USNA USANA Health Sciences

As a shareholder of a Fund, you may incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The first line of the following table provides information about the actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the following table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your on going costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

THE PORTFOLIO MANAGER

TimesSquare Capital Management, LLC (“TimesSquare”), the Fund’s subadvisor, utilizes a bottom-up fundamental approach to small-cap investing. Led by co-managers Grant Babyak and Ken Duca, the investment team at TimesSquare believes its proprietary fundamental research skills, which place a particular emphasis on the assessment of management quality and an in-depth understanding of superior business models, enable the team to build a diversified portfolio of small-cap growth stocks designed to generate good risk-adjusted returns. When selecting small-cap growth stocks, Fund management utilizes a fundamental, bottom-up process to identify companies that demonstrate consistent and sustainable revenue and earnings growth, offer distinct and sustainable competitive advantages, have strong, experienced management teams, have stocks selling at reasonable valuations, and that Fund management believes have the potential to appreciate in price by 25% to 50% within the next 12 to 18 months.

THE YEAR IN REVIEW

For the year ending December 31, 2012, the Fund’s Institutional Class returned 13.10%, while its benchmark, the Russell 2000 ^® Growth Index (the “Index”), returned 14.59%.

Looking back on the U.S. equity markets, 2012 was a Rip Van Winkle year during which one almost wished to have fallen asleep on January 1 and to have not awakened until December 31. Having done so, one would have seen strong double-digit returns for all the major size and style indices in the 16% to 18% range. Unemployment fell from 8.5% to 7.8%, home prices steadily rose throughout the year, annual automotive sales reached its highest level in five years, and inflation declined from over 3% to under 2%. Meanwhile the Federal Reserve maintained its zero interest rate policy and national elections decisively maintained the status quo in terms of the President as well as majorities in both the House and Senate. Globally, despite concerns to the contrary, the Euro remained intact and many of markets that lagged in 2011 — such as Greece — took the lead in 2012.

Those that stayed awake for 2012, however, saw many sources for potential insomnia. While the unemployment rate dipped, it remained well above the Fed’s target of 6.5% — the finishing line for its ongoing monetary stimulus activities. Although November’s elections were decisive, the Presidential and Congressional races were hotly contested with a host of economic policies as central issues. Not the least of which was the Affordable Care Act (health care reform) that was enacted in 2010 but formally upheld by the Supreme Court in June 2012. Many corporations restrained expenditures pending clarity on fiscal and monetary policies, which in part resulted in the Institute for Supply Management’s measure of manufacturing activity bounced between expansion and contraction over the last seven months with half of the industries in decline — a sign of an uneven recovery. Gauges of consumer confidence and sentiment closed 2012 at the same or higher levels than they began the year, though both fell sharply in the final months. By one extent, 2012 did not officially come to a close until January 2, 2013. That was when the U.S. government finally reached some measure of accommodation on the “fiscal cliff” — an issue that weighed on the economy for the latter part of 2012 — and passed the American Taxpayer Relief Act of 2012.

Among small to mid-cap growth stocks in 2012, returns came from a variety of areas. Sector performance was mixed with the economically sensitive materials & processing as well as the more stable health care outperforming. There was a similar mix of “offense” and “defense” at the other end of the return scale, with energy and utilities lagging all other sectors. Valuation was generally preferred with the value indices ahead of their growth counterparts, and even among growth stocks the lower valuation ones performed better than higher valuations. Lastly, while the market was up sharply for the year, those stocks with lower risk — as defined by their lower beta — outperformed riskier stocks.

In this environment, the Portfolio underperformed the Russell 2000 ^® Growth benchmark in 2012. During the year, the Portfolio benefited from stock selection in the producer durables, technology, consumer staples and health care sectors. Results were mixed from the financial services sector while our positioning in the consumer discretionary and energy sectors detracted this year.

