TIP INSTITUTIONAL FUNDS, 497, 1998-01-29

TIP INSTITUTIONAL FUNDS
497, 1998-01-29

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PRELIMINARY PROSPECTUS DATED JANUARY 30, 1998
SUBJECT TO COMPLETION

TIP INSTITUTIONAL FUNDS
(formerly, The Solon Funds)

Investment Adviser:
TURNER INVESTMENT PARTNERS, INC.

TIP Institutional Funds (formerly, The Solon Funds) (the "Trust") provides a
convenient and economical means of investing in professionally managed
portfolios of securities. This Prospectus offers shares of the following mutual
fund (the "Fund"), which is a separate series of the Trust:

TURNER MICRO CAP GROWTH FUND

This Prospectus concisely sets forth the information about the Trust and the
Fund that a prospective investor should know before investing. Investors are
advised to read this Prospectus and retain it for future reference. A Statement
of Additional Information dated March 1, 1998, has been filed with the
Securities and Exchange Commission, and is available without charge by calling
1-888-TIP-7654. The Statement of Additional Information is incorporated into
this Prospectus by reference.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO, AMONG OTHER THINGS, THIS PROSPECTUS HAS BEEN
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. SECURITIES OF THE FUNDS
REFERENCED IN THIS PROSPECTUS MAY NOT BE SOLD NOR MAY OFFERS TO BUY SUCH
SECURITIES BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES
REFERENCED HEREIN IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD
BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.

March 1, 1998

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TABLE OF CONTENTS

Summary ................................................................... 3
Expense Summary............................................................. 5
The Trust and the Fund...................................................... 6
Investment Objective........................................................ 6
Investment Policies......................................................... 6
Risk Factors................................................................. 7
Investment Limitations...................................................... 9
The Adviser................................................................. 10
The Administrator........................................................... 10
The Transfer Agent.......................................................... 11
The Distributor............................................................. 11
Portfolio Transactions...................................................... 11
Purchase and Redemption of Shares........................................... 12
Performance................................................................. 15
Taxes ................................................................... 15
General Information......................................................... 17
Description of Permitted Investments and Risk Factors....................... 18

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SUMMARY

The following provides basic information about the Turner Micro Cap Growth Fund
(the "Micro Cap Fund" or the "Fund"). The Fund is one of the four mutual funds
comprising TIP Institutional Funds (formerly, The Solon Funds) (the "Trust").
This summary is qualified in its entirety by reference to the more detailed
information provided elsewhere in this Prospectus and in the Statement of
Additional Information.

WHAT IS THE FUND'S INVESTMENT OBJECTIVE AND ITS PRIMARY POLICIES?

TURNER MICRO CAP GROWTH FUND

The Micro Cap Fund seeks capital appreciation. It invests primarily in a
diversified portfolio of common stocks of issuers with market capitalizations of
not more than $500 million at the time of purchase that the Adviser believes
offer strong earnings growth potential.

WHAT ARE THE RISKS INVOLVED WITH INVESTING IN THE FUND? The investment policies
of the Fund entail certain risks and considerations of which investors should be
aware. The Fund may invest in securities that fluctuate in value, and investors
should expect the Fund's net asset value per share to fluctuate in value. The
value of equity securities may be affected by the financial markets as well as
by developments impacting specific issuers. The Micro Cap Fund will typically
invest in companies, whose market capitalizations at the time of purchase are
equivalent to the market capitalizations of the companies comprising the bottom
quartile of the Russell 2000 Index at its most recent annual reconstitution
(currently, $_______ to $_______ million). Investments in smaller companies
involve greater risks than investments in larger, more established companies. In
addition, the Fund may borrow money. Micro cap companies may have limited
product lines, markets or financial resources; may lack management depth or
experience; and may be more vulnerable to adverse general market or economic
developments than the large companies. The prices of small company securities
are often more volatile than prices associated with large company issues, and
can display abrupt or erratic movements at times, due to limited trading volumes
and less publicly available information.

For more information about the Fund, see "Investment Objective," "Investment
Policies," "Risk Factors," and "Description of Permitted Investments and Risk
Factors."

WHO IS THE ADVISER? Turner Investment Partners, Inc. ("Turner" or the
"Adviser"), serves as the investment adviser to the Micro Cap Fund. See "Expense
Summary" and "The Adviser."

WHO IS THE ADMINISTRATOR? SEI Fund Resources (the "Administrator") serves as the
administrator and shareholder servicing agent for the Fund. See "Expense
Summary" and "The Administrator."

WHO IS THE DISTRIBUTOR? SEI Investments Distribution Co. (the "Distributor")
serves as the distributor of the Fund's shares. See "The Distributor."

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WHO IS THE TRANSFER AGENT? DST Systems, Inc., serves as the transfer agent and
dividend disbursing agent for the Trust. See "The Transfer Agent."

IS THERE A SALES LOAD? No, shares of the Fund are offered on a no-load basis.

IS THERE A MINIMUM INVESTMENT? The Fund requires a minimum initial investment of
$100,000, which the Distributor may waive at its discretion.

HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Transfer Agent on each day that the New York Stock Exchange is open
for business ("Business Day"). A purchase order will be effective as of the
Business Day received by the Transfer Agent if the Transfer Agent (or its
authorized agent) receives the order and payment, by check or in readily
available funds, prior to the calculation of net asset value on any Business
Day. Redemption orders received by the Transfer Agent prior to the calculation
of the net asset value per share of the Fund on any Business Day will be
effective that day. The purchase and redemption price for shares is the net
asset value per share determined as of the close of regular trading on the New
York Stock Exchange (normally, 4:00 p.m., Eastern Time) on any Business Day.
See "Purchase and Redemption of Shares."

HOW ARE DISTRIBUTIONS PAID? The Fund distributes substantially all of its net
investment income (exclusive of capital gains) in the form of periodic
dividends. Any capital gain is distributed at least annually. Distributions are
paid in additional shares unless the shareholder elects to take the payment in
cash. See "Dividends and Distributions."

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EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES
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Sales Load Imposed on Purchases............................................None
Sales Load Imposed on Reinvested Dividends.................................None
Deferred Sales Load........................................................None
Redemption Fees (1)........................................................None
Exchange Fees..............................................................None

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(1) A wire redemption charge, currently $10.00, is deducted from the amount of
a Federal Reserve wire redemption payment made at the request of a
shareholder.

ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
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Micro Cap
Fund
Advisory Fees (1)
12b-1 Fees 1.00%
Other Expenses (after expense None
reimbursements, if applicable) (2) .25%
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Total Operating Expenses (after
fee waivers or expense reimbursements) (3) 1.25%
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(1) The Adviser has agreed, on a voluntary basis, to waive its advisory fees to
the extent necessary to keep the "Total Operating Expenses" of the Fund
during the current fiscal year from exceeding 1.25%. The Adviser reserves
the right to terminate its waivers at any time in its sole discretion.

(2) Absent expense reimbursements by the Adviser, "Other Expenses" for the
Micro Cap Fund are estimated to be .33%.

(3) Absent fee waivers or expense reimbursements, "Total Operating Expenses"
for the Fund would be 1.33%, based on current expectations and assumptions.

EXAMPLE
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<S> <C> <C>
You would pay the following expenses on a $1,000 investment in the 1 years 3 years
Fund assuming (1) a 5% annual return and (2) redemption at the end of ------- -------
each time period.

Micro Cap Fund $13 $40

</TABLE>

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THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES OF THE FUND AFTER WAIVERS AND
REIMBURSEMENTS, AS SHOWN IN THE EXPENSE TABLE. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. The purpose of the expense table and example
is to assist the investor in understanding the various costs and expenses that
may be directly or indirectly borne by shareholders of the Fund. Additional
information may be found under "The Adviser" and "The Administrator."

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THE TRUST AND THE FUND

TIP Institutional Funds (formerly, The Solon Funds) (the "Trust") offers shares
in four mutual funds. Each share of each mutual fund represents an undivided,
proportionate interest in that mutual fund. This Prospectus offers Institutional
Class shares of the Trust's Turner Micro Cap Growth Fund (the "Micro Cap Fund"
or the "Fund").

INVESTMENT OBJECTIVE

TURNER MICRO CAP GROWTH FUND -- The Micro Cap Fund seeks capital appreciation.
There can be no assurance that the Fund will achieve its investment objective.

INVESTMENT POLICIES

TURNER MICRO CAP GROWTH FUND -- The Micro Cap Fund invests primarily (and, under
normal conditions, at least 65% of its total assets) in a diversified portfolio
of common stocks of issuers with market capitalizations of not more than $500
million at the time of purchase that the Adviser believes to have strong
earnings growth potential. Under normal market conditions, the Fund will
maintain a weighted average market capitalization of less than $350 million. The
Fund seeks to purchase securities that are well diversified across economic
sectors. The Micro Cap Fund will typically invest in companies whose market
capitalizations, at the time of purchase, are equivalent to the market
capitalizations of the companies comprising the bottom quartile of the Russell
2000 Index at its most recent annual reconstitution. The Fund may invest in
warrants and rights to purchase common stocks, and may invest up to 10% of its
total assets in micro cap stocks of foreign issuers and in ADRs.

The Micro Cap Fund invests in some of the smallest, most dynamic publicly-traded
companies. These emerging growth companies are typically in the early stages of
a long-term development cycle. In many cases, these companies offer unique
products, services or technologies and often serve special or expanding market
niches. Because of their small size, and less frequent trading activity, the
companies represented in the Fund's portfolio may be overlooked or not closely
followed by investors. Accordingly, their prices may rise either as a result of
improved business fundamentals, particularly when earnings grow faster than
general expectations, or as more investors appreciate the full extent of a
company's underlying business potential. Thus in the opinion of the Fund's
Adviser, they offer substantial appreciation potential for meeting retirement
and other long-term goals.

The Fund's share price can move up and down significantly, even over short
periods of time, due to the volatile nature of micro capitalization stocks. To
manage risk and improve liquidity, Turner expects to invest in numerous small,
publicly traded companies, representing a broad cross-section of U.S.
industries.

For a further description of these types of instruments and the risk factors
associated with them, see "Description of Permitted Investments and Risk
Factors" in the Statement of Additional Information.

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The Fund may invest in repurchase agreements, which entail a risk of loss should
the seller default on its obligation to repurchase the security which is the
subject of the transaction.

The Fund may participate in a securities lending program, which entails a risk
of loss should a borrower fail financially.

The Fund may purchase Rule 144A securities. For a further description of these
securities, see "Rule 144A Securities" in the "Description of Permitted
Investments and Risk Factors."

The Fund may invest in certain instruments such as certain types of when-issued
securities, and may borrow money and sell securities short. In addition, the
Fund may, although it has no present intention to do so, invest a portion of its
assets in derivatives, including futures, options, forwards and swaps, caps,
floors and collars. Futures contracts, options, options on futures contracts,
forwards and swaps entail certain costs and risks, including imperfect
correlation between the value of the securities held by the Fund and the value
of the particular derivative instrument, and the risk that the Fund could not
close out a futures or options position when it would be most advantageous to do
so. These investments and techniques, require the Fund to segregate some or all
of its cash or liquid securities to cover its obligations pursuant to such
instruments or techniques. As asset segregation reaches certain levels, the Fund
may lose flexibility in managing its investments properly, responding to
shareholder redemption request, or meeting other obligations and may be forced
to sell other securities that it wanted to retain or to realize unintended gains
or losses.

