NAC355.330. Requirements relating to private equity funds in which Corporation invests.

     1. Private equity funds in which the Corporation invests:

     (a) May include qualified private equity funds with an emphasis in venture capital, growth capital, buyout investments, mezzanine financing, distressed debt or secondary investments in private equity.

     (b) Must be managed by persons who have at least 10 years of experience in commercial banking, private equity investing, mezzanine funding or venture capital.

     2. The managers of a private equity fund in which the Corporation invests have a fiduciary duty to the Corporation with respect to the Corporation’s investment in the fund.

     3. The fee structure of a private equity fund in which the Corporation invests may consist of only a management fee and a performance fee. The management fee may not exceed 2.5 percent of committed capital. The performance fee may not exceed 20 percent of the net profits of the fund and must be distributed in a manner which aligns the interests of the general partner of the private equity fund and the limited partners of the fund.

     4. A private equity fund in which the Corporation invests must provide to the Fund of Funds Manager an annual financial statement prepared by an accredited audit firm.

     5. The Corporation must not be a general partner in a private equity fund in which the Corporation invests.

     (Added to NAC by St. Treasurer by R128-11, eff. 2-20-2013)