GARDNER LEWIS INVESTMENT TRUST, N-30D, 1998-10-21

GARDNER LEWIS INVESTMENT TRUST
N-30D, 1998-10-21

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_______________________________________________________

THE CHESAPEAKE FUNDS
_______________________________________________________

October 1, 1998

Dear Shareholder:

The Chesapeake Growth Fund Institutional Class closed the third quarter
with a loss of 22.3%. This loss compares to losses of 9.9%, 22.7%, and 20.1% for
the S&P 500, Nasdaq Industrials, and Russell 2000, respectively, and leaves us
down 12.3% year-to-date. Negative news revolving around everything from Japanese
and Russian economic turmoil to the White House scandal has heightened investor
nervousness, and in turn, market volatility. As if these problems are not
enough, the bankruptcy of several hedge funds and the well-publicized Fed
orchestrated bailout of Long Term Capital Management have further fueled
anxiety.

The market's sell-off has been both broad and steep, our portfolio's to
a greater degree. We are disappointed with our relative performance and
attribute it primarily to three things. Most importantly, we underestimated the
impact that global concerns would have on investor sentiment as it relates to
U.S. retail. In addition, the recent disruption of capital markets created an
inability for a number of our companies to raise the funds needed to fully
execute their aggressive growth plans. Finally, we miscalculated the risk to the
healthcare industry's ability to profit under the government's new reimbursement
plan.

Most of the damage to the market was done in August, and the
preponderance to smaller stocks. The Russell 2000 was off over 30% from its
April high as compared to the S&P 500 which was off less than 20% from its high.
We attribute this difference to a lack of trading liquidity in the smallest
names as price insensitive selling ran into buyers reluctant to commit capital
in this volatile tape. At the end of August, almost 20% of the names in the
Russell 2000 were down 60% or more from their highs, almost half were down 40%
or more, and 75% were down more than 25%. Selling was truly universal in smaller
stocks.

Macroeconomic concerns acted as fuel for this sell-off as investors
attempted to project implications of an uncertain global economic environment
against a benign domestic environment. Interest rates are low and falling, and
inflation remains dormant with commodity prices hitting new lows. Balanced
against this are the possible implications of global weakness to U.S. corporate
profits. Nervousness about what might happen has driven investors' decisions
over the past weeks more than any measurable or real change in the macroeconomic
state. Problems in Russia illustrate this important distinction. Though
virtually insignificant as a part of the global economy, with trade representing
less than 1% of U.S. gross domestic product, Russian turmoil provided an
emotional catalyst that sparked a change in investor psychology. Problems in
Asia have far more fundamental weight, and perhaps it was a lack of positive
change in that region that heightened investor nervousness. The point is that
current nervousness is about what could happen, not what did happen in the
business environment.
<PAGE>

Since the beginning of August, we have logged more than 1500 contacts
with our investment companies, their customers, competitors and suppliers in an
effort to quantify true business prospects, rather than conjectured ones.
Further, we have been diligent in our attempts to quantify risks associated with
the most negative of global macroeconomic scenarios as they relate to our
investment companies. Our companies are smaller, less globally oriented, more
proprietary in their businesses, and have earnings that are far less sensitive
to macroeconomic change than the typical larger company. In the universe of
giant multinationals, selling has been based on the reasonable concern that
future corporate profits may not be able to justify current valuations. In the
smaller company universe, selling has been far less fundamentally based.

We believe a number of developments can turn current market sentiment.
From a macroeconomic perspective they are a credible reform package for Japan, a
clear direction for the resolution of the White House scandal, the abatement of
tax related selling which is now severe in small and mid-sized stocks, and to a
lesser degree further action on the part of the Federal Reserve. From a
microeconomic perspective, it is company earnings. What is important here is not
a complete resolution to these issues, but a belief on the part of investors
that things will begin to improve.

This point is most clearly evidenced when studying the market's
activity surrounding the Persian Gulf War. The best time to invest was not
January 17th, the day U.S. planes began to bomb, but instead in the middle of
October when the Press was exaggerating the strength of the Republican Guard. In
our case, we would have missed a portfolio rally of 30% had we waited.
Fortunately, our discipline precludes us from so doing. And, ironically, many
investors even missed the late winter move because they wanted a complete
resolution to the war before committing funds. By the time the war had ended,
our portfolio return had further accelerated far surpassing its initial gain,
and the S&P 500 had appreciated 21% from its low. The point is that markets are
anticipatory, thus it is direction that moves them. Conclusion is too late.

From our perspective, the macroeconomic issues are being addressed,
with the Japanese situation being the most tenuous. Thus, we believe that
earnings should finally begin to command an increasingly larger portion of
investor attention. In fact, this may already be happening. With recent
pre-announcements by some of this market's seemingly bulletproof companies, like
Coca-Cola, Gillette, and Disney, we have seen commensurate compression in their
stock prices. This makes fundamental sense, because it is these companies that
rely heavily on foreign sales or traffic for their continued growth.

Despite the market's recent correction, larger companies are still
trading at price-earnings multiples that are historically somewhat high, though
some would argue justifiably so, given the interest rate environment. On the
other hand, in the same interest rate environment, smaller companies are trading
at historically low multiples and at unprecedented multiples relative to larger
ones. We have found price-earnings multiples as low as those now in smaller
stocks in only a handful of modern periods. During the mini-crash of October
1997, multiples were not this low; during Iraq's invasion of Kuwait, multiples
bottomed at these levels; during the crash of 1987, they bottomed at these
levels; and, through the mid-seventies bear market, they reached levels lower
than these, though with much higher interest rates and inflation.
<PAGE>

In previous periods of great market turmoil, we have found some of our
best opportunities as bottoms up fundamental stockpickers. It typically takes
some time for the dust to settle and the market to sort through companies'
fundamental prospects in order to differentiate those that sold off for rational
reasons from those that were simply caught in the downdraft. Some of our best
results in the past have been derived coming out of these types of market
environments. We feel that our investment discipline puts us one step ahead of
most market participants in these rebuilding phases, and are busy evaluating the
opportunities currently presented.

Sincerely,

W. Whitfield Gardner John L. Lewis, IV
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Portfolio Spotlight September 30, 1998

Because recent market activity has been centered around macro economic
events, most of our portfolio's short-term performance can be explained by them.
Nevertheless, there have been two significant longer-term investment trends
whose participating companies you may have noticed under-weighted in our
portfolio. The first and most influential has been the benefit of a declining
interest rate environment on a consolidating financial services industry.
Greater involvement in financial services would have helped our performance
dramatically over the past couple of years, as it did the indices to which we
compare. The second trend has been the speculation surrounding the development
of the internet. Internet related companies, although not a significant
weighting in any benchmark, have garnered a great deal of investor attention and
significantly benefited those exposed to them. We thought it important that we
address both trends.

Until recently, as interest rates declined, interest rate sensitive
instruments including equities like banks, utilities, and real estate investment
trusts benefited tremendously. Additionally, these companies wanting some form
of earnings growth, and fueled by higher stock prices, initiated acquisition
strategies that further elevated prices in the group. Where we could participate
by investing in companies with more estimable profits, we did. But, given that
the businesses of many of these companies were highly susceptible to interest
rate fluctuations and had unacceptably low growth rates, we passed over the
majority. The net result of this interest rate movement was that the financial
services sector accounted for more than half of the performance of the Russell
2000 and one third of that of the Russell Midcap, from the beginning of 1996
until quarter end. Most dramatic was that smaller bank stocks had five times the
average return of the Russell 2000. During this period, we averaged
significantly less exposure to the financial services group than the Russell
indices. We continue to feel strongly that the managements of the companies we
invest in should have more control over their companies' earnings prospects, and
that relying on an interest rate decline, or a takeover, for stock price
appreciation violates one of the major tenants of our investment discipline. We
will continue to invest in the growing number of financial institutions that
have taken steps to insulate themselves from interest rate risk, allowing their
managements better control of profit generation.

As to the internet, we, like others, believe it will be a viable
vehicle for commerce and where practical are participating in its growth.
Unfortunately, the general excitement surrounding it has caused many of its
related companies' stock prices to come public and then trade at astronomical
valuations. Most of these companies are yet to produce a profit and will not for
some time. Thus, evaluating their worth is very difficult. Tangentially, cable
stocks have been beneficiaries of this internet boom, but they too carry much of
their current valuation for speculative reasons, such as assumed consolidation,
rather than measurable ones, like strong profit growth. For this reason, the
only viable approach within our discipline has been to participate through those
companies helping to build the equipment that makes the internet work and whose
sales and profits are estimable. Nevertheless, it has been the concept-oriented
companies that have been the strongest performers.

We have seen this pattern repeated before, where the concept precedes
the reality. For instance, this is the second run for the cable companies whose
fortunes had reversed approximately a decade ago when investors panicked out of
their stocks as they came to realize that fundamentals were far behind the
excitement. And just a few years ago this same phenomenon was repeated in
cellular stocks when investors grew to understand that remote mountain locations
did not have the population to support operators' aggressive infrastructure
builds. These industries make it, but few in the originally anticipated form. It
takes longer, is more costly, more competitive, and less profitable than at
first thought. Thus, despite the ramp a number of the internet related stocks
are now on, there will ultimately be a day of reckoning when investors will ask
each company management, "What are you going to earn?". In the case of Netscape,
the original internet darling, this has meant a stock price decline of 75%. Our
discipline is founded in fundamentals, because the market is grounded by them.
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Morningstar Ratings Revisited

With 75% of all small-cap growth mutual funds currently rated one-star
by Morningstar, we thought it timely to comment on the Morningstar rating
process. To understand how one investment style can earn such a disproportionate
share of Morningstar's lowest rating, one needs to look at how the ratings are
calculated.

Morningstar ratings are based on risk adjusted performance within a
broad asset class, e.g. U.S. equities, U.S. fixed income. Morningstar compares
each fund's monthly return results against Treasury Bills and derives a measure
of risk (average underperformance) and return (excess return). Monthly risk and
return numbers are ranked against all other funds in the asset class and
combined, resulting in a risk adjusted relative performance ranking. Stars are
assigned based on this relative ranking. For a domestic equity fund to receive
five stars, its risk adjusted performance must be at the top of all U.S. equity
funds that Morningstar tracks. The point is that in U.S. equity funds, no
distinction is made between investment style categories like large-cap value or
small-cap growth.

Over the past several years, the large-cap growth sector of the market
has performed tremendously well, with relatively low levels of risk. Stocks
outside of this universe have fared relatively poorly. Consequently, five-star
funds are heavily clustered in the large-cap growth category. Conversely, fully
75% of Morningstar's small-cap growth funds rate only one star when compared to
all other U.S. stock funds. Less than 10% of small-cap growth funds rate as high
as three stars, and none rate four stars or five stars.

So why should these one-star funds be a part of an investment
portfolio? Two reasons: future performance and risk diversification.

There is ample academic evidence that the past performance of an
investment category is a poor predictor of its future returns. Yet 90% of all
new mutual fund money is invested in five-star and four-star funds whose returns
are based solely on their historical performance; and currently, most of these
funds are in the same category, large-cap growth. Thus, everyone is driving in
the same direction, but looking only in the rear-view mirror. There is also
ample evidence that extraordinary performance of an investment category, good or
bad, eventually reverts to its average. Thus, now more than usual, the
historical returns of these currently strong performing funds may not be
indicative of their future returns.

When one considers the impact of star dependence on diversification,
the picture only gets worse. Diversification, combining different investments to
smooth out the bumps of their individual returns, lowers average risk without
changing average returns. But, there is no diversification if the different
investments all behave similarly. Owning several large-cap growth funds offers
limited diversification benefit over owning one large-cap growth fund. However,
owning a large-cap fund, a small-cap fund, and an international fund can offer
more meaningful diversification. In today's environment, with five-star funds
all clustered in the U.S. large-cap growth category, a portfolio comprised
solely of five-star funds would be absent a significant part of the investible
universe and thus forego important diversification opportunities.

Successful investors remember two things. The first is to avoid the
trap of piling into yesterday's hot investment category which may not be
tomorrow's. The second is to reap the rewards of diversification by combining
holdings that do not go up, or more importantly go down, for the same reasons.
<PAGE>

_____________________________________

THE CHESAPEAKE GROWTH FUND
_____________________________________

September 30, 1998

Investment Strategy
- --------------------------------------------------------------------------------
The Chesapeake Growth Fund seeks capital appreciation primarily through
investments in small, medium, and large growth equities. The cornerstone of the
fund's intensive in-house fundamental analysis is in constant contact with the
management, customers, competitors, and suppliers of both current and potential
investments.

Investment Guidelines
- --------------------------------------------------------------------------------
The Fund seeks companies that:

* are experiencing a rapid growth rate - companies in our portfolio are
forecasted to grow their profits in excess of 15% annually;

* are selling at a stock price not yet fully reflective of their growth rate;

* are undergoing a positive change created by new products, managements,
distribution strategies or manufacturing technologies;

* have a strong balance sheet and are less susceptible to macroeconomic
change.

The Largest Industry Groups [Represented by a Pie Chart in mailings]
- ----------------------------------

Computers & Peripherals - 12.7%
Telecommunications - 9.4%
Computer Software - 9.3%
Business Services - 9.1%
Energy Services - 6.9%
Pharmaceuticals - 6.2%
Apparel - 6.0%
Healthcare Delivery - 5.3%
Retail Sales & Distribution - 5.1%
Bldg. Supplies/Housing Related - 4.2 %
All Others - 25.6%

Ten Largest Holdings
- ----------------------------------------
1. EMC Corporation 5.6%
2. MCI Worldco Inc. 4.2%
3. Jones Apparel Group, Inc. 3.8%
4. IMS Health Inc. 3.5%
5. Biomet, Inc. 2.9%
6. CalEnergy 2.9%
7. Sun Microsystems, Inc. 2.6%
8. Mylan Laboratories 2.5%
9. Federal-Mogul Corp. 2.5%
10. Accustaff Inc. 2.3%

Portfolio Characteristics
- ----------------------------------------
Overall Assets ($MM) 192
Number of Companies 66
5 Yr. Historical Earnings Growth 30%
Earnings Growth - net year 28%
P/E Ratio - next year 15
(Gardner Lewis earnings estimates)

Performance Summary
- -------------------------------------------------------------
Period Ended Since
9/30/98 1 Year 3 Year Inception
- -------------------------------------------------------------
The Chesapeake
Growth Fund -24.6% 1.7% 11.5%
Institutional Shares
- -------------------------------------------------------------

Historical performance for The Chesapeake Growth Fund Institutional Series has
been calculated by using the performance of an original class of The Fund (known
as the A Shares) from inception on April 6,1994 until the date of issuance of
the new Institutional Series on April 7, 1995, and combining such performance
with the performance of the Institutional Series since April 7, 1995. The
performance quoted represents past performance and is not a guarantee of future
results. Share price and investment return will vary, so you may have a gain or
loss when you sell shares.

For more complete information regarding The Fund including charges and
expenses, obtain a prospectus by calling the Fund directly at (800)430-3863 or
Gardner Lewis Asset Management, the Investment Advisor at (610)558-2800.

