AGENCY:
Securities and Exchange Commission (“Commission”).
ACTION:
Notice of an application for deregistration under section 8(f) of the Investment Company Act of 1940 (the “Act”).
SUMMARY OF APPLICATION:
Baker, Fentress & Company (“Company”) requests an order declaring that it has ceased to be an investment company.
Filing Dates:
The application was filed on September 8, 1999. Applicant has agreed to file an amendment during the notice period, the substance of which is reflected in the notice.
Hearing or Notification of Hearing:
An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicant with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 23, 2000, and should be accompanied by proof of service on the applicant, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer's interest, the reason for the request, and the issues contested. Persons may request notification of a hearing by writing to the Commission's Secretary.
ADDRESSES:
Secretary, Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Applicant, 200 West Madison Street, Chicago, IL 60606.
FOR FURTHER INFORMATION CONTACT:
Deepak T. Pai, Senior Counsel, at (202) 942-0574, or Mary Kay Frech, Branch Chief, at (202) 942-0564 (Division of Investment Management, Office of Investment Company Regulation).
SUPPLEMENTARY INFORMATION:
The following is a summary of the application. The complete application may be obtained for a fee from the Commission's Public Reference Branch, 450 Fifth Street, NW, Washington, DC 20549-0102 (telephone (202) 942-8090).
Applicant's Representations
1. The Company is a non-diversified closed-end management investment company registered under the Act. The Company's shares trade under the symbol “BKF” on the New York Stock Exchange.
2. In June 1996, the Company acquired Levin Management Co., Inc. (“Levin Management”) and its subsidiaries, including John A. Levin & Co., Inc. (“Levco,” together with Levin Management and Levco's subsidiaries, the “Levco Companies”), a registered investment adviser, as a vehicle through which the Company believed it could develop a broader financial services business. The Company owns 100% of Levin Management, which in turn owns 100% of Levco. Levco owns 100% of LEVCO GP, Inc., which is the general partner of several investment partnerships managed by Levco, and LEVCO Securities, Inc., a registered broker-dealer. Levin Management provides administrative and management services to Levco and its subsidiaries.
The Company received an exemptive order under the Act in connection with that transaction. See Baker, Fentress & Company, Investment Company Act Release Nos. 21890 (April 15, 1996) (Notice) and 21949 (May 10, 1996) (Order).
3. The Company's investment portfolio consisted of the following: (a) a diversified portfolio of investments in publicly-traded, predominantly large-cap companies; (b) investment in private placement securities; (c) Levco Companies; and (d) a 78.5% interest in Consolidated-Tomoka Land Company (“CTO”).
4. On June 17, 1999, the Board, including those directors who are not “interested persons” of the Company as defined in section 2(a)(19) of the Act, considered and unanimously approved the Plan for Distribution of Assets of the Company (the “Plan”) and authorized the Plan's submission to the Company's shareholders. The Plan authorized the Company to: (a) stop investing in accordance with the Company's current investment objectives, restrictions and policies, liquidate the securities held in the public portfolio and continue liquidating the private portfolio; (b) invest the proceeds of the liquidation in short-term, liquid investments; (c) distribute the proceeds of the liquidation and the Company's shares of CTO to its shareholders; (d) prepare and file the documents necessary to deregister the Company as an investment company; and (e) continue in business as a holding company, the principal remaining asset of which will be the Levco Companies. On August 19, 1999, the Company's shareholders approved the Plan and the deregistration of the Company under the Act.
5. The Company states that it has completed implementing the Plan. The principal asset of the Company now are the Levco Companies.
Applicant's Legal Analysis
1. Section 8(f) of the Act provides that whenever the Commission, upon application or its own motion, finds that a registered investment company has ceased to be an investment company, the Commission shall so declare by order and upon the taking effect of such order, the registration of such company shall cease to be in effect.
2. Section 3(a)(1)(A) of the Act defines an investment company as an issuer which “is or holds itself out as being engaged primarily * * * in the business of investing, reinvesting, or trading in securities.” The Company states that it is not an investment company as defined in section 3(a)(1)(A) of the Act, but is a holding company that owns the Levco Companies.
3. Section 3(a)(1)(C) of the Act defines an investment company as any issuer which “is engaged in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer's total assets (exclusive of Government securities and cash items) on an unconsolidated basis.” The Company states that it is not an investment company as defined in section 3(a)(1)(C) because the Company does not own, and does not propose to acquire, “investment securities” having a value exceeding 40% of the value of its total assets. The Company states that its interest in Levin Management, its wholly-owned subsidiary, represents approximately 96% of the Company's total assets on an unconsolidated basis. The Company further states that Levin Management's only asset is its 100% ownership interest in Levco. The Company states that Levco is not an investment company within the meaning of section 3(a) of the Act.
Investment securities are defined in section 3(a)(2) of the Act to include all securities except (a) Government securities, (b) securities issued by employees' securities companies, and (c) securities issued by majority owned subsidiaries of the owner which are not investment companies, and are not relying on the exception from the definition of investment company in sections 3(c)(1) or 3(c)(7) of the Act.
4. The Company thus states that it has ceased to be an investment company, and that it is entitled to an order deregistering the Company under the Act.
For the Commission, by the Division of Investment Management, under delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-7727 Filed 3-28-00; 8:45 am]
BILLING CODE 8010-01-M