Our producer durables holdings powered the Portfolio ahead of the benchmark throughout the year. The top contributor from this sector was On Assignment, the professional staffing specialist for information technology (IT), medical and engineering placements. At the beginning of the year, On Assignment reported better-than-expected results and forward guidance. There were strong employment trends in professional job categories — especially IT, strong bill rate increases due to a shortage of skilled workers, and secular growth for temporary staffing. The demand for On Assignment’s service continued, as did demand for its stock, which was evident during the company’s secondary offering in the third quarter. By the end of the year On Assignment had posted an 81% gain. Climbing 34% was CoStar Group, the provider of information, marketing and analytic services to the commercial real estate industry in the U.S. and U.K. In the second quarter CoStar arrived at a settlement with the Federal Trade Commission enabling it to move forward with the acquisition of LoopNet, an online commercial real estate listing service. That allowed CoStar to focus on cost synergies and new cross-selling revenue opportunities. Genesee & Wyoming began the year on a slow track but sped up by the end. The freight railroad reported a volume decline — primarily coal — in the first quarter, in part because of a track disruption as repairs to the Edith River Bridge in Australia took longer than expected. Later in the year, Genesee & Wyoming announced the acquisition of RailAmerica, Inc., which would combine the largest short line and regional freight railroads in North America. The savings from the new combination’s tax treatment and financing should prove beneficial to free cash flow and earnings next year and beyond. In December, the Department of Transportation’s Surface Transportation Board formally approved the deal, it closed prior to year-end, and Genesee & Wyoming ended with a 26% price gain. Leading a late in the year charge was Generac Holdings with a 58% return. The commercial and residential generator manufacturer began the fourth quarter preannouncing impressively higher earnings and forward guidance and then issued a report backing up that confidence. This was before superstorm Sandy highlighted the fact that only 2.5% of homes had automatic standby generators, pointing to Generac’s large potential market. 2012 was less favorable to our positions in Clean Harbors and Angie’s List. An industrial waste treatment and disposal company, Clean Harbors

saw slowdowns for most of the year from its end markets in the energy sector, particularly the Canadian oil sands. The pressure on its stock price lifted toward the end of the year when Clean Harbors announced the acquisition of Safety-Kleen, a leading provider of environmental and recycling services. That deal should be immediately accretive to earnings and made Clean Harbors the largest hazardous waste recycle and disposal company in the U.S. Still, the earlier weakness led to a -14% price decline for 2012. Angie’s List, the consumer rating and review service geared toward local commerce, showed better-than-expected revenues, but earnings fell short of expectations as a result of higher expenses from its new e-commerce offering. However, Angie’s List saw notable growth in the number of service providers wishing to be part of its “Big Deal” online storefront and we remained confident with regards to its fast-growing subscription model, though its share price was down -26%.

As was often the case, the technology sector was home to significant highs and lows in the Portfolio, though this year the overall effect contributed to our relative performance. The largest position in the Portfolio, Ultimate Software Group, notched a 45% gain. A leading provider of combined payroll and human resources software solutions, Ultimate repeatedly reported revenues and earnings above expectations. Several new, large client bookings accelerated growth and should continue to do so since Ultimate’s annual client retention rate exceeded 95%. Bringing light to the Portfolio was Cymer Inc., a developer of lasers used by photolithography machines in semiconductor fabrication process. Earlier in the year Cymer announced significant progress developing Extreme Ultra Violet (EUV) lasers, which will power the next generation of lithography. Then in the fourth quarter the dominant manufacturer of photolithography machines — ASML Holdings — announced an agreement to acquire Cymer. The company’s stock soared 61% before we sold the position. On the downward slope this year was Volterra Semiconductor with a price decline of -33%. A designer of integrated power management semiconductors, Volterra was our holding with the most direct exposure to PC and notebook sales, which have been on the wane. At the end of the year, that caused the company to reduce its forward guidance and caused us to reevaluate Volterra’s place in the Portfolio. Also detracting was Active Network, the technology provider for managing events and facilities. During the second half of 2012, management reduced forward guidance repeatedly. When we initially purchased the stock earlier in the first quarter, we had been attracted to Active Network’s stable business model. But with management’s failure to maintain that consistency, we lost faith in their abilities. Thus we sold the position early in the fourth quarter, but not before the position sustained a -66% decline for the partial year. As the year ended, Ebix, Inc. shed -26% of its market value when rumors surfaced that the company was under SEC scrutiny for its accounting practices. In our view, and after reexamining the issue with the company, those concerns seemed unfounded. Unfortunately this type of volatility was not unusual for Ebix, which provides insurance carriers, brokers, and third parties a unified end-to-end platform for insurance transactions.

In the consumer staples sector we benefited from holding United Natural Foods, the national distributor of natural, organic and specialty foods. Early in 2012 its recent contract with Safeway ramped up as planned and United Natural Foods implemented an improved warehouse management system. Combined with strong

revenue growth and constant operating margins, United Natural Foods gained 45% for the year.

