SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material under rule 14a-12
AEW Real Estate Income Fund
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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AEW Real Estate Income Fund
399 Boylston Street
Boston, Massachusetts 02116
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 15, 2003
To the Shareholders of the AEW Real Estate Income Fund:
Notice is hereby given that the Annual Meeting of Shareholders (the "Meeting")
of the AEW Real Estate Income Fund (the "Fund") will be held at the offices of
CDC IXIS Asset Management Services, Inc., located at 399 Boylston Street, 4th
Floor, Boston, Massachusetts 02116, on Thursday, May 15, 2003 at 9 a.m., for the
following purposes:
1. To elect three Trustees of the Fund, each to hold office for the term
indicated and until their successors shall have been elected and
qualified; and
2. To transact such other business as may properly come before the Meeting
or any adjournments or postponements thereof.
The Board of Trustees of the Fund has fixed the close of business on March 14,
2003 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Meeting or any postponement or adjournment thereof. The
enclosed proxy is being solicited on behalf of the Board of Trustees of the
Fund.
By order of the Board of Trustees,
JOHN E. PELLETIER, Secretary
Boston, Massachusetts
March 31, 2003
It is important that your shares be represented at the Meeting in person or by
proxy, no matter how many shares you own. If you do not expect to attend the
Meeting, please complete, date, sign and return the applicable enclosed proxy or
proxies in the accompanying envelope, which requires no postage if mailed in the
United States. Please mark and mail your proxy or proxies promptly in order to
save the Fund any additional costs of further proxy solicitations and in order
for the Meeting to be held as scheduled.
AEW REAL ESTATE INCOME FUND
399 Boylston Street
Boston, Massachusetts 02116
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
MAY 15, 2003
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Trustees (the "Board") of AEW Real Estate Income Fund (the
"Fund") of a proxy to be voted at the Annual Meeting of Shareholders to be held
on May 15, 2003, and any adjournment or postponement thereof (the "Meeting").
The Meeting will be held at the offices of CDC IXIS Asset Management Services,
Inc., 399 Boylston Street, 4th Floor, Boston, Massachusetts 02116, on Thursday,
May 15, 2003 at 9 a.m.
The Meeting is scheduled as a meeting of the respective holders of
common shares (the "Common Shareholders") and preferred shares (the "Preferred
Shareholders" and, together with Common Shareholders, the "Shareholders") of the
Fund because the Shareholders of the Fund are expected to consider and vote on
similar matters.
The Notice of Annual Meeting of Shareholders (the "Notice"), this Proxy
Statement and the enclosed Proxy Card are first being sent to Shareholders on or
about March 31, 2003.
The Board of Trustees of the Fund has fixed the close of business on
March 14, 2003 as the record date (the "Record Date") for the determination of
Shareholders of the Fund entitled to notice of, and to vote at, the Meeting, and
any postponement or adjournment thereof. Shareholders of the Fund on the Record
Date will be entitled to one vote for each share held, and a fractional vote
with respect to fractional shares, on each matter to which they are entitled to
vote and that is to be voted on, with no cumulative voting rights. The following
table sets forth the number of shares of common stock, $0.00001 par value per
share ("Common Shares"), and shares of preferred stock, $0.00001 par value per
share ("Preferred Shares" and, together with the Common Shares, the "Shares"),
of the Fund issued and outstanding at the close of business on the Record Date:
Outstanding Common Shares Outstanding Preferred Shares
3,833,389.668 1,120
The classes of stock listed above are the only classes of stock
currently authorized by the Fund.
At the Meeting, Preferred Shareholders of the Fund will have equal
voting rights (i.e., one vote per Share) with the Fund's Common Shareholders and
will vote together with Common Shareholders as a single class on the Proposal to
be brought before the Meeting. As summarized in the table below, the Common
Shareholders and Preferred Shareholders, voting as a single class, have the
right to vote with respect to the election of three Trustees at the Meeting. The
following candidates (the "Nominees") have been nominated by the Trustees of the
Fund who are not "interested persons" (as defined in the Investment Company Act
of 1940) of the Fund.
Common Shareholders and
Preferred Shareholders,
Proposal - Election of Trustees Voting Together
------------------------------------------------ ---------------------------
|X| Election of Graham T. Allison X
|X| Election of Richard Darman X
|X| Election of Pendleton P. White X
You may vote by mailing the enclosed proxy card. Shares represented by
duly executed and timely proxies will be voted as instructed on the proxy. If
you mail the enclosed proxy and no choice is indicated for the Proposal listed
in the attached Notice, your proxy will be voted in favor of the election of all
Nominees. At any time before it has been voted, your proxy may be revoked in one
of the following ways: (i) by sending a signed, written letter of revocation to
the Secretary of the Fund, (ii) by properly executing a later-dated proxy or
(iii) by attending the Meeting, requesting the return of any previously
delivered proxy and voting in person.
