WARBURG PINCUS GROWTH & INCOME FUND INC, 485APOS, 1997-08-26

WARBURG PINCUS GROWTH & INCOME FUND INC
485APOS, 1997-08-26

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As filed with the U.S. Securities and Exchange Commission
on August 26, 1997

Securities Act File No. 333-00527
Investment Company Act File No. 811-07515

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF [x]
1933

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 3 [x]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY [x]
ACT OF 1940

Amendment No. 4 [x]

(Check appropriate box or boxes)

Warburg, Pincus Growth & Income Fund, Inc.

................................................................................
(Exact Name of Registrant as Specified in Charter)

466 Lexington Avenue
New York, New York 10017-3147
................................ ................
(Address of Principal Executive Office) (Zip Code)

Registrant's Telephone Number, including Area Code:
(212) 878-0600

Mr. Eugene P. Grace
Warburg, Pincus Growth & Income Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
.........................................
(Name and Address of Agent for Service)

Copy to:

Rose F. DiMartino, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677

It is proposed that this filing will become effective (check appropriate
box)

______immediately upon filing pursuant to paragraph (b)
on __________, 1997 pursuant to paragraph (b)
____X_ 60 days after filing pursuant to paragraph (a)(1)
____ on ______ pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on _____ pursuant to paragraph (a)(2) of rule 485

If appropriate, check following box:

____ this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

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

DECLARATION PURSUANT TO RULE 24f-2

Registrant has registered an indefinite number or amount of securities
under the Securities Act of 1933, as amended, pursuant to Section (a)(1) of Rule
24f-2 under the Investment Company Act of 1940, as amended (the "1940 Act"), and
to the number or amount presently registered is added an indefinite number or
amount of such securities. The Rule 24f-2 Notice for Registrant's fiscal year
ended August 31, 1996 was filed on October 31, 1996.

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

WARBURG, PINCUS GROWTH & INCOME FUND, INC.

FORM N-1A

CROSS REFERENCE SHEET

Part A Heading for the Common Shares and
Prospectuses the Advisor Shares Item No.
- ---------------------------------------- -----------------------------------

1. Cover Page...................... Cover Page
2. Synopsis........................ The Funds' Expenses
3. Condensed Financial
Information .................... Financial Highlights

4. General Description of
Registrant...................... Cover Page; Investment Objectives
and Policies; Portfolio Investments;
Risk Factors and Special
Considerations; Certain Investment
Strategies; Investment Guidelines;
General Information

5. Management of the Fund.......... Management of the Funds

6. Capital Stock and Other
Securities....................... General Information

7. Purchase of Securities Being
Offered.......................... How to Open an Account; How to
Purchase Shares; Net Asset Value

8. Redemption or Repurchase........ How to Redeem and Exchange Shares

9. Legal Proceedings............... Not applicable

Part B Heading for the Statement of
Item No. Additional Information
- ---------------------------------------- -----------------------------------

10. Cover Page...................... Cover Page

11. Table of Contents............... Contents

12. General Information
and History..................... Management of the Fund; Notes to
Financial Statements; See
Prospectuses--"General Information"

13. Investment Objectives and
Policies......................... Investment Objectives; Investment
Policies

14. Management of the Registrant.... Management of the Fund; See
Prospectuses--"Management of the
Fund"

15. Control Persons and
Principal Holders
of Securities................... Management of the Fund;
Miscellaneous; See
Prospectuses--"General Information"

16. Investment Advisory
and Other Services.............. Management of the Fund; See
Prospectuses--"Management of the
Fund" and "Shareholder Servicing"

17. Brokerage Allocation............ Investment Policies; See
Prospectuses--"Portfolio
Transactions and Turnover Rate"

18. Capital Stock and Other
Securities....................... Management of the Fund--Organization
of the Fund; See
Prospectuses--"General Information"

19. Purchase, Redemption and
Pricing of Securities Being
Offered.......................... Additional Purchase and Redemption
Information; See Prospectuses--"How
to Open an Account," "How to
Purchase Shares," "How to Redeem and
Exchange Shares" and "Net Asset
Value"

20. Tax Status...................... Additional Information Concerning
Taxes; See Prospectuses--"Dividends,
Distributions and Taxes"

21. Underwriters.................... Investment Policies--Portfolio
Transactions; See
Prospectuses--"Management of the
Fund" and "Shareholder Servicing"

22. Calculation of
Performance Data................ Determination of Performance

23. Financial Statements............ Financial Highlights; Financial
Statements

<PAGE>
<PAGE>
PROSPECTUS
October , 1997

WARBURG PINCUS
GROWTH & INCOME FUND

WARBURG PINCUS
BALANCED FUND

[Logo]

<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED AUGUST 26, 1997

PROSPECTUS October , 1997

Warburg Pincus Funds are a family of open-end mutual funds that offer investors
a variety of investment opportunities. Two funds are described in this
Prospectus:

WARBURG PINCUS GROWTH & INCOME FUND seeks long-term growth of capital and income
and a reasonable current return by investing primarily in equity securities.

WARBURG PINCUS BALANCED FUND seeks maximum total return through a combination of
long-term growth of capital and current income consistent with preservation of
capital by investing in a diversified portfolio of equity and debt investments
managed using a multi-manager approach.

NO LOAD CLASS OF COMMON SHARES
_____________________________________________________________________________

Each Fund offers two classes of shares, one of which, the Common Shares, is
offered by this Prospectus (i) directly from the Funds' distributor, Counsellors
Securities Inc., and (ii) through various brokerage firms including Charles
Schwab & Company, Inc. Mutual Fund OneSource'tm' Program; Fidelity Brokerage
Services, Inc. FundsNetworkTM Program; Jack White & Company, Inc.; and
Waterhouse Securities, Inc.

This Prospectus briefly sets forth certain information about the Funds that
investors should know before investing. Investors are advised to read this
Prospectus carefully and retain it for future reference. Additional information
about each Fund, contained in a Statement of Additional Information, has been
filed with the Securities and Exchange Commission (the 'SEC') in a document
entitled 'Statement of Additional Information' and is available for reference,
along with other related materials, on the SEC Internet Web site
(http://www.sec.gov). The Statement of Additional Information is also available
upon request and without charge by calling Warburg Pincus Funds at (800)
927-2874. Information regarding the status of shareholder accounts may also be
obtained by calling Warburg Pincus Funds at the same number. Warburg Pincus
Funds maintain a Web site at www.warburg.com. The Statements of Additional
Information relating to the Funds, as amended or supplemented from time to time,
bear the same date as this Prospectus and are incorporated by reference in their
entirety into this Prospectus.

LOW MINIMUM INVESTMENT
_____________________________________________________________________________

The minimum initial investment in each Fund is $1,000 ($500 for an IRA or
Uniform Transfers to Minors Act account) and the minimum subsequent investment
is $100. Through the Automatic Monthly Investment Plan, subsequent investment
minimums may be as low as $50. See 'How to Purchase Shares.'

SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY ANY BANK, AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUNDS INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------

THE FUNDS' EXPENSES
_____________________________________________________________________________

Warburg Pincus Growth & Income Fund and Warburg Pincus Balanced Fund (each a
'Fund' and together, the 'Funds') currently offer two separate classes of
shares: Common Shares and Advisor Shares. For a description of Advisor Shares
see 'General Information.' Common Shares of the Balanced Fund and the Tax Free
Fund pay the Fund's distributor a 12b-1 fee. See 'Management of the
Funds -- Distributor.'

<TABLE>
<CAPTION>
Growth &
Income Balanced
Fund Fund
-------- --------
<S> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).......................... 0 0
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after fee waivers)............................ .75% .39%
12b-1 Fees..................................................... .00% .25%
Other Expenses (after expense reimbursements).................. .46% .71%
-------- ---
Total Fund Operating Expenses (after fee waivers
and expense reimbursements).................................. 1.21% 1.35%`D'
EXAMPLE
You would pay the following expenses
on a $1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period:
1 year......................................................... $ 12 $ 14
3 years........................................................ $ 38 $ 43
5 years........................................................ $ 66 $ 74
10 years....................................................... $ 147 $ 162
</TABLE>

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

`D' Absent the waiver of fees by the Funds' investment adviser and
co-administrator, Management Fees for the Balanced Fund would equal .90%,
Other Expenses would equal .85%, and Total Fund Operating Expenses would
equal 2.00%.

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

The expense table shows the costs and expenses that an investor will bear
directly or indirectly as a Common Shareholder of each Fund. Certain broker-
dealers and financial institutions also may charge their clients fees in
connection with investments in a Fund's Common Shares, which fees are not
reflected in the table. The Example should not be considered a representation of
past or future expenses; actual Fund expenses may be greater or less than those
shown. Moreover, while the Example assumes a 5% annual return, each Fund's
actual performance will vary and may result in a return greater or less than 5%.
Long-term shareholders of the Balanced Fund may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc. (the 'NASD').

<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
_____________________________________________________________________________
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The tables below set forth certain information concerning the investment
results of shares of the Warburg Pincus Growth & Income and Balanced Funds
(formerly investment portfolios of The RBB Fund, Inc. (the 'RBB Fund')) for the
periods indicated. The financial data included in this table for the six months
ended February 28, 1997 is unaudited. The financial data included in this table
for the year ended August 31, 1996 has been audited by Coopers & Lybrand L.L.P.,
independent accountants, whose report dated October 18, 1996 is incorporated by
reference to the Statements of Additional Information. The financial data for
each of the years ended August 31, 1992 through 1995 are a part of the RBB
Fund's financial statements, which have also been audited by Coopers & Lybrand
L.L.P., the RBB Fund's independent accountants. The financial data for the Funds
for the years ended August 31, 1991 and 1990 and the period ended August 31,
1989 is part of previous financial statements also audited by Coopers & Lybrand
L.L.P. Further information about the performance of the Funds is contained in
the Funds' semiannual report dated February 28, 1997 and annual report dated
August 31, 1996, copies of which may be obtained without charge by calling
Warburg Pincus Funds at (800) 927-2874.

WARBURG PINCUS GROWTH & INCOME FUND(d)

<TABLE>
<CAPTION>
For the
Period
October 6,
1988
(Commencement
For the Six of
Months Ended For the Years Ended August 31, Operations)
February 28, 1997 --------------------------------------------------------------------------- to August 31,
(Unaudited) 1996 1995 1994 1993 1992 1991 1990 1989
----------------- ------- ------- ------- ------- ------ ------- ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset
value,
beginning of
period........ $ 14.90 $ 16.40 $ 14.56 $ 16.72 $ 11.99 $12.11 $ 11.00 $11.53 $ 10.00
------- ------- ------- ------- ------- ------ ------- ------ -------
Income from
Investment
Operations:
Net investment
income...... 0.0291 0.1116 0.2224 .0785 .0464 .1912 .3744 .3574 .3876
Net gains
(losses) on
securities
(both
realized and
unrealized)... 1.1116 (0.6633) 1.9834 1.8151 4.8499 .0402 1.6891 (.1856) 1.4225
------- ------- ------- ------- ------- ------ ------- ------ -------
Total from
investment
operations... 1.1407 (0.5517) 2.2058 1.8936 4.8963 .2314 2.0635 .1718 1.8101
------- ------- ------- ------- ------- ------ ------- ------ -------
Less
Distributions:
Dividends
(from net
investment
income)..... (0.0166) (0.1350) (0.1824) (.0785) (.0875) (.1871) (.4043) (.3951) (.2833)
Distributions
(from
capital
gains)...... 0.0000 (0.8133) (0.1834) (3.9751) (.0788) (.1643) (.5492) (.3067) --
------- ------- ------- ------- ------- ------ ------- ------ -------
Total
distributions... (0.0166) (0.9483) (0.3658) (4.0536) (.1663) (.3514) (.9535) (.7018) (.2833)
------- ------- ------- ------- ------- ------ ------- ------ -------
Net asset
value, end of
period........ $ 16.02 $ 14.90 $ 16.40 $ 14.56 $ 16.72 $11.99 $ 12.11 $11.00 $ 11.53
------- ------- ------- ------- ------- ------ ------- ------ -------
------- ------- ------- ------- ------- ------ ------- ------ -------
Total
Returns....... 7.64%(c) (3.54%) 15.62% 14.41% 41.17%(e) 1.99%(e) 19.91%(e) 1.48%(e) 18.48%(c)(e)
Ratios/Supplemental
Data:
Net assets,
end of
period
(000)....... $456,269 $727,627 $1,038,193 $410,658 $60,689 $28,976 $24,726 $1,396 $ 1,150
Ratios of
expenses to
average net
assets...... 1.21%(b) 1.21% 1.22% 1.28%(a) 1.14%(a) 1.25%(a) 1.30%(a) 1.40%(a) 1.40%(a)(b)
Ratios of net
investment
income to
average net
assets...... 0.28%(b) 0.69% 1.64% .41% .30% 1.66% 3.42% 3.32% 4.32%(b)
Portfolio
turnover
rate.......... 131%(c) 94% 109% 150% 344% 175% 41% 98% 111%(c)
Average
commission
rate.......... $ .0585(f) $ .0596(f) N/A N/A N/A N/A N/A N/A N/A
</TABLE>

- --------------------------------------------------------------------------------
(a) Without the waiver of advisory and administration fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Warburg Pincus Growth & Income Fund would have
been 1.28%, 1.14%, 1.28%, 2.17% and 3.81% for the years ended August 31,
1994, 1993, 1992, 1991 and 1990, respectively, and 2.82% annualized for the
period ended August 31, 1989.
(b) Annualized.

(d) Financial Highlights, other than for the six months ended February 28, 1997
and for the year ended August 31, 1996, relate solely to the Common Shares
of the Warburg Pincus Growth & Income Fund investment portfolio of the RBB
Fund. Prior to December 1992, the Warburg Pincus Growth & Income Fund
investment portfolio of the RBB Fund was advised by PNC Institutional
Management Corporation.

(e) Sales load not reflected in total return. The sales load was eliminated
effective July 29, 1993.
(f) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

<PAGE>
<PAGE>
WARBURG PINCUS BALANCED FUND(d)

<TABLE>
<CAPTION>
For the Six
Months Ended For the Years Ended August 31,
February 28, 1997 -------------------------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992 1991 1990
----------------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period......... $ 11.94 $ 11.12 $ 11.01 $ 11.71 $ 12.04 $ 12.05 $ 10.60 $ 11.32
----- ------- ------- ------- ------- ------- ------- -------
Income from
Investment
Operations:
Net investment
income....... 0.1080 0.1573 0.2080 .4132 .5555 .4408 .4213 .4080
Net gains
(losses) on
securities
(both
realized and
unrealized)... 1.0053 0.9389 1.7225 .3248 1.1253 .5155 1.7196 (.2785)
----- ------- ------- ------- ------- ------- ------- -------
Total from
investment
operations... 1.1133 1.0962 1.9305 .7380 1.6808 .9563 2.1409 .1295
----- ------- ------- ------- ------- ------- ------- -------
Less
Distributions:
Dividends (from
net
investment
income)...... (0.1080) (0.1300) (0.3136) (0.4586) (0.5412) (0.3713) (0.4128) (0.4296)
Distributions
(from capital
gains)....... (0.1511) (0.1462) (1.5069) (.9794) (1.4696) (.5950) (.2781) (.4199)
----- ------- ------- ------- ------- ------- ------- -------
Total
distributions... (0.2591) (0.2762) (1.8205) (1.4380) (2.0108) (.9663) (.6909) (.8495)
----- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of
period......... $ 12.79 $ 11.94 $ 11.12 $ 11.01 $ 11.71 $ 12.04 $ 12.05 $ 10.60
----- ------- ------- ------- ------- ------- ------- -------
----- ------- ------- ------- ------- ------- ------- -------
Total Returns... 9.37%(c) 9.99% 21.56% 6.86%(e) 15.27%(e) 8.07%(e) 21.18%(e) 1.09%(e)
Ratios/Supplemental
Data:
Net assets, end
of period
(000)........ $35,530 $30,853 $5,342 $808 $762 $1,026 $1,290 $1,373
Ratios of
expenses to
average net
assets....... 1.35%(a)(b) 1.53%(a) 1.53%(a) 0%(a) 0%(a) .67%(a) 1.40%(a) 1.40%(a)
Ratios of net
investment
income to
average net
assets....... 1.65%(b) 1.66% 2.30% 3.76% 4.13% 3.68% 3.58% 3.80%
Portfolio
turnover
rate........... 76%(c) 108% 107% 32% 30% 93% 76% 95%
Average
commission
rate........... $ .0345(f) $ .0453(f) N/A N/A N/A N/A N/A N/A

<CAPTION>
For the
Period
October 6,
1988
(Commencement
of
Operations)
to August 31,
1989
-------------
<S> <C>
Net asset value,
beginning of
period......... $ 10.00
-----
Income from
Investment
Operations:
Net investment
income....... .4371
Net gains
(losses) on
securities
(both
realized and
unrealized)... 1.2239
-----
Total from
investment
operations... 1.6610
-----
Less
Distributions:
Dividends (from
net
investment
income)...... (0.3419)
Distributions
(from capital
gains)....... --
-----
Total
distributions... (.3419)
-----
Net asset value,
end of
period......... $ 11.32
-----
-----
Total Returns... 17.03%(c)(e)
Ratios/Supplemen
Data:
Net assets, end
of period
(000)........ $1,128
Ratios of
expenses to
average net
assets....... 1.40%(a)(b)
Ratios of net
investment
income to
average net
assets....... 4.90%(b)
Portfolio
turnover
rate........... 35%(c)
Average
commission
rate........... N/A
</TABLE>

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

(a) Without the waiver of advisory and administration fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Warburg Pincus Balanced Fund would have been
2.00% (annualized) for the six months ended February 28, 1997 and 2.43%,
6.04%, 5.46%, 5.37%, 3.88%, 3.89% and 3.76% for the years ended August 31,
1996, 1995, 1994, 1993, 1992, 1991 and 1990, respectively, and 2.83%
(annualized) for the period ended August 31, 1989.

(b) Annualized.

(d) Financial Highlights, other than for the six months ended February 28, 1997
and for the year ended August 31, 1996, relate solely to the Common Shares
of the Warburg Pincus Balanced Fund investment portfolio of the RBB Fund.
Prior to October 1, 1994, the Warburg Pincus Balanced Fund investment
portfolio of the RBB Fund was advised by PNC Institutional Management
Corporation.

(e) Sales load not reflected in total return. The sales load was eliminated
effective August 31, 1994.
(f) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

<PAGE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
_____________________________________________________________________________
Each Fund's investment objective(s) and policies are non-fundamental policies
and may be changed by the Fund's Board of Directors (the 'Board') without first
obtaining the approval of a majority of the outstanding shares of that Fund. Any
changes may result in the Fund having investment objectives different from those
an investor may have considered at the time of investment. Any investment
involves risk and, therefore, there can be no assurance that any Fund will
achieve its investment objective. See 'Portfolio Investments' and 'Certain
Investment Strategies' for descriptions of certain types of investments the
Funds may make.

GROWTH & INCOME FUND

The Growth & Income Fund's investment objectives are to seek long-term growth
of capital and income and a reasonable current return. The Fund is a diversified
management investment company that pursues its objectives by investing primarily
in equity securities. The policy of the Fund is to invest, under normal market
conditions, substantially all of its assets in equity securities that Warburg,
Pincus Counsellors, Inc., the Fund's investment adviser ('Warburg'), considers
to be relatively undervalued. Warburg will determine whether a company is
undervalued based upon research and analysis, taking into account, among other
factors, price/earnings ratio, price/book ratio, price/cash flow ratio, earnings
growth, debt/capital ratio and multiples of earnings of comparable securities.
Other relevant factors, including a company's asset value, franchise value and
quality of management, will also be considered. These factors are not applied to
prospective investments in a mechanical way; rather, Warburg analyzes each
security individually, taking all relevant factors into account. Equity
securities include common stocks, securities which are convertible into common
stocks and readily marketable securities, such as rights and warrants, which
derive their value from common stock.

The Fund may hold securities of any size, but currently expects to focus on
companies with market capitalizations of $1 billion or greater at the time of
initial purchase. The Fund seeks to achieve its income objective by investing in
dividend-paying equity securities. The amount of income generated from the Fund
will fluctuate, and investments in common stock in general are subject to market
risks that may cause their prices to fluctuate over time. Therefore, an
investment in the Fund may be more suitable for long-term investors who can bear
the risk of these fluctuations.

The Fund may invest up to 20% of its total assets in securities of foreign
issuers and may hold from time to time various foreign currencies pending
investment in foreign securities or conversion into U.S. dollars. The Fund may
also purchase without limitation dollar-denominated American Depository Receipts
('ADRs'). ADRs are issued by domestic banks and evidence ownership of underlying
foreign securities.

<PAGE>
<PAGE>
BALANCED FUND

The Balanced Fund's investment objective is to seek to maximize total return
through a combination of long-term growth of capital and current income
consistent with preservation of capital. The Fund is a diversified management
investment company that pursues its objective through a policy of diversified
investment in common stocks, convertible and non-convertible preferred stocks
and debt securities, such as corporate, U.S. government, municipal, bank and
commercial obligations and asset-backed and mortgage-backed securities. At all
times, the Fund will have a minimum of 25% of its assets in equity securities
and a minimum of 25% in fixed income securities. The Fund may invest up to 15%
of its total assets in securities of foreign issuers. Compliance with these
percentage requirements may limit the ability of the Fund to maximize total
return. With respect to convertible senior securities, only that portion of the
value of such securities attributable to their fixed income characteristics will
be used for purposes of determining the percentage of the assets of the Fund
that are invested in fixed income securities. The actual percentage of assets
invested in equity and fixed income securities will vary from time to time,
depending on the judgment of Warburg, as to general market and economic
conditions, trends and yields and interest rates and changes in fiscal and
monetary policies.

The Fund will be managed by a team of senior managers of Warburg. Two
managers are designated overall portfolio strategists and are responsible for
determining the portion of the Fund allocated between equity and fixed income
securities and the allocation among the various equity sectors. See 'Management
of the Funds -- Portfolio Managers' for information about the portfolio
managers.
EQUITY INVESTMENT. Each of the equity portfolio managers will manage an
allocated portion of the equity holdings of the Fund. Each manager will manage
his/her portion with a different investment emphasis or approach, but in each
case consistent with the overall objective of long-term growth of capital for
the Balanced Fund's equity portion.
The four sectors in the equity portion are:
U.S. Value Sector invests primarily in stocks whose acquisition price
represents low absolute or relative value, based on historical and financial
analysis and compared to other stocks and sectors of the Standard & Poor's 500
universe of common stocks and other indexes.
U.S. Small Company Sector invests primarily in common stocks and warrants of
small capitalization and emerging growth U.S. companies that represent
attractive opportunities for maximum capital appreciation. Emerging growth
companies are small- and medium-sized companies that have passed their start-up
phase and that show positive earnings and prospects for achieving significant
profit and gain in a relatively short period of time. Small capitalization
companies may be purchased for their growth potential or because Warburg
believes they are undervalued.

U.S. Large Company Sector invests primarily in a diversified portfolio of
common stocks, warrants and convertible securities of 'large capitalization'
U.S. companies, i.e., companies having stock market capitalizations of $1
billion or greater at the time of initial purchase.

International Equity Sector invests primarily in a broadly diversified
portfolio of equity securities of companies that, wherever organized, have their
principal business activities and interests outside the United States. The
international equity managers intend to invest principally in the securities of
financially strong companies with opportunities for growth within growing
international economies and markets through increased earnings power and
improved utilization or recognition of assets. Investments may be made in equity
securities of companies of any size, whether traded on or off a national
securities exchange.

FIXED INCOME INVESTMENT. The fixed income portion invests primarily in debt
instruments such as corporate, U.S. government, municipal, bank and commercial
obligations and asset-backed and mortgage-backed securities.

PORTFOLIO INVESTMENTS
_____________________________________________________________________________

BOTH FUNDS

DEBT SECURITIES. The Growth & Income and Balanced Funds may each invest in
debt securities and preferred stocks. Debt obligations of corporations in which
the Funds may invest include corporate bonds, debentures, debentures convertible
into common stocks and notes. The interest income to be derived may be
considered as one factor in selecting debt securities for investment by Warburg.
The market value of debt obligations may be expected to vary depending upon,
among other factors, interest rates, the ability of the issuer to repay
principal and interest, any change in investment rating and general economic
conditions.

Up to 10% of a Fund's net assets may be invested in debt securities rated
below investment grade. A security will be deemed to be investment grade if it
is rated within the four highest grades by Moody's Investors Service, Inc.
('Moody's') or Standard & Poor's Ratings Services ('S&P') or, if unrated, is
determined to be of comparable quality by Warburg. Bonds rated in the fourth
highest grade may have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade
bonds. A Fund's holdings of debt securities rated below investment grade
(commonly referred to as 'junk bonds') may be rated as low as C by Moody's or D
by S&P at the time of purchase, or may be unrated securities considered to be of
equivalent quality. Securities that are rated C by Moody's comprise the lowest
rated class and can be regarded as having extremely poor prospects of ever
attaining any real investment standing. Debt rated D by S&P is in default or is
expected to default upon maturity or payment date. In selecting debt securities
for a Fund, Warburg will review and monitor the creditworthiness of each issuer
and issue, in addition to relying on ratings assigned by Moody's or S&P.
Interest rate trends and

specific developments which may affect individual issuers will also be analyzed.
Subsequent to its purchase by a Fund, an issue of securities may cease to be
rated or its rating may be reduced. Neither event will require sale of such
securities, although Warburg will consider such event in its determination of
whether a Fund should continue to hold the securities.

When Warburg believes that a defensive posture is warranted, a Fund may
invest temporarily without limit in investment grade debt obligations and in
domestic and foreign money market obligations, incuding repurchase agreements.

U.S. GOVERNMENT SECURITIES. The obligations issued or guaranteed by the U.S.
government in which a Fund may invest include: direct obligations of the U.S.
Treasury and obligations issued by U.S. government agencies and
instrumentalities. Included among direct obligations of the United States are
Treasury Bills, Treasury Notes and Treasury Bonds, which differ principally in
terms of their maturities. Treasury Bills have maturities of less than one year,
Treasury Notes have maturities of one to 10 years and Treasury Bonds generally
have maturities of greater than 10 years at the date of issuance. Included among
the obligations issued by agencies and instrumentalities of the United States
are: instruments that are supported by the full faith and credit of the United
States (such as certificates issued by the Government National Mortgage
Association); instruments that are supported by the right of the issuer to
borrow from the U.S. Treasury (such as securities of Federal Home Loan Banks);
and instruments that are supported by the credit of the instrumentality (such as
Federal National Mortgage Association and Federal Home Loan Mortgage Corporation
bonds).

MONEY MARKET OBLIGATIONS. Each Fund is authorized to invest, under normal
market conditions, up to 20% of its assets in domestic and foreign short-term
(one year or less remaining to maturity) money market obligations. Money market
instruments consist of obligations issued or guaranteed by the U.S. government
or a foreign government, their agencies or instrumentalities; bank obligations
(including certificates of deposit, time deposits and bankers' acceptances of
domestic or foreign banks, domestic savings and loans and similar institutions)
that are high quality investments; commercial paper rated no lower than A-2 by
S&P or Prime-2 by Moody's or the equivalent from another major rating service
or, if unrated, of an issuer having an outstanding, unsecured debt issue then
rated within the three highest rating categories; and repurchase agreements with
respect to the foregoing.

Repurchase Agreements. Each Fund may invest in repurchase agreement
transactions with member banks of the Federal Reserve System and certain
non-bank dealers. Repurchase agreements are contracts under which the buyer of a
security simultaneously commits to resell the security to the seller
at an agreed-upon price and date. Under the terms of a typical repurchase
agreement, a Fund would acquire any underlying security for a relatively short
period (usually not more than one week) subject to an obligation of the

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seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the underlying
securities will at all times be at least equal to the total amount of the
purchase obligation, including interest. The Fund bears a risk of loss in the
event that the other party to a repurchase agreement defaults on its obligations
or becomes bankrupt and the Fund is delayed or prevented from exercising its
right to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert this right. Warburg, acting under the supervision of each
Fund's Board, monitors the creditworthiness of those bank and non-bank dealers
with which the Fund enters into repurchase agreements to evaluate this risk. A
repurchase agreement is considered to be a loan under the Investment Company Act
of 1940, as amended (the '1940 Act').

Money Market Mutual Funds. Where Warburg believes that it would be beneficial
to a Fund and appropriate considering the factors of return and liquidity, a
Fund may invest up to 5% of its assets in securities of money market mutual
funds that are unaffiliated with the Fund, Warburg or the Fund's
co-administrator, PFPC Inc. ('PFPC'). As a shareholder in any mutual fund, a
Fund will bear its ratable share of the mutual fund's expenses, including
management fees, and will remain subject to payment of the Fund's administration
fees and other expenses with respect to assets so invested.

CONVERTIBLE SECURITIES. Convertible securities in which a Fund may invest,
including both convertible debt and convertible preferred stock, may be
converted at either a stated price or stated rate into underlying shares of
common stock. Because of this feature, convertible securities enable an investor
to benefit from increases in the market price of the underlying common stock.
Convertible securities provide higher yields than the underlying equity
securities, but generally offer lower yields than non-convertible securities of
similar quality. The value of convertible securities fluctuates in relation to
changes in interest rates like bonds and, in addition, fluctuates in relation to
the underlying common stock. Up to 10% of a Fund's net assets may be invested in
convertible securities rated below investment grade at the time of purchase (as
low as C by Moody's or D by S&P) or deemed by Warburg to be of equivalent
quality.

WARRANTS. A Fund may invest up to 15% of its total assets in warrants.
Warrants are securities that give the holder the right, but not the obligation,
to purchase equity issues of the company issuing the warrants, or a related
company, at a fixed price either on a date certain or during a set period.

BALANCED FUND

ASSET-BACKED AND MORTGAGE-BACKED SECURITIES. The Balanced Fund may purchase
asset-backed and mortgage-backed securities.

Asset-backed securities are collateralized by interests in pools of consumer
loans, with interest and principal payments ultimately depending on payments in
respect of the underlying loans by individuals (or a financial institution
providing credit enhancement). Because market experience in these securities is
limited, the market's ability to sustain liquidity through all phases of the
market cycle has not been tested. In addition, there is no assurance that the
security interest in the collateral can be realized. The remaining maturity of
any asset-backed security the Fund invests in will be 397 days or less. The Fund
may purchase asset-backed securities that are unrated.

Mortgage-backed securities are collateralized by mortgages or interests in
mortgages and may be issued by government or non-government entities.
Non-government issued mortgage-backed securities may offer higher yields than
those issued by government entities, but may be subject to greater price
fluctuations. The value of mortgage-backed securities may change due to shifts
in the market's perceptions of issuers, and regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Prepayment, which
occurs when unscheduled or early payments are made on the underlying mortgages,
may shorten the effective maturities of these securities and may lower their
returns.

RISK FACTORS AND SPECIAL CONSIDERATIONS
_____________________________________________________________________________

Investing in securities is subject to the inherent risk of fluctuations in
prices. For certain additional risks relating to each Fund's investments, see
'Portfolio Investments' beginning at page 7 and 'Certain Investment Strategies'
beginning at page 13.

NON-PUBLICLY TRADED SECURITIES; RULE 144A SECURITIES. Each Fund may purchase
securities that are not registered under the Securities Act of 1933, as amended
(the 'Securities Act'), but that can be sold to 'qualified institutional buyers'
in accordance with Rule 144A under the Securities Act ('Rule 144A Securities').
An investment in Rule 144A Securities will be considered illiquid and therefore
subject to each Fund's limitation on the purchase of illiquid securities, unless
the Fund's Board determines on an ongoing basis that an adequate trading market
exists for the security. In addition to an adequate trading market, the Boards
will also consider factors such as trading activity, availability of reliable
price information and other relevant information in determining whether a Rule
144A Security is liquid. This investment practice could have the effect of
increasing the level of illiquidity in the Funds to the extent that qualified
institutional buyers become uninterested for a time in purchasing Rule 144A
Securities. The Board of each Fund will carefully monitor any investments by the
Fund in Rule 144A Securities. The Boards may adopt guidelines and delegate to
Warburg the daily function of determining and monitoring the liquidity of Rule
144A Securities, although each Board will retain ultimate responsibility for
any determination regarding liquidity.

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Non-publicly traded securities (including Rule 144A Securities) may involve a
high degree of business and financial risk and may result in substantial losses.
These securities may be less liquid than publicly traded securities, and a Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be less than
those originally paid by the Fund. Further, companies whose securities are not
publicly traded may not be subject to the disclosure and other investor
protection requirements applicable to companies whose securities are publicly
traded. A Fund's investment in illiquid securities is subject to the risk that
should the Fund desire to sell any of these securities when a ready buyer is not
available at a price that is deemed to be representative of their value, the
value of the Fund's net assets could be adversely affected.

