Supplement to Prospectus
dated November 1, 1999 for
The Hirtle Callaghan Trust
The date of this Supplement is April 25, 2000
The International Equity Portfolio: Investment Advisory Arrangements.
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Currently, Brinson Partners, Inc. ("Brinson") and Artisan Partners Limited
Partnership ("Artisan") serve as Specialist Managers for The International
Equity Portfolio ("Portfolio") of the Trust. At a Special Meeting of the Board
of Trustees ("Board") held on April 14, 2000, the Board approved the engagement
of Capital Guardian Trust Company ("CapGuardian") to replace Brinson as a
Specialist Manager for Portfolio. CapGuardian, the principal offices of which
are located at 333 South Hope Street, Los Angeles, CA 90071, is a trust company
and is organized as a corporation under California law. It is an indirect,
wholly-owned subsidiary of The Capital Group Companies, Inc. ("Capital Group"),
which maintains offices throughout the world. As of December 31, 1999,
CapGuardian managed total assets of approximately $123 billion, including
approximately $4.4 billion in assets of registered investment companies.
Day-to-day portfolio management for that portion of the Portfolio allocated to
CapGuardian will be the responsibility of the following individuals:
David I. Fisher is Chairman of the Board of CapGuardian and serves as an
officer and/or director of several affiliated companies. Mr. Fisher joined the
Capital Group in 1969 and is based in CapGuardian's West Los Angeles office. Mr.
Fisher is a graduate of the University of California at Berkeley, and holds an
MBA from the University of Missouri Graduate School of Business Administration.
Mr. Fisher is a member of the Los Angeles Society of Financial analysts and a
founding member of the International Society of Security Analysts.
Hartmut Giesecke is Chairman of the Board of Capital Group's Japanese
investment management subsidiary and serves as an officer and/or director of
several companies in the Capital Group. Mr. Giesecke has been with the Capital
Group since 1972, and has research responsibilities for Cap Guardian, focusing
on international and emerging markets. Mr. Giesecke, who currently divides his
time between Capital Group's Tokyo and Singapore offices, was a Research Fellow
with the Geneva Graduate Institute of International Studies and the German
Research Association. He received a Master of Economics degree from Freiburg
University, Germany, and an MBA from Columbia University Graduate School of
Business.
Richard N. Havas is a Senior Vice President and a portfolio manager with
research responsibilities for CapGuardian in its Montreal office; he also serves
as an officer and/or director of several companies in the Capital Group. Mr.
Havas joined the Capital Group in 1986 as a financial analyst. He holds a BA
from the University of Toronto and an MBA from INSEAD in Fontainebleau, France.
Nancy J. Kyle is a portfolio manager in CapGuardian's New York office. Ms.
Kyle is a Senior Vice President, Director and member of the Executive Committee
of CapGuardian, and serves as an officer and/or director of several companies in
the Capital Group. Before joining CapGuardian in 1991, Ms. Kyle was a Managing
Director at J.P. Morgan Investment Management Inc., where she was head the
international equities business in the U.S. Ms. Kyle earned a BA in political
science from Connecticut College and did graduate work in international
political science in the London School of Economics.
Robert Ronus is a portfolio manager in CapGuardian's West Los Angeles
office. Mr. Ronus is president and a director of CapGuardian and serves as an
officer and/or director of several companies in the Capital Group. Mr. Ronus, a
portfolio manager responsible for both global and non-U.S. portfolios, joined
the Capital Group in 1972. He holds a BA and an MA from Oxford University.
Lionel M. Sauvage is a portfolio manager in CapGuardian's West Los Angeles
office. Mr. Sauvage is senior vice president and portfolio manager of
CapGuardian and a vice president of Capital International Research, Inc. Mr.
Sauvage joined the Capital Group in 1987 as an investment analyst and has
covered European food, beverage and airline industries, as well a U.S. aerospace
companies. He holds an MBA from INSEAD in Fontainebleau, France and an
electronic engineering degree from ENSEM in Nancy, France.
