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Gam Funds Inc · PRES14A · For 3/31/98

Filed On 2/17/98 · SEC File 811-04062 · Accession Number 930413-98-104

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 2/17/98  Gam Funds Inc                     PRES14A     3/31/98    1:19                                     930413

Preliminary Proxy Solicitation Material -- Special Meeting · Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Preliminary Special Meeting                           19     82K

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
 Securities Exchange Act of 1934

Filed by the Registrant [ X ]                                                   
Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      

[X]  Preliminary Proxy Statement                                                
[ ]  Confidential,  for  Use  of the  Commission  Only (as  permitted  by  Rule 
14a-6(e)(2))                                                          
[ ]  Definitive Proxy Statement                                                 
[ ]  Definitive Additional Materials                                            
[ ]  Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12          

GAM Funds, Inc.         
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

--------------------------------------------------------------------------------
 (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)(4) and 0-11.   

  (1)  Title of each class of securities to which transaction applies: N/A

(2)  Aggregate number of securities to which transaction applies: N/A 

     (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): N/A

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(4)  Proposed maximum aggregate value of transaction: N/A             

(5)  Total fee paid: N/A                                              

[ ]  Fee paid previously with preliminary materials.                            

[ ]  Checkbox 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: N/A                                      

(2)  Form, Schedule or Registration Statement No.: N/A                

(3)  Filing Party: N/A                                                

(4)  Date Filed: N/A                                                  

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                                                                CB Draft 2/13/98

 GAM FUNDS, INC.

 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To the Shareholders of                                                          
GAM Funds, Inc.                                                                 

               A  Special  Meeting  of  Shareholders  of GAM  FUNDS,  INC.  (the
"Company")  will be held on March 31, 1998 at 11:00 A.M.,  at the offices of the
Company on the 25th Floor,  135 East 57th Street,  New York,  New York,  for the
following purposes:                                                             

1.     To elect directors;                                      

        2.     To eliminate the Funds' fundamental investment  restrictions with
               respect to (a)  investments in issuers with an operating  history
               of less than three  years,  (b)  investments  in issuers in which
               officers and directors of the Company or its  investment  adviser
               own more than certain specified  percentages of the securities of
               such issuer and (c) investments in interests in oil, gas or other
               mineral  exploration  or development  programs (EACH  RESTRICTION
WILL BE VOTED ON SEPARATELY);                     

        3.     To  change  from  fundamental  to   non-fundamental   the  Funds'
               investment  restrictions  with  respect  to (a)  short  sales  of
    securities and (b) investments in illiquid securities;

        4.     To ratify or reject the  selection  of  Cooper  & Lybrand LLP  as
               independent  accountants  for the  Company  for its  fiscal  year
ending December 31, 1998; and                     

        5.     To  transact  such  other  business as may  properly  come before
the meeting and any adjournments thereof.         

               The  subjects  referred to above are  discussed  in detail in the
Proxy Statement  attached to this notice.  Each shareholder is invited to attend
the Special  Meeting of  Shareholders  in person.  Shareholders of record at the
close of business on February 9, 1998 are  entitled to receive  notice of and to
vote at the meeting.  Whether or not you intend to be present at the meeting, we
urge you to fill in,  sign and  promptly  return the  enclosed  proxy or use the
toll-free  telephone  number on the proxy card to vote your shares in order that
the meeting may be held and a maximum  number of shares may be voted,  and avoid
the added expense of a second mailing to unvoted proxies.                       

February ___, 1998                                              Gordon E. Swartz
                                                         Secretary

PLEASE  INDICATE YOUR VOTING  INSTRUCTIONS  ON THE ENCLOSED  PROXY CARD.  PLEASE
DATE, SIGN AND RETURN IT IN THE ENVELOPE  PROVIDED,  WHICH IS ADDRESSED FOR YOUR
CONVENIENCE  AND NEEDS NO POSTAGE IF MAILED IN THE UNITED  STATES.  PLEASE  MAIL
YOUR PROXY PROMPTLY IN ORDER TO AVOID THE  ADDITIONAL  EXPENSE TO THE COMPANY OF
FURTHER SOLICITATION. IF YOU ARE A SHAREHOLDER OF RECORD, YOU MAY USE THE       

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TOLL-FREE NUMBER ON THE PROXY CARD TO VOTE YOUR SHARES.  IF YOUR SHARES ARE HELD
IN THE NAME OF A BANK OR OTHER HOLDER OF RECORD,  YOU WILL RECEIVE  INSTRUCTIONS
THAT YOU MUST FOLLOW IN ORDER FOR YOUR SHARES TO BE VOTED. TELEPHONE VOTING ALSO
WILL BE OFFERED TO SHAREHOLDERS OWNING STOCK THROUGH CERTAIN BANKS AND BROKERS. 

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 GAM FUNDS, INC.

