SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
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EACM SELECT MANAGERS EQUITY FUND
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(Name of Registrant as Specified in its Charter)
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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4) Date Filed:
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EACM SELECT MANAGERS EQUITY FUND
200 CONNECTICUT AVENUE, SIXTH FLOOR
NORWALK, CONNECTICUT 06854-1958
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CONSENT STATEMENT
This Consent Statement contains the information you should know before
acting on the proposal summarized below.
INTRODUCTION
This Consent Statement is being used by the Board of Trustees (the
"Board") of EACM Select Managers Equity Fund (the "Fund") to solicit consents
for approval of the proposal set forth herein to liquidate and terminate the
Fund (the "Termination"). The Fund is an open-end diversified management
investment company whose objective is long-term capital appreciation. The Fund
invests primarily in common stocks, and its assets are managed by multiple
subadvisors.
This Consent Statement and the enclosed Consent Form are being mailed
to shareholders on or about September 21, 2004. The Fund will furnish, without
charge, a copy of its most recent annual report and more recent semi-annual
report, if any, to a shareholder upon request. Shareholders may request a copy
of these reports by writing to the Fund at the address set forth above,
attention: Amy Cuccio, or by calling 203-854-7024 (call collect). The annual
report for the Fund for its most recently completed fiscal year was previously
mailed to shareholders.
WHO IS ELIGIBLE TO VOTE
Shareholders of record of the Fund as of the close of business on
September 20, 2004 (the "Record Date") are entitled to act on the proposal
presented herein. Each share is entitled to one vote. A fractional share is
entitled to the corresponding fraction of one vote. Consents may be withdrawn at
any time prior to the date on which consents of shareholders representing
two-thirds of the outstanding shares of the Fund become effective by delivering
written notice to the Fund. Upon the receipt of consents from shareholders
representing two-thirds of the outstanding shares, the proposal will be deemed
adopted. All shares held by a shareholder will be voted as specified by his or
her Consent Form. If you sign a Consent Form, but do not fill in a vote, you
will be deemed to have consented to the proposal to liquidate and terminate the
Fund. If you do not return your Consent Form or you return a form marked
"abstain", you will have effectively not consented to the proposal.
Brokerage firms holding shares in "street name" have the authority to
act with respect to customers' shares on certain "routine" matters; however,
approval of the Termination is not considered to be a "routine" matter.
Therefore, if your shares are held of record by your
brokerage firm, your broker does not have the authority to consent or withhold
consent to the proposal without your instruction. If you fail to provide the
broker with instructions on how to act, the broker will be required to submit a
consent form without specifying how you wish to act with respect to this matter,
which will result in a "broker non-vote." Broker non-votes will have the effect
of a vote against the proposal.
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PROPOSAL 1
APPROVAL OF THE TERMINATION
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At a meeting held on August 31, 2004, the Board, upon the
recommendation of Evaluation Associates Capital Markets, Incorporated, the
Funds' investment adviser (the "Manager"), determined that it would be in the
best interests of the Fund and its shareholders if the Fund were liquidated and
terminated in accordance with the Fund's organizational documents and
Massachusetts law. Accordingly, the Board approved the liquidation and
termination of the Fund, subject to shareholder approval. Termination of the
Fund would include liquidation of the Fund's assets and distribution to Fund
shareholders of all of the proceeds of the liquidation. If the proposal is
approved by shareholders of the Fund, the net proceeds (after deduction for
amounts estimated to be necessary to satisfy the debts and liabilities of the
Fund) will be paid pro rata to those shareholders who remain invested in the
Fund as of the Termination Date (as defined below), in cash, as promptly as
possible after the Termination Date.
Shareholder approval of the Fund's termination is required before the
Fund can be terminated. For the reasons set fort below, the Board has
unanimously recommended that shareholders vote to approve this Proposal 1
calling for the liquidation and termination of the Fund.
REASONS FOR THE TERMINATION.
On June 10, 2004, the Manager, EACM Partners, L.P., the parent entity
of the Manager (the "Parent"), and Evaluation Associates Capital Markets, LLC
(collectively, the "Sellers") entered into a Purchase Agreement with EACM
Advisors, LLC (the "Buyer"), an indirect wholly-owned subsidiary of the Mellon
Financial Corporation, which provided for the sale to the Buyer of substantially
all of the assets of the Sellers relating to the fund of funds investment
management business of the Sellers (the "Mellon Transaction"). The Mellon
Transaction closed effective July 31, 2004. The Board originally intended to ask
the shareholders of the Fund at a shareholders' meeting to be held on December
17, 2004 to hire the Buyer as the advisor to the Fund. However, on August 27,
2004, the Buyer notified the Board in writing that it was no longer in a
position to enter into a management agreement with the Fund.
