[logo omitted]
REALTY
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SHARES
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PORTFOLIO
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ANNUAL REPORT
TO SHAREHOLDERS
OCTOBER 31, 1998
ADVISED BY:
CRA REAL ESTATE
SECURITIES, L.P.
<PAGE>
[LOGO OMITTED]
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REALTY
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SHARES
PORTFOLIO
MANAGER'S DISCUSSION OF FUND PERFORMANCE
To Our Shareholders:
We present our report for the CRA Realty Shares Portfolio for the twelve-month
period ended October 31, 1998.
PORTFOLIO REVIEW:
The table below compares the net return for the portfolio to the two major real
estate securities indices and other stock and bond indices.
1998 Trailing Since Inception*
YTD 12 mo. (annualized)
CRA Realty Shares Portfolio -19.06% -14.16% 0.78%
Wilshire R.E. Securities -17.77 -14.25 -0.82
NAREIT - Equity REITs -16.60 -12.78 0.17
S&P 500 (Large Co. Stocks) 14.72 22.01 26.11
Russell 2000 (Small Co. Stocks) -12.81 -11.86 3.59
Lehman Gov't/Corp. Bonds 8.56 10.27 10.03
*INCEPTION DATE: 1/1/97
The portfolio's returns have lagged comparative indices for the last 12 months
but continue to exceed the indices for the period since inception. Overall, real
estate securities have trailed the broader equity markets and the bond market in
1998 as fears of an economic slowdown and oversupply in the real estate sector
precipitated continued selling of real estate securities by non-dedicated REIT
investors. Volatility continues to be a hallmark of this current market cycle.
Returns in October alone experienced considerable price swings in all of the
stock indices--in some cases as much as 15%.
The performance for the various property types is shown in the chart below.
Hotels have been the worst performers for 1998, off more than 40% year-to-date.
Hotel company stocks have also been the most volatile real estate securities.
Some of the larger hotel companies experienced approximately 30% swings from
high to low prices during October alone. Office companies, in which the
portfolio has been consistently over weighted during the year, have also lagged
the indices, off 21% on average in 1998. Retail company stocks continue to be
the best performers on a year-to-date basis.
WILSHIRE REAL ESTATE SECURITIES INDEX
PERFORMANCE BY PROPERTY TYPE AS OF 10/31/98
Weight 1998 1997 Trailing
Property Type in Index YTD Rank 1997 Rank 1 year
Shopping Centers 9.0% -0.9% 1 21.0% 4 4.9%
Malls 10.9 -2.0 2 11.9 8 5.9
Mfr. Homes 1.7 -2.5 3 19.4 6 4.1
Apartments 18.2 -9.1 4 15.5 7 -5.3
Storage 4.4 -9.5 5 3.1 9 -3.1
Industrial 5.1 -10.5 6 20.8 5 -6.4
Outlet Centers 1.0 -12.4 7 -4.6 10 -17.3
Diversified 21.0 -16.5 8 24.4 3 -12.1
Office 15.3 -21.1 9 32.4 1 -16.3
Hotels 13.4 -42.1 10 24.5 2 -43.4
Total 100.0% -17.8% 19.8% -14.3%
CRA REAL ESTATE SECURITIES, L.P.
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AN AFFILIATE OF CLARION PARTNERS
<PAGE>
OUTLOOK:
Persistent uncertainty about the direction of the economy for 1999, and its
implications for corporate earnings continues to contribute to the increased
volatility of the market and real estate stock prices by extension. Until there
is greater certainty about the economy and the major variables that affect real
estate markets and real estate investment returns, we may continue to experience
some near term volatility in real estate securities returns.
Despite the appropriately cautious tone of the preceding paragraph, we are
encouraged by recent events and believe the long-term outlook for real estate
securities is improving. The Federal Reserve Bank's (FRB) decision to cut
interest rates in mid-October (which was followed by other nations' rate cuts
around the world) may provide some stimulus for additional economic growth via
liquidity in the capital markets. The FRB's interest rate cuts may not prevent
an economic slow down. However, the cuts do signal an important commitment to
maintain sufficient liquidity in financial markets and thereby ensure that the
market pricing mechanism can rationally reprice the impact on earnings and risk
associated with an economic slow down (rather than a credit-crisis driven plunge
in securities prices). While the risk of recession has not disappeared, its
likelihood seems to be receding, aided in part by the FRB's interest rate cut,
but supported by other economic data on retail sales and job growth.
