PROSPECTUS
Treasury Instruments Money Market Fund
An Investment Portfolio Offered By
Lehman Brothers Institutional Funds Group Trust
Lehman Brothers Institutional Funds Group Trust (the
"Trust") is a no-load, open-end, management investment company.
The shares described in this Prospectus represent interests in the
Treasury Instruments Money Market Fund portfolio (the "Fund"), one
of a family of money market portfolios of the Trust.
The Fund's investment objective is to provide current income
with liquidity and security of principal. The Fund invests in a
portfolio consisting of U.S. Treasury bills, notes and direct
obligations of the U.S. Treasury and repurchase agreements
relating to direct Treasury obligations.
Fund shares may not be purchased by individuals directly,
but institutional investors may purchase shares for accounts
maintained by individuals. The Fund currently offers three classes
of shares. In addition to Class A shares, institutional investors
may purchase on behalf of their customers Class B or Class C
shares which accrue daily dividends in the same manner as Class A
shares but bear all fees payable by the Fund to institutional
investors for certain services they provide to the beneficial
owners of such shares. See "Management of the Fund_Service
Organizations."
An investment in the Fund is neither insured nor guaranteed
by the U.S. Government. There can be no assurance that the Fund
will be able to maintain its net asset value of $1.00 per share.
Lehman Brothers, Inc. ("Lehman Brothers") sponsors the Fund
and acts as Distributor of its shares. Lehman Brothers Global
Asset Management Inc. serves as the Fund's Investment Adviser.
The address of the Fund is One Exchange Place, Boston,
Massachusetts 02109. The Fund can be contacted as follows: for
purchase and redemption orders only call 800-851-3134; for yield
information call 800-238-2560 (Class A shares code: 005; Class B
shares code: 105; Class C shares code: 205); for other information
call 800-368-5556.
This Prospectus briefly sets forth certain information about
the Fund that investors should know before investing. Investors
are advised to read this Prospectus and retain it for future
reference. Additional information about the Fund, contained in a
Statement of Additional Information dated May , 1994, as
amended or supplemented from time to time, has been filed with the
Securities and Exchange Commission and is available to investors
without charge by calling the Fund's distributor at 800-368-5556.
The Statement of Additional Information is incorporated in its
entirety by reference into this Prospectus.
Shares of the Fund are not deposits or obligations of, or
guaranteed or endorsed by, any bank, and such shares are not
federally insured by the Federal Deposit Insurance Corporation,
the Federal Reserve Board or any other government agency. Shares
of the Fund involve certain investment risks, including the
possible loss of principal.
___________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________
LEHMAN BROTHERS
May , 1994
BACKGROUND AND EXPENSE INFORMATION
The following Expense Summary lists the costs and expenses
that an investor in the Fund can expect to incur during the Fund's
current fiscal year ending January 31, 1995. The Fund offers three
separate classes of shares. Shares of each class represent equal,
pro rata interests in the Fund and accrue daily dividends in the
same manner except that Class B and C shares bear fees payable by
the Fund (at the rate of .25% and .35% per annum, respectively) to
institutional investors for services they provide to the
beneficial owners of such shares. See "Management of the
Fund_Service Organizations."
Expense Summary
C
l
a
s
s
A
S
h
a
r
e
s
C
l
a
s
s
B
S
h
a
r
e
s
C
l
a
s
s
C
S
h
a
r
e
s
Annual Fund Operating Expenses
(as a percentage of average net assets)
Advisory Fees
(net of applicable fee waivers)
0
.
0
9
%
*
0
.
0
9
%
*
0
.
0
9
%
*
Rule 12b-1 fees
n
o
n
e
.
2
5
%
.
3
5
%
Other Expenses_including
Administration Fees
(net of applicable fee waivers)
0
.
0
6
%
0
.
0
6
%
*
0
.
0
6
%
*
Total Fund Operating
Expenses (after fee waivers)*
.
1
6
%
.
4
1
%
.
5
1
%
___________
* The Expense Summary above has been restated to reflect the
Fund's Investment Adviser's and Administrator's Voluntary
reimbursement arrangements in effect for the Fund's fiscal year
ending January 31, 1995. With respect to Class A, Class B and
Class C share for the month of January, 1995, the Total Fund
Operating Expenses including reimbursement of expenses are
anticipated to be .18%, .43%, and .53%, respectively.
