<PAGE>
As filed with the Securities and Exchange Commission on January 28, 1998
Registration Nos. 333-36161
811-08373
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. _2_ [X]
Post-Effective Amendment No. ___ [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. _2_ [X]
(Check appropriate box or boxes.)
----------------------
LaSalle Partners Funds, Inc.
(Exact Name of Registrant as Specified in Charter)
100 East Pratt Street
Baltimore, MD 21202
(Address of Principal Executive Office)
Registrant's Telephone Number, including Area Code: (410) 347-0600
William K. Morrill, Jr., President
LaSalle Partners Funds, Inc.
100 East Pratt Street
Baltimore, MD 21202
(Name and Address of Agent for Service)
Copies to:
Alan C. Porter, Esq.
Piper & Marbury L.L.P.
1200 Nineteenth Street, N.W.
Washington, DC 20036
Approximate Date of Proposed Offering: As soon as practicable after the
effective date of this Registration Statement.
Declaration Pursuant to Rule 24f-2
The Registrant hereby elects to register an indefinite number of Retail
Class and Institutional Class shares of the LaSalle Partners U.S. Real Estate
Fund series of its Common Stock, par value $.01 per share, pursuant to Rule 24f-
2 under the Investment Company Act of 1940, as amended. The Registrant is a
"feeder" fund within a "master-feeder" fund structure. The "master" fund within
this structure has executed this Registration Statement.
----------------------
The Registrant hereby amends the 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 Section 8(a),
shall determine.
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<PAGE>
LA SALLE PARTNERS FUNDS, INC.
CONTENTS OF
REGISTRATION STATEMENT
Facing Sheet
Table of Contents
Part A Cross Reference Sheet
Prospectus
Part B Cross Reference Sheet
Statement of Additional Information
Part C
Signature Page
Exhibit Index
<PAGE>
LA SALLE PARTNERS FUNDS, INC.
CROSS REFERENCE SHEET
PART A
<TABLE>
<CAPTION>
Form N-1A Item No. Section in the Prospectus
- ----------------- -------------------------
<S> <C>
1. Cover Page.................................................... Cover Page
2. Synopsis...................................................... Fees and Expenses
3. Condensed Financial Information............................... Performance Information
4. General Description of Registrant............................. Investment Objectives and
Policies; General Information
5. Management of the Fund........................................ Management
5A. Management's Discussion of Fund Performance................... Not applicable
6. Capital Stock and Other Securities............................ Dividends and Taxes; General
Information
7. Purchase of Securities Being Offered.......................... How To Purchase Shares
8. Redemption or Repurchase...................................... How To Redeem Shares
9. Pending Legal Proceedings..................................... Not applicable
</TABLE>
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER SECURITIES LAWS OF ANY +
+SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION JANUARY 27, 1998
PROSPECTUS
LA SALLE PARTNERS U.S. REAL ESTATE FUND
RETAIL CLASS AND INSTITUTIONAL CLASS SHARES
LaSalle Partners U.S. Real Estate Fund (the "Fund") is a mutual fund whose
investment objective is total return primarily through investments in U.S. real
estate securities. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the U.S. Real Estate Portfolio of
LaSalle Partners Master Trust (the "Trust"), which is a separate mutual fund
with an identical investment objective managed by LaSalle Partners Real Estate
Securities. The Fund's investment experience will correspond directly with the
investment experience of the Trust. This "master/feeder" structure differs from
that of mutual funds which invest directly and manage their own portfolio
securities.
This Prospectus relates to Retail Class and Institutional Class shares of the
Fund. Retail Class shares are available through securities dealers and other
financial services firms. Institutional Class shares are offered only to
certain qualified investors. See "How To Purchase Shares."
This Prospectus sets forth basic information that investors should know about
the Fund prior to investing and should be retained for future reference. A
Statement of Additional Information dated January , 1998, has been filed with
the Securities and Exchange Commission ("SEC") and is incorporated herein by
reference. The Statement of Additional Information is available upon request
and without charge by calling the Fund at 1-800-LaSalle. The SEC also 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.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary......................................................... 2
Fees and Expenses............................................... 3
Performance Information......................................... 4
Investment Objectives and Policies.............................. 5
Risks To Consider............................................... 7
Investment Restrictions......................................... 8
Management...................................................... 9
How To Purchase Shares.......................................... 11
How To Redeem Shares............................................ 12
Dividends and Taxes............................................. 13
General Information............................................. 14
</TABLE>
THE FUND'S SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK. THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENT IN THE SHARES INVOLVES RISK, INCLUDING POSSIBLE LOSS OF
PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
JANUARY , 1998
<PAGE>
No person is authorized to give any information or to make any representation
other than as contained in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Fund or the Distributor. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any of the securities offered hereby
by any person in any jurisdiction in which it is unlawful to make such an offer
or solicitation.
SUMMARY
THE FUND
LaSalle Partners U.S. Real Estate Fund (the "Fund") is a separate series of
LaSalle Partners Funds, Inc. (the "Company"), an open-end diversified
investment management company. The investment objective of the Fund is total
return primarily through investments in U.S. real estate securities. The Fund
seeks to achieve its investment objective by investing all of its investable
assets in the U. S. Real Estate Portfolio of LaSalle Partners Master Trust (the
"Trust"), which has the same investment objective as the Fund. The Fund's
investment experience will correspond directly with the investment experience
of the Trust. Under normal conditions, at least 85% of the Trust's total assets
will be invested in equity securities of real estate investment trusts
("REITs") and other real estate industry companies that are publicly traded in
the United States securities markets. See "Investment Objectives and Policies."
and "General Information."
INVESTMENT MANAGER, DISTRIBUTOR AND ADMINISTRATOR
LaSalle Partners Real Estate Securities (the "Manager" or "LaSalle Securities")
serves as the Trust's investment manager. Funds Distributor, Inc. (the
"Distributor") serves as principal underwriter and distributor of the Fund's
shares. PFPC Inc. serves as the Fund's administrator, and as transfer agent and
dividend disbursing agent for the Fund's shares. See "Management" and "General
Information."
PURCHASE AND REDEMPTION OF SHARES
Investors may purchase shares of the Fund at their net asset value through
securities dealers and other financial services firms. Institutional Class
shares may be purchased only by certain qualified investors. No sales load or
charge is imposed on the purchase of any class of Fund shares. See "How To
Purchase Shares." Shareholders may redeem all or any portion of their shares at
the net asset value next determined after the Fund's transfer agent has
received a redemption request in proper form. See "How To Redeem Shares."
RISKS TO CONSIDER
Because of its policy of concentration in securities of companies in the real
estate industry, the Fund will be subject to risks similar to those associated
with the direct ownership of real estate. These risks include economic,
business or political developments adversely affecting the real estate
industry. In addition, the Fund may be subject to the risks associated with
foreign investments. The Fund's "master/feeder" structure differs from that of
mutual funds which invest directly and manage their own portfolio securities.
See "Risks To Consider."
INVESTOR INQUIRIES
Investors with questions regarding the Fund should contact their dealer or call
the Fund directly at 1-800-LaSalle.
2
<PAGE>
FEES AND EXPENSES
The following table provides a summary of expenses relating to purchases and
sales of shares of the Fund, and the aggregate annual operating expenses of
the Fund and the Trust, as a percentage of average net assets of the Fund. The
Company's Board of Directors believes that the aggregate per share expenses of
the Fund and the Trust will be less than or approximately equal to the
expenses that the Fund would incur if the investable assets of the Fund were
invested directly in the types of securities being held by the Trust.
SHAREHOLDER TRANSACTION EXPENSES
<TABLE>
<CAPTION>
RETAIL CLASS INSTITUTIONAL CLASS
------------ -------------------
<S> <C> <C>
Sales Load Imposed on Purchases............... None None
Sales Load Imposed on Reinvested Dividends.... None None
Redemption Fee................................ None None
Exchange Fee.................................. None None
</TABLE>
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)/1/
<TABLE>
<CAPTION>
RETAIL CLASS INSTITUTIONAL CLASS
------------ -------------------
<S> <C> <C>
Management Fees (after waiver)/2/ ........... 0.65% 0.65%
12b-1 Fees................................... 0.25% 0.00%
Shareholder Services Fee..................... 0.15% 0.00%
Other Expenses/3/ ........................... 0.40% 0.40%
Total Fund Operating Expenses (after fee
waiver)/2/,/4/.............................. 1.45% 1.05%
</TABLE>
1. Expenses shown for the Fund include 12b-1, shareholder services and
administration fees for the Fund and investment management fees and other
expenses for the Trust.
2. The Manager has voluntarily agreed to waive its management fee to limit
total operating expenses of the Fund during its first year of operations.
Absent such waiver, the management fee would be 0.75%.
3. Other Expenses are based on estimates for the current fiscal year and
include all expenses, except non-recurring account fees, brokerage
commissions and other capital items, and investment management, 12b-1 and
shareholder services fees.
4. The Manager has voluntarily agreed to waive its fee during the Fund's first
year of operations so that Total Fund Operating Expenses will not exceed
1.45% for the Retail Class and 1.05% for the Institutional Class. In the
absence of this waiver, Total Fund Operating Expenses for the Retail Class
and Institutional Class would be 1.55% and 1.15%, respectively. For
additional information regarding Fund expense limitations, see "Investment
Manager" in the Statement of Additional Information.
EXAMPLE
<TABLE>
<CAPTION>
ONE YEAR THREE YEARS
-------- -----------
<S> <C> <C>
You would pay the following expenses on a $1,000 invest-
ment, assuming
(1) 5% annual return and (2) redemption at the end of
each time period:
Retail Class........................................... $15 $46
Institutional Class.................................... $11 $34
</TABLE>
The expense table and example above are provided to assist investors in
understanding the expenses they will bear directly or indirectly as a
shareholder in the Fund. For more information with respect to the expenses of
the Fund and the Trust, see "Management." The above example should not be
considered a representation of past or future expenses and actual expenses may
be greater or less than those shown.
3
<PAGE>
PERFORMANCE INFORMATION
PERFORMANCE OF LASALLE SECURITIES
The chart below shows the historical performance of all accounts having
substantially the same investment objective as the Fund and the Trust for
which the investment adviser is LaSalle Securities, the Trust's investment
adviser. The data, calculated on an average annual total return basis, is
provided to illustrate LaSalle Securities' past performance in managing
accounts in accordance with the same strategy, research and analytical models
utilized for the Trust. These accounts consist of separate and distinct
portfolios and their performance is not indicative of or a substitute for the
past or future performance of the Fund or the Trust. As of the date of this
Prospectus, the Fund and the Trust had not commenced investment operations and
therefore did not have a performance record of their own.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
-------- -------- ------ ------ ------ ------ ------ ------ ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LaSalle Securities Asset
Weighted Rate of
Return/1/.............. 38.21% 16.28% 6.47% 18.01% 17.12% 35.57% (18.32)% 10.92% 13.91% (1.83)%
Mutual Fund/2/.......... 32.70% 18.20% -- -- -- -- -- -- -- --
NAREIT Equity/3/........ 35.27% 15.27% 3.17% 19.65% 14.59% 35.70% (15.35)% 8.84% 13.49% (3.64)%
NAREIT Composite/4/..... 35.75% 18.31% 0.81% 18.55% 12.18% 35.68% (17.35)% (1.81)% 11.36% (10.67)%
Wilshire Real Estate
Securities Index/5/.... 36.87% 13.65% 1.64% 15.23% 7.40% 20.03% (33.46)% 2.37% 24.18% (7.86)%
Number of portfolios.... 32 27 18 14 16 12 10 8 6 2
Assets, end of period
(millions)............. $2,250.3 $1,346.4 $629.4 $291.5 $144.4 $127.8 $ 84.5 $ 84.3 $74.5 $ 52.3
</TABLE>
1. The composite performance data shown above for the LaSalle Securities Asset
Weighted Rate of Return (the "LaSalle Securities Composite") was developed
from the aggregate performance of all private accounts that are managed on a
basis substantially the same as LaSalle Securities employs in managing the
assets of the Trust. The LaSalle Securities Composite includes all portfolios
invested in U.S. based publicly traded real estate companies for which LaSalle
Securities has full discretionary authority to manage in accordance with
LaSalle Securities' strategy. The LaSalle Securities Composite excludes for
each respective year one portfolio invested in international real estate
securities and one portfolio invested in private commingled funds. The
composite performance data has been calculated in accordance with recommended
standards of the Association for Investment Management and Research ("AIMR"),
which differs from the SEC's method of performance calculation and the effect
of fees has been reflected as described below. Custodial fees and expenses
have not been deducted from the performance results, but investment management
fees have been deducted. The fees and expenses deducted from the composite
performance data generally are substantially lower than the expenses incurred
by the Fund and the Trust, and the composite performance figures would have
been lower if they had been subject to the higher fees and expenses incurred
by the Fund and the Trust. In addition, if the accounts within the composite
had been regulated as investment companies under the federal securities and
tax laws, the composite performance might have been adversely affected by the
diversification requirements, tax restrictions and investment limitations to
which the Fund and the Trust are subject.
2. LaSalle Securities is the subadviser of a mutual fund with substantially
the same investment objective as the Fund and the Trust. The mutual fund's
performance results were obtained from the mutual fund's annual reports. The
performance results assume the reinvestment of dividends and capital gains
distributions and exclude the impact of any sales charge. If the sales charge
were reflected, the performance results would be lower.
3. The NAREIT Equity Index reflects the performance of all publicly traded
Equity REITs.
4. The NAREIT Composite Index reflects the performance of all publicly traded
REITs.
5. The Wilshire Real Estate Securities Index is a market capitalization
weighted index of publicly traded real estate securities, such as REITs, real
estate operating companies and partnerships. The Index is comprised of
4
<PAGE>
companies whose charter is the equity ownership and operation of commercial
real estate. The following security types are excluded from the Index: (i)
Mortgage REITs, (ii) Health Care REITs, (iii) real estate finance companies,
(iv) home builders, (v) large land owners and sub-dividers and (vi) Hybrid
REITs. To be included on the Index, a company must (i) have a book value of
real estate assets of at least $100 million, (ii) have a market capitalization
of at least $100 million, and (iii) derive at least 75% of its total revenue
from the ownership and operation of real estate assets.
THE PERFORMANCE INFORMATION OF LASALLE SECURITIES SHOULD BE CONSIDERED IN
LIGHT OF THE FUND'S AND THE TRUST'S INVESTMENT OBJECTIVE AND POLICIES, AND
MARKET CONDITIONS DURING THE TIME PERIODS FOR WHICH IT IS REPORTED. THE
HISTORICAL PERFORMANCE OF LASALLE SECURITIES SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF THE FUTURE PERFORMANCE OF THE FUND OR THE TRUST.
FUND PERFORMANCE
The Fund may quote its yield and total return in advertisements and reports to
shareholders and prospective investors. The Fund's performance may also be
compared to that of other mutual funds with a similar investment objective and
to stock or other relevant indices, such as the S&P 500, that are referenced
in the Statement of Additional Information. Standard total return results
reported by the Fund do not take into account recurring and non-recurring
charges for optional services which only certain shareholders elect and which
involve nominal fees.
