fund V c | North America | 06/30/2015 | 14,173 | |||||
| MDP Fund, L.P. c, d | Europe | 06/30/2015 | 151,020 | |||||
| Merchant Banking Partners IV, L.P. | North America | 09/29/2017 | 20,137 | |||||
| Montreux Equity Partners IV, L.P. c | North America | 09/29/2017 | 382,745 | |||||
| MPE Partners II, L.P. c | North America | 06/28/2019 | 1,929,206 | |||||
| MSouth Equity Partners II, L.P. c | North America | 12/31/2019 | 1,070,436 | |||||
| Nautic Partners VI-A, L.P. c | North America | 12/31/2019 | 821,609 | |||||
| New Enterprise Associates 12, Limited Partnership c | North America | 09/29/2017 | 57,893 | |||||
| New Mountain Partners III, L.P. c | North America | 09/29/2017 | 733,180 | |||||
| NewView Capital Fund I, L.P. c | North America | 10/31/2018 | 5,747,672 | |||||
| Oaktree Private Investment Fund 2010, L.P. | North America | 06/30/2015 | 64,554 | |||||
| Oak Investment Partners XII, Limited Partnership c | North America | 03/31/2019 | 435,517 | |||||
| Paladin III (HR), L.P. c | North America | 09/29/2017 | 827,044 | |||||
| Pamlico Capital III, L.P. c | North America | 12/31/2019 | 3,210,767 | |||||
| Parthenon Investors II, L.P. c | North America | 12/31/2018 | 96,792 | |||||
| Parthenon Investors III, L.P. | North America | 12/31/2018 | 2,128,951 | |||||
| Permira IV Feeder, L.P. c | Europe | 04/23/2020 | 5,204,902 | |||||
| Perry Partners International, Inc. c | North America | 12/30/2015 | 1,316 | |||||
| Platinum Equity Capital Partners II, L.P. c | North America | 09/29/2017 | 60,497 | |||||
| Providence Equity Partners IV, L.P. c | North America | 12/30/2016 | 12,325 | |||||
| Providence Equity Partners V, L.P. c | North America | 12/30/2016 | 85,757 | |||||
| Providence Equity Partners VI, L.P. | North America | 12/30/2016 | 4,628,073 | |||||
| Providence Equity Partners VII, L.P. | North America | 09/29/2017 | 323,548 | |||||
| Providence TMT Special Situations Fund L.P. c | North America | 12/31/2018 | 10,344 | |||||
| Roark Capital Partners II, LP | North America | 06/29/2018 | 980,720 | |||||
| Roark Capital Partners III LP | North America | 06/29/2018 | 1,381,405 | |||||
| Roark Capital Partners IV LP | North America | 06/29/2018 | 821,444 | |||||
| Saw Mill Capital Partners, L.P. c | North America | 09/29/2017 | 65,534 | |||||
| Silver Lake Partners II, L.P. | North America | 12/30/2016 | 11,507 | |||||
| Silver Lake Partners III, L.P. c | North America | 12/31/2018 | 257,248 | |||||
| Silver Lake Partners V, L.P. c | North America | 06/30/2020 | 1,722,962 | |||||
| Sixth Cinven Fund (No. 4) Limited Partnership c | Europe | 06/28/2019 | 1,963,615 | |||||
| SL SPV-2 L.P. c | North America | 02/14/2019 | 588,357 | |||||
| Summit Partners Private Equity Fund VII-A, L.P. c | North America | 12/31/2018 | 567,048 | |||||
| Summit Partners Venture Capital Fund II-A, L.P. c | North America | 12/31/2018 | 36,107 | |||||
| Summit Ventures VI-A, L.P. | North America | 12/31/2018 | 355,943 | |||||
| Sun Capital Partners IV, LP | North America | 12/31/2018 | 175,282 | |||||
| Sun Capital Partners V, L.P. | North America | 12/31/2018 | 283,784 | |||||
| SunTx Capital Partners II, L.P. c | North America | 12/31/2019 | 1,381,144 | |||||
| TA X, L.P. | North America | 12/31/2018 | 3,365 | |||||
| TCW/Crescent Mezzanine Partners VB, L.P. c | North America | 12/30/2015 | 222,680 | |||||
| Tennenbaum Opportunities Fund V, LLC | North America | 09/29/2017 | 210,759 | |||||
| The Veritas Capital Fund III, L.P. | North America | 09/29/2017 | 113,447 | |||||
| The Veritas Capital Fund V, L.P. c, e, f | North America | 06/28/2019 | 11,577,525 | |||||
| Thomas H. Lee Equity Fund VI, L.P. | North America | 12/29/2017 | 53,020 | |||||
| Thomas H. Lee Equity Fund VI (2019), L.P. | North America | 05/30/2019 | 1,058,116 | |||||
Pomona Investment Fund
Consolidated Schedule of Investments (unaudited) (continued)
June 30, 2020
| Private Equity Investments a, h (95.25%) (continued) | Geographic | Original | ||||||
| Secondary Investments (79.59%) (continued) | Region b | Acquisition Date | Fair Value | |||||
| Thomas H. Lee Parallel (Cayman) Fund VII, L.P. c | North America | 06/29/2018 | $ | 5,186,150 | ||||
| Thomas H. Lee Parallel Fund VI, L.P. | North America | 09/28/2018 | 276,945 | |||||
| TowerBrook Investors III, L.P. | North America | 12/31/2019 | 58,945 | |||||
| TPF II-A, L.P. c | North America | 12/31/2019 | 75,921 | |||||
| TPG Growth III (A), L.P. | North America | 12/31/2019 | 2,388,662 | |||||
| TPG Opportunities Partners III (B), L.P. | North America | 06/30/2015 | 47,224 | |||||
| TPG Partners V, L.P. | North America | 09/29/2017 | 60,770 | |||||