BELOW INVESTMENT GRADE SECURITIES. Medium- and lower-rated debt securities
and comparable unrated securities (commonly referred to as 'junk bonds') (i)
will likely have some quality and protective characteristics that, in the
judgment of the rating organizations, are outweighed by large uncertainties or
major risk exposures to adverse conditions and (ii) are predominately
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. The market values of
certain of these securities also tend to be more sensitive to individual
corporate developments and changes in economic conditions than higher-quality
securities. In addition, medium- and lower-rated securities and comparable
unrated securities generally present a higher degree of credit risk. The risk of
loss due to default by such issuers is significantly greater because medium- and
lower-rated securities and unrated securities generally are unsecured and
frequently are subordinated to the prior payment of senior indebtedness.

The market value of securities in lower ratings categories is more volatile
than that of higher quality securities. In addition, a Fund may have difficulty
disposing of certain of these securities because there may be a thin trading
market. The lack of a liquid secondary market for certain securities may have an
adverse impact on the Funds' ability to dispose of particular issues and may
make it more difficult for a Fund to obtain accurate market quotations for
purposes of valuing the Funds and calculating their respective net asset values.

For a complete description of rating systems of Moody's and S&P, see the
appendix to the Statement of Additional Information for each Fund.

the underlying security and can result in a complete loss of the amount invested
in the warrant. In addition, the price of a warrant tends to be more volatile
than, and may not correlate exactly to, the price of the underlying security. If
the market price of the underlying security is below the exercise price of the
warrant on its expiration date, the warrant will generally expire without value.

BALANCED FUND

EMERGING GROWTH AND SMALL COMPANIES. Investing in securities of emerging
growth and small- and medium-sized companies may involve greater risks, since
these securities may have limited marketability and, thus, may be more volatile
than securities of larger, more established companies or the market in general.
Because small- and medium-sized companies normally have fewer shares outstanding
than larger companies, it may be more difficult for the Fund to buy or sell
significant amounts of such shares without an unfavorable impact on prevailing
prices. Small-sized companies may have limited product lines, markets or
financial resources and may lack management depth. In addition, small- and
medium-sized companies are typically subject to a greater degree of changes in
earnings and business prospects than are larger, more established companies.
There is typically less publicly available information concerning small- and
medium-sized companies than for larger, more established ones. Although
investing in securities of emerging growth companies offers potential for
above-average returns if the companies are successful, the risk exists that the
companies will not succeed and the prices of the companies' shares could
significantly decline in value. Therefore, the Balanced Fund's U.S. Small
Company Sector may involve a greater degree of risk than investment in
better-known, larger companies.

PORTFOLIO TRANSACTIONS AND TURNOVER RATE
_____________________________________________________________________________
A Fund will attempt to purchase securities with the intent of holding them
for investment but may purchase and sell portfolio securities whenever Warburg
believes it to be in the best interests of the relevant Fund. A Fund will not
consider portfolio turnover rate a limiting factor in making investment
decisions consistent with its investment objective and policies. It is not
possible to predict the Funds' portfolio turnover rates. High portfolio turnover
rates (100% or more) may result in dealer markups or underwriting commissions as
well as other transaction costs, including correspondingly higher brokerage
commissions. In addition, short-term gains realized from portfolio turnover may
be taxable to shareholders as ordinary income. See 'Dividends, Distributions and
Taxes -- Taxes' below and 'Investment Policies -- Portfolio Transactions' in
each Fund's Statement of Additional Information.
All orders for transactions in securities or options on behalf of a Fund are
placed by Warburg with broker-dealers that it selects, including Counsellors
Securities Inc., the Funds' distributor ('Counsellors Securities'). A Fund may

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utilize Counsellors Securities in connection with a purchase or sale of
securities when Warburg believes that the charge for the transaction does not
exceed usual and customary levels and when doing so is consistent with
guidelines adopted by the Fund's Board.

CERTAIN INVESTMENT STRATEGIES
_____________________________________________________________________________

Although there is no current intention of doing so during the coming year,
each Fund is authorized to engage in the following investment strategies: (i)
lending portfolio securities and (ii) entering into reverse repurchase
agreements. Detailed information concerning each Fund's strategies and related
risks is contained below and in the Fund's Statement of Additional Information.

STRATEGIES AVAILABLE TO BOTH FUNDS

FOREIGN SECURITIES. The Growth & Income and Balanced Funds may invest up to
20% and 15%, respectively, of their total assets in the securities of foreign
issuers. There are certain risks involved in investing in securities of
companies and governments of foreign nations which are in addition to the usual
risks inherent in U.S. investments. These risks include those resulting from
fluctuations in currency exchange rates, revaluation of currencies, future
adverse political and economic developments and the possible imposition of
currency exchange blockages or other foreign governmental laws or restrictions,
reduced availability of public information concerning issuers, the lack of
uniform accounting, auditing and financial reporting standards and other
regulatory practices and requirements that are often generally less rigorous
than those applied in the United States. Moreover, securities of many foreign
companies may be less liquid and their prices more volatile than those of
securities of comparable U.S. companies. Certain foreign countries are known to
experience long delays between the trade and settlement dates of securities
purchased or sold. In addition, with respect to certain foreign countries, there
is the possibility of expropriation, nationalization, confiscatory taxation and
limitations on the use or removal of funds or other assets of the Funds,
including the withholding of dividends. Foreign securities may be subject to
foreign government taxes that would reduce the net yield on such securities.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments positions. Investment in foreign securities will also result in higher
operating expenses due to the cost of converting foreign currency into U.S.
dollars, the payment of fixed brokerage commissions on foreign exchanges, which
generally are higher than commissions on U.S. exchanges, higher valuation and
communications costs and the expense of maintaining securities with foreign
custodians.

securities issued by a foreign corporation. ADRs, EDRs and IDRs may not
necessarily be denominated in the same currency as the securities whose
ownership they represent. ADRs are typically issued by a U.S. bank or
trust company. EDRs (sometimes referred to as Continental Depositary
Receipts) are issued in Europe, and IDRs (sometimes referred to
as Global Depositary Receipts) are issued outside the United States,
each typically by non-U.S. banks and trust companies.

STRATEGIC AND OTHER TRANSACTIONS. At the discretion of Warburg, a Fund may,
but is not required to, engage in a number of strategies involving options,
futures and forward currency contracts. These strategies, commonly referred to
as 'derivatives,' may be used (i) for the purpose of hedging against a decline
in value of a Fund's current or anticipated portfolio holdings, (ii) as a
substitute for purchasing or selling portfolio securities or (iii) except with
respect to currency exchange transactions, to seek to generate income to offset
expenses or increase return. TRANSACTIONS THAT ARE NOT CONSIDERED HEDGING SHOULD
BE CONSIDERED SPECULATIVE AND MAY SERVE TO INCREASE A FUND'S INVESTMENT RISK.
Transaction costs and any premiums associated with these strategies, and any
losses incurred, will affect a Fund's net asset value and performance.
Therefore, an investment in a Fund may involve a greater risk than an investment
in other mutual funds that do not utilize these strategies. The Funds' use of
these strategies may be limited by position and exercise limits established by
securities and commodities exchanges and other applicable regulatory
authorities.

Securities and Stock Index Options. Each Fund may write covered call options
and put options and purchase put and call options on securities and stock
indexes and will realize fees (referred to as 'premiums') for granting the
rights evidenced by the options. Such options may be traded on an exchange or
may trade over-the-counter ('OTC'). The purchaser of a put option on a security
has the right to compel the purchase by the writer of the underlying security,
while the purchaser of a call option on a security has the right to purchase the
underlying security from the writer. A stock index measures the movement of a
certain group of stocks by assigning relative values to the stocks included in
the index.

The potential loss associated with purchasing an option is limited to the
premium paid, and the premium would partially offset any gains achieved from its
use. However, for an option writer the exposure to adverse price movements in
the underlying security or index is potentially unlimited during the exercise
period. Writing securities options may result in substantial losses to a Fund,
force the sale or purchase of portfolio securities at inopportune times or at
less advantageous prices, limit the amount of appreciation the Fund could
realize on its investments or require the Fund to hold securities it would
otherwise sell.

Futures Contracts and Related Options. Each Fund may enter into foreign
currency, interest rate and stock index futures contracts and purchase and write
(sell) related options that are traded on an exchange designated by the

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Commodity Futures Trading Commission (the 'CFTC') or, if consistent with CFTC
regulations, on foreign exchanges. These futures contracts are standardized
contracts for the future delivery of an interest rate sensitive security or, in
the case of index futures contracts, are settled in cash with reference to a
specified multiplier times the change in the specified interest rate or index.
An option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract.

Aggregate initial margin and premiums required to establish positions other
than those considered by the CFTC to be 'bona fide hedging' will not exceed 5%
of a Fund's net asset value, after taking into account unrealized profits and
unrealized losses on any such contracts. Although the Funds are limited in the
amount of assets that may be invested in futures transactions, there is no
overall limit on the percentage of Fund assets that may be at risk with respect
to futures activities.

Currency Exchange Transactions. A Fund will conduct its currency exchange
transactions either (i) on a spot (i.e., cash) basis at the rate prevailing in
the currency exchange market, (ii) through entering into futures contracts or
options on futures contracts (as described above), (iii) through entering into
foward contracts to purchase or sell currency or (iv) by purchasing exchange-
traded currency options. A forward currency contract involves an obligation to
purchase or sell a specific currency at a future date at a price set at the time
of the contract. An option on a foreign currency operates similarly to an option
on a security. Risks associated with currency forward contracts and purchasing
currency options are similar to those described in this Prospectus for futures
contracts and securities and stock index options. In addition, the use of
currency transactions could result in losses from the imposition of foreign
exchange controls, suspension of settlement or other governmental actions or
unexpected events.

Hedging Considerations. A hedge is designed to offset a loss on a portfolio
position with a gain in the hedge position; at the same time, however, a
properly correlated hedge will result in a gain in the portfolio position being
offset by a loss in the hedge position. As a result, the use of options and
futures contracts and currency exchange transactions for hedging purposes could
limit any potential gain from an increase in value of the position hedged. In
addition, the movement in the portfolio position hedged may not be of the same
magnitude as movement in the hedge. A Fund will engage in hedging transactions
only when deemed advisable by Warburg, and successful use of hedging
transactions will depend on Warburg's ability to correctly predict movements in
the hedge and the hedged position and the correlation between them, which could
prove to be inaccurate. Even a well-conceived hedge may be unsuccessful to some
degree because of unexpected market behavior or trends.

Additional Considerations. To the extent that a Fund engages in the
strategies described above,

the Fund may experience losses greater than if these strategies had not been
utilized. In addition to the risks described above, these instruments may be
illiquid and/or subject to trading limits, and the Fund may be unable to close
out an option or futures position without incurring substantial losses, if at
all. A Fund is also subject to the risk of a default by a counterparty to an
off-exchange transaction.

Asset Coverage. Each Fund will comply with applicable regulatory requirements
designed to eliminate any potential for leverage with respect to options written
by that Fund on securities and indexes; currency, interest rate and stock index
futures contracts and options on these futures contracts; and forward currency
contracts. The use of these strategies may require that the Fund maintain cash
or liquid securities in a segregated account with its custodian or a designated
sub-custodian to the extent the Fund's obligations with respect to these
strategies are not otherwise 'covered' through ownership of the underlying
security or financial instrument or by other portfolio positions or by other
means consistent with applicable regulatory policies. Segregated assets cannot
be sold or transferred unless equivalent assets are substituted in their place
or it is no longer necessary to segregate them. As a result, there is a
possibility that segregation of a large percentage of the Fund's assets could
impede portfolio management or the Fund's ability to meet redemption requests or
other current obligations.

SHORT SALES AGAINST THE BOX. Each Fund may enter into a short sale of
securities such that when the short position is open the Fund owns an equal
amount of the securities sold short or owns preferred stocks or debt securities,
convertible or exchangeable without payment of further consideration, into an
equal number of securities sold short. This kind of short sale, which is
referred to as one 'against the box,' may be entered into by a Fund to, for
example, lock in a sale price for a security the Fund does not wish to sell
immediately. A Fund will deposit, in a segregated account with its custodian or
a qualified subcustodian, the securities sold short or convertible or
exchangeable preferred stocks or debt securities in connection with short sales
against the box. Not more than 10% of a Fund's net assets (taken at current
value) may be held as collateral for short sales against the box at any one
time.

WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS. A Fund may utilize
up to 20% of its total assets to purchase securities on a when-issued or
delayed-delivery basis. In these transactions, payment for and delivery of the
securities occur beyond the regular settlement dates, normally within 30-45 days
after the transaction. The payment obligation and the interest rate that will be
received in when-issued and delayed-delivery transactions are fixed at the time
the buyer enters into the commitment. Due to fluctuations in the value of
securities purchased on a when-issued or delayed-delivery basis, the
yields obtained on such securities may be higher or lower than the yields
available in the market on the dates when the investments are actually delivered
to the buyers. When-issued securities may include securities purchased on a
'when, as and if issued' basis, under which the issuance of the security depends
on the occurrence of a subsequent event, such as

approval of a merger, corporate reorganization or debt restructuring. Each
Fund is required to segregate assets equal to the amount of its when-issued
and delayed-delivery purchase commitments.

STRATEGY AVAILABLE TO THE GROWTH & INCOME FUND

REITS. The Growth & Income Fund may invest up to 15% of its total assets in
real estate investment trusts ('REITs'), which are pooled investment vehicles
that invest primarily in income-producing real estate or real estate related
loans or interests. Like regulated investment companies such as the Fund, REITs
are not taxed on income distributed to shareholders provided they comply with
several requirements of the Internal Revenue Code of 1986, as amended (the
'Code'). By investing in a REIT, the Fund will indirectly bear its proportionate
share of any expenses paid by the REIT in addition to the expenses of the Fund.

Investing in REITs involves certain risks. A REIT may be affected by changes
in the value of the underlying property owned by such REIT or by the quality of
any credit extended by the REIT. REITs are dependent on management skills, are
not diversified (except to the extent the Code requires), and are subject to the
risks of financing projects. REITs are subject to heavy cash flow dependency,
default by borrowers, self-liquidation, the possibilities of failing to qualify
for the exemption for tax for distributed income under the Code and failing to
maintain their exemptions from the 1940 Act. REITs are also subject to interest
rate risks.

STRATEGY AVAILABLE TO THE BALANCED FUND

MUNICIPAL OBLIGATIONS. The Balanced Fund may invest up to 15% of its total
assets in municipal obligations. The Fund may invest in obligations issued by or
on behalf of states, territories and possessions of the United States, the
District of Columbia and their political subdivisions, agencies,
instrumentalities and authorities ('Municipal Obligations'), the interest on
which, in the opinion of bond counsel or counsel to the issuer, as the case may
be, is exempt from regular federal income tax. The two principal types of
Municipal Obligations, in terms of the source of payment of debt service on the
bonds, are general obligation bonds and revenue securities, and the Fund may
hold both in any proportion. General obligation bonds are secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest. Revenue securities are payable only from the revenues
derived from a particular facility or class of facilities or, in some cases,
from the proceeds of a special excise or other specific revenue source but not
from the general taxing power.

To the extent the Fund's assets are concentrated in Municipal Obligations
that are payable from the revenues of economically related projects or
facilities or whose issuers are located in the same state, the Fund will be
subject to the peculiar risks presented by the laws and economic conditions
relating to such states or projects or facilities to a greater extent than it
would be if its assets were not so concentrated.

Private Activity Bonds; Alternative Minimum Tax Bonds. The Fund may invest in
'Alternative Minimum Tax Bonds,' which are certain private activity bonds issued
after August 7, 1986 to finance certain non-governmental activities. While the
income from Alternative Minimum Tax Bonds is exempt from regular federal income
tax, it is a tax preference item for purposes of the federal individual and
corporate 'alternative minimum tax.' The alternative minimum tax is a special
tax that applies to a limited number of taxpayers who have certain adjustments
or tax preference items. Available returns on Alternative Minimum Tax Bonds
acquired by the Fund may be lower than those from other Municipal Obligations
acquired by a Fund due to the possibility of federal, state and local
alternative minimum or minimum income tax liability on Alternative Minimum Tax
Bonds.

Variable Rate Notes. Municipal Obligations purchased by the Fund may include
variable rate demand notes issued by industrial development authorities and
other governmental entities. Variable rate demand notes are tax exempt Municipal
Obligations that provide for a periodic adjustment in the interest rate paid on
the notes. While there may be no active secondary market with respect to a
particular variable rate demand note purchased by the Fund, the Fund may, upon
notice as specified in the note, demand payment of the principal of and accrued
interest on the note at any time or during specified periods not exceeding one
year (depending on the instrument involved) and may resell the note at any time
to a third party. The absence of such an active secondary market, however, could
make it difficult for the Fund to dispose of the variable rate demand note
involved, in the event the issuer of the note defaulted on its payment
obligations and during the periods that the Fund is not entitled to exercise its
demand rights. The Fund could, for this or other reasons, suffer a loss to the
extent of the default plus any expenses involved in an attempt to recover the
investment.

Variable rate demand notes are frequently not rated by credit rating
agencies, but unrated notes purchased by the Fund will have been determined by
Warburg to be of comparable quality at the time of the purchase to rated
instruments purchasable by the Fund. Warburg monitors the continuing
creditworthiness of issuers of such notes to determine whether the Fund should
continue to hold such notes.

Ratings. The Fund may invest in Municipal Obligations which are determined by
Warburg to present minimal credit risks and which at the time of purchase are
considered to be 'high grade' -- e.g., rated 'A' or higher by S&P or Moody's in
the case of bonds; rated 'SP-1' by S&P or 'MIG-2' by Moody's in the case of
notes; rated 'VMIG-2' by Moody's in the case of variable rate demand notes. The
Fund may also purchase securities that are unrated at the time of purchase
provided that the securities are determined to be of comparable quality by
Warburg. The applicable Municipal Obligations ratings are described in the
Appendix to the Fund's Statement of Additional Information.

ZERO COUPON SECURITIES. The Balanced Fund may invest up to 15% of its assets
in 'zero coupon securities.' Zero coupon securities pay no cash income to their
holders until they mature and are issued at substantial discounts from their
value at maturity. When held to maturity, their entire return comes from the
difference between their purchase price and their maturity value. Because
interest on zero coupon securities is not paid on a current basis, the values of
securities of this type are subject to greater fluctuations than are the values
of securities that distribute income regularly and may be more speculative than
such other securities. Accordingly, the values of these securities may be highly
volatile as interest rates rise or fall. Redemption of shares of the Fund that
require it to sell zero coupon securities prior to maturity may result in
capital gains or losses that may be substantial. In addition, a Fund's
investment in zero coupon securities will result in special tax consequences,
which are described under 'Dividends, Distributions and Taxes -- Taxes.'

INVESTMENT GUIDELINES
_____________________________________________________________________________

Each Fund may invest up to 15% of its net assets in securities with
contractual or other restrictions on resale and other instruments that are not
readily marketable ('illiquid securities'), including (i) securities issued as
part of a privately negotiated transaction between an issuer and one or more
purchasers; (ii) repurchase agreements with maturities greater than seven days;
(iii) time deposits maturing in more than seven calendar days; and (iv) certain
Rule 144A Securities. Each Fund may borrow from banks for temporary or emergency
purposes, such as meeting anticipated redemption requests, provided that reverse
repurchase agreements and any other borrowing by the Fund may not exceed 30% of
its total assets at the time of borrowing. Each Fund may also pledge its assets
in connection with borrowings up to 125% of the amount borrowed. Whenever
borrowings (including reverse repurchase agreements) exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional investments
(including roll-overs). Except for the limitations on borrowing, the investment
guidelines set forth in this paragraph may be changed at any time without
shareholder consent by vote of the Board of each Fund, subject to the
limitations contained in the 1940 Act. A complete list of investment
restrictions that each Fund has adopted identifying additional restrictions that
cannot be changed without the approval of the majority of the Fund's outstanding
shares is contained in each Fund's Statement of Additional Information.

MANAGEMENT OF THE FUNDS
_____________________________________________________________________________
INVESTMENT ADVISER. Each Fund employs Warburg as its investment adviser.
Warburg, subject to the control of each Fund's officers and the Board, manages
the investment and reinvestment of the assets of the Funds in accordance with
each Fund's investment objective and stated investment policies. Warburg makes
investment decisions for each Fund and places orders to purchase or sell
securities on behalf of each such Fund. Warburg
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also employs a support staff of management personnel to provide services to the
Funds and furnishes each Fund with office space, furnishings and equipment.

For the services provided by Warburg, the Growth & Income Fund and the
Balanced Fund each pay Warburg a fee calculated at an annual rate of .75% and
.90%, respectively, of the Fund's average daily net assets. Warburg and each
Fund's co-administrators may voluntarily waive a portion of their fees from time
to time and temporarily limit the expenses to be paid by the Fund.

Warburg is a professional investment counselling firm which provides
investment services to investment companies, employee benefit plans, endowment
funds, foundations and other institutions and individuals. As of July 31, 1997,
Warburg managed approximately $20 billion of assets, including approximately
$12.2 billion of investment company assets. Incorporated in 1970, Warburg is
indirectly controlled by Warburg, Pincus & Co., Inc. ('WP&Co.'), which has no
business other than being a holding company of Warburg and its affiliates.
Lionel I. Pincus, the managing partner of WP&Co., may be deemed to control both
WP&Co. and Warburg. Warburg's address is 466 Lexington Avenue, New York, New
York 10017-3147.

PORTFOLIO MANAGERS. GROWTH & INCOME FUND. Brian S. Posner, a Managing
Director of Warburg, has been the Portfolio Manager of the Fund since January 9,
1997. Prior to joining Warburg in January 1997, Mr. Posner was an employee of
Fidelity Investments ('Fidelity') from 1987 until December 1996. He was the vice
president and portfolio manager of the Fidelity Equity-Income II Fund
(1992-December 1996); the portfolio manager of the Fidelity Value Fund
(1990-1992); assistant portfolio manager of the Fidelity Equity-Income Fund
(1989-1990); assistant portfolio manager of the Fidelity Capital Appreciation
Fund (1989); portfolio manager of the Fidelity Select Property-Casualty
Insurance Portfolio (1987-1990) and an equity analyst (1987). Prior to joining
Fidelity, Mr. Posner was a research associate at John Nuveen and Co. and an
analyst at Feldman Securities Corp. in Chicago.

BALANCED FUND. As described above, the Fund is managed using a multi-manager
approach where different managers are responsible for sectors of the Fund's
portfolio. Anthony G. Orphanos and Dale C. Christensen are the overall portfolio
strategists for the Fund and are responsible for determining the portion of the
Fund's portfolio to be allocated among sectors.

U.S. Value Sector. The U.S. Value Sector is managed by Anthony G. Orphanos.
Mr. Orphanos, a Managing Director of Warburg, has been with Warburg since 1977.

U.S. Small Company Sector. Elizabeth B. Dater, Stephen J. Lurito and Kyle F.
Frey manage the U.S. Small Company Sector. Ms. Dater, a Senior Managing Director
of Warburg, has been a Portfolio Manager of Warburg since 1978. Mr. Lurito, a
Managing Director of Warburg, has been with Warburg since 1987. Mr. Frey is a
Senior Vice President of Warburg and has been with Warburg since 1989.

U.S. Large Company Sector. George U. Wyper and Susan L. Black, Senior
Managing Directors of Warburg, manage the U.S. Large Company Sector. Mr. Wyper
joined Warburg in August 1994, before which time he was chief investment officer
of White River Corporation and president of Hanover Advisors, Inc. (1993-August
1994) and chief investment officer of Fund American Enterprises, Inc.
(1990-1993). Ms. Black has been with Warburg since 1985.

International Equity Sector. Richard H. King and Nancy Nierman manage the
International Equity Sector. Mr. King, a Senior Managing Director of Warburg,
has been with Warburg since 1988. Ms. Nierman is a Vice President of Warburg and
has been with Warburg since April 1996, before which time she was an analyst
with Fiduciary Trust Company International.

Fixed Income Sector. Dale C. Christensen, a Managing Director of Warburg,
manages the Fixed Income Sector and has been with Warburg since 1989.

CO-ADMINISTRATORS. The Funds employ Counsellors Funds Service, Inc.
('Counsellors Service'), a wholly owned subsidiary of Warburg, as a co-
administrator. As co-administrator, Counsellors Service provides shareholder
liaison services to the Funds, including responding to shareholder inquiries and
providing information on shareholder investments. Counsellors Service also
performs a variety of other services, including furnishing certain executive and
administrative services, acting as liaison between the Funds and their various
service providers, furnishing corporate secretarial services, which include
preparing materials for meetings of the Funds' Boards, preparing proxy
statements and annual, semiannual and quarterly reports, assisting in the
preparation of tax returns and monitoring and developing compliance procedures
for the Funds. As compensation, the Growth & Income Fund pays Counsellors
Service a fee calculated at an annual rate of .05% of the Fund's first $125
million of average daily net assets and .10% of average daily net assets over
$125 million, and the Balanced Fund pays Counsellors Service a fee calculated at
an annual rate of .10% of the Fund's average daily net assets.

Each Fund employs PFPC, an indirect, wholly owned subsidiary of PNC Bank
Corp., as a co-administrator. As a co-administrator, PFPC calculates the Fund's
net asset value, provides all accounting services for the Fund and assists in
related aspects of the Fund's operations. As compensation, the Funds each pay
PFPC a fee calculated at an annual rate of .15% of the Fund's first $1 billion
of average daily net assets and .05% of average daily net assets over
$1 billion. PFPC has its principal offices at 400 Bellevue Parkway, Wilmington,
Delaware 19809.

CUSTODIANS. PNC Bank, National Association ('PNC') serves as custodian of the
U.S. assets of the Funds and State Street Bank and Trust Company ('State
Street') serves as custodian of the Funds' non-U.S. assets. Like PFPC, PNC is a
subsidiary of PNC Bank Corp. and its principal business address is 1600 Market
Street, Philadelphia, Pennsylvania 19103. State Street's principal business
address is 225 Franklin Street, Boston, Massachusetts 02110.

TRANSFER AGENT. State Street also serves as shareholder servicing agent,
transfer agent and dividend disbursing agent for the Funds. State Street has
delegated to Boston Financial Data Services, Inc., a 50% owned subsidiary
('BFDS'), responsibility for most shareholder servicing functions. BFDS's
principal business address is 2 Heritage Drive, North Quincy, Massachusetts
02171.

DISTRIBUTOR. Counsellors Securities serves as distributor of the shares of
the Funds. Counsellors Securities is a wholly owned subsidiary of Warburg and is
located at 466 Lexington Avenue, New York, New York 10017-3147. No compensation
is payable by the Growth & Income Fund to Counsellors Securities for
distribution services. Counsellors Securities receives a fee at an annual rate
equal to .25% of the average daily net assets of the Balanced Fund's Common
Shares for distribution services, pursuant to a shareholder servicing and
distribution plan (the '12b-1 Plan') adopted by the Fund pursuant to Rule 12b-1
under the 1940 Act. Amounts paid to Counsellors Securities under a 12b-1 Plan
may be used by Counsellors Securities to cover expenses that are primarily
intended to result in, or that are primarily attributable to, (i) the sale of
the Common Shares, (ii) ongoing servicing and/or maintenance of the accounts of
Common Shareholders of the Fund and (iii) sub-transfer agency services,
sub-accounting services or administrative services related to the sale of the
Common Shares, all as set forth in the 12b-1 Plan. Payments under the 12b-1 Plan
are not tied exclusively to the distribution expenses actually incurred by
Counsellors Securities and the payments may exceed distribution expenses
actually incurred. The Board of the Balanced Fund evaluates the appropriateness
of the 12b-1 Plan on a continuing basis and in doing so consider all relevant
factors, including expenses paid by Counsellors Securities and amounts received
under the 12b-1 Plan.

Warburg or its affiliates may, at their own expense, provide promotional
incentives for qualified recipients who support the sale of shares of a Fund,
consisting of securities dealers who have sold Fund shares or others, including
banks and other financial institutions, under special arrangements. Incentives
may include oportunities to attend business meetings, conferences, sales or
training programs for recipients' employees or clients and other programs or
events and may also include opportunities to participate in advertising or sales
campaigns and/or shareholder services and programs regarding one or more Warburg
Pincus Fund. Warburg or its affiliates may pay for travel, meals and lodging in
connection with these promotional activities. In some instances, these
incentives may be offered only to certain institutions whose representatives
provide services in connection with the sale or expected sale of significant
amounts of the Fund's shares.

DIRECTORS AND OFFICERS. The officers of each Fund manage its day-to-day
operations and are directly responsible to its Board. The Boards set broad
policies for each Fund and choose the Fund's officers. A list of the Directors
and officers of each Fund and a brief statement of their present positions and

principal occupations during the past five years is set forth in the Statement
of Additional Information of each Fund.

HOW TO OPEN AN ACCOUNT
_____________________________________________________________________________
In order to invest in a Fund, an investor must first complete and sign an
account application. To obtain an application, an investor may telephone Warburg
Pincus Funds at (800) 927-2874. An investor may also obtain an account
application by writing to:
Warburg Pincus Funds
P.O. Box 9030
Boston, Massachusetts 02205-9030
Completed and signed account applications should be mailed to Warburg Pincus
Funds at the above address.

RETIREMENT PLANS AND UTMA ACCOUNTS. For information (i) about investing in
the Funds through a tax-deferred retirement plan, such as an Individual
Retirement Account ('IRA') or a Simplified Employee Pension IRA ('SEP-IRA'), or
(ii) about opening a Uniform Transfers to Minors Act ('UTMA') account, an
investor should telephone Warburg Pincus Funds at (800) 927-2874 or write to
Warburg Pincus Funds at the address set forth above. Investors should consult
their own tax advisers about the establishment of retirement plans and UTMA
accounts.

CHANGES TO ACCOUNT. For information on how to make changes to an account, an
investor should telephone Warburg Pincus Funds at (800) 927-2874.

HOW TO PURCHASE SHARES
_____________________________________________________________________________
Common Shares of each Fund may be purchased either by mail or, with special
advance instructions, by wire.

The minimum initial investment in each Fund is $1,000 and the minimum
subsequent investment is $100, except that subsequent minimum investments can be
as low as $50 under the Automatic Monthly Investment Plan described below. For
retirement plans and UTMA accounts, the minimum initial investment is $500. The
Fund reserves the right to change investment minimum requirements at any time.
The investment minimums may be waived for accounts in which employees of Warburg
or its affiliates have an interest or for investors maintaining advisory
accounts with Warburg or brokerage accounts with Counsellors Securities.
Existing investors will be given 15 days' notice by mail of any increase
in investment minimum requirements.

After an investor has made his initial investment, additional shares may be
purchased at any time by mail or by wire in the manner outlined below. Wire
payments for initial and subsequent investments should be preceded by an order
placed with the Fund and should clearly indicate the investor's account number
and the name of the Fund in which shares are being purchased. In the interest of
economy and convenience, physical certificates representing shares in the Funds
are not normally issued.

BY MAIL. If the investor desires to purchase Common Shares by mail, a check
or money order made payable to the Fund or Warburg Pincus Funds (in U.S.
currency) should be sent along with the completed account application to Warburg
Pincus Funds at the address set forth above. Checks payable to the investor and
endorsed to the order of the Fund or Warburg Pincus Funds will not be accepted
as payment and will be returned to the sender. If payment is received in proper
form by the close of regular trading on the New York Stock Exchange, Inc. (the
'NYSE') (currently 4:00 p.m., Eastern time) on a day that the Fund calculates
its net asset value (a 'business day'), the purchase will be made at the Fund's
net asset value calculated at the end of that day. If payment is received after
the close of regular trading on the NYSE, the purchase will be effected at the
Fund's net asset value determined for the next business day after payment has
been received. Checks or money orders that are not in proper form or that are
not accompanied or preceded by a complete account application will be returned
to the sender. Shares purchased by check or money order are entitled to receive
dividends and distributions beginning on the day after payment has been
received. Checks or money orders in payment for shares of more than one Warburg
Pincus Fund should be made payable to Warburg Pincus Funds and should be
accompanied by a breakdown of amounts to be invested in each fund. If a check
used for purchase does not clear, the Fund will cancel the purchase and the
investor may be liable for losses or fees incurred. For a description of the
manner of calculating the Fund's net asset value, see 'Net Asset Value' below.

BY WIRE. Investors may also purchase Common Shares in a Fund by wiring funds
from their banks. Telephone orders by wire will not be accepted until a
completed account application in proper form has been received and an account
number has been established. Investors should place an order with the Fund prior
to wiring funds by telephoning (800) 927-2874. Federal funds may be wired to
Counsellors Securities Inc. using the following wire address:
State Street Bank and Trust Co.
225 Franklin St.
Boston, MA 02101
ABA# 0110 000 28
Attn: Mutual Funds/Custody Dept.
[Insert Warburg Pincus Fund name(s) here]
DDA# 9904-649-2
[Shareowner name]
[Shareowner account number]
If a telephone order is received by the close of regular trading on the NYSE
and payment by wire is received on the same day in proper form in accordance
with instructions set forth above, the shares will be priced according to the
net asset value of the Fund on that day and are entitled to dividends and
distributions beginning on that day. If payment by wire is
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received in proper form by the close of the NYSE without a prior telephone
order, the purchase will be priced according to the net asset value of the
Fund on that day and is entitled to dividends and distributions beginning
on that day. However, if a wire in proper form that is not preceded by a
telephone order is received after the close of regular trading on the NYSE,
the payment will be held uninvested until the order is effected at the close
of business on the next business day. Payment for orders that are not accepted
will be returned to the prospective investor after prompt inquiry. If a
telephone order is placed and payment by wire is not received on the same day,
the Fund will cancel the purchase and the investor may be liable for losses or
fees incurred.

