-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F3PcD7qxBnB+59pjdMMmnd6ud5zF1M6L4dinfAa9vI0YxgAVqscUoNILkICn51VR FHmV2jb/l2u4wt650ZoSlw== 0000950117-96-000017.txt : 19960111 0000950117-96-000017.hdr.sgml : 19960111 ACCESSION NUMBER: 0000950117-96-000017 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951031 FILED AS OF DATE: 19960108 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS CAPITAL APPRECIATION FUND CENTRAL INDEX KEY: 0000811159 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05041 FILM NUMBER: 96501624 BUSINESS ADDRESS: STREET 1: BROAD & CHESTNUT STS CITY: PHILADELPHIA STATE: PA ZIP: 19101 BUSINESS PHONE: 2155858827 MAIL ADDRESS: STREET 2: BROAD & CHESTNUT STREETS CITY: PHILADELPHIA STATE: PA ZIP: 19101 FORMER COMPANY: FORMER CONFORMED NAME: COUNSELLORS CAPITAL APPRECIATION FUND DATE OF NAME CHANGE: 19920302 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS EMERGING GROWTH FUND INC /PA/ CENTRAL INDEX KEY: 0000825305 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05396 FILM NUMBER: 96501625 BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXIGNTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 FORMER COMPANY: FORMER CONFORMED NAME: COUNSELLORS EMERGING GROWTH FUND INC DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS INTERNATIONAL EQUITY FUND /PA/ CENTRAL INDEX KEY: 0000846582 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05765 FILM NUMBER: 96501626 BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 FORMER COMPANY: FORMER CONFORMED NAME: WARBURG PINCUS INTERNATIONAL EQUITY FUND /PA/ DATE OF NAME CHANGE: 19950201 FORMER COMPANY: FORMER CONFORMED NAME: COUNSELLORS INTERNATIONAL EQUITY FUND INC DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS JAPAN OTC FUND INC CENTRAL INDEX KEY: 0000927947 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133782949 STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08686 FILM NUMBER: 96501627 BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 400 BELLEVUE PKWY CITY: WILMINGTON STATE: DE ZIP: 19809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS EMERGING MARKETS FUND INC CENTRAL INDEX KEY: 0000933582 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133762717 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08252 FILM NUMBER: 96501628 BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS POST VENTURE CAPITAL FUND INC CENTRAL INDEX KEY: 0000948207 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07327 FILM NUMBER: 96501629 BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3147 N-30D 1 WARBURG PINCUS EQUITY INCOME 6 FUND N-30D [Logo] ANNUAL REPORT OCTOBER 31, 1995 [ ] WARBURG PINCUS CAPITAL APPRECIATION FUND [ ] WARBURG PINCUS EMERGING GROWTH FUND [ ] WARBURG PINCUS INTERNATIONAL EQUITY FUND [ ] WARBURG PINCUS JAPAN OTC FUND [ ] WARBURG PINCUS EMERGING MARKETS FUND [ ] WARBURG PINCUS POST-VENTURE CAPITAL FUND Prospectuses containing more complete information, including management fees and expenses and, where applicable, the special considerations and risks associated with international investing, may be obtained by calling 1-800-257-5614 or by writing to Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030. Investors should read the prospectus carefully before investing. - -------------------------------------------------------------------------------- WARBURG PINCUS CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- December 8, 1995 Dear Shareholder: The objective of Warburg Pincus Capital Appreciation Fund (the 'Fund') is long-term capital appreciation. The Fund invests primarily in a diversified selection of medium-size domestic companies deemed to have above-average earnings growth prospects or where significant fundamental changes are taking place that augur well for improved earnings. The Fund rose 24.05% for the 12 months ended October 31, 1995, vs. a gain of 26.36% in the S&P 500 Index, an increase of 23.98% in the Lipper Growth Fund Index and an advance of 21.24% in the S&P MidCap 400 Index. The Fund's performance during the period was driven by the broad market's strength and by particularly solid gains across our most heavily weighted areas--technology, financial services, health care and global media/entertainment. The performance of the technology sector, in particular, as a whole was extremely strong over the past 12 months, and a number of our holdings within the category generated exceptional returns. We remain bullish on technology issues, and believe that the stocks held in the portfolio have above-average prospects. Financial stocks represent a significant portion of the portfolio, and these also contributed positively to the Fund's performance during the fiscal year. These issues have benefited from a favorable interest-rate environment and a sweeping trend toward consolidation within the industry, particularly the banking sector. We expect consolidation to continue within the banking industry, and hold a number of excellent banks that may stand to gain from this trend, either as acquirers or as takeover targets. Healthcare is another area of emphasis in the Fund. Within the sector, we have chosen to concentrate most heavily on drug and pharmaceutical companies, which have been among the market's better performers in 1995. These companies have taken major steps toward increasing their profitability in recent years, through both consolidation and work-force reductions, and hence have thrived despite difficulty in raising prices domestically. We believe that the specific names held in the portfolio have outstanding potential. They are at the forefront of new-product development and are well-positioned to capitalize on the growing overseas demand for healthcare-related products. This demand should be particularly strong in emerging nations, which stand to devote increasing amounts of resources toward maintaining and improving the health of their citizens as their economies develop. We are similarly positive on the prospects of our media and entertainment holdings, which include Walt Disney, a company we consider to be the premier entertainment business in the world. Disney's proposed union with Capital Cities/ABC highlights the rapid growth in consolidation within the entertainment industry. This trend has been favorably received by the stock market, and a number of companies in the portfolio have seen their share prices pushed sharply higher as a result. Looking ahead, we remain positive on the market's prospects. Data on inflation suggest that bond yields will remain low and possibly fall further, boosting equity valuations. At the same time, corporate profits should remain strong, even in the face of a slowdown in revenue growth, underpinned by the cost-cutting and productivity-enhancing efforts corporate America has made over the past several years. We believe that the Fund is well-positioned to take advantage of these twin forces. George U. Wyper Susan L. Black Co-Portfolio Manager Co-Portfolio Manager
2 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS CAPITAL APPRECIATION FUND - -------------------------------------------------------------------------------- GROWTH OF $10,000 INVESTED IN COMMON SHARES OF WARBURG PINCUS CAPITAL APPRECIATION FUND SINCE INCEPTION AS OF OCTOBER 31, 1995 The graph below illustrates the hypothethical investment of $10,000 in Common Shares of Warburg Pincus Capital Appreciation Fund (the 'Fund') from August 17, 1987 (inception) to October 31, 1995, assuming the reinvestment of dividends and capital gains at net asset value, compared to the S&P 500* for the same time period. [PERFORMANCE GRAPH] Average Annual Total Returns for periods Fund ending 10/31/95 (Common Shares) S&P 500 (Common Shares) --------------- ------- --------------- 8/17/87.............. $10,000.0 $10,000.0 1 year 10/31/87.............. 7,740.0 7,678.0 24.05% 10/31/88.............. 9,622.0 8,817.0 10/31/89.............. 12,068.0 11,133.0 5 year 10/31/90.............. 10,848.0 10,305.0 16.53% 10/31/91.............. 13,711.0 13,746.0 10/31/92.............. 15,136.0 15,110.0 Since Inception 10/31/93.............. 18,495.0 17,363.0 (08/17/87) 10/31/94.............. 18,801.0 18,026.0 10.86% 10/31/95.............. 23,322.0 22,778.0
FUND ------ 1 Year Total Return (9/30/94-9/30/95)...................................... 25.23% 5 Year Average Annual Total Return (9/30/90-9/30/95)....................... 15.84% Average Annual Total Return Since Inception (8/17/87-9/30/95).............. 10.95%
All figures cited here represent past performance and do not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than original cost. - ------------ * The S&P 500 is an unmanaged index, composed of approximately 500 common stocks, most of which are listed on the New York Stock Exchange, and has no defined investment objective. 3 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND - -------------------------------------------------------------------------------- December 8, 1995 Dear Shareholder: The objective of Warburg Pincus Emerging Growth Fund (the 'Fund') is maximum capital appreciation. The Fund targets small and medium-size U.S. companies that have successfully completed the start-up phase, show positive earnings momentum and are deemed to have the potential to achieve significant capital gains within a relatively short period of time. For the 12 months ended October 31, 1995, the Fund gained 33.91%, vs. gains of 23.58% in the Lipper Small Company Growth Fund Index, 18.33% in the Russell 2000 Index and 26.36% in the S&P 500 Index. The Fund's strong returns over the period are attributable to timely stock selection, particularly in our more heavily weighted areas. Our technology position, which represents a diversified mix of companies spanning a number of industries, performed extremely well. The emphasis on these stocks is not a short-term sector bet, but rather a direct result of our research process, which seeks companies possessing a catalyst or dynamic of change (e.g., new management, a new product or distribution channel, etc.) that should tend to result in accelerated earnings growth. A considerable number of such companies are involved in technology and related areas, hence their significant weighting in the portfolio. Top performers for the Fund during the reporting period included Maxim Integrated Products, Synopsys and System Software Associates. Another area of emphasis in the Fund is healthcare. Healthcare in the U.S. is fraught with inefficiencies, and that fact, coupled with an aging population, presents a wide window of opportunity for companies nimble and innovative enough to provide solutions to these problems. We see vast potential, in particular, for companies able to bring technological applications to the healthcare industry, and we hold the stocks of a number of promising companies in this area. We are also bullish on the prospects of selected pharmaceutical companies (e.g., Gilead Sciences), which should continue to show strong earnings growth despite the likelihood of healthcare and welfare reform. A third area of concentration in the portfolio is companies involved in the communications industry--i.e., those benefiting from the marriage of telecommunications to computer technology. This includes firms that manufacture and service computer hardware and software, telephones and telephone equipment, as well as those involved in broadcasting, publishing, and music and entertainment. Our holdings in these areas proved rewarding investments over the past 12 months, in particular our holdings of Glenayre Technologies and Paging Network. Looking ahead, we think the outlook remains favorable for the small-capitalization market as a whole. We believe that small-cap stocks, in aggregate, are less than midway through a multiyear cycle of outperformance relative to larger-company stocks, and that the potential exists for further, substantial gains over the next several years. Set within this context, we will continue to strive to identify those stocks that have the best prospects for above-average returns. Elizabeth B. Dater Stephen J. Lurito Co-Portfolio Manager Co-Portfolio Manager
4 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND - -------------------------------------------------------------------------------- GROWTH OF $10,000 INVESTED IN COMMON SHARES OF WARBURG PINCUS EMERGING GROWTH FUND SINCE INCEPTION AS OF OCTOBER 31, 1995 The graph below illustrates the hypothetical investment of $10,000 in Common Shares of Warburg Pincus Emerging Growth Fund (the 'Fund') from January 21, 1988 (inception) to October 31, 1995, assuming the reinvestment of dividends and capital gains at net asset value, compared to the S&P 500* and Lipper Small Company Growth Fund Index ('Lipper Small Co.')** for the same time period. [PERFORMANCE GRAPH] Average Annual Total Returns for periods Fund Lipper ending 10/31/95 (Common Shares) S&P 500 Small Co. (Common Shares) --------------- ------- --------- --------------- 1/21/88....... $10,000.0 $10,000.0 $10,000.0 1 year 10/31/88....... 11,245.0 11,145.0 11,607.0 33.91% 10/31/89....... 13,967.0 14,073.0 14,025.0 10/31/90....... 11,606.0 13,026.0 10,896.0 5 year 10/31/91....... 18,289.0 17,376.0 17,004.0 25.15% 10/31/92....... 20,094.0 19,100.0 18,196.0 10/31/93....... 26,581.0 21,948.0 23,564.0 Since Inception 10/31/94....... 26,624.0 22,786.0 24,056.0 (01/21/88) 10/31/95....... 35,653.0 28,793.0 29,729.0 17.74%
FUND ----- 1 Year Total Return (9/30/94-9/30/95)....................................... 41.54% 5 Year Average Annual Total Return (9/30/90-9/30/95)........................ 25.15% Average Annual Total Return Since Inception (1/21/88-9/30/95)............... 18.44%
All figures cited here represent past performance and do not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than original cost. - ------------ * The S&P 500 is an unmanaged index, composed of approximately 500 common stocks, most of which are listed on the New York Stock Exchange, and has no defined investment objective. ** The Lipper Small Company Growth Fund Index is a net asset value weighted index of the 30 largest small company growth funds that is compiled by Lipper Analytical Services, Inc. It is unmanaged with no defined investment objective. 5 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND - -------------------------------------------------------------------------------- December 8, 1995 Dear Shareholder: The objective of Warburg Pincus International Equity Fund (the 'Fund') is long-term capital appreciation. The Fund aims to tap into the strong growth potential of today's world stock markets by investing primarily in companies whose principal business activities and interests are outside the United States. For the 12 months ended October 31, 1995, the Fund fell 2.55%, vs. losses of 0.61% in the Lipper International Fund Index and 0.37% in the Morgan Stanley Europe, Australia and Far East ('EAFE') Index. Exposure to emerging markets (the Lipper Emerging Markets Fund Index fell 18.35% during the period) accounted for much of the Fund's underperformance. Shareholders should note, though, that while the Fund's performance lagged that of the EAFE Index for the fiscal year, its long-term record is superior. From its inception on May 2, 1989, through October 31, 1995, the Fund generated an average annual return of 12.77%, compared to 3.15% for the EAFE Index. Also noteworthy is the fact that the Fund managed to outperform its benchmark with a lower level of volatility. After a disappointing first half of its fiscal year, the Fund showed a considerable improvement in performance in the second half, aided greatly by a sharp rebound in its Japanese holdings (27.6% of the portfolio through October). Particularly strong gains were recorded by the Fund's Japanese technology issues. We believe that these stocks still hold considerable upside potential, and that most of the broader Japanese market remains significantly undervalued based on traditional long-term measures of value (e.g., price relative to book value, sales and cash flow). Other Asian countries we remain positive on are South Korea and Taiwan, two emerging markets that have suffered in 1995. Taiwan has seen its stock market lose roughly a third of its value since the year began, the result of ongoing political tensions with China. This has created particularly attractive values in Taiwan's market, and we have used the opportunity to increase our Taiwanese stake, adding to positions in well-managed companies in the shipping and industrial sectors. In general, we feel that emerging markets have been oversold, given their outstanding long-term attractions. The Fund's European holdings contributed positively to its performance over the trailing 12 months, supported by falling interest rates. By country, the Fund's largest weightings as of October 31 were in the United Kingdom and France (7.2% and 5.9%, respectively, of the portfolio). Our British holdings were strong performers during the period. French issues generated less impressive results, hampered by concerns regarding fiscal policies of the Chirac administration and doubts about the country's ability to meet the criteria for European economic and monetary union in 1999. But we remain positive on the outlook for the French companies held in the portfolio, believing they are strong, well-managed businesses. Richard H. King Portfolio Manager 6 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND - -------------------------------------------------------------------------------- GROWTH OF $10,000 INVESTED IN COMMON SHARES OF WARBURG PINCUS INTERNATIONAL EQUITY FUND SINCE INCEPTION AS OF OCTOBER 31, 1995 The graph below illustrates the hypothetical investment of $10,000 in Common Shares of Warburg Pincus International Equity Fund (the 'Fund') from May 2, 1989 (inception) to October 31, 1995, assuming the reinvestment of dividends and capital gains at net asset value, compared to the Morgan Stanley Europe, Australia and Far East Index ('EAFE')* for the same time period. [PERFORMANCE GRAPH] Average Annual Total Returns for periods Fund ending 10/31/95 (Common Shares) EAFE (Common Shares) --------------- ------- --------------- 5/2/89.............. $10,000.0 $10,000.0 1 year 10/31/89.............. 11,350.0 10,029.0 -2.55% 10/31/90.............. 12,022.0 8,744.0 10/31/91.............. 14,356.0 9,352.0 5 year 10/31/92.............. 13,145.0 8,116.0 12.68% 10/31/93.............. 18,492.0 11,156.0 10/31/94.............. 22,417.0 12,283.0 Since Inception 10/31/95.............. 21,891.0 12,237.0 (05/02/89) 12.77%
