LEND LEASE FUNDS, N-1A, 1999-11-01

LEND LEASE FUNDS
N-1A, 1999-11-01

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<PAGE> 1
As filed with the Securities and Exchange Commission on November 1, 1999

Securities Act Registration No. 33-__________
Investment Company Act Registration No. 811-__________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. ______ [ ]

Post-Effective Amendment No._______ [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. ______

LEND LEASE FUNDS
(Exact Name of Registrant as Specified in Charter)

207 EAST BUFFALO STREET, SUITE 400
MILWAUKEE, WISCONSIN 53202
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (414) 271-5885

Constance Dye Shannon
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202
(Name and Address of Agent for Service)

Copy to:
Elizabeth Shea Fries
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, Massachusetts 02109

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE> 2
LEND LEASE FUNDS

LEND LEASE U.S. REAL ESTATE SECURITIES FUND

CLASS A SHARES

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

PROSPECTUS

December 31, 1999

The Securities and Exchange Commission has not approved or disapproved
these securities or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
<PAGE> 3
TABLE OF CONTENTS

Page
----

KEY INFORMATION ABOUT THE FUND..............................................
Investment Objective................................................
Principal Investment Strategies.....................................
Principal Risk Factors..............................................

FEES AND EXPENSES OF THE FUND...............................................
Shareholder Fees....................................................
Fees and Expenses...................................................
Example.............................................................

OTHER INFORMATION REGARDING INVESTMENT PRACTICES............................
REITS...............................................................
Year 2000...........................................................
Defensive Investing.................................................

MANAGEMENT..................................................................
Investment Adviser ................................................
Sub-Investment Adviser.............................................
Portfolio Managers.................................................

BUYING, SELLING AND EXCHANGING
SHARES......................................................................
Before You Invest..................................................
How to Purchase Shares.............................................
How to Sell Shares.................................................
How to Exchange Shares.............................................
Making Changes to Your Account.....................................

SPECIAL FEATURES AND
SERVICES....................................................................
Retirement Account Options.........................................
ACH Transactions...................................................
Automated Telephone Service........................................
Automatic Investment Plan..........................................

OTHER SHAREHOLDER
INFORMATION.................................................................
Shareholder Communications.........................................
Multiple Classes...................................................
Transactions Through Financial Services Agents and Sub-Agents......

DIVIDENDS, DISTRIBUTIONS AND TAXES..........................................
Dividends and Distributions........................................

(i)
<PAGE> 4
Taxes..............................................................

(ii)
<PAGE> 5
KEY INFORMATION ABOUT THE FUND

This Prospectus contains important information for anyone interested in
investing in Class A Shares of LEND LEASE U.S. REAL ESTATE SECURITIES FUND (the
"Fund"), a series of LEND LEASE FUNDS. Please read this document carefully
before you invest and keep it for future reference. You should base your
purchase of shares of the Fund on your own goals, risk preferences and
investment time horizons.

INVESTMENT OBJECTIVE

The Fund's objective is total return from a combination of dividend income and
long-term growth by investing principally in real estate securities.

PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks to achieve its objective by investing at least 85% of its assets
in equity securities of companies principally engaged in the U.S. real estate
industry.

Lend Lease Rosen Real Estate Securities LLC ("Lend Lease Rosen" or the
"Sub-Adviser") manages the Fund's day to day investment activity. The process of
selecting portfolio positions is a two-part process involving both qualitative
(industry segment or top down approach) and fundamental (specific companies that
are in the selected segments or bottom up approach) analysis.

The quantitative/top down process involves first identifying promising sectors
within the U.S. real estate market. In analyzing the U.S. real estate market,
the Sub-Adviser relies on proprietary real estate transaction databases, supply
and demand forecasts for various property types such as residential, commercial
and industrial real estate and local market intelligence from an extensive
network of affiliates around the country engaged in various aspects of the real
estate industry. The Fund ordinarily expects to be invested in at least four
sectors of the real estate market but, if conditions warrant, may focus its
investments more narrowly.

The fundamental/bottom up process involves the selection of individual
securities from within the sectors that were selected in the quantitative
process. Companies are evaluated based on their overall investment strategy, the
strength of the company management, fundamental analysis of a company's
financial statements and the security's yield. The Fund expects to invest
primarily in medium and large capitalization issuers. Under normal
circumstances, the Fund's portfolio is anticipated to be low, not exceeding 80%
per year.

As a means of maintaining consistent investment performance and preserving
capital in adverse market conditions, the Fund may invest up to 15% of its
assets in cash or cash equivalents.

A company is considered to be principally engaged in the U.S. real estate
industry if the Fund's Sub-Adviser determines that the company (i) derives at
least 50% of its revenues or profits from the ownership, renting, leasing,
construction, management, development, financing or sale of

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<PAGE> 6
commercial, industrial and residential real estate or related interests or (ii)
has at least 50% of the value of its assets invested in U.S. commercial,
industrial and residential real estate.

Equity securities include common stock, preferred stock, partnership interests
and other instruments evidencing an ownership interest in an issuer as well as
rights, warrants and securities convertible into equity securities.

The Fund measures its investment performance against the Wilshire REIT Index
(the "Wilshire Index"). The Wilshire Index is an unmanaged securities index
designed to measure the performance of U.S. publicly traded REITs. The
composition of the Wilshire Index is determined by Wilshire Associates and
includes REITs representing a variety of property types. As of ______, 1999,
____ securities were included in this Wilshire Index, with a total market
capitalization of $_________.

PRINCIPAL RISK FACTORS

The principal risks of investing in the Fund are the risks generally
associated with investing in stocks and the risks specific to investing in the
real estate industry. Fund shares are not bank deposits and are not guaranteed,
endorsed or insured by any financial institution, government entity or the FDIC.
The Fund's share price will fluctuate, and it is possible to lose money by
investing in the Fund.

Risks of Investing in Stocks. A company's stock price may fluctuate due to
circumstances unique to that company. For example, a company's business
prospects may affect its stock price. If investors believe the company's
business prospects are good, they will generally be willing to pay higher prices
for its stock. If these expectations are not met, or if expectations are
lowered, the price of the securities will tend to drop. A stock's price will
also tend to rise and fall as a result of investors' perceptions of the market
as a whole. In other words, if the stock market drops in value, the value of the
Fund's portfolio of investments is also likely to decrease in value. The
increase or decrease in the value of the Fund's investments in response to this
phenomenon may be proportionally more or less than the increase or decrease in
the value of the market.

Risks of the Real Estate Industry. The stock prices of companies in the real
estate industry are typically sensitive to changes in real estate values,
property taxes, interest rates, cash flow of underlying real estate assets,
occupancy rates, government regulations affecting zoning, land use, and rents,
and the management skill and creditworthiness of the issuer. Companies in the
real estate industry may also be subject to liabilities under environmental and
hazardous waste laws which could negatively affect their value.

Industry Concentration. Because the Fund concentrates its investments in real
estate securities, it may be subject to greater risks and market fluctuations
than a fund representing a broader range of industries. In addition, market
performance tends to be cyclical and, in the various cycles, certain industries
and investment approaches may fall in and out of favor. If the market does not
currently favor the real estate industry or the Fund's investment approach, the
Fund's gains may not be as big or its losses may be bigger than other equity
funds investing in different industries or using different investment
approaches.

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<PAGE> 7
Non-diversified status. The Fund is not "diversified" within the meaning of the
Investment Company Act of 1940. This means that, compared with "diversified"
funds, it may invest a relatively greater portion of its assets in any single
issuer. As a result, the Fund may be more susceptible to negative developments
affecting a single issuer.

FUND PERFORMANCE

Because the Fund is new and has not completed a full calendar year's
operations, performance information is not included in this Prospectus. To
obtain the Fund's performance information after its first full calendar quarter
of operations, please call the Fund at 1-800-___-___.

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.

<TABLE>
<CAPTION>
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A SHARES
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price) .......................... 5.75%
Maximum Contingent Deferred Sales Charge (Load)...................... None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and Other Distributions........................................... None
Redemption Fee (within 12 months of purchase)........................ 1.00%*
Exchange Fee......................................................... None
</TABLE>

* If you redeem your Class A shares within 12 months of your purchase,
you will be subject to a redemption fee of 1.00% of the net asset value
of your shares on the redemption date. Please see "Redemption Fee"
under the caption "Additional Redemption Provisions" for more
information. In addition, the Fund charges a $10 fee for redemptions
made by wire and $15 for redemptions from retirement accounts.

FEES AND EXPENSES
CLASS A SHARES

<TABLE>
<CAPTION>
Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<S> <C>
Management Fee*....................................................... .80%
Distribution and Service (12b-1) Fees................................. .25%
Other Expenses**...................................................... ____%
Total Annual Fund Operating Expenses***............................... ____%
Fee Waiver [and/or Expense Reimbursement]............................. ____%
Net Expenses.......................................................... 1.50%
</TABLE>

* The Management Fee includes the fees paid to both the Adviser and the
Sub-Adviser.

** Because the Fund is new, Other Expenses are based on estimated
amounts for the current fiscal year.

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<PAGE> 8
*** Lend Lease Real Estate Securities, LLC, the Fund's investment
adviser (the "Adviser"), has voluntarily agreed to limit the Total Annual Fund
Operating Expenses of Class A shares to ___% through January 31, 2003 subject to
later reimbursement by the Fund in certain circumstances. After January 31, 2003
the Adviser may terminate the expense limitation at any time.

EXAMPLE

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

1 YEAR 3 YEARS
------ -------
Class A

+ Taking the current expense limitation into account, your costs for the Fund
would be:

1 YEAR 3 YEARS
------ -------
Class A

OTHER INFORMATION REGARDING INVESTMENT PRACTICES

Companies or issuers in the U.S. real estate industry in which the Fund may
invest include among others: real estate investment trusts ("REITs"), companies
that invest in interests in real estate, real estate developers and brokers,
real estate operating companies ("REOCs"), companies with substantial real
estate holdings (such as hotel companies, and land-holding companies), as well
as companies whose products and services are significantly related to the real
estate industry such as building supply manufacturers, mortgage lenders and
mortgage servicing companies. A substantial portion of the Fund's portfolio at
any given time may be invested in REITs.

REITS

REITs are sometimes divided into three categories - equity REITs, mortgage REITs
and hybrid REITs. An equity REIT owns or leases real estate and realizes a
return on its holdings primarily from rental income although it may also realize
gains (or losses) by selling properties in its portfolio. A mortgage REIT
invests primarily in loans secured by real estate and derives its income
primarily from interest payments on its mortgage loans. A hybrid REIT combines
the characteristics of both equity REITs and mortgage REITs, generally by
holding both ownership

6
<PAGE> 9
and mortgage interests in real estate. The Wilshire Index includes only equity
REITs, and the Fund anticipates that under normal circumstances its investments
will consist principally of equity REITs.

Equity REITs are typically divided into two categories - operating companies and
financing companies. Operating companies generally exercise some degree of
control over the operational aspects of their real estate investments, lease
terms, and property maintenance and repair. Financing companies generally
exercise no control over the operational aspects of their real estate
investments. The Fund anticipates that under normal circumstances a majority of
its equity REIT investments will be in operating companies.

REITs are dependent upon specialized management skills. They also have limited
diversification and are, therefore, subject to risks inherent in operating and
financing a limited number of projects. Furthermore, some REITs have relatively
small market capitalizations, which tends to increase the volatility of their
securities.

REOCS

REOCs invest, own and operate real estate. A REOC differs from a REIT in that it
is structured as a C-corporation and is not subject to REIT legislation. The
Fund from time-to-time may invest in REOCs.

YEAR 2000

The "Year 2000 problem," a date-related computer issue, could have an adverse
impact on the Fund. In addition to verifying that all its internal systems are
Year 2000 compliant (able to handle dates past 1999), the Fund is taking steps
to address this problem with its Adviser and Sub-Adviser and with other Fund
service providers and vendors. The Fund has obtained assurances from each of its
key service providers that they are taking steps within their organizations to
make their systems and products Year 2000 compliant. The Fund cannot, however,
be completely certain that all third parties on which it is directly or
indirectly dependent for services will be Year 2000 compliant in a timely
manner. In addition, the Fund is unable to predict the impact of this problem on
any portfolio company in which it has or may be invested. The Fund will continue
to monitor developments relating to the Year 2000 problem.

DEFENSIVE INVESTING

During unusual market conditions, the Fund may place up to 100% of its total
assets in cash or quality short-term debt securities including repurchase
agreements.

RESTRICTED AND ILLIQUID SECURITIES

The Fund may purchase restricted or illiquid securities. Any security that is
thinly traded or whose resale is restricted can be difficult to sell at a
desired time and price. Owning a large percentage of restricted or illiquid
securities could hamper the Fund's ability to raise cash to meet redemptions.
Also, absent an established market price, the Fund may have to estimate their
value thereby adding a subjective element to the valuation of the Fund.

7
<PAGE> 10
REPURCHASE AGREEMENTS

The Fund may buy securities with the understanding that the seller will buy them
back with interest at a later date. If the seller is unable to honor its
commitment to repurchase the securities, the Fund could lose money.

INVESTMENT MANAGEMENT

WHO ARE LEND LEASE ROSEN AND LEND LEASE REAL ESTATE INVESTMENTS?

Lend Lease Real Estate Investments, Inc. (the Adviser), Monarch Tower, 3424
Peachtree Road, N.E., Suite 800, Atlanta, Georgia 30326, is the Fund's Advisor.
The Adviser is a wholly-owned subsidiary of Lend Lease Corporation Limited, an
integrated property and financial service company listed on the Australian and
New Zealand stock exchanges with a market capitalization exceeding U.S. $6
billion. The Adviser is a full-service real estate investment advisor with
substantial experience in investing and managing commercial real estate assets
for institutional lenders and owners. As of November 1, 1999, the Adviser
managed approximately $30.5 billion in U.S. assets on behalf of its clients and
investors in its funds, which include a wide variety of public and corporate
pension funds, insurance companies, endowments, foundations and foreign
institutions. The Adviser is also one of the leading advisors to pension funds
regarding investments in U.S. real estate. The Adviser is co-headquartered in
New York, New York and Atlanta, Georgia.

Lend Lease Rosen Real Estate Securities, LLC (the Sub-Adviser), 1995 University
Avenue, Suite 550, Berkeley, California 94704, is responsible for the day to day
management of the Fund's investment program. Lend Lease Rosen is a real estate
investment management company founded in 1993 by Dr. Kenneth T. Rosen. In 1997,
the Adviser acquired a 50% interest in the Sub-Adviser. As of ______________,
assets under management were approximately $___ million. Lend Lease Rosen is a
research driven investment management firm managing assets principally on behalf
of institutional investors. Lend Lease Rosen uses both a fundamental (bottom up)
and qualitative approach (top down) to construct the investment portfolios it
manages.

The Fund pays an annual fee of .80% of its average daily net assets for the
services provided by the Adviser and the Sub-Adviser.

The Adviser has voluntarily agreed to limit the Fund's total operating expenses
to __% of the Fund's average daily net assets through [January 31, 2003]. After
that date, the Adviser may modify or terminate the expense limitation at any
time. With respect to each waiver or reimbursement in connection with
maintaining the expense limitation, the Fund is obligated to repay the Adviser
the amount waived or reimbursed to the extent that repayment would not cause the
Fund's total operating expenses for the year in which the repayment is made to
exceed ______% of the Fund's average daily net assets. The Fund's repayment
obligation with respect to a particular waiver or reimbursement ends with the
third anniversary of the waiver or reimbursement.

8
<PAGE> 11
PORTFOLIO MANAGERS

The Fund is managed by a portfolio management team that includes Michael A.
Torres (portfolio manager), Jennifer Nichols and Greg Prophet (portfolio
analysts). They are responsible for the day to day management of the Fund and
the selection of the Fund's investments.

Michael Torres is co-president of the Sub-Adviser and has 13 years of real
estate and securities research experience. Mr. Torres joined the Sub-Adviser in
February 1995 and is responsible for its operations, client services and
research. Prior to joining the Sub-Adviser, Mr.Torres was Director of real
estate and Portfolio Manager at Wilshire Associates from 1990 to 1995. He has a
B.A. in architecture and a M.B.A. in economics from the University of
California, Berkeley.

Jennifer Nichols, CPA, is a Vice President of the Sub-Adviser and oversees
research for the Sub-Adviser with responsibility for company-specific research
and portfolio strategy. Ms. Nichols joined the Sub-Adviser in 1998 and has a
B.A. from the University of California, Santa Barbara and an M.B.A. from the
University of California, Berkeley. Prior to joining the sub-adviser. Ms.
Nichols was a research analyst at Montgomery Securities from 1996 to 1998. Prior
to this, she was a Portfolio Administrator at Barclay's Global Investors.

Gregory Prophet is a Vice President of the Sub-Adviser and is responsible for
company-specific research and oversees the Sub-Adviser's proprietary
quantitative model. Mr. Prophet has been with the Sub-Adviser for 5 years and
has a B.A. from the University of California, Los Angeles and an M.B.A. from the
University of California, Berkeley.

BUYING, SELLING AND EXCHANGING SHARES

BEFORE YOU INVEST

AVAILABLE SHARE CLASSES. The Fund offers investors three different classes of
shares - Class A, Class K and Class Y. Class A shares are described in this
prospectus. The different classes represent investments in the same portfolio of
securities, but each class has different expenses and will likely have different
share prices. When you buy shares, remember to specify the class of shares you
want to buy. If you do not choose a class, your investment will be made in Class
A shares.

- - Class A Shares. If you buy Class A shares, you will pay an up-front
sales charge, or "load" and will be subject to a Redemption Fee (for
shares sold within twelve months of purchase) and Distribution and
Service Fees. See, "How to Purchase Shares," below, for information on
the applicable sales charge rates and Distribution and Service Fees.
See, "How to Sell Shares," below, for more information on the
Redemption Fee.

Class K and Class Y shares, which are sold by a different prospectus, do not
have an up-front sales charge or redemption fee. Class K shares which, like
Class A shares, are subject to Distribution and Service Fees are sold only to
Registered Investment Advisers. Class Y shares are not subject to Distribution
and Service Fees, but do have higher investment minimums. Call

9
<PAGE> 12
1-800-XXX-XXXX for more information about Class K and Class Y shares. You should
be aware that financial service firms may receive different compensation
depending upon which class of shares they sell.

ACCOUNT REGISTRATION. When purchasing shares, you need to select the appropriate
form of account registration. There are many different types of mutual fund
ownership. How you register your account with the Fund can affect your legal
interests, as well as the rights and interests of your family and beneficiaries.
You should always consult with your legal and/or tax adviser to determine what
form of account registration best meets your needs.

Available forms of registration include:

- Individual ownership. If you have reached the legal age of
majority in your state of residence, you may open an
individual account.
- Joint ownership. Two or more individuals may open an account
together as joint tenants with right of survivorship, tenants
in common or as community property.
- Custodial account. You may open an account for a minor under
the Uniform Gift to Minors Act/Uniform Transfers to Minors Act
for your state of residence.
- Business/trust ownership. Corporations, trusts, charitable
organizations and other businesses may open accounts.
- IRAs and other tax-deferred accounts. The Fund offers a
variety of retirement accounts for individuals and
institutions. Please refer to "Retirement Account Options,"
below, for more information about these types of accounts.

ACCOUNT MINIMUMS. You also need to decide how much money to invest. The
following chart shows you the minimum amounts that you will need to open or add
to certain types of accounts. The Fund may waive the minimum investment amounts
at any time.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
TYPE OF ACCOUNT INITIAL MINIMUM PURCHASE ADDITIONAL MINIMUM PURCHASE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Regular (Individual, joint, CLASS A CLASS A
business or trust) $10,000 $250
- ------------------------------------------------------------------------------------------------
IRA (including spousal, Roth and CLASS A CLASS A
SEP) $1,000 $250
- ------------------------------------------------------------------------------------------------
Gifts to Minors (UTMA/UGMA) CLASS A CLASS A
$10,000 $250
- ------------------------------------------------------------------------------------------------
Automatic Investment Plan CLASS A CLASS A
$5,000 $250
- ------------------------------------------------------------------------------------------------
</TABLE>

DETERMINING YOUR SHARE PRICE. The price at which you purchase and sell the
Fund's shares is called the Fund's net asset value ("NAV") per share. The Fund
calculates NAV by taking the total value of its assets, subtracting its
liabilities, and dividing the total by the number of Fund shares that are
outstanding. The Fund calculates its NAV as of the close of trading on the New
York Stock Exchange (usually 4:00 p.m. Eastern time) on each day the Exchange is
open for trading. The Fund does not calculate NAV on days the Exchange is closed
(including national holidays and Good Friday). NAV is determined separately for
each class of shares. The price of

10
<PAGE> 13
the shares you purchase or redeem will be the next NAV calculated after your
order is received in good order by the Fund or other financial intermediary with
the authority to accept orders on the Fund's behalf.

The value of the Fund's assets is based on the current market value of its
investments. For securities with readily available market quotations, the Fund
uses those quotations to price a security. If a security does not have a readily
available market quotation, the Fund values the security based on fair value, as
determined in good faith in accordance with the guidelines established by the
Fund's board of trustees. The Fund may use pricing services to assist in the
determination of market value.

HOW TO PURCHASE SHARES

You can buy shares directly from the Fund or through a broker-dealer or other
institution that the Fund has authorized to sell shares.

CLASS A SHARES. Class A shares are sold at their offering price, which is net
asset value plus an initial sales charge. The sales charge varies depending on
the amount of your purchase. A portion of the sales charge may be retained by
the Fund's distributor or allocated to your dealer as a commission. The current
sales charge rates are as follows:

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
AMOUNT OF PURCHASE SALES CHARGE (AS A % OF SALES CHARGE (AS A % OF NET
OFFERING PRICE) AMOUNT INVESTED)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Less than $_______ ____% ____%
- -----------------------------------------------------------------------------------------------------
$___ or more but less than $____ ____% ____%
- -----------------------------------------------------------------------------------------------------
$______ and over ____% ____%
- -----------------------------------------------------------------------------------------------------
</TABLE>

If you sell your Class A shares within 12 months of purchase, a 1% redemption
fee will be deducted from your redemption proceeds. However, there is no charge
upon the redemption of any share appreciation or reinvested dividends. The
redemption fee, which is paid to the Fund, is designed to reimburse the Fund for
the brokerage and other transaction costs associated with short-term trading.

Front-end sales charge exemptions. Various individuals and institutions may
purchase Class A shares without a front-end sales charge, including:

- - Investment advisers or financial planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting, or other fee for their services; and clients of such investment
advisers or financial planners who place trades for their own accounts if
the accounts are linked to the master account of such investment adviser or
financial planner on the books and records of the broker or agent.

- - Shareholders who automatically reinvest their dividends or capital gains in
additional shares, with respect to shares purchased through automatic
reinvestment;

- - Certain retirement plans, such as profit-sharing, pension, 401(k), SEP-IRAs
and Simple IRAs, deferred compensation plans and trusts used to fund those
plans, including, but not

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<PAGE> 14
limited to, those defined in Section 401(a), 403(b), or 457 of the Internal
Revenue Code, and "Rabbi Trusts;"
- - Shareholders who have taken a distribution from a retirement plan invested
in shares of the Fund. This exemption applies to the extent of the
distribution, provided that such distribution is reinvested within 90 days
of the payment date;
- - Individual accounts of registered brokers and dealers who have entered into
sales or service agreements with the Distributor and who have achieved
certain sales objectives of the Fund;
- - Individual accounts of certain registered personnel and employees of
registered brokers and dealers, their spouses, children, grandchildren and
parents, in accordance with the internal policies of the employing broker
or dealer;
- - State and local government entities that are prohibited from paying mutual
fund sales charges;
- - Owners of private accounts invested in real estate securities managed by
the Adviser or Sub-Adviser, who either (i) purchase Fund shares within one
year of the Fund's inception or (ii) in the Adviser's or Sub-Adviser's sole
discretion, are no longer eligible for separate account management by the
Adviser or Sub-Adviser. In either case, such owners must liquidate their
private account(s) and purchase Fund shares with the proceeds within 90
days of the liquidation.
- - "Wrap accounts" for the benefit of clients of registered broker-dealers
having sales or service agreements with the Distributor;
- - Registered investment companies;
- - Trust companies investing $1 million or more for common trust or collective
investment funds;
- - Trustees and officers of the Fund, employees of and counsel for the
Adviser, Sub-Adviser and their affiliates, and their spouses, children,
grandchildren and parents, in accordance with the internal policies and
procedures of their respective employers; and
- - Private partnerships managed by the Adviser, Sub-Adviser, or their
affiliates.

You may be eligible to buy Class A shares at reduced sales charge rates under
the Fund's "Letter of Intent," as described in "Reduced Sales Charges" in the
Fund's Statement of Additional Information.

DISTRIBUTION AND SERVICE FEES (12b-1 PLAN)

The Fund has adopted a 12b-1 Plan for its Class A shares under which the Fund
pays the Distributor 0.25% of the average daily net assets attributable to Class
A shares for certain service and distribution expenses incurred by this class of
shares. (This type of plan is named after the rule under the securities laws
which permits it.) Because 12b-1 Plan fees paid by the Fund are an ongoing
expense, they will increase the cost of a Fund investment, and over time, may
cost an investor more than other types of sales charges.

To open an account or buy additional shares from the Fund, just follow these
steps:

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<PAGE> 15
<TABLE>
<CAPTION>
TO OPEN AN ACCOUNT TO ADD TO AN EXISTING
ACCOUNT

<S> <C>
BY MAIL: BY MAIL:
- - Complete and sign the account - Complete the investment slip
application or an IRA that is included in your
application. If you do not account statement, and write
complete the application your account number on your
properly, your purchase may be check.
delayed or rejected.
- If you no longer have your
- - Make your check payable to investment slip, please
"Lend Lease U.S. Real Estate reference your name, account
Securities Fund." The Fund number and address on your
does not accept cash, third check.
party checks, travelers checks
or checks drawn on banks - Make your check payable to
outside the U.S. "Lend Lease U.S. Real Estate
Securities Fund."
- - For IRA accounts, please
specify the year for which the
contributions is made.

MAIL YOUR APPLICATION AND CHECK TO: MAIL THE SLIP AND THE CHECK TO:
Lend Lease U.S. Real Estate Securities Lend Lease U.S. Real Estate Securities
Fund Fund
P.O. Box ___ P.O. Box ___
Milwaukee, WI 53201-____ Milwaukee, WI 53201-____

BY OVERNIGHT COURIER, SEND TO:
Lend Lease U.S. Real Estate Securities
Fund
207 E. Buffalo Street
Suite 315
Milwaukee, WI 53202

BY TELEPHONE: BY TELEPHONE:

You may not make your initial purchase by - You automatically have the
telephone. privilege to purchase
additional shares by telephone
unless you have declined this
service on your account
application. You may call
1-800-___-____ to purchase
shares for an existing
account.

- Investments made by electronic
funds transfer must be in
amounts of at least $___ and
not greater than $_____.
</TABLE>

13
<PAGE> 16
<TABLE>
<CAPTION>
BY WIRE: BY WIRE:
<S> <C>
- To purchase shares by wire, Send your investment to Lend Lease
the Fund must have received U.S. Real Estate Securities Fund
a completed application and by following the instructions
issued an account number to listed in the column to the left.
you. Call 1-800-___-____
for instructions prior to
wiring the funds.

- Send your investment to
Lend Lease U.S. Real Estate
Securities Fund with these
instructions:
_______________
ABA #__________
For Credit to _______
A/C #________________

For further credit to: investor
account number; name(s) of investor(s);
SSN or TIN; name and class of Fund
</TABLE>

If your purchase request is received by the Fund, broker-dealer or other
authorized agent before close of trading on the New York Stock Exchange
(typically 4:00 p.m. Eastern time) on a business day, your request will be
executed at that day's NAV, provided that your application is in good order.
"Good order" means that the Fund has received your properly completed, signed
application, your payment, and any supporting legal documentation that may be
required. If your request is received after close of trading, it will be priced
at the next business day's NAV. Shares purchased by wire will receive the NAV
next determined after the Fund receives your completed application, the wired
funds and all required information is provided in the wire instructions.

