SEC Division of Investment Management staff letter: First Financial Fund, Inc., et al.

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Our Ref No. 97-46-CC
Fir~t Financial Fund, Inc., RESPONSE OF THE OFFICE OF CHIEF COUNSEL et al.

DIVISION OF iNvSTMNT MAAGEMNT File No. 811-4605

Your letter of January 27, 19~7 requests our assurance that

we would not recommend enforcement action to the Commission under

the Investment Company Act of 1940, if certain registered

investment companies do not treat Douglas H. McCorkindale

( "McCorkindale"), a director or trustee of each of the companies,

as an interested person, under the circumstances described below.

Facts
Mr. McCorkindale serves as a director or a trustee for each

of the following investment companies: First Financial Fund,

lric., Global Utility Fund, Inc., The High Yield Plus Fund, Inc.,

and The Target Portfolio Trust (the "Funds"). Wellington

Management Company, LLP ("Wellington") serves as the investment

adviser or sub-adviser to each of the Funds, or to certain

portfolios of the Funds.1

Mr. McCorkindale also is a limited partner in two investment

partnerships (the "Partnerships") that are not registered under

the Investment Company Act pursuant to the exclusion provided by

Section 3 (c) (1) of the Act. The Partnerships are managed and

advised by their general partner, Wellington Hedge Management,

LLC ("WHLC"). WHLC has two members: Wellington and Wellington Hedge Management, Inc. ('iWHI"), both of which are

registered investment advisers. Wellington and WHI are under

the conuon control of Robert W. Doran ("Doran"),' Duncan M.

McFarland ("McFarland") and John R. Ryan ("Ryan,,).2 l You represent that the limited pa~tners of . the Partnerships,

including Mr. McCorkindale, have no right to vot~ or òtherwise

participate in the management of the' Partnerships. You represent that Mr. McCorkindale currently holds less than 5% of the limited

partnership interests in each Partnership and that, in the

future, his interest in each Partnership will remin under 5%.

1you request no-action relief on behalf of the Funds

currently managed by Wellington and any other management

investment companies that now or in the future are managed by

Wellington. Other Wellington-managed funds can, of course, rely

on this letter in determining Mr. McCorkindale' s status as an

interested person if their only relationship to Mr. McCorkindale

is the same as the Funds' relationship to Mr. McCorkindale, which

is described more fully below.

2Messrs. Doran, McFarland and Ryan are the managing partners

of Wellington and the sole shareholders of WHI.

2
You further represent that Mr. McCorkindale obtained his

interests in the Partnerships on the same term as the other

limited partners and that the offer to him of the opportunity to

invest in the Partnerships was not related to any Fund business.

Last, you state that Mr. McCorkindale has no other relationship

with Wellington other than his interest in the Partnerships.

Analysis
Section 2 (a) (19) (A) (iii) of the Investment Company Act
defines an "interested person" of an investment company3 to

include, in pertinent part, any person who is an interested

person of the company's investment adviser. Section 2 (a) (19) (E) (i), in turn, defines an "interested person" of an investment adviser to include any affiliated person of such

investment adviser. An "affiliated person" is defined in Section 2 (a) (3) to include: any person owning, controlling, or holding with power to vote, 5% or more of the outstanding voting

securities of the other person; any person controlling,

controlled by or under common control with the other person; and

any officer, director, partner, co-partner or employee of- such

other person. 4

Because Mr. McCorkindale is a limited partner of the Partnerships, . he is a co-partner of WHLC, the general partner of the' Partnerships, and hence an affiliated person of WHLC. WHLC, in turn, is affiliated with Wellington because the two

companies are under the common control of Messrs. Doran,

McFarland and Ryan.s Thus, Mr. McCorkindale is a second-tier

affiliate of Wellington, the adviser or sup-adviser to each of

the Funds. Mr. McCorkindale does not appear to be an interested

person of Wellington because Section 2 (a) (19) (E) (i), by its terms, does not reach second-tier affi\iations. You note, '

however, that Mr. McCorkindale could b9 deemed a first-tier

affiliate, and thus an interested person, of Wellington if the staff were to "collapse" WHLC and Wellington rather than

treating them as separate entities. If Mr. McCorkindale is an

interested person of Wellington, he also would be an interest~d

person of the Funds. 6

3Section 10 of', the Investment Company Act generally permits no more than 60% of the memers of an investment company' s board of directors to be interested persons of the investment company.

