December 4, 2020
Sean Graber, Esq.
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, Pennsylvania 19103
Re: Delaware Wilshire Private Markets Fund
Registration Statements on Form N-2
File No. 333-249834
Dear Mr. Graber:
The staff has reviewed the above-referenced initial registration
statement, which the
Commission received on November 4, 2020. Based on our review, we have the
following
comments:
General Comments
1. The filing contains some placeholders for missing disclosure/financial
statements. Please
ensure that all missing information is included in a pre-effective
amendment responding
to these comments.
2. Please tell us if you have presented or will present any test the
waters materials to
potential investors in connection with this offering. If so, please
provide us with copies
of such materials.
3. Delaware Wilshire Private Markets Fund currently has an effective
registration statement
on Form N-2 under the 1940 Act only. Supplementally, please clarify
whether any
Shares have been sold pursuant to that registration statement and
whether, once the filing
registering the Fund s shares under the 33 Act is effective, shares
under the 1940 Act
registration statement will continue to be sold.
4. Please supplementally explain why the Auction Fund is now registering
under the 1933
Act since it already has an effective registration statement under the
1940 Act.
5. Supplementally, please provide a schedule for the proposed transactions
described in the
prospectus. For example, does the timing assume the Master Fund will
receive its novel
multiclass relief before the Auction Fund commences operations or sells
any Shares?
Sean Graber, Esq.
December 4, 2020
Page 2
6. Please briefly discuss any exemptive relief applied for or other
approvals, such as listing
on the Nasdaq Private Market, that may need to occur prior to any
offering/sale of
Auction Fund Shares.
7. Please clarify whether the Auction and Tender Offer Funds will be the
only Feeder Funds
invested in the Master Fund. If other entities may invest in the Master
Fund, please
supplementally describe these prospective investors.
Cover Page
8. Please disclose that Shares will be sold only to Eligible Investors
as stated in the plan
of distribution.
9. We note that the Auction Fund has an effective registration statement
under the 1940 Act.
Please confirm whether it is accurate to characterize the Auction Fund as
newly
organized as stated in the text above the Offering Table (e.g., if
Shares have already
been sold).
10. Please add the following disclosure to the cover page of the prospectus
if accurate:
a. The amount of distributions that the Auction Fund may pay, if any,
is uncertain.
b. The Auction Fund may pay distributions in significant part from
sources that may
not be available in the future and that are unrelated to the Fund
s performance,
such as borrowings and amounts from the Fund s affiliates that
are subject to
repayment by investors.
8. In the penultimate paragraph of the cover page, please consider whether
the reference to
the first year of the Auction Fund s operations should be changed
to the first 12-18
months of the Auction Fund s operations to match the disclosure in
the prospectus
discussing purchases, exchanges, and repurchases of Shares.
Summary of Terms
Purchase, Exchange and Repurchase of Shares, pages 1-2
9. The Funds do not have a fundamental policy related to Share repurchases.
Please
summarize, supplementally, Fund compliance with rule 23c-3 under the 1940
Act
governing repurchase offers by closed-end companies.
10. Please consider reorganizing the first paragraph into two separate
paragraphs since the
first two sentences relate to investors while the next two relate to
actions by the Auction
Fund.
Sean Graber, Esq.
December 4, 2020
Page 3
11. When discussing liquidity of the Auction Fund Shares, please track the
language of the
summary paragraph on page 95 (e.g., Auction Fund Shareholders may
attempt to sell
their Auction Fund Shares through two liquidity mechanisms . )
12. At the end of the last sentence in the first paragraph, please clarify
whether any purchase
order not filled during the auction process will be filled by the Auction
Fund at NAV
at the auction price.
13. Although Shares will not be listed on an exchange, Shareholders may sell
Auction Shares
during monthly auctions on the Nasdaq Private Market at the same time as
the Auction
Fund itself, or Shareholders may exchange into the Tender Offer Fund and
tender their
Tender Offer Fund Shares. Please separate the discussion of these two
liquidity options
in the second paragraph into two separate paragraphs.
14. Please briefly summarize how the Tender Offer Fund will operate (e.g.,
that it will invest
in the Master Fund, whether it will share the same adviser, subadviser
and board with the
Auction Fund, and any conflicts of interest that may arise with regard to
their fiduciary
duties). Please also address the following:
a. whether Shareholders of the Auction Fund will receive notice
regarding an
upcoming tender offer in order to time their exchange;
b. whether the exchange from Auction Fund Shares to Tender Offer Fund
Shares is
revocable;
c. whether there will be any separate market for Tender Offer Fund
Shares or if the
only liquidity mechanism for these Shares is the annual tender
offer;
d. highlight, as stated on page 95, that the
Board/Adviser/Sub-Adviser, as
applicable, has sole discretion whether, and has no obligation
to accept a
requesting Shareholder s request to exchange Auction Fund Shares
for Tender
Offer Fund Shares; and
e. briefly describe any risks related to an exchange into Tender
Offer Fund Shares
(e.g., that a Shareholder who exchanges Auction Fund Shares to
Tender Offer
Fund Shares may not be able to participate fully in a Tender
Offer).