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Following the notification from the Buyer on August 27, 2004, the
Manager also informed the Fund that it would terminate its Management Agreement
with the Fund as of October 29, 2004, the end of the 60-day notice period
required for termination of the Management Agreement by the Manager. The Manager
informed the Fund that in light of its changed circumstances resulting from the
Mellon Transaction, continuing service as advisor to the Fund would no longer be
economically feasible for the Manager. The Trustees considered the following
factors among others. The Manager was instrumental in forming the Fund in 1995
and the Trustees believed most of the shareholders invested in the Fund because
of the multi-manager investment strategies that the Manager had developed and
pursued. The Trustees also believed that it was likely that once the Manager's
decision to resign was announced, many of the current shareholders would redeem
their shares and operating the Fund economically with significantly reduced
assets would be difficult. The Trustees noted that the Fund has had less than
$50 million in assets for over a year, that the Manager heavily subsidized the
expenses of the Fund in order to maintain an expense ratio of 1.25 percent of
the Fund's average daily net assets and that for the last fiscal year of the
Fund the Manager netted approximately $4,000 in fees from the Fund not
considering its overhead or the salaries of its employees serving the Fund.
Thus, the Trustees concluded that it would be more practical for the Fund to be
liquidated rather than for them to attempt to find another advisor prior to
October 29, 2004.
Following receipt of the notices from the Buyer and the Manager, on
August 31, 2004, the Board, after due consideration of the relevant information,
with a majority of the trustees who are not "interested persons" as defined in
the Investment Company Act of 1940, as amended, also voting separately,
determined to terminate the Fund as provided in the Fund's Declaration of Trust,
as amended, by signing an appropriate instrument in writing and soliciting the
consent thereto by the holders of not less than two-thirds of the shares of the
Fund. The Board then directed the officers of the Fund to prepare and mail this
Consent Statement.
MECHANICS OF THE TERMINATION.
1. APPROVAL DATE. Approval of the Termination will become effective on
the date that the holders of two-thirds of the outstanding shares of the Fund
have consented to the Termination (the "Approval Date"), provided, however, that
the Fund will not use such consents to effect corporate action prior to October
4, 2004.
Following this approval, on a date ("Termination Date") chosen by
officers of the Fund, which shall be on or after October 4, 2004, the Fund (i)
will mail a notice to all Shareholders of the approval and the Termination Date,
(ii) will cease to invest in accordance with its investment objective and will
sell the portfolio securities it owns in order to convert the Fund's assets to
cash or cash equivalents; (iii) will not engage in any business activities
except for the purposes of winding up its business and affairs, preserving the
value of its assets and distributing its assets to shareholders after the
payment to (or reservation of assets for payment to) all creditors of the Fund;
and (iv) will terminate in accordance with the laws of the Commonwealth of
Massachusetts and the Declaration of Trust of the Fund.
2. LIQUIDATING DISTRIBUTION. As soon as practical following the
liquidation of the Fund's assets, the Fund will mail the following to each
shareholder who remains a shareholder of record on the Termination Date: (i) a
liquidation distribution in cash equal to the
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shareholder's proportionate interest in the net assets of the Fund (after giving
effect to amounts considered necessary to satisfy the Fund's liabilities); and
(ii) information concerning the sources of the liquidating distribution. The
Fund anticipates that it will be in a position to mail the liquidation
distribution to the shareholders within approximately five business days
following the Approval Date.
3. EXPENSES. The Manager will bear all expenses incurred by the Fund,
exclusive of brokerage commissions, in carrying out the Termination, including
but not limited to, all printing, legal, accounting, custodian and transfer
agency fees, and the expenses of any reports to or meeting of shareholders. The
total liabilities of the Fund prior to the liquidating distribution, other than
the Termination expenses referred to above, include amounts accrued, or
anticipated to be accrued, for custodial and transfer agency services, legal,
audit and Trustees fees. Any expenses and liabilities attributed to the Fund
subsequent to the mailing of the liquidating distribution and for which a
reserve has not been established will also be borne by the Manager.
