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This filing is made pursuant
to Rule 424(b)(5) under
the Securities Act of
PROSPECTUS SUPPLEMENT 1933 in connection with
(TO PROSPECTUS DATED APRIL 21, 1999) Registration No. 333-53055
PIMCO ADVISORS HOLDINGS L.P.
OFFER TO EXCHANGE
UP TO 8,429,622 UNITS OF LIMITED PARTNERSHIP INTEREST
IN PIMCO ADVISORS HOLDINGS L.P.
FOR CLASS A UNITS OF PARTNERSHIP INTEREST IN PIMCO ADVISORS L.P.
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THIS EXCHANGE OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME ON JUNE
14, 1999, UNLESS EXTENDED.
PIMCO Advisors Holdings L.P., a Delaware limited partnership ("Holdings"),
hereby offers, upon the terms and subject to the conditions set forth in this
prospectus supplement, the prospectus and the Letter of Transmittal, the form of
which is attached hereto as Annex A, to exchange one unit of limited partnership
interest in Holdings (a "Holdings Unit") for each Class A unit of partnership
interest (an "Advisors Unit") of PIMCO Advisors L.P. ("PIMCO Advisors") up to a
maximum of 8,429,622 Holdings Units. As of April 22, 1999, 112,945,367 Advisors
Units were outstanding.
Holdings is a Delaware limited partnership which as its sole business acts
as a general partner of PIMCO Advisors and owns in excess of 48 million Advisors
Units, a 43% equity interest in PIMCO Advisors. PIMCO Advisors is one of the
largest investment management companies in the United States. Holdings owns one
Advisors Unit for each Holdings Unit outstanding, as well as a number of
Advisors Units allocable to the general partner interest of Holdings.
Accordingly, each Holdings Unit represents an indirect economic interest in one
Advisors Unit. If you accept this exchange offer, you will receive Holdings
Units representing an indirect economic interest in PIMCO Advisors equal to the
direct economic interest in PIMCO Advisors represented by the Advisors Units you
exchange.
While Holdings Units and Advisors Units represent the same economic
interest in PIMCO Advisors, there are differences between the two securities. In
particular, Holdings is subject to a partnership-level tax on its income which
decreases the amount of cash available for distributions compared to that of
PIMCO Advisors. For the quarter ended March 31, 1999 PIMCO Advisors declared
distributions to the holders of Advisors Units of $0.67 per unit. For the
quarter ended March 31, 1999, PIMCO Holdings declared distributions to the
holders of the Holdings Units of $0.58 per unit. See "Risk Factors--Effects of
Holdings-Level Tax on Distributions" in the accompanying prospectus. PIMCO
Partners, G.P. ("PGP") is the sole general partner of Holdings and is the
controlling general partner of PIMCO Advisors.
The PIMCO Advisors Partnership Agreement (as defined in the accompanying
prospectus) imposes limits on the number of Advisors Units which may be
transferred during any calendar year. Because Holdings can only accept Advisors
Units that are permitted to be transferred, these transfer restrictions may have
the effect of limiting the number of Advisors Units that Holdings may accept in
this exchange offer. The Holdings Units are being offered for exchange pursuant
to a registration statement of which this prospectus supplement and the
accompanying prospectus are a part. Consequently, Holdings is only offering to
exchange up to the remaining 8,429,622 Holdings Units which have been registered
under the Securities Act of 1933, as amended (the "Securities Act").
See "The Exchange Offer -- Possible Limitations on Participation."
FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION
WITH THIS EXCHANGE OFFER, SEE "RISK FACTORS," ON PAGE 5 OF THE ACCOMPANYING
PROSPECTUS.
If you desire to accept this exchange offer, follow the procedures set
forth in "The Exchange Offer--Procedures for Tendering."
Holdings will accept for exchange all validly tendered Advisors Units not
withdrawn prior to 11:59 p.m., New York City time, on June 14, 1999, unless the
exchange offer is extended by Holdings in its sole discretion (the "Expiration
Date"). You may withdraw any tendered Advisors Units at any time prior to the
Expiration Date. This exchange offer is subject to certain customary conditions.
See "The Exchange Offer--Conditions."
The Holdings Units are listed and principally traded on the New York Stock
Exchange. On May 14, 1999, the last trading date before this exchange offer was
announced, the closing price per unit for the Holdings Units on the New York
Stock Exchange was $29.00. Holdings will not receive any proceeds from the
exchange offer. PIMCO Advisors will bear the expenses of the exchange offer. No
underwriter is being used in connection with this exchange offer.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The exchange offer is not being made to, nor will Holdings accept
surrenders for exchange from, holders of Advisors Units in any jurisdiction in
which the exchange offer or its acceptance would not be in compliance with the
securities or blue sky laws of that jurisdiction. In jurisdictions where
securities, blue sky or other laws require the exchange offer to be made by a
licensed broker or dealer, this exchange offer shall be deemed to be made on
behalf of Holdings by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
The date of this prospectus supplement is May 17, 1999
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SUMMARY
Because this is a summary, it does not contain all the information that
may be important to you. You should read this entire prospectus supplement and
the accompanying prospectus before you decide whether to accept Holdings'
exchange offer.
THE PARTNERSHIPS
Holdings is a Delaware limited partnership which as its sole business acts
as a general partner of PIMCO Advisors and owns in excess of 48 million Advisors
Units, a 43% equity interest in PIMCO Advisors. PIMCO Advisors is one of the
largest investment management companies in the United States, with approximately
$248.7 billion under management at March 31, 1999. PIMCO Advisors' business
provides high quality fixed income and equity investment management to
institutional and retail clients, offering the investment management expertise,
performance record and reputations of its investment managers, which include the
fixed income oriented Pacific Investment Management Company and the equity
oriented Oppenheimer Capital. Holdings owns one Advisors Unit for each Holdings
Unit outstanding, as well as a number of Advisors Units allocable to the general
partner interest of Holdings. Accordingly, each Holdings Unit represents an
indirect economic interest in one Advisors Unit.
THE EXCHANGE OFFER
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THE EXCHANGE OFFER........................ Holdings is offering, upon the terms and subject to the conditions set forth in
this prospectus supplement, the prospectus and the accompanying Letter of
Transmittal, to exchange one Holdings Unit for each Advisors Unit. Holdings will
issue the Holdings Units on or promptly after the Expiration Date. See "The
Exchange Offer."
EXPIRATION DATE........................... The exchange offer will expire at 11:59 p.m., New York City time, on June 14,
1999, unless extended, in which case the term "Expiration Date" shall mean the
latest date and time to which this exchange offer is so extended.
CONDITIONS TO THE EXCHANGE OFFER.......... This exchange offer is subject to certain customary conditions that may be waived
by Holdings. The exchange offer is not conditioned upon any minimum aggregate
number of Advisors Units being tendered for exchange. See "The Exchange
Offer--Conditions."
PROCEDURES FOR TENDERING.................. If you own Advisors Units and wish to accept the exchange offer, you must
complete, sign and date the Letter of Transmittal, or a copy thereof, in
accordance with the instructions, and mail or otherwise deliver such Letter of
Transmittal, together with certificates for such Advisors Units and any other
required documentation to Holdings, at the address set forth herein. See "The
Exchange Offer -- Procedures for Tendering."
POSSIBLE LIMITATIONS ON PARTICIPATION..... The PIMCO Advisors Partnership Agreement provides that, with certain exceptions,
no more than 10% of the total number of outstanding Advisors Units may be
transferred in one year. If more than 11.2 million Advisors Units are proposed to
be transferred pursuant to this exchange offer or otherwise in nonexempt transfers
from the beginning of this year through the Expiration Date, PIMCO Advisors will
permit the proposed nonexempt transfers only up to the aggregate maximum limit,
pro rata among all proposed transferors. Holdings can only accept Advisors Units
that are permitted to be transferred under the PIMCO Advisors Partnership
Agreement. Accordingly, the transfer restrictions in the PIMCO Advisors
Partnership Agreement may have the effect of limiting the number of Advisors Units
that Holdings may accept in this exchange offer. In addition, this exchange offer
is being made pursuant to a registration statement of which this prospectus
supplement and the accompanying prospectus are a part. Consequently, Holdings will
only accept tenders of Advisors Units for exchange up to the 8,429,622 Holdings
Units remaining under the registration statement. See "The Exchange
Offer--Possible Limitations on Participation."
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ACCEPTANCE OF THE ADVISORS UNITS
AND DELIVERY OF THE HOLDINGS UNITS..... Subject to the satisfaction or waiver of the conditions to the exchange offer,
Holdings will accept for exchange any and all Advisors Units that are properly
tendered in the exchange offer prior to the Expiration Date and as to which all
conditions to transfer under the PIMCO Advisors Partnership Agreement have been
fulfilled. The Holdings Units issued pursuant to the exchange offer will be
delivered on the earliest practicable date following the Expiration Date. See "The
Exchange Offer--Terms of the Exchange Offer."
WITHDRAWAL RIGHTS......................... You may withdraw your tender of Advisors Units at any time prior to the Expiration
Date. See "The Exchange Offer--Withdrawal of Tenders."
CERTAIN FEDERAL INCOME TAX
CONSIDERATIONS......................... For a discussion of certain material federal income tax considerations relating to
the exchange of the Holdings Units for the Advisors Units, see "Certain
United States Federal Tax Considerations" in the accompanying prospectus.
EXCHANGE AGENT............................ Holdings will act as the exchange agent in connection with the exchange offer.
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RISK FACTORS
See the specific matters set forth under "Risk Factors" on page 5 of the
accompanying prospectus, for a discussion of certain factors that you should
consider in connection with this exchange offer and an investment in the
Holdings Units.
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THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
Holdings is making this exchange offer pursuant to the PIMCO Advisors
Partnership Agreement in order to provide the holders of Advisors Units with the
opportunity to elect a more liquid investment. Advisors Units are subject to
restrictions on transfer, and therefore are an illiquid investment. As described
in the accompanying prospectus under "Comparison of Securities--Transfers of
Limited Partnership Interests; Admission of Limited Partners," Advisors Units
generally may only be transferred during specified semiannual periods to a
limited group of persons qualified to hold Advisors Units. Holdings Units are
traded on the New York Stock Exchange and are therefore expected to provide a
more liquid investment than the Advisors Units. While there can be no assurances
in this regard, Holdings currently intends to make an offer of exchange to the
holders of Advisors Units twice each year, during the periods when Advisors
Units may be transferred under the PIMCO Advisors Partnership Agreement. See
"Comparison of Securities--Transfers of Limited Partner Interests; Admission of
Limited Partners" in the accompanying prospectus.
RESALE OF THE HOLDINGS UNITS
By offering the holders of Advisors Units the ability to receive Holdings
Units in an offering registered under the Securities Act, it is expected that
holders who are not "affiliates" of Holdings within the meaning of Rule 405
under the Securities Act will be allowed to resell the Holdings Units to the
public without further registration under the Securities Act and without
delivering to the purchasers of the Holdings Units a prospectus that satisfies
the requirements of Section 10 of the Securities Act. Holdings Units received in
exchange for Advisors Units by persons considered "affiliates" of Holdings will
be subject to restrictions under the Securities Act. AFFILIATES WHO DESIRE TO
RESELL THE HOLDINGS UNITS RECEIVED IN THE EXCHANGE OFFER PURSUANT TO THE
ACCOMPANYING PROSPECTUS MAY DO SO ONLY THROUGH A SUPPLEMENT TO THAT PROSPECTUS,
AND MUST CONTACT AND COORDINATE WITH HOLDINGS IN THE PREPARATION OF THAT
SUPPLEMENT. Holdings currently intends to cooperate in the preparation of such a
supplement if requested.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this prospectus
supplement, the prospectus and the Letter of Transmittal, Holdings will accept
any and all Advisors Units validly tendered and not withdrawn prior to the
Expiration Date. Holdings will issue one Holdings Unit in exchange for each
Advisors Unit surrendered pursuant to the exchange offer. Tenders of Advisors
Units are subject to a minimum tender of 500 units.
As of April 22, 1999, 112,945,367 Advisors Units were outstanding. Only a
registered holder of the Advisors Units (or such holder's legal representative
or attorney-in-fact) as reflected on the records of PIMCO Advisors may
participate in the exchange offer. There will be no fixed record date for
determining registered holders of the Advisors Units entitled to participate in
the exchange offer.
As a holder of the Advisors Units, you do not have any appraisal or
dissenters' rights under the PIMCO Advisors Partnership Agreement in connection
with the exchange offer. Holdings intends to conduct the exchange offer
consistent with the applicable provisions of the PIMCO Advisors Partnership
Agreement and the applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations of the Securities and Exchange Commission thereunder.
Holdings will act as agent for the tendering holders of Advisors Units for
the purposes of receiving the Holdings Units from Holdings.
If you tender Advisors Units in the exchange offer, you will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of
Advisors Units pursuant to the exchange offer. PIMCO Advisors will pay all
charges and expenses, other than certain applicable taxes described below, in
connection with the exchange offer. See "-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 11:59 p.m., New York City time on
June 14, 1999, unless Holdings, in its sole discretion, extends the exchange
offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the exchange offer is extended.
In order to extend the exchange offer, Holdings will mail to the
registered holders an announcement of the extension which shall include
disclosure of the approximate number of Advisors Units tendered to date, prior
to 9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date.
Holdings reserves the right, in its reasonable discretion, (i) to delay
accepting any Advisors Units, (ii) to extend the exchange offer, or (iii) to
terminate the exchange offer. Any such delay in acceptance, extension,
termination or
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amendment will be followed as promptly as practicable by oral or written notice
thereof to the registered holders of the Advisors Units. If the exchange offer
is amended in a manner determined by Holdings to constitute a material change,
Holdings will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered holders of Advisors Units,
and Holdings will extend the exchange offer for a period of five to ten business
days, depending upon the significance of the amendment and the manner of
disclosure to the registered holders, if the exchange offer would otherwise
expire during such five to ten business day period.
PROCEDURES FOR TENDERING
Only the person who is the registered holder of Advisors Units may tender
those Advisors Units in the exchange offer. To tender in the exchange offer, you
must complete, sign and date the Letter of Transmittal, or a copy thereof, and
mail or otherwise deliver such Letter of Transmittal or such copy to Holdings at
the address set forth below under "-- Exchange Agent" for receipt prior to the
Expiration Date. In addition, certificates for your Advisors Units must be
received by Holdings along with the Letter of Transmittal.
By tendering your Advisors Units and having not withdrawn the tender prior
to the Expiration Date, you will have entered an agreement with Holdings in
accordance with the terms and subject to the conditions set forth herein and in
the Letter of Transmittal.
THE METHOD OF DELIVERY OF ADVISORS UNITS AND THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO HOLDINGS IS AT YOUR ELECTION AND RISK. INSTEAD
OF DELIVERY BY MAIL, IT IS RECOMMENDED YOU USE AN OVERNIGHT OR HAND DELIVERY
SERVICE, PROPERLY INSURED. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO
ASSURE DELIVERY TO HOLDINGS BEFORE THE EXPIRATION DATE. YOU MAY REQUEST YOUR
BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR NOMINEE TO EFFECT THE ABOVE
TRANSACTIONS FOR YOU.
If the Letter of Transmittal is signed by a person other than the
registered holder of any Advisors Units listed therein, those Advisors Units
must be endorsed or accompanied by a properly completed power of attorney,
signed by the registered holder as its name appears on those Advisors Units.
If the Letter of Transmittal or any Advisors Units or transfer powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and unless waived by
Holdings, evidence satisfactory to Holdings of their authority to so act must be
submitted with the Letter of Transmittal.
The PIMCO Advisors Partnership Agreement imposes limits on the number of
Advisors Units which may be transferred during any calendar year. Because
Holdings can only accept Advisors Units that are permitted to be transferred,
these transfer restrictions may have the effect of limiting the number of
Advisors Units that Holdings may accept in this exchange offer. See "--Possible
Limitations on Participation."
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Advisors Units will be
determined by Holdings in its sole discretion. This determination will be final
and binding. Holdings reserves the absolute right to reject any and all Advisors
Units not properly tendered or any Advisors Units the acceptance of which would,
in the opinion of Holdings' counsel, be unlawful. Holdings also reserves the
right to waive any defects, irregularities or conditions of tender as to
particular Advisors Units. Holdings' interpretation of the terms and conditions
of the exchange offer (including the instructions in the Letter of Transmittal)
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Advisors Units must be cured within
such time as Holdings shall determine. Although Holdings intends to notify you
of defects or irregularities with respect to your tender of Advisors Units,
neither Holdings nor any other person shall incur any liability for failure to
give such notification. Tenders of Advisors Units will not be deemed to have
been made until such defects or irregularities have been cured or waived.
Holdings currently anticipates making offers of exchange to the holders of
Advisors Units twice each year at such times as are permitted under the PIMCO
Advisors Partnership Agreement. There can be no assurances, however, that any
such subsequent offers will be made. In addition, Holdings may, under the terms
of the PIMCO Advisors Partnership Agreement and the Operating Agreement between
Holdings and PIMCO Advisors acquire additional Advisors Units from time to time
following the Expiration Date in issuances from PIMCO Advisors or from holders
of Advisors Units, in privately negotiated transactions or otherwise. While the
Operating Agreement between PIMCO Advisors and Holdings contemplates that
Holdings will at all times own one Advisors Unit for each Holdings Unit
outstanding, there can be no assurances that this policy will be maintained, and
the terms of any such purchases or offers could differ from the terms of this
exchange offer.
POSSIBLE LIMITATION ON PARTICIPATION
The PIMCO Advisors Partnership Agreement provides that, except for certain
transfers of Advisors Units that are specified as being exempt and transfers of
general partner units by a general partner to its affiliates, no Advisors Units
may be transferred except during two "Semiannual Transfer Periods" each year.
