NPORT-EX 2 fp0056760_nportex.htm PART F

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 

  

aPrivate 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.
bIn 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.
cNon-income producing.
dFormerly known as Clyde Blowers Capital Fund III, L.P.
eThis Private Equity Investment has no redemption provisions, was issued in a private placement transaction and is restricted to resale.
fThis Private Equity Investment invests primarily in middle-market companies in select target industries.
gThe 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.