Must be accompanied or preceded by a prospectus.
Capital Investment Group, Inc., Distributor
Raleigh, NC (800)525-3863
<PAGE>
<TABLE>
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_________________________________________________________________________________

THE CHESAPEAKE GROWTH FUND
_________________________________________________________________________________

PORTFOLIO OF INVESTMENTS
(unaudited)
September 30, 1998

===================================================== ======================================================
Quantity Security Market Value Quantity Security Market Value
===================================================== ======================================================
119,000 AES Corporation 4,410,438 127,400 HCR Manor Care Inc. 3,734,413
302,200 Accustaff Inc. 4,457,450 44,700 Hertz Corp. 1,871,813
133,300 Adaptec, Inc. 1,266,350 106,600 IMS Health Inc. 6,602,538
48,100 Airborne Freight Corp. 832,731 103,000 Integrated Health Service 1,731,688
60,800 Allmerica Financial Corp. 3,625,200 67,100 Johns Manville Corp. 763,263
96,200 American Power Conversion 3,625,538 313,900 Jones Apparel Group, Inc. 7,200,081
65,800 Ascend Communications 2,993,900 148,500 K Mart Corp. 1,782,000
86,100 BE Aerospace, Inc. 1,894,200 161,800 MCI Worldcom Inc. 7,907,975
64,600 BMC Software, Inc. 3,880,038 48,100 Maytag 2,296,775
157,600 Biomet, Inc. 5,466,750 14,200 McKesson Corp. 1,301,075
70,900 Borders Group, Inc. 1,577,525 97,000 Micron Technology 2,952,438
74,270 CKE Restaurants 2,209,533 113,900 Mohawk Industries, Inc. 3,118,013
84,850 Cable Design Technologies 1,081,838 163,700 Mylan Laboratories, Inc. 4,829,150
189,800 Cabletron Systems 2,135,250 106,300 Networks Associates, Inc. 3,773,650
70,900 Cadence Design Systems 1,812,381 108,400 Newbridge Networks Corp. 1,944,425
205,100 CalEnergy 5,435,150 121,500 Petrol Geo Service ADR 1,936,406
69,200 Ceridian Corporation 3,970,350 48,100 Platinum Tech, Inc. 865,800
100,400 Champion Enterprises 2,334,300 170,800 Rational Software Corp. 2,871,575
162,000 Checkfree Holdings Corp. 1,599,750 77,100 Rite Aid Corporation 2,737,050
77,600 Comair Holdings, Inc. 2,231,000 98,700 SCI Systems, Inc. 2,658,731
182,300 DSP Communications, Inc. 1,503,975 101,300 Saks, Inc. 2,272,919
107,200 E C I Telecom, Ltd. 2,626,400 42,200 Southdown Inc. 1,899,000
184,400 EMC Corporation 10,579,950 50,600 Staples, Inc. 1,486,375
113,900 FORE Systems, Inc. 1,893,588 85,700 Sterling Software, Inc. 2,378,175
116,500 Fairfield Communities 1,165,000 60,800 Suiza Foods 1,900,000
101,300 Federal-Mogul Corp. 4,735,775 97,900 Sun Microsystems, Inc. 4,876,644
138,400 Flowers Industries, Inc. 3,018,850 130,350 Sunterra Corp. 847,275
32,900 Forest Laboratories, Inc. 1,130,938 458,700 Systems Software Associates, Inc.2,322,169
59,700 Gateway 2000, Inc. 3,123,056 70,900 Warnaco Group, Inc. 1,639,563
153,600 Genesis Health Ventures 1,881,600 88,400 Waste Management, Inc. 4,248,725
94,500 Genzyme General Division 3,413,813 51,100 Wellpoint Health Networks Inc. 2,864,794
132,500 Global Industries, Ltd. 1,532,031 252,700 Wolverine World Wide, Inc. 2,748,113
53,200 Gulfstream Aerospace Corp. 2,141,300

TOTAL EQUITY 190,423,926

CASH EQUIVALENT 1,530,108

TOTAL ASSETS 191,954,034
</TABLE>
<PAGE>

_______________________________________________________

THE CHESAPEAKE FUNDS
_______________________________________________________

October 1, 1998

Dear Shareholder:

The Chesapeake Growth Fund Series A closed the third quarter with a
loss of 22.4%. This loss compares to losses of 9.9%, 22.7%, and 20.1% for the
S&P 500, Nasdaq Industrials, and Russell 2000, respectively, and leaves us down
12.3% year-to-date. Negative news revolving around everything from Japanese and
Russian economic turmoil to the White House scandal has heightened investor
nervousness, and in turn, market volatility. As if these problems are not
enough, the bankruptcy of several hedge funds and the well-publicized Fed
orchestrated bailout of Long Term Capital Management have further fueled
anxiety.

Most of the damage to the market was done in August, and the
preponderance to smaller stocks. The Russell 2000 was off over 30% from its
April high as compared to the S&P 500 which was off less than 20% from its high.
We attribute this difference to a lack of trading liquidity in the smallest
names as price insensitive selling ran into buyers reluctant to commit capital
in this volatile tape. At the end of August, almost 20% of the names in the
Russell 2000 were down 60% or more from their highs, almost half were down 40%
or more, and 75% were down more than 25%. Selling was truly universal in smaller
stocks.

Sincerely,

W. Whitfield Gardner John L. Lewis, IV
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Portfolio Spotlight September 30, 1998

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Morningstar Ratings Revisited

So why should these one-star funds be a part of an investment
portfolio? Two reasons: future performance and risk diversification.

_____________________________________

THE CHESAPEAKE GROWTH FUND
_____________________________________

September 30, 1998

Investment Guidelines
- --------------------------------------------------------------------------------
The Fund seeks companies that:

* are experiencing a rapid growth rate - companies in our portfolio are
forecasted to grow their profits in excess of 15% annually;

* are selling at a stock price not yet fully reflective of their growth rate;

* are undergoing a positive change created by new products, managements,
distribution strategies or manufacturing technologies;

* have a strong balance sheet and are less susceptible to macroeconomic
change.

The Largest Industry Groups [Represented by a Pie Chart in mailings]
- ----------------------------------

Performance Summary
- -------------------------------------------------------------
Period Ended Since
9/30/98 1 Year 3 Year Inception
- -------------------------------------------------------------
The Chesapeake
Growth Fund -27.2% 0.3% 10.5%
Series A
- -------------------------------------------------------------

Fund performance is net of the maximum 3% sales load. Historical performance for
The Chesapeake Growth Fund Series A has been calculated by using the performance
of the original class of The Fund (now called the Institutional Shares) from
inception on April 6, 1994 until the date of issuance of the new Series A Shares
on April , 1995, and combining such performance with the performance of the
Series A Shares since April 7, 1995. The performance quoted represents past
performance and is not a guarantee of future results. Share price and investment
return will vary, so you may have a gain or loss when you sell shares.

Must be accompanied or preceded by a prospectus.
Capital Investment Group, Inc., Distributor
Raleigh, NC (800)525-3863

_________________________________________________________________________________

THE CHESAPEAKE GROWTH FUND
_________________________________________________________________________________

PORTFOLIO OF INVESTMENTS
(unaudited)
September 30, 1998

TOTAL EQUITY 190,423,926

CASH EQUIVALENT 1,530,108

TOTAL ASSETS 191,954,034
</TABLE>
<PAGE>

_______________________________________________________

THE CHESAPEAKE FUNDS
_______________________________________________________

October 1, 1998

Dear Shareholder:

The Chesapeake Growth Fund Series C closed the third quarter with a
loss of 22.8%. This loss compares to losses of 9.9%, 22.7%, and 20.1% for the
S&P 500, Nasdaq Industrials, and Russell 2000, respectively, and leaves us down
13.5% year-to-date. Negative news revolving around everything from Japanese and
Russian economic turmoil to the White House scandal has heightened investor
nervousness, and in turn, market volatility. As if these problems are not
enough, the bankruptcy of several hedge funds and the well-publicized Fed
orchestrated bailout of Long Term Capital Management have further fueled
anxiety.

Most of the damage to the market was done in August, and the
preponderance to smaller stocks. The Russell 2000 was off over 30% from its
April high as compared to the S&P 500 which was off less than 20% from its high.
We attribute this difference to a lack of trading liquidity in the smallest
names as price insensitive selling ran into buyers reluctant to commit capital
in this volatile tape. At the end of August, almost 20% of the names in the
Russell 2000 were down 60% or more from their highs, almost half were down 40%
or more, and 75% were down more than 25%. Selling was truly universal in smaller
stocks.

Sincerely,

W. Whitfield Gardner John L. Lewis, IV
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Portfolio Spotlight September 30, 1998

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Morningstar Ratings Revisited

So why should these one-star funds be a part of an investment
portfolio? Two reasons: future performance and risk diversification.

_____________________________________

THE CHESAPEAKE GROWTH FUND
_____________________________________

September 30, 1998

Investment Guidelines
- --------------------------------------------------------------------------------
The Fund seeks companies that:

* are experiencing a rapid growth rate - companies in our portfolio are
forecasted to grow their profits in excess of 15% annually;

* are selling at a stock price not yet fully reflective of their growth rate;

* are undergoing a positive change created by new products, managements,
distribution strategies or manufacturing technologies;

* have a strong balance sheet and are less susceptible to macroeconomic
change.

The Largest Industry Groups [Represented by a Pie Chart in mailings]
- ----------------------------------

Performance Summary
- -------------------------------------------------------------
Period Ended Since
9/30/98 1 Year 3 Year Inception
- -------------------------------------------------------------
The Chesapeake
Growth Fund -26.3% 0.1% 8.2%
Series C
- -------------------------------------------------------------

The inception date of the Series C of the Fund was April 7, 1995. The
performance quoted represents past performance and is not a guarantee of future
results. Share price and investment return will vary, so you may have a gain or
loss when you sell shares.

Must be accompanied or preceded by a prospectus.
Capital Investment Group, Inc., Distributor
Raleigh, NC (800)525-3863
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>

_________________________________________________________________________________

THE CHESAPEAKE GROWTH FUND
_________________________________________________________________________________

PORTFOLIO OF INVESTMENTS
(unaudited)
September 30, 1998

TOTAL EQUITY 190,423,926

CASH EQUIVALENT 1,530,108

TOTAL ASSETS 191,954,034
</TABLE>
<PAGE>

__________________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________________

October 1, 1998

Dear Shareholder:

The Chesapeake Growth Fund Series D closed the third quarter with a
loss of 22.5%. This loss compares to losses of 9.9%, 22.7%, and 20.1% for the
S&P 500, Nasdaq Industrials, and Russell 2000, respectively, and leaves us down
12.7% year-to-date. Negative news revolving around everything from Japanese and
Russian economic turmoil to the White House scandal has heightened investor
nervousness, and in turn, market volatility. As if these problems are not
enough, the bankruptcy of several hedge funds and the well-publicized Fed
orchestrated bailout of Long Term Capital Management have further fueled
anxiety.

Most of the damage to the market was done in August, and the
preponderance to smaller stocks. The Russell 2000 was off over 30% from its
April high as compared to the S&P 500 which was off less than 20% from its high.
We attribute this difference to a lack of trading liquidity in the smallest
names as price insensitive selling ran into buyers reluctant to commit capital
in this volatile tape. At the end of August, almost 20% of the names in the
Russell 2000 were down 60% or more from their highs, almost half were down 40%
or more, and 75% were down more than 25%. Selling was truly universal in smaller
stocks.

<PAGE>

Sincerely,

W. Whitfield Gardner John L. Lewis, IV
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Portfolio Spotlight September 30, 1998

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Morningstar Ratings Revisited

So why should these one-star funds be a part of an investment
portfolio? Two reasons: future performance and risk diversification.

_____________________________________

THE CHESAPEAKE GROWTH FUND
_____________________________________

September 30, 1998

Investment Guidelines
- --------------------------------------------------------------------------------
The Fund seeks companies that:

* are experiencing a rapid growth rate - companies in our portfolio are
forecasted to grow their profits in excess of 15% annually;

* are selling at a stock price not yet fully reflective of their growth rate;

* are undergoing a positive change created by new products, managements,
distribution strategies or manufacturing technologies;

* have a strong balance sheet and are less susceptible to macroeconomic
change.

The Largest Industry Groups [Represented by a Pie Chart in mailings]
- ----------------------------------

Performance Summary
- -------------------------------------------------------------
Period Ended Since
9/30/98 1 Year 3 Year Inception
- -------------------------------------------------------------
The Chesapeake
Growth Fund -26.5% 0.3% 10.5%
Series D
- -------------------------------------------------------------

Fund performance is net of the maximum 1.5% sales load. Historical performance
for The Chesapeake Growth Fund Series D has been calculated by using the
performance of an original class of The Fund ( known as the B Shares ) from
inception on April , 1994 until the conversion into the new Series D Shares on
April 7, 1995. The performance quoted represents past performance and is not a
guarantee of future results. Share price and investment return will vary, so you
may have a gain or loss when you sell shares.

Must be accompanied or preceded by a prospectus.
Capital Investment Group, Inc., Distributor
Raleigh, NC (800)525-3863
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_________________________________________________________________________________

THE CHESAPEAKE GROWTH FUND
_________________________________________________________________________________

PORTFOLIO OF INVESTMENTS
(unaudited)
September 30, 1998

TOTAL EQUITY 190,423,926

CASH EQUIVALENT 1,530,108

TOTAL ASSETS 191,954,034
</TABLE>
<PAGE>

________________________________________________________________________________

THE CHESAPEAKE GROWTH FUND

________________________________________________________________________________

a series of the Gardner Lewis Investment Trust

Semi-Annual Report 1998

FOR THE PERIOD ENDED AUGUST 31

INVESTMENT ADVISOR
Gardner Lewis Asset Management
285 Wilmington-West Chester Pike
Chadds Ford, Pennsylvania 19317

THE CHESAPEAKE GROWTH FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-800-430-3863

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THE CHESAPEAKE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
Value
Shares (note 1)
- ------------------------------------------------------------------------------------------------------------------------------------

COMMON STOCKS - 94.51%

Aerospace & Defense - 2.07%
(a) BE Aerospace, Inc. ................................................... 92,300 $ 1,920,994
(a) Gulfstream Aerospace Corporation ..................................... 57,600 2,023,200
------------
3,944,194
------------
Apparel Manufacturing - 4.78%
(a) Jones Apparel Group, Inc. ............................................ 299,800 5,846,100
Liz Claiborne, Inc. .................................................. 29,600 843,600
The Warnaco Group, Inc. .............................................. 88,300 2,406,175
------------
9,095,875
------------
Auto & Trucks - 0.89%
Hertz Corporation .................................................... 44,600 1,683,650
------------

Auto Parts - Replacement Equipment - 3.07%
Federal-Mogul Corporation ............................................ 109,400 5,839,225
------------

Building Materials - 0.43%
Southdown, Inc. ...................................................... 19,500 823,875
------------

Commercial Services - 1.11%
(a) Cendant Corporation .................................................. 182,200 2,106,687
------------

Computers - 10.07%
(a) Adaptec, Inc. ........................................................ 144,100 1,657,150
(a) EMC Corporation ...................................................... 241,300 10,828,337
(a) Gateway 2000, Inc. ................................................... 59,300 2,805,631
(a) Sun Microsystems, Inc. ............................................... 97,600 3,867,400
------------
19,158,518
------------
Computer Software & Services - 9.56%
(a) BMC Software, Inc. ................................................... 64,400 2,724,925
(a) Cadence Design Systems, Inc. ......................................... 77,300 1,632,962
Ceridian Corporation ................................................. 75,500 3,661,750
CheckFree Holdings Corporation ....................................... 170,800 1,462,475
IMS Health Incorporated .............................................. 106,600 5,863,000
(a) Network Associates, Inc. ............................................. 50,600 1,631,850
System Software Associates, Inc. ..................................... 267,000 1,201,500
------------
18,178,462
------------

(Continued)
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THE CHESAPEAKE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

COMMON STOCKS - (Continued)

Electronics - 2.72%
(a) SCI Systems, Inc. .................................................... 105,200 $ 2,413,025
(a) American Power Conversion Corporation ................................ 102,100 2,756,700
------------
5,169,725
------------
Electronics - Semiconductor - 0.61%
(a) Novellus Systems, Inc. ............................................... 43,400 1,155,525
------------

