LEND LEASE FUNDS, 485APOS, 2000-07-14

LEND LEASE FUNDS
485APOS, 2000-07-14

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<PAGE> 1
As filed with the Securities and Exchange Commission on July 14, 2000

Securities Act Registration No. 333-90085
Investment Company Act Registration No. 811-09679

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

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. [ ]
------

Post-Effective Amendment No. 1 [X]
------

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 2 [X]
------

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

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):

<PAGE> 2

[ ] IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B)
[ ] ON PURSUANT TO PARAGRAPH (B)
[ ] 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(1)
[X] 75 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A)(2)
[ ] ON PURSUANT TO PARAGRAPH (A)(2) OF RULE 485

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

[ ] THIS POST-EFFECTIVE AMENDMENT DESIGNATES A NEW EFFECTIVE DATE FOR
PREVIOUSLY FILED POST-EFFECTIVE AMENDMENT.

<PAGE> 3

LEND LEASE FUNDS

LEND LEASE EUROPEAN REAL ESTATE SECURITIES FUND

CLASS A SHARES

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

PROSPECTUS

, 2000
--------------

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> 4

TABLE OF CONTENTS

<TABLE>
Page
<S> <C>
KEY INFORMATION ABOUT THE FUND
INVESTMENT OBJECTIVE
PRINCIPAL INVESTMENT STRATEGIES
PRINCIPAL RISK FACTORS

FUND PERFORMANCE

FEES AND EXPENSES OF THE FUND
SHAREHOLDER FEES
FEES AND EXPENSES
EXAMPLE
OTHER INFORMATION REGARDING INVESTMENT PRACTICES

INVESTMENT MANAGEMENT
LEND LEASE REAL ESTATE INVESTMENTS AND LEND LEASE HOULIHAN ROVERS S.A
PORTFOLIO MANAGERS

BUYING, SELLING AND EXCHANGING SHARES
BEFORE YOU INVEST
HOW TO PURCHASE SHARES
DISTRIBUTION AND SERVICE FEES (12B-1 PLAN)
HOW TO SELL SHARES
HOW TO SELL SHARES
ADDITIONAL REDEMPTION PROVISIONS
TELEPHONE TRANSACTIONS
MAKING CHANGES TO YOUR ACCOUNT

SPECIAL FEATURES AND SERVICES
RETIREMENT ACCOUNT OPTIONS
ACH TRANSACTIONS
AUTOMATED TELEPHONE SERVICE
AUTOMATIC INVESTMENT PLAN (AIP)

OTHER SHAREHOLDER INFORMATION
SHAREHOLDER COMMUNICATIONS
TRANSACTIONS THROUGH FINANCIAL SERVICES AGENTS AND SUB-AGENTS

DIVIDENDS, DISTRIBUTIONS AND TAXES
DIVIDENDS AND DISTRIBUTIONS
TAXES

</TABLE>

(i)

<PAGE> 5

KEY INFORMATION ABOUT THE FUND

This Prospectus contains important information for anyone interested in
investing in Class A Shares of LEND LEASE EUROPEAN 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 European companies principally engaged in the real
estate industry.

- The Fund expects to focus on the countries that comprise the European
Union (the EU) which currently includes Austria, Belgium, Finland,
France, Germany, Ireland, Italy, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland, and the United Kingdom. The Fund may also
invest in the emerging markets of Europe including the Czech Republic,
Greece, Hungary, Turkey and Poland.

Lend Lease Houlihan Rovers S.A. ("Lend Lease Houlihan Rovers" or the
"Sub-Adviser") manages the Fund's day to day investment activity. The
Sub-Adviser takes a primarily bottom up approach to selecting securities for the
Fund's portfolio. It first measures each security under consideration for the
Fund according to various quantitative parameters, such as the company's cash
flow, market value, book value and earnings, relying primarily on proprietary
quantitative models and estimates of the value of company assets in the private
real estate market. The Sub-Adviser then considers its evaluation of other
relevant factors, such as the company's strategic objectives, the strength of
the company's management and the company's risk profile. After adjusting for
these factors, the Sub-Adviser then uses a security's parameters to rank it
against other securities in the Fund's investment universe. This ranking, which
is revised weekly, forms the basis for security selection. The Sub-Adviser also
evaluates market sentiment as a secondary consideration in making investment
decisions.

The Fund currently expects its investments to be primarily in companies
contained in the European portion (the "Europe Sub-Index") of the Salomon Smith
Barney World Equity Property Index. These companies include those with large,
medium and small equity market capitalizations with the majority having
capitalizations below $1 billion.

- The Europe Sub-Index is an unmanaged securities index designed to
measure the performance of publicly traded European real estate
companies. The composition of the Europe Sub-Index is determined by
Salomon Smith Barney Incorporated and includes real estate companies
representing a variety of property types. As of December 31, 1999, the
Europe Sub-Index included 104 securities with a total equity market
capitalization of approximately $84.4 billion.

Under normal circumstances, the Fund's portfolio turnover is not expected to
exceed 80% per year.

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 and investing in Europe. 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.

<PAGE> 6

- 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. The share prices
of stock issued by medium capitalization issuers will generally
fluctuate more than those of large capitalization issuers, and the
share price of small capitalization issuers will generally fluctuate
more than those of medium and large capitalization issuers. To the
extent the Fund invests in small and medium capitalization issuers,
the Fund's share price may be more volatile than if the Fund
restricted its portfolio to large capitalization issuers.

- 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.

- RISKS OF FOREIGN INVESTING. Investing in foreign securities involves
special risks and costs in addition to those inherent in U.S.
investments. Additional risks include foreign currency exchange rate
fluctuations; political, economic or social instability; the
possibility of expropriation, confiscatory taxation or withholding on
dividends and capital gains; limitations on the removal of assets;
adverse changes in investment or exchange control regulations;
unfavorable diplomatic developments; and trading, settlement,
custodial and other operational risks. In addition, foreign companies
are not generally subject to uniform accounting, auditing and
financial reporting standards and requirements like those applicable
to U.S. companies, and many foreign markets have less stringent
investor protection and disclosure standards than those in the U.S.
Because of these and other factors, the value of securities of foreign
companies acquired by the Fund may fluctuate more than those of
securities of domestic companies. To the extent the Fund invests in
emerging markets, these risks are magnified because emerging markets
tend to be subject to greater social, economic, regulatory and
political uncertainty. All of these factors can make foreign
investments, especially those in emerging markets, more volatile and
potentially less liquid than U.S. investments.

- RISKS OF INVESTING IN EUROPE. Most developed countries in Western
Europe are members of the EU. Many are also members of the European
Monetary Union (EMU) which is implementing a single European currency.
Membership in the EMU requires compliance with various restrictions on
inflation, national debt levels and deficits. Compliance with the
requirements for admission to the EU and EMU and for maintaining
membership in these organizations can significantly affect the subject
countries and the countries with which they have economic and business
ties.

- 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.

- 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

<PAGE> 7

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 1-877-LND-LEAS (1-877-563-5327).

