As filed with the Securities and Exchange Commission on August 16, 1995.
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
(Name of Registrant as Specified in Its Charter)
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
/X/ $125 per Rule 20a-1(c) under the Investment Company Act of
1940. Paid upon filing of the Preliminary Proxy Material on July
28, 1995.
/ / $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
<PAGE>
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 26, 1995
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of Pioneer Winthrop Real Estate Investment Fund, a Delaware business
trust (the "Fund"), will be held at the offices of Hale and Dorr, counsel to the
Fund, at 60 State Street, 26th Floor, Boston, Massachusetts 02109, at 2:00 p.m.
(Boston time) on Tuesday, September 26, 1995. The purpose of the Meeting is to
consider and act upon the following proposals:
1. To approve the terms of a new Management Contract with Pioneering
Management Corporation and to approve the payment to Pioneering
Management Corporation of fees under an Interim Management Contract;
2. To ratify the selection of Arthur Andersen LLP as the Fund's independent
public accountants for the fiscal year ending December 31, 1995; and
3. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
YOUR BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE IN FAVOR OF ALL PROPOSALS
Shareholders of record as of the close of business on August 4, 1995 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
By Order of the Board of Trustees,
Joseph P. Barri, Secretary
August 14, 1995
Boston, Massachusetts
-------------------
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED FORM OF PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY STILL VOTE IN PERSON IF YOU
ATTEND THE MEETING.
0895-2690
<PAGE>
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
1-800-225-6292
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 26, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Pioneer Winthrop Real Estate Investment
Fund, a Delaware business trust (the "Fund"). The proxies will be used at the
Special Meeting of Shareholders (the "Meeting") of the Fund to be held on
Tuesday, September 26, 1995 at 2:00 p.m. (Boston time). The Meeting will be held
at the offices of Hale and Dorr, counsel to the Fund, at 60 State Street, 26th
Floor, Boston, Massachusetts 02109.
The Board of Trustees has fixed the close of business on August 4, 1995 as
the record date for the determination of shareholders of the Fund entitled to
notice of and to vote at the Meeting. On the record date, 2,306,024.503 shares
of beneficial interest of the Fund were outstanding. No person within the
knowledge of management of the Fund beneficially owned more than 5% of the
Fund's shares of beneficial interest outstanding as of June 30, 1995, except
Merrill Lynch Pierce Fenner & Smith, Inc., 4800 Deer Lake Drive East,
Jacksonville, Florida, which owned 216,085 shares (9.35% of the Fund's
outstanding shares).
This Proxy Statement, the attached Notice and the enclosed proxy card are
being mailed to shareholders of the Fund on or about August 14, 1995. THE FUND'S
ANNUAL REPORT FOR ITS FISCAL PERIOD ENDED DECEMBER 31, 1994 AND SUBSEQUENT
SEMI-ANNUAL REPORT MAY BE OBTAINED FREE OF CHARGE BY WRITING TO THE FUND AT ITS
EXECUTIVE OFFICES, 60 STATE STREET, BOSTON, MASSACHUSETTS 02109 OR BY CALLING
1-800-225-6292. Effective September 1, 1995, the Fund will change its name to
Pioneer Real Estate Shares.
2
<PAGE>
PROPOSAL 1
APPROVAL OF THE TERMS OF A NEW
MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT
CORPORATION AND APPROVAL OF THE
PAYMENT TO PIONEERING MANAGEMENT CORPORATION OF
FEES UNDER AN INTERIM MANAGEMENT CONTRACT
THE FUND'S ADVISORY ARRANGEMENTS
Prior to July 17, 1995, Pioneer Winthrop Advisers ("PWA") served as the
Fund's investment manager pursuant to a management contract dated April 28, 1995
(the "PWA Management Contract"), and Winthrop Advisors Limited Partnership
("WALP") and Pioneering Management Corporation ("PMC") served as the Fund's
co-investment subadvisers pursuant to separate investment subadvisory contracts
dated April 28, 1995 (the "WALP Subadvisory Agreement" and the "PMC Subadvisory
Agreement," respectively). The PWA Management Contract and the WALP and the PMC
Subadvisory Agreements are referred to in this Proxy Statement as the "Prior
Advisory Agreements."
On July 17, 1995, the PWA Management Agreement and the WALP Subadvisory
Agreement terminated by operation of law as a result of the acquisition (the
"Acquisition") by Apollo Real Estate Advisors, L.P. ("Apollo") of W.L. Realty,
L.P. ("Realty LP"). Because Realty LP has an indirect controlling interest in
WALP and PWA, the Acquisition resulted in an ownership change in PWA and WALP.
Under the relevant provisions of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), the ownership change in PWA and WALP caused an
"assignment" of the PWA Management Contract and the WALP Subadvisory Agreement
resulting in their automatic termination. Although the Acquisition did not
affect the ownership or control of PMC in any manner, the PMC Subadvisory
Agreement provided that it terminate automatically in the event that the PWA
Management Agreement terminated. As such, the PMC Subadvisory Agreement also
terminated on July 17, 1995.
