LAZARD RETIREMENT SERIES INC, N-1A EL, 1997-02-25

LAZARD RETIREMENT SERIES INC
N-1A EL, 1997-02-25

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Securities Act File No. 33-_____
Investment Company Act File No. 811-____
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. __ / /

Post-Effective Amendment No. __ / /

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/

Amendment No. __ / /

(Check appropriate box or boxes)

LAZARD RETIREMENT SERIES, INC.
(Exact Name of Registrant as Specified in Charter)

30 Rockefeller Plaza, New York, New York 10020
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 632-6400

William G. Butterly III, Esq.
30 Rockefeller Plaza
New York, New York 10020
(Name and Address of Agent for Service)

copy to:

Stuart H. Coleman, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982

Approximate Date of Proposed Public Offering: As soon as practicable after
this Registration Statement is declared effective.

<PAGE>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
===========================================================================

Proposed Proposed
Maximum Maximum
Title of Amount Offering Aggregate
Securities Being Price Per Offering
Being Registered Registered Unit Price

Shares of Common Stock, * * *
par value $.001
per share

===========================================================================

* Pursuant to Regulation 270.24f-2 under the Investment Company Act of
1940, the Registrant hereby elects to register an indefinite number of
shares of its Common Stock.

===========================================================================

The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states
that this registration statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
registration statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.

===========================================================================
<PAGE>
LAZARD RETIREMENT SERIES, INC.
Cross-Reference Sheet Pursuant to Rule 495(a)
Items in
Part B of
Form N-1A Caption Page

1 Cover Cover Page
2 Synopsis 2
3 Condensed Financial Information 5
4 General Description of Registrant 6
5 Management of the Fund 19
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 25
7 Purchase of Securities Being Offered 22
8 Redemption or Repurchase 22
9 Pending Legal Proceedings *

Items in
Part B of
FORM N-1A

10 Cover Page B-1
11 Table of Contents B-1
12 General Information and History *
13 Investment Objectives and Policies B-3
14 Management of the Fund B-15
15 Control Persons and Principal Holders
of Securities *
16 Investment Advisory and Other Services B-17
17 Brokerage Allocation B-21
18 Capital Stock and Other Securities B-28
19 Purchase, Redemption and Pricing of
Securities Being Offered B-20, B-22
20 Tax Status B-25
21 Underwriters *
22 Calculations of Performance Data B-27
23 Financial Statements *

Items in
Part C of
FORM N-1A

24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under Common
Control with Registrant C-2
26 Number of Holders of Securities C-2
27 Indemnification C-2
28 Business and Other Connections of
Investment Adviser C-3
29 Principal Underwriters C-14
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-15

- ---------
*Omitted since answer is negative or inapplicable.

<PAGE>

___________, 1997

PROSPECTUS

LAZARD RETIREMENT
SERIES, INC.
------------------------------------

Lazard Retirement Bantam Value Portfolio
Lazard Retirement Emerging Markets Portfolio
Lazard Retirement Equity Portfolio
Lazard Retirement Global Equity Portfolio
Lazard Retirement International Equity Portfolio
Lazard Retirement International Fixed-Income Portfolio
Lazard Retirement International Small Cap Portfolio
Lazard Retirement Small Cap Portfolio
Lazard Retirement Strategic Yield Portfolio

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

30 Rockefeller Plaza,
New York, New York 10020
(212) 632-6400 (New York State)
(800) 823-6300 (other continental states)

Investors are advised to read this Prospectus and retain it for future
reference.

This Prospectus sets forth concisely information about the Fund and the
Portfolios that a prospective investor should know before investing in a
Portfolio. A Statement of Additional Information dated __________, 1997, which
may be revised from time to time, containing additional and more detailed
information about the Portfolios, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus. The
Securities and Exchange Commission maintains a Web site (http:\\www.sec.gov)
that contains the Statement of Additional Information, material incorporated by
reference, and other information regarding the Fund. The Statement of Additional
Information is available without charge and can be obtained by writing or
calling the Fund at the address and telephone number printed above.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

Lazard Retirement Series, Inc. (the "Fund") is a no-load, open-end management
investment company, known as a mutual fund. By this Prospectus, the Fund is
offering shares of nine portfolios (each, a "Portfolio"), WHICH ARE OFFERED ONLY
TO QUALIFIED PENSION AND RETIREMENT PLANS AND VARIABLE ANNUITY AND VARIABLE LIFE
INSURANCE SEPARATE ACCOUNTS ESTABLISHED BY INSURANCE COMPANIES TO FUND VARIABLE
ANNUITY CONTRACTS AND VARIABLE LIFE INSURANCE POLICIES. Shares of the Portfolios
bear certain costs pursuant to a Distribution and Servicing Plan adopted in
accordance with Rule 12b-1 under the Investment Company Act of 1940, as amended
(the "1940 Act"). For offers to separate accounts, this Prospectus should be
read in conjunction with the prospectus of the separate accounts of the specific
insurance product which should precede or accompany this Prospectus.

Lazard Freres Asset Management (the "Investment Manager"), a division of Lazard
Freres & Co. LLC ("Lazard Freres"), professionally manages each Portfolio.

The names and investment objectives of the Portfolios are as follows:

LAZARD RETIREMENT EQUITY PORTFOLIO seeks capital appreciation. This Portfolio
invests primarily in equity securities of companies with relatively large
capitalizations that the Investment Manager considers inexpensively priced
relative to the return on total capital or equity.

LAZARD RETIREMENT SMALL CAP PORTFOLIO seeks capital appreciation. This Portfolio
invests primarily in equity securities of companies with market capitalizations
under $1 billion that the Investment Manager considers inexpensively priced
relative to the return on total capital or equity.

LAZARD RETIREMENT BANTAM VALUE PORTFOLIO seeks capital appreciation. This
Portfolio invests primarily in equity securities of companies with market
capitalizations under $500 million that the Investment Manager considers
inexpensively priced relative to the return on total capital or equity and which
it believes are likely to increase market capitalization as a result of growth
or are likely to be the subject of acquisitions or other events.

LAZARD RETIREMENT GLOBAL EQUITY PORTFOLIO seeks capital appreciation. This
Portfolio invests primarily in equity securities of companies with relatively
large capitalizations that are located anywhere in the world which the
Investment Manager considers inexpensively priced relative to the return on
total capital or equity.

LAZARD RETIREMENT INTERNATIONAL EQUITY PORTFOLIO seeks capital appreciation.
This Portfolio invests primarily in the equity securities of non-United States
companies that the Investment Manager considers inexpensively priced relative to
the return on total capital or equity.

LAZARD RETIREMENT INTERNATIONAL SMALL CAP PORTFOLIO seeks capital appreciation.
This Portfolio invests primarily in equity securities of non-United States
companies with market capitalizations under $1 billion that the Investment
Manager considers inexpensively priced relative to the return on total capital
or equity.

LAZARD RETIREMENT EMERGING MARKETS PORTFOLIO seeks capital appreciation. This
Portfolio invests primarily in equity securities of non-United States issuers
located, or doing significant business, in emerging market countries that the
Investment Manager considers inexpensively priced relative to the return on
total capital or equity.

LAZARD RETIREMENT INTERNATIONAL FIXED- INCOME PORTFOLIO seeks high total return,
consisting of current income and capital appreciation, consistent with what the
Investment Manager considers to be prudent investment risk. This Portfolio
invests primarily in foreign fixed-income securities of varying maturities.

LAZARD RETIREMENT STRATEGIC YIELD PORTFOLIO seeks total return, consisting of
current income and capital appreciation. This Portfolio invests principally in
high- yielding domestic and foreign fixed-income securities. These securities,
which are often referred to as "junk bonds," are subject to greater risk of loss
of principal and interest than higher rated securities and are considered to be
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal.

TABLE OF CONTENTS

Annual Operating Expenses.................................................
Description of the Portfolios.............................................
General................................................................
Investment Objectives and Policies.....................................
Investment Considerations and Risks....................................
Management of the Fund and the Portfolios.................................
Purchase of Shares........................................................
Redemption of Shares......................................................
Distribution and Servicing Plan...........................................
Dividends and Distributions...............................................
Taxation..................................................................
Organization and Description of Capital Stock.............................
Performance Information...................................................
Appendix..................................................................

<PAGE>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES
(as a percentage of average daily net assets)
- ----------------------------------------------------------------------------------------------------------
TOTAL PORTFOLIO
MANAGEMENT 12B-1 OTHER OPERATING
FEES FEES EXPENSES EXPENSES
<S> <C> <C> <C> <C>
EQUITY PORTFOLIO .75% .25% ____% ____%
INTERNATIONAL EQUITY .75% .25% ____% ____%
PORTFOLIO
INTERNATIONAL .75% .25% ____% ____%
FIXED-INCOME PORTFOLIO
STRATEGIC YIELD PORTFOLIO .75% .25% ____% ____%
SMALL CAP PORTFOLIO .75% .25% ____% ____%
INTERNATIONAL SMALL CAP .75% .25% ____% ____%
PORTFOLIO
EMERGING MARKETS PORTFOLIO 1.00% .25% ____% ____%
GLOBAL EQUITY PORTFOLIO .75% .25% ____% ____%
BANTAM VALUE PORTFOLIO .75% .25% ____% ____%
</TABLE>

EXAMPLE

An investor would pay the following expenses on a $1,000 investment, assuming a
5% annual return (cumulatively through the end of each time period):

1 YEAR 3 YEARS
------ -------

EQUITY PORTFOLIO $____ $____
INTERNATIONAL EQUITY PORTFOLIO $____ $____
INTERNATIONAL FIXED-INCOME $____ $____
PORTFOLIO
STRATEGIC YIELD PORTFOLIO $____ $____
SMALL CAP PORTFOLIO $____ $____
INTERNATIONAL SMALL CAP $____ $____
PORTFOLIO
EMERGING MARKETS PORTFOLIO $____ $____
GLOBAL EQUITY PORTFOLIO $____ $____
BANTAM VALUE PORTFOLIO $____ $____

..............................................................................
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED REPRESENTATIVE OF
FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE INDICATED.
MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL RETURN, EACH PORTFOLIO'S ACTUAL
PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL RETURN GREATER
OR LESS THAN 5%
..............................................................................

The purpose of the foregoing table is to assist investors in understanding the
costs and expenses borne by each Portfolio, the payment of which will reduce
investors' annual return. The expenses noted above are based on estimated
amounts for the current fiscal year. The information in the foregoing table does
not reflect deduction of account fees and charges to separate accounts or
related insurance policies that may be imposed by participating insurance
companies. For a further description of the various costs and expenses incurred
in the operation of the Portfolios, see "Management of the Fund and the
Portfolios" and "Distribution and Servicing Plan."

DESCRIPTION OF THE PORTFOLIOS

GENERAL

Shares of the Portfolios are offered only to variable annuity and variable life
insurance separate accounts established by affiliated and unaffiliated life
insurance companies ("Participating Insurance Companies") to fund variable
annuity contracts ("VA contracts") and variable life insurance policies ("VLI
policies" and, together with VA contracts, "Policies"). The Policies are
described in the separate prospectuses and statements of additional information
issued by the Participating Insurance Companies over which the Fund assumes no
responsibility. Portfolio shares also are offered to qualified pension and
retirement plans and accounts permitting accumulation of assets on a
tax-deferred basis ("Eligible Plans" or "Plans").

Differences in tax treatment or other considerations may cause the interests of
Policy owners and Eligible Plan participants to conflict, although the Fund
currently does not foresee any disadvantages to Policy owners or Eligible Plan
participants arising therefrom. Nevertheless, the Fund's Board of Directors
intends to monitor events to identify any material conflicts which may arise and
to determine what action, if any, should be taken in response thereto.
Resolution of an irreconcilable conflict might result in the withdrawal of a
substantial amount of a Portfolio's assets which could adversely affect the
Portfolio's net asset value per share.

INVESTMENT OBJECTIVES AND POLICIES

Each Portfolio has a different investment objective which it pursues through
separate investment policies as described herein. The differences in objectives
and policies among the Portfolios determine the types of portfolio securities in
which each Portfolio invests, and can be expected to affect the degree of risk
to which each Portfolio is subject and its yield or return. The following
investment objectives and related policies and activities of each of the
Portfolios, except as otherwise indicated, are not fundamental and may be
changed by the Board of Directors of the Fund without the approval of the
shareholders. There can be no assurance that any of the Portfolios will achieve
its respective investment objective. The types of portfolio securities in which
each Portfolio may invest are described in greater detail below and under
"Appendix-- Certain Portfolio Securities."

EQUITY PORTFOLIOS--These portfolios will invest principally in equity
securities. These Portfolios will engage in a value- oriented search for equity
securities before they have attracted wide investor interest. The Investment
Manager attempts to identify inexpensive securities through traditional measures
of value, including low price to earnings ratio, high yield, unrecognized
assets, potential for management change and/or the potential to improve
profitability. The Investment Manager focuses on individual stock selection (a
"bottom-up" approach) rather than on forecasting stock market trends (a
"top-down" approach). Risk is tempered by diversification of investments.

EQUITY PORTFOLIO

The Equity Portfolio is a non-diversified portfolio the investment objective of
which is to seek capital appreciation. The Portfolio invests primarily in equity
securities of companies with relatively large capitalizations that the
Investment Manager considers inexpensively priced relative to the return on
total capital or equity.

Under normal market conditions, the Portfolio will invest at least 65% of its
total assets in equity securities, including common stocks, preferred stocks and
convertible securities, as well as warrants to purchase such securities. In
addition, at times judged by the Investment Manager to be appropriate, the
Portfolio may hold up to 20% of its total assets in U.S. Government securities
and debt obligations of domestic corporations rated Baa or better by Moody's
Investors Service, Inc. ("Moody's") or BBB or better by Standard & Poor's
Ratings Group ("S&P"), Fitch Investors Service, L.P. ("Fitch") and Duff & Phelps
Credit Rating Co. ("Duff" and together with Moody's, S&P and Fitch, the "Rating
Agencies"). Obligations rated Baa /BBB by one or more Rating Agencies are
considered investment grade obligations that may have speculative
characteristics. See "Appendix--Certain Portfolio Securities-- Ratings" for a
description of the ratings of the Rating Agencies. The Portfolio also may invest
without limitation in short-term money market instruments of the types described
in "Appendix--Money Market Instruments."

The Portfolio also may invest up to 15% of its total assets in foreign equity or
debt securities. See "Investment Considerations and Risks--Foreign Securities."

In addition, the Portfolio may engage in various investment techniques, such as
options and futures transactions and lending portfolio securities. For a
discussion of the investment techniques and their related risks, see "Investment
Considerations and Risks" and "Appendix--Investment Techniques" below and
"Investment Objectives and Management Policies-- Management Policies" in the
Statement of Additional Information.

SMALL CAP PORTFOLIO

The Small Cap Portfolio is a non-diversified portfolio the investment objective
of which is to seek capital appreciation. The Portfolio invests primarily in
equity securities of United States companies with market capitalizations under
$1 billion that the Investment Manager considers inexpensively priced relative
to the return on total capital or equity. Market capitalization of a company's
stock is its market price per share times the number of shares outstanding. The
equity securities in which the Portfolio may invest include common stocks,
preferred stocks, securities convertible into or exchangeable for common stocks,
rights and warrants and American and Global Depositary Receipts.

Investments generally are made in equity securities of companies which in the
Investment Manager's opinion have one or more of the following characteristics
(the "Small Cap Factors"): (i) are undervalued relative to their earnings power,
cash flow, and/or asset values; (ii) have an attractive price/value relationship
(i.e., have high returns on equity and/or assets with correspondingly low
price-to-book and/or price-to-asset value as compared to the market generally or
the companies' industry groups in particular), with expectations that some
catalyst will cause the perception of value to change within a 24-month time
horizon; (iii) have experienced significant relative under performance and are
out of favor due to a set of circumstances which are unlikely to harm a
company's franchise or earnings power over the longer term; (iv) have low
projected price-to-earnings or price-to-cash-flow multiples relative to their
industry peer group and/or the market in general; (v) have the prospect, or the
industry in which the company operates has the prospect, to allow it to be
become a larger factor in the business and receive a higher valuation as such;
(vi) have significant financial leverage but have high levels of free cash flow
used to reduce leverage and enhance shareholder value; and (vii) have a
relatively short corporate history with the expectation that the business may
grow to generate meaningful cash flow and earnings over a reasonable investment
horizon.

Under normal conditions, the Portfolio will invest at least 65% of the value of
its total assets in the small capitalization equity securities described above.
Assets not invested in such small capitalization equity securities generally
will be invested in large capitalization equity securities or debt securities,
including cash equivalents. The Portfolio also may invest up to 15% of its total
assets in foreign equity or debt securities. See "Investment Considerations and
Risks--Foreign Securities."

The Investment Manager believes that the issuers of small capitalization stocks
often have sales and earnings growth rates which exceed those of larger
companies, and that such growth rates, in turn, may be reflected in more rapid
share price appreciation. However, investing in smaller capitalization stocks
can involve greater risk than is customarily associated with larger, more
established companies. See "Investment Considerations and Risks--Equity
Securities."

When, in the Investment Manager's judgment, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limitation in large capitalization companies or short-term money market
instruments of the types described in "Appendix--Money Market Instruments" or
hold its assets in cash.

In addition, the Portfolio may engage in various investment techniques, such as
options and futures transactions and lending portfolio securities. For a
discussion of the investment techniques and their related risks, see "Investment
Considerations and Risks" and "Appendix-Investment Techniques" below and
"Investment Objectives and Management Policies-Management Policies" in the
Statement of Additional Information.

BANTAM VALUE PORTFOLIO

The Bantam Value Portfolio is a non-diversified portfolio the investment
objective of which is to seek capital appreciation. The Portfolio will invest
primarily in equity securities of companies with market capitalizations under
$500 million that the Investment Manager considers inexpensively priced relative
to the return on total capital or equity. The equity securities in which the
Portfolio may invest include common stocks, preferred stock, securities
convertible into or exchangeable for common stocks, rights and warrants and
American and Global Depositary Receipts. Investments are generally made in
equity securities of companies which, in the Investment Manager's opinion, have
one or more of the characteristics of the Small Cap Factors, as well as a
potential for increasing recognition, market capitalization and value. See
"Small Cap Portfolio" above.

Under normal market conditions, the Portfolio will invest at least 65% of the
value of its total assets in the small capitalization equity securities
described above. Assets not invested in such small capitalization equity
securities generally will be invested in large capitalization equity securities
or debt securities, including cash equivalents. For a description of the risks
associated with investing in small capitalization equity securities, see
"Investment Considerations and Risks-- Equity Securities."

When, in the Investment Manager's judgment, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limit in larger capitalization companies or short-term money market
instruments of the types described in "Appendix--Money Market Instruments" or
hold its assets in cash.

GLOBAL EQUITY PORTFOLIO

The Global Equity Portfolio is a non-diversified portfolio the investment
objective of which is to seek capital appreciation. The Portfolio will invest
primarily in equity securities of companies both U.S. and non-U.S. that the
Investment Manager considers inexpensively priced relative to the return on
total capital or equity. The Portfolio engages in a value- oriented search for
equity securities of issuers located anywhere in the world. In selecting
investments for the Portfolio, the Investment Manager attempts to identify
inexpensive markets worldwide, including the United States, through traditional
measures of value, including low price to earnings ratio, high yield,
unrecognized assets, potential for management change and/or potential to improve
profitability. In addition, the Investment Manager seeks to identify companies
that it believes are financially productive and undervalued in those markets.

Under normal market conditions, the Portfolio will invest at least 65% of the
value of its total assets in the equity securities of companies within not less
than four countries, including the United States. The percentage of the
Portfolio's assets invested in particular geographic sectors may shift from time
to time in accordance with the Investment Manager's judgment. With a focus on
stock picking, the country allocation decision is an outgrowth of stock
selection and is used as an overlay and risk control mechanism to enhance
diversification. Nonetheless, the Investment Manager currently intends to invest
not less than 25% of the assets of the Portfolio in securities of U.S. issuers.
For a description of the risks associated with investing in foreign securities,
see "Investment Considerations and Risks--Foreign Securities."

The assets of the Portfolio are expected to be invested principally in equity
securities, including American and Global Depositary Receipts, and in
convertible bonds and other convertible securities. The Portfolio is not
required to invest exclusively in equity securities, and, if deemed advisable,
under normal market conditions, the Portfolio may invest up to 20% of the value
of its total assets in fixed-income securities. The Portfolio will not invest in
fixed-income securities rated lower than investment grade by the Rating
Agencies.

