TIFF INVESTMENT PROGRAM, INC.
TIFF MULTI-ASSET FUND
590 Peter Jefferson Parkway, Suite 250
Charlottesville, Virginia 22911
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY. PLEASE DO NOT SEND US A PROXY.
This information statement is being furnished to all persons owning shares
("members") of the TIFF Multi-Asset Fund (the "fund"), a series of the TIFF
Investment Program, Inc. ("TIP"), to provide the members with information
regarding an amendment to the money manager agreement (the "agreement") dated
June 10, 2003, between K.G. Redding & Associates, LLC ("Redding") and TIP on
behalf of the fund. At a board meeting held on March 2, 2004, TIP's board of
directors (the "board") unanimously approved an amendment to the agreement (the
"amendment") that, as more fully described below, replaces Redding's asset-based
fee arrangement with a performance-based fee arrangement. The performance-based
fee arrangement commenced on March 10, 2004.
TIP was not required to obtain the approval of the fund's members before
amending the agreement because TIP has obtained an exemptive order (the "order")
from the Securities and Exchange Commission (the "SEC") exempting TIP from
certain provisions of the Investment Company Act of 1940, as amended (the "1940
Act") and the regulations thereunder that would otherwise mandate such approval.
The order permits TIP to enter into new agreements or amend existing agreements
with money managers without obtaining member approval, but the exemption does
not apply to the advisory agreement with TIP's investment advisor, TIFF Advisory
Services, Inc. ("TAS"), formerly known as Foundation Advisers, Inc., or any
amendments to such agreement. This information statement is being provided to
all members of the fund as required by one of the conditions of the order.
The board expects to mail this information statement to the members of the
fund on or about May 7, 2004.
FUND INFORMATION
As of April 1, 2004, the TIFF Multi-Asset Fund had outstanding
33,051,637.908 shares of common stock representing a total net asset value of
$454,460,021.24, each dollar of net asset value being entitled to one vote.
TIFF Multi-Asset Fund
Definitive Information Statement
Page 2
As of April 1, 2004, to TIP's knowledge the following members owned
beneficially 5% or more of the shares of common stock of the fund:
<table>
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Fund
<s> <c> <c>
Robert College Foundation
276 Fifth Avenue, Suite 905
New York, NY 10001 4,110,172.785 shares 12.4%
William Caspar Graustein Memorial Fund
One Hamden Center
2319 Whitney Avenue
Hamden, CT 06518 3,547,587.644 shares 10.7%
The Greater New Orleans Foundation
1055 St. Charles Avenue, Suite 100
New Orleans, LA 70130 2,603,297.551 shares 7.9%
Shadyside Hospital Foundation
532 South Aiken Avenue, Suite 302
Pittsburgh, PA 15232 2,424,804.000 shares 7.3%
Carnegie Hero Fund Commission
425 Sixth Avenue, Suite 1640
Pittsburgh, PA 15219 2,257,175.321 shares 6.8%
Methodist Children's Home
1111 Herring Avenue
Waco, TX 76708 1,944,271.752 shares 5.9%
</table>
TIP's annual report for the year ended December 31, 2003, was previously
sent to members. An additional copy may be obtained by members, without charge,
by contacting Tina Leiter, Secretary, c/o, TIFF Advisory Services, Inc., 590
Peter Jefferson Parkway, Suite 250, Charlottesville, VA 22911, or by calling
(800) 984-0084.
TAS, 590 Peter Jefferson Parkway, Suite 250, Charlottesville, VA 22911,
serves as the fund's investment advisor. TAS is a taxable organization operated
on a not-for-profit basis and was formed by The Investment Fund for Foundations
to facilitate investment by 501(c)(3) organizations in stocks, securities, and
other assets. TAS is a registered investment advisor and serves as the advisor
to TIP.
Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116,
serves as the fund's administrator. EOS Fund Services LLC, 26 West 17th Street,
Suite 601, New York, NY 10011, serves as the fund's operations monitoring agent.
Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee, WI, 53202, serves
as the fund's distributor.
TIFF Multi-Asset Fund
Definitive Information STatement
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BACKGROUND
Since the fund commenced operations, TAS has served as its investment
advisor pursuant to an investment advisory agreement. The investment advisory
agreement for the fund provides, among other things, that TAS is responsible for
identifying qualified money managers, negotiating the terms of the money manager
agreements, and monitoring the activities and performance of the money managers.
In accordance with the provisions of the investment advisory agreement, TAS
recommended that Redding's asset-based fee arrangement be replaced with a
performance-based fee arrangement as an inducement to Redding to continue to
manage a portion of the fund's assets apart from its own commingled fund, on
which it earns performance-based fees. The fees paid to Redding under the
amendment are lower than those charged by Redding on its commingled fund. The
fee structure is consistent with TIP's other performance-based fee arrangements,
which fees must comply with the SEC's fulcrum fee requirements. These
arrangements specify a base fee ("floor"), expressed as a percentage of net
assets, a maximum fee ("cap"), and a fee formula that embodies the concept of a
"fulcrum" fee, i.e., a fee midway between the minimum and the maximum. Actual
fees paid to the money manager are proportionately related to performance above
or below the fulcrum point. The formula is designed to augment the fee if the
excess return of the manager's portfolio (i.e., its actual gross return less the
total return of the portfolio's benchmark) exceeds a specified level and to
reduce the fee if the portfolio's excess return falls below this level.