During these periods, Advisors Units may be transferred to persons qualified
under the PIMCO Advisors Partnership Agreement to hold Advisors Units. The
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PIMCO Advisors Partnership Agreement generally limits such qualified
persons to include a current partner of PIMCO Advisors, a member of the PIMCO
Advisors management board, an executive officer of PIMCO Advisors or a managing
director of one of PIMCO Advisors' investment management subsidiaries or
divisions, and certain entities controlled by such persons, and any person
designated as a qualified person by the general partners of PIMCO Advisors.
The PIMCO Advisors Partnership Agreement provides that if (a) the total
number of Advisors Units either tendered pursuant to a registered exchange offer
or proposed to be transferred in semiannual transfers during the Semiannual
Transfer Period, plus (b) the total number of Advisors Units transferred in
semiannual transfers during the preceding Semiannual Transfer Period, if any, in
the same year, exceeds 10% of the total number of outstanding Advisors Units,
the number of Advisors Units tendered pursuant to the registered exchange offer
and proposed to be transferred in semiannual transfers during that Semiannual
Transfer Period shall be reduced pro rata such that the 10% limit is not
exceeded. For purposes of the 10% test, Advisors Units transferred in exempt
transfers are not counted, and such transfers are permitted under the PIMCO
Advisors Partnership Agreement even if the 10% limit requires that other
proposed transfers be cut back. See "Comparison of Securities--Transfers of
Limited Partnership Interests; Admission of Limited Partners" in the
accompanying prospectus for a more detailed description of these limitations.
This exchange offer is made pursuant to a registration statement of which
this prospectus supplement and the accompanying prospectus is a part. The
registration statement registered 10,000,000 Holdings Units under the Securities
Act to be offered from time to time in exchange for Advisors Units. 8,429,622
Holdings Units remain available to be used under the registration statement. As
a result, Holdings can only accept a number of Advisors Units in an amount such
that the Holding Units offered in exchange will not exceed 8,429,622 units. If
the total number of Advisors Units tendered pursuant to this exchange offer
would result in more than 8,429,622 Holdings Units being issued in exchange,
Holdings will accept Advisors Units tendered on a pro rata basis such that no
more than 8,429,622 Holding Units will be issued in exchange.
Holdings will accept for exchange all Advisors Units properly tendered
prior to the Expiration Date. Because Holdings can only accept Advisors Units
that are permitted to be transferred under the PIMCO Advisors Partnership
Agreement, these transfer restrictions may have the effect of limiting the
number of Advisors Units that Holdings may accept in this exchange offer.
RETURN OF ADVISORS UNITS
If any tendered Advisors Units are not accepted for any reason set forth
in the terms and conditions of this exchange offer or if Advisors Units are
withdrawn or are submitted for a greater number of units than the holders desire
to exchange, such unaccepted, withdrawn or non-exchanged Advisors Units will be
returned without expense to the tendering holder thereof as promptly as
practicable.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, you may withdraw tenders of Advisors
Units at any time prior to 11:59 p.m. on the Expiration Date.
To withdraw a tender of Advisors Units in the exchange offer, Holdings
must receive your written or facsimile transmission notice of withdrawal at its
address set forth below prior to the Expiration Date. Your notice of withdrawal
must (i) specify the name of the person having deposited the Advisors Units to
be withdrawn, (ii) identify the Advisors Units to be withdrawn (including the
certificate number or numbers and number of Advisors Units) and (iii) be signed
by the same person in the same manner as the original signature on the Letter of
Transmittal by which you tendered those Advisors Units. Holdings will determine
in its sole discretion all questions as to the validity, form and eligibility
(including time of receipt) of such notices, and its determination shall be
final and binding on all parties. Any Advisors Units so withdrawn will be deemed
not to have been validly tendered for purposes of the exchange offer and no
Holdings Units will be issued with respect thereto unless the Advisors Units so
withdrawn are validly retendered. You may retender Advisors Units that you
properly withdrew by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the exchange offer, Holdings shall not
be required to accept for exchange, or exchange the Holdings Units for, any
Advisors Units, and may terminate the exchange offer as provided herein before
the acceptance of such Advisors Units, if the exchange offer violates applicable
law, rules or regulations or an applicable interpretation of the staff of the
Securities and Exchange Commission or, in the sole discretion of Holdings, if it
is deemed to be in the best interests of Holdings to terminate the exchange
offer.
If Holdings determines in its reasonable discretion that any of these conditions
are not satisfied, Holdings may (i) refuse to accept any Advisors Units and
return all tendered Advisors Units to the tendering holders, (ii) extend the
exchange offer and retain all Advisors Units tendered prior to the expiration of
the exchange offer, subject, however, to your rights to withdraw your Advisors
Units (see "--Withdrawal of Tenders"), or (iii) waive the unsatisfied conditions
with respect to the exchange offer and accept all properly tendered Advisors
Units that have not been withdrawn. If that
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waiver constitutes a material change to the exchange offer, Holdings will
promptly disclose the waiver by means of a prospectus supplement that will be
distributed to the registered holders of the Advisors Units, and Holdings will
extend the exchange offer for a period of five to ten business days, depending
upon the significance of the waiver and the manner of disclosure to the
registered holders, if the exchange offer would otherwise expire during such
five to ten business day period.
EXCHANGE AGENT
Holdings will act as exchange agent for the exchange offer. If you have
any questions or requests for assistance, requests for additional copies of this
prospectus supplement, the prospectus or the Letter of Transmittal, contact
Holdings as follows:
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By Registered or Certified Mail, Hand Delivery or By Facsimile:
Overnight Delivery:
PIMCO Advisors Holdings L.P. (949) 717-7076
800 Newport Center Drive
Newport Beach, California 92660 Confirm by Telephone:
Attention: Richard M. Weil, Secretary
(949) 717-7022
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FEES AND EXPENSES
The expenses of soliciting tenders will be borne by PIMCO Advisors. The
principal solicitation is being made by mail; however, officers and employees of
Holdings and its affiliates may make additional solicitation by telephone or in
person.
Holdings has not retained any dealer-manager in connection with the
exchange offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the exchange offer.
The cash expenses to be incurred in connection with the exchange offer
will be paid by PIMCO Advisors and are estimated in the aggregate to be
approximately $10,000. Such expenses include accounting and legal fees and
printing costs, among others. In addition, PIMCO Advisors has paid the expenses
in connection with previous exchange offers under the registration statement.
PIMCO Advisors will pay all transfer taxes, if any, applicable to the
exchange of Advisors Units pursuant to the exchange offer. If, however, a
transfer tax is imposed for any reason other than the exchange of the Advisors
Units pursuant to the exchange offer, then the amount of any such transfer taxes
(whether imposed on the registered Holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with the Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such tendering holder.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the exchange offer is voluntary. You are urged to consult
your financial and tax advisors in making your own decisions on what action to
take.
Advisors Units that are not tendered or are tendered but not accepted
will, following consummation of this exchange offer, continue to be subject to
the existing transfer restrictions, including the restrictions contained in the
PIMCO Advisors Partnership Agreement. As described in the accompanying
prospectus under "Comparison of Securities--Transfers of Limited Partnership
Interests; Admission of Limited Partners," Advisors Units generally may only be
transferred during specified semiannual periods to a small group of persons
qualified to hold Advisors Units. While Holdings currently intends to make
offers of exchange to the holders of Advisors Units twice each year, during the
periods when Advisors Units may be transferred under the PIMCO Advisors
Partnership Agreement, there can be no assurances that any future exchange
offers will be made. Accordingly, if you fail to participate in the exchange
offer, you may have limited opportunities for liquidity in the future. Further,
your Advisors Units will continue to be "restricted securities" and PIMCO
Advisors has no intention effecting a registration of the Advisors Units under
the Securities Act. Accordingly, the Advisors Units may not be offered or sold
except in a transaction exempt from the registration requirements of the
Securities Act.
ACCOUNTING TREATMENT
For accounting purposes, Holdings will recognize no gain or loss as a
result of the exchange offer.
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ANNEX A
FORM OF
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
CLASS A UNITS OF PARTNERSHIP INTEREST IN
PIMCO ADVISORS L.P.
FOR UNITS OF LIMITED PARTNERSHIP INTEREST IN
PIMCO ADVISORS HOLDINGS L.P.
PURSUANT TO THE PROSPECTUS DATED APRIL 21, 1999 AND
THE PROSPECTUS SUPPLEMENT DATED MAY 17, 1999
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 11:59 P.M., NEW YORK
CITY TIME, ON JUNE 14, 1999 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER
IS EXTENDED BY HOLDINGS IN ITS SOLE DISCRETION, IN WHICH CASE THE TERM
"EXPIRATION DATE" SHALL MEAN THE LATEST DATE AND TIME TO WHICH THE EXCHANGE
OFFER IS EXTENDED, TENDERS MAY BE WITHDRAWN AT ANY TIME PRIOR TO 11:59 P.M., NEW
YORK CITY TIME, ON THE EXPIRATION DATE.
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By Registered or Certified Mail, By Facsimile (for Eligible Institutions Only):
By Hand or Overnight Courier
or In Person: (949) 717-7076
PIMCO Advisors Holdings L.P.
800 Newport Center Drive Confirm Receipt of Notice of
Newport Beach, California 92660 Guaranteed Delivery by Telephone:
Attention: Richard M. Weil, Secretary
(949) 717-7022
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DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER
OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY. THE INSTRUCTIONS SET FORTH IN THIS LETTER OF
TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
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The undersigned acknowledges receipt of the Prospectus dated April 21,
1999 (the "Prospectus") and the Prospectus Supplement dated May 17, 1999 (the
"Prospectus Supplement"), of PIMCO Advisors Holdings L.P., a Delaware limited
partnership ("Holdings"), and this Letter of Transmittal (the "Letter of
Transmittal"), which together with the Prospectus and Prospectus Supplement
constitute Holdings' offer (the "Exchange Offer") to exchange its units of
limited partner interest ("Holdings Units") for each Class A unit of partnership
interest ("Advisors Units") of PIMCO Advisors L.P. ("PIMCO Advisors").
Recipients of the Prospectus and the Prospectus Supplement should read the
requirements described in such Prospectus and Prospectus Supplement with respect
to eligibility to participate in and certain volume limitations on the Exchange
Offer. Capitalized terms used but not defined herein have the meaning given to
them in the Prospectus and the Prospectus Supplement.
The undersigned hereby tenders the Advisors Units described in the box
entitled "Description of Advisors Units" below pursuant to the terms and
conditions described in the Prospectus, the Prospectus Supplement and this
Letter of Transmittal. The undersigned is the registered owner of all the
Advisors Units described below.
In order to properly complete this Letter of Transmittal, a holder of
Advisors Units must (i) complete the box entitled "Description of Advisors
Units," (ii) if appropriate, check and complete the boxes relating to Special
Issuance Instructions and Special Delivery Instructions, (iii) sign the Letter
of Transmittal by completing the box entitled "Sign Here" and (iv) complete the
Substitute Form W-9. Each holder of Advisors Units should carefully read the
detailed instructions below prior to completing this Letter of Transmittal. In
order to properly tender pursuant to the terms and conditions described in the
Prospectus, the Prospectus Supplement and this Letter of Transmittal, the
tendered Advisors Units must be enclosed with this properly executed Letter of
Transmittal.
Holders of Advisors Units who wish to tender their Advisors Units for
exchange must complete columns (1) through (3) in the box below entitled
"Description of Advisors Units," complete the boxes entitled Special Issuance
Instructions and Special Delivery Instructions, if applicable and sign the box
below entitled "Sign Here." If only those columns are completed, such holder of
Advisors Units will have tendered for exchange all Advisors Units listed in
column (3) below. If the holder of Advisors Units wishes to tender for exchange
less than all of such Advisors Units, column (4) must be completed in full. In
such case, such holder of Advisors Units should refer to Instruction 4.
A-2
<PAGE> 10
<TABLE>
<CAPTION>
DESCRIPTION OF ADVISORS UNITS
- ---------------------------------------------------------- ----------------------- ------------------------ -----------------------
<S> <C> <C> <C>
(1) (2) (3) (4)
ADVISORS UNIT AGGREGATE NUMBER OF ADVISORS
NAME(S) AND ADDRESS(ES) OF REGISTERED CERTIFICATE NUMBER OF ADVISORS UNITS TENDERED FOR
HOLDER(S) OF ADVISORS UNIT(S), EXACTLY AS NUMBER(S) UNITS EXCHANGE
NAME(S) APPEAR(S) ON ADVISORS UNITS CERTIFICATE(S) (ATTACH SIGNED REPRESENTED BY (MINIMUM
(PLEASE FILL IN, IF BLANK) LIST IF NECESSARY) CERTIFICATE(S)* OF 500 UNITS)
- ---------------------------------------------------------- ----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
----------------------- ------------------------ -----------------------
</TABLE>
* Unless indicated in the column "Number of Advisors Units Tendered for
Exchange," any tendering holder of Advisors Units will be deemed to have
tendered the total number of units represented by the column labeled
"Aggregate Number of Advisors Units Represented by Certificate(s)."
TENDERED ADVISORS UNITS MUST BE ENCLOSED HEREWITH.
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 5, 6, and 7)
To be completed ONLY if the Holdings Units issued in exchange for Advisors
Units, certificates for Advisors Units representing an aggregate amount not
exchanged for Holdings Units, or Advisors Units (if any) not tendered for
exchange, are to be issued in the name of someone other than the undersigned.
Issue to:
Name:
--------------------------------------------------------------------------
(Please print)
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5, 6, and 7)
To be completed ONLY if the Holdings Units issued in exchange for Advisors
Units, certificates for Advisors Units representing an aggregate amount not
exchanged for Holdings Units, or Advisors Units (if any) not tendered for
exchange, are to be mailed or delivered (i) to someone other than the
undersigned or (ii) to the undersigned at an address other than the address
shown below the undersigned's signature.
Deliver to:
Name:
--------------------------------------------------------------------------
(Please print)
Address
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security No.)
A-3
<PAGE> 11
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
Pursuant to the offer by PIMCO Advisors Holdings L.P., a Delaware limited
partnership ("Holdings"), upon the terms and subject to the conditions set forth
in the Prospectus dated April 21, 1999 (the "Prospectus"), the Prospectus
Supplement dated May 17, 1999 (the "Prospectus Supplement") and this Letter of
Transmittal (the "Letter of Transmittal"), which together with the Prospectus
and Prospectus Supplement constitute Holdings' offer (the "Exchange Offer") to
exchange its units of limited partner interest ("Holdings Units") for each
tendered Class A unit of partnership interest ("Advisors Units") of PIMCO
Advisors L.P. ("PIMCO Advisors"), the undersigned hereby tenders to Holdings for
exchange the Advisors Units indicated above.
By executing this Letter of Transmittal and subject to and effective upon
acceptance for exchange of the Advisors Units tendered for exchange herewith,
the undersigned will have irrevocably sold, assigned, transferred and exchanged,
to Holdings, all right, title and interest in, to and under all of the Advisors
Units tendered for exchange hereby, and hereby will have appointed Holdings as
the true and lawful agent and attorney-in-fact of such holder of Advisors Units
with respect to such Advisors Units with full power of substitution to (i)
receive, present and deliver such Advisors Units for transfer on the books of
PIMCO Advisors and (ii) receive all benefits and otherwise exercise all rights
and incidents of beneficial ownership with respect to such Advisors Units, all
in accordance with the terms of the Exchange Offer. The power of attorney
granted in this paragraph shall be deemed to be irrevocable and coupled with an
interest.
The undersigned hereby represents and warrants that (i) the undersigned is
the owner; (ii) has a net long position equal to or greater than the Advisors
Units tendered hereby; (iii) the undersigned has full power and authority to
tender, exchange, assign and transfer the Advisors Units; and (iv) that when
such Advisors Units are accepted for exchange by Holdings, Holdings will acquire
good and marketable title thereto, free and clear of all liens, restrictions,
charges and encumbrances and such Advisors Units are not subject to any adverse
claims. The undersigned will, upon receipt, execute and deliver any additional
documents deemed by Holdings to be necessary or desirable to complete the
exchange, assignment and transfer of the Advisors Units tendered for exchange
hereby.
Tenders of Advisors Units for exchange may be withdrawn at any time prior
to 11:59 p.m., New York City time, on the Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders" in the Prospectus Supplement. Any Advisors Units
tendered by the undersigned and not accepted for exchange will be returned to
the undersigned at the address set forth above unless otherwise indicated in the
box above entitled "Special Delivery Instructions" as promptly as practicable
after the Expiration Date.
The undersigned acknowledges that Holdings' acceptance of Advisors Units
validly tendered for exchange pursuant to any one of the procedures described in
the section of the Prospectus Supplement entitled "The Exchange Offer" and in
the instructions hereto will constitute a binding agreement between the
undersigned and Holdings upon the terms and subject to the conditions of the
Exchange Offer.
Unless otherwise indicated in the box entitled "Special Issuance
Instructions," please return any Advisors Units not tendered for exchange in the
name(s) of the undersigned. Similarly, unless otherwise indicated in the box
entitled "Special Delivery Instructions," please mail any certificates for
Advisors Units not tendered or exchanged (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Issuance Instructions" and
"Special Delivery Instructions" are completed, please issue the certificates
representing the Holdings Units issued in exchange for the Advisors Units
accepted for exchange in the name(s) of, and return any Advisors Units not
tendered for exchange or not exchanged to, the person(s) so indicated. The
undersigned recognizes that Holdings has no obligation pursuant to the "Special
Issuance Instructions" and "Special Delivery Instructions" to transfer any
Advisors Units from the name of the holder of Advisors Units thereof if Holdings
does not accept for exchange any of the Advisors Units so tendered for exchange
or if such transfer would not be in compliance with any transfer restrictions
applicable to such Advisors Units.