When, in the Investment Manager's judgment, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limit in the equity securities of U.S. companies or short-term money
market instruments of the types described in "Appendix--Money Market
Instruments" or hold its assets in cash.

In addition, the Portfolio may engage in various investment techniques, such as
foreign currency transactions, options and futures transactions and lending
portfolio securities. For a discussion of the investment techniques and their
related risks, see "Investment Considerations and Risks" and
"Appendix--Investment Techniques" below and "Investment Objectives and
Management Policies-- Management Policies" in the Statement of Additional
Information.

INTERNATIONAL EQUITY PORTFOLIO

The International Equity Portfolio is a non-diversified portfolio the investment
objective of which is to seek capital appreciation. The Portfolio invests
primarily in the equity securities of non- United States companies (i.e.,
incorporated or organized outside the United States). The Portfolio is not
required to invest exclusively in common stocks or other equity securities, and,
if deemed advisable, the Portfolio may invest up to 20% of the value of its
total assets in fixed-income securities and short-term money market instruments.
The Portfolio will not invest in fixed-income securities rated lower than
investment grade by the Rating Agencies. In addition, the Portfolio may have
substantial investments in American Depositary Receipts and Global Depositary
Receipts and in convertible bonds and other convertible securities.

The Investment Manager currently intends to invest the Portfolio's assets in
companies based in Continental Europe, the United Kingdom, the Pacific Basin and
in such other areas and countries as the Investment Manager may determine from
time to time. Under normal market conditions, the Portfolio will invest at least
80% of the value of its total assets in the equity securities of companies
within not less than three different countries (not including the United
States). The percentage of the Portfolio's assets invested in particular
geographic sectors may shift from time to time in accordance with the judgment
of the Investment Manager. For a description of the risks associated with
investing in foreign securities, see "Investment Considerations and
Risks--Foreign Securities."

The Investment Manager recognizes that some of the best opportunities are in
securities not generally followed by investment professionals. Thus, the
Investment Manager relies on its research capability and also maintains a
dialogue with foreign brokers and with the management of foreign companies in an
effort to gather the type of "local knowledge" that it believes is critical to
successful investment abroad. To this end, the Investment Manager communicates
with its affiliates, Lazard Freres & Cie. in Paris, Lazard Brothers & Co. Ltd.
in London and Lazard Japan Asset Management K.K. in Tokyo, for information
concerning current business trends, as well as for a better understanding of the
management of local businesses.

INTERNATIONAL SMALL CAP PORTFOLIO

The International Small Cap Portfolio is a non-diversified portfolio the
investment objective of which is to seek capital appreciation. The Portfolio
will invest primarily in equity securities of non-United States companies with
market capitalizations under $1 billion that the Investment Manager considers
inexpensively priced relative to the return on total capital or equity. Under
normal market conditions, the Portfolio will invest at least 65% of the value of
its total assets in small capitalization equity securities. The Portfolio will
invest in equity securities listed on national or regional securities exchanges
or traded over-the-counter of companies based in Continental Europe, the United
Kingdom, the Pacific Basin, Latin America, Canada and such other areas as the
Investment Manager may determine from time to time. The Portfolio also may
invest in American and Global Depositary Receipts and in convertible bonds and
other convertible securities. In selecting investments for the Portfolio, the
Investment Manager will attempt to ascertain inexpensive markets worldwide
through traditional measures of value, and identify securities within such
undervalued markets which, in the Investment Manager's opinion, have one or more
of the characteristics of the Small Cap Factors listed under "Small Cap
Portfolio." For a description of the risks associated with investing in small
capitalization equity securities, see "Investment Considerations and Risks--
Equity Securities."

Under normal market conditions, the Portfolio will invest at least 65% of the
value of its total assets in the equity securities of companies in not less than
three different countries (not including the United States). The remaining
portion of the assets of the Portfolio may be invested in the same or different
countries. The percentage of the Portfolio's assets in a particular geographic
sector may shift from time to time in accordance with the judgment of the
Investment Manager. See "Investment Consideration and Risks--Foreign
Securities."

EMERGING MARKETS PORTFOLIO

The Emerging Markets Portfolio is a non- diversified portfolio the investment
objective of which is to seek long-term capital appreciation. The Portfolio will
invest primarily in securities of issuers which are located, or doing
significant business, in emerging market countries. Emerging markets include
countries where political and economic trends have produced or are producing a
more stable economic environment, developed or developing financial markets and
investment liquidity. Factors affecting a determination of an emerging market
include a legitimate program to reduce government spending and deficits and
reduce excessive regulation of commercial activity, including reducing
confiscatory tax rates, control of inflation, lower trade barriers, stability of
currency exchange rates, increasing foreign and domestic investment,
privatization of state-owned companies and expansion of developed financial
product exchanges.

Under normal market conditions, the Portfolio will invest at least 65% of the
value of its total assets in securities of companies in not less than three
different countries (not including the United States). The remaining portion of
the assets of the Portfolio may be invested in the same or different countries.
The percentage of the Portfolio's assets invested in particular emerging markets
may shift from time to time in accordance with the Investment Manager's
judgment. Emerging market countries generally will include any countries (i)
having an "emerging stock market" as defined by the International Finance
Corporation; (ii) with low- to middle-income economies according to the World
Bank; or (iii) listed in World Bank publications as developing. Currently, the
countries not included in these categories are Australia, Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Netherlands,
New Zealand, Norway, Spain, Sweden, Switzerland, the United Kingdom and the
United States. For a description of the risks associated with investing in
emerging markets, see "Investment Considerations and Risks--Foreign Securities."

The Portfolio invests primarily in equity securities of issuers located, or
doing significant business, in emerging markets including: issuers organized
under the laws of the emerging market country or for which the principal trading
market for such securities is located in the emerging market country or issuers,
wherever organized, when the issuer's principal activities are in the emerging
market country. The Portfolio may invest in closed-end investment companies
investing in emerging market securities. The Portfolio also may invest in
American and Global Depositary Receipts with respect to emerging market
securities.

Although the Portfolio expects to invest principally in equity securities of
emerging markets issuers, there is no requirement that the Portfolio invest
exclusively in equity securities. When, in the Investment Manager's judgment,
business or financial conditions warrant, the Portfolio may invest in
fixed-income securities or assume a temporary defensive position and invest
without limit in the equity securities of U.S. companies or short-term money
market instruments of the types described in "Appendix--Money Market
Instruments" or hold its assets in cash.

In addition, the Portfolio may engage in various investment techniques, such as
foreign currency transactions, options and futures transactions and lending
portfolio securities. For a discussion of the investment techniques and their
related risks, see "Investment Considerations and Risks" and
"Appendix--Investment Techniques" below and "Investment Objectives and
Management Policies--Management Policies" in the Statement of Additional
Information.

FIXED-INCOME PORTFOLIOS--These Portfolios will invest principally in fixed-
income securities.

INTERNATIONAL FIXED-INCOME PORTFOLIO

The International Fixed-Income Portfolio is a non-diversified portfolio the
investment objective of which is to seek high total return, consisting of
current income and capital appreciation, consistent with what the Investment
Manager considers to be prudent investment risk. The Portfolio invests primarily
in foreign fixed-income securities of varying maturities, typically greater than
one year. Under normal market conditions, the Investment Manager anticipates
that the effective duration of the Portfolio will be in the range of two to
eight years. The Portfolio's effective duration generally will be shorter than
the Portfolio's average maturity. The Portfolio's effective "duration" is a
measure of the price sensitivity of its investment portfolio, including expected
cash flow, redemptions and mortgage prepayments under a wide range of interest
rate conditions.

The Portfolio seeks high current yields by investing in a portfolio of
fixed-income securities, such as bonds, debentures, notes, convertible debt
obligations, and mortgage-related and asset-back securities, denominated in a
range of foreign currencies and in the U.S. dollar. Under normal market
conditions, the Portfolio will invest at least 65% of the value of its total
assets in the fixed-income securities of companies within, or governments,
political subdivisions, authorities, agencies or instrumentalities of, not less
than three different countries (not including the United States). The Portfolio
has the flexibility to invest in any region of the world. The Investment Manager
currently intends to invest the Portfolio's assets principally in fixed-income
securities of companies within, or governments of, Continental Europe, the
United Kingdom, Canada, the Pacific Basin and in such other areas and countries
as the Investment Manager may determine from time to time, including countries
that are considered emerging market countries at the time of investment. See
"Investment Considerations and Risks--Foreign Securities." The Portfolio also
may invest in American or Global Depositary Receipts issued in relation to a
pool of fixed-income securities in which the Portfolio could invest directly.

At least 85% of the Portfolio's assets will be invested in (i) fixed-income
securities rated investment grade by one or more Rating Agencies; (ii)
commercial paper issued by foreign or U.S. companies rated Prime-2 or better by
Moody's, A or better by S&P, F-2 or better by Fitch or Duff-2 or better by Duff;
or (iii) fixed-income securities or commercial paper that, if unrated, is
determined by the Investment Manager to be of comparable quality. Up to 15% of
the value of the Portfolio's assets may be invested in high yield, high risk
fixed- income securities that are rated below investment grade by the Rating
Agencies or, if unrated, are determined by the Investment Manager to be of
comparable quality. Fixed-income securities rated below investment grade are
considered to be predominantly speculative. The Portfolio has no current
intention of investing more than 5% of its total assets in securities that are
in default. For a description of the special risks associated with investing in
fixed-income securities rated below investment grade, see "Investment
Considerations and Risks-Lower Rated Securities."

When, in the Investment Manager's judgment, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limit in high quality short-term debt securities or short-term money
market instruments of the types described in "Appendix--Money Market
Instruments" or hold its assets in cash. In addition, the Portfolio may engage
in various investment techniques, such as foreign currency transactions, options
and futures transactions and lending portfolio securities. For a discussion of
the investment techniques and their related risks, see "Investment
Considerations and Risks" and "Appendix-Investment Techniques" below and
"Investment Objectives and Management Policies-Management Policies" in the
Statement of Additional Information.

STRATEGIC YIELD PORTFOLIO

The Strategic Yield Portfolio is a non-diversified portfolio the investment
objective of which is to seek total return, consisting of current income and
capital appreciation. The Portfolio invests principally in high-yielding
fixed-income securities.

Under normal market conditions, the Portfolio will invest at least 65% of the
value of its total assets in fixed-income securities, such as bonds, debentures,
notes, convertible debt obligations, and mortgage-related and asset-backed
securities, of domestic and foreign issuers. At least 95% of these obligations
when purchased by the Portfolio will have a rating of at least Caa/CCC by one or
more Rating Agencies or, if not rated, will be of comparable quality as
determined by the Investment Manager. See "Investment Considerations and
Risks-Foreign Securities." The Portfolio also may invest in American or
Global Depositary Receipts issued in relation to a pool of fixed-income
securities in which the Portfolio could invest directly.

The Investment Manager expects most of the Portfolio's investment securities
will pay cash income. In a limited number of cases, however, "zero coupon" or
"payment- in-kind" high-yield securities may be purchased when, in the opinion
of the Investment Manager, they offer appropriate value relative to their risk.
See "Appendix--Certain Portfolio Securities-- Zero Coupon Securities." Capital
appreciation may result, for example, from an improvement in the credit standing
of an issuer whose securities are held by the Portfolio or from a general
decline in interest rates or both.

When, in the Investment Manager's judgment, business or financial conditions
warrant, the Portfolio may assume a temporary defensive position and invest
without limit in investment grade debt securities or short-term money market
instruments of the types described in "Appendix--Money Market Instruments" or
hold its assets in cash.

In addition, the Portfolio may engage in various investment techniques, such as
options and futures transactions, foreign currency transactions and lending
portfolio securities. For a discussion of the investment techniques and their
related risks, see "Investment Considerations and Risks" and
"Appendix-Investment Techniques" below and "Investment Objectives and
Management Policies-Management Policies" in the Statement of Additional
Information.

INVESTMENT CONSIDERATIONS AND RISKS

GENERAL -- Since each Portfolio will pursue different types of investments, the
risks of investing will vary depending on the Portfolio selected for investment.
Before investing in a Portfolio, each investor should assess the risks
associated with the types of investments made by the Portfolio. The net asset
value per share of each Portfolio should be expected to fluctuate. Investors
should consider each Portfolio as part of an overall investment program and
should invest only if they are willing to undertake the risks involved. See
"Investment Objectives and Management Policies-- Management Policies" in the
Statement of Additional Information for a further discussion of certain risks.

EQUITY SECURITIES --(All Portfolios, except the International Fixed-Income
Portfolio and Strategic Yield Portfolio) Equity securities fluctuate in value,
often based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of a
Portfolio's investments will result in changes in the value of its shares and
thus the Portfolio's total return to investors.

The securities of the smaller companies in which the Small Cap, International
Small Cap, Emerging Markets and Bantam Value Portfolios may invest may be
subject to more abrupt or erratic market movements than larger, more established
companies, because these securities typically are traded in lower volume and the
issuers typically are more subject to changes in earnings and prospects. Smaller
capitalization companies often have limited product lines, markets or financial
resources. They may be dependent for management on one or a few key persons, and
can be more susceptible to losses and risks of bankruptcy. In addition,
securities in the small capitalization sector may be thinly traded (and
therefore have to be sold at a discount from current market prices or sold in
small lots over an extended period of time), may be followed by fewer investment
research analysts and may be subject to wider price swings and thus may create a
greater chance of loss than investing in securities of larger capitalization
companies.

FIXED-INCOME SECURITIES -- (All Portfolios) Even though interest-bearing
securities are investments which promise a stable stream of income, the prices
of such securities generally are inversely affected by changes in interest rates
and, therefore, are subject to the risk of market price fluctuations. Certain
portfolio securities, such as those with interest rates that fluctuate directly
or indirectly based on multiples of a stated index, are designed to be highly
sensitive to changes in interest rates and can subject the holders thereof to
extreme reductions of yield and possibly loss of principal.

The values of fixed-income securities also may be affected by changes in the
credit rating or financial condition of the issuer. Certain portfolio
securities, such as those rated below investment grade by the Rating Agencies,
may be subject to such risk with respect to the issuing entity and to greater
market fluctuations than certain lower yielding, higher rated fixed-income
securities. Once the rating of a portfolio security has been changed, the
Portfolio will consider all circumstances deemed relevant in determining whether
to continue to hold the security. See "Appendix--Certain Portfolio
Securities--Ratings" below and "Appendix" in the Statement of Additional
Information.

FOREIGN SECURITIES--(All Portfolios) Foreign securities markets generally are
not as developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of comparable
U.S. issuers. Similarly, volume and liquidity in most foreign securities markets
are less than in the United States and, at times, volatility of price can be
greater than in the United States.

Because evidences of ownership of such securities usually are held outside the
United States, the Portfolios will be subject to additional risks which include
possible adverse political and economic developments, seizure or nationalization
of foreign deposits and adoption of governmental restrictions which might
adversely affect the payment of principal and interest on the foreign securities
or restrict the payment of principal and interest to investors located outside
the country of the issuer, whether from currency blockage or otherwise.

With respect to the Emerging Markets, International Fixed-Income and Strategic
Yield Portfolios, emerging market countries have economic structures that
generally are less diverse and mature, and political systems that are less
stable, than those of developed countries. Emerging markets may be more volatile
than the markets of more mature economies; however, such markets may provide
higher rates of return to investors. Many emerging market countries providing
investment opportunities for these Portfolios have experienced substantial, and
in some periods extremely high, rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain of these countries.

Since foreign securities often are purchased with and payable in currencies of
foreign countries, the value of these assets as measured in U.S. dollars may be
affected favorably or unfavorably by changes in currency rates and exchange
control regulations.

FOREIGN CURRENCY TRANSACTIONS--(All Portfolios, except the Equity Portfolio,
Small Cap Portfolio and Bantam Value Portfolio) Currency exchange rates may
fluctuate significantly over short periods of time. They generally are
determined by the forces of supply and demand in the foreign exchange markets
and the relative merits of investments in different countries, actual or
perceived changes in interest rates and other complex factors, as seen from an
international perspective. Currency exchange rates also can be affected
unpredictably by intervention by U.S. or foreign governments or central banks,
or the failure to intervene, or by currency controls or political developments
in the United States or abroad. See "Appendix-- Investment Techniques--Foreign
Currency Transactions."

USE OF DERIVATIVES--(All Portfolios) Each Portfolio may invest in derivatives
("Derivatives"). These are financial instruments which derive their performance,
at least in part, from the performance of an underlying asset, index or interest
rate. The Derivatives a Portfolio may use, to the extent described above, may
include options and futures, mortgage-related securities and asset-backed
securities. While Derivatives can be used effectively in furtherance of the
Portfolio's investment objective, under certain market conditions, they can
increase the volatility of the Portfolio's net asset value, can decrease the
liquidity of the Portfolio's securities, and make more difficult the accurate
pricing of the Portfolio's securities. See "Appendix-- Investment
Techniques--Use of Derivatives" below, and "Investment Objectives and Management
Policies-- Management Policies--Derivatives" in the Statement of Additional
Information.

LOWER RATED SECURITIES--(International Fixed-Income Portfolio and Strategic
Yield Portfolio) Each of these Portfolios may invest a portion of its assets in
higher yielding (and, therefore, higher risk) debt securities such as those
rated below investment grade by the Rating Agencies (commonly known as "junk
bonds"). They may be subject to certain risks with respect to the issuing entity
and to greater market fluctuations than certain lower yielding, higher rated
fixed-income securities. The retail secondary market for these securities may be
less liquid than that of higher rated securities; adverse conditions could make
it difficult at times for the Portfolio to sell certain securities or could
result in lower prices than those used in calculating the Portfolio's net asset
value. See "Appendix--Certain Portfolio Securities -- Ratings."

PORTFOLIO TURNOVER--(All Portfolios) No Portfolio will consider portfolio
turnover to be a limiting factor in making investment decisions. The Investment
Manager anticipates that, under normal market conditions, the portfolio turnover
rate of each of the Bantam Value Portfolio, Emerging Markets Portfolio, Equity
Portfolio, Global Equity Portfolio, International Equity Portfolio,
International Small Cap Portfolio and Small Cap Portfolio will not exceed 100%.
The annual portfolio turnover rate of the International Fixed- Income Portfolio
and Strategic Yield Portfolio may exceed 200% (but is not expected to exceed
300%). A 200% portfolio turnover rate is greater than that of most other
investment companies. A high rate of portfolio turnover involves correspondingly
greater transaction expenses than a lower rate, which expenses are borne by the
Portfolio and its shareholders and may result in the realization of substantial
net short-term capital gains.

NON-DIVERSIFIED PORTFOLIOS--(All Portfolios) Each Portfolio is classified as a
"non-diversified" investment company, which means that the proportion of the
Portfolio's assets that may be invested in the securities of a single issuer is
not limited by the 1940 Act. A "diversified" investment company is required by
the 1940 Act generally, with respect to 75% of its total assets, to invest not
more than 5% of such assets in the securities of a single issuer. Since a
relatively high percentage of each Portfolio's assets may be invested in the
securities of a limited number of issuers, some of which may be within the same
industry, the Portfolio's securities may be more sensitive to changes in the
market value of a single issuer or industry. However, to meet Federal tax
requirements, at the close of each quarter no Portfolio may have more than 25%
of its total assets invested in any one issuer and, with respect to 50% of its
total assets, more than 5% of its total assets invested in any one issuer. These
limitations do not apply to U.S. Government securities.

STATE INSURANCE REGULATION--(All Portfolios) The Fund is intended to be a
funding vehicle for VA contracts and VLI policies to be offered by Participating
Insurance Companies and will seek to be offered in as many jurisdictions as
possible. Certain states may have regulations concerning concentration of
investments and purchase and sale of futures contracts, among other techniques.
If applied to the Fund, each Portfolio may be limited in its ability to engage
in such techniques and to manage its portfolio with the flexibility provided
herein. It is the Fund's intention that each Portfolio operate in material
compliance with current insurance laws and regulations, as applied, in each
jurisdiction in which the Portfolio is offered.

SIMULTANEOUS INVESTMENT BY OTHER PORTFOLIOS OR FUNDS--(All Portfolios)
Investment decisions for each Portfolio are made independently from those of the
other portfolios and accounts managed by the Investment Manager. If, however,
such other portfolios or accounts desire to invest in, or dispose of, the same
securities as the Portfolio, available investments or opportunities for sales
will be allocated equitably to each. In some cases, this procedure may adversely
affect the size of the position obtained for or disposed of by a Portfolio or
the price paid or received by a Portfolio.

MANAGEMENT OF THE FUND AND THE PORTFOLIOS

DIRECTORS

The Board of Directors, under applicable laws of the State of Maryland, in
addition to supervising the actions of the Investment Manager, as set forth
below, decides upon matters of general policy.