ADDITIONAL PURCHASE INFORMATION.

- - The Fund does not issue certificates for shares.

- - If your check does not clear, your purchase will be cancelled. You will be
responsible for any resulting losses or expenses (including a $20 fee)
incurred by the Fund. The Fund may redeem shares you own in this or another
identically registered Fund account as reimbursement for any such losses.

- - You must provide the Fund with a Social Security Number or Taxpayer
Identification Number before your account can be established. If you do not
certify the accuracy of your Social Security or Taxpayer Identification
Number on your account application, the Fund will be required to withhold
Federal income tax at a rate of 31% from all of your dividends, capital
gain distributions and redemptions.

- - The Fund is only offered and sold to residents of the United States. Your
application will be accepted only if it contains a U.S. address. This
prospectus should not be considered a solicitation to buy or an offer to
sell shares of the Fund in any jurisdiction where it would be unlawful to
do so under the securities laws of that jurisdiction.

- - The Fund will not accept your application if you are investing for another
person as attorney-in-fact. The Fund will not accept applications that list
"Power of Attorney" or "POA" in the registration section.

14
<PAGE> 17
- - Once you place your order, you may not cancel or revoke it. The Fund may
reject a purchase order for any reason.

TRANSACTIONS THROUGH FINANCIAL SERVICES AGENTS. In addition to purchasing shares
from the Fund, you may invest through a financial services agent. Financial
advisers, broker-dealers and other financial service agents may charge
transaction and other fees and may set different minimum investments or
limitations on buying and selling shares, than those described in the
prospectus. In addition, these intermediaries may place limits on your ability
to use services the Fund offers.

HOW TO SELL SHARES

You may sell your shares on any day the Fund is open for business by following
the instructions below. You may elect to have redemption proceeds sent to you by
check, wire or electronic funds transfer. The Fund normally pays redemption
proceeds within two business days, but may take up to seven days. You can redeem
shares purchased by check at any time. However, while the Fund will process your
redemption on the day it receives your request, it will not pay your redemption
proceeds until your check has cleared, which may take up to 15 calendar days
from the date of purchase. You can avoid this delay by purchasing shares by a
federal funds wire. Please note that this provision is intended to protect the
Fund and its shareholders from loss.

HOW TO SELL SHARES

BY MAIL:

- - Send a letter of instruction that includes your account number, the Fund
name, the dollar value or number of shares you want to sell, and how and
where to send the proceeds.

- - Sign the request exactly as the shares are registered. All registered
owners must sign.

- - Include a signature guarantee, if necessary (see "Signature Guarantees,"
below),

MAIL YOUR REQUEST TO:
Lend Lease U.S. Real Estate Securities Fund
P.O. Box ___
Milwaukee, WI 53201-____

BY OVERNIGHT COURIER, SEND TO:
Lend Lease U.S. Real Estate Securities Fund
207 E. Buffalo Street
Suite 315
Milwaukee, WI 53202

15
<PAGE> 18
BY TELEPHONE:

- - You automatically have the privilege to redeem shares by telephone unless
you have declined this option on your account application.

- - Call 1-800-___-____, between 8:00 a.m. and 8:00 p.m. Eastern time. You may
redeem as little as $1,000 and as much as $20,000 by telephone.

- - Telephone redemptions are not available for retirement plan accounts.

BY WIRE:

- - If you choose to redeem your shares by wire, your redemption proceeds will
be sent to your bank account of record. A $10 fee will be deducted from
your proceeds for Class A shares.

- - If you wish to have your redemption proceeds sent by wire to a bank account
other than that of record, you must provide a written request signed by all
owners of the account with signatures guaranteed.

Redemption requests received in good order before close of trading on the New
York Stock Exchange (typically, 4:00 p.m. Eastern time) will be processed at
that day's NAV. "Good order" means that for redemptions, you have included all
required information and documentation along with any required signature
guarantees. Redemption requests sent by facsimile will not be honored.

Please note that the Fund may require additional documents for redemptions by
corporations, executors, administrators, trustees and guardians. If you have any
questions about how to redeem shares, or to determine if a signature guarantee
or other documentation is required, please call 1-800-___-____.

ADDITIONAL REDEMPTION PROVISIONS

- - Once we receive your order to sell shares, you may not revoke or cancel it.
We cannot accept an order to sell that specifies a particular date, price
or any other special conditions.
- - If you are redeeming from an IRA, please tell us the proper tax withholding
on your redemption request. If you did not make a tax election on your IRA
application, we will automatically withhold 10% of your redemption
proceeds. (The Fund charges $15 for a redemption from an IRA account.)

16
<PAGE> 19
- - If your redemption request exceeds the amount that you currently have in
your account, your entire account will be redeemed. The automatic purchase
plan that you have initiated for the account will be cancelled.

- - The Fund reserves the right to suspend the redemption of Fund shares when
the securities markets are closed, trading is restricted for any reason, an
emergency exists and disposal of securities owned by the Fund is not
reasonably practicable, the Fund cannot fairly determine the value of its
net assets, or the Securities and Exchange Commission permits the
suspension of the right of redemption or postpones the date of payment of a
redemption.

- - If the amount you redeem is large enough to affect the Fund's operations,
the Fund may pay your redemption "in kind." This means that the Fund may
pay you in portfolio securities rather than cash. If this occurs, you may
incur transaction costs when you sell the securities you receive.

REDEMPTION FEE. If you redeem your Class A shares within 12 months of your
purchase, you will be subject to a redemption fee of 1.0%. The redemption fee is
based on the net asset value of the shares on the redemption date. The Fund will
not impose a redemption fee on shares purchased through reinvestment of
dividends or distributions. The Fund also charges a $10 redemption fee for
redemptions made by wire and a $15 redemption fee for redemptions from
retirement accounts.

When you redeem your shares, your redemption request is processed to minimize
the amount of redemption fee that is payable. The Fund first redeems those
shares that are not subject to a redemption fee (e.g., shares acquired through
reinvestment of dividends or distributions), and then redeems those that have
been held the longest.

The redemption fee is remitted to the Fund, to offset the brokerage and other
costs associated with short-term trading.

REDEEMING SHARES THROUGH THIRD PARTIES. A broker-dealer, financial institution
or other service provider may charge a fee to redeem your Fund shares. If the
service provider is the shareholder of record, the Fund may accept redemption
requests only from that provider.

TELEPHONE TRANSACTIONS

- - In times of drastic economic or market conditions, you may have difficulty
selling shares by telephone. The Fund reserves the right to temporarily
discontinue or limit the telephone purchase, redemption or exchange
privileges at any time during such periods. If you are unable to reach the
Fund by telephone, please send your redemption request via overnight
courier at the address provided above.

- - The Fund reserves the right to refuse a telephone redemption request if it
believes it is advisable to do so. The Fund uses procedures reasonably
designed to confirm that telephone redemption instructions are genuine.
These may include recording telephone transactions, testing the identity of
the caller by asking for account information and sending prompt written
confirmations. The Fund may implement other procedures from time to time.
If these procedures are followed, the Fund and its service providers will
not be liable for any losses due to unauthorized or fraudulent
instructions.

17
<PAGE> 20
SIGNATURE GUARANTEES. The Fund will require the signature guarantee of each
account owner to redeem shares in the following situations:

- - to change ownership on your account;

- - to send redemption proceeds to a different address than is currently on the
account;

- - to have the proceeds paid to someone other than the account's owner;

- - to transmit redemption proceeds by federal wire transfer or ACH to a bank
other than your bank of record;

- - if a change of address request has been received by the transfer agent
within the last 30 days; or

- - if your redemption is for more than $20,000.

The Fund requires signature guarantees to protect both you and the Fund from
possible fraudulent requests to redeem shares. You can obtain a signature
guarantee from most broker-dealers, national or state banks, credit unions,
federal savings and loan associations or other eligible institutions. A NOTARY
PUBLIC IS NOT AN ACCEPTABLE SIGNATURE GUARANTOR.

SMALL ACCOUNTS. All Fund account owners share the high cost of maintaining
accounts with low balances. To reduce this cost, the Fund reserves the right to
close an account when a redemption or exchange leaves your account balance below
$8,000 for Class A shares, or you discontinue the automatic investment plan
before you reach the minimum. We will notify you in writing before we close your
account, and you will have 60 days to add additional money to bring the balance
up to $8,000 for Class A shares or to renew your automatic investment plan. This
provision does not apply to retirement plan accounts or UGMA/UTMA accounts.

MAKING CHANGES TO YOUR ACCOUNT

You may call or write the Fund to make changes to your account. Common changes
include:

Name changes. If your name has changed due to marriage or divorce, send the Fund
a letter of instruction signed with both your old and new names. Include a
certified copy of your marriage certificate or have your signatures guaranteed.

Address changes. The easiest way to notify the Fund is to return the stub from a
recent confirmation or statement. You can also call 1-800-___-____ with any
changes.

Transfer of account ownership. Send the Fund a letter including your account
number, the share class, number of shares or dollar amount that are being
transferred along with the name, address and Social Security or Taxpayer
Identification Number of the person to whom the shares are being transferred.
All living registered owners must sign the letter. You will also need to include
a signature guarantee. Corporations, businesses and trusts may have to provide
additional documents. In order to avoid delays in processing account transfers,
please call us at 1-800-___-____ to determine what additional documents are
required.

SPECIAL FEATURES AND SERVICES

18
<PAGE> 21
RETIREMENT ACCOUNT OPTIONS

The Fund offers a variety of retirement accounts for individuals and
organizations. These accounts may offer you tax advantages. For information on
establishing retirement accounts, please call 1-800-___-____. You should consult
with your legal and/or tax adviser before you establish a retirement account.

The Fund currently offers the following kinds of retirement accounts:

- - Traditional IRA (including spousal IRA)
- - "Rollover" IRA
- - Roth IRA
- - SEP-IRA
- - Simple IRA

The Fund is also available for investment by other retirement plans. Please call
1-800-XXX-XXXX for additional information.

ACH TRANSACTIONS
If you would like to purchase shares electronically or have redemption proceeds
sent directly to your bank account, you must first have certain bank account
information on file with us so that funds can be transferred electronically
between your Fund account and bank account. You will receive the NAV next
calculated after receipt of your funds, which typically takes 2 to 3 days. There
is no charge to you for this procedure. The Fund requires 10 business days to
verify your bank information before initiating this privilege. You can establish
this privilege by filling out the appropriate section of your account
application. If you did not select the electronic purchase or redemption options
on your original application, call us at 1-800-___-____.

AUTOMATED TELEPHONE SERVICE
The Fund offers 24-hour, seven days a week access to Fund and account
information via a toll-free line. The system provides total returns, share
prices and price changes for the Fund, gives you account balances and history
(e.g., last transaction, latest dividend distribution), and market commentary
from the Adviser's management team. To access the automated system, please call
1-800-___-____.

AUTOMATIC INVESTMENT PLAN (AIP)
To make regular investing more convenient, you can open an automatic investment
plan with an initial investment of $______ and a minimum investment of $_____
per month after you start your plan. We will automatically transfer from your
checking or savings account the amount you want to invest on any of the
following days: the 5th, 10th, 15th, 20th, 25th or last day of each month. There
is no charge for this service, but if there is not enough money in your bank
account to cover the withdrawal you will be charged $20, your purchase will be
cancelled and you will be responsible for any resulting losses to the Fund. You
can terminate your automatic investment plan at any time by calling the Fund at
least __ days before your next scheduled withdrawal date. To implement this
plan, please fill out the appropriate area of your application, or call
1-800-___-____ for assistance.

OTHER SHAREHOLDER INFORMATION

19
<PAGE> 22
SHAREHOLDER COMMUNICATIONS

Confirmations. You will receive a confirmation each time you buy, sell or
exchange Fund shares. Automatic investment plan participants receive quarterly
confirmations of all automatic transactions. Please review your confirmation and
notify us immediately if there are any discrepancies in the information.

Quarterly and annual statements. You will receive a quarterly statement
providing year-to-date information, including all distributions, purchases and
redemptions of Fund shares. Your December statement will include a listing of
all transactions for the entire year.

Semi-annual and annual reports. The Fund sends semi-annual and annual reports to
its shareholders. These reports provide financial information on your
investments and give you a "snapshot" of the Fund's portfolio holdings at the
end of its semi-annual and fiscal year periods. Additionally, the annual report
discusses the factors that materially affected the Fund's performance for its
most recently completed year, including relevant market conditions and the
investment strategies and techniques that were used. You may consent to receive
the semi-annual and annual reports via electronic mail, over the Internet.
Before receiving these documents via electronic mail, you will need to consent
to this form of delivery on the application.

Prospectus. Each year, the Fund sends all shareholders a new prospectus. Please
read the prospectus and keep it for future reference. You may also consent to
receive the prospectus via electronic mail. As with the semi-annual and annual
reports, you will need to consent to this form of delivery on the application.

Form 1099. Each year you will receive a Form 1099-DIV, showing the source of
distributions for the preceding year and a Form 1099-B showing any shares you
sold during the year.

Form 1099R. If you received a distribution from an IRA account during the year,
you will receive a Form 1099R.

Form 5498. If you contributed to an IRA during the year, you will receive a Form
5498 verifying your contribution.

TRANSACTIONS THROUGH FINANCIAL SERVICES AGENTS AND SUB-AGENTS

The Fund may authorize one or more broker-dealers or other financial services
agents or sub-agents to accept purchase, redemption and exchange orders on the
Fund's behalf. In these cases, the Fund will be deemed to have received an order
when an authorized financial services agent or sub-agent accepts the order, and
your order will be priced at the Fund's NAV next computed after it is received
in good order by the financial services agent or sub-agent. Designated financial
services agents and sub-agents are responsible for transmitting accepted orders
and payment for the purchase of shares to the transfer agent within the time
period agreed upon by them. If payment is not received within the time
specified, your transaction may be cancelled, and the financial services agent
will be held responsible for any resulting fees or losses.

20
<PAGE> 23
DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS

The Fund intends to distribute virtually all of its net investment income and
net realized capital gains at least once a year. The Fund will automatically
reinvest your dividends and capital gain distributions in additional Fund shares
unless you elect to have them paid to you in cash on your account application.
If you elect to have your distributions paid in cash, the Fund will send a check
to your address of record.

A dividend from net investment income represents the income the Fund earns from
dividends and interest paid on its investments, after payment of the Fund's
expenses. The Fund intends to pay dividends quarterly. A capital gain is the
increase in the value of a security that the Fund holds. The Fund's gain is
"unrealized" until it sells a portfolio security. Each realized capital gain is
either short-term, long-term or unrecaptured Section 1250 capital gains. The tax
status of any capital gains distribution is determined by how long the Fund held
the underlying security that was sold, rather than how long you have held your
Fund shares. The Fund intends to pay capital gains annually, usually in
December.

The Fund may also receive distributions of unrecaptured Section 1250 capital
gains from REITs. To the extent the Fund receives such distributions,
unrecaptured Section 1250 capital gains will be distributed to shareholders of
the Fund.

You will participate in any Fund distributions that are declared starting the
day after your purchase is effective. Because the REITs the Fund invests in do
not provide complete information about the taxability of their distributions
under after the calendar year end, the Fund may not be able to determine how
much of its distribution is taxable to shareholders until after the January 31
deadline for issuing Form 1099-DIV. As a result, the Fund may request permission
from the Internal Revenue Service each year for an extension of time to issue
Form 1099-DIV until February 28.

Buying a dividend. Unless you invest in a tax-deferred retirement account (such
as an IRA), it is not to your advantage to buy shares of the Fund shortly before
it makes a distribution. This is known as "buying a dividend." Buying a dividend
can cost you money in taxes because you will receive, in the form of a taxable
distribution, a portion of the money you just invested (even if you elected to
have it reinvested in additional Fund shares). To avoid "buying a dividend,"
check the Fund's proposed distribution schedule before you invest by calling
1-800-___-____.

TAXES

You will be subject to income tax on all Fund distributions regardless of
whether you receive them in cash or elect to have them reinvested in Fund
shares. Dividend distributions and distributions of the Fund's net short-term
capital gains are taxable to you as ordinary income. Distributions of the Fund's
net long-term capital gains are taxable to you as long-term capital gains.
Distributions of unrecaptured Section 1250 capital gains are taxable to you as
ordinary

21
<PAGE> 24
income if you are in the 15% tax bracket or at a rate of 25% if you are in the
28% or higher tax bracket.

The Fund's REIT investments may generate significant non-cash deductions, such
as depreciation on real estate holdings, while having greater cash flow to
distribute to its shareholders. If a REIT distributes more cash than it has
taxable income, a return of capital results. The Fund may pay a return of
capital distribution to you by distributing more cash than its taxable income.
If you do not reinvest distributions, the cost basis of your shares will be
decreased by the amount of returned capital, which may result in a larger
capital gain when you sell your shares. Although a return of capital is
generally is not taxable to you upon distribution, it would be taxable to you as
a capital gain if your cost basis in the shares is reduced to zero. This could
occur if you do not reinvest distributions and the returns of capital are
significant.

If you sell or exchange your shares, any gain or loss is a taxable event. You
may also be subject to state and local income taxes on dividends or capital
gains from the sale or exchange of Fund shares.

This tax information provides only a general overview. It does not apply if you
invest in a tax-deferred retirement account such as an IRA. Please consult your
own tax adviser about the tax consequences of an investment in the Fund.

22
<PAGE> 25
[ LOGO]

LEND LEASE U.S. REAL ESTATE SECURITIES FUND

TRUSTEES
Susan J. Lloyd-Hurwitz

FUND DISTRIBUTOR
Sunstone Distribution Services, LLC
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202

TRANSFER AGENT
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 315
Milwaukee, Wisconsin 53202

CUSTODIAN
Wilmington Trust Company
1100 North Market, 9th Floor
Wilmington, Delaware 19890

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

AUDITORS

For More Information

Additional information about the Fund, including the Fund's
Statement of Additional Information, is available to you free upon request. The
Statement of Additional Information is incorporated by reference into (is
legally part of) this Prospectus.

By Telephone: Call 1-800-________

By Mail: Write to: LEND LEASE FUNDS
P.O. Box ___
Milwaukee, Wisconsin
53202
By E-Mail:

On the Internet: Electronic copies are available on our
website at http://www.________________

23
<PAGE> 26
Text-only copies of these documents and other information about the Fund are
also available on the SEC's website at http://www.sec.gov, by sending a request
and a duplication fee to the SEC's Public Reference Section, Washington, D.C.
20549-6009, or by visiting the SEC's Public Reference Room in Washington, DC
(1-800-SEC-0330).

INVESTMENT COMPANY ACT REGISTRATION NUMBER _______________.

24
<PAGE> 27
LEND LEASE FUNDS

LEND LEASE U.S. REAL ESTATE SECURITIES FUND

CLASS K AND CLASS Y SHARES

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

PROSPECTUS

December 31, 1999

<TABLE>
<CAPTION>
Page

<S> <C>
KEY INFORMATION ABOUT THE FUND...............................................
Investment Objective.................................................
Principal Investment Strategies......................................
Principal Risk Factors...............................................

FEES AND EXPENSES OF THE FUND................................................
Shareholder Fees.....................................................
Fees and Expenses....................................................
Example

OTHER INFORMATION REGARDING INVESTMENT PRACTICES.............................
REITS................................................................
Year 2000............................................................
Defensive Investing..................................................

MANAGEMENT...................................................................
Investment Adviser..................................................
Sub-Investment Adviser .............................................
Portfolio Managers..................................................

BUYING, SELLING AND EXCHANGING SHARES........................................
Before You Invest...................................................
How to Purchase Shares..............................................
How to Sell Shares..................................................
How to Exchange Shares..............................................
Making Changes to Your Account......................................

SPECIAL FEATURES AND SERVICES................................................
Retirement Account Options..........................................
ACH Transactions....................................................
Automated Telephone Service.........................................
Automatic Investment Plan...........................................

OTHER SHAREHOLDER INFORMATION................................................
Shareholder Communications..........................................
Multiple Classes....................................................
Transactions Through Financial Services Agents and Sub-Agent........

DIVIDENDS, DISTRIBUTIONS AND TAXES...........................................
Dividends and Distributions.........................................

</TABLE>

(i)
<PAGE> 29
<TABLE>
<CAPTION>
<S> <C>

Taxes...............................................................
</TABLE>

(ii)
<PAGE> 30
KEY INFORMATION ABOUT THE FUND

This Prospectus contains important information for anyone interested in
investing in the Class K or Class Y shares of LEND LEASE U.S. REAL ESTATE
SECURITIES FUND (the "Fund"), a series of LEND LEASE FUNDS. Please read this
document carefully before you invest and keep it for future reference. You
should base your purchase of shares of the Fund on your own goals, risk
preferences and investment time horizons.

INVESTMENT OBJECTIVE

The Fund's objective is total return from a combination of dividend income and
long-term growth by investing principally in real estate securities.

PRINCIPAL INVESTMENT STRATEGIES

The Fund seeks to achieve its objective by investing at least 85% of its assets
in equity securities of companies principally engaged in the U.S. real estate
industry.

As a means of maintaining consistent investment performance and preserving
capital in adverse market conditions, the Fund may invest up to 15% of its
assets in cash or cash equivalents.

3
<PAGE> 31
A company is considered to be principally engaged in the U.S. real estate
industry if the Fund's Sub-Adviser determines that the company (i) derives at
least 50% of its revenues or profits from the ownership, renting, leasing,
construction, management, development, financing or sale of commercial,
industrial and residential real estate or related interests or (ii) has at least
50% of the value of its assets invested in U.S. commercial, industrial and
residential real estate.

PRINCIPAL RISK FACTORS

4
<PAGE> 32
currently favor the real estate industry or the Fund's investment approach, the
Fund's gains may not be as big or its losses may be bigger than other equity
funds investing in different industries or using different investment
approaches.

Non-diversified status. The Fund is not "diversified" within the meaning of the
Investment Company Act of 1940. This means that, compared with "diversified"
funds, it may invest a relatively greater portion of its assets in any single
issuer. As a result, the Fund may be more susceptible to negative developments
affecting a single issuer.

FUND PERFORMANCE

FEES AND EXPENSES OF THE FUND

This table describes the fees and expenses that you may pay if you buy
and hold shares of the Fund.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
CLASS K AND CLASS Y SHARES
<TABLE>
<CAPTION>
<S> <C>
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of the offering price).............................. None
Maximum Deferred Sales Charge (Load).................................... None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends
and Other Distributions.............................................. None
Redemption Fee ......................................................... None
Exchange Fee............................................................ None
</TABLE>

FEES AND EXPENSES

CLASS K SHARES

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
<S> <C>
Management Fee*............................................................ .80%
Distribution and Service (12b-1) Fees...................................... .25%
Other Expenses**........................................................... ___%
Total Annual Fund Operating Expenses***.................................... ___%
Fee Waivers [and/or Expense Reimbursement}................................. ___%
Net Expenses............................................................... 1.25%
</TABLE>

* The Management Fee is comprised of both the Adviser fee and the
Sub-Adviser fee.

** Because the Fund is new, Other Expenses are based on estimated amounts
for the current fiscal year.

5
<PAGE> 33
*** The Adviser has voluntarily agreed to limit the Total Annual Fund
Operating Expenses of Class K shares to ___% through January 31, 2003, subject
to later reimbursement by the Fund in certain circumstances. After January 31,
2003, the Adviser may terminate the expense limitation at any time.

CLASS Y SHARES

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
<TABLE>
<CAPTION>
<S> <C>
Management Fee*..................................................................... .80%
Distribution and Service (12b-1) Fees............................................... None
Other Expenses**.................................................................... ___%
Total Annual Fund Operating Expenses***............................................. ___%
Fee Waiver [and/or Expense Reimbursement]........................................... ___%
Net Expenses........................................................................ .97%
</TABLE>

* The Management Fee is comprised of both the Adviser fee and the
Sub-Adviser fee.

** Because the Fund is new, Other Expenses are based on estimated amounts
for the current fiscal year.

*** The Adviser has voluntarily agreed to limit the Total Annual Fund
Operating Expenses of Class Y shares to ___% through January 31, 2003, subject
to later reimbursement by the Fund in certain circumstances. After January 31,
2003 the Adviser may terminate the expense limitation at any time.

EXAMPLE

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Class K
Class Y
</TABLE>

+ Taking the current expense limitation into account, your costs for the Fund
would be:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
Class K
Class Y
</TABLE>

OTHER INFORMATION REGARDING INVESTMENT PRACTICES

6
<PAGE> 34
Companies or issuers in the U.S. real estate industry in which the Fund may
invest include among others: real estate investment trusts ("REITs"), companies
that invest in interests in real estate, real estate developers and brokers,
real estate operating companies ("REOCs"), companies with substantial real
estate holdings (such as hotel companies, and land-holding companies), as well
as companies whose products and services are significantly related to the real
estate industry such as building supply manufacturers, mortgage lenders and
mortgage servicing companies. A substantial portion of the Fund's portfolio at
any given time may be invested in REITs.

REITS

REOCS

YEAR 2000

7
<PAGE> 35
organizations to make their systems and products Year 2000 compliant. The Fund
cannot, however, be completely certain that all third parties on which it is
directly or indirectly dependent for services will be Year 2000 compliant in a
timely manner. In addition, the Fund is unable to predict the impact of this
problem on any portfolio company in which it has or may be invested. The Fund
will continue to monitor developments relating to the Year 2000 problem.

DEFENSIVE INVESTING

During unusual market conditions, the Fund may place up to 100% of its total
assets in cash or quality short-term debt securities including repurchase
agreements.

RESTRICTED AND ILLIQUID SECURITIES

REPURCHASE AGREEMENTS

INVESTMENT MANAGEMENT

WHO ARE LEND LEASE ROSEN AND LEND LEASE REAL ESTATE INVESTMENTS?

Lend Lease Real Estate Investments, Inc. (the Adviser), Monarch Tower, 3424
Peachtree Road, N.E., Suite 800, Atlanta, Georgia 30326, is the Fund's Adviser.
The Adviser is a wholly-owned indirect subsidiary of Lend Lease Corporation
Limited, an integrated property and financial service company listed on the
Australian and New Zealand stock exchanges with a market capitalization
exceeding U.S. $6 billion. The Adviser is a full-service real estate investment
advisor with substantial experience in investing and managing commercial real
estate assets for institutional lenders and owners. As of November 1, 1999, the
Adviser managed approximately $30.5 billion in U.S. assets on behalf of its
clients and investors in its funds, which include a wide variety of public and
corporate pension funds, insurance companies, endowments, foundations and
foreign institutions. The Adviser is also one of the leading advisors to pension
funds regarding investments in U.S. real estate. The Adviser is co-headquartered
in New York, New York and Atlanta, Georgia.

8
<PAGE> 36
Sub-Adviser. As of __________, assets under management were approximately $___
million. Lend Lease Rosen is a research driven investment management firm
managing assets principally on behalf of institutional investors. Lend Lease
Rosen uses both a fundamental (bottom up) and qualitative approach (top down) to
construct the investment portfolios it manages.

The Fund pays an annual fee of .80% of its average daily net assets for the
services provided by the Adviser and the Sub-Adviser.

The Adviser has voluntarily agreed to limit the Fund's total operating expenses
to __% of the Fund's average daily net assets through January 31, 2003. After
that date, the Adviser may modify or terminate the expense limitation at any
time. With respect to each waiver or reimbursement in connection with
maintaining the expense limitation, the Fund is obligated to repay the Adviser
the amount waived or reimbursed to the extent that repayment would not cause the
Fund's total operating expenses for the year in which the repayment is made to
exceed ______% of the Fund's average daily net assets. The Fund's repayment
obligation with respect to a particular waiver or reimbursement ends with the
third anniversary of the waiver or reimbursement.

