Edgar Filing: H&Q HEALTHCARE INVESTORS

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12

H&Q HEALTHCARE INVESTORS
H&Q LIFE SCIENCES INVESTORS
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(Name of Registrant as Specified In Its Charter)

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H&Q HEALTHCARE INVESTORS
H&Q LIFE SCIENCES INVESTORS
30 Rowes Wharf, Fourth Floor
Boston, Massachusetts 02110-3328
(617) 772-8500

NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS

To the Shareholders of
H&Q HEALTHCARE INVESTORS and H&Q LIFE SCIENCES INVESTORS:

An Annual Meeting of Shareholders of H&Q Healthcare Investors and of H&Q
Life Sciences Investors (each a "Fund") will be held on Tuesday, June 14, 2005,
at 9:00 a.m. at the Langham Hotel Boston, 250 Franklin Street, Boston,
Massachusetts 02110, for the following purposes:

(1) The election of Trustees of each Fund; and

(2) The ratification or rejection of the selection of Deloitte & Touche
LLP as the independent registered public accountants of each Fund for
the fiscal year ending September 30, 2005; and

(3) The transaction of such other business as may properly come before the
Annual Meeting and any adjournment(s) or postponement(s) thereof.

Although the Annual Meetings are held together for convenience in order to
hear common presentations, each Fund's shareholders take action independently of
the other. Shareholders of record at the close of business on May 4, 2005 will
be entitled to vote at the Annual Meeting or at any adjournment(s) or
postponement(s) thereof.

By Order of the Board of Trustees,

/s/ Kathleen M. Eckert,

Kathleen M. Eckert,
Secretary

May 10, 2005

PLEASE COMPLETE, DATE AND SIGN THE PROXY FOR THE SHARES HELD BY YOU AND RETURN
THE PROXY IN THE ENVELOPE PROVIDED SO THAT YOUR VOTE CAN BE RECORDED. NO POSTAGE
IS REQUIRED IF THE ENVELOPE IS MAILED IN THE UNITED STATES. IT IS IMPORTANT THAT
YOU RETURN YOUR SIGNED PROXY PROMPTLY, REGARDLESS OF THE SIZE OF YOUR HOLDINGS,
SO THAT A QUORUM MAY BE ASSURED.

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H&Q HEALTHCARE INVESTORS
H&Q LIFE SCIENCES INVESTORS

JOINT PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation by
the Board of Trustees of H&Q Healthcare Investors ("HQH") and of H&Q Life
Sciences Investors ("HQL" and, together with HQH, each is referred to separately
as the "Fund" and collectively as the "Funds") of proxies to be voted at the
Joint Annual Meeting of Shareholders of the Funds to be held on June 14, 2005
(the "Annual Meeting"), and any adjournment(s) or postponement(s) thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting, dated May
10, 2005. Unless otherwise indicated, all information in this Proxy Statement
and each proposal ("Proposal") applies separately to each Fund. This Proxy
Statement, the Notice of Annual Meeting and the Proxy Card(s) are first being
mailed to shareholders on or about May 10, 2005.

Proposal 1 relates to the election of Trustees for each Fund and Proposal 2
relates to the ratification of the selection of the independent registered
public accountants of each Fund. Each Fund's shareholders will vote separetly on
each Proposal.

Each Fund will furnish, without charge, a copy of its Annual Report, or the
most recent Semi-Annual Report succeeding the Annual Report, if any, to a
shareholder upon request. Requests may be sent to each Fund at 30 Rowes Wharf,
Suite 430, Boston, MA 02110-3328 or be made by calling (800) 451-2597.

PROPOSAL 1
ELECTION OF TRUSTEES

Each Fund's Declaration of Trust provides that the Board of Trustees shall
be divided into three classes with staggered terms. The term of office of the
Class A Trustees expires on the date of the 2005 Annual Meeting, and the term of
office of the Class B and Class C Trustees will expire one and two years,
respectively, thereafter. Trustees chosen to succeed the Class A Trustees whose
terms are expiring will be elected for a three-year term.

Each Fund's Declaration of Trust provides that a majority of the Trustees
shall fix the number of the entire Board of Trustees and that such number shall
be at least three and no greater than fifteen. Each Fund's Board of Trustees has
fixed the number of Trustees at seven. Proxies will be voted for the election of
the following nominee for HQH and three nominees for HQL. Each nominee is
presently serving as a Class A Trustee and has consented to continue to so
serve. In the event that a nominee is unable to serve for any reason (which is
not now expected), when the election occurs, the accompanying Proxy will be
voted for such other person or persons as the Board of Trustees may recommend.

The nominee to serve as a Class A Trustee of HQH until the 2008 Annual
Meeting is Henri A. Termeer, and the nominees to serve as Class A Trustees of
HQL until the 2008 Annual Meeting are Robert P. Mack, M.D., Eric Oddleifson and
Oleg M. Pohotsky. The Class B Trustees serving until the 2006 Annual Meeting are
Lawrence S. Lewin, Daniel R. Omstead, Ph.D., and Uwe E. Reinhardt, Ph.D for HQH
and Daniel R. Omstead, Ph.D. and Henri A. Termeer for HQL. The Class C Trustees
serving until the 2007 Annual Meeting are Robert P. Mack, M.D., Eric Oddleifson
and Oleg M. Pohotsky for HQH and Lawrence S. Lewin and Uwe E. Reinhardt, Ph.D
for HQL.

The nominees and Trustees and their principal occupations for at least the
last five years are set forth in the table below.