PURCHASES THROUGH INTERMEDIARIES. Common Shares of each Fund are available
through the Charles Schwab & Company, Inc. Mutual Fund OneSourceTM Program;
Fidelity Brokerage Services, Inc. Funds NetworkTM Program; Jack White & Company,
Inc.; and Waterhouse Securities, Inc. and through various brokerage firms,
financial institutions and programs sponsored by other industry professionals
(collectively, 'Service Organizations'). Certain features of the Funds, such as
the initial and subsequent investment minimums, redemption fees and certain
trading restrictions, may be modified or waived by Service Organizations.
Service Organizations may impose transaction or administrative charges or other
direct fees, which charges or fees would not be imposed if Fund shares are
purchased directly from the Funds. Therefore, a client or customer should
contact the Service Organization acting on his behalf concerning the fees (if
any) charged in connection with a purchase or redemption of Fund shares and
should read this Prospectus in light of the terms governing his accounts with
the Service Organization. Service Organizations will be responsible for promptly
transmitting client or customer purchase and redemption orders to the Funds
in accordance with their agreements with clients or customers. Service
Organizations that have entered into agreements with a Fund or its agent
may enter confirmed purchase orders on behalf of clients and customers, with
payment to follow no later than the Funds' pricing on the following business
day. If payment is not received by such time, the Service Organization could
be held liable for resulting fees or losses.

For administration, subaccounting, transfer agency and/or other services,
Warburg, Counsellors Securities or their affiliates may pay Service
Organizations and certain recordkeeping organizations with whom they have
entered into agreements a fee of up to .35% (the 'Service Fee') of the average
annual value of accounts with the Funds maintained by such Service Organizations
or recordkeepers. A portion of the Service Fee may be borne by the Funds as a
transfer agency fee. In addition, a Service Organization or recordkeeper may
directly or indirectly pay a portion of its Service Fee to the Fund's custodian
or transfer agent for costs related to accounts of its clients or customers. The
Service Fee payable to any one Service Organization or recordkeeper is
determined based upon a number of factors, including the nature and quality of
the services provided, the operations processing

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<PAGE>
requirements of the relationship and the standardized fee schedule of the
Service Organization or recordkeeper.
AUTOMATIC MONTHLY INVESTING. Automatic monthly investing allows shareholders
to authorize a Fund to debit their bank account monthly ($50 minimum) for the
purchase of Fund shares on or about either the tenth or twentieth calendar day
of each month. To establish the automatic monthly investing option, obtain a
separate application or complete the 'Automatic Investment Program' section of
the account applications and include a voided, unsigned check from the bank
account to be debited. Only an account maintained at a domestic financial
institution which is an automated clearing house member may be used.
Shareholders using this service must satisfy the initial investment minimum for
the Fund prior to or concurrent with the start of any Automatic Investment
Program. Please refer to an account application for further information, or
contact Warburg Pincus Funds at (800) 927-2874 for information or to modify or
terminate the program. Investors should allow a period of up to 30 days in order
to implement an automatic investment program. The failure to provide complete
information could result in further delays.

GENERAL. Each Fund reserves the right to reject any specific purchase order.
A Fund may discontinue sales of its shares if management believes that a
substantial further increase in assets may adversely affect that Fund's ability
to achieve its investment objective. In such event, however, it is anticipated
that existing shareholders would be permitted to continue to authorize
investment in such Fund and to reinvest any dividends or capital gains
distributions.

HOW TO REDEEM AND EXCHANGE SHARES
_____________________________________________________________________________
REDEMPTION OF SHARES. An investor in a Fund may redeem (sell) his shares on
any day that the Fund's net asset value is calculated (see 'Net Asset Value'
below).
Common Shares of the Funds may either be redeemed by mail or by telephone.
Investors should realize that in using the telephone redemption and exchange
option, you may be giving up a measure of security that you may have if you were
to redeem or exchange your shares in writing. If an investor desires to redeem
his shares by mail, a written request for redemption should be sent to Warburg
Pincus Funds at the address indicated above under 'How to Open an Account.' An
investor should be sure that the redemption request identifies the Fund, the
number of shares to be redeemed and the investor's account number. In order to
change the bank account or address designated to receive the redemption
proceeds, the investor must send a written request (with signature guarantee of
all investors listed on the account when such a change is made in conjunction
with a redemption request) to Warburg Pincus Funds. Each mail redemption request
must be signed by the registered owner(s) (or his legal representative(s))
exactly as the shares are registered. If an investor has applied for the
telephone redemption feature on his account application, he may redeem his
shares by calling
26

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Warburg Pincus Funds at (800) 927-2874 between 9:00 a.m. and 4:00 p.m. (Eastern
time) on any business day. An investor making a telephone withdrawal should
state (i) the name of the Fund, (ii) the account number of the Fund, (iii) the
name of the investor(s) appearing on the Fund's records, (iv) the amount to be
withdrawn and (v) the name of the person requesting the redemption.

After receipt of the redemption request by mail or by telephone, the
redemption proceeds will, at the option of the investor, be paid by check and
mailed to the investor of record or be wired to the investor's bank as indicated
in the account application previously filled out by the investor. No Fund
currently imposes a service charge for effecting wire transfers but each Fund
reserves the right to do so in the future. During periods of significant
economic or market change, telephone redemptions may be difficult to implement.
If an investor is unable to contact Warburg Pincus Funds by telephone, an
investor may deliver the redemption request to Warburg Pincus Funds by mail at
the address shown above under 'How to Open an Account.' Although each Fund will
redeem shares purchased by check or through the Automatic Investment Program
before the check or funds clear, payments of the redemption proceeds will be
delayed for five days (for funds received through the Automatic Investment
Program) or ten days (for check purchases) from the date of purchase. Investors
should consider purchasing shares using a certified or bank check or money order
if they anticipate an immediate need for redemption proceeds.

If a redemption order is received by a Fund or its agent, prior to the close
of regular trading on the NYSE, the redemption order will be effected at the net
asset value per share as determined on that day. If a redemption order is
received after the close of regular trading on the NYSE, the redemption order
will be effected at the net asset value as next determined. Except as noted
above, redemption proceeds will normally be mailed or wired to an investor
on the next business day following the date a redemption order is effected. If,
however, in the judgment of Warburg, immediate payment would adversely affect a
Fund, each Fund reserves the right to pay the redemption proceeds within seven
days after the redemption order is effected. Furthermore, each Fund may suspend
the right of redemption or postpone the date of payment upon redemption (as well
as suspend or postpone the recordation of an exchange of shares) for such
periods as are permitted under the 1940 Act.
The proceeds paid upon redemption may be more or less than the amount
invested depending upon a share's net asset value at the time of redemption. If
an investor redeems all the shares in his account, all dividends and
distributions declared up to and including the date of redemption are paid along
with the proceeds of the redemption.
If, due to redemptions, the value of an investor's account drops to less than
$500, each Fund reserves the right to redeem the shares in that account at net
asset value. Prior to any redemption, the Fund will notify an investor in
writing that this account has a value of less than the minimum. The investor

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will then have 60 days to make an additional investment before a redemption will
be processed by the Fund.
TELEPHONE TRANSACTIONS. In order to request redemptions by telephone,
investors must have completed and returned to Warburg Pincus Funds an account
application containing a telephone election. Unless contrary instructions are
elected, an investor will be entitled to make exchanges by telephone. Neither a
Fund nor its agents will be liable for following instructions communicated by
telephone that it reasonably believes to be genuine. Reasonable procedures will
be employed on behalf of each Fund to confirm that instructions communicated by
telephone are genuine. Such procedures include providing written confirmation of
telephone transactions, tape recording telephone instructions and requiring
specific personal information prior to acting upon telephone instructions.
AUTOMATIC CASH WITHDRAWAL PLAN. Each Fund offers investors an automatic cash
withdrawal plan under which investors may elect to receive periodic cash
payments of at least $1,000 monthly or quarterly. To establish this service,
complete the 'Automatic Withdrawal Plan' section of the account application and
attach a voided check from the bank account to be credited. For further
information regarding the automatic cash withdrawal plan or to modify or
terminate the plan, investors should contact Warburg Pincus Funds at (800)
927-2874.

EXCHANGE OF SHARES. An investor may exchange Common Shares of a Fund for
Common Shares of another Fund or for Common Shares of another Warburg Pincus
Fund at their respective net asset values. Exchanges may be effected by mail or
by telephone in the manner described under 'Redemption of Shares' above. If an
exchange request is received by Warburg Pincus Funds or their agent prior to the
close of regular trading on the NYSE, the exchange will be made at each Fund's
net asset value determined at the end of that business day. Exchanges will be
effected without a sales charge but must satisfy the minimum dollar amount
necessary for new purchases. Due to the costs involved in effecting exchanges,
each Fund reserves the right to refuse to honor more than three exchange
requests by a shareholder in any 30-day period. The exchange privilege may be
modified or terminated at any time upon 60 days' notice to shareholders.
Currently, exchanges may be made among the Funds and with the following other
funds:

WARBURG PINCUS CASH RESERVE FUND -- a money market fund investing in
short-term, high quality money market instruments;
WARBURG PINCUS NEW YORK TAX EXEMPT FUND -- a money market fund investing in
short-term, high quality municipal obligations designed for New York investors
seeking income exempt from federal, New York State and New York City income
tax;
WARBURG PINCUS NEW YORK INTERMEDIATE MUNICIPAL FUND -- an intermediate-term
municipal bond fund designed for New York investors seeking income exempt from
federal, New York State and New York City income tax;

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<PAGE>
WARBURG PINCUS INTERMEDIATE MATURITY GOVERNMENT FUND -- an intermediate-term
bond fund investing in obligations issued or guaranteed by the U.S. government,
its agencies or instrumentalities;
WARBURG PINCUS FIXED INCOME FUND -- a bond fund seeking current income and,
secondarily, capital appreciation by investing in a diversified portfolio of
fixed-income securities;
WARBURG PINCUS GLOBAL FIXED INCOME FUND -- a bond fund investing in a
portfolio consisting of investment grade fixed-income securities of
governmental and corporate issuers denominated in various currencies, including
U.S. dollars;

WARBURG PINCUS CAPITAL APPRECIATION FUND -- an equity fund seeking long-term
capital appreciation by investing primarily in equity securities of domestic
companies;

WARBURG PINCUS STRATEGIC VALUE FUND -- an equity fund seeking capital
appreciation by investing in undervalued companies and market sectors;
WARBURG PINCUS EMERGING GROWTH FUND -- an equity fund seeking maximum capital
appreciation by investing in emerging growth companies;
WARBURG PINCUS SMALL COMPANY VALUE FUND -- an equity fund seeking long-term
capital appreciation by investing primarily in equity securities of small
companies;
WARBURG PINCUS SMALL COMPANY GROWTH FUND -- an equity fund seeking capital
growth by investing in equity securities of small-sized domestic companies;
WARBURG PINCUS HEALTH SCIENCES FUND -- an equity fund seeking capital
appreciation by investing primarily in equity and debt securities of health
sciences companies;
WARBURG PINCUS POST-VENTURE CAPITAL FUND -- an equity fund seeking long-term
growth of capital by investing principally in equity securities of issuers in
their post-venture capital stage of development;
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND -- an equity fund seeking
long-term growth of capital by investing principally in equity securities of
U.S. and foreign issuers in their post-venture capital stage of development;
WARBURG PINCUS INTERNATIONAL EQUITY FUND -- an equity fund seeking long-term
capital appreciation by investing primarily in equity securities of non-United
States issuers;
WARBURG PINCUS EMERGING MARKETS FUND -- an equity fund seeking growth of
capital by investing primarily in securities of non-United States issuers
consisting of companies in emerging securities markets;
WARBURG PINCUS JAPAN GROWTH FUND -- an equity fund seeking long-term growth
of capital by investing primarily in equity securities of Japanese issuers; and

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<PAGE>
WARBURG PINCUS JAPAN OTC FUND -- an equity fund seeking long-term capital
appreciation by investing in a portfolio of securities traded in the Japanese
over-the-counter market.
The exchange privilege is available to shareholders residing in any state in
which the Common Shares being acquired may legally be sold. When an investor
effects an exchange of shares, the exchange is treated for federal income tax
purposes as a redemption. Therefore, the investor may realize a taxable gain or
loss in connection with the exchange. Investors wishing to exchange Common
Shares of a Fund for Common Shares in another Warburg Pincus Fund should review
the prospectus of the other fund prior to making an exchange. For further
information regarding the exchange privilege or to obtain a current prospectus
for another Warburg Pincus Fund, an investor should contact Warburg Pincus Funds
at (800) 927-2874.

DIVIDENDS, DISTRIBUTIONS AND TAXES
_____________________________________________________________________________

DIVIDENDS AND DISTRIBUTIONS. Each Fund calculates its dividends from net
investment income. Net investment income includes interest accrued and dividends
earned on a Fund's portfolio securities for the applicable period (which
includes amortization of market discounts) less amortization of market premiums
and applicable expenses. The Funds each declare and pay their dividends from
their net investment income quarterly. Each Fund declares distributions of its
net realized short-term and long-term capital gains annually and pays them in
the calendar year in which they are declared, generally in November or December.
Net investment income earned on weekends and when the NYSE is not open will be
computed as of the next business day. Unless an investor instructs a Fund to pay
dividends or distributions in cash, dividends and distributions will
automatically be reinvested in additional Common Shares of the relevant Fund at
net asset value. The election to receive dividends in cash may be made on the
account application or, subsequently, by writing to Warburg Pincus Funds at the
address set forth under 'How to Open an Account' or by calling Warburg Pincus
Funds at (800) 927-2874.

A Fund may be required to withhold for U.S. federal income taxes 31% of all
distributions payable to shareholders who fail to provide the Fund with their
correct taxpayer identification number or to make required certifications, or
who have been notified by the U.S. Internal Revenue Service that they are
subject to backup withholding.

TAXES. Each Fund intends to qualify each year as a 'regulated investment
company' within the meaning of the Code. As regulated investment companies, the
Funds will be subject to a 4% non-deductible excise tax measured with respect to
certain undistributed amounts of ordinary income and capital gain. The Funds
expect to pay such dividends and to make such distributions as are necessary to
avoid the application of this tax.

taxable to investors as long-term capital gains, in each case regardless of how
long the shareholder has held Fund shares and whether received in cash or
reinvested in additional Fund shares. The Funds will provide information
relating to that portion of a 'capital gain dividend' that may be treated by
investors as eligible for the reduced capital gains rate for capital assets held
for more than 18 months. As a general rule, an investor's gain or loss on a sale
or redemption of his Fund shares will be long-term capital gain or loss if he
has held his shares for more than one year and will be short -term capital gain
or loss if he has held his shares for one year or less. However, any loss
realized upon the sale or redemption of shares within six months from the date
of their purchase will be treated as a long-term capital loss to the extent of
any amounts treated as distributions of long-term capital gain during such
six-month period with respect to such shares. Investors may be proportionately
liable for taxes on income and gains of the Funds, but investors not subject to
tax on their income will not be required to pay tax on amounts distributed to
them. The Funds' investment activities, including short sales of securities,
will not result in unrelated business taxable income to a tax-exempt investor.
The Funds will designate that portion of each Fund's dividends that will qualify
for the federal dividends received deduction for corporations. The Funds'
investments in foreign securities may subject them to certain withholding and
other taxes imposed by foreign countries with respect to dividends, interest,
capital gains and other income. It is not expected that the payment of such
taxes by the Funds will give rise to a direct credit or deduction available
to the Funds' shareholders.

Special Tax Matters Relating to the Balanced Fund. The investment by the
Balanced Fund in zero coupon securities may create special tax consequences.
Zero coupon securities do not make interest payments; however, a portion of the
difference between a zero coupon security's maturity value and its purchase
price is imputed as income to the Fund each year even though the Fund receives
no cash distribution until maturity. Under the U.S. federal tax laws applicable
to mutual funds, the Fund will not be subject to tax on this income if it pays
dividends to its shareholders substantially equal to all the income received
from, or imputed with respect to, their investments during the year, including
their zero coupon securities. These dividends will ordinarily constitute taxable
income to the shareholders of the Fund.

GENERAL. Statements as to the tax status of each investor's dividends and
distributions are mailed annually. Each investor will also receive, if
applicable, various written notices after the close of a Fund's prior taxable
year with respect to certain dividends and distributions that were paid (or that
were treated as having been paid) by the Fund during the Fund's prior taxable
year. Investors should consult their own tax advisers with specific reference to
their own tax situations, including their state and local tax liabilities.

NET ASSET VALUE
_____________________________________________________________________________

Each Fund's net asset value per share is calculated as of the close of
regular trading on the NYSE (currently 4:00 p.m., Eastern time) on each business
day, Monday through Friday, except on days when the NYSE is closed. The NYSE is
currently scheduled to be closed on New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday, respectively.
The net asset value per share of each Fund generally changes each day.

The net asset value per Common Share of each Fund is computed by adding the
Common Shares' pro rata share of the value of the Fund's assets, deducting the
Common Shares' pro rata share of the Fund's liabilities and the liabilities
specifically allocated to Common Shares and then dividing the result by the
total number of outstanding Common Shares.
Securities listed on a U.S. securities exchange (including securities traded
through the NASDAQ National Market System) or foreign securities exchange or
traded in an over-the-counter market will be valued at the most recent sale
price when the valuation is made. Options and futures contracts will be valued
similarly. Debt obligations that mature in 60 days or less from the valuation
date are valued on the basis of amortized cost, unless a Fund's Board determines
that using this valuation method would not reflect the investments' value.
Securities, options and futures contracts for which market quotations are not
readily available and other assets will be valued at their fair value as
determined in good faith pursuant to consistently applied procedures established
by a Fund's Board. Further information regarding valuation policies is contained
in the Statement of Additional Information.

PERFORMANCE
_____________________________________________________________________________

The Funds quote the performance of Common Shares separately from Advisor
Shares. The net asset value of Common Shares is listed in The Wall
Street Journal each business day under the heading 'Warburg Pincus Funds.' From
time to time, each Fund may advertise yield and average annual total return of
its Common Shares over various periods of time. The yield refers to net
investment income generated by the Common Shares over a specified thirty-day
period, which is then annualized. Total return figures show the average
percentage change in value of an investment in the Common Shares from the
beginning of the measuring period to the end of the measuring period. The
figures reflect changes in the price of the Common Shares assuming that any
income dividends and/or capital gain distributions made by the Fund during the
period were reinvested in Common Shares of the Fund. Total return will be shown
for recent one-, five- and ten-year periods, and may be shown for other periods
as well (such as from commencement of the Fund's operations or on a
year-by-year, quarterly or current year-to-date basis). Performance quotations
of a Fund will include performance of a predecessor fund.

When considering average total return figures for periods longer than one
year, it is important to note that the annual total return for one year in the
period might have been greater or less than the average for the entire period.
When considering total return figures for periods shorter than one year,
investors should bear in mind that each Fund seeks long-term appreciation and
that such return may not be representative of any Fund's return over a longer
market cycle. Each Fund may also advertise aggregate total return figures of its
Common Shares for various periods, representing the cumulative change in value
of an investment in the Common Shares for the specific period (again reflecting
changes in share prices and assuming reinvestment of dividends and
distributions). Aggregate and average total returns may be shown by means of
schedules, charts or graphs and may indicate various components of total return
(i.e., change in value of initial investment, income dividends and capital gain
distributions).

Investors should note that yield, tax-equivalent yield and total return
figures are based on historical earnings and are not intended to indicate future
performance. Each Fund's Statement of Additional Information describes the
method used to determine the yield, tax-equivalent yield and total return.
Current total return figures may be obtained by calling Warburg Pincus Funds at
(800) 927-2874.

In reports or other communications to investors or in advertising material, a
Fund may describe general economic and market conditions affecting the Fund. The
Fund may compare its performance (i) with that of other mutual funds as listed
in the rankings prepared by Lipper Analytical Services, Inc. or similar
investment services that monitor the performance of mutual funds or as set forth
in the publications listed below; (ii) with the S&P 500 Index; or (iii) with
other appropriate indexes of investment securities or with data developed by
Warburg derived from such indexes. A Fund may include evaluations of the Fund
published by nationally recognized ranking services and by financial
publications that are nationally recognized, such as Barron's,
Business Week, Financial Times, Forbes, Fortune, Inc., Institutional Investor,
Investor's Business Daily, Money, Morningstar, Inc., Mutual Fund Magazine, Smart
Money and The Wall Street Journal. Morningstar, Inc. rates funds in broad
categories based on risk/reward analyses over various time periods. In addition,
each Fund may from time to time compare the expense ratio of its Common Shares
to that of investment companies with similar objectives and policies, based on
data generated by Lipper Analytical Services, Inc. or similar investment
services that monitor mutual funds.

In reports or other communications to investors or in advertising, each Fund
may discuss relevant economic and market conditions affecting the Fund. In
addition, a Fund and its portfolio managers may render updates of Fund
investment activity, which may include, among other things, discussion or
quantitive statistical or comparative analysis of portfolio composition and
significant portfolio holdings including analyses of holdings by sector,
industry, country or geographic region, credit quality and other

characteristics. Each Fund may also describe the general biography, work
experience and/or investment philosophy or style of the portfolio managers of
the Fund and may include quotations attributable to the portfolio managers
describing approaches taken in managing the Fund's investments, research
methodology underlying stock selection or the Fund's investment objectives. Each
Fund may also discuss measures of risk, including those based on statistical or
econometric analyses, the continuum of risk and return relating to different
investments and the potential impact of foreign stocks on a portfolio otherwise
composed of domestic securities.

GENERAL INFORMATION
_____________________________________________________________________________

ORGANIZATION. The Funds were incorporated on January 29, 1996 under the laws
of the State of Maryland under the names 'Warburg, Pincus Growth & Income Fund,
Inc.,' and 'Warburg, Pincus Balanced Fund, Inc.' On May 3, 1996, each Fund
acquired all of the assets and liabilities of the investment portfolio of the
RBB Fund with a similar name.

The charter of each Fund authorizes its Board to issue three billion full and
fractional shares of capital stock, $.001 par value per share, of which one
billion shares are designated Common Shares and two billion shares are
designated Advisor Shares. Under each Fund's charter documents, the Board has
the power to classify or reclassify any unissued shares of the Fund into one or
more additional classes by setting or changing in any one or more respects their
relative rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption. The Board may similarly
classify or reclassify any class of its shares into one or more series and,
without shareholder approval, may increase the number of authorized shares of
the Fund.
MULTI-CLASS STRUCTURE. Each Fund offers a separate class of shares, the
Advisor Shares, pursuant to a separate prospectus. Individual investors may only
purchase Advisor Shares through institutional shareholders of record,
broker-dealers, financial institutions, depository institutions, retirement
plans and financial intermediaries. Shares of each class represent equal pro
rata interests in the respective Fund and accrue dividends and calculate net
asset value and performance quotations in the same manner. Because of the higher
fees paid by the Advisor Shares, the total return on such shares can be expected
to be lower than the total return on Common Shares. Investors may obtain
information concerning the Advisor Shares from their investment professional or
by calling Counsellors Securities at (800) 369-2728.
VOTING RIGHTS. Investors in a Fund are entitled to one vote for each full
share held and fractional votes for fractional shares held. Shareholders of a
Fund will vote in the aggregate except where otherwise required by law and
except that each class will vote separately on certain matters pertaining to its
distribution and shareholder servicing arrangements. There will normally be no
meetings of investors for the purpose of electing members of the Board unless
and until such time as less than a majority of the members holding office have
been elected by investors. Any Director of a Fund may be

<PAGE>
<PAGE>
removed from office upon the vote of shareholders holding at least a majority of
the relevant Fund's outstanding shares, at a meeting called for that purpose. A
meeting will be called for the purpose of voting on the removal of a Board
member at the written request of holders of 10% of the outstanding shares of a
Fund.

SHAREHOLDER COMMUNICATIONS. Each investor will receive a quarterly statement
of his account, as well as a statement of his account after any transaction that
affects his share balance or share registration (other than the reinvestment of
dividends or distributions or investment made through the Automatic Investment
Program). Each Fund will also send to its investors a semiannual report and an
audited annual report, each of which includes a list of the investment
securities held by the Fund and a statement of the performance of the Fund.
Periodic listings of the investment securities held by a Fund, as well as
certain statistical characteristics of the Fund, may be obtained by calling
Warburg Pincus Funds at (800) 927-2874.

The prospectuses of the Funds are combined in this Prospectus. Each Fund
offers only its own shares, yet it is possible that a Fund might become liable
for a misstatement, inaccuracy or omission in this Prospectus with regard to
another Fund.

---------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, EACH FUND'S
STATEMENT OF ADDITIONAL INFORMATION OR THE FUNDS' OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFERING OF SHARES OF THE FUNDS, AND IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUNDS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF THE
COMMON SHARES OF THE FUNDS IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFER MAY NOT LAWFULLY BE MADE.

<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]

TABLE OF CONTENTS

<TABLE>
<S> <C>
The Funds' Expenses..................................................... 2
Financial Highlights.................................................... 3
Investment Objectives and Policies...................................... 5
Portfolio Investments................................................... 7
Risk Factors and Special Considerations................................. 10
Portfolio Transactions and Turnover Rate................................ 12
Certain Investment Strategies........................................... 13
Investment Guidelines................................................... 19
Management of the Funds................................................. 19
How to Open an Account.................................................. 23
How to Purchase Shares.................................................. 23
How to Redeem and Exchange Shares....................................... 26
Dividends, Distributions and Taxes...................................... 30
Net Asset Value......................................................... 31
Performance............................................................. 32
General Information..................................................... 34
</TABLE>

[Logo]
P.O. BOX 9030, BOSTON, MA 02205-9030
WARBURG (800-927-2874)
WWW.WARBURG.COM
COUNSELLORS SECURITIES INC., DISTRIBUTOR. WPGBT-1-1097

WARBURG PINCUS ADVISOR FUNDS PROSPECTUS

OCTOBER , 1997

[LOGO]
GROWTH &
INCOME FUND

[LOGO]

INVESTMENTS

Subject to Completion, dated August 26, 1997

PROSPECTUS October , 1997

Warburg Pincus Advisor Funds are a family of open-end mutual funds that are
offered to investors who wish to buy shares through an investment professional,
to financial institutions investing on behalf of their customers and to
retirement plans that elect to make one or more Advisor Funds an investment
option for participants in the plans. One Advisor Fund is described in this
Prospectus:

WARBURG PINCUS GROWTH & INCOME FUND seeks long-term growth of capital and income
and a reasonable current return by investing primarily in equity securities.

The Fund currently offers two classes of shares, one of which, the Advisor
Shares, is offered pursuant to this Prospectus. The Advisor Shares of the Fund,
as well as Advisor Shares of certain other Warburg Pincus-advised funds, are
sold under the name 'Warburg Pincus Advisor Funds.' Individual investors may
purchase Advisor Shares only through institutional shareholders of record,
broker-dealers, financial institutions, depository institutions, retirement
plans and other financial intermediaries ('Institutions'). The Advisor Shares
impose a 12b-1 fee of .50% per annum, which is the economic equivalent of a
sales charge. The Fund's Common Shares are available for purchase by individuals
directly and are offered by a separate prospectus.

NO MINIMUM INVESTMENT
_______________________________________________________________________________
There is no minimum amount of initial or subsequent purchases of shares imposed
on Institutions. See 'How to Purchase Shares.'

This Prospectus briefly sets forth certain information about the Fund that
investors should know before investing. Investors are advised to read this
Prospectus and retain it for future reference. Additional information about the
Fund contained in a Statement of Additional Information, has been filed with the
Securities and Exchange Commission (the 'SEC') in a document entitled 'Statement
of Additional Information' and is available for reference, along with other
related materials, on the SEC Internet Web site (http://www.sec.gov). The
Statement of Additional Information is also available upon request and without
charge by calling Warburg Pincus Advisor Funds at (800) 369-2728. Information
regarding the status of shareholder accounts may also be obtained by calling
Warburg Pincus Advisor Funds at the same number. Warburg Pincus Funds maintain a
Web site at www.warburg.com. The Statement of Additional Information relating to
the Fund, as amended or supplemented from time to time, bears the same date as
this Prospectus and is incorporated by reference in its entirety into this
Prospectus.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF OR GUARANTEED OR ENDORSED
BY ANY BANK, AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN
SHARES OF THE FUND INVOLVE INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF THE
PRINCIPAL AMOUNT INVESTED.
- --------------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------

<PAGE>
<PAGE>
THE FUND'S EXPENSES
_______________________________________________________________________________
Warburg Pincus Growth & Income Fund (the 'Fund') currently offers two
separate classes of shares: Common Shares and Advisor Shares. See 'General
Information.' Because of the higher fees paid by Advisor Shares, the total
return on such shares can be expected to be lower than the total return on
Common Shares.

<TABLE>
<S> <C>
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)................................................................ 0
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees......................................................... .75%
12b-1 Fees.............................................................. .50%*
Other Expenses.......................................................... .32%
--------
Total Fund Operating Expenses........................................... 1.57%
--------
--------
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual
return and (2) redemption at the end of each time period:
1 year................................................................. $ 16
3 years................................................................ $ 50
5 years................................................................ $ 86
10 years................................................................ $187
</TABLE>

- --------------------------------------------------------------------------------
* Current 12b-1 fees are .50% out of a maximum of .75% authorized under the
Advisor Shares' Distribution Plan. At least a portion of these fees should be
considered by the investor to be the economic equivalent of a sales charge.

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

The expense table shows the costs and expenses that an investor will bear
directly or indirectly as an Advisor Shareholder of the Fund. Certain broker-
dealers and financial institutions also may charge their clients fees in
connection with investments in the Fund's Advisor Shares, which fees are not
reflected in the table. The Example should not be considered a representation of
past or future expenses; actual Fund expenses may be greater or less than those
shown. Moreover, while the Example assumes a 5% annual return, the Fund's actual
performance will vary and may result in a return greater or less than 5%.
Long-term shareholders of Advisor Shares may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the National
Association of Securities Dealers, Inc. (the 'NASD').

<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
_______________________________________________________________________________
(FOR AN ADVISOR SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

The table below sets forth certain information concerning the investment
results of shares of the Fund (formerly an investment portfolio of The RBB Fund,
Inc. (the 'RBB Fund')) for the periods indicated. The financial data included in
this table for the six months ended February 28, 1997 is unaudited. The
financial data included in this table for the year ended August 31, 1996 has
been audited by Coopers & Lybrand L.L.P., independent accountants, whose report
dated October 18, 1996 is incorporated by reference to the Statement of
Additional Information. The financial data included in this table for the period
from May 15, 1995 to August 31, 1995 are part of the RBB Fund's financial
statements, which have also been audited by Coopers & Lybrand L.L.P. Further
information about the performance of the Fund is contained in the Fund's
semiannual report dated February 28, 1997 and the annual report, dated August
31, 1996, copies of which may be obtained without charge by calling Warburg
Pincus Funds at (800) 369-2728.

WARBURG PINCUS GROWTH & INCOME FUND (c)

<TABLE>
<CAPTION>
For the Period
For the Six For the May 15, 1995
Months Ended Year (Commencement
February 28, 1997 Ended of Operations) to
(Unaudited) August 31, 1996 August 31, 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
Period.......................... $ 14.88 $ 16.38 $ 14.87
------ ------ ------
Income From Investment
Operations
Net Investment Income......... (0.0077) .0800 0.0236
Net Gains (Losses) on
Securities (both realized
and unrealized)............. 1.1194 (.6931) 1.5323
------ ------ ------
Total from Investment
Operations.................. 1.1117 (.6131) 1.5559
------ ------ ------
Less Distributions
Dividends (from net investment
income)..................... (0.0029) (.0736) (0.0459)
Distributions (from capital
gains)...................... 0.0000 (.8133) 0.0000
------ ------ ------
Total Distributions........... (0.0029) (.8869) (0.0459)
------ ------ ------
Net Asset Value, End of Period... $ 15.99 $ 14.88 $ 16.38
------ ------ ------
------ ------ ------
Total Returns.................... 7.48%(b) (3.92%) 10.49%(b)
Ratios/Supplemental Data
Net Assets, End of Period
(000)........................... $ 72,879 $79,565 $56,902
Ratio of Expenses to Average Net
Assets.......................... 1.57%(a) 1.59% 1.92%(a)
Ratio of Net Investment Income to
Average Net Assets.............. (.06)%(a) .28% 0.43%(a)
Portfolio Turnover Rate.......... 131%(b) 94% 109%(b)
Average commission rate.......... $ .0585(d) $ .0596(d) N/A
</TABLE>

- ------------
(a) Annualized.
(b) Not Annualized.

