1838 INVESTMENT ADVISORS FUNDS, DEF 14A, 1998-07-01

1838 INVESTMENT ADVISORS FUNDS
DEF 14A, 1998-07-01

Previous: FIRST COMMUNITY CORP /SC/, 424B1, 1998-07-01

Next: LAKE FOREST FUNDS, 485BPOS, 1998-07-01

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant |X|

Filed by a Party other than the Registrant |_|

Check the appropriate box:

|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12

1838 INVESTMENT ADVISORS FUNDS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
|X| No fee required.

|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:

---------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:

---------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

---------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:

---------------------------------------------------------------------------
5) Total fee paid:

---------------------------------------------------------------------------
|_| Fee paid previously with preliminary materials

|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

1) Amount Previously Paid:

---------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:

---------------------------------------------------------------------------
3) Filing Party:

---------------------------------------------------------------------------
4) Date Filed:

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

<PAGE>

1838 INVESTMENT ADVISORS FUNDS

NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS OF

1838 INTERNATIONAL EQUITY FUND
1838 SMALL CAP EQUITY FUND
1838 FIXED INCOME FUND

July 1, 1998

To Shareholders:

A Special Meeting of Shareholders of 1838 International Equity Fund, 1838
Small Cap Equity Fund, and 1838 Fixed Income Fund (collectively, the "Funds") of
1838 Investment Advisors Funds (the "Trust") will be held at 12:30 p.m. Eastern
Time on July 22, 1998 at the offices of 1838 Investment Advisors, L.P., Five
Radnor Corporate Center, 100 Matsonford Road, Suite 320, Radnor, Pennsylvania
19087 for the following purposes:

1. Approval of the following Investment Advisory Agreements:

The following item is to be voted on ONLY by shareholders of record of
1838 International Equity Fund:

(a) To approve or disapprove a new Investment Advisory Agreement
between 1838 Investment Advisors, Inc. and the Trust on behalf of
the 1838 International Equity Fund.

The following item is to be voted on ONLY by shareholders of record of
1838 Small Cap Equity Fund:

(b) To approve or disapprove a new Investment Advisory Agreement
between 1838 Investment Advisors, Inc., and the Trust on behalf
of the 1838 Small Cap Equity Fund.

The following item is to be voted on ONLY by shareholders of record of
1838 Fixed Income Fund:

(c) To approve or disapprove a new Investment Advisory Agreement
between 1838 Investment Advisors, Inc., and the Trust on behalf
of 1838 Fixed Income Fund.

-1-
<PAGE>

2. To transact such other business as may properly come before the
Meeting, or any adjournment thereof.

Shareholders of record at the close of business on June 15, 1998 are
entitled to vote at the meeting or any adjournment thereof.

By Order of the Board of Trustees

ANNA M. BENCROWSKY
Secretary

July 1, 1998
Radnor, Pennsylvania

- --------------------------------------------------------------------------------
IMPORTANT

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK YOUR VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY AND PROMPTLY DATE, SIGN AND RETURN IT IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. WE ASK
YOUR COOPERATION IN HELPING THE TRUST BY MAILING YOUR PROXY PROMPTLY.
- --------------------------------------------------------------------------------

-2-
<PAGE>

PROXY SUMMARY

Q. WHY IS A SHAREHOLDER VOTE NECESSARY?

A. The Investment Company Act of 1940, as amended, requires a shareholder vote
on an investment management agreement whenever there is a change in control
of an investment advisor. The proposed merger between 1838 Investment
Advisors, Inc., the parent company of 1838 Investment Advisors, L.P., your
Fund's investment advisor, and MBIA, Inc. will result in a change of
control of the investment advisor and, therefore, requires a shareholder
vote on a new investment management agreement.

Q. WILL THE INVESTMENT MANAGEMENT FEES BE THE SAME?

A. Yes, under the terms of the proposed investment management agreement, the
investment management fees paid by your Fund will remain the same.

Q. HOW WILL THE MERGER AFFECT THE FUND, OR ME AS A FUND SHAREHOLDER?

A. Your Fund and its investment objectives and policies will not change. You
will still own the same shares in the same Fund. Upon the close of the
merger, the investment manager for each Fund will be 1838 Investment
Advisors, Inc., the corporate successor to 1838 Investment Advisors, L.P.,
as a wholly-owned subsidiary of MBIA, Inc.

Q. WHO IS PAYING THE COSTS ASSOCIATED WITH THE MERGER, THE SHAREHOLDER MEETING
AND THIS PROXY SOLICITATION?

A. 1838 Investment Advisors, Inc., not your Fund, will bear the costs
associated with consideration of the proposed merger, including the costs
of the Special Meeting of Shareholders and the proxy solicitation.

Q. HOW DO THE BOARD OF TRUSTEES OF MY FUND SUGGEST THAT I VOTE?

A. After careful consideration, the Board of Trustees of your Fund, including
the independent Trustees, unanimously recommend that you vote "FOR" all the
items on the enclosed proxy card.

