[Federal Register Volume 63, Number 143 (Monday, July 27, 1998)]
[Notices]
[Pages 40143-40145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-19983]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-23323; 812-11172]


Weiss, Peck & Greer Funds Trust, et al.; Notice of Application

July 21, 1998.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of application for exemption under Section 6(c) of the 
Investment Company Act of 1940 (the ``Act'') from Section 15(a) of the 
Act.

-----------------------------------------------------------------------

SUMMARY OF APPLICATION: The requested order would permit the 
implementation, without prior shareholder approval, of new investment 
advisory and subadvisory agreements (the ``New Advisory Agreements'') 
for a period of up to 90 days following the consummation of the 
acquisition of the outstanding membership interests of Weiss, Peck & 
Greer, L.L.C. (``WPG'') by Robeco Groep N.V. (``Robeco'') (but in no 
event later than October 31, 1998) (the ``Interim Period''). The order 
would also permit payment of all fees earned under the new advisory 
agreements during the Interim Period following shareholder approval.

APPLICANTS: Weiss, Peck & Greer Funds Trust, on behalf of WPG 
Government Money Market Fund, WPG Tax Free Money Market Fund, WPG Core 
Bond Fund, WPG Intermediate Municipal Bond Fund, and WPG Quantitative 
Equity Fund; Tomorrow Funds Retirement Trust, on behalf of Tomorrow 
Long-term Retirement Fund, Tomorrow Medium-Term Retirement Fund, and 
Tomorrow Short-Term Retirement Fund; SEI Tax Exempt Trust, on behalf of 
SEI Institutional Tax Free Portfolio, SEI Pennsylvania Tax Free 
Portfolio, SEI California Tax Free Portfolio, and SEI Tax Free 
Portfolio; Weiss, Peck & Greer International Fund (``International 
Fund''); WPG Growth and Income Fund; WPG Growth Fund, WPG Tudor Fund; 
and RWB/WPG U.S. Large Stock Fund (collectively, the ``Funds''); and 
WPG.

FILING DATES: The application was filed on June 15, 1998, and amended 
on July 17, 1998.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicants with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on August 18, 1998, 
and should be accompanied by proof of service on applicants in the form 
of an affidavit or, for lawyers, a certificate of service. Hearing 
requests should state the nature of the writer's interest, the reason 
for the request, and the issues contested. Persons who wish to be 
notified of a hearing may request notification by writing to the SEC's 
Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 
20549. Applicants: if to Weiss, Peck & Greer Funds Trust; Tomorrow 
Funds Retirement Trust; Weiss, Peck & Greer International Fund; WPG 
Growth and Income Fund; WPG Growth Fund; WPG Tudor Fund; RWB/WPG U.S. 
Large Stock Fund; or WPG, One New York Plaza, New York, NY 10004; if to 
SEI Tax Exempt Trust, One Freedom Valley Drive, Oaks, PA 19456.

FOR FURTHER INFORMATION CONTACT:
Timothy R. Kane, Staff Attorney, at (202) 942-0615, or Edward P. 
Macdonald, Branch Chief, at (202) 942-0564 (Division of Investment 
Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
SEC's Public Reference Branch, 450 Fifth Street, N.W., Washington, D.C. 
25049 (tel. 202-942-8090).

Applicants' Representations

    1. Each Fund is either an open-end management investment company 
registered under the Act or a series of the company. Weiss, Peck and 
Greer Funds Trust currently offers five series: WPG Government Money 
Market Fund, WPG Tax Free Money Market Fund, WPG Intermediate Municipal 
Bond Fund, WPG Core Bond Fund, and WPG Quantitative Equity Fund. 
Tomorrow Funds Retirement Trust includes, for purposes of this 
application, three Series: Tomorrow Long-term Retirement Fund, Tomorrow 
Medium-Term Retirement Fund, and Tomorrow Short-term Retirement Fund. 
SEI Tax Exempt Trust includes, for purposes of this application, four 
series: SEI Institutional Tax Free Portfolio, SEI Pennsylvania Tax Free 
Portfolio, SEI California Tax Free Portfolio, and SEI Tax Free 
Portfolio. Each of the other Funds is a single series investment 
company. Tomorrow Funds Retirement Trust and RWB/WPG U.S. Large Stock 
Fund are organized as Delaware business trusts. All the other Funds are 
organized as Massachusetts business trusts.
    2. WPG serves as the investment adviser to each Fund pursuant to a 
separate investment advisory agreement and is an investment adviser 
registered under the Investment Advisers Act of 1940 (``Advisers 
Act''). Hill Samuel Asset Management Limited (``Hill Samuel'') serves 
as the investment subadviser to the International Fund pursuant to an 
investment subadvisory agreement (together with the investment advisory 
agreements, the ``Current Advisory Agreements'') and is an investment 
adviser registered under the Advisers Act.
    3. The owners of the outstanding voting securities of WPG 
(``Sellers'')

