STEWART W P & CO LTD, F-1/A, 2000-11-21

STEWART W P & CO LTD
F-1/A, 2000-11-21
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 21, 2000

REGISTRATION NO.: 333-49420

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1 TO

FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

W.P. STEWART & CO., LTD.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------

NOT APPLICABLE
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)

<TABLE>
<S> <C> <C>
BERMUDA 523900 98-0201080
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
ORGANIZATION)
</TABLE>

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

TRINITY HALL
43 CEDAR AVENUE
P.O. BOX HM 2905
HAMILTON HM LX
BERMUDA
(441) 295-8585
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

W.P. STEWART & CO., INC.
527 MADISON AVENUE
NEW YORK, NEW YORK 10022-4212
(212) 750-8585
ATTENTION: LISA D. LEVEY, ESQ.
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

WITH COPIES TO:

<TABLE>
<S> <C>
JOHN B. WADE, III, ESQ. ANDREW D. SOUSSLOFF, ESQ.
DORSEY & WHITNEY LLP REBECCA J. SIMMONS, ESQ.
250 PARK AVENUE SULLIVAN & CROMWELL
NEW YORK, NEW YORK 10177 125 BROAD STREET
NEW YORK, NEW YORK 10004
</TABLE>

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

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ] -----

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] -----

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earliest effective
registration statement for the same offering. [ ] -----

If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act of 1933, please check the following box. [ ]

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

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

EXPLANATORY NOTE

This Registration Statement contains a Prospectus relating to a public
offering in the United States of an aggregate of 8,963,212 common shares of W.P.
Stewart & Co., Ltd. (the "United States Offering"). The complete Prospectus for
the United States Offering follows immediately.

A copy of the complete Prospectus for the United States Offering in the
exact form in which it is to be used after effectiveness will be filed with the
Securities and Exchange Commission pursuant to Rule 424(b) of the General Rules
and Regulations under the Securities Act of 1933, as amended.

<PAGE> 3

The information in this preliminary prospectus is not complete and may be
changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This
preliminary prospectus is not an offer to sell nor does it seek an offer
to buy these securities in any jurisdiction where the offer or sale is not
permitted.

Subject to Completion. Dated November 21, 2000.

11,204,015 Shares

W.P. STEWART & CO., LTD.

[BULL LOGO] Common Shares
----------------------

This is an initial public offering of common shares of W.P. Stewart & Co.,
Ltd. This prospectus relates to an offering of 8,963,212 common shares in the
United States. In addition, 2,240,803 common shares are being offered outside
the United States.

All of the common shares offered are being sold by the selling shareholders
identified in this prospectus. W.P. Stewart & Co., Ltd. will not receive any of
the proceeds from the sale of the common shares. After the offerings are
completed, the selling shareholders, current and former employees and directors
and other affiliates of W.P. Stewart & Co., Ltd. will own approximately 76% of
the issued common shares of W.P. Stewart & Co., Ltd.

Prior to the offerings, there has been no public market for the common
shares. It is currently estimated that the initial public offering price per
common share will be between $20.00 and $23.00. W.P. Stewart & Co., Ltd. intends
to list the common shares on the New York Stock Exchange under the symbol "WPL"
and on the Bermuda Stock Exchange under the symbol "WPS".

See "Risk Factors" beginning on page 7 to read about factors you should
consider before buying the common shares.
----------------------

NONE OF THE SECURITIES AND EXCHANGE COMMISSION, THE REGISTRAR OF COMPANIES
IN BERMUDA OR THE BERMUDA MONETARY AUTHORITY OR ANY OTHER REGULATORY BODY HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

THE BERMUDA STOCK EXCHANGE TAKES NO RESPONSIBILITY FOR THE CONTENTS OF THIS
DOCUMENT, MAKES NO REPRESENTATIONS AS TO ITS ACCURACY OR COMPLETENESS AND
EXPRESSLY DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM
OR IN RELIANCE UPON THE CONTENTS OF THIS DOCUMENT.
----------------------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Initial public offering price............................... $ $
Underwriting discount....................................... $ $
Proceeds, before expenses, to the selling shareholders...... $ $
</TABLE>

To the extent that the underwriters sell more than 8,963,212 common shares,
the underwriters have the option to purchase up to an additional 1,344,482
common shares from a selling shareholder, at the initial public offering price
less the underwriting discount. The international underwriters have a similar
option to purchase up to 336,120 additional common shares from a selling
shareholder.

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

The underwriters expect to deliver the common shares in New York, New York
on , 2000.
GOLDMAN, SACHS & CO. LAZARD

BEAR, STEARNS & CO. INC. SALOMON SMITH BARNEY

----------------------
Prospectus dated , 2000.
<PAGE> 4

PROSPECTUS SUMMARY

This summary is not a complete description of W.P. Stewart & Co., Ltd. or
the common shares. It does not contain all the information that may be important
to you. To understand this offering fully, you must read this entire prospectus
carefully, including the risk factors beginning on page 7. Unless otherwise
indicated, all information in this prospectus regarding the Stewart Group as of
any date or for any period has been provided on a combined/consolidated basis.

THE STEWART GROUP

The Stewart Group, which includes W.P. Stewart & Co., Ltd. and its
subsidiaries and predecessors, is an asset management company that has provided
research-intensive equity investment management services to clients throughout
the world since 1975. Headquartered in Hamilton, Bermuda and with additional
operations or affiliates in the United States, Europe and Asia, we managed $11.1
billion in assets as of October 31, 2000. Our client accounts are primarily for
high net-worth individuals and trusts, partnerships, private corporations and
other entities in which high net-worth individuals have a substantial interest,
as well as for institutions. Our client base is geographically diverse, with
22.3% of our assets under management from non-U.S. clients as of September 30,
2000.

Our investment management approach is to seek above-average long-term
investment returns, while accepting what we believe to be below-average risk. We
invest the capital entrusted to us in what we believe are some of the world's
finest growing businesses -- large enterprises that are leaders in their
respective fields and that operate businesses with relatively predictable
growth. We focus on a five year investment horizon and do not engage in market
timing. Our investment approach has realized a compound annualized return,
before fees, of 23.5% on funds under discretionary management from the inception
of our operations 25 years ago through September 30, 2000, as compared with a
return of 16.6% for the S&P 500 over the same period. Our compound annualized
returns for the five and ten years ended September 30, 2000, before fees, were
22.8% and 21.0%, respectively, as compared to 21.7% and 19.4%, respectively, for
the S&P 500 during the same periods. Our compound annualized returns for the
five and ten years ended September 30, 2000, after fees, were 21.5% and 19.7%,
respectively. Our year-to-date return through October 31, 2000, before fees, was
4.5% as compared to a negative return of 1.8% for the S&P 500 during the same
period. Our year-to-date return through October 31, 2000, after fees, was 3.4%.
See "Business -- Historical Performance Record".

Our culture emphasizes teamwork, reinforced by profit sharing and equity
ownership among all employees. After the offerings, individuals who are our
current or former employees or directors and affiliates of us and such
individuals will own approximately 76% of our outstanding common shares.

We believe that our focused investment approach consistently applied,
together with our compensation policy and stock ownership practice, aligns the
interests of all of our employees with the interests of our clients and
shareholders. This has contributed to close and enduring relationships with our
clients and our record of significant growth in assets under management.

PROPOSED ACQUISITION

We have agreed in principle to acquire the 50% of TPRS Services N.V. that
we do not already own and 75% of TPR & Partners N.V. We believe that this
acquisition will increase our access to a broader European clientele and enhance
our asset-gathering capability in Europe. We also believe that it will
strengthen our ongoing relationship with the principals of TPR & Partners N.V.,
who have been responsible for introducing to us approximately $982 million of
our assets under management as of September 30, 2000. These principals are
shareholders of W.P.

1
<PAGE> 5

Stewart & Co., Ltd., as a result of our 1999 acquisition of 50% of TPRS Services
N.V., and they will receive additional shares in the contemplated acquisition.

For additional information about this acquisition, see "Corporate
History -- Global Expansion".

W.P. Stewart & Co., Ltd.'s principal executive offices are located at
Trinity Hall, 43 Cedar Avenue, Hamilton HM 12, Bermuda, telephone number: (441)
295-8585.

2
<PAGE> 6

THE OFFERINGS

COMMON SHARES OFFERED:

U.S. Offering............... 8,963,212 common shares

International Offering...... 2,240,803 common shares

Total.................... 11,204,015 common shares

Common Shares Outstanding
after the Offerings........... 47,319,618 common shares

Proposed New York Stock
Exchange Symbol............. WPL

Proposed Bermuda Stock
Exchange Symbol............. WPS

Dividend Policy............... We intend to establish a policy after the
offerings of declaring quarterly dividends on
the common shares, commencing in the fourth
quarter of 2000. We expect that the amount of
those dividends will be approximately 60% of
earnings, initially at the rate of
approximately $0.30 per common share ($1.20
annually). See "Description of Capital
Stock -- Dividends".

Limitations on Voting
Rights........................ Our bye-laws establish two separate limitations
on the voting rights of most shareholders.

Under our bye-laws, no natural person may
exercise more than 5% of the votes on all our
common shares or any other capital stock we may
issue in the future. Similarly, no other entity
or group may exercise more than 9.5% of the
votes on all our common shares or any other
capital stock.

These limits do not apply to:

- WPS II, Inc.;

- Other shareholders or groups of
shareholders that held common shares
immediately before the offerings; or

- Any other shareholder or group of
shareholders designated by our board of
directors.

Our bye-laws also contain a separate limitation
that would prevent any shareholder or group of
shareholders from exercising more than 20% of
the votes on all our common shares (or any
other capital stock), even if the limitation
described above does not apply. The 20% limit
does not apply to:

- WPS II, Inc. or its affiliates;

- Our subsidiaries;
3
<PAGE> 7

- Our employee benefit plans; or

- Any other shareholder or group of
shareholders designated by our board of
directors.

For a more detailed description of these voting
restrictions, see "Description of Capital
Stock -- Voting Rights".

4
<PAGE> 8

SUMMARY FINANCIAL AND UNAUDITED OTHER DATA
The following table sets forth summary financial and unaudited other data
for the Stewart Group for the periods and as of the dates indicated. The data
set forth below are presented on a consolidated or a combined/consolidated
basis.

The summary income statement and balance sheet data as of and for the years
ended December 31, 1999, 1998 and 1997 below were derived from our audited
financial statements and the summary income statement and balance sheet data as
of and for the nine month period ended September 30, 2000 below were derived
from our consolidated unaudited financial statements. You should read the
summary financial and other data set forth below in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations", the combined/consolidated audited and consolidated unaudited
financial statements and related notes of the Stewart Group included elsewhere
in this prospectus. Our operating results for the nine month period ended
September 30, 2000 are not necessarily indicative of the results that may be
expected for the entire year ending December 31, 2000. Our audited and unaudited
financial statements were prepared and presented in accordance with accounting
principles generally accepted in the United States of America, commonly known as
U.S. GAAP.

<TABLE>
<CAPTION>
AS OF, AND FOR THE
NINE MONTH PERIOD AS OF, AND FOR THE YEAR
ENDED, SEPTEMBER 30, ENDED, DECEMBER 31,(1)
-------------------- --------------------------------
2000 1999 1998 1997
---- ---- ---- ----
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Fees............................................. $113,210 $153,307 $121,043 $ 88,580
Commissions...................................... 33,494 35,511 27,574 20,379
Interest and Other............................... 4,798 4,501 3,662 1,719
-------- -------- -------- --------
151,502 193,319 152,279 110,678
-------- -------- -------- --------
Expenses:
Employee Compensation and Benefits............... 28,635 37,385 29,718(2) 34,446
Marketing Fees................................... 7,999 13,916 11,480 6,572
Commissions, Clearance and Trading............... 6,850 7,973 7,743 5,816
Research and Administration...................... 11,083 16,111 11,195 9,468
Depreciation and Amortization.................... 5,514 3,918 493 553
Other Operating.................................. 10,842 10,851 10,430 4,300
-------- -------- -------- --------
70,923 90,154 71,059 61,155
-------- -------- -------- --------
Income Before Taxes................................ 80,579 103,165 81,220 49,523
Provision for Taxes(3)............................. 8,008 8,410 8,654 3,854
-------- -------- -------- --------
Net Income......................................... $ 72,571 $ 94,755 $ 72,566 $ 45,669
======== ======== ======== ========
Earnings Per Share(4):
Basic Earnings Per Share......................... $ 1.74 $ 2.37 $ 1.89 $ 1.26
======== ======== ======== ========
Diluted Earnings Per Share....................... $ 1.61 $ 2.21 $ 1.80 $ 1.23
======== ======== ======== ========
BALANCE SHEET DATA:
Total Assets....................................... $ 96,318 $ 72,721 $ 43,345 $ 18,507
Total Liabilities.................................. $ 40,460 $ 33,820 $ 26,266 $ 2,890
Shareholders' Equity............................... $ 55,858 $ 38,901 $ 17,079 $ 15,617

OTHER DATA (unaudited): (IN MILLIONS, EXCEPT PER SHARE DATA)
Long-Term Debt..................................... $ 18.2 $ 18.6 $ 16.9 --
Cash Dividends Per Share........................... $ 1.51 $ 1.94 $ 1.72 $ 1.08
Assets Under Management............................ $ 10,768 $ 12,255 $ 11,157 $ 8,562
</TABLE>

---------------
(1) Capital Managers Limited, a Bermuda company, was merged into W.P. Stewart &
Co., Ltd. on October 30, 1998. Capital Managers Limited, which was
incorporated in August 1996, was the owner of 100% of the outstanding
capital stock of W.P. Stewart Securities Limited, a Bermuda-based
broker-dealer, beginning on July 1, 1997. Capital Managers Limited acquired
effective control of W.P. Stewart Asset Management Ltd., a Bermuda-based
investment advisory subsidiary, on December 30, 1996. Accordingly, W.P.
Stewart Asset Management Ltd. has been consolidated with Capital Managers
Limited for financial statement purposes. See "Corporate History".

(2) In 1998, the percentage of operating profit allocated to compensation was
reduced as part of a generational transition by which the founding partners
reduced their participation and increased participation was given to the
next generation of managers. This transition involved retirements,
reassignments, reallocation of compensation and an increase in equity
participation in our company. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations".

(3) Prior to June 30, 1998, our U.S. predecessor company operated as an S
Corporation under the provisions of the Internal Revenue Code and,
accordingly, was not subject to U.S. federal income tax; however, it was
subject to certain state and local income taxes. For information regarding
our U.S. predecessor company, see "Corporate History".

(4) Common shares purchased by our employees are subject to vesting. For
treatment of non-vested common shares see Note 4 of "Notes to the
Combined/Consolidated Financial Statements".

5
<PAGE> 9

SUMMARY CONSOLIDATED PRO FORMA FINANCIAL DATA

The following table sets forth certain consolidated pro forma financial
data for the Stewart Group. The consolidated pro forma financial data set forth
below reflect the effects, as of January 1, 1999 for purposes of the income
statement, and as of September 30, 2000 for purposes of the balance sheet, of
the acquisition of 50% of TPRS Services N.V. and 75% of TPR & Partners N.V. as
described under "Corporate History -- Global Expansion", the issuance of
1,144,000 common shares in connection with that acquisition and the issuance of
30,500 common shares in connection with employee stock purchases.

The summary consolidated pro forma financial data set forth below does not
purport to be complete and should be read in conjunction with "Selected
Financial and Unaudited Other Data", "Consolidated Pro Forma Financial Data",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and related notes of the
Stewart Group included elsewhere in this prospectus.

<TABLE>
<CAPTION>
AS OF, AND FOR THE NINE MONTH PERIOD FOR THE YEAR ENDED
ENDED, SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------------------------ ------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Fees................................... $113,847 $153,732
Commissions............................ 33,494 35,511
Interest and Other..................... 4,911 4,598
-------- --------
152,252 193,841
-------- --------
Expenses:
Employee Compensation and Benefits..... 29,265 37,990
Marketing Fees......................... 4,903 10,935
Commissions, Clearance and Trading..... 6,739 7,838
Research and Administration............ 11,345 16,340
Depreciation and Amortization.......... 5,891 4,421
Other Operating........................ 10,924 11,022
Minority Interest...................... 167 169
-------- --------
69,234 88,715
-------- --------
Income Before Taxes...................... 83,018 105,126
Provision for Taxes...................... 8,337 8,743
-------- --------
Net Income............................... $ 74,681 $ 96,383
======== ========
Earnings Per Share:
Basic Earnings Per Share: ............. $ 1.76 $ 2.38
======== ========
Diluted Earnings Per Share: ........... $ 1.61 $ 2.19
======== ========
BALANCE SHEET DATA:
Total Assets............................. $104,696
Total Liabilities........................ $ 41,893
--------
Shareholders' Equity..................... $ 62,803
========
</TABLE>

6
<PAGE> 10

RISK FACTORS

VOLATILITY IN THE SECURITIES MARKETS COULD RESULT IN A DECREASE IN THE MARKET
VALUE OF OUR ASSETS UNDER MANAGEMENT WHICH, IN TURN, WOULD RESULT IN A DECREASE
IN THE MANAGEMENT FEES WE ARE ABLE TO EARN ON THOSE ASSETS.

The securities markets are highly volatile, and securities prices may
increase or decrease for many reasons, including economic, financial or
political events, which we cannot control. These events could result in a
decrease in the overall value or amount of assets that we manage and on which we
earn our fees.

We earn almost all of our revenues from asset management contracts with
clients. Under these contracts, clients pay us an asset management fee equal to
a percentage of the market value of the assets we manage. As a result, if
securities prices fluctuate, the market value of the assets may fluctuate, and
our revenues and profitability may fluctuate as well. All other factors being
equal, if securities prices fall, the value of our client's portfolios, and our
revenues, would fall as well.

If securities prices fall, securities may become less attractive
investments as compared to other investments. Clients have the right to remove
their assets from our management at any time, and may be more likely to do so
when securities prices decrease. In that case, the amount of assets we manage
may also decrease, and our revenues would fall as well.

THE ABILITY OF ALL OF OUR CLIENTS TO TERMINATE THEIR ASSET MANAGEMENT CONTRACTS
WITH US AT WILL MAKES OUR FUTURE CLIENT AND REVENUE BASE UNPREDICTABLE.

Our clients have the right to terminate their asset management contracts
with us at any time without paying any penalty. We cannot, therefore, be certain
that we will continue to receive the fees that the client agreed to pay in its
asset management contract with us, particularly if the client decides that a
competitor's services or fees are more attractive. In addition, if clients
terminate agreements covering a significant portion of the assets we manage,
this would result in a significant loss in our revenues which would adversely
affect our financial condition.

THE MARKET FOR QUALIFIED PERSONNEL IS HIGHLY COMPETITIVE. IF WE ARE UNABLE TO
CONTINUE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL WE WILL BE UNABLE TO
ADEQUATELY SERVE OUR CLIENT BASE.

Our asset management approach depends on the expertise of our personnel and
their ability to work together as an effective team. Our business depends on our
ability to attract and retain highly skilled asset management, investment
advisory, research and administrative professionals. Competition for employees
with the necessary qualifications is intense, especially for asset management
and research professionals. If we are unable to attract and retain these
professionals, we will be unable to continue to provide a consistent level of
service to our clients. A failure to adequately serve our clients could result
in clients withdrawing their assets from our management and could also affect
our ability to attract new clients.

Our core investment management team currently consists of managers who have
been with us for an average of more than seven years. If a substantial number of
these managers were to leave the Stewart Group within a short period of time, it
would be difficult to replace them without disrupting our business. A disruption
in our business could also cause us to lose clients.

Two of our former portfolio managers recently announced their intention to
leave the Stewart Group on amicable terms to pursue other interests, as
described under "Business -- Investment Management Team". Although similar
departures have not resulted in a material loss of assets under management, we
cannot be certain that the departure of these two former portfolio managers will
not have a negative impact on our assets under management.

7
<PAGE> 11

OUR U.S. TAX STATUS COULD BE CHALLENGED. IF U.S. FEDERAL, STATE OR LOCAL TAXING
AUTHORITIES SUCCESSFULLY CHALLENGE OUR ASSESSMENT OF HOW MUCH OF OUR NET INCOME
WAS DERIVED FROM ACTIVITIES IN THE UNITED STATES, WE COULD BE FORCED TO PAY
SIGNIFICANT ADDITIONAL TAXES.

The Internal Revenue Service or IRS, as it is commonly known, and/or other
U.S. taxing authorities may assert that the Stewart Group has significantly
understated its taxable income and impose tax on the understatement. The U.S.
income tax we have paid and expect to pay is as follows:

- W.P. Stewart & Co., Inc., our New York-based research subsidiary, pays
U.S. income tax on its taxable income, consisting of fees received from
W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. for
sub-advisory and research services less applicable expenses;

- W.P. Stewart Asset Management (NA), Inc. pays U.S. income tax on its
taxable solicitation fee income on a consolidated federal basis with its
wholly-owned subsidiary, W.P. Stewart Asset Management (NA) (Portland),
Inc.; and

- W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. paid in
1998 and 1999 U.S. income tax on the approximately 5%, and expect to pay
in 2000 U.S. income tax on the approximately 10%, of their earnings (as
computed under U.S. GAAP) which are, or are expected to be, derived from
activities directly carried on in the United States.

We continue, however, to take the position, which we think is supported
under existing authority, that no U.S. income tax will be imposed on any
additional income of the Stewart Group for 1998, 1999 and 2000. In particular,
no portion of the income of W.P. Stewart Securities Limited, W.P. Stewart & Co.
(Europe), Ltd., NS Money Management Ltd. or TPRS Services N.V. should be subject
to U.S. income tax. As a consequence, the overall effective tax rate on our
earnings was 10.7% for 1998 and 8.2% for 1999. We believe that the overall tax
rate will not exceed 10% for 2000 and intend to file tax returns on that basis.
The overall effective tax rate on our earnings in future years using a similar
methodology will vary in accordance with the relative nature and extent of our
activities in the United States and in foreign countries.

The IRS, New York State and/or New York City may disagree with our
positions and assert that (i) the fees paid to W.P. Stewart & Co., Inc. (which
are 50 basis points annually calculated on the assets in accounts for which W.P.
Stewart & Co., Inc. provides subadvisory services and $1.2 million annually for
research relating to other accounts) or W.P. Stewart Asset Management (NA), Inc.
and its subsidiaries understate their taxable incomes and/or (ii) the net income
of W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. from business
that they carry on directly in the United States represents more than the amount
reported by W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. Any
additional net income attributed to W.P. Stewart & Co., Inc., to W.P. Stewart
Asset Management (NA), Inc. and its subsidiaries or to the directly-conducted
U.S. business of W.P. Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd.
would be subject to U.S. taxes, at rates that are currently up to 62.62%.

COMPETITION IN OUR INDUSTRY IS INTENSE. THIS COMPETITION MAKES CLIENT RETENTION
DIFFICULT AND OUR REVENUE BASE UNCERTAIN.

The asset management business is highly competitive. Our ability to compete
is based on a number of factors, including:

- investment performance;

- business reputation;

- continuity of client relationships and of assets under management; and

- the level of fees charged for services.

8
<PAGE> 12

We currently compete with a large number of other asset management firms,
as well as broker-dealers, commercial banks, investment banks, insurance
companies and other financial institutions. Because the cost of entering the
asset management business is relatively low, entities may easily be formed which
may also compete with us. If we are not able to compete successfully against
current and future competitors, current clients may withdraw their assets from
our management, and we may be unable to attract a sufficient number of new
clients to maintain or improve our revenue base and net income.

WE ARE SUBJECT TO THE CONTROL OF MANY REGULATORY BODIES. THESE REGULATORS HAVE
THE POWER TO RESTRICT OR LIMIT OUR BUSINESS ACTIVITIES, TO CAUSE US TO CHANGE
THE MANNER IN WHICH WE CONDUCT OUR BUSINESSES AND TO LEVY SUBSTANTIAL PENALTIES
OR FINES ON US.

The asset management industry is subject to regulation in most of the
jurisdictions in which we do business. Our Bermuda companies are subject to the
Investment Business Act 1998 of Bermuda, but by virtue of their regulation in
other jurisdictions and/or the nature of their clients, they are exempt from the
requirement to hold a license under that Act. W.P. Stewart & Co., Ltd. and W.P.
Stewart & Co., Inc. are registered as investment advisers with the U.S.
Securities and Exchange Commission or SEC, as it is commonly known, and various
state regulatory agencies. W.P. Stewart Securities Limited, our Bermuda-based
broker-dealer, is registered with the SEC and various state regulatory agencies
as a broker-dealer. In addition, W.P. Stewart Securities Limited is regulated by
the National Association of Securities Dealers, Inc. W.P. Stewart & Co.
(Europe), Ltd. is regulated by the Investment Management Regulatory Organisation
Limited or IMRO, as it is commonly known, and W.P. Stewart Fund Management
Limited, our Dublin-based fund management company, is regulated by the Central
Bank of Ireland. TPR & Partners N.V., our Amsterdam-based asset gatherer, is
regulated by the Netherlands Securities Board.

These regulatory regimes are designed to protect clients and other third
parties who deal with us and our subsidiaries and to ensure the integrity of the
financial markets. They are not designed to protect our shareholders.

These regulations often limit our activities, through requirements relating
to customer protection, market conduct and net capital. We also face the risk of
significant intervention by regulatory authorities, including extended
investigation and surveillance activity, adoption of costly or restrictive new
regulations and judicial or administrative proceedings that may result in
substantial penalties to us. Among other things, if we were found to have
violated a significant regulatory requirement, we could be fined or enjoined
from engaging in certain business activities, and the registration of certain
members of the Stewart Group as investment advisers, broker-dealers or fund
managers could be terminated. If new regulations are adopted, these consequences
could be more significant.

AS A SHAREHOLDER OF A BERMUDA COMPANY YOU MAY, IN SOME INSTANCES, HAVE FEWER
RIGHTS AND PROTECTIONS THAN YOU WOULD HAVE AS A SHAREHOLDER OF A U.S. COMPANY.

W.P. Stewart & Co., Ltd. is incorporated in Bermuda and its corporate
affairs are governed by its memorandum of association, by its bye-laws and by
Bermuda law. Under Bermuda law, shareholders have fewer rights than they might
have as shareholders of a corporation incorporated in a U.S. jurisdiction, and
these rights are less well-defined. It is also more difficult in some respects
for investors to protect their interests in connection with actions by the
management, board of directors or controlling shareholders of a company. For a
description of some of the rights that you will have as a shareholder of W.P.
Stewart & Co., Ltd., see "Description of Capital Stock".

The United States and Bermuda also do not have a treaty requiring Bermuda
courts to recognize and enforce U.S. court judgments in civil or criminal
matters. It is not clear that a Bermuda court would enforce a United States
court judgment based solely on the U.S. federal securities laws.

9
<PAGE> 13

WE ARE AND WILL CONTINUE TO BE CONTROLLED BY AFFILIATED SHAREHOLDERS. FOLLOWING
THE OFFERINGS, AFFILIATED SHAREHOLDERS WILL STILL HAVE THE ABILITY -- WITHOUT
YOUR INPUT OR CONSENT -- TO CONTROL ALL DECISIONS SUBMITTED TO SHAREHOLDERS
REGARDING OUR MANAGEMENT AND AFFAIRS.

After the offerings are completed, individuals who are our current or
former employees or directors and affiliates of us and such individuals will own
approximately 76% of the common shares. All shareholders of WPS II, Inc. are
current or former employees of the Stewart Group, members of their families or
trusts for members of their families. Furthermore, our current shareholders will
not be subject to the voting limitations described below. WPS II, Inc. and these
affiliated individuals will therefore have the power (without the consent of our
other shareholders) to elect the entire board of directors and, as a result, to
control the management and policies of the Stewart Group, including making all
decisions about mergers, acquisitions, sales, borrowings, issuances and
redemptions of our securities and declaration of dividends on the common shares.
They will also be able to decide all other matters submitted to our shareholders
for approval, including amendments to our memorandum of association and bye-
laws.

OUR BYE-LAWS RESTRICT SHAREHOLDERS' VOTING RIGHTS. YOU MAY NOT BE ABLE TO VOTE
ALL OF THE COMMON SHARES THAT YOU OWN.

Our bye-laws limit the voting power of natural persons to 5% of all votes
attributable to our outstanding capital stock (including the common shares) and
the voting power of other entities, "groups" (as defined in the Securities
Exchange Act of 1934) and persons other than natural persons to 9.5% of the
votes attributable to our outstanding capital stock. These limitations apply
regardless of how many common shares are actually owned or controlled by a
shareholder. These restrictions, however, will not apply to:

- WPS II, Inc.;

- Other shareholders or groups of shareholders who were shareholders of
W.P. Stewart & Co., Ltd. immediately before the offerings; and

- Additional persons, entities or groups that are designated by our board
of directors either before or after the offerings.

The votes that could have been cast by shareholders who are subject to these
voting restrictions will be allocated to the other shareholders pro rata based
on the number of shares they hold. However, no shareholder subject to these
restrictions may be allocated more than 5% (for natural persons) or 9.5% (for
legal persons, entities or groups) of the total voting power. This voting
limitation was put in place to reduce the likelihood that we will become a
controlled foreign corporation for U.S. tax purposes. See "Certain Income Tax
Consequences -- United States -- Controlled Foreign Corporation Rules" for a
discussion of the tax consequences associated with our becoming a controlled
foreign corporation.

Our bye-laws also limit the overall voting power of all persons, entities
or groups to 20% of the total number of all votes attributable to our
outstanding capital stock (including the common shares). These limitations apply
regardless of how many common shares are actually owned or controlled by a
shareholder and regardless of whether the voting restrictions described in the
previous paragraph apply to that shareholder. These restrictions, however, will
not apply to:

- WPS II, Inc. or its affiliates;

- Direct or indirect subsidiaries of W.P. Stewart & Co., Ltd.;

- New or existing employee benefit plans of W.P. Stewart & Co., Ltd., as
may be designated by our board of directors either before or after the
offerings; and

10
<PAGE> 14

- Other persons, entities or groups that are designated by our board of
directors either before or after the offerings.

This voting limitation was put in place to reduce the likelihood of inadvertent
terminations of our advisory agreements as a result of "assignments" of such
contracts.

These voting limitations and reallocation provisions in our bye-laws make
it difficult or impossible for any person, entity or group to acquire control of
us unless our board of directors, WPS II, Inc. and the other affiliated
shareholders discussed above agree. These provisions may also make it difficult
to remove incumbent directors of the Stewart Group and may limit the price that
investors will be willing to pay in the future for common shares.

A CHANGE OF CONTROL OF THE STEWART GROUP WOULD AUTOMATICALLY TERMINATE OUR
CLIENTS' INVESTMENT ADVISORY AGREEMENTS WITH US UNLESS THE CLIENT ELECTS NOT TO
TERMINATE AND COULD PREVENT US FOR A TWO YEAR PERIOD FROM INCREASING THE
INVESTMENT ADVISORY FEES WE ARE ABLE TO CHARGE OUR CLIENTS.

Under the Investment Advisers Act of 1940, as amended or the Advisers Act,
as it is commonly known, a client's investment management agreement will
terminate unless the client elects otherwise if the agreement is "assigned" by
the investment adviser without the client's consent. An advisory agreement is
considered to be assigned to another party when a "controlling block" of the
adviser's voting securities is transferred. In our case, an assignment of the
Stewart Group's asset management contracts may occur if, among other things, we
sell or issue a certain number of additional common shares after the offerings.
We cannot be certain that our clients will consent to the assignment of
investment advisory agreements or approve new agreements with the Stewart Group
if a change of control occurs.

While the limitation in our bye-laws prohibiting any person or group from
voting more than 20% of the total number of shares of W.P. Stewart & Co., Ltd.'s
capital stock was put in place to reduce the likelihood of inadvertent
terminations of our advisory agreements as a result of "assignments" of such
contracts, there can be no guarantee that this voting limitation will prevent
such a termination from occurring.

Under the Investment Company Act of 1940, as amended, or the Investment
Company Act, as it is commonly known, a party that acquires control of an
investment company may not impose an "unfair burden" on that company for a
two-year period after a change of control. The term "unfair burden" has been
interpreted to include certain increases in investment advisory fees. This
restriction, along with the difficulty of obtaining a controlling voting
interest in the Stewart Group described above, may discourage potential
purchasers from acquiring a controlling interest in W.P. Stewart & Co., Ltd.

FUTURE SALES OF CURRENTLY RESTRICTED COMMON SHARES COULD CAUSE THE MARKET PRICE
FOR THE COMMON SHARES TO DECLINE. IF TOO MANY SHAREHOLDERS WHO ARE CURRENTLY
RESTRICTED FROM SELLING THEIR COMMON SHARES DECIDE TO SELL THESE SHARES ONCE THE
RESTRICTIONS ARE LIFTED, THE MARKET PRICE OF YOUR COMMON SHARES COULD BE
ADVERSELY AFFECTED.

Upon completion of the offerings, there will be 47,319,618 common shares
issued and outstanding. Of these shares, the 11,204,015 common shares expected
to be sold in the offerings will be freely transferable without restriction or
further registration under the Securities Act of 1933, as amended or the
Securities Act, as it is commonly known, except for shares purchased by our
"affiliates", as that term is defined in Rule 144 under the Securities Act.

It is expected that a total of 17,715,715 common shares, including the
shares sold in the offerings, will be available for sale following the
offerings. Approximately 35,937,500 of the outstanding common shares, 6,150,944
of which would otherwise be available for sale following the offerings, will be
owned by individuals and entities who have signed agreements that

11
<PAGE> 15

generally provide that the shares cannot be sold for 540 days after the
offerings without the consent of the representatives of the underwriters. The
representatives of the underwriters may release all or any portion of the common
shares subject to these lock-up agreements at any time in their sole discretion.
After the 540-day lock-up period expires, the holders of these common shares
will be able to resell their shares, subject to the requirements of the
Securities Act. WPS II, Inc. has additionally agreed to retain at least
7,000,000 common shares for the longer of three years or until the expiration of
its indemnity obligation relating to tax liabilities resulting from the merger
with our U.S. predecessor. See "Certain Relationships and Related Transactions".

Sales of substantial numbers of common shares, or the possibility of such
sales, pursuant to Rule 144 under the Securities Act or otherwise, may adversely
affect the market price of the common shares and make it more difficult for us
to raise capital by issuing equity securities.

THERE HAS BEEN NO PRIOR PUBLIC MARKET FOR THE COMMON SHARES. YOU CANNOT BE SURE
THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE COMMON SHARES.

Before the offerings, there has been no public market for the common
shares. We will apply to list the common shares on the New York and Bermuda
Stock Exchanges, but we cannot be sure that an active trading market will
develop or be sustained after the offerings or that you will be able to sell the
common shares when you want to. The Stewart Group, the selling shareholders and
representatives of the underwriters will negotiate to decide the initial public
offering price of the common shares. Because there has been no prior public
market for the common shares, we cannot be sure that the offering price will
correspond to the price at which the common shares will trade in the public
market after the offerings. See "Underwriting".

THE MARKET PRICE OF THE COMMON SHARES WILL FLUCTUATE. THERE IS NO GUARANTEE THAT
YOU WILL IN THE FUTURE BE ABLE TO SELL COMMON SHARES FOR A PRICE WHICH IS AS
HIGH AS OR HIGHER THAN THE OFFERING PRICE.

The market price for the common shares may be volatile and may fluctuate
based upon a number of factors including, but not limited to:

- our operating results;

- changes in financial estimates by securities analysts for the Stewart
Group and/or its competitors;

- conditions or trends in the asset management industry;

- adoption of new accounting standards affecting the investment advisory
business;

- news announcements; or

- changes in general economic and market conditions.

In addition, the stock market in recent years and months has experienced
extreme price and volume fluctuations that often have been unrelated or
disproportionate to the operating performance of companies. These fluctuations
may materially affect the market price of the common shares.

12
<PAGE> 16

FORWARD-LOOKING STATEMENTS

Certain statements in this prospectus are forward-looking statements,
including, without limitation, statements concerning our assumptions,
expectations, beliefs, intentions, plans or strategies regarding the future.
Such forward-looking statements are based on beliefs of our management as well
as on estimates and assumptions made by and information currently available to
our management. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements, or industry results, to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the risk factors
set forth in this prospectus as well as the following:

- general economic and business conditions;

- industry capacity and trends;

- competition;

- the loss of major clients;

- changes in demand for our services;

- changes in business strategy or development plans;

- changes in the laws and/or regulatory circumstances in the United States,
Bermuda, the United Kingdom, Ireland or other jurisdictions;

- quality of management;

- actions taken or omitted to be taken by third parties including our
shareholders, clients, competitors, legislative, regulatory, judicial and
governmental authorities; and

- availability, terms and deployment of capital.

Should one or more of these risks or uncertainties materialize, or should
the underlying assumptions prove incorrect, actual results may vary
significantly from those anticipated, believed, estimated, expected, intended or
planned. We do not intend to review or revise any particular forward-looking
statements made in this prospectus in light of future events. You are cautioned
not to put undue reliance on any forward-looking statements.

13
<PAGE> 17

CAPITALIZATION

The following table sets forth our consolidated capitalization as of
September 30, 2000:

- on a historical basis;

- on a pro forma basis after giving effect to the acquisition of 50%
of TPRS Services N.V. and 75% of TPR & Partners N.V. as described
under "Corporate History -- Global Expansion" and the issuance of
1,144,000 common shares in connection with that acquisition; and

- the issuance of 30,500 common shares in connection with employee
stock purchases.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 2000
----------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
----------------------------------
(UNAUDITED)
HISTORICAL PRO FORMA
----------- ----------
<S> <C> <C>
Current Portion of Long-Term Debt................. $ 542 $ 542
Long-Term Debt.................................... 18,235 18,235
Shareholders' Equity
Common Shares (125,000,000 shares authorized,
47,291,118 shares issued and outstanding,
48,465,618 pro forma shares)................. 47 48
Contingently Returnable Shares.................. (21,046) (28,995)
Additional Paid-in-Capital...................... 84,066 99,357
Accumulated Other Comprehensive Income.......... (246) (246)
Retained Earnings............................... 15,004 15,004
Shareholders' Notes Receivable.................. (21,968) (22,365)
-------- --------
Total Shareholders' Equity.............. 55,857 62,803
======== ========
Total Capitalization.............................. $ 74,634 $ 81,580
======== ========
</TABLE>

14
<PAGE> 18

DIVIDEND POLICY

We intend to establish a policy after the offerings of declaring quarterly
dividends on the common shares, commencing in the fourth quarter of 2000. We
expect that the amount of those dividends will be determined as approximately
60% of earnings, initially at the rate of approximately $0.30 per common share
($1.20 annually). The declaration and payment of dividends to holders of common
shares will be in the discretion of our board of directors and will depend on
our capital requirements, operating and financial condition, and business plans
at the time, as well as legal restrictions derived from Bermuda law and
regulatory restrictions derived from net capital rules of various regulatory
bodies applicable to the Stewart Group and such other factors as the board of
directors may deem relevant. See "Description of Capital Stock -- Dividends".

15
<PAGE> 19

SELECTED FINANCIAL AND UNAUDITED OTHER DATA

The following table sets forth selected financial and unaudited other data
for the Stewart Group for the periods and as of the dates indicated. The data
set forth below are presented on a consolidated or a combined/consolidated
basis.

The income statement and balance sheet data set forth below as of and for
the years ended December 31, 1999, 1998, 1997 and 1996 are derived from our
audited financial statements. The income statement and balance sheet data set
forth below as of and for the nine month periods ended September 30, 2000 and
1999 are derived from our consolidated unaudited financial statements. You
should read the financial data set forth below in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations", the
combined/consolidated audited and consolidated unaudited financial statements
and related notes of the Stewart Group included elsewhere in this prospectus.
Our operating results for the nine month period ended September 30, 2000 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 2000. The income statement and balance sheet data set forth
below as of and for the year ended December 31, 1995 represent the financial
results of our U.S. predecessor company only. See "Corporate History".