Environmental Control - 2.16%
Waste Management, Inc. ............................................... 93,000 4,103,625
------------

Financial Services - 1.22%
(a) UniCapital Corporation ............................................... 220,200 2,312,100
------------

Food - Processing - 1.68%
(a) Suiza Foods .......................................................... 65,900 3,187,913
------------

Food - Wholesale - 1.41%
Flowers Industries, Inc. ............................................. 150,000 2,671,875
------------

Foreign Securities - 2.59%
ECI Telecommunications Limited ....................................... 116,900 3,214,750
(a) Petroleum Geo-Services - ADR ......................................... 131,200 1,705,600
------------
4,920,350
------------
Homebuilders - 1.34%
(a) Champion Enterprises, Inc. ........................................... 109,200 2,552,550
------------

Household Products & Housewares - 1.15%
Maytag Corporation ................................................... 50,600 2,182,125
------------

Human Resources - 1.25%
(a) AccuStaff Incorporated ............................................... 85,600 1,070,000
(a) Metamor Worldwide, Inc. .............................................. 55,200 1,311,000
------------
2,381,000
------------
Industrial Materials - 0.68%
(a) Cable Design Technologies ............................................ 92,450 1,300,078
------------

Insurance - Multiline - 2.08%
Allmerica Financial Corporation ...................................... 66,300 3,953,138
------------

(Continued)
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THE CHESAPEAKE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

COMMON STOCKS - (Continued)

Investment Trust - 1.08%
CarrAmerica Realty Corporation ....................................... 91,600 $ 2,061,000
------------

Lodging - 1.33%
(a) Sunterra Corporation ................................................. 142,150 1,306,003
(a) Fairfield Communities, Inc. .......................................... 124,900 1,217,775
------------
2,523,778
------------
Medical - Biotechnology - 1.62%
Biogen, Inc. ......................................................... 45,200 2,090,500
(a) Genzyme Corporation (General Division) ............................... 38,300 986,225
------------
3,076,725
------------
Medical - Hospital Management & Services - 5.30%
Columbia/HCA Healthcare Corporation .................................. 88,300 1,992,269
(a) Genesis Health Ventures, Inc. ........................................ 163,300 1,939,187
(a) HEALTHSOUTH Corporation .............................................. 94,800 1,795,275
Integrated Health Services, Inc. ..................................... 111,200 2,147,550
(a) Wellpoint Health Networks, Inc. ...................................... 41,300 2,204,388
------------
10,078,669
------------
Medical Supplies - 2.23%
Biomet, Inc. ......................................................... 157,600 4,235,500
------------

Miscellaneous - Manufacturing - 1.42%
AMETEK, Inc. ......................................................... 138,900 2,708,550
------------

Oil & Gas - Equipment & Services - 1.35%
(a) Global Industries Ltd. ............................................... 235,100 2,204,063
Varco International, Inc. ............................................ 52,200 371,925
------------
2,575,988
------------
Pharmaceuticals - 4.22%
(a) Forest Laboratories, Inc. ............................................ 34,900 1,177,875
Jones Pharma Incorporated ............................................ 94,000 1,962,250
Mylan Laboratories Inc. .............................................. 174,100 3,960,775
(a) PharMerica, Inc. ..................................................... 239,000 933,606
------------
8,034,506
------------
Restaurants & Food Services - 1.32%
CKE Restaurants, Inc. ................................................ 81,070 2,513,170
------------

(Continued)
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THE CHESAPEAKE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

COMMON STOCKS - (Continued)

Retail - Department Stores - 2.95%
(a) Consolidated Stores Corporation ...................................... 89,856 $ 2,830,464
(a) Proffitt's, Inc. ..................................................... 108,800 2,774,400
------------
5,604,864
------------
Retail - General Merchandise - 1.09%
Kmart Corporation .................................................... 162,000 2,065,500
------------

Retail - Specialty Line - 3.56%
(a) Borders Group, Inc. .................................................. 77,300 1,463,869
Pier 1 Imports, Inc. ................................................. 253,650 2,504,794
(a) Staples, Inc. ........................................................ 103,200 2,799,300
------------
6,767,963
------------
Shoes - Leather - 1.49%
Wolverine World Wide, Inc. ........................................... 269,400 2,828,700
------------

Telecommunications - 2.02%
(a) DSP Communications, Inc. ............................................. 191,300 2,187,994
(a) Newbridge Networks Corporation ....................................... 89,400 1,659,487
------------
3,847,481
------------
Textiles - 1.69%
(a) Mohawk Industries, Inc. .............................................. 299,800 3,211,406
------------

Transportation - Air - 1.65%
Airborne Freight Corporation ......................................... 51,300 1,000,350
Comair Holdings, Inc. ................................................ 83,700 2,129,119
------------
3,129,469
------------
Utilities - Electric - 4.79%
(a) CalEnergy Company, Inc. .............................................. 221,400 5,631,862
The AES Corporation .................................................. 127,600 3,477,100
------------
9,108,962
------------
Utilities - Telecommunications - 3.47%
(a) WorldCom, Inc. ....................................................... 161,300 6,603,219
------------

Utilities - Water - 1.06%
(a) United States Filter Corporation ..................................... 111,900 2,014,200
------------

Total Common Stocks (Cost $203,828,055) .............................. 179,710,140
------------

(Continued)
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THE CHESAPEAKE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

INVESTMENT COMPANIES - 5.66%

Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ............................. 9,338,823 $ 9,338,823
Evergreen Money Market Treasury Institutional Treasury
Money Market Fund Institutional Service Shares ....................... 1,416,063 1,416,063
------------

Total Investment Companies (Cost $10,754,886) ........................ 10,754,886
------------

Total Value of Investments (Cost $214,582,94% (b)) ........................................ 100.17 % $190,465,026
Liabilities In Excess of Other Assets ..................................................... (0.17)% (317,522)
------- ------------
Net Assets ......................................................................... 100.00 % $190,147,504
======= ============

(a) Non-income producing investment.

(b) Aggregate cost for financial reporting and federal income tax
purposes is the same. Unrealized appreciation (depreciation) of
investments for financial reporting and federal income tax purposes
is as follows:

Unrealized appreciation $ 26,842,894
Unrealized depreciation (50,960,809)
------------

Net unrealized depreciation $(24,117,915)
============

The following acronym is used in this portfolio:

ADR - American Depository Receipt

See accompanying notes to financial statements
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THE CHESAPEAKE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

August 31, 1998
(Unaudited)

ASSETS
Investments, at value (cost $214,582,941) ..................................................... $190,465,026
Income receivable ............................................................................. 87,486
Receivable for investments sold ............................................................... 708,576
Receivable for fund shares sold ............................................................... 418,143
Deferred organization expenses, net (note 3) .................................................. 1,902
Other assets .................................................................................. 178
------------

Total assets ............................................................................. 191,681,311
------------

LIABILITIES
Accrued expenses .............................................................................. 61,594
Payable for investment purchases .............................................................. 1,092,147
Payable for fund shares redeemed .............................................................. 344,151
Disbursements in excess of cash on demand deposit ............................................. 35,915
------------

Total liabilities ........................................................................ 1,533,807
------------

NET ASSETS ........................................................................................... $190,147,504
============

NET ASSETS CONSIST OF
Paid-in capital ............................................................................... $202,696,552
Undistributed net realized gain on investments ................................................ 11,568,867
Net unrealized depreciation on investments .................................................... (24,117,915)
------------
$190,147,504
============
INSTITUTIONAL SHARES
Net asset value, redemption and offering price per share
($69,229,942 / 5,295,455 shares outstanding) .................................................... $13.07
======

SERIES A INVESTOR SHARES
Net asset value, redemption and offering price per share
($24,594,367 / 1,902,888 shares outstanding) .................................................... $12.92
======
Maximum offering price per share (100 / 97 of $12.92) ................................................ $13.32
======

SERIES C INVESTOR SHARES
Net asset value, redemption and offering price per share
($2,594,438 / 209,267 shares outstanding) ....................................................... $12.40
======

SERIES D INVESTOR SHARES
Net asset value, redemption and offering price per share
($7,112,111 / 559,457 shares outstanding) ....................................................... $12.71
======
Maximum offering price per share (100 / 98.5 of $12.71) .............................................. $12.90
======

SUPER-INSTITUTIONAL SHARES
Net asset value, redemption and offering price per share
($86,616,646 / 6,599,065 shares outstanding) .................................................... $13.13
======

See accompanying notes to financial statements
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THE CHESAPEAKE GROWTH FUND

STATEMENT OF OPERATIONS

Period ended August 31, 1998
(Unaudited)

INVESTMENT LOSS

Income
Dividends ...................................................................................... $ 443,052
------------

Expenses
Investment advisory fees (note 2) .............................................................. 1,314,777
Fund administration fees (note 2) .............................................................. 95,083
Distribution fees - Series A (note 4) .......................................................... 45,377
Distribution fees - Series C (note 4) .......................................................... 14,581
Distribution fees - Series D (note 4) .......................................................... 27,343
Custody fees ................................................................................... 6,619
Registration and filing administration fees (note 2) ........................................... 11,583
Fund accounting fees (note 2) .................................................................. 42,000
Audit fees ..................................................................................... 4,500
Legal fees ..................................................................................... 13,820
Securities pricing fees ........................................................................ 2,404
Shareholder administration fees ................................................................ 24,967
Shareholder recordkeeping fees ................................................................. 18,100
Shareholder servicing expenses ................................................................. 9,583
Registration and filing expenses ............................................................... 23,693
Printing expenses .............................................................................. 9,869
Amortization of deferred organization expenses (note 3) ........................................ 6,734
Trustee fees and meeting expenses .............................................................. 4,561
Other operating expenses ....................................................................... 10,285
------------

Total expenses ............................................................................ 1,685,879
------------

Less:
Expense reimbursements - Super-Institutional Class (note 2) ......................... (11,915)
Expense reductions (note 6) ......................................................... (12,359)
Shareholder administration fees waived (note 2) ..................................... (12,500)
------------

Net expenses .............................................................................. 1,649,105
------------

Net investment loss ................................................................. (1,206,053)
------------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

Net realized gain from investment transactions ...................................................... 7,329,825
Decrease in unrealized appreciation on investments .................................................. (76,202,064)
------------

Net realized and unrealized loss on investments ................................................ (68,872,239)
------------

Net decrease in net assets resulting from operations ...................................... $(70,078,292)
============

See accompanying notes to financial statements
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THE CHESAPEAKE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
Period ended Year ended
August 31, February 28,
1998 1998
- ------------------------------------------------------------------------------------------------------------------------------------
(DECREASE) INCREASE IN NET ASSETS
Operations
Net investment loss ............................................................... $ (1,206,053) $ (2,437,229)
Net realized gain from investment transactions .................................... 7,329,825 34,915,833
(Decrease) increase in unrealized appreciation on investments ..................... (76,202,064) 22,557,525
------------ ------------
Net (decrease) increase in net assets resulting from operations ............... (70,078,292) 55,036,129
------------ ------------
Distributions to shareholders from
Tax return of capital ............................................................. 0 (7,366,935)
Net realized gain from investment transactions .................................... 0 (26,747,385)
------------ ------------
Decrease in net assets resulting from distributions ........................... 0 (34,114,320)
------------ ------------
Capital share transactions
(Decrease) increase in net assets resulting from capital share transactions (a) ... (7,791,129) 15,554,185
------------ ------------
Total (decrease) increase in net assets .................................. (77,869,421) 36,475,994
NET ASSETS
Beginning of period .................................................................... 268,016,925 231,540,931
------------ ------------
End of period .......................................................................... $190,147,504 $268,016,925
============ ============

(a) A summary of capital share activity follows:
------------------------------------------------------------------------------
Period ended Year ended
August 31, 1998 February 28, 1998
Shares Value Shares Value
------------------------------------------------------------------------------
- -----------------------------------------------------
Institutional Shares
- -----------------------------------------------------
Shares sold ......................................... 633,833 $ 11,437,635 1,051,514 $ 19,879,652
Shares issued for reinvestment of distributions ..... 0 0 700,580 12,393,286
Shares redeemed ..................................... (537,544) (9,543,477) (1,340,894) (23,569,381)
------------ ------------ ------------ ------------
Net increase ................................ 96,289 $ 1,894,158 411,200 $ 8,703,557
============ ============ ============ ============
- -----------------------------------------------------
Series A Shares
- -----------------------------------------------------
Shares sold ......................................... 84,995 $ 1,482,418 530,549 $ 9,940,125
Shares issued for reinvestment of distributions ..... 0 0 285,571 5,008,907
Shares redeemed ..................................... (495,548) (8,673,588) (936,063) (17,142,515)
------------ ------------ ------------ ------------
Net decrease ................................ (410,553) $ (7,191,170) (119,943) $ (2,193,483)
============ ============ ============ ============
- -----------------------------------------------------
Series C Shares
- -----------------------------------------------------
Shares sold ......................................... 116 $ 2,000 51,400 $ 892,071
Shares issued for reinvestment of distributions ..... 0 0 30,187 514,986
Shares redeemed ..................................... (56,167) (959,817) (391,932) (6,437,614)
------------ ------------ ------------ ------------
Net decrease ................................ (56,051) $ (957,817) (310,345) $ (5,030,557)
============ ============ ============ ============
- -----------------------------------------------------
Series D Shares
- -----------------------------------------------------
Shares sold ......................................... 8,520 $ 152,434 21,553 $ 358,036
Shares issued for reinvestment of distributions ..... 0 0 81,859 1,418,612
Shares redeemed ..................................... (105,205) (1,688,734) (116,844) (2,013,186)
------------ ------------ ------------ ------------
Net decrease ................................ (96,685) $ (1,536,300) (13,432) $ (236,538)
============ ============ ============ ============
- -----------------------------------------------------
Super-Institutional Shares
- -----------------------------------------------------
Shares sold ......................................... 0 $ 0 0 $ 0
Shares issued for reinvestment of distributions ..... 0 0 806,720 14,311,206
Shares redeemed ..................................... 0 0 0 0
------------ ------------ ------------ ------------
Net increase ................................ 0 $ 0 806,720 $ 14,311,206
============ ============ ============ ============
- -----------------------------------------------------
Fund Summary
- -----------------------------------------------------
Shares sold ......................................... 727,464 $ 13,074,487 1,655,016 $ 31,069,884
Shares issued for reinvestment of distributions ..... 0 0 1,904,917 33,646,997
Shares redeemed ..................................... (1,194,464) (20,865,616) (2,785,733) (49,162,696)
------------ ------------ ------------ ------------
Net (decrease) increase ..................... (467,000) $ (7,791,129) 774,200 $ 15,554,185
============ ============ ============ ============

See accompanying notes to financial statements.
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THE CHESAPEAKE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Period)
(Unaudited)

Institutional Class

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
April 6, 1994
Period (commencement
ended Year ended Year ended Year ended of oper) to
August 31, February 28, February 28, February 29, February 28,
1998 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of period ....................... $ 17.86 $ 16.26 $ 14.45 $ 11.31 $ 10.00

Income from investment operations
Net investment loss ................................. (0.08) (0.15) (0.13) (0.05) (0.04)
Net realized and unrealized (loss) gain on investments (4.71) 4.22 1.94 3.38 1.35
-------- -------- -------- -------- --------

Total from investment operations .................. (4.79) 4.07 1.81 3.33 1.31
-------- -------- -------- -------- --------

Distributions to shareholders from
Net investment income ............................... 0.00 0.00 0.00 (0.11) 0.00
Tax return of capital ............................... 0.00 (0.53) 0.00 0.00 0.00
Net realized gain from investment transactions ...... 0.00 (1.94) 0.00 (0.08) 0.00
-------- -------- -------- -------- --------

Total distributions ............................... (0.00) (2.47) 0.00 (0.19) 0.00
-------- -------- -------- -------- --------

Net asset value, end of period ............................. $ 13.07 $ 17.86 $ 16.26 $ 14.45 $ 11.31
======== ======== ======== ======== ========

Total return (a) ........................................... (26.80)%(d) 25.25 % 12.53 % 29.66 % 13.12 %(d)
======== ======== ======== ======== ========

Ratios/supplemental data
Net assets, end of period (000's) ..................... $ 69,230 $ 92,858 $ 77,858 $ 80,252 $ 15,088
======== ======== ======== ======== ========

Ratio of expenses to average net assets
Before expense reimbursements and waived fees ....... 1.22 %(b) 1.19 % 1.23 % 1.65 % 2.75 %(b)
After expense reimbursements and waived fees ........ 1.20 %(b) 1.16 % 1.22 % 1.49 % 1.73 %(b)

Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ....... (0.88)%(b) (0.90)% (0.85)% (0.98)% (1.80)%(b)
After expense reimbursements and waived fees ........ (0.86)%(b) (0.88)% (0.84)% (0.82)% (0.78)%(b)

Portfolio turnover rate ............................... 49.24 % 105.60 % 126.44 % 99.33 % 64.92 %

Average broker commission per share (c) ............... $0.0588 $ 0.0576 $ 0.0600 -- --

(a) Total return does not reflect payment of a sales charge.
(b) Annualized.
(c) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(d) Aggregate return. Not annualized.