The Fund may also invest in investment grade corporate bonds, foreign
securities, zero coupon, pay- in-kind and deferred payment bonds, shares of
other investment companies and cash equivalents.

The Fund may invest up to 15% of its net assets in illiquid securities, and for
temporary defensive purposes, may invest up to 100% of its total assets in money
market instruments (including U.S. Government securities, bank obligations,
commercial paper rated in the highest rating category by a nationally recognized
statistical rating organization ("NRSRO")) and shares of money market investment
companies and may hold a portion of its assets in cash.

RISK FACTORS

Prospective investors in the Fund should consider the following factors as they
apply to the Fund's allowable investments and policies.

EQUITY SECURITIES -- The Fund may invest in public and privately issued equity
securities, including common and preferred stocks, warrants, rights to subscribe
to common stock and convertible securities. Investments in equity securities in
general are subject to market risks that may cause their prices to fluctuate
over time. The value of securities convertible into equity securities, such as
warrants or convertible debt, is also affected by prevailing interest rates, the
credit quality of the issuer and any call provision. Fluctuations in the value
of equity securities in which the Fund invests will cause the net asset value of
that Fund to fluctuate. An investment in such funds may be more

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suitable for long-term investors who can bear the risk of short-term principal
fluctuations.

Investment grade bonds include securities rated BBB by S&P and/or Baa by
Moody's, which may be regarded as having speculative characteristics as to
repayment of principal. If a security is downgraded, the Adviser will review the
situation and take appropriate action.

MICRO CAP COMPANY STOCKS -- The Micro Cap Fund may invest to a significant
degree in equity securities of smaller institutions. Any investment in a smaller
capitalization company involves greater risk than that customarily associated
with investments in larger, more established companies. This increased risk may
be due to the greater business risks of smaller size, limited markets and
financial resources, narrow product lines and lack of depth of management. The
securities of smaller companies are often traded in the over-the-counter market
and if listed on a national securities exchange may not be traded in volumes
typical for that exchange. Thus, the securities of smaller- sized companies are
likely to be less liquid, and subject to more abrupt or erratic market movements
than securities of larger, more established companies. Micro cap companies may
have limited product lines, markets or financial resources; may lack management
depth or experience; and may be more vulnerable to adverse general market or
economic developments than the large companies. Some of the companies in which
the Micro Cap Fund may invest may distribute, sell or produce products which
have recently been brought to market and may be dependent on key personnel. The
prices of small company securities are often more volatile than prices
associated with large company issues, and can display abrupt or erratic
movements at times, due to limited trading volumes and less publicly available
information.

The securities of small companies are often traded over-the-counter and may not
be traded in the volumes typical on a national securities exchange.
Consequently, in order to sell this type of holding, the Fund may need to
discount the securities from recent prices or dispose of the securities over a
longer period of time. Also, because micro-cap companies normally have fewer
shares outstanding and these shares trade less frequently than large companies,
it may be more difficult for the Fund to buy and sell significant amounts of
such shares without an unfavorable impact on prevailing market prices.

SECURITIES OF FOREIGN ISSUERS -- The Fund may invest to a limited extent in
securities of foreign issuers and in sponsored and unsponsored ADR's.
Investments in the securities of foreign issuers may subject the Fund to
investment risks that differ in some respects from those related to investments
in securities of U.S. issuers. Such risks include future adverse political and
economic developments, possible imposition of withholding taxes on income,
possible seizure, nationalization or expropriation

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of foreign deposits, possible establishment of exchange controls or taxation at
the source or greater fluctuation in value due to changes in exchange rates.
Foreign issuers of securities often engage in business practices different from
those of domestic issuers of similar securities, and there may be less
information publicly available about foreign issuers. In addition, foreign
issuers are, generally speaking, subject to less government supervision and
regulation than are those in the United States. Investments in securities of
foreign issuers are frequently denominated in foreign currencies and the value
of the Fund's assets measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and the Fund may incur costs in connection with conversions between various
currencies.

PORTFOLIO TURNOVER -- The annual portfolio turnover rate for the Micro Cap Fund,
Under normal circumstances, is not expected to exceed 250%. An annual portfolio
turnover rate in excess of 100% may result from the Adviser's investment
strategy or from prevailing market conditions. Portfolio turnover rates in
excess of 100% may result in higher transaction costs, including increased
brokerage commissions, and higher levels of taxable capital gain.

INVESTMENT LIMITATIONS

The investment objectives of the Fund and certain of the investment limitations
set forth here and in the Statement of Additional Information are fundamental
policies of the Fund. Fundamental policies cannot be changed with respect to the
Fund without the consent of the holders of a majority of that Fund's outstanding
shares.

1. The Fund may not: (i) purchase securities of any issuer (except securities
issued or guaranteed by the United States Government, its agencies or
instrumentalities and repurchase agreements involving such securities) if, as a
result, more than 5% of the total assets of the Fund would be invested in the
securities of such issuer; or (ii) acquire more than 10% of the outstanding
voting securities of any one issuer. This restriction applies to 75% of the
Fund's total assets.

2. The Fund may not purchase any securities which would cause 25% or more of the
total assets of such Fund to be invested in the securities of one or more
issuers conducting their principal business activities in the same industry.
This limitation does not apply to obligations issued or guaranteed by the U.S.
Government or its agencies and instrumentalities and repurchase agreements
involving such securities.

3. The Fund may not borrow money in an amount exceeding 33 1/3% of the value of
its total assets, provided that, for purposes of this limitation, investment
strategies which either obligate the Fund to purchase securities or require the
Fund to segregate assets are not considered to be borrowings. Asset coverage of
at least 300% is required for all borrowings, except where the Fund has borrowed
money for temporary purposes in amounts not exceeding 5% of its total assets.
The Fund will not purchase securities while its borrowings exceed 5% of its
total assets.

The foregoing percentages (except the limitation on borrowing) will apply at the
time of the purchase

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of a security.

THE ADVISER

TURNER INVESTMENT PARTNERS, INC.

Turner Investment Partners, Inc. ("Turner") is a professional investment
management firm founded in March, 1990. Robert E. Turner is the Chairman and
controlling shareholder of Turner. As of September 30, 1997, Turner had
discretionary management authority with respect to approximately $2.3 billion of
assets. Turner has provided investment advisory services to investment companies
since 1992. The principal business address of Turner is 1235 Westlakes Drive,
Suite 350, Berwyn, Pennsylvania 19312.

Turner serves as the investment adviser for the Micro Cap Fund under an
investment advisory agreement (the "Advisory Agreement"). Under the Advisory
Agreement, Turner makes the investment decisions for the assets of the Fund and
continuously reviews, supervises and administers the Fund's investment program,
subject to the supervision of, and policies established by, the Trustees of the
Trust.

For its services, the Adviser is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of 1.00% of the average daily net assets of
the Micro Cap Fund. Turner has voluntarily agreed to waive all or a portion of
its fee and to reimburse expenses of the Micro Cap Fund in order to limit its
total operating expenses (as a percentage of average daily net assets on an
annualized basis) to not more than 1.25%. Turner reserves the right, in its sole
discretion, to terminate these voluntary fee waivers and reimbursements at any
time.

Frank L. Sustersic, CFA, a Senior Security Analyst and Equity Portfolio Manager
at Turner, serves as lead portfolio manager to the Fund. Mr. Sustersic joined
Turner in 1994. Prior to 1994, he was Investment Officer/Fund Manager with First
Fidelity Bank Corporation. He has eight years of investment experience.

Robert E. Turner, CFA, Chairman and Chief Investment Officer of Turner, serves
as co-portfolio manager to the Fund. Mr. Turner founded Turner in 1990. Prior to
1990, he was Senior Investment Manager with Meridian Investment Company. He has
15 years of investment experience.

THE ADMINISTRATOR

SEI Fund Resources (the "Administrator") provides the Trust with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel, and facilities.

For these administrative services, the Administrator is entitled to a fee from
each Fund, which is calculated daily and paid monthly, at an annual rate of .10%
of that Fund's average daily net assets up to $250 million, .08% on the next
$250 million of such assets, and .07% of such assets in excess of $500 million.
The Fund is subject to a minimum annual fee of $75,000 for the first class of
shares

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and $15,000, for each additional class of shares, which may be reduced at the
sole discretion of the Administrator.

The Administrator also serves as shareholder servicing agent for the Trust under
a shareholder servicing agreement with the Trust.

THE TRANSFER AGENT

DST Systems, Inc., 1004 Baltimore Street, Kansas City, Missouri 64105 (the
"Transfer Agent") serves as the transfer agent and dividend disbursing agent for
the Trust under a transfer agency agreement with the Trust.

THE DISTRIBUTOR

SEI Investments Distribution Co. (the "Distributor"), Oaks, Pennsylvania 19456,
a wholly-owned subsidiary of SEI Investments Company, acts as the Trust's
distributor pursuant to a distribution agreement (the "Distribution Agreement").
No compensation is paid to the Distributor for its distribution services.
Certain broker-dealers assist their clients in the purchase of shares from the
Distributor and charge a fee for this service in addition to the Fund's public
offering price.

PORTFOLIO TRANSACTIONS

The Fund may execute brokerage or other agency transactions through the
Distributor for which the Distributor may receive usual and customary
compensation. The Adviser obtains its research information from a number of
sources, including large brokerage houses, trade and financial journals and
publications, corporate reports, rating service manuals, and interviews with
corporate executives and other industry sources. The Adviser may select brokers
on the basis of the research, statistical and pricing services they provide to
the Fund, as well as on the basis of the Adviser's business relationship with
the brokers. A commission paid to such brokers may be higher than that which
another qualified broker would have charged for effecting the same transactions,
provided that such commissions are in compliance with the Securities Exchange
Act of 1934, as amended, and that the Adviser determines in good faith that the
commission is reasonable in terms of either the transaction or the overall
responsibility of the Adviser to the Fund and the Adviser's other clients. The
Adviser may direct commission business for the Fund to designated broker-dealers
(including the Distributor) in connection with such broker-dealers' payment of
certain Fund expenses.

Since shares of the Fund are not marketed through intermediary broker-dealers,
the Fund does not have a practice of allocating brokerage or effecting principal
transactions with broker-dealers on the basis of sales of shares which may be
made through such firms. However, the Adviser may place orders for the Fund with
qualified broker-dealers who refer clients to the Fund.

Some securities considered for investment by the Fund may also be appropriate
for other accounts and/or clients served by the Adviser. If the purchase or sale
of securities consistent with the

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investment policies of the Fund and another of the Adviser's accounts and/or
clients are considered at or about the same time, transactions in such
securities will be allocated among the Fund and the other accounts and/or
clients in a manner deemed equitable by the Adviser.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions may be made through the Transfer Agent on each day
that the New York Stock Exchange is open for business ("Business Day").
Investors may purchase and redeem shares of the Funds directly through the
Transfer Agent at: TIP Institutional Funds, P.O. Box 419805, Kansas City,
Missouri 64141-6805, by mail or wire transfer. All shareholders may place orders
by telephone; when market conditions are extremely busy, it is possible that
investors may experience difficulties placing orders by telephone and may wish
to place orders by mail. Purchases and redemptions of shares of the Fund may be
made on any Business Day.

