ADVISORS INNER CIRCLE FUND, 497, 1997-03-05

ADVISORS INNER CIRCLE FUND
497, 1997-03-05

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THE ADVISORS' INNER CIRCLE FUND

Investment Adviser:
CLOVER CAPITAL MANAGEMENT, INC.

The Advisors' Inner Circle Fund (the "Fund") provides a convenient and
economical means of investing in professionally managed portfolios of
securities. This Prospectus offers shares of the following mutual funds (each, a
"Portfolio" and collectively "Portfolios"), each of which is a separate series
of the Fund.

O CLOVER CAPITAL EQUITY VALUE FUND
O CLOVER CAPITAL FIXED INCOME FUND
O CLOVER CAPITAL SMALL CAP VALUE FUND

This Prospectus sets forth concisely the information about the Fund and each
Portfolio that a prospective investor should know before investing. Investors
are advised to read this Prospectus and retain it for future reference. A
Statement of Additional Information dated February 28, 1997 has been filed with
the Securities and Exchange Commission and is available without charge by
calling 1-800-932-7781. The Statement of Additional Information is incorporated
into this Prospectus by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

February 28, 1997

<PAGE>
SUMMARY

The following summary provides basic information about the Clover Capital Equity
Value Fund (the "Equity Value Portfolio"), the Clover Capital Fixed Income Fund
(the "Fixed Income Portfolio") and Clover Capital Small Cap Value Fund (the
"Small Cap Value Portfolio"). Each Portfolio is one of the mutual funds
comprising The Advisors' Inner Circle Fund (the "Fund"). This summary is
qualified in its entirety by reference to the more detailed information provided
elsewhere in this Prospectus and in the Statement of Additional Information.

WHAT ARE THE INVESTMENT OBJECTIVES AND POLICIES? The Equity Value Portfolio
seeks long-term total return by investing in a diversified portfolio of equity
securities that, in the Adviser's opinion, are undervalued relative to the
market or the historic valuation of such securities. The Fixed Income Portfolio
seeks a high level of income consistent with reasonable risk to capital by
investing in a diversified portfolio of fixed income securities. The Small Cap
Value Portfolio seeks long-term total return by investing in a diversified
portfolio of equity securities of domestic issuers with market capitalizations
of $750 million or less that, in the Adviser's opinion, are undervalued relative
to the market or the historic valuation of such securities. There can be no
assurance that a Portfolio will achieve its investment objective.

WHAT ARE THE RISKS INVOLVED WITH AN INVESTMENT IN THE PORTFOLIOS? An investment
in each Portfolio entails certain risks and considerations of which investors
should be aware. Each Portfolio invests in securities that fluctuate in value,
and investors should expect the Portfolio's net asset value per share to
fluctuate in value. Values of fixed income securities and, correspondingly, of
mutual funds invested in such securities, such as the Portfolios, tend to vary
inversely with interest rates and may be affected by other market and economic
factors as well.

The Equity Value Portfolio may invest up to 25% of its net assets in
non-convertible debt securities, which also may include securities of less than
investment grade ("junk bonds"); these high risk securities carry increased
risks of, among other things, default and market price volatility. The Fixed
Income Portfolio may invest in investment grade fixed income securities that
have speculative characteristics and may also invest up to 15% of its net assets
in fixed income securities that are junk bonds; these high risk securities carry
increased risks of, among other things, default and market price volatility. The
Small Cap Value Portfolio invests in equity securities of smaller companies,
which involves greater risk than is customarily associated with equity
investments in larger, more established companies.

For more information about each Portfolio, see "Investment Objectives,"
"Investment Policies," "Risk Factors" and "Description of Permitted Investments
and Risk Factors."

WHO IS THE ADVISER? Clover Capital Management, Inc. (the "Adviser") serves as
the investment adviser of each Portfolio. In addition to advising each
Portfolio, Clover Capital Management provides advisory services to pension
plans, religious and educational endowments, corporations, 401(k) plans, profit
sharing plans, individual investors and trusts and estates. See "Expense
Summary" and "The Adviser."

<PAGE>

WHO IS THE ADMINISTRATOR? SEI Fund Resources (the "Administrator") serves as the
administrator (the "Administrator") and shareholder servicing agent of each
Portfolio. See "The Administrator."

WHO IS THE TRANSFER AGENT? DST Systems, Inc. (the "Transfer Agent") serves as
the transfer agent and dividend disbursing agent of the Fund. See "The Transfer
Agent."

WHO IS THE DISTRIBUTOR? CCM Securities, Inc. (the "Distributor") serves as the
distributor of each Portfolio's shares. See "The Distributor."

IS THERE A SALES LOAD? No, shares of each Portfolio are offered on a no-load
basis.

IS THERE A MINIMUM INVESTMENT? Each Portfolio has a minimum initial investment
of $2,000, which the Distributor may waive at its discretion.

HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Transfer Agent on a day when the New York Stock Exchange is open for
business ("Business Day"). A purchase order will be effective as of the Business
Day received by the Transfer Agent if the Transfer Agent receives an order and
payment by check or with readily available funds prior to 4:00 p.m. Eastern
time. To open an account by wire, you must first call 1-800-808-4921. Redemption
orders placed with the Transfer Agent prior to 4:00 p.m., Eastern time on any
Business Day will be effective that day. Each Portfolio also offers both a
Systematic Investment Plan and a Systematic Withdrawal Plan. The purchase and
redemption price for shares is the net asset value per share determined as of
the end of the day the order is effective. See "Purchase and Redemption of
Shares."

HOW ARE DISTRIBUTIONS PAID? Substantially all of the net investment income
(exclusive of capital gains) of the Equity Value Portfolio and Small Cap Value
Portfolios is distributed in the form of quarterly dividends. The Fixed Income
Portfolio distributes substantially all of its net investment income (exclusive
of capital gains) in the form of dividends declared daily and paid monthly. The
Fixed Income Portfolio's shares normally begin earning dividends within two
Business Days after their purchase order is effective.

Any capital gain is distributed at least annually. Distributions are paid in
additional shares unless the shareholder elects to take the payment in cash. See
"Dividends and Distributions."

<PAGE>
EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES EQUITY VALUE FUND
FIXED INCOME FUND
SMALL CAP VALUE FUND

<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------
Maximum Sales Load Imposed on Purchases.............................................. None
Maximum Sales Load Imposed on Reinvested Dividends................................... None
Deferred Sales Load.................................................................. None
Redemption Fees(1)................................................................... None
Exchange Fees........................................................................ None
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>

(1) A wire redemption charge, currently $10.00, is deducted from the amount of
a Federal Reserve wire redemption payment made at the request of a
shareholder.

ANNUAL OPERATING EXPENSES

EQUITY VALUE FIXED SMALL CAP
(as a percentage of average net assets) FUND INCOME FUND VALUE FUND
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Advisory Fees (after fee waivers)(2)...... .63% .09% .0%
12b-1 Fees................................ None None None
Other Expenses (after
reimbursements)......................... .47% .66% 1.40%
- ------------------------------------------------------------------------------------------------
Total Operating Expenses (after fee
waivers and reimbursements) (2)......... 1.10% .75% 1.40%
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>

(2) Advisory Fees and Total Operating Expenses have been restated to reflect the
Fund's expenses at its current asset level.

(3) The Adviser has, on a voluntary basis, waived a portion of its fee for each
Portfolio and agreed to reimburse certain Portfolio expenses in order to
limit total operating expenses of the Equity Value and Fixed Income
Portfolios to an annual rate of not more than 1.20% and .80%, respectively,
of average daily net assets when net assets are below $20 million and to not
more than 1.10% and .75%, respectively, when net assets are $20 million or
more and to limit total operating expenses of the Small Cap Value Fund to
1.40% of the Portfolio's average daily net assets. The Adviser reserves the
right, in its sole discretion, to terminate its voluntary fee waiver and any
reimbursement at any time. The advisory fees shown reflect these voluntary
waivers and reimbursements. Absent such waivers and reimbursements, advisory
fees for the Equity Value, Fixed Income and Small Cap Value Portfolios would
be .74%, .45% and .85%, respectively, and total operating expenses would be
1.21%, 1.16% and 2.25%, respectively. Absent reimbursement of expenses,
Other Expenses for the Small Cap Portfolio would be 5.29%. See "The
Adviser."

EXAMPLE
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An investor 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
CLOVER CAPITAL EQUITY FUND....................... $11 $35 $61 $134
CLOVER CAPITAL FIXED INCOME...................... $ 8 $24 $42 $ 93
CLOVER CAPITAL SMALL CAP
VALUE FUND..................................... $14 $44 $77 $168
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>

THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES OF EACH PORTFOLIO AFTER
WAIVERS AND REIMBURSEMENTS AS SHOWN IN THE EXPENSE TABLE. THE EXAMPLE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN. The purpose of the expense table and
example is to assist the investor in understanding the various costs and
expenses that may be directly or indirectly borne by shareholders of each
Portfolio. Additional information may be found under "The Adviser" and "The
Administrator."

<PAGE>

FINANCIAL HIGHLIGHTS THE ADVISORS' INNER CIRCLE FUND

The following information has been audited by Arthur Andersen LLP, the Fund's
independent public accountants, as indicated in their report dated December 6,
1996 on the Fund's financial statements as of October 31, 1996. This table
should be read in conjunction with the Fund's financial statements and notes
thereto. The Portfolio's financial statements and additional performance
information are contained in the Annual Report to Shareholders which is
available without charge by calling 1-800-932-7781.

For a Share Outstanding Throughout the Period:

CLOVER CAPITAL
EQUITY VALUE FUND

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/01/95 11/01/94 11/01/93 11/01/92 12/06/91(1)
TO TO TO TO TO
10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
PERIOD............................ $ 15.29 $ 13.74 $ 11.94 $ 10.45 $ 10.00
Income From Investment Operations:
Net Investment Income............. 0.19 0.24 0.08 0.10 0.10
Realized and Unrealized Gains on
Securities...................... 2.15 2.46 2.01 1.54 0.44
- ----------------------------------------------------------------------------------------------
Total From Investment
Operations........................ 2.34 2.70 2.09 1.64 0.54
- ----------------------------------------------------------------------------------------------
Less Distributions:
Distributions From Net Investment
Income............................ (0.22) (0.22) (0.08) (0.10) (0.09)
Distributions From Capital
Gains............................. (1.21) (0.93) (0.21) (0.05) 0.00
- ----------------------------------------------------------------------------------------------
Total Distributions........... (1.43) (1.15) (0.29) (0.15) (0.09)
- ---------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD............................ $ 16.20 $ 15.29 $ 13.74 $ 11.94 $ 10.45
- ----------------------------------------------------------------------------------------------
TOTAL RETURN........................ 16.47% 21.25% 17.8% 15.83% 5.94%*
- ---------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of
Period (000)...................... $ 85,050 $ 51,647 $ 25,249 $ 15,070 $ 9,005
Ratios Of Expenses To Average Net
Assets............................ 1.10% 1.10% 1.14% 1.18% 1.20%*
Ratio Of Expenses To Average Net
Assets (Excluding Fee Waiver and
Contributions).................... 1.21% 1.20% 1.30% 1.51% 2.09%*
Ratio Of Net Income To Average Net
Assets............................ 1.32% 1.82% 0.71% 0.89% 1.15%*
Ratio Of Net Income To Average Net
Assets (Excluding Fee Waiver and
Contributions).................... 1.21% 1.72% 0.55% 0.56% 0.26%*
Portfolio Turnover Rate............. 51.36% 84.76% 58.44% 82.51% 31.00%
Average Commission Rate (2)......... $ 0.0577 N/A N/A N/A N/A
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>

* Annualized

(1) The Clover Capital Equity Value Fund commenced operations on December 6,
1991.
(2) Average Commission rate paid per share for the security purchases and sales
made during the period.

<PAGE>

FINANCIAL HIGHLIGHTS THE ADVISORS' INNER CIRCLE FUND

For a Share Outstanding Throughout the Period:

CLOVER CAPITAL
FIXED INCOME FUND

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
11/01/95 11/01/94 11/01/93 11/01/92 12/06/91(1)
TO TO TO TO TO
10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD............................ $ 9.89 $ 9.14 $ 10.85 $ 10.23 $ 10.00
Income From Investment Operations:
Net Investment Income............. 0.59 0.58 0.57 0.61 0.56
Realized and Unrealized Gain (or
Losses) on Securities........... 0.01 0.77 (0.92) 0.72 0.23
- -------------------------------------------------------------------------------------------------
Total From Investment
Operations........................ 0.60 1.35 (0.35) 1.33 0.79
- -------------------------------------------------------------------------------------------------
Less Distributions:
Distributions From Net Investment
Income............................ (0.59) (0.58) (0.57) (0.61) (0.56)
Distributions From Capital
Gains............................. (0.05) (0.02) (0.79) (0.10) 0.00
- -------------------------------------------------------------------------------------------------
Total Distributions........... (0.64) (0.60) (1.36) (0.71) (0.56)
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF
PERIOD............................ $ 9.85 $ 9.89 $ 9.14 $ 10.85 $ 10.23
- -------------------------------------------------------------------------------------------------
TOTAL RETURN........................ 6.26% 15.27% (3.54)% 13.40% 9.05%*
- -------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of Period (000)..... $ 19,731 $ 14,685 $ 9,762 $ 7,966 $ 8,982
Ratio Of Expenses To Average Net
Assets............................ 0.80% 0.80% 0.80% 0.78% 0.80%*
Ratio Of Expenses To Average Net
Assets (Excluding Fee Waivers and
Contributions).................... 1.11% 1.40% 1.46% 1.29% 1.76%*
Ratio Of Net Income To Average Net
Assets............................ 6.00% 6.13% 5.88% 5.62% 6.28%*
Ratio Of Net Income To Average Net
Assets (Excluding Fee Waivers and
Contributions).................... 5.69% 5.53% 5.22% 5.11% 5.32%*
Portfolio Turnover Rate............. 24.52% 35.84% 11.11% 68.61% 113.00%
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>

* Annualized

(1) The Clover Capital Fixed Income Fund commenced operations on December 6,
1991.

<PAGE>

FINANCIAL HIGHLIGHTS THE ADVISORS' INNER CIRCLE FUND

For a Share Outstanding Throughout the Period:

CLOVER CAPITAL
SMALL CAP VALUE FUND

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
2/28/96(1)
TO
10/31/96
- ---------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................................. $ 10.00
Income From Investment Operations:
Net Investment Income.......................................................... 0.02
Realized and Unrealized Gains on Securities.................................... 0.88
- ---------------------------------------------------------------------------------------------
Total From Investment Operations................................................. 0.90
- ---------------------------------------------------------------------------------------------
Less Distributions:
Distributions From Net Investment Income......................................... (0.03)
Distributions From Capital Gains................................................. --
- ---------------------------------------------------------------------------------------------
Total Distributions........................................................ (0.03)
- ---------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................................................... $ 10.87
- ---------------------------------------------------------------------------------------------
TOTAL RETURN..................................................................... 8.97%
- ---------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End Of Period (000).................................................. $ 4.495
Ratio Of Expenses To Average Net Assets.......................................... 1.40%*
Ratio Of Expenses To Average Net Assets (Excluding Fee Waivers and
Contributions)................................................................. 5.29%*
Ratio Of Net Income To Average Net Assets........................................ (0.03)%*
Ratio Of Net Income (Loss) To Average Net Assets (Excluding Fee Waivers and
Contributions)................................................................. (3.92)%*
Portfolio Turnover Rate.......................................................... 14.17%
Average Commission Rate(2)....................................................... $ 0.0470
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>

* Annualized

(1) The Clover Capital Small Cap Fund commenced operations on February 28, 1996.
(2) Average commission rate paid per share for the security purchases and sales
made during the period.

