SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant /_/
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
CRA REALTY
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(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/_/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/_/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(1)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
/X/ No Fee Required.
1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
1) Amount previously paid: _________________________________________________
2) Form, Schedule or Registration No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
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CRA REALTY SHARES PORTFOLIO
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IMPORTANT SHAREHOLDER INFORMATION
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THIS DOCUMENT CONTAINS YOUR PROXY STATEMENT AND PROXY CARD. A PROXY CARD IS, IN
ESSENCE, A BALLOT. WHEN YOU VOTE YOUR PROXY, IT TELLS US HOW TO VOTE ON YOUR
BEHALF ON IMPORTANT ISSUES RELATING TO YOUR FUND. EACH PROXY CARD MAY BE
COMPLETED BY CHECKING THE APPROPRIATE BOX AND VOTING FOR OR AGAINST THE SPECIFIC
PROPOSALS RELATING TO YOUR FUND. IF YOU SIMPLY SIGN THE PROXY WITHOUT SPECIFYING
A VOTE, YOUR SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE
BOARD OF TRUSTEES.
PLEASE SPEND A FEW MINUTES WITH THE PROXY STATEMENT, FILL OUT YOUR PROXY CARD,
AND RETURN IT TO US. VOTING YOUR PROXY, AND DOING SO PROMPTLY, ENSURES THAT THE
FUND WILL NOT NEED TO CONDUCT ADDITIONAL MAILINGS. IF SHAREHOLDERS DO NOT RETURN
THEIR PROXIES IN SUFFICIENT NUMBERS, THE FUND MAY HAVE TO INCUR THE EXPENSE OF
FOLLOW-UP SOLICITATIONS, WHICH COULD COST YOUR FUND MONEY.
PLEASE TAKE A FEW MOMENTS TO EXERCISE YOUR RIGHT TO VOTE. THANK YOU.
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THE ADVISORS' INNER CIRCLE FUND
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THE ADVISORS' INNER CIRCLE FUND
CRA REALTY SHARES PORTFOLIO
Dear Shareholder,
A shareholder meeting of the CRA Realty Shares Portfolio (the "Fund"),
a portfolio of The Advisors' Inner Circle Fund (the "Trust"), has been scheduled
for Monday, October 26, 1998. If you were a shareholder of record as of the
close of business on September 17, 1998, you are entitled to vote at the meeting
and any adjournment of the meeting.
The Fund's Trustees have called the special shareholder meeting to
permit the Fund's shareholders to consider a new investment advisory
agreement with CRA Real Estate Securities, L.P. ("CRA"). The principals of CRA,
the investment adviser to the Fund, have entered into an agreement with
Nationale -- Nederlanden Interfinance, B.V. and its subsidiaries (collectively,
"ING"), a member of ING Group, pursuant to which CRA and certain other entities
will be acquired by ING, as further described in the enclosed proxy statement.
The three senior CRA professionals have agreed, as part of the transaction, to
enter into employment contracts with CRA. The terms of the proposed new
investment advisory agreement between the Fund and CRA are substantially
identical to the terms of the current investment advisory agreement, except for
the dates of execution, effectiveness and termination, [and the inclusion of
escrow provisions (which are applicable in the event that the transaction closes
prior to the approval of the new advisory agreement by shareholders).] The
enclosed proxy statement describes the proposed transaction in greater detail,
and explains the basis for the Trustees' decision to approve the new agreement
and recommend it to the Fund's shareholders.
While you are, of course, welcome to join us at the meeting, most
shareholders cast their votes by filling out and signing the enclosed proxy
card. Whether or not you plan to attend the meeting, we need your vote. PLEASE
MARK, SIGN, AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO THE MAXIMUM NUMBER OF SHARES MAY BE VOTED. YOUR VOTE IS
IMPORTANT TO US. Please do not hesitate to call Jeff Winton of CRA at
1-888-712-1103 or call 1-800-932-7781 if you have any questions about the
Proposal. Thank you for taking the time to consider this important proposal and
for your investment in the Fund.
Sincerely,
/s/ Mark Nagle
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Mark Nagle
President
The Advisors' Inner Circle Fund
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IMPORTANT NOTICE
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the proposal.
QUESTIONS & ANSWERS
Q: WHY AM I RECEIVING THIS PROXY STATEMENT?
A: Federal securities laws require a vote by a fund's shareholders whenever the
fund's investment adviser or sub-adviser is subject to a change in its ownership
structure or in the identity of its controlling parties. The owners of CRA, the
Fund's investment adviser, and certain other entities have entered into an
agreement pursuant to which CRA and such other entities will be acquired by ING.
Your Fund is seeking shareholder approval of the following proposal:
o Approval of a new investment advisory agreement between the Trust, on
behalf of the Fund, and CRA, the Fund's adviser.
Please refer to the proxy statement for a detailed explanation of the proposal.
Q: HOW WILL THIS AFFECT MY ACCOUNT?
