July 28, 2005
Mail Stop 4561
John M. Kelly
President and Director
Man Investments (USA) Corp.
123 North Wacker Drive, 28th Floor
Chicago, IL 60606
Re: Man-AHL 130, LLC
Registration Statement on Form S-1
Filed on June 28, 2005
File No. 333-126172
Dear Mr. Kelly:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. It is not clear why you refer to Man-AHL as the "Fund" since
you
assert in your disclosure on page ii that the pool is not a mutual
fund registered under the Investment Company Act of 1940, and
given
that the term "Fund" is not part of the pool`s name. Please
revise
to refer to the pool by its name or a variation of its name.
2. In light of your intention to invest 30 percent of the proceeds
of
this offering in Man-Glenwood Lexington, a closed-end mutual fund
registered under the Investment Company Act of 1940, please
provide
us with a detailed legal analysis of why you do not believe you
should register as an investment company under the Investment
Company
Act of 1940. In connection with this, please provide us
with additional details of the types of investments made by Man-
Glenwood Lexington and whether these investments include
securities
as defined by the `33 Act.
3. In light of the fact that up to 30 percent of your investments
will be in Man-Glenwood Lexington, it is not clear why you have
not
provided disclosure in Part One of the disclosure document
regarding
the investment objectives and performance history of Man-Glenwood
Lexington and Man-Glenwood Lexington TEI. Please revise to
include
substantially greater disclosure regarding the types of
investments
made by these entities in all relevant portions of the prospectus,
including the summary, as well as capsule performance disclosure.
We
note your limited disclosure on page 13 but do not believe that
this
provides sufficient information to investors regarding the nature
of
Man-Glenwood`s investment strategy.
4. Please revise throughout the prospectus to provide disclosure
substantially similar to the disclosures that would be required by
Industry Guide 5 if real estate limited partnership units were
being
registered. For example, your revisions should include a narrative
discussion under an appropriate major heading of the managing
member
and its affiliates` experience over the past ten years similar to
that required by Item 8.A of Guide 5, which includes a description
of
any major adverse business developments and conditions that were
experienced.
5. Please provide us with a complete copy of any sales material
which
includes all illustrations and other inserts in the form you
expect
to distribute to investors in accordance with Release No. 33-6900
and
by analogy to Item 19D of Guide 5. We may have further comment
after
we receive your materials.
6. Please supplementally confirm to us, if true, that all units
redeemed or otherwise re-acquired by the trust will not be re-
issued
to other investors. If you do intend to re-issue redeemed or re-
acquired units, please tell us supplementally how you intend to
register those re-issuances under the Securities Act.
7. Please confirm to us that, following effectiveness of the
registration statement and the breaking of escrow, you will file a
prospectus supplement each month reflecting the net asset value at
which you sell your units.
8. Please advise us supplementally whether the managing member or
its
affiliates can purchase units in the offering so as to reach the
minimum subscription. If so, please also disclose this fact in all
relevant sections of the prospectus, including the cover page and
the
summary.
9. We note that you propose to offer units in classes A1, A2, B1
and
B2 and that you have allocated the 100,000 units to be offered
within
these classes on the cover page of your registration statement,
but
that you have not made such allocation on the prospectus cover
page.
Please revise the prospectus cover page to allocate the number of
units being registered for each of classes A1, A2, B1 and B2.
Please
be aware that all shares being registered must be allocated to a
class.
10. Please describe, in the body of your prospectus, the material
terms of each of your material agreements. We note, in this
regard,
reference on page iii to a Commodity Brokerage Agreement, a
General
Distributor`s Agreement and an Administration Agreement.
11. We note your statement throughout the prospectus that the Man-
Glenwood investment is ancillary to your commodities trading
programs
and should not be relied upon as a reason to invest in you. Given
that the Man-Glenwood investment will represent up to 30% of the
proceeds of the offering, it appears that this disclaimer is
inappropriate. Please revise to remove this language throughout
the
prospectus.
12. Please include the information required by Item 403 of
Regulation
S-K related to security ownership.
13. Continue to monitor the updating requirements of Rule 3-12 of
Regulation S-X. In addition, given the fact that the Managing
Member will provide financial assistance to MAN-AHL 130, LLC,
consider updating the financial statements of the Managing Member
on
the same basis.
14. Please provide a detailed analysis regarding the applicability
of
the tender offer rules to your share redemption program.