<PAGE>

THE FUND AND THE PORTFOLIOS

The Advisors' Inner Circle Fund (the "Fund") offers shares of a number of
separately-managed mutual funds, each of which is a separate series
("portfolio") of the Fund. Each share of each mutual fund represents an
undivided proportionate interest in that mutual fund. This Prospectus offers
shares of the Fund's Clover Capital Equity Value Fund (the "Equity Value
Portfolio"), Clover Capital Fixed Income Fund (the "Fixed Income Portfolio") and
Clover Capital Small Cap Value Portfolio (the "Small Cap Value Portfolio") each
a diversified portfolio. Information regarding the other mutual funds in the
Fund is contained in separate prospectuses that may be obtained by calling
1-800-932-7781.

INVESTMENT OBJECTIVES

EQUITY VALUE PORTFOLIO

The Equity Value Portfolio seeks long-term total return.

FIXED INCOME PORTFOLIO

The Fixed Income Portfolio seeks a high level of income consistent with
reasonable risk to capital.

SMALL CAP VALUE PORTFOLIO

The Small Cap Value Portfolio seeks long-term total return.

There can be no assurance that any Portfolio will be able to achieve its
investment objective.

INVESTMENT POLICIES

EQUITY VALUE PORTFOLIO

The Equity Value Portfolio will invest primarily in equity securities that
Clover Capital Management, Inc. (the "Adviser") believes to be undervalued
relative to the market or their historic valuation. The Adviser uses several
valuation criteria to determine if a security is undervalued, including
price-to-earnings ratios, price-to-cash flow ratios, price-to-sales ratios, and
price-to-book value ratios. In addition, the Adviser examines "hidden values"
that are not obvious in a company's financial reports, focusing on finding the
current asset values or current transfer values of assets held by the company.

Under normal market conditions, the Equity Value Portfolio invests at least 70%
and up to 100% of its net assets in a diversified portfolio of equity
securities, including common stocks, both debt securities and preferred stocks
convertible into common stocks, and American Depositary Receipts ("ADRs") (up to
20% of the Equity Value Portfolio's net assets). In addition to these equity
securities, the Equity Value Portfolio may also invest up to 5% of its net
assets in each of warrants and rights to purchase common stocks, and up to 10%
of its net assets in real estate investment trusts ("REITs"). Assets of the
Equity Value Portfolio not invested in the equity securities described above may
be invested in non-convertible fixed income securities and money market
instruments as described below.

All of the equity securities (including ADRs) in which the Equity Value
Portfolio invests are traded on registered exchanges or the over-the-counter
market in the United States.

<PAGE>

During periods when, or under circumstances where, the Adviser believes that the
return on such securities may equal or exceed the return on equity securities,
the Equity Value Portfolio may invest up to 25% of its net assets in
non-convertible fixed income securities consisting of corporate debt securities
and obligations issued or guaranteed as to principal and interest by the U.S.
Government or its agencies or instrumentalities. The Equity Value Portfolio may
invest in such securities without regard to their term or rating and may, from
time to time, invest in corporate debt securities rated below investment grade,
i.e., rated lower than BBB by Standard & Poor's Corporation ("S&P"), Baa by
Moody's Investor Service, Inc. ("Moody's") or unrated securities of comparable
quality as determined by the Adviser. Such securities pose special risks. See
"Risk Factors -- Fixed Income Securities."

Under normal circumstances up to 30% of the Equity Value Portfolio's assets may
be invested in the money market instruments described below in order to maintain
liquidity, or if the Adviser determines that securities meeting the Equity Value
Portfolio's investment objective and policies are not otherwise reasonably
available for purchase.

For temporary defensive purposes during periods when the Adviser determines that
market conditions warrant, the Equity Value Portfolio may invest up to 100% of
its assets in money market instruments, including: securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities;
certificates of deposit, time deposits and bankers' acceptances issued by banks
or savings and loan associations having net assets of at least $500 million as
of the end of their most recent fiscal year; commercial paper rated A-1 by S&P
or Prime-1 by Moody's; repurchase agreements involving such securities; and, to
the extent permitted by applicable law, shares of other investment companies
investing solely in money market instruments ("Money Market Instruments"), and
hold cash.

FIXED INCOME PORTFOLIO

Under normal market conditions, the Fixed Income Portfolio invests at least 70%
of its net assets in the following fixed income securities: (i) obligations
issued or guaranteed as to principal and interest by the U.S. Government, its
agencies or instrumentalities ("U.S. Government securities"); (ii) corporate
bonds and debentures rated in one of the four highest rating categories; and
(iii) mortgage-backed securities that are collateralized mortgage obligations
("CMOs") or real estate mortgage investment conduits ("REMICs") rated in one of
the two highest rating categories. The Fixed Income Portfolio will invest in
such corporate bonds and debentures, CMOs or REMICs only if, at the time of
purchase, the security either has the requisite rating from S&P or Moody's or is
unrated but of comparable quality as determined by the Adviser. Governmental
private guarantees do not extend to the securities' value, which is likely to
vary inversely with fluctuations in interest rates. Corporate bonds rated B
generally lack characteristics of desirable investment, and assurance of
interest and principal payments or of maintenance of other terms of the contract
over any long period of time may be small.

The Fixed Income Portfolio may invest its remaining assets in the following
securities: (i) Money Market Instruments, (ii) asset-backed securities rated A
or higher by S&P or Moody's; (iii) debt securities rated below investment grade
(i.e., rated lower than BBB by S&P or Baa by Moody's), but not lower than B- by
S&P or B3 by Moody's, or if unrated, determined by the Adviser to be of
comparable quality at the time of purchase (up to 15% of the Fixed Income
Portfolio's net assets including downgraded securities); (iv) debt securities
convertible into common stocks (up to 10% of the Fixed Income Portfolio's net
assets); (v) U.S. dollar denominated fixed income securities issued by foreign
corporations or issued or guaranteed by foreign governments, their political
subdivisions, agencies or instrumentalities; and (vi) U.S. dollar denominated
obligations of supranational entities

<PAGE>

traded in the United States. For additional information on corporate bond
ratings, see the Appendix to the Statement of Additional Information.

The relative proportions of the Fixed Income Portfolio's net assets invested in
the different types of permissible investments will vary from time to time
depending upon the Adviser's assessment of the relative market value of the
sectors in which the Fixed Income Portfolio invests. In addition, the Fixed
Income Portfolio may purchase securities that are trading at a discount from par
when the Adviser believes there is a potential for capital appreciation. The
Adviser does not seek to achieve the Fixed Income Portfolio's investment
objective by forecasting changes in the interest rate environment.

In the event any security owned by the Fixed Income Portfolio is downgraded
below the rating categories set forth above, the Adviser will review the
security and determine whether to retain or dispose of that security.

The Fixed Income Portfolio may enter into forward commitments or purchase
securities on a when-issued basis, and may invest in variable or floating rate
obligations.

For temporary defensive purposes during periods when the Adviser determines that
the market conditions warrant, the Fixed Income Portfolio may invest up to 100%
of its net assets in Money Market Instruments and may hold a portion of its
assets in cash.

The Fixed Income Portfolio expects to maintain a dollar-weighted average
portfolio maturity of five to ten years.

SMALL CAP VALUE PORTFOLIO

Under normal market conditions, the Small Cap Value Portfolio invests at least
75% and up to 100% of its total assets in a diversified portfolio of equity
securities of U.S. issuers that have market capitalizations of $750 million or
less at the time of purchase, including common stocks, warrants and rights to
subscribe to common stocks, equity interests issued by REITs and both debt
securities and preferred stocks convertible into common stocks. The Small Cap
Value Portfolio may invest in such convertible debt securities without regard to
their term or rating and may, from time to time, invest in corporate debt
securities rated below investment grade, i.e., rated lower than BBB by S&P, Baa
by Moody's or unrated securities of comparable quality as determined by Clover
Capital Management, Inc. (the "Adviser"). Such securities pose special risks.
See "Risk Factors -- Fixed Income Securities."

The Adviser employs database screening techniques to search the universe of
domestic public companies for stocks trading in the bottom 20% of valuation
parameters such as stock price-to-book value, price-to-cash flow,
price-to-earnings and price-to-sales. From these stocks the Adviser selects a
diversified group of securities for investment by utilizing additional screening
and selection strategies to identify the companies that the Adviser believes are
more financially stable. In addition, the Portfolio may include holdings in
issuers that may not have been identified during the initial screening process
but that the Adviser has identified using its value oriented fundamental
research techniques. In addition, the Portfolio may invest up to 10% of its net
assets in ADRs.

All of the equity securities (including ADRs) in which the Portfolio invests are
traded on registered exchanges or the over-the-counter market in the United
States.

Any remaining assets may be invested in (i) the equity securities described
above of U.S. issuers that have market capitalizations exceeding $750 million at
the time of purchase,

<PAGE>

and (ii) Money Market Instruments. In addition, the Portfolio may invest up to
15% of its net assets in illiquid securities, although it has no present
intention to do so.

For temporary defensive purposes during periods when the Adviser determines that
market conditions warrant, the Portfolio may invest up to 100% of its assets in
the Money Market Instruments and hold cash.

RISK FACTORS

EQUITY SECURITIES -- Investments in equity securities in general are subject to
market risks that may cause their prices to fluctuate over time. The value of
securities (such as warrants or convertible debt) convertible into equity
securities is also affected by prevailing interest rates, the credit quality of
the issuer and any call provision. Fluctuations in the value of equity
securities in which a Portfolio invests will cause the net asset value of that
Portfolio to fluctuate. An investment in the Equity Value Portfolio may
therefore be more suitable for long-term investors who can bear the risk of
short-term principal fluctuations.

The Small Cap Value Portfolio invests in the securities of smaller companies.
Investments in small capitalization companies involves greater risk than is
customarily associated with larger, more established companies due to the
greater business risks of small size, limited markets and financial resources,
narrow product lines and the frequent lack of depth of management. The
securities of small companies are often traded over-the-counter and may not be
traded in volumes typical on a national securities exchange. Consequently, the
securities of smaller companies may have limited market stability, may be less
liquid, and may be subject to more abrupt or erratic market movements than
securities of larger, more established growth companies or the market averages
in general. As a result, the value of the shares of the Portfolio can be
expected to fluctuate more than the value of shares of an investment company
investing solely in larger, more established companies.

FIXED INCOME SECURITIES -- The market value of the fixed income investments in
which each Portfolio may invest will change in response to interest rate changes
and other factors. During periods of falling interest rates, the values of
outstanding fixed income securities generally rise. Conversely, during periods
of rising interest rates, the values of such securities generally decline.
Changes by recognized agencies in the rating of any fixed income security and in
the ability of an issuer to make payments of interest and principal also affect
the value of these investments. Changes in the value of these securities will
not necessarily affect cash income derived from these securities but will affect
each Portfolio's net asset value. Each Portfolio may invest in securities rated
in the fourth highest category by S&P or Moody's; such securities, while still
investment grade, are considered to have speculative characteristics.

Securities below investment grade are high risk, high yield securities and may
be labeled "junk bonds." Such securities involve greater risk of default or
price declines than investments in investment grade securities due to changes in
the issuer's creditworthiness and the outlook for economic growth. The market
for these securities may be thinner and less active, causing market price
volatility and limited liquidity in the secondary market. These factors may
limit a Portfolio's ability to sell such securities at their fair market value.
Credit quality in the junk bond market can change suddenly and unexpectedly, and
even recently issued credit ratings may not fully reflect the actual risks
imposed by a particular security.

SECURITIES OF FOREIGN ISSUERS -- Securities of foreign issuers are subject to
investment risks that differ in some respects from those related to investments
in securities of U.S. issuers. Such risks include future adverse political and
economic developments, possible

<PAGE>

imposition of withholding taxes on income, possible seizure, nationalization or
expropriation of foreign deposits, possible establishment of exchange controls
or taxation at the source or greater fluctuation in value due to changes in
exchange rates. Foreign issuers of securities often engage in business practices
different from those of domestic issuers of similar securities, and there may be
less information publicly available about foreign issuers. In addition, foreign
issuers are, generally speaking, subject to less government supervision and
regulation and different accounting treatment than are those in the United
States.

MORTGAGE-BACKED SECURITIES -- The mortgage-backed securities ("MBSs") in which
the Fixed Income Portfolio may invest are subject to prepayment of the
underlying mortgages. During periods of declining interest rates, prepayment of
mortgages underlying MBSs can be expected to accelerate. When the MBSs held by
the Fixed Income Portfolio are prepaid, the Fixed Income Portfolio must reinvest
the proceeds in securities the yield of which reflects prevailing interest
rates, which may be lower than the yield on the prepaid MBS.

REITS -- The value of interests in REITs may be affected by changes in (i) the
value of the property owned, (ii) the quality of the mortgages held by the
trust, and (iii) interest rates.

GOVERNMENT SECURITIES -- Any guaranty by the U.S. Government, its agencies or
instrumentalities of the securities in which a Portfolio invests guarantees only
the payment of principal and interest on the guaranteed security and does not
guarantee the yield or value of that security or the yield, total return or
value of shares of the Portfolios.

For a description of certain permitted investments, see "Description of
Permitted Investments and Risk Factors" in this Prospectus and "Description of
Permitted Investments" in the Statement of Additional Information.

INVESTMENT LIMITATIONS

The investment objectives and the investment limitations set forth here and in
the Statement of Additional Information are fundamental policies of each
Portfolio. Fundamental policies cannot be changed with respect to a Portfolio
without the consent of the holders of a majority of that Portfolio's outstanding
shares.

No Portfolio may:

1. Purchase securities of any issuer (except securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities and repurchase
agreements involving such securities) if as a result more than 5% of the
total assets of the Portfolio would be invested in the securities of such
issuer. This restriction applies to 75% of the Portfolio's total assets.

2. Purchase any securities which would cause 25% or more of the total assets
of the Portfolio to be invested in the securities of one or more issuers
conducting their principal business activities in the same industry,
provided that this limitation does not apply to investments in obligations
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities and repurchase agreements involving such securities. For
purposes of this limitation, (i) utility companies will be classified
according to their services, for example, gas distribution, gas
transmission, electric and telephone will each be considered a separate
industry; (ii) financial service companies will be classified according to
the end users of their services, for example, automobile finance, bank
finance and diversified finance will each be considered a separate

<PAGE>

industry; and (iii) in the case of the Fixed Income and Small Cap Value
Portfolios, supranational entities will be considered to be a separate
industry.

3. Borrow money except for temporary or emergency purposes and then only in an
amount not exceeding 10% of the value of its total assets.

The foregoing percentages apply at the time of the purchase of a security.
Additional investment limitations are set forth in the Statement of Additional
Information.