15. In the first paragraph on page 2, third sentence, please clarify that it
will be the Board of
the Tender Offer Fund that approves the tender offer rather than
Boards generally.
16. Please briefly summarize how auctions will be conducted on the Nasdaq
Private Market.
For example, can the price of those Shares offered differ from NAV?
During the auction,
can prospective investors still purchase from the Fund directly or only
if more purchase
orders are received than filled through the auction process? We note the
Nasdaq Private
Sean Graber, Esq.
December 4, 2020
Page 4
Market auction process is discussed on pages 96-98; consider moving
applicable
disclosure to the summary.
17. Please clarify how the auction process will treat Shares sold by
Shareholders and Shares
sold by the Auction Fund if there is insufficient investor demand for
Shares in a
particular month. In addition, if there are any risks posed because
Shareholders and the
Auction Fund may be selling Shares at the same time, please disclose
these risks where
appropriate.
18. Please disclose whether a Shareholder will have to pay any
fees/commissions to
participate in a monthly auction in order to offer their Shares for sale.
19. The last paragraph states that depending on investor demand and certain
other factors,
Auction Fund Shares may only be available for purchase or sale at their
NAV or at a
discount during any particular monthly auction. Please briefly describe
these certain
other factors in either the summary or prospectus. In addition, please
clarify whether
Shares may be purchased/sold at a premium.
Limited or No Operating History, page 8
20. The disclosure suggests the Auction Fund has an operating history.
Supplementally,
please discuss how long the Auction Fund has been operating and whether
it has sold any
Shares.
Plan of Distribution, page 20
21. Supplementally, please discuss whether there are any parameters limiting
or governing
the Auction Fund's ability to reject a subscription in whole or in part.
If so, please
disclose what those parameters are in the prospectus.
U.S. Federal Income Tax Matters, page 21
22. Please consider highlighting the tax risk related to amended Form 1099s
on the cover of
the prospectus, including a cross-reference to where the risk is
discussed in greater detail
within the prospectus.
Structure, page 22
23. In the first sentence of the second paragraph, please replace certain
sophisticated
investors with Eligible Investors for consistency.
24. In the third paragraph, please clarify, if true, that the proposed
structure permits the
Funds to rely on the Nasdaq Private Markets no-action letter.
Sean Graber, Esq.
December 4, 2020
Page 5
Summary of Fees and Expenses, pages 23-24
25. In the paragraph above the expense example, please revise the discussion
of recoupment
to replace the rolling three year period language to state that
recoupment is limited
generally to 3 years from the date a fee was initially waived or an
expense reimbursed.
Investment Program, pages 25-31
Environmental, Social and Governance ( ESG ) Due Diligence, page 31
26. The registrant discusses the Sub-Advisers ESG Due Diligence process in
this section.
Explain supplementally whether ESG is part of the Master Fund s
principal investment
strategies. If it is not, please clarify the role that ESG due diligence
plays in the selection
of Master Fund s investments.
27. If ESG is part of the Master Fund s principal investment strategies,
please revise the
disclosure as follows:
a. The Fund should more clearly explain its definition of ESG
and its specific
ESG area(s) of focus.
b. The Fund should describe the criteria it uses in determining what
issuers it
considers to have ESG characteristics, consistent with its chosen
ESG
definition/focus. The disclosure should include whether the Fund
selects
investments by reference to, for example: (1) an ESG index; (2) a
third-party
rating organization; (3) a proprietary screen and the factors the
screen applies; or
(4) a combination of the above methods. The Fund should also
describe its due
diligence practices in applying its screening criteria to
portfolio companies (e.g.,
does it perform its own independent analysis of issuers, or does
it rely exclusively
on third party screens?). Lastly, explain (1) whether the Fund s
ESG criteria are
applied to every investment it makes, or only to some of its
investments; and (2)
whether ESG is the exclusive factor considered, or whether it is
one of several
factors.
c. If the Fund intends to use one or multiple third party
data/scoring providers,
please revise the principal strategy discussion to identify the
provider that the
Fund intends to use, or the primary providers if the Fund intends
to use multiple
third party providers. Please also briefly summarize each
providers
criteria/methodology in the principal strategies. Also consider
any related
principal risks to the Fund s use of third party data providers,
since the criteria
used by providers can differ significantly.