In anticipation of the Acquisition and the resulting termination of the
Prior Advisory Agreements, the Board of Trustees of the Fund, including a
majority of the Trustees who are not "interested persons" of the Fund or PMC
(the "Independent Trustees"), approved an interim management contract (the
"Interim Management Contract") between the Fund and PMC. The Interim Management
Contract became effective on July 17, 1995 (the closing date of the Acquisition)
and PMC has provided investment advisory and management services to the Fund
under the Interim Management Contract since that date. The Interim Management
Contract expires on October 30, 1995.
The Fund and PMC have received an order from the Securities and Exchange
Commission (the "Commission") permitting PMC to serve, without shareholder
approval, as the Fund's investment manager pursuant to the Interim Management
Contract until October 30, 1995. Pursuant to the terms of such order, the fees
earned by PMC under the Interim Management Contract will be maintained in an
interest-bearing escrow account and the amounts in such account will be paid to
PMC only upon approval of the
3
<PAGE>
Fund's shareholders of this Proposal or, in the absence of such approval, will
be remitted to the Fund. The Trustees, including a majority of the Independent
Trustees, voted to recommend to shareholders of the Fund that they approve the
payment to PMC of the fees under the Interim Management Contract.
At the same meeting, the Trustees, including a majority of the Independent
Trustees, also voted to recommend to shareholders of the Fund that they approve
a management contract between the Fund and PMC (the "Proposed Management
Contract") pursuant to which PMC will serve as the Fund's sole investment
adviser after the expiration of the Interim Management Contract.
THE APPROVAL OF THIS PROPOSAL BY THE SHAREHOLDERS OF THE FUND WILL NOT
RESULT IN AN INCREASE IN THE RATE OF MANAGEMENT FEE PAYABLE BY THE FUND.
INFORMATION REGARDING PIONEERING MANAGEMENT CORPORATION (PMC)
As described above, PMC currently serves as the Fund's investment manager
pursuant to the Interim Management Contract and, if approved by shareholders,
will continue to serve as the Fund's investment manager pursuant to the Proposed
Management Contract upon the expiration of the Interim Management Contract. PMC,
a registered adviser under the Investment Advisers Act of 1940, serves as the
investment manager for each of the mutual funds in the Pioneer complex of mutual
funds. PMC also manages Pioneer Interest Shares, Inc. (a closed-end investment
company) and advises certain other institutional accounts. PMC is one of the
oldest money managers in the United States and, as of June 30, 1995, managed in
excess of $12 billion in net assets worldwide, for more than 900,000 investors.
PMC is a wholly owned subsidiary of The Pioneer Group, Inc. ("PGI"), a Delaware
corporation with publicly traded shares. PMC's and PGI's executive offices are
located at 60 State Street, Boston, Massachusetts 02109.
TERMS OF THE INTERIM AND PROPOSED MANAGEMENT CONTRACTS
The material terms of the Interim and Proposed Management Contracts are
identical to those of the PWA Management Contract, except for the identities of
parties and the dates of execution and termination. ACCORDINGLY, THE MANAGEMENT
FEE UNDER THE INTERIM AND PROPOSED MANAGEMENT CONTRACTS IS THE SAME AS THE
MANAGEMENT FEE UNDER THE PWA MANAGEMENT CONTRACT. The following description of
the terms of the Interim and Proposed Management Contracts is qualified in its
entirety by reference to the copy of the Proposed Management Contract attached
to this Proxy Statement as EXHIBIT A.
Investment Advisory and Management Services. Pursuant to the terms of the
Interim and Proposed Management Contracts, PMC serves as the sole investment
adviser to the Fund and is responsible for the overall management of the Fund's
business affairs, subject only to the authority of the Fund's Board of Trustees.
PMC also makes all portfolio investment decisions for the Fund.
Mr. Robert Benson, a Senior Vice President of PMC, has been responsible for
the Fund's day-to-day portfolio decisions since the Fund's inception. Mr. Benson
continues to be responsible for the Fund's day-to-day portfolio decisions after
the Acquisition. PMC
4
<PAGE>
has hired a former employee of WALP to continue to provide to the Fund after the
Acquisition the same level of real estate securities advice that he previously
provided through WALP. In addition, PMC at its own expense has contracted on a
temporary basis with an affiliate of WALP for consulting advice regarding real
estate projects in which issuers of the Fund's portfolio securities have an
interest.
The Fund's portfolio is now overseen by an Equity Committee, which consists
of PMC's most senior equity professionals, and a Portfolio Management Committee,
which consists of PMC's domestic equity portfolio managers. Both committees are
chaired by Mr. David Tripple, PMC's President and Chief Investment Officer and
Executive Vice President of the Fund.
Management Fees and Expense Limitation. AS INDICATED ABOVE, THE MANAGEMENT
FEE UNDER THE INTERIM AND PROPOSED MANAGEMENT CONTRACTS IS THE SAME AS THE
MANAGEMENT FEE UNDER THE PWA MANAGEMENT CONTRACT.
