OFFER TO PURCHASE FOR CASH
BY
A T FUND OF FUNDS (THE "FUND"),
THE SOLE SERIES OF A T FUNDS INVESTMENT TRUST
(THE "TRUST")
UP TO $2,000,000 OF ITS ISSUED AND OUTSTANDING COMMON
SHARES (THE "SHARES")
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON
OCTOBER 23, 2006, UNLESS THE OFFER IS EXTENDED.
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THIS OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL
(WHICH, TOGETHER WITH ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
COLLECTIVELY CONSTITUTE THE "OFFER") ARE NOT CONDITIONED ON ANY MINIMUM NUMBER
OF SHARES BEING TENDERED, BUT ARE SUBJECT TO OTHER CONDITIONS AS OUTLINED HEREIN
AND IN THE LETTER OF TRANSMITTAL.
SHARES ARE NOT TRADED ON ANY ESTABLISHED TRADING MARKET AND ARE SUBJECT
TO STRICT RESTRICTIONS ON TRANSFERABILITY PURSUANT TO THE TRUST'S AGREEMENT AND
DECLARATION OF TRUST, AS AMENDED FROM TIME TO TIME (THE "DECLARATION OF TRUST").
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
AND IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS INVESTMENT ADVISER OR SUBADVISER. THE FUND HAS BEEN ADVISED THAT NO TRUSTEE
OR EXECUTIVE OFFICER OF THE FUND OR THE TRUST INTENDS TO TENDER ANY SHARES
PURSUANT TO THE OFFER.
IMPORTANT
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Any holder of Shares (each a "Shareholder") desiring to tender any
portion of his, her or its Shares should complete and sign the Letter of
Transmittal in accordance with the instructions in the Letter of Transmittal,
and mail or deliver the Letter of Transmittal and any other required documents
to the Fund's subadministrator, Citigroup Fund Services, LLC (the
"Subadministrator").
Questions, requests for assistance and requests for additional copies
of this Offer to Purchase and the Letter of Transmittal may be directed to the
Subadministrator in the manner set forth on the last page of this Offer to
Purchase.
If you do not wish to tender your Shares, you need not take any action.
September 22, 2006
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SUMMARY TERM SHEET
This Summary Term Sheet highlights certain information concerning this
tender offer. To understand the Offer fully and for a more complete discussion
of the terms and conditions of the Offer, you should read carefully this entire
Offer to Purchase and the related Letter of Transmittal.
What Is The Tender Offer?..................The..Fund. is offering to purchase
up to $2,000,000 of its outstanding
Shares for cash at a price per share
equal to the proportionate net asset
value of the Shares (that is, the
purchase price of each Share will
be equal to the net asset value of
the Fund divided by the number of
outstanding Shares), as determined
in accordance with the Fund's net
asset valuation procedures as of
December 31, 2006, or if the Offer is
extended, on the date to which the
Offer is extended (the "Valuation
Date"), upon specified terms and
subject to conditions as set forth
in the tender offer documents.
When Will The Tender Offer Expire, And The tender offer will expire at
May The Offer Be Extended?.................5:00 p.m., Eastern time, on
October.23, 2006, unless extended
(the "Expiration Date"). The
Fund may extend the period of time
the Offer will be open by notifying
Fund Shareholders no later than the
next business day after the Offer
otherwise would have expired. See
Section 1 of this Offer to Purchase.
What Is The Net Asset Value Per Share As As of July 31, 2006, the net asset
Of A Recent Date?..........................value ("NAV") per Share was $107.24.
The value of your Shares will
change due to market fluctuation
between July 31, 2006 (the last date
as of which the NAV has been
calculated) and the Valuation Date,
which is the date as of which the NAV
will be determined for purposes of
calculating the purchase price of the
Shares.
During the pendency of the tender
offer, current per Share NAV can be
obtained from the Subadministrator by
calling toll free at (▇▇▇) ▇▇▇-▇▇▇▇
between 9:00 a.m. and 5:00 p.m.
Eastern time, Monday through Friday
(except holidays). See Section 7 of
this Offer to Purchase for additional
information regarding net asset
values.
May I Tender All Or Some of My
Shares?....................................You may tender all of your Shares,
some of your Shares defined as a
specific dollar value, or some of
your Shares defined as a specific
dollar value above the required
minimum investment balance.
If you tender for repurchase only a
portion of your Shares, you will be
required to maintain an investment in
Shares equal to at least $100,000. If
you tender less than all of your
Shares and the purchase of the full
amount tendered would cause your
remaining investment to be less than
the required minimum balance, the
Fund will reduce the portion of
Shares to be repurchased so that the
required minimum balance is
maintained.
How Do I Tender My If your Shares are registered in your
Shares?....................................name, you should obtain thetender
offer materials, including this Offer
to Purchase and the related Letter of
Transmittal, read them, and if you
decide to tender,complete a Letter of
Transmittal and submit any other
documents required by the Letter of
Transmittal. These materials
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must be received by the
Subadministrator in proper form
before 5:00 p.m., Eastern time, on
the October 23, 2006 Expiration Date
(unless the tender offer is extended
by the Fund, in which case the new
deadline will be as stated in the
notice to Shareholders of the
extension). See Section 3 of this
Offer to Purchase.
Is There Any Cost To Me To Tender?.........No fees or commission will be payable
to the Fund in connection
with the Offer. However, if any
Shares repurchased by the Fund
pursuant to the tender offer were
initially purchased by you on
or after January 1, 2006, the Fund
will levy a repurchase fee
equal to 2% of the purchase price.
May I Withdraw My Request to Tender Yes, you may withdraw your request
After I Have Tendered My Shares And, If to tender your Shares at any time
So, By When?...............................prior to 5:00 p.m., Eastern time,
on the October 23, 2006
Expiration Date (or if the Offer is
extended, at any time prior
to 5:00 p.m., Eastern time, on the
new Expiration Date). Withdrawn
Shares may be re-tendered by
following the tender procedures
before the offer expires (including
any extension period). See Section 4
of this Offer to Purchase.
How Do I Withdraw Tendered Shares?.........A notice of withdrawal of tendered
Shares must be timely received by
the Subadministrator by the
Expiration Date, which notice must
specify the name of the Shareholder
who tendered the Shares, the number
of Shares being withdrawn (which must
be all of the Shares tendered).
See Section 4 of this Offer to
Purchase.
May I Place Any Conditions On My Tender No.
Of Shares?.................................
Is There A Limit On The Number Of Shares Yes. You may tender all of your
I May Tender?..............................Shares or some of your Shares defined
as a specific dollar value above the
required minimuminvestment balance
subject to the conditions discussed
in Section 13 of this Offer to
Purchase. However, a maximum of
$2,000,000 of the total outstanding
Shares will be accepted for tender.
See Section 1 of this Offer to
Purchase.
What If More Than $2,000,000 of Shares The Fund will purchase duly tendered
Are Tendered (And Not Timely Withdrawn)?...Shares from tendering Shareholders
pursuant to the terms and conditions
of the Offer on a pro rata basis
according to the number of Shares
tendered by each Shareholder (and not
timely withdrawn), unless the Fund
determines not to purchase any Shares
in accordance with the conditions
described in Section 13 of this Offer
to Purchase. The Fund's present
intention, if the Offer is
oversubscribed, is not to purchase
more than $2,000,000 of Shares. See
Section 1 of this Offer to Purchase.