I. PROPOSAL: ELECTION OF TRUSTEES
The Meeting will constitute the first annual meeting of Shareholders of
the Fund. In accordance with the Fund's Amended and Restated Agreement and
Declaration of Trust (the "Declaration"), the Trustees are divided into the
following three classes (each a "Class"): Class I, whose initial term will
expire at this Meeting; Class II, whose initial term will expire at the Fund's
2004 annual meeting; and Class III, whose initial term will expire at the Fund's
2005 annual meeting. At each annual meeting beginning with this Meeting,
successors to the Class of Trustees whose term expires at that annual meeting
shall be elected for a three-year term. A Trustee elected at an annual meeting
shall hold office until the annual meeting for the year in which his or her term
expires and until his or her successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office.
Under this classified Board structure, generally only those Trustees in
a single Class may be replaced at any one annual meeting, and it would require a
minimum of two annual meetings to change a majority of the Board under normal
circumstances. This structure, which may be regarded as an "anti-takeover"
provision, may make it more difficult for the Fund's Shareholders to change the
majority of Trustees of the Fund and, thus, promotes the continuity of current
management.
The Board nominated the three persons listed below for election at the
Meeting. If elected at the Meeting, they will be Class I Trustees:
2
Class I Trustee Expiration of Term
----------------------- -------------------------
Graham T. Allison 2006 Annual Meeting
Richard Darman 2006 Annual Meeting
Pendleton P. White December 31, 2003*
* As required by the Board's retirement policy, Mr. White will retire as Trustee
on December 31, 2003.
Unless authority is withheld, it is the intention of the persons named
in the enclosed proxy to vote each proxy for the persons listed above. Each of
the Nominees has indicated he will serve if elected, but if he should be unable
to serve for the Fund, the proxy holders may vote in favor of such substitute
nominee as the Board may designate (or the Board may determine to leave a
vacancy). A Trustee elected by the Board to fill any vacancy occurring in the
Board of Trustees shall serve until the next annual meeting of shareholders and
until his or her successor shall be elected and shall qualify, subject, however,
to the Trustee's prior death, resignation, retirement, disqualification or
removal from office. Any Trustee elected by shareholders to fill a vacancy that
has arisen since the preceding annual meeting of shareholders (whether or not
any such vacancy has been filled by election of a new Trustee by the Board)
shall hold office for a term that coincides with the remaining term of the Class
of Trustees to which such office was previously assigned, if such vacancy arose
other than by an increase in the number of Trustees, and until his or her
successor shall be elected and shall qualify.
3
Information Regarding Trustees, Nominees and Officers
The following table provides information concerning the Trustees
(including the Trustees who are Nominees) and the Officers of the Fund.
---------------------------------- --------------- ------------- --------------------- -------------------- ------------------------
Term of
Office Number of
and Length Principal Portfolios in Fund
Position(s) of Time Occupation(s) Complex Overseen Other Directorships Held
Name, Age and Address Held with Fund Served* During Past 5 Years by Trustee/Nominee by Trustee/Nominee
--------------------- -------------- ------- ------------------- ------------------ ------------------
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---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
INDEPENDENT TRUSTEES(1)
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Graham T. Allison, Jr. (63) Trustee and Since Douglas Dillon 27 Director, Taubman
399 Boylston Street Nominee inception Professor and Centers, Inc.;
Boston, MA 02116 (October Director of the Board Member, USEC Inc.
(Class I) Contract 2002) Belfer Center for
Review and Science and
Governance International
Committee Affairs, John F.
Member Kennedy School of
Government, Harvard
University
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Daniel M. Cain (58)++ Trustee Since President and CEO, 27 Trustee, Universal Health
452 Fifth Avenue inception Cain Brothers & Realty Income Trust;
New York, NY 10018 Chairperson (October Company, Director, PASC
(Class II) of the Audit 2002) Incorporated
Committee (investment banking)
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Kenneth J. Cowan (71) Trustee Since Retired 27 None
399 Boylston Street inception
Boston, MA 02116 Chairperson (October
(Class II) of the 2002)
Contract
Review and
Governance
Committee
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Richard Darman (59) Trustee and Since Partner, The 27 Director and Vice
399 Boylston Street Nominee inception Carlyle Group Chairman, AES Corporation
Boston, MA 02116 (October (investments);
(Class I) Contract 2002) formerly,
Review and Professor, John F.
Governance Kennedy School of
Committee Government, Harvard
Member University
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Sandra O. Moose (61)++ Trustee Since Senior Vice President 27 Director, Verizon
Exchange Place inception and Director, The Boston Communications; Director,
Boston, MA 02109 Audit (October Consulting Group, Inc. Rohm and Haas Company
(Class III) Committee 2002) (management
Member consulting)
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
John A. Shane (70) Trustee Since President, Palmer 27 Director, Eastern Bank
200 Unicorn Park Drive inception Service Corporation Corporation; Director,
Woburn, MA 01801 Audit (October (venture capital Gensym Corporation;
(Class III) Committee 2002) organization) Director, Overland
Member Storage, Inc.; Director,
Abt Associates Inc.
