SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
BARON ASSET FUND
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act RULE 0-11 (Set forth the amount on which the
filing fee is caluculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) date Filed:
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Baron Asset Fund
BARON GROWTH & INCOME FUND
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Notice of Special Meeting of Shareholders
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To the Shareholders of BARON GROWTH & INCOME FUND:
Please take notice that a Special Meeting of Shareholders (the "Meeting")
of BARON GROWTH & INCOME FUND (the "Fund"), a series of Baron Asset Fund (the
"Trust") will be held at xxxxxxxxx, New York, NY on May, 19, 1999 at 10:00 a.m.
eastern time. At the Meeting the shareholders of the Fund will be asked:
(1) To approve a proposal that would change the investment goal and
objective of the Fund to capital appreciation.
(2) To transact such other business as may properly come before the
Special Meeting of Shareholders or any adjournment thereof.
Holders of record of shares of common stock of the Fund at the close of
business on March 22, 1999 are entitled to vote at the Meeting and at any
adjournments thereof.
In the event that the necessary quorum to transact business or the vote
required to approve or reject the proposal is not obtained at the Meeting, the
persons named on the proxy card as proxies may propose one or more adjournments
of the Meeting, in accordance with applicable law, to permit further
solicitation of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the Fund's shares present in person or by proxy
at the Meeting. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor and will vote
against any such adjournment those proxies to be voted against the proposal.
By order of the Board of Trustees,
/s/ Linda S. Martinson
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Linda S. Martinson
Secretary
March 24, 1999
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IMPORTANT
Your vote is important and, as a shareholder, you are asked to be at the Meeting
whether in person or by proxy. If you are unable to attend the Meeting in person
we urge you to vote by proxy. You can do this by:
1. Completing, signing, dating and promptly returning the enclosed proxy
card using the enclosed postage prepaid envelope;
2. Calling the toll-free number on your proxy card; or
3. Voting at the web site: www.proxyvote.com.
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YOUR PROMPT VOTING BY PROXY MAY SAVE THE NECESSITY AND EXPENSE OF FURTHER
SOLICITATIONS TO ENSURE A QUORUM AT THE MEETING. VOTING BY PROXY WILL NOT
PREVENT YOU FROM PERSONALLY VOTING YOUR SHARES AT THE MEETING AND YOU MAY REVOKE
YOUR PROXY BY ADVISING THE SECRETARY OF THE TRUST IN WRITING (BY SUBSEQUENT
PROXY OR THROUGH THE WEB SITE) OR BY TELEPHONE OF SUCH REVOCATION AT ANY TIME
BEFORE THE MEETING.
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Baron Asset Fund
BARON GROWTH & INCOME FUND
767 Fifth Avenue
New York, NY 10153
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PROXY STATEMENT
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GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board") of Baron Asset Fund (the
"Trust"), on behalf of one of its series, BARON GROWTH & INCOME FUND (the
"Fund"). This proxy statement is for use at the Special Meeting of Shareholders
(the "Meeting"), to be held at XXXXXXXX, New York, NY 100xx on May 19, 1999 at
10:00 a.m., eastern time, and at any and all adjournments thereof.
This Proxy Statement, the Notice of Special Meeting, the Question & Answer
Statement, and the proxy card are first being mailed to shareholders on or about
March 26,1999 or as soon as practicable thereafter. Any shareholder giving a
proxy has the power to revoke it in person at the Meeting, by mail (addressed to
the Secretary at the principal office of the Fund, 767 Fifth Avenue, 49th floor,
New York, NY 10153), by visiting www.xxx.com, by calling the toll-free number on
your proxy card, by executing a superseding proxy, or by submitting a notice of
revocation to the Fund. All properly executed proxies received in time for the
Meeting will be voted as specified in the Proxy Statement.