<TABLE>
<CAPTION>
AS OF, AND FOR
THE NINE MONTH
PERIOD ENDED,
SEPTEMBER 30, AS OF, AND FOR THE YEAR ENDED, DECEMBER 31,(1)
------------------- --------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Fees........................................... $113,210 $116,988 $153,307 $121,043 $ 88,580 $61,622 $45,906
Commissions.................................... 33,494 27,858 35,511 27,574 20,379 15,941 13,812
Interest and Other............................. 4,798 3,663 4,501 3,662 1,719 1,423 1,045
-------- -------- -------- -------- -------- ------- -------
151,502 148,509 193,319 152,279 110,678 78,986 60,763
-------- -------- -------- -------- -------- ------- -------
Expenses:
Employee Compensation and Benefits............. 28,635 29,487 37,385 29,718(2) 34,446 25,746 19,264
Marketing Fees................................. 7,999 10,341 13,916 11,480 6,572 3,848 2,237
Commissions, Clearance and Trading............. 6,850 6,377 7,973 7,743 5,816 5,340 4,753
Research and Administration.................... 11,083 8,859 16,111 11,195 9,468 6,726 5,40 0
Depreciation and Amortization.................. 5,514 2,564 3,918 493 553 160 148
Other Operating................................ 10,842 11,463 10,851 10,431 4,300 2,190 1,588
-------- -------- -------- -------- -------- ------- -------
70,923 69,091 90,154 71,059 61,155 44,010 33,390
-------- -------- -------- -------- -------- ------- -------
Income Before Taxes.............................. 80,579 79,418 103,166 81,220 49,523 34,976 27,373
Provision for Taxes(3)........................... 8,008 9,564 8,410 8,654 3,854 3,210 2,864
-------- -------- -------- -------- -------- ------- -------
Net Income....................................... $ 72,571 $ 69,854 $ 94,755 $ 72,566 $ 45,669 $31,766 $24,509
======== ======== ======== ======== ======== ======= =======
Earnings Per Share(4):
Basic Earnings Per Share....................... $ 1.74 $ 1.75 $ 2.37 $ 1.89 $ 1.26 $ 1.11 $ 1.03
======== ======== ======== ======== ======== ======= =======
Diluted Earnings Per Share..................... $ 1.61 $ 1.62 $ 2.21 $ 1.80 $ 1.23 $ 1.06 $ 0.97
======== ======== ======== ======== ======== ======= =======
BALANCE SHEET DATA:
Total Assets..................................... $ 96,318 $ 77,562 $ 72,721 $ 43,345 $ 18,507 $10,958 $ 9,517
Total Liabilities................................ $ 40,460 $ 44,135 $ 33,820 $ 26,266 $ 2,890 $ 4,033 $ 4,860
Shareholders' Equity............................. $ 55,858 $ 33,427 $ 38,901 $ 17,079 $ 15,617 $ 6,925 $ 4,657

OTHER DATA (unaudited): (IN MILLIONS, EXCEPT PER SHARE DATA)
Long-Term Debt................................... $ 18.2 $ 18.8 $ 18.6 $ 16.9 -- -- --
Cash Dividends Per Share......................... $ 1.51 $ 1.40 $ 1.94 $ 1.72 $ 1.08 $ 1.09 $ 0.91
Assets Under Management.......................... $ 10,768 $ 11,285 $ 12,255 $ 11,157 $ 8,562 $ 6,396 $ 4,559
</TABLE>

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

(1) Beginning in 1996, the results of operations of Capital Managers Limited are
included in our results of operations. Capital Managers Limited, a Bermuda
company, was merged into W.P. Stewart & Co., Ltd. on October 30, 1998.
Capital Managers Limited, which was incorporated in August 1996, was the
owner of 100% of the outstanding capital stock of W.P. Stewart Securities
Limited, a Bermuda-based broker-dealer, beginning on July 1, 1997. Capital
Managers Limited acquired effective control of W.P. Stewart Asset Management
Ltd., a Bermuda-based investment advisory subsidiary, on December 30, 1996.
Accordingly, W.P. Stewart Asset Management Ltd. has been consolidated with
Capital Managers Limited for financial statement purposes. See "Corporate
History".

(4) Common shares purchased by our employees are subject to vesting. For
treatment of non-vested common shares see Note 4 of "Notes to the
Combined/Consolidated Financial Statements".

16
<PAGE> 20

CONSOLIDATED PRO FORMA FINANCIAL DATA

The following tables set forth certain consolidated pro forma financial
data for the Stewart Group:

- on a historical basis;

- on a pro forma basis after giving effect to the acquisition of 50% of
TPRS Services N.V. and 75% of TPR & Partners N.V. as described under
"Corporate History -- Global Expansion" and the issuance of 1,144,000
common shares in connection with that acquisition; and

- the issuance of 30,500 common shares in connection with employee stock
purchases.

The closing of this transaction and the issuance of the common shares are
expected to occur on or prior to December 31, 2000. The effects of the foregoing
adjustments are reflected as of January 1, 1999 for purposes of the income
statement, and as of September 30, 2000 for purposes of the balance sheet. The
consolidated pro forma financial data set forth below should be read in
conjunction with "Selected Financial and Unaudited Other Data", "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the consolidated financial statements and related notes of the Stewart Group
included elsewhere in this prospectus.

<TABLE>
<CAPTION>
INCOME STATEMENT
FOR THE NINE MONTH PERIOD ENDED
SEPTEMBER 30, 2000
---------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Fees................................................ $113,210 $ 637(a) $113,847
Commissions......................................... 33,494 -- 33,494
Interest and Other.................................. 4,798 113(a) 4,911
-------- ------- --------
151,502 750 152,252
-------- ------- --------
EXPENSES:
Employee Compensation and Benefits.................. 28,635 630(b) 29,265
Marketing Fees...................................... 7,999 (3,096)(c) 4,903
Commissions, Clearance and Trading.................. 6,850 (111)(c) 6,739
Research and Administration......................... 11,083 262(b) 11,345
Depreciation and Amortization....................... 5,514 377(d) 5,891
Other Operating..................................... 10,842 82(b) 10,924
Minority Interest................................... -- 167(e) 167
-------- ------- --------
70,923 (1,689) 69,234
-------- ------- --------
Income Before Taxes................................... 80,579 2,121 83,018
Provision for Taxes................................... 8,008 329(f) 8,337
-------- ------- --------
Net Income............................................ $ 72,571 $ 1,792 $ 74,681
======== ======= ========
EARNINGS PER SHARE:
Basic Earnings Per Share:........................... $ 1.74 $ 0.02(g) $ 1.76
======== ======= ========
Diluted Earnings Per Share:......................... $ 1.61 $ 0.00(g) $ 1.61
======== ======= ========
</TABLE>

17
<PAGE> 21

<TABLE>
<CAPTION>
BALANCE SHEET
AS OF SEPTEMBER 30, 2000
----------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
ASSETS:
Cash and Cash Equivalents.................................. $ 39,139 $ -- $ 39,139
Fees Receivable............................................ 4,819 -- 4,819
Receivable from Broker-Dealer.............................. 1,388 -- 1,388
Investments in Unconsolidated Affiliates................... 11,776 -- 11,776
Receivables from Affiliates, Net........................... 61 -- 61
Investments Owned, At Market............................... 879 -- 879
Investment in Aircraft..................................... 15,119 -- 15,119
Customer List.............................................. 7,390 5,037(d) 12,427
Goodwill................................................... 5,836 3,341(d) 9,177
Furniture, Equipment and Leasehold Improvements (Net of
Accumulated Depreciation and Amortization of $1,141)..... 5,049 -- 5,049
Interest Receivable on Shareholders' Notes................. 608 -- 608
Other Assets............................................... 4,254 -- 4,254
-------- ------- --------
$ 96,318 $ 8,378 $104,696
======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Loan Payable............................................. $ 18,777 -- $ 18,777
Employee Compensation and Benefits Payable............... 5,759 -- 5,759
Marketing Fees Payable................................... 4,168 -- 4,168
Professional Fees Payable................................ 3,592 -- 3,592
Dividend Payable......................................... 7 -- 7
Taxes Payable............................................ 2,241 -- 2,241
Accrued Expenses and Other Liabilities................... 5,917 -- 5,917
Redeemable Minority Interest............................. -- $ 1,432(h) 1,432
-------- ------- --------
40,461 1,432 41,893
-------- ------- --------
Commitments and Contingencies

Shareholders' Equity:
Common Stock, $.001 par value (125,000,000 shares
authorized, 47,291,118 shares issued and outstanding,
48,465,618 pro forma shares)........................... 47 1(i) 48
Additional Paid-In-Capital................................. 84,066 15,291(i) 99,357
Contingently Returnable Shares............................. (21,046) (7,949) (28,995)
Accumulated Other Comprehensive Income..................... (246) -- (246)
Retained Earnings.......................................... 15,004 -- 15,004
-------- ------- --------
77,825 7,343 85,168
Less: Shareholders' Notes Receivable....................... (21,968) (397) (22,365)
-------- ------- --------
55,857 6,946 62,803
-------- ------- --------
$ 96,318 $ 8,378 $104,696
======== ======= ========
</TABLE>

18
<PAGE> 22

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

NOTE 1: BASIS OF PRESENTATION

The Consolidated Pro Forma Financial Data is presented:

- on a historical basis;

- on a pro forma basis after giving effect to the acquisition described in Note
2; and

- the issuance of 30,500 common shares in connection with employee stock
purchases.

The Consolidated Pro Forma Income Statement for the nine months ended September
30, 2000 was prepared as if the transaction described in Note 2 had taken place
on January 1, 1999. The Consolidated Pro Forma Balance Sheet as of September 30,
2000 was prepared as if the transaction described in Note 2 had taken place on
September 30, 2000.

NOTE 2: ACQUISITIONS

Pursuant to an agreement in principle reached in late 1999, we will issue
1,144,000 common shares at $13.02 per share for the acquisition of 50% of TPRS
Services N.V. and 75% of TPR & Partners N.V.

NOTE 3: PRO FORMA ADJUSTMENTS

(a) Adjustments to reflect fee revenue of $637,000 and interest and other
revenue of $113,000.

(b) Adjustments to reflect expenses incurred for employee compensation and
benefits, research and administration and other operating expenses in the
amounts of $630,000, $262,000 and $82,000, respectively.

(c) Adjustments of $3,096,000 and $111,000 to reflect marketing fees and
commission, clearance and trading expenses, respectively.

(d) Intangible assets totalling $8,378,000 resulting from the acquisition will
be amortized over a period of 14 to 20 years. Amortization costs for the
acquisition total $377,000.

(e) Adjustment of $167,000 to reflect a 25% minority interest.

(f) Adjustment of $329,000 to reflect additional tax liabilities resulting from
the acquisition calculated at the statutory rate.

(g) Basic earnings per share is computed by dividing the net income applicable
to common shares outstanding by the weighted average number of common
shares outstanding, excluding unvested and restricted shares. Diluted
earnings per share is computed using the same method as basic earnings per
share but also reflects the impact of unvested shares using the treasury
stock method. The calculations are set forth below:

<TABLE>
<CAPTION>
BASIC DILUTED
----------- -----------
<S> <C> <C>
Actual Weighted Average Common
Shares Outstanding at September 30, 2000.................. 41,838,622 45,227,368
Pro Forma Adjustments....................................... 657,783 1,146,183
----------- -----------
Pro Forma Weighted Average Common
Shares Outstanding at September 30, 2000.................. 42,496,405 46,373,551
=========== ===========
Pro Forma Net Income Per Share:............................. $ 1.76 $ 1.61
=========== ===========
</TABLE>

19
<PAGE> 23

(h) Adjustment to record the agreement in principle to purchase the remaining
25% minority interest in TPR & Partners N.V. at the end of 2004.

(i) Common shares outstanding of 47,291,118 has been adjusted to reflect (i)
the issuance of 1,144,000 common shares in connection with the acquisition,
and (ii) the issuance of 30,500 common shares in connection with employee
stock purchases.

20
<PAGE> 24

The following table sets forth certain consolidated pro forma financial
data for the Stewart Group:

- on a historical basis;

- on a pro forma basis after giving effect to the acquisition described in Note
2; and

- the issuance of 30,500 common shares in connection with employee stock
purchases.

The closing of this transaction and the issuance of the common shares are
expected to occur on or prior to December 31, 2000. The effects of the foregoing
adjustments are reflected as of January 1, 1999 for purposes of the income
statement. The consolidated pro forma financial data set forth below should be
read in conjunction with "Selected Financial and Unaudited Other Data",
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the consolidated financial statements and related notes thereto
of the Stewart Group included elsewhere in this prospectus.

<TABLE>
<CAPTION>
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1999
----------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<S> <C> <C> <C>
REVENUES:
Fees..................................................... $153,307 $ 425(a) $153,732
Commissions.............................................. 35,511 -- 35,511
Interest and Other....................................... 4,501 97(a) 4,598
-------- ------ --------
193,319 522 193,841
-------- ------ --------
EXPENSES:
Employee Compensation and Benefits....................... 37,385 605(b) 37,990
Marketing Fees........................................... 13,916 (2,981)(c) 10,935
Commissions, Clearance and Trading....................... 7,973 (135)(c) 7,838
Research and Administration.............................. 16,111 229(b) 16,340
Depreciation and Amortization............................ 3,918 503(d) 4,421
Other Operating.......................................... 10,851 171(b) 11,022
Minority Interest........................................ -- 169(e) 169
-------- ------ --------
90,154 (1,439) 88,715
-------- ------ --------
Income Before Taxes........................................ 103,165 1,961 105,126
Provision for Taxes........................................ 8,410 333(f) 8,743
-------- ------ --------
Net Income................................................. $ 94,755 $1,628 $ 96,383
======== ====== ========
EARNINGS PER SHARE:
Basic Earnings Per Share: ............................... $ 2.37 $ 0.01(g) $ 2.38
======== ====== ========
Diluted Earnings Per Share: ............................. $ 2.21 $(0.02)(g) $ 2.19
======== ====== ========
</TABLE>

21
<PAGE> 25

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION

NOTE 1: BASIS OF PRESENTATION

The Consolidated Pro Forma Financial Data is presented:

- on a historical basis;

- on a pro forma basis after giving effect to the acquisition described in Note
2; and

- the issuance of 30,500 common shares in connection with employee stock
purchases.

The Consolidated Pro Forma Income Statement for the year ended December 31,
1999 was prepared as if the transaction described in Note 2 had taken place on
January 1, 1999.

NOTE 2: ACQUISITIONS

Pursuant to an agreement in principle reached in late 1999, we will issue
1,144,000 common shares at $13.02 per share for the acquisition of 50% of TPRS
Services N.V. and 75% of TPR & Partners N.V.

NOTE 3: PRO FORMA ADJUSTMENTS

(a) Adjustments to reflect fee revenue and interest and other revenue of
$425,000 and $97,000.

(b) Adjustments to reflect expenses incurred for employee compensation and
benefits, research and administration, and other operating expenses in the
amounts of $605,000, $229,000 and $171,000, respectively.

(c) Adjustments of $2,981,000 and $135,000 to reflect marketing fees and
commission, clearance and trading expenses, respectively.

(d) Amortization costs of $503,000 relating to intangibles acquired.

(e) Adjustment of $169,000 to reflect a 25% minority interest.

(f) Adjustment of $333,000 to reflect the additional tax liabilities resulting
from the acquisition calculated at the statutory rate.

<TABLE>
<CAPTION>
BASIC DILUTED
---------- ----------
<S> <C> <C>
Actual Weighted Average Common Shares Outstanding at
December 31, 1999......................................... 40,035,574 42,863,538
Pro Forma Adjustments....................................... 536,234 1,146,734
---------- ----------
Pro Forma Weighted Average Common Shares Outstanding at
December 31, 1999......................................... 40,571,808 44,010,272
========== ==========
Pro Forma Net Income Per Share:............................. $ 2.38 $ 2.19
========== ==========
</TABLE>

22
<PAGE> 26

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Stewart Group is a research-focused investment counselor that manages
assets for high net-worth individuals and institutions located throughout the
world. Our principal source of revenues is investment advisory fees and,
accordingly, fluctuations in financial markets and client contributions and
withdrawals have a direct effect on revenues and net income. Significant
components of our expenses are variable in nature and partially offset
fluctuations in revenue.

Advisory fees are computed quarterly based on account market values and fee
rates pursuant to investment advisory contracts with clients. Clients are billed
quarterly, in advance.

Commission revenues earned on our brokerage activities, substantially all
of which relate to client accounts, vary directly with account trading activity
and new account generation. Transaction costs are reviewed quarterly and are
competitive.

Interest and other revenues primarily includes interest earned on notes
receivable for employee purchases of common shares, interest earned on our cash
management activities and equity income adjustments relating to our investments
in unconsolidated affiliates.

We provide competitive rewards to our employees through our compensation
and benefits policy, together with our employee equity ownership practices.
Employee compensation and benefits are our largest operating expense, the most
significant component of which is compensation paid to our analyst/portfolio
managers. Compensation for all employees varies with operating profit. At the
beginning of each year, each employee is allocated a participation in our
compensation pool. Compensation paid depends upon our actual operating profit
(as adjusted for amortization of intangibles and retirement benefits). We review
from time to time the percentage of operating profit made available for the
compensation pool and review annually the allocation of the compensation pool
among all employees.

Marketing fees are fees paid to select banks, investment firms and
individuals in at least 10 countries with whom we have formal marketing
arrangements that make up our network of symbiotic marketers. We consider the
banks, investment firms and individuals who gather assets for us to be symbiotic
marketers of our services because of the mutual benefits that flow from the
relationship -- they are able to offer premier equity investment management
services to their clients and we are able to extend the reach of our
asset-gathering efforts. These fees are based on the market value of referred
accounts and vary based on new account generation and fluctuations in the market
value of referred accounts.

Commissions, clearance and trading expenses include fees paid at the
direction of clients to consultants based on commissions relating to referred
accounts, and clearance and trading fees incurred related to the brokerage
activities. These transaction-related costs vary directly with trading activity.

Research and administration expenses include research, travel and
entertainment, communications, occupancy and equipment.

Other operating expenses include professional fees consisting of
accounting, auditing, tax, legal and consulting fees and charitable
contributions. A significant component of professional fees for the nine months
ended September 30, 2000 is nonrecurring and is related to our global expansion,
and in 1999 is nonrecurring and is related to our global consolidation and our
preparation for the offerings.

The income tax status of the companies of the Stewart Group has changed
significantly since 1997. Prior to July 1, 1997, our brokerage activities were
performed through our U.S. predecessor company which then operated as an S
Corporation under the provisions of the
23
<PAGE> 27

Internal Revenue Code of 1986, as amended, or Internal Revenue Code, as it is
commonly known, and, accordingly, the operating results were subject to U.S.
federal income tax at the shareholder level and not at the corporate level.
Subsequent to July 1, 1997, the brokerage activities were performed through a
subsidiary incorporated as an exempt company under the laws of Bermuda and were
not subject to U.S. taxes.

Prior to our merger with our U.S. predecessor company as of July 1, 1998,
our investment advisory and research activities were performed primarily through
our U.S. predecessor company which had then operated as an S Corporation under
the provisions of the Internal Revenue Code and, accordingly, the operating
results were subject to U.S. federal income tax at the shareholder level and not
at the corporate level. Subsequent to our merger with our U.S. predecessor
company, the investment advisory activities are performed by W.P. Stewart & Co.,
Ltd. and certain subsidiaries incorporated as exempt companies under the laws of
Bermuda. A significant component of the operating profits of these subsidiaries,
which is derived from activities outside of the United States, is not expected
to be subject to U.S. federal income tax.

Also subsequent to our merger with our U.S. predecessor company, research
and sub-advisory activities are performed by W.P. Stewart & Co., Inc., which
operates as a C Corporation and whose operating results are subject to U.S.
federal, state and local tax at the corporate level.

All of our employees are shareholders of W.P. Stewart & Co., Ltd. and
participate in the results of our operations. Historically, distributions
representing substantially all of our earnings have been paid as dividends to
our shareholders. Our policy is to offer our employees the opportunity to
participate in the ownership of the Stewart Group through purchases of common
shares -- both initial purchases by new employees and increased ownership for
existing employee shareholders.

RESULTS OF OPERATIONS

NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000 AS COMPARED TO NINE MONTH PERIOD
ENDED SEPTEMBER 30, 1999

ASSETS UNDER MANAGEMENT. Assets under management decreased $1.5 billion or
11.5% to $10.8 billion at September 30, 2000 from $12.3 billion at December 31,
1999. The decrease in assets under management included depreciation of $367
million and net outflow of assets of $1.1 billion. Gross new assets generated
included new accounts of $189 million and contributions to existing accounts of
$580 million which were directly offset by closed accounts of $805 million and
withdrawals of $1,060 million. We believe that a greater than usual amount of
withdrawals occurred during the first quarter of the year due to a temporary
increase in clients' shifting their funds to managers placing greater emphasis
on high-tech companies. Such activity has decreased since the first quarter.

Assets under management increased $128 million or 0.01% to $11.3 billion at
September 30, 1999 from $11.2 billion at December 31, 1998. The increase in
assets under management included net new assets of $267 million and depreciation
of $139 million. Gross new assets generated included new accounts of $708
million and contributions to existing accounts of $636 million which were
partially offset by closed accounts of $91 million and withdrawals of $986
million.

REVENUES. Revenues for the nine months ended September 30, 2000 increased
$3.0 million or 2.0% to $151.5 million from $148.5 million earned during the
nine months ended September 30, 1999. The increase was due to a $3.8 million or
3.2% decrease in fee revenue, a $5.6 million or 20.2% increase in commission
revenue and an increase of $1.1 million in interest and other revenues. Interest
and other revenues increased due to an increase of approximately $800,000 from
our proportionate earnings of two of our unconsolidated affiliates, higher
interest income from loans to employees and more efficient utilization of cash
on hand. The average fee

24
<PAGE> 28

earned from client accounts, including performance fees that apply to two
accounts, decreased to 1.26% at September 30, 2000 from 1.30% at September 30,
1999.

EXPENSES. Expenses, excluding income taxes, for the nine months ended
September 30, 2000, increased $1.8 million or 2.6% to $70.9 million from $69.1
million incurred during the nine months ended September 30, 1999. The changes
are primarily due to a decrease in variable expenses, including a decrease of
$2.3 million in fees paid to marketers, which are directly related to assets
under management of referred accounts, and an increase of $0.5 million in
commissions, clearance and trading costs, which vary with account activity.
Other operating expenses decreased $0.6 million. Employee compensation and
benefits decreased $0.9 million due to the decrease in adjusted operating
profit. Research and administration expense increased $2.2 million due to global
consolidation activities.

Included in depreciation and amortization is amortization of intangibles
which represents the year to date write-off of assets acquired (customer list
and goodwill) related to our global expansion activities. Amortization of
intangibles increased $0.9 million due to an additional acquisition.
Depreciation of our aircraft increased $2.0 million.

Included in other operating expenses is interest expense of $1.0 million
for each of the nine months ended September 30, 2000 and 1999, respectively.

Income tax expense decreased $1.6 million to $8.0 million for the nine
months ended September 30, 2000 from $9.6 million for the nine months ended
September 30, 1999 due to the $1.2 million increase in income before taxes and a
decrease in the effective tax rate from 12% for September 30, 1999 to 10% for
September 30, 2000. The decrease in the effective tax rate was primarily due to
the completion in 1999 of acquisitions outside the United States.

NET INCOME. Net income for the nine months ended September 30, 2000
increased $2.7 million or 3.9% to $72.6 million from $69.9 million earned during
the nine months ended September 30, 1999 as a result of the items described
above.

YEAR ENDED DECEMBER 31, 1999 AS COMPARED TO YEAR ENDED DECEMBER 31, 1998

ASSETS UNDER MANAGEMENT. Assets under management increased $1.1 billion or
9.8% to $12.3 billion at December 31, 1999 from $11.2 billion at December 31,
1998. The increase in assets under management included appreciation of $1.0
billion and net new assets of $69 million. Gross new assets generated included
new accounts of $859 million and contributions to existing accounts of $814
million which were partially offset by closed accounts of $259 million and
withdrawals of $1.35 billion.

REVENUES. Revenues for the year ended December 31, 1999 increased $41.0
million or 26.9% to $193.3 million from $152.3 million earned during the year
ended December 31, 1998. The increase was due to a $32.3 million or 26.7%
increase in fee revenue, a $7.9 million or 28.8% increase in commission revenue
and an increase of $0.8 million in interest and other revenues. The increase in
fee revenue was primarily due to a 22% increase in average assets under
management, an increase in the average fee rate from client accounts, including
performance fees that apply to two accounts, from 1.24% to 1.31% and the fee
revenue earned by an entity acquired during 1999.

EXPENSES. Expenses, excluding income taxes, for the year ended December
31, 1999 increased $19.1 million or 26.9% to $90.2 million from $71.1 million
incurred during the year ended December 31, 1998. The increase was primarily due
to an increase in variable expenses, including increases of $2.4 million in fees
paid to marketers, which are directly related to assets under management of
referred accounts, and an increase of $0.2 million in commissions, clearance and
trading costs, which vary with account activity. Other operating expenses
increased $0.4 million. Employee compensation and benefits increased $7.7
million due to an

25
<PAGE> 29

increase in adjusted operating profit. Research and administration increased
$4.9 million due to our global consolidation activities.

Depreciation and amortization increased $3.4 million. Included in
depreciation and amortization is amortization of intangibles of $0.3 million
which represents the year to date write-off of assets acquired (customer list
and goodwill) related to our global expansion activities. Depreciation expense
associated with the aircraft was $3.2 million.

Income tax expense decreased $0.3 million to $8.4 million in 1999 from $8.7
million in 1998 due to the company's effective tax rate decreasing to 8.2% in
1999 from 10.7% in 1998.

NET INCOME. Net income for the year ended December 31, 1999 increased
$22.2 million or 30.6% to $94.8 million from $72.6 million earned during the
year ended December 31, 1998 as a result of the items described above.

YEAR ENDED DECEMBER 31, 1998 AS COMPARED TO YEAR ENDED DECEMBER 31, 1997

ASSETS UNDER MANAGEMENT. Assets under management increased $2.6 billion or
30.2% to $11.2 billion at December 31, 1998 from $8.6 billion at December 31,
1997. The increase in assets under management included appreciation of $2.5
billion and net new assets of $76 million. Gross new assets generated included
new accounts of $552 million and contributions to existing accounts of $1.0
billion which were partially offset by closed accounts of $58 million and
withdrawals of $1.4 billion.

REVENUES. Revenues for the year ended December 31, 1998 increased $41.6
million or 37.6% to $152.3 million from $110.7 million earned during the year
ended December 31, 1997. The increase was due to a $32.5 million or 36.6%
increase in fee revenue, a $7.2 million or 35.3% increase in commission revenue
and an increase of $1.9 million in interest and other revenues. The increase in
fee revenue was primarily due to the 30.2% increase in assets under management.
The average fee earned from client accounts, including performance fees that
apply to two accounts, increased from 1.22% to 1.24%.

EXPENSES. Expenses, excluding income taxes, for the year ended December
31, 1998 increased $9.9 million or 16.2% to $71.1 million from $61.2 million
incurred during the year ended December 31, 1997. The increase was primarily due
to an increase in variable expenses, including increases of $4.9 million in fees
paid to marketers, which are directly related to assets under management of
referred accounts, and an increase of $1.9 million in commissions, clearance and
trading costs, which vary with account activity. Other operating expenses
increased $6.1 million due to an increase in nonrecurring professional fees of
$4.4 million representing costs incurred relating to our global consolidation
and the offerings. The balance, which was attributable to charitable
contributions, increased $1.9 million and included a $1.7 million contribution
to W.P. Stewart & Co. Foundation, Inc., a private charitable foundation
organized in 1998. The expense increases were partially offset by a $4.7 million
decrease in compensation expense related to the reduction in the compensation
payout ratio from approximately 41% to 27% of adjusted operating profit. The
reduction in the compensation payout ratio was determined after consideration of
the employee share ownership increases and dividend distributions.

Income tax expense increased $4.8 million to $8.7 million in 1998 from $3.9
million in 1997 due to the $31.7 million increase in income before taxes and an
increase in the effective tax rate from 7.8% in 1997 to 10.7% in 1998. The
Stewart Group's effective tax rate increased in 1998 because in 1997 the Stewart
Group's operations in the United States were conducted in the form of an S
Corporation not subject to U.S. federal income tax and because, beginning in
July 1998 when the Stewart Group effected the changes in its tax status
described in "-- Overview", a portion of the Stewart Group's income became
subject to U.S. federal income tax.

26
<PAGE> 30

NET INCOME. Net income for the year ended December 31, 1998 increased
$26.9 million or 58.9% to $72.6 million from $45.7 million earned during the
year ended December 31, 1997 as a result of the items described above.

LIQUIDITY AND CAPITAL RESOURCES

Our financial condition is highly liquid with principal assets including
cash, short-term investments and receivables from clients. Short-term
investments are primarily money market instruments. Liabilities include
operating payables and accrued compensation. Our investment advisory activities
do not require us to maintain significant capital balances. However, the broker-
dealer activities of W.P. Stewart Securities Limited, our Bermuda-based
broker-dealer and the sub-advisory activities of W.P. Stewart & Co. (Europe),
Ltd., our London-based research affiliate, require us to maintain certain
minimum levels of capital.

We continually monitor and evaluate the adequacy of the capital maintained
for our brokerage and sub-advisory activities. W.P. Stewart Securities Limited
and W.P. Stewart & Co. (Europe), Ltd. have consistently maintained net capital
in excess of the regulatory requirements prescribed by the SEC and IMRO,
respectively, as well as by other regulatory authorities. Historically, we have
met our liquidity requirements with cash generated from our operations.

In 1998, we became a 40% joint venture owner of a building in Hamilton,
Bermuda which is our headquarters building. Capital expenditures associated with
the building approximate $2.5 million over 1998 and 1999.

In addition, in 1998 a newly-formed limited liability company wholly owned
by us acquired, by assignment, the rights and obligations of Shamrock Aviation,
Inc., a company controlled by certain shareholders of W.P. Stewart & Co., Ltd.
under a purchase agreement to buy a Challenger aircraft for $22.5 million. The
aircraft was placed in service on April 8, 1999. General Electric Capital
Corporation is financing the aircraft with 10-year, amortizing loans with fixed
rates that range from 6.87% to 7.35%. During 1999, we had paid $22.5 million
under the purchase agreement, of which General Electric Capital Corporation
provided $19.6 million under the loans. A company under common control with
Shamrock Aviation, Inc., controlled by certain shareholders of W.P. Stewart &
Co., Ltd., operates the Challenger aircraft for us. We are charged actual cost
of operations for such operating services. We believe that ownership of this
aircraft enables us to efficiently manage the heavy travel schedules of our
investment and research professionals, at rates more favorable to us than would
be charged by an unaffiliated charterer.

We believe that our cash flow from operations is sufficient to meet our
debt and other obligations as they come due and anticipated capital
requirements.

INFLATION

Our assets are largely liquid in nature and therefore not significantly
affected by inflation. However, the rate of inflation may affect our expenses,
such as information technology and occupancy costs which may not be readily
recoverable in the pricing of the services that we provide. To the extent
inflation results in rising interest rates and has other negative effects upon
the securities markets, it may adversely affect our financial position and
results of operations.

27
<PAGE> 31

CORPORATE HISTORY

The Stewart Group began its business in 1975. Expansion of our client base
throughout the world and enhancement of our global research capability have been
principal elements of our business strategy. We believe that the global
consolidation formalizes a number of informal operating relationships and will
increase our ability to execute this business strategy and expand our marketing
relationships.

THE GLOBAL CONSOLIDATION

W.P. Stewart & Co., Ltd. was incorporated on June 29, 1998 under the laws
of Bermuda. On June 30, 1998, the shareholders of our U.S. predecessor company
exchanged all of their interests in that company for shares of WPS II, Inc., a
newly formed holding company. Effective as of July 1, 1998, our U.S. predecessor
company merged into W.P. Stewart & Co., Ltd. with W.P. Stewart & Co., Ltd.
continuing as the surviving company. Upon completion of this merger, WPS II,
Inc. received 29,321,436 common shares representing all of the outstanding
common shares of W.P. Stewart & Co., Ltd. at the effective time of the merger.

As the first step in the establishment of the Stewart Group's global
business, Capital Managers Limited, a Bermuda company under common control with
our U.S. predecessor company, was organized in 1996. As of October 30, 1998,
W.P. Stewart & Co., Ltd. merged with Capital Managers Limited with W.P. Stewart
& Co., Ltd. continuing as the surviving company. As a result of the Capital
Managers Limited merger, W.P. Stewart & Co., Ltd. became the owner of Capital
Managers Limited's subsidiaries, W.P. Stewart Securities Limited, W.P. Stewart
Asset Management Ltd. and W.P. Stewart Fund Management Limited. As consideration
in the merger, we issued to the Capital Managers Limited shareholders 13,904,305
common shares. Each of the Capital Managers Limited shareholders was and
continues to be either an employee, a retired employee or director of the
Stewart Group or a trustee for the members of an employee's, or retired
employee's, family or a member of an employee's family. Each shareholder of WPS
II, Inc. is also a former shareholder of Capital Managers Limited.

GLOBAL EXPANSION

In 1999, we completed three acquisitions and established our London
subsidiary. By these actions, we have increased our access to a broader European
clientele, enhanced our global research capability and improved our asset
gathering in Europe and North America.

In 1999, we acquired 50% of the capital stock of TPRS Services N.V. from
TPR & Partners N.V. and TPR Curacao N.V. TPRS Services N.V. is a Curacao company
that is engaged in the business of gathering assets for us. In addition, TPRS
Services N.V. currently provides client services for approximately $982 million
of our assets under management. As consideration for the TPRS Services N.V.
acquisition, we issued 1,152,000 common shares. We have agreed in principle to
acquire, as of July 1, 2000, the remaining 50% of TPRS Services N.V. in exchange
for 814,000 common shares, and 75% of TPR & Partners N.V. in exchange for
330,000 common shares. The closing of this transaction and the issuance of the
common shares are expected to occur on or prior to December 31, 2000. Under the
terms of the proposed acquisition, we would acquire the remaining 25% of TPR &
Partners N.V., which we anticipate will be part of a newly formed subsidiary to
be known as W.P. Stewart Asset Management (Europe), Ltd., on December 31, 2004.
We believe that the transactions will strengthen and further align our strategic
interests with TPR & Partners N.V. and its wholly-owned subsidiary, TPR Curacao
N.V., who have been significant symbiotic marketers. In connection with the TPRS
Services N.V. acquisition, we entered into ongoing arrangements with TPR &
Partners N.V. and TPR Curacao N.V. under which these companies will continue to
refer new clients to us and to provide services for client accounts that they
have referred to us.

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<PAGE> 32

In 1999, we acquired from Stewart Notz Stucki Limited, an affiliate of the
Notz Stucki group of companies, all of the outstanding capital stock of NS Money
Management Ltd. NS Money Management Ltd. is an international investment adviser
based in Bermuda that has more than $300 million in assets under management.
W.P. Stewart & Co., Ltd. serves as sub-adviser for all of NS Money Management
Ltd.'s client accounts. We issued 898,831 common shares as consideration for the
acquisition. We believe that the acquisition of NS Money Management Ltd. will
enable us to benefit from several long-term Notz Stucki advisory client
relationships and strengthen our 15 year relationship with the Notz Stucki group
of companies. Headquartered in Geneva, Switzerland, the Notz Stucki group is an
independent financial institution that specializes in the management of
investments of private individuals on a discretionary basis. The Notz Stucki
group of companies currently has over $8 billion in assets under administration.

We acquired, in 1999, from First Long Island Holdings, LLC, 100% of the
capital stock of First Long Island Investors, Inc. W.P. Stewart Asset Management
(NA), Inc. (as the company is now known), is an asset-gathering firm based in
Jericho, New York. W.P. Stewart Asset Management (NA), Inc. has been a
significant symbiotic marketer that was, as of September 30, 2000, responsible
for introducing $563 million of our assets under management to us. We have
issued 1,200,000 common shares as consideration for this acquisition. Robert D.
Rosenthal, a co-founder of First Long Island Investors, Inc., serves as Chairman
and Chief Executive Officer of W.P. Stewart Asset Management (NA), Inc. To
enhance our asset-gathering in North America, we entered into ongoing
arrangements with First Long Island Investors, LLC, an entity under common
ownership with First Long Island Holdings, LLC, under which First Long Island
Investors, LLC continues to service W.P. Stewart Asset Management (NA), Inc.'s
clients, refers new clients to us and assists us in developing, supervising and
coordinating our asset-gathering activities in North America. We believe that
First Long Island Investors, LLC's expertise in asset-gathering allows us to
accelerate growth of our new asset mandates while remaining focused on
investment performance.

Under the terms of the acquisitions of TPRS Services N.V., First Long
Island Investors, Inc. and NS Money Management Ltd., we have the right to
repurchase at nominal consideration, on an annual basis in each year during the
four years after the effective dates of each of those transactions, a portion of
the common shares issued by W.P. Stewart & Co., Ltd. as consideration in those
transactions (not to exceed in the aggregate 80% of the common shares issued in
each transaction) if certain levels of assets under management are not
maintained by the acquired businesses.

In January 2000, W.P. Stewart & Co. (Europe), Ltd. commenced its investment
management business in London. W.P. Stewart & Co. (Europe), Ltd., a wholly-owned
subsidiary of W.P. Stewart & Co., Ltd., provides investment research and
sub-advisory services to our two Bermuda investment advisory companies (W.P.
Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd.). With five
investment professionals, our London business has developed a European portfolio
for our clientele using the time-tested principles of our U.S. investment
philosophy and approach. Additionally, our London business has now taken the
lead role in nurturing established relationships, and developing new
relationships, with Europe-based clients and asset gatherers.

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<PAGE> 33

CORPORATE STRUCTURE

The organizational chart set forth below shows our operating structure and
our operating subsidiaries. We believe this operating structure positions us
effectively to service our global clientele and pursue our global strategy.

[OPERATING SUBSIDIARIES FLOW CHART]

[Chart depicting the structure of the Company and its subsidiaries including:
W.P. Stewart & Co. (Europe), Ltd.; the Company's London-based research
affiliates; NS Money Management Ltd., the Company's Bermuda-based asset manager;
W.P. Stewart & Co., Inc., the Company's New York-based research affiliate; W.P.
Stewart Securities Limited, the Company's Bermuda-based broker-dealer; W.P.
Stewart Asset Management (NA), Inc., the Company's New York-based asset
gatherer; TPRS Services N.V., the Company's Curacao-based asset gatherer; Bowen
Asia limited, the Company's Hong Kong-based research affiliate; and W.P. Stewart
Asset Management Ltd., the Company's Bermuda-based investment adviser and its
subsidiary W.P. Stewart Fund Management Limited, the Company's Dublin-based fund
Management Company.]

1. All entities are wholly-owned except where otherwise indicated. This chart
does not reflect the proposed acquisition of the remaining 50% of TPRS
Services N.V. and 75% of TPR & Partners N.V., which is anticipated to be part
of a newly formed subsidiary to be known as W.P. Stewart Asset Management
(Europe), Ltd.
2. W.P. Stewart & Co., Ltd. has entered into an agreement pursuant to which it
has an option to increase ownership to 50% or more in 2004.

30
<PAGE> 34

BUSINESS

OVERVIEW

The Stewart Group offers research-intensive equity investment management
services worldwide. Central to our success are three interdependent competitive
strengths -- culture, investment methodology and performance record. We foster
team effort, collaboration and a comprehensive focus on achieving superior
portfolio performance. The long-term commitment between the Stewart Group and
our employees is evidenced by our performance-based compensation policies,
employee stock ownership and the tenure of our employees. The culture is a key
factor in our ability to implement, over an extended period of time, an
investment methodology that requires intense, shared, continuous research and
debate.

These elements have contributed to a 24.3% compound annual return (before
fees) for client accounts over the 25 years from January 1, 1975 to December 31,
1999. See "-- Historical Performance Record".

While investment performance is our primary focus, asset gathering is also
important to our business. We have developed mutually beneficial relationships
with select institutions and individuals to accumulate new assets. We will
continue to cultivate long-term relationships with our current network of
marketers and to establish relationships with additional marketers for
additional asset gathering.