The Fund's yield is calculated by dividing the net investment income earned by
the Fund over a specified 30-day period, by the average number of shares
entitled to receive dividends, and expressing the result as an annualized
percentage rate based on the net asset value per share at the end of the 30-
day period. The effective yield is calculated similarly but, when annualized,
the income earned by an investment in the Fund is assumed to be reinvested.
The effective yield will be slightly higher than the yield because of the
compounding effect of this assumed reinvestment.
The Fund's average annual total return is computed by determining the average
annual compounded rate of return for a specific period which, when applied to
a hypothetical $1,000 investment in the Fund at the beginning of the period,
would produce the redeemable value of that investment at the end of the
period, assuming reinvestment of all dividends and distributions during the
period.
Further information concerning the Fund's yield and total return is included
in the Statement of Additional Information.
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of the Fund is total return primarily through
investments in U.S. real estate securities. The Fund seeks to achieve its
investment objective by investing all of its investable assets in the Trust,
which in turn invests in a diversified portfolio of securities. The Trust has
the same investment objective, policies and restrictions as the Fund. The
investment objective of each of the Fund and the Trust is not a fundamental
policy and may be changed upon notice to, but without the approval of, the
Fund's shareholders or the Trust's investors, respectively. There can be no
assurance that either the Fund or the Trust will achieve its investment
objective. The Fund's and the Trust's share prices and investment returns will
fluctuate, and a shareholder's investment in the Fund when redeemed may be
worth more or less than the original cost. See "Risks To Consider."
The Manager expects that, under normal conditions, at least 85% of the Trust's
total assets will be invested in equity securities of real estate investment
trusts ("REITs") and other real estate industry companies that are publicly
traded in the United States securities markets. For this purpose, a "real
estate industry company" is a company that derives at least 50% of its gross
revenues or net profits from the ownership, development,
5
<PAGE>
construction, financing, management or sale of commercial, industrial or
residential real estate. Equity securities of real estate industry companies in
which the Trust will invest include common stock, shares of beneficial interest
of REITs and securities with characteristics of common stock, such as preferred
stock and securities convertible into common stock. In addition to shares of
REITs, the Manager expects to invest in the securities of real estate operating
companies that acquire or develop real estate to be held for long-term
investment purposes. The Trust may invest up to 10% of its total assets in
foreign securities. See "Risks to Consider--Investment in Foreign Securities."
The Manager anticipates that the Trust's investments normally will be allocated
among a number of companies, representing diverse investment policies and real
property holdings, including, for example, certain securities selected for high
current return and others chosen for the possibility of long-term capital
appreciation from their underlying assets. The Trust seeks to provide investors
with a current return from dividends and distributions received with respect to
such securities, and with capital appreciation resulting from the selection of
securities that the Manager believes are underpriced relative to their
underlying intrinsic values. The Manager has amassed a solid track record in
managing institutional accounts over the last decade by utilizing intensive
top-down and bottom-up analysis that covers industry and market cycle trends as
well as individual company research.
The Manager expects to invest a portion of the Trust's assets in money market
instruments, including repurchase agreements, to provide flexibility in meeting
redemptions and paying expenses of the Trust, and in the timing of new
investments for the Trust's portfolio.
REAL ESTATE INVESTMENT TRUSTS
The Trust may invest without limitation in shares of REITs. REITs pool
investors' funds for investment primarily in income producing real estate or
real estate related loans or interests. A REIT is not taxed on income
distributed to its shareholders if it complies with regulatory requirements
relating to its organization, ownership, assets and income, and with a
regulatory requirement that it distribute to its shareholders at least 95% of
its taxable income for each taxable year. Generally, REITs can be classified as
Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs invest the majority
of their assets directly in real property and derive their income primarily
from rents. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive their income primarily from interest payments. Hybrid
REITs combine the characteristics of both Equity and Mortgage REITs. The
Manager expects to invest in common stock, preferred stock and other
convertible securities of primarily Equity REITs.
RULE 144A SECURITIES
Subject to the Trust's limitations on investing in illiquid securities, the
Trust may purchase Rule 144A securities. Rule 144A securities are restricted
securities in that they have not been registered under the Securities Act of
1933, but they may be traded between certain qualified institutional investors,
including investment companies. The presence or absence of a secondary market
in these securities may affect their value. The Trust's Board of Trustees has
established guidelines and procedures for determining the liquidity of Rule
144A securities.
REPURCHASE AGREEMENTS
The Trust may enter into repurchase agreements with respect to U.S. Treasury
securities. In a repurchase agreement, the Trust buys a security and
simultaneously agrees to sell it back at a higher price. In all cases, the
Manager must find the creditworthiness of the other party to the transaction to
be satisfactory. In addition, all repurchase agreements entered into by the
Trust will be fully collateralized and marked to market daily. In the event of
a default by, or bankruptcy proceedings with respect to, the other party to the
repurchase agreement, the Trust could experience delays in recovering its cash
and a loss to the extent that, in the meantime, the value of the securities
repurchased has decreased.
PORTFOLIO TURNOVER
The Trust anticipates that its annual portfolio turnover rate will not exceed
50%, but the Trust's turnover rate will not be a limiting factor when the
Manager deems portfolio changes appropriate.
6
<PAGE>
RISKS TO CONSIDER
INVESTMENT IN REAL ESTATE SECURITIES
Because of its policy of concentration in securities of companies in the real
estate industry, the Fund will be subject to risks similar to those associated
with the direct ownership of real estate. These risks include declines in the
value of real estate, risks related to general and local economic conditions,
dependency on management skill, heavy cash flow dependency, possible lack of
availability of mortgage funds, overbuilding, extended vacancies of properties,
increased competition, increases in property taxes and operating expenses,
changes in zoning laws, losses due to costs resulting from the clean-up of
environmental problems, liability to third parties for damages resulting from
environmental problems, casualty or condemnation losses, limitations on rents,
changes in neighborhood values and the appeal of properties to tenants, and
changes in interest rates.
Investors in the Fund will also be subject to certain risks associated with a
direct investment in REITs. Equity REITs may be affected by changes in the
value of the underlying properties owned by the REITs, while Mortgage REITs may
be affected by the quality of any credit extended. Further, Equity and Mortgage
REITs are dependent upon management skills and generally may not be
diversified. These REITs are also dependent on the income generated by the
underlying properties to meet operating expenses and are subject to defaults by
borrowers and self-liquidation. In addition, Equity and Mortgage REITs could
possibly fail to qualify for tax-free pass-through of income under the Internal
Revenue Code, or to maintain their exemptions from registration under the
Investment Company Act of 1940. The above factors may also adversely affect a
borrower's or a lessee's ability to meet its obligations to the REIT. In the
event of a default by a borrower or a lessee, the REIT may experience delays in
enforcing its rights as a mortgagee or lessor and may incur substantial costs
associated with protecting its investments.
REITs (especially Mortgage REITs) are also subject to interest rate risk. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.
INVESTMENT IN FOREIGN SECURITIES
Investing in foreign securities involves considerations and possible risks not
typically associated with investing in domestic securities. The values of
foreign investments are affected by changes in currency rates or exchange
control regulations, application of foreign tax laws, including withholding
taxes, changes in governmental administration or economic or monetary policy
(in the United States or abroad) or changed circumstances in dealings between
nations. Costs are incurred in connection with conversions between various
currencies. In addition, foreign brokerage commissions are generally higher
than in the United States, and foreign securities markets may be less liquid,
more volatile and less subject to governmental supervision than in the United
States. Investments in foreign countries could be affected by other factors not
present in the United States, including expropriation, confiscatory taxation,
lack of uniform accounting and auditing standards, potential difficulties in
enforcing contractual obligations and the possibility of extended settlement
periods.
MASTER/FEEDER FUND STRUCTURE
The Fund seeks to achieve its investment objective by investing all of its
assets in the Trust, a separate series of a registered investment company with
the same investment objective as the Fund. Therefore, an investor's interest in
the Trust's securities is indirect. In addition to selling shares of beneficial
interest to the Fund, the Trust may sell shares to other mutual funds or
institutional investors. These investors will invest in the Trust under the
same terms and conditions and will pay a proportionate share of the Trust's
expenses. However, due to variations in distribution arrangements and operating
expenses, the other funds investing in the Trust may sell their shares at a
price which differs from that applicable to shares of the Fund. As a result,
investors in the Fund may experience a return which varies from the returns
experienced by investors in other funds investing in the Trust.
7
<PAGE>
Variations in returns are also experienced by investors in other mutual fund
structures. The Fund is the only investment company investing in the Trust
whose shares are currently being publicly offered in the United States.
Information regarding the availability of other funds investing in the Trust
can be obtained by calling 1-800-LaSalle.
The Board of Directors of the Company believes that the "master/feeder" fund
structure offers opportunities for substantial growth in the assets of the
Trust which may enable the Fund to realize economies of scale that could reduce
the Fund's operating expenses. However, the Fund's investment in the Trust may
be adversely affected by the actions of other funds investing in the Trust. For
example, if a large fund withdraws from the Trust, the remaining funds may
experience higher pro rata operating expenses, thereby producing lower returns
(however, this possibility also exists for traditionally structured funds that
have large institutional investors). Additionally, the Trust may become less
diverse, resulting in increased portfolio risk. Funds with a greater pro rata
ownership in the Trust could have effective voting control of the operations of
the Trust.
Except as permitted by the SEC, whenever the Company is requested to vote on
matters pertaining to the Trust, the Company will hold a meeting of Fund
shareholders and will cast all of its votes in the same proportion as the votes
of its shareholders. Shares of the Fund for which voting instructions have not
been received will be voted by management in the same proportion as the shares
voted by shareholders of the Fund.
Certain changes in the Trust's investment objective, policies or restrictions
may require the Fund to withdraw its interest in the Trust. Any such withdrawal
could result in a distribution "in kind" of portfolio securities (as opposed to
a cash distribution) from the Trust. If securities are distributed, the Fund
generally would incur brokerage, tax or other charges in converting the
securities to cash. In addition, the distribution in kind may result in a less
diversified portfolio of investments or adversely affect the liquidity of the
Fund.
The Fund may withdraw its investment from the Trust at any time, if the
Company's Board of Directors determines that it is in the best interest of the
shareholders of the Fund to do so. Upon any such withdrawal, the Board of
Directors would consider what action might be taken, including continuing to
retain the Manager to manage the Fund's assets directly or investing all the
assets of the Fund in another pooled investment entity having the same
investment objective as the Fund.
INVESTMENT RESTRICTIONS
The Trust's investment program is subject to a number of investment
restrictions that reflect both self-imposed standards and regulatory
limitations. Restrictions (1) and (2) are matters of fundamental policy and may
only be changed with shareholder approval. Restrictions (3) and (4) may be
changed by the Trust's Board of Trustees. The Trust will not:
(1) With respect to 75% of the value of its total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities) if, as a result, more
than 5% of the value of the Trust's total assets would be invested in the
securities of such issuer or the Trust would hold more than 10% of the
outstanding voting securities of such issuer.
(2) Concentrate its investments in any one industry (excluding securities
of the U.S. Government and its agencies and instrumentalities), except that
the Trust may invest more than 25% of the value of its total assets in the
real estate industry.
(3) Invest more than 15% of its net assets in illiquid securities,
including repurchase agreements with maturities of greater than seven days.
(4) Invest more than 10% of its net assets foreign securities.
The investment restrictions set forth above are also applicable to the Fund;
restrictions (1) and (2) are matters of fundamental policy and restrictions (3)
and (4) may be changed by the Company's Board of Directors. No investment
restriction of the Fund prevents the Fund from investing all of its investable
assets in the Trust.
8
<PAGE>
The Fund and the Trust are subject to additional investment restrictions which
are described in the Statement of Additional Information.
MANAGEMENT
The business and affairs of the Fund are managed under the supervision of the
Board of Directors of the Company, while the business and affairs of the Trust
are managed under the supervision of its Board of Trustees. The Company's Board
of Directors approves all significant agreements between the Company and
persons or companies furnishing services to the Fund, including the agreements
with the Fund's manager, distributor, administrator, transfer agent and
custodian. A majority of the Company's directors are not affiliated with either
the manager or the distributor of the Fund. The management of the Fund's day-
to-day operations is delegated to its officers, manager and administrator,
subject always to the general supervision of the Board of Directors.
INVESTMENT MANAGER
LaSalle Securities serves as manager of the Fund pursuant to a management
agreement with the Company. Under the agreement, the Manager is responsible for
monitoring the Fund's operations and the services provided to the Fund by
others. At the present time, the Fund seeks to achieve its investment objective
by investing all of its investable assets in the Trust. The Manager also serves
as the Trust's investment manager pursuant to an investment management
agreement with the Trust. Under its agreement with the Trust, the Manager
manages the Trust's portfolio in accordance with its investment objective,
policies and restrictions, makes investment decisions for the Trust, places
orders for the purchase and sale of securities and other financial instruments
on behalf of the Trust, and employs portfolio managers and securities analysts
who provide research services to the Trust.
For providing these services and facilities to the Trust, the Manager is
entitled to receive an investment management fee from the Trust, computed daily
and paid monthly, at the annual rate of 0.75% of the Trust's average net
assets. The Manager currently receives no fee for providing these services and
facilities to the Fund. However, in the event the Company's Board of Directors
determines that it is in the best interests of the Fund's shareholders to
withdraw its investment in the Trust, the Manager would become responsible for
directly managing the assets of the Fund under its management agreement with
the Company. Under such management agreement the Manager would be entitled to
receive an investment management fee from the Fund, accrued daily and paid
monthly, at the annual rate of 0.75% of the Fund's average net assets.
The Manager is a registered investment adviser and together with its affiliates
had as of September 30, 1997, approximately $2.8 billion in real estate
securities under management, almost all of which are U.S. real estate
securities. The Manager was formed on November 1, 1994, to acquire a portion of
the real estate securities investment advisory business of Alex. Brown
Kleinwort Benson Realty Advisors Corporation. The Manager, together with its
predecessors, has provided investment advice to pension funds and other
institutional investors with respect to investments in real estate securities
since 1985. The Manager's investment team has more than twelve years of
experience in managing accounts in accordance with the same strategy utilized
for the Trust and is supported by LaSalle Partners' extensive research and
property management organization which consists of over 1,300 employees in ten
corporate offices across the United States and seven international offices. The
Manager utilizes the same research, analytical models and professional staff in
managing the assets of the Trust.
The Manager is a Maryland limited partnership organized under the name
ABKB/LaSalle Securities Limited, with its principal office located at 100 East
Pratt Street, Baltimore, Maryland 21202. The Manager is one of several entities
through which LaSalle Partners Incorporated and its affiliates conduct real
estate investment advisory and related businesses. LaSalle Partners is a
leading full-service real estate firm that provides management services,
corporate and financial services and investment management services to
corporations and other real estate owners, users and investors worldwide.
