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SCHEDULE 14A INFORMATION
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Alliance Global Environment Fund, Inc.
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June 5, 1997
Dear Shareholder:
We are pleased to report the performance of Alliance
Global Environment Fund for the semi-annual reporting period
ended April 30, 1997. The table below also gives performance
data for the First Analysis Securities Corporation (FASC)
Environmental Index, a broad-based index of companies in the
environmental industry, and the S&P 500 Stock Index, a measure of
the broad U.S. stock market, for the 6- and 12-month periods
ended April 30.
For the 6-month period, the Fund's advance of 4.4%
underperformed the FASC benchmark, which increased by 5.6%.
However, the Fund's advance of 13.1% for the 12-month period
outperformed the 5.6% increase in the FASC Index for the same
period. The Fund underperformed the S&P 500 over both the 6- and
12-month periods. On April 30, 1997, the Fund's net asset value
was $15.87 per share.
INVESTMENT RESULTS TOTAL RETURNS FOR THE PERIODS
ENDED APRIL 30, 1997
6 MONTHS 12 MONTHS
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ALLIANCE GLOBAL ENVIRONMENT FUND 4.43% 13.08%
FASC ENVIRONMENTAL INDEX 5.58% 5.58%
S&P 500 STOCK INDEX 14.71% 25.12%
INVESTMENT ACTIVITY
The underperformance of the Fund over the most recent
reporting period (six months) relative to the benchmark reflects
poor short-term performance of a few large holdings, including
Republic Industries and U.S. Filter. As we believe that the
outlook for both securities is quite favorable, the longer-term
performance of the Fund should not be impacted.
Overall, the Fund remains intensely focused on the
growing segments of the environmental services industry,
particularly those areas driven by economics and existing,
enforced regulations. This focus has led to two primary themes
within the Fund: domestic solid waste collection and disposal
services and water treatment equipment and services.
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Domestic solid waste industry fundamentals remain
attractive, with strong internal growth (driven by both price and
volume) and a dramatic acceleration of consolidation trends. The
Fund has approximately 29% of total assets invested in the solid
waste segment, with a particular emphasis on the small and mid-
sized companies which stand to benefit most from current industry
trends. Significant holdings include United Waste, Republic
Industries, American Disposal, Superior Services and USA Waste.
Similar to the solid waste industry, certain segments of
the water treatment equipment and services industry are
experiencing strong internal growth and rapid consolidation. The
Fund currently has approximately 23% of its holdings in water
treatment, including positions in U.S. Filter, Memtec Limited,
Generale des Eaux (based in France), Cytec Industries and
Culligan Water Technologies.
Other significant holdings include Allwaste (which is
being acquired by Philip Services), an industrial cleaning
company, Newpark Resources, an oil field waste services company,
and International Alliance Services, a provider of outsourcing
services to small businesses.
The outlook for the remainder of fiscal 1997 is
favorable and we believe that the Fund is well-positioned to take
advantage of growth opportunities within the environmental
services industry.
FUND ANNOUNCES PLAN TO OPEN END
On April 23, 1997, the Fund's Board of Directors
approved and recommended for stockholder approval the conversion
from a closed-end to an open-end investment company. This plan
follows an open-market share repurchase program which totaled
939,000 shares, or 13.6% of the total shares outstanding, at a
cost of $11.9 million, or $12.70 per share. Repurchases under
the program added $0.64 per share, or 4.4%, to the Fund's March
15, 1996 net asset value. In percentage terms, the Fund's
repurchase program was one of the largest ever conducted by an
American closed-end fund, and its anti-dilutive benefit is
believed to be the largest resulting from any such program.
While the share repurchase program clearly benefited
stockholders, the large discount to net asset value at which
shares were trading was not materially diminished. Accordingly,
the Board determined that it is in the best interests of
stockholders of the Fund to convert to open-end status.
Stockholders are receiving proxy materials for the
Fund's July 17, 1997, Annual Meeting of Stockholders at which
shareholder's will act on the open-ending proposal. Because
adoption of the open-ending proposal requires the affirmative
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vote on 75% of the Fund's outstanding shares, it is especially
important that all stockholders complete and return their proxy
for the annual meeting. If sufficient votes are not cast to act
on the open-ending proposal at the July 17 meeting, the Annual
Meeting will be adjourned and rescheduled for a later date.
Stockholders desiring additional information regarding the
materials or the open-ending proposals should contact Alliance at
1-800-221-5672.
As always, we thank you for your continued interest and
investment in Alliance Global Environment Fund.
Sincerely,
John D. Carifa
Chairman and President
Jeremy R. Kramer
Vice President
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