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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 May 12, 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 May 12, 2000, and during the period January 7, 2000,
(the date of our last similar examination) through May 12, 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 May 12, 2000, and for the period January 7, 2000, through May
12, 2000, 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 the provisions of subsections (b) and (c) of Rule 17f-2 of the
Investment Company Act of 1940 as of May 12, 2000, and for the period from
January 7, 2000, (prior report date) through May 12, 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
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Des Moines, Iowa
May 12, 2000