If I Decide Not To Tender, How Will The Your percentage ownership interest
Tender Offer Affect The Fund Shares I in the Fund will increase after
Hold?......................................completion of the tender offer if the
Shares are properly
tendered and the Fund purchases them.
What Action Need I Take If I Decide Not None.
To Tender My Shares?.................................
Does The Fund Have The Financial Yes. The purchase price of the
Resources To Make Payment?.................Shares in the Offer will be
financed first through cash on hand
and then, if necessary,
through (a) the sale of portfolio
securities and/or (b) borrowing,
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each in the amount or amounts
determined by A T Funds, LLC, the
Fund's investment adviser (the
"Adviser"), in its reasonable
discretion, subject to restrictions
or limitations contained in the
Declaration of Trust, the Fund's
private placement memorandum or
material agreements, each as amended
from time to time, or
applicable laws, rules and
regulations, including the rules and
regulations promulgated under the
Investment Company Act of 1940, as
amended (the "1940 Act"). See Section
5 of this Offer to Purchase.
Is There Any Reason Shares Tendered In addition to those circumstances
Would Not Be Accepted?.....................described in Section 13 of
this Offer to Purchase in which
the Fund is not required to
accept tendered Shares, the Fund has
reserved the right to reject any and
all tenders determined by it not to
be in appropriate form. For example,
tenders will be rejected if the
tender does not include the original
signature(s) of a tendering
Shareholder(s).
How Will Tendered Shares Be Accepted For The Fund will accept for payment
Payment?...................................determined by the Fund, up to a
maximum of $2,000,000 of
Shares. If you properly tender
Shares, we will mail you a notice by
October 30, 2006 advising you if we
intend to purchase all or any portion
of the Shares you tendered. See
Section 2 of this Offer to Purchase.
If Shares I Tender Are Accepted By The On or about January 15, 2007,
Fund, When Will Payment Be Made?...........we will give you a non-interest
bearing, non-transferrable promissory
note (the "Note"), payable
as described below, entitling you to
an amount equal to the estimated NAV
of the Shares purchased, determined
by the Fund as of the Valuation Date
(the "Purchase Price").
The Note will be mailed by the
Subadministrator to your address of
record on the books of the Fund and
will entitle you to an initial
payment (the "Initial Payment") in
cash and/or marketable securities
(valued in accordance with the Fund's
valuation procedures) equal to 90% of
the estimated Purchase Price of the
tendered Shares which will be paid to
you within the later of (a) 50 days
after the Valuation Date or, (b) if
the Fund has requested withdrawals of
capital from any investment funds in
order to fund the purchase of Shares,
10 business days after the Fund has
received at least 90% of the
aggregate amount withdrawn from such
investment funds, which in some
circumstances may take a substantial
period of time due to the possibility
of limited liquidity of the
investment funds.
The Note will also entitle you to a
final payment (the "Final Payment")
equal to the amount in excess, if
any, of (a) the Purchase Price,
determined as of the Valuation Date
and based upon the results of the
annual audit of the Fund's financial
statements for fiscal year ending
March 31, 2007, over (b) the Initial
Payment. The Final Payment will be
paid within 30 days after the
completion of the Fund's annual
audit, which the Fund anticipates
will be completed within 60 days of
its fiscal year end of March 31,
2007; provided, however, that the
Board of Trustees, in its discretion,
may determine that the Final Payment
be paid prior to the completion of
the Fund's audit.
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Under certain circumstances, ▇▇▇▇▇▇
accepted for tender may be paid by
combining the Initial Payment and the
Final Payment into a single payment
and paying such amount to
Shareholders in lieu of issuing the
Note.
Is My Sale Of Shares In The Tender Offer For most Shareholders, yes. The sale
A Taxable Transaction For U.S. Federal of the Shares pursuant to the tender
Income Tax Purposes?.......................offer by U.S. Shareholders, other
than those who are tax exempt, will
be a taxable transaction for U.S.
federal income tax purposes. See
Section 8 of the Offer to Purchase
for a more detailed discussion of
certain U.S. federal income tax
consequences. U.S. and Non-U.S.
Shareholders are advised to
consult their own tax advisers.
Is The Fund Required To Complete The Under most circumstances, yes.
Tender Offer And Purchase All Shares There are certain circumstances,
Tendered Up To The Maximum Of $2,000,000 however, in which the Fund will not
of Shares?.................................be required to purchase any or all
Shares tendered, as described in
Section 13 of this Offer to Purchase.
Specifically, in no event will the
Fund purchase shares in an amount
that could cause the Fund to be
treated as a "publicly traded
partnership" under applicable U.S.
federal income tax laws and
regulations.
Does Management Encourage Shareholders None of the Fund, the Board of
To Participate In The Tender Offer, And Trustees of the Trust, the Adviser
Will Management Participate In The or the Fund's investment subadviser,
Tender Offer?..............................is making anyrecommendation to
tender or not to tender Shares in
the tender offer. No trustee or
executive officer of the Fund or the
Trust intends to tender Shares.
See Section 6 of this Offer to
Purchase.
Will This Be My Last Opportunity To This is the fifth tender offer the
Tender Shares To The Fund?.................Fund's Board of Trustees has
approved. A summary of prior tender
offers is as follows:
Amount of
Effective Date Tender Offer Shares Tendered
December 31, 2005 $ 1,000,000 $ 0
March 31, 2006 $ 1,000,000 $ 0
June 30, 2006 $ 1,000,000 $ 850,000
September 30, 2006 $ 2,000,000 $ 2,000,000
The Board of Trustees may, but is not
obligated to, approve subsequent
tender offers, in aggregate amounts
as the Board of Trustees may
determine from time to time. There
can be no assurance regarding the
size of such tender offers, the price
at which they will be conducted or
that any of these subsequent tenders
will occur at all. If they do not
occur, this Offer may be your last
opportunity to tender your Shares to
the Fund. See Section 6 of this Offer
to Purchase.
How Do I Obtain Additional
Information?.... Questions and requests for assistance
should be directed to the
Subadministator by calling toll free
at (▇▇▇) ▇▇▇-▇▇▇▇,
between 9:00 a.m. and 5:00 p.m.
Eastern time, Monday through Friday
(except holidays). Requests for
additional copies of the Offer to
Purchase, the Letter of Transmittal
and all other tender offer documents
should also be directed to the
Subadministrator.
-iv-
TO THE HOLDERS OF COMMON SHARES OF A T FUND OF FUNDS
Introduction
A T Fund of Funds (the "Fund"), the sole series of A T Funds Investment
Trust, a Delaware statutory trust (the "Trust"), and registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end,
non-diversified management investment company, hereby offers to purchase up to
$2,000,000 (the "Offer Amount") of the Fund's outstanding common shares (the
"Shares"), at a price (the "Purchase Price") per Share equal to the net asset
value ("NAV") as of the close of business on December 31, 2006, or a later date
if the Offer is extended (the "Valuation Date"), upon the terms and subject to
the conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). The Fund has mailed
materials for the Offer to shareholders on September 22, 2006.
