497 1 d897817d497.htm 497 497
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Filed Pursuant to Rule 497(c)
1933 Act File No. 333-203058

RIVERPARK FUNDS TRUST

RiverPark/Gargoyle Hedged Value Fund

156 West 56th Street, 17th Floor

New York, NY 10019

888-564-4517

May 15, 2015

Dear Valued Shareholder:

The Board of Trustees of the RiverPark Funds Trust (the “RiverPark Board”) has called a special meeting of shareholders (the “Special Meeting”) of the RiverPark/Gargoyle Hedged Value Fund (the “RiverPark Fund”), a series of the RiverPark Funds Trust (the “RiverPark Trust”). We are pleased to announce that after careful consideration, RiverPark Advisors, LLC (“RiverPark”), the RiverPark Fund’s investment adviser, recommended and the RiverPark Board, on behalf of the RiverPark Fund, approved the reorganization of the RiverPark Fund into the TCW/Gargoyle Hedged Value Fund (the “TCW Fund”), a new series of TCW Alternative Funds (the “TCW Trust”). The TCW Fund is designed to be substantially similar from an investment perspective to the RiverPark Fund. The Special Meeting is scheduled to be held at 10:00 a.m. Eastern Time, on Friday, June 26, 2015, at the offices of SEI Investments Global Funds Services located at One Freedom Valley Drive, Oaks, PA 19456.

The primary purpose of the reorganization transaction (the “Reorganization”) is to move the RiverPark Fund to the TCW family of funds. The Reorganization will shift management oversight responsibility for the RiverPark Fund from RiverPark to TCW Investment Management Company (“TCW”) while retaining the current investment sub-adviser, Gargoyle Investment Advisor, L.L.C. (“Gargoyle”) and the current co-portfolio managers of the RiverPark Fund. In this capacity, the same individuals will continue to make day-to-day investment decisions for the RiverPark Fund. TCW is an experienced provider of investment advisory services to both institutional and retail investors. As of March 31, 2015, TCW and its affiliated companies, which provide a variety of trust, investment management and investment advisory services, had approximately $179.3 billion in assets under management or committed to management. The Reorganization has the potential to expand the RiverPark Fund’s presence in more distribution channels, which could increase its asset base. Investors in the RiverPark Fund may benefit from potential long-term economies of scale and increased distribution capabilities that may result from the consummation of the Reorganization and the inclusion in the larger TCW family of funds. After the Reorganization, shareholders of the TCW Fund will have exchange privileges with certain other TCW funds.

As discussed in more detail in the enclosed proxy statement/prospectus (the “Proxy Statement/ Prospectus”), the RiverPark Board, on behalf of the RiverPark Fund, unanimously approved the Reorganization, subject to approval by the RiverPark Fund’s shareholders. As further explained in the enclosed Proxy Statement/Prospectus, upon satisfaction of the conditions set forth in the Agreement and Plan of Reorganization, your current shares in the RiverPark Fund will be exchanged for shares of the TCW Fund equal in net asset value to the net asset value of your shares of the RiverPark Fund as of the Reorganization closing date.

The Reorganization will be a tax-free exchange for shareholders of the RiverPark Fund. Shareholders may redeem shares of the RiverPark Fund in the ordinary course until the last business day before the closing of the Reorganization. Purchase and redemption requests received after that time will be treated as purchase and redemption requests for shares of the TCW Fund. However, redemption of your RiverPark Fund shares will be treated as a sale for U.S. federal income tax purposes. Shareholders should consult their tax advisors to determine the federal, state and other income tax consequences of the redemption of shares with respect to their particular tax circumstances.

You are being asked to vote to approve the Reorganization. The accompanying Proxy Statement/Prospectus describes the Reorganization and compares the investment objective, investment strategies,


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investment restrictions and expenses of each of the RiverPark Fund and TCW Fund for evaluation by the RiverPark Fund shareholders. The TCW Fund has an investment objective that is substantially identical to and investment strategies that are substantially similar to those of the RiverPark Fund. You should review the Proxy Statement/Prospectus carefully and retain it for future reference.

After careful consideration, the RiverPark Board unanimously approved the Reorganization and recommends that shareholders vote “FOR” the proposals.

We urge you to vote your shares:

 

    By completing and returning the enclosed proxy card in the envelope provided at your earliest convenience;

 

    By the Internet by visiting the website that appears on the enclosed proxy card;

 

    By touch-tone telephone by calling the toll free number that appears on the enclosed proxy card; or

 

    In person at the Special Meeting.

Voting by telephone or the Internet will reduce the time and costs associated with the proxy solicitation.

Your vote is important regardless of the number of shares you own. In order to avoid the added cost of follow-up solicitations and possible adjournments, please take a few minutes to read the Proxy Statement/Prospectus and cast your vote. It is important that your vote be received no later than June 25, 2015.

Solicitation may be made by letter, telephone, facsimile, or telegram. In addition to solicitation by mail and by telephone by a proxy solicitation firm retained for this purpose, representatives of the RiverPark Fund, Gargoyle and TCW, and certain financial services firms and their representatives, who will receive no extra compensation for their services, may solicit proxies by telephone, telegram, or personally.

We appreciate your participation and prompt response in this matter and thank you for your continued support.

 

Sincerely,

/s/ Morty Schaja

Morty Schaja
President
RiverPark Funds Trust


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RIVERPARK FUNDS TRUST

RiverPark/Gargoyle Hedged Value Fund

156 West 56th Street, 17th Floor

New York, NY 10019

888-564-4517

 

 

Notice of a Special Meeting of RiverPark/Gargoyle Hedged Value Fund

Scheduled for Friday, June 26, 2015

 

 

To the RiverPark/Gargoyle Hedged Value Fund Shareholders:

A Special Meeting of Shareholders (the “Special Meeting”) of the RiverPark/Gargoyle Hedged Value Fund (the “RiverPark Fund”), a series of the RiverPark Funds Trust, a Delaware statutory trust (the “RiverPark Trust”), is scheduled for Friday, June 26, 2015, at 10:00 a.m. Eastern Time, at the offices of SEI Investments Global Funds Services located at One Freedom Valley Drive, Oaks, PA 19456.

The purposes of the Special Meeting of the RiverPark Fund are as follows:

 

  1. To consider the approval of an Agreement and Plan of Reorganization providing for the transfer of all of the assets of the RiverPark Fund to, and the assumption of all liabilities of the RiverPark Fund by, TCW/Gargoyle Hedged Value Fund (the “TCW Fund”), a newly-created series of TCW Alternative Funds, in exchange for shares of the TCW Fund, which would be distributed by the RiverPark Fund to the holders of its shares pro rata, based on the net asset values of the holders’ respective RiverPark Fund shares, in complete liquidation of the RiverPark Fund; and

 

  2. To approve adjournments of the Special Meeting from time to time to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to constitute a quorum or to approve Proposal 1; and

 

  3. To transact such other business as may properly come before the Special Meeting or any adjournments thereof.

Shareholders of record at the close of business on April 30, 2015, are entitled to notice of, and to vote at, the Special Meeting. Your attention is called to the accompanying Proxy Statement/Prospectus. Regardless of whether you plan to attend the Special Meeting, please complete, sign and promptly return the enclosed proxy card or promptly cast your vote by telephone or via the Internet so that a quorum will be present and a maximum number of shares may be voted. If you are present at the Special Meeting, you may change your vote, if desired, at that time.

 

By Order of the Board of Trustees of
RiverPark Funds Trust

/s/ Paul Genova

Paul Genova
Secretary

May 15, 2015


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PROXY STATEMENT/PROSPECTUS

DATED MAY 15, 2015

 

 

RIVERPARK FUNDS TRUST

RiverPark/Gargoyle Hedged Value Fund

156 West 56th Street, 17th Floor

New York, NY 10019

888-564-4517

 

 

A Special Meeting of Shareholders scheduled for Friday, June 26, 2015, at 10:00 a.m. Eastern Time, at the offices of SEI Investments Global Funds Services, located at One Freedom Valley Drive, Oaks, PA 19456.

The Board of Trustees of RiverPark Funds Trust, a Delaware statutory trust (the “RiverPark Trust”), has called a special meeting of shareholders (the “Special Meeting”) of the RiverPark/Gargoyle Hedged Value Fund (the “RiverPark Fund”), for the following purposes:

 

  1. To consider the approval of an Agreement and Plan of Reorganization providing for the transfer of all of the assets of the RiverPark Fund to, and the assumption of all liabilities of the RiverPark Fund by, TCW/Gargoyle Hedged Value Fund (the “TCW Fund”), a newly-created series of TCW Alternative Funds, in exchange for shares of the TCW Fund, which would be distributed by the RiverPark Fund to the holders of its shares pro rata, based on the net asset values of the holders’ respective RiverPark Fund shares, in complete liquidation of the RiverPark Fund (the “Reorganization”); and

 

  2. To approve adjournments of the Special Meeting from time to time to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to constitute a quorum or to approve Proposal 1; and

 

  3. To transact such other business as may properly come before the Special Meeting or any adjournments thereof.

 

The Reorganization of the assets of: In exchange for shares of:

RiverPark/Gargoyle Hedged Value Fund,

a series of RiverPark Funds Trust

TCW/Gargoyle Hedged Value Fund,

a series of TCW Alternative Funds

156 West 56th Street, 17th Floor

New York, NY 10019

888-564-4517

865 South Figueroa Street, Suite 1800

Los Angeles, CA 90017

866-858-4338

(collectively, the “Funds” and each, a “Fund”)


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INTRODUCTION

This combined Proxy Statement/Prospectus (“Proxy Statement/Prospectus”) provides you with information about a proposal to consider and vote on the Reorganization, which will constitute approval of the transfer of all of the RiverPark Fund’s assets, the assumption of all of its liabilities, the distribution of the TCW Fund’s shares, and the liquidation of the RiverPark Fund. The Board of Trustees of the RiverPark Trust (the “RiverPark Board”) has authorized, on behalf of the RiverPark Fund, and subject to your approval, the tax free reorganization of the RiverPark Fund into the TCW Fund, a newly-created series of TCW Alternative Funds (the “Reorganization”).

This Proxy Statement/Prospectus provides you with information about a transaction between the RiverPark Fund and the TCW Fund, a newly-created series of TCW Alternative Funds, a Delaware statutory trust (the “TCW Trust”). The RiverPark Fund and the TCW Fund are both open-end investment companies registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Reorganization will involve:

 

    the transfer of all of the assets of the RiverPark Fund to the TCW Fund;

 

    the assumption by the TCW Fund of all of the liabilities of the RiverPark Fund;

 

    the issuance of N Class shares of the TCW Fund to holders of Retail Class shares of the RiverPark Fund;

 

    the issuance of I Class shares of the TCW Fund to holders of Institutional Class shares of the RiverPark Fund; and

 

    the subsequent, complete liquidation of the RiverPark Fund.

As a result of the Reorganization, shareholders of the RiverPark Fund will receive shares of the TCW Fund having an aggregate net asset value (“NAV”) equal to the aggregate NAV of the shares held of the RiverPark Fund as of the close of business on the day of the Reorganization (the “Closing Date”). Until the Closing Date, RiverPark Fund shareholders will continue to be able to redeem their shares at the next determined share price after receipt of a redemption request in proper form by the transfer agent for the RiverPark Trust (See “How to Redeem Shares” in the RiverPark Fund Prospectus (defined below)). Upon the consummation of the Reorganization, RiverPark Fund shareholders will be free to redeem or exchange the shares of the TCW Fund received in the Reorganization at the next determined share price after receipt of a redemption request in proper form by the TCW Fund.

Shareholders of the RiverPark Fund are being asked to vote to approve the Reorganization. If the Reorganization is approved, no further action on the part of shareholders of the RiverPark Fund will be required to effect the Reorganization.

This Proxy Statement/Prospectus, which you should retain for future reference, concisely sets forth important information about the RiverPark Fund that you should know before voting on the Reorganization. Additionally, this Proxy Statement/Prospectus concisely sets forth important information about the TCW Fund that shareholders of the RiverPark Fund should know before investing. A Statement of Additional Information dated May 15, 2015, related to this Proxy Statement/Prospectus and the Reorganization Statement of Additional Information (the “Reorganization SAI”) has been filed with the Securities and Exchange Commission (the “SEC”) and is incorporated by reference into this Proxy Statement/Prospectus. A copy of the Reorganization SAI is available upon request and without charge by calling 866-858-4338.

The RiverPark Fund and the TCW Fund are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the 1940 Act, and in accordance therewith files reports and other information with the SEC.

 

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The following documents relating to the RiverPark Fund have been filed with the SEC and are incorporated herein by reference: (i) the Prospectus of the RiverPark Fund dated January 28, 2015 (the “RiverPark Prospectus”); (ii) the Statement of Additional Information of the RiverPark Fund dated January 28, 2015 (the “RiverPark SAI”); and (iii) the annual report of the RiverPark Fund for the fiscal year ended September 30, 2014. Copies of any of these documents and any subsequently released annual or semi-annual reports for the RiverPark Fund may be obtained, without charge, by calling 888-564-4517, or on the Internet at http://www.riverparkfunds.com.

Because the TCW Fund has not yet commenced operations as of the date of this Proxy Statement/Prospectus, no annual or semi-annual report is available for the TCW Fund at this time.

You can copy and review information about the RiverPark Trust and the TCW Trust (including the SAIs) at the SEC’s Public Reference Room in Washington, DC. You may obtain information on the operation of the Public Reference Room by calling the SEC at (202) 551-8090. Proxy materials, reports and other information about the RiverPark Fund and the TCW Fund are available on the EDGAR Database on the SEC’s Internet site at www.sec.gov. You may obtain copies of this information, after paying a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, Washington, DC 20549.

This Proxy Statement/Prospectus is being mailed on or about May 22, 2015, to shareholders of record at the close of business on April 30, 2015 (the “Record Date”).

Important Notice Regarding the Availability of Proxy Materials for the Special Meeting to Be Held on Friday, June 26, 2015. The Proxy Statement/Prospectus for the Special Meeting is available at: http://www.proxyvote.com.

Shares of the TCW Fund are not deposits or obligations of, or guaranteed or endorsed by, any financial institution, and are not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency. You may lose money by investing in the TCW Fund.

No person has been authorized to give any information or to make any representations other than those contained in this Proxy Statement/Prospectus and in the materials expressly incorporated herein by reference and, if given or made, such other information or representations must not be relied upon as having been authorized by the RiverPark Fund or the TCW Fund.

The SEC has not approved or disapproved these securities, or determined that this Proxy Statement/Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

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QUESTIONS & ANSWERS REGARDING REORGANIZATION

1

PROPOSAL 1 – APPROVAL OF THE REORGANIZATION

6

Summary

6

Comparison of the Investment Objectives and Strategies of the Funds

8

Comparison of Purchase and Redemption Procedures and Exchange Rights

12

RISK OF INVESTING IN THE FUNDS

18

COMPARISON OF FEES AND EXPENSES OF THE FUNDS

26

PERFORMANCE OF THE FUNDS

29

INFORMATION ABOUT THE REORGANIZATION

31

Description of the Reorganization

31

Board Consideration of the Reorganization

33

Fees and Expenses of the Reorganization

34

U.S. Federal Income Tax Consequences of the Reorganization

34

Existing and Pro Forma Capitalizations of the Funds

36

COMPARISON OF ORGANIZATION, STRUCTURE AND GOVERNANCE OF THE FUNDS

37

Comparison of Fundamental and Non-Fundamental Investment Restrictions

41

Comparison of Investment Advisers and Investment Advisory Fees

44

Principal Service Providers

50

Ownership of Securities of the TCW Fund

51

PROPOSAL 2 – APPROVAL OF ADJOURNMENT TO SOLICIT ADDITIONAL PROXIES

52

GENERAL INFORMATION ABOUT THE SPECIAL MEETING

53

FINANCIAL HIGHLIGHTS

55

APPENDIX A FORM OF AGREEMENT AND PLAN OF REORGANIZATION

A-1

APPENDIX B NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE RIVERPARK FUND

B-1

APPENDIX C SHAREHOLDER GUIDE

C-1

APPENDIX D MANAGEMENT DISCUSSION AND ANALYSIS OF THE PERFORMANCE OF THE RIVERPARK FUND

D-1

APPENDIX E BENEFICIAL OWNERSHIP

E-1

 

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QUESTIONS & ANSWERS

REGARDING THE REORGANIZATION

Here are some answers to questions you may have about the Reorganization. These responses are qualified in their entirety by the remainder of this Proxy Statement/ Prospectus, which you should read carefully because it contains additional information and further details regarding the Reorganization (defined below).

 

Q. Why am I receiving this Proxy Statement/Prospectus?

 

A. You are receiving this Proxy Statement/Prospectus in connection with the Special Meeting of the RiverPark Fund to approve an agreement and plan of reorganization providing for the transfer of all of the assets of the RiverPark Fund to, and the assumption of all liabilities of the RiverPark Fund by, the TCW Fund, in exchange for shares of the TCW Fund. The following proposals will be considered:

 

    To consider the approval of an Agreement and Plan of Reorganization providing for the transfer of all of the assets of the RiverPark Fund to, and the assumption of all liabilities of the RiverPark Fund by, the TCW Fund, a newly-created series of the TCW Trust, in exchange for shares of the TCW Fund, which would be distributed by the RiverPark Fund to the holders of its shares pro rata, based on the net asset values of the holders’ respective RiverPark Fund shares, in complete liquidation of the RiverPark Fund (the “Reorganization”); and

 

    To approve adjournments of the Special Meeting from time to time to solicit additional proxies if there are insufficient votes at the time of the Special Meeting to constitute a quorum or to approve Proposal 1.

 

Q. How will the Reorganization affect the RiverPark Fund?

 

A. The RiverPark Board, on behalf of the RiverPark Fund, approved the transaction contemplated by an Agreement and Plan of Reorganization (as described below and a form of which is attached as Appendix A (the “Reorganization Agreement”)). Pursuant to the Reorganization Agreement, the RiverPark Fund will transfer all of its assets to the TCW Fund in exchange for shares of the TCW Fund (the “Reorganization Shares”) with a value equal to the value of the RiverPark Fund’s assets net of liabilities, and for the assumption by the TCW Fund of all liabilities of the RiverPark Fund. As soon as possible after the transfer, the TCW Trust will distribute the Reorganization Shares to the RiverPark Fund’s shareholders on a pro rata basis, who will then become shareholders of the TCW Fund.

As a condition of the Reorganization, the RiverPark Fund and the TCW Fund will receive an opinion of counsel to the TCW Fund that the Reorganization will qualify as a “reorganization” within the meaning of Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”) and, generally, that no gain or loss will be recognized to the RiverPark Fund, its shareholders or the TCW Fund with respect to the Reorganization.

 

Q. What will happen to shares of the RiverPark Fund as a result of the Reorganization?

 

A. Shares of the RiverPark Fund will, in effect, be exchanged for Reorganization Shares equal in value as of the Valuation Date (as defined in the Reorganization Agreement) to the total value of RiverPark Fund shares held immediately before the Reorganization, as determined using the valuation policies and procedures for the TCW Fund, or such other valuation policies and procedures as shall be mutually agreed upon by the Funds if, for example, the policies and procedures for the TCW Fund were not to address a particular holding or situation. RiverPark Fund shareholders will not be subject to U.S. federal income tax on the exchange.

 

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Q. Why has the RiverPark Board approved the Reorganization?

 

A. The RiverPark Board believes the Reorganization is in the best interest of shareholders of the RiverPark Fund. In determining to approve the Reorganization, the RiverPark Board considered, among others, the following factors:

 

    The investors in the RiverPark Fund may benefit from potential long-term economies of scale and increased distribution capabilities that may result from the consummation of the Reorganization and the RiverPark Fund’s inclusion in the larger TCW family of funds;

 

    The exchange of RiverPark Fund shares for shares of the TCW Fund in the Reorganization will not result in income, gain or loss being recognized for federal income tax purposes by an exchanging shareholder;

 

    The RiverPark Board considered the reputation, financial strength, resources and capabilities of TCW;

 

    The benefit of increased distribution capabilities available to the TCW Fund may result in asset growth over time and additional cost savings and scale advantages;

 

    The TCW Fund will retain Gargoyle Investment Advisor, L.L.C. (“Gargoyle”), the RiverPark Fund’s current sub-adviser, to serve as the TCW’s Fund’s sub-adviser, and the co-portfolio managers of the RiverPark Fund will continue to serve as the co-portfolio managers of the TCW Fund;

 

    The services available to shareholders of the TCW Fund will be substantially similar to the services available to shareholders of the RiverPark Fund; and

 

    The management fee of the TCW Fund is the same as the management fee of the RiverPark Fund and TCW has contractually agreed to waive fees or reimburse expenses to ensure that operating expenses do not exceed the current maximum levels as set forth in the expense tables herein.

For a more complete list of the factors considered by the RiverPark Board, please see “Board Consideration of the Reorganization” below.

 

Q. How do the investment objectives and strategies of the RiverPark Fund and the TCW Fund compare?

 

A. The investment objectives of the Funds are substantially identical and the investment strategies of the Funds are substantially similar. Each Fund’s investment objective is long-term capital appreciation. Each Fund invests substantially all of its assets in securities of medium-large capitalization companies and by selling index call options against its stock portfolio.

For additional information see “The Reorganization — Comparison of the Investment Objective and Strategies of the Funds” on page 8.

 

Q. How do the fundamental and non-fundamental investment restrictions of the Funds compare?

 

A. The RiverPark Fund and the TCW Fund have adopted certain fundamental investment restrictions. A Fund’s fundamental investment restrictions cannot be changed without the consent of the holders of a majority of the Fund’s outstanding voting securities (as such term is defined in the 1940 Act); other investment restrictions can be changed without such consent of the holders of a majority of the Fund’s outstanding voting securities.

While many of the Funds’ fundamental investment restrictions are substantially similar, there are differences that the RiverPark Fund shareholders should consider. In particular, the RiverPark Fund may not invest in physical commodities whereas the TCW Fund may make such investments. The RiverPark Fund may not purchase real estate mortgage loans whereas the TCW Fund may make such investments. The RiverPark Fund may only lend assets in connection with its securities lending policy whereas the TCW Fund may make loans as permitted by applicable law. The RiverPark Fund does not have a fundamental investment restriction with respect to the purchase of securities on margin whereas the TCW Fund may purchase securities on margin. The differences in fundamental and non-fundamental investment restrictions between the Funds are not expected to result in any material differences in how the respective Funds are managed. For additional information see page 41.

 

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Q. How do the risks of investing in the RiverPark Fund compare to the risks of investing in the TCW Fund?

 

A. Because both Funds invest in equity securities, they are subject to the risk that the equity markets will fluctuate and the value of the Funds’ securities may decline suddenly or over a long period of time (although the precise identification and descriptions of those risks may differ). Each Fund is subject to the risk that you could lose all or a portion of the money you invest and there is no assurance that either Fund will achieve its investment objective. Upon redemption, an investment in either Fund could be worth less than its original cost. Each Fund, by itself, does not provide a complete investment program. Because the Funds are actively managed, they are both subject to the risk that the investment strategies, techniques and risk analyses employed by the portfolio managers may not produce the desired results. The analysis of an investment by a Fund’s portfolio managers can be incorrect and could cause a Fund to underperform other funds with similar investment strategies. Also, the timing of movements from one type of investment to another could have a negative effect on the overall investment performance of either Fund. The investment style used to manage each Fund may go out of favor with the market.

For a comparison of each Fund’s principal risks, see “Risk of Investing in the Funds” on page 18.

 

Q. Who will manage the TCW Fund once the Reorganization is completed?

 

A. Following the Reorganization, TCW will serve as the investment adviser and Gargoyle will serve as the sub-adviser to the TCW Fund.

 

Q. How do the expense ratios and management fee rates of the Funds compare, and what are they estimated to be following the Reorganization?

 

A. As shown in the expense tables below, the expense ratio of shares of the TCW Fund is expected to be the same as the expense ratio of shares of the RiverPark Fund, after giving effect to the contractual expense limitation. Each Fund has contractually agreed to waive fees or reimburse expenses to ensure that operating expenses do not exceed the amounts set forth in the expense tables below. The management fee of the TCW Fund is the same as the management fee of the RiverPark Fund. Additionally, N Class shareholders of the TCW Fund will pay a distribution and service (12b-1) fee of 0.25%. Following the Reorganization, Retail Class shareholders of the RiverPark Fund will now pay this fee as N Class shareholders of the TCW Fund. Retail Class shareholders of the RiverPark Fund did not previously pay any distribution or service (12b-1) fees; however, the Retail Class shareholders of the RiverPark Fund did pay a shareholder servicing fee of up to 0.25% and an administrative servicing fee of up to 0.15% for shareholder servicing including providing shareholder accounting, client support and other services associated with maintaining shareholder accounts on various brokerage platforms but not for distribution or marketing related expenses. The TCW Fund is authorized to compensate broker-dealers and other third-party intermediaries in an amount between 0.06% and 0.16% of its average daily net assets, as approved by the TCW Board based on the TCW Fund’s asset levels, of the assets serviced for the TCW Fund by that intermediary for shareholder services.

 

Q. How do the shareholder purchase and redemption procedures of the Funds compare?

 

A. There are differences in the shareholder procedures each Fund has adopted and the services each Fund provides to its shareholders.

For more information see, “The Reorganization — Comparison of Purchase and Redemption Procedures and Exchange Rights” on page 12.

 

Q. Which TCW Fund shares will shareholders of the RiverPark Fund receive if the Reorganization occurs?

 

A. Retail Class shareholders of the RiverPark Fund will receive N Class shares of the TCW Fund in an amount equal to the aggregate net asset value (“NAV”) of the RiverPark Fund shares exchanged therefor. Institutional Class shareholders of the RiverPark Fund will receive I Class shares of the TCW Fund in an amount equal to the aggregate NAV of the RiverPark Fund shares exchanged therefor. While the RiverPark Fund has authorized Class C shares, there are no Class C shareholders outstanding as such shares are not currently being offered for sale to investors. Furthermore, the TCW Fund will not offer Class C shares.

 

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Q. What are the U.S. federal income tax consequences of the Reorganization?

 

A. In general, for U.S. federal income tax purposes, no gain or loss will be recognized by shareholders of the RiverPark Fund as a result of the Reorganization. For more information, please see “Information about the Reorganization — U.S. Federal Income Tax Consequences of the Reorganization” on page 34.

 

Q. Will dividends be affected by the Reorganization?

 

A. The Reorganization will not result in a change in dividend policy. The RiverPark Fund and the TCW Fund both generally pay any dividends and other distributions annually.

 

Q. What other changes will occur as a result of the Reorganization?

 

A. Following the Reorganization, the TCW Fund will be governed by trustees and officers who are different from the trustees and officers of the RiverPark Fund. For a list of the TCW Trust’s trustees and officers and their principal occupations for the past five years, please see the Reorganization SAI. Some of the various service providers for the RiverPark Fund are different from those of the TCW Fund. See “Comparison of Organization, Structure and Governance of the Funds — Principal Service Providers” on page 50. The RiverPark Fund also has different operating and compliance policies and procedures than those of the TCW Fund; for example, its code of ethics, brokerage placement policy, and policy regarding the selective disclosure of its portfolio holdings are different than those of the RiverPark Fund.

 

Q. How will the Reorganization affect my account?

 

A. As a result of the Reorganization, the assets and liabilities of the RiverPark Fund will be transferred to the TCW Fund, an account will be set up in the name of each RiverPark Fund shareholder with the transfer agent for the TCW Fund or with such shareholder’s broker-dealer, each RiverPark Fund shareholder will receive shares of the TCW Fund, and the RiverPark Fund will dissolve. The value of the shares of the TCW Fund each RiverPark Fund shareholder receives in the Reorganization will equal the value of the shares of the RiverPark Fund such shareholder owns immediately before the Reorganization.

 

Q. Who will bear the expenses of the Reorganization?

 

A. TCW will pay all customary costs relating to the proposed Reorganization, including the costs relating to the Special Meeting and the Proxy Statement, as described in the Reorganization Agreement. The RiverPark Fund will not incur any expenses in connection with the Reorganization. The aggregate expenses of the Reorganization to be incurred by TCW are estimated to be approximately $300,000.

 

Q. Will there be any repositioning costs for the TCW Fund?

 

A. There are not expected to be any repositioning costs for the TCW Fund in connection with the Reorganization.

 

Q. What if I do not wish to own shares of the TCW Fund?

 

A. RiverPark Fund shareholders may redeem their shares at any time before the last business day prior to the Closing Date (as defined in the Reorganization Agreement). After the Closing Date, RiverPark Fund shareholders may also redeem their shares of the TCW Fund on any day in accordance with the procedures of the TCW Fund. Such redemptions will be taxable to the shareholder if the shares are held in a taxable account and the shares are redeemed at a gain.

 

Q. Does the Reorganization require shareholder approval?

 

A. Yes, shareholder approval is required to effect the Reorganization.

 

Q. What percentage of shareholders’ votes is required to approve the Reorganization?

 

A. Approval of the Reorganization requires the affirmative vote of the holders of a majority of the shares of beneficial interest outstanding and entitled to vote. Each of the Retail Class shares and Institutional Class shares of the RiverPark Fund, respectively, will vote together as a group. Each whole share of the RiverPark Fund is entitled to one vote and each fractional share is entitled to a proportionate fractional vote, respectively.

 

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Q. How does the RiverPark Board recommend that I vote?

 

A. After careful consideration, the RiverPark Board has determined that the Reorganization is in the best interests of the RiverPark Fund and its shareholders and recommends that you vote FOR the Reorganization.

 

Q. Why do I need to vote?

 

A. Your vote is needed to ensure that a quorum is present at the Special Meeting so that the proposals can be acted upon. Your vote is also needed to determine whether the Reorganization is approved. Your immediate response on the enclosed proxy card will help prevent the need for any further solicitations for a shareholder vote. We encourage all shareholders to participate.

 

Q. I am a small investor. Why should I bother to vote?

 

A. Your vote makes a difference. If other shareholders like you fail to vote, the RiverPark Fund may not receive enough votes to go forward with the Special Meeting. If this happens, the Reorganization would be delayed, and we may need to solicit votes again.

 

Q. What if the Reorganization is not approved?

 

A. If the Reorganization is not approved by shareholders of the RiverPark Fund, it is expected that the Reorganization will not take effect and the RiverPark Fund will continue as it is currently being managed.

 

Q. When will the Reorganization occur?

 

A. We expect the Reorganization to be completed on or about June 29, 2015, or sooner, provided all of the other closing conditions, including the approval of the Reorganization by the shareholders of the RiverPark Fund, have been satisfied or waived.

 

Q. When will the Special Meeting be held?

 

A. The Shareholder Meeting is scheduled to be held at 10:00 a.m. Eastern Time on Friday, June 26, 2015, at the offices of SEI Investments Global Funds Services, located at One Freedom Valley Drive, Oaks, PA 19456.

 

Q. Who do I call if I have questions?

 

A. If you need any assistance, or have any questions regarding the Reorganization or how to vote your shares, please call Broadridge Financial Solutions (“Broadridge”), the proxy solicitor at 855-976-3323, weekdays during its business hours of 9:00 a.m. to 10:00 p.m., Eastern Time. Please have your proxy materials available when you call.

 

Q. How do I vote my shares?

 

A. You may authorize a proxy to vote by mail or on the Internet:

 

    To authorize a proxy to vote by mail, please mark, sign, date and mail the enclosed proxy card. No postage is required if mailed in the United States.

 

    To authorize a proxy to vote on the Internet, go to the Internet address provided on your proxy card and follow the instructions, using your proxy card as a guide.

 

    You may also attend the meeting and vote in person.

 

Q. Will anyone contact me?

 

A. You may receive a call from Broadridge, the proxy solicitor retained by TCW, to verify that you received your proxy materials, to answer any questions you may have about the Reorganization and to encourage you to vote your proxy. In addition to solicitation by Broadridge, representatives of the RiverPark Fund, Gargoyle and TCW, and certain financial services firms and their representatives, who will receive no extra compensation for their services, may solicit proxies by telephone, telegram, or personally.

 

 

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Your vote is very important. We encourage you to participate by returning your proxy as soon as possible, even if you plan to attend the meeting. If enough shareholders fail to cast their votes, the RiverPark Fund may not be able to hold its Special Meeting or the vote on the Reorganization could fail, which would create additional uncertainty about the future of the RiverPark Fund.

PROPOSAL 1 – APPROVAL OF THE REORGANIZATION

Summary

This summary is qualified in its entirety by reference to the additional information contained elsewhere in this Proxy Statement/Prospectus and the Reorganization Agreement relating to the Reorganization, a form of which is attached to this Proxy Statement/Prospectus as Appendix A. The materials in the exhibits and the Reorganization SAI, dated May 15, 2015, are incorporated herein by reference into this Proxy Statement/Prospectus. You should read this entire Proxy Statement/Prospectus carefully.

On March 20, 2015, the RiverPark Board, on behalf of the RiverPark Fund, approved the Reorganization Agreement with respect to the RiverPark Fund. The Reorganization Agreement provides for:

 

    the transfer of all of the assets of the RiverPark Fund to the TCW Fund;

 

    the assumption by the TCW Fund of all of the liabilities of the RiverPark Fund;

 

    the issuance of N Class shares of the TCW Fund to holders of the Retail Class shares of the RiverPark Fund;

 

    the issuance of I Class shares of the TCW Fund to holders of the Institutional Class shares of the RiverPark Fund; and

 

    the complete liquidation of the RiverPark Fund (only upon completion of the Reorganization).

If the Reorganization is approved by a majority of the holders of beneficial interest (hereinafter referred to as the “shareholders”) of the RiverPark Fund, the Reorganization is expected to be effective upon the close of business on June 26, 2015, or on such other date as the parties may agree (the “Closing”). As a result of the Reorganization, each Retail Class shareholder of the RiverPark Fund will become a shareholder of N Class shares of the TCW Fund and each Institutional Class shareholder of the RiverPark Fund will become a shareholder of I Class shares of the TCW Fund.

Each shareholder of the RiverPark Fund will hold, immediately after the Closing, N Class shares or I Class shares of the TCW Fund, as applicable, having an aggregate value equal to the aggregate value of the Retail Class or Institutional Class shares of the RiverPark Fund, as applicable, held by that shareholder as of the close of business on the business day of the Closing.

The RiverPark Board believes that the Reorganization will provide shareholders of the RiverPark Fund with the ability to invest in a fund with a substantially identical investment objective and substantially similar investment strategies. The investors in the RiverPark Fund may benefit from potential long-term economies of scale and increased distribution capabilities that may result from the consummation of the Reorganization and the RiverPark Fund’s inclusion in the larger TCW family of funds.

The Reorganization will allow the RiverPark Fund’s shareholders to continue to participate in a professionally-managed portfolio which seeks to achieve long-term capital appreciation through investments in equity securities of companies and by selling index call options against its stock portfolio.

It is a condition to the Reorganization that each Fund receive an opinion from counsel to the TCW Fund that the Reorganization will qualify for U.S. federal income tax purposes as a tax-free reorganization under Section 368 of the Code. Accordingly, neither the Funds nor their shareholders will recognize any gain or loss from the Reorganization for U.S. federal income tax purposes. At any time prior to the Reorganization, a shareholder may redeem shares of the RiverPark Fund. Any such redemption will result in the recognition of

 

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taxable gain or loss by the shareholder for U.S. federal income tax purposes if the shareholder holds the shares in a taxable account. Immediately prior to the Reorganization, the RiverPark Fund will pay a dividend or dividends which, together with all previous dividends, will have the effect of distributing to its shareholders all of the RiverPark Fund’s investment company taxable income for taxable years ending on or prior to the Reorganization (computed without regard to any deduction for dividends paid) and all of its net capital gain, if any, realized in taxable years ending on or prior to the Reorganization (including any gains from sales of holdings prior to the Reorganization), after reduction by any available capital loss carryovers. Such dividends will be included in the taxable income of the RiverPark Fund’s shareholders that hold shares in a taxable account.

As of the date of this Proxy Statement/Prospectus the RiverPark Fund had no capital loss carryovers.

The Reorganization Agreement relating to the Reorganization requires the satisfaction of a number of conditions, including the approval of the Reorganization by the shareholders of the RiverPark Fund, and may be terminated at any time by a determination of either the RiverPark Board or the Board of Trustees of the TCW Trust (the “TCW Board”) that the Reorganization is no longer in the best interests of shareholders.

In connection with the Reorganization, you should note that:

 

    The RiverPark Fund shareholders will have an aggregate NAV equal to the aggregate NAV of such shareholder’s interest in the RiverPark Fund as of the business day before the Closing, as determined using the TCW Fund’s valuation policies and procedures, or such other valuation policies and procedures as shall be mutually agreed upon by the Funds if, for example, the policies and procedures for the TCW Fund were not to address a particular holding or situation.

 

    Each RiverPark Fund shareholder will have voting rights and other rights generally similar to those that such shareholder currently has, but as shareholders of the TCW Fund.

 

    The Funds have substantially identical investment objectives and substantially similar investment strategies.

 

    RiverPark, 156 West 56th Street, 17th Floor, New York, NY 10011, is the investment adviser for the RiverPark Fund. Gargoyle, 285 Grand Avenue, Building One, Englewood, NJ 07631, is the sub-adviser for the RiverPark Fund. Two individuals at Gargoyle share primary responsibility for managing the RiverPark Fund: Joshua B. Parker and Alan L. Salzbank. TCW, 865 South Figueroa Street, Suite 1800, Los Angeles, CA 90017, is the investment adviser for the TCW Fund. Following the Reorganization, TCW will serve as the investment adviser, Gargoyle will serve as the investment sub-adviser and Messrs. Parker and Salzbank will serve as co-portfolio managers to the TCW Fund.

 

    The expense ratio of shares of the TCW Fund is expected to be the same as the expense ratio of shares of the RiverPark Fund, after giving effect to the contractual expense limitation. Each Fund has contractually agreed to waive fees or reimburse expenses to ensure that operating expenses do not exceed the amounts set forth in the expense tables herein. Any waivers and/or reimbursements that are subject to repayment from the RiverPark Fund will carry over to the TCW Fund following the Reorganization. The management fee of the TCW Fund is the same as the management fee of the RiverPark Fund. Additionally, N Class shareholders of the TCW Fund will pay a distribution and service (12b-1) fee of 0.25%. Following the Reorganization, Retail Class shareholders of the RiverPark Fund will now pay this fee as N Class shareholders of the TCW Fund. Retail Class shareholders of the RiverPark Fund did not previously pay any distribution or service (12b-1) fees; however, the Retail Class shareholders of the RiverPark Fund did pay a shareholder servicing fee of up to 0.25% and an administrative servicing fee of up to 0.15% for shareholder servicing including providing shareholder accounting, client support and other services associated with maintaining shareholder accounts on various brokerage platforms but not for distribution or marketing related expenses. The TCW Fund is authorized to compensate broker-dealers and other third-party intermediaries in an amount between 0.06% and 0.16% of its average daily net assets, as approved by the TCW Board based on the TCW Fund’s asset levels, of the assets serviced for the TCW Fund by that intermediary for shareholder services.

 

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In considering whether to approve the Reorganization, the RiverPark Board compared the material attributes of the RiverPark Fund and the TCW Fund. The RiverPark Board reviewed whether the post-reorganization advisory, distribution and other major service arrangements are consistent with the best interests of shareholders. The RiverPark Board considered the following facts: the interests of shareholders will not be diluted; the investment objectives of the RiverPark Fund and the TCW Fund are substantially identical and the investment strategies are substantially similar; no sales charges will be imposed in connection with the transaction; the transaction will be free from U.S. federal income taxes; and the transfer of assets in exchange for shares will be at relative NAV.

In addition, the RiverPark Board considered: (i) that Gargoyle would be serving as the sub-adviser to the TCW Fund and that, therefore there would be continuity in the portfolio management; (ii) the management fees are the same for the RiverPark Fund and the TCW Fund; (iii) the reputation, financial strength, resources and capabilities of the investment adviser for the TCW Fund, as well as the reputation and experience of the TCW Fund’s third-party service providers; and (iv) the differences in the distribution, account maintenance and account servicing fees from those fees currently borne by RiverPark Fund shareholders and observed that the TCW Fund would pay a distribution fee with respect to the N Class shareholders of the TCW Fund.

After reviewing the foregoing factors, the RiverPark Board, in their business judgment, determined that the Reorganization is in the best interests of the RiverPark Fund’s shareholders and that the interests of the RiverPark Fund’s existing shareholders will not be diluted as a result of the Reorganization.

Comparison of the Investment Objectives and Strategies of the Funds

The Funds have substantially identical investment objectives and substantially similar investment strategies. Because the Funds are part of unaffiliated fund families, the Funds use different terminology and descriptions to describe their principal investment strategies and investment processes. Below is a discussion of the investment objective, principal investment strategies and investment processes of the Funds.

 

RiverPark Fund

  

TCW Fund

Investment Objective
The Fund seeks long-term capital appreciation while exposing investors to less volatility than in a stand-alone stock portfolio.    The Fund seeks long-term capital appreciation with lower volatility than a stand-alone stock portfolio.
Principal Investment Strategies
The Fund seeks long-term capital appreciation while exposing investors to less risk than a stand-alone stock portfolio by combining two investment strategies. First, the Fund intends to invest 100% of its net assets in equity securities of medium-large capitalization companies (the “Stock Portfolio”) that Gargoyle, the Fund’s sub-adviser, believes are attractively priced relative to medium-large capitalization stocks generally. The Fund considers companies in excess of $1.5 billion to be medium-large capitalization companies. The equity securities in which the Fund invests are primarily common stocks. The Fund invests primarily in the securities of U.S. companies, but it may also invest in securities of issuers outside of the U.S. Second, the Fund sells index call options (the “Options Portfolio”) against the Stock Portfolio in an effort to increase the Fund’s income, reduce the volatility of its returns and, in    Under normal market conditions, the Fund seeks to achieve its investment objective by investing substantially all of its net assets in equity securities of medium-large capitalization companies (the “Stock Portfolio”) that Gargoyle (the “Sub-Adviser”) believes are attractively priced relative to medium-large capitalization stocks generally and by selling index call options against the Stock Portfolio (the “Options Portfolio”) to partially hedge the Stock Portfolio, reduce volatility and improve reward/risk of the Stock Portfolio. The Stock Portfolio as a whole serves as the underlying securities, and a basket of index call options are written (sold) in place of individual equity options. While the Sub-Adviser views the Fund as one integrated portfolio in its effort to achieve the Fund’s stated investment objective, the Stock Portfolio and the Options

 

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RiverPark Fund

  

TCW Fund

general, improve the reward/risk of the Stock Portfolio. The Fund seeks to maintain an overall net long market exposure of between 35% and 65%, as such is determined by Gargoyle taking into account the expected future beta of the Stock Portfolio and the effects of changing option volatility.   

Portfolio investment approaches can be viewed independently.

 

The Fund considers the largest 1000 companies by market capitalization (companies with market capitalizations over $3.3 billion as of the date of the TCW Fund Prospectus, without limit for large companies) to be medium-large capitalization companies. The equity securities in which the Fund invests are primarily common stocks. The Fund invests primarily in the securities of U.S. companies, but it may also invest in securities of issuers outside of the U.S. Typically, the Fund only invests in a non-U.S. issuer via shares of that issuer listed on a U.S. stock exchange.

Investment Process

Gargoyle’s investment approach involves modifying and combining what it believes are two time-proven investment strategies—value investing and option buy-writing. Option buy-writing is a strategy that involves owning the underlying securities and writing (selling) call options on such underlying securities. In the Fund’s case, the Stock Portfolio as a whole serves as the underlying securities and a basket of index call options are written (sold) in place of individual equity options. While Gargoyle views the Fund as one integrated portfolio with the goal of achieving its stated objective, the Stock Portfolio and Options Portfolio investment approaches can be viewed independently.

 

Gargoyle periodically, and at least monthly, statistically analyzes approximately 2,500 U.S.-listed companies. For each company, Gargoyle compares a number of fundamental ratios, such as the price-to-earnings ratio and the price-to-sales ratio, against both that company’s historic average for each such ratio as well as the applicable industry’s current average for each such ratio. The goal is not to discover the companies with the lowest ratios on an absolute basis but rather to discover those companies whose current fundamental ratios are low relative to their own historic ratios and their industry’s current ratios. Based upon these comparisons, and using a proprietary algorithm, each company is assigned a number – its “JScore” – which is the percentage of “fair market value” at which Gargoyle believes each such company is trading.

 

While Gargoyle analyzes approximately 2,500 companies, it limits the universe of candidates for inclusion in the Stock Portfolio to those with the largest market capitalization (typically the largest 1,000 companies). These companies are then divided into

  

In constructing the Stock Portfolio, the Sub-Adviser periodically, and at least monthly, statistically analyzes approximately 2,500 U.S.-listed companies with the largest market capitalizations. For each company, the Sub-Adviser compares a number of fundamental ratios, such as the price-to-earnings ratio and the price-to-sales ratio, against both the company’s historic average as well as the applicable industry’s current average for each such ratio. The goal is to identify those companies whose current fundamental ratios are low relative to their own historic ratios and their industry’s current ratios rather than to identify companies with the lowest ratios on an absolute basis. Based upon these comparisons and through the use of a proprietary algorithm, each company is assigned a number (referred to as the “JScore”), which is the percentage of “fair market value” at which the Sub-Adviser believes each such company is trading.

 

While the Sub-Adviser analyzes approximately 2,500 companies, it limits the universe of candidates for inclusion in the Stock Portfolio to those with the largest market capitalization, as described above. Based on the JScores, these companies are then divided into three groups: a company with a JScore substantially below 95% is a “buy” candidate, a company with a JScore below, but not significantly below, 95% is a “hold” candidate, and a company with a JScore above 95% is considered a “Sell” candidate. With respect to “buy” candidates, the Fund will generally purchase a “buy” candidate if the Fund has additional capital to invest, subject to certain subjective criteria and risk considerations, such as the limitations as to Fund investment in a

 

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RiverPark Fund

  

TCW Fund

three groups. A company with a JScore substantially below 100% is a “buy” candidate. Assuming the Fund has additional capital to invest, based upon certain subjective criteria and subject to risk considerations that limit the amount that the Fund may invest in any one company, sub-industry, industry group, industry or sector, the Fund will purchase a “buy” candidate. A company with a JScore below, but not significantly below, 100% is a “hold.” If the Fund does not own a “hold” stock, it will not buy it; if the Fund already owns a “hold” stock, it will not sell it, unless, pursuant to a proprietary algorithm and in consideration of potential tax consequences, it determines that the position should be reduced or fully liquidated. Finally, any company with a JScore above 95% is considered a “Sell” candidate. The Fund will generally (subject to certain tax considerations) sell companies that are “sell” candidates in order to meet redemptions or to provide funds to purchase “buy” candidates.

 

The second prong of the Fund’s investment strategy is to partially hedge the Stock Portfolio by selling index call options. Throughout each month, Gargoyle, using proprietary software, determines the “best” basket of indexes on which to sell call options. In determining the best basket, Gargoyle considers (1) the degree to which a basket, on an historical basis, would have most closely replicated, on a statistical basis, the performance of the stocks in the current Stock Portfolio and (2) at times, which indexes have the most relatively overvalued options from an options valuation perspective. Based upon other proprietary software and the experience and judgment of Gargoyle’s portfolio managers, it then typically sells near-term index call options with strike prices near the index’s current value such that the combined net long market exposure of the long Stock Portfolio and the short Options Portfolio is approximately 50%, as such is determined by Gargoyle taking into account the expected future beta of the Stock Portfolio and the effects of changing option volatility.

 

As a seller of index call options, the Fund is paid for assuming the risk of an index closing above a pre-set price (the “strike price”) on expiration (or on any date before its expiration date that the purchaser elects to exercise its option(s)). As part of its determination of the best combination of options, Gargoyle strives to sell call options so that each month the total sales proceeds exceeds 1-1/2% of the Fund’s net asset value (for a “total” of 18% per year). Barring early exercise and ignoring intra-month adjustments to the Options Portfolio, any time that an index closes on expiration at or below the selected strike prices, the Fund realizes the

  

single company, industry or sector. With respect to “hold” candidates, if the Fund does not already own a “hold” candidate, the Fund will generally not buy the “hold” candidate; and if the Fund already owns the “hold” candidate, the Fund will generally not sell the “hold” candidate unless, pursuant to a proprietary algorithm and in consideration of potential tax consequences, it determines that the Fund’s current holding in the “hold” candidate should be reduced or fully liquidated. With respect to “sell” candidates, the Fund will generally, subject to certain tax considerations, sell its current holding of a “sell” candidate in order to meet redemption requests or to provide funds to purchase “buy” candidates.

 

The second prong of the Fund’s investment strategy is to sell index call options against the Stock Portfolio in an effort to increase the Fund’s income, reduce the volatility of its returns and, in general, improve the reward/risk of the Stock Portfolio. In constructing the Options Portfolio, throughout each month, the Sub-Adviser, using proprietary software, determines the “best” basket of indexes on which to sell index call options based on considerations of (1) the degree to which a basket, on a historical basis, would have most closely replicated, on a statistical basis, the performance of the stocks in the current Stock Portfolio (the specific contents of the Stock Portfolio are not relevant to this consideration) and (2) the times at which indexes have the most relatively overvalued options from an options valuation perspective. Between these two considerations, the historical correlation of the basket takes precedence over valuation. Based upon other proprietary software and the experience and judgment of the Sub-Adviser’s portfolio managers, it then typically sells short-term index call options with exercise prices near the index’s current value such that the combined net long market exposure of the long Stock Portfolio and the short Options Portfolio is approximately 50%. This net figure is determined by considering the long exposure of the Stock Portfolio to be 100%. The Options Portfolio is targeted to be sufficiently short so as to reduce the overall Fund market exposure to a net long 50% (after adjustment for the portfolio managers’ subjective judgment as to the future beta of the Stock Portfolio, essentially meaning its expected correlation to market movements).

 

The Sub-Adviser aims for the Fund to have, on an options-adjusted basis, a 50% net long market exposure. The Sub-Adviser monitors the Fund’s net

 

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RiverPark Fund

  

TCW Fund

entire 1-1/2%. Barring early exercise and ignoring intra-month adjustments to the Options Portfolio, any month that an index closes on expiration above the strike price, the Fund will be liable to pay, for each option sold, $100 for each point the index exceeds the strike price. Against this liability, (1) the Fund has received the proceeds from the sale of the index call options and (2) the Stock Portfolio, which as a diversified portfolio of stocks, may reasonably be expected to have appreciated with the market. Of course, there can be no guarantee of such returns, or of any positive returns, in any given month.

 

Gargoyle strives for the Fund to have, on an options-adjusted basis, a 50% net long market exposure. This number—the net long market exposure—is monitored continually. As long as the net long market exposure of the Fund stays sufficiently constant (which is currently defined as a net long market exposure of between 35% and 65%), Gargoyle, in general, does not adjust the net exposure of the Options Portfolio between expirations. Gargoyle may take advantage of flows both in and out of the Fund when trading the Option Portfolio to alter the net long market exposure of the Fund. Additionally, if, due to market conditions, the Fund’s net long market exposure falls outside the risk parameters then in place, Gargoyle will periodically adjust the Options Portfolio with the goal to bring the Fund back within those parameters. To the extent that Gargoyle determines to roll the Options Portfolio forward (i.e., hedge the Stock Portfolio by using the next most near-term month’s options), the Fund maintains its call-selling bias.

 

Investors should note that, although Gargoyle will endeavor to sell near-term index call options, the Fund may implement other options strategies to hedge the Stock Portfolio, such as selling index call options other than near-term options, purchasing put options (on a stock, a sector index or a market index) or selling call options on individual stocks or sector indexes.

  

long market exposure continually and does not generally adjust the net exposure of the Options Portfolio between expirations if the net long market exposure stays between the risk parameters then in place (currently between 35% and 65%). If due to market conditions, the Fund’s net long market exposure falls outside the risk parameters then in place, the Sub-Adviser will periodically adjust the Options Portfolio with the goal to bring the Fund back within those parameters. To the extent that the Sub-Adviser determines to roll the Options Portfolio forward on or before expiration, the Fund will endeavor to maintain an Options Portfolio of short call options.

 

As part of its determination of the best combination of options, the Sub-Adviser strives to sell index call options so that each month the total premium received for the index call options exceeds 1.5% of the Fund’s net asset value (for a total of 18% per year). The premium, the exercise price and the value of the index underlying an index call option determine the gain or loss realized by the Fund as the seller of the index call option, and there can be no guarantee of any positive returns in any given month.

 

Although the Sub-Adviser will endeavor to sell short-term index call options, the Fund may implement other options strategies to hedge the Stock Portfolio, such as selling index call options other than short-term options, purchasing put options (on a stock, a sector index or a market index), or selling call options on individual stocks or sector indexes.

 

The Fund may invest up to 15% of its net assets in illiquid securities. The Fund may also effect short sales of securities. The Fund may not sell a security short if, as a result of that sale, the current value of securities sold short by that Fund would exceed 10% of the value of the Fund’s net assets. However, short sales effected “against the box” to hedge against a decline in the value of a security owned by the Fund are not subject to this 10% limitation.

Other Information about the Funds and their Non-Principal Investment Strategies

Securities Lending – The Fund may lend its securities to broker-dealers and other institutions to earn additional income, in an amount not to exceed 10% of the Fund’s net assets.

 

Illiquid Securities – The Fund may invest up to 15% of its net assets in illiquid securities, including repurchase agreements maturing in more than seven days. However, the Fund may not invest more than 10% of its net assets in such repurchase agreements.

 

   The Fund may use certain types of investments and investing techniques that are described in more detail in its statement of additional information. In response to adverse market, economic, political, or other conditions, the Fund may, from time to time, take temporary defensive positions by investing a substantial part of its assets in high quality short-term money market instruments. To the extent that the Fund assumes a temporary defensive position, it may not achieve its investment objective during that time.