NUMBER OF FUNDS
NAME (AGE), ADDRESS, POSITION(S) HELD WITH THE FUNDS IN FUND COMPLEX
AND LENGTH OF TIME SERVED, PRINCIPAL OCCUPATION(S) OVERSEEN BY
DURING PAST FIVE YEARS AND OTHER DIRECTORSHIPS HELD BY TRUSTEE OR NOMINEE
TRUSTEE OR NOMINEE FOR TRUSTEE FOR TRUSTEE
------------------------------------------------------------------------------------- ------------------

INDEPENDENT TRUSTEES AND NOMINEES

LAWRENCE S. LEWIN^~+ (67), 3305 ROLLING ROAD, CHEVY CHASE, MD 20815 2
Trustee of HQH (since 1987) and of HQL (since 1992) and Chairman of HQH and HQL
(since 2000); Executive Consultant (since December 1999); Director (since 2003)
of Medco Health Solutions, Inc.; Chief Executive Officer (from 1970-1999) of The
Lewin Group (healthcare public policy and Management consulting), a subsidiary
of Quintiles Transnational Corp.

ROBERT P. MACK, M.D.#~^ (69), 30 ROWES WHARF, BOSTON, MA 02110 2
Trustee (since 1991) of HQH and (since 1992) of HQL; Consultant in Orthopedic
Surgery to Orthopedic Associates of Aspen (since 2000).

ERIC ODDLEIFSON**#+ (70), 42 RIVER ROAD, COHASSET, MA 02025 2
Trustee of HQH and of HQL (since 1992); Partner (1997-2003) and Investment
Committee Chair (since Sept. 2003) of GMO Renewable Resources LLC (timber
investment management).

OLEG M. POHOTSKY**#+ (58), 30 ROWES WHARF, BOSTON, MA 02110 2
Trustee of HQH and of HQL (since 2000); Financial Consultant (since 2002);
Senior Vice President (from 1991-2001) of FAC/Equities, a division of First
Albany Corporation (investment bank).

UWE E. REINHARDT, PH.D.** (67), 30 ROWES WHARF, BOSTON, MA 02110 2
Trustee of HQH (since 1988) and of HQL (since 1992); Professor of Economics
(since 1968) at Princeton University; Director (since 2000) of Triad Hospitals,
Inc.; Director (since 2002) of Boston Scientific; Director (since 2002) of
Amerigroup, Inc.; Director (since 2001) of Duke University; Director (since
2001) of the Duke University Health System; Director (since 2002) of the
National Bureau of Economic Research.

HENRI A. TERMEER^~ (59), GENZYME CORPORATION, 500 KENDALL STREET, CAMBRIDGE, MA 02139 2
Trustee of HQH (since 1989) and of HQL (since 1992); Chairman (since 1988),
Chief Executive Officer (since 1985), and President (since 1983) of Genzyme
Corporation (human healthcare products); Director (since 1987) of ABIOMED, Inc.

INTERESTED TRUSTEE

DANIEL R. OMSTEAD, PH.D.* (51), 30 ROWES WHARF, BOSTON, MA 02110 2
President of HQH and of HQL (since 2001); Trustee of HQH and of HQL (since
2003), President, Chief Executive Officer and Managing Member (since July 2002)
of Hambrecht & Quist Capital Management LLC; President and Chief Executive
Officer (2001-June 2002) and Managing Director (2000-June 2002) of Hambrecht &
Quist Capital Management, Inc.; President and Chief Executive Officer (from
1998-2000) of Reprogenesis, Inc.

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* Trustee considered to be an "interested person" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act"), through
position or affiliation with Hambrecht & Quist Capital Management LLC (the
"Adviser").
** Member of each Fund's Audit Committee.
^ Member of each Fund's Governance Committee.
~ Member of each Fund's Nominating Committee.
# Member of each Fund's Valuation Committee.
+ Member of each Fund's Qualified Legal Compliance Committee.

The following table sets forth, for each Trustee, the aggregate dollar
range of equity securities owned of each Fund and in the aggregate as of April
13, 2005. The information as to beneficial ownership is based upon statements
furnished by each Trustee.

AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN BOTH
DOLLAR RANGE OF EQUITY DOLLAR RANGE OF EQUITY FUNDS OVERSEEN BY
NAME OF TRUSTEE SECURITIES IN HQH SECURITIES IN HQL TRUSTEE IN FUND COMPLEX
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INDEPENDENT TRUSTEES
Lawrence S. Lewin $50,001-$100,000 $10,001-$50,000 Over $100,000
Robert P. Mack, M.D $50,001-$100,000 None $50,001-$100,000
Eric Oddleifson $50,001-$100,000 $50,001-$100,000 Over $100,000
Oleg M. Pohotsky None None None
Uwe E. Reinhardt, Ph.D. $1-$10,000 $1-$10,000 $10,001-$50,000
Henri A. Termeer None None None

INTERESTED TRUSTEE
Daniel R. Omstead, Ph.D. $50,001-$100,000 $50,000-$100,000 Over $100,000

Although Trustees are encouraged to attend the annual meetings of
shareholders to the extent they are able, the Funds have no formal policy with
regard to board members' attendance at annual meetings of shareholders. Last
year, six of the seven Trustees then in office attended the annual meeting of
shareholders.

Shareholders wishing to send communications to the Boards may communicate
with members of the Boards of Trustees by submitting a written communication
directed to the applicable Board of Trustees in care of the Funds' Secretary,
Kathleen M. Eckert, at 30 Rowes Wharf, Boston, MA 02110.