The minimum initial investment in the Fund is $100,000, and subsequent purchases
must be at least $5,000. The Distributor may waive these minimums at its
discretion. No minimum applies to subsequent purchases effected by dividend
reinvestment.

Certain brokers assist their clients in the purchase or redemption of shares and
charge a fee for this service in addition to the Fund's public offering price.

PURCHASE BY MAIL

An account may be opened by mailing a check or other negotiable bank draft
(payable to the Fund) for $100,000, together with a completed Account
Application to: TIP Institutional Funds, P.O. Box 419805, Kansas City, Missouri
64141-6805. Third-Party checks, credit cards, credit card checks and cash will
not be accepted. When purchases are made by check (including certified or
cashier's checks), redemption proceeds will not be forwarded until the check
providing for the investment being redeemed has cleared (which may take up to 15
days). Subsequent investments may also be mailed directly to the Transfer Agent.

PURCHASE BY WIRE TRANSFER

Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of the Fund by requesting their bank
to transmit funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account Number 98-7060-116-8; Further Credit: [Turner Micro
Cap Growth Fund]. The shareholder's name and account number must be specified in
the wire.

INITIAL PURCHASES: Before making an initial investment by wire, an investor must
first telephone 1-888-TIP-7654 to be assigned an account number. The investor's
name, account number, taxpayer identification number or Social Security number,
and address must be specified in the wire. In addition, an Account Application
should be promptly forwarded to: TIP Institutional Funds, P.O.

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Box 419805, Kansas City, Missouri 64141-6805.

SUBSEQUENT PURCHASES: Additional investments may be made at any time through the
wire procedures described above, which must include a shareholder's name and
account number. The investor's bank may impose a fee for investments by wire.
Subsequent purchases may also be made by wire through the Automated Clearing
House ("ACH").

GENERAL INFORMATION REGARDING PURCHASES

A purchase request will be effective as of the day received by the Transfer
Agent if the Transfer Agent (or its authorized agent) receives the purchase
request in good order and payment prior to the calculation of net asset value on
any Business Day. Otherwise, the purchase order will be effective on the next
Business Day. A purchase request is in good order if it is complete and
accompanied by the appropriate documentation, including an Account Application
and additional documentation required. Payment may be made by check or readily
available funds. The purchase price of shares of the Fund is the Fund's net
asset value per share next determined after a purchase order is effective.
Purchases will be made in full and fractional shares of the Fund calculated to
three decimal places. The Trust will not issue certificates representing shares
of the Fund.

If a check received for the purchase of shares does not clear, the purchase will
be canceled, and the investor could be liable for any losses or fees incurred.
The Trust reserves the right to reject a purchase order when the Trust
determines that it is not in the best interest of the Trust or its shareholders
to accept such order.

EXCHANGES

Shareholders of the Fund may exchange their Institutional Class shares for
Institutional Class shares of the other TIP Institutional Funds that are then
offering their shares to the public. Exchanges are made at net asset value. An
exchange is considered a sale of shares and may result in capital gain or loss
for federal income tax purposes. The shareholder must have received a current
prospectus for the new Fund before any exchange will be effected. If the
Transfer Agent (or its authorized agent) receives exchange instructions in
writing or by telephone (an "Exchange Request") in good order prior to the
calculation of net asset value on any Business Day, the exchange will be
effected that day. The liability of the Fund or the Transfer Agent for
fraudulent or unauthorized telephone instructions may be limited as described
below. The Trust reserves the right to modify or terminate this exchange offer
on 60 days' notice.

Because excessive trading can hurt Fund performance and shareholders, the Fund
reserves the right to temporarily or permanently terminate the exchange
privilege of any investor who makes more than four exchanges into and out of the
Fund per calendar year. Accounts under common ownership or control, including
accounts with the same taxpayer identification number, will be counted together
for purposes of the four exchange limit.

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REDEMPTIONS

Redemption requests in good order received by the Transfer Agent (or its
authorized agent) prior to the calculation of net asset value on any Business
Day will be effective that day. To redeem shares of the Funds, shareholders must
place their redemption orders with the Transfer Agent (or its authorized agent)
prior to the calculation of net asset value on any Business Day. Otherwise, the
redemption order will be effective on the next Business Day. The redemption
price of shares of the Fund is the net asset value per share of such Fund next
determined after the redemption order is effective. Payment of redemption
proceeds will be made as promptly as possible and, in any event, within seven
days after the redemption order is received, provided, however, that redemption
proceeds for shares purchased by check (including certified or cashier's checks)
will be forwarded only upon collection of payment for such shares; collection of
payment may take up to 15 days. Shareholders may not close their accounts by
telephone.

Shareholders may receive redemption payments in the form of a check or by
Federal Reserve or ACH wire transfer. There is no charge for having a check for
redemption proceeds mailed. The Custodian will deduct a wire charge, currently
$10.00, from the amount of a Federal Reserve wire redemption payment made at the
request of a shareholder. Shareholders cannot redeem shares of the Fund by
Federal Reserve wire on Federal holidays restricting wire transfers. The Fund
does not charge for ACH wire transactions; however, such transactions will not
be posted to a shareholder's bank account until the second Business Day
following the transaction.

Neither the Trust nor the Transfer Agent will be responsible for the
authenticity of instructions received by telephone if they reasonably believe
those instructions to be genuine. The Trust and the Transfer Agent will each
employ reasonable procedures to confirm that telephone instructions are genuine.
Such procedures may include the taping of telephone conversations.

The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.

VALUATION OF SHARES

The net asset value per share of the Fund is determined by dividing the total
market value of that Fund's investments and other assets, less any liabilities,
by the total number of outstanding shares of the Fund. Net asset value per share
is determined daily as of the close of regular trading on the New York Stock
Exchange (normally, 4:00 p.m., Eastern time) on any Business Day.

-14-

<PAGE>

PERFORMANCE

From time to time, the Fund may advertise yield and total return. These figures
will be based on historical earnings and are not intended to indicate future
performance. No representation can be made regarding actual future yields or
returns. The yield of the Fund refers to the annualized income generated by an
investment in that Fund over a specified 30-day period. The yield is calculated
by assuming that the same amount of income generated by the investment during
that period is generated in each 30-day period over one year and is shown as a
percentage of the investment.

The total return of the Fund refers to the average compounded rate of return on
a hypothetical investment, for designated time periods (including but not
limited to the period from which the Fund commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions.

The Fund may periodically compare their performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical
Services, Inc.), financial and business publications and periodicals, broad
groups of comparable mutual funds, unmanaged indices, which may assume
investment of dividends but generally do not reflect deductions for
administrative and management costs, or other investment alternatives. The Fund
may quote Morningstar, Inc., a service that ranks mutual funds on the basis of
risk-adjusted performance, and Ibbotson Associates of Chicago, Illinois, which
provides historical returns of the capital markets in the U.S. The Fund may also
quote the Frank Russell Company or Wilshire Associates, consulting firms that
compile financial characteristics of common stocks and fixed income securities,
regarding non-performance-related attributes of the Fund's portfolios. The Fund
may use long term performance of these capital markets to demonstrate general
long-term risk versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. The Fund may also quote
financial and business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.

The Fund may quote various measures of volatility and benchmark correlation in
advertising and may compare these measures to those of other funds. Measures of
volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.

TAXES

The following summary of federal income tax consequences is based on current tax
laws and regulations, which may be changed by legislative, judicial or
administrative action. No attempt has been made to present a detailed
explanation of the federal income tax treatment of the Fund or its shareholders.
Shareholders are urged to consult their tax advisors regarding specific
questions as to federal, state and local income taxes. Further information
concerning taxes is set forth in the Statement of Additional Information.

-15-

<PAGE>

TAX STATUS OF THE FUND:

The Fund is treated as a separate entity for federal income tax purposes and is
not combined with the Trust's other portfolios. The Fund intends to qualify or
to continue to qualify for the special tax treatment afforded regulated
investment companies as defined under Subchapter M of the Internal Revenue Code
of 1986, as amended. So long as the Fund qualifies for this special tax
treatment, it will be relieved of federal income tax on that part of its net
investment income and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) which it distributes to shareholders.

TAX STATUS OF DISTRIBUTIONS:

The Fund will distribute all of its net investment income (including, for this
purpose, net short-term capital gain) to shareholders. Dividends from the Fund's
net investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations; however, such distributions which do qualify for
the dividends-received deduction may be subject to the corporate alternative
minimum tax. Any net capital gains will be distributed annually and will be
taxed to shareholders as gains from the sale or exchange of a capital asset held
for more than one year or for more than 18 months, as the case may be,
regardless of how long the shareholder has held shares. The Fund will make
annual reports to shareholders of the federal income tax status of all
distributions, including the amount of dividends eligible for the
dividends-received deduction.

Certain securities purchased by the Fund are sold with original issue discount
and thus do not make periodic cash interest payments. The Fund will be required
to include as part of their current income the accrued discount on such
obligations even though the Fund has not received any interest payments on such
obligations during that period. Because the Fund distributes all of its net
investment income to shareholders, the Fund may have to sell portfolio
securities to distribute such accrued income, which may occur at a time when the
Adviser would not have chosen to sell such securities and which may result in a
taxable gain or loss.

Dividends declared by the Fund in October, November or December of any year and
payable to shareholders of record on a date in one of those months will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 in the year declared, if paid by the Fund at any time during the
following January. The Fund intends to make sufficient distributions prior to
the end of each calendar year to avoid liability for the federal excise tax
applicable to regulated investment companies.

Each sale, exchange or redemption of a Fund's shares is a taxable event to the
shareholder.

-16-

<PAGE>

GENERAL INFORMATION

THE TRUST

The Trust, an open-end management investment company, was organized under
Delaware law as a business trust under a Declaration of Trust dated October 25,
1993. The Declaration of Trust permits the Trust to offer separate series
("portfolios") of shares. All consideration received by the Trust for shares of
any portfolio and all assets of such portfolio belong to that portfolio and
would be subject to liabilities related thereto. The Trust reserves the right to
create and issue shares of additional portfolios.

The Trust pays its operating expenses, including fees of its service providers,
audit and legal expenses, expenses of preparing prospectuses, proxy solicitation
material and reports to shareholders, costs of custodial services and
registering the shares under federal and state securities laws, pricing and
insurance expenses, and pays additional expenses including litigation and other
extraordinary expenses, brokerage costs, interest charges, taxes and
organization expenses.

TRUSTEES OF THE TRUST

The management and affairs of the Trust are supervised by the Trustees under the
laws of the State of Delaware. The Trustees have approved contracts under which,
as described above, certain companies provide essential management services to
the Trust.

VOTING RIGHTS

Each share held entitles the Shareholder of record to one vote for each share.
In other words, each shareholder of record is entitled to one vote for each
share held on the record date for the meeting. Shareholders of each Fund or
Class will vote separately on matters pertaining solely to that Fund or Class.
As a Delaware business trust, the Trust is not required to hold annual meetings
of Shareholders, but approval will be sought for certain changes in the
operation of the Trust and for the election of Trustees under certain
circumstances.

In addition, a Trustee may be removed by the remaining Trustees or by
Shareholders at a special meeting called upon written request of Shareholders
owning at least 10% of the outstanding shares of the Trust. In the event that
such a meeting is requested, the Trust will provide appropriate assistance and
information to the Shareholders requesting the meeting.

REPORTING

The Trust issues unaudited financial information semiannually and audited
financial statements annually for the Fund. The Trust also furnishes periodic
reports and, as necessary, proxy statements to shareholders of record.