The health care sector treated the Portfolio well during the year. During the second quarter, pharmacy benefit manager Catalyst Health Solutions reported inline results though in mid-April its shares jumped on news it was being acquired by SXC Health Solutions. We booked the 64% gain and liquidated our position. Sirona Dental Systems was quiet during the first half of the year when growth in its core European market was positive, but slower than last year due to a challenging economic environment. Growth later accelerated for the dental equipment manufacturer and in the second half Sirona reported better-than-expected results, very strong internal growth across nearly all geographic regions, and increased forward guidance. That brightened its stock price by 46%. Also seeing a share price lift was Air Methods, a provider of air medical emergency transport services. Mid-year the company preannounced significantly better-than-expected earnings arising from decreases in flight-related cancellations, improved pricing, lower maintenance costs and continued expansion of its community-based services. Later, Air Methods reported earnings just above its preannounced range and the holding ended the year with a 40% gain. Another example was Brookdale Senior Living, an owner and operator of assisted living, independent living and continual-care residential communities. Brookdale reported strong results with earnings above expectations. Occupancy levels increased and although management maintained the fiscal year guidance, they seemed incrementally more positive than in prior reports. The recovering housing market likely helped since entrance fees for Brookdale’s facilities often were paid by new customers from their home sales proceeds. Brookdale’s stock price climbed 45%. More challenging was our position in IPC The Hospitalist, a provider of hospitalist physicians. IPC began the year by reporting lower-than-expected revenues and earnings caused by lighter patient volumes in certain practices around the U.S., combined with elevated staffing costs and start-up expenses. The stock recovered mid-year when after missing consensus estimates for three quarters in a row, IPC outpaced estimates and set manageable guidance for the remainder of the year. However, lower patient volumes occurred again, which in turn led IPC at the end of the year to lower forward revenue and earnings guidance. The end result was a -13% annual stock return.

The financial services ledger had a mix of credits and debits to the Portfolio’s relative performance this year. Strength arose primarily from one of our long-term Top 10 holdings — WEX Inc., which formerly was known as Wright Express. The vehicle fleet card service company reported that credit losses remained very low and it also was helped by higher gas prices. In addition, WEX made several recent acquisitions — notably Fleet One in the third quarter — to complement its fleet business segment and expand its non-fleet operations internationally. By the end of the year, WEX’s price had climbed 39%. Portfolio Recovery Associates, which purchases and manages portfolios of defaulted and bankrupt consumer debt for corporate and government lenders, claimed a 69% return. The company produced earnings and revenues ahead of estimates mid-year, prompted by strong collections trends and a sequential 31% increase in the size of its collection portfolio. Management also expanded the size of its credit line by $51 million, providing the flexibility to take advantage of additional attractive purchasing opportunities. Property catastrophe reinsurer Montpelier

Re Holdings saw a 31% stock price gain. Early in the year the company reported that it had earned as much in the first quarter as it had lost in all of 2011 — the greatest year of insured catastrophe losses in history. Then at the end of the year, Montpelier Re reported that its losses arising from superstorm Sandy would be lower than anticipated. Detracting from performance was Higher One, which provides licensed software and services to higher education institutions, allowing them to outsource the entire financial aid credit & disbursement process. Results early in the year were dragged down by lower enrollments from the Fall of 2011. We expected the company to return to its former positive trajectory, but then in the fourth quarter Higher One reported weak results and reduced forward guidance on the back of higher expenses from new initiatives. That also reduced management’s visibility into future revenue and with their difficulty stabilizing Higher One’s business, we exited the position though incurred a -53% price decline. Another negative in this sector was Cardtronics Inc., the largest non-bank operator of ATMs and other financial service kiosks. While Cardtronics reported strong internal growth and cash flows, it also noted that an increased use of lower interchange networks would likely compress margins in the future. In the near term, that compressed its stock price by -12% this year.