In order to maintain a competitive expense ratio during
1994, the Funds' Investment Adviser and Administrator have
voluntarily agreed to reimburse the Fund if and to the extent that
total operating expenses (other than taxes, interest, brokerage
fees and commissions, Rule 12b-1 fees and extraordinary expenses)
exceed .16% of average daily net assets through December 31, 1994.
For the years 1995-1997, the Investment Adviser and Administrator
intend to continue voluntarily to reimburse the Fund to the extent
necessary to maintain an annualized expense ratio at a level no
greater than .18% of average daily net assets. The voluntary
reimbursement arrangements described above will not be changed
unless shareholders are provided at least 60 days' advance notice.
The maximum annual contractual fees payable to the Investment
Adviser and Administrator total .20% of average daily net assets.
Absent reimbursement of expenses, the Total Fund Operating
Expenses of Class A, Class B and Class C would be .25%, .50% and
.60%, respectively, of the Fund's average daily net assets.
_____
Example: An investor would pay the following expenses on a $1,000
investment, assuming (1) a 5% annual return and (2) redemption at
the end of each time period with respect to the following shares:
1
Y
e
a
r
3
Y
e
a
r
s
5
Y
e
a
r
s
1
0
Y
e
a
r
s
Class A shares:
$
2
$
5
$
9
$
2
0
Class B shares:
$
4
$
1
3
$
2
3
$
5
2
Class C shares:
$
5
$
1
6
$
2
9
$
6
4
THE FOREGOING SHOULD NOT BE CONSIDERED A REPRESENTATION OF ACTUAL
EXPENSES AND RATES OF RETURN, WHICH MAY BE GREATER OR LESSER THAN
THOSE SHOWN.
The purpose of the foregoing table is to assist an investor
in understanding the various costs and expenses that an investor
in the Fund will bear directly or indirectly. Certain Service
Organizations (as defined below) also may charge their clients
fees in connection with investments in Fund shares, which fees are
not reflected in the table. For more complete descriptions of the
various costs and expenses, see "Management of the Fund" in this
Prospectus and the Statement of Additional Information.
FINANCIAL HIGHLIGHTS
Treasury Instruments Money Market Fund
P
e
r
i
o
d
E
n
d
e
d
1
/
3
1
/
9
4
*
P
e
r
i
o
d
E
n
d
e
d
1
/
3
1
/
9
4
*
C
l
a
s
s
A
C
l
a
s
s
B
Net asset value, beginning of period
$
1
.
0
0
$
1
.
0
0
Net investment income(1)
0
.
0
2
9
2
0
.
0
1
0
0
Dividends from net investment income
(
0
.
0
2
9
2
)
(
0
.
0
1
0
0
)
Net asset value, end of period
$
1
.
0
0
$
1
.
0
0
Total return(2)
2
.
9
4
%
1
.
0
0
%
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's)
$
3
,
0
0
0
_
#
Ratio of net investment income to
average net assets(3)
2
.
9
9
%
2
.
7
4
%
Ratio of operating expenses to
average net assets(3)(4)
0
.
0
0
%
0
.
2
5
%
___________
* The Treasury Instruments Money Market Fund Class A and
Class B Shares commenced operations on February 8, 1993, and
April 21, 1993, respectively.
(1) Net investment loss before waiver of fees by the Investment
Adviser, Administrator, Custodian and Transfer Agent and expenses
reimbursed by the Investment Adviser and Administrator for Class A
and Class B were $(0.0003) and $(0.0010), respectively.
(2) Total return represents aggregate total return for the
period indicated.
(3) Annualized.
(4) Annualized expense ratio before waiver of fees by the
Investment Adviser, Administrator, Custodian and Transfer Agent
and expenses reimbursed by the Investment Adviser and
Administrator for Class A and Class B were 3.02% and 3.27%,
respectively.
# Total net assets for Class B was $100 at January 31, 1994.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is current income with
liquidity and security of principal. The Fund, which operates as a
diversified investment company, invests solely in direct
obligations of the U.S. Treasury, such as Treasury bills and notes
and repurchase agreements relating to direct Treasury obligations.
The Fund invests only in securities which are purchased with and
payable in U.S. dollars (i.e., U.S. dollar denominated securities)
and which have (or, pursuant to regulations adopted by the
Securities and Exchange Commission, are deemed to have) remaining
maturities of 13 months or less at the date of purchase by the
Fund. The Fund maintains a dollar-weighted average portfolio
maturity of 90 days or less.
