RULE 497(c)
FILE NO. 33-24611
FILE NO. 811-5659
HEITMAN REAL ESTATE FUND [Boxed with first word in reverse print]
ADVISOR CLASS
Heitman Securities Trust (the "Trust") is a series mutual fund which
currently consists of one investment portfolio, the Heitman Real Estate Fund
(the "Fund"). The Fund's investment objective is to obtain high total return
consistent with reasonable risk by investing primarily in equity securities of
public companies principally engaged in the real estate business. Each
investment is selected based upon a determination by the Fund's investment
manager that the anticipated total return, considering both income and potential
for capital appreciation, is high relative to the risk assumed.
The Fund offers two classes of shares. The shares offered by this
Prospectus are the Advisor Class of shares, which are available to shareholders
with a minimum initial investment of $5,000. In addition, the Fund offers by
separate Prospectus the Heitman/PRA Institutional Class of shares, which are
available for purchase in initial aggregate amounts of $250,000 or more.
This Prospectus contains a concise summary of information regarding the
Fund that a prospective investor should know before investing. Investors should
read this Prospectus carefully and retain it for future reference. Additional
information regarding the Fund is contained in a Statement of Additional
Information dated May 15, 1995, which has been filed with the Securities and
Exchange Commission. Additional copies of this Prospectus and the Statement of
Additional Information are available without charge upon request to the Trust at
the address or telephone number set forth on the outside cover of this document.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
PROSPECTUS DATED MAY 15, 1995
INVESTMENT ADVISOR DISTRIBUTOR
Heitman/PRA Securities Advisors, Inc. ACG Capital Corporation
180 North LaSalle Street, Suite 3600 1661 Tice Valley Boulevard, #200
Chicago, IL 60601 Walnut Creek, CA 94595
CUSTODIAN TRANSFER AGENT AND ADMINISTRATOR
Wilmington Trust Company Rodney Square Management Corporation
Rodney Square North Rodney Square North
1100 North Market Street 1100 North Market Street
Wilmington, DE 19890-0001 Wilmington, DE 19890-0001
TABLE OF CONTENTS
Page
----
TRANSACTION AND EXPENSE DATA 3
FINANCIAL HIGHLIGHTS 4
INVESTMENT OBJECTIVE AND POLICIES 5
RISK FACTORS 7
MANAGEMENT OF THE FUND 8
DETERMINATION OF NET ASSET VALUE 10
INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS 10
TAX STATUS 11
PURCHASE OF SHARES 11
REDEMPTIONS 15
PERFORMANCE INFORMATION 17
ADDITIONAL INFORMATION 17
TRANSACTION AND EXPENSE DATA
The following table sets forth the costs and expenses that an investor in
Advisor Class shares of the Fund will incur directly or indirectly.
SHAREHOLDER TRANSACTION EXPENSES:
- ---------------------------------
Maximum Sales Load Imposed on Purchases 4.75%
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fees None
ANNUAL FUND OPERATING EXPENSES:
- -------------------------------
(as a percentage of average daily net assets)
Management Fees .74%
12b-1 Fees(1) .25%
Other Expenses:
Shareholder Servicing Expenses .25%
Other Fees and Expenses .54%
-----
Total Other Expenses .79%
-----
Total Fund Operating Expenses 1.78%
=====
- --------------
(1) Because the 12b-1 fee is an annual fee charged against the assets of the
Fund, long-term shareholders may indirectly pay more than the economic
equivalent of the maximum front-end sales charge permitted under applicable
rules. See "Purchase of Shares - Fees and Charges" and "Purchase of Shares
- Distribution Plan."
EXAMPLE:
1 year 3 years 5 years 10 years
------ ------- ------- --------
You would pay the following
expenses on a $1,000
investment, assuming (1) 5%
annual return and (2)
redemption at the end of
each time period: $64 $99 $136 $241
All information in the Transaction and Expense Data table is based on
actual expenses and average daily net assets of the Fund for the fiscal year
ended September 30, 1994. The Example provided with the Table should not be
considered a representation of past or future expenses or performance. Actual
expenses may be more or less than those shown. For further information on sales
charges and shareholder servicing fees, see "Purchase of Shares - Fees and
Charges"; for further information on 12b-1 fees, see "Purchase of Shares - Fees
and Charges" and "Purchase of Shares - Distribution Plan"; and for further
information on management fees, see "Management of the Fund."
Currently, the Fund is authorized to issue two classes of shares, the
Heitman/PRA Institutional Class (the "Institutional Class") and the Advisor
Class. Institutional Class shares are available in initial aggregate amounts of
$250,000 or more. Because the sales charges and expenses vary between the
classes, performance will vary with respect to each class. Additional
information concerning the Advisor Class may be obtained by calling toll-free
1-800-888-REIT.
FINANCIAL HIGHLIGHTS
The following table of financial highlights has been audited by Arthur
Andersen LLP, the Fund's independent public accountants as indicated in their
report dated February 17, 1995 on the Fund's financial statements as of
December 31, 1994. This table should be read in conjunction with the Fund's
financial statements and notes thereto which are found in the Statement of
Additional Information under "Financial Statements." Shares of the Fund had no
class designations until May 15, 1995, when designations were assigned based on
the pricing, Rule 12b-1 fees and shareholder servicing fees applicable to shares
sold thereafter. The financial data below only cover periods prior to the
adoption of class designations and thus do not reflect Rule 12b-1 fees of 0.25%
per year and the shareholder servicing fees of 0.25% per year applicable to the
Advisor Class shares, which will adversely affect performance results for
periods after May 15, 1995. For further information about the performance of
the Fund, see the Fund's Annual Report, which may be obtained without charge by
contacting the Fund's Administrator.
<TABLE>
<CAPTION>
Institutional Class
-------------------
For the Period
For the Three-Month January 4, 1989
Period Ended (Effective Date) to
December 31, For the Fiscal Years Ended September 30, September 30,
-------------------------------------------------------
1994 1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, Beginning
of Period $ 9.23 $10.95 $ 8.29 $ 7.66 $ 6.99 $10.25 $10.00
------ ------ ------ ------ ------ ------ ------
Income From Investment
Operations
Net Investment Income 0.10 <F2> 0.32 <F2> 0.40 0.45 0.49 0.64 0.40 <F4>
Net Gains or (Losses) on
Securities (realized
and unrealized) (0.05) (0.92) 2.67 0.63 0.67 (3.16) 0.25
------ ------ ------ ------ ------ ------ ------
Total From Investment
Operations 0.05 (0.60) 3.07 1.08 1.16 (2.52) 0.65
------ ------ ------ ------ ------ ------ ------
Distributions
From Net Investment
Income (0.10) <F2> (0.31) <F2> (0.41) (0.45) (0.49) (0.64) (0.40)
From Net Realized Gain
on Investments (0.77) (0.67) 0.00 0.00 0.00 (0.10) 0.00
From Tax Return of
Capital. (0.11) <F3> (0.14) <F3> 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------ ------ ------
Total Distributions (0.98) (1.12) (0.41) (0.45) (0.49) (0.74) (0.40)
Net Asset Value, End of
Period $ 8.30 $ 9.23 $10.95 $ 8.29 $ 7.66 $ 6.99 $10.25
====== ====== ====== ====== ====== ====== ======
Total Return 0.65% <F5> (5.22%) 37.76% 14.49% 19.56% (26.11%) 4.82% <F5>
Ratios/Supplemental Data
Net Assets, End of Period
(in 000's) $105,569 $116,268 $141,672 $ 66,521 $ 54,880 $ 18,481 $ 23,174
Ratio of Expenses to
Average Net Assets 1.28% <F1> 1.22% 1.24% 1.37% 1.25% 1.54% 0.90% <F4>
Ratio of Net Income to
Average Net Assets 4.35% <F1><F2> 2.87% <F2> 4.37% 5.75% 7.36% 7.25% 3.88%
Portfolio Turnover 37.55% <F1> 90.11% 61.47% 28.05% 16.24% 24.98% 12.96%
- --------------------
<FN>
<F1>
Annualized.
