Mail Stop 4561
January 13, 2006
John P. Amboian
Principal Executive Officer
Nuveen Commodities Income and Growth Fund
333 West Wacker Drive
Chicago, Illinois 60606
Re: Nuveen Commodities Income and Growth Fund
Registration Statement on Form S-1
Filed on December 15, 2005
File No. 333-130360
Dear Mr. Amboian:
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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form S-1
General
1. We note that you have omitted a great deal of information that
is
either currently available to the pool or that materially affects
the
ability of the pool to conduct the proposed offering. For
example,
we note that you have included no disclosure regarding the
specific
fees the pool will pay, break-even disclosure or capsule
performance
data for Gresham. Please provide this information in your next
amendment. Further, include the financial statements required by
Form S-1.
2. Please tell us supplementally why you believe your proposed
operations will not subject you to regulation as an investment
company under the Investment Company Act of 1940.
3. 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 Manager`s and
subadvisor`s experience over the past ten years similar to that
required by Item 8.A of Guide 5, which includes, among other
things,
a description of any major adverse business developments and
conditions that were experienced by prior programs. In addition,
please revise the cover page to briefly discuss the most material
risks to shareholders of an investment in your securities.
4. Please confirm that your shares have been approved to trade on
a
stock exchange. If not, revise your disclosure to indicate, if
true, that you have applied to have your shares quoted or listed
for
trading rather than "will be" listed for trading. Further, revise
to
identify the exchange in which you intend to trade your shares.
5. Please disclose why you decided to employ the master-feeder
structure for the pool rather than structure it as a traditional
commodity pool that does not employ a master fund and discuss the
benefits or detriments of this structure to investors.
6. Please revise to indicate the factors considered in determining
the offering price. Refer to Item 505 of Regulation S-K.
7. 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.
8. Your prospectus contains many defined terms, legalese and
dense,
embedded lists that make it more difficult to read. Reduce your
over-reliance on defined terms, legalese and embedded lists of
dense
information. As you revise your document, consider minor changes
that would make the material information clear, concise, and more
understandable. For example, a shortened version of a full name
is
often clear from context, as are commonly known acronyms. In
addition, please refrain from capitalizing terms that are clear
from
their plain meaning, including, without limitation, "Shares."
Prospectus Cover Page
9. Please restrict the disclosure found on the cover page to that
which is required by Item 501 of Regulation S-K, Release No. 33-
6900
and information that is key to an investment decision.
10. Please ensure that your cover page does not exceed one page.
See
501(b) of Regulation S-K.
11. Please disclose on the cover page that investors must purchase
a
minimum of 100 shares in this offering. In addition, please
identify
your subadvisors on the cover page and their affiliations, if
applicable, to the pool.
Special Note Regarding Forward-Looking Statements, page iii
12. Please remove your statement that "neither the Manager nor any
other person assumes responsibility for the accuracy or
completeness
of the forward-looking statements." In addition, please relocate
this section as well as the section entitled, "Patent Application
Pending" so that they appear in the body of the prospectus.
Prospectus Summary
13. Please limit your summary to a concise description of the
material characteristics of the pool and the material terms of
your
offering.
The Fund, page 1
14. Please disclose the dates the pool and the Master Fund were
organized. It is not clear why this information is not available.
Investment Objectives, page 2
15. Please revise to separately quantify the portion of your
proceeds
that will be used to purchase (1) commodities pursuant to
Gresham`s
Tangible Asset Program; (2) options pursuant to your "Option
Strategy"; and (3) debt instruments.
Break-even Threshold, page 9
16. We note your statement that the Break-even point is based on
the
"Master Fund`s initial minimum size." Please advise us as to the
meaning of this statement. The offering itself is a firm
commitment
underwritten offering, not a minimum/maximum continuous offering.
Please advise. This comment also applies to your disclosure on
page
10 of the "Maximum Amount Offered" in this offering.
Break-even Analysis, page 10
17. Please clarify why you have included two separate columns for
your break-even table in light of the fact that the offering is a
firm commitment underwritten offering. In addition, please revise
the table to include the selling commissions or underwriting
commissions that will be paid to the underwriters in connection
with
this offering or tell us why you do not believe this information
is
required.
