DRIEHAUS MUTUAL FUNDS, 497, 1999-01-25

DRIEHAUS MUTUAL FUNDS
497, 1999-01-25
PREPACKAGED SOFTWARE

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<PAGE> 1

DRIEHAUS INTERNATIONAL LOGO
DRIEHAUS MUTUAL FUNDS
25 East Erie Street
Chicago, Illinois 60611
1-800-560-6111

DRIEHAUS INTERNATIONAL GROWTH FUND
DRIEHAUS INTERNATIONAL DISCOVERY FUND
DRIEHAUS EUROPEAN OPPORTUNITY FUND
DRIEHAUS ASIA PACIFIC GROWTH FUND
DRIEHAUS EMERGING MARKETS GROWTH FUND
---------------------------------------------------------

PROSPECTUS

December 23, 1998

As Supplemented January 25, 1999

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL AND COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 2

- --------------------------------------------------------------------------------

TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
Overview.................................................... 1
Driehaus International Growth Fund Summary.................. 2
Driehaus International Discovery Fund Summary............... 6
Driehaus European Opportunity Fund Summary.................. 9
Driehaus Asia Pacific Growth Fund Summary................... 11
Driehaus Emerging Markets Growth Fund Summary............... 14
The Funds................................................... 18
Investment Philosophy.................................. 18
Investment Objectives and Principal Investment
Strategies........................................... 18
Driehaus International Growth Fund............... 18
Driehaus International Discovery Fund............ 19
Driehaus European Opportunity Fund............... 20
Driehaus Asia Pacific Growth Fund................ 20
Driehaus Emerging Markets Growth Fund............ 21
Related Risks.......................................... 22
Portfolio Investments and Other Risk Considerations.... 24
Management of the Funds..................................... 28
Shareholder Information..................................... 30
Net Asset Value........................................ 30
Opening an Account..................................... 30
How to Purchase Shares................................. 30
Purchases Through Third Parties........................ 31
How to Redeem Shares................................... 32
Additional Redemption Policies......................... 32
Execution of Requests.................................. 33
Dividend and Account Policies.......................... 33
Distributions and Taxes................................ 33
</TABLE>
<PAGE> 3

- --------------------------------------------------------------------------------

OVERVIEW
- --------------------------------------------------------------------------------

GOAL OF THE DRIEHAUS MUTUAL FUNDS

Each of the Driehaus Mutual Funds strives to increase the value of your
investment (capital appreciation). In other words, each Fund tries to buy stocks
with a potential to appreciate in price. Each Fund has its own strategy for
achieving this goal with a related risk/return profile but employs common growth
techniques. Because stock markets in general, and the individual securities
purchased by the Funds, go down in price as well as up, you may lose money
investing in these Funds. So please review all the disclosure information
carefully.

WHO MAY WANT TO INVEST IN THE FUNDS

These international growth funds may be an appropriate investment for you if
you:

- Are investing with long-term goals in mind (such as retirement or funding
a child's education, which may be many years in the future)

- Are willing to accept higher short-term risk in exchange for potential
higher long-term returns

- Are not looking for current income

- Want to diversify your portfolio

- Want to complement your U.S. holdings through equity investments in
countries outside the United States

- Can tolerate the increased price volatility, currency fluctuations and
other risks associated with non-U.S. securities

- Are prepared to receive taxable long-term and short-term capital gains

THE DRIEHAUS MUTUAL FUNDS ADVISER

Each of the Driehaus Mutual Funds is managed by Driehaus Capital Management,
Inc., a registered investment adviser founded in 1982. The Adviser currently
manages more than $2 billion.
<PAGE> 4

- --------------------------------------------------------------------------------

DRIEHAUS INTERNATIONAL GROWTH FUND SUMMARY
- --------------------------------------------------------------------------------

GOAL AND STRATEGY

The Driehaus International Growth Fund seeks to maximize capital appreciation.
To do so, the Fund invests in the stocks of foreign companies. Under normal
market conditions, the Fund invests substantially all (no less than 65%) of its
assets in at least three countries other than the United States. The Fund may
invest a substantial portion of its assets in emerging markets from time to
time.

The Fund uses a growth style of investment by investing in stocks which the
Adviser believes have some or all the following characteristics:

- Demonstrated sales growth and earnings

- Improved sales outlook or opportunities

- Dominant products or market niches

- Cost restructuring programs which are expected to positively affect
company earnings

- Increased order backlogs, new product introductions, or industry
developments which are expected to positively affect company earnings

The Adviser also considers macroeconomic information and technical information
in evaluating stocks and countries for investment.

PORTFOLIO SECURITIES

The Fund invests primarily in the equity securities of foreign companies. In
general, the Fund invests in companies with market capitalization of over $300
million and will not invest in securities of issuers with market capitalizations
of less than $200 million.

PRINCIPAL RISK FACTORS

This is an international fund and therefore all the risks of foreign investment
are present:

- Fluctuation in exchange rates of foreign currencies and risks of
devaluation

- Less complete and reliable information about foreign companies

- Less government supervision of some foreign securities markets

- Restrictions on foreign investment and repatriation of capital

- Less liquidity

- Greater volatility

- Emerging market risk such as limited trading volume, expropriation,
devaluation or other adverse political or social developments

- Political instability

- Foreign economic problems like the Asian and Emerging Market crises

- The new "Euro" and the uncertainty of the readiness of the financial
markets for this new currency

- Lower responsiveness of foreign management to shareholder concerns

This is a nondiversified fund; compared to other funds, this Fund may invest a
greater percentage of assets in a particular issuer or a small number of
issuers. As a consequence, the Fund may be subject to greater risks and larger
losses than diversified funds.

2
<PAGE> 5

- --------------------------------------------------------------------------------

DRIEHAUS INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------

PERFORMANCE

The Fund's returns will vary, and you could lose money. The information below
provides an illustration of how the Fund's performance has varied over time. The
bar chart depicts the change in the Fund's performance from year-to-year during
the years indicated. The table compares the Fund's average annual total returns
for the periods indicated to a broad-based securities market index. The Fund's
past performance does not necessarily indicate how it will perform in the
future.

ANNUAL RETURNS FOR THE YEARS ENDED DECEMBER 31*
PERFORMANCE CHART

<TABLE>
<CAPTION>
ANNUAL RETURNS FOR THE YEARS ENDED DECEMBER
31*
-------------------------------------------
<S> <C>
'1991' 21.70
'1992' 8.59
'1993' 73.71
'1994' -13.61
'1995' 18.08
'1996' 24.47
'1997' 14.39
</TABLE>

As of September 30, 1998, the Fund's year-to-date return was 9.30%. During the
period shown in the bar chart, the highest return for a quarter was 26.11%
(quarter ended 12/31/93) and the lowest return for a quarter was -14.83%
(quarter ended 3/31/94).

AVERAGE ANNUAL TOTAL RETURNS
(periods ended December 31, 1997)

<TABLE>
<CAPTION>
INTERNATIONAL EAFE
GROWTH FUND* INDEX**
------------- -------
<S> <C> <C>
1 Year................................. 14.39% 1.78%
5 Years................................ 20.33% 11.39%
Since Inception (July 1, 1990)......... 15.74% 5.28%
</TABLE>

- -------------------
* The Driehaus International Growth Fund's performance data includes the
restated performance of the Driehaus International Large Cap Fund, L.P. (the
"Partnership") for the periods before the Fund's registration statement
became effective on October 28, 1996. The Partnership, which was established
on July 1, 1990, was managed following substantially the same objective,
policies and philosophies as are currently followed by the Driehaus
International Growth Fund. The Driehaus International Growth Fund succeeded
to the Partnership's assets on October 28, 1996. The Partnership was not
registered under the Investment Company Act of 1940 ("1940 Act") and thus was
not subject to certain investment and operational restrictions that are
imposed by the 1940 Act. If the Partnership had been registered under the
1940 Act, its performance may have been adversely affected. The Partnership's
performance was restated to reflect estimated expenses of the Driehaus
International Growth Fund.

** The Morgan Stanley Capital International Europe, Australia and Far East Index
(the "EAFE Index"). The EAFE Index is a widely recognized benchmark of
non-U.S. stock markets. It is an unmanaged index composed of a sample of
companies representative of the market structure of 17 European and Pacific
Basin countries.

3
<PAGE> 6

- --------------------------------------------------------------------------------

DRIEHAUS INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------

INVESTOR EXPENSES

SHAREHOLDER FEES. All Driehaus Mutual Funds are no-load investments, so you will
not pay any shareholder fees (such as sales loads, redemption fees or exchange
fees) when you buy or sell shares of the Fund. However, there is a $25 charge
for payments of redemption proceeds by wire (which may be waived for certain
financial institutions).

ANNUAL FUND OPERATING EXPENSES are paid out of the Fund's assets and include
fees for portfolio management, maintenance of shareholder accounts, shareholder
servicing, accounting and other services. You do not pay these fees directly
but, as the Example shows, these costs are borne indirectly by shareholders.

FEES AND EXPENSES OF THE FUND. This table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.

<TABLE>
<S> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge Imposed on Purchases................... None
Maximum Deferred Sales Charge............................... None
Maximum Sales Charge Imposed on Reinvested Dividends........ None
Redemption Fee.............................................. None
Exchange Fee................................................ None
Maximum Account Fee......................................... None

ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from Fund assets)
Management Fee.............................................. 1.50%
Other Expenses.............................................. 0.38%
----
Total Annual Fund Operating Expenses........................ 1.88%
====
</TABLE>

EXAMPLE: This Example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds. The Example assumes
that you invest $10,000 in the Fund for the time periods indicated and then
redeem all of your shares at the end of those periods. The Example also assumes
that your investment has a 5% return each year and that the Fund's operating
expenses remain the same. Although your actual costs may be higher or lower,
based on these assumptions your costs would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
International Growth Fund................................... $197 $610 $1,046 $2,257
</TABLE>

4
<PAGE> 7

- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS -- DRIEHAUS INTERNATIONAL GROWTH FUND
- --------------------------------------------------------------------------------

This table is intended to help you understand the Fund's financial performance
for the period of the Fund's operations. Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the Fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by Arthur Andersen LLP, whose report, along with the Fund's
financial statements, are included in the annual report, which is available upon
request.

<TABLE>
<CAPTION>
PERIOD FROM
OCTOBER 28, 1996(1)
YEAR ENDED THROUGH
AUGUST 31, 1998 AUGUST 31, 1997
--------------- -------------------
<S> <C> <C>
Net asset value, beginning of period........................ $ 11.90 $ 10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss.................................... (0.07) (0.05)
Net gains on investments (both realized and
unrealized).......................................... 1.77 1.95
-------- --------
Total income from investment operations........... 1.70 1.90
-------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income................... 0.00 0.00
Distributions from capital gains....................... (1.21) 0.00
Returns of capital..................................... 0.00 0.00
-------- --------
Total distributions............................... (1.21) 0.00
-------- --------
Net asset value, end of period.............................. $ 12.39 $ 11.90
======== ========
Total return................................................ 16.50 % 19.00 %(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)...................... $229,088 $180,545
Ratio of expenses to average net assets(4)................ 1.88 % 2.11 %(3)
Ratio of net investment loss to average net assets(4)..... (0.54)% (0.67)%(3)
Portfolio turnover rate................................... 219.78 % 380.02 %(2)
</TABLE>

- -------------------
(1) Commencement of operations.

(2) Not annualized.

(3) Such ratios are after transfer agent fee waivers. PFPC Inc. the
administrative agent and transfer agent, waived a portion of its fees.

(4) Annualized.

5
<PAGE> 8

- --------------------------------------------------------------------------------

DRIEHAUS INTERNATIONAL DISCOVERY FUND SUMMARY
- --------------------------------------------------------------------------------

GOAL AND STRATEGY

The Driehaus International Discovery Fund seeks to maximize capital
appreciation. To do so, the Fund generally invests in the stocks of foreign
companies with market capitalizations of less than $1 billion. Under normal
market conditions, the Fund invests substantially all (no less than 65%) of its
assets in at least three different countries other than the United States. The
Fund may invest a substantial portion of its assets in emerging markets from
time to time.

The Fund uses a growth style of investment by investing in stocks which the
Adviser believes have some or all of the following characteristics:

- Demonstrated sales growth and earnings

- Improved sales outlook or opportunities

- Dominant products or market niches

- Cost restructuring programs which are expected to positively affect
company earnings

- Increased order backlogs, new product introductions, or industry
developments which are expected to positively affect company earnings

The Adviser also considers macroeconomic information and technical information
in evaluating stocks and countries for investment.

PORTFOLIO SECURITIES

The Fund invests primarily in the equity securities of small foreign companies.
In general, the Fund invests in companies with market capitalization of less
than $1 billion. The Fund may purchase companies with less than three years
trading history.

PRINCIPAL RISK FACTORS

This is an international fund and therefore all the risks of foreign investment
are present:

- Fluctuation in exchange rates of foreign currencies and risks of
devaluation

- Less complete and reliable information about foreign companies

- Less government supervision of some foreign securities markets

- Restrictions on foreign investment and repatriation of capital

- Less liquidity

- Greater volatility

6
<PAGE> 9

- --------------------------------------------------------------------------------

DRIEHAUS INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------

- Political instability

- Emerging market risk such as limited trading volume, expropriation,
devaluation or other adverse political or social developments

- Foreign economic problems like the Asian and Emerging Market crises

- The new "Euro" and the uncertainty of the readiness of the financial
markets for this new currency

- Lower responsiveness of foreign management to shareholder concerns

Some emerging markets are currently experiencing a currency crisis and there is
some risk of a spreading crisis. This crisis has caused some countries to
institute currency reform measures which inhibit the free flow of currency out
of their country.

The Fund invests in companies that are smaller, less established, with less
liquid markets for their stock and therefore may be riskier investments.

7
<PAGE> 10

- --------------------------------------------------------------------------------

DRIEHAUS INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------

INVESTOR EXPENSES

FEES AND EXPENSES OF THE FUND. This table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.

<TABLE>
<S> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge Imposed on Purchases................. None
Maximum Deferred Sales Charge............................. None
Maximum Sales Charge Imposed on Reinvested Dividends...... None
Redemption Fee............................................ None
Exchange Fee.............................................. None
Maximum Account Fee....................................... None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from Fund assets)
Management Fee............................................ 1.50 %
Other Expenses............................................ 2.00 %*
-----
Total Annual Fund Operating Expenses...................... 3.50 %*
Accounting, Administrative and Transfer Agency
Contractual Fee Waivers............................... (1.00)%
-----
Net Expenses........................................... 2.50 %
=====
</TABLE>

- -------------------
* The Adviser has agreed to absorb other operating expenses to the extent
necessary to ensure that total annual fund operating expenses will not exceed
2.50% of average net assets during 1999. Therefore, actual "Other Expenses"
and "Total Fund Operating Expenses" are expected to be 1.00% and 2.50%,
respectively, for 1999.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
International Discovery Fund................................ $368 $1,117
</TABLE>

8
<PAGE> 11

- --------------------------------------------------------------------------------

DRIEHAUS EUROPEAN OPPORTUNITY FUND SUMMARY
- --------------------------------------------------------------------------------

GOAL AND STRATEGY

The Driehaus European Opportunity Fund seeks to maximize capital appreciation.
To do so, the Fund invests in the stocks of European companies. Under normal
market conditions, the Fund invests substantially all (no less than 65%) of its
assets in European countries. The Fund may invest a substantial portion of its
assets in emerging markets.

The Fund uses a growth style of investment by investing in stocks which the
Adviser believes have some or all of the following characteristics:

- Demonstrated sales growth and earnings

- Improved sales outlook or opportunities

- Dominant products or market niches

- Cost restructuring programs which are expected to positively affect
company earnings

- Increased order backlogs, new product introductions, or industry
developments which are expected to positively affect company earnings

The Adviser also considers macroeconomic information and technical information
in evaluating stocks and countries for investment.

PORTFOLIO SECURITIES

The Fund invests primarily in the equity securities of European companies.

PRINCIPAL RISK FACTORS

This is an international fund and therefore all the risks of foreign investment
are present:

- Fluctuation in exchange rates of foreign currencies

- Less complete and reliable information about foreign companies

- Less government supervision of some foreign securities markets

- Restrictions on foreign investment and repatriation of capital

- Less liquidity

- Greater volatility

- Political instability

- Emerging market risk such as limited trading volume, expropriation,
devaluation or other adverse political or social developments

- Foreign economic problems like the Asian and Emerging Market crises

- The new "Euro" and the uncertainty of the readiness of the financial
markets for this new currency

- Lower responsiveness of foreign management to shareholder concerns

9
<PAGE> 12

- --------------------------------------------------------------------------------

DRIEHAUS EUROPEAN OPPORTUNITY FUND
- --------------------------------------------------------------------------------

INVESTOR EXPENSES

FEES AND EXPENSES OF THE FUND. This table describes the fees and expenses that
you may pay if you buy or hold shares of the Fund.

<TABLE>
<S> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge Imposed on Purchases................. None
Maximum Deferred Sales Charge............................. None
Maximum Sales Charge Imposed on Reinvested Dividends...... None
Redemption Fee............................................ None
Exchange Fee.............................................. None
Maximum Account Fee....................................... None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from Fund assets)
Management Fee............................................ 1.50 %
Other Expenses............................................ 6.10 %*
-----
Total Annual Fund Operating Expenses...................... 7.60 %*
Accounting, Administrative and Transfer Agency
Contractual Fee Waivers............................... (3.60)%
-----
Net Expenses........................................... 4.00 %
=====
</TABLE>

- -------------------
* The Adviser has agreed to absorb other operating expenses to the extent
necessary to ensure that the total fund operating expenses will not exceed
2.10% of average net assets during 1999. Therefore, actual "Other Expenses"
and "Total Fund Operating Expenses" are expected to be 0.60% and 2.10%,
respectively, for 1999.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
European Opportunity Fund................................... $798 $2,323
</TABLE>

10
<PAGE> 13

- --------------------------------------------------------------------------------

DRIEHAUS ASIA PACIFIC GROWTH FUND SUMMARY
- --------------------------------------------------------------------------------

GOAL AND STRATEGY

The Driehaus Asia Pacific Growth Fund seeks to maximize capital appreciation. To
do so, the Fund invests in the stocks of Asia Pacific companies. Under normal
market conditions, the Fund invests substantially all (no less than 65%) of its
assets in Asia Pacific companies. The Fund invests a substantial portion of its
assets in emerging markets.

The Fund uses a growth style of investment by investing in stocks which the
Adviser believes have some or all of the following characteristics:

- Demonstrated sales growth and earnings

- Improved sales outlook or opportunities

- Dominant products or market niches

- Cost restructuring programs which are expected to positively affect
company earnings

- Increased order backlogs, new product introductions, or industry
developments which are expected to positively affect company earnings

The Adviser also considers macroeconomic information and technical information
in evaluating stocks and countries for investment.

PORTFOLIO SECURITIES

The Fund invests primarily in the equity securities of Asia Pacific companies.

PRINCIPAL RISK FACTORS

This is an international fund and therefore all the risks of foreign investment
are present:

- Fluctuation in exchange rates of foreign currencies and risks of
devaluation

- Less complete and reliable information about foreign companies

- Less government supervision of some foreign securities markets

- Restrictions on foreign investment and repatriation of capital

- Less liquidity

- Greater volatility

- Political instability

- Emerging market risk such as limited trading volume, expropriation,
devaluation or other adverse political or social developments

- Foreign economic problems like the Asian and Emerging Market crises

- Lower responsiveness of foreign management to shareholder concerns

Some Asia-Pacific markets are currently experiencing a currency crisis, and
there is some risk of a spreading crisis. This crisis has caused some countries
to institute currency reform measures which inhibit the free flow of currency
out of their country.

11
<PAGE> 14

- --------------------------------------------------------------------------------

DRIEHAUS ASIA PACIFIC GROWTH FUND
- --------------------------------------------------------------------------------

INVESTOR EXPENSES

FEES AND EXPENSES OF THE FUND. This table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.