Finally, we intend to continue to pursue a global strategy, both in our
research effort and in the expansion of our client base.

COMPETITIVE STRENGTHS

We believe we have a franchise, culture, long-term historical performance
record and investment methodology that position us well to continue to compete
in the global wealth management business. We have built a business model we
believe is unique and have developed and successfully implemented our
disciplined investment philosophy over the past 25 years. Our experienced
investment team consists of 18 investment analyst/portfolio managers with an
average of more than 15 years of experience in the industry. Eleven of our
analyst/portfolio managers have worked at the Stewart Group for five years or
longer. With six offices around the world and a selective network of marketing
relationships in more than 10 countries, we have established an international
presence and offer services to a broad range of high net-worth individuals and
institutions throughout the world.

CULTURE

We place great emphasis on teamwork and client service. Cooperation is
reinforced through a profit sharing plan and equity ownership by every employee.
All employee compensation is based solely on a percentage of the firm's annual
operating profits; our policy is not to pay fixed salaries or to guarantee
compensation. Every employee owns common shares of W.P. Stewart & Co., Ltd.,
which have been accumulated through voluntary personal investments. Immediately
after the offerings, individuals who are our current and former employees and
directors and affiliates of us and such individuals will own approximately 76%
of our outstanding common shares. As a policy, we neither grant options nor
issue shares to employees without consideration. We intend to continue our
performance-based compensation practice and to reserve annually up to 1% of our
outstanding common shares for purchase by our employees. All employee stock
purchases have been, and will continue to be, subject to seven year vesting.
Because of the seven year vesting, employee stock purchases will be made at
prices which represent fair value but which will be below the current market
price. It is our present intention to continue to make available common shares
for purchase by our employees in proportion to their

31
<PAGE> 35

relative contributions to the Stewart Group. See "Management -- Compensation of
Directors and Officers".

We believe that a key to our continued success is our highly motivated team
of experienced investment professionals. Each acts in the dual role of analyst
and portfolio manager, with every investment portfolio handled by an individual
manager, backed up by at least one other manager to provide continuity and
stability. The group of analyst/portfolio managers is relatively small, a
structure we intend to maintain. The investment professionals meet regularly and
are able to interact quickly, informally and effectively.

All of our investment professionals share a common commitment to both the
demanding standards required to invest only in the world's best companies and
the discipline of our appraisal process. All of them have a record of successful
investing, and most of them have either known each other or worked closely
together for many years. Their investment performance and tenure show them to be
a complementary and effective team.

LONG-TERM PERFORMANCE RECORD

During the 25-year period from January 1, 1975 through September 30, 2000,
we experienced a 23.5% compound annual return, before fees, and a 22.2% compound
annual return, after fees and expenses, compared to a 16.6% return for the S&P
500 Index for the same period. See "-- Historical Performance Record". The year
ended December 31, 1993 was the only year since our inception that we
experienced negative performance. We believe that our long-term record and
strong investment returns provide an advantage in our efforts to accumulate
assets through strategic marketing relationships, client referrals and increases
to existing client mandates. As a result of retained investment gains as well as
the contribution of new funds by existing and new clients, our assets under
management have grown at a compound annual rate of approximately 28.0% during
the period from December 31, 1995 to December 31, 1999.

INVESTMENT METHODOLOGY

Our investment professionals focus on one objective -- providing our
advisory clients with well above-average investment returns over a long period
of time, while accepting what we believe to be below-average risk. In making
investments, the investment team focuses on a five-year investment horizon and
does not engage in market timing. We believe that our investment research is
distinguished by its intensity. Our analysts/portfolio managers do their own
research on companies they select, and on many they do not select, and derive
investment research information from a variety of sources, both external and
internal. Our analysts visit these companies regularly, contact managements
frequently, talk to competitors, customers and suppliers, and draw upon other
diverse sources of information. While one analyst has the primary responsibility
for each company (generally four to six companies per analyst), information is
also gathered by other analysts and is shared among all investment
professionals.

Because we consider ourself a long-term investor, the investment
professionals prepare detailed five-year projections for all investment
prospects and investments. These forecasts and the related appraisal of fair
current value for each company under review are used to determine what we
believe to be the intrinsic value of that company and are a critical tool in
developing a comprehensive and detailed evaluation of a company's business. This
appraisal technique systematically examines numerous factors, such as the
company's growth prospects, business and product line strength, management
capabilities, financial resources and many others. The purpose of this appraisal
technique is to evaluate the investment potential and to assess the related risk
of companies under review. Our goal is to construct portfolios of great
businesses, rather than portfolios of stocks. As a result, we consider each
client's portfolio to be a quasi-holding company.

32
<PAGE> 36

The purpose of our thorough investment appraisal process is to concentrate
our clients' investments only in those businesses that appear to offer the
greatest long-term appreciation potential. The five-year forecasts, and the
appraisals for companies under review, are refined frequently as our investment
professionals update their research. This consistent coverage allows our
investment professionals to act decisively when changes in price and
circumstances occur.

At any given time, few businesses meet our standards. Accordingly, our
worldwide investment universe has historically been limited to fewer than 50
investment candidates from each of the United States, Europe, Japan and
Asia-ex-Japan, which are selected based upon a consensus of our investment team.
This has allowed us to concentrate our clients' investments in a portfolio
typically of 20 companies that appear to offer the greatest long-term
appreciation potential. The businesses in which we invest normally increase
profits every year. These businesses normally achieve cumulative earnings growth
at a rate we expect will approximately double earning power behind a client's
portfolio every five years. We believe that this pattern of consistent, fairly
rapid, earnings growth has been the primary driver behind the improving value of
our clients' portfolios and the growth of our business over the years.

Using thorough analysis and intensive research, we select investment
candidates based in part on the following criteria:

- a proven track record of consistent profit growth;

- strong financial condition;

- predictable earnings growth that we believe will continue for the
next five years and beyond;

- accurate and reliable information that is readily available;

- successful, experienced management that is accessible to our
investment team;

- strong product lines and competitive position, preferably with
worldwide presence;

- lack of cyclicality; and

- large market capitalization and significant trading liquidity.

The determination of whether a particular investment prospect is eligible
for inclusion in our investment universe is the result of a collective,
debate-driven process that actively involves all members of our investment team
and reflects their collective research and analytical judgment and experience.
While the entire investment team contributes to the research and appraisal
process, each member has the freedom and responsibility to make investment
decisions with respect to specific client accounts within the confines of the
defined universe.

BUSINESS STRATEGY

Our business strategy is to continue to provide premier equity investment
management services on a worldwide basis. We believe that our pursuit of a more
global clientele will lead to continued growth in our assets under management
and our revenues, and that both new and existing clients will benefit from our
increased focus on international research and stock selection. We intend to
adhere to the distinctive and disciplined investment philosophy which we have
pursued over our 25-year history. In addition, we believe that a culture of
ownership and compensation for performance will be a key element for our
continued growth and future success and aligns the interests of our clients,
employees and stockholders.

EXTEND INVESTMENT PERFORMANCE

Central to our strategy is our objective to achieve above-average
investment returns over a long period of time for our clients while accepting
what we believe to be below-average risk. We intend to adhere, in expanding and
contracting markets alike, without regard to "benchmarks", to a philosophy that
emphasizes investment over a relatively long-term horizon in what we believe are
high quality, steadily-growing businesses. We intend to remain focused on
investment
33
<PAGE> 37

performance while using our network of symbiotic marketers as the primary means
to gather assets.

INCREASE GLOBAL RESEARCH FOCUS

We want our clients to own equity in the finest growing businesses in the
world. We believe that having a global integrated research capability is a
critical element in providing the best investment product. We also believe that
the introduction of the euro in the European monetary union will lead to an
improvement in the quality and availability of financial information and a more
consistent basis for comparing European companies with competitors inside and
outside their home countries. As the universe of high quality companies expands
globally, we intend to maintain a research effort parallel with the growing
investment opportunities. This global research capability will also allow us to
meet particular client needs to the extent that they express any regional or
national preferences. The establishment of W.P. Stewart & Co. (Europe), Ltd. and
the increase in our ownership in Bowen Asia Limited, a British Virgin Islands
company operating in Hong Kong, have enabled us to expand our non-U.S. research
capability.

PURSUE GLOBAL CLIENTELE

We believe that our services and performance have been well-received by
clients throughout the world and that there exists significant opportunity to
expand our clientele internationally, especially in Europe. We believe that
non-U.S. investors are generally under-invested in equity securities and will
look to established professionals like the Stewart Group to invest their wealth.
The introduction of the euro will minimize currency risk within Europe and
should reduce the resulting tendency of Europe-based investors to consider
domicile an important factor in equity investing. As part of our strategy to
exploit this opportunity, our acquisition of NS Money Management Ltd. and our
establishment of W.P. Stewart & Co. (Europe), Ltd. have increased our access to
a broader Europe-based clientele and provide us with a Europe-based investment
management team, which we expect to expand over the next five years. Also, we
have established and expanded our relationships with our symbiotic marketers,
including TPR & Partners N.V., TPR Curacao N.V., First Long Island Investors,
LLC and the Notz Stucki group of companies, who are shareholders of the Stewart
Group. We expect that TPR & Partners N.V., TPR Curacao N.V., the Notz Stucki
group of companies and First Long Island Investors, LLC will continue to
introduce new clients to us.

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<PAGE> 38

INVESTMENT MANAGEMENT TEAM

Our highly experienced and motivated team of investment professionals has
been critical to our strong long-term investment performance. We have 18 senior
investment professionals and 20 associate portfolio managers who directly
participate in the investment process. The following table identifies the senior
investment professionals and summarizes their experience in the industry:

<TABLE>
<CAPTION>
YEARS IN YEARS WITH
NAME LOCATION AGE INDUSTRY COMPANY
---- -------- --- -------- ----------
<S> <C> <C> <C> <C>
John A. Allison.............................. Bermuda 51 17 5
David Altman................................. New York 43 19 7
Marilyn G. Breslow........................... New York 56 16 10
Samantha Epstein-Smith....................... New York 32 8 2
Alexander Farman-Farmaian.................... Bermuda 35 12 12
Alexandra V.C. Harries....................... London 32 11 1
Peter H. Jennison............................ New York 40 15 11
Frans Jurgens................................ London 31 9 3
Robert Kahn.................................. New York 68 40 25
Celina Lin................................... Hong Kong 41 11 5*
Miguel Nogales............................... London 26 4 1
Robert L. Rohn............................... New York 39 12 9
Harry W. Segalas............................. New York 40 18 10
Lisa M. Stewart.............................. Hong Kong 42 17 6*
William P. Stewart........................... Bermuda 63 45 25
Alexandre Stucki............................. London 27 4 3
Naoko Takemura............................... Hong Kong 38 15 3*
James T. Tierney............................. New York 33 12 1
</TABLE>

---------------
* Includes years with Bowen Asia Limited.

Two of our former portfolio managers, who have each been with us
approximately 10 years, recently announced their intention to leave the Stewart
Group on amicable terms to pursue other interests. Following their departures
and after the offerings, these two managers will continue to own, directly and
indirectly, an aggregate of approximately 5.1% of our shares. The former
portfolio managers, who will continue to be our employees until November 30,
2000, are restricted by the terms of their employment agreements from, prior to
December 1, 2001, engaging in business with our clients or encouraging or
soliciting any of our employees to resign or become affiliated with a competitor
in which the former portfolio manager has an interest. The two former portfolio
managers are assisting us to ensure that their exit, and the transition of the
accounts for which they were responsible to other portfolio managers within our
firm, are accomplished in a manner which minimizes any disruption to our clients
and our business. While these two former portfolio managers were responsible for
servicing a significant number of accounts, as all of our portfolio managers
share a common commitment to the Stewart Group's investment philosophy and
methodology, we do not believe that these events will result in a material
change in assets under management. Although there can be no assurance that the
current departures will not result in the closure of client accounts, we are
handling these departures and the associated account transitions in a manner
which is substantially similar to the departures of previous portfolio managers
who also were responsible for servicing a significant number of accounts, which
departures did not result in a material loss of client accounts.

35
<PAGE> 39

HISTORICAL PERFORMANCE RECORD

JANUARY 1, 1975-OCTOBER 31, 2000 PERFORMANCE

We have achieved a 23.5% compound annual return before fees, and a 22.2%
compound annual return after fees for the period from January 1, 1975 through
September 30, 2000. This compares to a 16.6% return of the S&P 500 Index over
the same period computed on a comparable basis. Our compound annualized returns
for the five and ten years ended September 30, 2000, before fees, were 22.8% and
21.0%, respectively, as compared to 21.7% and 19.4%, respectively, for the S&P
500 during the same periods. Our compound annualized returns for the five and
ten years ended September 30, 2000, after fees, were 21.5% and 19.7%,
respectively. Our year-to-date return through October 31, 2000, before fees, was
4.5% as compared to a negative return of 1.8% for the S&P 500 during the same
period. Our year-to-date return through October 31, 2000, after fees, was 3.4%.
We believe our superior investment results over long time periods are due
largely to our strict adherence to a consistent long-term investment philosophy.

We believe that our concentration in less cyclical businesses reduces risk
relative to the S&P 500 Index. In the three down market years experienced since
our formation (1977, 1981 and 1990), the S&P 500 Index declined by approximately
7.4%, 5.0% and 3.1%, respectively. In those years, accounts managed by us
appreciated by approximately 16.0%, 10.8% and 13.2%, respectively, before fees,
as calculated in the manner described below. See "-- Method of Performance
Calculation".

The chart below illustrates our annual return in client accounts from
January 1, 1975 through October 31, 2000. See "-- Method of Performance
Calculation".

MANAGED ACCOUNTS VS. S&P 500

<TABLE>
<CAPTION>
S&P 500 WPS PRE-FEE WPS POST-FEE
------- ----------- ------------
<S> <C> <C> <C>
'74 100 100 100
'75 137 165 164
'76 170 217 213
'77 157 251 245
'78 167 284 273
'79 197 377 361
'80 261 504 477
'81 248 558 523
'82 301 764 710
'83 369 980 903
'84 391 1154 1052
'85 515 1720 1554
'86 611 2083 1863
'87 642 2266 2005
'88 748 2482 2170
'89 986 3377 2925
'90 955 3823 3266
'91 1247 5892 4988
'92 1342 6307 5274
'93 1477 6177 5108
'94 1496 6377 5212
'95 2059 8592 6950
'96 2532 11682 9352
'97 3377 15444 12242
'98 4343 20486 16074
'99 5256 22901 17762
October 31, 2000 5161 23922 18369
</TABLE>

36
<PAGE> 40

EXAMINATION OF PERFORMANCE RECORD

Our independent accountants, PricewaterhouseCoopers LLP, have performed an
examination of our performance record for the period January 1, 1989 through
September 30, 2000, including the three, five and ten year periods ended
September 30, 2000. Their report is attached to this prospectus as Annex 1.

METHOD OF PERFORMANCE CALCULATION

ACCOUNT INCLUSION. Our performance data, since 1989, reflects the
performance of all client equity accounts having at least $1 million in market
value as of January 1 of each year for which W.P. Stewart & Co., Ltd. (including
its U.S. predecessor company) and W.P. Stewart Asset Management Ltd., our
Bermuda-based investment adviser subsidiary, acted with complete discretionary
authority. With respect to periods prior to 1989, the data reflects performance
of a group of accounts believed by management to be representative of all fully
discretionary client equity accounts. If the criteria for account inclusion
since 1989 had been applied for periods prior to 1989, there is no assurance
that the results would be consistent, although we believe the results would not
be materially different. The accounts included for the period from January 1,
1975 through September 30, 2000 are referred to as the "composite" or the
"managed accounts".

In the case of one portfolio manager who joined the Stewart Group as of
1981, the performance data includes the performance of portfolios managed by him
at a different firm during the period 1975 through 1980 using an investment
philosophy similar to that practiced by us at the time. The effect of this
inclusion is to increase the compound annual return since inception by
approximately one-tenth of one percentage point.

The managed accounts exclude one portfolio manager's 1977 performance data,
in compliance with certain Advisers Act requirements. The performance return
excluding this data is substantially the same as the performance return would
have been if such data had been included.

PERFORMANCE CALCULATION. Beginning in 1989, performance figures for the
managed accounts have been calculated using a "time-weighted" rate of return
method, such that additions and withdrawals of capital are weighted based on the
amount of time such capital is held in the account during the period. The annual
performance of an account is derived by linking the periodic rates of return for
such account. Prior to 1989, performance figures were calculated using a linear
non-weighted method, such that beginning of year market values were adjusted to
reflect additions and withdrawals of capital during the year.

For 1975 through 1988, the annual performance of the managed accounts is
the average of the average performance of the individual managers' portfolios.
Beginning in 1989, the annual performance is the average of all accounts in the
composite. For 1975 through 1992, accounts are given equal weighting regardless
of market value. Beginning in 1993, account performance has been asset-weighted
based on the beginning of year market value of all accounts in the composite.

The pre-fee performance of our accounts for all years shown on the chart
reflects the deduction of brokerage commissions but not the deduction of
advisory fees which would reduce the overall return. The post-fee performance of
our accounts for all years shown reflects the deduction of brokerage commissions
as well as advisory fees.

EFFECT OF ADVISORY FEES. After 1983, the post-fee performance of our
accounts reflects the deduction of the actual advisory fees charged each account
in the composite, adjusted for the effect of capital additions and withdrawals.
For the period 1975 through 1983, we have used the actual fee rates or the
highest fee rates then prevailing.

37
<PAGE> 41

From 1975 through 1988, advisory fees were deducted from performance at the
end of each year. If fees had been deducted from performance on a quarterly
basis when charged, the return since inception would have been decreased by
approximately one-tenth of one percentage point.

S&P 500. The S&P 500 Index annual change shown in the chart relating to
our 1975 through September 30, 2000 performance includes the reinvestment of
dividend income, using a methodology similar to that used for our accounts. It
does not reflect the deduction of any transaction or custodial costs that would
be involved in investing in the S&P 500. The effect of these costs would be to
reduce the indicated return from 1975 through September 30, 2000 for the S&P 500
by an undetermined amount. The S&P 500 Index annual percentage change was
obtained from the Standard & Poor's Corporation, New York, New York.

ASSETS UNDER MANAGEMENT

The following table shows assets under management during the period from
January 1, 1997 through September 30, 2000. Changes between beginning and ending
assets under management include: capital appreciation, net contributions and net
new accounts opened/closed.

ASSETS UNDER MANAGEMENT

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTH PERIOD ENDED DECEMBER 31,
------------------------------------ ---------------------------
SEPTEMBER 30, JUNE 30, MARCH 31,
2000 2000 2000 1999 1998 1997
------------- -------- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Beginning Assets Under
Management............... $11,643 $11,586 $12,255 $11,157 $ 8,562 $ 6,396
======= ======= ======= ======= ======= =======
Ending Assets Under
Management............... $10,791 $11,643 $11,586 $12,255 $11,157 $ 8,562
======= ======= ======= ======= ======= =======
</TABLE>

The table below illustrates net flows of assets under management which
include: changes in net contributions and net new accounts opened/closed. The
table excludes total capital appreciation in assets under management with the
exception of the amount attributable to withdrawals and accounts closed.

NET FLOWS OF ASSETS UNDER MANAGEMENT

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTH PERIOD ENDED(1) DECEMBER 31,
------------------------------------ ---------------------------
SEPTEMBER 30, JUNE 30, MARCH 31,
2000 2000 2000 1999 1998 1997
------------- -------- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Existing Accounts
Contributions.............. $ 206 $ 185 $ 188 $ 814 $ 1,007 $ 747
Withdrawals................ (287) (341) (432) (1,345) (1,426) (1,086)
----- ----- ----- ------- ------- -------
Net Flows to Existing
Accounts.............. (81) (156) (244) (531) (419) (339)
----- ----- ----- ------- ------- -------
Accounts Opened............ 73 54 62 859 552 437
----- ----- ----- ------- ------- -------
Accounts Closed............ (168) (173) (464) (259) (57) (65)
----- ----- ----- ------- ------- -------
Net Flows of Assets Under
Management............... $(176) $(275) $(646) $ 69 $ 76 $ 33
===== ===== ===== ======= ======= =======
</TABLE>

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

(1)Net flows of assets under management during the first nine months of 2000
reflect a declining rate of account closures and withdrawals. While our
method of recording account closures and withdrawals may affect the
particular quarter in which a closure or withdrawal is reflected, we do not
believe that timing or recordation differences, in the aggregate, would
materially affect the trend demonstrated .

38
<PAGE> 42

The following table shows our record since 1997 for retaining client accounts.

ACCOUNT RETENTION

<TABLE>
<CAPTION>
YEAR ENDED
THREE MONTH PERIOD ENDED DECEMBER 31,
------------------------------------ ---------------------
SEPTEMBER 30, JUNE 30, MARCH 31,
2000 2000 2000 1999 1998 1997
------------- -------- --------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Number of Accounts at
Beginning of Period......... 2,351 2,350 2,383 1,980 1,598 1,320
Number of Accounts Closed
During Period............... 40 36 102 98 43 47
Retention Rate................ 93.2%* 93.9%* 82.9%* 95.1% 97.3% 96.4%
</TABLE>

---------------
* Calculated on an annualized basis.

CLIENT BASE

Our client base is diverse. Approximately 59.5% of our assets under
management, and 83.1% of our accounts, as of September 30, 2000, were associated
with high net-worth individuals and their affiliates. As of September 30, 2000,
approximately 22.3% of our assets under management were contributed by non-U.S.
clients. The following tables set forth information regarding our client base
and how our assets under management have grown over time.

The following tables show, as of September 30, 2000, December 31, 1999,
1998 and 1997, the amount of assets under management in direct relationship
client accounts and in consultant related client accounts, and the number of
accounts by relationship type.

ASSETS UNDER MANAGEMENT
BY RELATIONSHIP TYPE

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, AS OF DECEMBER 31,
-------------- ----------------------------
2000 1999 1998 1997
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
Direct Relationship........................ $ 9,787 $11,061 $10,135 $7,645
Consultant Related......................... 1,005 1,194 1,022 917
------- ------- ------- ------
Total............................ $10,792 $12,255 $11,157 $8,562
======= ======= ======= ======
</TABLE>

The value of direct relationship accounts referred by our symbiotic
marketers as of September 30, 2000, December 31, 1999, 1998 and 1997 represented
32.2%, 36.7%, 32.7% and 31.2%, respectively, of our direct relationship accounts
as of such dates.

NUMBER OF ACCOUNTS
BY RELATIONSHIP TYPE

<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, AS OF DECEMBER 31,
-------------- -----------------------
2000 1999 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Direct Relationship.............................. 2,145 2,221 1,865 1,496
Consultant Related............................... 205 162 115 102
----- ----- ----- -----
Total.................................. 2,350 2,383 1,980 1,598
===== ===== ===== =====
</TABLE>

39
<PAGE> 43

The following table shows our assets under management by client type.

ASSETS UNDER MANAGEMENT
BY CLIENT TYPE

<TABLE>
<CAPTION>
ASSETS UNDER NUMBER OF
MANAGEMENT AS OF ACCOUNTS AS OF
SEPTEMBER 30, 2000 SEPTEMBER 30, 2000
--------------------------- ------------------------
CLIENT TYPE U.S. NON-U.S. TOTAL U.S. NON-U.S. TOTAL
----------- ---- -------- ----- ---- -------- -----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
High Net-Worth/Individual
Relationships/Pooled Funds*..... $4,503 $1,923 $ 6,426 1,761 192 1,953
Foundations & Other Relationship
Directed Institutional.......... 3,479 262 3,741 293 10 303
Other Institutional............... 407 218 625 51 43 94
------ ------ ------- ----- --- -----
Total............................. $8,389 $2,403 $10,792 2,105 245 2,350
====== ====== ======= ===== === =====
</TABLE>

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

* Pooled funds have been included in High Net-Worth/Individual Relationships
because the underlying clients of the pooled fund vehicles are high net worth
individuals.

The following table shows the amount of assets under management contributed
by U.S. and non-U.S. clients.

ASSETS UNDER MANAGEMENT
U.S./NON-U.S. CLIENTS

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
------------------- ----------------------------
2000 1999 1998 1997
---- ---- ---- ----
(IN MILLIONS)
<S> <C> <C> <C> <C>
U.S. Clients........................... $ 8,389 $ 9,591 $ 8,721 $6,920
Non-U.S. Clients....................... 2,403 2,664 2,436 1,642
------- ------- ------- ------
Total.................................. $10,792 $12,255 $11,157 $8,562
======= ======= ======= ======
</TABLE>

40
<PAGE> 44

INVESTMENT ADVISORY REVENUES

Advisory fee revenues are generated from investment advisory contracts
between the Stewart Group and clients for whom we manage discretionary accounts.
These agreements are terminable at will by either party on short notice. Under
our current standard fee arrangement, we receive a management fee equal to 1.5%
per annum of the value of the client's account up to $25 million, plus 1.25% of
any account balance in excess of $25 million. Our standard fee arrangement is
non-negotiable. We do not typically offer fixed income investment management
services. Clients' funds held on a long-term basis in fixed income investments
($36 million at September 30, 2000) are subject to a 0.50% annual fee. Fees
under our investment advisory contracts are billed and are payable quarterly, in
advance. The following table shows the average annualized gross management fee,
including performance fees that apply to two accounts, as a percentage of assets
under management received by us from various segments of our client base during
the nine month period ended September 30, 2000 and during the year ended
December 31, 1999:

<TABLE>
<CAPTION>
AVERAGE GROSS
MANAGEMENT FEE
AS A PERCENT OF ASSETS
UNDER MANAGEMENT
--------------------------------------------
NINE MONTH PERIOD ENDED YEAR ENDED
CLIENT TYPE SEPTEMBER 30, 2000 DECEMBER 31, 1999
----------- ----------------------- -----------------
<S> <C> <C>
Institutional.............................. 1.14% 1.12%
Non-Institutional.......................... 1.32% 1.37%
U.S. Clients............................... 1.26% 1.25%
Non-U.S. Clients........................... 1.29% 1.31%
Overall Weighted Average................... 1.26% 1.31%
</TABLE>

The average percentage gross management fee, excluding performance fees,
was 1.28% and 1.29% for the nine month period ended September 30, 2000 and for
the year ended December 31, 1999, respectively. The average fee, in each case,
was less than our standard fee of 1.5% because a number of advisory contracts
were entered into prior to 1989, when we adopted our current fee arrangement,
and because account balances in excess of $25 million are subject to a lower
fee.

Currently, each of our investment advisory contracts names either W.P.
Stewart & Co., Ltd. or W.P. Stewart Asset Management Ltd., our Bermuda-based
investment adviser subsidiary, as the investment adviser. These entities engage
W.P. Stewart & Co., Inc., Bowen Asia Limited or W.P. Stewart & Co. (Europe),
Ltd. to act as sub-adviser for certain accounts or mandates. Under written
sub-advisory agreements, the sub-adviser is entitled to receive from the named
investment advisory entity a fee which is comparable to fees charged by other
unrelated advisers for similar mandates. W.P. Stewart & Co., Inc. is the
investment adviser with respect to W.P. Stewart & Co. Growth Fund, Inc., a U.S.
registered mutual fund sponsored by the Stewart Group.

ASSET ACCUMULATION

We have established relationships with a small number of symbiotic
marketers that refer portfolio management clients to us in return for a share of
the fees paid by such clients. Currently, two of our most significant symbiotic
marketers are First Long Island Investors, Inc. and TPR & Partners N.V. together
with its affiliate, TPR Curacao N.V. The TPR companies began referring
investment advisory clients to us in 1993. As of September 30, 2000, client
accounts referred to us by TPR & Partners N.V. and TPR Curacao N.V. had an
aggregate market value of

41
<PAGE> 45

$982 million (representing 9.1% of our total assets under management). First
Long Island Investors, LLC and its affiliates, including First Long Island
Investors, Inc., which we recently acquired, began referring investment advisory
clients to us in 1983. As of September 30, 2000, client accounts referred to us
by First Long Island Investors, Inc. had an aggregate market value of $563
million (representing 5.2% of our total assets under management).

COLLECTIVE INVESTMENT FUNDS

Mutual fund and pooled accounts are not a primary focus of the Stewart
Group or its future business strategy. Our U.S. mutual fund is used primarily to
efficiently invest smaller accounts. As of September 30, 2000, we also served as
investment adviser to 39 collective investment funds organized to meet the
fiscal and regulatory requirements of certain non-U.S. clients and to one U.S.
collective investment trust for non-U.S. clients, as well as one U.S. common
trust fund. The following table sets forth information regarding our collective
investment funds with assets under management in excess of $50 million as of
September 30, 2000:

<TABLE>
<CAPTION>
JURISDICTION ASSETS UNDER
FUND NAME OF FORMATION MANAGEMENT
--------- ------------ ------------
(IN MILLIONS)
<S> <C> <C>
W.P. Stewart Holdings, N.V. .................... Netherlands Antilles $431
HH Managed Account 3 Ltd. ...................... British Virgin Islands 194
Long Term Value Trust........................... Austria 119
DGC Global Fund................................. Luxembourg 100
Com Selection................................... Luxembourg 100
Nostar Investments Inc. ........................ Panama 85
W.P. Stewart & Co. Growth Fund, Inc............. United States 78
</TABLE>

CLEARING, CUSTODIAN AND BROKERAGE ARRANGEMENTS

We do not hold any funds or securities of our clients. Clients' funds and
securities are held by custodians appointed either by the client or, if no
custodian is named by the client, by the Stewart Group. We currently utilize, on
a fully disclosed basis, the services of Neuberger Berman, LLC as clearing agent
and as custodian on accounts where the client makes no custodial designation. We
believe that our current relationship with Neuberger Berman, LLC is satisfactory
but believe that a comparable agreement with a different clearing agent and/or
custodian could be reached if necessary.

Our investment advisory contracts authorize us to select the broker through
which any transaction may be executed and specifically authorize the use of our
affiliated broker-dealer, W.P. Stewart Securities Limited.

COMPETITION

We believe that currently only a limited number of companies with a similar
investment philosophy and practice compete directly with us in our core business
of providing wealth management services to the upper tier of the wealth
management market. However, the investment management business in general is
intensely competitive. In providing investment management services, we compete
with a large number of asset management firms as well as broker-dealers, trust
companies, commercial banks and other specialized wealth management providers.
Our future growth and profitability will be affected by our ability to retain
and increase our market share, which could be adversely affected over the longer
term as competitors seek to develop high net-worth relationships. Many of our
current and potential competitors are significantly larger in terms of capital,
assets, geographic presence, distribution network and

42
<PAGE> 46

other important business criteria, provide a wider range of services and may
have access to greater financial resources than the Stewart Group.

EMPLOYEES

At November 1, 2000, we employed approximately 82 persons. We consider our
relations with our employees to be good.

FACILITIES

Our headquarters and certain of our executive offices are located at
Trinity Hall, 43 Cedar Avenue, Hamilton, Bermuda in a building owned by a joint
venture between the Stewart Group and The Bank of Bermuda Limited and leased to
us by the joint venture on arms-length commercial terms. We also lease offices
in New York, New York; Portland, Maine; London, England and Hong Kong, China. We
believe our facilities have been well maintained, are in good operating
condition, are adequate for our current operational requirements and could be
replaced, if necessary, on acceptable terms.

LEGAL PROCEEDINGS

We have currently no pending litigation of a material nature.

REGULATION

Our business and the investment management industry in general are subject
to extensive regulation in Bermuda, in the United States at both the federal and
state levels, and in the United Kingdom and the Republic of Ireland, as well as
by various self-regulatory organizations or SROs, as they are commonly known, in
these and other jurisdictions. A number of regulatory agencies of various
jurisdictions are charged with safeguarding the integrity of the securities and
other financial markets and with protecting the interests of customers
participating in markets in those jurisdictions.

In Bermuda, our investment business is subject to the jurisdiction of the
Bermuda Monetary Authority. Effective January 1, 2000, the Investment Business
Act 1998 requires licensing of all persons carrying on investment business in or
from within Bermuda, unless there is an exemption available under the Act. Our
investment businesses are exempt from the licensing requirements of the Act due
to the nature of our clientele and our regulation by the SEC.

In the United States, the SEC is the federal agency that is primarily
responsible for the regulation of investment advisers and broker-dealers, and
the Board of Governors of the Federal Reserve System promulgates regulations
applicable to securities credit transactions involving broker-dealers and
certain other U.S. persons. Investment advisers and broker-dealers are subject
to registration and regulation by state securities regulators in those states in
which they conduct business. Industry SROs, including the National Association
of Securities Dealers, or NASD, as it is commonly known, and national securities
exchanges, have authority over the firms that are their members.

In the United Kingdom, the main regulatory body is the Financial Services
Authority. At present, regulation of fund management businesses is carried out
principally by SROs, including IMRO by which W.P. Stewart & Co. (Europe), Ltd.
is regulated. Under current legislation, it is expected that during 2000 IMRO's
regulatory function will be subsumed into the Financial Services Authority,
which will become the sole UK regulatory body for the investment management
business. In the Republic of Ireland the Central Bank of Ireland is responsible
for the regulation of fund management activities and is the regulatory body that
supervises W.P. Stewart Fund Management Limited and the Dublin domiciled
investment funds which it manages.

43
<PAGE> 47

W.P. Stewart & Co., Ltd. and W.P. Stewart & Co., Inc. are registered as
investment advisers with the SEC. As investment advisers, each is subject to the
requirements of the Advisers Act and the SEC's regulations thereunder. They, and
their employees engaged in advisory services, are also subject to certain state
securities laws and regulations, and to state laws regarding fiduciaries.
Federal and state regulations impose, among other things, limitations on the
ability of investment advisers to charge performance-based or non-refundable
fees to clients, record-keeping and reporting requirements, disclosure
requirements, limitations on principal transactions between an adviser or its
affiliates and advisory clients, requirements as to fees paid to solicitors,
restrictions on commission and fee arrangements with broker-dealers, and
advertising restrictions, as well as general anti-fraud prohibitions. The state
securities law requirements applicable to employees of investment advisers
include certain qualification requirements as to advisory employees. In
addition, W.P. Stewart & Co., Inc., as investment adviser to a mutual fund
registered under the Investment Company Act, is subject to requirements under
the Investment Company Act and the SEC's regulations thereunder. Such
requirements include, among other things, record-keeping and reporting
requirements and procedures for handling funds.

Under the Advisers Act, every investment advisory agreement with clients
must expressly provide that it may not be assigned by the investment adviser
without the consent of the client. Under the Investment Company Act, every
investment adviser's agreement with a registered investment company must provide
for the agreement's automatic termination in the event of its assignment. Under
both acts, an investment advisory agreement is deemed to have been assigned when
there is a direct or indirect transfer of the agreement, including a direct
assignment or a transfer of a "controlling block" of the firm's voting
securities or, under certain circumstances, upon the transfer of a "controlling
block" of the voting securities of its parent corporation. A transaction is not,
however, an assignment under the Advisers Act or the Investment Company Act if
it does not result in a change of actual control or management of the investment
adviser. Any assignment of our investment advisory agreements would require, as
to any registered investment company client, the prior approval by a majority of
its shareholders, and as to our other clients, the prior consent of such clients
to such assignments. Following completion of the offerings, sales by WPS II,
Inc. or other shareholders or issuances of common shares by us, among other
things, could result in a deemed assignment of our investment advisory
agreements under such statutes. See "Risk Factors -- We Are Subject to the
Control of Many Regulatory Bodies" and "Risk Factors -- A Change of Control of
the Stewart Group Would Give Our Clients the Right to Terminate Their Investment
Advisory Agreements With Us".

The officers, directors and employees of our investment management
subsidiaries may from time to time own securities which are also owned by one or
more of their clients. Each subsidiary has internal policies with respect to
individual investments and requires reporting of securities transactions and
restricts certain transactions so as to reduce the possibility of conflicts of
interest.

W.P. Stewart Securities Limited, our Bermuda-based broker-dealer, is
registered as a broker-dealer with the SEC and in 48 states of the United States
and is a member of, and subject to regulation by, the NASD. As a result of
federal and state broker-dealer registration and SRO memberships, W.P. Stewart
Securities Limited is subject to overlapping schemes of regulation which cover
many aspects of its securities business. Such regulations cover matters
including the use and safekeeping of clients' funds and securities,
record-keeping and reporting requirements, supervisory and organizational
procedures intended to assure compliance with securities laws and to prevent the
improper trading on material nonpublic information. As a broker-dealer
registered with the SEC and certain states and a member firm of the NASD, W.P.
Stewart Securities Limited is also subject to the capital requirements of the
SEC, the states and the NASD. These capital requirements specify minimum levels
of capital, computed in accordance with regulatory requirements ("net capital"),
that W.P. Stewart Securities Limited is required to

44
<PAGE> 48

maintain and also limit the amount of leverage that W.P. Stewart Securities
Limited is able to obtain in its business. A failure of W.P. Stewart Securities
Limited to maintain its minimum required capital would require it to cease
executing client transactions until it returned to capital compliance, and could
cause it to lose its membership on an exchange, or in an SRO, to lose its
registration with the SEC or a state, or require its liquidation. At September
30, 2000, W.P. Stewart Securities Limited was required to maintain minimum net
capital, in accordance with SEC rules, of approximately $100,000 and had total
net capital of approximately $18.2 million, or approximately $18.1 million in
excess of the amount required.

W.P. Stewart & Co. (Europe), Ltd. is a member of, and subject to regulation
by, IMRO in the United Kingdom. Its permitted activities are limited to
providing investment management and investment advice, together with the
marketing of unregulated collective investment schemes. Regulations cover
matters such as the use and safekeeping of clients' funds and securities,
record-keeping and reporting requirements, employee-related matters, including
qualification and approval of supervisory, investment management and sales
personnel, disclosure requirements, advertising restrictions and minimum levels
of capital. W.P. Stewart Fund Management Limited is subject to the supervisory
control of the Central Bank of Ireland. The permitted activities of W.P. Stewart
Fund Management Limited include the provision of services consisting of the
establishment and management of specified collective investment undertakings,
the provision of management and administration services and of investment and
financial advice. W.P. Stewart Fund Management Limited is also subject to
minimum capital requirements, ongoing reporting and disclosure requirements and
such other prudential and supervisory requirements as the Central Bank of
Ireland may issue from time to time. W.P. Stewart & Co. (Europe), Ltd. and W.P.
Stewart Fund Management Limited each currently satisfy minimum capital
requirements. TPR & Partners N.V., our Amsterdam-based asset gatherer, is
regulated by the Netherlands Securities Board.

Compliance with many of the regulations applicable to us involves a number
of risks, particularly because applicable regulations in a number of areas may
be subject to varying interpretation. Regulators make periodic examinations and
review annual, monthly and other reports on our operations, track record and
financial condition. In the event of a violation of or non-compliance with any
applicable law or regulation, governmental regulators and SROs may institute
administrative or judicial proceedings that may result in censure, fine,
compensation orders, civil penalties (including treble damages in the case of
insider trading violations), criminal penalties, the issuance of
cease-and-desist orders, the deregistration or suspension of the non-compliant
firm, the suspension or disqualification of the firm's officers or employees and
other adverse consequences. We have not experienced any such penalties to date.
Such violations or non-compliance could also subject us and/or our employees to
civil actions by private persons. Any governmental, SRO or private proceeding
alleging violation of or non-compliance with laws or regulations could have a
material adverse effect upon our business, financial condition, results of
operations and business prospects.

The regulatory environment in which we operate is subject to change. We may
be adversely affected as a result of new or revised legislation or regulations
imposed by the SEC, other U.S., state or non-U.S. governmental regulatory
authorities or SROs. We also may be adversely affected by changes in the
interpretation or enforcement of existing laws and rules by these governmental
authorities and SROs. Our businesses may be materially affected not only by
securities regulations but also by regulations of general application. For
example, the volume of our principal investment advisory business in a given
time period could be affected by, among other things, existing and proposed tax
legislation and other governmental regulations and policies (including the
interest rate policies of the Federal Reserve Board) and changes in the
interpretation or enforcement of existing laws and rules that affect the
business and financial communities.

