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Wanger Advisors Trust · PRES14A · For 9/27/00

Filed On 7/7/00 4:22pm ET · SEC File 811-08748 · Accession Number 950131-0-4275

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

 7/07/00  Wanger Advisors Trust             PRES14A     9/27/00    1:31                                     Donnelley R R & S..03/FA

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

Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     Preliminary Notice & Proxy Statement                  31    103K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Factors Considered by the Board Information about WAM Introduction Investment Advisory Agreements, The Liberty Wanger Asset Management, L.P Other Investment Companies Advised by WAM Other Proposed Changes to the Funds Quorum, Voting at the Meeting and Adjournment Revoking a Proxy The Investment Advisory Agreements Wanger Advisors Trust
1	1st Page
"	Wanger Advisors Trust
2	Liberty Wanger Asset Management, L.P
4	Introduction
8	The Investment Advisory Agreements
"	Factors Considered by the Board
12	Other Proposed Changes to the Funds
14	Information about WAM
"	Other Investment Companies Advised by WAM
19	Revoking a Proxy
20	Quorum, Voting at the Meeting and Adjournment

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UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION  
WASHINGTON, D.C. 20549  

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:                                                      

[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 Rule 14a-11(c) or Rule 14a-12.             

WANGER ADVISORS TRUST 
--------------------------------------------------------------------------------
(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)(1) and 0-11.   

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

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

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

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

(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):

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

(4) Proposed maximum aggregate value of transaction:                  

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

(5) Total fee paid:                                                   

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

[_]  Fee paid previously with preliminary materials.                            

[_]  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:                                           

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

(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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Wanger Advisors Trust 
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606-5016

1-800-4-WANGER

                                                                 [July 24], 2000

Dear Shareholder:                                                               

  You are cordially invited to attend a special meeting of shareholders of
Wanger Advisors Trust which will be held on September 27, 2000 at 9:00 a.m.,    
Central time, at the offices of Wanger Asset Management, L.P. ("WAM"), 227 West 
Monroe Street, Suite 3000, Chicago, Illinois 60606.                             

    The primary purpose of the meeting is to ask you to vote on a proposed new
investment advisory agreement between the Trust (on behalf of each of Wanger    
U.S. Small Cap, Wanger International Small Cap, Wanger Twenty and Wanger Foreign
Forty) and Wanger Asset Management, L.P. ("WAM") operating as a wholly-owned    
subsidiary of Liberty Financial Companies, Inc., ("LFC") and under its new name,
Liberty Wanger Asset Management, L.P.                                           

Liberty Wanger Asset Management, L.P. will be the name of WAM after a 
pending transaction that will result in WAM becoming a wholly-owned subsidiary  
of LFC. You are being asked to approve the proposed new investment advisory     
agreement so that the merger can be completed and the management of each Fund   
can continue uninterrupted after the transaction. The proposed new investment   
advisory agreement is substantially similar to the Trust's current investment   
advisory agreements. The investment advisory fees that each Fund pays will stay 
the same. The portfolio managers managing your Fund are expected to continue to 
do so after the merger, following the same investment strategies and objectives 
currently in place.                                                             

Your vote is important. The board encourages you to read the enclosed 
materials carefully. The board has approved the proposed new investment advisory
agreement and recommends that you approve it. Please complete, sign and date the
enclosed proxy card and return it in the enclosed postage paid return envelope. 
This will ensure that your vote is counted, even if you can't attend the meeting
in person.                                                                      

If you prefer, you may vote by telephone with a toll-free call to the 
telephone number that appears on your proxy card or voting instructions or to   
our proxy solicitor, D.F. King & Co., at 800-769-5414. You may also vote by     
faxing the enclosed card to the number that appears on your proxy card. It is   
important that proxies be voted promptly. Please call D.F. King & Co. at        
800-769-5414 with any questions about voting.                                   

Sincerely,      

Ralph Wanger    
President       

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Wanger Advisors Trust 
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606-5016
1-800-4-WANGER

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 
September 27, 2000

  A special meeting of shareholders of Wanger Advisors Trust ("WAT" or the
"Trust") will be held at the offices of Wanger Asset Management, L.P. ("WAM"),  
227 West Monroe Street, Suite 3000, Chicago, Illinois 60606, at 9:00 a.m.,      
Central time, on September 27, 2000. At the meeting, shareholders will be asked 
to vote on the following proposals:                                             

 1.  To approve a proposed new investment advisory agreement between the
       Trust (on behalf of Wanger U.S. Small Cap, Wanger International Small
      Cap, Wanger Twenty and Wanger Foreign Forty) and WAM, operating as a
        wholly-owned subsidiary of Liberty Financial Companies, Inc. and under
       its new name, Liberty Wanger Asset Management, L.P., on substantially
similar terms as the current investment advisory agreements;  

     2.  To ratify the selection of Ernst & Young LLP as the Trust's independent
      public accountants for the fiscal year ending December 31, 2000; and

    3.  To transact any other business that properly comes before the meeting.

 Shareholders of record as of the close of business on July 21, 2000 are
entitled to vote at the meeting (or any adjournments of the meeting). This proxy
statement and proxy card are being mailed to shareholders on or about           
[July 28], 2000.                                                                

                  By Order of the Board of Trustees,

Steven A. Radis 
Secretary       

[July 24], 2000                                                                 
Chicago, Illinois                                                               

--------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE  
COMPLETE AND RETURN THE ENCLOSED PROXY CARD(S). YOU MAY STILL   
VOTE IN PERSON IF YOU ATTEND THE MEETING. 
--------------------------------------------------------------------------------

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Wanger Advisors Trust 
227 West Monroe Street, Suite 3000
Chicago, Illinois 60606-5016
1-800-4-WANGER

Proxy Statement 

Special Meeting of Shareholders 
September 27, 2000

This proxy statement is being sent to you by the board of trustees of 
Wanger Advisors Trust. The board is asking you to complete and return the       
enclosed proxy card(s), permitting your shares of Wanger U.S. Small Cap, Wanger 
International Small Cap, Wanger Twenty and/or Wanger Foreign Forty to be voted  
at the meeting, even if you cannot attend the meeting in person. The meeting    
will be held at the offices of Wanger Asset Management, L.P. ("WAM"), 227 West  
Monroe Street, Suite 3000, Chicago, Illinois 60606, at 9:00 a.m., Central time, 
on September 27, 2000 (the "Meeting"). Shareholders of record at the close of   
business on [July 21], 2000 (the "record date") are entitled to vote at the     
meeting.                                                                        

   You should also have received WAT's annual report to shareholders for the
fiscal year ended December 31, 1999.  If you would like another copy of the     
annual report, please write to WAT at the address shown at the top of this page 
or call at 800-492-6437.  The report will be sent to you without charge.        

For convenience, Wanger Advisors Trust is referred to in this proxy   
statement as "WAT" or the "Trust."  Wanger U.S. Small Cap, Wanger International 
Small Cap, Wanger Twenty and Wanger Foreign Forty are each referred to          
individually as a "Fund" and together as the "Funds."                           

SUMMARY OF PROPOSALS

   You are being asked to vote on two Proposals -- a proposed new investment
advisory agreement (called the "Proposed Agreement") and the ratification of the
board's selection of Ernst & Young LLP as the Trust's independent auditors.  The
shareholders of each Fund will vote separately on the Proposed Agreement and on 
the ratification of the selection of auditors.                                  

PROPOSAL 1
PROPOSED NEW INVESTMENT ADVISORY AGREEMENT

Introduction

As of June 9, 2000, WAM, the Funds' investment adviser, Wanger Asset  
Management, Ltd. (WAM's general partner), Liberty Financial Companies, Inc.     
("Liberty") and WAM Acquisition L.P. ("Liberty Sub") entered into an Agreement  
and Plan of Merger (the "Merger Agreement") pursuant to which WAM will become a 
wholly-owned subsidiary of Liberty. Under the Merger Agreement, Liberty Sub will
be                                                                              

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merged with and into WAM (the "Merger"). WAM, the surviving entity, will be     
renamed "Liberty Wanger Asset Management, L.P." ("Liberty WAM"). Shareholders   
are being asked to approve the Proposed Agreement so that, as further described 
below, the Merger can be completed and the management of each Fund can continue 
uninterrupted after the transaction. The Proposed Agreement is substantially    
similar to the current investment advisory agreements between the Trust (on     
behalf of each Fund) and the WAM (the "Current Agreements"), and WAM, under its 
new name and its new ownership, would continue to be each Fund's investment     
adviser if shareholders approve the Proposed Agreement. The portfolio managers  
who currently manage your Funds are expected to continue to manage the Funds    
after the Merger, following the same investment strategies and objectives       
currently in place. For a comparison of the Current and Proposed Agreements, see
"The Investment Advisory Agreements -- Comparison of Current and Proposed       
Agreements" below.                                                              

It is a condition to completion of the Merger that the shareholders of
Wanger U.S. Small Cap and Wanger International Small Cap approve the Proposed   
Agreement. If shareholders of those Funds do not approve the Proposed Agreement,
Liberty has the contractual right to abandon the Merger. In that event, the     
Current Agreements would remain in effect for all Funds until further notice. If
shareholders of those Funds do approve the Proposed Agreement, the Proposed     
Agreement will become effective for those Funds along with any other Funds that 
have approved the Proposed Agreement as of the completion of the Merger, which  
is expected to be on or about [September 29], 2000. Although approval of the    
Proposed Agreement by the shareholders of Wanger Twenty and Wanger Foreign Forty
is not a condition to completion of the Merger, approval of these Funds is also 
sought because at the close of the Merger, the Current Agreements will be deemed
to be "assigned" (as that term is defined under the Investment Company Act of   
1940 (the "1940 Act"), and the Current Agreements will automatically terminate  
for all Funds. In the event that shareholders of Wanger Twenty and Wanger       
Foreign Forty do not approve the Proposed Agreement, the WAT board will take    
such action as it deems appropriate. Such action may include entering into an   
interim agreement for advisory services with Liberty WAM substantially in the   
form of the Proposed Agreement in accordance with Rule 15a-4 under the 1940 Act.