The consumer discretionary sector held more than its share of weakness for the Portfolio. Case in point was Vera Bradley, a leading designer, producer and retailer of stylish and affordable handbags and accessories for women. Early in the year the company reduced its forward guidance because of rising cotton prices and the timing of selling, general and administrative expenses. Vera Bradley’s stock price remained range bound for the rest of the year and ended with a -23% showing. Similarly, for-profit education provider National American University Holdings started the year on the wrong foot. While student enrollment had been trending up, spending on growth initiatives weighed on the stock. Business development and physical campus opening expenses were expected to remain high for its fiscal 2012, and its stock price retreated by -47%. Our other for-profit education provider, American Public Education, saw a price decline of -16%. In American Public’s case, investor were concerned regarding the likely reduction of government tuition assistance program for active-duty military, as well as slower-than-expected benefits from its service arrangement with Wal-Mart. Menswear retailer Jos. A Bank Clothiers saw its price hemmed back by -13% on disappointing quarterly results at the end of the year. With many stores in the Northeast, store activity was curtailed by superstorm Sandy and the company drove sales with promotional discounts that cut into its gross margin. While we expect gross margins to rebound, we will be closely watching for that improvement. Much better was

Arbitron Inc., which climbed 37% when the media and marketing information services company agreed to be acquired by Nielsen Holdings in December. The companies offer complementary services and the deal price was very close to our target valuation, so we began selling the position.

The energy sector was especially difficult for the Portfolio this year. In the second quarter, Key Energy Services, an onshore rig-based well servicing contractor, prereleased lower operational guidance. This revision to guidance arose primarily from slower U.S. onshore growth in the liquid shale markets. Key’s international outlook was unchanged, with strong revenue growth as they continue to expand in Mexico, Colombia, and Bahrain. However, the market drilled Key’s stock by -55%. The independent oil & gas exploration & production company Swift Energy saw a -48% price decline in 2012. Mid-year the company reported high levels of production, but a larger percentage of natural gas — with its lower commodity prices — led Swift to miss earnings estimates. Later in the summer, Hurricane Isaac caused production delays in Swift’s Texas and Louisiana fields. We sold our position in the oil & gas service company Newpark Resources when its drilling fluids business suffered from a slowdown in drilling activity and extreme price inflation from barite shortages. Newpark’s stock had declined by -41% before we exited at the end of June. Pumping up results in this sector was a 29% gain for Gulfport Energy. The independent oil & gas exploration & production company reported record production levels from its Utica Shale natural gas wells located in eastern Ohio.

This commentary reflects the viewpoints of the TimesSquare Capital Management as of 12/31/12 and is not intended as a forecast or guarantee of future results.

CUMULATIVE TOTAL RETURN PERFORMANCE

TimesSquare Small Cap Growth Fund’s cumulative total return is based on the daily change in netasset value (NAV), and assumes that all distributions were reinvested. The chart compares a hypothetical $10,000 investment made in the TimesSquare Small Cap Fund — Institutional Class on December 31, 2002, to a $10,000 investment made in the Russell 2000 ^® Growth Index for the same time period. Performance for periods longer than one year is the average annual return. The graph and table do not reflect the deduction of taxes that a shareholder would pay on a Fund distribution or redemption of shares. The listed returns for the Fund would have been lower had certain expenses not been reduced. Past performance is not indicative of future results. Total returns would have been lower had certain expenses not been reduced.

The table below shows the average annual total returns for the TimesSquare Small Cap Growth Fund and the Russell 2000 ^® Growth Index for the same time periods ended December 31, 2012.

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. For performance information through the most recent month end, please call (800) 835-3879 or visit our Web site at www.managersinvest.com.

Investors should carefully consider the Fund’s investment objectives, risks, charges and expenses before investing. For this and other information, please call (800) 835-3879 or visit our Web site at www.managersinvest.com for a free prospectus. Read it carefully before investing or sending money. Funds are distributed by Managers Distributors, Inc., member FINRA.

The Russell 2000 ^® Growth Index is a registered trademark of Russell Investments. Russell ^® is a trademark of Russell Investments.

Not FDIC insured, nor bank guaranteed. May lose value.

Top Ten Holdings (unaudited)

The TimesSquare Mid Cap Growth Fund (the “Fund”) seeks to achieve long-term capital appreciation by investing in the common and preferred stock of U.S. mid-capitalization companies. The Fund invests at least 80% of its assets in securities of mid-capitalization companies. The Fund’s subadvisor, TimesSquare Capital Management, LLC (“TimesSquare”) uses a bottom-up, research-intensive approach to identify mid-capitalization growth stocks that it believes have the greatest potential to achieve significant price appreciation over a 12- to-18-month horizon. In this case, mid-capitalization refers to companies that, at the time of purchase, have market capitalizations of greater than $2.5 Billion but less than the greater of $15 Billion or the upper limit of the Russell Midcap ^® Growth Index (the “Index”), the Fund’s benchmark.