4. IMPLEMENTATION OF TERMINATION. After the date of mailing of the
liquidating distribution, the termination of the Fund will be effected. The
Trustees shall have the authority to authorize such variations from these
procedures as may be necessary or appropriate to marshal the assets of the Fund
and to effect the complete liquidation and termination of the existence of the
Fund.
5. CESSATION OF RIGHTS OF SHAREHOLDERS. Shares of the Fund
automatically liquidated on the Termination Date will no longer be deemed
outstanding as of such time and all rights with respect to those shares will
cease at such time, except the right to receive the liquidation distribution.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES.
Each shareholder who receives a liquidating distribution will recognize
gain (or loss) for federal income tax purposes equal to the amount by which the
cash distributed exceeds (or is less than) the shareholder's tax basis in the
Fund shares. Assuming that the shareholder holds such shares as capital assets,
such gain or loss generally will be treated as long-term capital gain or loss if
the shares were held for more than one year and otherwise generally will be
treated as short-term capital gain or loss.
Notwithstanding the foregoing, any loss realized by a shareholder in
respect of Fund shares with a tax holding period of six months or less will be
treated as long-term capital loss to the extent of any capital gain dividends
with respect to such shares. The federal income tax treatment that a Fund
shareholder would receive if such shareholder's entire interest in the Fund were
redeemed prior to the liquidation generally would be identical to the federal
income tax treatment described above to a shareholder in liquidation of the
shareholder's interest in the Fund.
The tax consequences discussed herein may affect shareholders
differently depending upon their particular tax situations unrelated to the
liquidating distribution, and accordingly, this summary is not a substitute for
careful tax planning on an individual basis. SHAREHOLDERS MAY WISH TO CONSULT
THEIR PERSONAL TAX ADVISERS CONCERNING THEIR
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PARTICULAR TAX SITUATIONS AND THE IMPACT THEREON OF RECEIVING THE LIQUIDATING
DISTRIBUTION AS DISCUSSED HEREIN, INCLUDING ANY STATE, LOCAL AND FOREIGN TAX
CONSEQUENCES.
The Fund anticipates that it will retain its qualification as a
regulated investment company under the Internal Revenue Code, as amended, during
the liquidation period and, therefore, will not be taxed on any of its net
income from the sale of its assets.
If the holders of two-thirds of the shares of the Fund do not approve
the termination of the Fund, the Fund will continue to exist as a registered
investment company in accordance with its stated objective and policies. In such
a case, the Board would consider what, if any, steps to take concerning the Fund
and its shareholders.
Shareholders are free to redeem their shares prior to the date on which
shareholders approve the liquidation and termination of the Fund.
REQUIRED VOTE.
Approval of the Proposal will require the consent of holders of
two-thirds of the outstanding voting shares of the Fund on the Approval Date.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES OF THE FUND
UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUND VOTE IN
FAVOR OF PROPOSAL 1.
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INFORMATION CONCERNING THE SHAREHOLDERS
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OUTSTANDING SHARES
As of September 20, 2004 (the "Record Date"), there were 4,512,116.931
common shares of beneficial interest of the Fund outstanding. Only shareholders
of record as of the Record Date are entitled to act on the proposal.
OWNERSHIP OF SHARES OF THE FUND
As of September 20, 2004, the following persons or entities owned
beneficially or of record more than 5% of the outstanding shares of the Fund:
Name and Address of Shareholder Share Ownership as
Percentage of Outstanding Shares
RADFORD UNIVERSITY FOUNDATION, INC. 19.57%
7512 Lee Highway
Radford, VA 24142
ING RELIASTAR 16.15%
151 Farmington Avenue
Hartford, CT 06156-0001
MARY D. WALSH TRUST 14.24%
3392 Barrow Island Road
Jonathan's Island
Juniper, FL 33477-1379
SANDY HILL FOUNDATION 13.10%
330 South Street
Morristown, NJ 07962-1975
CARMEN M. NEVARES 9.54%
Green Valley K-3
Garden Hills, Guaynado, PR 00966
AMERICAN EXPRESS TRUST CO. 9.18%
996 AXP Financial Center
Minneapolis, MN 55474-0009
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CHARLES SCHWAB & CO., INC. 7.44%
100 Montgomery Street
San Francisco, CA 94118
As of September 20, 2004, none of the Trustees and executive officers
of the Trust owned beneficially or of record, as a group, more than 1% of the
outstanding shares of the Fund.