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Pendleton P. White (72)+ Trustee and Since Retired 27 None
6 Breckenridge Lane Nominee inception
Savannah, GA 31411 (October
(Class I) Contract 2002)
Review and
Governance
Committee
Member
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
4
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
INTERESTED TRUSTEES (1)
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
John T. Hailer** (42) President and Since President and Chief 27 None
399 Boylston Street Chief inception Executive Officer,
Boston, MA 02116 Executive (October CDC IXIS Asset
Officer 2002) Management
(Class II) Distributors, L.P.;
Trustee formerly, Senior
Vice President,
Fidelity
Investments
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Peter S. Voss*** (56) Chairman of Since Director, President 27 Trustee, Harris Associates
399 Boylston Street the Board inception and Chief Executive Investment Trust****
Boston, MA 02116 (October Officer, CDC IXIS
(Class III) Trustee 2002) Asset Management
North America, L.P.
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
OFFICERS
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
James J. Finnegan (42) Chief Since General Counsel, N/A N/A
399 Boylston Street Operating inception Managing Director,
Boston, MA 02116 Officer (October Vice President and
2002) Clerk, AEW
Management and
Advisors, L.P.;
General Counsel
and Principal,
formerly,
Assistant
General Counsel
and Vice
President, AEW
Capital
Management,
L.P.; Managing
Director and
Vice President,
AEW Advisors,
Inc.; Vice
President and
Assistant
Clerk, AEW
Investment
Group, Inc.;
Vice President
and Assistant
Clerk, AEW Real
Estate
Advisors, Inc.;
formerly,
Assistant
General Counsel
and Vice
President,
Aldrich,
Eastman &
Waltch, L.P.;
formerly,
General Counsel
and Vice
President,
Capital
Management
Resources, L.P.
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Nicholas H. Palmerino (38) Treasurer Since Senior Vice N/A N/A
399 Boylston Street February President, CDC IXIS
Boston, MA 02116 2003 Asset Management
Services, Inc.;
Senior Vice
President, CDC IXIS
Asset Management
Advisers, L.P.;
formerly, Vice
President, Loomis,
Sayles & Company,
L.P.
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
John E. Pelletier (38) Secretary Since Senior Vice N/A N/A
399 Boylston Street and Clerk inception President, General
Boston, MA 02116 (October Counsel, Secretary
2002) and Clerk, CDC
IXIS Asset
Management
Distribution
Corporation;
Senior Vice
President,
General
Counsel,
Secretary and
Clerk, CDC IXIS
Asset
Management
Distributors,
L.P.; Senior
Vice President,
General
Counsel,
Secretary and
Clerk, CDC IXIS
Asset
Management
Advisers, L.P.;
Executive Vice
President,
General
Counsel,
Secretary,
Clerk, and
Director, CDC
IXIS Asset
Management
Services, Inc.
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
5
(1) For purposes of this Proxy Statement, the term "Independent Trustees" means
those Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940) of the Fund, and the term "Interested Trustees" means those
Trustees who are "interested persons" of the Fund.
*As described above, the Trustees are divided into three Classes and serve
staggered three-year terms, subject to their prior death, retirement,
resignation, disqualification or removal from the Board. As required by the
Board's retirement policy, Mr. White will retire as a Trustee on December 31,
2003. The current retirement age is 72. Officers hold office at the pleasure of
the Fund's Board and until their successors are appointed and qualified or until
their earlier resignation or removal.
**Mr. Hailer is an "interested person" of the Fund because he holds the
following positions with affiliated persons of the Fund: Director and Executive
Vice President of CDC IXIS Asset Management Distribution Corporation ("CDC IXIS
Distribution Corporation"); and President and Chief Executive Officer of CDC
IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers").
***Mr. Voss is an "interested person" of the Fund because he holds the following
positions with affiliated persons of the Fund or its investment adviser:
Director of CDC IXIS Asset Management Services, Inc.; Director of CDC IXIS
Distribution Corporation; Director and Chairman of CDC IXIS Asset Management
Associates, Inc.; Director of AEW Capital Management, Inc.; Director of Harris
Associates, Inc.; Director of Jurika & Voyles, Inc.; Director of Loomis, Sayles
& Company, Inc.; Director of Reich & Tang Asset Management Inc.; Director of
Westpeak Global Advisors, Inc.; and Director of Vaughan, Nelson, Scarborough &
McCullough, Inc.
****As of December 31, 2002, Harris Associates Investment Trust had seven series
that were overseen by its Board of Trustees.
+Mr. White will retire on December 31, 2003.
++The holders of the Fund's Preferred Shares are entitled to elect two Trustees.
When up for election, Mr. Cain and Ms. Moose will be elected by the Preferred
Shareholders. The remaining Trustees, including the Trustees to be elected at
the Meeting, are elected by holders of Common Shares and Preferred Shares,
voting together as a single class. As required by the Investment Company Act of
1940, Preferred Shareholders may under certain circumstances elect a majority of
the Board of Trustees.
6
The following table states the dollar range of equity securities
beneficially owned as of February 28, 2003 by each Trustee of the Fund and, on
an aggregate basis, in any registered investment companies overseen or to be
overseen by the Trustee/nominee in the "family of investment companies" which
includes the Fund.
