<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1999
REGISTRATION NO. 333-53055
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PIMCO ADVISORS HOLDINGS L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
DELAWARE 6799 13-3412614
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
800 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
(949) 717-7022
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
RICHARD M. WEIL
GENERAL COUNSEL
800 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
(949) 717-7022
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
DAVID C. FLATTUM
LATHAM & WATKINS
650 TOWN CENTER DRIVE, 20TH FLOOR
COSTA MESA, CALIFORNIA 92626
(714) 540-1235
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement.
If any of the securities being registered on this Form are being offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [X]
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
<PAGE> 2
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
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<CAPTION>
============================================================================================================
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM
SECURITIES TO BE PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE(1) OFFERING PRICE(1) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Units of Limited Partner Interest 10,000,000 $31.22 $312,200,000 $92,099(2)
============================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended, based
on the average of the high and low sales prices for Holdings Units
reported on the New York Stock Exchange on May 15, 1998.
(2) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 3
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 6.
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.
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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.
----------------
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> 4
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.
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<PAGE> 5
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:
o growth in the institutional market by providing high levels of
client service and entering new markets,
o 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
o new product offerings to institutions and retail investors.
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<PAGE> 6
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
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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 %
======== ======== ======== ========
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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
4
<PAGE> 7
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.
5
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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.
6
<PAGE> 9
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.
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<PAGE> 10
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
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<PAGE> 11
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 any
time in an 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
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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.
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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
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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
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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
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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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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.
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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> 19
"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> 20
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
HOLDINGS OF
UNITS HOLDINGS ADVISORS 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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<PAGE> 21
(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:
o on the New York Stock Exchange;
o in the over-the-counter market;
o in transactions other than on such exchange or in the
over-the-counter market;
o in brokerage transactions;
o in privately negotiated transactions;
o in connection with short sales of the Holdings Units;
o by pledge to secure debts and other obligations;
o 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
o 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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<PAGE> 22
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,
20
<PAGE> 23
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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<PAGE> 24
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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<PAGE> 25
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:
o 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
o 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
23
<PAGE> 26
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.
24
<PAGE> 27
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.
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> 28
==================================== ====================================
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 10,000,000 UNITS
PROSPECTUS SUPPLEMENT OR THE OF LIMITED
PROSPECTUS NOR ANY SALE HEREUNDER PARTNERSHIP INTEREST IN
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 PIMCO ADVISORS HOLDINGS L.P.
CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS IS
CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
- --------------
---------------------------
TABLE OF CONTENTS
PROSPECTUS
---------------------------
<TABLE>
<CAPTION>
PAGE
----
Prospectus
<S> <C>
Available Information/Incorporation
by Reference......................... 2
Forward-Looking Statements............ 2
The Partnerships...................... 3
The Exchange Offers................... 4
Risk Factors.......................... 6 APRIL 21, 1999
Use of Proceeds....................... 7
Selected Historical Financial Data.... 7
Pro Forma Financial Data.............. 7
Management's Discussion
and Analysis of Financial
Condition and Results
of Operations....................... 7
Comparison of Securities.............. 8
Management............................17
PIMCO Advisors Market and
Distribution Information............17
Voting Securities and
Principal Holders Thereof...........18
Plan of Distribution..................19
Certain United States Federal
Tax Considerations..................20
Experts...............................25
Legal Opinions........................25
</TABLE>
==================================== ====================================
<PAGE> 29
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act
permits a limited partnership to indemnify and hold harmless any partner or
other person from and against any and all claims whatsoever, subject to such
standards and restrictions, if any, as set forth in its partnership agreement.
Under the Holdings Partnership Agreement, the general partner of
Holdings, its affiliates and all officers, directors, partners, agents and
employees of the general partner and its affiliates will not be liable to
Holdings or to any Unitholders for any actions or inactions of the general
partner or such other persons if such action or inaction did not constitute
actual fraud, gross negligence or willful or wanton misconduct. Holdings will
indemnify the general partner and such persons and entities against all losses
or liabilities, costs and expenses (including legal fees and expenses) incurred
by the general partner or any such persons or entities arising from their
conduct whenever such course of conduct does not constitute actual fraud, gross
negligence or willful or wanton misconduct.
In regards to PIMCO Advisors, certain executive officers of PIMCO
Advisors and directors and officers of Thomson Advisory Group, Inc., the former
general partner of PIMCO Advisors ("TAG"), and Thomson Investor Services, Inc.