INFORMATION ABOUT THE FUNDS' SERVICE PROVIDERS
The Manager serves as the Fund's investment adviser. The Manager
selects, supervises, and allocates assets among the Fund's subadvisers. The Fund
currently has five subadvisers: Chartwell Investment Partners, Iridian Asset
Management LLC, Goldman Sachs Asset Management, L.P., Mastrapasqua Asset
Management, Inc. and Siphron Capital Management. EACM Securities Inc. serves as
the Fund's principal underwriter. Each of the Manager and EACM Securities Inc.
are located at 200 Connecticut Avenue, Sixth Floor, Norwalk, Connecticut
06854-1958. Van Eck Associates Corporation, 99 Park Avenue, New York, New York
10016 serves as the Fund's administrator.
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual meetings of shareholders and
does not currently intend to hold an annual meeting of shareholders in 2004
whether or not the Fund is liquidated. Shareholder proposals to be presented at
any next meeting of shareholders of a Fund, whenever held, must be received at
the Funds' principal executive offices, 200 Connecticut Avenue, Sixth Floor,
Norwalk, Connecticut 06854-1958, a reasonable time prior to any such Trustees'
solicitation of proxies for any such meeting. The submission by a shareholder of
a proposal for inclusion in a proxy statement does not guarantee that it will be
included. Shareholder proposals are subject to certain regulations under the
federal securities laws.
METHOD OF SOLICITATION AND EXPENSES
The cost of preparing, assembling and mailing this Consent Statement
and the accompanying Consent Form, as well as the costs associated with the
consent solicitation, will be borne by the Manager. In addition to soliciting
consents by mail, the Manager may have one or more of its officers, the Fund's
officers, representatives or compensated third-party agents, aid in the
solicitation of consents by personal interview or telephone and facsimile and
may request brokerage houses and other custodians, nominees and fiduciaries to
forward consent soliciting material to the beneficial owners of the shares held
of record by such persons.
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Persons holding shares as nominees will be reimbursed by the Manager,
upon request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
September 21, 2004
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EACM SELECT MANAGERS EQUITY FUND
CONSENT FORM
This Consent Form is being solicited by the Board of Trustees of EACM
Select Managers Equity Fund, a Massachusetts business trust (the "Fund").
The Board of Trustees requests that the Fund's shareholders take the
action indicated below with respect to the proposal set forth below. The
undersigned acknowledges that s/he has received the Consent Statement dated
September 21, 2004 accompanying this Consent Form, which describes in further
detail the proposal and the action to be taken. Please mark one of the choices
to take action with respect to such proposal.
1. To approve the liquidation and termination of EACM Select Mangers Equity
Fund.
CONSENT: WITHHOLD CONSENT: ABSTAIN:
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THE ACTION TAKEN PURSUANT TO THIS CONSENT FORM WILL APPLY TO ALL SHARES HELD BY
YOU. IF YOU DO NOT RETURN YOUR CONSENT FORM, YOU WILL BE DEEMED TO HAVE NOT
CONSENTED TO THE PROPOSAL. IF THE CONSENT FORM IS COMPLETED AND RETURNED, BUT
THE LINES ABOVE ARE NOT MARKED, YOU WILL BE DEEMED TO HAVE CONSENTED TO THE
PROPOSAL.
TO APPROVE THE PROPOSAL, PLEASE SIGN, DATE AND MAIL THIS CONSENT FORM TO THE
ADDRESS SET FORTH BELOW.
Please return this Consent Form by October 4, 2004 in the postage paid
addressed envelope included with this mailing. If for any reason you do not have
an envelope, kindly send this Consent Form to the Fund at c/o Evaluation
Associates Capital Markets, Incorporated, Attention: Amy Cuccio, 200 Connecticut
Avenue, Sixth Floor, Norwalk, Connecticut 06845-1958 or by facsimile at
203-854-7002. If you have any questions please contact Amy Cuccio at
203-854-7078 (call collect).
Signature instructions: For joint accounts, all joint owners should
sign. When signing as executor, administrator, trustee, guardian, etc., please
give full title as such. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
partnership's name by authorized person.
Signature (Title, if any)
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Signature (if jointly held)
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Print name of Shareholder
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Date
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(Very Important - - Please write date of signature)
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