Securities issued or guaranteed by the U.S. Government have
historically involved little risk of loss of principal if held to
maturity. However, due to fluctuations in interest rates, the
market value of such securities may vary during the period a
shareholder owns shares of the Fund. Certain government securities
held by the Fund may have remaining maturities exceeding thirteen
months if such securities provide for adjustments in their
interest rates not less frequently than every thirteen months.
The Fund may purchase government securities from financial
institutions, such as banks and broker-dealers, subject to the
seller's agreement to repurchase them at an agreed upon time and
price ("repurchase agreements"). The Fund will not invest more
than 10% of the value of its net assets in repurchase agreements
which do not provide for settlement within seven days. The seller
under a repurchase agreement will be required to maintain the
value of the securities subject to the agreement at not less than
the repurchase price (including accrued interest). Default by or
bankruptcy of the seller would, however, expose the Fund to
possible loss because of adverse market action or delay in
connection with the disposition of the underlying obligations.
The Fund may borrow funds for temporary purposes by entering
into reverse repurchase agreements in accordance with the
investment restrictions described below. Pursuant to such
agreements, the Fund would sell portfolio securities to financial
institutions and agree to repurchase them at an agreed upon date
and price. The Fund would consider entering into reverse
repurchase agreements to avoid otherwise selling securities during
unfavorable market conditions to meet redemptions. Reverse
repurchase agreements involve the risk that the market value of
the portfolio securities sold by the Fund may decline below the
price of the securities the Fund is obligated to repurchase.
The Fund may purchase securities on a "when-issued" basis.
When-issued securities are securities purchased for delivery
beyond the normal settlement date at a stated price and yield. The
Fund will generally not pay for such securities or start earning
interest on them until they are received. Securities purchased on
a when-issued basis are recorded as an asset and are subject to
changes in value based upon changes in the general level of
interest rates. The Fund expects that commitments to purchase
when-issued securities will not exceed 25% of the value of its
total assets absent unusual market conditions. The Fund does not
intend to purchase when-issued securities for speculative purposes
but only in furtherance of its investment objective.
The Fund may also lend its portfolio securities to financial
institutions in accordance with the investment restrictions
described below. The Fund may lend portfolio securities against
collateral consisting of cash or securities which are consistent
with the Fund's permitted investments, which is equal at all times
to at least 100% of the value of the securities loaned. There is
no limitation on the amount of securities that may be loaned. Such
loans would involve risks of delay in receiving additional
collateral or in recovering the securities loaned or even loss of
rights in the collateral should the borrower of the securities
fail financially. However, loans will be made only to borrowers
deemed by the Fund's investment adviser to be of good standing and
only when, in the adviser's judgment, the income to be earned from
the loans justifies the attendant risks.
There can be no assurance that the Fund will achieve its
investment objective.
Investment Limitations
The Fund's investment objective and policies described above
are not fundamental and may be changed by the Trust's Board of
Trustees without a vote of shareholders. If there is a change in
the investment objective, shareholders should consider whether the
Fund remains an appropriate investment in light of their then
current financial position and needs. The Fund's borrowing
limitation summarized below may not be changed without the
affirmative vote of the holders of majority of its outstanding
shares. (A complete list of the investment limitations that cannot
be changed without a vote of shareholders is contained in the
Statement of Additional Information under "Investment Objective
and Policies.")
The Fund may not borrow money except from banks for
temporary purposes and then in an amount not exceeding 10% of the
value of the Fund's total assets, or mortgage, pledge or
hypothecate its assets except in connection with any such
borrowing and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the value of the Fund's total assets at
the time of such borrowing. Additional investments will not be
made when borrowings exceed 5% of the Fund's assets.
PURCHASE AND REDEMPTION OF SHARES
Purchase Procedures
Shares of the Fund are sold at the net asset value per share
of the Fund next determined after receipt of a purchase order by
Lehman Brothers, the Distributor of the Fund's shares. Purchase
orders for shares are accepted by the Fund only on days on which
both Lehman Brothers and the Federal Reserve Bank of Boston are
open for business and must be transmitted to Lehman Brothers, by
telephone at 800-851-3134. Orders received before noon, Eastern
time, for which payment has been received by Boston Safe Deposit
and Trust Company ("Boston Safe"), the Fund's custodian, will be
executed at noon. Orders received between noon and 3:00 P.M.,
Eastern time, will be executed at 3:00 P.M., Eastern time, if
payment has been received by Boston Safe by 3:00 P.M. and will be
executed at 4:00 P.M. if payment has been received by 4:00 P.M.