IN ORDER TO VALIDLY TENDER ADVISORS UNITS FOR EXCHANGE, HOLDERS OF
ADVISORS UNITS MUST COMPLETE, EXECUTE AND DELIVER THIS LETTER OF TRANSMITTAL.
Except as stated in the Prospectus and the Prospectus Supplement, all authority
herein conferred or agreed to be conferred shall survive the death, incapacity,
or dissolution of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned. Except as otherwise stated in the Prospectus and
the Prospectus Supplement, this tender for exchange of Advisors Units is
irrevocable.
A-4
<PAGE> 12
SIGN HERE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF OWNER(S))
Date: _________________ , 1999
Must be signed by the registered holder(s) of Advisors Units exactly as
name(s) appear(s) on certificate(s) representing the Advisors Units or on a
security position listing or by person(s) authorized to become registered
Advisors Unit holder(s) by certificates and documents transmitted herewith. If
signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please provide the following information. (See
Instruction 5).
Name(s):
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
----------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No. ( )
--------------------------------------------
Tax Identification or Social Security Nos.
--------------------------------------
PLEASE COMPLETE SUBSTITUTE FORM W-9
A-5
<PAGE> 13
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ADVISORS UNITS. Certificates
for all physically tendered Advisors Units, as well as a properly completed and
duly executed copy of this Letter of Transmittal or facsimile hereof, and any
other documents required by this Letter of Transmittal, must be received by
Holdings at its address set forth on the cover of this Letter of Transmittal
prior to 11:59 p.m., New York City time, on the Expiration Date.
THE METHOD OF DELIVERY OF ADVISORS UNITS, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS TO HOLDINGS IS AT THE ELECTION AND RISK OF THE
HOLDER. EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY WILL BE DEEMED MADE
ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY HOLDINGS. INSTEAD OF DELIVERY BY
MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE,
PROPERLY INSURED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE
DELIVERY TO HOLDINGS BEFORE THE EXPIRATION DATE. HOLDERS MAY REQUEST THEIR
RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO
EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders of Advisors Units, by execution of this Letter of Transmittal
(or facsimile hereof), waive any right to receive notice of the acceptance of
their Advisors Units for exchange.
2. INADEQUATE SPACE. If the space provided in the box entitled
"Description of Advisors Units" above is inadequate, the certificate numbers and
number of the Advisors Units being tendered should be listed on a separate
signed schedule affixed hereto.
3. WITHDRAWALS. A tender of Advisors Units may be withdrawn at any time
prior to 11:59 p.m., New York City time, on the Expiration Date by delivery of
written or facsimile notice of withdrawal to Holdings at the address set forth
on the cover of this Letter of Transmittal. To be effective, a notice of
withdrawal of Advisors Units must (i) specify the name of the person who
tendered the Advisors Units to be withdrawn, (ii) identify the Advisors Units to
be withdrawn (including the certificate number or numbers and the number of such
Advisors Units), and (iii) be signed by the holder of Advisors Units which were
tendered. All questions as to the validity, form and eligibility (including time
of receipt) of such notices will be determined by Holdings in its sole
discretion, whose determination shall be final and binding on all parties. Any
Advisors Units so withdrawn will thereafter be deemed not validly tendered for
purposes of the Exchange Offer and no Holdings Units will be issued with respect
thereto unless the Advisors Units so withdrawn are validly retendered. Properly
withdrawn Advisors Units may be retendered by following one of the procedures
described in the section of the Prospectus Supplement entitled "The Exchange
Offer--Procedures for Tendering" at any time prior to 11:59 p.m., New York City
time, on the Expiration Date.
4. PARTIAL TENDERS. Tenders of Advisors Units will be accepted subject to
a minimum tender of 500 units. If a tender for exchange is to be made with
respect to less than the total number of Advisors Units held by such holder,
fill in the number of Advisors Units which are tendered for exchange in column
(4) of the box entitled "Description of Advisors Units," as more fully described
in the footnotes thereto. In case of a partial tender for exchange, a new
certificate, in fully registered form, for the remaining number of Advisors
Units, will be sent to the holders of Advisors Units unless otherwise indicated
in the appropriate box on this Letter of Transmittal as promptly as practicable
after the expiration or termination of the Exchange Offer.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL, ASSIGNMENT AND ENDORSEMENTS.
The signature(s) of the holder of Advisors Units on this Letter of Transmittal
must correspond with the name(s) as written on the face of the Advisors Units
without alteration, enlargement or any change whatsoever. If tendered Advisors
Units are owned of record by two or more joint owners, all such owners must sign
this Letter of Transmittal.
If any tendered Advisors Units are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate copies of this Letter of Transmittal and any necessary or required
documents as there are different registrations or certificates.
When this Letter of Transmittal is signed by the holder of the
Advisors Units listed and transmitted hereby, no endorsements of Advisors Units
or powers of attorney are required. If, however, Advisors Units not tendered or
not accepted, are to be issued or returned in the name of a person other than
the holder of Advisors Units, then the Advisors Units transmitted hereby must be
endorsed or accompanied by a properly completed power of attorney, in a form
satisfactory to Holdings, in either case signed exactly as the name(s) of the
holder of Advisors Units appear(s) on the Advisors Units.
If this Letter of Transmittal or Advisors Units or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative
A-6
<PAGE> 14
capacity, such persons should so indicate when signing, and unless waived by
Holdings, evidence satisfactory to Holdings of their authority to so act must be
submitted with this Letter of Transmittal.
If this Letter of Transmittal is signed by a person other than the
registered holder of Advisors Units listed, the Advisors Units must be endorsed
or accompanied by a properly completed power of attorney, in either case signed
by such registered holder exactly as the name(s) of the registered holder of
Advisors Units appear(s) on the certificates.
6. TRANSFER TAXES. Except as set forth in this Instruction 6, PIMCO
Advisors will pay all transfer taxes, if any, applicable to the exchange of
Advisors Units pursuant to the Exchange Offer. If, however, a transfer tax is
imposed for any reason other than the exchange of the Advisors Units pursuant to
the exchange offer, then the amount of any such transfer taxes (whether imposed
on the registered holder or any other persons) will be payable by the tendering
holder. If satisfactory evidence of payment of such taxes or exemptions
therefrom is not submitted with this Letter of Transmittal, the amount of such
transfer taxes will be billed directly to such tendering holder.
7. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If the Holdings Units are
to be issued, or if any Advisors Units not tendered for exchange are to be
issued or sent to someone other than the holder of Advisors Units or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed.
8. IRREGULARITIES. All questions as to the validity, form, eligibility
(including time of receipt), compliance with conditions, acceptance and
withdrawal of tendered Advisors Units will be determined by Holdings in its sole
discretion, which determination will be final and binding. Holdings reserves the
absolute right to reject any and all Advisors Units not properly tendered or any
Advisors Units Holdings' acceptance of which would, in the opinion of counsel
for Holdings, be unlawful. Holdings also reserves the right to waive any
defects, irregularities or conditions of tender as to particular Advisors Units.
Holdings' interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letter of Transmittal) will be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Advisors Units must be cured with such time as
Holdings shall determine. Although Holdings intends to notify holders of defects
or irregularities with respect to tenders of Advisors Units, neither Holdings
nor any other person shall incur any liability for failure to give such
notification. Tenders of Advisors Units will not be deemed to have been made
until such defects or irregularities have been cured or waived. Any Advisors
Units received by Holdings that are not properly tendered and as to which the
defects or irregularities have not been cured or waived will be returned by
Holdings to the tendering holders, unless otherwise provided in this Letter of
Transmittal, as soon as practicable following the Expiration Date.
9. WAIVER OF CONDITIONS. Holdings reserves the absolute right to waive,
amend or modify certain of the specified conditions as described under "The
Exchange Offer--Conditions" in the Prospectus Supplement in the case of any
Advisors Units tendered (except as otherwise provided in the Prospectus and the
Prospectus Supplement).
10. MUTILATED, LOST, STOLEN OR DESTROYED ADVISORS UNITS. Any tendering
Holder whose Advisors Units have been mutilated, lost, stolen or destroyed
should contact Holdings at the address listed below for further instructions:
PIMCO Advisors Holdings L.P.
800 Newport Center Drive
Newport Beach, California 92660
Attention: Richard M. Weil, Secretary
11. REQUESTS FOR INFORMATION OR ADDITIONAL COPIES. Requests for
information or for additional copies of the Prospectus, the Prospectus
Supplement and this Letter of Transmittal may be directed to Holdings at the
address or telephone number set forth on the cover of this Letter of
Transmittal.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF, IF
APPLICABLE) TOGETHER WITH CERTIFICATES REPRESENTING THE TENDERED ADVISORS UNITS
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY HOLDINGS PRIOR TO 11:59
P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
A-7
<PAGE> 15
IMPORTANT TAX INFORMATION
Under current federal income tax law, a holder of Advisors Units whose
tendered Advisors Units are accepted for exchange may be subject to backup
withholding unless the holder provides Holdings (as payor), with either (i) such
holder's correct taxpayer identification number ("TIN") on Substitute Form W-9
attached hereto, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder of Advisors Units is awaiting a TIN) and that (A)
the holder of Advisors Units has not been notified by the Internal Revenue
Service that he or she is subject to backup withholding as a result of a failure
to report all interest or dividends or (B) the Internal Revenue Service has
notified the holder of Advisors Units that he or she is no longer subject to
backup withholding; or (ii) an adequate basis for exemption from backup
withholding. If such holder of Advisors Units is an individual, the TIN is such
holder's social security number. If Holdings is not provided with the correct
taxpayer identification number, the holder of Advisors Units may be subject to
certain penalties imposed by the Internal Revenue Service.
Certain holders of Advisors Units (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. Exempt holders of Advisors Units should
indicate their exempt status on Substitute Form W-9. A foreign individual may
qualify as an exempt recipient by submitting to Holdings a properly completed
Internal Revenue Service Form W-8 (which Holdings will provide upon request)
signed under penalty of perjury, attesting to the holder's exempt status. See
the enclosed Guidelines of Certification of Taxpayer Identification Number on
Substitute Form W-9 (the "Guidelines") for additional instructions.
If backup withholding applies, Holdings is required to withhold 31% of any
payment made to the holder of Advisors Units or other Payee. Backup withholding
is not an additional federal income tax. Rather, the federal income tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained from the Internal Revenue Service.
The holder of Advisors Units is required to give Holdings the TIN (e.g.,
social security number or employer identification number) of the record owner of
the Advisors Units. If the Advisors Units are held in more than one name or are
not held in the name of the actual owner, consult the enclosed Guidelines for
additional guidance regarding which number to report.
A-8
<PAGE> 16
PAYER'S NAME:
<TABLE>
<S> <C> <C>
- ----------------------------------- --------------------------------- ---------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN Social Security Number OR
IN THE BOX AT RIGHT AND CERTIFY
FORM W-9 BY SIGNING AND DATING BELOW Employer Identification Number
Department of the Treasury
Internal Revenue Service
--------------------------------- ---------------------------------
Payer's Request for Taxpayer PART 2--CERTIFICATION--Under Penalties of Perjury, I certify that:
Identification Number (TIN) (1) The number shown on this form is my current taxpayer
identification number (or I am waiting for a number to be
issued to me) and
(2) I am not subject to backup withholding either because I have
not been notified by the Internal Revenue Service (the
"IRS") that I am subject to backup withholding as a result
of a failure to report all interest or dividends, or the IRS
has notified me that I am no longer subject to backup
withholding.
-------------------------------------------------------------------
PART 3--AWAITING TIN [ ]
- ----------------------------------- -------------------------------------------------------------------
</TABLE>
CERTIFICATION INSTRUCTIONS--You must cross out item (2) in Part 2 above if you
have been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you are subject to backup withholding you receive
another notification from the IRS stating that you are no longer subject to
backup withholding, do not cross out item(2).
Signature____________________________________________ Date__________________
Name
_________________________________________________________________________
Address______________________________________________________________________
City ____________________________ State _______________ Zip Code ____________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENT MADE TO YOU PURSUANT TO THE EXCHANGE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECK THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
PAYOR'S NAME: PIMCO ADVISORS HOLDINGS L.P.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver such an application in the near future. I understand that if I do not
provide a taxpayer identification number within sixty (60) days, 31% of all
reportable payments made to me thereafter will be withheld until I provide such
number.
- ---------------------------------------------------- -------------------------
SIGNATURE DATE
A-9
<PAGE> 17
PROSPECTUS
PIMCO ADVISORS HOLDINGS L.P.
10,000,000 UNITS OF LIMITED PARTNERSHIP INTEREST
This prospectus covers the offer and sale of up to 10,000,000 units of
limited partner interest ("Holdings Units") of PIMCO Advisors Holdings L.P., a
Delaware limited partnership ("Holdings"), that may be offered and issued by
Holdings from time to time in connection with exchange offers made by Holdings
for Class A units of partnership interest ("Advisors Units") of PIMCO Advisors
L.P. ("PIMCO Advisors") in accordance with Rule 415(a)(1)(viii) under the
Securities Act of 1933, as amended (the "Securities Act"), or as otherwise
permitted under the Securities Act. This prospectus, as amended or supplemented,
if necessary, also relates to certain Holdings Units that may be resold or
reoffered by persons who acquired such units pursuant to this prospectus.
Holdings is a Delaware limited partnership which as its sole business acts
as a general partner of PIMCO Advisors and owns in excess of 48 million Advisors
Units, an approximate 44% equity interest in PIMCO Advisors. PIMCO Advisors is
one of the largest investment management companies in the United States.
Holdings owns one Advisors Unit for each Holdings Unit outstanding, as well as a
number of Advisors Units allocable to the general partner interest of Holdings.
Accordingly, each Holdings Unit represents an indirect economic interest in one
Advisors Unit. Holdings will make offers under this prospectus to exchange one
Holdings Unit for each Advisors Unit tendered.
Holdings anticipates making the exchange offers during the semiannual
periods, each comprising twenty business days, during which the PIMCO Advisors
Partnership Agreement (as hereafter defined) generally permits Advisors Units to
be transferred. At the time of each exchange offer, Holdings will by supplement
to this prospectus provide detailed information regarding the terms of the
offer, including the dates of commencement and expiration of the offer, the
number of Advisors Units being tendered for, the procedures for tendering
Advisors Units, any conditions to the offer, any ability of Holdings to modify
or extend the offer, the identity of any exchange agent for the offer and the
estimated fees and expenses of the offer.
Holdings intends to offer one Holdings Unit for each Advisors Unit
properly tendered in an exchange offer up to a maximum of 10,000,000 Holdings
Units. If in any exchange offer, Advisors Units have been tendered and not
properly withdrawn prior to the expiration date of that exchange offer in an
amount such that the total number Holdings Units to be issued in that exchange
offer, together with any prior exchange offers hereunder, exceeds the number of
Holdings Units offered hereby, subject to the terms and conditions of the
exchange offer, Holdings will accept the tendered Advisors Units on a pro rata
basis.
FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION
WITH THIS EXCHANGE OFFER, SEE "RISK FACTORS," ON PAGE 5.
The Holdings Units are listed and principally traded on the New York Stock
Exchange under the symbol "PA." On April 16, 1999, the last reported sale price
per unit for the Holdings Units on the New York Stock Exchange was $29.9375. The
Holdings Units covered by this prospectus have been approved for listing,
subject to notice of issuance, on the New York Stock Exchange. No underwriter
will be used in connection with the exchange offers.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The exchange offers will not be made to, nor will Holdings accept
surrenders for exchange from, holders of Advisors Units in any jurisdiction in
which the exchange offer or its acceptance would not be in compliance with the
securities or blue sky laws of that jurisdiction. In jurisdictions where
securities, blue sky or other laws require the exchange offers to be made by a
licensed broker or dealer, the exchange offers shall be deemed to be made on
behalf of Holdings by one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
The date of this prospectus is April 21, 1999
<PAGE> 18
AVAILABLE INFORMATION/INCORPORATION BY REFERENCE
Holdings files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). You
may read and copy any reports, statements or other information Holdings files at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. SEC filings for Holdings are also available to
the public from the SEC's Website at "http://www.sec.gov."
The SEC allows Holdings to "incorporate by reference" the information it
files with them, which means that Holdings can disclose important information to
you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and information that
Holdings files later with the SEC will automatically update and supersede this
information.
Holdings incorporates by reference the documents listed below and any
future filings it will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"): Holdings'
Annual Report on Form 10-K for the year December 31, 1998; the initial
description of the Holdings Units contained in Holdings' Registration Statement
on Form 8-A filed with the SEC on June 24, 1987, including any amendment or
report filed for the purpose of updating such description; and Holdings'
Registration Statement on Form S-1 (No. 333-39585).
You may request a copy of these filings, at no cost, by writing or
telephoning Holdings at the following address:
PIMCO Advisors Holdings L.P.
800 Newport Center Drive
Newport Beach, California 92660
Attention: Secretary
Telephone number: (949) 717-7022
This prospectus is part of a registration statement Holdings filed with
the SEC. This prospectus, which forms a part of the registration statement, does
not contain all of the information contained in the registration statement.
Certain information is omitted and you should refer to the registration
statement and its exhibits.
You should rely only on the information or representations provided in
this prospectus. Holdings has authorized no one to provide you with different
information.
Holdings is not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the front of the
document.