The Trust may, from time to time, consistent with its investment policies and
applicable law, invest in securities of companies with which LaSalle Partners
has a business relationship. Any such relationship will not be a factor
considered by the Manager in making decisions regarding the securities to be
purchased or sold for the Trust.
9
<PAGE>
Officers and employees of the Manager are permitted to engage in personal
securities transactions subject to restrictions and procedures set forth in the
Code of Ethics adopted by the Company and the Trust.
PORTFOLIO MANAGERS
William K. Morrill, Jr. and Keith R. Pauley, both Managing Directors of the
Manager, share primary responsibility for managing the Trust's assets. Mr.
Morrill has more than 17 years of investment experience and has been a
portfolio manager with the Manager or its predecessors since 1985. Mr. Pauley
has more than ten years of investment experience and has been a portfolio
manager with the Manager or its predecessors since 1986.
PORTFOLIO TRANSACTIONS
Subject to the general supervision of the Board of Trustees of the Trust, the
Manager is responsible for placing orders for securities transactions.
Transactions involving equity securities will normally be conducted through
broker-dealers who charge a commission for their services. The Trust has no
obligation to enter into securities transactions with any particular broker-
dealer, issuer, underwriter or other entity. In placing orders for the Trust,
it is the policy of the Manager to obtain the most favorable execution. Where
such execution may be obtained from more than one firm, securities transactions
may be directed at higher commission rates to firms that provide research,
statistical and other information to the Manager. If more than one account
managed by the Manager is purchasing or selling the same security, the orders
may be aggregated in the interest of achieving the most favorable execution.
ADMINISTRATOR
PFPC Inc. (the "Administrator"), 103 Bellevue Parkway, Wilmington, Delaware
19809, serves as administrator of both the Fund and the Trust pursuant to
separate administration agreements. The Administrator provides certain fund
accounting and administrative services to the Fund and the Trust including,
among other services, accounting relating to the Fund and the Trust and their
investment transactions, and computation of the net asset values of the Fund
and Trust. The Administrator does not have any responsibility or authority for
the management of the assets of the Fund or the Trust, the determination of
their investment policies, or for any matter pertaining to the distribution of
their shares.
As compensation for the services and facilities provided by the Administrator
to the Trust, the Trust has agreed to pay a fee, computed daily and paid
monthly, at the annual rate of 0.11% of the first $250 million of the average
net assets of the Trust, 0.085% of the next $250 million of such assets, 0.06%
of the next $250 million of such assets, 0.05% of the next $250 million of such
assets and 0.04% of such assets in excess of $1 billion, subject to a minimum
monthly fee of $7,917, and to reimburse the Administrator for its out-of-pocket
expenses. In addition, as compensation for the services and facilities provided
by the Administrator to the Fund, the Fund has agreed to pay a monthly fee of
$2,000, and to reimburse the Administrator for its out-of-pocket expenses.
DISTRIBUTION ARRANGEMENTS
Shares of the Fund are distributed through Funds Distributor, Inc. (the
"Distributor"), the principal underwriter and distributor of the Fund. The
Distributor, located at 60 State Street, Suite 1300, Boston, Massachusetts
02109, is a registered broker-dealer and member firm of the National
Association of Securities Dealers, Inc.
The Company has adopted a distribution plan for the Retail Class of the Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940. The plan
provides for the payment of a distribution fee from the assets of the Retail
Class for activities primarily intended to result in the sale of Retail Class
shares, including advertising, compensation to dealers and the preparation of
sales literature. Distribution fees paid under the plan may not exceed 0.75%
annually of the average net assets of the Retail Class, or such lesser amount
as specified by the Company's Board of Directors. The Board of Directors has
authorized payment of an annual distribution fee of 0.25%. The distribution fee
is paid to the Distributor and financial services firms who assist in the
distribution of Retail Class shares.
Under a shareholder services plan adopted for the Retail Class, the Fund may
pay shareholder services fees to financial services firms and others who have
entered into shareholder services agreements with the Company. These fees are
paid for services provided to Retail Class shareholders, including shareholder
assistance and communications, and maintenance of shareholder accounts.
Shareholder services fees paid under the plan may
10
<PAGE>
not exceed 0.25% annually of the average net assets of the Retail Class
attributable to applicable shareholder accounts, or such lesser amount as
specified by the Company's Board of Directors. The Board of Directors has
authorized payment of an annual shareholder services fee of 0.15%.
The distribution and shareholder services plans apply only to the Retail Class
of the Fund. The fees paid under the plans are subject to the review and
approval by the Company's directors who are not "interested persons" of the
Company (as defined in the Investment Company Act of 1940) and who may reduce
the fees or terminate the plans at any time.
HOW TO PURCHASE SHARES
The Company offers investors two classes of shares of the Fund -- Retail Class
shares and Institutional Class shares. The different classes represent
investments in the same portfolio of securities but are subject to different
expenses and will likely have different share prices. Shares of the Fund may
be purchased at the net asset value next determined after receipt of an order
in proper form. There is no sales load or charge in connection with the
purchase of any class of the Fund's shares; however, Retail Class shares are
subject to distribution and shareholder services fees. See "Management--
Distribution Arrangements."
Purchase orders for Fund shares which are received by the transfer agent in
proper form prior to the close of regular trading hours (normally 4:00 p.m.
Eastern Time) on the New York Stock Exchange (the "NYSE") on any day that the
Fund's net asset value is calculated (a "business day") are priced at the net
asset value per share determined that day. Purchase orders for shares of the
Fund received after the close of the NYSE on a particular business day are
priced as of the time the net asset value per share is next determined.
The Company and the Distributor reserve the right to reject any purchase order
and to suspend the offering of shares of the Fund. The Company reserves the
right to vary the initial investment minimums and to impose minimums for
additional investments in any of the classes of the Fund's shares at any time.
In addition, the Company may waive the minimum initial investment requirement
for any investor.
RETAIL CLASS SHARES
Investors can purchase Retail Class shares through any securities dealer or
other financial services firm that has a sales agreement with the Distributor,
or directly through the Fund's transfer agent. The minimum initial investment
for Retail Class shares is $10,000.
The Fund may accept telephone orders for shares from securities dealers and
other financial services firms that have been previously approved by the Fund.
It is the responsibility of these firms to forward purchase orders and
payments for shares promptly. Financial services firms may charge the investor
a transaction fee or other fee for their services at the time of purchase.
These fees would not otherwise be charged if the shares were purchased
directly through the Fund's transfer agent.
Shareholders may purchase additional shares for an existing account by mailing
a check payable to "LaSalle Partners Funds, Inc.--LaSalle Partners U.S. Real
Estate Fund" for the amount of the investment to the Company at the following
address: LaSalle Partners Funds, Inc., c/o PFPC Inc., P.O. Box 8976,
Wilmington, DE 19899-8976. Retail Class shares may not be purchased with a
check issued by a third party and endorsed over to the Fund.
Retail Class shares may also be purchased for an existing shareholder account
by wiring money to:
PNC Bank, N.A.
Philadelphia, Pennsylvania
ABA #0310-0005-3
For Credit to: LaSalle Partners Funds, Inc.--LaSalle Partners U.S. Real
Estate Fund
Retail Class Shares
11
<PAGE>
Account No.:
Account Name:
The wire instructions must include the account number. An order to purchase
shares by Federal Funds wire will be deemed to have been received on the
business day of the wire, provided that shareholders notify the Fund's
transfer agent at 1-800-LaSalle by 12:00 p.m. (Eastern Time) of their
intention to wire money. The Company currently does not charge shareholders
for the receipt of wire transfers, although your bank may charge you for their
wiring services.
INSTITUTIONAL CLASS SHARES
Institutional Class shares are currently available only to certain qualified
purchasers including, but not limited to, financial institutions (such as
banks, savings institutions and credit unions), pension and profit sharing and
employee benefit plans and trusts, insurance companies, investment companies,
and investment advisers and broker-dealers acting for their own accounts or
for the accounts of such institutional investors. The minimum initial
investment for Institutional Class shares is $250,000 ($1,000 for LaSalle
employee investment accounts). For more information contact the Fund at 1-800-
LaSalle.
EMPLOYEE PURCHASE PROGRAM
Current and former directors and officers of the Company, current and retired
officers, directors and regular employees of LaSalle Partners Incorporated and
its direct and indirect subsidiaries, and their spouses and minor children may
open an employee investment account directly with the Company by making an
initial investment of $1,000 or more. Institutional Class shares may be
purchased for an employee investment account as described under "Retail Class
Shares" above. To open an employee investment account, call 1-800-LaSalle to
request an account application.
TAX-SHELTERED RETIREMENT PLANS
Fund shares are eligible for purchase by retirement plans which offer tax
advantages to individuals. Investors in the Fund can establish an account
under one of several tax-sheltered plans, including Individual Retirement
Accounts (IRAs), which permit investment for retirement and shelter income and
capital gains distributions from current taxes. For more information on
retirement plans and their benefits, provisions and fees, contact your
investment professional.
DETERMINATION OF NET ASSET VALUE
The Fund's net asset value is determined each business day as of the close of
regular trading hours on the NYSE, which is normally 4:00 p.m. (Eastern Time).
The net asset value per share of a class is calculated by valuing its share of
the Fund's assets (i.e., the value of its investment in the Trust and other
assets), deducting all liabilities attributable to that class, and dividing
the resulting amount by the number of shares of the class then outstanding.
For this purpose, the Trust's portfolio securities are valued primarily on the
basis of market quotations or, in the case of securities for which market
values are not available, at their fair values determined in accordance with
procedures established and monitored by the Board of Trustees of the Trust.
HOW TO REDEEM SHARES
Shareholders may redeem all or part of their investment on any business day by
transmitting a redemption order through their dealer or by directly to the
Fund's transfer agent. A redemption order will be effected at the net asset
value per share next determined after its receipt in proper form. Redemption
orders received after 4:00 p.m. (Eastern Time) or the close of regular trading
hours on the NYSE, whichever is earlier, will be effected at the net asset
value per share determined on the next business day. Payment for redeemed
shares will be made by check and will be mailed within seven days after
receipt of a redemption order fully completed and, as applicable, accompanied
by the required documents.
12
<PAGE>
REDEEMING SHARES BY MAIL
Shareholders may redeem Fund shares directly by mail. Written requests for the
redemption of Fund shares must be received in good order by the Fund's
transfer agent to constitute a valid redemption order by mail. Shareholders
redeeming shares by mail must send a letter of instruction, specifying (1) the
shareholder's account number and (2) the number of shares or dollar amount to
be redeemed, to the Company at the following address: LaSalle Partners Funds,
Inc., c/o PFPC Inc., P.O. Box 8976, Wilmington, DE 19899-8976. The letter of
instruction must be signed by all owners of the shares in the exact names in
which their account is maintained. Additional documentation may be required
for redemptions by corporations, partnerships, trusts or fiduciaries.
To protect shareholders and the Fund against fraud, a signature guarantee will
be required if: (a) the redemption request is for an amount in excess of
$25,000; (b) redemption proceeds are to be sent to a name and/or address that
differs from the registered name or address of record; or (c) a transfer of
registration is requested. Otherwise, written redemption requests by mail may
be accepted without a signature guarantee. A signature guarantee may be
obtained from domestic banks or trust companies, brokers, dealers, clearing
agencies or savings associations who are participants in a medallion program
recognized by the securities transfer association. Please note that a notary
public stamp or seal is not acceptable.
REDEEMING SHARES BY TELEPHONE
Shareholders who have completed the section of the account application
authorizing telephone transactions may redeem Fund shares in amounts up to
$25,000, by notifying the Fund's transfer agent by telephone at 1-800-LaSalle.
Payment for the redeemed shares will be made by check mailed to the address of
record.
Neither the Fund nor its transfer agent will be responsible for any loss,
liability, cost or expense for acting upon telephone instructions that it
reasonably believes to be genuine. The Fund and the transfer agent will each
employ reasonable procedures to confirm that instructions communicated by
telephone are genuine. To ensure the authenticity of redemption instructions
received by telephone, the transfer agent examines each shareholder request by
verifying the account number and/or tax identification number at the time the
request is made. The transfer agent subsequently sends confirmations of the
transaction to the shareholder for verification. If reasonable procedures are
not employed, the Fund and the transfer agent may be liable for any losses due
to unauthorized or fraudulent telephone transactions.
REDEEMING SHARES THROUGH YOUR DEALER
The Distributor has made arrangements for securities dealers and other
financial services firms to redeem shares on behalf of their customers. These
firms may charge for this service.
OTHER INFORMATION
The Company will honor redemption requests of shareholders who recently
purchased shares by check, but will not mail the proceeds until it is
reasonably satisfied that the check for the purchase of Fund shares has
cleared, which may take up to fifteen days from the purchase date.
Dividends payable up to the date of the redemption of shares will be paid on
the next dividend payment date. If all of the shares in a shareholder's
account have been redeemed on a dividend payment date, the dividend will be
remitted by check to the shareholder.
The Company has the power under its charter to redeem the shares in any
shareholder account with a value of less than the minimum initial investment
for such shares upon 60 days' notice. Shares will not be redeemed
involuntarily as a result of a decline in account value due solely to a
decline in the Fund's net asset value.
DIVIDENDS AND TAXES
DIVIDENDS
The Company's policy is to make quarterly distributions from the net
investment company taxable income of the Fund. Net capital gain (net long-term
capital gain in excess of net short-term capital loss), if any, will be
distributed at least annually. The Fund's investment company taxable income
consists of all taxable income other
13
<PAGE>
than the excess, if any, of net long-term capital gain over net short-term
capital loss, reduced by deductible expenses of the Fund. The Company currently
expects that a portion of the Fund's dividends will consist of amounts in
excess of investment company taxable income derived from non-taxable components
of the cash flow from the real estate underlying the Trust's portfolio
investments. These amounts will be considered a return of capital and thus will
not be subject to current taxation.
Unless a shareholder elects payment by check, all income dividends and capital
gain distributions, if any, will be reinvested in additional Fund shares of the
same class at net asset value as of the reinvestment date. Shareholders may
elect to terminate automatic reinvestment by giving written notice to the
Fund's transfer agent (at the address listed in this Prospectus), either
directly or through their dealer, at least five days before the next date on
which dividends or distributions will be paid.
TAXES
The Fund and the Trust are treated as separate entities for federal tax
purposes. The Fund intends to qualify for the special tax treatment afforded
regulated investment companies under the Internal Revenue Code so that it will
be relieved of federal income tax on net investment company taxable income and
net capital gain distributed to shareholders. In addition, the Fund expects to
make sufficient distributions prior to the end of each calendar year to avoid
liability for federal excise tax. As a partnership under the Code, the Trust
does not pay federal income or excise taxes.