     At a regular meeting held on June 2, 2000 and special meetings held on June
8, 2000 and July 6, 2000, of the WAT board, the trustees considered the Merger  
and its anticipated effects on the Funds. On July 6, 2000, the trustees,        
including the disinterested trustees, unanimously voted to approve the Proposed 
Agreement with respect to each Fund and to recommend the Proposed Agreement to  
Fund shareholders for approval. For more information about the trustees'        
deliberations and the reasons for their recommendation, please see the          
discussion relating to this Proposal under the heading "The Investment Advisory 
Agreements--Factors Considered by the Board."                                   

The board of trustees, including the disinterested trustees,  
unanimously recommends that shareholders of the Funds vote  
for approval of the Proposed Agreement. 

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The Merger  

Background                                                                      

   WAM has advised WAT that it began consideration in late 1999 of strategic
alternatives that would:                                                        

 .  address succession challenges surrounding the eventual retirement of
Ralph Wanger;                                                   

    .  address challenges relating to distribution of shares of the Funds in a
rapidly evolving market; and                                    

.  provide management support to WAM, which had grown substantially in
recent years.                                                   

After consideration of the alternatives, WAM has advised WAT that WAM concluded 
that an outright sale of its business would best address each of these          
challenges. After a detailed evaluation process, discussions with Liberty       
culminated in the execution of the Merger Agreement dated as of June 9, 2000.   

 Liberty is a publicly traded asset accumulation and management company,
headquartered in Boston, Massachusetts. Liberty Mutual Insurance Company, a     
mutual insurance company owned (through a number of intermediate corporations)  
_______ of the combined voting power of Liberty's stock at June 30, 2000.       
Through its subsidiaries, Liberty provides fixed, indexed and variable          
annuities; mutual funds; private wealth management and institutional money      
management services. At March 31, 2000, it had assets under management, through 
its subsidiaries, in excess of $67 billion. Subsidiaries of Liberty, including  
the Crabbe Huson Group, Inc., Colonial Management Associates, Inc., Stein Roe & 
Farnham Incorporated and Newport Pacific Management, Inc., act as investment    
advisers to more than 65 mutual funds.                                          

 WAM and Liberty believe that the Merger will result in an allocation of
resources between them that should benefit the shareholders of the Funds.       
Liberty has the size and resources to promote and sell mutual fund shares       
effectively and provide efficient administration and shareholder servicing to   
mutual funds. Liberty believes that, by utilizing its management, distribution, 
compliance and administrative resources, it can enhance the quality of          
shareholder services and introduce operational efficiencies. WAM and Liberty    
believe that the management and distribution strength of Liberty and its        
affiliates will allow Liberty WAM to concentrate on portfolio management for the
Funds.                                                                          

    For a discussion of proposed changes to the Funds following the completion
of the Merger, see "Other Proposed Changes to the Funds."                       

Summary of Merger Agreement                                                     

Pursuant to the terms of the Merger Agreement, upon the closing of the
Merger, Liberty Sub will merge with and into WAM, with WAM continuing as the    
surviving entity. WAM will be an operating subsidiary of Liberty, and will be   
renamed as above. Ralph Wanger will                                             

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serve as president of Liberty WAM, the overall policies of which will be set by 
a board of directors that will consist of Mr. Wanger and two Liberty executives.
The officers of Liberty WAM are expected to be Ralph Wanger and Bruce Lauer and 
two Liberty representatives.                                                    

  The Merger Agreement provides that each limited partnership interest and
general partnership interest of WAM issued and outstanding immediately prior to 
the Merger will be cancelled, and each holder will receive in return the right  
to receive an amount equal to a certain specified percentage of the initial     
purchase price of $272 million (subject to certain adjustments). Another        
payment of $8 million is guaranteed three years after the completion of the     
Merger.  Additional purchase price amounts, up to a maximum of $170 million in  
the aggregate, will be payable by Liberty if Liberty WAM's earnings (as defined 
for this purpose in the Merger Agreement) meet certain targets for the thirty-  
six and sixty month periods beginning in the month following the completion of  
the Merger.                                                                     

   Completion of the Merger is subject to a number of conditions, including,
among others, (i) the approval of the Proposed Agreement by the shareholders of 
certain funds for which WAM is the investment adviser, (ii) the receipt of      
certain regulatory approvals and (iii) the advisory fee revenue received by WAM 
remaining above a designated level. See also the discussion under the           
"Introduction" above.                                                           

   WAM has entered into employment agreements with each of the principals of
WAM, including the portfolio managers of each of the Funds, which will become   
effective upon completion of the merger. Pursuant to the terms of the employment
agreements, these individuals have agreed to remain employees of Liberty WAM    
until December 31, 2005. The employment agreement of each of the portfolio      
managers includes an agreement by each of them that (with certain exceptions) if
they end their relationship with Liberty WAM they will not, through the earlier 
of (i) December 31, 2005 or (ii) the second anniversary of the termination of   
their employment with Liberty WAM, participate in any other investment          
management business, or solicit any Liberty WAM client or employee.             

Section 15(f) Considerations                                                    

Section 15(f) of the 1940 Act provides that an investment adviser to a
registered investment company may receive any amount or benefit in connection   
with a sale of an interest in such adviser which results in an assignment of an 
investment advisory contract if two conditions are satisfied.  The first        
condition is that, for a period of three years after the assignment, at least   
75% of the members of the board of the investment company not be "interested    
persons" (as defined in the 1940 Act) of the new investment adviser or its      
predecessor.  The second condition is that no "unfair burden" be imposed on the 
investment company as a result of the assignment or any express or implied      
terms, conditions or undertakings related to the assignment.  An "unfair burden"
on an investment company exists if, during the two-year period after any such   
transaction occurs, the investment adviser or its predecessor or successor, or  
any interested person of such adviser, predecessor or successor, receives or is 
entitled to receive any compensation from any person in connection with the     
purchase or sale of securities or other property from or on behalf of the       
investment company, or                                                          

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from the investment company or its shareholders, other than for bona fide       
underwriting, investment advisory or other services.                            

     Under the terms of the Merger Agreement, Liberty agreed that it and Liberty
WAM, to the extent within their control, would cause the two conditions set     
forth in Section 15(f) of the 1940 Act to be complied with. The current board   
of trustees consists of 5 individuals, two of whom are interested persons of WAM
or will be interested persons of Liberty WAM. In order for at least 75% of the  
board members to be persons who are not interested persons of WAM or Liberty    
WAM, Mr. Charles P. McQuaid will resign as trustee effective at the time of the 
completion of the Merger.                                                       

The Investment Advisory Agreements

  On July 6, 2000, the board of trustees unanimously approved the Proposed
Agreement. As described in more detail under "--Factors Considered by the       
Board," this recommendation results from the board's evaluation of a substantial
amount of information.                                                          

    The Proposed Agreement is substantially similar to the Current Agreements.
A copy of the Proposed Agreement is attached as Exhibit A. In the discussion    
below, WAM and Liberty WAM sometimes are referred to collectively as the        
"Adviser."                                                                      

The board of trustees, including the disinterested trustees,  
unanimously recommends that shareholders of the Funds vote  
for approval of the Proposed Agreement. 

Factors Considered by the Board                                                 

     At a regular meeting held on June 2, 2000 and special meetings held on June
8, 2000 and July 6, 2000, of the WAT board, the trustees reviewed a variety of  
factors relating to the Merger and the Proposed Agreement. Senior management of 
Liberty and WAM presented a review of the Merger, including a discussion of what
the Merger would mean to the Funds. The Board reviewed the history, strategy and
general plans of Liberty, and a variety of documents regarding Liberty. There   
were extended discussions regarding Liberty's plans for the Funds including     
ongoing investment management, administration and distribution of the Funds.    