THE PORTFOLIO MANAGER

TimesSquare Capital Management, LLC

TimesSquare’s investment team believes its proprietary fundamental research skills, which place a particular emphasis on the assessment of management quality and an in-depth understanding of superior business models, enable the team to build a diversified portfolio of mid-cap growth stocks designed to generate good risk-adjusted returns. When selecting mid-cap growth stocks, Fund management utilizes a fundamental, bottom-up process to identify companies that:

The ideal investment exhibits many of the following traits:

The investment team may sell an investment when:

THE YEAR IN REVIEW

For the year ending December 31, 2012, the TimesSquare Mid Cap Growth Fund (Institutional Class) returned 18.71%, while its benchmark, the Russell Midcap ^® Growth Index, returned 15.81%.

Looking back on the U.S. equity markets, 2012 was a Rip Van Winkle year during which one almost wished to have fallen asleep on January 1 and to have not awakened until December 31. Having done so, one would have seen strong double-digit returns for all the major size and style indices in the 16% to 18% range.

Unemployment fell from 8.5% to 7.8%, home prices steadily rose throughout the year, annual automotive sales reached its highest level in five years, and inflation declined from over 3% to under 2%. Meanwhile the Federal Reserve maintained its zero interest rate policy, and national elections decisively maintained the status quo in terms of the President as well as majorities in both the House and Senate. Globally, despite concerns to the contrary, the euro remained intact and many of markets that lagged in 2011 — such as Greece — took the lead in 2012.

Those that stayed awake for 2012, however, saw many sources for potential insomnia. While the unemployment rate dipped, it remained well above the Fed’s target of 6.5%, the finishing line for its ongoing monetary stimulus activities. Although November’s elections were decisive, the Presidential and Congressional races were hotly contested with a host of economic policies as central issues. Not the least of which was the Affordable Care Act (health care reform) that was enacted in 2010, but formally upheld by the Supreme Court in June 2012. Many corporations restrained expenditures pending clarity on fiscal and monetary policies, which in part resulted in the Institute for Supply Management’s measure of manufacturing activity bounced between expansion and contraction over the last seven months with half of the industries in decline — a sign of an uneven recovery. Gauges of consumer confidence and sentiment closed 2012 at the same or higher levels than they began the year, though both fell sharply in the final months. By one extent, 2012 did not officially come to a close until January 2, 2013; that was when the U.S. government finally reached some measure of accommodation on the “fiscal cliff,” an issue that weighed on the economy for the latter part of 2012 and passed the American Taxpayer Relief Act of 2012.

Among small to mid-cap growth stocks in 2012, returns came from a variety of areas. Sector performance was mixed with the economically sensitive materials & processing as well as the more stable health care outperforming. There was a similar mix of “offense” and “defense” at the other end of the return scale, with energy and utilities lagging all other sectors. Valuation was generally preferred with the value indices ahead of their growth counterparts, and even among growth stocks the lower valuation ones performed better than higher valuations. Lastly, while the market was up sharply for the year, those stocks with lower risk, as defined by their lower beta, outperformed riskier stocks.

In this environment, the Portfolio outperformed the Index in 2012. Stock selection had a strong net positive effect and drove our outperformance; in general, our investments in consumer discretionary, technology, producer durables, energy and financial services outpaced their counterparts in the Index, while our holdings in materials & processing, consumer staples and health care lagged. Sector allocation had a slight net negative effect as our overweights to energy and financial services and our underweights to consumer staples and utilities helped our returns while our underweights to materials & processing, health care and producer durables and overweight to technology detracted from performance.

Both our top contributor and bottom detractor for the year were found in the consumer discretionary sector. Top honors went to Virgin Media, Inc. with its 73% climb. This New York-based company provides cable broadband internet, television, fixed line