A: You can expect the same level of management expertise and service from CRA to
which you've grown accustomed. The terms of the proposed new investment advisory
agreement between the Trust and CRA are substantially identical to the terms of
the current investment advisory agreement on behalf of the Fund, except for the
dates of execution, effectiveness and termination, and the inclusion of escrow
provisions (which are applicable only in the event that the transaction closes
prior to the approval of the new advisory agreement by shareholders). THE
PROPOSAL DOES NOT REQUEST AN INCREASE IN THE RATE OF THE FUND'S INVESTMENT
ADVISORY FEE. FURTHER, THE PROPOSED TRANSACTION WILL NOT RESULT IN A CHANGE IN
THE FUND'S PORTFOLIO MANAGERS.
Q: WILL MY VOTE MAKE A DIFFERENCE?
A: Your vote is needed to ensure that the Proposal can be acted upon.
Additionally, your immediate response on the enclosed proxy card will help save
the costs of any further solicitations for a shareholder vote. We encourage all
shareholders to participate in the governance of their Fund.
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Q: HOW DO THE TRUSTEES OF MY FUND SUGGEST THAT I VOTE?
A: After careful consideration, the Trustees of your Fund, including the
independent Trustees who comprise a majority of the Fund's Board of Trustees,
unanimously recommend that you vote "FOR" the proposal.
Q: WHOM DO I CALL IF I HAVE QUESTIONS?
A: Please call Jeff Winton of CRA at 1-888-712-1103 or call us at 1-800-932-7781
between 9:00 a.m. and 5:00 p.m. New York time, Monday through Friday.
Q: WHERE DO I MAIL MY PROXY CARD?
A: You may use the enclosed postage-paid envelope.
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THE ADVISORS' INNER CIRCLE FUND
CRA REALTY SHARES PORTFOLIO
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OCTOBER 26, 1998
To the Shareholders of CRA Realty Shares Portfolio:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the CRA Realty Shares Portfolio, a portfolio of The Advisors'
Inner Circle Fund, will be held at the offices of the Trust, One Freedom Valley
Drive, Oaks, Pennsylvania 19456, on [October 26, 1998 at 3:30 p.m.], local time,
for the following purposes:
1. TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE A NEW ADVISORY
AGREEMENT BETWEEN THE ADVISORS' INNER CIRCLE FUND (THE "TRUST"), ON
BEHALF OF THE CRA REALTY SHARES PORTFOLIO (THE "FUND") AND CRA REAL
ESTATE SECURITIES ("CRA"), RELATING TO THE FUND.
2. TO TRANSACT OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING
OR ANY ADJOURNMENT THEREOF.
The current advisory agreement between the Trust and CRA on behalf of
the Fund will terminate when CRA, the adviser to the Fund, is acquired by ING, a
large integrated financial services company. Under the Investment Company Act of
1940, this transaction will result in an "assignment" of the advisory agreement,
which will cause the termination of the agreement. It is proposed that CRA
continue to serve as adviser under the new agreement described in the attached
proxy statement. The Board of Trustees has approved, and is recommending that
Shareholders of the Fund vote to approve a new advisory agreement between the
Trust and CRA for the Fund.
All Shareholders are cordially invited to attend the meeting.
Regardless of whether you plan to attend the meeting, please complete, sign, and
date the enclosed proxy and return it promptly in the enclosed envelope so that
a quorum will be present and a maximum number of shares may be voted. If you are
present at the meeting, you may change your vote, if desired, at that time.
Shareholders of record at the close of business on September 17, 1998,
are entitled to receive notice of and to vote at that meeting or any adjournment
thereof.
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By Order of the Board of Trustees
/s/ Richard W. Grant
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Richard W. Grant
Secretary
__________, 1998
PROMPT EXECUTION AND RETURN OF THE ENCLOSED
PROXY IS REQUESTED. A SELF-ADDRESSED,
POSTAGE PAID ENVELOPE
IS ENCLOSED FOR YOUR CONVENIENCE
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THE ADVISORS' INNER CIRCLE FUND
CRA REALTY SHARES PORTFOLIO
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of The Advisors' Inner Circle Fund (the
"Trust"), on behalf of the CRA Realty Shares Portfolio (the "Fund"), for use at
the Special Meeting of Shareholders to be held at the offices of the Trust, One
Freedom Valley Drive, Oaks, Pennsylvania 19456, on [Monday, October 26, 1998, at
3:30 p.m.], local time, and at any adjourned session thereof (this meeting and
any adjournment thereof are hereinafter referred to as the "Meeting").
Shareholders of record at the close of business on September 17, 1998
("Shareholders") are entitled to vote at the Meeting.