PORTFOLIO MANAGERS

Michael Torres is co-president of the Sub-Adviser and has 13 years of real
estate and securities research experience. Mr. Torres joined the Sub-Adviser in
February 1995 and is responsible for its operations, client services and
research. Prior to joining the Sub-Adviser, Mr. Torres was Director of real
estate and Portfolio Manager at Wilshire Associates from 1990 to 1995. He has a
B.A. in architecture and a M.B.A. in economics from the University of
California, Berkeley.

BUYING, SELLING AND EXCHANGING SHARES

BEFORE YOU INVEST

9
<PAGE> 37
AVAILABLE SHARE CLASSES. The Fund offers investors three different classes of
shares - Class A, Class K and Class Y. Class K and Class Y shares are discussed
in this prospectus. The different classes represent investments in the same
portfolio of securities, but each class has different expenses and will likely
have different share prices. When you buy shares, remember to specify the class
of shares you want to buy.

- - Class K Shares. Class K shares are available only to Registered Investment
Advisers ("RIAs"). If you buy Class K shares, you will not pay an up-from
sales charge or "load", nor will you be subject to a redemption charge.
Your Class K shares will, however, be subject to a Distribution and Service
Fee. See "Distribution and Service Fee (12b-1 Plan)" for further
information.

- - Class Y Shares. If you buy Class Y shares, you will not pay an up-front
sales charge or "load", nor will you be subject to a redemption charge.

SELECTING A SHARE CLASS. If you are not an RIA and do not meet the minimum
investment amounts to purchase Class Y shares, you may want to consider Class A
shares which have the same minimum investment amounts as Class K shares but are
not limited to purchase by RIAs. Class A shares, which are sold by a different
prospectus, are subject to an up-front sales charge, redemption fee and
Distribution and Service Fees. Call 1-800-XXX-XXXX. You should be aware that
financial service firms may receive different compensation depending upon which
class of shares they sell.

Available forms of registration include:

- - Individual ownership. If you have reached the legal age of majority in your
state of residence, you may open an individual account.

- - Joint ownership. Two or more individuals may open an account together as
joint tenants with right of survivorship, tenants in common or as community
property.

- - Custodial account. You may open an account for a minor under the Uniform
Gift to Minors Act/Uniform Transfers to Minors Act for your state of
residence.

- - Business/trust ownership. Corporations, trusts, charitable organizations
and other businesses may open accounts.

- - IRAs and other tax-deferred accounts. The Fund offers a variety of
retirement accounts for individuals and institutions. Please refer to
"Retirement Account Options," below, for more information about these types
of accounts.

10
<PAGE> 38
<TABLE>
<CAPTION>

TYPE OF ACCOUNT INITIAL MINIMUM ADDITIONAL MINIMUM
PURCHASE PURCHASE
<S> <C> <C> <C> <C>
Regular (Individual, joint, CLASS K CLASS Y CLASS K CLASS Y
business or trust) $10,000 $250,000 $250 $10,000

IRA (including spousal, Roth and CLASS K CLASS Y CLASS K CLASS Y
SEP) $1,000 $250,000 $250 $10,000

Gifts to Minors (UTMA/UGMA) CLASS K CLASS Y CLASS K CLASS Y
$10,000 $250,000 $250 $10,000

Automatic Investment Plan CLASS K CLASS Y CLASS K CLASS Y
$5,000 * $250 *
</TABLE>

* The Automatic Investment Plan is not available for Class Y shares of the Fund.

HOW TO PURCHASE SHARES

You can buy shares directly from the Fund or through an RIA, a broker-dealer or
other institution that the Fund has authorized to sell shares.

CLASS K SHARES. Class K shares are sold at net asset value per share without an
initial sales charge and are available for sale only to RIAs.

CLASS Y SHARES. Class Y shares are sold at net asset value per share without an
initial sales charge.

To open an account or buy additional shares from the Fund, just follow these
steps:

11
<PAGE> 39
<TABLE>
<CAPTION>
TO OPEN AN ACCOUNT TO ADD TO AN EXISTING ACCOUNT

<S> <C>
BY MAIL: BY MAIL:
- - Complete and sign the account application or - Complete the investment slip that is
an IRA application. If you do not complete the included in your account statement, and write
application properly, your purchase may be your account number on your check.
delayed or rejected. - If you no longer have your investment
- - Make your check payable to "Lend Lease U.S. slip, please reference your name, account
Real Estate Securities Fund." The Fund does not number and address on your check.
accept cash, third party checks, travelers - Make your check payable to "Lend Lease
checks or checks drawn on banks outside the U.S. U.S. Real Estate Securities Fund."
- - For IRA accounts, please specify the year for
which the contributions is made.

MAIL YOUR APPLICATION AND CHECK TO: MAIL THE SLIP AND THE CHECK TO:
Lend Lease U.S. Real Estate Securities Fund Lend Lease U.S. Real Estate Securities Fund
P.O. Box ___ P.O. Box ___
Milwaukee, WI 53201-____ Milwaukee, WI 53201-____

BY OVERNIGHT COURIER, SEND TO:
Lend Lease U.S. Real Estate Securities Fund
207 E. Buffalo Street
Suite 315
Milwaukee, WI 53202

BY TELEPHONE: BY TELEPHONE:
- You automatically have the privilege to
You may not make your purchase additional shares by telephone
initial purchase by unless you have declined this service on
telephone. your account application. You may call
1-800-___-____ to purchase shares for
an existing account.

- Investments made by electronic funds
transfer must be in amounts of at least
$___ and not greater than $_____.

</TABLE>

12
<PAGE> 40

<TABLE>
<CAPTION>
<S> <C>
BY WIRE: BY WIRE:
- - To purchase shares by wire, the Fund must Send your investment to Lend Lease
have received a completed application and issued U.S. Real Estate Securities Fund
an account number to you. by following the instructions
Call 1-800-___-____ for instructions listed in the column to the left.
prior to wiring the funds.
- - Send your investment to Lend Lease U.S. Real
Estate Securities Fund with these instructions:

ABA #__________
For Credit to ___________
A/C #_______________
For further credit to: investor account
number; name(s) of investor(s);
SSN or TIN; name and class of Fund
</TABLE>

ADDITIONAL PURCHASE INFORMATION.

- - The Fund does not issue certificates for shares.

13
<PAGE> 41
- - Once you place your order, you may not cancel or revoke it. The Fund may
reject a purchase order for any reason.

HOW TO SELL SHARES

BY MAIL:

- - Send a letter of instruction that includes your account number, the Fund
name, the dollar value or number of shares you want to sell, and how and
where to send the proceeds.

- - Sign the request exactly as the shares are registered. All registered
owners must sign.

- - Include a signature guarantee, if necessary (see "Signature Guarantees,"
below),

MAIL YOUR REQUEST TO:
Lend Lease U.S. Real Estate Securities Fund
P.O. Box ___
Milwaukee, WI 53201-____

BY OVERNIGHT COURIER, SEND TO:
Lend Lease U.S. Real Estate Securities Fund
207 E. Buffalo Street
Suite 315
Milwaukee, WI 53202

14
<PAGE> 42
BY TELEPHONE:

- - You automatically have the privilege to redeem shares by telephone unless
you have declined this option on your account application.

- - Call 1-800-___-____, between 8:00 a.m. and 8:00 p.m. Eastern time. You may
redeem as little as $1,000 and as much as $20,000 by telephone.

- - Telephone redemptions are not available for retirement plan accounts.

BY WIRE:

- - If you choose to redeem your shares by wire, your redemption proceeds will
be sent to your bank account of record. A $10 fee will be deducted from
your proceeds for Class A shares.

ADDITIONAL REDEMPTION PROVISIONS

- - Once we receive your order to sell shares, you may not revoke or cancel it.
We cannot accept an order to sell that specifies a particular date, price
or any other special conditions.

- - If you are redeeming from an IRA, please tell us the proper tax withholding
on your redemption request. If you did not make a tax election on your IRA
application, we will automatically withhold 10% of your redemption
proceeds. (The Fund charges $15 for a redemption from an IRA account.)

15
<PAGE> 43
- - If your redemption request exceeds the amount that you currently have in
your account, your entire account will be redeemed. The automatic purchase
plan that you have initiated for the account will be cancelled.

TELEPHONE TRANSACTIONS

SIGNATURE GUARANTEES. The Fund will require the signature guarantee of each
account owner to redeem shares in the following situations:

- - to change ownership on your account;

- - to send redemption proceeds to a different address than is currently on the
account;

- - to have the proceeds paid to someone other than the account's owner;

- - to transmit redemption proceeds by federal wire transfer or ACH to a bank
other than your bank of record;

- - if a change of address request has been received by the transfer agent
within the last 30 days;

- - if your redemption is for more than $20,000.

16
<PAGE> 44
SMALL ACCOUNTS. All Fund account owners share the high cost of maintaining
accounts with low balances. To reduce this cost, the Fund reserves the right to
close an account when a redemption or exchange leaves your account balance below
$8,000 for Class A shares or $200,000 for Class Y shares, or you discontinue the
automatic investment plan before you reach the minimum. We will notify you in
writing before we close your account, and you will have 60 days to add
additional money to bring the balance up to $8,000 for Class A shares or
$200,000 for Class Y shares or to renew your automatic investment plan. This
provision does not apply to retirement plan accounts or UGMA/UTMA accounts.

MAKING CHANGES TO YOUR ACCOUNT

You may call or write the Fund to make changes to your account. Common changes
include:

Address changes. The easiest way to notify the Fund is to return the stub from a
recent confirmation or statement. You can also call 1-800-___-____ with any
changes.

SPECIAL FEATURES AND SERVICES

RETIREMENT ACCOUNT OPTIONS
The Fund offers a variety of retirement accounts for individuals and
organizations. These accounts may offer you tax advantages. For information on
establishing retirement accounts, please call 1-800-___-____. You should consult
with your legal and/or tax adviser before you establish a retirement account.

The Fund currently offers the following kinds of retirement accounts:

- - Traditional IRA (including spousal IRA)

- - "Rollover"

- - IRA

- - Roth IRA

- - SEP-IRA

- - Simple IRA

17
<PAGE> 45
The Fund is also available for investment by other retirement plans. Please call
1-800-XXX-XXXX for additional information.

OTHER SHAREHOLDER INFORMATION

SHAREHOLDER COMMUNICATIONS

Semi-annual and annual reports. The Fund sends semi-annual and annual reports to
its shareholders. These reports provide financial information on your
investments and give you a

18
<PAGE> 46
"snapshot" of the Fund's portfolio holdings at the end of its semi-annual and
fiscal year periods. Additionally, the annual report discusses the factors that
materially affected the Fund's performance for its most recently completed year,
including relevant market conditions and the investment strategies and
techniques that were used. You may consent to receive the semi-annual and annual
reports via electronic mail, over the Internet. Before receiving these documents
via electronic mail, you will need to consent to this form of delivery on the
application.

Form 1099. Each year you will receive a Form 1099-DIV, showing the source of
distributions for the preceding year and a Form 1099-B showing any shares you
sold during the year.

Form 1099R. If you received a distribution from an IRA account during the year,
you will receive a Form 1099R.

Form 5498. If you contributed to an IRA during the year, you will receive a Form
5498 verifying your contribution.

TRANSACTIONS THROUGH FINANCIAL SERVICES AGENTS AND SUB-AGENTS

DISTRIBUTION AND SERVICE FEES (12b-1 PLAN)

The Fund has adopted a 12b-1 Plan for its Class K shares under which the Fund
pays the Distributor 0.25% of the average daily net assets attributable to Class
K shares for certain service and distribution expenses incurred by this class of
shares. (This type of plan is named after the rule under the securities laws
which permits it.) Because 12b-1 Plan fees paid by the Fund are an ongoing
expense, they will increase the cost of a Fund investment, and over time, may
cost an investor more than other types of sales charges.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS

19
<PAGE> 47
The Fund intends to distribute virtually all of its net investment income and
net realized capital gains at least once a year. The Fund will automatically
reinvest your dividends and capital gain distributions in additional Fund shares
unless you elect to have them paid to you in cash on your account application.
If you elect to have your distributions paid in cash, the Fund will send a check
to your address of record.

TAXES
You will be subject to income tax on all Fund distributions regardless of
whether you receive them in cash or elect to have them reinvested in Fund
shares. Dividend distributions and distributions of the Fund's net short-term
capital gains are taxable to you as ordinary income. Distributions of the Fund's
net long-term capital gains are taxable to you as long-term capital gains.
Distributions of unrecaptured Section 1250 capital gains are taxable to you as
ordinary income if you are in the 15% tax bracket or at a rate of 25% if you are
in the 28% or higher tax bracket.

20
<PAGE> 48
results. The Fund may pay a return of capital distribution to you by
distributing more cash than its taxable income. If you do not reinvest
distributions, the cost basis of your shares will be decreased by the amount of
returned capital, which may result in a larger capital gain when you sell your
shares. Although a return of capital is generally is not taxable to you upon
distribution, it would be taxable to you as a capital gain if your cost basis in
the shares is reduced to zero. This could occur if you do not reinvest
distributions and the returns of capital are significant.

21
<PAGE> 49
[ LOGO]

LEND LEASE U.S. REAL ESTATE SECURITIES FUND

TRUSTEES
Susan J. Lloyd-Hurwitz

FUND DISTRIBUTOR
Sunstone Distribution Services, LLC
207 East Buffalo Street, Suite 400
Milwaukee, Wisconsin 53202

TRANSFER AGENT
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 315
Milwaukee, Wisconsin 53202

CUSTODIAN
Wilmington Trust Company
1100 North Market Street, 9th Floor
Wilmington, Delaware 19890

LEGAL COUNSEL
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

AUDITORS

For More Information

By Telephone: Call 1-800-________

By Mail: Write to: LEND LEASE FUNDS
P.O. Box ___
Milwaukee, Wisconsin 53202
By E-Mail:

On the Internet: Electronic copies are available on our website at
http://www.________________

Text-only copies of these documents and other information about the Fund are
also available on the SEC's website at http://www.sec.gov, by sending a request
and a duplication fee to the SEC's

22
<PAGE> 50
Public Reference Section, Washington, D.C. 20549-6009, or by visiting the SEC's
Public Reference Room in Washington, DC (1-800-SEC-0330).

INVESTMENT COMPANY ACT REGISTRATION NUMBER _______________.

23
<PAGE> 51
STATEMENT OF ADDITIONAL INFORMATION

FOR

LEND LEASE FUNDS

LEND LEASE U.S. REAL ESTATE SECURITIES FUND

This Statement of Additional Information describes the Class A, Class K
and Class Y shares of Lend Lease U.S. Real Estate Securities Fund (the "Fund")
and should be read in conjunction with the Prospectus dated December 31, 1999
describing the class in which you intend to invest. The Fund's Class A shares
are described in one Prospectus; the Fund's Class K and Class Y shares are
described in another. This Statement of Additional Information is incorporated
by reference in its entirety into each of these Prospectuses. Because this
Statement of Additional Information is not itself a prospectus, you should not
make an investment in shares of the Fund based solely on the information
contained herein. You may obtain copies of each Prospectus without charge by
calling 1-800-XXX-XXXX or by writing to Lend Lease Funds, P.O. Box XXX,
Milwaukee, Wisconsin 53201-XXXX.

This Statement of Additional Information is dated December 31, 1999.
<PAGE> 52
TABLE OF CONTENTS

Page

FUND ORGANIZATION.............................................................
INVESTMENT POLICIES AND PRACTICES.............................................
Investment Restrictions..............................................
Investment Strategies and Risks......................................
MANAGEMENT OF THE FUND........................................................
Trustees and Officers................................................
Control Persons and Principal Holders of Securities..................
INVESTMENT ADVISORY AND OTHER SERVICES........................................
Investment Adviser...................................................
Sub-Investment Adviser...............................................
Administration and Fund Accounting...................................
Transfer Agent and Dividend-Paying Agent.............................
Custodian............................................................
Distributor..........................................................
Legal Counsel .......................................................
Independent Accountants..............................................
DISTRIBUTION OF SHARES........................................................
PORTFOLIO TRANSACTIONS AND BROKERAGE..........................................
CAPITAL STRUCTURE.............................................................
TAXES ........................................................................
General..............................................................
Original Issue Discount..............................................
Options, Futures and Foreign Currency Forward Contracts; Straddles...
Currency Fluctuations - "Section 988" Gains or Losses................
Passive Foreign Investment Companies.................................
Distributions........................................................
Disposition of Shares................................................
Back-up Withholding..................................................
Other Taxation.......................................................
PURCHASE, REDEMPTION AND PRICING OF SHARES
Determination of Net Asset Value.....................................
Reduced Sales Charges................................................
Retirement Accounts..................................................
Suspension of Redemptions............................................
Redemptions in Kind..................................................
PERFORMANCE INFORMATION.......................................................
MISCELLANEOUS.................................................................
FINANCIAL STATEMENTS..........................................................
APPENDIX A (Description of Securities Ratings)................................

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

2
<PAGE> 53
FUND ORGANIZATION

Lend Lease Funds is a non-diversified, open-end, management investment
company organized as a Delaware business trust on XXXXX, 19XX (the "Trust"). The
Trust is authorized by its Declaration of Trust to issue an unlimited number of
shares of beneficial interest in series and classes. The Trust currently offers
one series of shares, Lend Lease U.S. Real Estate Securities Fund (the "Fund").

INVESTMENT POLICIES AND PRACTICES

INVESTMENT RESTRICTIONS

Consistent with the Fund's investment objective, the Fund has adopted
certain investment restrictions. Unless otherwise noted, whenever an investment
restriction states a maximum percentage of the Fund's assets that may be
invested in any security or other asset, such percentage restriction will be
determined immediately after and as a result of the Fund's acquisition of such
security or other asset.

The Fund's fundamental restrictions cannot be changed without the
approval of the holders of the lesser of: (i) 67% of the Fund's shares present
or represented at a shareholders meeting at which the holders of more than 50%
of such shares are present or represented; or (ii) more than 50% of the
outstanding shares of the Fund. Other policies and restrictions set forth in
this Statement of Additional Information may be changed by the Trustees without
shareholder approval consistent with applicable law.

The following seven numbered limitations are the Fund's fundamental
investment restrictions in their entirety. Except as otherwise noted, the Fund
may not:

1. Issue senior securities, except as permitted under the Investment
Company Act of 1940, as amended (the "Investment Company Act").

2. Make loans, except that the Fund may (i) lend portfolio securities
in accordance with the Fund's investment policies up to 33% of the Fund's total
assets taken at market value, (ii) enter into repurchase agreements, (iii)
purchase all or a portion of an issue of debt securities, bank loan
participation interests, bank certificates of deposit, bankers' acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities and (iv) lend portfolio securities and
participate in an interfund lending program with other series of the Trust
provided that no such loan may be made if, as a result, the aggregate of such
loans would exceed 33% of the value of the Fund's total assets.

3
<PAGE> 54
3. Purchase the securities of any issuer if, as a result, 25% or more
of the value of its total assets, determined at the time an investment is made,
exclusive of U.S. government securities, are in securities issued by companies
primarily engaged in the same industry.

4. Act as an underwriter or distributor of securities other than shares
of the Fund except to the extent that the Fund's participation as part of a
group in bidding or by bidding alone, for the purchase of permissible
investments directly from an issuer or selling shareholders for the Fund's own
portfolio may be deemed to be an underwriting, and except to the extent that the
Fund may be deemed an underwriter under the Securities Act of 1933, as amended
(the "Securities Act"), by virtue of disposing of portfolio securities.

5. Purchase or sell real estate, except that the Fund may (i) acquire
or lease office space for its own use, (ii) invest in securities of issuers that
invest or deal in real estate or interests therein, (iii) invest in securities
that are secured by real estate or interests therein, (iv) purchase and sell
mortgage-related securities, and (v) hold and sell real estate acquired by the
Fund as a result of the ownership of securities.

6. Borrow money, except (i) in amounts not to exceed 33% of the value
of the Fund's total assets (including the amount borrowed) taken at market value
from banks or through reverse repurchase agreements or forward roll
transactions, (ii) up to an additional 5% of its total assets for temporary
purposes, (iii) in connection with short-term credits as may be necessary for
the clearance of purchases and sales of portfolio securities, (iv) to the extent
otherwise permitted by the Investment Company Act or any exemption therefrom
granted by the SEC and (v) the Fund may purchase securities on margin to the
extent permitted by applicable law. For purposes of this investment restriction,
investments in short sales, roll transactions, futures contracts, options on
futures contracts, securities or indices and forward commitments, entered into
in accordance with the Fund's investment policies, shall not constitute
borrowing.

7. Purchase or sell physical commodities or commodities contracts
unless acquired as a result of ownership of securities or other instruments (but
this shall not prevent the Fund from engaging in transactions involving options
on securities, securities indices and currency, futures contracts on securities,
securities indices and currency and options on such futures, forward foreign
currency exchange contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with the Fund's
investment policies, or from investing in securities or other instruments backed
by physical commodities).

Unless otherwise provided, for purposes of investment
restriction (3) above, the term "industry" shall be defined by reference to the
SEC Industry Codes set forth in the Directory of Companies Required to File
Annual Reports with the Securities and Exchange Commission.

INVESTMENT STRATEGIES AND RISKS

The Prospectus describes the Fund's investment objective, as well as the
principal investment strategies used to achieve that objective and the principal
risks associated with such strategy. The following information supplements the
discussion about the Fund set forth in the Prospectus

4
<PAGE> 55
under the heading "Key Information About the Fund" and "Other Information
Regarding Investment Practices."

TEMPORARY DEFENSIVE MEASURES. The Fund may increase its investment in
government securities, and other short-term, interest-bearing securities without
regard to the Fund's otherwise applicable percentage limits, policies or its
normal investment emphasis, when it believes market conditions warrant a
temporary defensive position. Taking larger positions in such short-term
investments may serve as a means of preserving capital in unfavorable market
conditions. When in a defensive position, the Fund could miss the opportunity to
participate in any stock or bond market advances that occur during those
periods, which the Fund might have been able to participate in if it had
remained more fully invested.

NON-DIVERSIFICATION. The Fund is classified as a "non-diversified" Fund
under the Investment Company Act, which means that the Fund is not limited by
that Act in the proportion of its assets that it may invest in the securities of
a single issuer. The Fund's net asset value may be more volatile than that of a
more-widely diversified fund because the Fund invests more of its assets in a
smaller number of issuers. Consequently, the Fund may be more vulnerable to any
single economic, political or regulatory occurrence, and the gains or losses on
a single stock will have a greater impact on the Fund's net asset value.

PORTFOLIO TURNOVER RATE. The Fund intends to have a portfolio turnover
rate below 80%. The portfolio turnover rate for the Fund is calculated by
dividing the lesser of purchases or sales of portfolio investments for the
reporting period by the monthly average value of the portfolio investments owned
during the reporting period. A 100% portfolio turnover rate results, for
example, if the equivalent of all the securities in the Fund's portfolio are
replaced in a one year period. The calculation excludes all securities,
including options, whose maturities or expiration dates at the time of
acquisition are one year or less. Portfolio turnover may vary greatly from year
to year as well as within a particular year, and may be affected by cash
requirements for redemption of shares. The Fund is not restricted by policy with
regard to portfolio turnover and will make changes in its investment portfolio
from time to time as business and economic conditions as well as market prices
may dictate. Higher portfolio turnover rates result in correspondingly higher
brokerage costs for the Fund. Although the existence of a higher portfolio
turnover rate has no direct correlation to the tax liability of the Fund, sales
of certain stocks will result in realized gains, and, possibly, in increased
taxable distributions to shareholders.

U.S. GOVERNMENT OBLIGATIONS. As a temporary defensive measure, the Fund
may invest in obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. Some of the obligations purchased by the Fund,
such as U.S. Treasury bills, notes and bonds, are backed by the full faith and
credit of the U.S. Government and are guaranteed as to both principal and
interest by the U.S. Treasury. While the obligations of many of the agencies and
instrumentalities of the U.S. Government are not direct obligations of the U.S.
Treasury, they are generally backed indirectly by the U.S. Government. Some of
the agencies are indirectly backed by their right to borrow from the U.S.
Government. Others are supported solely by the credit of the agency or
instrumentality itself, but are given additional support due to the U.S.
Treasury's authority to purchase their outstanding debt obligations. However, no
assurance can be given

5
<PAGE> 56
that the U.S. Government would provide financial support to U.S.
Government-established or sponsored agencies where it is not obligated to do so
by law. The U.S. Government does not guarantee the market value or current yield
of these obligations, and the U.S. Government's guarantee does not extend to the
Fund itself.

FOREIGN SECURITIES. The Fund may invest in securities of foreign
issuers which are publicly traded in the United States, either directly or
through sponsored and unsponsored American Depositary Receipts ("ADRs"). ADRs
typically are issued by a U.S. bank or trust company and evidence ownership of
underlying securities issued by a foreign corporation. Unsponsored ADRs differ
from sponsored ADRs in that the establishment of unsponsored ADRs is not
approved by the issuer of the underlying securities. As a result, available
information concerning the issuer may not be as current or reliable as the
information for sponsored ADRs, and the price of unsponsored ADRs may be more
volatile.

Investments in foreign securities involve special risks and costs in
addition to those inherent in domestic investments. Political, economic or
social instability of the issuer or the country of issue, the possibility of
expropriation or confiscatory taxation, limitations on the removal of assets or
diplomatic developments, and the possibility of adverse changes in investment or
exchange control regulations are among the inherent risks. Foreign companies are
not subject to the regulatory requirements of U.S. companies and, as such, there
may be less publicly available information about such companies. Moreover,
foreign companies are not subject to uniform accounting, auditing and financial
reporting standards and requirements comparable to those applicable to U.S.
companies. Dividends and interest payable on the Fund's foreign portfolio
securities may be subject to foreign withholding taxes. To the extent such taxes
are not offset by credits or deductions allowed to investors under U.S. federal
income tax law, such taxes may reduce the net return to shareholders. Because of
these and other factors, securities of foreign companies acquired by the Fund
may be subject to greater fluctuation than securities of domestic companies.

Changes in foreign currency exchange rates will affect the value of the
Fund's portfolio securities that are denominated or quoted in currencies other
than the U.S. dollar, as well as the unrealized appreciation or depreciation of
such investments insofar as U.S. investors are concerned. If the foreign
currency in which a security is denominated appreciates against the U.S. dollar,
the dollar value of the security will increase. Conversely, a decline in the
exchange rate of the foreign currency against the U.S. dollar would adversely
affect the dollar value of the foreign securities. Foreign currency exchange
rates are determined by forces of supply and demand on the foreign exchange
markets, which are in turn affected by the international balance of payments,
government intervention, speculation, other economic and financial conditions
and other factors.

SECURITIES OF COMPANIES WITH LIMITED OPERATING HISTORIES. The Fund may
invest in securities of companies with limited operating histories. The Fund
considers these to be securities of companies with a record of less than three
years' continuous operation, including the operations of any predecessors and
parents. Because these companies have only a limited operating history, it is
more difficult to evaluate the company's growth prospects. As a result,
investment decisions for these securities may place a greater emphasis on
current or planned

6
<PAGE> 57
projects and the reputation and experience of the company's management and less
emphasis on fundamental valuation factors than would be the case for more mature
companies. In addition, many of these companies may also be small companies and
involve the risks and price volatility associated with investments in smaller
companies.

SECURITIES OF SMALLER COMPANIES. The Fund may invest in securities of
companies with small or mid-sized market capitalizations. An investment in
companies with smaller capitalizations involves greater risks than investing in
larger, more established companies. Smaller company stocks may be subject to
more abrupt or erratic price movements, because the stocks are traded in lower
volumes in fewer markets and their issuers are more sensitive to changing
conditions and have less certain growth prospects. Smaller companies in which
the Fund invests may have limited holdings, markets or financial resources, or
may be dependent on a small management group. Smaller companies also may be less
significant factors within their industries or industry sectors and may have
difficulty withstanding competition from larger companies. While smaller
companies may be subject to these additional risks, they may also realize more
substantial growth than larger or more established companies.