PLEASE VOTE THE ENCLOSED PROXY CARD
YOUR VOTE IS IMPORTANT

-3-
<PAGE>

1838 INVESTMENT ADVISORS FUNDS

PROXY STATEMENT - SPECIAL MEETING OF SHAREHOLDERS OF

1838 INTERNATIONAL EQUITY FUND
1838 SMALL CAP EQUITY FUND
1838 FIXED INCOME FUND

July 1, 1998

The enclosed proxy is solicited by the Board of Trustees of 1838 Investment
Advisors Funds (the "Trust") in connection with a Special Meeting of
Shareholders ("Meeting") of 1838 International Equity Fund, 1838 Small Cap
Equity Fund and 1838 Fixed Income Fund (collectively, the "Funds") and any
adjournment thereof. The Meeting will be held at 12:30 p.m. Eastern Time on July
22, 1998 at the offices of 1838 Investment Advisors, L.P., Five Radnor Corporate
Center, 100 Matsonford Road, Suite 320, Radnor, Pennsylvania 19087. Proxies will
be voted in accordance with the instructions contained thereon. If no
instructions are given, proxies that are signed and returned will be voted in
favor of the proposals. A shareholder may revoke his or her proxy at any time
before it is exercised by delivering a written notice to the Trust expressly
revoking such proxy, by executing and forwarding to the Trust a subsequently
dated proxy, or by voting in person at the Meeting. This proxy statement and the
accompanying form of proxy are being first sent to shareholders on approximately
July 1, 1998. In the event a quorum is not present in person or by proxy at the
Meeting, or if there are insufficient votes to approve a particular proposal,
the persons named as proxies will consider the best interests of the
shareholders in deciding whether the Meeting should be adjourned.

As of the close of business on June 15, 1998, the record date fixed by the
Board of Trustees for the determination of shareholders of the Funds entitled to
notice of and to vote at the Meeting ("Record Date"), 4,677,945.215 shares of
the 1838 International Equity Fund, 3,258,376.641 shares of the 1838 Small Cap
Equity Fund and 6,166,438.631 shares of the 1838 Fixed Income Fund were
outstanding.

Shareholders of the Funds will vote separately with respect to the approval
of their respective Fund's new investment advisory agreement with 1838
Investment Advisors, Inc. (Proposal 1). The vote of the holders of a "majority
of the outstanding voting securities" of each Fund, as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), represented at the meeting in
person or by proxy, is required for approval of each investment advisory
agreement ("1940 Act Majority Vote"). A 1940 Act Majority Vote means the vote of
(a) at least 67% of the shares of each Fund present in person or by proxy, if
more than 50% of the shares of the Fund are represented at the meeting, or (b)
more than 50% of the outstanding shares of each Fund, whichever is less.

-1-
<PAGE>

Under Delaware law, abstentions and broker non-votes will be included for
purposes of determining whether a quorum is present at the Meeting, but will be
treated as votes not cast and, therefore, would not be counted for purposes of
determining whether the Proposal has been approved.

The cost of solicitation, including preparing and mailing the proxy
materials, will be borne by 1838 Investment Advisors, Inc. In addition to
solicitations through the mails, the employees of 1838 Investment Advisors, L.P.
may solicit proxies by telephone, telegraph and personal interviews. It is not
anticipated that any of the foregoing persons will be specially engaged for that
purpose.

PRINCIPAL SHAREHOLDERS

The following shareholders beneficially owned more than 5% of the Funds'
outstanding shares as of the Record Date:

NUMBER OF SHARES PERCENTAGE
NAME & ADDRESS BENEFICIALLY OWNED OF FUND
- -------------- ------------------ ----------

1838 INTERNATIONAL EQUITY FUND:

Patterson & Co. 2,968,307 63.45%
P.O. Box 7829
Philadelphia, PA 19101

1838 SMALL CAP EQUITY FUND:

Patterson & Co. 1,368,024 41.98%
c/o CoreStates Bank NA
P.O. Box 7829
Philadelphia, PA 19106

Poolside & Co. 649,313 19.93%
1 Enterprise Drive
Quincy, MA 02171

Richard B. Ryon Insurance 197,765 6.07%
Ryon and Company
200 Norweigan Street
Pottsville, PA 17901

Trustees of Upper Darby 209,888 6.44%
Police Pension Plan
c/o Al Danish KDB Resources
12 South Monroe Street, Suite 301
Media, PA 19063

1838 FIXED INCOME FUND:

Patterson & Co. 408,313 6.58%
c/o CoreStates Bank
Penna Med Soc Pension Plan
530 Walnut Street
P.O. Box 7829
Philadelphia, PA 19106

Patterson & Co. 580,345 9.35%
Upland County Day School
c/o CoreStates Bank
530 Walnut Street
Philadelphia, PA 19106

Patterson & Co. 994,453 16.03%
NBME Long Term Fund
c/o CoreStates Bank
530 Walnut Street
Philadelphia, PA 19106

Patterson & Co. 468,341 7.55%
Analytic Service Inc.
c/o CoreStates Bank
530 Walnut Street
Philadelphia, PA 19106

Patterson & Co. 610,239 9.83%
Little League Baseball Capital Ft.
Fucio
c/o CoreStates Bank
530 Walnut Street
Philadelphia, PA 19106

Patterson & Co. 398,974 6.43%
American Board of Surgery
c/o CoreStates Bank
530 Walnut Street
Philadelphia, PA 19106

As of the Record Date, the Trustees and officers of the Trust, as a group,
beneficially owned less than 1% of the Funds' outstanding shares.

-2-
<PAGE>

PROPOSAL NO. 1

APPROVAL OF INVESTMENT ADVISORY AGREEMENTS

Shareholders of the Funds are being asked to approve new investment
advisory agreements ("New Agreements") between 1838 Investment Advisors, Inc.
("1838 Inc.") and 1838 Investment Advisors Funds (the "Trust") on behalf of the
Funds.

The reason that shareholders are being asked to approve the New Agreements
is that 1838 Inc. plans to merge with MBIA, Inc. ("MBIA") in a transaction (the
"Merger") that will result in a change of control of 1838 Inc. Under the 1940
Act, such change of control would be deemed to cause the assignment of 1838
Investment Advisors, L.P.'s current investment advisory agreements (the
"Existing Agreements") with the Trust on behalf of the Funds resulting in their
automatic termination. Once these agreements have terminated, the New Agreements
between 1838 Inc. and the Trust on behalf of the Funds must be submitted to the
Funds' shareholders for their approval.