<F2>
Dividend receipts from REIT investments generally may include a return of
capital. For financial reporting purposes, through September 30, 1993, the Fund
recorded all dividend receipts, including the returns of capital as net
investment income. As more fully explained in Note 2 to the Financial
Statements, the Fund changed its dividend recognition policy for the fiscal year
ended September 30, 1994. The financial highlights for the period ended
September 30, 1989 and for the years ended September 30, 1990 through 1993 have
not been restated to conform to the 1994 presentation.
<F3>
Historically, the Fund has distributed to its shareholders amounts approximating
dividends received from the REITs. As more fully explained in Note 2 to the
Financial Statements, the Fund for fiscal year ended September 30, 1994, adopted
a recently released accounting pronouncement affecting the presentation of
distributions to shareholders. The financial highlights for the period ended
September 30, 1989 and for the years ended September 30, 1990 through 1993 have
not been restated to conform to the 1994 presentation.
<F4>
The Investment Manager has reimbursed the Fund for certain expenses during the
period from the effective date until investment operations commenced. The ratio
of expenses to average net assets for the period January 4, 1989 to September
30, 1989 would otherwise have been 1.00%.
<F5>
The total return figure for the periods ended September 30, 1989 and December
31, 1994 have not been annualized.
</FN>
</TABLE>
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT OBJECTIVE
The Fund's investment objective is to obtain high total return consistent
with reasonable risk by investing primarily in equity securities of public
companies principally engaged in the real estate business. Each investment will
be selected based upon a determination by Heitman/PRA Securities Advisors, Inc.
("Heitman/PRA Advisors" or the "Investment Manager") that the anticipated total
return, considering both income and potential for capital appreciation, is high
relative to the risk assumed. There can be no assurance that the Fund will
achieve its objective and the Fund may not achieve as high a total return as
other investment companies that invest in a broader universe of securities. The
Fund's investment objective is a fundamental policy of the Fund and may be
changed only by the affirmative vote of the holders of a majority of the Fund's
shares.
INVESTMENT POLICIES
The Fund seeks to achieve its objective by investing in equity securities
of public companies principally engaged in the real estate business. A company
is "principally engaged" in the real estate business if at least 50% of the fair
market value of its assets, as determined by the Investment Manager, consists of
interests in, or at least 50% of its gross income or net profits are derived
from the ownership, construction, management, financing or sale of, residential,
commercial, or industrial real estate. Equity securities in which the Fund may
invest are limited to common and preferred stocks, convertible bonds and
convertible preferred stocks and warrants. All equity securities in which the
Fund invests will be listed on a U.S. national securities exchange or traded in
the over-the-counter market.
Total return is composed of current income and capital appreciation. Under
normal circumstances, the Fund will seek to maintain a balanced portfolio of
securities which are income producing and securities which offer potential for
capital appreciation.
Under normal conditions at least 65% of the Fund's assets will be invested
in the equity securities of companies, a majority of whose assets are
represented by the ownership of real property, including leasehold interests.
Such companies may include equity, mortgage and hybrid real estate investment
trusts ("REITs") and other companies with substantial real estate holdings.
Although not an investment policy of the Fund, it is anticipated that under
normal circumstances approximately 60% to 90% of the Fund's assets will be
invested in REITs and that a majority of the Fund's REIT investments will
consist of equity securities of equity and hybrid REITs.
The Fund may invest up to 35% of its total assets in equity securities of
companies not principally engaged in the real estate business (as defined above)
but nonetheless engaged in businesses related thereto. These companies may
include manufacturers and distributors of building supplies, financial
institutions which make or service mortgages, and companies whose real estate
assets are substantial relative to the companies' stock market valuations, such
as retailers, railroads and paper and forest products companies.
REAL ESTATE INVESTMENT TRUSTS
A REIT is a corporation or business trust (that would otherwise be taxed as
a corporation) which meets the definitional requirements of the Internal Revenue
Code of 1986, as amended (the "Code"). The Code permits a qualifying REIT to
deduct the dividends paid, thereby effectively eliminating corporate level
federal income tax and making the REIT a pass-through vehicle for federal income
tax purposes. To meet the definitional requirements of the Code, a REIT must,
among other things: invest substantially all of its assets in interests in real
estate (including mortgages and other REITs), cash and government securities;
derive most of its income from rents from real property or interest on loans
secured by mortgages on real property; and distribute annually 95% or more of
its otherwise taxable income to shareholders.
REITs are sometimes informally characterized as equity REITs, mortgage
REITs and hybrid REITs. An equity REIT invests primarily in the fee ownership
or leasehold ownership of land and buildings; a mortgage REIT invests primarily
in mortgages on real property, which may secure construction, development or
long-term loans; and a hybrid REIT invests in both real estate equities and
mortgages.
SHORT-TERM CASH MANAGEMENT AND TEMPORARY DEFENSIVE POLICIES
For liquidity or temporary defensive purposes, the Fund may invest in money
market mutual funds and in the following short-term debt securities (securities
with remaining maturities of less than one year): high grade corporate debt
securities, including commercial paper, notes, bonds and debentures;
certificates of deposit, bankers' acceptances and time deposits; debt
obligations of the U.S. Government including U.S. Treasury bills, bonds and
notes and obligations issued or guaranteed as to principal and interest by the
U.S. Government, its agencies and instrumentalities; and repurchase agreements
that are fully collateralized by U.S. Government obligations, including
repurchase agreements that mature in more than seven days. The Fund may invest
up to 10% of its assets in such short-term securities on a regular basis to
maintain liquidity for purposes of redeeming shares and meeting other cash
obligations of the Fund. When the Investment Manager believes that financial
conditions warrant, it may invest all or any portion of the Fund's assets in
such securities for temporary defensive purposes. The Fund may not invest more
than 25% of its assets in securities or obligations issued by banks. When the
assets of the Fund are invested in short-term securities, the Fund will not be
invested in a manner consistent with achieving its investment objective.