STANDING COMMITTEES

AUDIT COMMITTEE. Each Fund has an Audit Committee comprised solely of
Trustees who are not "interested persons" (as that term is defined in Section
2(a)(19) of the 1940 Act) of the Funds and the Adviser (each an "Independent
Trustee") and who are "independent" as defined in the New York Stock Exchange
("NYSE") Listing Standards. Each Fund's Board of Trustees has adopted a written
charter for the Audit Committee, and a copy of this charter was included as
Exhibit A to the Funds' Joint Proxy Statement dated May 24, 2004. The principal
purpose of each Fund's Audit Committee is to assist the Board of Trustees in
fulfilling its responsibility to oversee management's conduct of the Fund's
financial reporting process, including reviewing the financial reports and other
financial information provided by the Fund, the Fund's systems of internal
accounting and financial controls and the annual independent audit process.

For each Fund, the Audit Committee's role is one of oversight, and it is
recognized that the Fund's management is responsible for preparing the Fund's
financial statements and that the independent registered public accountant is
responsible for auditing those financial statements. Although each Audit
Committee member must be financially literate and one member must have
accounting or financial management expertise (as determined by the Board of
Trustees in its business judgment), Audit Committee members are not
professionally engaged in the practice of accounting or auditing and are not
experts in the fields of accounting or auditing, including with respect to
auditor independence. Audit Committee members rely, without independent
verification, on the information provided to them and on the representations
made by management and each Fund's independent public accountants.

The members of each Fund's Audit Committee are Messrs. Oddleifson, and
Pohotsky and Dr. Reinhardt. Mr. Pohotsky is the Chairman of each Fund's Audit
Committee. Each Fund's Audit Committee held one meeting during the fiscal year
ended September 30, 2004.

GOVERNANCE COMMITTEE. Each Fund has a Governance Committee comprised solely
of Independent Trustees who are "independent" as defined in the NYSE Listing
Standards. Each Fund's Board of Trustees has adopted a written charter for the
Governance Committee. Each Fund's Governance Committee's mission under its
charter is to review, evaluate, and enhance the effectiveness of each Fund's
Board of Trustees in its role in governing each Fund and to oversee management
of each Fund in accordance with the Corporate Governance Guidelines, which have
been adopted by each Fund's Board of Trustees.

Each Fund's Governance Committee shall review, discuss and make
recommendations to the Board of Trustees relating to those issues that pertain
to the effectiveness of the Board of Trustees in carrying out its
responsibilities in governing each Fund and overseeing each Fund's management.
The members of each Fund's Governance Committee are Messrs. Lewin and Termeer
and Dr. Mack. Mr. Lewin is the Chairman of each Fund's Governance Committee.
Each Fund's Nominating and Governance Committee met one time during the fiscal
year ended September 30, 2004. For the fiscal year ended September 30, 2004 the
Nominating and Governance Committees were combined as one Committee for each
Fund.

NOMINATING COMMITTEE. Each Fund has a Nominating Committee comprised soley
of Independent Trustees who are "independent" as defined in the NYSE Listing
Standards. Each Fund's Board of Trustees has adopted a written charter for the
Nominating Committee. The Nominating Committee charter is not available on the
Fund's website but was included as Exhibit B to the Funds' Joint Proxy dated May
24, 2004.

Each Fund's Nominating Committee requires that each prospective trustee
candidate have a college degree or equivalent business experience, and that each
candidate is not serving in a similar capacity on the board of a registered
investment company which is not sponsored or advised by the Funds' investment
adviser or its affiliates. Each Fund's Nominating Committee may also take into
account other factors when considering and evaluating potential trustee
candidates, including but not limited to: (i) availability and commitment to
attend meetings and perform responsibilities of the Board; (ii) relevant
industry and related experience; (iii) educational background; (iv) financial
expertise; (v) the candidate's ability, judgment and expertise; and (vi) the
overall diversity of the Board's composition.

Each Fund's Nominating Committee may identify prospective trustees from any
reasonable source, including, but not limited to, the consultation of
third-party trustee search services. Each Fund's Nominating Committee will
consider potential trustee candidates recommended by shareholders, provided that
the proposed candidates (i) satisfy any minimum qualifications of the Fund for
its trustees; (ii) are not "interested persons" (as that term is defined in
Section 2(a)(19) of the 1940 Act) of the Fund or the Adviser; and (iii) are
"independent" as defined in the NYSE Listing Standards. In order to be evaluated
by the appropriate Committee, trustee candidates recommended by shareholders
must also meet certain eligibility requirements as set out in the Committees'
Nominating Charter. Other than those eligibility requirements, the Committees
shall not evaluate shareholder trustee nominees in a different manner than other
nominees. The standard of the Committees is to treat all equally qualified
nominees in the same manner.

All shareholder recommended nominee submissions must be received by the
Funds by the deadline for submission of any shareholder proposals which would be
included in the Funds' proxy statement for the next annual meeting of the Funds.
Each nominating shareholder or shareholder

group must meet the requirements stated in the Nominating Charter. A nominating
shareholder or shareholder group may not submit more than one nominee per year.
When nominating a trustee candidate, shareholders must include in their notice
to the Funds' Secretary: (i) the shareholder's contact information; (ii) the
trustee candidate's contact information and the number of Fund shares owned by
the proposed candidate; (iii) all information regarding the candidate that would
be required to be disclosed in solicitations of proxies for elections of
trustees required by Regulation 14A of the Securities Act of 1934, as amended;
and (iv) a notarized letter executed by the trustee candidate, stating his or
her intention to serve as a nominee and be named in the Fund's proxy statement,
if nominated by the Board of Trustees, and to be named as a trustee if so
elected. Once a nomination has been timely received in proper form, the nominee
will be asked to complete an eligibility questionnaire to assist the Funds in
assessing the nominee's qualifications as a potential Independent Trustee and as
someone who is "independent" under the NYSE Listing Standards. The Nominating
Committee will make such determinations in its sole discretion and such
determinations shall be final.