<TABLE>
<S> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge Imposed on Purchases................. None
Maximum Deferred Sales Charge............................. None
Maximum Sales Charge Imposed on Reinvested Dividends...... None
Redemption Fee............................................ None
Exchange Fee.............................................. None
Maximum Account Fee....................................... None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from Fund assets)
Management Fee............................................ 1.50 %
Other Expenses............................................ 10.09 %*
-----
Total Annual Fund Operating Expenses...................... 11.59 %*
Accounting, Administrative and Transfer Agency
Contractual Fee Waivers............................... (5.26)%
-----
Net Expenses........................................... 6.33 %
=====
</TABLE>

- -------------------
* The Adviser has agreed to absorb other operating expenses to the extent
necessary to ensure that total annual fund operating expenses will not exceed
2.95% of average net assets during 1998 and 1999. Therefore, actual "Other
Expenses" and "Total Fund Operating Expenses" were 1.45% and 2.95%,
respectively.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Asia Pacific Growth Fund.................................... $1,217 $3,395 $5,255 $8,847
</TABLE>

12
<PAGE> 15

- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS -- DRIEHAUS ASIA PACIFIC GROWTH FUND
- --------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's
financial performance for the period of the Fund's operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by Arthur Andersen LLP, whose
report, along with the Fund's financial statements, are included in the annual
report, which is available upon request.

<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 31, 1997(4)
THROUGH
SEPTEMBER 30, 1998
--------------------
<S> <C>
Net asset value, beginning of period........................ $ 10.00
LOSS FROM INVESTMENT OPERATIONS:
Net investment loss.................................... (0.02)
Net loss on investments (both realized and
unrealized)........................................... (1.68)
--------
Total loss from investment operations............. (1.70)
--------
LESS DISTRIBUTIONS:
Dividends from net investment income................... 0.00
Distributions from capital gains....................... 0.00
Returns of capital..................................... 0.00
--------
Total distributions............................... 0.00
--------
Net asset value, end of period.............................. $ 8.30
========
Total return................................................ (17.00)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)...................... $ 3,582
Ratio of expenses to average net assets................... 2.95 %(1)(3)
Ratio of net investment loss to average net assets........ 0.45 %(1)(3)
Portfolio turnover rate................................... 283.59 %(2)
</TABLE>

- -------------------------
(1) Annualized.

(2) Not annualized.

(3) Such ratios are after administrative agent and transfer agent waivers and
Adviser expense reimbursements. PFPC Inc., the administrative agent and
transfer agent, waived a portion of its fees. The Adviser agreed to absorb
other operating expenses to the extent necessary to ensure that the total
fund operating expenses (other than interest, taxes, brokerage commissions
and other portfolio transaction expenses, capital expenditures and
extraordinary expense) will not exceed 2.95% of the net assets of the
Driehaus Asia Pacific Growth Fund for the first twenty-four months of its
operations.

(4) Commencement of operations.

13
<PAGE> 16

- --------------------------------------------------------------------------------

DRIEHAUS EMERGING MARKETS GROWTH FUND SUMMARY
- --------------------------------------------------------------------------------

GOAL AND STRATEGY

The Driehaus Emerging Markets Growth Fund strives to maximize capital
appreciation. To do so, the Fund invests in the stocks of companies in emerging
markets around the world. Under normal market conditions, the Fund invests
substantially all (no less than 65%) of its assets in emerging markets
companies.

The Fund uses a growth style of investment by investing in stocks which the
Adviser believes have some or all the following characteristics:

- Demonstrated sales growth and earnings

- Improved sales outlook or opportunities

- Dominant products or market niches

- Cost restructuring programs which are expected to positively affect
company earnings

- Increased order backlogs, new product introductions, or industry
developments which are expected to positively affect company earnings

The Adviser also considers macroeconomic information and technical information
in evaluating stocks and countries for investment.

PORTFOLIO SECURITIES

The Fund invests primarily in the equity securities of companies in emerging
markets around the world.

PRINCIPAL RISK FACTORS

This is an international fund and therefore all the risks of foreign investment
are present:

- Fluctuation in exchange rates of foreign currencies and risks of
devaluation

- Less complete and reliable information about foreign companies

- Less government supervision of some foreign securities markets

- Restrictions on foreign investment and repatriation of capital

- Less liquidity

- Greater volatility

- Political instability

14
<PAGE> 17

- --------------------------------------------------------------------------------

DRIEHAUS EMERGING MARKETS GROWTH FUND
- --------------------------------------------------------------------------------

- Emerging market risk such as limited trading volume, expropriation,
devaluation or other adverse political or social developments

- Dependence of emerging market companies upon commodities which may be
subject to economic cycles

- Attempted control of commodity cycles by emerging market governments,
which may result in shortages or severe price fluctuation

- Foreign economic problems like the Asian and Emerging Market crises

- The new "Euro" and the uncertainty of the readiness of the financial
markets for this new currency

- Lower responsiveness of foreign management to shareholder concerns

The Fund invests in companies that are smaller, less established, with less
liquid markets for their stock and therefore may be riskier investments.

15
<PAGE> 18

- --------------------------------------------------------------------------------

DRIEHAUS EMERGING MARKETS GROWTH FUND
- --------------------------------------------------------------------------------

INVESTOR EXPENSES

FEES AND EXPENSES OF THE FUND. This table describes the fees and expenses that
you may pay if you buy and hold shares of the Fund.

<TABLE>
<S> <C>
SHAREHOLDER FEES (fees paid directly from your investment)
Maximum Sales Charge Imposed on Purchases................. None
Maximum Deferred Sales Charge............................. None
Maximum Sales Charge Imposed on Reinvested Dividends...... None
Redemption Fee............................................ None
Exchange Fee.............................................. None
Maximum Account Fee....................................... None
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted
from Fund assets)
Management Fee............................................ 1.50 %
Other Expenses............................................ 8.65 %*
-----
Total Annual Fund Operating Expenses...................... 10.15 %*
Accounting, Administrative and Transfer Agency
Contractual Fee Waivers............................... (4.34)%
-----
Net Expenses........................................... 5.81 %
=====
</TABLE>

- -------------------
* The Adviser has agreed to absorb other operating expenses to the extent
necessary to ensure that total annual fund operating expenses will not exceed
2.75% of the average net assets during 1998 and 1999. Therefore, actual "Other
Expenses" and "Total Fund Operating Expenses" were 1.25% and 2.75%,
respectively.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
Emerging Markets Growth Fund................................ $1,066 $3,020 $4,744 $8,258
</TABLE>

16
<PAGE> 19

- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS -- DRIEHAUS EMERGING MARKETS GROWTH FUND
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PERIOD FROM
DECEMBER 31, 1997(1)
THROUGH
SEPTEMBER 30, 1998
--------------------
<S> <C>
Net asset value, beginning of period........................ $10.00
LOSS FROM INVESTMENT OPERATIONS:
Net investment loss.................................... (0.03)
Net loss on investments (both realized and
unrealized)........................................... (2.41)
------
Total loss from investment operations............. (2.44)
------
LESS DISTRIBUTIONS:
Dividends from net investment income................... 0.00
Distributions from capital gains....................... 0.00
Returns of capital..................................... 0.00
------
Total distributions............................... 0.00
------
Net asset value, end of period.............................. $ 7.56
======
Total return................................................ (24.40)%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's)...................... $3,487
Ratio of expenses to average net assets................... 2.75 %(3)(4)
Ratio of net investment loss to average net assets........ (0.49)%(3)(4)
Portfolio turnover rate................................... 261.20 %(2)
</TABLE>

- -------------------
(1) Commencement of operations.

(2) Not annualized.

(3) Such ratios are after administrative agent and transfer agent waivers and
Adviser expense reimbursements. PFPC Inc., the administrative agent and
transfer agent, waived a portion of its fees. The Adviser agreed to absorb
other operating expenses to the extent necessary to ensure that the total
fund operating expenses (other than interest, taxes, brokerage commissions
and other portfolio transaction expenses, capital expenditures and
extraordinary expense) will not exceed 2.75% of the net assets of the
Driehaus Emerging Markets Growth Fund for the first twenty-four months of
its operations.

(4) Annualized.

17
<PAGE> 20

- --------------------------------------------------------------------------------

THE FUNDS
- --------------------------------------------------------------------------------

The Driehaus International Growth Fund, Driehaus International Discovery Fund,
Driehaus European Opportunity Fund, Driehaus Asia Pacific Growth Fund and
Driehaus Emerging Markets Growth Fund (each a "Fund" and jointly the "Funds")
are each a series of the Driehaus Mutual Funds (the "Trust"), an open-end
management investment company. Driehaus Capital Management, Inc. (the "Adviser")
provides management and investment advisory services to the Funds. Prospective
investors should consider an investment in a Fund as a long-term investment.
There is no assurance that a Fund will meet its investment objective.

INVESTMENT PHILOSOPHY

The Adviser believes that over time revenue and earnings growth are the primary
determinants of equity valuations. Accordingly, the Adviser concentrates its
investments in companies which have demonstrated the ability to rapidly increase
sales and earnings, as well as the potential for continued growth in the future.
The Adviser evaluates the earnings quality of such companies to determine
whether current earnings might indicate future results. Factors such as strong
company earnings reports, increased order backlogs, new product introductions
and industry developments alert the Adviser to potential investments. The
Adviser combines this information with its own technical analyses to reach an
overall determination about the attractiveness of specific securities. To a
lesser extent, the Adviser also uses macroeconomics or country-specific
analyses. While the Adviser seeks companies that have demonstrated superior
earnings growth, the Adviser may also purchase the stock of companies based on
the expectation of capital appreciation where there is no demonstrable record of
earnings growth or increasing sales.

The Adviser also considers numerous criteria in evaluating countries for
investment and determining country and regional weights. Such criteria include
the current and prospective growth rates of various economies, interest rate
trends, inflation rates, trade balances and currency trends. The Adviser also
reviews technical information on stock markets. The analysis may also involve
considerations specific to a certain country or region of the world.

INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES

DRIEHAUS INTERNATIONAL GROWTH FUND. The investment objective of the Driehaus
International Growth Fund is to maximize capital appreciation. The Fund seeks to
achieve its objective by investing primarily in the equity securities of foreign
companies. Under normal market conditions, the Fund will invest substantially
all (no less than 65%) of its assets in at least three countries other than the
United States. There are no maximum limitations on the number of countries in
which the Adviser can or must invest at a given time. There are also no specific
limitations on the percentage of assets that may be invested in securities of
issuers located in any one country at a given time. The Fund is a
non-diversified fund. Current dividend income is not an investment
consideration, and dividend income is incidental to the Fund's overall
investment objective. The Fund generally will invest in securities of issuers
with market capitalizations of greater than $300 million and will not invest in
securities of issuers with market capitalizations of less than $200 million. The
Fund may also invest in securities of issuers that, together with any
predecessors, have been in continuous operation for less than three years.

The securities markets of many developing economies are sometimes referred to as
"emerging markets." Although the amount of the Fund's assets invested in
emerging markets will vary over time, it is expected that a substantial portion
of the Fund's assets will be invested in emerging markets. Currently, emerging
markets generally include every country in the world other than the United
States, Canada, Japan, Australia, New Zealand, Hong Kong, Singapore and most
Western European countries. The Fund is not limited to a specific percentage of
assets that may be invested in a single emerging market country (although at all
times the Fund must be invested in the assets of at least three countries).
Historically, the Fund has invested a substantial portion of its assets in
emerging markets and may do so at any time.

18
<PAGE> 21

Equity securities include common and preferred stock, bearer and registered
shares, savings shares, warrants or rights or options that are convertible into
common stock, debt securities that are convertible into common stock, depositary
receipts for those securities, and other classes of stock that may exist. The
Fund may purchase foreign securities in the form of sponsored or unsponsored
depositary receipts or other securities representing underlying shares of
foreign issuers. Generally, the Fund will purchase depositary receipts, rather
than invest directly in the underlying shares of a foreign issuer, for
liquidity, timing or transaction cost reasons. The Fund may also invest in
domestic and foreign investment companies which, in turn, invest primarily in
securities which the Fund could hold directly.

The Adviser generally intends to remain fully invested. However, as a temporary
defensive measure, the Fund may hold some or all of its assets in cash or cash
equivalents in domestic and foreign currencies, invest in domestic and foreign
money market securities (including repurchase agreements), purchase short-term
debt securities of U.S. or foreign government or corporate issuers, or invest in
money market funds which purchase one or more of the foregoing. The Fund may
also purchase such securities if the Adviser believes they may be necessary to
meet the Fund's liquidity needs. During periods of time when the Fund is
invested defensively, the Fund may not achieve its investment objective.

DRIEHAUS INTERNATIONAL DISCOVERY FUND. The investment objective of the Driehaus
International Discovery Fund is to maximize capital appreciation. The Fund seeks
to achieve its objective by investing primarily in the equity securities of
small foreign companies. The Fund generally will invest in securities of issuers
with market capitalizations of $1 billion or less. Under normal market
conditions, the Fund will invest substantially all (no less than 65%) of its
assets in at least three countries other than the United States. There are no
maximum limitations on the number of countries in which the Adviser can or must
invest at a given time. There are also no specific limitations on the percentage
of assets that may be invested in securities of issuers located in any one
country at a given time. The Fund is a non-diversified fund. Current dividend
income is not an investment consideration, and dividend income is incidental to
the Fund's overall investment objective. The Fund may also invest in securities
of issuers that, together with any predecessors, have been in continuous
operation for less than three years.

The securities markets of many developing economies are sometimes referred to as
"emerging markets." Although the amount of the Fund's assets invested in
emerging markets will vary over time, it is expected that a substantial portion
of the Fund's assets will be invested in emerging markets. Currently, emerging
markets generally include every country in the world other than the United
States, Canada, Japan, Australia, New Zealand, Hong Kong, Singapore and most
Western European countries. The Fund is not limited to a specific percentage of
assets that may be invested in a single foreign country (although at all times
the Fund must be invested in the assets of at least three countries). The Fund
may invest a substantial portion of its assets in emerging markets at any time.

19
<PAGE> 22

DRIEHAUS EUROPEAN OPPORTUNITY FUND. The investment objective of the Driehaus
European Opportunity Fund is to maximize capital appreciation. The Fund pursues
its objective by investing primarily in the equity securities of European
companies. At least 65% of the Fund's assets will be invested in the equity
securities of European companies. The Fund considers European companies to be
(i) companies organized under the laws of a European country or having
securities which are traded principally on an exchange or over-the-counter in a
European country; or (ii) companies which, regardless of where organized or
traded, have a significant amount of assets located in and/or derive a
significant amount of their revenues from goods purchased or sold, investments
made, or services performed in or with European countries. Currently, European
countries include Albania, Austria, Belarus, Belgium, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland,
Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland,
Portugal, Romania, Russia, Slovakia, Spain, Sweden, Switzerland, Turkey, the
Ukraine, the United Kingdom, and the countries of the former Yugoslavia. As the
Eastern European markets develop, the Adviser expects to invest more assets in
that part of Europe. There are no minimum limitations on the number of countries
in which the Adviser can or must invest at a given time. There are no specific
limitations on the percentage of assets that may be invested in securities of
issuers located in any one country at a given time; the Fund may invest
significant assets in any single European country. The Fund is a non-diversified
fund. Current dividend income is not an investment consideration, and dividend
income is incidental to the Fund's overall investment objective. The Fund may
also invest in securities of issuers that, together with any predecessors, have
been in continuous operation for less than three years.

DRIEHAUS ASIA PACIFIC GROWTH FUND. The investment objective of the Driehaus Asia
Pacific Growth Fund is to maximize capital appreciation. The Fund pursues its
objective by investing primarily in the equity securities of Asia Pacific
companies. At least 65% of the Fund's assets will be invested in the equity
securities of Asia Pacific companies. The Fund considers Asia Pacific companies
to be (i) companies organized under the laws of an Asia Pacific country or
having securities which are traded principally on an exchange or
over-the-counter in an Asia Pacific country; or (ii) companies which, regardless
of where organized or traded, have a significant amount of assets located in
and/or derive a significant amount of their revenues from goods purchased or
sold, investments made, or services performed in or with Asia Pacific countries.
Currently, Asia Pacific countries include Australia, The People's Republic of
China (including Hong Kong), India, Indonesia, Japan, South Korea, Malaysia, New
Zealand, Pakistan, the
20
<PAGE> 23

Philippines, Singapore, Sri Lanka, Taiwan and Thailand. There are no minimum
limitations on the number of countries in which the Adviser can or must invest
at a given time. There are no specific limitations on the percentage of assets
that may be invested in securities of issuers located in any one country at a
given time; the Fund may invest significant assets in any single Asia Pacific
country. The Fund is a non-diversified fund. Current dividend income is not an
investment consideration, and dividend income is incidental to the Fund's
overall investment objective. The Fund may also invest in securities of issuers
that, together with any predecessors, have been in continuous operation for less
than three years.

Under normal circumstances, the Adviser intends to leave the Fund fully
invested; however, during the current economic crisis or at other times when
financial markets in the Asia Pacific region are unstable, the Adviser may hold
as much as 25% of the Fund's net assets in cash or cash equivalents. As a
temporary defensive measure, the Fund may hold some or all of its assets in cash
or cash equivalents in domestic and foreign currencies, invest in domestic and
foreign money market securities (including repurchase agreements), purchase
short-term debt securities of U.S. or foreign government or corporate issuers.
The Fund may also purchase such securities if the Adviser believes they may be
necessary to meet the Fund's liquidity needs, or invest in money market funds
which purchase one or more of the foregoing. During periods of time when the
Fund is not fully invested, the Fund may not achieve its investment objective.

DRIEHAUS EMERGING MARKETS GROWTH FUND. The investment objective of the Driehaus
Emerging Markets Growth Fund is to maximize capital appreciation. The Fund
pursues its objective by investing primarily in the equity securities of
emerging market companies. Emerging market companies are (i) companies organized
under the laws of an emerging market country or having securities which are
traded principally on an exchange or over-the-counter in an emerging market
country; or (ii) companies which, regardless of where organized or traded, have
a significant amount of assets located in and/or derive a significant amount of
their revenues from goods purchased or sold, investments made or services
performed in or with emerging market countries. Currently, emerging markets
include every country in the world other than the United States, Canada, Japan,
Australia, New Zealand, Hong Kong, Singapore and most Western European
Countries. At least 65% of the Fund's assets will be invested in the equity
securities of emerging markets companies. There are also no specific limitations
on the percentage of assets that may be invested in securities of issuers
located in any one country at a given time; the Fund may invest significant
assets in any single emerging market country. The Fund is a non-diversified
fund. Current dividend income is not an investment consideration and dividend
income is incidental to the Fund's overall investment objective. The Fund may
also invest in securities of issuers, that, together with any predecessors, have
been in continuous operation for less than three years.

21
<PAGE> 24

Fund may purchase foreign securities in the form of sponsored or unsponsored
depositary receipts or other securities representing underlying shares of
foreign issuers. Generally, the Fund will purchase depositary receipts, rather
than invest directly in the underlying shares of a foreign issuer, for
liquidity, timing or transaction cost reasons. The Fund may also invest in
domestic and foreign investment companies which, in turn, invest primarily in
securities which the Fund could hold directly.

Under normal circumstances, the Adviser intends to have the Fund fully invested;
however, during the current economic crisis or at other times when financial
markets in the emerging market countries are unstable, the Adviser may hold as
much as 25% of the Fund's net assets in cash or cash equivalents. As a temporary
defensive measure, the Fund may hold some or all of its assets in cash or cash
equivalents in domestic and foreign currencies, invest in domestic and foreign
money market securities (including repurchase agreements), purchase short-term
debt securities of U.S. or foreign government or corporate issuers, or invest in
money market funds which purchase one or more of the foregoing. The Fund may
also purchase such securities if the Adviser believes they may be necessary to
meet the Fund's liquidity needs. During periods of time when the Fund is not
fully invested, the Fund may not achieve its investment objective.

RELATED RISKS

All investments, including those in mutual funds, have risks. No investment is
suitable for all investors. EACH FUND IS INTENDED FOR LONG-TERM INVESTORS WHO
CAN ACCEPT THE RISKS ENTAILED IN INVESTING IN FOREIGN SECURITIES. Of course,
there can be no assurance that a Fund will achieve its objective.