18. By footnote, please disclose what fees are included under
"Offering and Organizational Expenses" and "Operating Expenses."
Risk Factors, page 12
19. Some of your risk factors fail to specifically state the risk
that may flow from the facts and circumstances you describe. For
example, but not limited to, under Fund performance may be
hindered
by increased competition for positions on page 15 you fail to
state
the risk that will result from increased competition. Also, see
Gresham historic performance record on page 15. Please review
and
revise your risk factors to include a discussion of how these
risks
affect Nuveen or the securities being offered.
20. Please review your risk factor subheadings to ensure they
reflect
the risk you describe in the text. Some of your subheadings
merely
state facts about your business. For example, The Master Fund
will
rely heavily on key personnel at Gresham to manage the master
Fund`s
commodity interest on page 18. Also, see, but not limited to:
* Shareholders have limited voting rights..., page 18;
* The Master Fund pays fees and expenses regardless of
profitability,
page 19; and
* You will not be able to review the Fund`s holdings on a daily
basis, page 19.
Please review and revise subheadings to succinctly state the risks
that will result from the facts or circumstances you discuss.
21. Please discuss only risks that are material to you. Your risk
factors section should not describe any possible risk to the
company,
no matter how remote. For example, under Regulatory changes could
restrict the master Fund`s Operation`s, page 20, you discuss the
risk
of a disruption on operations. Please describe, in a manner
specific
to the company and its planned operations, how you would be at
risk
different from other similar companies. Please review all of your
risk factors and if necessary, revise or delete them with this
comment in mind.
22. Please revise to include a risk that discusses the possibility
of
conflicts of interest. In this regard, we note your disclosure on
page 30.
Commodity Interests Risks, page 12
Investments in commodity interests are volatile and may result in
losses, page 12
23. Please discuss what makes the investment volatile, including
the
use of leverage and the general nature of the futures markets. As
part of this, please discuss the fact that trading in the
commodities
markets is a "zero-sum game" which is not the case with trading
equity securities.
Swap contracts and other contracts traded on a principal basis are
subject to counterparty credit risks, page 13
24. In order to give depth to your disclosure, please revise to
quantify the percentage of assets that you intend to invest in
swap
contracts and other instruments that are not cleared by an
exchange
or clearinghouse.
Risk that the Fund`s Shares will trade at a Discount to Net Asset
Value, page 14
There is a risk that the Fund`s Shares may trade at prices other
than
the Fund`s net asset value per unit, page 14
25. Please expand this risk factor to describe in more detail why
you
believe the trading prices of your shares will fluctuate in
accordance with NAV and the risk to investors if your NAV does not
correlate to the market price.
Commodity Subadvisor Risks, page 14
Speculative position and trading limits may reduce profitability,
page 15
26. Mitigating language is not appropriate in the discussion of a
risk factor. Please remove the third sentence under this
subheading.
Fund performance may be hindered by increased competition for
positions, page 15
27. Please expand this risk factor to note that increased
competition
also tends to lead to more severe price swings since more market
participants hold larger positions than in the past which makes it
difficult to liquidate such positions.
An investment in the Fund may not necessarily diversify an
investor`s
overall portfolio, page 16
28. Please clarify whether the investment performance of commodity
interests has generally been non-correlated or negatively
correlated
to equity and debt securities. Non-correlated and negative
correlation have significantly different meanings. Please provide
us
with support for your contention that commodity interests have
historically been negatively correlated to equity and debt
securities.
Risk of Investing in Non-U.S. Markets, page 16
Investing in non-U.S. markets would exposes the Master Fund to
additional credit and regulatory risk, page 16
29. In order to give depth to this risk, please quantify the
portion
of your assets that you intend to invest through foreign markets
and
exchanges.
Operating Risks, page 17
Shareholders` liability may not be limited in certain
circumstances..., page 18
30. Please delete the words "although unlikely" in the second
sentence under this heading as mitigating language is not
appropriate
in the risk factor section. Provide similar revisions to the
third
sentence in the second paragraph beginning with "although."