We are optimistic about the return potential for a diversified portfolio of real
estate securities for the following reasons:
1) Real estate fundamentals are in better shape now than in past economic
slow downs.
2) Capital markets are working well to ration capital to real estate in
advance of deteriorating real estate market conditions.
3) Dividend yields are compelling at 7.2% and are well supported by
companies' cash flows.
4) Valuations are compelling and depend on little more than dividend
income and modest earnings growth to deliver the prospect of double
digit returns.
COMPARISON OF CHANGE IN THE
VALUE OF A $10,000 INVESTMENT
IN THE CRA REALTY SHARES PORTFOLIO,
VERSUS THE S&P 500 COMPOSITE
INDEX, THE WILSHIRE REAL ESTATE
SECURITIES INDEX, AND
THE NAREIT EQUITY INDEX
One Year Annualized
Return Inception to
Date
-14.16% 0.78%
[graph omitted]
Plot points are as follows:
S&P 500 Wilshire Real
CRA Realty Shares Composite Index Estate Securities Index
12/96 10,000 10,000 10,000
10/97 11,817 12,529 11,488
10/98 10,144 15,283 9,851
NAREIT Equity Index
12/96 10,000
10/97 11,502
10/98 10,031
Figures represent the period from December 31, 1996 through October 31, 1998.
1These figures represent past performance. Past performance is no guarantee of
future results. The investment return and principal value of an investment will
fluctuate, so an investor's shares, when redeemed, may be worth more or less
than their original cost.
CRA REAL ESTATE SECURITIES, L.P.
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AN AFFILIATE OF CLARION PARTNERS
<PAGE>
In addition, earnings estimates for next year and those likely to appear soon
for the year 2000 will reflect a very conservative and cautious view of real
estate markets and companies' access to capital. Simply put, expectations are
low. Most analysts' estimates assume no contribution to earnings growth from
acquisitions and often reflect growth from existing properties assuming a low or
no-growth economy. If the economy does avoid recession, and if liquidity in the
markets allows access to new debt and equity capital for the best managed real
estate companies, these companies may make compelling new investments in the
form of acquisitions or development. If this occurs, the industry may return to
an environment where earnings estimates for public real estate companies will
again be revised upward. In this type of environment, the strongest companies
will prosper.
We continue to emphasize and build our positions in proven operators with high
earnings yields, strong internal growth prospects, secure dividends, strong
balance sheets, competitive and well managed properties, and experienced and
disciplined management. In terms of property sectors, we continue to favor and
over weight office (for longer lease terms and attractive valuations),
apartments (for visible and high earnings yields), and malls (for durable/safe
earnings and attractive income yields). Presently, we remain underweighted in
hotels (until further evidence of no recession emerges), industrial (valuations
too high), and manufactured homes (high valuations also).
We appreciate your continued confidence in CRA Real Estate Securities. Be
assured that providing quality, risk-averse management through these changing
markets consumes the efforts of CRA's dedicated management team.
Sincerely,
CRA REAL ESTATE SECURITIES, L.P.
/s/signature omitted /s/signature omitted
T. Ritson Ferguson Kenneth D. Campbell
Co-Portfolio Manager Co-Portfolio Manager
CRA REAL ESTATE SECURITIES, L.P.