FEES AND EXPENSES OF THE FUND

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

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT) CLASS A SHARES

<TABLE>
<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>

FEES AND EXPENSES
CLASS A SHARES

Annual Fund Operating Expenses (expenses that are deducted from Fund assets)
Management Fee**................................................................
Distribution and Service (12b-1) Fees...........................................
Other Expenses***...............................................................
Total Annual Fund Operating Expenses****........................................
Fee Waiver and/or Expense Reimbursement.........................................
Net Expenses

* 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.
** 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.
**** Lend Lease Real Estate Investments, Inc., the Fund's investment
adviser (the "Adviser"), and the Sub-Adviser have contractually agreed
to limit the Total Annual Fund Operating Expenses of Class A shares to
through January 31, 2002 subject to later reimbursement by the
Fund in certain circumstances. After January 31, 2002 the expense
limitation may renew for annual periods under certain conditions.

EXAMPLE

<PAGE> 8

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's
Class A shares would be:

1 YEAR 3 YEARS

Class A

OTHER INFORMATION REGARDING INVESTMENT PRACTICES

The Fund may invest in a variety of different types companies or issuers in the
real estate industry. These include real estate operating companies, companies
that invest in interests in real estate, real estate developers and brokers,
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 and financial institutions that derive the majority of their
income from real estate related activities.

COMPANIES PRINCIPALLY ENGAGED IN THE REAL ESTATE INDUSTRY. For purposes of its
investment policies, the Fund considers a company to be principally engaged in
the 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 commercial, industrial and
residential real estate.

EUROPEAN COMPANIES. The Fund considers the following types of companies to be
European companies:

- companies organized under the laws of a European country;
- companies with their principal offices located in a European country;
- companies whose stock is traded principally on European exchanges; and
- companies that earn 50% or more of their total business revenues from
Europe or have 50% or more of their assets in European countries.

EQUITY SECURITIES. The Fund's investments will be primarily in equity securities
which include common stock, preferred stock, partnership interests and other
instruments evidencing an ownership interest in the issuer as well as rights,
warrants and securities convertible into equity securities.

MANAGING MARKET AND CURRENCY EXPOSURE. The Fund may use various techniques, such
as buying and selling futures or forward currency contracts, to manage the
Fund's exposure to changing market prices or other conditions, such as currency
exchange rate fluctuations, that may affect the value of its holdings. If these
techniques do not work as expected, they could result in losses to the Fund.

RESTRICTED AND ILLIQUID SECURITIES. The Fund may purchase securities which are
illiquid or subject to restrictions on resale. Any security whose resale is
restricted can be difficult to sell at a desired time and price. Owning a large
percentage of illiquid or restricted securities could hamper the Fund's ability
to raise cash to meet redemptions. Also, in the absence of an established
securities market, the Fund may have to estimate the value of any illiquid and
restricted securities it holds which adds a subjective element to valuation of
the Fund.

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. Defensive investing may prevent the Fund from achieving
its investment objective.

<PAGE> 9

INVESTMENT MANAGEMENT

LEND LEASE REAL ESTATE INVESTMENTS AND LEND LEASE HOULIHAN ROVERS S.A.

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 subsidiary of Lend Lease Corporation Limited, an
integrated real estate funds management and services company listed on the
Australian and New Zealand stock exchanges.. 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 March
30, 2000, the Adviser managed approximately $35 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 Houlihan Rovers S.A. (the Sub-Adviser), Chaussee de la Hulpe 166,
1170 Brussels, Belgium, is responsible for the day to day management of the
Fund's investment program. Lend Lease Houlihan Rovers is a real estate
investment management company founded in February 2000 by Joseph Houlihan,
Gerios Rovers and the Adviser. The Adviser owns a controlling interest in the
Sub-Adviser. Lend Lease Houlihan Rovers is a research driven investment
management firm with a focus on managing assets principally on behalf of
institutional investors.

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

The Adviser and Sub-Adviser have contractually agreed to limit the total
operating expenses of the Fund's Class A shares to % of the average daily
net assets through January 31, 2002. After that date, the expense limitation
will renew for one year periods if certain conditions are met. With respect to
each waiver or reimbursement in connection with maintaining the expense
limitation, the Fund is obligated to repay 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

The Fund is managed by a portfolio management team that consists of W. Joseph
Houlihan and Gerios J.M. Rovers. They are responsible for the day to day
management of the Fund and the selection of the Fund's investments.

W. JOSEPH HOULIHAN is a Managing Director of the Sub-Adviser. In this capacity,
he shares responsibility with Mr. Rovers for oversight of all research and
investment activities and for developing client relationships. Prior to founding
the Sub-Adviser with Mr. Rovers and the Adviser in February 2000, Mr. Houlihan
spent 2 1/2 years at Security Capital Global Capital Management Group (Europe)
S.A. ("SC GCMG (Europe)") as Managing Director. SC GCMG (Europe) provided
European real estate securities management services to institutional investors
and a mutual fund. Prior to joining SC GCMG (Europe), Mr. Houlihan spent 18
years at GIM Algemeen Vermogensbeheer, a Dutch investment management company, as
Executive Vice President and Director. There he specialized in global negotiable
and non-negotiable real estate investments and developed GIM's real estate
securities investment process and client base. Prior to joining GIM, Mr.
Houlihan was a Vice President at John G. Wood and Associates, a diversified real
estate development and investment company, and with Chase Manhattan Bank's trust
department. Mr. Houlihan has over 20 years of experience in researching and
managing real estate securities. He received his M.B.A. from the University of
Leuven, Belgium and his B.S. from New York University. Mr. Houlihan is based in
Brussels, Belgium.

<PAGE> 10

he managed global real estate securities portfolios for domestic and foreign
clients. Mr. Rovers has over 10 years of experience in managing global real
estate securities. Mr. Rovers received his degree from the University of Tilburg
in the Netherlands. Mr. Rovers is based in Brussels, Belgium.

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 like Class A
shares, are subject to Distribution and Service Fees. Class Y shares are not
subject to Distribution and Service Fees, but do have higher investment
minimums. Call 1-877-LND-LEAS (1-877-563-5327) 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.

<PAGE> 11

<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
---------------------------------- ------------------------------------ ----------------------------------------
CLASS A CLASS A
Gifts to Minors (UTMA/UGMA) $10,000 $250
---------------------------------- ------------------------------------ ----------------------------------------
CLASS A CLASS A
Automatic Investment Plan $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 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.

To the extent that the Fund's assets are traded in other markets on days when
the NYSE is closed, the value of the Fund's assets may be affected on days when
the Fund is not open for business. In addition, trading in some of a Fund's
assets may not occur on days when the Fund is open for business.