FUND ------ 1 Year Total Return (9/30/94-9/30/95)...................................... 0.01% 5 Year Average Annual Total Return (9/30/90-9/30/95)....................... 14.72% Average Annual Total Return Since Inception (5/02/89-9/30/95).............. 13.33%
All figures cited here represent past performance and do not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than original cost. - ------------ * EAFE is an unmanaged index of international equities with no defined investment objective that is compiled by Morgan Stanley Capital International. 7 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND - -------------------------------------------------------------------------------- December 8, 1995 Dear Shareholder: The objective of Warburg Pincus Japan OTC Fund (the 'Fund') is long-term capital appreciation. The Fund invests primarily in securities traded on the Japanese over-the-counter (OTC) market. At all times, except during temporary defensive periods, the Fund maintains at least 65% of its assets in these OTC securities. For the 12 months ended October 31, 1995, the Fund lost 7.72%, vs. a 15.58% decline in the yen-denominated JASDAQ Index. In dollar terms, the JASDAQ Index lost 19.93%. Though the Japanese market finished the period with a net loss, its rebound in recent months is encouraging. For example, the six-month total return of the Fund (4/30/95-10/31/95) is 15.80%. We believe that there are additional, significant grounds for optimism regarding Japan, and that the stock market's rally reflects a secular change under way in the Japanese economy, one that will provide excellent opportunities for smaller companies. There are several reasons for optimism. First, the yen's reversal suggests that Japanese finance officials are finally committed to taking the necessary steps to reverse the country's protracted economic slide. Recent money-supply data confirm the liquidity growth that we first suspected earlier this year, while the Bank of Japan's increasing willingness to discuss the country's troubled banking system is also encouraging and likely foreshadows a taxpayer-financed bailout of the financial sector. This will have a significant impact on the economy and the broad stock market. Second, there is a strong earnings recovery taking place in the manufacturing sector. The strongest growth in earnings is occurring in the electronics area, especially among semiconductor- and personal-computer-related companies, which are well-represented in the OTC market. Many other basic industries (e.g., paper and petrochemicals) are seeing good earnings growth as well, the result of aggressive restructuring efforts and strategic mergers. Third, on a longer-term basis, opportunities continue to appear for companies nimble enough to take advantage of inefficiencies within the Japanese economy. Though deregulation of Japan's overregulated economy is likely to remain slow, the rapidly expanding OTC market is presenting an increasing range of smaller companies that benefit from these changes. Our primary areas of focus in the portfolio currently are in personal-computer-related and consumption-related companies (e.g., retailers), which we believe have the best prospects over the coming months. We are also looking at opportunities in the housing sector, which stands to benefit from the current low level of interest rates and the reconstruction efforts necessitated by the Kobe earthquake. Shuhei Abe Nicholas P.W. Horsley Co-Portfolio Manager Co-Portfolio Manager
8 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND - -------------------------------------------------------------------------------- GROWTH OF $10,000 INVESTED IN COMMON SHARES OF WARBURG PINCUS JAPAN OTC FUND SINCE INCEPTION AS OF OCTOBER 31, 1995 The graph below illustrates the hypothethical investment of $10,000 in Common Shares of Warburg Pincus Japan OTC Fund (the 'Fund') from September 30, 1994 (inception) to October 31, 1995, assuming the reinvestment of dividends and capital gains at net assets value, compared to the JASDAQ* for the same time period. [PERFORMANCE GRAPH] Average Annual Total Returns for periods Fund ending 10/31/95 (Common Shares) JASDAQI*** JASDAQ** (Common Shares) --------------- ---------- --------- --------------- 9/30/94....... $10,000.0 $10,000.0 $10,000.0 6 months 10/31/94....... 9,850.0 9,698.0 9,901.0 15.80% 10/31/95....... 9,090.0 8,187.0 7,931.0 1 year -7.72% Since Inception (09/30/94) -8.40%
FUND --------- 1 Year Total Return (9/30/94 - 9/30/95)..................................... -9.20%
All figures cited here represent past performance and do not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than original cost. Without waivers or reimbursements of Fund expenses, average annual total returns for the 1 year period ending 9/30/95 and the 1 year and since inception periods ending 10/31/95, respectively, would have been -9.60%, -8.02% and -8.77%. - ------------ * The JASDAQ Over-The-Counter Composite Index is an unmanaged index comprised of stocks traded over-the-counter in Japan. ** Stated in Yen *** Stated in U.S. dollars + Non-annualized 9 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND - -------------------------------------------------------------------------------- December 8, 1995 Dear Shareholder: The objective of Warburg Pincus Emerging Markets Fund (the 'Fund') is growth of capital. The Fund is a non-diversified management investment company that invests primarily in equity securities of companies in emerging markets around the world. Total return since inception through October 31, 1995 (the Fund was launched December 30, 1994), was 13.33%, vs. a loss of -7.49% in the Lipper Emerging Markets Fund Index. The Fund's outperformance of its benchmark index resulted from good stock selection and a relatively large cash position in the first few months following its inception. In addition, the Fund's focus on Asian stocks due to their good fundamental values and sound economies meant that it avoided many of the problems in Latin America following the Mexican peso devaluation in December 1994. Currently, we are finding many compelling values in emerging markets, particularly in Asia. By region, our largest concentration among Asian markets is in Northeast Asia, principally Taiwan and South Korea (12.2% and 15.0% of the portfolio, respectively, as of October 31, 1995). Though Taiwan's market has fallen sharply in 1995 due to political tensions with China, we have viewed the situation as a buying opportunity, since we believe investors' concerns are largely overdone and that the long-term argument for investing in Taiwan remains strong. We are similarly bullish on South Korea, and hold the stocks of excellent companies in the banking, technology and industrial sectors. Other large Asian weightings in the portfolio include China/Hong Kong (13.9%) and Indonesia (10.4%), where we have found undemanding valuations in relation to prospective growth. The portfolio remains underweighted in Latin America, since we are finding better values and less economic uncertainty elsewhere. Among Latin American markets, our heaviest weighting is in Argentina, which represented 7.8% of the portfolio at the end of the reporting period. Richard H. King Nicholas P.W. Horsley Co-Portfolio Manager Co-Portfolio Manager
10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND - -------------------------------------------------------------------------------- GROWTH OF $10,000 INVESTED IN COMMON SHARES OF WARBURG PINCUS EMERGING MARKETS FUND SINCE INCEPTION AS OF OCTOBER 31, 1995 The graph below illustrates the hypothethical investment of $10,000 in Common Shares of Warburg Pincus Emerging Markets Fund (the 'Fund') from December 30, 1994 (inception) to October 31, 1995, assuming the reinvestment of dividends and capital gains at net assets value, compared to the Lipper Emerging Markets Fund Index* for the same time period. [PERFORMANCE GRAPH] Average Annual Total Returns for periods Fund ending 10/31/95 (Common Shares) Lipper (Common Shares) --------------- ------ --------------- 10/30/94.............. $10,000.0 $10,000.0 Since Inception 10/31/95.............. 11,333.0 9,435.0 (12/30/94) 13.33%+
FUND ----- Total Return Since Inception (12/30/94-9/30/95)....................................... 18.45%+
All figures cited here represent past performance and do not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than original cost. Without waivers or reimbursements of Fund expenses, aggregate total return since inception for the periods ending 9/30/95 and 10/31/95, respectively, would have been 12.70% and 8.10%. - ------------ * The Lipper Emerging Markets Funds Index contains Funds which seek long-term capital appreciation by investing at least 65% of total assets in emerging market equity securities, where 'Emerging Markets' is defined by a country's GNP per capita or other economic measures. + Non-annualized 11 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS POST-VENTURE CAPITAL FUND - -------------------------------------------------------------------------------- December 8, 1995 Dear Shareholder: The objective of Warburg Pincus Post-Venture Capital Fund (the 'Fund') is long-term growth of capital. The Fund pursues its objective by investing primarily in equity securities of companies deemed to be in their post-venture-capital stage. From the Fund's inception on September 29, 1995, through October 31, 1995, it gained 6.90%*. Its total net assets were $3,025,429. We are quite optimistic about the Fund's prospects. A major study assessing the impact of venture-capital financing on firms' performance** concluded that venture-backed companies generate superior results relative to those that lacked such backing. According to the study, venture-backed firms create innovative products and services. Relative to Fortune 500 companies, they create jobs at a faster pace, spend more on research and development, and create sales-especially export sales-at a faster rate. Our own considerable experience researching and evaluating the performance of venture-backed companies yields similarly favorable conclusions. We believe that the Fund's focus on such companies offers a unique and attractive opportunity to aggressive investors. Elizabeth B. Dater Stephen J. Lurito Co-Portfolio Manager Co-Portfolio Manager
* Non-annualized. This figure represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares upon redemption may be worth more or less than original cost. ** Fifth Annual Economic Impact of Venture Capital Study, National Venture Capital Association/Coopers & Lybrand L.L.P. (U.S.A.), 1995. 12 - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------ WARBURG PINCUS CAPITAL APPRECIATION FUND STATEMENT OF NET ASSETS October 31, 1995 - ------------------------------------------------------------------------------
SHARES VALUE --------- --------- COMMON STOCK (95.5%) BASIC INDUSTRIES Aerospace & Defense (2.4%) Loral Corp. 120,000 $ 3,555,000 Sundstrand Corp. 40,000 2,450,000 ----------- 6,005,000 ----------- Agriculture (0.8%) First Mississippi Corp. 100,000 2,050,000 ----------- Chemicals (3.4%) Avery Dennison Corp. 90,000 4,027,500 Hercules, Inc. 80,000 4,270,000 ----------- 8,297,500 ----------- Conglomerates (2.0%) Thermo Electron Corp. + 104,400 4,802,400 ----------- CAPITAL GOODS Capital Equipment (2.0%) American Standard Companies + 116,000 3,103,000 Federal-Mogul Corp. 105,000 1,876,875 ----------- 4,979,875 ----------- Computers (5.1%) Checkfree Corp. + 15,000 316,875 Compaq Computer Corp. + 50,000 2,787,500 Informix Corp. + 42,500 1,237,812 Logic Works, Inc. 5,000 76,250 Parametric Technology Corp. + 70,000 4,681,250 Synopsys, Inc. + 96,200 3,607,500 ----------- 12,707,187 ----------- Distribution (5.3%) Alco Standard Corp. + 60,000 5,310,000 Anixter International Corp. + 160,000 3,060,000 Rykoff-Sexton, Inc. 205,900 4,632,750 ----------- 13,002,750 ----------- Electronics (6.7%) Cabletron Systems, Inc. + 60,000 4,717,500 Linear Technology Corp. 160,200 7,008,750 Pixtech, Inc. + 25,500 251,812 Xilinx, Inc. + 100,200 4,609,200 ----------- 16,587,262 ----------- CONSUMER Business Services (5.7%) Equifax, Inc. 126,900 4,949,100 First Data Corp. 60,000 3,967,500 Manpower, Inc. + 70,000 1,898,750 Olsten Corp. 80,000 3,080,000
See Accompanying Notes to Financial Statements. 13 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ WARBURG PINCUS CAPITAL APPRECIATION FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - ------------------------------------------------------------------------------
SHARES VALUE --------- --------- COMMON STOCK (CONT'D) Union Corp. 10,000 $ 161,250 ----------- 14,056,600 ----------- Consumer Non-Durables (7.8%) Luxottica Group SPA Sponsored ADR 20,000 975,000 Nine West Group, Inc. + 83,500 3,715,750 Reebok International, Ltd. 140,000 4,760,000 Scott Paper Co. 186,600 9,936,450 ----------- 19,387,200 ----------- Food, Beverage & Tobacco (0.8%) Whitman Corp. 100,000 2,125,000 ----------- Healthcare (10.2%) Becton Dickinson & Co. 45,000 2,925,000 Caremark International, Inc. 169,900 3,504,187 Health Management Associates, Inc. Class A + 180,000 3,870,000 Mallinckrodt Group, Inc. 100,000 3,475,000 McKesson Corp. 75,000 3,581,250 Pacificare Health Systems, Inc. Class B + 45,000 3,273,750 St. Jude Medical, Inc. 83,000 4,419,750 ----------- 25,048,937 ----------- Leisure & Entertainment (1.7%) Disney (Walt) Co. 73,500 4,235,438 ----------- Retail (2.0%) CUC International, Inc. + 142,500 4,934,063 ----------- ENERGY AND RELATED Energy (1.6%) Ensco International, Inc. + 100,000 1,687,500 Union Pacific Resources Group 100,000 2,275,000 ----------- 3,962,500 ----------- Oil Services (0.4%) Input/Output, Inc. 28,300 1,057,712 ----------- FINANCE Banks & Savings & Loans (14.7%) California Federal Bank 100,000 1,475,000 Citicorp 140,000 9,082,500 Compass Bancshares, Inc. 109,600 3,397,600 CoreStates Financial Corp. 100,000 3,637,500 Greenpoint Financial Corp. 124,800 3,369,600 Long Island Bancorp, Inc. 50,000 1,143,750 Mercantile Bancorp 75,000 3,300,000 TCF Financial Corp. 22,600 1,327,750 UJB Financial Corp. 100,000 3,187,500 Wells Fargo & Co. 30,000 6,303,750 ----------- 36,224,950 -----------
See Accompanying Notes to Financial Statements. 14 - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------ WARBURG PINCUS CAPITAL APPRECIATION FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - ------------------------------------------------------------------------------
SHARES VALUE --------- --------- COMMON STOCK (CONT'D) Financial Services (7.7%) ALLmerica Financial Corp. 40,900 $ 1,027,612 Federal Home Loan Mortgage Corp. 40,000 2,770,000 Household International, Inc. 55,000 3,093,750 Leucadia National Corp. 80,700 4,448,588 Prudential Reinsurance Holdings 100,200 2,041,575 Transport Holdings Class A 30,550 1,199,088 Travelers Group, Inc. 87,700 4,428,850 ------------ 19,009,463 ------------ MEDIA Communications & Media (7.3%) Evergreen Media Corp. Class A + 49,000 1,335,250 Gannett, Inc. 50,000 2,718,750 Gaylord Entertainment Co., Class A 100,000 2,575,000 Infinity Broadcast Corp. + 91,800 2,983,500 News Corp. Ltd. ADR 35,000 695,625 Telecommunications Inc., Liberty Media Group A 90,000 2,216,250 Viacom, Inc. Class B + 110,000 5,500,000 ------------ 18,024,375 ------------ Publishing (2.1%) Harcourt General Inc. 75,000 2,971,875 Wiley, (John) & Sons, Inc. Class A 73,600 2,189,600 ------------ 5,161,475 ------------ Telecommunications & Equipment (5.8%) Picturetel Corp. + 85,000 5,610,000 Qualcomm Inc. + 70,000 2,695,000 Tel-Save Holdings, Inc. + 25,000 346,875 Tellabs, Inc. + 85,000 2,890,000 Vodafone Group PLC ADR 70,700 2,889,863 ------------ 14,431,738 ------------ TOTAL COMMON STOCK (Cost $193,683,742) 236,091,425 ------------ PREFERRED STOCK (0.3%) Communications & Media News Corp. ADR (Cost $990,500) 50,000 912,500 ------------ PAR --------- SHORT-TERM INVESTMENTS (4.2%) Repurchase agreement with State Street Bank & Trust Co. dated 10/31/95 at 5.83% to be repurchased at $10,355,677 on 11/01/95. (Collateralized by $10,445,000 U.S. Treasury Note at 6.875%, $10,354,000 10,354,000 due 10/31/96, with a market value of $10,575,563.) (Cost $10,354,000) ------------ TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $205,028,242*) 247,357,925 LIABILITIES IN EXCESS OF OTHER ASSETS (52,060) ------------ NET ASSETS (100.0%) (applicable to 14,382,203 Common Shares and 712,812 Advisor Shares) $247,305,865 ------------ ------------ NET ASSET VALUE, offering and redemption price per Common Share ($235,712,242[div]14,382,203) $16.39 ------ ------ NET ASSET VALUE, offering and redemption price per Advisor Share ($11,593,623[div]712,812) $16.26 ------ ------ + Non-income producing security. * Cost for Federal income tax purposes is $205,163,763.