Repurchase agreements involve transactions by which an investor (such as
the Fund) purchases a security and simultaneously obtains the commitment of the
seller (a bank or broker-dealer) to repurchase the security at an agreed-upon
price on an agreed-upon date within a number of days (usually not more than
seven) from the date of purchase. The Fund may enter into repurchase agreements
with banks or primary dealers of U.S. Government securities, provided the Fund's
custodian always has possession of the securities serving as collateral whose
market value at least equals the amount of the institution's repurchase
obligation. The resale price reflects the purchase price plus an agreed-upon
market rate of interest which is unrelated to the coupon rate or maturity of the
purchased security. A repurchase transaction involves the obligation of the
seller to pay the agreed-upon price, which obligation is in effect secured by
the value of the underlying security. The holder of a repurchase agreement
bears the risk that the issuer thereof will be unable to meet its repurchase
obligation when due; however, since the repurchase agreement is in effect fully
collateralized by the underlying security, the risk of loss on such an
instrument is minimal. Repurchase agreements may also be viewed as loans made
by the Fund which are collateralized by the securities subject to repurchase.
In the event of a bankruptcy or other default by the seller of a repurchase
agreement, the Fund could experience both delays in liquidating the underlying
security and could experience losses, including: (i) the possible decline in
the value of the underlying security during the period while the Fund seeks to
enforce its rights thereto; (ii) possible subnormal levels of income and lack of
access to income during this period; and (iii) expenses of enforcing its rights.
COMPANIES WITH LIMITED OPERATING HISTORIES
The Fund's portfolio may include securities of companies which have limited
operating histories and may not yet be profitable. The investments in such
companies offer opportunities for capital gains, but entail significant risks
including, but not limited to, the volatility of the stock price and the
viability of the firms' operations. The Fund will not invest in companies which
together with predecessors have operating histories of less than three (3) years
if immediately thereafter and as a result of such investment the value of the
Fund's holdings of such securities (other than securities of REITs) exceeds 5%
of the value of the Fund's total assets. Although not an investment policy of
the Fund, it is anticipated that under normal circumstances, approximately 10%
to 15% of the REITs in which the Fund invests will have operating histories of
less than three years.
BORROWING
The Fund is authorized to borrow an amount not to exceed 33% of the value
of its total assets (including the amount borrowed) for temporary administrative
purposes, and to pledge all or any portion of its assets in connection with such
borrowings. Such borrowings may be used for ongoing cash needs of the Fund
including the payment of redemptions, dividends and other administrative and
operating expenses. The Fund may not borrow for the purpose of leveraging its
investment portfolio. The Fund may not purchase additional securities while
outstanding borrowings exceed 5% of the value of its total assets.
PORTFOLIO TURNOVER
The Fund does not intend to use short-term trading as a primary means of
achieving its investment objective. The Fund, however, does expect to engage in
portfolio trading when considered appropriate. Although the Fund cannot
accurately predict its annual portfolio turnover rate, it is not expected to
exceed 75%. A 75% turnover rate would occur, for example, if the lesser of the
value of purchases or sales of portfolio securities for a year (excluding all
securities whose maturities at acquisition were one year or less) were equal to
75% of the average monthly value of the securities held by the Fund during such
year. Higher portfolio turnover rates will increase aggregate brokerage
commission expenses which must be borne directly by the Fund and ultimately by
the Fund's shareholders.
LENDING OF PORTFOLIO SECURITIES
From time to time, the Fund may lend portfolio securities to broker-dealers
for the purpose of realizing additional income. The total amount of all such
loans outstanding will not exceed 33% of the Fund's total assets. Loans of
portfolio securities will be collateralized by cash, letters of credit or
securities issued or guaranteed by the U.S. Government or its agencies which
will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. Although each loan transaction
must be fully collateralized at all times, it will involve some risk to the Fund
if the party borrowing the securities should default on its obligation and the
Fund is delayed in or prevented from recovering the collateral. Securities
loaned by the Fund will remain subject to fluctuations of market value.
RISK FACTORS
The Fund is not intended to constitute a complete investment program.
Under normal circumstances, at least 65% of the Fund's assets will be invested
in the equity securities of companies principally engaged in the real estate
industry. Because the Fund will be concentrated in this industry, the Fund may
be subject to the risks associated with the direct ownership of real estate.
For example, real estate values may fluctuate as a result of general and local
economic conditions, overbuilding and increased competition, increases in
property taxes and operating expenses, changes in zoning laws, casualty or
condemnation losses, regulatory limitations on rents, changes in neighborhood
values, changes in the appeal of properties to tenants, and increases in
interest rates. The value of securities of companies which service the real
estate business sector may also be affected by such risks. Thus, the value of
the Fund's shares may change at different rates compared to the value of shares
of a mutual fund with investments in many industries.
Because the Fund may invest a substantial portion of its assets in REITs,
the Fund may also be subject to certain risks associated with direct investments
in REITs. REITs may be affected by changes in the value of their underlying
properties and by defaults by borrowers or tenants. Furthermore, REITs are
dependent upon specialized management skills, have limited diversification and
are, therefore, subject to risks inherent in financing a limited number of
projects. REITs depend generally on their ability to generate cash flow to make
distributions to shareholders, and certain REITs have self-liquidation
provisions by which mortgages held may be paid in full and distributions of
capital returns may be made at any time. In addition, the performance of a REIT
may be affected by its failure to qualify for tax-free pass-through of income
under the Code or its failure to maintain exemption from registration under the
Investment Company Act of 1940 (the "1940 Act").
Although an investment in the Fund is not without risk, the Fund follows
certain polices in managing its investments which may help to reduce these
risks. Set forth below are the more significant investment restrictions:
1.The Fund may not purchase a security if, as a result: (a) with respect to
75% of its total assets, (i) more than 5% of its total assets would be
invested in the securities of any single issuer or (ii) the Fund would own
more than 10% of the voting securities of any single issuer; and (b) more
than 5% of its net assets would be invested in the securities of companies
(other than REITs) which together with their predecessors have been in
continuous operation for less than three years. These limitations do not
apply to investments in U.S. Government securities.
2.The Fund may borrow money solely for temporary administrative purposes but
not in an amount exceeding 33% of its total assets (including the amount
borrowed). The Fund may not borrow for the purpose of leveraging its
investment portfolio. The Fund may not purchase additional securities
while outstanding borrowings exceed 5% of the value of its assets.
3.The Fund may temporarily lend its portfolio securities to broker-dealers
but only when the loans are fully collateralized. The Fund will limit
these loans to 33% of its total assets.
4.The Fund may not invest more than 10% of its net assets in illiquid
securities, including securities restricted as to resale, repurchase
agreements extending for more than seven days and other securities which
are not readily marketable.