TERMS OF THE AGREEMENT AND THE AMENDED AGREEMENT
As discussed more fully below, the terms of the agreement and the amended
agreement (together, the "agreements") are identical except for the fee
schedule.
BASIC TERMS. The agreements provide that Redding is required to manage the
portion of the fund's assets allocated to them by TAS (the "portfolio"), subject
to the supervision and stated direction of TAS, and ultimately TIP's board, in
accordance with the fund's investment objective and policies; make investment
decisions for the portfolio; and place orders to purchase and sell securities on
behalf of the fund. Redding's discretion to purchase and sell securities for the
fund is further subject to written guidelines developed by TAS.
The agreements have an initial term of two years and provide that they will
thereafter continue in effect from year to year only if such continuation is
specifically approved at least annually by (a) either (i) a vote of a majority
of the board or (ii) a vote of a majority of the outstanding voting securities
of the fund and (b) a vote of a majority of the fund's independent directors.
The agreements provide that they may be terminated by the fund, by the board, by
a vote of a majority of the outstanding voting securities of the fund, or by the
money manager, in each case at any time upon 30 days' written notice to the
other party. In addition, the agreements provide for their automatic termination
in the event of their assignment.
The agreements also provide that the fund will indemnify and hold Redding
harmless against all damages, costs, and expenses, including reasonable
attorney's fees, incurred by Redding in the course of any threatened or actual
litigation, arbitration, or administrative proceedings brought by a shareholder,
beneficiary, governmental agency, or any other person pertaining to the managed
assets or otherwise relating to the agreements. However, the agreements provide
that the fund shall not be liable in any such case to the extent that, in the
final judgment of a court of competent jurisdiction, it is adjudicated that (i)
Redding's action or omission was not prudent or otherwise violated the
provisions of the agreements or applicable law or (ii) Redding's action or
omission constituted willful misfeasance, bad faith, or gross
TIFF Multi-Asset Fund
Definitive Information Statement
Page 4
negligence with respect to, or reckless disregard of, Redding's obligations and
duties under the agreements.
MONEY MANAGEMENT FEE. Under the current agreement, Redding is compensated
on the basis of an asset-based fee arrangement. The manager receives 0.75% per
year on the first $30 million of assets and 0.50% on amounts above $30 million.
The amended agreement replaces the asset-based fee structure with a
performance-based fee arrangement according to the following formula: a floor of
50 basis points, a cap of 250 basis points, and a fulcrum fee of 150 basis
points.
For the period beginning June 19, 2003, and ending December 31, 2003,
Redding was paid $28,239 by the fund. The table below shows what the total
management fees would have been if the performance-based fee arrangement
described in the Redding amendment had been in place for the same period of
operations and Redding had earned the minimum, fulcrum, and maximum fee.
<table>
LEVEL REDDING AMENDMENT
<s> <c>
Floor $18,826
Fulcrum $56,478
Cap $94,129
</table>
INFORMATION REGARDING REDDING
Redding provides professional real estate securities investment management
to the fund and manages the assets of the fund that TIP allocates to it. Redding
is a Chicago-based money management organization that has managed discretionary
accounts and mutual funds for over 12 years. Redding employs a concentrated,
high alpha strategy combining the most attractively priced "core" real estate
securities with a mix of fundamentally solid but under-followed, out-of-favor,
or out-of-cycle REITs that trade at significant discounts to underlying net
asset value. Redding's strategy entails both long and short positions.
The directors and officers of Redding and their principal occupations are
set forth in the table below. The principal business address of Redding and of
each director and principal executive officer, as it relates to his or her
duties at Redding, is K.G. Redding & Associates, LLC, 744 N. Wells Street,
Chicago, IL 60610.
<table>
NAME POSITION
<s> <c>
Jason S. Baine Principal
M. Katherine D'Esposito Chief Financial Officer and Compliance Officer
Missy D. Lavender Principal
Kim G. Redding Chief Executive Officer
Nicholas D. Tannura President
</table>
TIFF Multi-Asset Fund
Definitive Information Statement
Page 4
EVALUATION AND ACTION BY TIP DIRECTORS
At a meeting held on March 2, 2004, the board approved the amended
agreement providing that Redding's fees be based on performance, rather than on
asset levels. In evaluating the amended agreement, the board analyzed several
factors, among them Redding's organization, key personnel, and the specific
strategies that Redding employs in managing assets for the fund. Additionally,
the board considered the fact that Redding had been managing a portion of the
fund's assets since June 2003 and that the board and TAS were impressed by its
rigorous approach to asset management. In the board's view, retaining Redding to
serve as money manager of the fund, under the terms of the amendment, is
desirable and in the best interests of the fund and its members. Accordingly,
after consideration of all factors as it deemed relevant, the board, including a
majority of the independent directors, approved the amendment for the fund.