See Accompanying Notes to Financial Statements. 15 - ------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND STATEMENT OF NET ASSETS October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE --------- ------------ COMMON STOCK (93.2%) BASIC INDUSTRIES Environmental Services (0.9%) Sanifill, Inc. + 196,000 $ 6,174,000 ------------ Industrial Mfg. & Processing (0.2%) Stratasys, Inc. + # 107,140 1,499,960 ------------ Real Estate (1.0%) NHP, Inc. + 462,000 6,583,500 ------------ CAPITAL GOODS Capital Equipment (2.1%) Applied Power Inc. Class A 264,800 8,043,300 Roper Industries, Inc. 162,500 5,890,625 ------------ 13,933,925 ------------ Computers (16.1%) Auspex Systems, Inc. + 421,500 5,953,687 Cognex Corp. + 269,000 16,072,750 Continuum, Inc. + 250,500 9,863,437 Davidson & Associates, Inc. + 208,000 7,384,000 Filenet Corp. + 193,400 8,775,525 Hyperion Software Corp. + 120,800 5,949,400 Network General Corp. + 211,000 8,756,500 Platinum Technology, Inc. + 608,000 11,096,000 Shared Medical Systems Corp. 202,000 7,802,250 Synopsys, Inc. + 377,000 14,137,500 System Software Associates, Inc. 308,500 9,524,938 ------------ 105,315,987 ------------ Electronics (9.9%) Burr-Brown Corp. + 194,800 6,331,000 Glenayre Technologies, Inc. + 217,875 13,998,469 Idex Corp. 131,000 4,945,250 Maxim Integrated Products, Inc. + 290,600 21,722,350 Methode Electronics Inc. Class A 277,000 6,371,000 National Instruments Corp. + 330,700 6,200,625 Watkins-Johnson Co. 110,500 5,317,812 ------------ 64,886,506 ------------ Office Equipment & Supplies (3.2%) NuKote Holdings, Inc. Class A + 315,000 6,536,250 Viking Office Products, Inc. + 317,100 14,110,950 ------------ 20,647,200 ------------
See Accompanying Notes to Financial Statements. 16 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE --------- ------------ COMMON STOCK (CONT'D) CONSUMER Business Services (10.7%) American Management Systems, Inc. + 281,700 $ 8,134,088 Catalina Marketing Corp. + 155,000 7,827,500 Checkpoint Systems, Inc. + 252,000 7,276,500 Copart Inc. + 255,000 5,801,250 Fritz Companies, Inc. + 140,000 4,900,000 GMIS, Inc. + 225,000 2,587,500 Norrell Corp. 215,100 6,641,212 On Assignment, Inc. + 185,500 5,008,500 QuickResponse Services, Inc. + 292,200 7,305,000 Solectron Corp. + 355,700 14,316,925 ------------ 69,798,475 ------------ Consumer Durables (1.2%) Superior Industries International, Inc. 288,500 8,114,062 ------------ Consumer Non-Durables (2.5%) Nature's Sunshine Products, Inc. 251,500 6,224,625 Nutramax Products, Inc. + 430,100 3,655,850 Westpoint Stevens, Inc. 301,000 6,358,625 ------------ 16,239,100 ------------ Consumer Services (2.0%) DEVRY, Inc. + 279,400 6,216,650 ITT Educational Services, Inc. + 285,200 6,702,200 ------------ 12,918,850 ------------ Healthcare (5.4%) EMCare Holdings, Inc. + 286,000 6,578,000 Healthcare Compare Corp. 147,200 5,446,400 Healthsource, Inc. 132,800 7,038,400 Incontrol, Inc. + 210,000 3,675,000 Quorum Health Group, Inc. + 275,500 5,906,031 Thermotrex Corp. + 187,500 6,726,562 ------------ 35,370,393 ------------ Lodging & Restaurants (2.3%) Doubletree Corp. + 382,000 8,404,000 Renaissance Hotel Group NV 357,000 6,961,500 ------------ 15,365,500 ------------ Pharmaceuticals (5.1%) Alpharma, Inc. Class A 313,200 7,516,800 Gilead Sciences, Inc. + 482,300 9,404,850 Medeva PLC ADR 522,700 8,951,238 Ostex International, Inc. + 285,000 5,700,000 Somatix Therapy Corp. + 351,440 1,713,271 ------------ 33,286,159 ------------
See Accompanying Notes to Financial Statements. 17 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE --------- ------------ COMMON STOCK (CONT'D) Retail (5.0%) Borders Group, Inc. + 522,000 $ 8,939,250 Micro Warehouse, Inc. + 141,000 6,274,500 Neostar Retail Group, Inc. + 375,600 5,727,900 PETsMART, Inc. + 345,400 11,570,900 ------------ 32,512,550 ------------ ENERGY AND RELATED Energy (2.8%) Barrett Resources Corp. + 296,400 6,891,300 Brown (Tom) Inc. + 413,000 4,594,625 Texas Meridian Resources Corp. + 607,500 6,606,562 ------------ 18,092,487 ------------ Oil Services (4.4%) Input/Output, Inc. + 361,000 13,492,375 Nabors Industries, Inc. + 686,000 5,916,750 Petroleum Geo Services ADR 487,800 9,451,125 ------------ 28,860,250 ------------ FINANCE Banks & Savings & Loans (2.9%) Banco Latinoamericano de Exportaciones, SA 150,300 6,275,025 Cullen Frost Bankers, Inc. 134,000 6,834,000 Great Financial Corp. 285,000 5,842,500 ------------ 18,951,525 ------------ Financial Services (5.0%) Olympic Financial Ltd. + 257,900 4,706,675 Transactions Systems Architects, Inc. Class A + 149,800 3,894,800 T. Rowe Price Associates, Inc. 121,500 6,044,625 United Companies Financial Corp. 388,600 10,977,950 Vesta Insurance Group, Inc. 175,000 7,065,625 ------------ 32,689,675 ------------ MEDIA Communications & Media (3.0%) Central European Media Enterprises Ltd. Class A + 379,000 8,717,000 Harte-Hanks Communications, Inc. 161,900 4,897,475 Infinity Broadcasting Corp. Class A + 178,725 5,808,562 ------------ 19,423,037 ------------ Publishing (1.9%) Scholastic Corp. + 151,200 9,336,600 Wiley (John) & Sons, Inc. Class A 106,600 3,171,350 ------------ 12,507,950 ------------ Telecommunications & Equipment (4.8%) Allen Group, Inc. 240,400 5,889,800 International Cabletel, Inc. + 258,933 6,861,725 Mobile Telecommunications Technologies Corp. + 244,500 6,937,688
See Accompanying Notes to Financial Statements. 18 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE --------- ------------ COMMON STOCK (CONT'D) Paging Network, Inc. + 509,800 $ 11,725,400 ------------ 31,414,613 ------------ Transportation (0.7%) Mark VII Inc. + 274,500 4,906,688 ------------ Miscellaneous (0.1%) Wellington Underwriting PLC ADR + 47,229 749,997 ------------ TOTAL COMMON STOCK (Cost $474,817,659) 610,242,389 ------------ PREFERRED STOCK (0.5%) Pharmaceuticals (0.2%) Somatix Therapy Corp. Series A-1 Convertible + 60,000 1,500,000 ------------ Miscellaneous (0.3%) Opal Concepts Inc. Series B + # 2,000 2,000,000 ------------ TOTAL PREFERRED STOCK (Cost $3,500,000) 3,500,000 ------------ WARRANTS Indutrial Mfg. & Processing Stratasys, Inc. 01/31/96 + # 10,714 0 Stratasys, Inc. 11/03/98 + # 21,428 0 ------------ 0 ------------ Pharmaceuticals Somatix Therapy Corp. 06/28/98 + 210,000 0 ------------ TOTAL WARRANTS 0 ------------
PAR ----------- SHORT-TERM INVESTMENTS (6.3%) Repurchase agreement with State Street Bank & Trust Co., dated 10/31/95 at 5.83% to be repurchased at $41,317,690 on 11/01/95. (Collateralized by $41,670,000 U.S. Treasury Note at 6.875%, due 10/31/96, with a market value of $42,190,875.) (Cost $41,311,000) $41,311,000 41,311,000 ------------ TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $519,628,659*) 655,053,389 LIABILITIES IN EXCESS OF OTHER ASSETS (290,778) ------------ NET ASSETS (100.0%) (applicable to 16,268,485 Common Shares and 5,691,991 Advisor Shares) $654,762,611 ------------ ------------ NET ASSET VALUE, offering and redemption price per Common Share ($487,537,367 [div] 16,268,485) $29.97 ------ ------ NET ASSET VALUE, offering and redemption price per Advisor Share ($167,225,244 [div] 5,691,991) $29.38 ------ ------
+ Non-income producing security. # Restricted security. * Cost For Federal income tax purposes is $519,825,282. See Accompanying Notes to Financial Statements. 19 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- -------------- COMMON STOCK (90.1%) Argentina (3.0%) Banco de Galicia & Buenos Aires SA 365,989 $ 1,729,544 Banco de Galicia & Buenos Aires SA ADR 118,520 2,266,695 Banco Frances del Rio de la Plata SA 510,100 3,712,882 Banco Frances del Rio de la Plata SA ADR 684,800 14,980,000 Capex SA GDR + 499,000 6,050,375 Telefonica de Argentina SA ADR 791,000 16,413,250 YPF SA ADR 1,553,500 26,603,687 -------------- 71,756,433 -------------- Australia (2.9%) BTR Nylex Ltd. 5,305,519 14,423,345 Niugini Mining Ltd. 1,385,000 2,879,270 Pasminco Ltd. 7,766,600 8,575,686 Reinsurance Australia Corp., Ltd. 9,523,400 18,130,173 Woodside Petroleum Ltd. 5,175,800 24,791,227 -------------- 68,799,701 -------------- Austria (3.2%) Boehler-Uddeholm AG + 327,200 23,071,583 Maculan Holding AG Vorzuege 71,360 1,340,837 V.A. Technologie AG 456,374 52,926,291 -------------- 77,338,711 -------------- Brazil (0.4%) Panamerican Beverages, Inc. Class A 366,000 10,019,250 -------------- Denmark (0.9%) International Service System A/S Class B 1,025,110 21,025,972 -------------- Finland (1.8%) Metra Oy Class A 300 13,155 Metra Oy Class B 139,750 6,062,049 Metsa-Serla Class B 658,650 24,533,618 Valmet Corp. Class A 442,200 12,301,286 -------------- 42,910,108 -------------- France (5.9%) Bouygues SA 312,722 33,316,009 Cetelem 66,885 10,688,445 Fives-Lille (Compagnie De) 84,060 6,802,643 Lagardere Groupe 1,501,475 28,085,365 Scor SA 555,419 16,590,881 Total Cie Franc Des Petroles Class B 693,650 42,946,329 Total Petroles SA ADR 47,743 1,474,064 -------------- 139,903,736 --------------
See Accompanying Notes to Financial Statements. 20 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- -------------- COMMON STOCK (CONT'D) Germany (2.5%) Deutsche Bank AG 694,500 $ 31,352,730 SGL Carbon AG + 432,040 28,350,128 -------------- 59,702,858 -------------- Hong Kong (3.2%) Citic Pacific Ltd. 2,127,000 6,644,124 HSBC Holdings PLC 1,976,869 28,766,267 HSBC Holdings PLC (UK) 195,074 2,901,055 Jardine Matheson Holdings Ltd. ADR 4,819,900 29,401,390 Jilin Chemical Industrial Co. Ltd. ADR + 473,800 9,772,124 -------------- 77,484,960 -------------- India (2.1%) Hindalco Industries Ltd. GDR 783,950 25,086,400 Reliance Industries Ltd. GDS 1,292,500 20,188,850 The India Fund, Inc. 655,900 5,493,162 -------------- 50,768,412 -------------- Indonesia (1.6%) P.T. Bank International Indonesia 1,887,500 6,619,155 P.T. Dynaplast Ltd. 1,709,700 1,508,337 P.T. Mulia Industrindo 2,944,000 8,700,838 P.T. Semen Gresik 3,948,500 10,276,202 P.T. Tri Polyta Indonesia ADR + 675,700 10,473,350 -------------- 37,577,882 -------------- Israel (1.5%) Ampal-American Israel Corp. Class A + 1,374,000 7,728,750 ECI Telecommunications Limited Designs 1,453,500 27,616,500 -------------- 35,345,250 -------------- Japan (25.8%) Canon Inc. 2,452,000 41,982,194 Canon Inc. ADR 98,040 8,357,910 Daimaru Inc. 368,000 2,340,280 DDI Corp. 3,675 29,807,015 East Japan Railway Co. 2,884 13,628,529 Fujitsu Ltd. 2,801,000 33,433,324 Hitachi Ltd. 4,096,250 42,080,643 Kao Corp. 500 6,066 Keyence Corp. 75,600 9,319,636 Kirin Beverage Corp. 124,000 1,880,442 Kyocera Corp. 268,000 21,972,801 Murata Mfg. Co., Ltd. 301,310 10,583,142 NEC Corp. 2,084,000 27,525,682 Nikon Corp. 2,670,000 38,139,125 Nippon Communication Systems Corp. 1,436,700 15,180,863
See Accompanying Notes to Financial Statements. 21 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- -------------- COMMON STOCK (CONT'D) Nippon Telegraph & Telephone Corp. 6,339 $ 52,036,716 NTT Data Communications Systems Co. 1,807 45,258,977 Orix Corp. 521,700 18,375,110 Rohm Co. 385,000 23,391,547 Shin-Etsu Chemical Co., Ltd. 751,400 15,364,700 Sony Corp. 566,300 25,486,547 Sony Corp. ADR 113,500 5,192,625 TDK Corp. 892,000 45,991,977 Toho Co., Ltd. 130,240 18,349,046 Tokyo Electron Ltd. 835,000 36,272,380 Tsuchiya Home Co. 297,620 4,222,180 Uny Co., Ltd. 825,500 14,214,656 York-Benimaru Co., Ltd. 505,900 16,036,748 -------------- 616,430,861 -------------- Malaysia (0.3%) Westmont BHD 1,732,000 5,999,449 -------------- Mexico (0.5%) Gruma SA + 4,094,000 12,075,000 -------------- New Zealand (5.9%) Brierley Investments Ltd. 42,195,904 32,842,254 Fletcher Challenge Ltd. 8,846,687 23,399,452 Fletcher Forestry 15,589,223 21,490,742 Lion Nathan Ltd. 13,821,300 31,360,861 Sky City Ltd. 965,885 20,068,579 Wrightson Ltd. 14,548,459 11,707,320 -------------- 140,869,208 -------------- Norway (1.8%) Norsk Hydro AS ADR 1,096,022 43,840,880 -------------- Pakistan (0.4%) Pakistan Telecommunications Corp. + 1,430 139,594 Pakistan Telecommunications Corp. GDR + 93,200 8,900,600 -------------- 9,040,194 -------------- Singapore (1.5%) DBS Land Ltd. 3,866,000 11,440,623 Development Bank of Singapore Ltd. 1,123,250 12,882,584 Development Bank of Singapore Ltd. ADR 79,500 3,657,000 IPC Corp., Ltd. 10,568,000 7,219,908 -------------- 35,200,115 -------------- South Korea (4.8%) Daewoo Electronics Co., Ltd. + 871,120 11,613,415
See Accompanying Notes to Financial Statements. 22 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- -------------- COMMON STOCK (CONT'D) Daewoo Electronics Co., Ltd. New + 3,290 $ 41,926 Hana Bank 455,740 9,911,794 Hanil Bank 1,943,692 25,241,829 Korea Europe Fund Ltd. 1,210 5,596,250 Korea Long Term Credit Bank 251,095 8,123,256 Mando Machinery Corp. + 29,000 1,923,984 Samsung Electronics Co., Ltd. 134,710 30,171,096 Samsung Electronics Co., Ltd. GDR 28,932 1,909,512 Samsung Electronics Co., Ltd. GDR New 248 29,760 Samsung Electronics Co., Ltd. New 6,821 1,532,251 Samsung Electronics Co., Ltd. Second Series 2,470 543,329 Samsung Heavy Industries Co., Ltd. 500,703 15,248,177 -------------- 111,886,579 -------------- Spain (3.5%) Banco de Santander 144,866 6,321,771 Banco de Santander ADR 1,172,200 50,551,125 Repsol SA ADR 928,700 27,512,738 -------------- 84,385,634 -------------- Sweden (2.6%) Asea AB Series B 251,500 24,828,555 Astra AB Series B 1,066,500 38,578,405 -------------- 63,406,960 -------------- Switzerland (2.4%) BBC Brown Boveri AG 39,008 45,247,081 Danzas Holding AG 12,824 11,294,698 -------------- 56,541,779 -------------- Taiwan (3.3%) China Steel Corp. + 12,873,000 10,161,012 Evergreen Marine Corp. Ltd. 4,782,800 7,178,188 Grand Pacific Fund 2,872,000 713,078 Kwang Hua Growth Fund 6,346,000 2,198,818 Taiwan Semiconductor Mfg. Co. + 5,338,000 16,616,342 Ton Yi Industrial Corp. + 9,785,000 12,981,397 Tuntex Distinct Corp. + 15,377,242 9,744,333 Tuntex Distinct Corp. GDS + 654,510 4,090,688 Yang Ming Marine Transport Corp. 13,302,000 14,640,334 -------------- 78,324,190 -------------- Thailand (1.2%) Industrial Finance Corp. of Thailand 7,467,400 24,554,026 Thai Military Bank Ltd. 908,300 3,583,966 -------------- 28,137,992 --------------