FOREIGN SECURITIES AND CURRENCIES. All of the Funds invest in foreign
securities. Investing outside the United States involves different opportunities
and different risks than domestic investments. The Adviser believes that it may
be possible to obtain significant returns from a Fund's portfolio of foreign
investments and to achieve increased diversification in comparison to a personal
investment portfolio invested solely in United States securities. An investor
may gain increased diversification by adding securities from various foreign
countries (i) which offer different investment opportunities, (ii) that
generally are affected by different economic trends, and (iii) whose stock
markets do not generally move in a manner parallel to United States markets. At
the same time, these opportunities and trends involve risks that may not be
encountered in United States investments.

Investors should understand and consider carefully the greater risks involved in
foreign investing. Investing in foreign securities -- positions which are
generally denominated in foreign currencies -- and utilization of forward
foreign currency exchange contracts involve certain considerations comprising
both risks and opportunities not typically associated with investing in U.S.
securities. These considerations include: fluctuations in exchange rates of
foreign currencies; possible imposition of exchange control regulations or
currency restrictions that would prevent cash from being brought back to the
United States; less public information with respect to issuers of securities;
less governmental supervision of stock exchanges, securities brokers, and
issuers of securities; lack of uniform accounting, auditing and financial
reporting standards; lack of uniform settlement periods and trading practices;
less liquidity and frequently greater price volatility in foreign markets than
in the United States; possible imposition of foreign taxes; possible investment
in the securities of companies in developing as well as developed countries; the
possibility of expropriation or confiscatory taxation, seizure or
nationalization of foreign bank deposits or other assets, establishment of
exchange controls, the adoption of foreign government restrictions and other
adverse political, social or diplomatic developments that could affect
investment in these nations; sometimes less advantageous legal, operational and
financial protections applicable to foreign subcustodial arrangements; and the
historical lower level of responsiveness of foreign management to shareholder
concerns (such as dividends and return on investment).

To the extent portfolio securities are issued by foreign issuers or denominated
in foreign currencies, a Fund's investment performance is affected by the
strength or weakness of the U.S. dollar against these currencies. For example,
if the dollar falls relative to the Japanese yen, the dollar value of a yen-

22
<PAGE> 25

denominated stock held in the portfolio will rise even though the price of the
stock remains unchanged. Conversely, if the dollar rises in value relative to
the yen, the dollar value of the yen-denominated stock will fall.

EMERGING MARKET RISKS. The Driehaus Emerging Markets Growth Fund invests
primarily in emerging markets. Many of the countries of the Asia Pacific region
still have developing markets and, therefore, the Driehaus Asia Pacific Growth
Fund will have a substantial portion of its assets in emerging markets. However,
the Driehaus International Growth Fund, the Driehaus International Discovery
Fund, and the Driehaus European Opportunity Fund may also invest a substantial
portion of their assets in emerging market securities. The risks described above
for foreign securities, including the risks of nationalization and expropriation
of assets, are typically increased to the extent that a Fund invests in issuers
located in less developed and developing nations. These securities markets are
sometimes referred to as "emerging markets." Investments in securities of
issuers located in such countries are speculative and subject to certain special
risks. The political and economic structures in many of these countries may be
in their infancy and developing rapidly, and such countries may lack the social,
political and economic characteristic of more developed countries. Certain of
these countries have in the past failed to recognize private property rights and
have at times nationalized and expropriated the assets of private companies.
Some countries have inhibited the conversion of their currency to another. The
currencies of certain emerging market countries have experienced devaluation
relative to the U.S. dollar, and continued devaluations may adversely affect the
value of a Fund's assets denominated in such currencies. There is some risk of
currency contagion; the devaluation of one currency leading to the devaluation
of another. As one country's currency experiences "stress," there is concern
that the "stress" may spread to another currency. Many emerging markets have
experienced substantial, and in some periods extremely high, rates of inflation
for many years. Continued inflation may adversely affect the economies and
securities markets of such countries. In addition, unanticipated political or
social developments may affect the value of a Fund's investments in these
countries and the availability to the Fund of additional investments in these
countries. The small size, limited trading volume and relative inexperience of
the securities markets in these countries may make a Fund's investments in such
countries illiquid and more volatile than investments in more developed
countries, and the Fund may be required to establish special custodial or other
arrangements before making investments in these countries. There may be little
financial or accounting information available with respect to issuers located in
these countries, and it may be difficult as a result to assess the value or
prospects of an investment in such issuers.

Based upon the apparent correlation between commodity cycles and a country's
securities markets, additional risk may exist.

ASIA PACIFIC REGION RISKS. The Driehaus Asia Pacific Growth Fund invests
primarily in the equity securities of companies in the Asia Pacific region. All
the Funds may invest in this region. Some countries in the Asian Pacific region
have undergone recent well-publicized, but unprecedented economic instability.
Certain issuers absorbed substantial losses due to adverse changes in the
financial conditions or the market's assessment of particular issuers. Moreover,
the currencies of some countries in the region underwent rapid devaluation
prompting governmental efforts to stabilize the currency. While the Adviser
believes that this situation presents an opportunity for long-term investors, in
the short-term the stocks of Asia Pacific issuers may remain volatile.

EUROPEAN RISKS. The Driehaus European Opportunity Fund invests primarily in the
equity securities in the European region. All the Funds may invest in this
region. Some countries in Europe have recently participated in a well-publicized
effort to form a monetary union, known as the Economic and Monetary Union
("EMU"), in an effort to, among other things, reduce barriers between countries
and eliminate fluctuations in their currencies. As part of that monetary union,
local currency for the eleven participating countries will be converted to a
common currency called the Euro. The conversion begins January 1, 1999, and is
expected to continue for several years. Accommodating the new currency poses
risk as well as benefits and opportunities to the market participants, banks,
investors, companies, and exchanges of the European region. The impact of the
conversion cannot yet be determined. The Adviser and the Funds'

23
<PAGE> 26

other key external parties are taking steps to address euro-related issues.
However, they can give no assurance that the conversion will not have an adverse
effect on the Funds' investments and operations.

DIVERSIFICATION. Each Fund is non-diversified, meaning that it is not limited in
the proportion of its assets that it may invest in the obligations of a single
issuer or in a single country. Each Fund will, however, comply with
diversification requirements imposed by the Internal Revenue Code for
qualification as a regulated investment company. As a non-diversified fund, each
Fund may invest a greater proportion of its assets in the securities of a small
number of issuers, and may be subject to greater risk and substantial losses as
a result of changes in the financial condition or the market's assessment of the
issuers.

YEAR 2000. The investment management and advisory services provided to the Funds
by the Adviser and the Funds' custodian and the services provided to
shareholders by the administrator/transfer agent depend on the smooth
functioning of their computer systems. Many computer software systems in use
today cannot recognize the year 2000, but revert to 1900 or some other date, due
to the manner in which dates were encoded and calculated. That failure could
have a negative impact on the handling of securities trades, pricing and account
services. The Adviser, the custodian, and the administrator/transfer agent have
been actively working on necessary changes to their own computer systems to
prepare for the year 2000 and expect that their systems will be adapted before
that date, but there can be no assurance that they will be successful, or that
interactions with other non-complying computer systems will not impair their
services at that time.

In addition, it is possible that the markets for securities in which the Funds
invest may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. The
Adviser believes that the year 2000 issue can have a positive and negative
impact on the Funds. For example, the year 2000 presents growth opportunities
for companies engaged in year 2000 consulting and remediation. Conversely, the
year 2000 problem can negatively affect the earnings growth rates for companies
that manufacture hardware and distribute software applications that are not
currently year 2000 compliant. Earnings of individual issuers will also be
affected by remediation costs, which may be substantial and may be reported
inconsistently in U.S. and foreign financial statements. Accordingly, the
investments of the Funds may be adversely affected.

PORTFOLIO INVESTMENTS AND OTHER RISK CONSIDERATIONS

There are specific restrictions on each Fund's investments. Such restrictions
are detailed in the Statement of Additional Information. Each Fund may utilize
from time to time one or more of the investment practices described below to
assist it in reaching its investment objective. These practices involve
potential risks which are summarized below. In addition, the Statement of
Additional Information contains more detailed or additional information about
certain of these practices, the potential risks and/or the limitations adopted
by each Fund to help manage such risks.

SMALL AND MEDIUM-SIZED COMPANIES. Each of the Funds may invest in the securities
of small- and medium-sized companies. While small- and medium-sized companies
generally have the potential for rapid growth, the securities of these companies
often involve greater risks than investments in larger, more established
companies because small- and medium-sized companies may lack the management
experience, financial resources, product diversification and competitive
strengths of larger companies. In addition, in many instances the securities of
small- and medium-sized companies are traded only over-the-counter or on a
regional securities exchange, and the frequency and volume of their trading is
substantially less than is typical of larger companies. Therefore, the
securities of small- and medium-sized companies may be subject to greater and
more abrupt price fluctuations and, for large sales, a Fund may have to sell
such holdings at discounts from quoted prices or make a series of small sales
over an extended period of time.

CURRENCY HEDGING. Due to the investments in foreign securities, the value of a
Fund in U.S. dollars is subject to fluctuations in the exchange rate between
foreign currencies and the U.S. dollar. When, in the opinion of the Adviser, it
is desirable to limit or reduce exposure in a foreign currency, the Funds may
enter into a forward currency exchange contract to sell such foreign currency
(or another foreign currency
24
<PAGE> 27

that acts as a proxy for that currency) ("forward currency contract"). Through
the contract, the U.S. dollar value of certain underlying foreign portfolio
securities can be approximately matched by an equivalent U.S. dollar liability.
This technique is known as "currency hedging." By locking in a rate of exchange,
currency hedging is intended to moderate or reduce the risk of change in the
U.S. dollar value of a Fund during the period of the forward contract. A default
on a contract would deprive a Fund of unrealized profits or force the Fund to
cover its commitments for purchase or sale of currency, if any, at the current
market price.

The use of forward currency contracts (for transaction or portfolio hedging)
will not eliminate fluctuations in the prices of portfolio securities or prevent
loss if the price of such securities should decline. In addition, such forward
currency contracts will diminish the benefit of the appreciation in the U.S.
dollar value of that foreign currency.

SETTLEMENT TRANSACTIONS. A Fund trading a foreign security is usually required
to settle the purchase transaction in the relevant foreign currency or receive
the proceeds of the sale in that currency. At or near the time of the
transaction, a Fund may wish to lock in the U.S. dollar value at the exchange
rate or rates then prevailing between the U.S. dollar and the currency in which
the security is denominated. Transaction hedging may be accomplished on a
forward basis, whereby a Fund purchases or sells a specific amount of foreign
currency, at a price set at the time of the contract, for receipt or delivery at
either a specified date or at any time within a specified time period.
Transaction hedging also may be accomplished by purchasing or selling such
foreign currencies on a "spot," or cash, basis. In so doing, a Fund will attempt
to insulate itself against possible losses and gains resulting from a change in
the relationship between the U.S. dollar and the foreign currency during the
period between the date the security is purchased or sold and the date on which
payment is made or received and the transaction settled. Similar transactions
may be entered into by using other currencies. A Fund may also settle certain
trades in U.S. dollars. The use of currency transactions can result in a Fund
incurring losses as a result of a number of factors, including the imposition of
exchange controls, suspension of settlements or the inability to deliver or
receive a specified currency.

DERIVATIVES. In seeking to achieve its desired investment objective, provide
additional revenue or hedge against changes in security prices, interest rates
or currency fluctuations, each Fund may: (1) purchase and write both call
options and put options on securities, indices and foreign currencies; (2) enter
into interest rate, index and foreign currency futures contracts; (3) write
options on such futures contracts; (4) purchase other types of forward or
investment contracts linked to individual securities, indices or other
benchmarks; and (5) enter into various equity or interest rate transactions,
such as swaps, caps, floors or collars, and may enter into various currency
transactions such as forward currency contracts, currency futures contracts,
currency swaps or options on currencies ("derivatives"). Each Fund may write a
call or put option only if the option is covered. As the writer of a covered
call option, each Fund forgoes, during the option's life, the opportunity to
profit from increases in market value of the security covering the call option
above the sum of the premium and the exercise price of the call. There can be no
assurance that a liquid market will exist when a Fund seeks to close out a
position. In addition, because futures positions may require low margin
deposits, the use of futures contracts involves a high degree of leverage and
may result in losses in excess of the amount of the margin deposit.

The successful use of derivatives depends on the Adviser's ability to correctly
predict changes in the levels and directions of movements in currency exchange
rates, security prices, interest rates and other market factors affecting the
derivative itself or the value of the underlying asset or benchmark. In
addition, correlations in the performance of an underlying asset to a derivative
may not be well established. Finally, privately negotiated and over-the-counter
derivatives may not be as well regulated and may be less marketable than
exchange-traded derivatives.

ILLIQUID SECURITIES. Each Fund may invest up to 15% of its net assets in
illiquid securities. Not readily marketable, they include restricted securities
and repurchase obligations maturing in more than seven days. Certain restricted
securities that may be resold to institutional investors under Rule 144A of the
Securities Act of 1933, and Section 4(2) commercial paper may be deemed liquid
under guidelines adopted by the

25
<PAGE> 28

Fund's Board of Trustees. The absence of a trading market can make it difficult
to ascertain a market value for illiquid or restricted securities. Disposing of
illiquid or restricted securities may involve time-consuming negotiations and
legal expenses, and it may be difficult or impossible for a Fund to sell them
promptly at an acceptable price.

CONVERTIBLE SECURITIES. While convertible securities purchased by the Funds are
frequently rated investment grade, a Fund also may purchase unrated convertible
securities or convertible securities rated below investment grade if the
securities meet the Adviser's other investment criteria. Each Fund does not
currently intend to invest more than 5% of its total assets in below investment
grade convertible securities. Convertible securities rated below investment
grade (a) tend to be more sensitive to interest rate and economic changes, (b)
may be obligations of issuers who are less creditworthy than issuers of higher
quality convertible securities, and (c) may be more thinly traded due to such
securities' being less well known to investors than either common stock or
conventional debt securities. As a result, the Adviser's own investment research
and analysis tends to be more important in the purchase of such securities than
other factors.

DEBT SECURITIES. Each Fund may invest up to 35% of its total assets in
nonconvertible debt securities. Investments in such debt securities are limited
to those that are rated within the four highest grades (generally referred to as
"investment grade") assigned by a nationally or internationally recognized
statistical rating organization. Investments in unrated debt securities are
limited to those deemed to be of comparable quality by the Adviser. Securities
in the fourth-highest grade may possess speculative characteristics. If the
rating of a security held by the Fund is lost or reduced below investment grade,
the Fund is not required to dispose of the security. The Adviser will, however,
consider that fact in determining whether the Fund should continue to hold the
security. The risks inherent in a debt security depend primarily on its term and
quality, as well as on market conditions. A decline in the prevailing levels of
interest rates generally increases the value of debt securities. Conversely, an
increase in rates usually reduces the value of debt securities.

PORTFOLIO TURNOVER. A Fund's annual turnover rate indicates changes in its
portfolio investments. A Fund will not consider portfolio turnover rate a
limiting factor in making investment decisions consistent with its investment
objective and policies. It is anticipated that the Funds will each experience
high rates of portfolio turnover. High portfolio turnover in any year will
result in payment by a Fund of above-average amounts of transaction costs and
could result in the payment by shareholders of above-average amounts of taxes on
realized investment gains. Under normal market conditions, only securities that
increase in value shortly after purchase and that generally continue to increase
in value (although they may experience temporary stagnant or declining periods)
will be retained by the Funds. Securities sold by a Fund may be purchased again
at a later date if the Adviser perceives that the securities are again "timely."
In addition, portfolio adjustments will be made when conditions affecting
relevant markets, particular industries or individual issues warrant such
action. In light of these factors and the historical volatility of foreign
growth stocks, the Funds are likely to experience high portfolio turnover rates,
but portfolio turnover rates may vary significantly from year to year. The
portfolio turnover rate for the Driehaus International Growth Fund, Driehaus
Asia Pacific Growth Fund and Driehaus Emerging Markets Growth Fund are noted in
each Fund's Financial Highlights in the Summary. The Portfolio turnover rates
for the Driehaus International Discovery Fund and the Driehaus European
Opportunity Fund are expected to be over 250% and 200%, respectively. Portfolio
turnover may also be affected by sales of portfolio securities necessary to meet
cash requirements for redemptions of shares.

INVESTMENT COMPANIES. The Funds may each invest in domestic and foreign
investment companies. Some countries may not permit direct investment by outside
investors. Investments in such countries may only be permitted through foreign
government-approved or government-authorized investment vehicles, which may
include other investment companies. In addition, it may be less expensive and
more expedient for a Fund to invest in a foreign investment company in a country
that permits direct foreign investment; similarly, a Fund may invest in a money
market fund in order to receive a higher rate of return or to be more
productively invested than would be possible through direct investment in money
market instruments. Investing through such vehicles may involve layered fees or
expenses. The Funds do not intend to invest in
26
<PAGE> 29

such investment companies unless, in the judgment of the Adviser, the potential
benefits of such investments justify the payment of any associated fees or
expenses.

REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements, provided
that it will not invest more than 15% of its net assets in repurchase agreements
maturing in more than seven days and any other illiquid securities. A repurchase
agreement involves the sale of securities to a Fund, with the concurrent
agreement of the seller to repurchase the securities at the same price plus an
amount representing interest at an agreed-upon interest rate within a specified
period of time, usually less than one week, but, on occasion, at a later time.
Repurchase agreements entered into by a Fund will be fully collateralized and
will be marked-to-market daily. In the event of a bankruptcy or other default of
a seller of a repurchase agreement, a Fund could experience both delays in
liquidating the underlying securities and losses, including: (a) possible
decline in the value of the collateral during the period while the Fund seeks to
enforce its rights thereto; (b) possible subnormal levels of income and lack of
access to income during this period; and (c) expenses of enforcing its rights.

WHEN-ISSUED AND DELAYED-DELIVERY SECURITIES; REVERSE REPURCHASE AGREEMENTS. Each
Fund may purchase or sell securities on a when-issued or delayed-delivery basis.
Although the payment and interest terms of these securities are established at
the time the Fund enters into the commitment, the securities may be delivered
and paid for a month or more after the date of purchase, when their value may
have changed. The Fund makes such purchase commitments only with the intention
of actually acquiring the securities, but may sell the securities before
settlement date if the Adviser deems it advisable for investment reasons. Each
Fund may utilize spot and forward foreign currency exchange transactions to
reduce the risk inherent in fluctuations in the exchange rate between one
currency and another when securities are purchased or sold on a when-issued or
delayed-delivery basis.

Each Fund may enter into reverse repurchase agreements with banks and securities
dealers. A reverse repurchase agreement is a repurchase agreement in which a
Fund is the seller of, rather than the investor in, securities and agrees to
repurchase them at an agreed-upon time and price. Use of a reverse repurchase
agreement may be preferable to a regular sale and later repurchase of securities
because it avoids certain market risks and transaction costs.

At the time a Fund enters into a binding obligation to purchase securities on a
when-issued basis or enters into a reverse repurchase agreement, liquid assets
(cash, U.S. Government securities or other "high-grade" debt obligations) of the
Fund having a value at least as great as the purchase price of the securities to
be purchased will be segregated on the books of the Fund and held by the
custodian throughout the period of the obligation. The use of these investment
strategies, as well as borrowing under a line of credit, may increase net asset
value fluctuation.

LENDING PORTFOLIO SECURITIES. Each Fund may lend its portfolio securities to
broker-dealers and banks, provided that it may not lend securities if, as a
result, the aggregate value of all securities loaned would exceed 33 1/3% of its
total assets. Any such loan must be continuously secured by collateral (cash or
U.S. Government securities). In the event of bankruptcy or other default of the
borrower, a Fund could experience delays in both liquidating the loan collateral
and recovering the loaned securities and losses.

27
<PAGE> 30

- --------------------------------------------------------------------------------

MANAGEMENT OF THE FUNDS
- --------------------------------------------------------------------------------

TRUSTEES AND ADVISER. The Board of Trustees of the Driehaus Mutual Funds has
overall management responsibility. See the Statement of Additional Information
for the names of and additional information about the trustees and officers. The
Adviser, Driehaus Capital Management, Inc., 25 East Erie Street, Chicago,
Illinois 60611, is responsible for providing investment advisory and management
services to the Funds, subject to the direction of the Board of Trustees. The
Adviser is registered as an investment adviser under the Investment Advisers Act
of 1940. The Adviser was organized in 1982 and currently manages over $2 billion
in assets.