 

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RiverPark Fund

  

TCW Fund

Temporary or Defensive Positions – During periods of adverse market or economic conditions or when, in the opinion of the Adviser or sub-adviser, certain abnormal or extraordinary circumstances exist, the Fund may, as a temporary or defensive measure, invest all or a substantial portion of its assets in high quality, fixed income securities, money market instruments, or cash or cash equivalents, including investment grade short-term obligations. Investment grade obligations include securities issued or guaranteed by the U.S. Government, its agencies and instrumentalities, as well as securities rated in one of the four highest rating categories by at least two nationally recognized statistical rating organizations rating that security. The Fund will not be pursuing its investment objectives in these circumstances.   

Comparison of Purchase and Redemption Procedures and Exchange Rights

Purchase Procedures

The purchase procedures of the RiverPark Fund and the TCW Fund are substantially similar, in that shares of the Funds may be purchased directly from the Fund, as well as through financial intermediaries.

The RiverPark Fund offers two classes of shares, Retail Class shares and Institutional Class shares. The TCW Fund offers two classes of shares, N Class and I Class shares. Shares of the RiverPark Fund may be purchased by mail, telephone or wire. Shares of the TCW Fund may be purchased by mail, telephone or via an exchange.

The minimum initial investment in the RiverPark Fund’s Retail Class Shares is $1,000. The minimum initial investment for the RiverPark Fund’s Institutional Class Shares is $100,000. The RiverPark Fund reserves the right to vary or waive the minimum in certain situations. There is no minimum investment requirement for subsequent investments if mailed by check. Subsequent purchases by telephone are subject to a minimum of $100. The RiverPark Fund reserves the right to transfer shares, on a tax-free basis, from Institutional Class shares to Retail Class shares, if such shareholder’s account falls below the minimum.

Shares of the RiverPark Fund may also be purchased through certain brokers or other financial intermediaries, which may impose transaction fees and other charges. These fees and charges are not imposed by the RiverPark Fund. Shares of the RiverPark Fund have not been registered for sale outside of the United States. The RiverPark Fund generally does not sell shares to investors residing outside the United States, even if they are United States citizens or lawful permanent residents, except to investors with United States military APO or FPO addresses.

The following table provides the TCW Fund’s minimum initial and subsequent investment requirements for each share class. The minimums may be reduced or waived in some cases. The TCW Fund will waive all minimum initial investment requirements in connection with those shares issued pursuant to the Reorganization.

 

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Regular Purchases

 

Type of Account

   Minimum Initial
Investment
     Minimum Subsequent
Investments
 

Class N:

     

Regular

   $ 5,000       $ 0   

Individual Retirement Account (“IRA”)

   $ 1,000       $ 0   

Automatic Investment Plan

   $ 5,000       $ 100   

Class I:

     

Regular accounts

   $ 1,000,000       $ 25,000   

The TCW Trust and its transfer agent reserve the right to reject any order and to waive the minimum investment requirements for investments through certain fund networks or other financial intermediaries and for employees and affiliates of TCW or the TCW Trust. In such cases, the minimums associated with the policies and programs of the fund network or other financial intermediary will apply. (In certain cases, the fund network or other financial intermediary also may waive its minimum investment requirements; TCW occasionally may be involved in the fund network or other financial intermediary’s decision to waive its minimum investment requirements, but does not control that decision.) This means that investors through various financial intermediaries may face different (or even substantially reduced) investment minimums than those affecting your investment. The TCW Fund reserves the right to redeem accounts inadvertently opened with less than the minimum initial investment. The TCW Fund at its sole discretion may impose an annual $25 account servicing fee for below minimum accounts; certain below minimum accounts may not be charged that servicing fee.

By Payment In Kind

In certain situations, TCW Fund shares may be purchased by tendering payment in kind in the form of securities. Any securities used to buy TCW Fund shares must be readily marketable, their acquisition consistent with the TCW Fund’s objective and otherwise acceptable to TCW. Prior to making such a purchase, you should call TCW to determine if the securities you wish to use to make a purchase are appropriate. The TCW Fund reserves the right to reject the offer of any payment in kind.

By Automatic Investment Plan

Once an account has been opened, you can make additional purchases of shares of the TCW Fund through an automatic investment plan. The automatic investment plan is only available for Class N shares. The automatic investment plan provides a convenient method to have monies deducted directly from your bank account for investment into the TCW Fund. You can make automatic monthly, quarterly or annual purchases of $100 or more into the TCW Fund as designated on your account application. The TCW Fund may alter, modify or terminate the automatic investment plan at any time.

Purchases Through an Investment Broker or Dealer

You may buy and sell shares of the TCW Fund through certain brokers (and their agents) that have made arrangements with the TCW Fund to sell its shares. When you place your order with such a broker or its authorized agent, your order is treated as if you had placed it directly with the transfer agent, and you will pay or receive the next price calculated by the TCW Fund. The broker (or agent) holds your shares in an omnibus account in the broker’s (or agent’s) name, and the broker (or agent) maintains your individual ownership records. The TCW Fund may pay the broker or its agent for maintaining these records as well as providing other shareholder services. The broker (or its agent) may charge you a fee for handling your order. The broker (or agent) is responsible for processing your order correctly and promptly, keeping you advised regarding the status of your individual account, confirming your transactions and ensuring that you receive copies of the TCW Fund’s prospectus.

 

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Current and prospective investors purchasing shares of the TCW Fund through a broker-dealer should be aware that a transaction charge may be imposed by broker-dealers that make the TCW Fund’s shares available, and there will not be such a transaction charge if shares of the TCW Fund are purchased directly from the TCW Fund.

Net Asset Value and Fair Value Pricing

RiverPark Fund

The price of RiverPark Fund’s shares is based on the RiverPark Fund’s net asset value. The net asset value of shares of the RiverPark Fund is calculated by dividing the value of the RiverPark Fund’s net assets by the number of the RiverPark Fund’s outstanding shares. The net asset value takes into account the fees and expenses of the RiverPark Fund, including management, administration and other fees, which are accrued daily. The price at which a purchase or redemption is effected is based on the net asset value next computed after the RiverPark Fund or its agents receive your request in good order. All requests received in good order before 4:00 p.m. Eastern Time or the closing of the New York Stock Exchange (the “NYSE”), whichever occurs earlier (the “cut off time”), will be executed at the net asset value computed on that same day. Requests received after the cut off time (except for requests made in accordance with existing laws on behalf of certain retirement accounts and other omnibus accounts (such as 401(k), 403(b), 457, Keogh, Profit Sharing Plans, Money Purchase Pension Plans, accounts held under trust agreements at a trust institution, accounts held at a brokerage, or “Fund Supermarkets”) will receive the next business day’s net asset value. In computing net asset value, portfolio securities of the RiverPark Fund are valued at their current market values determined on the basis of market quotations. If market quotations are not readily available, securities are valued at fair value as determined in good faith through the consideration of other factors in accordance with procedures established by, and under the general supervision of, the RiverPark Board. The RiverPark Fund will use fair value pricing where: (i) a security is illiquid (restricted securities and repurchase agreements maturing in more than seven days); (ii) the market or exchange for a security is closed on an ordinary trading day and no other market prices are available; (iii) the security is so thinly traded that there have been no transactions in the security over an extended period; or (iv) the validity of a market quotation received is questionable. In addition, fair value pricing will be used if emergency or unusual situations have occurred, such as when trading of a security on an exchange is suspended; or when an event occurs after the close of the exchange on which the security is principally traded that is likely to have changed the value of the security before the net asset value is calculated (applicable to foreign securities). Valuing securities at fair value involves greater reliance on judgment than securities that have readily available market quotations. There can be no assurance that the RiverPark Fund could obtain the fair value assigned to a security if it were to sell the security at approximately the time at which the RiverPark Fund determines its net asset value per share.

In computing the net asset value per share, the RiverPark Fund values foreign securities at the latest closing price on the exchange on which they are traded immediately prior to the closing of the NYSE. The RiverPark Fund is expected to limit its investment in foreign securities to options on depositary receipts which are traded on a U.S. exchange. Some foreign currency exchange rates may also be determined at the latest rate prior to the closing of the NYSE. Foreign securities quoted in foreign currencies are translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar, as provided by an approved pricing service. Occasionally, events that affect these values and exchange rates may occur between the times at which they are determined and the closing of the NYSE. If these events materially affect the value of portfolio securities, these securities will be valued at their fair value as determined in good faith by the RiverPark Board.

TCW Fund

The NAV per share is the value of the TCW Fund’s assets, less its liabilities, divided by the number of shares of the TCW Fund outstanding. The value of the TCW Fund’s portfolio securities is determined on the basis of the market value of such securities or, if market quotations are not readily available, at fair value under

 

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guidelines established by the TCW Board. Short-term investments maturing in less than 60 days are valued at amortized cost which the TCW Board have determined to equal fair value. Securities and other assets for which reliable market quotations are not readily available will be valued at their fair value as determined by the TCW or Gargoyle under the guidelines established by, and under the general supervision and responsibility of, the TCW Board. TCW may determine the fair value for securities that are thinly traded, illiquid, or where TCW believes that the prices provided by a pricing service are not accurate or are not available. Fair value pricing is intended to be used as necessary in order to accurately value the TCW Fund’s portfolio securities and their respective net asset values. The Reorganization SAI further describes the most common techniques used by the TCW Fund to fair value its securities.

The daily NAV may not reflect the closing market price for all futures contracts held by the TCW Fund because the markets for certain futures will close shortly after the time net asset value is calculated. See “Determination of Net Asset Value” in the Reorganization SAI for further information.

Redemption Procedures

The redemption procedures for the RiverPark Fund and the TCW Fund are substantially similar. Shareholders may redeem shares of the Funds on any day that the New York Stock Exchange (the “NYSE”) is open for business. Both of the Funds allow redemptions of shares from the respective Fund by mail or telephone.

Under unusual circumstances, the RiverPark Fund may suspend redemptions or postpone payment for up to seven days or longer, as permitted by applicable law. The RiverPark Fund reserves the right to close your account in the RiverPark Fund if as a result of one or more redemptions the account value has remained below $1,000 for thirty days or more. You will receive sixty days’ written notice to increase the account value before the account is closed. Although in unusual circumstances the RiverPark Fund may pay the redemption amount in-kind through the distribution of portfolio securities, they are obligated to redeem shares solely in cash, up to the lesser of $250,000 or 1% of the RiverPark Fund’s total net assets during any ninety-day period for any one shareholder.

You may redeem shares of the TCW Fund at any time by regular or overnight mail to the TCW transfer agent or selected brokers, dealers and other qualified institutions.

If you own or are purchasing shares of the TCW Fund having a current value of at least $10,000 for Class N and $100,000 for Class I, you may participate in a systematic withdrawal plan. The systematic withdrawal plan provides for automatic redemptions for Class N of at least $100 on a monthly, quarterly, semi-annual or annual basis via Automatic Clearing House (ACH).

You may redeem TCW Fund shares by telephone and have the proceeds wired to the bank account as stated on the transfer agent’s records. You may also exchange shares by telephone (see below).

The TCW Fund may redeem all of your shares at net asset value (calculated on the preceding business day) if the balance of your account falls below a certain minimum amount as a result of a transfer or redemption (and not market fluctuations). The minimum amount is $500 for Class N shares and $1 million for Class I shares. The TCW Fund will notify you in writing and you will have 60 days to increase your account balance before your shares are redeemed.

The RiverPark Fund offers an automatic investment plan, telephone investment plan, systematic cash withdrawal plan and automatic reinvestment plan. The TCW Fund offers an automatic investment plan and a systematic withdrawal plan.

Both Funds may require a signature guarantee for certain redemptions.

 

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The Funds do not impose redemption fees.

Currently, the RiverPark Fund reserves the right, in its sole discretion, to identify trading practices as abusive. The RiverPark Fund may deem the sale of all or a substantial portion of a shareholder’s purchase of fund shares to be abusive. In addition, the RiverPark Fund reserves the right to reject purchase and exchange requests by any investor or group of investors for any reason without prior notice, including, in particular, if the RiverPark Fund or RiverPark reasonably believes that the trading activity would be harmful or disruptive to the RiverPark Fund.

The RiverPark Fund monitors selected trades in an effort to detect excessive short-term trading activities. If, as a result of this monitoring, the RiverPark Fund believes that a shareholder has engaged in excessive short-term trading, it may, in its discretion, ask the shareholder to stop such activities or refuse to process purchases or exchanges in the shareholder’s accounts other than exchanges into a money market fund. In making such judgments, the RiverPark Fund seeks to act in a manner that it believes is consistent with the best interests of shareholders.

The TCW Fund reserves the right to reject any telephone redemption or exchange request and the redemption or exchange privilege may be modified or terminated at any time on 30-days’ notice to shareholders.

The TCW Fund is not intended to serve as vehicles for frequent trading activity because such trading may disrupt management of the TCW Fund. In addition, such trading activity can increase expenses as a result of increased trading and transaction costs, forced and unplanned portfolio turnover, lost opportunity costs, and large asset swings that decrease the TCW Fund’s ability to provide maximum investment returns to all shareholders. In addition, certain trading activity that attempts to take advantage of inefficiencies in the valuation of the TCW Fund’s securities holdings may dilute the interests of the remaining shareholders. This in turn can have an adverse effect on the TCW Fund’s performance.

The TCW Trust reserves the right to refuse any purchase or exchange request that could adversely affect the TCW Fund or its operations, including those from any individual or group who, in the TCW Trust’s view, is likely to engage in excessive material trading. If a purchase or exchange order into shares of the TCW Fund is rejected, the potential investor will not benefit from any subsequent increase in the net asset value of the TCW Fund. Future purchases into the TCW Fund may be barred if a shareholder effects more than one round trip in shares of the TCW Fund (meaning exchanges or redemptions following a purchase) in excess of certain de minimis limits within a 30 day period.

Exceptions to these trading limits may be made only upon approval of the TCW Trust’s Chief Compliance Officer, and such exceptions are reported to the TCW Board on a quarterly basis. This policy may be revised from time to time by the officers of the TCW Trust in consultation with the TCW Board without prior notice.

These restrictions do not apply to certain asset allocation programs (including mutual funds that invest in other mutual funds for asset allocation purposes, and not for short-term trading), to omnibus accounts (except to the extent noted in the next paragraph) maintained by brokers and other financial intermediaries (including 401(k) or other group retirement accounts, although restrictions on TCW Fund share transactions comparable to those set forth in the previous paragraph have been applied to the TCW’s retirement savings program), and to involuntary transactions and automatic investment programs, such as dividend reinvestment, or transactions pursuant to the TCW Fund’s systematic investment or withdrawal program.

In an attempt to detect and deter excessive trading in omnibus accounts, the TCW Trust or its agents may require intermediaries to impose restrictions on the trading activity of accounts traded through those intermediaries. The TCW Fund’s ability to impose restrictions with respect to accounts traded through particular intermediaries may vary depending on the systems capabilities, applicable contractual and legal restrictions, and cooperation of those intermediaries. The TCW Trust, however, cannot always identify or reasonably detect

 

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excessive trading that may be facilitated by financial intermediaries or made difficult to identify through the use of omnibus accounts by those intermediaries that transmit purchase, exchange and redemption orders to the TCW Fund, and thus the TCW Fund may have difficulty curtailing such activity.

In addition, the TCW Trust reserves the right to

 

    change or discontinue its exchange privilege, or temporarily suspend this privilege during unusual market conditions, to the extent permitted under applicable SEC rules; and

 

    delay sending out redemption proceeds for up to seven days (generally only applies in cases of large redemptions, excessive trading or during unusual market conditions).

Exchange Rights

RiverPark Fund shareholders may exchange some or all of their shares of the RiverPark Fund for shares of the same class of one of the other RiverPark funds. RiverPark shareholders may do this through their financial intermediary, or by telephone or mail. Once an exchange request has been placed by telephone or mail, it is irrevocable and may not be modified or canceled. Exchanges are made on the basis of the relative net asset values of the shares being executed next determined after an exchange request is received. An exchange is a taxable transaction for Federal income tax purposes. RiverPark shareholders are limited to five exchanges per calendar year. The exchange privilege may be modified or discontinued at any time by the RiverPark Trust upon sixty days’ notice.

RiverPark Fund shareholders may convert Retail Class shares into Institutional Class shares if the value of the investment in the RiverPark Fund is at least $100,000. If the value of the investment in the RiverPark Fund falls below $100,000, the RiverPark Fund may convert a shareholder’s Institutional Class shares into Retail Class shares. The transaction will be based on the relative net asset values of the respective securities to be exchanged on the trade date for the conversion. For U.S. federal income tax purposes, such a conversion is not a taxable event.

You are permitted to convert shares between Class N and Class I of the TCW Fund, provided that your investment meets the minimum initial investment and any other requirements in the other class, and that the shares of the other class are eligible for sale in your state of residence. Further information about conversion of shares between classes may be found in the SAI.

Distribution of the Funds

SEI Investments Distribution Co. (“SEI”) serves as distributor of the RiverPark Fund. SEI, its affiliates, and RiverPark may make direct or indirect payments to third parties in connection with the sale of shares of the RiverPark Fund or the servicing of shareholder accounts.

TCW Funds Distributors (“TCW Distributors”) serves as distributor of the TCW Fund. TCW or TCW Distributors may make direct or indirect payments to third parties in connection with the sale of shares of the TCW Fund or the servicing of shareholder accounts.

The TCW Fund has adopted a share marketing plan in accordance with Rule 12b-1 under the 1940 Act (such plan a “Distribution Plan”) for its N Class shares only. Pursuant to the Distribution Plan, N Class shares pay a 12b-1 fee at the annual rate of 0.25% of the average daily net assets of the TCW Fund.

 

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RISK OF INVESTING IN THE FUNDS

Because the Funds are part of unaffiliated fund families, the Funds use different terminology and descriptions to describe their principal risks. Below is a discussion of the principal risk factors to which the RiverPark Fund and the TCW Fund are subject.

 

RiverPark Fund

  

TCW Fund

Credit Risk — Debt portfolios are subject to credit risk. Credit risk refers to the likelihood that an issuer will default in the payment of principal and/or interest on an instrument. Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, lack or inadequacy of collateral or credit enhancement for a debt instrument may affect its credit risk. Credit risk may change over the life of an instrument, and debt obligations which are rated by rating agencies are often reviewed and may be subject to downgrade.

 

Dispersion Risk — As part of its investment strategy, the Fund sells index call options to hedge its portfolio. As such, there is the risk that the portfolio will underperform the blended performance of the indexes on which those options were sold. If the portfolio were to underperform such indexes sufficiently, the Fund could incur losses, even during times that the portfolio generates profits.

 

Equity Securities Risks — The Fund invests primarily in equity securities, securities with exposure to equity securities or indices comprised of equity securities. Although investments in equity securities, such as stocks, historically have been a leading choice for long-term investors, the values of stocks rise and fall depending on many factors. The stock or other security of a company may not perform as well as expected, and may decrease in value, because of factors related to the company (such as poorer than expected earnings or certain management decisions) or to the industry in which the company is engaged (such as a reduction in the demand for products or services in a particular industry). Market and economic factors may adversely affect securities markets generally, which could in turn adversely affect the value of the Fund’s investments, regardless of the performance or expected performance of companies in which the Fund invests.

 

Foreign Securities Risks — The Fund may invest in foreign securities, including in depositary receipts (such as ADRs). These investments involve certain risks not generally associated with investments in securities of U.S. issuers. Public information available concerning foreign issuers may be more limited than would be with respect to domestic issuers. Different accounting

  

Allocation Risk — The Fund’s investment performance depends on how its assets are allocated and reallocated according to its allocation targets and ranges. A principal risk of investing in the Fund is that the Sub-Adviser will make less than optimal or poor allocation decisions. The Sub-Adviser attempts to identify investment allocations that will optimize returns given various levels of risk tolerance; however, there is no guarantee that such allocation techniques will produce the desired results. It is possible that the Sub-Adviser will focus on investments that perform poorly or underperform other investments under various market conditions. You could lose money on your investment in the Fund as a result of these allocation decisions.

 

Alternative Strategies Risk — The investment strategies employed by the Fund are alternative strategies that have not been applied to mutual funds for an extended period of time. Accordingly, the Fund is subject to the risk that anticipated opportunities do not play out as planned, or that there are unexpected challenges in implementing the Fund’s strategies due to regulatory constraints for mutual funds.

 

Correlation and Hedging Risk — As part of its investment strategy, the Fund sells index call options to hedge the Stock Portfolio. There is the risk that the returns of the Stock Portfolio do not correlate with those of the indexes on which the call options are written. Further, the Sub-Adviser may not correctly assess the degree of correlation between the performance of the basket of indexes used in the hedging strategy and the performance of the equity securities in the Stock Portfolio being hedged. If the degree of correlation is sufficiently low, the Fund could incur losses, even during times that the Stock Portfolio generates profits. It is also not possible to hedge fully or perfectly against any risk, and hedging entails its own costs. Hedging may also reduce gains or result in losses.

 

Currency Risk — The Fund is subject to currency risk when the Fund invests in foreign issuers. Currency exchange rates may fluctuate significantly over short periods of time. A decline in the value of

 

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RiverPark Fund

  

TCW Fund

standards may be used by foreign issuers, and foreign trading markets may not be as liquid as U.S. markets. Foreign securities also involve such risks as currency fluctuation risk, delays in transaction settlements, possible imposition of withholding or confiscatory taxes, possible currency transfer restrictions, and the difficulty of enforcing obligations in other countries. With any investment in foreign securities, there exist certain economic, political and social risks, including the risk of adverse political developments, nationalization, confiscation without fair compensation and war. In addition, brokerage and transaction costs are generally higher for foreign securities than for U.S. investments.

 

Interest Rate Risk — The prices of securities in general and fixed-income securities in particular tend to be sensitive to interest rate fluctuation. Unexpected fluctuations in interest rates can result in significant changes in the prices of fixed-income securities. Given the historically low interest rate environment, there is greater risk than normal of rising interest rates. In addition, interest rate increases generally will increase the interest carrying costs of borrowed securities and leveraged investments. To the extent that interest rate assumptions underlie the hedge ratios implemented in hedging a particular position, fluctuations in interest rates could invalidate those underlying assumptions and expose a the Fund’s assets to losses. Interest rate sensitivity is generally more pronounced and less predictable in instruments with uncertain payment or prepayment schedules.

 

Risks of Using Leverage — Subject to certain limitations, the Fund may borrow money from a bank to meet redemptions or to meet short term cash needs. The use of leverage involves special risks. Leverage can increase the investment returns of the Fund if the securities purchased increase in value in an amount exceeding the cost of the borrowing. However, if the securities decrease in value, a Fund will suffer a greater loss than would have resulted without the use of leverage.

 

Management Risk — Management risk means that the Sub-Adviser’s security selections and other investment decisions might produce losses or cause the Fund to underperform when compared to other funds with similar investment goals.

 

Options Risks — The Fund will purchase or sell call and put options on securities, which may include stock indices (such as the S&P 500 Index), to seek capital growth, to generate income or for hedging purposes.

  

foreign currencies relative to the U.S. dollar may affect the finances of a foreign issuer, which could affect the value of that issuer’s U.S.-listed, U.S. dollar-denominated securities held by the Fund. Such fluctuations in currency exchange rates may be caused by, among others, inflation, interest rates, budget deficits, political factors and government controls.

 

Equity Securities Risk — Equity securities may include common stock, preferred stock or other securities representing an ownership interest or the right to acquire an ownership interest in an issuer, including convertible securities, depository receipts, and rights and warrants. Equity securities risk is the risk that stocks and other equity securities generally fluctuate in value more than bonds and can decline in value over short or extended periods. Investments in equity securities involve substantial risks and may be subject to wide and sudden fluctuations in market value, as a result of changes in a company’s financial condition and in overall market, economic and political conditions, changing perception regarding the industries in which the issuing securities held by the Fund participate, or factors relating to specific companies in which the Fund invests.

 

Foreign Securities Risk — Investments in foreign securities may involve greater risks than investing in domestic securities because the Fund’s performance may depend on factors other than the performance of a particular company. Typically, the Fund only invests in a non-U.S. issuer via shares of that issuer listed on a U.S. stock exchange, and therefore is subject to the accounting, auditing and financial reporting standards of that exchange. Political or social instability, civil unrest, acts of terrorism and regional economic volatility are other potential risks that could impact an investment in a security of a non-U.S. issuer.

 

Frequent Trading Risk — Frequent trading of portfolio securities may produce capital gains, which are taxable to shareholders when distributed. Frequent trading may also increase the amount of commissions or mark-ups to broker-dealers that the Fund pays when it buys and sells securities, which may detract from the Fund’s performance. The portfolio turnover rate of the Fund cannot be accurately predicted. Nevertheless, the annual portfolio turnover rate of the Fund is generally not expected to exceed 100%.

 

 

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RiverPark Fund

  

TCW Fund

These options may be listed on domestic or foreign securities exchanges or traded in the over-the-counter market. A Fund that invests in options will expose investors to the risks inherent in investing with options. These risks include, but are not limited to, volatile movements in the price of the underlying instrument and misjudgments as to the future prices of the options and/or the underlying instrument. Increased option volatility can increase the loss associated with a Fund’s trading. While volatility can be monitored and reacted to, there is no cost-effective means of hedging against market volatility. An option on a security provides the purchaser, or “holder,” with the right, but not the obligation, to purchase, in the case of a “call” option, or sell, in the case of a “put” option, the security or securities underlying the option, for a fixed exercise price up to a stated expiration date. The holder pays a non-refundable purchase price for the option, known as the “premium.” The maximum amount of risk the purchaser of the option assumes is equal to the premium plus related transaction costs, although the entire amount may be lost. Selling options creates additional risks. The seller of a “naked” call option (or the seller of a put option who has a short position in the underlying instrument) is subject to the risk of a rise in the price in the underlying instrument above the strike price, which risk is reduced only by the premium received for selling the option. In exchange for the proceeds received from selling the call option (in lieu of an outright short position), the option seller gives up (or will not participate in) all of the potential gain resulting from a decrease in the price of the underlying instrument below the strike price prior to expiration of the option. The seller of a “naked” put option (or the seller of a call option who has a long position in the underlying instrument) is subject to the risk of a decline in price of the underlying instrument below the strike price, which risk is reduced only by the proceeds received from selling the option. In exchange for the premium received for selling the put option (in lieu of an outright long position), the option seller gives up (or will not participate in) all of the potential gain resulting from an increase in the price of the underlying instrument above the strike price prior to the expiration of the option. Due to the inherent leveraged nature of options, a relatively small adverse move in the price of the underlying instrument may result in immediate and substantial losses to the Fund.

 

While the Fund currently uses only exchange-traded options, it, in the future, may also use over-the-counter options. When options are purchased over-the-counter

  

Globalization Risk — The growing inter-relationship of global economies and financial markets has increased the effect of conditions in one country or region on issuers of securities in a different country or region. In particular, the adoption or prolongation of protectionist trade policies by one or more countries, changes in economic or monetary policy in the United States or abroad, or a slowdown in the United States economy, could lead to a decrease in demand for products and reduced flows of capital and income to companies in other countries. Those events might particularly affect companies in emerging and developing market countries.

 

High Portfolio Turnover Risk — The investment techniques used by the Fund may result in frequent portfolio trading and high portfolio turnover. High portfolio turnover rates will cause the Fund to incur higher levels of transaction costs, including brokerage fees and commissions and dealer mark-ups, which may reduce the performance of the Fund. High portfolio turnover rates may also result in increased capital gains, including short-term capital gains, which will generally be taxable to shareholders as ordinary income and would increase a shareholder’s tax liability unless shares are held through a tax-deferred or tax-exempt vehicle. The portfolio turnover rate of the Fund cannot be accurately predicted. Nevertheless, the annual portfolio turnover rate of the Fund is generally not expected to exceed 100%.

 

Investment Style Risk — The Fund may be subject to investment style risk. The Sub-Adviser’s investment styles may be out of favor at times or may not produce the best results over short or longer time periods and may increase the volatility of the Fund’s share price.

 

Issuer Risk — The value of securities held by the Fund may decline for a number of reasons that directly relate to an issuer, such as changes in the financial condition of the issuer, management performance, financial leverage and reduced demand for the issuer’s goods and services. The amount of dividends paid with respect to equity securities, or the ability of an issuer to make payments in connection with debt securities, may decline for reasons that relate to the issuer, such as changes in an issuer’s financial condition or a decision by the issuer to pay a lower dividend, or reasons that relate to the broader financial system. In addition, there may be

 

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RiverPark Fund

  

TCW Fund

by the Fund, it will bear the risk that the counter-party that wrote the option will be unable or unwilling to perform its obligations under the option contract.

 

An option position in an exchange-traded option may be closed out only on an exchange which provides a secondary market for an option of the same series. Although the Fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option at any particular time. Reasons for the potential absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or a clearing corporation may not at all times be adequate to handle current trading volume or (vi) one or more exchanges could, for economic or other reasons decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options) in which event the secondary market on that exchange (or in the class or series of options) would cease to exist, although outstanding options on that exchange which had been issued by a clearing corporation as a result of trades on that exchange would continue to be exercisable in accordance with their terms. There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at a particular time, render certain of the facilities of any of the clearing corporations inadequate and thereby result in the institution by an exchange of special procedures which may interfere with the timely execution of customers’ orders. However, the Options Clearing Corporation, based on forecasts provided by the U.S. exchanges, believes that its facilities are adequate to handle the volume of reasonably anticipated options transactions, and such exchanges have advised such clearing corporation that they believe their facilities will also be adequate to handle reasonably anticipated volume

 

Portfolio Turnover Risk — The Fund may engage in short-term trading strategies and securities may be sold without regard to the length of time held when, in the opinion of the Sub-Adviser, investment considerations warrant such action. These policies, together with the

  

limited public information available for the Sub-Adviser to evaluate foreign issuers.

 

Leverage Risk — Leverage may result from certain transactions, including the use of derivatives (including options), borrowing and reverse repurchase agreements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage, and during periods of adverse market conditions, the use of leverage may cause the Fund to lose more money than would have been the case if leverage was not used. The use of leverage may also cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements.

 

Liquidity Risk — Liquidity risk is the risk that the Fund may invest in securities that trade in lower volumes and may be less liquid than other investments or that may become less liquid in response to market developments or adverse investor perceptions. When there is no willing buyer and investments cannot be readily sold, the Fund may have to sell them at a lower price or may not be able to sell the securities at all, each of which would have a negative effect on the Fund’s performance. Such securities may also be difficult to value and their values may be more volatile due to liquidity risk. Increased Fund redemption activity, which may occur in a rising interest rate environment or for other reasons, may negatively impact Fund performance and increase liquidity risk due to the need of the Fund to sell portfolio securities. The securities of many of the companies with medium sized capitalizations may have less “float” (the number of shares that normally trade) and less interest in the market and therefore are subject to liquidity risk.

 

Management Risk — The skills of the Adviser and the Sub-Adviser will play a significant role in the Fund’s ability to achieve its investment objective, and there is the risk that an investment strategy may fail to produce the intended results. The Fund’s ability to achieve its investment objectives depends on the investment skills and ability of the Adviser and the Sub-Adviser and on their ability to correctly identify economic trends, and there can be no assurance that the Fund will achieve its investment objective or achieve positive results. The Sub-Adviser’s judgments about the attractiveness, value and potential appreciation of particular securities may prove to be incorrect and may not anticipate

 

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RiverPark Fund

  

TCW Fund

ability of the Fund to effect short sales of securities and to engage in transactions in options and futures, may have the effect of increasing the annual rate of portfolio turnover of the Fund. A high portfolio turnover rate will result in greater brokerage commissions and transaction costs. It may also result in greater realization of gains, which may include short-term gains taxable at ordinary income tax rates.

 

Small and Medium Capitalization Company Risk — Many issuers in which the Fund may invest are small or medium capitalization companies. The risks associated with these investments are generally greater than those associated with investments in the securities of larger, more well-established companies. This may cause the Fund’s share price to be more volatile when compared to investment companies that focus only on large capitalization companies. Securities of small or medium capitalization companies are more likely to experience sharper swings in market values, less liquid markets, in which it may be more difficult for the Adviser to sell at times and at prices that the Adviser believes appropriate and generally are more volatile than those of larger capitalization companies. Compared to large cap companies, smaller cap companies are more likely to have (i) less information publicly available, (ii) more limited product lines or markets and less mature businesses, (iii) fewer capital resources, (iv) more limited management depth and (v) shorter operating histories. Further, the equity securities of smaller companies are often traded over-the-counter and generally experience a lower trading volume than is typical for securities that are traded on a national securities exchange. Consequently, the Fund may be required to dispose of these securities over a longer period of time (and potentially at less favorable prices) than would be the case for securities of larger companies, offering greater potential for gains and losses and associated tax consequences.

 

Stock Market Risk — Because the Fund invests a substantial portion of its assets in common stocks, it is subject to stock market risk. Market risk involves the possibility that the value of the Fund’s investments in stocks will decline due to drops in the stock market. In general, the value of the Fund will move in the same direction as the overall stock market in which the Fund invests, which will vary from day to day in response to the activities of individual companies, as well as general market, regulatory, political and economic conditions.

 

Value Stock Risk — The Fund invests in value stocks. When value investing is out of favor, the Fund’s share

  

actual market movements or the impact of economic conditions generally. No matter how well a portfolio manager evaluates market conditions, the securities a portfolio manager chooses may fail to produce the intended result, and you could lose money on your investment in the Fund.

 

Market Risk — Market risk is the risk that the markets in which the Fund’s investments trade will increase or decrease in value. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. If there is a general decline in the securities and other markets, your investment in the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests. Certain stocks may decline in value even during periods when the prices of equity securities in general are rising, or may not perform as well as the market in general.

 

Medium Capitalization Company Risk — The Fund invests in the securities of medium capitalization companies, which could entail greater risks than investing in larger, more established companies. Companies with medium sized market capitalization often have narrower markets, fewer products or services to offer and more limited managerial and financial resources than do larger, more established companies, and their stock prices may be based in substantial part on future expectations rather than current achievements. As a result, their performance can be more volatile, their securities may be less liquid and subject to more severe, abrupt or erratic market movements, they are more likely to be adversely affected by changes in earnings results and investor expectations or poor economic or market conditions, including those experienced during a recession, and they face a greater risk of business failure. Further, medium capitalization companies may have less publicly available information than larger, more established companies, and, when available, it may be inaccurate or incomplete.

 

Models Risk — The proprietary algorithm and software (collectively, “models”) used by the Sub-Adviser to determine or guide investment decisions may not achieve the objectives of the Fund. Any imperfections or limitations in the analyses and models could affect the ability of the Sub-Adviser to implement strategies. By necessity, these analyses

 

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RiverPark Fund

  

TCW Fund

price may decline even though the companies the Fund holds have sound fundamentals.   

and models make simplifying assumptions that limit their efficacy. Models that appear to explain prior market data can fail to predict future market events. Further, the data used in models may be inaccurate, and/or it may not include the most recent information about a company or a security. Additionally, the Sub-Adviser is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by it. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the Sub-Adviser had not adjusted or deviated from the models.

 

New Fund Risk — The Fund is new. Accordingly, investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategy or may not employ a successful investment strategy, which could result in the Fund being liquidated at any time without shareholder approval and could have negative tax consequences for shareholders. The Sub-Adviser also may not be fully able to implement their investment strategies within the regulatory constraints for mutual funds.

 

Options Risk — An option is an agreement that, for a premium payment or fee, gives the option holder (the purchaser) the right but not the obligation to buy (a “call option”) or sell (a “put option”) the underlying asset (or settle for cash an amount based on an underlying asset, rate, or index) at a specified price (the “exercise price”) during a period of time or on a specified date. Investments in options are considered speculative. When the Fund purchases an option, it may lose the premium paid for it if the price of the underlying security or other assets decreased or remained the same (in the case of a call option) or increased or remained the same (in the case of a put option). If a put or call option purchased by the Fund were permitted to expire without being sold or exercised, its premium would represent a loss to the Fund. When the Fund writes or sells an option, if the decline or increase in the underlying asset is significantly below or above the exercise price of the written option, the Fund could experience a substantial loss.

 

Index Call Option Writing Risk — An index call option is a contract that entitles the purchaser to receive from the seller a cash payment equal to the amount of any appreciation in the value of the reference index over the exercise price as of the

 

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RiverPark Fund

  

TCW Fund

   valuation date of the option. Upon entering into the position, a premium is paid by the purchaser to the seller. When an index call option is exercised, the seller is required to deliver an amount of cash determined by the excess, if any, of the value of the index at contract termination over the exercise price of the option. Selling index call options can reduce the risk of owning the Stock Portfolio because declines in the value of the Stock Portfolio would be offset to the extent of the up-front cash (premium) received at the time of selling the call option. However, as the writer of an index call option, the Fund forgoes, during the option’s life, the opportunity to profit from increases in the market value of the index covering the call option above the sum of the option premium received and the exercise price of the call option. Since the Fund’s investment strategy does not contemplate investing in or replicating a particular index, the Fund will not profit from increases in market value of a particular index. Therefore, selling index call options also can limit the Fund’s opportunity to profit from an increase in the market value of the Stock Portfolio; however, only to the extent that the Stock Portfolio correlates with the index underlying the call option written by the Fund.
  

Price Volatility Risk — The value of the Fund’s investment portfolio will change as the prices of its investments go up or down. The Fund’s returns will vary, and you may lose money. Although stocks offer the potential for greater long-term growth than most debt securities, stocks generally have higher short-term volatility. Different parts of the market and different types of securities can react differently to developments. Issuer, political or economic developments can affect a single issuer, issuers within an industry or economic sector or geographic region or market as a whole. Prices of most securities tend to be more volatile in the short-term. Therefore, an investor who trades frequently or redeems in the short-term is more likely to incur a loss than an investor who holds investments for the longer-term. The fewer issuers in which the Fund invests there are, the greater the potential volatility of its portfolio will be.

 

Regulatory Risk — Recent instability in the financial markets has led the U.S. Government to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme

 

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RiverPark Fund

  

TCW Fund

  

volatility, and in some cases a lack of liquidity. The Dodd-Frank Wall Street Reform and Consumer Protection Act includes a number of statutory provisions, rulemaking directives and required studies that could directly or indirectly impact the Fund through (i) provisions impacting the regulatory framework relating to the Fund; (ii) provisions impacting the Fund as an investor; (iii) enhancements to the enforcement authority of the SEC; (iv) risk regulation of “systemically important” financial institutions; and (v) mandated studies that may have further effects on the Fund. Such legislation may impact the Fund in ways that are unforeseeable.

 

Securities Selection Risk — The specific securities held in the Fund’s investment portfolio may underperform those held by other funds in the same asset class or benchmarks that are representative of the general performance of the asset class because of a portfolio manager’s choice of securities.

 

Short Sale Risk — The Fund may engage in short sales, transactions in which the Fund sells a security it does not own. To complete a short sale, the Fund must borrow the security (typically from brokers or other institutions) to deliver to the buyer. The Fund is then obligated to replace the borrowed security by purchasing the security at the market price at the time of replacement. This price may be more or less than the price at which the security was sold by the Fund and the Fund will incur a loss if the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security. Because a borrowed security could theoretically increase in price without limitation, the loss associated with short selling is potentially unlimited. To the extent that the Fund reinvests proceeds received from selling securities short, it may effectively create leverage. Short sales also involve transaction and other costs that will reduce potential Fund gains and increase potential Fund losses.

 

Value Stock Risk — Value stocks represent companies that tend to have lower than average price to earnings ratios and are therefore cheaper than average relative to the companies’ earnings. These companies may have relatively weak balance sheets, and during economic downturns, these companies may have insufficient cash flow to pay their debt obligations and may have difficulty finding additional financing needed for their operations. A

 

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RiverPark Fund

  

TCW Fund

   value stock may not reach what the Sub-Adviser believes is its full market value if other investors fail to recognize the stock’s value or the catalyst that the Sub-Adviser believes will increase the price of the stock does not affect the price of the stock in the manner or to the degree that the Sub-Adviser anticipates. Additionally, the intrinsic value of a value stock may go down, or it may be appropriately priced at the time of purchase.

For additional information about the non-principal risks of the TCW Fund, please see the Reorganization SAI.

COMPARISON OF FEES AND EXPENSES OF THE FUNDS

For each of the Funds, you will pay indirectly various expenses because each Fund pays fees and expenses that reduce the return on your investment. The following table describes the fees and expenses that you may pay if you buy and hold shares of the RiverPark Fund. The fees and expenses presented for the RiverPark Fund are based on its fiscal year ended September 30, 2014. As the TCW Fund has not yet commenced operations as of the date of this Proxy Statement/Prospectus, the fees and expenses shown for the TCW Fund are based on estimated amounts that the TCW Fund would have incurred during the twelve months ended October 31, 2014, on a pro forma basis assuming the Reorganization had occurred on November 1, 2013. Actual expenses for the TCW Fund after the Reorganization may be higher or lower. The Reorganization itself will not cause a shareholder to directly pay any additional fees, other than portfolio transactions costs. See “Information About the Reorganization — Fees and Expenses of the Reorganization.”

As a result of the Reorganization, and as described in these materials, Retail Class shareholders of the RiverPark Fund will receive N Class shares of the TCW Fund while Institutional Class shareholders of the RiverPark Fund will receive I Class shares of the TCW Fund. While the RiverPark Fund has authorized Class C shares, there are no Class C shareholders outstanding as such shares are not currently being offered for sale to investors. Furthermore, the TCW Fund will not offer Class C shares.

 

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FEES AND EXPENSES

 

     RiverPark Fund     TCW Fund  
     (Retail
Class)
    (Institutional
Class)
    (N Class)
Pro Forma
    (I Class)
Pro Forma
 

Shareholder Fees (fees paid directly from your investment)

        

Maximum Sales Charge (Load) Imposed on Purchases

     None        None        None        None   

Maximum Deferred Sales Charge (Load)

     None        None        None        None   

Maximum Sales Charge (Load) Imposed on Reinvested Dividends

     None        None        None        None   

Redemption Fee

     None        None        None        None   

Annual Fund Operating Expenses

        

(expenses that you pay each year as a percentage of the value of your investment)

        

Management Fees

     0.90     0.90     0.90     0.90

Distribution and/or Service (12b-1) Fees

     None        None        0.25     None   

Other Expenses

     0.62 %(1)      0.27 %(1)      0.88 %(2)      0.80 %(2) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Annual Fund Operating Expenses

  1.52   1.17   2.03 %    1.70 % 
  

 

 

   

 

 

   

 

 

   

 

 

 

Fee Waiver and/or Expense Reimbursement/Plus Management Fees Subject to Recovery

  (0.02 %)(3)    0.08 %(3)    (0.53 )%(4)    (0.45 )%(4) 

Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement or Plus Management Fees Subject to Recovery

  1.50   1.25   1.50 %(4)    1.25 %(4) 
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Other Expenses include a shareholder servicing fee of up to 0.25% for the Retail Class shares and an administrative servicing fee of up to 0.15% for each of the classes to be used for non-distribution related services including providing shareholder accounting, client support and other services associated with maintaining shareholder accounts on various brokerage platforms.
(2) Other Expenses are based on estimated amounts for the current fiscal year. The TCW Fund is authorized to compensate broker-dealers and other third-party intermediaries in an amount between 0.06% and 0.16% of its average daily net assets, as approved by the TCW Board based on the TCW Fund’s asset levels, of the assets serviced for the TCW Fund by that intermediary for shareholder services.
(3)

RiverPark has agreed contractually to waive its fees and to reimburse expenses of the RiverPark Fund, including expenses associated with the RiverPark Fund’s shareholder services plan and administrative services plan, to the extent necessary to ensure that operating expenses (excluding interest, brokerage commissions, dividends and interest expense on securities sold short, acquired fund fees and expenses and extraordinary expenses) do not exceed, on an annual basis, 1.25% for the Institutional Class shares and 1.50% for the Retail Class Shares of the RiverPark Fund’s average net assets. This agreement is in effect until at least January 31, 2016, and, subject to annual approval by the RiverPark Board, this arrangement will remain in effect unless and until the RiverPark Board approves its modification or termination or RiverPark notifies the RiverPark Fund at least 30 days prior to the annual approval of its determination not to continue the agreement. This agreement may be terminated with 90 days’ notice by a majority of the independent members of the RiverPark Board or a majority of the RiverPark Fund’s outstanding shares. The RiverPark Fund has agreed to repay RiverPark in the amount of any fees waived and RiverPark Fund expenses absorbed, subject to certain limitations that: (1) the reimbursement is made only for fees and expenses incurred not more than three years prior to the date of reimbursement; and (2) the reimbursement may not be made if it would cause the annual expense limitation in effect at the time of the waiver to be exceeded. Any waivers and/or reimbursements that are subject to repayment from the

 

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RiverPark Fund will carry over to the TCW Fund following the Reorganization. There will be no extension of the recoupment period with respect to those prior waivers and reimbursements. Currently, the amount of non-captured fee waivers owed by the RiverPark Fund is approximately $50,492.

(4) TCW has contractually agreed to waive fees and/or reimburse expenses to limit the TCW Fund’s total annual operating expenses (excluding taxes, interest, brokerage commissions, dividends on securities sold short, acquired fund fees and expenses, and extraordinary expenses) to 1.25% of average daily net assets with respect to Class I shares and 1.50% of average daily net assets with respect to Class N shares. This contractual fee waiver/expense reimbursement will remain in place through October 31, 2017. During this term, only the TCW Board may terminate or modify the terms of the contract. TCW may request recoupment of previously waived fees and paid expenses from the TCW Fund for three years from the date they were waived or paid, subject to any applicable expense caps at the time of recoupment or at the time of waiver and/or reimbursement, whichever is lower. If TCW does not agree to waive fees and/or reimburse expenses after October 31, 2017, the fees and expenses paid by shareholders of the TCW Fund will increase.

Expense Example

This Example will help you compare the cost of investing in the RiverPark Fund with the cost of investing in the TCW Fund or other mutual funds. This Example assumes that you invest $10,000 in each Fund for the time periods indicated. The Example also assume that your investment has a 5% return each year and that each Fund’s operating expenses remain the same. All expense information is based on the information set forth in the expense table above, including pro forma expense information for the TCW Fund. Although your actual costs may be higher or lower, based on these assumptions your costs would be:

 

Fund/Share Class

   1 Year      3 Years      5 Years      10 Years  

RiverPark Fund

           

– Retail Class shares

   $ 153       $ 478       $ 827       $ 1,811   

– Institutional Class shares

   $ 127       $ 397       $ 686       $ 1,511   

TCW Fund

           

Pro Forma N Class shares

   $ 153       $ 585       $ 1,044       $ 2,316   

Pro Forma I Class shares

   $ 127       $ 492       $ 881       $ 1,971   

 

Contractual Expense Limitations

RiverPark has agreed contractually to waive its fees and to absorb expenses of the RiverPark Fund to the extent necessary to ensure that ordinary operating expenses of each class (excluding interest, brokerage commissions, dividends on short sales and interest expense on securities sold short, acquired fund fees and expenses and extraordinary expenses) do not exceed certain percentages of the RiverPark Fund’s average net assets. The RiverPark Fund has agreed to repay RiverPark in the amount of any fees waived and RiverPark Fund expenses absorbed, subject to certain limitations that: (1) the reimbursement is made only for fees and expenses incurred not more than three years prior to the date of reimbursement; and (2) the reimbursement may not be made if it would cause the annual expense limitation in effect at the time of the waiver to be exceeded. The expense limitation for the Retail Class of the RiverPark Fund, expressed as a percentage of average net assets, is 1.50% and the expense limitation for the Institutional Class of the RiverPark Fund, expressed as a percentage of net assets, is 1.25%.

Any waivers and/or reimbursements that are subject to repayment from the RiverPark Fund will carry over to the TCW Fund. There will be no extension of the recoupment period with respect to those prior waivers and reimbursements. Currently, the amount of non-recaptured fee waivers owed by the RiverPark Fund is approximately $50,492.

Pursuant to the Operating Expenses Agreement between TCW and the TCW Fund (the “TCW Operating Expenses Agreement”), TCW has agreed to waive its investment management fee and/or reimburse the operating expenses of the TCW Fund to the extent the TCW Fund’s operating expenses (excluding taxes,

 

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interest, brokerage commissions, dividends on securities sold short, acquired fund fees and expenses, and extraordinary expenses) exceed, in the aggregate, the rate per annum, as set forth below.

 

     Expense Cap
(As Percent of
Average
Net Asset Value)
 

TCW Fund

  

Class N

     1.50

Class I

     1.25

This contractual fee waiver/expense reimbursement will remain in place through October 31, 2017. During this term, only the TCW Board may terminate or modify the terms of Operating Expenses Agreement. TCW may request recoupment of previously waived fees and paid expenses from the TCW Fund for three years from the date they were waived or paid, subject to any applicable expense caps at the time of recoupment or at the time of waiver and/or reimbursement, whichever is lower.

Portfolio Turnover

Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when you hold Fund shares in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Examples above, affect the Fund’s performance. During the most recent fiscal year, the RiverPark Fund’s portfolio turnover rate was 42% of the average value of its portfolio. Because the TCW Fund is newly formed and had not commenced operations prior to the date of this Proxy Statement/Prospectus, there is no annual portfolio turnover rate information available for the TCW Fund. Accordingly, the portfolio turnover rate of the TCW Fund cannot be accurately predicted. Nevertheless, the annual portfolio turnover rate of the TCW Fund is generally not expected to exceed 100%.

Additional Information Applicable to the RiverPark Fund and the TCW Fund

Additional information regarding shareholder services and procedures for the RiverPark Fund may be found in the RiverPark Prospectus, which is on file with the SEC and is incorporated by reference into this Proxy Statement/Prospectus.

For a more detailed description of the shareholder services and procedures of the TCW Fund, relating to the purchase, redemption, exchange, and distribution of TCW Fund shares, please see the Shareholder Guide at Appendix C.

PERFORMANCE OF THE FUNDS

Performance of the RiverPark Fund

Annual performance returns provide some indication of the risks of investing in the RiverPark Fund by showing changes in performance from year to year. The TCW Fund charges the same management fee as the RiverPark Fund and the TCW Fund’s total operating expenses after fee waiver or expense reimbursement will be the same as those of the RiverPark Fund. If the RiverPark Fund were charged the same fees and expenses of the TCW Fund, the annual returns for the RiverPark Fund would have been the same. The performance information for periods prior to April 30, 2012, shown below is for the RiverPark Fund’s predecessor partnership (Gargoyle Hedged Value Fund L.P.). The predecessor partnership was merged into and reorganized as the RiverPark Fund, a series of RiverPark Trust, as of April 30, 2012. The merger and reorganization of the predecessor partnership into the RiverPark Fund was for purposes entirely unrelated to the establishment of a performance record. The RiverPark Fund is managed by the same investment adviser (i.e., its sub-adviser, Gargoyle) and in a manner that is

 

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in all material respects equivalent to the management of the predecessor partnership since January 2000. The predecessor partnership was formed and commenced operations in 1997; however, substantial changes were made to the strategy in January 2000, consistent with the strategy that the RiverPark Fund currently pursues. During its operating history since January 2000, the predecessor partnership’s investment policies, objectives, guidelines and restrictions were in all material respects equivalent to the RiverPark Fund’s. The information for periods prior to April 30, 2012, shows how the predecessor partnership’s performance varied from year to year, and reflects the actual fees and expenses that were charged when the RiverPark Fund was a partnership. When the RiverPark Fund was a partnership, it charged investors a 20% performance fee. The RiverPark Fund does not charge a performance fee. If the predecessor partnership were charged the same fees and expenses as the RiverPark Fund, the annual returns for the predecessor partnership would have been higher. From its inception through April 30, 2012, the predecessor partnership was not subject to certain investment restrictions, diversification requirements and other restrictions of the 1940 Act or the Code, which if they had been applicable, might have adversely affected its performance. Comparison of performance to an appropriate index indicates how the RiverPark Fund’s and the predecessor partnership’s average annual returns compare with those of a broad measure of market performance. The RiverPark Fund’s and the predecessor partnership’s past performance is not necessarily an indication of how the RiverPark Fund will perform in the future. Past performance is no guarantee of future results.

The TCW Fund has been newly-formed for the purpose of effecting the transactions contemplated by the Reorganization and in order to carry on the business of the RiverPark Fund following its merger into the TCW Fund, and the TCW Fund will not commence investment operations until the Reorganization closes. Therefore, no performance information is provided for the TCW Fund. The TCW Fund’s investment objective is the substantially identical to the RiverPark Fund’s investment objective and the TCW Fund’s principal investment strategies are substantially similar to those of the RiverPark Fund; however, no assurance can be given that the TCW Fund will achieve any particular level of performance after the Reorganization. The TCW Fund expects that it will be both the accounting and performance survivor upon consummation of the Reorganization with the RiverPark Fund.

RiverPark Fund

 

LOGO

 

(1) Prior to April 30, 2012, the RiverPark Fund was a private partnership and had one class of units.

 

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During the period of time shown in the bar chart, the highest quarterly return was 22.51% for the quarter ended June 30, 2009, and the lowest quarterly return was (20.52)% for the quarter ended December 31, 2008.

The performance table below shows how the RiverPark Fund’s average annual returns for each of the periods ended December 31, 2014, compared to that of the RiverPark Fund’s benchmarks (S&P 500 Total Return Index and the Russell 1000 Value Index):

Average Annual Total Returns

 

     Inception Date    1 Year     5 Years     10 Years  

Institutional Class Shares (RGHIX)

   04/30/2012       

Return Before Taxes

        4.62     11.90     7.81

Return After Taxes on Distributions*

        3.50     N/A **      N/A ** 

Return After Taxes on Distributions and Sale of Fund Shares*

        3.50     N/A **      N/A ** 

Retail Class Shares (RGHVX)

   05/04/2012       

Return Before Taxes

        4.41     11.76     7.74

S&P 500 Total Return Index (reflects no deduction for fees, expenses or taxes)

        13.69     15.45     7.67

Russell 1000 Value Index (reflects no deduction for fees, expenses or taxes)

        13.45     15.42     7.30

 

* After-tax returns are calculated using the historical highest individual federal marginal income tax rates, and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. The after-tax returns are for Institutional Class shares only. The after-tax returns for Retail Class shares will vary. The after-tax returns shown are not relevant to investors who hold their RiverPark Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts.
** After-tax returns are not shown where noted because the privately offered fund, unlike a regulated investment company, was not required to make annual distributions to its investors.

