Going Private Transactions using Combined Schedules TO and 13E-3

The board of directors of Kiewit Investment Fund LLLP, a non-diversified, closed-end management investment company that operates as an "employees' securities company" under the Investment Company Act of 1940 Act, voted unanimously on June 28 to dissolve and liquidate the Fund.  The Fund was designed as a long-term investment vehicle primarily for participants in the Peter Kiewit Sons', Inc. Employee Ownership Plan.  A wholly-owned subsidiary of Peter Kiewit Sons' offers to purchase all outstanding limited partnership units of the Fund at at the Net Asset Value per Unit less $35 per Unit.

The Kiewit tender offer filing on November 1 is the fourth combined Tender Offer Statement and Rule 13e-3 Transaction Statement to be filed in the past year.  A $560 million cash tender offer by an affiliate of Apollo Global Management to purchase all outstanding common shares of CKx, Inc. was filed May 17.  In connection with the related merger agreement, an Apollo affiliate obtained support agreements from two significant stockholders of CKx, The Promenade Trust, the sole beneficiary of which is Lisa Marie Presley and which is CKx’s partner in Elvis Presley Enterprises, and Robert F.X. Sillerman, CKx’s largest stockholder.

The Kiewit and CKx transactions are deemed to be third-party tender offers subject to Rule 14d-1.  Combination Schedules TO and 13E-3 filed by NovaStar Financial, Inc. on 12/10/10 and by IDT Corp. on 12/3/10 are deemed to be issuer tender offers subject to Rule 13e-4.  The NovaStar filing relates to a plan to recapitalize its publicly-held 8.9% Ser. C cumulative redeemable preferred stock and its privately-held 9% Ser. D1 mandatory convertible preferred stock.  The exchange offer and consent solicitation for holders of the NovaStar Ser. C preferred was concurrently filed on Form S-4 (SEC file no. 333-171115).

IDT initiated an offer to exchange shares of its outstanding common stock for shares of Cl. B common stock on a one-for-one basis.  The company stated that the exchange offer was being made to address the limited liquidity in the market for the common stock and the resulting disparity in the trading prices between the two classes -- despite the fact that the equity rights associated with the shares of each class are nearly identical.  Following the completion of the exchange offer, the common stock was delisted from the New York Stock Exchange.  The Cl. B common stock remains listed on the NYSE under the “IDT” ticker symbol.

Risk Reporting on Form PF Required by Certain Private Fund Advisers in 2012

By Final Rule under the Investment Advisers Act of 1940 dated October 31, 2011, the SEC will require advisers to hedge funds and other private funds to report systemic risk data for use by the Financial Stability Oversight Council (“FSOC”) in monitoring risks to the U.S. financial system.  The rule, which implements Sections 404 and 406 of the Dodd-Frank Act, requires SEC-registered investment advisers with at least $150 million in private fund assets under management to periodically file a new reporting form electronically on a confidential basis (Form PF).

For hedge funds, private equity funds and liquidity funds, the information required on Form PF is tiered so that more detailed information is required from larger private fund advisers.  The rule requires heightened reporting from advisers managing at least $1.5 billion in hedge fund assets.  Although this threshold applies only to about 230 U.S.-based hedge fund advisers, those advisers manage more than 80% of the industry’s assets under management.

There will be a two-stage phase-in period for compliance with Form PF filing requirements.  Most private fund advisers will be required to begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after Dec. 15, 2012.  Those with $5 billion or more in private fund assets must begin filing Form PF following the end of their first fiscal year or fiscal quarter, as applicable, to end on or after June 15, 2012. 

Form PF is a joint effort of the SEC and the Commodity Futures Trading Commission.  Staff consulted with the U.K.’s Financial Services Authority and other members of the International Organization of Securities Commissions.  The resulting Form PF is similar in many respects to the European Securities and Markets Authority’s proposed private fund reporting template and surveys of large hedge fund advisers conducted by foreign financial regulators.