THE ADVISER

Clover Capital Management, Inc. is a professional investment management firm
founded in 1984 by Michael Edward Jones, CFA and Geoffrey Harold Rosenberger,
CFA, who are Managing Directors of the Adviser and control all of the Adviser's
outstanding voting stock. As of December 31, 1996, the Adviser had discretionary
management authority with respect to approximately $1.914 billion of assets. The
principal business address of the Adviser is 11 Tobey Village Office Park,
Pittsford, New York 14534.

The Adviser serves as each Portfolio's investment adviser under an investment
advisory agreement (the "Advisory Agreement") with the Fund. Under the Advisory
Agreement, the Adviser makes the investment decisions for the assets of each
Portfolio and continuously reviews, supervises and administers each Portfolio's
investment program, subject to the supervision of, and policies established by,
the Trustees of the Fund. In addition to advising the Portfolios, the Adviser
provides advisory services to pension plans, religious and educational
endowments, corporations, 401(k) plans, profit sharing plans, individual
investors and trusts and estates.

The Equity Value Portfolio has, since its inception, been managed by a committee
led by Michael E. Jones, CFA and Paul W. Spindler, CFA. Mr. Jones is a
co-founder of the Adviser and for the past five years has been the Managing
Director of the Adviser. For the past five years Mr. Spindler has been a Vice
President of Investments for the Adviser.

The Fixed Income Portfolio has, since its inception, been managed by a committee
led by Richard J. Huxley and Paul W. Spindler, CFA. For the past five years
Richard Huxley has been the Executive Vice President and Fixed Income Manager
for the Adviser. For the past five years Paul Spindler has been a Vice President
of Investments for the Adviser.

The Small Cap Value Portfolio has, since its inception, been managed by a
committee of research professionals led by Michael E. Jones, CFA, and Lawrence
Creatura. For the past two years Mr. Creatura has been a Vice President for
Investments for the Adviser. For the previous three years he was a Laser Systems
Engineer/Researcher for Laser Surge, Inc.

For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .74%, .45% and .85% of the average daily
net assets of the Equity Value, Fixed Income and Small Cap Value Portfolios,
respectively. The Adviser has voluntarily agreed to waive all or a portion of
its fees and/or to reimburse Portfolio expenses in order to limit total
operating expenses of the Equity Value and Fixed Income Portfolios to an annual
rate of not more than 1.20% and .80%, respectively, of average daily net assets
when net assets are below $20 million and to not more than 1.10% and .75%,
respectively, when net assets are $20 million or more and to limit total
operating expenses of the Small Cap Value Portfolio to 1.40% of the Portfolio's
average daily net assets. The Adviser reserves the right, in its sole
discretion, to terminate its voluntary fee waiver and any reimbursement at any
time. For the fiscal year ended October 31, 1996, the Adviser received a fee
equal to .63% and .14% of the Equity Value Portfolio's and Fixed Income
Portfolio's average daily net assets and waived all fees due it from the Small

<PAGE>

Cap Value Portfolio. The Adviser reimbursed expenses of the Small Cap Value
Portfolio totaling $51,578, which equals 3.03% of the Portfolio's average daily
net assets.

THE ADMINISTRATOR

SEI Fund Resources (the "Administrator"), provides the Fund with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel and facilities.

For these administrative services, the Administrator is entitled to a fee from
each Portfolio, which is calculated daily and paid monthly, at an annual rate of
.20% of the average daily net assets of each Portfolio. However, each Portfolio
pays the Administrator a minimum annual fee of $50,000. The administration fee
rate each Portfolio pays will decline to an annual rate of .20% of the
Portfolio's average daily net assets at net asset levels of $25 million and
above.

The Administrator also serves as shareholder servicing agent for each Portfolio
under a shareholder servicing agreement with the Fund.

THE TRANSFER AGENT

DST Systems Inc., 1004 Baltimore Street, Kansas City, Missouri 64105 (the
"Transfer Agent") serves as the transfer agent and dividend disbursing agent for
the Fund under a transfer agency agreement with the Fund.

THE DISTRIBUTOR

CCM Securities, Inc. (the "Distributor"), 11 Tobey Village Office Park,
Pittsford, New York 14534, a wholly-owned subsidiary of the Adviser, serves as
the Fund's distributor pursuant to a distribution agreement. The Distributor
does not receive compensation for distribution services for the shares of any
Portfolio.

PORTFOLIO TRANSACTIONS

The Adviser may select brokers on the basis of the research, statistical and
pricing services they provide to a Portfolio. A commission paid to such brokers
may be higher than that which another qualified broker would have charged for
effecting the same transaction, provided that such commissions are in compliance
with the Securities Exchange Act of 1934, as amended, and that the Adviser
determines in good faith that the commission is reasonable in terms of either
the transaction or the overall responsibility of the Adviser to the Portfolio
and the Adviser's other clients.

Each Portfolio may execute brokerage or other agency transactions through the
Distributor for which the Distributor may receive usual and customary
compensation.

Because shares of each Portfolio are not marketed through intermediary
broker-dealers, it is not each Portfolio's practice to allocate brokerage or
effect principal transactions with the broker-dealers on the basis of sales of
shares that may be made through such firms. However, the Adviser may place
Portfolio orders with qualified broker-dealers who refer clients to each
Portfolio.

Some securities considered for investment by a Portfolio may also be appropriate
for other accounts and/or clients served by that Adviser. If the purchase or
sale of securities consistent with the investment policies of the Portfolio and
another of the Adviser's accounts and/or clients are considered at or about the
same time, transactions in such

<PAGE>

securities will be allocated among the Portfolio and the other accounts and/or
clients in a manner deemed equitable by the Adviser.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions may be made through the Transfer Agent on each day
that the New York Stock Exchange is open for business (a "Business Day").
Investors may purchase and redeem shares of a Portfolio directly through the
Transfer Agent at: The Advisors' Inner Circle Fund, P.O. Box 419009, Kansas
City, Missouri 64141-6009 by mail or wire transfer. All shareholders may place
orders by telephone; when market conditions are extremely busy, it is possible
that investors may experience difficulties placing orders by telephone and may
wish to place orders by mail. Shares of a Portfolio are offered only to
residents of states in which such shares are eligible for purchase. Certain
broker-dealers assist their clients in the purchase of shares from the
Distributor and charge a fee for this service in addition to each Portfolio's
public offering price.

The minimum initial investment in a Portfolio is $2,000, and subsequent
purchases must be at least $100. The Distributor may waive these minimums at its
discretion. No minimum applies to subsequent purchases effected by dividend
reinvestment. As described below, subsequent purchases through each Portfolio's
Systematic Investment Plan must be at least $100.

PURCHASES BY MAIL

An account may be opened by mailing a check or other negotiable bank draft
(payable to the name of the appropriate Portfolio) for $2,000 or more, together
with a completed Account Application to the Transfer Agent at: The Advisors'
Inner Circle Fund, P.O. Box 419009, Kansas City, Missouri 64141-6009.
Third-party checks, credit cards, credit card checks and cash will not be
accepted. Subsequent investments may also be mailed directly to the Transfer
Agent.

PURCHASES BY WIRE TRANSFER

Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of a Portfolio by requesting their
bank to transmit funds by wire to: United Missouri Bank, N.A.; ABA #10-10-00695;
for Account Number 98-7052-396-5; Further Credit: Clover Capital Portfolio. The
shareholder's name and account number must be specified in the wire.

Initial Purchases: Before making an initial investment by wire, an investor
must first telephone 1-800-808-4921 to be assigned an account number. The
investor's name, account number, taxpayer identification number or Social
Security number, and address must be specified in the wire. In addition, an
Account Application should be promptly forwarded to the Transfer Agent at: The
Advisors' Inner Circle Fund, P.O. Box 419009, Kansas City, Missouri 64141-6009.

Subsequent Purchases: Additional investments may be made at any time through
the wire procedures described above, which must include a shareholder's name and
account number. The investor's bank may impose a fee for investments by wire.

<PAGE>

GENERAL INFORMATION REGARDING PURCHASES

A purchase order will be effective as of the day received by the Transfer Agent
if the Transfer Agent receives the order and payment by check or readily
available funds before 4:00 p.m., Eastern time. The purchase price of shares of
a Portfolio is that Portfolio's net asset value per share next determined after
a purchase order is effective. Purchases will be made in full and fractional
shares of a Portfolio calculated to three decimal places. The Fund will not
issue certificates representing shares of a Portfolio.

If a check received for the purchase of shares does not clear, the purchase will
be canceled, and the investor could be liable for any losses or fees incurred.
The Fund reserves the right to reject a purchase order when the Fund determines
that it is not in the best interest of the Portfolio or its shareholders to
accept such order.

Shares of each Portfolio may be purchased in exchange for securities to be
included in that Portfolio, subject to the Adviser's or Administrator's
determination that these securities are acceptable. Securities accepted in such
an exchange will be valued at their market value. All accrued interest and
subscription or other rights that are reflected in the market price of accepted
securities at the time of valuation become the property of that Portfolio and
must be delivered by the shareholder to that Portfolio upon receipt from the
issuer.

The Adviser or Administrator will not accept securities in exchange for
Portfolio shares unless (1) such securities are appropriate for the Portfolio at
the time of the exchange; (2) the shareholder represents and agrees that all
securities offered to the Portfolio are not subject to any restrictions upon
their sale by the Portfolio under the Securities Act of 1933, as amended, or
otherwise; and (3) prices are available from an independent pricing service
approved by the Fund's Board of Trustees.

SYSTEMATIC INVESTMENT PLAN -- A shareholder may also arrange for periodic
additional investments in a Portfolio through automatic deductions by Automated
Clearing House ("ACH") transactions from a checking or savings account by
completing the Systematic Investment Plan form. This Systematic Investment Plan
is subject to account minimum initial purchase amounts and a minimum
pre-authorized investment amount of $100 per month. An application form for the
Systematic Investment Plan may be obtained by calling 1-800-932-7781.

EXCHANGES

Shareholders of one Portfolio may exchange their shares for shares of each other
Clover Capital Portfolio. Exchanges are made at net asset value. An exchange is
considered a sale of shares and will result in capital gain or loss for federal
income tax purposes. The shareholder must have received a current prospectus for
the new Portfolio before any exchange will be effected, and the exchange
privilege may be exercised only in those states where shares of the new
Portfolio may legally be sold. If the Transfer Agent receives exchange
instructions in writing or by telephone (an "Exchange Request") in good order by
4:00 p.m., Eastern time, on any Business Day, the exchange will be effected that
day. The liability of the Fund or the Transfer Agent for fraudulent or
unauthorized telephone instructions may be limited as described below. The Fund
reserves the right to modify or terminate this exchange offer on 60 days'
notice.

<PAGE>

REDEMPTIONS

Redemption orders received by the Transfer Agent prior to 4:00 p.m., Eastern
time on any Business Day will be effective that day. The redemption price of
shares is the net asset value per share of that Portfolio next determined after
the redemption order is effective. Payment on redemption will be made as
promptly as possible and, in any event, within seven days after the redemption
order is received, provided, however, that the investment being redeemed has
been in the shareholder's account for a minimum of 15 days. Shareholders may not
close their accounts by telephone; redemption or exchange orders closing an
account must be sent in writing to the Transfer Agent. Redemption requests from
IRA accounts must be made in writing.

Shareholders may receive redemption payments in the form of a check or by
Federal Reserve wire transfer or ACH wire transfer. There is no charge for
having a check for redemption proceeds mailed. The custodian will deduct a wire
charge, currently $10.00, from the amount of a Federal Reserve wire redemption
payment made at the request of a shareholder. Shareholders cannot redeem shares
of a Portfolio by Federal Reserve wire on federal holidays restricting wire
transfers. The Fund does not charge for ACH wire transfers; however, such
transactions will not be posted to a shareholder's bank account until the second
Business Day following the transaction.

MINIMUM ACCOUNT SIZE -- Due to the relatively high cost of maintaining smaller
accounts, the Fund reserves the right to redeem shares in any account if, as the
result of redemptions, the value of that account drops below $1,000. You will be
allowed at least 60 days, after notice by the Fund, to make an additional
investment to bring your account value up to at least $1,000 before the
redemption is processed.

SYSTEMATIC WITHDRAWAL PLAN -- Each Portfolio offers a Systematic Withdrawal Plan
("SWP") for shareholders who wish to receive regular distributions from their
account. Upon commencement of the SWP, the account must have a current value of
$2,000 or more. Shareholders may elect to receive automatic payments via ACH
wire transfers of $100 or more on a monthly, quarterly, semi-annual or annual
basis. An application form for SWP may be obtained by calling 1-800-932-7781.

Shareholders should realize that if withdrawals exceed income dividends, their
invested principal in the account will be depleted. Thus, depending on the
frequency and amounts of the withdrawal payments and/or any fluctuations in the
net asset value per share, their original investment could be exhausted
entirely. To participate in the SWP, shareholders must have their dividends
automatically reinvested. Shareholders may change or cancel the SWP at any time,
upon written notice to the Transfer Agent.

ADDITIONAL INFORMATION -- REDEMPTIONS AND EXCHANGES -- Neither the Fund nor the
Transfer Agent will be responsible for the authenticity of the redemption or
exchange instructions received by telephone if it reasonably believes those
instructions to be genuine. The Fund and the Transfer Agent will each employ
reasonable procedures to confirm that telephone instructions are genuine, and
may be liable for losses resulting from unauthorized or fraudulent telephone
transactions if it does not employ those procedures. Such procedures may include
taping of telephone conversations.

A signature guarantee is a widely accepted way to protect shareholders by
verifying the signature on certain redemption requests. The Fund requires
signature guarantees to be provided in the following circumstances: (1) written
requests for redemptions in excess of $50,000; (2) all written requests to wire
redemption proceeds; and (3) redemption requests that provide that the
redemption proceeds should be sent to an address other than the

<PAGE>

address of record or to a person other than the registered shareholder(s) for
the account. Signature guarantees can be obtained from any of the following
institutions: a national or state bank, a trust company, a federal savings and
loan association, or a broker-dealer that is a member of a national securities
exchange. The Fund does not accept guarantees from notaries public or
organizations that do not provide reimbursement in the case of fraud.

The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.

CALCULATION OF NET ASSET VALUE -- The net asset value per share of a Portfolio
is determined by dividing the total market value of that Portfolio's investments
and other assets, less any liabilities, by the total outstanding shares of that
Portfolio. Net asset value per share is determined daily as of the close of
business of the New York Stock Exchange (normally, 4:00 p.m., Eastern time) on
any Business Day. Each Portfolio will use a pricing service to provide market
quotations. With respect to fixed income securities, the pricing service may use
a matrix system of valuation which considers factors such as securities prices,
yield features, call features, ratings and developments relating to a specific
security.

PERFORMANCE

From time to time, each Portfolio may advertise its yield and total return.
These figures will be based on historical earnings and are not intended to
indicate future performance. No representation can be made regarding actual
future yields or returns. The yield of a Portfolio refers to the annualized
income generated by an investment in the Portfolio over a specified 30-day
period. The yield is calculated by assuming that the same amount of income
generated by the investment during that period is generated in each 30-day
period over one year and is shown as a percentage of the investment.

The total return of a Portfolio refers to the average compounded rate of return
on a hypothetical investment, for designated time periods (including but not
limited to the period from which the Portfolio commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions.