Specifically, in your analysis please address the fact that
investors
must make an irrevocable redemption requests 45 days prior to the
redemption date. Refer to Rule 13e-4 and Regulation 14E of the
Exchange Act.
Prospectus Cover Page
15. Please revise the cover page to remove information that
exceeds
the amount of information called for by Item 501 of Regulation S-
K,
Guide 5 or the Part 4 Rules promulgated by the CFTC. We note in
this
regard, by way of example only, your disclosure under the heading
"The Fund."
16. Please disclose, in the header, the minimum and maximum number
of
units being offered of each class.
17. Since this is not a firm commitment underwritten offering, it
is
not appropriate to highlight the Selling Agent at the bottom of
the
cover page. Please revise.
18. We note that you state that the managing member will return
investor`s funds promptly if the minimum is not sold by the end of
the initial offering period. Please revise, here and in the
summary,
to specify what you mean by "promptly."
19. Please revise the first cover page risk factor to include the
historical leverage employed by AHL Diversified as disclosed on
page
8. In addition, please tell us whether the Man-Glenwood entities
employ leverage and, if so, whether the leverage tends to be
greater
or less than the amount employed by AHL Diversified.
20. Please revise the cover page risk factors to include the risk
resulting from conflicts of interest, including a brief
description
of the nature of the conflicts and the identity of the parties to
the
conflicts.
21. Please include a cover page risk factor describing the income
tax
risks to investors associated with this offering.
22. Please revise the first risk factor in the middle column of
cover
page risk factors to briefly quantify the fees that you will be
required to pay, and to clarify that the fees described must be
paid
regardless of profitability. Please also disclose, if true, that
the
managing member has the authority to substantially increase the
amount of those fees without the approval of other members.
23. It is not clear that the first 2 bullet points in the far
right
column of your cover page risk factors actually describe risks
related to your company or this offering. Please revise these
bullet
points to more clearly identify the risk or remove this disclosure
from the cover page risk factors.
Organizational Chart, page iii
24. Please include in the organizational chart the percentage of
proceeds of this offering that will be deposited with each of Man-
Glenwood and the Trading Advisor. In addition, please revise to
include the exact percentage ownership of each entity by Man Group
plc.
Summary
25. In your summary and throughout your prospectus you use
terminology that represents industry jargon which may not be
readily
understood by an investor not in your industry. Examples include
descriptions of the AHL Diversified Program as "quantitative,"
"directional," and "technical." Please revise your disclosure to
define industry terms the first time you use them and limit your
use
of industry jargon to the extent possible.
26. Please disclose your website, if any. Refer to Item 101(e)(3)
of
Regulation S-K.
The Fund, page 2
27. Please disclose the portion of the pool`s capital that is
expected to be maintained in cash and cash equivalents.
28. Please clarify what type of diversification is expected to be
realized through an investment in the Man-Glenwood entities.
Major Risks of The Fund, pages 3 - 4
29. Please make changes in your summary risk factors similar to
those
requested in the cover page risk factors.
30. Please revise the second paragraph in the first column on page
4
to emphasize that the net asset value of the fund may decrease
between the time that an investor is required to make an
irrevocable
redemption decision and the actual date of redemption.
Investment Objectives, Strategy and Policies, page 4
31. The text under this heading, which appears to describe only
possible advantages of an investment in Man-AHL 130, does not
match
the heading of this section. Please revise your heading to more
clearly describe the text that follows, or revise the text
accordingly.
32. We refer to the first bullet point under this heading. Please
remove the reference to the AHL Diversified Program`s "historical"
profits, since it does not convey information about the time
periods
over which an investment would need to be held in order to realize
profits, nor does it reflect the volatility of such an investment,
including substantial losses over certain periods.
33. We note your statement in the second bullet point under this
heading that the AHL Diversified Program has "historically had low
correlation to the returns of traditional stock and bond
portfolios."
Please define more clearly "low correlation." In addition, please
reconcile your disclosure here with disclosure on page 10 that
"the
success of the Fund may be substantially dependent on general
market
conditions."
34. Please provide enough detail in the final 2 bullet points
under
this heading to more clearly describe the benefits disclosed. In
particular, provide facts which tend to indicate why these aspects
of
Man-AHL are different from other investments in managed futures
funds.
Redemptions
35. Please tell us why it is expected to take up to 45 days for
the
pool to "usually" pay out redemptions and what circumstances could
cause the pool to take longer than 45 days to make such payments.