As compensation for its investment advisory services, PMC earns a
management fee under the Interim Management Contract at a rate equal to 1.00%
per annum of the Fund's average daily net assets. This fee is computed daily and
payable monthly. As indicated above, the fee under the Interim Management
Contract will only be paid to PMC upon approval by shareholders of this
Proposal. The management fee under the Proposed Management Contract is payable
at the same rate as the fee under the Interim Management Contract. The
management fee, which is greater than those paid by most mutual funds, reflects
the added complexity and additional expenses associated with analyzing real
estate investments and related securities and is comparable to those of other
mutual funds with similar investment objectives.
PMC has voluntarily agreed to continue on a temporary basis the expense
limitation previously agreed to by PWA. Under this expense limitation, PMC will
not impose a portion of its management fee and will make other arrangements, if
necessary, to limit the total operating expenses of the Fund to 1.75% of its
average daily net assets. Although this arrangement may be revised or
discontinued by PMC at its discretion at any time, PMC has no current intention
to do so.
During the period from June 30, 1994 through December 31, 1994, the Fund
paid management fees to PWA under the PWA Management Contract in the amount of
$68,126, equal on an annualized basis to 0.48% of the Fund's average daily net
assets. In the absence of PWA's voluntary expense limitation, the Fund would
have paid management fees to PWA under the PWA Management Contract in the amount
of $141,284 for the same period. During the period from June 30, 1994 through
December 30, 1994, PWA paid subadvisory fees to each of WALP and PMC in the
amount of $12,541, equal on an annualized basis to 0.09% of the Fund's average
daily net assets. The subadvisory fees payable to WALP and PMC were reduced
proportionally to the extent that the management fee was reduced under PWA's
voluntary expense limitation. In the absence of PWA's voluntary expense
limitation, PWA would have paid subadvisory fees to each of WALP and PMC under
the WALP and PMC Subadvisory Agreements,
5
<PAGE>
respectively, in the amount of $26,010 for the same period. As of December 31,
1994, the Fund's net assets were approximately $28 million.
Expenses. Under the Interim and Proposed Management Contracts, PMC pays
all expenses related to its services for the Fund with the exception of
bookkeeping, custodial, transfer agency, auditing, legal and certain other
specified expenses, which are paid by the Fund. The Fund also pays all brokerage
commissions and any taxes or other charges in connection with its portfolio
transactions.
Approval and Termination Provisions. The Interim and Proposed Management
Contracts were approved by the Board of Trustees, including a majority of the
Independent Trustees, of the Fund on June 6, 1995. The Interim Management
Contract expires on October 30, 1995. If this Proposal is approved by
shareholders of the Fund, the Proposed Management Contract will remain in effect
until May 31, 1997 and from year to year thereafter, provided that its
continuance is approved at least annually by the vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval, and either by vote of a majority of the Fund's Trustees
or a "majority of the outstanding voting securities" (as defined below) of the
Fund. The Interim and Proposed Management Contracts may be terminated without
penalty on 60 days' written notice by the Fund's Board of Trustees, by vote of
holders of a majority of the Fund's shares or by PMC.
Standard of Care. The Interim and Proposed Management Contracts provide
that, in the absence of willful misfeasance, bad faith or gross negligence on
the part of PMC, or of the reckless disregard of its obligations and duties, PMC
will not be liable for any act or omission in the course of, or connected with,
rendering services under such Contracts. This "standard of care," which is
identical to that under the PWA Management Contract, is consistent with the
Investment Company Act and common practice in the mutual fund industry.
BOARD OF TRUSTEES' EVALUATION AND RECOMMENDATION
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE FUND
APPROVE THE TERMS OF THE PROPOSED MANAGEMENT CONTRACT AND APPROVE THE PAYMENT OF
FEES UNDER THE INTERIM MANAGEMENT CONTRACT.
The Board of Trustees, including a majority of the Independent Trustees,
determined that the terms of the Proposed Management Contract are fair and
reasonable and that approval of the terms of the Proposed Management Contract on
behalf of the Fund is in the best interests of the Fund and its shareholders.
The Board of Trustees, including a majority of the Independent Trustees, also
determined that the payment of fees under the Interim Management Contract is
fair and reasonable and recommends that shareholders approve the payment of such
fees. In making these determinations, the Trustees considered the following: (a)
the identical material terms, including the management fee rate, under both the
Proposed Management Contract and the PWA Management Contract; (b) the
substantially similar nature and quality of services previously provided by PMC
under the PMC Subadvisory Agreement to those currently provided by PMC
6
<PAGE>
under the Interim Management Contract; (c) PMC's hiring of a former employee of
WALP to continue to provide to the Fund after the Acquisition the same level of
real estate securities advice that he previously provided through WALP; (d)
PMC's contracting with an affiliate of WALP for consulting advice regarding real
estate projects in which issuers of the Fund's portfolio securities have an
interest; and (e) the reasonableness of PMC's compensation and profits and the
financial and managerial stability of PMC and its parent company.