45
<PAGE> 49

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Members of the board of directors of W.P. Stewart & Co., Ltd. are elected
by the shareholders of W.P. Stewart & Co., Ltd. The Directors serve until
re-elected at the next annual general meeting or their successors are appointed.

The following table sets forth information with respect to the directors
and executive officers of W.P. Stewart & Co., Ltd.

<TABLE>
<CAPTION>
NAME POSITION
---- --------
<S> <C>
William P. Stewart.................. Chairman, Chief Executive Officer and Director(1)(2)
John C. Russell..................... Deputy Chairman, Managing Director and Director(1)
Richard C. Breeden.................. Director(2)(3)
Edgar H. Brunner.................... Director(2)
Beat Notz........................... Director
Henry B. Smith...................... Director(1)(3)
Heinrich Spangler................... Director(3)
Mark A. Henderson................... Deputy Managing Director
Robert D. Rosenthal................. Deputy Managing Director
Frederick M. Ryan................... Deputy Managing Director
Charles G.R. Target................. Deputy Managing Director
Rocco Macri......................... Finance Director
Michael A. Wood..................... Corporate Secretary
</TABLE>

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

(1) denotes member of the Executive Committee of the board of directors.

(2) denotes member of the Compensation Committee of the board of directors.

(3) denotes member of the Audit Committee of the board of directors.

WILLIAM P. STEWART is Chairman, Chief Executive Officer and a Director of
W.P. Stewart & Co., Ltd. Mr. Stewart started on Wall Street in 1955 on the
trading floor of the New York Stock Exchange. He joined Spingarn, Heine & Co. in
1957 as an analyst/registered representative and, in 1961, moved to Pyne,
Kendall & Hollister in the same capacity. He was successively Director of
Research, General Partner responsible for the firm's investment advisory and
institutional operations, President of its international investment banking
subsidiary, Managing Partner and Chairman and Chief Executive Officer of Riter,
Pyne, Kendall & Hollister, Inc. After the sale of Riter, Pyne's principal
business in early 1973, Mr. Stewart joined Ruane, Cunniff & Co., an investment
management firm, as Vice Chairman, while simultaneously founding our U.S.
predecessor company as a corporate consultant. He established our U.S.
predecessor company as an investment advisory firm in 1975.

JOHN C. RUSSELL serves as Deputy Chairman, Managing Director and a Director
of W.P. Stewart & Co., Ltd. He joined the Stewart Group in 1996 as General
Counsel, relinquishing that position after becoming the firm's Chief Operating
Officer in April 1997. From 1992 to 1996, Mr. Russell was a partner in the law
firm of Kroll & Tract. From 1987 through 1992, Mr. Russell served as President
and Chief Executive Officer of the Ohio Brass Company, a manufacturing company,
and OB Systems and Mining, Inc., another manufacturing company. From 1980 to
1987, he served as President and Chief Executive Officer of Naarden
International, Inc., an international fragrance company. In 1970, Mr. Russell
was a founding partner of the law firm

46
<PAGE> 50

Anderson Russell Kill & Olick. Mr. Russell has more than 37 years of experience
in domestic and international corporate and securities law.

RICHARD C. BREEDEN became a Director of W.P. Stewart & Co., Ltd. in June
1998. Since 1997, Mr. Breeden has served as Chairman, President and Chief
Executive Officer of Equivest Finance, Inc., a publicly traded company in the
resort development and financing business. Mr. Breeden has served as the
court-appointed bankruptcy trustee of The Bennett Funding Group, Inc., which
owns a majority of the outstanding securities of Equivest, since 1996. Mr.
Breeden also has owned his own financial consulting firm since that time. From
1993 to 1996, Mr. Breeden served as the chairman of the worldwide financial
services practice of Coopers & Lybrand LLP. From 1989 to 1993, Mr. Breeden
served as Chairman of the U.S. Securities and Exchange Commission after
appointment to that position by President George Bush and confirmation by the
U.S. Senate. Prior to the Commission, Mr. Breeden served in the White House as
Assistant to the President (1989) and Deputy Counsel to the Vice President
(1982-1985). Mr. Breeden also practiced law in private practice in New York City
and Washington, D.C.

EDGAR H. BRUNNER has served as a Director of W.P. Stewart & Co., Ltd. since
June 1998. Dr. Brunner was a former General Partner with Armand von Ernst & Cie.
AG, a private bank in Bern, Switzerland and was appointed Chief Executive
Officer of that company in the acquisition of Armand von Ernst & Cie. AG by
Swiss Bank Corporation. In addition, he was a member of the Bern Council of
Burghers and President of the Swiss Private Bankers Association. From 1973 until
1997, Dr. Brunner served as Chairman of the Board of Bankers Trust AG of Zurich,
Switzerland.

BEAT NOTZ became a Director of W.P. Stewart & Co., Ltd. in January 1999.
Mr. Notz is a founder and since 1964 has been a principal of the Notz Stucki
Group, a wealth management firm headquartered in Geneva, Switzerland. Mr. Notz
has a Masters degree from the Graduate School of International Studies at the
University of Geneva. In 1961, he was Vice President of Lehman Brothers
International. In 1968, he co-founded Haussmann Holdings, a multi-manager,
diversified investment strategy fund, with the Groupe Worms, a merchant banking
group, in Paris. Mr. Notz serves as a Director of the Quantum Fund and other
funds of the Quantum Group.

HENRY B. SMITH has been a Director of W.P. Stewart & Co., Ltd. since June
1998. Mr. Smith is President and Chief Executive Officer of The Bank of Bermuda,
with which he has been employed in various capacities since 1973. In May 1997,
Mr. Smith was appointed Deputy Chairman of the Bermuda Stock Exchange Council
and in July 1998, he was appointed Deputy Chairman of the Council Partners
Charitable Trust.

HEINRICH SPANGLER has served as a Director of W.P. Stewart & Co., Ltd.
since June 1998. For the last 21 years, Mr. Spangler has served in various
capacities, including managing partner, and presently serves as spokesman of the
Board of Management of Bankhaus Carl Spangler & Co., the oldest private bank in
Austria. Mr. Spangler has also served as Chairman of the Supervisory Board of
Carl Spangler Kapitalanlegegesellschaft, a private investment company located in
Salzberg, Austria.

MARK A. HENDERSON has served as Deputy Managing Director of W.P. Stewart &
Co., Ltd. since November 1998. Mr. Henderson began his career in New York with
Rheem International, Inc., a steel manufacturer and subsidiary of City Investing
Corp. He was seconded by Rheem to South Africa between 1969 and 1973 to
establish their South African subsidiary. In 1974 he joined Panmure Gordon &
Co., a financial adviser, brokerage concern and member of the London Stock
Exchange. He became an individual member of the London Stock Exchange in 1979
and a partner of Panmure Gordon & Co. in 1981. Panmure Gordon & Co. was acquired
by NationsBank Corp. in 1986. In that year he became a Director of NationsBank
(Europe) Ltd. and a member of the Executive Committee of Panmure Gordon & Co.,
Ltd. He was responsible for the international

47
<PAGE> 51

expansion of the firm's business which included the establishment of an office
in New York. He is currently a member of The Securities Institute in London.

ROBERT D. ROSENTHAL has served as Deputy Managing Director of W.P. Stewart
& Co., Ltd. since January 2000 and is CEO of W.P. Stewart Asset Management (NA),
Inc. As President and Chief Executive Officer of First Long Island Investors,
Inc., a wealth management firm, Mr. Rosenthal oversaw the investment of over one
billion dollars in assets. On October 1, 1999, substantially all of the business
of First Long Island was acquired by W.P. Stewart and Co., Ltd., and W.P.
Stewart Asset Management (NA), Inc. was created.

FREDERICK M. RYAN has served as Deputy Managing Director of W.P. Stewart &
Co., Ltd. since February 1999. Mr. Ryan served as Deputy Managing
Director -- Europe from October 1998 through January 1999. Prior to that, Mr.
Ryan was a consultant with FMR Capital Advisory, financial and business
consultants. From 1991 through 1997, he was president of Canada Life Investment
Management. Mr. Ryan worked with the investment and business consulting group of
FMR & Associates from 1982 through 1991. From 1969 through 1982, Mr. Ryan was a
shareholder, officer and Director of R.A. Daly & Co., Ltd., a brokerage firm and
a former member firm of the Toronto Stock Exchange. Mr. Ryan has been a member
of the Association for Investment Management & Research since 1967 and served as
president of the Toronto Society of Financial Analysts (a constituent member
society of the Association for Investment Management & Research) in 1976-1977.

CHARLES G.R. TARGET has served as Deputy Managing Director of W.P. Stewart
& Co., Ltd. since June 1999. Mr. Target is an Executive Director of our Asian
affiliate, Bowen Asia Limited. Prior to the founding of Bowen, Mr. Target was a
general partner and director of Alan Patricof Associates, the London-based
international venture capital company. Before joining Patricof in 1988, Mr.
Target served as Managing Director of Business International Asia/Pacific Ltd.,
an economic research and consulting company owned by the Economist Group, where
he was responsible for the Asian regional operations of the company.

ROCCO MACRI has served as Finance Director of W.P. Stewart & Co., Ltd.
since March 1999. Mr. Macri is a Certified Public Accountant. From 1993 through
1999, he was a Partner with the accounting firm of Lopez Edwards Frank & Co.,
LLP, where he was a Manager from 1984 through 1993. From 1984 through 1998, Mr.
Macri had principal responsibility for our audit at our previous independent
accountants.

MICHAEL A. WOOD has served as Corporate Secretary of W.P. Stewart & Co.,
Ltd. since June 1998. Mr. Wood has acted as Corporate Administrator for A.S. &
K. Services Ltd., a corporate administrative services company in Bermuda since
1994. From 1993 through 1994, he was Trust Manager for International Trust
Company of Bermuda Limited, and prior to that time he held positions with the
Bank of Bermuda Limited, International Trust Company B.V.I. Limited and Royal
Trust Corporation of Canada.

All persons listed above other than Beat Notz, Mark Henderson, Robert
Rosenthal, Frederick Ryan, Rocco Macri and Charles Target have served as
directors and/or appointed officers of W.P. Stewart & Co., Ltd. since June 30,
1998, and the terms of office of such persons will run until the election of
successor directors (or until the shareholders resolve in a general meeting not
to re-appoint the director) or the appointment of successor officers. Under the
terms of a 1996 shareholders agreement, shareholders holding approximately 20%
of our common shares have agreed to elect William P. Stewart to the Board of
Directors as long as he remains an employee of W.P. Stewart & Co., Ltd. There
are no other arrangements or understandings pursuant to which any other director
or executive officer of W.P. Stewart & Co., Ltd. was selected.

Charles Target is the son-in-law of William P. Stewart. There are no other
family relationships between any directors and executive officers.

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<PAGE> 52

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

The aggregate compensation paid or accrued in 1999 by W.P. Stewart & Co.,
Ltd. to its directors and executive officers, including bonuses and compensation
payable pursuant to employee benefit plans was $7.9 million. Of that amount,
persons who are currently executive officers or directors of W.P. Stewart & Co.,
Ltd. received $7.6 million.

The Company sponsors a defined contribution profit-sharing plan (including
a 401-K feature), covering substantially all employees. Contributions to the
profit-sharing plan are determined quarterly by the board of directors. In
addition, on January 1, 1997, the Company started a defined contribution
money-purchase plan. This plan covers substantially all employees who meet the
minimum age and service requirements. Contributions cannot exceed $30,000
annually, per employee. The aggregate amount set aside or accrued by W.P.
Stewart & Co., Ltd. to provide pension, retirement or other employee benefits to
its directors and executive officers in 1999 was $65,256.

W.P. Stewart & Co., Ltd. has agreed to pay each of Messrs. Breeden,
Brunner, Smith and Spangler $30,000 per annum for his services on W.P. Stewart &
Co., Ltd.'s board of directors.

49
<PAGE> 53

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth certain information regarding the ownership
of common shares as of October 1, 2000 by:

- each person who is known by W.P. Stewart & Co., Ltd. to own more than 10%
of the common shares, both prior to and immediately following the
completion of the offerings;

- the selling shareholders; and

- all directors and executive officers of W.P. Stewart & Co., Ltd. as a
group.

This table does not reflect an aggregate of 1,144,000 common shares to be
issued in the acquisition of the remaining interest in TPRS Services N.V. and
75% of TPR & Partners N.V.

<TABLE>
<CAPTION>
COMMON
COMMON SHARES SHARES TO COMMON SHARES
BENEFICIALLY OWNED BE SOLD IN BENEFICIALLY OWNED
PRIOR TO OFFERINGS OFFERINGS AFTER OFFERINGS
----------------------- ---------- -----------------------
IDENTITY OF PERSON OR GROUP NUMBER PERCENTAGE NUMBER NUMBER PERCENTAGE
--------------------------- ------ ---------- ------ ------ ----------
<S> <C> <C> <C> <C> <C>
WPS II, Inc.(1) ................... 29,321,436 61.96% 7,865,000 21,456,436 45.34%
Kevin S. and Michaelane Aarons,
Joint Tenants(2)(3)(4)........... 41,400 * 9,504 31,896 *
David A. Altman(2)(5)(6)(7)........ 427,249 * 103,411 323,838 *
Shamell Amory(6)................... 1,500 * 321 1,179 *
Scott Belair(2)(3)................. 63,393 * 16,358 47,035 *
Marilyn G.
Breslow(2)(5)(6)(8)(9)........... 359,223 * 87,011 272,212 *
Marilyn G. Breslow and Jan L.
Breslow, Trustees u/a Nicholas
Morris Breslow 1997 Grantor
Trust(9)......................... 41,754 * 10,774 30,980 *
Marilyn G. Breslow and Jan L.
Breslow, Trustees u/a Noah Joseph
Breslow 1997 Grantor Trust(9).... 41,754 * 10,774 30,980 *
Robert E. Burke(2)(6)(10).......... 12,994 * 3,259 9,735 *
Edward C. Butler(2)(6)............. 50,000 * 12,902 37,098 *
Sylvia A. Cart(2)(5)(6)............ 5,000 * 1,000 4,000 *
John J. and Kathleen Casey,
Joint Tenants(11)................ 14,923 * 3,790 11,133 *
Sandra Coleman(2)(6)(12)........... 71,882 * 18,409 53,473 *
Detra DeChabert(2)(6).............. 4,500 * 1,161 3,339 *
Kevin DeVos(2)..................... 6,000 * 500 5,500 *
Europa International Ltd.(13)...... 67,952 * 13,590 54,362 *
Alexander M. Farman-
Farmaian(2)(5)(14)............... 346,325 * 87,545 258,780 *
John Ferrer(2)(15)................. 75,473 * 19,022 56,451 *
First Long Island Holdings
LLC(16).......................... 1,200,000 2.54% 10,000 1,190,000 2.51%
Christine A. Fowler(2)(6)(17)...... 71,912 * 18,260 53,652 *
Joseph S. Frelinghuysen,
Jr.(5)(18)....................... 129,600 * 50,380 79,220 *
Michael J. Gillen(2)(7)(19)........ 27,000 * 2,190 24,810 *
The Graymer Foundation(20)......... 397,620 * 202,077 195,543 *
Sarah Harkness(2).................. 4,500 * 1,125 3,375 *
Cecilia M. Hartsell(2)(6).......... 1,000 * 258 742 *
Susan Hughes(2)(6)................. 7,500 * 1,571 5,929 *
</TABLE>

50
<PAGE> 54

<TABLE>
<CAPTION>
COMMON
COMMON SHARES SHARES TO COMMON SHARES
BENEFICIALLY OWNED BE SOLD IN BENEFICIALLY OWNED
PRIOR TO OFFERINGS OFFERINGS AFTER OFFERINGS
----------------------- ---------- -----------------------
IDENTITY OF PERSON OR GROUP NUMBER PERCENTAGE NUMBER NUMBER PERCENTAGE
--------------------------- ------ ---------- ------ ------ ----------
<S> <C> <C> <C> <C> <C>
Joann Hundertmark(6)............... 1,500 * 107 1,393 *
Patricia A. Ingenito(2)(6)(21)..... 103,681 * 25,938 77,743 *
David Jennison, Matthew Jennison &
David B. Jennison, Trustees u/a
f/b/o Peter H. Jennison(22)...... 56,859 * 12,822 44,037 *
David Jennison, Peter H. Jennison &
David B. Jennison, Trustees u/a
f/b/o Matthew Jennison(23)....... 56,859 * 12,822 44,037 *
Matthew Jennison, Peter H. Jennison
& David B. Jennison, Trustees u/a
f/b/o David Jennison(23)......... 56,859 * 12,822 44,037 *
Peter H. Jennison(2)(5)(6)(24)..... 156,815 * 40,227 116,588 *
Philip D. Jennison(2)(25).......... 328,923 * 76,199 252,724 *
Helen Klaben Kahn, Trustee u/a
Helen Klaben Kahn Revocable Trust
dtd. 3/15/00(26)................. 89,931 * 19,756 70,175 *
Richard O. Kahn(27)................ 62,952 * 13,630 49,322 *
Robert L. Kahn(2)(6)(28)........... 966,400 2.04% 220,704 745,696 1.58%
Stephen A. Kahn(29)................ 62,952 * 13,630 49,322 *
Kristen M. Killian(2)(6)........... 12,000 * 3,000 9,000 *
P. Jefferson Kimball(5)(6)......... 30,000 * 6,000 24,000 *
Susan G. Leber(2)(5)............... 50,000 * 12,500 37,500 *
Lisa D. Levey(2)(5)(6)............. 60,000 * 15,482 44,518 *
Annika McLoud(2)(6)................ 7,500 * 1,935 5,565 *
Rocco Macri(2)(5)(30).............. 100,000 * 25,000 75,000 *
Carolann F. Marshall(2)(6)(31)..... 90,871 * 22,771 68,100 *
Ryan Melkonian(5)(6)............... 7,500 * 1,600 5,900 *
Stephen E. Memishian(2)(32)........ 433,741 * 202,749 230,992 *
Morgan Guaranty Trust Company of
New York and Judith Genatt,
Trustees u/a dtd. 12/23/92 f/b/o
James Schwartz(33)............... 112,500 * 56,250 56,250 *
Morgan Guaranty Trust Company of
New York and Judith Genatt,
Trustees u/a dtd. 12/23/92 f/b/o
Jonathon Schwartz(33)............ 112,500 * 56,250 56,250 *
Morgan Guaranty Trust Company of
New York and Judith Genatt,
Trustees u/a dtd. 12/23/92 f/b/o
Kathryn Schwartz(33)............. 112,500 * 56,250 56,250 *
Marina M. Morgan(2)(6)............. 7,000 * 1,806 5,194 *
Andrea M. Myron(2)(6).............. 1,000 * 258 742 *
Alison Proshan(2)(5)(6)............ 7,500 * 1,875 5,625 *
Madeline Ramirez(2)(6)............. 1,000 * 258 742 *
Wendy Richter(2)(6)................ 12,000 * 3,096 8,904 *
Kathleen Ritchie(6)................ 5,000 * 321 4,679 *
Robert L. Rohn(2)(5)(6)(34)........ 528,376 1.12% 128,822 399,554 *
</TABLE>

51
<PAGE> 55

---------------
* Less than 1%.

(1) After the offerings, trusts for which William P. Stewart, the Chairman and
Chief Executive Officer of W.P. Stewart & Co., Ltd., serves as Trustee will
continue to own 39.48% of WPS II, Inc. Mr. Stewart disclaims beneficial
ownership of shares owned by the trusts. See note 45.

(2) Employee or former employee of W.P. Stewart & Co., Ltd. or its predecessor.
(3) Former executive officer and/or director of W.P. Stewart & Co., Ltd.
(4) After the offerings, Mr. & Mrs. Aarons will continue to own 0.39% of WPS
II, Inc.
(5) Officer and/or director of an affiliate of W.P. Stewart & Co., Ltd.
(6) Employee of an affiliate of W.P. Stewart & Co., Ltd.
(7) After the offerings, David A. Altman will continue to own 2.29% of WPS II,
Inc.
(8) After the offerings, Marilyn G. Breslow will continue to own 1.90% of WPS
II, Inc. Excludes shares owned by trusts for the benefit of Marilyn G.
Breslow's adult family members for which Ms. Breslow serves as trustee, and
with respect to which she disclaims beneficial ownership. See note 9.
(9) Marilyn G. Breslow disclaims beneficial ownership of the shares owned by
the trusts for the benefit of her adult family members. See note 8.
(10) After the offerings, Robert E. Burke will continue to own 0.03% of WPS II,
Inc.
(11) After the offerings, Mr. and Mrs. Casey will continue to own 0.02% of WPS
II, Inc.
(12) After the offerings, Sandra Coleman will continue to own 0.05% of WPS II,
Inc.
(13) In 1998, W.P. Stewart & Co., Ltd. acquired three funds from an affiliate of
Europa International Ltd. which is principally owned by a son of a director
and executive officer of W.P. Stewart & Co., Ltd. See "Certain
Relationships and Related Transactions".
(14) After the offerings, Alexander M. Farman-Farmaian will continue to own
0.61% of WPS II, Inc.

52
<PAGE> 56

(15) After the offerings, John Ferrer will continue to own 0.15% of WPS II, Inc.
(16) Robert D. Rosenthal, an executive officer of W.P. Stewart & Co., Ltd. and a
director and executive officer of certain affiliates, is a principal
shareholder and the chief executive officer of First Long Island Investors
LLC. Ryan Melkonian and other officers of certain affiliates are
shareholders of First Long Island Investors LLC. See note 36.
(17) After the offerings, Christine A. Fowler will continue to own 0.10% of WPS
II, Inc.
(18) After the offerings, Joseph S. Frelinghuysen, Jr. will continue to own
1.23% of WPS II, Inc.
(19) After the offerings, Michael J. Gillen will continue to own 0.26% of WPS
II, Inc.

(20) C. Graydon Rogers, the donor of the foundation, disclaims beneficial
ownership of the shares owned by the foundation. Mr. Rogers is a
shareholder of WPS II, Inc. and a former officer and director of an
affiliate of W.P. Stewart & Co., Ltd. and its predecessor.

(21) After the offerings, Patricia A. Ingenito will continue to own 0.27% of WPS
II, Inc.

(22) Excludes shares of W.P. Stewart & Co., Ltd. directly owned by Peter H.
Jennison. After the offerings, the trust will continue to own 0.62% of WPS
II, Inc. (excluding shares of WPS II, Inc. directly owned by Peter H.
Jennison). See note 23.

(23) After the offerings, the trust will continue to own 0.62% of WPS II, Inc.
Peter H. Jennison disclaims beneficial ownership of the shares owned by the
trust. See note 22.

(24) Excludes shares owned by (a) a trust for the benefit of Peter H. Jennison
and (b) by trusts for which Peter H. Jennison serves as trustee and with
respect to which he disclaims beneficial ownership. After the offerings,
Peter H. Jennison will continue to own 0.08% of WPS II, Inc. See notes 22
and 23.

(25) After the offerings, Philip D. Jennison will continue to own 2.90% of WPS
II, Inc.

(26) After the offerings, the trust will continue to own 0.86% of WPS II, Inc.

(27) After the offerings, Richard O. Kahn will continue to own 0.60% of WPS II,
Inc.

(28) After the offerings, Robert L. Kahn will continue to own 9.15% of WPS II,
Inc.

(29) After the offerings, Stephen A. Kahn will continue to own 0.60% of WPS II,
Inc.

(30) Executive officer of W.P. Stewart & Co., Ltd.

(31) After the offerings, Carolann F. Marshall will continue to own 0.23% of WPS
II, Inc.

(32) After the offerings, Stephen E. Memishian will continue to own 3.34% of WPS
II, Inc.

(33) After the offerings, the trust will continue to own 1.07% of WPS II, Inc.

(34) After the offerings, Robert L. Rohn will continue to own 2.52% of WPS II,
Inc.

(35) After the offerings, the trust will continue to own 0.41% of WPS II, Inc.

(36) After the offerings, Robert D. Rosenthal will continue to own 0.14% of WPS
II, Inc. See note 16.

(37) John C. Russell also serves as a director of W.P. Stewart & Co., Ltd. After
the offerings, John C. Russell will continue to own 0.71% of WPS II, Inc.

(38) After the offerings, Robert L. Schwartz will continue to own 10.79% of WPS
II, Inc.

(39) After the offerings, Harry W. Segalas will continue to own 2.52% of WPS II,
Inc.

(40) After the offerings, Barbara A. Shelley will continue to own 0.27% of WPS
II, Inc.

(41) After the offerings, Daniel B. Strickberger will continue to own 4.0% of
WPS II, Inc.

(42) W.P. Stewart & Co., Ltd. has agreed in principle to acquire 75% of TPR &
Partners N.V. TPR & Partners N.V. is the majority owner of the 50% of TPRS
Services N.V. we do not already own and which we have agreed in principle
to acquire. As previously disclosed, we expect these transactions to be
completed prior to December 31, 2000. See note 46.

(43) TPR Curacao N.V. is the owner, together with TPR & Partners N.V., of the
50% of TPRS Services N.V. that we do not already own and which we have
agreed in principle to acquire. As previously disclosed, we expect this
transaction to be completed prior to December 31, 2000. See note 42.

53
<PAGE> 57

(44) After the offerings, Debra S. Valenti will continue to own 0.09% of WPS II,
Inc.

(45) Includes shares owned by (a) trusts for which William P. Stewart, the
Chairman and Executive Officer of W.P. Stewart & Co., Ltd. serves as
trustee (with respect to which Mr. Stewart disclaims beneficial ownership),
and (b) executive officers and a director which are disclosed individually
above. After the offerings, (x) trusts for which Mr. Stewart serves as
trustee will continue to own 39.48% of WPS II, Inc. and 8.75% of W.P.
Stewart & Co., Ltd. (with respect to which shares Mr. Stewart disclaims
beneficial ownership) and (y) directors and officers of W.P. Stewart & Co.,
Ltd. as a group will continue to own 40.33% of WPS II, Inc. (including
shares owned by those trusts). See note 1.

As of the date this table was prepared, 62.0% of the common shares were
owned by WPS II, Inc. which has the power to control W.P. Stewart & Co., Ltd.
After the offerings, 45.3% of the common shares will be owned by WPS II, Inc.,
which may constitute the power to control W.P. Stewart & Co., Ltd. Some
shareholders of WPS II, Inc. also own our common shares directly and,
collectively with WPS II, Inc., would have the power to control W.P. Stewart &
Co., Ltd. The only assets of WPS II, Inc. are, and its only business is holding,
common shares of W.P. Stewart & Co., Ltd. WPS II, Inc. is a privately held
company. All shareholders of WPS II, Inc. are current or former employees or
directors of the Stewart Group, members of their families or trusts for members
of their families (including trusts for which William P. Stewart, the Chairman
and Chief Executive Officer of W.P. Stewart & Co., Ltd. serves as Trustee, which
will continue to own approximately 39.5% of WPS II, Inc. after the offerings).
All shareholders of WPS II, Inc. vote on all matters submitted to shareholders
on a ratable basis in accordance with their respective ownership interests in
WPS II, Inc. Following the 540-day "lock-up" period agreed to with the
underwriters, pursuant to agreements entered into with WPS II, Inc., each
shareholder of WPS II, Inc. will be able to receive from WPS II, Inc. its pro
rata amount (based upon its percentage ownership of WPS II, Inc.) of the shares
of W.P. Stewart & Co., Ltd. held by WPS II, Inc. except for 7,000,000 of our
common shares which WPS II, Inc. must retain for the longer of three years or
until the expiration of its tax indemnity obligation to us. See "Underwriting"
and "Certain Relationships and Related Transactions".

We are not aware of any arrangements, the operation of which may at a
subsequent date result in a change in control of W.P. Stewart & Co., Ltd.

54
<PAGE> 58

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In connection with purchases of shares of stock of W.P. Stewart & Co., Ltd.
and its predecessors, since at least 1991, our employees, including our officers
and directors, have entered into loan agreements with, and signed promissory
notes to us in respect of some or all of the purchase price of such stock. Most
of our employees are or have been parties to such loans. In connection with such
stock purchases, Messrs. Russell, Breeden, Smith, Henderson, Ryan, Macri and
Target have entered into loan agreements with, and signed promissory notes to,
the Stewart Group. Each of these loans accrues interest at a rate of 10% per
annum. As of September 30, 2000, the aggregate amount outstanding under these
loan agreements and promissory notes for each of the above-named directors and
executive officers were, respectively: $3,019,172, $46,754, $46,754, $830,000,
$873,476, $873,476 and $692,143. The largest aggregate amount of indebtedness
outstanding under each of these loan agreements and promissory notes during the
last three years for each of the above-named directors and executive officers
were, respectively: $3,704,922, $68,900, $68,900, $1,439,000, $1,079,000,
$1,079,000 and $843,750. In addition, in connection with the acquisition by W.P.
Stewart & Co., Ltd. of TPRS Services N.V., the sellers signed a promissory note
to W.P. Stewart Asset Management Ltd. in the amount of $2,750,000. The note,
which accrues interest at the rate of 6.625% per annum, is secured by the W.P.
Stewart & Co., Ltd. common shares received in the acquisition. The remaining
outstanding balance of the note as of September 30, 2000 is $1,375,000.

The lease agreement relating to W.P. Stewart & Co., Inc.'s office space in
New York includes space utilized by family members of Mr. William P. Stewart.
Mr. Stewart reimburses W.P. Stewart & Co., Inc., on a monthly basis, for that
portion of the rental and other costs associated with the space utilized by such
family members. Such lease-related amounts were approximately $17,500 in 1997,
$237,000 in 1998, $257,400 in 1999, and $148,000 for the nine months ended
September 30, 2000. We believe that the reimbursement amounts that we receive
from Mr. Stewart for the utilization of this space are as favorable as the
amounts we could receive from an unaffiliated party for utilization of the same
space.

W.P. Stewart & Co., Ltd. owns 40% of Bowen Asia Limited. Ms. Lisa M.
Stewart, the daughter of Mr. William P. Stewart, and Mr. Charles G.R. Target,
Ms. Stewart's husband and a Deputy Managing Director of W.P. Stewart & Co.,
Ltd., together own a majority of the stock of Bowen Asia Limited. We have been
granted an option exercisable in 2004 to expand our ownership of Bowen Asia
Limited to a majority interest. In addition to payments in connection with our
investment in Bowen Asia Limited, we pay solicitation, sub-advisory and research
fees to Bowen Asia Limited. Such fees were, in the aggregate, $387,957,
$491,000, $218,000 and $483,000, for the nine months ended September 30, 2000,
and for the years ended December 31, 1999, 1998, and 1997, respectively. We
believe that the solicitation, sub-advisory and research fees that we pay to
Bowen Asia Limited are as favorable as the fees we would pay to an unaffiliated
party for similar services. We have entered into an agreement with Bowen Capital
Management, an affiliate of Bowen Asia Limited, which will entitle us to receive
solicitation fees for client referrals to Bowen Capital Management. We have not
yet received any fees under the terms of this agreement.

During the period from 1996 until April 30, 1999, we were a party to an
Aviation Services Agreement with Shamrock Aviation, Inc. pursuant to which
Shamrock Aviation, Inc. provided us with use of airplanes owned by it at a fee
in the amount of approximately $175,000 per month. Since April 30, 1999, we have
continued to use one airplane owned by Shamrock Aviation, Inc. and have
compensated Shamrock Aviation, Inc. for its use by paying charter fees that we
believe are more favorable to the Stewart Group than the fees that would be paid
to an unaffiliated charterer. Shamrock Aviation, Inc. is owned by Mr. William P.
Stewart and trusts for the benefit of the four adult children of Mr. Stewart;
Mr. Stewart serves as President, and Mr. Gregory S. Stewart, his son, serves as
Vice President, of Shamrock Aviation, Inc. We paid fees to Shamrock Aviation,
Inc. in the amount of $1,724,000, $3,352,700, $2,747,000 and $2,308,000 for the
nine

55
<PAGE> 59

months ended September 30, 2000 and for the years ended December 31, 1999, 1998
and 1997, respectively. In February 1999, we entered into an agreement with
Shamrock Aviation, Inc. in which Shamrock Aviation, Inc. has agreed that it will
delay the sale of an airplane owned by Shamrock Aviation, Inc. so that such
airplane will continue to be available for use in our business. At the same
time, Shamrock Aviation, Inc. agreed to release W.P. Stewart & Co., Inc. from
any and all obligations to participate in the purchase of an additional airplane
for approximately $37 million, delivery of which is scheduled for early 2001. In
return, we have agreed to indemnify Shamrock Aviation, Inc. for any loss in
value of the airplane that Shamrock Aviation, Inc. has agreed not to sell during
the period from the time the agreement was made until that airplane is sold or
replaced (which is currently expected to occur in 2001). The value of that
Shamrock Aviation, Inc. airplane as of the date of its agreement with us is
estimated to be $27 million. As of November 15, 2000, the estimated value of the
airplane was $27 million.

In 1998, Shamrock Aviation, Inc. assigned to WPS Aviation Holdings, LLC, a
limited liability company wholly-owned by the Stewart Group, all of Shamrock
Aviation, Inc.'s interest in an agreement to purchase a Challenger 604 aircraft.
Prior to its assignment of the agreement to WPS Aviation Holdings, LLC, Shamrock
Aviation, Inc. had made progress payments aggregating $6.7 million pursuant to
such agreement. As consideration for such assignment to WPS Aviation Holdings,
LLC, we released Shamrock Aviation, Inc. from its obligation to repay
indebtedness to us in the amount of $6.7 million representing amounts we
advanced to Shamrock Aviation, Inc. that were paid by Shamrock Aviation, Inc. as
progress payments under such purchase agreement. As a result of such
forgiveness, the amount which we were required to pay for the airplane was
reduced by the amount of such progress payments. The total purchase price for
such aircraft was approximately $22.5 million. W.P. Stewart & Co., Ltd. and W.P.
Stewart & Co., Inc. are co-guarantors of WPS Aviation Holdings, LLC's financing
for such purchase.

The Company has entered into an agreement pursuant to which an entity
affiliated with Shamrock Aviation, Inc. provides operational and maintenance
services at cost for that Challenger aircraft. Total fees amounted to $1,628,000
and $1,683,900 for the nine months ended September 30, 2000 and for the year
ended December 31, 1999, respectively. We believe that the terms of this
transaction are more favorable to us than the terms that we could obtain from an
unaffiliated party in a comparable transaction.

Prior to 1998, the Stewart Group paid to Europa Securities, Inc., a
broker-dealer principally owned by Mr. Jeffrey R. Stewart, a son of Mr. William
P. Stewart, fees in respect of securities trading services and solicitation of
new accounts. Such fees were, in the aggregate, $209,542 in 1997. In addition,
the Stewart Group paid solicitation fees to Europa Funds Limited, a fund
umbrella company principally owned by Mr. Jeffrey Stewart, from the fee received
by the Stewart Group for its services as investment adviser to one of Europa
Funds Limited's funds. The Stewart Group paid such fees in the amount of $34,925
and $27,070 in 1998 and 1997, respectively. As consideration for the acquisition
by the Stewart Group of three Europa Funds Limited funds in 1998, including the
fund referred to above, the Stewart Group issued 67,952 shares of stock to
Europa International Ltd., an affiliate of Europa Funds Limited, as of January
1, 1999. We believe that the fees that we paid to Europa Securities, Inc. and
Europa Funds Limited were as favorable as the fees we would have paid to an
unaffiliated party for the provision of similar services.

W.P. Stewart Fund Management Limited serves as the investment manager to an
Irish fund solely managed by WPS Investissements S.A., a Swiss investment
management firm. WPS Investissements S.A. is principally owned by Mr. William P.
Stewart III, one of Mr. William P. Stewart's sons. The Stewart Group has no
ownership interest in either the Irish fund or WPS Investissements S.A. W.P.
Stewart Fund Management Limited collects and remits to WPS Investissements S.A.
all of the advisory fees in respect of such fund. In addition, we pay to WPS
Investissements S.A. a portion of the brokerage commissions earned by us from
securities transactions for such fund. Such fees and commissions amounted to
$324,982, $1,243,500,

56
<PAGE> 60

$558,726 and $13,476 for the nine months ended September 30, 2000 and for the
years ended December 31, 1999, 1998 and 1997, respectively. We believe that the
fees and commissions that we pay to WPS Investissements S.A. are as favorable as
the fees and commissions we would pay to an unaffiliated party in a similar
transaction.

W.P. Stewart & Co., Ltd. believes, upon advice of Nixon Peabody LLP,
special tax counsel, that at the time of our merger with our U.S. predecessor
company, WPS II, Inc. qualified as an S corporation and our U.S. predecessor
company qualified as a "qualified subchapter S subsidiary" for U.S. federal
income tax purposes and that, accordingly, W.P. Stewart & Co., Ltd. incurred no
U.S. tax liability as a result of the Bermuda merger. Notwithstanding such
belief, WPS II, Inc. has agreed to indemnify W.P. Stewart & Co., Ltd. for any
harm suffered by W.P. Stewart & Co., Ltd. arising from any U.S. tax liability
imposed upon W.P. Stewart & Co., Ltd. as a result of our merger with our U.S.
predecessor company. In addition, certain stockholders of WPS II, Inc. have
agreed to severally guarantee their proportionate shares of the indemnity
obligation of WPS II, Inc. based on their interests in WPS II, Inc. at the time
of the merger, representing an aggregate of approximately 92% of the amount
which may be payable by WPS II, Inc. under the indemnity.

The Company has accrued a contribution of approximately $484,000 for the
year ended December 31, 1999, which was paid on March 15, 2000, and contributed
$1.7 million on December 31, 1998 to the W.P. Stewart & Co. Foundation, Inc.
(the "Foundation"), a private charitable foundation incorporated on December 7,
1998. The Foundation makes charitable grants at the discretion of a committee
appointed by the Foundation's board from members of the board of directors of
W.P. Stewart & Co., Inc. and W.P. Stewart & Co., Ltd. This committee has been
created to monitor and direct the Company's charitable activities.

The Company pays TPRS fees for marketing services. These fees amounted to
approximately $3,967,521 and $1,840,000 for the nine months ended September 30,
2000 and for the year ended December 31, 1999. Inter-company eliminations of
approximately $1,983,760 and $920,000 resulting from the Company's 50% ownership
in TPRS result in a net expense to the Company of $1,554,000 and $920,000 for
the nine months ended September 30, 2000 and for the year ended December 31,
1999.

57
<PAGE> 61

DESCRIPTION OF CAPITAL STOCK

The authorized share capital of W.P. Stewart & Co., Ltd. consists of
125,000,000 common shares. As of the date of this prospectus, there are
47,319,618 common shares outstanding and with the exception of common shares to
be issued to employees of the Stewart Group in the ordinary course of our
business, such number will remain unchanged upon completion of the offerings.
Set forth below is a description of the common shares, including summaries of
material relevant provisions of W.P. Stewart & Co., Ltd.'s memorandum of
association, bye-laws and the Companies Act 1981 of Bermuda. These summaries do
not purport to be complete and are qualified in their entirety by reference to
the full memorandum of association and bye-laws which have been filed as
exhibits to the Registration Statement of which this prospectus forms a part and
to the Companies Act 1981.

GENERAL

As of the date of this prospectus, all the issued common shares are validly
issued, fully paid and non-assessable. Authorized but unissued common shares may
be issued at any time and at the discretion of the board of directors without
the approval of the shareholders of W.P. Stewart & Co., Ltd. The common shares
offered pursuant to this prospectus will be represented by certificates. The
common shares are issued in registered form. The shareholders are not entitled
to any preemptive, sinking fund or redemption rights.

