The Securities and Exchange Commission has allowed a fund to establish a trust solely for the purpose of liquidating the investment interests of its partners and retain its exemption from the Investment Company Act. SCP Private Equity Partners, a private equity fund, is scheduled to be liquidated in June 2010. SCP plans to sell its remaining assets and distribute the proceeds to the fund's partners. Those assets include interests in 3(c)(7) funds, which are excepted from the definition of investment company in the Investment Company Act and may be owned only by qualified purchasers.

Qualified purchasers refer to individuals with no less than $5 million in investments or institutional purchasers with no less than $25 million. SCP intends to create the trust to hold the 3(c)(7) interests until the issuer of the interests dissolves or the interests can be sold, according to its letter seeking the no-action. But SCP stated it could have difficulty transferring the 3(c)(7) interests to the trust because not all of its partners are qualified purchasers.

In its response to SCP dated June 6, the Division of Investment Management concurred with the SCP's view that the trust will meet the definition of a qualified purchaser so long as the trust is not deemed to have been created for the purpose of acquiring interests in a 3(c)(7) fund. Calls to Lawrence Rovin, partner at Klehr, Harrison, Harvey, Branzburg & Ellers in Philadelphia who represented SCP, were not returned. Eric Purple, SEC senior counsel, declined comment.