PROSPECTUS
100% Government Obligations 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
100% Government Obligations Money Market Fund portfolio (the
"Fund"), one of a family of portfolios of the Trust.
The investment objective of the Fund is to provide current
income with liquidity and security of principal. The Fund invests
in those obligations issued or guaranteed as to principal and
interest by the U.S. government or by agencies or
instrumentalities thereof the interest income from which, under
current law, generally may not be subject to state income tax by
reason of federal law. To the extent permissible by federal and
state law, the Fund is structured to provide shareholders with
income that is exempt or excluded from taxation at the state and
local level. See "Taxes." The Fund is also designed to provide an
economical and convenient means for the investment of short-term
funds held by banks, trust companies, corporations, employee
benefit plans and other institutional investors.
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."
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 1-800-851-3134; for yield
information call 1-800-238-2560 (Class A shares code: 004; Class B
shares code: 104; Class C shares code: 204); for other information
call 1-800-368-5556.
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 31, 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
1-800-368-5556. 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. 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.
___________
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
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 Class C shares bear fees
payable by the Fund (at the rate of .25% and .35% per annum,
respectively) to institutions 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 applicable fee waivers)*
0
.
0
0
%
0
.
0
0
%
0
.
0
0
%
Rule 12b-1 fees
n
o
n
e
.
2
5
%
.
3
5
%
Other Expenses_including
Administration Fees
(net of applicable fee waiversand expense
reimbursements)*
0
.
1
6
%
0
.
1
6
%
0
.
1
6
%
Total Fund Operating
Expenses (after fee waivers and
expensereimbursements)*
.
1
6
%
.
4
1
%
.
5
1
%
_____
_Fn_
* The Expense Summary above has been restated to reflect current
expected fees and the Fund's Investment Adviser's and Administrator's
voluntary fee waivers and expense reimbursement arrangements in effect for
the Fund's fiscal year ending January 31, 1995.
In order to maintain a competitive expense ratio during
1994, the Funds' Investment Adviser and Administrator have
voluntarily agreed to waive fees and reimburse expenses 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 1995 and thereafter, the Investment
Adviser and Administrator intend to continue voluntarily to waive
fees and reimburse expenses to the extent necessary to maintain an
annualized expense ratio at a level no greater than .18% of
average daily net assets. The voluntary fee waiver and expense
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 fee waivers and reimbursement of expenses, the Total Fund
Operating Expenses of Class A, Class B and Class C are expected to
be .36%, .61% and .71%, 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
The following financial highlights for the fiscal year ended
January 31, 1994 is derived from the Fund's Financial Statements
audited by Ernst & Young, independent auditors, whose report
thereon appears in the Trust's Annual Report dated January 31,
1994. This information should be read in conjunction with the
financial statements and notes thereto that also appear in the
Trust's Annual Report, which are incorporated by reference into
the Statement of Additional Information.
P
e
r
i
o
d
E
n
d
e
d
1
/
3
1
/
9
4
*
C
l
a
s
s
A
Net asset value, beginning of period
$
1
.
0
0
Net investment income(1)
0
.
0
3
0
4
Dividends from net investment income
(
0
.
0
3
0
4
)
Net asset value, end of period
$
1
.
0
0
Total return(2)
3
.
0
9
%
Ratios to average net
assets/supplemental data:
Net assets, end of period (in 000's)
$
4
1
,
7
0
9
Ratio of net investment income to
average net assets(3)
3
.
1
1
%
Ratio of operating expenses to average
net assets(3)(4)
0
.
0
6
%
_Fn_
*
The 100% Government Obligations Money Market Fund Class A Shares
commenced operations on February 8, 1993.
(
1
)
Net investment income before waiver of fees by the Investment Adviser,
Administrator, Custodian and Transfer Agent and expenses reimbursed by
the Investment Adviser and Administrator was $0.0220.
(
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 was 0.92%.
INVESTMENT OBJECTIVE AND POLICIES
In General
The Fund's investment objective is to provide current income
with liquidity and security of principal. The Fund, which operates
as a diversified investment company, invests in obligations issued
or guaranteed as to principal and interest by the U.S. government
or by agencies or instrumentalities thereof the interest income
from which, under current law, generally may not be subject to
state income tax by reason of federal law, including securities
issued by the U.S. Treasury and by certain agencies or
instrumentalities such as the Federal Home Loan Bank, Federal Farm
Credit Banks Funding Corp. and the Student Loan Marketing
Association. Investors in a particular state that imposes an
income tax should determine through consultation with their own
tax advisors whether such interest income, when distributed by the
Fund, will be considered by the state to have retained exempt
status, and whether the Fund's capital gain and other income, if
any, when distributed will be subject to the state's income tax.
See "Taxes." Due to state income tax considerations, the Fund will
not enter into repurchase agreements.
The Fund invests only in securities that are purchased with
and payable in U.S. dollars (i.e., U.S. dollar denominated
securities) and that 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, its
agencies and instrumentalities 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. The Fund may from time to time engage in portfolio
trading for liquidity purposes, in order to enhance its yield or
if otherwise deemed advisable. In selling portfolio securities
prior to maturity, the Fund may realize a price higher or lower
than that paid to acquire any given security, depending upon
whether interest rates have decreased or increased since its
acquisition.
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.
There can be no assurance that the Fund will achieve its
investment objective.
