UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-22031
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND, INC.
(Exact name of registrant as specified in charter)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of principal executive offices) (Zip code)
Scott R. Plummer - 5228 Ameriprise Financial Center, Minneapolis, MN 55474
(Name and address of agent for service)
Registrant's telephone number, including area code: (612) 671-1947
Date of fiscal year end: 12/31
Date of reporting period: 6/30
Semiannual Report
(SELIGMAN LOGO)
SELIGMAN
LASALLE INTERNATIONAL REAL ESTATE FUND
SEMIANNUAL REPORT FOR
THE PERIOD ENDED
JUNE 30, 2009
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND SEEKS
LONG-TERM CAPITAL APPRECIATION AND, SECONDLY, CURRENT
INCOME.
TABLE OF CONTENTS --------------------------------------------------------------
Your Fund at a Glance.............. 2
Portfolio of Investments........... 6
Statement of Assets and
Liabilities...................... 12
Statement of Operations............ 13
Statements of Changes in Net
Assets........................... 14
Financial Highlights............... 15
Notes to Financial Statements...... 17
Proxy Voting....................... 29
Change in Independent Registered
Public Accounting Firm........... 29
Proxy Results...................... 30
RIVERSOURCE FAMILY OF FUNDS
Seligman Funds are a part of the RiverSource Family of
Funds that includes funds branded "RiverSource,"
"RiverSource Partners," "Seligman" and "Threadneedle."
These funds share the same Board of Directors/Trustees
and officers.
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SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 1
YOUR FUND AT A GLANCE ----------------------------------------------------------
(UNAUDITED)
FUND SUMMARY
--------------------------------------------------------------------------------
> Seligman LaSalle International Real Estate Fund (the Fund) Common Stock gained
5.42%, based on market price, and 1.53%, based on net asset value (excluding
sales charge) for the six-month period ended June 30, 2009.
> The Fund outperformed the FTSE NAREIT Equity REITs Index, which fell 12.21%
during the same period.
> The Fund outperformed the UBS Global Investors Index, which fell 3.07% for the
six-month period.
ANNUALIZED TOTAL RETURNS (for period ended June 30, 2009)
--------------------------------------------------------------------------------
SINCE
INCEPTION
6 MONTHS* 1 YEAR 05/30/07
--------------------------------------------------------------------
Seligman LaSalle International Real
Estate Fund
Market Price +5.42% -48.52% -43.91%(a)
--------------------------------------------------------------------
Net Asset Value:
--------------------------------------------------------------------
Without sales charge +1.53% -40.67% -34.77%(b)
--------------------------------------------------------------------
With sales charge N/A N/A -36.41%(b)
--------------------------------------------------------------------
FTSE NAREIT Equity REITs Index(1)
(unmanaged) -12.21% -43.29% -32.23%
--------------------------------------------------------------------
UBS Global Investors Index(2)
(unmanaged) -3.07% -42.02% -32.85%
--------------------------------------------------------------------
UBS Global Investors Index (excluding
US)(3) (unmanaged) +6.91% -39.95% -32.51%
--------------------------------------------------------------------
* Not annualized.
(a) Market price total return at inception is based on the initial offering
price on May 25, 2007, which was $25.00 per share.
(b) Net asset value total return at inception is from the opening of business on
May 30, 2007. The since-inception returns are calculated with and without
the effect of the initial 4.50% maximum sales charge.
The performance information shown represents past performance and is not a
guarantee of future results. The investment return and principal value of your
investment will fluctuate so that your shares, when sold, may be worth more or
less than their original cost. Current performance may be lower or higher than
the performance information shown. You may obtain performance information
current to the most recent month-end by visiting seligman.com.
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2 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
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Returns reflect changes in market price or net asset value, as applicable, and
assume reinvestment of distributions. Returns do not reflect the deduction of
taxes that investors may pay on distributions or the sale of shares.
The indices are unmanaged benchmarks that assume reinvestment of all
distributions. The indices do not reflect the effects of sales charges,
expenses, fees and taxes. It is not possible to invest directly in an index.
(1) The FTSE NAREIT Equity REITs Index measures the performance of all publicly-
traded US real estate trusts that are equity real estate investment trusts
(REITs), as determined by the National Association of Real Estate Investment
Trusts.
(2) The UBS Global Investors Index measures the performance of real estate
securities within the S&P/Citigroup World Property Index that derive 70% or
more of income from rent.
(3) The UBS Global Investors Index (excluding US) measures the performance of
real estate securities within the S&P/Citigroup World Property Index that
derive 70% or more of income from rent. This index may invest in real estate
securities in over 21 countries, excluding the United States.
PRICE PER SHARE
--------------------------------------------------------------------------------
JUNE 30, 2009 MARCH 31, 2009 DEC. 31, 2008
----------------------------------------------------------------------------
Market price $5.57 $4.17 $5.60
----------------------------------------------------------------------------
Net asset value 7.29 5.71 7.61
----------------------------------------------------------------------------
DISTRIBUTIONS PAID PER SHARE* (for period ended June 30, 2009)
--------------------------------------------------------------------------------
PAYMENT DATE PER SHARE AMOUNT
-----------------------------------------------------------------
3/23/09 $0.13
-----------------------------------------------------------------
6/9/09 0.13
-----------------------------------------------------------------
* The sources of distributions for tax reporting purposes, which may include
return of capital, may be subject to changes based on tax regulations. A
return of capital may occur, for example, when some or all of the money that
you invested in the Fund is paid back to you. A return of capital distribution
does not necessarily reflect the Fund's investment performance and should not
be confused with "yield" or "income."
The net asset value of the Fund's shares may not always correspond to the market
price of such shares. Common Stock of many closed-end funds frequently trade at
a discount from their net asset value. The Fund is subject to stock market risk,
which is the risk that stock prices overall will decline over short or long
periods, adversely affecting the value of an investment in the Fund.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 3
YOUR FUND AT A GLANCE (continued) ----------------------------------------------
STYLE MATRIX
--------------------------------------------------------------------------------
STYLE
VALUE BLEND GROWTH
LARGE
X MEDIUM SIZE
SMALL
Shading within the style matrix approximates areas in which the Fund is designed
to generally invest.
The style matrix can be a valuable tool for constructing and monitoring your
portfolio. It provides a frame of reference for distinguishing the types of
stocks or bonds owned by a fund, and may serve as a guideline for helping you
build a portfolio.
Investment products, including shares of funds, are not federally or FDIC-
insured, are not deposits or obligations of, or guaranteed by any financial
institution, and involve investment risks including possible loss of principal
and fluctuation in value.
Investments in real estate securities may be subject to specific risks, such as
risks to general and local economic conditions, and risks related to individual
properties. Investing in one economic sector, such as real estate, may result in
greater price fluctuations than owning a portfolio of diversified investments.
The Fund is a "non-diversified" fund and, as such, the Fund may hold fewer
securities than other funds. A decline in the value of those investments would
cause the Fund's overall value to decline to a greater degree than if the Fund
held a more diversified portfolio.
Investments in small- and mid-capitalization companies involve greater risks and
volatility than investments in larger, more established companies. International
investing involves increased risk and volatility due to potential political and
economic instability, currency fluctuations, and differences in financial
reporting and accounting standards and oversight. Risks are particularly
significant in emerging markets.