See Accompanying Notes to Financial Statements. 23 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- -------------- COMMON STOCK (CONT'D) United Kingdom (7.1%) AAF Industries PLC + 847,750 $ 348,344 British Air Authority PLC 3,426,533 26,643,240 BTR PLC 1,969,931 10,460,617 Cookson Group PLC 3,138,000 14,530,735 Govett & Co., Ltd. 3,005,000 11,540,318 Grand Metropolitan PLC 3,064,000 21,209,474 Grand Metropolitan PLC ADR 123,000 3,382,500 Prudential Corp. PLC 4,063,800 25,432,821 Reckitt & Coleman PLC 2,058,429 21,893,640 Singer & Friedlander Group PLC 9,093,000 15,232,812 Takare PLC 5,657,400 18,328,958 Trio Holdings PLC 7,868,850 1,492,312 -------------- 170,495,771 -------------- Zimbabwe Delta Corp., Ltd. 530,000 835,620 -------------- TOTAL COMMON STOCK (Cost $2,058,122,790) 2,150,103,505 -------------- PREFERRED STOCK (0.7%) Austria (0.1%) Maculan Holdings AG Vorzuege 113,775 2,068,845 -------------- South Korea (0.5%) Mando Machinery Corp. + 110,000 4,021,592 Samsung Electronics Co., Ltd. 48,040 5,962,586 Samsung Electronics Co., Ltd. New 9,507 1,162,237 -------------- 11,146,415 -------------- United Kingdom (0.1%) Singer & Friedlander Group PLC 8.5% Convertible 1,435,737 2,938,405 -------------- TOTAL PREFERRED STOCK (Cost $20,093,486) 16,153,665 -------------- STOCK WARRANTS (0.2%) Australia Niugini Mining Ltd., 12/08/95 + 346,250 184,569 -------------- Hong Kong Jardine Strategic Holdings Ltd., 05/02/98 + 2,115,400 560,581 -------------- Israel Ampal-American Israel Corp. Class A, 01/31/99 + 455,000 184,844 -------------- Japan Bandai Industries, 11/04/97 + 2,936 2,862,600 --------------
See Accompanying Notes to Financial Statements. 24 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- -------------- STOCK WARRANTS (CONT'D) Switzerland Danzas Holding AG, 08/02/96 + 9,050 $ 3,587 -------------- TOTAL STOCK WARRANTS (Cost $5,829,846) 3,796,181 -------------- CONTRACTS ---------- CALL OPTIONS (0.5%) Japan Topix Index, 03/08/96, (Strike price $1,251.24) + 20,426 3,622,143 Topix Index, 03/08/96, (Strike price $1,261.12) + 21,024 3,554,948 Topix Index, 03/08/96, (Strike price $1,349.00) + 9,152 943,480 Topix Index, 05/10/96, (Strike price $1,323.64) + 20,842 2,486,451 Topix Index, 06/14/96, (Strike price $1,275.00) + 11,519 1,910,541 -------------- 12,517,563 -------------- Mexico Mexican Inmex, 03/29/96, (Strike price $56.60) + 249,080 4,982 -------------- Switzerland Danzas Holding AG, 08/22/96, (Strike price 12.50 Sfr) + 1,000 3,963 -------------- TOTAL CALL OPTIONS (Cost $10,439,121) 12,526,508 --------------
PAR = ------------- CONVERTIBLE BONDS/NOTES (2.3%) Argentina (0.3%) Banco de Galicia & Buenos Aires SA 7.00%, 08/01/02 $ 7,648,000 6,156,640 -------------- Australia (0.3%) BTR Nylex Ltd. 9.00%, 11/30/49 (A) 57,300,000 6,518,912 -------------- India (0.2%) Reliance Industries Ltd. 3.50%, 11/03/99 $ 3,850,000 3,936,625 -------------- Japan (1.1%) Matsushita Electric Works Ltd. 2.70%, 05/31/02 (B)2,465,000,000 27,541,630 -------------- New Zealand Brierley Investments Ltd. 9.00%, 06/30/98 (C) 1,314,875 936,675 -------------- Taiwan (0.4%) Yang Ming Marine Transport Corp. 2.00%, 10/06/01 $ 8,429,000 8,997,958 -------------- TOTAL CONVERTIBLE BONDS/NOTES (Cost $53,163,859) 54,088,440 --------------
See Accompanying Notes to Financial Statements. 25 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND STATEMENT OF NET ASSETS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
PAR VALUE ------------- -------------- SHORT-TERM INVESTMENTS (3.2%) Repurchase agreement with State Street Bank & Trust dated 10/31/95 at 5.83% to be repurchased at $77,068,479 on 11/01/95. (Collateralized by $50,000,000 U.S. Treasury Note 6.875%, due 10/31/96 and $27,625,000 U.S. Treasury Note 6.00%, due 8/31/97. Market value of collateral is $78,664,375.)(cost $77,056,000) $ 77,056,000 $ 77,056,000 -------------- TOTAL INVESTMENTS AT VALUE (97.0%) (Cost $2,224,705,102*) 2,313,724,299 OTHER ASSETS IN EXCESS OF LIABILITIES (3.0%) 72,219,548 -------------- NET ASSETS (100.0%) (applicable to 107,177,463 Common Shares and 16,584,820 Advisor Shares) $2,385,943,847 -------------- -------------- NET ASSET VALUE, offering and redemption price per Common Share ($2,068,207,597[div]107,177,463) $19.30 ------ ------ NET ASSET VALUE, offering and redemption price per Advisor Share ($317,736,250[div]16,584,820) $19.16 ------ ------
INVESTMENT ABBREVIATIONS ADR = American Depository Receipt GDR = Global Depository Receipt GDS = Global Depository Share
+ Non-income producing security. * Cost for Federal income tax purposes is $2,225,158,852. = Unless otherwise indicated below, all bonds are denominated in U.S. Dollars (A) Denominated in Australian Dollars. (B) Denominated in Japanese Yen. (C) Denominated in New Zealand Dollars. See Accompanying Notes to Financial Statements. 26 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND SCHEDULE OF INVESTMENTS October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- ------------ COMMON STOCK (91.9%) Agriculture (0.6%) Kaneko Seeds Co. 100,000 $ 1,027,297 ------------ Automobile (0.9%) Aucnet Inc. 30,000 1,584,972 ------------ Automotive Parts-Equipment (0.2%) Harada Industry Co., Ltd. 16,000 328,735 ------------ Broadcasting (0.7%) Horipro Inc. 87,000 1,293,807 ------------ Building Materials (0.6%) Furusato Industries 131,000 1,095,832 ------------ Clinical Examination (0.8%) Kanto Biomedical Laboratory 100,000 1,311,026 ------------ Computers (10.5%) Daiwabo Information System Co. 50,000 1,433,324 I.O. Data Device Inc. 160,000 11,427,453 Melco Inc. 100,000 5,469,132 ------------ 18,329,909 ------------ Construction (2.6%) Kawasho Lease System Corp. 117,200 1,559,456 Onoken Co., Ltd. 44,000 1,003,033 Sacos Corp. 60,000 1,344,291 Yamazaki Construction Co., Ltd. 40,000 563,546 Yokogawa Construction Co., Ltd. 9,000 110,068 ------------ 4,580,394 ------------ Electronics (13.7%) Ado Electronic Industrial Co., Ltd. 108,000 2,430,291 Advantest Corp. 30,000 1,702,377 Apic Yamada Corp. 100,000 4,402,700 Easton Co., Ltd. 90,000 3,786,322 Katsuragawa Electric Co., Ltd. 123,000 2,033,754 New Japan Radio Co., Ltd. + 160,000 2,285,491 Satori Electric Co., Ltd. 40,000 1,858,918 USC Corp. 25,000 802,270 Yaesu Musen Co., Ltd. 58,000 618,530 Yamaichi Electronics Mfg. 135,000 4,094,511 ------------ 24,015,164 ------------ Engineering & Construction (1.6%) Sawako Corp. 100,000 2,788,377 ------------
See Accompanying Notes to Financial Statements. 27 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND SCHEDULE OF INVESTMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- ------------ COMMON STOCK (CONT'D) Foods (1.2%) Warabeya Nichiyo Co., Ltd. 41,000 $ 613,736 Yoshinoya D&C Co., Ltd. 92 1,458,174 ------------ 2,071,910 ------------ Food Processing (2.5%) Ariake Japan Co., Ltd. 50,000 1,687,702 Sato Foods Industries Co. Ltd. 64,000 1,076,998 Taiyo Kagaku Co., Ltd. 130,000 1,577,145 ------------ 4,341,845 ------------ Healthcare (2.1%) Nichii Gakkan Co. 83,000 3,621,759 ------------ Home Appliances (5.3%) Yamada Denki Co., Ltd. 433,000 9,362,391 ------------ Home Furnishings/Housewares (0.9%) Hikari Furniture Co., Ltd. 39,000 476,959 Sekichu Co., Ltd. 105,000 1,119,753 ------------ 1,596,712 ------------ Lodging (0.1%) Royal Hotel 26,000 178,065 ------------ Machinery (Electric) (1.3%) Nissei ASB Machine Co., Ltd. + 113,000 1,470,404 Sato Corp. 42,000 862,929 ------------ 2,333,333 ------------ Manufacturing (18.6%) Disco Corp. 152,000 5,725,467 Fujimi Inc. 100,000 6,868,213 Kadoya Sesame Mills Inc. 72,000 915,762 Maki Manufacturing Co., Ltd. 50,000 860,973 Nakakita Seisakusho Co., Ltd. 60,000 299,384 Nippon Steel Semiconductor Co. + 150 5,870,267 Nitta Industrial Corp. 392,000 6,481,558 Tokyo Electron Ltd. 50,000 2,171,999 Tokyo Seimitsu Co., Ltd. 175,000 3,424,322 ------------ 32,617,945 ------------ Pharmaceuticals (3.8%) Fuji Pharmaceutical Co., Ltd. + 140,000 2,328,539 Sawai Pharmaceutical Co., Ltd. + 50,000 1,707,269 Seikagaku Corp. 100,000 2,573,134 ------------ 6,608,942 ------------
See Accompanying Notes to Financial Statements. 28 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND SCHEDULE OF INVESTMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ---------- ------------ COMMON STOCK (CONT'D) Retail (18.5%) Aoyama Trading Co., Ltd 100,000 $ 2,700,323 Circle K Japan Co., Ltd + 190,000 7,249,780 Fast Retailing Co., Ltd 60,000 2,929,263 Homac Corp. 16,000 286,469 Home Wide Corp. 226,000 2,675,472 Kuroganeya Co., Ltd. 201,000 3,048,136 Laox Co. 80,000 1,737,599 Ryohin Keikaku Co., Ltd. 110,000 7,232,169 Seven-Eleven Japan 40,000 2,669,015 Sundrug Co., Ltd. 50,000 1,917,621 ------------ 32,445,847 ------------ Retail Merchandising (1.2%) Jeans Mate Corp. 15,000 484,297 Kraft Inc. 44,000 774,875 Right On Co., Ltd. 48,000 915,762 ------------ 2,174,934 ------------ Shipbuilding (1.6%) Namura Shipbuilding 250,000 1,394,188 Sanoyas Hishino Meisho Corp. 300,000 1,467,567 ------------ 2,861,755 ------------ Wholesale Distribution (2.6%) Hakuto Co., Ltd. 100,000 2,582,918 Petrolub International Co. 63,000 1,090,989 Toyo Corp. 50,000 552,784 Yonkyu Co., Ltd. 9,000 233,343 ------------ 4,460,034 ------------ TOTAL COMMON STOCK (Cost $161,928,196) 161,030,985 ------------ CORPORATE BONDS (0.3%) PAR ---------- Switzerland Ralse Co., Ltd. 1.00% 08/31/98 (Convertible; callable 2/29/96 @ 102 Sfr) (Cost $416,917) 500,000 418,355 ------------ UNITED STATES TREASURY OBLIGATIONS (4.6%) U.S. Treasury Bill 4.90%, due 11/02/95 (Cost $7,998,911) $8,000,000 7,998,911 ------------ SHORT-TERM INVESTMENTS (3.2%) Repurchase agreement with State Street Bank & Trust Co. dated 10/31/95 at 5.83% to be repurchased at $5,772,935 on 11/1/95 (Collateralized by $5,630,000 U.S. Treasury Note 7.25% due 11/30/96 with a market value of $5,892,116) (Cost $5,772,000) 5,772,000 5,772,000 ------------ TOTAL INVESTMENTS (100.0%) (Cost $176,116,024*) $175,220,251
+ Non-income producing security. * Also cost for Federal income tax purposes. See Accompanying Notes to Financial Statements. 29 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ------- ---------- COMMON STOCK (88.6%) Argentina (6.5%) Banco Frances del Rio de la Plata SA ADR 4,500 $ 98,438 Telefonica de Argentina SA ADR 9,200 190,900 YPF SA ADR 7,800 133,575 ---------- 422,913 ---------- Australia (1.1%) Novus Petroleum Ltd. + 58,700 70,179 ---------- Austria (2.8%) V.A. Technologie AG 1,610 186,714 ---------- Brazil (4.7%) Panamerican Beverages, Inc. Class A 11,200 306,600 ---------- Chile (4.1%) Compania de Telecommunicacion de Chile SA ADR 3,700 266,400 ---------- China (1.7%) Guangzhou Shipyard International 94,000 28,573 Shanghai Haixing Shipping + 802,000 82,988 ---------- 111,561 ---------- Colombia (0.6%) Banco Industrial Colombiano ADR 3,000 40,874 ---------- Hong Kong (12.1%) Citic Pacific Ltd. 87,800 274,261 HSBC Holdings PLC 11,360 165,304 Jardine Matheson Holdings Ltd. ADR 39,672 241,999 Jilin Chemical Industrial Co., Ltd. ADR + 5,500 113,438 ---------- 795,002 ---------- India (4.1%) Hindalco Industries Ltd. GDR 900 28,800 Reliance Industries Ltd. GDS 13,585 212,198 The India Fund, Inc. 3,500 29,313 ---------- 270,311 ---------- Indonesia (10.4%) P.T. Dynaplast Ltd. 30,500 26,908 P.T. Mulia Industrindo 47,500 140,384 P.T. Semen Cibinong 72,500 190,284 P.T. Semen Gresik 79,500 206,903
See Accompanying Notes to Financial Statements. 30 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ------- ---------- COMMON STOCK (CONT'D) P.T. Tri Polyta Indonesia ADR + 7,400 $ 114,700 ---------- 679,179 ---------- Israel (5.6%) Ampal-American Israel Corp. Class A + 4,200 23,625 Clal Electronics Industries Ltd. + 982 112,112 ECI Telecommunications Limited Designs 12,200 231,800 ---------- 367,537 ---------- Japan (2.3%) Circle K Japan Co., Ltd. + 4,000 152,627 ---------- Malaysia (1.0%) Westmont BHD 18,000 62,350 ---------- Mexico (2.3%) Gruma SA + 51,000 150,421 ---------- Portugal (1.8%) Portugal Telecommunications SA + 6,300 119,373 ---------- Singapore (1.5%) IPC Corp., Ltd. 140,000 95,646 ---------- South Korea (13.5%) Daewoo Electronics Co., Ltd. + 20,850 277,963 Daewoo Electronics Co., Ltd. (New) + 6,200 79,009 Daewoo Heavy Industries 5,240 68,145 Hana Bank 3,800 81,851 Hanil Bank 8,900 115,580 Korea Long Term Credit Bank 2,790 89,392 Mando Machinery Corp. + 2,500 170,468 Samsung Electronics Co., Ltd. Second Series 1 248 ---------- 882,656 ---------- Taiwan (9.6%) China Steel Corp. + 28,000 22,101 GP-Taiwan Index Fund + 180,000 139,500 Taiwan Semiconductor Mfg., Co. + 32,000 99,611 Ton Yi Industrial Corp. + 154,000 204,306 Tuntex Distinct Corp. + 20,000 12,674 Tuntex Distinct Corp. GDS + 1,080 6,750 Yang Ming Marine Transport Corp. 129,000 141,979 ---------- 626,921 ----------