A Portfolio may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical), or by
financial and business publications and periodicals, broad groups of comparable
mutual funds and unmanaged indices. The performance of unmanaged indices may
assume investment of dividends but generally do not reflect deductions for
administrative and management costs, or other investment alternatives. A
Portfolio may quote Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance. A Portfolio may quote Ibbotson Associates of
Chicago, Illinois, which provides historical returns of the capital markets in
the U.S. A Portfolio may use long-term performance of these capital markets to
demonstrate general long-term risk versus reward scenarios and could include the
value of a hypothetical investment in any of the capital markets. A Portfolio
may also quote financial and business publications and periodicals as they
relate to fund management, investment philosophy, and investment techniques.

A Portfolio may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds. Measures
of volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative

<PAGE>

benchmark might be. Measures of volatility and correlation are calculated using
averages of historical data and cannot be calculated precisely.

TAXES

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action.

No attempt has been made to present a detailed explanation of the federal, state
or local income tax treatment of a Portfolio or its shareholders. Accordingly,
shareholders are urged to consult their tax advisers regarding specific
questions as to federal, state and local income taxes.

TAX STATUS OF THE PORTFOLIOS:

Each Portfolio is treated as a separate entity for federal income tax purposes
and is not combined with the Fund's other portfolios. Each Portfolio intends to
continue to qualify for the special tax treatment afforded regulated investment
companies as defined under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code). So long as a Portfolio qualifies for this special tax
treatment, it will be relieved of federal income tax on that part of its net
investment income and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) which it distributes to shareholders.

TAX STATUS OF DISTRIBUTIONS:

Each Portfolio will distribute all of its net investment income (including, for
this purpose, net short-term capital gain) to shareholders. Dividends from net
investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations. Dividends of the Fixed Income Portfolio are not
expected to qualify. Any net capital gains will be distributed annually and will
be taxed to shareholders as long-term capital gains, regardless of how long the
shareholder has held shares. Each Portfolio will make annual reports to
shareholders of the federal income tax status of all distributions, including
the amount of dividends eligible for the dividends-received deduction.

Certain securities purchased by a Portfolio (such as STRIPS, defined in
"Description of Permitted Investments and Risk Factors") are sold with original
issue discount and thus generally do not make periodic cash interest payments.
For a further description of such securities, see "Description of Permitted
Investments and Risk Factors" below. Each Portfolio will be required to include
as part of its current income the accrued discount on such obligations even
though the Portfolio has not received any interest payments on such obligations
during that period. Because each Portfolio distributes all of its net investment
income to its shareholders, a Portfolio may have to sell portfolio securities to
distribute such accrued income, which may occur at a time when the Adviser would
not have chosen to sell such securities and which may result in a taxable gain
or loss.

Income received on direct U.S. obligations is exempt from income tax at the
state level when received directly and may be exempt, depending on the state,
when received by a shareholder from a Portfolio provided certain state-specific
conditions are satisfied. A Portfolio will inform shareholders annually of the
percentage of income and distributions derived from direct U.S. obligations.
Shareholders should consult their tax advisers to

<PAGE>

determine whether any portion of the income dividends received from a Portfolio
is considered tax exempt in their particular state.

Dividends declared by a Portfolio in October, November or December of any year
and payable to shareholders of record on a date in one of those months will be
deemed to have been paid by the Portfolio and received by the shareholders on
December 31 of that year, if paid by the Portfolio at any time during the
following January.

Each Portfolio intends to make sufficient distributions prior to the end of each
calendar year to avoid liability for federal excise tax.

A sale, exchange or redemption of a Portfolio's shares is a taxable event to the
shareholder.

Income derived by a Portfolio from securities of foreign issuers may be subject
to foreign withholding taxes. A Portfolio will not be able to elect to treat
shareholders as having paid their proportionate share of such foreign taxes.

GENERAL INFORMATION

THE FUND

The Fund, an open-end investment management company, was organized under
Massachusetts law as a business trust under a Declaration of Trust dated July
18, 1991. The Declaration of Trust permits the Fund to offer separate series
("portfolios") of shares. All consideration received by the Fund for shares of
any portfolio and all assets of such portfolio belong to that portfolio and
would be subject to liabilities related thereto. The Fund reserves the right to
create and issue shares of additional portfolios.

Each Portfolio pays its (i) operating expenses, including fees of its service
providers, expenses of preparing prospectuses, proxy solicitation material and
reports to shareholders, costs of custodial services and registering its shares
under federal and state securities laws, pricing and insurance expenses,
brokerage costs, interest charges, taxes and organization expenses and (ii) pro
rata share of the Fund's other expenses, including audit and legal expenses.
Expenses not attributed to a specific portfolio are allocated across all of the
portfolios on the basis of relative net assets.

TRUSTEES OF THE FUND

The management and affairs of the Fund are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Trustees have approved contracts
under which, as described above, certain companies provide essential management
services to the Fund.

VOTING RIGHTS

Each share held entitles the shareholder of record to one vote. Each Portfolio
will vote separately on matters relating solely to it. As a Massachusetts
business trust, the Fund is not required to hold annual meetings of shareholders
but shareholders' approval will be sought for certain changes in the operation
of the Fund and for the election of Trustees under certain circumstances.

In addition, a Trustee may be removed by the remaining Trustees or by
shareholders at a special meeting called upon written request of shareholders
owning at least 10% of the outstanding shares of the Fund. In the event that
such a meeting is requested, the Fund

<PAGE>

will provide appropriate assistance and information to the shareholders
requesting the meeting.

REPORTING

The Fund issues unaudited financial information semiannually and audited
financial statements annually for each Portfolio. The Fund also furnishes
periodic reports and, as necessary, proxy statements to shareholders of record.

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to The Advisors' Inner Circle Fund,
P.O. Box 419009, Kansas City, Missouri 64141-6009 or directed to 1-800-932-7781.
Purchase, redemption and exchange orders should be placed with the Transfer
Agent at the same address or by calling 1-800-808-4921.

DIVIDENDS AND DISTRIBUTIONS

Substantially all of the net investment income (excluding capital gain) of the
Equity Value and Small Cap Value Portfolios is distributed in the form of
dividends to shareholders of record on the last Business Day of each quarter.
The Fixed Income Portfolio declares dividends of substantially all of its net
investment income (exclusive of capital gain) daily and distributes such
dividends on the first Business Day of each month. Shares of the Fixed Income
Portfolio purchased begin earning dividends on the Business Day following
receipt of payment by the Transfer Agent. Normally, this will occur within two
Business Days after an order is effective. If any capital gain is realized for
either Portfolio, substantially all of it will be distributed at least annually.

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Transfer Agent at least 15 days prior to the distribution.
Shareholders may receive payments for cash distributions in the form of a check
or by Federal Reserve wire transfer or ACH wire transfer.

Dividends and other distributions of a Portfolio are paid on a per share basis.
The value of each share will be reduced by the amount of the payment. If shares
are purchased shortly before the record date for a dividend or the distribution
of capital gains, a shareholder will pay the full price for the shares and
receive some portion of the price back as a taxable dividend or distribution.

COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Fund. Arthur Andersen LLP
serves as the independent public accountants of the Fund.

CUSTODIAN

CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101 acts as custodian (the "Custodian") of the Fund. The
Custodian holds cash, securities and other assets of the Fund as required by the
Investment Company Act of 1940, as amended (the "1940 Act").

<PAGE>

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of certain permitted investments and risk factors
for the Portfolios:

AMERICAN DEPOSITARY RECEIPTS ("ADRS") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the
issuer of the security underlying the receipt and a depositary, whereas, an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES -- Asset-backed securities are secured by non-mortgage
assets such as company receivables, truck and auto loans, leases and credit card
receivables. Such securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in the underlying pools
of assets. Such securities also may be debt instruments, which are also known as
collateralized obligations and are generally issued as the debt of a special
purpose entity, such as a trust, organized solely for the purpose of owning such
assets and issuing such debt.

Asset-backed securities are not issued or guaranteed by the U.S. Government, its
agencies or instrumentalities; however, the payment of principal and interest on
such obligations may be guaranteed up to certain amounts and for a certain
period by a letter of credit issued by a financial institution (such as a bank
or insurance company) unaffiliated with the issuers of such securities. The
purchase of asset-backed securities raises risk considerations peculiar to the
financing of the instruments underlying such securities. For example, there is a
risk that another party could acquire an interest in the obligations superior to
that of the holders of the asset-backed securities. There also is the
possibility that recoveries on repossessed collateral may not, in some cases, be
available to support payments on those securities. Asset-backed securities
entail prepayment risk, which may vary depending on the type of asset, but is
generally less than the prepayment risk associated with mortgage-backed
securities. In addition, credit card receivables are unsecured obligations of
the card holder.

The market for asset-backed securities is at a relatively early stage of
development. Accordingly, there may be a limited secondary market for such
securities.

CONVERTIBLE SECURITIES -- Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics of both fixed income and
equity securities. Because of the conversion feature, the market value of a
convertible security tends to move with the market value of the underlying
stock. The value of a convertible security is also affected by prevailing
interest rates, the credit quality of the issuer and any call provisions.

ILLIQUID SECURITIES -- Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on a Portfolio's books. An illiquid security includes a demand
instrument with a demand notice period exceeding seven days, where there is no
secondary market for such security, and repurchase agreements with a remaining
term to maturity in excess of seven days.

<PAGE>

MONEY MARKET INSTRUMENTS --

Bankers' Acceptances -- Bankers' acceptances are bills of exchange or time
drafts drawn on and accepted by a commercial bank. Bankers' acceptances are
used by corporations to finance the shipment and storage of goods.
Maturities are generally six months or less.

Certificates of Deposit -- Certificates of deposit are interest bearing
instruments with a specific maturity. They are issued by banks and savings
and loan institutions in exchange for the deposit of funds and normally can
be traded in the secondary market prior to maturity. Certificates of deposit
with penalties for early withdrawal will be considered illiquid.

Commercial Paper -- Commercial paper is a term used to describe unsecured
short-term promissory notes issued by banks, municipalities, corporations
and other entities. Maturities on these issues vary from a few to 270 days.

Investment Companies -- The Portfolios may purchase shares of other
investment companies that invest solely in money market instruments as
permitted by the 1940 Act and the rules and regulations thereunder. Under
these rules and regulations, the Portfolios are prohibited from acquiring
the securities of other investment companies if, as a result of such
acquisition, a Portfolio owns more than 3% of the total voting stock of the
company; securities issued by any one investment company represent more than
5% of the total Portfolio's assets; or securities (other than treasury
stock) issued by all investment companies represent more than 10% of the
total assets of the Portfolio. These investment companies typically incur
fees that are separate from those fees incurred directly by the investing
Portfolio. A Portfolio's purchase of such investment company securities
results in the layering of expenses, such that shareholders would indirectly
bear a proportionate share of the operating expenses of such investment
companies, including advisory fees.

Repurchase Agreements -- Repurchase agreements are agreements by which a
Portfolio obtains a security and simultaneously commits to return the
security to the seller at an agreed upon price on an agreed upon date within
a number of days from the date of purchase. The Custodian will hold the
security as collateral for the repurchase agreement. Each Portfolio bears a
risk of loss in the event the other party defaults on its obligations and
the Portfolio is delayed or prevented from exercising its right to dispose
of the collateral or if the Portfolio realizes a loss on the sale of the
collateral. Each Portfolio will enter into repurchase agreements only with
financial institutions deemed to present minimal risk of bankruptcy during
the term of the agreement based on established guidelines. Repurchase
agreements are considered loans under the 1940 Act.

Time Deposits -- Time deposits are non-negotiable receipts issued by a bank
in exchange for the deposit of funds. Like a certificate of deposit, it
earns a specified rate of interest over a definite period of time; however,
it cannot be traded in the secondary market. Time deposits are considered to
be illiquid securities.

U.S. Government Agencies -- Obligations issued or guaranteed by agencies of
the U.S. Government, including, among others, the Federal Farm Credit Bank,
the Federal Housing Administration and the Small Business Administration,
and obligations issued or guaranteed by instrumentalities of the U.S.
Government, including, among others, the Federal Home Loan Mortgage
Corporation, the Federal Land Banks and the U.S. Postal Service. Some of
these securities are supported by the full faith and credit of

<PAGE>

the U.S. Treasury (e.g., Government National Mortgage Association), others
are supported by the right of the issuer to borrow from the Treasury (e.g.,
Federal Farm Credit Bank), while still others are supported only by the
credit of the instrumentality (e.g., Federal National Mortgage Association).
Guarantees of principal by agencies or instrumentalities of the U.S.
Government may be a guarantee of payment at the maturity of the obligation
so that in the event of a default prior to maturity there might not be a
market and thus no means of realizing on the obligation prior to maturity.
Guarantees as to the timely payment of principal and interest do not extend
to the value or yield of these securities nor to the value of the
Portfolio's shares.

U.S. Treasury Obligations -- U.S. Treasury obligations consist of bills,
notes and bonds issued by the U.S. Treasury and separately traded interest
and principal component parts of such obligations that are transferable
through the Federal book-entry system known as Separately Traded Registered
Interest and Principal Securities ("STRIPS").

MORTGAGE BACKED SECURITIES -- Mortgage-backed securities are instruments that
entitle the holder to a share of all interest and principal payments from
mortgages underlying the security. The mortgages backing these securities
include conventional thirty-year fixed rate mortgages, graduated payment
mortgages, adjustable rate mortgages, and balloon mortgages. During periods of
declining interest rates, prepayment of mortgages underlying mortgage-backed
securities can be expected to accelerate. Prepayment of mortgages which underlie
securities purchased at a premium often results in capital losses, while
prepayment of mortgages purchased at a discount often results in capital gains.
Because of these unpredictable prepayment characteristics, it is often not
possible to predict accurately the average life or realized yield of a
particular issue.

Government Pass-Through Securities: These are securities that are issued or
guaranteed by a U.S. Government agency representing an interest in a pool of
mortgage loans. The primary issuers or guarantors of these mortgage-backed
securities are the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA") and the Federal Home Loan
Mortgage Corporation ("FHLMC"). FNMA and FHLMC obligations are not backed by the
full faith and credit of the U.S. Government as GNMA certificates are, but FNMA
and FHLMC securities are supported by the instrumentalities' right to borrow
from the U.S. Treasury. GNMA, FNMA and FHLMC each guarantee timely distributions
of interest to certificate holders. GNMA and FNMA also each guarantee timely
distributions of scheduled principal. FHLMC has in the past guaranteed only the
ultimate collection of principal of the underlying mortgage loan; however, FHLMC
now issues mortgage-backed securities (FHLMC Gold PCS) which also guarantee
timely payment of monthly principal reductions. Government and private
guarantees do not extend to the securities' value, which is likely to vary
inversely with fluctuations in interest rates.

Private Pass-Through Securities: These are mortgage-backed securities issued by
a non-governmental entity, such as a trust. These securities include CMOs and
REMICs that are rated in one of the top two rating categories. While they are
generally structured with one or more types of credit enhancement, private
pass-through securities typically lack a guarantee by an entity having the
credit status of a governmental agency or instrumentality.

CMOs: CMOs are debt obligations of multiclass pass-through certificates issued
by agencies or instrumentalities of the U.S. Government or by private
originators or investors in mortgage loans. In a CMO, series of bonds or
certificates are usually issued in multiple classes. Principal and interest paid
on the underlying mortgage assets may be allocated

<PAGE>

among the several classes of a series of a CMO in a variety of ways. Each class
of a CMO, often referred to as a "tranche," is issued with a specific fixed or
floating coupon rate and has a stated maturity or final distribution date.
Principal payments on the underlying mortgage assets may cause CMOs to be
retired substantially earlier than their stated maturities or final distribution
dates, resulting in a loss of all or part of any premium paid.

