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[LETTERHEAD OF KPMG]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
MACC Private Equities Inc.
and
The Securities and Exchange Commission:
We have examined management's assertion, included in its representation letter
that MACC Private Equities Inc. (the Company) complied with the provisions of
subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940
as of June 10, 1999, and during the period February 25, 1999, (the date of our
last similar examination) through June 10, 1999, 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 provisions. 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 June 10, 1999, and for the period February 25, 1999, through
June 10, 1999, 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; and
- Reconciliation of all such securities to the books and records of the
Company.
- Test of selected security transactions since the date of our last
report.
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 June 10, 1999, and for the period from February 25, 1999, (prior
report date) through June 10, 1999, 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 and is not intended to be and should not be used
by anyone other than these specified parties.
KPMG LLP
Des Moines, Iowa
June 10, 1999