--------------------------------------------------------------------------------
4 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
COUNTRY DIVERSIFICATION(1) (at June 30, 2009; % of portfolio assets)
---------------------------------------------------------------------
Australia 19.8%
------------------------------------------------
Belgium 1.2%
------------------------------------------------
Bermuda 0.8%
------------------------------------------------
Canada 3.1%
------------------------------------------------
Finland 1.2%
------------------------------------------------
France 10.1%
------------------------------------------------
Hong Kong 5.4%
------------------------------------------------
Japan 15.0%
------------------------------------------------
Luxembourg 0.5%
------------------------------------------------
Netherlands 7.7%
------------------------------------------------
Sweden 1.9%
------------------------------------------------
Switzerland 1.4%
------------------------------------------------
United Kingdom 12.6%
------------------------------------------------
United States 19.1%
------------------------------------------------
Other(2) 0.2%
------------------------------------------------
(1) Percentages indicated are based upon total investments (excluding
Investments of Cash Collateral Received for Securities on Loan) as of June
30, 2009. The Fund's composition is subject to change.
(2) Cash & Cash Equivalents.
TOP TEN HOLDINGS (at June 30, 2009; % of portfolio assets)
---------------------------------------------------------------------
Westfield Group (Australia) 9.7%
------------------------------------------------
Unibail-Rodamco (France) 7.6%
------------------------------------------------
Stockland (Australia) 5.6%
------------------------------------------------
Link REIT (Hong Kong) 3.7%
------------------------------------------------
Japan Retail Fund Investment (Japan) 3.6%
------------------------------------------------
Land Securities Group (United Kingdom) 3.6%
------------------------------------------------
British Land (United Kingdom) 3.5%
------------------------------------------------
Corio (Netherlands) 3.1%
------------------------------------------------
Wereldhave (Netherlands) 3.0%
------------------------------------------------
NTT Urban Development (Japan) 2.5%
------------------------------------------------
Excludes cash & cash equivalents.
For further detail about these holdings, please refer to the section entitled
"Portfolio of Investments."
Fund holdings are as of the date given, are subject to change at any time, and
are not recommendations to buy or sell any security.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 5
PORTFOLIO OF INVESTMENTS ------------------------------------------------------
JUNE 30, 2009 (UNAUDITED)
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
COMMON STOCKS (95.9%)(c)
ISSUER SHARES VALUE(a)
AUSTRALIA (19.2%)
Abacus Property Group 940,974 $278,861
Dexus Property Group 1,919,179 1,154,396
GPT Group 4,132,944 1,616,905
Stockland 1,473,220 3,799,263
Westfield Group 721,561 6,602,297
---------------
Total 13,451,722
-------------------------------------------------------------------------------------
BELGIUM (1.1%)
Befimmo 4,104 312,175
Cofinimmo 4,223 492,369
---------------
Total 804,544
-------------------------------------------------------------------------------------
BERMUDA (0.8%)
Hongkong Land Holdings 153,128 539,313
-------------------------------------------------------------------------------------
CANADA (3.0%)
Canadian Real Estate Investment Trust 71,600 1,514,498
RioCan Real Estate Investment Trust 45,600 599,113
---------------
Total 2,113,611
-------------------------------------------------------------------------------------
FINLAND (1.1%)
Citycon 209,985 548,365
Technopolis 61,319 254,676
---------------
Total 803,041
-------------------------------------------------------------------------------------
FRANCE (9.8%)
Klepierre 52,715 1,366,037
Mercialys 9,738 300,855
Unibail-Rodamco 34,626 5,176,864
---------------
Total 6,843,756
-------------------------------------------------------------------------------------
HONG KONG (5.2%)
Hysan Development 449,368 1,150,682
Link REIT 1,178,587 2,504,910
---------------
Total 3,655,592
-------------------------------------------------------------------------------------
JAPAN (14.6%)
Frontier Real Estate Investment 76 485,838
Japan Logistics Fund 139 927,123
Japan Real Estate Investment 191 1,584,742
Japan Retail Fund Investment 536 2,473,372
Mitsui Fudosan 82,000 1,422,591
Nippon Building Fund 187 1,598,885
NTT Urban Development 1,792 1,727,904
---------------
Total 10,220,455
-------------------------------------------------------------------------------------
NETHERLANDS (7.4%)
Corio 43,861 2,139,006
Eurocommercial Properties 33,719 1,041,347
Wereldhave 27,434 2,045,003
---------------
Total 5,225,356
-------------------------------------------------------------------------------------
SWEDEN (1.8%)
Castellum 40,492 258,712
Hufvudstaden Cl A 162,141 1,009,371
---------------
Total 1,268,083
-------------------------------------------------------------------------------------
SWITZERLAND (1.4%)
PSP Swiss Property 19,956(b) 953,669
-------------------------------------------------------------------------------------
UNITED KINGDOM (12.0%)
British Land 373,327 2,350,500
Derwent London 41,436 638,149
Development Securities 39,366 169,909
Hammerson 261,982 1,328,287
Helical Bar 33,656 182,660
Land Securities Group 317,131 2,465,885
Liberty Intl 77,298 506,670
Segro 732,241 292,781
Shaftesbury 94,903 472,144
---------------
Total 8,406,985
-------------------------------------------------------------------------------------
See accompanying Notes to Portfolio of Investments.
--------------------------------------------------------------------------------
6 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
ISSUER SHARES VALUE(a)
UNITED STATES (18.5%)
AMB Property 25,500 $479,655
AvalonBay Communities 15,140 846,932
BioMed Realty Trust 94,604 967,799
Camden Property Trust 32,397 894,157
DCT Industrial Trust 128,000 522,240
Digital Realty Trust 26,299 942,819
Essex Property Trust 14,686 913,910
Federal Realty Investment Trust 20,659 1,064,352
Host Hotels & Resorts 85,151 714,417
Kimco Realty 71,400 717,570
Mack-Cali Realty 44,000 1,003,200
Public Storage 8,992 588,796
Senior Housing Properties Trust 61,299 1,000,400
Simon Property Group 217 11,160
Taubman Centers 47,642 1,279,664
Ventas 34,249 1,022,675
---------------
Total 12,969,746
-------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost: $95,000,180) $67,255,873
-------------------------------------------------------------------------------------
CLOSED-END FUNDS (0.5%)(c)
ISSUER SHARES VALUE(a)
LUXEMBOURG
ProLogis European Properties 101,409(b) $385,052
-------------------------------------------------------------------------------------
TOTAL CLOSED-END FUNDS
(Cost: $1,409,252) $385,052
-------------------------------------------------------------------------------------
OTHER (0.2%)(c)
ISSUER SHARES VALUE(a)
UNITED KINGDOM
Shaftesbury
Rights 63,268(b) $128,013
-------------------------------------------------------------------------------------
TOTAL OTHER
(Cost: $94,380) $128,013
-------------------------------------------------------------------------------------
MONEY MARKET FUND (0.2%)
SHARES VALUE(a)
RiverSource Short-Term Cash Fund, 0.30% 170,446(d) $170,446
-------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $170,446) $170,446
-------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $96,674,258)(e) $67,939,384
=====================================================================================
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry
classifications as a percentage of total net assets at June 30, 2009:
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE
------------------------------------------------------------------------
Real Estate Investment Trusts (REITs) 84.3% $59,166,034
Real Estate Management & Development 12.3 8,602,904
Other(1) 0.2 170,446
------------------------------------------------------------------------
Total $67,939,384
------------------------------------------------------------------------
(1) Cash & Cash Equivalents.