Aggregate Dollar Range of Equity Securities in All
Dollar Range of Equity Registered Investment Companies Overseen by Trustee in
Name of Trustee Securities in the Fund* Family of Investment Companies*+
--------------- ----------------------- -------------------------------
INDEPENDENT TRUSTEES
Graham T. Allison Jr. A E
Daniel M. Cain A A
Kenneth J. Cowan A C
Richard Darman A A
Sandra O. Moose A A
John A. Shane A A
Pendleton P. White A A
INTERESTED TRUSTEES
John T. Hailer A A
Peter Voss A E
* A. None
B. $1 - 10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. over $100,000
+ Includes amounts payable by the investment companies under deferred
compensation plans as of February 28, 2003. These amounts fluctuate with changes
in the value of a hypothetical investment in investment companies shares of
compensation the Trustee has elected to defer.
The Fund pays no compensation to its Officers or to its Interested
Trustees. Each other Trustee of the Fund receives a fee of $2,000 annually for
serving as a Trustee of the Fund, and a fee of $375 and related expenses for
each meeting of the Board of Trustees attended. Each Committee member receives a
fee of $2,000 annually for Committee service, and will also receive a meeting
fee of $200 for each additional meeting after the first four meetings of a
Committee during a given year. In addition, the Chairpersons of the Contract
Review and Governance and Audit Committees each receive an additional fee of
$1,000 per year.
During the most recently ended fiscal year (the fiscal year ended
January 31, 2003, for CDC Nvest Companies Trust I and the Fund, and the year
ended December 31, 2002 for the remaining series of the CDC Nvest Trusts (as
defined below)), the Trustees of the Fund received the amounts set forth in the
7
following table for serving as trustees of CDC Nvest Funds Trust I, CDC Nvest
Funds Trust II, CDC Nvest Funds Trust III, CDC Nvest Companies Trust I, CDC
Nvest Cash Management Trust and CDC Nvest Tax Exempt Money Market Trust
(collectively, the "CDC Nvest Trusts") and the Fund.
Pension or Total
Compensation from Retirement Estimated Compensation
the Fund for the Benefits Annual from the
Fiscal Year Accrued as Benefits CDC Nvest
Ending Part of Fund upon Trusts and the
Name of Trustee January 31, 2003 Expenses* Retirement* Fund*+
--------------- ---------------- --------- ----------- ------
INDEPENDENT
-----------
Graham T. Allison, Jr. $1,285 $0 $0 $74,535
Daniel M. Cain $1,887 $0 $0 $76,887
Kenneth J. Cowan $1,887 $0 $0 $81,637
Richard Darman $1,660 $0 $0 $76,410
Sandra O. Moose $1,285 $0 $0 $71,285
John A. Shane $1,660 $0 $0 $71,660
Pendleton P. White $1,660 $0 $0 $76,410
INTERESTED
Peter S. Voss $0 $0 $0 $0
John T. Hailer $0 $0 $0 $0
+Total Compensation represents amounts paid during the most recently ended
fiscal year (the fiscal year ended January 31, 2003, for CDC Nvest Companies
Trust I and the Fund, and the year ended December 31, 2002 for the remaining
series of the CDC Nvest Trusts)) to a Trustee for serving on the board of
trustees of 6 trusts with a total of 26 funds as of December 31, 2002, as well
as amounts paid by the Fund during the fiscal year ended January 31, 2003.
Amounts include payments deferred by Trustees for 2002 (for the fiscal year
ended January 31, 2003, for CDC Nvest Companies Trust I).
*The Fund provides no pension or retirement benefits to its Trustees.
Board Committees and Meetings
Contract Review and Governance Committee. The Committee is comprised solely of
Independent Trustees and considers matters relating to advisory, subadvisory and
distribution arrangements, potential conflicts of interest between the
investment adviser and the Fund, governance matters relating to the Fund and the
effect on Common Shares of the use of leveraging through the issuance of the
Preferred.
Audit Committee. The Committee is comprised solely of Independent Trustees and
considers matters relating to the scope and results of the Fund's audits and
serves as a forum in which the independent accountants can raise any issues or
problems identified in the audit with the Board of Trustees. This Committee also
reviews and monitors compliance with stated investment objectives and policies
and certain Securities and Exchange Commission and Treasury regulations as well
as operational issues relating to the transfer agent, auction agent,
administrator, sub-administrator and custodian and the Preferred Shares.
The Board of Trustees has determined that each member of the Audit
Committee is "independent" as defined in Section 121(A) of the listing standards
of the American Stock Exchange, on which the Common Shares of the Fund are
listed. The Board has adopted a written charter for its Audit Committee, a copy
8
of which is included as Appendix A to this Proxy Statement. A report of the
Audit Committee, dated March 13, 2003, is attached to this Proxy Statement as
Appendix B.
Board and Committee Meetings. The Fund commenced operations in November 2002.
During the Fund's initial fiscal year ended January 31, 2003, the Board held
three meetings, and the Contract Review and Governance Committee and the Audit
Committee did not hold any meetings.