-17-

<PAGE>

SHAREHOLDER INQUIRIES

Shareholder inquiries should be directed to TIP Institutional Funds, P.O. Box
419805, Kansas City, Missouri 64141-6805, or by calling 1-888-TIP-7654.
Purchases, exchanges and redemptions of shares should be made through the
Transfer Agent by calling 1-888-TIP-7654.

DIVIDENDS AND DISTRIBUTIONS

Substantially all of the net investment income (excluding capital gains) of the
Fund is distributed in the form of dividends at least annually. If any capital
gain is realized, substantially all of it will be distributed at least annually.

Shareholders automatically receive all income dividends and capital gain
distributions in additional shares, unless the shareholder has elected to take
such payment in cash. Shareholders may change their election by providing
written notice to the Transfer Agent at least 15 days prior to the distribution.
Shareholders may receive payments for cash distributions in the form of a check
or by Federal Reserve or ACH wire transfer.

Dividends and other distributions of the Fund are paid on a per share basis. The
value of each share will be reduced by the amount of the payment. If shares are
purchased shortly before the record date for a distribution of ordinary income
or capital gains, a shareholder will pay the full price for the shares and
receive some portion of the price back as a taxable distribution or dividend.

COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Ernst & Young LLP
serves as the independent public accountants for the Trust.

CUSTODIAN

CoreStates Bank, N.A., Broad and Chestnut Streets, P.O. Box 7618, Philadelphia,
Pennsylvania 19101 acts as the custodian (the "Custodian") of the Trust. The
Custodian holds cash, securities and other assets of the Trust as required by
the Investment Company Act of 1940, as amended (the "1940 Act").

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of permitted investments for the Fund:

BORROWING -- The Fund may borrow money equal to 5% of their total assets for
temporary purposes to meet redemptions or to pay dividends. Borrowing may
exaggerate changes in the net asset value of the Fund's shares and in the return
on the Fund's portfolio. Although the principal of any borrowing will be fixed,
the Fund's assets may change in value during the time the borrowing is

-18-

<PAGE>

outstanding. The Fund may be required to liquidate portfolio securities at a
time when it would be disadvantageous to do so in order to make payments with
respect to any borrowing. The Fund may be required to segregate liquid assets in
an amount sufficient to meet their obligations in connection with such
borrowings. In an interest rate arbitrage transaction, the Fund borrows money at
one interest rate and lends the proceeds at another, higher interest rate. These
transactions involve a number of risks, including the risk that the borrower
will fail or otherwise become insolvent or that there will be a significant
change in prevailing interest rates.

CONVERTIBLE SECURITIES -- Convertible securities are corporate securities that
are exchangeable for a set number of another security at a prestated price.
Convertible securities typically have characteristics of both fixed income and
equity securities. Because of the conversion feature, the market value of a
convertible security tends to move with the market value of the underlying
stock. The value of a convertible security is also affected by prevailing
interest rates, the credit quality of the issuer and any call provisions.

ILLIQUID SECURITIES -- Illiquid securities are securities that cannot be
disposed of within seven business days at approximately the price at which they
are being carried on the Fund's books. Illiquid securities include demand
instruments with demand notice periods exceeding seven days, securities for
which there is no active secondary market, and repurchase agreements with
durations or maturities over 7 days in length.

MONEY MARKET INSTRUMENTS -- Money market securities are high-quality, dollar-
denominated, short-term debt instruments. They consist of: (i) bankers'
acceptances, certificates of deposits, notes and time deposits of highly-rated
U.S. banks and U.S. branches of foreign banks; (ii) U.S. Treasury obligations
and obligations issued or guaranteed by the agencies and instrumentalities of
the U.S. Government; (iii) high-quality commercial paper issued by U.S. and
foreign corporations; (iv) debt obligations with a maturity of one year or less
issued by corporations with outstanding high-quality commercial paper ratings;
and (v) repurchase agreements involving any of the foregoing obligations entered
into with highly-rated banks and broker-dealers.

REPURCHASE AGREEMENTS -- Repurchase agreements are agreements by which the Fund
obtains a security and simultaneously commits to return the security to the
seller at an agreed upon price (including principal and interest) on an agreed
upon date within a number of days from the date of purchase. Repurchase
agreements are considered loans under the 1940 Act.

RIGHTS -- Rights give existing shareholders of a corporation the right, but not
the obligation, to buy shares of the corporation at a given price, usually below
the offering price, during a specified period.

-19-

<PAGE>

relatively limited size of this institutional market, these securities may
affect the Fund's liquidity to the extent that qualified institutional buyers
become, for a time, uninterested in purchasing such securities. Nevertheless,
Rule 144A securities may be treated as liquid securities pursuant to guidelines
adopted by the Trust's Board of Trustees.

SECURITIES LENDING -- In order to generate additional income, the Fund may lend
its securities pursuant to agreements requiring that the loan be continuously
secured by collateral consisting of cash or securities of the U.S. Government or
its agencies equal to at least 100% of the market value of the loaned
securities. The Fund continues to receive interest on the loaned securities
while simultaneously earning interest on the investment of cash collateral.
Collateral is marked to market daily. There may be risks of delay in recovery of
the securities or even loss of rights in the collateral should the borrower of
the securities fail financially or become insolvent.

SHORT SALES -- A short sale is "against the box" if at all times during which
the short position is open, the Fund owns at least an equal amount of the
securities or securities convertible into, or exchangeable without further
consideration for, securities of the same issue as the securities that are sold
short.

U.S. GOVERNMENT AGENCY OBLIGATIONS -- Certain Federal agencies, such as the
Government National Mortgage Association ("GNMA"), have been established as
instrumentalities of the United States Government to supervise and finance
certain types of activities. Issues of these agencies, while not direct
obligations of the United States Government, are either backed by the full faith
and credit of the United States (e.g., GNMA securities) or supported by the
issuing agencies' right to borrow from the Treasury. The issues of other
agencies are supported by the credit of the instrumentality (e.g., Fannie Mae
securities).

U.S. GOVERNMENT SECURITIES -- Bills, notes and bonds issued by the U.S.
Government and backed by the full faith and credit of the United States.

U.S. TREASURY OBLIGATIONS -- Bills, notes and bonds issued by the U.S. Treasury,
and separately traded interest and principal component parts of such obligations
that are transferable through the Federal book-entry system known as Separately
Traded Registered Interested and Principal Securities ("STRIPS") and Coupon
Under Book Entry Safekeeping ("CUBES").

U.S. TREASURY RECEIPTS -- U.S. Treasury receipts are interests in separately
traded interest and principal component parts of U.S. Treasury obligations that
are issued by banks or brokerage firms and are created by depositing U.S.
Treasury obligations into a special account at a custodian bank. The custodian
holds the interest and principal payments for the benefit of the registered
owners of the certificates of receipts. The custodian arranges for the issuance
of the certificates or receipts evidencing ownership and maintains the register.

WARRANTS -- Warrants are instruments giving holders the right, but not the
obligation, to buy

-20-

<PAGE>

equity or fixed income securities of a company at a given price during a
specified period.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES -- When-issued or delayed delivery
transactions involve the purchase of an instrument with payment and delivery
taking place in the future. Delivery of and payment for these securities may
occur a month or more after the date of the purchase commitment. The Fund will
maintain with the Custodian a separate account with liquid securities or cash in
an amount at least equal to these commitments. The interest rate realized on
these securities is fixed as of the purchase date, and no interest accrues to
the Fund before settlement.

ZERO COUPON, PAY-IN-KIND AND DEFERRED PAYMENT SECURITIES -- Zero coupon
obligations are debt securities that do not bear any interest, but instead are
issued at a deep discount from par. The value of a zero coupon obligation
increases over time to reflect the interest accreted. Upon maturity, the holder
is entitled to receive the par value of the security. While interest payments
are not made on such securities, holders of such securities are deemed to have
received "phantom income" annually. Because the Fund will distribute its
"phantom income" to shareholders, to the extent that shareholders elect to
receive dividends in cash rather than reinvesting such dividends in additional
shares, the Fund will have fewer assets with which to purchase income producing
securities. In the event of adverse market conditions, zero coupon, pay-in-kind
and deferred payment securities may be subject to greater fluctuations in value
and may be less liquid than comparably rated securities paying cash interest at
regular interest payment periods.

-21-

<PAGE>

Trust:
TIP INSTITUTIONAL FUNDS

Fund:
TURNER MICRO CAP GROWTH FUND

Adviser:
TURNER INVESTMENT PARTNERS, INC.

Distributor:
SEI INVESTMENTS DISTRIBUTION CO.

Administrator:
SEI FUND RESOURCES

Legal Counsel:
MORGAN, LEWIS & BOCKIUS LLP

Independent Auditors:
ERNST & YOUNG LLP

<PAGE>

PRELIMINARY PROSPECTUS DATED JANUARY 30, 1998
SUBJECT TO COMPLETION

TIP INSTITUTIONAL FUNDS
(formerly, The Solon Funds)

Investment Adviser:
PENN CAPITAL MANAGEMENT COMPANY, INC.

TIP Institutional Funds (formerly, The Solon Funds) (the "Trust") provides a
convenient and economical means of investing in professionally managed
portfolios of securities. This Prospectus offers Institutional Class shares of
the following mutual fund (the "Fund"), which is a separate series of the Trust:

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND

THE STRATEGIC HIGH YIELD BOND FUND INVESTS PRIMARILY, AND MAY INVEST ALL OF ITS
ASSETS IN LOWER RATED BONDS, COMMONLY REFERRED TO AS "JUNK BONDS." THESE
SECURITIES ARE SPECULATIVE AND ARE SUBJECT TO GREATER RISK OF LOSS OF PRINCIPAL
AND INTEREST THAN INVESTMENTS IN HIGHER RATED BONDS. BECAUSE INVESTMENT IN SUCH
SECURITIES ENTAILS GREATER RISKS, INCLUDING RISK OF DEFAULT, AN INVESTMENT IN
THE STRATEGIC HIGH YIELD BOND FUND SHOULD NOT CONSTITUTE A COMPLETE INVESTMENT
PROGRAM AND MAY NOT BE APPROPRIATE FOR ALL INVESTORS. INVESTORS SHOULD CAREFULLY
CONSIDER THE RISKS POSED BY AN INVESTMENT IN THE STRATEGIC HIGH YIELD BOND FUND
BEFORE INVESTING. SEE INVESTMENT OBJECTIVES AND POLICIES," "RISK FACTORS" AND
THE "APPENDIX."

March 1, 1998

<PAGE>

TABLE OF CONTENTS

Summary ................................................................... 3
Expense Summary............................................................. 5
The Trust and the Fund...................................................... 6
Investment Objective........................................................ 6
Investment Policies......................................................... 6
Risk Factors................................................................. 8
Investment Limitations...................................................... 10
The Adviser................................................................. 10
The Administrator........................................................... 12
The Transfer Agent.......................................................... 13
The Distributor............................................................. 13
Portfolio Transactions...................................................... 13
Purchase and Redemption of Shares........................................... 14
Performance................................................................. 17
Taxes ................................................................... 17
General Information......................................................... 19
Description of Permitted Investments and Risk Factors....................... 20

-2-

<PAGE>

SUMMARY

The following provides basic information about the Penn Capital Strategic High
Yield Bond Fund (the "Strategic High Yield Fund" or the "Fund"). The Fund is one
of the four mutual funds comprising TIP Institutional Funds (formerly, The Solon
Funds) (the "Trust"). This summary is qualified in its entirety by reference to
the more detailed information provided elsewhere in this Prospectus and in the
Statement of Additional Information.