Dividends from the Fund's net investment company taxable income are taxable to
shareholders as ordinary income (whether received in cash or in additional
shares) to the extent of the Fund's earnings and profits. Distributions of net
capital gain that are designated by the Fund as capital gain dividends are
taxable to shareholders as long-term capital gain, regardless of how long
shareholders have held their shares and regardless of whether the distributions
are received in cash or in additional shares. Only a portion of the dividends
paid by the Fund is expected to qualify for the dividends received deduction
available to corporate shareholders. The Fund provides shareholders annually
with information regarding the federal income tax status of its dividends and
distributions.
The net asset value of the Fund's shares will be reduced by the amount of any
dividend or distribution on the record date for the distribution. An investor
who purchases shares immediately prior to the record date will pay the full net
asset value for the shares and will receive a distribution which, although in
effect a return of capital to that shareholder, will be taxable as described
above.
The sale or redemption of Fund shares is a taxable event for the shareholder.
Shareholders should consult their tax advisors regarding specific questions as
to federal, state and local income taxes. The Statement of Additional
Information contains additional information regarding taxes.
GENERAL INFORMATION
DESCRIPTION OF SHARES
The Fund is a series of the Company which is an open-end diversified management
investment company incorporated under the laws of the State of Maryland. Each
share of the Fund has one vote and is entitled to dividends and distributions
when and if declared by the Company's Board of Directors. In the event of
liquidation of the Fund or dissolution of the Company, each share would be
entitled to its pro rata portion of the Fund's assets after all debts and
expenses have been paid.
The Board of Directors of the Company is authorized to establish "series" of
shares of capital stock, each of which would evidence interests in a separate
portfolio of securities, and separate classes of shares of each series.
Different classes of the Company's shares of any series may be offered to
certain investors. All classes of a particular series share a common investment
objective and portfolio of investments; however, the net asset values per share
of the classes will differ to the extent there are different fees and expenses
applicable to the classes.
14
<PAGE>
The shares offered by this Prospectus have been designated Retail Class and
Institutional Class shares of the LaSalle Partners U.S. Real Estate Fund
series. The Board of Directors of the Company may add one or more additional
series or classes of shares in the future. Additional information concerning
the Fund's shares may be obtained by calling 1-800-LaSalle.
The Trust, in which all of the investable assets of the Fund will be invested,
is a series of a business trust organized under the laws of the State of
Delaware. The Trust's Agreement and Declaration of Trust provides that the Fund
and other entities investing in the Trust (e.g., other investment companies)
will be liable for obligations of the Trust. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Trust itself is
unable to meet its obligations. Accordingly, the Company's Board of Directors
believes that neither the Fund nor its shareholders will be adversely affected
by reason of the Fund's investing in the Trust.
ANNUAL MEETINGS
Unless required under applicable Maryland law, the Company does not expect to
hold annual meetings of shareholders. However, shareholders of the Fund retain
the right, under certain circumstances, to request that a meeting of
shareholders be held for the purpose of considering the removal of a director
from office, and if such a request is made, the Company will assist with the
shareholder communications in connection with the meeting.
SHAREHOLDER REPORTS
The Company furnishes shareholders with semi-annual reports containing
information about the Fund and its operations, including a list of investments
held in the Trust's portfolio and financial statements. The annual financial
statements will be audited by the Company's independent accountants, Coopers &
Lybrand L.L.P.
OFFICERS AND DIRECTORS OF THE FUND
<TABLE>
<S> <C>
Bruce D. Alexander Director
Lawrence S. Bacow Director
Richard A. Dobbins Director
John W. McCarter, Jr. Director
Lynn C. Thurber Director
William K. Morrill, Jr. Director and President
Keith R. Pauley Director and Executive Vice President
Stephen A. Smith Senior Vice President and Secretary
Audre' J. Melsbakas Senior Vice President and Assistant Secretary
James A. Ulmer, III Vice President
William E. Sullivan Treasurer
Denise M. Ruth Assistant Treasurer
</TABLE>
* Ms. Thurber and Messrs. Morrill and Pauley are directors who are "interested
persons" of the Company within the meaning of the Investment Company Act of
1940.
CUSTODIAN
PNC Bank, National Association, 200 Stevens Drive, Lester, Pennsylvania 19113,
serves as custodian of the Fund's and the Trust's assets consisting of cash and
securities.
TRANSFER AGENT
PFPC Inc., 103 Bellevue Parkway, Wilmington, Delaware 19809, serves as transfer
agent and dividend paying agent for the Fund's shares.
15
<PAGE>
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., 2400 Eleven Penn Center, Philadelphia, Pennsylvania
19103, has been selected as independent accountants for the Company and the
Trust.
LEGAL COUNSEL
Piper & Marbury L.L.P., 36 South Charles Street, Baltimore, Maryland 21201,
serves as counsel to the Company and the Trust.
INVESTOR INQUIRIES
Investors with questions regarding the Fund should contact their dealer or call
the Company directly at 1-800-LaSalle.
ADDITIONAL INFORMATION
The Company and the Trust have filed with the Securities and Exchange
Commission ("SEC") a Registration Statement with respect to the shares of the
Fund offered hereby. This Prospectus and the Statement of Additional
Information, which constitute part of the Registration Statement, do not
contain all the information set forth in the Registration Statement, and the
exhibits and schedules to the Registration Statement filed with the SEC. Copies
of the Registration Statement, including those items omitted from this
Prospectus, may be examined at the offices of the SEC in Washington, D.C. The
SEC maintains a Web site (http://www.sec.gov) that contains the Registration
Statement, material incorporated by reference and other information regarding
the Fund and the Trust.
16
<PAGE>
LA SALLE PARTNERS FUNDS, INC.
CROSS REFERENCE SHEET
Part B
<TABLE>
<CAPTION>
Section in Statement of
Form N-1A Item No. Additional Information
- ------------------ -----------------------
<S> <C> <C>
10. Cover Page.......................................................... Cover Page
11. Table of Contents................................................... Cover Page
12. General Information and History..................................... General Information
13. Investment Objectives and Policies.................................. Investment Policies and Practices, Investment
Restrictions, Portfolio Transactions and Brokerage
14. Management of the Fund.............................................. Management
15. Control Persons and Principal Holders of Securities................. Management
16. Investment Advisory and Other Services.............................. Management; Investment Manager; Administrator;
General Information
17. Brokerage Allocation and Other Practices............................ Portfolio Transactions and Brokerage
18. Capital Stock and Other Securities.................................. Description of Capital Stock
19. Purchase, Redemption and Pricing of Securities Being Offered........ Valuation of Portfolio Securities;
Redemption of Shares
20. Tax Status.......................................................... Taxation
21. Underwriters........................................................ Distribution Arrangements
22. Calculation of Performance Data..................................... Performance Information
23. Financial Statements................................................ General Information
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Statement of Additional Information and the related prospectus
shall not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under securities laws of any such State.
Subject to Completion
January 27, 1998
LaSalle Partners U.S. Real Estate Fund
STATEMENT OF ADDITIONAL INFORMATION
January , 1998
This Statement of Additional Information is not a prospectus but
provides additional information that should be read in conjunction with the
Prospectus dated January , 1998 including any supplements thereto. To
obtain additional copies of the Prospectus, please call 1-800-LaSalle.
Table of Contents
-----------------
Page
----
General Information B-2
Investment Policies and Practices B-2
Investment Restrictions B-4
Portfolio Transactions and Brokerage B-6
Valuation of Portfolio Securities B-7
Redemption of Shares B-7
Taxation B-8
Management B-10
Investment Manager B-12
Administrator B-13
Distribution Arrangements B-13
Performance Information B-15
Description of Capital Stock B-16
Financial Statements F-1
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GENERAL INFORMATION
LaSalle Partners U.S. Real Estate Fund (the "Fund") is a series of
LaSalle Partners Funds, Inc. (the "Company"), an open-end diversified management
investment company. The Company currently offers two classes of shares of the
Fund: Retail Class shares and Institutional Class shares.
Under the rules and regulations of the Securities and Exchange
Commission (the "SEC"), all mutual funds are required to furnish prospective
investors with certain information regarding the activities of the fund being
considered for investment. Important information concerning the Company and the
Trust is included in the Prospectus which may be obtained without charge from
the Company's distributor or securities dealers and other financial institutions
that have a sales agreement with the Company's distributor. Some of the
information required to be in this Statement of Additional Information is also
included in the Prospectus. To avoid unnecessary repetition, references are made
to related sections of the Prospectus.
As described in the Prospectus, the Fund seeks to achieve its
investment objective by investing all of its investable assets in a series of an
open-end management investment company having the same investment objective as
the Fund. The investment company is the U.S. Real Estate Portfolio of LaSalle
Partners Master Trust (the "Trust") for which LaSalle Partners Real Estate
Securities (the "Manager") serves as investment manager. Since the investment
characteristics of the Fund will correspond directly to those of the Trust, the
Prospectus and this Statement of Additional Information include a discussion of
the various investments of and techniques employed by the Trust.
The Company was incorporated under the laws of the State of Maryland
on September 19, 1997. The Company filed a registration statement with the SEC
registering as an open-end diversified management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"), and registering an
indefinite number of its Retail Class and Institutional Class shares of the Fund
under the Securities Act of 1933, as amended (the "1933 Act"). As of the date of
this Statement of Additional Information, the Fund had not yet commenced
operations.
INVESTMENT POLICIES AND PRACTICES
The Fund's investment objective is total return primarily through
investments in U.S. real estate securities. As described in the Prospectus, the
Fund will attempt to achieve its objective by investing all of its investable
assets in the Trust. The Trust will invest its assets primarily in equity
securities of real estate investment trusts ("REITs") and other real estate
industry companies that are publicly traded in the United States securities
markets. Equity securities of real estate industry companies in which the Trust
will invest consist of common stock, shares of beneficial interest of REITs and
securities with characteristics of common stock, such as preferred stock and
debt securities convertible into common stock. The Trust does not have a policy
requiring a minimum rating for investment in debt securities. The Trust does not
expect to invest in debt securities during the current fiscal year. There can be
no assurance that either the Fund or the Trust will achieve its investment
objective. The following information supplements, and should be read in
conjunction with, the discussion in the Prospectus of the investment objective
and policies of the Fund and the Trust.
Real Estate Investment Trusts
Real estate investment trusts ("REITs") pool investors' funds for
investment primarily in income-producing commercial real estate or real estate
related loans. A REIT is not taxed on income distributed to shareholders if it
complies with several requirements relating to its organization, ownership,
assets and income, and a requirement that it distribute to its shareholders at
least 95% of its taxable income (other than net capital gains) for each taxable
year.
REITs can generally be classified as follows:
. Equity REITs, which invest the majority of their assets directly
in real property and derive their income primarily from rents.
Equity REITs can also realize capital gains by selling properties
that have appreciated in value.
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. Mortgage REITs, which invest the majority of their assets in real
estate mortgages and derive their income primarily from interest
payments.
. Hybrid REITs, which combine the characteristics of both Equity
REITs and Mortgage REITs.
REITs are like closed-end investment companies in that they are
essentially holding companies that rely on professional managers to supervise
their investments.
Illiquid and Restricted Securities
As discussed in the Prospectus, the Trust may invest up to 15% of the
value of its net assets, measured at the time of investment, in illiquid
securities. Both restricted securities (other than Rule 144A securities that are
deemed to be liquid as discussed below), which may not be resold to the public
without registration under the 1933 Act, and securities that, due to their
market or the nature of the security, have no readily available market for their
disposition are considered to be not readily marketable or "illiquid".
Limitations on resale and marketability may have the effect of preventing the
Trust from disposing of a security at the time desired or at a reasonable price.
In addition, in order to resell a restricted security, the Trust might have to
bear the expense and incur the delays associated with registration. In
purchasing illiquid securities, the Trust does not intend to engage in
underwriting activities, except to the extent the Trust may be deemed to be a
statutory underwriter under the 1933 Act in purchasing or selling such
securities. Illiquid securities will be purchased for investment purposes only
and not for the purpose of exercising control or management of other companies.
In recent years, a large institutional market has developed for
certain securities that are not registered under the 1933 Act. Institutional
investors generally will not seek to sell these instruments to the general
public, but instead will often depend on an efficient institutional market in
which such unregistered securities can be readily be resold or on an issuer's
ability to honor a demand for repayment. Therefore, the fact that there are
contractual or legal restrictions on resale to the general public or certain
institutions is not dispositive of the liquidity of these investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. The Trust may invest in Rule 144A securities
which, as disclosed in the Prospectus, are restricted securities which may or
may not be readily marketable. Rule 144A securities are readily marketable if
institutional markets for the securities develop pursuant to Rule 144A and
provide both readily ascertainable values for the securities and the ability to
liquidate the securities when liquidation is deemed necessary or advisable.
However, an insufficient number of qualified institutional buyers interested in
purchasing a Rule 144A security held by the Fund could affect adversely the
marketability of the security. In such an instance, the Trust might be unable to
dispose of the security promptly or at a reasonable price.
Securities eligible for resale pursuant to Rule 144A will not be
subject to the Trust's limitations on investing in securities that are not
readily marketable, provided that the Manager determines that a liquid market
exists for such securities under guidelines adopted and monitored by the Trust's
Board of Trustees. In making this determination, the Manager will consider the
following factors, among others: (1) the unregistered nature of a Rule 144A
security; (2) the frequency of trades and quotes for the security; (3) the
number of dealers willing to purchase or sell the security and the number of
additional potential purchasers; (4) dealer undertakings to make a market in the
security; and (5) the nature of the security and the nature of market place
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfers).
Money Market Instruments
From time to time the Trust may purchase high quality, short-term debt
securities, commonly known as money market instruments. These securities include
U.S. Government securities, obligations of U.S. commercial banks and commercial
paper.
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U.S. Government securities include direct obligations of the U.S.
Government, which consist of bills, notes and bonds issued by the U.S. Treasury,
and obligations issued by agencies of the U.S. Government which, while not
direct obligations of the U.S. Government, are either backed by the full faith
and credit of the United States or are guaranteed by the U.S. Treasury or
supported by the issuing agency's right to borrow from the U.S. Treasury.
The obligations of U.S. commercial banks include certificates of
deposit and bankers' acceptances. Certificates of deposit are negotiable
interest-bearing instruments with a specific maturity. Certificates of deposit
are issued by banks in exchange for the deposit of funds and normally can be
traded in the secondary market prior to maturity. Bankers' acceptances typically
arise from short-term credit arrangements designed to enable businesses to
obtain funds to finance commercial transactions. Generally, an acceptance is a
time draft drawn on a bank by an exporter or importer to obtain a stated amount
of funds to pay for specific merchandise. The draft is then "accepted" by a bank
that, in effect, unconditionally guarantees to pay the face value of the
instrument on its maturity date. The acceptance may then be held by the
accepting bank as an earning asset or it may be sold in the secondary market at
the going rate of discount for a specific maturity. Although maturities for
acceptances can be as long as 270 days, most acceptances have maturities of six
months or less.
Commercial paper consists of short-term (usually from one to 270 days)
unsecured promissory notes issued by corporations to finance their current
operations. A variable amount master demand note (which is a type commercial
paper) represents a direct borrowing arrangement involving periodically
fluctuating rates of interest under a letter agreement between a commercial
paper issuer and an institutional lender pursuant to which the lender may
determine to invest in varying amounts.