The Fund's assets are valued primarily on the basis of market quotations.
Certain short-term securities are valued on the basis of amortized cost. If
market quotations are not readily available for a security or if a security's
value has been materially affected by events occurring after the close of the
exchange or market on which the security is principally traded (for example, a
foreign exchange or market), that security may be valued by another method that
the Fund's board of trustees believes accurately reflects fair value. A
security's valuation may differ depending on the method used for determining
value. 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>
----------------------------------------------- ------------------------------- ---------------------------------
SALES CHARGE (AS A % SALES CHARGE (AS A % OF
AMOUNT OF PURCHASE OF OFFERING PRICE) NET AMOUNT INVESTED)
----------------------------------------------- ------------------------------- ---------------------------------
<S> <C> <C>
Less than $100,000 5.75% 6.10%
----------------------------------------------- ------------------------------- ---------------------------------
$100,000 or more but less than $250,000 4.75% 4.99%
----------------------------------------------- ------------------------------- ---------------------------------
$250,000 or more but less than $500,000 3.75% 3.90%
----------------------------------------------- ------------------------------- ---------------------------------
$500,000 or more but less than $1,000,000 2.75% 2.83%
----------------------------------------------- ------------------------------- ---------------------------------
$1,000,000 and over None None
----------------------------------------------- ------------------------------- ---------------------------------
</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

<PAGE> 12

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 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.

<PAGE> 13

DISTRIBUTION AND SERVICE FEES (12B-1 PLAN)

The Fund has adopted a 12b-1 Plan for its Class A shares under which the Fund
may pay up to 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:

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

--------------------------------------------------------- ---------------------------------------------------------
MAIL YOUR APPLICATION AND CHECK TO: MAIL THE SLIP AND THE CHECK TO:
Lend Lease European Real Estate Securities Fund Lend Lease European Real Estate Securities Fund
P.O. Box 1192 P.O. Box 1192
Milwaukee, WI 53201-1192 Milwaukee, WI 53201-1192

--------------------------------------------------------- ---------------------------------------------------------
BY OVERNIGHT COURIER, SEND TO:
Lend Lease European 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 telephone. - You automatically have the privilege to purchase
additional shares by telephone unless you have
declined this service on your account application.
You may call 1-877-LND-LEAS (1-877-563-5327) to
purchase shares for an existing account.
</TABLE>

<PAGE> 14

<TABLE>
<S> <C>
Investments made by electronic funds transfer must be in
amounts of at least $250 and not greater than $20,000.

--------------------------------------------------------- ---------------------------------------------------------
BY WIRE: BY WIRE:
- To purchase shares by wire, the Fund must have Send your investment to Lend Lease U.S. Real Estate
received a completed application and issued an Securities Fund by following the instructions listed in
account number to you. Call the column to the left.
1-877-LND-LEAS(1-877-563-5327) for instructions
prior to wiring the funds.
- Send your investment to Lend Lease European Real Estate
Securities Fund with these instructions: UMB Bank, n.a.
ABA # 101000695
For Credit to Lend Lease Funds
A/C # 9870983966
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.

- 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

<PAGE> 15

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 10 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 European Real Estate Securities Fund
P.O. Box 1192
Milwaukee, WI 53201-1192

BY OVERNIGHT COURIER, SEND TO:

Lend Lease European Real Estate Securities Fund
207 E. Buffalo Street
Suite 315
Milwaukee, WI 53202

BY TELEPHONE:

- You automatically have the privilege to redeem shares by telephone unless
you have declined this option on your account application.
- Call 1-877-LND-LEAS (1-877-563-5327), 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.

<PAGE> 16

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 1-877-LND-LEAS (1-877-563-5327).

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.)

- 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.

<PAGE> 17

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 1-877-LND-LEAS
(1-877-563-5327) 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 1-877-LND-LEAS (1-877-563-5327) to determine what additional
documents are required.

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 1-877-LND-LEAS (1-877-563-5327).
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

<PAGE> 18

The Fund is also available for investment by other retirement plans. Please call
1-877-LND-LEAS (1-877-563-5327) 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 1-877-LND-LEAS (1-877-563-5327).

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 Fund's management team. To access the automated system, please call
1-877-LND-LEAS (1-877-563-5327).

AUTOMATIC INVESTMENT PLAN (AIP)

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 10 days before your next scheduled withdrawal date. To implement this
plan, please fill out the appropriate area of your application, or call
1-877-LND-LEAS (1-877-563-5327) for assistance.

OTHER SHAREHOLDER INFORMATION

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. If you consent to receive these
reports via electronic mail, you may obtain paper copies upon request and may
revoke your consent at any time.

<PAGE> 19

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.

DIVIDENDS, DISTRIBUTIONS AND TAXES

DIVIDENDS AND DISTRIBUTIONS

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 or long-term. 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.

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 through a tax-deferred retirement account
(such as an IRA), it is generally 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 may 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 1-877-LND-LEAS (1-877-563-5327).

<PAGE> 20

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.

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.
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 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.

<PAGE> 21

[LOGO]

LEND LEASE EUROPEAN REAL ESTATE SECURITIES FUND

TRUSTEES
Susan J. Lloyd-Hurwitz, Chairman
Hubbard R. Garber
William J. Klipp
Kevin Malone
Michael A. Torres

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
PricewaterhouseCoopers LLP
333 Market Street
San Francisco, CA 94105

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 1-877-LND-LEAS (1-877-563-5327)

By Mail: Write to: LEND LEASE FUNDS
P.O. Box 1192
Milwaukee, Wisconsin
53201-1192

By E-Mail:

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

<PAGE> 22

Information about the Fund (including the Statement of Additional Information)
can be reviewed and copied at the Commission's Public Reference Room in
Washington, D.C. Information on the operation of the Public Reference Room may
be obtained by calling the Commission at 1-202-942-8090. Reports and other
information about the Fund are available in the EDGAR Database on the SEC's
Internet site at http://www.sec.gov, and copies of this information may be
obtained, after paying a duplicating fee, by E-mail request to
[email protected], or by writing the SEC's Public Reference Section,
Washington, D.C. 20549-0102.

INVESTMENT COMPANY ACT REGISTRATION NUMBER 811-9679.

<PAGE> 23

LEND LEASE FUNDS
LEND LEASE EUROPEAN REAL ESTATE
SECURITIES FUND
CLASS K AND CLASS Y SHARES

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

PROSPECTUS

, 2000
-------

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> 24

TABLE OF CONTENTS
<TABLE>
<CAPTION>

Page
<S> <C>
KEY INFORMATION ABOUT THE FUND 1
Investment Objective 1
Principal Investment Strategies 1
Principal Risk Factors 3
FUND PERFORMANCE 5
FEES AND EXPENSES OF THE FUND 5
Shareholder Fees 5
Fees and Expenses 5
Example 6
OTHER INFORMATION REGARDING INVESTMENT PRACTICES 7
Companies Principally Engaged in the U.S. Real Estate Industry 7
Mortgage and Hybrid REITs 7
REOCs 8
Year 2000 8
Restricted Securities 8
Defensive Investing 9
Cash Position 9
INVESTMENT MANAGEMENT 10
Lend Lease Real Estate Investments and Lend Lease Rosen 10
Portfolio Managers 11
buying, selling and exchanging shares 13
Before You Invest 13
How to Purchase Shares 15
Additional Purchase Information 17
How to Sell Shares 18
Making Changes to Your Account 22
SPECIAL FEATURES AND SERVICES 23
Retirement Account Options 23
ACH Transactions 23
Automated Telephone Service 24
Automatic Investment Plan 24
OTHER SHAREHOLDER INFORMATION 25
Shareholder Communications 25
Transactions Through Financial Services Agents and Sub-Agent 26
Distribution and Service Fees - Class K Shares (12b-1 Plan) 26
DIVIDENDS, DISTRIBUTIONS AND TAXES 27
Dividends and Distributions 27
Taxes 28
</TABLE>

<PAGE> 25

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 EUROPEAN 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 European companies principally engaged in the real
estate industry.