The board took into account WAM's assertions that: (i) the Merger was 
important to provide stability to WAM when Mr. Wanger eventually retires, and   
WAM believes the stability will enhance its ability to attract and retain       
talented employees; (ii) Liberty had assured WAM that it intends that the       
integrity of WAM's investment process would be maintained; (iii) WAM was eager  
for Liberty to assume responsibility for certain administrative services for the
Funds and provide management support for WAM so that WAM principals could focus 
their energies entirely on portfolio management; and (iv) WAM did not believe   
that remaining independent was a viable option for it.                          

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  The board noted that the employment agreements into which Mr. Wanger and
each other portfolio manager have entered and which become effective upon       
closing of the Merger provide for their continued employment with Liberty WAM   
through December 31, 2005. The board also took into account Mr. Wanger's        
assurance that he has no present intention to retire before that date and that  
the structure of the Merger, with additional purchase price amounts payable in  
three and five years if financial targets are met, provided an incentive for    
each of the portfolio managers to remain committed to the success of the Funds  
and Liberty WAM after the Merger.                                               

In evaluating the Proposed Agreement, the board considered that the   
Proposed Agreement, including the terms relating to the services to be provided,
were substantially similar to the Current Agreements. The board noted that, in  
approving the continuation of the Current Agreements with respect to Wanger U.S.
Small Cap and Wanger International Small Cap on October 12, 1999, the board had 
evaluated a number of factors, including the nature, quality and scope of       
services provided by WAM, the performance of each Fund compared to relevant     
benchmarks, and comparative fees and expense ratios. The disinterested trustees 
also considered the potential advantages and disadvantages of the two-year      
initial term of the Proposed Agreement and WAT's ability to terminate the       
Proposed Agreement on 60 days' notice.                                          

     The board considered how the Merger would affect other services provided to
the Funds. Liberty proposed that affiliates of Liberty assume responsibility for
most administrative services to the Funds, including transfer agency,           
shareholder servicing, fund accounting and general administration. The board    
noted that the proposed changes would not result in an increase in overall      
expenses borne by the Funds' current shareholders and approved agreements with  
Liberty affiliates for provision of transfer agency services, shareholder       
servicing and accounting to be effective at the time of completion of the       
Merger.                                                                         

Finally, the board noted that all expenses in connection with the     
implementation of changes required by the Merger, including this proxy          
solicitation, would be paid by Liberty or, in some circumstances, WAM.          

     During the review process, the board consulted with Bell, Boyd & Lloyd LLC,
counsel to the Funds.                                                           

Comparison of the Current and Proposed Agreements                               

 The Current Agreements with respect to Wanger U.S. Small Cap and Wanger
International Small Cap were approved by shareholder vote at a special meeting  
of shareholders held on December 30, 1997, and renewed on October 12, 1999 by   
unanimous vote of the board of trustees. These agreements will expire on        
December 31, 2000. The Current Agreement with respect to Wanger Twenty and      
Wanger Foreign Forty was approved on September 15, 1998 by a unanimous vote of  
the board of trustees. This agreement expires on December 31, 2000.             

    If approved by the shareholders, the Proposed Agreement will be signed and
become effective on the date of completion of the Merger (the "Effective Date"),
which is currently expected to be as soon as reasonably practicable after the   
conditions to which the Merger is subject (including the required shareholder   
approvals) have been satisfied. The agreement will continue in effect through   
the second anniversary of the Effective Date, and like the Current Agreements,  
will continue year to year as long as its continuance as to each Fund is        
approved at least annually (i) by the board of trustees or by the holders of a  
"majority of the outstanding securities" (as defined in the 1940 Act) of that   
Fund; and (ii) by a vote of the majority of the disinterested trustees, cast in 
person at a meeting called for that purpose. Like the Current Agreements, the   
Proposed Agreement may be terminated as to a Fund without penalty by the vote of
the board of trustees of WAT or the shareholders of that Fund (by a majority as 
defined in the 1940 Act) on sixty days' written notice to Liberty WAM and will  
terminate automatically in the event of its assignment (as defined in the 1940  
Act).                                                                           

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 The Current Agreements and Proposed Agreement sometimes are referred to
below as the "Agreements," and WAM and Liberty WAM are referred to as the       
"Adviser."                                                                      

General Terms of the Agreements.  Under the Agreements, subject to the
overall supervision and control of the board of trustees, the Adviser has       
supervisory responsibility for the general management and investment of the     
Funds' assets.  The Adviser is authorized to make the decisions to buy and sell 
securities, options, futures contracts and any other investments in which the   
Funds may invest pursuant to each Fund's investment objectives, policies and    
restrictions, to place the Funds' portfolio transactions with broker-dealers,   
and to negotiate the terms of such transactions, including brokerage commissions
on brokerage transactions, on behalf of the Funds.  The Adviser is authorized to
exercise discretion concerning portfolio brokerage allocation consistent with   
each Fund's policy and the Trust's registration statement and under the         
supervision of the Trust's board of trustees, and as permitted by law, including
but not limited to Section 28(e) of the Securities Exchange Act of 1934, and in 
so doing shall not be required to make any reduction in its investment advisory 
fees.  The Agreements also provide that the Adviser will furnish to the Trust at
the Adviser's own expense, office space and all necessary office facilities,    
equipment and personnel required to provide its services.  The Adviser is also  
responsible for paying all expenses in connection with managing the assets of   
the Funds, including placement of securities orders, all expenses of printing   
and distributing the Funds' prospectus and reports to prospective investors, and
in determination of daily price computations, portfolio accounting and related  
bookkeeping.                                                                    

 Under the Agreements, each Fund is obligated to pay all of its expenses
other than those paid by the Adviser as set forth above, including taxes and    
charges for auditing and legal services, custodian, depository and transfer     
agent fees, all costs for borrowing money, registration, filing and other fees  
in connection with the requirements of regulatory authorities, the printing and 
mailing of reports to shareholders, expenses of shareholder and trustees        
meetings, expenses of trustees, other than those affiliated with the Adviser,   
expenses related to membership in any trade association and brokers' commissions
and other charges relative to the purchase or sale of portfolio securities.     

     The Agreements provide that the Adviser shall not be liable to the Funds or
their shareholders for any loss suffered by the Funds or their shareholders as a
result of any error of judgment, or any loss arising out of any investment, or  
as a consequence of any act or omission of the Adviser, or of any of the        
partners, employees or agents of the Adviser, in connection with or pursuant to 
the Agreements, except for liability resulting from willful misfeasance, bad    
faith or gross negligence on the part of the Adviser in the performance of its  
duties, or by reason of reckless disregard by the Adviser of its obligations and
duties under the Agreements.                                                    

   The Agreements may be terminated by either WAT (by action of the board of
trustees or shareholders) or the Adviser on 60 days' written notice to the      
other.  The Agreements terminate automatically in the event of their assignment 
(as defined in the 1940 Act).                                                   

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Advisory Fees. The following table shows the rates of the Trust's     
compensation to WAM under the Current Agreements. The Proposed Agreement        
provides for identical compensation to Liberty WAM.                             

                                                                [Download Table]

                                Rate of compensation paid to WAM     
            Fund             (as a percentage of average net assets) 
            ----             ----------------------------------------
                                                                     
Wanger U.S. Small             1.00% of the first $100 million        
Cap                           0.95% of the next $150 million         
                              0.90% in excess of $250 million        

Wanger International          1.30% of the first $100 million        
Small Cap                     1.20% of the next $150 million         
                              1.10% in excess of $250 million        

Wanger Twenty                 0.95% of all assets                    

Wanger Foreign Forty          1.00% of all assets                    

WAM has undertaken in the Current Agreements to reimburse Wanger U.S. Small Cap,
Wanger International Small Cap, Wanger Twenty and Wanger Foreign Forty to the   
extent their ordinary operating expenses exceed 2.0%, 2,0%, 1.35% and 1.45%,    
respectively. The Proposed Agreement provides that Liberty WAM will continue    
these undertakings through the second anniversary of the completion of the      
Merger.                                                                         

    For the fiscal year ended December 31, 1999, the advisory fees paid to WAM
were:                                                                           

                                                                [Download Table]

                                            Advisory Fee
                                            ------------
                                                        
Wanger U.S. Small Cap                         $3,172,578

Wanger International Small Cap                $2,231,975

Wanger Twenty*                                    $9,017

Wanger Foreign Forty*                                 $0

*net of expense reimbursements of $26,027 for Wanger Twenty and $37,004 for     
Wanger Foreign Forty.                                                           

 No other fees or payments were made by either Fund to WAM or any of its
affiliates during the fiscal year ended December 31, 1999.                      

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   See the discussion below under the heading "Information about WAM - Other
Investment Companies Advised by WAM" for information about other funds managed  
by WAM having similar investment objectives as the Funds.                       