The following summary provides information about 1838 Inc. and 1838 L.P.,
MBIA and the Merger, as well as the Existing Agreements and the New Agreements.

INFORMATION CONCERNING 1838 INC. AND 1838 L.P.

1838 Inc. is a Delaware corporation whose sole business activity is the
management and holding of its partnership interest in 1838 Investment Advisors,
L.P. ("1838 L.P."). 1838 L.P. is a Delaware limited partnership and is an
investment adviser registered under the Investment Adviser's Act of 1940.
MeesPierson Capital Management, Inc. held a 24.9% limited partnership interest
in 1838 L.P. until May 15, 1998 when it redeemed its interest and withdrew as a
limited partner. At present, 1838 Inc. holds a 99.33% partnership interest in
1838 L.P., and W. Thacher Brown, Trustee, Chairman and President of the Trust,
holds a 0.67% partnership interest in 1838 L.P. Both 1838 Inc. and 1838 L.P.
have offices located at Five Radnor Corporate Center, Suite 320, 100 Matsonford
Road, Radnor, Pennsylvania 19087.

Each officer or trustee of the Trust who is also an officer, director,
employee, general partner and/or a shareholder of 1838 L.P. is listed as
follows:

NAME & POSITION WITH THE TRUST POSITION WITH 1838 L.P.
------------------------------ -----------------------
W. THACHER BROWN President, Chief Executive
Trustee, Chairman and President Officer and Partner

-3-
<PAGE>

NAME & POSITION WITH THE TRUST POSITION WITH 1838 L.P.
------------------------------ -----------------------
GEORGE W. GEPHART, JR. Principal
Trustee and Vice President

JOHANNES B. VAN DEN BERG Principal and Portfolio Manager
Vice President

EDWIN B. POWELL Principal and Portfolio Manager
Vice President

MARCIA ZERCOE Principal and Portfolio Manager
Vice President

ANNA M. BENCROWSKY Director, Investment Advisory
Vice President, Secretary and and Mutual Funds Operations
Treasurer

INFORMATION CONCERNING MBIA AND THE MERGER

MBIA is a Connecticut corporation with principal offices at 113 King
Street, Armonk, New York 10504. MBIA is a reporting company under the Securities
Exchange Act of 1934. MBIA's common stock is listed on the New York Stock
Exchange under the symbol "MBI."

MBIA, through its wholly-owned subsidiary, MBIA Insurance Corporation, is
an insurer of municipal bonds and structured finance transactions. MBIA also is
a provider of investment management services to the public sector. The name,
address and principal occupation of the principal executive officers and
directors of MBIA are as follows:

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH MBIA PRINCIPAL OCCUPATION
- ---------------- ------------------ --------------------
<S> <C> <C>
JOSEPH W. BROWN, JR. Director Director of Insurance Entity
Talegen Holdings, Inc.
Seattle, Washington

DAVID C. CLAPP Director Investment Banker
The Goldman Sachs Group, L.P.
New York, New York

DAVID H. ELLIOTT Chairman and Chief Business Executive
MBIA Inc. Executive Officer
Armonk, New York

-4-
<PAGE>

<CAPTION>
NAME AND ADDRESS POSITION WITH MBIA PRINCIPAL OCCUPATION
- ---------------- ------------------ --------------------
<S> <C> <C>
CLAIRE L. GAUDIANI Director College President
Connecticut College
New London, Connecticut

WILLIAM H. GRAY, III Director Executive of Non-Profit
United Negro College Fund, Inc. Entity
Fairfax, Virginia

FREDA S. JOHNSON Director Executive of Municipal
Government Finance Finance Entity
Associates, Inc.
New York, New York

DANIEL P. KEARNEY Director Former Executive of
Retired Insurance Entity
Hartford, Connecticut

JAMES A. LEBENTHAL Director Executive of Broker/Dealer
Lebenthal & Co., Inc. Entity
New York, New York

PIERRE-HENRI RICHARD Director Executive of Foreign Banking
Credit Local de France Entity
Paris, France

JOHN A. ROLLS Director Business Executive
Thermion Systems International
Stamford, Connecticut

RICHARD L. WEILL Vice Chairman Business Executive
MBIA Inc.
Armonk, New York

NEIL G. BUDNICK President, Public and Business Executive
MBIA Inc. Corporate Finance
Armonk, New York

JOHN B. CAOUETTE President, Structured Business Executive
MBIA Inc. Finance
Armonk, New York

-5-
<PAGE>

<CAPTION>
NAME AND ADDRESS POSITION WITH MBIA PRINCIPAL OCCUPATION
- ---------------- ------------------ --------------------
<S> <C> <C>
GARY C. DUNTON Chief Investment Officer, Business Executive;
MBIA Inc. President, Investment Investment Manager
Armonk, New York Management and
Financial Services
Division

LOUIS G. LENZI General Counsel and Attorney
MBIA Inc. Secretary
Armonk, New York

KEVIN D. SILVA Senior Vice President Business Executive
MBIA Inc.
Armonk, New York

JULIETTE S. TEHRANI Executive Vice President, Business Executive
MBIA Inc. Chief Financial Officer
Armonk, New York and Treasurer
</TABLE>

Pursuant to an Agreement and Plan of Merger dated June 19, 1998
("Agreement"), 1838 Inc. will merge with MBIA through a stock swap in which MBIA
will issue shares of its common stock in exchange for shares of 1838 Inc. The
terms of the Agreement generally provide for an exchange of 2.134 shares of MBIA
common stock for each share of 1838 Inc. common stock issued and outstanding.
For purposes of valuing this share exchange, the MBIA common stock will be
priced at $74 per share. The following Trustees of the Trust own shares of 1838
Inc. and therefore shall receive MBIA common stock in exchange for their 1838
Inc. shares pursuant to the Agreement: W. Thacher Brown (owns 208,300 shares, or
approximately 36% of the outstanding shares of 1838 Inc.) and George W. Gephart,
Jr. (owns 55,000 shares, or approximately 10% of the outstanding shares of 1838
Inc.). Additionally, according to the terms of the Agreement, Messrs. Brown and
Gephardt shall enter into employment agreements with 1838 Inc.