In the event that this Proposal is not approved by the shareholders of the
Fund, the Interim Advisory Agreement will terminate on October 30, 1995, the
fees payable thereunder will be remitted to the Fund, the Proposed Management
Contract will not become effective and no person will then serve as the
investment manager to the Fund. In such event, the Trustees will consider what
further action should be taken.
ADDITIONAL INFORMATION PERTAINING TO PMC
For additional information concerning the management, ownership structure,
affiliations, brokerage policies and certain other matters pertaining to PMC,
see the Appendix.
VOTE REQUIRED
Approval of this Proposal requires the affirmative vote of a "majority of
the outstanding voting securities" of the Fund, which for this purpose means the
affirmative vote of the lesser of (i) 67% or more of the outstanding shares of
the Fund present at the Meeting and entitled to vote, if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by
proxy or (ii) more than 50% of the outstanding shares of the Fund. Each Fund
share is entitled to one vote.
PROPOSAL 2
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has served as the Fund's independent public
accountants since the Fund's commencement of operations on October 25, 1993. The
Board of Trustees, including a majority of the Independent Trustees, has
selected Arthur Andersen LLP as the Fund's independent public accountants for
the fiscal year ending December 31, 1995. Audit services during the fiscal year
ending December 31, 1995 will consist of examinations of the Fund's financial
statements and reviews of the Fund's filings with the Commission.
A representative of Arthur Andersen LLP is expected to be available at the
Meeting to make a statement if he or she desires to do so and to respond to
appropriate questions. Arthur Andersen LLP also serves as the independent public
accountants for PGI and PMC.
7
<PAGE>
BOARD OF TRUSTEES' EVALUATION AND RECOMMENDATION
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND VOTE IN
FAVOR OF THE RATIFICATION OF ARTHUR ANDERSEN LLP AS THE FUND'S INDEPENDENT
PUBLIC ACCOUNTANTS.
REQUIRED VOTE
Approval of this Proposal requires the affirmative vote of a majority of
the votes present and entitled to vote at the Meeting.
OTHER MATTERS
The Fund's management knows of no business to be brought before the Meeting
except as described above. However, if any other matters properly come before
the meeting, the persons named in the enclosed form of proxy intend to vote on
such matters in accordance with their best judgment. If shareholders desire
additional information about the matters proposed for action, the Fund's
management will be pleased to hear from them and to provide further information.
PROXIES, QUORUM AND VOTING AT THE MEETING
Any person giving a proxy has the power to revoke it any time prior to its
exercise by executing a superseding proxy or by submitting a written notice of
revocation to the Secretary of the Fund. In addition, although mere attendance
at the Meeting will not revoke a proxy, a shareholder present at the Meeting may
withdraw his or her proxy and vote in person. All properly executed and
unrevoked proxies received in time for the Meeting will be voted in accordance
with the instructions contained in the proxies. If no instruction is given, the
persons named as proxies will vote the shares represented thereby in favor of
the matters set forth in the attached Notice and will use their best judgment in
connection with the transaction of such other business as may properly come
before the Meeting or any adjournment thereof.
In the event that, at the time any session of the Meeting is called to
order, a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the Meeting
to a later date. In the event that a quorum is present but sufficient votes in
favor of either of the Proposals have not been received, the persons named as
proxies will vote those proxies which they are entitled to vote in favor of the
relevant Proposal for such an adjournment and will vote those proxies required
to be voted against the Proposal against any such adjournment. A shareholder
vote may be taken on either of the Proposals in the Proxy Statement prior to
such adjournment if sufficient votes for its approval have been received and it
is otherwise appropriate.
Shares of the Fund (including shares which abstain or do not vote with
respect to either of the Proposals presented for shareholder approval) will be
counted for purposes of determining whether a quorum is present at the Meeting.
Abstentions from voting will be treated as shares that are present and entitled
to vote for purposes of determining the
8
<PAGE>
number of shares that are present and entitled to vote with respect to a
Proposal, but will not be counted as a vote in favor of that Proposal.
Accordingly, an abstention from voting has the same effect as a vote against a
Proposal.
Adoption by the shareholders of the Fund of Proposal 1 requires the
affirmative vote of the lesser of (i) 67% or more of outstanding shares of the
Fund present at the Meeting and entitled to vote, if the holders of more than
50% of the outstanding shares of the Fund are present or represented by proxy or
(ii) more than 50% of the Fund's outstanding shares. If a broker or nominee
holding shares in "street name" indicates on the proxy that it does not have
discretionary authority to vote as to any Proposal, those shares will not be
considered as present and entitled to vote as to that Proposal. Accordingly, a
"broker non-vote" has no effect on the voting in determining whether Proposal 1
has been adopted pursuant to item (i) above, provided that the holders of more
than 50% of the outstanding shares (excluding the "broker non-votes") of the
Fund are present or represented by proxy. However, with respect to determining
whether Proposal 1 has been adopted pursuant to item (ii) above, because shares
represented by a "broker non-vote" are considered outstanding shares, a "broker
non-vote" has the same effect as a vote against such Proposal.