- The Fund expects to focus on the countries that comprise the
European Union (the EU) which currently includes Austria, Belgium,
Finland, France, Germany, Ireland, Italy, the Netherlands, Norway,
Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The
Fund may also invest in the emerging markets of Europe including
the Czech Republic, Greece, Hungary, Turkey and Poland.

- The Europe Sub-Index is an unmanaged securities index designed to
measure the performance of publicly traded European real estate
companies. The composition of the Europe Sub-Index is determined
by Salomon Smith Barney Incorporated and includes real estate
companies representing a variety of property types. As of December
31, 1999, the Europe Sub-Index included 104 securities with a
total equity market capitalization of approximately $84.4 billion.

Under normal circumstances, the Fund's portfolio turnover is not expected to
exceed 80% per year.

PRINCIPAL RISK FACTORS

3
<PAGE> 26

entity or the FDIC. The Fund's share price will fluctuate, and it is possible to
lose money by investing in the Fund.

4
<PAGE> 27

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.

- 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,
call 1-877-LND-LEAS (1-877-563-5327).

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>
<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 deducted from Fund assets)
Management Fee*
Distribution and Service (12b-1) Fees
Other Expenses**
Total Annual Fund Operating Expenses***
Fee Waivers and/or Expense Reimbursement
Net Expenses
* Management Fee includes fees paid to Lend Lease Real Estate Investments,
Inc., the Fund's investment adviser ("Adviser") and the Sub-Adviser.
** Because the Fund is new, Other Expenses are based on estimated amounts for
the current fiscal year.
*** The Adviser and the Sub-Adviser have contractually agreed to limit the
Total Annual Fund Operating Expenses of Class K shares to through January
31, 2002, subject to later reimbursement by the Fund in certain
circumstances. After January 31, 2002, the expense limitation may renew for
annual periods under certain conditions.

CLASS Y SHARES

Annual Fund Operating Expenses (expenses deducted from Fund assets)
Management Fee*
Distribution and Service (12b-1) Fees None

<PAGE> 28

Other Expenses**
Total Annual Fund Operating Expenses***
Fee Waiver and/or Expense Reimbursement
Net Expenses
* 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.
*** The Adviser and the Sub-Adviser have contractually agreed to limit the
Total Annual Fund Operating Expenses of Class Y shares to .97% through
January 31, 2002, subject to later reimbursement by the Fund in certain
circumstances. After January 31, 2002, the expense limitation may renew for
annual periods under certain conditions.

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 K
Class Y

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

1 Year 3 Years

Class K
Class Y

OTHER INFORMATION REGARDING INVESTMENT PRACTICES

EUROPEAN COMPANIES. The Fund considers the following types of companies to be
European companies:

- companies organized under the laws of a European country;
- companies with their principal offices located in a European country;

6
<PAGE> 29

- companies whose stock is traded principally on European exchanges; and
- companies that earn 50% or more of their total business revenues from
Europe or have 50% or more of their assets in European countries.

INVESTMENT MANAGEMENT

LEND LEASE REAL ESTATE INVESTMENTS AND LEND LEASE HOULIHAN ROVERS S.A.

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

7
<PAGE> 30

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

GERIOS J.M. ROVERS is a Managing Director of the Sub-Adviser. In this capacity,
he shares responsibility with Mr. Houlihan for oversight of all research and
investment activities and for developing client relationships. Prior to founding
the Sub-Adviser with Mr. Houlihan and the Adviser in February 2000, Mr. Rovers
spent 21/2years as a Vice President at Security Capital Global Capital
Management Group (Europe) S.A. where he was responsible for the development and
implementation of portfolio strategies. Prior to joining Security Capital in
1997, Mr. Rovers was an Associate Director of GIM Algemeen Vermogensbeheer, a
Dutch investment management company, where he managed global real estate
securities portfolios for domestic and foreign clients. Mr. Rovers has over 10
years of experience in managing global real estate securities. Mr. Rovers
received his degree from the University of Tilburg in the Netherlands. Mr.
Rovers is based in Brussels, Belgium.

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 K and Class Y shares are discussed
in this prospectus. Class A shares are not currently offered. 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. If you buy Class K shares, you will not pay an up-front
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.

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

8
<PAGE> 31

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.

- IRA's 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.

Type of Account Initial Minimum Purchase Additional Minimum 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, Class K Class Y Class K Class Y
Roth and SEP) $1,000 $250,000 $250 $10,000

Gifts to Minors Class K Class Y Class K Class Y
(UTMA/UGMA) $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.

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 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

9
<PAGE> 32

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 Registered Investment
Adviser, 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. 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:

TO OPEN AN ACCOUNT

BY MAIL:

- Complete and sign the account application. If you do not complete the
application properly, your purchase may be delayed or rejected.

- Make your check payable to "Lend Lease Funds." The Fund does not accept
cash, third party checks, travelers checks or checks drawn on banks outside
the U.S.

Mail application and check to:

Lend Lease European Real Estate Securities Fund
P.O. Box 1192
Milwaukee, WI 53201-1192 By overnight courier, send to:
Lend Lease European Real Estate Securities Fund
207 E. Buffalo Street, Suite 315
Milwaukee, WI 53202

BY TELEPHONE

You may not make your initial purchase by telephone.

by wire

- To purchase shares by wire, the Fund must have received a completed
application and issued an account number to you. Call 1-877-LND-LEAS
(1-877-563-5327) for instructions prior to wiring the funds.

- Send your investment to Lend Lease European Real Estate Securities Fund
with these instructions.

UMB Bank, n.a.
ABA # 101000695
For Credit to Lend Lease Funds
A/C # 9870983966

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

TO ADD TO AN EXISTING ACCOUNT

BY MAIL:

<PAGE> 33

- Complete the investment slip that is included in your account statement,
and write your account number on your check.

- If you no longer have your investment slip, please reference your name,
account number and address on your check.

- Make your check payable to "Lend Lease Funds."

Mail the slip and the check to:

Lend Lease European Real Estate Securities Fund
P.O. Box 1192
Milwaukee, WI 53201-1192

BY TELEPHONE
- You automatically have the privilege to purchase additional shares by
telephone unless you have declined this service on your account
application. You may call 1-877-LND-LEAS (1-877-563-5327) to purchase
shares for an existing account.
- Investments made by electronic funds transfer must be in amounts of at
least $250 and not greater than $20,000.