After the Merger, MBIA plans to collapse 1838 L.P. into 1838 Inc., with
1838 Inc. being the corporate successor to 1838 L.P. Following consummation of
the Merger (which is expected to occur on July 31, 1998), 1838 Inc. will be a
wholly-owned subsidiary of MBIA. MBIA plans to create a new holding company
called MBIA Asset Management Corporation,

-6-
<PAGE>

which will hold all the asset management subsidiaries of MBIA, including 1838
Inc. W. Thacher Brown is expected to be appointed President of MBIA Asset
Management Corporation.

Although the Merger will result in a change of control of 1838 Inc., and
therefore, 1838 L.P., it is expected that 1838 Inc., as corporate successor to
1838 L.P., will continue to operate as 1838 L.P. currently operates. The
investment philosophy and procedures of 1838 L.P. will not change following the
Merger, nor will the current investment personnel. Also, the day-to-day
portfolio managers of the Funds will remain the same following the merger. 1838
L.P., and therefore the Funds, should benefit from the Merger because they will
have access to the personnel and resources of MBIA.

After completion of the Merger, the principal executive officers and
directors of 1838 Inc. and its parent, MBIA, will be the same as listed above,
except that W. Thacher Brown will become a principal executive officer as
President of MBIA Asset Management Corporation.

INFORMATION CONCERNING THE EXISTING AGREEMENTS

Subject to the supervision of the Board, 1838 L.P. provides portfolio
management, research and analysis, advice and recommendations with respect to
the purchase and sale of securities for each Fund pursuant to the Existing
Agreements between the Trust, on behalf of each Fund, and 1838 L.P., dated March
28, 1995 (International Equity and Small Cap Equity Funds) and March 3, 1997
(Fixed Income Fund). 1838 L.P. also maintains certain books and records in
connection with its services to the Trust.

The Existing Agreements provide that all costs and expenses not expressly
assumed by 1838 L.P. under the Agreements shall be paid by the Trust, including,
but not limited to, the expenses incurred in : the maintenance of its corporate
existence; the maintenance of its own books, records and procedures; dealing
with its own shareholders; the payment of dividends; transfer of stock,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholder's meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; and taxes.

Pursuant to the Existing Agreements, 1838 L.P. is entitled to an annual
fee, payable monthly, equal to the following percentages of a Fund's average
daily net assets: 1838 International Equity Fund, .75%; 1838 Small Cap Equity
Fund, .75%; 1838 Fixed Income Fund, .50%. For the fiscal year ended October 31,
1997, after fee waivers by 1838 L.P. which are currently in effect, the Funds
paid the following amounts to 1838 L.P. for its services: 1838 International
Equity Fund, $279,117; 1838 Small Cap Equity Fund, $30,185; 1838 Fixed Income
Fund, $0.

-7-
<PAGE>

1838 L.P. is not be liable for any error of judgment or mistake of law for
any loss suffered by the Trust in rendering services under the Existing
Agreements except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from the reckless disregard by it of its obligations and duties under
the Existing Agreements.

The Existing Agreements were approved for a two year period by the initial
shareholders of each Fund, and were last approved by the Trustees at a meeting
held for that purpose on March 9, 1998 (with respect to the International Equity
and Small Cap Equity Funds). The Existing Agreements remain in effect from year
to year if specifically approved at least annually by vote of "a majority of the
outstanding voting securities" of the Trust, as defined under the Act, or by the
Board of Trustees and, in either event, by the vote of a majority of the
Trustees who are not parties to the Agreements or interested persons of any such
party, cast in person at a meeting called for such purpose. The Agreements may
be terminated by the Trust or 1838 Inc. without penalty at any time on sixty
(60) days' written notice to the other party.

The Merger will result in a change of control of 1838 L.P. and may be
deemed to be an "assignment" (as defined in the 1940 Act) of the Existing
Agreements. Such an assignment triggers the automatic termination of the
Agreements pursuant to their terms as required under the 1940 Act. Thus, in
order for the Trust to continue to receive the investment management services it
now receives from 1838 L.P., it is necessary for the Trust, on behalf of the
Funds, to enter into the New Agreements to become effective after consummation
of the Merger. Except for the effective date, termination date and change of
corporate structure of 1838 L.P., the New Agreements contain the same terms as
the Existing Agreements (see "Information Concerning the New Agreements,"
below).

If the New Agreements are not approved by the shareholders of the Funds,
the Trustees of the Trust will consider what other action is appropriate based
upon the best interests of the shareholders.

INFORMATION CONCERNING THE NEW AGREEMENTS

The New Agreements are identical to the Existing Agreements, except for a
change in the effective and termination dates and change of corporate structure
of 1838 L.P. A form of the New Agreements is attached to this Proxy Statement as
Exhibit A.

It is anticipated that the New Agreements will be dated as of the effective
date of the Merger, which is expected to close on July 31, 1998. The New
Agreements will continue in effect for an initial term of two years and may
continue thereafter from year to year if

-8-
<PAGE>

specifically approved at least annually by the vote of "a majority of the
outstanding voting securities" of the Trust or by the Board of Trustees of the
Trust and, in either event, by the vote of a majority of the Trustees who are
not parties to the New Agreements or interested persons of any such party, cast
in person at a meeting called for such purpose.