REMICs: A REMIC is a CMO that qualifies for special tax treatment under the
Code and invests in certain mortgages principally secured by interests in real
property. Investors may purchase beneficial interests in REMICs, which are known
as "regular" interests, or "residual" interests. Guaranteed REMIC pass-through
certificates ("REMIC Certificates") issued by FNMA or FHLMC represent beneficial
ownership interests in a REMIC trust consisting principally of mortgage loans or
FNMA, FHLMC or GNMA-guaranteed mortgage pass-through certificates. For FHLMC
REMIC Certificates, FHLMC guarantees the timely payment of interest, and also
guarantees the payment of principal as payments are required to be made on the
underlying mortgage participation certificates. FNMA REMIC Certificates are
issued and guaranteed as to timely distribution of principal and interest by
FNMA.

Parallel Pay Securities; PAC Bonds: Parallel pay CMOs and REMICs are structured
to provide payments of principal on each payment date to more than one class.
These simultaneous payments are taken into account in calculating the stated
maturity date or final distribution date of each class, which must be retired by
its stated maturity date or final distribution date, but may be retired earlier.
Planned Amortization Class CMOs ("PAC Bonds") generally require payments of a
specified amount of principal on each payment date. PAC Bonds are always
parallel pay CMOs with the required principal payment on such securities having
the highest priority after interest has been paid to all classes.

Stripped Mortgage-Backed Securities ("SMBs"): SMBs are usually structured with
two classes that receive specified proportions of the monthly interest and
principal payments from a pool of mortgage securities. One class may receive all
of the interest payments and is thus termed an interest-only class ("IO"), while
the other class may receive all of the principal payments and is thus termed the
principal-only class ("PO"). The value of IOs tends to increase as rates rise
and decrease as rates fall; the opposite is true of POs. SMBs are extremely
sensitive to changes in interest rates because of the impact thereon of
prepayment of principal on the underlying mortgage securities. The market for
SMBs is not as fully developed as other markets; SMBs therefore may be illiquid.

Risk Factors: Due to the possibility of prepayments of the underlying mortgage
instruments, mortgage-backed securities generally do not have a known maturity.
In the absence of a known maturity, market participants generally refer to an
estimated average life. An average life estimate is a function of an assumption
regarding anticipated prepayment patterns, based upon current interest rates,
current conditions in the relevant housing markets and other factors. The
assumption is necessarily subjective, and thus different market participants can
produce different average life estimates with regard to the same security. There
can be no assurance that estimated average life will be a security's actual
average life.

REITS -- REITs pool investors' funds for investment primarily in income
producing real estate or real estate related loans or interests. A REIT is not
taxed on income distributed to its shareholders or unitholders if it complies
with regulatory requirements. Equity REITs invest the majority of their assets
directly in real property and derive their income primarily from rents and
capital gains from appreciation realized through property sales. A

<PAGE>

shareholder in a Portfolio should realize that by investing in REITs indirectly
through the Portfolio, he or she will bear not only his or her proportionate
share of the expenses of the Portfolio, but also indirectly, similar expenses of
underlying REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants.

SECURITIES OF FOREIGN ISSUERS -- There are certain risks connected with
investing in foreign securities. These include risks of adverse political and
economic developments (including possible governmental seizure or
nationalization of assets), the possible imposition of exchange controls or
other governmental restrictions, less uniformity in accounting and reporting
requirements, the possibility that there will be less information on such
securities and their issuers available to the public, the difficulty of
obtaining or enforcing court judgments abroad, restrictions on foreign
investments in other jurisdictions, difficulties in effecting repatriation of
capital invested abroad, and difficulties in transaction settlements and the
effect of delay on shareholder equity. Foreign securities may be subject to
foreign taxes, and may be less marketable than comparable U.S. securities. The
value of a Portfolio's investments denominated in foreign currencies will depend
on the relative strengths of those currencies and the U.S. dollar, and a
Portfolio may be affected favorably or unfavorably by changes in the exchange
rates or exchange control regulations between foreign currencies and the U.S.
dollar. Changes in foreign currency exchange rates also may affect the value of
dividends and interest earned, gains and losses realized on the sale of
securities and net investment income and gains, if any, to be distributed to
shareholders by a Portfolio.

U.S. GOVERNMENT AGENCIES -- Obligations issued or guaranteed by agencies of the
U.S. Government, including, among others, the Federal Farm Credit Bank, the
Federal Housing Administration and the Small Business Administration, and
obligations issued or guaranteed by instrumentalities of the U.S. Government,
including, among others, the FHLMC, the Federal Land Banks and the U.S. Postal
Service. Some of these securities are supported by the full faith and credit of
the U.S. Treasury (e.g., GNMA securities), others are supported by the right of
the issuer to borrow from the Treasury (e.g., Federal Farm Credit Bank
securities), while still others are supported only by the credit of the
instrumentality (e.g., FNMA securities). Guarantees of principal by agencies or
instrumentalities of the U.S. Government may be a guarantee of payment at the
maturity of the obligation so that in the event of a default prior to maturity
there might not be a market and thus no means of realizing on the obligation
prior to maturity. Guarantees as to the timely payment of principal and interest
do not extend to the value or yield of these securities nor to the value of the
Portfolio's shares.

U.S. TREASURY OBLIGATIONS -- U.S. Treasury obligations consist of bills, notes
and bonds issued by the U.S. Treasury and separately traded interest and
principal component parts of such obligations that are transferable through the
Federal book-entry system known as Separately Traded Registered Interest and
Principal Securities ("STRIPS").

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is no secondary market
for such security.

<PAGE>

TABLE OF CONTENTS

PAGE
----

Summary....................................................... 2

Expense Summary............................................... 4

Financial Highlights.......................................... 5

The Fund and the Portfolios................................... 8

Investment Objectives......................................... 8

Investment Policies........................................... 8

Risk Factors.................................................. 11

Investment Limitations........................................ 12

The Adviser................................................... 13

The Administrator............................................. 14

The Transfer Agent............................................ 14

The Distributor............................................... 14

Portfolio Transactions........................................ 14

Purchase and Redemption of Shares............................. 15

Performance................................................... 18

Taxes......................................................... 19

General Information........................................... 20

Description of Permitted Investments and Risk Factors......... 22

<PAGE>

FUND:
THE ADVISORS' INNER CIRCLE FUND

PORTFOLIOS:
CLOVER CAPITAL EQUITY VALUE FUND
CLOVER CAPITAL FIXED INCOME FUND
CLOVER CAPITAL SMALL CAP VALUE FUND

ADVISER:
CLOVER CAPITAL MANAGEMENT, INC.

DISTRIBUTOR:
CCM SECURITIES, INC.

ADMINISTRATOR:
SEI FUND RESOURCES

LEGAL COUNSEL:
MORGAN, LEWIS & BOCKIUS LLP

INDEPENDENT PUBLIC ACCOUNTANTS:
ARTHUR ANDERSEN LLP

FEBRUARY 28, 1997

<PAGE>

Fund:
THE ADVISORS' INNER CIRCLE FUND

Portfolios:
CLOVER CAPITAL EQUITY VALUE FUND
CLOVER CAPITAL FIXED INCOME FUND
CLOVER CAPITAL SMALL CAP VALUE FUND

Investment Adviser:
CLOVER CAPITAL MANAGEMENT, INC.

This Statement of Additional Information is not a prospectus and relates only to
the Clover Capital Equity Value Fund (the "Equity Value Portfolio"), Clover
Capital Small Cap Value Fund (the "Small Cap Value Fund") and Clover Capital
Fixed Income Fund (the "Fixed Income Portfolio") (each a "Portfolio" and
collectively, the "Portfolios"). It is intended to provide additional
information regarding the activities and operations of The Advisor's Inner
Circle Fund (the "Fund") and the Portfolios and should be read in conjunction
with the Portfolios' prospectus dated February 28, 1997. Prospectuses for the
Portfolios may be obtained by calling 1-800-932- 7781.

TABLE OF CONTENTS

THE FUND ................................................................S-2
DESCRIPTION OF PERMITTED INVESTMENTS.....................................S-2
INVESTMENT LIMITATIONS...................................................S-6
THE ADVISER..............................................................S-9
THE ADMINISTRATOR.......................................................S-10
THE DISTRIBUTOR.........................................................S-11
TRUSTEES AND OFFICERS OF THE FUND.......................................S-12
COMPUTATION OF YIELD AND TOTAL RETURN...................................S-15
PURCHASE AND REDEMPTION OF SHARES.......................................S-16
DETERMINATION OF NET ASSET VALUE........................................S-16
TAXES ...............................................................S-17
PORTFOLIO TRANSACTIONS..................................................S-18
DESCRIPTION OF SHARES...................................................S-21
SHAREHOLDER LIABILITY...................................................S-21
LIMITATION OF TRUSTEES' LIABILITY.......................................S-22
5% SHAREHOLDERS.........................................................S-22
EXPERTS ...............................................................S-23
FINANCIAL STATEMENTS....................................................S-23
APPENDIX ...............................................................A- 1

February 28, 1997

<PAGE>

THE FUND

This Statement of Additional Information relates only to the Clover Capital
Equity Value Fund (the "Equity Value Portfolio"), Clover Capital Small Cap Value
Fund (the "Small Cap Value Portfolio") and Clover Capital Fixed Income Fund (the
"Fixed Income Portfolio") (each a "Portfolio"). Each Portfolio is a separate
series of The Advisors' Inner Circle Fund (the "Fund"), an open-end investment
management company established under Massachusetts law as a Massachusetts
business trust under a Declaration of Trust dated July 18, 1991. The Declaration
of Trust permits the Fund to offer separate series ("portfolios") of shares of
beneficial interest ("shares"). Each portfolio is a separate mutual fund, and
each share of each portfolio represents an equal proportionate interest in that
portfolio. See "Description of Shares." No investment in shares of a portfolio
should be made without first reading that portfolio's prospectus. Capitalized
terms not defined herein are defined in the Prospectus offering shares of the
Portfolios.

DESCRIPTION OF PERMITTED INVESTMENTS

The Fixed Income Portfolio may invest in securities issued by the Government
National Mortgage Association ("GNMA"), a wholly-owned U.S. Government
corporation which guarantees the timely payment of principal and interest. The
market value and interest yield of these instruments can vary due to market
interest rate fluctuations and early prepayments of underlying mortgages. These
securities represent ownership in a pool of federally insured mortgage loans.
GNMA certificates consist of underlying mortgages with a maximum maturity of 30
years. However, due to scheduled and unscheduled principal payments, GNMA
certificates have a shorter average maturity and, therefore, less principal
volatility than a comparable 30-year bond. Since prepayment rates vary widely,
it is not possible to accurately predict the average maturity of a particular
GNMA pool. The scheduled monthly interest and principal payments relating to
mortgages in the pool will be "passed through" to investors. GNMA securities
differ from conventional bonds in that principal is paid back to the certificate
holders over the life of the loan rather than at maturity. As a result, there
will be monthly scheduled payments of principal and interest. In addition, there
may be unscheduled principal payments representing prepayments on the underlying
mortgages. Although GNMA certificates may offer yields higher than those
available from other types of U.S. Government securities, GNMA certificates may
be less effective than other types of securities as a means of "locking in"
attractive long-term rates because of the prepayment feature. For instance, when
interest rates decline, the value of a GNMA certificate likely will not rise as
much as comparable debt securities due to the prepayment feature. In addition,
these prepayments can cause the price of a GNMA certificate originally purchased
at a premium to decline in price to its par value, which may result in a loss.

The Fixed Income Portfolio may invest in mortgage-backed securities and
asset-backed securities. Two principal types of mortgage-backed securities are
collateralized mortgage obligations ("CMOs") and real estate mortgage investment
conduits ("REMICs"), which are rated in one of the top two categories by
Standard & Poor's Corporation ("S&P") or Moody's Investors Services, Inc.
("Moody's"). CMOs are securities collateralized by mortgages, mortgage pass-

S-2
<PAGE>

throughs, mortgage pay-through bonds (bonds representing an interest in a
pool of mortgages where the cash flow generated from the mortgage collateral
pool is dedicated to bond repayment), and mortgage-backed bonds (general
obligations of the issuers payable out of the issuers' general funds and
additionally secured by a first lien on a pool of single family detached
properties). CMOs typically are issued with a number of classes or series which
have different maturities and which are retired using cash flow from underlying
collateral according to a specified plan.

Investors purchasing such CMOs in the shortest maturities receive or are
credited with their pro rata portion of the scheduled payments of interest and
principal on the underlying mortgages plus all unscheduled prepayments of
principal up to a predetermined portion of the total CMO obligation. Until that
portion of such CMO obligation is repaid, investors in the longer maturities
receive interest only. Accordingly, the CMOs in the longer maturity series are
less likely than other mortgage pass-throughs to be prepaid prior to their
stated maturity. Although some of the mortgages underlying CMOs may be supported
by various types of insurance, and some CMOs may be backed by GNMA certificates
or other mortgage pass-throughs issued or guaranteed by U.S. Government agencies
or instrumentalities, the CMOs themselves are not generally guaranteed.

REMICs, which were authorized under the Tax Reform Act of 1986, are private
entities formed for the purpose of holding a fixed pool of mortgages secured by
an interest in real property. REMICs are similar to CMOs in that they issue
multiple classes of securities.

In addition to mortgage-backed securities, the Fixed Income Portfolio may invest
in securities secured by asset-backed securities including company receivables,
truck and auto loans, leases, and credit card receivables. These issues may be
traded over-the-counter and typically have a short-intermediate maturity
structure depending on the paydown characteristics of the underlying financial
assets which are passed through to the security holder.

S-3

<PAGE>

The Fixed Income and Small Cap Value Portfolios may also invest in real estate
investment trusts ("REITs"), which pool investors' funds for investment in
income producing commercial real estate or real estate related loans or
interests.

A REIT is not taxed on income distributed to its shareholders or unitholders if
it complies with regulatory requirements relating to its organization,
ownership, assets and income, and with a regulatory requirement that it
distribute to its shareholders or unitholders at least 95% of its taxable income
for each taxable year. Generally, REITs can be classified as Equity REITs,
Mortgage REITs and Hybrid REITs. Equity REITs invest the majority of their
assets directly in real property and derive their income primarily from rents
and capital gains from appreciation realized through property sales. Mortgage
REITs invest the majority of their assets in real estate mortgages and derive
their income primarily from interest payments. Hybrid REITs combine the
characteristics of both Equity and Mortgage REITs. A shareholder in the
Portfolio should realize that by investing in REITs indirectly through the
Portfolio, he or she will bear not only his or her proportionate share of the
expenses of the Portfolio, but also indirectly, similar expenses of underlying
REITs.

A Portfolio may be subject to certain risks associated with the direct
investments of the REITs. REITs may be affected by changes in the value of their
underlying properties and by defaults by borrowers or tenants. Mortgage REITs
may be affected by the quality of the credit extended. Furthermore, REITs are
dependent on specialized management skills. Some REITs may have limited
diversification and may be subject to risks inherent in financing a limited
number of properties. REITs depend generally on their ability to generate cash
flow to make distributions to shareholders or unitholders, and may be subject to
defaults by borrowers and to self-liquidations. 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 1940 Act.