A majority of the outstanding shares present in person or by proxy is
necessary to constitute a quorum for the transaction of business. If the
necessary quorum to transact business or the vote required to approve the
proposal is not obtained at the Meeting, the persons named as proxies on the
proxy card may propose one or more adjournments of the Meeting, in accordance
with applicable law, to permit the further solicitation of proxies. Any such
adjournment would require the affirmative vote of a majority of the shares
voting on the adjournment. The persons named as proxies will vote in favor of
such adjournment those proxies which they are entitled to vote in favor, and
will vote against any such adjournment those proxies to be voted against the
proposal. For purposes of determining the presence of a quorum for the Meeting,
abstentions will be treated as shares that are present but which have not been
voted. Brokers and other nominees are not eligible to vote shares that are not
beneficially owned by them and accordingly any "broker non votes" will be
disregarded for quorum and voting purposes. SHAREHOLDERS ARE URGED TO FORWARD
THEIR VOTING INSTRUCTIONS PROMPTLY.
PROPOSAL 1 asks shareholders of the Fund to change the investment goal of
the Fund to capital appreciation
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The proposal requires the affirmative vote of a "majority of the
outstanding shares" of the Fund. The Investment Company Act of 1940, as amended
(the "1940 Act"), defines "majority of the outstanding shares" to mean the
affirmative vote of the lesser of: (a) 67% of the voting securities of the Fund
present at the Meeting if more than 50% of the outstanding shares of the Fund
are present in person or by proxy or (b) more than 50% of the outstanding shares
of the Fund.
Holders of record of the shares of the Fund at the close of business on
March 22, 1999 (the "Record Date") will be entitled to one vote per share for
the Fund on all business to be conducted at the Meeting. The number of shares
outstanding as of December 31, 1998 was 13,818,260.867.
The Fund provides periodic reports to its shareholders which contains
relevant information including investment results, portfolio changes and
financial information. You may receive an additional copy of the annual report
of the Fund for the fiscal year ended September 30, 1998 without charge by
calling 1-800-992-2766, writing the Fund at 767 Fifth Avenue, 49th floor, New
York, NY 10153, or accessing the Fund's web-site at www.baronfunds.com.
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1. PROPOSAL TO CHANGE THE INVESTMENT GOAL OF THE FUND
The proposal would change the investment goal and objective of the Fund to
capital appreciation, without income as a secondary objective. If the proposal
is adopted, the Board of Trustees will change the name of the Fund to Baron
Growth Fund, deleting the word income.
In considering this proposal, the Board discussed a variety of
considerations. Since the Fund was launched in 1995, the growth and income
category has been eliminated by most major mutual fund rating agencies.
Morningstar eliminated the growth and income category in 1998. Lipper has
announced that it will eliminate the category in 1999. Most newspapers and
financial journals use information from either Morningstar or Lipper for their
mutual fund tables and analyses. Investors have increasingly indicated a desire
to make their own allocation decisions between growth funds and income funds,
diminishing interest in a fund designed to make that decision for them.
The Board also discussed the effect of the extended relative bear market in
small cap stocks versus larger cap companies, which has resulted in what the
investment adviser to the Fund (the "Adviser") and Board believe are compelling
valuations among small cap growth companies. By eliminating income as a
secondary objective the Fund can more fully take advantage of the many apparent
opportunities to invest in small cap growth companies.
The Board considered the fact that companies are paying lower dividends
than in previous years as more companies determine to put all of their assets to
work by investing cash flow within their own businesses to increase future
profits or for share repurchasesrather than return such cash flow to
shareholders as dividends. The Adviser, as a long-term investor, sees a benefit
to investing in businesses with management teams that have the conviction to
sacrifice current earnings for future growth. In the Adviser's judgment high
dividends have often
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signaled that management believes their businesses have limited growth
opportunities.