In
light of the limit on redemption requests and the generally liquid
nature of the investments made by AHL Diversified, it is not clear
why there is such a lag time.
Organizational and Offering and Administrative Expenses, page 5
36. We note that organizational and offering and administration
fees
will be paid by the Managing Member "or an affiliate." Please
tell
us why you are unable to identify the specific entity that will
make
these payments and whether a specific entity will be named in
executed agreements covering these charges. In addition, please
tell
us whether the Managing Member will guarantee these payments or
otherwise be liable for the payments if they are assigned to an
affiliate that is unable to make such payments.
37. Please clarify whether the reimbursement of administrative
expenses by the managing member of anything over 0.05% of your
average monthly NAV requires average assets of $50,000,000.
Management and Incentive Fees, pages 5 - 6
38. Please explain why you have provided a range of asset-based
fees
(0% to 2%) for the Man-Glenwood investment as well as a range of
incentive fees (10% to 25%) rather than exact percentages. If you
have not yet negotiated these fees, please disclose this fact and
indicate whether the fees could be greater than the ranges listed.
In addition, please clarify what the asset-based fee covers. If
it
is akin to a management fee, please disclose this.
Transaction Costs, page 6
39. In light of the fact that the cap on the futures commission
rates
is 3% of the fund`s NAV for any 12-month period, please advise us
as
to why you believe that 1.5% is a reasonable estimate of the
commission rate. For example, is this figure based on historical
trading levels? Please also provide this information with respect
to
your estimate of the Man-Glenwood Subfunds` annual transaction
cost
of 1%.
Breakeven Table, page 6
40. We note that you have not included any performance fees to be
paid to the trading advisor. Please advise us as to whether the
performance fees are only accrued after the payment of other fees,
such as brokerage and management fees. If not, it is not clear
why
performance fees should not be included in the break-even table.
Please revise or advise.
Risk Factors, pages 8 - 10
41. Many of your risk factors are generic and your disclosure does
not provide sufficient detail about your business or the risk
involved to sufficiently inform the investor as to the aspect of
the
investment that is particularly risky. Examples include, but are
not
limited to, your brief disclosure under the following headings:
* "You May Lose Your Entire Investment," on page 8. Merely
stating
that the Fund is speculative is not sufficient to inform an
investor
about the aspect of the investment that is risky. For example,
what
about the Fund is speculative?
* "The Fund is Intended to be a Medium- to Long-Term Investment"
on
page 10. Why does this fact alone present a risk to investors
unique
to your company or the investment?
Please review each of your risk factors and expand your disclosure
to
clearly describe, in the heading and the text, the specific risk
indicated.
42. We note that the trading program may include trading in over-
the-
counter foreign currency contracts and forward contracts. Please
revise to disclose the approximate amount of your investing that
you
intend to allocate to foreign currency and forward contracts and
to
discuss the following risks:
* The risk that changes in the value of the foreign currency
relative
to the U.S. dollar may cause losses,
* The risk that over-the-counter transactions are subject to the
risk
of counterparty default, and
* The risk of counterparty default with respect to your intended
trading in forward contracts.
43. Please include a risk factor discussing the impact that
regulatory speculative position limits and daily exchange limits
may
have on your business.
44. Please include risk factor disclosure regarding your reliance
on
one commodity trading advisor using a single trading strategy,
namely, the AHL Diversified Program.
45. Please discuss the risk that performance fees create an
incentive
for the trading advisor to make riskier investments than it might
have without the existence of the incentive fee.
General Risks of an Investment in the Fund, pages 8 - 9
The Fund`s Performance is Expected to be Volatile, 8
46. Please discuss what makes the investment volatile, including
the
use of leverage and the general nature of the futures markets.
The Fund`s Substantial Fees and Expenses Will Cause Losses Unless
Offset by Profits and Interest Income, page 8
47. Please expand your disclosure under this risk factor heading
to
quantify the amount of fees described. In addition, clarify that
these fees are payable regardless of profitability and indicate
that,
even once profits are earned, they will still be subject to
substantial incentive fees. Finally, please expand your
discussion
of the "layered" expenses and the effect this has on transparency.
An Investment in the Fund is not a Liquid Investment, page 8
48. Please clarify in the final paragraph under this risk factor
heading that a redeeming unit holder will be paid a redemption
price
based upon the NAV as of the redemption date, not as of the date
of
redemption notice.