INVESTMENT MANAGER AND
INVESTMENT MANAGEMENT
AGREEMENT

Lazard Freres Asset Management, 30 Rockefeller Plaza, New York, New York 10020,
has entered into an investment management agreement (the "Management Agreement")
with the Fund on behalf of each of the Portfolios. Pursuant to the Management
Agreement, the Investment Manager regularly will provide the Portfolios with
investment research, advice and supervision and continuously furnish an
investment program for each Portfolio consistent with its investment objectives
and policies, including the purchase, retention and disposition of securities.

The Investment Manager also is responsible for the selection of brokers and
dealers to effect securities transactions and the negotiation of brokerage
commissions, if any. Purchases and sales of securities on a securities exchange
are effected through brokers who charge a negotiated commission for their
services. Brokerage commissions may be paid to Lazard Freres for executing
securities transactions if the use of Lazard Freres is likely to result in price
and execution at least as favorable as those of other qualified brokers or
dealers. The allocation of brokerage transactions also may take into account a
broker's sales of Portfolio shares. See "Portfolio Transactions" in the
Statement of Additional Information.

The Investment Manager is a division of Lazard Freres, a New York limited
liability company, which is registered as an investment adviser with the
Securities and Exchange Commission (the "Commission") and is a member of the New
York, American and Midwest Stock Exchanges. Lazard Freres provides its clients
with a wide variety of investment banking, brokerage and related services. The
Investment Manager provides investment management services to the Fund's other
portfolios and client discretionary accounts with assets totaling approximately
$____ billion as of December 31, 1996. Its clients are both individuals and
institutions, some of whose accounts have investment policies similar to those
of several of the Portfolios.

The Fund has agreed to pay the Investment Manager an investment management fee
at the annual rate set forth below as a percentage of the average daily value of
the net assets of the relevant Portfolio:

Investment
Name of Portfolio Management
Fee Payable

Bantam Value Portfolio .75%
Emerging Markets Portfolio 1.00%
Equity Portfolio .75%
Global Equity Portfolio .75%
International Equity Portfolio .75%
International Fixed-Income .75%
Portfolio
International Small Cap .75%
Portfolio
Small Cap Portfolio .75%
Strategic Yield Portfolio .75%

The investment management fees are accrued daily and paid monthly.

Each Portfolio will bear all expenses not specifically assumed by the Investment
Manager, including, among others, the fee payable to the Investment Manager, the
fees of the Directors who are not "affiliated persons" of the Investment
Manager, the expenses of all Directors, the fees and out- of-pocket expenses of
the Fund's custodian and the transfer and dividend disbursing agent and the fee
payable under the Distribution and Servicing Plan. See "Distribution and
Servicing Plan." Expenses attributable to a particular Portfolio are charged
against the assets of that Portfolio; other expenses of the Fund are allocated
among the Portfolios on the basis determined by the Board of Directors,
including, but not limited to, proportionately in relation to the net assets of
each Portfolio. For a more detailed description of the expenses to be borne by
the Portfolios, see "Management" and "Distribution and Servicing Plan" in the
Statement of Additional Information.

PRINCIPAL PORTFOLIO MANAGERS

The names of the principal persons employed by or associated with the Investment
Manager who are primarily responsible for the day-to-day management of the
assets of each of the Portfolios are as follows:

BANTAM VALUE PORTFOLIO--Eileen Alexanderson, Herbert W. Gullquist, Bradley J.
Purcell, Michael S. Rome and Leonard M. Wilson

EMERGING MARKETS PORTFOLIO--Herbert W. Gullquist and John R. Reinsberg

EQUITY PORTFOLIO--Herbert W. Gullquist and Michael S. Rome

GLOBAL EQUITY PORTFOLIO--Herbert W. Gullquist, John R. Reinsberg and Michael S.
Rome

INTERNATIONAL EQUITY PORTFOLIO--Herbert W. Gullquist and John R. Reinsberg

INTERNATIONAL FIXED-INCOME PORTFOLIO-- Thomas F. Dunn and Ira O. Handler

INTERNATIONAL SMALL CAP PORTFOLIO-- Herbert W. Gullquist and John R. Reinsberg

SMALL CAP PORTFOLIO--Eileen Alexanderson, Herbert W. Gullquist, Bradley J.
Purcell, Michael S. Rome and Leonard M. Wilson

STRATEGIC YIELD PORTFOLIO--Thomas F. Dunn and Ira O. Handler

BIOGRAPHICAL INFORMATION OF PRINCIPAL PORTFOLIO MANAGERS

Eileen Alexanderson. Ms. Alexanderson is a Managing Director of the Investment
Manager where she has been employed since 1979.

Thomas F. Dunn. Mr. Dunn is a Managing Director of the Investment Manager and
has been with the Investment Manager since January 1, 1995.

Herbert W. Gullquist. Mr. Gullquist is a Managing Director of the Investment
Manager and has been with the Investment Manager since 1982.

Ira O. Handler. Mr. Handler is a Senior Vice President of the Investment Manager
and has been a Global & Emerging Fixed- Income Portfolio Manager of the
Investment Manager since 1992.

Bradley J. Purcell. Mr. Purcell is a Vice President of the Investment Manager
and has been with the Investment Manager since 1991.

John R. Reinsberg. Mr. Reinsberg is a Managing Director of the Investment
Manager and has been with the Investment Manager since 1992.

Michael S. Rome. Mr. Rome is a Managing Director of the Investment Manager and
has been with the Investment Manager since 1991.

Leonard M. Wilson. Mr. Wilson has been a Senior Vice President of the Investment
Manager since 1988.

ADMINISTRATOR

State Street Bank and Trust Company ("State Street"), located at 225 Franklin
Street, Boston, Massachusetts 02110, serves as each Portfolio's administrator
pursuant to an Administration Agreement with the Fund.

DISTRIBUTOR

Under the terms of a distribution agreement with the Fund, Lazard Freres acts as
distributor for the Portfolios.

CUSTODIAN; TRANSFER AND DIVIDEND DISBURSING AGENT

State Street has been retained to act as Custodian of the Portfolios'
investments. Boston Financial Data Services Inc., an affiliate of State Street,
serves as the Fund's Transfer and Dividend Disbursing Agent. Neither the
Custodian nor the Transfer Agent has any part in deciding any of the Portfolio's
investment policies or which securities are to be purchased or sold for any
Portfolios. Subject to the supervision of the Fund's Board of Directors, the
Custodian may enter into subcustodial arrangements on behalf of any of the
Portfolios for the holding of foreign securities.

PURCHASE OF SHARES

INDIVIDUALS MAY NOT PLACE PURCHASE ORDERS DIRECTLY WITH THE FUND. INDIVIDUALS
SHOULD CONSULT A PARTICIPATING INSURANCE COMPANY, THE ADMINISTRATOR OF AN
ELIGIBLE PLAN OR A FINANCIAL INTERMEDIARY FOR INFORMATION ON THE PURCHASE OF
PORTFOLIO SHARES. THE FUND DOES NOT ISSUE SHARE CERTIFICATES.

Purchase orders received by the Participating Insurance Company or Eligible Plan
on a given business day will be effected at the net asset value of the
applicable Portfolio determined on such business day if the orders are received
by the Fund on the next business day in accordance with applicable requirements.
It is each Participating Insurance Company's or Eligible Plan administrator's or
trustee's responsibility to transmit purchase orders in accordance with
applicable requirements.

Fund shares are sold on a continuous basis. Net asset value ordinarily is
determined as of 4:00 p.m. (New York Time) on each day during which the New York
Stock Exchange is open for trading. For purposes of determining net asset value,
options and futures contracts will be valued 15 minutes after the close of
trading on the floor of the New York Stock Exchange. Net asset value per share
is computed by dividing the value of the net assets of each Portfolio (i.e., the
value of its assets less liabilities) by the total number of shares outstanding.
Equity securities typically are valued based on market value, or where market
quotations are not readily available, based on fair value as determined in good
faith by the Board. Debt securities having remaining maturities of 60 days or
less are valued on an amortized cost basis unless the Board determines that such
method does not represent fair value. Other debt securities are valued using
available market quotations or at fair value which may be determined by one or
more pricing services. For further information regarding the methods employed in
valuing each Portfolio's investments, see "Determination of Net Asset Value" in
the Statement of Additional Information.

REDEMPTION OF SHARES

Portfolio shares may be redeemed at any time by the separate accounts of the
Participating Insurance Companies or by Eligible Plans. INDIVIDUALS MAY NOT
PLACE REDEMPTION ORDERS DIRECTLY WITH THE FUND. Redemption requests received by
the Participating Insurance Company or Eligible Plan on a given business day
will be effected at the net asset value of the applicable Portfolio determined
on such business day if the requests are received by the Fund in proper form and
in accordance with applicable requirements on the next business day. It is each
Participating Insurance Company's or Eligible Plan administrator's or trustee's
responsibility to properly transmit redemption requests in accordance with
applicable requirements. The value of the shares redeemed may be more or less
than their original cost, depending on the Portfolio's then-current net asset
value.

The Fund ordinarily will make payment for all shares redeemed within seven days
after receipt by the Transfer Agent of a redemption request in proper form,
except as provided by the rules of the Commission.

DISTRIBUTION AND SERVICING PLAN

Shares of the Portfolios are subject to a Distribution and Servicing Plan,
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the Distribution and
Servicing Plan, each Portfolio pays Lazard Freres for advertising, marketing and
distributing the Portfolio's shares and for the provision of certain services to
the holders of Portfolio shares at an annual rate of .25 of 1% of the
Portfolio's average daily net assets. Lazard Freres may make payments to
Participating Insurance Companies for providing these services to Policy owners
or to certain financial institutions, securities dealers and other industry
professionals (collectively, "Service Agents") for providing these services to
Eligible Plan participants. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. The fee payable for such
services is intended to be a "service fee" as defined in the NASD Conduct Rules.
Depending on a Participating Insurance Company's corporate structure and
applicable state law, Lazard Freres may make payments to the Participating
Insurance Company's affiliated broker-dealer or other affiliated company rather
than the Participating Insurance Company itself.

From time to time, Lazard Freres may defer or waive receipt of fees under the
Distribution and Servicing Plan while retaining the ability to be paid by the
Fund under the Distribution and Servicing Plan thereafter. The fees payable to
Lazard Freres under the Distribution and Servicing Plan for advertising,
marketing and distributing Portfolio shares and for payments to Participating
Insurance Companies and Service Agents are payable without regard to actual
expenses incurred.

DIVIDENDS AND DISTRIBUTIONS

INTERNATIONAL FIXED-INCOME PORTFOLIO AND STRATEGIC YIELD PORTFOLIO--
Declare dividends from net investment income daily. Dividends
ordinarily are paid five business days prior to the end of each month. The
earnings for Saturdays, Sundays and holidays are declared as dividends on the
next business day.

EQUITY PORTFOLIO, BANTAM VALUE PORTFOLIO, EMERGING MARKETS PORTFOLIO, GLOBAL
EQUITY PORTFOLIO, INTERNATIONAL EQUITY PORTFOLIO, INTERNATIONAL SMALL CAP
PORTFOLIO AND SMALL CAP PORTFOLIO-- Declare and pay dividends from net
investment income annually.

APPLICABLE TO ALL PORTFOLIOS--Net realized capital gains, if any, generally will
be distributed once a year, but each Portfolio may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), in all events in a manner
consistent with the provisions of the 1940 Act. No Portfolio will make
distributions from net realized capital gains unless capital loss carryovers, if
any, have been utilized or have expired. Shares begin accruing dividends on the
day the purchase order is received in proper form by the Transfer Agent.
Dividends and distributions will be invested in additional shares of the same
Portfolio at net asset value and credited to the shareholder's account on the
payment date or, at the shareholder's election, paid in cash.

TAXATION

Each Portfolio intends to qualify as a regulated investment company under
Subchapter M of the Code. Each Portfolio will be treated as a separate entity
for tax purposes and thus the provisions of the Code applicable to regulated
investment companies generally will be applied to each Portfolio separately,
rather than to the Fund as a whole. In addition, net capital gains, net
investment income, and operating expenses will be determined separately for each
Portfolio. By qualifying as a regulated investment company under the Code, a
Portfolio will not be subject to Federal income taxes with respect to net
investment income and net capital gains distributed to its shareholders.

Section 817(h) of the Code and regulations thereunder set standards for
diversification of the investments underlying Policies in order for the Policies
to be treated as life insurance. These requirements, which are in addition to
diversification requirements applicable to the Portfolios under
Subchapter M of the Code, may affect the composition of a Portfolio's
investments. Since the shares of the Portfolios currently are sold to segregated
asset accounts underlying such Policies, each Portfolio intends to comply with
the diversification requirements as set forth in the regulations.

By meeting these and other requirements, the Participating Insurance Companies,
rather than the Policy owners, should be subject to tax on distributions
received with respect to Portfolio shares. The tax treatment on distributions
made to a Participating Insurance Company will depend on the Participating
Insurance Company's tax status.

Dividends and distributions made by the Portfolios to Eligible Plans are not
taxable to the Plans or to the participants thereunder. The Portfolios will be
managed without regard to tax ramifications.

Since the Fund's shareholders are the Participating Insurance Companies, their
separate accounts and Eligible Plans, no discussion is included herein as to the
Federal income tax consequences to Policy owners and Eligible Plan participants.
For information concerning the Federal income tax consequences, Policy owners
should consult the applicable prospectus of the separate account of the
Participating Insurance Company and Eligible Plan participants should consult
the Plan's administrator or trustee.

ORGANIZATION AND DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Fund consists of five hundred million shares
of common stock, $.001 par value. To date, the Fund's Board of Directors has
authorized a total of nine Portfolios. Each Portfolio is a separate pool of
assets constituting, in effect, a separate fund with its own investment
objectives and policies. A shareholder in a Portfolio will be entitled to its
pro rata share of all dividends and distributions arising from that Portfolio's
assets and, upon redeeming shares of that Portfolio, will receive the
then-current net asset value of that Portfolio represented by the redeemed
shares. See "Purchase of Shares" and "Redemption of Shares." The Fund is
empowered to establish, without shareholder approval, additional portfolios
which may have different investment objectives, policies or restrictions. All
shares of the Fund will be validly issued, fully paid and non-assessable. Each
share has one vote.

In accordance with current law, the Fund anticipates that a Participating
Insurance Company issuing a VA contract or VLI policy or an Eligible Plan that
participates in the Fund will request voting actions from Policy holders or Plan
participants and will vote shares in proportion to the voting instructions
received. For further information on voting rights, Policy holders should refer
to the prospectus for their Policies and Plan participants should consult the
Plan's administrator or trustee.

Maryland law does not require annual meetings of shareholders except under
certain specified circumstances and it is anticipated that shareholder meetings
will be held only when required by Federal or Maryland law. A meeting of
shareholders will be called, however, for the purpose of voting upon the
question of removal of a director of the Fund, upon the written request of
holders of not less than a majority of all votes entitled to be cast at the
meeting. The Fund will assist shareholders in communications concerning the
removal of any director of the Fund.

PERFORMANCE INFORMATION

From time to time, the Portfolios may advertise their "average annual total
return" and their "total return." THESE FIGURES ARE BASED ON HISTORICAL EARNINGS
AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. These total returns show
the investment results of the Portfolio over a specified period of time (such as
one, five or ten years, or the period of time since commencement of operations,
if shorter) and assume the reinvestment of all distributions and dividends. Both
types of total return are computed in the same manner, except that the "average
annual total return" requires the additional step of determining the annual rate
of return required for the initial investment to equal the "total return" at the
end of the relevant period.

In addition, from time to time, the Fund may advertise "yield" and "actual
distribution rate" quotations for one or more Portfolios. A Portfolio's "yield"
for any 30-day period is computed by dividing the net investment income per
share earned during such period by the maximum public offering price per share
on the last day of the period, and then annualizing such 30-day yield in
accordance with a formula prescribed by the Commission which provides for
compounding on a semi-annual basis. A Portfolio's "actual distribution rate" is
computed in the same manner as yield except that actual income dividends
declared per share during the period in question is substituted for net
investment income per share.

Performance will vary from time to time and past results are not necessarily
representative of future results. Investors should remember that performance is
a function of portfolio management in selecting the type and quality of
portfolio securities and is affected by operating expenses. Performance
information, such as that described above, may not provide a basis for
comparison with other investments or other investment companies using a
different method of calculating performance. Performance information of any
Portfolio should not be compared with other funds that offer their shares
directly to the public since the figures provided do not reflect charges imposed
by Participating Insurance Companies under their VA contracts or VLI policies.
The yield and total return for a Portfolio should be distinguished from the rate
of return of a corresponding sub-account or investment division of a separate
account of a Participating Insurance Company, which rate will reflect the
deduction of additional charges, including mortality and expense risk charges,
and therefore will be lower. Variable annuity contract holders and variable life
insurance policy holders should consult the prospectus for their contract or
policy.

Although the Fund is newly-organized and the Portfolios do not yet have their
own performance records, each Portfolio has the same investment objectives and
follows substantially the same investment policies as a corresponding Lazard
public fund. The Lazard public funds also have the same portfolio managers as
the corresponding Portfolios offered in this Prospectus.

Set forth in the table below is total return information for each of the Lazard
public funds corresponding to the Portfolios offered in this Prospectus,
calculated as described above. Investors should not consider this performance
data as an indication of the future performance of the Portfolios offered in
this Prospectus. The performance figures below reflect the deduction of the
historical fees and expenses paid by the Lazard public funds, and not those to
be paid by the Portfolios. The figures also do not reflect the deduction of
charges or expenses attributable to VA contracts or VLI policies. As discussed
above, Policy owners should refer to the applicable insurance company disclosure
documents for information on such charges and expenses. Additionally, although
it is anticipated that each Portfolio and its corresponding Lazard public fund
will hold similar securities, their investment results are expected to differ.
In particular, differences in asset size and in cash flow resulting from
purchases and redemptions of Portfolio shares may result in different security
selections, differences in the relative weightings of securities or differences
in the price paid for particular portfolio holdings.

The average annual total returns for the corresponding Lazard public funds for
the periods ended December 31, 1996 were:

[TO BE PROVIDED]

The above total returns reflect partial waivers of fees. Without such waivers,
the average annual total returns would have been lower.

<PAGE>
APPENDIX

INVESTMENT TECHNIQUES

FOREIGN CURRENCY TRANSACTIONS -- (All Portfolios, except the Bantam Value
Portfolio, Equity Portfolio and Small Cap Portfolio) Foreign currency
transactions may be entered into a variety of purposes, including: to fix in
U.S. dollars, between trade and settlement date, the value of a security the
Portfolio has agreed to buy or sell; to hedge the U.S. dollar value of
securities the Portfolio already owns, particularly if it expects a decrease in
the value of the currency in which the foreign security is denominated; or to
gain exposure to the foreign currency in an attempt to realize gains.

Foreign currency transactions may involve, for example, the Portfolio's purchase
of foreign currencies for U.S. dollars or the maintenance of short positions in
foreign currencies, which would involve the Portfolio agreeing to exchange an
amount of a currency it did not currently own for another currency at a future
date in anticipation of a decline in the value of the currency sold relative to
the currency the Portfolio contracted to receive in the exchange. The
Portfolio's success in these transactions will depend principally on the
Investment Manager's ability to predict accurately the future exchange rates
between foreign currencies and the U.S. dollar.

BORROWING MONEY -- (All Portfolios) Each Portfolio is permitted to borrow to the
extent permitted under the 1940 Act, which permits an investment company to
borrow in an amount up to 33-1/3% of the value of its total assets. Each
Portfolio currently intends to borrow money only from banks for temporary or
emergency (not leveraging) purposes, in an amount up to 15% of the value of its
total assets (including the amount borrowed) valued at the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of a Portfolio's total assets, the
Portfolio will not make any additional investments.

USE OF DERIVATIVES -- (All Portfolios) Each Portfolio may invest in the types of
Derivatives enumerated under "Investment Consideration and Risks-- Use of
Derivatives." These instruments and certain related risks are described more
specifically under "Investment Objectives and Management Policies--Management
Policies--Derivatives" in the Statement of Additional Information.

Derivatives can be volatile and involve various types and degrees of risk,
depending upon the characteristics of the particular Derivative and the
Portfolio as a whole. Derivatives permit the Portfolio to increase or decrease
the level of risk, or change the character of the risk, of its portfolio by
making investments in specific securities.

Derivatives may entail investment exposures that are greater than their cost
would suggest, meaning that a small investment in Derivatives could have a large
potential impact on the Portfolio's performance.