Orders received after 3:00 P.M. and orders for which payment has
not been received by 4:00 P.M., Eastern time, will not be accepted
and notice thereof will be given to the institution placing the
order. Payment for Fund shares may be made only in federal funds
immediately available to Boston Safe. (Payment for orders which
are not received or accepted by Lehman Brothers will be returned
after prompt inquiry to the sending institution.) The Fund may in
its discretion reject any order for shares.
The minimum aggregate initial investment by an institution
in the investment portfolios that comprise the Trust is $1 million
(with not less than $25,000 invested in any one investment
portfolio offered by the Trust); however, broker-dealers and other
institutional investors may set a higher minimum for their
customers. To reach the minimum Trust-wide initial investment,
purchases of shares may be aggregated over a period of six months.
There is no minimum subsequent investment.
Conflict of interest restrictions may apply to an
institution's receipt of compensation paid by the Fund on
fiduciary funds that are invested in Class B or Class C shares.
See also "Management of the Fund_Service Organizations."
Institutions, including banks regulated by the Comptroller of the
Currency and investment advisers and other money managers subject
to the jurisdiction of the Securities and Exchange Commission, the
Department of Labor or state securities commissions, should
consult their legal advisors before investing fiduciary funds in
Class B or Class C shares.
Subaccounting Services. Institutions are encouraged to open
single master accounts. However, certain institutions may wish to
use the transfer agent's subaccounting system to minimize their
internal recordkeeping requirements. The transfer agent charges a
fee based on the level of subaccounting services rendered.
Institutions holding Fund shares in a fiduciary, agency, custodial
or similar capacity may charge or pass through subaccounting fees
as part of or in addition to normal trust or agency account fees.
They may also charge fees for other services provided which may be
related to the ownership of Fund shares. This Prospectus should,
therefore, be read together with any agreement between the
customer and the institution with regard to the services provided,
the fees charged for those services and any restrictions and
limitations imposed.
Redemption Procedures
Redemption orders must be transmitted to Lehman Brothers at
1-800-581-3134. Payment for redeemed shares for which a redemption
order is received by Lehman Brothers before 3:00 P.M., Eastern
time, on a day that both Lehman Brothers and the Federal Reserve
Bank of Boston are open for business is normally made in federal
funds wired to the redeeming shareholder on the same business day.
Payment for other redemption orders which are received between
3:00 P.M. and 4:00 P.M., Eastern time, is normally wired in
federal funds on the next business day following redemption.
Shares are redeemed at the net asset value per share next
determined after Lehman Brothers' receipt of the redemption order.
While the Fund intends to use its best efforts to maintain its net
asset value per share at $1.00, the proceeds paid to a shareholder
upon redemption may be more or less than the amount invested
depending upon a share's net asset value at the time of
redemption. To allow the Fund's investment adviser and
sub-investment adviser to manage the Fund effectively, investors
are strongly urged to initiate all investments or redemptions of
Fund shares as early in the day as possible and to notify Lehman
Brothers at least one day in advance of transactions in excess of
$5 million.
The Fund reserves the right to wire redemption proceeds
within seven days after receiving the redemption order if, in the
judgment of the Investment Adviser, an earlier payment could
adversely affect the Fund. The Fund shall have the right to redeem
involuntarily shares in any account at their net asset value if
the value of the account is less than $10,000 after sixty days'
prior written notice to the shareholder. Any such redemption shall
be effected at the net asset value per share next determined after
the redemption order is entered. If during the sixty-day period
the shareholder increases the value of its account to $10,000 or
more, no such redemption shall take place. In addition, the Fund
may redeem shares involuntarily or suspend the right of redemption
as permitted under the Investment Company Act of 1940, as amended
(the "1940 Act"), or under certain special circumstances described
in the Statement of Additional Information under "Additional
Purchase and Redemption Information."
Valuation of Shares_Net Asset Value
The Fund's net asset value per share for purposes of pricing
purchase and redemption orders is determined by the Fund's
administrator as of noon, 3:00 P.M. and 4:00 P.M., Eastern time,
on each weekday, with the exception of those holidays on which
either Lehman Brothers or the Federal Reserve Bank of Boston is
closed. Currently, one or both of these institutions are closed on
customary national business holidays of New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day (Washington's Birthday),
Good Friday, Memorial Day (observed), Independence Day (observed),
Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and
Christmas Day and on the preceding Friday or subsequent Monday
when one of these holidays falls on a Saturday or Sunday,
respectively. The net asset value per share of the Fund is
calculated by adding the value of all securities and other assets
belonging to the Fund, subtracting liabilities and dividing the
result by the total number of the Fund's outstanding shares. In
computing net asset value, the Fund uses the amortized cost method
of valuation as described in the Statement of Additional
Information under "Additional Purchase and Redemption
Information." The Fund's net asset value per share for purposes of
pricing purchase and redemption orders is determined independently
of the net asset values of the shares of the Trust's other
investment portfolios.
