N-Q 1 fp0051131_nq.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

OF REGISTERED MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number 811-22990

 

Pomona Investment Fund

(Exact name of registrant as specified in charter)

 

780 Third Avenue, 46th Floor

New York, NY 10017

(Address of principal executive offices) (Zip code)

 

Michael D. Granoff

Pomona Management LLC

780 Third Avenue, 46th Floor

New York, NY 10017

(Name and address of agent for service)

 

Registrant’s telephone number, including area code: (212) 593-3639

 

Date of fiscal year end: March 31

 

Date of reporting period: December 31, 2019

 

 

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

 

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.

 

 

 

ITEM 1. SCHEDULE OF INVESTMENTS.

 

The Schedule(s) of Investments is attached herewith.

 

Pomona Investment Fund              
Consolidated Schedule of Investments (unaudited)              
December 31, 2019              
                     

Private Equity Investments a, h (100.18%)  Geographic  Original    
Direct Investments/Co-Investments (7.04%)  Region b  Acquisition Date  Fair Value 
AAA Partners, Inc. c  North America  06/21/2019  $2,509,054 
Investcorp Aspen Offshore Fund, L.P.  North America  07/01/2019   5,016,027 
Roark Capital Partners II Sidecar, L.P. c  North America  10/18/2018   716,947 
WP AUSA, L.P. c  North America  07/22/2019   4,533,605 
Total Co-Investments (7.04%)         12,775,633 
            
Primary Investments (0.83%)           
Aberdeen U.S. Private Equity VIII (Offshore), L.P. c  Europe  04/11/2019   279,777 
Hellman & Friedman Capital Partners IX (Parallel), L.P. c  North America  09/28/2018   (12,722)
Roark Capital Partners V (TE) L.P. c  North America  04/30/2018   1,227,626 
The Veritas Capital Fund VII, L.P. c  North America  10/10/2019   - 
Total Primary Investments (0.83%)         1,494,681 
            
Seasoned Primary Investments (7.58%)           
Aerospace, Transportation and Logistics Fund II LP  North America  03/31/2019   1,267,885 
Avista Capital Partners (Offshore) IV, L.P.  North America  12/01/2017   579,755 
Gryphon Partners IV, L.P.  North America  06/24/2016   7,735,911 
Ironsides Direct Investment Fund V, L.P. c  North America  12/31/2019   238,851 
Merit Mezzanine Fund VI, L.P.  North America  03/02/2018   2,288,803 
VSS Structured Capital Parallel III, L.P.  North America  01/26/2018   1,643,748 
Total Seasoned Primary Investments (7.58%)         13,754,953 
            