   Differences Between the Current Agreements and the Proposed Agreement. In
addition to the General Terms of the Agreements described above, the Proposed   
Agreement includes other provisions that generally are necessary to take into   
account operating differences resulting from the change in ownership structure  
of Liberty WAM.  In particular, the Proposed Agreement includes provisions not  
found in the Current Agreements that:                                           

.  permit a broker associated with Liberty WAM to effect transactions on a    
national securities exchange for the Funds to the extent permitted by     
applicable regulations;                                                   

.  memorialize Liberty WAM's existing authority to aggregate orders for the   
Funds with orders of other clients or clients of affiliates of Liberty WAM
(in the event that Liberty WAM and the affiliated advisers share common   
trading facilities) as long as the trades are allocated in a fair and     
equitable manner and consistent with each adviser's fiduciary duty to its 
clients;                                                                  

.  permit Liberty WAM, upon receipt of approval from the board of trustees, to
   contract with unaffiliated and affiliated parties to provide certain services
  that Liberty WAM is obligated under the Proposed Agreement to provide (other
  than advisory services) and limits the liability of any affiliate of Liberty
WAM in the performance of Liberty WAM's duties under the agreement to that
   resulting from willful misfeasance, bad faith or gross negligence on the part
of Liberty WAM or the affiliate;                                          

.  permit affiliates of Liberty WAM to receive compensation from the Trust for
   other services provided by the affiliate that are not within the scope of the
duties of Liberty WAM under the agreement; and                            

.  permit the Trust to use the name "Liberty" for the duration of the Proposed
 Agreement in the same manner as the Trust is currently permitted to use the
name "Wanger;"                                                            

.  require Liberty WAM to maintain records in compliance with the rules under 
 the 1940 Act and to surrender promptly such records at the Trust's request;
and                                                                       

 .  provide that the contractual expense limitations will not apply to any class
of securities established after the completion of the Merger and will     
terminate on the second anniversary of the completion of the Merger.      

Other Proposed Changes to the Funds 

 In addition to the Proposed Agreement, a number of other changes to the
Funds (not requiring your approval) are conditions to the completion of the     
Merger. The WAT board approved these changes at its special meeting held on     
July 6, 2000. These changes are described                                       

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briefly below, and will be explained in more detail in your Fund's prospectus   
that you will receive after the completion of the Merger.                       

   Following the completion of the Merger, the providers of distribution and
transfer agency services to your Fund will be different. In connection with the 
Merger, WAT will enter into new agreements with Liberty affiliates for the      
provision of these services to the Funds. WAT will enter into an underwriting   
agreement for distribution services with Liberty Funds Distributor, Inc. and a  
transfer agency agreement with Liberty Funds Services, Inc., in each case on    
terms and conditions and in the form approved by the board of trustees of WAT.  
The fees payable under the transfer agency agreement will be the same as the    
fees payable to the current transfer agent (State Street Bank and Trust Company)
under the current transfer agency agreement. Like the current underwriting      
agreement, the new underwriting agreement provides for compensation to be paid  
by WAT.                                                                         

  The Proposed Agreement will continue to provide that Liberty WAM will be
responsible for administrative services, including the determination of each    
Fund's net asset value. Some or all of the administrative services now provided 
by WAM will be delegated by Liberty WAM, at Liberty WAM's expense, to Liberty   
affiliates. Liberty WAM will continue to be responsible for the performance of  
services it delegates to others.                                                

   Liberty has informed the WAT board that it is in the process of reviewing
the existing custodial relationships of the Liberty Funds, and that it is       
Liberty's intention to recommend that each of the Liberty Funds and the Funds   
use the same custodian. While no decision has been made, Liberty's decision may 
result in a change in the Funds' custodian subject to the approval of the board 
of trustees.                                                                    

PROPOSAL 2  

RATIFICATION OF SELECTION OF AUDITORS 

    The board of trustees recommends that the shareholders of each Fund ratify
the board of trustees' selection of Ernst & Young LLP as independent public     
accountants for each Fund for the fiscal year ending December 31, 2000.         

For the year ended December 31, 1999, Ernst & Young LLP examined the  
financial statements of the Trust and provided consultation on financial        
accounting, reporting and tax matters. Representatives of Ernst & Young LLP     
will be present at the Meeting and will have an opportunity to make a statement 
if they desire to do so. They also will be available to respond to appropriate  
questions presented at the meeting.                                             

The board of trustees, including the disinterested trustees who are   
not affiliated with WAT, unanimously recommends that shareholders   
of the Funds vote FOR ratification of the selection of auditors.  

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INFORMATION ABOUT WAM 

Management and Organization of WAM                                              

WAM serves as the investment adviser for the Funds and for other      
institutional accounts.  As of June 30, 2000, WAM had approximately $[9] billion
under management, including the Funds.  Portfolio management decisions for the  
Funds are made by their portfolio managers, working with WAM's team of analysts.
WAM is a limited partnership managed by its general partner, Wanger Asset       
Management, Ltd. ("WAM Ltd."), whose stockholders, directly or indirectly, are  
Ralph Wanger, Charles P. McQuaid,  Leah J. Zell, Marcel P. Houtzager and Robert 
A. Mohn.  Ralph Wanger is the president of WAM Ltd.  WAM and WAM Ltd. are       
located at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606.         

Other Investment Companies Advised by WAM                                       

In addition to serving as investment adviser to the Trust, WAM is also
investment adviser to Acorn Investment Trust ("Acorn"), an open-end management  
investment company with five series --Acorn Fund, Acorn International, Acorn    
USA, Acorn Twenty and Acorn Foreign Forty (the "Acorn Funds").                  

     Completion of the Merger is also contingent upon approval of a new advisory
agreement between Liberty WAM and Acorn, on behalf of the Acorn Funds, by the   
Acorn board and by the shareholders of Acorn Fund, Acorn International and Acorn
USA.                                                                            

   The following table shows the total net assets of each of the Acorn Funds
as of June 30, 2000, and the current rates of Acorn's compensation to WAM:      

                                                        [Enlarge/Download Table]

                                                     Rate of Compensation Paid to WAM    
     Name of Fund    Assets as of 6/30/00 (000s)  (as a percentage of average net assets)
     ------------    ---------------------------  ---------------------------------------
                                                                                         
Acorn Fund                   $3,819,047             0.75% of the first $700 million;     
                                                    0.70% of the next $1.3 billion;      
                                                    0.65% in excess of $2 billion        

Acorn International           2,981,186             1.20% of the first $100 million;     
                                                    0.95% of the next $400 million;      
                                                    0.75% in excess of $500 million      

Acorn USA                       305,007             0.95% of the first $100 million;     
                                                    0.90% of the next $400 million;      

Acorn Twenty                     61,447             0.90% of all assets                  

Acorn Foreign Forty             144,569             0.95% of all assets                  

WAM has undertaken to reimburse Acorn Twenty and Acorn Foreign Forty to the     
extent their ordinary operating expenses exceed 1.35% and 1.45%, respectively,  
of its average annual net                                                       

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assets. This undertaking is voluntary and may be terminated by either WAM or    
Acorn on 30 days' notice to the other.                                          

MORE INFORMATION ABOUT THE TRUST

Organization and Management of the Trust                                        

   The Trust is a Massachusetts business trust organized on August 30, 1994.
The Trust is an open-end management investment company, currently with four     
series: Wanger U.S. Small Cap, Wanger International Small Cap, Wanger Twenty    
and Wanger Foreign Forty. Wanger U.S. Small Cap and Wanger International Small  
Cap began operations on May 3, 1995. Wanger Twenty and Wanger Foreign Forty     
began operations on February 1, 1999.                                           

The Trust is governed by a board of trustees, which is responsible for
protecting the interests of the shareholders of the Funds. The trustees are     
experienced executives and professionals who meet at regular intervals to       
oversee the activities of the Trust and the Funds. The officers and trustees of 
the Funds are:                                                                  

                                                        [Enlarge/Download Table]

                        Position(s)                                                                               
       Name and          Held with                                                                                
    Date of Birth        the Funds                 Principal Occupation(s) During Past Five Years                 
    -------------   ---------------                ----------------------------------------------                 
                                                                                                                  
Fred D. Hasselbring     Trustee         Retail industry, general project development and business computer systems
8/14/1941                               consultant; Director and executive administrator, The Malachi Corp., Inc. 
                                        (a non-profit corporation).                                               

Charles P. McQuaid      Trustee and     Principal and director of research, WAM since July 1992; Trustee and      
8/27/1953               senior vice     senior vice president, Acorn Investment Trust; Co-portfolio manager, Acorn
                        president*      Fund.                                                                     

P. Michael Phelps       Trustee         Retired since January 31, 1998; Prior thereto, vice president and         
9/19/1933                               corporate secretary, Morton International, Inc.                           

Ralph Wanger            Trustee and     Principal and portfolio manager, WAM; President, WAM Ltd. since July 1992;
6/21/1934               president*      Trustee and president, Acorn Investment Trust; Director, Wanger Investment
                                        Company plc.                                                              

Patricia H. Werhane     Trustee         Ruffin Professor of Business Ethics, Darden Graduate School of Business   
9/20/1935                               Administration, University of Virginia, since 1993.                       

Marcel P. Houtzager     vice president  Principal, WAM since 1995; Analyst and portfolio manager, WAM since 1992. 
10/26/1960                                                                                                        

Kenneth A. Kalina       assistant       Assistant treasurer, Acorn Investment Trust; Chief financial officer, WAM 
8/4/1959                treasurer       since April 2000; Fund controller, WAM since September 1995; Prior        
                                        thereto, treasurer of the Stein Roe Mutual Funds.                         