| TPG Partners VI, L.P. | North America | 09/29/2017 | 1,512,460 | |||||
| TPG STAR, L.P. c | North America | 09/29/2017 | 270,302 | |||||
| Vista Equity Partners Fund V, L.P. c | North America | 09/28/2018 | 4,860,706 | |||||
| Warburg Pincus Private Equity VIII, L.P. | North America | 12/31/2018 | 1,337 | |||||
| Waud Capital Partners QP II, L.P. c | North America | 12/31/2018 | 70,358 | |||||
| Weston Presidio V, L.P. c | North America | 12/31/2018 | 180,281 | |||||
| Westview Capital Partners II, L.P. c | North America | 12/31/2019 | 727,015 | |||||
| Wicks Communications & Media Partners III, L.P. | North America | 12/31/2018 | 16,236 | |||||
| Wind Point Partners VII-B, L.P. c | North America | 09/29/2017 | 636,731 | |||||
| Total Secondary Investments (79.59%) | 165,166,116 | |||||||
| Total Private Equity Investments (Cost $199,853,733) (95.25%) | $ | 197,660,185 | ||||||
| Short-Term Investments (6.30%) | ||||
| Money Market Fund | Fair Value | |||
| Fidelity Investments Money Market Government Portfolio - Class I, 0.05% g | $ | 11,419,294 | ||
| JP Morgan U.S. Government Money Market Fund, 0.01% g | 1,652,506 | |||
| Total Money Market Fund (6.30%) | $ | 13,071,800 | ||
| Total Short-Term Investments (Cost $13,071,800) (6.30%) | $ | 13,071,800 | ||
| Total Investments (Cost $212,925,533) (101.55%) | $ | 210,731,985 | ||
| Liabilities in Excess of Other Assets (-1.55%) | (3,211,855 | ) | ||
| Shareholders' Capital (100.00%) | $ | 207,520,130 | ||
| a | Private Equity Investments are generally offered in private placement transactions and as such are illiquid and generally restricted as to resale. Total cost and fair value of illiquid and restricted securities as of June 30, 2020 was $199,853,733 and $197,660,185, respectively. |
| b | In the case of Private Equity Investments, geographic region generally refers to where the general partner is headquartered and may be different from where a Private Equity Investment invests or operates. |
| c | Non-income producing. |
| d | Formerly known as Clyde Blowers Capital Fund III, L.P. |
| e | This Private Equity Investment has no redemption provisions, was issued in a private placement transaction and is restricted to resale. |
| f | This Private Equity Investment invests primarily in middle-market companies in select target industries. |
| g | The rate quoted is the annualized seven-day yield of the Money Market Fund at the period end. |
| h | Pomona Investment Fund ordinarily acquires portfolios of investments that are comprised of interests in multiple private equity funds (rather than single interests in such funds) and pays a single purchase price for each such portfolio. As a result, the specific acquisition cost allocated to each Private Equity Investment does not necessarily reflect the actual cost of each such investment. As of June 30, 2020, the aggregate cost of each investment restricted to resale was: $2,445,599, $5,157,479, $616,335, $4,860,000, $457,245, $444,406, $1,372,035, $23,438, $1,218,926, $550,765, $5,096,929, $2,303,199, $2,040,738, $2,295,023, $48,630, $2,488,343, $1,926,199, $15,435, $2,809,485, $207,794, $568,768, $207,218, $354,955, $597,001, $2,625,901, $2,154, $3,942, $2,427,892, $244,719, $520,938, $202,529, $0, $1,363,930, $1,187,300, $56,735, $953,841, $5,901,668, $450,882, $10,142, $421,493, $4,134,802, $60,663, $4,423, $138,015, $785,549, $638,028, $362,119, $1,250,566, $1,121,586, $61,997, $6,066,247, $1,011,242, $509,740, $214,659, $308,362, $60,632, $688,460, $368,499, $429,596, $1,213,956, $1,985,347, $616,478, $461,676, $3,401,809, $161,866, $1,309,767, $1,880,528, $175,594, $413,645, $2,803,950, $443,276, $4,399,910, $2,575,640, $1,818,054, $128,388, $261,086, $205,864, $496,662, $1,702,862, $72,969, $389,489, $8,971,946, $79,100, $157,636, $798,572, $6,881,836, $1,407,388, $1,788,599, $577,980, $218,454, $510,364, $745,009, $46,278, $966,960, $1,731,163, $173,502, $2,215,472, $44,932, $453, $4,482, $1,761,804, $322,206, $347,656, $486,438, $495,196, $10,272, $1,520,498, $514,227, $24,472, $1,858,759, $2,973, $352,649, $1,552,826, $1,793,233, $759,150, $128,093, $883,437, $4,394,345, $45,195, $247,421, $189,447, $2,754,865, $225,909, $1,028,812, $4,819,354, $105,492, $319,961, $19,151, $436,235, $6,123,454, $276,029, $5,693, $842,962, $1,043,189, $849,494, $675,054, $1,415,896, $967,434, $1,602,332, $1,739,006, $497,888, $740,922, $60,261, $444,480, $288,355, $481,254, $1,172,392, $1,414, $283,100, $293,899, $364,079, $7,899,664, $154,498, $678,551, $3,914,273, $379,623, $267,492, $19,744, $2,339,674, $41,200, $340,370, $2,192,383, $573,289, $5,213,106, $29,979, $45,465, $100,545, $675,244, $123,227, $362,605, respectively, totaling, $199,853,733. |
