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240.14a-12
SKYLINE FUNDS
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January 10, 2000
PROXY STATEMENT/PROSPECTUS
Today we mailed a Proxy Statement/Prospectus to all Small Cap Value Plus and
Small Cap Contrarian shareholders of record as of December 23, 1999. The Skyline
Funds' Board of Trustees is asking that shareholders approve a proposal to merge
Small Cap Value Plus and Small Cap Contrarian into Special Equities Portfolio.
We are sending you the enclosed copy of the Proxy Statement/Prospectus in case
you have any questions about the proposed merger.
AS WE MENTIONED IN OUR LETTER DATED NOVEMBER 24, 1999, we believe that our
shareholders will benefit from the concentration of Skyline's resources into a
single investment strategy. The key advantage is that all the firm's investment
talent will be brought to bear on a single product. This consolidation will
further strengthen the depth and breadth of our equity analysis and our
decision-making. Also, fewer stocks will be owned throughout the firm, thus
allowing for increased analysis on each holding.
Why do this now? The competition in investment management, including small cap,
continues to increase. Pooling our firm's resources instead of sharing them
across services will help us better meet the challenges of a highly competitive
investment environment.
Will the investment process of Special Equities Portfolio change? No.
Bill Dutton, the portfolio manager, will continue his active involvement in the
research process. Skyline's analysts have always been active contributors in the
decision-making process. All stock purchases have required a review by the
entire investment staff. The investment staff's critique of new ideas will
continue as a required element of the firm's decision-making procedures.
We are confident about the benefits this merger will bring. I am happy to
discuss any questions you may have, please call me at 888-759-3863.
Sincerely,
Michele M. Brennan
Vice President
Director of Fund Marketing
January 10, 2000
PROXY STATEMENT/PROSPECTUS
Today we mailed a Proxy Statement/Prospectus to all Small Cap Value Plus and
Small Cap Contrarian shareholders of record as of December 23, 1999. The Skyline
Funds' Board of Trustees is asking that shareholders approve a proposal to merge
Small Cap Value Plus and Small Cap Contrarian into Special Equities Portfolio.
We are sending you the enclosed copy of the Proxy Statement/Prospectus in case
your clients have any questions about the proposed merger.
AS WE MENTIONED IN OUR LETTER DATED NOVEMBER 24, 1999, we believe that our
shareholders will benefit from the concentration of Skyline's resources into a
single investment strategy. The key advantage is that all the firm's investment
talent will be brought to bear on a single product. This consolidation will
further strengthen the depth and breadth of our equity analysis and our
decision-making. Also, fewer stocks will be owned throughout the firm, thus
allowing for increased analysis on each holding.
Why do this now? The competition in investment management, including small cap,
continues to increase. Pooling our firm's resources instead of sharing them
across services will help us better meet the challenges of a highly competitive
investment environment.
What will be the role of the Small Cap Value Plus staff if shareholders approve
this merger with Special Equities Portfolio? The Small Cap Value Plus investment
professionals will continue evaluating stocks with low P/E ratios and good
earnings growth as part of the Special Equities Portfolio management team. Small
Cap Value Plus and Special Equities Portfolio have always shared a similar
investment strategy and have co-owned many of the same securities. The Small Cap
Value Plus staff will recommend selected stocks for purchase and review their
recommendations as always with the entire investment team. Ken Kailin will work
closely with Bill Dutton, the 13-year-tenured manager of Special Equities
Portfolio.
We are confident about the benefits this merger will bring AND ENCOURAGE YOU AND
YOUR CLIENTS TO VOTE PROMPTLY. I am happy to discuss any questions you may have,
please call me at 888-759-3863.
Sincerely,
Michele M. Brennan
Vice President
Director of Fund Marketing