See accompanying notes to financial statements (Continued)
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THE CHESAPEAKE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Period)
(Unaudited)

Super-Institutional Class

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
June 12, 1996
(commencement of
Period ended Year ended operations) to
August 31, February 28, February 28,
1998 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of period .............................. $ 17.92 $ 16.29 $ 15.53

Income from investment operations
Net investment loss ........................................ (0.06) (0.12) (0.07)
Net realized and unrealized (loss) gain on investments ..... (4.73) 4.22 0.83
-------- -------- --------

Total from investment operations ......................... (4.79) 4.10 0.76
-------- -------- --------

Distributions to shareholders from
Net investment income ...................................... (0.00) 0.00 0.00
Tax return of capital ...................................... 0.00 (0.53) 0.00
Net realized gain from investment transactions ............. 0.00 (1.94) 0.00
-------- -------- --------

Total distributions ...................................... 0.00 (2.47) 0.00
-------- -------- --------

Net asset value, end of period .................................... $ 13.13 $ 17.92 $ 16.29
======== ======== ========

Total return (a) .................................................. (26.77)%(d) 25.40 % 4.89 %(d)
======== ======== ========

Ratios/supplemental data
Net assets, end of period (000's) ............................ $ 86,617 $118,246 $ 94,340
======== ======== ========

Ratio of expenses to average net assets
Before expense reimbursements and waived fees .............. 1.06 %(b) 1.06 % 1.08 %(b)
After expense reimbursements and waived fees ............... 1.04 %(b) 1.04 % 1.04 %(b)

Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees .............. (0.72)%(b) (0.77)% (0.75)%(b)
After expense reimbursements and waived fees ............... (0.70)%(b) (0.75)% (0.72)%(b)

Portfolio turnover rate ...................................... 49.24 % 105.60 % 126.44 %

Average broker commission per share (c) ...................... $ 0.0588 $ 0.0576 $ 0.0600

See accompanying notes to financial statements (Continued)
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THE CHESAPEAKE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Period)
(Unaudited)

Investor Series A

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
April 7, 1995
(commencement
Period ended Year ended Year ended of oper) to
August 31, February 28, February 28, February 29,
1998 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of period .......................... $ 17.69 $ 16.18 $ 14.42 $ 11.79

Income from investment operations
Net investment income loss ............................ (0.12) (0.21) (0.18) (0.06)
Net realized and unrealized (loss) gain on investments (4.65) 4.19 1.94 2.88
-------- -------- -------- --------

Total from investment operations .................. (4.77) 3.98 1.76 2.82
-------- -------- -------- --------

Distributions to shareholders from
Net investment income ................................. (0.00) 0.00 0.00 (0.11)
Tax return of capital ................................. 0.00 (0.53) 0.00 0.00
Net realized gain from investment transactions ........ 0.00 (1.94) 0.00 (0.08)
-------- -------- -------- --------

Total distributions ............................... (0.00) (2.47) 0.00 (0.19)
-------- -------- -------- --------

Net asset value, end of period ................................ $ 12.92 $ 17.69 $ 16.18 $ 14.42
======== ======== ======== ========

Total return (a) .............................................. (26.95)%(d) 24.80 % 12.21 % 23.86 %(d)
======== ======== ======== ========

Ratios/supplemental data
Net assets, end of period (000's) ........................ $ 24,594 $ 40,924 $ 39,376 $ 32,549
======== ======== ======== ========

Ratio of expenses to average net assets
Before expense reimbursements and waived fees ......... 1.59 %(b) 1.55 % 1.54 % 1.88 %(b)
After expense reimbursements and waived fees .......... 1.57 %(b) 1.52 % 1.53 % 1.71 %(b)

Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ......... (1.26)%(b) (1.27)% (1.16)% (1.20)%(b)
After expense reimbursements and waived fees .......... (1.24)%(b) (1.24)% (1.15)% (1.04)%(b)

Portfolio turnover rate .................................. 49.24 % 105.60 % 126.44 % 99.33 %

Average broker commission per share (c) .................. $ 0.0588 $ 0.0576 $ 0.0600 --

See accompanying notes to financial statements (Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>

THE CHESAPEAKE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Period)
(Unaudited)

Investor Series C

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
April 7, 1995
(commencement
Period ended Year ended Year ended of oper) to
August 31, February 28, February 28, February 29,
1998 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of period .......................... $ 17.12 $ 15.97 $ 14.34 $ 11.79

Income from investment operations
Net investment income loss ............................ (0.29) (0.52) (0.29) (0.12)
Net realized and unrealized (loss) gain on investments (4.43) 4.14 1.92 2.86
-------- -------- -------- --------

Total from investment operations .................. (4.72) 3.62 1.63 2.74
-------- -------- -------- --------

Total distributions ............................... 0.00 (2.47) 0.00 (0.19)
-------- -------- -------- --------

Net asset value, end of period ................................ $ 12.40 $ 17.12 $ 15.97 $ 14.34
======== ======== ======== ========

Total return (a) .............................................. (27.65)%(d) 22.95 % 11.30 % 23.18 %(d)
======== ======== ======== ========

Ratios/supplemental data
Net assets, end of period (000's) ........................ $ 2,594 $ 4,541 $ 9,192 $ 7,908
======== ======== ======== ========

Ratio of expenses to average net assets
Before expense reimbursements and waived fees ......... 3.42 %(b) 3.11 % 2.34 % 2.38 %(b)
After expense reimbursements and waived fees .......... 3.40 %(b) 3.05 % 2.33 % 2.18 %(b)

Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ......... (3.08)%(b) (2.84)% (1.97)% (1.77)%(b)
After expense reimbursements and waived fees .......... (3.06)%(b) (2.78)% (1.96)% (1.57)%(b)

Portfolio turnover rate .................................. 49.24 % 105.60 % 126.44 % 99.33 %

Average broker commission per share (c) .................. $ 0.0588 $ 0.0576 $ 0.0600 --

See accompanying notes to financial statements (Continued)
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>

THE CHESAPEAKE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Period)
(Unaudited)

Investor Series D

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
April 7, 1995
(commencement
Period ended Year ended Year ended of oper) to
August 31, February 28, February 28, February 29,
1998 1998 1997 1996
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of period .......................... $ 17.45 $ 16.09 $ 14.41 $ 11.79

Income from investment operations
Net investment income loss ............................ (0.18) (0.32) (0.29) (0.11)
Net realized and unrealized (loss) gain on investments (4.56) 4.15 1.97 2.92
-------- -------- -------- --------

Total from investment operations .................. (4.74) 3.83 1.68 2.81
-------- -------- -------- --------

Total distributions ............................... (0.00) (2.47) 0.00 (0.19)
-------- -------- -------- --------

Net asset value, end of period ................................ $ 12.71 $ 17.45 $ 16.09 $ 14.41
======== ======== ======== ========

Total return (a) .............................................. (27.15)%(d) 24.06 % 11.59 % 23.77 %(d)
======== ======== ======== ========

Ratios/supplemental data
Net assets, end of period (000's) ........................ $ 7,112 $ 11,448 $ 10,774 $ 11,929
======== ======== ======== ========

Ratio of expenses to average net assets
Before expense reimbursements and waived fees ......... 2.18 %(b) 2.22 % 2.02 % 2.13 %(b)
After expense reimbursements and waived fees .......... 2.16 %(b) 2.18 % 2.01 % 1.73 %(b)

Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees ......... (1.84)%(b) (1.94)% (1.64)% (1.54)%(b)
After expense reimbursements and waived fees .......... (1.82)%(b) (1.89)% (1.63)% (1.14)%(b)

Portfolio turnover rate .................................. 49.24 % 105.60 % 126.44 % 99.33 %

Average broker commission per share (c) .................. $ 0.0588 $ 0.0576 $ 0.0600 --

See accompanying notes to financial statements
</TABLE>
<PAGE>

THE CHESAPEAKE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998
(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION

The Chesapeake Growth Fund (the "Fund"), formerly known as The
Chesapeake Fund prior to November 1, 1997, is a diversified series of
shares of beneficial interest of the Gardner Lewis Investment Trust
(the "Trust"). The Trust, an open-end investment company, was organized
on August 12, 1992 as a Massachusetts Business Trust and is registered
under the Investment Company Act of 1940, (the "Act") as amended. The
Fund began operations on April 6, 1994. The investment objective of the
Fund is to seek capital appreciation through investments in equity
securities of medium and large capitalization companies, consisting
primarily of common and preferred stocks and securities convertible
into common stocks. Pursuant to a plan approved by the Board of
Trustees of the Trust, the existing single class of shares of the Fund
was redesignated as the Institutional Shares of the Fund on February 3,
1995, and three new classes of shares - Series A, Series C and Series D
Investor Shares (the "Investor Shares") were authorized. On April 7,
1995, Series A, Series C and Series D Investor Shares became effective.
The Board of Trustees of the Trust approved on May 2, 1996 a plan to
authorize a new class of shares designated as the Super- Institutional
Shares. On June 12, 1996, the Super-Institutional Shares became
effective. The Institutional Shares and Super-Institutional Shares are
offered to institutional investors without a sales charge and bear no
distribution and service fees. The Investor Shares are offered with a
sales charge (except for Series C Shares) at different levels and bear
distribution fees at different levels.

Each class of shares has equal rights as to assets of the Fund, and the
classes are identical except for differences in their sales charge
structures, ongoing distribution and service fees, and various expenses
that can be attributed to specific class activity. Income, expenses
(other than distribution and service fees, which are attributable to
each class of Investor Shares based upon a set percentage of its net
assets, and other expenses which can be traced to specific class
activity), and realized and unrealized gains or losses on investments
are allocated to each class of shares based upon its relative net
assets. All classes have equal voting privileges since the Trust
shareholders vote in the aggregate, not by fund or class, except where
otherwise required by law or when the Board of Trustees determines that
the matter to be voted on affects only the interests of a particular
fund or class. The following is a summary of significant accounting
policies followed by the Fund.

A. Security Valuation - The Fund's investments in securities are
carried at value. Securities listed on an exchange or quoted on a
national market system are valued at the last quoted sales price
as of 4:00 p.m. New York time on the day of valuation. Other
securities traded in the over-the-counter market and listed
securities for which no sale was reported on that date are valued
at the most recent bid price. Securities for which market
quotations are not readily available, if any, are valued by using
an independent pricing service or by following procedures
approved by the Board of Trustees. Short-term investments are
valued at cost which approximates value.

B. Federal Income Taxes - No provision has been made for federal
income taxes since it is the policy of the Fund to comply with
the provisions of the Internal Revenue Code applicable to
regulated investment companies and to make sufficient
distributions of taxable income to relieve it from all federal
income taxes.

Net investment income (loss) and net realized gains (losses) may
differ for financial statement and income tax purposes primarily
because of losses incurred subsequent to October 31, which are
deferred for income tax purposes. The character of distributions
made during the year from net investment income or net realized
gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed
may differ from the year that the income or realized gains were
recorded by the Fund.

(Continued)
<PAGE>

THE CHESAPEAKE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998
(Unaudited)

C. Investment Transactions - Investment transactions are recorded on
the trade date. Realized gains and losses are determined using
the specific identification cost method. Interest income is
recorded daily on an accrual basis. Dividend income is recorded
on the ex-dividend date.

D. Distributions to Shareholders - The Fund may declare dividends
annually, generally payable on a date selected by the Trust's
Trustees. Distributions to shareholders are recorded on the
ex-dividend date. In addition, distributions may be made annually
in November out of net realized gains through October 31 of that
year. The Fund may make a supplemental distribution subsequent to
the end of its fiscal year.

E. 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
amounts of assets, liabilities, expenses and revenues reported in
the financial statements. Actual results could differ from those
estimates.

NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS

The Fund's administrator, The Nottingham Company, (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator receives a
fee at the annual rate of 0.075% of the average daily net assets for
the Institutional Shares and for Series A, Series C, and Series D
Investor Shares. The Administrator also receives a monthly fee of
$1,750 for the Institutional Shares and for Series A, Series C, and
Series D Investor Shares for accounting and recordkeeping services. The
contract with the Administrator provides that the aggregate fees for
the aforementioned administration, accounting and recordkeeping
services shall not be less than $3,000 per month. The Administrator
receives a fee at the annual rate of 0.015% of average daily net assets
for shareholder administration costs. The Administrator also charges
the Fund for certain expenses involved with the daily valuation of
portfolio securities. The Administrator currently intends to reimburse
expenses of the Super-Institutional Class to limit total
Super-Institutional Class operating expenses to 1.045% of the average
daily net assets of that class. There can be no assurance that the
foregoing voluntary expense reimbursements will continue.

Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any
sales charges imposed on purchases of shares and re-allocates a portion
of such charges to dealers through whom the sale was made, if any. For
the period ended August 31, 1998, the Distributor retained sales
charges in the amount of $1,660.

(Continued)
<PAGE>

THE CHESAPEAKE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998
(Unaudited)

NC Shareholder Services, LLC (the "Transfer Agent") has been retained
by the Administrator to serve as the Fund's transfer, dividend paying,
and shareholder servicing agent. The Transfer Agent maintains the
records of each shareholder's account, answers shareholder inquiries
concerning accounts, processes purchases and redemptions of Fund
shares, acts as dividend and distribution disbursing agent, and
performs other shareholder servicing functions. The Transfer Agent is
compensated for its services by the Administrator and not directly by
the Fund.

Certain Trustees and officers of the Trust are also officers or
directors of the Advisor or the Administrator.

NOTE 3 - DEFERRED ORGANIZATION EXPENSES

Expenses totaling $66,799 incurred in connection with its organization
and the registration of its shares have been assumed by the Fund.

The organization expenses are being amortized over a period of sixty
months. Investors purchasing shares of the Fund bear such expenses only
as they are amortized against the Fund's investment income.

NOTE 4 - DISTRIBUTION AND SERVICE FEES

The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust as defined in the Act, adopted a
distribution plan with respect to all Investor Shares pursuant to Rule
12b-1 of the Act (the "Plan"). Rule 12b-1 regulates the manner in which
a regulated investment company may assume costs of distributing and
promoting the sales of its shares and servicing of its shareholder
accounts.