WHAT IS THE FUND'S INVESTMENT OBJECTIVE AND ITS PRIMARY POLICIES?

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND

The Strategic High Yield Fund seeks to maximize income through high current
yield and, as a secondary objective, to produce above average capital
appreciation. The Fund invests primarily in a diversified portfolio of high
yield bonds and other high yield securities.

For more information about the Fund, see "Investment Objective," "Investment
Policies," "Risk Factors," and "Description of Permitted Investments and Risk
Factors."

WHO IS THE ADVISER? Penn Capital Management Company, Inc. (the "Adviser"),
serves as the investment adviser to the Fund. See "Expense Summary" and "The
Adviser."

WHO IS THE ADMINISTRATOR? SEI Fund Resources (the "Administrator") serves as the
administrator and shareholder servicing agent for the Fund. See "Expense
Summary" and "The Administrator."

WHO IS THE DISTRIBUTOR? SEI Investments Distribution Co. (the "Distributor")
serves as the distributor of the Fund's shares. See "The Distributor."

WHO IS THE TRANSFER AGENT? DST Systems, Inc., serves as the transfer agent and
dividend disbursing agent for the Trust. See "The Transfer Agent."

IS THERE A SALES LOAD? No, shares of the Fund are offered on a no-load basis.

-3-

<PAGE>

IS THERE A MINIMUM INVESTMENT? The Fund requires $100,000 minimum initial
investment, which the Distributor may waive at its discretion.

HOW DO I PURCHASE AND REDEEM SHARES? Purchases and redemptions may be made
through the Transfer Agent on each day that the New York Stock Exchange is open
for business ("Business Day"). A purchase order will be effective as of the
Business Day received by the Transfer Agent if the Transfer Agent (or its
authorized agent) receives the order and payment, by check or in readily
available funds, prior to the calculation of net asset value. Redemption orders
received by the Transfer Agent prior to the calculation of net asset value, on
any Business Day will be effective that day. The purchase and redemption price
for shares is the net asset value per share determined as of the close of
regular trading on the New York Stock Exchange (normally, 4:00 p.m., Eastern
Time) on any Business Day. See "Purchase and Redemption of Shares."

-4-

<PAGE>

EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES
- --------------------------------------------------------------------------------
Sales Load Imposed on Purchases.............................................None
Sales Load Imposed on Reinvested Dividends..................................None
Deferred Sales Load.........................................................None
Redemption Fees (1).........................................................None
Exchange Fees...............................................................None

- --------------------------------------------------------------------------------
(1) A wire redemption charge, currently $10.00, is deducted from the amount of
a Federal Reserve wire redemption payment made at the request of a
shareholder.

ANNUAL OPERATING EXPENSES (as a percentage of average net assets)
- --------------------------------------------------------------------------------

Strategic
High Yield
Fund
- --------------------------------------------------------------------------------
Advisory Fees (1)
12b-1 Fees .55%
Other Expenses (after expense None
reimbursements, if applicable) (2) .13%
Total Operating Expenses (after
fee waivers or expense reimbursements) (3) .68%
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

(1) The Adviser has agreed, on a voluntary basis, to waive its advisory fees to
the extent necessary to keep the "Total Operating Expenses" of the Fund
during the current fiscal year from exceeding .68%. The Adviser reserves
the right to terminate its waivers at any time in its sole discretion.

(2) Absent expense reimbursements by the Adviser, "Other Expenses" for the
Strategic High Yield Fund are estimated to be .58%.

(3) Absent fee waivers or expense reimbursements, "Total Operating Expenses"
for the Fund would be 1.13%, based on current expectations and assumptions.

EXAMPLE
- --------------------------------------------------------------------------------

<S> <C> <C>
You would pay the following expenses on a $1,000 investment in the 1 years 3 years
Fund assuming (1) a 5% annual return and (2) redemption at the end of ------- -------
each time period.

Strategic High Yield Fund $7 $22

</TABLE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

THE EXAMPLE IS BASED UPON TOTAL OPERATING EXPENSES OF THE FUND AFTER WAIVERS AND
REIMBURSEMENTS, AS SHOWN IN THE EXPENSE TABLE. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN. The purpose of the expense table and example
is to assist the investor in understanding the various costs and expenses that
may be directly or indirectly borne by shareholders of the Fund. Additional
information may be found under "The Advisers" and "The Administrator."

-5-

<PAGE>

THE TRUST AND THE FUND

TIP Institutional Funds (formerly, The Solon Funds) (the "Trust") offers shares
in four mutual funds. Each share of each mutual fund represents an undivided,
proportionate interest in that mutual fund. This Prospectus offers shares of the
Trust's the Penn Capital Strategic High Yield Bond Fund (the "Strategic High
Yield Fund" or the "Fund").

INVESTMENT OBJECTIVE

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND -- The Strategic High Yield Fund
seeks to maximize income through high current yield and, as a secondary
objective, to produce above average capital appreciation.

There can be no assurance that the Fund will achieve its investment objective.

INVESTMENT POLICIES

PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND -- The Strategic High Yield Fund
invests primarily (and, under normal conditions, at least 65% of its total
assets) in a diversified portfolio of high yield securities (otherwise known as
"junk bonds"). Securities and other financial instruments of issuers that may or
may not be paying interest on a current basis and that are currently
experiencing financial difficulties including, potentially, companies which are
undergoing or are likely to undergo financial restructuring or liquidation, both
under and outside of Federal Bankruptcy Code proceedings, are also included in
the high yield universe and may be acquired by the Fund. The Fund invests
primarily in publicly traded securities, and, to a lesser extent, privately
placed restricted securities and other financial instruments for which there is
a more limited trading market.

Penn Capital Management Company, Inc. (the "Adviser"), believes that the market
for high yield securities is relatively inefficient compared to other securities
due to the limited availability of information on such securities, the lack of
extensive institutional research coverage of and market making activity with
respect to many issuers of such securities, the complexity and difficulty of
evaluation of such securities, and the limited liquidity, at times, of such
securities. The Adviser intends to exploit these inefficiencies using its
knowledge and experience in the high yield market. The Adviser seeks to reduce
risk through diversification, credit analysis and attention to current
developments and trends in both the economy and financial markets.

The Fund will invest primarily in securities rated BB+ or Ba1 or lower by
Standard & Poor's Corporation ("S&P") and/or Moody's Investors Service, Inc.
("Moody's"), and may invest in non-rated securities and in securities rated in
the lowest rating category established by S&P and/or Moody's. See Appendix A for
a discussion of these ratings. Any remaining assets may be invested in equity
securities and investment grade fixed income securities. In addition, the Fund
may engage in short sales against the box.

-6-

<PAGE>

THE FUND

The Fund may invest in repurchase agreements, which entail a risk of loss should
the seller default on its obligation to repurchase the security which is the
subject of the transaction.

The Fund may participate in a securities lending program, which entails a risk
of loss should a borrower fail financially.

The Fund may purchase Rule 144A securities. For a further description of these
securities, see "Rule 144A Securities" in the "Description of Permitted
Investments and Risk Factors."

The Fund may invest in certain instruments such as certain types of mortgage
securities and when-issued securities. The Fund may also invest in federal,
state and municipal government obligations, investment grade corporate bonds,
foreign securities, including emerging market securities, zero coupon,
pay-in-kind and deferred payment bonds, money market instruments, shares of
other investment companies and cash equivalents, and may invest up to 20% of its
assets in American Depository Receipts (ADRs).

Investments in floating rate securities (floaters) and inverse floating rate
securities (inverse floaters) and mortgage-backed securities (mortgage
securities), including principal-only and interest-only stripped mortgage-backed
securities (SMBs), may be highly sensitive to interest rate changes, and highly
sensitive to the rate of principal payments (including prepayments on underlying
mortgage assets).

Additionally, the Fund may, although it has no present intention to do so,
invest a portion of its assets in derivatives, including futures contracts,
options, forwards and swaps, caps, floors and collars. Futures contracts,
options, options on futures contracts, forwards and swaps entail certain costs
and risks, including imperfect correlation between the value of the securities
held by the Fund and the value of the particular derivative instrument, and the
risk that the Fund could not close out a futures or options position when it
would be most advantageous to do so. These investments and techniques require
the Fund to segregate some or all of its cash or liquid securities to cover its
obligations pursuant to such instruments or techniques. As asset segregation
reaches certain levels, the Fund may lose flexibility in managing its
investments properly, responding to shareholder redemption requests, or meeting
other obligations and may be forced to sell other securities that it

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<PAGE>

wanted to retain or to realize unintended gains or losses.

RISK FACTORS

Prospective investors in the Fund should consider the following factors as they
apply to the Fund's allowable investments and policies.

EQUITY SECURITIES -- The Fund may invest in public and privately issued equity
securities, including common and preferred stocks, warrants, rights to subscribe
to common stock and convertible securities. Investments in equity securities in
general are subject to market risks that may cause their prices to fluctuate
over time. The value of securities convertible into equity securities, such as
warrants or convertible debt, is also affected by prevailing interest rates, the
credit quality of the issuer and any call provision. Fluctuations in the value
of equity securities in which the Fund invests will cause the net asset value of
the Fund to fluctuate. An investment in such funds may be more suitable for
long-term investors who can bear the risk of short-term principal fluctuations.

FIXED INCOME SECURITIES -- The market value of fixed income investments will
change in response to interest rate changes and other factors. During periods of
falling interest rates, the values of outstanding fixed income securities
generally rise. Conversely, during periods of rising interest rates, the values
of such securities generally decline. Moreover, while securities with longer
maturities tend to produce higher yields, the prices of longer maturity
securities are also subject to greater market fluctuations as a result of
changes in interest rates. Changes by recognized agencies in the rating of any
fixed income security and in the ability of an issuer to make payments of
interest and principal also affect the value of these investments. Changes in
the value of these securities will not necessarily affect cash income derived
from these securities, but will affect the investing Fund's net asset value.

Investment grade bonds include securities rated BBB- by S&P and/or Baa3 by
Moody's or higher, which may be regarded as having speculative characteristics
as to repayment of principal.

HIGH YIELD SECURITIES -- High yield securities include, but are not limited to,
bonds and preferred stock paying current cash coupons or dividends,
payment-in-kind bonds and preferred stock, zero coupon bonds, interests in term
loans and in revolving credit facilities (or combinations thereof), convertible
securities, units of bonds and warrants or stock, and other securities and
financial instruments, including those on which the issuer is unable to pay
stated dividends or interest payments on a current basis. Investments in high
yield securities involve market risks, credit risks and call risks. Market risks
relate to general interest rate fluctuations. As the general level of interest
rates rise, the market price of medium and long-term securities to general
interest rates fluctuates. High yield securities are generally medium term bonds
and therefore are less sensitive than long-term securities to general interest
rate fluctuations. Credit risks relate to the continuing ability of the issuer
of a security to pay the stated interest or dividends and ultimately to repay
principal upon maturity. Discontinuation of such payments could substantially
adversely affect the market price of the security. Call risks arise from early
call features that many high-yield securities

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<PAGE>

contain. In addition, the Funds may invest in securities on which the issuer is
not currently paying the full amount, or any, of the stated interest or
dividends.