As of September 17, 1998, the Fund had [___________] shares
outstanding. Each share is entitled to one vote and each fractional share is
entitled to a proportionate fractional vote on each matter at the Meeting. In
addition to the solicitation of proxies by mail, directors and officers of the
Trust, officers and employees of CRA and officers and employees of SEI
Investments Mutual Funds Services, the Administrator for the Fund, may solicit
proxies in person or by telephone. In addition, third parties hired for the
purpose may solicit proxies in person, by fax or by telephone. Persons holding
shares as nominees will, upon request, be reimbursed for their reasonable
expenses incurred in sending soliciting materials to their principals. The cost
of solicitation will be borne by ING. The Proxy Card and this Proxy Statement
are being mailed to the Shareholders on or about October 6, 1998.
Shares represented by duly executed proxies will be voted in accordance
with the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, by properly executing a
later-dated proxy, or by attending the Meeting and voting in person.
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INTRODUCTION
The Trust is organized as a Massachusetts business trust and is not
required to hold annual meetings of Shareholders. The Board of Trustees has
called this Meeting to permit Shareholders of the Fund to vote on a new advisory
agreement, which is to take effect upon the termination of the existing advisory
agreement. The existing advisory agreement will terminate upon the completion of
the acquisition of CRA by ING as more fully described below (the "Transaction").
The Transaction will technically cause an "assignment" of the current advisory
agreement ("Current Advisory Agreement"), which will have the effect under the
Investment Company Act of 1940 (the "1940 Act"), of terminating the Current
Advisory Agreement. This Proxy Statement solicits votes on the proposal to
approve a new advisory agreement between CRA, the investment adviser to the
Fund, and the Trust, on behalf of the Fund. AS DESCRIBED BELOW, THE PROPOSAL
DOES NOT REQUEST AN INCREASE IN THE RATE OF THE FUND'S INVESTMENT ADVISORY FEE.
FURTHER, THE TRANSACTION WILL NOT RESULT IN A CHANGE IN THE FUND'S PORTFOLIO
MANAGER.
PROPOSAL 1. APPROVAL OF A NEW ADVISORY AGREEMENT FOR THE FUND
BACKGROUND
On September 28, 1998, the Trust's Board, including a majority of the
non-interested Trustees, approved a new advisory agreement by and between the
Trust, on behalf of the Fund, and CRA (the "New Advisory Agreement") embodying
substantially identical terms and fees as the Current Advisory Agreement, except
for the dates of execution, effectiveness and termination, and the inclusion of
escrow provisions (which are applicable only in the event that the Transaction
closes prior to the approval of the New Advisory Agreement by Shareholders).
Shareholders are being asked to approve the New Advisory Agreement with respect
to the Fund. A copy of the form of New Advisory Agreement is attached as Annex A
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to this Proxy Statement.
THE TRANSACTION
The partners of CRA and certain other persons (collectively, the
"Sellers") who collectively own all the outstanding equity interests in CRA
and certain other entities, have entered into an agreement (the "Purchase
Agreement") with ING for the Sellers to sell all of the equity interests in CRA
and such other entities owned by them, to ING (the "Transaction"). After the
completion of the Transaction, CRA will become a wholly-owned subsidiary of ING.
The Transaction is not expected to result in material changes in the
business, corporate structure or composition of the senior management or
personnel of CRA, or in the manner in which CRA renders advisory or other
services to the Fund. The Purchase Agreement does not contemplate any material
changes, other than changes in the ordinary course of business, in the
management or operations of CRA relating to the Fund, the personnel managing the
Fund or in
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the other service providers to or business activities of the Fund. ING and CRA
do not anticipate that the Transaction or any ancillary transactions will
cause any reduction in the quality of services now provided by CRA to the Fund
or have any adverse effect on CRA's ability to fulfill its obligations under the
New Advisory Agreement or to operate its business in a manner consistent with
past business practices.
THE TERMS OF THE AGREEMENT
The Transaction is expected to close during the fourth quarter of 1998,
provided that a number of conditions set forth in the Purchase Agreement are met
or waived. The conditions require, among other things, that as of the closing of
the Transaction a certain portion of the clients or CRA and certain related
entities which are also being acquired by ING have not raised any objections to
the Transaction. The approval of the Shareholders of the Fund is not a condition
to the Closing of the Transaction. There is no financing condition to the
closing of the Transaction.
The three senior managers of CRA have agreed to enter into new
employment and non-competition agreements with CRA in connection with the
Transaction. The employment agreements are intended to ensure that the services
of the Managing Directors are available to CRA (and thus to the Fund) for a term
of at least five years. Each non-competition agreement prohibits the employee
from competing with CRA in various ways during and for a certain time period
after the termination of employment. Although there can be no assurance that any
employee of CRA will choose to remain employed by CRA after the Transaction, CRA
expects to continue to provide competitive compensation and benefit packages and
other incentives necessary to retain and attract quality personnel.
The Fund's Board of Trustees approved the New Advisory Agreement and
called this Special Meeting of the Shareholders to approve the New Advisory
Agreement. ING has agreed to pay all expenses relating to the procurement of a
Shareholder vote. If Shareholder approval is not forthcoming, the Fund's Board
will meet to discuss its options, which may include recommending the hiring,
subject to Board and Shareholder approval, of one or more new advisers.