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual meetings of shareholders and does
not currently intend to hold such a meeting in 1996. Instead, meetings will be
held only when and if required. Any shareholders desiring to present a proposal
for consideration at the next meeting for shareholders of the Fund must submit
such proposal in writing so that it is received by the Fund at 60 State Street,
Boston, Massachusetts 02109 within a reasonable time before any such meeting.
EXPENSES AND METHODS OF SOLICITATION
The costs of the Meeting, including the solicitation of proxies will be
paid by PMC. PMC may, at its expense, have one or more of its officers,
representatives or compensated third-party agents aid in the solicitation of
proxies by personal interview or telephone and telegraph and may request
brokerage houses and other custodians, nominees and fiduciaries to forward proxy
soliciting material to beneficial owners of the shares held of record by such
persons. Persons holding shares as nominees will be reimbursed by PMC, upon
request, for the reasonable expenses of mailing soliciting material to the
principals of the accounts.
PIONEER WINTHROP REAL ESTATE INVESTMENT FUND
August 14, 1995
9
<PAGE>
APPENDIX
ADDITIONAL INFORMATION PERTAINING TO PMC
<TABLE>
Directors. The following table provides information with respect to the
Directors of PMC:
<CAPTION>
NAME, AGE AND ADDRESS PRINCIPAL OCCUPATION(S)
--------------------------- ----------------------------------------------------
<S> <C>
JOHN F. COGAN, JR., 69 President and a Director of PGI; Chairman and a
60 State Street Director of PMC, Pioneer Funds Distributor, Inc.
Boston, MA 02109 ("PFD") and Teberebie Goldfields Limited; Chairman,
a Managing Partner and Chief Executive Officer of
PWA; Director of Pioneering Services Corporation
("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and
Director of Pioneer Plans Corporation ("PPC"),
Pioneer Investment Corporation ("PIC"), Pioneer
Metals and Technology, Inc. ("PMT"), Pioneer
International Corporation ("P. Intl."), Luscinia,
Inc., Pioneer First Russia, Inc. ("First Russia"),
Pioneer Omega, Inc. ("Omega") and Theta Enterprises,
Inc.; Chairman, President and a Director of Pioneer
Goldfields Limited ("PGL"); Chairman, President and
Trustee of each of the mutual funds in the Pioneer
Complex of Funds; Chairman, President and a Director
of Pioneer Interest Shares, Inc. ("Interest Shares);
Chairman of the Supervisory Board of Pioneer Fonds
Marketing GmbH ("Pioneer GmbH"); Member of the
Supervisory Board of Pioneer First Polish Trust Fund
Joint Stock Company ("PFPT"); and Chairman and
Partner, Hale and Dorr (Counsel to the Fund).
DAVID D. TRIPPLE, 51 Executive Vice President and Director of PGI;
60 State Street Executive Vice President and a Managing Partner of
Boston, MA 02109 PWA; President, Chief Investment Officer and a
Director of PMC; Director of PFD, PCC, Pioneer SBIC
Corp., P. Intl., PIC and First Russia; Member of the
Supervisory Board of PFPT; Director and Vice
President of Omega; Executive Vice President and
Trustee of each of the mutual funds in the Pioneer
Complex of Funds; Executive Vice President and
Director of Interest Shares.
ROBERT L. BUTLER, 54 Executive Vice President and a Director of PGI;
60 State Street President and a Director of PFD; Director of PSC,
Boston, MA 02109 PIC, and P. Intl.; Vice Chairman of Pioneer GmbH;
and a Member of the Supervisory Board of PFPT.
PHILIP L. CARRET, 98 Chairman emeritus of Carret & Company, Inc., a
Carret & Company broker-dealer and investment adviser; a Director of
560 Lexington Avenue PGI; and Trustee emeritus of certain funds in the
New York, NY 10022 Pioneer Family of Mutual Funds.
</TABLE>
Ownership of PMC. PMC is a wholly-owned subsidiary of PGI. As of June 30,
1995, Mr. Cogan beneficially owned 3,656,841 shares (14.74%) of the outstanding
Common Stock of PGI. Mr. Cogan's beneficial holdings included 1,637,726 shares
held in trusts with respect to which Mr. Cogan may be deemed to be a beneficial
owner by reason of his interest as a beneficiary and/or position as a trustee
and shares which Mr. Cogan has the right to acquire under outstanding options
within sixty days of June 30, 1995. At such date, Messrs. Butler, Carret and
Tripple, PMC's other directors, each
10
<PAGE>
owned beneficially less than 2% of the outstanding Common Stock of PGI. As of
June 30, 1995, officers and directors of PMC and Trustees and officers of the
Fund beneficially owned an aggregate of 4,940,866 shares of Common Stock of PGI,
approximately 20% of the outstanding Common Stock of PGI. During PGI's fiscal
year ended December 31, 1994, there were no transactions in PGI Common Stock by
any officer, Trustee of the Fund or Director of PMC in an amount equal to or
exceeding 1% of the outstanding Common Stock of PGI.