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                                                        [Enlarge/Download Table]

                           Position(s)                                                                                
       Name and             Held with                                                                                 
    Date of Birth           the Funds                    Principal Occupation(s) During Past Five Years               
----------------------  -----------------  ---------------------------------------------------------------------------
                                                                                                                      
Bruce H. Lauer          vice president,    Principal, WAM since January 1, 2000; Chief operating officer, WAM since   
7/22/1957               assistant          April 1995; Vice president, treasurer and assistant secretary, Acorn       
                        secretary and      Investment Trust; Director, Wanger Investment Company plc and New Americas 
                        treasurer          Small Cap Fund.                                                            

Robert A. Mohn          vice president     Principal, WAM since 1995; Analyst and portfolio manager, WAM since August 
9/13/1961                                  1992; Vice president, Acorn Investment Trust.                              

John H. Park            vice president     Principal, WAM since 1998; Analyst and portfolio manager, WAM since July   
5/30/1967                                  1993; Vice president, Acorn Investment Trust.                              

Peter A. Zaldivar       vice president     Analyst and portfolio manager, WAM since 1996; Prior thereto, vice         
5/26/1967                                  president and portfolio manager, Lord Asset Management.                    

Leah J. Zell            vice president     Principal, analyst, and portfolio manager, WAM since July 1992; Vice       
5/23/1949                                  president, Acorn Investment Trust; Managing director and member of trust   
                                           committee, Chai Trust Company.                                             

Roger D. Edgely         vice president     Principal, WAM since January 1, 2000; Analyst, WAM since 1994; Managing    
4/18/1955                                  director and director of research, WAM since 1998; Co-portfolio manager,   
                                           Acorn Foreign Forty since December 1999; Vice president, Acorn Investment  
                                           Trust; Prior thereto, analyst, Crosby Securities.                          

Steven A. Radis         secretary          Chief marketing officer and managing director, WAM since April 1999; Prior 
8/24/1962                                  thereto, vice president of corporate and marketing communications, Zurich  
                                           Kemper Life, January 1998 to March 1999, and first vice president          
                                           corporate communications, Zurich Kemper Investments, January 1987 to       
                                           December 1997.                                                             

  *Messrs. McQuaid and Wanger are trustees who are "interested persons" of
the Trust as defined in the 1940 Act, and of WAM. Mr. Wanger and Ms. Zell are   
married to each other.                                                          

    The address for Messrs. Wanger, McQuaid, Edgely, Houtzager, Kalina, Lauer,
Mohn, Park, Radis, Zaldivar and Ms. Zell is Wanger Asset Management, L.P., 227  
West Monroe Street, Suite 3000, Chicago, Illinois 60606. The address for Mr.    
Hasselbring is One Wheaton Center, Suite 1802, Wheaton, IL 60187. The address   
for Mr. Phelps is 222 E. Chestnut Street, Apt. 10-B, Chicago, IL 60611. The     
address for Ms. Werhane is 104 Falcon Drive, Charlottesville, VA 22901.         

The following table shows certain information regarding the beneficial
ownership of shares of each Fund as of June 30, 2000 by each trustee and by all 
trustees and executive officers of WAT as a group.                              

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                                                        [Enlarge/Download Table]

                                                                                  Percentage of 
                                                                   Number of       Outstanding  
Name                                            Fund                Shares         Shares Held  
------------------------------------  ------------------------  ---------------  ---------------
                                                                                                
Fred D. Hasselbring                                                    0                0       
Charles P. McQuaid                                                                              
P. Michael Phelps                                                      0                0       
Ralph Wanger                                                                                    
Patricia H. Werhane                                                    0                0       
Trustees and executive officers as                                                              
 a group                                                                                        

Distribution of Shares of the Funds                                             

Shares of each Fund are currently offered for sale by WAM Brokerage   
Services, L.L.C., ("WAM BD"), without any sales commissions, Rule 12b-1 fees or 
other charges to the Funds or Life Companies or Retirement Plans purchasing Fund
shares.  However, each Variable Contract imposes its own charges and fees on    
owners of Variable Contracts, and Retirement Plans may impose such charges on   
participants in a Retirement Plan.  WAM BD offers the Funds' shares only on a   
best efforts basis.  WAM BD is located at 227 West Monroe Street, Suite 3000,   
Chicago, Illinois 60606.                                                        

 See "Other Proposed Changes to the Funds - Other Agreements and Service
Provider Changes" for more information about how distribution of shares of the  
Funds will change after completion of the Merger.                               

MORE INFORMATION ABOUT THE MEETING

Expenses                                                                        

     Liberty has agreed to bear the costs of preparing, printing and mailing the
proxy materials for the Meeting of shareholders of the Trust and all costs of   
solicitation of proxies, subject to certain conditions. Any such expenses not   
paid by Liberty will be paid WAM. WAT has engaged D.F. King and Management      
Information Services Corp. ("MIS") to assist in the solicitation of proxies. It 
is anticipated that the cost of the proxy solicitation services provided by D.F.
King will be approximately $________, and the cost of services provided by MIS  
will be approximately $______, in each case, plus reimbursement of reasonable   
out of pocket expenses.                                                         

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Date of Mailing                                                                 

     This proxy statement and enclosed proxy are being mailed to shareholders on
or about [July 28], 2000.                                                       

Shares and Shareholders                                                         

At the record date, the Funds had the following numbers of shares     
outstanding:                                                                    

                                                                [Download Table]

Fund                                                             # Shares   
-------------------------------------------------------------- -------------
                                                                            
          Wanger U.S. Small Cap                                 8,894,925.08
          Wanger International Small Cap                       19,495,886.47
          Wanger Twenty                                           647,686.59
          Wanger Foreign Forty                                    579,941.21

Each share is entitled to one vote; fractional shares are entitled to 
fractional votes.                                                               

     Of those shares, the only persons known to own of record or beneficially 5%
or more of the outstanding shares of any Fund as of the record date were:       

                                                        [Enlarge/Download Table]

                                                                                                         Percentage of   
                                                                                                          Outstanding    
           Name and Address                              Fund                     Number of Shares        Shares Held    
---------------------------------------  ------------------------------------  ----------------------  ------------------

                                                                                                                         
Phoenix Home Life                        Wanger International Small Cap                  4,800,481.58               53.9%
Variable Accumulation Account(1)         Wanger U.S. Small Cap                          10,494,818.15               53.8%
101 Munson Street                        Wanger Twenty                                     344,089.39               53.1%
P.O. Box 810                             Wanger Foreign Forty                              321,528.76               55.4%
Greenfield, MA   01302                                                                                                   

PHL                                      Wanger International Small Cap                  3,119,366.30               35.1%
Variable Accumulation Account(1)         Wanger U.S. Small Cap                           6,777,097.71               34.8%
101 Munson Street                        Wanger Twenty                                     275,590.82               42.6%
P.O. Box 810                             Wanger Foreign Forty                              226,826.66               39.1%
Greenfield, MA   01302                                                                                                   

IDS Life(1)                              Wanger International Small Cap                    490,606.76                5.5%
1IT                                      Wanger U.S. Small Cap                           1,027,733.84                5.3%
IDS Tower 10                                                                                                             
T11/229                                                                                                                  
Minneapolis, MN   55440                                                                                                  

(1)  All shares are beneficially owned by Variable Contract owners.             

How Proxies Will Be Voted                                                       

     Those shares of the Funds that are held by Life Companies, of which Phoenix
is the primary holder, are owned by such Life Companies.  Pursuant to current   
interpretations of the 1940 Act, the Life Companies will solicit voting         
instruction from owners of Variable Contracts                                   

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on the matters to be voted on at the meeting. All shares of the Funds will be   
voted by the Life Companies in accordance with voting instructions received from
such Variable Contract owners. The Life Companies will vote all the shares which
they are entitled to vote, for, against or abstaining in the same proportion as 
the voting instructions given by the Variable Contract owners on the issues     
presented. The close of business on __________, 2000, is the last day on which  
instructions will be accepted. If the meeting is adjourned, a new date for      
receipt of instructions will be set.                                            

   All proxies solicited by the board of trustees that are properly executed
and received prior to the Meeting, and which are not revoked, will be voted at  
the Meeting.  Shares represented by those proxies will be voted in accordance   
with the instructions marked on the proxy.  If no instructions are specified,   
shares will be voted FOR each proposal.  See also, "Quorum, Voting at the       
Meeting and Adjournment."                                                       

Revoking a Proxy                                                                

  At any time before it has been voted, you may revoke your proxy by:  (1)
sending a letter saying that you are revoking your proxy to the Secretary of    
Wanger Advisors Trust at the Trust's offices located at 227 West Monroe Street, 
Suite 3000, Chicago, Illinois 60606; (2) properly executing a later-dated proxy;
or (3) attending the Meeting, requesting return of any previously delivered     
proxy and voting in person.                                                     

How You May Vote                                                                

 You may vote your shares by mail (by signing and returning the enclosed
proxy card), by facsimile or by telephone.  The trustees have been advised by   
counsel that Massachusetts law and WAT's Agreement and Declaration of Trust and 
Bylaws permit voting by shareholders in accordance with these procedures.       