INFORMATION REGARDING CRA
CRA is a privately held [Delaware] limited partnership with over 14
years of experience as an investment adviser to individual and institutional
clients. Founded in 1984, CRA is currently owned by its three senior
professionals and the senior professionals of Clarion Partners, LLC, which is
also being acquired by ING. CRA has approximately 17 employees in addition to
its Managing Directors. CRA had approximately $1.4 billion of assets under
management as of June 30, 1998. CRA's principal business address is Suite 205,
259 North Radnor-Chester Road, Radnor, Pennsylvania 19087. Annex B to this
Proxy Statement sets forth the name, business address and principal occupation
of each of CRA's senior professionals.
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After completion of the Transaction, CRA will be a wholly-owned
subsidiary of ING.
EFFECT OF THE TRANSACTION ON THE EXISTING ADVISORY AGREEMENT
Consummation of the Transaction will constitute an "assignment" (as
defined in the 1940 Act) of the Current Advisory Agreement. As required by the
1940 Act, the Current Advisory Agreement will terminate upon consummation of the
Transaction.
In anticipation of the Transaction, and in order for CRA to continue to
serve as the Fund's investment adviser after consummation of the Transaction,
the New Advisory Agreement between CRA and the Trust on behalf of the Fund must
be approved (i) by a majority of the Trustees of the Trust who are not parties
to the New Advisory Agreement or interested persons of any party thereto (the
"Independent Trustees"), and (ii) by vote of the holders of "a majority of the
outstanding voting securities" (within the meaning of the 1940 Act) of the Fund.
AT A MEETING HELD ON SEPTEMBER 28, 1998, THE TRUSTEES, INCLUDING THE
INDEPENDENT TRUSTEES, UNANIMOUSLY VOTED TO APPROVE THE NEW ADVISORY AGREEMENT
FOR THE FUND AND TO RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE FOR THE
APPROVAL OF THE NEW ADVISORY AGREEMENT.
In evaluating the New Advisory Agreement, the Trustees reviewed
materials furnished by CRA and ING, including information regarding CRA, ING,
their respective affiliates and their personnel, operations and financial
condition. The Trustees also reviewed the terms of the Transaction and its
possible effects on the Fund and its shareholders. Representatives of CRA
discussed with the Trustees the anticipated effects of the Transaction, and
indicated their belief that as a consequence of the proposed transaction, the
operations of the Fund and the capabilities of CRA to provide advisory and other
services to the Fund would not be materially adversely affected and may be
enhanced by the resources of ING, though there could be no assurance as to any
particular benefits that may result.
In making their recommendation, the Trustees deemed to be especially
important the experience of CRA's key personnel in Fund management, the
arrangements made to secure the continued service of the key personnel in Fund
management, the high quality and extent of research and management services CRA
is expected to continue to provide to the Fund, and the compensation proposed to
be paid to CRA by the Fund under the New Advisory Agreement and that the rate of
such compensation is identical to the rate of compensation under the Current
Advisory Agreement (which they had recently reviewed and approved). The Trustees
also specifically considered the following as relevant to their recommendations:
(1) that the fee and expense ratios of the Fund are reasonable given the quality
of services expected to be provided and the fee and expense ratios of comparable
mutual funds; (2) the relative performance of the Fund since commencement of
operations to comparable mutual funds and unmanaged indices; (3) that the terms
of the New Advisory Agreement are substantially identical to those of the
Current Advisory Agreement, except for different execution dates, effective
dates and
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termination dates, and the inclusion of escrow provisions (which are applicable
only in the event the Transaction closes prior to the approval of the New
Advisory Agreement by Shareholders); (4) the favorable history, reputation,
qualification and background of CRA and ING, as well as the qualifications of
their personnel and their respective financial conditions; (5) the commitment of
ING to pay the expenses of the Fund in connection with the Transaction so that
shareholders of the Fund would not have to bear such expenses; (6) the
possibility of benefits that may be realized by the Fund as a result of CRA's
affiliation with ING, including any resources of ING that would be available to
CRA; and (7) other factors deemed relevant by the Trustees.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act permits, in the context of a change in
control of an investment adviser to a registered investment company, the receipt
by such investment adviser (or any of its affiliated persons) of any amount or
benefit in connection with such sale, as long as two conditions are satisfied.
First, an "unfair burden" may not be imposed on the investment company as a
result of the sale of such interest, or any express or implied terms, conditions
or understandings applicable thereto. The term "unfair burden," as defined in
the 1940 Act, includes any arrangement during the two-year period after the
transaction whereby the investment adviser (or predecessor or successor
adviser), or any interested person of any such adviser, receives or is entitled
to receive any compensation, directly or indirectly, from the investment company
or its security holders (other than fees for bona fide investment advisory and
other services), or from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company
(other than ordinary fees for bona fide principal underwriting services).