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AN AFFILIATE OF CLARION PARTNERS
<PAGE>
STATEMENT OF NET ASSETS
October 31, 1998
Market
Value
CRA REALTY SHARES PORTFOLIO Shares (000)
EQUITIES (97.5%)
DIVERSIFIED PROPERTY HOLDINGS (8.9%)
Catellus Development Corp.* 91,500 $ 1,258
Northstar Capital Investment Corp. 20,000 400
Station Casinos* 32,400 194
Trizec Hahn Corp. 97,400 1,869
Vornado Operating Co.* 1,825 11
Vornado Realty Trust 36,500 1,230
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4,962
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HEALTH CARE FACILITIES (0.5%)
Capital Senior Living Corp.* 24,600 289
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INDUSTRIAL (1.9%)
AMB Property Corp. 9,400 216
Prologis Trust 37,500 818
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1,034
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INDUSTRIAL/OFFICE MIX (14.4%)
American Real Estate Investment Corp. 67,000 988
Duke Realty Investments 103,600 2,473
Prentiss Properties Trust 94,400 1,947
Spieker Properties 45,000 1,552
TriNet Corporate Realty Trust 36,700 1,055
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8,015
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OFFICE (14.0%)
CarrAmerica Realty Trust 84,200 1,894
Equity Office Properties Trust 110,657 2,656
Highwoods Properties Inc. 78,100 2,182
Kilroy Realty Corp. 48,500 1,076
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7,808
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RESIDENTIAL: APARTMENTS (22.9%)
Apartment Investment Management Co. 73,100 2,554
AvalonBay Communities Inc. 86,268 2,771
BRE Properties 62,400 1,505
Camden Property Trust 62,100 1,669
Equity Residential Properties Trust 66,800 2,806
Post Properties Inc. 37,700 1,459
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12,764
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RESIDENTIAL: HOTELS (5.8%)
Host Marriott Corp.* 85,700 1,243
Patriot American Hospitality Inc. 20,300 180
Starwood Hotels & Resorts 63,557 1,799
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3,222
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RETAIL: MALLS (13.4%)
General Growth Properties Inc. 58,400 2,077
Rouse Company 49,500 1,389
Simon Property Group 93,028 2,785
Urban Shopping Centers 35,900 1,185
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7,436
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Shares/ Market
Face Amount Value
(000) (000)
RETAIL: SHOPPING CENTERS (12.3%)
Bradley Real Estate Inc. 58,800 $ 1,235
Developers Diversified Realty Corp. 107,800 2,035
JDN Realty Corp. 56,450 1,203
Kimco Realty Corp. 45,000 1,792
Weingarten Realty Investors 13,000 578
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6,843
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SELF STORAGE (3.4%)
Public Storage Inc. 57,500 1,535
Storage Trust Realty 15,000 337
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1,872
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TOTAL EQUITIES
(Cost $57,857) 54,245
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REPURCHASE AGREEMENT (1.5%)
Morgan Stanley
4.75%, dated 10/30/98, matures
11/02/98, repurchase price $831,761
(collateralized by a U.S. Treasury
Instrument, par value $859,147, matures
01/07/99, market value $852,384) $831 831
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TOTAL REPURCHASE AGREEMENT
(Cost $831) 831
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TOTAL INVESTMENTS (99.0%)
(Cost $58,688) 55,076
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OTHER ASSETS AND LIABILITIES,
NET (1.0%) 541
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NET ASSETS:
Portfolio Shares -- Institutional Class
(unlimited authorization -- no par
value) based on 6,108,904 outstanding shares
of beneficial interest 61,529
Distributions in excess of
net investment income (36)
Accumulated net realized loss
on investments (2,264)
Net unrealized depreciation on investments (3,612)
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TOTAL NET ASSETS (100.0%) $55,617
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Net Asset Value, Offering and Redemption
Price Per Share $9.10
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*NON-INCOME PRODUCING SECURITY
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS
11/1/97 TO
10/31/98
CRA REALTY SHARES PORTFOLIO (000)
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Investment Income:
Dividend Income......................................................$ 1,803
Interest Income ..................................................... 98
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Total Investment Income............................................ 1,901
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Expenses:
Investment Advisory Fees ............................................ 310
Investment Advisory Fee Waiver ...................................... (78)
Administrative Fees ................................................. 75
Custodian Fees ...................................................... 10
Professional Fees ................................................... 39
Transfer Agent Fees ................................................. 29
Printing Fees ....................................................... 16
Trustee Fees ........................................................ 5
Registration and Filing Fees ........................................ 30
Amortization of Deferred Organizational Costs ....................... 6
Other Fees........................................................... 2
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Total Expenses .................................................... 444
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Net Investment Income ........................................... 1,457
Net Realized Loss from Securities Sold .............................. (2,038)
Net Unrealized Depreciation of Investment Securities ................ (6,937)
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Net Realized and Unrealized Loss on Investments ................... (8,975)
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Net Decrease in Net Assets Resulting from Operations.................$(7,518)
================================================================================