If the Portfolio invests in Derivatives at inappropriate times or judges market
conditions incorrectly, such investments may lower the Portfolio's return or
result in a loss. The Portfolio also could experience losses if its Derivatives
were poorly correlated with its other investments or if the Portfolio were
unable to liquidate its position because of an illiquid secondary market. The
market for many Derivatives is, or suddenly can become, illiquid. Changes in
liquidity may result in significant, rapid and unpredictable changes in the
prices for Derivatives.

Although neither the Fund nor any Portfolio will be a commodity pool, certain
Derivatives subject the Portfolio to the rules of the Commodity Futures Trading
Commission which limit the extent to which the Portfolio can invest in such
Derivatives. The Portfolio may invest in futures contracts and options with
respect thereto for hedging purposes without limit. However, the Portfolio may
not invest in such contracts and options for other purposes if the sum of the
amount of initial margin deposits and premiums paid for unexpired options with
respect to such contracts, other than for bona fide hedging purposes, exceeds 5%
of the liquidation value of the Portfolio's assets, after taking into account
unrealized profits and unrealized losses on such contracts and options;
provided, however, that in the case of an option that is in-the-money at the
time of purchase, the in-the-money amount may be excluded in calculating the 5%
limitation.

Each Portfolio may invest up to 5% of its assets, represented by the premium
paid, in the purchase of call and put options. Each Portfolio may write (i.e.,
sell) covered call and put options contracts to the extent of 20% of the value
of its net assets at the time such option contracts are written. When required
by the Commission, a Portfolio will set aside permissible liquid assets in a
segregated account to cover its obligations relating to its transactions in
Derivatives. To maintain this required cover, the Portfolio may have to sell
portfolio securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price.

LENDING PORTFOLIO SECURITIES -- (All Portfolios) Each Portfolio may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions. The
Portfolio continues to be entitled to payments in amounts equal to the interest,
dividends or other distributions payable on the loaned securities which affords
the Portfolio an opportunity to earn interest on the amount of the loan and on
the loaned securities' collateral. Loans of portfolio securities may not exceed
33-1/3% of the value of the Portfolio's total assets, and the Portfolio will
receive collateral consisting of cash, U.S. Government securities or irrevocable
letters of credit which will be maintained at all times in an amount equal to at
least 100% of the current market value of the loaned securities. Such loans are
terminable by the Portfolio at any time upon specified notice. The Portfolio
might experience risk of loss if the institution with which it has engaged in a
portfolio loan transaction breaches its agreement with the Portfolio.

FORWARD COMMITMENTS -- (All Portfolios) Each Portfolio may purchase securities
on a forward commitment or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a forward
commitment or when-issued security are fixed when the Portfolio enters into the
commitment, but the Portfolio does not make payment until it receives delivery
from the counterparty. The Portfolio will commit to purchase such securities
only with the intention of actually acquiring the securities, but the Portfolio
may sell these securities before the settlement date if it is deemed advisable.
When required by the Commission, a Portfolio may have to set aside permissible
liquid assets in a segregated account to cover its commitments.

CERTAIN PORTFOLIO SECURITIES

CONVERTIBLE SECURITIES -- (All Portfolios) Convertible securities may be
converted at either a stated price or stated rate into underlying shares of
common stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non- convertible securities of the same
issuer, although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer. Because of the
subordination feature, however, convertible securities typically have lower
ratings than similar non-convertible securities.

DEPOSITARY RECEIPTS -- (All Portfolios) Each Portfolio may invest in the
securities of foreign issuers in the form of American Depositary Receipts
("ADRs") and Global Depositary Receipts ("GDRs"). These securities may not
necessarily be denominated in the same currency as the securities into which
they may be converted. ADRs are receipts typically issued by a United States
bank or trust company which evidence ownership of underlying securities issued
by a foreign corporation. GDRs are receipts issued outside the United States,
typically by non-United States banks and trust companies that evidence ownership
of either foreign or domestic securities. Generally, ADRs in registered form are
designed for use in the United States securities markets and GDRs in bearer form
are designed for use outside the United States.

FOREIGN GOVERNMENT OBLIGATIONS; SECURITIES OF SUPRANATIONAL ENTITIES -- (All
Portfolios) Each Portfolio may invest in obligations issued or guaranteed by one
or more foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Investment Manager to be of
comparable quality to the other obligations in which the Portfolio may invest.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the Asian
Development Bank and the InterAmerican Development Bank.

WARRANTS -- (All Portfolios) A warrant is an instrument issued by a corporation
which gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of time. A
Portfolio may invest up to 5% of its total assets in warrants, except that this
limitation does not apply to warrants purchased by the Portfolio that are sold
in units with, or attached to, other securities.

MORTGAGE-RELATED SECURITIES -- (International Fixed-Income Portfolio and
Strategic Yield Portfolio) Mortgage-related securities are a form of Derivative
collateralized by pools of mortgages. The mortgage-related securities which may
be purchased include those with fixed, floating and variable interest rates,
those with interest rates that change based on multiples of changes in interest
rates and those with interest rates that change inversely to changes in interest
rates, as well as stripped mortgage-backed securities. Stripped mortgage-backed
securities usually are structured with classes that receive different
proportions of interest and principal distributions on a pool of mortgage-backed
securities or whole loans. A common type of stripped mortgage-backed security
will have one class receiving some of the interest and most of the principal
from the mortgage collateral, while the other class will receive most of the
interest and the remainder of the principal. Although certain mortgage- related
securities are guaranteed by a third party or otherwise similarly secured, the
market value of the security, which may fluctuate, is not secured. If a
mortgage-related security is purchased at a premium, all or part of the premium
may be lost if there is a decline in the market value of the security, whether
resulting from changes in interest rates or prepayments on the underlying
mortgage collateral.

The mortgage-related securities in which these Portfolios may invest also
include multi-class pass through certificates secured principally by mortgage
loans on commercial properties. These mortgage- related securities are
structured similarly to mortgage-related securities secured by pools of
residential mortgages. Commercial lending, however, generally is viewed as
exposing the lender to a greater risk of loss than one- to four-family
residential lending. Commercial lending, for example, typically involves larger
loans to single borrowers or groups of related borrowers than residential one-
to four-family mortgage loans. In addition, the repayment of loans secured by
income producing properties typically is dependent upon the successful operation
of the related real estate project and the cash flow generated therefrom.
Consequently, adverse changes in economic conditions and circumstances are more
likely to have an adverse impact on mortgage-related securities secured by loans
on commercial properties than on those secured by loans on residential
properties.

Each of these Portfolios also may invest in subordinated mortgage-related
securities ("Subordinated Securities"), which are issued or sponsored by
commercial banks, savings and loan institutions, mortgage bankers, private
mortgage insurance companies and other non-governmental issuers. Subordinated
Securities have no governmental guarantee, and are subordinated in some manner
as to the payment of principal and/or interest to the holders of more senior
mortgage-related securities arising out of the same pool of mortgages. The
holders of Subordinated Securities typically are compensated with a higher
stated yield than are the holders of more senior mortgage-related securities. On
the other hand, Subordinated Securities typically subject the holder to greater
risk than senior mortgage-related securities and tend to be rated in a lower
rating category, and frequently a substantially lower rating category, than the
senior mortgage-related securities issued in respect of the same pool of
mortgages. Subordinated Securities generally are likely to be more sensitive to
changes in prepayment and interest rates and the market for such securities may
be less liquid than is the case for traditional fixed- income securities and
senior mortgage-related securities.

As with other interest-bearing securities, the prices of certain
mortgage-related securities are inversely affected by changes in interest rates.
However, although the value of a mortgage-related security may decline when
interest rates rise, the converse is not necessarily true, since in periods of
declining interest rates the mortgages underlying the security are more likely
to be prepaid. For this and other reasons, a mortgage-related security's stated
maturity may be shortened by unscheduled prepayments on the underlying
mortgages, and, therefore, it is not possible to predict accurately the
security's return to the Portfolio. Moreover, with respect to stripped
mortgage-backed securities, if the underlying mortgage securities experience
greater than anticipated prepayments of principal, the Portfolio may fail to
fully recoup its initial investment even if the securities are rated in the
highest rating category by a nationally recognized statistical rating
organization. During periods of rapidly rising interest rates, prepayments of
mortgage-related securities may occur at slower than expected rates. Slower
prepayments effectively may lengthen a mortgage-related security's expected
maturity which generally would cause the value of such security to fluctuate
more widely in response to changes in interest rates. Were the prepayments on
the Portfolio's mortgage-related securities to decrease broadly, the Portfolio's
effective duration, and thus sensitivity to interest rate fluctuations, would
increase. For further discussion concerning the investment considerations
involved, see "Investment Considerations and Risks--Fixed-Income Securities" and
"Appendix-Certain Portfolio Securities--Illiquid Securities" below.

ASSET-BACKED SECURITIES--(International Fixed-Income Portfolio and Strategic
Yield Portfolio) Asset-backed securities are a form of Derivative. The
securitization techniques used for asset-backed securities are similar to those
used for mortgage- related securities. These securities include debt securities
and securities with debt-like characteristics. The collateral for these
securities has included home equity loans, automobile and credit card
receivables, boat loans, computer leases, airplane leases, mobile home loans,
recreational vehicle loans and hospital account receivables. The Portfolio may
invest in these and other types of asset-backed securities that may be developed
in the future.

Asset-backed securities present certain risks that are not presented by
mortgage-related securities. Primarily, these securities may provide the
Portfolio with a less effective security interest in the related collateral than
do mortgage-related securities. Therefore, there is the possibility that
recoveries on the underlying collateral may not, in some cases, be available to
support payments on these securities.

ZERO COUPON AND STRIPPED U.S. TREASURY SECURITIES--(Strategic Yield Portfolio)
The Portfolio may invest in zero coupon U.S. Treasury securities, which are
Treasury notes and Bonds that have been stripped of their unmatured interest
coupons, the coupons themselves and receipts or certificates representing
interests in such stripped debt obligations and coupons. Zero coupon securities
also are issued by corporations and financial institutions which constitute a
proportionate ownership of the issuer's pool of underlying U.S. Treasury
securities. A zero coupon security pays no interest to its holder during its
life and is sold at a discount to its face value at maturity. The market prices
of zero coupon securities generally are more volatile than the market prices of
securities that pay interest periodically and are likely to respond to a greater
degree to changes in interest rates than non-zero coupon securities having
similar maturities and credit qualities.

INVESTMENT COMPANIES -- (All Portfolios) Each Portfolio may invest, to the
extent permitted under the 1940 Act, in securities issued by investment
companies which principally invest in securities of the type in which the
Portfolio invests. Investments in the securities of investment companies may
involve duplication of advisory fees and certain other expenses.

MONEY MARKET INSTRUMENTS -- (All Portfolios) Each Portfolio, unless otherwise
provided, may invest in the following types of Money Market Instruments.

U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury securities
that differ in their interest rates, maturities and times of issuance. Some
obligations issued or guaranteed by U.S. Government agencies and
instrumentalities are supported by the full faith and credit of the U.S.
Treasury; others by the right of the issuer to borrow from the Treasury; others
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others only by the credit of
the agency or instrumentality. These securities bear fixed, floating or variable
rates of interest. While the U.S. Government provides financial support to such
U.S. Government-sponsored agencies and instrumentalities, no assurance can be
given that it will always do so since it is not so obligated by law.

FOREIGN GOVERNMENT SECURITIES. (All Portfolios) Securities issued or guaranteed
by a foreign government or its agencies or instrumentalities.

REPURCHASE AGREEMENTS. In a repurchase agreement, the Portfolio buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and price
(usually within seven days). The repurchase agreement thereby determines the
yield during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve risks in the event of a default or insolvency of the
other party to the agreement, including possible delays or restrictions upon the
Portfolio's ability to dispose of the underlying securities. The Portfolio may
enter into repurchase agreements with certain banks or non-bank dealers.

BANK OBLIGATIONS. The Portfolio may purchase certificates of deposit, time
deposits, bankers' acceptances and other short-term obligations issued by
domestic banks, foreign subsidiaries or foreign branches of domestic banks,
domestic and foreign branches of foreign banks, domestic savings and loan
associations and other banking institutions. With respect to such securities
issued by foreign subsidiaries or foreign branches of domestic banks, and
domestic and foreign branches of foreign banks, the Portfolio may be subject to
additional investment risks that are differing in some respects from those
incurred by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Investment Considerations and Risks-Foreign Securities."

Certificates of deposit are negotiable certificates evidencing the obligation of
a bank to repay funds deposited with it for a specified period of time.

Time deposits are non-negotiable deposits maintained in a banking institution
for a specified period of time (in no event longer than seven days) at a stated
interest rate.

Banker's acceptances are credit instruments evidencing the obligation of a bank
to pay a draft drawn on it by a customer. These instruments reflect the
obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.

COMMERCIAL PAPER. Commercial paper consists of short-term, unsecured
promissory notes issued to finance short- term credit needs. The commercial
paper of U.S. issuers or foreign issuers (in the case of the International
Equity Portfolio, International Fixed-Income Portfolio, International Small Cap
Portfolio, Emerging Markets Portfolio, Strategic Yield Portfolio and Global
Equity Portfolio) purchased by the Portfolio will consist only of direct
obligations which, at the time of their purchase, are (a) rated not lower than
Prime- 1 by Moody's, A-1 by S&P, Fitch-1 by Fitch or Duff-1 by Duff, (b) issued
by companies having an outstanding debt issue currently rated at least Aa/AA by
one or more Rating Agencies, or (c) if unrated, determined by the Investment
Manager to be of comparable quality to those rated obligations which may be
purchased by the Portfolio.

PARTICIPATION INTERESTS. Each Portfolio may purchase from financial
institutions participation interests in securities in which the Portfolio may
invest. A participation interest gives the Portfolio an undivided interest in
the security in the proportion that the Portfolio's participation interest bears
to the total principal amount of the security. These instruments may have fixed,
floating or variable rates of interest with remaining maturities of 13 months or
less. If the participation interest is unrated, or has been given a rating below
that which is permissible for purchase by the Portfolio, the participation
interest will be collateralized by U.S. Government securities, or, in the case
of unrated participation interests, the Investment Manager must have determined
that the instrument is of comparable quality to those instruments in which the
Portfolio may invest.

ILLIQUID SECURITIES -- (All Portfolios) Each Portfolio may invest up to 15%
of the value of its net assets in securities as to which a liquid trading market
does not exist, provided such investments are consistent with the Portfolio's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, repurchase agreements providing for
settlement in more than seven days after notice, certain mortgage-related
securities, and, with respect to the International Fixed-Income Portfolio and
Strategic Yield Portfolio, certain privately negotiated, non-exchange traded
options and securities used to cover such options. As to these securities, the
Portfolio is subject to a risk that should the Portfolio desire to sell them
when a ready buyer is not available at a price the Portfolio deems
representative of their value, the value of the Portfolio's net assets could be
adversely affected.

RATINGS -- (All Portfolios) Securities rated Baa by Moody's are considered
medium grade obligations; they are neither highly protected nor poorly secured,
and are considered by Moody's to have speculative characteristics. Bonds rated
BBB by S&P, Fitch and Duff are investment grade and regarded as having adequate
capacity to pay interest and repay principal; however, adverse changes in
economic conditions and circumstances are more likely to have an adverse impact
on these bonds and, therefore, impair timely payment. Securities rated Ba by
Moody's are judged to have speculative elements; their future cannot be
considered as well assured and often the protection of interest and principal
payments may be very moderate. Securities rated BB by S&P, Fitch and Duff are
regarded as having predominantly speculative characteristics and, while such
obligations have less near-term vulnerability to default than other speculative
grade debt, they face major ongoing uncertainties or exposure to adverse
business, financial or economic conditions which could lead to inadequate
capacity to meet timely interest and principal payments. Securities rated Caa by
Moody's or CCC by S&P, Fitch and Duff are of poor standing and may be in default
or there may be present elements of danger with respect to principal or
interest. Securities rated C by Moody's are regarded as having extremely poor
prospects of ever attaining any real investment standing. Securities rated D by
S&P, Fitch and Duff are in default, and payment of interest and/or repayment of
principal is in arrears. Such securities, though high yielding, are
characterized by great risk. See "Appendix" in the Statement of Additional
Information for a general description of securities ratings.

The Rating Agencies' ratings represent their opinions as to the quality of the
obligations which they undertake to rate. Ratings are relative and subjective
and, although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risks of such
obligations. Although these ratings may be an initial criterion for selection of
portfolio investments, the Investment Manager also will evaluate these
securities and the ability of the issuers of such securities to pay interest and
principal. The Portfolio's ability to achieve its investment objective may be
more dependent on the Investment Manager's credit analysis than might be the
case for a fund that invested in higher rated securities.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE FUND'S
OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S SHARES,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFERING MAY NOT LAWFULLY BE MADE.

<PAGE>
LAZARD RETIREMENT SERIES, INC.
30 Rockefeller Plaza
New York, New York 10020
(212) 632-6400 (New York State)
(800) 228-0203 (other continental states)

STATEMENT OF ADDITIONAL INFORMATION

__________, 1997

Lazard Retirement Series, Inc. (the "Fund") is a no-load, open-end
management investment company known as a mutual fund. This Statement of
Additional Information, which is not a prospectus, supplements and should be
read in conjunction with the current Prospectus of the Fund, dated _________,
1997, as it may be revised from time to time, relating to the following nine
portfolios (individually, a "Portfolio" and collectively, the "Portfolios"):

Lazard Retirement Bantam Value Lazard Retirement International Fixed-Income
Portfolio Portfolio
Lazard Retirement Emerging Markets Lazard Retirement International Small Cap
Portfolio Portfolio
Lazard Retirement Equity Lazard Retirement Small Cap
Portfolio Portfolio
Lazard Retirement Global Equity Lazard Retirement Strategic Yield
Portfolio Portfolio
Lazard Retirement International Equity
Portfolio

SHARES OF THE PORTFOLIOS ARE OFFERED ONLY TO VARIABLE ANNUITY AND
VARIABLE LIFE INSURANCE SEPARATE ACCOUNTS ESTABLISHED BY INSURANCE COMPANIES
("PARTICIPATING INSURANCE COMPANIES") TO FUND VARIABLE ANNUITY CONTRACTS AND
VARIABLE LIFE INSURANCE POLICIES (COLLECTIVELY, "POLICIES") AND QUALIFIED
PENSION AND RETIREMENT PLANS AND ACCOUNTS PERMITTING ACCUMULATION OF ASSETS ON A
TAX-DEFERRED BASIS (COLLECTIVELY, "ELIGIBLE PLANS") OUTSIDE THE SEPARATE ACCOUNT
CONTEXT.

Lazard Freres Asset Management, a division of Lazard Freres & Co. LLC
("Lazard Freres"), serves as the investment manager (the "Investment Manager")
to each of the Portfolios.

To obtain a copy of the Fund's Prospectus, please write or call the
Fund at the address and telephone number given above.
<PAGE>

TABLE OF CONTENTS
Page
Investment Objectives and Management Policies...............................
Investment Restrictions.....................................................
Management..................................................................
Determination of Net Asset Value............................................
Portfolio Transactions......................................................
Redemption of Shares........................................................
Distribution and Servicing Plan.............................................
Dividends and Distributions.................................................
Taxation....................................................................
Performance Information.....................................................
Organization and Description of Capital Stock...............................
Counsel and Independent Auditors............................................
Appendix....................................................................

<PAGE>

INVESTMENT OBJECTIVES AND MANAGEMENT POLICIES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTIONS IN THE FUND'S PROSPECTUS ENTITLED "DESCRIPTION OF
THE PORTFOLIOS" AND "APPENDIX."

PORTFOLIO SECURITIES

DEPOSITARY RECEIPTS. (All Portfolios) These securities may be
purchased through "sponsored" or "unsponsored" facilities. A sponsored facility
is established jointly by the issuer of the underlying security and a
depositary, whereas a depositary may establish an unsponsored facility without
participation by the issuer of the deposited security. Holders of unsponsored
depositary receipts generally bear all the costs of such facilities and the
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through voting rights to the holders of such receipts in
respect of the deposited securities.

MUNICIPAL OBLIGATIONS. (Strategic Yield Portfolio) Municipal
obligations are debt obligations issued by states, territories and possessions
of the United States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or multistate agencies or
authorities. Municipal obligations bear fixed, floating or variable rates of
interest. Certain municipal obligations are subject to redemption at a date
earlier than their stated maturity pursuant to call options, which may be
separated from the related municipal obligations and purchased and sold
separately. The Portfolio also may acquire call options on specific municipal
obligations. The Portfolio generally would purchase these call options to
protect the Portfolio from the issuer of the related municipal obligation
redeeming, or other holder of the call option from calling away, the municipal
obligation before maturity.