135 EAST 57TH STREET
NEW YORK, NEW YORK 10022

 PROXY STATEMENT

INTRODUCTION                                                                    

        This proxy  statement and enclosed form of proxy are being  furnished in
connection with the  solicitation of proxies on behalf of the Board of Directors
of GAM Funds, Inc., a Maryland Corporation (the "Company"), for use at a Special
Meeting of Shareholders (the "Special  Meeting") to be held on March 31, 1998 at
11:00 A.M.  at the  offices  of the  Company  on the 25th  Floor,  135 East 57th
Street, New York, New York, and any adjournments  thereof,  for the purposes set
forth in the accompanying Notice of Special Meeting of Shareholders.  This proxy
statement and enclosed  form of proxy are expected to be mailed to  shareholders
of record  commencing  on or about  February  23,  1998.  The Company  currently
consists of eight Series,  GAM International  Fund, GAM Global Fund, GAM Pacific
Basin Fund, GAM Japan Capital Fund, GAM Asian Capital Fund, GAM Europe Fund, GAM
North America Fund and GAMerica  Capital Fund, which are referred to herein both
individually and collectively as the "Series".                                  

        Any proxy given pursuant to such  solicitation  and received in time for
the Special Meeting will be voted as specified in such proxy. If no instructions
are given,  proxies will be voted FOR all of the matters specified in the proxy.
The enclosed proxy is revocable by you at any time prior to the exercise thereof
by submitting a written notice of revocation or  subsequently  executed proxy to
the Secretary of the meeting. Signing and mailing the proxy will not affect your
right to give a later  proxy or to  attend  the  Special  Meeting  and vote your
shares in person.                                                               

        In  addition  to the  solicitation  of proxies by mail,  the Company may
utilize the  services  of its  officers,  who will not receive any  compensation
therefor,  to solicit  proxies by  telephone,  by telegraph  and in person.  The
Company may also  request  brokers,  custodians,  nominees  and  fiduciaries  to
forward proxy material to the beneficial owners of shares of record. The cost of
soliciting proxies will be paid by the Company.                                 

        On February 9, 1998, the date for determination of shareholders entitled
to receive  notice of and to vote at the Special  Meeting  and any  adjournments
thereof,  there were issued and outstanding  the following  numbers of shares of
each of the  respective  Series  of the  Company:  65,653,036.472  shares of GAM
International  Fund,  3,936,047.129  shares of GAM  Global  Fund,  2,401,381.875
shares of GAM Pacific  Basin  Fund,  3,919,927.845  shares of GAM Japan  Capital
Fund, 146,770.724 shares of GAM Asian Capital Fund,  2,992,190.134 shares of GAM
Europe Fund,  1,060,528.446  shares of GAM North  America  Fund and  327,845.264
shares of GAMerica  Capital  Fund.  Each whole share is entitled to one vote and
any fractional  shares  entitled to a fractional  vote.  Taken  together,  these
shares constituted all of the Company's outstanding securities as of February 9,
1998.                                                                           

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PROPOSAL ONE:                 ELECTION OF DIRECTORS                             

        Four directors, constituting the entire Board of Directors, are proposed
to be elected at the Special  Meeting,  to hold office until the next special or
annual  meeting  and until  their  successors  shall have been duly  elected and
qualified.  If  authority is granted in the  accompanying  proxy to vote for the
election  of  directors,  it is  the  intention  of  the  persons  named  in the
accompanying  proxy  to vote at the  Special  Meeting  for the  election  of the
nominees  named  on  page 3 as the  entire  Board  of  Directors.  If any of the
nominees are  unavailable to serve as directors,  the persons named in the proxy
will vote the proxies for such other persons as they, in their  discretion,  may
choose.  The Company presently knows of no reason why any of the nominees listed
on the table on page 3 will be unable to serve if elected. Each person listed on
the table on page 3 has consented to being named in this Proxy Statement and has
indicated a willingness to serve as a director if elected.                      

        The  table on page 3  contains  information  on the  nominees  and their
beneficial ownership of shares of the Company.                                  

        During the fiscal year ended December 31, 1997,  there were four regular
meetings of the Board of Directors.  Each director  attended at least 75% of the
Board meetings  except for Robert J. McGuire,  who was not a director during the
fiscal  year  ended  December  31,  1997.  There  are no  audit,  nominating  or
compensation committees of the Board of Directors.                              

        Each independent  director of the Company  receives annual  compensation
from the  Company of $5,000 per year plus $500 for each  meeting of the Board of
Directors  attended.  Each  director  is  reimbursed  by the  Company for travel
expenses incurred in connection with attendance at Board of Directors  meetings.
The interested Directors of the Company do not receive any compensation from the
Company.  Mr. de Botton is a  director  who is an  "interested  person".  Roland
Weiser and George Landau do not at present receive any other  compensation  from
any  affiliate  of the  Company,  including  any other  fund in the GAM group of
funds.                                                                          

        There have been no purchases or sales of securities of GAM International
Management  Limited and Fayez Sarofim & Co., which serve as investment  advisers
to the Company, or the parents or subsidiaries of either, since the beginning of
the most recently  completed fiscal year by any director or nominee for election
as a director of the Company.                                                   

        There are no material pending legal proceedings to which any director or
nominee for director or affiliated person of such director or nominee is a party
adverse  to the  Company  or any of its  affiliated  persons  or has a  material
interest adverse to the Company or any of its affiliated persons.               