The Master Fund pays fees and expenses regardless of
profitability,
page 19
31. Please quantify the fees that the Master Fund must pay.
The Master Fund`s Investments, page 22
32. Please disclose any provisions in the Declaration of Trust and
LLC Agreement or otherwise that would limit the fund`s ability to
invest in products other than the ones you have identified, use
leverage, or borrowings in its investment strategy. Disclose
whether
there are any limits on the Manager`s ability to change the fund`s
investment strategy.
33. Please clarify whether investment policies disclosed on pages
22-
23 refer to the policies that Gresham, as your CTA, will follow in
connection with its TAP Program, or whether they refer to
additional
investments in commodity interests that the pool may make in
addition
to its investment in the TAP Program. Your disclosure appears to
indicate that these investments will be made directly by the
Master
Fund which would imply that they are separate from the investment
in
the TAP Program. If so, please indicate the portion of your
portfolio that will be comprised of these discretionary trades.
Management of the Fund and the Master Fund, page 23
34. We note that John P. Amboian is the President of the Manager
and
Director and Principal Executive Officer of the Trustee. Please
revise to indicate the amount of time Mr. Amboian will serve in
each
capacity. In addition, in light of the fact that he serves as an
executive of the Manager and Trustee, how the Trustee is
considered
to be unaffiliated with the Manager.
35. For each of the named executives listed in this section of the
prospectus, please include all information required by Item 401 of
Regulation S-K. For example, please revise to include:
* Business experience for Mr. Zimmerman during the last 5 years;
* Additional disclosure regarding what a "family office" is a
noted
in Mr. Spencer`s biographical information;
* Whether Mr. Hepworth remains an executive of Falconwood and, if
so,
his position with Falconwood;
* Mr. Stenwall`s position with NAM; and,
* The ages for all individuals listed in this section.
Gresham Investment Philosophy and Process, page 25
36. Please disclose the number of trading programs administered by
Gresham Investment. If none, state so.
37. Please revise to further describe Gresham`s TAP Program.
Specifically, include information regarding what the description
"rules-based" is meant to represent, whether the trading program
is
technical or fundamental in nature and whether the program
requires
the existence of price trends in order to be successful. In
addition, where you discuss the concept of "backwardation," please
discuss how your program is able to determine that backwardation
is
occurring and how frequently this occurs.
38. Please disclose the duration of your agreement with Gresham
and
any material terms in the agreement regarding the ability of
Gresham
or you to terminate the agreement. In addition, please disclose
what
criteria the Manager will use if it selects additional CTAs or
replaces Gresham.
39. In light of the fact that you anticipate that your securities
will be traded on a national securities exchange, please disclose
whether and to what extent there will be any transparency
regarding
your holdings at any given time. If there will be no real-time
transparency, please disclose this.
Option Strategy, page 26
40. We note your strategy is based on "normal market
circumstances."
Please revise to indicate what constitutes "normal market
circumstances" and examples of abnormal market circumstances and
how
you would respond to these circumstances.
Management Fees, page 27
41. Please disclose when the fees are calculated.
Gresham Performance Record, page 28
42. Please disclose whether and to what extent Nuveen Asset
Management has any experience similar to what it will be
conducting
as the "Collateral Subadvisor."
43. Please include the current NAV for the trading program as well
as
definitions of the terms "drawdown," "peak-to-valley drawdown,"
and
"notional assets."
Conflict of Interests, page 30
44. We note that there are no formal resolutions of conflicts
procedures. We also note that there are present and potential
future
conflicts of interests in the Fund`s structure and operation. As
such, please revise to indicate how you intend to resolve these
conflicts.
45. Please refrain from using terms such as "theoretically,"
"occasionally," and "from time to time" to discuss when and
whether
conflicts of interest may occur. We note that you have no
operating
history to use a basis for these determinations, and these terms
tend
to mitigate the risk posed by the conflicts presented.
Conflicts Relating to the Commodity Subadvisor, page 30
46. Please revise to briefly describe the legal restrictions on
the
combined size of specific commodity interests positions that may
be
taken for all accounts managed by the commodity subadvisor.
47. Please disclose information pertaining to the "allocation
methodology" referred to on page 15 that the Subadvisor must use
if
it is simultaneously effecting transactions of the same commodity
interest for two or more customers.