4Sections 2 (a) (3) (A), (C) and (D) of the Investment Company

Act, respectively.

~essrs. Doran, McFarland and Ryan control WHLC through \ their ownership of WHI, the managing member of WHLC.

6See Section 2(a) (19) (A) (iii) of the Investment Company Act.

i

3
You contend that Mr. McCorkindale' s indirect connection with

the Funds as a limited partner of two Partnerships advised by an

affiliate of the Fund's adviser is not the type of "co-partner"

affiliation that Congress intended to result in an individual

being classified as an interested person of an investment

company. As Mr. McCorkindale's limited partnership interests

confer no right to participate in the management of the

Partnerships, you state that there is little reason to

distinguish an investment in the Partnerships from an investment

in a mutual fund or other entity organized as a corporation or a

trust. Under Section 2 (a) (3) (C), stockholders and trustholders

are not included within the definition of an "affiliated person"

unless they own 5% or more of the outstanding voting securities

of an entity. Mr. McCorkindale's ownership interest in each

Partnership is, and will remain, under 5% of the outstanding

limited partnership interests of each Partnership.

We agree that Mr. McCorkindale should not be treated as an

interested person of the Funds. The Commission has recognized

that, in many circumstances, limited partners and shareholders

should be treated comparably.7 Mr. McCorkindale's role as a

passive investor in the Partnerships is, and should be treated

as, comparable to that of a shareholder owning less than 5% of

the outstanding voting securities of a corporation or trust.

Accordingly, we would not classify Mr. McCorkindale as an

interested person of Wellington (and therefore an interested

7See Rule 2a3 - 1 under the Investment Company Act (limited partners of a registered investment company or business

development company organized as a limited' partnership are not

deemed to be affiliated persons of the fund solely by virtue of

their status as limited partners). See also Investment Company

Act Release No. 18868 (July 26, 1992r-ån proposing Rule 2a3-1,

the Commission stated that "(t) here appears to be no reason to

treat limited partners and shareholders of an investment company

differently under the affiliated transactions provisions of the

Act. Limited partners, like shareholders, are passive investors

. . . and where neither type of investor owns more than five

percent of the voting securities, there is little, if any,

potential for overreaching.") .

The staff has applied similar reasoning in granting no￾action relief under the Investment Advisers Act of 1940. See The Ayco Company, L.P. (pub. avail. Dec. 14, 1995) (treating limited partners comparably to corporate shareholders for purposes of the notification requirements of Section 205 (a) (3) ); W. R. Huff Asset Management Co., L.P. (pub. avail. Aug. 10, 1994) (investment adviser organized as a limited partnership need not comply with the recordkeeping requirements of Rule 204-2 (a) (12) with respect to limited partners who own less than 5% of the adviser's partnership interests).

4 person of the Funds) by virtue of his less than 5% interest in

the Partnerships managed by an affiliate of Wellington.

For the reasons stated above, our conclusion would be the same if Wellington, rather than an affiliate of Wellington,

managed the Partnerships. It therefore is unnecessary to express our views on your contention that Wellington and WHLC (the Wellington affiliate that manages the Partnerships) should be

treated as separate entities, rather than "collapsed" into a

single entity, for purposes of determining Mr. McCorkindale's

status as an interested person of the Funds. 8

Eased upon the facts and representations in your letter, we

would not recommend enforcement action to the Commission if the

Funds do not treat Mr. McCorkindale as an "interested person" as a result of his limited partnership interest in the Partnerships.

You should note that any different facts or representations might

require a different conclusion.

