<PAGE>
UAM Funds
Annual Report
-------------------------
FPA Crescent Portfolio
-------------------------
March 31, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
MARCH 31, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments.................................................... 7
Statement of Assets and Liabilities......................................... 13
Statement of Operations..................................................... 14
Statement of Changes in Net Assets.......................................... 15
Financial Highlights........................................................ 16
Notes to Financial Statements............................................... 17
Report of Independent Accountants........................................... 23
</TABLE>
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UAM FUNDS FPA CRESCENT PORTFOLIO
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April 20, 1998
Dear Fellow Shareholders:
During 1998's first quarter, expected growth in profits was at its lowest
level since the 1990-1991 recession, interest rates increased slightly, and
various companies warned of earnings weakness. Against this bleak backdrop,
stocks rocketed with returns ranging from the small-cap Russell 2000's 10.1%
gain to the S&P 500's 14.0% jump. The comparative returns for Crescent and its
relevant benchmark indexes are shown at the end of this letter.
The S&P 500 index has compounded the past 10 years at 18%, but earnings growth
has been only 9%. If such a disparity were to continue, the S&P 500 would be
trading at 31.9x earnings five years from now and 44.3x earnings in ten years.
We believe it is safe to conclude that future returns will not be as robust as
what we have seen in recent years.
Many investors today, individual and institutional, believe that old measures
of risk no longer apply--that we are in a new "paradigm." We do not fall into
that camp. We believe that stocks continue to increase because there is no
reason to sell or, as written by one market pundit, Jim Grant, "The stock mar-
ket is rising out of habit." The majority of the stock market's appreciation
has come from the expansion of the multiple of earnings that an investor will
pay for a company. The S&P 500 now trades at 23x consensus estimates for 1998
profits--an all-time high.
As a result of such lofty valuations, Crescent continues to maintain a portfo-
lio whose characteristics are much less expensive than the market. The price-
/earnings ratio, based on 1998's estimates is 34% cheaper than the average of
the two stock indexes below.
<TABLE>
<CAPTION>
RATIOS LEHMAN BROS.
(WEIGHTED AVERAGE) CRESCENT RUSSELL 2500 S&P 500 GOV'T/CORP.
- ------------------ --------- ------------ ------- ------------
<S> <C> <C> <C> <C>
Stocks
Price/Earnings 1998 est. ........... 17.3x 25.8x 26.3x --
Price/Earnings 1999 est. ........... 13.7x 19.7x 22.1x --
Price/Book.......................... 2.6x 3.1x 4.6x --
Dividend Yield...................... 1.5% 1.3% 1.4% --
Bonds
Duration............................ 4.0 years -- -- 5.4 years
Maturity............................ 7.0 years -- -- 10.2 years
Yield............................... 8.1% -- -- 6.0%
</TABLE>
The risks to the stock market are inflation, which up to this point has been
benign, and corporate earnings, which have compounded these past five years at
17%--
1
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UAM FUNDS FPA CRESCENT PORTFOLIO
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unsustainable feats, in combination and possibly individually. Inflation lives
in some sectors, especially service, which is two thirds of our economy. While
labor wages continue to rise, three things can happen: (1) productivity rises
at a faster rate; (2) companies raise prices; (3) corporate operating margins
compress. We believe that should the market correct, barring some external in-
fluence such as a war, declining operating margins will be the most likely
culprit. Therefore, we are focusing our efforts on those companies that we be-
lieve have a greater ability to maintain or expand margins.
One such company is Midas Inc. Midas, recently spun off from Whitman Corp.,
has a franchise system with 2,700 sites in the U.S. and abroad. Returns have
been terrible the last couple of years. However, the board has hired a new
CEO, Wendel Province, former President of Pep Boys, to turn the business
around. Management has begun taking the appropriate steps. Costs should de-
cline as Midas closes the losing company-owned stores that represent just 5%
of their store base. The majority of these stores will be franchised. Sales
should increase over time. Additional products can be sold through their dis-
tribution network, e.g., they are beginning to sell batteries this year. Fur-
thermore, they can make much better use of their advertising dollars. How many
realize that they provide more than brake and muffler service? They also have
a tremendous store of value in their real estate that has been accumulated
over three decades. Should Midas earn just what they earned three years ago--a
reasonable proposition given management's changes--our purchases at $16 will
be at 7x those earnings.
Green Tree Financial Corporation, a leading diversified consumer and commer-
cial lender, negatively impacted our performance in 1997, but has benefited
the portfolio in 1998. Last year, tremendous concern arose surrounding Green
Tree, specifically their "gain-on-sale" accounting treatment of earnings and
the rapid prepayment of mortgage loans that impacted a residual asset that
they carried on their books. Today, after increasing our position as the stock
declined 65% from its high, we stand vindicated. Conseco, Inc., a fast-growing
insurance company, announced its plan to purchase Green Tree in a stock trans-
action. At current prices the deal reflects a price of $46 per Green Tree
share, 77% above the average cost of our position that was accumulated from
mid-1997 to the first quarter of 1998. Green Tree serves as a good example of
why we do not believe in the Efficient Market Theory. Analysts and investors
did not understand the true nature of Green Tree's earnings, at either its
peak or nadir. We believe that we understood better than the average investor
who sold the stock as it declined what Green Tree's business fundamentals were
and the true nature of its earnings. Market and individual stock volatility
provides opportunity for the patient and educated investor.
2
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UAM FUNDS FPA CRESCENT PORTFOLIO
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It is always worthwhile to read Warren Buffett's annual letter to shareholders
in the Berkshire Hathaway annual report (you can get them going back to 1977
at Berkshire Hathaway's web site). In total, these annual installments make
the most worthwhile investment book available--and, as a value investor, I
must point out that it is free. In Mr. Buffett's most recent letter, he
pointed out that "...returns on equity remain exceptionally high. If they stay
there--and if interest rates hold near recent levels--there is not reason to
think of stocks as generally overvalued." The day his annual report came with
these thoughts, the stock market closed at higher levels and newspapers at-
tributed the rise to Mr. Buffett's comments. But his letter to shareholders
continued, "On the other hand, returns on equity are not a sure thing to re-
main at, or even near, their present levels...Today's price levels... have ma-
terially eroded the "margin of safety' that Ben Graham identified as the cor-
nerstone of intelligent investing." Mr. Buffett, it would appear, is finding
the current price levels of the market challenging, as we are. Support for
this might be taken from his recent investments in silver and twenty-year
Treasury Bonds.