See accompanying Notes to Portfolio of Investments.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 7
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
(a) Securities are valued by using policies described in Note 2 to the
financial statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Affiliated Money Market Fund -- See Note 7 to the financial statements. The
rate shown is the seven-day current annualized yield at June 30, 2009.
(e) At June 30, 2009, the cost of securities for federal income tax purposes
was approximately $96,674,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $1,935,000
Unrealized depreciation (30,670,000)
-----------------------------------------------------------
Net unrealized depreciation $(28,735,000)
-----------------------------------------------------------
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
--------------------------------------------------------------------------------
8 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS
Statement of Financial Accounting Standards No. 157 (SFAS 157) requires
disclosure regarding the inputs and valuation techniques used to measure fair
value and any changes in valuation inputs or techniques. In addition,
investments shall be disclosed by major category.
SFAS 157 establishes a fair value hierarchy for inputs used in measuring fair
value that maximizes the use of observable inputs and minimizes the use of
unobservable inputs by prioritizing that the most observable input be used when
available. Observable inputs are those that market participants would use in
pricing an investment based on market data obtained from sources independent of
the reporting entity. Unobservable inputs are those that reflect the Fund's
assumptions about the information market participants would use in pricing an
investment. An investment's level within the fair value hierarchy is based on
the lowest level of any input that is deemed significant to the asset or
liability's fair value measurement. When a valuation uses multiple inputs from
varying levels of the hierarchy, the hierarchy level is determined based on the
lowest level input or inputs that are significant to the fair value measurement
in its entirety. The input levels are not necessarily an indication of the risk
or liquidity associated with investments at that level. For example, certain
U.S. government securities are generally high quality and liquid, however, they
are reflected as Level 2 because the inputs used to determine fair value may not
always be quoted prices in an active market.
Fair value inputs are summarized in the three broad levels listed below:
- Level 1 -- Valuations based on quoted prices for investments in active
markets that the Fund has the ability to access at the measurement date.
Valuation adjustments are not applied to Level 1 investments.
- Level 2 -- Valuations based on other significant observable inputs
(including quoted prices for similar securities, interest rates,
prepayment speeds, credit risks, etc.).
- Level 3 -- Valuations based on significant unobservable inputs (including
the Fund's own assumptions and judgment in determining the fair value of
investments).
Inputs that are used in determining fair value of an investment may include
price information, credit data, volatility statistics, and other factors. These
inputs can be either observable or unobservable. The availability of observable
inputs can vary between investments, and is affected by various factors such as
the type of investment, and the volume and level of activity for that investment
or similar investments in the marketplace. The inputs will be considered by the
Fund Administrator, along with any other relevant factors in the calculation of
an investment's fair value. The Fund uses prices and inputs that are current as
of the measurement date, which may include periods of market dislocations.
During these periods, the availability of prices and inputs may be reduced for
many investments. This condition could cause an investment to be reclassified
between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected
in Level 2 despite the availability of closing prices, because the Fund
evaluates and determines whether those closing prices reflect fair value at the
close of the NYSE or require adjustment, as described in Note 2 to the financial
statements -- Valuation of securities.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 9
PORTFOLIO OF INVESTMENTS (continued) -------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
Investments falling into the Level 3 category are primarily supported by quoted
prices from brokers and dealers participating in the market for those
investments. However, these may be classified as Level 3 investments due to lack
of market transparency and corroboration to support these quoted prices.
Additionally, valuation models may be used as the pricing source for any
remaining investments classified as Level 3. These models rely on one or more
significant unobservable inputs and/or significant assumptions by the Fund
Administrator. Inputs used in a valuation model may include, but are not limited
to, financial statement analysis, discount rates and estimated cash flows, and
comparable company data.
The following table is a summary of the inputs used to value the Fund's
investments as of June 30, 2009:
FAIR VALUE AT JUNE 30, 2009
--------------------------------------------------------
LEVEL 1 LEVEL 2
QUOTED PRICES OTHER LEVEL 3
IN ACTIVE SIGNIFICANT SIGNIFICANT
MARKETS FOR OBSERVABLE UNOBSERVABLE
DESCRIPTION IDENTICAL ASSETS INPUTS INPUTS TOTAL
--------------------------------------------------------------------------------------
Equity Securities
Common Stocks $14,809,206(a) $52,446,667(b) $-- $67,255,873
Other
Real Estate Investment
Trusts (REITs) -- 128,013 -- 128,013
--------------------------------------------------------------------------------------
Total Equity Securities 14,809,206 52,574,680 -- 67,383,886
--------------------------------------------------------------------------------------
Other
Closed-End Funds 385,052 -- -- 385,052
Affiliated Money Market
Fund 170,446(c) -- -- 170,446
--------------------------------------------------------------------------------------
Total Other 555,498 -- -- 555,498
--------------------------------------------------------------------------------------
Total $15,364,704 $52,574,680 $-- $67,939,384
--------------------------------------------------------------------------------------
(a) All industry classifications are identified in the Portfolio of
Investments.
(b) Indicates certain securities trading outside the U.S. whose values were
adjusted as a result of significant market movements following the close of
local trading. Therefore, these investment securities were classified as
Level 2 instead of Level 1. All industry classifications are identified in
the Portfolio of Investments.
(c) Money market fund that is a sweep investment for cash balances in the Fund
at June 30, 2009.
--------------------------------------------------------------------------------
10 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
FAIR VALUE MEASUREMENTS (CONTINUED)
HOW TO FIND INFORMATION ABOUT THE FUND'S QUARTERLY PORTFOLIO HOLDINGS
(i) The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission (Commission) for the first and third
quarters of each fiscal year on Form N-Q;
(ii) The Fund's Forms N-Q are available on the Commission's website at
http://www.sec.gov;
(iii)The Fund's Forms N-Q may be reviewed and copied at the Commission's Public
Reference Room in Washington, DC (information on the operations of the
Public Reference Room may be obtained by calling 1-800-SEC-0330); and
(iv) The Fund's complete schedule of portfolio holdings, as filed on Form N-Q,
can be obtained without charge, upon request, by calling toll-free 1(800)
874-1092 in the U.S. or collect 1(212) 682-7600 outside the U.S.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 11
STATEMENT OF ASSETS AND LIABILITIES --------------------------------------------
JUNE 30, 2009 (UNAUDITED)
ASSETS
Investments in securities, at value
Unaffiliated issuers (identified cost $96,503,812) $ 67,768,938
Affiliated money market fund (identified cost $170,446) 170,446
--------------------------------------------------------------------------------
Total investments in securities (identified cost $96,674,258) 67,939,384
Cash 76,435
Foreign currency holdings (identified cost $1,873,352) 1,872,707
Dividends and accrued interest receivable 526,488
Receivable for investment securities sold 4,228,268
--------------------------------------------------------------------------------
Total assets 74,643,282
--------------------------------------------------------------------------------
LIABILITIES
Payable for investment securities purchased 4,374,993
Accrued investment management services fees 54,002
Accrued Stockholder account and registrar fees 793
Accrued administrative services fees 2,739
Other accrued expenses 64,534
--------------------------------------------------------------------------------
Total liabilities 4,497,061
--------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 70,146,221
--------------------------------------------------------------------------------
REPRESENTED BY
Common Stock -- $.01 par value $ 96,180
Additional paid-in capital 205,873,784
Net operating loss (1,453,508)
Accumulated net realized gain (loss) (105,630,971)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign
currencies (28,739,264)
--------------------------------------------------------------------------------
Total -- representing net assets applicable to outstanding Common
Stock $ 70,146,221
--------------------------------------------------------------------------------
Shares outstanding 9,617,979
--------------------------------------------------------------------------------
Net asset value per share of outstanding Common Stock $ 7.29
--------------------------------------------------------------------------------
Market price per share $ 5.57
--------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this
statement.