FORWARD-LOOKING STATEMENTS
Certain information in this prospectus constitutes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual results,
performance or achievements of results to differ materially from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Such risks, uncertainties and other important
factors include, among others: the performance of financial markets, the
investment performance of PIMCO Advisors' sponsored investment products and
separately managed accounts, general economic conditions and future government
regulations, including changes in tax laws. Holdings cautions you to carefully
consider such factors.
<PAGE> 19
THE PARTNERSHIPS
Holdings is a Delaware limited partnership which as its sole business acts
as a general partner of PIMCO Advisors and owns in excess of 48 million Advisors
Units, an approximate 44% equity interest in PIMCO Advisors. Holdings owns one
Advisors Unit for each Holdings Unit outstanding, as well as a number of general
partner Advisors Units. Accordingly, each Holdings Unit represents an indirect
economic interest in one Advisors Unit.
PIMCO Advisors is one of the largest investment management companies in
the United States, with approximately $244.2 billion under management at
December 31, 1998. PIMCO Advisors' business provides high quality fixed income
and equity investment management to institutional and retail clients, offering
the investment management expertise, performance record and reputations of its
institutional investment managers, which include the fixed income oriented
Pacific Investment Management Company ("Pacific Investment Management") and the
equity oriented Oppenheimer Capital.
PIMCO Advisors' business focuses on:
Institutional Fixed Income. PIMCO Advisors provides fixed income
investment management to large and medium-sized foreign and domestic corporate
and public clients including 81 of the 200 largest U.S. pension funds. Fixed
income management is led by Pacific Investment Management, which offers
impressive long-term performance records across a diverse range of product
offerings such as total return, international and other duration and sector
specific strategies.
Institutional Equity. PIMCO Advisors provides equity investment management
to institutional clients offering the investment management expertise of seven
equity management groups, including the highly regarded Oppenheimer Capital.
PIMCO Advisors offers investors an enhanced index based strategy and a variety
of management styles, including value, growth, modified growth, quantitative and
international.
Institutional clients invest through separate accounts and pooled vehicles
such as the institutional share classes of the PIMCO Funds, PIMCO Advisors'
family of 51 proprietary mutual funds. PIMCO Advisors offers its investment
management services to institutional clients through client service
representatives at its investment managers.
Retail Distribution. PIMCO Advisors offers the investment expertise of its
institutional investment managers to retail investors through the retail share
classes of the PIMCO Funds. They are distributed primarily through
broker-dealers including PIMCO Funds Distributors LLC, a wholly-owned
broker-dealer which distributes and markets shares of the retail mutual funds of
PIMCO Advisors. In addition, PIMCO Advisors offers retail investors wrap fee
accounts, variable annuity products, 401(k) programs and various investment
products through sponsored trust companies. PIMCO Advisors' various investment
management groups, including Pacific Investment Management and Oppenheimer
Capital, also provide investment management for a number of third-party
sponsored retail products.
PIMCO Advisors' strategy is to increase the amount and diversification of
its assets under management through:
- growth in the institutional market by providing high levels of
client service and entering new markets,
- growth in the retail market by building brand awareness and direct
marketing of the PIMCO Funds through its broker-dealer network and
the penetration of additional distribution channels, and
- new product offerings to institutions and retail investors.
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<PAGE> 20
The revenues of PIMCO Advisors consist principally of management fees
based on the value of assets under management and, in some cases, the
performance of the advisor. The following table sets forth the growth and
composition of PIMCO Advisors' assets under management over the last three years
(as adjusted to include the assets under management of Oppenheimer Capital):
<TABLE>
<CAPTION>
ASSETS UNDER MANAGEMENT
(IN BILLIONS)
----------------------------------------------------
AS OF DECEMBER 31 COMPOUND
----------------------------------------------------
1998 1997 1996 1995 ANNUAL GROWTH RATE
------- ------- ------- ------- -------------------
<S> <C> <C> <C> <C> <C>
SOURCE
Institutional Separate Accounts
Fixed Income $ 106.6 $ 83.0 $ 63.4 $ 55.4 24.38 %
Equity 50.8 51.1 44.1 38.0 10.16 %
Retail Products and Mutual
Funds 86.8 65.4 50.7 39.0 30.56 %
------- ------- ------- -------
TOTAL $ 244.2 $ 199.5 $ 158.2 $ 132.4 22.64 %
======= ======= ======= =======
ASSET MIX
Fixed Income $ 148.9 $ 112.3 $ 86.3 $ 74.7 25.85 %
Equity 92.0 84.4 69.0 54.9 18.78 %
Money Market 3.3 2.8 2.9 2.8 5.63 %
------- ------- ------- -------
TOTAL $ 244.2 $ 199.5 $ 158.2 $ 132.4 22.64 %
======= ======= ======= =======
</TABLE>
The principal offices of Holdings and PIMCO Advisors are located at 800
Newport Center Drive, Newport Beach, California. The partnerships' telephone
number is (949) 717-7022.
THE EXCHANGE OFFERS
Holdings intends to make semiannual exchange offers in order to provide
you, as a holder of Advisors Units, with the opportunity to exchange your
Advisors Units for Holdings Units, although no assurance can be made that such
exchange offers will actually occur. Advisors Units are subject to restrictions
on transfer, and therefore are an illiquid investment. As described below,
Advisors Units generally may only be transferred during specified semiannual
periods or to a small group of persons qualified to hold Advisors Units.
Holdings Units are traded on the New York Stock Exchange and are therefore
expected to provide a more liquid investment than the Advisors Units.
Holdings is a Delaware limited partnership which owns one Advisors Unit
for each Holdings Unit outstanding, as well as a number of Advisors Units
allocable to the general partner interest of Holdings. Each Holdings Unit
represents an indirect economic interest in one Advisors Unit. Exchange offers
under this prospectus will offer to exchange one Holdings Unit for each Advisors
Unit tendered.
The PIMCO Advisors Amended and Restated Agreement of Limited Partnership
(the "PIMCO Advisors Partnership Agreement") provides for two "Semiannual
Exchange Periods" each year during which, subject to certain conditions,
Holdings may make registered exchange offers for Advisors Units, pursuant to
which the holders of Advisors Units may exchange their units for Holdings Units.
The first Semiannual Exchange Period of a year, if any, begins following the
issuance of the year end financial statements but no earlier than March 15 and
ends no later than July 31 of such year, and the second Semiannual Exchange
Period, if any, begins following the issuance of the financial statements for
the first six months of such year but no earlier than August 15 and ends no
later than December 31 of such year. A Semiannual Exchange Period lasts twenty
business days or a greater number of days if required by the Exchange Act. The
PIMCO Advisors Partnership Agreement provides that, except for certain transfers
of Advisors Units that are specified as being exempt, no Advisors Units may be
transferred except during two "Semiannual Transfer Periods" each year. During
the Semiannual Transfer Periods, subject to certain notice provisions, Advisors
Units may be transferred to other persons qualified under the PIMCO Advisors
Partnership Agreement to hold Advisors Units. A Semiannual Transfer Period is
the last five of the ten business days immediately following the end of the
Semiannual Exchange Period.
At the time of each exchange offer, Holdings will by supplement to this
prospectus provide detailed information regarding the terms of the offer,
including the dates of commencement and expiration of the offer, the number of
Advisors Units being tendered for, the procedures for tendering Advisors Units
and withdrawing those tenders if so desired, any conditions to the offer, any
ability of Holdings to modify or extend the offer, the identity of any exchange
agent for the offer and the estimated fees and expenses of the offer. There can
be no assurances, however, that any such offers will be made. In addition to the
exchange offers, Holdings may
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<PAGE> 21
acquire additional Advisors Units from time to time, in issuances from PIMCO
Advisors or from holders of Advisors Units, in privately negotiated transactions
or otherwise. There can be no assurances that these purchases would be on the
same terms as the exchange offers.
Holdings intends to offer one Holdings Unit for each Advisors Unit
properly tendered in an exchange offer up to a maximum of 10,000,000 Holdings
Units. If in any exchange offer hereunder, Advisors Units have been tendered and
not properly withdrawn prior to the expiration date of that exchange offer in an
amount such that the total number of Holdings Units to be issued in that
exchange offer, together with any prior exchange offers hereunder, exceeds the
number of Holdings Units offered hereby, subject to the terms and conditions of
the exchange offer, Holdings will accept the tendered Advisors Units on a pro
rata basis.
You, as a holder of Advisors Units, will not have any appraisal or
dissenters' rights under the PIMCO Advisors Partnership Agreement in connection
with the exchange offers. Holdings intends to conduct the exchange offers
consistent with the applicable provisions of the PIMCO Advisors Partnership
Agreement and the applicable requirements of the Securities Act, the Exchange
Act and the rules and regulations of the SEC thereunder.
The PIMCO Advisors Partnership Agreement provides that if (a) the total
number of Advisors Units either tendered pursuant to a registered exchange offer
or proposed to be transferred in semiannual transfers during the Semiannual
Transfer Period, plus (b) the total number of Advisors Units transferred in
semiannual transfers during the preceding Semiannual Transfer Period, if any, in
the same year, exceeds 10% of the total number of outstanding Advisors Units,
the number of Advisors Units tendered pursuant to the registered exchange offer
and proposed to be transferred in semiannual transfers during that Semiannual
Transfer Period shall be reduced pro rata such that the 10% limit is not
exceeded. For purposes of this 10% test, Advisors Units transferred in exempt
transfers are not counted, and such transfers are permitted under the PIMCO
Advisors Partnership Agreement even if the 10% limit requires that other
proposed transfers be cut back.
Because Holdings may only accept Advisors Units that are permitted to be
transferred under the PIMCO Advisors Partnership Agreement, these transfer
restrictions may have the effect of limiting the number of Advisors Units that
Holdings may accept in any exchange offer. See "Comparison of Securities --
Transfers of Limited Partnership Interests; Admission of Limited Partners" for a
more detailed description of these limitations. For accounting purposes,
Holdings will recognize no gain or loss as a result of the exchange offers.
4
<PAGE> 22
RISK FACTORS
EFFECTS OF HOLDINGS - LEVEL TAX ON DISTRIBUTIONS
Effective January 1, 1998, Holdings became subject to a 3.5% federal tax
on its gross revenue derived from active businesses. The tax is imposed on
Holdings because its units are publicly traded. Holdings may also become subject
to additional state taxes. PIMCO Advisors' units are not publicly traded and it
is not subject to these taxes. These taxes reduce the amount of cash available
for distribution to the holders of Holdings Units compared to that available to
be paid out by PIMCO Advisors. Accordingly, if you exchange your Advisors Units
for Holdings Units, your per-unit distribution is expected to decrease. Because
each Holdings Unit represents an indirect economic interest in one Advisors Unit
and PIMCO Advisors pays all of Holdings' operating expenses other than taxes,
the difference in distributions between PIMCO Advisors and Holdings is generally
equal to the per-unit amount of the tax, and any accruals or reserves.
CERTAIN DIFFERENCES BETWEEN ADVISORS UNITS AND HOLDINGS UNITS
If you tender your Advisors Units pursuant to an exchange offer, you will
receive Holdings Units. Although a Holdings Unit and an Advisors Unit represent
the same economic interest in PIMCO Advisors, there are differences between the
securities. In particular, Holdings is subject to a partnership-level tax on its
gross revenue derived from active businesses. Prior to tendering your Advisors
Units pursuant to an exchange offer, you should carefully review the section of
this prospectus entitled "Comparison of Securities" which discusses the
differences between an Advisors Unit and a Holdings Unit.
Currently, each Holdings Unit represents an indirect investment in a
single Advisors Unit. Holdings and PIMCO Advisors are party to an operating
agreement which provides that Holdings will maintain one Advisors Unit held by
Holdings or one of its affiliates for each Holdings Unit outstanding. PIMCO
Partners, G.P. ("PGP"), as the sole general partner of Holdings and the
controlling general partner of PIMCO Advisors, has the ability to modify the
terms of this operating agreement. There can be no assurance that Holdings will
be able to maintain the ratio of one Advisors Unit held by Holdings or an
affiliate to one Holdings Unit outstanding, or that the operating agreement will
remain in effect. The failure of Holdings to maintain this one to one ratio
would dilute your indirect investment in PIMCO Advisors represented by a
Holdings Unit.
The tax effects of holding a Holdings Unit may vary from that of holding
an Advisors Unit. Prior to tendering your Advisors Units pursuant to an exchange
offer, you are urged to consult your own tax advisor and to carefully review the
section of this prospectus entitled "Certain United States Federal Tax
Considerations."
FAILURE TO EXCHANGE ADVISORS UNITS
Holdings will issue Holdings Units in exchange for your Advisors Units
only after timely receipt by Holdings or an exchange agent, if an exchange agent
is used, of your Advisors Units, a properly completed and duly executed letter
of transmittal in the form specified in a supplement to this prospectus and all
other required documentation. Therefore, if you desire to tender your Advisors
Units for Holdings Units, you should allow sufficient time to ensure timely
delivery. Neither Holdings nor any exchange agent is under any duty to give you
any notification of defects or irregularities with respect to tenders of your
Advisors Units for exchange.
Advisors Units that are not tendered or are tendered but not accepted
will, following consummation of this exchange offer, continue to be subject to
the existing transfer restrictions, including the restrictions contained in the
PIMCO Advisors Partnership Agreement. As described in the section of this
prospectus entitled "Comparison of Securities -- Transfers of Limited
Partnership Interests; Admission of Limited Partners," Advisors Units generally
may only be transferred during the specified Semiannual Transfer Periods to a
small group of persons qualified to hold Advisors Units. While Holdings
currently intends to make offers of exchange to the holders of Advisors Units
twice each year, during Semiannual Exchange Periods in accordance with the PIMCO
Advisors Partnership Agreement, there can be no assurances that any future
exchange offers will be made. Accordingly, if you fail to participate in the
exchange offer, you may have limited opportunities for liquidity in the future.
5
<PAGE> 23
USE OF PROCEEDS
Holdings will not receive any proceeds from the exchange offers. The
Advisors Units received by Holdings in the exchange offers will, under the terms
of the PIMCO Advisors Partnership Agreement, convert into an equal number of
units of general partner interest in PIMCO Advisors, and will ratably increase
Holdings' percentage interest in PIMCO Advisors.
SELECTED HISTORICAL FINANCIAL DATA
Holdings is a Delaware limited partnership which as its sole business acts
as a general partner of PIMCO Advisors and owns an approximate 44% equity
interest in PIMCO Advisors. The historical financial statements of Holdings and
PIMCO Advisors are included in Holdings' Annual Report on Form 10-K for the year
ended December 31, 1998, which is incorporated herein by reference.
PRO FORMA FINANCIAL DATA
As Holdings' sole business it acts as a general partner of PIMCO Advisors
and owns an approximate 44% equity interest in PIMCO Advisors. The historical
financial statements of Holdings and PIMCO Advisors are included in Holdings'
Annual Report on Form 10-K for the year ended December 31, 1998, which is
incorporated herein by reference. Per unit financial performance of Holdings is
substantially identical to that of PIMCO Advisors, with the exception that
Holdings is subject to the tax on its gross income described in "Certain United
States Federal Income Tax Considerations -- Tax Classification of Holdings." As
Advisors Units are exchanged for Holdings Units, Holdings' general partner
interest in PIMCO Advisors grows proportionately. If all 10,000,000 Holdings
Units covered by this Prospectus were exchanged for Advisors Units, Holdings'
interest in PIMCO Advisors would increase by approximately 7.5%, resulting in
equal percentage increases in Holdings' share of revenues, expenses and net
income. Holdings' per unit financial performance would, however, remain
unchanged.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of the business conducted by each of
Holdings and PIMCO Advisors is included in Holdings' Annual Report on Form 10-K
for the year ended December 31, 1998, which is incorporated herein by reference.
6
<PAGE> 24
COMPARISON OF SECURITIES
The following discussion is a summary of the material differences between
the PIMCO Advisors Partnership Agreement and the Holdings Amended and Restated
Agreement of Limited Partnership of Holdings (the "Holdings Partnership
Agreement"). These agreements set forth the rights of the holders of the
Advisors Units and the Holdings Units. The following discussion is qualified in
its entirety by reference to the complete text of the PIMCO Advisors Partnership
Agreement and the Holdings Partnership Agreement.
ORGANIZATION AND TERM
Both PIMCO Advisors and Holdings are Delaware limited partnerships
organized under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act"). The PIMCO Advisors Partnership Agreement provides for PIMCO
Advisors to continue in existence until December 31, 2086, unless earlier
dissolved in accordance with the PIMCO Advisors Partnership Agreement. The
Holdings Partnership Agreement provides for Holdings to continue in existence
until December 31, 2061, unless earlier dissolved in accordance with the
Holdings Partnership Agreement or the Delaware Act.
BUSINESS PURPOSES
The PIMCO Advisors Partnership Agreement provides that PIMCO Advisors'
purpose is (i) to carry on an investment management and advisory business and
(ii) to carry on any other business which limited partnerships may carry on
under the Delaware Act. The Holdings Partnership Agreement provides that
Holdings' purpose is (i) to acquire and hold Advisors Units, act as a general
partner of PIMCO Advisors, and carry on through PIMCO Advisors an investment
management and investment advisory business and (ii) to carry on any other
business which limited partnerships may carry on under the Delaware Act.
CAPITAL ACCOUNTS
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide for the maintenance of capital accounts for all partners.
GENERAL PARTNER INTERESTS
PIMCO Advisors
The PIMCO Advisors Partnership Agreement provides for limited partner
units and general partner units. Only general partners may hold general partner
units. Class A general partner units and Class A limited partner units represent
equivalent economic rights. Upon transfer to a limited partner, general partner
units convert to limited partner units of the same class.