We continue to believe that the stock market offers better value in smaller
companies. The median market capitalization of companies held by Crescent is
$440 million. Listed below are Crescent's ten largest holdings, excluding
short-term investments, as of March 31, 1998. These investments account for
30.2% of the portfolio's net assets.
COMMON STOCK
NCR Corporation
Storage Technology Corporation
Foremost Corporation of America
AMERCO
Midas Inc.
Green Tree Financial Corporation
Prime Retail, Inc. REIT
Arrow Electronics, Inc.
BONDS & NOTES
U.S. Treasury Inflation Indexed Notes, 3.375%, 1/15/07
Advantica Restaurant Group, Inc., 11.25%, 1/15/08
Crescent had the following net asset composition at March 31, 1998.
<TABLE>
<S> <C>
Common Stocks, long..................................................... 47.9 %
Common Stocks, short.................................................... (1.5)%
Preferred Stocks........................................................ 3.6 %
Bonds & Notes .......................................................... 21.2 %
Cash & Other............................................................ 28.8 %
-------
Total................................................................. 100.0 %
=======
</TABLE>
3
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UAM FUNDS FPA CRESCENT PORTFOLIO
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As you can see, cash continues to have a substantial weighting. Again, this is
not a direct result of trying to time the stock market but a by-product of not
finding companies that meet our strict parameters. It seems, given the stock
market's incredible run, that we should rapidly deploy this cash into stocks.
We cannot deny that we have had such thoughts. Cash is king? If so, we feel a
bit like Louis XIV eyeing the guillotine. Nevertheless, we take comfort in our
stock selection process as it continues to provide significant outperformance.
These past 5 years (almost) have seen Crescent provide returns in line with
the market (Russell 2500) while assuming less risk. Unlike Crescent, mutual
fund liquidity levels, i.e., the cash they have lying around, has declined to
less than 5% for the first time since the early 1970s--a bullish statement.
However, since 1968, market returns have told a different story. The stock
market tends to perform better when liquidity is greatest. The following ta-
ble, excerpted from a recent issue of the New York Times, supports this point
of view.
<TABLE>
<CAPTION>
PERCENTAGE OF
AVERAGE MEDIAN CHANGE TIMES THE S&P PERCENTAGE OF TIMES
MUTUAL FUND IN THE S&P 500 500 DECLINED THE S&P 500 ROSE
CASH LEVEL OVER NEXT 2 YEARS OVER 2 YEARS MORE THAN 20%
----------- ----------------- ------------- -------------------
<S> <C> <C> <C>
Under 6% -10% 72% 0%
Over 10% +31% 5% 64%
</TABLE>
Crescent, with its stock market rates of return and below average risk, offers
its shareholders an excellent risk/reward trade-off, i.e., upside participa-
tion and downside protection. We look forward to continuing to provide you
with more of the same.
Respectfully,
/s/ Steven Romick
Steven Romick
Portfolio Manager,
FPA Crescent Portfolio
4
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UAM FUNDS FPA CRESCENT PORTFOLIO
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INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
BALANCED
BENCHMARK
60% RUSSELL LEHMAN
FPA CRESCENT 2500/ BROTHERS
INSTITUTIONAL 40% LB GOV'T/ RUSSELL
TIME PERIOD CLASS GOV'T/CORP CORPORATE 2500
- ----------- ------------- ----------- --------- -------
<S> <C> <C> <C> <C>
Quarter Ended March 31, 1998....... 6.8% 6.8% 1.5% 10.3%
Year Ended December 31,
1997............................. 22.0% 18.5% 9.8% 24.4%
1996............................. 22.9% 12.6% 2.9% 19.0%
1995............................. 26.0% 26.7% 19.2% 31.7%
1994............................. 4.3% -2.0% -3.5% -1.1%
From Inception 6/2/93*............. 18.9% 14.4% 7.1% 19.3%
</TABLE>
INSTITUTIONAL SERVICE CLASS
<TABLE>
<CAPTION>
BALANCED
FPA BENCHMARK
CRESCENT 60% RUSSELL LEHMAN
INSTITUTIONAL 2500/ BROTHERS
SERVICE 40% LB GOV'T/ RUSSELL
TIME PERIOD CLASS GOV'T/CORP CORPORATE 2500
- ----------- ------------- ----------- --------- -------
<S> <C> <C> <C> <C>
Quarter Ended March 31, 1998....... 6.6% 6.8% 1.5% 10.3%
From Inception 1/24/97*............ 23.6% 20.7% 9.6% 28.1%
</TABLE>
The data quoted represents past performance and is not indicative of future
performance. An investment in the fund may fluctuate so that an investor's
shares when redeemed may be worth more or less than their original cost. All
returns assume the reinvestment of dividends and distributions. The
performance of the shares of each Class will vary based upon the different
inception dates and fees assessed to that Class.
* Returns from inception are annualized. Total return of the portfolio
reflects fees waived and expenses assumed by the adviser. Without such
waiver of fees and expenses assumed, total return would be lower. The
annualized performance of the Russell 2500 and Lehman Brothers
Government/Corporate indexes begins 6/1/93 for the Institutional Class and
2/1/97 for the Institutional Service Class.