The members of each Fund's Nominating Committee are Messrs. Lewin and
Termeer and Dr. Mack. Mr. Lewin is the Chairman of each Fund's Nominating
Committee. Each Fund's Nominating and Governance Committee met one time during
the fiscal year ended September 30, 2004. For the fiscal year ended September
30, 2004 the Nominating and Governance Committees were combined as one Committee
for each Fund.

VALUATION COMMITTEE. Each Board has delegated to each Fund's Valuation
Committee general responsibility for determining, in accordance with each Fund's
valuation procedures, the value of assets held by each Fund on any day on which
the net asset value per share is determined. Each Valuation Committee may
appoint, and has appointed, a Sub-Committee made up of employees and officers of
the Adviser, to deal in the first instance with day to day valuation decisions,
subject to oversight by the Valuation Committee. Each Valuation Committee shall
meet as often as necessary to ensure that each action taken by the Sub-Committee
is reviewed within a calendar quarter of the occurrence. In connection with its
review, each Valuation Committee shall ratify or revise the pricing
methodologies authorized by the Sub-Committee since the last meeting of the
Valuation Committee. Each Valuation Committee is charged with the responsibility
of determining the fair value of each Fund's securities or other assets in
situations set forth in each Fund's valuation procedures.

The members of each Fund's Valuation Committee are Messrs. Oddleifson and
Pohotsky and Dr. Mack. Each Fund's Valuation Committee held six meetings during
the fiscal year ended September 30, 2004.

QUALIFIED LEGAL COMPLIANCE COMMITTEE. Each Fund has a Qualified Legal
Compliance Committee ("QLCC") comprised solely of Independent Trustees. Each
Fund's Board of Trustees has adopted a written charter for the QLCC. The
principal purpose of each Fund's QLCC is to review and respond to reports of
Evidence of a Material Violation (as defined in the QLCC charter). Reporting
Evidence of a Material Violation is required under the Standards of Professional
Conduct for Attorneys adopted by the Commission under the Sarbanes-Oxley Act of
2002 (the "Standards"). Under the Standards, if an attorney appearing and
practicing before the Commission in the representation of an issuer, such as the
Funds, becomes aware of Evidence of a Material Violation by the issuer or by any
officer, trustee, employee or agent of the issuer, the Standards provide for the
attorney to report such evidence to the issuer's QLCC forthwith. In discharging
its role, the QLCC is granted the power to investigate any Evidence of a
Material Violation brought to its attention with full access to all books,
records, facilities and personnel of the Funds and the power to retain outside
counsel, auditors or other experts for this purpose.

The members of each Fund's QLCC are Messrs. Lewin, Oddleifson and Pohotsky.
Mr. Pohotsky is the Chairman of each Fund's QLCC. Neither Fund's QLCC met during
the fiscal year ended September 30, 2004.

ATTENDANCE. During the fiscal year ended September 30, 2004, each Fund's
Board of Trustees held six meetings; each Fund's Audit Committee held one
meeting; each Fund's Governance and Nominating Committee, which was combined as
one Committee during the fiscal year ended September 30, 2004, held one meeting;
and each Fund's Valuation Committee held six meetings. Each of the Trustees,
other than Mr. Termeer, attended at least 75% of the aggregate number of
meetings of the Board of Trustees and of all the Committees of the Board of
Trustees on which he served. During the fiscal year ended September 30, 2004,
Mr. Termeer attended 50% of the meetings of the Board of Trustees and all of the
Committees of the Board on which he served.

COMPENSATION OF TRUSTEES

For the fiscal year ended September 30, 2004 each Fund paid its Independent
Trustees an annual fee of $20,000. Each Fund currently pays each Independent
Trustee $500 for each Board and Committee meeting attended in person and $250
for each Board and Committee meeting attended by telephone. For the fiscal year
ended September 30, 2004 Independent Trustees of each Fund were paid $1,000 for
each Board and Committee meeting attended in person and $500 for each Board and
Committee meeting attended by telephone. Currently, the Chairman of the Board of
Trustees, the Chairman of the Audit Committee and the Chairman of the Valuation
Committee of each Fund receives an additional annual fee of $2,500. Currently,
the Chairman of the Nominating Committee and the Chairman of the Governance
Committee of each Fund receives an additional fee of $1,500. During the fiscal
year ended September 30, 2004 the Chairman of each Committee received an
additional fee of $1,500. Independent Trustees are also reimbursed for travel
expenses incurred in connection with attending such meetings. For the fiscal
year ended September 30, 2004, the Independent Trustees as a group received
$169,608 from HQH and $167,490 from HQL for fees and reimbursed expenses.
Neither of the Funds directly paid any additional compensation to the Trustees
for the fiscal year ended September 30, 2004. Neither of the Funds directly paid
any compensation to any officer in excess of $60,000 for the fiscal year ended
September 30, 2004. Trustees and officers of the Funds who hold positions with
the Adviser receive indirect compensation from the Funds in the form of the
investment advisory fee paid to the Adviser. The following table sets forth
information regarding compensation of Trustees by the Funds for the fiscal year
ended September 30, 2004, but does not include expenses.