Other Matters
Fund shares are sold and redeemed without charge by the
Fund. Institutional investors purchasing or holding Fund shares
for their customer accounts may charge customers fees for cash
management and other services provided in connection with their
accounts. A customer should, therefore, consider the terms of its
account with an institution before purchasing Fund shares. An
institution purchasing or redeeming shares on behalf of its
customers is responsible for transmitting orders to Lehman
Brothers in accordance with its customer agreements.
MANAGEMENT OF THE FUND
The business and affairs of the Fund are managed under the
direction of the Trust's Board of Trustees. The Trustees approve
all significant agreements between the Trust and the persons or
companies that furnish services to the Fund, including agreements
with its Distributors, Investment Adviser, Administrator,
Custodian and Transfer Agent. The day-to-day operations of the
Fund are delegated to the Fund's Investment Adviser and
Administrator. The Statement of Additional Information relating to
the Fund contains general background information regarding each
Trustee and executive officer of the Trust.
Distributor
Lehman Brothers, located at Three World Financial Center,
New York, New York 10285, is the Distributor of the Fund's shares.
Lehman Brothers, a leading full service investment firm, meets the
diverse financial needs of individuals, institutions and
governments around the world. Lehman Brothers has entered into a
Distribution Agreement with the Trust pursuant to which it has the
responsibility for distributing shares of the Fund.
Investment Adviser_Lehman Brothers Global Asset Management Inc.
Lehman Brothers Global Asset Management Inc. ("LBGAM"),
located at 3 World Financial Center, New York, New York 10285,
serves as the Fund's Investment Adviser. LBGAM is a wholly owned
subsidiary of Lehman Brothers Holdings Inc. ("Holdings"). LBGAM,
together with other Lehman Brothers investment advisory
affiliates, serves as Investment Adviser to investment companies
and private accounts and has assets under Management in excess of
$15 billion.
As Investment Adviser to the Fund, LBGAM will, among other
things, participate in the formulation of the Fund's investment
policies, analyze economic trends affecting the Fund and monitor
and evaluate the Fund's investment objective and policies and the
Fund's performance. For its services LBGAM will be paid a monthly
fee by the Fund at the annual rate of .10% of the value of the
Fund's average daily net assets. For the period February 8, 1993
(commencement of operations) to January 31, 1994, LBGAM received
an advisory fee from the Fund in the amount of . % of average
daily net assets.
Administrator and Transfer Agent_Shareholder Services Group
The Shareholder Services Group, Inc. ("TSSG"), located at
One Exchange Place, 53 State Street, Boston, Massachusetts 02109,
serves as the Fund's Administrator and Transfer Agent. TSSG is a
wholly owned subsidiary of First Data Corporation. As
Administrator, TSSG calculates the net asset value of the Fund's
shares and generally assists in all aspects of the Fund's
administration and operation. As compensation for TSSG's services
as Administrator, TSSG is entitled to receive from the Fund a
monthly fee at the annual rate of 10% of the value of the Fund's
average daily net assets. TSSG is also entitled to receive a fee
from the Fund for its services as Transfer Agent. TSSG pays Boston
Safe, the Fund's Custodian, a portion of its monthly
administration fee for custody services rendered to the Fund.
Custodian_Boston Safe Deposit and Trust Company
Boston Safe, a wholly owned subsidiary of The Boston
Company, Inc., located at One Boston Place, Boston, Massachusetts
02108, serves as the Fund's Custodian.