Information Regarding Possible Future Events
It is expected that shortly after the Meeting, the Board of Trustees
will increase the size of the Board from nine members to twelve. If, as
expected, the Trustees increase the size of the Board, it is also expected that
the Trustees will shortly thereafter appoint three new Trustees as part of a
proposed combination of the Boards of Trustees of the Fund, the CDC Nvest Trusts
and certain other affiliated investment companies. As permitted by the Fund's
Declaration of Trust, the Trustees do not intend to seek shareholder approval of
these actions. Information about the persons expected to be appointed as
Trustees is provided in Appendix C. It is possible that the Trustees will decide
not to increase the size of the Board or appoint such persons as new Trustees.
It is expected that following the consolidation of the Boards of Trustees of
these investment companies, the Trustees' compensation will be increased in
recognition of the increased responsibilities of the Trustees and will be
allocated ratably among all these investment companies.
Required Vote. Election to the Board of Trustees of the Fund will be decided by
a plurality of the Common Shares and Preferred Shares of the Fund (voting
together as a single class) voted in the election of Trustees at the Meeting, in
person or by proxy.
THE BOARD OF TRUSTEES OF THE FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL FOR EACH OF THE THREE NOMINEES FOR TRUSTEE.
II. OTHER BUSINESS
As of the date of this Proxy Statement, the only business that
management of the Fund intends to present or knows that others will present is
the election of three Trustees of the Fund. If any other matters properly come
before the Meeting, and on all matters incidental to the conduct of the Meeting,
the persons named as proxies intend to vote in accordance with their judgment,
unless the Secretary of the Fund has previously received written contrary
instructions from the Shareholder entitled to vote the Shares.
III. ADDITIONAL INFORMATION
9
Investment Manager. AEW Management and Advisors, L.P. (the "Investment
Manager"), located at Two Seaport Lane, World Trade Center East, Boston,
Massachusetts 02110, serves as investment adviser of the Fund.
Transfer Agent, Auction Agent, Custodian and Administrator. EquiServe Trust
Company, N.A., located at 150 Royall Street, Canton, Massachusetts 02021, serves
as the transfer agent, dividend disbursing agent and registrar of the Fund's
Common Shares. Deutsche Bank Trust Company Americas, located at 280 Park Avenue,
New York, New York 10017, serves as the auction agent for the Fund's Preferred
Shares. Investors Bank & Trust Company, located at 200 Clarendon Street, Boston,
Massachusetts 02116, serves as custodian of the Fund's investments. CDC IXIS
Asset Management Services, Inc., located at 399 Boylston Street, Boston,
Massachusetts, 02116, serves as administrator to the Fund.
Independent Auditors. PricewaterhouseCoopers LLP ("PwC"), located at 160 Federal
Street, Boston, Massachusetts 02110, has been selected by the Board as the
independent auditors of the Fund for the current fiscal year ending January 31,
2004.
A representative of PwC, if requested by any Shareholder a reasonable
time before the Meeting, will be present via telephone at the Meeting to respond
to appropriate questions from Shareholders and will have an opportunity to make
a statement if he or she chooses to do so.
The following table sets forth the aggregate fees billed for
professional services rendered by PwC to the Fund during the fiscal year ended
January 31, 2003.
Financial Information Systems
Audit Fees Design and Implementation Fees* All Other Fees*
------------------------- -------------------------------------------- ----------------------------
$24,500 $0 $118,100
* Includes fees billed for services rendered during the Fund's most
recent fiscal year to the Fund, the Investment Manager, and any other entity
controlling, controlled by or under common control with the Investment Manager
that provides services to the Fund (other than subadvisers not otherwise
affiliated with the Investment Manager).
In approving the selection of PwC, the Audit Committee considered, in
addition to other practices and requirements relating to the selection of the
Fund's auditors, whether PwC's provision of the non-audit services covered in
the table above under "Financial Information Systems Design and Implementation
Fees" and "All Other Fees" for the Fund, the Investment Manager and for certain
related other parties are compatible with maintaining the independence of PwC as
the Fund's principal accountants. Please refer to the Audit Committee Report in
Appendix B to this Proxy Statement.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the
Securities Exchange Act of 1934 and Section 30(f) of the Investment Company Act
of 1940 require the Fund's Trustees and Officers and certain other persons to
file timely certain reports regarding ownership of, and transactions in, the
Fund's securities with the Securities and Exchange Commission. Copies of the
required filings must also be furnished to the Fund. Based solely upon a review
of copies of such reports furnished to the Fund, the Fund believes Initial
10
Statements of Beneficial Ownership on Form 3 were not filed on a timely basis
for the Investment Manager and certain persons affiliated with the Investment
Manager. With the exception of the Investment Manager (which purchased shares of
the Fund prior to the initial public offering of the Common Shares in order to
satisfy initial seed capital requirements under the Investment Company Act of
1940), none of these persons owned or disposed of shares of the Fund during the
reporting period.
Information About Proxies
Solicitation of Proxies and Costs of Solicitation. Proxies will be
solicited primarily by mailing this Proxy Statement and its enclosures and the
cost of soliciting proxies for the Fund will be borne by the Fund. In addition,
certain officers of the Fund and certain officers and employees of the
Investment Manager or its affiliates (none of whom will receive additional
compensation therefor) may solicit proxies by telephone, mail, email and
personal interviews. In addition, D.F. King & Co., Inc. may be engaged to assist
in the solicitation of proxies, the cost of which will be borne by the Fund and
is estimated to be approximately $3000 in the aggregate, plus out-of-pocket
expenses.