Certain of the investments of the Portfolios may include U.S. Government agency
securities. Agencies of the United States Government which issue obligations
consist of, among others, the Export Import Bank of the United States, Farmers
Home Administration, Federal Farm Credit Bank, Federal Housing Administration,
GNMA, Maritime Administration, Small Business Administration and the Tennessee
Valley Authority. Obligations of instrumentalities of the U.S. Government
include securities issued by, among others, Federal Home Loan Banks, Federal
Home Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal Land
Banks, Federal National Mortgage Association ("FNMA") and the United States
Postal Service. Some of these securities are supported by the full faith and
credit of the U.S. Treasury (e.g., GNMA securities), others are supported by the
right of the issuer to borrow from the Treasury and still others are supported
only by the credit of the instrumentality (e.g., FNMA securities). Guarantees of
principal by agencies or instrumentalities of the U.S. Government may be a
guarantee of payment at the maturity of the obligation so that in the event of a
default prior to maturity, there might not be a market and thus no means of
realizing the value of the obligation prior to maturity.

S-4

<PAGE>

Certain of the investments of the Portfolios may include bankers' acceptances
which are bills of exchange or time drafts drawn on and accepted by a commercial
bank. They are used by corporations to finance the shipment and storage of goods
and to furnish dollar exchange. Maturities are generally six months or less.

Certain of the investments of the Portfolios may include certificates of deposit
which are negotiable interest bearing instruments with a specific maturity.
Certificates of deposit are issued by banks and savings and loan institutions in
exchange for the deposit of funds and normally can be traded in the secondary
market, prior to maturity.

Certain of the investments of the Portfolios may include time deposits which are
non-negotiable receipts issued by a bank in exchange for the deposit of funds.
Like certificates of deposit, they earn a specified rate of interest over a
definite period of time; however, it cannot be traded in the secondary market.

Certain of the investments of the Portfolios may include commercial paper
instruments which are unsecured short-term promissory notes issued by
corporations and other entities. Maturities on these issues vary generally from
a few days to nine months.

The Fixed Income Portfolio may invest in variable or floating rate instruments
which may involve a demand feature and may include variable amount master demand
notes which may or may not be backed by bank letters of credit. The holder of an
instrument with a demand feature may tender the instrument back to the issuer at
par prior to maturity. A variable amount master demand note is issued pursuant
to a written agreement between the issuer and the holder, its amount may be
increased by the holder or decreased by the holder or issuer, it is payable on
demand, and the rate of interest varies based upon an agreed formula. The
quality of the underlying credit must, in the opinion of the Adviser, be
equivalent to the long-term bond or commercial paper ratings applicable to
permitted investments for the Fixed Income Portfolio. The Adviser will monitor
on an ongoing basis the earnings power, cash flow and liquidity ratios of the
issuers of such instruments and will similarly monitor the ability of an issuer
of a demand instrument to pay principal and interest on demand.

Repurchase agreements are agreements by which a person (e.g., a Portfolio)
obtains a security and simultaneously commits to return the security to the
seller (a member bank of the Federal Reserve System or a primary securities
dealer, as recognized by the Federal Reserve Bank of New York) at an agreed upon
price (including principal and interest) on an agreed upon date within a number
of days (usually not more than seven) from the date of purchase. 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 underlying security. A
repurchase agreement 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.

S-5

<PAGE>

Repurchase agreements are considered to be loans by each Portfolio for purposes
of its investment limitations. The repurchase agreements entered into by the
Portfolios will provide that the underlying security at all times shall have a
value at least equal to 102% of the resale price stated in the agreement (the
Adviser monitors compliance with this requirement). Under all repurchase
agreements entered into by the Portfolios, the custodian or its agent must take
possession of the underlying collateral. However, if the seller defaults, the
Portfolios could realize a loss on the sale of the underlying security to the
extent that the proceeds of sale, including accrued interest, are less than the
resale price provided in the agreement including interest. In addition, even
though the Bankruptcy Code provides protection for most repurchase agreements,
if the seller should be involved in bankruptcy or insolvency proceedings, the
Portfolios may incur delay and costs in selling the underlying security or may
suffer a loss of principal and interest if the Portfolios are treated as an
unsecured creditor and are required to return the underlying security to the
seller's estate.

The Fixed Income Portfolio may invest in U.S. dollar denominated fixed income
securities of foreign issuers which are traded in the United States. In
addition, the Equity Value Portfolio may invest in American Depositary Receipts.
These instruments may subject the Portfolio to investment risks that differ in
some respects from those related to investments in obligations of U.S. domestic
issuers. Such risks include future adverse political and economic developments,
the possible imposition of withholding taxes on interest or other income,
possible seizure, nationalization, or expropriation of foreign deposits, the
possible establishment of exchange controls or taxation at the source, greater
fluctuations in value due to changes in exchange rates, or the adoption of other
foreign governmental restrictions which might adversely affect the payment of
principal and interest on such obligations. Foreign issuers of securities or
obligations are often subject to accounting treatment and engage in business
practices different from those respecting domestic issuers of similar securities
or obligations. Foreign branches of U.S. banks and foreign banks may be subject
to less stringent reserve requirements than those applicable to domestic
branches of U.S. banks.

The Fixed Income Portfolio may purchase obligations of supranational agencies.
Currently, the Portfolio only intends to invest in obligations issued or
guaranteed by the Asian Development Bank, Inter-American Development Bank,
International Bank for Reconstruction and Development (World Bank), African
Development Bank, European Coal and Steel Community, European Economic
Community, European Investment Bank and Nordic Investment Bank.

It is an operating policy of the Equity Value and Fixed Income Portfolios not to
write or purchase puts, calls, options or combinations thereof.

The Equity Value and Small Cap Value Portfolios may invest in warrants in
accordance with the Prospectus.

S-6

<PAGE>

INVESTMENT LIMITATIONS

Fundamental Policies

The following investment limitations are fundamental policies of each Portfolio
which cannot be changed with respect to a Portfolio without the consent of the
holders of a majority of that Portfolio's outstanding shares. The term "majority
of the outstanding shares" means the vote of (i) 67% or more of Portfolio's
shares present at a meeting, if more than 50% of the outstanding shares of a
Portfolio are present or represented by proxy, or (ii) more than 50% of a
Portfolio's outstanding shares, whichever is less.

Each Portfolio may not:

1. Invest in companies for the purpose of exercising control.

2. Make loans, except that a Portfolio may purchase or hold debt
instruments in accordance with its investment objective and policies,
and a Portfolio may enter into repurchase agreements, as described in
the Prospectus and in this Statement of Additional Information.

3. Make short sales of securities, maintain a short position or purchase
securities on margin, except that a Portfolio may obtain short-term
credits as necessary for the clearance of security transactions.

4. Act as an underwriter of securities of other issuers except as it may
be deemed an underwriter in selling a portfolio security.

5. Purchase securities of other investment companies except as permitted
by the 1940 Act and the rules and regulations thereunder.

6. Invest in interests in oil, gas or other mineral exploration or
development programs and oil, gas or mineral leases.

The Equity Value and Fixed Income Funds may not:

1. Acquire more than 10% of the voting securities of any one issuer.

2. Borrow money except for temporary or emergency purposes and then only
in an amount not exceeding 10% of the value of total assets. Any
borrowing will be done from a bank and, to the extent that such
borrowing exceeds 5% of the value of the Portfolio's assets, asset
coverage of at least 300% is required. In the event that such asset
coverage shall at any time fall below 300%, the Portfolio shall, within
three days thereafter or such longer period as the SEC may prescribe by
rules and regulations, reduce the amount of its borrowings to such an
extent that the asset coverage of such borrowings shall be at least

S-7

<PAGE>

300%. This borrowing provision is included solely for temporary
liquidity or emergency purposes. All borrowings will be repaid before
making investments and any interest paid on such borrowings will reduce
income.

3. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings as disclosed in the fundamental policies described in the
Prospectus in aggregate amounts not to exceed 10% of total assets taken
at current value at the time of the incurrence of such loan.

4. Purchase or sell real estate, real estate limited partnership
interests, futures contracts, commodities or commodities contracts,
provided that this shall not prevent a Portfolio from investing in
readily marketable securities of issuers that can invest in real estate
or commodities, institutions that issue mortgages, real estate
investment trusts that deal in real estate or interests therein
pursuant to a Portfolio's investment objective and policies.

5. Issue senior securities (as defined in the 1940 Act) except in
connection with permitted borrowings as described above or as permitted
by rule, regulation or order of the SEC.

6. Purchase or retain securities of an issuer if, to the knowledge of the
Fund, an officer, trustee, partner or director of the Fund or any
investment adviser of the Fund owns beneficially more than 1/2 of 1% of
the shares or securities of such issuer and all such officers,
trustees, partners and directors owning more than 1/2 of 1% of such
shares or securities together own more than 5% of such shares or
securities.

The Small Cap Value Fund may not:

1. With respect to 75% of its assets, acquire more than 10% of the voting
securities of any one issuer.

2. Borrow money except for temporary or emergency purposes and then only
in an amount not exceeding 10% of the value of total assets. To the
extent that such borrowing exceeds 5% of the value of the Portfolio's
assets, asset coverage of at least 300% is required. In the event that
such asset coverage shall at any time fall below 300%, the Portfolio
shall, within three days thereafter or such longer period as the SEC
may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings
shall be at least 300% All borrowings will be repaid before making
investments and any interest paid on such borrowings will reduce
income.

3. Pledge, mortgage or hypothecate assets except to secure temporary
borrowings permitted by 2 above.

4. Purchase or sell real estate, real estate limited partnership
interests, commodities or commodities contracts, provided that this
shall not prevent a Portfolio from investing in

S-8

<PAGE>

readily marketable securities of issuers that can invest in real estate
or commodities, institutions that issue mortgages and real estate
investment trusts pursuant to a Portfolio's investment objective and
policies.

5. Issue senior securities (as defined in the 1940 Act) except as
permitted by rule, regulation or order of the SEC.

Non-Fundamental Policies

In addition to the non-fundamental investment policies described elsewhere in
the Prospectus and Statement of Additional Information, the following investment
limitations are non-fundamental and may be changed by the Fund's Board of
Trustees without shareholder approval.

The Equity Value and Fixed Income Funds

1. No Portfolio may invest in illiquid securities in an amount exceeding,
in the aggregate, 10% of a portfolio's assets. An illiquid security is
a security which cannot be disposed of promptly (within seven days),
and in the usual course of business without a loss, and includes
repurchase agreements maturing in excess of seven days, time deposits
with a withdrawal penalty, non-negotiable instruments and instruments
for which no market exists.

2. No Portfolio may not invest its assets in securities of any investment
company, except as permitted by the 1940 Act or pursuant to an order of
exemption therefrom.

Except for non-fundamental policy number 1, the foregoing percentages will apply
at the time of the purchase of a security and shall not be considered violated
unless an excess occurs or exists immediately after and as a result of a
purchase of such security.

The Small Cap Value Fund

1. The Portfolio may not invest in illiquid securities in an amount
exceeding, in the aggregate, 15% of its net assets. An illiquid
security is a security which cannot be disposed of promptly (within
seven days), and in the usual course of business without a loss, and
includes repurchase agreements maturing in excess of seven days, time
deposits with a withdrawal penalty, non-negotiable instruments and
instruments for which no market exists.

2. The Portfolio may not invest its assets in securities of any investment
company, except as permitted by the 1940 Act or pursuant to an order of
exemption therefrom.

S-9

<PAGE>

THE ADVISER

The Fund and Clover Capital Management, Inc. have entered into an advisory
agreement dated November 14, 1991 (the "Advisory Agreement"). The Advisory
Agreement provides that the Adviser shall not be protected against any liability
to the Fund or its shareholders by reason of willful misfeasance, bad faith or
gross negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.

For the fiscal years ended October 31, the Portfolios paid the following
advisory fees:

Advisory Fees Paid Advisory Fees Waived
------------------------------------------- ---------------------------------------
1994 1995 1996 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Equity Value Portfolio $110,578 $238,624 $437,862 $30,260 $39,599 $73,383
Fixed Income Portfolio $0 $0 $ 23,932 $38,976* $68,168* $53,322
Small Cap Portfolio N/A N/A $0 N/A N/A $14,442**
</TABLE>

*Reimbursement of fees by the Adviser in the amount of $16,812 and $17,918 with
respect to the Fixed Income Portfolio for the fiscal years of 1995 and 1994,
respectively.

**Reimbursement of fees by the Adviser in the amount of $51,578 with respect to
the Small Cap Portfolio for the fiscal year of 1996.

The continuance of the Advisory Agreement must be specifically approved at least
annually (i) by the vote of the Trustees or by a vote of the shareholders of the
Portfolio, and (ii) by the vote of a majority of the Trustees who are not
parties to the Advisory Agreement or "interested persons" of any party thereto,
cast in person at a meeting called for the purpose of voting on such approval.
The Advisory Agreement will terminate automatically in the event of its
assignment, and is terminable at any time without penalty by the Trustees of the
Fund or, with respect to any Portfolio, by a majority of the outstanding shares
of that Portfolio, on not less than 30 days' nor more than 60 days' written
notice to the Adviser, or by the Adviser on 90 days' written notice to the Fund.

S-10

<PAGE>

THE ADMINISTRATOR

The Fund and SEI Fund Resources (the "Administrator") have entered into an
administration agreement (the "Administration Agreement"). The Administration
Agreement provides that the Administrator shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which the Administration Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Administrator in the performance of its duties or from reckless disregard by
it of its duties and obligations thereunder. The Administration Agreement shall
remain in effect for a period of five years after the effective date of the
agreement and shall continue in effect for successive periods of two years
unless terminated by either party on not less than 90 days' prior written notice
to the other party.

The Fund and the Administrator have also entered into a shareholder servicing
agreement pursuant to which the Administrator provides certain shareholder
services in addition to those set forth in the Administration Agreement.

The Administrator, a Delaware business trust, has its principal business offices
at Oaks, Pennsylvania 19456. SEI Financial Management Corporation ("SFM"), a
wholly-owned subsidiary of SEI Investments Company ("SEI"), is the owner of all
beneficial interests in the Administrator. SEI and its affiliates, including the
Administrator, are leading providers of funds evaluation services, trust
accounting systems, and brokerage and information services to financial
institutions, institutional investors and money managers. The Administrator and
its affiliates also serve as administrator to the following other mutual funds:
The Achievement Funds Trust, The Arbor Fund, ARK Funds, Bishop Street Funds,
CoreFunds, Inc., CrestFunds, Inc., CUFUND, FMB Funds, First American Funds,
Inc., First American Investment Funds, Inc., First American Strategy Funds,
Inc., HighMark Fund, Marquis Funds(R), Monitor Funds, Morgan Grenfell Investment
Trust, The PBHG Funds, Inc., The Pillar Funds, Profit Funds Investment Trust,
Rembrandt Funds(R), Santa Barbara Group of Mutual Funds, Inc., 1784 Funds(R),
SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI
Institutional Investments Trust, SEI Institutional Managed Trust, SEI
International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, Stepstone
Funds, STI Classic Funds and STI Classic Variable Trust.