Secondary Investments (84.73%)           
ABRY Partners V, L.P.  North America  12/31/2018   70,305 
Advent International GPE VII-B Limited Partnership  North America  06/30/2015   2,933,846 
Advent International GPE VII-C Limited Partnership c  North America  12/31/2019   2,158,120 
Altor 2003 Fund (No. 1) LP c  Europe  12/31/2018   11,122 
AP VIII Private Investors, LLC  Europe  06/28/2019   3,845,029 
AP VIII Private Investors Offshore (USD), L.P.  Europe  06/30/2017   191,492 
Apax Europe VI - A, L.P. c  Europe  12/30/2016   656,368 
Apollo Investment Fund VI, L.P. c  North America  12/31/2018   70,636 
Apollo Investment Fund VII, L.P.  North America  09/29/2017   223,910 
Ares Corporate Opportunities Fund III, L.P. c  North America  12/31/2019   800,973 
Audax Mezzanine Fund II, L.P. c  North America  09/30/2015   896 
Audax Mezzanine Fund III, L.P.  North America  09/30/2016   1,899,909 
Audax Private Equity Fund, L.P. c  North America  12/31/2018   3,545 
Audax Private Equity Fund II, L.P. c  North America  12/31/2018   31,473 
Audax Private Equity Fund III, L.P. c  North America  09/30/2015   537,330 
Audax Private Equity Fund IV, L.P.  North America  09/29/2017   240,518 
Audax Senior Loan Fund III, L.P.  North America  09/28/2018   479,908 
Avista Capital Partners (Offshore) II, L.P. c  North America  12/31/2019   599,227 
Avista Capital Partners III, L.P. c  North America  12/31/2019   53,306 
Avista Healthcare Partners, L.P. c  North America  12/31/2019   1,148,982 
Bain Capital Asia Fund II, L.P. c  North America  12/31/2019   1,410,726 
Bain Capital Distressed and Special Situations 2013 E, L.P. c  North America  06/30/2015   226,318 
Bain Capital Europe Fund III, L.P. c  North America  12/30/2016   426,152 
Bain Capital Fund VII, L.P.  North America  12/29/2017   5,413,128 
Bain Capital Fund VIII, L.P. c  North America  12/30/2015   12,848 
Bain Capital Fund VIII-E, L.P. c  North America  12/31/2018   4,801 
Bain Capital Fund IX, L.P. c  North America  12/31/2018   409,367 
Bain Capital Fund X, L.P.  North America  12/30/2015   2,583,737 
Bain Capital VII Coinvestment Fund, L.P.  North America  12/29/2017   77,218 
Bain Capital VIII Coinvestment Fund, L.P. c  North America  12/31/2018   1,508 
Bain Capital IX Coinvestment Fund, L.P. c  North America  12/31/2018   69,946 
BCP V-S L.P. c  North America  09/29/2017   40,394 
Berkshire Fund VI, Limited Partnership c  North America  12/31/2018   3,550,470 
Berkshire Fund VII, L.P.  North America  12/31/2018   262,335 
Blackstone Capital Partners V L.P.  North America  09/29/2017   312,186 
Carlyle Partners IV, L.P.  North America  12/31/2018   32,346 
Carlyle Partners V, L.P. c  North America  12/31/2019   213,519 
CDRF8 Private Investors, LLC c  North America  06/30/2017   178,510 
Cerberus Institutional Partners, L.P. - Series Three  North America  12/30/2016   26,599 
Cerberus Institutional Partners, L.P. - Series Four  North America  12/30/2016   762,691 
CHP III, L.P. c  North America  09/29/2017   323,674 
CI Capital Investors II, L.P. c  North America  12/31/2019   389,899 
CI Capital Investors III, L.P. c  North America  12/31/2019   988,318 
Clearlake Capital Partners IV, L.P. c  North America  12/31/2019   2,381,347 
Clearlake Opportunities Partners (P-Offshore), L.P. c  North America  12/31/2019   699,792 
Clyde Blowers Capital Fund III LP c  Europe  06/30/2015   229,978 
Comvest Capital II International (Cayman), L.P.  North America  06/29/2018   384,043 
Comvest Capital III International (Cayman), L.P.  North America  06/29/2018   1,987,127 
DCM IV, L.P. c  North America  06/30/2015   413,233 
DCM V, L.P. c  North America  06/30/2015   378,865 
DCM VI, L.P. c  North America  06/30/2015   1,159,357 
Francisco Partners II, L.P. c  North America  12/31/2018   206,026 
FSN Capital IV L.P. c  Europe  12/31/2019   561,385 
General Atlantic Investment Partners 2013, L.P. c  North America  12/31/2019   3,735,000 
GESD Investors II, L.P. c  North America  09/29/2017   883,587 
Green Equity Investors V, L.P.  North America  09/29/2017   3,003,370 

 

 

 

Pomona Investment Fund              
Consolidated Schedule of Investments (unaudited) (continued)          
December 31, 2019              
                     