Holdings
The Holdings Partnership Agreement provides for two classes of units,
limited partner units and general partner units. The general partner currently
holds 5,099 general partner units. Because general partner units and limited
partner units carry equivalent economic rights, a general partner may convert
its general partner units into limited partner units and vice-versa, so long as
the outstanding general partner units continue to represent at least a .01%
interest in the partnership.
The equivalent economic rights of Holdings' general partnership units and
Holdings' limited partner units allow distributions to be paid out to all
partners pro rata in accordance with their units, rather than allocating a fixed
percentage to the general partner. Also, it facilitates maintenance of the
one-for-one ratio between Holdings Units and the underlying Advisors Units owned
by Holdings, since at all times the total number of limited partner units and
general partner units outstanding will equal the number of Advisors Units owned
by Holdings.
ISSUANCES OF INTERESTS IN THE PARTNERSHIP
PIMCO Advisors
The PIMCO Advisors Partnership Agreement provides that the general partner
may issue additional classes or series of limited partner interests of PIMCO
Advisors in amounts, for consideration and on terms and conditions, including
the issuance of units or
7
<PAGE> 25
other equity securities with preferences, rights and powers senior to existing
classes of securities or the Advisors Units, determined by the general partners,
without the consent or approval of the limited partners.
Holdings
As described above, Holdings Units represent a flow-through investment in
PIMCO Advisors, each representing an indirect interest in a single Advisors
Unit. The Holdings Partnership Agreement provides that the general partner may
issue additional securities of Holdings in amounts, for consideration and on
terms and conditions determined by the general partner, without the consent or
approval of the limited partners, so long as the consideration, if any, received
for any Holdings Units issued is contributed to PIMCO Advisors in exchange for a
number of Advisors Units equal to the number of Holdings Units issued. Any
proposed issuance of Holdings Units in which an equal number of Advisors Units
is not to be received may be made only upon the receipt of an opinion of a
nationally recognized independent investment banking firm that the issuance is
fair from a financial point of view to the limited partners who are not
affiliates of the general partner (a "fairness opinion").
The Holdings Partnership Agreement has the effect of permitting issuances
of Holdings Units in which the one-for-one relationship between Holdings Units
and Advisors Units is maintained. So long as the ratio between Holdings Units
and Advisors Units remains the same before and after the issuance and
unitholders experience no economic dilution as a result of the issuance.
However, under the PIMCO Advisors Partnership Agreement, the general partners of
PIMCO Advisors are permitted in their discretion to cause PIMCO Advisors to
admit new limited partners and issue additional units of partner interest,
without the consent or approval of any third party. The PIMCO Advisors
Partnership Agreement permits, and Holdings intends to effect, semi-annual
offers to be made to holders of Advisors Units to exchange such units for
Holdings Units. Accordingly, the Holdings Partnership Agreement will have the
effect of permitting the general partners of PIMCO Advisors to issue Advisors
Units to persons who may then, subject to the limitations on transfer set forth
in the PIMCO Advisors Partnership Agreement, exchange those Advisors Units for
an equal number of Holdings Units, without the requirement of a fairness opinion
or unitholder consent, other than as may be required by the New York Stock
Exchange or other regulatory agencies.
In 1997, in connection with the acquisition of Oppenheimer Capital by
PIMCO Advisors and in anticipation of the year-end combination of ownership of
PIMCO Advisors and Oppenheimer Capital, L.P., Holdings received a fairness
opinion from an independent investment bank as to the fairness from a financial
point of view to the limited partners of Holdings who were not affiliates of the
general partner of certain types of issuances of Holdings Units, including
issuances in one for one exchanges for Advisors Units and issuances pursuant to
incentive compensation plans upon the receipt of an equal number of Advisors
Units. Accordingly, Holdings is currently able to issue Holdings Units which
fall within the parameters of the opinion.
The Holdings Partnership Agreement allows the creation of new classes or
series of units, but requires, in addition to requirements described above, the
consent of a majority of a class or series of limited partner units not held by
affiliates of the general partner prior to the issuance of any securities senior
to such class or series. The Holdings Partnership Agreement provides that such
consent is required not only for units senior with respect to distributions, but
also with respect to rights to share in the profits or losses of the partnership
or upon liquidation or dissolution of the partnership.
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS; ADMISSION OF LIMITED PARTNERS
PIMCO Advisors
The PIMCO Advisors Partnership Agreement imposes transfer restrictions on
Advisors Units. The restrictions are complex, but are summarized below.
Exempt Transfers. A holder of Advisors Units may transfer them at an time
in any Exempt Transfer, provided that the proposed transferee, if not already a
partner of PIMCO Advisors or pursuant to a pledge of Advisors Units by PGP in a
Permitted Lien Transfer (as defined in the PIMCO Advisors Partnership
Agreement), executes and delivers to PIMCO Advisors a written application for
admittance as a limited partner of PIMCO Advisors. The PIMCO Advisors
Partnership Agreement defines an "Exempt Transfer" as the transfer of Advisors
Units (i) involving the issuance of limited partner interests in exchange for
cash, property or services as described in certain specified Treasury
Regulations, (ii) by a limited partner at his death to another partner of PIMCO
Advisors as described in certain specified Treasury Regulations, (iii) pursuant
to certain kinds of Block Transfers (as defined below), or (iv) in connection
with liens in respect of certain indebtedness of PGP. For these purposes, the
PIMCO Advisors Partnership Agreement generally defines a "Block Transfer" as the
transfer by a limited partner and any related persons of Advisors Units in one
or more
8
<PAGE> 26
transactions during any 30 day period which represents in the aggregate more
than 2% of the outstanding Advisors Units. The definition of a Block Transfer is
dictated by, and subject to, certain applicable Treasury Regulations.
In addition, the general partners of PIMCO Advisors may adopt rules
consistent with applicable Treasury Regulations with regard to Block Transfers
including the establishment of the minimum number of Advisors Units qualifying
as a Block Transfer. Any holder of Advisors Units who proposes to effect a Block
Transfer must provide notice to PIMCO Advisors including the names of the
proposed transferees and the number of Advisors Units proposed to be
transferred.
Semiannual Transfers. The PIMCO Advisors Partnership Agreement provides
that there shall be, if practicable, two periods each year (each, a "Semiannual
Transfer Period") during which Advisors Units may be transferred or exchanged
(either, a "Semiannual Transfer"). A Semiannual Transfer Period is defined as
beginning on the first day of a "Semiannual Exchange Period" and ending ten
business days following the end of the Semiannual Exchange Period. The first
Semiannual Exchange Period of a year begins following the issuance of the year
end financial statements but no earlier than March 15 and ends no later than
July 31 of such year, and the second Semiannual Exchange Period begins following
the issuance of the financial statements for the first six months of such year
but no earlier than August 15 and ends no later than December 31 of such year. A
Semiannual Exchange Period lasts twenty business days or a greater number of
days if required by the Exchange Act.
In addition, during the Semiannual Exchange Period, the holders of
Advisors Units may give notice of their intent to transfer units to "Qualified
Persons." The PIMCO Advisors Partnership Agreement generally defines a
"Qualified Person" as PIMCO Advisors, current partners of PIMCO Advisors,
members of the PIMCO Advisors Management Board, an executive officer of PIMCO
Advisors or managing director of one of PIMCO Advisors' investment management
subsidiaries or divisions or certain entities controlled by such persons and any
person designated as a Qualified Person by the general partners of PIMCO
Advisors. Subject to the limitations described below, these proposed transfers
may be effected during the last five of the ten business days following the end
of the Semiannual Exchange Period.
The PIMCO Advisors Partnership Agreement imposes limitations on the number
of Advisors Units which can be transferred pursuant to Semiannual Transfers in
any one year. The PIMCO Advisors Partnership Agreement provides that if (a) the
total number of Advisors Units either tendered pursuant to a registered exchange
offer or proposed to be transferred pursuant to a Semiannual Transfer during a
Semiannual Transfer Period, plus (b) the total number of Advisors Units
transferred during the preceding Semiannual Transfer Period, if any, in the same
year, exceeds 10% of the total number of outstanding Advisors Units, then the
total number of Advisors Units either tendered pursuant to a registered exchange
offer or proposed to be transferred pursuant to a Semiannual Transfer shall be
reduced pro rata such that the 10% limit is not exceeded. If the 10% limit is to
be exceeded during a Semiannual Transfer Period, PIMCO Advisors shall give
prompt notice of such pro rata reduction to the general partners and all limited
partners who tendered in the Semiannual Transfer. Exempt Transfers are not
counted against the 10% limitation.
The PIMCO Advisors Partnership Agreement provides that no holder of
Advisors Units shall have a cause of action against, or the right to receive
compensation from, Holdings for a failure to make a registered exchange offer
during a Semiannual Exchange Period or from a general partner for a failure to
provide two such Semiannual Exchange Periods in any one year, provided that the
Public General Partner or general partners so acted in good faith.
Transfer Pursuant to a Restructuring. The PIMCO Advisors Partnership
Agreement provides broad authority of the general partner in the event that
there is a substantial risk that the partnership will be treated as an
association taxable as a corporation for federal income tax purposes. In such an
event, the general partner is authorized to effect one or more restructurings
which may involve, among other things, the transfer of all or part of the
business of the partnership to one or more newly created business entities in
exchange for interests in those entities which may be subject to substantial
restrictions on transfer, the mandatory exchange of some or all Advisors Units
or Holdings Units, as applicable, for interests in one or more newly established
business entities holding the partnership's assets, or the imposition of
substantial restrictions on the transferability of Advisors Units coupled with
severe penalties for violations of such restrictions.
Admission of Limited Partners. Persons desiring to be limited partners of
PIMCO Advisors must execute and deliver an admission application to the
partnership. The person is admitted if it is eligible to be a limited partner
and its admission would not violate applicable securities laws or other rules
and regulations, cause an "Assignment Event" or "Adverse Partnership Event" (as
defined in the PIMCO Advisors Partnership Agreement) or affect PIMCO Advisors'
existence or qualification as a limited partnership under the Delaware Act.
9
<PAGE> 27
Holdings
The Holdings Partnership Agreement provides that a limited partner
generally may transfer its units of limited partner interest; provided, however,
that no such transfer may occur if it would violate federal or state securities
laws or rules and regulations of the SEC, any state securities commission or any
other governmental authorities with jurisdiction over such transfers, or affect
Holdings' existence or qualification as a limited partnership under the Delaware
Act. Also, the Holdings Partnership Agreement provides that any transfer which
would result in an Adverse Partnership Tax Event or an Assignment Event (as
those terms are defined in the Holdings Partnership Agreement) is prohibited.
Generally, the transferor ceases to be a limited partner upon the transferee's
admission as a substitute limited partner, as provided below. Until admission, a
transferee is an assignee of the partnership interest.
The Holdings Partnership Agreement provides that both transferees of
Holdings Units and persons making a contribution to the partnership in exchange
for newly issued Holdings Units become limited partners by executing and
delivering a transfer application, which application is subject to the approval
of the general partner. The Holdings Partnership Agreement provides further that
the application is deemed to be approved if not rejected by the third business
day following the transfer. In addition, the Holdings Partnership Agreement has
special provisions governing admission of underwriters and their transferees as
limited partners. Underwriters are those persons who acquire units from Holdings
or any general or limited partner pursuant to an underwritten public offering.
Upon executing and delivering an admission application, such underwriter shall
be admitted as a limited partner. Each initial transferee of an underwriter
shall be admitted as a limited partner upon payments for the units of limited
partner interest.
The Holdings Partnership Agreement also provides that no person shall be
admitted as a limited partner if such admission would (i) violate federal or
state securities laws or rules and regulations of the SEC, any state securities
commission or any other governmental authorities with jurisdiction over such
transfers, (ii) result in an Adverse Partnership Tax Event or an Assignment
Event (as those terms are defined in the Holdings Partnership Agreement), or
(iii) affect Holdings' existence or qualification as a limited partnership under
the Delaware Act.
The Holdings Partnership Agreement requires that upon admission, each
limited partner agree to be bound by the terms of the Holdings Partnership
Agreement.
DISTRIBUTIONS AND ALLOCATIONS
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide for the payment of quarterly distributions to unitholders of
record as of the close of business on the last day of such quarter, payable
within 30 days of the end of such quarter. The PIMCO Advisors Partnership
Agreement provides for the distribution of "Distributable Cash," defined as an
amount equal to the Operating Profit Available for Distribution (defined as the
sum of net income plus non-cash charges from the amortization of intangible
assets, non-cash compensation expenses arising from option and restricted unit
plans, and losses of any subsidiary which is not a flow-through entity for tax
purposes) for such fiscal quarter less the amount, if any, required for
expenses, for capital expenditures, for future payments on any indebtedness, as
reserves, or otherwise in the business of PIMCO Advisors, as determined by its
general partners. The Holdings Partnership Agreement provides for the
distribution of "Distributable Cash," defined as an amount equal to the
distributions declared by PIMCO Advisors for such quarter on the Advisors Units
held by Holdings, less the amount, if any, required for taxes, for reimbursement
of expenses, as reserves, or otherwise in the business of Holdings, as
determined by the general partner. In addition, the Holdings Partnership
Agreement provides that no distribution may be made to any unitholder if such
distribution would violate Section 17-607 of the Delaware Act or any other
applicable law. The PIMCO Advisors Partnership Agreement and the Holdings
Partnership Agreement also establish procedures for making allocations of net
income and net loss, as well as special capital account and tax allocations,
among the partners.
MANAGEMENT
PIMCO Advisors
The PIMCO Advisors Partnership Agreement provides that the business and
affairs of PIMCO Advisors are exclusively managed by its general partners. So
long as there is more than one general partner, each general partner has equal
right, power and authority in the management and control of the business and
affairs of PIMCO Advisors. Certain extraordinary actions, such as mergers, sales
of substantially all of the partnership's assets, the incurrence of certain
indebtedness or initiation of an insolvency, require the written
10
<PAGE> 28
consent of all the general partners. All other matters are decided by the
general partners holding a majority of the outstanding general partner units.
The PIMCO Advisors Partnership Agreement permits the general partners to
delegate their power and authority. The general partners may, subject to certain
limitations, constitute one or more boards or committees, delegate any or all of
its rights and powers to manage and control the business and affairs of PIMCO
Advisors to one or more such boards or committees, and revise and revoke any
such constitution or delegation. However, the general partners may not delegate
rights and powers with respect to any of the following actions: (i) admission of
any successor or additional general partner, (ii) any amendment to the PIMCO
Advisors Partnership Agreement, (iii) any action which would require the
approval of the limited partners, or (iv) any action which, by reason of any
provision of the PIMCO Advisors Partnership Agreement, requires the written
consent of the general partners.
The general partners have delegated the day to day management of PIMCO
Advisors to a 16 member management board.
Holdings
The Holdings Partnership Agreement similarly provides that the general
partner has exclusive right and full power and authority to manage and control
the business and affairs of Holdings and to take any action deemed necessary or
desirable by it in connection with the business of Holdings. The Holdings
Partnership Agreement further provides that, unless otherwise provided by the
Holdings Partnership Agreement, the general partner may take any action in its
management of Holdings, including amending certain provisions of the Holdings
Partnership Agreement, without the approval of the limited partners.
The Holdings Partnership Agreement contemplates the admission of more than
one general partner, and provides for management by two or more general
partners. If there is more than one general partner, each general partner has
equal right, power and authority in the management and control of the business
and affairs of Holdings. Certain extraordinary actions, such as mergers, sales
of substantially all of the partnership's assets, the incurrence of certain
indebtedness or initiation of an insolvency, require the written consent of all
the general partners. All other matters are decided by the general partners
holding a majority of the outstanding general partner units.
The Holdings Partnership Agreement also permits the general partners to
delegate their power and authority. The general partners may, subject to certain
limitations, constitute one or more boards or committees, delegate any or all of
its rights and powers to manage and control the business and affairs of Holdings
to one or more such boards or committees, and revise and revoke any such
constitution or delegation. However, the Holdings Partnership Agreement limits
the general partners' ability to delegate. The general partners may not delegate
rights and powers with respect to any of the following actions: (i) admission of
any successor or additional general partner, (ii) any amendment to the Holdings
Partnership Agreement, (iii) any action which would require the approval of the
limited partners, or (iv) any action which, by reason of any provision of the
Holdings Partnership Agreement, requires the written consent of the general
partners.
The general partner has delegated the day to day management of Holdings to
a three member management board comprised of executive officers of PIMCO
Advisors.
TRANSACTIONS INVOLVING GENERAL PARTNERS; CONFLICTS OF INTEREST
Transactions Between PIMCO Advisors and its general partners or their affiliates
The PIMCO Advisors Partnership Agreement expressly permits specific types
of transactions between PIMCO Advisors and the general partners or their
affiliates and establishes a standard by which the "fairness" of the transaction
to PIMCO Advisors is judged. The PIMCO Advisors Partnership Agreement limits the
transactions between PIMCO Advisors and the general partners or their affiliates
to include, each on terms and conditions determined by the general partners: (i)
a loan to PIMCO Advisors by a general partner or its affiliates, (ii) a loan by
PIMCO Advisors to a general partner or its affiliates, (iii) services rendered
by a general partner or its affiliates to PIMCO Advisors, or (iv) the general
partner or its affiliates may sell, transfer or convey assets or property to, or
purchase PIMCO Advisors' assets from, PIMCO Advisors, or use or lease PIMCO
Advisors' assets.
The PIMCO Advisors Partnership Agreement also establishes the standard by
which to judge the "fairness" of the related transaction by instituting a
pre-approval process. The PIMCO Advisors Partnership Agreement requires that
before entering into any permitted transaction or agreement between PIMCO
Advisors and a general partner or its affiliates, such transaction shall be
11
<PAGE> 29
determined to be fair to PIMCO Advisors by (i) a committee of members of the
management board to which the general partners have delegated management
authority, appointed by that management board, who are independent with respect
to such transaction, or (ii) the general partners.