(c) Financial Highlights for the period from May 15, 1995 to August 31, 1995,
relate solely to the Advisor Shares of the Warburg Pincus Growth & Income
Fund investment portfolio of the RBB Fund.

(d) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

<PAGE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
_______________________________________________________________________________
The Fund's investment objectives are to seek long-term growth of capital and
income and a reasonable current return. The Fund's objectives and policies are
non-fundamental policies and may be changed without first obtaining the approval
of a majority of the outstanding shares of that Fund. Any changes may result in
the Fund having investment objectives different from those an investor may have
considered at the time of investment. Any investment involves risk and,
therefore, there can be no assurance that any Fund will achieve its investment
objective. See 'Portfolio Investments' and 'Certain Investment Strategies' for
descriptions of certain types of investments the Fund may make.

The Fund is a diversified management investment company that pursues its
objectives by investing primarily in equity securities. The policy of the Fund
is to invest, under normal market conditions, substantially all of its assets in
equity securities that Warburg, Pincus Counsellors, Inc., the Fund's investment
adviser ('Warburg'), considers to be relatively undervalued. Warburg will
determine whether a company is undervalued based upon research and analysis,
taking into account, among other factors, price/earnings ratio, price/book
ratio, price/cash flow ratio, earnings growth, debt/capital ratio and multiples
of earnings of comparable securities. Other relevant factors, including a
company's asset value, franchise value and quality of management, will also be
considered. These factors are not applied to prospective investments in a
mechanical way; rather, Warburg analyzes each security individually, taking all
relevant factors into account. Equity securities include common stocks,
securities which are convertible into common stocks and readily marketable
securities, such as rights and warrants, which derive their value from common
stock. The Fund may hold securities of any size, but currently expects to focus
on companies with market capitalizations of $1 billion or greater at the time of
initial purchase. The Fund seeks to achieve its income objective by investing in
dividend-paying equity securities. The amount of income generated from the Fund
will fluctuate, and investments in common stock in general are subject to market
risks that may cause their prices to fluctuate over time. Therefore, an
investment in the Fund may be more suitable for long-term investors who can bear
the risk of these fluctuations.

PORTFOLIO INVESTMENTS
_______________________________________________________________________________

DEBT SECURITIES. The Fund may invest in debt securities and preferred stocks.
Debt obligations of corporations in which the Fund may invest include corporate
bonds, debentures, debentures convertible into common stocks and notes. The
interest income to be derived may be considered as one factor in selecting debt
securities for investment by Warburg. The market value of debt obligations may

be expected to vary depending upon, among other factors, interest rates, the
ability of the issuer to repay principal and interest, any change in investment
rating and general economic conditions.

Up to 10% of the Fund's net asset may be invested in debt securities rated
below investment grade. A security will be deemed to be investment grade if it
is rated within the four highest grades by Moody's Investors Service, Inc.
('Moody's') or Standard & Poor's Ratings Services ('S&P') or, if unrated, is
determined to be of comparable quality by Warburg. Bonds rated in the fourth
highest grade may have speculative characteristics and changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments than is the case with higher grade
bonds. The Fund's holdings of debt securities rated below investment grade
(commonly referred to as 'junk bonds') may be rated as low as C by Moody's or D
by S&P at the time of purchase, or may be unrated securities considered to be of
equivalent quality. Securities that are rated C by Moody's comprise the lowest
rated class and can be regarded as having extremely poor prospects of ever
attaining any real investment standing. Debt rated D by S&P is in default or is
expected to default upon maturity or payment date. In selecting debt securities
for the Fund, Warburg will review and monitor the creditworthiness of each
issuer and issue, in addition to relying on ratings assigned by Moody's or S&P.
Interest rate trends and specific developments which may affect individual
issuers will also be analyzed. Subsequent to its purchase by the Fund, an issue
of securities may cease to be rated or its rating may be reduced. Neither event
will require sale of such securities, although Warburg will consider such event
in its determination of whether the Fund should continue to hold the securities.

When Warburg believes that a defensive posture is warranted, the Fund may
invest temporarily without limit in investment grade debt obligations and in
domestic and foreign money market obligations, including repurchase agreements.

MONEY MARKET OBLIGATIONS. The Fund is authorized to invest, under normal
market conditions, up to 20% of its assets in domestic and foreign short-term
(one year or less remaining to maturity) money market obligations. Money market
instruments consist of obligations issued or guaranteed by the U.S. government
or a foreign government, their agencies or instrumentalities; bank obligations
(including certificates of deposit, time deposits and bankers' acceptances of
domestic or foreign banks, domestic savings and loans and similar institutions)
that are high quality investments; commercial paper rated no lower than A-2 by
S&P or Prime-2 by Moody's or the equivalent from another major rating service
or, if unrated, of an issuer having an outstanding, unsecured debt issue then
rated within the three highest rating categories; and repurchase agreements with
respect to the foregoing.

Repurchase Agreements. The Fund may invest in repurchase agreement
transactions with member banks of the Federal Reserve System and certain non-
bank dealers. Repurchase agreements are contracts under which the buyer of a
security simultaneously commits to resell the security to the seller at an
agreed-upon price and date. Under the terms of a typical repurchase agreement,
the Fund would acquire any underlying security for a relatively short period
(usually not more than one week) subject to an obligation of the seller to
repurchase, and the Fund to resell, the obligation at an agreed-upon price and
time, thereby determining the yield during the Fund's holding period. This
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the underlying
securities will at all times be at least equal to the total amount of the
purchase obligation, including interest. The Fund bears a risk of loss in the
event that the other party to a repurchase agreement defaults on its obligations
or becomes bankrupt and the Fund is delayed or prevented from exercising its
right to dispose of the collateral securities, including the risk of a possible
decline in the value of the underlying securities during the period while the
Fund seeks to assert this right. Warburg, acting under the supervision of the
Fund's Board, monitors the creditworthiness of those bank and non-bank dealers
with which the Fund enters into repurchase agreements to evaluate this risk. A
repurchase agreement is considered to be a loan under the Investment Company Act
of 1940, as amended (the '1940 Act').

Money Market Mutual Funds. Where Warburg believes that it would be beneficial
to the Fund and appropriate considering the factors of return and liquidity, the
Fund may invest up to 5% of its assets in securities of money market mutual
funds that are unaffiliated with the Fund, Warburg or the Fund's co-
administrator, PFPC Inc. ('PFPC'). As a shareholder in any mutual fund, the Fund
will bear its ratable share of the mutual fund's expenses, including management
fees, and will remain subject to payment of the Fund's administration fees and
other expenses with respect to assets so invested.

CONVERTIBLE SECURITIES. Convertible securities in which the Fund may invest,
including both convertible debt and convertible preferred stock, may be
converted at either a stated price or stated rate into underlying shares of
common

stock. Because of this feature, convertible securities enable an investor to
benefit from increases in the market price of the underlying common stock.
Convertible securities provide higher yields than the underlying equity
securities, but generally offer lower yields than non-convertible securities of
similar quality. The value of convertible securities fluctuates in relation to
changes in interest rates like bonds and, in addition, fluctuates in relation to
the underlying common stock. Up to 10% of the Fund's net assets may be invested
in convertible securities rated below investment grade at the time of purchase
(as low as C by Moody's or D by S&P) or deemed by Warburg to be of equivalent
quality.

WARRANTS. The Fund may invest up to 15% of its total assets in warrants.
Warrants are securities that give the holder the right, but not the obligation,
to purchase equity issues of the company issuing the warrants, or a related
company, at a fixed price either on a date certain or during a set period.

RISK FACTORS AND SPECIAL CONSIDERATIONS
_______________________________________________________________________________

Investing in securities is subject to the inherent risk of fluctuations in
prices. For certain additional risks relating to the Fund's investments, see
'Portfolio Investments' beginning at page 4, and 'Certain Investment Strategies'
beginning at page 9.

NON-PUBLICLY TRADED SECURITIES; RULE 144A SECURITIES. The Fund may purchase
securities that are not registered under the Securities Act of 1933, as amended
(the 'Securities Act'), but that can be sold to 'qualified institutional buyers'
in accordance with Rule 144A under the Securities Act ('Rule 144A Securities').
An investment in Rule 144A Securities will be considered illiquid and therefore
subject to the Fund's limitation on the purchase of illiquid securities, unless
the Board determines on an ongoing basis that an adequate trading market exists
for the security. In addition to an adequate trading market, the Board will also
consider factors such as trading activity, availability of reliable price
information and other relevant information in determining whether a Rule 144A
Security is liquid. This investment practice could have the effect of increasing
the level of illiquidity in the Fund to the extent that qualified institutional
buyers become uninterested for a time in purchasing Rule 144A Securities. The
Board will carefully monitor any investments by the Fund in Rule 144A
Securities. The Board may adopt guidelines and delegate to Warburg the daily
function of determining and monitoring the liquidity of Rule 144A Securities,
although the Board will retain ultimate responsibility for any determination
regarding liquidity.
Non-publicly traded securities (including Rule 144A Securities) may involve a
high degree of business and financial risk and may result in substantial losses.
These securities may be less liquid than publicly traded securities, and the
Fund may take longer to liquidate these positions than would be the case for
publicly traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be less than
those originally paid by the Fund. Further, companies whose securities are not
publicly traded may not be subject to the disclosure and other investor
protection

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requirements applicable to companies whose securities are publicly traded. The
Fund's investment in illiquid securities is subject to the risk that should the
Fund desire to sell any of these securities when a ready buyer is not available
at a price that is deemed to be representative of their value, the value of the
Fund's net assets could be adversely affected.

BELOW INVESTMENT GRADE SECURITIES. Medium- and lower-rated debt securities
and comparable unrated securities (commonly referred to as 'junk bonds') (i)
will likely have some quality and protective characteristics that, in the
judgment of the rating organizations, are outweighed by large uncertainties or
major risk exposures to adverse conditions and (ii) are predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligation. The market values of
certain of these securities also tend to be more sensitive to individual
corporate developments and changes in economic conditions than higher-quality
securities. In addition, medium- and lower-rated securities and comparable
unrated securities generally present a higher degree of credit risk. The risk of
loss due to default by such issuers is significantly greater because medium- and
lower-rated securities and unrated securities generally are unsecured and
frequently are subordinated to the prior payment of senior indebtedness.

The market value of securities in lower ratings categories is more volatile
than that of higher quality securities. In addition, the Fund may have
difficulty disposing of certain of these securities because there may be a thin
trading market. The lack of a liquid secondary market for certain securities may
have an adverse impact on the Fund's ability to dispose of particular issues and
may make it more difficult for the Fund to obtain accurate market quotations for
purposes of valuing the Fund and calculating its net asset value.

For a complete description of rating systems of Moody's and S&P, see the
appendix to the Statement of Additional Information for the Fund.

WARRANTS. At the time of issue, the cost of a warrant is substantially less
than the cost of the underlying security itself, and price movements in the
underlying security are generally magnified in the price movements of the
warrant. This leveraging effect enables the investor to gain exposure to the
underlying security with a relatively low capital investment. This leveraging
increases an investor's risk, however, in the event of a decline in the value of
the underlying security and can result in a complete loss of the amount invested
in the warrant. In addition, the price of a warrant tends to be more volatile
than, and may not correlate exactly to, the price of the underlying security. If
the market price of the underlying security is below the exercise price of the
warrant on its expiration date, the warrant will generally expire without value.

PORTFOLIO TRANSACTIONS AND TURNOVER RATE
_______________________________________________________________________________
The Fund will attempt to purchase securities with the intent of holding them
for investment but may purchase and sell portfolio securities whenever Warburg
believes it to be in the best interests of the Fund. The Fund will not consider
portfolio turnover rate a limiting factor in making investment decisions
consistent with its investment objective and policies. It is not possible to
predict

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the Fund's portfolio turnover rates. High portfolio turnover rates (100% or
more) may result in dealer markups or underwriting commissions as well as other
transaction costs, including correspondingly higher brokerage commissions. In
addition, short-term gains realized from portfolio turnover may be taxable to
shareholders as ordinary income. See 'Dividends, Distributions and Taxes --
Taxes' below and 'Investment Policies -- Portfolio Transactions' in the
Statement of Additional Information.
All orders for transactions in securities or options on behalf of the Fund
are placed by Warburg with broker-dealers that it selects, including Counsellors
Securities Inc., the Fund's distributor ('Counsellors Securities'). The Fund may
utilize Counsellors Securities in connection with a purchase or sale of
securities when Warburg believes that the charge for the transaction does not
exceed usual and customary levels and when doing so is consistent with
guidelines adopted by the Board.

CERTAIN INVESTMENT STRATEGIES
_______________________________________________________________________________
Although there is no current intention of doing so during the coming year,
the Fund is authorized to engage in the following investment strategies: (i)
lending portfolio securities and (ii) entering into reverse repurchase
agreements. Detailed information concerning the Fund's strategies and related
risks is contained below and in the Statement of Additional Information.

FOREIGN SECURITIES. The Fund may invest up to 20% of its total assets in the
securities of foreign issuers. There are certain risks involved in investing in
securities of companies and governments of foreign nations which are in addition
to the usual risks inherent in U.S. investments. These risks include those
resulting from fluctuations in currency exchange rates, revaluation of
currencies, future adverse political and economic developments and the possible
imposition of currency exchange blockages or other foreign governmental laws or
restrictions, reduced availability of public information concerning issuers, the
lack of uniform accounting, auditing and financial reporting standards and other
regulatory practices and requirements that are often generally less rigorous
than those applied in the United States. Moreover, securities of many foreign
companies may be less liquid and their prices more volatile than those of
securities of comparable U.S. companies. Certain foreign countries are known to
experience long delays between the trade and settlement dates of securities
purchased or sold. In addition, with respect to certain foreign countries, there
is the possibility of expropriation, nationalization, confiscatory taxation and
limitations on the use or removal of funds or other assets of the Fund,
including the withholding of dividends. Foreign securities may be subject to
foreign government taxes that would reduce the net yield on such securities.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments positions. Investment in foreign securities will also result in higher
operating expenses due to the cost of converting foreign currency into U.S.
dollars, the payment of fixed brokerage commissions on foreign exchanges,

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which generally are higher than commissions on U.S. exchanges, higher valuation
and communications costs and the expense of maintaining securities with foreign
custodians.

DEPOSITARY RECEIPTS. Certain of the above risks may be involved with ADRs,
European Depositary Receipts ('EDRs') and International Depositary Receipts
('IDRs'), instruments that evidence ownership in underlying securities issued by
a foreign corporation. ADRs, EDRs and IDRs may not necessarily be denominated in
the same currency as the securities whose ownership they represent. ADRs are
typically issued by a U.S. bank or trust company. EDRs (sometimes referred to as
Continental Depositary Receipts) are issued in Europe, and IDRs (sometimes
referred to as Global Depositary Receipts) are issued outside the United States,
each typically by non-U.S. banks and trust companies.

STRATEGIC AND OTHER TRANSACTIONS. At the discretion of Warburg, the Fund may,
but is not required to, engage in a number of strategies involving options,
futures and forward currency contracts. These strategies, commonly referred to
as 'derivatives,' may be used (i) for the purpose of hedging against a decline
in value of the Fund's current or anticipated portfolio holdings, (ii) as a
substitute for purchasing or selling portfolio securities, or (iii) except with
respect to currency exchange transactions, to seek to generate income to offset
expenses or increase return. TRANSACTIONS THAT ARE NOT CONSIDERED HEDGING SHOULD
BE CONSIDERED SPECULATIVE AND MAY SERVE TO INCREASE THE FUND'S INVESTMENT RISK.
Transaction costs and any premiums associated with these strategies, and any
losses incurred, will affect the Fund's net asset value and performance.
Therefore, an investment in the Fund may involve a greater risk than an
investment in other mutual funds that do not utilize these strategies. The
Fund's use of these strategies may be limited by position and exercise limits
established by securities and commodities exchanges and other applicable
regulatory authorities.

Securities and Stock Index Options. The Fund may write covered call options
and put options and purchase put and call options on securities and stock
indexes and will realize fees (referred to as 'premiums') for granting the
rights evidenced by the options. Such options may be traded on an exchange or
may trade over-the-counter ('OTC'). The purchaser of a put option on a security
has the right to compel the purchase by the writer of the underlying security,
while the purchaser of a call option on a security has the right to purchase the
underlying security from the writer. A stock index measures the movement of a
certain group of stocks by assigning relative values to the stocks included in
the index.

The potential loss associated with purchasing an option is limited to the
premium paid, and the premium would partially offset any gains achieved from its
use. However, for an option writer the exposure to adverse price movements in
the underlying security or index is potentially unlimited during the exercise
period. Writing securities options may result in substantial losses to the Fund,
force the sale or purchase of portfolio securities at inopportune times or at
less

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advantageous prices, limit the amount of appreciation the Fund could realize on
its investments or require the Fund to hold securities it would otherwise sell.

Futures Contracts and Related Options. The Fund may enter into foreign
currency, interest rate and stock index futures contracts and purchase and write
(sell) related options that are traded on an exchange designated by the
Commodity Futures Trading Commission (the 'CFTC') or, if consistent with CFTC
regulations, on foreign exchanges. These futures contracts are standardized
contracts for the future delivery of an interest rate sensitive security or, in
the case of index futures contracts, are settled in cash with reference to a
specified multiplier times the change in the specified interest rate or index.
An option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract.

Aggregate initial margin and premiums required to establish positions other
than those considered by the CFTC to be 'bona fide hedging' will not exceed 5%
of the Fund's net asset value, after taking into account unrealized profits and
unrealized losses on any such contracts. Although the Fund is limited in the
amount of assets that may be invested in futures transactions, there is no
overall limit on the percentage of Fund assets that may be at risk with respect
to futures activities.

Currency Exchange Transactions. The Fund will conduct its currency exchange
transactions either (i) on a spot (i.e., cash) basis at the rate prevailing in
the currency exchange market, (ii) through entering into futures contracts or
options on futures contracts (as described above), (iii) through entering into
forward contracts to purchase or sell currency or (iv) by purchasing
exchange-traded currency options. A forward currency contract involves an
obligation to purchase or sell a specific currency at a future date at a price
set at the time of the contract. An option on a foreign currency operates
similarly to an option on a security. Risks associated with currency forward
contracts and purchasing currency options are similar to those described in this
Prospectus for futures contracts and securities and stock index options. In
addition, the use of currency transactions could result in losses from the
imposition of foreign exchange controls, suspension of settlement or other
governmental actions or unexpected events.

Hedging Considerations. A hedge is designed to offset a loss on a portfolio
position with a gain in the hedge position; at the same time, however, a
properly correlated hedge will result in a gain in the portfolio position being
offset by a loss in the hedge position. As a result, the use of options and
futures contracts and currency exchange transactions for hedging purposes could
limit any potential gain from an increase in value of the position hedged. In
addition, the movement in the portfolio position hedged may not be of the same
magnitude as movement in the hedge. The Fund will engage in hedging transactions
only when deemed advisable by Warburg, and successful use of hedging
transactions will depend on Warburg's ability to correctly predict movements in
the hedge and the hedged position and the correlation between them, which could
prove to

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<PAGE>
be inaccurate. Even a well-conceived hedge may be unsuccessful to some degree
because of unexpected market behavior or trends.
Additional Considerations. To the extent that the Fund engages in the
strategies described above, the Fund may experience losses greater than if these
strategies had not been utilized. In addition to the risks described above,
these instruments may be illiquid and/or subject to trading limits, and the Fund
may be unable to close out an option or futures position without incurring
substantial losses, if at all. The Fund is also subject to the risk of a default
by a counterparty to an off-exchange transaction.

Asset Coverage. The Fund will comply with applicable regulatory requirements
designed to eliminate any potential for leverage with respect to options written
by the Fund on securities and indexes; currency, interest rate and stock index
futures contracts and options on these futures contracts; and forward currency
contracts. The use of these strategies may require that the Fund maintain cash
or liquid securities in a segregated account with its custodian or a designated
sub-custodian to the extent the Fund's obligations with respect to these
strategies are not otherwise 'covered' through ownership of the underlying
security or financial instrument or by other portfolio positions or by other
means consistent with applicable regulatory policies. Segregated assets cannot
be sold or transferred unless equivalent assets are substituted in their place
or it is no longer necessary to segregate them. As a result, there is a
possibility that segregation of a large percentage of the Fund's assets could
impede portfolio management or the Fund's ability to meet redemption requests or
other current obligations.

SHORT SALES AGAINST THE BOX. The Fund may enter into a short sale of
securities such that when the short position is open the Fund owns an equal
amount of the securities sold short or owns preferred stocks or debt securities,
convertible or exchangeable without payment of further consideration, into an
equal number of securities sold short. This kind of short sale, which is
referred to as one 'against the box,' may be entered into by the Fund to, for
example, lock in a sale price for a security the Fund does not wish to sell
immediately. The Fund will deposit, in a segregated account with its custodian
or a qualified subcustodian, the securities sold short or convertible or
exchangeable preferred stocks or debt securities in connection with short sales
against the box. Not more than 10% of the Fund's net assets (taken at current
value) may be held as collateral for short sales against the box at any one
time.

WHEN-ISSUED SECURITIES AND DELAYED-DELIVERY TRANSACTIONS. The Fund may
utilize up to 20% of its total assets to purchase securities on a when-issued or
delayed-delivery basis. In these transactions, payment for and delivery of the
securities occur beyond the regular settlement dates, normally within 30-45 days
after the transaction. The payment obligation and the interest rate that will be
received in when-issued and delayed-delivery transactions are fixed at the time
the buyer enters into the commitment. Due to fluctuations in the value of
securities purchased on a when-issued or delayed-delivery basis, the yields
obtained on such securities may be higher or lower than the yields available in

the market on the dates when the investments are actually delivered to the
buyers. When-issued securities may include securities purchased on a 'when, as
and if issued' basis, under which the issuance of the security depends on the
occurrence of a subsequent event, such as approval of a merger, corporate
reorganization or debt restructuring. Each Fund is required to segregate assets
equal to the amount of its when-issued and delayed-delivery purchase
commitments.

REITS. The Fund may invest up to 15% of its total assets in real estate
investment trusts ('REITs'), which are pooled investment vehicles that invest
primarily in income-producing real estate or real estate related loans or
interests. Like regulated investment companies such as the Fund, REITs are not
taxed on income distributed to shareholders provided they comply with several
requirements of the Internal Revenue Code of 1986, as amended (the 'Code'). By
investing in a REIT, the Fund will indirectly bear its proportionate share of
any expenses paid by the REIT in addition to the expenses of the Fund.

INVESTMENT GUIDELINES
_______________________________________________________________________________

The Fund may invest up to 15% of its net assets in securities with
contractual or other restrictions on resale and other instruments that are not
readily marketable ('illiquid securities'), including (i) securities issued as
part of a privately negotiated transaction between an issuer and one or more
purchasers; (ii) repurchase agreements with maturities greater than seven days;
(iii) time deposits maturing in more than seven calendar days; and (iv) certain
Rule 144A Securities. The Fund may borrow from banks for temporary or emergency
purposes, such as meeting anticipated redemption requests, provided that reverse
repurchase agreements and any other borrowing by the Fund may not exceed 30% of
its total assets at the time of borrowing. The Fund may also pledge its assets
in connection with borrowings up to 125% of the amount borrowed. Whenever
borrowings (including reverse repurchase agreements) exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional investments
(including rollovers). Except for the limitations on borrowing, the investment
guidelines set forth in this paragraph may be changed at any time without
shareholder consent by vote of the Board of each Fund, subject to the
limitations contained in the 1940 Act. A complete list of investment
restrictions that the Fund has adopted identifying additional restrictions that
cannot be changed without the approval of the majority of the Fund's outstanding
shares is contained in the Statement of Additional Information.

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MANAGEMENT OF THE FUND
_______________________________________________________________________________
INVESTMENT ADVISER. The Fund employs Warburg as its investment adviser.
Warburg, subject to the control of the Fund's officers and the Board, manages
the investment and reinvestment of the assets of the Fund in accordance with the
Fund's investment objectives and stated investment policies. Warburg makes
investment decisions for the Fund and places orders to purchase or sell
securities on behalf of the Fund. Warburg also employs a support staff of
management personnel to provide services to the Fund and furnishes the Fund with
office space, furnishings and equipment.
For the services provided by Warburg, the Fund pays Warburg a fee calculated
at an annual rate of .75% of the Fund's average daily net assets. Warburg and
the Fund's co-administrators may voluntarily waive a portion of their fees from
time to time and temporarily limit the expenses to be paid by the Fund.

PORTFOLIO MANAGERS. Brian S. Posner, a Managing Director of Warburg, has been
the Portfolio Manager of the Fund since January 9, 1997. Prior to joining
Warburg in January 1997, Mr. Posner was an employee of Fidelity Investments
('Fidelity') from 1987 until December 1996. He was the vice president and
portfolio manager of the Fidelity Equity-Income II Fund (1992-December 1996);
the portfolio manager of the Fidelity Value Fund (1990-1992); assistant
portfolio manager of the Fidelity Equity-Income Fund (1989-1990); assistant
portfolio manager of the Fidelity Capital Appreciation Fund (1989); portfolio
manager of the Fidelity Select Property-Casualty Insurance Portfolio (1987-1990)
and an equity analyst (1987). Prior to joining Fidelity, Mr. Posner was a
research associate at John Nuveen and Co. and an analyst at Feldman Securities
Corp. in Chicago.

CO-ADMINISTRATORS. The Fund employs Counsellors Funds Service, Inc.
('Counsellors Service'), a wholly owned subsidiary of Warburg, as a co-
administrator. As co-administrator, Counsellors Service provides shareholder
liaison services to the Fund including responding to shareholder inquiries and
providing information on shareholder investments. Counsellors Service also
performs a variety of other services, including furnishing certain executive and
administrative services, acting as liaison between the Fund and its various
service providers, furnishing corporate secretarial services, which include
preparing materials for meetings of the Board, preparing proxy statements and
annual, semiannual and quarterly reports, assisting in the preparation of tax

returns and monitoring and developing compliance procedures for the Funds. As
compensation, the Fund pays Counsellors Service a fee calculated at an annual
rate of .05% of the Fund's first $125 million of average daily net assets and
.10% of average daily net assets over $125 million.

The Fund employs PFPC, an indirect, wholly owned subsidiary of PNC Bank
Corp., as a co-administrator. As a co-administrator, PFPC calculates the Fund's
net asset value, provides all accounting services for the Fund and assists in
related aspects of the Fund's operations. As compensation, the Fund pays PFPC a
fee calculated at an annual rate of .15% of the Fund's first $1 billion of
average daily net assets and .05% of average daily net assets over $1 billion.
PFPC has its principal offices at 400 Bellevue Parkway, Wilmington, Delaware
19809.

CUSTODIANS. PNC Bank, National Association ('PNC') serves as custodian of the
U.S. assets of the Fund and State Street Bank and Trust Company ('State Street')
serves as custodian of the Fund's non-U.S. assets. Like PFPC, PNC is a
subsidiary of PNC Bank Corp. and its principal business address is 1600 Market
Street, Philadelphia, Pennsylvania 19103. State Street's principal business
address is 225 Franklin Street, Boston, Massachusetts 02110.

TRANSFER AGENT. State Street also serves as shareholder servicing agent,
transfer agent and dividend disbursing agent for the Fund. State Street has
delegated to Boston Financial Data Services, Inc., a 50% owned subsidiary
('BFDS'), responsibility for most shareholder servicing functions. BFDS's
principal business address is 2 Heritage Drive, North Quincy, Massachusetts
02171.
DISTRIBUTOR. Counsellors Securities serves as distributor of the shares of
the Fund. Counsellors Securities is a wholly owned subsidiary of Warburg and is
located at 466 Lexington Avenue, New York, New York 10017-3147. No compensation
is payable by the Advisor Shares to Counsellors Securities for distribution
services.

Warburg or its affiliates may, at their own expense, provide promotional
incentives for qualified recipients who support the sale of shares of a Fund
consisting of securities dealers who have sold Fund shares or others, including
banks and other financial institutions, under special arrangements. Incentives
may include opportunities to attend business meetings, conferences, sales or
training programs for recipients' employees or clients and other programs or
events and may also include opportunities to participate in advertising or sales
campaigns and/or shareholder services and programs regarding one or more Warburg
Pincus Fund. Warburg or its affiliates may pay for travel, meals and lodging in
connection with these promotional activities. In some instances, these
incentives may be offered only to certain institutions whose representatives
provide services in connection with the sale or expected sale of significant
amounts of the Fund's shares.

DIRECTORS AND OFFICERS. The officers of the Fund manage its day-to-day
operations and are directly responsible to the Board. The Board sets broad
policies for the Fund and chooses its officers. A list of the Directors and
officers of the Fund and a brief statement of their present positions and
principal

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occupations during the past five years is set forth in the Statement of
Additional Information.

HOW TO PURCHASE SHARES
_______________________________________________________________________________
Individual investors may only purchase Warburg Pincus Advisor Fund shares
through Institutions. The Fund reserves the right to make Advisor Shares
available to other investors in the future. References in this Prospectus to
shareholders or investors are generally to Institutions as record holders of the
Advisor Shares.
Each Institution separately determines the rules applicable to its customers
investing in the Fund, including minimum initial and subsequent investment
requirements and the procedures to be followed to effect purchases, redemptions
and exchanges of Advisor Shares. There is no minimum amount of initial or
subsequent purchases of Advisor Shares imposed on Institutions, although the
Fund reserves the right to impose minimums in the future.
Orders for the purchase of Advisor Shares are placed with an Institution by
its customers. The Institution is responsible for the prompt transmission of the
order to the Fund or its agent.
Institutions may purchase Advisor Shares by telephoning the Fund and sending
payment by wire. After telephoning (800) 369-2728 for instructions, an
Institution should then wire federal funds to Counsellors Securities Inc. using
the following wire address:

State Street Bank and Trust Co.
225 Franklin St.
Boston, MA 02101
ABA# 0110 000 28
Attn: Mutual Funds/Custody Dept.
Warburg Pincus Advisor Growth & Income Fund
DDA# 9904-649-2
[Shareowner name]
[Shareowner account number]

Orders by wire will not be accepted until a completed account application has
been received in proper form, and an account number has been established. If a
telephone order is received by the close of regular trading on the New York
Stock Exchange, Inc. (the 'NYSE') (currently 4:00 p.m., Eastern time) and
payment by wire is received on the same day in proper form in accordance with
instructions set forth above, the shares will be priced according to the net
asset value of the Fund on that day and are entitled to dividends and
distributions beginning on that day. If payment by wire is received in proper
form by the close of the NYSE without a prior telephone order, the purchase will
be priced according to the net asset value of the Fund on that day and is
entitled to dividends and distributions beginning on that day. However, if a
wire in proper form that is not preceded by a telephone order is received after
the close of regular trading on the NYSE, the payment will be held uninvested
until the order is effected at the close of business on the next

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business day. Payment for orders that are not accepted will be returned after
prompt inquiry. Certain organizations or Institutions that have entered into
agreements with the Fund or its agent may enter confirmed purchase orders on
behalf of customers, with payment to follow no later than three business days
following the day the order is effected. If payment is not received by such
time, the organization could be held liable for resulting fees or losses.
After an investor has made his initial investment, additional shares may be
purchased at any time by mail or by wire in the manner outlined above. Wire
payments for initial and subsequent investments should be preceded by an order
placed with the Fund or its agent and should clearly indicate the investor's
account number. In the interest of economy and convenience, physical
certificates representing shares in the Fund are not normally issued.
The Fund understands that some broker-dealers (other than Counsellors
Securities), financial institutions, securities dealers and other industry
professionals may impose certain conditions on their clients or customers that
invest in the Fund, which are in addition to or different than those described
in this Prospectus, and may charge their clients or customers direct fees.
Certain features of the Fund, such as the initial and subsequent investment
minimums, redemption fees and certain trading restrictions, may be modified or
waived in these programs, and administrative charges may be imposed for the
services rendered. Therefore, a client or customer should contact the
organization acting on his behalf concerning the fees (if any) charged in
connection with a purchase or redemption of Fund shares and should read this
Prospectus in light of the terms governing his account with the organization.
GENERAL. The Fund reserves the right to reject any specific purchase order.
The Fund may discontinue sales of its shares if management believes that a
substantial further increase in assets may adversely affect the Fund's ability
to achieve its investment objective. In such event, however, it is anticipated
that existing shareholders would be permitted to continue to authorize
investment in the Fund and to reinvest any dividends or capital gains
distributions.

HOW TO REDEEM AND EXCHANGE SHARES
_______________________________________________________________________________
REDEMPTION OF SHARES. An investor may redeem (sell) shares on any day that
the Fund's net asset value is calculated (see 'Net Asset Value' below). Requests
for the redemption (or exchange) of Advisor Shares are placed with an
Institution by its customers, which is then responsible for the prompt
transmission of the request to the Fund or its agent.
Institutions may redeem Advisor Shares by calling Warburg Pincus Advisor
Funds at (800) 369-2728 between 9:00 a.m. and 4:00 p.m. (Eastern time) on any
business day. An investor making a telephone withdrawal should state (i) the
name of the Fund, (ii) the account number of the Fund, (iii) the name of the
investor(s) appearing on the Fund's records, (iv) the amount to be withdrawn and
(v) the name of the person requesting the redemption.