COMPENSATION TABLE
For the fiscal year ended September 30, 2004

PENSION OR RETIREMENT TOTAL COMPENSATION
AGGREGATE BENEFITS ACCRUED ESTIMATED ANNUAL FROM BOTH FUNDS
COMPENSATION AS PART OF EACH BENEFITS UPON AND FUND COMPLEX
NAME OF TRUSTEE FROM EACH FUND FUND'S EXPENSES RETIREMENT PAID TO TRUSTEES
---------------------------------------------------------------------------------------------------------

INDEPENDENT TRUSTEES
Lawrence S. Lewin $ 25,500 N/A N/A $ 51,000
Robert P. Mack, M.D. $ 26,500 N/A N/A $ 53,000
Eric Oddleifson $ 30,500 N/A N/A $ 61,000
Oleg M. Pohotsky $ 32,050 N/A N/A $ 64,100
Uwe E. Reinhardt, Ph.D. $ 26,500 N/A N/A $ 53,000
Henri A. Termeer $ 23,500 N/A N/A $ 47,000

INTERESTED TRUSTEES
Daniel R. Omstead, Ph.D. $ 0 N/A N/A $ 0

EXECUTIVE OFFICERS

The following table sets forth information (Name (Age), Address, Positions
with the Funds) for at least the last five years with respect to the executive
officers of the Funds who do not also serve as Trustees. Each officer has been
elected by the Board of Trustees and serves at the pleasure of the Trustees.

KATHLEEN M. ECKERT (38), 30 ROWES WHARF, BOSTON, MA 02110

Chief Compliance Officer of HQH, HQL and Hambrecht & Quist Capital
Management LLC (since October 2004); Secretary and Treasurer of HQH and HQL
(since February 2005); Senior Vice President of Ivy Mackenzie Services Corp.,
from June 2002 to January 2004. Chief Compliance Officer of Mackenzie Investment
Management, Inc. from June 2002 to June 2003. Director of Fund Administration of
Mackenzie Investment Management Inc. from 1999 to June 2003.

REQUIRED VOTE

Each Fund's Declaration of Trust states that the Trustees shall be elected
by a plurality of the Fund's shares voting at the Annual Meeting. The Trustees
recommend a vote FOR all nominees.

INFORMATION PERTAINING TO THE ADVISER

Hambrecht & Quist Capital Management LLC, a limited liability company under
the laws of Delaware, is the investment adviser for each Fund. Under each Fund's
Current Agreement, the Adviser is responsible for the management of the Fund's
assets, subject to the supervision of the Board of Trustees. The Adviser manages
the investments of each Fund in accordance with its investment objective and
policies. The Adviser is also obligated to supervise and perform certain
administrative and management services and is obligated to provide the office
space, facilities, equipment and personnel necessary to perform its duties.
Except for a portion of the salary of the Funds' Chief Compliance Officer, the
salaries of all officers of the Funds and all personnel of the Funds or of the
Adviser performing services relating to research, statistical or investment
activities, and of all Trustees who are Interested Persons of the Funds or of
the Adviser, are paid by the Adviser or an affiliate thereof. The Adviser is
located at 30 Rowes Wharf, Suite 430, Boston, MA 02110-3328.

Each Fund's current Adviser is owned by Daniel R. Omstead Ph.D, Mary N.
Omstead and the Alan G. Carr Irrevocable Trust. Mr. Carr, a former portfolio
manager, president and trustee of each of the Funds, passed away in October
2003. Dr. Omstead is currently the President and Chief Executive Officer of the
Adviser. Mary Omstead is Dr. Omstead's wife. Under the terms of the Adviser's
current Amended and Restated Limited Liability Company Agreement, the Adviser
will purchase the Alan G. Carr Irrevocable Family Trust's interest in the
Adviser over the course of a number of years.

Daniel R. Omstead Ph.D serves as President and Chief Executive Officer of
the Adviser. The address for Dr. Omstead is c/o the Adviser at 30 Rowes Wharf,
Suite 430, Boston, Massachusetts 02110-3328.

REPORT OF THE AUDIT COMMITTEE OF EACH FUND

Each Fund's Audit Committee reviewed and discussed the Fund's audited
financial statements with management for the Fund's fiscal year ended September
30, 2004, and discussed with the Fund's independent registered public
accountants, Deloitte &Touche LLP, the matters required to be discussed by SAS
61 (Communication with Audit Committees), which includes among other items,
matters relating to the conduct of an audit of the Fund's financial statements.
Each Fund's Audit Committee received written disclosures and the letter from
Deloitte & Touche LLP required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) and discussed

with Deloitte & Touche LLP its independence. Based on its review and discussions
with management and Deloitte & Touche LLP, each Fund's Audit Committee
recommended to the Board of Trustees that the Fund's audited financial
statements for the Fund's fiscal year ended September 30, 2004 be included in
the Fund's Annual Report filed with the Securities and Exchange Commission (the
"SEC").

INFORMATION REGARDING THE FUNDS'
INDEPENDENT ACCOUNTANTS FOR PRIOR YEARS

PricewaterhouseCoopers LLP ("PWC") served as the independent accountants
for the Funds for their fiscal years ended September 30, 2002 and 2003, and had
been selected as the independent accountants for their fiscal year ending
September 30, 2004. On May 7, 2004, PWC resigned as the Funds' independent
accountants for the fiscal year ending September 30, 2004 effective upon the
completion of services related to the Funds' semi-annual financial statements.
The reports provided by PWC for each of the Funds for the fiscal years ending
September 30, 2002 and September 30, 2003 were unqualified and contained no
adverse opinion or disclaimer of opinion, nor were the reports modified as to
uncertainly, audit scope, or accounting principle. Further, in connections with
its audits for the two previous fiscal years and through the date of this proxy
statement, there have been no disagreements between PWC and the Funds on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to their
satisfaction, would have caused PWC to reference the subject matter of the
disagreements in its report on the financial statements for such years.