Telephone Voting                                                                

You may give your voting instructions over the telephone by calling   
800-769-5414. A representative of D.F. King will answer the call. When receiving
your instructions by telephone, the D.F. King representative is required to ask 
you for your full name, address, social security or employer identification     
number, title (if the person giving the proxy is authorized to act for an       
entity, such as a corporation that is the record owner of the shares), the      
number of shares of a Fund owned and to confirm that you have received the proxy
statement in the mail. If the information you provide matches the information   
provided to D.F. King by WAT, then the D.F. King representative will explain the
process. D.F. King is not permitted to recommend to you how to vote, other than 
to read any recommendation included in the proxy statement. D.F. King will      
record your instructions and transmit them to the official tabulator and, within
72 hours, send you a letter or mailgram to confirm your vote. That letter will  
also ask you to call D.F. King immediately if the confirmation does not reflect 
your instructions correctly.                                                    

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Voting by Mail                                                                  

    If you wish to participate in the Meeting, but do not wish to give a proxy
by telephone or by facsimile, you can still complete, sign and mail the proxy   
card received with the proxy statement and/or attend the Meeting in person.  You
can revoke any proxy, whether given in writing, by telephone or electronically, 
in accordance with the procedures outlined above under "Revoking a Proxy."      

More Information About How Proxies May Be Solicited                             

Solicitation of proxies by personal interview, mail, telephone and    
electronic mail may be made by officers and trustees of WAT and employees of    
WAM, none of whom will receive any additional compensation for such service, and
third-party solicitation agents.                                                

As the Meeting date approaches, you may receive a call from a         
representative of D.F. King if WAT has not yet received your vote.  D.F. King   
may ask you for authority, by telephone or by electronically transmitted        
instructions, to permit D.F. King to sign a proxy on your behalf.  D.F. King    
will record all instructions it receives from shareholders by telephone or      
electronically, and the proxies it signs in accordance with those instructions, 
in accordance with the procedures set forth above.  The trustees believe those  
procedures are reasonably designed to determine accurately the shareholder's    
identity and voting instructions.                                               

Quorum, Voting at the Meeting and Adjournment                                   

Thirty percent of the shares entitled to vote present in person or    
represented by proxy constitutes a quorum for the transaction of business at the
Meeting. On proposals for which shareholders of a Fund vote separately, thirty  
percent of the shares of the Fund entitled to vote at the Meeting present in    
person or represented by proxy constitutes a quorum of that Fund. For purposes  
of determining the presence or absence of a quorum and for determining whether  
sufficient votes have been received for approval of any matter to be acted upon 
at the Meeting, abstentions and broker non-votes will be treated as shares that 
are present at the Meeting but have not been voted.                             

   Approval of Proposal 1 for each Fund will require the affirmative vote of
the lesser of (a) 67 percent or more of the voting shares of that Fund present  
at the Meeting, if the holders of more than 50 percent of the outstanding voting
shares of that Fund are present or represented by proxy, or (b) more than 50    
percent of the outstanding voting shares of that Fund.  Abstentions and broker  
non-votes will have the practical effect of a "No" vote if adoption of the      
Proposed Agreement is to be determined pursuant to item (a) and will not be     
counted to determine the outcome of the vote if adoption of Proposed Agreement  
is to be determined pursuant to item (b).                                       

  Approval of Proposal 2 for a Fund will require the affirmative vote of a
majority of the shares of that Fund represented at the Meeting in person or by  
proxy, if a quorum is present.  Abstentions and broker non-votes will have the  
practical effect of a "No" vote on Proposal 2.                                  

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  If a quorum is not present in person or by proxy at the Meeting, or if a
quorum is present at the Meeting but not enough votes to approve a proposal are 
received, the persons named as proxies may propose one or more adjournments of  
the Meeting to permit further solicitation of proxies.  Any proposal for        
adjournment for a Fund will require the vote of a majority of the shares of that
Fund represented at the Meeting in person or by proxy.  A vote may be taken on  
one of the proposals in this proxy statement before adjournment if a quorum is  
present and sufficient votes have been received for approval.                   

OTHER MATTERS 

     The board of trustees of WAT knows of no other matters that are intended to
be brought before the Meeting.  If other matters are presented for action, the  
proxies named in the enclosed form of proxy will vote on those matters in their 
sole discretion.                                                                

SHAREHOLDER PROPOSALS 

WAT is not required, and does not intend, to hold annual meetings of  
shareholders.  Therefore, no date can be given by which a proposal by a         
shareholder for consideration at such a meeting must be submitted.  Any such    
proposal should be submitted in writing to the Secretary of the Trust at its    
principal offices at 227 West Monroe Street, Suite 3000, Chicago, Illinois      
60606-5016.  Upon submitting a proposal, the shareholder shall provide the Trust
with a written notice which includes the shareholder's name and address, the    
number of shares of each fund that such shareholder holds of record or          
beneficially, the dates upon which such shares were acquired, and documentary   
support for a claim of beneficial ownership.                                    

                                              By order of the Board of Trustees,

                           Steven A. Radis
                     Secretary

[July 24], 2000                                                                 

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                                                                       Exhibit A

INVESTMENT ADVISORY AGREEMENT 

    Wanger ADVISORS TRUST, a Massachusetts business trust registered under the
Investment Company Act of 1940 (the "1940 Act") as an open-end management       
investment company (the "Trust"), and LIBERTY WANGER ASSET MANAGEMENT, L.P., a  
Delaware limited partnership registered under the Investment Advisers Act of    
1940 as an investment adviser ("Liberty WAM"), agree that:                      

     1.  Engagement of Liberty WAM.  Liberty WAM shall manage the investment and
reinvestment of the assets of Wanger U.S. Small Cap Advisor, Wanger             
International Small Cap Advisor, Wanger Twenty and Wanger Foreign Forty, series 
of the Trust (each, a "Fund," and collectively, the "Funds"), subject to the    
supervision of the Board of Trustees of the Trust, for the period and on the    
terms set forth in this agreement.  If the Trust establishes one or more series 
in addition to the Funds named above with respect to which it desires to retain 
Liberty WAM as investment adviser hereunder, and if Liberty WAM is willing to   
provide such services under this agreement, the Trust and Liberty WAM may add   
such new series to this agreement, by written supplement to this agreement.     
Such supplement shall include a schedule of compensation to be paid to Liberty  
WAM by the Trust with respect to such series and such other modifications of the
terms of this agreement with respect to such series as the Trust and Liberty WAM
may agree.  Upon execution of such a supplement by the Trust and Liberty WAM,   
that series will become a Fund hereunder and shall be subject to the provisions 
of this agreement to the same extent as the Funds named above, except as        
modified by the supplement.                                                     

 Liberty WAM shall give due consideration to the investment policies and
restrictions and the other statements concerning the Funds in the Trust's       
agreement and declaration of trust, bylaws, and registration statement under the
1940 Act and the Securities Act of 1933 (the "1933 Act"), and to the provisions 
of the Internal Revenue Code of 1986, as amended, applicable to the Funds as    
regulated investment companies.  Liberty WAM shall be deemed for all purposes to
be an independent contractor and not an agent of the Trust or the Funds, and    
unless otherwise expressly provided or authorized, shall have no authority to   
act or represent the Trust or the Funds in any way.                             

     Liberty WAM is authorized to make the decisions to buy and sell securities,
options, futures contracts and any other investments in which the Funds may     
invest pursuant to its investment objectives, policies and restrictions, to     
place the Funds' portfolio transactions with broker-dealers, and to negotiate   
the terms of such transactions, including brokerage commissions on brokerage    
transactions, on behalf of the Funds.  Liberty WAM is authorized to exercise    
discretion with each Fund's policy concerning allocation of its portfolio       
brokerage, consistent with the Trust's registration statement and under the     
supervision of the Trust's Board of Trustees, and as permitted by law, including
but not limited to Section 28(e) of the Securities Exchange Act of 1934, and in 
so doing shall not be required to make any reduction in its investment advisory 
fees.                                                                           

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   Liberty WAM may, where it deems it to be advisable, aggregate orders with
other securities of the same type to be sold or purchased by one or more Funds  
with like orders on behalf of other clients of Liberty WAM (as well as clients  
of other investment advisers affiliated with Liberty WAM, in the event that     
Liberty WAM and such affiliated investment advisers share common trading        
facilities).  In such event, Liberty WAM (or Liberty WAM and its affiliated     
advisers, as the case may be) will allocate the shares so sold or purchased, as 
well as the expenses incurred in the transaction, in a manner it (or it and     
they) consider to be equitable and fair and consistent with its (or its or      
their) fiduciary obligations to clients.                                        

    2.  Administrative Services.  Liberty WAM shall supervise the business and
affairs of the Trust and each Fund and shall provide such services and          
facilities as may be required for effective administration of the Trust and     
Funds as are not provided by employees or other agents engaged by the Trust;    
provided that Liberty WAM shall not have any obligation to provide under this   
agreement any such services which are the subject of a separate agreement or    
arrangement between the Trust and Liberty WAM, any affiliate of Liberty WAM, or 
any third party administrator.                                                  

     3.  Use of Affiliated Companies and Subcontractors.  In connection with the
services to be provided by Liberty WAM under this agreement, Liberty WAM may, to
the extent it deems appropriate, and subject to compliance with the requirements
of applicable laws and regulations and upon receipt of approval of the Trustees,
make use of (i) its affiliated companies and their directors, trustees,         
officers, and employees and (ii) subcontractors selected by Liberty WAM,        
provided that Liberty WAM shall supervise and remain fully responsible for the  
services of all such third parties in accordance with and to the extent provided
by this agreement. All costs and expenses associated with services provided by  
any such third parties shall be borne by Liberty WAM or such parties.           