S-11

<PAGE>

For the fiscal years ended October 31, the Portfolios paid the following
administrative fees:

Administrative Fees Paid
---------------------------------------------------
1994 1995 1996
---- ---- ----
Equity Value Portfolio $50,000 $73,770 $138,175
Fixed Income Portfolio $50,000 $49,962 $ 50,022
Small Cap Portfolio N/A N/A $ 33,606

THE DISTRIBUTOR

CCM Securities, Inc. (the "Distributor"), and the Fund are parties to a
distribution agreement (the "Distribution Agreement"). The Distributor will
receive no compensation for distribution of shares of any Portfolio. The
Distributor, a New York corporation, is a wholly-owned subsidiary of the
Adviser.

The Distribution Agreement is renewable annually. The Distribution Agreement may
be terminated by the Distributor, by a majority vote of the Trustees who are not
interested persons and have no financial interest in the Distribution Agreement
or by a majority vote of the outstanding securities of the Fund upon not more
than 60 days' written notice by either party or upon assignment by the
Distributor.

TRUSTEES AND OFFICERS OF THE FUND

The management and affairs of the Fund are supervised by the Trustees under the
laws of the Commonwealth of Massachusetts. The Fund pays the fees for
unaffiliated Trustees.

The Trustees and Executive Officers of the Fund, their respective dates of
birth, and their principal occupations for the last five years are set forth
below. Each may have held other positions with named companies during that
period. Unless otherwise noted, the business address of each Trustee and each
Executive Officer is SEI Investments Company, Oaks, Pennsylvania 19456. Certain
officers of the Fund also serve as officers of some or all of the following: The
Achievement Funds Trust, The Arbor Fund, ARK Funds, Bishop Street Funds,
CoreFunds, Inc., CrestFunds, Inc., CUFUND, FMB Funds, Inc., First American
Funds, Inc., First American Investment Funds, Inc., First American Strategy
Funds, Inc, HighMark Fund, Marquis Funds(R), Monitor Funds, Morgan Grenfell
Investment Trust, The PBHG Funds, Inc., The Pillar Funds, Profit Funds
Investment Trust, Rembrandt Funds(R), Santa Barbara Group of Mutual Funds, Inc.,
1784 Funds(R), SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI
International Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, Stepstone
Funds, STI Classic Funds, and STI Classic Variable Trust, each of which is an
open-end management investment company managed by SEI Fund Resources or its
affiliates and, except for Profit Funds Investment Trust, Rembrandt

S-12

<PAGE>

Funds(R), and Santa Barbara Group of Mutual Funds, Inc., are distributed by SEI
Financial Services Company.

ROBERT A. NESHER (DOB 08/17/46) -- Chairman of the Board of Trustees* -- Retired
since 1994. Executive Vice President of SEI, 1986-1994. Director and Executive
Vice President of the Administrator and the Distributor, 1981-1994. Trustee of
the Arbor Fund, Marquis Funds(R), Advisors' Inner Circle Fund, SEI Asset
Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional
Managed Trust, SEI International Trust, SEI Institutional Investments Trust, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, Insurance Investment Products Trust,
1784 Funds(R), Pillar Funds, Rembrandt Funds, and Stepstone Funds.

JOHN T. COONEY (DOB 01/20/27) -- Trustee** -- 569 N. Post Oak Lane, Houston, TX
77024. Retired since 1992. Formerly Vice Chairman of Ameritrust Texas N.A.,
1989-1992, and MTrust Corp., 1985-1989. Trustee of the Arbor Fund, Marquis
Funds(R), and Advisors' Inner Circle Fund.

WILLIAM M. DORAN (DOB 05/26/40) - Trustee* - 2000 One Logan Square,
Philadelphia, PA 19103. Partner, Morgan, Lewis & Bockius (law firm), counsel to
the Trust, Administrator and Distributor, Director and Secretary of SEI. Trustee
of the Arbor Fund, SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI Daily
Income Trust, SEI Index Funds, SEI Institutional Managed Trust, SEI
International Trust, SEI Asset Allocation Trust, SEI Institutional Investments
Trust, Insurance Investment Products Trust, The Advisors' Inner Circle Fund, and
Marquis Funds(R).

FRANK E. MORRIS (DOB 12/30/23) -- Trustee** -- 105 Walpole Street, Dover, MA
02030. Retired since 1990. Peter Drucker Professor of Management, Boston
College, 1989-1990. President, Federal Reserve Bank of Boston, 1968-1988.
Trustee of The Arbor Fund, Marquis Funds(R), Advisors' Inner Circle Fund, SEI
Liquid Asset Trust, SEI Tax Exempt Trust, SEI Daily Income Trust, SEI Index
Funds, SEI Institutional Managed Trust, SEI International Trust, Insurance
Investment Products Trust, SEI Asset Allocation Trust and SEI Institutional
Investments Trust.

ROBERT A. PATTERSON (DOB 11/05/27) -- Trustee** -- 208 Old Main, University
Park, PA 16802. Pennsylvania State University, Senior Vice President, Treasurer
(Emeritus). Financial and Investment Consultant, Professor of Transportation
(1984-present). Vice President- Investments, Treasurer, Senior Vice President
(Emeritus) (1982-1984). Director, Pennsylvania Research Corp.; Member and
Treasurer, Board of Trustees of Grove City College. Trustee of the Arbor Fund,
Marquis Funds(R), and Advisors' Inner Circle Fund.

GENE PETERS (DOB 06/03/29)--- Trustee** -- 943 Oblong Road, Williamstown, MA
01267. Private investor from 1987 to present. Vice President and Chief Financial
Officer, Western Company of North America (petroleum service company)
(1980-1986). President of Gene Peters and Associates (import company)
(1978-1980). President and Chief Executive

S-13

<PAGE>

Officer of Jos. Schlitz Brewing Company before 1978. Trustee of the Arbor Fund,
Marquis Funds(R) and Advisors' Inner Circle Fund.

JAMES M. STOREY (DOB 04/12/31) -- Trustee** -- Partner, Dechert Price & Rhoads,
from September 1987 - December 1993; Trustee of the Arbor Fund, Marquis
Funds(R), Advisors' Inner Circle Fund, SEI Liquid Asset Trust, SEI Tax Exempt
Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional Managed Trust,
SEI International Trust, Insurance Investment Products Trust, SEI Asset
Allocation Trust, and SEI Institutional Investments Trust.

DAVID G. LEE (DOB 04/16/52) -- President and Chief Executive Officer -- Senior
Vice President of the Administrator and Distributor since 1993. Vice President
of the Administrator and Distributor, 1991-1993. President, GW Sierra Trust
Funds before 1991.

SANDRA K. ORLOW (DOB 10/18/53) -- Vice President and Assistant Secretary -- Vice
President and Assistant Secretary of the Administrator and Distributor since
1988.

KEVIN P. ROBINS (DOB 04/15/61) -- Vice President and Assistant Secretary --
Senior Vice President, General Counsel and Assistant Secretary of SEI, Senior
Vice President, General Counsel and Secretary of the Administrator and
Distributor since 1994. Vice President and Assistant Secretary of SEI, the
Administrator and Distributor, 1992-1994. Associate, Morgan, Lewis & Bockius LLP
(law firm), 1988-1992.

RICHARD W. GRANT (DOB 10/25/45) -- Secretary -- 2000 One Logan Square,
Philadelphia, PA 19103, Partner, Morgan, Lewis & Bockius LLP (law firm), counsel
to the Trust, Administrator and Distributor.

KATHRYN L. STANTON (DOB 11/19/58) -- Vice President and Assistant Secretary,
Deputy General Counsel, of SEI, Vice President and Assistant Secretary of the
Administrator and Distributor since 1994. Associate, Morgan, Lewis & Bockius LLP
(law firm), 1989-1994.

JOSEPH P. LYDON (DOB 09/27/59)-- Vice President and Assistant Secretary --
Director, Business Administration of Fund Resources, April 1995. Vice President,
Fund Group, Dremen Value Management, LP, President Dremen Financial Services,
Inc. prior to 1995.

STEPHEN G. MEYER (DOB 07/12/65) -- Controller, Chief Financial Officer-Vice
President and Controller of SEI Fund Resources since 1995. Director, Internal
Audit and Risk Management, SEI Corporation, 1992-1995. Senior Associate, Coopers
and Lybrand, 1990-1992.

TODD B. CIPPERMAN (DOB 01/14/66) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI, the Administrator and the
Distributor since 1995. Associate, Dewey Ballantine (law firm) (1994-1995).
Associate, Winston & Strawn (law firm) (1991-1994).

S-14

<PAGE>

BARBARA A. NUGENT (DOB 06/18/56) -- Vice President and Assistant Secretary --
Vice President and Assistant Secretary of SEI, the Administrator and Distributor
since 1996. Associate, Drinker Biddle & Reath (law firm) (1994-1996). Assistant
Vice President/Administration, Delaware Service Company, Inc. (1992-1993);
Assistant Vice President - Operations of Delaware Service Company, Inc.
(1988-1992).

MARC H. CAHN (DOB 06/19/57) -- Vice President and Assistant Secretary -- Vice
President and Assistant Secretary of SEI, the Administrator and Distributor
since 1996. Associate General Counsel, Barclays Bank PLC (1995-1996). ERISA
counsel, First Fidelity Bancorporation (1994-1995), Associate, Morgan, Lewis &
Bockius LLP (1989-1994).

- ----------
*Messrs. Nesher and Doran are Trustees who may be deemed to be "interested"
persons of the Fund as that term is defined in the 1940 Act.

**Messrs. Cooney, Morris, Patterson, Peters and Storey serve as members of the
Audit Committee of the Fund.

The Trustees and officers of the Fund own less than 1% of the outstanding shares
of the Fund. The Fund pays the fees, including compensation and reimbursement
for expenses for unaffiliated Trustees.

The following table exhibits Trustee compensation for the fiscal year ended
October 31, 1996.

Total Compensation
From Registrant and
Fund Complex* Paid
Aggregate Compensation Pension or Retirement Estimated Annual to Trustees for the
From Registrant for the Fiscal Benefits Accrued as Benefits Upon Fiscal Year Ended
Name of Person, Position Year Ended October 31, 1996 Part of Fund Expenses Retirement October 31, 1996
- ------------------------ ------------------------------ --------------------- ---------------- ----------------------
<S> <C> <C> <C> <C>
John T. Cooney $9,859 N/A N/A $9,859 for services on
1 board
Frank E. Morris $10,006 N/A N/A $10,006 for services
on 1 board
Robert Patterson $10,006 N/A N/A $10,006 for services
on 1 board
Eugene B. Peters $10,006 N/A N/A $10,006 for services
on 1 board
James M. Storey, Esq. $10,006 N/A N/A $10,006 for services
on 1 board
William M. Doran, Esq $0 N/A N/A $0 for services on 1
board
Robert A. Nesher $0 N/A N/A $0 for services on 1
board
</TABLE>

COMPUTATION OF YIELD AND TOTAL RETURN

From time to time the Fund may advertise yield and total return of the
Portfolios. These figures will be based on historical earnings and are not
intended to indicate future performance. No

S-15

<PAGE>

representation can be made concerning actual future yields or returns. The yield
of a Portfolio refers to the annualized income generated by an investment in
that Portfolio over a specified 30- day period. The yield is calculated by
assuming that the income generated by the investment during that 30-day period
is generated in each period over one year and is shown as a percentage of the
investment. In particular, yield will be calculated according to the following
formula:

Yield = 2[((a-b)/cd+1)6-1] where a = dividends and interest earned during the
period; b = expenses accrued for the period (net of reimbursement); c = the
average daily number of shares outstanding during the period that were entitled
to receive dividends; and d = the maximum offering price per share on the last
day of the period.

For the 30-day period ended October 31, 1996, yields were 1.25% for the Equity
Value Portfolio, 5.98% for the Fixed Income Portfolio, and 0% for the Small Cap
Portfolio, respectively.

The total return of a Portfolio refers to the average compounded rate of return
to a hypothetical investment for designated time periods (including but not
limited to, the period from which that Portfolio commenced operations through
the specified date), assuming that the entire investment is redeemed at the end
of each period. In particular, total return will be calculated according to the
following formula: P (1 + T)n = ERV, where P = a hypothetical initial payment of
$1,000; T = average annual total return; n = number of years; and ERV = ending
redeemable value, as of the end of the designated time period, of a hypothetical
$1,000 payment made at the beginning of the designated time period.

For the fiscal year ended October 31, 1996 and for the period from December 6,
1991 (commencement of operations) through October 31, 1996, the total return was
16.47% and 15.53% for the Equity Value Portfolio and 6.26% and 7.87% for the
Fixed Income Portfolio, respectively. For the fiscal period from February 28,
1996 (commencement of operations) through October 31, 1996 the total return of
the Small Cap Portfolio was 13.60% (annualized).

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions may be made through the Transfer Agent on days when
the New York Stock Exchange is open for business. Shares of each Portfolio are
offered on a continuous basis. Currently, the Fund is closed when the following
holidays are observed: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas.

It is currently the Fund's policy to pay all redemptions in cash. The Fund
retains the right, however, to alter this policy to provide for redemptions in
whole or in part by a distribution in-kind of securities held by a Portfolio in
lieu of cash. Shareholders may incur brokerage charges on the sale of any such
securities so received in payment of redemptions.

S-16

<PAGE>

The Fund reserves the right to suspend the right of redemption and/or to
postpone the date of payment upon redemption for any period on which trading on
the New York Stock Exchange is restricted, or during the existence of an
emergency (as determined by the SEC by rule or regulation) as a result of which
disposal or valuation of a Portfolio's securities is not reasonably practicable,
or for such other periods as the SEC has by order permitted. The Fund also
reserves the right to suspend sales of shares of any Portfolio for any period
during which the New York Stock Exchange, the Adviser, the Administrator, the
Transfer Agent and/or the custodian are not open for business.

DETERMINATION OF NET ASSET VALUE

The securities of each Portfolio are valued by the Administrator. The
Administrator will use an independent pricing service to obtain valuations of
securities. The pricing service relies primarily on prices of actual market
transactions as well as trader quotations. However, the service may also use a
matrix system to determine valuations, which system considers such factors as
security prices, yields, maturities, call features, ratings and developments
relating to specific securities in arriving at valuations. The procedures of the
pricing service and its valuations are reviewed by the officers of the Fund
under the general supervision of the Trustees.

TAXES

The following is only a summary of certain tax considerations generally
affecting the Portfolios and their shareholders, and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult their tax
advisers with specific reference to their own tax situations, including their
state and local tax liabilities.

Federal Income Tax

The following discussion of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended, (the "Code") and the regulations
issued thereunder as in effect on the date of this Statement of Additional
Information. New legislation, as well as administrative changes or court
decisions, may significantly change the conclusions expressed herein, and may
have a retroactive effect with respect to the transactions contemplated herein.

Each Portfolio intends to qualify as a "regulated investment company" ("RIC") as
defined under Subchapter M of the Code. By following such a policy, each
Portfolio expects to eliminate or reduce to a nominal amount the federal taxes
to which it may be subject.