Services Provided to the Fund By Affiliates of PMC. Pioneering Services
Corporation, a wholly owned subsidiary of PGI ("PSC"), serves as the Fund's
transfer agent and shareholder servicing agent. Under the terms of its contract
with the Fund, PSC's duties include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii) distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii) maintaining account records
and responding to routine shareholder inquiries. For the period from June 30,
1994 through December 31, 1994, the Fund paid PSC $32,932 in fees for these
services.
Pioneer Funds Distributor, Inc., an indirect wholly owned subsidiary of PGI
("PFD"), serves as the Fund's principal underwriter. During the period from June
30, 1994 through December 31, 1994, the Fund paid PFD $35,321 in distribution
fees pursuant to the Fund's Distribution (Rule 12b-1) Plan (the "Plan"). Such
fees are paid to PFD in reimbursement of expenses related to servicing of
shareholder accounts and to compensating broker/dealers and sales personnel. For
the same period, PFD earned net underwriting commission in connection with its
offering of shares of the Fund in the amount of $27,497.
Similar Fund Managed By PMC. PMC serves as the investment manager to the
Real Estate Growth Portfolio of Pioneer Variable Contracts Trust which has an
investment objective similar to that of the Fund. Shares of Real Estate Growth
Portfolio currently may be purchased only by certain insurance company separate
accounts. As of June 30, 1995, Real Estate Growth Portfolio had $177,000 in net
assets. The management fee payable by Real Estate Growth Portfolio is payable
quarterly at an annual rate equal to 1.00% of Real Estate Growth Portfolio's
average daily net assets. PMC has voluntarily agreed not impose a portion of its
management fee and to make other arrangements, if necessary, to limit the
operating expenses of the Real Estate Growth Portfolio to 1.75% of its average
daily net assets. This agreement may be revised or discontinued by PMC at its
discretion at any time.
Portfolio Transactions. All orders for the purchase or sale of portfolio
securities are placed on behalf of the Fund by PMC pursuant to authority
contained in the Interim and Proposed Management Contracts. In selecting brokers
or dealers, PMC considers factors relating to execution on the best overall
terms available, including, but not limited to, the size and type of the
transaction; the nature and character of the markets of the security to be
purchased or sold; the execution efficiency, settlement capability and financial
condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads.
11
<PAGE>
PMC may select broker-dealers which provide brokerage and/or research
services to the Fund and/or other investment companies or accounts managed by
PMC. Such services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the availability
of securities or the purchasers or sellers of securities; furnishing analysis
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). In addition, if PMC determines in good faith that the amount of
commissions charged by a broker is reasonable in relation to the value of the
brokerage and research services provided by such broker, the Fund may pay
commissions to such broker in an amount greater than the amount another firm may
charge. This information might be useful to PMC in providing services to the
Fund as well as to other investment companies or accounts managed by PMC,
although not all of such research may be useful to the Fund. Conversely, such
information provided to PMC by brokers and dealers through whom other clients of
PMC effect securities transactions might be useful to PMC in providing services
to the Fund. The receipt of such research is not expected to reduce PMC's normal
independent research activities; however, it enables PMC to avoid the additional
expense which might otherwise be incurred if it were to attempt to develop
comparable information through its own staff.
12
<PAGE>
EXHIBIT A
MANAGEMENT CONTRACT
THIS AGREEMENT dated this day of , 1995 between Pioneer
Real Estate Shares, a Delaware business trust (the "Trust"), and Pioneering
Management Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended,
WHEREAS, the Trust currently issues a single series of shares representing
interests in one portfolio (the "Portfolio"),
WHEREAS, the parties hereto deem it mutually advantageous that the Manager
should be engaged, subject to the supervision of the Trust's Board of Trustees
and officers, to manage the Portfolio,
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Portfolio with investment
research, advice and supervision and will furnish continuously an investment
program for the Portfolio consistent with the investment objectives and policies
of the Portfolio. The Manager will determine from time to time what securities
shall be purchased for the Portfolio, what securities shall be held or sold by
the Portfolio and what portion of the Portfolio's assets shall be held
uninvested as cash, subject always to the provisions of the Trust's Declaration
of Trust, By-Laws and its registration statements under the 1940 Act and under
the Securities Act of 1933 covering the Trust's shares, as filed with the
Securities and Exchange Commission, and to the investment objectives, policies
and restrictions of the Portfolio, as each of the same shall be from time to
time in effect, and subject, further, to such policies and instructions as the
Board of Trustees of the Trust may from time to time establish. To carry out
such determinations, the Manager will exercise full discretion and act for the
Portfolio in the same manner and with the same force and effect as the Trust
itself might or could do with respect to purchases, sales or other transactions,
as well as with respect to all other things necessary or incidental to the
furtherance or conduct of such purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct of
the business of the Portfolio and upon the Trust's request, furnish to the
Portfolio research, statistical and advisory reports upon the industries,
businesses, corporations or securities as to which such requests shall be made,
whether or not the Portfolio shall at the
13
<PAGE>
time have any investment in such industries, businesses, corporations or
securities. The Manager will use its best efforts in the preparation of such
reports and will endeavor to consult the persons and sources believed by it to
have information available with respect to such industries, businesses,
corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Portfolio's securities transactions required by sub-paragraphs (b)(5), (6), (9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust with respect to the Portfolio) and preserve such records for the periods
prescribed therefor by Rule 31a-2 of the 1940 Act. The Manager will also provide
to the Board of Trustees such periodic and special reports as the Board may
reasonably request.