Updated performance information is available by calling the RiverPark Fund, toll free, at 888-564-4517, or by visiting the RiverPark Fund’s website at www.riverparkfunds.com. For a discussion by RiverPark regarding the performance of the RiverPark Fund for the fiscal year ended September 30, 2014, see Appendix D to this Proxy Statement/Prospectus.

INFORMATION ABOUT THE REORGANIZATION

Description of the Reorganization

On March 20, 2015, the RiverPark Board voted to approve the Reorganization. Pursuant to the Reorganization Agreement, the RiverPark Fund will transfer its assets to the TCW Fund, which will assume all of the ordinary operating and portfolio liabilities of the RiverPark Fund. The terms and conditions under which the Reorganization will be implemented are set forth in the Reorganization Agreement. Material provisions of the Reorganization Agreement are summarized below; a form of which is attached hereto as Appendix A to this Proxy Statement/Prospectus. The Reorganization Agreement contemplates (i) the TCW Fund’s acquisition of all of the assets of the RiverPark Fund in exchange solely for Reorganization Shares and the assumption by the TCW Fund of all of the liabilities of the RiverPark Fund by the Closing Date, and (ii) the distribution of the Reorganization Shares to the shareholders of the RiverPark Fund as soon as reasonably practicable after the closing. Each shareholder of the RiverPark Fund will receive a number of full and fractional shares of a particular class of the TCW Fund equal in value to the number of full and fractional shares of the class of shares of the RiverPark Fund held by such shareholder as of the Closing Date as set forth in the table below.

 

 

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As a result of the Reorganization, each RiverPark Fund shareholder will own shares of the TCW Fund, as indicated in the table below. A RiverPark Fund shareholder will receive shares of the TCW Fund with an aggregate NAV equal to the aggregate NAV of the shares of the RiverPark Fund that the shareholder owned immediately before the Reorganization.

 

RiverPark Fund

       

TCW Fund

Retail Class       N Class
Institutional Class       I Class

No sales charge or fee of any kind will be assessed to RiverPark Fund shareholders in connection with their receipt of shares of the TCW Fund in the Reorganization.

After the closing of the Reorganization, shares of the TCW Fund will be credited to shareholders of RiverPark Fund only on a book-entry basis. TCW Fund shall not issue certificates representing shares in connection with the Reorganization, irrespective of whether RiverPark Fund shareholders hold their shares in certificated form and all outstanding certificates representing shares of RiverPark Fund will be deemed cancelled.

The Reorganization Agreement provides the time for and method of determining the net value of the RiverPark Fund’s assets (and therefore shares) and the NAV of a share of the TCW Fund. The valuation will be done immediately after the close of business, as described in the Reorganization Agreement, on the business day immediately preceding the Closing Date, as determined using the valuation policies and procedures for the TCW Fund, or such other valuation policies and procedures as shall be mutually agreed upon by the Funds if, for example, the policies and procedures for the TCW Fund were not to address a particular holding or situation.

TCW will pay all customary costs relating to the proposed Reorganization, including the costs relating to the Special Meeting and the Proxy Statement, as described in the Reorganization Agreement. The RiverPark Fund will not incur any expenses in connection with the Reorganization. The Closing is expected to occur on or about June 26, 2015, provided all of the other closing conditions have been satisfied or waived. The implementation of the Reorganization is subject to a number of conditions set forth in the Reorganization Agreement, including that the Reorganization has been approved by shareholders of the RiverPark Fund.

Another important condition to closing is that the RiverPark Fund and the TCW Fund each receives an opinion from counsel to the TCW Fund to the effect that the Reorganization will qualify as a tax-free “reorganization” for U.S. federal income tax purposes. As a result, the Reorganization is not expected to be taxable for such purposes to the Funds or their shareholders. It should be noted, however, that the RiverPark Fund may make one or more distributions to shareholders prior to the Closing. Any such distribution generally will be taxable as ordinary income or capital gains to shareholders that hold their shares in a taxable account.

The Reorganization Agreement may be terminated and the Reorganization abandoned at any time prior to the Closing Date by a determination of either the RiverPark Board or the TCW Board that the Reorganization is no longer in the best interests of shareholders. If the transactions contemplated by the Reorganization Agreement have not been substantially completed by December 31, 2015, the Reorganization Agreement shall automatically terminate on that date unless a later date is agreed to by the Funds.

It is anticipated that the TCW Trust will enter into interim agreements with certain service providers of the RiverPark Fund, including but not limited to DST Systems, Inc., the RiverPark Fund’s transfer agent, Brown Brothers Harriman & Co., the RiverPark Fund’s custodian, and SEI Investments Global Fund Services, the RiverPark Fund’s administrator, to facilitate the transition of the RiverPark Fund from the RiverPark Trust’s service provider platform to the TCW Trust’s service provider platform following the closing of the Reorganization.

 

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Board Consideration of the Reorganization

At its quarterly Board meeting held on February 12, 2015, and a special telephonic meeting held on March 20, 2015, the RiverPark Board considered the Reorganization and the potential benefits the Reorganization would have on the RiverPark Fund shareholders. At a meeting held on March 20, 2015, the members of the RiverPark Board, including the Trustees who are not interested persons of the RiverPark Trust within the meaning of the 1940 Act (the “Independent Trustees”), voting separately, approved the Reorganization. The RiverPark Board considered the following matters, among others, in approving the Reorganization:

 

    The RiverPark Board when considering the Reorganization determined that the tax-free Reorganization was in the best interests of the shareholders.

 

    The RiverPark Board considered the reputation, financial strength, resources and capabilities of the investment adviser for the TCW Fund, as well as the reputation and experience of the TCW Fund’s third-party service providers. The RiverPark Board noted the increased opportunities for potential economies of scale due to its inclusion in the larger TCW family of funds. The RiverPark Board noted that the increased distribution capabilities available to the larger TCW family of funds might result in asset growth over time and additional cost savings and scale advantages. The RiverPark Board discussed TCW’s experience and success.

 

    The RiverPark Board considered the Reorganization with the TCW Fund to accommodate a request from Gargoyle, the RiverPark Fund’s sub-adviser, to permit Gargoyle to sub-advise a new fund being organized by TCW which would, subject to approval of the Reorganization, also include the assets of the RiverPark Fund. The RiverPark Board recognized that while the RiverPark Fund had grown since its inception, the Board acknowledged that the RiverPark Fund should benefit from TCW’s large sales force and distribution capabilities. The RiverPark Board believed that shareholders in the RiverPark Fund after the Reorganization with and into the TCW Fund should benefit from economies of scale and that net operating expenses could be reduced as a result of increased assets in the TCW Fund. The RiverPark Board also acknowledged that the TCW Fund’s investment strategy under the investment sub-advisory services to be provided by Gargoyle should also benefit from increased assets as the TCW Fund’s option portfolio would balance more frequently. Lastly, the RiverPark Board determined that a larger amount of assets in the TCW Fund would increase Gargoyle’s profitability which should allow Gargoyle to optimally support the TCW Fund for the benefit of its shareholders into the foreseeable future.

 

    The RiverPark Board considered the new relationship among the TCW Fund, TCW and Gargoyle and determined that they were satisfied with the new relationship as it would not have an adverse effect on Gargoyle, in its capacity as the sub-adviser and the services that Gargoyle will provide to the TCW Fund. Additionally, the RiverPark Board was satisfied with the experience that TCW has as an investment manager to mutual funds and believed that TCW would be able to provide similar services to the TCW Fund as RiverPark is currently providing to the RiverPark Fund.

 

    The RiverPark Board reviewed the investment objectives, investment strategies, and investment restrictions of both Funds, discussed certain aspects of each, and concluded that the Funds have the same investment objective and substantially similar investment strategies. The RiverPark Board further discussed, that although some differences exist between the fundamental investment restrictions of the Funds, the fundamental investment restrictions of the Funds are substantially similar.

 

    The RiverPark Board considered the tax consequences of the Reorganization and the requirement that RiverPark Fund receive an opinion from Paul Hastings as to the tax-free treatment of the transaction. It was noted that under a tax-free reorganization, RiverPark Fund shareholders would not realize any gain or loss on the exchange of their shares for the TCW Fund’s shares. In addition, the TCW Fund shares received by RiverPark Fund’s shareholders should have the same tax basis as RiverPark Fund shares previously held. The tax basis of the assets of RiverPark Fund would be carried over to the TCW Fund and the TCW Fund should not realize any gain or loss on the transaction.

 

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    The RiverPark Board considered the fact that the investment management fee of the TCW Fund was the same as the investment management fee of the RiverPark Fund. However, the RiverPark Board noted that TCW Fund’s total fees (as estimated by TCW) would be more than the total operating expense currently paid by the RiverPark Fund.

 

    The RiverPark Board considered the differences in the distribution, account maintenance and account servicing fees from those fees currently borne by RiverPark Fund shareholders and observed that the TCW Fund would pay a distribution fee with respect to the N Class shareholders of the TCW Fund.

 

    The RiverPark Board considered the proposed distribution and service (12b-1) fee to be charged to the Class N shareholders of the TCW Fund. The RiverPark Board noted that whereas, the RiverPark Fund does not have a distribution and service (12b-1) fee for its Retail Class shareholders, it does have a shareholder servicing fee and an administrative servicing fee for the Retail Class shareholders, which permits the RiverPark Fund to pay up to 0.25% and 0.15%, respectively, of its net assets for shareholder servicing and administrative costs. The RiverPark Board recognized that the 12b-1 fee for the TCW Fund may be used to pay for marketing and distribution-related expenses as well as shareholder servicing, whereas, the shareholder servicing fee and administrative servicing fee of the RiverPark Fund may only be used to compensate intermediaries for shareholder servicing and administration expenses. However, the RiverPark Board noted that the total expenses that Class N shareholders will pay in the TCW Fund are substantially the same as the total expenses currently paid by the Retail Class shareholders of the RiverPark Fund because the TCW Fund will have the same expense limitation of 1.50% as the RiverPark Fund currently has.

 

    The RiverPark Board considered that there were differences in the shareholder servicing practices of each Fund.

 

    The RiverPark Board considered the fact that TCW would pay all customary costs relating to the proposed Reorganization, including the costs relating to the Special Meeting and the Proxy Statement, as described in the Reorganization Agreement. The RiverPark Board further discussed the fact that, under the Reorganization Agreement, the TCW Fund would assume all of the specified liabilities of RiverPark Fund (excluding liabilities not incurred in the ordinary course of business). The RiverPark Board considered that the Reorganization was not expected to result in taxable income or gain or other adverse federal tax consequences to shareholders.

After consideration, the RiverPark Board, including the Independent Trustees, concluded that the Reorganization would be in the best interests of the RiverPark Fund and its shareholders, and that the interests of existing shareholders in RiverPark Fund would not be diluted as a result of the transactions contemplated by the Reorganization. In reaching their decision, the RiverPark Board did not identify any particular information that was controlling, and it is likely that each RiverPark Board member individually attributed different weights to the various factors considered.

Fees and Expenses of the Reorganization

TCW will pay all customary costs relating to the proposed Reorganization, including the costs relating to the Special Meeting and the Proxy Statement, as described in the Reorganization Agreement. The RiverPark Fund will not incur any expenses in connection with the Reorganization. The aggregate expenses of the Reorganization to be incurred by TCW are estimated to be approximately $300,000.

U.S. Federal Income Tax Consequences of the Reorganization

The Reorganization is expected to qualify for U.S. federal income tax purposes as a tax-free reorganization under Section 368(a) of the Code, and thus is not expected to result in the recognition of gain or loss by either the RiverPark Fund or its shareholders. As a condition to the Closing, the Funds will receive a legal opinion from Paul Hastings LLP (which opinion will be subject to certain qualifications and assumptions satisfactory to the

 

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Funds and will be based on representations from the Funds), to the effect that, on the basis of the existing provisions of the Code, the Treasury Regulations promulgated thereunder, current administrative rules, pronouncements and court decisions, for federal income tax purposes:

 

    The Reorganization will constitute a reorganization within the meaning of Section 368(a) of the Code, and each of the Funds will be a “party to a reorganization” within the meaning of Section 368(b) of the Code;

 

    Under Section 1032 of the Code, no gain or loss will be recognized by the TCW Fund upon the receipt of the assets of the RiverPark Fund in exchange for Reorganization Shares and the assumption by the TCW Fund of the liabilities of the RiverPark Fund;

 

    Under Section 362(b) of the Code, the basis in the hands of the TCW Fund of the assets of the RiverPark Fund transferred to the TCW Fund in the Reorganization will be the same as the basis of such assets in the hands of the RiverPark Fund immediately prior to the transfer;

 

    Under Section 1223(2) of the Code, the holding periods of the assets of the RiverPark Fund in the hands of the TCW Fund will include the periods during which such assets were held or treated for federal income tax purposes as held by the RiverPark Fund;

 

    Under Sections 361 and 357 of the Code, no gain or loss will be recognized by the RiverPark Fund upon the transfer of its assets to the TCW Fund in exchange for Reorganization Shares and the assumption by the TCW Fund of all of the liabilities of the RiverPark Fund, or upon the distribution of Reorganization Shares by the RiverPark Fund to its shareholders in liquidation;

 

    Under Section 354 of the Code, no gain or loss will be recognized by RiverPark Fund shareholders upon the exchange of their shares of the RiverPark Fund for Reorganization Shares;

 

    Under Section 358 of the Code, the aggregate basis of Reorganization Shares a shareholder of the RiverPark Fund receives in connection with the Reorganization will be the same as the aggregate basis of such shareholder’s RiverPark Fund shares exchanged therefor;

 

    Under Section 1223(1) of the Code, a RiverPark Fund shareholder’s holding period for his, her, or its Reorganization Shares will include the period for which such shareholder held or is treated for federal income tax purposes as having held the RiverPark Fund shares exchanged therefor, provided that the shareholder held the RiverPark Fund shares as capital assets; and

 

    The TCW Fund will succeed to and take into account the items of the RiverPark Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the Regulations thereunder.

Each opinion will be based on factual certifications made by officers of the Funds, and on customary assumptions. No opinion is a guarantee that the tax consequences of the Reorganization will be as described above. Opinions of counsel are not binding upon the IRS or the courts. There is no assurance that the Internal Revenue Service (“IRS”) or a court would agree with either opinion.

If the transfer of the assets of the RiverPark Fund in exchange for the Reorganization Shares and the assumption by the TCW Fund of the liabilities of the RiverPark Fund were not to constitute a tax-free reorganization, the shareholders of the RiverPark Fund generally would recognize gain or loss equal, with respect to a particular shareholder, to the difference between the value of the Reorganization Shares the shareholder receives and the tax basis of the shareholder’s shares in the RiverPark Fund.

Although the Reorganization is expected to be tax-free for shareholders, the RiverPark Fund may make one or more distributions to shareholders prior to the Closing. Any such distribution generally will be taxable as ordinary income or capital gains to shareholders that hold their shares in a taxable account.

 

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Section 15(f) of the 1940 Act

Section 15(f) of the 1940 Act provides that an investment adviser (such as RiverPark) to a registered investment company may receive any amount or benefit in connection with a sale of any interest in such investment adviser that results in an assignment of an advisory contract if the following two conditions are satisfied: (1) for a period of three years after such assignment, at least 75% of the board of directors/trustees of the investment company cannot be “interested persons” (as defined in the 1940 Act) of the new or former investment adviser; and (2) no “unfair burden” may be imposed on the investment company as a result of the assignment or any express or implied terms, conditions or understandings applicable to the transaction. The term “unfair burden,” as defined in the 1940 Act, includes any arrangement during the two-year period after a change of control whereby the investment adviser (or predecessor or successor adviser), or any interested person of any such adviser, receives or is entitled to receive any compensation, directly or indirectly, from the investment company or its security holders (other than fees for bona fide investment advisory or other services), or from any person in connection with the purchase or sale of securities or other property to, from or on behalf of the investment company (other than ordinary fees for bona fide principal underwriting services). The RiverPark Board is aware that RiverPark will receive compensation from TCW. However, the RiverPark Board has been informed by TCW that TCW and the TCW Fund (with respect to the composition of its board) intend to comply with the section 15(f) safe harbor.

Existing and Pro Forma Capitalizations of the Funds

The following tables set forth, as of March 31, 2015: (i) the unaudited capitalization of the RiverPark Fund; (ii) adjustments to the unaudited pro forma capitalization of the TCW Fund; and (iii) the unaudited pro forma capitalization of the TCW Fund assuming the Reorganization has been completed, based upon the valuation policies and procedures for the RiverPark Fund and TCW Fund, respectively. The capitalizations are likely to be different when the Reorganization is scheduled to be completed as a result of daily share purchase and redemption activity.

 

     RiverPark
Fund
     TCW
Fund
     Pro Forma
Adjustments
     Pro Forma
TCW Fund
 

NET ASSETS:

           

N Class

   $ —         $ 50,000       $ 14,411,896       $ 14,461,896   

I Class

     —           50,000         57,811,633         57,861,633   

Retail Class

     14,411,896         —           (14,411,896      —     

Institutional Class

     57,811,633         —           (57,811,633      —     
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

$ 72,223,529    $ 100,000    $ —      $ 72,323,529   
  

 

 

    

 

 

    

 

 

    

 

 

 

SHARES OUTSTANDING:

N Class

  —        5,000.000      1,441,189.600      1,446,189.600   

I Class

  —        5,000.000      5,781,163.300      5,786,163.300   

Retail Class

  1,047,728.414      (1,047,728.414   —     

Institutional Class

  4,193,442.698      (4,193,442.698   —     

NET ASSET VALUE:

N Class

$ —      $ 10.00    $ 10.00   

I Class

$ —      $ 10.00    $ 10.00   

Retail Class

$ 13.76    $ —     

Institutional Class

$ 13.79    $ —     

The table set forth above should not be relied upon to calculate the number of shares to be received in the Reorganization; the actual number of shares to be received will depend upon the net asset value and number of shares outstanding of each Fund at the time of the Reorganization.

 

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COMPARISON OF ORGANIZATION, STRUCTURE AND GOVERNANCE OF THE FUNDS

The following summary highlights certain differences between the Funds. This summary is not complete and does not contain all of the information that you should consider before voting on the Reorganization. For more complete information about the Reorganization, please read this entire document and each Fund’s respective trust instruments and trust by-laws.

Comparison of Shareholder Rights and Corporate Governance

Governing Law

 

    The RiverPark Fund, a series of the RiverPark Trust, and the TCW Fund, a series of the TCW Trust, are both organized as Delaware statutory trusts. Each of the RiverPark Trust and the TCW Trust are governed both by the Delaware Statutory Trust Act (the “Delaware Act”) and their respective trust instruments and trust by-laws.

Authorized Shares

 

    The RiverPark Fund is authorized to issue an unlimited number of shares of beneficial interest, par value $0.001 per share.

 

    The TCW Fund is authorized to issue an unlimited number of shares of beneficial interest, with no par value unless otherwise determined by the Trustees in connection with the creation and establishment of a series or class.

Board Members

 

    The RiverPark Trust has five trustees (“RiverPark Trustees”), two of whom are “interested persons” of the RiverPark Trust, as that term is defined under the 1940 Act. For more information, refer to the RiverPark SAI Information dated January 28, 2015, for the RiverPark Trust, which is incorporated by reference into this Proxy Statement/Prospectus.

 

    Each RiverPark Trustee shall hold office until his or her successor has been elected and has qualified to serve as a RiverPark Trustee, as required under the 1940 Act. Any RiverPark Trustee may resign (without need for prior or subsequent accounting) by an instrument in writing signed by him or her and delivered to the other RiverPark Trustees or the Chairman of the RiverPark Trust, if any, the President or the Secretary and such resignation shall be effective upon such delivery or at any later date according to the terms of the instrument. Any of the RiverPark Trustees may be removed with or without cause at any time: (1) by the action of two-thirds of the remaining RiverPark Trustees or (2) by the affirmative vote of the shareholders holding not less than two-thirds of the shares outstanding. Upon the resignation or removal of a RiverPark Trustee, or his or her otherwise ceasing to be a RiverPark Trustee due to death or legal disability, he or she shall, or in the case of death or legal disability, his or her legal representative shall, execute and deliver such documents as the remaining RiverPark Trustees shall require for the purpose of conveying to the RiverPark Trust or the remaining RiverPark Trustees any RiverPark Trust property held in his or her name. Generally the RiverPark Trustees have the authority under the RiverPark Trust’s trust instrument to fill vacancies as they in their discretion see fit by a majority vote of the RiverPark Trustees continuing in office consistent with the limitations under the 1940 Act.

 

    The TCW Trust has four trustees, one of whom is an “interested person” of the TCW Trust, as that term is defined under the 1940 Act. For more information, refer to the Reorganization SAI.

 

   

The Trustees of the TCW Trust hold office during the existence of the TCW Trust except that (a) any Trustee may resign, (b) any Trustee may be removed with or without cause by the affirmative vote of

 

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the shareholders of two thirds (2/3) of the shares, or (c) any Trustee may be removed with cause by the action of two-thirds of the remaining of Trustees. Generally the Trustees have the authority under the TCW Trust Instrument to fill vacancies as they in their discretion see fit consistent with the limitations under the 1940 Act.

Shareholder Liability

 

    Under the Delaware Act, unless the governing instrument provides otherwise, shareholders of a statutory trust have the same limitation of personal liability as extended to shareholders of private corporations for profit organized under the Delaware General Corporation Law.

 

    The RiverPark Trust Instrument provides that each shareholder of the RiverPark Trust and of each series shall not be personally liable for the obligations of the RiverPark Trust under Section 3803(a) of the Delaware Statutory Trust Act. The RiverPark Trust Instrument states that the RiverPark Trust shall indemnify and hold each shareholder harmless from and against any claim or liability to which such shareholder may become subject solely by reason of its being or having been a shareholder and not because of such shareholder’s acts or omissions or for some other reason, and shall reimburse such shareholder for all legal and other expenses reasonably incurred by it in connection with any such claim or liability (upon proper and timely request by the shareholder); proved, however, that no shareholder shall be entitled to indemnification by any series unless such shareholder is a shareholder of such series.

 

    The RiverPark Trust Instrument provides that each shareholder of the RiverPark Trust and of each series shall not be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to, the RiverPark Trust or by or on behalf of one of any series. The RiverPark Trust Instrument further provides that the Trustees shall have no power to bind any shareholder personally or to call upon any shareholder for the payment of any sum of money or assessment whatsoever other than what the shareholder may at any time personally agree to pay by way of subscription for any share or otherwise.

 

    The TCW Trust Instrument provides that each shareholder of the TCW Trust and of each series shall not be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to, the TCW Trust or by or on behalf of one of any series. The TCW Trust Instrument further provides that the Trustees shall have no power to bind any shareholder personally or to call upon any shareholder for the payment of any sum of money or assessment whatsoever other than what the shareholder may at any time personally agree to pay by way of subscription for any share or otherwise.

Voting Rights

Pursuant to the RiverPark Trust Instrument on each matter submitted to a vote of the shareholders, each shareholder in each series shall be entitled to vote proportionate to its shares in such series as recorded on the books of the RiverPark Trust and all shareholders in each series shall vote as a separate class except as to voting for RiverPark Trustees and as otherwise required by the 1940 Act, in which case all shareholders shall vote together as a single class. As to any matter that does not affect the interest of a particular series or class, only the shareholders of the one or more affected series or class shall be entitled to vote.

Pursuant to the RiverPark Trust’s By-Laws, shareholders of at least one-third of the shares of the series (if the meeting relates to that series) or shareholders of at least one-third of the shares of the RiverPark Trust (if the meeting relates to the RiverPark Trust and not solely to a particular series), present in person or by proxy, shall constitute a quorum for the transaction of any business, except as may otherwise by required by the 1940 Act or other applicable law or by the RiverPark Trust Instrument or the RiverPark Trust’s By-Laws. If a quorum is present at a meeting, an affirmative vote by the shareholders present, in person or by proxy, holding a majority of

 

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the shares of the shareholders present, either in person or by proxy, at such meeting constitutes the action of the shareholders, unless the 1940 Act, other applicable law, the RiverPark Trust Instrument or the RiverPark Trust’s By-Laws require a greater number of affirmative votes.

TCW Trust shareholders do not have cumulative voting rights in the election of any Trustee(s). Shares of the TCW Trust may be voted in person or by proxy.

Pursuant to the TCW Trust Instrument, shareholders have the power to vote only (i) for the election of Trustees, (ii) for the removal of Trustees and (iii) with respect to such additional matters relating to the TCW Trust as may be required by law, by the TCW Trust Instrument or as the Trustees may consider desirable. On any matter submitted to a vote of the shareholders, all shares of all series and classes shall vote together as a single class, except (i) when a separate vote of any series or class is required by the 1940 Act or other applicable law or is required by attributes applicable to any series or class, (ii) when a matter affects more than one series or class and the interests of each such series or class in the matter are identical, then the shares of all such affected series or classes shall vote together as a single class, and (iii) when a matter does not affect the interests of a particular series or class, only the holders of shares of the one or more affected series or classes shall be entitled to vote. The Trustees may determine whether a matter affects a series or class such that such series or class is entitled to vote.

Pursuant to the TCW Trust Instrument, one-third of shares entitled to vote in person or by proxy shall be a quorum for the transaction of business at a shareholder’s meeting except as may otherwise be required by the 1940 Act or the TCW Trust Instrument. Except when a larger vote is required by law or any provision of the TCW Trust Instrument, a majority of shares voted in person or by proxy shall constitute the action of the shareholders and a plurality shall elect a Trustee.

Annual Shareholder Meetings

 

    A Delaware statutory trust is not required to hold shareholder meetings or obtain shareholder approval for certain actions unless required by applicable law or the declaration of trust. Neither the RiverPark Trust Instrument or TCW Trust Instrument nor the RiverPark Trust By-Laws or TCW Trust By-Laws require the RiverPark Trust or TCW Trust to hold shareholder meetings.

Shares Classes. The RiverPark Fund and the TCW Fund are each separate series of the RiverPark Trust and the TCW Trust, respectively, and each may include more than one class of shares. Currently, the RiverPark Fund offers Retail Class and Institutional Class shares and the TCW Fund offers N Class and I Class shares. Each share of a series or class represents an equal proportionate interest in that series or class with each other share of that series or class.

Retail Class shareholders of the RiverPark Fund will receive N Class shares of the TCW Fund in the Reorganization, while Institutional Class shareholders of the RiverPark Fund will receive I Class shares of the TCW Fund in the Reorganization.

While the RiverPark Fund has authorized Class C shares, there are no Class C shareholders outstanding as such shares are not currently being offered for sale to investors. Furthermore, the TCW Fund will not offer Class C shares.

The TCW Board has reserved the right to create and issue additional classes of shares of the TCW Fund.

Liability and Indemnification of Board Members. The 1940 Act prohibits the charter, bylaws and other organizational documents of a registered investment company from containing a provision that protects or purports to protect any director or officer of the investment company against liability to the company or

 

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shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his office.

 

    The Delaware Act permits a Delaware statutory trust instrument to limit or eliminate a trustee’s personal liability for breach of contract or breach of duties to the statutory trust or to a shareholder of the statutory trust, subject to certain exceptions. See e.g. 12 Del.C. §§3806(c)-(e).

 

    The RiverPark Trust Instrument provides that a Trustee shall be entitled to the protection against personal liability for the obligations of the RiverPark Trust under Section 3803(b) of the Delaware Act. The RiverPark Trust Instrument further states that no RiverPark Trustee shall be liable to the RiverPark Trust, its shareholders or to any RiverPark Trustee, officer employee or agent thereof for any action or failure to act (including the failure to compel in any way any former or acting RiverPark Trustee to redress any breach of trust) except for his or her own bad faith, willful misfeasance, gross negligence or reckless disregard of his or her duties.

 

    The RiverPark Trust Instrument also provides that the RiverPark Trust shall indemnify each of its Trustees against all liabilities and expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees) reasonably incurred by such Trustee in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, in which such Trustee may be involved or with which such Trustee may be threatened, while in office or thereafter, by reason of such Trustee being or having been such a Trustee, except with respect to any matter as to which such Trustee shall have been adjudicated, by the final and unappealable order of a court of competent jurisdiction, to have acted in bad faith, willful misfeasance, gross negligence or reckless disregard of such Trustee’s duties, such liabilities and expenses being liabilities belonging to the series out of which such claim for indemnification arises; provided, however, that as to any matter disposed of by a compromise payment by such Trustee, pursuant to a consent decree or otherwise, no indemnification either for said payment or for any other expenses shall be provided unless there has been a determination that such Trustee did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office by the court or other body approving the settlement or other disposition or, in the absence of a judicial determination, by a reasonable determination, based upon a review of readily available facts (as opposed to a full trial-type inquiry), that such Trustee did not engage in such conduct, which determination shall be made by a majority of a quorum of Trustees who are neither Interested Trustees of the Trust nor parties to the action, suit or proceeding, or by written opinion from independent legal counsel approved by such Trustees. The rights accruing to any Trustee under these provisions shall not exclude any other right to which such Trustee may be lawfully entitled; provided that no Trustee may satisfy any right of indemnity or reimbursement granted herein or to which he may be otherwise entitled except out of the Trust Property.

 

    The TCW Trust Instrument provides that a Trustee, when acting in such capacity, shall be entitled to the protection against personal liability for the obligations of the TCW Trust and that a Trustee shall not be liable to the TCW Trust, its shareholders, or to any Trustee, officer, employee, or agent thereof for any action or failure to act (including, without limitation, the failure to compel in any way any former or acting Trustee to redress any breach of trust) except for his own bad faith, willful misconduct, or gross negligence. Further, the TCW Trust Instrument provides that the Trustees will not be responsible or liable in any event for any neglect or wrongdoing of any officer, agent, employee, manager, adviser, sub-adviser, administrator or principal underwriter of the TCW Trust.

 

    The TCW Trust Instrument also provides that, subject to certain exceptions, a Trustee or officer shall be indemnified against all liabilities and expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and expenses including reasonable accountants’ and counsel fees) reasonably incurred in connection with the defense or disposition of any action, suit or other proceeding of any kind and nature whatsoever, whether brought in the right of the TCW Trust or otherwise, and whether of a civil, criminal or administrative nature by reason of being or having been a Trustee, except with respect to any matter in which such Trustee would otherwise subject to liability by reason of bad faith, willful misconduct or gross negligence.

 

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Amendments to Governing Documents

Two-thirds (2/3) or more of the RiverPark Trustees then in office may amend the Trust Instrument at any time for any purpose without the approval of the shareholders; provided, that the vote or a written or other legally permissible form of consent of shareholders holding, in the aggregate, a majority of the outstanding shares or of shareholders of two-thirds (2/3) or more of the shares voting or consenting, if shareholders of at least a majority of such shares vote or consent, shall be necessary to approve any amendment whenever such vote or consent is required under the 1940 Act.

The RiverPark Trustees have the power to alter, amend or repeal the RiverPark Trust’s By-Laws (“By-Laws”) or adopt new By-Laws at any time. Action by the RiverPark Trustees with respect to the By-Laws shall be taken by an affirmative vote of majority of the RiverPark Trustees. The RiverPark Trustees shall in no event adopt By-Laws which are in conflict with the RiverPark Trust Instrument.

The Trustees may, without a shareholder vote, amend or otherwise supplement the TCW Trust Instrument, except that shareholders have the right to vote on (i) any amendment which would affect their right to vote as provided in the TCW Trust Instrument, (ii) any amendment to the section of the TCW Trust Instrument governing amendments thereof, (iii) any amendment required by the 1940 Act and (iv) any amendment submitted to them by the Trustees. The TCW Trust By-Laws may be amended by the Trustees.

Comparison of Fundamental and Non-Fundamental Investment Restrictions

The Funds are each subject to certain fundamental and non-fundamental investment restrictions regarding their investments. While many of the Funds’ fundamental investment restrictions are substantially similar, there are differences that the RiverPark Fund shareholders should consider. In particular, the RiverPark Fund may not invest in physical commodities whereas the TCW Fund may make such investments. The RiverPark Fund may not purchase real estate mortgage loans whereas the TCW Fund may make such investments. The RiverPark Fund may only lend assets in connection with its securities lending policy whereas the TCW Fund may make loans as permitted by applicable law. The RiverPark Fund does not have a fundamental investment restriction with respect to the purchase of securities on margin whereas the TCW Fund may purchase securities on margin. The differences in fundamental and non-fundamental restrictions between the Funds are not expected to result in any material differences in how the respective Funds are managed. A fundamental investment restriction may not be changed without the affirmative vote of the holders of a majority of a Fund’s outstanding securities (as defined in the 1940 Act), while non-fundamental investment restrictions may be changed by the board of the Fund without shareholder approval. The RiverPark Fund is subject to certain non-fundamental investment restrictions regarding their investments that may only be changed by a vote of the RiverPark Board, whereas the TCW Fund is not subject to such non-fundamental investment restrictions. The table below compares the fundamental investment restrictions of the Funds.

 

Restriction

  

RiverPark Fund

  

TCW Fund

Borrowing   

May not borrow money except that it may borrow:

 

(a) for leveraging purposes,

 

(b) from banks for temporary or emergency purposes, such as to meet unanticipated shareholder redemptions, or

 

(c) by entering into reverse repurchase agreements, if, immediately after any such borrowing, the value of the Fund’s assets, including all borrowings then outstanding less its

   May not borrow money except as permitted under, or to the extent not prohibited by, the 1940 Act, and rules thereunder, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

 

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Restriction

  

RiverPark Fund

  

TCW Fund

   liabilities, is equal to at least 300% of the aggregate amount of borrowings then outstanding (for the purpose of determining the 300% asset coverage, the Fund’s liabilities will not include amounts borrowed). Any such borrowings may be secured or unsecured. The Fund may issue securities (including senior securities) appropriate to evidence the indebtedness, including reverse repurchase agreements, which the Fund is permitted to incur.   
Senior Securities    May not issue senior securities other than to evidence indebtedness, borrowings or short sales as permitted.    May not issue senior securities except as permitted under, or to the extent not prohibited by, the 1940 Act, and rules thereunder, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.
Physical Commodities    May not purchase or sell commodities or commodity contracts.    May invest in commodities only as permitted by the 1940 Act or other governing statute, by the rules thereunder, or by the SEC or other regulatory agency with authority over the Fund. This restriction shall not prohibit the Fund from purchasing or selling securities or other instruments backed by commodities or from purchasing, selling or entering into futures contracts, options on futures contracts, foreign currency forward contracts, foreign currency options, interest rate or securities-related or foreign currency-related hedging instruments, swap agreements or other derivative instruments, subject to compliance with any applicable provisions of the federal securities or commodities laws.
Underwriting    May not underwrite or participate in the marketing of securities issued by other persons except to the extent that the Fund may be deemed to be an underwriter under federal securities laws in connection with the disposition of portfolio securities.    May not underwrite securities of other companies, except insofar as the Fund may be deemed to be an underwriter for purposes of the Securities Act of 1933 by virtue of disposing of portfolio securities.

 

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Restriction

  

RiverPark Fund

  

TCW Fund

Real Estate    May not purchase or sell real estate or real estate mortgage loans as such, but this restriction shall not prevent the Fund from investing in readily marketable interests in real estate investment trusts, readily marketable securities of companies that invest in real estate, or obligations secured by real estate or interests therein.    May not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments, although it may (i) purchase or sell securities or instruments secured by real estate or interests therein or representing interests in real estate, (ii) make, purchase or sell real estate mortgage loans, or (iii) purchase or sell securities or instruments issued by issuers which invest, deal or otherwise engage in real estate or interests therein.
Lending    May not lend any of its assets, except as permitted under the securities lending policy set forth below under the Fund’s non-fundamental policies.    May not make loans except as permitted under, or to the extent not prohibited by, the 1940 Act, and rules thereunder, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.
Pledge /Mortgage/ Hypothecate Assets    May not pledge, mortgage or hypothecate its assets, except to secure borrowings (as set forth above), or with respect to a securities lending program. Notwithstanding anything to the contrary herein, the Fund may pledge collateral in connection with investments in certain derivative transactions permitted in its prospectus and statement of additional information.    See borrowings above.
Margin    N/A    May not purchase securities on margin, except for use of short-term credit necessary for clearance of purchases and sales of portfolio securities, but it may make margin deposits in connection with covered transactions in options, futures and options on futures. For purposes of this restriction, the posting of margin deposits or other forms of collateral in connection with swap agreements is not considered purchasing securities on margin.

 

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Restriction

  

RiverPark Fund

  

TCW Fund

Industry Concentration    May not concentrate its investments in any industry, with the exception of securities issued or guaranteed by the U.S. Government, its agencies, and instrumentalities.    May not purchase any securities that would cause 25% or more of the value of the Fund’s total assets at the time of purchase to be invested in the securities of any one particular industry or group of industries, provided that this limitation shall not apply to the Fund’s purchase of U.S. Government Securities.
Diversification Status    May not change its diversification status under the 1940 Act.    May not change its diversification status under the 1940 Act.

In addition, while the TCW Fund is not subject to any non-fundamental investment restrictions that may be changed only by a vote of the TCW Board, the RiverPark Fund is subject to the non-fundamental restrictions set forth in Appendix B, which may only be changed by a vote of the RiverPark Board. Non-fundamental investment restrictions may be changed without shareholder approval.

Comparison of Investment Advisers and Investment Advisory Fees

Investment Advisers and Sub-Advisers

RiverPark Fund

The management of the RiverPark Fund is supervised by the RiverPark Board. RiverPark serves as the RiverPark Fund’s investment adviser. RiverPark was formed in July 2009 and is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended. RiverPark is a wholly-owned subsidiary of RiverPark Holding Group LLC, a Delaware limited liability company (“RP Holding Group”), and is 84.3% owned by employees and is controlled by Morty Schaja. Wedgwood is a minority shareholder of RP Holding Group. Mr. Schaja, CFA, is RiverPark’s Chief Executive Officer, and Mr. Rubin, CFA, is RiverPark’s Co-Chief Investment Officer. RiverPark Capital Management LLC, an affiliate of the RiverPark, provides investment management services to separate accounts and partnerships. Together, RiverPark and RiverPark Capital Management LLC had approximately $3.9 billion in assets under management, as of December 31, 2014.

RiverPark provides investment advisory services to the RiverPark Fund pursuant to an investment advisory agreement entered into with the RiverPark Trust (the “RiverPark Advisory Agreement”). Under the general supervision of the RiverPark Board, RiverPark, by hiring a sub-adviser, carries out the investment and reinvestment of the assets of the RiverPark Fund, furnishes continuously an investment program with respect to the RiverPark Fund, determines which securities should be purchased, sold or exchanged, and implements such determinations. RiverPark furnishes to the RiverPark Fund investment advice and office facilities, equipment and personnel for servicing the investments of the RiverPark Fund. RiverPark compensates all trustees and officers of the RiverPark Fund who are members of the RiverPark’s organization and who render investment services to the RiverPark Fund, and also compensates all other RiverPark personnel who provide research and investment services to the RiverPark Fund. In return for these services, facilities and payments, the RiverPark Fund has agreed to pay RiverPark as compensation under the RiverPark Advisory Agreement a monthly fee computed at a fixed annual rate of 0.90% of the average daily net assets of the RiverPark Fund. For the fiscal year ended September 30, 2014, RiverPark received a total fee of 0.95% (as a percentage of average net assets). RiverPark contractually received an advisory fee of 0.90% and received an additional fee of 0.05% that represents the recapture of previously waived expenses.

RiverPark has agreed contractually to waive its fees and to absorb expenses of the RiverPark Fund to the extent necessary to ensure that ordinary operating expenses of each class (excluding interest, brokerage

 

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commissions, dividends on short sales and interest expense on securities sold short, acquired fund fees and expenses and extraordinary expenses) do not exceed certain percentages of the RiverPark Fund’s average net assets. The RiverPark Fund has agreed to repay RiverPark in the amount of any fees waived and RiverPark Fund expenses absorbed, subject to certain limitations that: (1) the reimbursement is made only for fees and expenses incurred not more than three years prior to the date of reimbursement; and (2) the reimbursement may not be made if it would cause the annual expense limitation in effect at the time of the waiver to be exceeded. Any waivers and/or reimbursements that are subject to repayment from the RiverPark Fund will carry over to the TCW Fund following the Reorganization. There will be no extension of the recoupment period with respect to those prior waivers and reimbursements. Currently, the amount of non-captured fee waivers owed by the RiverPark Fund is approximately $50,492. The expense limitation for the Retail Class of the RiverPark Fund, expressed as a percentage of average net assets, is 1.50% and the expense limitation for the Institutional Class of the RiverPark Fund, expressed as a percentage of net assets, is 1.25%.

This arrangement will remain in effect unless and until the RiverPark Board approves its modification or termination.

RiverPark is responsible for selecting a sub-adviser to manage the assets of the RiverPark Fund. The sub-adviser is engaged to manage the investments of the RiverPark Fund in accordance with the RiverPark Fund’s investment objective, policies and limitations and any investment guidelines established by RiverPark and the RiverPark Board. The sub-adviser is responsible, subject to the supervision and control of RiverPark and the RiverPark Board, for the purchase, retention and sale of securities in the RiverPark Fund’s investment portfolio under its management.

RiverPark pays the sub-adviser an annual fee based upon the net assets managed by such sub-adviser from the management fee paid to RiverPark pursuant to the RiverPark Advisory Agreement. The RiverPark Fund is not responsible for the payment of this sub-advisory fee.

Gargoyle, a New York limited liability company formed in 1999, is the managing member and investment manager of a number of investment partnerships and is the sub-adviser to the RiverPark Fund. Gargoyle is located at 285 Grand Avenue, Building One, Englewood, NJ 07631. Gargoyle is principally owned by Gargoyle Group Holdings L.L.C. and is controlled by Alan S. MacKenzie, Jr., Phillip S. Martin, Joshua B. Parker and Alan L. Salzbank, principals of Gargoyle Group Holdings L.L.C. Gargoyle had approximately $411 million in assets under management and an additional $75 million in assets under advisement as of December 31, 2014.

Gargoyle entered into an Investment Sub-Advisory Agreement between RiverPark and Gargoyle, dated March 12, 2012, with respect to the RiverPark Fund (the “RiverPark Sub-Advisory Agreement”). Pursuant to the RiverPark Sub-Advisory Agreement, Gargoyle receives fees from RiverPark to provide the services described above. These fees are paid out of the advisory fees RiverPark receives from the RiverPark Fund and are not separately paid by the RiverPark Fund.

A discussion regarding the basis for the RiverPark Board’s approval of the continuance of the RiverPark Advisory Agreement and the RiverPark Sub-Advisory Agreement is available in the RiverPark Fund’s annual report to shareholders for the period ended September 30, 2014.

TCW Fund

The Fund’s investment adviser is TCW. TCW was organized in 1987 as a wholly owned subsidiary of The TCW Group, Inc. (“TCW Group”). TCW is registered with the SEC as an investment adviser under the Advisers Act.

As of March 31, 2015, TCW and its affiliated companies, which provide a variety of trust, investment management and investment advisory services, had approximately $179.3 billion in assets under management or committed to management.

 

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The TCW Trust, on behalf of the TCW Fund, and TCW have entered into an Investment Advisory and Management Agreement (the “TCW Advisory Agreement”), under the terms of which the TCW Fund has employed TCW to, subject to the direction and supervision of the TCW Board, provide investment advisory and management services, including, among others, managing the investment of the assets of the TCW Fund, administering the day-to-day operations of the TCW Fund, furnishing to the TCW Trust office space and all necessary office facilities, supplies and equipment, and arranging for officers or employees of TCW to serve, without compensation from the TCW Trust, as officers, trustees or employees of the TCW Trust.

Pursuant to the TCW Advisory Agreement, TCW may employ one or more sub-advisers as TCW may believe to be particularly fitted to assist TCW in the performance of the TCW Advisory Agreement, provided that the compensation of any sub-adviser shall be paid by TCW. Currently, the TCW Fund has one sub-adviser, Gargoyle.

Management Fees and Other Expenses

Under the TCW Advisory Agreement, the TCW Fund pays to TCW as compensation for the services rendered, facilities furnished, and expenses paid by it the following management fees:

 

Fund

  

Annual Management Fee

(As Percent of Average

Net Asset Value)

 

TCW Fund

     0.90

TCW, not the TCW Fund, is responsible for the payment of sub-advisory fees to Gargoyle. Under the Investment Sub-Advisory Agreement (the “TCW Sub-Advisory Agreement”) with Gargoyle, TCW pays to Gargoyle as compensation for the services rendered thereunder the following sub-advisory fees:

 

TCW/Gargoyle Hedged Value Fund

   0.38% - 0.70%*

 

* Varies based on average net asset value and Fund and Adviser expenses.

Pursuant to the Operating Expenses

Pursuant to the Operating Expenses Agreement, TCW has agreed to waive its investment management fee and/or reimburse the operating expenses of the TCW Fund to the extent the TCW Fund’s operating expenses (excluding taxes, interest, brokerage commissions, dividends on securities sold short, acquired fund fees and expenses, and extraordinary expenses) exceed, in the aggregate, the rate per annum, as set forth below.

 

Fund

  

Expense Cap

(As Percent of Average

Net Asset Value)

 

TCW Fund

  

Class N

     1.50

Class I

     1.25

This contractual fee waiver/expense reimbursement will remain in place through October 31, 2017. During this term, only the TCW Board may terminate or modify the terms of the Operating Expenses Agreement. TCW may request recoupment of previously waived fees and paid expenses from the TCW Fund for three years from the date they were waived or paid, subject to any applicable expense caps at the time of recoupment or at the time of waiver and/or reimbursement, whichever is lower. If TCW does not agree to waive fees and/or reimburse expenses after October 31, 2017, the fees and expenses paid by shareholders of the TCW Fund will increase.

 

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The TCW Advisory Agreement and the TCW Sub-Advisory Agreement were approved by a majority of the TCW Board, including the Trustees who are not “interested persons” of the Trust, as defined in the 1940 Act, (the “TCW Independent Trustees”), with respect to the TCW Fund, at an in-person meeting called for the purpose of voting on such approval and held on March 9, 2015. A discussion regarding the basis for the TCW Board’s approval of the TCW Advisory Agreement and the TCW Sub-Advisory Agreement for the TCW Fund will be contained in the TCW Trust’s semi-annual report to shareholders for the period ending April 30, 2015.

Manager of Managers Structure

TCW and the TCW Trust intend to apply for, and expect to receive, an exemptive order from the SEC to operate under a manager of managers structure that, subject to certain conditions, permits TCW, with the approval of the TCW Board, including a majority of the Independent Trustees, to appoint and replace sub-advisers, enter into sub-advisory agreements, and materially amend or terminate sub-advisory agreements on behalf of the TCW Fund without shareholder approval (the “Manager of Managers Structure”). There is no guarantee that such exemptive order will be granted. Under the Manager of Managers Structure, TCW has responsibility, subject to the oversight of the TCW Board, for evaluating the sub-advisers and recommending to the TCW Board their hiring, termination, or replacement. The exemptive order also permits the TCW Fund to disclose sub-advisory fees in the aggregate, and not individually, in the TCW Trust’s registration statement. The exemptive order does not apply to any sub-adviser that is affiliated with the TCW Trust or TCW.

The Manager of Managers Structure enables the TCW Fund to operate with greater efficiency and without incurring the expense and delays associated with obtaining shareholder approvals for matters relating to sub-advisers or sub-advisory agreements. Operation of the TCW Fund under the Manager of Managers Structure will not: (1) permit management fees paid by the TCW Fund to TCW to be increased without shareholder approval; or (2) diminish TCW’s responsibilities to the TCW Fund, including the TCW’s overall responsibility for overseeing the portfolio management services furnished by the sub-advisers. Shareholders will be notified of the hiring of a new sub-adviser within 90 days after the hiring of the new sub-adviser.

Sub-Adviser

As permitted by the TCW Advisory Agreement, TCW has retained Gargoyle, the same sub-adviser to the RiverPark Fund, to serve as the sub-adviser of the TCW Fund, pursuant to the TCW Sub-Advisory Agreement.

Gargoyle specializes in sophisticated equity options strategies. It provides investment management services to institutional investors through the use of an option overlay strategy for equity portfolios. It also acts as the investment manager to various hedge funds and as the sub-adviser to a mutual fund.

Pursuant to the TCW Sub-Advisory Agreement, Gargoyle has full discretionary authority to manage the investment and reinvestment of the TCW Fund’s assets, including the authority to purchase, sell, cover open positions, and generally deal in securities, derivatives and other property comprising or relating to the TCW Fund.

Portfolio Managers

Below are the backgrounds of the RiverPark executive team and the portfolio managers responsible for the day-to-day portfolio management of the RiverPark Fund.

Joshua B. Parker is the co-portfolio manager of the RiverPark Fund and has been a portfolio manager of the RiverPark Fund’s predecessor partnership since its inception. Mr. Parker has been Managing Partner of The Gargoyle Group since 1998. From 1988 through 1998, Mr. Parker was General Counsel, then Executive Vice President, of Kenmar Advisory Corp. and its affiliates, one of the leading managers of managers in the managed futures industry. From 1986 to 1988, Mr. Parker was a member of, and an options market-maker on, the

 

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American Stock Exchange. During this time, he also trained and sponsored a number of individuals to become successful on-floor options market-makers. From 1996 to 1999, Mr. Parker was also a member of the Government Relations Committee of the Managed Funds Association. Mr. Parker is a Bridge Gold Life Master, a former North American Bridge champion and has represented the United States in international bridge competitions. He is a graduate of Yale University and the New York University School of Law.

Alan L. Salzbank is the co-portfolio manager of the RiverPark Fund and has been a portfolio manager of the RiverPark Fund’s predecessor partnership since its inception. Mr. Salzbank has been Managing Partner of The Gargoyle Group since 1999. From 1987 to 1998, Mr. Salzbank was a member of the American Stock Exchange where, in addition to being a highly respected floor trader and market-maker, he advised specialist units and trading firms on options theory and strategy. Prior to that, Mr. Salzbank was a retail branch manager in the Paramus, New Jersey office of Gruntal & Co. (1985-1987), the Director of the futures department and a Limited Partner at Herzfeld & Stern (1980-1985). At Merrill Lynch, he was a Commodity Analyst and Futures Sales Specialist, as well as the founding editor of the Merrill Lynch “Weekly Futures Report” (1975-1980). Mr. Salzbank is a former Ivy League gymnastics champion. He is a graduate of the Wharton School of the University of Pennsylvania with a degree in Economics, and received an MBA from the New York University School of Business.

Mr. Rubin and Mr. Schaja oversee Gargoyle’s portfolio management of the RiverPark Fund.

Morty Schaja, CFA, is the Chief Executive Officer of RiverPark. Mr. Schaja graduated from Tel-Aviv University in 1975 with a BS in Physics and from Columbia University in 1976 with an MBA in finance and accounting. From 1977 to 1985, he was Vice President for Consulting with Data Resources, Inc., a leading economic consulting and forecasting firm. From 1986 through 1987, he was a Senior Analyst with Donaldson, Lufkin & Jenrette’s Stock Index Department. From 1987 until 1990, Mr. Schaja was Executive Vice President of First Security, a registered investment adviser and hedge fund adviser. From February 1991 through March 2006, Mr. Schaja had various responsibilities with Baron Capital leading to his position as President and Chief Operating Officer, where he managed the growth of the firm from $50 million in assets under management to over $15 billion. From June 2006 to April 2009, he was a managing general partner of RiverPark Capital LLC, a registered investment adviser that managed long only and long/short strategies for investment partnerships and separate accounts.

Mitchell Rubin, CFA, is the Co-Chief Investment Officer of RiverPark. Mr. Rubin received a BA in Economics and Political Science from the University of Michigan in 1988 and a JD from Harvard Law School in 1991. From 1991 to 1994, he was an associate at Latham & Watkins specializing in corporate finance transactions. From 1994 until joining Baron Capital in November of 1995, Mr. Rubin was an equity research analyst for Smith Barney, focusing on emerging growth stocks. In 1995, he joined Baron Capital as a research analyst covering consumer/retail, gaming/leisure/lodging and real estate. In 1999, he was co-portfolio manager for Baron Growth Fund. He served as portfolio manager for the Baron iOpportunity Fund, a technology-focused mutual fund, from the fund’s inception in March 2000 through March 2006, and was also the portfolio manager of Baron Fifth Avenue Growth Fund, a large-cap growth mutual fund, from the fund’s inception in May 2004 through March 2006. From June 2006 to June 2008, he was a managing general partner of RiverPark Partners, a long/short equity fund. From its inception on October 2, 2009, Mr. Rubin was the portfolio manager for the RiverPark Growth ETF and the leader of the team that managed the RiverPark Financials ETF.

The RiverPark SAI provides additional information about the portfolio managers at Gargoyle, including other accounts they manage, their ownership in the RiverPark Fund, and their compensation.

The co-portfolio managers for the TCW Fund are Messrs. Parker and Salzbank, the same portfolio managers as the RiverPark Fund (described above). Messrs. Parker and Salzbank have been the portfolio managers of the TCW Fund since its inception.

 

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Revenue Sharing Payments

RiverPark may at its own expense make payments to some, but not all brokers, dealers or financial intermediaries, as an incentive to sell shares of the RiverPark Fund and/or to promote retention of their customers’ assets in the RiverPark Fund. These payments sometimes referred to as “revenue sharing,” do not change the price paid by investors to purchase the RiverPark Fund’s shares or the amount the RiverPark Fund receive as proceeds from such sales.