Private Equity Investments a, h (100.18%) (continued)  Geographic  Original    
Secondary Investments (84.73%) (continued)  Region b  Acquisition Date  Fair Value 
Gridiron Capital Fund II, L.P. c  North America  12/31/2019  $2,530,358 
Gridiron Energy Feeder I, L.P. c  North America  05/10/2017   2,464,315 
GS Capital Partners VI Parallel, L.P. c  North America  12/31/2019   145,320 
GSO Capital Opportunities Overseas Fund L.P. c  North America  12/30/2015   45,064 
GSO Private Investors Offshore II, L.P.  North America  06/30/2017   94,986 
H.I.G. Bayside Debt & LBO Fund II, L.P.  North America  12/31/2018   457,157 
H.I.G. Capital Partners IV, L.P. c  North America  12/31/2018   1,283,115 
Harvest Partners V, L.P.  North America  12/29/2017   1,324 
HgCapital 5 L.P. c  Europe  12/31/2018   100,085 
Hellman & Friedman Capital Partners VI, L.P.  North America  03/31/2019   373,456 
Hellman & Friedman Capital Partners VII (Parallel), L.P. d, e  North America  06/28/2019   10,163,271 
Insight Equity I LP c  North America  12/31/2018   14,253 
Insight Equity II LP c  North America  12/31/2018   1,120,476 
Insight Partners Continuation Fund, L.P. c  North America  08/14/2019   7,203,082 
Insight Venture Partners Coinvestment Fund II, L.P.  North America  06/30/2015   643,349 
Insight Venture Partners Coinvestment Fund III, L.P.  North America  06/30/2015   221,741 
Insight Venture Partners VI, L.P.  North America  06/30/2015   39,283 
Insight Venture Partners VII, L.P.  North America  06/30/2015   2,195,038 
Insight Venture Partners VIII (Co-Investors), L.P. c  North America  12/31/2019   226,329 
Insight Venture Partners VIII, L.P.  North America  06/30/2015   2,872,087 
Insight Venture Partners IX, L.P. c  North America  09/30/2019   51,634 
Insight Venture Partners (Cayman) VIII, L.P. c  North America  09/30/2019   1,885,985 
Insight Venture Partners (Cayman) IX, L.P. c  North America  09/30/2019   1,992,714 
Insight Venture Partners Coinvestment Fund (Delaware) III, L.P. c  North America  09/30/2019   447,411 
Insight Venture Partners Growth-Buyout Coinvestment Fund (Cayman), L.P. c  North America  09/30/2019   745,016 
Insight Venture Partners Growth-Buyout Coinvestment Fund, L.P. c  North America  09/30/2019   47,207 
J.W. Childs Equity Partners III, L.P. c  North America  12/31/2018   222 
JMI Equity Fund VI, L.P. c  North America  09/29/2017   18,433 
Kelso Investment Associates VIII, L.P.  North America  09/29/2017   1,287,006 
KKR 2006 Fund L.P.  North America  09/29/2017   396,324 
KKR 2006 Private Investors Offshore, L.P.  North America  06/30/2017   578,558 
KPS Special Situations Fund III, L.P.  North America  09/29/2017   17,576 
KPS Special Situations Fund III, L.P. (Supplemental - Feeder), Ltd.  North America  09/29/2017   25,122 
Littlejohn Fund III, L.P. c  North America  12/31/2018   31,522 
Littlejohn Fund IV, L.P.  North America  12/30/2015   745,990 
Madison Dearborn Capital Partners IV, L.P. c  North America  12/31/2019   920,710 
Madison International Real Estate Liquidity Fund V c  North America  06/30/2015   37,842 
Merchant Banking Partners IV, L.P.  North America  09/29/2017   20,471 
Montreux Equity Partners IV, L.P. c  North America  09/29/2017   403,974 
MPE Partners II, L.P. c  North America  06/28/2019   1,640,151 
MSouth Equity Partners II, L.P. c  North America  12/31/2019   2,436,600 
Nautic Partners VI-A, L.P. c  North America  12/31/2019   864,366 
New Enterprise Associates 12, Limited Partnership c  North America  09/29/2017   69,151 
New Mountain Partners III, L.P. c  North America  09/29/2017   750,441 
NewView Capital Fund I, L.P. c  North America  10/31/2018   5,575,703 
Oaktree Private Investment Fund 2010, L.P.  North America  06/30/2015   74,908 
Oak Investment Partners XII, Limited Partnership c  North America  03/31/2019   404,803 
Paladin III (HR), L.P. c  North America  09/29/2017   976,199 
Pamlico Capital III, L.P. c  North America  12/31/2019   3,585,999 
Parthenon Investors II, L.P. c  North America  12/31/2018   153,189 
Parthenon Investors III, L.P.  North America  12/31/2018   1,285,123 
Perry Partners International, Inc. c  North America  12/30/2015   7,391 
Platinum Equity Capital Partners II, L.P. c  North America  09/29/2017   94,501 
Providence Equity Partners IV, L.P. c  North America  12/30/2016   13,576 
Providence Equity Partners V, L.P. c  North America  12/30/2016   92,942 
Providence Equity Partners VI, L.P.  North America  12/30/2016   4,788,785 
Providence Equity Partners VII, L.P.  North America  09/29/2017   341,550 
Providence TMT Special Situations Fund L.P. c  North America  12/31/2018   9,151 
Roark Capital Partners II, LP  North America  06/29/2018   937,012 
Roark Capital Partners III LP  North America  06/29/2018   1,221,860 
Roark Capital Partners IV LP  North America  06/29/2018   856,504 
Saw Mill Capital Partners, L.P. c  North America  09/29/2017   61,160 
Silver Lake Partners II, L.P.  North America  12/30/2016   87,129 
Silver Lake Partners III, L.P.  North America  12/31/2018   396,398 
Sixth Cinven Fund (No. 4) Limited Partnership c  Europe  06/28/2019   1,817,733 
SL SPV-2 L.P. c  North America  02/14/2019   553,936 
Summit Partners Private Equity Fund VII-A, L.P. c  North America  12/31/2018   619,863 
Summit Partners Venture Capital Fund II-A, L.P. c  North America  12/31/2018   93,563 
Summit Ventures VI-A, L.P.  North America  12/31/2018   266,678 
Sun Capital Partners IV, LP  North America  12/31/2018   207,428 
Sun Capital Partners V, L.P.  North America  12/31/2018   367,914 
SunTx Capital Partners II, L.P. c  North America  12/31/2019   1,317,927 
TA X, L.P.  North America  12/31/2018   3,431 
TCW/Crescent Mezzanine Partners VB, L.P.  North America  12/30/2015   156,600 
Tennenbaum Opportunities Fund V, LLC  North America  09/29/2017   255,529 
The Veritas Capital Fund III, L.P.  North America  09/29/2017   127,090 
The Veritas Capital Fund V, L.P. c, d, f  North America  06/28/2019   11,723,861 
Thomas H. Lee Equity Fund VI, L.P.  North America  12/29/2017   112,563 
Thomas H. Lee Equity Fund VI (2019), L.P.  North America  05/30/2019   816,847 