Service Organizations
Institutional investors, such as banks, savings and loan
associations and other financial institutions ("Service
Organizations") and/or institutional customers of Service
Organizations may purchase Class B or Class C shares. These
shares are identical in all respects to Class A shares except that
they bear the fees described below and enjoy certain exclusive
voting rights on matters relating to these fees. The Fund will
enter into an agreement with each Service Organization whose
customers ("Customers") are the beneficial owners of Class B or
Class C shares that requires the Service Organization to provide
certain services to Customers in consideration of the Fund's
payment of service fees at the annual rate of .25% or .35%,
respectively of the average daily net asset value of the
respective class beneficially owned by Customers. Such services,
which are described more fully in the Statement of Additional
Information under "Management of the Funds_Service Organizations,"
include aggregating and processing purchase and redemption
requests from Customers and placing net purchase and redemption
orders with Lehman Brothers; processing dividend payments from the
Fund on behalf of Customers; providing information periodically to
Customers showing their positions in shares; arranging for bank
wires; responding to customer inquiries relating to the services
provided by the Service Organization and handling correspondence;
and acting as shareholder of record and nominee; and providing
reasonable assistance in connection with the distribution of
shares to Customers. Services provided with respect to Class B
shares will generally be more limited than those provided with
respect to Class C shares. Under the terms of the agreements,
Service Organizations are required to provide to their Customers a
schedule of any fees that they may charge Customers in connection
with their investments in Class B or Class C shares. Class A
shares are sold to institutions that have not entered into
servicing agreements with the Fund in connection with their
investments. A salesperson and any other person entitled to
receive compensation for selling or servicing shares of the Fund
may receive different compensation for selling or servicing one
Class of shares over another Class.
Expenses
The Fund bears all of its own expenses. The Fund's expenses
include taxes, interest, fees and salaries of the Trust's trustees
and officers who are not directors, officers or employees of the
Fund's service contractors, Securities and Exchange Commission
fees, state securities qualification fees, costs of preparing and
printing prospectuses for regulatory purposes and for distribution
to shareholders, advisory and administration fees, charges of the
custodian, transfer agent and dividend disbursing agent, Service
Organization fees, certain insurance premiums, outside auditing
and legal expenses, costs of shareholder reports and shareholder
meetings and any extraordinary expenses. The Fund also pays for
brokerage fees and commissions (if any) in connection with the
purchase and sale of portfolio securities. In order to maintain a
competitive expense ratio during 1994, LBGAM, and TSSG have agreed
voluntarily to reimburse the Fund if and to the extent that the
Fund's total operating expenses (other than taxes, interest,
brokerage fees and commissions, Rule 12b-1 fees under the 1940 Act
and extraordinary expenses) exceed .16% of average daily net
assets through December 31, 1994. The investment adviser and
administrator intend to continue voluntarily to reimburse the Fund
to the extent necessary to maintain an annualized expense ratio at
a level no greater than .18% of average daily net assets
thereafter. This voluntary reimbursement will not be changed
unless shareholders are provided at least 60 days' advance notice.
In addition, these service providers have agreed to reimburse the
Fund to the extent required by applicable state law for certain
expenses that are described in the Statement of Additional
Information relating to the Fund. Any fees charged by Service
Organizations or other institutional investors to their customers
in connection with investments in Fund shares are not reflected in
the Fund's expenses.
DIVIDENDS
Shareholders of the Fund are entitled to dividends and
distributions arising only from the net investment income and
capital gains, if any, earned on its investments held by the Fund.
The Fund's net investment income is declared daily as a dividend
to shares held of record at the close of business on the day of
declaration. Shares begin accruing dividends on the day the
purchase order for the shares is effected and continue to accrue
dividends through the day before such shares are redeemed.
Dividends are paid monthly by wire transfer within five business
days after the end of the month or within five business days after
a redemption of all of a shareholder's shares of a particular
class. The Fund does not expect to realize net long-term capital
gains.
Dividends are determined in the same manner and are paid in
the same amount for each share of the Fund except that Class B and
Class C shares bear all the expense of fees paid to Service
Organizations. As a result, at any given time, the net yield on
Class B and Class C shares will be .25% and .35%, respectively,
lower than the net yield on Class A shares.
Institutional shareholders may elect to have their dividends
reinvested in additional full and fractional shares of the same
class at the net asset value of such shares on the payment date.
Reinvested dividends receive the same tax treatment as dividends
paid in cash. Such election, or any revocation thereof, must be
made in writing to the Fund's Distributor at 260 Franklin Street,
15th Floor, Boston, Massachusetts 02110-9624, and will become
effective after its receipt by TSSG with respect to dividends
paid.
TSSG, as transfer agent, will send each Fund shareholder or
its authorized representative an annual statement designating the
amount, if any, of any dividends and distributions made during
each year and their federal tax qualification.
TAXES
The Fund qualified in its last taxable year and intends to
qualify each year as a "regulated investment company" under the
Internal Revenue Code of 1986, as amended (the "Code"). A
regulated investment company is exempt from federal income tax on
amounts distributed to its shareholders.