Quorum, Adjournments and Methods of Tabulation. A quorum for the Fund
at the Meeting will consist of the presence in person or by proxy of thirty
three and 1/3 percent (33 1/3%) of the total Shares of the Fund entitled to vote
at the Meeting. In the event that a quorum is not present at the Meeting for the
Fund or, even if a quorum is so present, in the event that sufficient votes to
elect all the Nominees are not received by the time scheduled for the Meeting,
the persons named as proxies may propose one or more adjournments of the Meeting
with no other notice than announcement at the Meeting, to permit further
solicitation of proxies with respect to the Proposal. In addition, if, in the
judgment of the persons named as proxies, it is advisable to defer action on the
Proposal, the persons named as proxies may propose one or more adjournments of
the Meeting with respect to the Proposal for a reasonable time. Any adjournments
will be decided by a plurality of the Shares entitled to vote present in person
or represented by proxy at the session of the Meeting to be adjourned. The
persons named as proxies will vote in favor of such adjournment those proxies
which they are entitled to vote in favor of all the Nominees. They will vote
against any such adjournment those proxies required to be voted against any of
the Nominees and will not vote any proxies that direct them to abstain from
voting on the election of the Nominees. The costs of any additional solicitation
and of any adjourned session will be borne by the Fund.
Votes cast by proxy or in person at the Meeting will be counted by
persons appointed by the Fund as tellers (the "Tellers") for the Meeting. The
Tellers will count the total number of votes case "for" approval of the proposal
for purposes of determining whether sufficient affirmative votes have been cast.
The Tellers will count shares represented by proxies that reflect abstentions
and "broker non-votes" (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or the persons
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power on a particular matter) as shares that are present and entitled to
vote on the matter for purposes of determining the presence of a quorum. With
respect to the election of Trustees, neither abstentions nor broker non-votes
have any effect on the outcome of the election.
11
Shareholder Reports. The Fund's annual report to shareholders for the fiscal
year ending January 31, 2003 is included with this proxy statement. Additional
copies of the Fund's annual report may be obtained without charge from the Fund
by calling 1-800-862-4863 or by writing to the Fund at 399 Boylston Street,
Boston, Massachusetts 02116.
Shareholder Proposals for 2004 Annual Meeting. It is currently anticipated that
the Fund's next annual meeting of Shareholders will be held in May 2004.
Shareholders submitting any proposals for the Fund intended to be presented at
the 2004 annual meeting must ensure that such proposals are received by the
Fund, in good order and in compliance with all applicable legal requirements and
the requirements of the Fund's Bylaws, no later than February 15, 2004 and not
earlier than January 31, 2004. Shareholders who wish for the Fund to include a
proposal in the proxy statement for next year's annual meeting of shareholders
pursuant to Rule 14a-8 under the Securities Act of 1933 must submit their
proposeal so that it is received by the Fund no later than December 13, 2003.
The submission by a Shareholder of a proposal for inclusion in the proxy
materials does not guarantee that it will be included. Shareholder proposals are
subject to certain requirements under the federal securities laws and must be
submitted in accordance with the Fund's Bylaws and the Securities Act of 1933.
Shareholder proposals should be addressed to the attention of the Secretary of
the Fund.
Significant Shareholders. As of February 28, 2003, the following shareholders of
record owned 5% or more of the outstanding shares of the noted class of the
Fund:
Percentage
Number of of Shares
Title of Class Name and Address of Record Owner Shares Owned Owned
-------------- -------------------------------- ------------ -----
Common Shares
Cede & Co.* 3,825,453 99.81%
55 Water Street, 25th Floor
New York, New York 10041-0001
Preferred Shares
Merrill Lynch, Pierce, Fenner & Smith Incorporated** 608 54.29%
4 World Financial Center
New York, New York 10080
Prudential Securities Incorporated** 89 7.95%
One New York Plaza
New York, New York 10292
* A nominee for participants in the Depository Trust Company
** Shares held at the Depository Trust Company
As of February 28, 2003, the Trustees and Officers of the Fund as a group
beneficially owned less than one percent (1%) of the Fund's outstanding Common
Shares and Preferred Shares.
12
Appendix A
Audit Committee
of
CDC Nvest Funds Trust I
CDC Nvest Funds Trust II
CDC Nvest Funds Trust III
CDC Nvest Cash Management Trust
CDC Nvest Tax Exempt Money Market Trust
CDC Nvest Companies Trust I
AEW Real Estate Income Fund
CHARTER
1) The Audit Committee (the "Committee") of CDC Nvest Funds Trust I, CDC Nvest
Funds Trust II, CDC Nvest Funds Trust III, CDC Nvest Cash Management Trust,
CDC Nvest Tax Exempt Money Market Trust, CDC Nvest Companies Trust I and
AEW Real Estate Income Fund (the "Trusts"):
a) shall be composed entirely of trustees who are not "interested
persons" (as defined for purposes of the Investment Company Act of
1940) of the Trusts; and
b) with respect to the Audit Committee of the AEW Real Estate Income Fund
only:
i) shall be composed entirely of trustees who meet the independence
standards set forth in Section 121(A) of the American Stock
Exchange Company Guide (Listing Standards, Policies and
Requirements) (the "AMEX Guide") and the financial literacy
requirements set forth in the first sentence of Section
121(B)(b)(i) of the AMEX Guide; and
ii) shall include at least one trustee who meets the financial
experience requirements set forth in the second sentence of
Section 121(B)(b)(i) of the AMEX Guide.