THIS OFFER IS BEING EXTENDED TO ALL HOLDERS OF THE SHARES (THE
"SHAREHOLDERS") AND IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED HEREIN AND IN THE
LETTER OF TRANSMITTAL. ALSO, SEE SECTION 13 OF THIS OFFER TO PURCHASE.
THE SHARES ARE NOT TRADED ON ANY ESTABLISHED TRADING MARKET AND ARE
SUBJECT TO STRICT RESTRICTIONS ON TRANSFERABILITY PURSUANT TO THE TRUST'S
AGREEMENT AND DECLARATION OF TRUST, AS AMENDED FROM TIME TO TIME (THE
"DECLARATION OF TRUST").
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
AND IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND OR
ITS INVESTMENT ADVISER OR SUBADVISER. THE FUND HAS BEEN ADVISED THAT NO TRUSTEE
OR EXECUTIVE OFFICER OF THE FUND OR THE TRUST INTENDS TO TENDER ANY SHARES
PURSUANT TO THE OFFER.
As of July 31, 2006, there were 293,951 Shares issued and outstanding,
and the NAV was $107.24 per Share. The number of Shares issued and outstanding
may be greater on the Expiration Date (as defined below) as a result of net
investments in the Fund between July 31, 2006 and the Expiration Date.
Shareholders may contact the Fund's subadministrator, Citigroup Fund Services,
LLC (the "Subadministrator"), by calling toll free at (▇▇▇) ▇▇▇-▇▇▇▇, between
9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday (except holidays),
to obtain a current NAV of the Shares.
Any Shares acquired by the Fund pursuant to the Offer will become
authorized but unissued Shares and will be available for issuance by the Fund
without further Shareholder action (except as required by applicable law).
Tendering Shareholders may be obligated to pay brokerage fees or commissions or,
subject to Instruction 7 of the Letter of Transmittal, transfer taxes on the
purchase of Shares by the Fund. Shareholders may also be subject to other
transaction costs, as described in Section 2.
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions set forth in the Offer,
the Fund will accept for payment, and pay for, up to $2,000,000 of the Fund's
outstanding Shares validly tendered on or prior to 5:00 p.m., Eastern time, on
October 23, 2006, or such later date to which the Offer is extended (the
"Expiration Date") and not withdrawn as permitted by Section 4.
Subject to the limitations set forth below, Shareholders may tender all
of their Shares, some of their Shares defined as a specific dollar value, or
some of their Shares defined as a specific dollar value above the required
minimum investment balance, as described below. A Shareholder who tenders only a
-1-
portion of such Shareholder's Shares is required to maintain an investment in
Shares equal to at least $100,000 on the Valuation Date. If a Shareholder
tenders less than all of the Shareholder's Shares and the repurchase of the
tendered Shares would cause the Shareholder's remaining investment to fall below
the required minimum, the Fund will reduce the portion of Shares to be
repurchased so that the required minimum balance is maintained. The Offer is
being made to all Shareholders of the Fund and is not conditioned on any minimum
amount of Shares being tendered.
If the amount of Shares properly tendered and not withdrawn prior to
the Expiration Date is less than or equal to the Offer Amount, the Fund will,
subject to the conditions described in Section 13 and upon the terms and
conditions of the Offer, purchase all Shares so tendered. If more than
$2,000,000 of Shares are properly tendered pursuant to the Offer (and not
withdrawn as provided in Section 4), unless the Fund determines not to purchase
any Shares in accordance with the conditions described in Section 13 of this
Offer to Purchase, the Fund will purchase Shares from tendering Shareholders, in
accordance with the terms and conditions specified in the Offer, on a pro rata
basis according to the number of Shares tendered by each Shareholder (and not
timely withdrawn). The Fund does not contemplate extending the Offer and
increasing the amount of Shares covered thereby by reason of more than
$2,000,000 of Shares having been tendered.
The Fund expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the period of time during which the Offer
is open by giving oral or written notice of such extension to the
Subadministrator. Shareholders will be notified of any such extension no later
than 9:00 a.m. Eastern time, on the next business day after the previously
scheduled Expiration Date. If the Fund makes a material change in the terms of
the Offer or is otherwise required by applicable law, the Fund will extend the
Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). During any
extension, all Shares previously tendered and not withdrawn will remain subject
to the Offer, subject to the right of a tendering Shareholder to withdraw his,
her or its Shares.
Subject to the terms and conditions of the Offer, the Fund will pay the
consideration offered or return the tendered Shares as set forth below. Any
extension, delay or termination will be followed as promptly as practicable by a
notice to Shareholders thereof, such notice, in the case of an extension, to be
given no later than 9:00 a.m. Eastern time, on the next business day after the
previously scheduled Expiration Date.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
For purposes of the Offer, the Fund will be deemed to have accepted for
payment Shares that are validly tendered on or before the Expiration Date or any
extensions thereof (and not timely withdrawn pursuant to Section 4) when the
Fund gives written notice to the tendering Shareholder of its election to
purchase the Shareholder's Shares. The Purchase Price per Share will equal the
NAV per Share as of the close of business on the Valuation Date. In all cases,
payment for Shares tendered and accepted for payment pursuant to the Offer will
be made only after timely receipt by the Subadministrator of a properly
completed and duly executed Letter of Transmittal, and any other documents
required by the Letter of Transmittal. The Fund expressly reserves the right, in
its sole discretion, to delay the acceptance for payment of, or payment for,
Shares, in order to comply, in whole or in part, with any applicable law.
For Shareholders who tender Shares that are accepted by the Fund for
purchase, payment of the Purchase Price will consist of a non-interest-bearing,
non-transferable promissory note (the "Note") entitling the Shareholder to an
initial payment (the "Initial Payment") and a final payment (the "Final
Payment"). The Initial Payment will be equal to 90% of the estimated Purchase
Price of the tendered Shares, determined as of the Valuation Date. Payment of
the Initial Payment will be made within 50 days after the Valuation Date, unless
the Fund has requested withdrawals of capital from any investment funds in order
to fund the purchase of Shares, in which case the Initial Payment will be paid
no later than 10 business days after the Fund has received at least 90% of the
aggregate amount withdrawn from such investment funds.
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The Final Payment will be equal to the amount in excess, if any, of (a)
the Purchase Price, determined as of the Valuation Date and based upon the
results of the annual audit of the Fund's financial statements for fiscal year
ending March 31, 2007, over (b) the Initial Payment. The Final Payment will be
paid within 30 days after the completion of the Fund's annual audit, which the
Fund anticipates will be completed within 60 days of its fiscal year end of
March 31, 2007; provided, however, that the Board of Trustees, in its
discretion, may determine that the Final Payment be paid prior to the completion
of the Fund's audit. The Note will be delivered to the tendering Shareholder in
the manner set forth below within 10 business days after the Valuation Date.
Although the Fund has retained the option to pay all or a portion of
the Purchase Price by distributing marketable securities, the Purchase Price
will be paid entirely in cash except in the unlikely event that the Board of
Trustees determines that the distribution of securities is necessary to avoid or
mitigate any adverse effect of the Offer on the remaining Shareholders of the
Fund.