Revenue sharing payments may be made to brokers, dealers and other financial intermediaries that provide services to the RiverPark Fund or its shareholders for marketing and distribution related activities or for shareholder servicing. These activities may include transaction processing, sub-accounting services, marketing support and/or access to representatives of the broker, dealer or other financial intermediaries. Revenue sharing payments also may be made to brokers, dealers and other financial intermediaries for inclusion of the RiverPark Fund on a sales list, including a preferred or select sales list. You may wish to consider whether such arrangements exist when evaluating any recommendation to purchase shares of the RiverPark Fund.

TCW pays certain costs of marketing the TCW Fund from legitimate profits from its management fees and other resources available to it. TCW may also share with financial intermediaries certain marketing expenses or pay for the opportunity to distribute the TCW Fund, sponsor informational meetings, seminars, client awareness events, support for marketing materials, or business building programs. TCW or its affiliates may pay amounts from their own resources to third parties, including brokerage firms, banks, financial advisers, retirement plan service providers, and other financial intermediaries for providing record keeping, sub-accounting, transaction processing and other administrative services. These payments, which may be substantial, are in addition to any fees that may be paid by the TCW Fund for these types of or other services.

The amount of these payments is determined from time to time by TCW and may differ among such financial intermediaries. Such payments may provide incentives for such parties to make shares of the TCW Fund available to their customers, and may allow the TCW Fund greater access to such parties and their customers than would be the case if no payments were paid. Such access advantages include, but are not limited to, placement of the TCW Fund on a list of mutual funds offered as investment options to the financial intermediary’s customers (sometimes referred to as “Shelf Space”); access to the financial intermediary’s registered representatives; and/or ability to assist in training and educating the financial intermediary’s registered representatives. These payment arrangements will not, however, change the price an investor pays for shares of the Fund or the amount that the TCW Fund receives to invest on behalf of the investor. These payments may create potential conflicts of interests between an investor and a financial intermediary who is recommending a particular mutual fund over other mutual funds.

You may wish to consider whether such arrangements exist when evaluating any recommendations to purchase or sell shares of the TCW Fund and you should contact your financial intermediary for details about any payments it may receive from the TCW Fund or from TCW. Payments are typically based on a percentage of assets under management or based on the number of customer accounts or a combination thereof.

Multiple Class Structure of the TCW Fund

The TCW Fund currently offers two classes of shares: Class I shares and Class N shares. Shares of each class of the TCW Fund represent an equal pro rata interest in the TCW Fund and both classes generally have the same voting, liquidation, and other rights. The Class I shares are offered at the current net asset value. The Class N shares are offered at the current net asset value, but are subject to fees imposed under the Distribution Plan. Pursuant to the Distribution Plan, the TCW Fund compensates SEI Distributors for distribution and related services at a rate equal to 0.25% of the average daily net assets of the TCW Fund attributable to its Class N shares. The fees may be used to pay the SEI Distributors for distribution services and sales support services provided in connection with Class N shares. The fee may also be used to pay financial intermediaries for the

 

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sales support services and related expenses and shareholder servicing fees. The shareholder servicing fees are paid to compensate financial intermediaries for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of the TCW Fund’s shares. Because these fees are paid out of the Fund’s Class N assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. Because the expenses of each class may differ, the performance of each class is expected to differ.

Other Shareholder Servicing Expenses Paid by the Funds

The RiverPark Board has adopted a shareholder servicing plan according to which the RiverPark Fund may pay shareholder servicing fees equal to up to 0.25% of the Retail Class shares and Institutional Class shares to various shareholder servicing agents for performing non-distribution related shareholder servicing functions and maintaining shareholder accounts on behalf of their clients who own shares of the RiverPark Fund. Because these shareholder servicing fees are paid out of assets attributable to the RiverPark Fund’s Retail Class shares and Institutional Class shares on an ongoing basis, over time these fees will increase the cost of an investment in such shares and may cost more than other types of sales charges.

In addition, the RiverPark Board has adopted an administrative services plan according to which the RiverPark Fund may pay administrative services fees at an annual rate of up to 0.20% and 0.15% of the average daily net assets of the Retail Class shares and Institutional Class shares, respectively, of the RiverPark Fund to various administrative servicing agents for providing administrative, recordkeeping and support servicing to their clients who own shares of the RiverPark Fund. Because these administrative servicing fees are paid out of assets attributable to each Fund’s Retail Class shares and Institutional Class shares on an ongoing basis, over time these fees will increase the cost of an investment in such shares and may cost more than other types of sales charges.

The TCW Fund is authorized to compensate broker-dealers and other third-party intermediaries in an amount between 0.06% and 0.16% of its average daily net assets, as approved by the TCW Board based on the TCW Fund’s asset levels, of the assets serviced for the TCW Fund by that intermediary for shareholder services. These services constitute sub-recordkeeping, sub-transfer agent or similar services and are similar in scope to services provided by the transfer agent to the TCW Fund. These expenses paid by the TCW Fund would remain subject to any overall expense limitation applicable to the TCW Fund. These expenses are in addition to any payment of any amounts through the Distribution Plan. This amount may be adjusted, subject to approval by the TCW Board.

Principal Service Providers

The following table lists the principal service providers for the Funds. As noted above, there is expected to be a transition period following the closing of the Reorganization during which some of the RiverPark Fund’s service providers will provide services to the TCW Fund.

 

SERVICE PROVIDERS

SERVICE

  

RIVERPARK FUND

  

TCW FUND

Investment Adviser   

RiverPark Advisors, LLC

156 West 56th Street, 17th Floor

New York, NY 10019

  

TCW Investment Management Company

865 South Figueroa Street, Suite 1800

Los Angeles, CA 90017

Investment Sub-Adviser   

Gargoyle Group Holdings L.L.C.

285 Grand Avenue, Building One

Englewood, NJ 07631

  

Gargoyle Group Holdings L.L.C.

285 Grand Avenue, Building One

Englewood, NJ 07631

 

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SERVICE PROVIDERS

SERVICE

  

RIVERPARK FUND

  

TCW FUND

Distributor   

SEI Investments Distribution Co.

One Freedom Valley Drive

Oaks, PA 19456

  

TCW Funds Distributors

865 South Figueroa Street, Suite 1800

Los Angeles, CA 90017

Administrator   

SEI Investments Global Fund Services

One Freedom Valley Drive

Oaks, PA 19456

  

BNY Mellon Investment Servicing (US) Inc.

4400 Computer Drive

Westborough, MA 01581-1722

Custodian   

Brown Brothers Harriman & Co.

50 Post Office Square

Boston, MA 02110

  

The Bank of New York Mellon

One Wall Street

New York, NY 10286

Transfer Agent   

DST Systems, Inc.

333 West 11th Street, 5th Floor

Kansas City, MO 64105

  

BNY Mellon Investment Servicing (US) Inc.

4400 Computer Drive

Westborough, MA 01581-1722

Independent Registered Public Accounting Firm   

Cohen Fund Audit Services, Ltd.

1350 Euclid Avenue, Suite 800

Cleveland, OH 44115

  

Deloitte & Touche LLP

555 West 5th Street

Los Angeles, CA 90013

Legal Counsel   

Blank Rome LLP

405 Lexington Avenue

New York, NY 10174

  

Paul Hastings LLP

55 Second Street, 24th Floor

San Francisco, CA 94105

Ownership of Securities of the TCW Fund

As of May 15, 2015, there are 10,000 shares of the TCW fund outstanding; 5,000 Class I shares and 5,000 Class N shares. These shares are held by TCW Asset Management Company International Limited, an affiliate of TCW and indirect subsidiary of TCW Group.

THE RIVERPARK BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE

APPROVAL OF THE REORGANIZATION.

 

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PROPOSAL 2 – APPROVAL OF ADJOURNMENT TO SOLICIT ADDITIONAL PROXIES

The purpose of this proposal is to allow the holder of proxies solicited hereby to vote the shares represented by proxies in favor of adjournment of the Special Meeting to a later time, in order to allow more time to solicit additional proxies, as necessary if there are insufficient votes at the time of the Special Meeting to approve Proposal 1.

Any adjournment may be made without notice, other than by an announcement made at the Special Meeting, of the time, date and place of the adjourned meeting.

Any adjournment of the Special Meeting for the purpose of soliciting additional proxies will allow the RiverPark Fund’s shareholders who have already sent in their proxies to revoke them at any time prior to their use at the Special Meeting, as adjourned.

If Proposal 2 is approved and a quorum to transact business is not present or the vote required to approve the Reorganization is not obtained at the Special Meeting, the persons named as proxies may propose one or more adjournments of the Special Meeting in accordance with the RiverPark Trust’s Trust Instrument and applicable law to permit such further solicitation of proxies as may be deemed necessary or advisable.

If your proxy card is signed and dated and no instructions are indicated on your proxy card, your shares will be voted “FOR” the proxy holder having discretionary authority to approve any adjournment of the Special Meeting, if a quorum is not present, in person or by proxy, at the Special Meeting or if necessary to solicit additional proxies to approve Proposal 1.

THE RIVERPARK BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE

APPROVAL OF THE PROPOSAL.

 

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GENERAL INFORMATION ABOUT THE SPECIAL MEETING

This Proxy Statement/Prospectus is being provided in connection with the solicitation of proxies by the RiverPark Board to solicit the vote of shareholders of the RiverPark Fund at a Special Meeting of the RiverPark Fund, which we refer to as the “Special Meeting.” The Special Meeting is scheduled to begin at 10:00 a.m. Eastern Time, on Friday, June 26, 2015, at the offices of SEI Investments Global Funds Services located at One Freedom Valley Drive, Oaks, PA 19456.

Voting Information

Holders of record of the shares of the RiverPark Fund at the close of business on April 30, 2015 (the “Record Date”), as to any matter on which they are entitled to vote, will be entitled to one vote and each fractional share is entitled to a proportionate fractional vote on all business of the Special Meeting.

Shares Outstanding on the Record Date

 

RiverPark Fund

Retail Class shares

  1,030,418.797   
  

 

 

 

Institutional Class shares

  4,243,854.524   
  

 

 

 

Class C shares

  —     
  

 

 

 

Total

  5,274,273.321   
  

 

 

 

The cost of preparing, printing, and mailing the enclosed proxy card and this Proxy Statement/Prospectus, and all other reasonable costs incurred in connection with the solicitation of proxies, including any additional solicitation made by letter, telephone, facsimile, or telegram, will be borne by TCW. In addition to solicitation by mail and by telephone by a proxy solicitation firm retained for this purpose, representatives of the RiverPark Fund, Gargoyle and TCW, and certain financial services firms and their representatives, who will receive no extra compensation for their services, may solicit proxies by telephone, telegram, or personally.

Appendix E lists the persons that as of the Record Date owned beneficially or of record 5% or more of the outstanding shares of any Class of the RiverPark Fund. A control person is one who owns, either directly or indirectly, more than 25% of the voting securities of the RiverPark Fund or acknowledges the existence of such control. As a controlling shareholder, such person could control the outcome of any proposal submitted to shareholders for approval including approval of the Reorganization.

 

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Revocation of Proxies

Any shareholder of the RiverPark Fund giving a proxy has the power to revoke it by mail (addressed to the Secretary of the RiverPark Trust) or in person at the Special Meeting, by executing a superseding proxy or by submitting a notice of revocation to the RiverPark Fund or by voting in person at the Special Meeting. All properly executed proxies received in time for the Special Meeting will be voted as specified in the proxy or, if no specification is properly made, in favor of the Reorganization.

Shareholder Approval

Approval of Proposal 1 requires the affirmative vote of the holders of a majority of the shares of beneficial interest of the RiverPark Fund outstanding and entitled to vote at the Special Meeting. Approval of Proposal 2 for the power to adjourn the Special Meeting will require the affirmative vote of a majority of the votes properly cast, whether or not a quorum is present. Each of the Retail Class and Institutional Class shares of the RiverPark Fund will vote together as a group on the proposals. Each whole share of the RiverPark Fund is entitled to one vote and each fractional share is entitled to a proportionate fractional vote. For purposes of the vote on the proposals, abstentions and broker non-votes (i.e., proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other person entitled to vote shares on a particular matter with respect to which such brokers or nominees do not have discretionary power) will have the effect of votes against the proposals, although they will be considered present for purposes of determining the existence of a quorum.

Methods of Voting

In addition to voting by giving a proxy either by mail or at the Special Meeting, any shareholder may attend the Special Meeting and vote in person. Any shareholder who attends the Special Meeting and wishes to vote in person will be given a ballot prior to the vote. If the shares of a shareholder wishing to vote in person are held in the name of a broker, bank, or other nominee, the shareholder must bring a letter from the nominee indicating that the shareholder is the beneficial owner of the shares on the Record Date and authorizing the shareholder to vote.

Quorum and Adjournment

The presence at the Special Meeting, in person or by proxy, of the holders of record of one third of the outstanding shares entitled to vote thereat shall be necessary and sufficient to constitute a quorum for the transaction of business. If the necessary quorum to transact business is not obtained at the Special Meeting, or if other matters arise requiring shareholder attention, the persons named as proxies may propose one or more adjournments of the Special Meeting in accordance with applicable law to permit further solicitation of proxies. A shareholder vote may be taken on the proposals in this Proxy Statement/Prospectus prior to such adjournment if sufficient votes have been received and it is otherwise appropriate. With respect to adjournment, the persons named as proxies will vote in accordance with their best judgment at the time. For purposes of determining the presence of a quorum for transacting business at the Special Meeting, abstentions and broker “non-votes” will be treated as shares that are present.

Solicitation of Proxies

Broadridge has been engaged to assist in the solicitation of proxies for the RiverPark Fund, at an estimated cost of approximately $15,000, plus expenses. Such cost and expenses are to be borne by TCW, whether or not the Reorganization is approved. As the Special Meeting date approaches, certain shareholders of RiverPark Fund may receive a telephone call from a representative of Broadridge if their votes have not yet been received. Authorization to permit Broadridge to execute proxies may be obtained by telephonic or electronically transmitted instructions from shareholders of the RiverPark Fund. Proxies that are obtained telephonically will be

 

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recorded in accordance with the procedures described below. The RiverPark Fund believes that these procedures are reasonably designed to ensure that both the identity of the shareholder casting the vote and the voting instructions of the shareholder are accurately determined.

In all cases where a telephonic proxy is solicited, the Broadridge representative is required to ask for each shareholder’s full name and complete address and to confirm that the shareholder has received the proxy materials in the mail. If the shareholder is a corporation or other entity, the Broadridge representative is required to ask for the person’s title and confirmation that the person is authorized to direct the voting of the shares. If the information solicited agrees with the information provided to Broadridge, then the Broadridge representative has the responsibility to explain the process, read the proposals listed on the proxy card and ask for the shareholder’s instructions on the proposals. Although the Broadridge representative is permitted to answer questions about the process, he or she is not permitted to recommend to the shareholder how to vote, other than to read any recommendation set forth in this Proxy Statement/Prospectus. Broadridge will record the shareholder’s instructions on the card. Within 72 hours, the shareholder will be sent a letter or mailgram to confirm his or her vote and asking the shareholder to call Broadridge immediately if his or her instructions are not correctly reflected in the confirmation.

Shareholders may also provide their voting instructions through telephone touch-tone voting or Internet voting. These options require shareholders to input a control number which is located on each voting instruction card. After inputting this number, shareholders will be prompted to provide their voting instructions on the proposals. Shareholders will have an opportunity to review their voting instructions and make any necessary changes before submitting their voting instructions and terminating their telephone call or Internet link. Shareholders who vote via the Internet, in addition to confirming their voting instructions prior to submission, will also receive an e-mail confirming their instructions upon request.

If a shareholder wishes to participate in the Special Meeting, but does not wish to give a proxy by telephone or electronically, the shareholder may still submit the proxy card originally sent with this Proxy Statement/Prospectus or attend in person. Should shareholders require additional information regarding the proxy or replacement proxy card, they may contact Broadridge toll-free at 855-976-3323. Any proxy given by a shareholder is revocable until voted at the Special Meeting.

Other Matters

The RiverPark Fund is not aware of any other matters that are expected to arise at the Special Meeting. If any other matter should arise, however, the persons named in properly executed proxies have discretionary authority to vote such proxies as they shall decide.

FINANCIAL HIGHLIGHTS

The financial highlights with respect to the RiverPark Fund are incorporated by reference from the RiverPark Prospectus and have been audited by Cohen Fund Audit Services, Ltd., the RiverPark Trust independent registered public accounting firm, whose report along with the RiverPark Fund’s financial statements for such fiscal periods are included in the RiverPark Fund’s annual report for the applicable period. The financial highlights for the most recent fiscal period with respect to the RiverPark Fund are incorporated by reference from the RiverPark Fund’s annual report. The RiverPark Fund’s most recent annual report is incorporated by reference into the Reorganization SAI and available upon request.

The financial highlights for the TCW Fund are unavailable as it is newly-created and does not yet have financial history. Upon the closing of the Reorganization, the TCW Fund expects to adopt the financial statements of the RiverPark Fund.

 

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APPENDIX A

FORM OF AGREEMENT AND PLAN OF REORGANIZATION

This Agreement and Plan of Reorganization (this “Agreement”) is made as of May 14, 2015, by and among TCW Alternative Funds (the “TCW Trust”), with respect to the TCW/Gargoyle Hedged Value Fund (the “Acquiring Fund”), RiverPark Funds Trust (the “RiverPark Trust”), on behalf of RiverPark/Gargoyle Hedged Value Fund (the “Acquired Fund”), TCW Investment Management Company (“TCW”) joins this Agreement solely for purposes of Sections 1.3, 4.4, 7.3, 9.1 and 9.2 and RiverPark Advisors, LLC (“RiverPark”) joins this Agreement solely for purposes of Sections 1.3, 1.6, 4.2, 6.2, 9.1 and 9.2. The Acquiring Fund and the Acquired Fund may be referred to together as the “Funds.” The capitalized terms used herein shall have the meanings ascribed to them in this Agreement.

This Agreement is intended to be, and is adopted as, a plan of reorganization and liquidation for purposes of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the “Code”) and the regulations adopted by the U.S. Treasury under the Code. The reorganization (the “Reorganization”) will consist of:

 

  (i) the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in exchange for N Class shares (the “N Acquiring Fund Shares”) and I Class shares (the “I Acquiring Fund Shares” and, together with the Investor Acquiring Fund Shares, the “Acquiring Fund Shares”) of beneficial interest of the Acquiring Fund;

 

  (ii) the assumption by the Acquiring Fund of all of the specified liabilities of the Acquired Fund; and

 

  (iii) the distribution, after the closing date contemplated by Section 3.1 (the “Closing Date”), of the Acquiring Fund Shares, pro rata to the shareholders of the specified class of shares of the Acquired Fund, and the termination, dissolution and complete liquidation of the Acquired Fund as provided herein, all upon the terms and conditions hereinafter set forth in this Agreement. Before the Closing Date, the Acquired Fund will declare and pay to its shareholders a dividend or dividends to the extent required by Section 6.5.

RECITALS

WHEREAS, the Acquiring Fund and the Acquired Fund each are series of open-end management investment companies registered under the Investment Company Act of 1940, as amended (the “1940 Act”), and the Acquired Fund owns securities that are assets of the character in which the Acquiring Fund is permitted to invest;

WHEREAS, the Board of Trustees of the Acquiring Fund has determined that the Reorganization is in the best interests of the Acquiring Fund and that the interests of the existing shareholders of the Acquiring Fund will not be diluted as a result of the Reorganization; and

WHEREAS, the Board of Trustees of the Acquired Fund has determined that the Reorganization is in the best interests of the Acquired Fund and that the interests of the existing shareholders of the Acquired Fund will not be diluted as a result of the Reorganization.

AGREEMENT

NOW, THEREFORE, In consideration of the premises and of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows:

 

1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF SPECIFIED LIABILITIES AND LIQUIDATION OF THE ACQUIRED FUND

 

 

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  1.1. Subject to the terms and conditions hereof and on the basis of the representations and warranties contained herein:

 

  (a) The Acquired Fund will sell, assign, convey, transfer and deliver to the Acquiring Fund, and the Acquiring Fund will acquire, on the Closing Date, all of the properties and assets specified in Section 1.2, subject to specified liabilities of the Acquired Fund set forth in Section 1.3.

 

  (b) The Acquiring Fund shall, on the Closing Date, issue and deliver to the Acquired Fund (1) the number of N Acquiring Fund Shares (including fractional shares, if any) determined by dividing (A) the amount of the assets of the Acquired Fund attributable to its Retail Class Shares, less the amount of the liabilities of the Acquired Fund attributable to its Retail Class Shares, computed in the manner and as of the time and date set forth in Section 2.2, by (B) the net asset value of one N Acquiring Fund Share, computed in the manner and as of the time and date set forth in Section 2.3, and (2) the number of I Acquiring Fund Shares (including fractional shares, if any) determined by dividing (A) the amount of the assets of the Acquired Fund attributable to its Institutional Class Shares, less the amount of the liabilities of the Acquired Fund attributable to its Institutional Class Shares, computed in the manner and as of the time and date set forth in Section 2.2, by (B) the net asset value of one I Acquiring Fund Share, computed in the manner and as of the time and date set forth in Section 2.3. Those transactions in subsections (a) and (b) above shall take place at the closing provided for in Section 3 (the “Closing”).

 

  (c) Upon consummation of the transactions described in subsections (a) and (b) above, the Acquired Fund in complete liquidation shall distribute to its respective shareholders of record as of the Closing Date the Acquiring Fund Shares received by it. Each Retail Class shareholder of the Acquired Fund shall be entitled to receive that number of N Acquiring Fund Shares equal to the total of the number of Retail Class Shares of the Acquired Fund held by such shareholder divided by the number of Retail Class Shares of the Acquired Fund outstanding on such date multiplied by (ii) the total number of N Acquiring Fund Shares received by the Acquired Fund with respect to those Retail Class Shares. Each Institutional Class shareholder of the Acquired Fund shall be entitled to receive that number of I Acquiring Fund Shares equal to the total of (i) the number of Institutional Class Shares of the Acquired Fund held by such shareholder divided by the number of Institutional Class Shares of the Acquired Fund outstanding on such date multiplied by (ii) the total number of I Acquiring Fund Shares received by the Acquired Fund with respect to those Institutional Class Shares.

 

  1.2. The assets of the Acquired Fund to be acquired by the Acquiring Fund shall include, without limitation, all cash, securities, commodities and futures interests, dividends and interest receivable, any deferred or prepaid expenses shown as an asset on the books of the Acquired Fund on the Closing Date, receivables for shares sold and all other properties and assets that are owned by the Acquired Fund on the Closing Date, other than cash in an amount necessary to pay dividends and distributions as provided in Section 6.5 hereof and other than the Acquired Fund’s rights under this Agreement.

 

  1.3. The Acquired Fund will use commercially reasonable efforts to discharge all of its known liabilities and obligations to the extent possible before the Closing Date. Notwithstanding the foregoing, any liabilities not so discharged shall be assumed by the Acquiring Fund on the Closing Date, which assumed liabilities shall include, except as provided below, all of the Acquired Fund’s liabilities, debts, obligations, and duties of whatever kind or nature, whether absolute, accrued, contingent, or otherwise, whether or not determinable at the Closing Date, and whether or not specifically referred to in this Agreement. Except as otherwise provided in this Agreement, the Acquiring Fund will not assume, and hereby expressly rejects, liabilities of the Acquired Fund not incurred in the ordinary course of its business or in managing the investment portfolio of the Acquired Fund, except assumed liabilities listed in Schedule 1 to this Agreement.

 

  1.4.

As provided in Section 3.4, as soon after the Closing Date as is conveniently practicable (the “Liquidation Date”), the Acquired Fund will liquidate and distribute to its shareholders of record the

 

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Acquiring Fund Shares received by the Acquired Fund as contemplated by Section 1.1(c). That liquidation and distribution will be accomplished by the transfer of the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund in the names of Acquired Fund shareholders and representing the respective number of the Acquiring Fund Shares due to those shareholders. The Acquiring Fund shall not be obligated to issue certificates representing the Acquiring Fund Shares in connection with such exchange, regardless of whether any Acquired Fund shareholders surrendered or previously held any physical certificates.

 

  1.5. Effective as of the Liquidation Date, all outstanding certificates representing shares of the Acquired Fund will be deemed cancelled and shall no longer evidence ownership thereof.

 

  1.6. As soon as practicable on or after the Closing Date, the Acquired Fund shall make all filings and take all other steps as shall be necessary and proper to effect its complete liquidation. Any reporting responsibility of the Acquired Fund, excluding tax reporting which is provided for in Section 4.1(k), is and shall remain the responsibility of RiverPark and the Acquired Fund up to and including the Closing Date and thereafter.

 

  1.7. Any and all obligations or liabilities arising under or in respect of this Agreement shall be those of the Acquired Fund or the Acquiring Fund, as the case may be, and shall not otherwise be obligations or liabilities of the TCW Trust or the RiverPark Trust, and, for clarity, under no circumstances will any other series of the TCW Trust or the RiverPark Trust have any obligation or liability under or in respect of this Agreement or the transactions contemplated hereby.

 

2. VALUATION AND VALUATION DATE

 

  2.1. On the Closing Date, the Acquiring Fund will deliver to the Acquired Fund the number of N Class Shares and I Class shares (including fractional shares, if any) determined as provided in Section 1.

 

  2.2. The value of the Acquired Fund’s assets will be computed as of the Valuation Date (as defined in Section 2.4 of this Agreement), after the declaration and payment of any distributions and dividends, using the valuation procedures for the Acquiring Fund set forth in the TCW Trust’s Trust Instrument (the “TCW Trust Instrument”) and the Acquiring Fund’s then-current prospectus or prospectuses and statement of additional information or statements of additional information (collectively, as amended or supplemented from time to time, the “Acquiring Fund Prospectus”), or such other valuation procedures as mutually agreed between the TCW Trust and the RiverPark Trust.

 

  2.3. The net asset value of an N Acquiring Fund Share or I Acquiring Fund Share shall be the net asset value per N Class share or I Class share, as the case may be, of the Acquiring Fund, after the declaration and payment of any distributions and dividends, computed as of the Valuation Date using the valuation procedures for the Acquiring Fund set forth in the TCW Trust Instrument and the Acquiring Fund Prospectus.

 

  2.4. The Valuation Date shall be as of 4:00 p.m. Eastern time on the Closing Date and shall be within two business days after the declaration and payment of any dividends by the Acquired Fund, or such other date as may be mutually agreed upon in writing by the parties hereto (the “Valuation Date”).

 

  2.5. The Acquiring Fund shall issue the Acquiring Fund Shares to the Acquired Fund on one or more share deposit receipts registered in the name of the Acquired Fund. The Acquired Fund shall distribute in liquidation the Acquiring Fund Shares received by it hereunder to its shareholders as contemplated by Section 1.1, by redelivering such share deposit receipts to the TCW Trust’s transfer agent, which will as soon as practicable set up open accounts for Acquired Fund shareholders in accordance with written instructions furnished by the Acquired Fund. Immediately after the close of business on the Valuation Date, the share transfer books of the Acquired Fund will be closed and no further transfers of Acquired Fund shares will be made.

 

 

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  2.6. The Acquired Fund will pay or cause to be paid to the Acquiring Fund any interest, cash or such dividends, rights and other payments received by it on or after the Closing Date with respect to the Investments (as defined in Section 4.1(s) of this Agreement) and other properties and assets of the Acquired Fund, whether accrued or contingent, received by it on or after the Closing Date. Any such distribution shall be deemed included in the assets transferred to the Acquiring Fund at the Closing Date and shall not be separately valued unless the securities in respect of which such distribution is made shall have gone “ex” such distribution before the Valuation Date, in which case any such distribution that remains unpaid at the Closing Date shall be included in the determination of the value of the assets of the Acquired Fund acquired by the Acquiring Fund.

 

  2.7. All computations of value shall be made by each Fund’s respective pricing agent, in accordance with the requirements of the 1940 Act and its regular practice in pricing the shares and assets using the valuation procedures required by Section 2.2 or 2.3, as applicable, and shall be subject to confirmation by each Fund’s respective independent registered public accounting firm upon reasonable request by the other Fund. The RiverPark Trust and the TCW Trust agree to use all commercially reasonable efforts to resolve before the Valuation Date any material differences between the valuations of portfolio securities of the Acquired Fund and the Acquiring Fund.

 

3. CLOSING AND CLOSING DATE

 

  3.1. The Closing Date shall be June 26, 2015, or at such other date to which the parties may agree. The Closing shall be held at the offices of Paul Hastings LLP, 55 Second Street, 24th Floor, San Francisco, California 94105, immediately after and on the same day as the Valuation Date, or at such other time and/or place as the parties may agree.

 

  3.2. The portfolio securities of the Acquired Fund shall be made available by the Acquired Fund to the custodian or non-U.S. sub-custodian for the Acquiring Fund (collectively, the “Custodian”), for examination no later than five business days before the Valuation Date. On the Closing Date, such portfolio securities and all the Acquired Fund’s cash shall be delivered by the Acquired Fund to the Custodian for the account of the Acquiring Fund, such portfolio securities to be duly endorsed in proper form for transfer in such manner and condition as to constitute good delivery thereof in accordance with the custom of brokers or, as applicable, the requirements of the U.S. Treasury Department’s book-entry system or the Depository Trust Company, Participants Trust Company or other third party depositories, and by transfer to the account of the Custodian or sub-custodian or other permitted entity in accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7, as the case may be, under the 1940 Act, and accompanied by all necessary federal, state and foreign stock transfer stamps or a check for the appropriate purchase price thereof. The cash delivered shall be in the form of currency or certified or official bank checks, payable to the order of the Custodian.

 

  3.3. If on the Valuation Date (a) the New York Stock Exchange shall be closed to trading or trading thereon shall be restricted, or (b) trading or the reporting of trading on the New York Stock Exchange or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Acquired Fund or the Acquiring Fund is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored.

 

  3.4.

The Acquired Fund shall instruct its transfer agent, DST Systems, Inc., to deliver at the Closing to the Acquiring Fund or its designated agent a list of the names and addresses of the Acquired Fund shareholders and the number of outstanding shares of the Acquired Fund owned by each Acquired Fund shareholder, all as of the close of business on the Valuation Date, certified by any Vice President, Secretary or Assistant Secretary of the RiverPark Trust, on behalf of the Acquired Fund. The Acquiring Fund will certify to the Acquired Fund that the Acquiring Fund Shares issuable pursuant to Section 1.1 have been credited to the Acquired Fund’s account on the books of the

 

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Acquiring Fund. On the Liquidation Date, the Acquiring Fund will certify to the Acquired Fund that such Acquiring Fund Shares have been credited pro rata within each class of shares to open accounts in the names of Acquired Fund shareholders as provided in Section 1.4.

 

  3.5. At the Closing, each party shall deliver to the other such bills of sale, instruments of assumption of liabilities, checks, assignments, stock certificates, receipts or other documents as such other party or its legal counsel may reasonably request in connection with the transfer of assets, assumption of liabilities and liquidation contemplated by Section 1.

 

4. REPRESENTATIONS AND WARRANTIES

 

  4.1. Representations and Warranties of the RiverPark Trust on behalf of the Acquired Fund.

The RiverPark Trust, on behalf of the Acquired Fund, represents and warrants the following to the Acquiring Fund as of the date hereof and agrees to confirm the continuing accuracy and completeness in all material respects of the following on the Closing Date:

 

  (a) The RiverPark Trust is a statutory trust duly organized and validly existing under the laws of the State of Delaware and has the power to own all of its properties and assets and to carry out and consummate its obligations under this Agreement. The RiverPark Trust is not required to qualify as a foreign entity in any jurisdiction where it is not so qualified and the failure to so qualify would have a material adverse effect on the Acquired Fund. The Acquired Fund has all necessary federal, state and local authorizations to carry on its business as now being conducted.

 

  (b) The RiverPark Trust is duly registered under the 1940 Act, as a management company of the open-end type, and such registration has not been revoked or rescinded and is in full force and effect, and the Acquired Fund is a separate series thereof duly designated in accordance with the applicable provisions of the RiverPark Trust’s Trust Instrument (the “RiverPark Trust Instrument”) and the 1940 Act.

 

  (c) The Acquired Fund is not in violation in any material respect of any provisions of the RiverPark Trust Instrument and the RiverPark Trust’s By-Laws (the “RiverPark By-Laws”), the Acquired Fund Prospectus (as defined below) or any agreement, indenture, instrument, contract, lease or other undertaking to which the Acquired Fund is a party or by which the Acquired Fund or its assets are bound, and the execution, delivery and performance of this Agreement will not result in any such violation.

 

  (d) The Acquired Fund’s current prospectus and statement of additional information (collectively, as amended or supplemented from time to time, the “Acquired Fund Prospectus”) conform in all material respects to the applicable requirements of the Securities Act of 1933, as amended (the “1933 Act”), and the 1940 Act and the rules and regulations of the Securities and Exchange Commission (the “Commission”) thereunder and do not include any untrue statement of a material fact or omit to state any material fact relating to the Acquired Fund required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

  (e) Information about the RiverPark Trust and the Acquired Fund, including any such information provided by the RiverPark Trust or officers, agents or representatives of the RiverPark Trust that appears in any portion of the Registration Statement on Form N-14 filed by the TCW Trust, relating to the Acquiring Fund Shares to be issued to the shareholders of the Acquired Fund (the “TCW Trust N-14”) or in any other proxy solicitation materials does not include any untrue statement of a material fact or omit to state any material fact relating to the RiverPark Trust or the Acquired Fund required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall comply in all material respects with federal securities and other laws and regulations.

 

 

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  (f) At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Fund’s assets to be transferred to the Acquiring Fund pursuant to Section 1.2, which are free of any material liens, pledges or encumbrances.

 

  (g) Except as otherwise disclosed to the Acquiring Fund, no material litigation, administrative or other proceedings or investigation is presently pending or, to the knowledge of the Acquired Fund, threatened as to the Acquired Fund or any of its properties or assets or any person whom the Acquired Fund may be obligated to directly or indirectly indemnify in connection with such litigation, proceedings or investigation.

 

  (h) The statement of assets and liabilities, statement of operations, statement of changes in net assets and schedule of investments (indicating their market values) of the Acquired Fund at, as of, and for the fiscal year ended September 30, 2014, audited by Cohen Fund Audit Services, Ltd. independent registered public accounting firm to the Acquired Fund, copies of which have been furnished to the Acquiring Fund, fairly reflect the financial condition, results of operations, and changes in net assets of the Acquired Fund as of such date and for the period then ended in accordance with accounting principles generally accepted in the United States consistently applied, and the Acquired Fund has no known liabilities of a material amount, contingent or otherwise, other than those shown on the statements of assets and liabilities referred to above, or those incurred in the ordinary course of its business since September 30, 2014.

 

  (i) Since September 30, 2014, there has not been any material adverse change in the Acquired Fund’s financial condition, assets, liabilities or business (other than changes occurring in the ordinary course of business), or any incurrence by the Acquired Fund of indebtedness (other than in the ordinary course of business). For purposes of this subparagraph (i), distribution of net investment income and net realized capital gains, changes in portfolio securities, changes in the market value of portfolio securities or net redemptions shall be deemed to be in the ordinary course of business.

 

  (j) (i) All U.S. federal income tax and other material tax returns and reports of the Acquired Fund, including but not limited to information returns, required by law to have been filed by such date (giving effect to extensions) have been timely filed and were true, correct and complete in all material respects as of the time of their filing; (ii) all taxes (if any) of the Acquired Fund which are due and payable on such returns or reports or on any assessments received by Acquired Fund shall have been timely paid or the timely payment thereof shall have been provided for; (iii) the Acquired Fund is not liable for taxes of any person other than itself (excluding in its capacity as withholding agent) and is not a party to any tax sharing or allocation agreement; and (iv) the Acquired Fund has not had any material tax deficiency or liability asserted against it, and it is not under any material audit by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid.

 

  (k) For each taxable year of its operation, the Acquired Fund has met, and for the current taxable year, the Acquired Fund expects to meet, the requirements of Subchapter M of the Code for qualification and treatment as a “regulated investment company,” has elected to be treated as such, and has computed or will compute, as applicable, its U.S. federal income tax under Section 852 of the Code.

 

  (l) The Acquired Fund has not received written notification from any tax authority that asserts a position contrary to any of the representations in paragraphs (j) or (k) of this Section 4.1.

 

  (m)

The authorized capital of the RiverPark Trust consists of a sufficient number of shares of beneficial interest, par value per share of $0.001, of such number of different series as the Board of Trustees of the RiverPark Trust may authorize from time to time. The outstanding shares of beneficial interest of the Acquired Fund as of the Closing Date are divided into Retail Class shares, Institutional Class shares and C Class shares; however, the C Class shares are not being

 

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offered for sale to investors and therefore, will not be part of the Reorganization. The Retail Class shares and Institutional Class shares each have the characteristics described in the Acquired Fund Prospectus and will, at the time of the Closing Date, be held by the persons and in the amounts set forth in the records of the transfer agent as provided in Section 3.4. All issued and outstanding shares of the Acquired Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable by the Acquired Fund (except as set forth in the Acquired Fund Prospectus), and will have been issued in compliance with all applicable registration or qualification requirements of federal and state securities laws. No options, warrants or other rights to subscribe for or purchase, or securities convertible into, any shares of the Acquired Fund are outstanding.

 

  (n) The Acquired Fund’s investment operations from its inception to the date hereof have been in compliance in all material respects with the investment policies and investment restrictions set forth in the Acquired Fund Prospectus, except as previously disclosed in writing to the Acquiring Fund.

 

  (o) The execution, delivery and performance of this Agreement have been duly authorized by the Board of Trustees of the RiverPark Trust, this Agreement constitutes a valid and binding obligation of the RiverPark Trust with respect to the Acquired Fund enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to affecting the enforcement of creditors’ rights and to general equity principles.

 

  (p) The Acquiring Fund Shares to be issued to the Acquired Fund pursuant to the terms of this Agreement will not be acquired for the purpose of making any distribution thereof other than to Acquired Fund shareholders as provided in Section 1.1(c).

 

  (q) The Acquired Fund has no material contracts outstanding (other than this Agreement) to which the Acquired Fund is a party, other than as disclosed in the Acquired Fund Prospectus or in the registration statement of the RiverPark Trust, as amended, filed with the Commission under the 1933 Act and the 1940 Act (the “Registration Statement”).

 

  (r) No consent, approval, authorization or order of any court or governmental authority is required for the consummation by the Acquired Fund of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act, the Securities Exchange Act of 1934 (the “1934 Act”), the 1940 Act, state securities laws or blue sky laws (which term as used herein shall include the laws of the District of Columbia and of Puerto Rico).

 

  (s) As of both the Valuation Date and the Closing Date, the Acquired Fund will have full right, power and authority to sell, assign, transfer and deliver the Investments (as defined below) and any other assets and liabilities of the Acquired Fund to be transferred to the Acquiring Fund pursuant to this Agreement. At the Closing Date, subject only to the delivery of the Investments and any such other assets and liabilities as contemplated by this Agreement, the Acquiring Fund will acquire the Investments and any such other assets subject to no encumbrances, liens or security interests in favor of any third party creditor of the Acquired Fund, and without any restrictions upon the transfer thereof, including such restrictions as might arise under the 1933 Act or the laws of other country of issue. As used in this Agreement, the term “Investments” shall mean the Acquired Fund’s investments shown on the schedule of its portfolio investments as of September 30, 2014, referred to in Section 4.1(i) hereof, as supplemented with such changes as the Acquired Fund shall make after September 30, 2014, which changes shall be disclosed to the Acquiring Fund in an updated schedule of investments, and changes resulting from stock dividends, stock splits, mergers and similar corporate actions through the Closing Date.

 

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  (t) The books and records of the Acquired Fund made available to the Acquiring Fund and its legal counsel are substantially true and correct in all material respects and contain no material misstatements or omissions with respect to the operations of the Acquired Fund.

 

  (u) All of the outstanding shares of the Acquired Fund issued since April 30, 2012, have been offered for sale and sold in conformity with all applicable federal and state securities laws (including any applicable exemptions therefrom), or the Acquired Fund has taken any action necessary to remedy any prior failure to have offered for sale and sold such shares in conformity with such laws.

 

  4.2. Representations and Warranties of RiverPark.

RiverPark represents and warrants the following to the Acquiring Fund as of the date hereof and agrees to confirm the continuing accuracy and completeness in all material respects of the following on the Closing Date:

 

  (a) Information about RiverPark, including any such information provided by RiverPark or officers, agents or representatives of RiverPark that appears in any portion of the TCW Trust N-14 or in any other proxy solicitation materials does not include any untrue statement of a material fact or omit to state any material fact relating to RiverPark required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall comply in all material respects with federal securities and other laws and regulations.

 

  (b) RiverPark has not received written notification from any tax authority that asserts a position contrary to any of the representations in paragraphs (j) or (k) of Section 4.1 with respect to the Acquired Fund.

 

  (c) The Acquired Fund’s investment operations from the inception of investment management by RiverPark to the date hereof have been in compliance in all material respects with the investment policies and investment restrictions set forth in the Acquired Fund Prospectus, except as previously disclosed in writing to the Acquiring Fund.

 

  4.3. Representations and Warranties of the TCW Trust on behalf of the Acquiring Fund.

The TCW Trust, on behalf of the Acquiring Fund, represents and warrants the following to the Acquired Fund as of the date hereof and agrees to confirm the continuing accuracy and completeness in all material respects of the following on the Closing Date:

 

  (a) The TCW Trust is a statutory trust duly organized and validly existing under the laws of the State of Delaware and has the power to own all of its properties and assets and to carry out its obligations under this Agreement. The TCW Trust is not required to qualify as a foreign entity in any jurisdiction where it is not so qualified and the failure to so qualify would have a material adverse effect on the Acquiring Fund. The Acquiring Fund has all necessary federal, state and local authorizations to carry on its business as now being conducted.

 

  (b) The TCW Trust is duly registered under the 1940 Act, as a management company of the open-end type, and such registration has not been revoked or rescinded and is in full force and effect, and the Acquiring Fund is a separate series thereof duly designated in accordance with the applicable provisions of the TCW Trust Instrument and the 1940 Act.

 

  (c) The Acquiring Fund is not in violation in any material respect of any provisions of the TCW Trust Instrument or the TCW Trust’s By-Laws (the “Trust By-Laws”), the Acquiring Fund Prospectus or any agreement, indenture, instrument, contract, lease or other undertaking to which the Acquiring Fund is a party or by which the Acquiring Fund or its assets are bound, and the execution, delivery and performance of this Agreement will not result in any such violation.

 

 

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  (d) The Acquiring Fund Prospectus conforms in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations of the Commission thereunder and does not and will not include any untrue statement of a material fact or omit to state any material fact relating to the Acquiring Fund required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

  (e) Information about the TCW Trust, the Acquiring Fund and TCW, including any such information provided by any of the TCW Trust, TCW or officers, agents or representatives of any of them that appears in any portion of the TCW Trust N-14 or in any other proxy solicitation materials does not include any untrue statement of a material fact or omit to state any material fact relating to the TCW Trust, the Acquiring Fund or TCW required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall comply in all material respects with federal securities and other laws and regulations.

 

  (f) At the Closing Date, the Acquiring Fund will have good and marketable title to its assets held immediately before the Closing Date, which are free and clear of any material liens, pledges or encumbrances except those previously disclosed to the Acquired Fund.

 

  (g) Except as otherwise disclosed in writing to the Acquired Fund, no material litigation, administrative or other proceedings or investigation is presently pending or, to the knowledge of the Acquiring Fund, threatened as to the Acquiring Fund or any of its properties or assets or any person whom the Acquiring Fund may be obligated to directly or indirectly indemnify in connection with such litigation, proceedings or investigation. Neither the TCW Trust nor the Acquiring Fund knows of any facts which might form the basis for the institution of such proceedings and the Acquiring Fund is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions contemplated hereby.

 

  (h) Since March 13, 2015, there has not been any material adverse change in the Acquiring Fund’s financial condition, assets, liabilities or business (other than changes occurring in the ordinary course of business), or any incurrence by the Acquiring Fund of indebtedness (other than in the ordinary course of business). For purposes of this subparagraph (h), distributions of net investment income and net realized capital gains, changes in portfolio securities, changes in the market value of portfolio securities or net redemptions shall be deemed to be in the ordinary course of business.

 

  (i) (i) All U.S. federal income tax and other material tax returns and reports of the Acquiring Fund, including but not limited to information returns, required by law to have been filed by such date (giving effect to extensions) have been timely filed and were true, correct and complete in all material respects as of the time of their filing; (ii) all taxes (if any) of the Acquiring Fund which are due and payable on such returns or reports or on any assessments received by Acquiring Fund shall have been timely paid or the timely payment thereof shall have been provided for; (iii) the Acquiring Fund is not liable for taxes of any person other than itself (excluding in its capacity as withholding agent) and is not a party to any tax sharing or allocation agreement; and (iv) the Acquiring Fund has not had any material tax deficiency or liability asserted against it, and it is not under any material audit by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid.

 

  (j) For the current taxable year, the Acquiring Fund expects to meet, the requirements of Subchapter M of the Code for qualification and treatment as a “regulated investment company,” has elected to be treated as such, and has computed or will compute, as applicable, its U.S. federal income tax under Section 852 of the Code.

 

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  (k) Neither TCW nor the Acquiring Fund has received written notification from any tax authority that asserts a position contrary to any of the representations in paragraphs (i) and (j) of this Section 4.3.

 

  (l) The authorized capital of the TCW Trust consists of an unlimited number of shares of beneficial interest of such number of different series as the Board of Trustees of the TCW Trust may authorize from time to time. The outstanding shares of beneficial interest in the Acquiring Fund as of the Closing Date will be divided into N Class Shares and I Class Shares, each having the characteristics described in the Acquiring Fund Prospectus. All issued and outstanding shares of the Acquiring Fund, including the Acquiring Fund Shares issued hereunder, are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and non-assessable (except as set forth in the Acquiring Fund Prospectus) by the TCW Trust and the Acquiring Fund, and will have been issued in compliance with all applicable registration or qualification requirements of federal and state securities laws. No options, warrants or other rights to subscribe for or purchase, or securities convertible into, any shares of the Acquiring Fund are outstanding.

 

  (m) The Acquiring Fund’s investment operations from inception to the date hereof have been in compliance in all material respects with the investment policies and investment restrictions set forth in the Acquiring Fund Prospectus, except as previously disclosed in writing to the Acquired Fund.

 

  (n) Except as set forth in the Fee Agreement and Collaboration Agreement (as defined herein), no consideration other than the Acquiring Fund Shares (and the Acquiring Fund’s assumption of the Acquired Fund’s stated liabilities) will be issued in exchange for the Acquired Fund’s assets in the Reorganization.

 

  (o) The execution, delivery and performance of this Agreement have been duly authorized by the Board of Trustees of the TCW Trust and by all other necessary trust action on the part of the TCW Trust and the Acquiring Fund, and this Agreement constitutes a valid and binding obligation of the TCW Trust with respect to the Acquiring Fund enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to affecting the enforcement of creditors’ rights and to general equity principles.

 

  (p) The Acquiring Fund has no material contracts outstanding to which the Acquiring Fund is a party, other than as disclosed in the Acquiring Fund Prospectus, in the TCW Trust N-14 or in the TCW Trust’s Registration Statement.

 

  (q) The books and records of the Acquiring Fund made available to the Acquired Fund and its legal counsel are substantially true and correct in all material respects and contain no material misstatements or omissions with respect to the operations of the Acquiring Fund.

 

  (r) No consent, approval, authorization or order of any court or governmental authority is required for the consummation by the Acquiring Fund of the transactions contemplated by this Agreement, except such as may be required under the 1933 Act, the 1934 Act, the 1940 Act, state securities laws or blue sky laws.

 

  (s) The Acquiring Fund has maintained, or caused to be maintained on its behalf, all books and requires required of a registered investment company in material compliance with the requirements of Section 31 of the 1940 Act and the rules thereunder.

 

  (t) As of the date hereof, except as previously disclosed in writing to the Acquired Fund, and except as have been corrected as required by applicable law, and to the best of the Acquiring Fund’s knowledge, there have been no material miscalculations of the net asset value of the Acquiring Fund or its net asset value per share during the twelve-month period preceding the date hereof and preceding the Closing Date, and all such calculations have been made in accordance with the applicable provisions of the 1940 Act.

 

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  (u) The Acquiring Fund does not directly or indirectly own, nor on the Closing will it directly or indirectly own, nor has it directly or indirectly owned at any time during the past five years, any shares of the Acquired Fund.

 

  (v) All of the outstanding shares of the Acquiring Fund issued since March 13, 2015, if any, have been offered for sale and sold in conformity with all applicable federal and state securities laws (including any applicable exemptions therefrom), or the Acquiring Fund has taken any action necessary to remedy any prior failure to have offered for sale and sold such shares in conformity with such laws.

 

  4.4. Representations and Warranties of TCW.

 

  (a) TCW, on behalf of the Acquiring Fund and itself, represents and warrants that the representations made in subsections (e), (k) and (m) of Section 4.3 are materially accurate and complete as of the date hereof and agrees to confirm the continuing accuracy and completeness of those representations in all material respects as of the Closing Date.

 

5. COVENANTS OF THE PARTIES

 

  5.1. Each of the Acquired Fund and the Acquiring Fund will operate its business in the ordinary course between the date hereof and the Closing Date, it being understood that such ordinary course of business may include purchases and sales of portfolio securities, sales and redemptions of fund shares, and regular and customary periodic dividends and distributions.

 

  5.2. The RiverPark Trust will call a special meeting of the RiverPark Trust’s shareholders to consider and act upon the Reorganization and to take all other appropriate action necessary to obtain approval of the transactions contemplated herein. If insufficient votes are received from the RiverPark Trust’s shareholders, the meeting may be adjourned as permitted under the RiverPark Trust Instrument and RiverPark By-laws and applicable law in order to permit further solicitation of the proxies.

 

  5.3. The RiverPark Trust will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requests concerning the beneficial ownership of the Acquiring Fund’s shares.

 

  5.4. The TCW Trust will prepare and file with the Commission the TCW Trust N-14. The TCW Trust N-14 will include a proxy statement related to the Reorganization, an Information Statement and a prospectus of the Acquiring Fund relating to the transaction contemplated by this Agreement. The TCW Trust N-14 shall be in material compliance with the 1933 Act, the 1934 Act, and the 1940 Act, as applicable. Each party will provide the other party with the materials and information necessary to prepare the proxy statement, Information Statement and related materials (the “Proxy Materials”), for inclusion therein, in connection with the special meeting of the shareholders of the RiverPark Trust to consider the approval of the Reorganization.

 

  5.5. It is the intention of the parties that the Reorganization will qualify as a reorganization within the meaning of Section 368(a) of the Code. Neither the Acquired Fund nor the Acquiring Fund shall (either before or after the Closing Date) take any action or cause any action to be taken (including, without limitation, the filing of any tax return) that is inconsistent with such treatment or that results in the failure of a Reorganization to qualify as a reorganization within the meaning of Section 368(a) of the Code. At or before the Closing Date, the parties to this Agreement will take such reasonable action, or cause such action to be taken, as is reasonably necessary to enable Paul Hastings LLP to render the tax opinion contemplated in this Agreement.

 

  5.6.

As promptly as practicable, but in any case within sixty (60) days after the Closing Date, the Acquired Fund shall furnish the Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring Fund, (i) a statement of the earnings and profits and capital loss carryovers of the Acquired Fund for federal income tax purposes that will be carried over by the Acquiring Fund as a result of Section 381 of the Code, and which will be certified by the RiverPark Trust’s President and Treasurer and (ii) a

 

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certificate, signed on its behalf by the President or any Vice President and the Treasurer or any Assistant Treasurer of the RiverPark Trust, as to the adjusted tax basis in the hands of the Acquired Fund of the securities delivered to the Acquiring Fund pursuant to this Agreement, together with any such other evidence as to such adjusted tax basis as the Acquiring Fund may reasonably request.

 

  5.7. The Acquiring Fund will use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act and such of the state securities laws or blue sky laws as it may deem appropriate in order to continue its operations after the Closing Date.

 

  5.8. The Acquired Fund agrees that the liquidation of the Acquired Fund will be effected in the manner provided in the RiverPark Trust Instrument and RiverPark By-Laws in accordance with applicable law, and that on and after the Closing Date, the Acquired Fund shall not conduct any business except in connection with its liquidation.

 

  5.9. Subject to the provisions of this Agreement, each party will take or cause to be taken, all action, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement, including any actions required to be taken after the Closing Date. In particular, the RiverPark Trust covenants that it will, as and when reasonably requested by the Acquiring Fund, execute and deliver or cause to be executed and delivered all such assignments and other instruments and will take or cause to be taken such further action as the Acquiring Fund may reasonably deem necessary or desirable in order to vest in and confirm the Acquiring Fund’s title to and possession of all the Acquired Fund’s assets and otherwise to carry out the intent and purpose of this Agreement. Any dividend described in Section 6.5 that the Acquired Fund has not paid prior to the Closing shall be paid by the Acquiring Fund within 90 days after the Closing Date.

 

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND

The obligations of the Acquiring Fund to complete the transactions provided for herein shall be subject, at its election, to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, to the following further conditions:

 

  6.1. The RiverPark Trust shall have delivered to the TCW Trust a certificate executed on its behalf by the RiverPark Trust’s President or any Vice President and its Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the TCW Trust and dated as of the Closing Date, to the effect that the representations and warranties of the RiverPark Trust made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and that the RiverPark Trust and the Acquired Fund have complied in all material respects with all the covenants and agreements and satisfied in all material respects all of the conditions on their parts to be performed or satisfied under this Agreement at or prior to the Closing Date. The Acquiring Fund shall have received certified copies of the resolutions adopted by the Board of Trustees of the RiverPark Trust approving this Agreement and the transactions contemplated herein.

 

  6.2. RiverPark shall have delivered to the TCW Trust a certificate executed on its behalf by its President or any Vice President and its Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the TCW Trust and dated as of the Closing Date, to the effect that the representations and warranties of RiverPark made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and that RiverPark, the RiverPark Trust and the Acquired Fund have complied in all material respects with all the covenants and agreements and satisfied in all material respects all of the conditions on their parts to be performed or satisfied under this Agreement at or prior to the Closing Date.