("TIS") are parties to indemnification agreements with PIMCO Advisors pursuant
to which PIMCO Advisors has agreed, to the fullest extent permitted by law, to
indemnify such persons from and against, among other things, all losses, claims,
liabilities, expenses and other amounts arising from any and all claims, actions
or proceedings in which any such person may be involved by reason of his or her
status as an officer of PIMCO Advisors or in connection with such person's
services to TAG and TIS.
The PIMCO Advisors Partnership Agreement provides that each officer and
director of PIMCO Advisors shall be indemnified by PIMCO Advisors against any
and all losses, claims, damages, liability and expense arising from any
proceeding in which any such director or officer may be involved by reason of
his or her status and further shall be advanced expenses in defending any such
proceeding to the fullest extent permitted by law. PIMCO Advisors will not be
permitted to change the indemnification provisions of the PIMCO Advisors
Partnership Agreement for at least six years following the 1994 consolidation of
the businesses of TAG and the investment management businesses owned by Pacific
Life Insurance Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers, or persons controlling PGP (as the general partner of Holdings and the
managing general partner of PIMCO Advisors) pursuant to the foregoing
provisions, PGP has been informed that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
3.1 Amended and Restated Agreement of Limited Partnership of PIMCO
Advisors Holdings L.P. dated June 30, 1998 (Incorporated by
reference to PIMCO Advisors Holdings L.P.'s Proxy Statement
filed May 19, 1998)
</TABLE>
II-1
<PAGE> 30
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
3.1.1 Amendment to Amended and Restated Agreement of Limited
Partnership of PIMCO Advisors Holdings L.P. dated November 4,
1997 (Incorporated by reference to Exhibit 3.1.1 of PIMCO
Advisors Holdings L.P.'s Registration Statement No. 333-39585 on
Form S-1)
3.1.2 Assignment of General Partner Interest and Amendment to Amended
and Restated Agreement of Limited Partnership of PIMCO Advisors
Holdings L.P. dated November 4, 1997 (Incorporated by reference
to Exhibit 3.1.2 of PIMCO Advisors Holdings L.P.'s Registration
Statement No. 333-39585 on Form S-1)
3.1.3 Assignment of General Partner Interest and Amendment to Amended
and Restated Agreement of Limited Partnership of PIMCO Advisors
Holdings L.P. dated November 4, 1997 (Incorporated by reference
to Exhibit 3.1.3 of PIMCO Advisors Holdings L.P.'s Registration
Statement No. 333-39585 on Form S-1)
3.1.4 Amendment to Amended and Restated Agreement of Limited
Partnership Agreement of PIMCO Advisors Holdings L.P. dated
November 4, 1997 (Incorporated by reference to Exhibit 3.1.4 of
PIMCO Advisors Holdings L.P.'s Registration Statement No.
333-39585 on Form S-1)
3.1.5 Amendment to Amended and Restated Limited Partnership Agreement
of PIMCO Advisors Holdings L.P. dated December 1, 1997
(Incorporated by reference to Exhibit 3.1.5 of PIMCO Advisors
Holdings L.P.'s Registration Statement No. 333-39585 on Form
S-1)
3.1.6 Amendment to Amended and Restated Limited Partnership Agreement
of PIMCO Advisors Holdings L.P. dated December 1, 1997
(Incorporated by reference to Exhibit 3.1.6 of PIMCO Advisors
Holdings L.P.'s Registration Statement No. 333-39585 on Form
S-1)
4.1 Form Certificate of Limited Partnership Units (Incorporated by
reference to Exhibit 4.1 of Registrant's Annual Report on Form
10-K for the year ended December 31, 1997)
5.1* Opinion and consent of Kenneth M. Poovey regarding the validity
of the PIMCO Holdings Units being exchanged for PIMCO Advisors
Units
10.1 Acquisition Agreement dated August 17, 1995 among Oppenheimer
Capital, Quest for Value Advisors, Quest for Value Distributors
and Oppenheimer Management Corporation (Incorporated by
reference to Exhibit 10.1 of the PIMCO Advisors Holdings L.P.'s
Form 10-Q for the fiscal quarter ended October 31, 1995)
10.2 Form of Indemnification Agreement executed by certain officers
of the Registrant and certain directors of Thomson McKinnon
Asset Management Inc. (Incorporated by reference to Exhibit
10.21 of Thomas McKinnon Asset Management L.P.'s Report No.
33-17227 on Form 10-Q for the fiscal quarter ended June 30,
1990)
10.3 Form of Indemnification Agreement executed by certain directors
of Thomson Advisory Group, Inc. (Incorporated by reference to
Exhibit 10.22 of Thomson Advisory Group L.P.'s Report No.
