SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Pursuant to Rule 14a-12
NVEST, L.P.
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and 0-11.
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Nvest Companies, L.P. 617 578-3500
399 Boylston Street
Boston, Massachusetts 02116
Nvest
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact: Laurence J. Dwyer 617/578-1686
Wendy E. Devine 617/578-1884
NVEST ANNOUNCES SECOND QUARTER EARNINGS
BOSTON (July 27, 2000) - Nvest, L.P. (NYSE: NEW), whose affiliated
investment management firms have $130 billion in assets under management, today
announced results for the second quarter of 2000.
Nvest reported that net income per unit (diluted) was 36 cents per unit
in the second quarter ended June 30, 2000, compared to 46 cents per unit for the
second quarter of 1999. For the first six months of 2000, net income per unit
(diluted) was 76 cents per unit, compared to 94 cents per unit for the
corresponding period last year. During the second quarter, Nvest declared a
regular distribution of 46 cents per unit, the same as the first quarter of
2000.
On June 16, Nvest announced that it had signed a definitive agreement
with CDC Asset Management, the investment management arm of Caisse des Depots
Group, for it to acquire all the outstanding units of Nvest, L.P. and Nvest
Companies, L.P. for $40 per unit, subject to price adjustments and conditions
set forth in the agreement. CDC Asset Management is a leading institutional
asset manager in France. The acquisition is expected to be completed in the
fourth quarter of 2000.
- 1 -
Nvest derives its income and its cash available for distribution from
its ownership of approximately 15 percent of Nvest Companies, a private
partnership that is comprised of 12 investment management and six distribution
and service companies. Nvest's earnings reflect its proportionate share of Nvest
Companies' net income available for distribution, after deducting the publicly
traded partnership tax and other expenses. To fully understand the business of
Nvest, it is essential to look at the operations of Nvest Companies.
NVEST COMPANIES, L.P.
For the second quarter of 2000, operating cash flow for Nvest Companies
was $32.9 million, compared to $36.3 million for the corresponding period in
1999. Operating cash flow per unit (diluted) for Nvest Companies was 73 cents
per unit in the second quarter, compared to 82 cents in the second quarter of
1999. Net income was $22 million during the second quarter, compared to $25.3
million for the corresponding quarter last year. Revenues were $158.9 million
for the second quarter of 2000, compared to $159.8 million for the same quarter
last year. Assets under management were $130 billion on June 30, 2000, compared
to $136 billion at the end of the second quarter of 1999. Assets under
management were $134 billion on March 31, 2000.
For the first six months of 2000, operating cash flow was $67 million,
compared to $74 million for the first half of 1999. On a per unit basis, it was
$1.50 per unit, compared to $1.66 per unit for the same period last year.
Revenues were $318.3 million during the first half of 2000, compared to $322.5
million for the first six months of 1999. During the first six months of 2000,
net income was $45.2 million, compared to $51.9 million for the corresponding
period last year.
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Operating cash flow during the second quarter was impacted by the
downturn in the equity markets, as well as net outflows. Net outflows were $3.7
billion for the first six months of 2000 and included $530 million in fixed
income assets as the final withdrawal from MetLife's General Account, which
MetLife took in-house in April as part of its plan to demutualize. It also
included $700 million in seasonal withdrawals from our money market funds during
tax season and outflows from our value equity products. Nvest's outflows
occurred almost entirely during the first four months of 2000, with May and June
flat.
"The second quarter was turbulent and challenging for investors, with
nearly all the equity market indices down for the quarter," said Peter S. Voss,
Chairman and Chief Executive Officer of Nvest. "However, there were a number of
bright spots for Nvest. We announced our partnership with CDC Asset Management,
which will help make us a truly global investment firm. The combined firm will
be one of the 20 largest asset managers in the world with more than $300 billion
in assets under management. During the quarter, outflows in our value equity
mutual funds subsided, particularly at The Oakmark Family of Funds, due to good
performance at its flagship, select and international funds. Loomis Sayles'
fixed income products continued to perform well and attract new assets. Its
growth equity products also delivered strong, competitive performance,
particularly at the flagship Loomis Sayles Aggressive Growth Fund, which, as of
July 19, was up approximately 30 percent this year."