The Plan provides that the Fund may incur certain costs, which may not
exceed 0.25%, 0.75% and 0.50% per annum of the average daily net assets
of Series A, Series C and Series D Investor Shares, respectively, for
each year elapsed subsequent to adoption of the Plan, for payment to
the Distributor and others for items such as advertising expenses,
selling expenses, commissions, travel or other expenses reasonably
intended to result in sales of Investor Shares of the Fund or support
servicing of shareholder accounts.

The Fund incurred $45,377, $14,581 and $27,343 in distribution and
service fees under the Plan with respect to Series A, Series C and
Series D Investor Shares, respectively, for the period ended August 31,
28, 1998.

NOTE 5 - PURCHASES AND SALES OF INVESTMENTS

Purchases and sales of investments other than short-term investments
aggregated $122,342,872 and $136,482,545 respectively, for the period
ended August 31, 1998.

NOTE 6 - EXPENSE REDUCTIONS

The Advisor has transacted certain portfolio trades with brokers who
paid a portion of the fund's expenses. For the period ended August 31,
1998, the Fund's expenses were reduced by $24,274 under this
arrangement.
<PAGE>

________________________________________________________________________________

THE CHESAPEAKE GROWTH FUND

________________________________________________________________________________

a series of the Gardner Lewis Investment Trust

This Report has been prepared for
shareholders and may be distributed to
others only if preceded or accompanied by
a current prospectus.

<PAGE>

_____________________________________________________

THE CHESAPEAKE FUNDS
_____________________________________________________

October 1, 1998

Dear Shareholder:

The Chesapeake Aggressive Growth Fund closed the third quarter with a
loss of 29.3%. This loss compares to losses of 9.9%, 22.7%, and 20.1% for the
S&P 500, Nasdaq Industrials, and Russell 2000, respectively, and leaves us down
22.5% year-to-date. Negative news revolving around everything from Japanese and
Russian economic turmoil to the White House scandal has heightened investor
nervousness, and in turn, market volatility. As if these problems are not
enough, the bankruptcy of several hedge funds and the well-publicized Fed
orchestrated bailout of Long Term Capital Management have further fueled
anxiety.

Most of the damage to the market was done in August, and the
preponderance to smaller stocks. The Russell 2000 was off over 30% from its
April high as compared to the S&P 500 which was off less than 20% from its high.
We attribute this difference to a lack of trading liquidity in the smallest
names as price insensitive selling ran into buyers reluctant to commit capital
in this volatile tape. At the end of August, almost 20% of the names in the
Russell 2000 were down 60% or more from their highs, almost half were down 40%
or more, and 75% were down more than 25%. Selling was truly universal in smaller
stocks.

<PAGE>

Despite the market's recent correction, larger companies are still
trading at price-earnings multiples that are historically somewhat high, though
some would argue justifiably so, given the interest rate environment. On the
other hand, in the same interest rate environment, smaller companies are trading
at historically low multiples and at unprecedented multiples relative to larger
ones. Our portfolio now trades at 12 times forward earnings that are growing at
over 30%. The S&P 500 now trades at 21 times forward earnings that are growing
at perhaps 6%. We have found price-earnings multiples as low as those now in
smaller stocks in only a handful of modern periods. During the mini-crash of
October 1997, multiples were not this low; during Iraq's invasion of Kuwait,
multiples bottomed at these levels; during the crash of 1987, they bottomed at
these levels; and, through the mid-seventies bear market, they reached levels
lower than these, though with much higher interest rates and inflation.
<PAGE>

Sincerely,

W. Whitfield Gardner John L. Lewis, IV
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Portfolio Spotlight September 30, 1998

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Morningstar Ratings Revisited

So why should these one-star funds be a part of an investment
portfolio? Two reasons: future performance and risk diversification.

_______________________________________________________

THE CHESAPEAKE AGGRESSIVE GROWTH FUND
_______________________________________________________

September 30, 1998

Investment Strategy
- --------------------------------------------------------------------------------
The Chesapeake Aggressive Growth Fund seeks capital appreciation primarily
through investments in small and medium growth equities. The cornerstone of the
fund's intensive in-house fundamental analysis is constant contact with the
management, customers, competitors, and suppliers of both current and potential
investments.

Investment Guidelines
- --------------------------------------------------------------------------------
The Fund seeks companies that:

* are experiencing a rapid growth rate - companies in our portfolio are
forecasted to grow their profits in excess of 20% annually:

* are selling at a stock price not yet fully reflective of their growth rate:

* are undergoing a positive change created by new products, managements,
distribution strategies or manufacturing technologies:

* have a strong balance sheet and are less susceptible to macroeconomic change.

The Largest Industry Groups [Represented by a Pie Chart in mailings]
- --------------------------------------------------------------------------------
Computer Software - 10.3%
Healthcare Delivery - 9.2%
Retail Sales & Distribution - 9.0%
Business Services - 6.9%
Financial Services - 6.2%
Apparel - 5.7%
Telecommunications - 5.6%
Food & Restaurants - 5.3%
Transportation - 4.9%
Medical Products - 4.8%
All Others - 32.3%

Ten Largest Holdings
- ----------------------------------------
1. Jones Apparel Group, Inc. 4.4%
2. CalEnergy 3.1%
3. Biomet, Inc. 3.1%
4. Waste Management, inc. 2.8%
5. BMC Software, Inc. 2.7%
6. Access Health, Inc. 2.3%
7. Federal-Mogul Corp. 2.2%
8. EMC Corporation 2.2%
9. Converse Technology, Inc. 2.0%
10. Ceridian Corporation 2.0%

Portfolio Characteristics
- ---------------------------------------
Overall Assets ($MM) 352
Number of Companies 92
5 Yr. Historical Earnings Growth 30%
Earnings Growth - net year 31%
P/E Ratio - next year 12
(Gardner Lewis earnings estimates)

Performance Summary
- ----------------------------------------------------------------

- ----------------------------------------------------------------
Period Ended Since
9/30/98 1 Year 3 Year 5 Year Inception
- ----------------------------------------------------------------
The Chesapeake
Aggressive -36.2% -5.7% 7.8% 10.6%
Growth Fund
- ----------------------------------------------------------------

Fund performance is net of the maximum 3% sales load. The inception date of the
Fund was January 4, 1993. The performance quoted represents past performance and
is not a guarantee of future results. Share price and investment return will
vary, so you may have a gain or loss when you sell shares.

Must be accompanied or proceeded by a prospectus.
Capital Investment Group, Inc., Distributor
Raleigh, NC (800)525-3863
<PAGE>
<TABLE>
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_______________________________________________

THE CHESAPEAKE AGGRESSIVE GROWTH FUND
_______________________________________________

PORTFOLIO OF INVESTMENTS
(unaudited)
September 30, 1998

================================================== =================================================
Quantity Security Market Value Quantity Security Market Value
================================================== =================================================
212,100 Access Health, Inc. 7,821,188 107,800 InaCom Corp. 2,034,725
117,000 Airborne Freight Corp. 2,025,563 170,400 Integrated Health Service 2,864,850
70,000 Alliant Techsystems, Inc. 4,637,500 269,200 JDA Software Group, Inc, 3,718,325
94,000 American Buildings Corp. 2,209,000 129,800 JLG Industries 2,052,463
155,500 American Capital Strategies 2,517,156 662,700 Jones Apparel Group, Inc. 15,200,681
133,200 American Power Conversion 5,019,975 151,800 Jones Pharma Inc. 4,364,250
264,500 Americredit Corp. 6,447,188 132,600 King World Productions 3,464,175
405,400 Amkor Technology Inc. 1,976,325 230,200 Learning Company, Inc. 4,560,838
180,200 Anixter International, Inc. 2,804,363 64,600 Medical Manager Corp. 1,477,725
271,100 Apple South, Inc. 3,015,988 92,800 Metamor Worldwide, Inc. 2,552,000
169,300 BE Aerospace, Inc. 3,724,600 142,600 Michaels Stores, Inc. 3,636,300
152,400 BMC Software, Inc. 9,153,525 197,400 Novacare, Inc. 579,863
75,700 Barnes & Noble, Inc. 2,043,900 65,800 Outback Steakhouse, Inc. 1,735,475
99,200 Biomatrix, Inc. 3,868,800 342,400 PSS World Medical, Inc. 6,334,400
304,500 Biomet, Inc. 10,562,344 271,300 Personnel Group America,Inc.3,340,381
233,100 Borders Group, Inc. 5,186,475 268,400 Petrol Geo Service ADR 4,277,625
234,300 Building One Services Corp. 2,899,463 98,000 Quadramed Inc. 1,972,250
172,300 CKE Restaurants 5,125,925 276,800 Rainforest Cafe, Inc. 1,851,100
27,100 CMAC Investment Corp. 1,178,850 147,900 Renal Care Group, Inc. 3,789,938
207,450 Cable Design Technologies 2,644,988 181,400 Richfood Holdings, Inc. 2,789,025
183,300 Cadence Design Systems 4,685,606 224,900 Roberts Pharmaceutical 4,301,213
403,200 CalEnergy 10,684,800 175,300 SCI Systems, Inc. 4,722,144
318,800 Cash America International 3,546,650 178,500 SDL, Inc. 2,231,250
350,300 CellStar Corp. 1,510,669 82,900 SEI Investments Company 5,761,550
157,800 Central Garden & Pet Co. 2,919,300 207,500 SLI, Inc. 3,203,281
119,700 Ceridian Corporation 6,867,788 213,000 Saks, Inc. 4,779,188
497,400 Checkfree Holdings Corp. 4,911,825 319,900 Sirrom Capital Corp. 1,239,613
209,187 Comair Holdings, Inc. 6,014,126 191,900 Smart Modular Tech. 3,945,944
172,040 Comverse Technology, Inc. 7,032,135 62,100 Splash Tech. Holding Inc. 884,925
167,400 Cotelligent Group, Inc. 2,939,963 173,700 Stage Stores, Inc. 2,116,969
179,800 DSP Communications, Inc. 1,483,350 137,600 Sterling Commerce, Inc. 4,764,400
157,500 Dan River, Inc. 1,732,500 118,800 Sunrise Assisted Living 4,076,325
206,700 E C I Telecom, Ltd. 5,064,150 280,800 Sunterra Corp. 1,825,200
129,300 EMC Corporation 7,418,588 914,850 Systems Software Assoc.,Inc.4,631,428
128,500 Elder-Beerman Stores Corp. 2,232,688 172,200 Terex Corp. 2,572,238
288,975 Encore Wire Corp. 2,673,019 85,500 Trans World Music 1,560,375
205,400 Fairfield Communities 2,054,000 103,100 TriQuint Semiconductor 1,585,163
159,000 Federal-Mogul Corp. 7,433,250 299,900 Tricom, ADS 1,836,888
152,700 FirstPlus Financial Group,Inc.1,794,225 162,600 Trigon Healthcare, Inc. 5,040,600
35,000 Flextronics International 1,240,313 152,000 Tristar Aerospace Co. 1,463,000
220,500 Genesis Health Ventures 2,701,125 91,000 Triumph Group, Inc. 2,707,250
117,500 Gulfstream Aerospace Corp. 4,729,375 99,500 U.S.Foodservice 4,141,688
46,000 Healthcare Financial Partners 1,932,000 94,400 Wang Laboratories, Inc. 1,829,000
143,500 Hollywood Entertainment Corp. 1,955,188 132,300 Warnaco Group, Inc. 3,059,438
36,700 ICON plc 1,197,338 203,900 Waste Management, Inc. 9,799,944
75,400 IMS Health Inc. 4,670,088 85,500 Wet Seal, Inc. 1,480,219

TOTAL EQUITY 344,442,783

CASH EQUIVALENT 7,782,638

TOTAL ASSETS 352,225,421
</TABLE>
<PAGE>

________________________________________________________________________________

THE CHESAPEAKE AGGRESSIVE
GROWTH FUND

________________________________________________________________________________

a series of the Gardner Lewis Investment Trust

Annual Report 1998

FOR THE PERIOD ENDED AUGUST 31

INVESTMENT ADVISOR
Gardner Lewis Asset Management
285 Wilmington-West Chester Pike
Chadds Ford, Pennsylvania 19317

THE CHESAPEAKE AGGRESSIVE GROWTH FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-800-430-3863

<PAGE>

THE CHESAPEAKE AGGRESSIVE GROWTH FUND

Performance Update - $25,000 Investment

For the period from January 4, 1993
(commencement of operations) to August 31, 1998

The Chesapeake NASDAQ S&P 500 Total
Aggressive Growth Fund Industrial Index Return Index

1/4/93 24,250 25,000 25,000
2/28/93 24,066 24,231 25,562
5/31/93 26,474 25,487 26,006
8/31/93 28,765 26,299 27,113
11/30/93 30,203 27,207 27,200
2/28/94 35,797 29,006 27,692
5/31/94 32,132 25,932 27,265
8/31/94 33,489 26,804 28,596
11/30/94 34,520 26,291 27,485
2/28/95 36,044 27,028 29,731
5/31/95 40,252 28,814 32,769
8/31/95 51,058 33,547 34,730
11/30/95 48,684 33,945 37,649
2/29/96 46,152 35,224 40,048
5/31/96 51,084 41,492 42,088
8/31/96 44,517 36,875 41,234
11/30/96 49,643 39,196 48,008
2/28/97 50,735 38,562 50,526
5/31/97 54,207 39,944 54,468
8/31/97 62,831 45,251 57,995
11/30/97 60,932 44,105 61,865
2/28/98 64,010 46,280 68,212
5/31/98 62,182 47,037 71,182
8/31/98 42,652 34,279 62,689

This graph depicts the performance of The Chesapeake Aggressive Growth Fund
versus the NASDAQ Industrials Index and the S&P 500 Total Return Index. It is
important to note that The Chesapeake Aggressive Growth Fund is a professionally
managed mutual fund while the indices are not available for investment and are
unmanaged. The comparison is shown for illustrative purposes only.

Average Annual Total Return

- -----------------------------------------------------------------------
Since Inception One Year Five Years
- -----------------------------------------------------------------------
No Sales Load 10.50% (32.12)% 8.19%
- -----------------------------------------------------------------------
With 3% Sales Load 9.90% (34.15)% 7.54%
- -----------------------------------------------------------------------

The graph assumes an initial $25,000 investment at January 4, 1993 ($24,250
after maximum sales load of 3%). All dividends and distributions are reinvested.

At August 31, 1998, the Fund would have grown to $42,652 - total investment
return of 70.61% since January 4, 1993. Without the deduction of the 3% maximum
sales load, the Fund would have grown to $43,971 - total investment return of
75.89% since January 4, 1993. The sales load may be reduced or eliminated for
larger purchases.

At August 31, 1998, a similar investment in the NASDAQ Industrials Index would
have grown to $34,279 - total investment return of 37.12% since January 4, 1993;
while a similar investment in the S&P 500 Total Return Index would have grown to
$62,689 - total investment return of 150.76% since January 4, 1993.

Past performance is not a guarantee of future results. A mutual fund's share
price and investment return will vary with market conditions, and the principal
value of shares, when redeemed, may be worth more or less than the original
cost. Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments assuming
reinvestment of dividends.