[[Page 40144]]

have agreed to sell to Robeco all of their interests in WPG (the 
``Acquisition''). After the Acquisition, WPG will be a wholly-owned 
subsidiary of Robeco. The Acquisition is expected to close during the 
third quarter of 1998.
    4. The Acquisition will result in the assignment and automatic 
termination of the Current Advisory Agreements. The Board of Trustees 
(``Board''), including a majority of the Independent Trustees 
(``Independent Trustees''), of SEI Tax Exempt Trust met on May 18 and 
June 10, 1998, and approved the New Advisory Agreements between WPG and 
each of the SEI Funds.\1\ The Boards, including a majority of the 
Independent Trustees, of the WPG Funds met on May 19, 1998, and 
approved he New Advisory Agreements between WPG and each of the WPG 
Funds and among Hill Samuel, WPG, and the International Fund. Each New 
Advisory Agreement contains the same terms and conditions as its 
corresponding Current Advisory Agreement except for the dates of 
execution, effectiveness, and termination and the inclusion of escrow 
arrangements, discussed below.\2\
---------------------------------------------------------------------------

    \1\ In this notice, the SEI Tax Exempt Trust is occassionally 
referred to as the ``SEI Funds,'' and all other Funds are 
occassionally referred to as the ``WPG Funds.''
    \2\ The New Advisory Agreements approved by the Boards of the 
WPG Funds do not include the escrow arrangements. The Boards of the 
WPG Funds will meet on July 22, 1998, to consider including the 
escrow arrangements. Applicants acknowledge that, with respect to 
each WPG Fund's New Advisory Agreement, they may not rely on the 
requested order unless the respective Boards, including a majority 
of the Independent Trustees, approve including the escrow provisions 
in the New Advisory Agreements prior to the consummation of the 
Acquisition.
---------------------------------------------------------------------------

    5. Applicants propose to enter into an escrow arrangement with an 
unaffiliated escrow agent. Fees earned by WPG during the Interim Period 
under the New Advisory Agreements would be paid into an interest-
bearing escrow account. The escrow agent would release the monies in 
the escrow account attributable to a Fund (a) to WPG only upon 
shareholder approval of the New Advisory Agreement by the Fund's 
shareholders, or (b) to the Fund if the Interim Period has ended and 
the New Advisory Agreement is not approved by shareholders. Before the 
escrow agent releases the monies, the Board of the appropriate Fund 
would be notified.