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES.                                                           

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                                                        · Enlarge/Download Table


                           SHARES OF GAM FUNDS, INC.,                                                                    
                         BENEFICIALLY OWNED DIRECTLY OR                                                                  
                       INDIRECTLY AS OF DECEMBER 31, 1997                                                                

   NAME AND                                                                       YEAR                                   
 POSITION WITH                                                                    FIRST      INTER              PACIFIC  
THE COMPANY OF                             PRINCIPAL OCCUPATIONS                 BECAME    NATIONAL  GLOBAL      BASIN   
 EACH NOMINEE                             DURING PAST FIVE YEARS                 IRECTOR     FUND     FUND       FUND    
 ------------                             ----------------------                 -------     ----     -----      ----    
                                                                                                                         
Gilbert de Botton                                                                                                        
Director and President                                                                                                   
(age 63)(1)(2)                                                                                                           

Chairman, Global Asset Management Limited,  investment adviser, 1983 to present;                                         
Chairman,  Global Asset  Management  (U.K.) Limited,  holding  company,  1983 to                                         
present; Vice Chairman,  Global Asset Management (USA) Inc., investment adviser,                                         
1989 to present.                                                                                                         

                                                                                  1984    139,047     119,829    209,942 
                                                                                             31.7%       62.0%      87.8%

George W. Landau                                                                                                         
Director                                                                                                                 
(age 77)                                                                                                                 

President, Americas Society and the Council of the Americas,                                                             
1985-1993; Chairman, Latin America Advisory Board of                                                                     
Coca-Cola International, 1988 to present.                                                                                

                                                                                  1994                                   

Roland Weiser                                                                                                            
Director                                                                                                                 
(age 66)(3)                                                                                                              

Chairman, Intervista, business consulting, 1984 to present.                                                              

                                                                                  1988         34       1,058        651 
                                                                                              0.0%        0.6%       0.3%

Robert J. McGuire,                                                                                                       
Director                                                                                                                 
(age 62)                                                                                                                 

Attorney/Consultant, Morvillo, Abramowitz, Grand, Iason & Silberberg, P.C., 1998                                         
to present; President/Chief Operating Officer, Kroll Associates 1989-1997.                                               

Directors and Officers                                                                                                   
of the Company as a                                                                                                      
Group                                                                                                                    

                                                        · Enlarge/Download Table


   NAME AND                                                                                         
 POSITION WITH                                                                                      
THE COMPANY OF                             PRINCIPAL OCCUPATIONS                                    
 EACH NOMINEE                             DURING PAST FIVE YEARS                                    
 ------------                             ----------------------                              NORTH 
                                                                                  EUROPE     AMERICA
                                                                                   FUND       FUND  
                                                                                   ----       ----  
                                                                                                    
Gilbert de Botton                                                                                   
Director and President                                                                              

(age 63)(1)(2)                                                                                      

Chairman, Global Asset Management Limited,  investment adviser, 1983 to present;  155,903   12,060  
Chairman,  Global Asset  Management  (U.K.) Limited,  holding  company,  1983 to    91.2%     44.4% 
present; Vice Chairman,  Global Asset Management (USA) Inc., investment adviser,                    
1989 to present.                                                                                    

George W. Landau                                                                                    
Director                                                                                            
(age 77)                                                                                            

President, Americas Society and the Council of the Americas,                                        
1985-1993; Chairman, Latin America Advisory Board of                                                
Coca-Cola International, 1988 to present.                                                           

Roland Weiser                                                                                       
Director                                                                                            
(age 66)(3)                                                                                         

Chairman, Intervista, business consulting, 1984 to present.                                         

Robert J. McGuire,                                                                   659         0  
Director                                                                             0.4%           
(age 62)                                                                                            

Attorney/Consultant, Morvillo, Abramowitz, Grand, Iason & Silberberg, P.C., 1998                    
to present; President/Chief Operating Officer, Kroll Associates 1989-1997.                          

Directors and Officers                                                             156,562   12,060 
of the Company as a                                                                  91.6%     44.4%
Group                                                                                               


[TO BE UPDATED}                                                                 

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Notes to Table                                                                  

(1)  Mr. de Botton is an "interested  person" of the Company,  as defined in the
     Investment  Company Act of 1940 (the "1940 Act").  Lorelock S.A.,  which is
     controlled by a  discretionary  trust of which Mr. de Botton is a potential
     beneficiary,  owns  approximately  70% of the voting  securities  of Global
     Asset Management Ltd., which controls GAM International  Management Limited
     (the "Adviser")  through its  wholly-owned  subsidiaries.  Mr. de Botton is
     also a director  of other  investment  funds  organized  outside the United
States in the GAM group of funds.                                     

(2)  All  shares  indicated  as owned  beneficially  by Mr.  Gilbert  de Botton,
     President and Director of the Company,  are owned of record by clients,  or
     custodians or nominees for clients,  of the Adviser and its affiliates,  or
     by employee  benefit  plans for the benefit of employees of the Adviser and
     its affiliates.  Entities controlled by Global Asset Management Ltd. may be
     deemed to have  investment or voting power over such shares.  Mr. de Botton
     is the Chairman of Global Asset Management Ltd. and may be a beneficiary of
     a discretionary trust which indirectly owns approximately 70% of the voting
     securities of Global Asset  Management Ltd. As a result,  Mr. de Botton may
     be deemed to have shared voting or investment  power over such shares.  Mr.
de Botton disclaims beneficial ownership of such shares.              