PROPOSAL 2
RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS

Pursuant to the 1940 Act, at a meeting called for such purpose on April 12,
2005, each Fund's Audit Committee recommended and a majority of the Board of
Trustees of each Fund, including a majority of the Independent Trustees,
selected Deloitte & Touche LLP as the independent registered public accountants
for the year ending September 30, 2005. Each Fund has been advised that neither
Deloitte & Touche LLP nor any of its partners has any direct or material
indirect financial interest in either of the Funds, nor has had any connection
during the past three years with the either of the Funds in the capacity of
promoter, underwriter, voting trustee, director, officer or employee.

Accounting services to be performed by Deloitte & Touche LLP for each Fund
will consist of the examination of the annual financial statements of the Funds,
consultation on financial, accounting and reporting matters, review and
consultation regarding various filings with the SEC and attendance at some
meetings of the Board of Trustees. Deloitte & Touche LLP also will perform
non-audit services consisting of review of income tax returns of each Fund.

A representative of Deloitte & Touche LLP will be present and available for
questioning at the Annual Meeting and will have an opportunity to make a
statement.

The following tables set forth the aggregate fees billed for professional
services rendered by Delotte & Touche LLP or PWC to the Funds during the Funds'
two most recent fiscal years:

H&Q HEALTHCARE INVESTORS

FISCAL YEAR AUDIT FEES AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
----------- ---------- ------------------ -------- --------------

2004 $ 59,740 $ 0 $ 5,000 $ 18,947
2003 $ 54,550 $ 0 $ 11,088 $ 0

H&Q LIFE SCIENCES INVESTORS

FISCAL YEAR AUDIT FEES AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
----------- ---------- ------------------ -------- --------------

2004 $ 59,660 $ 0 $ 5,000 $ 12,631
2003 $ 54,550 $ 0 $ 7,392 $ 0

All of the services described in the tables above were approved by the
Audit Committees pursuant to its pre-approval policies and procedures (the
"Pre-Approval Policies and Procedures") which are summarized below to the extent
that such services were required to be pre-approved by the Audit Committee. The
nature of the services comprising other fees was a review of Fund
administration.

The aggregate non-audit fees billed by Deloitte & Touche LLP for services
rendered to HQH and to the Adviser, or an affiliate thereof that provides
ongoing services to HQH, for the fiscal year ended September 30, 2004 amounted
to $5,000. The aggregate non-audit fees billed by PWC for services rendered to
HQH and to the Adviser, or an affiliate thereof that provides ongoing services
to HQH, for the fiscal year ended September 30, 2003 amounted to $11,088. The
aggregate non-audit fees billed by Deloitte & Touche LLP for services rendered
to HQL and to the Adviser, or an affiliate thereof that provides ongoing
services to HQL, for the fiscal year ended September 30, 2004 amounted to
$5,000. The aggregate non-audit fees billed by PWC for services rendered to HQL
and to the Adviser, or an affiliate thereof that provides ongoing services to
HQL, for the fiscal year ended September 30, 2003 amounted to $7,392.

The Funds' Audit Committees have adopted Pre-Approval Policies and
Procedures pursuant to which the Committees pre-approve all audit and non-audit
services provided by the Funds' independent auditor (the "Auditor") and any
non-audit services provided by the Auditor to the Funds' Investment Adviser and
Service Affiliates during the period of the Auditor's engagement to provide
audit services to the Funds, if those services directly impact the Funds'
operations and financial reporting. Audit services include those typically
associated with the annual audit such as evaluation of internal controls.
Non-Audit services include certain services that are audit-related, such as
consultations regarding financial accounting and reporting standards and tax
services. Certain services may not be provided by the Auditor to the Funds' or
the Funds' Service Affiliates without jeopardizing the Auditor's independence.
These services are deemed prohibited services and include certain management
functions; human resources services; broker-dealer, investment adviser or
investment banking services; legal services; and expert services unrelated to
the audit. Other services are conditionally prohibited and may be provided if
the Audit Committees reasonably conclude that the results of the services will
not be subject to audit procedures during an audit of the Funds' financial
statements. These types of services include bookkeeping; financial information
systems design and implementation; appraisal or valuation services; actuarial
services; and internal audit outsourcing services.

The Pre-Approval Policies and Procedures require Audit Committee approval
of the engagement of the Auditor for each fiscal year and approval of the
engagement by at least a majority of the Funds' independent trustees. In
determining whether to engage the Auditor for its audit services, the Audit
Committees will consider the Auditor's proposed fees for the engagement, in
light of the scope and nature of the audit services that the Funds will receive.
The Pre-Approval Policies and Procedures also permit the Audit Committees to
pre-approve the provisions of types or categories of permissible non-audit
services for the Funds and their Service Affiliates on an annual basis at the
time of the Auditor's engagement and on a project-by-project basis. At the time
of the annual engagement of the Funds' Auditor, the Audit Committees are to
receive a list of the categories of expected non-audit

services with a description and an estimated budget of fees. In their
pre-approval, the Audit Committees should determine that the provision of the
service is consistent with, and will not impair, the ongoing independence of the
Auditor and set any limits on fees or other conditions they find appropriate.
Non-audit services may also be approved on a project-by-project basis by the
Audit Committees consistent with the same standards for determination and
information.

The Audit Committees may also appoint a Designated Member of the Committees
to pre-approve non-audit services that have not been pre-approved or material
changes in the nature or cost of any non-audit services previously pre-approved.
The Designated Member may not pre-approve any project the estimated budget (or
budgeted range) of fees of which exceed or may exceed $15,000 per Fund. Any
actions by the Designated Member are to be ratified by the Audit Committees by
the time of their next scheduled meeting. The Funds' Pre-Approval Policies and
Procedures are reviewed annually by the Audit Committees and the Funds maintain
a record of the decisions made by the Committees pursuant to these procedures.