Applicant's Legal Analysis

    1. Section 15(a) of the Act makes it unlawful for any person to 
serve or act as investment adviser of a registered investment company, 
except pursuant to a written contract that has been approved by the 
vote of a majority of the outstanding voting securities of such 
registered company, and that such written contract provide for 
automatic termination in the event of its ``assignment.'' Section 
2(a)(4) of the Act defines ``assignment'' to include any direct or 
indirect transfer of a controlling block of the assignor's outstanding 
voting securities by a security holder of the assignor.
    2. Applicants state that upon consummation of the Acquisition, 
Robeco will acquire all of WPG's outstanding voting securities, 
resulting in the ``assignment'' and termination of each Current 
Advisory Agreement.
    3. Rule 15a-4 under the Act provides, among other things, that if 
an investment advisory contract with an investment company is 
terminated by assignment, an investment adviser may act as such for the 
company pursuant to a written contract that has not been approved by 
that company's shareholders during the 120-day period following such 
termination, provided that (1) The new contract is approved by that 
company's board of directors, including a majority of the non-
interested directors; (2) the compensation to be paid under the new 
contract does not exceed the compensation that would have been paid 
under the contract most recently approved by the company's 
shareholders; and (3) neither the adviser nor any controlling person of 
the adviser ``directly or indirectly receive[s] money or other 
benefit'' in connection with the assignment. However, applicants state 
that they cannot rely on Rule 15a-4 because the Sellers will be 
receiving a benefit from the Acquisition.
    4. Section 6(c) of the Act provides that the SEC may exempt any 
person, security, or transaction, from any provision of the Act if and 
to the extent that such exemption is necessary or appropriate in the 
public interest and consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the Act. 
Applicants request an order under Section 6(c) of the Act to permit the 
implementation, without prior shareholder approval, of the New Advisory 
Agreements.
    5. Applicants state that the form and timing of the Acquisition 
were determined in response to a number of business factors primarily 
unrelated to the Funds. Applicants assert that there is insufficient 
time to obtain shareholder approval of the New Advisory Agreements 
before the Acquisition is consummated. Applicants further assert that 
the requested relief would prevent any disruption in the delivery of 
investment advisory services to the Funds during the Interim Period.
    6. Applicants state that the Boards, including a majority of the 
Independent Trustees, after evaluation and with the advice of counsel, 
voted to approve the New Advisory Agreements to become effective upon 
the termination of the Current Advisory Agreements and to submit the 
New Advisory Agreements to the shareholders of each of the Funds for 
approval. The Boards received from WPG information reasonably necessary 
to evaluate, among other things, the terms of the New Advisory 
Agreements and determined that the New Advisory Agreements were in the 
best interests of the Funds and their respective shareholders.
    7. Fees earned by WPG during the Interim Period would be paid into 
an interest-bearing account maintained by an independent escrow agent 
who would release the monies either to WPG upon shareholder approval of 
the New Advisory Agreement, or to the Fund if the Interim Period has 
ended and the shareholders have not approved the New Advisory 
Agreement.
    8. Applicants state that the requisite shareholder meetings are 
scheduled to be held on July 29, 1998, for all Funds. Applicants 
further state that the requested relief would facilitate the orderly 
and reasonable consideration of the New Advisory Agreements with 
respect to those Funds for which a quorum of shareholders has not been 
obtained.
    9. Applicants submit that the scope and quality of services 
provided to the Funds during the Interim Period will not be diminished. 
The applicants represent that, during the Interim Period, each Fund 
will receive advisory services of at least equivalent scope and 
quality, and such services will be provided by the same personnel 
(including managing directors and portfolio managers) under the New 
Advisory Agreements as it received under the Current Advisory 
Agreements. Further, the New Advisory Agreements have the same terms 
and conditions as the Current Advisory Agreements, except for the dates 
of execution, effectiveness, and termination and the inclusion of 
escrow arrangements.

Applicant's Conditions

    Applicants agree that any order of the SEC granting the requested 
relief will be subject to the following conditions:
    1. The New Advisory Agreements will have the same terms and 
conditions as the Current Advisory Agreements, except in each case for 
the dates of

[[Page 40145]]

execution, effectiveness, and termination and the inclusion of escrow 
arrangements.
    2. Fees earned by WPG during the Interim Period under the New 
Advisory Agreements will be maintained in interest-bearing escrow 
accounts with an unaffiliated escrow agent, and the amounts in such 
accounts (including interest earned on such amounts) will be paid (a) 
to WPG only upon approval of the New Advisory Agreements by the Funds' 
respective shareholders or (b) in the absence of such approval by 
shareholders of a Fund, to such Fund.
    3. The Funds will hold special meetings of shareholders to vote on 
the approval or disapproval of the New Advisory Agreements on or before 
October 31, 1998.
    4. WPG will bear the costs relating to the preparation and filing 
of this application and the costs relating to the solicitation of the 
approvals of the Funds' shareholders of the New Advisory Agreements 
necessitated by the Acquisition; provided, however, that the Funds may 
bear a portion of the cost of soliciting shareholders approval for 
proposals unrelated to the Acquisition.
    5. WPG will take all appropriate actions to ensure that the scope 
and quality of advisory and other services provided to the Funds during 
the Interim Period under the New Advisory Agreements will be at least 
equivalent, in the judgment of the Boards, including a majority of the 
Independent Trustees, to the scope and quality of services provided 
under the Current Advisory Agreements. In the event of any material 
change in personnel providing services pursuant to the New Advisory 
Agreements during the Interim Period, WPG will apprise and consult the 
Boards of the affected Funds to assure that such Board, including a 
majority of the Independent Trustees, are satisfied that the services 
provided by WPG will not be diminished in scope or quality.

    For the Commission, by the Division of Investment Management, 
under delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-19983 Filed 7-24-98; 8:45 am]
BILLING CODE 8010-01-M