Sean Graber, Esq.
December 4, 2020
Page 6
d. Please consider whether an ESG specific risk is appropriate for
this Fund.
e. The Fund should disclose, where appropriate, how it will approach
relevant ESG
proxy issues for their portfolio companies. Alternatively, the
Fund should
explain in correspondence why it believes such disclosure is not
required.
Types of Investments and Related Risks, pages 32-83
Limited or No Operating History, page 33
28. The last sentence states that if the Funds are not able to raise
sufficient assets to support
their operations, the Adviser and Sub-Adviser may discontinue operations
and liquidate
assets. Please clarify any risks related to liquidation given the Master
Fund s proposed
investments such as investments in private equity funds.
Tax Risks, page 43-45
29. Please consider separating out the tax risks related to the Master Fund
and those that
relate to the Feeder Funds.
30. Please add tax risks related to holding through the Feeder Funds to the
discussion of
principal risks, particularly the risk that annual tax statements may be
amended or that the
Feeder Funds may not qualify as RICs for taxation purposes as noted in
the summary.
31. In the first paragraph, please clarify whether the references to the
"Fund" should be to the
"Feeder Fund."
32. Please describe the Master Fund's investment in "controlled foreign
corporations" in
greater detail in the principal investment strategy section including
whether there will be
any limitation on the amount of the Master Fund's assets that may be
invested in these
entities.
33. Please disclose whether the same person will be the adviser to both the
Master Fund and
any controlled foreign corporations.
34. Please also disclose whether any of the controlled foreign corporations'
principal
strategies or principal risks will also constitute principal strategies
and principal risks of
the Master Fund; whether the financial statements of the CFC will be
consolidated with
those of the Master Fund; and whether the CFC's management fee (including
any
performance fee) will be included in the Master Fund's fees and expenses.
Sean Graber, Esq.
December 4, 2020
Page 7
Potential Conflicts of Interest, pages 46-47
35. Supplementally, please discuss the status of the co-investment exemptive
application
filed by the Sub-Adviser and the Funds that are described in the second
paragraph under
the subheading, Allocations of Investment Opportunities .
Loan Investments; Leveraged Loans, page 54
36. Please clarify whether investments may be made in covenant lite leveraged
loans. If so,
consider whether additional risk disclosure related to covenant lite
loans should be added.
Construction and Right of Way Risk, page 72
37. The disclosure in the first sentence states that it is in the appendix,
but the discussion
appears in the prospectus. Please revise.
Repurchase Offers of the Tender Offer Fund, pages 99-104
38. Supplementally, please clarify if the Tender Offer Fund will need
exemptive relief from
the Investment Company Act or Exchange Act or rules thereunder to conduct
exchanges/repurchases. If relief is needed, please disclose the risk that
such relief may
not be granted as a possible risk of investment in the Fund.
39. Please replace the last bullet point on page 104 it would be in the
best interest of the
Fund ) with language stating that involuntary redemptions will be
conducted
consistent with rule 23c-2 under the Investment Company Act.
Description of Capital Structure and Shares, pages 106-107
40. Please review and revise the last paragraph of this section in light of
the fact that the
Chief Counsel s Office has informed you that the proposed structure,
including the
Auction and Tender Funds, will require novel multiclass relief.
41. The last sentence of the last paragraph, states that only the Auction
Fund intends to issue
multiple share classes. Please briefly discuss whether all share classes
of the Auction
Fund will be permitted to participate in monthly auctions and exchange
shares for Tender
Offer Fund Shares, and whether the terms of exchange will be the same for
each share
class (e.g., will all shareholders receive the same Tender Offer Fund
Shares?).
**********************
Sean Graber, Esq.
December 4, 2020
Page 8
A response to this letter should be in the form of a pre-effective
amendment filed
pursuant to Rule 472 under the Securities Act. The pre-effective amendment
filing should be
accompanied by a supplemental letter that includes your responses to each of
these
comments. Where no change will be made in the filing in response to a comment,
please
indicate this fact in your supplemental letter and briefly state the basis for
your position.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments,
action, or absence of
action by the staff. Should you have any questions regarding this letter,
please contact me at
(202) 551-6870 or hahnja@sec.gov.
Sincerely,
/s/ Jaea Hahn
Jaea F. Hahn
Senior Counsel
cc: Andrea Ottomanelli Magovern, Assistant Director
Sumeera Younis, Branch Chief