5
<PAGE>
Performance Comparison
- --------------------------------------------------------------------------------
COMPARISON OF THE CHANGE IN VALUE OF A $10,000 PURCHASE IN FPA CRESCENT
PORTFOLIO, THE STANDARD & POOR'S 500 INDEX (S&P 500), THE BALANCED BENCHMARK
AND THE RUSSELL 2500 INDEX++
AVERAGE ANNUAL TOTAL RETURN**
FOR PERIOD ENDED MARCH 31, 1998
- --------------------------------------------------------------------------------
INSTITUTIONAL INSTITUTIONAL SERVICE
CLASS SHARES CLASS SHARES
- --------------------------------------------------------------------------------
1 YEAR SINCE 6/2/93* 1 YEAR SINCE 1/24/97**
- --------------------------------------------------------------------------------
25.96% 18.87% 25.55% 23.62%
- --------------------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
FPA Crescent Balanced RUSSELL 2500
Date Portfolio S&P 500 Index++ Benchmark* INDEX
---- ------------ --------------- ---------- ------------
6/2/93 10,000 10,000 10,000 10,000
3/31/94 11,127 10,127 10,543 10,767
3/31/95 12,168 11,705 11,292 11,699
3/31/96 15,175 15,470 13,786 15,188
3/31/97 18,304 18,554 14,752 16,507
3/31/98 23,056 27,452 19,189 23,418
- --------------------------------------------------------------------------------
FPA CRESCENT PORTFOLIO S&P 500 INDEX+ BALANCED BENCHMARK+
INSTITUTIONAL CLASS ***+
RUSSELL 2500 INDEX+
Past performance is not predictive of future performance. Your investment return
and principal value will fluctuate. When shares are redeemed, they may be worth
more or less than the original cost.
* Commencement of Operations
** Total return of the Portfolio reflects fees waived and expenses assumed by
the Adviser. Without such waiver of fees and expenses assumed, total return
would be lower
*** The graph presents the performance of the Institutional Class shares which
have been in existence since the Portfolio's inception. The performance of
the Institutional Service Class shares will vary based upon the different
inception date and fees assessed to that Class.
+ The comparative indices are not adjusted to reflect expenses or other fees
that the SEC requires to be reflected in the Portfolio's performance. The
fees, if reflected, would reduce the performance quoted. The Portfolio's
performance assumes the reinvestment of all dividends and distributions.
The comparative index has been adjusted to reflect reinvestment of
dividends on securities in the index.
++ Beginning with this report, the Portfolio's performance will be compared to
the Russell 2500 Index rather than the S&P 500 Index. The Russell 2500
Index is a better benchmark for the type of securities held in the
Portfolio.
Definition of the Comparative Indices
-------------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks. Balanced Benchmark, a
hypothetical combination of unmanaged indices, reflects the Portfolio's neutral
mix of 60% stocks and 40% bonds (60% Russell 2500/40% Lehman Brothers
Government/Corporate Index). The Russell 2500 Index is an unmanaged index
composed of the 2,500 smallest stocks in the Russell 3000, a market value
weighted index of the 3,000 largest U.S. publicly traded companies.
Please note that one cannot invest in an unmanaged index.
6
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UAM FUNDS FPA CRESCENT PORTFOLIO
MARCH 31, 1998
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<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 47.9%
SHARES VALUE+
<S> <C> <C>
AUTOMOTIVE - 2.6%
*Midas Inc. .......................................... 336,700 $ 6,944,438
------------
BANKS - 0.6%
*HF Bancorp, Inc. .................................... 87,500 1,487,500
------------
BEVERAGES, FOOD & TOBACCO - 1.1%
++RJR Nabisco Holdings Corp. ......................... 42,000 1,315,125
Schweitzer-Mauduit International, Inc. ............... 43,900 1,514,550
------------
2,829,675
------------
BROADCASTING & PUBLISHING - 0.7%
Central Newspapers, Inc., Class A..................... 10,000 710,625
*Devon Group, Inc. ................................... 22,000 1,292,500
------------
2,003,125
------------
CHEMICALS - 0.4%
*Scotts Company, The.................................. 30,000 1,038,750
------------
CONSUMER DURABLES - 0.8%
Semi-Tech (Global) Ltd., ADR.......................... 384,000 205,670
Tupperware Corporation................................ 75,000 1,996,875
------------
2,202,545
------------
CONSUMER STAPLES - 0.6%
*Day Runner, Inc. .................................... 30,000 667,500
*Guest Supply, Inc. .................................. 59,100 886,500
------------
1,554,000
------------
ENERGY - 1.0%
*Plains Resources Inc. ............................... 154,200 2,621,400
------------
FINANCIAL SERVICES - 2.7%
*Dundee Bancorp Inc., Class A......................... 25,000 524,469
Green Tree Financial Corporation...................... 218,000 6,199,375
Ocean Financial Corp. ................................ 16,000 592,000
------------
7,315,844
------------
HEALTH CARE - 0.3%
*Medical Resources, Inc. ............................. 150,000 792,187
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
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UAM FUNDS FPA CRESCENT PORTFOLIO
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<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
<S> <C> <C>
INSURANCE - 3.2%
++Foremost Corporation of America..................... 348,500 $ 8,538,250
------------
LODGING & RESTAURANTS - 1.7%
*IHOP Corp. .......................................... 120,000 4,605,000
------------
MANUFACTURING - 4.0%
Coachmen Industries, Inc. ............................ 138,000 3,726,000
*Littelfuse, Inc. .................................... 28,000 728,000
*National R.V. Holdings, Inc. ........................ 119,300 4,309,713
*Recoton Corporation.................................. 70,000 1,837,500
------------
10,601,213
------------
MULTI-INDUSTRY - 3.1%
*AMERCO............................................... 265,700 8,170,275
------------
REAL ESTATE - 7.5%
*Capital Automotive REIT.............................. 123,700 2,334,837
Crown American Realty Trust REIT...................... 505,000 4,734,375
Price Enterprises, Inc. REIT.......................... 203,000 3,882,375
Prime Group Realty Trust REIT......................... 150,000 3,000,000
Prime Retail, Inc. REIT............................... 405,000 6,049,688
------------
20,001,275