VOTING RIGHTS

Subject to the provisions set forth below and any other special rights or
restrictions as to voting for the time being attached to any class of shares by
or in accordance with the bye-laws, at any general meeting on a poll, every
shareholder who is present in person or by proxy shall have one vote for every
common share of which such person is the holder. Most matters to be approved by
holders of common shares require approval by a simple majority vote of the
common shares represented at the shareholders' meeting. A resolution passed by
the holders of a majority of the issued common shares voting either in person or
by proxy at a general meeting is required to approve a merger or amalgamation
with another company. Shareholders do not have cumulative voting rights.
Shareholders have the power to elect directors, appoint auditors and make
changes in the amount of authorized share capital of W.P. Stewart & Co., Ltd.
Any change in the rights relating to the common shares requires the adoption of
a resolution by the holders of a majority of the common shares at a duly held
meeting of the shareholders of W.P. Stewart & Co., Ltd. or, if by written
consent, the consent of the holders of not less than 75% of the common shares.
Voting at any meeting of shareholders is by a poll.

The quorum required for a meeting of shareholders consists of at least two
shareholders present in person or by proxy representing not less than one-third
in nominal value of the total issued common shares. Shareholders' meetings are
convened upon advance notice of at least 14 days.

Our bye-laws limit the voting power of natural persons to 5% of all votes
attributable to outstanding shares (including the common shares) and the voting
power of entities, groups and persons, other than natural persons, to 9.5% of
the votes attributable to our outstanding shares. These limitations apply
regardless of how many of our shares are actually owned or controlled by a
shareholder. For purposes of applying this restriction, our bye-laws provide
that a person, entity or group shall be deemed to own:

- all shares which such person is deemed to constructively own directly or
indirectly pursuant to rules defining a controlled foreign corporation
under the Internal Revenue Code, see "Certain Income Tax
Considerations -- United States -- Taxation of Holders"; and

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- all shares which such person is deemed to beneficially own directly or
indirectly (other than ownership attributable to WPS II, Inc.) as a
result of the possession of sole or shared voting power within the
meaning of Section 13(d)(3) of the Exchange Act and the rules and
regulations promulgated thereunder.

Our bye-laws provide that the votes that could have been cast by
shareholders who are subject to these voting restrictions will be allocated to
the other shareholders pro rata, based on their share ownership and voting power
pursuant to a formula specified in our bye-laws. However, no shareholder will be
allocated any additional voting rights to the extent that the allocation of such
additional voting rights to that shareholder will cause the total voting power
of that shareholder to exceed 5%, in the case of a natural person, or 9.5%, in
the case of an entity, group or person other than a natural person. These
restrictions do not, however, apply to:

- WPS II, Inc.;

- Other shareholders or groups of shareholders who were shareholders of
W.P. Stewart & Co., Ltd. immediately before the offerings; and

- Additional persons, entities or groups that are designated by our board
of directors either before or after the offerings.

These voting limitations were put in place to reduce the likelihood that W.P.
Stewart & Co., Ltd. could become a controlled foreign corporation under the
Internal Revenue Code for U.S. tax purposes.

Our bye-laws also limit the voting power of all persons, entities or groups
to 20% of the total number of all votes attributable to our outstanding shares
(including the common shares). These limitations apply regardless of how many
shares of our capital stock are already owned or controlled by a shareholder and
regardless of whether the voting restrictions described in the previous
paragraph apply to that shareholder. These restrictions, however, will not apply
to:

- WPS II, Inc. or its affiliates;

- Direct or indirect subsidiaries at W.P. Stewart & Co. Ltd.;

- New or existing employee benefit plans of W.P. Stewart & Co., Ltd., as
may be designated by our board of directors either before or after the
offerings; and

- Other persons, entities or groups that are designated by our board of
directors either before or after the offerings.

This voting limitation is in place to reduce the likelihood, under certain
circumstances, of inadvertent terminations of the Stewart Group's advisory
agreements as a result of deemed "assignments" of such contracts under the
Advisers Act. See "Risk Factors -- Our Bye-Laws Restrict Shareholders' Voting
Rights" and "-- A Change of Control of the Stewart Group Would Give Our Clients
the Right to Terminate Their Investment Advisory Agreements with Us".

DIVIDENDS

The holders of our common shares are entitled to receive on a pro rata
basis such dividends when, as and if declared by our board of directors.
Dividends may be paid only in accordance with the Companies Act 1981 of Bermuda
which provides that dividends and other distributions to shareholders may not be
paid if there are reasonable grounds for believing that:

- W.P. Stewart & Co., Ltd. is, or would after the dividend payment be,
unable to pay its liabilities as they become due; or

- the realizable value of W.P. Stewart & Co., Ltd.'s assets after such
payment would be less than the aggregate of its liabilities and its
issued share capital and share premium accounts.

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W.P. Stewart & Co., Ltd.'s ability to declare dividends on the common shares may
also be limited by regulatory restrictions derived from the net capital rules of
various regulatory bodies applicable to W.P. Stewart & Co., Ltd. and its
subsidiaries. Rights to dividends and distributions that have not been claimed
within six years after the date on which they were declared revert to W.P.
Stewart & Co., Ltd.

WINDING UP

If W.P. Stewart & Co., Ltd. is wound up, the liquidator may, with the
sanction of a resolution of shareholders, divide among the shareholders in kind
the whole or any part of our assets and may, with the like sanction, vest the
whole or any part of the assets in trustees upon such trusts for the benefit of
the shareholders as the liquidator thinks fit, provided that a shareholder shall
not be compelled to accept any securities or other assets which would subject
such shareholder to liability.

MISCELLANEOUS

Common shares registered in the names of two or more persons may be
delivered to any one of them named in the share register, and if two or more
such persons tender a vote, the votes of the person whose name first appears in
the share register will be accepted to the exclusion of any other. All notices
to joint shareholders and, save as otherwise directed by the joint holders of
common shares, all checks or warrants for dividend payments, will be sent to the
joint holder whose name stands first in the register of members. Under Bermuda
law and our memorandum of association and bye-laws, shareholders do not have
preemptive rights.

Our principal transfer agent and registrar in Bermuda will be The Bank of
Bermuda Limited and our U.S. transfer agent and registrar for the common shares
will be EquiServe. The Bank of Bermuda Limited will act as transfer agent and
registrar for transfers outside the U.S. and EquiServe, which is registered with
the SEC, will act as transfer agent and registrar for transfers within the U.S.

LISTING

We expect that on or prior to the consummation of the offerings, the common
shares will be admitted for trading on the New York Stock Exchange under the
symbol "WPL", and, by way of secondary listing, on the Bermuda Stock Exchange
under the symbol "WPS", subject, in each case, to official notice of issuance.
Prior to the offerings, there was no public market for the common shares.

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CERTAIN INCOME TAX CONSIDERATIONS

GENERAL

The following summary describes the principal tax consequences under U.S.
federal income tax law and the laws of Bermuda and the United Kingdom of our
operations (whether directly or indirectly through our U.S. and non-U.S.
subsidiaries) and of the purchase, ownership and disposition of the common
shares, but does not purport to be a comprehensive description of all the tax
considerations that may be relevant to your decision to purchase the common
shares. In addition, except where otherwise noted, this summary does not
describe any tax consequences arising under the law of any State, locality or
taxing jurisdiction other than Bermuda, the United Kingdom or the U.S. federal
government.

Our income is not subject to tax in Bermuda, which currently has no
corporate income tax. We pay income tax in the United States and the United
Kingdom on a portion of our income, as described below. As a consequence, the
overall effective tax rate on our earnings was 10.7% for 1998 and 8.2% for 1999.
We believe that the overall tax rate will not exceed 10% for 2000. The
discussion below is based upon the nature and conduct of our business, which may
change, and upon our understanding of our position under the tax laws of the
various countries in which we have assets or conduct activities, which position
is subject to review and possible challenge by taxing authorities and to
possible changes in law (which may have retroactive effect).

BERMUDA

TAXATION OF THE STEWART GROUP AND HOLDERS

Under current Bermuda law, W.P. Stewart & Co., Ltd. is not subject to tax
in Bermuda on income or capital gains. Furthermore, we have obtained from the
Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection
Act 1966 (as amended), an undertaking that, in the event that Bermuda enacts any
legislation imposing tax computed on profits, income, any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, then
the imposition of such tax will not be applicable to us or to any of our
operations, or the shares, debentures or other obligations of W.P. Stewart &
Co., Ltd., until March 28, 2016. This undertaking does not, however, prevent the
imposition of property taxes on any company owning real property or leasehold
interests in Bermuda. Under current Bermuda law, no income, withholding or other
taxes or stamp or other duties are imposed upon the issue, transfer or sale of
the common shares or on any payments thereunder.

UNITED STATES

This summary is based on the Internal Revenue Code, Treasury regulations
and rulings promulgated thereunder and judicial decisions in effect or available
on the date of this prospectus. All of the foregoing are subject to change with
or without retroactive effect, which could affect the continued accuracy of this
summary. No advance rulings have been or will be sought from the IRS regarding
the matters discussed in this prospectus. Accordingly, you are urged to consult
your tax adviser to determine the U.S. federal, state, local and foreign income
and other tax consequences to you of acquiring, holding and disposing of common
shares.

TAXATION OF THE STEWART GROUP

In general, W.P. Stewart & Co., Ltd. and its non-U.S. subsidiaries,
including W.P. Stewart Asset Management Ltd., our Bermuda-based investment
adviser subsidiary, are subject to federal income taxation by the United States
only to the extent their income is "effectively connected with the conduct of a
trade or business in the United States". U.S. source services income, determined
on the basis of where the services are performed, is effectively connected

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with the conduct of a U.S. business and therefore fully subject to U.S. income
tax at regular corporate tax rates.

W.P. Stewart & Co., Inc. is subject to U.S. federal, state and local income
tax on its income. Under Section 482 of the Internal Revenue Code, the IRS may
apportion or allocate income and deductions among W.P. Stewart & Co., Inc. and
the non-U.S. corporations in the Stewart Group to the extent "necessary in order
to prevent evasion of taxes or clearly reflect the income" of such corporations.
Treasury regulations provide that the general rule for establishing prices for
services provided by a member of a commonly controlled group shall be "an arm's
length charge" equal to "the amount which was charged or would have been charged
for the same or similar services in independent transactions with or between
unrelated parties under similar circumstances considering all the relevant
facts". There are various possible methodologies that may be employed to
determine an appropriate arm's length charge.

W.P. Stewart & Co., Inc. pays U.S. income tax on its taxable income,
consisting of fees received from W.P. Stewart & Co., Ltd. and W.P. Stewart Asset
Management Ltd. for sub-advisory and research services less applicable expenses.
W.P. Stewart Asset Management (NA), Inc. and its subsidiaries pay U.S. income
tax on their net solicitation fee income. W.P. Stewart & Co., Ltd. and W.P.
Stewart Asset Management Ltd. have paid U.S. income tax on the approximately 5%
of their combined earnings for 1998 and 1999, and expect to pay U.S. income tax
on the approximately 10% of their combined earnings for 2000 (as computed under
U.S. GAAP), in each case which are, or are expected to be, derived from
activities directly carried on in the United States. No portion of the income of
W.P. Stewart Securities Limited, W.P. Stewart & Co. (Europe), Ltd., NS Money
Management Ltd. or TPRS Services N.V. should be subject to U.S. income tax.

The IRS, New York State and/or New York City may disagree with the Stewart
Group's positions and assert that:

- the fees paid to W.P. Stewart & Co., Inc. (50 basis points on accounts
for which W.P. Stewart & Co., Inc. provides subadvisory services and $1.2
million annually for research relating to other accounts) or W.P. Stewart
Asset Management (NA), Inc. and its subsidiaries understate their taxable
income; and/or

- the net income of W.P. Stewart & Co., Ltd., W.P. Stewart Asset Management
Ltd. or any of W.P. Stewart & Co., Ltd.'s other non-U.S. subsidiaries
from business that they carry on directly in the United States represents
more than the amount reported on their U.S. income tax returns.

We believe that the fees to be paid by W.P. Stewart & Co., Ltd. and W.P.
Stewart Asset Management Ltd. to W.P. Stewart & Co., Inc. and W.P. Stewart Asset
Management(NA), Inc. and its subsidiaries satisfy the arm's length standard of
the treasury regulations. As noted above, however, the IRS or other U.S. taxing
authorities may challenge these positions and attempt to allocate some of W.P.
Stewart & Co., Ltd.'s or W.P. Stewart Asset Management Ltd.'s investment
advisory income to W.P. Stewart & Co., Inc. or increase the solicitation fee
income of W.P. Stewart Asset Management(NA), Inc. and its subsidiaries. There
can be no assurance that such a challenge would not be successful. If
successful, such a challenge could materially increase the U.S. income tax
liability of W.P. Stewart & Co., Inc. and W.P. Stewart Asset Management(NA),
Inc. and its subsidiaries.

In addition, the IRS or other U.S. taxing authorities may contend that the
net income of W.P. Stewart & Co., Ltd., W.P. Stewart Asset Management Ltd. or
its other non-U.S. subsidiaries from business that they carry on (or are treated
by such taxing authorities as carrying on) directly in the United States
represents more than the amount reported by W.P. Stewart & Co.,

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Ltd., W.P. Stewart Asset Management Ltd. or such subsidiaries on their U.S.
income tax returns. Such a contention may be based upon:

- the nature of W.P. Stewart & Co., Inc.'s activities;

- the nature and extent of activities in the United States of employees or
agents of W.P. Stewart & Co., Ltd., W.P. Stewart Asset Management Ltd. or
its other non-U.S. subsidiaries; or

- the treatment of W.P. Stewart & Co., Inc. and/or W.P. Stewart Asset
Management(NA), Inc. and its subsidiaries as an agent of W.P. Stewart &
Co., Ltd. or W.P. Stewart Asset Management Ltd. for purposes of
determining whether and the extent to which W.P. Stewart & Co., Ltd. or
W.P. Stewart Asset Management Ltd. is engaged in business in the United
States.

While we believe that existing authorities support our position on these
matters, there can be no assurance that we will be successful in the event of an
IRS challenge to our positions. If successful such a challenge could materially
increase the U.S. tax liability of W.P. Stewart & Co., Ltd., W.P. Stewart Asset
Management Ltd. and/or W.P. Stewart & Co., Ltd.'s other non-U.S. subsidiaries.

Any additional net income attributed to W.P. Stewart & Co., Inc., W.P.
Stewart Asset Management(NA), Inc. and its subsidiaries or to the
directly-conducted U.S. business of W.P. Stewart & Co., Ltd., W.P. Stewart Asset
Management Ltd. or any other non-U.S. subsidiary would be subject to U.S. taxes,
including state and local taxes, at a current combined rate (including a 30%
withholding tax imposed on additional net after tax income attributed to W.P.
Stewart & Co., Inc. or W.P. Stewart Asset Management(NA), Inc. and its
subsidiaries and a 30% "branch profits" tax on additional net after tax income
attributed to the directly-conducted U.S. business of W.P. Stewart & Co., Ltd.,
W.P. Stewart Asset Management Ltd. or W.P. Stewart & Co., Ltd.'s non-U.S.
subsidiaries) of up to 62.62%.

TAXATION OF HOLDERS

U.S. HOLDERS. As used in this section, the term "U.S. person" means for
U.S. federal income tax purposes:

- a citizen or resident of the United States or any political subdivision
thereof;

- a corporation or partnership created or organized in the United States or
under the laws of the United States or of any State; or

- an estate or trust the income of which is subject to U.S. federal income
taxation regardless of its source.

The term "U.S. holder" means a person, a holder or a beneficial owner of common
shares who is a U.S. person. A "non-U.S. holder" is any holder who is not a U.S.
holder.

In general, U.S. holders will include dividends in income, in accordance
with their method of accounting, as ordinary income. Assuming the common shares
are held as a capital asset, gain or loss on a subsequent sale or other taxable
disposition of the stock will be a capital gain or loss, which will be long term
if such stock is held for more than one year. At least a portion of any dividend
will constitute foreign source dividend income, which may be relevant for a U.S.
holder's foreign tax credit limit computation.

PASSIVE FOREIGN INVESTMENT COMPANY RULES. W.P. Stewart & Co., Ltd., based
on the nature of its assets and income, does not believe it should currently be
classified as a "passive foreign investment company" (as defined below).
However, it is possible, though W.P. Stewart & Co., Ltd. believes it unlikely,
that W.P. Stewart & Co., Ltd. could be classified as a passive foreign
investment company in the future.

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A foreign corporation will be treated as a passive foreign investment
company if either 75% or more of its gross income is "passive income" or at
least 50% of the average percentage of its assets are assets which produce or
are held for the production of "passive income" (hereinafter "passive assets").
"Passive income" is generally defined as any income included in the definition
of "foreign personal holding company income" under Section 954(c) of the
Internal Revenue Code. Among these items are income consisting of:

- dividends, interest, rent, royalties; and

- gains and losses from the sale of property giving rise to the income
described in the preceding item, as well as other types of income not
here relevant.

For these purposes, cash held by a foreign corporation generally constitutes a
passive asset, but trade or service receivables resulting from a business which
produces non-passive income does not. Intangibles that produce identifiable
types of income (including goodwill) are similarly characterized in terms of the
type of income they produce. A foreign corporation owning at least 25% by value
of the stock of another corporation is treated, for purposes of passive foreign
investment company classification, as if it held its proportionate share of such
corporate assets and received directly its proportional share of such
corporation's income.

If a foreign corporation constitutes a passive foreign investment company,
any U.S. person holding any amount of stock in such corporation will generally
be subject to an interest charge on "excess distributions" of the passive
foreign investment company. Alternatively, such U.S. person may elect to be
taxed currently on its share of passive foreign investment company income by
being treated as receiving a distribution of its pro rata share of the passive
foreign investment company earnings and profits. A U.S. person may also make a
"mark-to-market" election with respect to "marketable" passive foreign
investment company stock to recognize (at the close of each taxable year) any
excess of the fair market value of such stock over its adjusted basis as
ordinary income and any excess of the adjusted basis of such stock over its fair
market value as ordinary loss.

CONTROLLED FOREIGN CORPORATION RULES. Our bye-laws contain provisions
which attempt to prevent us from becoming a "controlled foreign corporation".
Specifically, the provisions restrict the voting rights associated with voting
stock in the case of any shareholder who acquires sufficient stock to become a
U.S. Shareholder (as defined below) if the effect of such acquisition would be
to cause us to become a controlled foreign corporation. In any event, the
controlled foreign corporation rules will not apply to a U.S. holder that never
owns 10% or more of the common shares.

In general, a foreign corporation will constitute a controlled foreign
corporation if more than 50% of the shares of the corporation, measured by
reference to combined voting power or value, is held, directly or indirectly, by
"U.S. Shareholders". A "U.S. Shareholder", for this purpose, is any person that
is a U.S. person for U.S. federal income tax purposes that possesses 10% or more
of the combined voting power of all classes of shares of a corporation. After
the offerings, neither W.P. Stewart & Co., Ltd. nor any of its foreign
affiliates will be a controlled foreign corporation.

If W.P. Stewart & Co., Ltd. (or any foreign affiliate) were in the future
to constitute a controlled foreign corporation, a U.S. Shareholder of W.P.
Stewart & Co., Ltd. would be treated, subject to certain exceptions, as
receiving a dividend at the end of our taxable year in an amount equal to that
person's pro rata share of the "subpart F income" and certain U.S. source income
of W.P. Stewart & Co., Ltd. (or any controlled foreign corporation foreign
affiliate), whether or not distributed. Among other items, and subject to
certain exceptions, "subpart F income" includes dividends, interest, annuities,
gains from the sale of shares and securities, certain gains from commodities
transactions, certain types of insurance income and income from certain
transactions with related parties. If W.P. Stewart & Co., Ltd. (or any foreign
affiliate) were in the

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future to constitute a controlled foreign corporation, we believe only a
relatively small portion of our income would be subpart F income.

In addition, however, if a U.S. person owning 10% or more of the combined
voting power of all classes of stock entitled to vote of a controlled foreign
corporation sells or exchanges such stock, the gain recognized is treated as
ordinary dividend income (and not capital gain) to the extent of the earnings
and profits of such corporation accumulated after December 31, 1962 and during
the period(s) the stock was held by such U.S. person while such foreign
corporation was a controlled foreign corporation.

If W.P. Stewart & Co., Ltd. were treated as a controlled foreign
corporation, a U.S. Shareholder of W.P. Stewart & Co., Ltd. would be taxable on
the subpart F income of W.P. Stewart & Co., Ltd. under rules described in the
preceding paragraph and not under the passive foreign investment company rules
previously described.

BACKUP WITHHOLDING. A U.S. holder of common shares may, under certain
circumstances, be subject to "backup withholding" at the rate of 31% with
respect to dividends paid on the common shares or the proceeds of sale, exchange
or redemption of common shares unless such U.S. holder:

- is a corporation or comes within certain other exempt categories, and,
when required, demonstrates this fact; or

- provides a correct taxpayer identification number, certifies that such
holder is not subject to backup withholding and otherwise complies with
applicable requirements of the backup withholding rules.

Any amount withheld under these rules will be creditable against the U.S.
holder's U.S. federal income tax liability. A U.S. holder who does not provide a
correct taxpayer identification number may be subject to penalties imposed by
the IRS. Assuming proper shareholder information is provided, we believe that
back-up withholding will not be required.

NON-U.S. HOLDERS. Dividends paid by foreign corporations are treated as
income from U.S. sources and subject to withholding at a rate of 30% if 25% or
more of the foreign corporation's gross income for the three-year period (or
such part of the period such corporation was in existence) ending with the close
of its taxable year preceding the declaration of such dividend was effectively
connected (or treated as effectively connected) with the conduct of a U.S. trade
or business, but only in an amount that bears the same ratio to the dividend as
the gross income which is effectively connected with a U.S. trade or business
bears to the foreign corporation's gross income from all sources. The Internal
Revenue Code provides, however, that if a foreign corporation is "subject to"
the branch profits tax, then the above-described withholding tax does not apply.

Accordingly, because W.P. Stewart & Co., Ltd. and W.P. Stewart Asset
Management Ltd., if more than 25% of their gross income were deemed connected
with the United States, will be subject to the branch profits tax we do not
believe that non-U.S. holders will be subject to the 30% withholding tax.

Moreover, gains and losses on the sale or exchange of common shares
generally will not be subject to U.S. income or withholding tax unless:

- in the case of a non-U.S. holder who is an individual, such non-U.S.
holder is present in the United States for a period or periods
aggregating 183 days or more during the taxable year of disposition (in
which case such individual may be taxed as a U.S. holder in any event);
or

- any gain is effectively connected with the non-U.S. holder's trade or
business in the United States.

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The value of common shares should not be includible in the gross estate of
any individual non-U.S. holder for purposes of determining such non-U.S.
holder's liability, if any, for U.S. estate tax on non-resident alien
individuals.

UNITED KINGDOM

The following statements are intended as a general guide only to the
position under current UK legislation and Inland Revenue practice as of the date
of this document. The statements summarize certain limited aspects of the UK
taxation treatment of corporations. The statements summarize the future position
of holders of common shares who (unless express reference is made to non-UK
resident holders of common shares) will be resident or ordinarily resident in
the United Kingdom for tax purposes and who hold their common shares as an
investment. The taxation position of special classes of taxpayers such as banks,
insurance companies and collective investment schemes is not considered.

Any future holder of common shares who is in any doubt about his or her own
taxation position, or who is subject to taxation in a jurisdiction other than
the United Kingdom should consult an independent professional adviser
immediately.

TAXATION OF W.P. STEWART & CO., LTD.

In general, a corporation not resident in the United Kingdom is taxable on
its income by the United Kingdom only to the extent that such income arises from
any property in the United Kingdom or from any trade, profession or vocation
exercised within the United Kingdom.

TAXATION OF UNITED KINGDOM RESIDENT SUBSIDIARIES

In general, a corporation resident in the United Kingdom is taxable on its
profits or gains from any trade, whether carried on in the UK or elsewhere. In
general, such a United Kingdom resident corporation will pay UK corporation tax
on its taxable income, which would include any fees received for advisory and
research services, any commission income and interest income, less deductible
expenses, at a rate of 30%. W.P. Stewart & Co. (Europe), Ltd. will pay taxes in
the United Kingdom on its net income consisting of fees received from W.P.
Stewart & Co., Ltd. and W.P. Stewart Asset Management Ltd. for sub-advisory and
research services less applicable expenses.

No tax will be withheld by a UK resident company when it pays a dividend on
or after April 6, 1999. The UK resident subsidiaries of the Stewart Group will
not have to account for advance corporation tax in respect of dividends paid on
or after April 6, 1999.

TAXATION OF UNITED KINGDOM RESIDENT HOLDERS OF COMMON SHARES

An individual UK resident holder of common shares will be liable to income
tax on any dividend received from W.P. Stewart & Co., Ltd. and a UK resident
corporate holder of common shares will be liable to corporation tax on any
dividend received from W.P. Stewart & Co., Ltd.

When a dividend from W.P. Stewart & Co., Ltd. is paid or credited to an
account with a UK bank, the bank is generally required to deduct from the
dividend (and to account to the Inland Revenue for) an amount equal to the lower
rate of UK income tax (currently 20%).

In ascertaining the eventual liability to UK tax on a dividend received by
a UK resident holder of common shares, credit will be given for any UK tax
withheld from it.

UNITED KINGDOM ISSUE AND TRANSFER TAXES

No UK stamp duty or UK Stamp Duty Reserve Tax will generally be payable in
respect of the issue of common shares.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the offerings, W.P. Stewart & Co., Ltd. will have
47,319,618 common shares outstanding. Of these common shares, approximately
17,715,715 common shares (approximately 19,396,317 common shares if the
underwriters' over-allotment option is exercised in full), including the common
shares sold in the offerings, will be freely tradeable within the United States
without restriction or further registration under the Securities Act by persons
other than "affiliates" of the Stewart Group as that term is defined in Rule 144
under the Securities Act. The remaining common shares may be sold in the United
States public market only if registered or if they qualify for an exemption from
registration under the Securities Act.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned shares whose public
transferability is restricted under the Securities Act for at least one year
(including the holding period of any prior owner except an affiliate) would be
entitled to sell within any three-month period a number of shares that does not
exceed the greater of:

- 1% of the number of common shares then outstanding (which will equal
approximately 473,196 common shares immediately after the offerings); or

- the average weekly trading volume of the common shares on the New York
Stock Exchange during the four calendar weeks preceding the filing of
notice on Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain manner of sale provisions and
notice requirements and to the availability of current public information about
W.P. Stewart & Co., Ltd. and may be effected only through unsolicited brokers'
transactions. Under Rule 144(k), a person who is not deemed to have been an
affiliate of W.P. Stewart & Co., Ltd. at any time during the 90 days preceding a
sale, and who has beneficially owned the common shares proposed to be sold for
at least two years (including the holding period of any prior owner except an
affiliate), is entitled to sell such shares without complying with the manner of
sale, public information, volume limitation or notice provisions of Rule 144
under the Securities Act.

Upon completion of the offerings, approximately 76% of the outstanding
common shares (72% if the Underwriters' over-allotment option is exercised in
full) will be owned by individuals and entities who have signed a 540-day
lock-up agreement. See "Underwriting". WPS II, Inc. has additionally agreed to
retain at least 7,000,000 common shares for the longer of three years or until
the expiration of its indemnity obligation relating to tax liabilities resulting
from the merger with our U.S. predecessor. See "Certain Relationships and
Related Transactions". In addition, 2,702,942 common shares owned by our
employees and directors were unvested as of September 30, 2000 pursuant to
purchase agreements between the shareholders and the Stewart Group which
provide, among other things, that the common shares vest in equal quarterly
installments over a seven-year period and that unvested common shares may not be
transferred and under certain conditions may be repurchased by W.P. Stewart &
Co., Ltd. The Board of Directors of W.P. Stewart & Co., Ltd., in its sole
discretion, may accelerate the vesting of those common shares.

Shareholders of W.P. Stewart & Co., Ltd. who currently own or control
approximately 20% of the outstanding common shares have certain demand and
piggyback registration rights with respect to their common shares. The demand
registration rights will only be available if:

- a sufficient number of shareholders with similar rights join in the
request so that at least 15% of the outstanding common shares are to be
registered; and

- the offerings will be firm commitment underwritten offerings.

67
<PAGE> 71

CERTAIN FOREIGN ISSUER CONSIDERATIONS

W.P. Stewart & Co., Ltd. has been designated as non-resident of Bermuda for
exchange control purposes by the Bermuda Monetary Authority and is required to
obtain the permission of the Bermuda Monetary Authority for the free issue and
transferability of its shares.

The Bermuda Monetary Authority has given its consent for the transfer of
all of the common shares to be sold in the offerings for the purposes of the
proposed sale to the public, and for free transferability of all common shares
of W.P. Stewart & Co., Ltd. subsequent to such public sale, subject to the
common shares being listed on the New York Stock Exchange. Approvals or
permissions received from the Bermuda Monetary Authority do not constitute a
guarantee by the Bermuda Monetary Authority as to the performance of W.P.
Stewart & Co., Ltd. or its credit worthiness. Accordingly, in giving such
consent or permissions, the Bermuda Monetary Authority shall not be liable for
the financial soundness, performance or the default of W.P. Stewart & Co., Ltd.
or its business or for the correctness of any opinions or statements expressed
in this prospectus.

The transfer of common shares and the issue of common shares within the
current authorized share capital of W.P. Stewart & Co., Ltd. after the
completion of the offerings to or by such persons may be effected without
specific consent under the Exchange Control Act of 1972 and regulations
thereunder subject to such common shares being listed on the New York Stock
Exchange. Because we have been designated as non-resident of Bermuda for
exchange control purposes, there are no restrictions on our ability to transfer
funds in and out of Bermuda or to pay dividends to non-Bermuda residents who are
holders of our shares, other than in local Bermuda currency.

Share certificates will be issued in respect of the common shares offered
pursuant to this prospectus. In the case of an applicant acting in a special
capacity (for example, as trustee), the share register may not record the
capacity in which the applicant is acting. We are not bound to investigate or
incur any responsibility in respect to the proper administration of any such
trust. We will take no notice of any trust applicable to any of our common
shares whether or not we have notice of such trust.

As an exempted company, W.P. Stewart & Co., Ltd. is exempted from Bermuda
laws which restrict the percentage of share capital that may be held by
non-Bermudians, but as an exempted company, we may not, except with the express
authorization of the Bermuda legislature or under a license granted by the
Minister of Finance of Bermuda, participate in certain business transactions
including:

- the acquisition or holding of land in Bermuda (except that required for
our business and held by way of lease or tenancy for terms of not more
than 50 years or, with the consent of the Minister of Finance of Bermuda,
that required to provide accommodation or recreational facilities for our
employees and held by way of lease or tenancy for terms of not more than
21 years);

- the taking of mortgages on land in Bermuda to secure an amount in excess
of BD$50,000 without the consent of the Minister of Finance of Bermuda;

- the acquisition of any bonds or debentures secured on any land in Bermuda
except bonds or debentures issued by the Bermuda government or a public
authority; or

- the carrying on of business of any kind in Bermuda other than with
persons outside Bermuda, except in certain limited circumstances such as
doing business with another exempted company in furtherance of the
business of W.P. Stewart & Co., Ltd. carried on outside Bermuda.

68
<PAGE> 72

This prospectus has been filed with the Registrar of Companies in Bermuda
pursuant to Part III of the Companies Act 1981 of Bermuda. In accepting this
prospectus for filing, the Registrar of Companies accepts no responsibility for
the financial soundness of any proposals or for the correctness of any
statements made or opinions expressed with regard to such proposals or
statements.

69
<PAGE> 73

UNDERWRITING

W. P. Stewart & Co., Ltd., the selling shareholders and the underwriters
for the U.S. offering named below have entered into an underwriting agreement
with respect to the common shares being offered in the United States. Subject to
certain conditions, each U.S. underwriter has severally agreed to purchase the
number of common shares indicated in the following table. Goldman, Sachs & Co.,
Lazard Freres & Co. LLC, Bear, Stearns & Co. Inc. and Salomon Smith Barney Inc.
are the representatives of the U.S. underwriters.

<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Goldman, Sachs & Co. ...................................
Lazard Freres & Co. LLC.................................
Bear, Stearns & Co., Inc. ..............................
Salomon Smith Barney Inc. ..............................
---------
Total.............................................. 8,963,212
=========
</TABLE>

If the U.S. underwriters sell more common shares than the total number set
forth in the table above, the U.S. underwriters have an option to buy up to an
additional 1,344,482 common shares from WPS II, Inc. to cover such sales. They
may exercise that option for 30 days from the date of this prospectus. If any
common shares are purchased pursuant to this option, the U.S. underwriters will
severally purchase common shares in approximately the same proportions as set
forth in the table above.

The following table shows the per share and total underwriting discounts
and commissions to be paid to the U.S. underwriters by the selling shareholders.
Such amounts are shown assuming both no exercise and full exercise of the U.S.
underwriters' option to purchase 1,344,482 additional common shares.

<TABLE>
<CAPTION>
Paid by the Selling Shareholders
--------------------------------
No Exercise Full Exercise
----------- -------------
<S> <C> <C>
Per Share................................................. $ $
Total..................................................... $ $
</TABLE>

Common shares sold by the underwriters to the public will initially be
offered at the initial public offering price set forth on the cover page of this
prospectus. Any common shares sold by the underwriters to securities dealers may
be sold at a discount of up to $ per share from the initial public
offering price. Any such securities dealers may resell any common shares
purchased from the underwriters to certain other brokers or dealers at a
discount of up to $ per share from the initial public offering price. If
all of the common shares are not sold at the initial public offering price, the
representatives may change the offering price and the other selling terms.

W. P. Stewart & Co., Ltd. and the selling shareholders have entered into an
underwriting agreement with the international underwriters for the sale of
2,240,803 common shares outside of the United States. The terms and conditions
of both offerings are the same and the sale of shares in both offerings are
conditioned on each other. Goldman Sachs International, Lazard Capital Markets,
Bear, Stearns International Limited and Salomon Brothers International Limited
are representatives of the underwriters for the international offering. WPS II,
Inc. has granted the international underwriters an option similar to that
described above to purchase up to an additional 336,120 common shares.

The underwriters for both of the offerings have entered into an agreement
in which they agree to restrictions on where and to whom they and any dealer
purchasing from them may offer

70
<PAGE> 74

common shares as a part of the distribution of the common shares. The
underwriters have also agreed that they may sell common shares between the
underwriting groups.

W.P. Stewart & Co., Ltd., certain of its employees and certain of the
selling shareholders have agreed with the underwriters not to dispose of or
hedge any of their common shares or securities convertible into or exercisable
or exchangeable for similar securities of WPS & Co., Ltd. during the period from
the date of this prospectus continuing through the date 540 days after the date
of this prospectus, except with the prior written consent of the representatives
of the underwriters. This agreement does not apply to the sale of common shares
by W.P. Stewart & Co., Ltd. to employees and employees of its affiliates
consistent with past practices and the redemption by W.P. Stewart & Co., Ltd. of
employee shares which fail to vest in accordance with agreements in effect on
the date of this prospectus. In addition, W.P. Stewart & Co., Ltd., in its
discretion, will be permitted to utilize current earnings not used in the
payment of dividends to repurchase common shares from shareholders who are
employees of W.P. Stewart & Co., Ltd. or its affiliates who wish to sell common
shares at the then-current market price. WPS II, Inc. has additionally agreed to
retain at least 7,000,000 common shares for the longer of three years or until
the expiration of its indemnity obligation relating to tax liabilities resulting
from the merger with our U.S. predecessor. See "Shares Eligible for Future Sale"
for a discussion of certain transfer restrictions.

The representatives of the underwriters have informed us that they do not
expect sales to accounts over which the underwriters exercise discretionary
authority to exceed five percent of the total number of common shares offered by
them. In addition, pursuant to the requirements of NASD Conduct Rule 2720(l), no
sales will be made to discretionary accounts without prior specific written
approval of the holders of the accounts.

Prior to the offerings, there has been no public market for the common
shares. The initial public offering price will be negotiated among W.P. Stewart
& Co., Ltd., the selling shareholders and the representatives of the U.S.
underwriters and the international underwriters. Among the factors to be
considered in determining the initial public offering price of the shares, in
addition to prevailing market conditions, will be W.P. Stewart's historical
performance, estimates of its business potential and earning prospects, an
assessment of its management and the consideration of the above factors in
relation to market valuation of companies in related businesses.

W.P. Stewart & Co., Ltd. intends to list the common shares on the New York
Stock Exchange under the symbol "WPL" and, by way of secondary listing, on the
Bermuda Stock Exchange under the symbol "WPS". In order to meet one of the
requirements for listing the common shares on the New York Stock Exchange, the
underwriters have undertaken to sell lots of 100 or more common shares to a
minimum of 2,000 beneficial holders.

In connection with the offerings, the underwriters may purchase and sell
common shares in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
common shares than they are required to purchase in the offerings. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional common shares from the selling shareholders in the
offerings. The underwriters may close out any covered short position by either
exercising their option to purchase additional common shares or purchasing
common shares in the open market. In determining the source of common shares to
close out the covered short position, the underwriters will consider, among
other things, the price of common shares available for purchase in the open
market as compared to the price at which they may purchase common shares through
the over-allotment option. "Naked" short sales are any sales in excess of such
option. The underwriters must close out any naked short position by purchasing
common shares in the open market. A naked short position is more likely to be
created if the underwriters are concerned that there may be downward pressure on
the price of the common shares in the open

71
<PAGE> 75

market after pricing that could adversely affect investors who purchase in the
offerings. Stabilizing transactions consist of various bids for or purchases of
common shares made by the underwriters in the open market prior to the
completion of the offerings.

The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.

Purchases to cover a short position and stabilizing transactions may have
the effect of preventing or retarding a decline in the market price of the
common shares and, together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the common shares.
As a result, the price of the common shares may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued by the underwriters at any time. These transactions may
be effected on the New York Stock Exchange, in the over-the-counter market or
otherwise.

The underwriters do not expect sales to discretionary accounts to exceed
five percent of the total number of shares offered.

Of the total expenses of the offerings, excluding underwriting discounts
and commissions, approximately $2.0 million will be borne ratably by the selling
shareholders. The remainder of such expenses, estimated to be $3.5 million, will
be borne by W.P. Stewart & Co., Ltd.

The selling shareholders and W.P. Stewart & Co., Ltd. have agreed to
indemnify the several underwriters against certain liabilities, including
liabilities under the Securities Act of 1933.

This prospectus may be used by the underwriters and other dealers in
connection with offers and sales of the common shares, including sales of common
shares initially sold by the international underwriters in the international
offering, to persons located in the United States.

One of the underwriters and its affiliates have performed, and may in the
future perform, services for W.P. Stewart & Co., Ltd. in the ordinary course of
business for which it received, and may receive, customary compensation.

72
<PAGE> 76

VALIDITY OF COMMON SHARES

The validity of the common shares offered hereby will be passed upon for
the Stewart Group by Appleby Spurling & Kempe, Hamilton, Bermuda, and for the
underwriters by Conyers Dill & Pearman, Hamilton, Bermuda. Certain legal matters
as to U.S. law will be passed upon for the Stewart Group by Dorsey & Whitney
LLP, New York, New York and for the underwriters by Sullivan & Cromwell, New
York, New York. Certain legal matters as to U.S. tax law will be passed upon for
the Stewart Group by Nixon Peabody, LLP, New York, New York.

EXPERTS

The combined/consolidated financial statements of W.P. Stewart & Co., Ltd.
as of December 31, 1999, 1998, and 1997 and for each of the three years in the
period ended December 31, 1999 included in this prospectus have been so included
in reliance on the report of PricewaterhouseCoopers, independent accountants,
given on the authority of said firm as experts in auditing and accounting.

With respect to the unaudited consolidated financial statements of W.P.
Stewart & Co., Ltd. as of and for the nine months ended September 30, 2000 and
1999, included in this prospectus, PricewaterhouseCoopers reported that they
have applied limited procedures in accordance with professional standards for a
review of such information. However, their separate report dated November 17,
2000 appearing herein states that they did not audit and they do not express an
opinion on the unaudited consolidated financial statements. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied.
PricewaterhouseCoopers is not subject to the liability provisions of Section 11
of the Securities Act of 1933 for their report on the unaudited consolidated
financial statements because that report is not a "report" or a "part" of the
registration statement prepared or certified by PricewaterhouseCoopers within
the meaning of Sections 7 and 11 of the Securities Act.