33-17227 on Form 10-Q for the quarter ended September 30, 1990)
10.3 Form of Indemnification Agreement executed by certain directors
of Thomson Advisory Group, Inc. (Incorporated by reference to
Exhibit 10.22 of Thomson Advisory Group L.P.'s Report No.
33-17227 on Form 10-Q for the quarter ended September 30, 1990)
</TABLE>
II-2
<PAGE> 31
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.3.1 Form of Amendment No. 1 to Indemnification Agreement
(Incorporated by reference to Exhibit 10.46 of Thomson Advisory
Group L.P.'s Report No. 33-17227 on Form 10-Q for the fiscal
quarter ended March 31, 1991)
10.4 Registration Rights Agreement dated as of November 15, 1994,
among the Funds, PFAMCo Partners and Individuals (as such terms
are defined therein) (Incorporated by reference to PIMCO
Partners G.P.'s Schedule 13D filed November 25, 1994)
10.5 Amended and Restated Operating Agreement between PIMCO Advisors
L.P. and PIMCO Advisors Holdings L.P. dated January 1, 1998
(Incorporated by reference to Exhibit 10.6 of Registrant's
Annual Report on Form 10-K for the year ended December 31, 1997)
10.6 Amended and Restated Agreement of Limited Partnership of PIMCO
Advisors L.P. dated December 31, 1997 (Incorporated by reference
to Exhibit 10.7 of Registrant's Annual Report on Form 10-K for
the year ended December 31, 1997)
10.7 Agreement and Plan of Merger dated November 4, 1997 (Opgroup
Transaction) (Incorporated by reference to Exhibit 10.1 of PIMCO
Advisors L.P.'s Report on Form 8-K/A dated November 4, 1997)
10.8 Put Right dated November 4, 1997 (Incorporated by reference to
Exhibit 10.2 of PIMCO Advisors L.P.'s Report on Form 8-K/A dated
November 4, 1997)
10.9 Exchange Right dated November 4, 1997 (Incorporated by reference
to Exhibit 10.3 of PIMCO Advisors L.P.'s Report on Form 8-K/A
dated November 4, 1997)
10.10 Note Agreement dated November 4, 1997 (Incorporated by reference
to Exhibit 10.4 of PIMCO Advisors L.P.'s Report on Form 8-K/A
dated November 4, 1997)
10.11 Contribution Agreement dated November 4, 1997 (Incorporated by
reference to Exhibit 10.5 of PIMCO Advisors L.P.'s Report on
Form 8-K/A dated November 4, 1997)
10.12 Certificate of Long Term Indemnity Indebtedness dated November
4, 1997 (Incorporated by reference to Exhibit 10.6 of PIMCO
Advisors L.P.'s Report on Form 8-K/A dated November 4, 1997)
10.13 Amended and Restated Release and Indemnity Agreement dated
November 4, 1997 (Incorporated by reference to Exhibit 10.65 of
PIMCO Advisors Holdings L.P.'s Registration Statement No.
333-39585 on Form S-1)
10.14 Amended and Restated Tax Indemnity Agreement dated November 4,
1997 (Incorporated by reference to Exhibit 10.66 of PIMCO
Advisors Holdings L.P.'s Registration Statement No. 333-39585 on
Form S-1)
10.15 Registration Rights Agreement dated November 4, 1997
(Incorporated by reference to Exhibit 10.7 of PIMCO Advisors
L.P.'s Report on Form 8-K/A dated November 4, 1997)
10.16 Agreement and Plan of Merger dated November 4, 1997 (Oppenheimer
Capital Merger) (Incorporated by reference to Exhibit 10.68 of
PIMCO Advisors Holdings L.P.'s Registration Statement No.
333-39585 on Form S-1)
</TABLE>
II-3
<PAGE> 32
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.17 First Amendment to Agreement and Plan of Merger dated as of
November 4, 1997 (Oppenheimer Capital Merger) (Incorporated by
reference to Exhibit 10.69 of PIMCO Advisors Holdings L.P.'s
Registration Statement No. 333-39585 on Form S-1)
10.18 Amended and Restated Unit Purchase Agreement dated November 4,
1997 (Incorporated by Reference to Exhibit 10.70 of PIMCO
Advisors Holdings L.P.'s Registration Statement No. 333-39585 on
Form S-1)
10.19 Restructuring Contribution and Issuance Agreement dated December
31, 1997 (Incorporated by reference to Exhibit 10.20 of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997)
10.20 Written Action dated November 4, 1997 (Delegation to the
Management Board of PIMCO Advisors Holdings L.P.) (Incorporated
by reference to Exhibit 10.21 of Registrant's Annual Report on
Form 10-K for the year ended December 31, 1997)
10.21 Written Action dated November 28, 1997 (Delegation to the
Management Board of PIMCO Advisors L.P.) (Incorporated by
reference to Exhibit 10.22 of Registrant's Annual Report on Form
10-K for the year ended December 31, 1997)
10.22 1997 Unit Incentive Plan of PIMCO Advisors Holdings L.P. and
PIMCO Advisors L.P. (Incorporated by reference to Exhibit 10.1
of PIMCO Advisors Holdings L.P.'s Registration Statement No.