 

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  6.3. The Acquired Fund shall have furnished to the Acquiring Fund a statement of the Acquired Fund’s assets and liabilities, with values determined as provided in Section 2 of this Agreement, together with a list of Investments with their respective tax costs, all as of the Valuation Date, certified on the Acquired Fund’s behalf by the RiverPark Trust’s President (or any Vice President) and Treasurer, and a certificate of both such officers, dated the Closing Date, to the effect that as of the Valuation Date and as of the Closing Date there has been no material adverse change in the financial position of the Acquired Fund since September 30, 2014.

 

  6.4. All proceedings taken by the Acquired Fund in connection with the transactions contemplated by this Agreement and all material documents related thereto shall be reasonably satisfactory in form and substance to the Acquiring Fund.

 

  6.5. The RiverPark Trust, on behalf of the Acquired Fund, before the Closing, shall declare a dividend or dividends based on the estimated taxable income known as of the declaration date, that, in the Acquired Fund’s reasonable judgment and to the Acquiring Fund’s reasonable satisfaction, is sufficient, together with all previous such dividends, to distribute to the Acquired Fund shareholders (i) all of the Acquired Fund’s investment company taxable income as defined in Section 852 of the Code, and (ii) all of the excess, if any, of (x) the Acquired Fund’s investment income excludable from gross income under Section 103 of the Code over (y) the Acquired Fund’s deductions disallowed under Sections 265 and 171 of the Code, and (iii) all of the Acquired Fund’s net capital gain realized (after reduction by any capital loss carryover), in each case computed without regard to any deduction for dividends paid, and in each case for both the Acquired Fund’s current taxable year (which will end on the Closing Date) and any prior taxable year to the extent such dividend or dividends are eligible to be treated as paid with respect to such prior year under Section 855(a) of the Code.

 

  6.6. The Acquired Fund’s custodian shall have delivered to the Acquiring Fund a certificate identifying all of the assets of the Acquired Fund held by that custodian as of the Valuation Date, and certifying that they are free of any pledges, liens or encumbrances.

 

  6.7. The Acquired Fund’s transfer agent shall have provided to the Acquiring Fund’s transfer agent (i) the originals or true copies of all of the records of the Acquired Fund in the possession of the Acquired Fund’s transfer agent as of the Closing Date, (ii) a record specifying the number of Acquired Fund Shares outstanding as of the Valuation Date and (iii) a record specifying the name and address of each holder of record of any Acquired Fund Shares and the number of Acquired Fund Shares held of record by each such shareholder as of the Valuation Date. The Acquired Fund’s transfer agent shall also have provided the Acquiring Fund with a certificate confirming that the acts specified in the preceding sentence have been taken and that the information so supplied is complete and accurate to the best knowledge of the transfer agent.

 

  6.8. Unless waived by the TCW Trust, the Acquiring Fund shall have received a favorable opinion of Blank Rome LLP, counsel to the Acquired Fund for the transactions contemplated hereby, and/or special Delaware counsel, dated the Closing Date, with such assumptions and limitations as shall be in the opinion of such firm(s) appropriate to render the opinions expressed therein, and in a form reasonably satisfactory to the Acquiring Fund, to the following effect:

 

  (a) The Acquired Fund is a series of the RiverPark Trust. The RiverPark Trust is a statutory trust validly existing under the Delaware Statutory Trust Act and, based solely on a good standing certificate, in good standing under the laws of the State of Delaware.

 

  (b) This Agreement has been duly authorized, executed and delivered by the RiverPark Trust, on behalf of the Acquired Fund, and (assuming the due authorization, execution and delivery of this Agreement by the TCW Trust on behalf of the Acquiring Fund, and assuming that this Agreement is a valid and binding obligation of the TCW Trust on behalf of the Acquiring Fund), this Agreement is a valid and binding obligation of the RiverPark Trust on behalf of the Acquired Fund, enforceable against the RiverPark Trust on behalf of the Acquired Fund in accordance with its terms.

 

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  (c) The RiverPark Trust has the trust power under the RiverPark Trust Instrument, RiverPark By-Laws, and resolutions of the Trustees of the Board of the RiverPark Trust to own all of its properties and assets and to carry on its business as described in the Registration Statement.

 

  (d) The execution and delivery of this Agreement by the RiverPark Trust on behalf of the Acquired Fund did not, and the performance by the RiverPark Trust on behalf of the Acquired Fund of its obligations hereunder will not, violate the RiverPark Trust Instrument or RiverPark By-Laws, or result in a breach or violation of, or constitute a default under, any agreement (to which the RiverPark Trust is a party) listed as an exhibit in the Registration Statement.

 

  (e) To the knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority of the United States or the State of Delaware applicable to the RiverPark Trust is required for the consummation by the RiverPark Trust on behalf of the Acquired Fund of the transactions contemplated by this Agreement, except such as have been obtained.

 

  (f) The RiverPark Trust is registered with the Commission as an investment company under the 1940 Act.

In rendering such opinion, Blank Rome LLP may assume all conditions precedent set forth in this Agreement have been satisfied and may include other customary assumptions and qualifications for opinions of this type, including without limitation, customary enforceability assumptions (including the effect of principles of equity, including principles of commercial reasonableness and good faith and fair dealing), that the Trustees of the RiverPark Trust have complied with their fiduciary duties in approving this Agreement, that the Reorganization is fair in all respects and that the execution and delivery of this Agreement by the RiverPark Trust with respect to the Acquired Fund and the performance of its obligations thereunder are not inconsistent with the 1940 Act or the rules and regulations thereunder. In addition, such counsel need not express an opinion with respect to any provisions of this Agreement that purport to obligate the RiverPark Trust to cause other persons or entities to take certain actions or act in a certain way insofar as such provision relates to the actions of such other persons or entities, any provisions of this Agreement to the extent that such provisions purport to bind or limit the trustees of the RiverPark Trust in the exercise of their fiduciary duties or to bind parties not a signatory to this Agreement. In rendering the opinion with respect to the due execution and delivery by the RiverPark Trust of this Agreement, Blank Rome LLP is entitled to rely solely upon review of the incumbency certifications contained in a certificate of the Secretary or Assistant Secretary of the RiverPark Trust.

 

7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND

The obligations of the Acquired Fund to complete the transactions provided for herein shall be subject, at its election, to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, to the following further conditions:

 

  7.1. The TCW Trust shall have delivered to the RiverPark Trust a certificate executed on its behalf by the TCW Trust’s President or any Vice President and its Treasurer, in form and substance satisfactory to the RiverPark Trust and dated as of the Closing Date, to the effect that the representations and warranties of the TCW Trust and the Acquiring Fund made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and that the TCW Trust and Acquiring Fund have complied in all material respects with all the covenants and agreements and satisfied in all material respects all of the conditions on their parts to be performed or satisfied under this Agreement at or prior to the Closing Date. The Acquired Fund shall have received certified copies of the resolutions adopted by the Board of Trustees of the Acquiring Fund approving this Agreement and the transactions contemplated herein.

 

 

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  7.2. The TCW Trust, on behalf of the Acquiring Fund, shall have executed and delivered to the Acquired Fund an assumption of liabilities agreement dated as of the Closing Date pursuant to which the Acquiring Fund will assume all of the liabilities of the Acquired Fund existing at the Valuation Date, to the extent not excluded under this Agreement, in connection with the transactions contemplated by this Agreement and all such other agreements and instruments as the Acquired Fund may reasonably deem necessary or desirable to otherwise carry out the intent and purpose of this Agreement.

 

  7.3. TCW shall have delivered to the RiverPark Trust a certificate executed on its behalf by its President or any Vice President and its Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the RiverPark Trust and dated as of the Closing Date, to the effect that the representations and warranties of TCW made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and that TCW, the TCW Trust and the Acquiring Fund have complied in all material respects with all the covenants and agreements and satisfied in all material respects all of the conditions on their parts to be performed or satisfied under this Agreement at or prior to the Closing Date.

 

  7.4. The TCW Trust on behalf of the Acquiring Fund also shall have delivered (or caused to be delivered) to the Acquired Fund, as requested by the Acquired Fund or its counsel, the following documents in the name of the TCW Trust on behalf of the Acquiring Fund: an assumption of liabilities, secretary’s or assistant secretary’s certificate, good standing certificate of the TCW Trust and the Acquiring Fund, copies of custodian and transfer agent instructions, custodian and transfer agent acknowledgements of transfer or certificates, and any opinion, certificate or document mutually agreed as necessary or appropriate to consummate the Reorganization under this Agreement.

 

  7.5. All proceedings taken by the Acquiring Fund in connection with the transactions contemplated by this Agreement and all documents incidental thereto shall be reasonably satisfactory in form and substance to the Acquired Fund.

 

  7.6. The Acquired Fund shall have received a favorable opinion of Paul Hastings LLP, counsel to the TCW Trust for the transactions contemplated hereby, and/or special Delaware counsel, dated the Closing Date, with such assumptions and limitations as shall be in the opinion of such firm(s) appropriate to render the opinions expressed therein, and in a form reasonably satisfactory to the Acquired Fund, to the following effect:

 

  (a) The TCW Trust is validly existing in good standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del. C. § 3801, et seq. (the “Act”), and has the trust power and authority under the TCW Trust Instrument, By-laws, and resolutions of the trustees of the TCW Trust (collectively, the “TCW Trust Documents”) and the Act to execute, deliver and perform its obligations under the Agreement and to carry on its business as a registered management investment company.

 

  (b) The execution and delivery of the Agreement and the consummation by the TCW Trust of the transactions contemplated thereby have been duly authorized by the TCW Trust under the TCW Trust Documents and the Act. The Agreement has been duly executed and delivered by the TCW Trust.

 

  (c) The Agreement constitutes a legal, valid and binding agreement of the TCW Trust, enforceable against the TCW Trust, in accordance with its terms.

 

  (d) The Acquiring Fund has been duly established as a separate series of the TCW Trust under the Trust Instrument and Section 3806(b)(2) of the Act.

 

  (e) The shares of the Acquiring Fund to be issued as provided for by the Agreement are duly authorized, and upon issuance will be validly issued, fully paid and non-assessable beneficial interests in the Acquiring Fund subject to Section 9.10 of the TCW Trust Instrument, and under the TCW Trust Instrument, no shareholder of the Acquiring Fund has any preemptive right or similar rights.

 

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  (f) Neither the execution, delivery and performance by the TCW Trust of the Agreement, nor the consummation by the TCW Trust of the transactions contemplated thereby, violates (i) the TCW Trust Documents or (ii) any law, rule or regulation of the State of Delaware applicable to the TCW Trust.

 

  (g) Neither the execution, delivery and performance by the TCW Trust of the Agreement, nor the consummation by the TCW Trust of any of the transactions contemplated thereby, requires the consent or approval of, the withholding of objection on the part of, the giving of notice to, the filing, registration or qualification with, or the taking of any other action in respect of, any governmental authority or agency of the State of Delaware, other than the filing of the Certificate of Trust (which Certificate of Trust has been duly filed).

 

  (h) To the knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by the TCW Trust on behalf of the Acquiring Fund of the transactions contemplated by this Agreement, except such as have been obtained.

 

  (i) The Acquiring Fund is a Delaware statutory trust, which is registered with the Securities and Exchange Commission as an open-end investment company under the 1940 Act and such registration has not been revoked or rescinded and is in full force and effect.

In rendering such opinion, special Delaware counsel may assume all conditions precedent set forth in this Agreement have been satisfied and may include other customary assumptions and qualifications for opinions of this type, including without limitation, customary enforceability assumptions (including the effect of principles of equity, including principles of commercial reasonableness and good faith and fair dealing), that the trustees of the TCW Trust have complied with their fiduciary duties in approving this Agreement, that the Reorganization is fair in all respects and that the execution and delivery of this Agreement by the TCW Trust with respect to the Acquiring Fund and the performance of its obligations thereunder are not inconsistent with the 1940 Act or the rules and regulations thereunder. In addition, such counsel need not express an opinion with respect to any provisions of this Agreement that purport to obligate the TCW Trust to cause other persons or entities to take certain actions or act in a certain way insofar as such provision relates to the actions of such other persons or entities, any provisions of this Agreement to the extent that such provisions purport to bind or limit the trustees of the TCW Trust in the exercise of their fiduciary duties or to bind parties not a signatory to this Agreement. In rendering the opinion with respect to the due execution and delivery by the TCW Trust of this Agreement, special Delaware counsel is entitled to rely solely upon review of the incumbency certifications contained in a certificate of the Secretary or Assistant Secretary of the TCW Trust.

 

8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES

The respective obligations hereunder of the TCW Trust, on behalf of the Acquiring Fund, and the RiverPark Trust, on behalf of the Acquired Fund, are subject to the further conditions that on or before the Closing Date:

 

  8.1. On the Closing Date, the Commission shall not have issued an unfavorable report under Section 25(b) of the 1940 Act, nor instituted any proceeding seeking to enjoin the consummation of the transactions contemplated by this Agreement under Section 25(c) of the 1940 Act and no action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein.

 

  8.2.

All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state blue sky and securities authorities) deemed necessary by the RiverPark Trust, the Acquired Fund, the TCW Trust or the Acquiring Fund to permit consummation, in all material respects, of the transactions contemplated

 

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hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of the Acquiring Fund or the Acquired Fund, provided that any party hereto may for itself waive any of those conditions.

 

  8.3. The TCW Trust N-14 shall have become effective under the 1933 Act, and no stop order suspending the effectiveness thereof shall have been issued. To the best knowledge of the parties to this Agreement, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the 1933 Act.

 

  8.4. TCW will have entered into an agreement (the “Collaboration Agreement”) with The TCW Group, Inc. and Gargoyle Investment Advisor L.L.C., the investment sub-adviser to the Acquired Fund and the Acquiring Fund, with respect to the creation of a strategic alliance to create, market and manage certain registered mutual funds, including the Acquiring Fund pursuant to the Reorganization.

 

  8.5. TCW and RiverPark will have entered into an agreement (the “Fee Agreement”) with respect to certain compensation to be paid by TCW to RiverPark in connection with the Reorganization. Pursuant to the terms of the Fee Agreement, RiverPark agrees to use commercially reasonable efforts to support the approval and transfer of the assets and track record of the RiverPark Fund to the TCW Fund. In consideration of the various covenants and agreements of RiverPark set forth therein, TCW agrees to pay RiverPark an amount based on the management fees earned on the TCW Fund (or any successor thereto) for the period beginning on the date of the merger of the RiverPark Fund and the TCW Fund (the “Merger Date”) as contemplated by this Agreement until the fifteenth (15th) anniversary of the Merger Date, as follows:

 

  (a) 12% of the RP Net Fees (as defined below) on the first $250 million of net assets of the TCW/Gargoyle Fund (“AUM”);

 

  (b) 8.75% of the RP Net Fees on the next $630 million of AUM; and

 

  (c) 6% of the RP Net Fees on all AUM over $880 million.

 

     The AUM tiers described above shall be determined monthly in arrears by the average daily net asset value of the TCW Fund for the preceding month. RiverPark’s share of the RP Net Fees shall be determined and paid monthly in arrears within 30 days after the end of each month. “RP Net Fees” shall equal the gross management fee less only the amount paid to platforms for distribution, recordkeeping and sub-transfer agency expenses that are not chargeable to the TCW Fund in accordance with TCW’s standard practice. Neither the RiverPark Fund nor the TCW Fund will incur any expenses in connection with this Fee Agreement.

 

  8.6. The Acquired Fund and the Acquiring Fund shall have received a favorable opinion of Paul Hastings LLP dated on the Closing Date (which opinion will be subject to certain qualifications) satisfactory to both parties substantially to the effect that, on the basis of the existing provisions of the Code, Treasury regulations promulgated thereunder, current administrative rules, and court decisions, as further described below, for federal income tax purposes:

 

  (a) The Acquired Fund’s transfer of all of its assets to the Acquiring Fund solely in exchange for the Acquiring Fund Shares and the assumption by the Acquiring Fund of the liabilities of the Acquired Fund, followed by the Acquired Fund’s distribution of the Acquiring Fund Shares to the Acquired Fund’s shareholders actually or constructively in exchange for their Acquired Fund Shares, will qualify as a “reorganization” of the type described in Section 368(a)(1)(F) of the Code. The Acquired Fund and the Acquiring Fund will each be “a party to a reorganization” within the meaning of Section 368(b) of the Code;

 

  (b) No gain or loss will be recognized by the shareholders of the Acquired Fund upon the exchange of the Acquired Fund Shares solely for the Acquiring Fund Shares (Section 354(a) of the Code and, as applicable, Sections 1036 and 368(a)(1)(E) of the Code);

 

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  (c) The Acquired Fund will not recognize gain or loss (i) upon the transfer of all of its assets to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all of the Acquired Fund’s liabilities, or (ii) upon the distribution of the Acquiring Fund Shares to the shareholders of the Acquired Fund in exchange solely for their Acquired Fund Shares (Sections 361 and 357(a) of the Code);

 

  (d) The Acquiring Fund will not recognize gain or loss upon its receipt of all of the Acquired Fund’s assets solely in exchange for the Acquiring Fund Shares and the Acquiring Fund’s assumption of the Acquired Fund’s liabilities (Section 1032(a) of the Code);

 

  (e) The tax basis of the Acquiring Fund Shares received by each of the shareholders of the Acquired Fund will be the same as the shareholder’s tax basis in the Acquired Fund Shares actually or constructively surrendered in exchange therefor (Section 358(a)(1) of the Code);

 

  (f) The holding period of the Acquiring Fund Shares received in exchange for Acquired Fund Shares by each of the shareholders of the Acquired Fund will include the period that the shareholder of the Acquired Fund held the Acquired Fund Shares actually or constructively surrendered in exchange therefor, provided that such Acquired Fund Shares are held by the shareholder as capital assets on the date of the exchange (Section 1223(1) of the Code);

 

  (g) The tax basis of the Acquired Fund’s assets in the hands of the Acquiring Fund will be the same as the tax basis of such assets to the Acquired Fund immediately prior to the transaction (Section 362(b) of the Code);

 

  (h) The holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the period during which those assets were held by the Acquired Fund (Section 1223(2) of the Code); and

 

  (i) The taxable year of the Acquired Fund will not end as a result of the transaction contemplated by this Agreement (Treasury Regulations Section 1.381(b)-1(a)(2)).

The opinion will be based on certain factual certifications made by officers of the RiverPark Trust and the TCW Trust and will also be based on customary assumptions. The opinion is not a guarantee that the tax consequences of the Reorganization will be as described above. The opinion will note and distinguish certain published precedent. There is no assurance that the Internal Revenue Service or a court would agree with the opinion.

 

  8.7. At any time before the Closing, any of the foregoing conditions of this Section 8 may be waived by the Board of Trustees of the TCW Trust and Board of Trustees of the RiverPark Trust, if, in the judgment of the Board of Trustees of the TCW Trust and the Board of Trustees of the RiverPark Trust, that waiver would not have a material adverse effect on the interests of the shareholders of the Acquired Fund or the interests of the shareholders of the Acquiring Fund.

 

9. BROKERAGE FEES; EXPENSES.

 

  9.1. Each of RiverPark, TCW, the RiverPark Trust, on behalf of the Acquired Fund, and the TCW Trust, on behalf of the Acquiring Fund, represents and warrants to each other that there is no person who has dealt with it who by reason of such dealings is entitled to any broker’s or finder’s or other similar fee or commission in connection with or arising out of the transactions contemplated by this Agreement, except as may be set forth in the Collaboration Agreement or the Fee Agreement. RiverPark and TCW represent that neither the Acquired Fund nor the Acquiring Fund will be obligated to pay any broker’s or finder’s or other similar fee or commission arising out of the transactions contemplated by this Agreement.

 

  9.2.

The parties acknowledge that TCW and/or third parties other than RiverPark will pay the fees and disbursements of counsel to draft this Agreement, prepare and file the TCW Trust N-14 and to prepare

 

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any other documents and opinions in connection with the Reorganization. In addition, TCW and/or third parties other than RiverPark will be responsible for (x) the cost of printing and mailing any proxy statements and any other expenses related to obtaining the required proxies including the expense of any proxy solicitor, and (y) up to $40,000 of the out-of-pocket expenses (including legal fees and costs) incurred by RiverPark and the Acquired Fund without the pre-approval of those expenses by TCW and any such expenses in excess of that amount to the extent TCW gives its approval to pay or reimburse those expenses prior to the time they are incurred. To the extent that any fees and expenses in this Section 9.2 that are the responsibility of TCW and/or a third party other than RiverPark are billed directly to RiverPark or otherwise paid by RiverPark, TCW agrees to pay or otherwise reimburse RiverPark for such fees and expenses promptly (and in no case later than 30 days) upon presentation of the relevant invoices. Neither the Acquired Fund nor the RiverPark Trust shall be responsible for the payment of any fees or expenses related to the Reorganization. Except as otherwise specified in the Fee Agreement, all costs and expenses, including without limitation fees and disbursements of counsel, incurred in connection with the preparation, negotiation and entering into of the Fee Agreement shall be paid by the party incurring such costs and expenses.

 

10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES

 

  10.1. This Agreement supersedes all previous correspondence and oral communications between the parties regarding the subject matter hereof, constitutes the only understanding with respect to such subject matter and may not be changed except by a letter of agreement signed by each party hereto.

 

  10.2. The representations, warranties and covenants contained in this Agreement or in any other document delivered pursuant hereto or in connection herewith shall not survive the consummation of the transactions contemplated hereunder.

 

11. TERMINATION

 

  11.1. This Agreement may be terminated by the mutual agreement of the Acquired Fund and the Acquiring Fund, before the Closing Date.

 

  11.2. In addition, either the Acquired Fund or the Acquiring Fund may at its option terminate this Agreement at or before the Closing Date due to:

 

  (a) With respect to a termination by the Acquired Fund, a material breach by the Acquiring Fund of any representation, warranty, covenant or agreement contained herein to be performed by the Acquiring Fund at or before the Closing Date, if not cured within 30 days; or with respect to a termination by the Acquiring Fund, of a material breach by the Acquired Fund of any representation, warranty, covenant or agreement herein to be performed by the Acquired Fund at or before the Closing Date, if not cured within 30 days;

 

  (b) A condition herein expressed to be precedent to the obligations of the terminating party has not been met and it reasonably appears that it will not or cannot be met;

 

  (c) A reasonable determination by the Acquiring Fund’s Board of Trustees or of the Acquired Fund’s Board of Trustees that the consummation of the transactions contemplated herein would not be in the best interests of the Acquiring Fund or the Acquired Fund, respectively, and prompt written notice is given to the other parties hereto; or

 

  (d) Any governmental authority of competent jurisdiction shall have issued any judgment, injunction, order, ruling or decree or taken any other action restraining, enjoining or otherwise prohibiting this Agreement or the consummation of any of the transactions contemplated herein and such judgment, injunction, order, ruling, decree or other action becomes final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this Section 11.2(d) shall have used its reasonable efforts to have such judgment, injunction, order, ruling, decree or other action lifted, vacated or denied.

 

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  11.3. If the transactions contemplated by this Agreement have not been substantially completed by December 31, 2015, this Agreement shall automatically terminate on that date unless both the Acquired Fund and the Acquiring Fund agree in writing to a later date.

 

  11.4. If for any reason the transactions contemplated by this Agreement are not consummated, in the absence of willful default, no party shall be liable to any other party for any damages resulting therefrom, including, without limitation, consequential damages.

 

  11.5. In the event of the termination of this Agreement and abandonment of the transactions contemplated hereby pursuant to this Section 11, this Agreement shall become void and have no effect except that (a) Sections 9, 11.4, 13 and 14 shall survive any termination of this Agreement, and (b) notwithstanding anything to the contrary contained in this Agreement, no party shall be relieved or released from any liability or damages arising out of any breach of any provision of this Agreement by any party prior to the date of termination, unless the termination is effected pursuant to Section 11.1.

 

12. AMENDMENTS.

This Agreement may be amended, modified or supplemented in such manner as may be agreed upon in writing by the authorized officers of the RiverPark Trust and the TCW Trust; provided however, that following the special meeting of shareholders of the Acquired Fund called by the RiverPark Trust pursuant to Section 5.2 of this Agreement, no such amendment may have the effect of changing the provisions for determining the number of Acquiring Fund Shares to be issued to the shareholders of the Acquired Fund under this Agreement to the detriment of those shareholders without their further approval.

 

13. NOTICES.

Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by telecopy, recognized courier or certified mail addressed as follows, and be deemed given upon transmission confirmation, delivery confirmation or three days after so being mailed, to the following applicable addresses(s) or such other address last designated by the applicable party through written notice:

If to the TCW Trust or the Acquiring Fund:

TCW Investment Management Company

865 South Figueroa, Suite 1800

Los Angeles, California 90017

Attn: General Counsel

Fax: (213) 244-0491

Email: Meredith.Jackson@tcw.com

With a copy to:

Paul Hastings LLP

55 Second Street

San Francisco, California 94105

Attn: David A. Hearth

Fax: (415) 856-7100

Email: davidhearth@paulhastings.com

 

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If to the RiverPark Trust or the Acquired Fund:

RiverPark Advisors, LLC

156 West 56th Street

New York, New York 10019

Attn: Morty Schaja

Fax: (212) 484-2151

Email: mschaja@riverparkfunds.com

With a copy to:

Blank Rome LLP

405 Lexington Avenue

New York, New York 10174

Attn: Thomas R. Westle

Fax: (917) 332-3817

Email: TWestle@BlankRome.com

 

14. MISCELLANEOUS.

 

  14.1. The article and section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

  14.2. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.

 

  14.3. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws. Each of the parties hereto hereby irrevocably and unconditionally agrees to be subject to, and hereby irrevocably and unconditionally submits to, the non-exclusive jurisdiction of the courts of the State of Delaware and of the federal courts sitting in the State of Delaware for the purposes of any action, suit or proceeding (including appeals to their respective appellate courts) arising out of this Agreement or the transactions contemplated hereby. To the fullest extent permitted by law, that service of process may also be made on such party by prepaid certified mail with a proof of mailing receipt validated by the United States Postal Service constituting evidence of valid service. Each party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the courts of the State of Delaware or (ii) the United States District Court for the District of Delaware (including appeals to their respective appellate courts), and hereby further irrevocably and unconditionally to the fullest extent permitted by law waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

  14.4. This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement.

 

  14.5.

It is expressly agreed that the obligations of each of the Acquiring Fund and the Acquired Fund hereunder shall not be binding upon any of the trustees, shareholders, nominees, officers, agents, or employees of the TCW Trust or the Acquiring Fund or the RiverPark Trust or the Acquired Fund personally, but shall bind only the property of the respective Fund, as provided in the TCW Trust Instrument or RiverPark Trust Instrument, as applicable. All persons shall look only to the assets of the applicable Fund to satisfy the obligations of such Fund hereunder and not to the TCW Trust or the

 

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RiverPark Trust generally or any other series of the TCW Trust or the RiverPark Trust. The execution and delivery of this Agreement have been authorized by the Board of Trustees of the TCW Trust and the Board of Trustees of the RiverPark Trust and signed by authorized officers of the TCW Trust and the RiverPark Trust on behalf of the Acquiring Fund and the Acquired Fund, respectively, acting as such. Neither the authorization by such Boards of Trustees nor the execution and delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the property of the respective Fund.

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its President, a Vice President or Treasurer.

 

TCW ALTERNATIVE FUNDS
With respect to the TCW/Gargoyle Hedged Value Fund
By:

/s/ David DeVito

Name: David DeVito
Title: President
RIVERPARK FUNDS TRUST
On behalf of the RiverPark/Gargoyle Hedged Value Fund, severally and not jointly
By:

/s/ Morty Schaja

Name: Morty Schaja
Title: President and Chairman of the Board
Solely for the purpose of Sections 1.3, 1.6, 4.2, 6.2, 9.1 and 9.2:
RIVERPARK ADVISORS, LLC
By:

/s/ Morty Schaja

Name: Morty Schaja
Title: Chief Executive Officer
Solely for the purpose of Sections 1.3, 4.4, 7.3, 9.1 and 9.2:
TCW INVESTMENT MANAGEMENT COMPANY
By:

/s/ Richard Villa

Name: Richard Villa
Title: Managing Director and Chief Financial Officer

 

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Schedule 1

Liabilities to Be Assumed but Not Incurred in the Ordinary Course of Business

None.

 

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APPENDIX B

NON-FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE RIVERPARK FUND

The RiverPark Fund is subject to the following non-fundamental restrictions (which may be changed without shareholder approval):

Non-Fundamental Policy of the RiverPark Fund

The following restrictions are imposed by the management of the RiverPark Fund and may be changed by the RiverPark Board without shareholder approval at any time. The RiverPark Fund may not:

 

  1. Hold more than 15% of the value of its net assets, taken at the time of investment, in illiquid securities. Illiquid securities are those securities without readily available market quotations, including repurchase agreements having a maturity of more than seven days. Illiquid securities may include restricted securities not determined by the RiverPark Board to be liquid, non-negotiable time deposits, over-the-counter options, and repurchase agreements providing for settlement in more than seven days after notice.

 

  2. Invest in derivative securities, other than equity and index options.

 

  3. Lend portfolio securities representing more than 10% of its net assets.

If a percentage limitation set forth in an investment policy or restriction of the RiverPark Fund is adhered to at the time of investment or at the time the RiverPark Fund engages in a transaction, a subsequent increase or decrease in percentage resulting from a change in value of an investment or position, or a change in the net assets of the RiverPark Fund, will not result in a violation of such restriction. However, if at any time borrowings exceed 33 1/3% of total assets, the RiverPark Fund must reduce its borrowings within three business days thereafter.

 

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APPENDIX C

SHAREHOLDER GUIDE

FOR THE TCW FUND

The TCW Fund

The Fund will invest primarily in the securities and instruments as described in the summary section of the TCW Fund’s prospectus. This section contains additional information about the Fund’s investment strategies and the investment techniques utilized by TCW and Gargoyle in managing the Fund, and also additional information about the Fund’s expenses and performance.

The TCW Fund’s Investment Objective

The Fund is a series of the TCW Trust. The Fund’s investment objective is to seek long-term capital appreciation with lower volatility than a stand-alone stock portfolio. The Fund’s investment objective may be changed by the TCW Board without a vote of the shareholders; however, shareholders will be provided at least 60 days’ prior notice of any such change.

The TCW Fund’s Principal Investment Strategies

The Fund has adopted a policy to provide the Fund’s shareholders with at least 60 days’ prior notice of any change in the principal investment strategies of the Fund.

The Fund may use certain types of investments and investing techniques that are described in more detail in the Statement of Additional Information (“SAI”). In response to adverse market, economic, political, or other conditions, the Fund may, from time to time, take temporary defensive positions by investing a substantial part of its assets in high quality short-term money market instruments. To the extent that the Fund assumes a temporary defensive position, it may not achieve its investment objective during that time.

The summary section for the Fund at the beginning of this Prospectus contains a summary of the Fund’s principal investment strategies. The information below describes in greater detail the principal investment strategies of the Fund.

Under normal market conditions, the Fund seeks to achieve its investment objective by investing substantially all of its net assets in equity securities of medium-large capitalization companies (the “Stock Portfolio”) that Gargoyle Investment Advisor L.L.C., the Fund’s sub-adviser (the “Sub-Adviser”), believes are attractively priced relative to medium-large capitalization stocks generally and by selling index call options against the Stock Portfolio (the “Options Portfolio”) to partially hedge the Stock Portfolio, reduce volatility and improve reward/risk of the Stock Portfolio. The Stock Portfolio as a whole serves as the underlying securities, and a basket of index call options are written (sold) in place of individual equity options. While the Sub-Adviser views the Fund as one integrated portfolio in its effort to achieve the Fund’s stated investment objective, the Stock Portfolio and the Options Portfolio investment approaches can be viewed independently.

The Fund considers the largest 1000 companies by market capitalization (companies with market capitalizations over $3.3 billion as of the date of the Fund Prospectus, without limit for large companies) to be medium-large capitalization companies. The equity securities in which the Fund invests are primarily common stocks. The Fund invests primarily in the securities of U.S. companies, but it may also invest in securities of issuers outside of the U.S. Typically, the Fund only invests in a non-U.S. issuer via shares of that issuer listed on a U.S. stock exchange.

 

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In constructing the Stock Portfolio, the Sub-Adviser periodically, and at least monthly, statistically analyzes approximately 2,500 U.S.-listed companies with the largest market capitalizations. For each company, the Sub-Adviser compares a number of fundamental ratios, such as the price-to-earnings ratio and the price-to-sales ratio, against both the company’s historic average as well as the applicable industry’s current average for each such ratio. The goal is to identify those companies whose current fundamental ratios are low relative to their own historic ratios and their industry’s current ratios rather than to identify companies with the lowest ratios on an absolute basis. Based upon these comparisons and through the use of a proprietary algorithm, each company is assigned a number (referred to as the “JScore”), which is the percentage of “fair market value” at which the Sub-Adviser believes each such company is trading.

While the Sub-Adviser analyzes approximately 2,500 companies, it limits the universe of candidates for inclusion in the Stock Portfolio to those with the largest market capitalization, as described above. Based on the JScores, these companies are then divided into three groups: a company with a JScore substantially below 95% is a “buy” candidate, a company with a JScore below, but not significantly below, 95% is a “hold” candidate, and a company with a JScore above 95% is considered a “Sell” candidate. With respect to “buy” candidates, the Fund will generally purchase a “buy” candidate if the Fund has additional capital to invest, subject to certain subjective criteria and risk considerations, such as the limitations as to Fund investment in a single company, industry or sector. With respect to “hold” candidates, if the Fund does not already own a “hold” candidate, the Fund will generally not buy the “hold” candidate; and if the Fund already owns the “hold” candidate, the Fund will generally not sell the “hold” candidate unless, pursuant to a proprietary algorithm and in consideration of potential tax consequences, it determines that the Fund’s current holding in the “hold” candidate should be reduced or fully liquidated. With respect to “sell” candidates, the Fund will generally, subject to certain tax considerations, sell its current holding of a “sell” candidate in order to meet redemption requests or to provide funds to purchase “buy” candidates.

The second prong of the Fund’s investment strategy is to sell index call options against the Stock Portfolio in an effort to increase the Fund’s income, reduce the volatility of its returns and, in general, improve the reward/risk of the Stock Portfolio. In constructing the Options Portfolio, throughout each month, the Sub-Adviser, using proprietary software, determines the “best” basket of indexes on which to sell index call options based on considerations of (1) the degree to which a basket, on a historical basis, would have most closely replicated, on a statistical basis, the performance of the stocks in the current Stock Portfolio (the specific contents of the Stock Portfolio are not relevant to this consideration) and (2) the times at which indexes have the most relatively overvalued options from an options valuation perspective. Between these two considerations, the historical correlation of the basket takes precedence over valuation. Based upon other proprietary software and the experience and judgment of the Sub-Adviser’s portfolio managers, it then typically sells short-term index call options with exercise prices near the index’s current value such that the combined net long market exposure of the long Stock Portfolio and the short Options Portfolio is approximately 50%. This net figure is determined by considering the long exposure of the Stock Portfolio to be 100%. The Options Portfolio is targeted to be sufficiently short so as to reduce the overall Fund market exposure to a net long 50% (after adjustment for the portfolio managers’ subjective judgment as to the future beta of the Stock Portfolio, essentially meaning its expected correlation to market movements).

The Sub-Adviser aims for the Fund to have, on an options-adjusted basis, a 50% net long market exposure. The Sub-Adviser monitors the Fund’s net long market exposure continually and does not generally adjust the net exposure of the Options Portfolio between expirations if the net long market exposure stays between the risk parameters then in place (currently between 35% and 65%, as such is determined by the Sub-Adviser, taking into account the expected future beta of the Stock Portfolio and the effects of changing option volatility). If due to market conditions, the Fund’s net long market exposure falls outside the risk parameters then in place, the Sub-Adviser will periodically adjust the Options Portfolio with the goal to bring the Fund back within those parameters. To the extent that the Sub-Adviser determines to roll the Options Portfolio forward on or before expiration, the Fund will endeavor to maintain an Options Portfolio of short call options.

 

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As part of its determination of the best combination of options, the Sub-Adviser strives to sell index call options so that each month the total premium received for the index call options exceeds 1.5% of the Fund’s net asset value (for a total of 18% per year). The premium, the exercise price and the value of the index underlying an index call option determine the gain or loss realized by the Fund as the seller of the index call option, and there can be no guarantee of any positive returns in any given month.

Although the Sub-Adviser will endeavor to sell short-term index call options, the Fund may implement other options strategies to hedge the Stock Portfolio, such as selling index call options other than short-term options, purchasing put options (on a stock, a sector index or a market index), or selling call options on individual stocks or sector indexes.

The Fund may invest up to 15% of its net assets in illiquid securities. The Fund may also effect short sales of securities. The Fund may not sell a security short if, as a result of that sale, the current value of securities sold short by that Fund would exceed 10% of the value of the Fund’s net assets. However, short sales effected “against the box” to hedge against a decline in the value of a security owned by the Fund are not subject to this 10% limitation.

Summary of the TCW Fund’s Principal Risks

The Fund is affected by changes in the economy, or in securities and other markets. There is also the possibility that investment decisions the Adviser and the Sub-Adviser make with respect to the investments of the Fund will not accomplish what they were designed to achieve or that the investments will have disappointing performance.

Risk is the chance that you will lose money on your investment or that it will not earn as much as you expect. In general, the greater the risk, the more money your investment may earn for you — and the more you can lose. Because the Fund holds securities with fluctuating market prices, the value of the Fund’s shares will vary as its portfolio securities increase or decrease in value. Therefore, the value of your investment in the Fund could go down as well as up.

Your investment in the Fund is not a bank deposit, and it is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, entity, or person. You can lose money by investing in the Fund. When you sell your shares of the Fund, they could be worth more or less than what you paid for them.

Your investment in the Fund may be subject (in varying degrees) to the following risks discussed below. The Fund may be more susceptible to some of the risks than others.

Allocation Risk

The Fund’s investment performance depends on how its assets are allocated and reallocated according to its allocation targets and ranges. A principal risk of investing in the Fund is that the Sub-Adviser will make less than optimal or poor allocation decisions. The Sub-Adviser attempts to identify investment allocations that will optimize returns given various levels of risk tolerance; however, there is no guarantee that such allocation techniques will produce the desired results. It is possible that the Sub-Adviser will focus on investments that perform poorly or underperform other investments under various market conditions. You could lose money on your investment in the Fund as a result of these allocation decisions.

Alternative Strategies Risk

The investment strategies employed by the Fund are alternative strategies that have not been applied to mutual funds for an extended period of time. Accordingly, the Fund is subject to the risk that anticipated opportunities do not play out as planned, or that there are unexpected challenges in implementing the Fund’s strategies due to regulatory constraints for mutual funds.

 

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Correlation and Hedging Risk

As part of its investment strategy, the Fund sells index call options to hedge the Stock Portfolio. There is the risk that the returns of the Stock Portfolio do not correlate with those of the indexes on which the call options are written. Further, the Sub-Adviser may not correctly assess the degree of correlation between the performance of the basket of indexes used in the hedging strategy and the performance of the equity securities in the Stock Portfolio being hedged. If the degree of correlation is sufficiently low, the Fund could incur losses, even during times that the Stock Portfolio generates profits. It is also not possible to hedge fully or perfectly against any risk, and hedging entails its own costs. Hedging may also reduce gains or result in losses.

Currency Risk

The Fund is subject to currency risk when the Fund invests in foreign issuers. Currency exchange rates may fluctuate significantly over short periods of time. A decline in the value of foreign currencies relative to the U.S. dollar may affect the finances of a foreign issuer, which could affect the value of that issuer’s U.S.-listed, U.S. dollar-denominated securities held by the Fund. Such fluctuations in currency exchange rates may be caused by, among others, inflation, interest rates, budget deficits, political factors and government controls.

Equity Securities Risk

Equity securities may include common stock, preferred stock or other securities representing an ownership interest or the right to acquire an ownership interest in an issuer, including convertible securities, depository receipts, and rights and warrants. Equity securities risk is the risk that stocks and other equity securities generally fluctuate in value more than bonds and can decline in value over short or extended periods. Investments in equity securities involve substantial risks and may be subject to wide and sudden fluctuations in market value, as a result of changes in a company’s financial condition and in overall market, economic and political conditions, changing perception regarding the industries in which the issuing securities held by the Fund participate, or factors relating to specific companies in which the Fund invests.

Foreign Securities Risk

Investments in foreign securities may involve greater risks than investing in domestic securities because the Fund’s performance may depend on factors other than the performance of a particular company. Typically, the Fund only invests in a non-U.S. issuer via shares of that issuer listed on a U.S. stock exchange, and therefore is subject to the accounting, auditing and financial reporting standards of that exchange. Political or social instability, civil unrest, acts of terrorism and regional economic volatility are other potential risks that could impact an investment in a security of a non-U.S. issuer.

Frequent Trading Risk

Frequent trading of portfolio securities may produce capital gains, which are taxable to shareholders when distributed. Frequent trading may also increase the amount of commissions or mark-ups to broker-dealers that the Fund pays when it buys and sells securities, which may detract from the Fund’s performance. The portfolio turnover rate of the Fund cannot be accurately predicted. Nevertheless, the annual portfolio turnover rate of the Fund is generally not expected to exceed 100%.

Globalization Risk

The growing inter-relationship of global economies and financial markets has increased the effect of conditions in one country or region on issuers of securities in a different country or region. In particular, the adoption or prolongation of protectionist trade policies by one or more countries, changes in economic or monetary policy in the United States or abroad, or a slowdown in the United States economy, could lead to a

 

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decrease in demand for products and reduced flows of capital and income to companies in other countries. Those events might particularly affect companies in emerging and developing market countries.

High Portfolio Turnover Risk

The investment techniques used by the Fund may result in frequent portfolio trading and high portfolio turnover. High portfolio turnover rates will cause the Fund to incur higher levels of transaction costs, including brokerage fees and commissions and dealer mark-ups, which may reduce the performance of the Fund. High portfolio turnover rates may also result in increased capital gains, including short-term capital gains, which will generally be taxable to shareholders as ordinary income and would increase a shareholder’s tax liability unless shares are held through a tax-deferred or tax-exempt vehicle. The portfolio turnover rate of the Fund cannot be accurately predicted. Nevertheless, the annual portfolio turnover rate of the Fund is generally not expected to exceed 100%.

Investment Style Risk

The Fund may be subject to investment style risk. The Sub-Adviser’s investment styles may be out of favor at times or may not produce the best results over short or longer time periods and may increase the volatility of the Fund’s share price.

Issuer Risk

The value of securities held by the Fund may decline for a number of reasons that directly relate to an issuer, such as changes in the financial condition of the issuer, management performance, financial leverage and reduced demand for the issuer’s goods and services. The amount of dividends paid with respect to equity securities, or the ability of an issuer to make payments in connection with debt securities, may decline for reasons that relate to the issuer, such as changes in an issuer’s financial condition or a decision by the issuer to pay a lower dividend, or reasons that relate to the broader financial system. In addition, there may be limited public information available for the Sub-Adviser to evaluate foreign issuers.

Leverage Risk

Leverage may result from certain transactions, including the use of derivatives (including options), borrowing and reverse repurchase agreements. Increases and decreases in the value of the Fund’s portfolio will be magnified when the Fund uses leverage, and during periods of adverse market conditions, the use of leverage may cause the Fund to lose more money than would have been the case if leverage was not used. The use of leverage may also cause the Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet any required asset segregation requirements.

Liquidity Risk

Liquidity risk is the risk that the Fund may invest in securities that trade in lower volumes and may be less liquid than other investments or that may become less liquid in response to market developments or adverse investor perceptions. When there is no willing buyer and investments cannot be readily sold, the Fund may have to sell them at a lower price or may not be able to sell the securities at all, each of which would have a negative effect on the Fund’s performance. Such securities may also be difficult to value and their values may be more volatile due to liquidity risk. Increased Fund redemption activity, which may occur in a rising interest rate environment or for other reasons, may negatively impact Fund performance and increase liquidity risk due to the need of the Fund to sell portfolio securities. The securities of many of the companies with medium sized capitalizations may have less “float” (the number of shares that normally trade) and less interest in the market and therefore are subject to liquidity risk.

 

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Management Risk

The skills of the Adviser and the Sub-Adviser will play a significant role in the Fund’s ability to achieve its investment objective, and there is the risk that an investment strategy may fail to produce the intended results. The Fund’s ability to achieve its investment objectives depends on the investment skills and ability of the Adviser and the Sub-Adviser and on their ability to correctly identify economic trends, and there can be no assurance that the Fund will achieve its investment objective or achieve positive results. The Sub-Adviser’s judgments about the attractiveness, value and potential appreciation of particular securities may prove to be incorrect and may not anticipate actual market movements or the impact of economic conditions generally. No matter how well a portfolio manager evaluates market conditions, the securities a portfolio manager chooses may fail to produce the intended result, and you could lose money on your investment in the Fund.

Market Risk

Market risk is the risk that the markets in which the Fund’s investments trade will increase or decrease in value. Prices may fluctuate widely over short or extended periods in response to company, market or economic news. Markets also tend to move in cycles, with periods of rising and falling prices. If there is a general decline in the securities and other markets, your investment in the Fund may lose value, regardless of the individual results of the securities and other instruments in which the Fund invests. Certain stocks may decline in value even during periods when the prices of equity securities in general are rising, or may not perform as well as the market in general.

Medium Capitalization Company Risk

The Fund invests in the securities of medium capitalization companies, which could entail greater risks than investing in larger, more established companies. Companies with medium sized market capitalization often have narrower markets, fewer products or services to offer and more limited managerial and financial resources than do larger, more established companies, and their stock prices may be based in substantial part on future expectations rather than current achievements. As a result, their performance can be more volatile, their securities may be less liquid and subject to more severe, abrupt or erratic market movements, they are more likely to be adversely affected by changes in earnings results and investor expectations or poor economic or market conditions, including those experienced during a recession, and they face a greater risk of business failure. Further, medium capitalization companies may have less publicly available information than larger, more established companies, and, when available, it may be inaccurate or incomplete.

Models Risk

The proprietary algorithm and software (collectively, “models”) used by the Sub-Adviser to determine or guide investment decisions may not achieve the objectives of the Fund. Any imperfections or limitations in the analyses and models could affect the ability of the Sub-Adviser to implement strategies. By necessity, these analyses and models make simplifying assumptions that limit their efficacy. Models that appear to explain prior market data can fail to predict future market events. Further, the data used in models may be inaccurate, and/or it may not include the most recent information about a company or a security. Additionally, the Sub-Adviser is able to adjust the models or, under certain adverse conditions, to deviate from the models employed by it. Such adjustments or deviations may not achieve the objectives of the Fund and may produce lower returns and/or higher volatility compared to what the returns and volatility of the Fund would have been if the Sub-Adviser had not adjusted or deviated from the models.

New Fund Risk

The Fund is new. Accordingly, investors in the Fund bear the risk that the Fund may not be successful in implementing its investment strategy or may not employ a successful investment strategy, which could result

 

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in the Fund being liquidated at any time without shareholder approval and could have negative tax consequences for shareholders. The Sub-Adviser also may not be fully able to implement their investment strategies within the regulatory constraints for mutual funds.

Options Risk

An option is an agreement that, for a premium payment or fee, gives the option holder (the purchaser) the right but not the obligation to buy (a “call option”) or sell (a “put option”) the underlying asset (or settle for cash an amount based on an underlying asset, rate, or index) at a specified price (the “exercise price”) during a period of time or on a specified date. Investments in options are considered speculative. When the Fund purchases an option, it may lose the premium paid for it if the price of the underlying security or other assets decreased or remained the same (in the case of a call option) or increased or remained the same (in the case of a put option). If a put or call option purchased by the Fund were permitted to expire without being sold or exercised, its premium would represent a loss to the Fund. When the Fund writes or sells an option, if the decline or increase in the underlying asset is significantly below or above the exercise price of the written option, the Fund could experience a substantial loss.

Index Call Option Writing Risk. An index call option is a contract that entitles the purchaser to receive from the seller a cash payment equal to the amount of any appreciation in the value of the reference index over the exercise price as of the valuation date of the option. Upon entering into the position, a premium is paid by the purchaser to the seller. When an index call option is exercised, the seller is required to deliver an amount of cash determined by the excess, if any, of the value of the index at contract termination over the exercise price of the option. Selling index call options can reduce the risk of owning the Stock Portfolio because declines in the value of the Stock Portfolio would be offset to the extent of the up-front cash (premium) received at the time of selling the call option. However, as the writer of an index call option, the Fund forgoes, during the option’s life, the opportunity to profit from increases in the market value of the index covering the call option above the sum of the option premium received and the exercise price of the call option. Since the Fund’s investment strategy does not contemplate investing in or replicating a particular index, the Fund will not profit from increases in market value of a particular index. Therefore, selling index call options also can limit the Fund’s opportunity to profit from an increase in the market value of the Stock Portfolio; however, only to the extent that the Stock Portfolio correlates with the index underlying the call option written by the Fund.

Price Volatility Risk

The value of the Fund’s investment portfolio will change as the prices of its investments go up or down. The Fund’s returns will vary, and you may lose money. Although stocks offer the potential for greater long-term growth than most debt securities, stocks generally have higher short-term volatility. Different parts of the market and different types of securities can react differently to developments. Issuer, political or economic developments can affect a single issuer, issuers within an industry or economic sector or geographic region or market as a whole. Prices of most securities tend to be more volatile in the short-term. Therefore, an investor who trades frequently or redeems in the short-term is more likely to incur a loss than an investor who holds investments for the longer-term. The fewer issuers in which the Fund invests there are, the greater the potential volatility of its portfolio will be.

Regulatory Risk

Recent instability in the financial markets has led the U.S. Government to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility, and in some cases a lack of liquidity. The Dodd-Frank Wall Street Reform and Consumer Protection Act includes a number of statutory provisions, rulemaking directives and required studies that could directly or indirectly impact the Fund through (i) provisions impacting the regulatory framework relating to the Fund; (ii) provisions impacting the Fund as an investor; (iii) enhancements to the

 

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enforcement authority of the U.S. Securities and Exchange Commission (“SEC”); (iv) risk regulation of “systemically important” financial institutions; and (v) mandated studies that may have further effects on the Fund. Such legislation may impact the Fund in ways that are unforeseeable.

Securities Selection Risk

The specific securities held in the Fund’s investment portfolio may underperform those held by other funds in the same asset class or benchmarks that are representative of the general performance of the asset class because of a portfolio manager’s choice of securities.

Short Sale Risk

The Fund may engage in short sales, transactions in which the Fund sells a security it does not own. To complete a short sale, the Fund must borrow the security (typically from brokers or other institutions) to deliver to the buyer. The Fund is then obligated to replace the borrowed security by purchasing the security at the market price at the time of replacement. This price may be more or less than the price at which the security was sold by the Fund and the Fund will incur a loss if the price of the security sold short increases between the time of the short sale and the time the Fund replaces the borrowed security. Because a borrowed security could theoretically increase in price without limitation, the loss associated with short selling is potentially unlimited. To the extent that the Fund reinvests proceeds received from selling securities short, it may effectively create leverage. Short sales also involve transaction and other costs that will reduce potential Fund gains and increase potential Fund losses.

Value Stock Risk

Value stocks represent companies that tend to have lower than average price to earnings ratios and are therefore cheaper than average relative to the companies’ earnings. These companies may have relatively weak balance sheets, and during economic downturns, these companies may have insufficient cash flow to pay their debt obligations and may have difficulty finding additional financing needed for their operations. A value stock may not reach what the Sub-Adviser believes is its full market value if other investors fail to recognize the stock’s value or the catalyst that the Sub-Adviser believes will increase the price of the stock does not affect the price of the stock in the manner or to the degree that the Sub-Adviser anticipates. Additionally, the intrinsic value of a value stock may go down, or it may be appropriately priced at the time of purchase.

Other Important Information about the TCW Fund and its Investment Strategies and Risks

In addition to the principal investment strategies described in this Proxy Statement/Prospectus, the Fund may also make other types of investments, and, therefore, may be subject to other risks. Some of these risks are described in the Reorganization SAI.

Investment Adviser

The Fund’s investment Adviser is TCW Investment Management Company (the “Adviser”) and has its principal place of business at 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. The Adviser was organized in 1987 as a wholly owned subsidiary of The TCW Group, Inc. (“TCW”). The Adviser is registered with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).

As of March 31, 2015, the Adviser and its affiliated companies, which provide a variety of trust, investment management and investment advisory services, had approximately $179.3 billion in assets under management or committed to management.

 

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The Trust, on behalf of the Fund, and the Adviser have entered into an Investment Advisory and Management Agreement (the “Advisory Agreement”), under the terms of which the Fund has employed the Adviser to, subject to the direction and supervision of the Board, provide investment advisory and management services, including, among others, managing the investment of the assets of the Fund, administering the day-to-day operations of the Fund, furnishing to the Trust office space and all necessary office facilities, supplies and equipment, and arranging for officers or employees of the Adviser to serve, without compensation from the Trust, as officers, trustees or employees of the Trust.

Pursuant to the Advisory Agreement, the Adviser may employ one or more sub-advisers as the Adviser may believe to be particularly fitted to assist the Adviser in the performance of the Advisory Agreement, provided that the compensation of any sub-adviser shall be paid by the Adviser. Currently, the Fund has one sub-adviser, the Sub-Adviser.

Management Fees and Other Expenses

Under the Advisory Agreement, the Fund pays to the Adviser as compensation for the services rendered, facilities furnished, and expenses paid by it the following management fees (the “Management Fees”):

 

Fund

   Annual Management Fee
(As Percent of Average
Net Asset Value)
 

TCW Fund

     0.90

The Adviser, not the Fund, is responsible for the payment of sub-advisory fees to the Sub-Adviser. Under the Investment Sub-Advisory Agreement (the “Sub-Advisory Agreement”) with the Sub-Adviser, the Adviser pays to the Sub-Adviser as compensation for the services rendered thereunder the following sub-advisory fees:

 

TCW/Gargoyle Hedged Value Fund

     0.38% - 0.70%

 

* Varies based on average net asset value and Fund and Adviser expenses.