Investment Limitations
The Fund's investment objective and the policies described
above may be changed by the Trust's Board of Trustees without a
vote of shareholders. If there is a change in the investment
objective, investors should consider whether the Fund remains an
appropriate investment in light of their then current financial
position and needs. The Fund's investment limitations summarized
below may not be changed without the affirmative vote of the
holders of a 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: 1.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. 2.Make loans except that the Fund
may purchase or hold debt obligations in accordance with its
investment objective and policies.
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 1-800-851-3134. Orders received prior to 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 1:00
P.M., Eastern time, will be executed at 1:00 P.M., Eastern time,
if payment has been received by Boston Safe by 1:00 P.M., Eastern
time, and will be executed at 4:00 P.M. if payment has been
received by 4:00 P.M. Orders received after 1:00 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 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 advisers 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 by
telephone at 1-800-851-3134. Payment for redeemed shares for which
a redemption order is received by Lehman Brothers prior to
1:00 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 after 1:00 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 an investor
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 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 60 days' prior
written notice to the investor. Any such redemption shall be
effected at the net asset value per share next determined after
the redemption order is entered. If during the 60-day period the
investor 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, 1:00 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
the customary national business holidays of New Year's Day, Martin
Luther King, Jr.'s Birthday (observed), Presidents' Day
(Washington's Birthday), Good Friday, Memorial Day, Independence
Day, 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.
DIVIDENDS
Investors 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 share, 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 investors may elect to have their dividends
reinvested in additional full and fractional shares of the same
class with respect to which such dividends are declared 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 as the Fund's Distributor at 260 Franklin Street, 15th
Floor, Boston, Massachusetts 02110-9624 and will become effective
after its receipt by the Distributor with respect to dividends
paid.
The Shareholder Services Group, Inc. ("TSSG"), as Transfer
Agent, will send each investor or its authorized representative an
annual statement designating the amount of any dividends and
capital gains distributions, if any, made during each year and
their federal tax qualification.
TAXES
The Fund qualified in its last taxable year and intends to
qualify in future years 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 investors.
Qualification as a regulated investment company under the
Code for a taxable year requires, among other things, that the
Fund distribute to its investors 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 investors 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 contemplate payment of any "capital gain dividends" as
described in the Code.
Dividends declared in October, November or December of any
year payable to investors of record on a specified date in such
months will be deemed to have been received by the investors 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.
To the extent permissible by federal and state law, the Fund
is structured to provide investors with income that is exempt or
excluded from taxation at the state and local level. Substantially
all dividends paid to investors residing in certain states will be
exempt or excluded from state income tax. 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. Investors should be aware of the application of
their state and local tax laws to investments in the Fund.
The foregoing discussion is only a brief summary of some of
the important federal tax considerations generally affecting the
Fund and its investors. No attempt is made to present a detailed
explanation of the federal, state or local income tax treatment of
the Fund or its investors and this discussion is not intended as a
substitute for careful tax planning. Accordingly, potential
investors in the Fund should consult their tax advisers with
specific reference to their own tax situation.
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 Distributor, 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 is a wholly-owned subsidiary of Lehman Brothers
Holdings, Inc. ("Holdings"). Prior to May 31, 1994, all of the
issued and outstanding common stock (representing 92% of the
voting stock) of Holdings was held by American Express Company.
On May 31, 1994, American Express distributed to holders of common
stock of American Express all outstanding shares of common stock
of Holdings. As of May 31, 1994, Nippon Life Insurance Company
owned 11.2% of the outstanding voting securities of Holdings.
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 Holdings. LBGAM, together with other Lehman Brother
investment advisory affiliates, serves as Investment Adviser to
investment companies and private accounts and has assets under
management of approximately $15 billion as of March 31, 1994.
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 investment performance. For its services LBGAM is entitled
to receive a monthly fee from 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 no advisory fees from the Fund.
Administrator and Transfer Agent_The Shareholder Service Group,
Inc.
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
Financial institutions, such as banks, savings and loan
associations and other such 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 Fund_Service Organizations," may 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;
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 financial institutions that have not entered
into servicing agreements with the Fund in connection with their
investments. A salesperson and any 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 investors, 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 waive fees 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 investors
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.
YIELDS
From time to time the "yields", "effective yields" and
"tax-equivalent 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 or one-year period 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. The "tax-equivalent yield" demonstrates the level of
taxable yield necessary to produce an after-tax yield equivalent
to the Fund's tax-free yield for each Class of shares. It is
calculated by increasing the yield (calculated as above) by the
amount necessary to reflect the payment of federal taxes at a
stated rate. The "tax-equivalent yield" will always be higher than
the "yield." 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 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 1-800-238-2560 (Class A shares
code: 004; Class B shares code: 104; Class C shares code: 204) to
obtain current yield information.
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 thirteen 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 (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 (Premier and Select Shares) and
Short Duration U.S. Government Fund (Premier and Select Shares).
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.
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 on 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 non-assessable.
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."
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 1-800-368-5556. 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 its
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
Financial Highlights
3
Investment Objective and Policies
3
Purchase and Redemption of Shares
5
Dividends
7
Taxes
7
Management of the Fund
8
Yields
1
0
Description of Shares
1
1
100% Government
Obligations
Money Market Fund
PROSPECTUS
May 31, 1994
LEHMAN BROTHERS
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 1-800-368-5556.
May 31, 1994