telephone and mobile telephone services in the United Kingdom. In Q4, Virgin Media reported a solid quarter with better than expected free cash flow, lower churn rate and higher than expected net additions. The company also announced solid second quarter results with revenue and operating cash flow ahead of consensus estimates. Revenue growth was driven by gains in the average revenue per user metric from a price increase and cross-selling services to customers. At the bottom of the pack was Tempur-Pedic International Inc., which specializes in premium bedding products including mattresses, pillows and other comfort products. In Q2, the company met expectations for revenues and maintained guidance in an environment that expected significant upside to expectations and then followed that report with a surprising intra-quarter downward guidance call citing aggressive competition from its competitors within the specialty mattress market. Management planned to cut advertising spending as well, and we closed our position with Tempur-Pedic shares down -58%. Discovery Communications, Inc., up 55% for the year, is a cable and satellite TV network operator with networks including Discovery Channel, TLC and Animal Planet. In Q4, Discovery reported a mixed quarter and announced the acquisitions of ProSieben Nordic, Eurosport and four other French channels; these deals offer plenty of channel synergies. The company also reported a solid quarter in Q3 as better than expected margins and continuing growth in international markets offset a slight deceleration in U.S. advertising revenues. WABCO Holdings Inc. develops and sells braking, stability, suspension and transmission control systems, primarily for commercial vehicles. WABCO raced ahead by 50% despite missing quarterly expectations for revenues and earnings in Q4, as the shortfall was generally expected by investors amidst a challenging European truck market. WABCO still managed to demonstrate strong margins which are reflective of its lean operations in Europe and cost containment measures throughout the quarter. Earlier in the year in Q1, WABCO reported earnings above Wall Street’s consensus and announced forward guidance better than many expected given its significant European market exposure. In the first quarter, we initiated a position in BorgWarner Inc., which specializes in engineered automotive systems and components primarily for powertrain applications worldwide including turbochargers and emissions systems. The stock has remained in neutral with its 1% return since our purchase. In Q3, management reported a mixed quarter, missing revenue estimates and meeting earnings estimates; turbo sales were lighter than expected, reflecting weaker auto sales in Europe, Asia and South America.

We were hurt by a negative stock selection effect in consumer staples. Herbalife Ltd. is a global network marketing company that sells weight management, nutrition and energy supplements and personal care products. In the fourth quarter, Herbalife beat estimates for revenues and earnings but by a smaller margin relative to past beats, disappointing some investors. The stock was later negatively impacted by a prominent hedge fund manager who presented his short thesis at an industry conference, detailing his concerns about Herbalife’s business model, which sent Herbalife shares down -34% for the year. In the fourth quarter, we initiated a position in GNC Holdings, Inc., a specialty retailer of health and wellness products including vitamins, minerals, sports nutrition and diet products. GNC is the top retailer in the steadily growing, yet fragmented industry of vitamins, minerals and supplements (VMS);

growth in this industry is expected to continue, driven by increased consumer acceptance of sports nutrition and VMS products, an aging population and consumer focus on preventative health and wellness. GNC shares fell by -10% since our investment as the company reported an in line quarter with same store sales matching expectations. GNC is continuing to make good progress with the expansion of their new Gold Card Rewards program, the members of which generate more than one half of sales and spend more than double the average customer.

In the energy sector, Concho Resources Inc. is a predominantly oil-focused exploration and production company operating in the Permian Basin of southeast New Mexico and west Texas. In Q4, the company missed quarterly earnings estimates as lower than expected realized pricing more than offset higher than expected production and lower operating costs. Management also provided 2013 production guidance that was relatively in line with expectations. Concho shares fell by -14% for the year, and we added to our position.

Turning to financial services, Alliance Data Systems Corporation is a provider of data-driven and transaction-based marketing, private label credit cards, and customer loyalty solutions. Climbing 40% for the year, Alliance Data reported a beat to revenue and earnings estimates in the third quarter thanks to strong performance in its private label segment which benefitted from a better than expected charge-off rate and growth in receivables. We trimmed our position.

While we had a net negative stock selection effect in health care, individual stock performance was mixed. Up 45%, DaVita HealthCare Partners Inc. provides dialysis services for patients suffering from chronic kidney failure. In Q3, DaVita reported a beat and raise quarter driven by strong organic and acquired patient volume growth, and the U.S. Justice Department ended an investigation into DaVita’s financial relationships with nephrology doctors and billing of Epogen, a drug for anemia. In the previous quarter, the company announced its acquisition of HealthCare Partners, a physician practice management network, a deal that cemented DVA’s position as a leader in integrated care, a possible solution to rising health care costs. Catamaran Corporation is a pharmacy benefit management (PBM) company formerly known as SXC Health Solutions; the company changed its name to Catamaran in July after acquiring a competing PBM, Catalyst Health Solutions. This deal helped drive its 66% return; aside from the premium offered to the acquired company, PBM mergers tend to also lift the acquiring company since the new entity gains instant scale and strength in the market. We closed our position in Shire PLC, a specialty pharmaceutical company focused on treatments for ADHD including Vyvanse, Intuniv, and Adderall, during the fourth quarter with its shares down -9%. Shire is restructuring and retraining its sales force after uncovering compliance issues in the regenerative medicine business it acquired in 2011, the current CEO will retire and be succeeded by the Chief Marketing Officer of Bayer, and sales growth has been decelerating. In Q1, we purchased Salix Pharmaceuticals, Ltd., a specialty pharmaceutical company focused on the gastroenterology (GI) market. In late July, Salix received a denial letter from the FDA on its application to expand the label of Relistor SC to cover non-cancer patients; this was a surprising development given that the drug had been previously approved for