Qualification as a regulated investment company under the
Code for a taxable year requires, among other things, that the
Fund distribute to its shareholders at least 90% of its investment
company taxable income for such year. In general, the Fund's
investment company taxable income will be its taxable income
(including interest) subject to certain adjustments and excluding
the excess of any net long-term capital gain for the taxable year
over the net short-term capital loss, if any, for such year. The
Fund intends to distribute substantially all of its investment
company taxable income each year. Such distributions will be
taxable as ordinary income to the Fund's shareholders who are not
currently exempt from federal income taxes, whether such income is
received in cash or reinvested in additional shares. It is
anticipated that none of the Fund's distributions will be eligible
for the dividends received deduction for corporations. The Fund
does not expect to realize long-term capital gains and therefore
does not expect to distribute any "capital gain dividends" as
described in the Code.
Dividends declared in October, November or December of any
year payable to shareholders of record on a specified date in such
months will be deemed to have been received by the shareholders
and paid by the Fund on December 31 of such year in the event such
dividends are actually paid during January of the following year.
Many states, by statute, judicial decision or administrative
action, have taken the position that dividends of a regulated
investment company such as the Fund that are attributable to
interest on obligations of the U.S. Treasury and certain
U.S. Government agencies and instrumentalities are the functional
equivalent of interest from such obligations and are, therefore,
exempt from state and local income taxes.
The Fund will provide investors annually with information
about the portion of dividends from the Fund derived from
U.S. Treasury and U.S. Government agency obligations. Investors
should be aware of the application of their state and local tax
laws to investments in the Fund.
The foregoing is only a brief summary of some of the
important federal tax considerations generally affecting the Fund
and its shareholders. As indicated above, IRAs receive special tax
treatment. No attempt is made to present a detailed explanation of
the federal, state or local income tax treatment of the Fund or
its shareholders and this discussion is not intended as a
substitute for careful tax planning. Accordingly, potential
investors in the Fund should consult their tax advisors with
specific reference to their own tax situation.
DESCRIPTION OF SHARES AND MISCELLANEOUS
The Trust is a Massachusetts business trust established on
November 25, 1992.
The Trust's Declaration of Trust authorizes the Board of
Trustees to issue an unlimited number of full and fractional
shares of beneficial interest in the Trust and to classify or
reclassify any unissued shares into one or more additional classes
of shares. The Trust is an open-end management investment company,
which offers twelve portfolios: Prime Money Market Fund (Class A,
Class B and Class C), Prime Value Money Market Fund (Class A,
Class B, Class C and Class D), Government Obligations Money Market
Fund (Class A, Class B, Class C and Class D), 100% Government
Obligations Money Market Fund (Class A, Class B and Class C),
Treasury Instruments Money Market Fund II (Class A, Class B and
Class C), 100% Treasury Instruments Money Market Fund (Class A,
Class B and Class C), Tax-Free Money Market Fund (Class A, Class B
and Class C), Municipal Money Market Fund (Class A, Class B,
Class C and Class D), California Municipal Money Market Fund
(Class A, Class B and Class C), New York Municipal Money Market
Fund (Class A, Class B and Class C), Floating Rate U.S. Government
Fund (Class A and Class B) and Short Duration U.S. Government Fund
(Class A and Class B). Shares of the New York Municipal Money
Market Fund are not currently sold to the public. The Declaration
of Trust further authorizes the trustees to classify or reclassify
any class of shares into one or more sub-classes.
THIS PROSPECTUS AND THE STATEMENT OF ADDITIONAL INFORMATION
INCORPORATED HEREIN RELATE PRIMARILY TO THE FUND AND DESCRIBE ONLY
THE INVESTMENT OBJECTIVE AND POLICIES, OPERATIONS, CONTRACTS AND
OTHER MATTERS RELATING TO THE FUND. INVESTORS WISHING TO OBTAIN
SIMILAR INFORMATION REGARDING THE TRUST'S OTHER PORTFOLIOS MAY
OBTAIN SEPARATE PROSPECTUSES DESCRIBING THEM BY CONTACTING LEHMAN
BROTHERS AT 800-368-5556.
The Trust does not presently intend to hold annual meetings
of shareholders except as required by the 1940 Act or other
applicable law. The Trust will call a meeting of shareholders for
the purpose of voting upon the question of removal of a member of
the Board of Trustees upon written request of shareholders owning
at least 10% of the outstanding shares of the Trust entitled to
vote.
Each Fund share represents an equal proportionate interest
in the assets belonging to the Fund. Each share, which has a par
value of $.001, has no preemptive or conversion rights. When
issued for payment as described in this Prospectus, shares will be
fully paid and nonassessable.