--------------------------------------------------------------------------------
12 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
STATEMENT OF OPERATIONS --------------------------------------------------------
SIX MONTHS ENDED JUNE 30, 2009 (UNAUDITED)
INVESTMENT INCOME
Income:
Dividends $ 3,017,647
Interest 651
Income distributions from affiliated money market fund 26
Less foreign taxes withheld (228,189)
-------------------------------------------------------------------------------
Total income 2,790,135
-------------------------------------------------------------------------------
Expenses:
Investment management services fees 303,061
Stockholder account and registrar fees 5,627
Administrative services fees 2,739
Compensation of board members 1,035
Custodian fees 43,555
Printing and postage 27,202
Registration fees 8
Professional fees 23,625
Stockholders' meeting fees 27,182
Other 35,436
-------------------------------------------------------------------------------
Total expenses 469,470
-------------------------------------------------------------------------------
Investment income (loss) -- net 2,320,665
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (33,253,053)
Foreign currency transactions (5,693,854)
-------------------------------------------------------------------------------
Net realized gain (loss) on investments (38,946,907)
Net change in unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in foreign
currencies 36,267,398
-------------------------------------------------------------------------------
Net gain (loss) on investments and foreign currencies (2,679,509)
-------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations $ (358,844)
-------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this
statement.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 13
STATEMENTS OF CHANGES IN NET ASSETS --------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2009 DEC. 31, 2008
(UNAUDITED)
OPERATIONS AND DISTRIBUTIONS
Investment income (loss) -- net $ 2,320,665 $ 5,487,210
Net realized gain (loss) on investments (38,946,907) (50,782,115)
Capital gain distributions from investments -- 1,074,598
Net change in unrealized appreciation (depreciation) on
investments and on translation of assets and liabilities in
foreign currencies 36,267,398 (37,099,266)
--------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from operations (358,844) (81,319,573)
--------------------------------------------------------------------------------------------------
Distributions to Stockholders
Net investment income (2,485,578) (2,631,601)
Tax return of capital -- (13,359,685)
--------------------------------------------------------------------------------------------------
Total distributions (2,485,578) (15,991,286)
--------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Value of shares issued for distributions -- 156,636 and 642,736
shares 685,547 6,417,603
Cost of shares purchased in open market -- 102,100 and 151,904
shares (512,858) (2,232,365)
--------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions 172,689 4,185,238
--------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (2,671,733) (93,125,621)
Net assets at beginning of period 72,817,954 165,943,575
--------------------------------------------------------------------------------------------------
Net assets at end of period $ 70,146,221 $ 72,817,954
--------------------------------------------------------------------------------------------------
Excess of distributions over net investment income $ (1,453,508) $ (1,288,595)
--------------------------------------------------------------------------------------------------
The accompanying Notes to Financial Statements are an integral part of this
statement.
--------------------------------------------------------------------------------
14 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
FINANCIAL HIGHLIGHTS -----------------------------------------------------------
Per share operating performance data is designed to allow investors to trace the
operating performance, on a per Common share basis from the beginning net asset
value to the ending net asset value, so that investors can understand what
effect the individual items have on their investment, assuming it was held
throughout the period. Generally, the per share amounts are derived by
converting the actual dollar amounts incurred for each item, as disclosed in the
financial statements, to their equivalent per Common share amounts, using
average shares outstanding during the period.
Total investment return measures the Fund's performance assuming that investors
purchased Fund shares at market price or net asset value as of the beginning of
the period, reinvested all their distributions, and then sold their shares at
the closing market price or net asset value on the last day of the period. The
computations do not reflect taxes or any sales commissions investors may incur
in purchasing or selling Fund shares and taxes investors may incur on
distributions or on the sale of Fund shares. Total investment returns are not
annualized for periods of less than one year.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 15
FINANCIAL HIGHLIGHTS (continued) -----------------------------------------------
PER SHARE OPERATING PERFORMANCE
SIX MONTHS ENDED
JUNE 30, 2009 YEAR ENDED PERIOD ENDED
(UNAUDITED) DEC. 31, 2008 DEC. 31, 2007(a)
Net asset value, beginning of period $7.61 $18.29 $23.88(b)
---------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .24 .60 .35
Net gains (losses) (both realized and
unrealized) (.27) (9.42) (4.95)
---------------------------------------------------------------------------------------------------------
Total from investment operations (.03) (8.82) (4.60)
---------------------------------------------------------------------------------------------------------
Offering costs -- -- (.05)
---------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from net investment income (.26) (.29) (.35)
Distributions in excess of net investment
income -- -- (.53)
Tax return of capital -- (1.46) --
---------------------------------------------------------------------------------------------------------
Total distributions (.26) (1.75) (.88)
---------------------------------------------------------------------------------------------------------
Issuance of Common Stock in distributions (.03) (.11) (.06)
---------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.29 $7.61 $18.29
---------------------------------------------------------------------------------------------------------
Market value, end of period $5.57 $5.60 $16.15
---------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $70 $73 $166
---------------------------------------------------------------------------------------------------------
Total expenses(c) 1.51%(d) 1.26% 1.18%(d)
---------------------------------------------------------------------------------------------------------
Net investment income (loss) 7.45%(d) 4.24% 2.82%(d)
---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 136% 241% 134%
---------------------------------------------------------------------------------------------------------
Total return based upon market price 5.42% (58.47%) (32.20%)(e)
---------------------------------------------------------------------------------------------------------
Total return based upon net asset value 1.53% (50.17%) (19.61%)
---------------------------------------------------------------------------------------------------------
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the period from May 30, 2007 (commencement of operations) to Dec. 31,
2007.
(b) Net asset value, beginning of period, of $23.875 reflects a deduction of
$1.125 per share sales charge from the initial offering price of $25.00 per
share.
(c) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(d) Adjusted to an annual basis.
(e) Based upon initial offering price of $25.00 per share.
The accompanying Notes to Financial Statements are an integral part of this
statement.