By wire:

Send your investment to Lend Lease European Real Estate Securities Fund by
following the instructions listed above.

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.

<PAGE> 34

- 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 services 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

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:

By telephone:

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

- Call 1-877-LND-LEAS (1-877-563-5327), 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.

<PAGE> 35

- 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 1-877-LND-LEAS (1-877-563-5327).

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.)

- 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.

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.

<PAGE> 36

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 K 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 to 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 1-877-LND-LEAS
(1-877-563-5327) with any changes.

SPECIAL FEATURES AND SERVICES

retirement account options

14
<PAGE> 37

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
1-877-LND-LEAS (1-877-563-5327) for additional information.

ACH Transactions

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
1-877-LND-LEAS (1-877-563-5327).

Automatic Investment Plan (AIP)

To make regular investing more convenient, you can open an automatic investment
plan with an initial investment of $5,000 and a minimum investment of $250 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 10 days before your next scheduled withdrawal date. To implement this
plan, please fill out the appropriate area of your application, or call
1-877-LND-LEAS (1-877-563-5327) for assistance.

OTHER SHAREHOLDER INFORMATION

Shareholder Communications

<PAGE> 38

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. Prospectus. Each year, the
Fund sends all shareholders a new prospectus. Please read the prospectus and
keep it for future reference.

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 - Class K Shares
(12b-1 Plan)

The Fund has adopted a 12b-1 Plan for its Class K shares under which the Fund
may pay up to 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 an investment in Class K shares, and
over time, may cost an investor in Class K shares more than other types of sales
charges.

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 or long-term. 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.

<PAGE> 39

The Fund may also receive distributions of short-term, long-term and
unrecaptured Section 1250 capital gains from REITs. To the extent the Fund
receives such distributions, such capital gains (including 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
until 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 through a tax deferred retirement account
(such as an IRA), it generally 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 may 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 1-877-LND-LEAS (1-877-563-5327).

Taxes

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.

LEND LEASE EUROPEAN REAL ESTATE SECURITIES FUND

Trustees

Susan J. Lloyd-Hurwitz, Chairman
Hubbard R. Garber
William J. Klipp
Kevin Malone
Michael A. Torres

Fund Distributor
Sunstone Distribution Services, LLC
207 East Buffalo Street, Suite 400
Milwaukee, WI 53202

Transfer Agent

<PAGE> 40

Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 315
Milwaukee, WI 53202

Custodian
Wilmington Trust Company
1100 North Market Street, 9th Floor
Wilmington, DE 19890

Legal Counsel
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109

Independent Accountants
PricewaterhouseCoopers LLP
333 Market Street
San Francisco, CA 94105

For More Information

Call: 1-877-LND-LEAS (1-877-563-5327)

Or write to: Lend Lease Funds
P.O. Box 1192
Milwaukee, WI 5320-1192

By E-mail: on the Internet. Electronic copies are available on
our web site at http//www.

Investment Company Act Registration Number 811-9679.

<PAGE> 41
STATEMENT OF ADDITIONAL INFORMATION

FOR

LEND LEASE FUNDS

LEND LEASE EUROPEAN REAL ESTATE SECURITIES FUND

This Statement of Additional Information describes the Class A, Class K
and Class Y shares of Lend Lease European Real Estate Securities Fund (the
"Fund") and should be read in conjunction with the Prospectus dated ,
2000 describing the class in which you intend to invest. One Prospectus
describes the Fund's Class A shares; another describes the Fund's Class K and
Class Y shares. 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 , 2000.

<PAGE> 42

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page

<S> <C>
STATEMENT OF ADDITIONAL INFORMATION...............................................................................i
for...............................................................................................................i
LEND LEASE FUNDS..................................................................................................i
Lend Lease European Real Estate Securities Fund..........................................................i
TABLE OF CONTENTS.................................................................................................i
FUND ORGANIZATION.................................................................................................1
INVESTMENT POLICIES AND PRACTICES.................................................................................1
INVESTMENT RESTRICTIONS......................................................................................1
INVESTMENT STRATEGIES AND RISKS..............................................................................2
MANAGEMENT OF THE FUND...........................................................................................13
TRUSTEES AND OFFICERS.......................................................................................14
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.........................................................16
INVESTMENT MANAGEMENT AND OTHER SERVICES.........................................................................16
DISTRIBUTION OF SHARES...........................................................................................19
PORTFOLIO TRANSACTIONS AND BROKERAGE.............................................................................20
THE TRUST........................................................................................................22
TAXES............................................................................................................23
PURCHASE, REDEMPTION AND PRICING OF SHARES.......................................................................26
PERFORMANCE INFORMATION..........................................................................................28
MISCELLANEOUS....................................................................................................31
</TABLE>
----------------

i
<PAGE> 43
FUND ORGANIZATION

Lend Lease Funds is a non-diversified, open-end, management investment
company organized as a Delaware business trust on October 28, 1999 (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, the Lend Lease European 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 on 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. 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, except that the Fund will
invest more than 25% of its total assets in the real estate 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

<PAGE> 44

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).

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 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.

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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 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: 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

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<PAGE> 46

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.

Brokerage commissions, custodial services and other coasts relating to
investment in European countries are generally more expensive than in the U.S.
European securities markets also have different clearance and settlement
procedures, and in certain markets there have been times when settlements have
been unable to keep pace with the volume of securities transactions, making it
difficult to conduct such transactions. Delays in settlement could result in
temporary periods when assets of the Fund are uninvested and no return is earned
thereon. The inability of the Fund to make intended security purchases due to
settlement problems could cause the Fund to miss attractive investment
opportunities. Inability to dispose of portfolio securities due too settlement
problems could result either in losses to the Fund due to subsequent declines in
value of the portfolio security of, if the Fund has entered into a contract to
sell the security, could result in possible liability to the purchaser.

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.

EMERGING MARKETS. The economies of individual emerging market countries
may differ favorably or unfavorably from developed country economies of the U.S.
and Western Europe in terms of growth of gross domestic product, rate of
inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance of payments position. The economies of developing
countries generally are heavily dependent upon international trade and,
accordingly, have been, and may continue to be, adversely affected by trade
barriers, exchange controls, managed adjustments in relative currency values and
other protectionist measures. These economies also have been, and may continue
to be, adversely affected by economic conditions in the countries with which
they trade.

Prior governmental approval for foreign investments may be required
under certain circumstances in some emerging market countries, and the extent of
foreign investment in certain fixed income securities and domestic companies may
be subject to limitation in other emerging market countries. Foreign ownership
limitations also may be imposed by the charters of individual companies in
emerging market countries to prevent, among other concerns, violation of foreign
investment limitations. Repatriation of investment income, capital and the
proceeds of sales by foreign investors may require governmental registration
and/or approval in some

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<PAGE> 47

emerging countries. The Fund could be adversely affected by delays in, or a
refusal to grant, any required governmental registration of approval for such
repatriation. Any investment subject to such repatriation controls will be
considered illiquid if it appears reasonably likely that this process will take
more than seven days.