The performance record for the period January 1, 1989 through September 30,
2000, including the three, five and ten year periods ended September 30, 2000,
attached to this prospectus as Annex 1 has been so included in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in performing examinations of performance
calculations in accordance with standards established by the American Institute
of Certified Public Accountants.

AVAILABLE INFORMATION

Upon completion of the offerings, W.P. Stewart & Co., Ltd. will be required
to file annual and current reports and other information with the SEC. You may
read and copy any documents filed by W.P. Stewart & Co., Ltd. at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
room. Our filings with the SEC are also available to the public through the New
York Stock Exchange, 20 Broad Street, New York, New York 10005, on which the
common shares will be listed. After the offerings, we expect to provide annual
reports to our shareholders that include financial information reported on by
our independent public accountants. As a foreign private issuer, we are not
required to furnish proxy statements or report insider purchases and sales.

We have filed a Registration Statement on Form F-1 with the SEC. This
prospectus is a part of the Registration Statement and does not contain all of
the information in the Registration Statement. Whenever a reference is made in
this prospectus to a contract or other document of the Stewart Group, please be
aware that such reference is not necessarily complete and that you

73
<PAGE> 77

should refer to the exhibits that are a part of the Registration Statement at
the SEC's public reference room in Washington, D.C.

ENFORCEMENT OF CIVIL LIABILITIES

W.P. Stewart & Co., Ltd. is organized pursuant to the laws of Bermuda. In
addition, less than a majority of the directors and officers of W.P. Stewart &
Co., Ltd. reside within the United States and a substantial portion of the
assets of W.P. Stewart & Co., Ltd. and of certain of its directors and officers
are located outside the United States. As a result, it may not be possible for
investors to effect service of process within the United States upon such
persons or to enforce against them or W.P. Stewart & Co., Ltd. judgments of
courts of the United States, including judgments predicated upon civil
liabilities under the U.S. federal securities laws or the securities laws of any
State of the United States. We have been advised by our legal counsel in
Bermuda, Appleby Spurling & Kempe, that there is doubt as to the enforcement in
Bermuda, in original proceedings or in actions for enforcement, of judgments of
U.S. courts, of liabilities predicated upon the U.S. federal securities laws or
the securities laws of any State of the United States, although Bermuda courts
will enforce foreign judgments for a judgment awarding a sum of money in civil
matters subject to certain conditions and exceptions. We have irrevocably
appointed W.P. Stewart & Co., Inc. as our agent to receive service of process in
actions against us arising out of or in connection with violations of the U.S.
federal securities laws in any federal or state court in the United States.

74
<PAGE> 78

INDEX TO COMBINED/CONSOLIDATED
FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Combined/Consolidated Financial Statements as of and for the
three years ended December 31, 1999, 1998, and 1997
Report of Independent Accountants........................... F-2
Combined/Consolidated Statements of Financial Condition..... F-3
Combined/Consolidated Statements of Operations.............. F-4
Combined/Consolidated Statement of Changes in Shareholders'
Equity.................................................... F-5
Combined/Consolidated Statements of Cash Flows.............. F-6
Notes to Combined/Consolidated Financial Statements......... F-7 to F-19
Unaudited Consolidated Financial Statements as of and for
the nine month periods ended September 30, 2000 and 1999

Review Report of Independent Accountants.................... F-20
Unaudited Consolidated Statements of Financial Condition.... F-21
Unaudited Consolidated Statements of Operations............. F-22
Unaudited Consolidated Statement of Changes in Shareholders'
Equity.................................................... F-23
Unaudited Consolidated Statements of Cash Flows............. F-24
Notes to Unaudited Consolidated Financial Statements........ F-25 to F-37
</TABLE>

F-1
<PAGE> 79

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of W.P. Stewart & Co., Ltd.

In our opinion, the accompanying combined/consolidated statements of financial
condition and the related combined/consolidated statements of operations and
changes in shareholders' equity and of cash flows appearing on pages F-3 through
F-19 of this Registration Statement on Form F-1 present fairly, in all material
respects, the financial position of W.P. Stewart & Co., Ltd. and its
subsidiaries and predecessors (the "Company" (see Note 1)) at December 31, 1999,
1998 and 1997, and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America. These financial statements are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers

Hamilton, Bermuda
February 18, 2000

F-2
<PAGE> 80

W.P. STEWART & CO., LTD.

COMBINED/CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents.................................. $ 24,791,813 $ 9,132,255 $ 8,246,191
Fees receivable............................................ 3,395,646 4,506,461 4,031,363
Receivable from broker-dealer.............................. 2,187,133 2,326,223 392,180
Investments in unconsolidated affiliates (net of
accumulated amortization of $135,334, $0, and $0 for
1999, 1998 and 1997, respectively)....................... 7,402,508 1,473,980 691,340
Receivables from affiliates, net........................... 36,479 -- 346,858
Investments owned, at market(cost $571,840, $571,840 and
$2,933,720, for 1999, 1998 and 1997, respectively)....... 589,710 607,580 2,542,750
Investment in aircraft (net of accumulated depreciation of
$3,208,316, $0 and $0 for 1999, 1998 and 1997,
respectively)............................................ 19,243,159 20,682,075 --
Goodwill (net of accumulated amortization of $97,714)...... 2,900,472 -- --
Customer list (net of accumulated amortization of
$54,107)................................................. 3,561,775 -- --
Furniture, equipment and leasehold improvements (net of
accumulated depreciation and amortization of $676,273,
$349,440 and $1,695,596 for 1999, 1998 and 1997,
respectively)............................................ 3,709,851 1,855,948 1,401,773
Interest receivable on shareholders' notes................. 536,365 380,155 274,608
Other assets............................................... 4,365,947 2,380,809 580,051
------------ ------------ ------------
$ 72,720,858 $ 43,345,486 $ 18,507,114
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Loans payable............................................ $ 19,157,645 $ 17,340,000 --
Employee compensation and benefits payable............... 1,781,169 -- --
Marketing fees payable................................... 3,858,554 1,970,757 $ 973,698
Taxes payable............................................ 2,102,072 3,404,000 308,500
Professional fees payable................................ 2,832,234 2,389,685 371,612
Dividend payable......................................... 59,853 -- --
Accrued expenses and other liabilities................... 4,028,149 1,074,351 1,236,473
Payables to affiliates, net.............................. -- 87,061 --
------------ ------------ ------------
33,819,676 26,265,854 2,890,283
------------ ------------ ------------
Commitments and contingencies
Shareholders' Equity:
Common stock (Notes 1 and 2)
W.P. Stewart & Co., Ltd. $.001 par value (125,000,000
shares authorized, 47,225,336 and 43,255,656 shares
issued and outstanding for 1999 and 1998,
respectively)........................................ 47,225 43,256
Capital Managers Limited $.01 par value (120,000,000
shares authorized, 10,496,934 shares issued and
outstanding)......................................... 104,969
Historic WPS $.001 par value (5,000,000 shares
authorized, 3,498,978 shares issued and
outstanding)......................................... 3,499
Additional paid-in-capital............................... 81,646,968 37,069,794 28,358,002
Contingently returnable shares........................... (28,061,175)
Accumulated other comprehensive income................... (13,920) -- --
Retained earnings........................................ 10,922,661 1,998,118 6,712,981
------------ ------------ ------------
64,541,759 39,111,168 35,179,451
Less: shareholders' notes receivable....................... (25,640,577) (22,031,536) (19,562,620)
------------ ------------ ------------
38,901,182 17,079,632 15,616,831
------------ ------------ ------------
$ 72,720,858 $ 43,345,486 $ 18,507,114
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these combined/consolidated
financial statements.
F-3
<PAGE> 81

W.P. STEWART & CO., LTD.

COMBINED/CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Fees........................................ $153,306,676 $121,043,040 $88,580,148
Commissions................................. 35,510,982 27,574,389 20,379,346
Interest and other.......................... 4,500,782 3,662,084 1,719,099
------------ ------------ -----------
193,318,440 152,279,513 110,678,593
------------ ------------ -----------
Expenses:
Employee compensation and benefits.......... 37,385,006 29,718,220 34,446,134
Marketing fees.............................. 13,915,886 11,480,163 6,572,310
Commissions, clearance and trading.......... 7,973,290 7,743,118 5,815,498
Research and administration................. 16,111,292 11,194,758 9,468,197
Depreciation and amortization............... 3,917,782 493,581 552,793
Other operating............................. 10,850,651 10,429,558 4,300,021
------------ ------------ -----------
90,153,907 71,059,398 61,154,953
------------ ------------ -----------
Income before taxes........................... 103,164,533 81,220,115 49,523,640
Provision for taxes........................... 8,409,958 8,654,000 3,854,292
------------ ------------ -----------
Net income.................................... $ 94,754,575 $ 72,566,115 $45,669,348
============ ============ ===========
Earnings Per Share:
Basic Earnings Per Share.................... $ 2.37 $ 1.89 $ 1.26
============ ============ ===========
Diluted Earnings Per Share.................. $ 2.21 $ 1.80 $ 1.23
============ ============ ===========
</TABLE>

The accompanying notes are an integral part of these combined/consolidated
financial statements.
F-4
<PAGE> 82

W.P. STEWART & CO., LTD.

COMBINED/CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK CONTINGENTLY ADDITIONAL OTHER
---------------------- RETURNABLE PAID-IN COMPREHENSIVE RETAINED
SHARES AMOUNT SHARES CAPITAL INCOME EARNINGS
------ ------ ------------ ---------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996...... 6,898,346 $ 106,999 $13,152,887 $ -- $ 4,305,962
Issuance of common stock, at $.03
par value Capital Managers
Limited........................ 47,250 1,417
Capital Managers stock split: 3
for 1.......................... 6,997,956
Net income....................... 45,669,348
Dividends and distributions...... (43,262,329)
Issuance of common stock, at
$.001 par value Historic WPS
Cash........................... 52,360 52 223,756
Notes receivable............... 2,623,820
Issuance of Capital Managers
Limited notes receivable....... 12,357,539
Proceeds from notes receivable
for common stock...............
---------- --------- ------------ ----------- -------- ------------
Balance at December 31, 1997...... 13,995,912 108,468 28,358,002 -- 6,712,981
W.P. Stewart & Co., Inc. retired
shares......................... (3,498,978) (3,499) 3,499
Issuance of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd....................... 29,321,436 29,321 (29,321)
Issuance of common stock, at $.01
par value Capital Managers
Limited
Cash........................... 3,407,371 34,074 367,774
Notes receivable............... 5,248,871
Capital Managers merger common
stock par value adjustment..... (125,138) 125,138
W.P. Stewart & Co., Inc. merger.. 2,995,831 (2,995,831)
Net income....................... 72,566,115
Dividends and distributions...... (74,285,147)
Issuance of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd....................... 29,915 30
Proceeds from notes receivable
for common stock...............
---------- --------- ------------ ----------- -------- ------------
Balance at December 31, 1998...... 43,255,656 43,256 37,069,794 -- 1,998,118
Issuance of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd.
Acquisitions................... 3,346,552 3,346 35,840,937
Cash........................... 60,717 60 708,807
Notes receivable............... 1,144,500 1,145 12,735,700
Cancellation of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd. ..................... (582,089) (582) (4,708,270)
Contingently returnable shares... $(28,061,175)
Net income....................... 94,754,575
Dividends........................ (85,830,032)
Other comprehensive income....... (13,920)
Proceeds from notes receivable
for common stock...............
---------- --------- ------------ ----------- -------- ------------
Balance at December 31, 1999...... 47,225,336 $ 47,225 $(28,061,175) $81,646,968 $(13,920) $ 10,922,661
========== ========= ============ =========== ======== ============

NOTES
RECEIVABLE TOTAL
---------- -----
<S> <C> <C>
Balance at December 31, 1996...... $(10,640,164) $ 6,925,684
Issuance of common stock, at $.03
par value Capital Managers
Limited........................ 1,417
Capital Managers stock split: 3
for 1.......................... --
Net income....................... 45,669,348
Dividends and distributions...... (43,262,329)
Issuance of common stock, at
$.001 par value Historic WPS
Cash........................... 223,808
Notes receivable............... (2,874,830) (251,010)
Issuance of Capital Managers
Limited notes receivable....... (12,357,539) --
Proceeds from notes receivable
for common stock............... 6,309,913 6,309,913
------------ ------------
Balance at December 31, 1997...... (19,562,620) 15,616,831
W.P. Stewart & Co., Inc. retired
shares......................... --
Issuance of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd....................... --
Issuance of common stock, at $.01
par value Capital Managers
Limited
Cash........................... 401,848
Notes receivable............... (5,248,871) --
Capital Managers merger common
stock par value adjustment..... --
W.P. Stewart & Co., Inc. merger.. --
Net income....................... 72,566,115
Dividends and distributions...... (74,285,147)
Issuance of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd....................... 30
Proceeds from notes receivable
for common stock............... 2,779,955 2,779,955
------------ ------------
Balance at December 31, 1998...... (22,031,536) 17,079,632
Issuance of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd.
Acquisitions................... 35,844,283
Cash........................... 708,867
Notes receivable............... (12,736,845) --
Cancellation of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd. ..................... 4,708,852 --
Contingently returnable shares... (28,061,175)
Net income....................... 94,754,575
Dividends........................ (85,830,032)
Other comprehensive income....... (13,920)
Proceeds from notes receivable
for common stock............... 4,418,952 4,418,952
------------ ------------
Balance at December 31, 1999...... $(25,640,577) $ 38,901,182
============ ============
</TABLE>

The accompanying notes are an integral part of these combined/consolidated
financial statements.
F-5
<PAGE> 83

W.P. STEWART & CO., LTD.

COMBINED/CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income............................................... $ 94,754,575 $ 72,566,115 $ 45,669,348
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 3,917,782 493,581 552,793
Equity in income adjustment in unconsolidated
affiliates........................................... (445,150) -- --
Changes in operating assets and liabilities:
Fees receivable........................................ 1,110,815 (475,098) (2,140,362)
Receivable from broker-dealer.......................... 139,090 (1,934,043) (392,180)
Investments owned, at market........................... 17,870 1,935,170 3,198,150
Other assets........................................... (1,714,946) (1,800,758) (220,603)
Employee compensation and benefits payable............. 1,781,169 -- --
Marketing fees payable................................. 1,887,797 997,059 12,045
Taxes payable.......................................... (1,301,928) 3,095,500 178,427
Professional fees payable.............................. 442,549 2,018,073 191,303
Accrued expenses and other liabilities................. 2,953,798 (162,092) (585,052)
Payable to broker-dealer............................... -- -- (758,600)
------------ ------------ ------------
Net cash provided by operating activities............ 103,543,421 76,733,507 45,705,269
------------ ------------ ------------
Cash flows (used in) investing activities:
Investments in unconsolidated affiliates................. (929,963) (782,640) (410,460)
Purchase of intangible assets............................ (3,789,900) -- --
Receivables from affiliates, net......................... (36,479) 346,858 (131,858)
Investment in aircraft................................... (1,769,400) (20,682,075) --
Purchase of furniture, equipment and leasehold
improvements........................................... (2,276,215) (947,756) (1,253,275)
Payables to affiliates, net.............................. (87,061) 87,061 (180,392)
------------ ------------ ------------
Net cash (used in) investing activities.............. (8,889,018) (21,978,552) (1,975,985)
------------ ------------ ------------
Cash flows (used for) financing activities:
Proceeds from loans payable.............................. 2,280,000 17,340,000 --
Payments on loans payable................................ (462,355) -- --
Proceeds from issuance of common stock................... 708,867 401,848 225,225
Payment to shareholder for notes receivable.............. -- -- (251,010)
Proceeds from notes receivable for common stock.......... 4,418,952 2,779,955 6,309,913
Interest receivable on shareholders' notes............... (156,210) (105,547) (199,608)
Distributions and dividends to shareholders.............. (85,770,179) (74,285,147) (43,262,329)
------------ ------------ ------------
Net cash (used for) financing activities............. (78,980,925) (53,868,891) (37,177,809)
Effect of exchange rate changes in cash.................... (13,920) -- --
------------ ------------ ------------
Net increase in cash and cash equivalents.................. 15,659,558 886,064 6,551,475
Cash and cash equivalents, beginning of year............... 9,132,255 8,246,191 1,694,716
------------ ------------ ------------
Cash and cash equivalents, end of year..................... $ 24,791,813 $ 9,132,255 $ 8,246,191
============ ============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
CASH PAID DURING THE PERIOD FOR:
Income taxes............................................. $ 7,773,786 $ 5,849,535 $ 3,676,240
============ ============ ============
Interest expense......................................... $ 1,301,584 -- --
============ ============ ============
</TABLE>

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

As discussed in Note 2, in 1999 the Company issued shares of common stock with a
fair value of $1,939,675, $2,589,600, $2,486,016 and $299,628 to acquire its
investments in NS Money Management (Bermuda) Limited, First Long Island
Investors, Inc., TPRS Services N.V. and Bowen Asia Limited, respectively.

As discussed in Note 10, the Company issued common stock for notes receivable
for the years ended December 31, 1999, 1998 and 1997, in the amounts of
$12,736,845, $5,248,871 and $15,232,369, respectively, and cancelled outstanding
notes of $4,708,852 for the year ended December 31, 1999.

At December 31, 1999, the Company had dividends payable to shareholders of
$59,853.

The accompanying notes are an integral part of these combined/consolidated
financial statements.
F-6
<PAGE> 84

NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: BASIS OF PRESENTATION

The accompanying combined and consolidated financial statements of W.P. Stewart
& Co., Ltd. ("WPS & Co., Ltd." and, together with its subsidiaries and
predecessors, the "Company") are presented on a combined and consolidated basis
and include the historical operations of the Company.

For the year ended December 31, 1997, the Company's combined/consolidated
financial statements include the financial statements of W.P. Stewart & Co.,
Inc. combined with the consolidated financial statements of W.P. Stewart & Co.,
Ltd. (formerly Global Reach Limited).

For the year ended December 31, 1998, the Company's combined/consolidated
statement of operations includes the statement of operations of W.P. Stewart &
Co., Inc. for the period from January 1, 1998 through June 30, 1998 and the
consolidated statement of operations of W.P. Stewart & Co., Ltd. for the period
from July 1, 1998 through December 31, 1998 combined with the consolidated
statement of operations of Capital Managers Limited (formerly W.P. Stewart &
Co., Ltd.) for the period from January 1, 1998 through October 31, 1998. (See
Background and Organization: Note 2).

NOTE 2: BACKGROUND AND ORGANIZATION

For the years ended December 31, 1999, 1998 and 1997 the combined/consolidated
Company consisted of several affiliated entities worldwide under common control
which provide investment advisory and related securities brokerage services. The
background and organization of the entities presented in the Company's
combined/consolidated financial statements is as follows:

W.P. Stewart & Co., Inc. ("Historic WPS") was incorporated in Delaware on August
2, 1973. Historic WPS was a registered investment adviser under the Investment
Advisors Act of 1940 and provided investment management services to high
net-worth individuals and institutions from its inception until it ceased
operations on June 30, 1998. In addition, through June 30, 1997, it was a
registered broker-dealer under the Securities and Exchange Act of 1934.

W.P. Stewart & Company, Limited, was incorporated on July 10, 1995 as an exempt
company under the laws of Bermuda. W.P. Stewart & Company, Limited, currently
known as "W.P. Stewart Asset Management Ltd." ("WPSAM"), is an investment
adviser for clients throughout the world.

Global Reach Limited ("Global Reach"), a Bermuda holding company, was
incorporated as an exempt company under the laws of Bermuda on August 16, 1996.
Global Reach acquired effective control of W.P. Stewart & Company, Limited on
August 26, 1996 and accordingly since such date W.P. Stewart & Company, Limited
has been reflected on a consolidated basis in the financial statements of Global
Reach.

W.P. Stewart Securities Limited, ("WPSSL") was incorporated as an exempt company
by the Bermuda Office of the Registrar of Companies on January 2, 1996.
Initially it was a subsidiary of W.P. Stewart & Company, Limited (currently
known as WPSAM), and was acquired by Global Reach on July 1, 1997. WPSSL acts as
an introducing broker, clearing all transactions with, and for, customers of its
affiliates on a fully disclosed basis through an independent clearing broker.

On October 21, 1997, Global Reach changed its name to W.P. Stewart & Co., Ltd.
("WPSCL") and W.P. Stewart & Company, Limited changed its name to W.P. Stewart
Asset Management Ltd.

W.P. Stewart Fund Management Limited ("WPS Dublin"), a wholly-owned subsidiary
of WPSAM was incorporated in Ireland on January 27, 1997. The primary business
of WPS Dublin is providing management and administrative services to investment
funds. WPS Dublin is the manager of WP Stewart Funds plc and WP Stewart Global
Fund plc, two umbrella type open ended investment companies regulated by the
Central Bank of Ireland.
F-7
<PAGE> 85
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

WPS & Co., Ltd. was originally formed on June 29, 1998 and became a wholly-owned
subsidiary of WPS II, Inc. on June 30, 1998 and is an exempt company under the
laws of Bermuda. WPS & Co., Ltd. is a registered investment adviser under the
Investment Advisers Act of 1940. WPS II, Inc. is a holding company that is owned
ratably by the former shareholders of Historic WPS.

WPS III, Inc. (currently known as W.P. Stewart & Co., Inc. ("WPSI")), was
incorporated in Delaware on May 15, 1998 and became a wholly-owned subsidiary of
WPS & Co., Ltd. on June 30, 1998. WPSI is also a registered investment adviser
under the Investment Advisers Act of 1940. Its principal business is to provide
investment research and sub-advisory services to the Company.

WPS Aviation Holdings LLC ("WPS Aviation") was formed in Delaware on November
12, 1998, and is a wholly-owned subsidiary of WPSI.

On March 13, 1998, WPSCL changed its name to Capital Managers Limited ("Capital
Managers").

W.P. Stewart & Co. (Europe), Ltd. ("WPS Europe"), formerly known as W.P. Stewart
Global Management, Ltd. ("WPSGM") was formed on September 14, 1998 in the United
Kingdom under the laws of England and Wales, as a private limited company. WPS
Europe is registered with the Investment Management Regulatory Organisation
Limited (IMRO). Its principal business is to provide investment research and
sub-advisory services to the Company.

Global Consolidation Activities

On June 30, 1998, the shareholders of Historic WPS exchanged all 3,498,978 of
their shares for 29,321,436 shares (an exchange ratio of 8.38:1) of WPS II, Inc.
Tendered shares of Historic WPS were retired, and WPS II, Inc. thus became the
sole shareholder of Historic WPS.

In an amalgamation and merger effective July 1, 1998, WPS II, Inc. transferred
all of its net operating assets and the continuing investment management
business of Historic WPS to WPS & Co., Ltd., the surviving entity. In exchange,
WPS II, Inc. received 29,321,436 shares of WPS & Co., Ltd.

On October 30, 1998, Capital Managers merged into WPS & Co., Ltd. WPS & Co.,
Ltd. exchanged its shares on a one-for-one basis, for all outstanding shares of
Capital Managers and remained in existence as the surviving entity. As a result
of the merger, on October 30, 1998, WPS & Co., Ltd. became the sole owner of all
of the subsidiary entities of Capital Managers.

On May 19, 1999, the Company consummated its acquisition of 50% of the capital
stock of TPRS Services NV ("TPRS"), a newly formed Curacao company that is
engaged in marketing of investment services in exchange for 1,152,000 common
shares of the Company, subject to repurchase provisions (See Note 6).

On June 1, 1999, the Company consummated its acquisition of all of the
outstanding capital stock of NS Money Management (Bermuda) Limited ("NSMM"), a
Bermuda holding company, in exchange for 898,831 common shares of the Company,
subject to repurchase provisions. NSMM operates as an investment adviser for
clients located throughout the world.

On October 1, 1999, the Company consummated its acquisition of all of the
capital stock of First Long Island Investors, Inc., a newly formed company
engaged in marketing of investment services, in consideration for 1,200,000
common shares of the Company, subject to repurchase provisions. Operations of
this entity continue under the name W.P. Stewart Asset Management (NA), Inc.

F-8
<PAGE> 86
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Eighty percent of the aggregate shares issued in each acquisition is subject to
repurchase by the Company, at par value, up to a maximum of 20% per year, on
January 1 of each of the first four years following the date of acquisition
should the assets under management decrease below an amount specified in each
acquisition agreement.

The purchase price for each acquisition is determined by the sum of:

1.the number of shares that are subject to repurchase at each anniversary
date multiplied by the fair value of those shares at that date and

2.the cash dividends paid on the remaining shares subject to repurchase.

The shares subject to repurchase are reported in shareholders' equity at their
initial issuance price as share capital and as a contra-equity account captioned
contingently returnable shares. On the dates on which shares cease to be subject
to repurchase, the contra-equity account is relieved and any difference between
the initial issue price and the then current fair value of the shares no longer
subject to repurchase is charged or credited to additional paid-in-capital. Cash
dividends on shares no longer subject to repurchase are recorded as a reduction
of shareholders' equity.

The following table shows information for each acquisition as of and for the
year ended December 31, 1999.

<TABLE>
<CAPTION>
CASH DIVIDENDS
AGGREGATE SHARES NOT SHARES PAID ON SHARES
NUMBER OF SUBJECT TO SUBJECT TO SUBJECT TO PURCHASE INTANGIBLE
ACQUISITION SHARES REPURCHASE REPURCHASE REPURCHASE PRICE ALLOCATION AMORTIZATION
<S> <C> <C> <C> <C> <C> <C>
TPRS 1,152,000 230,400 921,600 $1,327,104 $4,389,120 $135,334
NSMM 898,831 179,766 719,065 $1,035,453 $2,547,591 $ 74,305
FLII 1,200,000 240,000 960,000 $ 432,000 $3,598,288 $ 54,107
</TABLE>

NOTE 3: ACCOUNTING POLICIES

The combined/consolidated financial statements are presented in conformity with
accounting principles generally accepted in the United States of America. The
functional currency for the Company and its affiliates is U.S. dollars.

The process of preparing combined/consolidated financial statements in
conformity with generally accepted accounting principles in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets
and liabilities at the dates of the combined/consolidated financial statements,
as well as the reported amounts of revenue and expenses during the reporting
periods. Actual results may differ from those estimates.

Principles of Consolidation

The Company consolidates all affiliated entities in which it has a majority
ownership interest or maintains effective control. All material inter-company
transactions have been eliminated.

Business Combinations

The Company's policy is to account for purchase business combinations as of the
date the acquisitions are consummated.

F-9
<PAGE> 87
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Cash and Cash Equivalents

The Company considers cash in banks and short-term highly liquid investments
with an original maturity of three months or less at the date of purchase to be
cash equivalents. The Company had cash at a certain bank in excess of United
States federally insurable limits and is exposed to credit risk resulting from
this concentration of cash.

Investments in Unconsolidated Affiliates

The Company's investments in unconsolidated affiliates which are not majority
owned or controlled are accounted for using the equity method.

Investments Owned, at Market

Investments consist of securities as classified in accordance with Statement of
Financial Accounting Standards 115, "Accounting for Certain Investments in Debt
and Equity Securities", and as such are recorded at quoted market values.
Transactions are recorded on a trade date basis with the resulting unrealized
gains and losses recorded in income.

Furniture, Equipment, Leasehold Improvements and Investment in Aircraft

Furniture, equipment, leasehold improvements and investment in aircraft are
stated at cost less accumulated depreciation and amortization. Depreciation is
computed using straight line and accelerated methods over the estimated useful
lives of the assets. Software costs are amortized over a three year period.
Leasehold improvements are amortized over the shorter of the lease term or the
estimated life of the improvements.

Revenue Recognition

Fees

Fees for management of customer accounts are based on terms stated in
client contracts and are based upon a percentage of assets under management
determined as of the last day of the quarter as specified in the contracts.

Commissions

Commissions on brokerage activities and related trading costs are recorded
on a trade date basis.

Income Taxes

The Company uses the asset and liability method required by Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" to record
income taxes. Deferred tax assets and liabilities are recognized principally for
the expected tax consequences of temporary differences between the tax bases of
assets and liabilities and their reported amounts. A valuation allowance is
established to reduce deferred tax assets to amounts that are expected to be
realized.

Foreign Currency Translation

The Company accounts for foreign currency translation in accordance with
Statement of Financial Accounting Standards No. 52. Assets and liabilities are
translated at the exchange rate in effect at year end, and revenue and expenses
are translated at the average rates of exchange prevailing during the year.
Gains or losses resulting from foreign currency transactions are

F-10
<PAGE> 88
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

included in net income. The U.S. dollar effect that arises from translating the
net assets of WPS Europe is recorded in accumulated other comprehensive income,
a separate component of shareholder's equity.

Customer List and Goodwill

Customer list is amortized on a straight-line basis over 15 years. Goodwill
arising on the acquisition of investments accounted for by the purchase method
is amortized on a straight-line basis over 20 years. Intangible assets are
periodically assessed for impairment by management. Considerations include
qualitative factors, evaluations of the related assets and undiscounted cash
flow techniques. Impairments are charged to operations in the period in which
they occur.

Earnings Per Share

Basic earnings per share are calculated using the weighted average number of
shares outstanding. Diluted earnings per share are calculated using the treasury
stock method.

NOTE 4: EARNINGS PER SHARE

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Basic Earnings Per Share:
Net Income.............................. $94,754,575 $72,566,115 $45,669,348
=========== =========== ===========
Weighted average basic
shares outstanding.................... 40,035,574 38,374,290 36,349,060
----------- ----------- -----------
Net Income Per Share.................... $ 2.37 $ 1.89 $ 1.26
=========== =========== ===========
Diluted Earnings Per Share:
Net Income............................ $94,754,575 $72,566,115 $45,669,348
=========== =========== ===========
Weighted average basic shares
outstanding........................ 40,035,574 38,374,290 36,349,060
Add: Unvested and restricted shares... 2,827,964 2,041,286 865,618
----------- ----------- -----------
Weighted average diluted shares
outstanding........................ 42,863,538 40,415,576 37,214,678
----------- ----------- -----------
Net Income Per Share.................... $ 2.21 $ 1.80 $ 1.23
=========== =========== ===========
</TABLE>

Basic earnings per share is computed by dividing the net income applicable to
common shares outstanding by the weighted average number of shares outstanding,
excluding unvested and restricted shares. Diluted earnings per share is computed
using the same method as basic earnings per share but also reflects the impact
of unvested and restricted shares using the treasury stock method.

On December 31, 1999, 47,225,336 shares were issued and outstanding. The
shareholders of record are entitled to full voting rights and dividends on these
shares; 3,797,477 of these shares were unvested.

F-11
<PAGE> 89
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5: COMPREHENSIVE INCOME

The following table details the components of comprehensive income as described
in Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income".

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Net income...................................... $94,754,575 $72,566,115 $45,669,348
Other comprehensive income, net of tax:
Foreign currency translation adjustment....... (13,920) -- --
----------- ----------- -----------
Comprehensive income............................ $94,740,655 $72,566,115 $45,669,348
=========== =========== ===========
</TABLE>

NOTE 6: INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Investments in unconsolidated affiliates include the following:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Investment in TPRS Services, N.V. .................. $ 4,698,936
Investment in Bowen Asia Limited.................... 1,629,591 $ 400,000 $400,000
Investment in Kirk Management Ltd. ................. 1,073,981 1,073,980
Investment in Stewart Notz Stucki Limited........... -- -- 291,340
----------- ---------- --------
Total.......................................... $ 7,402,508 $1,473,980 $691,340
=========== ========== ========
</TABLE>

In 1994, Historic WPS purchased for $250,000 a 10% interest in Bowen Asia
Limited ("Bowen"), a company incorporated in the British Virgin Islands. In
1996, an additional 1% interest in Bowen was purchased for $25,000, and, during
1997 an additional 11.5% interest was purchased for $125,000, increasing the
total investment to a 22.5% interest. During the year ended December 31, 1999,
the Company purchased an additional interest in Bowen for $1,229,591 ($929,963
and 27,769 shares of the Company's stock), increasing the Company's investment
to 40%.

In July 1998, Capital Managers purchased a 40% interest in Kirk Management Ltd.,
a real estate joint venture entity incorporated in Bermuda. Kirk Management Ltd.
owns Trinity Hall, a building located in Hamilton, Bermuda which is leased by
the Company from the joint venture, and serves as the Company's headquarters.

In connection with our acquisition of TPRS (see Note 2), TPR & Partners N.V. and
TPR Curacao N.V. (the sellers) signed a promissory note to WPSAM in the amount
of $2,750,000. The note bears interest at the rate of 6.625% per annum and is
collateralized by shares of W.P. Stewart & Co., Ltd. common stock issued in the
acquisition. The terms of the repayment provide for quarterly installments of
principal and interest commencing on October 20, 1999. The final installment,
including any outstanding principal and interest, is due no later than July 30,
2001. The amount outstanding at December 31, 1999 is included in other assets.

In December 1996, Global Reach Limited purchased a 49% interest in Stewart Notz
Stucki Limited for $5,880. This investment was disposed of during 1998.

NOTE 7: RELATED PARTY TRANSACTIONS

Research and administrative expenses include travel expenses of approximately
$3,352,700, $2,747,000, and $2,308,000 for the years ended December 31, 1999,
1998, and 1997, respectively, paid to Shamrock Aviation, Inc. ("Shamrock"), a
company owned by principal

F-12
<PAGE> 90
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

shareholders of the Company (see Note 8). The terms of an operating agreement
with Shamrock in effect during the period from 1996 until April 30, 1999
provided that the Company would pay to Shamrock approximately $175,000 per month
for the use of airplanes owned by Shamrock. Since April 30, 1999, the Company
has continued to use one airplane owned by Shamrock and has compensated Shamrock
for its use by paying charter fees.

The Company has entered into an agreement pursuant to which an entity affiliated
with Shamrock has agreed to provide operational and maintenance services at cost
for the Challenger aircraft owned by the Company (see Note 8). Research and
administration expenses include approximately $1,683,900 paid to this entity.

Included in other assets at December 31, 1998, is a non-interest bearing advance
in the amount of $1,630,000 which is due from Shamrock in connection with an
aircraft purchase made at the request of WPSI for the use of WPSI. This amount
was repaid in full in June 1999.

The lease agreement related to the office space located in New York includes
space occupied by several affiliated companies. WPSI is reimbursed on a monthly
basis for rent and other costs associated with the space. Such costs
approximated $257,400, $237,000 and $17,500 for the years ended December 31,
1999, 1998 and 1997, respectively.

WPS Dublin serves as the investment manager to an Irish fund solely managed by
WPS Investissements S.A., a Swiss investment management firm. WPS
Investissements S.A. is principally owned by Mr. William P. Stewart III, a
beneficial owner of a minority interest in the Company. The Company has no
ownership interest in either the Irish fund or WPS Investissements S.A. WPS
Dublin collects and remits to WPS Investissements S.A. all of the advisory fees
in respect of such fund. In addition, the Company pays to WPS Investissements
S.A. a portion of the brokerage commissions earned by the Company from
securities transactions for such fund. Such fees and commissions amounted to
$1,243,500, $558,726 and $13,476 in 1999, 1998 and 1997, respectively.

Prior to 1998, the Company paid Europa Securities Inc., a member of the New York
Stock Exchange, a principal owner of which is a beneficial owner of a minority
interest of the Company, fees relating to trading services and solicitation of
new accounts. Such costs approximated $209,500 for the year ended December 31,
1997.

The Company has accrued a contribution of approximately $484,000 for the year
ended December 31, 1999 and contributed $1.7 million on December 31, 1998. These
contributions fund the activities of W.P. Stewart & Co. Foundation, Inc. (the
"Foundation"), a private charitable foundation incorporated on December 7, 1998.
The Foundation makes charitable grants at the discretion of a committee
appointed by the Foundation's Board from members of the Board of Directors of
WPSI and WPS & Co., Ltd. This committee has been created to monitor and direct
the Company's charitable activities.

The Company pays TPRS fees for marketing services. For the year ended December
31, 1999, these fees amounted to approximately $1,840,000. Inter-company
eliminations of approximately $920,000 resulting from the Company's 50%
ownership in TPRS result in a net expense to the Company of $920,000.

F-13
<PAGE> 91
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 8: LONG-TERM DEBT

On December 16, 1998, WPS Aviation assumed from Shamrock Aviation, all the
rights and obligations of a purchase agreement ("Challenger Purchase Agreement")
dated July 8, 1998, relating to the purchase of a Canadair 604 aircraft. On
December 17, 1998, WPS Aviation entered into a ten-year, amortizing loan
agreement with General Electric Capital Corporation to finance the obligations
of the Challenger Purchase Agreement. The loan was for the principal sum of
$17,340,000 at a fixed interest rate of 6.87% to be paid in one hundred and
twenty monthly installments of principal and interest of $133,326 and a final
installment of $11,621,076 plus any outstanding principal and interest. The
first monthly periodic installment was due and paid on January 17, 1999 and the
following installments and the final installment due are payable on the same day
of each succeeding month.

In addition, in accordance with the Challenger Purchase Agreement, additional
amounts of $891,037 and $891,038 were paid in February 1999 and April 1999,
respectively. Additional amounts, as discussed below, were borrowed to finance
these payments. The aircraft was placed in service on April 8, 1999.

On February 10, 1999, WPS Aviation entered into an additional ten year,
amortizing loan agreement with General Electric Capital Corporation for the
principal sum of $757,382 at a fixed interest rate of 6.89% to be paid in an
initial installment of $1,015 and one hundred and eighteen monthly installments
of principal and interest of $5,869 and a final installment of $507,635 plus any
outstanding principal and interest. The first monthly periodic installment was
paid on March 17, 1999 and the remaining installments due are payable on the
same day of each succeeding month.

On March 30, 1999, WPS Aviation entered into an additional ten year, amortizing
loan agreement with General Electric Capital Corporation for the principal sum
of $1,522,618 at a fixed interest rate of 7.35% to be paid in an initial
installment of $5,285 and one hundred and sixteen monthly installments of
principal and interest of $12,380 and a final installment of $1,021,114 plus any
outstanding principal and interest. The first monthly periodic installment was
paid on May 17, 1999 and the remaining installments due are payable on the same
day of each succeeding month.

Future principal payments on the loans as of December 31, 1999 are as follows:

<TABLE>
<S> <C>
2000........................................................ $ 511,307
2001........................................................ 547,769
2002........................................................ 586,833
2003........................................................ 628,683
2004........................................................ 673,519
Thereafter.................................................. 16,209,534
-----------
$19,157,645
===========
</TABLE>

All loans are collateralized by the Challenger aircraft.

Interest expense on these loans totaled $1,301,584 for the year ended December
31, 1999.

The fair value of these loans based on discounted cash flow techniques as of
December 31, 1999, amounts to $18 million.

Provisions of the loan agreements require the Company to maintain certain
financial ratios and a minimum level of $15 million of tangible net worth (as
defined in the loan agreements).

F-14
<PAGE> 92
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9: COMMITMENTS AND CONTINGENCIES

At December 31, 1999, the Company was contingently liable on three irrevocable
standby letters of credit. One letter of credit was in the amount of $1,000,000
in favor of Wachovia Corporate Services Inc. ("Wachovia") which collateralizes
amounts received from clients that Wachovia wires daily to the Company's account
at The Bank of Bermuda. The second letter of credit is in the amount of $41,335,
in favor of WPSI's landlord. The third letter of credit is in the amount of
$699,033 in favor of WPS Europe's landlord. This amount is guaranteed by the
Company, and is collateralized by a fixed deposit cash account, which will
remain intact over the term of the lease. This amount is reflected in other
assets at December 31, 1999.

In February 1999, the Company entered into an agreement with Shamrock in which
Shamrock has agreed that it will delay the sale of an aircraft owned by Shamrock
so that such aircraft will continue to be available for use in the Company's
business. At the same time, Shamrock agreed to release WPSI from any and all
obligations to participate in the purchase of an additional aircraft for
approximately $37 million, delivery of which is scheduled for early 2001. In
return, the Company has agreed to indemnify Shamrock for any loss in value of
the aircraft Shamrock has agreed not to sell from the time the agreement was
made until the aircraft is sold or replaced (which is currently expected to
occur in March 2001). The value of that aircraft as of the date of Shamrock's
agreement with the Company was estimated to be $27,000,000. Based upon that
appraisal received, management does not believe that this agreement will have
any material adverse effect on the Statement of Financial Condition or results
of operations of the Company.