--------------------------------------------------------------------------------
16 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS -------------------------------------------------
(UNAUDITED AS OF JUNE 30, 2009)
1. ORGANIZATION
Seligman LaSalle International Real Estate Fund, Inc. (the Fund) is registered
under the Investment Company Act of 1940, as amended (1940 Act) as a non-
diversified, closed-end management investment company. The Fund has 100 million
authorized shares of Common Stock which trades on the New York Stock Exchange
(NYSE) under the symbol "SLS".
The Fund's primary investment objective is long-term capital appreciation and
its secondary objective is current income. In seeking its objectives, the Fund
invests at least 80% of its managed assets (the net asset value of the Fund's
Common Stock plus the liquidation preference of any issued and outstanding
preferred shares and the principal amount of any borrowings used for leverage)
in equity and equity-related securities issued by international real estate
companies.
Although the Fund has no current intention to do so, the Fund is authorized and
reserves the flexibility to use leverage through the issuance of preferred
shares and/or borrowings, including the issuance of debt securities. The costs
of issuing preferred shares and/or a borrowing program would be borne by the
Fund's Common Stockholders and consequently would result in a reduction of net
asset value of shares of Common Stock.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
Preparing financial statements that conform to U.S. generally accepted
accounting principles requires management to make estimates (e.g., on assets,
liabilities and contingent assets and liabilities) that could differ from actual
results.
VALUATION OF SECURITIES
All securities are valued at the close of business of the NYSE. Securities
traded on national securities exchanges or included in national market systems
are valued at the last quoted sales price. Debt securities are generally traded
in the over-the-counter market and are valued by an independent pricing service
using an evaluated bid. When market quotes are not readily available, the
pricing service, in determining fair values of debt securities, takes into
consideration such factors as current quotations by broker/dealers, coupon,
maturity, quality, type of issue, trading characteristics, and other yield and
risk factors it deems relevant in determining valuations. Foreign securities are
valued based on quotations from the principal market in which such securities
are normally traded. The procedures adopted by the Board of Directors (the
Board) generally contemplate the use of fair valuation in the event that price
quotations or
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 17
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
valuations are not readily available, price quotations or valuations from other
sources are not reflective of market value and thus deemed unreliable, or a
significant event has occurred in relation to a security or class of securities
(such as foreign securities) that is not reflected in price quotations or
valuations from other sources. A fair value price is a good faith estimate of
the value of a security at a given point in time.
Many securities markets and exchanges outside the U.S. close prior to the close
of the NYSE and therefore the closing prices for securities in such markets or
on such exchanges may not fully reflect events that occur after such close but
before the close of the NYSE, including significant movements in the U.S. market
after foreign exchanges have closed. Accordingly, in those situations,
Ameriprise Financial, Inc. (Ameriprise Financial), parent company of RiverSource
Investments, LLC (RiverSource Investments or the Investment Manager) as
administrator to the Fund, will fair value foreign securities pursuant to
procedures adopted by the Board, including utilizing a third party pricing
service to determine these fair values. These procedures take into account
multiple factors, including movements in the U.S. securities markets, to
determine a good faith estimate that reasonably reflects the current market
conditions as of the close of the NYSE.
Short-term securities maturing in more than 60 days from the valuation date are
valued at the market price or approximate market value based on current interest
rates. Typically, those maturing in 60 days or less that originally had
maturities of more than 60 days at acquisition date are valued at amortized cost
using the market value on the 61(st) day before maturity. Short-term securities
maturing in 60 days or less at acquisition date are valued at amortized cost.
Amortized cost is an approximation of market value. Investments in money market
funds are valued at net asset value.
FOREIGN CURRENCY TRANSLATIONS
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. In the Statement of Operations, net realized
gains or losses from foreign currency transactions, if any, may arise from sales
of foreign currency, closed forward contracts, exchange gains or losses realized
between the trade date and settlement date on securities transactions, and other
translation gains or losses on dividends, interest income and foreign
withholding
--------------------------------------------------------------------------------
18 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
taxes. At June 30, 2009, foreign currency holdings consisted of multiple
denominations.
GUARANTEES AND INDEMNIFICATIONS
Under the Fund's organizational documents, its officers and directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, certain of the Fund's contracts with its
service providers contain general indemnification clauses. The Fund's maximum
exposure under these arrangements is unknown since the amount of any future
claims that may be made against the Fund cannot be determined and the Fund has
no historical basis for predicting the likelihood of any such claims.
FEDERAL TAXES
The Fund's policy is to comply with Subchapter M of the Internal Revenue Code
that applies to regulated investment companies and to distribute substantially
all of its taxable income (which includes net short-term capital gains) to
Stockholders. No provision for income or excise taxes is thus required.
Management of the Fund has concluded that there are no significant uncertain tax
positions that would require recognition in the financial statements. Generally,
the tax authorities can examine all the tax returns filed for the last three
years.
DIVIDENDS TO STOCKHOLDERS
Effective Jan. 8, 2009, the Fund adopted an earned distribution policy. Under
this policy, the Fund intends to make distributions to holders of Common Stock
that are approximately equal to all distributions received by the Fund from its
underlying portfolio investments (regardless of their characterization for tax
purposes), less Fund expenses. Capital gains, when available, are distributed
along with the last income dividend of the calendar year.
Prior to Jan. 8, 2009, the Fund had a level rate distribution policy under which
the Fund paid quarterly distributions to holders of Common Stock equal to 1.75%
of the Fund's initial public offering price of $25.00, or approximately 7% on an
annual basis.
Dividends and other distributions to Stockholders are recorded on ex-dividend
dates.
OTHER
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including amortization of premium, market discount and original issue discount
using the effective interest method, is accrued daily.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 19
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
The Fund receives distributions from holdings in real estate investment trusts
(REITs) which report information on the character components of their
distributions annually. REIT distributions are allocated to dividend income,
capital gain and return of capital based on management's estimates. Return of
capital is recorded as a reduction of the cost basis of securities held.
Management's estimates are subsequently adjusted when the actual character of
the distributions are disclosed by the REITs which could result in a
proportionate increase in returns of capital to Stockholders.
3. INVESTMENTS IN DERIVATIVES
The Fund may invest in certain derivative instruments, which are transactions
whose values depend on or are derived from (in whole or in part) the value of
one or more other assets, such as securities, currencies, commodities or
indices. Such derivative instruments may be used to maintain cash reserves while
maintaining exposure to certain other assets, to offset anticipated declines in
values of investments, to facilitate trading, to reduce transaction costs, and
to pursue higher investment returns. The Fund may also use derivative
instruments to mitigate certain investment risks, such as foreign currency
exchange rate risk, interest rate risk, and credit risk.
FORWARD FOREIGN CURRENCY CONTRACTS
The Fund may enter into forward foreign currency contracts in connection with
settling purchases or sales of securities, to hedge the currency exposure
associated with some or all of the Fund's securities or as part of its
investment strategy. A foreign currency contract is an agreement between two
parties to buy and sell a currency at a set price on a future date. The market
value of a foreign currency contract fluctuates with changes in foreign currency
exchange rates. Foreign currency contracts are marked to market daily based upon
foreign currency exchange rates from an independent pricing service and the
change in value is recorded as unrealized appreciation or depreciation. The Fund
will record a realized gain or loss when the foreign currency contract is
closed.