(3)  Does not Include [431 shares of GAM  International  Fund, 690 shares of GAM
     Global Fund, 524 shares of GAM Pacific Basin Fund, 659 shares of GAM Europe
     Fund, and 67 shares of GAM North America Fund] owned by Mr. Weiser's spouse
     and children,  which may be deemed to be beneficially  owned by Mr. Weiser.
Mr. Weiser disclaims beneficial ownership of such shares.             

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PROPOSAL TWO:                  APPROVAL OR DISAPPROVAL OF                       
                     ELIMINATION OF CERTAIN OF THE COMPANY'S
                 FUNDAMENTAL INVESTMENT RESTRICTIONS

        The Company has adopted fundamental investment  restrictions that govern
generally the operations of the Funds.  Investment  restrictions that are deemed
fundamental may not be changed  without a vote of the outstanding  shares of the
Company. The Company's current investment  restrictions are set forth in Exhibit
A to this Proxy Statement.                                                      

        At a meeting held on January 28, 1998,  the Board of Directors  approved
the elimination of certain of the Company's fundamental investment  restrictions
as described below. The proposed elimination of these investment restrictions is
not expected to affect materially the current operations of the Funds.          

        A number  of the  Company's  fundamental  investment  restrictions  were
adopted by the  Company  when it  commenced  operations  in order to comply with
various  state  blue sky  regulations.  One of the  provisions  of the  National
Securities  Markets  Improvements Act, which was enacted in 1996, is the federal
preemption of substantive  state  regulation of securities  issued by investment
companies  registered with the Securities and Exchange  Commission ("SEC") under
the Investment Company of 1940, as amended (the "1940 Act"). As a result of this
new law,  states  may no longer  impose  their own  investment  restrictions  or
require   additional   disclosure  in  offering  documents  as  a  condition  of
registration in that state. Management of the Company believes that the existing
investment restrictions that are proposed to be eliminated may inhibit effective
portfolio  management  without  any  concomitant  benefit to the  Company or its
shareholders.  Moreover,  management  believes that the investment  restrictions
will be modernized by the proposed  deletions and will be more  consistent  with
more recently organized mutual funds.                                           

        Approval  of the  proposed  elimination  of  each  of  these  investment
restrictions  will require a separate vote of shareholders,  and it is therefore
possible that elimination of one or more of the investment  restrictions will be
approved  but  the  elimination  of all  of  them  will  not  be  approved.  See
"Additional  Information"  for the vote required for approval.  The text of each
investment  restriction  that is proposed to be  eliminated  is set forth below,
followed  by a  brief  commentary.  The  text of all  the  Company's  investment
restrictions is set forth in Exhibit A to this Proxy Statement.                 

A.       INVESTMENTS IN "UNSEASONED" ISSUERS                                    

        The  Company  is  proposing  the  elimination  of  current   fundamental
investment  restriction 5 in the Company's  Statement of Additional  Information
(see Exhibit A to this Proxy Statement) which reads as follows:                 

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Each Fund may not:                                              
        Invest more than 10% of the value of its total assets in  securities  of
companies  which,  with  their  predecessors,  have a record of less than  three
years' continuous operation.                                                    

        COMMENTARY:  Restriction 5 limits investment in "unseasoned"  issuers to
10% of a Fund's total assets. This limitation was required by certain state blue
sky statutes at the time of the Company's  formation but is no longer  required.
Since unseasoned issuers do not have as long an operating history as more mature
issuers, they may present a greater risk of investment than more mature issuers.
While the proposed deletion of this investment  restriction eliminates any legal
restriction  on investing in unseasoned  issuers,  each Fund's  advisor will, of
course, consider carefully all investments in recently organized companies.     

B.      PURCHASE OF SECURITIES OF ISSUERS IN WHICH  OFFICERS OR DIRECTORS OF THE
COMPANY OR ITS  INVESTMENT  ADVISER OWN MORE THAN A SPECIFIED  PERCENTAGE OF THE
SECURITIES OF SUCH ISSUER                                                       

        The  Company  is  proposing  the  elimination  of  current   fundamental
investment  restriction 6 in the Company's  Statement of Additional  Information
(see Exhibit A to this Proxy Statement) which reads as follows:                 

Each Fund may not:                                              
        Purchase or retain the  securities  of any issuer if any of the officers
or directors of the Company or its  investment  adviser owns  individually  more
than 1/2 of 1% of the  securities  of such issuer and together such officers and
directors  owning more than 1/2 of 1% own more than 5% of the securities of such
issuer.                                                                         

        COMMENTARY:  Restriction 6 limits  investments by the Funds in companies
in which an officer or director of the Company or one of its investment advisers
is also an  investor.  This  limitation  was  imposed by certain  state blue sky
statutes at the time of the Company's  formation but is no longer required.  The
restriction  was  intended to protect  against  potential  conflicts of interest
involving  officers  and  directors of the Company and the  investment  adviser.
However,  the provisions of the 1940 Act and the rules adopted by the SEC, which
impose  substantial  restrictions on the extent to which the Funds may engage in
transactions  with entities  related to officers or directors of the Company and
its   investment   advisers,   are   sufficient  to  protect  the  interests  of
shareholders.                                                                   