Transactions Between Holdings and its general partner or its affiliates
The Holdings Partnership Agreement expressly permits transactions between
Holdings and the general partner or its affiliates but limits such transactions
between Holdings and the general partner or its affiliates to include, each on
terms and conditions determined by the general partner: (i) a loan to Holdings
by the general partner or its affiliates, (ii) a loan by Holdings to the general
partner or its affiliates, (iii) services rendered by the general partner or its
affiliates to Holdings, (iv) the general partner or its affiliates may sell,
transfer or convey assets or property to, or purchase Holdings' assets from,
Holdings, or use or lease Holdings' assets, and (v) Holdings may enter into one
or more agreements with PIMCO Advisors governing their relationship.
The Holdings Partnership Agreement also establishes the standard by which
to judge the "fairness" of a related transaction between Holdings and a general
partner or its affiliates by instituting a pre-approval process. The Holdings
Partnership Agreement requires that before entering into any permitted
transaction or agreement between Holdings and the general partner or its
affiliates, (i) such transaction or agreement shall be determined to be fair to
Holdings by a committee of members of a management board to which the general
partners have delegated management authority, appointed by that board, who are
independent with respect to such transaction, or the general partner, or (ii)
Holdings shall receive a fairness opinion.
Conflicts of Interest
The PIMCO Advisors Partnership Agreement provides that whenever a conflict
of interest exists or arises between a general partner or its affiliates, on the
one hand, and PIMCO Advisors or any other partner, on the other hand, other than
the transactions listed above which require pre-approval, such conflict of
interest shall be resolved by (i) a committee of members of the management board
to which the general partners have delegated management authority, appointed by
that management board, who are independent with respect to such conflict of
interest, or (ii) the general partners. A resolution determined by such a
committee or by the general partners in good faith, shall be conclusive and
binding on the partners and PIMCO Advisors.
The Holdings Partnership Agreement similarly provides that whenever a
conflict of interest exists or arises between the general partner or its
affiliates, on the one hand, and Holdings, on the other hand, other than the
transactions listed above which require pre-approval, shall be resolved by (i) a
committee of members of a management board to which the general partners have
delegated management authority, appointed by that board, who are independent
with respect to such conflict of interest, or (ii) the general partners. A
resolution determined by such a committee or by the general partners in good
faith, shall be conclusive and binding on the partners and Holdings.
VOTING RIGHTS
The management authority over each PIMCO Advisors and Holdings resides in
the respective general partners, and limited partners generally have very
limited ability to influence the affairs of the partnership. Each of the PIMCO
Advisors Partnership Agreement and the Holdings Partnership Agreement provide
the limited partners with certain limited voting rights. Under the PIMCO
Advisors Partnership Agreement and the Holdings Partnership Agreement (and the
Delaware Act when applicable), the limited partners of the respective
partnership have voting rights with respect to: (i) the withdrawal, removal,
transfer and replacement of a general partner other than as a result of a
transfer of the general partner's interest to an affiliate, (ii) certain
amendments to the partnership agreement (described more fully below under "--
Amendments to the Partnership Agreements"), (iii) certain events of dissolution,
and the reconstitution of the partnership after a dissolution (described more
fully below under "-- Dissolution and Liquidation"), (iv) the election,
compensation and approval of a successor liquidating trustee, (v) a change in
the state of organization of PIMCO Advisors and (vi) the conversion or
reorganization of the partnership into another type of legal entity (except in
conjunction with a restructuring as described below under "-- Restructuring
Authority").
The PIMCO Advisors Partnership Agreement provides the limited partners
with voting rights with respect to a merger or consolidation of PIMCO Advisors
with or into one or more Delaware limited partnerships or other business
entities. The Holdings Partnership Agreement also sets forth the limited
partners' voting rights with respect to mergers and other combinations involving
Holdings, providing that any merger or consolidation of Holdings with or into
any other business entity in which Holdings is not the surviving entity requires
approval by a majority of each class of the outstanding Holdings Units. Other
mergers or consolidations of
12
<PAGE> 30
Holdings would require consent only to the extent that they required actions
which otherwise required unitholder consent, such as certain types of
partnership agreement amendments. In addition, the Holdings Partnership
Agreement provides the limited partners with voting rights with respect to the
issuance of units which rank senior to Holdings Units.
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide that except as otherwise provided in the respective
partnership agreement, the general partners may take any action, including the
amendment of the partnership agreement, without the approval of the limited
partners. Accordingly, the PIMCO Advisors Partnership Agreement and the Holdings
Partnership Agreement generally supersede the voting rights provisions of the
Delaware Act.
PARTNERSHIP MEETINGS
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide that meetings of limited partners may be called by general
partner(s) or limited partners holding at least 10% of the respective
outstanding limited partner units. Within 60 days of receiving a request for a
meeting, or such greater period as may be necessary, the general partner(s) will
mail to each unitholder of record, at the address appearing on the books of the
transfer agent, a notice of meeting establishing a meeting date not more than 60
days from the mailing date. Each of the partnership agreements provide that the
record date for voting at the meeting shall be set no less than 10 and no more
than 60 days prior to the meeting date, and for a quorum of a majority of the
partnership units entitled to vote to be present in person or by proxy.
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement state that action at a meeting shall be taken by a majority of the
units present and entitled to vote with respect to a matter, unless the
respective partnership agreement requires a different or higher percentage. In
addition to the ability of the limited partners and the general partners to call
meetings of the limited partners, both the PIMCO Advisors Partnership Agreement
and the Holdings Partnership Agreement allow a liquidating trustee to call a
meeting of the limited partners. The PIMCO Advisors Partnership Agreement and
the Holdings Partnership Agreement also provide that no action shall be taken at
a meeting which is opposed by the general partner(s) or a liquidating trustee
unless the applicable partnership has received certain opinions of counsel.
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide that action may be taken by the partners without a meeting if
written approvals setting forth the action so taken are given by partners
holding not less than the minimum number of units that would be necessary to
take such action at a meeting at which all of the partners were present and
voted.
AMENDMENTS TO THE PARTNERSHIP AGREEMENT
Each of the PIMCO Advisors Partnership Agreement and the Holdings
Partnership Agreement provide that the general partner(s) may amend the
respective partnership agreement without the vote or consent of the limited
partners (i) to change the name or principal place of business of the
partnership, (ii) for the admission, substitution, termination or withdrawal of
partners, (iii) if necessary or advisable to preserve the limited liability of
the limited partners or prevent the partnership from being taxed as a
corporation for federal tax purposes, (iv) for any change which the general
partners determine does not adversely affect the holders of any class or series
of units in any material respect, in response to certain statutes and rulings or
to facilitate trading of the Advisors Units or the Holdings Units, as
applicable, or is necessary to fulfill the purposes of the agreement or to cure
an ambiguity or inconsistency in the agreement, (v) to reflect the designations,
preferences and rights of any newly created class or series of units, (vi) for
changes that that the general partner(s) determine are appropriate in connection
with the creation of any newly created class or series of units or other equity
security, or (vii) for changes that the general partners determine are
appropriate in connection with an action taken pursuant to its restructuring
authority (described more fully below in "--Restructuring Authority").
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide that any other amendment must be proposed by the general
partner(s) and approved by the partners. The PIMCO Advisors Partnership
Agreement and the Holdings Partnership Agreement state that (i) any amendment
which would materially and adversely affect a particular class or series of
units must be approved by holders of a majority of such class or series and (ii)
any amendment that would change the vote required to take an action must be
approved by partners holding at least the percentage of units which would be
changed by the proposed amendment.
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<PAGE> 31
ADMISSION AND WITHDRAWAL OF GENERAL PARTNERS
PIMCO Advisors
The PIMCO Advisors Partnership Agreement requires the consent of a
majority of all of the units for the admission of new general partners unless
the admission is in connection with the transfer of all or a portion of a
general partner's interest to an affiliate of that general partner pursuant to
an Exempt Transfer or a Semiannual Transfer. Such transfer is permitted only if
the general partner obtains certain opinions regarding the proposed transfer and
the PIMCO Advisors Partnership Agreement is amended to reflect the admission of
the new general partner.
The PIMCO Advisors Partnership Agreement provides a procedure for the
withdrawal of a general partner. If a general partner transfers all of its
interest to an affiliate pursuant to an Exempt Transfer or a Semiannual
Transfer, a general partner may withdraw without consent of the partners. In the
event of any other proposed withdrawal, a general partner must give notice of
its intent to withdraw, supported by certain required opinions of counsel, and
the withdrawal must be approved by a majority of partners who are not affiliates
of such general partner. The general partners shall call a meeting to consider
the withdrawal no sooner than 60 days from the date of notice (180 days if there
is only one general partner at the time). The successor elected at the meeting
shall be admitted as a general partner immediately prior to the withdrawal of
the existing general partner or, if no successor is elected but the withdrawal
is approved, the general partner shall be entitled to withdraw, and the
partnership shall be dissolved.
The PIMCO Advisors Partnership Agreement provides that a general partner
may be removed by the vote of 80% of all of the units.
Holdings
Under the Holdings Partnership Agreement, the admission of general
partners generally requires consent of a majority of the unitholders for the
admission of new general partners unless the admission is in connection with the
transfer of all or a portion of a general partner's interest to an affiliate of
that general partner; however, such transfer is permitted only if the general
partner obtains certain opinions regarding the proposed transfer.
The Holdings Partnership Agreement sets forth the procedure for a
withdrawal of a general partner. If a general partner transfers all of its
interest to an affiliate, the general partner may withdraw without consent of
the limited partners. In the event of any other proposed withdrawal, the general
partner must give notice of its intent to withdraw, supported by certain
required opinions of counsel, and the withdrawal must be approved by a majority
of the limited partner units not held by affiliates of the general partner. The
general partners shall call a meeting to consider the withdrawal no sooner than
60 days from the date of notice (180 days if there is only one general partner
at the time). The successor elected at the meeting shall be admitted as a
general partner immediately prior to the withdrawal of the existing general
partner or, if no successor is elected but the withdrawal is approved, the
general partner shall be entitled to withdraw, and the partnership shall be
dissolved.
In addition, the Holdings Partnership Agreement provides that a general
partner may be removed by the vote of 80% of the outstanding Holdings Units.
INDEMNIFICATION
The PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide that the respective partnerships shall indemnify an indemnitee
(generally, a general partner, its affiliates and certain other parties serving
at the request of the respective partnership) if the indemnitee acted or failed
to act in good faith and in a manner it reasonably believed to be in, or not
opposed to, the best interests of the respective partnership and, with respect
to any criminal proceeding, had no reasonable cause to believe its conduct was
unlawful. The termination or negative disposition of any proceeding shall not,
of itself, create a presumption that the indemnitee acted in contravention of
the applicable standard. In addition, both partnership agreements provide that
the respective partnerships may enter into indemnification agreements with the
indemnitees and purchase indemnitee insurance for the benefit of an indemnitee.
Finally, both partnership agreements provide for specific indemnification
procedures.
14
<PAGE> 32
RESTRUCTURING AUTHORITY
Both the PIMCO Advisors Partnership Agreement and the Holdings Partnership
Agreement provide broad authority of the general partner(s) in the event that
there is a substantial risk that the respective partnership will be treated as
an association taxable as a corporation for federal income tax purposes. In such
an event, the general partner(s) is authorized to effect one or more
restructurings which may involve, among other things, the transfer of some or
all of the business of the partnership to one or more newly created business
entities in exchange for interests in those entities which may be subject to
substantial restrictions on transfer, the mandatory exchange of some or all
Advisors Units or Holdings Units, as applicable, for interests in one or more
newly established business entities holding the partnership's assets, or the
imposition of substantial restrictions on the transferability of Advisors Units
or Holdings Units, as applicable, coupled with severe penalties for violations
of such restrictions.
DISSOLUTION AND LIQUIDATION
PIMCO Advisors
The PIMCO Advisors Partnership Agreement provides for dissolution upon (i)
the expiration of the term of the partnership, (ii) the determination of the
general partners that projected future revenues of the partnership are
insufficient to enable payment of projected expenses or that the continued
operation is not in the best interests of the partners, (iii) the election of
the general partners after an event pursuant to which the partnership becomes
taxed as a corporation, (iv) the sale of all or substantially all of the
partnership's assets not in connection with a restructuring, (v) the written
consent of all of the partners, (vi) certain events of withdrawal of the general
partner, including insolvency, unless the remaining general partners elect to
continue the partnership or a majority of the partners agree to continue the
partnership within 90 days and, if necessary, approve a successor and PIMCO
Advisors receives certain tax opinions, or (vii) entry of a decree of
dissolution under the Delaware Act.
The PIMCO Advisors Partnership Agreement provides that the partnership may
be reconstituted within 180 days of its dissolution because of a withdrawal of a
general partner, provided that a majority of the remaining partners agree in
writing to reconstitute PIMCO Advisors and PIMCO Advisors receives certain tax
opinions. Upon a dissolution, if the partnership is not reconstituted, the PIMCO
Advisors Partnership Agreement provides for the appointment of a liquidator, who
shall wind up the business and distribute the partnership assets.
Holdings
The Holdings Partnership Agreement provides for dissolution upon (i) the
expiration of the term of the partnership, (ii) the written determination of the
general partners that projected future revenues of the partnership are
insufficient to enable payment of projected expenses or that the continued
operation is not in the best interests of the partnership, (iii) the written
election of the general partners after an event pursuant to which the
partnership becomes taxed as a corporation, (iv) the written election of the
general partners approved by a majority of Holdings Units held by persons not
affiliated with the general partners, (v) certain events of withdrawal of the
general partner, including insolvency unless the remaining general partners
elect to continue the partnership or a majority of the partners agree or vote to
continue the partnership within 90 days and approve a successor, or (vi) entry
of a decree of dissolution under the Delaware Act.
The Holdings Partnership Agreement provides that the partnership may be
reconstituted within 180 days of its dissolution because of a withdrawal of a
general partner. Upon a dissolution, if the partnership is not reconstituted,
the Holdings Partnership Agreement provides for the appointment of a liquidator,
who shall wind up the business and distribute partnership assets.
GENERAL PARTNER'S RIGHT TO PURCHASE
PIMCO Advisors
Under the terms of the PIMCO Advisors Partnership Agreement, upon the
occurrence of certain events that would result in PIMCO Advisors being taxed as
a corporation, the general partners have the authority to exchange some or all
of the outstanding limited partner units for publicly traded equity securities
of a general partner or to redeem some or all of the outstanding limited partner
units for cash. In addition, the PIMCO Advisors Partnership Agreement allows the
general partners to either exchange or redeem the units of a limited partner if
such limited partner was an "eligible person" at December 31, 1997 and is no
longer an
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<PAGE> 33
"eligible person." The PIMCO Advisors Partnership Agreement generally
defines an "eligible person" as any member of the Management Board of PIMCO
Advisors, any executive officer of PIMCO Advisors or any managing director of an
investment management subsidiary of PIMCO Advisors. This authority of the
general partners to exchange and redeem units is in addition to the broad powers
of the general partners to effect certain restructurings (as discussed above in
"-- Restructuring Authority").
Holdings
Under the Holdings Partnership Agreement, the general partner does not
have any right to exchange all of the outstanding limited partner units of other
unitholders. The general partner has the right to convert a portion, but not all
of the general partner units held by the general partner, to limited partner
units. Additionally, a general partner may convert a portion of any limited
partner units held by the general partner into general partner units.
MANAGEMENT
For a description of the management of Holdings and PIMCO Advisors,
including a discussion of executive compensation and certain relationships and
related transactions, see "Item 10: Directors and Executive Officers of the
Registrant," "Item 11: Executive Compensation" and "Item 13: Certain
Relationships and Related Transactions" in Holdings' Annual Report on Form 10-K
for the year ended December 31, 1998, which is incorporated herein by reference.
PIMCO ADVISORS MARKET AND DISTRIBUTION INFORMATION
The Advisors Units are not publicly traded and there is no established
trading market for the Advisors Units. As of March 31, 1999, there were
approximately 51 holders of record of the Advisors Units. PIMCO Advisors
distributes on an annual basis cash in an amount equal to Operating Profit
Available for Distribution (as defined in the PIMCO Advisors Partnership
Agreement) less any amount deemed required for capital expenditures, future
payments of indebtedness, as reserves or otherwise in the business of PIMCO
Advisors. In general, the Management Board of PIMCO Advisors evaluates
distribution levels quarterly.
PIMCO Advisors paid distributions equal to $0.47 per Class A unit per
quarter for each quarter in the years ended December 31, 1996 and 1997, except
the third and fourth quarters of 1997, for which it paid $0.58 per unit. During
the year ended December 31, 1998 PIMCO Advisors declared distributions to
unitholders of record of $0.60 per unit in the first quarter, $0.60 per unit in
the second quarter, $0.63 per unit in the third quarter and $0.66 per unit in
the fourth quarter. During the year ended December 31, 1998 PIMCO Holdings
declared distributions to unitholders of record of $0.53 per unit in the first
quarter, $0.53 per unit in the second quarter, $0.53 per unit in the third
quarter, and $0.57 per unit in the fourth quarter.
Actual distribution levels will depend on the financial performance of
PIMCO Advisors, and there can be no assurance that the past distribution rates
will be achieved. Distributions made by PIMCO Advisors will depend on the
profitability of the investment management business of PIMCO Advisors, which is
affected in part by overall economic conditions and other factors affecting
capital markets generally, which are beyond the control of PIMCO Advisors. In
addition, the general partners of PIMCO Advisors may, in determining the amount
of distributions, deduct any amount from Operating Profit Available for
Distribution the general partners deem may be required for capital expenditures,
reserves or otherwise in the business of PIMCO Advisors. To the extent PIMCO
Advisors retains profits in any year, unitholders may have taxable income that
exceeds their cash distributions.