INFORMATION PERTAINING TO THE CUSTODIAN AND TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND REGISTRAR

The Funds' securities and cash are held under a custodian contract by State
Street Bank and Trust Company (the "Custodian"), whose principal business
address is 225 Franklin Street, Boston, MA 02110. The Custodian also performs
certain accounting related functions for the Funds, including calculation of NAV
and net income.

EquiServe, Inc. serves as Dividend Disbursing Agent. EquiServe Trust
Company, a fully owned subsidiary of EquiServe, Inc., serves as (1) the Plan
Agent for the Funds' Dividend Reinvestment Plan and (2) the Transfer Agent and
Registrar for Shares of the Funds. EquiServe, Inc. and EquiServe Trust Company
have their principal business at 150 Royall Street, Canton, MA 02021.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act and Section 30(j) of the 1940 Act, as
applied to a Fund, require the Fund's officers and trustees, investment manager,
affiliates of the investment manager, and persons who beneficially own more than
ten percent of a registered class of the Fund's outstanding securities
("Reporting Persons"), to file reports of ownership of the Fund's securities and
changes in such ownership with the SEC and the NYSE. Such persons are required
by SEC regulations to furnish the Fund with copies of all such filings.

Based solely upon its review of the copies of such forms received by it,
and written representations from certain Reporting Persons that no year-end
reports were required for those persons, each Fund believes that during the
fiscal year ended September 30, 2004, its Reporting Persons complied with all
applicable filing requirements.

OTHER BUSINESS

As of the date of this Proxy Statement, the Board of Trustees is not aware
that any matters are to be presented for action at the Annual Meeting other than
those described above. Should other business properly be brought before the
Annual Meeting, it is intended that the accompanying Proxy will be voted thereon
in accordance with the judgment of the persons named as proxies.

PROXIES AND VOTING AT THE ANNUAL MEETING

Shareholders who execute proxies may revoke them at any time before they
are voted by written notice to the Secretary of the Fund at 30 Rowes Wharf,
Suite 430, Boston, MA 02110-3328, or by casting a vote at the Annual Meeting.
All valid proxies received prior to the Annual Meeting, or any adjournment(s) or
postponements(s) thereof, will be voted at the Annual Meeting and any
adjournments or postponements thereof.

The representation in person or by proxy of a majority of the outstanding
shares of each Fund is necessary to constitute a quorum for transacting business
at the Annual Meeting. For purposes of determining the presence of a quorum,
abstentions and broker "non-votes" will be treated as shares that are present.
Broker non-votes are proxies received by a Fund from brokers or nominees when
the broker or nominee has neither received instructions from the beneficial
owner or other persons entitled to vote nor has discretionary power to vote on a
particular matter. Broker non-votes are unlikely to be relevant to the Annual
Meeting because the Proposal to be voted upon by the shareholders involves a
matter that the NYSE considers to be routine and within the discretion of
brokers to vote if no customer instructions are received.

Shareholders of each Fund will vote separately with respect to Proposal 1,
which requires the approval of a plurality of shares voting at the Annual
Meeting (i.e., the one nominee, in the case of HQH, and the three nominees, in
the case of HQL, receiving the greatest number of votes will be elected).

Shareholders of each Fund will vote separately with respect to Proposal 2,
which requires the approval of a majority of all votes validly cast at the
Annual Meeting.

Abstentions will not be counted in favor of, but will have no other effect
on, the votes for Proposals 1 and 2.

Matters on which a choice has been provided will be voted as indicated on
the proxy card and, if no instruction is given, the persons named as proxies
will vote the shares represented thereby in favor of each Proposal, and will use
their best judgment in connection with the transaction of such other business as
may properly come before the Annual Meeting or any adjournment(s) or
postponement(s) thereof.

In the event that sufficient votes in favor any Proposal set forth in the
Notice of Annual Meeting are not received by June 14, 2005 or the necessary
quorum has not been obtained, the persons named as proxies on the enclosed proxy
card may propose one or more adjournments of the Annual Meeting to permit
further solicitation. Any such adjournment will require the affirmative vote of
the holders of a majority of the shares present in person or by proxy at the
session of the Annual Meeting to be adjourned. The persons named as proxies on
the enclosed proxy card will vote in favor of such adjournment those proxies
which they are entitled to vote in favor of the Proposal. They will vote against
any such adjournment those proxies required to be voted against the Proposal.

As of May 4, 2005, there were 20,820,269 shares of beneficial interest of
HQH and 12,343,273 shares of beneficial interest of HQL issued and outstanding.
Shareholders will be entitled to one vote for each share held. Only shareholders
of record at the close of business on May 4, 2005, the record date, will be
entitled to vote at the Annual Meeting. As of May 4, 2005, the Trustees and
officers of each Fund individually and as a group beneficially owned less than
1% of the outstanding voting securities of each Fund. To the best of the Fund's
knowledge, based upon filings made with the SEC, as of May 4, 2005, no persons
or group beneficially owned more than 5% of the voting securities of either
Fund.

PROPOSALS FOR 2006 ANNUAL MEETING

Shareholder proposals for each Fund's 2006 Annual Meeting must be received
at the Fund's executive offices at 30 Rowes Wharf, Fourth Floor, Boston,
Massachusetts 02110-3328 no later than January 14, 2006 for inclusion in the
2006 Proxy Statement and form of proxy. Submission of such proposals does not
insure that they will be included in the 2006 Proxy Statement or submitted for a
vote at the 2006 Annual Meeting.