SPECIAL SITUATIONS. The Fund may also invest in securities of companies
that have recently experienced or are anticipated to experience a significant
change in structure, management, products or services or other special situation
that may significantly affect the value of their securities. Examples of special
situations are companies being reorganized or merged, companies emerging from
bankruptcy, companies introducing unusual new products or which enjoy particular
tax advantages. Other examples include companies experiencing changes in senior
management, extraordinary corporate events, significant changes in cost or
capital structure or which are believed to be probable takeover candidates. The
opportunity to invest in special situations, however, is limited and depends in
part on the market's assessment of these companies and their circumstances. By
its nature, a "special situation" company involves to some degree a break with
the company's past experience. This creates greater uncertainty and potential
risk of loss than if the company were operating according to long-established
patterns. In addition, stocks of companies in special situations may decline or
not appreciate as expected if an anticipated change or development does not
occur or is not assessed by the market as favorably as expected.

ILLIQUID AND RESTRICTED SECURITIES. The Fund is authorized to invest up
to 15% of its net assets in securities which are illiquid or not readily
marketable because they are subject to restrictions on their resale ("restricted
securities") or because, based upon their nature or the market for such
securities, no ready market is available. Investments in illiquid securities
involve certain risks to the extent that the Fund may be unable to dispose of
such a security at the time desired or at a reasonable price or, in some cases,
may be unable to dispose of it at all. In addition, in order to resell a
restricted security, the Fund might have to incur the potentially substantial
expense and delay associated with effecting registration. The Fund may have to
lower the price, sell other portfolio securities instead or forego an investment
opportunity, any of which could have a negative impact on Fund management or
performance. Because illiquid and restricted securities may be difficult to sell
at an acceptable price, they may be subject to greater volatility and may result
in a loss to the Fund.

7
<PAGE> 58
The Board has delegated to the Sub-Adviser the day-to-day determination
of the liquidity of a security, although it has retained oversight and ultimate
responsibility for such determinations. Although no definite quality criteria
are used, the Sub-Adviser considers such factors as (i) the nature of the market
for a security (including the institutional, private or international resale
market), (ii) the terms of these securities or other instruments allowing for
the disposition to a third party or the issuer thereof (e.g., certain repurchase
obligations and demand instruments), (iii) the availability of market quotations
(e.g., for securities quoted in PORTAL system), and (iv) other permissible
relevant factors. Certain securities are deemed illiquid by the Securities and
Exchange Commission (the "SEC"), including repurchase agreements maturing in
more than seven days and options not listed on a securities exchange or not
issued by the Options Clearing Corporation. These securities will be treated as
illiquid and subject to the Fund's limitation on illiquid securities. Because an
active market may not exist for illiquid securities, the Fund may experience
delays and additional cost when trying to sell illiquid securities.

Restricted securities may be sold in privately negotiated or other
exempt transactions, qualified non-U.S. transactions, such as under Regulation
S, or in a public offering with respect to which a registration statement is in
effect under the Securities Act. Where registration is required, the Fund may be
obligated to pay all or part of the registration expenses and a considerable
time may elapse between the decision to sell and the sale date. If, during such
period, adverse market conditions were to develop, the Fund might obtain a less
favorable price than prevailed when it decided to sell. Restricted securities
will be priced at fair value as determined in good faith by the Board.

In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including repurchase
agreements, commercial paper, foreign securities, municipal securities and
corporate bonds and notes. The Fund may buy or sell restricted securities in
accordance with Rule 144A under the 1933 Act ("Rule 144A Securities").
Securities may be resold pursuant to Rule 144A under certain circumstances only
to qualified institutional buyers as defined in the rule, and the markets and
trading practices for such securities are relatively new and still developing;
depending on the development of such markets, such Rule 144A Securities may be
deemed to be liquid as determined by or in accordance with methods adopted by
the Trustees. In all other cases, however, securities subject to restrictions on
resale will be deemed illiquid. The Sub-Adviser will determine the liquidity of
Rule 144A Securities under the supervision of the Board of Trustees using
various factors such as (1) the frequency of trades and quotations, (2) the
number of dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make the market, (4) the nature of the security (including any
demand or tender features) and (5) the likelihood of continued marketability and
credit quality of the issuer. Investments in Rule 144A Securities could have the
effect of increasing the level of the Fund's illiquidity to the extent that
qualified institutional buyers become, for a time, disinterested in purchasing
such securities. Also, the Fund may be adversely impacted by the possible
illiquidity and subjective valuation of such securities in the absence of a
market for them.

CONVERTIBLE SECURITIES. The Fund may invest in convertible securities.
A convertible security may be converted either at a stated price or rate within
a specified period of time into a

8
<PAGE> 59
specified number of shares of common stock. By investing in convertible
securities, the Fund seeks the opportunity, through the conversion feature, to
participate in a portion of the capital appreciation of the common stock into
which the securities are convertible, while earning higher current income than
is available from the common stock. Convertible securities entitle the holder to
receive interest paid or accrued on debt or the dividend paid on preferred stock
until the convertible securities mature or are redeemed, converted or exchanged.
Prior to conversion, convertible securities have characteristics similar to
ordinary debt securities or preferred stocks in that they normally provide a
stable stream of income with generally higher yields than those of common stock
of the same or similar issuers. Convertible securities rank senior to common
stock in a corporation's capital structure.

In selecting convertible securities, the Fund will consider, among
other factors, its evaluation of the creditworthiness of the issuers of the
securities; the interest or dividend income generated by the securities; the
potential for capital appreciation of the securities and the underlying common
stocks; the prices of the securities relative to other comparable securities and
to the underlying common stocks; whether the securities are entitled to the
benefits of sinking funds or other protective conditions; the diversification of
the Fund's portfolio as to issuers; and whether the securities are rated by a
rating agency and, if so, the ratings assigned.

The value of convertible securities is a function of their investment
value (determined by yield in comparison with the yields of other securities of
comparable maturity and quality that do not have a conversion privilege) and
their conversion value (their worth, at market value, if converted into the
underlying common stock). The investment value of convertible securities is
influenced by changes in interest rates, with investment value declining as
interest rates increase and increasing as interest rates decline, and by the
credit standing of the issuer and other factors. The conversion value of
convertible securities is determined by the market price of the underlying
common stock. If the conversion value is low relative to the investment value,
the price of the convertible securities is governed principally by their
investment value. To the extent the market price of the underlying common stock
approaches or exceeds the conversion price, the price of the convertible
securities will be increasingly influenced by their conversion value. In
addition, convertible securities generally sell at a premium over their
conversion value determined by the extent to which investors place value on the
right to acquire the underlying common stock while holding fixed income
securities.

The Fund may realize capital appreciation from an improvement in the
credit standing of an issuer whose securities are held in the Fund or from a
general lowering of interest rates, or a combination of both. Conversely, a
reduction in the credit standing of an issuer whose securities are held by the
Fund or a general increase in interest rates may be expected to result in
capital depreciation to the Fund.

REPURCHASE AGREEMENTS. A repurchase agreement is an agreement under
which the Fund acquires securities (generally government securities, bankers'
acceptances or certificates of deposit) from a commercial bank, broker or
dealer, subject to resale to the seller at an agreed-upon price and date
(normally the next business day). The resale price reflects an agreed-upon
interest rate effective for the period the instruments are held by the Fund and
is unrelated to the interest rate on the instruments. The instruments acquired
by the Fund (including accrued

9
<PAGE> 60
interest) must have an aggregate market value in excess of the resale price and
will be held by a Fund custodian until they are repurchased. The [Sub-Adviser]
evaluates the creditworthiness of repurchase agreement counterparties and takes
steps that are reasonably designed to ensure that the Fund's repurchase
agreements are fully collateralized.

The use of repurchase agreements nevertheless involves certain risks.
For example, if the seller defaults on its obligation to repurchase the
instruments acquired by the Fund at a time when their market value has declined,
the Fund may incur a loss. If the seller becomes insolvent or subject to
liquidation or reorganization under bankruptcy or other laws, a court may
determine that the instruments acquired by the Fund are collateral for a loan by
the Fund and therefore are subject to sale by the trustee in bankruptcy.
Finally, it is possible that the Fund may not be able to substantiate its
interests in the instruments it acquires. While the Fund acknowledges these
risks, it is expected that they can be controlled through careful documentation
and monitoring.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. The Fund may purchase and
sell securities on a when-issued or delayed delivery basis. However, the Fund
does not currently intend to purchase or sell securities on a when-issued or
delayed delivery basis, if as a result, more than 5% of its total assets taken
at market value at the time of purchase would be invested in such securities.
When-issued or delayed delivery transactions arise when securities (normally,
obligations of issuers eligible for investment by the Fund) are purchased or
sold by the Fund with payment and delivery taking place in the future in order
to secure what is considered to be an advantageous price or yield. However, the
yield available on a comparable security when delivery takes place may vary from
the yield on the security at the time that the when-issued or delayed delivery
transaction was entered into. Any failure to consummate a when-issued or delayed
delivery transaction may result in the Fund missing the opportunity to obtain a
price or yield considered to be advantageous. When-issued and delayed delivery
transactions may generally be expected to settle within one month from the date
the transactions are entered into, but in no event later than 90 days. However,
no payment or delivery is made by the Fund until it receives delivery or payment
from the other party to the transaction.

When the Fund purchases securities on a when-issued basis, it will
maintain in a segregated account with its Custodian cash, U.S. government
securities or other liquid assets having an aggregate value equal to the amount
of such purchase commitments, until payment is made. If necessary, additional
assets will be placed in the account daily so that the value of the account will
equal or exceed the amount of the Fund's purchase commitments.

LENDING OF PORTFOLIO SECURITIES. The Fund may lend its
securities to qualified institutional investors (such as brokers, dealers or
other financial organizations) who need to borrow securities in order to
complete certain transactions, such as covering short sales, avoiding failures
to deliver securities or completing arbitrage operations. By lending its
securities, the Fund will be attempting to generate income through the receipt
of interest on the loan which, in turn, can be invested in additional securities
to pursue the Fund's investment objective. Any gain or loss in the market price
of the securities loaned that might occur during the term of the loan would be
for the account of the Fund.

The Fund may lend its portfolio securities to qualified brokers,
dealers, banks or other financial institutions, so long as the terms, the
structure and the aggregate amount of such loans

10
<PAGE> 61
are not inconsistent with the Investment Company Act, or the rules and
regulations or interpretations of the SEC thereunder, which currently require
that (a) the borrower pledge and maintain with the Fund collateral consisting of
cash, an irrevocable letter of credit or securities issued or guaranteed by the
United States government having a value at all times not less than 100% of the
value of the securities loaned, (b) the borrower add to such collateral whenever
the price of the securities loaned rises (i.e., the borrower "marks to the
market" on a daily basis), (c) the loan be made subject to termination by the
Fund at any time, (d) the Fund receives reasonable interest on the loan, which
interest may include the Fund's investing cash collateral in interest bearing
short-term investments, and (e) the Fund receives all dividends and
distributions on the loaned securities and any increase in the market value of
the loaned securities.

The Fund bears risk of loss in the event that the other party to a
securities lending transaction defaults on its obligations and the Fund is
delayed in or prevented from exercising its rights to dispose of the collateral,
including the risk of a possible decline in the value of the collateral
securities during the period in which the Fund seeks to assert these rights, the
risk of incurring expenses associated with asserting these rights and the risk
of losing all or a part of the income from the transaction. The Fund will not
lend its portfolio securities if, as a result, the aggregate value of such loans
would exceed 33-1/3% of the value of the Fund's total assets. Loan arrangements
made by the Fund will comply with all other applicable regulatory requirements,
including the rules of the New York Stock Exchange, which rules presently
require the borrower, after notice, to redeliver the securities within the
normal settlement time of three business days. All relevant facts and
circumstances, including creditworthiness of the broker, dealer or institution,
will be considered in making decisions with respect to the lending of
securities, subject to review by the Fund's trustees.

HEDGING TRANSACTIONS. The Fund may buy and sell options, futures
contracts and options on futures contracts for hedging purposes (i) to protect
against the effect of changes in market prices on the value of investments the
Fund holds, intends to purchase or intends to sell or (ii) to permit a portion
of its portfolio held in cash to perform as if invested in securities. The
instruments underlying the Fund's futures and options positions may include,
without limitation, securities, securities indices, commodities and currencies.
The Fund may also take futures and options positions related to financial,
commercial and other economic indicators such as interest rates. (This
discussion refers to a derivative instrument's subject matter as the
instrument's underlying asset.) The Fund may also purchase instruments with
characteristics of both futures and securities (e.g., debt instruments with
interest and principal payments determined by reference to the value of a
commodity or a currency at a future time) and which, therefore, possess the
risks of both futures and securities investments.

Derivatives, such as options, futures contracts and options on futures
contracts enable the Fund to take both "short" positions (positions which reduce
the Fund's exposure to a particular instrument or index) and "long" positions
(positions which increase the Fund's exposure to a particular instrument or
index).

Futures Contracts. Futures contracts are publicly traded contracts to
buy or sell a commodity or an underlying instrument or group of instruments,
e.g., a security or an index of

11
<PAGE> 62
securities, at a future time at a specified price. A contract to buy establishes
a long position while a contract to sell establishes a short position.

The purchase of a futures contract normally enables a buyer to
participate in the market movement of the underlying asset after paying a
transaction charge and posting margin in an amount typically equal to a
percentage of the value of the asset or index. The Fund will initially be
required to deposit with the Trust's custodian or the futures commission
merchant effecting the futures transaction an amount of "initial margin" in cash
or securities, as permitted under applicable regulatory policies.

Initial margin differs from margin in securities transactions in that
the former does not involve the borrowing of funds to finance the transaction.
Rather, the initial margin is like a performance bond or good faith deposit on
the contract. Subsequent payments (called "maintenance margin") to and from the
broker will be made on a daily basis as the price of the underlying asset
fluctuates. This process is known as "marking to market." For example, when the
Fund has taken a long position in a futures contract and the value of the
underlying asset has risen, that position will have increased in value and the
Fund will receive from the broker a maintenance margin payment equal to the
increase in value of the underlying asset. Conversely, when the Fund has taken a
long position in a futures contract and the value of the underlying asset has
declined, the position would be less valuable, and the Fund would be required to
make a maintenance margin payment to the broker. If a liquid market exists, the
Fund may choose to close a futures position prior to expiration by taking a
position opposite to the one it holds.

For each futures contract the Fund enters, it will identify to the
Trust's custodian assets equal to the face value of the futures contract for
maintenance in a separate account to ensure that the use of such futures
contracts is unleveraged. The Fund may also "cover" its futures positions using
other means as permitted under applicable exchange and regulatory policies.

Options. There are two basic types of options: "puts" and "calls." Each
type of option can establish either a long or short position, depending upon
whether the Fund is the purchaser or writer (seller) of the option. A call
option, for example, gives the purchaser of the option the right to buy, and the
writer the obligation to sell upon exercise by the option holder, the underlying
asset at the exercise price during the option period. Conversely, a put option
gives the purchaser the right to sell, and the writer the obligation to buy upon
exercise by the option holder, the underlying asset at the exercise price during
the option period.

The purchaser of an option receives the opportunity to benefit from
favorable movements in the price of the option's underlying asset while risking
only the amount of the premium regardless of unfavorable movements in the price
of the underlying asset. In general, a purchased put increases in value as the
value of the underlying asset falls and a purchased call increases in value as
the value of the underlying asset rises.

The writer of a put or call option takes the opposite side of the
transaction from the option's purchaser. In return for receipt of the premium,
the writer assumes the obligation to pay the strike price for the option's
underlying asset if the other party to the option chooses to exercise it. The
writer may seek to terminate its exposure to a put option before exercise by

12
<PAGE> 63
closing out the option in the secondary market at its current price. If the
secondary market is not liquid, however, the writer must continue to be prepared
to pay the strike price while the option is outstanding, regardless of price
changes. If the value of the underlying asset remains unchanged over time, it is
likely that the writer will also profit, because it should be able to close out
the option at a lower price. If the value of the underlying asset falls, the put
writer would expect to suffer a loss. This loss should be less than the loss
from purchasing the underlying asset directly, however, because the premium
received for writing the option should offset the effects of the decline to some
extent.

Writing a call option obligates the writer to deliver the option's
underlying asset, in return for the strike price, upon exercise of the option.
The characteristics of writing call options are similar to those of writing put
options, except that writing calls generally is a profitable strategy if prices
remain the same or fall. At the same time, because a call writer must be
prepared to deliver the underlying asset in return for the strike price, even if
its current value is greater, a call writer gives up some ability to participate
in security price increases.

The Fund may engage in options on futures contracts. These options give
the purchaser the right, in return for the premium paid, to assume a position in
a futures contract at a specified exercise price at any time during the period
of the option. When writing an option on a futures contract, the Fund will be
required to make margin payments as described above for other types of futures
contracts. The Fund's transactions in options are subject to applicable
regulatory requirements regarding the segregation of assets to cover its
positions.

Limitations and Risks of Derivatives. The Fund has filed a notice of
eligibility for exclusion from the definition of the term "commodity pool
operator" with the Commodity Futures Trading Commission ("CFTC") and the
National Futures Association, which regulate trading in the futures markets. The
Fund intends to comply with Rule 4.5 under the Commodity Exchange Act, which
limits the extent to which the Fund can commit assets to initial margin deposits
and option premiums.

The Fund's ability to use derivatives effectively depends on the degree
to which price movements in its holdings correlate with price movements of its
derivatives positions. The Fund may invest in derivatives based on securities
with different issuers, maturities, or other characteristics from the securities
in which the Fund typically invests, which involves a risk that the derivatives
position will not track the performance of the Fund's other investments. Options
and futures prices can also diverge from the prices of their underlying assets,
even if the underlying assets match the Fund's investments well. Options and
futures prices are affected by such factors as current and anticipated
short-term interest rates, changes in volatility of the underlying asset, and
the time remaining until expiration of the contract, which may not affect
securities prices the same way. Imperfect correlation may also result from
differing levels of demand in the options and futures markets and the securities
markets, from structural differences in how options and futures and securities
are traded, or from imposition of daily price fluctuation limits or trading
halts. As a result of these factors, the Fund's futures and options positions
may not perform as expected.

13
<PAGE> 64
The market for a derivative instrument may also be less liquid than the
market for its underlying asset. Some positions in futures and options may be
closed out only on the exchange where they are traded. There can be no assurance
that a liquid secondary market will exist for any particular futures contract or
option at any specific time. Thus, it may not be possible to close such an
option or futures position prior to maturity. The inability to close options and
futures positions also could have an adverse impact on the Fund's ability to
effectively carry out its derivatives strategies and might, in some cases,
require the Fund to deposit additional cash to meet applicable margin
requirements.

SHORT SALES. The Fund may seek to realize additional gains through
short sales. Short sales are transactions in which the Fund sells a security it
does not own in anticipation of a decline in the market value of that security.
To complete such a transaction, the Fund must borrow the security to make
delivery to the buyer. The Fund is then obligated to replace the security
borrowed by purchasing it at the market price at the time of replacement. The
price at such time may be more or less than the price at which the security was
sold by the Fund. Until the security is replaced, the Fund is required to repay
the lender any dividends or interest which accrue during the period of the loan.
To borrow the security, the Fund also may be required to pay a premium, which
would increase the cost of the security sold. The net proceeds of the short sale
will be retained by the broker, to the extent necessary to meet margin
requirements, until the short position is closed out. The Fund also will incur
transaction costs in effecting short sales.

The Fund will incur a loss as a result of a short sale if the price of
the security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security. The Fund will realize a gain if the
price of the security declines in price between those dates. The amount of any
gain will be decreased, and the amount of any loss increased, by the amount of
the premium, dividends or interest the Fund may be required to pay, if any, in
connection with a short sale.

The Fund may make short sales "against the box," i.e., when a security
identical to or convertible or exchangeable into one owned by the Fund is
borrowed and sold short.

Whenever the Fund engages in short sales, it segregates liquid
securities in an amount that, when combined with the amount of collateral
deposited with the broker in connection with the short sale, equals the current
market value of the security sold short. The segregated assets are marked to
market daily.

MANAGEMENT OF THE FUND

As a Delaware business trust, the business and affairs of the Fund are
managed by its officers under the direction of its Board of Trustees. The
Trustees meet periodically throughout the year to oversee the Fund's activities,
review its performance, and review the actions of the Adviser and Sub-Adviser.

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<PAGE> 65
TRUSTEES AND OFFICERS

Information regarding the Board of Trustees and officers of the Fund,
including their principal business occupations during at least the last five
years, is set forth below. Except where otherwise indicated, each of the
individuals below has served in his or her present capacity with the Trust since
___________, 1999.

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
NAME, ADDRESS AND AGE POSITIONS HELD WITH THE PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS
FUND
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Susan J. Lloyd-Hurwitz* Trustee, President, Co-President, Lend Lease Rosen Real Estate
1995 University Avenue Treasurer and Secretary Securities LLC, a financial advisory firm
Suite 550 (1999-present); CEO, Rosen Consulting Group, LLC
Berkeley, CA 94704 (1999-Present); Senior Vice President, Lend
DOB: 2/15/67 Lease Real Estate Investments, Inc. (1997-1999);
Portfolio Manager, General Property Trust
(1994-1997).
</TABLE>

* Ms. Lloyd-Hurwitz is an "interested person" of the Fund as
defined by the Investment Company Act.

The Trustees of the Trust who are officers of the Adviser or
Sub-Adviser receive no remuneration from the Fund. Each of the other Trustees
will be paid an annual retainer fee of $X,XXX, will be paid the sum of $X,XXX
per meeting attended, and will be reimbursed for the expenses of attending
meetings.

COMPENSATION TABLE (a)

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION FROM FUND TOTAL COMPENSATION FROM TRUST PAID
NAME OF PERSON TO TRUSTEES
<S> <C> <C>

</TABLE>
(a) The information provided in the above table is based on an estimate of
payments to be made for the Fund's first fiscal year ending January 31, 2000.
The Trust has not adopted any pension or retirement plans for the officers or
Trustees of the Trust. Therefore, there have been no benefits accrued as part of
Trust expenses nor are there estimated currently any annual benefits upon
retirement.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

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<PAGE> 66
As of December 31, 1999, ________ owned all of the outstanding shares
of the Fund. It is contemplated that soon after the initial public offering of
shares of the Fund, _______' ownership of the shares of the Fund will represent
less than 25% of the Fund's outstanding shares. As of December 31, 1999, the
trustees and officers of the Fund as a group beneficially owned less than 1% of
the outstanding shares of the Fund.

INVESTMENT MANAGEMENT AND OTHER SERVICES

ADVISER. The investment adviser to the Fund is Lend Lease Real Estate
Investments, Inc. (the "Adviser"). The Adviser was organized as a Delaware
corporation on May 18, 1984, and its principal place of business is Monarch
Tower, 3424 Peachtree Road, N.E., Suite 800, Atlanta, Georgia 30326. Pursuant to
an advisory agreement entered into between the Trust on behalf of the Fund and
the Adviser (the "Advisory Agreement"), the Adviser provides continuous
investment management services to the Fund. The Adviser also provides the Fund
with office space, equipment and personnel necessary to operate and administer
the Fund's business and to supervise the provision of services by third parties.
The Adviser is a wholly-owned indirect subsidiary of Lend Lease Corporation
Limited, an integrated property and financial services company listed on the
Australian and New Zealand stock exchanges with a market capitalization
exceeding U.S. $5 billion.

The Advisory Agreement is dated ________, 1999. The Advisory Agreement
has an initial term of two years and thereafter is required to be approved
annually by the Board of Trustees of the Trust or by vote of a majority of the
Fund's outstanding voting securities (as defined in the Investment Company Act).
Each annual renewal must also be approved by the vote of a majority of the
Fund's Trustees who are not parties to the Advisory Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose of
voting on such approval. The Advisory Agreement was approved by the vote of a
majority of the Trustees who are not parties to the Advisory Agreement or
interested persons of any such party on _____________, 1999 and by the initial
shareholder(s) of the Fund on _____________, 1999. The Advisory Agreement is
terminable without penalty on 60 days' written notice by the Trustees, by vote
of a majority of a Fund's outstanding voting securities, or by the Adviser, and
will terminate automatically in the event of its assignment.

The Adviser has contractually agreed, through [January 31, 2003], to
limit total annual fund operating expenses to ____%, subject to later
reimbursement by the Fund in certain circumstances. The waiver may, at the
discretion of the Adviser, be continued beyond such point. See "Investment
Management" in the Prospectus for further information.

SUB-ADVISER. The sub-adviser to the Fund is Lend Lease Rosen Real
Estate Securities LLC (the "Sub-Adviser" or "Lend Lease Rosen"). The Sub-Adviser
was organized as a Delaware limited liability company on February 14, 1995, and
its principal place of business is 1995 University Avenue, Suite 550, Berkeley,
CA 94704. Pursuant to a sub-advisory agreement entered into between the Adviser
and the Sub-Adviser (the "Sub-Advisory Agreement"), the Sub-Adviser provides an
investment program for the Fund, makes investment decisions for the Fund and
places all orders for the purchase and sale of portfolio securities and all
other

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<PAGE> 67
instruments. The activities of the Sub-Adviser are subject to the supervision
and control of the Trustees and the Adviser.

As compensation for its services, the Adviser pays to the Sub-Adviser a
sub-advisory fee at the annual rate of .40% of the Fund's average daily net
assets. The sub-advisory fee is accrued daily and paid monthly.

The Adviser owns a 50% interest in the Sub-Adviser. Dr. Kenneth T.
Rosen, the founder of Lend Lease Rosen, owns an approximately 45% interest in
the Sub-Adviser.

The Advisory Agreement provides that the Adviser shall not be liable to
the Fund or its shareholders for any error of judgment or mistake of law or for
anything other than willful misfeasance, bad faith, negligence or reckless
disregard of its obligations or duties. The Advisory Agreement also provides
that nothing therein shall limit the freedom of the Adviser and its affiliates
to render investment supervisory and corporate administrative services to other
investment companies, to act as investment adviser or investment counselor to
other persons, firms or corporations, or to engage in other business activities.

ADMINISTRATION AND FUND ACCOUNTING. Sunstone Financial Group, Inc., 207
East Buffalo Street, Suite 400, Milwaukee, Wisconsin 53202 ("Sunstone") has
agreed to provide various administrative and fund accounting services to the
Fund under an Administration and Fund Accounting Agreement dated __________,
1999 (the "Administration Agreement"). Sunstone's services include, but are not
limited to, the following: calculating daily net asset values for the Fund;
overseeing the Fund's Custodian; assisting the preparation and filing of all
federal income and excise tax filings (other than those to be made by the Fund's
Custodian); overseeing the Fund's fidelity insurance relationships;
participating in the preparation of the Fund's registration statement; preparing
notice and renewal securities filings pursuant to state securities laws;
compiling data for and preparing notices to the SEC; preparing financial
statements for the annual and semi-annual reports to the SEC and current
investors; monitoring the Fund's expenses; monitoring the Fund's status as a
regulated investment company under Subchapter M of the Internal Revenue Code
(the "Code"); monitoring compliance with the Fund's investment policies and
restrictions and generally assisting the Fund's administrative operations.

Sunstone, at its own expense, and without reimbursement from the Fund,
furnishes office space and all necessary office facilities, equipment, supplies
and clerical and executive personnel for performing the services required to be
performed by it under the Administration Agreement. The Administration Agreement
will remain in effect until _____ (the "Initial Term") and thereafter for
successive annual periods. After the Initial Term, the Administration Agreement
may be terminated on not less than 60 days' notice, without the payment of any
penalty, by the Board of Trustees of the Trust or by Sunstone. Under the
Administration Agreement, Sunstone is not liable for any loss suffered by the
Fund or its shareholders in connection with the performance of the
Administration Agreement, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of Sunstone in the performance of its
duties or reckless disregard of its obligations and duties. The Administration
Agreement also provides that Sunstone may provide similar services to others,
including other investment companies.