2. The Manager recognizes that the Trust may from time to time create
additional portfolios of the Trust, that this agreement relates only to the
management of the assets of the single existing Portfolio of the Trust, and that
the management of the assets of any additional portfolio of the Trust will be
subject to one or more separate investment management agreements.
3. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the affairs
and investments with respect to the Portfolio, and shall arrange, if desired by
the Trust, for members of the Manager's organization to serve as officers or
agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or interested
persons of, the Manager and all officers of the Trust as such; and (ii) all
expenses not hereinafter specifically assumed by the Trust or the Portfolio
where such expenses are incurred by the Manager or by the Trust or the Portfolio
in connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Portfolio.
(c) The Trust shall assume and shall pay: (i) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including, to
the extent such services are performed by personnel of the Manager or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust with respect to the Portfolio; (iv) issue
and transfer taxes, chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Trust to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission, state or blue
sky securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings
14
<PAGE>
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies; (viii)
charges and expenses of legal counsel to the Trust and the Trustees; (ix)
distribution fees paid by the Trust in accordance with Rule 12b-1 promulgated by
the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of
the Trust who are not affiliated with or interested persons of the Manager, the
Trust (other than as Trustees), The Pioneer Group, Inc. or Pioneer Funds
Distributor, Inc.; (xi) the cost of preparing and printing share certificates;
(xii) interest on borrowed money, if any; and (xii) organizational expenses of
the Trust or Portfolio.
(d) In addition to the expenses described in Section 3(c) above, the Trust
shall pay all brokers' and underwriting commissions chargeable to the Portfolio
in connection with securities transactions to which the Portfolio is a party.
4. It is understood that the Manager may employ one or more sub-investment
advisers (each a "Subadviser") under written agreements with each such
Subadviser, provided that any such agreement is first approved by the vote of a
majority of the Trustees, including a majority of the Trustees who are not
"interested persons" (as the term "interested person" is defined in the 1940
Act) of the Trust, the Manager or any such Subadviser, at a meeting of Trustees
called for the purpose of voting on such approval and by a vote of a "majority
of the outstanding voting securities" (as defined in the 1940 Act) of the
Portfolio. The authorization given to the Manager in Sections 1 and 7 hereof may
be delegated by it under any such agreement to any of the Subadvisers, provided
that the Subadvisers shall be subject to the same restrictions and limitations
on the investments and brokerage discretion as the Manager. While the Manager
shall be responsible for allocating assets among the Subadvisers and monitoring
their relative performances, the Trust agrees that the Manager should not be
accountable to the Trust or the Portfolio or the Portfolio's shareholders for
any loss or other liability relating to specific investments directed by any
Subadviser (even though the Manager retains the right to reserve any such
investment), because the Trust and the Manager will be relying almost
exclusively on the expertise of the Subadvisers for the selection and monitoring
of specific investments directed by the Subadvisers.
5. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services hereunder, a fee at the rate of 1.00% per annum of the
Portfolio's average daily net assets. The management fee payable hereunder shall
be computed daily and paid monthly in arrears. In the event of termination of
this Agreement, the fee provided in this Section shall be computed on the basis
of the period ending on the last business day on which this Agreement is in
effect subject to a pro rata adjustment based on the number of days elapsed in
the current month as a percentage of the total number of days in such month.
(b) If the operating expenses of the Portfolio in any year exceed the
limits set by state securities laws or regulations in states in which shares of
the Portfolio are sold, the amount payable to the Manager under subsection (a)
above will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulation. If amounts
15
<PAGE>
have already been advanced to the Manager under this Agreement, the Manager will
return such amounts to the Trust to the extent required by the preceding
sentence.
(c) In addition to the foregoing, the Manager may from time to time agree
not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
6. The Manager will not be liable for any error of judgment or mistake of
law or for any loss sustained by reason of the adoption of any investment policy
or the purchase, sale, or retention of any security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust or Portfolio or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
7. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, directors, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of portfolio securities for the
account of the Portfolio, neither the Manager nor any of its Directors, officers
or employees will act as a principal or agent or receive any commission except
as permitted by the 1940 Act. The Manager shall arrange for the placing of all
orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Manager. In the selection of
such brokers or dealers and the placing of such orders, the Manager is directed
at all times to seek for the Portfolio the most favorable execution and net
price available except as described herein. It is also understood that it is
desirable for the Portfolio that the Manager have access to supplemental
investment and market research and security and economic analyses provided by
brokers who may execute brokerage transactions at a higher cost to the Portfolio
than may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price
16
<PAGE>
and efficient execution. Therefore, the Manager is authorized to place orders
for the purchase and sale of securities for the Portfolio with such brokers,
subject to review by the Trust's Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the services
provided by such brokers may be useful to the Manager in connection with its or
its affiliates services to other clients.