Conflicts Relating to the Manager and the Commodity Subadvisor,
page
30
48. Where you discuss the ability of principals and other
affiliates
of the pool to invest for their own accounts, please clarify
whether
you are referring to investments in the pool or investments in
futures contracts and other commodity interests that the Master
Fund
will make. If it`s the former, please advise us as to how you
intend
to ensure that insiders who have access to information regarding
specific trades made by the Master Fund which will not be
available
to the market will not trade on this information.
No Formal Resolution of Conflicts Procedures, page 31
49. Please remove the final two sentences under this heading. The
prospectus should contain a discussion of the known material risk
factors that investors face. With respect to the last sentence,
if
you choose to encourage investors to consult their own legal or
tax
professionals, please revise to indicate this.
Investment Policies of the Master Fund, page 31
50. We note that the Master Fund will invest only in commodity
interests that are traded in sufficient volume to permit ease of
taking and liquidating positions. Please revise to describe the
criteria the Manager will use to determine if a commodity interest
has sufficient volume.
Leverage, page 32
51. Please revise to clarify whether there are any limitations on
the
amount you may employ.
Description of Funds Shares and The Master Fund Units, page 32
Transfer Agent and Registrar, page 33
52. Please disclose the fees to be paid to the transfer agent. In
this regard, we note that you will be responsible for the fees
charged by the transfer agent.
Distributions, page 33
53. Please revise to indicate whether there are any restrictions
that
may prevent the Master Fund from making distributions to the Fund
or
the Fund making distributions to the Shareholders. In addition,
please provide examples of when the Master Fund and the pool may
not
make distributions.
54. Please clarify your statement that, "Over time, the Master
Fund
and the Fund will distribute all of their net earnings." If this
refers to the distribution policies that will be followed by the
Master Fund and the pool at a later date, please expand your
disclosure to indicate at what point in time this would occur and
what circumstances could cause the Master Fund and the pool not to
distribute all of their net earnings.
Net Asset Value, page 34
55. Please clarify why you believe that prices reported at the
beginning and end of trading day should be used "for informational
purposes." Since any exchange trading of your units that will
occur
will not be made with the benefit of knowing the pool`s investment
portfolio at any given time, please explain the import of these
trades to investors.
56. We refer to your disclosure of an "approximate value" of the
pool`s shares that may not be calculated in the same manner as the
NAV. Please disclose the following with respect to the
"approximate
value:"
* Who will calculate the "approximate value;"
* Where this value may be accessed by investors;
* How often the value will be updated during the trading day;
* What investments will be excluded in determining the value (i.e.
- -
non-exchange traded forward contracts, swaps, etc.).; and,
* Whether this value will include any purchases of futures
contracts
during the trading day or whether it only reflects the current
prices
of interests held as of close of business of the previous trading
day.
57. We note that NAV per Master Fund Unit is computing by dividing
the value of all assets of the Master Fund by the total number of
Master Funds Units Outstanding. Please revise to briefly describe
the
guidelines that the commodity subadvisor will use to value put
options, swap contracts and other off-exchange commodity
interests.
Use of Proceeds, page 35
58. Please revise to include organization and offering expenses
and
underwriting commissions to be paid.
Underwriters, page 35
59. Please identify all underwriters known to you that will
participate in the initial offering as of the time of
effectiveness
of this registration statement. In this regard, we note your
disclosure on the cover page of the prospectus that Nuveen
Investments LLC will serve as an underwriter.
60. Please revise to identify the underwriters that may engage in
electronic distribution of your prospectus. Also, please advise
us
how your procedures for the electronic distribution of your
prospectus comply with Section 5 of the Securities Act. In
particular, please provide your analysis of how you or the
underwriters will provide investors with a prospectus that
satisfies
the prospectus delivery requirements. In addition, please
describe
the following to us in more detail:
* The communications used;
* The manner of conducting the distribution and sale, such as the
use
of indications of interest or conditional offers; and
* The funding of an account and payment of the purchase price.
Your analysis should address the communications made during the
pre-
effective and post-effective periods. If the underwriters`
procedures for electronic distribution have already been approved
by
the staff, please confirm that the procedures have not changed
since
the time of our approval.
61. Tell us whether you or the underwriters have any arrangements
with a third party to host or access your preliminary prospectus
on
the Internet. If so, identify the party and the website, describe
the material terms of your agreement and provide us with any
written
agreement. Provide us also with copies of all information
concerning
your company or prospectus that appeared on their website. If you
subsequently enter into any such agreements, promptly supplement
your
response.