EVALUATION OF THE MERGER AND NEW AGREEMENTS BY THE BOARD OF TRUSTEES

Section 15(f) of the 1940 Act permits, in the context of a change in
control of an investment adviser to a registered investment company, the receipt
by such adviser, or any of its affiliated persons, of any amount or benefit in
connection with a sale of an interest in the adviser, as long as two conditions
are satisfied. First, an "unfair burden" (as defined in the 1940 Act) must not
be imposed on the investment company as a result of the sale of the interest in
the company's adviser. For purposes of Section 15(f), an unfair burden would
include any arrangement during a two year period after the sale of such interest
whereby the investment adviser, or any interested persons of such adviser,
receives or is entitled to receive any compensation from the investment company
or its shareholders other than fees for bona fide investment advisory or other
services. The second condition of Section 15(f) is that during the three year
period after the sale of such interest, at least 75% of the investment company's
board of directors must not be "interested persons" of the investment company's
adviser or predecessor adviser.

Management of the Trust is not aware of any circumstances arising from the
Merger that might result in the imposition of an "unfair burden" on the Trust.
Furthermore, the second condition of Section 15(f), the 75% disinterested
director requirement, will be satisfied prior to the closing of the Merger. On
June 1, 1998, the Fund's Trustees approved a resolution providing that the
Trust's Board of Trustees shall consist of four members. Mr. George Gephart,
currently a Trustee of the Trust, and an "interested person" of 1838 L.P., as
defined in the 1940 Act, will resign from the Board of Trustees of the Trust
effective July 22, 1998. The effect of Mr. Gephart's resignation will be that
the Board shall consist of four Trustees, three of whom will be disinterested
persons.

The Board of Trustees of the Trust met on June 1, 1998 to consider the
Merger and its anticipated effects upon the investment management services that
1838 Inc. currently provides to the Funds. The Board, including a majority of
the Trustees who are not parties to the investment advisory agreements or
interested persons of any such party, voted to recommend the New Agreements to
the Funds' shareholders for their approval.

At the June 1, 1998 meeting, the Trustees had the opportunity to question
directly representatives of MBIA to determine why MBIA chose to acquire 1838
L.P. and to determine how the Merger will benefit the Funds. MBIA, in acquiring
1838 L.P., is seeking to build its

-9-
<PAGE>

equity management capabilities. MBIA is experienced and active in fixed income
management, and expects to realize efficiencies in combining its business with
that of 1838 L.P.. The Trustees, on behalf of each Fund, considered the
structure that 1838 L.P. will be incorporated into following the Merger. As part
of the streamlined organization of the MBIA investment management entities, 1838
Inc., as corporate successor to 1838 L.P., will have access to the personnel and
resources of MBIA, which should be of benefit to the Funds. In addition, MBIA
intends to focus on expanding its external marketing network, which also should
benefit the Funds by helping to expand the Funds' asset base to achieve
economies of scale.

The Board of Trustees, on behalf of each Fund, requested and reviewed
various materials with respect to MBIA and the Merger, including materials
furnished by MBIA. These materials included information about MBIA, its
personnel, operations and financial condition. MBIA provided its annual report
for its fiscal year ended 1997, as well as MBIA's most recent 10-K and 10-Q
filings. The Board of Trustees also reviewed the terms of the Merger of 1838
L.P. into MBIA, and evaluated the ability of MBIA to provide a stable financial
environment for the operation of 1838 Inc., as corporate successor to 1838 L.P.,
and the Funds.

In considering the New Agreements, the Trustees considered that the terms
do not contemplate any change in (i) the management or operations of 1838 Inc.,
as corporate successor to 1838 L.P., relating to the Funds; (ii) the personnel,
including the day-to-day portfolio managers, managing the Funds; or (iii) the
fees paid by the Funds to 1838 Inc., as corporate successor to 1838 L.P., for
its services. MBIA and 1838 L.P., has informed the Board of Trustees that the
Merger is not expected to result in any changes to the foregoing and that at
present MBIA has no plans or proposals to make any changes in its business or
the composition of management or personnel of 1838 Inc., as corporate successor
to 1838 L.P., other than as already described herein, or in the fees charged to
the Funds. Following the consummation of the Merger, 1838 Inc., as corporate
successor to 1838 L.P., is expected to continue to operate in substantially the
same manner as 1838 L.P. presently operates. There can be no assurances,
however, that changes may not occur. If, after the consummation of the Merger,
changes in 1838 Inc., as corporate successor to 1838 L.P., are proposed that
might materially affect its services to the Funds, the Board of Trustees will
consider the effect of those changes and take such action as it deems advisable
under the circumstances.

-10-
<PAGE>

THE BOARD OF TRUSTEES RECOMMENDS
APPROVAL OF PROPOSAL NO. 1 TO APPROVE THE
NEW INVESTMENT ADVISORY AGREEMENTS.

PROPOSAL NO. 2

OTHER BUSINESS

Management knows of no matters to be brought before the Meeting other than
those mentioned in this Proxy Statement. If other matters do come before the
Meeting, it is intended that the shares represented by proxies will be voted in
accordance with the judgment of the person or persons exercising at the Meeting
the authority conferred by the proxies.

GENERAL INFORMATION

Declaration Service Company serves as the administrator, accounting
services, dividend disbursing and transfer agent for the Trust, and Declaration
Distributors, Inc. serves as principal underwriter for the Trust. Declaration
Service Company and Declaration Distributors are each located at 555 North Lane,
Suite 6160, Conshohocken, PA 19428.