0-fh Eileen M. Smiley

Senior Counsel

..
8The staff in the past has collapsed second-tier

affiliations into first-tier affiliations for purposes of

determining an individual's status as an "interested person"

under Section 2 (a) (19). See,~, Vestaur Securities, Inc.

avail. Jan. 4, 1973); Southwestern Investors, Inc. '(pub.

avail. June 13, 1971); Viking Growth Fund, Inc. (pub. avail. Mar.

8, 1971). More recently, however, the staff has taken the

position that it would not, "absent substantial policy reasons,"

(pub. collapse affiliated entities for purposes of determining a person's status as an interested or affiliated person. See GT

Global Growth Series (pub. avail. Feb. 2, 1996); Salomon

Erothers, Inc (pub. avail. May 26, 1995). In this regard, we

note your representation that the management structure of the

Partnerships was not adopted to prevent Mr. McCorkindale from

being an interested person of Wellington or the Funds.

KIRKPATRICK & LOCKHART LLP
1800 MASACHUSET AVE, N,W

2ND FLOOR

WASHiGTON, D,C. 20036-1800

TELEPHONE (202) 778-90
FACSIMLE (202) 778-9100
STEPHA A. DJlNS
(202) 778-9252 IllJfJß tJ,JjMJ.

January 27, 1997 JAN 2 7 1997.
_tJ 't
Jack Murphy, Esq.

Offce of the Chief Counsel

Division of
Investment Management
U.S. Secunties & Exchange Commssion

450 Fifh Street, N.W.

Washington, D.C. 20549

No-Action Request on behalf of
First Financial Fund, Inc., et al. -
Sections 2(a)(19) and 2(a)(3)(D) of the Investment Company Act of 1940 Dear Mr. Murphy:
First Financial Fund, Inc. ("First Financial"), Global Utility Fund, Inc. ("Global Utility"), The High Yield Plus Fund, Inc. ("High Yield Plus"), The Target Portfolio Trust ("Target Portfolio") (collectively, "Funds"), Wellngton Management On behal of

Company, LLP ("
Wellington Management"), any other management investment companies that now or in the future are managed by Wellngton Management, and Douglas H. McCorkidale, we hereby request that thd Staf of the Division of Investment Manag~ment ("Staf'): (1) conf our interpretation that Wellgton Management and its afliate, WeUigton Hedge Management, LLC ("WHLC"), with whom Mr. McCorkindale is a "co-parner," should not be "collapsed" and treated as a single entity so as to render Mr. McCorkidale an afate of Wellgton Management; and (2) advise us that it wi not recOmmend that the Secunties and Exchange Commssion (the "Commssion") take enforcement action agaist the Funds, under sections 2(a)(19) and 2(a)(3)(D) of the Investment Company Act of 1940, as amended ("1940 Act"), if the Funds do not treat Mr. McCorkidale as an "interested person" of the Funds.
i. Background

First Financial and High Yield Plus are both Marland corporations. registered under the 1940 Act as diversifed, closed-end management investment companes for ) which Welligton Management serves as investment adviser and Prudential Mutual Fund Management LLC ("PMF") acts as admistrator. Global Utility, intially registered under DC-152867.06 BOSTON. HARRISBURG. ,"HAM1 . NEW YORK. PIITSBURGH. WASHINGTON

KIRKPATRICK & LOCKHART LLP
Offce of the Chief Counel

Division of Invesent Maement

Janua 27, 1997

the 1940 Act as a diversifed, closed-end maagement investment company, has operated as a registered open-end management investment company since Februar 4, 1991. PMF serves as manager and Wellngton Management serves as investment sub-adviser to Global Utilty. Target Portfolio is registered under the 1940 Act as an open-end management investment company with ten senes or portfolios. PMF serves as manager of Target Portfolio and Wellgton Management serves as investment adviser for two portfolios of Target Portfolio: the Mortgage Backed Secunties Portfolio and the U.S" Governent Money Market Portfolio. PMF is a subsidiar of The Prudential Inurance Company of Amenca

(t1Prudential ") and is par, of Prudential Investments, a group of businesses at Prudential. Wellgton Maagement is a Massachusetts lited liabilty parnership and a registered investment adviser under the Investment Advisers Act of 1940 ("Advisers Acttl). Welligton Management is a professional investment counselig fi which provides

investment servces to investment companes, employee benefit plans, endowment funds, foundations, and other institutions and individuals. As of December 31, 1996, Wellngton Maagement held investment authnnty over approxiately $133 bilon of assets. Robert W. Doran Duncan M. McFarland, and John R Ryan serve as managig parners of Welligton Management.