Pursuant to the Operating Expenses Agreement between the Adviser and the Fund (the “Operating Expenses Agreement”), the Adviser has agreed to waive its investment management fee and/or reimburse the operating expenses of the Fund to the extent the Fund’s operating expenses (excluding taxes, interest, brokerage commissions, dividends on securities sold short, acquired fund fees and expenses, and extraordinary expenses) exceed, in the aggregate, the rate per annum, as set forth below.

 

Fund

   Expense Cap
(As Percent of Average
Net Asset Value)
 

TCW Fund

  

Class N

     1.50

Class I

     1.25

This contractual fee waiver/expense reimbursement will remain in place through October 31, 2017. During this term, only the Board may terminate or modify the terms of the Operating Expenses Agreement. The Adviser may request recoupment of previously waived fees and paid expenses from the Fund for three years from the date they were waived or paid, subject to any applicable expense caps at the time of recoupment or at the time of waiver and/or reimbursement, whichever is lower.

 

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The Advisory Agreement and the Sub-Advisory Agreement were approved by a majority of the Board, including the Trustees who are not “interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Trustees”), with respect to the Fund, at an in-person meeting called for the purpose of voting on such approval and held on March 9, 2015. A discussion regarding the basis for the Board’s approval of the Advisory Agreement and the Sub-Advisory Agreement for the Fund will be contained in the Trust’s semi-annual report to shareholders for the period ending April 30, 2015.

Manager of Managers Structure

The Adviser and the Trust have applied for and expect to receive an exemptive order from the SEC to operate under a manager of managers structure that, subject to certain conditions, permits the Adviser, with the approval of the Board, including a majority of the Independent Trustees, to appoint and replace sub-advisers, enter into sub-advisory agreements, and materially amend or terminate sub-advisory agreements on behalf of the Fund without shareholder approval (the “Manager of Managers Structure”). There is no guarantee that such exemptive order will be granted. Under the Manager of Managers Structure, the Adviser has responsibility, subject to the oversight of the Board, for evaluating the sub-advisers and recommending to the Board their hiring, termination, or replacement. The exemptive order also permits the Fund to disclose sub-advisory fees in the aggregate, and not individually, in the Trust’s registration statement. The exemptive order does not apply to any sub-adviser that is affiliated with the Trust or the Adviser.

The Manager of Managers Structure enables the Fund to operate with greater efficiency and without incurring the expense and delays associated with obtaining shareholder approvals for matters relating to sub-advisers or sub-advisory agreements. Operation of the Fund under the Manager of Managers Structure will not: (1) permit management fees paid by the Fund to the Adviser to be increased without shareholder approval; or (2) diminish the Adviser’s responsibilities to the Fund, including the Adviser’s overall responsibility for overseeing the portfolio management services furnished by the sub-advisers. Shareholders will be notified of the hiring of a new sub-adviser within 90 days after the hiring of the new sub-adviser.

Sub-Adviser

As permitted by the Advisory Agreement, the Adviser has retained the Sub-Adviser, Gargoyle Investment Advisor L.L.C., to serve as the sub-adviser of the Fund, pursuant to the Sub-Advisory Agreement.

The Sub-Adviser is a New York limited liability company formed in 1999 and has its principal place of business at 285 Grand Avenue, Building One, Englewood, New Jersey 07631. The Sub-Adviser is registered with the SEC as an investment adviser under the Advisers Act. As of December 31, 2014, the Sub-Adviser had $411 million in assets under management and an additional $75 million in assets under advisement.

The Sub-Adviser specializes in sophisticated equity options strategies. It provides investment management services to institutional investors through the use of an option overlay strategy for equity portfolios. It also acts as the investment manager to various hedge funds and as the sub-adviser to a mutual fund.

Pursuant to the Sub-Advisory Agreement, the Sub-Adviser has full discretionary authority to manage the investment and reinvestment of the Fund’s assets, including the authority to purchase, sell, cover open positions, and generally deal in securities, derivatives and other property comprising or relating to the Fund.

Portfolio Managers

The summary section for the Fund at the beginning of the Prospectus provides the names and titles of the Fund’s portfolio managers as well as their tenure with the Fund. Please see the SAI for additional information about other accounts managed by the portfolio managers, the portfolio managers’ compensation and the portfolio managers’ ownership of shares of the Fund.

 

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Listed below are the portfolio managers who provide the day-to-day management of the assets of the Fund, as well as a summary of each such portfolio manager’s business experience.

Joshua B. Parker. Mr. Parker is a Managing Partner of the Sub-Adviser. He has been the co-portfolio manager of RiverPark/Gargoyle Hedged Value Fund, an open-end registered investment company, since that Fund’s inception in April 2012 and has been a portfolio manager of that Fund’s predecessor partnership since January 1997. Mr. Parker has been a Managing Partner of The Gargoyle Group since 1998. From 1988 through 1998, Mr. Parker was General Counsel, then Executive Vice President, of Kenmar Advisory Corp. and its affiliates, one of the leading managers of managers in the managed futures industry. From 1986 to 1988, Mr. Parker was a member of, and an options market-maker on, the American Stock Exchange. From 1996 to 1999, Mr. Parker was also a member of the Government Relations Committee of the Managed Funds Association. Mr. Parker is a graduate of Yale University and the New York University School of Law.

Alan L. Salzbank. Mr. Salzbank is a Managing Partner of the Sub-Adviser. He has been the co-portfolio manager of RiverPark/Gargoyle Hedged Value Fund, an open-end registered investment company, since that Fund’s inception in April 2012 and has been a portfolio manager of that Fund’s predecessor partnership since January 1997. Mr. Salzbank has been a Managing Partner of The Gargoyle Group since 1999. From 1987 to 1998, Mr. Salzbank was a member of the American Stock Exchange. From 1985 to 1987, Mr. Salzbank was a retail branch manager in the Paramus, New Jersey office of Gruntal & Co. From 1980 to 1985, Mr. Salzbank was the Director of the futures department and a Limited Partner at Herzfeld & Stern. From 1975 to 1980, he was a Commodity Analyst and Futures Sales Specialist at Merrill Lynch, as well as the founding editor of the Merrill Lynch “Weekly Futures Report.” Mr. Salzbank is a graduate of the Wharton School of the University of Pennsylvania with a degree in Economics, and received an MBA from the New York University School of Business.

Payments by the Adviser

The Adviser pays certain costs of marketing the Fund from legitimate profits from its management fees and other resources available to it. The Adviser may also share with financial intermediaries (as defined below in the “Your Investment – Account Policies and Services – Calculation of NAV” section) certain marketing expenses or pay for the opportunity to distribute the Fund, sponsor informational meetings, seminars, client awareness events, support for marketing materials, or business building programs. The Adviser or its affiliates may pay amounts from their own resources to third parties, including brokerage firms, banks, financial advisers, retirement plan service providers, and other financial intermediaries for providing record keeping, sub-accounting, transaction processing and other administrative services. These payments, which may be substantial, are in addition to any fees that may be paid by the Fund for these types of or other services.

The amount of these payments is determined from time to time by the Adviser and may differ among such financial intermediaries. Such payments may provide incentives for such parties to make shares of the Fund available to their customers, and may allow the Fund greater access to such parties and their customers than would be the case if no payments were paid. Such access advantages include, but are not limited to, placement of the Fund on a list of mutual funds offered as investment options to the financial intermediary’s customers (sometimes referred to as “Shelf Space”); access to the financial intermediary’s registered representatives; and/or ability to assist in training and educating the financial intermediary’s registered representatives. These payment arrangements will not, however, change the price an investor pays for shares of the Fund or the amount that the Fund receives to invest on behalf of the investor. These payments may create potential conflicts of interests between an investor and a financial intermediary who is recommending a particular mutual fund over other mutual funds.

You may wish to consider whether such arrangements exist when evaluating any recommendations to purchase or sell shares of the Fund and you should contact your financial intermediary for details about any payments it may receive from the Fund or from the Adviser. Payments are typically based on a percentage of assets under management or based on the number of customer accounts or a combination thereof.

 

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Multiple Class Structure

The Fund currently offers two classes of shares: Class I shares and Class N shares. Shares of each class of the Fund represent an equal pro rata interest in the Fund and both classes generally have the same voting, liquidation, and other rights. The Class I shares are offered at the current net asset value. The Class N shares are offered at the current net asset value, but are subject to fees imposed under a Share Marketing Plan (Rule 12b-1 Plan) (the “Distribution Plan”) adopted pursuant to Rule 12b-1 under the 1940 Act. Pursuant to the Distribution Plan, the Fund compensates the Fund’s distributor for distribution and related services at a rate equal to 0.25% of the average daily net assets of the Fund attributable to its Class N shares. The fees may be used to pay the Fund’s distributor for distribution services and sales support services provided in connection with Class N shares. The fee may also be used to pay financial intermediaries for the sales support services and related expenses and shareholder servicing fees. The shareholder servicing fees are paid to compensate financial intermediaries for the administration and servicing of shareholder accounts and are not costs which are primarily intended to result in the sale of the Fund’s shares. Because these fees are paid out of the Fund’s Class N assets on an on-going basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. Because the expenses of each class may differ, the performance of each class is expected to differ.

Other Shareholder Servicing Expenses Paid by the Fund

The TCW Fund is authorized to compensate broker-dealers and other third-party intermediaries in an amount between 0.06% and 0.16% of its average daily net assets, as approved by the TCW Board based on the TCW Fund’s asset levels, of the assets serviced for the TCW Fund by that intermediary for shareholder services. These services constitute sub-recordkeeping, sub-transfer agent or similar services and are similar in scope to services provided by the transfer agent to the Fund (the “Transfer Agent”). These expenses paid by the Fund would remain subject to any overall expense limitation applicable to the Fund. These expenses are in addition to any payment of any amounts through the Distribution Plan. This amount may be adjusted, subject to approval by the Board.

How to Purchase Shares

Regular Purchases

The following table provides the Fund’s minimum initial and subsequent investment requirements for each share class. The minimums may be reduced or waived in some cases.

 

Type of Account

   Minimum Initial
Investment
     Minimum Subsequent
Investments
 

Class N:

     

Regular

   $ 5,000       $ 0   

Individual Retirement Account (“IRA”)

   $ 1,000       $ 0   

Automatic Investment Plan

   $ 5,000       $ 100   

Class I:

     

Regular accounts

   $ 1,000,000       $ 25,000   

The price at which the Fund’s shares are bought or sold is called the net asset value per share (“NAV”). The NAV is computed once daily as of the close of regular trading on the New York Stock Exchange (“NYSE”), generally 4:00 p.m. Eastern Time, on each day that the NYSE is open for trading. In addition to Saturday and Sunday, the NYSE is closed on the days that the following holidays are observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas Day. Shares cannot be purchased by wire transactions on days when banks are closed. The Fund may close early on business days that the Securities Industry and Financial Markets Association recommends that the bond markets close early.

 

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The price for each share you buy will be the NAV calculated after your request is received in good order by the Fund. “In good order” means that payment for your purchase and all the information needed to complete your order must be received by the Fund before your order is processed. If your order is received before the close of regular trading on the NYSE (generally 4:00 p.m. Eastern Time) on a day the Fund’s NAV is calculated, the price you pay will be that day’s NAV. If your order is received after the close of regular trading on the NYSE, the price you pay will be the next NAV calculated.

The Trust and the Transfer Agent reserve the right to reject any order and to waive the minimum investment requirements for investments through certain fund networks or other financial intermediaries and for employees and affiliates of the Adviser or the Trust. In such cases, the minimums associated with the policies and programs of the fund network or other financial intermediary will apply. (In certain cases, the fund network or other financial intermediary also may waive its minimum investment requirements; the Adviser occasionally may be involved in the fund network or other financial intermediary’s decision to waive its minimum investment requirements, but does not control that decision.) This means that investors through various financial intermediaries may face different (or even substantially reduced) investment minimums than those affecting your investment. The Fund reserves the right to redeem accounts inadvertently opened with less than the minimum initial investment. The Fund at its sole discretion may impose an annual $25 account servicing fee for below minimum accounts; certain below minimum accounts may not be charged that servicing fee.

You may invest in the Fund by wiring the amount to be invested to TCW Alternative Funds.

Bank Name: Bank of New York Mellon

ABA No. 011001234

Credit: A/C 742082

BNY Mellon Investment Servicing (US) Inc.

as Agent for TCW Alternative Funds

Further Credit: Shareholder Name

Shareholder Fund/Account

Number

Your bank may impose a fee for investments by wire. The Fund or the Transfer Agent will not be responsible for the consequences of delays, including delays in the banking or Federal Reserve wire systems. Wires received after the close of the NYSE will be considered received by the next business day.

To ensure proper credit, before wiring any funds you must call (866) 858-4338 to notify us of the wire and to get an account number assigned if the wire is an initial investment. Also, if the wire represents an initial investment, you must mail an application form, by regular mail, to the Transfer Agent. When sending applications, checks, or other communications to the Transfer Agent via regular mail, send to:

TCW Alternative Funds

c/o BNY Mellon Investment Servicing

P.O. Box 9886

Providence, RI 02940

If you are sending applications, checks or other communications to the Transfer Agent via overnight mail services, send to:

TCW Alternative Funds

c/o BNY Mellon Investment Servicing

4400 Computer Drive

Westborough, MA 01581-1722

 

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Make your check payable to TCW Alternative Funds (Fund name). The Fund cannot accept third party checks, starter checks, credit cards, credit card checks, cash or cash equivalents (i.e., cashiers check, bank draft, money order or travelers’ check).

Checks should be drawn on a U.S. bank and must be payable in U.S. dollars. Shares of the Fund will be purchased by the Transfer Agent or an authorized sub-agent for your account at the net asset value next determined after receipt of your wire or check. If a check is not honored by your bank, you will be liable for any loss sustained by the Fund, as well as a $20 service charge imposed by the Transfer Agent. Forms for additional contributions by check or change of address are provided on account statements.

The Trust may accept orders from selected brokers, dealers and other qualified institutions, with payment made to the Fund at a later time. The Adviser is responsible for insuring that such payment is made on a timely basis. You may be charged a fee if you buy or sell Fund shares through a broker or agent.

The Trust does not consider the U.S. Postal Service or other independent delivery service to be its agent. Therefore, deposit in the mail or other service does not constitute receipt by the Transfer Agent.

The Trust may stop offering shares completely or may offer shares only on a limited basis, for a period of time or permanently.

The Trust generally does not permit non-US residents to purchase shares of the Fund. The Trust may, at its sole discretion, make exceptions to this policy on a case-by-case basis.

By Payment In Kind

In certain situations, Fund shares may be purchased by tendering payment in kind in the form of securities. Any securities used to buy Fund shares must be readily marketable, their acquisition consistent with the Fund’s objective and otherwise acceptable to the Adviser. Prior to making such a purchase, you should call the Adviser to determine if the securities you wish to use to make a purchase are appropriate. The Fund reserves the right to reject the offer of any payment in kind.

By Automatic Investment Plan

Once an account has been opened, you can make additional purchases of shares of the Fund through an Automatic Investment Plan. The Automatic Investment Plan is only available for Class N shares. The Automatic Investment Plan provides a convenient method to have monies deducted directly from your bank account for investment into the Fund. You can make automatic monthly, quarterly or annual purchases of $100 or more into the Fund as designated on the enclosed Account Application. The Fund may alter, modify or terminate the Automatic Investment Plan at any time. To begin participating in the Automatic Investment Plan, please complete the automatic investment plan section found on the Account Application or contact the Fund at (866) 858-4338.

Purchases Through an Investment Broker or Dealer

You may buy and sell shares of the Fund through certain brokers (and their agents) that have made arrangements with the Fund to sell its shares. When you place your order with such a broker or its authorized agent, your order is treated as if you had placed it directly with the Transfer Agent, and you will pay or receive the next price calculated by the Fund. The broker (or agent) holds your shares in an omnibus account in the broker’s (or agent’s) name, and the broker (or agent) maintains your individual ownership records. The Fund may pay the broker or its agent for maintaining these records as well as providing other shareholder services. The broker (or its agent) may charge you a fee for handling your order. The broker (or agent) is responsible for processing your order correctly and promptly, keeping you advised regarding the status of your individual account, confirming your transactions and ensuring that you receive copies of the Fund’s prospectus.

 

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Current and prospective investors purchasing shares of the Fund through a broker-dealer should be aware that a transaction charge may be imposed by broker-dealers that make the Fund’s shares available, and there will not be such a transaction charge if shares of the Fund are purchased directly from the Fund.

Identity Verification Procedures Notice

The USA PATRIOT Act and federal regulations require financial institutions, including mutual funds, to adopt certain policies and programs to prevent money laundering activities, including procedures to verify the identity of all investors opening new accounts. When completing the New Account Application, you will be required to supply the Fund with certain information for all persons owning or permitted to act on an account. This information includes date of birth, taxpayer identification number and street address. Until such verification is made, the Fund may temporarily limit additional share purchases. In addition, the Fund may limit additional share purchases or close an account if they are unable to verify a customer’s identity. As required by law, the Fund may employ various procedures, such as comparing the information to fraud databases or requesting additional information or documentation from you, to ensure that the information supplied by you is correct.

Net Asset Value and Fair Value Pricing

The NAV per share is the value of the Fund’s assets, less its liabilities, divided by the number of shares of the Fund outstanding. The value of the Fund’s portfolio securities is determined on the basis of the market value of such securities or, if market quotations are not readily available, at fair value under guidelines established by the Trustees. Short-term investments maturing in less than 60 days are valued at amortized cost which the Board has determined to equal fair value. Securities and other assets for which reliable market quotations are not readily available will be valued at their fair value as determined by the Adviser or the Sub-Adviser under the guidelines established by, and under the general supervision and responsibility of, the Board of Trustees. The Adviser may determine the fair value for securities that are thinly traded, illiquid, or where the Adviser believes that the prices provided by a pricing service are not accurate or are not available. Fair value pricing is intended to be used as necessary in order to accurately value the Fund’s portfolio securities and their respective net asset values. The SAI further describes the most common techniques used by the Fund to fair value its securities.

The daily NAV may not reflect the closing market price for all futures contracts held by the Fund because the markets for certain futures will close shortly after the time net asset value is calculated. See “Determination of Net Asset Value” in the SAI for further information.

How to Redeem Shares

Regular Redemptions

You may redeem shares at any time by delivering instructions by regular mail to the Transfer Agent or selected brokers, dealers and other qualified institutions. If you would like to send a request to redeem shares to the Transfer Agent via regular mail, send to:

TCW Alternative Funds

c/o BNY Mellon Investment Servicing

P.O. Box 9886

Providence, RI 02940

If you are sending a request via overnight mail services, send to:

TCW Alternative Funds

c/o BNY Mellon Investment Servicing

4400 Computer Drive

Westborough, MA 01581-1722

 

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The redemption request should identify the Fund and the account number, specify the number of shares or dollar amount to be redeemed and be signed by all registered owners exactly as the account is registered. Your request will not be accepted unless it contains all required documents. The shares will be redeemed at NAV next determined after receipt of the request by the Transfer Agent or other agent of the Fund. A redemption of shares is a sale of shares and you may realize a taxable gain or loss.

If the proceeds of any redemption (a) exceed $50,000, (b) are paid to a person other than the owner of record, or (c) are sent to an address or bank account other than shown on the Transfer Agent’s records, the signature(s) on the redemption request must be a medallion signature guarantee. A medallion signature guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association, or other financial institution which is participating in a medallion program recognized by the Securities Transfer Association. The three recognized medallion programs are Securities Transfer Agents Medallion Program (STAMP), Stock Exchanges Medallion Program (SEMP) and New York Stock Exchange, Inc. Medallion Signature Program (NYSE MSP).

Additional documentation may be required for the redemption of shares held in corporate, partnership or fiduciary accounts. If you have any questions, please contact the Fund in advance by calling (866) 858-4338.

Redemptions will be processed only on a day during which the NYSE is open for business. If you purchase shares by check or money order and later decide to sell them, your proceeds from that redemption will be withheld until the Fund is sure that your check has cleared. This could take up to 15 calendar days after your purchase order.

Systematic Withdrawal Plan

If you own or are purchasing shares of the Fund having a current value of at least $10,000 for Class N and $100,000 for Class I, you may participate in a Systematic Withdrawal Plan. The Systematic Withdrawal Plan provides for automatic redemptions for Class N of at least $100 on a monthly, quarterly, semi-annual or annual basis via Automatic Clearing House (ACH). This electronic transfer could take three to five business days to settle. You may establish a Systematic Withdrawal Plan by completing the appropriate section on the Account Application or by calling the Fund at (866) 858-4338. Notice of all changes concerning the Systematic Withdrawal Plan must be received by the Transfer Agent at least two weeks prior to the next scheduled payment. Further information regarding this Plan and its requirements can be obtained by contacting the Fund at (866) 858-4338.

Telephone Transactions

You may redeem shares by telephone and have the proceeds wired to the bank account as stated on the Transfer Agent’s records. You may also exchange shares by telephone. In order to redeem or exchange shares by telephone, you must select the appropriate box on the Account Application. In order to arrange for telephone redemptions or exchanges or change payment instructions after an account has been opened or to change the bank account or address designated to receive redemption proceeds, a written request must be sent to the Trust. The request must be signed by each shareholder of the account with the signature guarantees as described above. Once this feature has been requested, shares may be redeemed or exchanged by calling the Transfer Agent at (866) 858-4338 and giving the account name, account number, and amount of the redemption or exchange. Joint accounts require only one shareholder to call. If redemption proceeds are to be mailed or wired to the shareholder’s bank account, the bank involved must be a commercial bank located within the United States.

If you redeem your shares by telephone and request wire payment, payment of the redemption proceeds will normally be made in Federal funds on the next business day. The redemption order must be received by the Transfer Agent before the Fund’s net asset value is calculated for the day. There may be a charge of up to $10 for

 

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all wire redemptions. IF YOU EFFECT TRANSACTIONS VIA WIRE TRANSFER YOU MAY BE REQUIRED TO PAY FEES, INCLUDING THE WIRE FEE AND OTHER FEES THAT WILL BE DEDUCTED DIRECTLY FROM REDEMPTION PROCEEDS.

The Fund reserves the right to reject any telephone redemption or exchange request and the redemption or exchange privilege may be modified or terminated at any time on 30-days’ notice to shareholders. In an effort to prevent unauthorized or fraudulent redemption or exchange requests by telephone, the Trust and the Transfer Agent employ reasonable procedures specified by the Fund to confirm that such instructions are genuine. Among the procedures used to determine authenticity, if you are electing to redeem or exchange by telephone you will be required to provide your account number or other identifying information. All such telephone transactions will be digitally recorded and you will receive a confirmation in writing. The Trust may implement other procedures from time to time. If reasonable procedures are not implemented, the Trust and/or the Transfer Agent may be liable for any loss due to unauthorized or fraudulent transactions. In all other cases, the shareholder is liable for any loss for unauthorized transactions. In periods of severe market or economic conditions, the telephone redemption or exchange of shares may be difficult to implement and you should redeem shares by writing to the Transfer Agent at the address listed above. If for any other reason you are unable to redeem or exchange by telephone, you should redeem or exchange shares by writing to the Transfer Agent at the address listed above.

Payments

After the Transfer Agent has received the redemption request and all proper documents, payment for shares tendered will generally be made within three business days. Payment may be delayed or made partly in-kind with marketable securities under unusual circumstances, as specified in the 1940 Act.

Redemptions of Accounts Below Minimum Amount

The Fund may redeem all of your shares at net asset value (calculated on the preceding business day) if the balance of your account falls below a certain minimum amount as a result of a transfer or redemption (and not market fluctuations). The minimum amount is $500 for Class N shares and $1 million for Class I shares. The Fund will notify you in writing and you will have 60 days to increase your account balance before your shares are redeemed.

Conversion of Shares Between Classes

You are permitted to convert shares between Class N and Class I of the Fund, provided that your investment meets the minimum initial investment and any other requirements in the other class, and that the shares of the other class are eligible for sale in your state of residence. Further information about conversion of shares between classes may be found in the SAI.

Trading Limits

The Fund is not intended to serve as vehicles for frequent trading activity because such trading may disrupt management of the Fund. In addition, such trading activity can increase expenses as a result of increased trading and transaction costs, forced and unplanned portfolio turnover, lost opportunity costs, and large asset swings that decrease the Fund’s ability to provide maximum investment returns to all shareholders. In addition, certain trading activity that attempts to take advantage of inefficiencies in the valuation of the Fund’s securities holdings may dilute the interests of the remaining shareholders. This in turn can have an adverse effect on the Fund’s performance.

The Trust reserves the right to refuse any purchase or exchange request that could adversely affect the Fund or its operations, including those from any individual or group who, in the Trust’s view, is likely to engage in excessive material trading. If a purchase or exchange order into shares of the Fund is rejected, the potential

 

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investor will not benefit from any subsequent increase in the net asset value of the Fund. Future purchases into the Fund may be barred if a shareholder effects more than one round trip in shares of the Fund (meaning exchanges or redemptions following a purchase) in excess of certain de minimis limits within a 30 day period.

Exceptions to these trading limits may be made only upon approval of the Trust’s Chief Compliance Officer, and such exceptions are reported to the Board of Trustees on a quarterly basis. This policy may be revised from time to time by the officers of the Trust in consultation with the Board of Trustees without prior notice.

These restrictions do not apply to certain asset allocation programs (including mutual funds that invest in other mutual funds for asset allocation purposes, and not for short-term trading), to omnibus accounts (except to the extent noted in the next paragraph) maintained by brokers and other financial intermediaries (including 401(k) or other group retirement accounts, although restrictions on Fund share transactions comparable to those set forth in the previous paragraph have been applied to the Adviser’s retirement savings program), and to involuntary transactions and automatic investment programs, such as dividend reinvestment, or transactions pursuant to the Fund’s systematic investment or withdrawal program.

In an attempt to detect and deter excessive trading in omnibus accounts, the Trust or its agents may require intermediaries to impose restrictions on the trading activity of accounts traded through those intermediaries. The Fund’s ability to impose restrictions with respect to accounts traded through particular intermediaries may vary depending on the systems capabilities, applicable contractual and legal restrictions, and cooperation of those intermediaries. The Trust, however, cannot always identify or reasonably detect excessive trading that may be facilitated by financial intermediaries or made difficult to identify through the use of omnibus accounts by those intermediaries that transmit purchase, exchange and redemption orders to the Fund, and thus the Fund may have difficulty curtailing such activity.

In addition, the Trust reserves the right to

 

    change or discontinue its exchange privilege, or temporarily suspend this privilege during unusual market conditions, to the extent permitted under applicable SEC rules; and

 

    delay sending out redemption proceeds for up to seven days (generally only applies in cases of large redemptions, excessive trading or during unusual market conditions).

Reports to Shareholders

The Fund’s fiscal year ends on October 31. The Fund will issue to its shareholders semi-annual and annual reports. In addition, you will receive monthly statements of the status of your account reflecting all transactions having taken place within that month. In order to reduce the Fund’s expenses, the Trust will try to identify related shareholders in a household and send only one copy of the annual or semi-annual report and prospectus per household. Information regarding the tax status of income dividends and capital gains distributions will be mailed to shareholders by the deadline established by the Internal Revenue Service (“IRS”). Account tax information will also be sent to the IRS.

Withholdings; Reporting

The Fund may be required to withhold Federal income tax from proceeds of redemptions if you are subject to backup withholding. Failure to provide a certified tax identification number at the time an account is opened will cause tax to be withheld. The Fund also may be required to report redemptions to the IRS.

Distributions and Taxes

The amount of dividends of net investment income and distributions of net realized long and short-term capital gains payable to shareholders will be determined separately for each Fund class. Dividends and

 

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distributions are paid separately for each class of shares. The dividends and distributions paid on Class I shares will generally be higher than those paid on Class N shares since Class N shares normally have higher expenses than Class I shares. Dividends from the net investment income of the Fund will be declared and paid annually. The Fund will distribute any net realized long or short-term capital gains at least annually. Your distributions from the Fund will be reinvested in the Fund unless you instruct the Fund otherwise in writing or by telephone. There are no fees or sales charges on reinvestments. You may request distributions be paid by check. Any undeliverable dividend checks or dividend checks that remain uncashed for six months will be cancelled and will be reinvested in the Fund at the per share net asset value determined at the date of cancellation.

Distributions of the Fund’s investment company taxable income (which include, but are not limited to, interest dividends and net short-term capital gains), if any, are generally taxable to the Fund’s shareholders as ordinary income. To the extent that the Fund’s ordinary income distributions consist of “qualified dividend” income, such income may be subject to federal tax at the reduced rate of tax applicable to non-corporate shareholders for net long-term capital gains, if certain holding period requirements have been satisfied by the Fund and the shareholders.

Distributions of net capital gains (net long-term capital gains less net short-term capital loss) are generally taxable as long-term capital gains regardless of the length of time a shareholder has owned shares of the Fund. The maximum individual federal rate applicable to “qualified dividend income” and long-term capital gains is generally either 15% or 20%, depending on whether the individual’s income exceeds certain threshold amounts.

An additional 3.8% Medicare tax will be imposed on certain net investment income (including ordinary dividends and capital gain distributions received from the Fund and net gains from redemptions or other taxable dispositions of Fund shares) of U.S. individuals, estates and trusts to the extent that such person’s “modified adjusted gross income” (in the case of an individual) or “adjusted gross income” (in the case of an estate or trust) exceeds certain threshold amounts.

An investor will be taxed in the same manner whether you receive your distributions (from investment company taxable income or net capital gains) in cash or reinvest them in additional shares of the Fund.

Shareholders who sell or redeem shares generally will have a capital gain or loss from the sale or redemption. The amount of gain or loss and the applicable rate of tax will depend generally on the amount paid for the shares, the amount received from the sale or redemption, and how long the shares were held by a shareholder.

If more than 50% of the value of the Fund’s total assets at the close of its taxable year consists of securities of foreign corporations, the Fund will be eligible and may elect to treat a proportionate amount of certain foreign taxes paid by it as a distribution to each shareholder which would (subject to applicable limitations) generally permit each shareholder (1) to credit this amount or (2) to deduct this amount for purposes of computing its U.S. federal income tax liability. This will be reported by the Fund on Form 1099-DIV annually, if applicable.

The Fund may be required to withhold U.S. federal income tax (currently, at a rate of 28%) on all distributions to shareholders if they fail to provide the Fund with their correct taxpayer identification number or to make required certifications, or if they have been notified by the U.S. Internal Revenue Service that they are subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld may be credited against U.S. federal income tax liability.

Foreign shareholders may be subject to different U.S. federal income tax treatment, including withholding tax at the rate of 30% on amounts treated as ordinary dividends from the Fund, as discussed in more detail in the SAI.

 

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Shareholders will be advised annually as to the federal tax status of distributions made by the Fund for the preceding calendar year. Distributions by the Fund may also be subject to state and local taxes. Additional tax information may be found in the SAI. This section is not intended to be a full discussion of tax laws and the effect of such laws on you. There may be other federal, state, or local tax considerations applicable to a particular investor. You are urged to consult your own tax adviser.

Portfolio Holdings Information

A description of the Fund’s policies and procedures with respect to the disclosure of its portfolio securities is available in the SAI. Currently, disclosure of the Fund’s portfolio holdings is required to be made quarterly within 60 days of the end of each fiscal quarter in the annual report and semi-annual report to shareholders and in the quarterly holdings report on Form N-Q. The SAI and Form N-Q are available, free of charge, on the EDGAR Database on the SEC’s website at www.sec.gov. The annual reports, semi-annual reports, Form N-Q and SAI for the Fund are also available by contacting the Fund at (866) 858-4338 and on the Trust’s website at www.tcw.com.

 

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APPENDIX D

MANAGEMENT DISCUSSION AND ANALYSIS OF THE PERFORMANCE OF

THE RIVERPARK FUND

Management’s Discussion of Fund Performance and Analysis

RiverPark/Gargoyle Hedged Value Fund

For the fiscal year ended September 30, 2014, the RiverPark/Gargoyle Hedged Value Fund (the “Fund”) gained 15.32% and 15.03% on its Institutional Class Shares and Retail Class Shares, respectively, while the S&P 500 Index gained 19.73% and the Russell 1000 Value Index gained 18.89%. For the fiscal year ended September 30, 2014, the Fund’s equities gained 22.5% and the Fund lost 5.7% in its index option positions.

Investment results for the fiscal year were not uniform across quarters. The Institutional Class Shares gained 8.42% for December quarter, 3.89% for the March quarter, 4.76% for the June quarter, and lost 2.27% in the September quarter.

The Fund’s investment results were not uniform across sectors. The Fund’s best fiscal year-to-date performing sectors were Information Technology, Health Care, Consumer Staples and Financials. The Fund’s worst fiscal year-to-date performing sectors were Utilities, Consumer Discretionary, Telecommunication Services, Industrials and Energy. The Fund’s best fiscal year-to-date performers were Pilgrim’s Pride, United Therapeutics, Alcoa, Hewlett-Packard and Questcor Pharmaceuticals. The Fund’s worst fiscal year-to-date performers were Sears Holdings, Peabody Energy, Ocwen Financial, Cliffs Natural Resources, and SandRidge Energy.

The RiverPark/Gargoyle Hedged Value Fund seeks long-term capital appreciation while exposing investors to less risk than broad stock market indexes by combining two investment strategies. First, the Fund intends to be fully invested in equity securities of medium-large capitalization companies (the “Stock Portfolio”) that Gargoyle, the Fund’s subadviser, believes are attractively priced relative to medium-large capitalization stocks generally. Second, the Fund sells index call options (“Options Portfolio”) against the Stock Portfolio in an effort to increase the Fund’s income, reduce the volatility of its returns and, in general, improve the reward/risk of the Stock Portfolio. The Fund expects to maintain a net market exposure of between 35% and 65%.

We are cautiously optimistic that we can achieve our long-term objective of realizing above average rates of return over the next few years. Additionally, the Fund believes that it can gain performance from its index option writing activities while it also believes the options can decrease overall performance volatility.

This represents the manager’s assessment of the market environment at a specific point in time and should not be relied upon by the reader as research or investment advice.

The S&P 500 Index is an unmanaged market capitalization value weighted composite index of 500 stocks.

The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 Index companies with lower price-to-book ratios and lower expected growth values.

 

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Comparison of Change in the Value of a $10,000 Investment in the RiverPark/Gargoyle Hedged Value Fund,

Retail Class Shares, versus the S&P 500 Index and the Russell 1000 Value Index

 

     AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2014  
     One Year Return     Annualized
3 Year Return*
    Annualized
5 Year Return*
    Annualized
10 Year Return*
    Annualized
Inception to Date*
 

Institutional Class Shares

     15.32     18.91     13.31     8.99     9.11

Retail Class Shares

     15.03     18.69     13.19     8.93     9.07

S&P 500 Index

     19.73     22.99     15.69     8.11     3.97

Russell 1000 Value Index

     18.89     23.93     15.26     7.84     6.38

 

LOGO

 

*

Fund commenced operations on April 30, 2012. The performance data quoted for periods prior to April 30, 2012 is that of the Predecessor Fund. The Predecessor Fund commenced operations prior to the periods shown. The Predecessor Fund was not a registered mutual fund and was not subject to the same investment and tax restrictions as the Fund. If it had been, the Predecessor Fund’s performance might have been lower. Performance shown for one year and greater are annualized. The Predecessor Fund commenced operations in 1997. Substantial changes were made to the strategy in January 2000, consistent with the strategy of the Fund. Performance results during years 1997 through 1999 are available upon request by calling the Fund at 888-564-4517.

For periods after April 30, 2012, the returns shown above are calculated assuming reinvestment of all dividends and distributions. Returns do not reflect the deduction of taxes that a shareholder would pay on dividends or distributions or the redemption of shares from a fund. Returns reflect fee waivers and/or reimbursements in effect for the period; absent fee waivers and reimbursements, performance would have been lower. Results represent past performance and do not indicate future results. The value of an investment in the Fund and the return on investment both will fluctuate and redemption proceeds may be higher or lower than a

 

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shareholder’s original cost. Performance of the Institutional Class Shares differs due to the differences in expenses. Current performance may be lower or higher than that shown here. Unlike the Fund’s comparative benchmarks, the Fund’s total returns are reduced by its annual operating expenses. Please note that one cannot invest directly in an unmanaged index.

 

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APPENDIX E

BENEFICIAL OWNERSHIP

Beneficial Ownership of the RiverPark Fund

To the knowledge of the RiverPark Fund, the following are the only persons who owned of record or beneficially 5% or more of the outstanding shares of each class of the RiverPark Fund, as of April 30, 2015:

 

Name and Address

   Percentage
Ownership
 

Retail Class shares

  

National Financial Services LLC for Exclusive Benefit of Customers 1

ATTN Mutual Funds Dept 5th FL

499 Washington Blvd FL 5

Jersey City NJ 07310-2010

     33.80

Charles Schwab & Co Inc.

Special Custody A/C FBO Customers 1

ATTN Mutual Funds

101 Montgomery St

San Francisco CA 94104-4151

     31.26

TD Ameritrade Inc. for the Exclusive Benefit of Our Clients 1

PO Box 2226

Omaha NE 68103-2226

     11.68

The Panama Street Fund 1

7303 Emlen St

Philadelphia PA 19119-2812

     5.60

Institutional Class shares

  

Charles Schwab & Co Inc.

Special Custody A/C FBO Customers 1

ATTN Mutual Funds

101 Montgomery St

San Francisco CA 94104-4151

     16.02

National Financial Services LLC for Exclusive Benefit of Customers 1

ATTN Mutual Funds Dept 5th FL

499 Washington Blvd FL 5

Jersey City NJ 07310-2010

     12.27

Pershing LLC 1

PO Box 2052

Jersey City NJ 07303-2052

     11.31

Bankplus Wealth Management Group 1 1

1018 Highland Colony Pkwy Ste 600

Ridgeland MS 39157-2084

     8.02

 

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Name and Address

   Percentage
Ownership
 

UBS WM USA 1

000 11011 6100

OMNI Account M/F

ATTN Department Manager

1000 Harbor Blvd FL 5

Weehawken NJ 07086-6761

     5.99

Stuart L Sternberg 1

85 Bellevue Ave

Rye NY 10580-1840

     5.13
1 Record Ownership
2 Beneficial Ownership

As of April 30, 2015, all Trustees and officers of the RiverPark Trust, as a group, owned beneficially (as that term is defined in Section 13(d) of the Exchange Act) greater than 1% but less than 5% of the outstanding shares of any class of the RiverPark Fund.

Beneficial Ownership of the TCW Fund

To the knowledge of the TCW Fund, the following are the only persons who owned of record or beneficially 5% or more of the outstanding shares of each class of the TCW Fund, as of April 30, 2015:

 

Name and Address

  Percentage Ownership  
    Before
Reorganization
    After
Reorganization
(pro forma)
 

N Class shares

   

TCW Asset Management Company International Limited 2

89 Nexus Way

Camana Bay KY1-9007

Cayman Islands

    100.00 %*      *

National Financial Services LLC for Exclusive Benefit of Customers 1

ATTN Mutual Funds Dept 5th FL

499 Washington Blvd FL 5

Jersey City NJ 07310-2010

    N/A        33.69

Charles Schwab & Co Inc.

Special Custody A/C FBO Customers 1

ATTN Mutual Funds

101 Montgomery St

San Francisco CA 94104-4151

    N/A        31.16

TD Ameritrade Inc. for the Exclusive Benefit of Our Clients 1

PO Box 2226

Omaha NE 68103-2226

    N/A        11.64

The Panama Street Fund 1

7303 Emlen St

Philadelphia PA 19119-2812

    N/A        5.58

 

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Name and Address

  Percentage Ownership  
    Before
Reorganization
    After
Reorganization
(pro forma)
 

I Class shares

   

TCW Asset Management Company International Limited 2

89 Nexus Way

Camana Bay KY1-9007

Cayman Islands

    100.00 %*      *

Charles Schwab & Co Inc.

Special Custody A/C FBO Customers 1

ATTN Mutual Funds

101 Montgomery St

San Francisco CA 94104-4151

    N/A        16.00

National Financial Services LLC for Exclusive Benefit of Customers 1

ATTN Mutual Funds Dept 5th FL

499 Washington Blvd FL 5

Jersey City NJ 07310-2010

    N/A        12.26

Pershing LLC 1

PO Box 2052

Jersey City NJ 07303-2052

    N/A        11.30

Bankplus Wealth Management Group 1

1018 Highland Colony Pkwy Ste 600

Ridgeland MS 39157-2084

    N/A        8.02

UBS WM USA 1

000 11011 6100

OMNI Account M/F

ATTN Department Manager

1000 Harbor Blvd FL 5

Weehawken NJ 07086-6761

    N/A        5.99

Stuart L Sternberg 1

85 Bellevue Ave

Rye NY 10580-1840

    N/A        5.13

 

* For purposes of the 1940 Act, any person who owns directly or through one or more controlled companies more than 25% of the voting securities of a company is presumed to “control” such company. Under this definition, this shareholder may be deemed to be controlling the TCW Fund. This shareholder is a Cayman Islands Ordinary Non-Resident Company and is an indirect subsidiary of TCW Group, Inc.
** Less than 1%
1 Record Ownership
2 Beneficial Ownership

As of April 30, 2015, no trustees and officers of the TCW Trust, as a group, owned beneficially (as that term is defined in Section 13(d) of the Exchange Act) any of the outstanding shares of any class of the TCW Fund.

 

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TCW ALTERNATIVE FUNDS

TCW/GARGOYLE HEDGED VALUE FUND — N CLASS (TFHVX)

TCW/GARGOYLE HEDGED VALUE FUND — I CLASS (TFHIX)

STATEMENT OF ADDITIONAL INFORMATION

Dated May 15, 2015

This Statement of Additional Information (the “Reorganization SAI”) relates to the reorganization (the “Reorganization”) of RiverPark/Gargoyle Hedged Value Fund, a series of RiverPark Funds Trust, a Delaware statutory trust (the “RiverPark Fund”) into the TCW/Gargoyle Hedged Value Fund, a series of TCW Alternative Funds, a Delaware statutory trust (the “TCW Fund”).

This Reorganization SAI contains information that may be of interest to shareholders of the RiverPark Fund relating to the Reorganization, but which is not included in the Proxy Statement/Prospectus dated May 15, 2015 (the “Proxy Statement/Prospectus”). As described in the Proxy Statement/Prospectus, pursuant to the Reorganization, the RiverPark Fund will transfer all of its assets to the TCW Fund in exchange for shares of the TCW Fund with a value equal to the value of the RiverPark Fund’s assets net of liabilities, and for assumption by the TCW Fund of all liabilities of the RiverPark Fund. As soon as possible thereafter, the TCW Fund will issue its shares to holders of the corresponding class of the RiverPark Fund (see chart below) in the subsequent, complete liquidation of the RiverPark Fund.

This Reorganization SAI is not a prospectus and should be read in conjunction with the Proxy Statement/Prospectus. You can obtain a free copy of the Proxy Statement/Prospectus by contacting a TCW Fund representative at:

865 South Figueroa Street, Suite 1800

Los Angeles, CA 90017

866-858-4338

 

RiverPark Fund

       

TCW Fund

Retail Class    reorganizes into    N Class shares
Institutional Class    reorganizes into    I Class shares

No person has been authorized to give any information or to make any representations other than those contained in this Reorganization SAI or in the Proxy Statement/Prospectus and in the materials expressly incorporated herein by reference and, if given or made, such other information or representations must not be relied upon as having been authorized by either the RiverPark Fund or the TCW Fund.

 

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Additional Information About the RiverPark Fund

Incorporated by reference is the Statement of Additional Information in the Registration Statement on Form N-1A of the RiverPark Funds Trust dated January 28, 2015 (SEC Accession No. 0001398344-15-000411) as filed with the Securities and Exchange Commission (the “SEC”).

Additional Information About the TCW Fund

The Statement of Additional Information of the TCW Alternatives Trust is incorporated herein (see below).

Financial Statements (Unaudited)

Incorporation by Reference

This Reorganization SAI incorporates by reference the annual report of the RiverPark Fund for the fiscal year ended September 30, 2014, filed with the SEC on December 9, 2014 (SEC Accession No. 0001135428-14-000759), which has been filed with the SEC. This report contains historical financial information regarding the RiverPark Fund. The financial statements therein, and the reports of the independent public registered accounting firms therein, are incorporated herein by reference. Because the TCW Fund was newly-created for purposes of the Reorganization and has not yet commenced operations, annual or semi-annual reports to shareholders are not available.

Pro Forma Financial Information

Under the Agreement and Plan of Reorganization, the RiverPark Fund is proposed to be reorganized into the TCW Fund. Pro forma financial information has not been prepared for the Reorganization of the RiverPark Fund into the TCW Fund because the TCW Fund is a newly-created shell series with no assets or liabilities. The TCW Fund will commence investment operations upon completion of the Reorganization and continue the operations of the RiverPark Fund. The RiverPark Fund will be the accounting survivor after the Reorganization.

 

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LOGO

 

Family of Funds TCW Alternative Funds APRIL 10 2015 Statement of Additional Information TCW/Gargoyle Hedged Value Fund (I Share: TFHIX; N Share: TFHVX) This Statement of Additional Information is not a prospectus but contains information in addition to, and more detailed than, that set forth in the Prospectus dated the same date, which describes the investment series of TCW Alternative Funds. This Statement of Additional Information should be read in conjunction with the Prospectus. A Prospectus may be obtained without charge by writing to TCW Alternative Funds, 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017 or by calling (866) 858-4338. This Statement of Additional Information, although not in itself a prospectus, is incorporated by reference into the Prospectus in its entirety. TCW Alternative Funds | 865 South Figueroa Street | Los Angeles, California 90017 | (866) 858-4338 | www.TCW.com


Table of Contents

TABLE OF CONTENTS

 

General Information

  3   

Investment Practices

  3   

Risk Considerations

  12   

Portfolio Turnover

  16   

Brokerage Allocation and Other Practices

  16   

Investment Restrictions

  17   

Trustees and Officers

  20   

Investment Advisory Services

  24   

Portfolio Management

  26   

Distribution of Fund Shares

  27   

Other Service Providers

  28   

Control Persons and Principal Holders of Securities

  29   

Code of Ethics

  29   

Disclosure of Portfolio Information

  29   

Proxy Voting Guidelines

  30   

Determination of Net Asset Value

  38   

Conversion of Shares Between Classes

  40   

Redemption In Kind

  40   

Distributions and Taxes

  40   

Shares and Voting Rights

  44   

Financial Statements

  45   

Appendix A - Description of S&P and Moody’s Credit Ratings

  A-1   

 

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GENERAL INFORMATION

TCW Alternative Funds (the “Trust”) was organized on August 20, 2014 as a Delaware statutory trust and is registered with the U.S. Securities and Exchange Commission (“SEC”) as an open-end, management investment company. The Trust has acknowledged that the name “TCW” is owned by The TCW Group, Inc. (“TCW”), the parent of TCW Investment Management Company (the “Adviser”). The Fund or the Adviser may retain one or more sub-advisers, as described below (the Adviser and any such sub-advisers are referred to as the “Advisers.”) The Trust has agreed to change its name and the names of its series at the request of TCW if any advisory agreement into which TCW or any of its affiliates and the Trust may enter is terminated.

The Trust currently consists of one series, TCW/Gargoyle Hedged Value Fund (the “Fund”), which has separate assets and liabilities from any other series of the Trust that may be established. The Fund offers two classes of shares: Class I shares and Class N shares. The Fund is classified as a diversified fund under the Investment Company Act of 1940, as amended (“1940 Act”).

INVESTMENT PRACTICES

The Fund may, but is not required to, utilize, among others, one or more of the strategies or securities set forth below, which supplement the principal investment strategies of the Fund described in the Prospectus. The Fund may also invest in other instruments (including derivative investments) or use other investment strategies that are developed or become available in the future and that are consistent with its objectives and restrictions.

Money Market Instruments. The Fund may invest in money market instruments and will generally do so for temporary and defensive purposes only. These instruments include, but are not limited to:

U.S. Government Securities. Obligations issued or guaranteed as to principal and interest by the United States or its agencies (such as the Export-Import Bank of the United States, Federal Housing Administration and Government National Mortgage Association) or its instrumentalities (such as the Federal Home Loan Bank), including Treasury bills, notes and bonds.

Bank Obligations. Obligations including certificates of deposit, bankers’ acceptances, commercial paper (see below) and other debt obligations of banks subject to regulation by the U.S. Government and having total assets of $1 billion or more, and instruments secured by such obligations, not including obligations of foreign branches of domestic banks except as permitted below.

Eurodollar Certificates of Deposit. Eurodollar certificates of deposit issued by foreign branches of domestic banks having total assets of $1 billion or more (investments in Eurodollar certificates may be affected by changes in currency rates or exchange control regulations, or changes in governmental administration or economic or monetary policy in the United States and abroad).

Obligations of Savings Institutions. Certificates of deposit of savings banks and savings and loan associations, having total assets of $1 billion or more (investments in savings institutions above $250,000 in principal amount are not protected by federal deposit insurance).

Fully Insured Certificates of Deposit. Certificates of deposit of banks and savings institutions, having total assets of less than $1 billion, if the principal amount of the obligation is insured by the Bank Insurance Fund or the Savings Association Insurance Fund (each of which is administered by the Federal Deposit Insurance Corporation), limited to $250,000 principal amount per certificate and to 15% or less of the Fund’s net assets in all such obligations and in all illiquid assets, in the aggregate.

Commercial Paper. Commercial paper rated within the two highest ratings categories by Standard & Poor’s Corporation (“S&P”) or Moody’s Investors Service, Inc. (“Moody’s”) or, if not rated, that is determined by the Adviser or the Sub-Adviser to be of comparable quality.

Money Market Mutual Funds. Shares of United States money market investment companies.

Repurchase Agreements. Repurchase agreements, which may be viewed as a type of secured lending by the Fund, typically involve the acquisition by the Fund of debt securities from a selling financial institution such as a bank, savings and loan association or broker-dealer. The repurchase agreements will provide that the Fund will sell back to the institution, and that the institution will repurchase, the underlying security (“collateral”) at a specified price and at a fixed time in the future, usually not more than seven days from the date of purchase. The collateral will be maintained in a segregated account and, with respect to United States repurchase agreements, will be marked to market daily to ensure that the full value of the collateral, as specified in the repurchase agreement, does not decrease below the repurchase price plus accrued interest. If such a decrease occurs, additional collateral will be requested and, when received, added to the account to maintain full collateralization. The Fund will accrue interest from the institution until the date the repurchase occurs. Although this date is deemed by the Fund to be the maturity date of a repurchase agreement, the maturities of the collateral securities are not subject to any limits and may exceed one year. Repurchase agreements maturing in more than seven days will be considered illiquid for purposes of the restriction on the Fund’s investment in illiquid and restricted securities.

 

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Investments in Other Investment Company Securities. Under the 1940 Act, the Fund may not (i) own more than 3% of the outstanding voting stock of an investment company, (ii) invest more than 5% of its total assets in any one investment company, or (iii) invest more than 10% of its total assets in the securities of investment companies. Such investments may include open-end investment companies, closed-end investment companies, exchange-traded funds (“ETFs”), business development companies and unit investment trusts (“UITs”). In some instances, the Fund may invest in an investment company in excess of these limits. This may occur, for instance, in “cash sweep” arrangements in which the Fund invests all or a portion of its available cash in a money market fund. As the shareholder of another investment company, the Fund would bear, along with other shareholders, its pro rata portion of the other investment company’s expenses, including advisory fees. Any expenses incurred by investing in other investment companies, including advisory fees and operating costs charged by those vehicles, are in addition to the expenses the Fund pays in connection with its own operations. In addition, the Fund would pay brokerage costs associated with its purchases of shares of these vehicles. These limitations do not apply to investments in investment companies that are not registered with the SEC, such as private funds and offshore funds. Further, certain ETFs have obtained exemptive orders from the SEC that allows the Fund to invest in those ETFs beyond the limits described above.

Despite the possibility of greater fees and expenses, investments in other investment companies may be attractive nonetheless for several reasons, especially in connection with foreign investments. Because of restrictions on direct investment by U.S. entities in certain countries, investing indirectly in such countries (by purchasing shares of another fund that is permitted to invest in such countries) may be the most practical and efficient way for the Fund to invest in such countries. In other cases, when a portfolio manager desires to make only a relatively small investment in a particular country, investing through another fund that holds a diversified portfolio in that country may be more effective than investing directly in issuers in that country.

Among the types of investment companies in which the Fund may invest are ETFs, which consist of Portfolio Depository Receipts (“PDRs”) and Index Fund Shares. ETFs are investment companies that invest in a portfolio of securities designed to track a particular market segment or index and whose shares are bought and sold on a securities exchange. ETFs, like mutual funds, have expenses associated with their operation, including advisory fees. When the Fund invests in an ETF, in addition to directly bearing expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses. As with any exchange listed security, ETF shares purchased in the secondary market are subject to customary brokerage charges.

PDRs represent interests in a UIT holding a fund of securities that may be obtained from the UIT or purchased in the secondary market. Each PDR is intended to track the underlying securities, trade like a share of common stock, and pay to PDR holders periodic dividends proportionate to those paid with respect to the underlying securities, less certain expenses. Index Fund Shares are shares issued by an open-end management investment company that seeks to provide investment results that correspond generally to the price and yield performance of a specified foreign or domestic index (an “Index Fund”).

Individual investments in PDRs generally are not redeemable, except upon termination of the UIT. Similarly, individual investments in Index Fund Shares generally are not redeemable. However, large quantities of PDRs known as “Creation Units” are redeemable from the sponsor of the UIT. Similarly, block sizes of Index Fund Shares, also known as “Creation Units,” are redeemable from the issuing Index Fund. The liquidity of small holdings of ETFs, therefore, will depend upon the existence of a secondary market.