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After receipt of the redemption request the redemption proceeds will be wired
to the investor's bank as indicated in the account application previously filled
out by the investor. The Fund does not currently impose a service charge for
effecting wire transfers but reserves the right to do so in the future. During
periods of significant economic or market change, telephone redemptions may be
difficult to implement. If an investor is unable to contact Warburg Pincus
Advisor Funds by telephone, an investor may deliver the redemption request to
Warburg Pincus Advisor Funds by mail at Warburg Pincus Advisor Funds, P.O. Box
9030, Boston, Massachusetts 02205-9030.
If a redemption order is received by the Fund or its agent prior to the close
of regular trading on the NYSE, the redemption order will be effected at the net
asset value per share as determined on that day. If a redemption order is
received after the close of regular trading on the NYSE, the redemption order
will be effected at the net asset value as next determined. Except as noted
above, redemption proceeds will normally be wired to an investor on the next
business day following the date a redemption order is effected. If, however, in
the judgment of Warburg, immediate payment would adversely affect the Fund, the
Fund reserves the right to pay the redemption proceeds within seven days after
the redemption order is effected. Furthermore, the Fund may suspend the right of
redemption or postpone the date of payment upon redemption (as well as suspend
or postpone the recordation of an exchange of shares) for such periods as are
permitted under the 1940 Act.
The proceeds paid upon redemption may be more or less than the amount
invested, depending upon a share's net asset value at the time of redemption. If
an investor redeems all the shares in his account, all dividends and
distributions declared up to and including the date of redemption are paid along
with the proceeds of the redemption.
EXCHANGE OF SHARES. An Institution may exchange Advisor Shares of the Fund
for Advisor Shares of the other Warburg Pincus Advisor Funds at their respective
net asset values. Exchanges may be effected in the manner described under
'Redemption of Shares' above. If an exchange request is received by Warburg
Pincus Advisor Funds or its agent prior to 4:00 p.m. (Eastern time), the
exchange will be made at each fund's net asset value determined at the end of
that business day. Exchanges may be effected without a sales charge. The
exchange privilege may be modified or terminated at any time upon 60 days'
notice to shareholders.
The exchange privilege is available to shareholders residing in any state in
which the Advisor Shares being acquired may legally be sold. When an investor
effects an exchange of shares, the exchange is treated for federal income tax
purposes as a redemption. Therefore, the investor may realize a taxable gain or
loss in connection with the exchange. Investors wishing to exchange Advisor
Shares of the Fund for shares in another Warburg Pincus Advisor Fund should
review the prospectus of the other fund prior to making an exchange. For further
information regarding the exchange privilege or to obtain a current prospectus
for another Warburg Pincus

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Advisor Fund, an investor should contact Warburg Pincus Advisor Funds at (800)
369-2728.

DIVIDENDS, DISTRIBUTIONS AND TAXES
_______________________________________________________________________________
DIVIDENDS AND DISTRIBUTIONS. The Fund calculates its dividends from net
investment income. Net investment income includes interest accrued and dividends
earned on the Fund's portfolio securities for the applicable period (which
includes amortization of market discounts) less amortization of market premiums
and applicable expenses. The Fund declares and pays its dividends from its net
investment income quarterly. The Fund declares distributions of its net realized
short-term and long-term capital gains annually and pays them in the calendar
year in which they are declared, generally in November or December. Net
investment income earned on weekends and when the NYSE is not open will be
computed as of the next business day. Unless an investor instructs the Fund to
pay dividends or distributions in cash, dividends and distributions will
automatically be reinvested in additional Advisor Shares of the Fund at net
asset value. The election to receive dividends in cash may be made on the
account application or, subsequently, by writing to Warburg Pincus Funds at the
address set forth under 'How to Open an Account' or by calling Warburg Pincus
Funds at (800) 369-2728.
The Fund may be required to withhold for U.S. federal income taxes 31% of all
distributions payable to shareholders who fail to provide the Fund with their
correct taxpayer identification number or to make required certifications, or
who have been notified by the U.S. Internal Revenue Service that they are
subject to backup withholding.

TAXES. The Fund intends to qualify each year as a 'regulated investment
company' within the meaning of the Code. As a regulated investment company, the
Fund will be subject to a 4% non-deductible excise tax measured with respect to
certain undistributed amounts of ordinary income and capital gain. The Fund
expects to pay such dividends and to make such distributions as are necessary to
avoid the application of this tax.

Dividends paid from net investment income and distributions of net realized
short-term capital gains are taxable to investors as ordinary income, and
distributions derived from net realized long-term capital gains are taxable to
investors as long-term capital gains, in each case regardless of how long the
shareholder has held Fund shares and whether received in cash or reinvested in
additional Fund shares. The Fund will provide information relating to that
portion of a 'capital gain dividend' that may be treated by investors as
eligible for the reduced capital gains rate for capital assets held for more
than 18 months. As a general rule, an investor's gain or loss on a sale or
redemption of his Fund shares will be long-term capital gain or loss if he has
held his shares for more than one year and will be short-term capital gain or
loss if he has held his shares for one year or less. However, any loss realized
upon the sale or redemption of shares within six months from the

date of their purchase will be treated as a long-term capital loss to the extent
of any amounts treated as distributions of long-term capital gain during such
six-month period with respect to such shares. Investors may be proportionately
liable for taxes on income and gains of the Fund, but investor's not subject to
tax on their income will not be required to pay tax on amounts distributed to
them. The Fund's investment activities, including short sales of securities,
will not result in unrelated business taxable income to a tax-exempt investor.
The Fund will designate that portion of its dividends that will qualify for the
federal dividends received deduction for corporations. The Fund's investments in
foreign securities may subject it to certain withholding and other taxes imposed
by foreign countries with respect to dividends, interest, capital gains and
other income. It is not expected that the payment of such taxes by the Fund will
give rise to a direct credit or deduction available to the Fund's shareholders.

GENERAL. Statements as to the tax status of each investor's dividends and
distributions are mailed annually. Each investor will also receive, if
applicable, various written notices after the close of the Fund's prior taxable
year with respect to certain dividends and distributions that were paid (or that
are treated as having been paid) by the Fund during the Fund's prior taxable
year. Investors should consult their own tax advisers with specific reference to
their own tax situations, including their state and local tax liabilities.

NET ASSET VALUE
_______________________________________________________________________________

The Fund's net asset value per share is calculated as of the close of regular
trading on the NYSE (currently 4:00 p.m., Eastern time) on each business day,
Monday through Friday, except on days when the NYSE is closed. The NYSE is
currently scheduled to be closed on New Year's Day, Dr. Martin Luther King, Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day, and on the preceding Friday or subsequent
Monday when one of these holidays falls on a Saturday or Sunday, respectively.
The net asset value per share of the Fund generally changes each day.

The net asset value per Advisor Share of the Fund is computed by adding the
Advisor Shares' pro rata share of the value of the Fund's assets, deducting the
Advisor Shares' pro rata share of the Fund's liabilities and the liabilities
specifically allocated to Advisor Shares and then dividing the result by the
total number of outstanding Advisor Shares.
Securities listed on a U.S. securities exchange (including securities traded
through the NASDAQ National Market System) or foreign securities exchange or
traded in an over-the-counter market will be valued at the most recent sale
price when the valuation is made. Options and futures contracts will be valued
similarly. Debt obligations that mature in 60 days or less from the valuation
date are valued on the basis of amortized cost, unless the Board determines that
using this valuation method would not reflect the investments' value.
Securities, options and futures contracts for which market

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<PAGE>
quotations are not readily available and other assets will be valued at their
fair value as determined in good faith pursuant to consistently applied
procedures established by the Board. Further information regarding valuation
policies is contained in the Statement of Additional Information.

PERFORMANCE
_______________________________________________________________________________
The Fund quotes the performance of Advisor Shares separately from Common
Shares. The net asset value of the Advisor Shares is listed in The Wall Street
Journal each business day under the heading 'Warburg Pincus Advisor Funds.' From
time to time, the Fund may advertise yield and average annual total return of
its Advisor Shares over various periods of time. The yield refers to the net
investment income generated by the Advisor Shares over a specified thirty-day
period, which is then annualized. These total return figures show the average
percentage change in value of an investment in the Advisor Shares from the
beginning of the measuring period to the end of the measuring period. The
figures reflect changes in the price of the Advisor Shares assuming that any
income dividends and/or capital gain distributions made by the Fund during the
period were reinvested in Advisor Shares of the Fund. Total return will be shown
for recent one-, five- and ten-year periods, and may be shown for other periods
as well (such as from commencement of the Fund's operations or on a
year-by-year, quarterly or current year-to-date basis). Performance quotations
of the Fund will include performance of a predecessor fund.
When considering average total return figures for periods longer than one
year, it is important to note that the annual total return for one year in the
period might have been greater or less than the average for the entire period.
When considering total return figures for periods shorter than one year,
investors should bear in mind that the Fund seeks long-term appreciation and
that such return may not be representative of the Fund's return over a longer
market cycle. The Fund may also advertise aggregate total return figures of
Advisor Shares for various periods, representing the cumulative change in value
of an investment in the Advisor Shares for the specific period (again reflecting
changes in share prices and assuming reinvestment of dividends and
distributions). Aggregate and average total returns may be shown by means of
schedules, charts or graphs and may indicate various components of total return
(i.e., change in value of initial investment, income dividends and capital gain
distributions).
Investors should note that total return figures are based on historical
earnings and are not intended to indicate future performance. The Statement of
Additional Information describes the method used to determine the total return.
Current total return figures may be obtained by calling Warburg Pincus Advisor
Funds at (800) 369-2728.
In reports or other communications to investors or in advertising material,
the Fund may describe general economic and market conditions affecting the Fund.
The Fund may compare its performance (i) with that of other mutual funds as
listed in the rankings prepared by Lipper Analytical Services, Inc. or

similar investment services that monitor the performance of mutual funds or as
set forth in the publications listed below; (ii) with the S&P 500 Index; or
(iii) with other appropriate indexes of investment securities or with data
developed by Warburg derived from such indexes. The Fund may include evaluations
of the Fund published by nationally recognized ranking services and by financial
publications that are nationally recognized, such as Barron's, Business Week,
Financial Times, Forbes, Fortune, Inc., Institutional Investor, Investor's
Business Daily, Money, Morningstar, Inc., Mutual Fund Magazine, Smart Money and
The Wall Street Journal. Morningstar, Inc. rates funds in broad categories based
on risk/reward analyses over various time periods. In addition, the Fund may
from time to time compare its expense ratio to that of investment companies with
similar objectives and policies, based on data generated by Lipper Analytical
Services, Inc. or similar investment services that monitor mutual funds.

In reports or other communications to investors or in advertising, the Fund
may discuss relevant economic and market conditions affecting the Fund. In
addition, the Fund and its portfolio managers may render updates of Fund
investment activity, which may include, among other things, discussion or
quantitative statistical or comparative analysis of portfolio composition and
significant portfolio holdings, including analyses of holdings by sector,
industry, country or geographic region, credit quality and other
characteristics. The Fund may also describe the general biography, work
experience and/or investment philosophy or style of the portfolio managers of
the Fund and may include quotations attributable to the portfolio managers
describing the Fund's investments objectives, approaches taken in managing the
Fund's investments or the research methodology underlying stock selection. The
Fund may also discuss various measures of risk, including those based on
statistical or econometric analyses, the continuum of risk and return relating
to different investments and the potential impact of foreign stocks on a
portfolio otherwise composed of domestic securities.

GENERAL INFORMATION
_______________________________________________________________________________

ORGANIZATION. The Fund was incorporated on January 29, 1996 under the laws of
the State of Maryland under the name 'Warburg, Pincus Growth & Income Fund,
Inc.' On May 3, 1996 the Fund acquired all of the assets and liabilities of the
corresponding investment portfolio of the RBB Fund with a similar name.

The charter of the Fund authorizes the Board to issue three billion full and
fractional shares of capital stock, $.001 par value per share, of which one
billion shares are designated Common Shares and two billion shares are
designated Advisor Shares. Under the Fund's charter documents, the Board has the
power to classify or reclassify any unissued shares of the Fund into one or more
additional classes by setting or changing in any one or more respects their
relative rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption. The Board
may similarly classify or reclassify any class of its shares into one or more

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<PAGE>
series and, without shareholder approval, may increase the number of authorized
shares of the Fund.
MULTI-CLASS STRUCTURE. The Fund offers a separate class of shares, the Common
Shares, directly to individuals pursuant to a separate prospectus. Shares of
each class represent equal pro rata interests in the Fund and accrue dividends
and calculate net asset value and performance quotations in the same manner,
except that Advisor Shares bear fees payable by the Fund to Institutions for
services they provide to the beneficial owners of such shares and enjoy certain
exclusive voting rights on matters relating to these fees. Because of the higher
fees paid by the Advisor Shares, the total return on such shares can be expected
to be lower than the total return on Common Shares. Investors may obtain
information concerning the Common Shares from their investment professional or
by calling Counsellors Securities at (800) 927-2874.
VOTING RIGHTS. Investors in the Fund are entitled to one vote for each full
share held and fractional votes for fractional shares held. Shareholders of the
Fund will vote in the aggregate except where otherwise required by law and
except that each class will vote separately on certain matters pertaining to its
distribution and shareholder servicing arrangements. There will normally be no
meetings of investors for the purpose of electing members of the Board unless
and until such time as less than a majority of the members holding office have
been elected by investors. Any member of the Board may be removed from office
upon the vote of shareholders holding at least a majority of the Fund's
outstanding shares, at a meeting called for that purpose. A meeting will be
called for the purpose of voting on the removal of a Board member at the written
request of holders of 10% of the outstanding shares of the Fund.

SHAREHOLDER COMMUNICATIONS. Each investor will receive a quarterly statement
of his account, as well as a statement of his account after any transaction that
affects his share balance or share registration (other than the reinvestment of
dividends or distributions or investment made through the Automatic Investment
Program). The Fund will also send to its investors a semiannual report and an
audited annual report, each of which includes a list of the investment
securities held by the Fund and a statement of the performance of the Fund.
Periodic listings of the investment securities held by the Fund, as well as
certain statistical characteristics of the Fund, may be obtained by calling
Warburg Pincus Advisor Funds at (800) 369-2728. Each Institution that is the
record owner of Advisor Shares on behalf of its customers will send a statement
to those customers periodically showing their indirect interest in Advisor
Shares, as well as providing other information about the Fund. See 'Shareholder
Servicing.'

The common share prospectuses of certain other Warburg Pincus Funds are
combined with the Fund's Common Share Prospectus. Each fund offers only its own
shares, yet it is possible that the Fund may become liable for a

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<PAGE>
misstatement, inaccuracy or omission in that prospectus with regard to another
fund.

SHAREHOLDER SERVICING
_______________________________________________________________________________

The Fund is authorized to offer Advisor Shares exclusively through
Institutions whose clients or customers (or participants in the case of
retirement plans) ('Customers') are owners of Advisor Shares. Either those
Institutions or companies providing certain services to Customers (together,
'Service Organizations') will enter into agreements ('Agreements') with the Fund
and/or Counsellors Securities pursuant to a Distribution Plan as described
below. Such entities may provide certain distribution, shareholder servicing,
administrative and/or accounting services for their Customers. Distribution
services would be marketing or other services in connection with the promotion
and sale of Advisor Shares. Shareholder services that may be provided include
responding to Customer inquiries, providing information on Customer investments
and providing other shareholder liaison services. Administrative and accounting
services related to the sale of Advisor Shares may include (i) aggregating and
processing purchase and redemption requests from Customers and placing net
purchase and redemption orders with the Fund's transfer agent, (ii) processing
dividend payments from the Fund on behalf of Customers and (iii) providing
sub-accounting related to the sale of Advisor Shares beneficially owned by
Customers or the information to the Fund necessary for sub-accounting. The Board
has approved a Distribution Plan (the 'Plan') pursuant to Rule 12b-1 under the
1940 Act under which each participating Service Organization will be paid, out
of the assets of the Fund (either directly or by Counsellors Securities on
behalf of the Fund), a negotiated fee on an annual basis not to exceed .75% (up
to a .25% annual service fee and a .50% annual distribution and/or
administration services fees) of the value of the average daily net assets of
its Customers invested in Advisor Shares. The current 12b-1 fee is .50% per
annum. The Board evaluates the appropriateness of the Plan on a continuing basis
and in doing so considers all relevant factors.

To offset start-up costs and expenses associated with certain qualified
retirement plans making Advisor Shares available to plan participants,
Counsellors Securities pays CIGNA Financial Advisors, Inc., a registered
broker-dealer which is the broker of record for Connecticut General Life
Insurance Company, a one-time fee of .25% of the average aggregate account
balances of plan participants during the first year of implementation.
Warburg, Counsellors Securities or their affiliates may, from time to time,
at their own expense, provide compensation to Service Organizations. To the
extent they do so, such compensation does not represent an additional expense to
the Fund or its shareholders. In addition, Warburg, Counsellors Securities or
their affiliates may, from time to time, at their own expense, pay certain Fund
transfer agent fees and expenses related to accounts of Customers. A Service
Organization may directly or indirectly use a portion of the fees paid pursuant
to the Plan to compensate the Fund's custodian or transfer agent for costs
related to accounts of Customers.

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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION OR THE FUND'S OFFICIAL SALES LITERATURE IN
CONNECTION WITH THE OFFERING OF SHARES OF THE FUND, AND IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF THE
ADVISOR SHARES IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFER MAY
NOT LAWFULLY BE MADE.

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[THIS PAGE INTENTIONALLY LEFT BLANK]

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TABLE OF CONTENTS

<TABLE>
<S> <C>
The Fund's Expenses..................................................... 2
Financial Highlights.................................................... 3
Investment Objectives and Policies...................................... 4
Portfolio Investments................................................... 4
Risk Factors and Special Considerations................................. 7
Portfolio Transactions and Turnover Rate................................ 8
Certain Investment Strategies........................................... 9
Investment Guidelines................................................... 13
Management of the Fund.................................................. 14
How to Purchase Shares.................................................. 16
How to Redeem and Exchange Shares....................................... 17
Dividends, Distributions and Taxes...................................... 19
Net Asset Value......................................................... 20
Performance............................................................. 21
General Information..................................................... 22
Shareholder Servicing................................................... 24
</TABLE>

[Logo]

P.O. BOX 9030, BOSTON, MA 02205-9030
800-369-2728
WWW.WARBURG.COM
COUNSELLORS SECURITIES INC., DISTRIBUTOR. ADBAL-1-1097

Subject to completion, dated August 26, 1997

STATEMENT OF ADDITIONAL INFORMATION

October __, 1997

WARBURG PINCUS GROWTH & INCOME FUND

P.O. Box 9030, Boston, Massachusetts 02205-9030

For information, call (800) WARBURG

Contents

Page

Investment Objectives...................................................... 2

Investment Policies........................................................ 2
Management of the Fund..................................................... 25
Additional Purchase and Redemption Information............................. 32
Exchange Privilege......................................................... 32
Additional Information Concerning Taxes.................................... 34
Determination of Performance............................................... 39
Independent Accountants and Counsel........................................ 40
Miscellaneous.............................................................. 42
Financial Statements....................................................... 42
Appendix - Description of Ratings.......................................... A-1

This Statement of Additional Information is meant to be read in
conjunction with the combined Prospectus for the Common Shares of Warburg Pincus
Growth & Income Fund (the "Fund") and Warburg Pincus Balanced Fund and with
the Prospectus for the Advisor Shares of the Fund, each dated October __,
1997, as amended or supplemented from time to time, and is incorporated by
reference in its entirety into those Prospectuses. Because this Statement of
Additional Information is not itself a prospectus, no investment in shares of
the Fund should be made solely upon the information contained herein. Copies of
the Fund's Prospectuses and information regarding the Fund's current performance
may be obtained by calling the Fund at (800) 927-2874. Information regarding the
status of shareholder accounts may be obtained by calling the Fund at (800)
927-2874 or by writing to the Fund, P.O. Box 9030, Boston, Massachusetts
02205-9030.

INVESTMENT OBJECTIVES

The investment objectives of the Fund are long-term growth of
capital and income and a reasonable current return.

INVESTMENT POLICIES

The following policies supplement the descriptions of the Fund's
investment objective and policies in the Prospectuses.

Options, Futures and Currency Exchange Transactions

Securities Options. The Fund may write covered call options and
put options on securities, and may purchase such options, that are traded on
exchanges, as well as over-the-counter ("OTC").

The Fund realizes fees (referred to as "premiums") for granting
the rights evidenced by the options it has written. A put option embodies the
right of its purchaser to compel the writer of the option to purchase from the
option holder an underlying security at a specified price for a specified time
period or at a specified time. In contrast, a call option embodies the right of
its purchaser to compel the writer of the option to sell to the option holder an
underlying security at a specified price for a specified time period or at a
specified time.

The principal reason for writing covered options on a security is
to attempt to realize, through the receipt of premiums, a greater return than
would be realized on the securities alone. In return for a premium, the Fund as
the writer of a covered call option forfeits the right to any appreciation in
the value of the underlying security above the strike price for the life of the
option (or until a closing purchase transaction can be effected). Nevertheless,
the Fund as a put or call writer retains the risk of a decline in the price of
the underlying security. The size of the premiums that the Fund may receive may
be adversely affected as new or existing institutions, including other
investment companies, engage in or increase their option-writing activities.

If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that the
writer will also profit, because it should be able to close out the option at a
lower price. If security prices fall, the put writer would expect to suffer a
loss. This loss should be less than the loss from purchasing the underlying
instrument directly, however, because the premium received for writing the
option should mitigate the effects of the decline.

In the case of options written by the Fund that are deemed
covered by virtue of the Fund's holding convertible or exchangeable preferred
stock or debt securities, the time required to convert or exchange and obtain
physical delivery of the underlying common stock

with respect to which the Fund has written options may exceed the time within
which the Fund must make delivery in accordance with an exercise notice. In
these instances, the Fund may purchase or temporarily borrow the underlying
securities for purposes of physical delivery. By so doing, the Fund will not
bear any market risk, since the Fund will have the absolute right to receive
from the issuer of the underlying security an equal number of shares to replace
the borrowed securities, but the Fund may incur additional transaction costs or
interest expenses in connection with any such purchase or borrowing.

Additional risks exist with respect to certain of the securities
for which the Fund may write covered call options. For example, if the Fund
writes covered call options on mortgage-backed securities, the mortgage-backed
securities that it holds as cover may, because of scheduled amortization or
unscheduled prepayments, cease to be sufficient cover. If this occurs, the Fund
will compensate for the decline in the value of the cover by purchasing an
appropriate additional amount of mortgage-backed securities.

Options written by the Fund will normally have expiration dates
between one and nine months from the date written. The exercise price of the
options may be below, equal to or above the market values of the underlying
securities at the times the options are written. In the case of call options,
these exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively. The Fund may write (i) in-the-money call
options when Warburg, Pincus Counsellors, Inc., the Fund's investment adviser
("Warburg") expects that the price of the underlying security will remain flat
or decline moderately during the option period, (ii) at-the-money call options
when Warburg expects that the price of the underlying security will remain flat
or advance moderately during the option period and (iii) out-of-the-money call
options when Warburg expects that the premiums received from writing the call
option plus the appreciation in market price of the underlying security up to
the exercise price will be greater than the appreciation in the price of the
underlying security alone. In any of the preceding situations, if the market
price of the underlying security declines and the security is sold at this lower
price, the amount of any realized loss will be offset wholly or in part by the
premium received. Out-of-the-money, at-the-money and in-the-money put options
(the reverse of call options as to the relation of exercise price to market
price) may be used in the same market environments that such call options are
used in equivalent transactions. To secure its obligation to deliver the
underlying security when it writes a call option, the Fund will be required to
deposit in escrow the underlying security or other assets in accordance with the
rules of the Options Clearing Corporation (the "Clearing Corporation") and of
the securities exchange on which the option is written.

Prior to their expirations, put and call options may be sold in
closing sale or purchase transactions (sales or purchases by the Fund prior to
the exercise of options that it has purchased or written, respectively, of
options of the same series) in which the Fund may realize a profit or loss from
the sale. An option position may be closed out only where there exists a
secondary market for an option of the same series on a recognized securities
exchange or in the over-the-counter market. When the Fund has purchased an
option and engages in a closing sale transaction, whether the Fund realizes a
profit or loss will depend upon whether the amount received in the closing sale
transaction is more or less than the premium the Fund initially paid for the
original option plus the related transaction costs. Similarly, in cases

where the Fund has written an option, it will realize a profit if the cost of
the closing purchase transaction is less than the premium received upon writing
the original option and will incur a loss if the cost of the closing purchase
transaction exceeds the premium received upon writing the original option. The
Fund may engage in a closing purchase transaction to realize a profit, to
prevent an underlying security with respect to which it has written an option
from being called or put or, in the case of a call option, to unfreeze an
underlying security (thereby permitting its sale or the writing of a new option
on the security prior to the outstanding option's expiration). The obligation of
the Fund under an option it has written would be terminated by a closing
purchase transaction, but the Fund would not be deemed to own an option as a
result of the transaction. So long as the obligation of the Fund as the writer
of an option continues, the Fund may be assigned an exercise notice by the
broker-dealer through which the option was sold, requiring the Fund to deliver
the underlying security against payment of the exercise price. This obligation
terminates when the option expires or the Fund effects a closing purchase
transaction. The Fund can no longer effect a closing purchase transaction with
respect to an option once it has been assigned an exercise notice.

There is no assurance that sufficient trading interest will exist
to create a liquid secondary market on a securities exchange for any particular
option or at any particular time, and for some options no such secondary market
may exist. A liquid secondary market in an option may cease to exist for a
variety of reasons. In the past, for example, higher than anticipated trading
activity or order flow or other unforeseen events have at times rendered certain
of the facilities of the Clearing Corporation and various securities exchanges
inadequate and resulted in the institution of special procedures, such as
trading rotations, restrictions on certain types of orders or trading halts or
suspensions in one or more options. There can be no assurance that similar
events, or events that may otherwise interfere with the timely execution of
customers' orders, will not recur. In such event, it might not be possible to
effect closing transactions in particular options. Moreover, the Fund's ability
to terminate options positions established in the over-the-counter market may be
more limited than for exchange-traded options and may also involve the risk that
securities dealers participating in over-the-counter transactions would fail to
meet their obligations to the Fund. The Fund, however, intends to purchase
over-the-counter options only from dealers whose debt securities, as determined
by Warburg, are considered to be investment grade. If, as a covered call option
writer, the Fund is unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying security until the
option expires or it delivers the underlying security upon exercise. In either
case, the Fund would continue to be at market risk on the security and could
face higher transaction costs, including brokerage commissions.

Securities exchanges generally have established limitations
governing the maximum number of calls and puts of each class which may be held
or written, or exercised within certain time periods by an investor or group of
investors acting in concert (regardless of whether the options are written on
the same or different securities exchanges or are held, written or exercised in
one or more accounts or through one or more brokers). It is possible that the
Fund and other clients of Warburg and certain of its affiliates may be
considered to be such a group. A securities exchange may order the liquidation
of positions found to be in violation of these limits and it may impose certain
other sanctions. These limits may restrict the number of options the Fund will
be able to purchase on a particular security.

Stock Index Options. The Fund may purchase and write
exchange-listed and OTC put and call options on stock indexes. A stock index
measures the movement of a certain group of stocks by assigning relative values
to the stocks included in the index, fluctuating with changes in the market
values of the stocks included in the index. Some index options are based on a
broad market index such as the NYSE Composite Index, or a narrower market index
such as the Standard & Poor's 100. Indexes may also be based on a particular
industry or market segment.

Options on stock indexes are similar to options on securities
except that (i) the expiration cycles of stock index options are monthly, while
those of stock options are currently quarterly, and (ii) the delivery
requirements are different. Instead of giving the right to take or make delivery
of stock at a specified price, an option on a stock index gives the holder the
right to receive a cash "exercise settlement amount" equal to (a) the amount, if
any, by which the fixed exercise price of the option exceeds (in the case of a
put) or is less than (in the case of a call) the closing value of the underlying
index on the date of exercise, multiplied by (b) a fixed "index multiplier."
Receipt of this cash amount will depend upon the closing level of the stock
index upon which the option is based being greater than, in the case of a call,
or less than, in the case of a put, the exercise price of the index and the
exercise price of the option times a specified multiple. The writer of the
option is obligated, in return for the premium received, to make delivery of
this amount. Stock index options may be offset by entering into closing
transactions as described above for securities options.

OTC Options. The Fund may purchase OTC or dealer options or sell
covered OTC options. Unlike exchange-listed options where an intermediary or
clearing corporation, such as the Clearing Corporation, assures that all
transactions in such options are properly executed, the responsibility for
performing all transactions with respect to OTC options rests solely with the
writer and the holder of those options. A listed call option writer, for
example, is obligated to deliver the underlying stock to the clearing
organization if the option is exercised, and the clearing organization is then
obligated to pay the writer the exercise price of the option. If the Fund were
to purchase a dealer option, however, it would rely on the dealer from whom it
purchased the option to perform if the option were exercised. If the dealer
fails to honor the exercise of the option by the Fund, the Fund would lose the
premium it paid for the option and the expected benefit of the transaction.

Listed options generally have a continuous liquid market while
dealer options have none. Consequently, the Fund will generally be able to
realize the value of a dealer option it has purchased only by exercising it or
reselling it to the dealer who issued it. Similarly, when the Fund writes a
dealer option, it generally will be able to close out the option prior to its
expiration only by entering into a closing purchase transaction with the dealer
to which the Fund originally wrote the option. Although the Fund will seek to
enter into dealer options only with dealers who will agree to and that are
expected to be capable of entering into closing transactions with the Fund,
there can be no assurance that the Fund will be able to liquidate a dealer
option at a favorable price at any time prior to expiration. The inability to
enter into a closing transaction may result in material losses to the Fund.
Until the Fund, as a covered OTC call option writer, is able to effect a closing
purchase transaction, it will not be able to liquidate securities (or other
assets) used to cover the written option until

the option expires or is exercised. This requirement may impair the Fund's
ability to sell portfolio securities at a time when such sale might be
advantageous. In the event of insolvency of the other party, the Fund may be
unable to liquidate a dealer option.

Futures Activities. The Fund may enter into foreign currency,
interest rate and stock index futures contracts and purchase and write (sell)
related options traded on exchanges designated by the Commodity Futures Trading
Commission (the "CFTC") or consistent with CFTC regulations on foreign
exchanges. These transactions may be entered into for "bona fide hedging"
purposes as defined in CFTC regulations and other permissible purposes including
hedging against changes in the value of portfolio securities due to anticipated
changes in interest rates and/or market conditions and increasing return.

The Fund will not enter into futures contracts and related
options for which the aggregate initial margin and premiums (discussed below)
required to establish positions other than those considered to be "bona fide
hedging" by the CFTC exceed 5% of the Fund's net asset value after taking into
account unrealized profits and unrealized losses on any such contracts it has
entered into. The Fund reserves the right to engage in transactions involving
futures contracts and options on futures contracts to the extent allowed by CFTC
regulations in effect from time to time and in accordance with the Fund's
policies. There is no overall limit on the percentage of Fund assets that may be
at risk with respect to futures activities.

Futures Contracts. A foreign currency futures contract provides
for the future sale by one party and the purchase by the other party of a
certain amount of a specified non-U.S. currency at a specified price, date, time
and place. An interest rate futures contract provides for the future sale by one
party and the purchase by the other party of a certain amount of a specific
interest rate sensitive financial instrument (debt security) at a specified
price, date, time and place. Securities indexes are capitalization weighted
indexes which reflect the market value of the securities listed on the indexes.
An index futures contract is an agreement to be settled by delivery of an amount
of cash equal to a specified multiplier times the difference between the value
of the index at the close of the last trading day on the contract and the price
at which the agreement is made.

No consideration is paid or received by the Fund upon entering
into a futures contract. Instead, the Fund is required to deposit in a
segregated account with its custodian an amount of cash or cash equivalents,
such as U.S. government securities or other liquid high-grade debt obligations,
equal to approximately 1% to 10% of the contract amount (this amount is subject
to change by the exchange on which the contract is traded, and brokers may
charge a higher amount). This amount is known as "initial margin" and is in the
nature of a performance bond or good faith deposit on the contract which is
returned to the Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied. The broker will have access to
amounts in the margin account if the Fund fails to meet its contractual
obligations. Subsequent payments, known as "variation margin," to and from the
broker, will be made daily as the financial instrument or index underlying the
futures contract fluctuates, making the long and short positions in the futures
contract more or less valuable, a process known as "marking-to-market." The Fund
will also incur brokerage costs in connection with entering into futures
transactions.