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<PAGE> 68
For the foregoing, Sunstone receives a fee on the value of the Fund
computed daily and payable monthly, at the annual rate of 0.XX percent of the
first $XX million of its average daily net assets, and decreasing as assets
reach certain levels, subject to an annual minimum fee of $XX,XXX.00, plus
out-of-pocket expenses.

TRANSFER AGENT AND DIVIDEND-PAYING AGENT. Sunstone also acts as the
Fund's transfer agent and dividend-paying agent. As such, Sunstone processes
purchase and redemption requests for the securities of the Fund, keeps records
of shareholder accounts and transactions, pays dividends as declared by the
Board of Trustees and issues confirmations of transactions to shareholders. For
these services, the Fund pays Sunstone a fee based on the number of shareholder
accounts, transactions and other activities, subject to a minimum annual fee.
Sunstone does not exercise any supervisory functions over the management of the
Fund or the purchase and sale of Fund securities.

From time to time, the Trust, on behalf of the Fund, either directly or
indirectly through arrangements with the Adviser, the Distributor (as
hereinafter defined) or Sunstone, in its capacity as transfer agent, may pay
amounts to third parties that provide transfer agent-type services and other
administrative services relating to the Fund to persons who have a beneficial
interest in the Fund, such as 401(k) plan participants. These services may
include, among other things, sub-accounting services, transfer agent type
activities, answering Fund-related inquiries, transmitting proxy statements,
annual reports, updated prospectuses and other communications regarding the Fund
and other related services as the Fund may request.

Custodian. Wilmington Trust Company, 1100 North Market, 9th Floor,
Wilmington, Delaware, 19890 (the "Custodian"), serves as the custodian for the
Fund. Under the terms of the Custody Agreement, the Custodian is responsible for
the receipt and delivery of the Fund's securities and cash. The Custodian does
not exercise any supervisory functions over the management of the Fund or the
purchase and sale of securities.

Distributor. Under a distribution agreement dated ____________, 1999,
Sunstone Distribution Services, LLC, 207 East Buffalo Street, Suite 400,
Milwaukee, Wisconsin 53202 (the "Distributor") acts as principal underwriter for
the Fund and acts as exclusive agent for the Fund in selling its shares to the
public. The Distributor shall offer shares of the Fund on a continuous basis and
may engage in advertising and solicitation activities in connection therewith.
The Distributor is not obligated to sell any certain number of shares of the
Fund. For marketing and distribution services provided, the Fund pays the
Distributor compensation at the annual rate of 0.XX% of the first $XXX million
of its average daily net assets and decreasing as assets reach certain levels,
subject to an annual minimum fee of $XX,000.00, plus out-of-pocket expenses.

LEGAL COUNSEL. Goodwin, Procter & Hoar LLP, with offices at Exchange
Place, Boston, Massachusetts 02109, serves as counsel to the Fund.

Independent Auditors. _________________________ are the independent
auditors for the Fund. They are responsible for performing an audit of the
Fund's year-end

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<PAGE> 69
financial statements as well as providing accounting and tax advice to the
management of the Fund.

DISTRIBUTION OF SHARES

The Fund has adopted Distribution Plans (the "Plans") for Class A and
Class K shares, respectively, under Rule 12b-1 of the Investment Company Act.
Each Plan provides that the Fund will make payments to the Distributor equal to
0.25% (on an annual basis) of the average daily value of the net assets of the
class in question (the "12b-1 fee"). Some or all of the 12b-1 fee may be used to
compensate brokers and other authorized institutions that sell shares of that
class ("Authorized Firms") for providing account administration services to
their clients who are beneficial owner of such shares. One or more affiliates of
the Adviser and Sub-Adviser may act as Authorized Firms. The services provided
by the Authorized Firms may include, among other things, receiving, aggregating
and processing shareholder or beneficial owner (collectively "shareholder")
orders; furnishing shareholder subaccounting; providing and maintaining
retirement plan records; communicating periodically with shareholders; acting as
the sole shareholder of record and nominee for shareholders; maintaining account
records for shareholders; answering questions and handling correspondence from
shareholders about their accounts; issuing various shareholder reports and
confirmations for transactions by shareholders; performing daily investment
("sweep") functions for shareholders and performing similar account and
administrative services. Any 12b-1 fees received by the Distributor and not
allocated to Authorized Firms may be retained by the Distributor to compensate
the Distributor for services provided and expenses incurred by it in connection
with sales, promotional and marketing activities relating to that class (e.g.
for advertising costs, the cost of printing and mailing prospectuses and reports
to potential investors).

The Trustees have determined that, in their judgment, there is a
reasonable likelihood that each 12b-1 Plan will benefit the Fund and holders of
the class to which the Plan applies. In the Trustees' quarterly review of the
12b-1 Plans, they will consider the continued appropriateness of and the level
of compensation provided in the Plans.

Each Plan has been approved by a vote of the Board of Trustees,
including a majority of the Independent Trustees, cast in person at a meeting
called for the purpose of voting on the Plan. Each Plan has also been approved
by the holders of a "majority" (as defined in the Investment Company Act) of the
shares of the applicable class. The shareholder vote for each class was cast by
the Sub-Adviser as the sole initial holder of shares of that class.

Under each Plan, the Adviser, the Sub-Adviser and the Distributor may
make payments to affiliates, in their sole discretion, from time to time, and
may use their own resources (at no direct cost to the Fund) to make payments to
brokers, dealers or other financial institutions for distribution and
administrative services they perform.

Unless a Plan is terminated as described below, it continues in effect
from year to year but only if the Fund's Board of Trustees and the Independent
Trustees specifically vote annually to approve its continuance. In the context
of Plan approvals, the term "Independent Trustees" in this Statement of
Additional Information refers to those Trustees who are not "interested

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<PAGE> 70
persons" of the Fund and who do not have any direct or indirect financial
interest in the operation of the Plan or any agreement under such Plan;
otherwise, "Independent Trustees" means those Trustees who are not interested
persons of the Fund. Approval must be by a vote cast in person at a meeting
called for the purpose of voting on continuing the Plan. A Plan may be
terminated at any time by the vote of a majority of the Independent Trustees or
by the vote of the holders of a "majority" (as defined in the Investment Company
Act) of the outstanding shares of the applicable class.

The Board of Trustees and the Independent Trustees must approve all
material amendments to a Plan. An amendment to increase materially the amount of
payments to be made under a Plan must be approved by a "majority" (as defined in
the Investment Company Act) of the applicable class.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Sub-Adviser is primarily responsible for decisions to buy and sell
securities for the Fund, for the placement of its portfolio business and the
negotiation of the commissions to be paid on such transactions, subject to the
supervision of the Board of Trustees. It is the policy of the Sub-Adviser to
seek the best execution at the best security price available with respect to
each transaction, in light of the overall quality of brokerage and research
services provided to the Sub-Adviser.

The Sub-Adviser will place orders pursuant to its investment
determination for the Fund either directly with the issuer or with any broker or
dealer. In executing portfolio transactions and selecting brokers or dealers,
the Sub-Adviser will use its best effort to seek on behalf of the Fund the best
overall terms available. In selecting brokers and assessing the best overall
terms available for any transaction, the Sub-Adviser shall consider all factors
that it deems relevant, including the breadth of the market in the security, the
price of the security, the financial condition and execution capability of the
broker or dealer, and reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. The most favorable price to the
Fund means the best net price without regard to the mix between purchase or sale
price and commission, if any. Over-the-counter securities are generally
purchased or sold directly with principal market makers who retain the
difference in their cost in the security and its selling price (i.e., "markups"
when the market maker sells a security and "markdowns" when the market maker
purchases a security). In some instances, the Sub-Adviser may determine that
better prices are available from non-principal market makers who are paid
commissions directly. Subject to obtaining the best price and execution, the
Sub-Adviser may consider the sales of shares of the Fund when allocating Fund
portfolio transactions to brokers.

In evaluating the best overall terms available, and in selecting the
broker-dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund
and/or other accounts over which the Sub-Adviser or an affiliate of the
Sub-Adviser exercises investment discretion. While the Sub-Adviser believes
these services have substantial value, they are considered supplemental to its
own efforts in the performance of

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<PAGE> 71
its duties. Other clients of the Sub-Adviser may indirectly benefit from the
availability of these services to the Sub-Adviser, and the Fund may indirectly
benefit from services available to the Sub-Adviser as a result of transactions
for other clients. The Sub-Adviser is authorized to pay to a broker or dealer
who provides such brokerage and research services a commission for executing a
portfolio transaction for the Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer viewed in terms of that particular
transaction or in terms of the overall responsibilities the Sub-Adviser has to
the Fund. In no instance, however, will portfolio securities be purchased from
or sold to the Sub-Adviser, or any affiliated person of either the Trust or the
Sub-Adviser, acting as principal in the transaction, except to the extent
permitted by the SEC through rules, regulations, decisions and no-action
letters.

The Sub-Adviser may retain advisory clients in addition to the Fund and
place portfolio transactions for these accounts. Research services furnished by
firms through which the Fund effects its securities transactions may be used by
the Sub-Adviser in servicing all of its accounts; not all of such services may
be used by the Sub-Adviser in connection with the Fund. In the opinion of the
Sub-Adviser, it will not be possible to separately measure the benefits from
research services to each of the accounts (including the Fund) to be managed by
the Sub-Adviser. Because the volume and nature of the trading activities of the
accounts will not be uniform, the amount of commissions in excess of those
charged by another broker paid by each account for brokerage and research
services will vary. However, such costs to the Fund will not, in the opinion of
the Sub-Adviser, be disproportionate to the benefits to be received by the Fund
on a continuing basis.

On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interests of the Fund as well as other fiduciary or
agency accounts managed by it, the Sub-Advisory Agreement provides that the
Sub-Adviser, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased for the Fund with those to be
sold or purchased for such other accounts in order to obtain the best overall
terms available with respect to common and preferred stocks and the best net
price and execution with respect to other securities. In such event, allocation
of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers to be
most equitable and consistent with its fiduciary obligations to the Fund and
other accounts involved. The Sub-Adviser has established allocation procedures
designed to achieve these goals. In some instances, these procedures may
adversely affect the size of the position obtainable for the Fund or the amount
of the securities that are able to be sold for the Fund.

THE TRUST

The Trust, a Delaware business trust, is a non-diversified open-end
management investment company, registered under the Investment Company Act.
Under the terms of the Trust's Master Trust Agreement dated October 28, 1999
(the "Master Trust Agreement"), the Trustees of the Trust are ultimately
responsible for the management of the Fund's business and affairs. The Fund
represents a separate series of the Trust's shares of beneficial interest. There

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<PAGE> 72
are no other series currently, but the Trust's Board of Trustees is empowered to
establish additional Funds at any time without shareholder approval. Shares of
the Fund are currently issued in three classes: Class A, Class K and Class Y.
The Board of Trustees may establish additional classes at any time without
shareholder approval. Each share purchased in compliance with the procedures
established by the Trust will be fully paid and nonassessable.

Under the Master Trust Agreement, the Trustees of the Trust have
authority to issue an unlimited number of shares of beneficial interest, par
value $.0001 per share, of the Fund. Shares issued by the Fund have no
preemptive, conversion or subscription rights. Each share of the Fund has equal
and exclusive rights to a proportionate share of dividends and distributions
declared by the Fund and to the net assets of the Fund upon liquidation or
dissolution, except such differences as are attributable to differential class
expenses.

Shareholders are entitled to one vote for each dollar of net asset
value held and a proportional fractional vote for any fractional dollar amount
of net asset value held. Shareholders of the Fund or of a class of the Fund have
the right to vote as a separate class with respect to matters as to which their
interests are not identical to those of shareholders of other series of the
Trust or other classes of the Fund, respectively.

The assets received by the Trust from the issue and sale of shares of
the Fund, and all income, earnings, profits and proceeds thereof, subject only
to the rights of creditors, are especially allocated to the Fund and constitute
the underlying assets of the Fund. The underlying assets of the Fund are
required to be segregated on the books of account and are to be charged with the
expenses of the Trust. Any general expenses of the Trust not readily
identifiable as belonging to the Fund shall be allocated by or under the
direction of the Trustees in such a manner as the Trustees determine to be fair
and equitable, taking into consideration, among other things, the nature and the
type of expense and the relative size of the Fund and any other series then in
existence.

Each share of the Fund has equal dividend, redemption and liquidation
rights with other shares of that Fund. Under the Master Trust Agreement, no
annual or regular meeting of shareholders is required. Thus, there will
ordinarily be no annual shareholders meeting unless otherwise required by the
Investment Company Act. Special meetings of shareholders may be called from time
to time for purposes such as electing or removing Trustees, changing a
fundamental policy or approving an investment advisory agreement.

The Board will be a self-perpetuating body until fewer than 50% of the
Trustees serving as such are Trustees who were elected by shareholders. At that
time, another meeting of shareholders will be called to elect Trustees. Under
the Master Trust Agreement and the Investment Company Act, any Trustee may be
removed by votes of two-thirds of the outstanding Trust shares, and holders of
ten percent or more of the outstanding shares of the Trust can require the
Trustees to call a meeting of shareholders for the purpose of the removal of one
or more Trustees. Whenever ten or more shareholders of the Trust who have been
such for at least six months, and who hold in the aggregate shares having a net
asset value of at least $25,000 or which represent at least 1% of the
outstanding shares, whichever is less, apply to the Trustees in writing stating
that they wish to communicate with other shareholders with a view to obtaining

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<PAGE> 73
signatures to request a meeting, and such application is accompanied by a form
of communication and request which they wish to transmit, the Trustees shall
within five (5) business days after receipt of such application either (1)
afford to such applicants access to a list of the names and addresses of all
shareholders as recorded on the books of the Trust; or (2) inform such
applicants as to the approximate number of shareholders of record and the
approximate cost of mailing to them the proposed communication or form of
request.

Shares do not have cumulative voting rights, which means that in
situations in which shareholders elect Trustees, holders of more than 50% of the
shares voting for the election of Trustees can elect 100% of the Trust's
Trustees, and the holders of less than 50% of the shares voting for the election
of Trustees will not be able to elect any person as a Trustee.

TAXES

GENERAL. The Fund intends to qualify for treatment as a regulated
investment company ("RIC") under Subchapter M of the Code. To so qualify, the
Fund must meet the following requirements: (1) the Fund must derive at least 90%
of its gross income each taxable year from dividends, interest, payments with
respect to securities loans, and gains from the sale or other disposition of
stock or securities or foreign currencies, or 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 those
currencies; (2) at the close of each quarter of the Fund's taxable year, at
least 50% of the value of its total assets must be represented by cash and cash
items, U.S. government securities, securities of other RICs, and other
securities, with these other securities limited, with respect to any one issuer,
to an amount that does not exceed 5% of the value of the Fund's total assets and
that does not represent more than 10% of the issuer's outstanding voting
securities; and (3) at the close of each quarter of the Fund's taxable year, not
more than 25% of the value of its total assets may be invested in securities
(other than U.S. government securities or the securities of other RICs) of any
one issuer.

As a RIC, the Fund generally will not be subject to U.S. Federal income
tax on income and gains that it distributes to shareholders, if at least 90% of
the Fund's investment company taxable income (which includes, among other items,
dividends, interest and the excess of any short-term capital gains over net
long-term capital losses) for the taxable year is distributed. The Fund intends
to distribute substantially all of such income.

If the Fund fails to qualify for treatment as a RIC in any fiscal year,
it will be treated as a corporation for federal income tax purposes. As such,
the Fund would be required to pay income taxes on its net investment income and
net realized capital gains, if any, at the rates generally applicable to
corporations. Shareholders of the Fund that did not qualify for treatment as a
RIC would not be liable for income tax on the Fund's net investment income or
net realized capital gains in their individual capacities. Distributions to
shareholders, whether from the Fund's net investment income or net realized
capital gains, would be treated as taxable dividends to the extent of current or
accumulated earnings and profits of the Fund.

TAXATION OF CERTAIN MORTGAGE REITS. The Fund may invest in REITS that
hold residual interests in real estate mortgage investment conduits (REMICs).
Under Treasury

23
<PAGE> 74
regulations that have not yet been issued, but may apply retroactively, a
portion of the Fund's income from a REIT that is attributable to the REIT's
residual interest in a REMIC (referred to in the Code as an "excess inclusion")
will be subject to federal income tax in all events. These regulations are also
expected to provide that excess inclusion income of a RIC, such as the Fund,
will be allocated to shareholders of the RIC in proportion to the dividends
received by them with the same consequences as if these shareholders held the
related REMIC residual interest directly. In general, excess inclusion income
allocated to shareholders (i) cannot be offset by net operating losses (subject
to a limited exception for certain thrift institutions) and (ii) will constitute
unrelated business taxable income to entities (including a qualified pension
plan, an individual retirement account, a 401(k) plan, a Keogh plan or other
tax-exempt entity) subject to tax on unrelated business income, thereby
potentially requiring such an entity that is allocated excess inclusion income,
and that otherwise might not be required to file a tax return, to file a tax
return and pay tax on some income. In addition, if at any time during any
taxable year a "disqualified organization" (as defined in the Code) is a
shareholder in a RIC, then the RIC will be subject to a tax equal to that
portion of its excess inclusion income for the taxable year that is allocable to
the disqualified organization, multiplied by the highest federal income tax rate
imposed on corporations.

DISTRIBUTIONS. Distributions of investment company taxable income are
taxable to a U.S. shareholder as ordinary income, whether paid in cash or
shares. Dividends pay by the Fund to a corporate shareholder, to the extent such
dividends are attributable to dividends received from U.S. corporations by the
Fund, may qualify for the dividends received deduction. Dividends attributable
to the Fund's investments in REITs generally will not qualify for the dividends
received deduction. In addition, the alternative minimum tax applicable to
corporations may reduce the value of the dividends received deduction.
Distributions of net capital gains (the excess of net long-term capital gains
over net short-term capital losses), if any, designated by the Fund as capital
gain dividends, are taxable to shareholders at the applicable long-term capital
gains rate, whether paid in cash or in shares, regardless of how long the
shareholder has held the Fund's shares, and they are not eligible for the
dividends received deduction. Shareholders will be notified annually as to the
U.S. federal tax status of distributions, and shareholders receiving
distributions in the form of newly issued shares will receive a report as to the
net asset value of the shares received.

Dividends and other distributions declared by the Fund in, and payable
to shareholders of record as of a date in, October, November or December of any
year will be deemed to have been paid by the Fund and received by the
shareholders on December 31 of that year if the distributions are paid by the
Fund during January of the following calendar year. Accordingly, those
distributions will be taxed to shareholders for the year in which that December
31 falls.

If the net asset value of shares is reduced below a shareholder's cost
as the result of a distribution by the Fund, such distribution generally will be
taxable even though it represents a return of invested capital. Investors also
should be aware that if shares are purchased shortly before the record date for
any distribution, the shareholder will pay full price for the shares and receive
some portion of the price back as a taxable dividend or capital gain
distribution.

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<PAGE> 75
In addition, if Fund shares are purchased through taxable accounts,
distributions of net investment income and net short-term capital gains are
taxable to you as ordinary income. The dividends from net income may qualify for
the dividends-received deduction for corporations to the extent that (i) the
Fund held shares receiving the dividend for more than 45 days and (ii) the
dividends were not received from REITs or foreign holdings.

The Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute, by the end of any calendar year, substantially all of
its ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts. The Fund
intends to declare and distribute dividends during each year sufficient to
prevent imposition of the excise tax.

DISPOSITION OF SHARES. Upon a redemption, sale or exchange of shares of
the Fund, a shareholder will realize a taxable gain or loss that will be treated
as a capital gain or loss if the shares are capital assets in the shareholder's
hands and generally will be long-term or short-term, depending upon the
shareholder's holding period for the shares. Any loss realized on a redemption,
sale or exchange will be disallowed to the extent the shares disposed of are
replaced (including through reinvestment of dividends) within a period of 61
days beginning 30 days before and ending 30 days after the disposal of the
shares. In such a case, the basis of the shares acquired will be adjusted to
reflect the disallowed loss. Any loss realized by a shareholder on the
disposition of the Fund's shares held by the shareholder for six months or less
will be treated for tax purposes as a long-term capital loss to the extent of
any distributions of capital gain dividends received or treated as having been
received by the shareholder with respect to such shares.

BACKUP WITHHOLDING. The Fund will be required to report to the Internal
Revenue Service (the "IRS") all distributions and gross proceeds from the
redemption of the Fund's shares, except in the case of certain exempt
shareholders. All distributions and proceeds from the redemption of the Fund's
shares will be subject to withholding of federal income tax at a rate of 31%
("backup withholding") in the case of non-exempt shareholders if (1) the
shareholder fails to furnish the Fund with a Form W-9 to certify the
shareholder's correct taxpayer identification number or social security number,
(2) the IRS notifies the shareholder or the Fund that the shareholder has failed
to report properly certain interest and dividend income to the IRS and to
respond to notices to that effect, or (3) when required to do so, that
shareholder fails to certify that he or she is not subject to backup
withholding. If the withholding provisions are applicable, any such
distributions or proceeds, whether reinvested in additional shares or taken in
cash, will be reduced by the amounts required to be withheld.

OTHER TAXATION. Distributions may also be subject to additional state,
local and foreign taxes depending on each shareholder's particular situation.
Non-U.S. shareholders may be subject to U.S. tax rules that differ significantly
from those summarized above. This discussion does not address all of the tax
consequences applicable to the Fund or shareholders, and shareholders are
advised to consult their own tax advisers with respect to the particular tax
consequences to them of an investment in the Fund.

25
<PAGE> 76
PURCHASE, REDEMPTION AND PRICING OF SHARES

DETERMINATION OF NET ASSET VALUE. As set forth in the Prospectus, the
net asset value of the Fund will be determined as of the close of trading
(typically 4 p.m. Eastern time) on each day the New York Stock Exchange is open
for trading. Class A Shares of the Fund are offered and sold on a continuous
basis at the Offering Price, which is the sum of the net asset value per share
(next computed following receipt of a purchase request) and the applicable sales
charge. The Class A sales charge may be waived for certain investors. For more
information, please see "Front-end sales charge exemptions" in the prospectus.

In connection with the determination of the Fund's net asset value,
securities which are traded on a recognized stock exchange are valued at the
last sale price on the securities exchange on which such securities are
primarily traded. Securities traded on only over-the-counter markets are valued
on the basis of closing over-the-counter trade prices. Securities for which
there were no transactions are valued at the closing bid prices. Options written
or purchased by the Fund are valued at the last sales price if such last sales
price is between the current bid and asked prices. Otherwise, options are valued
at the mean between the current bid and asked prices. Debt securities (other
than short-term instruments) are valued at prices furnished by a pricing
service, subject to review and possible revision by the Fund's Sub-Adviser. Any
modification of the price of a debt security furnished by a pricing service is
made pursuant to procedures adopted by the Trust's Board of Trustees. Debt
instruments maturing within 60 days are valued by the amortized cost method. Any
securities for which market quotations are not readily available are valued at
their fair value as determined in good faith by the Sub-Adviser under the
supervision of the Trust's Board of Trustees.

Generally, trading in foreign securities, as well as U.S. Government
securities and certain cash equivalents and repurchase agreements, is
substantially completed each day at various times prior to the close of the New
York Stock Exchange. The values of such securities used in computing the net
asset value of the shares of the Fund are determined as of such times. Foreign
currency exchange rates are also generally determined prior to the close of the
New York Stock Exchange. Occasionally, events affecting the value of such
securities and such exchange rates may occur between the times at which they are
determined and at the close of the New York Stock Exchange, which will not be
reflected in the computation of net asset value. If during such periods, events
occur which materially affect the value of such securities, the securities will
be valued at their fair market value as determined by management and approved in
good faith by the Trustees.

For purposes of determining the net asset value per share of the Fund,
all assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars at the mean between the bid and offer prices of such
currencies against U.S. dollars furnished by a pricing service approved by the
Trustees.

The Fund's net asset value per share will be calculated separately from
the per share net asset value of the other funds of the Trust, if any. "Assets
belonging to" the Fund consist of the consideration received upon the issuance
of shares of the Fund together will all net investment income, earnings,
profits, realized gains/losses and proceeds derived from the investment

26
<PAGE> 77
thereof, including any proceeds from the sale of such investments, any funds or
payments derived from any reinvestment of such proceeds, and a portion of any
general assets of the Trust not belonging to a particular series. The Fund will
be charged with the direct liabilities of that Fund and with a share of the
general liabilities of the Trust's funds. Subject to the provisions of the
Trust's Declaration of Trust, determinations by the Trustees as to the direct
and allocable expenses, and the allocable portion of any general assets, with
respect to a particular fund are conclusive.

REDUCED SALES CHARGES. The Fund's Letter of Intent ("LOI") allows for
reduction of the initial sales charge for Class A shares when multiple purchases
of Class A shares are combined by taking advantage of the breakpoints in the
sales charge schedule. By completing the LOI application, you express an
intention to invest during the next __-month period a specified amount (minimum
of at least $________) which, if made at one time would qualify for a reduced
sales charge. Any Class A shares owned on the date the LOI is executed may be
used as credit toward the completion of the LOI. However, the reduced sales
charge will only be applied to new purchases. Any redemptions made during the
10-month period will be subtracted from the amount of the purchases for purposes
of determining whether the terms of the LOI have been satisfied. If, at the end
of the __-month period covered by the LOI, the total amount of purchases (less
redemptions) does not equal the amount indicated, the difference between the
sales charge paid at the reduced rate and the sales charge applicable to the
purchases actually made must be paid. Shares equal to __% of the amount
specified in the LOI will be held in escrow during the __-month period and are
subject to involuntary redemption to assure any payment of a higher applicable
sales charge.

By signing the LOI application, the Distributor has a security interest
in the reserved shares and the Distributor is appointed attorney-in-fact to sell
any or all of the reserved shares to cover any additional sales charges if the
undertaking is not fulfilled. The completion of the LOI application is not
binding, but the purchase must be completed in accordance with the terms of the
LOI to obtain the reduced sales charge. For more information about the LOI,
contact the Fund directly or contact an investment professional.

RETIREMENT ACCOUNTS. The Fund currently offers several retirement
account options to shareholders, including: traditional IRA, "Rollover" IRA,
Roth IRA, SEP-IRA and Simple IRA. The shareholder's employer must establish a
plan before the shareholder opens a SEP or Simple account. The Fund is also
available for investment by other retirement plans. Call 1-800-XXX-XXXX for
additional information.

A description of accounts currently offered, applicable service fees
and certain limitations on account contributions and withdrawals, as well as
application forms, are available from the transfer agent upon request at
1-800-XXX-XXXX. The IRA documents contain a disclosure statement that the IRS
requires to be furnished to individuals who are adopting the IRA. Because a
retirement program involves commitments covering future years, it is important
that the investment objective of the Fund be consistent with the participant's
retirement objectives. Premature withdrawals from a retirement account will
result in adverse tax consequences. Consultation with a competent financial and
tax adviser regarding the foregoing retirement accounts is recommended.

27
<PAGE> 78
SUSPENSION OF REDEMPTIONS. The right of redemption may be suspended, or
the date of payment postponed beyond the normal seven-day period by the Fund,
under the following conditions authorized by the 1940 Act: (1) for any period
during which the New York Stock Exchange is closed, other than customary weekend
or holiday closings, or during which trading on the Exchange is restricted; (2)
for any period during which an emergency exists as the result of which the
disposal by the Fund of securities owned by it is not reasonably practical, or
it is not reasonably practical for the Fund to determine the fair value of its
net assets; or (3) for such other periods as the SEC may by order permit for the
protection of the Fund's shareholders.