Holders of the Fund's shares will vote in the aggregate and
not by class on all matters, except where otherwise required by
law and except that only Class B or Class C shares, as the case
may be, will be entitled to vote on matters submitted to a vote of
shareholders pertaining to the Fund's arrangements with Service
Organizations with respect to the relevant Class. Further,
shareholders of all of the Trust's portfolios will vote in the
aggregate and not by portfolio except as otherwise required by law
or when the Board of Trustees determines that the matter to be
voted upon affects only the interests of the shareholders of a
particular portfolio. (See the Statement of Additional Information
under "Miscellaneous" for examples where the 1940 Act requires
voting by portfolio.) Shareholders of the Trust are entitled to
one vote for each full share held (irrespective of class or
portfolio) and fractional votes for fractional shares held. Voting
rights are not cumulative; and, accordingly, the holders of more
than 50% of the aggregate shares of the Trust may elect all of the
trustees.
For information concerning the redemption of Fund shares and
possible restrictions on their transferability, see "Purchase and
Redemption of Shares."
YIELDS
From time to time the "yields" and "effective yields" for
Class A, Class B and Class C shares may be quoted in
advertisements or in reports to investors. Yield figures are based
on historical earnings and are not intended to indicate future
performance. The "yield" quoted in advertisements for a particular
class or sub-class of shares refers to the income generated by an
investment in such shares over a specified period (such as a
seven-day period) identified in the advertisement. This income is
then "annualized." That is, the amount of income generated by the
investment during that period is assumed to be generated each week
over a 52-week period or one-year and is shown as a percentage of
the investment. The "effective yield" is calculated similarly but,
when annualized, the income earned by an investment in a
particular class or sub-class is assumed to be reinvested. The
"effective yield" will be slightly higher than the "yield" because
of the compounding effect of this assumed reinvestment. Yield
quotations are computed separately for each Class of shares.
The Fund's yields may be compared to those of other mutual
funds with similar objectives, to stock or other relevant indices,
or to rankings prepared by independent services or other financial
or industry publications that monitor the performance of mutual
funds. For example, such data are reported in national financial
publications such as IBC/Donoghue's Money Fund Report, The Wall
Street Journal and The New York Times, reports prepared by Lipper
Analytical Service, Inc. and publications of a local or regional
nature.
The Fund's yield figures for a Class of shares represent
past performance, will fluctuate and should not be considered as
representative of future results. The yield of any investment is
generally a function of portfolio quality and maturity, type of
investment and operating expenses. Since holders of Class B or
Class C shares bear the service fees for services provided by
Service Organizations, the net yield on such shares can be
expected at any given time to be lower than the net yield on
Class A shares. Any fees charged by Service Organizations or other
institutional investors directly to their customers in connection
with investments in Fund shares are not reflected in the Fund's
expenses or yields. The methods used to compute the Fund's yields
are described in more detail in the Statement of Additional
Information. Investors may call 800-238-2560 (Class A shares code:
005; Class B shares code: 105; Class C shares code: 205) to obtain
current yield information.
LEHMAN BROTHERS INSTITUTIONAL FUNDS GROUP TRUST
Prime Money Market Fund
Prime Value Money Market Fund
Government Obligations Money Market Fund
100% Government Obligations Money Market Fund
Treasury Instruments Money Market Fund
Treasury Instruments Money Market Fund II
100% Treasury Instruments Money Market Fund
Municipal Money Market Fund
Tax-Free Money Market Fund
California Municipal Money Market Fund
New York Municipal Money Market Fund
_________
Floating Rate U.S. Government Fund
Short Duration U.S. Government Fund
_________
No person has been authorized to give any information or to make
any representations not contained in this Prospectus, or in the
Fund's Statement of Additional Information incorporated herein by
reference, in connection with the offering made by this Prospectus
and, if given or made, such information or representations must
not be relied upon as having been authorized by the Trust or the
Distributor. This Prospectus does not constitute an offering by
the Trust or by the Distributor in any jurisdiction in which such
offering may not lawfully be made.
_________
TABLE OF CONTENTS
P
a
g
e
Background and Expense Information
2
Investment Objective and Policies
3
Purchase and Redemption of Shares
5
Management of the Fund
7
Dividends
9
Taxes
9
Description of Shares and
Miscellaneous
1
0
Yields
1
1
Treasury Instruments
Money Market Fund
__________
PROSPECTUS
May , 1994
__________
LEHMAN BROTHERS