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
11/1/97 1/1/97
TO 10/31/98 TO 10/31/97(1)
CRA REALTY SHARES PORTFOLIO (000) (000)
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<S> <C> <C>
Investment Activities:
Net Investment Income................................................................ $ 1,457 $ 502
Net Realized Gain (Loss) on Securities Sold ......................................... (2,038) 1,697
Net Change in Unrealized Appreciation (Depreciation) of Investment Securities ....... (6,937) 1,512
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Net Increase (Decrease) in Net Assets Resulting from Operations.................... (7,518) 3,711
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Distributions to Shareholders:
Net Investment Income ............................................................... (1,784) (633)
Realized Capital Gain ............................................................... (1,540) --
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Total Distributions ............................................................... (3,324) (633)
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Capital Share Transactions:
Shares Issued ....................................................................... 30,081 24,407
Shares Issued in Connection with Purchase In-Kind (2)................................ -- 7,497
Shares Issued in Lieu of Cash Distributions ......................................... 2,788 407
Shares Redeemed ..................................................................... (1,207) (592)
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Increase in Net Assets Derived from Capital Share Transactions....................... 31,662 31,719
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Total Increase in Net Assets ...................................................... 20,820 34,797
Net Assets:
Beginning of Period ................................................................. 34,797 --
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End of Period ....................................................................... $55,617 $34,797
========================================================================================================================
Shares Issued and Redeemed:
Shares Issued ...................................................................... 2,939 2,297
Shares Issued in Connection with Purchase In-Kind................................... -- 749
Shares Issued in Lieu of Cash Distributions ........................................ 259 37
Shares Redeemed .................................................................... (118) (54)
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Net Increase in Share Transactions ................................................ 3,080 3,029
========================================================================================================================
</TABLE>
(1) The CRA Realty Shares Portfolio commenced operations on January 1, 1997.
(2) During 1997, the Fund received securities in-kind with market value of
$7,497,000, including unrealized appreciation approximating $1,852,000.
Amounts designated as "--" are either $0 or have been rounded to $0.
The accompanying notes are an integral part of the financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
For a Share Outstanding Throughout the Period ended October 31,
<TABLE>
Net Net Net
Asset Realized and Distributions Distributions Asset Assets
Value Net Unrealized from Net from Value End
Beginning Investment Gain (Loss) on Investment Capital End Total of Period
of Period Income Securities Income Gains of Period Return (1) (000)
--------- ---------- -------------- ------------- ------------- --------- ---------- ---------
- ---------------------------
CRA REALTY SHARES PORTFOLIO
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 $11.49 0.35 (1.85) (0.40) (0.49) $ 9.10 (14.16)% $55,617
1997(2) $10.00 0.26 1.53 (0.30) -- $11.49 18.17% $34,797
</TABLE>
<TABLE>
Ratio Ratio Investment
of Net of Expenses Income
Ratio Investment to Average to Average
of Expenses Income Net Assets Net Assets Portfolio
to Average to Average (Excluding (Excluding Turnover
Net Assets Net Assets Waivers) Waivers) Rate
----------- ---------- ----------- ---------- ---------
- ---------------------------
CRA REALTY SHARES PORTFOLIO
- ---------------------------
<S> <C> <C> <C> <C> <C>
1998 1.00% 3.29% 1.17% 3.12% 73.54%
1997(2) 1.00%* 2.91%* 1.63%* 2.28%* 102.74%
</TABLE>
* Annualized
(1) Total return is for the period indicated and has not been annualized.
(2) The CRA Realty Shares Portfolio commenced operations on January 1, 1997.
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS CRA REALTY SHARES PORTFOLIO
October 31, 1998
1. ORGANIZATION:
THE ADVISORS' INNER CIRCLE FUND (the "Trust") is organized as a Massachusetts
business trust under an Amended and Restated Agreement and Declaration of Trust
dated February 18, 1997. The Trust is registered under the Investment Company
Act of 1940, as amended, as a diversified open-end management investment company
with eight portfolios. The financial statements herein are those of the CRA
Realty Shares Portfolio (the "Fund"). The financial statements of the remaining
portfolios are not presented herein. The assets of each portfolio are
segregated, and a Shareholder's interest is limited to the portfolio in which
shares are held. The Fund's prospectus provides a description of the Fund's
investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of the significant accounting policies followed by
the Fund.
SECURITY VALUATION -- Investments in equity securities which are traded on a
national exchange (or reported on the NASDAQ national market system) are
stated at the last quoted sales price if readily available for such equity
securities on each business day; other equity securities traded in the
over-the-counter market and listed equity securities for which no sale was
reported on that date are stated at the last quoted bid price. Debt
obligations exceeding sixty days to maturity for which market quotations are
readily available are valued at the most recently quoted bid price. Debt
obligations with sixty days or less remaining until maturity may be valued at
their amortized cost, which approximates market value.