PORTFOLIO MANAGER -- DRIEHAUS INTERNATIONAL GROWTH FUND. William R. Andersen, a
Senior Vice President of the Adviser, has managed the Driehaus International
Growth Fund since the commencement of operations in October of 1996. Prior to
the Driehaus International Growth Fund's commencement of operations, Mr.
Andersen was the portfolio manager for the Driehaus International Large Cap
Fund, L.P. from its inception in July 1990. Mr. Andersen has primary
responsibility for making all investment decisions on behalf of the Driehaus
International Growth Fund. He is assisted by the research department which
employs specialists in various markets, including Western Europe, Asia Pacific,
Canada and emerging markets. In addition to the Funds, Mr. Andersen is the
portfolio manager for three Canadian mutual funds, including a global fund. As
the Adviser's chief investment officer for international investing, Mr. Andersen
oversees all international investing. He does not, however, supervise or
participate in investment decision-making for the Driehaus Asia Pacific Growth
Fund, the Driehaus Emerging Markets Growth Fund, or the Driehaus European
Opportunity Fund. Mr. Andersen will periodically review the asset allocation of
the Driehaus International Discovery Fund.

Mr. Andersen was born in 1959 and is a graduate of Stanford University, where he
received a B.A. in economics in 1981. In 1985, Mr. Andersen received his M.B.A.
from the University of Chicago, where he concentrated in finance. Mr. Andersen
is a Chartered Financial Analyst. Mr. Andersen has been employed by Driehaus
Securities Corporation ("DSC") and the Adviser since 1985. From 1985 to 1989,
Mr. Andersen was employed by DSC as a security analyst and, as such, was
responsible for several industry groups in which DSC maintained investments for
clients. In May 1989, while continuing to act as a senior investment analyst for
DSC, Mr. Andersen became a portfolio manager for the Adviser.

PORTFOLIO MANAGER -- DRIEHAUS ASIA PACIFIC GROWTH FUND. Mr. Eric J. Ritter has
managed the Fund since its inception. Mr. Ritter, an Asia Pacific analyst with
the Adviser, has responsibility for making all investment decisions on behalf of
the Fund.

Mr. Ritter was born in 1963 and received his B.A. in economics from the State
University of New York at Oswego in 1984. He earned a master's degree in
international relations from Columbia University in 1987. Thereafter, Mr. Ritter
worked as a consultant in Hong Kong in 1987-88, consulting primarily with
Fortune 500 companies on investment and market strategy for Asia. From late 1988
to 1990, he worked for Baring Securities as an equity analyst conducting
research on listed companies in Singapore and Malaysia. Mr. Ritter then moved
back to the United States to work in equity research and sales, covering the
Southeast Asia markets, for Crosby Securities and W.I. Carr, both registered
broker-dealers, prior to joining the Adviser in June 1996.

PORTFOLIO MANAGER -- DRIEHAUS EMERGING MARKETS GROWTH FUND; CO-PORTFOLIO
MANAGER -- DRIEHAUS INTERNATIONAL DISCOVERY FUND. Mr. Emery R. Brewer has
managed the Driehaus Emerging Markets Growth Fund since its inception. Mr.
Brewer, an emerging markets analyst with the Adviser, has responsibility for
making all investment decisions on behalf of the Driehaus Emerging Markets
Growth Fund.

Mr. Brewer was born in 1963 and received his B.S. in economics from the
University of Utah in 1986. From 1987 to 1988, he worked as a securities broker
at Wilson Davis & Co., focusing primarily on NASDAQ listed companies. From 1989
to 1990, he worked for Dean Witter Reynolds as a broker, focusing primarily on
equity and fixed-income investments. After earning his M.B.A. from the
University

28
<PAGE> 31

of Rochester in 1992, he worked as an adviser to the capital markets group of
Investicini Banka (the third largest bank in and former investment bank of the
Czech Republic), focusing primarily on valuation and analysis of Czech
companies. Mr. Brewer became a consultant to the Adviser in 1993 prior to
joining the Adviser as an international securities analyst in November 1994.

PORTFOLIO MANAGER -- DRIEHAUS EUROPEAN OPPORTUNITY FUND; CO-PORTFOLIO
MANAGER -- DRIEHAUS INTERNATIONAL DISCOVERY FUND. Ms. Lynette Schroeder has
managed the Driehaus European Opportunity Fund since its inception. Prior to the
Driehaus European Opportunity Fund's commencement of operations, Ms. Schroeder
was also the portfolio manager for the Driehaus Western European Fund L.P. from
August 1997 to December 1998. Ms. Schroeder, a European analyst for the Adviser,
has responsibility for making all investment decisions on behalf of the Driehaus
European Opportunity Fund.

Ms. Schroeder was born in 1962 and received her B.A. in political science from
the University of Chicago in 1985. She earned her M.B.A. from the University of
Virginia -- Darden School of Business in 1992. Her investment experience began
at Scudder, Stevens and Clark where she worked on European research from
1993-1995. Thereafter, she joined Lexington Asset Management where she worked as
a European companies analyst during 1995-1997. She joined the Adviser in 1997.

CO-PORTFOLIO MANAGERS -- DRIEHAUS INTERNATIONAL DISCOVERY FUND. Mr. Emery Brewer
and Ms. Lynette Schroeder are co-portfolio managers of the Fund. Mr. Andersen
will periodically review the asset allocation of the Fund.

DISTRIBUTOR. As of December 31, 1998, the shares of the Trust will be offered
for sale through Driehaus Securities Corporation, ("DSC"), an affiliate of the
Adviser, without any sales concessions or charges to the Fund or to its
shareholders. DSC is located at 25 East Erie Street, Chicago, Illinois 60611,
and is wholly-owned by Richard H. Driehaus. All distribution and promotional
expenses are paid by the Adviser.

ADMINISTRATOR. PFPC Inc. ("PFPC") is the administrator for the Funds. In such
capacity, PFPC assists the Funds in all aspects of its administration and
operation, including certain accounting services.

TRANSFER AGENT. PFPC is the agent of the Funds for the transfer of shares,
disbursement of dividends and maintenance of shareholder accounting records.

CUSTODIAN. The Chase Manhattan Bank (the "Custodian") is the custodian for the
Funds. Foreign securities are maintained in the custody of foreign banks and
trust companies that are members of the Custodian's Global Investor Services or
foreign depositories used by such members.

29
<PAGE> 32

- --------------------------------------------------------------------------------

SHAREHOLDER INFORMATION
- --------------------------------------------------------------------------------

NET ASSET VALUE

Purchases and redemptions are made at a Fund's net asset value per share next
calculated after receipt of a purchase order and payment in good form. The net
asset value is determined as of the regular close of the New York Stock Exchange
("NYSE") (3:00 p.m., Central time) on each day the NYSE is open for trading. Net
asset value per share is determined by dividing the difference between the
values of its assets and liabilities by the number of its shares outstanding.

OPENING AN ACCOUNT

1) Read this prospectus carefully.

2) The minimum initial investment for Driehaus Mutual Funds is $100,000.
The minimum subsequent purchase is $20,000. These minimums may be waived
at the discretion of Driehaus Mutual Funds.

3) Complete the appropriate parts of the application, carefully following
the instructions. If you have questions, please contact Shareholder
Services.

4) Individual Retirement Accounts (IRAs) may also be set up. For details,
contact Shareholder Services at 1-800-560-6111. Investors should also
read the IRA Disclosure Statement and Bank Custodial Agreement for
further details on eligibility, service fees and tax implications.

HOW TO PURCHASE SHARES

<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- --------------------------------------------------------------------------------------------------------
BY BANK OR
CERTIFIED CHECK
- Complete the New Account - Make your bank or certified check
Application indicating in which for the investment amount, payable
Fund(s) you want to invest and to Driehaus Mutual Funds.
make your bank or certified check
for the investment amount, payable - Fill out the detachable investment
to DRIEHAUS MUTUAL FUNDS. slip from an account statement. If
no slip is available, include a
- Send the bank or certified check note specifying the Fund name,
and your completed application to your account number and the
Driehaus Mutual Funds (address name(s) in which the account is
below). registered.
- Send the bank or certified check
and your investment slip or note to
Driehaus Mutual Funds (address
below).
- --------------------------------------------------------------------------------------------------------
</TABLE>

30
<PAGE> 33

<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- --------------------------------------------------------------------------------------------------------
BY WIRE TRANSFER
- Send your completed New Account - Instruct your bank to wire the
Application to Driehaus Mutual amount of your investment to:
Funds (address below). PNC Bank N.A.
ABA#: 031-000-053
- Call Shareholder Services to Credit: Driehaus Purchase Account
obtain your account number. Bank Account #: 86-1108-2419
Fund Name, Fund #
- Instruct your bank to wire the Further Credit: (Shareholder's
amount of your investment to: name and Account #)
PNC Bank N.A. See the following table for Fund
ABA#: 031-000-053 Name and Fund #.
Credit: Driehaus Purchase Account
Bank Account #: 86-1108-2419
Fund Name, Fund #
Further Credit: (Shareholder's
name and Account #)
See the following table for Fund
Name and Fund #.
- --------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C> <C>
ADDRESS: FOR OVERNIGHT DELIVERY: SHAREHOLDER SERVICES
Driehaus Mutual Funds Driehaus Mutual Funds PHONE NUMBER:
c/o PFPC c/o PFPC 1-800-560-6111
P.O. Box 8855 400 Bellevue Parkway
Wilmington, DE 19899-8855 Suite 108
Wilmington, DE 19809-3710
</TABLE>

<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------
FUND NAME FUND NUMBER
- ---------------------------------------------------------------------------------------
Driehaus International Growth Fund #001
- ---------------------------------------------------------------------------------------
Driehaus Asia Pacific Growth Fund #002
- ---------------------------------------------------------------------------------------
Driehaus Emerging Markets Growth Fund #003
- ---------------------------------------------------------------------------------------
Driehaus International Discovery Fund #004
- ---------------------------------------------------------------------------------------
Driehaus European Opportunity Fund #005
- ---------------------------------------------------------------------------------------
</TABLE>

ADDITIONAL PURCHASE POLICIES. Driehaus Mutual Funds, at its option, may accept a
check for $25,000 or less that is not a bank or certified check and may accept a
check initiated by brokers or mutual fund complexes. A purchase order on behalf
of a client who has an investment advisory account with the Adviser or a
brokerage account with Driehaus Securities Corporation is effected upon
confirmation of a verified credit balance at least equal to the amount of the
purchase order (subject to the minimum investment requirements).

Shares of each Fund are offered only to residents of states and other
jurisdictions in which the shares are available for purchase. Driehaus Mutual
Funds reserves the right not to accept any purchase order. Driehaus Mutual Funds
also reserves the right to change its investment minimums without notice.

CONFIRMATION. For all purchases, confirmations are sent to the investor in
writing except purchases made by reinvestment of dividends, which will be
confirmed quarterly.

PURCHASES THROUGH THIRD PARTIES

Investors may purchase (or redeem) shares through investment dealers or other
financial institutions. The institutions may charge for their services or place
limitations on the extent to which investors may use the services offered by the
Driehaus Mutual Funds. There are no charges or limitations imposed by Driehaus
31
<PAGE> 34

Mutual Funds other than those described in this prospectus, if shares are
purchased (or redeemed) directly from Driehaus Mutual Funds or DSC.

Financial institutions that enter into a sales agreement with DSC or are
designated by the Driehaus Mutual Funds' Board of Trustees (including Charles
Schwab Co., Inc.) may accept purchase and redemption orders on behalf of the
Funds. A purchase or redemption order will be deemed to have been received when
such financial institution accepts such order. All orders will be priced at a
Fund's net asset value next computed after they are accepted by such designated
financial institution.

Certain broker-dealers, financial institutions or other service providers that
have entered into an agreement with the DSC or Driehaus Mutual Funds may enter
purchase orders on behalf of their customers by phone, with payment to follow
within several days as specified in the agreement. Such purchase orders will be
effective at the net asset value next determined after receipt of the telephone
purchase order. It is the responsibility of the broker-dealer, financial
institution or other service provider to place the order on a timely basis. If
payment is not received within the time specified in the agreement, the
broker-dealer, financial institution or other service provider could be held
liable for any resulting fees or losses.

HOW TO REDEEM SHARES

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
TO REDEEM SOME OR ALL OF YOUR SHARES
- ---------------------------------------------------------------------------------------------------
<S> <C>
BY LETTER - Write a letter of instruction indicating the Fund name,
your account number, the name(s) in which the account is
registered, and the number of shares or dollar amount you
wish to redeem.
- Include all signatures and any additional documents that
may be required (see Additional Redemption Policies below).
- Mail the materials to Driehaus Mutual Funds (address
below).
- A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
letter of instruction.
- ---------------------------------------------------------------------------------------------------
BY TELEPHONE - See the section "Telephonic Redemption"
- ---------------------------------------------------------------------------------------------------
</TABLE>

ADDITIONAL REDEMPTION POLICIES

SELLING SHARES IN WRITING. The following additional items must be included in
your redemption request:

1) The request must be signed by the shareholder(s) exactly as the shares
are registered;

2) The signatures on the written redemption request must be guaranteed by a
commercial bank, trust company, savings and loan association, federal
savings bank, member firm of a national securities exchange or other
eligible financial institution;

3) Corporations and associations must submit, with each request, a
completed certificate of authorization in a form of resolution
acceptable to the Fund; and

4) The request must include other supporting legal documents as required
from organizations, executors, administrators, trustees or others acting
on accounts not registered in their names.

TELEPHONIC REDEMPTION. Driehaus Mutual Funds, in its sole discretion, may accept
telephonic redemption requests from broker-dealers, financial institutions,
other service providers, or, under certain circumstances, from accounts that
contain over $1,000,000 at the time the redemption request is made. Because of

32
<PAGE> 35

increased telephone volume, investors may experience difficulty in implementing
a telephone redemption during periods of dramatic economic or market changes.

Driehaus Mutual Funds may refuse a telephone redemption request if it believes
it is advisable to do so. Investors will bear the risk of loss from fraudulent
or unauthorized instructions received over the telephone provided the Driehaus
Mutual Funds reasonably believes that the instructions are genuine. Driehaus
Mutual Funds and its transfer agent employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. Driehaus Mutual Funds may
incur liability if it does not follow these procedures.

CANCELLATION. A shareholder may not cancel or revoke a redemption order once
instructions have been received and accepted. Driehaus Mutual Funds cannot
accept a redemption request that specifies a particular date or price for
redemption or any special conditions.

REDEMPTIONS BY THE FUND. Driehaus Mutual Funds reserves the right to redeem
shares in any account and send the proceeds to the owner if immediately after a
redemption, the shares in the account do not have a value of at least $50,000. A
shareholder would be notified that the account is below the minimum and would be
allowed 30 days to increase the account before the request is processed.

EXECUTION OF REQUESTS

If an order is placed at or prior to the close of regular trading on the New
York Stock Exchange (the "NYSE") (3:00 p.m., Central time) on any business day,
the purchase of shares is executed at the net asset value determined as of the
closing time that day. If the order is placed after that time, it will be
effected on the next business day.

A redemption order will be executed at the price which is the net asset value
determined after proper redemption instructions are received (see "How to Redeem
Shares" chart). The redemption price received depends upon the Fund's net asset
value per share at the time of redemption. Therefore, it may be more or less
than the price originally paid for the shares and may result in a realized
capital gain or loss.

The Fund will generally mail payment for shares redeemed within seven days after
proper instructions are received. If requested, the Fund will pay proceeds by
wire, usually by the next business day. Driehaus Mutual Funds is not responsible
for the efficiency of the federal wire system or the shareholder's financial
services firm or bank. The Fund currently charges a shareholder $25 for wire
transfers. The shareholder is responsible for any charges imposed by the
shareholder's firm or bank. There is a $50,000 wire redemption minimum.
Redemptions of shares within 15 days after they have been purchased by check may
be delayed until the payment for the purchase of those shares has been cleared.
Delays may be avoided if shares are purchased by certified or bank check, or by
wire transfer.

DIVIDEND AND ACCOUNT POLICIES

REINVESTMENT OF DISTRIBUTIONS. Dividends and distributions payable by a Fund are
automatically reinvested in additional shares of the Fund unless the investor
indicates otherwise on the application.

DISTRIBUTIONS AND TAXES

PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS. Each Fund pays its shareholders
dividends from its net investment income, and distributions from any capital
gain net income that it has realized. Distributions are generally paid once a
year. Each Fund intends to distribute at least 98% of any net investment income
for the calendar year plus 98% of capital gain net income realized from the sale
of securities net of any realized foreign exchange gains or losses during the 12
month period ended October 31 in that year, if any. Each Fund intends to
distribute any undistributed net investment income and capital gain net income
in the following year.

TAX STATUS OF DIVIDENDS AND OTHER DISTRIBUTIONS. Shareholders will be subject to
federal income tax at ordinary income tax rates on any dividends received that
are derived from investment company taxable

33
<PAGE> 36

income. Distributions of net capital gain, when designated as such by a Fund are
taxable to the shareholder as long-term capital gains, regardless of how long
shares are held. Distributions are taxable in the year they are paid, whether
they are taken in cash or reinvested in additional shares, except that certain
distributions declared in the last three months of the year and paid in the
following January are taxable as if paid on December 31.

TAXABILITY OF DISTRIBUTIONS

<TABLE>
<CAPTION>
TAX RATE FOR TAX RATE FOR
TYPE OF DISTRIBUTION 15% BRACKET 28% BRACKET OR ABOVE
-------------------- ------------ --------------------
<S> <C> <C>
Income Dividends ordinary income rate ordinary income rate
Short-term Capital gains ordinary income rate ordinary income rate
Long-term Capital gains 10% 20%
</TABLE>

Investment income received by each Fund from sources within foreign countries
may be subject to foreign income taxes withheld at the source. The United States
has entered into tax treaties with many foreign countries that entitle each Fund
to a reduced rate of tax or exemption from tax on such income. It is impossible
to determine the effective rate of foreign tax in advance since the amount of a
Fund's assets to be invested within various countries will fluctuate and the
extent to which tax refunds will be recovered is uncertain. Each Fund intends to
operate so as to qualify for treaty-reduced tax rates where applicable.

To the extent that a Fund is liable for foreign income taxes, the Fund may
operate so as to meet the requirements of the U.S. Internal Revenue Code to
"pass through" to the Fund's shareholders foreign income taxes paid, but there
can be no assurance that the Fund will be able to do so. If this election is
made, shareholders will be able to claim a credit or deduction on their income
tax returns for, and will be required to treat as part of the amounts
distributed to them, their pro rata portion of the income taxes paid by the Fund
to foreign countries (which taxes relate primarily to investment income). The
shareholders of the Fund may claim a credit by reason of the Fund's election,
subject to certain limitations imposed by the Code. Also, under the Code, no
deduction for foreign taxes may be claimed by individual shareholders who do not
elect to itemize deductions on their federal income tax returns, although such a
shareholder may claim a credit for foreign taxes and in any event will be
treated as having taxable income in the amount of the shareholder's pro rata
share of foreign taxes paid by the Fund. If a Fund does not make such an
election, the foreign taxes paid by the Fund will reduce the Fund's net
investment income.

BUYING A DISTRIBUTION. A distribution paid shortly after an investor purchases
shares in a Fund will reduce the net asset value of the shares by the amount of
the distribution, which nevertheless will be taxable to the shareholders even
though it represents a return of a portion of the shareholder's investment.

BACKUP WITHHOLDING. The Fund may be required to withhold federal income tax
("backup withholding") at a 31% rate from taxable dividend, capital gain
distributions and redemption proceeds paid to certain shareholders. Backup
withholding may be required if:

- An investor fails to furnish the investor's properly certified social
security or other tax identification number;

- An investor fails to certify that the investor's tax identification
number is correct or that the investor is not subject to backup
withholding due to the under-reporting of certain income; or

- The Internal Revenue Service informs the Fund that the investor's tax
identification number is incorrect.