333-43201 on Form S-8)
10.23 Profit Sharing Plan for Pacific Investment Management Company
(Incorporated by reference to Exhibit 10.5 of PIMCO Advisor's
Report on Form 10-K for the fiscal year ended December 31, 1994)
10.24 Profit Sharing Plan for Columbus Circle Investors (Incorporated
by reference from Thomson Advisory Group L.P.'s Report on Form
8-K dated July 11, 1994)
10.25 PIMCO Advisors L.P. 401(k) Savings and Investment Plan
(Incorporated by reference to Exhibit 10.10 of Thomson Advisory
Group L.P.'s Report on Form 10-K for the fiscal year ended
December 31, 1991)
10.25.1 First Amendment to the PIMCO Advisors L.P. 401(k) Savings and
Investment Plan (Incorporated by reference to Exhibit 10.10(b)
of Thomson Advisory Group L.P.'s Report on Form 10-K for the
fiscal year ended December 31, 1993)
10.25.2 PIMCO Advisors L.P. 401(k) Savings and Investment Plan Submitter
Amendment (Incorporated by reference to Exhibit 10.10(c) of
Thomson Advisory Group L.P.'s Report on Form 10-K for the fiscal
year ended December 31, 1993)
10.25.3 Third Amendment to the PIMCO Advisors L.P. 401(k) Savings and
Investment Plan (Incorporated by reference to Exhibit 10.18(e)
of PIMCO Advisors L.P.'s Report on Form 10-K for the fiscal year
ended December 31, 1994)
10.25.4 Fourth Amendment to the PIMCO Advisors L.P. 401(k) Savings and
Investment Plan (Incorporated by reference to Exhibit 10.18(f)
of PIMCO Advisor L.P.'s Report on Form 10-K for the fiscal year
ended December 31, 1994)
</TABLE>
II-4
<PAGE> 33
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.26 Employment Agreement: David B. Breed (Incorporated by reference
to Exhibit 10.25 of PIMCO Advisors L.P.'s Report on Form 10-K
for the fiscal year ended December 31, 1996)
10.27 Employment Agreement: William D. Cvengros (Incorporated by
reference from Thomson Advisory Group L.P.'s Report on Form 8-K
dated July 11, 1994)
10.28 Employment Agreement: Donald A. Chiboucas (Incorporated by
reference from Thomson Advisory Group L.P.'s Report on Form 8-K
dated July 11, 1994)
10.29 Employment Agreement: William H. Gross (Incorporated by
reference to Exhibit 10.26 of PIMCO Advisors L.P.'s Report on
Form 10-K for the fiscal year ended December 31, 1996)
10.30 Employment Agreement: Brent R. Harris (Incorporated by reference
to Exhibit 10.28 of PIMCO Advisors L.P.'s Report on Form 10-K
for the fiscal year ended December 31, 1996)
10.31 Employment Agreement: William F. Podlich, III (Incorporated by
reference to Exhibit 10.31 of PIMCO Advisors L.P.'s Report on
Form 10-K for the fiscal year ended December 31, 1996)
10.32 Employment Agreement: William S. Thompson, Jr. (Incorporated by
reference to Exhibit 10.32 of PIMCO Advisors L.P.'s Report on
Form 10-K for the fiscal year ended December 31, 1996)
10.33 Employment Agreement: Benjamin L. Trosky (Incorporated by
reference to Exhibit 10.33 of PIMCO Advisors L.P.'s Report on
Form 10-K for the fiscal year ended December 31, 1996)
10.34 Form of Manager Employer Agreement (Incorporated by reference
from Thomson Advisory Group L.P.'s Report on Form 8-K dated July
11, 1994)
10.35 Office Lease dated as of February 19, 1998 by and between
California State Teachers Retirement System and Pacific
Investment Management Company (Incorporated by reference to
Exhibit 10.43 of Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997)
10.36 Lease with respect to the premises at Oppenheimer Tower
(Incorporated by reference to Registrant's Registration
Statement on Form S-3, Registration No. 33-39354)
10.37 Lease with respect to premises at 33 Maiden Lane, New York
(Incorporated by reference from exhibit 10.9 on Form 10-K of
Oppenheimer Capital, L.P. for its fiscal year ended April 30,
1994)
10.38 Lease with respect to premises at World Financial Center, Tower
B, New York (Incorporated by reference in the Annual Report on
Form 10-K of Oppenheimer Capital, L.P. for its fiscal year ended
April 30, 1993)
10.39 1998 Unit Incentive Plan of PIMCO Advisors Holdings L.P. and
PIMCO Advisors L.P. (Incorporated by reference to Exhibit 10.1
of Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998)
10.40 Executive Deferred Compensation Plan of PIMCO Advisors Holdings
L.P. and PIMCO Advisors L.P. (Incorporated by reference to
Exhibit 10.2 of Registrant's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998)
</TABLE>
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<PAGE> 34
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
10.41 Long-Term Credit Agreement dated as of May 12, 1998 among PIMCO