NOTE 10: NOTES RECEIVABLE FOR COMMON STOCK

Historic WPS

On January 1, 1993, Historic WPS issued 366,100 shares of common stock to
certain employees in exchange for collateralized promissory notes totaling
$8,833,830. The notes are full recourse, bear interest at 6.5% per annum and are
secured by the shares issued. The principal amount of such notes are payable in
quarterly installments until paid in full. Each principal payment, as defined in
each of the promissory notes, is paid in an equal amount equal to one fifteenth
of the original purchase amount reduced by any prepaid principal amount.
However, if the amount of the distributions, as defined in the pledge and
assignment agreement between the borrower and Historic WPS, payable to the
borrowers for the calendar quarter immediately preceding the relevant payment
date, is not sufficient to pay the principal payments and interest payments due,
the borrowers will make a principal payment equal to the greater of the amount
equal to the assigned payment, as defined, less the interest payment due or an
amount equal to one twenty-third of the original principal amount reduced by any
prepaid principal amount.

On January 1, 1996, Historic WPS issued 97,750 shares of common stock to an
employee in exchange for cash and an installment note totaling $4,371,771. The
note is full recourse, bears interest at 10% per annum and is collateralized by
the shares issued.

During 1997, Historic WPS issued an additional 52,360 shares of common stock in
exchange for cash, a short-term, non-interest bearing note of $27,006 and
installment notes totaling $2,847,824. The installment notes are full recourse,
bear interest at 10% per annum and are collateralized by the shares issued.

F-15
<PAGE> 93
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Upon the global consolidation of Historic WPS at June 30, 1998, all of the
outstanding common stock of Historic WPS was exchanged for shares of common
stock of WPS II, Inc. As a result of this exchange, the outstanding notes
receivable for common stock were transferred to WPS II, Inc. Simultaneously with
the exchange of shares, WPS II, Inc. entered into a promissory note with the
Company, the terms of which match the notes receivable for common stock
transferred to WPS II, Inc.

Pursuant to the Purchase Agreement, in the event a purchaser, as defined, is not
in the employment of, or does not serve as a director of the Company or any of
its affiliates, the purchaser, as defined, shall forfeit to the Company all
rights to shares that have not vested at the time of such termination. The
remaining balance of the outstanding notes receivable related to the unvested
shares will be cancelled.

Capital Managers Limited

On October 15, 1997, Capital Managers accepted subscriptions for 2,579,862
shares of common stock, to be issued on January 1, 1998, to employees of the
Company in exchange for cash and secured promissory notes totaling $12,357,539.
These notes are full recourse, bear interest at 10% per annum and are
collateralized by the shares issued. Each principal payment, as defined in each
of the promissory notes, is equal to one twenty-eighth of the total outstanding
note receivable.

On April 1, 1998, Capital Managers issued an additional 761,810 shares of common
stock for installment notes totaling $5,248,871. The installment notes are full
recourse, bear interest at 10% per annum and are collateralized by the shares
issued. The repayment terms associated with these notes are the same as for the
notes issued in 1997.

In connection with the merger of Capital Managers into WPS & Co., Ltd. on
October 31, 1998, all of the Capital Managers outstanding notes receivable for
common stock were transferred to WPS & Co., Ltd.

W.P. Stewart & Co., Ltd.

During the year ended December 31, 1999, W.P. Stewart & Co., Ltd. issued an
additional 1,144,500 shares of common stock, to certain employees and employees
of affiliated entities, for installment notes totaling $12,736,845. The
installment notes are full recourse, bear interest at 10% per annum and are
collateralized by the shares issued. Each principal payment, as defined in each
of the promissory notes, is equal to one twenty-eighth of the total outstanding
note receivable. The repayment terms associated with these notes are the same as
described for all notes issued in prior years.

In addition, pursuant to the terms of the purchase agreements, during the year
ended December 31, 1999, 582,089 unvested common shares of former employees were
repurchased and their installment notes totaling $4,708,852 were cancelled.

All the notes discussed above are collateralized by the respective common stock
issued, and are subject to vesting and repurchase provisions.

F-16
<PAGE> 94
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The total amounts outstanding on December 31, 1999, 1998 and 1997 for each of
the above transactions are as follows:

<TABLE>
<CAPTION>
ORIGINAL
HISTORIC WPS LOAN AMOUNT 1999 1998 1997
------------ ----------- ---- ---- ----
<S> <C> <C> <C> <C>
1993.................. $8,833,830 $ 1,041,314
1996.................. 4,371,771 3,867,439
1997.................. 2,874,830 2,776,467
----------- ----------- -----------
-- -- 7,685,220
----------- ----------- -----------
<CAPTION>
WPS II, INC.
------------
<S> <C> <C> <C> <C>
June 30, 1998......... 16,080,431 $ 4,935,159 $ 6,530,334
----------- -----------
<CAPTION>
CAPITAL MANAGERS
----------------
<S> <C> <C> <C> <C>
1997.................. 12,357,539 8,287,992 10,611,256 11,877,400
1998.................. 5,248,871 2,813,083 4,889,946 --
----------- ----------- -----------
11,101,075 15,501,202 11,877,400
----------- ----------- -----------
</TABLE>

<TABLE>
W.P. STEWART & CO., LTD.
------------------------
<S> <C> <C> <C> <C>
1999.................. 12,736,845 9,604,343 -- --
----------- ----------- -----------
$25,640,577 $22,031,536 $19,562,620
=========== =========== ===========
</TABLE>

Future minimum payments expected to be received on the notes, as of December 31,
1999, are as follows:

<TABLE>
<S> <C>
2000........................................................ $ 4,240,910
2001........................................................ 4,332,820
2002........................................................ 4,415,972
2003........................................................ 4,507,754
2004........................................................ 4,609,066
Thereafter (through 2006)................................... 3,534,055
-----------
$25,640,577
===========
</TABLE>

Interest income on the notes was $2,667,825, $2,181,830 and $1,243,785 for the
years ended December 31, 1999, 1998 and 1997, respectively.

NOTE 11: SHAREHOLDERS' VOTING RIGHTS

The Company's Bye-Laws limit the voting power of natural persons to 5%, and the
voting power of other entities, "groups" (as defined in the Exchange Act) and
persons other than natural persons (legal persons) to 9.5%, of the votes
attributable to the outstanding capital shares of the Company regardless of how
many shares of capital stock (including common shares) they own or control. This
restriction does not apply to parties who were shareholders immediately before
the offerings, including WPS II, Inc. and certain individuals designated by the
Company's Board of Directors who are currently affiliated with the Company.
Votes that could have been cast by shareholders but for these voting
restrictions are allocated to the other holders of the common shares pro-rata
based on the number of shares they hold, except that no shareholder subject to
the restrictions may be allocated more than 5% (for natural persons) or 9.5%
(for

F-17
<PAGE> 95
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

legal persons, entities or groups) of the total voting power. The Company's
Board of Directors may approve the exemption of other persons or groups from
this restriction.

In addition, the Bye-Laws provide that no person or group (other than WPS II,
Inc. or its affiliates, direct or indirect subsidiaries of WPS & Co., Ltd.,
certain employee benefit plans designated by the Board of Directors which may be
established by WPS & Co., Ltd. or as otherwise exempted by the Board of
Directors) deemed to be a beneficial owner of the common shares may vote more
than 20% of the total number of votes attributable to the common shares
outstanding.

NOTE 12: INCOME TAXES

Under current Bermuda law, the Company and its Bermuda subsidiaries are not
required to pay any taxes on their income or capital gains. The Company and its
Bermuda subsidiaries will be exempt from taxation until March 2016.

Income from the Company's operations in the United States and from U.S.
subsidiaries of the Company is subject to income taxes imposed by U.S.
authorities.

The provision for income taxes detailed below represents the Company's estimate
of taxes on income applicable to U.S. jurisdictions and is calculated at rates
equal to the statutory income tax rate in each jurisdiction.

The income tax provision for the years ended December 31, 1999, 1998 and 1997 is
as follows:

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Federal............................................ $6,190,927 $3,112,000 $ --
State and Local.................................... 2,219,031 5,542,000 3,854,292
---------- ---------- ----------
$8,409,958 $8,654,000 $3,854,292
========== ========== ==========
A reconciliation of the statutory Bermuda rate and the effective rate is as follows:
</TABLE>

<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Statutory Bermuda rate...................................... 0.0% 0.0% 0.0%
Earnings in jurisdictions taxed at rates different from the
statutory Bermuda rate.................................... 8.2% 10.7 7.8
--- ---- ---
8.2% 10.7% 7.8%
=== ==== ===
</TABLE>

Prior to June 30, 1998, Historic WPS operated as an S Corporation under the
provisions of the United States Internal Revenue Code and, accordingly, was not
subject to U.S. federal income tax; however, it was subject to certain state and
local income taxes.

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. At December 31, 1999, a
deferred tax asset of $422,000, arising from currently non-deductible charitable
contributions, is fully subject to a valuation allowance due to uncertainty
regarding the extent to which such contributions will be deductible in the
five-year carryover period provided by U.S. law.

F-18
<PAGE> 96
NOTES TO THE COMBINED/CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 13: PENSION BENEFITS

The Company sponsors a defined contribution profit-sharing plan covering
substantially all employees. Contributions to the profit-sharing plan are
determined quarterly by the Board of Directors. In addition, on January 1, 1997
the Company started a defined contribution money-purchase plan. This plan covers
substantially all employees who meet the minimum age and service requirements.
Contributions cannot exceed $30,000 annually, per employee.

Total employer contributions amounted to $867,304, $942,838 and $948,156 for the
years ended December 31, 1999, 1998, and 1997, respectively. Participants are
immediately vested in their account balance.

NOTE 14: LEASE COMMITMENTS

The Company has several lease agreements in various locations including Bermuda,
New York, Maine and London. The lease agreements are for various periods through
December 31, 2020. The leases are subject to escalation charges based on
increases in real estate taxes and maintenance costs.

Future minimum rental commitments under non-cancellable operating leases in
effect as of December 31, 1999 are as follows:

<TABLE>
<S> <C>
2000........................................ $ 1,747,303
2001........................................ 2,008,743
2002........................................ 2,008,743
2003........................................ 2,029,277
2004........................................ 2,013,857
Thereafter.................................. 11,810,792
-----------
$21,618,715
===========
</TABLE>

Total rent expense for all operating leases were $1,640,838, $1,341,508 and
$1,184,270, for the years ended December 31, 1999, 1998 and 1997, respectively.

NOTE 15: GEOGRAPHIC AREA DATA

The Stewart Group's primary business, investment advisory services provided to
clients located throughout the world, consists of two geographic segments, as
follows:

<TABLE>
<CAPTION>
FEE REVENUE
-------------------------------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
U.S. ................................. $115,187,546 $ 94,620,595 $72,547,396
Non U.S. ............................. 38,119,130 26,422,445 16,032,752
------------ ------------ -----------
Total....................... $153,306,676 $121,043,040 $88,580,148
============ ============ ===========
</TABLE>

F-19
<PAGE> 97

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of W.P. Stewart & Co., Ltd.

We have reviewed the accompanying consolidated statements of financial condition
of W.P. Stewart & Co., Ltd. and its subsidiaries as of September 30, 2000 and
1999, and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the nine-month periods then
ended appearing on pages F-21 through F-37 of this Registration Statement on
Form F-1. These financial statements are the responsibility of the Company's
management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should
be made to the accompanying consolidated interim financial statements for them
to be in conformity with accounting principles generally accepted in the United
States of America.

PricewaterhouseCoopers

Hamilton, Bermuda
November 17, 2000

F-20
<PAGE> 98

W.P. STEWART & CO., LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

SEPTEMBER 30, 2000 AND 1999

(UNAUDITED)

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
ASSETS:
Cash and cash equivalents................................... $ 39,139,483 $ 33,047,031
Fees receivable............................................. 4,818,865 2,469,488
Receivable from broker-dealer............................... 1,387,714 3,189,328
Investments in unconsolidated affiliates (net of accumulated
amortization of $481,754 and $69,040 for 2000 and 1999,
respectively)............................................. 11,775,504 7,078,706
Receivables from affiliates, net............................ 61,162 3,006,457
Investments owned, at market (cost $571,840 for 2000 and
1999)..................................................... 879,435 619,196
Investment in aircraft (net of accumulated depreciation of
$7,332,090 and $2,138,877 for 2000 and 1999,
respectively)............................................. 15,119,385 20,312,598
Goodwill (net of accumulated amortization of $295,341 and
$53,583 for 2000 and 1999, respectively).................. 5,835,334 2,573,901
Customer list (net of accumulated amortization of $419,959
and $0 for 2000 and 1999, respectively)................... 7,390,329 --
Furniture, equipment and leasehold improvements (net of
accumulated depreciation and amortization of $1,140,504
and $584,039 for 2000 and 1999, respectively)............. 5,048,838 3,572,669
Interest receivable on shareholders' notes.................. 608,135 1,091,096
Other assets................................................ 4,253,772 601,744
------------ ------------
$ 96,317,956 $ 77,562,214
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Loans payable............................................. $ 18,777,160 $ 19,280,090
Employee compensation and benefits payable................ 5,759,222 7,105,774
Marketing fees payable.................................... 4,168,243 4,355,700
Taxes payable............................................. 2,240,742 7,351,314
Professional fees payable................................. 3,591,938 2,825,603
Dividends payable......................................... 6,627 115,158
Accrued expenses and other liabilities.................... 5,915,894 3,101,056
------------ ------------
40,459,826 44,134,695
------------ ------------
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity:
Common stock (see Notes 1 and 2)
$.001 par value (125,000,000 shares authorized,
47,291,118 and 45,971,836 shares issued and
outstanding for 2000 and 1999, respectively)......... 47,291 45,972
Additional paid-in-capital................................ 84,066,155 69,744,458
Contingently returnable shares............................ (21,045,884) (17,702,773)
Accumulated other comprehensive income.................... (245,655) --
Retained earnings......................................... 15,003,738 10,071,236
------------ ------------
77,825,645 62,158,893
------------ ------------
Less: shareholders' notes receivable........................ (21,967,515) (28,731,374)
------------ ------------
55,858,130 33,427,519
------------ ------------
$ 96,317,956 $ 77,562,214
============ ============
</TABLE>

See accompanying notes and accountants' review report.

F-21
<PAGE> 99

W.P. STEWART & CO., LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

(UNAUDITED)

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Revenue:
Fees...................................................... $113,209,560 $116,988,025
Commissions............................................... 33,494,326 27,858,316
Interest and other........................................ 4,798,384 3,663,107
------------ ------------
151,502,270 148,509,448
------------ ------------
Expenses:
Employee compensation and benefits........................ 28,635,480 29,487,390
Marketing fees............................................ 7,999,444 10,340,872
Commissions, clearance and trading........................ 6,849,552 6,377,071
Research and administration............................... 11,082,587 8,858,826
Depreciation and amortization............................. 5,513,789 2,564,322
Other operating........................................... 10,842,348 11,462,643
------------ ------------
70,923,200 69,091,124
------------ ------------

Income before taxes......................................... 80,579,070 79,418,324
Provision for taxes......................................... 8,008,361 9,564,000
------------ ------------
Net income.................................................. $ 72,570,709 $ 69,854,324
============ ============
Earnings Per Share:
Basic Earnings Per Share.................................. $ 1.74 $ 1.75
============ ============
Diluted Earnings Per Share................................ $ 1.61 $ 1.62
============ ============
</TABLE>

See accompanying notes and accountants' review report.

F-22
<PAGE> 100

W.P. STEWART & CO., LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

(UNAUDITED)

<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK CONTINGENTLY ADDITIONAL OTHER
------------ RETURNABLE PAID-IN COMPREHENSIVE RETAINED
SHARES AMOUNT SHARES CAPITAL INCOME EARNINGS
------ ------ ------------ ---------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1999......... 47,225,336 $47,225 $(28,061,175) $81,646,968 $ (13,920) $ 10,922,661
Issuance of common stock, at $.001
par value W.P. Stewart & Co., Ltd.
Cash.............................. 59,189 59 770,582
Notes receivable.................. 78,093 78 1,016,693
Contingently returnable shares.... 7,015,291 1,449,870
Repurchase of common stock, at $.001
par value W.P. Stewart & Co.,
Ltd............................... (7,714) (7) (100,433)
Cancellation of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd.......................... (63,786) (64) (717,525)
Net income.......................... 72,570,709
Dividends........................... (68,489,632)
Other comprehensive income.......... (231,735)
Proceeds from notes receivable for
common stock......................
---------- ------- ------------ ----------- --------- ------------
BALANCE AT SEPTEMBER 30, 2000........ 47,291,118 $47,291 $(21,045,884) $84,066,155 $(245,655) $ 15,003,738
========== ======= ============ =========== ========= ============
BALANCE AT DECEMBER 31, 1998......... 43,255,656 $43,256 $37,069,794 $ -- $ 1,998,118
Issuance of common stock, at $.001
par value W.P. Stewart & Co., Ltd.
Acquisitions...................... 2,146,552 2,146 22,894,136
Cash.............................. 8,217 8 118,234
Notes receivable.................. 1,122,000 1,122 13,829,658
Contingently returnable shares.... (17,702,773)
Cancellation of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd. ...................... (560,589) (560) (4,398,907)
Non cash compensation............. 231,543
Net income........................ 69,854,324
Dividends............................ (61,781,206)
Proceeds from notes receivable for
common stock........................
---------- ------- ------------ ----------- --------- ------------
BALANCE AT SEPTEMBER 30, 1999........ 45,971,836 $45,972 $(17,702,773) $69,744,458 $ -- $ 10,071,236
========== ======= ============ =========== ========= ============

NOTES
RECEIVABLE TOTAL
---------- -----
<S> <C> <C>
BALANCE AT DECEMBER 31, 1999......... $(25,640,577) $ 38,901,182
Issuance of common stock, at $.001
par value W.P. Stewart & Co., Ltd.
Cash.............................. 770,641
Notes receivable.................. (1,016,771) --
Contingently returnable shares.... 8,465,161
Repurchase of common stock, at $.001
par value W.P. Stewart & Co.,
Ltd............................... (100,440)
Cancellation of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd.......................... 717,589 --
Net income.......................... 72,570,709
Dividends........................... (68,489,632)
Other comprehensive income.......... (231,735)
Proceeds from notes receivable for
common stock...................... 3,972,244 3,972,244
------------ ------------
BALANCE AT SEPTEMBER 30, 2000........ $(21,967,515) $ 55,858,130
============ ============
BALANCE AT DECEMBER 31, 1998......... $(22,031,536) $ 17,079,632
Issuance of common stock, at $.001
par value W.P. Stewart & Co., Ltd.
Acquisitions...................... 22,896,282
Cash.............................. 118,242
Notes receivable.................. (13,830,780) --
Contingently returnable shares.... (17,702,773)
Cancellation of common stock, at
$.001 par value W.P. Stewart &
Co., Ltd. ...................... 4,399,467 --
Non cash compensation............. 231,543
Net income........................ 69,854,324
Dividends............................ (61,781,206)
Proceeds from notes receivable for
common stock........................ 2,731,475 2,731,475
------------ ------------
BALANCE AT SEPTEMBER 30, 1999........ $(28,731,374) $ 33,427,519
============ ============
</TABLE>

See accompanying notes and accountants' review report.

F-23
<PAGE> 101

W.P. STEWART & CO., LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

(UNAUDITED)

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 72,570,709 $ 69,854,324
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................... 5,513,789 2,564,322
Equity in income adjustment in unconsolidated
affiliates............................................. (675,895) (864,440)
Non cash compensation................................... -- 231,543
Acquisition adjustment NSMM............................. -- 270,192
Changes in operating assets and liabilities:
Fees receivable......................................... (1,423,219) 2,036,973
Receivable from broker-dealer........................... 799,419 (863,105)
Investments owned, at market............................ (289,725) (11,616)
Other assets............................................ 112,175 1,779,065
Employee compensation and benefits payable.............. 3,978,053 7,105,774
Marketing fees payable.................................. 309,689 2,384,943
Taxes payable........................................... 138,670 3,947,314
Professional fees payable............................... 759,704 435,918
Accrued expenses and other liabilities.................. 1,887,745 2,026,705
------------ ------------
Net cash provided by operating activities........... 83,681,114 90,897,912
------------ ------------
Cash flows (used in) investing activities:
Investments in unconsolidated affiliates.................. -- (618,242)
Purchase of intangible assets............................. (2,945,247) (1,895,253)
Receivables from affiliates, net.......................... (24,683) (3,006,457)
Investment in aircraft.................................... -- (1,769,400)
Purchase of furniture, equipment and leasehold
improvements............................................ (1,779,105) (2,019,540)
Payables to affiliates, net............................... -- (87,061)
------------ ------------
Net cash (used in) investing activities............. (4,749,035) (9,395,953)
------------ ------------
Cash flows (used for) financing activities:
Proceeds from loans payable............................... -- 2,280,000
Payments on loans payable................................. (380,485) (339,911)
Proceeds from issuance of common stock.................... 770,641 118,242
Repurchase of common stock................................ (100,440) --
Proceeds from notes receivable for common stock........... 3,972,244 2,731,475
Interest receivable on shareholders' notes................ (71,770) (710,941)
Dividends to shareholders................................. (68,542,864) (61,666,048)
------------ ------------
Net cash (used for) financing activities............ (64,352,674) (57,587,183)
Effect of exchange rate changes in cash..................... (231,735) --
------------ ------------
Net increase in cash and cash equivalents................... 14,347,670 23,914,776
Cash and cash equivalents, beginning of period.............. 24,791,813 9,132,255
------------ ------------
Cash and cash equivalents, end of period.................... $ 39,139,483 $ 33,047,031
============ ============
Supplemental Disclosures of Cash Flows Information
Cash Paid During the Period for:
Income taxes.............................................. $ 6,195,376 $ 5,616,686
============ ============
Interest expense.......................................... $ 983,688 $ 970,379
============ ============
</TABLE>

Supplemental Schedule of Noncash Investing and Financing Activities:

As discussed in Note 2, for the nine months ended September 30, 1999, the
Company issued shares of common stock with a fair value of $1,939,675,
$2,486,016 and $299,628 to acquire its investment in NS Money Management
(Bermuda) Limited, TPRS Services N.V. and Bowen Asia Limited, respectively.

For the nine months ended September 30, 2000, the Company issued shares of
common stock with a fair value of $2,340,553, $3,124,800 and $2,999,808 to
acquire its investment in NS Money Management (Bermuda) Limited, First Long
Island Investors, Inc. and TPRS Services N.V., respectively.

As discussed in Note 10, the Company issued common stock for notes receivable
for the nine months ended September 30, 2000 and 1999, in the amounts of
$1,016,771 and $13,830,780, respectively, and cancelled outstanding notes of
$717,589 and $4,399,647 for the nine months ended September 30, 2000 and 1999,
respectively.

At September 30, 2000 and 1999, the Company had dividends payable to
shareholders of $6,627 and $115,158, respectively.

See accompanying notes and accountants' review report.

F-24
<PAGE> 102

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1: BASIS OF PRESENTATION

The accompanying consolidated financial statements of W.P. Stewart & Co., Ltd.
("WPS & Co., Ltd." and, together with its subsidiaries and predecessors, the
"Company") are presented on a consolidated basis and include the historical
operations of the Company.

In our opinion, the unaudited financial statements include all adjustments,
consisting only of normal recurring adjustments, that are necessary for a fair
presentation of our financial position and results of operations. Operating
results for the nine months ended September 30, 2000 are not necessarily
indicative of results that may be expected for the entire year or any other
period.

NOTE 2: BACKGROUND AND ORGANIZATION

For the nine months ended September 30, 2000 and 1999, the consolidated Company
consisted of several affiliated entities worldwide under common control which
provide investment advisory and related securities brokerage services. The
background and organization of the entities presented in the Company's
consolidated financial statements is as follows:

W.P. Stewart & Co., Inc. ("Historic WPS") was incorporated in Delaware on August
2, 1973. Historic WPS was a registered investment adviser under the Investment
Advisers Act of 1940 and provided investment management services to high net
worth individuals and institutions from its inception until it ceased operations
on June 30, 1998.

Global Reach Limited ("Global Reach"), a Bermuda holding company, was
incorporated as an exempt company under the laws of Bermuda on August 16, 1996.
Global Reach acquired effective control of W.P. Stewart & Company, Limited on
August 26, 1996 and, accordingly, since such date W.P. Stewart & Company,
Limited has been reflected on a consolidated basis in the financial statements
of Global Reach.

W.P. Stewart Securities Limited ("WPSSL") was incorporated as an exempt company
under the laws of Bermuda on January 2, 1996. Initially it was a subsidiary of
W.P. Stewart & Company, Limited (currently known as WPSAM), and was acquired by
Global Reach on July 1, 1997. WPSSL acts as an introducing broker, clearing all
transactions with, and for, customers of its affiliates on a fully disclosed
basis through an independent clearing broker.

On October 21, 1997, Global Reach changed its name to W.P. Stewart & Co., Ltd.
("WPSCL") and W.P. Stewart & Company, Limited changed its name to W.P. Stewart
Asset Management Ltd.

W.P. Stewart Fund Management Limited ("WPS Dublin"), a wholly-owned subsidiary
of WPSAM, was incorporated in Ireland on January 27, 1997. The primary business
of WPS Dublin is providing management and administrative services to investment
funds. WPS Dublin is the manager of WP Stewart Funds plc and WP Stewart Global
Fund plc, two umbrella type open-ended investment companies regulated by the
Central Bank of Ireland.

WPS III, Inc. (currently known as W.P. Stewart & Co., Inc. ("WPSI")) was
incorporated in Delaware on May 15, 1998 and became a wholly-owned subsidiary of
WPS & Co., Ltd. on

F-25
<PAGE> 103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

June 30, 1998. WPSI is also a registered investment adviser under the Investment
Advisers Act of 1940. Its principal business is to provide investment research
and sub-advisory services to the Company.

WPS Aviation Holdings LLC ("WPS Aviation") was formed in Delaware on November
12, 1998, and is a wholly-owned subsidiary of WPSI.

On March 13, 1998, WPSCL changed its name to Capital Managers Limited ("Capital
Managers").

W.P. Stewart & Co. (Europe), Ltd. ("WPS Europe") formerly known as W.P. Stewart
Global Management, Ltd. ("WPSGM") was formed on September 14, 1998 in the United
Kingdom under the laws of England and Wales, as a private limited company. WPS
Europe is registered with the Investment Management Regulatory Organisation
Limited (IMRO). Its principal business is to provide investment research and
sub-advisory services to the Company.

Global Consolidation Activities

On June 1, 1999, the Company consummated its acquisition of all of the
outstanding capital stock of NS Money Management (Bermuda) Limited, currently
known as NS Money Management Ltd., ("NSMM"), a Bermuda holding company, in
exchange for 898,831 common shares of the Company, subject to repurchase
provisions. NSMM operates as an investment adviser for clients located
throughout the world.

F-26
<PAGE> 104
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

The purchase price for each acquisition is determined by the sum of:

1.the number of shares that are subject to repurchase at each anniversary
date multiplied by the fair value of those shares at that date and

2.the cash dividends paid on the remaining shares subject to repurchase.

The following table shows information for each acquisition as of and for the
nine months ended September 30, 2000.

<TABLE>
<CAPTION>
CASH DIVIDENDS
AGGREGATE SHARES NOT SHARES PAID ON SHARES
NUMBER OF SUBJECT TO SUBJECT TO SUBJECT TO PURCHASE INTANGIBLE
ACQUISITION SHARES REPURCHASE REPURCHASE REPURCHASE PRICE ALLOCATION AMORTIZATION
<S> <C> <C> <C> <C> <C> <C>
TPRS 1,152,000 460,800 691,200 $1,043,712 $8,432,640 $346,419
NSMM 898,831 359,532 539,299 $ 814,341 $5,702,485 $220,070
FLII 1,200,000 480,000 720,000 $1,087,200 $7,810,288 $365,852
</TABLE>

NOTE 3: ACCOUNTING POLICIES

The consolidated financial statements are presented in conformity with
accounting principles generally accepted in the United States of America. The
functional currency for the Company and its affiliates is the U.S. dollar with
the exception of WPS Europe for which the pound sterling is the functional
currency.

The process of preparing consolidated financial statements in conformity with
generally accepted accounting principles in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the dates of the consolidated financial statements, as well as
the reported amounts of revenue and expenses during the reporting periods.
Actual results may differ from those estimates.

Principles of Consolidation

The Company consolidates all affiliated entities in which it has a majority
ownership interest or maintains effective control. All material inter-company
transactions have been eliminated.

Business Combinations

The Company's policy is to account for purchase business combinations as of the
date the acquisitions are consummated.

Cash and Cash Equivalents

The Company considers cash in banks and short-term highly liquid investments
with an original maturity of three months or less at the date of purchase to be
cash equivalents. The Company

F-27
<PAGE> 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

had cash at a certain bank in excess of United States federally insurable limits
and is exposed to credit risk resulting from this concentration of cash.

Investments in Unconsolidated Affiliates

The Company's investments in unconsolidated affiliates which are not majority
owned or controlled are accounted for using the equity method.

Investments Owned, at Market

Investments in equity securities have been classified in accordance with
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", and as such are recorded at quoted
market values. Transactions are recorded on a trade date basis with the
resulting unrealized gains and losses recorded in income.

Furniture, Equipment, Leasehold Improvements and Investment in Aircraft

Revenue Recognition

Fees

Commissions

Commissions on brokerage activities and related trading costs are recorded
on a trade date basis.

Income Taxes

Foreign Currency Translation

The Company accounts for foreign currency translation in accordance with
Statement of Financial Accounting Standards No. 52, "Foreign Currency
Translation". Assets and liabilities are translated at the exchange rate in
effect at year-end, and revenue and expenses are translated at the average rates
of exchange prevailing during the year. Gains or losses resulting from foreign
currency transactions are included in net income. The United States dollar
effect that arises from translating the net assets of WPS Europe is recorded in
accumulated other comprehensive income, a separate component of shareholder's
equity.

F-28
<PAGE> 106
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

Customer List and Goodwill

Earnings Per Share

Basic earnings per share are calculated using the weighted average number of
shares outstanding. Diluted earnings per share are calculated using the treasury
stock method.

NOTE 4: EARNINGS PER SHARE

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Basic Earnings Per Share:
Net income............................................. $72,570,709 $69,854,324
=========== ===========
Weighted average basic shares outstanding.............. 41,838,622 39,864,025
----------- -----------
Net income per share................................... $ 1.74 $ 1.75
=========== ===========
Diluted Earnings Per Share:
Net income............................................. $72,570,709 $69,854,324
=========== ===========
Weighted average basic shares outstanding.............. 41,838,622 39,864,025
Add: Unvested and restricted shares.................... 3,388,746 3,299,445
----------- -----------
Weighted average diluted shares outstanding............ 45,227,368 43,163,470
----------- -----------
Net income per share................................... $ 1.61 $ 1.62
=========== ===========
</TABLE>

On September 30, 2000 and 1999, respectively, 47,291,118 and 45,971,836 shares
were issued and outstanding. The shareholders of record are entitled to full
voting rights (see note 11) and dividends on these shares; 3,339,077 and
4,166,891 of these shares were unvested on September 30, 2000 and 1999,
respectively.

NOTE 5: COMPREHENSIVE INCOME

The following table details the components of comprehensive income as described
in Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive
Income".

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Net income.................................................. $72,570,709 $69,854,324
Other comprehensive income, net of tax
Foreign currency translation adjustment................ (231,735) --
----------- -----------
Comprehensive income........................................ $72,338,974 $69,854,324
=========== ===========
</TABLE>

F-29
<PAGE> 107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

NOTE 6: INVESTMENTS IN UNCONSOLIDATED AFFILIATES

Investments in unconsolidated affiliates include the following:

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Investment in TPRS Services, N.V. .......................... $ 8,412,793 $4,686,856
Investment in Bowen Asia Limited............................ 2,391,387 1,317,870
Investment in Kirk Management Ltd. ......................... 971,324 1,073,980
----------- ----------
Total....................................................... $11,775,504 $7,078,706
=========== ==========
</TABLE>

In 1994, Historic WPS purchased, for $250,000, a 10% interest in Bowen Asia
Limited ("Bowen"), a company incorporated in the British Virgin Islands. In
1996, an additional 1% interest in Bowen was purchased for $25,000, and, during
1997 an additional 11.5% interest was purchased for $125,000, increasing the
total investment to a 22.5% interest. During the year ended December 31, 1999,
the Company purchased an additional interest in Bowen for $1,229,591 ($929,963
and 27,769 shares of the Company's stock), increasing the Company's investment
to 40%.

NOTE 7: RELATED PARTY TRANSACTIONS

Research and administrative expenses include travel expenses of approximately
$1,724,000 and $2,076,000 for the nine months ended September 30, 2000 and 1999,
respectively, paid to Shamrock Aviation, Inc. ("Shamrock"), a company owned by
principal shareholders of the Company (see Note 8). The terms of an operating
agreement with Shamrock in effect during the period from 1996 until April 30,
1999 provided that the Company would pay to Shamrock approximately $175,000 per
month for the use of airplanes owned by Shamrock. Since April 30, 1999, the
Company has continued to use one airplane owned by Shamrock and has compensated
Shamrock for its use by paying charter fees.

The Company has entered into an agreement pursuant to which an entity affiliated
with Shamrock has agreed to provide operational and maintenance services at cost
for the Challenger aircraft owned by the Company (see Note 8). Research and
administrative expenses include approximately $1,628,000 and $1,090,000 for the
nine months ended September 30, 2000 and 1999, respectively.

The lease agreement related to the office space located in New York includes
space occupied by several affiliated companies. WPSI is reimbursed on a monthly
basis for rent and other costs associated with the space. Such costs
approximated $148,000 and $206,000 for the nine months ended September 30, 2000
and 1999, respectively.

F-30
<PAGE> 108
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

WPS Dublin serves as the investment manager to an Irish fund solely advised by
WPS Investissements S.A., a Swiss investment money management firm. WPS
Investissements S.A. is principally owned by Mr. William P. Stewart III, a
beneficial owner of a minority interest in the Company. The Company has no
ownership interest in either the Irish fund or WPS Investissements S.A. WPS
Dublin collects and remits to WPS Investissements S.A. all of the advisory fees
in respect of such fund. In addition, the Company pays to WPS Investissements
S.A. a portion of the brokerage commissions earned by the Company from
securities transactions for such fund. Such fees and commissions amounted to
$324,982 and $411,832 for the nine months ended September 30, 2000 and 1999,
respectively.

The Company pays Bowen, a principal owner of which is a beneficial owner of a
minority interest in the Company, fees for solicitation, sub-advisory, and
research services. Such costs approximated $387,957 and $339,319 for the nine
months ended September 30, 2000 and 1999, respectively. The Company entered into
an agreement with Bowen Capital Management, an affiliate of Bowen Asia Limited,
which will entitle the Company to receive solicitation fees for client referrals
to Bowen Capital Management. The Company not yet received any fees under the
terms of this agreement.

WPSI has accrued a contribution of approximately $1,000,000 for the nine months
ended September 30, 1999. These contributions fund the activities of W.P.
Stewart & Co. Foundation, Inc. (the "Foundation"), a private charitable
foundation incorporated on December 7, 1998. The Foundation makes charitable
grants at the discretion of a committee appointed by the Foundation's Board from
members of the Board of Directors of WPSI and WPS & Co., Ltd. This committee has
been created to monitor and direct the Company's charitable activities.

The Company pays TPRS fees for marketing services. These fees amounted to
approximately $3,967,521 and $1,729,000 for the nine months ended September 30,
2000 and 1999, respectively. Inter-company eliminations of approximately
$1,983,760 and $864,500 resulting from the Company's 50% ownership in TPRS
result in a net expense to the Company of $1,983,760 and $864,500 for the nine
months ended September 30, 2000 and 1999, respectively.

NOTE 8: LONG-TERM DEBT

On December 16, 1998, WPS Aviation assumed from Shamrock Aviation, all the
rights and obligations of a purchase agreement ("Challenger Purchase Agreement")
dated July 8, 1998, relating to the purchase of a Canadair 604 Aircraft. On
December 17, 1998, WPS Aviation entered into a ten year, amortizing loan
agreement with General Electric Capital Corporation to finance the obligations
of the Challenger Purchase Agreement. The loan was for the principal sum of
$17,340,000 at a fixed interest rate of 6.87% to be paid in one hundred and
twenty monthly installments of principal and interest of $133,326 and a final
installment of $11,621,076 plus any outstanding principal and interest. The
first monthly periodic installment was due and paid on January 17, 1999 and the
remaining installments due are payable on the same day of each succeeding month.

On February 10, 1999, WPS Aviation entered into an additional ten year,
amortizing loan agreement with General Electric Capital Corporation for the
principal sum of $757,382 at a fixed interest rate of 6.89% to be paid in an
initial installment of $1,015 and one hundred and eighteen monthly installments
of principal and interest of $5,869 and a final installment of $507,635 plus
F-31
<PAGE> 109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

any outstanding principal and interest. The first monthly periodic installment
was paid on March 17, 1999 and the remaining installments due are payable on the
same day of each succeeding month.

Future principal payments on the loans as of September 30, 2000 are as follows:

<TABLE>
<S> <C>
2000 (3 months)............................................. $ 130,822
2001........................................................ 547,769
2002........................................................ 586,833
2003........................................................ 628,683
2004........................................................ 673,519
Thereafter (through 2009)................................... 16,209,534
-----------
$18,777,160
===========
</TABLE>

All loans are collateralized by the Challenger aircraft.

Interest expense on these loans totaled $983,688 and $970,379 for the nine
months ended September 30, 2000 and 1999, respectively.

The fair value of these loans based on discounted cash flow techniques as of
September 30, 2000 amounts to $16 million.

Provisions of the loan agreements require the Company to maintain certain
financial ratios and a minimum level of $15 million of tangible net worth (as
defined in the loan agreements).

NOTE 9: COMMITMENTS AND CONTINGENCIES

At September 30, 2000, the Company was contingently liable on three irrevocable
standby letters of credit. One letter of credit was in the amount of $1,000,000
in favor of Wachovia Corporate Services Inc. ("Wachovia") which collateralizes
amounts received from clients that Wachovia wires daily to the Company's account
at The Bank of Bermuda. The second letter of credit is in the amount of $41,335,
in favor of WPSI's landlord. The third letter of credit is in the amount of
$699,033 in favor of WPS Europe's landlord. This amount is guaranteed by the
Company, and is secured by a fixed deposit cash account, which will remain
intact over the term of the lease. This amount is reflected in other assets at
September 30, 2000.

In February 1999, the Company entered into an agreement with Shamrock in which
Shamrock agreed to delay the sale of an aircraft owned by Shamrock so that such
aircraft will continue to be available for use in the Company's business. At the
same time, Shamrock agreed to release WPSI from any and all obligations to
participate in the purchase of an additional aircraft of approximately $37
million, delivery of which is scheduled for early 2001. In return, the Company
has agreed to indemnify Shamrock for any loss in value of the aircraft Shamrock
has agreed not to sell from the time the agreement was made until the aircraft
is sold or replaced (which is currently expected to occur in March 2001). The
value of that aircraft as of the date of

F-32
<PAGE> 110
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

Shamrock's agreement with the Company is estimated to be $27,000,000. Based upon
that appraisal received, management does not believe that this agreement will
have any material adverse effect on the financial condition or results of
operations of the Company.

The Company has accepted subscriptions from employees to purchase 310,000 shares
of common stock, at a purchase price of $13.02 per share. Pursuant to the
Subscription Agreement, the employee's right to receive shares may not be sold,
assigned or transferred. All shares will be issued on February 1, 2001.