These certifications are contained in the Application that should be completed
and returned when opening an account. Each Fund must promptly pay to the IRS all
amounts withheld. Therefore, it is usually not possible for a Fund to reimburse
a shareholder for amounts withheld. A shareholder may, however, claim the amount
withheld as a credit on the shareholder's federal income tax return.

The foregoing discussion of U.S. and foreign taxation is not intended to be a
full discussion of income tax laws and their effect on shareholders. U.S. and
foreign shareholders should consult their tax advisers as to the tax
consequences of ownership of any Fund shares.
34
<PAGE> 37

- --------------------------------------------------------------------------------

FOR MORE INFORMATION
- --------------------------------------------------------------------------------

More information on these Funds is available without charge, upon request,
including the following:

ANNUAL/SEMI-ANNUAL REPORTS

The annual and semi-annual reports to shareholders describes the Fund's
performance, lists portfolio holdings and contains a letter from the Fund's
Adviser discussing recent market conditions, economic trends and Fund strategies
that significantly affected the Funds' performance during the Funds' last fiscal
year. Management's discussion of Fund performance is incorporated by reference
into this prospectus from the reports to shareholders.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI provides more details about the Fund and its policies. A current SAI is
on file with the Securities and Exchange Commission and is incorporated by
reference.

TO OBTAIN INFORMATION:

BY TELEPHONE
Call 1-800-560-6111

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1940 Act File No. 811-07655
<PAGE> 38

Statement of Additional Information Dated December 23, 1998, as Supplemented
January 25, 1999

DRIEHAUS MUTUAL FUNDS
25 East Erie Street
Chicago, Illinois 60611
1-800-560-6111

DRIEHAUS INTERNATIONAL GROWTH FUND
DRIEHAUS INTERNATIONAL DISCOVERY FUND
DRIEHAUS EUROPEAN OPPORTUNITY FUND
DRIEHAUS ASIA PACIFIC GROWTH FUND
DRIEHAUS EMERGING MARKETS GROWTH FUND

This Statement of Additional Information is not a prospectus, but
provides additional information that should be read in conjunction with the
Funds' prospectus dated December 23, 1998, as supplemented January 25, 1999 and
any other supplements thereto ("Prospectus"). The Prospectus may be obtained at
no charge by telephoning 1-800-560-6111.

TABLE OF CONTENTS

PAGE
----
<S> <C>
GENERAL INFORMATION AND HISTORY .................................. B-2
PORTFOLIO INVESTMENTS AND RISK CONSIDERATIONS .................... B-2
INVESTMENT RESTRICTIONS .......................................... B-12
PURCHASES AND REDEMPTIONS ........................................ B-13
NET ASSET VALUE .................................................. B-13
MANAGEMENT ....................................................... B-16
PRINCIPAL SHAREHOLDERS ........................................... B-18
INVESTMENT ADVISORY SERVICES ..................................... B-19
DISTRIBUTOR ...................................................... B-20
ADMINISTRATOR .................................................... B-20
CUSTODIAN ........................................................ B-20
TRANSFER AGENT ................................................... B-21
INDEPENDENT PUBLIC ACCOUNTANTS ................................... B-21
PORTFOLIO TRANSACTIONS ........................................... B-21
ADDITIONAL INCOME TAX CONSIDERATIONS ............................. B-23
INVESTMENT PERFORMANCE ........................................... B-26
APPENDIX --RATINGS ............................................... A-1
</TABLE>

The financial statements appearing in the Driehaus International Growth
Fund Annual Report to Shareholders for the year-ended August 31, 1998, and the
combined Driehaus Asia Pacific Growth Fund and Driehaus Emerging Markets Growth
Fund Annual Reports for the fiscal year-ended September 30, 1998 (the "Reports")
are incorporated herein by reference. These Reports accompany this document.

<PAGE> 39

GENERAL INFORMATION AND HISTORY

Driehaus International Growth Fund, Driehaus International Discovery
Fund, Driehaus European Opportunity Fund, Driehaus Asia Pacific Growth Fund, and
Driehaus Emerging Markets Growth Fund (individually, a "Fund" and collectively
"Funds") are each series of the Driehaus Mutual Funds (the "Trust"), an open-end
management investment company. Driehaus Capital Management, Inc. (the "Adviser")
provides management and investment advisory services to each Fund. The Trust is
a Delaware business trust organized under an Agreement and Declaration of Trust
("Declaration of Trust") dated May 31, 1996. The Declaration of Trust may be
amended by a vote of either the Fund's shareholders or its trustees. Driehaus
Mutual Funds may issue an unlimited number of shares, in one or more series or
classes as its Board of Trustees (the "Board") may authorize. Currently, five
series are authorized and outstanding. In October 1996, the Driehaus
International Growth Fund succeeded to the assets of the Driehaus International
Large Cap Fund, L.P. The Driehaus Asia Pacific Growth Fund and Driehaus Emerging
Markets Growth Fund each commenced operations on December 31, 1997. The Driehaus
International Discovery Fund and the Driehaus European Opportunity Fund
commenced operations on December 31, 1998.

Each share of a Fund is entitled to participate pro rata in any
dividends and other distributions declared by the Board on shares of that
series, and all shares of a Fund have equal rights in the event of liquidation
of that series.

As a business trust, the Trust is not required to hold annual
shareholder meetings. However, special meetings may be called for purposes such
as electing or removing trustees, changing fundamental policies, or approving an
investment advisory contract. If requested to do so by the holders of at least
10% of the Trust's outstanding shares, the Trust will call a special meeting for
the purpose of voting upon the question of removal of a trustee or trustees and
will assist in the communication with other shareholders as if the Trust were
subject to Section 16(c) of the Investment Company Act of 1940, as amended (the
"1940 Act"). All shares of all series of Driehaus Mutual Funds are voted
together in the election of trustees. On any other matter submitted to a vote of
shareholders, shares are voted in the aggregate and not by individual Funds,
except that shares are voted by an individual Fund when required by the 1940 Act
or other applicable law, or when the Board of Trustees determines that the
matter affects only the interests of one or more Funds, in which case
shareholders of the unaffected Funds are not entitled to vote on such matters.

B-2

<PAGE> 40

PORTFOLIO INVESTMENTS AND RISK CONSIDERATIONS

FOREIGN SECURITIES

The Funds invest primarily in foreign securities, which may entail a
greater degree of risk (including risks relating to exchange rate fluctuations,
tax provisions or expropriation of assets) than does investment in securities of
domestic issuers. The Funds may also purchase foreign securities in the form of
American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
Global Depositary Receivables ("GDRs") or other securities representing
underlying shares of foreign issuers. Positions in these securities are not
necessarily denominated in the same currency as the common stocks into which
they may be converted. ADRs are receipts typically issued by an American bank or
trust company evidencing ownership of the underlying securities. EDRs and GDRs
are European receipts evidencing a similar arrangement. Generally, ADRs are
designed for the U.S. securities markets and EDRs and GDRS are designed for use
in European and other foreign securities markets. The Funds may invest in
sponsored or unsponsored ADRs. In the case of an unsponsored ADR, each Fund is
likely to bear its proportionate share of the expenses of the depository and it
may have greater difficulty in receiving shareholder communications than it
would have with a sponsored ADR.

With respect to equities that are issued by foreign issuers or
denominated in foreign currencies, each Fund's investment performance is
affected by the strength or weakness of the U.S. dollar against these
currencies. For example, if the dollar falls in value relative to the Japanese
yen, the dollar value of a yen-denominated stock held in the Fund will rise even
though the price of the stock remains unchanged. Conversely, if the dollar rises
in value relative to the yen, the dollar value of the yen-denominated stock will
fall. (See discussion of transaction hedging and portfolio hedging under
"Currency Exchange Transactions.")

Risks. Investors should understand and consider carefully the risks
involved in foreign investing. Investing in foreign securities and positions
which are generally denominated in foreign currencies, and utilization of
forward currency contracts involve certain considerations comprising both risks
and opportunities not typically associated with investing in U.S. securities.
These considerations include: fluctuations in exchange rates of foreign
currencies; possible imposition of exchange control regulation or currency
restrictions that would prevent cash from being brought back to the United
States; less public information with respect to issuers of securities; less
governmental supervision of stock exchanges, securities brokers and issuers of
securities; lack of uniform accounting, auditing and financial reporting
standards; lack of uniform settlement periods and trading practices; less
liquidity and frequently greater price volatility in foreign markets than in the
United States; possible imposition of foreign taxes; investment in securities of
companies in developing as well as developed countries; and sometimes less
advantageous legal, operational and financial protections applicable to foreign
subcustodial arrangements.

Although the Funds will try to invest in companies and governments of
countries having stable political environments, there is the possibility of
expropriation or confiscatory taxation, seizure or

B-3
<PAGE> 41

nationalization of foreign bank deposits or other assets, establishment of
exchange controls, the adoption of foreign government restrictions, or other
adverse political, social or diplomatic developments that could affect
investment in these nations.

Currency Exchange Transactions. Currency exchange transactions may be
conducted either through forward currency contracts ("forward currency
contracts") or on a spot (i.e., cash) basis at the spot rate for purchasing
currency prevailing in the foreign exchange market. Forward currency contracts
are contractual agreements to purchase or sell a specified currency at a
specified future date (or within a specified time period) and price set at the
time of the contract. Forward currency contracts are usually entered into with
banks and broker-dealers, are not exchange traded and are usually for less than
one year, but may be renewed.

Forward currency transactions may involve currencies of the different
countries in which the Funds may invest and serve as hedges against possible
variations in the exchange rate between these currencies. Each Fund's currency
transactions are limited to transaction hedging and portfolio hedging involving
either specific transactions or portfolio positions, except to the extent
described below under " -- Synthetic Foreign Money Market Positions."
Transaction hedging is the purchase or sale of forward currency contracts with
respect to specific receivables or payables of each Fund accruing in connection
with settlement of the purchase and sale of its portfolio securities. Portfolio
hedging is the use of forward currency contracts with respect to portfolio
security positions denominated or quoted in a particular currency. Portfolio
hedging allows the Adviser to limit or reduce exposure in a foreign currency by
entering into a forward contract to sell such foreign currency (or another
foreign currency that acts as a proxy for that currency) so that the U.S. dollar
value of certain underlying foreign portfolio securities can be approximately
matched by an equivalent U.S. dollar liability. Each Fund may not engage in
portfolio hedging with respect to the currency of a particular country to an
extent greater than the aggregate market value (at the time of making such sale)
of the securities held in its portfolio denominated or quoted in that particular
currency, except that each Fund may hedge all or part of its foreign currency
exposure through the use of a basket of currencies or a proxy currency where
such currency or currencies act as an effective proxy for other currencies. In
such a case, each Fund may enter into a forward contract where the amount of the
foreign currency to be sold exceeds the value of the securities denominated in
such currency. The use of this basket hedging technique may be more efficient
and economical than entering into separate forward currency contracts for each
currency held in each Fund. The Funds may not engage in "speculative" currency
exchange transactions.

At the maturity of a forward contract to deliver a particular currency,
each Fund may either sell the portfolio security related to such contract and
make delivery of the currency, or retain the security and either acquire the
currency on the spot market or terminate its contractual obligation to deliver
the currency by purchasing an offsetting contract with the same currency trader
obligating it to purchase on the same maturity date the same amount of the
currency.

B-4
<PAGE> 42

It is impossible to forecast with absolute precision the market value
of portfolio securities at the expiration of a forward contract. Accordingly, it
may be necessary for a Fund to purchase additional currency on the spot market
(and bear the expense of such purchase) if the market value of the security is
less than the amount of currency the Fund is obligated to deliver and if a
decision is made to sell the security and make delivery of the currency.
Conversely, it may be necessary to sell on the spot market some of the currency
received upon the sale of the portfolio security if its market value exceeds the
amount of currency a Fund is obligated to deliver.

If a Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. If a Fund engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell the
currency. Should forward prices decline during the period between the Fund's
entering into a forward contract for the sale of a currency and the date it
enters into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Fund will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell. A default on the contract would deprive the Fund of unrealized
profits or force the Fund to cover its commitments for purchase or sale of
currency, if any, at the current market price.

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for a Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates. The cost to a Fund of
engaging in currency exchange transactions varies with such factors as the
currency involved, the length of the contract period and prevailing market
conditions. Since currency exchange transactions are usually conducted on a
principal basis, no fees or commissions are involved.

Synthetic Foreign Money Market Positions. Each Fund may invest in money
market instruments denominated in foreign currencies. In addition to, or in lieu
of, such direct investment, each Fund may construct a synthetic foreign money
market position by (a) purchasing a money market instrument denominated in one
currency, generally U.S. dollars, and (b) concurrently entering into a forward
contract to deliver a corresponding amount of that currency in exchange for a
different currency on a future date and at a specified rate of exchange. For
example, a synthetic money market position in Japanese yen could be constructed
by purchasing a U.S. dollar money market instrument, and entering concurrently
into a forward contract to deliver a corresponding amount of U.S. dollars in
exchange for Japanese yen on a specified date and at a specified rate of
exchange. Because of the availability of a variety of highly liquid short-term
U.S. dollar money market instruments, a synthetic money market position
utilizing such U.S. dollar instruments may offer greater liquidity than direct
investment in foreign currency money market instruments. The result of a direct
investment in a foreign currency and a concurrent construction of a synthetic
position in such foreign currency, in terms of both income yield and gain or
loss from

B-5
<PAGE> 43

changes in currency exchange rates, in general should be similar, but would not
be identical because the components of the alternative investments would not be
identical. Except to the extent a synthetic foreign money market position
consists of a money market instrument denominated in a foreign currency, the
synthetic foreign money market position shall not be deemed a "foreign security"
for purposes of the policy that, under normal conditions, the International
Growth Fund will invest at least 65% of its total assets in at least three
countries other than the United States.

LENDING OF PORTFOLIO SECURITIES

Subject to restriction (3) under "Investment Restrictions" in this
Statement of Additional Information, each Fund may lend its portfolio securities
to broker-dealers and banks. Any such loan must be continuously secured by
collateral in cash or cash equivalents maintained on a current basis in an
amount at least equal to the market value of the securities loaned by that Fund.
Each Fund would continue to receive the equivalent of the interest or dividends
paid by the issuer on the securities loaned, and would also receive an
additional return that may be in the form of a fixed fee or a percentage of the
collateral. The Fund would have the right to call the loan and obtain the
securities loaned at any time on notice of not more than five business days. The
Fund would not have the right to vote the securities during the existence of the
loan but would call the loan to permit voting of the securities if, in the
Adviser's judgment, a material event requiring a shareholder vote would
otherwise occur before the loan was repaid. In the event of bankruptcy or other
default of the borrower, the Fund could experience both delays in liquidating
the loan collateral or recovering the loaned securities and losses, including
(a) possible decline in the value of the collateral or in the value of the
securities loaned during the period while the Fund seeks to enforce its rights
thereto, (b) possible subnormal levels of income and lack of access to income
during this period, and (c) expenses of enforcing its rights.

REPURCHASE AGREEMENTS

Each Fund may invest in repurchase agreements, provided that it will
not invest more than 15% of net assets in repurchase agreements maturing in more
than seven days and any other illiquid securities. A repurchase agreement is a
sale of securities to the Fund in which the seller agrees to repurchase the
securities at a higher price, which includes an amount representing interest on
the purchase price, within a specified time. In the event of bankruptcy of the
seller, the Fund could experience both losses and delays in liquidating its
collateral.

WARRANTS

The Fund may purchase warrants, which are instruments that give holders
the right, but not the obligation, to buy shares of a company at a given price
during a specified period. Warrants are generally sold by companies intending to
issue stock in the future, or by those seeking to raise cash by selling shares
held in reserve.

B-6

<PAGE> 44

SHORT SALES

The Funds may make short sales "against the box." In a short sale, a
Fund sells a borrowed security and is required to return the identical security
to the lender. A short sale "against the box" involves the sale of a security
with respect to which the Fund already owns an equivalent security in kind and
amount. A short sale "against the box" enables each Fund to obtain the current
market price of a security that it desires to sell but is unavailable for
settlement.

RULE 144A SECURITIES

The Funds may purchase securities that have been privately placed but
that are eligible for purchase and sale under Rule 144A under the Securities Act
of 1933 (the "1933 Act"). That Rule permits certain qualified institutional
buyers, such as the Funds, to trade in privately placed securities that have not
been registered for sale under the 1933 Act. The Adviser, under the supervision
of the Board of Trustees, will consider whether securities purchased under Rule
144A are illiquid and thus subject to each Fund's restriction of investing no
more than 15% of its net assets in illiquid securities. A determination of
whether a Rule 144A security is liquid or not is a question of fact. In making
this determination, the Adviser will consider the trading markets for the
specific security, taking into account the unregistered nature of a Rule 144A
security. In addition, the Adviser will consider the (1) frequency of trades and
quotes, (2) number of dealers and potential purchasers, (3) dealer undertakings
to make a market, and (4) nature of the security and of marketplace trades
(e.g., the time needed to dispose of the security, the method of soliciting
offers, and the mechanics of transfer). The liquidity of Rule 144A securities
will be monitored and, if as a result of changed conditions, it is determined
that a Rule 144A security is no longer liquid, each Fund's holdings of illiquid
securities would be reviewed to determine what, if any, steps are required to
assure that each Fund does not invest more than 15% of its assets in illiquid
securities. Investing in Rule 144A securities could have the effect of
increasing the amount of a Fund's assets invested in illiquid securities if
qualified institutional buyers are unwilling to purchase such securities.

LINE OF CREDIT

Subject to restriction (4) under "Investment Restrictions" in this
Statement of Additional Information, Driehaus Mutual Funds has established a
line of credit with a major bank in order to permit borrowing on a temporary
basis to meet share redemption requests in circumstances in which temporary
borrowing may be preferable to liquidation of portfolio securities. Currently
the line of credit is available to the Driehaus International Growth Fund.

PORTFOLIO TURNOVER

Portfolio turnover rate is commonly measured by dividing the lesser of
total purchases or sales for the period under consideration by the average
portfolio value (i.e.,

B-7
<PAGE> 45

the cumulative total investment in the account at the end of each month, divided
by the number of months under consideration).

DERIVATIVES

Consistent with its objective, each Fund may invest in a broad array of
financial instruments and securities, commonly known as derivatives. The Funds
may enter into conventional exchange-traded and nonexchange-traded options,
futures contracts, futures options, swaps and similar transactions, such as
caps, floors and collars, involving or relating to currencies, securities,
interest rates, prices or other items. In each case, the value of the instrument
or security is "derived" from the performance of an underlying asset or a
"benchmark" such as a security, an index, an interest rate or a currency.

Derivatives are most often used to manage investment risk or to create
an investment position indirectly because they are more efficient or less costly
than direct investment that cannot be readily established directly due to
portfolio size, cash availability or other factors. They also may be used in an
effort to enhance portfolio returns.

The successful use of derivatives depends on the Adviser's ability to
correctly predict changes in the levels and directions of movements in currency
exchange rates, security prices, interest rates and other market factors
affecting the derivative itself or the value of the underlying asset or
benchmark. In addition, correlations in the performance of an underlying asset
to a derivative may not be well established. Finally, privately negotiated and
over-the-counter derivatives may not be as well regulated and may be less
marketable than exchange-traded derivatives.

A swap transaction is an individually negotiated, nonstandardized
agreement between two parties to exchange cash flows (and sometimes principal
amounts) measured by different interest rates, exchange rates, indices or
prices, with payments generally calculated by reference to a principal
("notional") amount or quantity. In general, swaps are agreements pursuant to
which a fund contracts with a bank or a broker/dealer to receive a return based
On or indexed to the performance of an individual security or a basket of
securities. The fund usually will enter into swaps on a net basis, i.e., The two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the fund receiving or paying, as the case may
be, only the net amount of the two payments. The adviser and the fund believe
such obligations do not constitute senior securities under the 1940 act, and,
accordingly, will not treat them as being subject to its borrowing restrictions.
swap contracts are not traded on exchanges; rather, banks and dealers act as
principals in these markets. As a result, the fund will be subject to the risk
of the inability or refusal to perform with respect to such contracts on the
part of the counterparties with which the fund trades. If there is a default by
a counterparty, the fund may have contractual remedies pursuant to the
agreements related to the transaction. The swap market is generally not
regulated by any governmental authority. Participants in the swap markets are
not required to make continuous markets in the swap contracts they trade.

