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SIGNATURE DOUG MANTELLI
TITLE ASSISTANT TREASURER
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<RETURNS-OF-CAPITAL> 0<F1>
<PER-SHARE-NAV-END> 9.15<F1>
<EXPENSE-RATIO> 3.05<F1>
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<F1>Institutional Shares
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To the Board of Trustees
Puget Sound Market Neutral Portfolio:
In planning and performing our audit of the financial statements of Puget
Sound Market Neutral Portfolio (the "Fund"), which comprises the Puget
Sound Alternative Investment Series Trust, for the period June 29, 1998
(commencement of operations) to May 31, 1999 (on which we have issued
our report dated June 30, 1999), we considered its internal control,
including control activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of
Form N-SAR, and not to provide assurance on the Fund's internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for
external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those controls include the safeguarding
of assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in any internal control, misstatements due
to error or fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the
effectiveness of the design and operation may deteriorate.
Our consideration of the Fund's internal control would not necessarily
disclose all matters in internal control that might be material weaknesses
under standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements caused by error
or fraud in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned
functions. However, we noted no matters involving the Fund's internal
control and its operation, including controls for safeguarding securities,
that we consider to be material weaknesses as defined above as of May
31, 1999.
This report is intended solely for the information and use of management,
the Board of Trustees, and the Securities and Exchange Commission and
is not intended to be and should not be used by anyone other than these
specified parties.
San Francisco, California
June 30, 1999