The Board has not been advised by CRA of any circumstances arising from
the Transaction that will result in the imposition of an "unfair burden" on the
Fund. Moreover, ING has advised the Trustees that, upon consummation of the
Transaction, it will take no action which would have the effect, directly or
indirectly, of violating any of the provisions of Section 15(f) of the 1940 Act
in respect of the Transaction. CRA and ING have also advised the Trustees that
during the two year period following the Transaction, CRA and ING do not intend
to change CRA's policies with respect to the circumstances under which voluntary
fee waivers may be permitted to expire.
The second condition of Section 15(f) is that during the three-year
period immediately following a transaction to which Section 15(f) is applicable,
at least 75% of the subject investment company's board of trustees must not be
"interested persons" (as defined in the 1940 Act) of the investment company's
investment adviser or predecessor adviser. The current composition of the
Trust's Board would comply with this condition subsequent to the Transaction.
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MISCELLANEOUS
In the event that the closing of the Transaction occurs prior to the
Shareholders of the Fund approving the New Advisory Agreement, any advisory fees
earned by CRA under the New Advisory Agreement during such period shall be held
in an interest-bearing escrow account and be paid to CRA only upon approval by
Shareholders of the Fund of the New Advisory Agreement and the compensation
payable thereunder earned during the period (the "Interim Period"). If the
Fund's Shareholders do not vote to approve the New Advisory Agreement, the fees
held in the escrow account will be remitted to the Fund, CRA will no longer
serve as the Fund's investment adviser and the New Advisory Agreement will
terminate. CRA has agreed to take all appropriate steps to ensure that the scope
and quality of its advisory and other services provided to the Fund during the
Interim Period will be at least equivalent to the scope and quality of services
provided under the Current Advisory Agreement, and that, in the event of any
material change in the personnel providing advisory services pursuant to the New
Advisory Agreement during the Interim Period, the Trustees will be apprised and
consulted to assure that they are satisfied that the services provided will not
be diminished in scope or quality.
At a meeting held on September 28, 1998, the Trustees, including the
Independent Trustees, concluded that payment of the investment advisory fees
under the New Advisory Agreement during the Interim Period would be appropriate
and fair and recommend that the shareholders of the Fund vote to approve the
payment of the advisory fees earned by CRA under the New Advisory Agreement
during the Interim Period.
In the event that the closing of the Transaction occurs prior to the
Shareholders of the Fund approving the New Advisory Agreement, the approval of
Proposal 1 by such Shareholders will also be deemed to approve of the payment of
the advisory fees to CRA under the New Advisory Agreement during the Interim
Period.
RECOMMENDATION OF THE BOARD
Based upon a review of the above factors, the Board concluded that the
terms of the New Advisory Agreement are fair to, and in the best interests, of
the Fund and its Shareholders. The Trustees, including the Independent Trustees,
unanimously recommend that the Shareholders of the Fund vote to approve the New
Advisory Agreement at the Meeting.
CONCLUSION
If the Shareholders of the Fund do not approve the New Advisory
Agreement and the Transaction is consummated, the Trustees would consider what
further action to take consistent with their fiduciary duties to the Fund. Such
actions may include obtaining for the Fund interim investment advisory services
at cost or at the current fee rate either from CRA or from another advisory
organization. Thereafter, the Trustees would either negotiate a new investment
advisory agreement with an advisory organization selected by the Trustees or
make other appropriate arrangements. In the event the Transaction is not
consummated, CRA would
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continue to serve as investment adviser of the Fund pursuant to the terms of the
Current Advisory Agreement.
DESCRIPTION OF THE CURRENT ADVISORY AGREEMENT AND THE NEW ADVISORY AGREEMENT
GENERAL
CRA serves as the investment adviser to the Fund pursuant to the
Current Advisory Agreement, which was approved by the Fund's shareholders on
December 31, 1996. This Agreement will terminate upon consummation of the
Transaction. The Board of Trustees recommends that Shareholders of the Fund
approve the New Advisory Agreement between CRA and the Trust on behalf of the
Fund, a copy of which is attached as Annex A to this Proxy Statement. The
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description of the New Advisory Agreement set forth in this Proxy Statement is
qualified in its entirety by reference to the form of New Advisory Agreement
attached to this Proxy Statement as Annex A. The terms of the New Advisory
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Agreement are identical to the terms of the Current Advisory Agreement except
for dates of execution, effectiveness and terminations, and the inclusion of
escrow provisions (which are applicable only in the event that the Transaction
closes prior to the approval of the New Advisory Agreement by the Shareholders).
DUTIES UNDER THE NEW ADVISORY AGREEMENT
Under the New Advisory Agreement, CRA will make the daily investment
decisions for the Fund and will continuously review, supervise, and administer
the Fund's investment program. CRA will discharge its responsibilities subject
to the supervision of the Trustees of the Trust in a manner consistent with the
Fund's investment objectives, policies and limitations. The New Advisory
Agreement also provides that CRA will not be protected against any liability to
the Fund or its shareholders by reason of willful misfeasance, bad faith, or
negligence on its part in the performance of its duties or from reckless
disregard by CRA of its obligations or duties thereunder.