SHAREHOLDER REPORTS

The most recent Annual Report and Semi-Annual Report of the Trust are
available at no cost to shareholders upon request by writing to the Trust at
Five Radnor Corporate Center, 100 Matsonford Road, Suite 320, Radnor, PA 19087,
or by calling the Trust's administrator at 1-800-884-1838.

SHAREHOLDER PROPOSALS

Any shareholder who desires to submit a shareholder proposal may do so by
submitting such proposal in writing, addressed to the Secretary of the Fund, at
Five Radnor Corporate Center, 100 Matsonford Road, Suite 320, Radnor, PA 19087.
Ordinarily, the Fund does not hold annual shareholder meetings.

By Order of the Board of Trustees

ANNA M. BENCROWSKY
Secretary

July 1, 1998

-11-
<PAGE>

EXHIBIT A
---------

1838 INVESTMENT ADVISORS FUNDS
INVESTMENT ADVISORY AGREEMENT

AGREEMENT, made by and between 1838 INVESTMENT ADVISORS FUNDS, a Delaware
business trust (hereinafter called the "Trust"), on behalf of 1838 INTERNATIONAL
EQUITY FUND (the "Fund"), and 1838 INVESTMENT ADVISORS, INC., a Delaware
corporation (hereinafter called the "Investment Adviser").

W I T N E S S E T H:

WHEREAS, the Trust has been organized and operates as an investment company
registered under the Investment Company Act of 1940 (the "1940 Act") and engages
in the business of investing and reinvesting its assets in securities, and the
Investment Adviser is a registered Investment Adviser under the Investment
Advisers Act of 1940 (the "Advisers Act") and engages in the business of
providing investment management services; and

WHEREAS, the Trust has selected the Investment Adviser to serve as the
investment adviser for the Fund effective as of the date of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:

1. The Trust on behalf of the Fund hereby employs the Investment Adviser
to manage the investment and reinvestment of the Fund's assets and to administer
its affairs, subject to the direction of the Board of Trustees and officers of
the Trust for the period and on the terms hereinafter set forth. The Investment
Adviser hereby accepts such employment and agrees during such period to render
the services and assume the obligations herein set forth for the

-1-
<PAGE>

compensation herein provided. The Investment Adviser shall for all purposes
herein, be deemed to be an independent contractor, and shall, unless otherwise
expressly provided and authorized, have no authority to act for or to represent
the Trust or the Fund in any way, or in any way be deemed an agent of the Trust
or the Fund. The Investment Adviser shall regularly make decisions as to what
securities to purchase and sell on behalf of the Fund and shall record and
implement such decisions and shall furnish the Board of Trustees of the Trust
with such information and reports regarding the Fund's investments as the
Investment Adviser deems appropriate or as the Trustees of the Trust may
reasonably request. Subject to compliance with the requirements of the 1940 Act,
the Investment Adviser may retain as a sub-adviser to the Fund, at the
Investment Adviser's own expense, any investment adviser registered under the
Advisers Act.

2. The Fund shall conduct its own business and affairs and shall bear the
expenses and salaries necessary and incidental thereto including, but not in
limitation of the foregoing, the costs incurred in: the maintenance of its
corporate existence; the maintenance of its own books, records and procedures;
dealing with its own shareholders; the payment of dividends; transfer of stock,
including issuance, redemption and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; and taxes. Officers and employees of
the Investment Adviser may be trustees, directors, officers and employees of the
funds of which the Investment Adviser serves as investment adviser. Officers and
employees of the Investment Adviser who are trustees, officers

-2-
<PAGE>

and/or employees of the Trust shall not receive any compensation from the Trust
for acting in such dual capacity.

In the conduct of the respective businesses of the parties hereto and in
the performance of this Agreement, the Trust and Investment Adviser may share
facilities common to each, with appropriate proration of expenses between them.

3. (a) The Investment Adviser shall place and execute Fund orders for
the purchase and sale of portfolio securities with broker-dealers. Subject to
the primary objective of obtaining the best available prices and execution, the
Investment Adviser will place orders for the purchase and sale of portfolio
securities for the Fund with such broker-dealers as it may select from time to
time, including brokers who provide statistical, factual and financial
information and services to the Fund, to the Investment Adviser, or to any other
fund for which the Investment Adviser provides investment advisory services
and/or with broker-dealers who sell shares of the Fund or who sell shares of any
other fund for which the Investment Adviser provides investment advisory
services. Broker-dealers who sell shares of the funds of which the Investment
Adviser is investment adviser, shall only receive orders for the purchase or
sale of portfolio securities to the extent that the placing of such orders is in
compliance with the Rules of the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc.

(b) Notwithstanding the provisions of subparagraph (a) above and
subject to such policies and procedures as may be adopted by the Board of
Trustees and officers of the Trust, the Investment Adviser is authorized to pay
a member of an exchange, broker or dealer an amount of commission for effecting
a securities transaction in excess of the amount of commission another member of
an exchange, broker or dealer would have charged for effecting

-3-
<PAGE>

that transaction, in such instances where the Investment Adviser has determined
in good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such member, broker or
dealer, viewed in terms of either that particular transaction or the Investment
Adviser's overall responsibilities with respect to the Fund and to other funds
for which the Investment Adviser exercises investment discretion.

4. As compensation for the services to be rendered to the Fund by the
Investment Adviser under the provisions of this Agreement, the Trust on behalf
of the Fund shall pay to the Investment Adviser from the Fund's assets an annual
fee equal to .75% of the daily average net assets of the Fund, payable on a
monthly basis, subject to reduction to the extent necessary to comply with the
most stringent limits prescribed by any state in which the Fund's shares are
offered for sale.