- 3 -
As part of the agreement with CDC Asset Management, Nvest Companies
agreed to pay out 80 percent of its operating cash flow in distributions to
unitholders until the completion of the transaction. During the first two
quarters of the year, Nvest Companies paid distributions that represented 80
percent of its operating cash flow. In addition, Nvest Companies' revenue run
rate on June 30, 2000 for purposes of the agreement with CDC Asset Management is
approximately the same as the base revenue run rate specified in the agreement.
Nvest Companies' portion of the costs related to the transaction, which will be
reflected between July 1, 2000 and the closing date of the transaction, is
expected to be between $3 million and $5 million.
Through its partnership with Nvest Companies, L.P., Nvest has 18
affiliates and divisions with $130 billion in assets under management, as of
June 30, 2000. These affiliates and divisions offer a wide array of investment
styles and products to institutional and individual clients. They are: AEW
Capital Management; Back Bay Advisors; Capital Growth Management; Harris
Associates; Jurika & Voyles; Kobrick Funds; Loomis, Sayles & Co.; Nvest Advisor
Services; Nvest Associates; Nvest Funds; Nvest Managed Account Services; Nvest
Retirement Services; Nvest Services Company; Reich & Tang Capital Management;
Reich & Tang Funds; Snyder Capital Management; Vaughan, Nelson, Scarborough &
McCullough; and Westpeak Investment Advisors. On June 16, 2000, Nvest, L.P. and
its operating partnership, Nvest Companies, L.P., announced a definitive
agreement to be acquired by CDC Asset Management, the investment management arm
of France's Caisse des Depots Group.
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This communication contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. In particular, statements regarding the merger of Nvest, L.P. and Nvest
Companies, L.P. with CDC Asset Management are based on management's current
expectations or beliefs and are subject to a number of factors and uncertainties
that could cause actual results to differ materially from those described in the
forward-looking statements. The following factors, among others, could cause
actual results to differ materially from those described in the forward-looking
statements: the inability to obtain, or meet conditions imposed for,
governmental, client and other third party consents and approvals required in
connection with the merger; or the failure of Nvest, L.P. and Nvest Companies,
L.P. unitholders to approve the merger.
Nvest, L.P. will be filing a proxy statement with the Securities and
Exchange Commission (SEC) as soon as practicable. The proxy statement will be
sent to unitholders of Nvest, L.P. seeking their approval of the proposed merger
transaction. Unitholders of Nvest, L.P. are urged to read the proxy statement to
be filed with the SEC because it will contain important information. When filed,
the proxy statement and other information filed by Nvest, L.P. can be obtained
free of charge at the Internet World Wide Web site maintained by the SEC at
http://www.sec.gov. In addition, documents filed with the SEC by Nvest, L.P.
will be available free of charge from the Corporate Secretary of Nvest, L.P. at
399 Boylston Street, Boston, Massachusetts 02116, telephone (617) 578-3500.
Nvest, L.P., the directors of its general partner, Nvest Corporation,
their executive officers and certain other members of Nvest, L.P. management and
employees, and Metropolitan Life Insurance Company, may be soliciting proxies
from Nvest, L.P. unitholders in favor of the merger. Information concerning
Nvest, L.P.'s participants in the solicitation is set forth in its Annual Report
on Form 10-K for the year ended December 31, 1999, filed with the SEC on March
28, 2000.
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NVEST, L.P.
2000 Second Quarter Results
(in thousands, except per unit data, unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
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2000 1999 2000 1999
----------------- ----------------- ----------------- -----------------
INCOME STATEMENT DATA
REVENUES $ 3,169 $ 3,756 $ 6,497 $ 7,762
================= ================= ================= =================
NET INCOME $ 2,312 $ 2,923 $ 4,836 $ 6,009
================= ================= ================= =================
WEIGHTED AVERAGE UNITS OUTSTANDING
BASIC 6,321 6,375 6,311 6,405
================= ================= ================= =================
DILUTED 6,764 6,401 6,534 6,443
================= ================= ================= =================
PER UNIT DATA
NET INCOME:
BASIC $ 0.37 $ 0.46 $ 0.77 $ 0.94
================= ================= ================= =================
DILUTED $ 0.36 $ 0.46 $ 0.76 $ 0.94
================= ================= ================= =================
DISTRIBUTIONS DECLARED:
REGULAR $ 0.46 $ 0.63 $ 0.92 $ 1.26
SPECIAL - - - -
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TOTAL $ 0.46 $ 0.63 $ 0.92 $ 1.26
================= ================= ================= =================
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NVEST COMPANIES, L.P.
