Investors in the SoGen Funds will not be the only ones hurt if performance troubles continue through the end of the year.

Liberty Financial Companies may pay less than planned for its acquisition of the SoGen Funds advisory firm, Societe Generale Asset Management Corp. (SoGen), because of net redemptions in the funds and a decrease in assets under management due to market performance. The price cut would hurt the owners of SoGen -- fund manager Jean-Marie Eveillard and Societe Generale Asset Management, S.A., the French financial services company.

A spokesperson for Liberty Financial declined to say how much the purchase price could be reduced by eroding assets at SoGen. A SoGen spokesperson declined comment. SoGen disclosed the possibility of a reduction in the sale price in a preliminary proxy statement filed with the SEC last Tuesday.

When the deal was announced Aug. 13, Liberty Financial said it would pay up to $216 million for SoGen. The sale is expected to close at the end of this year or early in 1999, said Hal Thayer, the Liberty Financial spokesperson.

Eveillard would receive up to $46 million in cash and Liberty Financial stock for the sale if the price is not reduced. Societe Generale would receive $170 million in cash for its stake.

The SoGen Funds, know for Eveillard's value investing and their strong long-term track record, have had a difficult 1998. The group's largest fund with roughly $3 billion in assets, SoGen International, is down 3.66 percent for the year and ranks 195 out of 223 funds in its peer group, according to Lipper Analytical Services. Other SoGen funds include the Overseas Fund, down 1.54 percent for 1998; the Gold Fund, down 6.62 percent; and a money market fund.

From Aug. 1 to Oct. 31, SoGen suffered a 15 percent drop in fund assets under management and net redemptions of $513 million, according to Justin Lamont, a SoGen spokesperson. SoGen now has roughly $3.5 billion in fund assets under management, Lamont said.

Gregg Wolper, international funds editor for Morningstar, said SoGen's international funds have suffered because of a difficult market for value investing worldwide.

Despite the funds' recent difficulties, Wolper has a favorable view of Eveillard and the international funds he manages. Eveillard's style has remained consistent, Wolper said. Morningstar rates both the International and Overseas funds with four stars. The Gold Fund, with about $25 million in assets under management, has a two-star rating.

Under the original agreement, Liberty Financial was to pay $205 million for SoGen at the closing and Eveillard was to earn up to another $11 million over six years if the fund advisers' met specified earnings targets. Excluding Eveillard, other top employees of the funds' adviser could earn up to $25 million in bonuses over five years if they met earnings targets, according to the proxy statement. The proxy statement did not identify the earnings goals.

It did however, note that the sales price may be "readjusted to lower figures" if there were changes in the annual fees SoGen received for advising the funds. The proxy statement said that as of October, the fees SoGen was receiving may have fallen to levels that triggered a price cut.

Thayer, the Liberty Financial spokesman, said the price will be adjusted using a formula based largely on net redemptions of SoGen Funds. Thayer said it was too soon to know whether the purchase price will actually be cut. Lamont attributed the net redemptions both to investor skittishness about international investing generally and to the funds' performance. While the funds have encouraged a long-term perspective on investing, "there's a percentage of people who just can't take" short-term performance difficulties, Lamont said.

Whatever Eveillard loses in payments up front, he may gain from receiving Liberty Financial stock. Twenty percent of Eveillard's payment will be in stock. In a report last week, the investment bank Putnam, Lovell, de Guardiola & Thornton said Liberty Financial stock was trading at less than book value and called it "very cheap." The stock closed on Tuesday at $26.75, off of its 52-week high of $40.63.

Despite the sale, Liberty Financial can keep the SoGen Funds name for up to one year, according to the proxy statement. After that time, the funds still will be able to use the SoGen name in advertising material, identifying it as the funds' prior name.

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