The information regarding the Private Equity Investments, as presented above, has not been prepared, reviewed or approved by any such Private Equity Fund or any general partner, manager or sponsor of such Private Equity Investments or any of their respective affiliates.
1. Organization
Pomona Investment Fund (the “Fund”), was organized as a Delaware statutory trust on August 12, 2014 and commenced operations on May 7, 2015. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company. On August 3, 2017, in connection with the Fund’s revolving credit facility, Pomona Investment Fund LLC was organized as a Delaware limited liability company, and is a wholly owned subsidiary of the Fund. All inter-company accounts and transactions relating to Pomona Investment Fund LLC have therefore been eliminated.
2. Summary of Significant Accounting Policies
The Fund has formal valuation policies and procedures (the “Valuation Procedures”), which have been approved by a board of trustees (the “Board”). The Board has delegated direct and oversight responsibilities for making valuation determinations for investments held by the Fund to a valuation committee (the “Valuation Committee”), which draws on the resources and personnel of Pomona Management LLC (the “Administrator” and the “Adviser”) in carrying out its responsibilities. The Board receives valuation reports from the Valuation Committee on a quarterly basis and determines if the Valuation Procedures are operating as expected and the outcomes are reliable.
The Valuation Procedures are applied to all of the Fund’s investments, which primarily consists of the following types of Private Equity Investment strategies:
| • | Secondary Investments refer to investments in existing Private Equity that are typically acquired in privately negotiated transactions. |
| • | Primary Investments refer to investments in newly established private equity funds, which are made during a private equity fund’s initial fundraising period in the form of capital commitments that are then called down by the fund and utilized to finance its investments during a predefined period. |
| • | Seasoned Primary Investments refer to primary investments made after an investment fund has already invested a certain percentage of its capital commitments. |
| • | Direct Investment/Co-Investment refers to an investment in an operating company by the Fund, as opposed to an investment in an investment fund that, in turn, invests in operating companies. |
All investments are recorded at “Fair Value” in good faith. Fair value is based on actual or estimated market value, with special provisions for assets not having readily available market quotations, and for situations in which market quotations are deemed unreliable. The private equity investments (“Private Equity Investments”) in which the Fund invests normally do not have readily available market prices. Determining the fair value of Private Equity Investments and other assets requires that judgment be applied to the specific facts and circumstances of each asset while seeking to employ a valuation process that is consistently followed. There is not necessarily a single standard for determining fair value of such assets, and determinations of fair value may involve subjective judgments and estimates.
The fair values of the Fund’s Private Equity Investments are estimates and are determined by the Adviser in accordance with the Valuation Procedures. If applicable, these estimates are net of management and performance incentive fees or allocations payable pursuant to the respective organizational documents of each Private Equity Investment. Ordinarily, the fair value of a Private Equity Investment held by the Fund is based on the net asset value (“NAV”) of that Private Equity Investment reported by its investment manager. If the Adviser determines that the most recent NAV reported by the investment manager of a Private Equity Investment does not represent the fair value or if the investment manager of a Private Equity Investment fails to report a NAV to the Fund, a fair value determination is made by the Adviser in accordance with the Valuation Procedures. This includes adjusting the NAV provided by an investment manager for other relevant information available at the time the Fund values its portfolio, including capital activity and material events occurring between the reference dates of the investment manager’s valuation and the relevant valuation date.