   4.  Books and Records.  In compliance with the requirements of Rule 31a-3
under the 1940 Act, Liberty WAM agrees to maintain records relating to its      
services under this agreement, and further agrees that all records that it      
maintains for the Trust are the property of the Trust and to surrender promptly 
to the Trust any of such records upon the Trust's request; provided that Liberty
WAM may at its own expense make and retain copies of any such records.  Liberty 
WAM further agrees to preserve for the periods prescribed by Rule 31a-2 under   
the 1940 Act the records required to be maintained by Rule 31a-1 under the 1940 
Act.                                                                            

   5.  Expenses to be Paid by Liberty WAM.  Liberty WAM shall furnish to the
Trust, at Liberty WAM's expense, office space and all necessary office          
facilities, equipment and personnel for managing that portion of the Trust's    
business relating to the Funds.  Liberty WAM shall also assume and pay all other
expenses incurred by it in connection with managing the assets of the Funds,    
including expenses in connection with placement of securities orders, all       
expenses of printing and distributing the Funds' prospectus and reports to      
prospective investors (except to the extent such expenses are allocated to a    
party other than the Trust in any participation or operating agreement to which 
the Trust is a party), and all expenses in determination of daily price         
computations, portfolio accounting and related bookkeeping.                     

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    6.  Expenses to be Paid by the Trust. Except as otherwise provided in this
agreement or any other contract to which the Trust is a party, the Trust shall  
pay all expenses incidental to its organization, operations and business,       
including, without limitation:                                                  

(a)  all charges of depositories, custodians, sub-custodians and other
          agencies for the safekeeping and servicing of its cash, securities and
    other property and of its transfer agents and registrars and its
dividend disbursing and redemption agents, if any;          

(b)  all charges of legal counsel and of independent auditors;        

    (c)  all compensation of trustees other than those affiliated with Liberty
          WAM or the Trust's administrator, if any, and all expenses incurred in
connection with their services to the Trust;                

  (d)  all expenses of preparing, printing and distributing notices, proxy
    solicitation materials and reports to shareholders of the Funds;

(e)  all expenses of meetings of shareholders of the Funds;           

  (f)  all expenses of registering and maintaining the registration of the
      Trust under the 1940 Act and of shares of the Funds under the 1933
      Act, including all expenses of preparation, filing and printing of
annual or more frequent revisions of the Funds' registration
          statements under the 1940 Act and 1933 Act, and of supplying each then
        existing shareholder or beneficial owner of shares of the Funds of a
 copy of each revised prospectus or supplement thereto, and of
    supplying a copy of the statement of additional information upon
request to any then existing shareholder;                   

(g)  all costs of borrowing money;                                    

     (h)  all expenses of publication of notices and reports to shareholders and
to governmental bodies or regulatory agencies;              

 (i)  all taxes and fees payable to federal, state or other governmental
agencies, domestic or foreign, and all stamp or other taxes;

(j)  all expenses of printing and mailing certificates for shares of a
Fund;                                                       

    (k)  all expenses of bond and insurance coverage required by law or deemed
advisable by the Board;                                     

(l)  all expenses of qualifying and maintaining qualification of, or  
        providing appropriate notification of intention to sell relating to,
       shares of the Funds under the securities laws of the various states
         and other jurisdictions, and of registration and qualification of the
      Trust under any other laws applicable to the Trust or its business
activities;                                                 

   (m)  all fees, dues and other expenses related to membership of the Trust
          in any trade association or other investment company organization; and

(n)  any extraordinary expenses.                                      

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In addition to the payment of expenses, the Trust shall also pay all  
brokers' commissions and other charges relating to the purchase and sale of     
portfolio securities for each Fund.                                             

   Any expense borne by the Trust that is not solely attributable to a Fund,
nor solely to any other series of shares of the Trust, shall be apportioned in  
such manner as Liberty WAM determines is fair and appropriate, or as otherwise  
specified by the Board of Trustees of the Trust.                                

  7.  Compensation of Liberty WAM. For the services to be rendered and the
expenses to be assumed and to be paid by Liberty WAM under this agreement, the  
Trust shall pay to Liberty WAM fees accrued daily and paid monthly at the annual
rates shown below:                                                              

                                                                [Download Table]


 Wanger U.S. Small Cap                                             

       Assets                                           Rate of Fee
       ------                                           -----------
                                                                   
       First $100 million                                  1.00%   
       $100 million to $250 million                        0.95%   
       In excess of $250 million                           0.90%   

 Wanger International Small Cap                                    

       Assets                                           Rate of Fee
       ------                                           -----------

       First $100 million                                  1.30%   
       $100 million to $250 million                        1.20%   
       In excess of $250 million                           1.10%   

 Wanger Twenty                                                     

       All Assets                                          0.95%   

Wanger Foreign Forty                                               

       All Assets                                          1.00%   

    8.  Limitation of Expenses of the Fund.  The total expenses of Wanger U.S.
Small Cap, Wanger International Small Cap, Wanger Twenty and Wanger Foreign     
Forty, exclusive of taxes, of interest and of extraordinary litigation expenses,
but including fees paid to Liberty WAM, shall not for the period ending on the  
second anniversary of the Effective Date (as defined in the Agreement and Plan  
of Merger referred to in Section 13 below) exceed 2.0%, 2.0%, 1.35% and 1.45%   
per annum, respectively, and Liberty WAM agrees to reimburse each Fund for any  
sums expended for such expenses in excess of that amount with respect to such   
period.  For purposes of calculating the expenses subject to this limitation,   
(i) brokers' commissions and other charges relating to the purchase and sale of 
portfolio securities and (ii) the excess custodian costs attributable to        
investments in foreign securities compared to the custodian costs which would   
have been incurred had the investments been in domestic securities, shall not be
regarded                                                                        

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as expenses.  Reimbursement, if any, shall be made by reduction of the          
fees otherwise payable to Liberty WAM under this agreement, no less frequently  
than quarterly.  Notwithstanding the foregoing, the limitations on total        
expenses set forth above in this Section 8 shall not apply to any class of      
shares of a Fund established after the effective date of this agreement.        

    9.  Services of Liberty WAM Not Exclusive.  The services of Liberty WAM to
the Funds hereunder are not to be deemed exclusive, and Liberty WAM shall be    
free to render similar services to others so long as its services under this    
agreement are not impaired by such other activities.                            

10.  Services Other Than as Manager.  Liberty WAM (or an affiliate of 
Liberty WAM) may act as broker for the Funds in connection with the purchase or 
sale of securities by or to the Funds if and to the extent permitted by         
procedures adopted from time to time by the Board of Trustees of the Trust.     
Such brokerage services are not within the scope of the duties of Liberty WAM   
under this agreement, and, within the limits permitted by law and the Board of  
Trustees of the Trust, Liberty WAM (or an affiliate of Liberty WAM) may receive 
brokerage commissions, fees or other remuneration from the Funds for such       
services in addition to its fee for services under this agreement.  Within the  
limits permitted by law, Liberty WAM or an affiliate of Liberty WAM may receive 
compensation from the Funds for other services performed by it for the Funds    
which are not within the scope of the duties of Liberty WAM under this          
agreement.  The Trust hereby authorizes any entity or person associated with    
Liberty WAM that is a member of a national securities exchange to effect any    
transaction on the exchange for the account of a Fund to the extent permitted by
and in accordance with Section 11(a) of the Securities Exchange Act of 1934 and 
Rule 11a2-2(T) thereunder.  The Trust hereby consents to the retention by such  
entity or person of compensation for such transactions in accordance with Rule  
11a-2(T)(a)(iv).                                                                

 11.  Limitation of Liability of Liberty WAM. To the extent permitted by
applicable law, neither Liberty WAM nor any of its partners, officers, agents,  
employees or affiliates shall be liable to the Trust or its shareholders for any
loss suffered by the Trust or its shareholders as a result of any error of      
judgment, or any loss arising out of any investment, or as a consequence of any 
other act or omission of Liberty WAM or any of its affiliates in the performance
of Liberty WAM's duties under this agreement, except for liability resulting    
from willful misfeasance, bad faith or gross negligence on the part of Liberty  
WAM or such affiliate, or by reason of reckless disregard by Liberty WAM or such
affiliate of the obligations and duties of Liberty WAM under this agreement.    