If this Agreement is terminated prior to the end of any calendar month, the
management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of calendar
days, during which the Agreement is in effect, bears to the number of calendar
days in the month, and shall be payable within 10 days after the date of
termination.

5. The services to be rendered by the Investment Adviser to the Trust on
behalf of the Fund under the provisions of this Agreement are not to be deemed
to be exclusive, and the Investment Adviser shall be free to render similar or
different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby.

6. The Investment Adviser, its officers, employees, and agents may engage
in other businesses, may render investment advisory services to other investment
companies, or

-4-
<PAGE>

to any other corporation, association, firm or individual, and may render
underwriting services to the Trust on behalf of the Fund or to any other
investment company, corporation, association, firm or individual.

7. In the absence of willful misfeasance, bad faith, gross negligence, or
a reckless disregard of the performance of duties of the Investment Adviser to
the Fund, the Investment Adviser shall not be subject to liabilities to the Fund
or to any shareholder of the Fund for any action or omission in the course of,
or connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security, or otherwise.

8. The Trust agrees that, in the event that the Investment Adviser ceases
to be the Fund's investment adviser for any reason, the Trust will (unless the
Investment Adviser otherwise agrees in writing) promptly take all necessary
steps to propose to the Fund's shareholders at the next regular meeting that the
Fund change to a name not including the word "1838." The Trust agrees that the
word "1838" in the Fund's name is derived from the name of the Investment
Adviser and is the property of the Investment Adviser for copyright and all
other purposes and that therefore such word may be freely used by the Investment
Adviser as to other investment activities or other investment products.

9. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding voting
securities of the Fund. It shall continue in effect for a period of two years
and may be renewed thereafter only so long as such renewal and continuance is
specifically approved at least annually by the Board of Trustees or by vote of a
majority of the outstanding voting securities of the Fund and only if the

-5-
<PAGE>

terms and the renewal hereof have been approved by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. No amendment to this Agreement shall be effective unless the terms
thereof have been approved by the vote of a majority of the outstanding voting
securities of the Fund and by the vote of a majority of Trustees of the Trust
who are not parties to the Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
Notwithstanding the foregoing, this Agreement may be terminated by the Trust at
any time, without the payment of a penalty, on sixty days' written notice to the
Investment Adviser of the Trust's intention to do so, pursuant to action by the
Board of Trustees of the Trust or pursuant to a vote of a majority of the
outstanding voting securities of the Fund. The Investment Adviser may terminate
this Agreement at any time, without the payment of penalty on sixty days'
written notice to the Trust of its intention to do so. Upon termination of this
Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination, and
except for the obligation of the Trust to pay to the Investment Adviser the fee
provided in Paragraph 4 hereof, prorated to the date of termination. This
Agreement shall automatically terminate in the event of its assignment.

10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.

11. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.

-6-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers the day of , 199 .

Attest: 1838 INVESTMENT ADVISORS FUNDS

By:
- ------------------------------ -------------------------------
W. Thacher Brown
President

Attest: 1838 INVESTMENT ADVISORS, INC.

By:
- ------------------------------ -------------------------------
W. Thacher Brown
President

-7-
<PAGE>

1838 INVESTMENT ADVISORS FUNDS
INVESTMENT ADVISORY AGREEMENT

AGREEMENT, made by and between 1838 INVESTMENT ADVISORS FUNDS, a Delaware
business trust (hereinafter called the "Trust"), on behalf of 1838 SMALL CAP
EQUITY FUND (the "Fund"), and 1838 INVESTMENT ADVISORS, INC., a Delaware
corporation (hereinafter called the "Investment Adviser").

W I T N E S S E T H:

WHEREAS, the Trust has selected the Investment Adviser to serve as the
investment adviser for the Fund effective as of the date of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:

-8-
<PAGE>

to be an independent contractor, and shall, unless otherwise expressly provided
and authorized, have no authority to act for or to represent the Trust or the
Fund in any way, or in any way be deemed an agent of the Trust or the Fund. The
Investment Adviser shall regularly make decisions as to what securities to
purchase and sell on behalf of the Fund and shall record and implement such
decisions and shall furnish the Board of Trustees of the Trust with such
information and reports regarding the Fund's investments as the Investment
Adviser deems appropriate or as the Trustees of the Trust may reasonably
request. Subject to compliance with the requirements of the 1940 Act, the
Investment Adviser may retain as a sub-adviser to the Fund, at the Investment
Adviser's own expense, any investment adviser registered under the Advisers Act.

-9-
<PAGE>

-10-
<PAGE>

research services provided by such member, broker or dealer, viewed in terms of
either that particular transaction or the Investment Adviser's overall
responsibilities with respect to the Fund and to other funds for which the
Investment Adviser exercises investment discretion.

6. The Investment Adviser, its officers, employees, and agents may engage
in other businesses, may render investment advisory services to other investment
companies, or to any other corporation, association, firm or individual, and may
render underwriting services to

-11-
<PAGE>

the Trust on behalf of the Fund or to any other investment company, corporation,
association, firm or individual.

-12-
<PAGE>

Trust who are not parties hereto or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on such approval. No
amendment to this Agreement shall be effective unless the terms thereof have
been approved by the vote of a majority of the outstanding voting securities of
the Fund and by the vote of a majority of Trustees of the Trust who are not
parties to the Agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval. Notwithstanding
the foregoing, this Agreement may be terminated by the Trust at any time,
without the payment of a penalty, on sixty days' written notice to the
Investment Adviser of the Trust's intention to do so, pursuant to action by the
Board of Trustees of the Trust or pursuant to a vote of a majority of the
outstanding voting securities of the Fund. The Investment Adviser may terminate
this Agreement at any time, without the payment of penalty on sixty days'
written notice to the Trust of its intention to do so. Upon termination of this
Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination, and
except for the obligation of the Trust to pay to the Investment Adviser the fee
provided in Paragraph 4 hereof, prorated to the date of termination. This
Agreement shall automatically terminate in the event of its assignment.