The high yield market consists primarily of fixed income securities that are not
rated or that are rated below investment grade (i.e., Ba1 or lower rating by
Moody's and/or BB+ or lower by S&P), including securities of issuers subject to
proceedings under the Federal Bankruptcy Code. The market for such securities is
relatively inefficient due to its complexity and the limited availability of
information on such securities. Most of these securities pay high current yield,
which provides a cushion against potential price volatility so long as current
payments are continued.

SECURITIES OF FOREIGN ISSUERS -- The Fund may invest to a limited extent in
securities of foreign issuers and in sponsored and unsponsored ADRs. Investments
in the securities of foreign issuers may subject the Fund to investment risks
that differ in some respects from those related to investments in securities of
U.S. issuers. Such risks include future adverse political and economic
developments, possible imposition of withholding taxes on income, possible
seizure, nationalization or expropriation of foreign deposits, possible
establishment of exchange controls or taxation at the source or greater
fluctuation in value due to changes in exchange rates. Foreign issuers of
securities often engage in business practices different from those of domestic
issuers of similar securities, and there may be less information publicly
available about foreign issuers. In addition, foreign issuers are, generally
speaking, subject to less government supervision and regulation than are those
in the United States. Investments in securities of foreign issuers are
frequently denominated in foreign currencies and the value of the Fund's assets
measured in U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and in exchange control regulations, and the Fund may incur costs
in connection with conversions between various currencies.

Moreover, investments in emerging market nations may be considered speculative,
and there may be a greater potential for nationalization, expropriation or
adverse diplomatic developments (including war) or other events which could
adversely effect the economies of such countries or investments in such
countries. The Fund's investments in emerging markets can be considered
speculative, and therefore may offer higher potential for gains and losses than
investments in developed markets of the world. With respect to any emerging
country, there may be a greater potential for nationalization, expropriation or
confiscatory taxation, political changes, government regulation, social
instability or diplomatic developments (including war) which could affect
adversely the economics of such countries or investments in such countries. The
economies of developing countries generally are heavily dependent upon
international trade and, accordingly, have been and may continue to be adversely
affected by trade barriers, exchange or currency controls, managed adjustments
in relative currency values and other protectionist measures imposed or
negotiated by the countries with which they trade.

In addition to the risks of investing in emerging market country debt
securities, the Fund's investment in government, government-related and
restructured debt instruments are subject to special risks, including the
inability or unwillingness to repay principal and interest, requests to
reschedule or restructure outstanding debt, and requests to extend additional
loan amounts. The

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<PAGE>

Fund may have limited recourse in the event of default on such debt instruments.

PORTFOLIO TURNOVER -- The annual portfolio turnover rate for the Fund, under
normal circumstances, is not expected to exceed 200%. An annual portfolio
turnover rate in excess of 100% may result from the Adviser's investment
strategy or from prevailing market conditions. Portfolio turnover rates in
excess of 100% may result in higher transaction costs, including increased
brokerage commissions, and higher levels of taxable capital gain. See "Taxes."

INVESTMENT LIMITATIONS

The foregoing percentages (except the limitation on borrowing) will apply at the
time of the purchase of a security.

THE ADVISER

PENN CAPITAL MANAGEMENT COMPANY, INC.

Penn Capital Management Company, Inc. ("Penn Capital" ), 52 Haddonfield-Berlin
Road, Suite 1000, Cherry Hill, New Jersey 08034, is a professional investment
management firm founded in 1987 and registered as an investment adviser under
the Investment Advisers Act of 1940. Richard

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<PAGE>

A. Hocker is a founding partner and Chief Investment Officer of Penn Capital,
which manages the investment portfolios of institutions and high net worth
individuals, and which currently has assets under management of approximately
$500 million. Penn Capital employs a staff of 17 and manages monies in a variety
of investment styles through either separate account management or one of its
private investment funds.

Penn Capital serves as the investment adviser for the Strategic High Yield Fund
under an investment advisory agreement (the "Advisory Agreement"). Under the
Advisory Agreement, Penn Capital makes the investment decisions for the assets
of the Fund and continuously reviews, supervises and administers the Funds'
investment programs, subject to the supervision of, and policies established by,
the Trustees of the Trust.

For its services, Penn Capital is entitled to a fee, which is calculated daily
and paid monthly, at an annual rate of .55% of the average daily net assets of
the Strategic High Yield Fund. Penn Capital has voluntarily agreed to waive all
or a portion of its fee and to reimburse expenses of the Strategic High Yield
Fund in order to limit its total operating expenses (as a percentage of average
daily net assets on an annualized basis) to not more than .68%. Penn Capital
reserves the right, in its sole discretion, to terminate these voluntary fee
waivers and reimbursements at any time.

The Fund is managed by a team consisting of certain principals of Penn Capital,
including co-managers Richard A. Hocker and Kathleen A. News.

Prior to founding the Adviser, Mr. Hocker was a shareholder and Senior Portfolio
Manager of Delaware Management Co., an investment management firm which, during
Mr. Hocker's tenure, increased its assets under management from $300 million to
$21 billion. At Delaware Management Co., Mr. Hocker was instrumental in
developing and managing a variety of mutual funds, including the Delchester Bond
Fund, one of the nation's first high yield bond mutual funds, and where he
personally managed, at one point, approximately $2 billion of assets. In
addition, he was responsible for creating and managing accounts for Delaware's
first ERISA clients.

Kathleen A. News, a co-founder of the Adviser, serves as the Managing Director
of the Adviser and co-portfolio manager of the Strategic High Yield Fund. Ms.
News has over 20 years of investment experience at both the Adviser and Delaware
Management Co., including over 10 years managing high yield portfolios. While at
Delaware, Ms. News served as a portfolio manager for Delaware Cash Reserve, as
well as managing fixed income accounts for various Fortune 500 institutions.

PAST PERFORMANCE OF THE ADVISER

In December 1989, the Adviser instituted a managed "active" high yield
investment philosophy which concentrates in riskier, high yield securities and
financial instruments, and which may modestly overweight investments in a single
industry, issuer or class of security. This "active" philosophy had

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been developed over a lengthy period of time by the Adviser's portfolio
managers.

The following table presents historical "composite" performance data for all
discretionary "active" high yield accounts that are managed in a manner that is
equivalent in all material respects to how the Adviser will manage the Fund.
This table also compares the performance of these accounts against the CS First
Boston High Yield Index and the Merrill Lynch High Yield Index. The computed
rates of return include the impact of capital appreciation as well as the
reinvestment of interest and dividends. THIS DATA DOES NOT INDICATE HOW THE
STRATEGIC HIGH YIELD FUND MAY PERFORM IN THE FUTURE.

Penn Capital CS First Boston Merrill Lynch High
Time Period High Yield Composite(1) High Yield Index(2) Yield Index(3)
- ----------- ----------------------- ------------------- ------------------

<S> <C> <C> <C>
One year ended 9/30/97: 14.66% 15.73% 14.31%
Three years ended 9/30/97: 17.13% 13.50% 13.76%
Five years ended 9/30/97: 16.00% 11.84% 11.47%
Since Inception (12/31/89): 20.34% 13.69% 13.01%
</TABLE>

(1) Penn Capital's High Yield Composite is a dollar weighted composite of fully
discretionary, separately managed "active" high yield accounts under the
Adviser's management for at least one full quarter. The Penn Capital High
Yield Composite consisted of 15 accounts with approximately $111 million in
assets as of September 30, 1997.

(2) The CS First Boston High Yield Index is an unmanaged, trader-priced
portfolio constructed to mirror the public high yield debt market.
Revisions to the Index are effected weekly. The Index reflects the
reinvestment of dividends.

(3) The Merrill Lynch High Yield Index consists of below investment grade
corporate securities tracked by Merrill Lynch. The Index reflects the
reinvestment of dividends.

THE MODIFIED BANK ADMINISTRATION INSTITUTE (BAI) METHOD IS USED TO COMPUTE A
TIME WEIGHTED RATE OF RETURN IN ACCORDANCE WITH STANDARDS SET BY THE ASSOCIATION
OF INVESTMENT MANAGEMENT AND RESEARCH (AIMR). THE PERFORMANCE FIGURES FOR THE
ADVISER'S ACCOUNTS DESCRIBED ABOVE ARE NET OF ADVISORY FEES AND EXPENSES. THE
EFFECT OF DEDUCTING OPERATING EXPENSES ON THE FUND'S ANNUALIZED PERFORMANCE,
INCLUDING THE COMPOUNDING EFFECT OVER TIME, MAY BE SUBSTANTIAL.

ALL INFORMATION PRESENTED RELIES ON DATA SUPPLIED BY THE ADVISER AND STATISTICAL
SERVICES, REPORTS OR OTHER SOURCES BELIEVED BY THE TRUST TO BE RELIABLE. IT HAS
NOT BEEN VERIFIED OR AUDITED.

THE ADMINISTRATOR

SEI Fund Resources (the "Administrator") provides the Trust with administrative
services, including regulatory reporting and all necessary office space,
equipment, personnel, and facilities.

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<PAGE>

For these administrative services, the Administrator is entitled to a fee from
the Fund, which is calculated daily and paid monthly, at an annual rate of .10%
of the Fund's average daily net assets up to $250 million, .08% on the next $250
million of such assets, and .07% of such assets in excess of $500 million. The
Fund is subject to a minimum annual fee of $75,000 for the first class of shares
and $15,000 for each additional class of shares, which may be reduced at the
sole discretion of the Administrator.

The Administrator also serves as shareholder servicing agent for the Trust under
a shareholder servicing agreement with the Trust.

THE TRANSFER AGENT

THE DISTRIBUTOR

PORTFOLIO TRANSACTIONS

The Fund may execute brokerage or other agency transactions through the
Distributor for which the Distributor may receive usual and customary
compensation. The Adviser obtains research information from a number of sources,
including large brokerage houses, trade and financial journals and publications,
corporate reports, rating service manuals, and interviews with corporate
executives and other industry sources. The Adviser may select brokers on the
basis of the research, statistical and pricing services they provide to the
Fund, as well as on the basis of the Adviser's business relationship with the
brokers. A commission paid to such brokers may be higher than that which another
qualified broker would have charged for effecting the same transactions,
provided that such commissions are in compliance with the Securities Exchange
Act of 1934, as amended, and that the Adviser determines in good faith that the
commission is reasonable in terms of either the transaction or the overall
responsibility of the Adviser to the Fund and the Adviser's other clients. The
Adviser may direct commission business for the Fund to designated broker-dealers
(including the Distributor) in connection with such broker-dealers' payment of
certain Fund expenses.

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<PAGE>

orders for the Fund with qualified broker-dealers who refer clients to the Fund.

Some securities considered for investment by the Fund may also be appropriate
for other accounts and/or clients served by the Adviser. If the purchase or sale
of securities consistent with the investment policies of the Fund and another of
the Adviser's accounts and/or clients are considered at or about the same time,
transactions in such securities will be allocated among the Fund and the other
accounts and/or clients in a manner deemed equitable by the Adviser.