Municipal obligations generally include debt obligations issued to
obtain funds for various public purposes as well as certain industrial
development bonds issued by or on behalf of public authorities. Municipal
obligations are classified as general obligation bonds, revenue bonds and notes.
General obligation bonds are secured by the issuer's pledge of its faith, credit
and taxing power for the payment of principal and interest. Revenue bonds are
payable from the revenue derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific revenue source, but not from the general taxing power. Industrial
development bonds, in most cases, are revenue bonds and generally do not carry
the pledge of the credit of the issuing municipality, but generally are
guaranteed by the corporate entity on whose behalf they are issued. Notes are
short-term instruments which are obligations of the issuing municipalities or
agencies and are sold in anticipation of a bond sale, collection of taxes or
receipt of other revenues. Municipal obligations include municipal
lease/purchase agreements which are similar to installment purchase contracts
for property or equipment issued by municipalities.

While, in general, municipal obligations are tax exempt securities
having relatively low yields as compared to taxable, non-municipal obligations
of similar quality, certain municipal obligations are taxable obligations,
offering yields comparable to, and in some cases greater than, the yields
available on other permissible Portfolio investments. Dividends received by
shareholders on Portfolio shares which are attributable to interest income
received by the Portfolio from municipal obligations generally will be subject
to Federal income tax. The Portfolio will invest in municipal obligations, the
ratings of which correspond with the ratings of other permissible Portfolio
investments. The Portfolio currently intends to invest no more than 25% of its
assets in municipal obligations. However, this percentage may be varied from
time to time without shareholder approval.

REPURCHASE AGREEMENTS. (All Portfolios) The Fund's custodian or
sub-custodian will have custody of, and will hold in a segregated account,
securities acquired by a Portfolio under a repurchase agreement. Repurchase
agreements are considered by the staff of the Securities and Exchange Commission
(the "Commission") to be loans by the Portfolio that enters into them. In an
attempt to reduce the risk of incurring a loss on a repurchase agreement, the
Portfolio will enter into repurchase agreements only with domestic banks with
total assets in excess of $1 billion, or primary government securities dealers
reporting to the Federal Reserve Bank of New York, with respect to securities of
the type in which the Portfolio may invest, and will require that additional
securities be deposited with it if the value of the securities purchased should
decrease below the resale price.

COMMERCIAL PAPER AND OTHER SHORT-TERM CORPORATE OBLIGATIONS. (All
Portfolios) These instruments include variable amount master demand notes, which
are obligations that permit a Portfolio to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Portfolio, as
lender, and the borrower. These notes permit daily changes in the amounts
borrowed. Because these obligations are direct lending arrangements between the
lender and borrower, it is not contemplated that such instruments generally will
be traded, and there generally is no established secondary market for these
obligations, although they are redeemable at face value, plus accrued interest,
at any time. Accordingly, where these obligations are not secured by letters of
credit or other credit support arrangements, the Portfolio's right to redeem is
dependent on the ability of the borrower to pay principal and interest on
demand. Such obligations frequently are not rated by credit rating agencies, and
the Portfolio may invest in them only if at the time of an investment the
borrower meets the criteria set forth in the Prospectus for other commercial
paper issuers.

CONVERTIBLE SECURITIES. (All Portfolios) Although to a lesser extent
than with fixed-income securities, the market value of convertible securities
tends to decline as interest rates increase and, conversely, tends to increase
as interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock. A unique feature of convertible
securities is that as the market price of the underlying common stock declines,
convertible securities tend to trade increasingly on a yield basis, and so may
not experience market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases, the
prices of the convertible securities tend to rise as a reflection of the value
of the underlying common stock. While no securities investments are without
risk, investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.

Convertible securities are investments that provide for a stable
stream of income with generally higher yields than common stocks. There can be
no assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases in
the market price of the underlying common stock. There can be no assurance of
capital appreciation, however, because securities prices fluctuate. Convertible
securities, however, generally offer lower interest or dividend yields than
non-convertible securities of similar quality because of the potential for
capital appreciation.

ILLIQUID SECURITIES. (All Portfolios) When purchasing securities that
have not been registered under the Securities Act of 1933, as amended, and are
not readily marketable, a Portfolio will endeavor, to the extent practicable, to
obtain the right to registration at the expense of the issuer. Generally, there
will be a lapse of time between the Portfolio's decision to sell any such
security and the registration of the security permitting sale. During any such
period, the price of the securities will be subject to market fluctuations.
However, where a substantial market of qualified institutional buyers has
developed for certain unregistered securities purchased by the Portfolio
pursuant to Rule 144A under the Securities Act of 1933, as amended, the
Portfolio intends to treat such securities as liquid securities in accordance
with procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for specific restricted securities sold
pursuant to Rule 144A will develop, the Fund's Board has directed the Investment
Manager to monitor carefully each Portfolio's investments in such securities
with particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a period of
time, qualified institutional buyers cease purchasing restricted securities
pursuant to Rule 144A, a Portfolio's investing in such securities may have the
effect of increasing the level of illiquidity in its investment portfolio during
such period.

MORTGAGE-RELATED SECURITIES. (International Fixed-Income Portfolio and
Strategic Yield Portfolio)

GOVERNMENT-AGENCY SECURITIES--Mortgage-related securities issued by the
Government National Mortgage Association ("GNMA") include GNMA Mortgage
Pass-Through Certificates (also known as "Ginnie Maes") which are guaranteed as
to the timely payment of principal and interest by GNMA and such guarantee is
backed by the full faith and credit of the United States. GNMA is a wholly-owned
U.S. Government corporation within the Department of Housing and Urban
Development. GNMA certificates also are supported by the authority of GNMA to
borrow funds from the U.S. Treasury to make payments under its guarantee.

GOVERNMENT-RELATED SECURITIES--Mortgage-related securities issued by the
Federal National Mortgage Association ("FNMA") include FNMA Guaranteed
Mortgage Pass-Through Certificates (also known as "Fannie Maes") which are
solely the obligations of FNMA and are not backed by or entitled to the full
faith and credit of the United States. FNMA is a government-sponsored
organization owned entirely by private stockholders. Fannie Maes are guaranteed
as to timely payment of principal and interest by FNMA.

Mortgage-related securities issued by the Federal Home Loan Mortgage
Corporation ("FHLMC") include FHLMC Mortgage Participation Certificates (also
known as "Freddie Macs" or "PCs"). FHLMC is a corporate instrumentality of the
United States created pursuant to an Act of Congress, which is owned entirely by
Federal Home Loan Banks. Freddie Macs are not guaranteed by the United States or
by any Federal Home Loan Bank and do not constitute a debt or obligation of the
United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder
to timely payment of interest, which is guaranteed by FHLMC. FHLMC guarantees
either ultimate collection or timely payment of all principal payments on the
underlying mortgage loans. When FHLMC does not guarantee timely payment of
principal, FHLMC may remit the amount due on account of its guarantee of
ultimate payment of principal at any time after default on an underlying
mortgage, but in no event later than one year after it becomes payable.

PRIVATE ENTITY SECURITIES--These mortgage-related securities are
issued by commercial banks, savings and loan institutions, mortgage bankers,
private mortgage insurance companies and other non-governmental issuers. Timely
payment of principal and interest on mortgage-related securities backed by pools
created by non-governmental issuers often is supported partially by various
forms of insurance or guarantees, including individual loan, title, pool and
hazard insurance. The insurance and guarantees are issued by government
entities, private insurers and the mortgage poolers. There can be no assurance
that the private insurers or mortgage poolers can meet their obligations under
the policies, so that if the issuers default on their obligations the holders of
the security could sustain a loss. No insurance or guarantee covers the
Portfolio or the price of the Portfolio's shares. Mortgage-related securities
issued by non-governmental issuers generally offer a higher rate of interest
than government-agency and government-related securities because there are no
direct or indirect government guarantees of payment.

REITS. (The Bantam Value Portfolio, Equity Portfolio, Global Equity
Portfolio and Small Cap Portfolio) Each of these Portfolios may invest an
unlimited amount of its assets in Real Estate Investment Trusts ("REITS"),
although each currently intends to limit its investments in REITS to no more
than 5% of its net assets. Each Portfolio intends to invest in listed equity
REITS, which own properties, and listed mortgage REITS, which make short-term
construction and development mortgage loans or which invest in long-term
mortgages or mortgage pools. Accordingly, the Portfolio may be subject to the
considerations associated with the direct ownership of real estate because of
the Portfolio's ability to invest in the securities of companies that own,
construct, mange or sell residential, commercial or industrial real estate.
These include declines in the value of real estate, factors related to general
and local economic conditions, overbuilding and increased competition, increases
in property taxes and operating expenses, changes in zoning laws, casualty or
condemnation losses, limitations on rents, changes in neighborhood values, the
appeal of properties to tenants, and increases in interest rates. The value of
securities of companies that service the real testate industry also may be
affected by such risks.

In addition, equity REITS may be affected by any changes in the value
of the underlying property owned by the trusts, while mortgage REITS may be
affected by the quality of any credit extended. Further, equity and mortgage
REITS are dependent upon management skill, are not diversified and are therefore
subject to the risk of financing single or a limited number of projects. REITS
are also subject to heavy cash flow dependency, defaults by borrowers,
self-liquidation and the possibility of failing to qualify for tax free
pass-through of income under the Internal Revenue Code of 1986, as amended (the
"Code"), and to maintain exemption under the Investment Company Act of 1940, as
amended (the "1940 Act").

INVESTMENT COMPANIES. (All Portfolios) Each Portfolio may invest in
securities issued by other investment companies. Under the 1940 Act, a
Portfolio's investment in such securities, subject to certain exceptions,
currently is limited to (i) 3% of the total voting stock of any one investment
company, (ii) 5% of the Portfolio's net assets with respect to any one
investment company and (iii) 10% of the Portfolio's net assets in the aggregate.

MANAGEMENT POLICIES

LENDING PORTFOLIO SECURITIES. (All Portfolios) In connection with its
securities lending transactions, a Portfolio may return to the borrower or a
third party which is unaffiliated with the Portfolio, and which is acting as a
"placing broker," a part of the interest earned from the investment of
collateral received for securities loaned.

The Commission currently requires that the following conditions must
be met whenever portfolio securities are loaned: (1) the Portfolio must receive
at least 100% cash collateral from the borrower; (2) the borrower must increase
such collateral whenever the market value of the securities rises above the
level of such collateral; (3) the Portfolio must be able to terminate the loan
at any time; (4) the Portfolio must receive reasonable interest on the loan, as
well as any dividends, interest or other distributions payable on the loaned
securities, and any increase in market value; (5) the Portfolio may pay only
reasonable custodian fees in connection with the loan; and (6) while voting
rights on the loaned securities may pass to the borrower, the Fund's Board must
terminate the loan and regain the right to vote the securities if a material
event adversely affecting the investment occurs.

DERIVATIVES. (All Portfolios, except the International Equity
Portfolio and Small Cap Portfolio) Each of these Portfolios may invest in
Derivatives (as defined in the Prospectus) for a variety of reasons, including
to hedge certain market risks, to provide a substitute for purchasing or selling
particular securities or to increase potential income gain. Derivatives may
provide a cheaper, quicker or more specifically focused way for the Portfolio to
invest than "traditional" securities would.

Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter Derivatives.
Exchange-traded Derivatives generally are guaranteed by the clearing agency
which is the issuer or counterparty to such Derivatives. This guarantee usually
is supported by a daily payment system (i.e., variation margin requirements)
operated by the clearing agency in order to reduce overall credit risk. As a
result, unless the clearing agency defaults, there is relatively little
counterparty credit risk associated with Derivatives purchased on an exchange.
By contrast, no clearing agency guarantees over-the-counter Derivatives.
Therefore, each party to an over-the-counter Derivative bears the risk that the
counterparty will default. Accordingly, the Investment Manager will consider the
creditworthiness of counterparties to over-the-counter Derivatives in the same
manner as it would review the credit quality of a security to be purchased by
the Portfolio. Over- the-counter Derivatives are less liquid than
exchange-traded Derivatives since the other party to the transaction may be the
only investor with sufficient understanding of the Derivative to be interested
in bidding for it.

FUTURES TRANSACTIONS--IN GENERAL. (All Portfolios) Each Portfolio may enter into
futures contracts in U.S. domestic markets, such as the Chicago Board of Trade
and the International Monetary Market of the Chicago Mercantile Exchange, or, if
permitted as described in the Prospectus, on exchanges located outside the
United States, such as the London International Financial Futures Exchange and
the Sydney Futures Exchange Limited. Foreign markets may offer advantages such
as trading opportunities or arbitrage possibilities not available in the United
States. Foreign markets, however, may have greater risk potential than domestic
markets. For example, some foreign exchanges are principal markets so that no
common clearing facility exists and an investor may look only to the broker for
performance of the contract. In addition, any profits a Portfolio might realize
in trading could be eliminated by adverse changes in the exchange rate, or the
Portfolio could incur losses as a result of those changes. Transactions on
foreign exchanges may include both commodities which are traded on domestic
exchanges and those which are not. Unlike trading on domestic commodity
exchanges, trading on foreign commodity exchanges is not regulated by the
Commodity Futures Trading Commission.

Engaging in these transactions involves risk of loss to the Portfolio
which could adversely affect the value of the Portfolio's net assets. Although a
Portfolio intends to purchase or sell futures contracts only if there is an
active market for such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a price
beyond that limit or trading may be suspended for specified periods during the
trading day. Futures contract prices could move to the limit for several
consecutive trading days with little or no trading, thereby preventing prompt
liquidation of futures positions and potentially subjecting the Portfolio to
substantial losses.

Successful use of futures by a Portfolio also is subject to the
Investment Manager's ability to predict correctly movements in the direction of
the relevant market, and, to the extent the transaction is entered into for
hedging purposes, to ascertain the appropriate correlation between the
transaction being hedged and the price movements of the futures contract. For
example, if a Portfolio uses futures to hedge against the possibility of a
decline in the market value of securities held in its portfolio and the prices
of such securities instead increase, the Portfolio will lose part or all of the
benefit of the increased value of securities which it has hedged because it will
have offsetting losses in its futures positions. Furthermore, if in such
circumstances the Portfolio has insufficient cash, it may have to sell
securities to meet daily variation margin requirements. The Portfolio may have
to sell such securities at a time when it may be disadvantageous to do so.

Pursuant to regulations and/or published positions of the Commission,
a Portfolio may be required to segregate permissible liquid assets in connection
with its commodities transactions in an amount generally equal to the value of
the underlying commodity. The segregation of such assets will have the effect of
limiting the Portfolio's ability otherwise to invest those assets.

SPECIFIC FUTURES TRANSACTIONS. Each Portfolio, except the International
Fixed-Income Portfolio, may purchase and sell stock index futures contracts. A
stock index future obligates the Portfolio to pay or receive an amount of cash
equal to a fixed dollar amount specified in the futures contract multiplied by
the difference between the settlement price of the contract on the contract's
last trading day and the value of the index based on the stock prices of the
securities that comprise it at the opening of trading in such securities on the
next business day.

The Emerging Markets Portfolio, Global Equity Portfolio, International
Fixed- Income Portfolio, International Small Cap Portfolio and Strategic Yield
Portfolio may purchase and sell interest rate futures contracts. An interest
rate future obligates the Fund to purchase or sell an amount of a specific debt
security at a future date at a specific price.

Each Portfolio, except the Equity Portfolio, Bantam Value Portfolio
and Small Cap Portfolio, may purchase and sell currency futures. A currency
future obligates the Portfolio to purchase or sell an amount of a specific
currency at a future date at a specific price.

OPTIONS--IN GENERAL. (All Portfolios) Each Portfolio may purchase and write
(i.e., sell) call or put options with respect to specific securities. A call
option gives the purchaser of the option the right to buy, and obligates the
writer to sell, the underlying security or securities at the exercise price at
any time during the option period, or at a specific date. Conversely, a put
option gives the purchaser of the option the right to sell, and obligates the
writer to buy, the underlying security or securities at the exercise price at
any time during the option period, or at a specified date.

A covered call option written by a Portfolio is a call option with
respect to which the Portfolio owns the underlying security or otherwise covers
the transaction by segregating cash or other securities. A put option written by
a Portfolio is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option are
placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken. The principal reason for writing covered call and put
options is to realize, through the receipt of premiums, a greater return than
would be realized on the underlying securities alone. A Portfolio receives a
premium from writing covered call or put options which it retains whether or not
the option is exercised.

There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow, or other unforeseen events, at times have rendered
certain of the clearing facilities inadequate and resulted in the institution of
special procedures, such as trading rotations, restrictions on certain types of
orders or trading halts or suspensions in one or more options. There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur. In such event, it might
not be possible to effect closing transactions in particular options. If, as a
covered call option writer, a Portfolio is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
security until the option expires or it delivers the underlying security upon
exercise or it otherwise covers its position.

SPECIFIC OPTIONS TRANSACTIONS. All Portfolios, except the International
Fixed-Income Portfolio, may purchase and sell call and put options in respect of
specific securities (or groups or "baskets" of specific securities) or stock
indices listed on national securities exchanges or traded in the
over-the-counter market. An option on a stock index is similar to an option in
respect of specific securities, except that settlement does not occur by
delivery of the securities comprising the index. Instead, the option holder
receives an amount of cash if the closing level of the stock index upon which
the option is based is greater than, in the case of a call, or less than, in the
case of a put, the exercise price of the option. Thus, the effectiveness of
purchasing or writing stock index options will depend upon price movements in
the level of the index rather than the price of a particular stock.

Each Portfolio, except the Equity Portfolio, Bantam Value Portfolio
and Small Cap Portfolio, may purchase and sell call and put options on foreign
currency. These options convey the right to buy or sell the underlying currency
at a price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.

Each Portfolio may purchase cash-settled options on interest rate
swaps, interest rate swaps. The Emerging Markets Portfolio, Global Equity
Portfolio, International Equity Portfolio, International Fixed-Income Portfolio
and Strategic Yield Portfolio may purchase interest rate swaps denominated in
foreign currency. Each Portfolio, except the International Fixed-Income
Portfolio, may purchase equity index swaps in pursuit of its investment
objective. Interest rate swaps involve the exchange by a Portfolio with another
party of their respective commitments to pay or receive interest (for example,
an exchange of floating-rate payments for fixed-rate payments) denominated in
U.S. dollars or foreign currency. Equity index swaps involve the exchange by the
Portfolio with another party of cash flows based upon the performance of an
index or a portion of an index of securities which usually includes dividends. A
cash-settled option on a swap gives the purchaser the right, but not the
obligation, in return for the premium paid, to receive an amount of cash equal
to the value of the underlying swap as of the exercise date. These options
typically are purchased in privately negotiated transactions from financial
institutions, including securities brokerage firms.

Successful use by a Portfolio of options will be subject to the
Investment Manager's ability to predict correctly movements in the prices of
individual stocks, the stock market generally, foreign currencies or interest
rates. To the extent the Investment Manager's predictions are incorrect, the
Portfolio may incur losses.

FUTURE DEVELOPMENTS. The relevant Portfolios may take advantage of
opportunities in the area of options and futures contracts and options on
futures contracts and any other Derivatives which are not presently contemplated
for use by the Portfolio or which are not currently available but which may be
developed, to the extent such opportunities are both consistent with the
Portfolio's investment objective and legally permissible for the Portfolio.
Before entering into such transactions or making any such investment, the
Portfolio will provide appropriate disclosure in the Prospectus or Statement of
Additional Information.

FORWARD COMMITMENTS. Securities purchased on a forward commitment or
when-issued basis are subject to changes in value (generally changing in the
same way, i.e., appreciating when interest rates decline and depreciating when
interest rates rise) based upon the public's perception of the creditworthiness
of the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased on a forward commitment or when-issued basis may expose a
Portfolio to risks because they may experience such fluctuations prior to their
actual delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery takes
place actually may be higher than that obtained in the transaction itself.
Purchasing securities on a forward commitment or when-issued basis when the
Portfolio is fully or almost fully invested may result in greater potential
fluctuation in the value of the Portfolio's net assets and its net asset value
per share.