These investment restrictions may not be changed without shareholder
approval, except that the restriction in paragraph 1(b) may be changed by the
Board without shareholder approval. For a complete listing of the Fund's
fundamental investment restrictions, see the section entitled "Additional
Information Regarding Investment Policies and Limitations" in the Statement of
Additional Information.
MANAGEMENT OF THE FUND
The Board of Trustees is responsible for the overall supervision of the
business and affairs of the Fund and has approved contracts with certain
organizations to provide day-to-day management of the Fund.
The Fund has entered into an Investment Management Agreement with
Heitman/PRA Advisors to furnish investment services to the Fund. The Investment
Management Agreement was approved by the Fund's shareholders on January 23,
1995. The Investment Manager directs the investments of the Fund in accordance
with the Fund's investment objective and policies subject to supervision by the
Board of Trustees. Specifically, the Investment Manager is responsible for
performing the following services: (a) furnishing continuously an investment
program for the Fund and (b) determining which investments should be purchased,
held, sold or exchanged by the Fund and what portion, if any, of the Fund's
assets should be held uninvested. In connection with the management of the
investment and reinvestment of the Fund's assets, the Investment Manager is
authorized to select brokers or dealers to execute purchase and sale
transactions for the Fund. In addition, the Investment Manager manages,
supervises and conducts such other affairs and business of the Fund as the Trust
and the Investment Manager may determine from time to time. For these services,
the Fund pays Heitman/PRA Advisors a fee, calculated daily and paid monthly in
arrears, at the annual rate of 0.75% of the Fund's first $100 million of average
daily net assets and 0.65% of the average daily net assets of the Fund in excess
of $100 million. The Investment Manager has agreed that if the total expenses
of the Fund (exclusive of interest, taxes, brokerage expenses and extraordinary
items) for any fiscal year of the Fund exceed (i) 1.75% of the first $50 million
of the Fund's average net assets, or (ii) 1.50% of the Fund's average net assets
in excess of $50 million, the Investment Manager will pay or reimburse the Fund
for that excess up to the amount of its advisory fee payable with respect to the
Fund during that fiscal year. As required by the State of California,
Heitman/PRA Advisors has agreed to exclude all assets of the Fund which are
invested in shares of any money market mutual fund for purposes of calculating
its advisory fee. The fee paid by the Fund, although higher than the investment
advisory fees paid by most other mutual funds, is comparable to the fees paid
for similar services by many funds with similar investment objectives and
policies.
Heitman/PRA Advisors is a corporation organized on November 14, 1994 under
the laws of Illinois to provide investment advice and discretionary management
primarily with respect to investment in publicly traded securities of issuers
principally engaged in the real estate business. Michael T. Oliver, President
of the Trust and Dean A. Sotter, Vice President and Chief Financial Officer of
the Trust are primarily responsible for monitoring the day-to-day investment
activity of the Fund. Messrs. Oliver and Sotter have extensive experience in
direct real estate analysis, securities research and portfolio management of
publicly traded real estate securities. For additional biographical information
with respect to Messrs. Oliver and Sotter and additional personnel of
Heitman/PRA Advisors who are also officers of the Trust, see the section
entitled "Management of the Trust" in the Statement of Additional Information.
The address of Heitman/PRA Advisors is 180 North LaSalle Street, Suite 3600,
Chicago, Illinois 60601.
Heitman/PRA Advisors is a wholly owned subsidiary of Heitman Financial Ltd.
("Heitman") which is a wholly owned subsidiary of United Asset Management
Corporation ("UAM"). Affiliates of Heitman and UAM serve as investment advisers
and managers to funds, other collective investment vehicles and separate
accounts established for investment in real estate by pension and profit sharing
trusts, corporations, endowments, foundations and other tax-exempt institutional
investors. As of December 31, 1994, affiliates of Heitman and UAM had gross
assets under management totaling over $104 billion.
Since its inception in 1989 through November, 1994, the Fund was advised by
PRA Securities Advisors, L.P. The general partner of PRA Securities Advisors,
L.P. was JMB Institutional Securities Corporation whose assets were acquired by
Heitman in December, 1994.
From time to time, Heitman/PRA Advisors may, without prior notice to
shareholders, voluntarily waive all or a portion of its fees payable by the
Fund. This would have the effect of lowering the overall expense ratio of the
Fund, and of increasing the yield or return to investors while the fee waiver is
in effect. Any such waiver in effect from time to time may be terminated
without prior notice to shareholders.
The Fund has also entered into contracts with Rodney Square Management
Corporation ("Rodney Square"), Rodney Square North, 1100 North Market Street,
Wilmington, DE 19890-0001, and ACG Capital Corporation ("ACG" or the
"Distributor"), 1661 Tice Valley Boulevard, #200, Walnut Creek, CA 94595,
pursuant to which Rodney Square provides administrative, accounting and transfer
agency services to the Fund and ACG provides distribution services to the Fund.
Rodney Square is a wholly owned subsidiary of Wilmington Trust Company ("WTC"),
a Delaware-chartered banking institution and the Trust's Custodian. For
administrative services the Advisor Class pays Rodney Square a fee, calculated
daily and paid monthly in arrears, at the annual rate of .10% of the Class'
average daily net assets, subject to a minimum fee of $25,000 per annum. For
accounting services the Advisor Class pays Rodney Square a fee calculated daily
and paid monthly in arrears, at the annual rate of .02% of the Class' average
daily net assets, subject to a minimum fee of $25,000 per annum.
Among the services provided by Rodney Square are the following: the
coordination and monitoring of any third parties furnishing services to the
Fund; providing the necessary office space, equipment and personnel to perform
administrative and clerical functions for the Fund; preparing, filing and
distributing proxy materials and periodic reports to shareholders; preparation
and filing of registration statements and other documents or reports required by
federal, state and other laws; preparation and maintenance of financial records
of the Fund; and determination of net asset values and dividends for the Fund.
DETERMINATION OF NET ASSET VALUE
The net asset value per share of the Fund's shares is determined by
dividing the current value of the Fund's assets, less its liabilities, by the
number of outstanding shares of the Fund. The Fund calculates net asset value
as of the close of regular trading hours of each business day the New York Stock
Exchange (the "NYSE") is open. The NYSE is currently closed on the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
Generally, the Fund's investments are valued at market value or, in the
absence of a market value, in such manner as the Trustees in good faith deem
appropriate to reflect the investment's fair value. In determining fair value,
the Trustees may employ an independent pricing service. For further information
concerning the Fund's procedures for valuing its assets, see the section
entitled "Valuation of Shares" in the Statement of Additional Information.
INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
It is the policy of the Fund to declare and distribute dividends consisting
of substantially all of the Fund's net investment income quarterly and to
declare and distribute dividends of net short-term capital gains, if any,
annually. Net capital gains (the excess of net long-term capital gains over net
short-term capital losses) will be declared and distributed annually. The Fund
intends to make such additional distributions as deemed to be necessary to avoid
the imposition of any federal excise tax. The Fund has historically and intends
to make distributions which represent return of capital to its shareholders.