Substantial Redemptions May Cause the Fund to Incur Losses, page 8
49. Please describe how and why substantial redemptions could
disrupt
the Fund`s portfolio and result in losses.
The Fund is Subject to Conflicts of Interest, pages 8 - 9
50. Please revise this risk factor to remove the cross reference
in
the final sentence and identify and briefly discuss the conflicts
of
interest and the risks to investors as a result of the identified
conflicts. We note, for example, that the fees to be paid to the
affiliated entities were not negotiated at arms-length and may be
greater than if they were to be paid to an unaffiliated third
party.
The Fund`s Investment in Man-Glenwood May Incur Losses, page 9
51. Please quantify the magnitude of the losses that may be
experienced by an investor if the investment in Man-Glenwood
incurs
losses. In addition, since any investment could incur losses,
please
revise your disclosure to specify why the investment in Man-
Glenwood
is especially susceptible to this risk.
Changes in Regulatory Requirements May be Adverse to the Fund,
page 9
52. Please describe any adverse affects recent legislative changes
have had on futures funds. Your current disclosure is very vague
and
does not provide meaningful information to investors. Please
revise.
The AHL Incentive Fee Calculation May not Reflect Your Investment
Experience, page 9
53. Please also disclose that quarterly incentive fees may be paid
to
AHL even if the pool loses money during the course of a year.
You will be Taxed Each Year on Your Share of the Fund Profits; You
will be Required to Extend the Filing Date of Your Tax Returns,
page
9
54. Please clarify, in the final sentence of the first paragraph
under this heading, that unit holders will be required to make tax
payments from their own individual source of funds, in light of
the
fact that there will be no distributions paid.
Risks Specific to AHL Diversified Program, pages 9 - 10
Increased Competition Among Trend-Following Traders Could Reduce
AHL`s Profitability, page 10
55. Please explain more clearly how traders may alter historical
trading patterns to the detriment of AHL. For example, if true,
please disclose the fact that the existence of a large number of
pools that employ trend-following strategies may cause the
appearance
of a price trend that would not otherwise exist or artificially
exacerbate an existing price trend.
Limits of Risk Disclosures, page 10
56. We note your disclosure under this heading that the risk
factor
disclosure does not purport to be a complete explanation of the
risks
involved in an investment in the Fund. Please remove this
statement
as your risk factor section should include all known material
risks
related to an investment in the pool.
General, pages 10-11
57. Please reconcile your disclosure in the first sentence under
this
heading that the entire proceeds of the offering will be used to
invest in the AHL Diversified Program with your disclosure
elsewhere
that up to 30% will be invested with Man-Glenwood.
The AHL Diversified Program, pages 11 - 13
58. Please provide additional information regarding the types of
markets in which AHL trades, the portion of its investments that
historically are made on exchanges and the portion of investments
that are historically made in the U.S. and abroad. We note, for
example, your statement on page 12 that the number and diversity
of
markets has expanded over time. Please expand your disclosure to
provide a context for this statement, including the number and
diversity of markets where AHL may trade. In addition, please
provide more information regarding the role of "spread trading"
and
"arbitrage strategies," the portion of AHL`s overall trading
strategy
devoted to them and how they "complement" the trend-following
algorithms.
59. Please revise your disclosure under this heading significantly
to
bring it within the guidelines of Plain English. We note numerous
instances in which your disclosure requires clarification so that
it
can be understood by an average investor. Examples include:
* "Investment rules are executed within a systematic framework" in
the last carry-over paragraph of the first column on page 11.
* "Market exposure is dynamically adjusted real time to reflect
changes in the volatility of individual markets" in the last
carry-
over paragraph of the first column on page 11.
* "The number of systems applied to a particular market varies
according to the depth of liquidity in that market" in the first
full
paragraph on page 12.
* "Market liquidity is examined with the objective of ensuring
that
opening and closing positions are executed with minimal slippage"
in
the second paragraph in the first column on page 12.
60. Please disclose the range of margin historically employed by
AHL
and whether there any limits on the amount of leverage that may be
used.
61. We note your statement in the first full paragraph in the
second
column on page 11 that the Fund may also use lines of credit
provided
by Man Financial; however it does not appear that you have
included
this potential source of capital in your conflicts or your risk
factor discussions. Please revise or advise.