C.      INVESTMENTS  IN INTERESTS IN OIL, GAS OR OTHER  MINERAL  EXPLORATION  OR
DEVELOPMENT PROGRAMS                                                            

        The  Company  is  proposing  the  elimination  of  current   fundamental
investment  restriction 12 in the Company's Statement of Additional  Information
(see Exhibit A to this Proxy Statement) which reads as follows:                 

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 -7-

Each Fund may not:                                              
        Invest  in  interests  in  oil,  gas or  other  mineral  exploration  or
development  programs  (including  leases),   although  it  may  invest  in  the
securities or companies which invest in or sponsor such programs.               

        COMMENTARY:  The Company's current fundamental investment restriction 12
in the Company's Statement of Additional  Information  prohibits  investments in
oil, gas or other mineral exploration or development programs.  This prohibition
was  required  by certain  state blue sky  statutes in effect at the time of the
Company's  formation but is no longer required to be as broad. None of the Funds
has any current  intention to invest in  interests in oil, gas or other  mineral
exploration or development programs.  Current fundamental investment restriction
16  separately  prohibits   investments  in  commodities  or  commodity  futures
contracts,  except  that each  Fund may  enter  into  forward  foreign  exchange
contracts  and may  invest  up to 5% of its net  assets  in  initial  margin  or
premiums for futures contracts or options on futures contracts.                 

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE ELIMINATION
OF EACH OF THE FOREGOING FUNDAMENTAL INVESTMENT RESTRICTIONS.                   

PROPOSAL THREE:  APPROVAL OR DISAPPROVAL OF CHANGING                            
THE STATUS OF CERTAIN INVESTMENT RESTRICTIONS 
FROM FUNDAMENTAL TO NON-FUNDAMENTAL           

        As discussed  above,  a number of the Company's  fundamental  investment
restrictions  were  adopted by the Company when it was formed in order to comply
with  various  state  blue  sky  regulations.  Recent  federal  legislation  has
substantially  eliminated the states' authority to regulate investment companies
and, accordingly, certain investment restrictions are no longer required.       

        The investment  restrictions  listed below are not required to be stated
as fundamental investment restrictions.  Changing the status of these investment
restrictions from fundamental to  non-fundamental  would provide  flexibility in
the future if the Board of Directors  determine that revisions were  appropriate
as a result of changes in investment,  industry or regulatory conditions since a
non-fundamental  investment restriction may be revised by the Board of Directors
without shareholder  approval.  Changing the status of the following  investment
restrictions  from  fundamental to  non-fundamental  would enable the Company to
avoid  the  expense  of a  shareholder  solicitation  in the  event the Board of
Directors wanted to revise them.                                                

A.      SHORT SALES                                                             

        The Company is proposing the deletion of current fundamental  investment
restriction 3 in the Company's Statement of Additional  Information (see Exhibit
A to this  Proxy  Statement)  and  substituting  the  following  non-fundamental
investment restriction:                                                         

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Each Fund may not:                                              
        Make short sales of  securities  or purchase any  securities  on margin,
except  for such  short-term  credits  as are  necessary  for the  clearance  of
transactions.                                                                   

        COMMENTARY:  The Company's current fundamental  investment restriction 3
was  required by certain  state blue sky  statutes at the time of the  Company's
inception   but  is  no   longer   required.   The   proposed   restriction   is
non-fundamental.  At the present  time,  the  Company  uses  certain  derivative
instruments as a substitute for short sales of equity and debt  securities.  The
Board  of  Directors  may  in  the  future  decide  to  change  this  investment
restriction in order to permit the Funds to enter into short sales of equity and
debt securities for investment purposes.                                        

        A short  sale is a  transaction  in which the  Company  sells a security
which it does not own at the time of sale in  anticipation  of a decline  in the
market value of that security and future  repurchase of that security at a lower
price.  In order to complete  such a  transaction,  the Company  must borrow the
security in order to make delivery to the buyer.  The Company is then  obligated
to replace the  security  borrowed by  purchasing  it at the market price at the
time of replacement.  Until the security is replaced, the Company is required to
pay to the lender any  dividends or interest  which accrue  during the period of
the  loan.  The  Company  may also  have to pay a  premium  in  order to  borrow
securities.                                                                     

        A short sale will result in a gain if the price of the  securities  sold
short  is  greater  at the  time of the  short  sale  than at the  time at which
securities  are  repurchased to replace the shares  borrowed.  A short sale will
result in a loss if the price of the  security  initially  sold is less than the
price paid to repurchase  the security.  Any gain is decreased,  and any loss is
increased,  by the  amount of any  premium,  dividend,  interest  and  brokerage
commissions  which  the  Company  may be  required  to pay with  respect  to the
borrowed securities.                                                            

B.      INVESTMENT IN ILLIQUID SECURITIES                                       

        The Company is proposing the deletion of current fundamental  investment
restriction 13 in the Company's Statement of Additional Information (see Exhibit
A to this  Proxy  Statement)  and  substituting  the  following  non-fundamental
investment restriction:                                                         

Each Fund may not:                                              
        Invest more than 15% of the Fund's net assets in securities which cannot
be readily resold to the public because of legal or contractual  restrictions or
because there are no market quotations  readily available or in other "illiquid"
securities  (including   non-negotiable   deposits  with  banks  and  repurchase
agreements of a duration of more than seven days).                              