 

 

 

Pomona Investment Fund              
Consolidated Schedule of Investments (unaudited) (continued)          
December 31, 2019              
                     

Private Equity Investments a, h (100.18%) (continued)  Geographic  Original    
Secondary Investments (84.73%) (continued)  Region b  Acquisition Date  Fair Value 
Thomas H. Lee Parallel (Cayman) Fund VII, L.P. c  North America  06/29/2018  $4,892,159 
Thomas H. Lee Parallel Fund VI, L.P.  North America  09/28/2018   587,029 
TowerBrook Investors III, L.P. c  North America  12/31/2019   361,790 
TPF II-A, L.P. c  North America  12/31/2019   76,105 
TPG Growth III (A), L.P. c  North America  12/31/2019   2,494,164 
TPG Opportunities Partners III (B), L.P.  North America  06/30/2015   58,000 
TPG Partners V, L.P.  North America  09/29/2017   148,534 
TPG Partners VI, L.P.  North America  09/29/2017   1,880,851 
TPG STAR, L.P. c  North America  09/29/2017   293,188 
Vista Equity Partners Fund V, L.P. c   North America  09/28/2018   4,358,247 
Warburg Pincus Private Equity VIII, L.P.  North America  12/31/2018   1,230 
Waud Capital Partners QP II, L.P. c  North America  12/31/2018   93,108 
Weston Presidio V, L.P. c  North America  12/31/2018   194,231 
Westview Capital Partners II, L.P. c  North America  12/31/2019   752,010 
Wicks Communications & Media Partners III, L.P.  North America  12/31/2018   201,405 
Wind Point Partners VII-B, L.P. c  North America  09/29/2017   611,863 
Total Secondary Investments (84.73%)             153,713,970  
Total Private Equity Investments (Cost $185,733,944) (100.18%)              $ 181,739,237  

 

Short-Term Investments (2.07%)    
Money Market Fund  Fair Value 
Fidelity Investments Money Market Government Portfolio - Class I, 1.47% g  $2,284,993 
JP Morgan U.S. Government Money Market Fund, 1.24% g   1,471,129 
Total Money Market Fund (2.07%)  $3,756,122 
      