INVESTMENT CONSIDERATIONS AND RISKS

LOWER RATED SECURITIES. (International Fixed-Income Portfolio and
Strategic Yield Portfolio) Each of these Portfolios is permitted to invest in
securities rated Ba by Moody's Investors Service, Inc. ("Moody's") or BB by
Standard & Poor's Ratings Group ("S&P"), Fitch Investors Service, L.P. ("Fitch")
and Duff & Phelps Credit Rating Co. ("Duff" and together with the other rating
agencies, the "Rating Agencies"), and as low as the lowest rating assigned by
the Rating Agencies. Such securities, though higher yielding, are characterized
by risk. See "Description of the Portfolios-Investment Considerations and
Risks-Lower Rated Securities" in the Prospectus for a discussion of certain
risks and the "Appendix" for a general description of the Rating Agencies'
ratings. Although ratings may be useful in evaluating the safety of interest and
principal payments, they do not evaluate the market value risk of these
securities. The Portfolio will rely on the Investment Manager's judgment,
analysis and experience in evaluating the creditworthiness of an issuer.

Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities. These securities generally are considered by the Rating
Agencies to be, on balance, predominantly speculative with respect to capacity
to pay interest and repay principal in accordance with the terms of the
obligation and generally will involve more credit risk than securities in the
higher rating categories.

Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of such
issuers generally is greater than is the case with the higher rated securities.
For example, during an economic downturn or a sustained period of rising
interest rates, highly leveraged issuers of these securities may not have
sufficient revenues to meet their interest payment obligations. The issuer's
ability to service its debt obligations also may be affected adversely by
specific corporate developments, forecasts, or the unavailability of additional
financing. The risk of loss because of default by the issuer is significantly
greater for the holders of these securities because such securities generally
are unsecured and often are subordinated to other creditors of the issuer.

Because there is no established retail secondary market for many of
these securities, the Portfolio anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the extent a
secondary trading market for these securities does exist, it generally is not as
liquid as the secondary market for higher rated securities. The lack of a liquid
secondary market may have an adverse impact on market price and yield and the
Portfolio's ability to dispose of particular issues when necessary to meet the
Portfolio's liquidity needs or in response to a specific economic event such as
a deterioration in the creditworthiness of the issuer. The lack of a liquid
secondary market for certain securities also may make it more difficult for the
Portfolio to obtain accurate market quotations for purposes of valuing its
portfolio and calculating its net asset value. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of these securities. In such cases, judgment may play a
greater role in valuation because less reliable, objective data may be
available.

These securities may be particularly susceptible to economic
downturns. It is likely that an economic recession could disrupt severely the
market for such securities and may have an adverse impact on the value of such
securities. In addition, it is likely that any such economic downturn could
adversely affect the ability of the issuers of such securities to repay
principal and pay interest thereon and increase the incidence of default for
such securities.

The Portfolio may acquire these securities during an initial offering.
Such securities may involve special risks because they are new issues. The
Portfolio has no arrangement with any persons concerning the acquisition of such
securities, and the Investment Manager will review carefully the credit and
other characteristics pertinent to such new issues.

The credit risk factors pertaining to lower rated securities also
apply to lower rated zero coupon securities and pay-in-kind bonds, in which the
Strategic Yield Portfolio may invest. Pay-in-kind bonds pay interest through the
issuance of additional securities. Zero coupon securities and pay-in-kind bonds
carry an additional risk in that, unlike bonds which pay interest throughout the
period to maturity, the Portfolio will realize no cash until the cash payment
date unless a portion of such securities are sold and, if the issuer defaults,
the Portfolio may obtain no return at all on its investment.

INVESTMENT RESTRICTIONS

Each Portfolio has adopted investment restrictions numbered 1 through
8 as fundamental policies, which cannot be changed, as to a Portfolio, without
approval by the holders of a majority (as defined in the 1940 Act) of such
Portfolio's outstanding voting shares. However, the amendment of these
restrictions to add an additional Portfolio, which amendment does not
substantively affect the restrictions with respect to an existing Portfolio,
will not require approval as described in the preceding sentence. Investment
restrictions numbered 9 through 12 are not fundamental policies and may be
changed, as to a Portfolio, by vote of a majority of the Fund's Board of
Directors at any time. None of the Portfolios may:

1. Invest more than 25% of the value of its total assets in
the securities of issuers in any single industry, provided that there shall be
no limitation on the purchase of obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

2. Invest in commodities, except that a Portfolio may purchase
and sell options, forward contracts, futures contracts, including those relating
to indices, and options on futures contracts or indices.

3. Purchase, hold or deal in real estate, or oil, gas or other
mineral leases or exploration or development programs, but a Portfolio may
purchase and sell securities that are secured by real estate or issued by
companies that invest or deal in real estate or real estate investment trusts.

4. Borrow money, except to the extent permitted
under the 1940 Act (which currently limits borrowing to more
than 33-1/3% of the value of the Portfolio's total assets). For
purposes of this Investment Restriction, the entry into options, forward
contracts, futures contracts, including those relating to indices, and options
on futures contracts or indices shall not constitute borrowing.

5. Make loans to others, except through the purchase of debt
obligations and the entry into repurchase agreements. However, a Portfolio may
lend its portfolio securities in an amount not to exceed 33-1/3% of the value of
its total assets. Any loans of portfolio securities will be made according to
guidelines established by the Commission and the Fund's Board.

6. Act as an underwriter of securities of other issuers,
except to the extent a Portfolio may be deemed an underwriter under the
Securities Act of 1933, as amended, by virtue of disposing of portfolio
securities.

7. Issue any senior security (as such term is defined in
Section 18(f) of the 1940 Act), except to the extent the activities permitted in
Investment Restrictions Nos. 2, 4, 10 and 11 may be deemed to give rise to a
senior security.

8. Purchase securities on margin, but a Portfolio may make
margin deposits in connection with transactions on options, forward contracts,
futures contracts, including those relating to indices, and options on futures
contracts or indices.

9. Invest in the securities of a company for the purpose of
exercising management or control, but the Portfolio will vote the securities it
owns as a shareholder in accordance with its views.

10. Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related to the
purchase of securities on a when- issued or forward commitment basis and the
deposit of assets in escrow in connection with writing covered put and call
options and collateral and initial or variation margin arrangements with respect
to options, forward contracts, futures contracts, including those relating to
indices, and options on futures contracts or indices.

11. Purchase, sell or write puts, calls or combinations
thereof, except as described in the Prospectus and Statement of Additional
Information.

12. Enter into repurchase agreements providing for settlement
in more than seven days after notice or purchase securities which are illiquid,
if, in the aggregate, more than 15% of the value of its net assets would be so
invested.

* * *

If a percentage restriction is adhered to at the time of investment, a
later change in percentage resulting from a change in values or assets will not
constitute a violation of such restriction.

In addition, each Portfolio has adopted the following policies as
non-fundamental policies. Each Portfolio intends (i) to comply with the
diversification requirements prescribed in regulations under Section 817(h) of
the Code and (ii) to comply in all material respects with insurance laws and
regulations that the Fund has been advised are applicable to investments of
separate accounts of Participating Insurance Companies. As non-fundamental
policies, these policies may be changed by vote of a majority of the Fund's
Board of Directors at any time.

MANAGEMENT

The Directors and officers of the Fund and their principal occupations
during the past five years are set forth below. Unless otherwise specified, the
address of each of the following persons is 30 Rockefeller Plaza, New York, New
York 10020.

Name, Address and Age Position with Registrant Principal Occupation During
Past 5 Years

Norman Eig* (55) Chairman of the Managing Director (formerly
Board General Partner), Lazard
Freres.

Herbert W. Gullquist* (58) President, Managing Director (formerly
Director General Partner), Lazard
Freres.

[Others to be Provided]

- -----------
* An "interested person" of the Fund as defined in the 1940 Act.

The Fund has adopted a Distribution and Servicing Plan with respect to
shares of the Portfolios. So long as the Plan remains in effect, the Directors
who are not "interested persons" of the Fund, as defined in the 1940 Act, will
be selected and nominated by the Directors who are not "interested persons" of
the Fund.

The Fund typically pays its Directors an annual retainer and a per
meeting fee and reimburses them for their expenses. The estimated aggregate
amount of compensation to be paid to each Director by the Fund for the year
ending December 31, 1997, and by The Lazard Funds, Inc. for which such person
also is a Director for the year ended December 31, 1996, is as follows:

Total Compensation From
Aggregate Compensation The Fund and The
Name of Director from the Fund Lazard Funds, Inc.

[To Be Provided]

INVESTMENT MANAGER AND INVESTMENT MANAGEMENT AGREEMENT

Lazard Freres Asset Management, 30 Rockefeller Plaza, New York, New
York 10020, has entered into an investment management agreement (the "Management
Agreement") with the Fund on behalf of the Portfolios. Pursuant to the
Management Agreement, Lazard Freres Asset Management regularly provides each
Portfolio with investment research, advice and supervision and furnishes
continuously an investment program for each Portfolio consistent with its
investment objectives and policies, including the purchase, retention and
disposition of securities.

Lazard Freres Asset Management is a division of Lazard Freres, a New
York limited liability company, which is registered as an investment adviser
with the Commission and is a member of the New York, American and Midwest Stock
Exchanges. Lazard Freres provides its clients with a wide variety of investment
banking and related services, including investment management. It is a major
underwriter of corporate securities, conducts a broad range of trading and
brokerage activities in corporate and governmental bonds and stocks and acts as
a financial adviser to utilities. Lazard Freres Asset Management provides
investment management services to client discretionary accounts with assets as
of December 31, 1996 totaling approximately $38.1 billion. Its clients are both
individuals and institutions, some of whose accounts have investment policies
similar to those of several of the Portfolios.

Under the terms of the Management Agreement, the Investment Manager
will pay the compensation of all personnel of the Fund, except the fees of
Directors of the Fund who are not employees or affiliated persons of the
Investment Manager. The Investment Manager will make available to the Portfolios
such of the Investment Manager's members, directors, officers and employees as
are reasonably necessary for the operations of each Portfolio, or as may be duly
elected officers or directors of the Fund. Under the Management Agreement, the
Investment Manager also pays each Portfolio's office rent and provides
investment advisory research and statistical facilities and all clerical
services relating to research, statistical and investment work. The Investment
Manager, including its employees who serve the Portfolios, may render investment
advice, management and other services to others.

As compensation for its services, each of the Portfolios has agreed to
pay the Investment Manager an investment management fee, accrued daily and
payable monthly, at the annual rates set forth below as a percentage of the
average daily value of the net assets of the relevant Portfolio:

Bantam Value International Fixed-Income
Portfolio--.75% Portfolio--.75%
Emerging Markets International Small Cap
Portfolio--1.00% Portfolio--.75%
Equity Portfolio--.75% Small Cap Portfolio--.75%
Global Equity Portfolio--.75% Strategic Yield Portfolio--.75%
International Equity Portfolio--.75%

The Management Agreement provides that the relevant Portfolio pays all
of its expenses that are not specifically assumed by the Investment Manager.
Expenses attributable to each Portfolio will be charged against the assets of
that Portfolio. Other expenses of the Fund will be allocated among the
Portfolios in a manner which may, but need not, be proportionate in relation to
the net assets of each Portfolio. Expenses payable by each of the Portfolios
include, but are not limited to, clerical salaries, brokerage and other expenses
of executing portfolio transactions; legal, auditing or accounting expenses;
trade association dues; taxes or governmental fees; the fees an expenses of any
person providing administrative services to the Fund; the fees and expenses of
the custodian and transfer agent of the Fund; clerical expenses of issue,
redemption or repurchase of shares of the Portfolio; the expenses and fees for
registering and qualifying securities for sale; the fees of Directors of the
Fund who are not employees or affiliated persons of the Investment Manager or
its affiliates; travel expenses of all Directors, officers and employees;
insurance premiums; and the cost of preparing and distributing reports and
notices to shareholders.

As to each Portfolio, the Management Agreement is subject to annual
approval by (i) the Fund's Board or (ii) vote of a majority (as defined in the
1940 Act) of the outstanding voting securities of such Portfolio, provided that
in either event the continuance also is approved by a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of the Fund or the
Investment Manager, by vote cast in person at a meeting called for the purpose
of voting on such approval. The Management Agreement was approved by the sole
shareholder of each Portfolio on _______, 1997. The Management Agreement was
approved by the Fund's Board, including a majority of the Directors who are not
"interested persons" of any party to the Management Agreement, at a meeting held
on ______, 1997. As to each Portfolio, the Management Agreement is terminable
without penalty, on 60 days' notice, by the Fund's Board or by vote of the
holders of a majority of the shares of such Portfolio, or, upon not less than 90
days' notice, by the Investment Manager. The Management Agreement will terminate
automatically, as to the relevant Portfolio, in the event of its assignment (as
defined in the 1940 Act).

ADMINISTRATOR AND CUSTODIAN

The Fund has engaged State Street Bank and Trust Company ("State
Street"), 225 Franklin Street, Boston, Massachusetts 02110, to provide certain
administrative services to the Portfolios. Each Portfolio will bear the cost of
such administrative expenses at the annual rate of $[37,500 plus .02%] of the
average daily net assets of the Portfolio.

State Street also acts as the Fund's custodian. As the Fund's
custodian, State Street, among other things, maintains a custody account or
accounts in the name of each Portfolio; receives and delivers all assets for
each Portfolio upon purchase and upon sale or maturity; collects and receives
all income and other payments and distributions on account of the assets of each
Portfolio and disburses the Portfolio's assets in payment of its expenses. The
custodian does not determine the investment policies of any Portfolio or decide
which securities any Portfolio will buy or sell.

DISTRIBUTOR

Lazard Freres serves as the distributor of shares of each of the
Fund's Portfolios and conducts a continuous offering pursuant to a "best
efforts" arrangement. As the distributor, it accepts purchase and redemption
orders for shares of the Portfolios. In addition, the distribution agreement
obligates Lazard Freres to pay certain expenses in connection with the offering
of the shares of the Portfolios. After the prospectus and periodic reports have
been prepared, set in type and mailed to shareholders, Lazard Freres also will
pay for the printing and distribution of copies thereof used in connection with
the offering to prospective investors.

DETERMINATION OF NET ASSET VALUE

Net asset value per share for each Portfolio is determined by State
Street on each day the New York Stock Exchange is open for trading. The New York
Stock Exchange is ordinarily closed on the following national holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Net asset value per share is determined
by dividing the value of the total assets of the Portfolio, less all
liabilities, by the total number of Portfolio shares outstanding.

The value of securities, other than options listed on national
securities exchanges and debt securities maturing in 60 days or less, is
determined as of the close of regular trading on the New York Stock Exchange.
Options on stock and stock indices traded on national securities exchanges are
valued as of the close of options trading on such exchanges (which is currently
4:10 p.m., New York time). Debt securities maturing in 60 days or less are
valued at amortized cost, except where to do so would not reflect accurately
their fair value, in which case such securities would be valued at their fair
value as determined under the supervision of the Board of Directors. Each
security for which the primary market is on a national securities exchange is
valued at the last sale price on the principal exchange on which it is traded,
or, if no sales are reported on such exchange on that day, at the closing bid
price.

Any security held by a Portfolio for which the primary market is the
National Association of Securities Dealers Automated Quotations National Market
System is valued at the last sale price as quoted by such system or, in the
absence of any sale on the valuation date, at the closing bid price. Any other
unlisted security for which current over-the-counter market quotations or bids
are readily available is valued at its last quoted bid price or, if available,
the mean of two such prices.

All other securities and other assets for which current market
quotations are not readily available are valued at fair value as determined in
good faith by the Fund's Board of Directors and in accordance with procedures
adopted by the Board of Directors. The portfolio securities of any of the
Portfolios also may be valued on the basis of prices provided by a pricing
service when such prices are believed by the Investment Manager to reflect the
fair market value of such securities.

The Bantam Value Portfolio, International Small Cap Portfolio and
Small Cap Portfolio invest primarily in equity securities of companies with
relatively small market capitalizations. Because of the difference between the
bid and asked prices of over-the-counter securities, there may be an immediate
reduction in the net asset value of the shares of the Bantam Value Portfolio,
International Small Cap Portfolio or Small Cap Portfolio after such Portfolio
has completed a purchase of securities that will be valued by the relevant
Portfolio at their bid price, since those securities usually will have been
purchased at or near the asked price.

Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets ordinarily is completed well before the close of
business on each business day in New York (i.e., a day on which the New York
Stock Exchange is open). In addition, European or Far Eastern securities trading
generally or in a particular country or countries may not take place on all
business days in New York. Furthermore, trading takes place in Japanese markets
on certain Saturdays and in various foreign markets on days which are not
business days in New York and on which the net asset value of a Portfolio is not
calculated. Each Portfolio calculates net asset value per share, and therefore
effects sales, redemptions and repurchases of its shares, as of the close of
regular trading on the New York Stock Exchange once on each day on which the New
York Stock Exchange is open. Such calculation may not take place
contemporaneously with the determination of the prices of the majority of the
portfolio securities used in such calculation. If events materially affecting
the value of such securities occur between the time when their price is
determined and the time when the Portfolio's net asset value is calculated, such
securities will be valued at fair value as determined in good faith by the Board
of Directors.

PORTFOLIO TRANSACTIONS
GENERAL

Subject to the supervision of the Board of Directors, the Investment
Manager is primarily responsible for the investment decisions and the placing of
portfolio transactions for each Portfolio. In selecting brokers or dealers to
execute portfolio transactions on behalf of a Portfolio, the Investment Manager
seeks the best overall terms available, taking into account such factors as
price, size of order, difficulty of execution and skill required of the
executing broker. While the Investment Manager will generally seek reasonably
competitive spreads or commissions, the Portfolios will not necessarily be
paying the lowest spread or commission available.

Purchases and sales of portfolio securities on a securities exchange
are effected by the Investment Manager through brokers who charge a negotiated
commission for their services based on the quality and quantity of execution
services provided by the broker in the light of generally prevailing rates.
Orders may be directed to any broker including, to the extent and in the manner
permitted by applicable law, Lazard Freres. In the over-the-counter market,
securities are generally traded on a "net" basis with dealers acting as
principal for their own accounts without a stated commission, although the price
of the security usually includes a profit to the dealer. In underwritten
offerings, securities are purchased at a fixed price that includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount.

To the extent consistent with applicable provisions of the 1940 Act
and the rules adopted by the Commission thereunder, the Fund's Board has
determined that securities transactions for a Portfolio may be executed through
Lazard Freres if, in the judgment of the Investment Manager, the use of Lazard
Freres is likely to result in price and execution at least as favorable as those
of other qualified brokers or dealers, and if, in the transaction, Lazard Freres
charges the Portfolio a rate consistent with that charged to comparable
unaffiliated customers in similar transactions.

Purchase and sale orders for securities held by a Portfolio may be
combined with those for other Portfolios in the interest of the most favorable
net results for all. When the Investment Manager determines that a particular
security should be bought for or sold by more than one Portfolio, the Investment
Manager undertakes to allocate those transactions between the participants
equitably.

RESEARCH AND STATISTICAL INFORMATION

When it can be done consistently with the policy of obtaining the best
overall terms available, the Investment Manager may select brokers or dealers
who supply market quotations to the Fund's custodian for valuation purposes, or
who supply research, market and statistical information to the Investment
Manager. Although such research, market and statistical information may be
useful to the Investment Manager, it is only supplementary to the Investment
Manager's own research efforts, since the information must still be analyzed,
weighed and reviewed by the Investment Manager's staff. Information so received
will be in addition to, and not in lieu of, the services required to be
performed by the Investment Manager under the Management Agreement with the Fund
on behalf of the Portfolios. Such information may be useful to the Investment
Manager in providing services to both the Portfolios and clients other than the
Portfolios, and, conversely, supplemental information obtained by the placement
of business of other clients may be useful to the Investment Manager in carrying
out its obligations to the Portfolios. In addition, when it can be done
consistently with the above stated policy, the Investment Manager may place
orders with brokers and dealers (i) who refer persons to the Investment Manager
for the purpose of purchasing shares of the Portfolios or (ii) who provide
services to the Fund at no fee or for a reduced fee.

REDEMPTION OF SHARES

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED "REDEMPTION OF SHARES."

REDEMPTION COMMITMENT. The Fund has committed to pay in cash all
redemption requests by any shareholder of record, limited in amount during any
90-day period to the lesser of $250,000 or 1% of the value of a Portfolio's net
assets at the beginning of such period. Such commitment is irrevocable without
the prior approval of the Commission. In the case of requests for redemption in
excess of such amount, the Fund's Board reserves the rights to make payments in
whole or part in securities (which may include non-marketable securities) or
other assets of the Portfolio in case of an emergency or any time a cash
distribution would impair the liquidity of the Portfolio to the detriment of the
existing shareholders. In such event, the securities would be valued in the same
manner as the Portfolio's investments are valued. If the recipient sold such
securities, brokerage charges might be incurred.

SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b) when
trading in the markets the Portfolio ordinarily utilizes is restricted, or when
an emergency exists as determined by the Commission so that disposal of the
Portfolio's investments or determination of its net asset value is not
reasonably practicable, or (c) for such other periods as the Commission by order
may permit to protect the Portfolio's shareholders.

DISTRIBUTION AND SERVICING PLAN

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED "DISTRIBUTION AND
SERVICING PLAN."

Rule 12b-1 (the "Rule") adopted by the Commission under the 1940 Act
provides, among other things, that an investment company may bear expenses of
distributing its shares only pursuant to a plan adopted in accordance with the
Rule. The Fund's Board has adopted such a plan (the "Distribution and Servicing
Plan"), pursuant to which the Fund pays Lazard Freres for advertising, marketing
and distributing shares of the Portfolios and for the provision of certain
services to the holders of shares of the Portfolios. Lazard Freres may make
payments to Participating Insurance Companies for providing these services to
Policy owners and to certain financial institutions, securities dealers and
other industry professionals (collectively, "Service Agents") for providing
these services to Eligible Plan participants. The Fund's Board determined, in
the exercise of its business judgment, that the Fund's Distribution and
Servicing Plan is reasonably likely to benefit the Fund, Policy owners and
Eligible Plan participants.

A quarterly report of the amounts expended under the Distribution
Servicing Plan, and the purposes for which such expenditures were incurred, must
be made to the Board for its review. In addition, the Distribution and Servicing
Plan provides that it may not be amended to increase materially the costs which
holders of shares of a Portfolio may bear for distribution pursuant to the
Distribution and Servicing Plan without such shareholders' approval and that
other material amendments of the Distribution and Servicing Plan must be
approved by the Board and by the Board members who are not "interested persons"
(as defined in the 1940 Act) of the Fund and have no direct or indirect
financial interest in the operation of the Distribution and Servicing Plan or in
any agreements entered into in connection with the Distribution and Servicing
Plan, by vote cast in person at a meeting called for the purpose of considering
such amendments. The Distribution and Servicing Plan is subject to annual
approval by such vote cast in person at a meeting called for the purpose of
voting on the Distribution and Servicing Plan. The Distribution and Servicing
Plan was so approved on ___________, 1997. As to a Portfolio, the Distribution
and Servicing Plan may be terminated at any time by vote of a majority of the
Board members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Distribution and Servicing Plan or in
any agreements entered into in connection with the Distribution and Servicing
Plan or by vote of the holders of a majority of the shares of the relevant
Portfolio.

DIVIDENDS AND DISTRIBUTIONS

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED "DIVIDENDS AND
DISTRIBUTIONS."

The Fund intends to declare as a dividend on the outstanding shares of
each of the International Fixed-Income Portfolio and the Strategic Yield
Portfolio substantially all of the Portfolio's net investment income at the
close of each business day to shareholders of record at 4:00 p.m. (New York
time). Net investment income for a Saturday, Sunday or holiday will be included
in the dividend declared on the previous business day. Dividends declared on the
shares of the International Fixed-Income Portfolio and Strategic Yield Portfolio
will be paid five business days prior to the end of each month. Shareholders who
redeem all their shares of any of these Portfolios prior to a dividend payment
date will receive, in addition to the redemption proceeds, any dividends that
are declared but unpaid. Shareholders of any of these Portfolios who redeem only
a portion of their shares will be entitled to all dividends that are declared by
unpaid on the redeemed shares on the next dividend payment date.

Dividends from net investment income on the Equity Portfolio,
International Equity Portfolio, Small Cap Portfolio, International Small Cap
Portfolio, Emerging Markets Portfolio, Global Equity Portfolio and Bantam Value
Portfolio generally will be declared and paid at least annually and may be
declared and paid twice annually.

Dividends will be calculated at the same time and in the same manner
and will be of the same amount for each Portfolio.

Investment income for a Portfolio includes, among other things,
interest income, accretion of market and original issue discount and
amortization of premium and, in the case of the Equity Portfolio, International
Equity Portfolio, Small Cap Portfolio, International Small Cap Portfolio,
Emerging Markets Portfolio, Global Equity Portfolio and Bantam Value Portfolio,
also would include dividends.

With respect to all of the Portfolios, net realized capital gains, if
any, will be distributed at least annually and may be declared and paid twice
annually. Dividends and distributions on shares of a Portfolio will be invested
in additional shares of the same Portfolio at net asset value and credited to
the shareholder's account on the payment date or, at the shareholder's election,
paid in cash.

TAXATION

THE FOLLOWING INFORMATION SUPPLEMENTS AND SHOULD BE READ IN
CONJUNCTION WITH THE SECTION IN THE PROSPECTUS ENTITLED "TAXATION."

Each Portfolio intends to qualify as a regulated investment company
under the Code and to continue to so qualify as long as such qualification is in
the best interests of its shareholders. As a regulated investment company, a
Portfolio will pay no Federal income tax on net investment income and net
realized securities gains to the extent that such income and gains are
distributed to shareholders in accordance with applicable provisions of the
Code. To qualify as a regulated investment company, the Portfolio must
distribute at least 90% of its net income (consisting of net investment income
and net short-term capital gain) to its shareholders, derive less than 30% of
its annual gross income from gains on the sale of securities held for less than
three months, and meet certain asset diversification and other requirements. The
term "regulated investment company" does not imply the supervision of management
of investment practices or policies by any government agency.

Any dividend or distribution paid shortly after an investor's purchase
may have the effect of reducing the net asset value of the shares below the cost
of the investment. Such a dividend or distribution would be a return of
investment in an economic sense, although taxable as stated in the Prospectus.
In addition, the Code provides that if a shareholder holds shares of a Portfolio
for six months or less and has received a capital gain distribution with respect
to such shares, any loss incurred on the sale of such shares will be treated as
long-term capital loss to the extent of the capital gain distribution received.

Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains and losses. However, all or a portion of the gain or
loss realized from the disposition of foreign currency, non-U.S. dollar
denominated debt instruments, and certain financial futures and options, may be
treated as ordinary income or loss under Section 988 of the Code. In addition,
all or a portion of the gain realized from the disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of the
Code. Finally, all or a portion of the gain realized from engaging in
"conversion transactions" may be treated as ordinary income under Section 1258
of the Code. "Conversion transactions" are defined to include certain forward,
futures, option and straddle transactions, transactions marketed or sold to
produce capital gains, or transactions described in Treasury regulations to be
issued in the future.

Under Section 1256 of the Code, gain or loss realized by a Portfolio
from certain financial futures and options transactions (other than those taxed
under Section 988 of the Code) will be treated as 60% long-term capital gain or
loss and 40% short-term capital gain or loss. Gain or loss will arise upon the
exercise or lapse of such futures and options as well as from closing
transactions. In addition, any such futures or options remaining unexercised at
the end of the Portfolio's taxable year will be treated as sold for their then
fair market value, resulting in additional gain or loss to the Portfolio
characterized in the manner described above.

Offsetting positions held by a Portfolio involving financial futures
and options may constitute "straddles." Straddles are defined to include
"offsetting positions" in actively traded personal property. The tax treatment
of straddles in governed by Sections 1092 and 1258 of the Code, which, in
certain circumstances, overrides or modifies the provisions of Sections 988 and
1256 of the Code. As such, all or a portion of any short- or long-term capital
gain from certain "straddle" transactions may be recharacterized as ordinary
income.

If a Portfolio were treated as entering into straddles by reason of
its future or options transactions, such straddles could be characterized as
"mixed straddles" if the futures or options transactions comprising such
straddles were governed by Section 1256 of the Code. The Portfolio may make one
or more elections with respect to "mixed straddles." Depending upon which
election is made, if any, the results to the Portfolio may differ. If no
election is made, to the extent the straddle rules apply to positions
established by the Portfolio, losses realized by the Portfolio will be deferred
to the extent of unrealized gain in any offsetting positions. Moreover, as a
result of the straddle and conversion transaction rules, short-term capital loss
on straddle positions may be recharacterized as long-term capital loss, and
long-term capital gain may be recharacterized as short-term capital gain or
ordinary income.

If a Portfolio invests in an entity that is classified as a "passive
foreign investment company" ("PFIC") for Federal income tax purposes, the
operation of certain provisions of the Code applying to PFICs could result in
the imposition of certain Federal income taxes on the Portfolio. In addition,
gain realized from the sale or other disposition of PFIC securities may be
treated as ordinary income under Section 1291 of the Code.

Investment by a Portfolio in securities issued at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount, timing
and character of distributions to shareholders by causing a Portfolio to
recognize income prior to the receipt of cash payments. For example, the
Portfolio could be required to recognize annually a portion of the discount (or
deemed discount) at which such securities were issued and to distribute an
amount equal to such income in order to maintain its qualification as a
regulated investment company. In such case, the Portfolio may have to dispose of
securities which it might otherwise have continued to hold in order to generate
cash to satisfy these distribution requirements.

Shareholders of the Fund will be variable annuity and variable life
insurance separate accounts established by insurance companies to fund Policies
and Eligible Plans. The Secretary of the Treasury may in the future issue
additional regulations or revenue rulings that will prescribe the circumstances
in which a Policy owner's control of the investments of a separate account may
cause the Policy owner, rather than the insurance company, to be treated as the
owner

of assets of the separate account. Failure to comply with Section
817(h) of the Code or any regulation thereunder, or with any regulations or
revenue rulings on Policy owner control, if promulgated, would cause earnings
regarding a Policy owner's interest in the separate account to be includable in
the Policy owner's gross income in the year earned.

The Fund will not report dividends paid to Eligible Plans to the
Internal Revenue Service ("IRS"). Generally, distributions from Eligible Plans,
except those representing returns of non-deductible contributions thereto, will
be taxable as ordinary income and, if made prior to the time the participant
reaches age 59-1/2, generally will be subject to an additional tax equal to 10%
of the taxable portion of the distribution. If the distribution from an Eligible
Plan (other than certain governmental or church plans) for any taxable year
following the year in which the participant reaches age 70-1/2 is less than the
"minimum required distribution" for that taxable year, an excise tax equal to
50% of the deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a Plan will be responsible for reporting distributions from
the Plan to the IRS. Participants in Eligible Plans will receive a disclosure
statement describing the consequences of a distribution from the Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to an Eligible Plan in excess of
the amounts permitted by law may be subject to an excise tax. For more
information concerning the Federal income tax consequences, Policy owners should
refer to the prospectus for their contracts or policies and Eligible Plan
participants should consult the Plan's administrator or trustee.

PERFORMANCE INFORMATION

Yield is computed in accordance with a standardized method which
involves determining the net change in the value of a hypothetical pre-existing
Portfolio account having a balance of one share at the beginning of a seven
calendar day period for which yield is to be quoted, dividing the net change by
the value of the account at the beginning of the period to obtain the base
period return, and annualizing the results (i.e., multiplying the base period
return by 365/7). The net change in the value of the account reflects the value
of additional shares and fees that may be charged to shareholder accounts, in
proportion to the length of the base period and the Portfolio's average account
size, but does not include realized gains and losses or unrealized appreciation
and depreciation. Effective annualized yield is computed by adding 1 to the base
period return (calculated as described above), raising that sum to a power equal
to 365 divided by 7, and subtracting 1 from the result.

Current yield is computed pursuant to a formula which operates as
follows: The amount of the relevant Portfolio's expenses accrued for the 30-day
period (net of reimbursements) is subtracted from the amount of the dividends
and interest earned (computed in accordance with the regulatory requirements) by
such Portfolio during the period. That result is then divided by the product of:
(a) the average daily number of such Portfolio's shares outstanding during the
period that were entitled to receive dividends, and (b) the net asset value per
share on the last day of the period less any undistributed earned income per
share reasonably expected to be declared as a dividend shortly thereafter. The
quotient is then added to 1, and that sum is raised to the 6th power, after
which 1 is subtracted. The current yield is then arrived at by multiplying the
result by 2.

Average annual total return is calculated by determining the ending
redeemable value of an investment purchased with a hypothetical $1,000 payment
made at the beginning of the period (assuming the reinvestment of dividends and
distributions), dividing by the amount of the initial investment, taking the
"n"th root of the quotient (where "n" is the number of years in the period) and
subtracting 1 from the result.

Total return is calculated by subtracting the amount of the relevant
Portfolio's net asset value per share at the beginning of a stated period from
the net asset value per share at the end of the period (after giving effect to
the reinvestment of dividends and distributions during the period), and dividing
the result by the net asset value per share at the beginning of the period.

From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic or financial conditions, developments
and/or events, and also may refer to Morningstar ratings and related analyses
supporting the rating. From time to time, advertising materials for the Fund may
refer to, or include, commentary by the Fund's portfolio managers relating to
their investment strategy, asset growth of the Portfolios, current or past
business, political, economic or financial conditions and other matters of
general interest to shareholders.

ORGANIZATION AND DESCRIPTION OF CAPITAL STOCK

The Fund was incorporated in Maryland on February 13, 1997 as a series
investment company. The authorized capital stock of the Fund consists of five
hundred million shares of common stock, $.001 par value. To date, the Fund's
Board of Directors has authorized the issuance of nine Portfolios. This
Statement of Additional Information supplements the current Prospectus of the
Fund with respect to the Portfolios. The Board of Directors may, in the future,
designate and authorize additional portfolios or the issuance of additional
classes of capital stock.

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise to the holders of the outstanding voting securities of any investment
company, such as the Fund, will not be deemed to have been effectively acted
upon unless approved by the holders of a majority of the outstanding share of
each series affected by such matter. Rule 18f-2 further provides that a series
shall be deemed to be affected by a matter unless it is clear that the interests
of each series in the matter are identical or that the matter does not affect
any interest of such series. However, the Rule exempts the selection of
independent accountants and the election of Board members from the separate
voting requirements of the Rule.

Generally, all shares of the Fund have equal voting rights and will be
voted in the aggregate. As used in the Prospectus and in this Statement of
Additional Information, the vote of a majority of a Portfolio's outstanding
voting securities means the vote of the lesser of (i) 67% of the shares of the
Portfolio represented at a meeting if the holders of more than 50% of the
outstanding shares of the Portfolio are present in person or by proxy, or (ii)
more than 50% of the outstanding shares of the Portfolio.

Shareholders are entitled to one vote for each full share held, and
fractional votes for fractional shares held. All shares, when issued and paid
for in accordance with the terms of the offering, will be fully paid and
non-assessable by the Fund. Shares of a Portfolio are of one class and have
equal rights as to dividends and in liquidation. Shares of a Portfolio have no
preemptive, subscription or conversion rights and are freely transferable.

COUNSEL AND INDEPENDENT AUDITORS

Legal matters in connection with the issuance of the shares of the
Fund offered hereby will be passed upon by Stroock & Stroock & Lavan LLP, 180
Maiden Lane, New York, New York 10038-4982.

_________________________, has been selected as the independent
auditors for the Fund.

<PAGE>

APPENDIX

Description of certain ratings.

S&P

BOND RATINGS

AAA

Bonds rated AAA have the highest rating assigned to a debt obligation.
Capacity to pay interest and repay principal is extremely strong.

Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.

Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.

BBB

Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.

Bonds rated BB have less near-term vulnerability to default than other
speculative grade bonds. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payment.

Bonds rated B have a greater vulnerability to default but presently
have the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.

CCC

Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions to meet timely payments of
interest and repayment of principal. In the event of adverse business, financial
or economic conditions, they are not likely to have the capacity to pay interest
and repay principal.

The rating CC is typically applied to bonds subordinated to senior
debt which is assigned an actual or implied CCC rating.

The rating C is typically applied to bonds subordinated to senior debt
which is assigned an actual or implied CCC-rating.

Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.

S&P's letter ratings may be modified by the additional of a plus or a
minus sign, which is used to show relative standing within the major ratings
categories, except in the AAA (Prime Grade) category.

COMMERCIAL PAPER RATINGS

An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.

A-1

This designation indicates the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics are denoted within a plus sign (+)
designation.

A-2

Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1.

Moody's

BOND RATINGS

Aaa

Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities of fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.

Baa

Bond which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa

Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.

Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a rating for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.

COMMERCIAL PAPER RATINGS

The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be evidenced
by leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate reliance
on debt and ample asset protection, broad margins in earnings coverage of fixed
financial charges and high internal cash generation, and well established access
to a range of financial markets and assured sources of alternate liquidity.

Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.

Fitch

BOND RATINGS

The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The ratings take
into consideration special features of the issue, its relationship to other
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's future financial strength
and credit quality.

AAA

Bonds which are rated AAA are considered to be investment grade and of
the highest credit quality. The obligor has an exceptionally strong ability to
pay interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.

Bonds which are rated AA are considered to be investment grade and of
very high credit quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as bonds rated AAA.
Because bonds rated in the AAA and AA categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these issuers
is generally rated F-1+.

Bonds which are rated A are considered to be investment grade and of
high credit quality. The obligor's ability to pay interest and repay principal
is considered to be strong, but may be more vulnerable to adverse changes in
economic conditions and circumstances than bonds with higher ratings.

BBB

Bond which are rated BBB are considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have an adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

Bonds which are rated BB are considered speculative. The obligor's
ability to pay interest and repay principal may be affected over time by adverse
economic changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service requirements.

Bonds which are rated B are considered highly speculative. While bonds
in this class are currently meeting debt service requirements, the probability
of continued timely payment of principal and interest reflects the obligor's
limited margin of safety and the need for reasonable business and economic
activity throughout the life of the issue.

CCC

Bonds which are rated CCC have certain identifiable characteristics,
which, if not remedied, may lead to default. The ability to meet obligations
requires an advantageous business and economic environment.

Plus (+) and minus (S) signs are used with a rating symbol to indicate
the relative position of a credit within the rating category.

SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.

Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+

EXCEPTIONALLY STRONG CREDIT QUALITY. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F-1

VERY STRONG CREDIT QUALITY. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.

Duff

BOND RATINGS

AAA

Bonds rated AAA are considered highest credit quality. The risk
factors are negligible, being only slightly more than for risk-free U.S.
Treasury debt.

Bonds rated AA are considered high credit quality. Protection factors
are strong. Risk is modest but may vary slightly from time to time because of
economic conditions.

Bonds rated A have protection factors which are average but adequate.
However, risk factors are more variable and greater in periods of economic
stress.

BBB

Bonds rated BBB are considered to have below average protection
factors but still considered sufficient for prudent investment. Considerable
variability in risk exists during economic cycles.

Bonds rated BB are below investment grade but are deemed by Duff as
likely to meet obligations when due. Present or prospective financial protection
factors fluctuate according to industry conditions or company fortunes. Overall
quality may move up or down frequently within the category.

Bonds rated B are below investment grade and possess the risk that
obligations will not be met when due. Financial protection factors will
fluctuate widely according to economic cycles, industry conditions and/or
company fortunes. Potential exists for frequent changes in quality rating within
this category or into a higher or lower quality rating grade.

CCC

Bonds rated CCC are well below investment grade securities. Such bonds
may be in default or have considerable uncertainty as to timely payment of
interest, preferred dividends and/or principal. Protection factors are narrow
and risk can be substantial with unfavorable economic or industry conditions
and/or with unfavorable company developments.

Plus (+) and minus (S) signs are used with a rating symbol (except
AAA) to indicate the relative position of a credit within the rating category.

COMMERCIAL PAPER RATING

The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarding as having very high certainty of timely
payment with excellent liquidity factors which are supported by ample asset
protection. Risk factors are minor.
<PAGE>

LAZARD RETIREMENT SERIES, INC.

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements included in the Statement of
Additional Information:

N/A

(b) Exhibits:

(1) Articles of Incorporation*

(2) By-Laws*

(5) Investment Management Agreement*

(6) Distribution Agreement*

(8) Custody Agreement*

(10) Opinion, including consent, of Stroock & Stroock &
Lavan*

(11) Consent of Independent Auditors*

(15) Distribution and Servicing Plan*

- ------------------------------
* To be filed by Amendment.

Item 25. Persons Controlled by or Under Common Control with Registrant

Not applicable.

Item 26. Number of Holders of Securities

(1) (2)
Number of Record
Title of Class Holders

Common Stock Interests
par value $.001 per share

Lazard Retirement Bantam
Value Portfolio

Lazard Retirement Emerging
Markets Portfolio

Lazard Retirement Equity
Portfolio

Lazard Retirement Global
Equity Portfolio

Lazard Retirement Inter-
national Equity Portfolio

Lazard Retirement Inter-
national Fixed-Income
Portfolio

Lazard Retirement Inter-
national Small Cap
Portfolio

Lazard Retirement Small
Cap Portfolio

Lazard Retirement Strategic
Yield Portfolio

Item 27. Indemnification

Reference is made to Article SEVENTH of the Registrant's Articles of
Incorporation filed as Exhibit 1 hereto and to Section 2-418 of the Maryland
General Corporation Law. The application of these provisions is limited by
Article VIII of the Registrant's By-Laws filed as Exhibit 2 hereto and by the
following undertaking set forth in the rules promulgated by the Securities and
Exchange Commission:

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in such Act and is, therefore,
unenforceable. In the event that a claim for indemnificaetion against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in such Act and will be
governed by the final adjudication of such issue.