REDEMPTIONS IN KIND. It is possible that conditions may exist in the
future which would, in the opinion of the Board of Trustees, make it undesirable
for the Fund to pay for redemptions in cash. In such cases the Board may
authorize payment to be made in portfolio securities of the Fund. Securities
delivered in payment of redemptions are valued at the same value assigned to
them in computing the net asset value per share. Shareholders receiving such
securities generally will incur brokerage costs when selling such securities.

PERFORMANCE INFORMATION

The performance of each class of shares is shown separately, because
the performance of each class of shares will usually be different. That is
because of the different kinds of expenses each class bears. The total returns
of each class of shares of the Fund are affected by market conditions, the
performance of the Fund's investments, and the allocation of expenses among
classes.

Total Return Information. There are different types of "total returns"
to measure the Fund's performance. Total return is the change in value of a
hypothetical investment in the Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. Because of
differences in expenses for each class of shares, the total returns for each
class are separately measured. The cumulative total return measures the change
in value over the entire period (for example, ten years). An average annual
total return shows the average rate of return for each year in a period that
would produce the cumulative total return over the entire period. However,
average annual total returns do not show actual year-by-year performance. The
Fund uses standardized calculations for its total returns as prescribed by the
SEC. The methodology is discussed below.

In calculating total returns for Class A shares, the current maximum
sales charge of 5.75% (as a percentage of the offering price) is deducted from
the initial investment ("P") (unless the return is shown without sales charge,
as described below). In addition, the payment of the applicable redemption fee
for Class A shares is deducted for returns for the one-year period. There is no
sales charge on Class I shares and Class K shares.

Average Annual Total Return. To facilitate the comparability of
historical performance data from one mutual fund to another, the SEC has
developed guidelines for the calculation of

28
<PAGE> 79
average annual total return. The average annual total return for the Fund for a
specific period is found by first taking a hypothetical $1,000 investment
("initial investment") in the Fund's shares on the first day of the period and
computing the "redeemable value" of that investment at the end of the period.
The redeemable value is then divided by the initial investment, and this
quotient is taken to the Nth root (N representing the number of years in the
period) and 1 is subtracted from the result, which is then expressed as a
percentage. The calculation assumes that all income and capital gains dividends
paid by the Fund have been reinvested at net asset value on the reinvestment
dates during the period. This calculation can be expressed as follows:

P(1 + T)N = ERV

Where:

T= average annual total return.

ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the period.

P = hypothetical initial payment of $1,000.

N = period covered by the computation, expressed in terms of years.

Cumulative Total Return. The "cumulative total return" calculation
measures the change in value of a hypothetical investment of $1,000 over an
entire period of years. Its calculation uses some of the same factors as average
annual total return, but it does not average the rate of return on an annual
basis. Cumulative total return is determined as follows:

ERV - P
-------- = Total Return
P

29
<PAGE> 80
SEC 30-day Yield. The Fund calculates its 30-day (or one month) yield
in accordance with the method prescribed by the SEC for mutual funds:

a-b
Yield =2[(______ +1)6 - 1]
cd

Where:

a = dividends and interest earned during the period

b = expenses accrued for the period (net of reimbursements);

c = average daily number of shares outstanding during the period
entitled to receive dividends; and

d = net asset value per share on the last day of the period.

The Fund's performance figures for each class will be based upon
historical results and will not necessarily be indicative of future performance.
The Fund's returns and net asset value will fluctuate and the net asset value of
shares when sold may be more or less than their original cost. Any additional
fees charged by a dealer or other financial services firm would reduce the
Fund's returns.

From time to time, in marketing and other literature, the Fund's
performance may be compared to the performance of other mutual funds in general
or to the performance of particular types of mutual funds with similar
investment goals, as tracked by independent organizations. Among these
organizations, Lipper Analytical Services, Inc. ("Lipper"), a widely used
independent research firm which ranks mutual funds by overall performance,
investment objective and assets, may be cited. Lipper performance figures are
based on changes in net asset value, with all income and capital gains dividends
reinvested. Such calculations do not include the effect of any sales charges
imposed by other funds. The Fund will be compared to Lipper's appropriate fund
category, that is, by fund objective and portfolio holdings.

The Fund's performance may also be compared to the performance of other
mutual funds by Morningstar, Inc., which ranks funds on the basis of historical
risk and total return. Morningstar's rankings range from five stars (highest) to
one star (lowest) and represent Morningstar's assessment of the historical risk
level and total return of a fund as a weighted average for 3, 5, and 10 year
periods. Rankings are not absolute or necessarily predictive of future
performance.

The performance of the Fund may be compared in publications to
averages, performance rankings, or other information prepared by recognized
mutual fund statistical services. Evaluations of Fund performance made by
independent sources may also be used in advertisements concerning the Fund,
including reprints of or selections from, editorials or

30
<PAGE> 81
articles about the Fund. Sources for Fund performance and articles about the
Fund may include publications such as Money, Forbes, Kiplinger's, Financial
World, Business Week, U.S. News and World Report, the Wall Street Journal,
Barron's and a variety of investment newsletters.

The performance of the Fund may be compared in publications to the
performance of various indices and investments for which reliable performance
data is available. Such indices may include the Standard & Poor's 500(R) Index,
the Nasdaq Over-the-Counter Composite Index, the Wilshire REIT Index, the Morgan
Stanley REIT Index and the NAREIT Total Return Index. There are differences and
similarities between the investments that the Fund may purchase for its
portfolio and the investments measured by these indices.

Occasionally statistics may be used to specify the Fund's volatility or
risk. Measures of volatility or risk are generally used to compare the Fund's
net asset value or performance relative to a market index. One measure of
volatility is beta. Beta is the volatility of a fund relative to the total
market as represented by the Standard & Poor's 500(R) Index. A beta of more than
1.00 indicates volatility greater than the market, and a beta of less than 1.00
indicates volatility less than the market. Another measure of volatility or risk
is standard deviation. Standard deviation is used to measure variability of net
asset value or total return around an average, over a specified period of time.
The premise is that greater volatility connotes greater risk undertaken in
achieving performance.

Marketing and other Fund literature may include a description of the
potential risks and rewards associated with an investment in the Fund. The
description may include a "risk/return spectrum" which compares the Fund to
broad categories of funds, such as money market, bond or equity funds, in terms
of potential risks and returns. Risk/return spectrums also may depict funds that
invest in both domestic and foreign securities or a combination of bond and
equity securities. Money market funds are designed to maintain a constant $1.00
share price and have a fluctuating yield. Share price, yield and total return of
a bond fund will fluctuate. The share price and return of an equity fund also
will fluctuate. The description may also compare the Fund to bank products, such
as certificates of deposit. Unlike mutual funds, certificates of deposit are
insured up to $100,000 by the U.S. government and offer a fixed rate of return.

MISCELLANEOUS

The Prospectus and this Statement of Additional Information do not
contain all the information included in the Registration Statement filed with
the SEC (the "Commission") under the Securities Act with respect to the
securities offered by the Fund's Prospectus. Certain portions of the
Registration Statement have been omitted from the Prospectus and this Statement
of Additional Information, pursuant to the rules and regulations of the
Commission. The Registration Statement including the exhibits filed therewith
may be examined at the office of the Commission in Washington, D.C.

Statements contained in the Prospectus or in this Statement of
Additional Information as to the contents of any contract or other documents
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an

31
<PAGE> 82
exhibit to the Registration Statement of which the Prospectus and this Statement
of Additional Information form a part, each such statement being qualified in
all respects by such reference.

FINANCIAL STATEMENTS

The following financial statements have been audited and are attached
hereto:

1. Report of Independent Public Accountants
2. Statement of Assets and Liabilities
3. Statement of Operations
4. Notes to the Financial Statements

[To be filed by amendment.]

32
<PAGE> 83
PART C
OTHER INFORMATION

ITEM 23. EXHIBITS

EXHIBIT NO. EXHIBIT
- ----------- -------

(a) Master Trust Agreement of Lend Lease Funds dated October 28, 1999

(b) Registrant's By-Laws

(d-1) Advisory Agreement between Lend Lease Real Estate Investments,
Inc. and Lend Lease Funds dated _______, 1999*

(d-2) Sub-Advisory Agreement between Lend Lease Real Estate Investments,
Inc. and Lend Lease Rosen Real Estate Securities, LLC dated
___________, 1999*

(e) Distribution Agreement between the Lend Lease Funds and Sunstone
Distribution Services, LLC dated _______, 1999*

(f) None

(g) Custodian Agreement between The Wilmington Trust Company and the
Lend Lease Funds dated __________, 1999*

(h-1) Administration and Fund Accounting Agreement between the Lend
Lease Funds and Sunstone Financial Group, Inc. dated _______,
1999*

(h-2) Transfer Agency Agreement between the Lend Lease Funds and
Sunstone Financial Group, Inc. dated _____, 1999*

(i) Opinion of Goodwin, Procter & Hoar LLP*

(j) Consent of Independent Accountants*

(k) None

(l) Initial Capital Agreement*

(m) Distribution Plan and form of dealer agreement*

(n) Rule 18f-3 Plan*
<PAGE> 84
*To be filed by amendment

ITEM 24.PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 25. INDEMNIFICATION

Article VI of the Registrant's Master Trust Agreement provides that, to the
fullest extent permitted by law, the Trust shall indemnify (from the assets of
the Sub-Trust or Sub-Trusts in question) each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise (hereinafter referred to as a "Covered
Person") against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, expect with respect
to matter as to which it has been determined that such Covered Person had acted
with willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office (such conduct
referred to hereafter as "Disabling Conduct"). A determination that the Covered
Person is entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Covered Person was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments in compromise or as fines or penalties), may be paid
from time to time from funds attributable to the Sub-Trust in question in
advance of the final disposition of any such action, suit or proceeding,
provided that the Covered Person shall have undertaken to repay the amounts so
paid to the Sub-Trust in question if it is ultimately determined that
indemnification of such expenses is not authorized under this Article VI and (i)
the Covered Person shall have provided security for such undertaking, (ii) the
Trust shall be insured against losses arising by reason of any lawful advances,
or (iii) a majority of a quorum of the disinterested Trustees who are not a
party to the proceeding, or an independent legal counsel in a written opinion,
shall have determined, based on a review of readily available facts, (as opposed
to a full trial-type inquiry), that there is reason to believe that the Covered
Person ultimately will be found entitled to indemnification.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
<PAGE> 85
The Adviser serves as the investment adviser for the Registrant. The business
and other connections of the Adviser are set forth in the Uniform Application
for Investment Adviser Registration ("Form ADV") of the Adviser as currently
filed with the SEC, (SEC File Number 24771) which is incorporated by reference
herein.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) Sunstone Distribution Services, LLC currently serves as the distributor
of the shares of Choice Funds, First Omaha Funds, Inc., The Marsico
Investment Fund, Green Century Funds, The Haven Funds, JohnsonFamily
Funds, and La Crosse Funds.

(b) The principal business address of Sunstone Distribution Services, LLC,
the Registrant's distributor, is 207 East Buffalo Street, Suite 400,
Milwaukee, Wisconsin 53202. To the best of the Registrant's knowledge,
the following are the members and officers of Sunstone Distribution
Services, LLC:

<TABLE>
<CAPTION>
NAME POSITIONS AND OFFICES WITH POSITIONS AND OFFICES WITH
UNDERWRITER REGISTRANT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Miriam M. Allison President, Treasurer, Member None
- ----------------------------------------------------------------------------------------------------------------
Daniel S. Allison Secretary and Member None
- ----------------------------------------------------------------------------------------------------------------
Therese A. Ladwig Vice President None
- ----------------------------------------------------------------------------------------------------------------
Peter Hammond Vice President None
- ----------------------------------------------------------------------------------------------------------------
</TABLE>

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books or other documents required to be maintained by Section
31(a) of the Investment Company Act and the rules promulgated thereunder, are in
the possession of the Registrant, located at 1995 University Avenue, Suite 550,
Berkley, California 94704, other than records held and maintained by (i)The
Wilmington Trust Company, the Registrant's custodian, located at 1100 North
Market, 9th Floor, Wilmington, Delaware 19890; (ii) Sunstone Financial Group,
Inc., the Trust's administrator and fund accountant, transfer agent and
dividend-paying agent and Sunstone Distribution Services, LLC, the Registrant's
distributor, each of which is located at 207 East Buffalo Street, Suite 400,
Milwaukee, Wisconsin 53202.

ITEM 29. MANAGEMENT SERVICES

All management-related service contracts entered into by the Registrant are
discussed in Parts A and B of this Registration Statement.

ITEM 30. UNDERTAKINGS

None.
<PAGE> 86
SIGNATURES

Pursuant to the requirement of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended the Registrant certifies that
it has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Berkeley, and the State of
California on the 28th day of October, 1999.

LEND LEASE FUNDS

By: /s/Susan Lloyd-Hurwitz
-----------------------
Susan Lloyd-Hurwitz
Title: President

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date(s) indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/Susan Lloyd-Hurwitz Trustee; President; October 28, 1999
- ---------------------- Principal Executive
Officer
/s/Susan Lloyd-Hurwitz Trustee, Treasurer and October 28, 1999
- ---------------------- Secretary; Principal Financial
and Accounting Officer
</TABLE>

<PAGE> 1
EXHIBIT 99.a

MASTER TRUST AGREEMENT

AGREEMENT AND DECLARATION OF TRUST made as of this 28th day of October,
1999, by the Trustees hereunder, and by the holders of shares of beneficial
interest to be issued hereunder as hereinafter provided. This Declaration of
Trust shall be effective upon the filing of the Certificate of Trust in the
office of the Secretary of State of the State of Delaware.

W I T N E S S E T H:

WHEREAS this Trust has been formed to carry on the business of an
investment company; and

WHEREAS this Trust is authorized to issue its shares of beneficial
interest in separate series, each separate series to be a Sub-Trust hereunder,
and to issue classes of Shares of any Sub-Trust or divide Shares of any
Sub-Trust into two or more classes, all in accordance with the provisions
hereinafter set forth; and

WHEREAS the Trustees have agreed to manage all property coming into
their hands as trustees of a Delaware business trust in accordance with the
provisions of the Delaware Business Trust Act (12 Del. C. Section 3801, et
seq.), as from time to time amended and including any successor statute of
similar import (the "Act"), and the provisions hereinafter set forth.

NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of shares of beneficial interest in this Trust and the Sub-Trusts created
hereunder as hereinafter set forth.

ARTICLE I - NAME AND DEFINITIONS

Section 1.1 Name and Principal Office. This Trust shall be known as
"Lend Lease Funds" and the Trustees shall conduct the business of the Trust
under that name or any other name or names as they may from time to time
determine. The principal office of the Trust shall be at such location as the
Trustees may from time to time determine.

Section 1.2 Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:

(a) "Act" shall have the meaning given to it in the recitals
of this Declaration of Trust.
<PAGE> 2
(b) "Bankruptcy" shall be deemed to occur with respect to any
person when such person is voluntarily adjudicated a bankrupt or insolvent, or
seeks, consents to or does not contest the appointment of a receiver or trustee
for itself or all or any part of its property, or files a petition seeking
relief under the bankruptcy, arrangement, reorganization or other debtor relief
laws of the United States or any other competent jurisdiction, or makes a
general assignment for the benefit of creditors, or admits in writing its
inability to pay its debts as they mature, or when a petition is filed against
such person seeking relief under the bankruptcy, arrangement, reorganization or
other debtor relief laws of the United States or other competent jurisdiction or
a court of competent jurisdiction enters an order, judgment or decree
appointing, without the consent of such person, a receiver or trustee for it, or
for all or any part of its property, and such petition, order or decree shall
not be discharged or stayed within a period of 60 days after its entry;

(d) "class" refers to any class of Shares of any Series or
Sub-Trust established and designated under or in accordance with the provisions
of Article IV;

(e) "Commission" shall have the meaning given it in the 1940
Act;

(f) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time;

(g) "Incapacity" shall mean, as to any Person, the Bankruptcy
or the dissolution or termination (other than by merger or consolidation) of
such Person, or the death or adjudication of incapacity of such Person if such
Person is an individual;

(h) "Majority of the Outstanding Voting Shares" of the Trust
or Sub-Trust or of a class of a Sub-Trust shall mean the vote, at the annual or
a special meeting of Shareholders duly called, (A) of 67 per centum or more of
the Shares of the Trust or Sub-Trust present at such meeting, (or of a class of
a Sub-Trust, as the case may be) if holders of more than 50 per centum of the
outstanding Shares of the Trust or Sub-Trust (or of a class of a Sub-Trust, as
the case may be) are present or represented by proxy; or (B) of more than 50 per
centum of the outstanding voting Shares of the Trust or Sub-Trust or of a class
of a Sub-Trust, as the case may be, whichever is the less.

(i) "1940 Act" refers to the Investment Company Act of 1940
and the Rules and Regulations thereunder, all as amended from time to time;

<PAGE> 3
(j) "person" means a natural person, corporation, limited
liability company, trust, association, partnership (whether general, limited or
otherwise), joint venture or any other entity.

(k) "Shareholder" means a beneficial owner of record of
Shares;

(l) "Shares" refers to the transferable units of interest into
which the beneficial interest in the Trust and each Sub-Trust of the Trust
and/or any class of any Sub-Trust (as the context may require) shall be divided
from time to time;

(m) "Sub-Trust" or "Series" refers to a series of Shares
established and designated under or in accordance with the provisions of Article
IV;

(n) "Trust" refers to the Delaware business trust established
by this Declaration of Trust, inclusive of each and every Sub-Trust established
hereunder; and

(o) "Trustees" refers to the trustees of the Trust and of each
Sub-Trust hereunder named herein or elected in accordance with Article III.

ARTICLE II - PURPOSE OF TRUST

The purposes of the Trust are (i) to operate as an investment company
and to offer Shareholders of the Trust and each Sub-Trust of the Trust one or
more investment programs primarily in securities and debt instruments, and (ii)
to engage in such activities that are necessary, suitable, incidental or
convenient to the accomplishment of the foregoing.

ARTICLE III - THE TRUSTEES

Section 3.1 Number, Designation, Election, Term, etc.

(a) Trustees. The initial Trustee hereof and of each Sub-Trust
hereunder shall be Susan J. Lloyd-Hurwitz.

(b) Number. The Trustees serving as such, whether named above
or hereafter becoming Trustees, may increase or decrease the number of Trustees
to a number other than the number theretofore determined. No decrease in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of such Trustee's term, but the number of Trustees may
be decreased in conjunction with the removal of a Trustee pursuant to subsection
(e) of this Section 3.1.

(c) Election and Term. Trustees, in addition to those named
above, may become such by election by Shareholders or the Trustees in office
pursuant to Section 3.1(f). Each
<PAGE> 4
Trustee, whether named above or hereafter becoming a Trustee, shall serve as a
Trustee of the Trust and of each Sub-Trust hereunder during the lifetime of this
Trust and until its termination as hereinafter provided except as such Trustee
sooner dies, resigns, retires or is removed. Subject to Section 16(a) of the
1940 Act, the Trustees may elect successors and may, pursuant to Section 3.1(f)
hereof, appoint Trustees to fill vacancies.

(d) Resignation and Retirement. Any Trustee may resign or
retire as a trustee of the Trust, by written instrument signed by such Trustee
and delivered to the other Trustees or to any officer of the Trust, and such
resignation or retirement shall take effect upon such delivery or upon such
later date as is specified in such instrument and shall be effective as to the
Trust and each Sub-Trust hereunder.

(e) Removal. Any Trustee may be removed with or without cause
at any time: (i) by written instrument, signed by at least three-fourths of the
number of Trustees in office immediately prior to such removal, specifying the
date upon which such removal shall become effective; or (ii) by vote of
Shareholders holding not less than two-thirds of the Shares then outstanding,
cast in person or by proxy at any meeting called for the purpose; or (iii) by a
written declaration signed by Shareholders holding not less than two-thirds of
the Shares then outstanding and filed with the minutes of the Trust. Any such
removal shall be effective as to the Trust and each Sub-Trust hereunder.

(f) Vacancies. Any vacancy or anticipated vacancy resulting
from any reason, including without limitation the death, resignation,
retirement, removal or incapacity of any of the Trustees, or resulting from an
increase in the number of Trustees by the other Trustees may (but so long as
there are at least two remaining Trustees, need not unless required by the 1940
Act) be filled by a majority of the remaining Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, through the appointment in writing
of such other person as such remaining Trustees in their discretion shall
determine and such appointment shall be effective upon the written acceptance of
the person named therein to serve as a trustee of the Trust and agreement by
such person to be bound by the provisions of this Declaration of Trust, except
that any such appointment in anticipation of a vacancy to occur by reason of
voluntary or mandatory retirement, resignation or increase in number of Trustees
to be effective at a later date shall be deemed effective upon the effective
date of said retirement, resignation or increase in number of Trustees. As soon
as any Trustee so appointed shall have accepted such appointment and shall have
agreed in writing to be bound by this Declaration of Trust and the appointment
is effective, the Trust estate shall vest in the new Trustee, together with the
continuing Trustees, without any further act or conveyance.

(g) Effect of Death, Resignation, etc. The death, resignation,
voluntary or mandatory retirement, removal or incapacity of the Trustees, or any
one of them, shall cause a Trustee to cease to be a trustee of the Trust but
shall not operate to annul or terminate the Trust or any Sub-Trust hereunder or
to revoke or terminate any existing agency or contract created or entered into
pursuant to the terms of this Declaration of Trust.
<PAGE> 5
(h) No Accounting. Except to the extent required by the 1940
Act or under circumstances which would justify removal for cause, no person
ceasing to be a trustee of the Trust as a result of death, resignation,
voluntary or mandatory retirement, removal or incapacity (nor the estate of any
such person) shall be required to make an accounting to the Shareholders or
remaining Trustees upon such cessation.

Section 3.2 Powers of Trustees. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees, and they shall have all powers necessary or convenient to carry out
that responsibility and the purpose of the Trust. The Trustees in all instances
shall act as principals, and are and shall be free from the control of the
Shareholders. The Trustees shall have full power and authority to do any and all
acts and to make and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of the
Trust. The Trustees shall not be bound or limited by present or future laws or
customs with regard to investment by trustees or fiduciaries, but shall have
full authority and absolute power and control over the assets of the Trust and
the business of the Trust to the same extent as if the Trustees were the sole
owners of the assets of the Trust and the business in their own right, including
such authority, power and control to do all acts and things as they, in their
sole discretion, shall deem proper to accomplish the purposes of this Trust.
Without limiting the foregoing, the Trustees may adopt By-Laws not inconsistent
with this Declaration of Trust providing for the conduct of the business and
affairs of the Trust and may amend and repeal them to the extent that such
By-Laws do not reserve that right to the Shareholders; they may from time to
time in accordance with the provisions of Section 4.1 hereof establish
Sub-Trusts, each such Sub-Trust to operate as a separate and distinct investment
medium and with separately defined investment objectives and policies and
distinct investment purposes; they may from time to time in accordance with the
provisions of Section 4.1 hereof establish Series or establish classes of Shares
of any Series or Sub-Trust or divide the Shares of any Series or Sub-Trust into
classes; they may as they consider appropriate designate employees and agents
who may be denominated as officers with titles, including, but not limited to,
"president," "vice-president," "treasurer," "secretary," "assistant secretary,"
"assistant treasurer," "managing director," "chairman of the board" and "vice
chairman of the board" and who in such capacity may act for and on behalf of the
Trust, as and to the extent authorized by the Trustees, and appoint and
terminate agents and consultants and hire and terminate employees, any one or
more of the foregoing of whom may be a Trustee, and may provide for the
compensation of all of the foregoing; they may appoint from their own number,
and terminate, any one or more committees consisting of two or more Trustees,
including without implied limitation an executive committee, which may, when the
Trustees are not in session and subject to the 1940 Act, exercise some or all of
the power and authority of the Trustees as the Trustees may determine; in
accordance with Section 3.3 they may employ one or more advisers,
administrators, depositories and custodians and may authorize any depository or
custodian to employ subcustodians or agents and to deposit all or any part of
such assets in a system or systems for the central handling of securities and
debt instruments, retain transfer, dividend, accounting or Shareholder servicing
agents or any of the foregoing, provide for the distribution of Shares by the
Trust through one or
<PAGE> 6
more distributors, principal underwriters or otherwise, and subject to Section
5.3, set record dates or times for the determination of Shareholders or various
of them with respect to various matters; they may compensate or provide for the
compensation of the Trustees, officers, advisers, administrators, custodians,
other agents, consultants and employees of the Trust or the Trustees on such
terms as they deem appropriate; and in general they may delegate to any officer
of the Trust, to any committee of the Trustees and to any employee, adviser,
administrator, distributor, depository, custodian, transfer and dividend
disbursing agent, or any other agent or consultant of the Trust such authority,
powers, functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including without implied
limitation, the power and authority to act in the name of the Trust and any
Sub-Trust and of the Trustees, to sign documents and to act as attorney-in-fact
for the Trustees.

Without limiting the foregoing and to the extent not inconsistent with
the 1940 Act or other applicable law, the Trustees shall have power and
authority for and on behalf of the Trust and each separate Sub-Trust established
hereunder:

(a) Investments. To invest and reinvest cash and other
property, including, without implied limitation, to invest any and all of the
assets of the Trust in the securities of one or more open-end management
investment companies, and to hold cash or other property uninvested without in
any event being bound or limited by any present or future law or custom in
regard to investments by trustees;

(b) Disposition of Assets. To sell, exchange, lend, pledge,
mortgage, hypothecate, write options on and lease any or all of the assets of
the Trust;

(c) Ownership Powers. To vote or give assent, or exercise any
rights of ownership, with respect to stock or other securities, debt instruments
or property; and to execute and deliver proxies or powers of attorney to such
person or persons as the Trustees shall deem proper, granting to such person or
persons such power and discretion with relation to securities, debt instruments
or property as the Trustees shall deem proper;

(d) Subscription. To exercise powers and rights of
subscription or otherwise which in any manner arise out of ownership of
securities or debt instruments;

(e) Form of Holding. To hold any security, debt instrument or
property in a form not indicating any trust, whether in bearer, unregistered or
other negotiable form, or in the name of the Trustees or of the Trust or of any
Sub-Trust or in the name of a custodian, subcustodian or other depository or a
nominee or nominees or otherwise;

(f) Reorganization, etc. To consent to or participate in any
plan for the reorganization, consolidation or merger of any corporation or
issuer, any security or debt instrument of which is or was held in the Trust; to
consent to any contract, lease, mortgage,
<PAGE> 7
purchase or sale of property by such corporation or issuer, and to pay calls or
subscriptions with respect to any security or debt instrument held in the Trust;

(g) Voting Trusts, etc. To join with other holders of any
securities or debt instruments in acting through a committee, depositary, voting
trustee or otherwise, and in that connection to deposit any security or debt
instrument with, or transfer any security or debt instrument to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security or debt instrument (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall deem proper;

(h) Compromise. To compromise, arbitrate or otherwise adjust
claims in favor of or against the Trust or any Sub-Trust or any matter in
controversy, including but not limited to claims for taxes;

(i) Partnerships, etc. To enter into joint ventures, general
or limited partnerships, limited liability companies and any other combinations
or associations;

(j) Borrowing and Security. To borrow funds and to mortgage
and pledge the assets of the Trust or any part thereof to secure obligations
arising in connection with such borrowing;

(k) Guarantees, etc. To endorse or guarantee the payment of
any notes or other obligations of any person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof; and to mortgage
and pledge the Trust property or any part thereof to secure any of or all such
obligations;

(l) Insurance. To purchase and pay for entirely out of Trust
property such insurance and/or bonding as they may deem necessary or appropriate
for the conduct of the business, including, without limitation, insurance
policies insuring the assets of the Trust and payment of distributions and
principal on its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, consultants, investment
advisers, managers, administrators, distributors, principal underwriters, or
independent contractors, or any thereof (or any person connected therewith), of
the Trust individually against all claims and liabilities of every nature
arising by reason of holding, being or having held any such office or position,
or by reason of any action alleged to have been taken or omitted by any such
person in any such capacity, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability;

(m) Pensions, etc. To pay pensions for faithful service, as
deemed appropriate by the Trustees, and to adopt, establish and carry out
pension, profit-sharing, share bonus, share
<PAGE> 8
purchase, savings, thrift and other retirement, incentive and benefit plans,
trusts and provisions, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust; and

(n) Distribution Plans. To adopt on behalf of the Trust or any
Sub-Trust, including with respect to any class thereof, a plan of distribution
and related agreements thereto pursuant to the terms of Rule 12b-1 of the 1940
Act and to make payments from the assets of the Trust or the relevant Sub-Trust
or Sub-Trusts pursuant to said Rule 12b-1 Plan.