12.  Use of "Wanger" or "Liberty" name.  The Trust may use the name   
"Wanger Advisors Trust" or any name using the name "Liberty" or "Wanger" or any 
combination or derivation of either of them only for so long as this agreement  
or any extension, renewal or amendment hereof remains in effect, including any  
similar agreement with any organization that shall remain affiliated with       
Liberty Financial Companies, Inc. and that shall have succeeded to the business 
of Liberty WAM as investment adviser.  At such time as this agreement or any    
extension, renewal or amendment hereof, or such similar agreement, shall no     
longer be in effect, the Trust will (by amendment of its agreement and          
Declaration of Trust, if necessary) cease to                                    

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use any name using the name "Liberty" or "Wanger" or any combination or         
derivation of either of them or any name similar thereto or any other name      
indicating that it is advised by or otherwise connected with Liberty WAM or with
any organization which shall have succeeded to Liberty WAM's business as        
investment adviser. Liberty WAM's consent to the use of the name "Wanger" by the
Trust shall not prevent Liberty WAM's permitting any other enterprise, including
other investment companies, to use that name.                                   

13.  Duration and Renewal.  This agreement shall be effective at the  
Effective Time as defined in the Agreement and Plan of Merger among Wanger Asset
Management, Ltd., Wanger Asset Management, L.P. and Liberty Financial Companies,
Inc. and WAM Acquisition L.P. dated as of June 9, 2000 (the "Merger Agreement").
Unless terminated as provided in Section 14, this agreement shall continue in   
effect until the second anniversary of the Effective Date (as defined in the    
Merger Agreement), and thereafter from year to year only so long as such        
continuance is specifically approved at least annually (a) by a majority of     
those trustees who are not interested persons of the Trust or of Liberty WAM,   
voting in person at a meeting called for the purpose of voting on such approval,
and (b) by either the Board of Trustees of the Trust or vote of the holders of a
majority of the outstanding shares of each Fund.                                

  14.  Termination.  This agreement may be terminated at any time, without
payment of any penalty, by the Board of Trustees of the Trust, or by a vote of  
the holders of a majority of the outstanding shares of each Fund, upon 60 days' 
written notice to Liberty WAM.  This agreement may be terminated by Liberty WAM 
at any time upon 60 days' written notice to the Trust.  This agreement shall    
terminate automatically in the event of its assignment (as defined in Section   
2(a)(4) of the 1940 Act).                                                       

     15.  Non-Liability of Trustees and Shareholders.  A copy of the Declaration
of Trust of the Trust is on file with the Secretary of The Commonwealth of      
Massachusetts, and notice is hereby given that this instrument is executed on   
behalf of the Trust by officers of  the Trust as officers and not individually. 
Any obligation of the Trust hereunder shall be binding only upon the assets of  
the Trust (or applicable series thereof) and shall not be binding upon any      
trustee, officer, employee, agent or shareholder of the Trust.  Neither the     
authorization of any action by the trustees or shareholders of the Trust nor the
execution of this agreement on behalf of the Trust shall impose any liability   
upon any trustee, officer or shareholder of the Trust.                          

    16.  Amendment.  This agreement may be amended in accordance with the 1940
Act.                                                                            

     17.  Notices.  Any notice, demand, change of address or other communication
to be given in connection with this agreement shall be given in writing and     
shall be given by personal delivery, by registered or certified mail or by      
transmittal by facsimile or other electronic medium addressed to the recipient  
as follows (or at such other address or addresses as a party may provide to the 
other from time to time, by notice):                                            

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If to Liberty           Liberty Wanger Asset Management, L.P.                   
WAM:                    Attention:  Bruce H. Lauer                              
  227 West Monroe Street, Suite 3000
Chicago, Illinois 60606         
Telephone:  312-634-9200        
Facsimile:  312-634-0016        

with a copy to:                 
Liberty Funds Group LLC         
One Financial Center            
Boston, Massachusetts  02114    
Attention:  General Counsel     
Telephone:  617-426-3750        
Facsimile:  617-772-3650        

If to Wanger            Wanger Advisors Trust                                   
Advisors Trust:         227 West Monroe Street, Suite 3000                      
Chicago, Illinois 60606         
Telephone:  312-634-9200        
Facsimile:  312-634-1919        

with a copy to:                 
Bell, Boyd & Lloyd LLC          
Attention:  Janet D. Olsen      
      Three First National Plaza, Suite 3300
Chicago, Illinois 60602         
Telephone:  312-372-1121        
Facsimile:  312-372-2098        

   All notices shall be conclusively deemed to have been given on the day of
actual delivery thereof and, if given by registered or certified mail, on the   
fifth business day following the deposit thereof in the mail and, if given by   
facsimile or other electronic medium, on the day of transmittal thereof (upon   
electronic confirmation of receipt thereof).                                    

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Dated as of the effective time of this agreement                                

WANGER ADVISORS TRUST         LIBERTY WANGER ASSET                              
MANAGEMENT, L.P.,   
By                  
                   -----------------------------------
Its  General Partner

By:                           By:                                               
-------------------------     -----------------------------               

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PRES14A 30th Page of 31 TOC 1st Previous Next Bottom Just 30th

PROXY                                                      WANGER ADVISORS TRUST
Special Meeting of Shareholders - September 27, 2000  
This Proxy is Solicited on Behalf of the Board of Trustees  

VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE THE EXPENSE OF 
ADDITIONAL MAILINGS 

Please fold and detach card at perforation before mailing.  

This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this proxy will be voted  
FOR Proposal 1 and FOR Proposal 2, and in the sole discretion of the Proxies    
upon such other business as may properly come before the meeting or any         
adjournment or adjournments thereof.  The board of trustees recommends a Vote   
FOR Proposals 1 and 2.  Please vote by filling in the appropriate boxes below.  

1.   Approval of an investment advisory agreement between Wanger Advisors Trust 
and Liberty Wanger Asset Management, L.P.                             

FOR _______          AGAINST _______       ABSTAIN _______      

2.   Ratification of selection of Ernst & Young LLP as the Trust's independent  
public accountants for the fiscal year ending December 31, 2000.      

FOR _______          AGAINST _______       ABSTAIN _______      

3.   In their sole discretion on any other matters properly coming before the   
meeting or any adjournment or adjournments thereof.                   

--------------------------------------------------------------------------------
To vote by telephone:                                                           

1. Read the Proxy Statement and have your Proxy Card handy.                     

2. Call toll-free 1-888-221-0697.                                               

3. Enter the 14-digit control number found on your Proxy Card.                  

4. Follow the simple recorded instructions.                                     

--------------------------------------------------------------------------------
To vote by facsimile:                                                           

1. Read the Proxy Statement and have your Proxy Card handy.                     

2. Complete; sign and date your Proxy Card.                                     

3. Fax the Proxy Card to 212-269-2796.                                          

***CONTROL NUMBER: 999 999 999 999 99***                                        

FUND NAME PRINTS HERE                                                           

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Special Meeting of Shareholders 
September 27, 2000  

This proxy is Solicited on Behalf of the Board of Trustees. The undersigned     
hereby appoints [RALPH WANGER, CHARLES P. McQUAID, BRUCE H. LAUER and STEVEN A. 
RADIS] and each or any of them, as proxies, with full power of substitution, to 
vote all shares of the above referenced fund represented by this proxy which the
undersigned is entitled to vote at the Special Meeting of Shareholders to be    
held on September 27, 2000, and at any adjournments thereof, with all powers the
undersigned would possess if personally present at such meeting.                

Dated ________________, 2000                                                    

                                ------------------------------------------------
Signature       

                                ------------------------------------------------
         Signature if held jointly

IMPORTANT: Please date and sign exactly as your name appears hereon. When       
signing as executor, administrator, trustee, agent, attorney, guardian, or      
corporate officer, please set forth your full title. Joint owners must each     
sign.

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Dates Referenced Herein and Documents Incorporated By Reference

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

	8/30/94	15
	5/3/95	15
	12/30/97	9		PRE 14A, DEFS14A
	1/31/98	15
	9/15/98	9
	2/1/99	15
	10/12/99	9
	12/31/99	4	13	13F-NT, N-30D, 24F-2NT, NSAR-B
	1/1/00	16
	3/31/00	6		497, 13F-NT
	6/2/00	5	8
	6/8/00	5	8
	6/9/00	4	27
	6/30/00	6	16	N-30D, 13F-NT, NSAR-A
	7/6/00	5	12
Filed On / Filed As Of	7/7/00			497
	7/21/00	3
For The Period Ended	9/27/00	2	31	DEFS14A
	12/31/00	3	30	NSAR-B, 24F-2NT, N-30D
	12/31/05	7	9	N-CSR, NSAR-B, 24F-2NT

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Wanger Advisors Trust · PRES14A · For 9/27/00

Filed On 7/7/00 4:22pm ET · SEC File 811-08748 · Accession Number 950131-0-4275

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
Filing Table of Contents