At any time prior to the expiration of a futures contract, the
Fund may elect to close the position by taking an opposite position, which will
operate to terminate the Fund's existing position in the contract. Positions in
futures contracts and options on futures contracts (described below) may be
closed out only on the exchange on which they were entered into (or through a
linked exchange). No secondary market for such contracts exists. Although the
Fund intends to enter into futures contracts only if there is an active market
for such contracts, there is no assurance that an active market will exist at
any particular time. Most futures exchanges limit the amount of fluctuation
permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit or trading may be suspended for specified periods
during the day. It is possible that futures contract prices could move to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions at an advantageous
price and subjecting the Fund to substantial losses. In such event, and in the
event of adverse price movements, the Fund would be required to make daily cash
payments of variation margin. In such situations, if the fund had insufficient
cash, it might have to sell securities to meet daily variation margin
requirements at a time when it would be disadvantageous to do so. In addition,
if the transaction is entered into for hedging purposes, in such circumstances
the Fund may realize a loss on a futures contract or option that is not offset
by an increase in the value of the hedged position. Losses incurred in futures
transactions and the costs of these transactions will affect the Fund's
performance.

Options on Futures Contracts. The Fund may purchase and write put
and call options on foreign currency, interest rate and index futures contracts
and may enter into closing transactions with respect to such options to
terminate existing positions. There is no guarantee that such closing
transactions can be effected; the ability to establish and close out positions
on such options will be subject to the existence of a liquid market.

An option on a currency, interest rate or index futures contract,
as contrasted with the direct investment in such a contract, gives the purchaser
the right, in return for the premium paid, to assume a position in a futures
contract at a specified exercise price at any time prior to the expiration date
of the option. The writer of the option is required upon exercise to assume an
offsetting futures position (a short position if the option is a call and a long
position if the option is a put). Upon exercise of an option, the delivery of
the futures position by the writer of the option to the holder of the option
will be accompanied by delivery of the accumulated balance in the writer's
futures margin account, which represents the amount by which the market price of
the futures contract exceeds, in the case of a call, or is less than, in the
case of a put, the exercise price of the option on the futures contract. The
potential loss related to the purchase of an option on futures contracts is
limited to the premium paid for the option (plus transaction costs). Because the
value of the option is fixed at the point of sale, there are no daily cash
payments by the purchaser to reflect changes in the value of the underlying
contract; however, the value of the option does change daily and that change
would be reflected in the net asset value of the Fund.

Currency Exchange Transactions. The value in U.S. dollars of the
assets of the Fund that are invested in foreign securities may be affected
favorably or unfavorably

by changes in exchange control regulations, and the Fund may incur costs in
connection with conversion between various currencies. Currency exchange
transactions may be from any non-U.S. currency into U.S. dollars or into other
appropriate currencies. The Fund will conduct its currency exchange transactions
(i) on a spot (i.e., cash) basis at the rate prevailing in the currency exchange
market, (ii) through entering into futures contracts or options on such
contracts (as described above), (iii) through entering into forward contracts to
purchase or sell currency or (iv) by purchasing exchange-traded currency
options.

Forward Currency Contracts. A forward currency contract involves
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract as agreed upon by
the parties, at a price set at the time of the contract. These contracts are
entered into in the interbank market conducted directly between currency traders
(usually large commercial banks and brokers) and their customers. Forward
currency contracts are similar to currency futures contracts, except that
futures contracts are traded on commodities exchanges and are standardized as to
contract size and delivery date.

At or before the maturity of a forward contract, the Fund may
either sell a portfolio security and make delivery of the currency, or retain
the security and fully or partially offset its contractual obligation to deliver
the currency by negotiating with its trading partner to purchase a second,
offsetting contract. If the Fund retains the portfolio security and engages in
an offsetting transaction, the Fund, at the time of execution of the offsetting
transaction, will incur a gain or a loss to the extent that movement has
occurred in forward contract prices.

Currency Options. The Fund may purchase exchange-traded put and
call options on foreign currencies. Put options convey the right to sell the
underlying currency at a price which is anticipated to be higher than the spot
price of the currency at the time the option is exercised. Call options convey
the right to buy the underlying currency at a price which is expected to be
lower than the spot price of the currency at the time the option is exercised.

Currency Hedging. The Fund's currency hedging will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward currency with respect to
specific receivables or payables of the Fund generally accruing in connection
with the purchase or sale of its portfolio securities. Position hedging is the
sale of forward currency with respect to portfolio security positions. The Fund
may not position hedge to an extent greater than the aggregate market value (at
the time of entering into the hedge) of the hedged securities.

A decline in the U.S. dollar value of a foreign currency in which
the Fund's securities are denominated will reduce the U.S. dollar value of the
securities, even if their value in the foreign currency remains constant. The
use of currency hedges does not eliminate fluctuations in the underlying prices
of the securities, but it does establish a

rate of exchange that can be achieved in the future. For example, in order to
protect against diminutions in the U.S. dollar value of securities it holds, the
Fund may purchase currency put options. If the value of the currency does
decline, the Fund will have the right to sell the currency for a fixed amount in
dollars and will thereby offset, in whole or in part, the adverse effect on the
U.S. dollar value of its securities that otherwise would have resulted.
Conversely, if a rise in the U.S. dollar value of a currency in which securities
to be acquired are denominated is projected, thereby potentially increasing the
cost of the securities, the Fund may purchase call options on the particular
currency. The purchase of these options could offset, at least partially, the
effects of the adverse movements in exchange rates. The benefit to the Fund
derived from purchases of currency options, like the benefit derived from other
types of options, will be reduced by premiums and other transaction costs.
Because transactions in currency exchange are generally conducted on a principal
basis, no fees or commissions are generally involved. Currency hedging involves
some of the same risks and considerations as other transactions with similar
instruments. Although currency hedges limit the risk of loss due to a decline in
the value of a hedged currency, at the same time, they also limit any potential
gain that might result should the value of the currency increase. If a
devaluation is generally anticipated, the Fund may not be able to contract to
sell a currency at a price above the devaluation level it anticipates.

While the values of currency futures and options on futures,
forward currency contracts and currency options may be expected to correlate
with exchange rates, they will not reflect other factors that may affect the
value of the Fund's investments and a currency hedge may not be entirely
successful in mitigating changes in the value of the Fund's investments
denominated in that currency. A currency hedge, for example, should protect a
Yen-denominated bond against a decline in the Yen, but will not protect the Fund
against a price decline if the issuer's creditworthiness deteriorates.

Hedging. In addition to entering into options, futures and
currency exchange transactions for other purposes, including generating current
income to offset expenses or increase return, the Fund may enter into these
transactions as hedges to reduce investment risk, generally by making an
investment expected to move in the opposite direction of a portfolio position. A
hedge is designed to offset a loss in a portfolio position with a gain in the
hedged position; at the same time, however, a properly correlated hedge will
result in a gain in the portfolio position being offset by a loss in the hedged
position. As a result, the use of options, futures and currency exchange
transactions for hedging purposes could limit any potential gain from an
increase in the value of the position hedged. In addition, the movement in the
portfolio position hedged may not be of the same magnitude as movement in the
hedge. With respect to futures contracts, since the value of portfolio
securities will far exceed the value of the futures contracts sold by the Fund,
an increase in the value of the futures contracts could only mitigate, but not
totally offset, the decline in the value of the Fund's assets.

In hedging transactions based on an index, whether the Fund will
realize a gain or loss from the purchase or writing of options on an index
depends upon movements in the level of stock prices in the stock market
generally or, in the case of certain indexes, in an industry or market segment,
rather than movements in the price of a particular stock. The risk of imperfect
correlation increases as the composition of the Fund's portfolio varies from the
composition of the index. In an effort to compensate for imperfect correlation
of relative movements in the hedged position and the hedge, the Fund's hedge
positions may be in a greater or lesser dollar amount than the dollar amount of
the hedged position. Such "over hedging" or "under hedging" may adversely affect
the Fund's net investment results if market movements are not as anticipated
when the hedge is established. Stock index futures transactions may be subject
to additional correlation risks. First, all participants in the futures market
are subject to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close futures contracts
through offsetting transactions which would distort the normal relationship
between the stock index and futures markets. Secondly, from the point of view of
speculators, the deposit requirements in the futures market are less onerous
than margin requirements in the securities market. Therefore, increased
participation by speculators in the futures market also may cause temporary
price distortions. Because of the possibility of price distortions in the
futures market and the imperfect correlation between movements in a securities
index and movements in the price of index futures, a correct forecast of general
market trends by Warburg still may not result in a successful hedging
transaction.

The Fund will engage in hedging transactions only when deemed
advisable by Warburg, and successful use by the Fund of hedging transactions
will be subject to Warburg's ability to predict trends in currencies, interest
rates or securities markets, as the case may be, and to correctly predict
movements in the directions of the hedge and the hedged position and the
correlation between them, which predictions could prove to be inaccurate. This
requires different skills and techniques than predicting changes in the price of
individual securities, and there can be no assurance that the use of these
strategies will be successful. Even a well-conceived hedge may be unsuccessful
to some degree because of unexpected market behavior or trends. Losses incurred
in hedging transactions and the costs of these transactions will affect the
Fund's performance.

Asset Coverage for Forward Contracts, Options, Futures and
Options on Futures. As described in the Prospectuses, the Fund will comply with
guidelines established by the Securities and Exchange Commission (the "SEC")
with respect to coverage of options written by the Fund on securities and
indexes and interest rate and index futures contracts and options on these
futures contracts. These guidelines may, in certain instances, require
segregation by the Fund of cash or liquid securities.

For example, a call option written by the Fund on securities may
require the Fund to hold the securities subject to the call (or securities
convertible into the securities without additional consideration) or to
segregate assets (as described above) sufficient to purchase and deliver the
securities if the call is exercised. A call option written by the Fund on an
index may require the Fund to own portfolio securities that correlate with the
index or to segregate assets (as described above) equal to the excess of the
index value over the exercise

price on a current basis. A put option written by the Fund may require the Fund
to segregate assets (as described above) equal to the exercise price. The Fund
could purchase a put option if the strike price of that option is the same or
higher than the strike price of a put option sold by the Fund. If the Fund holds
a futures or forward contract, the Fund could purchase a put option on the same
futures or forward contract with a strike price as high or higher than the price
of the contract held. The Fund may enter into fully or partially offsetting
transactions so that its net position, coupled with any segregated assets (equal
to any remaining obligation), equals its net obligation. Asset coverage may be
achieved by other means when consistent with applicable regulatory policies.

Additional Information on Other Investment Practices

U.S. Government Securities. The Fund may invest in debt
obligations of varying maturities issued or guaranteed by the United States
government, its agencies or instrumentalities ("U.S. government securities").
Direct obligations of the U.S. Treasury include a variety of securities that
differ in their interest rates, maturities and dates of issuance. U.S.
government securities also include securities issued or guaranteed by the
Federal Housing Administration, Farmers Home Loan Administration, Export-Import
Bank of the United States, Small Business Administration, Government National
Mortgage Association ("GNMA"), General Services Administration, Central Bank for
Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks, Federal Home
Loan Mortgage Corporation ("FHLMC"), Federal Intermediate Credit Banks, Federal
Land Banks, Federal National Mortgage Association ("FNMA"), Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory Board
and Student Loan Marketing Association. The Fund may also invest in instruments
that are supported by the right of the issuer to borrow from the U.S. Treasury
and instruments that are supported by the credit of the instrumentality. Because
the U.S. government is not obligated by law to provide support to an
instrumentality it sponsors, the Fund will invest in obligations issued by such
an instrumentality only if Warburg determines that the credit risk with respect
to the instrumentality does not make its securities unsuitable for investment by
the Fund.

Mortgage-Backed Securities. The Fund may invest in
mortgage-backed securities issued by U.S. government entities, such as GNMA,
FNMA or FHLMC. In addition, the Fund may invest in mortgage-backed securities
sponsored by U.S. and foreign issuers as well as non-governmental issuers.
Mortgage-backed securities represent direct or indirect participations in, or
are secured by and payable from, mortgage loans secured by real property. The
mortgages backing these securities include, among other mortgage instruments,
conventional 30-year fixed-rate mortgages, 15-year fixed-rate mortgages,
graduated payment mortgages and adjustable rate mortgages. Although there may be
government or private guarantees on the payment of interest and principal of
these securities, the guarantees do not extend to the securities' yield or
value, which are likely to vary inversely with fluctuations in interest rates,
nor do the guarantees extend to the yield or value of the Fund's shares. These
securities generally are "pass-through" instruments, through which the holders
receive a share of all interest and principal payments from the mortgages
underlying the securities, net of certain fees.

Yields on pass-through securities are typically quoted by
investment dealers and vendors based on the maturity of the underlying
instruments and the associated average life assumption. The average life of
pass-through pools varies with the maturities of the underlying mortgage loans.
A pool's term may be shortened by unscheduled or early payments of principal on
the underlying mortgages. The occurrence of mortgage prepayments is affected by
various factors, including the level of interest rates, general economic
conditions, the location, scheduled maturity and age of the mortgage and other
social and demographic conditions. Because prepayment rates of individual pools
vary widely, it is not possible to predict accurately the average life of a
particular pool. For pools of fixed-rate 30-year mortgages, a common industry
practice in the U.S. has been to assume that prepayments will result in a
12-year average life. At present, pools, particularly those with loans with
other maturities or different characteristics, are priced on an assumption of
average life determined for each pool. In periods of falling interest rates, the
rate of prepayment tends to increase, thereby shortening the actual average life
of a pool of mortgage-related securities. Conversely, in periods of rising rates
the rate of prepayment tends to decrease, thereby lengthening the actual average
life of the pool. However, these effects may not be present, or may differ in
degree, if the mortgage loans in the pools have adjustable interest rates or
other special payment terms, such as a prepayment charge. Actual prepayment
experience may cause the yield of mortgage-backed securities to differ from the
assumed average life yield. Reinvestment of prepayments may occur at higher or
lower interest rates than the original investment, thus affecting the Fund's
yield.

The rate of interest on mortgage-backed securities is lower than
the interest rates paid on the mortgages included in the underlying pool due to
the annual fees paid to the servicer of the mortgage pool for passing through
monthly payments to certificate holders and to any guarantor, such as GNMA, and
due to any yield retained by the issuer. Actual yield to the holder may vary
from the coupon rate, even if adjustable, if the mortgage-backed securities are
purchased or traded in the secondary market at a premium or discount. In
addition, there is normally some delay between the time the issuer receives
mortgage payments from the servicer and the time the issuer makes the payments
on the mortgage-backed securities, and this delay reduces the effective yield to
the holder of such securities.

Asset-Backed Securities. The Fund may also invest in asset-backed
securities, which represent participations in, or are secured by and payable
from, assets such as motor vehicle installment sales, installment loan
contracts, leases of various types of real and personal property and receivables
from revolving credit (credit card) agreements. Such assets are securitized
through the use of trusts and special purpose corporations. Payments or
distributions of principal and interest may be guaranteed up to certain amounts
and for a certain time period by a letter of credit or a pool insurance policy
issued by a financial institution unaffiliated with the trust or corporation.

Asset-backed securities present certain risks that are not
presented by other securities in which the Fund may invest. Automobile
receivables generally are secured by automobiles. Most issuers of automobile
receivables permit the loan servicers to retain possession of the underlying
obligations. If the servicer were to sell these obligations to another party,
there is a risk that the purchaser would acquire an interest superior to that of

the holders of the asset-backed securities. In addition, because of the large
number of vehicles involved in a typical issuance and technical requirements
under state laws, the trustee for the holders of the automobile receivables may
not have a proper security interest in the underlying automobiles. Therefore,
there is the possibility that recoveries on repossessed collateral may not, in
some cases, be available to support payments on these securities. Credit card
receivables are generally unsecured, and the debtors are entitled to the
protection of a number of state and federal consumer credit laws, many of which
give such debtors the right to set off certain amounts owed on the credit cards,
thereby reducing the balance due. Because asset-backed securities are relatively
new, the market experience in these securities is limited, and the market's
ability to sustain liquidity through all phases of the market cycle has not been
tested.

Below Investment Grade Securities. While the market values of
medium- and lower-rated securities and unrated securities of comparable quality
tend to react less to fluctuations in interest rate levels than do those of
higher-rated securities, the market values of certain of these securities also
tend to be more sensitive to individual corporate developments and changes in
economic conditions than higher-quality securities. In addition, medium- and
lower-rated securities and comparable unrated securities generally present a
higher degree of credit risk. Issuers of medium- and lower-rated securities and
unrated securities are often highly leveraged and may not have more traditional
methods of financing available to them so that their ability to service their
obligations during an economic downturn or during sustained periods of rising
interest rates may be impaired. The risk of loss due to default by such issuers
is significantly greater because medium- and lower-rated securities and unrated
securities generally are unsecured and frequently are subordinated to the prior
payment of senior indebtedness.

The market for medium- and lower-rated and unrated securities is
relatively new and has not weathered a major economic recession. Any such
recession could disrupt severely the market for such securities and may
adversely affect the value of such securities and the ability of the issuers of
such securities to repay principal and pay interest thereon.

The Fund may have difficulty disposing of certain of these
securities because there may be a thin trading market. Because there is no
established retail secondary market for many of these securities, the Fund
anticipates that these securities could be sold only to a limited number of
dealers or institutional investors. To the extent a secondary trading market for
these securities does exist, it generally is not as liquid as the secondary
market for higher-rated securities. The lack of a liquid secondary market, as
well as adverse publicity and investor perception with respect to these
securities, may have an adverse impact on market price and the Fund's ability to
dispose of particular issues when necessary to meet the Fund's liquidity needs
or in response to a specific economic event such as a deterioration in the
creditworthiness of the issuer. The lack of a liquid secondary market for
certain securities also may make it more difficult for the Fund to obtain
accurate market quotations for purposes of valuing the Fund and calculating its
net asset value.

The market value of securities in medium- and lower-rated
categories is more volatile than that of higher quality securities. Factors
adversely impacting the market value of

these securities will adversely impact the Fund's net asset value. The Fund will
rely on the judgment, analysis and experience of Warburg in evaluating the
creditworthiness of an issuer. In this evaluation, Warburg will take into
consideration, among other things, the issuer's financial resources, its
sensitivity to economic conditions and trends, its operating history, the
quality of the issuer's management and regulatory matters. Normally, medium- and
lower-rated and comparable unrated securities are not intended for short-term
investment. The Fund may incur additional expenses to the extent it is required
to seek recovery upon a default in the payment of principal or interest on its
portfolio holdings of such securities. Recent adverse publicity regarding
lower-rated securities may have depressed the prices for such securities to some
extent. Whether investor perceptions will continue to have a negative effect on
the price of such securities is uncertain.

Securities of Other Investment Companies. The Fund may invest in
securities of other investment companies to the extent permitted under the
Investment Company Act of 1940, as amended (the "1940 Act"). Presently, under
the 1940 Act, the Fund may hold securities of another investment company in
amounts which (i) do not exceed 3% of the total outstanding voting stock of such
company, (ii) do not exceed 5% of the value of the Fund's total assets and (iii)
when added to all other investment company securities held by the Fund, do not
exceed 10% of the value of the Fund's total assets.

Lending of Portfolio Securities. The Fund may lend portfolio
securities to brokers, dealers and other financial organizations that meet
capital and other credit requirements or other criteria established by the
Fund's Board of Directors (the "Board"). The Fund will not lend portfolio
securities to Warburg or its affiliates unless it has applied for and received
specific authority to do so from the SEC. Loans of portfolio securities will be
collateralized by cash, letters of credit or U.S. government securities, which
are maintained at all times in an amount equal to at least 100% of the current
market value of the loaned securities. Any gain or loss in the market price of
the securities loaned that might occur during the term of the loan would be for
the account of the Fund. From time to time, the Fund may return a part of the
interest earned from the investment of collateral received for securities loaned
to the borrower and/or a third party that is unaffiliated with the Fund and that
is acting as a "finder."

By lending its securities, the Fund can increase its income by
continuing to receive interest and any dividends on the loaned securities as
well as by either investing the collateral received for securities loaned in
short-term instruments or obtaining yield in the form of interest paid by the
borrower when U.S. government securities are used as collateral. Although the
generation of income is not an investment objective of the Fund, income received
could be used to pay the Fund's expenses and would increase an investor's total
return. The Fund will adhere to the following conditions whenever its portfolio
securities are loaned: (i) the Fund must receive at least 100% cash collateral
or equivalent securities of the type discussed in the preceding paragraph from
the borrower; (ii) the borrower must increase such collateral whenever the
market value of the securities rises above the level of such collateral; (iii)
the Fund must be able to terminate the loan at any time; (iv) the Fund must
receive reasonable interest on the loan, as well as any dividends, interest or
other distributions

on the loaned securities and any increase in market value; (v) the Fund may pay
only reasonable custodian fees in connection with the loan; and (vi) voting
rights on the loaned securities may pass to the borrower, provided, however,
that if a material event adversely affecting the investment occurs, the Board
must terminate the loan and regain the right to vote the securities. Loan
agreements involve certain risks in the event of default or insolvency of the
other party including possible delays or restrictions upon the Fund's ability to
recover the loaned securities or dispose of the collateral for the loan.

Foreign Investments. The Fund may invest up to 20% of its total
assets in the securities of foreign issuers. Investors should recognize that
investing in foreign companies involves certain risks, including those discussed
below, which are not typically associated with investing in U.S. issuers. Since
the Fund may be investing in securities denominated in currencies other than the
U.S. dollar, and since the Fund may temporarily hold funds in bank deposits or
other money market investments denominated in foreign currencies, the Fund's
investments in foreign companies may be affected favorably or unfavorably by
exchange control regulations or changes in the exchange rate between such
currencies and the dollar. A change in the value of a foreign currency relative
to the U.S. dollar will result in a corresponding change in the dollar value of
the Fund's assets denominated in that foreign currency. Changes in foreign
currency exchange rates may also affect the value of dividends and interest
earned, gains and losses realized on the sale of securities and net investment
income and gains, if any, to be distributed to shareholders by the Fund. The
rate of exchange between the U.S. dollar and other currencies is determined by
the forces of supply and demand in the foreign exchange markets. Changes in the
exchange rate may result over time from the interaction of many factors directly
or indirectly affecting economic and political conditions in the United States
and a particular foreign country, including economic and political developments
in other countries. Of particular importance are rates of inflation, interest
rate levels, the balance of payments and the extent of government surpluses or
deficits in the United States and the particular foreign country, all of which
are in turn sensitive to the monetary, fiscal and trade policies pursued by the
governments of the United States and foreign countries important to
international trade and finance. Governmental intervention may also play a
significant role. National governments rarely voluntarily allow their currencies
to float freely in response to economic forces. Sovereign governments use a
variety of techniques, such as intervention by a country's central bank or
imposition of regulatory controls or taxes, to affect the exchange rates of
their currencies. The Fund may use hedging techniques with the objective of
protecting against loss through the fluctuation of the valuation of foreign
currencies against the U.S. dollar, particularly the forward market in foreign
exchange, currency options and currency futures. See "Currency Exchange
Transactions" and "Futures Activities" above.

Information. Many of the foreign securities held by the Fund will
not be registered with, nor the issuers thereof be subject to reporting
requirements of, the SEC. Accordingly, there may be less publicly available
information about the securities and about the foreign company or government
issuing them than is available about a domestic company or government entity.
Foreign companies are generally not subject to uniform financial

<PAGE>
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reporting standards, practices and requirements comparable to those applicable
to U.S. companies.

Political Factors. With respect to some foreign countries, there
is the possibility of expropriation or confiscatory taxation, limitations on the
removal of funds or other assets of the Fund, political or social instability,
or domestic developments which could affect U.S. investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency, and balance of
payments positions. The Fund may invest in securities of foreign governments (or
agencies or instrumentalities thereof), and many, if not all, of the foregoing
considerations apply to such investments as well.

Delays. Securities of some foreign companies are less liquid and
their prices are more volatile than securities of comparable U.S. companies.
Certain foreign countries are known to experience long delays between the trade
and settlement dates of securities purchased or sold. Due to the increased
exposure of the Fund to market and foreign exchange fluctuations brought about
by such delays, and due to the corresponding negative impact on Fund liquidity,
the Fund will avoid investing in countries which are known to experience
settlement delays which may expose the Fund to unreasonable risk of loss.

Dollar-Denominated Debt Securities of Foreign Issuers. The
returns on foreign debt securities reflect interest rates and other market
conditions prevailing in those countries and the effect of gains and losses in
the denominated currencies against the U.S. dollar, which have had a substantial
impact on investment in foreign fixed income securities. The relative
performance of various countries' fixed income markets historically has
reflected wide variations relating to the unique characteristics of each
country's economy. Year-to-year fluctuations in certain markets have been
significant, and negative returns have been experienced in various markets from
time to time.

Short Sales "Against the Box". In a short sale, the Fund sells a
borrowed security and has a corresponding obligation to the lender to return the
identical security. The seller does not immediately deliver the securities sold
and is said to have a short position in those securities until delivery occurs.
The Fund may engage in a short sale if at the time of the short sale the Fund
owns or has the right to obtain without additional cost an equal amount of the
security being sold short. This investment technique is known as a short sale
"against the box." If the Fund engages in a short sale, the collateral for the
short position will be maintained by the Fund's custodian or qualified
sub-custodian.

The Fund does not intend to engage in short sales against the box
for investment purposes. The Fund may, however, make a short sale as a hedge,
when it believes that the price of a security may decline, causing a decline in
the value of a security owned by the Fund (or a security convertible or
exchangeable for such security). In such case, any future losses in the Fund's
long position should be offset by a gain in the short position and, conversely,
any gain in the long position should be reduced by a loss in the short position.
The extent to which such gains or losses are reduced will depend upon the amount
of the

security sold short relative to the amount the Fund owns. There will be certain
additional transaction costs associated with short sales against the box, but
the Fund will endeavor to offset these costs with the income from the investment
of the cash proceeds of short sales.

When-Issued Securities and Delayed-Delivery Transactions. The
Fund may utilize up to 20% of its total assets to purchase securities on a
"when-issued" basis or purchase or sell securities for delayed delivery (i.e.,
payment or delivery occur beyond the normal settlement date at a stated price
and yield). When-issued transactions normally settle within 30-45 days. The Fund
will enter into a when-issued transaction for the purpose of acquiring portfolio
securities and not for the purpose of leverage, but may sell the securities
before the settlement date if Warburg deems it advantageous to do so. The
payment obligation and the interest rate that will be received on when-issued
securities are fixed at the time the buyer enters into the commitment. Due to
fluctuations in the value of securities purchased or sold on a when-issued or
delayed-delivery basis, the yields obtained on such securities may be higher or
lower than the yields available in the market on the dates when the investments
are actually delivered to the buyers.

When the Fund agrees to purchase when-issued or delayed-delivery
securities, its custodian will set aside cash or liquid securities that are
acceptable as collateral to the appropriate regulatory authority equal to the
amount of the commitment in a segregated account. Normally, the custodian will
set aside portfolio securities to satisfy a purchase commitment, and in such a
case the Fund may be required subsequently to place additional assets in the
segregated account in order to ensure that the value of the account remains
equal to the amount of the Fund's commitment. It may be expected that the Fund's
net assets will fluctuate to a greater degree when it sets aside portfolio
securities to cover such purchase commitments than when it sets aside cash. When
the Fund engages in when-issued or delayed-delivery transactions, it relies on
the other party to consummate the trade. Failure of the seller to do so may
result in the Fund's incurring a loss or missing an opportunity to obtain a
price considered to be advantageous.

Depositary Receipts. The assets of the Fund may be invested in
the securities of foreign issuers in the form of American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs") and International Depositary
Receipts ("IDRs"). These securities may not necessarily be denominated in the
same currency as the securities into which they may be converted. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs,
which are sometimes referred to as Continental Depositary Receipts ("CDRs"), are
receipts issued in Europe, and IDRs, which are sometimes referred to as Global
Depositary Receipts ("GDRs"), are receipts issued outside the United States.
EDRs, CDRs, IDRs and GDRs are typically issued by non-U.S. banks and trust
companies that evidence ownership of either foreign or domestic securities.
Generally, ADRs in registered form are designed for use in U.S. securities
markets, and EDRs (CDRs) and IDRs (GDRs) in bearer form are designed for use in
European securities markets and non-U.S. securities markets, respectively.

Warrants. The Fund may invest up to 15% of net assets in
warrants to purchase equity securities consisting of common and preferred stock.
The equity security underlying a warrant is authorized at the time the warrant
is issued or is issued together with the warrant.

Investing in warrants can provide a greater potential for profit
or loss than an equivalent investment in the underlying security, and, thus, can
be a speculative investment. The value of a warrant may decline because of a
decline in the value of the underlying security, the passage of time, changes
in interest rates or in the dividend or other policies of the company whose
equity underlies the warrant or a change in the perception as to the future
price of the underlying security, or any combination thereof. Warrants generally
pay no dividends and confer no voting or other rights other than to purchase the
underlying security.

Non-Publicly Traded and Illiquid Securities. The Fund may not
invest more than 15% of its net assets in non-publicly traded and illiquid
securities, including securities that are illiquid by virtue of the absence of a
readily available market, time deposits maturing in more than seven days,
certain Rule 144A Securities (as defined below) and repurchase agreements which
have a maturity of longer than seven days. Securities that have legal or
contractual restrictions on resale but have a readily available market are not
considered illiquid for purposes of this limitation. Repurchase agreements
subject to demand are deemed to have a maturity equal to the notice period.

Historically, illiquid securities have included securities
subject to contractual or legal restrictions on resale because they have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), securities which are otherwise not readily marketable and repurchase
agreements having a maturity of longer than seven days. Securities which have
not been registered under the Securities Act are referred to as private
placements or restricted securities and are purchased directly from the issuer
or in the secondary market. Mutual funds do not typically hold a significant
amount of these restricted or other illiquid securities because of the potential
for delays on resale and uncertainty in valuation. Limitations on resale may
have an adverse effect on the marketability of portfolio securities and a mutual
fund might be unable to dispose of restricted or other illiquid securities
promptly or at reasonable prices and might thereby experience difficulty
satisfying redemptions within seven days. A mutual fund might also have to
register such restricted securities in order to dispose of them resulting in
additional expense and delay. Adverse market conditions could impede such a
public offering of securities.

In recent years, however, a large institutional market has
developed for certain securities that are not registered under the Securities
Act including repurchase agreements, commercial paper, foreign securities,
municipal securities and corporate bonds and notes. Institutional investors
depend on an efficient institutional market in which the unregistered security
can be readily resold or on an issuer's ability to honor a demand for repayment.
The fact that there are contractual or legal restrictions on resale to the
general public or to certain institutions may not be indicative of the liquidity
of such investments.

Rule 144A Securities. Rule 144A under the Securities Act adopted
by the SEC allows for a broader institutional trading market for securities
otherwise subject to restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of the Securities
Act for resales of certain securities to qualified institutional buyers. Warburg
anticipates that the market for certain restricted securities such as
institutional commercial paper will expand further as a result of this
regulation and use of automated systems for the trading, clearance and
settlement of unregistered securities of domestic and foreign issuers, such as
the PORTAL System sponsored by the National Association of Securities Dealers,
Inc.

An investment in Rule 144A Securities will be considered illiquid
and therefore subject to the Fund's limit on the purchase of illiquid securities
unless the Board or its delegates determines that the Rule 144A Securities are
liquid. In reaching liquidity decisions, the Board and its delegates may
consider, inter alia, the following factors: (i) the unregistered nature of the
security; (ii) the frequency of trades and quotes for the security; (iii) the
number of dealers wishing to purchase or sell the security and the number of
other potential purchasers; (iv) dealer undertakings to make a market in the
security and (v) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer).

Borrowing. The Fund may borrow up to 30% of its total assets for
temporary or emergency purposes, including to meet portfolio redemption requests
so as to permit the orderly disposition of portfolio securities or to facilitate
settlement transactions on portfolio securities, so long as there is asset
coverage of at least 300% for all borrowings of the Fund. The Fund will not
purchase portfolio securities whenever borrowings (including reverse repurchase
agreements) exceed 5% of the Fund's net assets. Although the principal of such
borrowings will be fixed, the Fund's assets may change in value during the time
the borrowing is outstanding. The Fund expects that some of its borrowings may
be made on a secured basis. In such situations, either the custodian will
segregate the pledged assets for the benefit of the lender or arrangements will
be made with a suitable subcustodian, which may include the lender.

Reverse Repurchase Agreements. The Fund may enter into reverse
repurchase agreements with the same parties with whom it may enter into
repurchase agreements. Reverse repurchase agreements involve the sale of
securities held by the Fund pursuant to its agreement to repurchase them at a
mutually agreed upon date, price and rate of interest. At the time the Fund
enters into a reverse repurchase agreement, it will establish and maintain a
segregated account with an approved custodian containing cash or liquid
high-grade debt securities having a value not less than the repurchase price
(including accrued interest). The assets contained in the segregated account
will be marked-to-market daily and additional assets will be placed in such
account on any day in which the assets fall below the repurchase price (plus
accrued interest). The Fund's liquidity and ability to manage its assets might
be affected when it sets aside cash or portfolio securities to cover such
commitments. Reverse repurchase agreements involve the risk that the market
value of the securities retained in lieu of sale may decline below the price of
the securities the Fund has sold but is obligated to repurchase. In the event
the buyer of securities under a reverse repurchase agreement files for
bankruptcy or

becomes insolvent, such buyer or its trustee or receiver may receive an
extension of time to determine whether to enforce a Fund's obligation to
repurchase the securities, and the Fund's use of the proceeds of the reverse
repurchase agreement may effectively be restricted pending such decision.