2) The purposes of the Committee are:
a) to oversee the Trusts' accounting and financial reporting policies and
practices, its internal controls and, as appropriate, the internal
controls of certain service providers;
b) to oversee the quality and objectivity of the Trusts' financial
statements and the independent audit thereof;
c) to review such aspects of the operations of the Trusts as the
Committee or the full Board of Trustees shall deem appropriate;
d) to act as liaison between the Trusts' independent auditors and the
full Board of Trustees;
13
e) to review operational issues relating to the preferred shares of the
AEW Real Estate Income Fund, including performance by the auction
agent of its duties in connection with the auctions;
f) to oversee any issues in connection with the AEW Real Estate Income
Fund's implementation of a managed dividend policy;
g) to hold scheduled meetings on a quarterly basis in order to conduct
such Committee business and report to the full Board of Trustees at
their next regularly scheduled meeting or sooner; and
h) to submit minutes of such meetings to the full Board of Trustees on a
regular basis.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
control, the auditors' responsibility to plan and carry out a proper audit,
and management's and the auditors' responsibility to determine that the
Trusts' financial statements are complete and accurate and in accordance
with generally accepted accounting principles.
3) Powers and Responsibilities:
a) Audit Matters:
(1) the auditors are ultimately responsible to the Audit Committee
and the full Board of Trustees, as representatives of the Trusts'
shareholders, and the Audit Committee has the ultimate authority
and responsibility to select, evaluate and, where appropriate,
replace the auditors (or, if applicable, to nominate the auditors
to be proposed for shareholder approval in any proxy statement),
and, in connection therewith, to evaluate the independence of the
auditors, including whether the auditors provide any consulting
services to the manager, and to receive from the auditors a
formal written statement delineating all relationships between
the auditors and the Trusts consistent with Independence
Standards Board Standard No. 1, to actively engage in a dialogue
with the auditors with respect to any disclosed relationships or
services that may impact the objectivity and independence of the
auditors, and to take, or recommend that the full Board of
Trustees take, appropriate action to oversee the independence of
the auditors;
(2) to meet with the Trusts' independent auditors, including private
meetings, as necessary to discuss the matters required to be
discussed by Statement of Auditing Standards No. 61, including
without limitation, (i) the arrangements for and scope of the
annual audit and any special audits; (ii) any matters of concern
relating to the Trusts' financial statements, including any
adjustments to such statements recommended by the auditors, or
other results of said audit(s); (iii) the auditors' comments with
respect to the Trusts' financial policies, procedures and
internal accounting controls and management's response thereto;
and (iv) the form of opinion the auditors propose to render to
the Board of Trustees and shareholders;
14
(3) to consider the effect upon the Trusts of any changes in
accounting principles or practices proposed by management or the
auditors;
(4) to review the fees charged by the auditors for audit and
non-audit services;
(5) to review and discuss the Trusts' financial statements with
management; and
(6) with respect to the AEW Real Estate Income Fund only, to consider
whether to recommend to the Board of Trustees that the Trusts'
audited financial statements be included in the Trusts' annual
reports to shareholders.
b) Operational Matters:
(1) to review performance of the transfer agent, sub-transfer agents,
custodian, sub-custodians and other service providers to the
Trusts;
(2) to review such operational matters with respect to the advisers
and subadvisers to the Trusts as the Committee shall deem
appropriate;
(3) to review the codes of ethics of the advisers and subadvisers to
the Trusts and review and evaluate reports of any violations of
such codes of ethics;
(4) to investigate any improprieties in Trust operations;
(5) to review dividend and capital gain distributions;
(6) to report its activities to the full Board of Trustees on a
regular basis and to make such recommendations with respect to
the above and other matters as the Committee may deem necessary
or appropriate; and
(7) to regularly meet with the Treasurer of the Trusts, if the
Committee deems such meetings are necessary;
4) Additional Powers and Responsibilities.
a) the Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain
special counsel and other experts or consultants at the expense of the
appropriate Trust;
b) when appropriate, and to the full extent required by Section 120 of
the AMEX Guide, the Audit Committee shall review potential conflict of
interest situations; and
c) the Committee shall review this Charter at least annually and
recommend any changes to the full Board of Trustees.
15
Appendix B
The Audit Committee of the Board of Trustees issued the following report
concerning the financial statements for the Fund's most recent fiscal year.