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<PAGE> 34
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership
of Holdings Units and Advisors Units as of March 31, 1999 by each person who, to
Holdings' knowledge, is the beneficial owner of more than 5% of Holdings Units
or Advisors Units and its executive officers. Except as indicated, the address
of each person or entity listed below is 800 Newport Center Drive, Suite 100,
Newport Beach, California 92660.
<TABLE>
<CAPTION>
PERCENTAGE OF ADVISORS
HOLDINGS UNITS HOLDINGS UNITS PERCENTAGE OF
BENEFICIALLY UNITS BENEFICIALLY HOLDINGS UNITS
OWNED(1)(2) OUTSTANDING OWNED(1)(3) OUTSTANDING(4)
<S> <C> <C> <C> <C>
FIVE PERCENT HOLDERS
PIMCO Partners, G.P. ( "PGP ") (5)............................... ---- 0 * 39,415,420 35.41
Pacific Life Insurance Company ( "Pacific Life ") (6)............ ---- 0 * 56,071,170 50.38
Pacific Asset Management LLC ( "PAM ") (6)....................... ---- 0 * 56,071,170 50.38
PIMCO Holding LLC ( "PIMCO LLC ") (7)............................ ---- 0 * 39,415,420 35.41
PIMCO Partners, LLC ( "PPLLC ") (8).............................. ---- 0 * 39,557,900 35.54
Pacific Financial Products, Inc. (formerly Thomson Advisory Group)
("PFP").......................................................... ---- 0 * 14,380,217 12.92
William R. Benz, II (9).......................................... 94,000 * 39,557,900 35.54
Christopher P. Dialynas (9)...................................... 10,300 * 39,557,900 35.54
William H. Gross (9)(10)......................................... 675,356 1.39 39,557,900 35.54
John L. Hague (9)................................................ 230,000 * 39,557,900 35.54
Brent R. Harris (9).............................................. 230,000 * 39,557,900 35.54
Dean S. Meiling (9).............................................. 230,000 * 39,557,900 35.54
James F. Muzzy (9)............................................... 230,000 * 39,557,900 35.54
William F. Podlich, III (9)...................................... 16,000 * 39,621,900 35.60
William C. Powers (9)............................................ 151,435 * 39,557,900 35.54
Lee R. Thomas (9)................................................ 49,006 * 39,557,900 35.54
William S. Thompson, Jr. (9)(11)................................. 230,000 * 39,557,900 35.54
Benjamin L. Trosky (9)........................................... 69,255 * 39,557,900 35.54
EXECUTIVE OFFICERS NOT INCLUDED ABOVE
William D. Cvengros.............................................. 205,000 * 360,000 *
Kenneth M. Poovey................................................ 10,000 * 123,459 *
Robert M. Fitzgerald............................................. 24,264 * - 0 - *
Stephen J. Treadway.............................................. 37,797 * 5,000 *
Ernest L. Schmider 6,204 * - 0 - *
Richard M. Weil.................................................. 22,200 * - 0 - *
----------- ---------
All directors and executive officers as a group (6 persons)...... 305,465 * 488,459 *
</TABLE>
* Less than 1%
(1) Each of the persons and entities listed disclaims beneficial ownership of
any units except to the extent that it has a pecuniary interest in such
units.
(2) Includes options exercisable within sixty days of February 1, 1999.
(3) Does not include units underlying options which may be exercised for
either units of limited partner interest in PIMCO Advisors or Holdings
Units exercisable within sixty days of February 1, 1999, which are
reflected in the column titled "PIMCO Holdings Units Beneficially Owned."
(4) Assumes exchange of all units of limited partner interest in PIMCO
Advisors for Holdings Units.
(5) Includes 39,410,321 Advisors Units held of record by PGP and 5,099 units
general partner interest in Holdings.
(6) Includes 39,415,420 Advisors Units held of record by PGP, which maybe
deemed to be beneficially owned by Pacific Life and PAM, because PIMCO LLC
is a general partner of PGP and is a wholly-owned subsidiary of PAM which
is wholly-owned subsidiary of Pacific Life. Also includes an aggregate of
16,655,750 PIMCO Advisors units issued as follows: Pacific Financial
Products, Inc. (formerly Thomson Advisory Group Inc.) (14,380,217 units),
CCM LLC (508,258 units), NFJ LLC (306,204 units), Cadence Partners L.P.
(637,000 units), Parametric Partners L.P. (393,860 units), NFJ Partners
L.P. (430,211 units) which may be deemed beneficially owned by PAM because
Pacific Financial Products, CCM LLC, NFJ LLC and PPA LLC are wholly-owned
subsidiaries of PAM and CCM LLC, NFJ LLC and PPA LLC are the general
partners of Cadence Partners L.P., NFJ Partners L.P. and Parametric
Partners L.P., respectively. As general partners they have shared
investment and disposition powers with respect to the units held by
Cadence Partners L.P., NFJ Partners L.P. and Parametric Partners L.P.
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(7) Includes 39,415,420 Advisors Units held of record by PGP, which may be
deemed to be owned by PIMCO LLC because PIMCO LLC is a general partner of
PGP.
(8) Includes (i) 142,480 Advisors Units held of record by PPLLC and (ii)
39,415,420 Advisors Units held of record by PGP and which may be deemed to
be beneficially owned by PPLLC, which is a general partner of PGP.
(9) Includes the following which may be deemed to be beneficially owned by the
individual as a member of PPLLC: (i) 142,480 Advisors Units held of record
by PPLLC, and (ii) 39,415,420 Advisors Units held of record by PGP, and
which may be deemed to be beneficially owned by PPLLC as a general partner
of PGP.
(10) Includes units held by members of Mr. Gross' family and a family trust
which Mr. Gross is a trustee, as to which he may be deemed to be the
beneficial owner.
PLAN OF DISTRIBUTION
This prospectus covers the offer and sale of up to 10,000,000 Holdings
Units that may be offered and issued by Holdings from time to time in connection
with offers of exchange made by Holdings for Advisors Units. Holdings
anticipates that the offers under this prospectus will offer to exchange one
Holdings Unit for each Advisors Unit tendered. Holdings anticipates making the
exchange offers during the semiannual periods during which the PIMCO Advisors
Partnership Agreement permits Advisors Units to be transferred. At the time of
each exchange offer, Holdings will by supplement to this prospectus provide
detailed information regarding the terms of the offer, including the dates of
commencement and expiration of the offer, the number of Advisors Units being
tendered for, the procedures for tendering Advisors Units and withdrawing those
tenders if so desired, any conditions to the offer, any ability of Holdings to
modify or extend the offer, the identity of any exchange agent for the offer and
the estimated fees and expenses of the offer. The Holdings Units covered by this
prospectus have been approved for listing, subject to notice of issuance, on the
New York Stock Exchange. No underwriter will be used in connection with the
exchange offers.
Holdings Units received in exchange for Advisors Units by persons who are
not affiliates of Holdings may be sold or transferred by such persons without
further registration under the Securities Act. However, Holdings Units received
in exchange for Advisors Units by persons who are affiliates will be subject to
restrictions under the Securities Act. This prospectus, as amended or
supplemented, if necessary, also relates to certain Holdings Units that may be
resold or reoffered by persons who acquired such units pursuant to this
prospectus. With the permission of Holdings, this prospectus, as amended or
supplemented, if necessary, may be used by affiliates of Holdings for the offer
and sale at various times of the Holdings Units received by them in an exchange
offer. The selling securityholders will act independently of Holdings in making
decisions with respect to the Holdings Units being offered hereby and may offer
their units in one or more of the following transactions:
- on the New York Stock Exchange;
- in the over-the-counter market;
- in transactions other than on such exchange or in the
over-the-counter market;
- in brokerage transactions;
- in privately negotiated transactions;
- in connection with short sales of the Holdings Units;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded
call options, in hedge transactions and in settlement of other
transactions in standardized or over-the-counter options; or
- in a combination of any of the above transactions.
The selling securityholders may sell their Holdings Units at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices.
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The selling securityholders may use broker-dealers to sell their Holdings
Units. If this happens, broker-dealers will either receive discounts or
commissions from the selling securityholders, or they will receive commissions
from purchasers of Holdings Units for whom they acted as agents. The selling
securityholders and any broker-dealers, agents or underwriters that participate
with the selling securityholders in the distribution of the Holdings Units
offered hereby may be deemed to be "underwriters" within the meaning of the
Securities Act, in which case any commissions or discounts received by such
broker-dealers, agents or underwriters and any profit on the resale of the
Holdings Units offered hereby and purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
To the extent required under the Securities Act, a supplemental prospectus
will be filed, disclosing (a) the name of any selling securityholders, (b) the
name of any such broker-dealers, (c) the number of units involved, (d) the price
at which such units are to be sold, (e) the commissions paid or discounts or
concessions allowed to such broker-dealer, where applicable, (f) that such
broker-dealers did not conduct any investigation to verify the information set
out or incorporated by reference in this prospectus, as supplemented, and (g)
other facts material to the transaction.
There is no assurance that any of the selling securityholders will sell
any or all of the Holdings Units offered hereby.
PIMCO Advisors may agree to pay certain costs and expenses incurred in
connection with the registration of the Holdings Units offered hereby, except
that the selling securityholders shall be responsible for all selling
commissions, transfer taxes and related charges in connection with the offer and
sale of such units.
Holdings may agree to keep the registration statement relating to the
offer and sale by the selling securityholders of the Holdings Units continuously
effective until a fixed date or such earlier date as such Holdings Units may be
resold without registration under the provisions of the Securities Act.
CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
The following is a discussion of certain federal income tax consequences
of the exchange offer and the receipt, retention, and disposition of Holdings
Units. This discussion is based on the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), the Treasury Regulations thereunder and
rulings and court decisions as of the date hereof, all of which are subject to
change, possibly retroactively. Neither Holdings nor PIMCO Advisors has
requested a ruling from the Internal Revenue Service ("IRS") in connection with
the exchange offer.
THE FOLLOWING DISCUSSION IS FOR GENERAL INFORMATION AND DOES NOT ADDRESS
ALL FEDERAL INCOME TAX CONSEQUENCES THAT MAY AFFECT THE RECEIPT, OWNERSHIP OR
DISPOSITION OF HOLDINGS UNITS, NOR DOES THE DISCUSSION SPECIFICALLY ADDRESS THE
EFFECT OF ANY APPLICABLE STATE, LOCAL, OR FOREIGN TAX LAWS. ACCORDINGLY, EACH
PROSPECTIVE HOLDER OF HOLDINGS UNITS IS URGED TO CONSULT HIS OR HER TAX ADVISOR
WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME TAX AND REPORTING
CONSEQUENCES ARISING FROM THE RECEIPT, OWNERSHIP AND DISPOSITION OF HOLDINGS
UNITS AS THEY MAY RELATE TO HIS OR HER TAX SITUATION.
TAX CONSEQUENCES OF THE EXCHANGE OFFER
The exchange of Advisors Units for Holdings Units is intended to be
treated for federal income tax purposes as a contribution of property to a
partnership in exchange for an interest in Holdings. As such, under Section 721
of the Code, no gain or loss will be recognized by the exchanging party or
Holdings on the exchange. The exchanging party will have a tax basis in its
Holdings Units equal to the tax basis such party had in the surrendered Advisors
Units and will have a holding period for the Holdings Units that includes the
holding period that it had for the surrendered Advisors Units. Furthermore,
Holdings will have a tax basis in the contributed Advisors Units equal to the
tax basis of such Advisors Units in the hands of the exchanging party and will
have a holding period for the Advisors Units that includes the holding period
for such Advisors Units in the hands of the exchanging party.
TAX CLASSIFICATION OF HOLDINGS
Tax Classification of Holdings Generally. At present, Holdings is classified as
a partnership for federal income tax purposes, and, as discussed below under
"Publicly Traded Partnership Status," Holdings has elected to continue to be
treated as such. In general,
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entities classified as partnerships under the Code are not subject to federal
income tax (however, as discussed below in "Publicly Traded Partnership Status,"
commencing with the 1998 taxable year Holdings is subject to a 3.5% federal tax
on its gross income from the conduct of active trades or businesses, including
its share of such gross income derived through PIMCO Advisors). Instead, all
holders of partnership interests are taxable on their allocable share of
partnership income or gain, whether or not such income or gain is distributed.
If an entity formed as a partnership under state law were classified for federal
income tax purposes as a corporation, income would be taxed at the entity level
at the then applicable corporate rate of tax (currently a maximum federal
marginal rate of 35%), and distributions to the partners of such partnership
would constitute taxable dividends to the extent of current or accumulated
earnings and profits of the entity.
Publicly Traded Partnership Status. As a result of amendments to the Code
made by the Revenue Act of 1987, pursuant to Code Section 7704(a) "publicly
traded partnerships" are generally treated as corporations under the Code. The
Holdings Units are publicly traded and thus Holdings constitutes a "publicly
traded partnership" for purposes of Code Section 7704. As discussed below, since
1987 Holdings qualified for a temporary exception to the application of Code
Section 7704(a), and Holdings believes that under new tax legislation it
qualifies and will continue to qualify for an indefinite exception that is
available for the 1998 and subsequent tax years. However, if Holdings were
determined at any time to be subject to Section 7704(a) of the Code, Holdings
would be taxable as a corporation. In this event, the income, gain, loss,
deductions and credits of Holdings would be reflected only on its tax return and
would not be passed through to the holders of Holdings Units. If Holdings had
positive taxable income for any period, it would be required to pay tax on such
income at applicable corporate rates. The imposition of such tax would reduce
the amount of distributions that would ultimately be made to holders of Holdings
Units. In addition, the amount of any distributions to holders of Holdings Units
would be taxable to them as ordinary dividend income to the extent of Holdings'
current or accumulated earnings and profits, regardless of the source from which
they were generated. Distributions in excess of Holdings' current or accumulated
earnings and profits would be treated as a nontaxable return of capital to the
extent of the holder's tax basis in its Holdings Units and thereafter treated as
gain from the sale of such holder's Holdings Units.
Because Holdings was publicly traded prior to the effective date of the
amendments made by the Revenue Act of 1987, Holdings believes that from 1987
through December 31, 1997 it qualified for a temporary (10-year) exception to
tax treatment as a corporation under Code Section 7704(a) (the "temporary
exception"). This temporary exception permitted Holdings to continue to enjoy
partnership status (and not be treated as a corporation) until December 31,
1997, so long as Holdings did not otherwise cease to be taxed as a partnership
without regard to the publicly traded partnership rules before then.
Pursuant to legislation enacted as part of the Taxpayer Relief Act of
1997, for tax years beginning after December 31, 1997, publicly traded
partnerships that were covered by the temporary exception are eligible to elect
(an "electing 1987 partnership") to be covered by another exception to tax
treatment as a corporation (the "elective exception"). Subject to the discussion
below, an electing 1987 partnership is exempt from the application of Code
Section 7704(a) and therefore will continue to be taxed as a partnership and not
a corporation. An electing 1987 partnership is subject to a 3.5% annual tax on
its gross income from the active conduct of any trades or businesses (the "3.5%
PTP tax"). For an electing 1987 partnership holding interests in another
partnership, gross income includes such electing 1987 partnership's distributive
share of any gross income from the other partnership's active conduct of a trade
or business. The 3.5% PTP tax cannot be offset by any tax credits and will not
be deductible for federal or state income tax purposes. An electing 1987
partnership is a publicly traded partnership that meets certain eligibility
requirements specified in Code Section 7704(g), properly elects to be subject to
Code Section 7704(g), and consents to the application of the 3.5% PTP tax for
its first taxable year beginning after December 31, 1997. The election, once
made, applies to the tax year for which it has been made and for all subsequent
tax years, until revoked by the partnership. Consent of the IRS is not needed to
revoke the election, and, once revoked, the election cannot be reinstated.
Notwithstanding its election, an electing 1987 partnership will lose its
partnership status as of the first day after December 31, 1997 on which it adds
a substantial new line of business (within the meaning of Code Section 7704(g)).
As discussed above, Holdings believes that it qualified through December
31, 1997, for the temporary exception to corporate tax treatment, and Holdings
has taken all necessary action to elect to be covered by the elective exception
commencing with its taxable year that began on January 1, 1998. Furthermore,
Holdings does not anticipate either revoking the election or adding a
substantial new line of business. However, because ongoing qualification for the
elective exception will depend in large part upon facts existing in the future,
there can be no assurances that Holdings will continue to qualify for the
elective exception and could thereafter be subject to tax as a corporation.
Flow-Through of Partnership Income. Except for the 3.5% PTP tax discussed
above, no federal income tax will be paid by Holdings itself. Instead, holders
of Holdings Units will be required to report on their federal income tax returns
their allocable share of
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income, gains, losses, deductions and credits of Holdings. Holdings uses the
calendar year for its tax year, and, under the Holdings Partnership Agreement,
Holdings' income, gains and other tax items are calculated on a monthly basis
and allocated for tax purposes to the holders of Holdings Units as of the last
day of each month. The characterization of any item of profit or loss (e.g., as
capital gain or loss rather than ordinary income or loss) will generally be the
same for a holder of Holdings Units as it is for Holdings. Tax allocations are
discussed further below. Because a holder of Holdings Units will be required to
include Holdings' income or gain in gross income for tax purposes, without
regard to whether there are any distributions from Holdings, a holder may become
liable for taxes on Holdings' income or gain in excess of the cash distributions
received by such holder. In this regard, because the 3.5% PTP tax will not be
deductible for purposes of calculating Holdings' net taxable income, the
imposition of such tax will reduce Holdings' ability to make distributions equal
to its net taxable income (in other words, Holdings' net income used to pay the
3.5% PTP tax will be taxable to Holdings' partners but not available for
distribution.)