THE CHESAPEAKE AGGRESSIVE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998

COMMON STOCKS - 96.00%

Aerospace & Defense - 4.83%
Alliant Techsystems Inc. ........................................... 80,000 $ 5,250,000
BE Aerospace, Inc. ................................................. 182,100 3,789,956
(a) Gulfstream Aerospace Corporation ................................... 117,500 4,127,188
(a) TriStar Aerospace Co. .............................................. 167,000 1,398,625
(a) Triumph Group, Inc. ................................................ 101,000 3,282,500
------------
17,848,269
------------
Apparel Manufacturing - 5.49%
(a) Jones Apparel Group, Inc. .......................................... 656,300 12,797,850
(a) Littlefield, Adams & Company ....................................... 4,663 17,486
Liz Claiborne, Inc. ................................................ 67,800 1,932,300
The Warnaco Group, Inc. ............................................ 204,100 5,561,725
------------
20,309,361
------------
Auto Parts - Original Equipment - 2.29%
Federal-Mogul Corporation .......................................... 159,000 8,486,625
------------

Commercial Services - 3.89%
(a) Ceridian Corporation ............................................... 119,700 5,805,450
(a) Consolidated Capital Corporation ................................... 263,400 3,391,275
(a) Sterling Commerce, Inc. ............................................ 156,800 5,174,400
------------
14,371,125
------------
Computers - 2.45%
(a) EMC Corporation .................................................... 129,300 5,802,338
(a) Splash Technology Holdings, Inc. ................................... 217,100 3,256,500
------------
9,058,838
------------
Computer Software & Services - 10.40%
(a) BMC Software, Inc. ................................................. 151,000 6,389,187
(a) Cadence Design Systems, Inc. ....................................... 181,600 3,836,300
(a) CheckFree Holdings Corporation ..................................... 246,800 2,113,225
(a) Cotelligent Group, Inc. ............................................ 177,400 2,017,925
(a) Hyperion Solutions Corporation ..................................... 67,200 1,881,600
(a) IMS Health Incorporated ............................................ 75,400 4,147,000
(a) JDA Software Group, Inc. ........................................... 286,600 3,439,200
(a) Mentor Graphics Corporation ........................................ 270,500 1,876,594
(a) QuadraMed Corporation .............................................. 108,300 2,572,125
(a) System Software Associates, Inc. ................................... 675,850 3,041,325
(a) The Learning Company, Inc. ......................................... 276,500 4,890,594
(a) Wang Laboratories, Inc. ............................................ 116,200 2,265,900
------------
38,470,975
------------

(Continued)
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998

COMMON STOCKS - (Continued)

Electrical Equipment - 1.76%
(a) Encore Wire Corporation ............................................ 318,975 $ 3,349,238
(a) SLI, Inc. .......................................................... 230,500 3,169,375
------------
6,518,613
------------
Electronics - 2.12%
(a) American Power Conversion Corp. .................................... 133,200 3,596,400
(a) California Micro Devices Corporation ............................... 23,806 46,124
(a) SCI Systems, Inc. .................................................. 183,100 4,199,856
------------
7,842,380
------------
Electronics - Semiconductor - 3.75%
(a) Adaptec, Inc. ...................................................... 292,200 3,360,300
(a) Amkor Technology, Inc. ............................................. 485,400 2,244,975
(a) Novellus Systems, Inc. ............................................. 85,700 2,281,762
(a) SDL, Inc. .......................................................... 236,400 4,018,800
(a) TriQuint Semiconductor, Inc. ....................................... 127,800 1,948,950
------------
13,854,787
------------
Engineering & Construction - 0.69%
(a) American Buildings Company ......................................... 94,000 2,538,000
------------

Environmental Control - 2.43%
(a) Waste Management, Inc. ............................................. 203,900 8,997,088
------------

Financial - Consumer Credit - 2.84%
(a) AmeriCredit Corp. .................................................. 281,700 7,024,894
(a) FIRSTPLUS Financial Group, Inc. .................................... 152,700 3,464,381
------------
10,489,275
------------
Financial Services - 2.76%
American Capital Strategies, Ltd. .................................. 185,500 2,202,813
CMAC Investment Corporation ........................................ 27,100 1,043,350
SEI Investments Company ............................................ 82,900 5,160,525
Sirrom Capital Corporation ......................................... 319,900 1,779,444
------------
10,186,132
------------
Food - Wholesale - 1.60%
Richfood Holdings, Inc. ............................................ 287,500 5,911,719
------------

Foreign - 2.83%
ECI Telecommunications Limited ..................................... 205,100 5,640,250
(a) ICON plc - ADR ..................................................... 36,700 977,137
Petroleum GeoServices - ADR ........................................ 295,100 3,836,300
------------
10,453,687
------------

(Continued)
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998

COMMON STOCKS - (Continued)

Human Resources - 1.52%
(a) Metamor Worldwide, Inc. ............................................ 92,800 $ 2,204,000
(a) Personnel Group of America, Inc. ................................... 301,300 3,408,456
------------
5,612,456
------------
Lodging - 1.62%
(a) Fairfield Communities, Inc. ........................................ 293,600 2,862,600
(a) Sunterra Corporation ............................................... 340,800 3,131,100
------------
5,993,700
------------
Machine - Construction & Mining - 1.75%
JLG Industries, Inc. ............................................... 234,000 3,436,875
(a) Terex Corporation .................................................. 193,400 3,046,050
------------
6,482,925
------------
Medical Supplies - 2.21%
Biomet, Inc. ....................................................... 304,500 8,183,437
------------

Medical - Hospital Management & Service - 7.67%
(a) Access Health, Inc. ................................................ 232,100 5,555,894
(a) Genesis Health Ventures, Inc. ...................................... 247,200 2,935,500
(a) HEALTHSOUTH Corporation ............................................ 204,100 3,865,144
Integrated Health Services, Inc. ................................... 201,700 3,895,331
(a) Mariner Post-Acute Network, Inc. ................................... 167,900 1,196,287
(a) PSS World Medical, Inc. ............................................ 382,400 5,879,400
(a) Trigon Healthcare, Inc. ............................................ 182,600 5,044,325
------------
28,371,881
------------
Miscellaneous - Manufacturing - 0.00%
(a) Wilshire Technologies,Warrants, expires 11/28/2002 ................. 11,956 0
------------

Oil & Gas - 0.51%
(a) Friede Goldman International Inc. .................................. 179,800 1,876,662
------------

Pharmaceuticals - 3.17%
(a) Barr Laboratories, Inc. ............................................ 138,500 3,549,062
Jones Pharma Incorporated .......................................... 206,500 4,310,688
(a) Roberts Pharmaceutical Corporation ................................. 224,900 3,851,412
------------
11,711,162
------------
Real Estate Investment Trust - 0.25%
CarrAmerica Realty Corporation ..................................... 41,000 922,500
------------

(Continued)
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998

COMMON STOCKS - (Continued)

Restaurants & Food Service - 3.80%
Apple South, Inc. .................................................. 331,100 $ 3,807,650
CKE Restaurants, Inc. .............................................. 172,300 5,341,300
(a) Outback Steakhouse, Inc. ........................................... 70,900 2,131,431
(a) Rainforest Cafe, Inc. .............................................. 336,800 2,778,600
------------
14,058,981
------------
Retail - Apparel - 1.84%
(a) Stage Stores, Inc. ................................................. 213,700 2,230,494
(a) The Wet Seal, Inc. ................................................. 198,500 4,565,500
------------
6,795,994
------------
Retail - Department Stores - 2.73%
(a) Consolidated Stores Corporation .................................... 148,684 4,683,546
(a) Proffitt's, Inc. ................................................... 213,000 5,431,500
------------
10,115,046
------------
Retail - Specialty Line - 4.67%
(a) Barnes & Noble ..................................................... 58,600 1,582,200
(a) Borders Group, Inc. ................................................ 233,100 4,414,331
Cash America International, Inc. ................................... 348,800 4,229,200
(a) Genesis Direct, Inc. ............................................... 70,000 201,250
(a) Michaels Stores, Inc. .............................................. 157,600 3,703,600
(a) The Elder-Beerman Stores Corp. ..................................... 128,500 2,007,813
(a) Trans World Entertainment Corporation .............................. 67,000 1,139,000
------------
17,277,394
------------
Telecommunications - 2.06%
(a) DSP Communications, Inc. ........................................... 199,800 2,285,213
(a) Scandinavian Broadcasting System SA ................................ 140,200 3,119,450
(a) TRICOM, S.A ........................................................ 332,600 2,224,262
------------
7,628,925
------------
Telecommunications Equipment - 2.65%
(a) Cable Design Technologies .......................................... 227,450 3,198,516
(a) Comverse Technology, Inc. .......................................... 172,040 6,623,540
------------
9,822,056
------------
Textiles - 0.70%
(a) Dan River Inc. ..................................................... 197,500 2,579,844
------------

Transportation - Air - 2.06%
Airborne Freight Corporation ....................................... 117,000 2,281,500
COMAIR Holdings, Inc. .............................................. 209,187 5,321,194
------------
7,602,694
------------
Utilities - Electric - 3.27%
(a) CalEnergy Company, Inc. ............................................ 475,300 12,090,444
------------

(Continued)
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998

COMMON STOCKS - (Continued)

Wholesale & Distribution - Specialty Line - 3.39%
(a) Anixter International Inc. ......................................... 220,200 $ 3,578,250
(a) CellStar Corporation ............................................... 511,400 3,388,025
(a) Central Garden and Pet Company ..................................... 192,800 2,723,300
(a) Inacom Corporation ................................................. 147,800 2,854,388
------------
12,543,963
------------

Total Common Stocks (Cost $406,616,508) ............................ 355,006,938
------------

INVESTMENT COMPANY - 5.21%

Evergreen Money Market Treasury Institutional Money ..................... 19,279,931 19,279,931
Market Fund Institutional Service Shares ------------
(Cost $19,279,931)

Total Value of Investments (Cost $425,896,439 (b)) .......................................... 101.21 % $374,286,869
Liabilities In Excess of Other Assets ....................................................... (1.21)% (4,483,277)
------ ------------
Net Assets ........................................................................... 100.00 % $369,803,592
====== ============

(a) Non-income producing investment.

(b) Aggregate cost for federal income tax purposes is $426,055,432.
Unrealized appreciation (depreciation) of investments for federal
income tax purposes is as follows:

Unrealized appreciation $ 46,833,695
Unrealized depreciation (98,602,258)
------------

Net unrealized depreciation $(51,768,563)
============

The following acronym is used throughout this portfolio:

ADR - American Depository Receipt

See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

August 31, 1998

ASSETS
Investments, at value (cost $425,896,439) ..................................................... $374,286,869
Income receivable ............................................................................. 241,569
Receivable for investments sold ............................................................... 2,940,312
Receivable for fund shares sold ............................................................... 8,423
Other assets .................................................................................. 16,823
------------

Total assets ............................................................................. 377,493,996
------------

LIABILITIES
Accrued expenses .............................................................................. 38,299
Payable for investment purchases .............................................................. 7,611,805
Disbursements in excess of cash on demand deposit ............................................. 40,300
------------

Total liabilities ........................................................................ 7,690,404
------------

NET ASSETS
(applicable to 27,795,867 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ....................................... $369,803,592
============

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($369,803,592 / 27,795,867 shares) ............................................................ $ 13.30
============

OFFERING PRICE PER SHARE
(100 / 97% of $13.30) ......................................................................... $ 13.71
============

NET ASSETS CONSIST OF
Paid-in capital ............................................................................... $394,754,659
Undistributed net realized gain on investments ................................................ 26,658,503
Net unrealized depreciation on investments .................................................... (51,609,570)
------------
$369,803,592
============

See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

STATEMENT OF OPERATIONS

Year ended August 31, 1998

INVESTMENT LOSS

Income
Dividends .................................................................................. $ 1,435,506
--------------

Expenses
Investment advisory fees (note 2) .......................................................... 7,337,649
Fund administration fees (note 2) .......................................................... 535,138
Custody fees ............................................................................... 26,420
Registration and filing administration fees (note 2) ....................................... 6,862
Fund accounting fees (note 2) .............................................................. 21,000
Audit fees ................................................................................. 13,650
Legal fees ................................................................................. 6,073
Securities pricing fees .................................................................... 6,115
Shareholder recordkeeping fees ............................................................. 13,893
Shareholder administrative fees (note 2) ................................................... 50,000
Shareholder servicing expenses ............................................................. 79,033
Registration and filing expenses ........................................................... 14,215
Printing expenses .......................................................................... 29,598
Amortization of deferred organization expenses ............................................. 3,446
Trustee fees and meeting expenses .......................................................... 6,990
Other operating expenses ................................................................... 44,363
--------------

Total expenses ........................................................................ 8,194,445
--------------

Net investment loss ............................................................. (6,758,939)
--------------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS

Net realized gain from investment transactions .................................................. 38,364,114
Decrease in unrealized appreciation on investments .............................................. (211,160,640)
--------------

Net realized and unrealized loss on investments ............................................ (172,796,526)
--------------

Net decrease in net assets resulting from operations .................................. $ (179,555,465)
==============

See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS

- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Year ended
August 31, August 31,
1998 1997
- ------------------------------------------------------------------------------------------------------------------------------------

(DECREASE) INCREASE IN NET ASSETS

Operations
Net investment loss .................................................... $ (6,758,939) $ (6,082,087)
Net realized gain from investment transactions ......................... 38,364,114 72,981,586
(Decrease) increase in unrealized appreciation on investments .......... (211,160,640) 114,457,604
------------ ------------

Net (decrease) increase in net assets resulting from operations ... (179,555,465) 181,357,103
------------ ------------

Distributions to shareholders from
Net realized gain from investment transactions ......................... (78,304,241) (28,932,671)
------------ ------------

Capital share transactions
Increase in net assets resulting from capital share transactions (a) ... 14,174,396 756,974
------------ ------------

Total (decrease) increase in net assets ...................... (243,685,310) 153,181,406

NET ASSETS

Beginning of year .......................................................... 613,488,902 460,307,496
------------ ------------

End of year ................................................................ $369,803,592 $613,488,902
============ ============

(a) A summary of capital share activity follows:
-------------------------------------------------------------------------------
Year ended Year ended
August 31, 1998 August 31, 1997

Shares Value Shares Value
-------------------------------------------------------------------------------

Shares sold .................................. 2,928,296 $ 59,641,139 3,447,946 $ 64,609,895
Shares issued for reinvestment
of distributions ........................ 3,755,172 74,389,963 1,565,933 26,934,053
------------ ------------ ------------ ------------

6,683,468 134,031,102 5,013,879 91,543,948

Shares redeemed .............................. (6,228,186) (119,856,706) (4,938,898) (90,786,974)
------------ ------------ ------------ ------------

Net increase ............................ 455,282 $ 14,174,396 74,981 $ 756,974
============ ============ ============ ============

See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE AGGRESSIVE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Year)

- ------------------------------------------------------------------------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
August 31, August 31, August 31, August 31, August 31,
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of year ...................... $ 22.44 $ 16.88 $ 20.70 $ 13.58 $ 11.86

Income (loss) from investment operations
Net investment loss .......................... (0.24) (0.22) (0.18) (0.15) (0.05)
Net realized and unrealized gain (loss) on
investments (6.02) 6.84 (2.53) 7.27 1.98
------------ ------------ ------------ ------------ ------------

Total from investment operations ......... (6.26) 6.62 (2.71) 7.12 1.93
------------ ------------ ------------ ------------ ------------

Distributions to shareholders from
Net investment income ........................ (0.00) 0.00 0.00 0.00 (0.16)
Net realized gain from investment transactions (2.88) (1.06) (1.11) 0.00 (0.05)
------------ ------------ ------------ ------------ ------------

Total distributions ...................... (2.88) (1.06) (1.11) 0.00 (0.21)
------------ ------------ ------------ ------------ ------------

Net asset value, end of year ............................ $ 13.30 $ 22.44 $ 16.88 $ 20.70 $ 13.58
============ ============ ============ ============ ============

Total return (a) ........................................ (32.12)% 41.14 % (12.81)% 52.45 % 16.42 %
============ ============ ============ ============ ============

Ratios/supplemental data

Net assets, end of year ........................... $369,803,592 $613,488,902 $460,307,496 $460,286,044 $179,222,758
============ ============ ============ ============ ============

Ratio of expenses to average net assets
Before expense reimbursements and waived fees 1.40 % 1.42 % 1.42 % 1.43 % 1.57 %
After expense reimbursements and waived fees 1.40 % 1.42 % 1.42 % 1.43 % 1.49 %

Ratio of net investment income (loss) to average net assets
Before expense reimbursements and waived fees (1.15)% (1.17)% (1.05)% (1.07)% (0.87)%
After expense reimbursements and waived fees (1.15)% (1.17)% (1.05)% (1.07)% (0.79)%

Portfolio turnover rate 86.18 % 115.51 % 110.04 % 75.42 % 66.03 %

Average brokerage commissions per share (b) $ 0.0580 $ 0.0568 -- -- --

(a) Total return does not reflect payment of a sales charge.
(b) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.