See Accompanying Notes to Financial Statements. 31 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND SCHEDULE OF INVESTMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE ------- ---------- COMMON STOCK (CONT'D) Thailand (2.9%) Industrial Finance Corp. of Thailand 57,800 $ 190,056 ---------- TOTAL COMMON STOCK (Cost $5,835,052) 5,797,320 ---------- PREFERRED STOCK (1.5%) South Korea Keyang Electronic Machinery Co. + 4,200 78,500 Samsung Electronics Co., Ltd. + 130 18,192 Samsung Electronics Co., Ltd. New + 25 3,446 ---------- 100,138 ---------- TOTAL PREFERRED STOCK (Cost $78,848) 100,138 ---------- STOCK WARRANTS (0.1%) Hong Kong Jardine Strategic Holdings, 05/02/98 + (Cost $10,610) 21,000 5,565 ----------
CONVERTIBLE BONDS/NOTES (3.9%) PAR -------- Argentina (1.3%) Banco de Galicia & Buenos Aires SA 7.00%, 08/01/02 $101,000 81,305 ---------- Taiwan (2.6%) President Enterprises 0.00%, 07/22/01 140,000 172,550 ---------- TOTAL CONVERTIBLE BONDS/NOTES (Cost $241,828) 253,855 ---------- SHORT-TERM INVESTMENTS (5.9%) Repurchase agreement with State Street Bank & Trust dated 10/31/95 at 5.83% to be repurchased at $389,063 on 11/01/95. (Collateralized by $380,000 U.S. Treasury Note 7.25%, due 11/30/96, with a market value of $397,692.) (Cost $389,000) 389,000 389,000 ---------- TOTAL INVESTMENTS (100.0%) (Cost $6,555,338*) $6,545,878 ---------- ----------
INVESTMENT ABBREVIATIONS ADR = American Depository Receipt GDR = Global Depository Receipt GDS = Global Depository Share
+ Non-income producing security. * Cost for Federal income tax purposes is $6,556,878. See Accompanying Notes to Financial Statements. 32 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS POST-VENTURE CAPITAL FUND SCHEDULE OF INVESTMENTS October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE -------- ---------- COMMON STOCK (81.2%) CAPITAL GOODS Computers (26.7%) Applix, Inc. + 2,400 $ 66,600 Atria Software, Inc. + 400 14,300 Auspex Systems, Inc. + 1,100 15,537 Boca Research, Inc. + 1,100 27,775 Brock Control Systems, Inc. + 5,000 39,375 Cheyenne Software, Inc. + 1,500 31,125 Continuum, Inc. + 800 31,500 FileNet Corp. + 1,300 58,987 Hyperion Software Corp. + 1,300 64,025 Logic Works, Inc. + 3,000 45,750 Macromedia, Inc. + 500 18,500 Manugistics Group, Inc. + 3,400 58,650 McAfee Associates, Inc. + 1,200 69,900 Network General Corp. + 1,300 53,950 Parametric Technology Corp. + 500 33,437 Softkey International, Inc. + 2,200 69,300 Synopsys, Inc. + 800 30,000 System Software Associates, Inc. 2,000 61,750 Verity, Inc. + 2,000 73,500 ---------- 863,961 ---------- Electronics (5.5%) Asyst Technologies, Inc. + 1,300 54,600 Maxim Integrated Products, Inc. + 400 29,900 Watkins Johnson Co. 1,100 52,938 Xilinx, Inc. + 900 41,400 ---------- 178,838 ---------- Office Equipment & Supplies (1.1%) Viking Office Products, Inc. + 800 35,600 ---------- CONSUMER Business Services (4.9%) Norrell Corp. 600 18,525 On Assignment, Inc. + 1,100 29,700 PMT Services, Inc. + 1,200 32,250 QuickResponse Services, Inc. + 1,200 30,000 Solectron Corp. + 1,200 48,300 ---------- 158,775 ---------- Consumer Services (0.5%) DEVRY, Inc. + 700 15,575 ----------
See Accompanying Notes to Financial Statements. 33 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS POST-VENTURE CAPITAL FUND SCHEDULE OF INVESTMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE -------- ---------- COMMON STOCK (CONT'D) Healthcare (16.9%) American Oncology Resources, Inc. + 600 $ 21,000 Arbor Health Care Co. + 2,200 37,400 EMcare Holdings, Inc. + 2,700 62,100 Endosonics Corp. + 2,000 31,750 Enterprise Systems, Inc. + 3,500 81,813 Health Care & Retirement Corp. + 200 5,875 Health Managment System, Inc. + 1,600 51,200 Healthsource, Inc. + 1,300 68,900 Oxford Health Plans, Inc. + 800 62,600 ThermoTrex Corp. + 600 21,525 Total Renal Care Holdings, Inc. + 5,000 101,875 ---------- 546,038 ---------- Leisure & Entertainment (1.1%) Regal Cinemas, Inc. + 900 35,325 ---------- Lodging & Restaurants (0.4%) Doubletree Corp. + 600 13,200 ---------- Pharmaceuticals (4.2%) Cephalon, Inc. + 900 27,000 DepoTech Corp. + 2,000 29,000 Genzyme Corp. + 800 46,600 Genzyme Corp.--Tissue Repair Division + 1,900 33,963 ---------- 136,563 ---------- Retail (4.4%) Borders Group, Inc. + 1,500 25,688 Micro Warehouse, Inc. + 600 26,700 Neostar Retail Group, Inc. + 1,900 28,975 Office Depot, Inc. + 1,100 31,487 PETsMART, Inc. + 900 30,150 ---------- 143,000 ---------- ENERGY AND RELATED Oil Services (0.9%) Input/Output, Inc. + 800 29,900 ---------- FINANCE Financial Services (1.1%) MS Financial Corp. + 1,100 12,375 Mutual Risk Management Ltd. 300 11,063 United Companies Financial Corp. 400 11,300 ---------- 34,738 ----------
See Accompanying Notes to Financial Statements. 34 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS POST-VENTURE CAPITAL FUND SCHEDULE OF INVESTMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
SHARES VALUE -------- ---------- COMMON STOCK (CONT'D) MEDIA Communications & Media (1.1%) America Online, Inc. + 300 $ 24,000 Central European Media Enterprises Ltd. Class A + 500 11,500 ---------- 35,500 ---------- Telecommunications (12.4%) Ascend Communications, Inc. + 200 13,000 Bay Networks, Inc. + 400 26,500 Cascade Communications Corp. + 500 35,625 Cisco Systems, Inc. + 200 15,500 DSP Communications, Inc. + 800 29,000 Gilat Satellite Networks Ltd. + 800 17,800 Paging Network, Inc. + 900 20,700 Pairgain Technologies, Inc. + 1,000 42,750 PictureTel Corp. + 400 26,400 QUALCOMM, Inc. 300 11,550 StrataCom, Inc. + 1,100 67,650 Tellabs, Inc. + 1,200 40,800 US Robotics Corp. + 600 55,500 ---------- 402,775 ---------- TOTAL COMMON STOCK (Cost $2,465,347) 2,629,788 ----------
PAR -------- SHORT-TERM INVESTMENTS (18.8%) Repurchase agreement with State Street Bank and Trust Co. dated 10/31/95 at 5.83% to be repurchased at $610,099 on 11/01/95. (Collateralized by $620,000 U.S. Treasury Note at 6.875%, due 10/31/96, with a market value of $627,750.) (Cost $610,000) $610,000 610,000 ---------- TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $3,075,347*) $3,239,788 ---------- ----------
+ Non-income producing security. * Also cost for Federal income tax purposes. See Accompanying Notes to Financial Statements. 35 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 1995 - -------------------------------------------------------------------------------- ASSETS Investments at value (Cost $176,116,024) $175,220,251 Foreign currency (Cost $22,536,885) 22,505,366 Receivable for Fund shares sold 2,928,760 Receivable for unrealized gain on forward contracts (Note 4) 593,925 Receivable for investment securities sold 536,755 Deferred organizational costs (Note 1) 166,783 Dividends and interest receivable 88,944 Other assets 6,051 ------------ Total assets 202,046,835 ------------ LIABILITIES Payable for investment securities purchased 22,476,211 Payable for Fund shares redeemed 717,610 Accrued expenses 283,532 ------------ Total liabilities 23,477,353 ------------ NET ASSETS applicable to 19,646,455 Common Shares outstanding and 115 Advisor Shares outstanding $178,569,482 ------------ ------------ NET ASSET VALUE, offering and redemption price per Common Share ($178,568,438[div]19,646,455) $9.09 ----- ----- NET ASSET VALUE, offering and redemption price per Advisor Share ($1,044[div]115) $9.08 ----- -----
See Accompanying Notes to Financial Statements. 36 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 1995 - -------------------------------------------------------------------------------- ASSETS Investments at value (Cost $6,555,338) $6,545,878 Receivable for Fund shares sold 207,547 Deferred organizational costs (Note 1) 187,395 Foreign currency (Cost $47,256) 47,209 Dividends and interest receivable 7,974 Other assets 4,047 ---------- Total assets 7,000,050 ---------- LIABILITIES Payable for investment securities purchased 111,286 Accrued expenses 91,932 Other liabilities 15,903 ---------- Total liabilities 219,121 ---------- NET ASSETS applicable to 600,795 Common Shares outstanding and 122 Advisor Shares outstanding $6,780,929 ---------- ---------- NET ASSET VALUE, offering and redemption price per Common Share ($6,779,551[div]600,795) $11.28 ------ ------ NET ASSET VALUE, offering and redemption price per Advisor Share ($1,378[div]122) $11.30 ------ ------
See Accompanying Notes to Financial Statements. 37 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS POST-VENTURE CAPITAL FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 1995 - -------------------------------------------------------------------------------- ASSETS Investments at value (Cost $3,075,347) $ 3,239,788 Receivable for Fund shares sold 125,583 Cash 108,361 Deferred organizational costs (Note 1) 108,338 Receivable for investment securities sold 57,748 Other receivables 6,557 ----------- Total assets 3,646,375 ----------- LIABILITIES Payable for investment securities purchased 484,782 Organizational costs payable 110,270 Accrued expenses 25,894 ----------- Total liabilities 620,946 ----------- NET ASSETS applicable to 282,937 Common Shares outstanding and 119 Advisor Shares outstanding $ 3,025,429 ----------- ----------- NET ASSET VALUE, offering and redemption price per Common Share ($3,024,158[div]282,937) $10.69 ------ ------ NET ASSET VALUE, offering and redemption price per Advisor Share ($1,271[div]119) $10.68 ------ ------
See Accompanying Notes to Financial Statements. 38 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [THIS PAGE INTENTIONALLY LEFT BLANK] 39 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS STATEMENTS OF OPERATIONS For the Year or Period Ended October 31, 1995 - --------------------------------------------------------------------------------
Warburg Pincus Warburg Pincus Warburg Pincus Capital Appreciation Emerging Growth International Equity Fund Fund Fund -------------------- --------------- -------------------- INVESTMENT INCOME: Dividends $ 2,107,232 $ 772,834 $ 40,091,101 Interest 684,526 2,112,707 7,110,116 Foreign taxes withheld (2,423) 0 (5,031,072) ------------- -------------- ------------- Total investment income 2,789,335 2,885,541 42,170,145 ------------- -------------- ------------- EXPENSES: Investment advisory 1,367,729 3,824,061 20,225,631 Administrative services 390,780 849,790 3,408,846 Audit 27,208 27,469 69,286 Custodian/Sub-custodian 63,554 145,277 1,753,400 Directors/Trustees 10,500 10,500 11,500 Distribution/Shareholder servicing 45,989 531,359 1,274,343 Insurance 10,104 14,770 58,340 Legal 90,851 76,677 102,549 Organizational 0 0 0 Printing 27,954 41,914 172,129 Registration 62,918 159,555 428,595 Transfer agent 92,488 149,133 1,538,272 Miscellaneous 35,776 37,625 380,319 ------------- -------------- ------------- 2,225,851 5,868,130 29,423,210 Less: fees waived and expenses reimbursed 0 0 0 ------------- -------------- ------------- Total expenses 2,225,851 5,868,130 29,423,210 ------------- -------------- ------------- Net investment income (loss) 563,484 (2,982,589) 12,746,935 ------------- -------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS: Net realized gain (loss) from security transactions 31,649,453 49,113,782 (34,444,203) Net realized gain (loss) from foreign currency related items 0 0 16,792,905 Net change in unrealized appreciation (depreciation) from investments and foreign currency related items 12,386,702 84,670,426 (4,675,049) ------------- -------------- ------------- Net realized and unrealized gain (loss) from investments and foreign currency related items 44,036,155 133,784,208 (22,326,347) ------------- -------------- ------------- Net increase (decrease) in net assets resulting from operations $ 44,599,639 $ 130,801,619 $ (9,579,412) ------------- -------------- ------------- ------------- -------------- ------------- 40 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Warburg Pincus Warburg Pincus Warburg Pincus Japan OTC Emerging Markets Post-Venture Capital Fund Fund (1) Fund (2) -------------- ---------------- -------------------- $ 221,577 $ 33,788 $ 0 412,522 22,711 2,675 (33,237) (3,250) 0 ------------ ---------- --------- 600,862 53,249 2,675 ------------ ---------- --------- 599,720 29,641 1,756 138,679 5,217 280 25,700 16,000 9,000 60,612 45,701 5,771 11,290 14,625 1,250 119,941 5,926 351 2,761 855 0 96,359 54,987 5,000 42,449 37,432 1,932 2,579 14,765 1,000 115,649 26,664 6,000 100,690 28,656 2,833 10,620 6,070 500 ------------ ---------- --------- 1,327,049 286,539 35,673 (652,386) (262,824) (33,354) ------------ ---------- --------- 674,663 23,715 2,319 ------------ ---------- --------- (73,801) 29,534 356 ------------ ---------- --------- (4,629,196) 102,219 (26,884) 7,895,010 (4,992) 0 (195,368) (9,058) 164,441 ------------ ---------- --------- 3,070,446 88,169 137,557 ------------ ---------- --------- $2,996,645 $117,703 $137,913 ------------ ---------- --------- ------------ ---------- --------- (1) For the period December 30, 1994 (Commencement of Operations) through October 31, 1995. (2) For the period September 29, 1995 (Commencement of Operations) through October 31, 1995.