PURCHASE AND REDEMPTION OF SHARES

Purchases and redemptions may be made through the Transfer Agent on each day
that the New York Stock Exchange is open for business ("Business Day").
Investors may purchase and redeem shares of the Fund directly through the
Transfer Agent at: TIP Institutional Funds, P.O. Box 419805, Kansas City,
Missouri 64141-6805, by mail or wire transfer. All shareholders may place orders
by telephone; when market conditions are extremely busy, it is possible that
investors may experience difficulties placing orders by telephone and may wish
to place orders by mail. Purchases and redemptions of shares of the Fund may be
made on any Business Day.

Certain brokers may assist their clients in the purchase or redemption of shares
and charge a fee for this service in addition to the Fund's public offering
price.

PURCHASES BY MAIL

PURCHASES BY WIRE TRANSFER

Shareholders having an account with a commercial bank that is a member of the
Federal Reserve System may purchase shares of the Fund by requesting their bank
to transmit funds by wire to: United Missouri Bank of Kansas, N.A.; ABA
#10-10-00695; for Account Number 98-7060-116-8; Further Credit: [Penn Capital
Strategic High Yield Bond Fund]. The shareholder's name and account number must
be specified in the wire.

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<PAGE>

GENERAL INFORMATION REGARDING PURCHASES

EXCHANGES

Shareholders of the Fund may exchange their Institutional Class shares for
Institutional Class shares of the other TIP Institutional Funds that are then
offering their shares to the public. Exchanges are made at net asset value. An
exchange is considered a sale of shares and may result in capital gain or loss
for federal income tax purposes. The shareholder must have received a current
prospectus for the new Fund before any exchange will be effected, and the
exchange privilege may be exercised only in those states where shares of the new
Fund may legally be sold. If the Transfer Agent (or its authorized agent)
receives exchange instructions in writing or by telephone (an "Exchange
Request") in good order prior to the calculation of net asset value on any
Business Day, the exchange will be effected that day. The liability of the Fund
or the Transfer Agent for fraudulent or unauthorized telephone instructions may
be limited as described below. The Trust reserves the right to modify or
terminate this exchange offer on 60 days' notice.

Because excessive trading can hurt Fund performance and shareholders, the Fund
reserves the right

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<PAGE>

to temporarily or permanently terminate the exchange privilege of any investor
who makes more than four exchanges into and out of the Funds per calendar year.
Accounts under common ownership or control, including accounts with the same
taxpayer identification number, will be counted together for purposes of the
four exchange limit.

REDEMPTIONS

Redemption requests in good order received by the Transfer Agent (or its
authorized agent) prior to the calculation of net asset value on any Business
Day will be effective that day. To redeem shares of the Fund, shareholders must
place their redemption orders with the Transfer Agent (or its authorized agent)
prior to the calculation of net asset value on any Business Day. Otherwise, the
redemption order will be effective on the next Business Day. The redemption
price of shares of the Fund is the net asset value per share of the Fund next
determined after the redemption order is effective. Payment of redemption
proceeds will be made as promptly as possible and, in any event, within seven
days after the redemption order is received, provided, however, that redemption
proceeds for shares purchased by check (including certified or cashier's checks)
will be forwarded only upon collection of payment for such shares; collection of
payment may take up to 15 days. Shareholders may not close their accounts by
telephone.

The right of redemption may be suspended or the date of payment of redemption
proceeds postponed during certain periods as set forth more fully in the
Statement of Additional Information.

VALUATION OF SHARES

The net asset value per share of the Fund is determined by dividing the total
market value of the Fund's investments and other assets, less any liabilities,
by the total number of outstanding shares of the Fund. Net asset value per share
is determined daily as of the close of regular trading on the New York Stock
Exchange (normally, 4:00 p.m., Eastern time) on any Business Day.

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<PAGE>

PERFORMANCE

From time to time, the Fund may advertise yield and total return. These figures
will be based on historical earnings and are not intended to indicate future
performance. No representation can be made regarding actual future yields or
returns. The yield of the Fund refers to the annualized income generated by an
investment in the Fund over a specified 30-day period. The yield is calculated
by assuming that the same amount of income generated by the investment during
that period is generated in each 30-day period over one year and is shown as a
percentage of the investment.

The Fund may periodically compare their performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical
Services, Inc.), financial and business publications and periodicals, broad
groups of comparable mutual funds, unmanaged indices, which may assume
investment of dividends but generally do not reflect deductions for
administrative and management costs, or other investment alternatives. The Fund
may quote Morningstar, Inc., a service that ranks mutual funds on the basis of
risk-adjusted performance, and Ibbotson Associates of Chicago, Illinois, which
provides historical returns of the capital markets in the U.S. The Fund may also
quote the Frank Russell Company or Wilshire Associates, consulting firms that
compile financial characteristics of common stocks and fixed income securities,
regarding non-performance-related attributes of the Fund's portfolio. The Fund
may use long term performance of these capital markets to demonstrate general
long-term risk versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. The Fund may also quote
financial and business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.

TAXES

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<PAGE>

to federal, state and local income taxes. Further information concerning taxes
is set forth in the Statement of Additional Information.

TAX STATUS OF THE FUND:

TAX STATUS OF DISTRIBUTIONS:

The Fund will distribute all of its net investment income (including, for this
purpose, net short-term capital gain) to shareholders. Dividends from the Fund's
net investment income will be taxable to shareholders as ordinary income whether
received in cash or in additional shares. Distributions from net investment
income will qualify for the dividends-received deduction for corporate
shareholders only to the extent such distributions are derived from dividends
paid by domestic corporations; however, such distributions which do qualify for
the dividends-received deduction may be subject to the corporate alternative
minimum tax. Any net capital gains will be distributed annually and will be
taxed to shareholders as gains from the sale of exchange of a capital asset held
for more than one year, regardless of how long the shareholder has held shares.
The Fund will make annual reports to shareholders of the federal income tax
status of all distributions, including the amount of dividends eligible for the
dividends-received deduction.

Each sale, exchange or redemption of the Fund's shares is a taxable event to the
shareholder.

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<PAGE>

GENERAL INFORMATION

THE TRUST

TRUSTEES OF THE TRUST

VOTING RIGHTS

Each share held entitles the Shareholder of record to one vote for each share.
In other words, each shareholder of record is entitled to one vote for each
share held on the record date for the meeting. Shareholders of a Class or a Fund
will vote separately on matters pertaining solely to the Class or the Fund. As a
Delaware business trust, the Trust is not required to hold annual meetings of
Shareholders, but approval will be sought for certain changes in the operation
of the Trust and for the election of Trustees under certain circumstances.

REPORTING

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<PAGE>

SHAREHOLDER INQUIRIES

DIVIDENDS AND DISTRIBUTIONS

COUNSEL AND INDEPENDENT PUBLIC ACCOUNTANTS

Morgan, Lewis & Bockius LLP serves as counsel to the Trust. Ernst & Young LLP
serves as the independent public accountants for the Trust.

CUSTODIAN

DESCRIPTION OF PERMITTED INVESTMENTS AND RISK FACTORS

The following is a description of permitted investments for the Fund:

AMERICAN DEPOSITARY RECEIPTS ("ADRs") -- ADRs are securities, typically issued
by a U.S. financial institution (a "depositary"), that evidence ownership
interests in a security or a pool of securities issued by a foreign issuer and
deposited with the depositary. ADRs may be available through "sponsored" or
"unsponsored" facilities. A sponsored facility is established jointly by the

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<PAGE>

issuer of the security underlying the receipt and a depositary, whereas an
unsponsored facility may be established by a depositary without participation by
the issuer of the underlying security. Holders of unsponsored depositary
receipts generally bear all the costs of the unsponsored facility. The
depositary of an unsponsored facility frequently is under no obligation to
distribute shareholder communications received from the issuer of the deposited
security or to pass through, to the holders of the receipts, voting rights with
respect to the deposited securities.

ASSET-BACKED SECURITIES -- Asset-backed securities are secured by non-mortgage
assets such as company receivables, truck and auto loans, leases and credit card
receivables. Such securities are generally issued as pass-through certificates,
which represent undivided fractional ownership interests in the underlying pools
of assets. Such securities also may be debt instruments, which are also known as
collateralized obligations and are generally issued as the debt of a special
purpose entity, such as a trust, organized solely for the purpose of owning such
assets and issuing such debt.

BORROWING -- The Fund may borrow money equal to 5% of its total assets for
temporary purposes to meet redemptions or to pay dividends. Although the
principal of any borrowing will be fixed, the Fund's assets may change in value
during the time the borrowing is outstanding.

HIGH YIELD FOREIGN SOVEREIGN DEBT SECURITIES -- Investing in fixed and floating
rate high yield foreign sovereign debt securities will expose the Fund to the
direct or indirect consequences of political, social or economic changes in the
countries that issue the securities. The ability and willingness of sovereign
obligers in developing and emerging market countries or the governmental
authorities that control repayment of their external debt to pay principal and
interest on such debt when due may depend on general economic and political
conditions within the relevant country. Countries such as those in which the
Fund may invest have historically experienced, and may continue to experience,
high rates of inflation, high interest rates, exchange rate or trade
difficulties and extreme poverty and unemployment. Many of these countries are
also characterized by political uncertainty or instability. Additional factors
which may influence the ability or willingness to service debt include, but are
not limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relevant size of its debt
service burden to the economy as a whole, and its government's policy towards
the International Monetary Fund, the World Bank and other international
agencies.

HIGH YIELD SECURITIES -- Securities rated below investment grade are often
referred to as "junk bonds." Fixed income securities are subject to the risk of
an issuer's ability to meet principal

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<PAGE>

and interest payments on the obligation (credit risk), and may also be subject
to price volatility due to such factors as interest rate sensitivity, market
perception of the creditworthiness of the issuer and general market liquidity
(market risk). Lower rated or unrated (i.e., high yield) securities are more
likely to react to developments affecting market and credit risk than are more
highly rated securities, which primarily react to movements in the general level
of interest rates. The market values of fixed-income securities tend to vary
inversely with the level of interest rates. Yields and market values of high
yield securities will fluctuate over time, reflecting not only changing interest
rates but the market's perception of credit quality and the outlook for economic
growth. When economic conditions appear to be deteriorating, medium to lower
rated securities may decline in value due to heightened concern over credit
quality, regardless of prevailing interest rates. Investors should carefully
consider the relative risks of investing in high yield securities and understand
that such securities are not generally meant for short-term investing.

The high yield market is relatively new and its growth has paralleled a long
period of economic expansion and an increase in merger, acquisition and
leveraged buyout activity. Adverse economic developments can disrupt the market
for high yield securities, and severely affect the ability of issuers,
especially highly leveraged issuers, to service their debt obligations or to
repay their obligations upon maturity which may lead to a higher incidence of
default on such securities. In addition, the secondary market for high yield
securities, which is concentrated in relatively few market makers, may not be as
liquid as the secondary market for more highly rated securities. As a result,
the Fund's adviser could find it more difficult to sell these securities or may
be able to sell the securities only at prices lower than if such securities were
widely traded. Furthermore the Fund may experience difficulty in valuing certain
securities at certain times. Prices realized upon the sale of such lower rated
or unrated securities, under these circumstances, may be less than the prices
used in calculating the Fund's net asset value.

Prices for high yield securities may be affected by legislative and regulatory
developments. These laws could adversely affect the Fund's net asset value and
investment practices, the secondary market value for high yield securities, the
financial condition of issuers of these securities and the value of outstanding
high yield securities.