(c) On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients, the
Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Portfolio
and to such clients.
8. This Agreement shall become effective on the date hereof and shall
remain in force until May 31, 1997 and from year to year thereafter, but only so
long as its continuance is approved annually by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or interested persons (as the term "interested persons" is
defined in the 1940 Act) of any such parties, at a meeting of Trustees called
for the purpose of voting on such approval or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Portfolio,
subject to the right of the Trust and the Manager to terminate this contract as
provided in Section 9 hereof.
9. Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Directors or its Board of Trustees, as the case may be, or
by vote of a "majority of its outstanding voting securities" (as defined in the
1940 Act) of the Portfolio and the giving of 60 days' written notice to the
other party.
10. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
11. The Trust agrees that in the event that neither the Manager nor any of
its affiliates acts as an investment adviser to the Trust, the name of the
Trust, and any series thereof, will be changed to one that does not contain the
name "Pioneer" or otherwise suggest an affiliation with the Manager.
12. The Manager is an independent contractor and not an employee of the
Fund for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Portfolio, the Manager
will act solely as investment counsel for such clients and not in any way on
behalf of the Trust or Portfolio.
13. This Agreement states the entire agreement of the parties hereto, and
is intended to be the complete and exclusive statement of the terms hereof. It
may not be
17
<PAGE>
added to or changed orally, and may not be modified or rescinded except by a
writing signed by the parties hereto and in accordance with the 1940 Act, when
applicable.
14. This Agreement and all performance hereunder shall be governed by the
laws of The Commonwealth of Massachusetts, which apply to contracts made and to
be performed in The Commonwealth of Massachusetts.
15. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
16. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, and of any and every
nature whatsoever shall be satisfied solely out of the assets of the portfolio
affected thereby and that no Trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the foregoing
liabilities. The Trust's Certificate of Trust, as amended from time to time, is
on file in the Office of the Secretary of State of the State of Delaware. Such
Certificate of Trust and the Trust's Declaration of Trust describe in detail the
respective responsibilities and limitations on liability of the Trustees,
officers, and holders of shares of beneficial interest.
17. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
<TABLE>
<S> <C>
ATTEST: PIONEER REAL ESTATE SHARES
---------------------------------- ----------------------------------
Joseph P. Barri John F. Cogan, Jr.
Secretary Chief Executive Officer
ATTEST: PIONEER MANAGEMENT CORPORATION
---------------------------------- ----------------------------------
Joseph P. Barri David D. Tripple
Secretary President
</TABLE>
18
Voting your shares by mail is quick and easy. Everything you need is enclosed.
The Fund's Board of Trustees recommends that you vote FOR each proposal.
As proposed, there would beno change to the management fee paid by the Fund.
Please vote! Your vote is extremely important, no matter how many shares you
own.
<PAGE>
Dear Fellow Shareowners,
I am writing to let you know that a special meeting will be held September 26,
1995, for shareowners of Pioneer Winthrop Real Estate Investment Fund to vote on
two important proposals. As a share-owner in the Fund, you have the opportunity
to voice your opinion on these matters.
This package contains information about the proposals, along with the proxy card
for you to use when voting by mail. Please take a moment to read the enclosed
materials and cast your vote on the yellow proxy card.
Your prompt vote will help to save money. If a majority of the FundOs
shareowners have not voted prior to the meeting, we must try to obtain their
votes with additional mailings or phone solicitation. That is a costly process.
Each of the proposals up for approval has been reviewed by Pioneer Winthrop Real
Estate Investment FundOs Board of Trustees, whose primary role is to protect
your interests as a shareowner. In the Trustees' opinion, the proposals are fair
and reasonable. The Trustees recommend that you vote FOR each proposal.
Here is what a FOR vote means for each of the proposals being considered.
Proposal 1
Approve a new management contract with Pioneering Management Corporation
(PMC), and approve the FundOs payment of fees to PMC under an interim management
contract. Recently, Apollo Real Estate Advisors, L.P., acquired an indirect
controlling interest in PioneerOs joint venture partner, Winthrop Financial
Associates, and the FundOs previous manager, Pioneer Winthrop Advisers. As a
result, the FundOs previous management contracts automatically terminated, and
an interim management contract with PMC is currently in place.
Proposal 2
Ratify the selection of Arthur Andersen LLP as the Fund's independent public
accountants for the fiscal year ending December 31, 1995.
Cast your vote by completing and signing the yellow proxy card enclosed in this
package. Please mail your completed and signed proxy as quickly as possible,
using the postage-paid envelope provided. Please feel free to call us at
1-800-622-3265 if you have any questions about the proposals or how to vote your
shares. Thank you for your prompt response. One final note:The name of the Fund
will be changing to Pioneer Real Estate Shares, effective September 1, 1995.
Sincerely,
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
0895-2697