The price of ETFs is derived from and based upon the securities held by the UIT or Index Fund, and the Fund, when it invests in ETFs, will indirectly bear the risk of those investments.

Accordingly, the level of risk involved in the purchase or sale of an ETF is similar to the risk involved in the purchase or sale of traditional common stock, with the exception that the pricing mechanism for an ETF is based on a basket of stocks. Disruptions in the markets for the securities underlying ETFs purchased or sold by the Fund could result in losses on investments in ETFs. ETFs represent an unsecured obligation and therefore carry with them the risk that the counterparty will default and the Fund may not be able to recover the current value of its investment.

Borrowing. Except as described below, the Fund may borrow money to the extent permitted under the 1940 Act, and as interpreted, modified or otherwise permitted by regulatory authority having jurisdiction, from time to time. This means that, in general, the Fund may borrow money from banks for any purpose in an amount up to 1/3 of the Fund’s net assets. The Fund also may borrow money for temporary administrative purposes in an amount not to exceed 5% of the Fund’s total assets.

Specifically, provisions of the 1940 Act require the Fund to maintain continuous asset coverage (that is, total assets including borrowings, less liabilities exclusive of borrowings) of 300% of the amount borrowed, with an exception for borrowing not in excess of 5% of the Fund’s total assets made for temporary administrative purposes. Any borrowings for temporary administrative purposes in excess of 5% of the Fund’s total assets must maintain continuous asset coverage. If the 300% asset coverage should decline as a result of market fluctuations or other reasons, the Fund may be required to sell some of its portfolio holdings within three days to reduce the debt and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time.

Borrowing will tend to exaggerate the effect on net asset value of any increase or decrease in the market value of the Fund’s portfolio. Money borrowed will be subject to interest costs which may or may not be recovered by appreciation of the securities purchased. The Fund also may be required to maintain minimum average balances in connection with such borrowing or to pay a commitment or other fee to maintain a line of credit; either of these requirements would increase the cost of borrowing over the stated interest rate.

 

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When-Issued and Delayed Delivery Securities and Forward Commitments. From time to time, in the ordinary course of business, the Fund may purchase securities on a when-issued or delayed delivery basis and may purchase or sell securities on a forward commitment basis. These types of transactions are negotiated directly with a counterparty, rather than through an exchange. When such transactions are negotiated, the price is fixed at the time of the commitment, but delivery and payment can take place a month or more after the date of the commitment. The securities so purchased or sold are subject to market fluctuation, and no interest or dividends accrue to the purchaser prior to the settlement date. While the Fund will only purchase securities on a when-issued, delayed delivery or forward commitment basis with the intention of acquiring the securities, the Fund may sell the securities before the settlement date, if it is deemed advisable. At the time the Fund makes the commitment to purchase or sell securities on a when-issued, delayed delivery or forward commitment basis, the Fund will record the transaction and thereafter reflect the value, each day, of such security purchased or, if a sale, the proceeds to be received, in determining its net asset value. At such time, the Fund will also establish a segregated account in which it will continuously maintain cash or U.S. Government securities or other liquid securities equal in value to recognized commitments for such securities. At the time of delivery of the securities, the value may be more or less than the purchase or sale price. An increase in the percentage of the Fund’s assets committed to the purchase of securities on a when-issued or delayed delivery basis may increase the volatility of the Fund’s net asset value.

When, As and If Issued Securities. The Fund may purchase securities on a “when, as and if issued” basis under which the issuance of the security depends upon the occurrence of a subsequent event, such as approval of a merger, corporate reorganization, leveraged buyout or debt restructuring. The commitment for the purchase of any such security will not be recognized in the portfolio of the Fund until the Sub-Adviser (as defined below) determines that issuance of the security is probable. At such time, the Fund will record the transaction and, in determining its net asset value, will reflect the value of the security daily. At such time, the Fund will also establish a segregated account with its custodian bank in which it will continuously maintain cash or U.S. Government securities or other liquid securities equal in value to recognized commitments for such securities. Settlement of the trade will ordinarily occur within three business days of the occurrence of the subsequent event. Once a segregated account has been established, if the anticipated event does not occur and the securities are not issued, the Fund will have lost an investment opportunity. The Fund may purchase securities on such basis without limit. An increase in the percentage of the Fund’s assets committed to the purchase of securities on a “when, as and if issued” basis may increase the volatility of its net asset value. The Fund may also sell securities on a “when, as and if issued” basis provided that the issuance of the security will result automatically from the exchange or conversion of a security owned by the Fund at the time of the sale.

Options. Subject to certain limitations, the Fund may purchase and write (sell) call and put options on securities and securities indices, including options listed on U.S. or foreign securities exchanges or written in over-the-counter transactions (“OTC Options”). The Fund may invest up to 50% of the value of its assets, represented by premiums paid, to purchase call and put options on securities and securities indices. The Fund may also sell uncovered call options on securities and securities indices to the extent permitted by the 1940 Act and the Advisers’ policies. The Fund may purchase and sell American or European style options. If an option is American style, it may be exercised on any day up to its expiration date. A European style option may be exercised only on its expiration date.

Exchange-listed options are issued by the Options Clearing Corporation (“OCC”) (in the U.S.) or other clearing corporation or exchange which assures that all transactions in such options are properly executed. OTC Options are purchased from or sold (written) to dealers or financial institutions which have entered into direct agreements with the Fund. With OTC Options, such variables as expiration date, exercise price and premium will be agreed upon between the Fund and the transacting dealer, without the intermediation of a third party such as the OCC. If the transacting dealer fails to make or take delivery of the securities or amount of foreign currency underlying an option it has written, in accordance with the terms of that option, the Fund would lose the premium paid for the option as well as any anticipated benefit of the transaction. The Fund will engage in OTC Option transactions only with brokers or financial institutions deemed creditworthy by the Adviser or the Sub-Adviser.

As an investment company registered with the SEC, the Fund must “set aside” (often referred to as “asset segregation”) liquid assets equal in value to market value of the underlying securities (less margin on deposit) or strike price to “cover” any written call or put options it enters into. Alternatively, the Fund may cover a written call option by holding the underlying security or purchasing an offsetting call option (see “Covered Call Writing” below). Similarly, the Fund may cover a written put option by selling the underlying security short at the strike price or purchasing an offsetting put option (see “Covered Put Writing” below).

Covered Call Writing. The Fund is permitted to write covered call options on securities. Generally, a call option is “covered” if the Fund owns, or has the right to acquire, without additional cash consideration (or for additional cash consideration held for the Fund by its custodian in a segregated account) the underlying security subject to the option, or otherwise segregates sufficient cash or other liquid assets to cover the outstanding position. A call option is also covered if the Fund holds a call on the same security as the underlying security of the written option, where the exercise price of the call used for coverage is equal to or less than the exercise price of the call written or greater than the exercise price of the call written if the marked to market difference is maintained by the Fund in cash or other liquid assets which the Fund has segregated for this purpose.

 

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The writer of an option receives from the purchaser, in return for a call it has written, a “premium” (i.e., the price of the option). Receipt of these premiums may better enable the Fund to earn a higher level of current income than it would earn from holding the underlying securities alone. Moreover, the premium received will offset a portion of the potential loss incurred by the Fund if the securities underlying the option are ultimately sold (exchanged) by the Fund at a loss.

However, during the option period, the covered call writer has, in return for the premium on the option, given up the opportunity for capital appreciation above the exercise price should the market price of the underlying security increase, but has retained the risk of loss should the price of the underlying security decline. The premium received will fluctuate with varying economic market conditions. If the market value of the portfolio securities upon which call options have been written increases, the Fund may receive a lower total return from the portion of its portfolio upon which calls have been written than it would have had such calls not been written.

With respect to listed options and certain OTC Options, during the option period, the Fund may be required, at any time, to deliver the underlying security against payment of the exercise price on any calls it has written (exercise of certain listed and OTC Options may be limited to specific expiration dates). This obligation is terminated upon the expiration of the option period or at such earlier time when the writer effects a closing purchase transaction. A closing purchase transaction is accomplished by purchasing an option of the same series as the option previously written. However, once the Fund has been assigned an exercise notice, the Fund will be unable to effect a closing purchase transaction.

Closing purchase transactions are ordinarily effected to realize a profit on an outstanding call option, to prevent an underlying security from being called, to permit the sale of an underlying security or to enable the Fund to write another call option on the underlying security with either a different exercise price or expiration date or both. The Fund may realize a net gain or loss from a closing purchase transaction depending upon whether the amount of the premium received on the call option is more or less than the cost of effecting the closing purchase transaction. Any loss incurred in a closing purchase transaction may be wholly or partially offset by unrealized appreciation in the market value of the underlying security. Conversely, a gain resulting from a closing purchase transaction could be offset in whole or in part or exceeded by a decline in the market value of the underlying security.

If a call option expires unexercised, the Fund realizes a gain in the amount of the premium on the option less the commission paid. Such a gain, however, may be offset by depreciation in the market value of the underlying security during the option period. If a call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security equal to the difference between the purchase price of the underlying security and the proceeds of the sale of the security (currency) plus the premium received on the option less the commission paid.

Covered Put Writing. The Fund is permitted to write covered put options. As a writer of a covered put option, the Fund incurs an obligation to buy the security underlying the option from the purchaser of the put option, at the option’s exercise price at any time during the option period, at the purchaser’s election (certain listed and OTC put options written by the Fund will be exercisable by the purchaser only on a specific date). A put option is “covered” if, at all times during the option period, the Fund maintains, in a segregated account, cash or other liquid assets in an amount equal to at least the exercise price of the option. Similarly, a short put position could be covered by the Fund by its purchase of a put option on the same security as the underlying security of the written option, where the exercise price of the purchased option is equal to or more than the exercise price of the put written or less than the exercise price of the put written if the marked to market difference is maintained by the Fund in cash or other liquid assets which the Fund holds in a segregated account. In writing a put option, the Fund assumes the risk of loss should the market value of the underlying security decline below the exercise price of the put option (any loss being decreased by the receipt of the premium on the option written). In the case of listed options, during the option period, the Fund may be required, at any time, to make payment of the exercise price against delivery of the underlying security. The operation of and limitations on covered put options in other respects are substantially identical to those of call options.

Purchasing Call and Put Options. The Fund may purchase a call option in order to close out a covered call position (see “Covered Call Writing” above), to protect against an increase in price of a security it anticipates purchasing. A call option purchased to effect a closing transaction on a call written over-the-counter may be a listed or an OTC Option. In either case, the call option purchased is likely to be on the same securities and have the same terms as the written call option. If purchased over-the-counter, the call option would generally be acquired from the dealer or financial institution which purchased the call option written by the Fund.

The Fund may purchase put options on securities which it holds in its portfolio to protect itself against a decline in the value of the security and to close out written put option positions. If the value of the underlying security were to fall below the exercise price of the put option purchased in an amount greater than the premium paid for the put option, the Fund would incur no additional loss. In addition, the Fund may sell a put option which it has previously purchased prior to the sale of the securities underlying such option. Such a sale would result in a net gain or loss depending on whether the amount received on the sale is more or less than the premium and other transaction costs paid on the put option being sold. Such gain or loss could be offset in whole or in part by a change in the market value of the underlying security. If a put option purchased by the Fund expired without being sold or exercised, the premium would be lost.

 

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Options on Securities Indices. Certain options on stock indices provide the holder with the right to make or receive a cash settlement upon exercise of the option, rather than the right to purchase or sell a security. The amount of this settlement is equal to (i) the amount, if any, by which the fixed exercise price of the option exceeds (in the case of a call) or is below (in the case of a put) the closing value of the underlying index on the date of exercise, multiplied by (ii) a fixed “index multiplier.” The purchaser of the option receives this cash settlement amount if the closing level of the stock index on the day of exercise is greater than, in the case of a call, or less than, in the case of a put, the exercise price of the option. The writer of the option is obligated, in return for the premium received, to make delivery of this amount if the option is exercised. As in the case of noncash-settled options, the writer or holder may liquidate positions in stock index options prior to exercise or expiration by entering into closing transactions on the exchange on which such positions were established, subject to the availability of a liquid secondary market.

The index underlying a stock index option may be a “broad-based” index, such as the S&P 500 Index or the NYSE Composite Index, the changes in value of which ordinarily will reflect movements in the stock market in general. In contrast, certain options may be based on narrower market indices, such as the S&P 100 Index, or on indices of securities of particular industry groups, such as those of oil and gas or technology companies. A stock index assigns relative values to the stock included in the index, and the index fluctuates with changes in the market values of the stocks so included.

The purchase and sale of options on stock indices will be subject to risks applicable to options transactions generally. In addition, the distinctive characteristics of options on indices create certain risks that are not present with stock options. Index prices may be distorted if trading of certain stocks included in the index is interrupted. Trading in index options also may be interrupted in certain circumstances such as if trading were halted in a substantial number of stocks included in the index or if dissemination of the current level of an underlying index is interrupted. If this occurred, the Fund would not be able to close out options which it had purchased and, if restrictions on exercise were imposed, may be unable to exercise an option it holds, which could result in losses if the underlying index moves adversely before trading resumes. However, it is the Fund’s policy to purchase and sell options only on indices that include a sufficient number of stocks so that the likelihood of a trading halt in the index is minimized.

Limitations on the Use of Futures, Options and Swaps. The Adviser and the Sub-Adviser currently claim an exclusion from the definition of the term “commodity pool operator” (“CPO”) under the Commodity Exchange Act of 1936, as amended (“CEA”), and, therefore, are not subject to registration or regulation as CPOs under the CEA in respect of the Fund. However, there is no certainty that the Fund or the Adviser or the Sub-Adviser will be able to rely on the exclusion in the future as the Fund’s investments change over time. In order to be eligible to rely on the exclusion, the Fund may enter into futures, options, forwards, and swaps that do not constitute bona fide hedging only if, immediately thereafter, (i) the aggregate initial margin and premiums required to establish such positions will not exceed 5% of the Fund’s liquidation value, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into, and provided that in the case of an option that is in-the-money (the exercise price of the call (put) option is less (more) than the market price of the underlying security) at the time of purchase, the in-the-money amount may be excluded in computing such 5%; or (ii) the aggregate net notional value of such positions, determined at the time the most recent position was established, does not exceed 100% of the Fund’s liquidation value, after taking into account unrealized profits and unrealized losses on any such positions it has entered into.

Convertible Securities. The Fund may acquire convertible securities. Convertible securities include bonds, debentures, notes, preferred stock or other securities that may be converted into or exchanged for common stock or other equity securities of the same or a different issuer. Convertible securities provide a conversion right for a particular period of time at a specified price or formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the dividend paid on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible debt securities in that they ordinarily provide a stable stream of income with generally higher yields than those of common stocks of the same or similar issuers. Therefore, they generally entail less risk than the issuer’s common stock, although the extent to which such risk is reduced depends in large measure upon the proximity of its price to its value as a nonconvertible fixed income security.

 

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The value of a convertible security is a function of its “investment value” (determined by its yield in comparison with the yields of other securities of comparable maturity and quality that do not have a conversion privilege), and its “conversion value” (the security’s worth, at market value, if converted into the underlying common stock). The investment value of a convertible security is influenced by changes in interest rates, with investment value declining as interest rates increase and increasing as interest rates decline. The credit standing of the issuer and other factors may also have an effect on the convertible security’s investment value. The conversion value of a convertible security is determined by the market price of the underlying common stock. If the conversion value is low relative to the investment value, the price of the convertible security is governed principally by its investment value. To the extent the market price of the underlying common stock approaches or exceeds the conversion price, the price of the convertible security will be increasingly influenced by its conversion value. In addition, a convertible security generally will sell at a premium over its conversion value determined by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed income security.

Restricted Securities. The Fund may invest in securities which are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or they are otherwise restricted as to sale. Restricted securities may include privately placed securities and securities offered pursuant to Rule 144A under the Securities Act.

Restricted securities are subject to legal and/or contractual restrictions on resale. In some cases, certain restricted securities can be sold without SEC registration to qualified institutional buyers and in accordance with the Fund’s procedures; such restricted securities could be treated as liquid. However, other restricted securities, such as those that are the subject of a private placement, may be illiquid for an extended period of time and will be reported as such.

Foreign Investments. Investments in foreign securities may offer potential benefits not available from investments solely in securities of domestic issuers or dollar denominated securities. Such benefits may include the opportunity to invest in foreign issuers that appear to offer better opportunity for long-term capital appreciation or current earnings than investments in domestic issuers and the opportunity to invest in foreign countries with economic policies or business cycles different from those of the United States. Investments in foreign securities may involve greater risks than investing in domestic securities because the Fund’s performance may depend on factors other than the performance of a particular company. Typically, the Fund only invests in a non-U.S. issuer via shares of that issuer listed on a U.S. stock exchange, and therefore is subject to the accounting, auditing and financial reporting standards of that exchange. Political or social instability, civil unrest, acts of terrorism and regional economic volatility are other potential risks that could impact an investment in a security of a non-U.S. issuer In addition, with respect to certain foreign countries, there is the possibility of expropriation or confiscatory taxation or diplomatic developments which could affect the Fund’s investments in issuers of such countries. Moreover, individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency and balance of payment position.

Sovereign Debt Obligations. The Fund may invest in sovereign debt. Political conditions, in terms of a country or agency’s willingness to meet the terms of its debt obligations, are of considerable significance.

Sovereign debt generally offers high yields, reflecting not only perceived credit risk, but also the need to compete with other local investments in domestic financial markets. A foreign debtor’s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the foreign debtor’s policy towards the International Monetary Fund and the political constraints to which a sovereign debtor may be subject. Sovereign debtors may default on their sovereign debt. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearages on their debt. The commitment on the part of these governments, agencies and others to make such disbursements may be conditioned on a sovereign debtor’s implementation of economic reforms and/or economic performance and the timely service of such debtor’s obligations. Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of such third parties’ commitments to lend funds to the sovereign debtor, which may further impair such debtor’s ability or willingness to service its debts.

The occurrence of political, social and diplomatic changes in one or more of the countries issuing sovereign debt could adversely affect the Fund’s investments. The countries issuing such instruments are faced with social and political issues and some of them have experienced high rates of inflation in recent years and have extensive internal debt. Among other effects, high inflation and internal debt service requirements may adversely affect the cost and availability of future domestic sovereign borrowing to finance governmental programs, and may have other adverse social, political and economic consequences. Political changes or a deterioration of a country’s domestic economy or balance of trade may affect the willingness of countries to services their sovereign debt. There can be no assurance that adverse political changes will not cause the Fund to suffer a loss of interest or principal on any of its holdings.

 

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As a result of all of the foregoing, a government obligor may default on its obligations. If such an event occurs, the Fund may have limited legal recourse against the issuer and/or guarantor. Remedies must, in some cases, be pursued in the courts of the defaulting party itself, and the ability of the holder of foreign government debt securities to obtain recourse may be subject to the political climate in the relevant country. Bankruptcy, moratorium and other similar laws applicable to issuers of sovereign debt obligations may be substantially different from those applicable to issuers of private debt obligations. In addition, no assurance can be given that the holders of commercial bank debt will not contest payments to the holders of other foreign government debt obligations in the event of default under their commercial bank loan agreements.

Periods of economic uncertainty may result in the volatility of market prices of sovereign debt and in turn, the Fund’s net asset value, to a greater extent than the volatility inherent in domestic securities. The value of sovereign debt will likely vary inversely with changes in prevailing interest rates, which are subject to considerable variance in the international market.

Master Limited Partnerships. The Fund may invest in master limited partnerships (“MLPs”). MLPs are limited partnerships or limited liability companies, whose partnership units or limited liability interests are listed and traded on a U.S. securities exchange, and are treated as publicly traded partnerships for federal income tax purposes. To qualify to be treated as a partnership for tax purposes, an MLP must receive at least 90% of its income from qualifying sources as set forth in Section 7704(d) of the Internal Revenue Code of 1986, as amended (the “IRC”). These qualifying sources include activities such as the exploration, development, mining, production, processing, refining, transportation, storage and marketing of mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners. MLPs that are formed as limited liability companies generally have two analogous classes of owners, the managing member and the members. For purposes of this section, references to general partners also apply to managing members and references to limited partners also apply to members. The general partner is typically owned by a major energy company, an investment fund, the direct management of the MLP or is an entity owned by one or more of such parties. The general partner may be structured as a private or publicly traded corporation or other entity. The general partner typically controls the operations and management of the MLP through an equity interest of as much as 2% in the MLP plus, in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the MLP through ownership of common units and have a limited role in the MLP’s operations and management.

An investment in MLP units involves certain risks which differ from an investment in the securities of a corporation. Holders of MLP units have limited control and voting rights on matters affecting the partnership. In addition, there are certain tax risks associated with an investment in MLP units and conflicts of interest exist between common unit holders and the general partner, including those arising from incentive distribution payments. As a partnership, an MLP has no tax liability at the entity level. If, as a result of a change in current law or a change in an MLP’s business, an MLP were treated as a corporation for federal income tax purposes, such MLP would be obligated to pay federal income tax on its income at the corporate tax rate. If an MLP were classified as a corporation for federal income tax purposes, the amount of cash available for distribution by the MLP would be reduced and distributions received by investors would be taxed under federal income tax laws applicable to corporate dividends (as dividend income, return of capital, or capital gain). Therefore, treatment of an MLP as a corporation for federal income tax purposes would result in a reduction in the after-tax return to investors, likely causing a reduction in the value of the Fund’s shares.

Equity-Linked Securities. The Fund may invest in equity-linked securities, including, but not limited to, participation notes and equity swaps. Equity-linked securities are privately issued securities whose investment results are designed to correspond generally to the performance of a specified stock index or “basket” of stocks, or a single stock. To the extent that the Fund invests in equity-linked securities whose return corresponds to the performance of a foreign security index or one or more foreign stocks, investing in equity-linked securities will involve risks similar to the risks of investing in foreign securities and subject to the Fund’s restrictions on investments in foreign securities. In addition, the Fund bears the risk that the counterparty of an equity-linked security may default on its obligations under the security. If the underlying security is determined to be illiquid, the equity-linked security would also be considered illiquid and thus subject to the Fund’s restrictions on investments in illiquid securities.

Participation notes, also known as participation certificates, are issued by banks or broker-dealers and are designed to replicate the performance of foreign companies or foreign securities markets and can be used by the Fund as an alternative means to access the securities market of a country. The performance results of participation notes will not replicate exactly the performance of the foreign companies or foreign securities markets that they seek to replicate due to transaction and other expenses. Investments in participation notes involve the same risks associated with a direct investment in the underlying foreign companies or foreign securities markets that they seek to replicate. There can be no assurance that the trading price of participation notes will equal the underlying value of the foreign companies or foreign securities markets that they seek to replicate. Participation notes are generally traded over-the-counter. Participation notes are subject to counterparty risk, which is the risk that the broker-dealer or bank that issues them will not fulfill its contractual obligation to complete the transaction with the Fund. Participation notes constitute general unsecured contractual obligations of the banks or broker-dealers that issue them, the counterparty, and the Fund is relying on the creditworthiness of such counterparty and has no rights under a participation note against the issuer of the underlying security. Participation notes involve transaction cost. If the underlying security is determined to be illiquid, participation notes may be illiquid and therefore subject to the Fund’s percentage limitation for investments in illiquid securities. Participation notes offer a return linked to a particular underlying equity, debt or currency.

 

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Equity swaps allow the parties to a swap agreement to exchange the dividend income or other components of return on an equity investment (for example, a group of equity securities or an index) for a component of return on another non-equity or equity investment. An equity swap may be used by the Fund to invest in a market without owning or taking physical custody of securities in circumstances in which direct investment may be restricted for legal reasons or is otherwise deemed impractical or disadvantageous. Equity swaps may also be used for hedging purposes or to seek to increase total return. The Fund’s ability to enter into certain swap transactions may be limited by tax considerations. The counterparty to an equity swap contract will typically be a bank, investment banking firm or broker/dealer.

Equity swap contracts may be structured in different ways. For example, a counterparty may agree to pay the Fund the amount, if any, by which the notional amount of the equity swap contract would have increased in value had it been invested in particular stocks (or an index of stocks), plus the dividends that would have been received on those stocks. In these cases, the Fund may agree to pay to the counterparty a floating rate of interest on the notional amount of the equity swap contract plus the amount, if any, by which that notional amount would have decreased in value had it been invested in such stocks. Therefore, the return to the Fund on the equity swap contract should be the gain or loss on the notional amount plus dividends on the stocks less the interest paid by the Fund on the notional amount. In other cases, the counterparty and the Fund may each agree to pay the other the difference between the relative investment performances that would have been achieved if the notional amount of the equity swap contract had been invested in different stocks (or indices of stocks). The Fund will generally enter into equity swaps on a net basis, which means that the two payment streams are netted out, with the Fund receiving or paying, as the case may be, only the net amount of the two payments. Payments may be made at the conclusion of an equity swap contract or periodically during its term.

Equity swaps are derivatives and their value can be very volatile. Equity swaps normally do not involve the delivery of securities or other underlying assets. Accordingly, the risk of loss with respect to equity swaps is normally limited to the net amount of payments that the Fund is contractually obligated to make. If the counterparty to an equity swap defaults, the Fund’s risk of loss consists of the net amount of payments that the Fund is contractually entitled to receive. Due to the fact that some swap agreements have a leverage component, adverse changes in the value or level of the underlying asset, reference rate, or index can result in a loss substantially greater than the cost of the underlying asset without the use of leverage. In addition, the value of some components of an equity swap (such as the dividends on a common stock) may also be sensitive to changes in interest rates. To the extent that the Sub-Adviser does not accurately analyze and predict the potential relative fluctuation of the components swapped with another party, the Fund may suffer a loss. Since equity swaps are normally illiquid, the Fund may be unable to terminate its obligations when desired. When entering into swap contracts, the Fund must “set aside” liquid assets, or engage in other appropriate measures to “cover” its obligation under the swap contract.

Inasmuch as these transactions are entered into for hedging purposes or are offset by segregated cash or liquid assets to cover the Fund’s exposure, the Fund and the Sub-Adviser believe that transactions do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to the Fund’s borrowing restrictions.

Warrants. A warrant confers upon its holder the right to purchase an amount of securities at a particular time and price. Because a warrant does not carry with it the right to dividends or voting rights with respect to the securities which it entitles a holder to purchase, and because it does not represent any rights in the assets of the issuer, warrants may be considered more speculative than certain other types of investments. Also, the value of a warrant does not necessarily change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to its expiration date.

Short Sales. If the Fund anticipates that the price of a security will decline, it may sell the security “short” and borrow the same security from a broker or other institution to complete the sale.

In a short sale, the Fund does not immediately deliver the securities sold and does not receive the proceeds from the sale. The Fund is said to have a short position in the securities sold until it delivers the securities sold, at which time it receives the proceeds of the sale. When a short sale transaction is closed out by delivery of the securities, any gain or loss on the transaction is generally taxable as a short term capital gain or loss.

The Fund may make a profit or loss depending upon whether the market price of the security decreases or increases between the date of the short sale and the date on which the Fund must replace the borrowed security. Until the security is replaced, the Fund generally is required to pay to the lender amounts equal to any interest that accrues during the period of the loan. To borrow the security, the Fund also may be required to pay a premium, which would also increase the cost of the security sold. The proceeds of the short sale will be retained by the broker (or by the Fund’s custodian in a special custody account), to the extent necessary to meet the margin requirements, until the short position is closed out.

 

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Until the Fund closes its short position or replaces the borrowed security, the Fund will designate liquid securities at such a level that (i) the amount deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short and (ii) the amount designated plus the amount deposited with the broker as collateral will not be less than the market value of the security at the time it was sold short.

Short Sales Against the Box. The Fund may sell securities “short against the box.” A short sale is “against the box” if the Fund contemporaneously owns or has the right to obtain at no added cost securities identical to those sold short. A short sale of an American Depository Receipt (“ADR”) is “against the box” if the Fund owns the underlying security represented by the ADR and reasonably believes it will be able to convert the security into the ADR prior to delivery.

To secure its obligation to deliver the securities sold short against the box, the Fund will deposit in a separate escrow account with its custodian an equal amount of the securities sold short or securities convertible into or exchangeable for such securities. The Fund may also close out a short sale against the box by purchasing and delivering an equal amount of the securities sold short, rather than by delivering securities already held by the Fund, if the Fund wants to, for example, continue to receive interest and dividend payments on securities in its portfolio that are convertible into the securities sold short or defer recognition of gain or loss for Federal income tax purposes.

Illiquid Securities. The Fund may invest up to 15% of its net assets in illiquid securities. The Fund may invest in (i) securities that are sold in private placement transactions between their issuers and their purchasers and that are neither listed on an exchange nor traded over-the-counter, and (ii) securities that are sold in transactions between qualified institutional buyers pursuant to Rule 144A under the Securities Act. Securities deemed liquid may be deemed illiquid for a time if private placement purchasers or qualified institutional buyers become uninterested or unwilling to purchase these securities.

While maintaining oversight, the Board of Trustees of the Trust (the “Board” or the “Board of Trustees”) has delegated to the Sub-Adviser the day-to-day functions of determining whether or not individual securities are liquid for purposes of the limitations on investments in illiquid assets. Rule 144A securities and Section 4(a)(2) commercial paper will be considered illiquid and therefore subject to the Fund’s limit on the purchase of illiquid securities unless the Board of Trustees or the Sub-Adviser determines that the Rule 144A securities or Section 4(a)(2) commercial paper are liquid. In determining the liquidity of a security, the Sub-Adviser will consider, among other things, the following factors: (i) the frequency of trades and quotes for the security; (ii) the number of dealers and other potential purchasers wishing to purchase or sell the security; (iii) dealer undertakings to make a market in the security; and (iv) the nature of the security and of the marketplace trades (e.g., the time needed to dispose of the security, the method of soliciting offers, the mechanics of transfer and whether a security is listed on an electronic for trading the security).

Preferred Stock. The Fund may invest in preferred stock. Preferred stock represents an equity interest in a company that generally entitles the holder to receive, in preference to the holders of other stocks such as common stocks, dividends and a fixed share of the proceeds resulting from a liquidation of the company. Some preferred stocks also entitle their holders to receive additional liquidation proceeds on the same basis as holders of a company’s common stock, and thus also represent an ownership interest in that company.

Preferred stocks may pay fixed or adjustable rates of return. Preferred stock is subject to issuer-specific and market risks applicable generally to equity securities. In addition, a company’s preferred stock generally pays dividends only after the company makes required payments to holders of its bonds and other debt. For this reason, the value of preferred stock will usually react more strongly than bonds and other debt to actual or perceived changes in the company’s financial condition or prospects. Preferred stock of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies.

Asset-Backed Securities. The Fund may invest in securities issued by trusts and special purpose corporations with principal and interest payouts backed by, or supported by, any of various types of assets. These assets typically include receivables related to the purchase of automobiles, credit card loans, and home equity loans. These securities generally take the form of a structured type of security, including pass-through, pay-through, and stripped interest payout structures similar to the collateralized mortgage obligation structure. Investments in these and other types of asset-backed securities must be consistent with the investment objective and policies of the Fund.

Asset-backed securities are often backed by a pool of assets representing the obligations of a number of different parties and use similar credit enhancement techniques. The cash flow generated by the underlying assets is applied to make required payments on the securities and to pay related administrative expenses. The amount of residual cash flow resulting from a particular issue of asset-backed securities depends on, among other things, the characteristics of the underlying assets, the coupon rates on the securities, prevailing interest rates, the amount of administrative expenses and the actual prepayment experience on the underlying assets.

Debt Securities. The Fund may invest in U.S. dollar or foreign currency-denominated corporate debt securities (corporate bonds, debentures, notes and other similar corporate debt instruments, including convertible securities) of domestic or foreign issuers. The rate of interest on a corporate debt security may be fixed, floating or variable, and may vary inversely with respect to a reference rate. The rate of return or return of principal on some debt obligations may be linked or indexed to the level of exchange rates between the U.S. dollar and a foreign currency or currencies. Debt securities may be acquired with warrants attached.

 

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Subject to certain limitations, the Fund may invest in both investment grade and non-investment grade debt securities. Investment grade debt securities have received a rating from S&P or Moody’s in one of the four highest rating categories or, if not rated, have been determined by the Sub-Adviser to be of comparable quality to such rated securities. Non-investment grade debt securities (typically called “junk bonds”) have received a rating from S&P or Moody’s of below investment grade, or have been given no rating and are determined by the Sub-Adviser to be of a quality below investment grade. There are no limitations on the maturity of debt securities that may be purchased by the Fund. A description of bond ratings is attached to this SAI as Appendix A.

RISK CONSIDERATIONS

The following risk considerations relate to investment practices that may be undertaken by the Fund and supplement the principal risks described in the Prospectus. Generally, since shares of the Fund represent an investment in securities with fluctuating market prices, shareholders should understand that the value of their Fund shares will vary as the value of the Fund’s portfolio securities increases or decreases. Therefore, the value of an investment in the Fund could go down as well as up. You can lose money by investing in the Fund. There is no guarantee of successful performance, that the Fund’s objective can be achieved or that an investment in the Fund will achieve a positive return. The Fund should be considered as a means of diversifying an investment portfolio and is not in itself a balanced investment program.

Prospective investors should consider the following risks.

General

Various market risks can affect the price or liquidity of an issuer’s securities. Adverse events occurring with respect to an issuer’s performance or financial position can depress the value of the issuer’s securities. The liquidity in a market for a particular security will affect its value and may be affected by factors relating to the issuer, as well as the depth of the market for that security. Other market risks that can affect value include a market’s current attitudes about type of security, market reactions to political or economic events, and tax and regulatory effects (including lack of adequate regulations for a market or particular type of instrument). Market restrictions on trading volume can also affect price and liquidity.

Certain risks exist because of the composition and investment horizon of a particular portfolio of securities. Prices of many securities tend to be more volatile in the short-term and lack of diversification in a portfolio can also increase volatility.

Counterparty Credit Risk

Derivative instruments are subject to the risk that the counterparty to the instrument might not pay interest when due or repay principal at maturity of the obligation. If a counterparty defaults on its interest or principal payment obligations to the Fund, this default will cause the value of your investment in the Fund to decrease. To the extent the Fund focuses its investments in a limited number of issuers, it will be more susceptible to the risks associated with those issuers. Certain derivative transactions may or are required to centrally clear, which may reduce counterparty and liquidity risk but will not completely eliminate such risks.

Debt Securities Risk

Debt securities are subject to various risks. The two primary (but not exclusive) risks affecting fixed income instruments are “credit risk” and “interest rate risk.” These risks can affect a security’s price volatility to varying degrees, depending upon the nature of the instrument. In addition, the depth and liquidity of the market for an individual or class of fixed income security can also affect its price and, hence, the market value of the Fund.

“Credit risk” refers to the likelihood that an issuer will default in the payment of principal and/or interest on an instrument. Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, lack of or inadequacy of collateral or credit enhancements for a fixed income security may affect its credit risk. Credit risk of a security may change over its life and securities which are rated by rating agencies are often reviewed and may be subject to downgrade.

“Interest rate risk” refers to the risks associated with market changes in interest rates. Interest rate changes may affect the value of a fixed income security directly (especially in the case of fixed rate securities) and directly (especially in the case of adjustable rate securities). In general, rises in interest rates will negatively impact the price of fixed rate securities and falling interest rates will have a positive effect on price. The degree to which a security’s price will change as a result of changes in interest rates is measured by its “duration.” For example, the price of a bond with a 5 year duration would be expected under normal market conditions to decrease 5% for every 1% increase in interest rates. Generally, securities with longer maturities have a greater duration and thus are subject to greater price volatility from changes in interest rates. Adjustable rate instruments also react to interest rate changes in a similar manner although generally to a lesser degree (depending, however, on the characteristics of the re-set terms, including the index chosen, frequency of reset and reset caps or floors, among other things).

 

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Exchange Traded Funds Risk

ETFs are investment companies that invest in a portfolio of securities designed to track a particular market segment or index and whose shares are bought and sold on a securities exchange. The risk of ETFs generally reflects the risk of owning shares of the underlying securities the ETF is designed to track, although lack of liquidity in an ETF could result in its value being more volatile than the underlying portfolio of securities. In addition, an ETF’s performance may not match the performance of a particular market segment or index for a number of reasons, including costs incurred by the ETF in buying and selling securities. Assets invested in ETFs will indirectly bear the fees and expenses of the ETF, including operating costs and advisory fees that you, as a shareholder in the Fund, indirectly bear. Additionally, a shareholder may indirectly bear brokerage costs incurred by the Fund when it purchases ETFs.

Foreign Currency Risk

Because a decline in the value of foreign currencies relative to the U.S. dollar may affect the finances of a foreign issuer, which could affect the value of that issuer’s U.S.-listed, U.S. dollar-denominated securities held by the Fund, the value of the net assets of the Fund may be affected unfavorably by changes in exchange rates.

Foreign Securities Risk

Typically, the Fund only invests in a non-U.S. issuer via shares of that issuer listed on a U.S. stock exchange. Investment in foreign issuers involves special risks in addition to the usual risks inherent in domestic investments. These include: political or economic instability; the unpredictability of international trade patterns; the possibility of foreign governmental actions such as expropriation, nationalization or confiscatory taxation; and fluctuations in currency exchange rates. The recent global economic crisis brought several small economies in Europe to the brink of bankruptcy and many other economies into recession and weakened the banking and financial sectors of many European countries. These events have adversely affected the exchange rate of the euro and may continue to significantly affect every country in Europe, including countries that do not use the euro. If a deep economic downturn in a particular country or throughout the Europe results, this could significantly affect the Fund’s investments tied economically to Europe or the euro.

Investing in Other Investment Companies Risk

The Fund may acquire shares in other investment companies, including U.S. or foreign investment companies and ETFs and Real Estate Investment Trusts (“REITs”), to the extent permitted by the 1940 Act. An investment in the shares of another fund is subject to the risks associated with that fund’s portfolio securities. The market value of the shares of other investment companies may differ from the net asset value of the particular fund. As a shareholder in an investment company, the Fund would bear its ratable share of that entity’s expenses, including any investment advisory and administration fees. At the same time, the Fund would continue to pay its own investment advisory fees and other expenses. As a result, the Fund and its shareholders, in effect, will be absorbing duplicate levels of fees with respect to investments in other investment companies.

Options Transactions Risk

The effective use of options depends on the Fund’s ability to terminate option positions at times when the Sub-Adviser deems it desirable to do so. Prior to exercise or expiration, an option position can only be terminated by entering into a closing purchase or sale transaction. If a covered call option writer is unable to effect a closing purchase transaction or to purchase an offsetting OTC Option, it cannot sell the underlying security until the option expires or the option is exercised. Accordingly, a covered call option writer may not be able to sell an underlying security at a time when it might otherwise be advantageous to do so. A secured put option writer who is unable to effect a closing purchase transaction or to purchase an offsetting OTC Option would continue to bear the risk of decline in the market price of the underlying security until the option expires or is exercised.

In addition, a secured put writer would be unable to utilize the amount held in cash or U.S. government securities or other high grade short-term obligations as security for the put option for other investment purposes until the exercise or expiration of the option.

The Fund’s ability to close out its position as a writer of an option is dependent upon the existence of a liquid secondary market. There is no assurance that such a market will exist, particularly in the case of OTC Options, as such options will generally only be closed out by entering into a closing purchase transaction with the purchasing dealer. However, the Fund may be able to purchase an offsetting option which does not close out its position as a writer but constitutes an asset of equal value to the obligation under the option written. If the Fund is not able to either enter into a closing purchase transaction or purchase an offsetting position, it will be required to maintain the securities subject to the call, or the collateral underlying the put, even though it might not be advantageous to do so, until a closing transaction can be entered into (or the option is exercised or expires).

Among the possible reasons for the absence of a liquid secondary market on an exchange are: (a) insufficient trading interest in certain options; (b) restrictions on transactions imposed by an exchange; (c) trading halts, suspensions or other restrictions imposed with respect to particular classes or series of options or underlying securities; (d) interruption of the normal operations on an exchange; (e)

 

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inadequacy of the facilities of an exchange or the OCC or other relevant clearing corporation to handle current trading volume; or (f) a decision by one or more exchanges to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although outstanding options on that exchange that had been issued by the relevant clearing corporation as a result of trades on that exchange would generally continue to be exercisable in accordance with their terms.

In the event of the bankruptcy of a broker through which the Fund engages in transactions in options, the Fund could experience delays and/or losses in liquidating open positions purchased or sold through the broker and/or incur a loss of all or part of its margin deposits with the broker. Similarly, in the event of the bankruptcy of the writer of an OTC Option purchased by the Fund, the Fund could experience a loss of all or part of the value of the option. Transactions are entered into by the Fund only with brokers or financial institutions deemed creditworthy by the Fund’s management.

Each of the exchanges has established limitations governing the maximum number of options on the same underlying security or futures contract (whether or not covered) which may be written by a single investor, whether acting alone or in concert with others (regardless of whether such options are written on the same or different exchanges or are held or written on one or more accounts or through one or more brokers). An exchange may order the liquidation of positions found to be in violation of these limits and it may impose other sanctions or restrictions. These position limits may restrict the number of listed options which the Fund may write.

The hours of trading for options may not conform to the hours during which the underlying securities are traded. To the extent that the option markets close before the markets for the underlying securities, significant price and rate movements can take place in the underlying markets that cannot be reflected in the option markets.

Ratings Categories Risk

A description of the rating categories as published by Moody’s and S&P is set forth in Appendix A to this Statement of Additional Information (“SAI”). Ratings assigned by Moody’s and/or S&P to securities acquired by the Fund reflect only the views of those agencies as to the quality of the securities they have undertaken to rate. It should be emphasized, however, that ratings are relative and subjective and are not absolute standards of quality. There is no assurance that a rating assigned initially will not change. The Fund may retain a security whose rating has changed or has become unrated.

Risk of Large Shareholder Redemptions

Certain account holders may from time to time own (beneficially or of record) or control a significant percentage of the Fund’s shares. Redemptions by these account holders of their shares in the Fund may impact the Fund’s liquidity and net asset value. These redemptions may also force the Fund to sell securities, which may negatively impact the Fund’s brokerage and tax costs.

REITs Risk

REITs’ share prices may decline because of adverse developments affecting the real estate industry including changes in interest rates. The returns from REITs may trail returns from the overall market. REITs are subject to a highly technical and complex set of provisions in the IRC. It is possible that the Fund may invest in a real estate company which purports to be a REIT but which fails to qualify as a REIT. In the event of any such unexpected failure to qualify as a REIT, the purported REIT would be subject to corporate level taxation, significantly reducing the return to the Fund on their investment in such company.

Investments in REIT equity securities may require the Fund to accrue and distribute income not yet received. In order to generate sufficient cash to make the requisite distributions, the Fund may be required to sell securities in its portfolio (including when it is not advantageous to do so) that it otherwise would have continued to hold. The Fund’s investments in REIT equity securities may at other times result in the Fund’s receipt of cash in excess of the REIT’s earnings; if the Fund distributes such amounts, such distribution could constitute a return of capital to Fund shareholders for federal income tax purposes. Dividends received by the Fund from a REIT generally will not constitute qualified dividend income.

REITs often do not provide complete tax information to shareholders until after the calendar year-end. Consequently, because of the delay, it may be necessary for the Fund to request permission to extend the deadline for issuance of Forms 1099-DIV.

Repurchase Agreements Risk

In the event of a default or bankruptcy by a selling financial institution under a repurchase agreement, the Fund will seek to sell the underlying security serving as collateral. However, this could involve certain costs or delays, and, to the extent that proceeds from any sale were less than the repurchase price, the Fund could suffer a loss. The Fund follows procedures designed to minimize the risks associated with repurchase agreements, including effecting repurchase transactions only with large, well-capitalized and well-established financial institutions and specifying the required value of the collateral underlying the agreement.

 

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Restricted Securities Risk

The Fund may acquire securities through private placements. These securities are typically sold directly to a small number of investors, usually institutions or mutual funds. Unlike public offerings, such securities are not registered under the federal securities laws. Although certain of these securities may be readily sold, others may be illiquid, and their sale may involve substantial delays and additional costs.

In addition, the Fund may also invest in securities sold pursuant to Rule 144A under the Securities Act. Rule 144A permits the Fund to sell restricted securities to qualified institutional buyers without limitation. However, investing in Rule 144A securities could have the effect of increasing the level of the Fund’s illiquidity to the extent the Fund, at a particular point in time, may be unable to find qualified institutional buyers interested in purchasing such securities.

Restricted securities, including private placements, are subject to legal and contractual restrictions on resale. This may have an adverse effect on their marketability, and may prevent the Fund from disposing of them promptly at reasonable prices. The Fund may have to bear the expense of registering such securities for resale and the risk of substantial delays in effecting such registration.

The Sub-Adviser, pursuant to procedures adopted by the Board of Trustees, will make a determination as to the liquidity of each private placement or restricted security purchased by the Fund. If such security is determined to be “liquid,” it will not be included within the category “illiquid securities,” which under the Fund’s current policies may not exceed 15% of the Fund’s net assets. To the extent the Fund owns private placements or restricted securities, these securities may involve liquidity and valuation difficulties. At times of less liquidity, it may be more difficult to value these securities because this valuation may require more research and elements of judgment may play a greater role in the valuation since there is less reliable, objective data available. Securities that are not readily marketable will be valued by the Fund pursuant to procedures adopted by the Board of Trustees.

Stock Market Risk

The Fund is subject to stock market risks and significant fluctuations in value. If the stock market declines in value, the Fund’s share price is likely to decline in value. The Fund’s focus on certain types of stocks (such as medium or large cap) and style of investing (such as value) subjects it to the risk that is performance may be lower than that of other types of equity funds that focus on other types of stocks or that have a broader investment style (such as general market).

Equity-Linked Securities Risk

The Fund may invest in equity-linked securities, including, but not limited to, participation notes, certificates, and equity swaps. Equity-linked securities are privately issued securities whose investment results are designed to correspond generally to the performance of a specified stock index or “basket” of stocks, or a single stock. To the extent that the Fund invests in equity-linked securities whose return corresponds to the performance of a foreign security index or one or more foreign stocks, investing in equity-linked securities will involve risks similar to the risks of investing in foreign securities and subject to the Fund’s restrictions on investments in foreign securities. See “Foreign Securities Risk” above. In addition, the Fund bears the risk that the counterparty of an equity-linked security may default on its obligations under the security. If the underlying security is determined to be illiquid, the equity-linked security would also be considered illiquid and thus subject to the Fund’s restrictions on investments in illiquid securities.

Risks Associated With Asset-Backed Securities

Certain asset-backed securities do not have the benefit of the same security interest in the related collateral as do mortgage-backed securities. Credit card receivables are generally unsecured, and the debtors are entitled to the protection of a number of state and federal consumer credit laws, many of which give such debtors the right to set off certain amounts owned on the credit cards, thereby reducing the balance due. In addition, some issuers of automobile receivables permit the servicers to retain possession of the underlying obligations. If the servicer were to sell these obligations to another party, there is a risk that the purchaser would acquire an interest superior to that of the holders of the related automobile receivables.

Risks Associated with Initial Public Offerings

The Fund may invest a portion of its assets in shares sold in initial public officers (“IPOs”). IPOs may have a magnified impact on the performance of the Fund with a small asset base. The impact of IPOs on the Fund’s performance likely will decrease as the Fund’s asset size increases, which could reduce the Fund’s returns. IPOs may not be consistently available to the Fund for investing. IPO shares

 

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frequently are volatile in price due to the absence of a prior public market, the small number of shares available for trading and limited information about the issuer. Therefore, the Fund may hold IPO shares for a very short period of time. This may increase the turnover of the Fund and may lead to increased expenses for the Fund, such as commissions and transaction costs. In addition, IPO shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.

Temporary Defensive Positions

The Adviser may temporarily invest up to 100% of the Fund’s assets in high quality short-term money market instruments if it believes adverse market, economic, political, or other conditions, such as excessive volatility or sharp market declines, justify taking a defensive investment posture. If the Fund attempts to limit investment risk by temporarily taking a defensive investment position, it may be unable to pursue its investment objective during that time, and it may miss out on some or all of an upswing in the securities markets.

PORTFOLIO TURNOVER

The Fund’s portfolio turnover rate is, in summary, the percentage computed by dividing the lesser of the Fund’s purchases or sales of securities (excluding short-term securities) by the average market value of the Fund. The Adviser intends to manage the Fund’s assets by buying and selling securities to help attain its investment objective. This may result in increases or decreases in the Fund’s current income available for distribution to its shareholders. While the Fund is not managed with the intent of generating short-term capital gains, the Fund may dispose of investments (including money market instruments) regardless of the holding period if, in the opinion of the Adviser, an issuer’s creditworthiness or perceived changes in a company’s growth prospects or asset value make selling them advisable. Such an investment decision may result in capital gains or losses and could result in a high portfolio turnover rate during a given period, resulting in increased transaction costs related to equity securities. Disposing of debt securities in these circumstances should not increase direct transaction costs since debt securities are normally traded on a principal basis without brokerage commissions. However, such transactions do involve a mark-up or markdown of the price.

The portfolio turnover rate of the Fund cannot be accurately predicted. Nevertheless, the annual portfolio turnover rate of the Fund is generally not expected to exceed 100%. A 100% portfolio turnover rate would occur, for example, if all the securities in the Fund’s investment portfolio were replaced once in a period of one year. Variations in turnover rate may be due to market conditions, fluctuating volume of shareholder purchases and redemptions or changes in the Adviser’s investment outlook. Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, there is no annual portfolio turnover rate information available for the Fund.

BROKERAGE ALLOCATION AND OTHER PRACTICES

The Advisers are responsible for the placement of the Fund’s portfolio transactions and the negotiation of prices and commissions, if any, with respect to such transactions. Debt, convertible and unlisted equity securities are generally purchased from a primary market maker acting as principal on a net basis without a stated commission but at prices generally reflecting a dealer spread. Listed equity securities are normally purchased through brokers in transactions executed on securities exchanges involving negotiated commissions. Debt, convertible and equity securities are also purchased in underwritten offerings at fixed prices which include discounts to underwriters and/or concessions to dealers. In placing a portfolio transaction, the Advisers seek to obtain the best execution for the Fund, taking into account such factors as price (including the applicable dealer spread or commission, if any), size of order, difficulty of execution and operational facilities of the firm involved and the firm’s risk in positioning a block of securities.

Consistent with a policy of securing best execution, in selecting broker-dealers and negotiating any commissions or prices involved in Fund transactions, the Advisers consider the range and quality of the professional services provided by such firms. Brokerage services include the ability to most effectively execute large orders without adversely impacting markets and positioning securities in order to enable the Advisers to effect orderly purchases or sales for the Fund. Accordingly, transactions will not always be executed at the lowest available commission. In addition, the Advisers may effect transactions which cause the Fund to pay a commission in excess of a commission which another broker-dealer would have charged if the Advisers first determine that such commission is reasonable in relation to the value of the brokerage and research services provided by the broker-dealer. In some cases, research is provided directly by an executing broker-dealer and in other cases, research may be provided by third party research providers such as a non-executing third party broker-dealer or other third party research service. Research services furnished by an executing broker-dealer or third party research provider may be used in providing services for any or all of the clients of the Advisers, as well as clients of affiliated companies, and may be used in connection with accounts other than those which pay commissions to the broker-dealers providing the research services. These arrangements are commonly known as “soft dollar” arrangements. In conducting soft dollar relationships, the Advisers will seek to take advantage of the safe harbor provided by Section 28(e) of the Securities Exchange Act of 1934, as amended.

 

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The Advisers maintain internal allocation procedures to identify those direct research providers who provide them with research services and endeavor to place sufficient transactions with them to ensure the continued receipt of research services the Advisers believe are useful. The Advisers’ procedures also seek to compensate third party research providers that provide them with research by directing executing broker-dealers to cause payments to be made to third party research providers, either through cash payments from the executing broker or through the use of step out transactions. A “step out transaction” is a securities trade executed by the executing broker-dealer, but settled by the non-executing research broker-dealer permitting the non-executing research broker-dealer to share in the commission. The Advisers have implemented systems for the determination of the broker-dealers to whom commissions are directed.

Research services include such items as reports on industries and companies, economic analyses, review of business conditions and portfolio strategy, analytic computer software, account performance services and various trading and/or quotation equipment. They also include advice from broker-dealers as to the value of securities and availability of securities, availability of buyers, and availability of sellers. In addition, they include recommendations as to purchase and sale of individual securities and timing of transactions. Sometimes the Advisers receive products or services from broker-dealers that are used for both research services and other purposes, such as corporate administration or marketing (“mixed-use products or services”). The Advisers make a good faith effort to determine the relative proportions of mixed-use products or services that may be attributable to research services. The portion attributable to research services may be paid through the allocation of brokerage commissions, and the Advisers pay the non-research services in cash.

Debt and convertible securities are generally purchased from the issuer or a primary market maker acting as principal on a net basis with no brokerage commission paid by the client. Such securities, as well as equity securities, may also be purchased from underwriters at prices which include underwriting fees.

In an effort to achieve efficiencies in execution and reduce trading costs, the Advisers and their affiliates frequently (though not always) execute securities transactions on behalf of a number of accounts, which may include the Fund, at the same time, generally referred to as “block trades.” When executing block trades, securities are allocated using procedures that an Adviser considers fair and equitable. Allocation guidelines have been established for the Advisers’ trading departments to follow in making allocation determinations. In some cases, various forms of pro-rata allocation are used and, in other cases, random allocation processes are used. Participation of an account in the allocation is based on considerations such as lot size, account size, diversification requirements and investment objectives, restrictions, time horizon, availability of cash, existing or targeted account weightings in particular securities, the amount of existing holdings (or substitutes) of the security in the account, and, when relevant, directed brokerage. In connection with certain purchase or sale programs, and in other circumstances if practicable, if multiple trades for a specific security are made with the same broker in a single day, those securities are allocated to accounts based on a weighted average purchase or sale price.