Lower rated or unrated debt obligations also present risks based on payment
expectations. If an issuer calls the obligations for redemption, the Fund may
have to replace the security with a lower yielding security, resulting in a
decreased return for investors. If the Fund experiences unexpected net
redemptions, it may be forced to sell its higher rated securities, resulting in
a decline in the overall credit quality of the Fund's investment portfolio and
increasing the exposure of the Fund to the risks of high yield securities.
Credit quality in the junk bond market can change suddenly and unexpectedly, and
even recently issued credit ratings may not fully reflect the actual risks
imposed by a particular security.

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securities for which there is no active secondary market, and repurchase
agreements with durations or maturities over 7 days in length.

LOAN PARTICIPATIONS AND ASSIGNMENTS -- Loan participations are interests in
loans to corporations or governments which are administered by the lending bank
or agent for a syndicate member ("intermediary bank"). In a loan participation,
the borrower will be deemed to be the issuer of the participation interest,
except to the extent the Fund derives its rights from the intermediary bank.
Because the intermediary bank does not guarantee a loan participation in any
way, a loan participation is subject to the credit risks generally associated
with the underlying borrower. In the event of the bankruptcy or insolvency of
the borrower, a loan participation may be subject to certain
defenses that can be asserted by such borrower as a result of improper conduct
by the intermediary bank. In addition, in the event the underlying borrower
fails to pay principal and interest when due, the Fund may be subject to delays,
expenses and risks that are greater than those that would have been involved if
the Fund had purchased a direct obligation of such borrower. Under the terms of
a loan participation, the Fund may be regarded as a creditor of the intermediary
bank, (rather than of the underlying borrower), so that the Fund may also be
subject to the risk that the intermediary bank may become insolvent.

Loan assignments are investments in assignments of all or a portion of certain
loans from third parties. When a Fund purchases assignments from lenders it will
acquire direct rights against the borrower on the loan. Since assignments are
arranged through private negotiations between potential assignees and assignors,
however, the rights and obligations acquired by the Fund may differ from, and be
more limited than, those held by the assigning lender. Loan participations and
assignments may be considered liquid, as determined by the Fund's adviser based
on criteria approved by the Board of Trustees.

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RULE 144A SECURITIES -- Rule 144A securities are securities exempt from
registration on resale pursuant to Rule 144A under the 1933 Act. Rule 144A
securities are traded in the institutional market pursuant to this registration
exemption, and, as a result, may not be as liquid as exchange-traded securities
since they may only be resold to certain qualified institutional investors. Due
to the relatively limited size of this institutional market, these securities
may affect the Fund's liquidity to the extent that qualified institutional
buyers become, for a time, uninterested in purchasing such securities.
Nevertheless, Rule 144A securities may be treated as liquid securities pursuant
to guidelines adopted by the Trust's Board of Trustees.

U.S. GOVERNMENT SECURITIES -- Bills, notes and bonds issued by the U.S.
Government and backed by the full faith and credit of the United States.

-24-

<PAGE>

receipts evidencing ownership and maintains the register.

VARIABLE AND FLOATING RATE INSTRUMENTS -- Certain obligations may carry variable
or floating rates of interest, and may involve a conditional or unconditional
demand feature. Such instruments bear interest at rates which are not fixed, but
which vary with changes in specified market rates or indices. The interest rates
on these securities may be reset daily, weekly, quarterly or some other reset
period, and may have a floor or ceiling on interest rate changes. There is a
risk that the current interest rate on such obligations may not accurately
reflect existing market interest rates. A demand instrument with a demand notice
exceeding seven days may be considered illiquid if there is
no secondary market for such security.

WARRANTS -- Warrants are instruments giving holders the right, but not the
obligation, to buy equity or fixed income securities of a company at a given
price during a specified period.

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APPENDIX

DESCRIPTION OF CORPORATE BOND RATINGS

DESCRIPTION OF MOODY'S LONG-TERM RATINGS

Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risk appear somewhat larger than the Aaa securities.

A Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper- medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.

Baa Bonds which are rated Baa are considered as medium-grade obligations (i.e.,
they are neither highly protected nor poorly secured). Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well- assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

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DESCRIPTION OF STANDARD & POOR'S LONG-TERM RATINGS

Investment Grade

AAA Debt rated 'AAA' has the highest rating assigned by S&P. Capacity to pay
interest and repay principal is extremely strong.

AA Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated debt only in small degree.

A Debt rated 'A' has a strong capacity to pay interest and repay
principal, although it is somewhat more susceptible to adverse effects
of changes in circumstances and economic conditions than debt in higher-
rated categories.

BBB Debt rated 'BBB' is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher
rated categories.

BB Debt rated 'BB' has less near-term vulnerability to default than other
speculative grade debt. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions that
could lead to inadequate capacity to meet timely interest and principal
payments. The 'BB' rating category is also used for debt subordinated to
senior debt that is assigned an actual or implied 'BBB-' rating.

B Debt rate 'B' has greater vulnerability to default but presently has the
capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions would likely impair capacity
or willingness to pay interest and repay principal. The 'B' rating
category also is used for debt subordinated to senior debt that is
assigned an actual or implied 'BB' or 'BB-' rating.

CCC Debt rated 'CCC' has a current identifiable vulnerability to default,
and is dependent on favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The 'CCC' rating category also is used for debt
subordinated to senior debt that is assigned an actual or implied 'B' or
'B-' rating.

CC The rating 'CC' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC' rating.

C The rating 'C' is typically applied to debt subordinated to senior debt
which is assigned an actual or implied 'CCC-' debt rating. The 'C'
rating may be used to cover a situation where a bankruptcy petition has
been filed, but debt service payments are continued.

C1 Debt rated 'C1' is reserved for income bonds on which no interest is
being paid.

A-2

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D Debt is rated 'D' when the issue is in payment default, or the obligor
has filed for bankruptcy. The 'D' rating is used when interest or
principal payments are not made on the date due, even if the applicable
grace period has not expired, unless S&P believes that such payments
will be made during such grace period.

DESCRIPTION OF DUFF & PHELPS' LONG-TERM DEBT RATINGS

AAA Highest credit quality. The risk factors are negligible, being only
slightly more than for risk-free U.S. Treasury debt.

AA+ High credit quality. Protection factors are strong. Risk is modest but
AA- may vary slightly from time to time because of economic conditions.

A+ Protection factors are average but adequate. However, risk factors are
A- more variable and greater in periods of economic stress.

BBB+ Below average protection factors but still considered sufficient for
BBB- prudent investment. Considerable variability in risk during economic
cycles.

BB+ Below investment grade but deemed likely to meet obligations when due.
BB Present or prospective financial protection factors fluctuate according
BB- to industry conditions or company fortunes. Overall quality may move up
or down frequently within this category.

B+ Below investment grade and possessing risk that obligations will not be
B met when due. Financial protection factors will fluctuate widely
B- according to economic cycles, industry conditions and/or company
fortunes. Potential exists for frequent changes in the rating within
this category or into a higher or lower rating grade.

CCC Well below investment grade securities. Considerable uncertainty exists
as to timely payment of principal, interest or preferred dividends.
Protection factors are narrow and risk can be substantial with
unfavorable economic/industry conditions, and/or with unfavorable
company developments.

DD Defaulted debt obligations. Issuer failed to meet scheduled principal
and/or interest payments.

DP Preferred stock with dividend arrearages.

DESCRIPTION OF FITCH'S LONG-TERM RATINGS

Investment Grade Bond

AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.

AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated 'AAA'. Because
bonds rated in the 'AAA' and 'AA' categories are not significantly
vulnerable to foreseeable future developments, short-term debt of these
issuers is generally rated 'F-1+'.

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A Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to
be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

BBB Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than
for bonds with higher ratings.

Speculative Grade Bond

BB Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified
which could assist the obligor in satisfying its debt service
requirements.

B Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of
continued timely payment of principal and interest reflects the
obligor's limited margin of safety and the need for reasonable business
and economic activity throughout the life of the issue.

CCC Bonds have certain identifiable characteristics which, if not remedied,
may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.

CC Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C Bonds are in imminent default in payment of interest or principal.

DDD, DD,
and D Bonds are in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of
their ultimate recovery value in liquidation or reorganization of the
obligor. 'DDD' represents the highest potential for recovery on these
bonds, and 'D' represents the lowest potential for recovery.

DESCRIPTION OF IBCA'S LONG-TERM RATINGS

AAA Obligations for which there is the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or
financial conditions are unlikely to increase investment risk
substantially.

AA Obligations for which there is a very low expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial. Adverse changes in business, economic or financial
conditions may increase investment risk, albeit not very significantly.

A-4

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A Obligations for which there is a low expectation of investment risk.
Capacity for timely repayment of principal and interest is strong,
although adverse changes in business, economic or financial conditions
may lead to increased investment risk.

BBB Obligations for which there is currently a low expectation of
investment risk. Capacity for timely repayment of principal and
interest is adequate, although adverse changes in business, economic or
financial conditions are more likely to lead to increased investment
risk than for obligations in other categories.

BB Obligations for which there is a possibility of investment risk
developing. Capacity for timely repayment of principal and interest
exists, but is susceptible over time to adverse changes in business,
economic or financial conditions.

B Obligations for which investment risk exists. Timely repayment of
principal and interest is not sufficiently protected against adverse
changes in business, economic or financial conditions.

CCC Obligations for which there is a current perceived possibility of
default. Timely repayment of principal and interest is dependent on
favorable business, economic or financial conditions.

CC Obligations which are highly speculative or which have a high risk of
default.

C Obligations which are currently in default.

DESCRIPTION OF THOMSON BANKWATCH'S LONG-TERM DEBT RATINGS

Investment Grade

AAA The highest category; indicates that the ability to repay principal and
interest on a timely basis is very high.

AA The second-highest category; indicates a superior ability to repay
principal and interest on a timely basis, with limited incremental risk
compared to issues rated in the highest category.

A The third-highest category; indicates the ability to repay principal
and interest is strong. Issues rated "A" could be more vulnerable to
adverse developments (both internal and external) than obligations with
higher ratings.

BBB The lowest investment-grade category; indicates an acceptable capacity
to repay principal and interest. Issues rated "BBB" are, however, more
vulnerable to adverse developments (both internal and external) than
obligations with higher ratings.

Non-Investment Grade

BB While not investment grade, the "BB" rating suggests that the
likelihood of default is considerably less than for lower-rated issues.
However, there are significant uncertainties that could affect the
ability to adequately service debt obligations.

A-5

<PAGE>

B Issues rated "B" show a higher degree of uncertainty and therefore
greater likelihood of default than higher-rated issues. Adverse
developments could well negatively affect the payment of interest and
principal on a timely basis.

CCC Issues rated "CCC" clearly have a high likelihood of default, with
little capacity to address further adverse changes in financial
circumstances.

CC "CC" is applied to issues that are subordinate to other obligations
rated "CCC" and are afforded less protection in the event of bankruptcy
or reorganization.

D Default

A-6

<PAGE>

Trust:
TIP INSTITUTIONAL FUNDS

Fund:
PENN CAPITAL STRATEGIC HIGH YIELD BOND FUND

Adviser:
PENN CAPITAL MANAGEMENT COMPANY, INC.

Distributor:
SEI INVESTMENTS DISTRIBUTION CO.

Administrator:
SEI FUND RESOURCES

Legal Counsel:
MORGAN, LEWIS & BOCKIUS LLP

Independent Auditors:
ERNST & YOUNG LLP