Reference also is made to the Distribution Agreement filed as Exhibit
6 hereto.

Item 28. Business and Other Connections of Investment Advisers.

The description of the Investment Manager under the Caption
"Management" in the Prospectus and in the Statement of Additional
Information consituting Parts A and B, respectively, of this
Registration Statement is incorporated by reference hrein.
Following is a list of the General Members of Lazard Freres & Co. LLC,
together with thier other business connections which are of
substantial nature during the previous two years:

Name and Address of Company with
Name of General Member which General Member is Connected Capacity

William Araskog None

F. Harlan Batrus Mutual of America Capital Management Corp. Director
666 Fifth Avenue
New York, New York 10103

Ryan Labs, Inc. Director
350 Albany Street
New York, New York 10280

David G. Braunschvig None

Patrick J. Callahan, Jr. Berry Metal Co. Director
Route 68
Harmony, Pennsylvania 16307

BT Capital Corp. Director
280 Park Avenue
New York, New York 10017

Lee Brass Co. (Prior to 3/1/95) Director
P.O. Box 1229
Anniston, Alabama 36202

Michigan Wheel Corp. Director
1501 Buchanan Avenue
Southwest Grand Rapids, Michigan 49507

Rotation Dynamics Corp. Director
15 Salt Creek Lane
Suite 316
Hinsdale, Illinois 60521

Somerset Technologies, Inc. Director
P.O. Box 791
New Brunswick, New Jersey 08903

GAR Holding Co. (Prior to 4/1/96) Director
600 Union Street
Ashland, Ohio 44805

Michel David-Weill BSN Gervais Danone (Proior to 8/1/96) Director
1260130 Rue Jules Gruesde
Levallois-Perret (Hauts de Seine)
France 92303

Credit Mobilier Industriel Chairman of
(Prior to 8/1/96) the Board
(SOVAC)
19-21 Rue de la Bienfaisance
75008 Paris, France

The Dannon Company, Inc. Director
22-11 38th Avenue
Long Island City, New York 11101

Eurafrance President and
12 Avenue Percier Chairman of
75008 Paris, France the Board

Exor Group Director
19 Avenue Montaigne
75008 Paris, France

Euralux Director
8 Rue Ste-Zithe
2763 Luxembourg

Fiat S.P.A. (Prior to 8/1/96) Director
Corso Marconi 10
10125 Torino
Italy

Group Danone Director
7 Rue de Teheran
75008 Paris, France

ITT Industries, Inc. Director
320 Park Avenue
New York, New York 10022

La France S.A. Director
7 & 9 Boulevard Haussmann
75009 Paris, France

La France-Iard Director
7 & 9 Boulevard Haussmann
75009 Paris, France

La France-Vie Director
7 & 9 Boulevard Haussmann
75009 Paris, France

Lazard Brothers & Co., Limited Director
21 Moorfields
London EC2P-2HT
England

Pearson plc Director
Millbank Tower
London SWI P4QZ

Publicis S.A. Director
133 Champs-Ezlysees
75008 Paris, France

S.A. de la Rue Imperiale de Lyon Director
49, Rue de la Republique
Lyon (Rhone) 69002
France

John V. Doyle None

Charles R. Dreifus None

Thomas F. Dunn Goldman, Sach & Co. Senior
(Prior to 1/1/95) Portfolio
85 Broadway Street Manager
New York, New York 10004

Norman Eig The Lazard Funds, Inc. Director,
30 Rockefeller Plaza Chairman
New York, New York 10020

The Emerging World Trust Fund Limited Director
30 Rockefeller Plaza
New York, New York 10020

Lazard Pension Management, Inc. Director
30 Rockefeller Plaza
New York, New York 10020

Peter R. Ezersky None

Jonathan F. Foster None

Albert H. Garner None

James S. Gold Smart & Final Inc. Director
4700 South Boyle Avenue
Los Angeles, California 90058

Jeffrey A. Golman None

Steven J. Golub Mineral Technologies Inc. Director
405 Lexington Avenue
New York, New York 10174-1901

Herbert W. Gullquist The Lazard Funds, Inc. Director,
30 Rockefeller Plaza President
New York, New York 10020

The Emerging World Trust Fund Limited Director
30 Rockefeller Plaza
New York, New York 10020

Lazard Freres Asset Director,
Management (Canada), Inc. President
30 Rockefeller Plaza
New York, New York 10020

Lazard Pension Management, Inc. Director,
30 Rockefeller Plaza President
New York, New York 10020

Thomas R. Haack None

J. Ira Harris Manpower Inc. Director
5301 North Ironwood Road
Milwaukee, Wisconsin 53201

Caremark International, Inc. Director
(Prior to 9/20/96)
2215 Sanders Road
Northbrook, Illinois 60062

Brinker International Inc. Director
6820 LBJ Freeway
Dallas, Texas 75240

Melvin L. Heineman Lazard Freres & Co., Ltd Director
21 Moorsfields
London EC2P 2HT
England

Lazard Pension Management, Inc. Director
30 Rockefeller Plaza
New York, New York 10020

Kenneth M. Jacobs None

Jonathan H. Kagan Continental Cablevision, Inc. Director
Pilot House
54 Lewis Wharf
Boston, Massachusetts 02110

Firearms Training Systems, Inc. Director
7340 McGinnis Ferry Road
Suwanee, Georgia 301274

La Salle Re Ltd. Director
Cumberland House
One Victoria Street
P.O. HM 1502
Hamilton Hm FX
Bermuda

Patient Education Media, Inc. Director
1271 Avenue of the Americas
New York, New York 10020

Phar-Mor Inc. (Prior to 1/1/96 Director
20 Federal Plaza West
Youngstown, OH 44501

Tyco Toys, Inc. Director
6000 Midlantic Drive
Mount Laurel, New Jersey 08054

James L. Kempner Lazard Freres & Co. Capital Markets
30 Rockefeller Plaza
New York, NY 10020

Sandra A. Lamb None

Edgar D. Legaspi None

Michael S. Liss Bear Stearns & Co. Senior
(Prior to 10/1/95) Portfolio
245 Park Avenue Manager
New York, New York 10004

William R. Loomios, Jr. Englehard Hanovia Inc. Director
280 Park Avenue
3rd Floor - West Wing
New York, New York 10017

Minorco S.A. Director
Boite Postal 185
L-2011 Luxembourg

Minorco (U.S.A.) Inc. Director
30 Rockefeller Plaza
Suite 4212
New York, NY 10112

Terra Industries, Inc. Director
600 4th Street
Sioux City, Iowa 51101

J. Robert Lovejoy Lazard Freres & Co. Capital Markets
30 Rockefeller Plaza
New York, NY 10020

Matthew, J. Lustig None

Philippe L. Magistretti None

Damon Mezzacappa Corporate Property Investors Director
30 Rockefeller Plaza
New York, New York 10020

Christina A. Mohr Loehmann's Holdings Inc. Director
2500 Halsey Street
Bronx, New York 10461

United Retail Group, Inc. Director
365 West Passaic Street
Rochelle Park, New Jersey 07662

Robert P. Morgenthau Lazard Freres Asset Management Director,
(Canada), Inc. Vice
30 Rockefeller Plaza President
New York, New York 10020

Steven J. Niemczyk None

Hamish W. M. NortoN None

Jonathan O'Herron Trigen Energy Corporation Director
1 Water Street
White Plains, New York 10601

James A. Paduano Donovan Data Systems, Inc. Director
666 Fifth Avenue
New York, New York 10019

Pilgrim Electronics, Inc.
(Prior to 4/1/95) Director
60 Beaver Brook Road
Danbury, Connecticut 06810

Secure Products Inc. Director
47 Maple Street
Summit, NJ 07901

Louis Perlmutter None

Robert E. Poll, Jr. None

Lester Pollack Continental Cablevision, Inc. Director
Pilot House
54 Louis Wharf
Boston Massachusetts 02210

CNA Financial Corp. (Prior to 3/1/95) Director
CNA Plaza
Chicago, Illinois 60685

Firearms Training Systems, Inc. Director
7340 McGinnis Ferry Road
Suwaanee, Georgia 30174

Kaufman & Broad Home Corp. Director
11601 Wilshire Boulevard
Los Angeles, California 90025-1748

La Salle Re Ltd. Director
Cumberland House
One Victoria Street
P.O. HM FX
Bermuda

Loews Corporation (Prior to 1/1/96) Director
666 Fifth Avenue
New York, New York 10103

Paramount Communications, Inc. Director
(Prior to 3/1/95)
15 Columbus Circle
New York, New York 10023

Parlex Corp. Director
145 Milk Street
Metuen, Massachusetts 01844

Polaroid Corp. Director
549 Technology Square
Cambridge, Massachusetts 02139

SD Holding (Bermuda) Ltd. Director
Hurst Holme
Trott Road
Hamilton HMII
Bermuda

Sphere Drake Acquisitions (U.K.) Ltd. Director
52-24 Leadenhall Street
London EC3A 2BJ
England

Sphere Drake Holding Ltd. Director
52-24 Leadenhall Street
London EC3A 2BJ
England

Sphere Drake Ltd. Director
52-24 Leadenhall Street
London EC3A 2BJ
England

Sun America Inc. Director
11601 Wilshire Boulevard
Los Angeles, CA 90025

Tidewater Inc. Director
1440 Canal Street
Suite 2100
New Orleans, Louisianna 70112

Michael J. Price None

Steven L. Rattner Falcon Holding Group L.P. Director
10900 Wilshire Boulevard
Los Angeles, California 90024

John R. Reese Owosso Corp. Director
312 West Main Street
Owosso, Michigan 48867

Owosso Gan, Inc. Director
312 West Main Street
Owosso, Michigan 48867

John R. Reinsberg None

Louis G. Rice None

Luis E. Rinaldini Cedar Fair Management Co. Director
(Prior to 3/1/95)
CN 5006 Causeway Drive
Sandusky, Ohio 44870

Bruno M. Roger CAP Gemini Sogeti Director
6, Bid Jean Pain a Grenoble (38005)
France

Carnaud Metal Box Packaging Director
(Prior to 8/1/96)
153, Rue de Courcelles a Paris 17eme
France

Compagnie De Credit Director
121, Boulevard Haussmann a Paris Seme
France

Compagnie De Saint-Gobain Director
Les Miroirs
18 Avenue d'Alsace
Paris la Defense (92096)
France

Eurafrance Director
12, Avenue Percier a Paris Seme
France

Financiere Et Industrielle Gaz Director
Et Eaux
3, Rue Jacques Bingen a Paris 17eme
France

Fonds Partenaires Gestion (F.P.G.) Director
121, Boulevard Haussmann a Paris Seme
France

Lazard, Burlkin, Kuna & Co. Director
(Prior to 1/1/96)
Ulmenstrasse 37-39
60325 Frankfurt am Main
Federal Republic of Germany

Lazard & Co. GmbH Director
Ulmenstrasse 37-39
60325 Frankfurt am Main
Federal Republic of Germany

LVMH-Moet Hennessy Louis Vuitton Director
30, Avenue Hoche a Paris 8eme
France

Marine-Wendel Director
189, Rue Taitbout a Paris 9eme
France

Midial (Prior to 1/1/96) Director
192, Avenue Charles de Gaulle
Neuille S/Sein (92200)
France

Pinault-Printemps-Redoute Director
61, Rue Caumartin
75009 Paris

PSA Finance Holding (Prior to 1/1/96) Director
75, av. de la Grande Armee a Paris 16eme
France

Sidel Director
66, Rue de Miromesnil
75008 Paris

Societe Centrale Puour L'Industrie Director
9, Avenue Hoche a Paris 8eme
France

Societe Financiere Generale Director
Immobiliere (S.F.G.I.)
23, rue de I'Arcasde a Paris 8eme
France

Sofina (Belgique) Director
Rue de Naples, 38-B-1050 Bruzelles

Sogeti S.A. (Prior to 8/1/96) Director
6, bld Jean Pain a Grenoble (38005)
France

Sovac (Prior to 8/1/96) Director
19-21, rue de la Bienfaisance a Paris 8eme
France

Sovaclux S.A. Director
14 rue Aldringen - Luxembourg

Thomson S.A. Director
51 esplanade du General de Gaulle
La Defense 10-92800 Puteaux
France

Thomson CSF Director
51 Esplanade du General de Gaulle
La Defense 10-92800 Puteaux
France

U.A.P. Director
9, place Vendome
75001 Paris

Felix G. Rohatyn Crown Cork & Seal Co., Inc. Director
9300 Ashton Road
Philadelphia, PA 19136

General Instrument Corp. Director
181 West Madison Street
Chicago, Illinois 60602

Howmet Turbine Components Corp. Director
(Prior to 1/1/96)
221 West Webster Avenue
Mouskegon, Michigan 49440

Pechiney S.A. (Prior to 3/1/95) Director
23 Rue Balzac
75008 Paris, France

Pfizer Inc. Director
235 East 42nd Street
New York, New York 10017-5755

Michael S. Rome None

Gerald Rosenfeld Case Corporation Director
700 State Street
Racine, Wisconsin 53404

Peter L. Smith Dixie Yarns Inc. Director
1100 Watkins Street
Chattanooga, Tennessee 37401

Arthur P. Solomon None

Michael B. Solomon Charming Shoppes Inc. Director
450 Winks Lane
Bensalem, Pennsylvania 19020

Edouard M. Stern Mainz Holdings Limited Director
P.O. Box 3161
Roadtown Tortola BVI

Penthievre Holdings B.V. Director
Jupiter Straat 158
2130 Ah Hoofddorp Netherlands

Paul A. Street GE Capital (Prior to 10/1/94) Senior Vice
260 Long Ridge Road President
Stamford, Connecticut 06927

Lazard Asia Ltd. Director
80 Raffles Place
22-20 UOB Plaza II
Singapore 048624

John S. Tamagni Western Holdings Inc. Director
(Prior to 9/20/96)
1491 Tyrell Lane
Boise, Idaho 83706

David L. Tashjian None

J. Mikesell Thomas First National Bank of Chicago Executive
(Prior to 1/1/95) Vice
One First National Plaza President
Chicago, Illinois 60603

Donald A. Wagner None

Ali E. Wambold The Albert Fisher Group plc Director
Fisher House
61 Thames Street
Windsor, Berkshire SO4 IQW
England

Lazard Brothers & Co., Ltd. Director
21 Moorfields
London EC2P 2HT
England

Lazard Burklin, Kuna & Co. Director
(Prior to 3/1/95)
Ulmeastrasse 37039
60325 Frankfurt and Main
Federal Republic of Germany

Lazard Freres & Co., Ltd. Director
21 Moorfields
London EC2P 2HT
England

Lazard S.P.A. Director
Plazza Meda, 3
Milano, Italy 20121

Tomkins PLC Director
East Putney House
84 Upper Richmond Road
London SW15 2ST
England, UK

Michael A. Wildish None

Kendrick P. Wilson III American Buildings Company Director
State Docks Road
Eufaula, Alabama 36027

Bank United Director
3200 Southwest Freeway
Houston, Texas 77027

ITT Corp. Director
1330 Avenue of the Americas
New York, NY 10019

Meigher Communications, Inc. Director
100 Avenue of Americas
New York, NY 10013

Alexander E. Zagoreos Drayton Korea Investment Trust Director
11 Devenshire Square
London EC2M 4YR

The Egypt Trust Director
One Rockefeller Plaza
New York, NY 10020

The Emerging World Trust Fund Limited Director
One Rockefeller Plaza
New York, NY 10020

Fleming Continental European Director
Investment Trust
25 Copthall Avenue
London EC2R 7DR

Gartmore Emerging Pacific Director
Investment Trust
Gartmore House
16-18 Monument Street
London EC3R 8AJ

Greek Progress Fund Director
Ergobank
5, Evripidou
40-44, Praxit, Elous
105-61 Athens
Greece

Latin American Investment Trust Director
Exchange House
Primrose Street
London EC2A 2NY

Merlin Green International Director
Investment Trust
Knightsbridge House
197 Knightsbridge
London SW7 1RB

New Zealand Investment Director
23 Cathedral Yard
Exeter
Devon EX1 1HB

Taiwan Opportunities Fund Director
c/o Martin-Currie
20 Castle Terrace
Edinburgh EHI 2ES
U.K.

World Trust Fund Director
Kredietrust
11 rue Aldringen
Luxembourg 1-2960

Item 29. Principal Underwriters

(a) Lazard Freres & Co. LLC, through its division Lazard Freres Asset
Management, currently serves as an investment adviser to the following
invesetment companies: Target Portfolio Trust; The Accessor Funds;
Fortis Series Fund, Inc.; and the Managers Funds.

(b) William R. Araskog, F. Harlan Batrus, David G. Braunschvig, Patrick J.
Callahan, Jr., Michael David-Weill, John V. Doyle, Charles R. Dreifus,
Thomas F. Dunn, Norman Eig, Peter R. Ezersky, Jonathan F. Foster,
Albert H. Garner, James S. Gold, Jeffrey A. Golman, Steven J. Golub,
Herbert W. Gullquist, Thomas R. Haack, J. Ira Harris, Melvin L.
Heineman, Kenneth M. Jacobs, Jonathan H. Kagan, James L. Kempner,
Sandra A. Lamb, Edgar D. Legaspi, Michael S. Liss, William E. Loomis,
Jr., J. Robert Lovejoy, Matthew J. Lustig, POhilippe L. Magistretti,
Damon Mezzacappa, Christina A. Mohr, Robert P. Morgenthau, Steven J.
Niemczyk, Hamish W. M. Norton, Jonathan O'Herron, James A. Paduano,
Louis Perlmutter, Robert E. Poll, Jr., Lester Pollack, Michael J.
Price, Steven L. Rattner, John R. Reese, John R. Reinsberg, Louis G.
Rice, Luis E. Rinaldini, Bruno M. Roger, Felix G. Rohatyn, Michael S.
Rome, Gerard Rosenfeld, Peter L. Smith, Arthur P. Solomon, Michael B.
Solomon, Edouard M. Stern, Paul A. Street, John S. Tamagni, David L.
Tashjian, Joseph M. Thomas, Donald A. Wagner, Ali E. Wambold, Michael
A. Wildish, Kendrick R. Wilson, III and Alexander E. Zagoreos are the
general members of Lazard Freres & Co. LLC. Mr. David-Weill is the
senior member of Lazard Freres & Co. LLC. The address of all such
members is 30 Rockefeller Plaza, New York, New York 10020.

Item 30. Location of Accounts and Records

The majority of the accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder are maintained as follows: Journals, ledgers,
securities records and other original records are maintained primarily
at the offices of the Registrant's Custodian, State Street Bank &
Trust Company. All other records so required to be maintained are
maintained at the offices of Lazard Freres & Co. LLC, 30 Rockefeller
Plaza, New York, New York 10020.

Item 31. Management Services

Not Applicable

Item 32. Undertakings

Registrant hereby undertakes

(1) to file a post-effective amendment, using financial
statements which need not be certified, within four to six
months from the effective date of Registrant's 1933 Act
Registration Statement.

(2) to call a meeting of shareholders for the purpose of voting
upon the question of removal of a director or directors when
requested in writing to do so by the holders of at least 10%
of the Registrant's outstanding shares of common stock and
in connection with such meeting to comply with the
provisions of Section 16(c) of the Investment Company Act of
1940 relating to shareholder communications.

(3) To furnish each person to whom a prospectus is delivered
with a copy of the Fund's latest Annual Report to
Shareholders, upon request and without charge.

<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 25th day of
February, 1997.

LAZARD RETIREMENT SERIES, INC.
(Registrant)

By: /S/HERBERT W. GULLQUIST
Herbert W. Gullquist, President

POWER OF ATTORNEY

Each person whose signature appears below on this Registration
Statement hereby constitutes and appoints William G. Butterly III his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities (until revoked in writing) to sign any and all amendments to this
Registration Statement (including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

/S/HERBERT W. GULLQUIST President (Principal February 25, 1997
Herbert W. Gullquist Executive, Financial
and Accounting Officer)
and Director

/S/NORMAN EIG Director February 25, 1997
Norman Eig