The Board discussed the management of the portfolio and the kinds of
changes that would be made to the portfolio with the new investment goal. The
Board concluded that the Adviser could manage the Fund fairly similarly to the
way it has been managed, a "value orientation to growth stocks," a more
conservative approach to investing than employed by most small cap funds, while
recognizing the inherent higher risks associated with investments in smaller
companies. The change in approach, of course, will be that securities yields
will no longer be of import. The Fund would continue to invest mostly in small
and mid cap companies, making opportunistic investments in businesses which, in
the Adviser's judgment, have superior growth prospects, superb management teams,
sustainable competitive advantages, and yet are selling at attractive prices.
The Fund would continue to invest in companies where the Adviser has an
expectation that an investment could increase at least 50% in value within the
two years following the initial investment. It would continue to invest in
businesses that the Adviser believes have the opportunity to double in size
within 4 to 5 years and double again during the following 4 to 5 years.
The risk of smaller companies would continued to be managed by focusing on
a company's long term favorable growth prospects rather than short term results.
The Adviser's "value orientation towards growth" investment style, buying what
it judges to be great businesses opportunistically, at attractive prices, should
help minimize the risk relative to the small cap universe. Of course past
performance is no guarantee of future results and the Adviser can provide no
guarantee that it would be able to achieve these goals.
The Board also discussed the confusion that many potential investors have
experienced with respect to the Fund. The vast majority of growth and income
funds are invested in large cap, mature, dividend-paying companies. The Fund
invests in small and medium sized businesses that are almost entirely growth
companies. The Fund's income component had been derived mostly through
investments in REITs that, in the Adviser's opinion, no longer offer
opportunities comparable to investing in small cap growth companies. Investors
and financial planners interested in investing in a small cap fund do not
typically consider growth and income funds.
The Board also analyzed and considered historical information about the
Fund, the Fund's portfolio over time, performance information, investment flows,
similarities among funds within mutual fund categories and the investment
Adviser's ability to perform its duties under its advisory agreement. The Board
considered alternatives and determined that it was in the best interest of the
shareholders of the Fund to approve the change of the Fund's investment
objective and name.
BOARD OF TRUSTEES RECOMMENDATION
Based on their evaluation of the information presented to them, and in
light of their fiduciary duties, the Board has determined that it is in the best
interest of the shareholders of the Fund to change the investment objective of
the Fund.
THE BOARD RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF THE PROPOSAL
TO CHANGE THE INVESTMENT GOAL OF THE FUND TO CAPITAL APPRECIATION.
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REQUIRED VOTE
Approval of Proposal 1 requires the affirmative vote of a majority of the
outstanding voting securities, as defined herein on page , of the Fund. THE
BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF
THIS PROPOSAL 1.
ADDITIONAL INFORMATION
The cost of preparing, printing and mailing the proxy, notice and Proxy
Statement and all other costs incurred in connection with the solicitation of
proxies, including any additional solicitation made by letter, telephone or
other means, will be paid by BAMCO, Inc., the Fund's Adviser. The Fund will not
pay any of the costs associated with the proxy or the solicitation thereof.
It is expected that the solicitation of proxies will be primarily by mail.
Shareholder Communications Corporation (????) has been engaged to assist in the
solicitation of proxies. To the extent that votes are not received, the proxy
solicitation firm may contact shareholders by telephone. Shareholders may
authorize the proxy solicitation firm to execute proxies on their behalf, by
telephone or through the internet. Proxies that are obtained by telephone
authorization will be recorded in accordance with procedures that are reasonably
designed to ensure that the identity of the shareholder casting the vote and the
voting instructions of the shareholder are accurately determined.
When soliciting telephonic proxies, the representative is required to ask
for each shareholder's full name, address, social security or tax identification
number, and the number of shares owned to confirm that the shareholder has
received the Proxy Statement and proxy card in the mail. If the information is
consistent, the proxy solicitor will explain the voting process and the
proposals and ask for the shareholder's voting instructions. The proxy solicitor
will not recommend to the shareholder how to vote, other than to read any
recommendations set forth in the Proxy Statement. The proxy solicitation firm
will confirm the voting instructions to the shareholder promptly by letter or
mailgram.