In order to qualify for treatment as a RIC under the Code, each Portfolio must
distribute annually to its shareholders at least the sum of 90% of its net
interest income excludable from gross income plus 90% of its investment company
taxable income (generally, net investment income plus net short-term capital
gain) ("Distribution Requirement") and also must meet several additional
requirements. Among these requirements are the following: (i) at least 90% of
the Portfolio's

S-17

<PAGE>

gross income each taxable year must be derived from dividends, interest,
payments with respect to securities loans, and gains from the sale or other
disposition of stock or securities, or certain other income; (ii) the Portfolio
must derive less than 30% of its gross income each taxable year from the sale or
other disposition of stocks or securities held for less than three months; (iii)
at the close of each quarter of the Portfolio's taxable year, at least 50% of
the value of its total assets must be represented by cash and cash items, U.S.
Government securities, securities of other RICs and other securities, with such
other securities limited, in respect to any one issuer, to an amount that does
not exceed 5% of the value of the Portfolio's assets and that does not represent
more than 10% of the outstanding voting securities of such issuer; and (iv) at
the close of each quarter of the Portfolio's taxable year, not more than 25% of
the value of its assets may be invested in securities (other than U.S.
Government securities or the securities of other RICs) of any one issuer or of
two or more issuers which the Portfolio controls or which are engaged in the
same, similar or related trades or business.

Notwithstanding the Distribution Requirement described above, which requires
only that a Portfolio distribute at least 90% of its annual investment company
taxable income and does not require any minimum distribution of net capital gain
(the excess of net long-term capital gain over net short-term capital loss),
each Portfolio will be subject to a nondeductible 4% federal excise tax to the
extent it fails to distribute by the end of any calendar year 98% of its
ordinary income for that year and 98% of its capital gain net income (the excess
of short- and long-term capital gains over short- and long-term capital losses)
for the one-year period ending on October 31 of that year, plus certain other
amounts.

Any gain or loss recognized on a sale or redemption of shares of a Portfolio by
a non-exempt shareholder who is not a dealer in securities generally will be
treated as a long-term capital gain or loss if the shares have been held for
more than twelve months and otherwise generally will be treated as a short-term
capital gain or loss. If shares of a Portfolio on which a net capital gain
distribution has been received are subsequently sold or redeemed and such shares
have been held for six months or less, any loss recognized will be treated as a
long-term capital loss to the extent of the long-term capital gain distribution.

In certain cases, a Portfolio will be required to withhold, and remit to the
United States Treasury, 31% of any distributions paid to a shareholder who (1)
has failed to provide a correct taxpayer identification number, (2) is subject
to backup withholding by the Internal Revenue Service, or (3) has not certified
to that Portfolio that such shareholder is not subject to backup withholding.

If any Portfolio fails to qualify as a RIC for any taxable year, it will be
taxable at regular corporate rates. In such an event, all distributions
(including capital gains distributions) will be taxable as ordinary dividends to
the extent of the Portfolio's current and accumulated earnings and profits, and
such distributions will generally be eligible for the corporate
dividends-received deduction.

S-18

<PAGE>

State Taxes

No Portfolio is liable for any income or franchise tax in Massachusetts if it
qualifies as a RIC for federal income tax purposes. Distributions by any
Portfolio to shareholders and the ownership of shares may be subject to state
and local taxes.

PORTFOLIO TRANSACTIONS

The Portfolios have no obligation to deal with any broker-dealer or group of
broker-dealers in the execution of transactions in portfolio securities. Subject
to policies established by the Trustees of the Fund, the Adviser is responsible
for placing the orders to execute transactions for the Portfolios. In placing
orders, it is the policy of the Fund to seek to obtain the best net results
taking into account such factors as price (including the applicable dealer
spread), the size, type and difficulty of the transaction involved, the firm's
general execution and operational facilities and the firm's risk in positioning
the securities involved. While the Adviser generally seeks reasonably
competitive spreads or commissions, the Portfolios will not necessarily be
paying the lowest spread or commission available.

The money market instruments in which the Portfolios invest are traded primarily
in the over-the-counter market. Bonds and debentures are usually traded
over-the-counter, but may be traded on an exchange. Where possible, the Adviser
will deal directly with the dealers who make a market in the securities involved
except in those circumstances where better prices and execution are available
elsewhere. Such dealers usually are acting as principal for their own account.
On occasion, securities may be purchased directly from the issuer. Money market
instruments are generally traded on a net basis and do not normally involve
either brokerage commissions or transfer taxes. The cost of executing portfolio
securities transactions of the Portfolios will primarily consist of dealer
spreads and underwriting commissions.

The Adviser may, consistent with the interests of a Portfolio, select brokers on
the basis of the research services they provide to the Adviser. Such services
may include analyses of the business or prospects of a company, industry or
economic sector, or statistical and pricing services. Information so received by
the Adviser will be in addition to and not in lieu of the services required to
be performed by the Adviser under the Advisory Agreement. If, in the judgment of
the Adviser, a Portfolio or other accounts managed by the Adviser will be
benefitted by supplemental research services, the Adviser is authorized to pay
brokerage commissions to a broker furnishing such services which are in excess
of commissions which another broker may have charged for effecting the same
transaction. These research services include advice, either directly or through
publications or writings, as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; furnishing of analyses and
reports concerning issuers, securities or industries; providing information on
economic factors and trends; assisting in determining portfolio strategy;
providing computer software used in security analyses; and providing portfolio
performance

S-19

<PAGE>

evaluation and technical market analyses. The expenses of the Adviser will not
necessarily be reduced as a result of the receipt of such supplemental
information, such services may not be used exclusively, or at all, with respect
to the Portfolio or account generating the brokerage, and there can be no
guarantee that the Adviser will find all of such services of value in advising
that Portfolio. For the Fiscal year ended October 31, 1996: i) the Equity Value
Portfolio directed transactions amounting to $43,497,106 to broker-dealers for
research services, and paid commissions of $112,645 on those transactions; the
Fixed Income Portfolio directed transactions amounting to $0 to broker-dealers
for research services, and paid commissions of $0 on those transactions; and the
Small Cap Value Portfolio directed transactions amounting to $529,643 to
broker-dealers for research services, and paid commissions of $5,825 on those
transactions.

It is possible that the Portfolios may execute brokerage or other agency
transactions through the Distributor, which is a registered broker-dealer, for a
commission in conformity with the 1940 Act, the Securities Exchange Act of 1934
and rules promulgated by the SEC. Under these provisions, the Distributor is
permitted to receive and retain compensation for effecting portfolio
transactions for the Portfolios on an exchange if a written contract is in
effect between the Distributor and the Fund expressly permitting the Distributor
to receive and retain such compensation. These rules further require that
commissions paid to the Distributor by the Portfolios for exchange transactions
not exceed "usual and customary" brokerage commissions. The rules define "usual
and customary" commissions to include amounts which are "reasonable and fair
compared to the commission, fee or other remuneration received or to be received
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold on a securities exchange during a comparable
period of time." The Trustees, including those who are not "interested persons"
of the Fund, have adopted procedures for evaluating the reasonableness of
commissions paid to the Distributor and will review these procedures
periodically. For the fiscal years October 31, 1994 and 1995, the Equity Value
Fund paid SEI Financial Services Company ("SFS"), prior Distributor of the
Portfolios brokerage commissions in the aggregate amount of $0 and $2,512. For
the fiscal year ended October 31, 1995, the commissions the Equity Value Fund
paid to SFS represented 2% of the aggregate brokerage commissions which were
paid on transactions that represented 55% of the aggregate dollar amount of
transactions that incurred commissions paid by that Portfolio during such
period. Aggregate brokerage commissions paid by the Equity Value Fund for the
fiscal years ended October 31, 1994 and 1995 were $46,917 and $136,995,
respectively. For the fiscal years ended October 31, 1994 and 1995, the Fixed
Income Fund pais SFS brokerage commissions in the aggregate amount of $0 and
$411. For the fiscal year ended October 31, 1995, the commission the Fixed
Income Fund paid to SFS represented 100% of the aggregate brokerage commissions
which were paid on transactions that represented 42% of the aggregate dollar
amount of transactions that incurred commissions paid by the Portfolio during
such period. Aggregate brokerage commissions paid by the Fixed Income Fund for
the fiscal years ended October 31, 1994 and 1995 were $0 and $411, respectively.
For the fiscal year ended October 31, 1996, the Portfolios paid brokerage
commissions, as follows:

S-20

<PAGE>

<TABLE>
<CAPTION>
Total
Brokerage
Total $ Amount Total $ Commissions
Brokerage of Brokered Brokerage Amount of paid to SFS in
Fund Commissions Transactions Commissions Paid Brokered Connection
Paid for Last to Affiliates Transactions With
Year With Affiliate Repurchase
for Last Year Agreement
Transactions
For Last Year
- ---------------------- -------------- --------------- ----------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
Equity Value Portfolio $152,253 $54,101,590 $0 $0 $3,360
Fixed Income $0 $0 $0 $0 $265
Portfolio
Small Cap Portfolio $22,829 $4,164,807 $0 $0 $108
</TABLE>

Since the Fund does not market its shares through intermediary brokers or
dealers, it is not the Fund's practice to allocate brokerage or principal
business on the basis of sales of its shares which may be made through such
firms. However, the Adviser may place portfolio orders with qualified
broker-dealers who recommend the Portfolios' shares to clients, and may, when a
number of brokers and dealers can provide best net results on a particular
transaction, consider such recommendations by a broker or dealer in selecting
among broker-dealers.

The Portfolios are required to identify any securities of their "regular brokers
or dealers" (as such term is defined in the 1940 Act), which the Portfolios have
acquired during their most recent fiscal year. As of October 31, 1996, the
Equity Value, Fixed Income and Small Cap Value Portfolios held $10,483,623;
$589,302; and $230,302, respectively, of tri-party repurchase agreements with
Lehman Brothers.

For the fiscal years ended October 31, 1995 and 1996, the portfolio turnover
rate for each of the Portfolios was as follows:

<TABLE>
<CAPTION>
TURNOVER RATE
---------------------------------------
PORTFOLIO 1996 1995
--------- ---- ----
<S> <C> <C>
Equity Value Portfolio 51.36% 84.76%
Fixed Income Portfolio 24.52% 35.84%
Small Cap Portfolio 14.17% N/A
</TABLE>

DESCRIPTION OF SHARES

S-21

<PAGE>

The Declaration of Trust authorizes the issuance of an unlimited number of
portfolios and shares of each portfolio. Each share of a portfolio represents an
equal proportionate interest in that portfolio with each other share. Shares are
entitled upon liquidation to a pro rata share in the net assets of the
portfolio. Shareholders have no preemptive rights. All consideration received by
the Fund for shares of any portfolio and all assets in which such consideration
is invested would belong to that portfolio and would be subject to the
liabilities related thereto. Share certificates representing shares will not be
issued.

SHAREHOLDER LIABILITY

The Fund is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust could, under
certain circumstances, be held personally liable as partners for the obligations
of the trust. Even if, however, the Fund were held to be a partnership, the
possibility of the shareholders' incurring financial loss for that reason
appears remote because the Fund's Declaration of Trust contains an express
disclaimer of shareholder liability for obligations of the Fund and requires
that notice of such disclaimer be given in each agreement, obligation or
instrument entered into or executed by or on behalf of the Fund or the Trustees,
and because the Declaration of Trust provides for indemnification out of the
Fund property for any shareholder held personally liable for the obligations of
the Fund.

LIMITATION OF TRUSTEES' LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for his or
her own willful defaults and, if reasonable care has been exercised in the
selection of officers, agents, employees or investment advisers, shall not be
liable for any neglect or wrongdoing of any such person. The Declaration of
Trust also provides that the Fund will indemnify its Trustees and officers
against liabilities and expenses incurred in connection with actual or
threatened litigation in which they may be involved because of their offices
with the Fund unless it is determined in the manner provided in the Declaration
of Trust that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the Fund. However, nothing in the
Declaration of Trust shall protect or indemnify a Trustee against any liability
for his or her willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties.

5% SHAREHOLDERS

As of February 1, 1997, the following persons were the only persons who were
record owners (or to the knowledge of the Fund, beneficial owners) of 5% or more
of the shares of the Portfolios.

S-22

<PAGE>

Clover Capital Fixed Income Fund.

Shareholder Number of Shares %

Clover Capital Management, Inc. 145,451.271 6.59%
Employee 401K Savings & Deferred
Profit Sharing Plan
11 Tobey Village Office Park
Pittsford, NY 14534-1755

Clover Capital Small Cap Value Fund Shareholder

Clover Capital Management, Inc. 77,843.877 14.56%
Employee 401K Savings & Deferred
Profit Sharing Plan
11 Tobey Village Office Park
Pittsford, NY 14534-1755

The Fund believes that most of the shares referred to above were held by the
persons indicated in accounts for their fiduciary, agency or custodial
customers.

EXPERTS

The financial statements of the Trust have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report, with respect
thereto and are incorporated by reference hereto in reliance upon the authority
of said firm as experts in giving said report.

FINANCIAL STATEMENTS

The financial statements for the fiscal year ended October 31, 1996, including
notes thereto and the report of Arthur Andersen LLP thereon, are herein
incorporated by reference. A copy of the 1996 Annual Report to shareholders must
accompany the delivery of this Statement of Additional Information.

S-23

<PAGE>

APPENDIX

DESCRIPTION OF CORPORATE BOND RATINGS

The following descriptions of corporate bond ratings have been published by
Standard & Poor's Corporation ("S&P") and Moody's Investors Service, Inc.
("Moody's"), respectively.

Debt rated AAA has the highest rating S&P assigns to a debt obligation. Such a
rating indicates an extremely strong capacity to pay principal and interest.
Debt rated AA also qualities as high-quality debt. Capacity to pay principal and
interest is very strong, and differs from AAA issues only in small degree. Debt
rated A has a strong capacity to pay interest and repay principal although it is
somewhat more susceptible to the adverse effects of changes in circumstances and
economic conditions than debt in higher rated categories.

Debt rated BBB is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to pay interest and repay principal for debt in this
category than in higher rated categories.

Debt rated BB, B, CCC, CC and C is regarded as having predominately speculative
characteristics with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the least degree of
speculation and C the highest degree of speculation. While such debt will likely
have some quality and protective characteristics, these are outweighed by large
uncertainties of major risk exposures to adverse conditions.

The rating CI is reserved for income bonds on which no interest is being paid.

Debt rated D is in default, and payment of interest and/or repayment of
principal is in arrears.

Bonds which are rated Aaa by Moody's are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large, or an exceptionally
stable, margin and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues. Bonds rated Aa by
Moody's are judged by Moody's to be of high quality by all standards. Together
with bonds rated Aaa, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than in Aaa securities.

Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

A-1

<PAGE>

Bonds rated Baa are considered as medium grade obligations (i.e., they are
neither highly protected nor poorly secured). Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Bonds which are rated Ba are judged to have speculative elements; their future
cannot be considered as well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Bonds which are rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.

Bonds which are rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

Bonds which are rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.

DESCRIPTION OF COMMERCIAL PAPER RATINGS

The following descriptions of commercial paper ratings have been published by
S&P and Moody's, respectively.

Commercial paper rated A-1 by S&P is regarded by S&P as having the greatest
capacity for timely payment. Ratings are further refined by the use of a plus
sign to indicate the relative degree of safety. Issues rated A-1+ are those with
"extremely strong safety characteristics." Those rated A-1 reflect a "strong"
degree of safety regarding timely payment.

Commercial paper issues rated Prime-1 or Prime-2 by Moody's are judged by
Moody's to be of "superior" quality and "strong" quality respectively on the
basis of relative repayment capacity.

A-2

<PAGE>