In determining whether accounts are eligible to participate in any type of IPO, the Advisers consider such factors as lot size, account size, diversification requirements and investment objectives, restrictions, time horizon, availability of cash, existing or targeted account weightings in particular securities, and the amount of existing holdings (or substitutes) of the security in the account. For IPOs of equities, the Advisers generally share allocations in a pro rata fashion based upon assets under management for those accounts eligible to participate in the IPO. For equity offerings, an exception may be made when the allocation is so small that it may create transaction costs that diminish the benefit of the trade or it would be unreasonably minimal relative to the size of the account. The Advisers will use their best judgment to make a fair and equitable allocation, which may include, among other things, consideration of allocating to underperforming accounts or accounts where smaller lot sizes would be reasonable.

To the extent permitted by law and in accordance with procedures established by the Board of Trustees, the Fund may engage in brokerage transactions with brokers that are affiliates of the Advisers. The Fund has adopted procedures which are reasonably designed to provide that commissions or other remuneration paid to affiliated brokers of the Advisers do not exceed the usual and customary brokerage commission.

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, the Fund has not incurred any brokerage commission as of the date of this SAI.

INVESTMENT RESTRICTIONS

The investment restrictions numbered 1 through 6 below have been adopted as fundamental policies. A fundamental policy affecting the Fund may not be changed without the vote of a majority of the outstanding voting securities of the Fund. A majority of the outstanding voting securities of the Fund means the lesser of (a) 67% or more of the voting securities present at a meeting of shareholders, if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy, or (b) more than 50% of the outstanding voting securities of the Fund. Investment restriction 7 may be changed by vote of a majority of the Board of Trustees at any time.

 

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1. The Fund may not borrow money or issue any senior security except as permitted under, or to the extent not prohibited by, the 1940 Act, and rules thereunder, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

2. The Fund may not underwrite securities of other companies, except insofar as the Fund may be deemed to be an underwriter for purposes of the Securities Act by virtue of disposing of portfolio securities.

3. The Fund may not purchase any securities that would cause 25% or more of the value of the Fund’s total assets at the time of purchase to be invested in the securities of any one particular industry or group of industries, provided that this limitation shall not apply to the Fund’s purchase of U.S. Government Securities.

4. The Fund may not purchase or sell real estate unless acquired as a result of ownership of securities or other instruments, although it may (i) purchase or sell securities or instruments secured by real estate or interests therein or representing interests in real estate, (ii) make, purchase or sell real estate mortgage loans, or (iii) purchase or sell securities or instruments issued by issuers which invest, deal or otherwise engage in real estate or interests therein.

5. The Fund may not make loans except as permitted under, or to the extent not prohibited by, the 1940 Act, and rules thereunder, and as interpreted, modified, or otherwise permitted by regulatory authority having jurisdiction, from time to time.

6. The Fund may invest in commodities only as permitted by the 1940 Act or other governing statute, by the rules thereunder, or by the SEC or other regulatory agency with authority over the Fund. This restriction shall not prohibit the Fund from purchasing or selling securities or other instruments backed by commodities or from purchasing, selling or entering into futures contracts, options on futures contracts, foreign currency forward contracts, foreign currency options, interest rate or securities-related or foreign currency-related hedging instruments, swap agreements or other derivative instruments, subject to compliance with any applicable provisions of the federal securities or commodities laws.

7. The Fund may not purchase securities on margin, except for use of short-term credit necessary for clearance of purchases and sales of portfolio securities, but it may make margin deposits in connection with covered transactions in options, futures and options on futures. For purposes of this restriction, the posting of margin deposits or other forms of collateral in connection with swap agreements is not considered purchasing securities on margin.

Unless otherwise indicated, all percentage limitations listed above apply to the Fund only at the time at which a transaction is entered into. Accordingly, except with respect to borrowing or hypothecating assets of the Fund, if a percentage restriction is adhered to at the time of investment, a later increase or decrease in the percentage which results from a relative change in values or from a change in the Fund’s net assets will not be considered a violation.

For purposes of applying the terms of investment restriction number 3, the Adviser will, on behalf of the Fund, make reasonable determinations as to the appropriate industry classification to assign to each issuer of securities in which the Fund invests. As a general matter, an “industry” is considered to be a group of companies whose principal activities, products or services offered give them a similar economic risk profile vis à vis issuers active in other sectors of the economy. The definition of what constitutes a particular “industry” is therefore an evolving one, particularly for issuers in industries or sectors within industries that are new or are undergoing rapid development. Some issuers could reasonably fall within more than one industry category. For example, some companies that sell goods over the internet (including issuers of securities in which the Fund may invest) were initially classified as internet companies, but over time have evolved into the economic risk profiles of retail companies. The Adviser will use its best efforts to assign each issuer to the category which it believes is most appropriate. Additionally, the Fund interprets its policy with respect to concentration in a particular industry to apply to direct investments in the securities of issuers in a particular industry, as determined by the Adviser. The Fund takes the position that mortgage-backed securities and asset-backed securities, whether government-issued or privately issued, do not represent interests in any particular “industry,” and therefore the 25% concentration restriction noted above does not apply to such securities.

Fund Classification

The Fund is a “diversified” investment company under the 1940 Act. This means that, with respect to 75% of the Fund’s total assets, the Fund may not invest in securities of any issuer if, immediately after such investment, (i) more than 5% of the total assets of the Fund (taken at current value) would be invested in the securities of that issuer or (ii) more than 10% of the outstanding voting securities of the issuer would be held by the Fund (this limitation does not apply to investments in U.S. government securities). A Fund is not subject to this limitation with respect to the remaining 25% of its total assets.

 

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Under the IRC, to qualify as a regulated investment company, a fund must meet certain diversification requirements as determined at the close of each quarter of each taxable year. For instance, no more than 25% of a fund’s assets can be invested in the securities of any one issuer other than U.S. Government securities and securities of other regulated investment companies, or of two or more issuers which the regulated investment company controls and which are engaged in the same, similar, or related trades or businesses. In addition, at least 50% of the market value of the fund’s assets must be represented by cash or cash items, U.S. government securities, securities of other regulated investment companies, and other securities limited in respect of any one issuer to a value not greater than 5% of the value of the fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer.

 

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TRUSTEES AND OFFICERS

Management Information

The Board of Trustees is responsible for overseeing the Trust’s affairs. The Board of Trustees currently consists of four Trustees, three of whom are not “interested persons” of the Trust (the “Independent Trustees”) and one of whom is an “interested person” of the Trust (the “Interested Trustee”), as defined in the 1940 Act. Detailed information about the Trustees and officers of the Trust, including their names, addresses, ages, and principal occupations for the last five years, is set forth in the table below. “Fund Complex” used in this SAI refers to the Trust (consisting of 1 portfolio), TCW Funds, Inc. (consisting of 22 portfolios), TCW Strategic Income Fund, Inc. (consisting of 1 portfolio), and Metropolitan West Funds (consisting of 9 portfolios).

 

Name, Address, Age and

Position(s) Held with

Fund(1)

   Term of Office and
Length of Time Served
  

Principal Occupation(s) During Past 5

Years(2)

  

Other

Directorships Held

by Trustee

 

Number of

Portfolios in

Fund Complex

Overseen by

Trustee

INDEPENDENT TRUSTEES

Patrick C. Haden (62)

Trustee

   Indefinite term;
since March 2015.
   Athletic Director (since August 2010), University of Southern California; General Partner (1987 – August 2010), Riordan, Lewis & Haden (private equity firm).    Tetra Tech, Inc. (environmental consulting); The Rose Hills Foundation (foundation).   33

Peter McMillan (57)

Trustee and Chairman of the Board

   Indefinite term;
since March 2015.
   Co-founder, Managing Partner and Chief Investment Officer (since May 2013), Temescal Canyon Partners (investment advisory firm); Co-founder and Executive Vice President (since 2005), KBS Capital Advisors (real estate investments); Co-founder and Managing Partner (since 2000), Willowbrook Capital Group, LLC (investment advisory firm).    KBS Real Estate Investment Trust III, Inc. (real estate investments); KBS Real Estate Investment Trust II, Inc. (real estate investments); KBS Real Estate Investment Trust, Inc. (real estate investments); KBS Strategic Opportunity REIT II, Inc. (real estate investments); KBS Strategic Opportunity REIT, Inc. (real estate investments).   33

Andrew Tarica (55)

Trustee

   Indefinite term;
since March 2015.
   Employee (since 2005), Concept Capital Markets, LLC (broker-dealer); Chief Executive Officer (since February 2011), Meadowbrook Capital Management (asset management company).    None.   33
INTERESTED TRUSTEE

Jess Ravich(3) (57)

Trustee

   Indefinite term;
since March 2015.
   Group Managing Director and Head of Alternative Products (since December 2012), The TCW Group, Inc. (asset management firm); Managing Director and Head of the Capital Markets Group (November 2009 — December 2012), Houlihan Lokey Howard & Zukin, Inc. (international investment bank); Founder and CEO (1991 — November 2009), Libra Securities LLC (investment banking firm); Executive Vice President, Fixed Income Department (1990 — 1991, Jefferies & Company, Inc. (investment banking firm); Senior Vice President (1985 — 1990), Drexel Burnham Lambert (investment banking firm).    Director (since December 2014), A-Mark International, Inc. (trading and collectibles); Director (since June 2006) and Chairman of Board of Trustees (since August 2006), ALJ Regional Holdings, Inc. (holding company for call center operations); Director (since May 1995) and Chairman of Board of Directors (since January 2011), Cherokee Inc.   1

 

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Name, Address, Age and

Position(s) Held with

Fund(1)

   Term of Office and
Length of Time Served
  

Principal Occupation(s) During Past 5

Years(2)

  

Other

Directorships Held

by Trustee

 

Number of

Portfolios in

Fund Complex

Overseen by

Trustee

OFFICERS OF THE TRUST WHO ARE NOT TRUSTEES

David S. DeVito (52)

President and Chief Executive Officer

   Indefinite term;
since March 2015.
   Executive Vice President and Chief Operating Officer (since October 2013), TCW Investment Management Company, The TCW Group, Inc., Trust Company of the West, Metropolitan West Asset Management, and TCW Asset Management Company; President and Chief Executive Officer (since January 2014), TCW Strategic Income Fund, Inc. and TCW Funds, Inc.; Executive Vice President and Chief Financial Officer (since 2010), Metropolitan West Funds.    N/A   N/A

Meredith S. Jackson (55)

Senior Vice President, General Counsel and Secretary

   Indefinite term;
since March 2015.
   Executive Vice President, General Counsel and Secretary (since February 2013), TCW Investment Management Company, The TCW Group Inc., Trust Company of the West, TCW Asset Management Company and Metropolitan West Asset Management; Senior Vice President, General Counsel and Secretary (since February 2013), TCW Strategic Income Fund, Inc., TCW Funds, Inc., and Metropolitan West Funds; Partner and Chair of the Debt Finance Practice Group (1999 – January 2013), Irell & Manella (law firm).    N/A   N/A

Jeffrey A. Engelsman (47)

Chief Compliance Officer

   Indefinite term;
since March 2015.
   Managing Director, Global Chief Compliance Officer (since August 2014), TCW Investment Management Company, The TCW Group Inc., Trust Company of the West and TCW Asset Management Company; Chief Compliance Officer (since September 2014), TCW Strategic Income Fund, Inc. and TCW Funds, Inc.; Chief Compliance Officer (2009 – August 2014), MainStay Funds (mutual fund); Managing Director (2009 – July 2014), New York Life Investments (investment management).    N/A   N/A

Patrick W. Dennis (33)

Vice President and Assistant Secretary

   Indefinite term;
since March 2015.
   Senior Vice President & Associate General Counsel (since January 2013), Trust Company of the West, TCW Asset Management Company, Metropolitan West Asset Management and TCW Investment Management Company; Assistant Secretary (since February 2013), TCW Funds, Inc.; Vice President and Assistant Secretary (since February 2013), Metropolitan West Funds; Associate (2010 – 2013), Paul Hastings LLP (law firm); Associate (2006 – 2010), Dechert LLP (law firm).    N/A   N/A

Richard M. Villa (50)

Treasurer

   Indefinite term;
since March 2015.
   Treasurer and Chief Financial Officer (since February 2014), TCW Funds, Inc.; Treasurer and Chief Financial Officer (since January 2014), TCW Strategic Income Fund, Inc.; Managing Director and Chief Financial Officer (since July 2008), TCW Investment Management Company, the TCW Group, Inc., Trust Company of the West, TCW Asset Management Company, and Metropolitan West Asset Management.    N/A   N/A

George N. Winn (46)

Vice President and Assistant Treasurer

   Indefinite term;
since March 2015.
   Senior Vice President (since June 1994), Trust Company of the West, TCW Asset Management Company, Metropolitan West Asset Management and TCW Investment Management Company.    N/A   N/A

 

(1)  The address of each Independent Trustee is c/o K&L Gates LLP, Counsel to the Independent Trustees of TCW Alternative Funds, Four Embarcadero Center, Suite 1200, San Francisco, CA 94111. The address of the Interested Trustee and each officer is c/o Trust Company of the West, 865 South Figueroa Street, Los Angeles, CA 90017.
(2)  Positions with The TCW Group, Inc. and its affiliates may have changed over time.
(3)  Mr. Ravich is an “interested person” of the Trust, as defined in the 1940 Act, because of the offices he holds with the parent company of the Adviser.

 

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Leadership Structure

The Board of Trustees is responsible for the overall management of the Trust, including general supervision of the duties performed by the Adviser and other service providers in accordance with the provisions of the 1940 Act, other applicable laws and the Trust’s Declaration of Trust and By-Laws. The Board of Trustees meets in regularly scheduled meetings throughout the year. It is currently composed of four Trustees, including three Independent Trustees. As discussed below, the Board of Trustees has established two committees to assist the Board of Trustees in performing its oversight responsibilities.

The Board of Trustees has appointed an Independent Trustee to serve as its Chairman. The Chairman’s primary role is to set the agenda of the Board of Trustees and determine what information is provided to the Board of Trustees with respect to matters to be acted upon by the Board of Trustees. The Chairman presides at all meetings of the Board of Trustees and leads the Board of Trustees through its various tasks. The Chairman also acts as a liaison with management in carrying out the Board of Trustees’ functions. The Chairman also performs such other functions as may be requested by the Board of Trustees from time to time. The designation of Chairman does not impose any duties, obligations or liabilities that are greater than the duties, obligations or liabilities imposed on such person as a member of the Board of Trustees generally.

Risk Oversight

Through its direct oversight role, and indirectly through its committees, the Board of Trustees performs a risk oversight function for the Trust consisting, among other things, of the following activities:

General Oversight. The Board of Trustees regularly meets with, or receives reports from, the officers of the Trust and representatives of key service providers to the Trust, including the Adviser, administrator, transfer agent, custodian and independent registered public accounting firm, to review and discuss the operational activities of the Trust and to provide direction with respect thereto.

Compliance Oversight. The Board of Trustees reviews and approves the procedures of the Trust established to ensure compliance with applicable federal securities laws. The Board of Trustees keeps informed about how the Trust’s operations conform to its compliance procedures through regular meetings with, and reports received from, the Trust’s Chief Compliance Officer and other officers.

Investment Oversight. The Board of Trustees monitors investment performance during the year through regular performance reports from management with references to appropriate performance measurement indices. The Board of Trustees also receives focused performance presentations on a regular basis, including special written reports and oral presentations by portfolio managers. In addition, the Board of Trustees monitors the Fund’s investment practices and reviews its investment strategies with management and receives focused presentations.

Valuation Oversight. The Board of Trustees has approved the valuation methodologies used in establishing the daily values of the Fund’s assets and monitors the accuracy with which the valuations are carried out. The Board of Trustees receives regular reports on the use of fair value prices and monitors the effectiveness of the Trust’s valuation procedures.

Financial Reporting. Through its Audit Committee, the Board of Trustees meets regularly with the Trust’s independent registered public accounting firm to discuss financial reporting matters, the adequacy of the Trust’s internal controls over financial reporting, and risks to accounting and financial reporting matters.

Committees

Audit Committee. The Audit Committee makes recommendations to the Board of Trustees concerning the selection of the independent auditors and reviews with the auditors the results of the annual audit, including the scope of auditing procedures, the adequacy of internal controls and compliance by the Trust with the accounting, recording and financial reporting requirements of the 1940 Act. The Audit Committee also reviews compliance with the Code of Ethics by the executive officers, directors and investment personnel of the Adviser. The Audit Committee consists of Messrs. Haden, McMillan, and Tarica, each an Independent Trustee. Mr. Haden serves as the Chairman of the Audit Committee.

Nominating Committee. The Nominating Committee makes recommendations to the Board of Trustees regarding nominations for membership on the Board of Trustees. It evaluates candidates’ qualifications for Board membership and, with respect to nominees for positions as Independent Trustees, their independence from the Adviser and other principal service providers of the Trust. The Nominating Committee periodically reviews Trustee compensation and recommends any appropriate changes to the Board. The Nominating Committee also reviews, and may make recommendations to the Board of Trustees relating thereto, issues that pertain to the

 

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effectiveness of the Board in carrying out its responsibilities of overseeing the management of the Trust. The Nominating Committee consists of Messrs. Haden, McMillan, and Tarica, each an Independent Trustee. Mr. Tarica serves as the Chairman of the Nominating Committee.

The Nominating Committee will consider potential Trustee candidates recommended by shareholders provided that the proposed candidates satisfy the Trustee qualification requirements provided in the Trust’s Nominating Committee Charter and are not “interested persons” of the Trust within the meaning of the 1940 Act. In determining procedures for the submission of potential candidates by shareholders and any eligibility requirements for such nominees and for the shareholders submitting the nominations, the Nominating Committee has looked to recent SEC promulgations regarding Trustee nominations for guidance.

None of the committees has held any meeting as of the date of this SAI.

Additional Information About the Trustees

The Trust seeks as Trustees individuals of distinction and experience in business or finance, government service or academia. In determining that a particular person was and continues to be qualified to serve as a Trustee, the Board of Trustees has considered a variety of criteria, none of which, in isolation, was controlling. Based on a review of the experience, qualifications, attributes or skills of each Trustee, including those described below, the Board has determined that each of the current Trustees is qualified to serve as a Trustee of the Trust. In addition, the Board of Trustees believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes and skills that allow the Board of Trustees to operate effectively in governing the Trust and protecting the interests of shareholders.

Patrick C. Haden. Mr. Haden has many years of experience as a partner at a private equity firm that invests in high growth, middle market enterprises. He also has extensive experience serving as a board member, including as a director and chairman of TCW Funds, Inc. and TCW Strategic Income Fund, Inc. and as a director of Metropolitan West Funds and Tetra Tech, Inc.

Peter McMillan. Mr. McMillan has many years of experience as an investment industry professional with extensive experience managing securities portfolios, and is very experienced with the analysis of investment strategy, trading, and performance results. He also has extensive experience serving as a board member, including as a director of Metropolitan West Funds, TCW Funds, Inc., TCW Strategic Income Fund, Inc., and various real estate investment trusts.

Andrew Tarica. Mr. Tarica has many years of experience in the investment management and investment advisory industry, including substantial experience managing fixed-income portfolios. He also has extensive experience serving as a board member, including as a director and chairman of Metropolitan West Funds, a director of TCW Funds, Inc., and a director of the TCW Strategic Income Fund, Inc.

Jess Ravich. Mr. Ravich has many years of experience with various investment banking firms and is Group Managing Director and Head of Alternative Products at the parent company of the Adviser. He also has extensive experience serving as a board member, including as a director and chairman of Cherokee Inc. and ALJ Regional Holdings, Inc. and as a director of Spectrum Group International, Inc.

Equity Ownership of Trustees

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, none of the Trustees or officers of the Trust owns any outstanding shares of the Fund as of the date of this SAI.

 

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The following tables set forth the equity ownership of the Trustees, as of December 31, 2014, in the Fund and in all registered investment companies overseen by the Trustees in the same family of investment companies as the Fund, which include TCW Funds, Inc. and TCW Strategic Income Fund, Inc. The codes for the dollar ranges of equity securities owned by the Trustees are: (a) $1-$10,000, (b) $10,001 -$50,000, (c) $50,001-$100,000; and (d) over $100,000.

 

Name of Trustee

   Dollar Range of Equity
Securities in the Fund
     Aggregate Dollar Range of Equity
Securities in All Registered Investment
Companies Overseen by Trustee in Family
of Investment Companies

INDEPENDENT TRUSTEES

Patrick C. Haden

     —         (d)

Peter McMillan

     —         (d)

Andrew Tarica

     —         (d)

INTERESTED TRUSTEE

Jess Ravich

     —         None

Compensation of Independent Trustees

The Trust pays each Independent Trustee an annual fee of $36,000. The Chairman of the Audit Committee receives an additional annual retainer of $7,200, the Chairman of the Nominating Committee receives an additional annual retainer of $3,600, and the Chairman of the Board receives an additional annual retainer of $10,800. Independent Trustees are also reimbursed for travel and other out-of-pocket expenses incurred by them in connection with attending meetings of the Board or a committee of the Board. Trustees and officers who are employed by the Adviser or an affiliated company thereof receive no compensation or expense reimbursement from the Trust. Trustees do not receive any pension or retirement benefits as a result of their service as a Trustee of the Trust.

The following table shows the estimated amounts of compensation to be paid to the Independent Trustees by the Trust for the fiscal year ending October 31, 2015, as well as the total compensation from the Trust and Fund Complex paid to the Trustees for the year ended October 31, 2014. As of the date of this SAI, the Independent Trustees have not yet received any compensation from the Trust.

 

Name of Trustee

   Aggregate Compensation
From the Trust
     Total Compensation from
the Trust and Fund
Complex(1) Paid to
Trustees
 
     Fiscal Year Ending
October 31, 2015
    

Year Ended

October 31, 2014

 

INDEPENDENT TRUSTEES

     

Patrick C. Haden

   $ 32,400       $ 147,500   

Peter McMillan

   $ 35,100       $ 128,000   

Andrew Tarica

   $ 29,700       $ 143,000   

INTERESTED TRUSTEE

     

Jess Ravich

   $ 0       $ 0   

 

(1)  As of the date hereof, the Fund Complex consists of 33 registered investment companies.

Retirement Policy

The Trust has not adopted a retirement policy for Trustees.

INVESTMENT ADVISORY SERVICES

Investment Adviser

The Adviser was organized in 1987 as a wholly-owned subsidiary of TCW. The Carlyle Group, LP (“Carlyle”), a global alternative asset manager, may be deemed to be a control person of the Adviser by reason of its control of certain investment funds that indirectly control more than 25% of the voting stock of TCW. Carlyle also controls various other pooled investment vehicles and, indirectly, many of the portfolio companies owned by those funds.

 

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The Trust, on behalf of the Fund, and the Adviser are parties to an Investment Management and Advisory Agreement (the “Advisory Agreement”). Under the Advisory Agreement, subject to the direction and supervision of the Board of Trustees, the Fund retains the Adviser, among other things, to manage the investment of its assets, including to evaluate the pertinent economic, statistical, financial and other data and to formulate and implement its investment program; to place orders for the purchase and sale of its portfolio securities and other instruments and investments; and to administer its day-to-day operations.

The Advisory Agreement also provides that the Adviser will furnish to the Trust office space at such places as may be agreed upon from time to time and all office facilities, business equipment, supplies, utilities and telephone services necessary for managing the affairs and investments; keep those accounts and records of the Trust and the Fund that are not maintained by the Trust’s transfer agent, custodian, accounting or sub-accounting agent; and arrange for officers or employees of the Adviser to serve, without compensation from the Trust, as officers, Trustees or employees of the Trust if desired and reasonably required by the Trust.

For services performed with respect to the Fund, the Trust pays the Adviser a fee, payable monthly and calculated daily by applying the annual investment advisory fee percent for the Fund to the Fund’s net asset value. The annual management fees (as a percentage of average net asset value) for the Fund are as follows:

 

TCW/Gargoyle Hedged Value Fund

     0.90

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, no management fee under the Advisory Agreement has been paid to the Adviser as of the date of this SAI.

Except for expenses specifically assumed by the Adviser under the Advisory Agreement, the Trust bears all expenses of the Trust and the Fund, including, without limitation, fees and expenses of the Independent Trustees, broker commissions and other ordinary or extraordinary expenses incurred by the Trust or the Fund in the course of its business.

Pursuant to the Operating Expenses Agreement between the Adviser and the Fund (the “Operating Expenses Agreement”), the Adviser has agreed to waive its investment management fee and/or reimburse the operating expenses of the Fund to the extent the Fund’s operating expenses (excluding taxes, interest, brokerage commissions, dividends on securities sold short, acquired fund fees and expenses, and extraordinary expenses) exceed, in the aggregate, the rate per annum, as set forth below.

 

Fund

   Expense Cap
(As Percent of Average
Net Asset Value)
 

TCW/Gargoyle Hedged Value Fund

  

Class N

     1.50

Class I

     1.25

This contractual fee waiver/expense reimbursement will remain in place through October 31, 2017. During this term, only the Board may terminate or modify the terms of the Operating Expenses Agreement. The Adviser may request recoupment of previously waived fees and paid expenses from the Fund for three years from the date they were waived or paid, subject to any applicable expense caps at the time of recoupment or at the time of waiver and/or reimbursement, whichever is lower.

The Advisory Agreement was approved by the Board of Trustees, and separately by the Independent Trustees, at an in-person meeting called for the purpose of voting on such approval on March 9, 2015. The Advisory Agreement will continue in effect as to the Fund initially for a term of up to two years and thereafter from year to year if such continuance is specifically approved at least annually by (a) the Board of Trustees or by the vote of a majority of the outstanding voting securities of the Fund, and (b) the vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement may be terminated without penalty at any time by the Trust (by the vote of a majority of the Board of Trustees or by the vote of a majority of the outstanding voting securities of the Fund) or by the Adviser upon 60 days’ written notice to the other party. The Advisory Agreement terminates automatically in the event of its assignment.

The Advisory Agreement also provides that none of the Adviser or any director, officer, agent or employee of the Adviser will be liable or responsible to the Trust or any of its shareholders for any error of judgment, mistake of law or any loss arising out of any investment, or for any other act or omission in the performance by such person or persons of their respective duties, except for liability resulting from willful misfeasance, bad faith, gross negligence, or reckless disregard of their respective duties. Under the Advisory Agreement, the Adviser will also be indemnified by the Trust as an agent of the Trust in accordance with the terms of the Trust’s By-Laws.

 

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Sub-Adviser

Pursuant to the Advisory Agreement, the Adviser may employ one or more sub-advisers as the Adviser may believe to be particularly fitted to assist the Adviser in the performance of the Advisory Agreement, provided that the compensation of any sub-adviser shall be paid by the Adviser. Currently, Gargoyle Investment Advisor L.L.C. serves as the Fund’s sub-adviser (the “Sub-Adviser” or “Gargoyle”), pursuant to the Investment Sub-Advisory Agreement between the Adviser and the Sub-Adviser (the “Sub-Advisory Agreement”).

The Sub-Adviser is a New York limited liability company formed in 1999. It is principally owned by Gargoyle Group Holdings L.L.C. and is controlled by Alan S. MacKenzie, Jr., Phillip S. Martin, Joshua B. Parker, and Alan L. Salzbank, who are principals of Gargoyle Group Holdings L.L.C.

Under the Sub-Advisory Agreement, subject to the overall supervision, direction, control and review of the Adviser, the Sub-Adviser has the full discretionary authority to manage the investment and reinvestment of the Fund’s assets, including the authority to purchase, sell and cover open positions and to generally deal in securities and other investments relating to the Fund.

The Adviser, not the Fund, is responsible for the payment of the sub-advisory fee to the Sub-Adviser. Under the Sub-Advisory Agreement, the Adviser pays to the Sub-Adviser as compensation for the services rendered thereunder for the Fund a fee at an annual rate (as a percentage of average net asset value) as follows:

 

TCW/Gargoyle Hedged Value Fund

  0.38 % - 0.70%* 

 

* Varies based on average net asset value and Fund and Adviser expenses.

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, no sub-advisory fee under the Sub-Advisory Agreement has been paid to the Sub-Adviser as of the date of this SAI.

The Adviser and the Trust intend to apply for, and expect to receive, an exemptive order from the SEC to operate under a manager of managers structure that, subject to certain conditions, permits the Adviser, with the approval of the Board, including a majority of the Independent Trustees, to appoint and replace sub-advisers, enter into sub-advisory agreements, and materially amend or terminate sub-advisory agreements on behalf of the Fund without shareholder approval. There is no guarantee that such exemptive order will be granted. The Sub-Advisory Agreement was approved by the Board of Trustees, and separately by the Independent Trustees, at an in-person meeting called for the purpose of voting on such approval on March 9, 2015. The Sub-Advisory Agreement will continue in effect as to the Fund initially for a term of up to two years and thereafter from year to year if such continuance is specifically approved at least annually by (a) the Board of Trustees or by the vote of a majority of the outstanding voting securities of the Fund, and (b) the vote of a majority of the Independent Trustees, cast in person at a meeting called for the purpose of voting on such approval. The Sub-Advisory Agreement may be terminated without penalty at any time by the Trust (by the vote of a majority of the Board of Trustees or by the vote of a majority of the outstanding voting securities of the Fund), upon 60 days’ written notice to the Adviser and the Sub-Adviser, or by the Adviser or the Sub-Adviser, upon 60 days’ written notice to the other party. The Sub-Advisory Agreement terminates automatically in the event of its assignment or in the event that the Advisory Agreement is terminated.

PORTFOLIO MANAGEMENT

Portfolio Manager Compensation

Gargoyle Investment Advisor L.L.C. Gargoyle seeks to maintain a compensation program that is competitively positioned to attract, retain and motivate top-quality investment professionals. Messrs. Parker and Salzbank are partners and substantial owners of Gargoyle, and thus receive compensation solely based on Gargoyle’s overall profitability.

Ownership of Securities and Other Managed Accounts

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, none of the Fund’s portfolio managers beneficially owns any outstanding shares of the Fund as of the date of this SAI.

 

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The table below sets forth certain information, as of December 31, 2014, regarding other accounts managed by the Fund’s portfolio managers, including the Fund. Total assets in the table are in millions.

 

                          Performance Fee Accounts  
     Registered
Investment

Companies
     Other Pooled
Investment
Vehicles
     Other Accounts      Registered
Investment

Companies
     Other Pooled
Investment
Vehicles
     Other Accounts  
     Number
of
Accounts
     Total
Assets
     Number
of
Accounts
     Total
Assets
     Number
of
Accounts
     Total
Assets
     Number
of
Accounts
     Total
Assets
     Number
of
Accounts
     Total
Assets
     Number
of
Accounts
     Total
Assets
 

Joshua B. Parker
(Sub-Adviser)

     1       $ 75.9         2       $ 187.5         2       $ 147.5         —           —           2       $ 187.5         —           —     

Alan L. Salzbank
(Sub-Adviser)

     1       $ 75.9         2       $ 187.5         2       $ 147.5         —           —           2       $ 187.5         —           —     

Conflicts

Actual or potential conflicts of interest may arise when a portfolio manager has management responsibilities to more than one account (including the Fund), such as devotion of unequal time and attention to the management of the accounts, inability to allocate limited investment opportunities across a broad band of accounts and incentive to allocate opportunities to an account where the portfolio manager, or the Advisers or their affiliates, has a greater financial incentive, such as a performance fee account, or where an account or fund managed by a portfolio manager has a higher fee sharing percentage than the portfolio manager’s fee sharing percentage with respect to the Fund. When accounts managed by the Advisers (including the Fund) invest in different parts of an issuer’s capital structure (e.g., one account owns equity securities of an issuer while another account owns debt obligations of the same issuer), actual or potential conflicts of interest may also arise with respect to decisions concerning the issuer’s financing, investments or risks, among other issues, as related to the interests of the accounts. The Advisers have adopted policies and procedures reasonably designed to address these types of conflicts, and the Advisers believe their policies and procedures serve to operate in a manner that is fair and equitable among their clients, including the Fund.

DISTRIBUTION OF FUND SHARES

TCW Funds Distributors (the “Distributor”) 865 South Figueroa Street, Los Angeles, CA 90017 serves as the non-exclusive distributor of each class of the Fund’s shares pursuant to a Distribution Agreement (“Distribution Agreement”) with the Trust, which is subject to the annual approval by the Board. Shares of the Fund are offered and sold on a continuous basis. The Distribution Agreement is terminable without penalty, on not less than 60 days’ notice, by the Board of Trustees, by vote of holders of a majority of the Trust’s shares, or by the Distributor. The Distributor receives no compensation from the Fund for distribution of the Fund’s shares except payments pursuant to the Trust’s Share Marketing Plan (Rule 12b-1 Plan) adopted pursuant to Rule 12b-1 under the 1940 Act (the “Distribution Plan”) as described below. The Distributor is affiliated with the Adviser.

The Fund offers two classes of shares: Institutional Class or Class I shares and Investor Class shares or Class N shares. Class I shares are offered primarily for direct investment by investors. Class N shares are offered through firms which are members of the Financial Industry Regulatory Authority (“FINRA”) and which have dealer agreements with the Distributor and other financial intermediaries.

Rule 18f-3 Plan

The Trust has adopted a Multiple Class Plan pursuant to Rule 18f-3 under the 1940 Act (the “Rule 18f-3 Plan”). Under the Rule 18f-3 Plan, shares of each class of the Fund represent an equal pro rata interest in the Fund and, generally, have identical voting, dividend, liquidation, and other rights, preferences, powers, restrictions, limitations, qualifications and terms and conditions, except that: (a) each class has a different designation; (b) each class of shares bears any class-specific expenses allocated to it; and (c) each class has exclusive voting rights on any matter submitted to shareholders that relates solely to its distribution or service arrangements, and each class has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class. In addition, each class may have a differing sales charge structure and differing exchange and conversion features.

Rule 12b-1 Plan

The Trust has adopted the Distribution Plan with respect to the Class N shares of the Fund. Under the terms of the Distribution Plan, the Fund compensates the Distributor at a rate equal to 0.25% of the average daily net assets of the Fund attributable to its Class N shares for distribution and related services, regardless of the distribution related expenses the Distributor incurs. Payments are made to firms that are members of FINRA and other financial intermediaries for distribution and related services. Under the terms of the Distribution Plan, services which such firms or other financial intermediaries provide may include, but are not limited to, the following: providing facilities to answer questions from prospective investors about the Fund; receiving and answering correspondence, including requests for prospectuses and statements of additional information; preparing, printing and delivering prospectuses and shareholder reports to prospective shareholders; complying with federal and state securities laws pertaining to the sale of Class N shares; and assisting investors in completing application forms and selecting dividend and other account options. Because these fees are paid out of the Fund’s assets on an ongoing basis, over time these fees will increase the cost of an investor’s investment and may cost such investor more than paying other sales charges. The Distribution Plan is intended to facilitate the sale of Class N shares.

 

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No interested person of the Fund or any Independent Trustee has any direct or indirect financial interest in the operation of the Distribution Plan except to the extent that the Distributor, the Adviser or certain of their employees may be deemed to have such an interest as a result of the benefits derived from the successful operation of the Distribution Plan. The Fund does not participate in any joint distribution activities with another investment company.

The Distribution Plan provides that it may not be amended to materially increase the costs which Class N shareholders may bear under the Distribution Plan without the approval of a majority of the outstanding voting securities of the Class N and by vote of a majority of both (i) the Board of Trustees, and (ii) the Independent Trustees who have no direct or indirect financial interest in the operation of the Distribution Plan or any agreements related to it, cast in person at a meeting called for the purpose of voting on the Distribution Plan and any related amendments.

The Distribution Plan was initially approved by the Board of Trustees on March 9, 2015 and provides that it shall continue in effect so long as such continuance is specifically approved at least annually by the vote of a majority of both (i) the Board of Trustees, and (ii) the Independent Trustees who have no direct or indirect financial interest in the operation of the Distribution Plan or any agreements related to it, cast in person at a meeting called for the purpose of voting on the Plan and any related amendments.

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, there is no 12b-1 expense information available for Class N shares of the Fund.

Other Shareholder Servicing Expenses Paid by the Fund

The TCW Fund is authorized to compensate broker-dealers and other third-party intermediaries in an amount between 0.06% and 0.16% of its average daily net assets, as approved by the TCW Board based on the TCW Fund’s asset levels, of the assets serviced for the TCW Fund by that intermediary for shareholder services. These services constitute sub-recordkeeping, sub-transfer agent or similar services and are similar in scope to services provided by the transfer agent to the Fund. These expenses paid by the Fund would remain subject to any overall expense limitation applicable to the Fund. These expenses are in addition to any supplemental amounts the Adviser pays out of its own resources and are in addition to the Fund’s payment of any amounts through the Distribution Plan. This amount may be adjusted, subject to approval by the Board of Trustees.

Payments by the Adviser

The Adviser or its affiliates may make payments out of their revenues to FINRA member firms in connection with the sale and distribution of the Fund’s shares or for services to the Fund and its shareholders. Such payments are in addition to any Distribution Plan amounts paid to such FINRA member firms. The payments are discussed in detail in the Prospectus under the title “Payments by the Adviser.”

The Adviser or its affiliates may also make payments to selling and shareholder servicing agents that are not FINRA member firms and that sell shares of or provide services to the Fund and its shareholders, such as banks, insurance companies and plan administrators. These firms may be affiliated with FINRA member firms.

OTHER SERVICE PROVIDERS

Administrator

BNY Mellon Investment Servicing (US) Inc., 760 Moore Road, King of Prussia, Pennsylvania 19406, serves as the administrator of the Trust (the “Administrator”) pursuant to a Fund Administration and Accounting Agreement between the Trust, on behalf of the Fund, and the Administrator (the “Administration Agreement”). Under the Administration Agreement, the Administrator will provide, among others, (i) valuation support and computation accounting services, including the calculation of net asset value and portfolio turnover rate of the Fund; (ii) financial reporting services, including the preparation of the Fund’s annual and semi-annual shareholder reports and its quarterly schedule of portfolio holdings; (iii) tax services, including the preparation of year-end tax provision and tax distribution analysis and of federal and state income tax and excise tax returns; (iv) fund administration services, including the monitoring of the Fund’s compliance with portfolio limitations and of the Fund’s status as a regulated investment company under Subchapter M of the IRC; and (v) regulatory administration services, including maintaining a regulatory calendar for the Fund listing various SEC filing and Board approval deadlines, assembling and distributing Board materials for quarterly meetings of the Board, attending quarterly Board meetings and drafting minutes thereof, and preparing and coordinating the filing of annual post-effective amendments to the Fund’s registration statement and Forms N-CSR, N-Q and N-PX. For the services provided under the Administration Agreement, the Administrator receives such compensation as is mutually agreed to in writing by the Fund and the Administrator from time to time. Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, no fees under the Administration Agreement have been paid to the Administrator as of the date of this SAI.

 

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Transfer Agent

BNY Mellon Investment Servicing (US) Inc., 4400 Computer Drive, Westborough, MA 01581-1722, also serves as transfer agent for the Trust.

Custodian

The Bank of New York Mellon, One Wall Street, New York, New York 10286, serves as custodian for the Trust (the “Custodian”) pursuant to a Custody Agreement between the Trust, on behalf of the Fund, and the Custodian (the “Custody Agreement”). Under the Custody Agreement, the Custodian, among other things, (i) maintains a separate account in the name of the Fund, (ii) holds and transfers portfolio securities on account of the Fund, (iii) makes distributors or transfer out of the account of the Fund, (iv) receives all eligible income and other payments due to the account of the Fund, and (v) makes available monthly account statements to the Fund. Pursuant to applicable rules, the Custodian also acts as the Fund’s foreign custody manager.

Independent Registered Public Accounting Firm

Deloitte & Touche LLP, 555 West 5th Street, Los Angeles, California 90013, serves as the independent registered public accounting firm of the Trust. Deloitte & Touche LLP provides audit services and assurance, tax return review, other tax consulting services and assistance, and consultation in connection with the review of various SEC filings.

Legal Counsel

Paul Hastings LLP, 55 Second Street, 24th Floor, San Francisco, CA 94105, serves as counsel to the Trust.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

Persons beneficially own, directly or through one or more controlled companies, more than 25% of the outstanding shares of the Fund may be deemed to “control” (as that term is defined in the 1940 Act) the Fund and may be able to affect or determine the outcome of matters presented for a vote of the shareholders of the Fund. A principal holder is a person who owns of record or beneficially 5% or more of any class of the Fund’s outstanding shares.

Because the Fund is newly formed and had not commenced operations prior to the date of this SAI, there are no principal holders or control persons of the Fund as of the date of this SAI.

As of the date of this SAI, the Trustees and officers of the Trust as a group owned less than 1% of the outstanding shares of any class of the Fund.

CODES OF ETHICS

The Trust is subject to a Code of Ethics under Rule 17j-1 under the 1940 Act, and the Adviser and the Distributor are subject to a joint Code of Ethics (together with the Code of Ethics of the Trust, the “Codes”) under Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Investment Advisers Act of 1940, as amended, with respect to certain investment transactions by persons subject to the Codes to avoid any actual or potential conflict of interest or abuse of any fiduciary position. The Codes permit personnel subject to the Codes to invest in securities, including securities that may be held by the Fund.

DISCLOSURE OF PORTFOLIO INFORMATION

The Board of Trustees has adopted policies and procedures regarding the disclosure of the Fund’s portfolio holdings. The Fund currently discloses its portfolio holdings as of the end of the second and fourth fiscal quarters in the semi-annual and annual reports to shareholders, and its portfolio holdings as of the end of the first and third quarters in quarterly reports on Form N-Q, which are available at www.sec.gov and www.tcw.com. The Fund or the Adviser may distribute non-specific information about the Fund and/or summary information about the Fund at any time. Such information will not identify any specific portfolio holding, but may reflect, among other things, the quality or character of the Fund’s holdings.

In addition, it is the policy of the Trust to provide certain unaudited information regarding the portfolio composition of the Fund as of month-end to shareholders and others upon request to the Fund, beginning on the 15th calendar day after the end of the month (or, if not a business day, the next business day thereafter). These complete holdings lists are not contained on the Trust’s website. The top ten holdings and other portfolio characteristics at month-end for the Fund may be found on the Trust’s website at www.tcw.com.

 

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Shareholders and others who wish to obtain portfolio holdings for a particular month may make a request by contacting the Fund between the hours of 6:00 a.m. and 4:00 p.m., Pacific time, Monday through Friday, toll free at (866) 858-4338 beginning on the 15th day following the end of that month (or, if not a business day, the next business day thereafter). Requests for portfolio holdings may be made on a monthly basis pursuant to this procedure or pursuant to standing requests.

Persons making requests will be asked to provide their name and a mailing address, e-mail address or fax number. The Fund reserves the right to refuse to fulfill a request if it believes that providing portfolio holdings would be contrary to the best interests of the Fund. Such decisions are made by personnel of the Adviser of the Title of Senior Vice President or higher.

In addition to the policy stated above, the Fund may disclose its portfolio holdings at other times to analysts or ratings agencies. Personnel of the Adviser of a title of Senior Vice President or higher are permitted to authorize the release of the Fund’s portfolio holdings, as necessary, in conformity with the procedures adopted by the Board. The disclosure of portfolio holdings in this context is conditioned on the recipient agreeing in writing to treat such portfolio holdings as confidential (provided that analysts and rating agencies may publish portfolio positions upon the consent of personnel of the Adviser of the title of Senior Vice President or higher) and to not allow the portfolio holdings to be used by it or its employees in connection with the purchase or sale of shares of the Fund. In addition, portfolio holdings are provided or otherwise available to third-party service providers of the Fund, including the Fund’s custodian, administrator, pricing services, and broker-dealers, if necessary for the provision of services to the Fund. No compensation is received by the Fund or the Adviser in connection with the disclosure of portfolio holdings. The Board of Trustees will oversee disclosure of portfolio holdings by approval in advance of disclosures for legitimate business purposes and by regular review of reports on disclosures of the Fund’s portfolio holdings.

Current or quarterly portfolio holdings may be disclosed to governmental authorities pursuant to applicable laws or regulations, or a judicial, regulatory or other similar request. Information regarding the characteristics of the Fund’s portfolio, such as its current credit quality or duration, may be provided upon request, subject to the discretion of the Trust’s officers. Exceptions to the Trust’s portfolio holdings disclosure policies may be granted only by an officer of the Trust or the Chief Executive Officer of the Adviser upon a determination that the release of information would be appropriate for legitimate business purposes, and must be reported quarterly to the Board of Trustees. There is no guarantee that the Trust’s policies on the use and dissemination of portfolio holdings information will protect the Fund from the potential misuse of holdings by individuals or firms in possession of such information.

PROXY VOTING GUIDELINES

The Board of Trustees has delegated the Fund’s proxy voting authority to the Adviser, which has in turn delegated this authority to the Sub-Adviser. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (1) without charge, upon request, by calling (866) 858-4338; (2) free of charge, on the Trust’s website at www.tcw.com; or (3) on the SEC’s website at http://www.sec.gov. When the Fund receives a request for its proxy voting record, it will send the information disclosed in the Trust’s most recently filed report on Form N-PX via first-class mail (or other means designed to ensure equally prompt delivery) within three business days of receipt of the request. The Trust also posts Form N-PX on its website as soon as is reasonably practicable after it is filed with the SEC.

Summaries of the proxy voting guidelines of the Adviser and the Sub-Adviser are provided below.

TCW INVESTMENT MANAGEMENT COMPANY

SUMMARY OF PROXY VOTING GUIDELINES

Introduction

Certain affiliates of The TCW Group, Inc. (these affiliates are collectively referred to as “TCW”) act as investment advisors for a variety of clients, including mutual funds. If TCW has responsibility for voting proxies in connection with these investment advisory duties, or has the responsibility to specify to an agent of the client how to vote the proxies, TCW exercises such voting responsibilities for its clients through the corporate proxy voting process. TCW believes that the right to vote proxies is a significant asset of its clients’ holdings. In order to carry out its fiduciary responsibilities in the voting of proxies for its clients, TCW has established a proxy voting committee (the “Proxy Committee”) and adopted these proxy voting guidelines and procedures (the “Guidelines”).

The Proxy Committee generally meets quarterly (or at such other frequency as determined by the Proxy Committee), and its duties include establishing proxy voting guidelines and procedures, overseeing the internal proxy voting process, and reviewing proxy voting issues. The members of the Proxy Committee include TCW personnel from the investment, compliance, legal and marketing departments. TCW also uses outside proxy voting services (each an “Outside Service”) to help manage the proxy voting process. An Outside Service facilitates TCW’s voting according to the Guidelines (or, if applicable, according to guidelines submitted by TCW’s clients) and helps maintain TCW’s proxy voting records. All proxy voting and record keeping by TCW is, of course, dependent on the timely provision of proxy ballots by custodians, clients and other third parties. Under specified circumstances described below involving potential conflicts of interest, an Outside Service may also be requested to help decide certain proxy votes. The Proxy Committee shall

 

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periodically review and evaluate the voting recommendations of such Outside Service to ensure that recommendations are consistent with TCW’s clients’ best interests. In certain limited circumstances, particularly in the area of structured financing, TCW may enter into voting agreements or other contractual obligations that govern the voting of shares. In the event of a conflict between any such contractual requirements and the Guidelines, TCW will vote in accordance with its contractual obligations. In the event that TCW inadvertently receives any proxy materials on behalf of a client that has retained proxy voting responsibility, and where it is reasonably feasible for TCW to determine the identity of the client, TCW will promptly forward such materials to the client.

As a matter of firm policy, TCW does not disclose to unaffiliated third parties how it expects to vote on upcoming proxies and does not disclose the way it voted proxies without a legitimate need to know such information.

Philosophy

When voting proxies, TCW’s utmost concern is that all decisions be made solely in the interests of the client and with the goal of maximizing the value of the client’s investments. Generally, proposals will be voted in accordance with the Guidelines and any applicable guidelines provided by TCW’s clients. TCW’s underlying philosophy, however, is that its portfolio managers, who are primarily responsible for evaluating the individual holdings of TCW’s clients, are best able to determine how to further client interests and goals. The portfolio managers may, in their discretion, take into account the recommendations of TCW management, the Proxy Committee, and an Outside Service.

Proxy Voting Overrides

Individual portfolio managers, in the exercise of their best judgment and discretion, may from time to time override the Guidelines and vote proxies in a manner that they believe will enhance the economic value of clients’ assets, keeping in mind the best interests of the beneficial owners. A portfolio manager choosing to abstain on a vote will provide a written rationale for doing so and that rationale will be in the vote notes of the proxy when it is voted. A portfolio manager choosing to override the Guidelines must deliver a written rationale for each such decision to TCW’s Proxy Specialist (the “Proxy Specialist”), who will maintain such documentation in TCW’s proxy voting records and deliver a quarterly report to the Proxy Committee of all votes cast other than in accordance with the Guidelines. If the Proxy Specialist believes there is a question regarding a portfolio manager’s vote, he/she will obtain the approval of TCW’s Director of Research (the “Director of Research”) for the vote before submitting it. The Director of Research will review the portfolio manager’s vote and make a determination. If the Director of Research believes it appropriate, he/she may elect to convene the Proxy Committee for its independent consideration as to how the vote should be cast.

Conflicts of Interest

In the event a potential conflict of interest arises in the context of voting proxies for TCW’s clients, the primary means by which TCW will avoid a conflict is by casting such votes solely according to the Guidelines and any applicable guidelines provided by TCW’s clients, as outlined below. If a potential conflict of interest arises and there is no predetermined vote, or the Guidelines (or any applicable TCW client guidelines) themselves refer such vote to the portfolio manager for decision, or the portfolio manager would like to override a predetermined vote, then TCW will undertake the following analysis:

Where the issuer soliciting proxy votes is itself a client of TCW’s (or because an affiliate of such issuer, such as a pension or profit sharing plan sponsored by such issuer, is a client of TCW’s), then the Proxy Specialist will determine whether such relationship may be deemed not to be material to TCW based on the level of assets under management and other relevant facts and circumstances. Where the relationship is deemed material, TCW will refrain completely from exercising its discretion with respect to voting the proxy with respect to such vote and will, instead, refer that vote to an Outside Service for its independent consideration as to how the vote should be cast.

Where an employee of TCW sits on the Board of a public company, the Proxy Specialist will determine whether such Board member is the portfolio manager for the account holding the security, or whether the Board member has spoken with the portfolio managers for the account holding the security. If either the particular Board member is the portfolio manager or there has been communication concerning such proxy vote between the portfolio manager and the particular Board member, then the Proxy Specialist will provide the Proxy Committee with the facts and vote rationale so that it can determine and vote the securities.

Where the issuer is an affiliate of TCW, TCW will refrain completely from exercising its discretion with respect to voting the proxy with respect to such a vote and will, instead, refer that vote to an Outside Service for its independent consideration as to how the vote should be cast.

Where any other portfolio manager conflict is identified with respect to a given proxy vote, the Proxy Committee will remove such vote from the conflicted portfolio manager and will itself consider and cast the vote.

 

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Proxy Voting Information and Recordkeeping

Upon request to the Proxy Specialist, TCW provides proxy voting records to its clients. These records state how votes were cast on behalf of client accounts, whether a particular matter was proposed by the company or a shareholder, and whether or not TCW voted in line with management recommendations.

TCW or an Outside Service will keep records of the following items: (i) these Proxy Voting Guidelines and any other proxy voting procedures; (ii) proxy statements received regarding client securities (unless such statements are available on the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system); (iii) records of votes cast on behalf of clients (if maintained by an Outside Service, that Outside Service will provide copies of those records promptly upon request); (iv) records of written requests for proxy voting information and TCW’s response (whether a client’s request was oral or in writing); and (v) any documents prepared by TCW that were material to making a decision how to vote, or that memorialized the basis for the decision, including proxy overrides delivered to the Proxy Specialist and decisions of the Proxy Committee. Additionally, TCW or an Outside Service will maintain any documentation related to an identified material conflict of interest.

TCW or an Outside Service will maintain these records in an easily accessible place for at least five years from the end of the fiscal year during which the last entry was made on such record. For the first two years, TCW or an Outside Service will store such records at its principal office.

International Proxy Voting

While TCW utilizes these Proxy Voting Guidelines for both international and domestic portfolios and clients, there are some significant differences between voting U.S. company proxies and voting non-U.S. company proxies. For U.S. companies, it is relatively easy to vote proxies, as the proxies are automatically received and may be voted by mail or electronically. In most cases, the officers of a U.S. company soliciting a proxy act as proxies for the company’s shareholders.

For proxies of non-U.S. companies, however, it is typically both difficult and costly to vote proxies. The major difficulties and costs may include: (i) appointing a proxy; (ii) knowing when a meeting is taking place; (iii) obtaining relevant information about proxies, voting procedures for foreign shareholders, and restrictions on trading securities that are subject to proxy votes; (iv) arranging for a proxy to vote; and (v) evaluating the cost of voting.

Furthermore, the operational hurdles to voting proxies vary by country. As a result, TCW considers whether or not to vote an international proxy based on the particular facts and circumstances. However, when TCW believes that an issue to be voted is likely to affect the economic value of the portfolio securities, that its vote may influence the ultimate outcome of the contest, and that the benefits of voting the proxy exceed the expected costs, TCW will make every reasonable effort to vote such proxies.

Guidelines

The proxy voting decisions set forth below refer to proposals by company management except for the categories of “Shareholder Proposals” and “Social Issue Proposals.” The voting decisions in these latter two categories refer to proposals by outside shareholders.

Governance

 

    For director and management nominees in uncontested elections

 

    For management nominees in contested elections

 

    For ratifying auditors, except against if the previous auditor was dismissed because of a disagreement with the company or if the non-audit services exceed 51% of fees

 

    Generally for routine management proposals

 

    For amendments to the company’s certificate of incorporation or bylaws, except against if an amendment would have the effect of reducing shareholders’ rights

Capital Structure

 

    Generally for reasonable changes in authorized common stock

 

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