------------
RETAIL - 4.9%
*Consolidated Stores Corporation...................... 28,200 1,210,838
*Good Guys, Inc., The................................. 217,100 2,293,119
*Homebase, Inc. ...................................... 118,700 994,112
++Limited, Inc., The.................................. 56,000 1,606,500
*Michaels Stores, Inc. ............................... 90,000 3,363,750
*Payless ShoeSource, Inc. ............................ 37,000 2,784,250
*PriceSmart, Inc. .................................... 50,750 818,344
------------
13,070,913
------------
SERVICES - 1.6%
*Pinkerton's, Inc. ................................... 192,200 4,432,613
------------
TECHNOLOGY - 9.2%
*Arrow Electronics, Inc. ............................. 195,000 5,277,187
++*NCR Corporation.................................... 290,350 9,599,697
*Storage Technology Corporation....................... 126,000 9,583,875
------------
24,460,759
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
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UAM FUNDS FPA CRESCENT PORTFOLIO
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<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
<S> <C> <C>
TEXTILES & APPAREL - 1.9%
++*Reebok International Ltd. ...................... 167,000 $ 5,093,500
------------
TOTAL COMMON STOCKS (Cost $104,019,541)........................ 127,763,262
------------
PREFERRED STOCKS - 3.6%
BEVERAGES, FOOD & TOBACCO - 0.1%
RJR Nabisco Holdings Corp., 10.00%, 12/31/44,
Series T.......................................... 6,450 161,250
------------
ENTERTAINMENT & LEISURE TIME - 0.3%
AMC Entertainment, Inc., $1.75, 12/31/49 Cv. ...... 19,000 779,000
------------
FINANCIAL SERVICES - 0.6%
*GPA Group plc 10.00% Cv. ......................... 13,687 1,446,328
Phoenix Duff & Phelps Corporation, $1.50, 11/1/15,
Series A Cv....................................... 9,730 301,630
------------
1,747,958
------------
REAL ESTATE - 2.6%
Crown American Realty Trust, 11.00%, 7/31/07,
Series A REIT..................................... 65,000 3,489,687
Prime Retail, Inc., 8.50%, 3/31/99 Series B Cv.
REIT.............................................. 91,000 2,206,750
Walden Residential Properties, Inc., 9.20%,
12/31/06 REIT..................................... 50,000 1,325,000
------------
7,021,437
------------
TOTAL PREFERRED STOCKS (Cost $9,199,380)....................... 9,709,645
------------
CORPORATE BONDS - 16.2%
<CAPTION>
FACE
AMOUNT
<S> <C> <C>
BROADCASTING & PUBLISHING - 0.5%
Busse Broadcasting Corp., 11.625%, 10/15/00........ $ 427,000 462,227
Continental Cablevision, Inc., 11.00%, 6/1/07...... 800,000 885,514
------------
1,347,741
------------
CONSUMER STAPLES - 0.1%
Playtex Family Products Corp., 9.00%, 12/15/03..... 150,000 155,250
------------
CONSUMER DURABLES - 0.3%
#International Semi-Tech Microelectrics, Inc.,
0.00%, 8/15/03.................................... 2,400,000 828,000
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
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UAM FUNDS FPA CRESCENT PORTFOLIO
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CORPORATE BONDS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
<S> <C> <C>
ENTERTAINMENT & LEISURE TIME - 1.4%
Trump Atlantic City Associates, 11.25%, 5/1/06...... $ 3,600,000 $ 3,717,000
------------
FINANCIAL SERVICES - 0.5%
GPA Delaware, Inc., 8.75%, 12/15/98................. 300,000 305,250
##Local Financial Corp., 11.00%, 9/8/04............. 1,000,000 1,085,000
------------
1,390,250
------------
HEALTH CARE - 0.3%
NovaCare, Inc., 5.50%, 1/15/00 Cv. ................. 900,000 871,875
------------
INDUSTRIAL - 0.5%
Homestake Mining Company, 5.50%, 6/23/00 Cv. ....... 1,500,000 1,432,500
------------
LODGING & RESTAURANTS - 2.6%
Advantica Restaurant Group, Inc., 11.25%, 1/15/08... 6,476,057 6,897,001
------------
MANUFACTURING - 0.0%
Triangle Pacific Corp., 10.50%, 8/1/03.............. 140,000 147,700
------------
REAL ESTATE - 1.6%
Alexander Haagen Properties, Inc.,
Series A, 7.50%, 1/15/01 Cv........................ 1,175,000 1,186,750
Alexander Haagen Properties, Inc.,
Series B, 7.50%, 1/15/01 Cv........................ 2,555,000 2,580,550
Rockefeller Center Properties, Inc., Zero Coupon,
12/31/00 Cv. ...................................... 700,000 532,000
------------
4,299,300
------------
RETAIL - 5.5%
Charming Shoppes, Inc., 7.50%, 7/15/06 Cv. ......... 3,600,000 3,501,000
Genesco Inc., 10.375%, 2/1/03....................... 350,000 362,688
##Homebase, Inc., 5.25%, 11/1/04 Cv. ............... 3,450,000 3,566,437
Homebase, Inc., 5.25%, 11/1/04 Cv. ................. 100,000 103,375
Michaels Stores, Inc., 10.875%, 6/15/06............. 2,300,000 2,587,500
Nine West Group, Inc., 5.50%, 7/15/03 Cv. .......... 1,000,000 795,000
Sports Authority, Inc., The, 5.25%, 9/15/01 Cv. .... 4,100,000 3,684,875
------------
14,600,875
------------
SERVICES - 0.4%
EMCOR Group, Inc., Series C, 11.00%, 12/15/01....... 223,200 234,360
Fleming Companies, Inc., 10.625%, 12/15/01.......... 750,000 803,437
------------
1,037,797
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
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UAM FUNDS FPA CRESCENT PORTFOLIO
- --------------------------------------------------------------------------------
CORPORATE BONDS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
<S> <C> <C>
TECHNOLOGY - 0.8%
Reptron Electronics, Inc., 6.75%, 8/1/04 Cv. ....... $ 2,300,000 $ 1,854,375
Read-Rite Corporation, 6.50%, 9/1/04 Cv. ........... 350,000 283,500
------------
2,137,875
------------
TELECOMMUNICATIONS - 0.8%
Mobile Telecommunication Technologies Corp.,
13.50%, 12/15/02................................... 1,750,000 2,069,375
------------
TRANSPORTATION - 0.9%
##Trans World Airlines, Inc., 11.50%, 12/15/04...... 2,200,000 2,321,000
------------
TOTAL CORPORATE BONDS (Cost $43,012,288)........................ 43,253,539
------------
U.S. TREASURY OBLIGATION - 5.0%
**U.S. Treasury Inflation-Indexed Notes,
3.375%, 1/15/07 (Cost $13,469,564)................. 13,768,785 13,347,185
------------
</TABLE>
<TABLE>
<S> <C> <C>
SHORT TERM INVESTMENTS - 26.3%
COMMERCIAL PAPER - 22.4%
Bell Atlantic Corp., 5.53%, 4/24/98.................. 10,000,000 9,964,669
Coca-Cola Company, The, 5.46%, 4/27/98............... 10,000,000 9,960,567
Ford Motor Credit Company, 5.50%, 5/1/98............. 10,000,000 9,954,167