Investing in emerging market countries may entail purchasing securities
issued by or on behalf of entities that have little or no proven credit rating
or credit history. If such an issuer faces adverse financial conditions, the
Fund may be subject to increased likelihood of losses or diminution in available
gains due to bankruptcy, insolvency or fraud. Emerging market countries also
pose risk of nationalization, expropriation or confiscatory taxation, political
changes, government regulation, social instability or diplomatic developments
(including war) that could affect adversely the economies of such countries of
the value of the Fund's investments in those countries. In addition, it may be
difficult to obtain and enforce a judgment in a court outside the United States.

If the Fund invests in emerging markets, it may also be exposed to an
extra degree of custodial and/or market risk, especially where the securities
purchased are not traded on an official exchange or where ownership records
regarding the securities are maintained by an unregulated entity (or even the
issuer itself).

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 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

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<PAGE> 48

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.

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, 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.

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 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,

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<PAGE> 49

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.

DEPOSITORY RECEIPTS. The Fund may hold securities of foreign issuers in
the form of American Depository Receipts ("ADRs"), American Depository Shares
("ADSs"), Global Depository Receipts ("GDRs") and European Depository Receipts
("EDRs") or other securities convertible into securities of eligible issuers.
These securities may not necessarily be denominated in the same currency as the
securities for which they may be exchanged. ADRs and ADSs are typically issued
by an American bank or trust company that evidences ownership of underlying
securities issued by a foreign corporation. EDRs, which are sometimes referred
to as Continental Depository Receipts ("CDRs"), are receipts issued in Europe,
typically by foreign banks and trust companies that evidence ownership of either
foreign or domestic securities. Generally, ADRs and ADSs in registered form are
designed for use in U.S. securities markets and EDRs in bearer form are designed
for use in European securities markets. For purposes of the investment policies,
investment in ADRs, ADSs, GDRs and EDRs will be deemed to be an

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<PAGE> 50

investment in the equity securities representing securities of foreign issuers
into which they may be converted.

ADR facilities may be established as either "unsponsored" or
"sponsored." While ADRs issued under these two types of facilities are in some
respects similar, there are distinctions between them relating to the rights and
obligations of ADR holders and the practices of market participants. A
depository may establish an unsponsored facility without participation by (or
even necessarily the acquiescence of) the issuer of the deposited securities,
although typically the depository represents a letter of non-objection from such
issuer prior to the establishment of the facility. Holders of unsponsored ADRs
generally bear all the costs of such facilities. The depository usually charges
fees upon the deposit and withdrawal of the deposited securities, the conversion
of dividends into U.S. dollars, the disposition of non-cash distributions, and
the performance of other services. The depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited securities or to pass through voting
rights to ADR holders with respect to the deposited securities. Sponsored ADR
facilities are created in generally the same manner as unsponsored facilities,
except that the issuer of the deposited securities enters into a deposit
agreement with the depository. The deposit agreement sets out the rights and
responsibilities of the issuer, the depository and the ADR holders. With
sponsored facilities, the issuer of the deposited securities generally will bear
some of the costs relating to the facility (such as dividend payment fees of the
depository), although ADR holders continue to bear certain costs (such as
deposit and withdrawal fees). Under the terms of most sponsored arrangements,
depositories agree to distribute notices of shareholder meetings and voting
instructions, and to provide shareholder communications and other information to
the ADR holders at the request of the issuer of the deposited securities. The
Fund may invest in both sponsored and unsponsored ADRs.

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 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.

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<PAGE> 51

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 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

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<PAGE> 52

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. 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 currency, instrument or index). 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
currency at a future time) and which, therefore, possess the risks of both
futures and securities investments.

The Fund is not required to enter into hedging transactions and will
not do so unless deemed appropriate by the Sub-Adviser. Hedging transactions do
not eliminate fluctuation in the underlying prices of securities held by the
Fund. Additionally, although hedging transactions may tend to minimize the risk
of loss due to a decline in the value of the hedged Fund holding, at the same
time, they tend to limit any potential gain which might result from an increase
in the value of the aspect of holding that has been hedged.

FORWARD FOREIGN CURRENCY CONTRACTS. The Fund may enter into forward
foreign currency exchange contracts ("forward contracts") to attempt to offset
the risk to the Fund from adverse changes in the relationship between the U.S.
dollar and foreign currencies. A forward contract is an obligation to purchase
or sell a specified currency for an agreed price at a future date which is
individually negotiated and privately traded by currency traders and their
customers.

The Fund may hedge all or part of its foreign currency exposure through
the use of a basket of currencies or a proxy currency where such currency or
currencies act as an effective proxy for currencies the Fund intends to hedge.
In such a case, the Fund may enter into a forward contract where the amount of
the foreign currency to be sold exceeds the value of the securities denominated
in such currency. The use of this basket hedging technique may be more efficient
and economical than entering into separate forward contracts for each currency
held by

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<PAGE> 53

the Fund. The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible since the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. The projection of short-term currency
market movement is extremely difficult, and the successful execution of a
short-term hedging strategy is highly uncertain.

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 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

11
<PAGE> 54

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
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

12
<PAGE> 55

securities prices the same way. Imperfect correlation may also result from
differing levels of demand in the options and futures markets and the securities
or currency markets, from structural differences in how options and futures and
securities or currencies 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.

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, or in the case of
over-the-counter options with the dealer that issued the option. 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

13
<PAGE> 56

the year to oversee the Fund's activities, review its performance, and review
the actions of the Adviser and Sub-Adviser.

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. An asterisk appears next to the name of each Trustee
who is an interested person of the Fund as defined by the Investment Company
Act.
<TABLE>
<CAPTION>

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

Hubbard R. Garber Trustee Partner, Barrington Financial Group,
To be provided LLC, a consulting and research
firm (1996-present); Consultant,
Chestnut Partners, a consulting and
DOB: 3/13/59 investment banking firm (1995-1996).

William J. Klipp Trustee Private investor (2000-present);
To be provided President and Chief Operating
Officer, Charles Schwab Investment
DOB: 12/9/55 Management, Inc., an investment
advisory firm (1995-1999); Executive
Vice President, Schwab Funds(R)and
Charles Schwab & Co., Inc.
(1995-1999).

Kevin Malone Trustee President and Founder, Greenrock
To be provided Research, LLC (1996-present);
Portfolio Manager, Alliance Capital
DOB: 7/3/47 Management, an investment advisory
firm (1995-1996).

Michael A. Torres* Trustee, Vice President President and Co-President, Lend
1995 University Avenue Lease Rosen Real Estate Securities,
Suite 550 LLC, an investment advisory firm
Berkeley, CA 94704 (1998-present); ERE Rosen Real
DOB: 6/21/60 Estate Securities, LLC, an
investment advisory firm (1997-1998);
Director, AMB Rosen Real Estate
Securities LLC, an investment
advisory firm (1995-1997).
</TABLE>

14
<PAGE> 57

<TABLE>

<S> <C> <C>
Mark A. Hoopes Vice President, Assistant Treasurer Vice President, Lend Lease Real
1995 University Avenue Estate Investments, Inc.
Suite 550 (2000-present); Account Director;
Berkeley, CA 94704 Mutual Fund Services Division, SEI
DOB: 3/31/64 Investments, Inc. (1994-2000).