Repurchase Agreements
The Trust may enter into repurchase agreements with financial
institutions, such as banks and broker-dealers, deemed by the Manager to be
creditworthy under criteria established by the Board of Trustees. A repurchase
agreement is a short-term investment in which the purchaser (i.e., the Trust)
acquires ownership of a debt security and the seller agrees to repurchase the
obligation at a future time and set price, usually not more than seven days from
the date of purchase, thereby determining the yield during the purchaser's
holding period. The value of underlying securities will be at least equal at all
times to the total amount of the repurchase obligation, including the interest
factor. The Trust makes payment for such securities only upon physical delivery
or evidence of book-entry transfer to the account of its custodian bank or its
agent. The underlying securities, which in the case of the Trust must be issued
by the U.S. Treasury, may have maturity dates exceeding one year. The Trust does
not bear the risk of a decline in value of the underlying securities unless the
seller defaults under its repurchase obligation. In the event of a bankruptcy or
other default of a seller of a repurchase agreement, the Trust could experience
both delays in liquidating the underlying securities and loss including (a)
possible decline in the value of the underlying security while the Trust seeks
to enforce its rights thereto, (b) possible subnormal levels of income and lack
of access to income during this period and (c) expenses of enforcing its rights.
INVESTMENT RESTRICTIONS
The Fund's and the Trust's investment programs are subject to a number
of restrictions that reflect self-imposed standards as well as regulatory
limitations. The investment restrictions recited below are in addition to those
described in the Prospectus. No investment restriction of the Fund prevents the
Fund from investing all of its investable assets in an open-end investment
company with substantially the same investment objective.
Investment restrictions which are designated as matters of fundamental
policy may only be changed with the approval of a "majority of the outstanding
voting securities" of the Fund or the Trust, as the case may be. Under the
1940 Act, the vote of a majority of the outstanding voting securities of a
company means the vote, at an annual or a special meeting of the security
holders of the company duly called, (i) of 67% or more of the voting securities
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present at such meeting, if the holders of more than 50% of the outstanding
voting securities of such company are present or represented by proxy; or (ii)
of more than 50% of the outstanding voting securities of such company, whichever
is the less.
The Fund and the Trust may not as a matter of fundamental policy:
(1) Issue senior securities, except as permitted under the 1940 Act.
(2) Effect short sales of securities or sell any security which it
does not own unless by virtue of its ownership of other securities it has, at
the time of sale, a right to obtain securities, without payment of further
consideration, equivalent in kind and amount to the securities sold and,
provided that if such right is conditional, the sale is made upon the same
conditions; or purchase securities on margin (but the Fund/Trust may obtain such
short-term credits as may be necessary for the clearance of transactions).
(3) Borrow money, except that the Fund/Trust may borrow money for
temporary or emergency purposes in an amount not exceeding 33 1/3% of the value
of its total assets (including the amount borrowed) less liabilities (other than
borrowings).
(4) Act as an underwriter of securities within the meaning of the
U.S. federal securities laws, except insofar as it might be deemed to be an
underwriter upon disposition of certain portfolio securities acquired within the
limitation on purchases of illiquid securities.
(5) Purchase or sell real estate, provided that the Fund/Trust may
invest in securities of companies in the real estate industry and may purchase
securities secured or otherwise supported by interests in real estate.
(6) Purchase or sell commodities or commodities contracts, provided
that the Fund/Trust may invest in financial futures and options on such futures.
(7) Make loans, except that the Fund/Trust may lend portfolio
securities in accordance with its investment policies and may enter into,
purchase or invest in repurchase agreements, debt instruments or other
securities, whether or not the purchase is made upon the original issuance of
the securities.
The Trust will invest more than 25% of its total assets in securities
issued by companies in the real estate industry. Except as noted in the previous
sentence, it is a fundamental policy of the Fund and the Trust not to
concentrate its investments in securities of companies in any particular
industry. Following the current opinion of the staff of the SEC, investments are
concentrated in a particular industry if such investments (but not investments
in U.S. Government securities) aggregate more than 25% of the Fund's/Trust's
total assets.
The Trust does not intend to invest in or to enter into financial
futures contracts or purchase options on such futures or to lend portfolio
securities during the current fiscal year.
The following investment restrictions are not fundamental policies and
may be changed by the Company's Board of Directors or by the Trust's Board of
Trustees without shareholder approval. The Fund and the Trust will not as a
matter of operating policy:
(1) Borrow money, except that the Fund/Trust may borrow money for
temporary or emergency purposes in an amount not exceeding 10% of the value of
its total assets at the time of such borrowing, provided that, while borrowings
by the Fund/Trust equaling 5% or more of its total assets are outstanding, the
Fund/Trust will not purchase securities for investment.
(2) Invest in shares of any other investment company registered under
the 1940 Act, except as permitted by federal law.
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(3) Invest for the purpose of exercising control or management.
(4) Invest more than 10% of the its total assets in foreign
securities.
(5) Invest more than 20% of its total assets in any one issuer.
PORTFOLIO TRANSACTIONS AND BROKERAGE
The Manager is responsible for decisions to buy and sell securities
for the Trust, for the selection of brokers and dealers to execute securities
transactions and for negotiation of commission rates. Purchases and sales of
securities on a securities exchange will be effected through broker-dealers
which charge a commission for their services. The Manager may direct purchase
and sale orders to any registered broker-dealer. In the over-the-counter market,
transactions are effected on a "net" basis with dealers acting as principal for
their own accounts without charging a stated commission, although the price of
the security usually includes a profit to the dealer based on the spread between
the bid and asked price for the security. The prices of securities purchased
from underwriters include a commission or concession paid by the issuer to the
underwriter. On occasion, certain money market instruments may be purchased
directly from an issuer without payment of a commission or concession.
The Manager's primary consideration in effecting securities
transactions is to obtain the most favorable execution of orders on an overall
basis. As described below, the Manager may, in its discretion, effect agency
transactions with broker-dealers that furnish statistical, research or other
information or services that are deemed by the Manager to be beneficial to the
Trust's investment program. Certain research services furnished by broker-
dealers may be useful to the Manager with clients other than the Trust.
Similarly, any research services received by the Manager through placement of
portfolio transactions of other clients may be of value to the Manager in
fulfilling its obligations to the Trust. No specific value can be determined for
research and statistical services furnished without cost to the Manager by a
broker-dealer. The Manager is of the opinion that because the material must be
analyzed and reviewed by its staff, its receipt does not tend to reduce
expenses, but may be beneficial in supplementing the Manager's research and
analysis. Therefore, it may tend to benefit the Trust by improving the Manager's
investment advice.
The Manager's policy is to pay a broker-dealer commissions for
particular transactions that are higher than might be charged if a different
broker-dealer had been chosen when, in the Manager's opinion, this policy
furthers the overall objective of obtaining the most favorable execution. The
Manager is also authorized to pay broker-dealers higher commissions on brokerage
transactions for the Trust in order to secure research and investment services
described above.
The Manager manages other investment accounts. It is possible that,
at times, identical securities will be acceptable for the Trust and one or more
of such other accounts; however, the position of each account in the securities
of the same issuer may vary and the length of time that each account may choose
to hold its investment in such securities may likewise vary. The timing and
amount of purchase by each account will also be determined by its cash position.
If the purchase or sale of securities consistent with the investment policies of
the Trust or one or more of these accounts is considered at or about the same
time, transactions in such securities will be allocated among the accounts in a
manner deemed equitable by the Manager.
The allocation of orders among broker-dealers and the commission rates
paid by the Trust will be reviewed periodically by the Board of Trustees. The
foregoing policy under which the Trust may pay higher commissions to certain
broker-dealers in the case of agency transactions does not apply to transactions
effected on a principal basis.
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VALUATION OF PORTFOLIO SECURITIES
The Fund's net asset value per share is determined daily as of the
close of regular trading hours on the New York Stock Exchange (the "NYSE"),
which is normally 4:00 p.m. (Eastern Time), each day on which the NYSE is
open for business (a "business day"). The NYSE is open for business on all
weekdays except for the following holidays: New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
Portfolio securities traded on a national exchange on the valuation
date are valued at the last quoted sale price. Exchange traded securities
for which there have been no reported sales on the valuation date and
securities traded primarily in the over-the-counter market are valued at
the last quoted bid prices. Securities or other assets for which market
quotations are not readily available are valued at their fair value as
determined in good faith under procedures established and monitored by the
Trust's Board of Trustees. These procedures may include the use of an
independent pricing service which calculates prices based upon yields or
prices of securities of comparable quality, coupon, maturity and type;
indications as to value from dealers; and general market conditions. Debt
obligations with maturities of 60 days or less are valued at amortized
cost. The net asset values of the Retail Class shares and Institutional
Class shares will differ to the extent different fees and expenses are
applicable to each class.
REDEMPTION OF SHARES
The Company may suspend the right of redemption or postpone the date
of payment during any period when (a) trading on the NYSE is restricted by
applicable rules and regulations of the SEC; (b) the NYSE is closed for
other than customary weekend and holiday closings; (c) the SEC has by order
permitted such suspension; or (d) an emergency exists as determined by the
SEC so that valuation of the net assets of the Fund is not reasonably
practicable.
Under normal circumstances, the Company will redeem shares by check as
described in the Prospectus. However, if the Board of Directors determines
that it would be in the best interests of the remaining shareholders to
make payment of the redemption price in whole or in part by a distribution
in kind of portfolio securities in lieu of cash, in conformity with
applicable rules of the SEC, the Company will make such distributions in
kind. If shares are redeemed in kind, the redeeming shareholder will incur
brokerage costs in later converting the assets into cash. The method of
valuing portfolio securities is described under "Valuation of Portfolio
Securities" and such valuation will be made as of the same time the
redemption price is determined. The Company and the Trust have elected to
be governed by Rule 18f-1 under the 1940 Act pursuant to which the Company
and the Trust are each obligated to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund/Trust during
any 90-day period for any one shareholder.
The Trust has agreed to make a redemption in kind to the Fund whenever
the Company wishes to make redemption in kind and therefore shareholders of
the Fund that receive redemptions in kind will receive portfolio securities
of the Trust, and in no case will a redeeming shareholder of the Fund
receive a security issued by the Trust.
The Board of Directors of the Company may cause the redemption of a
Retail Class share account with a balance of less than $10,000, or an
Institutional Class share account with a balance of less than $250,000,
provided (1) the value of the account has been reduced for reasons other
than market action below the minimum initial investment in such shares at
the time the account was established, (2) the account has remained below
the minimum level for six months, and (3) 60 days' prior written notice of
the proposed redemption has been sent to the shareholder. Shares will be
redeemed at the net asset value on the date fixed for redemption by the
Board of Directors. Prompt payment will be made by mail to the last known
address of the shareholder.
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TAXATION
The following is only a summary of certain additional federal income
tax considerations generally affecting the Fund and its shareholders. No
attempt is made to present a detailed explanation of the federal, state or
local tax treatment of the Fund or its shareholders, and the discussion
here and in the Fund's Prospectus is not intended as a substitute for
careful tax planning.
The following discussion of federal income tax consequences is based
on the Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations issued thereunder as in effect on the date of this Statement of
Additional Information. New legislation, as well as administrative changes
or court decisions, may significantly change the conclusions expressed
herein, and may have a retroactive effect with respect to the transactions
contemplated herein.
The Fund expects to qualify as a regulated investment company ("RIC")
under Subchapter M of the Code. In order to qualify as a RIC for any
taxable year, the Fund must derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans and
gains from the sale or other disposition of stock, securities or foreign
currencies and other income (including, but not limited to, gains from
options, futures or forward contracts) derived with respect to its business
of investing in such stock, securities or currencies (the "Income
Requirement"). In addition, at the close of each quarter of the Fund's
taxable year, (1) at least 50% of the value of its assets must consist of
cash and cash items, U.S. Government securities, securities of other RICs,
and securities of other issuers (as to which the Fund has not invested more
than 5% of the value of its total assets in securities of such issuer and
as to which the Fund does not hold more than 10% of the outstanding voting
securities of such issuer), and (2) no more than 25% of the value of its
total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other RICs), or in two or
more issuers that the Fund controls and that are engaged in the same or
similar trades or businesses or related trades or businesses (the "Asset
Diversification Test"). Generally, the Fund will not lose its status as a
RIC if it fails to meet the Asset Diversification Test solely as a result
of a fluctuation in value of portfolio assets not attributable to a
purchase.
Under Subchapter M of the Code, the Fund is exempt from federal income
tax on its taxable net investment income and net capital gains that it
distributes to shareholders, provided generally that it distributes at
least 90% of its investment company taxable income (net investment income
and the excess of net short-term capital gains over net long-term capital
loss) for the year (the "Distribution Requirement") and complies with the
other requirements of the Code described above. The Distribution
Requirement for any year may be waived if a RIC establishes to the
satisfaction of the Internal Revenue Service that it is unable to satisfy
the Distribution Requirement by reason of distributions previously made for
the purpose of avoiding liability for federal excise tax (discussed below).
If for any taxable year the Fund does not qualify as a RIC, all of its
taxable income will be subject to tax at regular corporate rates without
any deduction for distributions to shareholders, and such distributions
generally will be taxable as ordinary dividends to the extent of the Fund's
current and accumulated earnings and profits. However, in the case of
corporate shareholders, such distributions generally will be eligible for
the 70% dividends received deduction for "qualifying dividends".
The Code imposes a nondeductible 4% excise tax on RICs that do not
distribute in each calendar year an amount equal to 98% of their ordinary
income for the calendar year plus 98% of their capital gains net income for
the one-year period ending on October 31 of such calendar year. The balance
of such income must be distributed during the next calendar year. For the
foregoing purposes, a RIC will include in the amount distributed any amount
taxed to the RIC as investment company taxable income or capital gains for
any taxable year ending in such calendar year. The Fund intends to make
sufficient distributions of its ordinary income and capital gains net
income prior to the end of each calendar year to avoid liability for excise
tax. However, the Fund may in certain circumstances be required to
liquidate portfolio investments in order to make sufficient distributions
to avoid excise tax liability.
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The Fund will invest all of its investable assets in the Trust. As a
partnership, the Trust will not be subject to federal income or excise
taxes under the Code. Instead, the Fund and other investors in the Trust
must take into account, in computing their federal tax liability, their
proportionate share of the Trust's income, gain, losses, deductions,
credits and tax preference items, without regard to whether they have
received any cash distributions from the Trust. In addition, the Fund will
be deemed to own a proportionate share of the Trust's assets and income for
the purpose of determining whether the Fund qualifies as a regulated
investment company. Accordingly, the Trust intends to conduct its
operations so that the Fund will be able to satisfy applicable tax
requirements.