General Motors Acceptance Corp., 5.50%, 4/9/98....... 10,000,000 9,987,778
Walt Disney Company, The, 5.46%, 4/24/98............. 10,000,000 9,965,117
Winn-Dixie Stores, Inc., 5.50%, 5/12/98.............. 10,000,000 9,937,361
------------
59,769,659
------------
REPURCHASE AGREEMENT - 3.9%
Chase Securities, Inc., 5.70%, dated 3/31/98, due
4/1/98, to be repurchased at $10,165,609,
collateralized by $9,239,479 of various U.S.
Treasury Notes 5.50%-14.00%, due 8/31/02- 11/15/27,
valued at $10,164,219............................... 10,164,000 10,164,000
------------
TOTAL SHORT TERM INVESTMENTS (Cost $69,933,659)................. 69,933,659
------------
TOTAL INVESTMENTS -99.0% (Cost $239,634,432).................... 264,007,290
------------
OTHER ASSETS AND LIABILITIES (NET) -1.0%........................ 2,725,600
------------
NET ASSETS - 100%............................................... $266,732,890
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
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<TABLE>
<CAPTION>
SECURITIES SOLD SHORT
SHARES VALUE+
------ ----------
<S> <C> <C>
COMMON STOCKS
Abercrombie & Fitch Company, Class A....................... 10,800 $ 454,275
Intimate Brands, Inc. ..................................... 43,000 1,163,688
Nabisco Holdings Corp. .................................... 33,000 1,546,875
Singer Company N.V., The................................... 15,000 158,437
Sunbeam Corporation........................................ 13,000 572,813
Warnaco Group, Inc., The................................... 4,000 157,000
----------
(Total Proceeds $3,226,076)....................................... $4,053,088
==========
</TABLE>
+ See Note A to Financial Statements.
++ All, or a portion of these shares, were pledged to cover margin
requirements on open short sale transactions.
* Non-Income Producing Security
** Principal amount indexed to inflation rate.
# Step Bond-Coupon rate is low or zero for an initial period and then
increases to a higher coupon rate thereafter. Maturity date disclosed is
the ultimate maturity date.
## 144A Security; certain conditions for public resale may exist.
ADR American Depositary Receipt
REIT Real Estate Investment Trust
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
MARCH 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost.................................. $239,634,432
============
Investments at Value (Note A)......................... $264,007,290
Cash.................................................. 475,589
Deposits with Brokers for Securities Sold Short (Note
A)................................................... 6,089,197
Receivable for Portfolio Shares Sold.................. 2,566,852
Dividends and Interest Receivable..................... 1,122,340
Receivable for Investments Sold....................... 304,390
Other Assets.......................................... 1,138
------------
Total Assets......................................... 274,566,796
LIABILITIES
Securities Sold Short, at Value (Proceeds $3,226,076)
(Note A)............................................. $4,053,088
Payable for Investments Purchased..................... 3,274,001
Payable for Investment Advisory Fees (Note B)......... 179,468
Payable for Portfolio Shares Redeemed................. 177,216
Payable for Administrative Fees (Note C).............. 33,135
Payable for Distribution and Service Fees (Note E).... 11,014
Payable for Custodian Fees (Note D)................... 3,400
Payable for Account Service Fees (Note F)............. 2,500
Payable for Trustees' Fees (Note G)................... 1,021
Dividend Payable on Securities Sold Short (Note A).... 360
Other Liabilities..................................... 98,703
----------
Total Liabilities.................................... 7,833,906
------------
NET ASSETS............................................ $266,732,890
============
NET ASSETS CONSIST OF:
Paid in Capital....................................... 236,750,850
Undistributed Net Investment Income................... 1,258,006
Accumulated Net Realized Gain......................... 5,178,188
Unrealized Appreciation............................... 23,545,846
------------
NET ASSETS............................................ $266,732,890
============
Institutional Class Shares
NET ASSETS............................................ $247,833,006
============
NET ASSET VALUE, Offering and Redemption Price Per
Share 15,273,878 shares outstanding (unlimited
authorization, no par value)......................... $16.23
======
Institutional Service Class Shares
NET ASSETS............................................ $ 18,899,884
============
NET ASSET VALUE, Offering and Redemption Price Per
Share 1,170,063 shares outstanding (unlimited
authorization, no par value)......................... $16.15
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
FOR THE YEAR ENDED
MARCH 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Interest......................................................... $ 5,206,357
Dividends........................................................ 2,389,503
-----------
TOTAL INCOME.................................................... 7,595,860
-----------
EXPENSES
Advisory Fees (Note B)........................................... 1,489,678
Administration Fees (Note C)..................................... 241,380
Registration and Filing Fees..................................... 126,779
Shareholder Servicing Fees....................................... 121,993
Reports to Shareholders.......................................... 60,071
Short Sale Dividend Expense (Note A)............................. 48,662
Legal Fees....................................................... 37,467
Distribution and Service Fees (Note E)........................... 28,629
Auditing Fees.................................................... 22,802
Account Services Fees (Note F)................................... 19,064
Custodian Fees (Note D).......................................... 17,045
Trustees' Fees (Note G).......................................... 4,079
Miscellaneous.................................................... 19,641
-----------
Total Expenses.................................................. 2,237,290
Expense Offset (Note A).......................................... (5,005)
-----------
Net Expenses.................................................... 2,232,285