B-8
<PAGE> 46

The Funds intend to use interest rate, currency and index swaps as
hedges and not as speculative investments and will not sell interest rate caps
or floors where it does not own securities or other instruments providing the
income stream the Fund may be obligated to pay. Interest rate swaps involve the
exchange by a Fund with another party of their respective commitments to pay or
receive interest, e.g., an exchange of floating rate payments for fixed rate
payments with respect to a notional amount of principal. A currency swap is an
agreement to exchange cash flows on a notional amount of two or more currencies
based on the relative value differential among them. An index swap is an
agreement to swap cash flows on a notional amount based on changes in the values
of the reference indices. The purchase of a cap entitles the purchaser to
receive payments on a notional principal amount from the party selling such cap
to the extent that a specified index exceeds a predetermined interest rate or
amount. The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount. A collar is
a combination of a cap and a floor that preserves a certain return within a
predetermined range of interest rates or values.

With respect to swaps, the Fund will accrue the net amount of the
excess, if any, of its obligations over its entitlements with respect to each
swap on a daily basis and will segregate an amount of cash or liquid securities
having a value equal to the accrued excess. Caps, floors and collars require
segregation of assets with a value equal to the Fund's net obligation, if any.

Options on Securities and Indexes. The Funds may purchase and sell put
options and call options on securities, indexes or foreign currencies in
standardized contracts traded on recognized securities exchanges, boards of
trade or similar entities, or quoted on NASDAQ. The Funds may purchase
agreements, sometimes called cash puts, that may accompany the purchase of a new
issue of bonds from a dealer.

B-9
<PAGE> 47

An option on a security (or index) is a contract that gives the
purchaser (holder) of the option, in return for a premium, the right to buy from
(call) or sell to (put) the seller (writer) of the option the security
underlying the option (or the cash value of the index) at a specified exercise
price at any time during the term of the option (normally not exceeding nine
months). The writer of an option on an individual security or on a foreign
currency has the obligation upon exercise of the option to deliver the
underlying security or foreign currency upon payment of the exercise price or to
pay the exercise price upon delivery of the underlying security or foreign
currency. Upon exercise, the writer of an option on an index is obligated to pay
the difference between the cash value of the index and the exercise price
multiplied by the specified multiplier for the index option. (An index is
designed to reflect specified facets of a particular financial or securities
market, a specific group of financial instruments or securities, or certain
economic indicators.)

The Funds will write call options and put options only if they are
"covered." For example, in the case of a call option on a security, the option
is "covered" if the Fund owns the security underlying the call or has an
absolute and immediate right to acquire that security without additional cash
consideration (or, if additional cash consideration is required, cash or cash
equivalents in such amount are held in a segregated account by its custodian)
upon conversion or exchange of other securities held in its portfolio.

If an option written by a Fund expires, the Fund realizes a capital
gain equal to the premium received at the time the option was written. If an
option purchased by a Fund expires, the Fund realizes a capital loss equal to
the premium paid.

Prior to the earlier of exercise or expiration, an option may be closed
out by an offsetting purchase or sale of an option of the same series (type,
exchange, underlying security or index, exercise price, and expiration). There
can be no assurance, however, that a closing purchase or sale transaction can be
effected when a Fund desires.

A Fund will realize a capital gain from a closing purchase transaction
if the cost of the closing option is less than the premium received from writing
the option, or, if it is more, a Fund will realize a capital loss. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, a Fund will realize a capital gain, or, if it is less, a
Fund will realize a capital loss. The principal factors affecting the market
value of a put or a call option include supply and demand, interest rates, the
current market price of the underlying security or index in relation to the
exercise price of the option, the volatility of the underlying security or index
and the time remaining until the expiration date.

A put or call option purchased by a Fund is an asset of that Fund,
valued initially at the premium paid for the option. The premium received for an
option written by a Fund is recorded as a deferred credit. The value of an
option purchased or written is marked-to-market daily and is valued at the
closing price on the exchange on which it is traded or, if not traded on an
exchange or no closing price is available, at the mean between the last bid and
asked prices.

B-10

<PAGE> 48

There are several risks associated with transactions in options. For
example, there are significant differences between the securities markets, the
currency markets, and the options markets that could result in an imperfect
correlation between these markets, causing a given transaction not to achieve
its objectives. A decision as to whether, when and how to use options involves
the exercise of skill and judgment, and even a well-conceived transaction may be
unsuccessful to some degree because of market behavior or unexpected events.

There can be no assurance that a liquid market will exist when a Fund
seeks to close out an option position. If a Fund were unable to close out an
option that it had purchased on a security, it would have to exercise the option
in order to realize any profit or the option would expire and become worthless.
If a Fund were unable to close out a covered call option that it had written on
a security, it would not be able to sell the underlying security until the
option expired. As the writer of a covered call option on a security, a Fund
forgoes, during the option's life, the opportunity to profit from increases in
the market value of the security covering the call option above the sum of the
premium and the exercise price of the call.

If trading were suspended in an option purchased or written by a Fund,
the Fund would not be able to close out the option. If restrictions on exercise
were imposed, a Fund might be unable to exercise an option it has purchased.

Futures Contracts and Options on Futures Contracts. The Funds may use
interest rate futures contracts, index futures contracts, and foreign currency
futures contracts. An interest rate, index or foreign currency futures contract
provides for the future sale by one party and purchase by another party of a
specified quantity of a financial instrument or the cash value of an index(1) at
a specified price and time. A public market exists in futures contracts covering
a number of indexes (including, but not limited to, the Standard & Poor's 500
Index, the Value Line Composite Index, and the New York Stock Exchange Composite
Index) as well as financial instruments (including, but not limited to, U.S.
Treasury bonds, U.S. Treasury notes, Eurodollar certificates of deposit, and
foreign currencies). Other index and financial instrument futures contracts are
available and it is expected that additional futures contracts will be developed
and traded.

The Funds may purchase and write call and put futures options. Futures
options possess many of the same characteristics as options on securities,
indexes and foreign currencies (discussed above). A futures option gives the
holder the right, in return for the premium paid, to assume a long position
(call) or short position (put) in a futures contract at a specified exercise
price at any time during the period of the option. Upon exercise of a call
option, the holder acquires a long position in the futures contract and the
writer is assigned the opposite short position. In the case of a put option, the
opposite is true. A Fund

1 A futures contract on an index is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to
the difference between the value of the index at the close of the last
trading day of the contract and the price at which the index contract
was originally written. Although the value of a securities index is a
function of the value of certain specified securities, no physical
delivery of those securities is made.

B-11

<PAGE> 49

might, for example, use futures contracts to hedge against or gain exposure to
fluctuations in the general level of stock prices, anticipated changes in
interest rates or currency fluctuations that might adversely affect either the
value of the Fund's securities or the price of the securities that the Fund
intends to purchase. Although other techniques could be used to reduce or
increase the Fund's exposure to stock price, interest rate and currency
fluctuations, the Fund may be able to achieve its exposure more effectively and
perhaps at a lower cost by using futures contracts and futures options.

The Fund will only enter into futures contracts and futures options
that are standardized and traded on an exchange, board of trade or similar
entity, or quoted on an automated quotation system.

The success of any futures transaction depends on the Adviser correctly
predicting changes in the level and direction of stock prices, interest rates,
currency exchange rates and other factors. Should those predictions be
incorrect, a Fund's return might have been better had the transaction not been
attempted; however, in the absence of the ability to use futures contracts, the
Adviser might have taken portfolio actions in anticipation of the same market
movements with similar investment results but, presumably, at greater
transaction costs.

When a purchase or sale of a futures contract is made by a Fund, the
Fund is required to deposit with its custodian (or broker, if legally permitted)
a specified amount of cash or U.S. Government securities or other securities
acceptable to the broker ("initial margin"). The margin required for a futures
contract is set by the exchange on which the contract is traded and may be
modified during the term of the contract. The initial margin is in the nature of
a performance bond or good faith deposit on the futures contract, which is
returned to the Fund upon termination of the contract, assuming all contractual
obligations have been satisfied. The Fund expects to earn interest income on its
initial margin deposits. A futures contract held by a Fund is valued daily at
the official settlement price of the exchange on which it is traded. Each day a
Fund pays or receives cash, called "variation margin," equal to the daily change
in value of the futures contract. This process is known as "marking-to-market."
Variation margin paid or received by a Fund does not represent a borrowing or
loan by the Fund but is instead settlement between the Fund and the broker of
the amount one would owe the other if the futures contract had expired at the
close of the previous day. In computing daily net asset value, each Fund will
mark-to-market its open futures positions.

Each Fund is also required to deposit and maintain margin with respect
to put and call options on futures contracts written by it. Such margin deposits
will vary depending on the nature of the underlying futures contract (and the
related initial margin requirements), the current market value of the option and
other futures positions held by the Fund.

Although some futures contracts call for making or taking delivery of
the underlying securities, usually these obligations are closed out prior to
delivery by offsetting purchases or sales of matching futures contracts (same
exchange, underlying security or index and delivery month). If an offsetting
purchase price is less than the original sale price, a Fund realizes a capital
gain, or if it is more, a Fund realizes a capital loss. Conversely, if an
offsetting sale price is more than the original purchase price, a

B-12
<PAGE> 50

Fund realizes a capital gain, or if it is less, a Fund realizes a capital loss.
The transaction costs must also be included in these calculations.

There are several risks associated with the use of futures contracts
and futures options. A purchase or sale of a futures contract may result in
losses in excess of the amount invested in the futures contract. In trying to
increase or reduce market exposure, there can be no guarantee that there will be
a correlation between price movements in the futures contract and in the
portfolio exposure sought. In addition, there are significant differences
between the securities and futures markets that could result in an imperfect
correlation between the markets, causing a given transaction not to achieve its
objectives. The degree of imperfection of correlation depends on circumstances
such as variations in speculative market demand for futures, futures options and
the related securities, including technical influences in futures and futures
options trading and differences between the securities markets and the
securities underlying the standard contracts available for trading. For example,
in the case of index futures contracts, the composition of the index, including
the issuers and the weighting of each issue, may differ from the composition of
a Fund's portfolio, and, in the case of interest rate futures contracts, the
interest rate levels, maturities and creditworthiness of the issues underlying
the futures contract may differ from the financial instruments held in a Fund's
portfolio. A decision as to whether, when and how to use futures contracts
involves the exercise of skill and judgment, and even a well-conceived
transaction may be unsuccessful to some degree because of market behavior or
unexpected stock price or interest rate trends.

Futures exchanges may limit the amount of fluctuation permitted in
certain futures contract prices during a single trading day. The daily limit
establishes the maximum amount that the price of a futures contract may vary
either up or down from the previous day's settlement price at the end of the
current trading session. Once the daily limit has been reached in a futures
contract subject to the limit, no more trades may be made on that day at a price
beyond that limit. The daily limit governs only price movements during a
particular trading day and therefore does not limit potential losses because the
limit may work to prevent the liquidation of unfavorable positions. For example,
futures prices have occasionally moved to the daily limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of positions and subjecting some holders of futures contracts to
substantial losses. Stock index futures contracts are not normally subject to
such daily price change limitations.

There can be no assurance that a liquid market will exist at a time
when a Fund seeks to close out a futures or futures option position. The Fund
would be exposed to possible loss on the position during the interval of
inability to close and would continue to be required to meet margin requirements
until the position is closed. In addition, many of the contracts discussed above
are relatively new instruments without a significant trading history. As a
result, there can be no assurance that an active secondary market will develop
or continue to exist.

Limitations on Options and Futures. If other options, futures contracts
or futures options of types other than those described herein are traded in the
future, a Fund may also use those investment vehicles, provided the Board of
Trustees determines that their use is consistent with the Fund's investment
objective.

B-13

<PAGE> 51

A Fund will not enter into a futures contract or purchase an option
thereon if, immediately thereafter, the initial margin deposits for futures
contracts held by the Fund plus premiums paid by it for open futures option
positions, less the amount by which any such positions are "in-the-money,"(2)
would exceed 5% of the Fund's total assets.

When purchasing a futures contract or writing a put option on a futures
contract, a Fund must maintain with its custodian (or broker, if legally
permitted) cash or cash equivalents (including any margin) equal to the market
value of such contract. When writing a call option on a futures contract, a Fund
similarly will maintain with its custodian cash or cash equivalents (including
any margin) equal to the amount by which such option is in-the-money until the
option expires or is closed out by the Fund.

A Fund may not maintain open short positions in futures contracts, call
options written on futures contracts or call options written on indexes if, in
the aggregate, the market value of all such open positions exceeds the current
value of the securities in its portfolio, plus or minus unrealized gains and
losses on the open positions, adjusted for the historical relative volatility of
the relationship between the portfolio and the positions. For this purpose, to
the extent a Fund has written call options on specific securities in its
portfolio, the value of those securities will be deducted from the current
market value of the securities portfolio.

In order to comply with Commodity Futures Trading Commission ("CFTC")
Regulation 4.5 and thereby avoid being deemed a "commodity pool operator," a
Fund will use commodity futures or commodity options contracts solely for bona
fide hedging purposes within the meaning and intent of CFTC Regulation 1.3(z),
or, with respect to positions in commodity futures and commodity options
contracts that do not come within the meaning and intent of CFTC Regulation
1.3(z), the aggregate initial margin and premiums required to establish such
positions will not exceed 5% of the fair market value of the assets of the Fund,
after taking into account unrealized profits and unrealized losses on any such
contracts it has entered into. In the case of an option that is in-the-money at
the time of purchase, the in-the-money amount (as defined in Section 190.01(x)
of the CFTC Regulations) may be excluded in computing such 5%.

INVESTMENT RESTRICTIONS

Each Fund operates under the following fundamental investment
restrictions, which, together with the investment objective and fundamental
policies, cannot be changed without the approval of a "majority of the
outstanding voting securities," which is defined in the 1940 Act to mean the
lesser of (i) 67% of a Fund's shares present at a meeting where more than 50% of
the outstanding shares are present in person or by proxy or (2) more than 50% of
a Fund's outstanding shares. Each Fund may not:

2 A call option is "in-the-money" if the value of the futures contract
that is the subject of the option exceeds the exercise price. A put
option is "in-the-money" if the exercise price exceeds the value of the
futures contract that is the subject of the option.

B-14

<PAGE> 52

(1) act as an underwriter of securities, except insofar as it
may be deemed an underwriter for purposes of the Securities Act of 1933
on disposition of securities acquired subject to legal or contractual
restrictions on resale;

(2) purchase or sell real estate (although it may purchase
securities secured by real estate or interests therein, or securities
issued by companies which invest in real estate or interests therein),
commodities or commodity contracts, except that it may enter into (a)
futures and options on futures and (b) forward currency contracts;

(3) make loans, but this restriction shall not prevent the
Fund from (a) buying a part of an issue of bonds, debentures, or other
obligations, (b) investing in repurchase agreements, or (c) lending
portfolio securities, provided that it may not lend securities if, as a
result, the aggregate value of all securities loaned would exceed 33
1/3% of its total assets (taken at market value at the time of such
loan);

(4) borrow, except that it may (a) borrow up to 33 1/3% of
its total assets, taken at market value at the time of such borrowing,
as a temporary measure for extraordinary or emergency purposes, but not
to increase portfolio income (the total of reverse repurchase
agreements and such borrowings will not exceed 33 1/3% of its total
assets, and the Fund will not purchase additional securities when its
borrowings, less proceeds receivable from sales of portfolio
securities, exceed 5% of its total assets) and (b) enter into
transactions in options, futures and options on futures;

(5) invest in a security if 25% or more of its total assets
(taken at market value at the time of a particular purchase) would be
invested in the securities of issuers in any particular industry,(3)
except that this restriction does not apply to securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities;
or

(6) issue any senior security except to the extent permitted
under the Investment Company Act of 1940.

Each Fund is also subject to the following nonfundamental restrictions
and policies, which may be changed by the Board of Trustees. Each Fund may not:

(a) invest in companies for the purpose of exercising control
or management;

(b) purchase, except for securities acquired as part of a
merger, consolidation or acquisition of assets, more than 3% of the
stock of another investment company (valued at time of purchase);

3 For purposes of this investment restriction, each Fund uses industry
classifications contained in Institutional Brokers Estimate System
("I/B/E/S") Sector Industry Group Classification, published by I/B/E/S,
an institutional research firm.

B-15

<PAGE> 53
(c) mortgage, pledge or hypothecate its assets, except as may
be necessary in connection with permitted borrowings or in connection
with options, futures and options on futures;

(d) purchase securities on margin (except for use of
short-term credits as are necessary for the clearance of transactions),
or sell securities short unless (i) the Fund owns or has the right to
obtain securities equivalent in kind and amount to those sold short at
no added cost or (ii) the securities sold are "when issued" or "when
distributed" securities which the Fund expects to receive in a
recapitalization, reorganization or other exchange for securities the
Fund contemporaneously owns or has the right to obtain and provided
that transactions in options, futures and options on futures are not
treated as short sales; and

(e) invest more than 15% of its net assets (taken at market
value at the time of a particular investment) in illiquid securities,
including repurchase agreements maturing in more than seven days.

PURCHASES AND REDEMPTIONS

Purchases and redemptions are discussed in the Prospectus under the
headings "How to Purchase Shares", "How to Redeem Shares" and "Net Asset Value",
and that information is incorporated herein by reference. The Prospectus
discloses that you may purchase (or redeem) shares through investment dealers or
other institutions. It is the responsibility of any such institution to
establish procedures insuring the prompt transmission to the Fund of any such
purchase order.

Each Fund's net asset value is determined on days on which the New York
Stock Exchange (the "NYSE") is open for trading. The NYSE is regularly closed on
Saturdays and Sundays and on New Year's Day, the third Monday in January, the
third Monday in February, Good Friday, the last Monday in May, Independence Day,
Labor Day, Thanksgiving, and Christmas. If one of these holidays falls on a
Saturday or Sunday, the NYSE will be closed on the preceding Friday or the
following Monday, respectively.

The Fund intends to pay all redemptions in cash and will pay cash for
all redemptions orders, limited in amount with respect to each shareholder of
record during any ninety-day period to the lesser of $250,000 or one percent of
the net assets of the relevant Fund, as measured at the beginning of such
period. However, redemptions in excess of such limit may be paid wholly or
partly by a distribution in kind of exchange-traded securities. If redemptions
were made in kind, the redeeming shareholders might incur transaction costs in
selling the securities received in the redemptions.

The Fund reserves the right to suspend or postpone redemptions of
shares of a Fund during any period when: (a) trading on the NYSE is restricted,
as determined by the Securities and Exchange Commission, or the NYSE is closed
for other than customary weekend and holiday closings; (b) the Securities and
Exchange Commission has by order permitted such suspension; or (c) an emergency,
as

B-16

<PAGE> 54

determined by the Securities and Exchange Commission, exists, making disposal of
portfolio securities or valuation of net assets of a Fund not reasonably
practicable.

NET ASSET VALUE

The net asset value of a share of a Fund is calculated by dividing (i)
the value of the securities held by the Fund (i.e., the value of its
investments), plus any cash or other assets, minus all liabilities (including
accrued estimated expenses on an annual basis), by (ii) the total number of
outstanding shares of the Fund. Investment securities, including ADRs, EDRs and
GDRs, that are traded on a stock exchange or on the NASDAQ National Market
System are valued at the last sale price as of the regular close of business on
the NYSE (3:00 p.m. Central time) on the day the securities are being valued, or
lacking any sales, at either (i) the last bid or ask prices or (ii) the mean
between the closing bid and asked prices. Other over-the-counter securities are
valued at the mean between the closing bid and asked prices. Net asset value
will not be determined on days when the NYSE is closed, unless, in the judgment
of the Board, the net asset values of a Fund should be determined on any such
day, in which case the determination will be made at 3:00 P.M. Central time.

In the event that the NYSE or the relevant national securities exchange
adopts different trading hours on a temporary basis, Fund net asset value will
be computed at the close of the exchange.