The Note pursuant to which a Shareholder will receive the Initial
Payment and Final Payment (together, the "Cash Payments") will be delivered to
the Subadministrator and then mailed by the Subadministrator to the
Shareholder's address of record on the books of the Fund. The Cash Payments due
pursuant to the Note will be deposited by the Fund in a segregated custodial
account and then transmitted directly to the tendering Shareholder at the
address of record with the Fund or to the tendering Shareholder's brokerage
account, in accordance with instructions provided by the tendering Shareholder
in the Letter of Transmittal (or as stated below), and, if so transferred to a
brokerage account, may be subject upon withdrawal from such account to any fees
that such brokerage would customarily assess upon the withdrawal of cash from
such account. The Subadministrator will act as an agent for Shareholders for
purpose of delivering the Cash Payments and the Note from the Fund to
Shareholders. Under no circumstances will interest on the Purchase Price for
Shares be paid, regardless of any delay in delivering such payments to any
Shareholder.
Under certain circumstances, ▇▇▇▇▇▇ accepted for tender may be paid by
combining the Initial Payment and the Final Payment into a single payment and
paying such amount to Shareholders in lieu of issuing the Note.
If the Fund is delayed in its acceptance for payment of, or in its
payment for, Shares, or is unable to accept for payment or pay for Shares
pursuant to the Offer for any reason, such Shares may not be withdrawn unless
and except to the extent tendering Shareholders are entitled to withdrawal
rights as described in Section 4 of this Offer to Purchase. If any tendered
Shares are not accepted for payment pursuant to the terms and conditions of the
Offer for any reason, or are not paid because of an invalid tender, those Shares
will remain credited to the account of the relevant tendering Shareholder.
The Fund normally calculates the NAV of Shares approximately 45 days
after the end of the month. The most recent NAV of Shares is available by
calling the Subadministrator toll free at (▇▇▇) ▇▇▇-▇▇▇▇.
3. PROCEDURE FOR TENDERING SHARES.
Shareholders wishing to tender Shares pursuant to the Offer should mail
or otherwise deliver a completed and executed Letter of Transmittal to the
Subadministrator at the address listed on the last page of this Offer to
Purchase. The completed and executed Letter of Transmittal must be received by
the Subadministrator no later than the Expiration Date.
The Fund recommends that all documents be submitted to the
Subadministrator via certified mail, return receipt requested, or by express
delivery service. Shareholders who wish to confirm receipt of a Letter of
Transmittal may contact the Subadministrator at the address or telephone numbers
listed on the last page of this Offer to Purchase.
-3-
All questions as to the validity, form, eligibility (including time of
receipt), payment and acceptance for payment of any tender of Shares will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any and all
tenders of Shares it determines not to be in proper form or the acceptance for
payment of which may, in the opinion of its counsel, be unlawful. The Fund also
reserves the absolute right to waive any of the conditions of the Offer or any
defect or irregularity in the tender of any Shares. No tender of Shares will be
deemed to have been validly made until all defects and irregularities have been
cured or waived. Neither the Fund, the Subadministrator, Allegiance Investment
Management, LLC, the Fund's administrator (the "Administrator" and together with
the Subadministrator, the "Administrators") A T Funds, LLC, the Fund's
investment adviser (the "Adviser"), Treesdale Partners, LLC, the Fund's
investment subadviser (the "Subadviser" and together with the Adviser, the
"Advisers"), nor any other person shall be under any duty to give notification
of any defects or irregularities in tenders, nor shall any of the foregoing
incur any liability for failure to give any such notification. The Fund's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and instructions thereto) will be final and binding.
Payment for Shares tendered and accepted for payment pursuant to the
Offer will be made, in all cases, only after timely receipt of a properly
completed and duly executed Letter of Transmittal for such Shares, and any other
documents required by the Letter of Transmittal. The tender of Shares pursuant
to any of the procedures described in this Section 3 will constitute an
agreement between the tendering Shareholder and the Fund upon the terms and
subject to the conditions of the Offer.
THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE ELECTION AND
RISK OF EACH TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, CERTIFIED MAIL WITH
RETURN RECEIPT REQUESTED IS RECOMMENDED.
4. RIGHTS OF WITHDRAWAL.
Tenders of Shares made pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date. After the Expiration Date (including any date
to which the Offer is extended), all tenders made pursuant to the Offer are
irrevocable.
To be effective, a written notice of withdrawal must be timely received
by the Subadministrator at its address set forth on the last page of this Offer
to Purchase. Any notice of withdrawal must specify the name of the person who
previously executed the particular Letter of Transmittal and the amount of
Shares to be withdrawn, which must be all of the Shares tendered.
All questions as to the form and validity, including time of receipt,
of any notice of withdrawal will be determined by the Fund, in its sole
discretion, which determination shall be final and binding. Neither the Fund,
the Advisers, the Administrators, nor any other person shall be under any duty
to give notification of any defects or irregularities in any notice of
withdrawal nor shall any of the foregoing incur any liability for failure to
give such notification. Any Shares properly withdrawn will be deemed not to have
been validly tendered for purposes of the Offer. However, withdrawn Shares may
be re-tendered by following the procedures described in Section 3 of this Offer
to Purchase at any time prior to the Expiration Date.
If the Fund is delayed in its acceptance for payment of Shares, or it
is unable to accept for payment Shares tendered pursuant to the Offer, for any
reason, then, without prejudice to the Fund's rights under this Offer, the
Subadministrator may, on behalf of the Fund, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that tendering Shareholders are
entitled to withdrawal rights as set forth in this Section 4.
5. SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER.
The Purchase Price for Shares acquired pursuant to the Offer will not
exceed $2,000,000. However, the actual Purchase Price per Share cannot be
determined at this time because the price will be
-4-
based on the NAV per Share on the Valuation Date, and the number of Shares to be
purchased will depend on the amount of Shares tendered. If the NAV per Share on
the Valuation Date were the same as the NAV per Share on July 31, 2006, and if
Shareholders tender $2,000,000 of the Fund's outstanding Shares pursuant to the
Offer, the Fund would purchase approximately 18,650 Shares for a Purchase Price
of $2,000,000. See the Pro Forma Capitalization table below.
The Fund expects that the monies to be used by the Fund to purchase
Shares pursuant to the Offer will be obtained first from cash on hand and then
from (a) the sale of portfolio securities and/or (b) borrowing, each in the
amount or amounts determined by the Adviser, in its reasonable discretion,
subject to restrictions or limitations contained in the Declaration of Trust,
the Fund's private placement memorandum or material agreements, each as amended
from time to time, or applicable laws, rules and regulations, including the
rules and regulations promulgated under the 1940 Act. At this time, the Fund has
not entered into any financing arrangement to enable any such borrowings.
THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND
NON-TENDERING SHAREHOLDERS.
Effect On NAV And Consideration Received By Tendering Shareholders
The Fund invests its assets in investment funds ("Portfolio Funds")
that are managed by various investment managers. If the Fund were required to
sell a substantial amount of its investments in Portfolio Funds to raise cash to
finance the Offer, the market prices of the Portfolio Funds being sold and/or
the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may
decline. If any such decline occurs, the Fund cannot predict what its magnitude
might be or whether such a decline would be temporary or continue to or beyond
the Expiration Date. If the value of the Portfolio Funds were to decline for any
reason before the termination of the Offer, the NAV of the Shares would decline.
Because the price per Share to be paid in the Offer will be dependent upon the
NAV per Share as determined on the Valuation Date, if such a decline continued
up to the Valuation Date, the consideration received by tendering Shareholders
would be reduced.