Any income, dividend or capital gains distribution paid shortly after a
purchase of shares will reduce the net asset value per share of the Fund by the
amount of the distribution and such distributions are subject to taxes.
Dividends and distributions will be automatically reinvested in additional
shares of the Fund, without charge, at net asset value, unless the shareholder
chooses one of the following options:
o Automatic reinvestment of dividends in shares of the Fund, and payment
of capital gains distributions in cash;
o Automatic reinvestment of capital gains distributions in shares of the
Fund, and payment of dividends in cash; or
o All dividends and capital gains distributions paid in cash.
Options for the receipt of dividends and distributions may be changed at
any time by writing to the Trust, c/o Rodney Square Management Corporation, P.O.
Box 8987, Wilmington, DE 19899-9752.
Checks which are sent to shareholders who have requested dividends and/or
capital gains distributions to be paid in cash and which are subsequently
returned by the United States Postal Service as not deliverable or which remain
uncashed for six months or more will be invested in the shareholder's account at
the then current net asset value. Further, subsequent dividends and
distributions will be automatically reinvested in the shareholder's account.
TAX STATUS
The Fund intends to continue to qualify and elect to be treated each
taxable year as a "regulated investment company" under subchapter M of the Code.
Accordingly, the Fund will not be liable for federal income taxes to the extent
its net investment income and capital gains net income (excess of capital gains
over capital losses) are distributed to shareholders, provided that at least 90%
of its net investment income and net short-term capital gains for the taxable
year are distributed. Dividends from net investment income and distributions of
net short-term capital gains are taxable to shareholders as ordinary income for
federal income tax purposes, whether received in cash or invested in additional
shares of the Fund. Distributions of net capital gains are taxable to
shareholders as long-term capital gains, whether paid in cash or reinvested in
additional shares, and regardless of the length of time the investor has held
his shares of the Fund.
A small portion of the dividends paid by the Fund to corporate shareholders
may qualify for the 70% dividends received deduction available to corporations;
dividends that are attributable to distributions made by a REIT to the Fund will
not qualify. Capital gains distributions paid by the Fund do not qualify for
this deduction. The Fund will notify shareholders each year of the amount of
the dividends qualifying for such deduction.
The Fund is subject to a nondeductible 4% excise tax calculated as a
percentage of certain undistributed amounts of taxable ordinary income and
capital gain net income. The Fund intends to make such additional distributions
of taxable ordinary income and capital gain net income as may be necessary to
avoid this excise tax.
The distributions received by the Fund from its investments may, for
federal income tax purposes, consist of ordinary income, long-term capital
gains, or a return of capital. The characterization of these distributions to
the Fund may, in turn, affect the tax treatment of the Fund's distributions to
its shareholders. Statements as to the tax status of each shareholder's
dividends and distributions are mailed annually by the Fund. Shareholders may
wish to consult their tax advisers about any state and local taxes that may
apply to payments received and, in particular, to determine whether dividends
paid by the Fund that represent interest derived from U.S. Government securities
are exempt from any applicable state or local income taxes.
Shareholders of the Fund should also be aware that, because the share price
of the Fund will fluctuate, redemptions of shares of the Fund will generally
result in the realization of capital gains or losses.
PURCHASE OF SHARES
Advisor Class shares are available only to investors purchasing directly
from the Distributor or through securities brokers who have entered into sales
agreements with the Distributor ("Authorized Brokers") and registered investment
advisers and other service organizations that have entered into shareholder
servicing agreements with the Fund ("Servicing Organizations").
The Trust and the Distributor each reserve the right to reject any purchase
order and to suspend the offering of shares of the Fund. The minimum initial
investment is $5,000. Subsequent investments will be accepted in any amount.
The Trust reserves the right to vary the initial investment minimum and
institute minimums for additional investments at any time.
At the discretion of the Trust, investors may be permitted to purchase
shares by transferring securities to the Fund that: (i) meet the Fund's
investment objectives and policies; (ii) are acquired for investment and not for
resale; (iii) are liquid securities which are not restricted as to transfer
either by law or liquidity of market; and (iv) have a value which is readily
ascertainable (and not established only by evaluation procedures) as evidenced
by a listing on the American Stock Exchange, the NYSE or NASDAQ. Securities
transferred to the Fund will be valued in accordance with the same procedures
used to determine the Fund's net asset value.
Shares of the Fund may be purchased at the offering price, which is the per
share net asset value plus the applicable sales charge, next determined after
the order is received by the Distributor or Transfer Agent, as described below.
The Fund determines its net asset value per share as of the close of regular
trading hours on the NYSE (currently 4:00 p.m., New York time). See
"Determination of Net Asset Value." Each Authorized Broker and Servicing
Organization is responsible for transmitting the order promptly to the
Distributor or Transfer Agent to permit the investor to obtain the current
price.
Purchases may be made in one of the following ways:
PURCHASES BY MAIL
Initial investments in the Fund may be made through an Authorized Broker or
Service Organization by having the Authorized Broker or Service Organization
mail or deliver a completed Application (accompanying this Prospectus), together
with a check for the total purchase price payable to the Fund, to the address
set forth below. Initial investments may also be made directly from the
Distributor by completing the Application and mailing it, together with a check
made payable to the Fund, to:
ACG Capital Corporation
c/o Rodney Square Management Corporation
P.O. Box 8987
Wilmington, DE 19899-9752
Subsequent investments in an existing account in the Fund may be made at
any time and in any amount through an Authorized Broker or Service Organization,
or by sending a check payable to the Fund at the above address using the deposit
slip found at the bottom of each shareholder statement or along with a letter
stating the amount of the investment and the name of the account for which the
investment is to be made.
Purchases by Wire
To order shares for purchase by wire, the Transfer Agent must first be
notified by calling (800) 435-1405. Following notification to the Transfer
Agent, federal funds and registration instructions should be wired through the
Federal Reserve System to:
Wilmington Trust Company
ABA # 0311-0009-2
DDA # 2629-5416
Further credit to Heitman Real Estate Fund - Advisor Class Shares
Further credit (Shareholder's Name)
Fund Account Number
All investors making initial investments by wire must promptly complete the
Application accompanying this Prospectus and deliver it to the investor's
Authorized Broker or Service Organization or the Distributor. Redemptions will
not be processed until the Application has been received by the Trust or its
agent.
INDIVIDUAL RETIREMENT ACCOUNTS
Shares of the Fund may be purchased for tax-deferred retirement plans such
as individual retirement accounts ("IRAs"). Application forms and brochures
describing investments for IRAs can be obtained from the Transfer Agent by
calling (800) 435-1405. WTC makes available its services as an IRA custodian
for each shareholder account that is established as an IRA. For these services,
WTC receives an annual fee of $10.00 per account, which fee is paid directly to
WTC by the IRA shareholder. If the fee is not paid by the date due, shares of
the Fund owned by the IRA will be redeemed automatically for purposes of making
the payment.
