SEC Division of Investment Management staff letter: Jennison Associates LLC

-- ••• 'oM, ._ ~.••• .~ __ • r... - ...' .,,-.,'•.••• .• __.-. . . __ . ". ..•. ..__. ••........ _~ •.a. ... • • __ . 0'.. __ . ••. .~:. ... AC'I JAA _ . oS s~ ~1~DVl.-:----;- RULE BOi.( j. l4J1tb.1---- PUBLIC . 71L/IJO A\fAlLABILITY +r.::!.-~--- RESPONSE OF THE OFFICE OF CHIEF COUNSEL DIVISION OF INVESTMENT MANAGEMENT July 6, 2000 Our Ref. No. 20006261544 Jennison Associates LLC . File No. 801-5608 Your letter ofJune 22, 2000 requests assurance that the staffwould not recoinmend enforcement action to the Commission against Jennison Associates LLC ("Jennison") 1illder Section 204 ofthe Investment Advisers Act of 1940 ("Advisers Act") and Rule 1Q4.:2(a)(l6) thereunder ifJennison retains only those records described in your letter to supp6it its performance from 1969 to 1981, even though some ofthe underlying records that Jennison previously maintained to form the basis for, or demonstrate the calculation of, that performance under Rule 204-2(a)(16) were destroyed in a series of fIres in 1997. As a matter ofpolicy, we will not provide no-action assurances regarding whether an investment adviser's particular records are sufficient to form the basis for, or demonstrate the calculation of, the adviser's investment performance under Rule 204- 2(a)(16). As.discussed below, however, advisers who advertise their performance can facilitate examinations by the staff by maintaining the following records: (i) records prepared by a third party ~, custodial or brokerage statements) that confIrm the accuracy ofclient account statements and other performance-related records maintained by the adviser; and (ii) reports prepared by an independent auditor that verify the advisers' advertised performance. . Facts You state that Jennison, an investment adviser that is registered under the Advisers Act, \vas incorporated in 1969 and reorganized in 1998 as a limited liability company. Jerihison provides investment advice primarily to institutional investors, such as endowme~,foundations, public and corporate employee benefIt plans, pension plans, and investment companies registered under the Investment Company Act of 1940. You state that Jennison provides advice as to both equity and fIxed-income securities. You state that Jennison includes composite performance in its institutional marketing materials for each ofits investment strategies for periods dating back to the inception ofeach such strategy, the fIrst ofwhich was introduced in 1969. Jennison does not separately include the performance of any individual account in these materials. You state that, for many years, Jennison maintained certain ofthe records relating to its investment advisory business at a document storage facility operated by Iron Mountain Incorporated ("Iron Mountain"), a full-service provider ofrecords management and related services. In March 1997, Iron Mountain experienced three fIres that resulted in extensive damage to two ofits records management facilities, including the
one used by Jennison. You state that all ofJennison's records that were stored with Iron Mountain