In addition, the sale of the Fund's investments in Portfolio Funds
could cause the Fund to incur increased brokerage and related transaction
expenses, and the Fund may receive proceeds from the sale of Portfolio Funds
less than the then-current valuation by the Fund. Accordingly, obtaining the
cash to consummate the Offer may result in a decrease in the Fund's NAV per
Share, which would affect both tendering and non-tendering Shareholders.
The Fund may sell Portfolio Funds during the pendency of the Offer, and
possibly for a short time thereafter, to raise cash for the purchase of Shares.
Thus, during the pendency of the Offer, and possibly for a short time
thereafter, the Fund will likely hold a greater than normal percentage of its
net assets in cash and cash equivalents. Because the Fund will not know the
number of Shares tendered until the Expiration Date, the Fund will not know
until the Expiration Date the amount of cash required to pay for such Shares.
Recognition Of Capital Gains By The Fund
As noted, the Fund may be required to sell its investments in Portfolio
Funds to finance the Offer. If the Fund's tax basis for the securities sold is
less than the sale proceeds, the Fund will recognize capital gains. The Fund
would expect to declare and distribute any such gains to Shareholders of record
(reduced by net capital losses realized during the fiscal year, if any). This
recognition and distribution of gains, if any, would have certain negative
consequences: first, Shareholders at the time of a declaration of distributions
would be required to pay taxes on a greater amount of capital gain distributions
than otherwise would be the case; second, to raise cash to make the
distributions, the Fund might need to sell additional portfolio securities
thereby possibly being forced to realize and recognize additional capital gains.
It is impossible to predict what the amount of unrealized gains or losses would
be in the Fund's portfolio at the time that the Fund is required to liquidate
Portfolio Funds (and hence the amount of capital gains or losses that would be
realized and recognized).
-5-
In addition, some of the distributed gains may be realized on
securities held for one year or less, which would generate income taxable to the
Shareholders at ordinary income rates. This could adversely affect the Fund's
after-tax performance.
Tax Consequences Of Repurchases To Shareholders
The Fund's purchase of tendered Shares pursuant to the Offer will have
tax consequences for tendering Shareholders and may have tax consequences for
non-tendering Shareholders. See Section 8 of this Offer to Purchase.
Higher Expense Ratio And Less Investment Flexibility
If the Fund purchases a substantial number of Shares pursuant to the
Offer, the net assets of the Fund will be reduced accordingly. The reduced net
assets of the Fund as a result of the Offer may result in a higher expense ratio
for the Fund and possibly in less investment flexibility for the Fund, depending
on the number of Shares repurchased.
Pro Forma Effects On Capitalization
The following table sets forth the net assets of the Fund as of July
31, 2006, adjusted to give effect to the Offer (excluding expenses and assuming
the Fund repurchases the full $2,000,000 of Shares):
PRO FORMA CAPITALIZATION (1)
ADJUSTMENT FOR
PURCHASE AT $ 107.24 PRO FORMA AS
AS OF JULY 31, 2006 PER SHARE ADJUSTED
Total net assets $ 31,524,071 $ (2,000,000) $ 29,524,071
Shares outstanding 293,951 (18,650) 275,301
NAV per Share $ 107.24 $ 107.24 $ 107.24
(1) This table assumes purchases by the Fund of $2,000,000 of Shares, based
on the NAV as of July 31, 2006 (although the actual Purchase Price will be
based on the NAV as of December 31, 2006).
--------------------------------------------------------------------------------
6. PURPOSE OF THE OFFER; PLANS OR PROPOSALS OF THE FUND.
The purpose of this Offer is to provide liquidity to Shareholders, as
contemplated by and in accordance with the procedures set forth in the Fund's
Registration Statement on Form N-2, filed by the Fund with the Securities and
Exchange Commission (the "SEC") and amended from time to time (the "Registration
Statement"), and the Declaration of Trust. The Registration Statement and the
Declaration of Trust, which were provided to each Shareholder in advance of
subscribing for Shares, provide that the Board of Trustees of the Trust has the
discretion to determine whether and upon what terms the Fund will purchase
Shares from time to time from Shareholders pursuant to written tenders. The
Registration Statement also states that the Board of Trustees will consider the
recommendation of the Adviser, and that the Adviser expects to recommend to the
Board of Trustees that the Fund purchase Shares from Shareholders on the last
business day of each calendar quarter.
-6-
This is the fifth tender offer the Fund's Board of Trustees has
approved. A summary of prior tender offers is as follows:
Amount of
Effective Date Tender Offer Shares Tendered
December 31, 2005 $ 1,000,000 $ 0
March 31, 2006 $ 1,000,000 $ 0
June 30, 2006 $ 1,000,000 $ 850,000
September 30, 2006 $ 2,000,000 $ 2,000,000
Because there is no secondary trading market for Shares and transfers
of Shares are prohibited without prior approval of the Fund, the Board of
Trustees has determined, after consideration of various matters, including but
not limited to those set forth in the Registration Statement, that the Offer is
in the best interests of Shareholders of the Fund in order to provide liquidity
for Shares as contemplated in the Registration Statement and the Declaration of
Trust.
NONE OF THE FUND, THE BOARD OF TRUSTEES, OR THE ADVISERS MAKE ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING ANY OF SUCH SHAREHOLDER'S SHARES, AND NONE OF SUCH PERSONS HAS
AUTHORIZED ANY PERSON TO MAKE ANY SUCH RECOMMENDATION. SHAREHOLDERS ARE URGED TO
EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT
AND TAX ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES.
7. NAV OF SHARES.
The NAV of the Fund is determined as of the last business day of each
calendar month in accordance with the valuation procedures approved by the Board
of Trustees. The Fund commenced investment operations as of May 1, 2005 with an
NAV per Share of $100.00. The NAV per Share as of the end of each month since
the Fund's inception was as follows:
As of NAV per Share
----- -------------
May 31, 2005 $ 99.73
June 30, 2005 $ 99.97
July 31, 2005 $ 100.75
August 31, 2005 $ 101.00
September 30, 2005 $ 101.22
October 31, 2005 $ 101.79
November 30, 2005 $ 102.11
December 31, 2005 $ 102.37
January 31, 2006 $ 103.06
February 28, 2006 $ 103.39
March 31, 2006 $ 104.52
April 30, 2006 $ 105.59
May 31, 2006 $ 106.18
June 30, 2006 $ 106.60
July 31, 2006 $ 107.24
8. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER.