If the Trust acquires stock in certain non-U.S. corporations ("passive
foreign investment companies" or "PFICs") that receive at least 75% of
their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gains) or at least 50% of whose
average assets produce or are held for the production of such passive
income, the Fund indirectly through its interest in the Trust could be
subject to federal income tax and additional interest charges on "excess
distributions" received from such companies or gain from the sale of stock
in such companies, even if the Fund distributes its share of the PFIC
income as a taxable dividend to its shareholders. A certain election
(treating the PFIC as a "qualified electing fund") filed with the Fund's
federal income tax return may, if available, ameliorate these adverse tax
consequences, but any such election would require the Fund to recognize
ordinary taxable income and net capital gain of the PFIC without the
corresponding receipt of cash which may need to be distributed by the
Company to satisfy the Distribution Requirement.
Pursuant to proposed regulations, open-end regulated investment
companies such as the Fund would be entitled to avoid the tax consequences
described in the preceding paragraph by electing to mark-to-market their
stock in certain PFICs. Marking to market in this context means recognizing
as gain for each taxable year the excess, as of the end of that year, of
the fair market value of each PFIC's stock over the owner's adjusted basis
in that stock (including mark-to-market gains of a prior year for which an
election was in effect). Making the election could result in the
recognition of gain without the corresponding receipt of cash which may
need to be distributed by the Company to satisfy the Distribution
Requirement.
Distributions received by the Fund from the Trust generally will not
result in the Fund recognizing any gain or loss for federal income tax
purposes, except that (i) gain will be recognized to the extent that any
cash distributed exceeds the Fund's basis in its interest in the Trust
prior to the distribution; (ii) income or gain may be realized if the
distribution is made in liquidation of the Fund's entire interest in the
Trust and includes a disproportionate share of any unrealized receivables
held by the Trust; and (iii) loss may be recognized if the distribution is
made in liquidation of the Fund's entire interest in the Trust and consists
solely of cash and/or unrealized receivables. The Fund's basis in its
interest in the Trust generally will equal the amount of cash and the basis
of any property which the Fund invests in the Trust, increased by the
Fund's share of income from the Trust, and decreased by the amount of any
cash distributions and the basis of any property distributed from the
Trust.
Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long the
shareholder has held the Fund's shares and regardless of whether the
distribution is received in additional shares or in cash. Capital gains
distributions are not eligible for the dividends received deduction. It is
expected that the Treasury will issue regulations or other guidance to
permit shareholders to take into account their proportionate share of the
Fund's capital gains distributions that will be subject to a reduced tax
rate under the Taxpayer Relief Act of 1997. The Taxpayer Relief Act reduces
the maximum tax on long-term capital gains from 28% to 20%; however, it
also generally lengthens the holding period required to obtain the lower
rate from more than one year to more than 18 months. The lower rates do not
apply to collectibles and certain other assets. Additionally, the maximum
capital gain rate for assets that are held more than five years and that
are acquired after December 31, 2000 is 18%. Distributions of earnings and
profits of the Fund other than distributions of net long-term capital gains
are taxable to shareholders as ordinary income.
If capital gain distributions have been made with respect to shares of
the Fund that are sold at a loss after being held for six months or less,
then the loss is treated as a long-term capital loss to the extent of the
capital gain
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distributions. Any gain or loss recognized on a sale or redemption of
shares of the Fund by a shareholder who is not a dealer in securities
generally will be treated as a long-term capital gain or loss if the shares
have been held for more than twelve months and otherwise generally will be
treated as a short-term capital gain or loss.
The Fund will be required in certain cases to withhold and remit to
the U.S. Treasury 31% of distributions payable to any shareholder who (i)
has provided the Fund either an incorrect tax identification number or no
number at all, (ii) is subject to backup withholding by the Internal
Revenue Service for failure to properly report payments of interest or
dividends, or (iii) has failed to certify to the Company that such
shareholder is not subject to backup withholding.
Rules of state and local taxation of dividend and capital gains
distributions from RICs often differ from the rules for federal income
taxation described above. Shareholders are urged to consult their tax
advisors as to the consequences of these and other state and local tax
rules affecting an investment in the Fund and also as to the application of
the rules set forth above to a shareholder's particular circumstances.
MANAGEMENT
Directors and Officers of the Company
The Board of Directors of the Company consists of seven directors. The
directors and officers of the Company, their ages and their principal
occupations during the last five years are set forth below. Each director
who is an "interested person" of the Company (as defined in the 1940 Act)
is indicated by an asterisk (*).
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS AGE WITH REGISTRANT DURING PAST FIVE YEARS
- ---------------- --- ---------------- -----------------------
<S> <C> <C> <C>
Bruce D. Alexander 54 Director Adjunct Professor, Yale University
5062 Whetstone Road School of Mangement; Senior
Columbia, MD 21044 Vice President and Director of
New Business, The Rouse
Company
Lawrence S. Bacow 46 Director Professor, Massachusetts Institute
75 Summit of Technology
Newton, MA 02158
Richard A. Dobbins 52 Director President, Historical Data Systems,
520 Washington Street Inc.; President, Municipal Market
Duxbury, MA 02331 Data, Inc.
John W. McCarter, Jr. 59 Director President and Chief Executive
The Field Museum Officer of The Field Museum;
1200 South Lake Shore Drive Senior Vice President of Booz,
Chicago, IL 60605 Allen & Hamilton, Inc.
Lynn C. Thurber* 50 Director Director, LaSalle Partners
200 East Randolph Drive Incorporated; Co-President,
Chicago, IL 60601 LaSalle Advisors Capital
Management, Inc.; Managing
Director, LaSalle Advisors Limited
Partnership; Chief Executive
Officer of ABKB/LaSalle
Securities Limited; Chief
Operating Officer and Director of
Acquisitions, ABKB/LaSalle
Securities Limited
William K. Morrill, Jr.* 60 Director; President Managing Director, ABKB/
100 East Pratt Street LaSalle Securities Limited
Baltimore, MD 21202
Keith R. Pauley* 36 Director; Executive Managing Director/Portfolio
100 East Pratt Street Vice President Manager, ABKB/LaSalle
Baltimore, MD 21202 Securities Limited
Stephen A. Smith 39 Senior Vice President Managing Director, Private Capital
200 East Randolph Drive Secretary of LaSalle Advisors Limited
Chicago, IL 60601 Partnership
Audre' J. Melsbakas 34 Senior Vice President Principal, LaSalle Partners
200 East Randolph Drive Assistant Secretary Incorporated; Associate, The
Chicago, IL 60601 Keystone Group
James A. Ulmer, III 58 Vice President Vice President, ABKB/LaSalle
100 East Pratt Street Securities Limited; Principal,
Baltimore, MD 21202 AIRES Real Estate Services;
Chairman and President, Enoch
Pratt Free Library
William E. Sullivan 42 Treasurer Executive Vice President, Chief
200 East Randolph Drive Financial Officer and Director of
Chicago, IL 60601 LaSalle Partners Incorporated;
Executive Vice President and
Chief Financial Officer of LaSalle
Partners' predecessor partnerships;
Managing Director of the special
projects group of LaSalle Partners'
predecessor partnerships; Senior
Vice President of the special
projects group of LaSalle Partners'
predecessor partnerships
Denise M. Ruth 26 Assistant Secretary Operations Manager, ABKB/
100 East Pratt Street LaSalle Securities Limited;
Baltimore, MD 21202 Assistant Accountant, T. Rowe
Price, Inc.
</TABLE>
The Company's Articles of Incorporation require the Company to
indemnify its directors and officers to the full extent permitted by
Maryland law. Nothing in the charter or bylaws of the Company protects any
director or officer against any liability to the Company or its
shareholders to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.
The officers and directors of the Company who are "interested persons"
of the Company within the meaning of the 1940 Act do not receive
compensation directly from the Company for serving in the capacities
described above. However, those officers and directors who are affiliated
with the Manager may receive remuneration indirectly from the Company for
services provided in their respective capacities with the Manager. Each of
the non-interested directors is expected to receive for his service on the
Board of Directors an annual fee, plus reimbursement for out-of-pocket
expenses incurred in connection with attendance at board meetings. The
following table sets forth the information concerning the compensation
anticipated to be paid by the Company to directors in the current fiscal
year. Neither the Company nor any investment company in the Fund Complex
offers any pension or retirement benefits to its directors or trustees.
B-10
<PAGE>
AGGREGATE COMPENSATION TOTAL COMPENSATION FROM THE
NAME OF DIRECTOR FROM THE COMPANY (1) COMPANY AND FUND COMPLEX (1)(2)
- ---------------- -------------------- -------------------------------
Bruce D. Alexander $6,000 $12,000
Lawrence S. Bacow $6,000 $12,000
Richard A. Dobbins $6,000 $12,000
John W. McCarter, Jr. $6,000 $12,000
William K. Morrill, Jr. -- --
Keith R. Pauley -- --
Lynn C. Thurber -- --
(1) The Company commenced operations in January, 1998. The amounts
indicated are estimates of the compensation expected to be paid to
directors of the Company during the Company's first fiscal year ending
November 30, 1998.
(2) As of the date hereof, the "Fund Complex" consisted of the Company and
the Trust (which also commenced operations in January, 1998).
As of the date of this Statement of Additional Information, the
officers, directors and trustees of the Company and the Trust, as a group,
owned of record and beneficially less than 1% of the outstanding shares of
the Fund.
Trustees and Officers of the Trust
The Board of Trustees of the Trust consists of seven trustees. The
trustees and officers of the Trust, their ages and their principal
occupations during the last five years are set forth below. Each trustee
who is an "interested person" of the Trust (as defined in the 1940 Act) is
indicated by an asterisk (*).
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS AGE WITH REGISTRANT DURING PAST FIVE YEARS
- ---------------- --- ---------------- -----------------------
<S> <C> <C> <C>
Bruce D. Alexander 54 Director Adjunct Professor, Yale University
5062 Whetstone Road School of Mangement; Senior
Columbia, MD 21044 Vice President and Director of
New Business, The Rouse
Company
Lawrence S. Bacow 46 Director Professor, Massachusetts Institute
75 Summit of Technology
Newton, MA 02158
Richard A. Dobbins 52 Director President, Historical Data Systems,
520 Washington Street Inc.; President, Municipal Market
Duxbury, MA 02331 Data, Inc.
John W. McCarter, Jr. 59 Director President and Chief Executive
The Field Museum Officer of The Field Museum;
1200 South Lake Shore Drive Senior Vice President of Booz,
Chicago, IL 60605 Allen & Hamilton, Inc.
Lynn C. Thurber* 50 Director Director, LaSalle Partners
200 East Randolph Drive Incorporated; Co-President,
Chicago, IL 60601 LaSalle Advisors Capital
Management, Inc.; Managing
Director, LaSalle Advisors Limited
Partnership; Chief Executive
Officer of ABKB/LaSalle
Securities Limited; Chief
Operating Officer and Director of
Acquisitions, ABKB/LaSalle
Securities Limited
William K. Morrill, Jr.* 60 Director; President Managing Director, ABKB/
100 East Pratt Street LaSalle Securities Limited
Baltimore, MD 21202
Keith R. Pauley* 36 Director; Executive Managing Director/Portfolio
100 East Pratt Street Vice President Manager, ABKB/LaSalle
Baltimore, MD 21202 Securities Limited
Stephen A. Smith 39 Senior Vice President Managing Director, Private Capital
200 East Randolph Drive Secretary of LaSalle Advisors Limited
Chicago, IL 60601 Partnership
Audre' J. Melsbakas 34 Senior Vice President Principal, LaSalle Partners
200 East Randolph Drive Assistant Secretary Incorporated; Associate, The
Chicago, IL 60601 Keystone Group
James A. Ulmer, III 58 Vice President Vice President, ABKB/LaSalle
100 East Pratt Street Securities Limited; Principal,
Baltimore, MD 21202 AIRES Real Estate Services;
Chairman and President, Enoch
Pratt Free Library
William E. Sullivan 42 Treasurer Executive Vice President, Chief
200 East Randolph Drive Financial Officer and Director of
Chicago, IL 60601 LaSalle Partners Incorporated;
Executive Vice President and
Chief Financial Officer of LaSalle
Partners' predecessor partnerships;
Managing Director of the special
projects group of LaSalle Partners'
predecessor partnerships; Senior
Vice President of the special
projects group of LaSalle Partners'
predecessor partnerships
Denise M. Ruth 26 Assistant Secretary Operations Manager, ABKB/
100 East Pratt Street LaSalle Securities Limited;
Baltimore, MD 21202 Assistant Accountant, T. Rowe
Price, Inc.
</TABLE>
Code of Ethics
The Board of Directors of the Company and the Board of Trustees of the
Trust have adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940
Act. The Code of Ethics applies to the personal investing activities of all
directors/trustees and officers of the Company and the Trust, as well as to
designated officers, directors and employees of the Manager and the
Distributor. As described below, the Code of Ethics imposes significant
restrictions on the Manager's investment personnel, including the portfolio
managers and employees who execute or help execute a portfolio manager's
decisions or who obtain contemporaneous information regarding the purchase
or sale of a security by the Trust.
The Code of Ethics requires that covered employees of the Manager, and
all Company directors and Trust trustees who are "interested persons",
preclear personal securities investments (with certain exceptions, such as
non-volitional purchases or purchases that are part of an automatic
dividend reinvestment plan). The preclearance requirement and associated
procedures are designed to identify any substantive prohibition or
limitation applicable to the proposed investment. The substantive
restrictions applicable to investment personnel include a ban on acquiring
any securities in an initial public offering, a prohibition from profiting
on short-term trading in securities and special preclearance of the
acquisition of securities in private
B-11
<PAGE>
placements. Furthermore, the Code of Ethics provides for trading "blackout
periods" that prohibit trading by investment personnel and certain other
employees within periods of trading by the Trust in the same security.
Officers, directors and employees of the Manager and the Distributor may
comply with codes instituted by those entities so long as they contain
similar requirements and restrictions.
INVESTMENT MANAGER
The Board of Directors of the Company has approved a Management
Agreement between the Company and the Manager. Under the agreement, the
Manager monitors the operations of the Fund. The Manager receives no fee
for providing these monitoring services. In the event the Company's Board
of Directors determines that it is in the best interests of the Fund's
shareholders to withdraw its investment in the Trust, the Manager would
become responsible for directly managing the assets of the Fund. In such
event, the Manager would be entitled to receive an investment management
fee, accrued daily and paid monthly, at the annual rate of 0.75% of the
Fund's average net assets.
The Management Agreement will remain in effect for two years from the
date of its initial execution and from year to year thereafter, so long as
such continuance is specifically approved at least annually by the Board of
Directors of the Company or by vote of a majority of the outstanding voting
securities of the Fund (as defined in the 1940 Act) and by the vote of a
majority of the directors who are not parties to the agreement or
"interested persons" of any such party (as defined in the 1940 Act), cast
in person at a meeting called for the purpose of voting on such approval.
The Management Agreement may be terminated by either the Company or the
Manager on 60 days' written notice. It will terminate automatically in the
event of its assignment (as defined by the 1940 Act).