62. Please define more clearly what is meant by "anomalies,"
"serial
correlation" and "momentum and breakout trading approaches" in the
final carry-over paragraph on page 11.
63. We refer to your pie chart in which you disclose that an
unspecified portion of AHL Diversified Program`s portfolio is
composed of "stocks" and "bonds." Please clarify whether this
indicates that AHL Diversified invests in individual equity and
bond
securities or whether this indicates that it invests in stock and
bond indices. Similarly, please expand your disclosure regarding
AHL
Diversified`s arbitrage strategy to indicate whether this strategy
involves the purchase and sale of equity and debt securities. We
may
have further comments.
64. Refer to the pie chart on page 12. Please include disclosure
to
indicate whether the markets and percentages identified are
generally
indicative of the AHL portfolio or if the markets and percentages
could change materially over the life of the investment.
65. We note your characterization of the investment in the Man-
Glenwood entities as "yield enhancement." Aside from the ability
to
potentially profit from this investment, please explain this
characterization. To the extent it is characterized as a
potential
to achieve profits, please balance your disclosure with a
statement
indicating that the investment could decrease any profits earned
from
an investment in AHL.
66. Please provide a brief description of each of the investment
strategies described in the bullet points on page 13. This
information appears to be material and should be included in Part
One
of the prospectus.
Management`s Discussion and Analysis of the Fund`s Prospective
Operations, pages 13 - 15
Liquidity, page 14
67. Please disclose you anticipated sources of liquidity,
including
the anticipated terms of any credit lines you may enter into with
an
affiliate as disclosed elsewhere in the prospectus.
Management of the Fund, pages 15 - 18
AHL, page 17
68. Please include the ages of the principals of AHL. In
addition,
please ensure that the description of each of these individuals
clearly includes a description of the experience of each
individual
for the previous five years.
Man-Glenwood, page 17
69. Please tell us why you have not identified the principals of
Glenwood and provided biographical information for the principals.
Net Asset Value, page 20
70. We note your disclosure in the final paragraph on page 20 that
"[t]he managing member has no means of determining the accuracy
of"
the valuation of AHL`s Man-Glenwood investment. Please tell us
why
this is true in light of the fact that Man-Glenwood is an
affiliate
of the managing member. In addition, please disclose the effect
on
unitholders who receive redemption payments based, in part, on
estimates of the value of the assets held by the Glenwood sub-
funds.
Fees and Expenses Paid by the Fund, pages 21 - 24
71. Refer to the disclosure on page 21 in the "Amount of Payment"
column related to the Client Servicing Fee. Please explain why,
upon
redesignation, the Class A1 and Class B1 Units will be
redesignated
as "fractional" Class A2 or B2 Units, in light of your earlier
disclosure that units in each class represent the same amount of
value in AHL.
Conflicts of Interest; Transactions Between Man Group and the
Fund,
pages 26 - 28
72. Please describe under this heading the conflicts that might
arise
in the event that the fund uses lines of credit from Man Financial
to
provide an additional source of capital.
The Clearing Broker, page 27
73. We note your disclosure in the first paragraph of the second
column on page 27 that Man Financial has financial incentives to
favor certain accounts over the pool. Please expand your
disclosure
to indicate what reasons Man Financial might have for favoring
other
accounts, what actions it would take when favoring other accounts
and
why this could lead to losses.
74. Please provide additional disclosure that puts into context
the
higher fees that the pool will be required to pay vis-a-vis the
other
clients of Man Financial alluded to under this heading. For
example,
we note your statement that "the cumulative effect of the higher
rates paid by the Fund is material." Please revise to expand your
disclosure of this point.
75. Please expand your disclosure in the third paragraph of the
second column on page 27 to more clearly describe why the facts
stated create a conflict of interest.
76. We refer to your statement on page 27 that, "Prospective
investors, by investing in the Fund, consent to the Fund investing
solely in Man-Glenwood for yield enhancement." It`s not clear
what
the purposes of this statement is and whether it binds investors
or
the Managing Member in any way. Please advise.
Selling Agents, page 28
77. Please explain why the conflict described under this heading
creates a risk to current investors. As part of this, please
disclose that the selling agents are affiliates of the Managing
Member and the pool and that the rates received by the selling
agents
were not negotiated.