Advisors L.P., NationsBank, N.A., Deutsche Bank, N.A., New York
Branch, Union Bank of California, N.A., CitiBank, N.A. and the
financial institutions whose names are set forth on the
signature pages thereto (Incorporated by reference to Exhibit
10.1 of Registrant's Current Report on Form 8-K dated May 12,
1998 as filed with the Commission on May 20, 1998)
10.42 Short-Term Credit Agreement dated as of May 12, 1998 among PIMCO
Advisors L.P., NationsBank, N.A., Deutsche Bank, N.A., New York
Branch, Union Bank of California, N.A., CitiBank, N.A. and the
financial institutions whose names are set forth on the
signature pages thereto (Incorporated by reference to Exhibit
10.2 of Registrant's Current Report on Form 8-K dated May 12,
1998 as filed with the Commission on May 20, 1998)
10.43 Office Space Lease between The Irvine Company and Pacific
Investment Management Company (Incorporated by reference to
Exhibit 10.43 of Registrant's Annual Report on Form 10-K for the
year ended December 31, 1998)
10.44 Assignment and Assumption of Lease dated as of February 24, 1999
by and between UBS AG and PIMCO Advisors L.P. (Incorporated by
reference to Exhibit 10.44 of Registrant's Annual Report on Form
10-K for the year ended December 31, 1998)
10.45 Agreement of Lease between Fisher-Sixth Avenue Company and
Hawaiian-Sixth Avenue Corp. and Union Bank of Switzerland, New
York Branch (Incorporated by reference to Exhibit 10.45 of
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998)
21 Subsidiaries of Registrant (Incorporated by reference to Exhibit
21 of Registrant's Annual Report on Form 10-K for the year ended
December 31, 1998)
23.1* Consent of Kenneth M. Poovey (included as part of Exhibit 5.1)
23.2** Consent of PricewaterhouseCoopers LLP
27 Financial Data Schedule (Incorporated by reference to Exhibit 27
of Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998)
</TABLE>
(b) Financial Statement Schedules:
Schedule II. Valuation and Qualifying Accounts.
- ----------
* Previously filed.
** Filed herewith.
SCHEDULES OMITTED
Schedules not listed above are omitted because of the absence of the
conditions under which they are required or because the information required by
such omitted schedules is set forth in the financial statements or the notes
thereto.
ITEM 22. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
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<PAGE> 35
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement. Notwithstanding
the foregoing, any increase or decrease in
volume of securities offered (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high end of the
estimated maximum offering range may be
reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price
represent no more than a 20% change in the
maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of a registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus, within
one business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-7
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Newport Beach, State of
California on April 20, 1999.
PIMCO ADVISORS HOLDINGS L.P.
By: /s/ William D. Cvengros
-------------------------------------
William D. Cvengros
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ William D. Cvengros Chief Executive Officer and April 20, 1999
- ------------------------------- Management Board Member
William D. Cvengros (Principal Executive Officer)
/s/ Robert M. Fitzgerald Senior Vice President, Chief April 20, 1999
- ------------------------------- Financial Officer, Management
Robert M. Fitzgerald Board Member (Principal Financial
and Accounting Officer)
/s/ Kenneth M. Poovey Chief Operating Officer and April 20, 1999
- ------------------------------- Management Board Member
Kenneth M. Poovey
</TABLE>
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<PAGE> 37
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
23.2 Consent of PricewaterhouseCoopers LLP
</TABLE>
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<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post-Effective Amendment No. 1 to the Registration
Statement on Form S-4 (No. 333-53055) of our reports dated January 29, 1999, as
identified on the index to financial statements included as Item 8 of PIMCO
Advisors Holdings L.P.'s 1998 Annual Report on Form 10-K (Form 10-K) which
appear in such Form 10-K. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Los Angeles, California
April 20, 1999
II-10