cancer patients, a sicker population. Salix later reported in line revenues and better than expected earnings thanks to lower expenses and announced in-licensing of a new Xifaxan formulation that has shown promising phase 2 results for treating Crohn’s Disease. Salix finished the year in negative territory with a -18% return, and we added to our position. In July, we purchased Vertex Pharmaceuticals Inc., which specializes in small molecule drugs for the treatment of various diseases. In Q4, Vertex missed sales estimates of their Incivek drug used for hepatitis C and Kalydeco used for cystic fibrosis; while the Incivek miss was expected, the Kalydeco miss was based on sell side estimates being too aggressive on the European launch. Vertex plans to start Phase III trials for two drugs being tested in combination with Kalydeco with results expected in the first half of 2013. Vertex shares are down -8% since our purchase.

Ecolab Inc. in the materials & processing sector focuses on products for the hospitality, foodservice, health care and industrial markets, including cleaning and sanitizing products and maintenance and repair services. In Q3, Ecolab reported an in-line quarter with a slight miss to revenues due to currency and a deceleration in their global water and paper segments; management also cited weakness in cash flows due to pension contributions, restructuring charges and working capital increases. In the previous quarter, however, Ecolab reported better-than-expected revenues and earnings. Its shares gained 26% for the year.

In the producer durables sector, we closed our position in Cooper Industries PLC in July, benefitting from its 28% gain during the time that we held it in 2012. This manufacturer of electrical components and tools agreed to be acquired by Eaton Industries during the second quarter. We trimmed our position in Kansas City Southern, which specializes in the freight rail transportation business with a north/south rail route between Kansas City, MO and various ports along the Gulf of Mexico. The company’s shares moved ahead by 24% despite a miss on earnings expectations in Q4 due to headwinds in coal and grain. The company maintains exposure to high growth areas including frac sand and crude oil. Kansas City Southern still stands to benefit from more secular growth trends than other railroads thanks to their exposure to Mexico and the continued near-sourcing of auto plants there. C.H. Robinson Worldwide, Inc. provides freight transportation services and logistics services such as supply chain analysis and information reporting. With the company’s shares losing -18%, we closed our position in the third quarter. Management reported an in line quarter but with operating metrics that were weaker, and gross margin pressures remain. We believe that, in a stagnant economy, the company’s fundamentals are unlikely to change to allow the company to start growing once again.

With a net positive stock selection effect in technology, we had our share of contributors and detractors. Dialing up by 65%, SBA Communications Corp. owns and operates wireless communications towers, leasing antenna space to wireless service providers; we trimmed our position. SBA reported solid third quarter results with revenues and earnings just ahead of consensus estimates. In the previous quarter, the company also exceeded revenue and earnings estimates, and management commented on a sizable backlog. ASML Holding N.V.’s primary business is designing and manufacturing lithography systems; lithography is the part of the chip making process whereby a pattern is imaged into the light-sensitive material

on the surface of a silicon wafer. We added to our position as ASML announced they would be acquiring Cymer, a company specializing in light sources used in photolithography tools; this deal essentially creates a monopoly in the photolithography space. ASML shares rose by 49% for the year. ASML’s most recent quarter came in line with expectations, but management also highlighted 4-8 additional extreme ultraviolet (EUV) orders that they are expecting in the next six months. Gartner Inc. provides research and analysis on information technology, computer hardware, software, communications and other related industries. Gartner shares gained 32%. In Q3, the company reported a strong quarter with earnings exceeding consensus estimates. Management cited Europe as one of the company’s best performing regions, easing concerns about potential negative macroeconomic impacts in the region. Moderating discretionary spending on information technology, however, could pose near term headwinds; we trimmed our position. Up 23%, NeuStar, Inc. provides technology and directory services to its communications service provider customers and manages the registry for North American area codes and telephone numbers. In Q4, NeuStar reported a good quarter with revenues slightly above estimates and a solid earnings beat due to lower operating expenditures, and we trimmed our position on strength. NeuStar’s integration of TargusInfo continues to progress well, and the company is seeing revenue synergies from cross/upselling services ahead of schedule. Amdocs Limited provides business and operations support systems for the telecommunications industry. Amdocs appreciated by 20% thanks to a solid quarterly report in Q3 as the company extended its contract with DirecTV through 2017 without any major price concessions, signed a five year managed services agreement with TIM Brasil and highlighted the stabilization of its revenues with AT&T, which had been disrupted following AT&T’s abandoned bid for T-Mobile. Management also announced plans to initiate its first dividend.

