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[KPMG LETTERHEAD]
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, 2000, 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, 2000, and during the period
May 12, 2000, (the date of our last similar examination) through September 30,
2000, 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, 2000, and for the period May 12, 2000, through
September 30, 2000, with respect to securities of MACC Private Equities Inc.:
- 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 the provisions of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of September 30, 2000, and for the period from
May 12, 2000, (prior report date) through September 30, 2000, 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.
/s/ KPMG LLP
Des Moines, Iowa
September 30, 2000