Bay Pond Parners, L.P. (t1Bay Pond") and North River Parners, L.P. (t1North River") (collectively t1Parnershipstl) are both pnvate investment companes organed as Delaware lited parerships. The Parnerships are \tot registered under' the 1940 Act pursuant to the exclusion from the defition of "investment companytl provided by secion 3(c)(1) of the 1940 Act. The lited parners of the Parerships have no nght to paricipate in the control of the Parnerships' business, . pursuant to the Parnership

Agreements, each of which states tht the lited parners "sha have no nght to vote or

otherwse paricipate in the management of the Parnership and sha have no authonty to act on beha of the Parership" in any maer. The general parer for each of the Parnerships is WHLC, a Massachusetts lited liabilty company. Under the Parnership Agreements, WHLC, as general parner of Bay Pond and North River, is responsible for identifg potential investments and selecting the investments made by the Parnerships. In addition, WHLC pedorms management and admstrative servces for the Parnerships. Wellgton Hedge

Management, Inc. (t1WHti), a Masachusetts corporation and a registered investment adviser, serves as the managig member of WHLC; Wellgton Management is

KIRKPATRICK & LOCKHART LLP
Offce of the Chief Counel
Division of Invesent Manement
Januar 27, 1997

WHLC's only other member. WHs sole shareholders are Messrs. Doran McFarland, and Ryan the managig parners of Wellgton Mangement.

Douglas H. McCorkindale was elected on October 30, 1996 to serve as a director or trustee of each Fund. Mr. McCorkidale is a lited parner in each of the Parnerships, holding less than a 5% lited parnership interest in either Bay Pond or North River as of December 31, 1996. i Mr. McCorkidale has no other relationships with Wellgton Maagement, PMF or Prudential. His lited parnership interests represent a smal portion of his investment assets. His purchases of these interests were on the same terms as al other lited parners and the offer to hi of such interests was unrelated to

any Fund matters.
II. Discussion

Section 2(a)(19)(A)(üi) of the 1940 Act defies as an "interested person" of an

investment company to include, as relevant here, any person who is an "interested person" of the company's investment adviser.
Section 2(a)(19)(B)(i), in turn defies an "interested person" of an investment
adviser to include any "afliated person" of such investment advisér.

Section 2(a)(3)(D) includes as an "afated plrson" of an entity, any parner or

co-parner of such entity. Section 2(a)(3)(C) defies "afated person" as "any person directly or indirectly controllng, controlled by, or under common control with, such other person. " Mr. McCorkidale, as a lited parer in the Parerships, is a co-parner of WHLC, and thereby an afated person of WHLC under secion 2(a)(3)(D). ~LC, in turn is afated with Wellgton Magement under secon 2(a)(3)(C) by vie of being direcly or indirecy "under the common control" of Messrs. Doran

McFarland, and Ryan. As such, Mr. McCorkidale, an afate of WHLC, is a

"second-tiet' afliate of
Welligton Mangement, the investment adviser to the Funds. i Mr. McCorkidae and Wellion wi ene tht Mr. McCrkdae's intees in each Parerhip wi rem less th 5%.