Looking at weaker performing names in technology, Informatica Corporation provides enterprise data integration and data quality software and services. Informatica finished the year down -16%, and we added to our position. In Q4, Informatica preannounced weaker licensing revenues, which management attributed to issues with their European sales force and macroeconomic weakness in the region. With a newly appointed head of sales in Europe, Informatica continues to restructure its sales effort there, and we anticipate gradual improvement over the next few quarters. The company later reported a quarter in line with its previous negative preannouncement. We do not believe there are any issues with Informatica’s products or market share, and Informatica continues to trade at attractive valuation levels. We closed our position in NetApp, Inc. during the fourth quarter to redeploy the proceeds in higher conviction names. NetApp supplies enterprise storage and data management software, and hardware products and services and was down -27% during the time we held the stock in 2012. The stock had suffered from weakness earlier in the year on concerns regarding heightened competition. The company reported in line results in May with disappointing forward guidance that the CEO said were based on macroeconomic concerns affecting NetApp’s end markets in the financial sector and the Europe, Middle East and Asia region. Micros Systems Inc. specializes in enterprise information solutions for the hospitality and specialty retail industries including hardware and software for point-of-sale (POS)

applications. Micros registered a -9% loss, and we added to our position. In Q4, after reporting a quarter with in line revenues and an earnings beat, the company announced the current CEO will be replaced effective January 1st by the former CEO of Perot Systems. The timing of such a change came as a surprise, and we will continue to evaluate his progress. Micros Systems is currently running pilot programs with Marriott and Hilton in the hotel space, and Tim Horton’s in the restaurant segment is expected to go live in January with Micros terminals at approximately 4,000 locations. In Q3, we initiated a position in Citrix Systems Inc. after a sell-side firm downgraded the stock, and the subsequent decline provided an attractive entry point. Citrix develops technology solutions to deliver IT services on-demand worldwide including GoToMyPC (remote access to PC and Mac from another computer). In Q4, Citrix reported a mixed fourth quarter with lower than expected revenues and lower revenue guidance as many deals are being downsized or delayed amidst the difficult macroeconomic backdrop, and its shares finished the year down -16% since our purchase.

This commentary reflects the viewpoints of the TimesSquare Capital Management as of 12/31/12 and is not intended as a forecast or guarantee of future results.

CUMULATIVE TOTAL RETURN PERFORMANCE

TimesSquare Mid Cap Growth Fund’s cumulative total return is based on the daily change in net asset value (NAV), and assumes that all distributions were reinvested. The chart compares a hypothetical $10,000 investment made in the TimesSquare Mid Cap Fund — Institutional Class from March 4, 2005 (commencement of operations) through December 31, 2012, to a $10,000 investment made in the Russell Midcap ^® Growth Index for the same time period. The graph and table do not reflect the deduction of taxes that a shareholder would pay on a Fund distribution or redemption of shares. The listed returns for the Fund are net of expenses and the returns for the index exclude expenses. Past performance is not indicative of future results. Total returns for the Fund would have been lower had certain expenses not been reduced.

The table below shows the average annual total returns for the TimesSquare Mid Cap Growth Fund and the Russell Midcap ^® Growth Index for the same time periods ended December 31, 2012.

The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. For performance information through the most recent month end, please call (800) 835-3879 or visit our Web site at www.managersinvest.com.

Investors should carefully consider the Fund’s investment objectives, risks, charges and expenses before investing. For this and other information, please call (800) 835-3879 or visit our Web site at www.managersinvest.com for a free prospectus. Read it carefully before investing or sending money. Funds are distributed by Managers Distributors, Inc., member FINRA.

The Russell Midcap ^® Growth Index is a registered trademark of Russell Investments. Russell ^® is a trademark of Russell Investments.

Not FDIC insured, nor bank guaranteed. May lose value.

Top Ten Holdings (unaudited)