See Accompanying Notes to Financial Statements. 41 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
Warburg Pincus Warburg Pincus Capital Appreciation Emerging Growth Fund Fund ----------------------------------- ----------------------------------- For the Year Ended October 31, For the Year Ended October 31, 1995 1994 1995 1994 --------------- ---------------- --------------- ---------------- FROM OPERATIONS: Net investment income (loss) $ 563,484 $ 384,246 $ (2,982,589) $ (1,678,646) Net realized gain (loss) from security transactions 31,649,453 11,173,174 49,113,782 (5,721,525) Net realized gain (loss) from foreign currency related items 0 0 0 0 Net change in unrealized appreciation (depreciation) from investments and foreign currency related items 12,386,702 (9,106,613) 84,670,426 10,930,919 --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets resulting from operations 44,599,639 2,450,807 130,801,619 3,530,748 --------------- ---------------- --------------- ---------------- FROM DISTRIBUTIONS: Dividends from net investment income: Common Shares (563,484) (419,337) 0 0 Advisor Shares 0 (27,724) 0 0 Distributions in excess of net investment income: Common Shares 0 0 0 0 Distributions from capital gains: Common Shares (10,419,627) (12,899,141) 0 (10,576,150) Advisor Shares (575,892) (852,608) 0 (1,639,316) --------------- ---------------- --------------- ---------------- Net decrease from distributions (11,559,003) (14,198,810) 0 (12,215,466) --------------- ---------------- --------------- ---------------- FROM CAPITAL SHARE TRANSACTIONS: Proceeds from sale of shares 88,963,455 45,617,531 335,569,078 180,813,270 Reinvested dividends 11,246,752 13,809,167 0 12,758,387 Net asset value of shares redeemed (53,459,471) (49,851,500) (116,280,844) (71,767,717) --------------- ---------------- --------------- ---------------- Net increase in net assets from capital share transactions 46,750,736 9,575,198 219,288,234 121,803,940 --------------- ---------------- --------------- ---------------- Net increase (decrease) in net assets 79,791,372 (2,172,805) 350,089,853 113,119,222 NET ASSETS: Beginning of period 167,514,493 169,687,298 304,672,758 191,553,536 --------------- ---------------- --------------- ---------------- End of period $ 247,305,865 $167,514,493 $ 654,762,611 $304,672,758 --------------- ---------------- --------------- ---------------- --------------- ---------------- --------------- ---------------- 42 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Warburg Pincus Warburg Pincus Warburg Pincus Japan OTC Emerging Markets Post-Venture Warburg Pincus Fund Fund Capital Fund International Equity --------------------------------------- ------------------- ------------------- Fund For the Period For the Period For the Period ----------------------------------- September 30, 1994 December 30, 1994 September 29, 1995 For the (Commencement of (Commencement of (Commencement of For the Year Ended October 31, Year Ended Operations) through Operations) through Operations) through 1995 1994 October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1995 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- $ 12,746,935 $ 1,310,933 $ (73,801) $ 5,115 $ 29,534 $ 356 (34,444,203) 48,091,665 (4,629,196) 0 102,219 (26,884) 16,792,905 (2,772,944) 7,895,010 (294,437) (4,992) 0 (4,675,049) 82,484,415 (195,368) (35,099) (9,058) 164,441 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- (9,579,412) 129,114,069 2,996,645 (324,421) 117,703 137,913 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- (11,671,023) (1,764,380) 0 0 (14,321) 0 (629,473) (218,961) 0 0 (3) 0 0 (223,659) 0 0 0 0 (42,332,078) (1,047,367) 0 0 0 0 (5,756,403) (129,979) 0 0 0 0 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- (60,388,977) (3,384,346) 0 0 (14,324) 0 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- 1,383,361,959 1,430,739,923 200,565,875 20,287,158 7,753,908 2,792,403 54,872,977 2,950,772 0 0 13,802 0 (715,598,203) (249,050,078) (44,871,674) (185,101) (1,191,160) (4,887) --------------- ---------------- ---------------- ------------------- ------------------- ------------------- 722,636,733 1,184,640,617 155,694,201 20,102,057 6,576,550 2,787,516 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- 652,668,344 1,310,370,340 158,690,846 19,777,636 6,679,929 2,925,429 1,733,275,503 422,905,163 19,878,636 101,000 101,000 100,000 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- $2,385,943,847 $1,733,275,503 $178,569,482 $19,878,636 $ 6,780,929 $ 3,025,429 --------------- ---------------- ---------------- ------------------- ------------------- ------------------- --------------- ---------------- ---------------- ------------------- ------------------- -------------------
See Accompanying Notes to Financial Statements. 43 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS CAPITAL APPRECIATION FUND FINANCIAL HIGHLIGHTS (For a Common Share of the Fund Outstanding Throughout Each Year) - --------------------------------------------------------------------------------
For the Year Ended October 31, ------------------------------------------------------ 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ NET ASSET VALUE, BEGINNING OF YEAR $14.29 $15.32 $13.30 $12.16 $ 9.78 ------ ------ ------ ------ ------ Income from Investment Operations: Net Investment Income .04 .04 .05 .04 .15 Net Gain on Securities (both realized and unrealized) 3.08 .17 2.78 1.21 2.41 ------ ------ ------ ------ ------ Total from Investment Operations 3.12 .21 2.83 1.25 2.56 ------ ------ ------ ------ ------ Less Distributions: Dividends from Net Investment Income (.04) (.05) (.05) (.06) (.18) Distributions from Capital Gains (.98) (1.19) (.76) (.05) .00 ------ ------ ------ ------ ------ Total Distributions (1.02) (1.24) (.81) (.11) (.18) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR $16.39 $14.29 $15.32 $13.30 $12.16 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total Return 24.05% 1.65% 22.19% 10.40% 26.39% RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Year (000s) $235,712 $159,346 $159,251 $117,900 $115,191 Ratios to average daily net assets: Operating expenses 1.12% 1.05% 1.01% 1.06% 1.08% Net investment income .31% .26% .30% .41% 1.27% Decrease reflected in above operating expense ratios due to waivers/reimbursements .00% .01% .00% .01% .00% Portfolio Turnover Rate 146.09% 51.87% 48.26% 55.83% 39.50%
See Accompanying Notes to Financial Statements. TAX STATUS OF 1995 DIVIDENDS (Unaudited) Taxable dividends paid by the Fund on per share basis were as follows: Ordinary income $.06 Long-term capital gain .96
Ordinary income dividends qualifying for the dividends received deduction available to corporate shareholders was 100.00%. Because the Fund's fiscal year is not the calendar year, amounts to be used by calendar year taxpayers on their Federal return will be reflected on Form 1099-DIV and will be mailed in January 1996. 44 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING GROWTH FUND FINANCIAL HIGHLIGHTS (For a Common Share of the Fund Outstanding Throughout Each Year) - --------------------------------------------------------------------------------
For the Year Ended October 31, ------------------------------------------------------ 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ NET ASSET VALUE, BEGINNING OF YEAR $22.38 $23.74 $18.28 $16.97 $10.83 ------ ------ ------ ------ ------ Income from Investment Operations: Net Investment Income (Loss) (.05) (.06) (.10) (.03) .05 Net Gain on Securities (both realized and unrealized) 7.64 .06 5.93 1.71 6.16 ------ ------ ------ ------ ------ Total from Investment Operations 7.59 .00 5.83 1.68 6.21 ------ ------ ------ ------ ------ Less Distributions: Dividends from Net Investment Income .00 .00 .00 (.01) (.07) Distributions from Capital Gains .00 (1.36) (.37) (.36) .00 ------ ------ ------ ------ ------ Total Distributions .00 (1.36) (.37) (.37) (.07) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR $29.97 $22.38 $23.74 $18.28 $16.97 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total Return 33.91% .16% 32.28% 9.87% 57.57% RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Year (000s) $487,537 $240,664 $165,525 $99,562 $42,061 Ratios to average daily net assets: Operating expenses 1.26% 1.22% 1.23% 1.24% 1.25% Net investment income (loss) (.58%) (.58%) (.60%) (.25%) .32% Decrease reflected in above operating expense ratios due to waivers/reimbursements .00% .04% .00% .08% .47% Portfolio Turnover Rate 84.82% 60.38% 68.35% 63.35% 97.69%
See Accompanying Notes to Financial Statements. 45 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS INTERNATIONAL EQUITY FUND FINANCIAL HIGHLIGHTS (For a Common Share of the Fund Outstanding Throughout Each Year) - --------------------------------------------------------------------------------
For the Year Ended October 31, ------------------------------------------------------ 1995 1994 1993 1992 1991 ------ ------ ------ ------ ------ NET ASSET VALUE, BEGINNING OF YEAR $20.51 $17.00 $12.22 $13.66 $11.81 ------ ------ ------ ------ ------ Income from Investment Operations: Net Investment Income .12 .09 .09 .15 .19 Net Gain (Loss) on Securities and Foreign Currency Related Items (both realized and unrealized) (.67) 3.51 4.84 (1.28) 2.03 ------ ------ ------ ------ ------ Total from Investment Operations (.55) 3.60 4.93 (1.13) 2.22 ------ ------ ------ ------ ------ Less Distributions: Dividends from Net Investment Income (.13) (.04) (.02) (.16) (.33) Distributions in Excess of Net Investment Income .00 (.01) .00 .00 .00 Distributions from Capital Gains (.53) (.04) (.13) (.15) (.04) ------ ------ ------ ------ ------ Total Distributions (.66) (.09) (.15) (.31) (.37) ------ ------ ------ ------ ------ NET ASSET VALUE, END OF YEAR $19.30 $20.51 $17.00 $12.22 $13.66 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total Return (2.55%) 21.22% 40.68% (8.44%) 19.42% RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Year (000s) $2,068,207 $1,533,872 $378,661 $101,763 $72,553 Ratios to average daily net assets: Operating expenses 1.39% 1.44% 1.48% 1.49% 1.50% Net investment income .69% .19% .38% .88% 1.19% Decrease reflected in above operating expense ratios due to waivers/reimbursements .00% .00% .00% .07% .17% Portfolio Turnover Rate 39.24% 17.02% 22.60% 53.29% 54.95%
See Accompanying Notes to Financial Statements. TAX STATUS OF 1995 DIVIDENDS (Unaudited) Taxable dividends paid by the Fund on per share basis were as follows: Ordinary income $.46 Long-term capital gain .20
Because the Fund's fiscal year is not the calendar year, amounts to be used by calendar year taxpayers on their Federal return will be reflected on Form 1099-DIV and will be mailed in January 1996. 46 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS JAPAN OTC FUND FINANCIAL HIGHLIGHTS (For a Common Share of the Fund Outstanding Throughout Each Period) - --------------------------------------------------------------------------------
For the Period September 30, 1994 (Commencement of For the Year Ended Operations) through October 31, 1995 October 31, 1994 --------------------------- -------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 9.85 $ 10.00 ----------- ---------- Income from Investment Operations: Net Investment Income .00 .00 Net Loss on Securities and Foreign Currency Related Items (both realized and unrealized) (.76) (.15) ----------- ---------- Total from Investment Operations (.76) (.15) ----------- ---------- Less Distributions: Dividends from Net Investment Income .00 .00 Distributions from Capital Gains .00 .00 ----------- ---------- Total Distributions .00 .00 ----------- ---------- NET ASSET VALUE, END OF PERIOD $ 9.09 $ 9.85 ----------- ---------- ----------- ---------- Total Return (7.72%) (15.84%)* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $ 178,568 $ 19,878 Ratios to average daily net assets: Operating expenses 1.41% 1.00%* Net investment income (loss) (.15%) .49%* Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.35% 4.96%* Portfolio Turnover Rate 82.98% .00% * Annualized
See Accompanying Notes to Financial Statements. 47 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EMERGING MARKETS FUND FINANCIAL HIGHLIGHTS (For a Common Share of the Fund Outstanding Throughout the Period) - --------------------------------------------------------------------------------
For the Period December 30, 1994 (Commencement of Operations) through October 31, 1995 --------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 ------- Income from Investment Operations: Net Investment Income .08 Net Gain on Securities and Foreign Currency Related Items (both realized and unrealized) 1.25 ------- Total from Investment Operations 1.33 ------- Less Distributions: Dividends from Net Investment Income (.05) Distributions from Capital Gains .00 ------- Total Distributions (.05) ------- NET ASSET VALUE, END OF PERIOD $ 11.28 ------- ------- Total Return 16.09%* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $ 6,780 Ratios to average daily net assets: Operating expenses 1.00%* Net investment income 1.25%* Decrease reflected in above operating expense ratio due to waivers/reimbursements 11.08%* Portfolio Turnover Rate 69.12%* * Annualized
See Accompanying Notes to Financial Statements. TAX STATUS OF 1995 DIVIDENDS (Unaudited) Taxable dividends paid by the Fund on per share basis were as follows: Ordinary income $.05
Because the Fund's fiscal year is not the calendar year, amounts to be used by calendar year taxpayers on their Federal return will be reflected on Form 1099-DIV and will be mailed in January 1996. 48 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS POST-VENTURE CAPITAL FUND FINANCIAL HIGHLIGHTS (For a Common Share of the Fund Outstanding Throughout the Period) - --------------------------------------------------------------------------------
For the Period September 29, 1995 (Commencement of Operations) through October 31, 1995 --------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 ------- Income from Investment Operations: Net Investment Income .00 Net Gain on Securities (both realized and unrealized) .69 ------- Total from Investment Operations .69 ------- Less Distributions: Dividends from Net Investment Income .00 Distributions from Capital Gains .00 ------- Total Distributions .00 ------- NET ASSET VALUE, END OF PERIOD $ 10.69 ------- ------- Total Return 6.90%+ RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $ 3,024 Ratios to average daily net assets: Operating expenses 1.65%* Net investment income .25%* Decrease reflected in above operating expense ratio due to waivers/reimbursements 23.76%* Portfolio Turnover Rate 16.90%* * Annualized + Non-annualized