The following discussion describes certain U.S. federal income tax
consequences of tendering Shares in the Offer. Except where noted, it deals only
with Shares held as capital assets and does not deal with special situations,
such as those of dealers in securities or commodities, traders in securities
that elect
-7-
to mark their holdings to market, insurance companies, persons holding Shares as
a part of a hedging, conversion or constructive sale transaction or a straddle
or Shareholders whose functional currency is not the U.S. dollar. Furthermore,
the discussion below is based upon the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions thereunder as of the date hereof, and such authorities may be
repealed, revoked or modified so as to result in U.S. federal income tax
consequences different from those discussed below. This summary does not discuss
all aspects of federal income taxation that may be relevant to a particular
Shareholder in light of such Shareholder's specific circumstances, nor does it
describe any aspect of state, local, foreign or other tax laws. Sales of Shares
pursuant to the Offer will be taxable transactions under applicable state,
local, foreign and other tax laws. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISERS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATING IN
THE OFFER IN LIGHT OF THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES
ARISING UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
In general, a Shareholder who tenders less than all of his, her or its
Shares (or less than all of his, her or its Shares is accepted) should be
treated as receiving a distribution from the Fund. The Shareholder should
recognize gain to the extent that the amount of proceeds received exceeds the
Shareholder's adjusted tax basis in his, her or its Shares. If a Shareholder
tenders all of his, her or its Shares (and all of his, her or its Shares are
accepted), the receipt of the proceeds should be treated as a liquidating
distribution and the Shareholder should recognize gain or loss on a sale equal
to the difference between the Shareholder's "amount realized" on the sale and
the Shareholder's adjusted tax basis in the Shares sold.
The "amount realized" with respect to a Shareholder's Shares will be
the sum of (i) the amount of the Initial Payment; (ii) the amount of the Final
Payment; and (iii) the amount of the Partnership's liabilities allocable to the
Shares (as determined under Code Section 752). The amount of a Shareholder's
adjusted tax basis in his, her or its Shares will vary depending upon the
Shareholder's particular circumstances. In addition, a tendering Shareholder
will be allocated a pro rata share of the Fund's taxable income or loss for the
year of the Offer with respect to the Shares sold in accordance with the
provisions of the Fund concerning transfers of Shares. Such allocation and any
cash distributed by the Fund to the Shareholder for that year will affect the
Shareholder's adjusted tax basis in Shares and, therefore, the amount of such
Shareholder's taxable gain or loss upon a sale of Shares pursuant to the Offer.
If treated as a liquidating distribution, a Shareholder who tenders all
of his, her or its Shares (and all of his, her or its Shares are accepted),
should be able to apply the Shareholder's adjusted tax basis against the Initial
Payment and thereafter against the receipt of the Final Payment.
The gain or loss recognized by a Shareholder on a sale of Shares
pursuant to the Offer generally should be treated as a capital gain or loss if
the Shares were held by the Shareholder as a capital asset. That capital gain or
loss will be treated as long-term capital gain or loss if the tendering
Shareholder's holding period for the Shares exceeds one year. Under current law,
long-term capital gains of individuals are generally taxed at a maximum marginal
federal income tax rate of 15%. Capital losses are deductible only to the extent
of capital gains, except that individual taxpayers may deduct up to $3,000 per
year of capital losses in excess of the amount of their capital gains against
ordinary income. Excess capital losses generally can be carried forward to
succeeding years (a corporation's carry-forward period is 5 years and an
individual taxpayer can carry forward such losses indefinitely).
Backup Federal Income Tax Withholding
Backup withholding tax will be imposed on the gross proceeds paid to a
tendering U.S. Shareholder (as defined in Section 8) unless the U.S. Shareholder
provides such U.S. Shareholder's taxpayer identification number (employer
identification number or social security number) to the Subadministrator,
certifies as to no loss of exemption from backup withholding, complies with
applicable requirements of the backup withholding rules or is otherwise exempt
from backup withholding. Therefore, each tendering U.S. Shareholder should
complete and sign the Substitute Form W-9 included as part of the Letter of
Transmittal so as to provide the information and certification necessary to
avoid backup withholding, unless such U.S. Shareholder otherwise establishes to
the satisfaction of the Subadministrator
-8-
that such U.S. Shareholder is not subject to backup withholding. Certain U.S.
Shareholders (including, among others, all corporations) are not subject to
these backup withholding requirements. In addition, Non-U.S. Shareholders are
not subject to these backup withholding requirements. In order for a Non-U.S.
Shareholder to qualify as an exempt recipient, that Non-U.S. Shareholder must
submit an IRS Form W-8 or a Substitute Form W-8. Such statements can be obtained
from the Subadministrator.
TO PREVENT BACKUP U.S. FEDERAL INCOME TAX WITHHOLDING, EACH SHAREHOLDER
WHO DOES NOT OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING MUST PROVIDE
THE SUBADMINISTRATOR WITH THE SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION
NUMBER AND PROVIDE CERTAIN OTHER INFORMATION BY COMPLETING A SUBSTITUTE FORM W-9
OR OTHER DOCUMENTATION.
THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY. EACH SHAREHOLDER IS URGED TO CONSULT SUCH SHAREHOLDER'S OWN TAX ADVISER TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM, HER OR IT OF THE OFFER,
INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
9. SELECTED FINANCIAL INFORMATION.
Set forth below is a summary of selected financial information for the
Fund for the fiscal years ended March 31, 2005 and March 31, 2006. The
information below has been excerpted from the Fund's audited financial
statements contained in its Annual Report to Shareholders for the fiscal year
ended March 31, 2005 and for the fiscal year ended March 31, 2006. The Annual
Reports have previously been provided to Shareholders of the Fund, and can be
obtained for free at the website of the SEC (▇▇▇▇://▇▇▇.▇▇▇.▇▇▇). The summary of
selected financial information set forth below is qualified in its entirety by
reference to reports and the financial information, the notes thereto and
related matter contained therein.