FEES AND CHARGES
SALES CHARGES. The purchase price of an Advisor Class share of the Fund is
the Fund's per share net asset value after the purchase order is duly received,
as defined herein, plus a sales charge that varies depending on the dollar
amount of the shares purchased as set forth below. A major portion of this
sales charge is reallowed by the Distributor to the Authorized Broker
responsible for the sale.
Dollar Amount Sales Charge Paid Sales Charge Paid Dealer
of Purchase by Investors As % by Investor As % Concession As %
Transaction of Purchase Price of Net Asset Value of Purchase Price
------------- ----------------- ------------------ -----------------
Less than $100,000 4.75 4.99 4.00
$100,000 or above but
less than $250,000 4.00 4.17 3.50
$250,000 or above but
less than $500,000 3.00 3.09 2.50
$500,000 or above but
less than $1 million 2.00 2.04 1.75
$1 million and above 1.00 1.01 .75
The reduced charges described above are applicable to purchases of $100,000
or more made at any one time by groups of "related investors" such as immediate
family members. See the Statement of Additional Information for more complete
information concerning related investors.
At the discretion of ACG, the entire sales charge may at times be reallowed
to dealers. During periods when 90% or more of the sales charge is reallowed,
such dealers may be deemed to be underwriters as that term is defined in the
Securities Act of 1933. ACG or its affiliates, at their expense, may also
provide additional compensation to dealers in connection with sales of Advisor
Class shares of the Fund. Compensation may include financial assistance to
dealers in connection with conferences, sales or training programs for their
employees, seminars for the public, advertising, sales campaigns and/or
shareholder services and programs regarding the Fund and other dealer-sponsored
programs or events. In some instances, this compensation may be made available
only to certain dealers whose representatives have sold or are expected to sell
significant amounts of such Advisor Class shares. Compensation may include
payment for travel expenses, including lodging, incurred in connection with
trips taken by invited registered representatives and members of their families
to locations within or outside of the United States for meetings or seminars of
a business nature. Details relating to any special reallowance or compensation
arrangements between the Distributor and any broker or dealer are set forth in
the Statement of Additional Information. Dealers may not use sales of the
Fund's shares to qualify for this compensation to the extent such may be
prohibited by the laws of any state or any self-regulatory agency, such as the
National Association of Securities Dealers, Inc. (the "NASD"). None of the
aforementioned additional compensation is paid for by the Fund or its
shareholders.
LETTER OF INTENT. Investors may purchase shares of the Fund at reduced
sales charges by executing a Letter of Intent to purchase no less than an
aggregate of $100,000 of shares of the Fund within a 13-month period. The
investor will be charged the sales charge applicable to each purchase made
pursuant to a Letter of Intent as if the total dollar amount set forth in the
Letter of Intent were being bought in a single transaction. Purchases made
within a 90-day period prior to the execution of a Letter of Intent may be
included therein; in such case the date of the earliest of such purchases marks
the commencement of the 13-month period.
An investor may include toward completion of a Letter of Intent the current
value of all of the investor's shares of the Fund held of record as of the date
of the Letter of Intent, plus the current value as of such date of all of such
shares held by any "related person" as eligible to join with the investor in a
single purchase.
A Letter of Intent does not bind the investor to purchase the specified
amount. Shares equivalent to 2% of the specified amount will, however, be taken
from the initial purchase (or, if necessary, subsequent purchases) and held in
escrow in the investor's account as collateral against the higher sales charge
which would apply if the total purchase is not completed within the allotted
time. The escrowed shares will be released when the aggregate purchase
specified under the Letter of Intent is completed, or if it is not completed,
when the balance of the higher sales charge is, upon notice, remitted by the
investor. All dividends and capital gains distributions with respect to the
escrowed shares will be credited to the investor's account.
SPECIAL PROGRAMS
Advisor Class shares also may be purchased without a sales charge by:
registered investment advisers exercising discretionary investment authority
with respect to the purchase of Fund shares; accounts of Service Organizations
that charge account management fees; registered representatives and employees
(and their spouses and minor children) of any Authorized Broker or Service
Organization; trust departments of financial institutions; other investment
companies in connection with the sale to the Fund of cash and securities owned
by such other investment companies; separate accounts established and maintained
by an insurance company that are exempt from registration under Section 3(c)(11)
of the 1940 Act; members of organizations that make recommendations to or permit
group solicitations in connection with the purchase of shares of the Fund; and
"eligible employee benefit plans" of employers who have at least 2,000 U.S.
employees to whom such a plan is made available and, regardless of the number of
employees, if such plan is established and maintained by any Authorized Broker
or Service Organization. An "eligible employee benefit plan" means any plan or
arrangement, whether or not tax qualified, which provides for the purchase of
Fund shares. Sales of shares to such plans must be made in connection with a
payroll deduction system of plan funding or other system acceptable to the
Distributor.
Purchases may also be made at net asset value, without a sales charge,
provided that such purchases are placed through a Service Organization that
maintains an omnibus account with the Fund and such purchases are made by the
following:
o investment advisers or financial planners who place trades for their own
accounts or the accounts of their clients and who charge a management,
consulting or other fee for their services;
o clients of such investment advisers or financial planners who place
trades for their own accounts if the accounts are linked to the master
account of such investment adviser or financial planner on the books and
records of the Service Organization; and
o retirement and deferred compensation plans and trusts used to fund those
plans, including, but not limited to, those defined in section 401(a),
403(b) or 457 of the Internal Revenue Code and "rabbi trusts."
DISTRIBUTION PLAN
The Fund has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Distribution Plan") in accordance with the regulations under the 1940 Act.
Under the provisions of the Distribution Plan, the Fund makes payments to the
Distributor at an annual rate of 0.25% of the daily net assets of Advisor Class
shares of the Fund as a distribution fee. The distribution fees are used by the
Distributor to finance activities primarily intended to result in the sale of
shares of the Fund. Payments to the Distributor under the Plan are not directly
tied to expenses and payments under the Plan may be more or less than actual
expenses incurred by the Distributor. The excess of fees received over
expenditures may constitute a "profit" to the Distributor.
An NASD rule limits the annual expenditures which the Fund may incur under
the Distribution Plan to 1%, of which 0.75% may be used to pay distribution
expenses and 0.25% may be used to pay shareholder services fees. The NASD rule
also limits the aggregate amount which the Fund may pay for such distribution
costs and initial sales charges to 6.25% of gross share sales of a class since
the inception of any asset-based sales charge plus interest at the prime rate
plus 1% on unpaid amounts thereof. Such limitation does not apply to shareholder
service fees.
SHAREHOLDER SERVICING AGREEMENT
The Fund has also adopted a Shareholder Servicing Plan. Pursuant to the
Shareholder Servicing Plan, the Trust contracts with Service Organizations to
provide a variety of shareholder services, such as maintaining shareholder
accounts and records, answering inquiries regarding the Fund, and processing
purchase and redemption orders. The Fund pays fees to Service Organizations
(which vary depending upon the services provided) in amounts up to an annual
rate of 0.25% of the daily net asset value of Advisor Class shares owned by
shareholders with whom the Service Organization has a servicing relationship.