Jon P. Kiekhofer Treasurer Administration Services Manager
207 East Buffalo Street (1999-present), Senior Financial
Suite 400 Analyst (1995-1999), Financial
Milwaukee, WI 53202 Analyst (1994-1995) - Sunstone
DOB: 12/20/58 Financial Group, Inc.

Gage R. Johnson Secretary Principal (1999 to present), Senior
Monarch Tower Vice President - Legal Department
3424 Peachtree Road, N.E. (1999), Lend Lease Real Estate
Suite 800 Investments, Inc.; Of Counsel, Real
Atlanta, GA 30326 Estate Department - Paul, Hastings,
DOB: 11/28/61 Janofsky & Walker LLP (1994-1998).

Patricia K. Styles Assistant Secretary Blue Sky and Client Development
207 East Buffalo Street Manager (1999-present), Blue Sky
Suite 400 Supervisor (1996-1999), Senior
Milwaukee, WI 53202 Compliance Analyst (1995-1996),
DOB: 3/9/58 Compliance Analyst (1994-1995) -
Sunstone Financial Group, Inc.

</TABLE>

At various times beginning in 1997 and continuing through January 2000,
Barrington Financial Group, LLC, the consulting and investment advisory firm of
which Mr. Garber is a partner, provided the Adviser, Sub-Adviser and various of
their respective affiliates with advice regarding the development of collective
investment vehicles including the Trust. Barrington Financial Group's aggregate
fees for these services during the period were approximately $80,000 which was
not material to the business of Barrington Financial Group or the business of
the Adviser, the Sub-Adviser or their respective affiliates. Mr. Torres is a
Director of Manufactured Home Communities, Inc., a REIT primarily in the
business of owning, operating, leasing, developing, redeveloping and acquiring
manufactured home communities; the Fund does not intend to purchase securities
of Manufactured Home Communities, Inc. so long as Mr. Torres is a Director of
the company.

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 the sum of $500 per meeting attended, and will be reimbursed for
the expenses of attending meetings.
<TABLE>
<CAPTION>

COMPENSATION TABLE (A)
AGGREGATE COMPENSATION FROM TOTAL COMPENSATION FROM TRUST
NAME FUND PAID TO TRUSTEES
------------------------------------------------- ------------------------------- -------------------------------
<S> <C> <C>
Susan J. Lloyd-Hurwitz $ 0 $ 0
Hubbard R. Garber $ 2,000 $ 2,000
William J. Klipp $ 2,000 $ 2,000
Kevin Malone $ 2,000 $ 2,000
Michael A. Torres $ 0 $ 0
</TABLE>

15
<PAGE> 58

(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, 2001. 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.

Codes of Ethics. Rule 17j-1 under the Investment Company Act is designed to
prevent abuses that could occur as a result of conflicts of interest arising out
of personal trading by persons involved with or with access to information about
a fund's investment activities. The Trust and the Sub-Adviser have each adopted
detailed Codes of Ethics regarding personal investing by their personnel
pursuant to Rule 17j-1 under the Investment Company Act. The Adviser has adopted
a Code of Ethics that requires Adviser personnel who are "access persons" of any
fund within the meaning of Rule 17j-1 to comply with that fund's code of ethics
adopted pursuant to Rule 17j-1, subject to sanctions by the Adviser in the event
of non-compliance. The Trust's Code therefore applies to Adviser personnel who
are access persons under Rule 17-1 with respect to the Trust.

Each Code of Ethics places certain restrictions on the trading
activities of its access persons. The Trust's Code permits access persons to
purchase real estate related securities, but only subject to pre-clearance by
the Code's compliance officer. The Sub-Adviser's Code does not permit any
transaction in real estate related securities absent exceptional circumstances
and subject to pre-clearance by the Code's compliance officer. Each Code's
pre-clearance process is designed to prevent transactions that conflict with the
Fund's interests.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

As of , 2000, the Sub-Adviser owned all of the outstanding
shares of the Fund. As of , 2000, 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 , 2000. The Advisory
Agreement has an initial term of two years and thereafter is required to be
approved annually by the Board of

16
<PAGE> 59

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 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 and Sub-Adviser have contractually agreed, through January
31, 2002, to limit total annual operating expenses to the following percentages
of average daily net assets for each Class of shares of the Fund: Class A shares
( %), Class K shares ( %) and Class Y shares ( %), subject to later
reimbursement by the Fund in certain circumstances. After that date, the
limitations may be renewed for one year periods under certain conditions. See
"Investment Management" in the Prospectus for further information.

SUB-ADVISER. The sub-adviser to the Fund is Lend Lease Houlihan Rovers
S.A. (the "Sub-Adviser"). The Sub-Adviser was organized as a Belgium limited
liability company on February 11, 2000, and its principal place of business is
Chaussee de la Hulpe 166, 1170 Brussels, Belgium. 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 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 % of the Fund's average daily net
assets. The sub-advisory fee is accrued daily and paid monthly.

The Adviser owns a 80% interest in the Sub-Adviser. W. Joseph Houlihan
and Gerios Rovers, co-founders with the Adviser of Lend Lease Houlihan Rovers,
own an approximately 20% interest in the Sub-Adviser.

ADMINISTRATION AND FUND ACCOUNTING. Sunstone Financial Group, Inc., 207
East Buffalo Street, Suite 400, Milwaukee, Wisconsin 53202 ("Sunstone") has
entered into an agreement with the Fund to provide various administrative and
fund accounting services to the Fund (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
than those to be made by the Fund's Custodian); overseeing the Fund's fidelity
insurance relationships; participating in the

17
<PAGE> 60

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.

For the foregoing, Sunstone receives a fee on the value of the Fund
computed daily and payable monthly, at the annual rate of 0.17 percent of the
first $50 million of its average daily net assets, and decreasing as assets
reach certain levels, subject to an annual minimum fee of $68,750, 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 Sub-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 an agreement with the Trust, on behalf of the Fund,
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

18
<PAGE> 61

annual rate of 0.02% of the first $250 million of its average daily net assets
and decreasing as assets reach certain levels, subject to an annual minimum fee
of $25,000, 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 ACCOUNTANTS. PricewaterhouseCoopers LLP are the independent
accountants for the Fund. They are responsible for performing an audit of the
Fund's year-end financial statements as well as providing accounting and tax
advice to the management of the Fund.

DISTRIBUTION OF SHARES

The Fund has adopted Plans of Distribution (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 may make payments up 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") designed to result in the sale of, or the servicing
of shareholder accounts, holding shares of the class of Fund shares to which the
Plan applies. Some or all of the 12b-1 fee may be used to compensate brokers and
other authorized institutions ("Authorized Firms") for their efforts in selling
shares of that class and/or 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.