KIRKPATRICK & LoCKHART LLP

Offce of the Chief Counel
Diviion of Invesent Manement
Januar 27, 1997

Section 2(a)(19)(B)(i) of the 1940 Act does not, on its face, reach second-tier
afations, as the literal language of the section applies only to "any afated person of such investment adviser" (i.e., fist-tier afates). Nevertheless, were WHLC and Wellgton Management to be "collapsed" into a single entity for purposes of section 2(a)(19), Mr. McCorkiiidalewould be a fist-tier afate of Wellgton Management and therefore an "interested person" of the Funds pursuant to section 2(a)(19)(A)(ii) and 2(a)(19)(B)(i). Because, in the past, the Staf has collapsed second-tier afations into

fist-tier afations for purposes of determg an individual's status as an "interested

person" of an investment company under section 2(a)(19), the Funds seek confation that the Staf would interpret 2(a)(19) in accrdance with its plai meag in this cae.2 It

is our view that section 2(a)(19) should not be interpreted so as to reach relationships such as Mr. McCorkidale's in this cae, as doing so would be inconsistent with recent Staf and Commssion positions and actions, as well as with the intent of Congress in enacting the 1940 Act. As described below, recent positions taken by the Staf have indicated that, absent compellg circumstances, the Staf wi not collapse afates of afates for purposes of

section 2( a )(19) of the 1940 Act, as well as for other purposes. In G. T. Global Growth
Series et aI., the Staf stated it would not recommend enforcement action where a director of a fund was a parner in a law fi that had acted as outside counsel to a ban under

common control with the fund's adviser. 3 The director was not "a person who ... withi the last two fiscal yeas acted as legal counsel for the investment adviset' to the fud withi the meag pf section 2(A)(19)(B)(iv) of the \940 Act. Nevertheless, were the ban and investment adviser to be "collapsed" into one entity, the direcor's legal servces would then have been considered for the benefit of the collapsed entity, and would render hi an "interested person" of the adviser, and ultimtely of the fud as well, under

section 2(a)(19)(A)(ii).

The Sta in G. T. Global Growth Senes, declig to 'collapse the two entities, noted the contrast to the 1973 Vestaur letter, where "without explantion," the Staf 2 ~ Vesur Seties, Inc., 1973 SEC No-Act LE 3780 (Jan. 4, 1973) (collapsin wholly-owned invesent advise and ba subsidiares into a sine entity); Southweser Invesors, Inc., 1971 SEC No-Act. LEXI 1204 Jooe 13, 1971) (collapsing paent, subsidiai, and inveseit advise and ooderti subsidiai of the

subsidiai into one entity); and Vik Grwt Food, Inc., 1971 SEC No-Act. LE 2959 (M. 8, 1971) (collapsin paent and subsidiai) 3 G.T. Globa Growt Seres et aI., 1996 SEC No-Act. LEX 323 (Feb. 2, 1996) ("abset substi policy

reans, (the st genery will not conside aftecompaes to be a sine entity")

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Offce of the Chief Couiel
Division of Invesent Maement
Janua 27, 1997

detenned "for the purpose of (that) analysis" ,to "consider the adviser and the ban as one entity."4 Explaig Vestaur, the Staf noted the letter stood "in contrast" to the policy subsequently adopted by the Staf in Salomon Brothers Inc. (as descnbed below), wherein "(the Staf stated that, absent substantial policy reasons, we generaly wi not consider afated companes to be a single entity." The Staf justifed its decision not to "collapse" the two entities in the G.T. Global Growth Senes leter, and its general policy agaist doing so, by reference to policy considerations it identifed as underlyig the 1940 Act, and to the Congressional intent as to how these should be effected. S The Staf reaoned that those providig legal servces or standig in "any material business or

professional relationship" with an afliate ofan underwter or adviser to a fund should be detenned to be interested persons only through application of the subjecive, flexible 2(a)(19)(B)(vi) standard, and not under the 2(a)(19)(B)(iv) nile. Nonetheless, the Staf

noted in its response that if the intermediate entities were created for purposes of altenng a person's status under section 2(a)(19), it would consider whether there was a violation of section 48(a) of the 1940 Act, which prohibits persons from doing indirectly what they canot do directly under the Act. The Salomon Brothers Inc. letter concerned a broker-deaer under common control with two investment advisers; the broker-deaer proposed to engage in pnncipal and agency transactions with funds within the same complex as those for which the afated advisers served as sub-advisers. 6 The broker-deaer, Salomon Brothers Inc.,

sought Staf assurances it would not be "collapsed" with the sub-adviser(s) so as to render it a second-tier afate of the funds with which it soiAt to trade, bnngig it withi the ambit of secions 17(a) and 17(e) of the 1940 Act.7