See accompanying notes to financial statements
</TABLE>
<PAGE>

THE CHESAPEAKE AGGRESSIVE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION

The Chesapeake Aggressive Growth Fund (the "Fund"), formerly known as
The Chesapeake Growth Fund prior to November 1, 1997, is a diversified
series of shares of beneficial interest of the Gardner Lewis Investment
Trust (the "Trust"). The Trust is an open-end investment company which
was organized in 1992 as a Massachusetts Business Trust and is
registered under the Investment Company Act of 1940, (the "Act") as
amended. The Fund began operations on January 4, 1993. The investment
objective of the Fund is to seek capital appreciation through
investments in equity securities, consisting primarily of common and
preferred stocks and securities convertible into common stocks. The
following is a summary of significant accounting policies followed by
the Fund:

A. Security Valuation - The Fund's investments in securities are
carried at value. Securities listed on an exchange or quoted on a
national market system are valued at the last sales price as of
4:00 p.m. New York time. Other securities traded in the
over-the-counter market and listed securities for which no sale
was reported on that date are valued at the most recent bid
price. Securities for which market quotations are not readily
available, if any, are valued by using an independent pricing
service or by following procedures approved by the Board of
Trustees. Investment companies are valued at net asset value.
Short-term investments are valued at cost which approximates
value.

As a result of the Fund's operating net investment loss, a
reclassification adjustment of $6,758,939 has been made on the
statement of assets and liabilities to decrease accumulated net
investment loss, bringing it to zero, and decrease paid-in
capital.

D. Distributions to Shareholders - The Fund may declare dividends
annually, payable on a date selected by the Trust's Trustees.
Distributions to shareholders are recorded on the ex-dividend
date. In addition, distributions may be made annually in November
out of net realized gains through October 31 of that year. The
Fund may make a supplemental distribution subsequent to the end
of its fiscal year ending August 31.

(Continued)
<PAGE>

THE CHESAPEAKE AGGRESSIVE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998

NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS

The Fund's administrator, The Nottingham Company, (the
"Administrator"), provides administrative services to and is generally
responsible for the overall management and day-to-day operations of the
Fund pursuant to an accounting and administrative agreement with the
Trust. As compensation for its services, the Administrator received a
fee at the annual rate of 0.20% of the Fund's first $25 million of
average daily net assets, 0.15% of the next $25 million, and 0.10% of
average daily net assets over $50 million for the period September 1,
1997 to December 31, 1997. Beginning January 1, 1998, the Administrator
receives a fee at the annual rate of 0.20% of the Fund's first $25
million of average daily net assets, 0.15% of the next $25 million, and
0.075% of average daily net assets over $50 million. The Administrator
also receives a monthly fee of $1,750 for accounting and recordkeeping
services. The Administrator also charges for certain expenses involved
with the daily valuation of portfolio securities.

Capital Investment Group, Inc. (the "Distributor") serves as the Fund's
principal underwriter and distributor. The Distributor receives any
sales charges imposed on purchases of shares and re-allocates a portion
of such charges to dealers through whom the sale was made, if any. For
the year ended August 31, 1998, the Distributor retained sales charges
in the amount of $1,770.

Certain Trustees and officers of the Trust are also officers of the
Advisor or the Administrator.

NOTE 3 - PURCHASES AND SALES OF INVESTMENTS

Purchases and sales of investments other than short-term investments
aggregated $490,382,786 and $561,492,464, respectively, for the year
ended August 31, 1998.
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Trustees of Gardner Lewis Investment Trust and Shareholders of
The Chesapeake Aggressive Growth Fund:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The Chesapeake Aggressive Growth Fund (a
portfolio of Gardner Lewis Investment Trust), as of August 31, 1998, and the
related statement of operations for the year then ended, the statements of
changes in net assets for the years ended August 31, 1998 and 1997, and
financial highlights for the years then ended. 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 audit 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. Our
procedures included confirmation of the securities owned as of August 31, 1998
by correspondence with the custodian and brokers; where replies were not
received, we performed other auditing procedures. 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 audit provides a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The Chesapeake
Aggressive Growth Fund as of August 31, 1998, the results of its operations, the
changes in its net assets and its financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.

Deloitte & Touche LLP

Pittsburgh, Pennsylvania
September 18, 1998
<PAGE>

________________________________________________________________________________

THE CHESAPEAKE AGGRESSIVE
GROWTH FUND

________________________________________________________________________________

a series of the Gardner Lewis Investment Trust

This Report has been prepared for
shareholders and may be distributed to
others only if preceded or accompanied by
a current prospectus.

<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

October 1, 1998

Dear Shareholder:

The Chesapeake Core Growth Fund closes the third quarter with a loss of
12.2%. This loss compares to losses of 9.9%, 22.7%, and 20.1% for the S&P 500,
Nasdaq Industrials and Russell 2000, respectively, and leaves us up 1.0%
year-to-date. Negative news revolving around everything from Japanese and
Russian economic turmoil to the White House scandal has heightened investor
nervousness, and in turn, market volatility. As if these problems are not
enough, the bankruptcy of several hedge funds and the well-publicized Fed
orchestrated bailout of Long Term Capital Management have further fueled
anxiety.

Most of the damage to the market was done in August, and the
preponderance to smaller stocks. The Russell 2000 was off over 30% from its
April high as compared to the S&P 500 which was off less than 20% from its high.
Macroeconomic concerns acted as fuel for this sell-off as investors attempted to
project implications of an uncertain global economic environment against a
benign domestic environment. Interest rates are low and falling, and inflation
remains dormant with commodity prices hitting new lows. Balanced against this
are the possible implications of global weakness to U.S. corporate profits.
Nervousness about what might happen has driven investors' decisions over the
past weeks more than any measurable or real change in the macroeconomic state.
Problems in Russia illustrate this important distinction. Though virtually
insignificant as a part of the global economy, with trade representing less than
1% of U.S. gross domestic product, Russian turmoil provided an emotional
catalyst that sparked a change in investor psychology. Problems in Asia have far
more fundamental weight, and perhaps it was a lack of positive change in that
region that heightened investor nervousness. The point is that current
nervousness is about what could happen, not what did happen in the business
environment.

Since the beginning of August, we have logged more than 1500 contacts
with our investment companies, their customers, competitors and suppliers in an
effort to quantify true business prospects, rather than conjectured ones.
Further, we have been diligent in our attempts to quantify risks associated with
the most negative of global macroeconomic scenarios as they relate to our
investment companies. Our companies are less globally oriented, more proprietary
in their businesses, and have earnings that are far less sensitive to
macroeconomic change than the typical larger company. In the universe of giant
multinationals, selling has been based on the reasonable concern that future
corporate profits may not be able to justify current valuations.
Beyond that narrow universe, selling has been less fundamentally based.

We believe a number of developments can turn current market sentiment.
From a macroeconomic perspective they are a credible reform package for Japan, a
clear direction for the resolution of the White House scandal, the abatement of
tax related selling, and to a lesser degree further action on the part of the
Federal Reserve. From a microeconomic perspective, it is company earnings. What
is important here is not a complete resolution to these issues, but a belief on
the part of investors that things will begin to improve.

<PAGE>

From our perspective, the macroeconomic issues are being addressed,
with the Japanese situation being the most tenuous. Thus, we believe that
earnings should finally begin to command an increasingly larger portion of
investor attention. In fact, this may already be happening. With recent
pre-announcements by some of this market's seemingly bulletproof multinationals,
like Coca-Cola, Gillette, and Disney, we have seen commensurate compression in
their stock prices. This makes fundamental sense, because it is these companies
that rely heavily on foreign sales or traffic for their continued growth.

Why these price corrections did not take place sooner is probably more
related to psychology than anything else. Last winter, as market volatility
increased over Asian economic concerns, investors sought safe-haven in the
largest of household names; but, now that the effects of Asia and the other
economies it has contaminated are being felt, investors are in a position to see
its actual impact and can therefore adjust their portfolios accordingly. This is
why we long ago concluded that earnings and valuation are critical and why they
should once again assume their role of historic importance. We continue to find
dynamic companies within the S&P 500 universe where valuations are reasonable
and growth rates strong. The Core Growth portfolio of large companies currently
trades at 18 times forward earnings that are growing at 24%. The S&P 500 now
trades at 21 times forward earnings that are growing at perhaps 6%.

Sincerely,

W. Whitfield Gardner John L. Lewis, IV
<PAGE>

__________________________________________________

THE CHESAPEAKE FUNDS
__________________________________________________

Portfolio Spotlight September 30, 1998

____________________________________________

THE CHESAPEAKE CORE GROWTH FUND
____________________________________________

September 30, 1998

Investment Strategy
- --------------------------------------------------------------------------------
The Chesapeake Core Growth Fund seeks capital appreciation through investments
in large capitalization growth equities. The cornerstone of the fund's intensive
in-house fundamental analysis is in constant contact with the management,
customers, competitors, and suppliers of both current and potential investments.

Investment Guidelines
- --------------------------------------------------------------------------------
The Fund seeks companies that:

* are experiencing a rapid growth rate - companies in our portfolio are
forecasted to grow their profits in excess of 15% annually;

* are selling at a stock price not yet fully reflective of their growth rate;

* are undergoing a positive change created by new products, managements,
distribution strategies or manufacturing technologies;

* have a strong balance sheet and are less susceptible to macroeconomic
change.

The Largest Industry Groups [Represented by Pie Chart in mailings]
- --------------------------------------------------------------------------------
Retail Sales & Distribution - 14.3%
Financial Services - 10.2%
Computers & Peripherals - 9.2 %
Telecommunications - 8.6 %
Energy Services - 8.4%
Computers & Software - 6.4%
Pharmaceuticals - 6.3%
Machinery, Construction & Manufacturing - 4.9%
Business Services - 4.0%
Semiconductors & Related - 4.0%
All Others - 23.6%

About The Investment Advisor
- --------------------------------------------------------------------------------
Gardner Lewis Asset management serves as investment advisor to the Chesapeake
Family of Funds. Overall, through the funds and separately managed accounts,
Gardner Lewis invests approximately $2.6 billion in growth equities for both
institutions and individuals including some of the top foundations, endowments,
and pension plans in the U.S. Gardner Lewis was founded in 1990 and employs a
staff of 29. The research team is comprised of 15.
<PAGE>
Ten Largest Holdings
- -------------------------------------
1. MCI Worldcom Inc. 5.8%
2. CVS Corporation 3.9%
3. Warner Lambert & Co. 3.9%
4. IMS Health Inc. 3.3%
5. Cisco Systems 3.1%
6. Guidant Corp. 3.0%
7. Tyco Industries, Inc. 2.9%
8. Nationsbank Corp. 2.9%
9. Lowe's Companies, Inc. 2.9%
10. Sun Microsystems, Inc. 2.9%

Portfolio Characteristics
- -------------------------------------
Number of Companies 44
5 Yr. Historical Earnings Growth 24%
Earnings Growth - net year 24%
P/E Ratio - next year 18
(Gardner Lewis earnings estimates)

Performance Summary
- ------------------------------------------------------
Annualized
- ------------------------------------------------------
Period Ended Year to Since
9/30/98 Date 1 Year Inception
- ------------------------------------------------------
The Chesapeake
Core Growth Fund 1.0% -4.1% 0.4%
- ------------------------------------------------------

The inception date of the Fund was September 29, 1997. The performance quoted
represents past performance and is not a guarantee of future results. Share
price and investment return will vary, so you may have a gain or loss when you
sell shares.

For more complete information regarding The Fund including charges
and expenses, obtain a prospectus by calling the Fund directly at (800)430-3863
or Gardner Lewis Asset Management, the Investment Advisor at (610)558-2800.

Must be accompanied or preceded by a prospectus.
Capital Investment Group, Inc., Distributor
Raleigh, NC (800)525-3863
<PAGE>
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_____________________________________________________

THE CHESAPEAKE CORE GROWTH FUND
_____________________________________________________

PORTFOLIO OF INVESTMENTS
(unaudited)
September 30, 1998

============================================================ =========================================================
Quantity Security Market Value Quantity Security Market Value
============================================================ =========================================================
3,500 AES Corporation 129,719 1,070 International Business Machines 137,495
3,300 AlliedSignal, Inc. 116,738 9,100 K Mart Corp. 109,200
1,700 Allmerica Financial Corp. 101,363 5,000 Lowe's Companies, Inc. 159,063
2,500 Ascend Communications 113,750 6,499 MCI Worldcom Inc. 317,627
2,520 BMC Software, Inc. 151,358 3,800 Micron Technology 115,663
2,900 Block, H & R, Inc. 119,988 2,990 Nationsbank Corp. 159,965
1,400 Bristol Myers Squibb Co. 145,425 2,700 Networks Associates, Inc. 95,850
4,900 CVS Corporation 214,681 700 Nokia Corporation 54,775
4,520 Cadence Design Systems 115,543 3,300 Rite Aid Corporation 117,150
4,340 CalEnergy 115,010 3,900 Saks, Inc. 87,506
7,910 Cendant Corporation 91,954 3,200 Service Corp. 102,000
1,000 Chase Manhattan Bank 43,125 6,150 Southwest Airlines, Co. 124,538
2,700 Cisco Systems 166,894 1,500 Staples, Inc. 44,063
1,600 Costco Companies, Inc. 75,800 3,170 Sun Microsystems, Inc. 157,906
2,720 EMC Corporation 156,060 1,500 TRICON Global Restaurants 58,688
1,300 Gateway 2000, Inc. 68,006 2,200 Travelers Group, Inc. 82,500
2,200 Guidant Corp. 163,350 2,900 Tyco Industries, Inc. 160,225
4,000 Halliburton Co 115,000 1,800 U.S. Airways Group, Inc. 91,125
2,700 Hertz Corp. 113,063 3,100 Unicom Inc. 115,863
2,900 Household International 108,750 2,800 Warner Lambert & Co. 211,400
2,940 IMS Health Inc. 182,096 3,250 Waste Management, Inc. 156,203
1,260 Intel Corp. 108,045 1,100 Wellpoint Health Networks Inc. 61,669

TOTAL EQUITY 5,436,186

CASH EQUIVALENT 200,150

TOTAL ASSETS 5,636,336
</TABLE>
<PAGE>

________________________________________________________________________________

THE CHESAPEAKE CORE GROWTH FUND

________________________________________________________________________________

a series of the Gardner Lewis Investment Trust

Semi-Annual Report 1998

FOR THE PERIOD ENDED AUGUST 31

INVESTMENT ADVISOR
Gardner Lewis Asset Management
285 Wilmington-West Chester Pike
Chadds Ford, Pennsylvania 19317

THE CHESAPEAKE CORE GROWTH FUND
107 North Washington Street
Post Office Drawer 4365
Rocky Mount, North Carolina 27803-0365
1-800-430-3863