Section 3.3 Certain Contracts. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present and
future law or custom in regard to delegation of powers by trustees generally,
the Trustees may, at any time and from time to time and without limiting the
generality of their powers and authority otherwise set forth herein, enter into
one or more contracts with any one or more corporations, trusts, associations,
partnerships, limited partnerships, limited liability companies, other type of
organizations, or individuals (a "Contracting Party"), to provide for the
performance and assumption of some or all of the following services, duties and
responsibilities to, for or on behalf of the Trust and/or any Sub-Trust, and/or
the Trustees, and to provide for the performance and assumption of such other
services, duties and responsibilities in addition to those set forth below as
the Trustees may determine appropriate:

(a) Advisory. Subject to the general supervision of the
Trustees and in conformity with the stated policy of the Trustees with respect
to the investments of the Trust or of the assets belonging to any Sub-Trust of
the Trust (as that phrase is defined in subsection (a) of Section 4.2), to
manage such investments and assets, make investment decisions with respect
thereto, and to place purchase and sale orders for portfolio transactions
relating to such investments and assets;

(b) Administration. Subject to the general supervision of the
Trustees and in conformity with any policies of the Trustees with respect to the
operations of the Trust and each Sub-Trust (including each class thereof), to
supervise all or any part of the operations of the Trust and each Sub-Trust, and
to provide all or any part of the administrative and clerical personnel, office
space and office equipment and services appropriate for the efficient
administration and operations of the Trust and each Sub-Trust;

(c) Distribution. To distribute the Shares of the Trust and
each Sub-Trust (including any classes thereof), to be principal underwriter of
such Shares, and/or to act as agent of the Trust and each Sub-Trust in the sale
of Shares and the acceptance or rejection of orders for the purchase of Shares;

(d) Custodian and Depository. To act as depository for and to
maintain custody of the property of the Trust and each Sub-Trust and accounting
records in connection therewith;
<PAGE> 9
(e) Transfer and Dividend Disbursing Agency. To maintain
records of the ownership of outstanding Shares, the issuance and redemption and
the transfer thereof, and to disburse any dividends declared by the Trustees and
in accordance with the policies of the Trustees and/or the instructions of any
particular Shareholder to reinvest any such dividends;

(f) Shareholder Servicing. To provide service with respect to
the relationship of the Trust and its Shareholders, records with respect to
Shareholders and their Shares, and similar matters; and

(g) Accounting. To handle all or any part of the accounting
responsibilities, whether with respect to the Trust's properties, Shareholders
or otherwise.

The same person may be the Contracting Party for some or all of the services,
duties and responsibilities to, for and of the Trust and/or the Trustees, and
the contracts with respect thereto may contain such terms interpretive of or in
addition to the delineation of the services, duties and responsibilities
provided for, including provisions that are not inconsistent with the 1940 Act
relating to the standard of duty of and the rights to indemnification of the
Contracting Party and others, as the Trustees may determine. Nothing herein
shall preclude, prevent or limit the Trust or a Contracting Party from entering
into sub-contractual arrangements relating to any of the matters referred to in
Sections 3.3(a) through (g) hereof.

The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter or distributor or agent of or
for any Contracting Party, or of or for any parent or affiliate of any
Contracting Party or that the Contracting Party or any parent or
affiliate thereof is a Shareholder or has an interest in the Trust or
any Sub-Trust, or that

(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited partnerships,
limited liability companies or other organizations, or have other
business or interests,

shall not affect the validity of any contract for the performance and assumption
of services, duties and responsibilities to, for or of the Trust or any
Sub-Trust and/or the Trustees or disqualify any Shareholder, Trustee or officer
of the Trust from voting upon or executing the same or create any liability or
accountability to the Trust, any Sub-Trust or its Shareholders, provided that in
the case of any relationship or interest referred to in the preceding clause (i)
on the part of any Trustee or officer of the Trust either (x) the material facts
as to such relationship or interest have been disclosed to or are known by the
Trustees not having any such relationship or interest and the contract involved
is approved in good faith by a majority of such Trustees not having any such
relationship or interest (even though such unrelated or disinterested Trustees
are less than a
<PAGE> 10
quorum of all of the Trustees), (y) the material facts as to such relationship
or interest and as to the contract have been disclosed to or are known by the
Shareholders entitled to vote thereon and the contract involved is specifically
approved in good faith by vote of the Shareholders, or (z) the specific contract
involved is fair to the Trust as of the time it is authorized, approved or
ratified by the Trustees or by the Shareholders.

Section 3.4 Payment of Trust Expenses and Compensation of Trustees. The
Trustees are authorized to pay or to cause to be paid out of the principal or
income of the Trust or any Sub-Trust, or partly out of principal and partly out
of income, and to charge or allocate the same to, between or among such one or
more of the Sub-Trusts and/or one or more classes of Shares thereof that may be
established and designated pursuant to Article IV, as the Trustees deem fair,
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, any Sub-Trust and/or any class of Shares thereof, or
in connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the services of the
Trust's officers, employees, investment adviser, administrator, distributor,
principal underwriter, auditor, counsel, depository, custodian, transfer agent,
dividend disbursing agent, accounting agent, Shareholder servicing agent, and
such other agents, consultants, and independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
Without limiting the generality of any other provision hereof, the Trustees
shall be entitled to reasonable compensation from the Trust for their services
as trustees of the Trust and may fix the amount of such compensation.

Section 3.5 Ownership of Assets of the Trust. Title to all of the
assets of the Trust and of each Sub-Trust shall at all times be considered as
vested in the Trust.

Section 3.6 Action by Trustees. Except as otherwise provided by the
1940 Act or other applicable law, this Declaration of Trust or the By-Laws, any
action to be taken by the Trustees on behalf of or with respect to the Trust or
any Sub-Trust or class thereof may be taken by a majority of the Trustees
present at a meeting of Trustees (a quorum, consisting of at least one-half of
the Trustees then in office, being present), within or without Delaware,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting, or by written consents of a
majority of the Trustees then in office (or such larger or different number as
may be required by the 1940 Act or other applicable law).

ARTICLE IV - SHARES
<PAGE> 11
Section 4.1 Description of Shares. The beneficial interest in the Trust
shall be divided into Shares, all with $0.0001 par value, but the Trustees shall
have the authority from time to time to issue Shares in one or more Series (each
of which Series of Shares shall represent the beneficial interest in a separate
and distinct Sub-Trust of the Trust, including without limitation each Sub-Trust
specifically established and designated in Section 4.2), as they deem necessary
or desirable. For all purposes under this Declaration of Trust or otherwise,
including, without implied limitation, (i) with respect to the rights of
creditors and (ii) for purposes of interpreting the relevant rights of each
Sub-Trust and the Shareholders of each Sub-Trust, each Sub-Trust established
hereunder shall be deemed to be a separate trust. Notice of the limitation of
liabilities of a Sub-Trust shall be set forth in the certificate of trust of the
Trust, and debts, liabilities, obligations and expenses incurred, contracted for
or otherwise existing with respect to a particular Sub-Trust shall be
enforceable against the assets of such Sub-Trust only, and not against the
assets of the Trust generally or any other Sub-Trust. The Trustees shall have
exclusive power without the requirement of Shareholder approval to establish and
designate such separate and distinct Sub-Trusts, and to fix and determine the
relative rights and preferences as between the shares of the separate Sub-Trusts
as to right of redemption and the price, terms and manner of redemption, special
and relative rights as to dividends and other distributions and on liquidation,
sinking or purchase fund provisions, conversion rights, and conditions under
which the several Sub-Trusts shall have separate voting rights or no voting
rights.

In addition, the Trustees shall have exclusive power, without the
requirement of Shareholder approval, to issue classes of Shares of any Sub-Trust
or divide the Shares of any Sub-Trust into classes, each class having such
different dividend, liquidation, voting and other rights as the Trustees may
determine in their sole discretion, and may establish and designate the specific
classes of Shares of each Sub-Trust. The fact that a Sub-Trust shall have
initially been established and designated without any specific establishment or
designation of classes (i.e., that all Shares of such Sub-Trust are initially of
a single class), or that a Sub-Trust shall have more than one established and
designated class, shall not limit the authority of the Trustees to establish and
designate separate classes, or one or more further classes, of said Sub-Trust
without approval of the holders of the initial class thereof, or previously
established and designated class or classes thereof.

The number of authorized Shares and the number of Shares of each
Sub-Trust or class thereof that may be issued is unlimited, and the Trustees may
issue Shares of any Sub-Trust or class thereof for such consideration and on
such terms as they may determine (or for no consideration if pursuant to a Share
dividend or split-up), all without action or approval of the Shareholders. All
Shares when so issued on the terms determined by the Trustees shall be fully
paid and non-assessable (but may be subject to mandatory contribution back to
the Trust as provided in subsection (h) of Section 4.2). The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Sub-Trust or class thereof into one or more Sub-Trusts or
classes thereof that may be established and designated from time to time. The
Trustees may hold as treasury Shares, reissue for such consideration and on such
terms as
<PAGE> 12
they may determine, or cancel, at their discretion from time to time, any Shares
of any Sub-Trust or class thereof reacquired by the Trust.

The Trustees may from time to time close the transfer books or
establish record dates and times for the purposes of determining the holders of
Shares entitled to be treated as such, to the extent provided or referred to in
Section 5.3.

The establishment and designation of any Sub-Trust or of any class of
Shares of any Sub-Trust in addition to those established and designated in
Section 4.2 shall be effective (i) upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation of
the relative rights and preferences of the Shares of such Sub-Trust or class,
(ii) upon the execution of an instrument in writing by an officer of the Trust
pursuant to the vote of a majority of the Trustees, or (iii) as otherwise
provided in either such instrument. At any time that there are no Shares
outstanding of any particular Sub-Trust or class previously established and
designated, the Trustees may by an instrument executed by a majority of their
number (or by an instrument executed by an officer of the Trust pursuant to the
vote of a majority of the Trustees) abolish that Sub-Trust or class and the
establishment and designation thereof. Each instrument establishing and
designating any Sub-Trust shall have the status of an amendment to this
Declaration of Trust.

Any Trustee, officer or other agent of the Trust, and any organization
in which any such person is interested may acquire, own, hold and dispose of
Shares of any Sub-Trust (including any classes thereof) of the Trust to the same
extent as if such person were not a Trustee, officer or other agent of the
Trust; and the Trust may issue and sell or cause to be issued and sold and may
purchase Shares of any Sub-Trust (including any classes thereof) from any such
person or any such organization subject only to the general limitations,
restrictions or other provisions applicable to the sale or purchase of Shares of
such Sub-Trust (including any classes thereof) generally.

Section 4.2 Establishment and Designation of Sub-Trusts and Classes.
Without limiting the authority of the Trustees set forth in Section 4.1 to
establish and designate any further Sub-Trusts, the Trustees hereby establish
and designate the following Sub-Trust: "Lend Lease Rosen Core Plus Real Estate
Fund". The Shares of such Sub-Trust and any Shares of any further Sub-Trust or
class thereof that may from time to time be established and designated by the
Trustees shall (unless the Trustees otherwise determine with respect to some
further Sub-Trust at the time of establishing and designating the same) have the
following relative rights and preferences:

(a) Assets Belonging to Sub-Trusts. All consideration received
by the Trust for the issue or sale of Shares of a particular Sub-Trust or any
classes thereof, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall be held by the Trustees in trust for the
benefit of the holders of Shares of that
<PAGE> 13
Sub-Trust or class thereof and shall irrevocably belong to that Sub-Trust (and
be allocable to any classes thereof) for all purposes, and shall be so recorded
upon the books of account of the Trust. Separate and distinct records shall be
maintained for each Sub-Trust and the assets associated with a Sub-Trust shall
be held and accounted for separately from the other assets of the Trust, or any
other Sub-Trust. Such consideration, assets, income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be, together with
any General Items (as hereinafter defined) allocated to that Sub-Trust as
provided in the following sentence, are herein referred to as "assets belonging
to" that Sub-Trust (and allocable to any classes thereof). In the event that
there are any assets, income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any particular
Sub-Trust (collectively "General Items"), the Trustees shall allocate such
General Items to and among any one or more of the Sub-Trusts established and
designated from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable; and any General Items so allocated to
a particular Sub-Trust shall belong to that Sub-Trust (and be allocable to any
classes thereof). Each such allocation by the Trustees shall be conclusive and
binding upon the holders of all Shares of all Sub-Trusts (including any classes
thereof) for all purposes.

(b) Liabilities Belonging to Sub-Trusts. The assets belonging
to each particular Sub-Trust shall be charged with the liabilities in respect of
that Sub-Trust and all expenses, costs, charges and reserves belonging to that
Sub-Trust, and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any particular
Sub-Trust shall be allocated and charged by the Trustees to and among any one or
more of the Sub-Trusts established and designated from time to time in such
manner and on such basis as the Trustees in their sole discretion shall
determine. In addition, the liabilities in respect of a particular class of
Shares of a particular Sub-Trust and all expenses, costs, charges and reserves
belonging to that class of Shares, and any general liabilities, expenses, costs,
charges or reserves of that particular Sub-Trust which are not readily
identifiable as belonging to any particular class of Shares of that Sub-Trust
shall be allocated and charged by the Trustees to and among any one or more of
the classes of Shares of that Sub-Trust established and designated from time to
time in such manner and on such basis as the Trustees in their sole discretion
shall determine. The liabilities, expenses, costs, charges and reserves
allocated and so charged to a Sub-Trust or class thereof are herein referred to
as "liabilities belonging to" that Sub-Trust or class thereof. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders, creditors and any other persons
dealing with the Trust or any Sub-Trust (including any classes thereof) for all
purposes. Any creditor of any Sub-Trust may look only to the assets of that
Sub-Trust to satisfy such creditor's debt.

The Trustees shall have full discretion, to the extent not inconsistent
with the 1940 Act, to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.
<PAGE> 14
(c) Dividends. Dividends and distributions on Shares of a
particular Sub-Trust or any class thereof may be paid with such frequency as the
Trustees in their sole discretion may determine, which may be daily or otherwise
pursuant to a standing resolution or resolutions adopted only once or with such
frequency as the Trustees in their sole discretion may determine, to the holders
of Shares of that Sub-Trust or class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that Sub-Trust, or in the case
of a class, belonging to that Sub-Trust and allocable to that class, as the
Trustees in their sole discretion may determine, after providing for actual and
accrued liabilities belonging to that Sub-Trust or class. All dividends and
distributions on Shares of a particular Sub-Trust or class thereof shall be
distributed pro rata to the holders of Shares of that Sub-Trust or class in
proportion to the number of Shares of that Sub-Trust or class held by such
holders at the date and time of record established for the payment of such
dividends or distributions, except that in connection with any dividend or
distribution program or procedure the Trustees in their sole discretion may
determine that no dividend or distribution shall be payable on Shares as to
which the Shareholder's purchase order and/or payment have not been received by
the time or times established by the Trustees under such program or procedure.
Such dividends and distributions may be made in cash or Shares of that Sub-Trust
or class or a combination thereof as determined by the Trustees in their sole
discretion or pursuant to any program that the Trustees may have in effect at
the time for the election by each Shareholder of the mode of the making of such
dividend or distribution to that Shareholder. Any such dividend or distribution
paid in Shares will be paid at the net asset value thereof as determined in
accordance with subsection (h) of this Section 4.2.

The Trustees shall have full discretion to the extent not inconsistent
with the 1940 Act to determine which items shall be treated as income and which
items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders.

(d) Liquidation. In the event of the liquidation or
dissolution of the Trust, subject to Section 7.1 hereof, the holders of Shares
of each Sub-Trust or any class thereof that has been established and designated
shall be entitled to receive, when and as declared by the Trustees, the excess
of the assets belonging to that Sub-Trust, or in the case of a class, belonging
to that Sub-Trust and allocable to that class, over the liabilities belonging to
that Sub-Trust or class. The assets so distributable to the holders of Shares of
any particular Sub-Trust or class thereof shall be distributed among such
holders in proportion to the number of Shares of that Sub-Trust or class thereof
held by them and recorded on the books of the Trust. The liquidation of any
particular Sub-Trust or class thereof may be authorized at any time by vote of a
majority of the Trustees then in office.

(e) Voting. Each holder of Shares entitled to vote on a matter
submitted to a vote of Shareholders shall be entitled to one vote for each
dollar of net asset value standing in such Shareholder's name on the books of
the Trust with respect to such Shares irrespective of the Series thereof or
class thereof and all Shares of all Series and classes thereof shall vote
together as a single class; provided, however, that as to any matter (i) with
respect to which a separate vote of one or more Series or classes thereof is
required by the 1940 Act or the provisions of the writing
<PAGE> 15
establishing and designating the Sub-Trust or class, such requirements as to a
separate vote by such Series or class thereof shall apply in lieu of all Shares
of all Series and classes thereof voting together; and (ii) as to any matter
which affects the interests of one or more particular Series or classes thereof,
only the holders of Shares of the one or more affected Series or classes shall
be entitled to vote, and each such Series or class shall vote as a separate
class.

(f) Redemption by Shareholder. Each holder of Shares of a
particular Sub-Trust or any class thereof shall have the right at such times as
may be permitted by the Trust to require the Trust to redeem all or any part of
such holder's Shares of that Sub-Trust or class thereof at a redemption price
equal to the net asset value per Share of that Sub-Trust or class thereof next
determined in accordance with subsection (h) of this Section 4.2 after the
Shares are properly tendered for redemption, subject to any contingent deferred
sales charge or redemption charge in effect at the time of redemption. Payment
of the redemption price shall be in cash; provided, however, that if the
Trustees determine, which determination shall be conclusive, that conditions
exist which make payment wholly in cash unwise or undesirable, the Trust may,
subject to the requirements of the 1940 Act, make payment wholly or partly in
securities or other assets belonging to the Sub-Trust of which the Shares being
redeemed are part at the value of such securities or assets used in such
determination of net asset value.

Notwithstanding the foregoing, the Trust may postpone payment of the
redemption price and may suspend the right of the holders of Shares of any
Sub-Trust or class thereof to require the Trust to redeem Shares of that
Sub-Trust during any period or at any time when and to the extent permissible
under the 1940 Act.

(g) Redemption by Trust. Each Share of each Sub-Trust or class
thereof that has been established and designated is subject to redemption by the
Trust at the redemption price which would be applicable if such Share was then
being redeemed by the Shareholder pursuant to subsection (f) of this Section
4.2: (i) at any time, in the sole discretion of the Trustees, or (ii) upon such
other conditions as may from time to time be determined by the Trustees and set
forth in the then current Prospectus of the Trust. Upon such redemption the
holders of the Shares so redeemed shall have no further right with respect
thereto other than to receive payment of such redemption price.

(h) Net Asset Value. The net asset value per Share of any
Sub-Trust shall be (i) in the case of a Sub-Trust whose Shares are not divided
into classes, the quotient obtained by dividing the value of the net assets of
that Sub-Trust (being the value of the assets belonging to that Sub-Trust less
the liabilities belonging to that Sub-Trust) by the total number of Shares of
that Sub-Trust outstanding, and (ii) in the case of a class of Shares of a
Sub-Trust whose Shares are divided into classes, the quotient obtained by
dividing the value of the net assets of that Sub-Trust allocable to such class
(being the value of the assets belonging to that Sub-Trust allocable to such
class less the liabilities belonging to such class) by the total number of
Shares of such class outstanding; all determined in accordance with the methods
and procedures, including without limitation those with respect to rounding,
established by the Trustees from time to time.
<PAGE> 16
The Trustees may in their sole discretion determine to maintain the net
asset value per Share of any Sub-Trust at a designated constant dollar amount
and in connection therewith may adopt procedures not inconsistent with the 1940
Act for the continuing declarations of income attributable to that Sub-Trust as
dividends payable in additional Shares of that Sub-Trust at the designated
constant dollar amount and for the handling of any losses attributable to that
Sub-Trust. Such procedures may provide that in the event of any loss each
Shareholder shall be deemed to have contributed to the capital of the Trust
attributable to that Sub-Trust such Shareholder's pro rata portion of the total
number of Shares required to be cancelled in order to permit the net asset value
per Share of that Sub-Trust to be maintained, after reflecting such loss, at the
designated constant dollar amount. Each Shareholder of the Trust shall be deemed
to have agreed, by making an investment in any Sub-Trust with respect to which
the Trustees shall have adopted any such procedure, to make the contribution
referred to in the preceding sentence in the event of any such loss.

(i) Transfer. All Shares of each particular Sub-Trust or class
thereof shall be transferable, but transfers of Shares of a particular Sub-Trust
or class thereof will be recorded on the Share transfer records of the Trust
applicable to that Sub-Trust or class only at such times as Shareholders shall
have the right to require the Trust to redeem Shares of that Sub-Trust or class
and at such other times as may be permitted by the Trustees.

(j) Equality. Except as provided herein or in the instrument
designating and establishing any class of Shares or any Sub-Trust, all Shares of
each particular Sub-Trust or class thereof shall represent an equal
proportionate interest in the assets belonging to that Sub-Trust, or in the case
of a class, belonging to that Sub-Trust and allocable to that class, subject to
the liabilities belonging to that Sub-Trust or class, and each Share of any
particular Sub-Trust or class shall be equal to each other Share of that
Sub-Trust or class; but the provisions of this sentence shall not restrict any
distinctions permissible under subsection (c) of this Section 4.2 that may exist
with respect to dividends and distributions on Shares of the same Sub-Trust or
class. The Trustees in their sole discretion may from time to time divide or
combine the Shares of any particular Sub-Trust or class into a greater or lesser
number of Shares of that Sub-Trust or class without thereby changing the
proportionate beneficial interest in the assets belonging to that Sub-Trust or
class or in any way affecting the rights of Shares of any other Sub-Trust or
class.

(k) Fractions. Any fractional Share of any Sub-Trust or class,
if any such fractional Share is outstanding, shall carry proportionately all the
rights and obligations of a whole Share of that Sub-Trust or class, including
rights and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust.

(l) Conversion Rights. Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to provide
that holders of Shares of any Sub-Trust or class thereof shall have the right to
convert said Shares into Shares of one or more other
<PAGE> 17
Sub-Trust or class thereof in accordance with such requirements and procedures
as may be established by the Trustees.

(m) Class Differences. Subject to Section 4.1, the relative
rights and preferences of the classes of any Sub-Trust may differ in such other
respects as the Trustees may determine to be appropriate in their sole
discretion, provided that such differences are set forth in the instrument
establishing and designating such classes and executed by a majority of the
Trustees (or by an instrument executed by an officer of the Trust pursuant to a
vote of a majority of the Trustees).

Section 4.3 Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each
Sub-Trust and each class thereof that has been established and designated. No
certificates certifying the ownership of Shares need be issued except as the
Trustees in their sole discretion may otherwise determine from time to time. The
Trustees may make such rules as they consider appropriate for the issuance of
Share certificates, the use of facsimile signatures, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders and as to the number of Shares of each Sub-Trust and class
thereof held from time to time by each such Shareholder.

Section 4.4 Investments in the Trust. The Trustees may accept or reject
investments in the Trust and each Sub-Trust from such persons and on such terms
and for such consideration, not inconsistent with the provisions of the 1940
Act, as they from time to time authorize or determine. The Trustees may
authorize any distributor, principal underwriter, custodian, transfer agent or
other person to accept orders for the purchase of Shares that conform to such
authorized terms and to reject any purchase orders for Shares whether or not
conforming to such authorized terms.

Section 4.5 No Pre-emptive Rights. Shareholders shall have no
pre-emptive or other right to subscribe to any additional Shares or other
securities issued by the Trust or any Sub-Trust.

Section 4.6 Status of Shares and Limitation of Personal Liability.
Shares shall be deemed to be personal property giving only the rights provided
in this Declaration of Trust. Every Shareholder by virtue of acquiring Shares
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the continuance of the Trust shall not
operate to dissolve or terminate the Trust or any Sub-Trust thereof nor entitle
the representative of such Shareholder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but only to the rights of
such Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders partners. Neither the
Trust nor the Trustees, nor any officer, employee or agent of the Trust shall
have any power to bind personally any Shareholder, nor
<PAGE> 18
except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.

Section 4.7 No Appraisal Rights. Shareholders shall have no right to
demand payment for their shares or to any other rights of dissenting
shareholders in the event the Trust participates in any transaction which would
give rise to appraisal or dissenters' rights by a shareholder of a corporation
organized under the General Corporation Law of the State of Delaware, or
otherwise.

ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS

Section 5.1 Voting Powers. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Section 3.1,
(ii) with respect to any contract with a Contracting Party as provided in
Section 3.3 as to which Shareholder approval is required by the 1940 Act, (iii)
with respect to any termination or reorganization of the Trust to the extent and
as provided in Sections 7.1 and 7.2, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Section 7.3, and (v) with
respect to such additional matters relating to the Trust as may be required by
the 1940 Act, this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
Proxies may be given orally or in writing or pursuant to any computerized or
mechanical data gathering process specifically approved by the Trustees. A proxy
with respect to Shares held in the name of two or more persons shall be valid if
executed by any one of them unless at or prior to exercise of the proxy the
Trust receives a specific written notice to the contrary from any one of them. A
proxy purporting to be executed by or on behalf of a Shareholder shall be deemed
valid unless challenged at or prior to its exercise and the burden of proving
invalidity shall rest on the challenger. Until Shares are issued, the Trustees
may exercise all rights of Shareholders and may take any action required by law,
this Declaration of Trust or the By-Laws to be taken by Shareholders.

Section 5.2 Meetings. No annual or regular meeting of Shareholders is
required. Special meetings of Shareholders may be called by the Trustees from
time to time for the purpose of taking action upon any matter requiring the vote
or authority of the Shareholders as herein provided or upon any other matter
deemed by the Trustees in their sole discretion to be necessary or desirable.
Shareholder meetings may be held at such time and place within the continental
United States as may be fixed by the Trustees. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees by mailing
such notice at least seven days and not more than 90 days before such meeting,
postage prepaid, stating the time, place and purpose of the meeting, to each
Shareholder at the Shareholder's address as it appears on the records of the
Trust. The Trustees shall promptly call and give notice of a meeting of
Shareholders for the purpose of voting upon removal of any Trustee of the Trust
when requested to do so in writing by Shareholders holding not less than 10% of
the Shares then outstanding. If the Trustees shall
<PAGE> 19
fail to call or give notice of any meeting of Shareholders for a period of 30
days after written application by Shareholders holding at least 10% of the
Shares then outstanding requesting a meeting be called for any other purpose
requiring action by the Shareholders as provided herein or in the By-Laws, then
Shareholders holding at least 10% of the Shares then outstanding may call and
give notice of such meeting, and thereupon the meeting shall be held in the
manner provided for herein in case of call thereof by the Trustees.

Section 5.3 RECORD DATES. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding 30 days (except at or in
connection with the termination of the Trust), as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date and time not more
than 90 days prior to the date of any meeting of Shareholders or other action as
the date and time of record for the determination of Shareholders entitled to
vote at such meeting or any adjournment thereof or to be treated as Shareholders
of record for purposes of such other action, and any Shareholder who was a
Shareholder at the date and time so fixed shall be entitled to vote at such
meeting or any adjournment thereof or to be treated as a Shareholder of record
for purposes of such other action, even though such Shareholder has since that
date and time disposed of such Shareholder's Shares, and no Shareholder becoming
such after that date and time shall be so entitled to vote at such meeting or
any adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action.