The risks of foreign currency contracts include movement in the values of the
foreign currencies relative to the U.S. dollar (or other foreign currencies) and
the possibility that the counterparty will not complete its contractual
obligation, which may be in excess of the amount reflected in the Statement of
Assets and Liabilities.
EFFECTS OF DERIVATIVE TRANSACTIONS ON THE FINANCIAL STATEMENTS
The following tables are intended to provide additional information about the
effect of derivatives on the financial statements of the Fund including: the
fair value of derivatives by risk category and the location of those fair values
in the
--------------------------------------------------------------------------------
20 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
Statement of Assets and Liabilities; the impact of derivative transactions on
the Fund's operations over the period including realized gains or losses and
unrealized gains or losses. The derivative schedules following the Portfolio of
Investments present additional information regarding derivative instruments
outstanding at the end of the period, if any.
FAIR VALUES OF DERIVATIVE INSTRUMENTS AT JUNE 30, 2009
At June 30, 2009, the Fund had no outstanding derivatives.
EFFECT OF DERIVATIVE INSTRUMENTS IN THE STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2009
AMOUNT OF REALIZED GAIN OR (LOSS) ON DERIVATIVES
RECOGNIZED IN INCOME
------------------------------------------------------------------
FORWARD
CURRENCY
RISK EXPOSURE CATEGORY CONTRACTS
------------------------------------------------------------------
Foreign exchange contracts $(829)
------------------------------------------------------------------
Total $(829)
------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION) ON DERIVATIVES
RECOGNIZED IN INCOME
------------------------------------------------------------------
FORWARD
CURRENCY
RISK EXPOSURE CATEGORY CONTRACTS
------------------------------------------------------------------
Foreign exchange contracts $173
------------------------------------------------------------------
Total $173
------------------------------------------------------------------
4. EXPENSES
INVESTMENT MANAGEMENT SERVICES FEES
Under an Investment Management Services Agreement, the Investment Manager is
responsible for the management of the Fund. Day-to-day portfolio management of
the Fund is provided by the Fund's subadvisers. See Subadvisory and delegation
agreements below. Effective June 15, 2009, the management fee is equal to 0.915%
of the Fund's average daily managed assets. Prior to June 15, 2009, the
Investment Manager received a fee, equal to 0.98% of the Fund's average daily
managed assets. The management fee for the six months ended June 30, 2009 was
0.97% of the Fund's average daily managed assets. The reduction in the
investment management services fee on June 15, 2009 is related to the
elimination of the administrative portion of the management fee that is now
being charged separately to the Fund through the Administrative Services
Agreement with Ameriprise Financial. See Administrative services fees below for
more information.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 21
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
SUBADVISORY AND DELEGATION AGREEMENTS
Under a subadvisory agreement between the Investment Manager and LaSalle
Investment Management (Securities), L.P. (referred to as LaSalle U.S.) and a new
delegation agreement between LaSalle U.S. and LaSalle Investment Management
Securities B.V. (collectively LaSalle), LaSalle is responsible for furnishing
investment advice, research and assistance with respect to the Fund's
investments. The Investment Manager contracts with and compensates LaSalle U.S.
for the provision of day-to-day portfolio management of the Fund's assets. Under
the subadvisory agreement, the Investment Manager pays LaSalle U.S. a fee equal
to 0.49% of the Fund's average daily managed assets.
ADMINISTRATIVE SERVICES FEES
Under an Administrative Services Agreement, effective June 15, 2009, the Fund
pays Ameriprise Financial a fee for administration and accounting services equal
to a percentage of the Fund's average daily managed assets that declines from
0.08% to 0.05% annually as the Fund's assets increase. The fee was 0.01% of the
Fund's average daily managed assets for the six months ended June 30, 2009
(annualized). Prior to June 15, 2009, Ameriprise Financial administered certain
aspects of the Fund's business and other affairs for no additional fee. The fees
payable under the Administrative Services Agreement beginning on June 15, 2009
are offset by corresponding decreases in the investment management fees charged
to the Fund and the elimination of separate fees that were previously payable to
State Street Bank and Trust Company, in its capacity as the Fund's prior
administrative agent.
OTHER FEES
Other expenses are for, among other things, certain expenses of the Fund or the
Board including: Fund boardroom and office expense, employee compensation,
employee health and retirement benefits, and certain other expenses. Payment of
these Fund and Board expenses is facilitated by a company providing limited
administrative services to the Fund and the Board. For the six months ended June
30, 2009, other expenses paid to this company were $275.
COMPENSATION OF BOARD MEMBERS
Under a Deferred Compensation Plan, the board members who are not "interested
persons" of the Fund under the 1940 Act may defer receipt of their compensation.
Deferred amounts are treated as though equivalent dollar amounts had been
invested in shares of the Fund or other funds in the RiverSource Family of
Funds. The Fund's liability for these amounts is adjusted for market value
changes and remains in the Fund until distributed in accordance with the
Deferred Compensation Plan.
--------------------------------------------------------------------------------
22 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $84,439,234 and $85,203,863, respectively, for the six
months ended June 30, 2009. Realized gains and losses are determined on an
identified cost basis.
6. DIVIDEND INVESTMENT PLAN AND STOCK REPURCHASE PROGRAM
The Fund, in connection with its Dividend Investment Plan (the Plan), issues
shares of its Common Stock, as needed, to satisfy Plan requirements. A total of
156,636 shares were issued to Plan participants during the six months ended June
30, 2009 for proceeds of $685,547, a weighted average discount of 29.42% from
the net asset value of those shares.
The Fund has a stock repurchase program that allows the Fund to make open market
purchases of its Common Stock from time to time when the Fund is trading at a
discount to its net asset value, in an amount approximately sufficient to offset
the growth in the number of shares of Common Stock issued as a result of the
reinvestment of the portion of its distributions to Stockholders that are
attributable to distributions received by the Fund from its underlying portfolio
investments. For six months ended June 30, 2009, the Fund purchased 102,100
shares in the open market at an aggregate cost of $512,858, which represented a
weighted average discount of 24.17% from the net asset value of those acquired
shares. Shares of Common Stock repurchased to satisfy Plan requirements or in
the open market are retired and no longer outstanding.
The Fund reserves the right to amend or terminate the Plan as applied to any
distribution paid subsequent to written notice of the change sent to
participants in the Plan at least 90 days before the record date for such
distribution. There are no service or brokerage charges to participants in the
Plan; however, the Fund reserves the right to amend the Plan to include a
service charge payable to the Fund by the participants. The Fund also reserves
the right to amend the Plan to provide for payment of brokerage fees by Plan
participants in the event the Plan is changed to provide for open market
purchases of Common Stock on behalf of Plan participants. All correspondence
concerning the Plan should be directed to American Stock Transfer & Trust
Company, 59 Maiden Lane, New York, New York 10038.