See Accompanying Notes to Financial Statements. 49 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS October 31, 1995 - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Warburg Pincus Equity Funds are comprised of Warburg Pincus Capital Appreciation Fund (the 'Capital Appreciation Fund'), Warburg Pincus International Equity Fund (the 'International Equity Fund') and Warburg Pincus Post-Venture Capital Fund (the 'Post-Venture Capital Fund') which are registered under the Investment Company Act of 1940, as amended (the '1940 Act'), as diversified, open-end management investment companies, and Warburg Pincus Emerging Growth Fund (the 'Emerging Growth Fund'), Warburg Pincus Japan OTC Fund (the 'Japan OTC Fund') and Warburg Pincus Emerging Markets Fund (the 'Emerging Markets Fund', together with the Capital Appreciation Fund, the International Equity Fund, the Post-Venture Capital Fund, the Emerging Growth Fund and the Japan OTC Fund, the 'Funds') which are registered under the 1940 Act as non- diversified, open-end management investment companies. Investment objectives for each Fund are as follows: the Capital Appreciation Fund, the International Equity Fund and the Japan OTC Fund seek long-term capital appreciation; the Emerging Growth Fund seeks maximum capital appreciation; the Emerging Markets Fund seeks growth of capital; the Post-Venture Capital Fund seeks long-term growth of capital. Each Fund offers two classes of shares, one class being referred to as Common Shares and one class being referred to as Advisor Shares. Common and Advisor Shares in each Fund represent an equal pro rata interest in such Fund, except that they bear different expenses which reflect the difference in the range of services provided to them. Common Shares for the Japan OTC Fund, the Emerging Markets Fund and the Post-Venture Capital Fund bear expenses paid pursuant to a shareholder servicing and distribution plan adopted by each Fund at an annual rate not to exceed .25% of the average daily net asset value of each Fund's outstanding Common Shares. Advisor Shares for each Fund bear expenses paid pursuant to a distribution plan adopted by each Fund at an annual rate not to exceed .75% of the average daily net asset value of each Fund's outstanding Advisor Shares. The Common and the Advisor Shares are currently bearing expenses of .25% and .50% of average daily net assets, respectively. The net asset value of each Fund is determined daily as of the close of regular trading on the New York Stock Exchange. Each Fund's investments are valued at market value, which is currently determined using the last reported sales price. If no sales are reported, investments are generally valued at the last reported bid price. In the absence of market quotations, investments are generally valued at fair value as determined by or under the direction of the Fund's governing Board. Short-term investments that mature in 60 days or less are valued on the basis of amortized cost, which approximates market value. The books and records of the Funds are maintained in U.S. dollars. Transactions denominated in foreign currencies are recorded at the current prevailing exchange rates. All assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the current exchange rate at the end of the period. Translation gains or losses resulting from changes in the exchange rate during the reporting period and realized gains and losses on the settlement of foreign currency transactions are 50 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- reported in the results of operations for the current period. The Funds do not isolate that portion of gains and losses on investments in equity securities which are due to changes in the foreign exchange rate from that which are due to changes in market prices of equity securities. The Funds isolate that portion of gains and losses on investments in debt securities which are due to changes in the foreign exchange rate from that which are due to changes in market prices of debt securities. Security transactions are accounted for on trade date. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Income, expenses (excluding class-specific expenses, principally distribution, transfer agent and printing) and realized/unrealized gains/losses are allocated proportionately to each class of shares based upon the relative net asset value of outstanding shares. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Dividends from net investment income are declared and paid semiannually for all Funds. Distributions of net realized capital gains, if any, are declared and paid annually. However, to the extent that a net realized capital gain can be reduced by a capital loss carryover, such gain will not be distributed. Income and capital gain distributions are determined in accordance with Federal income tax regulations which may differ from generally accepted accounting principles. Certain amounts in the Financial Highlights have been reclassified to conform with current year presentation. No provision is made for Federal taxes as it is each Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code and make the requisite distributions to its shareholders which will be sufficient to relieve it from Federal income and excise taxes. Costs incurred by the Japan OTC Fund, the Emerging Markets Fund and the Post-Venture Capital Fund in connection with their organization have been deferred and are being amortized over a period of five years from the date each Fund commenced its operations. Each Fund may enter into repurchase agreement transactions. Under the terms of a typical repurchase agreement, a Fund acquires an underlying security subject to an obligation of the seller to repurchase. The value of the underlying security collateral will be maintained at an amount at least equal to the total amount of the purchase obligation, including interest. The collateral is in the Fund's possession. 2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as each Fund's investment adviser. For its investment advisory services, Warburg receives the following fees based on each Fund's average daily net assets: 51 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
FUND ANNUAL RATE - --------------------------------- ---------------------------------- Capital Appreciation .70% of average daily net assets Emerging Growth .90% of average daily net assets International Equity 1.00% of average daily net assets Japan OTC 1.25% of average daily net assets Emerging Markets 1.25% of average daily net assets Post-Venture Capital 1.25% of average daily net assets
For the period or year ended October 31, 1995, investment advisory fees, waivers and reimbursements were as follows:
GROSS NET EXPENSE FUND ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS - ------------------------------------------- ------------ --------- ------------ -------------- Capital Appreciation $ 1,367,729 $ 0 $ 1,367,729 $ 0 Emerging Growth 3,824,061 0 3,824,061 0 International Equity 20,225,631 0 20,225,631 0 Japan OTC 599,720 (599,720) 0 (25,920) Emerging Markets 29,641 (29,641) 0 (230,338) Post-Venture Capital 1,756 (1,756) 0 (31,458)
SPARX Investment & Research, USA, Inc. ('SPARX USA') serves as sub-investment adviser for the Japan OTC Fund. From its investment advisory fee, Warburg pays SPARX USA a fee at an annual rate of .625% of the average daily net assets of the Japan OTC Fund. No compensation is paid by the Japan OTC Fund to SPARX USA for its sub-investment advisory services. Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of Warburg, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC Bank Corp. ('PNC'), serve as each Fund's co-administrators. For its administrative services, CFSI currently receives a fee calculated at an annual rate of .10% of each Fund's average daily net assets. For the period or year ended October 31, 1995, administrative services fees earned by CFSI were as follows:
FUND CO-ADMINISTRATION FEE - ------------------------------------------- ------------------------------ Capital Appreciation $ 195,390 Emerging Growth 424,895 International Equity 2,022,563 Japan OTC 47,978 Emerging Markets 2,372 Post-Venture Capital 140
For its administrative services, PFPC currently receives a fee calculated at an annual rate of .10% of the average daily net assets of the Capital Appreciation Fund, the Emerging Growth Fund and the Post-Venture Capital Fund. For the International Equity Fund, the Japan OTC Fund and the Emerging Markets Fund, PFPC currently receives a fee calculated at an annual rate of .12% on each Fund's first $250 million in average daily net assets, .10% on the next $250 million in average daily net assets, .08% 52 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- on the next $250 million in average daily net assets, and .05% of the average daily net assets over $750 million. For the period or year ended October 31, 1995, administrative service fees earned and waived by PFPC were as follows:
NET FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE - ----------------------------------------- --------------------- -------- ------------------------- Capital Appreciation $ 195,390 $ 0 $ 195,390 Emerging Growth 424,895 0 424,895 International Equity 1,386,283 0 1,386,283 Japan OTC 90,701 (26,746) 63,955 Emerging Markets 2,845 (2,845) 0 Post-Venture Capital 140 (140) 0
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of Warburg, serves as each Fund's distributor. No compensation is paid by the Capital Appreciation Fund, the Emerging Growth Fund or the International Equity Fund to CSI for distribution services. For its shareholder servicing and distribution services, CSI currently receives a fee calculated at an annual rate of .25% of the average daily net assets of the Common Shares for the Japan OTC Fund, the Emerging Markets Fund and the Post-Venture Capital Fund pursuant to a shareholder servicing and distribution plan adopted by each Fund. For the period or year ended October 31, 1995, distribution fees earned by CSI were as follows:
FUND DISTRIBUTION FEE - ------------------------------------------- ------------------------------ Japan OTC $119,941 Emerging Markets 5,926 Post-Venture Capital 351
3. INVESTMENTS IN SECURITIES For the period or year ended October 31, 1995, purchases and sales of investment securities (excluding short-term investments) were as follows:
FUND PURCHASES SALES - ----------------------------------------------------------- -------------- ------------ Capital Appreciation $ 299,741,274 $269,962,070 Emerging Growth 532,722,466 336,581,792 International Equity 1,457,609,458 735,613,078 Japan OTC 189,768,420 36,507,703 Emerging Markets 7,181,659 1,297,140 Post-Venture Capital 2,714,501 222,270
53 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- At October 31, 1995, the net unrealized appreciation from investments for those securities having an excess of value over cost and net unrealized depreciation from investments for those securities having an excess of cost over value (based on cost for Federal income tax purposes) was as follows:
NET UNREALIZED UNREALIZED UNREALIZED APPRECIATION FUND APPRECIATION DEPRECIATION (DEPRECIATION) - ----------------------------------- ------------ ------------- -------------- Capital Appreciation $ 45,397,319 $ (3,203,157) $ 42,194,162 Emerging Growth 144,909,782 (9,681,675) 135,228,107 International Equity 260,125,513 (171,560,066) 88,565,447 Japan OTC 6,205,079 (7,100,852) (895,773) Emerging Markets 341,944 (352,944) (11,000) Post-Venture Capital 233,929 (69,488) 164,441
4. FORWARD FOREIGN CURRENCY CONTRACTS The International Equity Fund, the Japan OTC Fund, the Emerging Markets Fund and the Post-Venture Capital Fund may enter into forward currency contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. The Funds will enter into forward contracts primarily for hedging purposes. The forward currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the contract settlement date. 54 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- At October 31, 1995, the International Equity Fund and the Japan OTC Fund had the following open forward foreign currency contracts:
INTERNATIONAL EQUITY FUND - ----------------------------------------------------------------------------------------------------------- FOREIGN UNREALIZED FORWARD CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN (LOSS) - ------------------- ----------- -------------- ------------ ------------ ---------------- French Francs 11/15/95 260,000,000 $ 52,170,074 $ 53,253,590 $ (1,083,516) French Francs 11/16/95 122,216,250 25,050,833 25,032,515 18,318 German Marks 11/16/95 110,000,000 78,272,317 78,263,963 8,354 German Marks 05/17/96 78,928,380 55,400,000 56,652,584 (1,252,584) Japanese Yen 03/21/96 5,547,240,000 57,000,000 55,475,507 1,524,493 Japanese Yen 03/21/96 4,764,377,500 47,298,496 47,646,443 (347,947) Japanese Yen 03/21/96 4,764,377,500 47,276,203 47,646,443 (370,240) Japanese Yen 03/21/96 1,385,445,000 13,761,286 13,855,226 (93,940) Japanese Yen 05/13/96 8,731,990,000 109,000,000 88,008,212 20,991,788 Japanese Yen 05/16/96 9,247,700,000 110,000,000 93,246,752 16,753,248 Japanese Yen 05/16/96 4,586,012,000 55,400,000 46,241,847 9,158,153 Japanese Yen 09/18/96 4,660,000,000 50,000,000 47,860,895 2,139,105 ------------ ------------ ---------------- $700,629,209 $653,183,977 $ 47,445,232 ------------ ------------ ---------------- ------------ ------------ ---------------- FOREIGN CURRENCY UNREALIZED FORWARD CURRENCY EXPIRATION TO BE CONTRACT CONTRACT FOREIGN EXCHANGE CONTRACT DATE PURCHASED AMOUNT VALUE GAIN (LOSS) - ------------------- ----------- -------------- ------------ ------------ ---------------- German Marks 11/16/95 34,500,000 $ 25,050,828 $ 24,546,425 $ (504,403) ------------ ------------ ---------------- ------------ ------------ ----------------
JAPAN OTC FUND - ----------------------------------------------------------------------------------------------------------- FOREIGN UNREALIZED FORWARD CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN (LOSS) - ------------------- ----------- -------------- ------------ ------------ ---------------- Japanese Yen 11/30/95 12,567,400,000 $124,000,000 $123,536,813 $ 463,187 Japanese Yen 11/30/95 2,027,000,000 20,000,000 19,925,293 74,707 Japanese Yen 11/30/95 1,520,250,000 15,000,000 14,943,969 56,031 ------------ ------------ ---------------- $159,000,000 $158,406,075 $ 593,925 ------------ ------------ ---------------- ------------ ------------ ----------------
55 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- 5. EQUITY SWAP TRANSACTIONS The International Equity Fund (the 'Fund') entered into a Taiwanese equity swap agreement (which represents approximately .005% of the Fund's net assets at October 31, 1995) dated August 11, 1995, where the Fund receives a quarterly payment, representing the total return (defined as market appreciation and dividend income) on a basket of three Taiwanese common stocks ('Common Stocks'). In return, the Fund pays quarterly the Libor rate (London Interbank Offered Rate), plus 1.25% per annum (7.125% on October 31, 1995) on the initial stock purchase amount ('Notional amount') of $12,000,000. The Notional amount is marked to market on each quarterly reset date. In the event that the Common Stocks decline in value, the Fund will be required to pay quarterly, the amount of any depreciation in value from the notional amount. The equity swap agreement will terminate on August 11, 1996. During the term of the equity swap transaction, changes in the value of the Common Stocks as compared to the Notional amount is recognized as unrealized gain or loss. Dividend income for the Common Stocks are recorded on the ex-dividend date. Interest expense is accrued daily. At October 31, 1995, the Fund has recorded an unrealized gain of $502,018 and interest payable of $192,375 on the equity swap transaction. 56 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- 6. CAPITAL SHARE TRANSACTIONS The Capital Appreciation Fund is authorized to issue three billion of full and fractional shares of beneficial interest, $.001 par value per share, of which one billion shares are classified as Series 2 Shares (the Advisor Shares). The Emerging Growth Fund, the International Equity Fund, the Japan OTC Fund, the Emerging Markets Fund and the Post-Venture Capital Fund are each authorized to issue three billion full and fractional shares of capital stock, $.001 par value per share, of which one billion shares of each Fund are designated as Series 2 Shares (the Advisor Shares). Transactions in shares of each Fund were as follows:
CAPITAL APPRECIATION FUND Common Shares Advisor Shares ----------------------------- --------------------------- For the Year Ended October 31, ------------------------------------------------------------- 1995 1994 1995 1994 ------------ ------------ ----------- ----------- Shares sold 6,020,619 2,958,494 201,782 290,193 Shares issued to shareholders on reinvestment of dividends 850,478 920,210 46,554 61,526 Shares redeemed (3,638,974) (3,126,497) (110,027) (460,020) ------------ ------------ ----------- ----------- Net increase (decrease) in shares outstanding 3,232,123 752,207 138,309 (108,301) ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- Proceeds from sale of shares $ 85,992,655 $ 41,570,590 $ 2,970,800 $ 4,046,941 Reinvested dividends 10,670,876 12,945,690 575,876 863,477 Net asset value of shares redeemed (51,907,650) (43,449,501) (1,551,821) (6,401,999) ------------ ------------ ----------- ----------- Net increase (decrease) from capital share transactions $ 44,755,881 $ 11,066,779 $ 1,994,855 $(1,491,581) ------------ ------------ ----------- ----------- ------------ ------------ ----------- ----------- EMERGING GROWTH FUND Common Shares Advisor Shares ----------------------------- ---------------------------- For the Year Ended October 31, -------------------------------------------------------------- 1995 1994 1995 1994 ------------ ------------ ----------- ------------ Shares sold 9,808,362 6,133,751 3,172,686 2,233,737 Shares issued to shareholders on reinvestment of dividends 0 506,720 0 80,473 Shares redeemed (4,294,179) (2,859,413) (383,922) (517,898) ------------ ------------ ----------- ------------ Net increase (decrease) in shares outstanding 5,514,183 3,781,058 2,788,764 1,796,312 ------------ ------------ ----------- ------------ ------------ ------------ ----------- ------------ Proceeds from sale of shares $256,886,928 $132,922,995 $78,682,150 $ 47,890,275 Reinvested dividends 0 11,015,146 0 1,743,241 Net asset value of shares redeemed (106,777,032) (61,126,667) (9,503,812) (10,641,050) ------------ ------------ ----------- ------------ Net increase (decrease) from capital share transactions $150,109,896 $ 82,811,474 $69,178,338 $ 38,992,466 ------------ ------------ ----------- ------------ ------------ ------------ ----------- ------------
57 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- 6. CAPITAL SHARE TRANSACTIONS (CONT'D)
