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 July 31, 2002, 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 July 31, 2002, and during the period March 6, 2002
(the date of our last similar examination) through July 31, 2002, 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 conducted in accordance with attestation 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 July 31, 2002 and for the period March 6,
2002 through July 31, 2002, with respect to securities of MACC Private Equities
Inc.:

-  Count and inspection of all securities located in the vault of Wells Fargo
   Bank Iowa, N.A. in Cedar Rapids, Iowa;

-  Reconciliation of all such securities to the books and records of the
   Company; and

-  Confirmation 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 July 31, 2002 and for the period from March
6, 2002 (prior report date) through July 31, 2002, 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
July 31, 2002