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DURATION AND TERMINATION
If approved by shareholders at the Meeting, the New Advisory Agreement
would take effect upon the later to occur of (i) the obtaining of shareholder
approval or (ii) the closing of the Transaction.
Unless terminated earlier, the New Advisory Agreement will continue in
effect for a period of two years from the date of effectiveness, and thereafter,
for periods of one year for so long as such continuance is specifically approved
at least annually (i) by the vote of the holders of a majority of the
outstanding voting securities of the Fund or by the Board of Trustees, and (ii)
by the vote of a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on such approval.
The New Advisory Agreement will terminate automatically in the event of
its assignment. The New Advisory Agreement is also terminable by CRA at any time
without penalty, on not more than 60 days' written notice by the Board of
Trustees or by vote of a majority of each Fund's outstanding voting securities.
COMPENSATION
Under the New Advisory Agreement, the Trust will pay CRA a fee, which
is calculated and paid monthly, at the annual rate of 0.70% of the average daily
net assets of the Fund. Since commencement of investment operations on January
1, 1997, CRA received compensation from the Trust for its services to the Fund
under the Current Advisory Agreement in the amount of [__________].
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF
---
THE NEW ADVISORY AGREEMENT WITH CRA.
ADMINISTRATOR
SEI Investments Mutual Funds Services (the "Administrator") serves as
Administrator of the Fund pursuant to an administration agreement. The
principal offices of SEI are located at One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
DISTRIBUTION
SEI Investments Distribution Co. (the "Distributor"), an affiliate of
the Administrator, serves as Distributor of the Fund's shares pursuant to a
distribution agreement. The principal offices at the Distributor are located at
One Freedom Valley Drive, Oaks, Pennsylvania 19456.
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FUND TRANSACTIONS
For the fiscal year ended October 31, 1997, the Trust did not pay any
brokerage commissions to affiliates.
5% SHAREHOLDERS
As of September 17, 1998, the following persons were the only persons
who were, to the knowledge of the Trust, beneficial owners of 5% or more of
shares of the Fund voting at this Meeting:
Class A Shares:
Institutional Shares:
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.
ADJOURNMENT
In the event that sufficient votes in favor of the Proposal set forth
in the Notice of the Special Meeting are not received by the time scheduled for
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting for a period or periods of not more than 60 days in the aggregate
to permit further solicitation of proxies with respect to any of such Proposal.
Any such adjournment will require the affirmative vote of a majority of the
votes cast on the question in person or by proxy at the session of the Meeting
to be adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Proposal. They will vote against any such adjournment those proxies required to
be voted against the Proposal. The costs of any such additional solicitation and
of any adjourned session will be borne by CRA.
REQUIRED VOTE
Approval of the Proposal requires the affirmative vote of a majority of
the outstanding voting securities of the Fund. The 1940 Act defines "majority of
the outstanding voting securities" as the vote of (i) 67% or more of the Fund's
outstanding shares present at a meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii) more
than 50% of the Fund's outstanding shares, whichever is less.
Abstentions and "broker non-votes" will not be counted for or against
any Proposal to which it relates, but will be counted for purposes of
determining whether a quorum is present. Abstentions will be counted as votes
present for purposes of determining a "majority of the outstanding voting
securities" present at the Meeting, and will therefore have the effect of
counting against the Proposal.
9
<PAGE>
SHAREHOLDER PROPOSALS
The Trust does not hold annual Shareholder Meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a subsequent
meeting should send their written proposals to the Secretary of the Trust c/o
SEI Investments Company, Legal Department, One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
REPORTS TO SHAREHOLDERS
The Trust will furnish, without charge, a copy of the most recent
Annual Report to Shareholders of the Trust and the most recent Semi-Annual
Report succeeding such Annual Report, if any, on request. Shareholders should
make requests by writing to the Trust c/o SEI Mutual Funds Services, at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, or by calling Jeff Winton of CRA
at 1-888-712-1103 or us at 1-800-932-7781.
OTHER MATTERS
The Trustees know of no other business to be brought before the
Meeting. However, if any other matters properly come before the Meeting, proxies
which do not contain specific restrictions to the contrary will be voted on such
matters in accordance with the judgment of the persons named in the enclosed
form of proxy.
-------------
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE- PAID ENVELOPE.