Trading in securities on most foreign securities exchanges and
over-the-counter markets is normally completed well before the close of the NYSE
except securities trading primarily on Central and South American exchanges.
Such securities are valued at the last sale price as of the regular close of the
relevant exchange. For securities that trade primarily on an exchange that
closes after the NYSE, the price of the security will be determined at 1:00 p.m.
Central time. In addition, foreign securities trading may not take place on all
business days and may occur in various foreign markets on days which are not
business days in domestic markets and on which net asset value is not
calculated. The calculation of net asset value may not take place
contemporaneously with the determination of the prices of portfolio securities
used in such calculation. Events affecting the values of portfolio securities
that occur between the time their prices are determined and the close of the
NYSE will not be reflected in the calculation of net asset value unless the
Adviser, by or under the direction of the Board of Trustees, deems that the
particular event would materially affect net asset value, in which case an
adjustment will be made. Assets or liabilities initially expressed in terms of
foreign currencies are translated prior to the next determination of the net
asset value into U.S. dollars at the spot exchange rates at 10:00 a.m. Central
time or at such other rates as the Adviser may determine to be appropriate in
computing net asset value.

Securities and assets for which market quotations are not readily
available, or for which the Adviser's Pricing Committee determines that the
foregoing methods do not accurately reflect current market value, are valued at
fair value as determined in good faith by or under the direction of the Board of
Trustees. Such valuations and procedures will be reviewed periodically by the
Board of Trustees.

B-17
<PAGE> 55

The Fund uses pricing services approved by its Board of Trustees.
Prices of equity securities provided by such services represent the last sale
price on the exchange where the security is primarily traded. Exchange rates of
currencies provided by such services are sourced, where possible, from
multi-contributor quotations. Normally, the rate will be based upon commercial
interbank bid and offer quotes. Representative rates are selected for each
currency based upon the latest quotation taken from contributors at short
intervals prior to pricing. Prices of bonds by such services represent
evaluations of the mean between current bid and asked market prices, may be
determined without exclusive reliance on quoted prices and may reflect
appropriate factors such as institution-size trading in similar groups of
securities, yield, quality, coupon rate, maturity, type of issue, individual
trading characteristics, indications of values from dealers and other market
data. Such services may use electronic data processing techniques and/or a
matrix system to determine valuations. The procedures of such services are
reviewed periodically by the officers of the Fund under the general supervision
and responsibility of its Board of Trustees, which may replace a service at any
time if it determines that it is in the best interests of the Funds to do so.

Long-term debt obligations are valued at the mean of representative
quoted bid and asked prices for such securities or, if such prices are not
available, at prices for securities of comparable maturity, quality and type;
however, when the Adviser deems it appropriate, prices obtained for the day of
valuation from a bond pricing service will be used, as discussed below. Debt
securities with maturities of 60 days or less are valued (i) at amortized cost
if their term to maturity from date of purchase is less than 60 days, or (ii) by
amortizing, from the 61st day prior to maturity, their value on the 61st day
prior to maturity if their term to maturity from date of purchase by a Fund is
more than 60 days, unless this is determined by the Fund's Board of Trustees not
to represent fair value. Repurchase agreements are valued at cost plus accrued
interest.

U.S. Government securities are traded in the over-the-counter market
and are valued at the mean between the last available bid and asked prices,
except that securities with a demand feature exercisable within one to seven
days are valued at par. Such valuations are based on quotations of one or more
dealers that make markets in the securities as obtained from such dealers, or on
the evaluation of a pricing service.

Options, futures contracts and options thereon, which are traded on
exchanges, are valued at their last sale or settlement price as of the close of
such exchanges or, if no sales are reported, at the mean between the last
reported bid and asked prices. If an options or futures exchange closes later
than 3:00 p.m. Central time, the options or futures traded on it are valued
based on the sale price, or on the mean between the bid and ask prices, as the
case may be, as of 3:00 p.m. Central time.

B-18
<PAGE> 56

MANAGEMENT

The following table sets forth certain information with respect to the
trustees and executive officers of the Fund:

POSITION(S) PRINCIPAL OCCUPATION(S)
NAME; ADDRESS AGE HELD WITH FUND DURING PAST FIVE YEARS
- ------------- --- -------------- ----------------------
<S> <C> <C> <C> <C>
Richard H. Driehaus*(1),(3) 56 Chairman of the Board; Chairman of the Board and Chief Executive
25 East Erie Street President Officer of the Adviser and Driehaus Securities
Chicago, IL 60611 Corporation; Chief Investment Officer;
Portfolio Manager of the Adviser

Francis J. Harmon(2) 56 Trustee Senior Account Executive - Labor Affairs, Blue
9910 South Seeley Avenue Cross-Blue Shield of Illinois
Chicago, IL 60643

Robert F. Moyer*(1) 50 Trustee, Senior Vice President and Chief Operating Officer of the
25 East Erie Street President Adviser and Driehaus Securities Corporation
Chicago, IL 60611 since 1995; Senior Vice President, Vice
President and Secretary prior thereto

A.R. Umans(1),(2) 71 Trustee Chairman of the Board and Chief Executive
1400 North 25th Avenue Officer, RHC/Spacemaster Corporation
Melrose Park, IL 60160 (manufacturing corporation)

Daniel F. Zemanek(2) 56 Trustee Consultant, real estate development, since
249 View Street August, 1998; Senior Vice President of Real
Mountain View, CA 94041 Estate, Una Mas Restaurants, Inc., from 1996 to
1998; brokered real estate loans for private
and institutional investors in California from
1991 to 1996; President, Shell Realty, from
1985-1991.

Arthur B. Mellin(3) 55 Advisory Board Member President, Mellin Securities Incorporated and
190 South LaSalle Street Mellin Asset Management, Inc.
Chicago, IL 60603
</TABLE>

B-19
<PAGE> 57
<TABLE>
<CAPTION>
POSITION(S) PRINCIPAL OCCUPATION(S)
NAME; ADDRESS AGE HELD WITH FUND DURING PAST FIVE YEARS
- ------------- --- -------------- ----------------------
<S> <C> <C> <C>
William R. Andersen 38 Vice President Senior Vice President and portfolio manager of
25 East Erie Street the Adviser; portfolio manager of the Adviser
Chicago, IL 60611 prior thereto

Diane L. Wallace 40 Vice President; Senior Vice President-Operations of the Adviser
25 East Erie Street Treasurer and Driehaus Securities Corporation, since
Chicago, IL 60611 1996; Vice President prior thereto

Mary H. Weiss 50 Vice President; Vice President, Secretary and Chief Legal
25 East Erie Street Secretary Counsel of the Adviser and Driehaus Securities
Chicago, IL 60611 Corporation since 1995; prior thereto,
Assistant Regional Director, U.S. Securities
and Exchange Commission

Robert H. Buchen 60 Vice President Vice President of marketing/account management
25 East Erie Street of the Adviser and Driehaus Securities
Chicago, IL 60611 Corporation since 1990

Martin A. Brown 37 Vice President Vice President of marketing/new business of the
25 East Erie Street Adviser and Driehaus Securities Corporation
Chicago, IL 60611 since 1995; prior thereto portfolio manager,
Continental Bank.

Dusko Culafic 40 Assistant Treasurer Vice President and Treasurer of the Adviser and
25 East Erie Street Driehaus Securities Corporation since 1996;
Chicago, IL 60611 Controller prior thereto

Jennifer L. Billingsley 35 Assistant Secretary Attorney with the Adviser since 1996; prior
25 East Erie Street thereto, associate of Sidley & Austin, a law
Chicago, IL 60611 firm

Cathy G. O'Kelly 45 Assistant Secretary Partner, Vedder, Price, Kaufman & Kammholz, a
222 N. LaSalle Street law firm
Chicago, IL 60601
</TABLE>

- ---------------
* Trustee who is an "interested person" of the Fund and of the Adviser,
as defined in the 1940 Act.

1 Member of the Executive Committee of the Board of Trustees, which is
authorized to exercise all powers of the Board with certain statutory
exceptions.

B-20
<PAGE> 58

2 Member of the Audit Committee of the Board, which makes recommendations
to the Board regarding the selection of auditors and confers with the
auditors regarding the scope and results of the audit.

3 Mr. Driehaus and Mr. Mellin are brothers-in-law.

Officers and trustees affiliated with the Adviser serve without any
compensation from the Fund. In compensation for their services to each Fund,
trustees who are not affiliates of the Fund or the Adviser are paid $2,500 for
each Board meeting attended and $500 for each committee meeting attended, and
are reimbursed for out-of-pocket expenses. The Fund has no retirement or pension
plans. The following table sets forth the compensation paid by the Fund during
the calendar year 1998 to each of the non-interested trustees:

<TABLE>
<CAPTION>
COMPENSATION
NAME OF TRUSTEE FROM THE FUND
--------------- -------------
<S> <C>
A.R. Umans $18,000

Daniel Zemanek $18,000

Francis J. Harmon(1) $2,500

Arthur B. Mellin(2) $18,000

</TABLE>

1 Mr. Harmon became a member of the Board of Trustees on December 21,
1998.

2 Mr. Mellin received this compensation in his former capacity as
Trustee. He receives no compensation from the Fund in his capacity as
an Advisory Board Member, but is compensated by the Adviser.

As of November 30, 1998, the Fund's officers and trustees as a group
owned (or held a shared investment or voting power with respect to) 165,710
shares or 0.9% of the Driehaus International Growth Fund, 171,723 shares or
34.2% of the Driehaus Asia Pacific Growth Fund, and 1,000 shares or 0.2% of the
Driehaus Emerging Markets Growth Fund.

As of December 18, 1998, Robert F. Moyer, the initial shareholder of
the Driehaus European Opportunity Fund and the Driehaus International Discovery
Fund, held 1 share or 100% of each Fund.

B-22

<PAGE> 59

PRINCIPAL SHAREHOLDERS

As of November 30, 1998, no persons owned of record or beneficially 5%
or more of the shares of a Fund except the persons indicated below.

NAME AND ADDRESS FUND % OWNED
- ---------------- ---- -------
<S> <C> <C>
Mac & Co. Driehaus International Growth Fund 8.3%
Mutual Fund Operations
P.O. Box 3198
Pittsburgh, PA 15320-3198

US Bancorp Trust Company Driehaus International Growth Fund 7.8%
P.O. Box 520
Johnston, PA 15907-0520

Richard H. Driehaus Driehaus Asia Pacific Growth Fund 33.6%
25 East Erie Street
Chicago, IL 60611
</TABLE>

B-22

<PAGE> 60

NAME AND ADDRESS FUND % OWNED
- ---------------- ---- -------
<S> <C> <C>
Compass Pass-Through LP Driehaus Asia Pacific Growth Fund 31.4%
888 S.W. Fifth Avenue
1190 Pioneer Tower
Portland, OR 27204

The Richard H. Driehaus Foundation Driehaus Asia Pacific Growth Fund 22.6%
25 East Erie Street
Chicago, IL 60611

The Richard H. Driehaus Foundation Driehaus Emerging Markets Growth Fund 58.9%
25 East Erie Street
Chicago, IL 60611

Wesley West Long Term Partnership LP Driehaus Emerging Markets Growth Fund 24.3%
P.O. Box 7
Houston, TX 77001

Wesley West Flexible Partnership Driehaus Emerging Markets Growth Fund 12.1%
P.O. Box 7
Houston, TX 77001
</TABLE>

INVESTMENT ADVISORY SERVICES

The Adviser is controlled by Richard H. Driehaus, as sole shareholder
and chief executive officer. The principal nature of Mr. Driehaus' business is
investment advisory and brokerage services. The Adviser provides office space
and executive and other personnel to the Fund. The Fund pays all expenses other
than those paid by the Adviser, including but not limited to printing and
postage charges and securities registration and custodian fees and expenses
incidental to its organization.

The advisory agreement provides that neither the Adviser nor any of its
directors, officers, stockholders, agents or employees shall have any liability
to the Fund or any shareholder of the Fund for any error of judgment, mistake of
law or any loss arising out of any investment, or for any other act or omission
in the performance by the Adviser of its duties under the agreement, except for
liability resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard by it of
its obligations and duties under the agreement.

Any expenses that are attributable solely to the organization,
operation or business of a Fund shall be paid solely out of the Fund's assets.
Any expenses incurred by the Fund that are not solely attributable to

B-23

<PAGE> 61

a particular series are apportioned in such manner as the Adviser determines is
fair and appropriate, unless otherwise specified by the Board of Trustees. In
return for its services, the Adviser receives a monthly fee from the Funds,
computed and accrued daily, at an annual rate of 1.5% of average net assets of
each Fund. This fee is higher than the fees paid by most mutual funds. For the
fiscal years ended August 31, 1997 and 1998, the Driehaus International Growth
Fund paid fees under the investment advisory agreement of $1,752,344 and
$3,343,049, respectively. For the fiscal year beginning on the commencement of
operations on January 1, 1998 and ended September 31, 1998, the Driehaus Asia
Pacific Growth Fund and the Driehaus Emerging Markets Growth Fund paid fees
under the investment advisory agreement of $30,175 and $36,373, respectively.
The Adviser voluntarily has agreed to absorb other operating expenses to the
extent necessary to ensure that the total fund operating expenses (other than
interest, taxes, brokerage commissions and other portfolio transaction expenses,
capital expenditures and extraordinary expenses) will not exceed 2.95% of the
average net assets of the Driehaus Asia Pacific Growth Fund and 2.75% of the
average net assets of the Driehaus Emerging Markets Growth Fund through the
two-year period ended December 31, 1999 and will not exceed 2.50% of the average
net assets of the Driehaus International Discovery Fund and 2.10% of the average
net assets of the Driehaus European Opportunity Fund for the period since
inception through December 31, 1999.

DISTRIBUTOR

As of December 31, 1998, the Shares of the Funds are distributed by DSC
under a Distribution Agreement with the Trust. The Distribution Agreement has an
initial period of two years and continues in effect thereafter from year to
year, provided such continuance is approved annually (i) by a majority of the
trustees or by a majority of the outstanding voting securities of the Trust, and
(ii) by a majority of the trustees who are not parties to the Agreement or
interested persons of any such party. The Trust has agreed to pay all expenses
in connection with registration of its shares with the Securities and Exchange
Commission and auditing and filing fees in connection with registration of its
shares under the various state blue sky laws and assumes the cost of preparation
of prospectuses and other expenses. The Adviser bears all sales and promotional
expenses, including any payments to DSC for the sales of Fund shares.

As agent, DSC will offer shares of the Fund to investors in states
where the shares are qualified for sale, at net asset value, without sales
commissions or other sales load to the investor. In addition, no sales
commission or "12b-1" payment is paid by the Funds. DSC will offer the Funds'
shares only on a best-efforts basis.

ADMINISTRATOR

PFPC Inc. ("PFPC"), 103 Bellevue Parkway, Wilmington, Delaware 19809,
is the administrator for the Trust. The asset-based fee for administrative and
accounting services for the Driehaus International Growth Fund is:

B-24

<PAGE> 62
.125% of the first $200 million of average net assets;
.09% of the next $200 million of average net assets;
.07% of the next $200 million of average net assets; and
.05% of average net assets in excess of $600 million.

The asset-based fee for administration and accounting services for the
Driehaus Asia Pacific Growth Fund, the Driehaus Emerging Market Growth Fund, the
Driehaus International Discovery Fund, and the Driehaus European Opportunity
Fund is:

.14% of first $200 million of average net assets;
.09% of next $200 million of average net assets;
.07% of next $200 million of average net assets; and
.05% of average net assets in excess of $600 million.

There is a minimum monthly fee of $9500 (excluding out of pocket expenses),
which PFPC has agreed to waive for the first twenty-four months of the Driehaus
Asia Pacific Growth Fund, the Driehaus Emerging Markets Growth Fund, the
Driehaus International Discovery Fund, and the Driehaus European Opportunity
Fund.

CUSTODIAN

The Chase Manhattan Bank (successor to Morgan Stanley Trust Company) at
One Pierrepont Plaza, Brooklyn, NY 11201, is the custodian for the Fund (the
"Custodian"). It is responsible for holding all securities and cash of the
Funds, receiving and paying for securities purchased, delivering against payment
securities sold, receiving and collecting income from investments and performing
other administrative duties, all as directed by authorized persons. The
Custodian does not exercise any supervisory function in such matters as purchase
and sale of portfolio securities, payment of dividends or payment of expenses of
the Funds.

Portfolio securities purchased in the U.S. are maintained in the
custody of the Custodian or of other domestic banks or depositories. Portfolio
securities purchased outside of the U.S. are maintained in the custody of
foreign banks and trust companies that are members of the Custodian's global
custody network and foreign depositories ("foreign subcustodians"). With respect
to foreign subcustodians, there can be no assurance that a Fund, and the value
of its shares, will not be adversely affected by acts of foreign governments,
financial or operational difficulties of the foreign subcustodians, difficulties
and costs of obtaining jurisdiction over, or enforcing judgments against, the
foreign subcustodians, or application of foreign law to a Fund's foreign
subcustodial arrangements.

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<PAGE> 63
Accordingly, an investor should recognize that the non-investment risks involved
in holding assets abroad are greater than those associated with investing in the
United States.

The Fund may invest in obligations of the Custodian and may purchase or
sell securities from or to the Custodian.

TRANSFER AGENT
PFPC, 103 Bellevue Parkway, Wilmington, Delaware 19809, is the Funds'
transfer agent registrar, dividend-disbursing agent and shareholder servicing
agent. As such, PFPC provides certain bookkeeping and data processing services
and services pertaining to the maintenance of shareholder accounts. PFPC will
also waive a portion of its monthly base fee for transfer agency service for the
first twenty-four months of the Driehaus Asia Pacific Growth Fund, the Driehaus
Emerging Markets Growth Fund, the Driehaus International Discovery Fund, and the
Driehaus European Opportunity Fund.

INDEPENDENT PUBLIC ACCOUNTANTS

The independent public accountants for Driehaus Mutual Funds are Arthur
Andersen LLP. The accountants audit and report on each Fund's annual financial
statements, review certain regulatory reports and each Fund's federal income tax
returns, and perform other professional accounting, auditing, tax and advisory
services when engaged to do so by Driehaus Mutual Funds.

PORTFOLIO TRANSACTIONS

The Adviser uses the trading room staff of DSC, an affiliate of the
Adviser, to place the orders for the purchase and sale of a Fund's securities
and options and futures contracts. The Adviser's overriding objective in
effecting portfolio transactions is to seek to obtain the best combination of
price and execution. The best net price, giving effect to brokerage commissions,
if any, and other transaction costs, normally is an important factor in this
decision, but a number of other judgmental factors may also enter into the
decision. These include: the Adviser's knowledge (including the knowledge of the
trading room staff of DSC) of negotiated commission rates currently available
and other current transaction costs; the nature of the security being traded;
the size of the transaction; the desired timing of the trade; the activity
existing and expected in the market for the particular security;
confidentiality; the execution, clearance and settlement capabilities of the
broker or dealer selected and others which are considered; the Adviser's
knowledge (including the knowledge of the trading room staff of DSC) of the
financial stability of the broker or dealer selected and such other brokers or
dealers; and the Adviser's knowledge of actual or apparent operational problems
of any broker or dealer. Recognizing the value of these factors, a Fund may pay
a brokerage commission in excess of that which another broker

B-26
<PAGE> 64
or dealer may have charged for effecting the same transaction. Evaluations of
the reasonableness of brokerage commissions, based on the foregoing factors, are
made on an ongoing basis by the Adviser's staff while effecting portfolio
transactions. The general level of brokerage commissions paid is reviewed by the
Adviser and reports are made annually to the Board of Trustees.