        COMMENTARY: Fundamental investment restriction 13 is required by the SEC
under the 1940 Act. The SEC has modified its position restricting investments by
mutual funds in illiquid  securities in recent years, and has indicated recently
that it is  continuing  to review its  restrictions  in this area.  Accordingly,
management of the Company desires to have maximum flexibility to                

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be able to amend its investment  restrictions  in response to any future changes
in SEC rules and policies and market developments.                              

        An open-end  investment  company,  including each of the Funds,  may not
hold a significant amount of illiquid securities because these securities may be
difficult to value  accurately and because it is possible that the Company would
have difficulty  liquidating such securities if necessary in order to satisfy in
a timely manner  requests to redeem shares of the Fund. The  securities  markets
are evolving,  however,  and new types of  instruments  have developed that make
each Fund's current policies on illiquid investments overbroad and unnecessarily
restrictive.  In addition,  the markets for some types of securities  are almost
exclusively institutional -- repurchase agreements, commercial paper, many types
of municipal  securities and some corporate bonds and notes.  These  instruments
are often exempt from  registration  under the U.S.  securities  laws or sold in
transactions not requiring registration.  Consequently,  institutional investors
depend on the  issuer's  ability  to honor a demand for  repayment  in less than
seven days or on an  efficient  institutional  market in which the  unregistered
security can readily be resold.  Management believes that the existence of legal
or contractual restrictions on resale to the general public does not necessarily
determine the liquidity of these investments.                                   

THE BOARD OF DIRECTORS  RECOMMENDS THAT THE  SHAREHOLDERS  VOTE FOR CHANGING THE
STATUS OF EACH OF THE FOREGOING  INVESTMENT  RESTRICTIONS  FROM  FUNDAMENTAL  TO
NON-FUNDAMENTAL.                                                                

PROPOSAL FOUR:   SELECTION OF INDEPENDENT ACCOUNTANTS                           

        Coopers  &  Lybrand  LLP  ("Coopers  &  Lybrand"),  1301  Avenue  of the
Americas,  New York,  New York 10019,  independent  accountants  for the Company
since 1996, has examined and reported on the Company's financial  statements for
the fiscal year ended  December 31, 1997.  In  connection  therewith,  Coopers &
Lybrand has  reviewed  certain  filings of the Company with the SEC and provided
consultation on matters related to accounting and financial reporting. Coopers &
Lybrand has also provided  non-audit services in preparing the Company's federal
and state corporate tax returns.                                                

        At a meeting held on January 28, 1998, the Board of Directors, including
a majority  of the  directors  who are not  interested  persons of the  Company,
selected Coopers & Lybrand to act as independent accountants for the Company for
the fiscal year ending  December 31, 1998,  subject to ratification or rejection
of the selection by the  shareholders  of the Company as required under the 1940
Act.  The Company is advised  that neither the firm of Coopers & Lybrand nor any
of its  members has any direct or indirect  material  financial  interest in the
Company.                                                                        

        A representative  of Coopers & Lybrand is expected to attend the Special
Meeting and will have the  opportunity  to make a statement if he or she desires
and to respond to questions from shareholders.                                  

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THE  BOARD  OF  DIRECTORS   RECOMMENDS  THAT  THE  SHAREHOLDERS   VOTE  FOR  THE
RATIFICATION  OF THE SELECTION OF COOPERS & LYBRAND AS  INDEPENDENT  ACCOUNTANTS
FOR THE COMPANY                                                                 

SUPPLEMENTAL INFORMATION

PRINCIPAL HOLDERS OF SECURITIES                                                 

               As of December 31, 1997,  the following  persons may be deemed to
own beneficially more than 5% of the outstanding shares of any Fund.            

                                                        · Enlarge/Download Table

                                Inter-            Pacific             North           
                               national  Global    Basin    Europe   America  Total   
                                                                                      
Gilbert de Botton1              139,047  119,829   209,942  155,903   12,060   636,781
12 St. James's Place              31.7%    62.0%     87.8%    91.2%    44.4%     59.6%
London SW1A 1NX                                                                       
England                                                                               

Brown University                     --       --    24,414    9,843       --    34,256
c/o Norstar Trust Co.                --       --     10.2%     5.8%       --      3.2%
One East Ave.                                                                         
Rochester, NY 14638                                                                   

Caxton Partners                   2,905    4,943     9,073   12,654       --    29,575
101 Morgan Lane                    0.7%     2.6%      3.8%     7.4%       --      2.8%
Plainsboro, NJ  08536                                                                 