10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.

11. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.

-13-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers the day of , 199 .

Attest: 1838 INVESTMENT ADVISORS FUNDS

By:
- ------------------------------ -------------------------------
W. Thacher Brown
President

Attest: 1838 INVESTMENT ADVISORS, INC.

By:
- ------------------------------ -------------------------------
W. Thacher Brown
President

-14-
<PAGE>

1838 INVESTMENT ADVISORS FUNDS
INVESTMENT ADVISORY AGREEMENT

AGREEMENT, made by and between 1838 INVESTMENT ADVISORS FUNDS, a Delaware
business trust (hereinafter called the "Trust"), on behalf of 1838 FIXED INCOME
FUND (the "Fund"), and 1838 INVESTMENT ADVISORS, INC., a Delaware corporation
(hereinafter called the "Investment Adviser").

W I T N E S S E T H:

WHEREAS, the Trust has selected the Investment Adviser to serve as the
investment adviser for the Fund effective as of the date of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and each of the parties hereto intending to be legally bound, it is agreed as
follows:

-15-
<PAGE>

-16-
<PAGE>

-17-
<PAGE>

4. As compensation for the services to be rendered to the Fund by the
Investment Adviser under the provisions of this Agreement, the Trust on behalf
of the Fund shall pay to the Investment Adviser from the Fund's assets an annual
fee equal to .50% of the daily average net assets of the Fund, payable on a
monthly basis, subject to reduction to the extent necessary to comply with the
most stringent limits prescribed by any state in which the Fund's shares are
offered for sale.

-18-
<PAGE>

the Trust on behalf of the Fund or to any other investment company, corporation,
association, firm or individual.

-19-
<PAGE>

10. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.

11. For the purposes of this Agreement, the terms "vote of a majority of
the outstanding voting securities"; "interested persons"; and "assignment" shall
have the meaning defined in the 1940 Act.

-20-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused their corporate seals to
be affixed and duly attested and their presents to be signed by their duly
authorized officers the day of , 199 .

Attest: 1838 INVESTMENT ADVISORS FUNDS

By:
- ------------------------------ -------------------------------
W. Thacher Brown
President

Attest: 1838 INVESTMENT ADVISORS, INC.

By:
- ------------------------------ -------------------------------
W. Thacher Brown
President

-21-
<PAGE>

BY SIGNING AND DATING THE BACK OF THIS BALLOT, YOU AUTHORIZE THE PROXY TO VOTE
EACH PROPOSAL AS MARKED. IF NOT MARKED, THE PROXY WILL VOTE "FOR" EACH PROPOSAL,
AND AS THEY SEE FIT ON ANY OTHER MATTER AS MAY PROPERLY COME BEFORE THE MEETING.
IF YOU DO NOT INTEND TO PERSONALLY ATTEND THE MEETING, PLEASE COMPLETE AND MAIL
THIS BALLOT AT ONCE IN THE ENCLOSED ENVELOPE.

1838 INVESTMENT ADVISORS FUNDS
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS - JULY 22, 1998

The undersigned hereby constitutes and appoints Anna M. Bencrowsky with
power of substitution, as proxy to appear and vote all of the shares of
beneficial interest standing in the name of the undersigned on the record date
at the special meeting of shareholders of 1838 Investment Advisors Funds, to be
held at 12:30 p.m. Eastern Time on July 22, 1998 at Five Radnor Corporate
Center, 100 Matsonford Road, Suite 320, Radnor, PA 19087, or at any postponement
or adjournment thereof; and the undersigned hereby instructs said proxy to vote
as indicated on this proxy ballot.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED IN THE
FOLLOWING ITEMS. IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED TO APPROVE EACH
PROPOSAL. PLEASE REFER TO THE PROXY STATEMENT DISCUSSION OF THESE MATTERS. THIS
PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES.

1. Approval of the following Investment Advisory Agreements:

The following item is to be voted on ONLY by shareholders of record of
1838 International Equity Fund:

(a) To approve or disapprove a new Investment Advisory Agreement
between 1838 Investment Advisors, Inc. and 1838 Investment
Advisors Funds on behalf of 1838 International Equity Fund.

FOR |_| AGAINST |_| ABSTAIN |_|

The following item is to be voted on ONLY by shareholders of record of
1838 Small Cap Equity Fund:

(b) To approve or disapprove a new Investment Advisory Agreement
between 1838 Investment Advisors, Inc. and 1838 Investment
Advisors Funds on behalf of 1838 Small Cap Equity Fund.

FOR |_| AGAINST |_| ABSTAIN |_|

-22-
<PAGE>

The following item is to be voted on ONLY by shareholders of record of
1838 Fixed Income Fund:

(c) To approve or disapprove a new Investment Advisory Agreement
between 1838 Investment Advisors, Inc. and 1838 Investment
Advisors Funds on behalf of 1838 Fixed Income Fund.

FOR |_| AGAINST |_| ABSTAIN |_|

- --------------------------------------------------------------------------------
SIGNATURE SIGNATURE (JOINT OWNER) DATE

PLEASE DATE AND SIGN NAME OR NAMES TO AUTHORIZE THE VOTING OF YOUR SHARES AS
INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS
SHOULD SIGN. PERSONS SIGNING AS AN EXECUTOR, TRUSTEE, ADMINISTRATOR, OR OTHER
REPRESENTATIVE SHOULD GIVE FULL TITLE AS SUCH.

-23-