Other Investment Limitations

The investment limitations numbered 1 through 11 may not be
changed without the affirmative vote of the holders of a majority of the Fund's
outstanding shares. Such majority is defined as the lesser of (i) 67% or more of
the shares present at the meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii) more
than 50% of the outstanding shares. If a percentage restriction (other than the
percentage limitation set forth in No. 1 below) is adhered to at the time of an
investment, a later increase or decrease in the percentage of assets resulting
from a change in the values of portfolio securities or in the amount of the
Fund's assets will not constitute a violation of such restriction. Investment
limitations 12 through 15 may be changed by a vote of the Board at any time.

The Fund may not:

1. Borrow money except that the Fund may (a) borrow from banks
for temporary or emergency purposes and (b) enter into reverse repurchase
agreements; provided that reverse repurchase agreements and any other
transactions constituting borrowing by the Fund may not exceed 30% of the value
of the Fund's total assets at the time of such borrowing and only if after such
borrowing there is assets coverage of at least 300% for all borrowings of the
Fund. For purposes of this restriction, the entry into options, futures
contracts and options on futures contracts shall not constitute borrowing.

2. Purchase the securities of any issuer if as a result more than
5% of the value of the Fund's total assets would be invested in the securities
of such issuer or more than 10% of the outstanding voting securities of such
issuer would be owned by the Fund, except that this 5% limitation does not apply
to U.S. government securities and except that up to 25% of the value of the
Fund's total assets may be invested without regard to this 5% limitation.

3. Make loans, except that the Fund may purchase or hold
fixed-income securities, lend portfolio securities and enter into repurchase
agreements in accordance with its investment objectives, policies and
limitations.

4. Underwrite any securities issued by others except to the
extent that the investment in restricted securities and the sale of securities
or the purchase of securities directly from the issuer in accordance with the
Fund's investment objectives, policies and limitations may be deemed to be
underwriting.

5. Purchase or sell real estate, except that the Fund may invest
in (a) securities secured by real estate, mortgages or interests therein or (b)
issued by companies which invest in real estate or interests therein.

6. Make short sales of securities or maintain a short position,
except that the Fund may maintain short positions in options on currencies,
securities and stock indexes, futures contracts and options on futures contracts
and enter into short sales "against the box."

7. Purchase securities on margin, except that the Fund may obtain
any short-term credits necessary for the clearance of purchases and sales of
securities. For purposes of this restriction, the deposit or payment of initial
or variation margin in connection with transactions in options, futures
contracts and options on futures contracts will not be deemed to be a purchase
of securities on margin.

8. Invest in commodities, except that the Fund may purchase and
sell futures contracts and options on futures contracts, currencies, securities
or indexes.

9. Pledge, mortgage or hypothecate its assets, except (a) to the
extent necessary to secure permitted borrowings and (b) to the extent related to
the deposit of assets in escrow in connection with collateral and initial or
variation margin arrangements with respect to options, futures contracts, and
options on futures contracts and in amounts not in excess of 125% of the dollar
amount borrowed.

10. Invest more than 15% of the Fund's net assets in securities
which may be illiquid because of legal or contractual restrictions on resale or
securities for which there are no readily available market quotations. For
purposes of this limitation, repurchase agreements with maturities greater than
seven days shall be considered illiquid securities.

11. Make additional investments (including roll-overs) if the
Fund's borrowings exceed 5% of its net assets.

12. Make investments for the purpose of exercising control or
management.

13. Purchase any securities which would cause 25% or more of the
value of the Fund's total assets at the time of purchase to be invested in the
securities of issuers conducting their principal business activities in the same
industry; provided that there shall be no limit on the purchase of U.S.
government securities.

14. Invest in oil, gas or mineral exploration or development
programs, except that the Fund may invest in securities of companies that invest
in or sponsor oil, gas or mineral exploration or development programs.

15. Invest in warrants (other than warrants acquired by the Fund
as part of a unit or attached to securities at the time of purchase) if, as a
result, the investments (valued at the lower of cost or market) would exceed
15% of the value of the Fund's total assets.

Portfolio Valuation

The Prospectuses discuss the time at which the net asset value of
the Fund is determined for purposes of sales and redemptions. The following is a
description of the procedures used by the Fund in valuing its assets.

Securities listed on a U.S. securities exchange (including
securities traded through the Nasdaq National Market System) or foreign
securities exchange or traded in an over-the-counter market will be valued at
the most recent sale as of the time the valuation is made or, in the absence of
sales, at the mean between the bid and asked quotations. If there are no such
quotations, the value of the securities will be taken to be the highest bid
quotation on the exchange or market. Options or futures contracts will be valued
similarly. A security which is listed or traded on more than one exchange is
valued at the quotation on the exchange determined to be the primary market for
such security. The valuation of short sales of securities, which are not traded
on a national exchange, will be at the mean of bid and asked prices. Amortized
cost involves valuing a portfolio instrument at its initial cost and thereafter
assuming a constant amortization to maturity of an discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. Short-term obligations with maturities of 60 days or less are
valued at amortized cost, which constitutes fair value as determined by the
Board. The amortized cost method of valuation may also be used with respect to
other debt obligations with 60 days or less remaining to maturity. In
determining the market value of portfolio investments, the Fund may employ
outside organizations (a "Pricing Service") which may use a matrix, formula or
other objective method that takes into consideration market indexes, matrices,
yield curves and other specific adjustments. The procedures of Pricing Services
are reviewed periodically by the officers of the Fund under the general
supervision and responsibility of the Board, which may replace a Pricing Service
at any time. Securities, options and futures contracts for which market
quotations are not available and certain other assets of the Fund will be valued
at their fair value as determined in good faith pursuant to consistently applied
procedures established by the Board. In addition, the Board or its delegates may
value a security at fair value if it determines that such security's value
determined by the methodology set forth above does not reflect its fair value.

Trading in securities in certain foreign countries is completed
at various times prior to the close of business on each business day in New York
(i.e., a day on which the NYSE is open for trading). In addition, securities
trading in a particular country or countries may not take place on all business
days in New York. Furthermore, trading takes place in various foreign markets on
days which are not business days in New York and days on which the Fund's net
asset value is not calculated. As a result, calculation of the Fund's net asset
value may not take place contemporaneously with the determination of the prices
of certain portfolio securities used in such calculation. Events affecting the
values of portfolio securities that occur between the time their prices are
determined and the close of regular trading on the NYSE will not be reflected in
the Fund's calculation of net asset value unless the Board or its delegates
deems that the particular event would materially affect net asset value, in
which case an adjustment may be made. All assets and liabilities initially
expressed in foreign currency values will be converted into U.S. dollar values
at the prevailing rate as quoted by a Pricing

Service. If such quotations are not available, the rate of exchange will be
determined in good faith pursuant to consistently applied procedures established
by the Board.

Portfolio Transactions

Warburg is responsible for establishing, reviewing and, where
necessary, modifying the Fund's investment program to achieve its investment
objective. Purchases and sales of newly issued portfolio securities are usually
principal transactions without brokerage commissions effected directly with the
issuer or with an underwriter acting as principal. Other purchases and sales may
be effected on a securities exchange or over-the-counter, depending on where it
appears that the best price or execution will be obtained. The purchase price
paid by the Fund to underwriters of newly issued securities usually includes a
concession paid by the issuer to the underwriter, and purchases of securities
from dealers, acting as either principals or agents in the after market, are
normally executed at a price between the bid and asked price, which includes a
dealer's mark-up or mark-down. Transactions on U.S. stock exchanges and some
foreign stock exchanges involve the payment of negotiated brokerage commissions.
On exchanges on which commissions are negotiated, the cost of transactions may
vary among different brokers. On most foreign exchanges, commissions are
generally fixed. There is generally no stated commission in the case of
securities traded in domestic or foreign over-the-counter markets, but the price
of securities traded in over-the-counter markets includes an undisclosed
commission or mark-up. U.S. government securities are generally purchased from
underwriters or dealers, although certain newly issued U.S. government
securities may be purchased directly from the U.S. Treasury or from the issuing
agency or instrumentality.

Warburg will select specific portfolio investments and effect
transactions for the Fund and in doing so seeks to obtain the overall best
execution of portfolio transactions. In evaluating prices and executions,
Warburg will consider the factors it deems relevant, which may include the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of a broker or dealer and the reasonableness
of the commission, if any, for the specific transaction and on a continuing
basis. Warburg may, in its discretion, effect transactions in portfolio
securities with dealers who provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934) to
the Fund and/or other accounts over which Warburg exercises investment
discretion. Warburg may place portfolio transactions with a broker or dealer
with whom it has negotiated a commission that is in excess of the commission
another broker or dealer would have charged for effecting the transaction if
Warburg determines in good faith that such amount of commission was reasonable
in relation to the value of such brokerage and research services provided by
such broker or dealer viewed in terms of either that particular transaction or
of the overall responsibilities of Warburg. Research and other services received
may be useful to Warburg in serving both the Fund and its other clients and,
conversely, research or other services obtained by the placement of business of
other clients may be useful to Warburg in carrying out its obligations to the
Fund. Research may include furnishing advice, either directly or through
publications or writings, as to the value of securities, the advisability of
purchasing or selling specific securities and the availability of securities or
purchasers or sellers of securities; furnishing seminars, information, analyses
and reports concerning issuers,

industries, securities, trading markets and methods, legislative developments,
changes in accounting practices, economic factors and trends and portfolio
strategy; access to research analysts, corporate management personnel, industry
experts, economists and government officials; comparative performance evaluation
and technical measurement services and quotation services; and products and
other services (such as third party publications, reports and analyses, and
computer and electronic access, equipment, software, information and accessories
that deliver, process or otherwise utilize information, including the research
described above) that assist Warburg in carrying out its responsibilities. For
the fiscal year ended August 31, 1996, $539,904 of total brokerage commissions
was paid by the Fund to brokers and dealers who provided such research and other
services. Research received from brokers or dealers is supplemental to Warburg's
own research program. The fees to Warburg under its advisory agreement with the
Fund are not reduced by reason of its receiving any brokerage and research
services.

During the fiscal years ended August 31, 1996, 1995 and 1994 the
Fund and, for relevant periods, the Warburg Pincus Growth & Income Fund
investment portfolio of The RBB Fund, Inc. (the "RBB Fund") paid brokerage
commissions of $2,898,813, $3,055,939 and $1,222,416 respectively. (The Fund is
the successor to the Warburg Pincus Growth & Income Fund investment portfolio of
the RBB Fund having acquired its assets and liabilities on May 3, 1996.) As of
August 31, 1996, the Fund had an outstanding repurchase agreement in the
amount of $51,670,000 with State Street Bank and Trust Company ("State Street"),
one of the Fund's regular broker-dealers.

Investment decisions for the Fund concerning specific portfolio
securities are made independently from those for other clients advised by
Warburg. Such other investment clients may invest in the same securities as the
Fund. When purchases or sales of the same security are made at substantially the
same time on behalf of such other clients, transactions are averaged as to price
and available investments allocated as to amount, in a manner which Warburg
believes to be equitable to each client, including the Fund. In some instances,
this investment procedure may adversely affect the price paid or received by the
Fund or the size of the position obtained or sold for the Fund. To the extent
permitted by law, Warburg may aggregate the securities to be sold or purchased
for the Fund with those to be sold or purchased for such other investment
clients in order to obtain best execution.

Any portfolio transaction for the Fund may be executed through
Counsellors Securities Inc., the Fund's distributor ("Counsellors Securities"),
if, in Warburg's judgment, the use of Counsellors Securities is likely to result
in price and execution at least as favorable as those of other qualified
brokers, and if, in the transaction, Counsellors Securities charges the Fund a
commission rate consistent with those charged by Counsellors Securities to
comparable unaffiliated customers in similar transactions. All transactions with
affiliated brokers will comply with Rule 17e-1 under the 1940 Act.

In no instance will portfolio securities be purchased from or
sold to Warburg or Counsellors Securities or any affiliated person of such
companies.

Transactions for the Fund may be effected on foreign securities
exchanges. In transactions for securities not actively traded on a foreign
securities exchange, the Fund will deal directly with the dealers who make a
market in the securities involved, except in those circumstances where better
prices and execution are available elsewhere. Such dealers usually are acting as
principal for their own account. On occasion, securities may be purchased
directly from the issuer. Such portfolio securities are generally traded on a
net basis and do not normally involve brokerage commissions. Securities firms
may receive brokerage commissions on certain portfolio transactions, including
options, futures and options on futures transactions and the purchase and sale
of underlying securities upon exercise of options.

The Fund may participate, if and when practicable, in bidding for
the purchase of securities for the Fund's portfolio directly from an issuer in
order to take advantage of the lower purchase price available to members of such
a group. The Fund will engage in this practice, however, only when Warburg, in
its sole discretion, believes such practice to be otherwise in the Fund's
interest.

Portfolio Turnover

The Fund does not intend to seek profits through short-term
trading, but the rate of turnover will not be a limiting factor when the Fund
deems it desirable to sell or purchase securities. The Fund's portfolio turnover
rate is calculated by dividing the lesser of purchases or sales of its portfolio
securities for the year by the monthly average value of the portfolio
securities. Securities with remaining maturities of one year or less at the date
of acquisition are excluded from the calculation.

Certain practices that may be employed by the Fund could result
in high portfolio turnover. For example, options on securities may be sold in
anticipation of a decline in the price of the underlying security (market
decline) or purchased in anticipation of a rise in the price of the underlying
security (market rise) and later sold. To the extent that its portfolio is
traded for the short-term, the Fund will be engaged essentially in trading
activities based on short-term considerations affecting the value of an issuer's
stock instead of long-term investments based on fundamental valuation of
securities. Because of this policy, portfolio securities may be sold without
regard to the length of time for which they have been held.

MANAGEMENT OF THE FUND

Officers and Board of Directors

The names (and ages) of the Fund's Directors and officers, their
addresses, present positions and principal occupations during the past five
years and other affiliations are set forth below.

<TABLE>
<S> <C>
Richard N. Cooper (63) Director
Harvard University Professor at Harvard University;
1737 Cambridge Street National Intelligence Counsel from June 1995 until
Cambridge, MA 02138 January 1997; Director or Trustee of Circuit City

Stores, Inc. (retail electronics and appliances)
and Phoenix Home Mutual Life Insurance Company.

Donald J. Donahue (73) Director
27 Signal Road Chairman of Magma Copper Company
Stamford, Connecticut 06902 from December 1987 until December 1995;
Chairman and Director of NAC
Holdings from September 1990-June
1993; Director of Pioneer
Companies, Inc. (chlor-alkali
chemicals) and predecessor companies
since 1990 and Vice Chairman since
December 1995.

Jack W. Fritz (70) Director
2425 North Fish Creek Road Private investor; Consultant and
P.O. Box 483 Director of Fritz Broadcasting, Inc. and
Wilson, Wyoming 83014 Fritz Communications (developers and operators of
radio stations); Director of Advo, Inc. (direct
mail advertising).

John L. Furth* (66) Chairman of the Board
466 Lexington Avenue Vice Chairman and Director of Warburg;
New York, New York 10017-3147 Associated with Warburg since 1970; Director of
Counsellors Securities; Chairman of
the Board and officer of other
investment companies advised by
Warburg.

Thomas A. Melfe (65) Director
30 Rockefeller Plaza Partner in the law firm of Donovan Leisure
New York, New York 10112 Newton & Irvine; Chairman of the Board, Municipal
Fund for New York Investors, Inc.

Alexander B. Trowbridge (67) Director
1317 F Street, N.W., 5th Floor President of Trowbridge Partners, Inc.
Washington, DC 20004 (business consulting) from January 1990-
November 1996; President of the
National Association of
Manufacturers from 1980-1990;
Director or Trustee of New England
Mutual Life
</TABLE>

- ----------
* Indicates a Director who is an "interested person" of the Fund as defined in
the 1940 Act.

<TABLE>
<S> <C>
Insurance Co., ICOS
Corporation (biopharmaceuticals),
WMX Technologies Inc. (solid and
hazardous waste collection and
disposal), The Rouse Company (real
estate development), Harris Corp.
(electronics and communications
equipment), The Gillette Co.
(personal care products) and Sun
Company Inc. (petroleum refining and
marketing).

Arnold M. Reichman* (49) President and Director
466 Lexington Avenue Senior Managing Director, Chief Operating
New York, New York 10017-3147 Officer and Assistant Secretary
of Warburg; Associated with
Warburg since 1984; Director,
Secretary and Chief Operating
Officer of Counsellors Securities;
Officer of other investment
companies advised by Warburg.

Eugene L. Podsiadlo (40) Senior Vice President
466 Lexington Avenue Managing Director of Warburg;
New York, New York 10017-3147 Associated with Warburg since 1991; Vice
President of Citibank, N.A. from
1987-1991; Senior Vice President of
Counsellors Securities and officer
of other investment companies
advised by Warburg.

Stephen Distler (44) Vice President
466 Lexington Avenue Managing Director, Controller and Assistant
New York, New York 10017-3147 Secretary of Warburg; Associated with Warburg
since 1984; Treasurer of Counsellors
Securities; Vice President of other
investment companies advised by
Warburg.

Eugene P. Grace (45) Vice President and Secretary
466 Lexington Avenue Associated with Warburg since April 1994;
New York, New York 10017-3147 Attorney-at-law from September 1989-April 1994;
life insurance agent, New York Life
Insurance Company from 1993-1994;
General Counsel and Secretary, Home
Unity Savings Bank from 1991-1992;
Vice President, Chief Compliance
Officer and Assistant Secretary of
Counsellors Securities; Vice
President and Secretary of other
investment companies advised by
Warburg.

Howard Conroy (43) Vice President and Chief
466 Lexington Avenue Financial Officer
New York, New York 10017-3147 Associated with Warburg since 1992;
</TABLE>

<TABLE>
<S> <C>
Associated with Martin Geller, C.P.A. from
1990-1992; Vice President, Finance with
Gabelli/Rosenthal & Partners, L.P. until 1990;
Vice President and Chief Financial Officer of
other investment companies advised by Warburg.

Daniel S. Madden, CPA (31) Treasurer and Chief Accounting Officer
466 Lexington Avenue Associated with Warburg since 1995;
New York, New York 10017-3147 Associated with BlackRock Financial Management,
Inc. from September 1994 to October
1996; Associated with BEA Associates
from April 1993 to September 1994;
Associated with Ernst & Young LLP
from 1990 to 1993; Treasurer and
Chief Accounting Officer of other
investment companies advised by
Warburg.

Janna Manes, Esq. (29) Assistant Secretary
466 Lexington Avenue Associated with Warburg since March 1996;
New York, New York 10017-3147 Associated with the law firm of Willkie Farr &
Gallagher from 1993-1996; Assistant
Secretary of other investment
companies advised by Warburg.
</TABLE>

No employee of Warburg or PFPC Inc., the Fund's co-administrator
("PFPC"), or any of their affiliates receives any compensation from the Fund for
acting as an officer or director of the Fund. Each Director who is not a
director, trustee, officer or employee of Warburg, PFPC or any of their
affiliates receives an annual fee of $500, and $250 for each meeting of the
Board attended by him for his services as Director and is reimbursed for
expenses incurred in connection with his attendance at Board meetings.

Directors' Compensation

Total Total Compensation from
Compensation from all Investment Companies
Name of Director Fund'D' Managed by Warburg*
---------------- ----- ------------------
<S> <C> <C>
John L. Furth None** None**
Arnold M. Reichman None** None**
Richard N. Cooper $1,500 $44,500
Donald J. Donahue $1,500 $44,500
Jack W. Fritz $1,500 $44,500
Thomas A. Melfe $1,500 $44,500
Alexander B. Trowbridge $1,500 $44,500
</TABLE>

'D' Amounts shown are estimates of payments to be made in the fiscal year
ending August 31, 1997 pursuant to existing arrangements.

* Each Director also serves as a Director or Trustee of 23 other
investment companies advised by Warburg.

** Mr. Furth and Mr. Reichman are considered to be interested persons
of the Fund and Warburg, as defined under Section 2(a)(19) of the 1940
Act, and, accordingly, receive no compensation from the Fund or any
other investment company managed by Warburg.

As of August 1, 1997, no Directors or officers of the Fund as a
group owned less than 1% of the outstanding shares of the Fund.

Portfolio Managers

Mr. Brian S. Posner is Portfolio Manager of the Fund, the Growth
& Income Portfolio of the Warburg Pincus Trust and the Value Portfolio of the
Warburg Pincus Institutional Fund, Inc. He has 9 years of investment experience.
Prior to joining Warburg, Mr. Posner was employed from 1987 to 1996 by Fidelity
Investments, where, most recently, he was the vice president and portfolio
manager of the Fidelity Equity-Income II Fund. Mr. Posner received an
undergraduate degree from Northwestern University and his M.B.A. in finance from
the University of Chicago.

Investment Adviser and Co-Administrators

Warburg serves as investment adviser to the Fund pursuant to a
written agreement (the "Advisory Agreement"). Counsellors Funds Service, Inc.
("Counsellors Service") and PFPC both serve as co-administrators to the Fund
pursuant to separate written agreements (the "Counsellors Service
Co-Administration Agreement" and the "PFPC Co-Administration Agreement,"
respectively). Prior to October 1, 1993, PNC Institutional Management Corp.
("PIMC") and Warburg rendered advisory and sub-advisory services, respectively,
to the predecessor to the Fund, the Warburg Pincus Growth & Income Fund
investment portfolio of the RBB Fund. Sub-advisory fees were paid by the advisor
and not the Fund. The services provided by, and the fees payable by the Fund to,
Warburg under the Advisory Agreement, Counsellors Service under the Counsellors
Service Co-Administration Agreement and PFPC under the PFPC Co-Administration
Agreement are described in the Prospectuses. Each class of shares of the Fund
bears its proportionate share of fees payable to Warburg, Counsellors Service
and PFPC in the proportion that its assets bear to the aggregate assets of the
Fund at the time of calculation.

For the fiscal years ended August 31, 1996, 1995 and 1994 Warburg
earned $7,914,238, $5,824,947 and $1,030,566, respectively, in investment
advisory fees. Under the Counsellors Co-Administration Agreement, for the fiscal
years ended August 31, 1996, 1995 and 1994, Counsellors Service was paid
$992,718, $714,152 and $24,186, respectively.

Under the PFPC Co-Administration Agreement, for the fiscal years ended August
31, 1996, 1995 and 1994, PFPC was paid $1,645,362, $1,222,497 and $269,859,
respectively.

Custodians and Transfer Agent

PNC Bank, National Association ("PNC") and State Street serve as
custodians of the Fund's U.S. and non-U.S. assets, respectively, pursuant to
separate custodian agreements (the "Custodian Agreements"). Under the Custodian
Agreements, PNC and State Street each (i) maintains a separate account or
accounts in the name of the Fund, (ii) holds and transfers portfolio securities
on account of the Fund, (iii) makes receipts and disbursements of money on
behalf of the Fund, (iv) collects and receives all income and other payments and
distributions for the account of the Fund's portfolio securities held by it and
(v) makes periodic reports to the Board concerning the Fund's custodial
arrangements. PNC may delegate its duties under its Custodian Agreement with the
Fund to a wholly owned direct or indirect subsidiary of PNC or PNC Bank Corp.
upon notice to the Fund and upon the satisfaction of certain other conditions.
With the approval of the Board, State Street is authorized to select one or more
foreign banking institutions and foreign securities depositories to serve as
sub-custodian on behalf of the Fund. PNC is an indirect, wholly owned subsidiary
of PNC Bank Corp. and its principal business address is Broad and Chestnut
Streets, Philadelphia, Pennsylvania 19101. The principal business address of
State Street is 225 Franklin Street, Boston, Massachusetts 02110.

State Street acts as the shareholder servicing, transfer and
dividend disbursing agent of the Fund pursuant to a Transfer Agency and Service
Agreement, under which State Street (i) issues and redeems shares of the Fund,
(ii) addresses and mails all communications by the Fund to record owners of Fund
shares, including reports to shareholders, dividend and distribution notices and
proxy material for its meetings of shareholders, (iii) maintains shareholder
accounts and, if requested, sub-accounts and (iv) makes periodic reports to the
Board concerning the transfer agent's operations with respect to the Fund. State
Street has delegated to Boston Financial Data Services, Inc., a 50% owned
subsidiary ("BFDS"), responsibility for most shareholder servicing functions.
BFDS's principal business address is 2 Heritage Drive, Boston, Massachusetts
02171.

Organization of the Fund

The Fund was incorporated on January 29, 1996, under the laws of
the State of Maryland under the name Warburg, Pincus Growth & Income Fund, Inc.
The Fund's charter authorizes the Board to issue three billion full and
fractional shares of common stock, $.001 par value per share ("Common Shares"),
of which one billion shares are designated Common Stock and two billion shares
are designated Advisor Shares.

All shareholders of the Fund in each class, upon liquidation,
will participate ratably in the Fund's net assets. Shares do not have cumulative
voting rights, which means that holders of more than 50% of the shares voting
for the election of Directors can elect all Directors. Shares are transferable
but have no preemptive, conversion or subscription rights.

Distribution and Shareholder Servicing

The Fund may, in the future, enter into agreements ("agreements")
with institutional shareholders of record, broker-dealers, financial
institutions, depository institutions, retirement plans and financial
intermediaries ("Institutions") to provide certain distribution, shareholder
servicing, administrative and accounting services for their clients or customers
(or participants in the case of retirement plans) ("Customers") who are
beneficial owners of Advisor Shares. See the Advisor Prospectus, "Shareholder
Servicing." Agreements will be governed by a distribution plan (the
"Distribution Plan") pursuant to Rule 12b-1 under the 1940 Act. The Distribution
Plan requires the Board, at least quarterly, to receive and review written
reports of amounts expended under the Distribution Plan and the purposes for
which such expenditures were made.

An Institution with which the Fund has entered into an Agreement
with respect to its Advisor Shares may charge a Customer one or more of the
following types of fees, as agreed upon by the Institution and the Customer,
with respect to the cash management or other services provided by the
Institution: (i) account fees (a fixed amount per month or per year); (ii)
transaction fees (a fixed amount per transaction processed); (iii) compensation
balance requirements (a minimum dollar amount a Customer must maintain in order
to obtain the services offered); or (iv) account maintenance fees (a periodic
charge based upon the percentage of assets in the account or of the dividend
paid on those assets). Services provided by an Institution to Customers are in
addition to, and not duplicative of, the services to be provided under the
Fund's co-administration and distribution and shareholder servicing
arrangements. A Customer of an Institution should read the relevant Prospectus
and this Statement of Additional Information in conjunction with the Agreement
and other literature describing the services and related fees that would be
provided by the Institution to its Customers prior to any purchase of Fund
shares. Prospectuses are available from the Fund's distributor upon request. No
preference will be shown in the selection of Fund portfolio investments for the
instruments of Institutions.

The Distribution Plan will continue in effect for so long as its
continuance is specifically approved at least annually by the Board, including a
majority of the Directors who are not interested persons of the Fund and who
have no direct or indirect financial interest in the operation of the
Distribution Plan ("Independent Directors"). Any material amendment of the
Distribution Plan would require the approval of the Board in the same manner.
The Distribution Plan may not be amended to increase materially the amount to be
spent thereunder without shareholder approval of the relevant class of shares.
The Distribution Plan Advisor may be terminated at any time, without penalty, by
vote of a majority of the Independent Directors or by a vote of a majority of
the outstanding voting securities of the Advisor Shares of the Fund.

For the fiscal year ended August 31, 1996, no distribution fees
were paid to Counsellors Securities Inc., a wholly owned subsidiary of Warburg,
on behalf of the Common Shares of the Fund. For the fiscal year ended August 31,
1996, distribution fees of $377,281 were paid to Counsellors Securities Inc., on
behalf of the Advisor Shares of the Fund for direct payments to financial
institutions or other financial intermediaries.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

The offering price of the Fund's shares is equal to the per share
net asset value of the relevant class of shares of the Fund. Information on how
to purchase and redeem Fund shares and how such shares are priced is included in
the Prospectuses under "Net Asset Value."

Under the 1940 Act, the Fund may suspend the right of redemption
or postpone the date of payment upon redemption for any period during which the
NYSE is closed, other than customary weekend and holiday closings, or during
which trading on the NYSE is restricted, or during which (as determined by the
SEC) an emergency exists as a result of which disposal or fair valuation of
portfolio securities is not reasonably practicable, or for such other periods as
the SEC may permit. (The Fund may also suspend or postpone the recordation of an
exchange of its shares upon the occurrence of any of the foregoing conditions.)

If the Board determines that conditions exist which make payment
of redemption proceeds wholly in cash unwise or undesirable, the Fund may make
payment wholly or partly in securities or other investment instruments which may
not constitute securities as such term is defined in the applicable securities
laws. If a redemption is paid wholly or partly in securities or other property,
a shareholder would incur transaction costs in disposing of the redemption
proceeds. The Fund will comply with Rule 18f-1 promulgated under the 1940 Act
with respect to redemptions in kind.

Automatic Cash Withdrawal Plan. An automatic cash withdrawal plan
(the "Plan") is available to shareholders who wish to receive specific amounts
of cash periodically. Withdrawals may be made under the Plan by redeeming as
many shares of the Fund as may be necessary to cover the stipulated withdrawal
payment. To the extent that withdrawals exceed dividends, distributions and
appreciation of a shareholder's investment in the Fund, there will be a
reduction in the value of the shareholder's investment and continued withdrawal
payments may reduce the shareholder's investment and ultimately exhaust it.
Withdrawal payments should not be considered as income from investment in the
Fund. All dividends and distributions on shares in the Plan are automatically
reinvested at net asset value in additional shares of the Fund.

EXCHANGE PRIVILEGE

An exchange privilege with certain other funds advised by Warburg
is available to investors in the Fund. The funds into which exchanges of Common
Shares currently can be made are listed in the Common Share Prospectus.
Exchanges may also be made between certain Warburg Pincus Advisor Funds.

The exchange privilege enables shareholders to acquire shares in
a fund with a different investment objective when they believe that a shift
between funds is an appropriate

investment decision. This privilege is available to shareholders residing in any
state in which the Common Shares or Advisor Shares being acquired, as relevant,
may legally be sold. Prior to any exchange, the investor should obtain and
review a copy of the current prospectus of the relevant class of each fund into
which an exchange is being considered. Shareholders may obtain a prospectus of
the relevant class of the fund into which they are contemplating an exchange
from Counsellors Securities.

Upon receipt of proper instructions and all necessary supporting
documents, shares submitted for exchange are redeemed at the then-current net
asset value of the relevant class and the proceeds are invested on the same day,
at a price as described above, in shares of the relevant class of the fund being
acquired. Warburg reserves the right to reject more than three exchange requests
by a shareholder in any 30-day period. The exchange privilege may be modified or
terminated at any time upon 60 days' notice to shareholders.

ADDITIONAL INFORMATION CONCERNING TAXES

The following is a summary of the material United States
federal income tax considerations regarding the purchase, ownership and
disposition of shares in the Funds. Each prospective shareholder is urged to
consult his own tax adviser with respect to the specific federal, state, local
and foreign tax consequences of investing in the Fund. The summary is based on
the laws in effect on the date of this Statement of Additional Information,
which are subject to change.

The Fund and Its Investments

The Fund and Its Investments. The Fund intends to continue to
qualify to be treated as a regulated investment company each taxable year
under the Internal Revenue Code of 1986, as amended (the "Code"). To so qualify,
the Fund must, among other things: (a) derive at least 90% of its gross
income in each taxable year from dividends, interest, payments with respect to
securities, loans and gains from the sale or other disposition of stock or
securities or foreign currencies, or other income (including, but not limited
to, gains from options, futures or forward contracts) derived with respect to
its business of investing in such stock, securities or currencies; and (b)
diversify its holdings so that, at the end of each quarter of the Fund's taxable
year, (i) at least 50% of the market value of the Fund's assets is represented
by cash, securities of other regulated investment companies, United States
government securities and other securities, with such other securities limited,
in respect of any one issuer, to an amount not greater than 5% of the Fund's
assets and not greater than 10% of the outstanding voting securities of such
issuer and (ii) not more than 25% of the value of its assets is invested in the
securities (other than United States government securities or securities of
other regulated investment companies) of any one issuer or any two or more
issuers that the Fund controls and are determined to be engaged in the same or
similar trades or businesses or related trades or businessses. The Fund expects
that all of its foreign currency gains will be directly related to its principal
business of investing in stocks and securities.

