Eric S. Purple
Partner
he/him/his
Experience
Stradley Ronon Advises Invesco in Novel Conversion of $400B QQQ Trust to Open-End ETF
Stradley Ronon represented Invesco Capital Management in a first-of-its-kind conversion of the $400 billion Invesco QQQ Trust, Series 1, from an exchange-traded fund (ETF) organized as a unit investment trust (UIT) to an ETF organized as an open-end management investment company.
As a result of the December 22 conversion, shareholders of QQQ will be able to enjoy the benefits of a modernized structure and will benefit from a reduced total expense ratio, resulting in a 10% fee reduction for shareholders. In addition, Invesco will be able to earn a profit from its management of the fund for the first time. Under the Investment Company Act of 1940, sponsors of a UIT are prohibited from charging a UIT any fees that include an element of profit, and the conversion has removed that limitation.
Invesco is an independent global investment firm managing $2.1 trillion in assets under management for both retail and institutional investors as of September 30.
Learn more in Invesco’s announcement.
Alan P. Goldberg, Mark R. Greer, Claire Olivar and Eric S. PurpleStradley Ronon Represents Special Committee of Portman Ridge in Merger with Logan Ridge
Stradley Ronon served as legal counsel to the special committee of Portman Ridge Finance Corp., a publicly traded, externally managed closed-end investment company, in the company’s merger with Logan Ridge Finance Corp., a publicly traded business development company. The transaction closed July 15; the value was undisclosed.
The combined company had total assets in excess of $600 million based on July 11 financial data. In connection with the merger, Portman Ridge will rebrand and begin operating under the name BCP Investment Corp. to better reflect its affiliation with the broader BC Partners Credit platform.
Eric S. Purple, Nicole Simon and Geena MarzoucaSecures SEC Dismissal in First-Ever Liquidity Rule Enforcement Action
The U.S. Securities and Exchange Commission (SEC) voluntarily dismissed charges with prejudice against two mutual fund independent trustees in the agency’s first enforcement action brought pursuant to the Liquidity Rule (Rule 22e-4) promulgated under the Investment Company Act of 1940 (the Act). The case was filed in the U.S. District Court for the Northern District of New York against registered investment adviser Pinnacle Advisors, two of its officers and two independent trustees of a mutual fund that Pinnacle advised. The SEC alleged that the independent trustees aided and abetted the mutual fund’s purported misclassification of illiquid securities in violation of the Liquidity Rule.
Stradley Ronon argued on behalf of the independent trustees that the SEC had no legal basis for its aiding and abetting charges as the independent trustees did not write, review, or even see the liquidity classifications that formed the basis for those charges, did not substantially assist the alleged violation, and otherwise complied with all of their obligations pursuant to the Liquidity Rule. Stradley Ronon further argued that the agency lacked the necessary congressional authority pursuant to the Act to promulgate the Liquidity Rule.
The challenge to the agency’s authority to promulgate the Liquidity Rule led the Court to order additional briefing to address the framework for interpreting federal statutes established by the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo. Stradley Ronon re-filed its motion to dismiss all charges on April 28 arguing that the plain text of the statute did not grant rulemaking authority related to fund liquidity and resubmitted its arguments challenging the SEC’s failure to state a claim for aiding and abetting liability against the independent trustees. Following the briefing, the SEC agreed to dismiss all charges against the independent trustees with prejudice, meaning that the SEC cannot refile the charges.
“We are very pleased that the court took the merits of our arguments seriously and that the SEC responded by dismissing the complaint,” said the NYSA Fund independent trustees. “We always believed in the strength of our case and are grateful for our lead attorney Jan Folena and Stradley Ronon’s guidance, knowledge, and litigation capabilities that made this outcome possible.”
Lead trial counsel Jan Folena was assisted by Eric Porter, Samantha Kats, Sara Crovitz, Dave Grim, and Eric Purple.
Jan M. Folena, Eric B. Porter, Samantha B. Kats, Sara P. Crovitz, David W. Grim and Eric S. PurpleStradley Ronon Advises in Blue Owl Capital Merger Creating $18.6B BDC
Stradley Ronon represented the special committee to Blue Owl Capital Corp. III in a merger into Blue Owl Capital Corp., creating the second largest externally managed, publicly traded business development company (BDC) by total assets, with $18.6 billion of total assets at fair value and investments in 232 portfolio companies on a pro forma combined basis as of September 30, 2024. The combined company will operate as Blue Owl Capital Corp. The transaction closed January 13.
Blue Owl Capital Corp. is a specialty finance company focused on lending to U.S. middle-market companies.
Eric S. Purple, Nicole Simon, Alycia M. Vivona, Thomas L. Hanley, Dean V. Krishna, Geena Marzouca and Conor CourtneyNuveen Closed-end Funds Sell $252 Million in Term Preferred Shares
Stradley Ronon represented Nuveen-sponsored senior loan closed-end funds Nuveen Floating Rate Income Fund (NYSE: JFR), Nuveen Floating Rate Income Opportunities Fund (NYSE: JRO) and Nuveen Senior Income Fund (NYSE: NSL) in connection with a series of offerings of Term Preferred Shares representing an aggregate of approximately $252 million in aggregate liquidation preference. The funds sold approximately $217 million worth of Term Preferred Shares under SEC-registered shelf offerings, in eight separate takedowns. JFR also sold $35 million worth of Term Preferred Shares in a Rule 144A offering.
Nuveen provides investment solutions designed to help secure the long-term goals of individual investors and the advisors who serve them. Through the investment expertise of leading asset managers across traditional and alternative asset classes, Nuveen is committed to delivering consultative guidance that aligns with client needs. Funds are distributed by Nuveen Securities, LLC, a subsidiary of Nuveen Investments, Inc. Nuveen is an operating division of TIAA Global Asset Management. For more information, please visit the Nuveen website at www.nuveen.com.
Eric S. Purple