In addition, under Rule 14a-4 of the SEC's proxy rules a company may use
discretionary voting authority to vote on matters coming before an annual
meeting of shareholders if the company does not have notice of the matter at
least 45 days before the date corresponding to the date on which the company
first mailed its proxy materials for the prior year's annual meeting of
shareholders or the date specified by an overriding advance notice provision in
the company's by-laws. As neither Funds' by-laws contain such an advance notice
provision, the Funds may use discretionary voting authority to vote on matters
coming before the Funds' 2006 Annual Meeting of Shareholders, if the Funds do
not have written notice of a shareholder proposal on or before March 27, 2005.

GENERAL

The Fund will pay the cost of preparing, assembling and mailing the
material in connection with solicitation of proxies, and will reimburse brokers,
nominees and similar record holders for their reasonable expenses incurred in
connection with forwarding proxy material to beneficial holders. In addition to
the solicitation by use of the mails, certain officers of the Fund and certain
employees of the Adviser, who will receive no compensation for their services
other than their regular salaries, may solicit the return of proxies personally
or by telephone or facsimile.

H&Q HEALTHCARE INVESTORS
H&Q LIFE SCIENCES INVESTORS
May 10, 2004

HQHCM-PS-05

H & Q HEALTHCARE INVESTORS
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694

[GRAPHIC]
YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY.

VOTE-BY-INTERNET VOTE-BY-TELEPHONE

Log on to the Internet and go to Call toll-free
http://www.eproxyvote.com/hqh OR 1-877-PRX-VOTE (1-877-779-8683)
[GRAPHIC] [GRAPHIC]

IF YOU VOTE OVER THE INTERNET OR BY TELEPHONE, PLEASE DO NOT MAIL YOUR CARD.

DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.

H&Q HEALTHCARE INVESTORS

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE NOMINEE AND FOR ITEM 2.

1. On the election of one Trustee:

NOMINEE: (01) Henri A. Termeer

FOR WITHHELD
/ / / /

2. On the ratification of the selection of Deloitte & Touche LLP as the
independent registered public accountants to the Fund for the fiscal
year ending September 30, 2005.

FOR AGAINST ABSTAIN
/ / / / / /

3. In their discretion, on all other business that may properly come before
the Annual Meeting and any adjournment(s) or postponement(s) thereof.

Mark box at right if an address change or comment has been noted on the reverse
side of this card. / /

Please be sure to sign and date this Proxy.

Signature: ________________ Date: __________ Signature: ___________ Date: ______

DETACH HERE

H&Q HEALTHCARE INVESTORS

PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 14, 2005
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned hereby appoints Daniel R. Omstead, Ph.D., Henri A. Termeer and
Kathleen M. Eckert, and each of them, proxies of the undersigned, with full
powers of substitution, to vote at the Annual Meeting of Shareholders of H&Q
HEALTHCARE INVESTORS (the "Fund") to be held on June 14, 2005 at 9:00 A.M. at
the Langham Hotel Boston, 250 Franklin Street, Boston, Massachusetts 02110,
and at any adjournment(s) or postponement(s) thereof, all the shares of the
Fund outstanding in the name of the undersigned as follows on the reverse of
this card.

THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEE, AND WITH RESPECT TO
ITEM 2, AS SAID PROXIES, AND EACH OF THEM, MAY DETERMINE.

PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

Please sign this proxy exactly as your name appears on the books of the Fund.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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

H & Q LIFE SCIENCES INVESTORS
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694

[GRAPHIC]
YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY.

VOTE-BY-INTERNET VOTE-BY-TELEPHONE

Log on to the Internet and go to Call toll-free
http://www.eproxyvote.com/hql OR 1-877-PRX-VOTE (1-877-779-8683)
[GRAPHIC] [GRAPHIC]

IF YOU VOTE OVER THE INTERNET OR BY TELEPHONE, PLEASE DO NOT MAIL YOUR CARD.

DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL

PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.

H&Q LIFE SCIENCES INVESTORS

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR ALL NOMINEES AND FOR ITEM 2.

1. On the election of three Trustees:

NOMINEES: (01) Robert P. Mack, M.D., (02) Eric Oddleifson and
(03) Oleg M. Pohotsky.

FOR WITHHELD
ALL / / / / FROM ALL
NOMINEES NOMINEES

/ /
---------------------------------------
For all nominees except as noted above

2. On the ratification of the selection of Deloitte & Touche LLP as the
independent registered public accountants of the Fund for the fiscal
year ending September 30, 2005.

3. In their discretion, on all other business that may properly come before
the Annual Meeting and any adjournment(s) or postponement(s) thereof.

Mark box at right if an address change or comment has been noted on the reverse
side of this card. / /

Please be sure to sign and date this Proxy.

Signature: ________________ Date: __________ Signature: ___________ Date: ______

DETACH HERE

H&Q LIFE SCIENCES INVESTORS

PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 14, 2005
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

The undersigned hereby appoints Daniel R. Omstead, Ph.D., Henri A. Termeer and
Kathleen M. Eckert, and each of them, proxies of the undersigned, with full
powers of substitution, to vote at the Annual Meeting of Shareholders of
H&Q LIFE SCIENCES INVESTORS (the "Fund") to be held on June 14, 2005 at
9:00 A.M. at the Langham Hotel Boston, 250 Franklin Street, Boston,
Massachusetts 02110, and at any adjournment(s) or postponement(s) thereof,
all the shares of the Fund outstanding in the name of the undersigned as
follows on the reverse of this card.

PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?

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