<PAGE> 1
[LETTERHEAD OF KPMG PEAT MARWICK LLP]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
MACC Private Equities Inc.
and
The Securities and Exchange Commission:
We have examined management's assertion (attachment 1) about MACC Private
Equities Inc.'s (the Company's) compliance with certain rules under the
Investment Company Act of 1940 as of March 3, 1998, and during the period
September 30, 1997, (the date of our last similar examination) through March 3,
1998, included in the accompanying Management Statement Regarding Compliance
with Certain Provisions of the Investment Company Act of 1940. Management is
responsible for the Company's compliance with those requirements. Our
responsibility is to express an opinion on management's assertion about the
Company's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Company's compliance with those
requirements and performing such other procedures as we considered necessary
in the circumstances. Included among our procedures were the following tests
performed as of March 3, 1998, and for the period September 30, 1997, through
March 3, 1998, with respect to securities of MACC Private Equities Inc.,
without prior notice to management:
- Count and inspection of all securities located in the vault of Brenton
Bank and Trust Company in Cedar Rapids, Iowa;
- Confirmation of all securities held by the following institutions in book
entry form: Farmers and Merchants Savings Bank of Manchester, Iowa,
Firstar Investment Services of Milwaukee, Wisconsin, and Securities
Corporation of Iowa of Cedar Rapids, Iowa;
- Confirmation of all certificates of deposit held by other institutions;
and
- Reconciliation of all such securities to the books and records of the
Company.
We believe that our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination on the Company's
compliance with specified requirements.
In our opinion, management's assertion that MACC Private Equities Inc. was in
compliance with certain provisions of Rule 17f-2 of the Investment Company Act
of 1940 as of September 30, 1997, and for the period from July 23, 1997, (prior
report date) through September 30, 1997, is fairly stated, in all material
respects.
This report is intended solely for the information and use of management of
MACC Private Equities Inc. and the Securities and Exchange Commission and
should not be used for any other purpose.
/s/ KPMG Peat Marwick LLP
Des Moines, Iowa
March 3, 1998
<PAGE> 2
------------------------
WASHINGTON, D.C. 20549 OMB APPROVAL
------------------------
OMB Number: 3235-0360
FORM N-17f-2 Expires: July 31, 1991
Estimated average burden
hours per response 0.05
------------------------
Certificate of Accounting of Securities and Similar
Investments in the Custody of
Management Investment Companies
Pursuant to Rule 17f-2 (17 CFR 270.17f-2)
<TABLE>
- -------------------------------------------------------------------------------
<S> <C> <C>
1. Investment Company Act File Number: Date examination completed:
801-812-9028 March 3, 1998
- -------------------------------------------------------------------------------
2. State identification number:
--------------------------------------------------------------------
AL AK AZ AR CA CO
--------------------------------------------------------------------
CT DE DC FL GA HI
--------------------------------------------------------------------
ID IL IN IA KS KY
--------------------------------------------------------------------
LA ME MD MA MI MN
--------------------------------------------------------------------
MS MO MT NE NV NH
--------------------------------------------------------------------
NJ NM NY NC ND OH
--------------------------------------------------------------------
OK OR PA RI SC SD
--------------------------------------------------------------------
TN TX UT VT VA WA
--------------------------------------------------------------------
WV WI WY PUERTO RICO
--------------------------------------------------------------------
Other (specify):
- -------------------------------------------------------------------------------
3. Exact name of investment company as specified in registration
statement:
MACC Private Equities Inc.
- -------------------------------------------------------------------------------
4. Name under which business is conducted, if different from above:
- -------------------------------------------------------------------------------
5. Address of principal place of business (number, street, city, state,
zip code):
101 Second Street SE, Suite 800, Cedar Rapids, Iowa 52401
- -------------------------------------------------------------------------------
</TABLE>
INSTRUCTIONS
This Form must be completed by investment companies that have custody of
securities or similar investments.
INVESTMENT COMPANY
1. All items must be completed by the investment company.
2. Give this Form to the independent public accountant who, in compliance with
Rule 17f-2 under the Act and applicable state law, examines securities and
similar investments in the custody of the investment company.
ACCOUNTANT
3. Submit this Form to the Securities and Exchange Commission and appropriate
state securities administrators when filing the certificate of accounting
required by Rule 17f-2 under the Act and applicable state law. File the
original and one copy with the Securities and Exchange Commission's principal
office in Washington, D.C., one copy with the regional office for the region in
which the investment company's principal business operations are conducted, and
one copy with the appropriate state administrator(s), if applicable.
THIS FORM MUST BE GIVEN TO YOUR INDEPENDENT PUBLIC ACCOUNTANT
Note: The estimated average burden hours are made solely for purposes of the
Paperwork Reduction Act, and are not derived from a comprehensive or even a
representative survey or study of the costs of SEC rules and forms. Direct any
comments concerning the accuracy of the estimated average burden hours for
compliance with SEC rules and forms to Kenneth A. Fogash, Deputy Executive
Director, U.S. Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and Gary Waxman, Clearance Officer, Office of Management
and Budget, Room 3208 New Executive Office Building, Washington, D.C. 20503.
SEC 2198 (8/89)
<PAGE> 3
Attachment 1
MACC PRIVATE EQUITIES INC.
--------------------------
Management Statement Regarding Compliance with
Certain Provisions of the Investment Company Act of 1940
Management believes that MACC Private Equities Inc. was in compliance with
the provisions of Rule 17f-2 of the Investment Company Act of 1940 as of March
3, 1998 and during the period from September 30, 1997 through March 3, 1998,
with respect to securities reflected in the investment accounts of MACC Private
Equities Inc.
MACC Private Equities Inc.
By: /s/ David R. Schroder
----------------------------
David R. Schroder, President
March 3, 1998
101 Second Street SE, Suite 800 - Cedar Rapids, Iowa 52401
- (319) 363-8249 - (319) 363-9683 Fax