62. Please provide us with a draft underwriting agreement when
available.
63. We note your reference to the lockup agreement you have among
the
Fund, the Master Fun and the Subadvisors. Please disclose whether
they intend to participate in the offering and, if so, whether
they
will purchase shares at the offering price or at a discount.
64. We note that the underwriting agreement may be terminated in
the
event that "trading in the Fund`s Shares shall have been suspended
by
the Securities and Exchange Commission." Since there is no
trading
market for your shares and will not be a market until after the
registration statement is brought effective, please explain why
this
provision has been included.
Management`s Discussion and Analysis of Financial Condition and
Results of Operation, page 39
65. Please revise to discuss your liquidity on a short term and
long
term basis.
Credit Risk, page 40
66. In order to give depth to your disclosure, please revise to
disclose the percentage of your assets that you intend to invest
in
off-exchange or over-the-counter commodity interests with a
counterparty.
Declaration of Trust and LLC Agreement, page 42
Withdrawal or Removal of the Manager, page 43
67. We note that holders of an unspecified percentage of shares
may
remove the Manager with or without cause. We also note that the
Manager has no obligation to call a Special Meeting even if
holders
of an unspecified percentage of shares submit a written request
for a
Special Meeting. In light of this, please disclose the procedures
that shareholders would have to comply with in order to remove the
Manager.
Legal Opinion, page 48
68. Your statement under this heading that Bell, Boyd & Lloyd LLC
will not give investors legal advice tends to qualify the legal
opinion that counsel will be providing in connection with this
offering. In addition, this language may imply that investors
cannot
rely on either the legal or tax opinion. Please remove this
qualifying language.
Where you can find more information, page 74
69. Please revise to update the address of the SEC`s public
reference
room to 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
70. Please revise to specifically identify the reports that you
will
file with the SEC and the reports that will be provided to
shareholders pursuant to CFTC rules.
Part Two: Statement of Additional Information
71. Please include your financial statements in Part One of the
registration statement.
Supplemental Performance Table, page 70
72. We refer to your statement that the "Table has been presented
based upon the amount of funds that would have been committed to
the
trading program by a nonaffiliated client." In light of this,
please
tell us why you do not consider the supplemental performance table
to
constitute hypothetical performance data instead of extracted
performance data.
73. We refer to number 9 under this heading where you state that
the
table will include annual management fees of 1 percent. Please
advise us as to whether that will be consistent with the
management
fee to be paid in the proposed offering.
Appendix A
74. Please include this information in Part One of the
registration
statement where you discuss the trading policies of Gresham and
the
Master Fund.
Part II
75. Please explain why the Director and Principal Executive
Officer
of Nuveen Commodities Asset Management, LLC has signed this
registration statement rather than Nuveen Commodities Income and
Growth Master Fund LLC.
Item 16. Exhibits and Financial Statement Schedules
76. Please file the legal and tax opinions with the next amendment
or
provide drafts for us to review. We must review the opinions
before
we can declare your registration statement effective and we may
have
comments on the opinions.
Item 17. Undertakings
77. Please remove the undertakings found under (a) since these
undertakings relate to continuous offerings subject to Rule 415.
Alternatively, if such undertakings are included for use by an
affiliate of the Fund in market-making transactions, please note
this
in the footnotes to the fee table and in the "Underwriting"
section
of the prospectus, or include alternate pages to the registration
statement to be used as a "market-making prospectus." If you do
intend to use this prospectus or an alternate prospectus for
market-
making activities, please note that the undertakings required
under
Item 512(a) have been revised as of December 1, 2005.
* * * *
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 reviewed by the staff to
be
certain 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 this action 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 Thomas Flinn at 202-551-3469 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 Jeffrey A. Shady, Attorney-Advisor at 202-551-3471
or
the undersigned at 202-551-3694 with any other questions.
Sincerely,
Owen Pinkerton
Senior Counsel
cc: Stacy H. Winick, Esq. (via facsimile)
Bell, Boyd & Lloyd LLC
John P. Amboian
Nuveen Commodities Income and Growth Fund
January 13, 2006
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