As a regulated investment company, the Fund will not be subject
to United States federal income tax on its net investment income (i.e., income
other than its net realized long- and short-term capital gains) and its net
realized long- and short-term capital gains, if any, that it distributes to its
shareholders, provided that an amount equal to at least 90% of the sum of its
investment company taxable income (i.e., 90% of its taxable income minus the
excess, if any, of its net realized long-term capital gains over its net
realized short-term capital losses (including any capital loss carryovers), plus
or minus certain other adjustments as specified in the Code) and its net
tax-exempt income for the taxable year is distributed, but will be subject to
tax at regular corporate rates on any taxable income or gains that it does not
distribute. Furthermore, the Fund will be subject to a United States corporate
income tax with respect to such distributed amounts in any year that it fails to
qualify as a regulated investment company or fails to meet this

distribution requirement. Any dividend declared by the Fund in October, November
or December of any calendar year and payable to shareholders of record on a
specified date in such a month shall be deemed to have been received by each
shareholder on December 31 of such calendar year and to have been paid by the
Fund not later than such December 31, provided that such dividend is actually
paid by the Fund during January of the following calendar year.

The Fund intends to distribute annually to its shareholders
substantially all of its investment company taxable income. The Board of
Directors of the Fund will determine annually whether to distribute any net
realized long-term capital gains in excess of net realized short-term capital
losses (including any capital loss carryovers). The Fund currently expects to
distribute any excess annually to its shareholders. However, if the Fund retains
for investment an amount equal to all or a portion of its net long-term capital
gains in excess of its net short-term capital losses and capital loss
carryovers, it will be subject to a corporate tax (currently at a rate of 35%)
on the amount retained. In that event, the Fund will designate such retained
amounts as undistributed capital gains in a notice to its shareholders who (a)
will be required to include in income for United Stares federal income tax
purposes, as long-term capital gains, their proportionate shares of the
undistributed amount, (b) will be entitled to credit their proportionate shares
of the 35% tax paid by the Fund on the undistributed amount against their United
States federal income tax liabilities, if any, and to claim refunds to the
extent their credits exceed their liabilities, if any, and (c) will be entitled
to increase their tax basis, for United States federal income tax purposes, in
their shares by an amount equal to 65% of the amount of undistributed capital
gains included in the shareholder's income. Organizations or persons not subject
to federal income tax on such capital gains will be entitled to a refund of
their pro rata share of such taxes paid by the Fund upon filing appropriate
returns or claims for refund with the Internal Revenue Service (the "IRS"). Even
if the Fund makes such an election, it is possible that it may incur an excise
tax as a result of not having distributed net capital gains.

The Code imposes a 4% nondeductible excise tax on the Fund to the
extent the Fund does not distribute by the end of any calendar year at least 98%
of its net investment income for that year and 98% of the net amount of its
capital gains (both long-and short-term) for the one-year period ending, as a
general rule, on October 31 of that year. For this purpose, however, any income
or gain retained by the Fund that is subject to corporate income tax will be
considered to have been distributed by year-end. In addition, the minimum
amounts that must be distributed in any year to avoid the excise tax will be
increased or decreased to reflect any underdistribution or overdistribution, as
the case may be, from the previous year. The Fund anticipates that it will pay
such dividends and will make such distributions as are necessary in order to
avoid the application of this tax.

With regard to the Fund's investments in foreign securities,
exchange control regulations may restrict repatriations of investment income and
capital or the

proceeds of securities sales by foreign investors such as the Fund and may limit
the Fund's ability to pay sufficient dividends and to make sufficient
distributions to satisfy the 90% and excise tax distribution requirements.

If, in any taxable year, the Fund fails to qualify as a regulated
investment company under the Code, it would be taxed in the same manner as an
ordinary corporation and distributions to its shareholders would not be
deductible by the Fund in computing its taxable income. In addition, in the
event of a failure to qualify, the Fund's distributions, to the extent derived
from the Fund's current or accumulated earnings and profits would constitute
dividends (eligible for the corporate dividends-received deduction) which are
taxable to shareholders as ordinary income, even though those distributions
might otherwise (at least in part) have been treated in the shareholders' hands
as long-term capital gains. If the Fund fails to qualify as a regulated
investment company in any year, it must pay out its earnings and profits
accumulated in that year in order to qualify again as a regulated investment
company. In addition, if the Fund failed to qualify as a regulated investment
company for a period greater than one taxable year, the Fund may be required to
recognize any net built-in gains (the excess of the aggregate gains, including
items of income, over aggregate losses that would have been realized if it had
been liquidated) in order to qualify as a regulated investment company in a
subsequent year.

The Fund's short sales against the box, if any, and transactions in
foreign currencies, forward contracts, options and futures contracts (including
options and futures contracts on foreign currencies) will be subject to
special provisions of the Code that, among other things, may affect the
character of gains and losses realized by the Fund (i.e., may affect whether
gains or losses are ordinary or capital), accelerate recognition of income to
the Fund and defer Fund losses. These rules could therefore affect the
character, amount and timing of distributions to shareholders. These provisions
also (a) will require the Fund to mark-to-market certain types of the
positions in its portfolio (i.e., treat them as if they were closed out) and
(b) may cause the Funds to recognize income without receiving cash with which
to pay dividends or make distributions in amounts necessary to satisfy the
distribution requirements for avoiding income and excise taxes. The Fund will
monitor its transactions, will make the appropriate tax elections and will make
the appropriate entries in its books and records when it acquires any foreign
currency, forward contract, option, futures contract or hedged investment in
order to mitigate the effect of these rules and prevent disqualification of the
Fund as a regulated investment company.

Passive Foreign Investment Companies. If the Fund purchases
shares in certain foreign investment entities, called "passive foreign
investment companies" (a "PFIC"), it may be subject to United States federal
income tax on a portion of any "excess distribution" or gain from the
disposition of such shares even if such income is distributed as a taxable
dividend by the Fund to its shareholders. Additional charges in the nature of
interest may be imposed on the Fund in respect of deferred taxes arising from
such distributions or gains. Any tax paid by the Fund as a result of its
ownership

of shares in a PFIC will not give rise to any deduction or credit to the Fund or
any shareholder. If the Fund were to invest in a PFIC and elected to treat the
PFIC as a "qualified electing fund" under the Code, in lieu of the foregoing
requirements, the Fund might be required to include in income each year a
portion of the ordinary earnings and net capital gains of the qualified election
fund, even if not distributed to the Fund, and such amounts would be subject to
the 90% and excise tax distribution requirements described above. In order to
make this election, the Fund would be required to obtain certain annual
information from the passive foreign investment companies in which it invests,
which may be difficult or not possible to obtain.

Recently, legislation was enacted that provides a mark-to-market
election for regulated investment companies effective for taxable years
beginning after December 31, 1997. This election would result in the Fund being
treated as if it had sold and repurchased all of the PFIC stock at the end of
each year. In this case, the Fund would report gains as ordinary income and
would deduct losses as ordinary losses to the extent of previously recognized
gains. The election, once made, would be effective for all subsequent taxable
years of the Fund, unless revoked with the consent of the IRS. By making the
election, the Fund could potentially ameliorate the adverse tax consequences
with respect to its ownership of shares in a PFIC, but in any particular year
may be required to recognize income in excess of the distributions it receives
from PFICs and its proceeds from dispositions of PFIC company stock.

Dividends and Distributions. Dividends of net investment income
and distributions of net realized short-term capital gains are taxable to a
United States shareholder as ordinary income, whether paid in cash or in shares.
Distributions of net-long-term capital gains, if any, that the Fund designates
as capital gains dividends are taxable as long-term capital gains, whether paid
in cash or in shares and regardless of how long a shareholder has held shares of
the Fund. Dividends and distributions paid by the Fund (except for the portion
thereof, if any, attributable to dividends on stock of U.S. corporations
received by the Fund) will not qualify for the deduction for dividends received
by corporations. Distributions in excess of the Fund's current and accumulated
earnings and profits will, as to each shareholder, be treated as a tax-free
return of capital, to the extent of a shareholder's basis in his shares of the
Fund, and as a capital gain thereafter (if the shareholder holds his shares of
the Fund as capital assets).

Shareholders receiving dividends or distributions in the form
of additional shares should be treated for United States federal income tax
purposes as receiving a distribution in the amount equal to the amount of
money that the shareholders receiving cash dividends or distributions will
receive, and should have a cost basis in the shares received equal to such
amount.

Investors considering buying shares just prior to a dividend or
capital gain distribution should be aware that, although the price of shares
just purchased at that time may reflect the amount of the forthcoming
distribution, such dividend or distribution may

nevertheless be taxable to them.

If the Fund is the holder of record of any stock on the record
date for any dividends payable with respect to such stock, such dividends are
included in the Fund's gross income not as of the date received but as of the
later of (a) the date such stock became ex-dividend with respect to such
dividends (i.e., the date on which a buyer of the stock would not be entitled to
receive the declared, but unpaid, dividends) or (b) the date the Fund acquired
such stock. Accordingly, in order to satisfy its income distribution
requirements, the Fund may be required to pay dividends based on anticipated
earnings, and shareholders may receive dividends in an earlier year than would
otherwise be the case.

Sales of Shares. Upon the sale or exchange of his shares, a
shareholder will realize a taxable gain or loss equal to the difference
between the amount realized and his basis in his shares. Such gain or loss
will be treated as capital gain or loss, if the shares are capital assets in the
shareholder's hands, and will be long-term capital gain or loss if the shares
are held for more than one year and short-term capital gain or loss if the
shares are held for one year or less. Any loss realized on a sale or exchange
will be disallowed to the extent the shares disposed of are replaced, including
replacement through the reinvesting of dividends and capital gains
distributions in the Fund, within a 61-day period beginning 30 days before and
ending 30 days after the disposition of the shares. In such a case, the basis of
the shares acquired will be increased to reflect the disallowed loss. Any loss
realized by a shareholder on the sale of a Fund share held by the shareholder
for six months or less will be treated for United States federal income tax
purposes as a long-term capital loss to the extent of any distributions or
deemed distributions of long-term capital gains received by the shareholder with
respect to such share.

Foreign Taxes. Income received by the Fund from non-U.S. sources
may be subject to withholding and other taxes imposed by other countries.
Because it is not expected that more than 50 percent of the value of the Fund's
total assets at the close of its taxable year will consist of stock and
securities of non-U.S. corporations, it is not expected that the Fund will be
eligible to elect to "pass through" to the Fund's shareholders the amount of
foreign income and similar taxes paid by the Fund. In the absence of such an
election, the foreign taxes paid by the Fund will reduce its investment company
taxable income, and distributions of investment company taxable income received
by the Fund from non-US sources will be treated as United States source income.

Backup Withholding. The Fund may be required to withhold, for
United States federal income tax purposes, 31% of the dividends and
distributions payable to shareholders who fail to provide the Fund with their
correct taxpayer identification number or to make required certifications, or
who have been notified by the IRS that they are subject to backup withholding.
Certain shareholders are exempt from backup

withholding. Backup withholding is not an additional tax and any amount withheld
may be credited against a shareholder's United States federal income tax
liabilities.

Notices. Shareholders will be notified annually by the Fund as to
the United States federal income tax status of the dividends, distributions
and deemed distributions made by the Fund to its shareholders. Furthermore,
shareholders will also receive, if appropriate, various written notices after
the close of the Fund's taxable year regarding the United States federal income
tax status of certain dividends, distributions and deemed distributions that
were paid (or that are treated as having been paid) by the Fund to its
shareholders during the preceding taxable year.

Other Taxation

Distributions also may be subject to additional state, local
and foreign taxes depending on each shareholder's particular situation.

THE FOREGOING IS ONLY A SUMMARY OF CERTAIN MATERIAL TAX CONSEQUENCES EFFECTING
THE FUND AND ITS SHAREHOLDERS. SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX
ADVISERS WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF AN
INVESTMENT IN THE FUND.

DETERMINATION OF PERFORMANCE

From time to time, the Fund may quote the total return of its
Common Shares and/or Advisor Shares in advertisements or in reports and other
communications to shareholders. The average annual total return for Common
Shares of the Fund for the one-year period ended February 28, 1997 was -0.99%
and for Advisor Shares -1.39%. The average annual total return for Common Shares
for the five-year period ended February 28, 1997 was 14.22% (14.21% without
waivers). The average annual total return for Common Shares for the period
beginning on the commencement of operations of the Warburg Pincus Growth &
Income Fund investment portfolio of the RBB Fund (October 1988) and ending
February 28, 1997 was 13.27% (12.49% without waivers). The average annual total
return for Advisor Shares for the period beginning on the commencement of
offering of Advisor Shares by the Warburg Pincus Growth & Income Fund investment
portfolio of the RBB Fund (May 1995) and ending February 28, 1997 was 7.61%.
Average annual total return is calculated by finding the average annual
compounded rates of return for the one-, five- and ten- (or such shorter period
as the relevant class of shares has been offered) year periods that would
equate the initial amount invested to the ending redeemable value according to
the following formula: P (1 + T)'pp'n = ERV. For purposes of this formula, "P"
is a hypothetical investment of $1,000; "T" is average annual total return; "n"
is number of years; and "ERV" is the ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the one-, five- or ten-year periods (or
fractional portion thereof). Total return or "T" is computed by finding the
average annual change in the value of an initial $1,000 investment over the
period and assumes that all dividends and distributions are reinvested during
the period.

The Fund may advertise, from time to time, comparisons of the
performance of its Common Shares and/or Advisor Shares with that of one or more
other mutual funds with similar investment objectives. The Fund may advertise
average annual calendar year-to-date and calendar quarter returns, which are
calculated according to the formula set forth in the preceding paragraph, except
that the relevant measuring period would be the number of months that have
elapsed in the current calendar year or most recent three months, as the case
may be. Investors should note that this performance may not be representative of
the Fund's total return in longer market cycles.

The Fund may also advertise its yield. The yield for the Common
Shares of the Warburg Pincus Growth & Income Fund investment portfolio of the
RBB Fund for the one-month period ended February 28, 1997 was 1.23%, and
for the Advisor Shares was 0.84%. Yield is calculated by annualizing the net
investment income generated by the Fund over a specified thirty-day period
according to the following formula:

YIELD = 2[(a-b + 1)'pp'6 -1]
---
cd

For purposes of this formula: "a" is dividends and interest earned during the
period; "b" is expenses accrued for the period (net of reimbursements); "c" is
the average daily number of shares outstanding during the period that were
entitled to receive dividends; and "d" is the maximum offering price per share
on the last day of the period.

The performance of a class of Fund shares will vary from time to
time depending upon market conditions, the composition of the Fund's portfolio
and operating expenses allocable to it. As described above, total return is
based on historical earnings and is not intended to indicate future performance.
Consequently, any given performance quotation should not be considered as
representative of performance for any specified period in the future.
Performance information may be useful as a basis for comparison with other
investment alternatives. However, the Fund's performance will fluctuate, unlike
certain bank deposits or other investments which pay a fixed yield for a stated
period of time. Any fees charged by Institutions or other institutional
investors directly to their customers in connection with investments in Fund
shares are not reflected in the Fund's total return, and such fees, if charged,
will reduce the actual return received by customers on their investments.

In addition, reference may be made in advertising a class of Fund
shares to opinions of Wall Street economists and analysts regarding economic
cycles and their effects historically on the performance of small companies,
both as a class and relative to other investments. The Fund may also discuss its
beta, or volatility relative to the market, and make reference to its relative
performance in various market cycles in the United States.

INDEPENDENT ACCOUNTANTS AND COUNSEL

Coopers & Lybrand L.L.P. ("Coopers & Lybrand"), with principal
offices at 2400 Eleven Penn Center, Philadelphia, Pennsylvania 19103, serves as
independent

accountants for the Fund. The financial statements for the Fund that
are incorporated by reference in this Statement of Additional Information have
been audited by Coopers & Lybrand, with the exception of those financial
statements for the six months ended February 28, 1997 which are unaudited, and
have been included herein by reference in reliance upon the report of such firm
of independent accountants given upon their authority as experts in accounting
and auditing.

Willkie Farr & Gallagher serves as counsel for the Fund as well
as counsel to Warburg, Counsellors Service and Counsellors Securities.

MISCELLANEOUS

As of July 31, 1997, the names, addresses and percentage
ownership of each person that owned 5% or more of the outstanding shares of the
Fund were as follows:

<TABLE>
<CAPTION>
Percent owned as of
Type of Shares Name and Address July 31, 1997
- -------------- ---------------- ----------------
<S> <C> <C>
Common Shares Charles Schwab & Co Inc. Reinvest 25.89%
Account Attn Mutual Funds Dept
101 Montgomery St
San Francisco, CA 94104-4122

Nat'l Financial Svcs Corp 20.27%
FBO Customers
PO Box 3908
Church St Station
New York, NY 10008-3908

Advisor Shares Connecticut General Life Ins Co 99.47%
On Behalf Of Its Separate Accounts
55S c/o Melissa Spencer M110
Cigna Corp
PO Box 2975
Hartford, CT 06104-2975
</TABLE>

FINANCIAL STATEMENTS

The Fund's audited annual reports dated August 31, 1996 and
unaudited semi-annual reports dated February 28, 1997, which either accompany
this Statement of Additional Information or have previously been provided to the
investor to whom this Statement of Additional Information is being sent, are
incorporated herein by reference with respect to all information regarding the
Fund included therein. The Fund will furnish without charge a copy of the annual
reports upon request by calling the Fund at (800) 927-2874.

APPENDIX
DESCRIPTION OF RATINGS

Commercial Paper Ratings

Commercial paper rated A-1 by Standard & Poor's Ratings
Services ("S&P") indicates that the degree of safety regarding timely payment is
strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign designation. Capacity for timely
payment on commercial paper rated A-2 is satisfactory, but the relative degree
of safety is not as high as for issues designated A-1.

The rating Prime-1 is the highest commercial paper rating
assigned by Moody's Investors Services, Inc. ("Moody's"). Issuers rated Prime-1
(or related supporting institutions) are considered to have a superior capacity
for repayment of short-term promissory obligations. Issuers rated Prime-2 (or
related supporting institutions) are considered to have a strong capacity for
repayment of short-term promissory obligations. This will normally be evidenced
by many of the characteristics of issuers rated Prime-1 but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternative liquidity is maintained.

Corporate Bond Ratings

The following summarizes the ratings used by S&P for corporate
bonds:

AAA - This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to pay interest and repay
principal.

AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from AAA issues only in small degree.

A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher-rated
categories.

BBB - This is the lowest investment grade. Debt rated BBB is
regarded as having an adequate capacity to pay interest and repay principal.
Although it normally exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for bonds in this category than for
bonds in higher rated categories.

BB, B, CCC, CC and C - Debt rated BB and B are regarded, on
balance, as predominately speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
represents a lower degree of speculation than B, and CCC the highest degree of
speculation. While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk

exposures to adverse conditions.

BB - Debt rated BB has less near-term vulnerability to default
than other speculative issues. However, they face major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions, which could
lead to inadequate capacity to meet timely interest and principal payments. The
BB rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB rating.

B - Debt rated B has a greater vulnerability to default but
currently have the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair capacity
or willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied BB or BB- rating.

CCC - Debt rated CCC has a currently identifiable vulnerability
to default and is dependent upon favorable business, financial and economic
conditions to meet timely payment of interest and repayment of principal. In the
event of adverse business, financial or economic conditions, it is not likely to
have the capacity to pay interest and repay principal. The CCC rating category
is also used for debt subordinated to senior debt that is assigned an actual or
implied B or B- rating.

CC - This rating is typically applied to debt subordinated to
senior debt that is assigned an actual or implied CCC rating.

C - This rating is typically applied to debt subordinated to
senior debt which is assigned an actual or implied CCC- debt rating. The C
rating may be used to cover a situation where a bankruptcy petition has been
filed, but debt service payments are continued.

Additionally, the rating CI is reserved for income bonds on which
no interest is being paid. Such debt is rated between debt rated C and debt
rated D.

To provide more detailed indications of credit quality, the
ratings may be modified by the addition of a plus or minus sign to show relative
standing within this major rating category.

D - Debt rated D is in payment default. The D rating category is
used when interest payments or principal payments are not made on the date due
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service payments are
jeopardized.

The following summarizes the ratings used by Moody's for
corporate bonds:

Aaa - Bonds that are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or
exceptionally stable margin and principal is secure.

A-2

While the various protective elements are likely to change, such changes as can
be visualized are most unlikely to impair the fundamentally strong position of
such issues.

Aa - Bonds that are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are generally
known as high grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Baa - Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well assured. Often the
protection of interest and principal payments may be very moderate and thereby
not well safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.

B - Bonds which are rated B generally lack characteristics of
desirable investments. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Moody's applies numerical modifiers (1, 2 and 3) with respect to
the bonds rated "Aa" through "B." The modifier 1 indicates that the bond being
rated ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the bond ranks
in the lower end of its generic rating category.

Caa - Bonds that are rated Caa are of poor standing. These issues
may be in default or present elements of danger may exist with respect to
principal or interest.

Ca - Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C - Bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

A-3

<PAGE>
<PAGE>
Part C

Information required to be included in Part C is set forth
after the appropriate item, so numbered, in Part C to this Registration
Statement.

PART C

OTHER INFORMATION

<TABLE>
<S> <C>
Item 24. Financial Statements and Exhibits

(a) Financial Statements

(1) Financial Statements included in Part A

(a) Financial Highlights

(2) Financial Statements included in Part
B (incorporated by reference to the Fund's
annual report dated August 31, 1996)
(a) Report of Coopers & Lybrand L.L.P.,
Independent Accountants
(b) Statement of Net Assets
(c) Statement of Operations
(d) Statement of Changes in Net Assets
(e) Financial Highlights
(f) Notes to Financial Statements

(3) Financial Statements included in Part B (incorporated by
reference to the Fund's semi-annual report dated
February 28, 1997)
(a) Statement of Net Assets
(b) Statement of Operations
(c) Statement of Changes in Net Assets
(d) Financial Highlights
(e) Notes to Financial Statements

(b) Exhibits:

Exhibit No. Description of Exhibit

1 Articles of Incorporation.(1)

2 By-Laws.(1)

3 Not applicable.

4 Forms of Share Certificates.(2)

5 Form of Investment Advisory Agreement.(3)

6 Form of Distribution Agreement.(3)

7 Not applicable.

8(a) Form of Custodian Agreement with PNC Bank, National Association.(2)
</TABLE>

C-1

<TABLE>
<S> <C>
(b) Form of Custodian Agreement with State Street Bank and Trust Company.(4)

9(a) Form of Transfer Agency Agreement.(2)

(b) Form of Co-Administration Agreement with Counsellors Funds Service,
Inc.(2)

(d) Forms of Services Agreements.(2)

10(a) Consent of Willkie Farr & Gallagher, counsel to the Fund.(5)

(b) Opinion of Willkie Farr & Gallagher, counsel to the Fund.(7)

11 Consent of Coopers & Lybrand L.L.P., Independent Accountants.(5)

12 Not Applicable.

13 Form of Purchase Agreement.(3)

14 Not applicable.

15(a) Form of Distribution Plan.(6)

(b) Rule 18f-3 Plan.(7)

16 Schedule for Performance Information.(5)

17 Financial Data Schedule.(5)
</TABLE>

- --------------
(1) Incorporated by reference to Registrant's Registration Statement
on Form N-1A, filed on January 30, 1996.

(2) Incorporated by reference; material provisions of this exhibit
substantially similar to those of the corresponding exhibit in
Pre-Effective Amendment No. 2 to the Registration Statement
on Form N-1A of Warburg, Pincus Post-Venture Capital Fund,
Inc., filed on September 22, 1995 (Securities Act File No. 33-61225).

C-2

<TABLE>
<S> <C>
(3) Incorporated by reference to Registrant's Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A, filed March 1, 1996 (Securities Act File No.
333-00527).

(4) Incorporated by reference; material provisions of this exhibit substantially similar
to those of the corresponding exhibit in Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of Warburg, Pincus Trust filed on June 14, 1995
(Securities Act File No. 33-58125).

(5) Filed herewith.

(6) Incorporated by reference; material provisions of this exhibit substantially similar
to the corresponding exhibit in Pre-Effective Amendment No. 1 to the Registration
Statement on Form N-1A of Warburg, Pincus Japan Growth Fund, Inc., filed on December
18, 1995 (Securities Act File No. 33-63655).

(7) Incorporated by reference to Post-Effective Amendment No. 2 to Registrant's
Registration Statement on Form N-1A, filed on December 30, 1996.

Item 25. Persons Controlled by or Under Common Control with Registrant
</TABLE>

From time to time, Warburg, Pincus Counsellors, Inc.
("Warburg") may be deemed to control the Fund and other registered investment
companies it advises through its beneficial ownership of more than 25% of the
relevant fund's shares on behalf of discretionary advisory clients. Warburg has
four wholly-owned subsidiaries: Counsellors Securities Inc., a New York
Corporation; Counsellors Funds Service Inc., a New York corporation; Counsellors
Agency Inc., a New York corporation; and Warburg, Pincus Investments
International (Bermuda), Ltd., a Bermuda corporation.

Item 26. Number of Holders of Securities

On July 31, 1997, there were 18,121 holders of Common Shares
and 21 holders of Advisor Shares of the Registrant.

Item 27. Indemnification

Registrant, officers and directors of Warburg, of Counsellors
Securities Inc. ("Counsellors Securities") and of Registrant are covered by
insurance policies indemnifying them for liability incurred in connection with
the operation of Registrant. Discussion of this coverage is incorporated by
reference to Item 27 of Part C of the Registration Statement on Form N-1A of
Warburg, Pincus Small Company Value Fund, Inc. (Securities Act No.
33-63653; Investment Company Act No. 811-07375), filed on October 25, 1995.

C-3

Item 28. Business and Other Connections of
Investment Adviser

Warburg is a wholly owned subsidiary of Warburg, Pincus
Counsellors G.P., acts as investment adviser to Registrant. Warburg renders
investment advice to a wide variety of individual and institutional clients. The
list required by this Item 28 of officers and directors of Warburg, together
with information as to their other business, profession, vocation or employment
of a substantial nature during the past two years, is incorporated by reference
to Schedules A and D of Form ADV filed by Warburg (SEC File No. 801-07321).

Item 29. Principal Underwriter

(a) Counsellors Securities will act as distributor for
Registrant. Counsellors Securities currently acts as distributor for The RBB
Fund, Inc.; Warburg Pincus Balanced Fund; Warburg Pincus Capital Appreciation
Fund; Warburg Pincus Cash Reserve Fund; Warburg Pincus Emerging Growth Fund;
Warburg Pincus Emerging Markets Fund; Warburg Pincus Fixed Income Fund; Warburg
Pincus Global Fixed Income Fund; Warburg Pincus Global Post-Venture Capital
Fund; Warburg Pincus Health Sciences Fund; Warburg Pincus Institutional Fund,
Inc.; Warburg Pincus Intermediate Maturity Government Fund; Warburg Pincus
International Equity Fund; Warburg Pincus Japan Growth Fund; Warburg Pincus
Japan OTC Fund; Warburg Pincus New York Intermediate Municipal Fund; Warburg
Pincus New York Tax Exempt Fund; Warburg Pincus Post-Venture Capital Fund;
Warburg Pincus Small Company Growth Fund; Warburg Pincus Small Company Value
Fund; Warburg Pincus Strategic Value Fund and Warburg Pincus Trust.

(b) For information relating to each director and officer of
Counsellors Securities, reference is made to Form BD (SEC File No. 15-654) filed
by Counsellors Securities under the Securities Exchange Act of 1934.

Item 30. Location of Accounts and Records

(1) Warburg, Pincus Growth & Income Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(Registrant's Articles of Incorporation, By-laws and
minute books)

(2) Warburg, Pincus Counsellors, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(records relating to its functions as investment adviser)

C-4

(3) Counsellors Funds Service, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(records relating to its functions as co-administrator)

(4) PFPC Inc.
400 Bellevue Parkway
Wilmington, Delaware 19809
(records relating to its functions as co-administrator)

(5) Counsellors Securities Inc.
466 Lexington Avenue
New York, New York 10017-3147
(records relating to its functions as distributor)

(6) PNC Bank, National Association
1600 Market Street
Philadelphia, Pennsylvania 19103
(records relating to its functions as custodian)

(7) State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(records relating to its functions as custodian,
shareholder servicing agent, transfer agent and
dividend disbursing agent)

Item 31. Management Services

Not applicable.

Item 32. Undertakings

(a) Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the question of removal of a
director or directors of Registrant when requested in writing to do so by the
holders of at least 10% of Registrant's outstanding shares. Registrant
undertakes further, in connection with the meeting, to comply with the
provisions of Section 16(c) of the 1940 Act relating to communications with the
shareholders of certain common-law trusts.

(b) Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders, upon request and without charge.

C-5

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant
has duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and the State of New York, on the 25th day of August, 1997.

WARBURG, PINCUS BALANCED FUND, INC.

By:/s/ Eugene L. Podsiadlo
--------------------------------
Eugene L. Podsiadlo

* 1 moved from here; text not shown
President

Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment has been signed below by the following persons in the
capacities and on the date indicated:

Signature Title Date
- --------- ----- -------
<S> <C> <C>

/s/ John L. Furth Chairman of the August 25, 1997
- ---------------------------
John L. Furth Board of Directors

/s/ Eugene L. Podsiadlo President August 25, 1997
- ---------------------------
Eugene L. Podsiadlo

/s/ Howard Conroy Vice President August 25, 1997
- --------------------------- and Chief
Howard Conroy Financial Officer

/s/ Daniel S. Madden Treasurer and August 25, 1997
- --------------------------- Chief Accounting
Daniel S. Madden Officer

/s/ Richard N. Cooper Director August 25, 1997
- ---------------------------
Richard N. Cooper

/s/ Donald J. Donahue Director August 25, 1997
- ---------------------------
Donald J. Donahue

/s/ Jack W. Fritz Director August 25, 1997
- ---------------------------
Jack W. Fritz

/s/ Thomas A. Melfe Director August 25, 1997
- ---------------------------
Thomas A. Melfe

/s/ Arnold M. Reichman Director August 25, 1997
- -----------------------------
** 1 Arnold M. Reichman

/s/ Alexander B. Trowbridge Director August 25, 1997
- ----------------------------
Alexander B. Trowbridge
</TABLE>

INDEX TO EXHIBITS

<TABLE>
<S> <C>
Exhibit No. Description of Exhibit

10(a) Consent of Willkie Farr & Gallagher, counsel to the Fund.

11 Consent of Coopers & Lybrand L.L.P., Independent Accountants.

16 Schedule for Performance Information.

17 Financial Data Schedule.
</TABLE>

STATEMENT OF DIFFERENCES
------------------------

The trademark symbol shall be expressed as ........................'tm'
The dagger symbol shall be expressed as ...........................'D'
Characters normally expressed as superscript shall be preceded ....'pp'

<PAGE>

CONSENT OF COUNSEL

Warburg, Pincus Growth & Income Fund, Inc.

We hereby consent to being named in the Statement of Additional
Information included in Post-Effective Amendment No. 3 (the "Amendment") to the
Registration Statement on Form N-1A (Securities Act File No. 333-00527,
Investment Company Act File No. 811-07515) of Warburg, Pincus Growth & Income
Fund, Inc. (the "Fund") under the caption "Independent Accountants and Counsel"
and to the Fund's filing a copy of this Consent as an exhibit to the Amendment.

WILLKIE FARR & GALLAGHER
---------------------------------
Willkie Farr & Gallagher

August 25, 1997
New York, New York

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 3 to the Registration Statement of the Warburg Pincus Growth &
Income Fund, Inc. on Form N-1A (File No. 333-00527) of our report dated October
18, 1996 on our audit of the financial statements and financial highlights of
the Fund, which report is included in the Annual Report to Shareholders for the
year ended August 31, 1996 which is incorporated by reference in the
Post-Effective Amendment to the Registration Statement. We also consent to the
reference to our Firm under the captions "Financial Highlights" in the
prospectus and "Independent Accountants and Counsel" in the Statement of
Additional Information.

COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
August 22, 1997

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Warburg Pincus Funds
Schedule 16 Calculations

Warburg Pincus Growth & Income Fund
For the Period Inception to February 28, 1997
Common Shares

Annualized Total Return With Waivers:
((28,498-10,000)'pp'1/8.40548 -1 = 13. 27%

Annualized Total Return Without Waivers:
((26,886-10,000)'pp'1/8.40548 -1 = 12.49%

Advisor Shares
Annualized Total Return With Waivers:
((11,410-l0,000)'pp'1/1.79726 -1 = 7.61%

Annualized Total Return Without Waivers:
((11,410-10,000)'pp'1/1.79726 -1 = 7.61%

For the Period 5 Years ended February 28, 1997
Common Shares
Annualized Total Return With Waivers:
((19,437-10,000)'pp'1/5 -1 = 14.22%

Annualized Total Return Without Waivers:
((19,432-10,000)'pp'1/5 -1 = 14.21%

For the Period 1 Year ended February 28, 1997
Common Shares

Annualized Total Return With Waivers:
((9,901-10,000)'pp'1/1 -1 = -.99%

Annualized Total Return Without Waivers:
((9,901-10,000)'pp'1/1 -1 = -.99%

Advisor Shares

Annualized Total Return With Waivers:
((9,861-10,000)'pp'1/1 -1 = -1.39%

Annualized Total Return Without Waivers:
((9,861-10,000)'pp'1/1 -1 = -1.39%

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<PAGE>

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<PAGE>