Demvest Equities                  4,994       --    12,796    4,317       --    22,107
119 East 63rd St.                  1.1%       --      5.4%     2.5%       --      2.1%
New York, NY  10021                                                                   

Fayez Sarofim & Co.                 853    4,535        --       --   14,332    19,720
Two Houston Center                 0.2%     2.3%        --       --    52.8%      1.8%
Suite 2907                                                                            
Houston TX 77010                                                                      

--------                                                                              
1   See footnote (2) on page 4 above.                                                 

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                                                                · Download Table

                              Inter-            Pacific             North         
                             national  Global    Basin    Europe   America  Total 
                                                                                  
Gordon P. Getty                51,221   45,064    --       --       --      96,285
c/o Marc E. Leland              11.7%    23.3%    --       --       --        9.0%
Watergate 500 Ste. 953                                                            
600 New Hampshire Ave. N.W.                                                       
Washington, DC 20037                                                              

Gordon P. Getty                    --   19,806    28,380   24,513       --  72,698
Family Trust                       --    10.2%     11.9%    14.3%       --    6.8%
600 New Hampshire Ave., N.W.                                                      
Suite 953                                                                         
Washington, D.C. 20037                                                            

Esmond Harmsworth              5,124%       --     8,881    8,610       --  22,614
359 Beacon Street                1.2%       --      3.7%     5.0%       --    2.1%
Boston, MA  02116                                                                 

Helen Hotze Haas Unitrust       5,240    8,579     9,781   10,519       --  34,119
Bank of New York                 1.2%     4.4%      4.1%     6.2%       --    3.2%
706 Madison Avenue                                                                
New York, NY  10016                                                               

S. Klein Decl. Trust            2,981    2,674     4,545    4,883    1,800  16,883
c/o Rothschild Bank AG           0.7%     1.4%      1.9%     2.9%     6.6%    1.6%
Zollikerstrasse 181                                                               
8034 Zurich                                                                       
Switzerland                                                                       

Doris J. Lockhart               1,613       --     2,257    2,597    1,662   8,129
2 Hayes Mews                     0.4%       --      0.9%     1.5%     6.1%    0.8%
London, W1X 7R5                                                                   
England                                                                           

Lone Star Industries           38,096       --        --       --       --  38,096
c/o Northern Trust Co.           8.7%       --        --       --       --    3.6%
P.O. Box 92956                                                                    
Chicago, IL 60675                                                                 

Long Island University         15,963       --        --       --       --  15,963
University Center                3.6%       --        --       --       --    1.5%
Brookville, NY 11548                                                              

MAC & Co.                      25,591       --        --       --       --  25,591
Mellon Bank                      5.8%       --        --       --       --    2.4%
P.O. Box 320                                                                      
Pittsburgh, PA  15230                                                             

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                                                        · Enlarge/Download Table

                                                                                                  
Georges Marciano Trust           21,564        19,865         28,041           --      --   69,471
9756 Wilshire Blvd.                4.9%         10.3%          11.7%           --      --     6.5%
Beverly Hills, CA  90212                                                                          

Memorial Sloan Kettering          5,730        21,352             --           --      --   27,082
1245 York Avenue                   1.3%         11.0%             --           --      --     2.5%
New York, NY  10021                                                                               

Nadart                           28,646            --             --           --      --   28,646
c/o Harry G. Rooks                 6.5%            --             --           --      --     2.7%
8400 West Park Drive                                                                              
McLean, VA  22102                                                                                 

All officers and                139,084       120,893        210,593      156,562  12,060  639,191
directors2                        31.7%         62.5%          88.0%        91.6%   44.4%    59.8%

[TO BE UPDATED]                                                                                   

-------- 2 Includes  shares which may be deemed to be owned  beneficially by Mr.                  
de Botton as described in footnote (2) on page 4 above.                                           

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Executive Officers of the Company                                               

         The  executive  officers  of the  Company,  all of  whom  serve  at the
pleasure of the Board of Directors,  and their principal  occupations during the
past five years are as follows:                                                 

      Gilbert de Botton, President and Chairman of the Board (see page 3).

         Kevin J.  Blanchfield (age 43), who has served as Vice President of the
Company  since  December  1993,  who was elected as  Treasurer in 1997 and whose
principal  occupations  during  the  last  five  years  have  been  Senior  Vice
President-Finance  and  Administration,  Lazard Freres & Co., 1991 to 1993;  and
Senior Vice President-Finance, J&W Seligman & Co. Inc., prior to 1991.          

         Gordon E Swartz  (age 50) who has served as  Secretary  and  Compliance
Officer since 1997 and whose  principal  occupations  during the past five years
were  Attorney/Consultant  for Financial Markets International in 1996 and 1997;
Vice  President  and Counsel for  Natwest  Bancorp  from 1994 to 1996 and Senior
Associate Counsel and Vice President of The Chase Manhattan Bank NA from 1990 to
1994.                                                                           

         John L. Hogan (age 30) who was elected Assistant  Treasurer in 1996 and
whose  principal  occupations  during the past five  years  have been  Assistant
Manager, Fund Reporting Manager at Brown Brothers Harriman since 1995 and Mutual
Fund Administration Supervisor at New England Funds, L.P. from 1988 to 1995.    