The Fund may make additional purchases of its Common Stock in the open market
and elsewhere at such prices and in such amounts as the Board may deem
advisable. No such additional purchases were made during the six months ended
June 30, 2009.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 23
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
7. AFFILIATED MONEY MARKET FUND
The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market fund established for the exclusive use of the funds in the
RiverSource Family of Funds and other institutional clients of RiverSource
Investments. The cost of the Fund's purchases and proceeds from sales of shares
of RiverSource Short-Term Cash Fund aggregated $1,286,369 and $1,115,923,
respectively, for the six months ended June 30, 2009. The income distributions
received with respect to the Fund's investment in RiverSource Short-Term Cash
Fund can be found in the Statement of Operations and the Fund's invested balance
in RiverSource Short-Term Cash Fund at June 30, 2009, can be found in the
Portfolio of Investments.
8. FEDERAL TAX INFORMATION
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of foreign currency
transactions, passive foreign investment company (PFIC) holdings, re-
characterization of REIT distributions, post-October losses and losses deferred
due to wash sales. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
For federal income tax purposes, the Fund had a capital loss carry-over of
$47,126,092 at Dec. 31, 2008, that if not offset by capital gains will expire as
follows:
2015 2016
$6,138,672 $40,987,420
Because the measurement periods for a regulated investment company's income are
different for excise tax purposes versus income tax purposes, special rules are
in place to protect the amount of earnings and profits needed to support excise
tax distributions. As a result, the Fund is permitted to treat net capital
losses realized between Nov. 1, 2008 and its fiscal year end (post-October loss)
as occurring on the first day of the following tax year. At Dec. 31, 2008, the
Fund had a post-October loss of $13,774,385 that is treated for income tax
purposes as occurring on Jan. 1, 2009.
It is unlikely the Board will authorize a distribution of any net realized
capital gains until the available capital loss carry-over has been offset or
expires. There
--------------------------------------------------------------------------------
24 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
is no assurance that the Fund will be able to utilize all of its capital loss
carry-over before it expires.
9. RISKS RELATING TO CERTAIN INVESTMENTS
DIVERSIFICATION RISK
The Fund is non-diversified. A non-diversified fund may invest more of its
assets in fewer companies than if it were a diversified fund. The Fund may be
more exposed to the risks of loss and volatility than a fund that invests more
broadly.
REAL ESTATE INDUSTRY RISK
Because of the Fund's policy of concentrating its investments in securities of
companies operating in the real estate industry, the Fund is more susceptible to
risks associated with the ownership of real estate and with the real estate
industry in general. These risks can include fluctuations in the value of the
underlying properties, defaults by borrowers or tenants, market saturation,
decreases in market rates for rents, and other economic, political, or
regulatory occurrences affecting the real estate industry, including REITs.
REITs depend upon specialized management skills, may have limited financial
resources, may have less trading volume, and may be subject to more abrupt or
erratic price movements than the overall securities markets. REITs are also
subject to the risk of failing to qualify for tax-free pass-through of income.
Some REITs (especially mortgage REITs) are affected by risks similar to those
associated with investments in debt securities including changes in interest
rates and the quality of credit extended.
10. SUBSEQUENT EVENTS
Management has evaluated Fund related events and transactions that occurred
during the period from the date of the Statement of Assets and Liabilities
through Aug. 24, 2009, the date of issuance of the Fund's financial statements.
There were no events or transactions that occurred during the period that
materially impacted the amounts or disclosures in the Fund's financial
statements.
11. INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS
In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The plaintiffs allege
that they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 25
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the District Court).
In response to defendants' motion to dismiss the complaint, the District Court
dismissed one of plaintiffs' four claims and granted plaintiffs limited
discovery. Defendants moved for summary judgment in April 2007. Summary judgment
was granted in the defendants' favor on July 9, 2007. The plaintiffs filed a
notice of appeal with the Eighth Circuit Court of Appeals (the Eighth Circuit)
on August 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings. On August
6, 2009, defendants filed a writ of certiorari with the U.S. Supreme Court,
asking the U.S. Supreme Court to stay the District Court proceedings while the
U.S. Supreme Court considers and rules in a case captioned Jones v. Harris
Associates, which involves issues of law similar to those presented in the
Gallus case.
In December 2005, without admitting or denying the allegations, American Express
Financial Corporation (AEFC, which is now known as Ameriprise Financial, Inc.
(Ameriprise Financial)), entered into settlement agreements with the Securities
and Exchange Commission (SEC) and Minnesota Department of Commerce (MDOC)
related to market timing activities. As a result, AEFC was censured and ordered
to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings,
and have made regular reports to the RiverSource Funds' Boards of
Directors/Trustees.
On November 7, 2008, RiverSource Investments, LLC, a subsidiary of Ameriprise
Financial, Inc., acquired J. & W. Seligman & Co. Incorporated (Seligman). In
late 2003, Seligman conducted an extensive internal review concerning mutual
fund trading practices. Seligman's review, which covered the period 2001-2003,
noted one arrangement that permitted frequent trading in certain open-end
registered investment companies managed by Seligman (the Seligman Funds); this
arrangement was in the process of being closed down by
--------------------------------------------------------------------------------
26 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
--------------------------------------------------------------------------------
Seligman before September 2003. Seligman identified three other arrangements
that permitted frequent trading, all of which had been terminated by September
2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these
four arrangements to its clients and to shareholders of the Seligman Funds.
Seligman also provided information concerning mutual fund trading practices to
the SEC and the Office of the Attorney General of the State of New York (NYAG).
In September 2006, the NYAG commenced a civil action in New York State Supreme
Court against Seligman, Seligman Advisors, Inc. (now known as RiverSource Fund
Distributors, Inc.), Seligman Data Corp. and Brian T. Zino (collectively, the
Seligman Parties), alleging, in substance, that the Seligman Parties permitted
various persons to engage in frequent trading and, as a result, the prospectus
disclosure used by the registered investment companies then managed by Seligman
was and had been misleading. The NYAG included other related claims and also
claimed that the fees charged by Seligman to the Seligman Funds were excessive.
On March 13, 2009, without admitting or denying any violations of law or
wrongdoing, the Seligman Parties entered into a stipulation of settlement with
the NYAG and settled the claims made by the NYAG. Under the terms of the
settlement, Seligman paid $11.3 million to four Seligman Funds. This settlement
resolved all outstanding matters between the Seligman Parties and the NYAG. In
addition to the foregoing matter, the New York staff of the SEC indicated in
September 2005 that it was considering recommending to the Commissioners of the
SEC the instituting of a formal action against Seligman and Seligman Advisors,
Inc. relating to frequent trading in the Seligman Funds. Seligman responded to
the staff in October 2005 that it believed that any action would be both
inappropriate and unnecessary, especially in light of the fact that Seligman had
previously resolved the underlying issue with the Independent Directors of the
Seligman Funds and made recompense to the affected Seligman Funds. There have
been no further developments with the SEC on this matter.
Ameriprise Financial and certain of its affiliates have historically been
involved in a number of legal, arbitration and regulatory proceedings, including
routine litigation, class actions, and governmental actions, concerning matters
arising in connection with the conduct of their business activities. Ameriprise
Financial believes that the Funds are not currently the subject of, and that
neither Ameriprise Financial nor any of its affiliates are the subject of, any
pending legal, arbitration or regulatory proceedings that are likely to have a
material adverse effect on the Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. Ameriprise
Financial is required to make 10-Q, 10-K and, as necessary, 8-K filings with the
Securities and
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 27
NOTES TO FINANCIAL STATEMENTS (continued) -------------------------------------
Exchange Commission on legal and regulatory matters that relate to Ameriprise
Financial and its affiliates. Copies of these filings may be obtained by
accessing the SEC website at www.sec.gov.