19
<PAGE> 62

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 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

20
<PAGE> 63

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 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

21
<PAGE> 64

affairs. The Fund represents a separate series of the Trust's shares of
beneficial interest. There is one other series currently, Lend Lease U.S. Real
Estate Securities Fund, and 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

22
<PAGE> 65

writing stating that they wish to communicate with other shareholders with a
view to obtaining 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.

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

23
<PAGE> 66

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 (or the rate for
unrecaptured Section 1250 capital gains, as applicable and designated by the
Fund), 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. 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 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.

24
<PAGE> 67

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.

FOREIGN TAXES. Income received by the Fund may give rise to withholding
and other taxes imposed by foreign countries. If more than 50% of the value of
the Fund's assets at the close of a taxable year consists of securities of
foreign corporations, the Fund may make an election that will permit its
shareholders to take a credit (or, if more advantageous, a deduction) for
foreign income taxes paid by the Fund, subject to limitations contained in the
Code. Shareholders would then include in gross income both dividends paid to
them by the Fund and the foreign taxes paid by the Fund on its foreign
investments. The Fund cannot assure shareholders that they will be eligible for
the foreign tax credit. The Fund will advise shareholders annually of their
share of any creditable foreign taxes paid by the Fund.

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. The foregoing discussion and the related discussion
in the prospectus have been prepared by management of the Trust and do not
purport to be a complete description of all tax implications of an investment in
the Fund. Shareholders are advised to consult with their own tax advisors
concerning the application of foreign, federal, state and local taxes to an
investment in the Fund. Goodwin, Procter & Hoar, LLP have expressed no opinion
in respect thereof.

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 average mean price. Options written
or purchased by

25
<PAGE> 68

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 will be 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 Trust's Board of Trustees.

Generally, trading in 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 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 13-month period a specified amount (minimum
of at least $100,000) 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
13-month period will be subtracted from the amount of the purchases for purposes
of determining whether the terms of

26
<PAGE> 69

the LOI have been satisfied. If, at the end of the 13-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 5% of the amount specified in the LOI will be held in
escrow during the 13-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.

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.
The Trust has filed an election on Form N-18F-1 with the SEC committing the Fund
to pay in cash all requests for redemption by any Fund shareholder of record,
limited in amount with respect to any such shareholder during any 90-day period,
to the lesser of (a) $250,000 or (b) 1 percent of the net asset value of the
Fund at the beginning of such period. This election is irrevocable while Rule
18f-1 under the Investment Company Act is in effect unless the SEC by order upon
application by the Trust permits the Trust to withdraw the election.

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.

27
<PAGE> 70

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 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

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<PAGE> 71

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:

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

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

29
<PAGE> 72

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.

The Fund's Annual Report which will be issued after the Fund has
completed its first fiscal year will contain additional performance information
and will be made available to investors upon request and without charge.

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.

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<PAGE> 73

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 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.

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<PAGE> 74
PART C
OTHER INFORMATION

ITEM 23. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
----------- -------
<S> <C>
(a-1) Master Trust Agreement of Lend Lease Funds dated October 28, 1999*

(a-2) Amendment No. 1 to Master Trust Agreement**

(b) Registrant's By-Laws*

(c) Sections 4.2(d), 4.2(e), 4.2(f), 4.2(j), 4.2(k), 4.2(m), 4.6, 4.7, 6.3, 6.6, 7.1, 7.2, and 7.3 and
Article V of the Master Trust Agreement are incorporated herein by reference.

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

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

(d-3) Expense Agreement among the Lend Lease Real Estate Investments, Inc., Lend Lease Rosen Real
Estate Securities LLC and the Registrant**

(e-1) Distribution Agreement between Lend Lease Funds and Sunstone Distribution Services, LLC**

(e-2) Form of Dealer Agreement**

(e-3) Inbound Call Management and Fulfillment Services Agreement

(f) None

(g) Custodian Agreement between The Wilmington Trust Company and Lend Lease Funds

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

(h-2) Transfer Agency Agreement between Lend Lease Funds and Sunstone Financial Group, Inc.

</TABLE>

<PAGE> 75

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

(j) Not applicable.

(k) None

(l) Initial Capital Agreement**

(m-1) Class A shares Plan of Distribution**

(m-2) Class K shares Plan of Distribution**

(m-3) Form of Shareholder Servicing Agreement**

(n) Rule 18f-3 Plan**

(o) Reserved.

(p-1) Registrant's Code of Ethics

(p-2) Code of Ethics of Lend Lease Rosen Real Estate Securities LLC

(p-3) Policy Regarding "Access Persons" of Registered Investement Companies of Lend Lease Real Estate Investments, Inc.

(p-4) The Registrant has not filed a code of ethics for its principal underwriter Sunstone Distribution Services,
LLC ("Sunstone Distribution") because Sunstone Distribution has no access persons as defined in Rule
17j-1 with respect to the Registrant and Sunstone Distribution falls within the exception provided in
Rule 17j-1(c)(3).

(q-1) Powers of Attorney

</TABLE>

*Incorporated by reference to the Registrant's Registration Statement on Form
N-1A (Securities Act File No. 333-90085, Investment Company Act File No.
811-09679) filed via EDGAR on November 1, 1999.

** Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form N-1A (Securities Act File No.
333-90085, Investment Company Act File No. 811-09679) filed via EDGAR on
February 16, 2000.

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

<PAGE> 76

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

The business and other connections of the Lend Lease Real Estate Investments,
Inc., Lend Lease Rosen Real Estate Securities LLC and Lend Lease Houlihan Rovers
S.A. are set forth in the Uniform Application for Investment Adviser
Registration ("Form ADV") of each of them as currently filed with the SEC, (SEC
File Number 801-24771 for Lend Lease Real Estate Investments, Inc., SEC File
number 801-48599 for Lend Lease Rosen Real Estate Securities

<PAGE> 77
LLC and SEC File number 801- for Lend Lease Houlihan Rovers S.A.) 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 Fund, JohnsonFamily
Funds, RREEF Securities Trust, e-Harmon 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 REGISTRANT
UNDERWRITER
---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
---------------------------------------- -------------------------------------- --------------------------------------
Miriam M. Allison President, Treasurer, Member 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> 78
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 7th day of July, 2000.

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>
Trustee; President; Principal July 7, 2000
Executive
/s/ Susan Lloyd-Hurwitz Officer
-----------------------
Susan Lloyd-Hurwitz
Financial and Accounting July 11, 2000
/s/ Jon Kiekhofer Officer
-----------------
Jon Kiekhofer
Trustee July 7, 2000
/s/Kevin Malone*
----------------
Kevin Malone
Trustee July 7, 2000
/s/ William J. Klipp*
---------------------
William J. Klipp
Trustee July 7, 2000
/s/Hubbard R. Garber*
---------------------
Hubbard R. Garber Trustee and Vice July 7, 2000
President
/s/ Michael Torres
------------------
Michael Torres
</TABLE>

- By: /s/ Susan Lloyd-Hurwitz
-----------------------
Susan Lloyd-Hurwtiz
Attorney in Fact