Orders may be directed to any broker including, to the extent and in
the manner permitted by applicable law, DSC. Each Fund has been advised that the
Adviser intends to execute most (or all) transactions in ADRs through DSC. In
order for DSC to effect any such transaction for a Fund, the commissions, fees
or other remuneration received by DSC must be reasonable and fair, compared to
the commissions, fees or other remuneration paid to other brokers in connection
with comparable transactions involving similar securities, futures or options on
futures being purchased or sold on an exchange during a comparable period of
time. This standard would allow DSC to receive no more than the remuneration
that would be expected to be received by an unaffiliated broker in a
commensurate arm's-length transaction. Furthermore, the Board of Trustees,
including a majority of the Trustees who are not "interested" Trustees, has
adopted procedures that are reasonably designed to provide that any commissions,
fees or other remuneration paid to DSC are consistent with the foregoing
standard. For the fiscal year ended August 31, 1998, the Driehaus International
Growth Fund paid brokerage commissions of $2,214,060 of which $222,998 (10.1%)
were paid to DSC. For the fiscal year ended September 30, 1998, the Driehaus
Emerging Markets Growth Fund paid $58,159, of which $14,077 (24.2%) were paid to
DSC, and the Driehaus Asia Pacific Growth Fund paid $72,825, of which $2,621
(3.6%) were paid to DSC.

With respect to issues of securities involving brokerage commissions,
when more than one broker or dealer (other than DSC) is believed to be capable
of providing the best combination of price and execution with respect to a
particular portfolio transaction for a Fund, the Adviser may select a broker or
dealer that furnishes it with research products or services such as research
reports, subscriptions to financial publications and research compilations,
compilations of securities prices, earnings, dividends and similar data,
computer data bases, quotation equipment and services, research-oriented
computer software and services, and services of economic and other consultants.
Selection of brokers or dealers is not made pursuant to an agreement or
understanding with any of the brokers or dealers; however, the Adviser uses an
internal allocation procedure to identify those brokers or dealers who provide
it with research products or services and the amount of research products or
services they provide, and endeavors to direct sufficient commissions generated
by its clients' accounts in the aggregate, including the Fund, to such brokers
or dealers to ensure the continued receipt of research products or services the
Adviser feels are useful. In certain instances, the Adviser may receive from
brokers and dealers products or services that are used both as investment
research and for administrative, marketing or other nonresearch purposes. In
such instances, the Adviser will make a good faith effort to determine the
relative proportions of such products or services which may be considered as
investment research. The portion of the costs of such products or services
attributable to research usage may be defrayed by the Adviser (without prior
agreement or understanding, as noted above) through brokerage commissions
generated by transactions by clients (including the Fund), while the portions of
the costs attributable to nonresearch usage of such

B-27
<PAGE> 65

products or services is paid by the Adviser in cash. No person acting on behalf
of the Fund is authorized, in recognition of the value of research products or
services, to pay a commission in excess of that which another broker or dealer
might have charged for effecting the same transaction. Research products or
services furnished by brokers and dealers may be used in servicing any or all of
the clients of the Adviser, and not all such research products or services are
used in connection with the management of the Fund.

With respect to a Fund's purchases and sales of portfolio securities
transacted with a broker or dealer on a net basis, the Adviser may also consider
the part, if any, played by the broker or dealer in bringing the security
involved to the Adviser's attention, including investment research related to
the security and provided to the Fund.

The Fund may arrange for its custodian to act as a soliciting dealer to
accept any fees available to the custodian as a soliciting dealer in connection
with any tender offer for a Fund's portfolio securities, to the extent
consistent with best price and execution. If such arrangements are made the
custodian will credit any such fees received against its custodial fees.

Each Fund is treated as a separate entity for accounting and tax
purposes. Each Fund either intends to qualify or has qualified and elected to be
treated as a regulated investment company under Subchapter M of the Internal
Revenue Code and intends to continue to so qualify.

ADDITIONAL INCOME TAX CONSIDERATIONS

Each Fund intends to comply with the special provisions of the Internal
Revenue Code that relieve it of federal income tax to the extent its net
investment income and capital gains are currently distributed to shareholders.
In order to qualify for such provisions, each Fund must maintain a diversified
portfolio, which requires that at the close of each quarter (i) at least 50% of
the total value of its total assets be represented by cash or cash items,
Government securities, securities of other regulated investment companies and
securities of other issuers in which not greater than 5% of the Fund's assets
are invested and not more than 10% of the outstanding voting securities of such
issuer are held; and (ii) not more than 25% of the total value of the total
assets of the Fund are invested in the securities (other than Government
securities or the securities of other regulated investment companies) of any one
issuer.

Because dividend and capital gain distributions reduce net asset value,
a shareholder who purchases shares shortly before a record date will, in effect,
receive a return of a portion of his investment in such distribution. The
distribution would nonetheless be taxable to him, even if the net asset value of
shares were reduced below his cost. However, for federal income tax purposes the
shareholder's original cost would continue as his tax basis.

To the extent a Fund invests in foreign securities, it may be subject
to withholding and other taxes imposed by foreign countries. Tax treaties
between certain countries and the United States may reduce or eliminate such
taxes. Investors may be entitled to claim U.S. foreign tax credits with respect
to such

B-28
<PAGE> 66
taxes, subject to certain provisions and limitations contained in the Internal
Revenue Code. Specifically, if more than 50% of the total value of the
Fund's total assets at the close of any fiscal year consists of stock or
securities of foreign corporations, and the Fund distributes at least 90% of its
investment company taxable income and net tax exempt interest, the Fund may file
an election with the Internal Revenue Service pursuant to which shareholders of
the Fund will be required to (i) include in ordinary gross income (in addition
to taxable dividends actually received) their pro rata shares of foreign income
taxes paid by the Fund even though not actually received, (ii) treat such
respective pro rata shares as foreign income taxes paid by them, and (iii)
deduct such pro rata shares in computing their taxable incomes, or,
alternatively, use them as foreign tax credits, subject to applicable
limitations, against their United States income taxes. Shareholders who do not
itemize deductions for federal income tax purposes will not, however, be able to
deduct their pro rata portion of foreign taxes paid by the Fund, although such
shareholders will be required to include their share of such taxes in gross
income. Shareholders who claim a foreign tax credit may be required to treat a
portion of dividends received from the Fund as separate category income for
purposes of computing the limitations on the foreign tax credit available to
such shareholders. Tax-exempt shareholders will not ordinarily benefit from this
election relating to foreign taxes. Each year, the Fund will notify shareholders
of the amount of (i) each shareholder's pro rata share of foreign income taxes
paid by the Fund and (ii) the portion of Fund dividends which represents income
from each foreign country, if the Fund qualifies to pass along such credit. If a
Fund does not make such an election, the net investment income of that
particular Fund will be reduced and the shareholders will not be able to deduct
their pro rata share of foreign taxes paid by the Fund.

Each Fund's options, futures and foreign currency transactions are
subject to special tax provisions that may accelerate or defer recognition of
certain gains or losses, change the character of certain gains or losses or
alter the holding periods of certain of the Fund's portfolio securities. If a
Fund exercises a call or put option that it holds, the premium paid for the
option is added to the cost basis of the security purchased (call) or deducted
from the proceeds of the security sold (put). For cash settlement options and
options on futures exercised by a Fund, the difference between the cash received
at exercise and the premium paid is a capital gain or loss.

If a call or put option written by a Fund is exercised, the premium is
included in the proceeds of the sale of the underlying security (call) or
reduces the cost basis of the security purchased (put). For cash settlement
options and futures options written by a Fund, the difference between the cash
paid at exercise and the premium received is a capital gain or loss.

Entry into a closing purchase transaction will result in capital gain
or loss. If an option written by a Fund was in-the-money at the time it was
written and the security covering the option was held for more than the
long-term holding period prior to the writing of the option, any loss realized
as a result of a closing purchase transaction will be long-term. The holding
period of the securities covering an in-the-money option will not include the
period of time the option is outstanding.

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<PAGE> 67
If a Fund writes an equity call option(4) other than a "qualified
covered call option," as defined in the Internal Revenue Code, any loss on such
option transaction, to the extent it does not exceed the unrealized gains on the
securities covering the option, may be subject to deferral until the securities
covering the option have been sold.

A futures contract held until delivery results in capital gain or loss
equal to the difference between the price at which the futures contract was
entered into and the settlement price on the earlier of delivery notice date or
expiration date. If a Fund delivers securities under a futures contract, the
Fund also realizes a capital gain or loss on those securities.

For federal income tax purposes, each Fund generally is required to
recognize as income for each taxable year its net unrealized gains and losses as
of the end of the year on futures, futures options and non-equity options
positions ("year-end mark-to-market"). Generally, any gain or loss recognized
with respect to such positions (either by year-end mark-to-market or by actual
closing of the positions) is considered to be 60% long-term and 40% short-term,
without regard to the holding periods of the contracts. However, in the case of
positions classified as part of a "mixed straddle," the recognition of losses on
certain positions (including options, futures and futures options positions, the
related securities and certain successor positions thereto) may be deferred to a
later taxable year. Sale of futures contracts or writing of call options (or
futures call options) or buying put options (or futures put options) that are
intended to hedge against a change in the value of securities held by a Fund:
(1) will affect the holding period of the hedged securities; and (2) may cause
unrealized gain or loss on such securities to be recognized upon entry into the
hedge.

If a Fund were to enter into a short index future, short index futures
option or short index option position and the Fund's portfolio were deemed to
"mimic" the performance of the index underlying such contract, the option or
futures contract position and the Fund's stock positions would be deemed to be
positions in a mixed straddle, subject to the above-mentioned loss deferral
rules.

The Funds may enter into swaps or other notional principal contracts.
Payments made or received pursuant to the terms of a notional principal contract
are divided into two types--periodic payments and nonperiodic payments. Periodic
payments are payments made or received pursuant to a notional principal contract
that are payable at intervals of one year or less during the entire term of the
contract, that are based on certain types of specified indices (which include
objective financial information), and that are based on either a single notional
principal amount or a notional principal amount that varies over the term of the
contract in the same proportion as the notional principal amount that measures
the other party's payments. A nonperiodic payment is any payment made or
received with respect to a notional principal contract that is not a periodic
payment or a termination payment. All taxpayers, regardless of their

- --------------------------

(4) An equity option is defined to mean any option to buy or sell
stock, and any other option the value of which is determined by
reference to an index of stocks of the type that is ineligible to
be traded on a commodity futures exchange (e.g., an option contract
on a sub-index based on the price of nine hotel/casino stocks). The
definition of equity option excludes options on broad-based stock
indexes (such as the Standard & Poor's 500 index).

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<PAGE> 68

method of accounting, must recognize the ratable daily portion of a periodic
payment for the taxable year to which that portion relates. In contrast, a
nonperiodic payment is required to be amortized over the term of the swap by the
parties and is not deducted or included in income when made.

Each Fund distributes to shareholders annually any net capital gains
that have been recognized for federal income tax purposes (including year-end
mark-to-market gains) on options and futures transactions. Such distributions
are combined with distributions of capital gains realized on the Fund's other
investments, and shareholders are advised of the nature of the payments.

A 4% excise tax is imposed on the excess of the required distribution
for a calendar year over the distributed amount for such calendar year. The
required distribution is the sum of 98% of the Fund's net investment income for
the calendar year plus 98% of its capital gain net income net of foreign
exchange losses for the one-year period ending October 31, plus any
undistributed net investment income from the prior calendar year, plus any
undistributed capital gain net income from the one year period ended October 31
in the prior calendar year, minus any overdistribution in the prior calendar
year. For purposes of calculating the required distribution, foreign currency
gains or losses occurring after October 31 are taken into account in the
following calendar year. The Funds intend to declare or distribute dividends
during the appropriate periods of an amount sufficient to prevent imposition of
the 4% excise tax.

A shareholder who redeems shares of a Fund will recognize capital gain
or loss for federal income tax purposes measured by the difference between the
value of the shares redeemed and the basis of the shares. If a shareholder
realizes a loss on the redemption of a Fund's shares and reinvests in shares of
the Fund within 30 days before or after the redemption, the transactions may be
subject to the wash sale rules resulting in a postponement of the recognition of
such loss for federal income tax purposes.

Investment income derived from foreign securities may be subject to
foreign income taxes withheld at the source. Because the amount of the Fund's
investments in various countries will change from time to time, it is not
possible to determine the effective rate of such taxes in advance.

Shareholders who are nonresident aliens are subject to U.S. withholding
tax on ordinary income dividends (whether received in cash or shares) at a rate
of 30% or such lower rate as prescribed by an applicable tax treaty.

Passive Foreign Investment Companies. Each Fund may purchase the
securities of certain foreign investment funds or trusts called passive foreign
investment companies ("PFICs"). In addition to bearing their proportionate share
of the Fund's expenses (management fees and operating expenses), shareholders
will also indirectly bear similar expenses of such PFICs. Capital gains on the
sale of PFIC holdings will be deemed to be ordinary income regardless of how
long the Fund holds its investment. In addition, each Fund may be subject to
corporate income tax and an interest charge on certain dividends and capital
gains earned from PFICs, regardless of whether such income and gains are
distributed to shareholders.

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<PAGE> 69

Each Fund intends to treat PFICs as sold on the last day of the Fund's
fiscal year and recognize any gains for tax purposes at that time; losses will
not be recognized. Such gains will be considered ordinary income which the Fund
will be required to distribute even though it has not sold the security and
received cash to pay such distributions.

INVESTMENT PERFORMANCE

Each Fund may quote certain total return figures from time to time. A
"Total Return" on a per share basis is the amount of dividends distributed per
share plus or minus the change in the net asset value per share for a period. A
"Total Return Percentage" may be calculated by dividing the value of a share at
the end of a period by the value of the share at the beginning of the period and
subtracting one. For a given period, an "Average Annual Total Return" may be
computed by finding the average annual compounded rate that would equate a
hypothetical initial amount invested of $1,000 to the ending redeemable value.

Average Annual Total Return is computed as follows: ERV = P(1+T)n

Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a
hypothetical $1,000 payment made at
the beginning of the period at the
end of the period (or fractional
portion thereof).

Investment performance figures assume reinvestment of all dividends and
distributions and do not take into account any federal, state, or local income
taxes which shareholders must pay on a current basis. They are not necessarily
indicative of future results. The performance of a Fund is a result of
conditions in the securities markets, portfolio management and operating
expenses. Although investment performance information is useful in reviewing a
Fund's performance and in providing some basis for comparison with other
investment alternatives, it should not be used for comparison with other
investments using different reinvestment assumptions or time periods. Of course,
past performance is not indicative of future results.

Based on the foregoing formula, the average annual total return for the
Driehaus International Growth Fund, the Driehaus Asian Pacific Growth Fund, and
the Driehaus Emerging Markets Fund are as follows:

Average Annual Total Average Annual Total
Return For the Year Return Since Inception
Fund (Date of Inception) ended September 30, 1998 through September 30, 1998
- ------------------------ ------------------------ --------------------------

</TABLE>

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<PAGE> 70
Driehaus International Growth 2.14% 15.45%
Fund (October 28, 1996)

Driehaus Emerging Markets N/A -24.40%*
Growth Fund
(December 31, 1997)

Driehaus Asia Pacific Growth N/A -17.00%*
Fund (December 31, 1997)

*Not Annualized

In advertising and sales literature, each Fund may compare its
performance with that of other mutual funds, indexes or averages of other mutual
funds, indexes of related financial assets or data, and other competing
investment and deposit products available from or through other financial
institutions. The composition of these indexes or averages differs from those of
the Funds. Comparison of a Fund to an alternative investment should be made with
consideration of differences in features and expected performance. All such
indexes and averages will be obtained from sources or reporting services that
the Fund believes to be generally accurate. Each Fund's performance may be
compared to indexes or averages, including the following:

<TABLE>
<S> <C>
Lipper International Fund Index IFC Emerging Markets Index
Lipper Pacific Index Morningstar International Stock Average
Lipper Emerging Market Morningstar U.S. Diversified Average
Index ICD International Equity Funds Average Morningstar Equity Fund Average
ICD All Equity Funds Average Morningstar Hybrid Fund Average
ICD General Equity Funds Average* Morningstar All Equity Funds Average
ICD Global Equity Funds Average Morningstar General Equity Average**
ICD International Equity and Global Equity Funds Morgan Stanley All Country Asia Pacific Index
Average Morgan Stanley European Index
ICD Foreign Securities Index Morgan Stanley International Small Cap Index
</TABLE>

- -------------------
* Includes ICD Aggressive Growth, Growth & Income, Long-Term Growth, and
Total Return Averages.

** Includes Morningstar Aggressive Growth, Growth, Balanced Equity Income,
and Growth & Income Averages.

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<PAGE> 71

The ICD Indexes reflect the unweighted average total return of the
largest twenty funds within their respective categories as calculated and
published by ICD. The Lipper International Fund index reflects the net asset
value weighted return of the ten largest international funds.

The Lipper, ICD and Morningstar averages are unweighted averages of
total return performance of mutual funds as classified, calculated and published
by these independent services that monitor the performance of mutual funds. The
Fund may also use comparative performance as computed in a ranking by Lipper or
category averages and rankings provided by another independent service. Should
Lipper or another service reclassify a Fund to a different category or develop
(and place a Fund into) a new category, the Fund may compare its performance or
ranking with those of other funds in the newly assigned category, as published
by the service.

The Fund may also cite its rating, recognition or other mention by
Morningstar or any other entity. Morningstar's rating system is based on
risk-adjusted total return performance and is expressed in a star-rating format.
The risk-adjusted number is computed by subtracting a Fund's risk score (which
is a function of the Fund's monthly returns less the 3-month T-bill return) from
the Fund's load-adjusted total return score. This numerical score is then
translated into rating categories, with the top 10% labeled five star, the next
22.5% labeled four star, the next 35% labeled three star, the next 22.5% labeled
two star, and the bottom 10% one star. A high rating reflects either
above-average returns or below-average risk, or both.

The Fund may also note its mention or recognition in local, national or
international newspapers, magazines, newsletters, periodicals or other media
from time to time. However, the Fund assumes no responsibility for the accuracy
of such data. Such publications may include, but are not limited to, the
following:

Barron's Newsweek
Business Week The New York Times
CNBC No-Load Fund Investor
Crain's Chicago Business Pension World
Consumer Reports Pensions and Investment
Consumer Digest Personal Investor
Financial World Smart Money
Forbes Stanger's Investment Adviser
Fortune United Mutual Fund Selector
Fund Action USA Today
Investor's Business Daily U.S. News and World Report
Kiplinger's Personal Finance The Wall Street Journal
Magazine Worth
Knight-Ridder Your Money
Money
Mutual Fund Letter

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<PAGE> 72
Mutual Fund News Service
Mutual Fund Values (Morningstar)

Each Fund may compare its performance to the Consumer Price Index (All
Urban), a widely recognized measure of inflation.

To illustrate the historical returns on various types of financial
assets, each Fund may use historical data provided by Ibbotson Associates, Inc.
("Ibbotson"), a Chicago-based investment firm. Ibbotson constructs (or obtains)
very long-term (since 1926) total return data (including, for example, total
return indexes, total return percentages, average annual total returns and
standard deviations of such returns) for the following asset types:

Common stocks Intermediate-term government bonds
Small company stocks U.S. Treasury bills
Long-term corporate bonds Consumer Price Index
Long-term government bonds

Each Fund may also use hypothetical returns to be used as an example in
a mix of asset allocation strategies. One such example is reflected in the chart
below, which shows the effect of tax deferral on a hypothetical investment. This
chart assumes that an investor invested $2,000 a year on January 1, for any
specified period, in both a Tax-Deferred Investment and a Taxable Investment,
that both investments earn either 6%, 8% or 10% compounded annually, and that
the investor withdrew the entire amount at the end of the period. (A tax rate of
39.6% is applied annually to the Taxable Investment and on the withdrawal of
earnings on the Tax-Deferred Investment.)

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<PAGE> 73

TAX-DEFERRED INVESTMENT VS. TAXABLE INVESTMENT

Interest Rate 6% 8% 10% 6% 8% 10%

Compounding Years Tax-Deferred Investment Taxable Investment
----------------- ----------------------- ------------------

Dollar Cost Averaging. Dollar cost averaging is an investment strategy
that requires investing a fixed amount of money in Fund shares at set intervals.
This allows an investor to purchase more shares when prices are low and fewer
shares when prices are high. Over time, this tends to lower the average cost per
share. Like any investment strategy, dollar cost averaging cannot guarantee a
profit or protect against losses in a steadily declining market. Dollar cost
averaging involves uninterrupted investing regardless of share price and
therefore may not be appropriate for every investor.

B-36