Summary of the Limited Liability Agreement, pages 28 - 29
Net Asset Value, page 29
78. Please disclose when Man-Glenwood`s "fiscal periods" end.
Plan of Distribution, pages 34 - 35
79. Please include in your discussion under this heading the fact
that this is a best efforts, minimum/maximum offering, and briefly
describe the sales agent`s obligations in this regard. See Item
508(a) of Regulation S-K. In addition, please provide additional
information regarding the purchase of the different classes of
units
being offered. For example, please provide sufficient detail
regarding who is eligible to purchase B1 and B2 units as opposed
to
Class A1 and A2 units as well as sufficient detail regarding what
constitutes a "selling agent fixed fee or asset-based fee
investment
program" for purposes of Class A2 and B2 units.
80. Please clarify that sales of units will only be made at Net
Asset
Value following the breaking of escrow after the required minimum
amount has been sold.
81. Please disclose when NAV will be calculated for sales of units
following the breaking of escrow. For example, will the sales
price
of the units be based on the NAV of the last business day of each
month or the first business day of each month?
Part Two, Statement of Additional Information
82. Please define industry jargon in order to make your disclosure
more easily understandable to an investor. For example, what is
meant by "tight bands of net exposure" and "beta exposure" in the
first paragraph on page 41? In addition, please explain what you
mean in the second paragraph in the second column on page 41 by
"[c]omodity and trading is a style that aims to generate alpha . .
..
"
Futures Markets and Trading Methods, pages 38 - 40
Risk Control Techniques, page 40
83. Please include a discussion of whether the fund uses these
risk
control techniques.
AHL Diversified Program Charts, pages 43 - 50
84. We may have additional comments once the charts are completed
with actual numeric data.
85. Please advise us as to why you have chosen to compare the
returns
of AHL Diversified Program with the Citigroup High Grade Corporate
Bond Index, rather than any other bond index.
86. Refer to the footnotes on page 43. Please explain more
clearly
what would cause a negative Sharpe ratio and why this "can be
misleading" and is therefore indicated as N/A.
87. Please include the footnotes you reference in the chart on
page
44.
88. Please include a caution with your chart on page 44 that
indicates that you have chosen to present a few snapshots in time
and
may not be reflective of an individual account`s performance in
AHL
Diversified or either of the indices included.
89. Please indicate the period of time you are measuring with the
pie
charts on page 45.
90. Refer to the chart on page 46. Please supplementally advise
us
what conclusions you anticipate that investors will draw from
these
charts about the performance of AHL Diversified Program verses
stocks
and bonds and how these conclusions may or may not be consistent
with
your disclosure throughout that the pool is structured to be non-
correlative to stock and bond indices.
91. Please indicate, in your narrative on page 46, how you
determined
which quarters were "up" quarters and which quarters were "down"
quarters and the baseline from which you measured such
performance,
including an explanation of the percentages on the left margin of
your charts.
92. We refer to your charts on pages 46 and 47. Please disclose
why
you have chosen December 20, 1990 as the starting point for these
comparisons in light of the fact that AHL has been operating since
1983.
93. Please provide additional details regarding the charts on page
47
to explain what they represent. It appears that the charts each
cover essentially the same periods of time; however one refers to
a
12-month analysis and one refers to a 3-year analysis.
94. Please disclose what conclusions you expect potential
investors
to arrive at based on the graphs on page 47. Specifically, it
appears that short-term returns (12 months) have been
significantly
higher than medium-term returns (3 years). In light of your
disclosure throughout the prospectus that an investment in the
pool
is designed only for medium-term to long-term investments, it is
not
clear how this chart supports that recommendation. Please revise
or
advise.
Financial Statements and Notes
95. Please move the financial statements to Part One of the
disclosure document.
MAN-AHL 130, LLC, May 20, 2005
96. In lieu of a balance sheet as required by Rule 3-01 of
Regulation
S-X, we note that you have included a Statement of Assets and
Liabilities, similar to presentations used by registered
investment
companies. If you do not intend to be a registered investment
company, please provide your basis for your presentation or revise
accordingly.
Note 1 - Organization, page F-4
97. Please clarify how you intend to account for your investment
in
the Lexington Funds and your basis in GAAP for your treatment.
98. Reference is made to the last paragraph where you discuss
redemptions. Please clarify the limitations surrounding
investors`
ability to redeem units.
Note 2 - Significant Accounting Policy
99. We note the Company disclosed accounting principles related to
future and forward contracts and the determination of fair value
in
Management`s Discussion and Analysis of the Fund`s Prospective
Operations. Tell us what consideration was given to including
your
policy in the notes to the financial statements in accordance to
APB
22, along with a discussion of how these transactions are recorded
in
your financial statements.