-----------
NET INVESTMENT INCOME............................................ 5,363,575
-----------
NET REALIZED GAIN (LOSS) ON:
Investments..................................................... 7,376,696
Securities Sold Short........................................... (16,709)
Written Options................................................. (27,523)
-----------
NET REALIZED GAIN ON INVESTMENTS, SECURITIES SOLD SHORT AND
WRITTEN OPTIONS................................................. 7,332,464
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments..................................................... 19,759,214
Securities Sold Short........................................... (722,248)
Written Options................................................. (14,189)
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION............... 19,022,777
-----------
NET GAIN ON INVESTMENTS, SECURITIES SOLD SHORT AND WRITTEN
OPTIONS......................................................... 26,355,241
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $31,718,816
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31,
1998 1997
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income............................. $ 5,363,575 $ 852,987
Net Realized Gain................................. 7,332,464 2,104,855
Net Change in Appreciation/Depreciation........... 19,022,777 2,190,347
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS....................................... 31,718,816 5,148,189
------------ -----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class............................... (3,845,555) (676,369)
Institutional Service Class....................... (305,815) --
Net Realized Gain:
Institutional Class............................... (2,382,178) (2,597,975)
Institutional Service Class....................... (179,223) --
------------ -----------
TOTAL DISTRIBUTIONS............................... (6,712,771) (3,274,344)
------------ -----------
CAPITAL SHARE TRANSACTIONS: (A)
Institutional Class:
Issued............................................ 192,792,362 40,848,380
In Lieu of Cash Distributions..................... 5,599,775 3,165,120
Redeemed.......................................... (39,605,740) (2,293,356)
------------ -----------
Net Increase from Institutional Class Shares...... 158,786,397 41,720,144
------------ -----------
Institutional Service Class:
Issued............................................ 19,795,465 31,597
In Lieu of Cash Distributions..................... 484,914 --
Redeemed.......................................... ( 2,990,245) --
------------ -----------
Net Increase from Institutional Service Class
Shares........................................... 17,290,134 31,597
------------ -----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS...... 176,076,531 41,751,741
------------ -----------
TOTAL INCREASE.................................... 201,082,576 43,625,586
NET ASSETS:
Beginning of Year................................. 65,650,314 22,024,728
------------ -----------
End of Year (including undistributed net
investment income of $1,258,006 and $339,182,
respectively).................................... $266,732,890 $65,650,314
============ ===========
(A) SHARES ISSUED AND REDEEMED:
Institutional Class
Shares Issued..................................... 12,585,249 3,063,181
In Lieu of Cash Distributions..................... 375,003 247,300
Shares Redeemed................................... (2,561,193) (174,536)
------------ -----------
Net Increase from Institutional Class Shares...... 10,399,059 3,135,945
============ ===========
Institutional Service Class
Shares Issued..................................... 1,328,525 2,349
In Lieu of Cash Distributions..................... 32,371 --
Shares Redeemed................................... (193,182) --
------------ -----------
Net Increase from Institutional Service Class
Shares........................................... 1,167,714 2,349
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL
INSTITUTIONAL CLASS SERVICE CLASS
--------------------------------------------------- -------------------------
YEARS ENDED MARCH 31, JUNE 2, 1993+ YEAR ENDED JANUARY 24,
----------------------------------- TO MARCH 31, 1997+ TO
1998++ 1997 1996 1995 MARCH 31, 1994 1998++ MARCH 31, 1997
-------- ------- ------- ------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 13.46 $ 12.67 $ 11.23 $ 10.96 $ 10.00 $ 13.43 $ 13.12
-------- ------- ------- ------- ------- ------- -------
Income from Investment
Operations
Net Investment Income.. 0.55 0.31 0.40 0.21 0.13 0.53 0.03
Net Realized and
Unrealized Gain on
Investments........... 2.88 2.16 2.29 0.77 0.99 2.84 0.28
-------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations............ 3.43 2.47 2.69 0.98 1.12 3.37 0.31
-------- ------- ------- ------- ------- ------- -------
Distributions:
Net Investment Income.. (0.40) (0.34) (0.37) (0.18) (0.10) (0.39) --
Net Realized Gain...... (0.26) (1.34) (0.88) (0.53) (0.06) (0.26) --
-------- ------- ------- ------- ------- ------- -------
Total Distributions.... (0.66) (1.68) (1.25) (0.71) (0.16) (0.65) --
-------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of
Period $ 16.23 $ 13.46 $ 12.67 $ 11.23 $ 10.96 $ 16.15 $ 13.43
======== ======= ======= ======= ======= ======= =======
TOTAL RETURN............ 25.96% 20.61% 24.71% 9.35% 11.40%** 25.55% 2.36%**
======== ======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands)..... $247,833 $65,619 $22,025 $15,990 $10,174 $18,900 $ 32
Ratio of Expenses to
Average Net Assets:
Before Expense
Reimbursement and
Offset................ 1.45% 1.60% 1.59% 1.65% 1.86%* 1.73% 1.85%*
After Expense
Reimbursement and
Offset................ 1.45% 1.57% 1.59% 1.65% 1.85%* 1.73% 1.85%*
Ratio of Net Investment
Income to Average Net
Assets:
Before Expense
Reimbursement and
Offset................ 3.62% 2.77% 3.35% 2.16% 1.60%* 3.44% 2.56%*
After Expense
Reimbursement and
Offset................ 3.62% 2.80% 3.35% 2.16% 1.61%* 3.44% 2.56%*
Portfolio Turnover
Rate................... 18% 45% 100% 101% 89%** 18% 45%*
Average Commission Rate
Paid# $ 0.0564 $0.0521 N/A N/A N/A $0.0564 $0.0521
</TABLE>
* Annualized
** Not Annualized
+ Commencement of Operations
++ Per share amounts for the year ended March 31, 1998 are based on average
outstanding shares.