The Manager serves as the Trust's investment manager pursuant to an
Investment Management Agreement with the Trust. Under the agreement, the
Manager manages the Trust's investments subject to the supervision and
direction of the Board of Trustees of the Trust. The Manager is
responsible for providing a continuous investment program for the Trust,
including the provision of investment research and management with respect
to all securities and investments and cash equivalents purchased, sold or
held in the Trust and the selection of brokers-dealers through which
securities transactions for the Trust will be executed. In carrying out
its responsibilities, the Manager is required to act in conformance with
the Trust's Agreement and Declaration of Trust, the 1940 Act and the
Investment Advisers Act of 1940, as amended.
The Manager bears all expenses in connection with the performance of
services under its agreements with the Company and the Trust. Each of the
Company and the Trust bear certain other expenses incurred in its
operation, including: (i) the charges and expenses of any registrar, share
transfer or dividend disbursing agent, custodian or depository appointed
for the safekeeping of the Trust's cash, portfolio securities and other
property; (ii) the charges and expenses of auditors; (iii) brokerage
commissions for transactions in the portfolio securities of the Trust; (iv)
all taxes, including issuance and transfer taxes, and fees payable by the
Company/Trust to federal, state or other governmental agencies; (v) the
cost of share certificates representing shares of the Company/Trust, (vi)
fees involved in registering and maintaining registrations of the
Company/Trust and of the Fund's shares with the SEC and various states and
other jurisdictions; (vii) all expenses of shareholders' and
directors'/trustees' meetings and of preparing, printing and mailing proxy
statements, semi-annual and annual reports, and other communications
(including prospectuses) to existing shareholders; (viii) compensation and
travel expenses of directors/trustees who are not "interested persons"
within the meaning of the 1940 Act; (ix) the expense of furnishing or
causing to be furnished to each
B-12
<PAGE>
shareholder a statement of account, including the expense of mailing; (x)
charges and expenses of legal counsel in connection with matters relating
to the Company/Trust; (xi) membership or association dues for the
Investment Company Institute or similar organizations; (xii) interest
payable on Company/Trust borrowings; and (xiii) postage.
ADMINISTRATOR
PFPC Inc. (the "Administrator"), 103 Bellevue Parkway, Wilmington,
Delaware 19809, a Delaware corporation which is an indirect wholly-owned
subsidiary of PNC Financial Corp., serves as the administrator for both the
Fund and the Trust. Pursuant to Administration Agreements between the
Administrator and the Company and the Trust, respectively, the
Administrator has agreed to provide certain fund accounting and
administrative services to the Fund and the Trust, including among other
services, accounting relating to the Fund and the Trust and the investment
transactions of the foregoing; computing daily net asset values; monitoring
the investments and income of the Fund and the Trust for compliance with
applicable tax laws; preparing for execution and filing federal and state
tax returns, and semi-annual and annual shareholder reports; preparing
monthly financial statements including a schedule of investments; assisting
in the preparation of registration statements and other filings related to
the registration of shares; coordinating contractual relationships and
communications between the Manager and the Fund's and the Trust's
custodian; preparing and maintaining the Fund's and the Trust's books of
account, records of securities transactions, and all other books and
records in accordance with applicable laws, rules and regulations
(including, but not limited to, those records required to be kept pursuant
to the 1940 Act); and performing such other duties related to the
administration of the Fund and the Trust as may be agreed upon in writing
by the parties to the respective agreements.
Compensation for the services and facilities provided by the
Administration Agreements includes payment of the Administrator's out-of-
pocket expenses. The Administrator's reimbursable out-of-pocket expenses
include, but are not limited to, postage and mailing, telephone, telex,
Federal Express, independent pricing service charges and record
retention/storage.
Because the Fund and the Trust will commence operations in January
1998, neither the Fund nor the Trust have paid any fees to the Administrator as
of the date of this Statement of Additional Information. The Administration
Agreements will continue in effect until terminated by either party on 60 days'
prior written notice to the other party.
DISTRIBUTION ARRANGEMENTS
Distributor
Funds Distributor, Inc. (the "Distributor"), located at 60 State
Street, Suite 1300, Boston, Massachusetts 02109, serves as the principal
underwriter and distributor for the Fund's shares pursuant to a
Distribution Agreement with the Company. The Distribution Agreement was
initially approved by the Board of Directors of the Company. The
Distributor is a registered broker-dealer and a member of the National
Association of Securities Dealers, Inc. The Distributor is an indirect
wholly-owned subsidiary of Boston Institutional Group, Inc., a holding
company all of whose outstanding shares are owned by key employees.
The Distributor offers shares of the Fund continuously and has agreed
to use its best efforts to solicit purchase orders for shares. Retail
Class shares are sold by securities dealers and other financial services
firms which have executed sales agreements with the Distributor. The
Distributor is not obligated to sell any specific amount of shares of the
Fund. The Distributor bears all expenses of providing services pursuant to
the Distribution Agreement. The Fund bears the expenses of registering its
shares with the SEC and with applicable state regulatory authorities.
B-13
<PAGE>
The Distribution Agreement will remain in effect for two years from
the date of its initial execution and from year to year thereafter, so long
as such continuance is specifically approved at least annually by the Board
of Directors of the Company or by vote of a majority of the outstanding
voting securities of the Fund (as defined in the 1940 Act), and by the vote
of a majority of the directors who are not parties to the agreement or
"interested persons" of any such party (as defined in the 1940 Act), cast
in person at a meeting called for the purpose of voting on such approval.
The Distribution Agreement may be terminated by either the Company or the
Distributor on 60 days' written notice. It will terminate automatically in
the event of its assignment (as defined by the 1940 Act).
The Company and the Distributor reserve the right to reject any
purchase order and to suspend the offering of shares of the Fund. The
Company reserves the right to vary the initial investment minimums and to
impose minimums for additional investments in any of the classes of the
Fund's shares at any time. In addition, the Company may waive the minimum
investment requirements for any investor. The factors to be considered in
the waiver or variation of such minimum investments include, but are not
limited to, the relationship of the investor to the Company, the amount of
the proposed investment, and the type of investor.
Distribution Plan
The Company has adopted a Distribution Plan for the Retail Class of
the Fund (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan
provides for the payment of a distribution fee from the assets of the
Retail Class for activities primarily intended to result in the sale of
Retail Class shares, including advertising, compensation to dealers and the
preparation of sales literature. Distribution fees paid under the Plan may
not exceed 0.75% annually of the average net assets of the Retail Class, or
such lesser amount as may be specified by the Company's Board of Directors.
The Board of Directors has authorized payment of an annual distribution fee
of 0.25% to the Distributor and participating dealers who assist in the
distribution of Retail Class shares. The Distributor may use the fees paid
under the Plan and its other resources to pay expenses associated with
activities primarily intended to result in the sale of Retail Class shares.
Under the terms of the Plan, the Board of Directors of the Company receives
a quarterly written report of the amounts expended pursuant to the Plan and
the purposes for which such expenditures were made.
The Plan has been approved by the Board of Directors, including the
majority of the directors who are not "interested persons" of the Company
(as defined in the 1940 Act) and who do not have any direct or indirect
financial interest in the operation of the Plan. In approving the Plan, the
directors identified and considered a number of potential benefits which
the Plan may provide and determined that there is a reasonable likelihood
that the Plan will benefit the Retail Class and its shareholders.
The Plan is a compensation plan because the Distributor is paid a
fixed fee and is given discretion concerning what expenses are payable
under the Plan. The Distributor may spend more for marketing and
distribution than it receives in fees from the Retail Class. However, to
the extent fees received exceed expenses, including indirect expenses such
as overhead, the Distributor could be said to have received a profit. For
example, if the Distributor pays $1 for distribution related expenses and
receives $2 under the Plan, the $1 difference could be said to be a profit
for the Distributor. If after payments by the Distributor for marketing
and distribution there are any remaining fees which have been paid under
the Plan, they may be used as the Distributor may elect. Since the amounts
payable under the Plan will be commingled with the Distributor's general
funds, including the revenues it receives in the conduct of its business,
it is possible that certain of the Distributor's overhead expenses will be
paid out of distribution fees and that these expenses may include the costs
of leases, depreciation, communications, salaries, training and supplies.
The Plan will remain in effect from year to year only so long as such
continuance is specifically approved at least annually by a vote of the
Board of Directors of the Company, and of the directors who are not
"interested persons" of the Company (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on the Plan or such agreements. The Plan may be
terminated at any time by vote of a majority of the directors who are not
"interested persons" of the Company (as defined in the 1940 Act) and have
no direct or indirect financial interest in the operation of the Plan or in
any agreements related to the Plan, or by vote of a majority of the
outstanding voting securities of the Fund.
The Company will commence operations in January, 1998 and, as of the
date of this Statement of Additional Information, no fees have been paid
under the Plan.
B-14
<PAGE>
Shareholder Services Plan
The Company has adopted a Shareholder Services Plan for the Retail
Class of the Fund to compensate qualified recipients for individual
shareholder services and account maintenance. These functions include, but
are not limited to, answering shareholder questions and handling
correspondence, assisting customers, and account record keeping and
maintenance. For these services, the Fund may pay a qualified recipient a
shareholder services fee at an annual rate not exceeding 0.25% of average
net assets of the Retail Class attributable to its shareholder accounts, or
such lesser amount as may be specified by the Company's Board of Directors.
The Board of Directors has authorized payment of an annual shareholder
services fee of 0.15%.
PERFORMANCE INFORMATION
The Fund may compare its performance to other funds or to relevant
indices, such as the Wilshire Real Estate Index, the NAREIT Composite
Index, the NAREIT Equity Index, the S&P 500, the Russell 2000, the S&P
Utilities Index and the Lehman Brothers Fixed Income Index.
For purposes of quoting and comparing the performance of the Fund to
that of other open-end diversified management investment companies and to
stock or other relevant indices or averages in advertisements or in certain
reports to shareholders, performance will generally be stated both in terms
of total return and in terms of yield. However, the Fund may also from time
to time state its performance solely in terms of total return.
Total Return Calculations
The total return quotations, under the rules of the SEC, must be
calculated according to the following formula:
P(1 + T)(n) = ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years (1, 5 or 10)
ERV = ending redeemable value of the hypothetical
$1,000 payment made at the beginning of the
designated period (or fractional portion
thereof)
Under the foregoing formula, the time periods used in advertising will
be based on rolling calendar quarters, updated to the last day of the most
recent quarter prior to submission of the advertising for publication, and
will cover one-, five-, and ten-year periods or a shorter period dating
from the effectiveness of the Company's registration statement (or the
later commencement of operations of the Fund or class). In calculating the
ending redeemable value for a class of the Fund's shares, all dividends and
distributions by the Fund are assumed to have been reinvested at net asset
value as described in the Prospectus on the reinvestment dates during the
period. "T" in the formula above is calculated by finding the average
annual compounded rate of return over the period that would equate an
assumed initial payment of $1,000 to the ending redeemable value. Any sales
loads that might in the future be made applicable at the time to
investments or reinvestments would be included as would any recurring
account charges that might be imposed by the Fund.
The Company may also from time to time include in such advertising
total return figures that are not calculated according to the formulate set
forth above to compare more accurately the Fund's performance with other
measures of investment return. For example, in comparing the Fund's total
return with data published by Lipper Analytical
B-15
<PAGE>
Services, Inc., CDA/Weisenberger or Morningstar Inc., the Fund calculates
its aggregate and average annual total return for the specified periods of
time by assuming the investment of $10,000 in shares and assuming the
reinvestment of each dividend or other distribution at net asset value on
the reinvestment date.
Alternative total return information will be given no greater
prominence in such advertising than the information prescribed under SEC
rules, and all advertisements containing performance data will include a
legend disclosing that such performance data represent past performance and
that the investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
Yield Calculations
The yield of a class of Fund shares is computed by dividing the
class's net investment income per share during a base period of 30 days, or
one month, by the maximum offering price per share of the class on the last
day of such base period in accordance with the following formula:
YIELD = 2 [ (a - b + 1)/6/ - 1 ]
-----
cd
Where: a = net investment income earned during the period
attributable to the subject class
b = net expenses accrued for the period attributable
to the subject class
c = the average daily number of shares of the
subject class outstanding during the period that
were entitled to receive dividends
d = the maximum offering price per share of the
subject class
Net investment income will be determined in accordance with rules
established by the SEC.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 50 million Retail Class shares and
50 million Institutional Class shares of its LaSalle Partners U.S. Real
Estate Fund series of Common Stock, par value $.01 per share. The Board of
Directors may increase or decrease the number of authorized shares without
shareholder approval.
The Company's Articles of Incorporation provide for the establishment
of separate series and separate classes of shares by the Board of Directors
at any time. The Board has designated a single series of shares, the
LaSalle Partners U.S. Real Estate Fund, having two classes of shares:
Retail Class shares and Institutional Class shares. In the event additional
series are established, each series would be managed separately and
shareholders of each series would have an undivided interest in the net
assets of that series. For tax purposes, the series will be treated as
separate entities. Generally, each class of shares issued by a particular
series will be identical to every other class and expenses of the series
(other than any applicable distribution or shareholder services fees) would
be prorated between all classes of a series based upon the relative net
assets of that class.
All shares of the Fund, regardless of class, have equal rights with
respect to voting, except that the holders of a particular class of shares
are not entitled to vote on any matter which does not affect any interest
of that class. All classes of Fund shares vote together as a single class,
except as otherwise required by applicable law. Shareholders of the Fund do
not have cumulative voting rights, and therefore the holders of more than
50% of the outstanding shares voting together for election of directors may
elect all the members of the Board of Directors of the Company. In such
event, the remaining holders cannot elect any members of the Board of
Directors.
B-16
<PAGE>
There are no preemptive, conversion or exchange rights applicable to
any shares of the Fund. The outstanding shares are fully paid and non-
assessable. In the event of liquidation of the Fund or dissolution of the
Company, each share is entitled to its portion of the Fund's assets (or the
assets allocated to a separate series of shares if there is more than one
series) after all debts and expenses have been paid.
B-17
<PAGE>
FINANCIAL STATEMENTS
<PAGE>
LA SALLE PARTNERS FUNDS, INC.
LASALLE PARTNERS U.S. REAL ESTATE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 29, 1997
<TABLE>
<S> <C>
ASSETS:
Investment in LaSalle Partners Master Trust at Value (cost $100,000)
................................................................... $100,000
Prepaid State Registration Fees..................................... 29,710
Deferred Organization Expenses...................................... 95,063
--------
Total Assets...................................................... 224,773
--------
LIABILITIES:
Expenses Payable to the Manager..................................... 124,773
--------
NET ASSETS:........................................................... $100,000
========
NET ASSETS CONSIST OF:
Capital stock, par value $.01 per share, unlimited shares
authorized......................................................... $ 100
Additional paid-in capital.......................................... 99,900
--------
Total............................................................. $100,000
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER INSTITUTIONAL CLASS
SHARE
($99,000 / 9,900 shares outstanding)................................. $ 10.00
========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER RETAIL CLASS SHARE
($1,000 / 100 shares outstanding).................................... $ 10.00
========
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-2
<PAGE>
LA SALLE PARTNERS FUNDS, INC.