The Audit Committee reviewed and discussed the audited financial statements
with Fund management. The Audit Committee also discussed with
PricewaterhouseCoopers LLP, the Fund's accountants, the matters required to
be discussed by SAS 61 (Communication with Audit Committees). The Audit
Committee received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), and
discussed with PricewaterhouseCoopers LLP its independence.
Based on this review and these discussions, the Audit Committee recommended
to the Board of Trustees that the audited financial statements be included
in the Fund's annual report to shareholders for the fiscal year ended
January 31, 2003 for filing with the Securities and Exchange Commission.
Daniel M. Cain
Sandra O. Moose
John A. Shane
16
Appendix C
Information Regarding Possible Future Events
It is expected that shortly after the Meeting, the Board of Trustees
will increase the size of the Board from nine members to twelve. If, as
expected, the Trustees increase the size of the Board, it is also expected that
the Trustees will shortly thereafter appoint three new Trustees. As permitted by
the Fund's Declaration of Trust, the Trustees do not intend to seek shareholder
approval of these actions. Information about the persons expected to be
appointed as Trustees is provided below. It is possible that the Trustees will
decide not to increase the size of the Board or appoint such persons as new
Trustees.
---------------------------------- --------------- ------------- --------------------- -------------------- ------------------------
Term of
Office Number of
and Length Principal Portfolios in Fund
Position(s) of Time Occupation(s) Complex Overseen Other Directorships Held
Name, Age and Address Held with Fund Served During Past 5 Years by Trustee/Nominee by Trustee/Nominee
--------------------- -------------- ------ ------------------- ------------------ ------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
INDEPENDENT TRUSTEES(1)
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Director, Precision Optics
Edward A. Benjamin (64) N/A N/A Retired; formerly, N/A Corporation; Director,
399 Boylston Street Partner, Ropes & Coal, Energy Investments &
Boston, MA 02116 Gray Management, LLC; Trustee,
New England Zenith Funds;
Trustee, Loomis Sayles
Funds; Trustee, Loomis
Sayles Investment Trust+
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Paul G. Chenault (69) N/A N/A Retired N/A Director, Mailco Office
5852 Pebble Beach Way Products, Inc.; Trustee,
San Luis Obispo, CA 94301 Loomis Sayles Funds;
Trustee, Loomis Sayles
Investment Trust+
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
INTERESTED TRUSTEE (1)
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
Robert J. Blanding (56) N/A N/A President, N/A N/A
399 Boylston Street Chairman, Director,
Boston, MA 02116 and Chief Executive
Officer, Loomis,
Sayles & Company,
L.P.
---------------------------------- --------------- ------------- --------------------- ------------------ --------------------------
(1) For purposes of this Appendix, the term "Independent Trustees" means those
Trustees who if appointed as Trustees of the Fund, would not be "interested
persons" (as defined in the Investment Company Act of 1940) of the Fund, and the
term "Interested Trustees" means those Trustees who would be "interested
persons" of the Fund.
+ As of January 31, 2003, Loomis Sayles Funds and Loomis Sayles Investment Trust
had thirteen and nine series, respectively, that were overseen by their Board of
Trustees.
17
AEW logo
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
[X] Please mark votes as in this example.
1. Election of trustee.
Nominees: (01) Mr. Graham T. Allison
(02) Mr. Richard Darman
(03) Mr. Pendelton P. White
FOR ALL NOMINEES [ ] [ ] WITHHELD FROM ALL NOMINEES
[ ] --------------------------------------------------
(To withhold authority for a nominee, check this box and list the names of such
nominee(s) on the line above. Your shares will be voted for the remaining
nominees.)
Mark box at right if you plan to attend the Annual Meeting. [ ]
Mark box at right if an address change or comment has been noted on
the reverse side of this card. [ ]
Please sign this proxy exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name and indicate the signer's office. If a partnership,
sign in the partnership name.
Signature: _____________________ Date: ___________ Signature: _____________________ Date: ___________
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
AEW REAL ESTATE INCOME FUND
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF THE FUND
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS ON
MAY 15, 2003
The undersigned hereby appoints John E. Pelletier, Nicholas H. Palmerino and
Coleen Downs Dinneen, and each of them separately, will full power of
substitution, as proxies for the undersigned, to vote, act and consent with
respect to any and all shares of AEW Real Estate Income Fund (the "Fund"), which
the undersigned is entitled to vote at the Annual Meeting of Shareholders of the
Fund (the "Meeting") to be held at CDC IXIS Asset Management Services, Inc., 399
Boylston Street, 4th Floor CIS Conference Room, Boston, MA 02116, at 9:00 a.m.,
on Thursday, May 15, 2003, and at any continuation or adjournment thereof, with
all powers the undersigned would possess if personally present, upon such
business as may properly come before the Meeting including the matters indicated
on the reverse side.
THIS PROXY WILL BE VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY
WILL BE VOTED FOR ALL NOMINEES LISTED IN PROPOSAL 1.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR each
nominee.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement.
-------------------------------------------------------------------------------------------------------------
SHAREHOLDERS ARE URGED TO MARK, SIGN AND RETURN THIS PROXY IN THE ENVELOPE PROVIDED. PLEASE DO NOT FORGET
TO DATE THIS PROXY.
-------------------------------------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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