# For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
UAM Funds Trust and UAM Funds, Inc. (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The FPA Crescent
Portfolio (the "Portfolio"), a portfolio of UAM Funds Trust, is a diversified,
open-end management investment company. At March 31, 1998, the UAM Funds were
composed of 45 active portfolios. The financial statements of the remaining
portfolios are presented separately. The Portfolio is authorized to offer two
separate classes of shares--Institutional Class Shares and Institutional Serv-
ice Class Shares ("Service Class Shares"). Both classes of shares have identi-
cal voting rights (except Institutional Service Class shareholders have exclu-
sive voting rights with respect to matters relating to distribution and share-
holder servicing of such shares), dividend, liquidation and other rights. The
objective of the Portfolio is to provide a total return consistent with rea-
sonable investment risk through a combination of income and capital apprecia-
tion by investing in a combination of equity securities and fixed income obli-
gations.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Equity securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the valua-
tion is made. Price information on listed securities is taken from the ex-
change where the security is primarily traded. In addition, listed and un-
listed securities not traded on the valuation date for which market quota-
tions are readily available are valued at the average between the bid and
asked price. Quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. The converted value is based upon
the bid price of the foreign currency against U.S. dollars quoted by any
major bank or by a broker. Fixed income securities are stated on the basis
of valuations provided by brokers and/or a pricing service which uses in-
formation with respect to transactions in fixed income securities, quota-
tions from dealers, market transactions in comparable securities and vari-
ous relationships between securities in determining value. Short-term in-
vestments that have remaining maturities of 60 days or less at time of
purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are read-
ily
17
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
available is determined in good faith at fair value using methods deter-
mined by the Trustees.
2. FEDERAL INCOME TAXES: The Portfolio has qualified and intends to con-
tinue to qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code and to distribute all of its taxable income. Ac-
cordingly, no provision for Federal income taxes is required in the finan-
cial statements.
The cost for federal income tax purposes was $239,634,432. At March 31,
1998, net unrealized appreciation for all securities based on tax cost was
$24,372,858. This consisted of aggregate gross unrealized appreciation for
all securities of $28,024,073 and aggregate gross unrealized depreciation
for all securities of $3,651,215.
3. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income in June and December. Any
realized net capital gains will be distributed at least annually. All dis-
tributions are recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles.
Permanent book and tax basis differences relating to shareholder distri-
butions resulted in reclassifications of $293,381 to decrease undistrib-
uted net investment income (loss) with an increase to accumulated net re-
alized gains and losses of $3,604 and to paid in capital of $289,777.
Current year permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for the purpose of cal-
culating net investment income (loss) per share in the financial high-
lights.
4. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
18
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreements. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
5. SHORT SALES: The Portfolio may engage in short sales of securities.
In a short sale, the Portfolio sells stock which it does not own, making
delivery with securities "borrowed" from a broker. The Portfolio is then
obligated to replace the security borrowed by purchasing it at the market
price at the time of replacement. This price may or may not be less than
the price at which the security was sold by the Portfolio. Until the secu-
rity is replaced, the Portfolio is required to pay the lender any divi-
dends or interest which accrue during the period of the loan. In order to
borrow the security, the Portfolio may also have to pay fees which would
increase the cost of the security sold. The proceeds of the short sale
will be retained by the broker, to the extent necessary to meet margin re-
quirements, until the short position is closed out.
The Portfolio also must deposit in a segregated account an amount of
cash or liquid assets equal to the difference between (a) the market value
of the securities short at the time they were sold short and (b) the value
of the collateral deposited with the broker in connection with the short
sale (not including the proceeds from the short sale). While the short po-
sition is open, the Portfolio must maintain daily the segregated account
at such a level that (1) the amount deposited in it plus the amount depos-
ited with the broker as collateral equals the current market value of the
securities sold short and (2) the amount deposited in it plus the amount
deposited with the broker as collateral is not less than the market value
of the securities at the time they were sold short.
The Portfolio will incur a loss as a result of the short sale if the
price of the security increases between the date of the short sale and
date on which the Portfolio replaces the borrowed security. The Portfolio
will realize a gain if the security declines in price between those dates.
The amount of any gain will be decreased and the amount of any loss will
be increased by any fees the Portfolio may be required to pay in connec-
tion with the short sale.
6. OPTIONS AND FUTURES CONTRACTS: The Portfolio may use futures and op-
tions contracts to hedge against changes in the values of securities the
Portfolio owns or expects to purchase. The Portfolio may also write op-
tions on securities it owns or in which it may invest to increase its cur-
rent returns.
The potential risk to the Portfolio is that the change in value of
futures and options contracts may not correspond to the change in value of
the hedged
19
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
instruments. In addition, losses may arise from changes in the value of
the underlying instruments, if there is an illiquid secondary market for
the contracts, or if the counterparty to the contract is unable to per-
form.
Futures contracts are valued at the quoted daily settlement prices es-
tablished by the exchange on which they trade. Exchange traded options are
valued at the last sale price, or if no sales are reported, the last bid
price for purchased options and the last ask price for written options.