Because the activities of Holdings are expected to consist of holding
PIMCO Advisors units, and the activities of PIMCO Advisors are expected to
consist primarily of holding interests in the Investment Management Firms, the
types of income that Holdings may realize is expected to be principally
operating income from the operations of the Investment Management Firms, which
will be characterized for tax purposes as if such income were realized directly
by the holders of Holdings Units.
Tax Classification of PIMCO Advisors. The Class A LP Units of PIMCO
Advisors are no longer publicly traded. As in the case of Holdings, PIMCO
Advisors qualified for the temporary exception to tax treatment as a corporation
under Code Section 7704(a), and PIMCO Advisors believes that under the temporary
exception it continued to enjoy partnership status (and not be taxed as a
corporation) through December 31, 1997. However, unlike Holdings, PIMCO Advisors
has not elected and is no longer eligible to elect to be covered by the elective
exception to corporate tax treatment in 1998 and subsequent years. Instead,
effective as of January 1, 1998, partnership interests of PIMCO Advisors have
not been listed or traded on any securities exchange and PIMCO Advisors has
imposed significant restrictions on the private transfer of such interests. Such
cessation of public trading and transfer restrictions were intended to cause
PIMCO Advisors to cease, as of December 31, 1997, to be a publicly traded
partnership for purposes of Code Section 7704, with the result that it will
continue to be classified as a partnership (and not a corporation) for federal
tax purposes. If PIMCO Advisors continues to qualify as a partnership for tax
purposes, it will not pay federal tax on its income, it will not be subject to
the 3.5% PTP tax, and its income, gains and other tax items will be allocated to
its partners, including Holdings, in the manner described above under
"Flow-Through of Partnership Income." Since PIMCO Advisors is not eligible to
elect to be covered by the elective exception, it will lose its classification
as a partnership for tax purposes (and thus be taxable as a corporation) if at
any time after January 1, 1998, its partnership interests are deemed to be
"publicly traded" for purposes of Code Section 7704. Because the tax
characterization of PIMCO Advisors partnership interests will depend upon facts
existing in the future, there can be no assurance that in the future the IRS
will not attempt to treat PIMCO Advisors partnership interests as publicly
traded and PIMCO Advisors as a publicly traded partnership taxable as a
corporation. Because substantially all of Holdings' income is derived from PIMCO
Advisors, if the IRS were to assert successfully that PIMCO Advisors should be
classified as a publicly traded partnership taxable as a corporation, PIMCO
Advisors would be taxed on its income and its after-tax distributions to
Holdings would be taxed as dividends. See "Tax Classification of Holdings
Generally." Such corporate tax treatment of PIMCO Advisors would have a material
adverse effect on Holdings' income and thus on its distributions to the holders
of Holdings Units.
Calculation of Adjusted Tax Basis and Treatment of Partnership
Distributions. In general, a holder's tax basis in his Holdings Units will be
equal to the tax basis such holder had in the Advisors Units that were exchanged
by such holder for Holdings Units in the exchange offer, increased by the amount
of any other contributions made by the holder to Holdings and by the holder's
allocable share of any income of Holdings, and decreased by the amount of any
distributions received by the holder from Holdings and by the holder's allocable
share of any losses of Holdings. Increases in a holder's share of liabilities of
Holdings (if any) are treated as contributions to Holdings by such holder and
decreases in a holder's share of such liabilities (if any) are treated as
distributions of cash by Holdings to such holder.
As described above, holders of Holdings Units are subject to tax on their
allocable share of Holdings' income whether or not distributed. Generally, the
receipt of cash distributions from a partnership are not taxable to the
recipient partner except to the extent that such distributions exceed the
partner's tax basis in his interest in the partnership. Cash distributions
(including deemed distributions resulting from a decrease in a partner's share
of liabilities of the partnership) in excess of a partner's tax basis in his
partnership interest are treated as gain realized from the sale or other taxable
disposition of the partnership interest. Distributions of assets in kind to a
partner from a partnership generally are not taxable to either the partnership
or the recipient partner, although certain exceptions apply.
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Under the Holdings Partnership Agreement, items of partnership income,
gain, loss, deduction and credit are determined on an annual basis and allocated
ratably to holders who hold Holdings Units as of the last day of each month.
Distributions are made to holders who hold Holdings Units on record dates
determined by the General Partner. As a result, holders who sell Holdings Units
at any time during Holdings' taxable year may be allocated taxable income of
Holdings without receiving a distribution in respect of such income. Such an
allocation would increase a holder's basis in his or her Holdings Units,
however, and thus to such extent would decrease any gain or increase any loss
recognized on a sale of such Holdings Units.
TAX ALLOCATIONS
Overview. As indicated above, each holder of Holdings Units must include
in taxable income his or her share of the taxable income of Holdings. Although
the applicable tax rules are complex, it is anticipated that the reported income
of each holder of Holdings Units will generally consist of two parts:
- first, a share of the taxable income of Holdings calculated at the
Holdings level (using Holdings' basis in its assets and without the
benefit of any deductions for goodwill and certain other intangible
assets that are eligible for amortization pursuant to Section 197 of
the Code ("Section 197 Intangibles")), and
- second, a deduction taken ratably over 15 years for the amortization
of the portion of the original purchase price of the Advisors Units
contributed to Holdings in the exchange offer allocable to Section
197 Intangibles, or, for holders who purchase Holdings Units, the
portion of the original purchase price for such Holdings Units
allocable to Section 197 Intangibles.
The treatment of Section 197 Intangibles is discussed further under
"Certain Additional Tax Considerations for Holders of Holdings Units." Set forth
below is a discussion of three of the principal tax rules that are relevant in
determining the taxable income allocable to any holder of Holdings Units:
Code Section 704(b). Under Code Section 704(b), taxable income of Holdings
must be allocated among Holdings Units in a manner that reflects the allocation
of economic income. Thus, the basic allocation rule generally followed by
Holdings is that its taxable income will be allocated pro rata among Holdings
Units.
Code Section 704(c). If a partner acquires an interest in Holdings in
exchange for a contribution of property to Holdings, Holdings' initial tax basis
in the contributed property may differ from the property's fair market value at
the time of the contribution. In that event, the taxable income earned by
Holdings from such property would differ from Holdings' "book income" from the
property (which would be calculated under tax accounting principles using as the
property's initial book value the property's fair market value at the time it
was acquired by Holdings). Under Code Section 704(c), the taxable income and
deductions of a partnership generally must be allocated to partnership interests
that were issued in exchange for property in a way that eliminates the
difference between the partnership's book value and tax basis for the property
for which such interest was exchanged. Regulations allow a partnership to use
any one of a number of reasonable methods for making this adjustment. A similar
principle applies when the capital accounts for outstanding partnership
interests are adjusted to fair market value. The book/tax differences stemming
from the capital account adjustments must be allocated to partnership interests
for which the adjustments are made. Special allocations of taxable income and
deductions made to a partnership interest under Code Section 704(c) continue to
be made even after the partnership interest is transferred to a new owner. The
foregoing rules would apply to holders of Advisors Units contributing such Units
to Holdings in exchange for Holdings Units in connection with the exchange
offer, as well as to other persons contributing property to Holdings in exchange
for Holdings Units.
Code Section 754. Finally, Holdings and PIMCO Advisors each has in effect,
and each Investment Management Firm has made, Code Section 754 elections. As a
result, each purchaser of a Holdings Unit will be allowed to adjust the basis of
Holdings' assets, solely for purposes of computing the taxable income of such
purchaser, in an amount equal to the difference between the price paid for the
Unit and the share of Holdings' basis in its assets allocable to that Unit.
Substantially all of this adjustment is expected to be allocated to Section 197
Intangibles, with the result that purchasers generally can deduct the amount of
the adjustment ratably over 15 years. See "Certain Additional Tax Considerations
for Holders of Holdings Units" below.
CERTAIN OF HOLDINGS' ALLOCATION METHODS AND ASSUMPTIONS ARE DESIGNED TO
DEAL WITH SOME OF THE PRACTICAL ISSUES THAT ARISE FROM OPERATING IN THE FORM OF
A PUBLIC PARTNERSHIP. WHILE THESE METHODS AND ASSUMPTIONS HAVE NOT BEEN
SPECIFICALLY APPROVED BY THE IRS, AND MAY NOT BE IN TECHNICAL COMPLIANCE WITH
CODE SECTIONS 704(c) AND 754, HOLDINGS BELIEVES THAT THEY ARE CONSISTENT WITH
THE PURPOSES OF THOSE PROVISIONS. HOWEVER, THE IRS COULD CHALLENGE THE
ALLOCATION METHODS AND ASSUMPTIONS
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USED BY HOLDINGS, AND IF SUCH CHALLENGE WERE SUCCESSFUL, THE TAXABLE INCOME OF
SOME HOLDERS OF HOLDINGS UNITS MIGHT BE INCREASED WITHOUT ANY CORRESPONDING
INCREASE IN CASH DISTRIBUTIONS.
CERTAIN LIMITATIONS ON LOSSES AND DEDUCTIONS
Holders of Holdings Units are not expected to be allocated losses in
excess of income. However, if this occurs, federal tax law provides for certain
limitations (such as the "passive activity" and "at risk" rules) on a holder's
ability to deduct such losses against income from other sources. The deduction
of interest on debt used to purchase or carry Holdings Units may also be
limited. Holders of Holdings Units should consult their tax advisors with regard
to the possible application of such rules related to limitations on the
deductibility of Holdings' losses and investment interest.
DISPOSITION OF HOLDINGS UNITS
Gain or loss from a sale or other disposition of a Holdings Unit will
generally be based on the difference between the amount realized and the
holder's adjusted tax basis for such Holdings Unit. The amount realized will
include the holder's share of partnership liabilities. Any such gain or loss
will generally be taxable as long-term capital gain or loss if the holder has
held the Holdings Unit for more than one year. However, a holder of Holdings
Units may recognize ordinary income from sale proceeds attributable to
unrealized receivables and inventory of Holdings ("Section 751 Assets"). Such
ordinary income may exceed net gain realized upon the sale of Units and may be
recognized even if there is a net loss on the sale of Units. Because
amortization deductions with respect to Section 197 Intangibles will be treated
as Section 751 Assets, if such Section 197 Intangibles maintain their value,
sellers of Holdings Units who have been allocated amortization deductions
attributable to such Section 197 Intangibles will recognize ordinary income on
the sale equal to the amount of amortization deductions previously taken. If,
however, there is a loss on the sale of Holdings Units and such loss is
attributable to the decline in the value of the Section 197 Intangibles, the
loss in some circumstances might be deferred until a holder disposes of all of
his or her Holdings Units.
The IRS has ruled that a partner acquiring multiple interests in a
partnership in separate transactions at different prices must maintain an
aggregate adjusted tax basis in a single partnership interest consisting of the
combined interests in the partnership. Upon a disposition of a portion of such
single interest, the partner would, under the ruling, be required to apportion
equitably his or her aggregate tax basis between the interest sold and the
interest retained. Under this ruling, a holder of Holdings Units that had
acquired Advisors Units at different prices would in effect be precluded from
selecting which Holdings Units to sell, and thereby from selectively controlling
the recognition of gain or loss.
Certain Reporting Requirements. In order to comply with Code requirements
and avoid imposition of potentially significant penalties, holders of Holdings
Units transferring any such Units, other than through a broker subject to the
provisions of Code Section 6045, must report such transfer to Holdings. In
addition, under Code Sections 1060, 755 and related provisions, transferors and
transferees of Holdings Units must report the amount of any basis adjustment
allocated to Section 197 Intangibles.
Any person who holds Holdings Units as a nominee for another person is
required to furnish to Holdings: (i) the name, address and taxpayer
identification number of the beneficial owner and the nominee; (ii) certain
information relating to the status of the beneficial owner; (iii) the amount and
description of the Holdings Units held, acquired or transferred for the
beneficial owner, and (iv) certain other information including the dates of
acquisitions and transfers, means of acquisitions and transfers and the
acquisition cost of any Holdings Units, as well as the amount of net proceeds
from sales of Holdings Units. Brokers and financial institutions are required to
furnish certain additional information on Holdings Units they acquire, hold or
transfer for their own accounts including the amount of net proceeds from sale.
BACKUP WITHHOLDING
In general, information reporting requirements will apply to payments to
noncorporate holders of the proceeds of a sale of Holdings Units and "backup
withholding" at a rate of 31% will apply to such payments if the holder fails to
provide an accurate taxpayer identification number. In addition, distributions
made to or on behalf of a noncorporate holder whose Holdings Units are held by a
broker may be subject to a backup withholding tax unless the holder complies
with certain reporting requirements.
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CERTAIN ADDITIONAL TAX CONSIDERATIONS FOR HOLDERS OF HOLDINGS UNITS
Code Section 197 generally allows an amortization deduction with respect
to any Section 197 Intangible acquired by the taxpayer after August 10, 1993 and
held in connection with the conduct of a trade or business. The amount of such
deduction is determined by amortizing the taxpayer's adjusted tax basis in such
intangible ratably over 15 years. Section 197 Intangibles generally include
goodwill and going concern value, among other items.
The portion of the purchase price of an interest in a partnership that is
allocable to Section 197 Intangibles will generally equal the excess of the
purchase price over a partner's proportionate share of the fair market value of
the partnership's assets that are not Section 197 Intangibles, as determined
based on the allocation methods employed by the partnership. In the present
case, the per-Holdings Unit value of such other assets could be affected by a
number of factors, including the issuance of new Holdings Units by Holdings. The
amount allocated to Section 197 Intangibles by any holder of Holdings Units
could be reduced if the IRS were to challenge the allocation methods used by
Holdings. See "--Tax Allocations." Deductions from amortization of Section 197
Intangibles will decrease the holder's tax basis in his Holdings Units, and such
deductions will be recaptured as ordinary income upon a taxable disposition of
the Holdings Units to the extent that amortization deductions are not matched by
a decline in the fair market value of the relevant intangible assets. See
"--Disposition of Units."
SPECIAL STATUS TAXPAYERS
The foregoing is a general discussion of federal tax laws related to the
exchange offer and the ownership and disposition of Holdings Units that apply in
the case of most United States taxpayers. Under federal tax laws, however,
additional or different tax rules may apply to persons or entities having a
special status for tax purposes, such as tax-exempt entities, foreign
individuals and entities, regulated investment companies and real estate
investment trusts. A prospective holder of Holdings Units that is such a special
status person or entity should consult his, her or its tax advisor with regard
to the tax consequences to such holder of the exchange offer and the ownership
and disposition of Holdings Units.
STATE AND LOCAL TAXES
The above discussion does not address the tax consequences under
applicable state and local income tax laws of the exchange offer and the
ownership or disposition of Holdings Units. In this regard, holders of Holdings
Units should note that California has enacted legislation that will impose a 1%
tax on the gross income from active trades and businesses derived from
California sources by electing 1987 partnerships, with such 1% tax to remain
applicable to an electing 1987 partnership so long as it is subject to the 3.5%
PTP tax. It is possible that other states may at some time impose similar taxes
on income derived from such states by an electing 1987 partnership such as
Holdings. Holders of Advisors Units are urged to consult their tax advisors with
regard to the tax consequences under state and local income tax laws of the
exchange offer and the ownership and disposition of Holdings Units.
24
<PAGE> 42
EXPERTS
The consolidated financial statements of PIMCO Advisors for the three
years ended December 31, 1998 and the financial statements of Holdings for the
year ended December 31, 1998, the eight months ended December 31, 1997 and for
each of the two years in the period ended April 30, 1997 have been so included
in reliance on the reports of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
LEGAL OPINIONS
For the purpose of this offering, Kenneth M. Poovey, Holdings' Chief
Operating Officer, has given his opinion on the validity of the Holdings Units.
Mr. Poovey, individually and with members of his family owns, has options to
purchase or has other interests in, Holdings Units.
25
<PAGE> 43
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PROSPECTIVE INVESTORS MAY ONLY RELY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. NO PERSON HAS BEEN AUTHORIZED TO
PROVIDE ANY INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY HOLDINGS. THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR OFFER TO BUY IN ANY
JURISDICTION IN WHICH THE OFFER OR SALE IS NOT PERMITTED. NEITHER THE DELIVERY
OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF HOLDINGS SINCE THE DATE OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS OR THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Supplement
Summary......................................................... S-1
The Exchange Offer.............................................. S-3
Annex A - Form of Letter of Transmittal......................... A-1
Prospectus
Available Information/Incorporation by Reference................ 1
Forward-Looking Statements...................................... 1
The Partnerships................................................ 2
The Exchange Offers............................................. 3
Risk Factors.................................................... 5
Use of Proceeds................................................. 6
Selected Historical Financial Data.............................. 6
Pro Forma Financial Data........................................ 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations................. 6
Comparison of Securities........................................ 7
Management...................................................... 16
PIMCO Advisors Market and Distribution ........................
Information................................................... 16
Voting Securities and Principal Holders Thereof................. 17
Plan of Distribution............................................ 18
Certain United States Federal Tax Considerations................ 19
Experts......................................................... 25
Legal Opinions.................................................. 25
</TABLE>
8,429,622 UNITS
OF LIMITED
PARTNERSHIP INTEREST IN
PIMCO ADVISORS HOLDINGS L.P.
---------------------------
PROSPECTUS SUPPLEMENT
---------------------------
MAY 17, 1999
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