Nilly Sikorsky is a portfolio manager based in Capital Group's Geneva
office. Ms. Sikorsky serves as President and Managing Director of Capital
International, S.A. and Chairman of Capital International Perspective S.A. and
as an officer and/or director of several companies in the Capital Group. Ms.
Sikorsky, who joined the Capital Group in 1962 as a statistician, was managing
editor of the Morgan Stanley Capital International Perspective for 20 years. Ms.
Sikorsky is a graduate in sociology of the University of Geneva and also
attended the University of Geneva Graduate School of International Studies. She
is a member of the Swiss Association of Financial Analysts.
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Rudolf M. Staehelin is a portfolio manager based in Capital Group's Geneva
office. Mr. Staehelin is a Senior Vice President and Director of Capital
International Research, Inc. and Director and Senior Vice President of Capital
International S.A. He joined the Capital Group in 1981 as a financial analyst
with international research responsibilities in banking and pharmaceuticals. Mr.
Staehelin holds an MBA from Stanford University Graduate School of Business, as
well as a doctorate and master's degree in law from the UniversitatBasel in
Switzerland. Mr. Staehelin is a member of the Swiss Association of Financial
Analysts, the German Society for Securities Analysts, the International Society
of Financial Analysts and the New York Society of Security Analysts.
CapGuardian will commence its engagement on the date on which the contract
between Brinson and the Trust terminates. It is anticipated that this will occur
on or about April 28, 2000 ("Effective Date"). Initially, CapGuardian will serve
under the terms of a portfolio management agreement ("Interim Agreement")
approved by the Board at the Special Meeting. The terms of the Interim
Agreement, including the advisory fee to be paid by the Portfolio, are
substantively identical to those of the Brinson Agreement, save for the identity
of the named portfolio manager and the duration of the agreement. At a Special
Meeting of the shareholders of the Portfolio, to be held on June 26, 2000,
shareholders of the Portfolio will be asked to approve the CapGuardian
engagement, together with the terms of a proposed portfolio management agreement
("Proposed CapGuardian Agreement") between the Trust and CapGuardian. The
Proposed CapGuardian Agreement, which was also approved by the Board at the
Special Meeting of the Board held on April 14, 2000, differs from the Interim
Agreement in that it calls for the payment to CapGuardian of performance based
compensation ("Performance Fee Arrangement").
The Performance Fee Arrangement contemplated by the Proposed CapGuardian
Agreement would entitle CapGuardian to receive a base fee ("Base Fee")
calculated at the annual rate of .40% (or 40 basis points) of the average net
assets of that portion of the Portfolio's assets assigned to CapGuardian
("CapGuardian Account"). After an initial one year period, the Base Fee would be
increased or decreased at an annual rate of 12.5% of the net value added by
CapGuardian over the total return of the MSCI EAFE Index plus 40 basis points
during the 12 months immediately preceding the calculation date. This 40 basis
point "performance hurdle" is designed to assure that CapGuardian will earn a
performance adjustment only with respect to the value that its portfolio
management adds to the CapGuardian Account. Under the arrangement, CapGuardian's
total compensation could not exceed 60 basis points with respect to any 12 month
period; the minimum annual fee that would be payable to CapGuardian would be 20
basis points. The Performance Fee Arrangement could increase or decrease the fee
payable to CapGuardian over the level of compensation to which Cap Guardian is
entitled under the Interim Agreement. In addition, CapGuardian could earn a
positive performance adjustment in declining markets if the decline in the total
return of CapGuardian Account is less than the decline in the total return of
the MSCI EAFE Index.
Assuming that the Proposed CapGuardian Agreement is approved by the Portfolio's
shareholders, the Portfolio will begin measuring the performance of the
CapGuardian Account for the purpose of computing CapGuardian's performance based
fee on the first business day of the month following such shareholder approval.
If, however, the Proposed CapGuardian Agreement is not approved by the
Portfolio's shareholders within 150 days of the Effective Date, the Interim
Agreement will terminate automatically.