100. Please tell us what consideration was given to disclosing the
material terms of your LLC agreement as well as the duties and
rights
held by the Managing Member.
101. We note the Managing Member, or an affiliate, will assume
organizational and offering costs. Tell us what consideration
was
given to expanding your disclosure to clarify any requirements to
reimburse these costs and how that impacts your accounting
treatment
in your financial statements under SAB Topic 1.B. Further, please
clarify the terms and conditions of any agreement between you, the
Managing Member and an affiliate to clearly show which party has
the
obligation to settle these costs.
MAN Investments (USA) Corp., March 31, 2005
Note 2 - Summary of Significant Accounting Policies
Related Party Transactions, page F-8
102. Tell us how MAN Investments (USA) Corp has accounted for
their
investment in MAN-AHL 130, LLC. Include the basis in GAAP for
your
accounting treatment and consider expanding your disclosures
accordingly.
Subscription Agreement
103. Refer to the first and fourth paragraphs on page SA-1.
Please
supplementally advise us when you intend to require interested
investors to provide a signed copy of the Subscription Agreement.
In
providing your response, please keep in mind that you may solicit
preliminary indications of interest to purchase shares in the
offering only when you have delivered to potential investors a
preliminary prospectus meeting all of the requirements of Section
10
of the Securities Act. You may not, however, solicit or accept
any
binding offers to purchase securities or accept any payment for
securities until after your registration statement has finally
been
declared effective. We note that your current form of
subscription
agreement appears to contemplate a binding subscription upon
signature and a requirement to deposit the purchase price prior to
the actual purchase of the securities. Accordingly, you may not
send
your subscription agreement in its current form to potential
investors until your registration statement has been declared
effective. Please revise or advise.
Part II, Information Not Required in Prospectus
Item 15. Recent Sales of Unregistered Securities, page II-1
104. Please include the issuance of the Managing Member`s interest
under this heading or tell us why you believe it should not be
included.
Legal Opinion
105. Refer to assumption number (v) in paragraph 3 on page 2.
Whether the company`s books and records set forth the information
required by the LLC agreement and Delaware law is a fundamental
part
of counsel`s opinion and it is not appropriate for counsel to
assume
this fact. Please remove this assumption or tell us why you
believe
that it is appropriate.
106. We note counsel`s opinion in the final sentence of the second
page 2 that unit-holders will have no liability "in excess of
their
obligations to make contributions to the company." Please confirm
your understanding, as indicated in the prospectus, that
unitholders
will have no liability other than their initial investment.
Tax Opinion
107. We have reviewed the opinion of counsel set forth as Exhibit
8.01 to the registration statement. Counsel provides a statement
confirming its opinions in the taxation section of your
registration
statement. It is not clear, however, from the taxation section
what
constitutes the opinion of counsel. The first sentence under the
heading "Tax Consequences" on page 29 states that the following
discussion "is materially correct." Because counsel`s opinion
that
the fund will be treated as a partnership follows this statement,
it
is unclear that it represents an unqualified opinion. In order to
use a short-form tax opinion, the opinion of counsel must be
clearly
set forth in the taxation section. Currently, that section does
not
clearly delineate the opinion of counsel. Please revise to
provide a
long-form tax opinion or revise the section on taxation to clearly
set forth counsel`s opinion.
108. Delete the first 2 sentences of the final paragraph of
Exhibit
8.01. Prospective purchasers and unit holders are entitled to
rely
on the opinion.
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filing includes the information required under the Securities Act
of
1933 and that they have provided all information investors require
for an informed decision. Since the company and its management
are
in possession of all facts relating to a company`s disclosure,
they
are responsible for the accuracy and adequacy of the disclosures
they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Wilson Lee at 202-551-3468 or Cicely Lucky,
Accounting Branch Chief at 202-551-3413 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Amanda McManus, Attorney-Advisor at 202-551-3412 or
the undersigned at 202-551-3694 with any other questions.
Sincerely,
Owen Pinkerton
Senior Counsel
cc: David R. Sawyier, Esq. (via facsimile)
James B. Biery, Esq. (via facsimile)
Sidley Austin Brown & Wood LLP
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Man-AHL 130, LLC
July 28, 2005
2
Man-AHL 130, LLC
July 28, 2005
17