Some Service Organizations may impose additional or different conditions on
their clients such as requiring their clients to invest more than the minimum
initial or subsequent investments specified by the Trust or charging a direct
fee for servicing. If imposed, these fees would be in addition to any amounts
which might be paid to the Service Organization by the Trust. Shareholders using
Service Organizations are urged to consult them regarding any such fees or
conditions.
REDEMPTIONS
Shareholders may redeem their shares of the Fund without charge on any day
that the Fund calculates its per share net asset value (see "Determination of
Net Asset Value"). Redemptions will be effective at the net asset value per
share next determined after the receipt by the Transfer Agent of a redemption
request meeting the requirements described below. The Fund normally sends
redemption proceeds on the next business day, but in any event redemption
proceeds are sent within seven calendar days of receipt of a redemption request
in proper form.
Except as noted below, redemption requests received in proper form by the
Transfer Agent prior to the close of regular trading hours on the NYSE
(currently 4:00 p.m., New York time) on any business day that the Fund
calculates its per share net asset value are effective that day and the shares
redeemed earn dividends declared through the day of redemption.
Redemption requests received after the close of the NYSE are effective as
of the time the net asset value per share is next determined. NO REDEMPTION
WILL BE PROCESSED UNTIL THE TRANSFER AGENT HAS RECEIVED A COMPLETED APPLICATION
WITH RESPECT TO THE ACCOUNT.
The Fund will satisfy redemption requests in cash to the fullest extent
feasible, so long as such payments would not, in the opinion of the Investment
Manager or the Trustees, result in the necessity of the Fund selling assets
under disadvantageous conditions and to the detriment of the remaining
shareholders of the Fund. The Fund may distribute Fund assets in-kind in
satisfaction or partial satisfaction of the amount payable on redemption of
shares in conformity with applicable Securities and Exchange Commission ("SEC")
rules and valued in the same way as they would be valued for purposes of
computing net asset value of the Fund. In the event that an in-kind
distribution is made, a shareholder may incur additional expenses, such as the
payment of brokerage commissions, on the sale or other disposition of the
securities received from the Fund. In-kind payments need not constitute a cross-
section of the Fund's portfolio. The Fund has elected, however, to be governed
by Rule 18f-1 under the 1940 Act, as a result of which the Fund is obligated to
redeem shares solely in cash if the redemption requests are made by one
shareholder account up to the lesser of $250,000 or 1% of the net assets of the
applicable Portfolio during any 90-day period. This election is irrevocable
unless the SEC permits its withdrawal.
The Fund reserves the right, if conditions exist which make cash payments
undesirable, to honor any request for redemption, whose value exceeds $250,000,
by making payment in whole or in part with readily marketable securities chosen
by the Fund and valued in the same way as they would be valued for purposes of
computing the net asset value of the applicable Portfolio. If payment is made
in securities, a shareholder may incur transaction expenses in converting these
securities into cash.
Redemption proceeds in cash or in-kind will be remitted to a redeeming
shareholder by check payable, or securities transferred, only to the redeeming
shareholder or such shareholder's designated representative and only to the
shareholder's address, or that of the shareholder's designated representative,
on the books of the Fund. A shareholder may request that redemption proceeds be
wired directly to the shareholder's account at any commercial bank in the United
States. The redemption proceeds must be paid to the same bank and account as
designated on the application or in written instructions subsequently received
by the Transfer Agent.
Shares may be redeemed in one of the following ways:
REDEMPTION BY MAIL
Shares may be redeemed by submitting a written request for redemption to
the Transfer Agent at P.O. Box 8987, Wilmington, DE 19899-9752. A redemption
request sent by overnight mail should be sent to the Transfer Agent, 1105 North
Market Street, Wilmington, DE 19801.
A written redemption request to the Transfer Agent must (i) identify the
shareholder's account name, (ii) state the number of shares to be redeemed, and
(iii) be signed by each registered owner exactly as the shares are registered.
A redemption request for any amount, if the proceeds are to be sent elsewhere
than the address of record, must be accompanied by signature guarantee(s). The
guarantor of a signature must be an eligible institution acceptable to the
Fund's Transfer Agent, such as a bank, broker, dealer, municipal securities
dealer, government securities dealer, credit union, national securities
exchange, registered securities association, clearing agency, or savings
association. The Trust may require additional supporting documents for
redemptions made by corporations, executors, administrators, trustees and
guardians. A redemption request will not be deemed to be properly received
until the Transfer Agent receives all required documents in proper form.
Questions with respect to the proper form for redemption requests should be
directed to the Transfer Agent at (800) 435-1405.
REDEMPTION BY TELEPHONE
Shareholders who have so indicated on the Application, or have subsequently
arranged in writing to do so, may redeem shares by instructing the Transfer
Agent by telephone. To follow up a telephone request for redemption, please
forward to the Transfer Agent a written request for redemption which includes
the required signatures of authorized persons on the account. The subsequent
written confirmation and signature guarantee of a telephone redemption may be
waived for certain broker-dealers or service organizations which have been
previously approved by the Fund.
In order to arrange for redemption by wire or telephone after an account
has been opened or to change the bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent at the
address listed above. Such requests must be signed by the shareholder, with
signatures guaranteed (see "Redemption by Mail" above for details regarding
signature guarantees). Further documentation may be requested from
corporations, executors, administrators, trustees or guardians.
The Trust reserves the right to refuse a wire or telephone redemption if it
is believed advisable to do so. Procedures for redeeming Fund shares by wire or
telephone may be modified or terminated at any time by the Trust.
REDEMPTIONS THROUGH AUTHORIZED BROKERS AND SERVICE ORGANIZATIONS
For the convenience of shareholders, the Fund has authorized the
Distributor, as its agent, to accept orders from Authorized Brokers and Service
Organizations by wire or telephone for the repurchase of shares by the
Distributor from the Authorized Broker or Service Organization. The Fund may
revoke or suspend this authorization at any time. The repurchase price is the
net asset value next determined following the time at which the shares are
offered for repurchase by the Authorized Broker or Service Organization to the
Distributor. The Authorized Broker or Service Organization is responsible for
promptly transmitting a shareholder's order to the Distributor. Payment of the
repurchase proceeds is made to the Authorized Broker or Service Organization who
placed the order. Neither the Fund nor the Distributor imposes any charge upon
such a repurchase. However, the Authorized Broker or Service Organization may
impose a charge as agent for a shareholder for the repurchase of shares.
The Trust reserves the right to change, modify or terminate the services
described above at any time.
PERFORMANCE INFORMATION
From time to time, in advertisements or in reports to shareholders or
prospective investors, the Fund may provide yield and average annual total
return information, and the Fund may compare its performance, either in terms of
its total return or its yield and total return, to that of other mutual funds
with similar investment objectives and to other relevant indices. For example,
the Fund may compare its performance to rankings prepared by Lipper Analytical
Services, Inc., a widely recognized independent service which monitors the
performance of mutual funds, or to other indices as appropriately determined.
