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VAN KAMPEN AMERICAN CAPITAL
LIFE INVESTMENT TRUST
SUPPLEMENT DATED JULY 1, 1996, TO THE PROSPECTUS DATED MARCH 6, 1996.
On June 24, 1996, VK/AC Holding, Inc. announced it had entered into an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings II,
Inc. and MSAM Acquisition Inc., pursuant to which MSAM Acquisition Inc. will be
merged with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. will be the
surviving corporation. Van Kampen American Capital, Inc. is a wholly owned
subsidiary of VK/AC Holding, Inc. The Fund's investment adviser, Van Kampen
American Capital Asset Management, Inc. (the "Adviser"), is a wholly owned
subsidiary of Van Kampen American Capital, Inc.
The proposed transaction may be deemed to cause an assignment, within the
meaning of the Investment Company Act of 1940 and the Investment Advisers Act of
1940, of the investment advisory agreement between the Adviser and the Fund.
Accordingly, the completion of the transaction is contingent upon, among other
things and subject to certain de minimis exceptions, the approval of both the
Board of Trustees of the Fund and the shareholders of the Fund of a new
investment advisory agreement between the Fund and the Adviser. Management of
the Fund currently anticipates recommending to the Fund's board of trustees that
a special meeting of shareholders be called to obtain such approval and that the
record date for such shareholder meeting be a date in late August. Management of
the Fund also anticipates that investment advisory fees under the new investment
advisory agreement to be voted on at such meeting will be in the same amount as
those paid under the current investment advisory agreement between the Fund and
the Adviser.
MSAM Acquisition Inc. is a wholly owned subsidiary of MSAM Holdings II, Inc.
which, in turn, is a wholly owned subsidiary of Morgan Stanley Group Inc.
Subject to a number of conditions being met, it is currently anticipated that a
closing will occur on or about November 29, 1996. Thereafter, VK/AC Holding,
Inc. and its affiliated entities shall be part of Morgan Stanley Group Inc.
The section of the Prospectus captioned "Investment Practices" is hereby
supplemented as follows for the Enterprise Fund and Asset Allocation Fund:
Each of the Fund's investment policies currently permit it to make
investments in foreign securities. Each Fund has obtained exemptive relief from
the Securities and Exchange Commission to make its investments in foreign
securities, together with other investment companies advised by the Adviser and
its affiliates, through Van Kampen American Capital Foreign Securities Fund (the
"Foreign Securities Fund"). Shares of the Foreign Securities Fund are available
only to investment companies advised by the Adviser and its affiliates. The
Adviser believes that the
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use of the Foreign Securities Fund will provide each Fund with a more effective
exposure to the performance of foreign securities while at the same time
minimizing costs. The Adviser charges no advisory fee for managing the Foreign
Securities Fund, nor is there any sales load or other charges associated with
the distribution of its shares. Other expenses incurred by the Foreign
Securities Fund are borne by it, and thus indirectly by the Van Kampen American
Capital funds that invest in them. With respect to such other expenses, the
Adviser anticipates that the efficiencies resulting from use of the Foreign
Securities Fund will result in cost savings for each Fund and for other Van
Kampen American Capital funds, including reduced administrative and portfolio
transaction costs. The Funds and each other Van Kampen American Capital fund
that invest in the Foreign Securities Fund will be deemed to own a pro rata
portion of each portfolio security owned by the Foreign Securities Fund. Each
Fund anticipates that it will commence making investments through the Foreign
Securities Fund on or about the date hereof.
