BPC §23405.4: (a) The department is not required to qualify for a license a person who is an investor in a private equity fund that holds an interest in a license, provided all of the following conditions are satis

(a) The department is not required to qualify for a license a person who is an investor in a private equity fund that holds an interest in a license, provided all of the following conditions are satisfied: (1) The private equity fund’s interest in the license is limited to a passive investment, so that neither the private equity fund nor any manager, employee, or agent of the private equity fund has any involvement in, or control over, the management of the licensed business or of the licensee. (2) The private equity fund advisers are registered under the federal Investment Advisers Act of 1940, and the private equity fund advisers are subject to, and comply with, Section 275.204(b)-1 of Title 17 of the Code of Federal Regulations. (3) An investor shall not, directly or indirectly, hold more than 10-percent interest in the private equity fund. (4) An investor in the private equity fund shall not have any control, directly or indirectly, over the investment decisions of the private equity fund. (b) For purposes of this section, private equity fund means an investment company that makes investments in equity or debt securities of another company that does not provide investors with redemption rights in the ordinary course. A private equity fund does not include a hedge fund, liquidity fund, real estate fund, securitized asset fund, or venture capital fund. (c) The department may require the manager of the private equity fund to execute an affidavit confirming compliance with the requirements of this section. If the manager does not have personal knowledge of any of the facts necessary to execute the affidavit, the manager shall make a diligent inquiry and may thereafter execute the affidavit upon information and belief. The manager of the private equity fund shall promptly notify the department in writing if any of the facts attested to change. (d) This section is not intended to allow a person, by reason of the person’s investment in a private equity fund, to hold an interest in a license issued by the department if that interest is not otherwise permitted under this division.