EMERGING MARKETS FUND INTERNATIONAL EQUITY FUND Common Shares Advisor Shares Common Shares Advisor Shares ------------- -------------- -------------------------------- ---------------------------- For the Period For the Year Ended October 31, December 30, 1994 ---------------------------------------------------------------- (Commencement of Operations) 1995 1994 1995 1994 through October 31, 1995 -------------- -------------- ------------ ------------ ------------------------------- Shares sold 68,096,606 64,218,907 7,225,150 7,956,088 694,008 22 Shares issued to shareholders on reinvestment of dividends 2,623,005 147,031 346,377 6,879 1,267 0 Shares redeemed (38,317,625) (11,861,720) (770,753) (795,406) (104,480) 0 -------------- -------------- ------------ ------------ ------------- ----- Net increase (decrease) in shares outstanding 32,401,986 52,504,218 6,800,774 7,167,561 590,795 22 -------------- -------------- ------------ ------------ ------------- ----- -------------- -------------- ------------ ------------ ------------- ----- Proceeds from sale of shares $1,251,776,887 $1,275,306,263 $131,585,072 $155,433,660 $ 7,753,651 $257 Reinvested dividends 48,487,109 2,820,903 6,385,868 129,869 13,802 0 Net asset value of shares redeemed (701,310,424) (233,614,600) (14,287,779) (15,435,478) (1,191,160) 0 -------------- -------------- ------------ ------------ ------------- ----- Net increase (decrease) from capital share transactions $ 598,953,572 $1,044,512,566 $123,683,161 $140,128,051 $ 6,576,293 $257 -------------- -------------- ------------ ------------ ------------- ----- -------------- -------------- ------------ ------------ ------------- -----
7. NET ASSETS Net Assets at October 31, 1995, consisted of the following:
CAPITAL EMERGING APPRECIATION FUND GROWTH FUND ----------------- ------------ Capital contributed, net $ 173,327,827 $479,035,241 Accumulated net investment income (loss) 0 0 Accumulated net realized gain (loss) from security transactions 31,648,355 40,302,640 Net unrealized appreciation (depreciation) from investments and foreign currency related items 42,329,683 135,424,730 ----------------- ------------ Net assets $ 247,305,865 $654,762,611 ----------------- ------------ ----------------- ------------ 58 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- JAPAN OTC FUND Common Shares Advisor Shares ------------------------------------- ------------------------------------- For the Period For the Period POST-VENTURE CAPITAL FUND September 30, September 30, Common Shares Advisor Shares 1994 1994 ------------- -------------- (Commencement (Commencement For the Period For the of Operations) For the of Operations) September 29, 1995 Year Ended through Year Ended through (Commencement of Operations) October 31, 1995 October 31, 1994 October 31, 1995 October 31, 1994 through October 31, 1995 ---------------- ---------------- ---------------- ---------------- -------------------------------- 22,809,795 2,025,697 0 15 273,510 19 0 0 0 0 0 0 (5,180,432) (18,605) 0 0 (473) 0 ---------------- ---------------- -- ----- ------------- ----- 17,629,363 2,007,092 0 15 273,037 19 ---------------- ---------------- -- ----- ------------- ----- ---------------- ---------------- -- ----- ------------- ----- $200,565,875 $ 20,287,008 $0 $150 $ 2,792,203 $200 0 0 0 0 0 0 (44,871,674) (185,101) 0 0 (4,887) 0 ---------------- ---------------- -- ----- ------------- ----- $155,694,201 $ 20,101,907 $0 $150 $ 2,787,316 $200 ---------------- ---------------- -- ----- ------------- ----- ---------------- ---------------- -- ----- ------------- ----- INTERNATIONAL EMERGING POST-VENTURE EQUITY FUND MARKETS FUND JAPAN OTC FUND CAPITAL FUND -------------- ------------ -------------- ------------ $2,271,007,433 $6,677,550 $175,619,527 $2,887,516 19,124,669 10,218 7,821,209 356 (40,671,086) 102,219 (4,640,787) (26,884) 136,482,831 (9,058) (230,467) 164,441 -------------- ------------ -------------- ------------ $2,385,943,847 $6,780,929 $178,569,482 $3,025,429 -------------- ------------ -------------- ------------ -------------- ------------ -------------- ------------
59 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- 8. CAPITAL LOSS CARRYOVER At October 31, 1995, the International Equity Fund, the Japan OTC Fund and the Post-Venture Capital Fund had capital loss carryovers of $40,671,086, $4,629,196 and $26,884, respectively, expiring in 2003 to offset possible future capital gains of each Fund. 9. OTHER FINANCIAL HIGHLIGHTS Each Fund currently offers one other class of shares, Advisor Shares, representing equal prorata interests in each of the respective Warburg Pincus Equity Funds. The financial highlights for an Advisor Share of each Fund are as follows:
Capital Appreciation Fund ---------------------------------------------------------------- Advisor Shares ---------------------------------------------------------------- April 4, 1991 For the Year Ended October 31, (Initial Issuance) ------------------------------------------ through 1995 1994 1993 1992 October 31, 1991 ------ ------ ------ ------ ---------------- NET ASSET VALUE, BEGINNING OF PERIOD $14.22 $15.28 $13.28 $12.16 $12.04 ------ ------ ------ ------ ------- Income from Investment Operations: Net Investment Income (Loss) .00 (.08) .00 (.01) .05 Net Gain on Securities (both realized and unrealized) 3.02 .23 2.76 1.20 .13 ------ ------ ------ ------ ------- Total from Investment Operations 3.02 .15 2.76 1.19 .18 ------ ------ ------ ------ ------- Less Distributions: Dividends from Net Investment Income .00 (.02) .00 (.02) (.06) Distributions from Capital Gains (.98) (1.19) (.76) (.05) .00 ------ ------ ------ ------ ------- Total Distributions (.98) (1.21) (.76) (.07) (.06) ------ ------ ------ ------ ------- NET ASSET VALUE, END OF PERIOD $16.26 $14.22 $15.28 $13.28 $12.16 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------- Total Return 23.41% 1.23% 21.64% 9.83% 2.66%* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $11,594 $8,169 $10,437 $1,655 $443 Ratios to average daily net assets: Operating expenses 1.62% 1.55% 1.51% 1.56% 1.63%* Net investment income (loss) (.18%) (.24%) (.25%) (.11%) .25%* Decrease reflected in above operating expense ratios due to waivers/reimbursements .00% .01% .00% .01% .01%* Portfolio Turnover Rate 146.09% 51.87% 48.26% 55.83% 39.50% * Annualized
60 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - -------------------------------------------------------------------------------- TAX STATUS OF 1995 DIVIDENDS (Unaudited) Taxable dividends paid by the Fund on per share basis were as follows: Ordinary income $.02 Long-term capital gain .96
Ordinary income dividends qualifying for the dividends received deduction available to corporate shareholders was 100.00%. Because the Fund's fiscal year is not the calendar year, amounts to be used by calendar year taxpayers on their Federal return will be reflected on Form 1099-DIV and will be mailed in January 1996. 61 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
Emerging Growth Fund -------------------------------------------------------- Advisor Shares -------------------------------------------------------- April 4, 1991 For the Year Ended October 31, (Initial Issuance) ------------------------------------ through 1995 1994 1993 1992 October 31, 1991 ------ ------ ------ ------ ---------------- NET ASSET VALUE, BEGINNING OF PERIOD $22.05 $23.51 $18.19 $16.99 $15.18 ------ ------ ------ ------ ------- Income from Investment Operations: Net Investment Loss (.09) (.08) (.08) (.06) .00 Net Gain (Loss) on Securities (both realized and unrealized) 7.42 (.02) 5.77 1.62 1.82 ------ ------ ------ ------ ------- Total from Investment Operations 7.33 (.10) 5.69 1.56 1.82 ------ ------ ------ ------ ------- Less Distributions: Dividends from Net Investment Income .00 .00 .00 .00 (.01) Distributions from Capital Gains .00 (1.36) (.37) (.36) .00 ------ ------ ------ ------ ------- Total Distributions .00 (1.36) (.37) (.36) (.01) ------ ------ ------ ------ ------- NET ASSET VALUE, END OF PERIOD $29.38 $22.05 $23.51 $18.19 $16.99 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------- Total Return 33.24% (.29%) 31.67% 9.02% 23.43%* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $167,225 $64,009 $26,029 $5,398 $275 Ratios to average daily net assets: Operating expenses 1.76% 1.72% 1.73% 1.74% 1.74%* Net investment loss (1.08%) (1.08%) (1.09%) (.87%) (.49%)* Decrease reflected in above operating expense ratios due to waivers/reimbursements .00% .04% .00% .06% .42%* Portfolio Turnover Rate 84.82% 60.38% 68.35% 63.38% 97.69% * Annualized
62 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
International Equity Fund -------------------------------------------------------- Advisor Shares -------------------------------------------------------- April 4, 1991 For the Year Ended October 31, (Initial Issuance) ------------------------------------ through 1995 1994 1993 1992 October 31, 1991 ------ ------ ------ ------ ---------------- NET ASSET VALUE, BEGINNING OF PERIOD $20.38 $16.91 $12.20 $13.66 $13.14 ------ ------ ------ ------ ------- Income from Investment Operations: Net Investment Income (Loss) .03 .16 (.01) .13 .00 Net Gain (Loss) on Securities and Foreign Currency Related Items (both realized and unrealized) (.67) 3.35 4.86 (1.32) .58 ------ ------ ------ ------ ------- Total from Investment Operations (.64) 3.51 4.85 (1.19) .58 ------ ------ ------ ------ ------- Less Distributions: Dividends from Net Investment Income (.05) .00 (.01) (.12) (.06) Distributions from Capital Gains (.53) (.04) (.13) (.15) .00 ------ ------ ------ ------ ------- Total Distributions (.58) (.04) (.14) (.27) (.06) ------ ------ ------ ------ ------- NET ASSET VALUE, END OF PERIOD $19.16 $20.38 $16.91 $12.20 $13.66 ------ ------ ------ ------ ------- ------ ------ ------ ------ ------- Total Return (3.04%) 20.77% 40.06% (8.86%) 7.85%* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $317,736 $199,404 $44,244 $1,472 $153 Ratios to average daily net assets: Operating expenses 1.89% 1.94% 2.00% 2.00% 2.23%* Net investment income (loss) .20% (.29%) (.36%) .54% .30%* Decrease reflected in above operating expense ratios due to waivers/reimbursements .00% .00% .00% .07% .17%* Portfolio Turnover Rate 39.24% 17.02% 22.60% 53.29% 54.95% * Annualized
TAX STATUS OF 1995 DIVIDENDS (Unaudited) Taxable dividends paid by the Fund on per share basis were as follows: Ordinary income $.38 Long-term capital gain .20
Because the Fund's fiscal year is not the calendar year, amounts to be used by calendar year taxpayers on their Federal return will be reflected on Form 1099-DIV and will be mailed in January 1996. 63 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
Japan OTC Fund ---------------------------------------- Advisor Shares ---------------------------------------- For the Period September 30, 1994 For the (Commencement of Year Ended Operations) through October 31, 1995 October 31, 1994 ---------------- ------------------- NET ASSET VALUE, BEGINNING OF PERIOD $9.85 $10.00 ------ ------- Income from Investment Operations: Net Investment Income (Loss) (.02) .00 Net Loss on Securities and Foreign Currency Related Items (both realized and unrealized) (.75) (.15) ------ ------- Total from Investment Operations (.77) (.15) ------ ------- Less Distributions: Dividends from Net Investment Income .00 .00 Distributions from Capital Gains .00 .00 ------ ------- Total Distributions .00 .00 ------ ------- NET ASSET VALUE, END OF PERIOD $ 9.08 $ 9.85 ------ ------- ------ ------- Total Return (7.82%) (15.84%)* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $1 $1 Ratios to average daily net assets: Operating expenses 1.31% 1.18%* Net investment income (loss) (.19%) .12%* Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.83% 4.74%* Portfolio Turnover Rate 82.98% .00% * Annualized
64 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
Emerging Markets Fund --------------------- Advisor Shares --------------------- December 30, 1994 (Commencement of Operations) through October 31, 1995 --------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 ------- Income from Investment Operations: Net Investment Income .14 Net Gain on Securities and Foreign Currency Related Items (both realized and unrealized) 1.19 ------- Total from Investment Operations 1.33 ------- Less Distributions: Dividends from Net Investment Income (.03) Distributions from Capital Gains .00 ------- Total Distributions (.03) ------- NET ASSET VALUE, END OF PERIOD $ 11.30 ------- ------- Total Return 16.05%* RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $1 Ratios to average daily net assets: Operating expenses 1.22%* Net investment income 1.76%* Decrease reflected in above operating expense ratio due to waivers/reimbursements 16.36%* Portfolio Turnover Rate 69.12%* * Annualized
TAX STATUS OF 1995 DIVIDENDS (Unaudited) Taxable dividends paid by the Fund on per share basis were as follows: Ordinary income $.03
Because the Fund's fiscal year is not the calendar year, amounts to be used by calendar year taxpayers on their Federal return will be reflected on Form 1099-DIV and will be mailed in January 1996. 65 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) October 31, 1995 - --------------------------------------------------------------------------------
Post-Venture Capital Fund ------------------------- Advisor Shares ------------------------- For the Period September 29, 1995 (Commencement of Operations) through October 31, 1995 ------------------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 ------- Income from Investment Operations: Net Investment Income .00 Net Gain on Securities .68 ------- Total from Investment Operations .68 ------- Less Distributions: Dividends from Net Investment Income .00 Distributions from Capital Gains .00 ------- Total Distributions .00 ------- NET ASSET VALUE, END OF PERIOD $ 10.68 ------- ------- Total Return 6.80%+ RATIOS/SUPPLEMENTAL DATA: Net Assets, End of Period (000s) $1 Ratios to average daily net assets: Operating expenses 2.15%* Net investment income .09%* Decrease reflected in above operating expense ratio due to waivers/reimbursements 9.25%* Portfolio Turnover Rate 16.90%* * Annualized + Non annualized
66 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- WARBURG PINCUS EQUITY FUNDS REPORT OF INDEPENDENT ACCOUNTANTS - -------------------------------------------------------------------------------- To the Boards of Directors, Trustees and Shareholders of Warburg Pincus Equity Funds: We have audited the accompanying statements of net assets of the Warburg Pincus Capital Appreciation Fund, Warburg Pincus Emerging Growth Fund and Warburg Pincus International Equity Fund and the accompanying statements of assets and liabilities including the schedules of investments of Warburg Pincus Japan OTC Fund, Warburg Pincus Emerging Markets Fund and Warburg Pincus Post-Venture Capital Fund (all Funds collectively referred to as the 'Warburg Pincus Equity Funds') as of October 31, 1995, and the related statements of operations for the year (or period) then ended, and the statements of changes in net assets for each of the two years (or period) and the financial highlights for each of the three years (or period) in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of the Warburg Pincus Equity Funds for each of the two years in the period ended October 31, 1992, were audited by other auditors, whose report dated December 15, 1992, expressed an unqualified opinion. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 1995, by correspondence with the custodians and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Warburg Pincus Equity Funds as of October 31, 1995, and the results of their operations for the year (or period) then ended, and the changes in their net assets for each of the two years (or period) and the financial highlights for each of the three years (or period) in the period then ended, in conformity with generally accepted accounting principles. Coopers & Lybrand L.L.P. 2400 Eleven Penn Center Philadelphia, PA December 14, 1995 67 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [THIS PAGE INTENTIONALLY LEFT BLANK] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [THIS PAGE INTENTIONALLY LEFT BLANK] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- [THIS PAGE INTENTIONALLY LEFT BLANK] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INVESTMENT ADVISER TRANSFER AGENT Warburg, Pincus Counsellors, Inc. State Street Bank and Trust Company 466 Lexington Avenue 225 Franklin Street New York, New York 10017-3147 Boston, Massachusetts 02110 DISTRIBUTOR Counsellors Securities Inc. 466 Lexington Avenue New York, New York 10017-3147 - -------------------------------------------------------------------------------- WARBURG PINCUS FUNDS P.O. BOX 9030 BOSTON, MASSACHUSETTS 02205-9030 SHAREHOLDER SERVICES 1-800-888-6878 PROSPECTUSES 1-800-257-5614 [LOGO] ANNUAL REPORT OCTOBER 31, 1995 [ ] WARBURG PINCUS CAPITAL APPRECIATION FUND [ ] WARBURG PINCUS EMERGING GROWTH FUND [ ] WARBURG PINCUS INTERNATIONAL EQUITY FUND [ ] WARBURG PINCUS JAPAN OTC FUND [ ] WARBURG PINCUS EMERGING MARKETS FUND [ ] WARBURG PINCUS POST-VENTURE CAPITAL FUND WPEQF-2-1095 STATEMENT OF DIFFERENCES The division sign shall be expressed as [div] -----END PRIVACY-ENHANCED MESSAGE-----