There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds. Further,
although we believe proceedings are not likely to have a material adverse effect
on the Funds or the ability of Ameriprise Financial or its affiliates to perform
under their contracts with the Funds, these proceedings are subject to
uncertainties and, as such, we are unable to estimate the possible loss or range
of loss that may result. An adverse outcome in one or more of these proceedings
could result in adverse judgments, settlements, fines, penalties or other relief
that could have a material adverse effect on the consolidated financial
condition or results of operations of Ameriprise Financial.
--------------------------------------------------------------------------------
28 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
PROXY VOTING ------------------------------------------------------------------
The policy of the Board is to vote the proxies of the companies in which the
Fund holds investments consistent with the procedures as stated in the Fund's
most recent annual Form N-CSR (which includes the Fund's Stockholder report) as
filed with the Securities and Exchange Commission (SEC), which you may obtain at
the SEC's website at http://www.sec.gov. Information regarding how the Fund
voted proxies relating to portfolio securities is filed with the SEC by August
31 for the most recent 12-month period ending June 30 of that year, and is
available without charge by visiting seligman.com; or searching the website of
the SEC at www.sec.gov.
CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM -----------------------
On March 11, 2009, Ernst & Young LLP was selected as the Fund's independent
registered public accounting firm for the 2009 fiscal year. A majority of the
Fund's Board of Directors, including a majority of the Independent Directors,
approved the appointment of Ernst & Young LLP effective March 18, 2009. On June
9, 2009, Fund Stockholders ratified the Board's selection of Ernst & Young LLP
as the Fund's independent registered public accounting firm for 2009. The
predecessor independent registered public accounting firm's reports on the
Fund's financial statements for the year ended Dec. 31, 2008 and the year ended
Dec. 31, 2007 contained no adverse opinion or disclaimer of opinion and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
During such fiscal periods and through March 11, 2009 there were no
disagreements between the Fund and the predecessor independent registered public
accounting firm on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedures, which such disagreements,
if not resolved to the satisfaction of the predecessor independent registered
public accounting firm, would have caused them to make reference to the subject
matter of the disagreement in connection with their reports on the financial
statements for such fiscal periods.
--------------------------------------------------------------------------------
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT 29
PROXY RESULTS -----------------------------------------------------------------
The First Annual Meeting of Stockholders of the Fund was held on June 9, 2009.
Stockholders voted in favor of each of the Board's two proposals. The
description of each proposal and number of shares voted are as follows:
PROPOSAL 1
To elect four Directors to the Fund's Board, each to hold office until the 2012
annual meeting of Stockholders of the Fund and until their successors are
elected and qualify:
DIRECTOR FOR WITHHELD
----------------------------------------------
Kathleen A. Blatz 7,952,695 383,628
Pamela G. Carlton 7,947,737 388,586
Alison Taunton-Rigby 7,949,533 386,790
William F. Truscott 7,955,854 380,469
----------------------------------------------
PROPOSAL 2
To ratify the selection of Ernst & Young LLP as the Fund's independent
registered public accounting firm for 2009:
FOR AGAINST ABSTAINING
----------------------------------------------
8,142,981 144,849 48,491
----------------------------------------------
--------------------------------------------------------------------------------
30 SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND -- 2009 SEMIANNUAL REPORT
SELIGMAN LASALLE INTERNATIONAL REAL ESTATE FUND
200 Ameriprise Financial Center
Minneapolis, MN 55474
SELIGMAN.COM
You can obtain the Fund's most recent periodic reports and
other regulatory filings by contacting your financial
advisor or American Stock Transfer & Trust Company at 1(718)
921-8124. These reports and other filings can also be found
on the Securities and Exchange Commission's EDGAR Database.
You should read these reports and other filings carefully
before investing. You should consider the investment
objective, strategies, risks and expenses of the Fund before
investing. The Fund is part of the RiverSource Family of
Funds managed by RiverSource Investments, LLC.
(SELIGMAN LOGO) (C)2009 RiverSource Investments, LLC. SL-9945 A (8/09)
Item 2. Code of Ethics. Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert. Not applicable for semi-annual
reports.
Item 4. Principal Accountant Fees and Services. Not applicable for
semi-annual reports.
Item 5. Audit Committee of Listed Registrants. Not applicable.
Item 6. The complete schedule of investments is included in Item 1 of this
Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies. Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Total Number Total Number of Shares Purchased Maximum Number of Shares that May
of Shares Average Price as Part of Publicly Announced Yet Be Purchased Under the Plans
Period Purchased Paid Per Share Plans or Programs(1) or Programs(1)
------------------ ------------ -------------- -------------------------------- ---------------------------------
1-01-09 to 1-31-09 -- $ -- -- N/A
2-01-09 to 2-28-09 -- -- -- N/A
3-01-09 to 3-31-09 16,400 4.25 16,400 N/A
4-01-09 to 4-30-09 23,700 4.99 23,700 N/A
5-01-09 to 5-31-09 62,000 5.24 62,000 N/A
6-01-09 to 6-30-09 -- -- -- N/A
(1) As stated in the registrant's initial registration statement dated May 24,
2007, the registrant may purchase its shares of Common Stock in the open
market, when such shares are trading at a discount to net asset value, in
an amount approximately sufficient to offset the growth in the number of
shares of its Common Stock attributable to the reinvestment of the portion
of its distributions to stockholders that are attributable to distributions
received by the Fund from its underlying portfolio investments.
Item 10. Submission of matters to a vote of security holders. Not
applicable.
Item 11. Controls and Procedures.
(a) Based upon their evaluation of the registrant's disclosure controls and
procedures as conducted within 90 days of the filing date of this Form N-CSR,
the registrant's Principal Financial Officer and Principal Executive Officer
have concluded that those disclosure controls and procedures provide reasonable
assurance that the material information required to be disclosed by the
registrant on this report is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.
(b) There were no changes in the registrant's internal controls over financial
reporting that occurred during the registrant's last fiscal half-year (the
registrant's second fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Not applicable for semi-annual reports.
(a)(2) Separate certification for the Registrant's principal executive officer
and principal financial officer, as required by Section 302 of the
Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of
1940, are attached as EX.99.CERT.
(a)(3) Not applicable.
(b) A certification by the Registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Rule 30a-2(b) under the Investment Company Act of 1940, is attached
as EX.99.906 CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Seligman LaSalle International Real
Estate Fund, Inc.
By /s/ Patrick T. Bannigan
---------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date September 2, 2009
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
By /s/ Patrick T. Bannigan
---------------------------------
Patrick T. Bannigan
President and Principal Executive
Officer
Date September 2, 2009
By /s/ Jeffrey P. Fox
---------------------------------
Jeffrey P. Fox
Treasurer and Principal Financial
Officer
Date September 2, 2009