-9-
--------------------------------------------------------------------------------
A T FUND OF FUNDS
--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
----------------------------------------------------------------------- ------------------ ------------------
March 31, 2005 March 31, 2006
------------------ ------------------
----------------------------------------------------------------------- ------------------ ------------------
ASSETS
Investments at fair value (cost $23,924,469) $ 25,298,250
Advance for investment in Portfolio Funds 1,000,000
Cash $ 103,514 286,310
Due from Adviser 219,986 22,657
Prepaid expenses and other assets 25,900 16,893
------------------ ------------------
------------------ ------------------
Total Assets 349,400 26,624,110
------------------ ------------------
------------------ ------------------
LIABILITIES
Capital contribution received in advance 200,000
Due to Adviser 249,400 131,539
Accrued Trustees' fees and expenses 12,683
Accrued expenses and other liabilities 88,727
------------------ ------------------
------------------ ------------------
Total Liabilities 249,400 432,949
------------------ ------------------
------------------ ------------------
NET ASSETS $ 100,000 $ 26,191,161
================== ==================
================== ==================
COMPONENTS OF NET ASSETS
Paid-in capital $ 100,000 $ 25,162,000
Distributable Earnings 1,029,161
------------------ ------------------
------------------ ------------------
NET ASSETS $ 100,000 $ 26,191,161
================== ==================
================== ==================
NET ASSET VALUE, Offering and Redemption Price Per Share: Based on
net assets of $100,000 and 1,000 shares outstanding as of March 31,
2005, and net assets of $26,191,161
and 250,576 shares outstanding as of March 31, 2006 $ 100.00 $ 104.52
================== ==================
[remainder of page left intentionally blank]
-10-
--------------------------------------------------------------------------------
A T FUND OF FUNDS
STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
----------------------------------------------------------------------- ------------------ ------------------
For the Period
from October 8,
2004 (Date of For the year
Formation) to ended
March 31, 2005 March 31, 2006
------------------ ------------------
----------------------------------------------------------------------- ------------------ ------------------
INVESTMENT INCOME
Income from Portfolio Funds $ 30,288
Interest income $ 14 24,834
------------------ ------------------
------------------ ------------------
Total Investment Income 14 55,122
------------------ ------------------
------------------ ------------------
EXPENSES
Investment advisory fees 383,675
Accounting fees 80,208
Transfer agent and escrow fees 30,160
Professional fees 132,916
Trustees' fees 48,850
Organizational costs 220,000 13,272
Amortization of deferred offering costs 120,577
Other expenses 45,254
------------------ ------------------
------------------ ------------------
Total Expenses 220,000 854,912
Less: fees waived and expenses reimbursed (219,986) (375,325)
------------------ ------------------
------------------ ------------------
Total Expenses Net of Fee Waiver and Expense Reimbursement 14 479,587
------------------ ------------------
------------------ ------------------
NET INVESTMENT INCOME (LOSS) 0 (424,465)
------------------ ------------------
------------------ ------------------
REALIZED AND UNREALIZED GAINS
ON PORTFOLIO FUNDS
Net Realized gain from investments 79,845
Net change in unrealized appreciation of investments in
Portfolio Funds 1,373,781
------------------ ------------------
------------------ ------------------
NET REALIZED AND UNREALIZED GAIN ON PORTFOLIO FUNDS
1,453,626
------------------ ------------------
INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 0 $ 1,029,161
================== ==================
[remainder of page left intentionally blank]
-11-
--------------------------------------------------------------------------------
A T FUND OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
---------------------------------------------------------------------- ------------------- ------------------
For the
Period from
October 8, For the year
2004 (Date of ended March 31
Formation) to 31, 2006
March 31, 2005
------------------- ------------------
---------------------------------------------------------------------- ------------------- ------------------
OPERATIONS
Net investment income (loss) $ (424,465)
Net realized gain on investments in Portfolio Funds 79,845
Net change in unrealized appreciation of investments in
Portfolio Funds 1,373,781
------------------- ------------------
------------------- ------------------
Increase in Net Assets Resulting from Operations $ 0 1,029,161
------------------- ------------------
------------------- ------------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares issued 100,000 25,062,000
------------------- ------------------
------------------- ------------------
Increase in Net Assets from Capital Share Transactions 100,000 25,062,000
------------------- ------------------
------------------- ------------------
Increase in Net Assets 100,000 26,091,161
NET ASSETS
Beginning of Period 0 100,000
------------------- ------------------
------------------- ------------------
End of Period $ 100,000 $ 26,191,161
=================== ==================
=================== ==================
SHARE TRANSACTIONS
Shares Outstanding - Beginning of Period 0 1,000
Sale of shares 1,000 249,576
------------------- ------------------
------------------- ------------------
Shares Outstanding - End of Period 1,000 250,576
=================== ==================
[remainder of page left intentionally blank]
-12-
--------------------------------------------------------------------------------
A T FUND OF FUNDS
STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
---------------------------------------------------------------------- ------------------- ------------------
For the
Period from
October 8, For the year
2004 (Date of ended March
Formation) to 31, 2006
March 31, 2005
------------------- ------------------
---------------------------------------------------------------------- ------------------- ------------------
Increase (decrease) in cash -
Cash flows from operating activities:
Net Increase in Net Assets Resulting from Operations $ 0 $ 1,029,161
Adjustments to reconcile net increase in net assets resulting
from operations to net cash used in operating activities:
Amortization of deferred offering costs 120,577
Cost of Purchase of Portfolio Funds (26,574,469)
Proceeds from Sale of Portfolio Funds 2,729,845
Increase in advance for investment in Portfolio Funds (1,000,000)
Increase in dividends and interest receivable (3,773)
Increase in deferred offering costs (131,539)
Decrease (increase) in reimbursement due from Adviser (219,986) 197,329
Increase (decrease) in organization costs payable to Adviser 220,000 (88,461)
Decrease (increase) in prepaid expenses (25,900) 23,742
Increase in accrued Trustees' fees and expenses 12,683
Increase in other accrued expenses 87,062
Increase in other liabilities 1,665
Realized gain on investments in Portfolio Funds (79,845)
Unrealized appreciation on investments in Portfolio Funds (1,373,781)
------------------- ------------------
------------------- ------------------
Net Cash Used by Operating Activities (25,886) (25,049,804)
------------------- ------------------
------------------- ------------------
Cash flows from financing activities:
Increase (decrease) in note payable to Adviser 29,400 (29,400)
Proceeds from shares issued 100,000 25,062,000
Increase in capital contribution received in advance 200,000
------------------- ------------------
------------------- ------------------
Net Cash Provided by Financing Activities 129,400 25,232,600
------------------- ------------------
------------------- ------------------
Net Increase in Cash 103,514 182,796
Cash Balance
Beginning of Period 0 103,514
------------------- ------------------
------------------- ------------------
End of Period $ 103,514 $ 286,310
=================== ==================
10. CERTAIN INFORMATION CONCERNING THE FUND AND THE FUND'S INVESTMENT
MANAGER.
The Fund is a closed-end, non-diversified management investment
company, organized as a series of the Trust, a Delaware statutory trust. The
Fund issues Shares in private transactions, and the first purchase of Shares
occurred as of May 1, 2005. As of July 31, 2006, the NAV of the Fund was $
107.24 per Share.
As a closed-end investment company, the Fund differs from an open-end
investment company (i.e., a mutual fund) in that it does not redeem its Shares
at the election of a Shareholder and does not continuously offer its Shares for
sale to the public. The Fund's investment objective is to seek risk-adjusted,
fixed-income, absolute returns regardless of the market conditions, which the
Fund seeks to achieve by operating as a "fund of hedge funds" and investing its
assets in investment funds that are
-13-
managed by various investment managers that use an "absolute return" investment
strategy. The principal executive offices and business address of the Fund are
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇. The Fund's business telephone number is (▇▇▇) ▇▇▇-▇▇▇▇.
A T Funds, LLC and Treesdale Partners, LLC (collectively, the
"Advisers") serve as the Adviser and Subadviser, respectively, to the Fund. The
Advisers are both Delaware limited liability companies registered as investment
advisers under the Investment Advisers Act of 1940, as amended. They have served
as Adviser and Subadviser since the Fund's inception. The principal business
address of the Adviser is ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the principal business address of the Subadviser is
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Adviser
is a direct subsidiary owned equally by the Subadviser and the Administrator.
The Fund is subject to the information and reporting requirements of
the 1940 Act and in accordance therewith is obligated to file reports and other
information with the SEC relating to its business, financial condition and other
matters. The Fund has also filed an Offer to Purchase on Schedule TO with the
SEC. Such reports and other information are available for inspection at the
public reference room at the SEC's office, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. The Fund's filings are also available to the public on
the SEC website (▇▇▇▇://▇▇▇.▇▇▇.▇▇▇). Copies may be obtained, by mail, upon
payment of the SEC's customary charges, by writing to its principal office at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
11. INTEREST OF TRUSTEES, OFFICERS AND CONTROLLING SHAREHOLDERS;
TRANSACTIONS AND ARRANGEMENTS CONCERNING THE SHARES.
The trustees and executive officers of the Fund and the Trust and the
aggregate number and percentage of the Shares each of them beneficially owns is
set forth in the table below. The Adviser owns 1,000 Shares, or 0.4%, of the
Fund's currently outstanding Shares. All ownership information is as of July 31,
2006.
