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KPMG {LOGO}
2500 Ruan Center
666 Grand Avenue
Des Moines, IA 50309
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
dated September 30, 1999, 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 September 30, 1999, and during the period
June 10, 1999, (the date of our last similar examination) through September 30,
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 September 30, 1999, and for the period June 10, 1999, through
September 30, 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 September 30, 1999, and for the period from June 10, 1999, (prior
report date) through September 30, 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 {LOGO}
Des Moines, Iowa
September 30, 1999