Total Short-Term Investments (Cost $3,756,122) (2.07%)  $3,756,122 
      
Total Investments (Cost $189,490,066) (102.25%)  $185,495,359 
      
Liabilities in Excess of Other Assets (-2.25%)   (4,084,380)
      
Shareholders' Capital (100.00%)  $181,410,979 

 

aPrivate Equity Investments are generally offered in private placement transactions and as such are illiquid and generally restricted as to resale. Total cost and fair value of illiquid and restricted securities as of December 31, 2019 was $185,733,944 and $181,739,237, respectively.
bIn the case of Private Equity Investments, geographic region generally refers to where the general partner is headquartered and may be different from where a Private Equity Investment invests or operates.
cNon-income producing.
dThis Private Equity Investment has no redemption provisions, was issued in a private placement transaction and is restricted to resale.
eThis Private Equity Investment makes investments for long-term appreciation including, but not limited to, financial restructurings, leveraged buyouts and other investments in public and private companies.
fThis Private Equity Investment invests primarily in middle-market companies in select target industries.
gThe rate quoted is the annualized seven-day yield of the Money Market Fund at the period end.
hPomona Investment Fund ordinarily acquires portfolios of investments that are comprised of interests in multiple private equity funds (rather than single interests in such funds) and pays a single purchase price for each such portfolio. As a result, the specific acquisition cost allocated to each Private Equity Investment does not necessarily reflect the actual cost of each such investment. As of December 31, 2019, the aggregate cost of each investment restricted to resale was:
$2,445,599, $5,107,609, $610,540, $4,580,000, $292,500, $0, $1,123,925, $0, $1,145,585, $550,765, $5,096,929, $0, $1,966,118, $1,677,361, $49,595, $2,553,060, $1,830,575, $15,435, $2,758,301, $205,122, $583,257, $207,218, $357,733, $612,952, $120,111, $2,569,041, $2,154, $3,942, $2,557,094, $251,299, $504,443, $199,986, $0, $838,848, $1,257,486, $56,735, $953,841, $5,901,668, $450,882, $10,142, $426,158, $4,127,850, $60,663, $4,423, $138,015, $61,981, $6,066,247, $1,011,242, $509,707, $42,457, $223,793, $308,362, $60,632, $688,460, $368,499, $429,596, $1,151,407, $1,882,220, $571,384, $1,831,948, $461,676, $3,401,809, $165,937, $1,309,767, $1,880,528, $175,594, $453,095, $2,917,266, $442,396, $4,399,910, $2,637,709, $1,840,371, $132,056, $261,086, $206,465, $509,313, $1,681,707, $72,969, $79,100, $389,489, $9,209,280, $157,636, $927,987, $6,673,236, $577,980, $218,414, $966,960, $1,731,163, $178,290, $2,274,648, $44,889, $1,441,178, $1,748,634, $508,481, $724,085, $45,011, $453, $4,482, $1,891,297, $388,863, $375,104, $486,438, $495,196, $11,741, $1,513,455, $514,227, $44,743, $2,973, $352,649, $1,336,806, $2,165,099, $749,619, $134,074, $883,437, $4,316,346, $45,195, $247,421, $422,584, $2,720,278, $225,909, $1,028,812, $105,492, $319,961, $19,151, $436,235, $6,123,454, $274,350, $5,693, $842,961, $1,033,068, $840,626, $675,054, $1,415,896, $944,883, $1,601,629, $497,345, $740,922, $77,683, $444,480, $288,355, $457,002, $1,157,673, $1,414, $283,100, $293,899, $364,079, $7,899,664, $154,498, $677,772, $4,574,894, $379,623, $409,125, $19,496, $2,244,417, $46,680, $343,107, $2,192,902, $573,289, $4,952,611, $29,979, $45,465, $100,545, $660,857, $209,529, $358,875, respectively, totaling, $185,733,944.

 

The information regarding the Private Equity Investments, as presented above, has not been prepared, reviewed or approved by any such Private Equity Fund or any general partner, manager or sponsor of such Private Equity Investments or any of their respective affiliates.