FEDERAL INCOME TAXES -- It is the Fund's intention to qualify as a regulated
investment company by complying with the appropriate provisions of the
Internal Revenue Code of 1986, as amended. Accordingly, no provision for
Federal income taxes is required.
SECURITY TRANSACTIONS AND RELATED INCOME -- Security transactions are
accounted for on the date the security is purchased or sold (trade date).
Costs used in determining realized gains and losses on the sales of
investment securities are those of the specific securities sold, adjusted for
the accretion and amortization of purchase discounts or premiums during the
respective holding period which is calculated using the effective interest
method. Interest income is recognized on the accrual basis. Dividend income
is recorded on the ex-date.
NET ASSET VALUE PER SHARE -- The net asset value per share of the Fund is
calculated on each business day by dividing the total value of assets, less
liabilities, by the number of shares outstanding.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the respective agreements
mature. Provisions of the repurchase agreements ensure that the market value
of the collateral, including accrued interest thereon, is sufficient in the
event of default by the counterparty. If the counterparty defaults and the
value of the collateral declines or if the counterparty enters into an
insolvency proceeding, realization of the collateral by the Fund may be
delayed or limited.
EXPENSES -- Expenses that are directly related to the Fund are charged to the
Fund. Other operating expenses of the Trust are prorated to the Fund on the
basis of relative daily net assets compared to the aggregate daily net assets
of the Trust.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income are
declared and paid to Shareholders quarterly. Any net realized capital gains
are distributed to Shareholders at least annually.
Distributions from net investment income and net realized capital gains are
determined in accordance with the U.S. Federal income tax regulations, which
may differ from those amounts determined under generally accepted accounting
principles. These book/tax differences are either temporary or permanent in
nature. To the extent these differences are permanent, they are charged or
credited to paid-in-capital in the period that the differences arise. These
reclassifications have no effect on net assets or net asset value.
USE OF ESTIMATES -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The majority of the dividend income recorded by the Fund is from Real Estate
Investment Trusts ("REITs"). For tax purposes, a portion of these dividends
consists of capital gains and returns of capital. The Fund's Administrator
estimates the return of capital based upon historical returns of capital paid
by each REIT in prior periods. These estimates are then reconciled to the
actual returns of capital reported by the REITs shortly after calendar year
end, and an adjustment, if any is required, is then recorded by the Fund.
3. ORGANIZATION COSTS AND TRANSACTIONS WITH AFFILIATES:
The Fund incurred organization costs of approximately $32,000. These costs have
been capitalized by the Fund and are being amortized over sixty months
commencing with the start-up. In the event the initial shares of the Fund are
redeemed by any holder thereof during the period that the Fund is amortizing its
organizational costs, the redemption proceeds payable to the holder thereof by
the Fund will be reduced by the unamortized organizational costs in the same
ratio as the number of initial shares being redeemed bears to the number of
initial shares outstanding at the time of redemption. These costs include legal
fees of approximately $13,000 for organizational work performed by a law firm of
which a trustee of the Trust is a partner and two officers of the Trust are
partners.
Certain officers of the Trust are also officers of SEI Investments Mutual Funds
Services (the "Administrator") and/or SEI Investments Distribution Co. (the
"Distributor"). Such officers are paid no fees by the Trust for serving as
officers of the Trust.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded) CRA REALTY SHARES PORTFOLIO
October 31, 1998
4. ADMINISTRATION, SHAREHOLDER SERVICING AND DISTRIBUTION AGREEMENTS:
The Trust and the Administrator are parties to an Administration Agreement under
which the Administrator provides management and administrative services for an
annual fee equal to the higher of $75,000 or 0.15% of the first $100 million of
the Portfolio's average daily net assets; 0.125% of the next $100 million of the
Portfolio's average daily net assets; 0.10% of the next $100 million of the
Portfolio's average daily net assets; and 0.08% of the Portfolio's average daily
net assets over $300 million.
DST Systems Inc. (the "Transfer Agent") serves as the transfer agent and
dividend disbursing agent for the Fund under a transfer agency agreement
with the Trust.
The Trust and Distributor are parties to a Distribution Agreement. The
Distributor receives no fees for its distribution services under this agreement.