<PAGE>
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THE CHESAPEAKE CORE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

COMMON STOCKS - 90.57%

Auto & Trucks - 1.94%
The Hertz Corporation .................................................... 3,600 $ 135,900
-----------

Commercial Services - 5.99%
(a) Cendant Corporation ...................................................... 10,510 121,522
H&R Block, Inc. .......................................................... 3,900 152,588
Service Corporation International ........................................ 4,300 145,662
-----------
419,772
-----------
Computers - 11.34%
(a) Cisco Systems, Inc. ...................................................... 2,400 196,500
(a) EMC Corporation .......................................................... 4,220 189,372
(a) Gateway 2000, Inc. ....................................................... 1,800 84,938
International Business Machines Corporation .............................. 1,370 154,296
(a) Sun Microsystems, Inc. ................................................... 4,270 169,199
-----------
794,305
-----------
Computer Software & Services - 8.58%
(a) BMC Software, Inc. ....................................................... 3,320 140,478
(a) Cadence Design Systems, Inc. ............................................. 6,020 127,173
IMS Health Incorporated .................................................. 3,940 216,700
(a) Network Associates, Inc. ................................................. 3,600 116,100
-----------
600,451
-----------
Electronics - Semiconductor - 1.69%
Intel Corporation ........................................................ 1,660 118,171
-----------

Environmental Control - 3.06%
(a) Waste Management, Inc. ................................................... 4,850 214,005
-----------

Financial - Banks, Commercial - 4.69%
NationsBank Corporation .................................................. 3,990 229,673
State Street Corporation ................................................. 1,900 98,919
-----------
328,592
-----------
Financial - Banks, Money Center - 0.97%
The Chase Manhattan Corporation .......................................... 1,300 68,250
-----------

Financial Services - 3.63%
The CIT Group, Inc. ...................................................... 4,300 110,456
Household International, Inc. ............................................ 3,900 144,056
-----------
254,512
-----------
Household Products & Housewares - 2.16%
Maytag Corporation ....................................................... 3,500 150,938
-----------

(Continued)
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<PAGE>
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THE CHESAPEAKE CORE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

COMMON STOCKS - (Continued)

Insurance - Multiline - 3.84%
Allmerica Financial Corporation .......................................... 2,300 $ 137,138
Travelers Group Inc. ..................................................... 3,500 132,000
-----------
269,138
-----------
Medical - Hospital Management & Service - 5.12%
Columbia/HCA Healthcare Corporation ...................................... 6,350 143,272
(a) HEALTHSOUTH Corporation .................................................. 7,160 135,593
(a) Wellpoint Health Networks Inc. ........................................... 1,500 80,063
-----------
358,928
-----------
Medical Supplies - 2.23%
Guidant Corporation ...................................................... 2,600 156,000
-----------

Miscellaneous - Manufacturing - 4.94%
AlliedSignal Inc. ........................................................ 4,400 150,975
Tyco International Ltd. .................................................. 3,500 194,250
-----------
345,225
-----------
Oil & Gas - Equipment & Services - 2.05%
Halliburton Company ...................................................... 5,400 143,438
-----------

Pharmaceuticals - 4.31%
Warner-Lambert Company ................................................... 4,600 301,588
-----------

Restaurants & Food Service - 1.06%
(a) Tricon Global Restaurants, Inc. .......................................... 2,000 74,125
-----------

Retail - Department Stores - 1.89%
(a) Profitt's, Inc. .......................................................... 5,200 132,600
-----------

Retail - Drug Stores - 3.38%
CVS Corporation .......................................................... 6,500 236,438
-----------

Retail - General Merchandise - 2.20%
(a) Kmart Corporation ........................................................ 12,100 154,275
-----------

Retail - Specialty - 1.39%
(a) Staples, Inc. ............................................................ 3,600 97,650
-----------

Telecommunications - 4.14%
MCI Communications Corporation ........................................... 5,800 290,000
-----------

(Continued)
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<PAGE>
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THE CHESAPEAKE CORE GROWTH FUND

PORTFOLIO OF INVESTMENTS

August 31, 1998
(Unaudited)

COMMON STOCKS - (Continued)

Transportation - Air - 4.10%
Southwest Airlines Co. ................................................... 8,250 $ 147,469
(a) US Airways Group, Inc. ................................................... 2,400 139,800
-----------
287,269
-----------
Utilities - Electric - 3.91%
(a) The AES Corporation ...................................................... 4,700 128,075
(a) CalEnergy Company, Inc. .................................................. 5,740 146,010
-----------
274,085
-----------
Utilities - Telecommunications - 0.91%
(a) WorldCom, Inc. ........................................................... 1,550 63,453
-----------

Utilities - Water - 1.05%
(a) United States Filter Corporation ......................................... 4,100 73,800
-----------

Total Common Stocks (Cost $6,915,134) .................................... 6,342,908
-----------

INVESTMENT COMPANIES - 9.80%

Evergreen Money Market Treasury Institutional Money
Market Fund Institutional Service Shares ................................. 343,299 343,299
Evergreen Money Market Treasury Institutional Treasury Money
Market Fund Institutional Service Shares ................................. 343,299 343,299
-----------

Total Investment Companies (Cost $686,598) ............................... 686,598
-----------

Total Value of Investments (Cost $7,601,732 (b)) ................................................ 100.37 % $ 7,029,506
Liabilities In Excess of Other Assets ........................................................... (0.37)% (25,596)
------ -----------
Net Assets ............................................................................... 100.00 % $ 7,003,910
====== ===========

(a) Non-income producing investment.

(b) Aggregate cost for federal income tax purposes is $7,613,518.
Unrealized appreciation (depreciation) of investments for financial
reporting and federal income tax purposes is as follows:

Unrealized appreciation $ 297,244
Unrealized depreciation (881,256)
-----------

Net unrealized depreciation $ (584,012)
===========

See accompanying notes to financial statements
</TABLE>
<PAGE>
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THE CHEASAPEAKE CORE GROWTH FUND

STATEMENT OF ASSETS AND LIABILITIES

August 31, 1998
(Unaudited)

ASSETS
Investments, at value (cost $7,601,732) ......................................................... $ 7,029,506
Cash ............................................................................................ 46,569
Income receivable ............................................................................... 5,202
Receivable for investments sold ................................................................. 10,913
Prepaid expenses ................................................................................ 2,830
-----------

Total assets ............................................................................... 7,095,020
-----------

LIABILITIES
Accrued expenses ................................................................................ 13,865
Payable for investment purchases ................................................................ 77,245
-----------

Total liabilities .......................................................................... 91,110
-----------

NET ASSETS
(applicable to 749,738 shares outstanding; unlimited
shares of no par value beneficial interest authorized) ......................................... $ 7,003,910
===========

NET ASSET VALUE, REDEMPTION AND OFFERING PRICE PER SHARE
($7,003,910 / 749,738 shares) ................................................................... $ 9.34
===========

NET ASSETS CONSIST OF
Paid-in capital ................................................................................. $ 7,844,124
Accumulated net realized loss on investments .................................................... (267,988)
Net unrealized depreciation on investments ...................................................... (572,226)
-----------
$ 7,003,910
===========

See accompanying notes to financial statements
</TABLE>
<PAGE>
<TABLE>
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THE CHESAPEAKE CORE GROWTH FUND

STATEMENT OF OPERATIONS

Period ended August 31, 1998
(Unaudited)

INVESTMENT LOSS

Income
Dividends .................................................................................... $ 26,709
-----------

Expenses
Investment advisory fees (note 2) ............................................................ 32,352
Fund administration fees (note 2) ............................................................ 2,426
Custody fees ................................................................................. 1,614
Registration and filing administration fees (note 2) ......................................... 1,438
Fund accounting fees (note 2) ................................................................ 10,500
Audit fees ................................................................................... 4,033
Legal fees ................................................................................... 10,566
Securities pricing fees ...................................................................... 1,376
Shareholder administration fees (note 2) ..................................................... 6,302
Shareholder recordkeeping fees ............................................................... 4,524
Shareholder servicing expenses ............................................................... 1,765
Registration and filing expenses ............................................................. 6,364
Printing expenses ............................................................................ 1,394
Trustee fees and meeting expenses ............................................................ 4,033
Other operating expenses ..................................................................... 606
-----------

Total expenses .......................................................................... 89,293
-----------

Less:
Investment advisory fees waived (note 2) .......................................... (32,352)
Fund administration fees waived (note 2) .......................................... (2,426)
Shareholder administration fees waived (note 2) ................................... (6,302)
-----------

Net expenses ............................................................................ 48,213
-----------

Net investment loss ............................................................... (21,504)
-----------

REALIZED AND UNREALIZED LOSS ON INVESTMENTS

Net realized loss from investment transactions .................................................... (49,574)
Decrease in unrealized appreciation on investments ................................................ (1,007,539)
-----------

Net realized and unrealized loss on investments .............................................. (1,057,113)
-----------

Net decrease in net assets resulting from operations .................................... $(1,078,617)
===========

See accompanying notes to financial statements
</TABLE>
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THE CHESAPEAKE CORE GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
September 29, 1997
(commencement
Period ended of operations)
August 31, to February 28,
1998 1998
- ------------------------------------------------------------------------------------------------------------------------------------

INCREASE IN NET ASSETS

Operations
Net investment loss ............................................................ $ (21,504) $ (4,600)
Net realized loss from investment transactions ................................. (49,574) (218,414)
(Decrease) increase in unrealized appreciation on investments .................. (1,007,539) 435,313
----------- -----------

Net (decrease) increase in net assets resulting from operations ........... (1,078,617) 212,299
----------- -----------

Distribution to shareholders
Distribution in excess of net investment income ................................ 0 (9,859)
----------- -----------

Capital share transactions
Increase in net assets resulting from capital share transactions (a) ........... 2,034,259 5,845,828
----------- -----------

Total increase in net assets ......................................... 955,642 6,048,268

NET ASSETS

Beginning of period ................................................................ 6,048,268 0
----------- -----------

End of period ...................................................................... $ 7,003,910 $ 6,048,268
=========== ===========

(a) A summary of capital share activity follows:
------------------------------------------------------------------------------------
For the period from
September 29, 1997
Period ended (commencement of operations)
August 31, 1998 to February 28, 1998

Shares Value Shares Value
------------------------------------------------------------------------------------

Shares sold .................................... 197,783 $ 2,172,108 563,478 $ 5,837,694
Shares issued for reinvestment
of distributions .......................... 0 0 830 8,231
----------- ----------- ----------- -----------

197,783 2,172,108 564,308 5,845,925

Shares redeemed ................................ (12,343) (137,849) (10) (97)
----------- ----------- ----------- -----------

Net increase .............................. 185,440 $ 2,034,259 564,298 $ 5,845,828
=========== =========== =========== ===========

See accompanying notes to financial statements
</TABLE>
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THE CHESAPEAKE CORE GROWTH FUND

FINANCIAL HIGHLIGHTS

(For a Share Outstanding Throughout the Period)
(Unaudited)

- ------------------------------------------------------------------------------------------------------------------------------------
For the
period from
September 29, 1997
(commencement of
Period ended operations) to
August 31, February 28,
1998 1998
- ------------------------------------------------------------------------------------------------------------------------------------

Net asset value, beginning of period ................................................. $ 10.72 $ 10.00

(Loss) income from investment operations
Net investment loss ....................................................... (0.03) (0.01)
Net realized and unrealized (loss) gain on investments .................... (1.35) 0.75
----------- -----------

Total from investment operations ...................................... (1.38) 0.74
----------- -----------

Distribution to shareholders
Distribution in excess of net investment income ........................... (0.00) (0.02)
----------- -----------

Net asset value, end of period ....................................................... $ 9.34 $ 10.72
=========== ===========

Total return ......................................................................... (12.95)% 7.49 %
=========== ===========

Ratios/supplemental data

Net assets, end of period ...................................................... $ 7,003,910 $ 6,048,268
=========== ===========

Ratio of expenses to average net assets (a)
Before expense reimbursements and waived fees .................................. 2.76 % 3.19 %
After expense reimbursements and waived fees ................................... 1.49 % 1.24 %

Ratio of net investment loss to average net assets (a)
Before expense reimbursements and waived fees .................................. (1.94)% (2.19)%
After expense reimbursements and waived fees ................................... (0.67)% (0.24)%

Portfolio turnover rate ............................................................. 50.70 % 29.83 %

Average brokerage commissions per share (b) ......................................... $ 0.0556 $ 0.0486

(a) Annualized.

(b) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.

See accompanying notes to financial statements
</TABLE>
<PAGE>

THE CHESAPEAKE CORE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998
(Unaudited)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND OTHER INFORMATION

The Chesapeake Core Growth Fund (the "Fund") is a diversified series of
shares of beneficial interest of the Gardner Lewis Investment Trust
(the "Trust"). The Trust is an open-end investment company which was
organized in 1992 as a Massachusetts Business Trust and is registered
under the Investment Company Act of 1940, (the "Act") as amended. The
Fund began operations on September 29, 1997. The investment objective
of the Fund is to seek capital appreciation through investments in
equity securities, consisting primarily of common and preferred stocks
and securities convertible into common stocks. The following is a
summary of significant accounting policies followed by the Fund:

A. Security Valuation - The Fund's investments in securities are
carried at value. Securities listed on an exchange or quoted
on a national market system are valued at the last sales price
as of 4:00 p.m. New York time. Other securities traded in the
over-the-counter market and listed securities for which no
sale was reported on that date are valued at the most recent
bid price. Securities for which market quotations are not
readily available, if any, are valued by using an independent
pricing service or by following procedures approved by the
Board of Trustees. Short-term investments are valued at cost
which approximates value.

Net investment income (loss) and net realized gains (losses)
may differ for financial statement and income tax purposes
primarily because of losses incurred subsequent to October 31,
which are deferred for income tax purposes. The character of
distributions made during the year from net investment income
or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to
the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the
income or realized gains were recorded by the Fund.

C. Investment Transactions - Investment transactions are recorded
on the trade date. Realized gains and losses are determined
using the specific identification cost method. Interest income
is recorded daily on an accrual basis. Dividend income is
recorded on the ex-dividend date.

D. Distributions to Shareholders - The Fund may declare dividends
annually on a date selected by the Trust's Trustees.
Distributions to shareholders are recorded on the ex-dividend
date. In addition, distributions may be made annually in
November out of net realized gains through October 31 of that
year. The Fund may make a supplemental distribution subsequent
to the end of its fiscal year ending February 28.

E. 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 amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results
could differ from those estimated.

(Continued)
<PAGE>

THE CHESAPEAKE CORE GROWTH FUND

NOTES TO FINANCIAL STATEMENTS

August 31, 1998
(Unaudited)

NOTE 2 - INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS

Pursuant to an investment advisory agreement, Gardner Lewis Asset
Management (the "Advisor") provides the Fund with a continuous program
of supervision of the Fund's assets, including the composition of its
portfolio, and furnishes advice and recommendations with respect to
investments, investment policies, and the purchase and sale of
securities. As compensation for its services, the Advisor receives a
fee at the annual rate of 1.00% of the Fund's average daily net assets.
The Advisor intends to voluntarily waive all or a portion of its fee.
There can be no assurance that the foregoing voluntary fee waiver will
continue. The Advisor has voluntarily waived its fee amounting to
$32,352 ($0.06 per share) for the period ended August 31, 1998.

Certain Trustees and officers of the Trust are also officers of the
Advisor or the Administrator.

NOTE 3 - PURCHASES AND SALES OF INVESTMENTS

Purchases and sales of investments other than short-term investments
aggregated $4,548,908 and $3,001,156 respectively, for the period ended
August 31, 1998.