Seward & Kissel LLP
901 K Street, N.W.
Suite 800
Washington, D.C. 20001
Telephone: (202) 737-8833
Facsimile: (202) 737-5184
www.sewkis.com
January 21, 2015
Via EDGAR
Mr. Alberto Zappato
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: AllianceBernstein Cap Fund, Inc. (AllianceBernstein All Market
Alternative Return Portfolio)
Post-Effective Amendment No. 175
File Nos. 2-29901 and 811-01716
Dear Mr. Zappato:
This letter responds to comments of the staff (the "Staff") of the
Securities and Exchange Commission (the "SEC") to the post-effective amendments
to the registration statement filed on Form N-1A of AllianceBernstein All Market
Alternative Return Portfolio (the "Fund"), as provided orally to Anna C. Leist
of this office on December 18, 2014. The Staff's comments and our responses are
discussed below.
Prospectus
----------
General Comments
----------------
Comment 1: Please confirm that all bracketed and missing information will be
included in the Fund's next registration statement filing.
Response: We confirm that all bracketed and missing information will be
included in the Fund's next registration statement filing.
Summary Information
-------------------
Comment 2: Fees and Expenses of the Fund: Please define "Adviser" prior to
its first use in footnote 4 of the fee table.
Response: We will revise the Prospectus in response to this comment.
Comment 3: Fees and Expenses of the Fund: The Principal Strategies section
states that the Fund will take short positions as a principal
strategy. Please confirm to the Staff that expenses associated
with short sales (i.e., dividends paid on stocks sold short) are
included in the fee table.
Response: We confirm that expenses associated with short sales will be
included in the fee table.
Comment 4: Principal Strategies: Please provide disclosure clarifying
the meaning of "volatility derivatives".
Response: We will revise the Prospectus in response to this comment.
Comment 5: Principal Strategies: The Principal Strategies section states that
the Fund will seek to gain exposure primarily to commodities and
commodities-related instruments through investments in
AllianceBernstein All Market Alternative Return Fund (Cayman) Ltd.
(the "Subsidiary"). Please confirm that the Fund complies with the
pronouncements of the Investment Company Act of 1940 ("1940
Act")--Sections 8 and 18, in particular--on an aggregate basis
through investment in the Subsidiary.
Response: We note that the prospectus currently discloses that the
Subsidiary is subject to the same investment policies and
restrictions as the Fund in the "Summary Information-- Principal
Strategies" and the "Additional Information About the Fund's Risks
and Investments--Investments in Wholly-Owned Subsidiary" sections
of the Prospectus and the "Information About The Fund And Its
Investments--Additional Investment Policies and Practices" section
of the Fund's Statement of Additional Information.
We confirm that the Subsidiary will comply with the provisions of
the 1940 Act governing capital structure and leverage requirements
under Section 18 on an aggregate basis with the Fund.
Comment 6: Principal Strategies: Please confirm that the investment adviser
to the Subsidiary complies with the 1940 Act requirements relating
to advisory contracts (Section 15) in accordance with Section
2(a)(20) of the 1940 Act.
Response: While in this case, the Fund has complied with the requirements of
Section 15 of the 1940 Act, we do not believe that the Subsidiary
needs to comply with such requirements. The Subsidiary is a
non-U.S. entity that is a wholly-owned subsidiary of the Fund and
is not, and is not required to be, a registered investment company
under the 1940 Act.
Comment 7: Principal Strategies: Please confirm that the Subsidiary complies
with the provisions of Section 17 (affiliated transactions and
custody). Please also identify the custodian to the Subsidiary.
Response: We confirm that the Subsidiary will comply with the provisions
relating to affiliated transactions under Section 17 of the 1940
Act and the rules thereunder, and the custody provisions of
Section 17(f). The "Additional Information About the Fund's Risks
and Investments--Investments in Wholly-Owned Subsidiary" section
of the Prospectus discloses that "[t]he Subsidiary will also be
subject to the same valuation, brokerage, and compliance policies
and procedures as the Fund." State Street Bank and Trust Company
is the custodian of the Fund and the Subsidiary.
Comment 8: Please confirm the following: 1) that expenses associated with the
Subsidiary are included in the Fund's fee table; 2) that the
Subsidiary and its Board of Directors agree to designate an agent
for service of process in the U.S.; 3) that the Subsidiary and its
Board of Directors agree to inspection of the Subsidiary's books
and records by the Staff; and 4) that the Subsidiary's Board of
Directors will sign the Fund's registration statement.
Response: We confirm 1) that expenses associated with the Subsidiary will be
included in the Fund's fee table; 2) that the Subsidiary and its
Board of Directors agree to designate an agent for service of
process in the U.S.; 3) that the Subsidiary and its Board of
Directors agree to inspection of the Subsidiary's books and
records by the Staff; and 4) that the Subsidiary's Board of
Directors did, and will continue to, sign the Fund's registration
statements.
Additional Information About the Fund's Risks and Investments
-------------------------------------------------------------
Comment 9: Regarding total return swaps, please acknowledge to the Staff that
the Fund is aware of the provisions on asset coverage discussed in
Investment Company Act Release 10666 (April 18, 1979) ("Release
10666"), are familiar with the Concept Release relating to these
issues (Investment Company Act Release 29776 (August 31, 2011)
("Release 29776")) and are aware that the SEC may issue further
guidance on such transactions that could affect the Fund's
operations.
Response: We acknowledge that the Fund is aware of the provisions on asset
coverage discussed in Release 10666, is familiar with Release
29776 relating to these issues and is aware that further SEC
guidance on total return swaps could affect the Fund's operations.
Comment 10: If the Fund invests in credit default swap agreements ("CDS"), or
intends to write CDS, please confirm to the Staff that, in case of
default, the Fund will cover the full notional value of the CDS it
writes.
Response: The Fund covers its positions in accordance with the 1940 Act, the
rules thereunder and SEC and Staff interpretative guidance.
Investing In the Fund
---------------------
Comment 11: How the Fund Values its Shares: The Prospectus states that the
Fund may value many of its foreign equity securities using fair
value prices based on third-party vendor modeling tools. Please
provide disclosure that such third party vendors operate under
procedures adopted by, and under the supervision, of the Fund's
Board of Directors.
Response: We confirm, as is currently disclosed in the Prospectus, that fair
valuations are determined in accordance with procedures
established by and under the general supervision of the Board,
which include the use of fair value prices based on third-party
vendor modeling tools.
* * *
We have been authorized to acknowledge that (i) the Fund is responsible
for the adequacy and accuracy of the disclosures in the filing; (ii) Staff
comments or changes to disclosure in response to Staff comments in the filing
reviewed by the Staff do not foreclose the SEC from taking any action with
respect to the filing; and (iii) the Fund may not assert Staff comments as a
defense in any proceedings initiated by the SEC or any person under the federal
securities laws of the United States.
If you have any additional comments or questions, please contact Kathleen
Clarke or the undersigned at (202) 737-8833.
Sincerely,
/s/ Anna C. Leist
-----------------
Anna C. Leist
cc: Emilie D. Wrapp, Esq.
Eric Freed, Esq.
Stephen J. Laffey, Esq.
Kathleen K. Clarke, Esq.