5. INVESTMENT ADVISORY AND CUSTODIAN AGREEMENTS:
The Trust and CRA Real Estate Securities, L.P. (the "Adviser") are
parties to an Investment Advisory Agreement under which the Adviser receives an
annual fee equal to .70% of the Fund's average daily net assets. The Adviser
has, on a voluntary basis, agreed to waive its fee and reimburse Fund expenses
as applicable in order to limit the Fund's total operating expenses to a maximum
of 1.00% of the average daily net assets for Institutional shares. The Adviser
reserves the right to terminate this arrangement at any time in its sole
discretion.
First Union National Bank acts as custodian (the "Custodian") for the Fund. Fees
of the Custodian are paid on the basis of the net assets of the Fund. The
Custodian plays no role in determining the investment policies of the Fund or
which securities are to be purchased and sold by the Fund.
6. INVESTMENT TRANSACTIONS:
The cost of security purchases and the proceeds from security sales, other than
short-term investments, for the year ended October 31, 1998, are as follows:
(000)
--------
Purchases............................... $64,143
Sales .................................. $31,453
At October 31, 1998, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes were not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the Fund
at October 31, 1998, is as follows:
(000)
--------
Aggregate gross unrealized
appreciation ................................. $ 2,116
Aggregate gross unrealized
depreciation ................................. (5,728)
-------
Net unrealized depreciation .................... $(3,612)
=======
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Trustees of
CRA Realty Shares Portfolio of
Advisors' Inner Circle Fund:
We have audited the accompanying statement of net assets of the CRA Realty
Shares Portfolio (the "Fund"), one of the funds constituting Advisors' Inner
Circle Fund, as of October 31, 1998, and the related statements of operations,
changes in net assets, and financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1998, by correspondence with the custodian
and broker. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
CRA Realty Shares Portfolio of Advisors' Inner Circle Fund as of October 31,
1998, and the results of its operations, changes in its net assets, and
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pennsylvania
December 18, 1998
<PAGE>
THE ADVISORS' INNER CIRCLE FUND
CRA REALTY SHARES PORTFOLIO
OCTOBER 26, 1998
INSPECTOR'S REPORT
- --------------------------------------------------------------------------------
I, the undersigned, duly appointed Inspector of Election, acting at the
special meeting of The Advisor's Inner Circle Fund, a Massachusetts business
trust, held this day, having taken an oath to fairly an impartially perform my
duties and having conducted the voting and received the votes of the
shareholders cast by ballots, do hereby certify that:
PROPOSAL 1: The vote of the shareholders on the proposal for approval of a
new Investment Advisory Agreement between The Advisors' Inner Circle Fund and
CRA Real Estate Securities relating to the Management of Assets of the CRA
Realty Shares Portfolio was as follows:
FOR 3,282,193 of shares voted 57.34% of shares outstanding
AGAINST 16,278 of shares voted 0.28% of shares outstanding
ABSTAIN 0 of shares voted 0% of shares outstanding
I declare: That a "majority of the outstanding voting securities' (as defined
in the Investment Company of 1940, as amended) of the CRA Realty
Shares Portfolio of The Advisors' Inner Circle Fund have voted in
favor of the new Investment Advisory Agreement.
IN WITNESS WHEREOF, the undersigned has executed this report on this 26th day
of October, 1998.
/s/signature omitted
Michael Bellopede
Inspector of Election
<PAGE>
NOTES
<PAGE>
FUND:
CRA REALTY SHARES PORTFOLIO
P.O. Box 419009
Kansas City, MO 64141-6009
ADVISER:
CRA REAL ESTATE SECURITIES, L.P.
Suite 205, 259 N. Radnor-Chester Road
Radnor, PA 19087
DISTRIBUTOR:
SEI INVESTMENTS DISTRIBUTION CO.
Oaks, PA19456
ADMINISTRATOR:
SEI INVESTMENTS MUTUAL FUNDS SERVICES
Oaks, PA19456
LEGAL COUNSEL:
MORGAN, LEWIS & BOCKIUS LLP
1800 M Street N.W.
Washington, DC 20036
INDEPENDENT PUBLIC ACCOUNTANTS:
ARTHUR ANDERSEN LLP
1601 Market Street
Philadelphia, PA 19103
This information must be preceded or accompanied by a current
prospectus for the Fund described.
CRA-F-004-02000