Section 5.4 QUORUM AND REQUIRED VOTE. Except as otherwise provided by
the 1940 Act or other applicable law, thirty percent of the Shares entitled to
vote shall be a quorum for the transaction of business at a Shareholders'
meeting, but any lesser number shall be sufficient for adjournments. Any meeting
of shareholders, whether or not a quorum is present, may be adjourned for any
lawful purpose provided that no meeting shall be adjourned for more than six
months beyond the originally scheduled meeting date. Any adjourned session or
sessions may be held, within a reasonable time after the date set for the
original meeting without the necessity of further notice. A majority of the
Shares voted at a meeting at which a quorum is present, shall decide any
questions and a plurality shall elect a Trustee, except when a different vote is
required or permitted by any provision of the 1940 Act or other applicable law
or by this Declaration of Trust or the By-Laws.

Section 5.5 ACTION BY WRITTEN CONSENT. Subject to the provisions of the
1940 Act and other applicable law, any action taken by Shareholders may be taken
without a meeting if a majority of Shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by the 1940 Act or by
any express provision of this Declaration of Trust or the By-Laws) consent to
the action in writing and such written consents are filed with the records of
the meetings of Shareholders. Such consent shall be treated for all purposes as
a vote taken at a meeting of Shareholders.
<PAGE> 20
Section 5.6 INSPECTION OF RECORDS. The records of the Trust shall be
open to inspection by Shareholders for any lawful purpose reasonably related to
a Shareholder's interest as a Shareholder. The Trustees may from time to time
establish reasonable standards, including standards governing what information
and documents are to be furnished, at what time and location and at whose
expense, with respect to Shareholders' inspection of Trust records.

Section 5.7 ADDITIONAL PROVISIONS. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.

ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION

Section 6.1 TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE.
All persons extending credit to, contracting with or having any claim against
the Trust shall look only to the assets of the Sub-Trust with which such person
dealt for payment under such credit, contract or claim; and neither the
Shareholders of any Sub-Trust nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, nor any other Sub-Trust
shall be personally liable therefor. Every note, bond, contract, instrument,
certificate or undertaking and every other act or thing whatsoever executed or
done by or on behalf of the Trust, any Sub-Trust or the Trustees or any of them
in connection with the Trust shall be conclusively deemed to have been executed
or done only by or for the Trust (or the Sub-Trust) or the Trustees and not
personally. The Trustees and the Trust's officers, employees and agents shall
not be liable to the Trust or the Shareholders; provided however, that nothing
in this Declaration of Trust shall protect any Trustee or officer, employee or
agent against any liability to the Trust or the Shareholders to which such
Trustee or officer, employee or agent would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee or of such officer,
employee or agent.

Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
the same was executed or made by or on behalf of the Trust or by them as
Trustees or Trustee or as officers or officer and not individually and that the
obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only upon the assets and property of
the Trust, or the particular Sub-Trust in question, as the case may be, but the
omission thereof shall not operate to bind any Trustees or Trustee or officers
or officer or Shareholders or Shareholder individually or otherwise invalidate
any such note, bond, contract, instrument, certificate or undertaking.

Section 6.2 TRUSTEE'S GOOD FAITH ACTION; EXPERT ADVICE; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretion hereunder
shall be binding upon everyone interested. A Trustee shall be liable to the
Trust and the Shareholders for such Trustee's own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall not be liable
for errors of judgment or mistakes of fact or law. Subject to the foregoing, (a)
the Trustees shall not be
<PAGE> 21
responsible or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, consultant, adviser, administrator, distributor or principal
underwriter, custodian or transfer, dividend disbursing, Shareholder servicing
or accounting agent of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee; (b) the Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with such advice or for failing
to follow such advice; and (c) in discharging their duties, the Trustees, when
acting in good faith, shall be entitled to rely upon the books of account of the
Trust and upon written reports made to the Trustees by any officer appointed by
them, any independent public accountant, and (with respect to the subject matter
of the contract involved) any officer, partner or responsible employee of a
Contracting Party appointed by the Trustees pursuant to Section 3.3. The
Trustees as such shall not be required to give any bond or surety or any other
security for the performance of their duties. To the extent that, at law or in
equity, a Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to a Shareholder, any such Trustee acting under
this Declaration of Trust shall not be liable to the Trust or to any such
Shareholder for the Trustee's good faith reliance on the provisions of this
Declaration of Trust. The provisions of this Declaration of Trust, to the extent
that they restrict the duties and liabilities of a Trustee otherwise existing at
law or in equity, are agreed by the Shareholders to replace such other duties
and liabilities of such Trustee.

Section 6.3 INDEMNIFICATION OF SHAREHOLDERS. In case any Shareholder
(or former Shareholder) of any Sub-Trust of the Trust shall be charged or held
to be personally liable for any obligation or liability of the Trust solely by
reason of being or having been a Shareholder and not because of such
Shareholder's acts or omissions or for some other reason, the Trust on behalf of
said Sub-Trust (upon proper and timely request by the Shareholder) shall assume
the defense against such charge and satisfy any judgment thereon, and, to the
fullest extent permitted by law, the Shareholder or former Shareholder (or such
Shareholder's heirs, executors, administrators or other legal representatives or
in the case of a corporation or other entity, its corporate or other general
successor) shall be entitled out of the assets of said Sub-Trust estate to be
held harmless from and indemnified against all loss and expense arising from
such liability.

Section 6.4 INDEMNIFICATION OF TRUSTEES, OFFICERS, ETC. To the fullest
extent permitted by law, the Trust shall indemnify (from the assets of the
Sub-Trust or Sub-Trusts in question) each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise hereinafter referred to as a "Covered
Person") against all liabilities, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
expenses, including reasonable accountants' and counsel fees, incurred by any
Covered Person in connection with the defense or disposition of any action, suit
or other proceeding, whether civil or criminal, before any court or
administrative or legislative body, in which such Covered Person may be or may
have been involved as a party or otherwise or with which such person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Trustee or officer, director or trustee, except with respect
to any
<PAGE> 22
matter as to which it has been determined that such Covered Person had acted
with willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of such Covered Person's office (such conduct
referred to hereafter as "Disabling Conduct"). A determination that the Covered
Person is entitled to indemnification may be made by (i) a final decision on the
merits by a court or other body before whom the proceeding was brought that the
person to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a reasonable
determination, based upon a review of the facts, that the Covered Person was not
liable by reason of Disabling Conduct by (a) a vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as defined in section
2(a)(19) of the 1940 Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties), may be paid
from time to time from funds attributable to the Sub-Trust in question in
advance of the final disposition of any such action, suit or proceeding,
provided that the Covered Person shall have undertaken to repay the amounts so
paid to the Sub-Trust in question if it is ultimately determined that
indemnification of such expenses is not authorized under this Article VI and (i)
the Covered Person shall have provided security for such undertaking, (ii) the
Trust shall be insured against losses arising by reason of any lawful advances,
or (iii) a majority of a quorum of the disinterested Trustees who are not a
party to the proceeding, or an independent legal counsel in a written opinion,
shall have determined, based on a review of readily available facts (as opposed
to a full trial-type inquiry), that there is reason to believe that the Covered
Person ultimately will be found entitled to indemnification.

Section 6.5 COMPROMISE PAYMENT. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 6.4,
pursuant to a consent decree or otherwise, no such indemnification either for
said payment or for any other expenses shall be provided unless such
indemnification shall be approved (a) by a majority of the disinterested
Trustees who are not parties to the proceeding or (b) by an independent legal
counsel in a written opinion. Approval by the Trustees pursuant to clause (a) or
by independent legal counsel pursuant to clause (b) shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction to have been
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.

Section 6.6 INDEMNIFICATION NOT EXCLUSIVE, ETC. The right of
indemnification provided by this Article VI shall not be exclusive of or affect
any other rights to which any such Covered Person may be entitled. As used in
this Article VI, "Covered Person" shall include such person's heirs, executors
and administrators, an "interested Covered Person" is one against whom the
action, suit or other proceeding in question or another action, suit or other
proceeding on the same or similar grounds is then or has been pending or
threatened, and a "disinterested" person is a person against whom none of such
actions, suits or other proceedings or another action, suit or
<PAGE> 23
other proceeding on the same or similar grounds is then or has been pending or
threatened. Nothing contained in this Article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of any such person.

Section 6.7 LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No person
dealing with the Trustees shall be bound to make any inquiry concerning the
validity of any transaction made or to be made by the Trustees or to see to the
application of any payments made or property transferred to the Trust or upon
its order.

Section 6.8 DISCRETION. Whenever in this Declaration of Trust the
Trustees are permitted or required to make a decision (a) in their "sole
discretion," "sole and absolute discretion," "full discretion" or "discretion,"
or under a similar grant of authority or latitude, the Trustees shall be
entitled to consider only such interests and factors as they desire, whether
reasonable or unreasonable, and may consider their own interests, and shall have
no duty or obligation to give any consideration to any interests of or factors
affecting the Trust or the Shareholders, or (b) in their "good faith" or under
another express standard, the Trustees shall act under such express standard and
shall not be subject to any other or different standards imposed by this
Declaration of Trust or by law or any other agreement contemplated herein. Each
Shareholder and Trustee hereby agrees that any standard of care or duty imposed
in this Declaration of Trust or any other agreement contemplated herein or under
the Act or any other applicable law, rule or regulation shall be modified,
waived or limited in each case as required to permit the Trustees to act under
this Declaration of Trust or any other agreement contemplated herein and to make
any decision pursuant to the authority prescribed in this Declaration of Trust.

ARTICLE VII - MISCELLANEOUS

Section 7.1 DURATION AND TERMINATION OF TRUST. Unless terminated as
provided herein, the Trust shall continue without limitation of time and,
without limiting the generality of the foregoing, no change, alteration or
modification with respect to any Sub-Trust or class thereof shall operate to
terminate the Trust. The Trust may be terminated at any time by a majority of
the Trustees then in office subject to a favorable vote of a Majority of the
Outstanding Voting Shares of the Trust.

Upon termination, after paying or otherwise providing for all charges,
taxes, expenses and liabilities, whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall in accordance with such procedures
as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash, securities or other property, or any combination
thereof, and distribute the proceeds to the Shareholders, in conformity with the
provisions of subsection (d) of Section 4.2.
<PAGE> 24
Section 7.2 REORGANIZATION. The Trust, or any one or more Sub-Trusts,
may, either as the successor, survivor, or non-survivor, (1) consolidate or
merge with one or more other trusts, Sub-Trusts, partnerships, limited liability
companies, associations or corporations organized under the laws of the State of
Delaware or any other state of the United States, to form a consolidated or
merged trust, partnership, limited liability company, association or corporation
under the laws of which any one of the constituent entities is organized, with
the Trust in the case of a merger to be the survivor or non-survivor of such
merger, or (2) transfer a substantial portion of its assets to one or more other
trusts, Sub-Trusts, partnerships, limited liability companies, associations or
corporations organized under the laws of the State of Delaware or any other
state of the United States, or have one or more such trusts, Sub-Trusts,
partnerships, limited liability companies, associations or corporations merged
into or transfer a substantial portion of its assets to it, any such
consolidation, merger or transfer to be upon such terms and conditions as are
specified in an agreement and plan of reorganization authorized and approved by
the Trustees and entered into by the Trust, or one or more Sub-Trusts as the
case may be, in connection therewith. Any such consolidation, merger or transfer
shall require the affirmative vote of the holders of a Majority of the
Outstanding Voting Shares of the Trust (or each Sub-Trust affected thereby, as
the case may be), except that (a) such affirmative vote of the holders of Shares
shall not be required if the Trust (or Sub-Trust affected thereby, as the case
may be) shall be the survivor of such consolidation or merger or transferee of
such assets; (b) the Trustees may, without shareholder approval, cause the Trust
or any series of the Trust to invest any or all of its assets in securities
issued by a registered investment company or series thereof, subject to the
provisions of the 1940 Act; and (c) the Trustees may, without shareholder
approval, cause the Trust, or any series of the Trust, to transfer all or
substantially all of its assets and liabilities to another registered investment
company having substantially identical investment objectives and policies in
exchange for shares of such other investment company if, but only if, the Trust
or series, as the case may be, retains the shares of such other investment
company as an investment.

Section 7.3 AMENDMENTS. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation of the right to
amend this Declaration of Trust as herein provided, except that no amendment
shall repeal the limitations on personal liability of any Shareholder or Trustee
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved. Subject to the
foregoing, the provisions of this Declaration of Trust (whether or not related
to the rights of Shareholders) may be amended at any time, so long as such
amendment does not materially adversely affect the rights of any Shareholder
with respect to which such amendment is or purports to be applicable and so long
as such amendment is not in contravention of applicable law, including the 1940
Act, by an instrument in writing signed by a majority of the then Trustees (or
by an officer of the Trust pursuant to the vote of a majority of such Trustees).
Any amendment to this Declaration of Trust that materially adversely affects the
rights of Shareholders may be adopted at any time by an instrument in writing
signed by a majority of the then Trustees (or by an officer of the Trust
pursuant to a vote of a majority of such Trustees) when authorized to do so by
the vote in accordance with subsection (e) of Section 4.2 of Shareholders as
specified in Section 5.4 hereof. Subject to the foregoing, any such amendment
shall be effective as of any past or future time as
<PAGE> 25
provided in the instrument containing the terms of such amendment or, if there
is no provision therein with respect to effectiveness, upon the execution of
such instrument and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer of the Trust to the effect that such amendment
has been duly adopted.

Section 7.4 FILING OF COPIES; REFERENCES; HEADINGS. The original or a
copy of this instrument and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any Shareholder. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made, as to the identities of the Trustees and
officers, and as to any matters in connection with the Trust hereunder; and,
with the same effect as if it were the original, may rely on a copy certified by
an officer of the Trust to be a copy of this instrument or of any such
amendments. In this instrument and in any such amendment, references to this
instrument, and all expressions like "herein", "hereof" and "hereunder" shall be
deemed to refer to this instrument as a whole as the same may be amended or
affected by any such amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.

Section 7.5 APPLICABLE LAW. This Declaration of Trust is created under
and is to be governed by and construed and administered according to the laws of
the State of Delaware. The Trust shall be of the type referred to in Section
3801 of the Act and of the type commonly called a business trust, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a trust.

Section 7.6 REGISTERED AGENT. The Corporation Trust Company of 1209
Orange Street, City of Wilmington, County of New Castle, Delaware 19801 is
hereby designated as the initial registered agent for service of process on the
Trust in Delaware. The address of the registered office of the Trust in the
State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle, Delaware 19801.

Section 7.7 INTEGRATION. This Declaration of Trust constitutes the
entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements and understandings pertaining
thereto.

[END OF TEXT]
<PAGE> 26
IN WITNESS WHEREOF, the undersigned has hereunto set his hands and
seals for himself and his assigns, as of the day and year first above written.

Susan J. Lloyd-Hurwitz

<PAGE> 1
Exhibit 99.b

BY-LAWS
OF
LEND LEASE FUNDS
(A Delaware Business Trust)

ARTICLE 1

AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE

1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject
to the Master Trust Agreement, as from time to time in effect (the "Declaration
of Trust"), of Lend Lease Funds, the Delaware business trust established by the
Declaration of Trust (the "Trust").

1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust
shall be located at 207 East Buffalo Street, Suite 400, Milwaukee, WI 53202.

ARTICLE 2

MEETINGS OF TRUSTEES

2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places either within or without the State of
Delaware and at such times as the Trustees may from time to time determine,
provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees.

2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Board, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer of the Trust calling the meeting.

2.3 NOTICE. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
<PAGE> 2
2.4 QUORUM; ADJOURNMENT; VOTE REQUIRED FOR ACTION. At any meeting of
the Trustees a majority of the Trustees then in office shall constitute a
quorum. Any meeting may be adjourned from time to time by a majority of the
votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice. At the adjourned
meeting, the Trustees may transact any business which might have been transacted
at the original meeting. Except in cases where the Declaration of Trust or these
By-Laws otherwise provide, the vote of a majority of the Trustees present at a
meeting at which a quorum is present shall be the act of the Trustees.

2.5 PARTICIPATION BY TELEPHONE. One or more of the Trustees or of any
committee of the Trustees may participate in a meeting thereof by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall constitute presence in person at a meeting.

ARTICLE 3

OFFICERS

3.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
Chairman of the Board, a President, a Treasurer, a Secretary and such other
officers, including Vice Presidents, Assistant Treasurers and Assistant
Secretaries, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. The Chairman of the Board shall be a Trustee and
may but need not be a beneficial owner of the Trust (a "Shareholder"); and any
other officer may be but none need be a Trustee or Shareholder. Any two or more
offices may be held by the same person.

3.2 ELECTION. The Chairman of the Board, the President, the Treasurer,
and the Secretary shall be elected annually by the Trustees at a meeting held
within the first four months of the Trust's fiscal year. The meeting at which
the officers are elected shall be known as the annual meeting of Trustees. Other
officers, if any, may be elected or appointed by the Trustees at said meeting or
at any other time. Vacancies in any office may be filled at any time.

3.3 TENURE. The Chairman of the Board, the President, the Treasurer,
and the Secretary shall hold office until the next annual meeting of the
Trustees and until their respective successors are chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each other officer shall hold office and each agent shall retain
authority at the pleasure of the Trustees.

3.4 POWERS. Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as a
Delaware business corporation and such other duties and powers as the Trustees
may from time to time designate.

2
<PAGE> 3
3.5 Chairman; President. Unless the Trustees otherwise provide, the
Chairman of the Board, or, if there is none, or in the absence of the Chairman,
the President shall preside at all meetings of the shareholders and of the
Trustees.

3.6 Vice President. The Vice President, or if there be more than one
Vice President, the Vice Presidents in the order determined by the Trustees (or
if there be no such determination, then in the order of their election) shall in
the absence of the President or in the event of his or her inability or refusal
to act, perform the duties of the President, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the President. The
Vice Presidents shall perform such other duties and have such other powers as
the Trustees may from time to time prescribe.

3.7 Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the President.

3.8 Assistant Treasurer. The Assistant Treasurer, or if there shall be
more than one, the Assistant Treasurers in the order determined by the Trustees
(or if there be no such determination, then in the order of their election),
shall, in the absence of the Treasurer or in the event of his or her inability
or refusal to act, perform the duties and exercise the powers of the Treasurer
and shall perform such other duties and have such other powers as the Board of
Trustees may from time to time prescribe.

3.9 Secretary. The Secretary shall record all proceedings of the
Shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the Shareholders or Trustees, an assistant
secretary, or if there be none or if he or she is absent, a temporary secretary
chosen at such meeting shall record the proceedings thereof in the aforesaid
books.

3.10 Assistant Secretary. The Assistant Secretary, or if there be more
than one, the Assistant Secretaries in the order determined by the Trustees (or
if there be no determination, then in the order of their election), shall, in
the absence of the Secretary or in the event of his or her inability or refusal
to act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board of Trustees
may from time to time prescribe.

3.11 Resignations and Removals. Any Trustee or officer may resign at
any time by written instrument signed by him or her and delivered to the
Chairman, the President or the Secretary or to a meeting of the Trustees. Such
resignation shall be effective upon receipt unless specified to be effective at
some other time. The Trustees may remove any officer elected by them

3
<PAGE> 4
with or without cause. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee or officer resigning and no officer removed
shall have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.

ARTICLE 4

Committees

4.1 General. The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number an Executive Committee or other
committees and may delegate thereto some or all of their powers except those
which by law, by the Declaration of Trust, or by these By-Laws may not be
delegated. Except as the Trustees may otherwise determine, any such committee
may make rules for the conduct of its business, but unless otherwise provided by
the Trustees or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws for the Trustees
themselves. All members of such committees shall hold such offices at the
pleasure of the Trustees. The Trustees may abolish any such committee at any
time. Any committee to which the Trustees delegate any of their powers or duties
shall keep records of its meetings and shall report its action to the Trustees.
The Trustees shall have power to rescind any action of any committee, but no
such rescission shall have retroactive effect.

ARTICLE 5

Reports

5.1 General. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.

ARTICLE 6

Fiscal Year

6.1 General. The fiscal year of the Trust shall be fixed by resolution
of the Trustees.

ARTICLE 7

Seal

4
<PAGE> 5
7.1 General. The seal of the Trust shall consist of a flat-faced die
with the word "Delaware", together with the name of the Trust and the year of
its organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.

ARTICLE 8

Execution of Papers

8.1 General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust.

ARTICLE 9

Issuance of Share Certificates

9.1 Share Certificates. In lieu of issuing certificates for shares of
the Trust, the Trustees or the transfer agent may either issue receipts therefor
or may keep accounts upon the books of the Trust for the record holders of such
shares, who shall in either case be deemed, for all purposes hereunder, to be
the holders of certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.

The Trustees may at any time authorize the issuance of share
certificates either in limited cases or to all Shareholders. In that event, a
Shareholder may receive a certificate stating the number of shares owned by him
or her, in such form as shall be prescribed from time to time by the Trustees.
Such certificate shall be signed by the President or a Vice President and by the
Treasurer or Assistant Treasurer. Such signatures may be facsimiles if the
certificate is signed by a transfer agent, or by a registrar, other than a
Trustee, officer or employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate shall cease to be
such officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he were such officer at the time of its issue.

9.2 Loss of Certificates. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees shall prescribe. The Trust may
require the owner of the lost, destroyed or mutilated share certificate, or his
or her legal representative, to give the Trust a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
destruction or mutilation of any such certificate or the issuance of such new
certificate.

5
<PAGE> 6
9.3 Issuance of New Certificate to Pledgee. A pledgee of shares
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially describes the debt or duty that is intended
to be secured thereby. Such new certificate shall express on its face that it is
held as collateral security, and the name of the pledgor shall be stated
thereon, who alone shall be liable as a Shareholder, and entitled to vote
thereon.

9.4 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of share certificates and may, by written notice
to each Shareholder, require the surrender of shares certificates to the Trust
for cancellation. Such surrender and cancellation shall not affect the ownership
of shares in the Trust.

ARTICLE 10

Dealings with Trustees and Officers

10.1 General. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of shares of the Trust to the same extent as if he or
she were not a Trustee, officer or agent; and the Trustees may accept
subscriptions to shares or repurchase shares from any firm or company in which
any Trustee, officer or other agent of the Trust may have an interest.

ARTICLE 11

Amendments to the By-Laws

11.1 General. These By-Laws may be amended or repealed, in whole or in
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.

Adopted: October 28, 1999

6
<PAGE> 7
LEND LEASE FUNDS
MASTER TRUST AGREEMENT

OCTOBER 28, 1999

<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I - NAME AND DEFINITIONS................................................................................1
Section 1.1 Name and Principal Office..............................................................1
Section 1.2 Definitions............................................................................1
(a) "Act"..................................................................................1
(c) "By-Laws"..............................................................................2
(d) "class"................................................................................2
(e) "Commission"...........................................................................2
(f) "Declaration of Trust".................................................................2
(h) "Majority of the Outstanding Voting Shares"............................................2
(i) "1940 Act".............................................................................2
(j) "person"...............................................................................2
(k) "Shareholder"..........................................................................3
(l) "Shares"...............................................................................3
(m) "Sub-Trust" or "Series"................................................................3
(n) "Trust"................................................................................3
(o) "Trustees".............................................................................3

ARTICLE II - PURPOSE OF TRUST...................................................................................3

ARTICLE III - THE TRUSTEES......................................................................................3
Section 3.1 Number, Designation, Election, Term, etc...............................................3
(a) Trustees...............................................................................3
(b) Number.................................................................................3
(c) Election and Term......................................................................3
(d) Resignation and Retirement.............................................................4
(e) Removal................................................................................4
(f) Vacancies..............................................................................4
(g) Effect of Death, Resignation, etc......................................................4
(h) No Accounting..........................................................................4
Section 3.2 Powers of Trustees.....................................................................5
(a) Investments............................................................................6
(b) Disposition of Assets..................................................................6
(c) Ownership Powers.......................................................................6
(d) Subscription...........................................................................6
(e) Form of Holding........................................................................6
(f) Reorganization, etc....................................................................6
(g) Voting Trusts, etc.....................................................................7
(h) Compromise.............................................................................7
(i) Partnerships, etc......................................................................7
</TABLE>

(i)
<PAGE> 9
<TABLE>
<CAPTION>
<S> <C>
(j) Borrowing and Security.................................................................7
(k) Guarantees, etc........................................................................7
(l) Insurance..............................................................................7
(m) Pensions, etc..........................................................................7
(n) Distribution Plans.....................................................................8
Section 3.3 Certain Contracts......................................................................8
(a) Advisory...............................................................................8
(b) Administration.........................................................................8
(c) Distribution...........................................................................8
(d) Custodian and Depository...............................................................8
(e) Transfer and Dividend Disbursing Agency................................................9
(f) Shareholder Servicing..................................................................9
(g) Accounting.............................................................................9
Section 3.4 Payment of Trust Expenses and Compensation of Trustees................................10
Section 3.5 Ownership of Assets of the Trust......................................................10
Section 3.6 Action by Trustees....................................................................10

ARTICLE IV - SHARES............................................................................................10
Section 4.1 Description of Shares.................................................................10
Section 4.2 Establishment and Designation of Sub-Trusts and Classes...............................12
(a) Assets Belonging to Sub-Trusts........................................................12
(b) Liabilities Belonging to Sub-Trusts...................................................13
(c) Dividends.............................................................................13
(d) Liquidation...........................................................................14
(e) Voting................................................................................14
(f) Redemption by Shareholder.............................................................15
(g) Redemption by Trust...................................................................15
(h) Net Asset Value.......................................................................15
(i) Transfer..............................................................................16
(j) Equality..............................................................................16
(k) Fractions.............................................................................16
(l) Conversion Rights.....................................................................16
(m) Class Differences.....................................................................17
Section 4.3 Ownership of Shares...................................................................17
Section 4.4 Investments in the Trust..............................................................17
Section 4.5 No Pre-emptive Rights.................................................................17
Section 4.6 Status of Shares and Limitation of Personal Liability.................................17
Section 4.7 No Appraisal Rights...................................................................18

ARTICLE V - SHAREHOLDERS' VOTING POWERS AND MEETINGS...........................................................18
Section 5.1 Voting Powers.........................................................................18
Section 5.2 Meetings..............................................................................18
Section 5.3 Record Dates..........................................................................19
</TABLE>

(ii)
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C>
Section 5.4 Quorum and Required Vote..............................................................19
Section 5.5 Action by Written Consent.............................................................19
Section 5.6 Inspection of Records.................................................................19
Section 5.7 Additional Provisions.................................................................20

ARTICLE VI - LIMITATION OF LIABILITY; INDEMNIFICATION..........................................................20
Section 6.1 Trustees, Shareholders, etc. Not Personally Liable; Notice............................20
Section 6.2 Trustee's Good Faith Action; Expert Advice; No Bond or Surety.........................20
Section 6.3 Indemnification of Shareholders.......................................................21
Section 6.4 Indemnification of Trustees, Officers, etc............................................21
Section 6.5 Compromise Payment....................................................................22
Section 6.6 Indemnification Not Exclusive, etc....................................................22
Section 6.7 Liability of Third Persons Dealing with Trustees......................................23
Section 6.8 Discretion............................................................................23

ARTICLE VII - MISCELLANEOUS....................................................................................23
Section 7.1 Duration and Termination of Trust.....................................................23
Section 7.2 Reorganization........................................................................23
Section 7.3 Amendments............................................................................24
Section 7.4 Filing of Copies; References; Headings................................................25
Section 7.5 Applicable Law........................................................................25
Section 7.6 Registered Agent......................................................................25
Section 7.7 Integration...........................................................................25
</TABLE>

(iii)