 

 

 

 

Pomona Investment Fund (the “Fund”), was organized as a Delaware statutory trust on August 12, 2014 and commenced operations on May 7, 2015. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified, closed-end management investment company. On August 3, 2017, in connection with the Fund’s revolving credit facility, Pomona Investment Fund LLC was organized as a Delaware limited liability company, and is a wholly owned subsidiary of the Fund. All inter-company accounts and transactions relating to Pomona Investment Fund LLC have therefore been eliminated.

 

The Fund has formal valuation policies and procedures (the “Valuation Procedures”), which have been approved by the Board. The Board has delegated direct and oversight responsibilities for making valuation determinations for investments held by the Fund to a valuation committee (the “Valuation Committee”), which draws on the resources and personnel of the Administrator and the Adviser in carrying out its responsibilities. The Board receives valuation reports from the Valuation Committee on a quarterly basis and determines if the Valuation Procedures are operating as expected and the outcomes are reliable.

 

The Valuation Procedures are applied to all of the Fund’s investments, which primarily consists of the following types of private equity investment strategies:

 

•Secondary Investments refer to investments in existing investment funds that are typically acquired in privately negotiated transactions.

 

•Primary Investments refer to investments in newly established private equity funds, which are made during a private equity fund’s initial fundraising period in the form of capital commitments that are then called down by the fund and utilized to finance its investments during a predefined period.

 

•Seasoned Primary Investments refer to primary investments made after an investment fund has already invested a certain percentage of its capital commitments.

 

•Direct Investment/Co-Investment refers to an investment in an operating company by the Fund, as opposed to an investment in an Investment Fund that, in turn, invests in operating companies.

 

All investments are recorded at “Fair Value” in good faith. Fair value is based on actual or estimated market value, with special provisions for assets not having readily available market quotations, and for situations in which market quotations are deemed unreliable. The Private Equity Investments in which the Fund invests normally do not have readily available market prices. Determining the fair value of Private Equity Investments and other assets requires that judgment be applied to the specific facts and circumstances of each asset while seeking to employ a valuation process that is consistently followed. There is not necessarily a single standard for determining fair value of such assets, and determinations of fair value may involve subjective judgments and estimates.

 

The fair values of the Fund’s Private Equity Investments are estimates and are determined by the Adviser in accordance with the Valuation Procedures. If applicable, these estimates are net of management and performance incentive fees or allocations payable pursuant to the respective organizational documents of each Private Equity Investment. Ordinarily, the fair value of a Private Equity Investment held by the Fund is based on the net asset value (“NAV”) of that Private Equity Investment reported by its investment manager. If the Adviser determines that the most recent NAV reported by the investment manager of a Private Equity Investment does not represent the fair value or if the investment manager of a Private Equity Investment fails to report a NAV to the Fund, a fair value determination is made by the Adviser in accordance with the Valuation Procedures. This includes adjusting the NAV provided by an investment manager for other relevant information available at the time the Fund values its portfolio, including capital activity and material events occurring between the reference dates of the investment manager’s valuation and the relevant valuation date.

 

 

 

For investments that do not have readily determinable fair values and NAV cannot be used, such as Direct Investments/Co-Investments, the Fund will review and value such investments using one or more of the following types of analyses:

 

•Market comparable statistics and public trading multiples discounted for illiquidity, minority ownership and/or other factors for investments with similar characteristics.
•Discounted cash flow analysis, including a terminal value or exit multiple.
•The cost of the investment, if the cost is determined to best approximate the fair value of the investment.
•Valuations implied by third-party investment in similar assets or issuers.

 

In accordance with the authoritative guidance on fair value measurements and disclosures under accounting principles generally accepted in the United States of America (“U.S. GAAP”), the Fund discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based on unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurement). The guidance establishes three levels of fair value as listed below.

 

-Level 1 – Inputs that reflect unadjusted quoted prices in active markets for identical assets and liabilities that the Fund has the ability to access at the measurement date

 

-Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, including inputs in markets that are not considered to be active

 

-Level 3 – Inputs that are unobservable

 

The notion of unobservable inputs is intended to allow for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Under Level 3, the owner of an asset must determine fair value based on its own assumptions about what market participants would take into account in determining the fair value of the asset, using the best information available.