4 Id.
S Reprt on the Public Policy Implicaon of
Invesent Compy Grwt H.R Re. No, 2337, 89l1 Cong. 2d se.
(196) ("itees pe"ar those pe with "any mateal buses or prfeson relationsp with an

afte. pen . . and their afte pen. "). The Sta in GT Globa Grwt Sees inered tht the

exce of a sete prvision, 2(aXI9)(Xvi) of the 1940 Act, gover les diec aftions by us of a subjecve, ca-by-c stda evidece Cong' belief th suh relationps prte les risk ofha to the fud. Indee the Sta commente tht Conges hope to avoid "any daer of indvert violations of the requiements of the 1940 Act" due to the subjectivity of the "mateal buses I prfessiona relationship" tes. 6 Saomon Brother Inc., i 995 SEe No-Act. LE 535 (My 26, i 995). ) 7 The application of thes provisions to the brker-der would have signcatly lite the maer in whch it could trde with the invesent compaes on a prcipa or agency bas.

KIRKPATRICK & LOCKHART LLP
Offce of the Chief Col
Division of Invesent Maemt

Janua 27, 1997

The Staf In declig to view the entities as one, reaoned that the facts presented no nsk of the tye secion 17 was intended to guard agaist. Wherea "secion 17 was intended to prevent insiders from using an investment company to benefit themselves to the detnment of the company," no such risk existed where the broker would only trade with accounts not managed by its afated investment adviser(s). "Collapsing" the investment adviser(s) and broker, where (it was presumed) neither had any inuence over the non-advised fuds the broker proposed to trade with served no purose. In the course of its analysis, the Staf addressed the Vikg Growt Fund, Inc. letter, wherein it had "declied to permt a direcor of the adviser's parent to engage in a pnncipal transaction with the fund" by ''wthout analysis" determg the director to be a "direct afliate" of the adviser, thereby "collapsing" the adviser and its parent and makg the director a second-tier afate of the fund. Thus, both the G. T. Global Growth Senes and Salomon Brothers letters evidence a distancing from the "collapsing" approach applied in earlier precedents. Nonetheless, the Staf preserved the outcomes of those earlier letters by positing that simiar conclusions could have been reached in those cases on other legal bases. Mr. McCorkidale's role in the Parnerships is a passive, limited one. He is in no greater a position to inuence the investment adviser or the funds than were the director

and broker-deaer in the letters descnbed above. Moreover, the structure adopted by Wellgton Management with respect to its investment parnerships in this case was not established with a view to effecting ,Mr. McCorkidall.'s status vis-à-vis the Funds. Just as no policy imperatives mandated "collapsing" the relevant entities in the letters above, no special or compellg circumstances warant doing so in this instance, nor would any , policy interest of the tye contemplated by Congress in passing the 1940 Act be served by doing so. As noted above, if the collapsing afates theory is not'applied, Mr. McCorkidale wi not be an "interested person" of the Funds under the plai language of

secon 2(a)(19). In addition to being consistent with the plai meag of secion 2(a)(19) of the 1940 Act, an interpretation that the Funds need not treat Mr. McCorkidale as an "interested person" is consistent with the policies underlyig the statute. Mr. McCorkidale's only relationship to the Funds and the investment adviser (other than his servce as a diecor) is as a passive investor in an investment vehicle

\ sponsored by the Funds' adviser. As such, there is litte to distinguish his relationship from that of a shareholder in a mutual fud advised by Wellgton Management or of an advisory client of that fi. But for the provisions in 2(a)(3)(D) rendenng "parners" and