Total return and yield information may be useful in reviewing the Fund's
performance and for providing a basis for comparison with other investment
alternatives. However, since the performance of the Fund changes in response to
fluctuations in market conditions and Fund expenses, no performance quotation
should be considered a representation as to the Fund's performance for any
future period. The Fund's Annual Report to Shareholders will contain detailed
information with respect to the performance of the Fund. The Annual Report will
be made available free of charge to prospective investors upon request.
The yield of the Fund refers to the income generated by an investment in
the Fund over a specified one month period identified in the advertisement and
is computed by dividing the net investment income per share earned for a
specified one month period by the net asset value at the end of the month and
expressing the result as an annualized percentage. In computing net investment
income all recurring charges are recognized.
The Fund's average annual total return generally measures the average
annual percentage growth in the dollar value of an investor's account over a
specified period, based on a hypothetical $1,000 initial investment in the Fund
and assuming the reinvestment of all dividends and distributions. The Fund may
also utilize a total return computed in the same manner but for differing
periods and without annualizing the total return. The Fund may show total
return broken down into its components of investment gain (or loss) and total
income (or distribution).
ADDITIONAL INFORMATION
ORGANIZATION, CAPITALIZATION AND VOTING
Heitman Securities Trust was organized as a Massachusetts business trust
under a Master Trust Agreement dated September 15, 1988, as Amended and Restated
on February 28, 1995. The Trust is registered with the SEC as an open-end
management investment company.
Under Massachusetts law and pursuant to the Master Trust Agreement, the
Trust is authorized to issue an unlimited number of shares of beneficial
interest in separate series, with shares of each series representing interests
in a separate portfolio of assets and operating as a separate distinct fund. In
addition, the Trust is authorized to issue two classes of shares of beneficial
interest in the Fund, designated as the Heitman/PRA Institutional Class and the
Advisor Class. Each fund share represents an equal proportionate interest in
that fund, has a par value of $.001 per share, and is entitled to such dividends
and distributions earned on the assets belonging to such fund as may be declared
by the Board of Trustees. Shares of each fund are fully paid and non-assessable
by the Trust and have no preemptive or conversion rights. Currently, the
Heitman Real Estate Fund is the Trust's sole fund.
The Trust is not required to hold annual shareholder meetings. However,
special meetings may be called for purposes such as electing or removing
Trustees, changing fundamental investment policies or approving certain
contracts. Shareholders holding an aggregate of at least 10% of the outstanding
shares of the Fund may request a meeting of shareholders at any time for the
purpose of voting to remove one or more of the Trustees, and the Trust will
assist shareholders in communicating with other shareholders in connection with
such a meeting. At any meeting of shareholders, each share shall entitle the
holder thereof to one vote.
REPORTS TO SHAREHOLDERS
In the interest of economy and convenience, the Fund does not issue share
certificates. The Trust sends quarterly and annual statements to each
shareholder indicating the status of the shareholder's account. In addition,
shareholders will receive quarterly and annual financial statements of the
Trust.
CUSTODIAN, TRANSFER AGENT, DISTRIBUTOR AND INDEPENDENT PUBLIC ACCOUNTANTS
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001 (the "Custodian") serves as Custodian of the
Fund's assets. The Custodian acts as the depository for the Fund, safekeeps its
portfolio securities, collects all income and other payments with respect to
portfolio securities, disburses monies at the Fund's request and maintains
records in connection with its duties.
Rodney Square Management Corporation, P.O. Box 8987, Wilmington, Delaware
19899-9752 serves as the Fund's Transfer Agent. As Transfer Agent, it maintains
the records of each shareholder's account, answers shareholder inquiries
concerning accounts, processes purchases and redemptions of the Fund's shares,
acts as dividend and distribution disbursing agent and performs all shareholder
service functions. All shareholder inquiries with respect to these services
should be directed to Rodney Square at (800) 435-1405.
ACG Capital Corporation, 1661 Tice Valley Boulevard #200, Walnut Creek,
California 94595 serves as the Fund's Distributor for the Advisor Class with
responsibility for distributing the Fund's shares. Rodney Square Distributors,
Inc., Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-
0001 acts as agent for ACG solely for the purpose of accepting orders on behalf
of the Fund and forwarding those orders to the Transfer Agent for processing.
Applicable banking laws prohibit deposit-taking institutions from underwriting
or distributing securities. WTC and its affiliates believe and have been
advised by their counsel that they may perform the services contemplated by
their respective agreements with the Trust without violation of applicable
banking laws or regulations. If WTC or its affiliates were prohibited from
performing these services, it is expected that the Trust's Board of Trustees
would consider entering into agreements with other entities.
Arthur Andersen LLP, Philadelphia, Pennsylvania serves as the Fund's
independent public accountants with responsibility for auditing the Fund's
annual financial statements.
ADDITIONAL INFORMATION
Additional information regarding the Fund and the Trust may be obtained
from the Distributor or the Trust at the addresses and telephone numbers listed
on the cover of this Prospectus.
[Outside cover left side]
INVESTMENT ADVISOR
HEITMAN/PRA SECURITIES ADVISORS, INC.
180 NORTH LASALLE STREET, SUITE 3600
CHICAGO, IL 60601
OFFICERS
MICHAEL T. OLIVER, PRESIDENT
DEAN A. SOTTER, VICE PRESIDENT AND TREASURER
NANCY B. LYNN, SECRETARY
TIMOTHY J. PIRE, ASSISTANT SECRETARY
LAURIE V. BROOKS, ASSISTANT SECRETARY
JOHN J. KELLEY, ASSISTANT TREASURER
BOARD OF TRUSTEES
ROBERT W. BEENEY
DONALD L. FOOTE
JOHN F. GOYDAS
MICHAEL T. OLIVER
GEORGE C. WEIR
MAURICE WIENER
DISTRIBUTOR
ACG CAPITAL CORPORATION
1661 TICE VALLEY BOULEVARD #200
WALNUT CREEK, CA 94595
(800) 888-REIT
CUSTODIAN
WILMINGTON TRUST COMPANY
RODNEY SQUARE NORTH
1100 N. MARKET STREET
WILMINGTON, DE 19890
TRANSFER AGENT AND ADMINISTRATOR
RODNEY SQUARE MANAGEMENT CORPORATION
RODNEY SQUARE NORTH
1100 N. MARKET STREET
WILMINGTON, DE 19890
TRUST HEADQUARTERS
180 NORTH LASALLE STREET, SUITE 3600
CHICAGO, IL 60601
(800) 435-1405
HA05
[Outside cover right side]
HEITMAN REAL ESTATE FUND [Boxed with first word in reverse print]
ADVISOR CLASS
PROSPECTUS
May 15, 1995
[LOGO]
[Outline of Box, Letter H, Box]