Shareholders who want to vote by electronic proxy may do so by accessing
www.proxyvote.com. The shareholder will be prompted to provide his or her name,
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address, social security or tax identification number, the number of shares
owned and to confirm that the shareholder has received the proxy card in the
mail. If the information is correctly entered, the shareholder will be provided
with on-line instructions and the opportunity to enter votes. The shareholder
will be sent promptly confirmation of the voting instructions received by letter
or mailgram.
Proxies may also be voted by filling out the proxy card sent with the Proxy
Statement and returning it to the Fund. For replacement proxy cards or
additional information, please call the proxy solicitation firm at
1-800-xxx-xxxx. Any proxy given by a shareholder, whether in writing or by
telephone, is revocable. Shareholders may attend the meeting in person.
<PAGE>
OTHER MATTERS TO COME BEFORE THE MEETING
The Board is not aware of any other business to be brought before the
Special Meeting. Should any other matters requiring a shareholder vote arise, it
is the intention that proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING ARE
URGED TO SIGN AND DATE THE ENCLOSED PROXY CARD AND PROMPTLY RETURN IT IN THE
ENCLOSED ENVELOPE WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE
IF MAILED IN THE UNTIED STATES OR VOTE BY TOLL-FREE TELEPHONE CALL OR AT THE
WEB-SITE. TO AVOID THE EXPENSE OF FURTHER SOLICITATION, PLEASE VOTE PROMPTLY.
By order of the Board of Trustees
/s/ Linda S. Martinson
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Linda S. Martinson
Secretary
<PAGE>
Baron Asset Fund
BARON GROWTH & INCOME FUND
This proxy is solicited on behalf of the Trustees
The undersigned hereby appoints Ronald Baron, Chairman and CEO and Morty Schaja,
Senior Vice President and Chief Operating Officer and each of them, attorneys
and proxies of the undersigned, with full powers of substitution and revocation,
to represent the undersigned and to vote on behalf of the undersigned all shares
of BARON GROWTH & INCOME FUND (the "Fund") which the undersigned is entitled to
vote at a Special Meeting of Shareholders of the Fund to be held at xxxxxxxxxxx,
New York, NY on May 19, 1999 at 10:00 a.m. eastern time, and any
adjournments thereof. The undersigned hereby acknowledges receipt of the
Notice of Special Meeting of Shareholders and Proxy Statement and hereby
instructs said attorneys and proxies to vote said shares as indicated herein,
in their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
A majority of the proxies present, and acting at the Meeting in person or by
substitute (or, if only one shall be so present, then that one) shall have and
may exercise all of the power and authority of said proxies hereunder. The
undersigned hereby revokes any proxy previously given.
This proxy, if properly executed, will be voted in the manner directed by the
undersigned shareholder. If no direction is made as to any Proposal, this proxy
will be voted FOR the Proposal. Please refer to the Proxy Statement for a
discussion of each of the Proposals.
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/ PLEASE VOTE, DATE, AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED /
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/ ENVELOPE /
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/ /
/ Please sign this proxy exactly as your name appears on the books of the /
/ Fund. Joint owners should each sign personally. Trustees and other /
/ fiduciaries should indicate the capacity in which they sign, and where /
/ more than one name appears, a majority must sign. If a corporation, the /
/ signature should be that of an authorized officer who should state his or /
/ her title. /
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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PLEASE MARK VOTES AS IN THIS EXAMPLE
<TABLE>
<CAPTION>
For Against Abstain
<S> C> <C> <C> <C>
1) To consider and act upon an [ ] [ ] [ ]
Baron Growth & Income Fund amendment to the Fund's
investment objective; and
2) To transact such other
business as may properly
come before the Meeting
or any adjournment thereof
For Against Abstain
[ ] [ ] [ ]
</TABLE>
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Please be sure to sign and date / Date /
this Proxy. / /
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/ /
/ /
/ Shareholder sign here Co-owner sign here /
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Mark box at right if comments [ ]
or address changes have been noted
on the reverse side of this card
DETACH CARD