2000 Second Quarter Results
(in thousands, except per unit data, unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
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2000 1999 2000 1999
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Revenues
Management and advisory fees $ 140,507 $ 145,282 $ 281,967 $ 293,595
Other revenues and interest income 18,343 14,475 36,306 28,866
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158,850 159,757 318,273 322,461
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EXPENSES
Compensation and benefits 76,540 78,333 155,016 161,167
Restricted unit plan compensation 234 879 428 1,812
Amortization of intangibles 10,689 10,129 21,344 20,239
Depreciation and amortization 3,098 2,327 5,906 4,635
Occupancy, equipment and systems 10,021 8,648 19,252 17,025
Interest expense 5,982 5,389 11,592 10,695
Other 29,479 27,463 57,829 52,432
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136,043 133,168 271,367 268,005
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Income before income taxes 22,807 26,589 46,906 54,456
Income tax expense 800 1,263 1,662 2,552
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NET INCOME $ 22,007 $ 25,326 $ 45,244 $ 51,904
================= ================ ================ ===============
OPERATING CASH FLOW (1) $ 32,930 $ 36,334 $ 67,016 $ 73,955
================= ================ ================ ===============
OPERATING CASH FLOW PER UNIT - DILUTED (1) $ 0.73 $ 0.82 $ 1.50 $ 1.66
================= ================ ================ ===============
DISTRIBUTIONS DECLARED PER UNIT
REGULAR $ 0.60 $ 0.77 $ 1.20 $ 1.54
SPECIAL - - - -
----------------- ---------------- ---------------- ---------------
TOTAL $ 0.60 $ 0.77 $ 1.20 $ 1.54
WEIGHTED AVERAGE UNITS OUTSTANDING - DILUTED 44,977 44,576 44,765 44,622
================= ================ ================ ===============
ASSETS UNDER MANAGEMENT (BILLIONS) $ 130 $ 136 $ 130 $ 136
================= ================ ================ ===============
(1) - Operating cash flow, as defined by Nvest, is equal to net income plus
non-cash charges for amortization of intangibles and restricted unit plan
compensation. Operating cash flow per unit should not be construed as an
alternative to net income per unit of Nvest, L.P. or as an alternative to cash
flow from operating activities. Operating cash flow, as calculated above, may
not be consistent with comparable computations by other companies.
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NVEST COMPANIES, L.P.
2000 SECOND QUARTER RESULTS
(unaudited)
ASSETS UNDER MANAGEMENT JUNE 30, 2000 JUNE 30, 1999
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CLIENT TYPE (IN BILLIONS):
Institutional $ 85 $ 89
Mutual Funds 35 36
Private Accounts 10 11
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Total $ 130 $ 136
==================== ===================
ASSET CLASS (IN BILLIONS):
Equity $ 51 $ 61
Fixed Income 61 59
Money Market 12 10
Real Estate 6 6
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Total $ 130 $ 136
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BALANCE SHEET DATA (IN THOUSANDS) JUNE 30, 2000 DECEMBER 31, 1999
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ASSETS
Current assets $ 147,603 $ 150,953
Intangible assets 588,416 598,096
Other assets 134,847 106,924
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Total Assets $ 870,866 $ 855,973
==================== ===================
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Payables and accrued expenses $ 105,142 $ 124,129
Distribution payable 26,742 34,230
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Total Current Liabilities 131,884 158,359
Notes payable 310,000 270,000
Other long-term liabilities 22,577 17,945
Partners' capital 406,405 409,669
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Total Liabilities and Partners' Capital $ 870,866 $ 855,973
==================== ===================
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