I

KIRKPATRICK & LOCKHART LLP
Offce of the Chief Counl
Diviion of Invesent Maement
Janua 27, 1997
"co-parners" afated persons of each other, Mr. McCorkidale would have no afation with the adviser. For example, if Mr. McCorkidale were a shareholder in a mutual fund advised by Wellngton Management, the statute would not designate hi an afate of

either Welligton Management or that fund, unless his holding equaled or exceeded 5% of the outstanding voting securities. Most liely because Congress did not foresee the growth in the use of lited parnerships as investment vehicles, the fact that the lited

parnership structure was adopted in this cae causes a diferent result. However, as the Commssion has previously recogn, lited parners are tyicaly passive investors that

need not, as a policy matter, be treated as afated persons solely because of their status

as such.8 Management of lited parnerships is tyicay vested exclusively in the general parner, who exercises full control over the business and afais of the parnership to the

exclusion of the limited parners. The Parnerships described above are structred in just this way.9 8 The Commssion acknowleded tht the dispte treatment of corpmte shaeholder and holder of lite

paerhip interest wa not warted by public policy in most cirumces, in proposing Rule 2a3-1:
"There appe to be no rean to treat limted paer and shaeholdes of an investent

compay differently under the afate trctions provisions of the (1940) Act. Limte

paer, lie sheholde, are paive invesors in the invesent compay, and where neither

ty o.f investor own. more th .five pet of. th~ voti ~ties, there i~ ~tte, if any, poteti for overhi. Accrdy, the Coon ha routely exempte lite paer

fr the defition of "afate pe" where they do not own cotrol. or hold the power to

vote five pet or more of the outsdi voti seties of the paerp." 57 Fed. Reg. 34,728. By its te, Rule 2a-1 ony applies to lite paerps th have re unde the 1940 Act as maement invest coes or buses developent coes. However, the mtione bed Rule 2a-1 ha be exde to other sitution, as the Sta ha retly taen the poition "tht, genery, (it) is appprte to trt lite, paer cobly. to cote sholde beus of the estiy paive natu ofa lite paerp inte" The Ayc Coy, L.P., 1995 SEe No-Act. LE 1041 (D. 14,

1 995) (equati lite paerp inte with corpte sholde inte for pur of Seon

205(aX3) of the Advi Act). Hence, the public policy re idetied by the Commssion app equay applicable to lite paerps tht ar exempt frm invesent compay regsttion purt to Seon 3(cXl) of the 1940 Act. '

9 A poled iIvesent vehicle wa us mther th setely maed acunts in orde to obta the crtica ma of asts neeed to pur the chose stte sufuy. A lite paerp wa chose as the vehcle

beus it provide cetr maement, much lie a corpmtion but without the double tation of income tht attches to most corpmtions.

KIRKPATRICK & LOCKHART LLP
Offce of the Chief Counel
Division of Investent Manement
Januar 27, 1997

m. Conclusions

It is submitted that the circumstances of Mr. McCorkindale's limited parnership interests in the Parnerships, and resulting second-tier afation to Wellgton Management, do not raise the concerns that the provisions of the 1940 Act descnbed above were intended to address. Mr. McCorkidale stands in a position of no more inuence relative to the Funds than did the persons at issue in the G. T. Global Growth Senes Inc. and Salomon Brothers Inc. letters above. His servce as an independent director to the Funds is consistent with the protection of investors and the purposes faily intended by the policy and provisions of the 1940 Act.

For the foregoing reasons" and based on the facts, circumstances and

representations descnbed above, we respectfully request confation that the Staf will

not recommend enforcement action against the Funds, or any of the other paries hereto, if Mr. McCorkindale serves as an independent director of the Funds. The Stafs

concurrence in our position that Welligton Management and WHLC should be treated as separate entities in determg the relationship between Mr. McCorkindale and the Funds is also requested. These no action assurances and interpretation are intended only to permt Mr. McCorkindale to serve as an independent director or trustee to the Funds and would not afect the status of the Partnerships or the Funds. Than you for your consideration. For the coitenience of the Staf two copies of

this letter are enclosed.
Please do not hesitate to ca me at (202) 778-9252 or Arhur J.
Brown at (202) 778-9046 with any questions you may have.
~incerely,
~~
Stephane A Djins cc: Karen L. McMian

DivisÌon of
Investment Management