10
<PAGE>
ANNEX A
-------
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ___ day of ______________, 199__, by and between
The Advisors' Inner Circle Fund, a Massachusetts business trust (the "Trust"),
and the CRA Real Estate Securities, L.P. (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended, (the
"1940 Act") consisting of several series of shares, each having its own
investment policies; and
WHEREAS, the Trust has retained SEI Fund Resources (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its CRA Realty Shares Portfolio and such
other portfolios as the Trust and the Adviser may agree upon (the "Portfolios"),
and the Adviser is willing to render such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage
the investment and reinvestment of the assets, and to
continuously review, supervise, and administer the investment
program of the Portfolios, to determine in its discretion the
securities to be purchased or sold, to provide the
Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain,
and to render regular reports to the Administrator and to the
Trust's Officers and Trustees concerning the Adviser's
discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities
subject to the control of the Board of Trustees of the Trust
and in compliance with such policies as the Trustees may from
time to time establish, and in compliance with the objectives,
policies, and limitations for each such Portfolio set forth in
the Portfolio's prospectus and statement of additional
information as amended from time to time, and applicable laws
and regulations.
The Adviser accepts such employment and agrees, at its own
expense, to render the services and to provide the office
space, furnishings and equipment and the personnel required by
it to perform the services on the terms and for the
compensation provided herein.
A-1
<PAGE>
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select
the brokers or dealers that will execute the purchases and
sales of portfolio securities for the Portfolios and is
directed to use its best efforts to obtain the best net
results as described from time to time in the Portfolios'
Prospectuses and Statement of Additional Information. The
Adviser will promptly communicate to the Administrator and to
the officers and the Trustees of the Trust such information
relating to portfolio transactions as they may reasonably
request.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust
under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Trust to a
broker-dealer in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934 or as described
from time to time by the Portfolios' Prospectuses and
Statement of Additional Information.
3. COMPENSATION OF THE ADVISER. For the services to be rendered
by the Adviser as provided in Sections 1 and 2 of this
Agreement, the Trust shall pay to the Adviser compensation at
the rate specified in the Schedule(s) which are attached
hereto and made a part of this Agreement. Such compensation
shall be paid to the Adviser at the end of each month, and
calculated by applying a daily rate, based on the annual
percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net
assets for the month involved.
The fees payable to the Adviser under this Agreement shall be
paid into an interest-bearing escrow account in the event that
the holders of "a majority of the outstanding voting
securities" (as defined in the 1940 Act) of the Trust have not
voted to approve this Agreement by the date of the closing of
the acquisition by ING Real Estate of CRA Real Estate
Securities and Clarion Partners, an affiliate of the Adviser.
If such approval has subsequently been obtained by December
31, 1998, the fees paid by the Trust into the escrow account
(and interest thereon) shall be paid to the Adviser. If such
approval has not been obtained by December 31, 1998, this
Agreement shall terminate and the fees paid by the Trust into
the escrow account (and interest thereon) shall be paid to the
Trust.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the
termination of this Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of printing
and mailing reports, prospectuses, statements of additional
information, and sales literature relating to the solicitation
of prospective clients. The Trust shall pay all expenses
relating to mailing to existing shareholders prospectuses,
statements of additional information, proxy solicitation
material and shareholder reports.
A-2
<PAGE>
5. EXCESS EXPENSES. If the expenses for any Portfolio for any
fiscal year (including fees and other amounts payable to the
Adviser, but excluding interest, taxes, brokerage costs,
litigation, and other extraordinary costs) as calculated every
business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory
authority of any jurisdiction in which shares of a Portfolio
are qualified for offer and sale, the Adviser shall bear such
excess cost.
However, the Adviser will not bear expenses of any Portfolio
which would result in the Portfolio's inability to qualify as
a regulated investment company under provisions of the
Internal Revenue Code. Payment of expenses by the Adviser
pursuant to this Section 5 shall be settled on a monthly basis
(subject to fiscal year end reconciliation) by a reduction in
the fee payable to the Adviser for such month pursuant to
Section 3 and, if such reduction shall be insufficient to
offset such expenses, by reimbursing the Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to their
affairs as each may reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the
Trust are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others so long as its
services to the Trust are not impaired thereby. The Adviser
shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the 1940 Act which are prepared or
maintained by the Adviser on behalf of the Trust are the
property of the Trust and will be surrendered promptly to the
Trust on request.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the
Adviser shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be
asserted against the Adviser hereunder. The Adviser shall
not be liable for any error of judgment or mistake of law or
for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss
resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of
applicable state law or Federal securities law which cannot
be waived or modified hereby. (As used in this Paragraph 9,
the term "Adviser" shall include directors, officers,
employees and other corporate agents of the Adviser as well
as that corporation itself).
A-3
<PAGE>
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of
the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, partners, officers, or
shareholders, or otherwise; directors, partners, officers,
agents, and shareholders of the Adviser are or may be
interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor) is or may be
interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be
effected through affiliates of the Adviser if approved by
the Board of Trustees, subject to the rules and regulations
of the Securities and Exchange Commission.
11. LICENSE OF THE ADVISER'S NAME. The Adviser hereby agrees to
grant a license to the Trust for use of its name in the names
of the Portfolios for the term of this Agreement and such
license shall terminate upon termination of this Agreement.
12. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until
two years from date of execution, and thereafter, for
periods of one year so long as such continuance thereafter
is specifically approved at least annually (a) by the vote
of a majority of those Trustees of the Trust who are not
parties to this Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of
voting on such approval, and (b) by the Trustees of the
Trust or by vote of a majority of the outstanding voting
securities of each Portfolio; provided, however, that if the
shareholders of any Portfolio fail to approve the Agreement
as provided herein, the Adviser may continue to serve
hereunder in the manner and to the extent permitted by the
1940 Act and rules and regulations thereunder. The foregoing
requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed
in a manner consistent with the 1940 Act and the rules and
regulations thereunder.
This Agreement may be terminated as to any Portfolio at any
time, without the payment of any penalty by vote of a majority
of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio on not less
than 30 days nor more than 60 days written notice to the
Adviser, or by the Adviser at any time without the payment of
any penalty, on 90 days written notice to the Trust. This
Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed
postpaid, to the other party at any office of such party.
As used in this Section 11, the terms "assignment",
"interested persons", and a "vote of a majority of the
outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and
regulations thereunder; subject to such exemptions as may be
granted by the Securities and Exchange Commission under said
Act.
A-4
<PAGE>
14. CHANGE IN THE ADVISER'S MEMBERSHIP. The Adviser agrees that it
shall notify the Trust of any change in the membership of the
Adviser within a reasonable time after such change.
15. NOTICE. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by
registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at the last address
furnished by the other party to the party giving notice: if to
the Trust, at One Freedom Valley Road, Oaks, PA 19456 and if
to the Adviser, at 259 North Radnor-Chester Road, Suite 205,
Radnor, PA 19087.
16. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
17. GOVERNING LAW. This Agreement shall be governed by the
internal laws of the Commonwealth of Massachusetts, without
regard to conflict of law principles; provided, however, that
nothing herein shall be construed as being inconsistent with
the 1940 Act.
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and is not binding upon any of the Trustees, officers, or shareholders
of the Trust individually but binding only upon the assets and property of the
Trust.
No portfolio of the Trust shall be liable for the obligations of any other
portfolio of the Trust. Without limiting the generality of the foregoing, the
Adviser shall look only to the assets of the Portfolios for payment of fees for
services rendered to the Portfolios.
A-5
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE ADVISORS' INNER CIRCLE FUND
By: _________________________________
Attest: ______________________________
CRA REAL ESTATE SECURITIES, L.P.
By: _________________________________
Attest: ______________________________
A-6
<PAGE>
SCHEDULE
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ADVISORS' INNER CIRCLE FUND
AND
CRA REAL ESTATE SECURITIES, L.P.
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Portfolio Fee
- --------- ---
CRA Realty Shares Portfolio .70% of the average daily net assets
A-7
<PAGE>
ANNEX B
-------
INFORMATION REGARDING THE MANAGING DIRECTORS OF CRA:
Name* Position with CRA*
---- -----------------
Kenneth D. Campbell Chairman and Co-Portfolio Manager
T. Ritson Ferguson President and Co-Portfolio Manager
Jarrett B. Kling Managing Director
- ------------
* The principal business address of each Managing Director of CRA is Suite
205, 259 North Radnor-Chester Road, Radnor, Pennsylvania 19087. The
principal occupation of each Managing Director of CRA is serving in that
capacity to CRA.
B-1
<PAGE>
THE ADVISORS' INNER CIRCLE FUND
CRA REALTY SHARES PORTFOLIO
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
October 26, 1998
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
OF THE ADVISORS' INNER CIRCLE FUND
The undersigned Shareholder of the CRA Realty Shares Portfolio (the
"Portfolio") hereby appoint(s) Laurie Brooks, Joseph O'Donnell and Lydia A.
Gavalis and each of them (with full power of substitution), the proxy or proxies
of the undersigned to attend the Special Meeting of Shareholders of the
Portfolio to be held on October 26, 1998, and any adjournments thereof, to vote
all of the shares of the Portfolio that the signer would be entitled to vote if
personally present at the Special Meeting of Shareholders and on any other
matters brought before the Meeting, all as set forth in the Notice of Special
Meeting of Shareholders. Said proxies are directed to vote or refrain from
voting pursuant to the Proxy Statement as checked below upon the following
matters:
1. APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE ADVISORS'
INNER CIRCLE FUND AND CRA REAL ESTATE SECURITIES RELATING TO THE
MANAGEMENT OF THE ASSETS OF THE CRA REALTY SHARES PORTFOLIO.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement of the Board
of Trustees.
Your signature(s) on this proxy should be exactly as your name or names
appear on this proxy. If the shares are held jointly, each holder should sign.
If signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________________1998
- ---------------------------------------------
Signature
- ---------------------------------------------
Signature
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED HEREIN BY THE SIGNING
SHAREHOLDER. IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS RETURNED,
SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE BOARD OF
TRUSTEES FOR THE PROPOSAL.
PLEASE DATE, SIGN AND RETURN PROMPTLY.