During the year ended March 31, 1998, the Portfolio participated in
writing covered call options. The Portfolio had option activity as fol-
lows:
<TABLE>
<CAPTION>
NO. OF
CONTRACTS PREMIUMS
--------- ---------
<S> <C> <C>
Options outstanding at March 31, 1997................... 20 $ 18,439
Options written during the period....................... 780 209,613
Options closed or exercised during the period........... (800) (228,052)
---- ---------
Options outstanding at March 31, 1998................... 0 $ 0
==== =========
</TABLE>
7. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized using the effective yield
basis over their respective lives. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses are allo-
cated to each class of shares based upon their relative net assets. Custo-
dian fees for the Portfolio have been increased to include expense offsets
for custodian balance credits, if any.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
First Pacific Advisors, Inc. (the "Adviser"), an indirect wholly-owned subsid-
iary of United Asset Management Corporation ("UAM"), provides investment advi-
sory services to the Portfolio at a monthly fee calculated at an annual rate
of 1.00% of average daily net assets. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume expenses if necessary, in
order to keep the Portfolio's total annual operating expenses, after the ef-
fect of expense offset arrangements, from exceeding 1.85% and 2.10% of average
daily net assets of the Portfolio's Institutional Class Shares and Service
Class Shares, respectively.
20
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the Portfolio un-
der a Fund Administration Agreement (the "Agreement") with the UAM Funds. Pur-
suant to the Agreement, the Administrator is entitled to receive annual fees,
computed daily and payable monthly, of 0.19% of the first $200 million of the
combined aggregate net assets; plus 0.11% of the next $800 million of the com-
bined aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in ex-
cess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon in-
ception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee of 0.06% of average daily net assets of the Portfolio. The Administrator
has entered into a Mutual Funds Service Agreement with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC agrees to provide certain services, including but not lim-
ited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the Adminis-
trator pays CGFSC a monthly fee. For the year ended March 31, 1998, UAM Fund
Services, Inc. earned $241,380 from the Portfolio as Administrator of which
$151,953 was paid to CGFSC for their services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
The Portfolio has adopted a Distribution and Service Plan (the "Plan") on
behalf of the Service Class Shares pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Under the Plan, the The Portfolio may not incur distribu-
tion and service fees which exceed an annual rate of 0.75% of the Portfolio's
net assets, however, the Board has currently limited aggregate payments under
the Plan to 0.50% per annum of the Portfolio's net assets. The Portfolio's
Service Class Shares are not currently making payments for distribution fees,
however the Portfolio does pay service fees at an annual rate of 0.25% of the
average daily value of Service Class Shares owned by clients of the Service
Agents.
21
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
F. ACCOUNT SERVICES: Effective February 28, 1997, the UAM Funds entered into
an Account Services Agreement (the "Services Agreement") with UAM Retirement
Plan Services, Inc. ("Service Provider"), a wholly-owned subsidiary of UAM.
Under the Services Agreement, the Service Provider agrees to perform certain
services for participants in a self-directed, defined contribution plan, and
for whom the Service Provider provides participant recordkeeping. Pursuant to
the Services Agreement, the Service Provider is entitled to receive, after the
end of each month, a fee at the annual rate of 0.15% of the average aggregate
daily net asset value of shares of the UAM Funds in the accounts for which it
provides services.
G. TRUSTEES' FEES: Each Trustee, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Board meetings.
H. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to partici-
pate in a $100 million unsecured line of credit with several banks. Borrowings
will be made solely to temporarily finance the repurchase of Capital shares.
Interest is charged to each participating Portfolio based on its borrowings at
a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quar-
ter, is accrued by each participating Portfolio based on its average daily un-
used portion of the line of credit. During the year ended March 31, 1998, the
Portfolio had no borrowings under the agreement.
I. PURCHASES AND SALES: For the year ended March 31, 1998, the Portfolio
made purchases of approximately $138,076,266 and sales of approximately
$19,783,181 of investment securities other than long-term U.S. Government and
short-term securities. Purchases of long-term U.S. Government Securities were
approximately $13,419,773.
J. OTHER: At March 31, 1998, 43% and 90% of total shares outstanding were
held by 1 and 5 record shareholders owning more than 10% of the aggregate to-
tal shares outstanding of the Institutional Class Shares and the Institutional
Service Class Shares, respectively.
22
<PAGE>
UAM FUNDS FPA CRESCENT PORTFOLIO
- -------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
UAM Funds Trust and Shareholders of
The FPA Crescent Portfolio
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the FPA Crescent
Portfolio (the "Portfolio"), a Portfolio of UAM Funds Trust, at March 31,
1998, and the results of its operations, the changes in its net assets and the
financial highlights for each of the periods indicated in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at March 31, 1998 by
correspondence with the custodian and the application of alternative auditing
procedures where securities purchased were not received or held by the
custodian provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
April 29, 1998
- -------------------------------------------------------------------------------
FEDERAL INCOME TAX INFORMATION: (UNAUDITED)
The FPA Crescent Portfolio hereby designates $484,710 as a long-term capital
gain dividend at the 28% tax bracket and $1,192,608 at the 20% tax bracket for
the purpose of the dividend paid deduction on the Portfolio's income tax re-
turn.
In 1998, 15.04% of the distributions taxable as ordinary income, as reported
on Form 1099-DIV, qualifies for the dividends received deduction for corpora-
tions.
For the year ended March 31, 1998, the FPA Crescent Portfolio earned 14.75% of
its income from direct U.S. Treasury obligations.
23
<PAGE>
UAM Funds FPA Crescent Portfolio
================================================================================
Officers and Trustees
Norton H. Reamer William H. Park
Trustee; President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Trustee Secretary
Nancy J. Dunn Karl O. Hartmann
Trustee Assistant Secretary
Philip D. English Gary L. French
Trustee Treasurer
William A. Humeouk Robert R. Flaherty
Trustee Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Trustee and Exective Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Trustee
================================================================================
Investment Adviser
First Pacific Advisors, Inc.
11400 West Olympic Boulevard
Suite 1200
Los Angeles, CA 90064
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