For investments that do not have readily determinable fair values and NAV cannot be used, such as certain Direct Investments/Co-Investments, the Fund will review and value such investments using one or more of the following types of analyses:
| • | Market comparable statistics and public trading multiples discounted for illiquidity, minority ownership and/or other factors for investments with similar characteristics. |
| • | Discounted cash flow analysis, including a terminal value or exit multiple. |
| • | The cost of the investment, if the cost is determined to best approximate the fair value of the investment. |
| • | Valuations implied by third-party investment in similar assets or issuers. |
3. Fair Value Disclosures
In accordance with the authoritative guidance on fair value measurements and disclosures under accounting principles generally accepted in the United States of America (“U.S. GAAP”), the Fund discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based on unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurement). The guidance establishes three levels of fair value as listed below.
| - | Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access at the measurement date |
| - | Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, including inputs in markets that are not considered to be active |
| - | Level 3 – Inputs that are unobservable |
The notion of unobservable inputs is intended to allow for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Under Level 3, the owner of an asset must determine fair value based on its own assumptions about what market participants would take into account in determining the fair value of the asset, using the best information available.
The inputs or methodology for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement; however, the determination of what constitutes “observable” requires significant judgment by the Administrator. The Administrator considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The Fund’s Private Equity Investments are generally restricted securities that are subject to substantial holding periods and restrictions on resale and are not traded in public markets. Accordingly, the Fund would not be able to resell such investments for extended periods, if at all.
The following table is a summary of information about the levels within the fair valuation hierarchy at which the Fund’s investments are measured as of June 30, 2020:
| Investments | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Direct Investments/Co-Investments | $ | - | $ | - | $ | 1,700,296 | $ | 1,700,296 | ||||||||
| Short-Term Investments | $ | 13,071,800 | $ | - | $ | - | $ | 13,071,800 | ||||||||
| Total | $ | 13,071,800 | $ | - | $ | 1,700,296 | $ | 14,772,096 | ||||||||
As the Fund uses the NAV as a practical expedient to determine the fair value of certain Private Equity Investments, these investments have not been classified in the U.S. GAAP fair value hierarchy. As of June 30, 2020, $195,959,889 was fair valued utilizing NAV as practical expedient.
During the period ended June 30, 2020, the Fund did not have any transfers between any of the levels of the fair value hierarchy. The Fund records all transfers at the end of each reporting period.
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining value:
Beginning balance March 31, 2020 |
Transfers into Level 3 during the period | Transfers out of Level 3 during the period |
Total realized gain/(loss) |
Total unrealized appreciation /(depreciation) |
Net purchases |
Net sales |
Balance as of June 30, 2020 | |||||||||||||||||||||||
| $ | 2,072,214 | - | - | - | (371,918) | - | - | $ | 1,700,296 | |||||||||||||||||||||
The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and categorized within Level 3 as of June 30, 2020:
| Fair Value | ||||||||
| June 30, | Valuation | Unobservable | Input | |||||
| 2020 | Methodologies | Input | Range | |||||
| $ | 1,700,296 | Market comparable companies | Enterprise value to EBITDA multiple | 9.7x - 14.5x | ||||
4. Federal and Other Taxes
It is the Fund’s intention to meet the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), that are applicable to a regulated investment company (“RIC”). The Fund elected to be a RIC with the filing of its 2015 federal tax return. The Fund intends to continue to operate so as to qualify to be taxed as a RIC under the Code and, as such, to not be subject to federal income tax on the portion of its taxable income and gains distributed to stockholders. To qualify for RIC tax treatment, among other requirements, the Fund is required to distribute at least 90% of its investment company taxable income, as defined by the Code. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. While the Fund intends to distribute substantially all of its taxable net investment income and capital gains, if any, in a manner necessary to minimize the imposition of a 4% excise tax, there can be no assurance that it will avoid any or all of the excise tax. The Fund has adopted October 31 as its fiscal tax year end. The Fund’s open tax years for which the applicable statutes of limitations have not expired are subject to examination by U.S. federal, state and local tax authorities.
At June 30, 2020, the federal tax cost of investment securities and unrealized appreciation (depreciation) as of the period end were as follows:
| Gross unrealized appreciation | $ | 47,587,158 | |
| Gross unrealized depreciation | (20,778,343 | ) | |
| Net unrealized appreciation | $ | 26,808,815 | |
| Cost of investments | $ | 183,923,170 |
The difference between cost amounts for financial statement and federal income tax purposes is due primarily to timing differences related to the timing of the recognition of income, gains and losses from the underlying investments for tax purposes.