NOTE 10: NOTES RECEIVABLE FOR COMMON STOCK

Historic WPS

On January 1, 1993, Historic WPS issued 366,100 shares of common stock to
certain employees in exchange for collateralized promissory notes totaling
$8,833,830. The notes are full recourse, bear interest at 6.5% per annum and are
collateralized by the shares issued. The principal amount of such notes are
payable in quarterly installments until paid in full. Each principal payment, as
defined in each of the promissory notes, is paid in an equal amount equal to
one-fifteenth of the original purchase amount reduced by any prepaid principal
amount paid. However, if the amount of the distributions, as defined in the
pledge and assignment agreement between the borrower and Historic WPS, payable
to the borrowers for the calendar quarter immediately preceding the relevant
payment date, is not sufficient to pay the principal payments and interest
payments due, the borrowers will make a principal payment equal to the greater
of the amount equal to the assigned payment, as defined, less the interest
payment due or an amount equal to one twenty-third of the original principal
amount reduced by any prepaid principal amount.

Pursuant to the purchase agreement, for shares of common stock, in the event a
purchaser, as defined, is not in the employment of, or does not serve as a
director of the Company or any of its affiliates, the purchaser, as defined,
shall forfeit to the Company all rights to shares that have not vested at the
time of such termination. The remaining balance of the outstanding notes
receivable related to the unvested shares will be cancelled.

Capital Managers Limited

F-33
<PAGE> 111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

10% per annum and are collateralized by the shares issued. Each principal
payment, as defined in each of the promissory notes, is equal to one
twenty-eighth of the total outstanding note receivable.

W.P. Stewart & Co., Ltd.

During the nine months ended September 30, 2000, W.P. Stewart & Co., Ltd. issued
an additional 78,093 shares of common stock, to certain employees and employees
of affiliated entities, for installment notes totaling $1,016,771. The
installment notes are full recourse, bear interest at 10% per annum and are
collateralized by the shares issued. Each principal payment, as defined in each
of the promissory notes, is equal to one twenty-eighth of the total outstanding
note receivable. The repayment terms associated with these notes are the same as
described for all notes issued in prior years.

In addition, pursuant to the terms of the purchase agreements, during the nine
months ended September 30, 2000, 63,786 unvested common shares of former
employees were repurchased and their installment notes totaling $717,589 were
cancelled.

All the notes discussed above are collateralized by the respective common shares
issued, and are subject to vesting and repurchase provisions.

F-34
<PAGE> 112
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

The total amounts outstanding on September 30, 2000 and 1999, for each of the
above transactions are as follows:

<TABLE>
<CAPTION>
ORIGINAL
WPS II, INC. LOAN AMOUNT 2000 1999
------------ ----------- ---- ----
<S> <C> <C> <C>
June 30, 1998 $16,080,331 $ 3,943,076 $ 5,729,833
----------- -----------
<CAPTION>
CAPITAL MANAGERS
----------------
<S> <C> <C> <C>
1997 12,357,539 7,108,980 8,679,716
1998 5,248,871 2,416,640 2,940,378
----------- -----------
9,525,620 11,620,094
----------- -----------
<CAPTION>
W.P. STEWART & CO., LTD.
------------------------
<S> <C> <C> <C>
1999 12,736,845 7,534,993 11,381,547
2000 1,016,771 963,826 --
----------- -----------
8,498,819 11,381,547
----------- -----------
$21,967,515 $28,731,474
=========== ===========
</TABLE>

Future minimum payments expected to be received on the notes as of September 30,
2000 are as follows:

<S> <C>
2000 (3 months)............................................. $ 746,160
2001........................................................ 3,903,387
2002........................................................ 4,438,884
2003........................................................ 4,535,687
2004........................................................ 4,642,542
Thereafter (through 2007)................................... 3,700,855
-----------
$21,967,515
===========
</TABLE>

Interest income on the notes was $2,214,036 and $2,380,323 for the nine months
ended September 30, 2000 and 1999, respectively.

NOTE 11: SHAREHOLDERS' VOTING RIGHTS

The Company's Bye-Laws limit the voting power of natural persons to 5%, and the
voting power of other entities, "groups" (as defined in the U.S. Exchange Act)
and persons other than natural persons (legal persons) to 9.5%, of the votes
attributable to the outstanding shares of the Company regardless of how many of
our shares (including common shares) they own or control. This restriction does
not apply to parties who were shareholders immediately before the offerings,
including WPS II, Inc. and certain individuals designated by the Company's Board
of Directors who are currently affiliated with the Company. Votes that could
have been cast by shareholders but for these voting restrictions are allocated
to the other holders of the common shares pro-rata based on the number of shares
they hold, except that no shareholder subject to the restrictions may receive an
allocation to the extent that it would result in the shareholder holding more
than 5% (for natural persons) or 9.5% (for legal persons, entities or groups) of
the total voting power. The Company's Board of Directors may approve the
exemption of other persons or groups from this restriction.

In addition, the Bye-Laws provide that no person or group (other than WPS II,
Inc. or its affiliates, direct or indirect subsidiaries of the Company, certain
employee benefit plans

F-35
<PAGE> 113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

designated by the Board of Directors which may be established by the Company or
as otherwise exempted by the Board of Directors) deemed to be a beneficial owner
of common shares may vote more than 20% of the total number of votes
attributable to the common shares outstanding.

NOTE 12: INCOME TAXES

Under current Bermuda law, the Company and its Bermuda subsidiaries are not
required to pay any Bermuda taxes on their income or capital gains. The Company
and its Bermuda subsidiaries will be exempt from such forms of taxation in
Bermuda until March 2016.

Income from the Company's operations in the United States and from U.S.
subsidiaries of the Company is subject to income taxes imposed by U.S.
authorities.

The income tax provision for the nine months ended September 30, 2000 and 1999
is as follows:

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Federal................................................... $5,910,107 $6,142,386
State and Local........................................... 2,098,254 3,421,614
---------- ----------
$8,008,361 $9,564,000
========== ==========
A reconciliation of the statutory Bermuda rate and the effective rate is as follows:
</TABLE>

<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Statutory Bermuda rate.................................... 0% 0%
Earnings in jurisdictions taxed at rates different from
the statutory Bermuda rate.............................. 10% 12%
-- --
10% 12%
== ==
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. At September 30, 2000, a
deferred tax asset of $432,000, arising from currently non-deductible charitable
contributions, is fully subject to a valuation allowance due to uncertainty
regarding the extent to which such contributions will be deductible in the
five-year carryover period provided by U.S. law.

NOTE 13: PENSION BENEFITS

The Company sponsors a defined contribution profit-sharing plan (including a
401-K feature), covering substantially all employees. Contributions to the
profit-sharing plan are determined quarterly by the Board of Directors. On
January 1, 1997, the Company started a defined contribution money-purchase plan.
In addition, on January 1, 2000, the company started a defined contribution
Bermuda pension plan. These plans cover substantially all employees who meet the
minimum age and service requirements. Contributions cannot exceed $30,000
annually, per employee.

F-36
<PAGE> 114
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)

Total employer contributions amounted to $979,360 and $730,882 for the nine
months ended September 30, 2000 and 1999, respectively. Participants are
immediately vested in their account balance.

NOTE 14: LEASE COMMITMENTS

The Company has several lease agreements in various locations including Bermuda,
New York, Maine and London. The lease agreements are for various periods through
December 31, 2021. The leases are subject to escalation charges based on
increases in real estate taxes and maintenance costs.

Future minimum rental commitments under non-cancellable operating leases in
effect as of September 30, 2000 were as follows:

<TABLE>
<S> <C>
2000 (3 months)............................. $ 511,087
2001........................................ 2,105,447
2002........................................ 2,105,447
2003........................................ 2,121,805
2004........................................ 2,093,857
Thereafter (through 2021)................... 13,299,945
-----------
$22,237,588
===========
</TABLE>

Total rent expense for all operating leases were $1,435,381 and $1,247,907, for
the nine months ended September 30, 2000 and 1999, respectively.

NOTE 15: GEOGRAPHIC AREA DATA

The Company's primary business is the provision of investment advisory services
to clients located throughout the world, in primarily two geographic areas, as
follows:

<TABLE>
<CAPTION>
FEE REVENUE
----------------------------
2000 1999
---- ----
<S> <C> <C>
U.S. ................................................ $ 86,915,230 $ 87,568,688
Non-U.S. ............................................ 26,294,330 29,419,337
------------ ------------
Total................................................ $113,209,560 $116,988,025
============ ============
</TABLE>

NOTE 16: SUBSEQUENT EVENTS

The Company has agreed in principle to acquire the 50% of TPRS Services N.V.
that it does not presently own in exchange for 814,000 common shares and 75% of
TPR & Partners N.V. in exchange for 330,000 shares. The closing of this
transaction and the issuance of the common shares are expected to occur on or
prior to December 31, 2000. Under the terms of the agreement in principle, the
remaining 25% of TPR & Partners N.V. would be acquired on December 31, 2004 at a
price determined on the basis of the performance of TPR & Partners N.V. for the
year 2004. TPR & Partners N.V. is an asset gathering firm based in The
Netherlands.

On October 1, 2000, the Company issued 30,500 common shares to employees at a
purchase price of $13.02 per share, for installment notes totaling $397,110.

On November 20, 2000, the Company declared and paid a dividend of $3,310,378 to
the shareholders of record as of September 30, 2000.

F-37
<PAGE> 115

ANNEX 1

W.P. STEWART & CO., LTD.
EQUITY COMPOSITE

FOR THE INVESTMENT PERIODS FROM

JANUARY 1, 1989 THROUGH SEPTEMBER 30, 2000

A-1
<PAGE> 116

INDEX TO EQUITY COMPOSITE FOR THE INVESTMENT PERIODS FROM
JANUARY 1, 1989 THROUGH SEPTEMBER 30, 2000

<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Report of Independent Accountants........................... A-3
Equity Composite............................................ A-4 to A-5
Accompanying Notes.......................................... A-6 to A-7
</TABLE>

A-2
<PAGE> 117

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Shareholders of W.P. Stewart & Co., Ltd.:

We have examined the accompanying Equity Composite performance presentation of
W.P. Stewart & Co., Ltd. (the "Company") for the investment periods from January
1, 1989 through September 30, 2000. The determination of the accounts comprising
the Equity Composite and the calculation and presentation of its performance are
the responsibility of the Company's management. Our responsibility is to express
an opinion based on our examination. Our examination was made in accordance with
standards established by the American Institute of Certified Public Accountants
and, accordingly, included such procedures as we considered necessary in the
circumstances.

In our opinion, the performance results of the Equity Composite of W.P. Stewart
& Co., Ltd. for the investment periods from January 1, 1989 through September
30, 2000 referred to above have been prepared and presented, in all material
respects, in conformity with the measurement and disclosure criteria set forth
in the accompanying notes.

PricewaterhouseCoopers LLP

New York, New York

November 15, 2000

A-3
<PAGE> 118

W.P. STEWART & CO., LTD.

EQUITY COMPOSITE

TOTAL ASSETS NUMBER OF
GROSS RATE NET RATE S&P 500 IN COMPOSITE PORTFOLIOS IN
PERIOD OF RETURN OF RETURN INDEX (2)(3) (IN MILLIONS) COMPOSITE
------ ------------- --------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
ANNUALIZED RETURNS:
Last 10 years......................... 21.0% 19.7% 19.4%
Last 5 years.......................... 22.8% 21.5% 21.7%
Last 3 years.......................... 16.1% 14.8% 16.5%
QUARTERLY AND ANNUAL RETURNS FOR THE
PERIOD ENDED:
March 31, 1989........................ 5.1% 4.8% 7.1% $ 578 101
June 30, 1989......................... 10.2% 9.9% 8.8% 633 101
September 30, 1989.................... 12.1% 11.8% 10.7% 710 101
December 31, 1989..................... 4.9% 4.6% 2.0% 736 101
Year ended December 31, 1989(1)....... 36.1% 34.8% 31.7%

March 31, 1990........................ (1.7)% (2.0)% (3.0)% 911 162
June 30, 1990......................... 16.3% 16.0% 6.3% 1,054 159
September 30, 1990.................... (12.2)% (12.5)% (13.7)% 909 155
December 31, 1990..................... 12.8% 12.5% 9.0% 1,195 152
Year ended December 31, 1990(1)....... 13.2% 11.7% (3.1)%

March 31, 1991........................ 18.3% 18.0% 14.5% 1,442 176
June 30, 1991......................... 0.8% 0.5% (0.2)% 1,443 175
September 30, 1991.................... 8.2% 7.9% 5.4% 1,516 175
December 31, 1991..................... 19.3% 18.9% 8.4% 2,566 173
Year ended December 31, 1991(1)....... 54.1% 52.7% 30.5%

March 31, 1992........................ (6.4)% (6.7)% (2.5)% 2,382 350
June 30, 1992......................... 2.8% 2.5% 1.9% 2,429 350
September 30, 1992.................... 4.6% 4.3% 3.2% 2,516 349
December 31, 1992..................... 6.3% 6.0% 5.0% 2,694 349
Year ended December 31, 1992(1)....... 7.1% 5.7% 7.6%

March 31, 1993........................ (0.8)% (1.1)% 4.4% 3,077 502
June 30, 1993......................... (7.1)% (7.5)% 0.4% 2,776 497
September 30, 1993.................... 0.0% (0.3)% 2.6% 2,784 482
December 31, 1993..................... 6.4% 6.2% 2.4% 2,988 457
Year ended December 31, 1993(1)....... (2.1)% (3.1)% 10.1%

<CAPTION>
PORTFOLIO SIZE
(IN MILLIONS)
-------------------
PERIOD LARGEST SMALLEST DISPERSION
------ -------- -------- ----------
<S> <C> <C> <C>
ANNUALIZED RETURNS:
Last 10 years.........................
Last 5 years..........................
Last 3 years..........................
QUARTERLY AND ANNUAL RETURNS FOR THE
PERIOD ENDED:
March 31, 1989........................ $ 34.96 $ 0.82
June 30, 1989......................... 35.05 0.88
September 30, 1989.................... 39.57 0.99
December 31, 1989..................... 41.67 1.03
Year ended December 31, 1989(1)....... 2.78%
March 31, 1990........................ 56.46 0.42
June 30, 1990......................... 65.29 0.50
September 30, 1990.................... 56.81 0.43
December 31, 1990..................... 63.95 0.61
Year ended December 31, 1990(1)....... 2.65%
March 31, 1991........................ 81.65 1.10
June 30, 1991......................... 82.53 0.96
September 30, 1991.................... 89.08 1.08
December 31, 1991..................... 114.28 1.00
Year ended December 31, 1991(1)....... 6.79%
March 31, 1992........................ 70.49 0.94
June 30, 1992......................... 74.95 0.93
September 30, 1992.................... 78.46 0.57
December 31, 1992..................... 83.91 0.81
Year ended December 31, 1992(1)....... 1.59%
March 31, 1993........................ 84.30 0.55
June 30, 1993......................... 98.67 0.45
September 30, 1993.................... 106.38 0.45
December 31, 1993..................... 115.04 0.48
Year ended December 31, 1993(1)....... 1.93%
</TABLE>

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

(1) Compounded periodic return

(2) Market index information not covered by Report of Independent Accountants
(3) Includes reinvestment of dividends

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE.
SEE ACCOMPANYING NOTES

A-4
<PAGE> 119
W.P. STEWART & CO., LTD.
EQUITY COMPOSITE -- (CONTINUED)

<TABLE>
<CAPTION>
PORTFOLIO SIZE
S&P 500 TOTAL ASSETS NUMBER OF (IN MILLIONS)
GROSS RATE NET RATE INDEX IN COMPOSITE PORTFOLIOS IN ------------------
PERIOD OF RETURN OF RETURN (2)(3) (IN MILLIONS) COMPOSITE LARGEST SMALLEST DISPERSION
------ ------------- --------- ------- ------------- ------------- ------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
QUARTERLY AND ANNUAL
RETURNS FOR THE PERIOD
ENDED:
March 31, 1994........... (3.2)% (3.5)% (3.8)% $2,839 518 $110.89 $ 0.42
June 30, 1994............ (2.2)% (2.5)% 0.4% 2,605 484 106.78 0.36
September 30, 1994....... 6.4% 6.2% 4.9% 2,733 477 114.23 0.29
December 31, 1994........ 2.4% 2.1% 0.0% 3,014 477 99.51 0.27
Year ended December 31,
1994(1)................ 3.2% 2.0% 1.3% 1.43%

March 31, 1995........... 10.1% 9.8% 9.8% 3,303 474 109.11 0.94
June 30, 1995............ 11.2% 10.9% 9.6% 3,606 467 119.70 1.09
September 30, 1995....... 4.7% 4.4% 7.9% 3,746 461 123.78 1.14
December 31, 1995........ 5.1% 4.8% 6.0% 3,581 454 128.20 1.02
Year ended December 31,
1995(1)................ 34.7% 33.4% 37.6% 3.21%

March 31, 1996........... 5.3% 5.0% 5.4% 4,336 616 136.63 0.57
June 30, 1996............ 11.6% 11.3% 4.5% 4,792 604 152.41 0.37
September 30, 1996....... 9.1% 8.9% 3.1% 5,119 599 168.43 0.39
December 31, 1996........ 6.1% 5.8% 8.4% 5,190 587 175.28 0.43
Year ended December 31,
1996(1)................ 36.0% 34.6% 23.0% 2.75%

March 31, 1997........... (1.5)% (1.8)% 2.7% 5,637 760 172.07 0.85
June 30, 1997............ 20.1% 19.8% 17.5% 6,754 758 234.52 0.99
September 30, 1997....... 5.7% 5.5% 7.5% 7,024 757 268.23 0.12
December 31, 1997........ 5.7% 5.5% 2.9% 7,057 741 300.92 0.99
Year ended December 31,
1997(1)................ 32.2% 30.9% 33.4% 2.47%

March 31, 1998........... 19.1% 18.8% 13.9% 8,748 970 375.94 0.89
June 30, 1998............ 2.3% 2.0% 3.3% 8,765 963 411.69 0.93
September 30, 1998....... (9.0)% (9.4)% (9.9)% 7,798 949 399.87 0.57
December 31, 1998........ 19.7% 19.6% 21.3% 9,030 934 478.18 0.51
Year ended December 31,
1998(1)................ 32.7% 31.3% 28.6% 4.99%

March 31, 1999........... 8.5% 8.2% 5.0% 10,153 1,211 531.76 0.87
June 30, 1999............ (2.5)% (2.8)% 7.0% 9,563 1,198 524.26 0.69
September 30, 1999....... (3.9)% (4.2)% (6.2)% 8,898 1,175 474.07 0.60
December 31, 1999........ 10.0% 9.8% 14.9% 9,409 1,150 479.22 0.49
Year ended December 31,
1999(1)................ 11.8% 10.5% 21.0% 3.77%
March 31, 2000........... 1.0% 0.7% 2.3% 9,587 1,358 422.03 0.60
June 30, 2000............ 4.0% 3.7% (2.7)% 9,471 1,327 448.34 0.60
September 30, 2000....... (5.0)% (5.3)% (1.0)% 8,694 1,302 430.79 0.50
Nine Months ended
September 30,
2000(1)................ (0.2)% (1.1)% (1.4)%
</TABLE>

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

(1) Compounded periodic return

(2) Market index information not covered by Report of Independent Accountants
(3) Includes reinvestment of dividends

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE.
SEE ACCOMPANYING NOTES

A-5
<PAGE> 120

W.P. STEWART & CO., LTD.
EQUITY COMPOSITE

ACCOMPANYING NOTES

1. BASIS OF PRESENTATION

The performance results displayed herein represent the investment performance
record for a composite of equity-oriented accounts (the "Composite") managed by
W.P. Stewart & Co., Ltd. (and its predecessor, W.P. Stewart & Co., Inc.), an
investment adviser registered under the Investment Advisors Act of 1940, and
W.P. Stewart Asset Management Ltd., a Bermuda company, for the period from
January 1, 1989 through September 30, 2000. W.P. Stewart & Co., Ltd. and W.P.
Stewart Asset Management Ltd. are collectively referred to herein as the "Firm".

2. COMPOSITE CRITERIA

The Firm's investment objective is to invest its clients' funds in the equity of
companies that are considered to be of high quality and generally involved in
non-cyclical businesses. The Firm's goal is to double the value of its clients'
investments every five years, for an average return of about 15% per annum.

The Composite is comprised of all actual, fee-paying client accounts for which
the Firm acts with complete discretionary authority, in accordance with the
aforementioned objective.

The minimum account size for inclusion in the Composite is $1,000,000. Fully
discretionary accounts which equal or exceed this minimum are included in the
Composite on January 1st of each year. New or existing accounts which exceed the
minimum account size for inclusion in the Composite during the year are added to
the Composite as of the beginning of the following year. Accounts are subtracted
from the Composite as of the end of the last full quarter prior to their
termination. Accounts that are included in the Composite which fall below the
minimum account size for inclusion in the Composite during the year are removed
from the Composite as of the beginning of the following year.

3. CALCULATION OF RATES OF RETURN

An account's assets are comprised of cash, securities, and accrued interest and
dividends. Each security is valued at the end of each month at the then quoted
market price. Total investment returns include realized and unrealized gains and
losses, dividends and interest, and transaction costs. Substantially all
securities transactions are executed through a related-party broker-dealer.

Individual accounts' investment returns are calculated monthly in accordance
with the "time-weighted" rate of return method, such that contributions and
withdrawals of capital are weighted based on the amount of time such capital is
held in the account during the period.

For periods prior to January 1, 1993, the Composite's investment returns are
calculated in accordance with the "equal-weighted" rate of return method, such
that all accounts included in the Composite are given equal weighting in the
calculation of the return of the Composite. For periods from January 1, 1993
through September 30, 2000, the Composite's investment returns are calculated in
accordance with the "asset-weighted" rate of return method, such that all
accounts included in the Composite are weighted based upon their beginning of
period market values in the calculation of the return of the Composite.

The monthly rates of return are linked to derive the periodic returns reflected
on the Composite.

A-6
<PAGE> 121
W.P. STEWART & CO., LTD.
EQUITY COMPOSITE

ACCOMPANYING NOTES -- (CONTINUED)

Securities transactions are accounted for on a trade-date basis. Dividends are
recorded as of the ex-dividend date. Interest income is recorded on the accrual
basis.

Dispersion is a measure of the consistency of the returns of the individual
accounts within the Composite. The measure of dispersion reflected for a
particular period represents the standard deviation of the gross returns of the
accounts in the Composite which have been managed for the full applicable year.

The investment performance rates of return are presented both before the
deduction of advisory fees ("Gross Rate of Return") and after the deduction of
such fees ("Net Rate of Return") (see Note 4).

4. ADVISORY FEES

All accounts within the Composite are subject to quarterly advisory fees, based
upon the terms of each individual management agreement. Such fees are based upon
the market value of the accounts, as determined by the Firm, generally at the
following standard annual rates:

<TABLE>
<CAPTION>
AMOUNT UNDER STANDARD
MANAGEMENT ADVISORY FEE
------------ ------------
<S> <C>
First $25 Million........................................... 1.50%
Balance..................................................... 1.25%
</TABLE>

5. COMPARISON WITH MARKET INDEX

The unmanaged market index returns presented are provided to represent the
investment environment existing during the time periods shown. Periodic
performance for this index has been linked in the same manner as the periodic
returns for the Composite. The returns for this unmanaged index do not include
the effects of transaction costs, advisory fees or other costs. The unmanaged
market index returns are not covered by the Report of Independent Accountants.

A-7
<PAGE> 122

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

No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell or to buy the securities offered hereby but only under the
circumstances and in the jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................... 1
Risk Factors.......................... 7
Forward Looking Statements............ 13
Capitalization........................ 14
Dividend Policy....................... 15
Selected Financial and Unaudited Other
Data................................ 16
Consolidated Pro Forma Financial
Data................................ 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 23
Corporate History..................... 28
Business.............................. 31
Management............................ 46
Principal and Selling Shareholders.... 50
Certain Relationships and Related
Transactions........................ 55
Description of Capital Stock.......... 58
Certain Income Tax Considerations..... 61
Shares Eligible for Future Sale....... 67
Certain Foreign Issuer
Considerations...................... 68
Underwriting.......................... 70
Validity of Common Shares............. 73
Experts............................... 73
Available Information................. 73
Enforcement of Civil Liabilities...... 74
Index to Combined/Consolidated
Financial Statements................ F-1
Statement of Composite and Performance
Calculations........................ A-1
</TABLE>

Through and including , 2000 (the 25th day after the date of
this prospectus), all dealers effecting transactions in these securities,
whether or not participating in this distribution, may be required to deliver a
prospectus. This is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------

11,204,015 Shares

W.P. STEWART & CO., LTD.

Common Shares

[W.P. STEWART LOGO]
GOLDMAN, SACHS & CO.
LAZARD

BEAR, STEARNS & CO. INC.

SALOMON SMITH BARNEY

Representatives of the Underwriters
------------------------------------------------------
------------------------------------------------------
<PAGE> 123

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered which will be paid
solely by W.P. Stewart & Co., Ltd. All the amounts shown are estimates, except
the Securities and Exchange Commission registration fee and the NASD filing fee:

<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 69,687
NASD Filing Fees............................................ $ 26,270
NYSE Fees................................................... $107,350
BSX Fees.................................................... $ 30,000
Transfer Agent and Registrar Fees and Expenses.............. *
Printing Expenses........................................... *
Legal Fees and Expenses..................................... *
Accounting Fees and Expenses................................ *
Blue Sky Fees and Expenses.................................. $ 15,000
Miscellaneous Expenses...................................... *
--------
Total.................................................. $ *
========
</TABLE>

---------------
* To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

No provision is made in Bermuda statutory law for indemnification of
officers and directors. Section 98 of the Companies Act 1981 of Bermuda provides
generally that a Bermudian company may indemnify its directors, officers and
auditors against any liability which may be imposed by virtue of any rule of law
which would otherwise attach to them, except in cases where such liability
arises from the fraud or dishonesty of which such director, officer or auditor
may be guilty in relation to W.P. Stewart & Co., Ltd. Section 98 of the Bermuda
Companies Act 1981 further provides that a Bermudian company may indemnify its
directors, officers and auditors against any liability incurred by them in
defending any proceedings, whether civil or criminal, in which judgment is
awarded in their favor or they are acquitted or granted relief by the Supreme
Court of Bermuda under Section 281 of that Act.

The bye-laws of W.P. Stewart & Co., Ltd. provide for indemnification of
W.P. Stewart & Co., Ltd.'s officers and directors against all liabilities, loss,
damage or expense incurred or suffered by such party as an officer or director
of W.P. Stewart & Co., Ltd.; provided that such indemnification shall not extend
to any matter which would render it void pursuant to the Bermuda Companies Act
as in effect from time to time in Bermuda.

As of the date of the offerings, the directors and officers of W.P. Stewart
& Co., Ltd. are covered by a directors' and officers' liability insurance policy
maintained by W.P. Stewart & Co., Ltd.

II-1
<PAGE> 124

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

W.P. Stewart & Co., Ltd. was incorporated in June 1998 under the laws of
Bermuda, and has been in operation, through its predecessors, since 1975. From
January 1, 1996 through June 30, 2000, W.P. Stewart & Co., Ltd. and its
predecessors, Capital Managers Limited and our U.S. predecessor company, issued
shares of stock as follows:

On January 1, 1996, our U.S. predecessor company issued 97,750* shares of
stock to an employee, at a purchase price of approximately $44.73 per share, for
an aggregate purchase price of $4,371,868.75. The shares were sold in a private
placement and were exempt from registration under Section 4(2) of the Securities
Act of 1933 (the "Securities Act"). In addition, on August 16, 1996, Capital
Managers Limited issued 3,451,728** shares of its stock to employees of the
Stewart Group (including, in certain instances, trusts for the benefit of family
members of employees) at a purchase price of $0.03 per share, for an aggregate
purchase price of $103,551.81. The shares were sold in a private placement and
were exempt from registration under Section 4(2) of the Securities Act.

On January 1, 1997 and July 1, 1997, our U.S. predecessor company issued
47,250* shares of stock to employees and a director, at a purchase price of
$56.15 per share, for an aggregate purchase price of $2,653,087.50. The shares
were sold in a private placement and were exempt from registration under Section
4(2) of the Securities Act. On July 1, 1997, our U.S. predecessor company issued
5,110* shares of its stock to employees, at a purchase price of $38.09 per share
(in accordance with a prior commitment to such employees), for an aggregate
purchase price of $194,639.90. The shares were sold in a private placement and
were exempt from registration under Section 4(2) of the Securities Act. In
addition, on July 1, 1997, Capital Managers Limited issued 47,250** shares of
its stock to employees of our U.S. predecessor company at a purchase price of
$0.03 per share, for an aggregate purchase price of $1,417.50. The shares were
sold in a private placement and were exempt from registration under Section 4(2)
of the Securities Act. On October 15, 1997, Capital Managers Limited effected a
3 for 1 stock split, resulting in 10,496,934 of its shares then being
outstanding.

Effective January 1, 1998, Capital Managers Limited issued 2,604,061***
shares of its stock to employees of the Stewart Group, at a purchase price of
approximately $4.79 per share, for an aggregate purchase price of
$12,473,451.57. Effective April 1, 1998, Capital Managers Limited issued
803,310*** shares of its stock to employees of the Stewart Group and an
affiliate and directors of the Stewart Group, at a purchase price of $6.89 per
share, for an aggregate purchase price of approximately $5,534,806. In each
instance, the shares were sold in a private placement and were exempt from
registration under Section 4(2) of the Securities Act. On June 30, 1998, W.P.
Stewart & Co., Ltd. issued 29,915*** shares to Dr. Edgar H. Brunner, one of W.P.
Stewart & Co., Ltd.'s outside directors, in consideration for his relinquishing
certain rights to receive payments from W.P. Stewart & Co., Ltd. Effective June
30, 1998, all of the 3,498,978 shares of our U.S. predecessor company were
exchanged for 29,321,436 shares of WPS II, Inc. Effective July 1, 1998, upon the
amalgamation of our U.S. predecessor company with and into W.P. Stewart & Co.,
Ltd., W.P. Stewart & Co., Ltd. issued 29,321,436 common shares to WPS II, Inc.
in exchange for a like number of shares of our U.S. predecessor company, and the
shares of our U.S. predecessor company were cancelled. Effective upon the
amalgamation and merger of Capital Managers Limited with and into W.P. Stewart &
Co., Ltd. as of October 30, 1998, all of the 13,904,305 shares of Capital
Managers Limited then outstanding were exchanged for a like

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

* Does not reflect subsequent 8.38 for 1 exchange effective June 30, 1998.

** Does not reflect subsequent 3 for 1 stock split effective October 15, 1997.

*** Reflects 3 for 1 stock split effective October 15, 1997.

II-2
<PAGE> 125

number of common shares of W.P. Stewart & Co., Ltd., and the former Capital
Managers Limited shares were cancelled.

Effective January 1, 1999, W.P. Stewart & Co., Ltd. issued (a) 67,952
common shares, valued by written agreement in 1998 at approximately $6.89 per
share, for an aggregate purchase price of $468,186, to Europa International Ltd.
in connection with our acquisition of three funds managed by an affiliate of
Europa; (b) 1,152,000 common shares in the aggregate to TPR & Partners N.V. and
TPR Curacao N.V. in exchange for 50% of the outstanding capital stock of TPRS
Services N.V.; (c) 898,831 common shares to Stewart Notz Stucki Ltd. in exchange
for all of the outstanding capital stock of NS Money Management (Bermuda)
Limited; and (d) 1,200,000 common shares to First Long Island Holdings, LLC in
exchange for all of the outstanding capital stock of First Long Island
Investors, Inc. In each such instance, the common shares either were or will be
sold in a private placement and either were or will be exempt from registration
under Section 4(2) of the Securities Act.

On March 1, 1999, W.P. Stewart & Co., Ltd. issued an aggregate of 643,000
common shares to employees of the Stewart Group and its affiliated entities at a
purchase price of $10.79 per share, for an aggregate purchase price of
$6,937,970. On April 1, 1999, W.P. Stewart & Co., Ltd. issued (a) an aggregate
of 50,000 common shares to employees of the Stewart Group and its affiliated
entities at a purchase price of $14.39 per share, for an aggregate purchase
price of $719,500, and (b) an aggregate of 246,500 common shares to employees of
the Stewart Group and its affiliated entities at a purchase price of $11.25 per
share, for an aggregate purchase price of $2,773,125. Also on that date, W.P.
Stewart & Co., Ltd. repurchased 343,303 unvested common shares from former
employees of the Stewart Group and its affiliated entities for an aggregate
price of $2,049,424. On May 1, 1999, W.P. Stewart & Co., Ltd. issued an
aggregate of 72,500 common shares to employees of the Stewart Group and its
affiliated entities at a purchase price of $11.25 per share for an aggregate
purchase price of $815,625. On June 1, 1999, W.P. Stewart & Co., Ltd. issued an
aggregate of 40,000 common shares to employees of the Stewart Group and its
affiliated entities at a purchase price of $11.25 per share, for an aggregate
purchase price of $450,000. On July 1, 1999, W.P. Stewart & Co., Ltd. issued (a)
an aggregate of 70,000 common shares to an employee of the Stewart Group at a
purchase price of $11.25 per share, for an aggregate purchase price of $787,500,
and (b) 8,217 and 27,769 common shares in transactions at purchase prices of
$14.39 and $10.79 per share, respectively, for aggregate purchase prices of
$118,242 and $299,628, respectively. Also on that date, W.P. Stewart & Co., Ltd.
repurchased 50,286 unvested common shares from former employees for an aggregate
purchase price of $447,313. On November 1, 1999, W.P. Stewart & Co., Ltd. issued
an aggregate of 75,000 common shares to an employee of the Stewart Group at a
purchase price of $11.25 per share, for an aggregate purchase price of $843,750.
Also on that date, W.P. Stewart & Co., Ltd. repurchased 188,500 unvested common
shares from former employees of the Stewart Group and its affiliated entities
for an aggregate purchase price of $2,212,115. In each instance above, the
common shares were sold in a private placement and were exempt from registration
under Section 4(2) of the Securities Act.

On January 1, 2000, W.P. Stewart & Co., Ltd. issued an aggregate of 124,282
common shares to employees of the Stewart Group at a purchase price of $13.02,
for an aggregate purchase price of $1,618,152. On April 1, 2000, W.P. Stewart &
Co., Ltd. repurchased 63,786 unvested common shares from former employees for an
aggregate purchase price of $717,589. On June 1, 2000, W.P. Stewart & Co., Ltd.
issued an aggregate of 13,000 common shares to employees of the Stewart Group at
a purchase price of $13.02, for an aggregate purchase price of $169,260. Also on
that date, W.P. Stewart & Co., Ltd. repurchased 7,714 common shares from former
employees for an aggregate purchase price of $100,440. In each instance above,
the

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<PAGE> 126

common shares were sold in a private placement and were exempt from registration
under Section 4(2) of the Securities Act.

On October 1, 2000, W.P. Stewart & Co., Ltd. issued an aggregate of 30,500
common shares to employees of the Stewart Group at a purchase price of $13.02
per share, for an aggregate purchase price of $397,110. On October 15, 2000,
W.P. Stewart & Co., Ltd. repurchased 1,571 unvested shares from a former
employee of an affiliate for an aggregate purchase price of $17,674, and 429
vested shares from that former employee for an aggregate purchase price of
$5,586. In each instance above, the common shares were sold in a private
placement and were exempt from registration under Section 4(2) of the Securities
Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS.

<TABLE>
<C> <S>
1.1* Form of Underwriting Agreement
3.1 Memorandum of Association
3.2 Bye-Laws
5.1* Opinion of Appleby Spurling & Kempe as to the legality of
the common shares
10.1 1996 Shareholders Agreement among Global Reach, Limited and
Shareholders of Global Reach, Limited
10.2 Share Exchange Agreement, dated March 1999, between W.P.
Stewart & Co., Ltd. and First Long Island Holdings, LLC
10.3 Share Exchange Agreement, dated as of May 19, 1999, among
W.P. Stewart & Co., Ltd., TPR & Partners N.V. and TPR
Curacao N.V.
10.4 Share Exchange Agreement, dated as of June 1, 1999, between
W.P. Stewart & Co., Ltd. and Stewart Notz Stucki Ltd.
10.5 Purchase Agreement, dated as of June 30, 1999, among W.P.
Stewart & Co., Ltd., Bowen Asia Limited, Charles G.R.
Target, Lisa M. Stewart, Naoko Takemura and Celina Lin
10.6* Form of Indemnity Agreement by WPS II, Inc. and the
Guarantors thereunder in favor of W.P. Stewart & Co., Ltd.
15.1 Letter re: Unaudited Interim Financial Information
21 Subsidiaries of the Registrant
23.1 Consent of PricewaterhouseCoopers
23.2 Consent of PricewaterhouseCoopers LLP
23.3* Consent of Appleby Spurling & Kempe (included in Exhibit
5.1)
23.4 Consent of Nixon Peabody LLP
</TABLE>

(b) FINANCIAL STATEMENT SCHEDULES.

[NOT REQUIRED]
---------------

* To be filed by amendment.

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<PAGE> 127

ITEM 17. UNDERTAKINGS

(1) The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement certificates
in such denominations and registered in such names as required by the
Underwriters to permit prompt delivery to each purchaser.

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

(3) The Registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.

(b) For purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

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<PAGE> 128

SIGNATURES

Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Hamilton, Bermuda, on November 21, 2000.

W.P. STEWART & CO., LTD.

By: /s/ JOHN C. RUSSELL
------------------------------------
Name: John C. Russell
Title: Managing Director

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

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chief Executive Officer, November 21, 2000
--------------------------------------------------- Director (Principal
William P. Stewart Executive Officer)

* Director November 21, 2000
---------------------------------------------------
Richard C. Breeden

* Director November 21, 2000
---------------------------------------------------
Edgar H. Brunner

* Director November 21, 2000
---------------------------------------------------
Beat Notz

/s/ JOHN C. RUSSELL Deputy Chairman, Managing November 21, 2000
--------------------------------------------------- Director and Director
John C. Russell

* Director November 21, 2000
---------------------------------------------------
Henry B. Smith
</TABLE>

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<PAGE> 129

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director November 21, 2000
---------------------------------------------------
Heinrich Spangler

/s/ ROCCO MACRI Finance Director (Principal November 21, 2000
--------------------------------------------------- Financial and Accounting
Rocco Macri Officer)

/s/ LISA D. LEVEY Authorized Representative in November 21, 2000
--------------------------------------------------- the United States
W.P. Stewart & Co., Inc.
By: Lisa D. Levey, its Vice President
and General Counsel

* By: /s/ LISA D. LEVEY
-------------------------------------------
Lisa D. Levey
(Attorney-in-fact)
</TABLE>

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<PAGE> 130

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
----------- ---------------------- --------
<S> <C> <C>
1.1* Form of Underwriting Agreement
3.1 Memorandum of Association
3.2 Bye-Laws
5.1* Opinion of Appleby Spurling & Kempe as to the legality of
the common shares
10.1 1996 Shareholders Agreement among Global Reach, Limited and
Shareholders of Global Reach, Limited
10.2 Share Exchange Agreement, dated March 1999, between W.P.
Stewart & Co., Ltd. and First Long Island Holdings, LLC
10.3 Share Exchange Agreement, dated as of May 19, 1999, among
W.P. Stewart & Co., Ltd., TPR & Partners N.V. and TPR
Curacao N.V.
10.4 Share Exchange Agreement, dated as of June 1, 1999, between
W.P. Stewart & Co., Ltd. and Stewart Notz Stucki Ltd.
10.5 Purchase Agreement, dated as of June 30, 1999, among W.P.
Stewart & Co., Ltd., Bowen Asia Limited, Charles G.R.
Target, Lisa M. Stewart, Naoko Takemura and Celina Lin
10.6* Form of Indemnity Agreement by WPS II, Inc. and the
Guarantors thereunder in favor of W.P. Stewart & Co., Ltd.
15.1 Letter re: Unaudited Interim Financial Information
21 Subsidiaries of the Registrant
23.1 Consent of PricewaterhouseCoopers
23.2 Consent of PricewaterhouseCoopers LLP
23.3* Consent of Appleby Spurling & Kempe (included in Exhibit
5.1)
23.4 Consent of Nixon Peabody LLP
</TABLE>

---------------
* To be filed by amendment