 

The inputs or methodology for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement; however, the determination of what constitutes “observable” requires significant judgment by Pomona Management LLC (the “Administrator”). The Administrator considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. Private equity funds are generally restricted securities that are subject to substantial holding periods and restrictions on resale and are not traded in public markets. Accordingly, the Fund would not be able to resell such investments for extended periods, if at all.

 

 

The following table is a summary of information about the levels within the fair valuation hierarchy at which the Fund’s investments are measured as of December 31, 2019:

 

Investments  Level 1   Level 2   Level 3   Total 
Direct Investments/Co-Investments  $-   $-   $2,509,054   $2,509,054 
Short-Term Investments  $3,756,122   $-   $-   $3,756,122 
Total  $3,756,122   $-   $2,509,054   $6,265,176 

 

As the Fund uses the NAV as a practical expedient to determine the fair value of certain Private Equity Investments, these investments have not been classified in the U.S. GAAP fair value hierarchy. As of December 31, 2019, $179,230,183 was fair valued utilizing NAV as practical expedient.

 

During the period ended December 31, 2019, the Fund did not have any significant transfers between any of the levels of the fair value hierarchy. The Fund records all transfers at the end of each reporting period.

 

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining value:

 

 

Beginning balance March 31, 2019

  

 

Transfers into Level 3 during the period

   Transfers out of Level 3 during the period  

 

 

Total realized gain/(loss)

  

 

Total unrealized appreciation /(depreciation)

  

 

 

Net purchases

  

 

 

Net sales

  

 

 

Balance as of December 31, 2019

 
 -    -    -    -   $63,455   $2,445,599    -   $2,509,054 

  

The following table presents additional information about valuation methodologies and inputs used for investments that are measured at fair value and categorized within Level 3 as of December 31, 2019:

 

Fair Value          
December 31,   Valuation  Unobservable 
2019   Methodologies  Input  Input
$2,509,054   Market comparable companies  Enterprise value to EBITDA multiple  8.8x

 

It is the Fund’s intention to meet the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), that are applicable to a regulated investment company (“RIC”). The Fund elected to be a RIC with the filing of its 2015 federal tax return. The Fund intends to continue to operate so as to qualify to be taxed as a RIC under the Code and, as such, to not be subject to federal income tax on the portion of its taxable income and gains distributed to stockholders. To qualify for RIC tax treatment, among other requirements, the Fund is required to distribute at least 90% of its investment company taxable income, as defined by the Code. Accordingly, the Fund intends to distribute its taxable income and net realized gains, if any, to shareholders in accordance with timing requirements imposed by the Code. While the Fund intends to distribute substantially all of its taxable net investment income and capital gains, if any, in a manner necessary to minimize the imposition of a 4% excise tax, there can be no assurance that it will avoid any or all of the excise tax. In such event, the Fund will be liable only for the amount by which it does not meet the foregoing distribution requirements. The Fund has adopted October 31 as its fiscal tax year end.

 

 

 

At December 31, 2019, the federal tax cost of investment securities and unrealized appreciation (depreciation) as of the period end were as follows:

 

Gross unrealized appreciation   $     40,654,965 
Gross unrealized depreciation         (13,659,315) 
Net unrealized appreciation   $    26,995,650 
Cost of investments   $    158,499,709 

 

The difference between cost amounts for financial statement and federal income tax purposes is due primarily to timing differences related to the timing of the recognition of income, gains and losses from the underlying investments for tax purposes.

 

ITEM 2. CONTROLS AND PROCEDURES.

 

(a) The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

ITEM 3. EXHIBITS.

 

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant) Pomona Investment Fund  
     
By (Signature and Title)* /s/ Michael Granoff  
  Michael Granoff, President & Principal Executive Officer  
  (Principal Executive Officer)  
     
Date February 28, 2020  

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)* /s/ Michael Granoff  
  Michael Granoff, President & Principal Executive Officer  
  (Principal Executive Officer)  
     
Date

February 28, 2020

  
     
By (Signature and Title)* /s/ Joel Kress  
  Joel Kress, Treasurer and Principal Financial Officer  
  (Principal Financial Officer)  
     
Date

February 28, 2020

  

 

*Print the name and title of each signing officer under his or her signature.