         Teresa B. Riggin (age 38) who was elected  Assistant  Secretary in 1994
and  whose  principal  occupations  during  the past five  years  have been Vice
President-Administration  and  Assistant  Secretary of Global  Asset  Management
(USA) Inc.,  Assistant  Secretary of GAM Services Inc. and GAM Investments  Inc.
since 1994; and Vice President at Lazard Freres & Co. from 1992 to 1994.        

         Catherine  M. Vacca (age 40) who was elected  Assistant in Secretary in
1996 and whose principal  occupation  during the past five years has been Deputy
Manager, Fund Administration  Manager at Brown Brothers Harriman since 1995; and
Vice  President and Director of  Compliance  at the Boston  Company from 1988 to
1995.                                                                           

         Global Asset Management (USA) Inc., GAM Investments  Inc., GAM Services
Inc.,  Global Asset Management GAM (Schweiz) AG, Global Asset Management  (H.K.)
Limited,  Global Asset  Management  (Asia)  Limited and Global Asset  Management
(U.K.) Limited are all controlled by Global Asset  Management  Ltd.,  which also
controls GAM International Management Ltd.                                      

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 SHAREHOLDER PROPOSALS

         The Company does not ordinarily hold annual  meetings of  shareholders.
Any shareholder  desiring to submit proposals for inclusion in a proxy statement
for a  subsequent  shareholder  meeting  should send  written  proposals  to the
Company at GAM Funds,  Inc., 135 East 57th Street, New York, New York 10022, and
be  received  at a  reasonable  time  prior  to  the  date  of  the  meeting  of
shareholders to be considered for inclusion in the materials for the meeting.   

ADDITIONAL INFORMATION

                  The  presence  in  person  or by  proxy  of the  holders  of a
majority  of the  outstanding  voting  shares  of the  Company  is  required  to
constitute  a quorum  for the  Special  Meeting.  Approval  of the  election  of
Directors of the Company  (Proposal 1) will  require the  affirmative  vote of a
plurality of the votes cast at the Special Meeting.  Approval of the proposal to
eliminate the Funds'  fundamental  investment  restrictions  with respect to (a)
investments in issuers with an operating  history of less than three years,  (b)
investments  in issuers in which  officers  and  directors of the Company or its
investment adviser own more than certain specified percentages of the securities
of such issuer and (c)  investments  in interests  in oil, gas or other  mineral
exploration or development programs (Proposal 2) and the proposal to change from
fundamental to non-fundamental  the Funds' investment  restrictions with respect
to (a) short sales of securities and (b)  investments  in restricted  securities
(Proposal 3) will require the  affirmative  vote of the holders of a majority of
the outstanding shares of the Company. A majority of the outstanding shares of a
company is defined  under the 1940 Act as the lesser of (a) 67% of the shares of
the  company  present  at a  meeting  if the  holders  of more  than 50% of such
company's  outstanding shares are present in person or by proxy or (b) more than
50% of the  company's  outstanding  shares.  Ratification  of the  selection  of
Coopers & Lybrand as  independent  accountants  (Proposal  4) will  require  the
affirmative  vote of a majority  of the votes cast at the Special  Meeting.  For
purposes of determining the presence of a quorum for transacting business at the
Special Meeting,  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 persons entitled to vote shares on a particular matter
with respect to which the brokers or nominees do not have  discretionary  power)
will be treated as shares that are  present  but which have not been voted.  For
this reason,  abstentions  and broker  non-votes  will have the effect of a "no"
vote for purposes of obtaining the requisite approval of each proposal.         

 OTHER MATTERS

         Management  does not know of any matters to be presented at the Special
Meeting  other than those stated and described in this Proxy  Statement.  If any
other business should come before the meeting,  the proxies will vote thereon in
accordance with their best judgment.                                            

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         If you cannot attend the Special Meeting in person, please complete and
sign the  enclosed  proxy and  return  it in the  envelope  provided  or use the
toll-free  telephone  number in the proxy  card to vote your  shares so that the
meeting may be held and action  taken on the matters  described  herein with the
greatest possible number of shares participating.                               

Dated:   February ___, 1998                                                     

         IT  IS  IMPORTANT  THAT  PROXIES  BE  RETURNED   PROMPTLY.   THEREFORE,
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON ARE URGED
TO  COMPLETE,  SIGN,  DATE AND  RETURN THE PROXY  CARD IN THE  ENCLOSED  STAMPED
ENVELOPE.

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This PRES14A Filing	Date	First	Last	Other Filings

	12/31/97	6	14	N-30D, NSAR-B, 24F-2NT
	1/28/98	9	13
	2/9/98	3	5
Filed On / Filed As Of	2/17/98
	2/23/98	5
For The Period Ended	3/31/98	3	5	DEFS14A
	12/31/98	3	13	N-30D, NSAR-B, 24F-2NT

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Gam Funds Inc · PRES14A · For 3/31/98

Filed On 2/17/98 · SEC File 811-04062 · Accession Number 930413-98-104

Preliminary Proxy Solicitation Material -- Special Meeting · Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Preliminary Proxy Solicitation Material -- Special Meeting · Schedule 14A
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