Trustee/Officer Number Of Shares Percentage Of Shares
Name and Address Position(s) Beneficially Owned Beneficially Owned
▇▇▇ ▇. ▇▇▇▇ Independent Trustee 0 0
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ #1 and Chairman of the
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Board of Trustees
▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇▇ Independent Trustee 0 0
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ ▇▇▇▇ Independent Trustee 0 0
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trustee and Chief * *
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ Chief Operating * *
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, Officer and Vice
Suite ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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Trustee/Officer Number Of Shares Percentage Of Shares
Name and Address Position(s) Beneficially Owned Beneficially Owned
▇▇▇▇ ▇▇▇ Chief Investment * *
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, Officer and Vice
Suite ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chief Financial * *
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Chief Compliance * *
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Suite Officer and Assistant
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
* Through an indirect ownership of the Adviser, these officers are each a
beneficial owner of less than 0.1% of the Shares of the Fund.
In addition, the following Shareholders own greater than 5% of the
Fund's currently outstanding Shares, but do not otherwise manage the affairs of
the Fund. Such information is as of July 31, 2006.
Shareholder Number Of Shares Percentage Of Shares
Name and Address Beneficially Owned Beneficially Owned
First National Bank of the Rockies 147,090 50.0 %
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇ & ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SVB ▇▇▇▇▇ Di Seguro Sosial 48,883 16.6 %
Pater ▇▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
Orco Bank Investments B.V. 32,350 11.0 %
Dr. ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ Antilles
▇▇▇ ▇▇▇▇▇ Revocable Trust 16,768 5.7 %
c/o Greenrock Research, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
During the 60 business days prior to the date of this Offer to
Purchase, the Fund effected no transactions in Shares other than the sale of
Shares to Shareholders. Neither the Fund nor any subsidiary of the Fund nor, to
the best of the Fund's knowledge, any of the Advisers or the Fund's or Trust's
officers or trustees, has effected any transaction in Shares during the past 60
business days other than purchase of Shares from the Fund.
Except as set forth in the Offer, neither the Fund nor, to the best of
the Fund's knowledge, any of the Fund's or Trust's officers or trustees is a
party to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly to the Offer with respect to any Shares
of the Fund, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or the voting of any such
Shares, joint ventures, loan or option arrangements, puts or calls,
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guarantees of loans, guarantees against loss or the giving or withholding of
proxies, consents or authorizations.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Fund is not aware of any approval or other action by any government
or governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
the Fund as contemplated herein. Should any such approval or other action be
required, the Fund presently contemplates that such approval or other action
will be sought. The Fund is unable to predict whether it may determine that it
is required to delay the acceptance for payment of, or payment for, Shares
tendered pursuant to the Offer pending the outcome of any such matter. There can
be no assurance that any such approval or other action, if needed, would be
obtained without substantial conditions or that the failure to obtain any such
approval or other action might not result in adverse consequences to the Fund's
business. The Fund's obligations under the Offer to accept for payment and pay
for Shares are subject to certain conditions described in Section 13.
13. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, the Fund shall not be
required to accept for payment or pay for any Shares, may postpone the
acceptance for payment of or payment for tendered Shares, and may, in its
reasonable discretion, terminate, reduce or amend the Offer as to any Shares not
then paid for if:
(a) such transactions, if consummated, would result in a failure to comply with
applicable asset coverage requirements under the 1940 Act;
(b) there is (i) in the Board of Trustees' judgment, any material legal or
governmental action or proceeding instituted or threatened challenging such
transactions or otherwise materially adversely affecting the Fund or the
Offer; (ii) an event causing the inability of the Fund to calculate its
NAV; (iii) a declaration of a banking moratorium by federal or state
authorities or any suspension of payment by banks in the United States or
New York State; (iv) a commencement of war or armed hostilities, an act of
terrorism, a natural disaster or some other national or international
calamity which, in the Board of Trustees' judgment, materially adversely
affects the Fund or the Offer; or (v) some other event which causes a
significant (greater than 10%) decrease in the price of the Shares which,
in the Board of Trustees' judgment, would result in the consummation of the
Offer not being in the best interests of the Shareholders;
(c) a tender or exchange offer for any of the Shares (other than the Offer), or
any merger, business combination or other similar transaction with or
involving the Fund shall have been proposed, announced or made by any
person;
(d) the Board of Trustees determines that (i) payment of the purchase price for
Shares is not authorized pursuant to the applicable laws, rules and
regulations with respect to the repurchase of securities by an issuer, or
(ii) effecting any such transaction would constitute a breach of its
fiduciary duty owed to the Fund or Shareholders; or
(e) the aggregate repurchases of Shares during any tax year would equal or
exceed an amount that could cause the Fund to be treated as a "publicly
traded partnership" under applicable U.S. federal income tax laws and
regulations.
The foregoing conditions are for the sole benefit of the Fund and may
be asserted by the Fund regardless of the circumstances (including any action or
inaction by the Fund) giving rise to any such conditions or may be waived by the
Fund in whole or in part at any time and from time to time in its sole
discretion. The failure by the Fund at any time to exercise any of the foregoing
rights shall not be deemed
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a waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time. Any determination by
the Fund concerning the events described in this Section shall be final and
binding on all parties.
A Shareholder notice shall be given of a material change in such
conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or as otherwise required by applicable law.
If the Offer is suspended or postponed, the Fund will provide notice to
Shareholders of such suspension or postponement.
14. FEES AND EXPENSES.
The Fund will not pay to any broker or dealer, commercial bank, trust
company or other person any solicitation fee for any Shares purchased pursuant
to the Offer. The Fund will reimburse such persons for customary handling and
mailing expenses incurred in forwarding the Offer. No such broker, dealer,
commercial bank, trust company or other person has been authorized to act as
agent of the Fund or the Subadministrator for purposes of the Offer.
The Fund has retained Citigroup Fund Services, LLC to act as
Subadministrator. The Subadministrator will receive reasonable and customary
compensation for its service as the Subadministrator, will also be reimbursed
for certain out-of-pocket expenses, and will be indemnified against certain
liabilities by the Fund.
15. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. The Fund may, in its sole discretion, take such action as it may
deem necessary to make the Offer in any such jurisdiction.
The Fund is not aware of any jurisdiction in which the making of the
Offer or the acceptance of Shares in connection therewith would not be in
compliance with the laws of such jurisdiction. Consequently, the Offer is
currently being made to all holders of Shares. However, the Fund reserves the
right to exclude Shareholders in any jurisdiction in which it is asserted that
the Offer cannot lawfully be made. So long as the Fund makes a good faith effort
to comply with any state law or the laws of any other jurisdiction deemed
applicable to the Offer, the Fund believes that the exclusion of Shareholders
residing in such jurisdiction is permitted under Rule 13e-4(f)(9) promulgated
under the Exchange Act.
16. CONTACTING THE SUBADMINISTRATOR.
The Letter of Transmittal and any other required documents should be
sent by each Shareholder to the Subadministrator as set forth below. In
addition, any questions or requests for assistance or additional copies of the
Offer to Purchase, the Letter of Transmittal, and other documents may be
directed to the Subadministrator at its telephone number and location listed
below.
Citigroup Fund Services, LLC
Two Portland Square
Portland, ME 04101
Toll Free Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
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