LASALLE PARTNERS U.S. REAL ESTATE FUND
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 29, 1997
1. ORGANIZATION
LaSalle Partners Funds, Inc. (the "Company"), a Maryland Corporation, is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company currently offering one
series: LaSalle Partners U.S. Real Estate Fund (the "Fund"). The Company has
not commenced operations except those relating to organizational matters and
the issuance of Institutional and Retail Class shares to LaSalle Partners Co-
investment, Inc., the Fund's sponsor, and the investment proceeds in LaSalle
Partners Master Trust U.S. Real Estate Portfolio (the "Portfolio"). The
investment in the Portfolio is valued at the aggregate net asset value of the
Portfolio multiplied by the Fund's proportionate share of the Portfolio.
2. SIGNIFICANT ACCOUNTING POLICIES
Organization expenses will be amortized on a straight line basis over a
period not to exceed five years from the commencement date of operations. In
the event LaSalle Partners Co-investment, Inc. redeems all or part of its
initial investment in shares of the Fund, the proceeds will be reduced by the
product of any unamortized organization expenses and the proportion of the
number of shares redeemed to the initial shares invested.
The initial state registration costs have been deferred and will be charged
to expense over the period that a benefit is expected to be realized.
3. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
The Company has entered into (1) a Management Agreement with ABKB/LaSalle
Securities Limited (the "Manager"), (2) Administration and Accounting and
Transfer Agency Services Agreements with PFPC Inc. under which PFPC Inc.
provides administration, accounting, and transfer agency services to the
Company pursuant to the Agreements, and (3) a Distribution Agreement with
Funds Distributor, Inc. ("FDI") under which FDI will distribute shares of the
Fund and provide information to shareholders.
F-3
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of LaSalle Partners Funds, Inc.:
We have audited the accompanying Statement of Assets and Liabilities of
LaSalle Partners Funds, Inc. (the "Fund") as of December 29, 1997. This
financial statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of LaSalle Partners Funds,
Inc. as of December 29, 1997 in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 29, 1997
F-4
<PAGE>
LA SALLE PARTNERS MASTER TRUST
U.S. REAL ESTATE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 29, 1997
<TABLE>
<S> <C>
ASSETS:
Cash ............................................................... $100,000
Deferred Organization Expenses...................................... 80,863
--------
Total Assets...................................................... 180,863
--------
LIABILITIES:
Organization Expenses Payable to the Manager........................ 80,863
--------
NET ASSETS:........................................................... $100,000
========
</TABLE>
The accompanying notes are an integral part of this financial statement.
F-5
<PAGE>
LA SALLE PARTNERS MASTER TRUST
U.S. REAL ESTATE PORTFOLIO
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 29, 1997
1. ORGANIZATION
LaSalle Partners Master Trust (the "Trust"), a Delaware Business Trust, is
registered under the Investment Company Act of 1940, as amended, as a
diversified open-end management investment company currently offering one
portfolio: U.S. Real Estate Portfolio (the "Portfolio"). The Trust has not
commenced operations except those relating to organizational matters and the
sale of beneficial interest in the amount of $100,000 to the LaSalle Partners
U.S. Real Estate Fund (the "Fund").
2. SIGNIFICANT ACCOUNTING POLICIES
Organization expenses will be amortized on a straight line basis over a
period not to exceed five years from the commencement date of operations. The
Fund will reimburse the Portfolio for any unamortized organization expenses
upon the withdrawal of any initial beneficial interest. The amount to be
reimbursed will be determined by the proportion of the amount of initial
beneficial interest withdrawn to the initial beneficial interest after taking
into account any prior withdrawals of such initial beneficial interest.
The value of an investor's beneficial interest in the Portfolio is equal to
the product of the aggregate net asset value of the Portfolio and the
percentage representing that investor's share of the aggregate beneficial
interest in the Portfolio effective for that day.
3. INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
The Trust has entered into an Investment Management Agreement with
ABKB/LaSalle Securities Limited (the "Manager") and an Administration and
Accounting Services Agreement with PFPC Inc. under which PFPC Inc. provides
administration and accounting services to the Trust pursuant to the
Agreements.
F-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Investors and Board of Trustees
of LaSalle Partners Master Trust:
We have audited the accompanying Statement of Assets and Liabilities of
LaSalle Partners Master Trust (the "Trust") as of December 29, 1997. This
financial statement is the responsibility of the Trust's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of LaSalle Partners Master
Trust as of December 29, 1997 in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 29, 1997
F-7
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial statements:
Included in Parts A and B:
Statement of Assets and Liabilities of the Registrant at
December 29, 1997.
Notes to Statement of Assets and Liabilities.
Report of Independent Accountants.
Statement of Assets and Liabilities of LaSalle Partners Master
Trust at December 29, 1997.
Notes to Statement of Assets and Liabilities.
Report of Independent Accountants.
Included in Part C:
Consent of Independent Accountants.
All other financial statements, schedules and historical financial
information are omitted because the conditions requiring their filing do not
exist.
(b) Exhibits:
(1) (a) Articles of Incorporation of the Registrant.*
(b) Articles of Amendment of the Registrant.*
(c) Articles Supplementary of the Registrant.*
(2) By-Laws of the Registrant.*
(3) Not applicable.
(4) Not applicable.
(5) Management Agreement between the Registrant and
ABKB/LaSalle Securities Limited.*
(6) Distribution Agreement between the Registrant and Funds
Distributor, Inc.*
(7) Not applicable.
(8) Custodian Services Agreement between the Registrant and
PNC Bank, National Association.*
(9) (a) Administration and Accounting Services Agreement between
the Registrant and PFPC Inc.*
(b) Transfer Agency Services Agreement between the Registrant
and PFPC Inc.*
(c) License Agreement between LaSalle Partners Incorporated
and the Registrant.*
(10) Opinion and Consent of Piper & Marbury L.L.P.*
<PAGE>
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Initial Capital Agreement.*
(14) Not applicable.
(15) (a) Distribution Plan.*
(b) Shareholder Services Plan.*
(16) Not applicable.
(17) Not applicable.
(18) Multiple Class Plan.*
* Previously filed
Item 25. Persons Controlled by or Under Common Control with Registrant
The Registrant invests all of its investable assets in LaSalle Partners
Master Trust (the "Trust"), a separate investment company registered under the
Investment Company Act of 1940 and may be deemed to control the Trust. The
Registrant is not under common control with any person.
Item 26. Number of Holders of Securities
Title of Series/Class Number of Record Holders*
--------------------- ------------------------
LaSalle Partners U.S. Real
Estate Fund
Retail Class 1
Institutional Class 1
* As of January 27, 1998.
Item 27. Indemnification
Reference is made to Article Eighth, Section 5 of the Articles of
Incorporation and Article VII of the By-Laws of the Registrant filed as Exhibits
1 and 2, respectively.
Insofar as indemnification for liability 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 the Act and is,
therefore, unenforceable. In the event that a claim for indemnification 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 the Act and will be governed by the final adjudication of
such issue.
C-2
<PAGE>
Item 28. Business and Other Connections of Investment Adviser
A description of the directors and officers of the Registrant's investment
adviser and other required information is incorporated herein by reference to
the Form ADV and schedules thereto of ABKB/LaSalle Securities Limited, as
amended, filed (File No. 801-48201) with the Securities and Exchange Commission
under the Investment Advisers Act of 1940.
Item 29. Principal Underwriters
(a) Funds Distributor, Inc. services as principal underwriter and
distributor for shares of the Registrant. Funds Distributor, Inc. also acts as
distributor for:
BJB Investment Funds
Burridge Funds
The Brinson Funds
Harris Insight Funds Trust
HT Insight Funds, Inc., d/b/a Harris Insight Funds
The JPM Advisor Funds
The JPM Institutional Funds
The JPM Pierpont Funds
The JPM Series Trust
The JPM Series Trust II
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
Orbitex Group of Funds
The PanAgora Institutional Funds
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Cash Management Fund, Inc.
WEBS Index Fund, Inc.
(b) The executive officers and directors of Funds Distributor, Inc.
are as follows:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with the Registrant
- --------------------------- ---------------------------- ---------------------
<S> <C> <C>
Marie E. Connolly Director, President and None
Chief Executive Officer
Richard W. Ingram Executive Vice President None
Donald R. Roberson Executive Vice President None
Alan B. Closser Senior Vice President None
</TABLE>
C-3
<PAGE>
Michael S. Petrucelli Senior Vice President None
Joseph F. Tower, III Director, Senior Vice None
President, Treasurer and
Chief Financial Officer
Paula R. David Senior Vice President None
Bernard A. Whalen Senior Vice President None
William J. Nutt Director None
William J. Nichols Excutive Vice President None
* 60 State Street, Suite 1300, Boston, Massachusetts 02109.
(c) Not applicable.
Item 30. Location of Accounts and Records
The Registrant maintains the records required by Section 31(a) of
the Investment Company Act of 1940, as amended, and Rules 31a-1, 31a-2 and 31a-3
thereunder at its principal office located at 100 East Pratt Street, Baltimore,
Maryland 21202. Certain records, including records relating to the Registrant's
shareholders, may be maintained pursuant to Rule 31a-3 at the offices of the
Registrant's transfer agent, PFPC Inc., located at 103 Bellevue Parkway,
Wilmington, Delaware 19809. Certain records relating to the physical possession
of the Registrant's securities may be maintained at the offices of the
Registrant's custodian, PNC Bank, National Association, located at 200 Stevens
Drive, Lester, Pennsylvania 19113.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment,
including financial statements which need not be audited, within
four to six months from the effective date of this Registration
Statement.
(c) The Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of its latest annual report to
shareholders upon request and without charge if the Registrant
includes the information called for by Item 5A of Form N-1A in such
annual report.
C-4
<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, hereunto duly
authorized, in the City of Baltimore, and State of Maryland, on the 27th day of
January, 1998.
LA SALLE PARTNERS FUNDS, INC.
By: /s/ William K. Morrill, Jr.
---------------------------------
William K. Morrill, Jr.
President
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 date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William K. Morrill, Jr. President (principal executive officer) January 27, 1998
- --------------------------- and Director
William K. Morrill, Jr.
/s/ William E. Sullivan Treasurer (principal financial and January 27, 1998
- --------------------------- accounting officer)
William E. Sullivan
* Director
- ---------------------------
Bruce D. Alexander
* Director
- ---------------------------
Lawrence S. Bacow
* Director
- ---------------------------
Richard A. Dobbins
* Director
- ---------------------------
John W. McCarter, Jr.
* Director
- ---------------------------
Keith R. Pauley
* Director
- ---------------------------
Lynn C. Thurber
*By: /s/ William K. Morrill, Jr.
--------------------------------- January 27, 1998
William K. Morrill, Jr.
Attorney-in-Fact
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, LaSalle
Partners Master Trust has duly caused this Registration Statement to be signed
on its behalf by the undersigned, hereunto duly authorized, in the City of
Baltimore, and State of Maryland, on the 27th day of January, 1998.
LA SALLE PARTNERS MASTER TRUST
By: /s/ William K. Morrill, Jr.
-------------------------------
William K. Morrill, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities with LaSalle Partners Master Trust and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William K. Morrill, Jr.
- --------------------------- President (principal executive officer) January 27, 1998
William K. Morrill, Jr. and Trustee
/s/ William E. Sullivan
- --------------------------- Treasurer (principal financial and January 27, 1998
William E. Sullivan accounting officer)
*
- --------------------------- Trustee
Bruce D. Alexander
*
- --------------------------- Trustee
Lawrence S. Bacow
*
- --------------------------- Trustee
Richard A. Dobbins
*
- --------------------------- Trustee
John W. McCarter, Jr.
*
- --------------------------- Trustee
Keith R. Pauley
*
- --------------------------- Trustee
Lynn C. Thurber
*By: /s/ William K. Morrill, Jr.
---------------------------------- January 27, 1998
William K. Morrill, Jr.
Attorney-in-Fact
</TABLE>
<PAGE>
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and
officers of LaSalle Partners Funds, Inc. (the "Fund") and trustees and directors
of LaSalle Partners Master Trust do hereby constitute and appoint William K.
Morrill, Jr., Keith R. Pauley and Alan C. Porter, and each of them severally,
their true and lawful attorney-in-fact and agent, for them and in their names,
place and stead, in any and all capacities, to sign one or more registration
statements of the Fund to be filed with the Securities and Exchange Commission
under the Securities act of 1933, as amended, and/or the Investment Company Act
of 1940, as amended, and any and all amendments thereto, and any and all other
documents required to be filed with any regulatory authority, federal or state,
relating to the registration of the Fund of its shares of capital stock, without
limitation, granting unto said attorneys-in-fact, and each of them severally,
full power and order to effectuate the same as fully to all intents and purposes
as they might or could do if personally present, including, but not limited to,
the power to appoint a substitute or substitutes to act hereunder with the same
power and authority as said attorneys-in-fact, or any of them, would have if
acting personally, and hereby ratifying and confirming all that said attorneys-
in-fact, or any of them, or any substitutes, may lawfully do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hand as of
this 31st day of December, 1997.
/s/ Bruce D. Alexander /s/ Keith R. Pauley
- ------------------------------ -----------------------------
Bruce D. Alexander Keith R. Pauley
/s/ Lawrence S. Bacow /s/ Lynn C. Thurber
- ------------------------------ -----------------------------
Lawrence S. Bacow Lynn C. Thurber
/s/ Richard A. Dobbins /s/ William K. Morrill, Jr.
- ------------------------------ -----------------------------
Richard A. Dobbins William K. Morrill, Jr.
/s/ John W. McCarter, Jr.
- ------------------------------
John W. McCarter, Jr.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
<S> <C> <C>
(1) (a) Articles of Incorporation*
(b) Articles of Amendment*
(c) Articles Supplementary*
(2) By-Laws.
(5) Management Agreement*
(6) Distribution Agreement*
(8) Custodian Services Agreement*
(9) (a) Administration and Accounting Services Agreement*
(b) Transfer Agency Services Agreement*
(c) License Agreement*
(10) Opinion and Consent of Piper & Marbury L.L.P.*
(11) Consent of Independent Accountants 55
(13) Initial Capital Subscription and Investment Agreement*
(15) (a) Distribution Plan*
(b) Shareholder Services Plan*
(18) Multiple Class Plan*
</TABLE>
* Previously filed.
<PAGE>
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion of our report dated December 29, 1997 on our audit
of the Statement of Assets and Liabilities of LaSalle Partners Funds, Inc. as of
December 29, 1997 with respect to this Pre-Effective Amendment No. 2 to the
Registration Statement (No. 811-08373) under the Securities Act of 1933 on Form
N-1A. We also consent to the reference to our Firm under the heading "Legal
Counsel and Independent Accountants" in the Prospectus and under the headings
"Independent Accountants" and "Financial Statements" in the Statement of
Additional Information.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
January 26, 1998
