WARBURG PINCUS GLOBAL POST VENTURE CAPITAL FUND INC, N-1A EL/A, 1996-09-20

WARBURG PINCUS GLOBAL POST VENTURE CAPITAL FUND INC
N-1A EL/A, 1996-09-20

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<PAGE>1

As filed with the U.S. Securities and Exchange Commission
on September 20, 1996

Securities Act File No. 333-08459
Investment Company Act File No. 811-07715

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

FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. 1 [X]

Post-Effective Amendment No. __ [ ]

and/or

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

Amendment No. 1 [X]
(Check appropriate box or boxes)

Warburg, Pincus Global Post-Venture Capital Fund, Inc.
.......................................
(Exact Name of Registrant as Specified in Charter)

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

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

Mr. Eugene P. Grace
Warburg, Pincus Global Post-Venture Capital 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

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Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this Registration Statement.

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

Proposed Maximum Proposed Maximum
Title of Securities Amount Being Offering Price per Aggregate Amount of
Being Registered Registered Unit Offering Price Registration Fee
------------------------ ------------------------ --------------------- ------------------- ---------------------
<S> <C> <C> <C> <C>
Shares of beneficial
interest, $.001 par
value per share Indefinite* Indefinite* Indefinite* $500

</TABLE>

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* An indefinite number of shares of common stock of the Registrant is
being registered by this Registration Statement pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended (the "1940
Act").

The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended (the "1933 Act"), or
until the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.

<PAGE>3

WARBURG, PINCUS GLOBAL POST-VENTURE CAPITAL FUND, INC.

FORM N-1A

CROSS REFERENCE SHEET

Part A
Item No. Prospectus Heading
- -------- ------------------

1. Cover Page......................... Cover Page

2. Synopsis........................... The Fund's Expenses

3. Condensed Financial Information.... Financial Highlights

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

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

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

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

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

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

<PAGE>4

Part B Statement of Additional
Item No. Information Heading
- -------- -----------------------
10. Cover Page......................... Cover Page

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

12. General Information and History.... Management of the Fund

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

14. Management of the Registrant....... Management of the Fund

15. Control Persons and Principal
Holders of Securities.............. Management of the Fund; See
Prospectus-- "Management of the Fund"

16. Investment Advisory and
Other Services..................... Management of the Fund; See
Prospectus-- "Management of the Fund"

17. Brokerage Allocation
and Other Practices................ Investment Policies --
Portfolio Transactions See
Prospectus-- "Portfolio Transactions
and Turnover Rate"

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

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

<PAGE>5

Exchange Shares," "Net Asset Value"

20. Tax Status........................ Additional Information Concerning
Taxes; See Prospectus--"Dividend,
Distributions and Taxes"

21. Underwriters...................... Investment Policies-- Portfolio
Transactions; See Prospectus--
"Management of the Fund"

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

23. Financial Statements.............. Report of Independent Accountants;
Financial Statements

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.

<PAGE>

PROSPECTUS
September 30, 1996
WARBURG PINCUS
GLOBAL POST-VENTURE CAPITAL FUND

[Logo]
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<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.

<PAGE>

SUBJECT TO COMPLETION, DATED SEPTEMBER 20, 1996

PROSPECTUS September 30, 1996

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

WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND seeks long-term growth of
capital. The Fund will pursue its objective by investing primarily in equity
securities of U.S. and foreign issuers in their post-venture capital stage of
development and pursues an aggressive investment strategy. Because of the nature
of the Fund's investments and certain strategies it may use, an investment in
the Fund involves certain risks and may not be appropriate for all investors.

NO LOAD CLASS OF COMMON SHARES
- --------------------------------------------------------------------------------

The Fund offers two classes of shares. A class of Common Shares that is 'no
load' 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 OneSourceTM Program; Fidelity
Brokerage Services, Inc. FundsNetworkTM Program; Jack White & Company, Inc.; and
Waterhouse Securities, Inc. Common Shares of the Fund are subject to a 12b-1 fee
of .25% per annum.

LOW MINIMUM INVESTMENT
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The minimum initial investment in the Fund is $2,500 ($500 for an IRA or Uniform
Gifts 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.'

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 the Statement of Additional Information, has been filed with
the Securities and Exchange Commission (the 'SEC') 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
to investors 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. The Statement of Additional
Information, 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 GOVERNMENT 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
- --------------------------------------------------------------------------------

The Warburg Pincus Global Post-Venture Capital Fund (the 'Fund') currently
offers two separate classes of shares: Common Shares and Advisor Shares. For a
description of Advisor Shares see 'General Information.' Common Shares pay the
Fund's distributor a 12b-1 fee. See 'Management of the Funds -- Distributor.'

<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........................................................ .69%
12b-1 Fees............................................................. .25%
Other Expenses......................................................... .71%
---
Total Fund Operating Expenses*......................................... 1.65%
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................................................................ $17
3 years............................................................... $52
</TABLE>

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

* Absent the waiver of fees by the Fund's investment adviser and
co-administrator, Management Fees would equal 1.25%, Other Expenses would
equal .75% and Total Fund Operating Expenses would equal 2.25%. Other
Expenses for the Fund are based on annualized estimates of expenses for the
fiscal year ending October 31, 1997, net of any fee waivers or expense
reimbursements. The investment adviser and co-administrator are under no
obligation to continue these waivers.

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

The expense table shows the costs and expenses that an investor will bear
directly or indirectly as a Common Shareholder of the Fund. Certain broker-
dealers and financial institutions also may charge their clients fees in
connection with investments in the 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, the Fund's actual
performance will vary and may result in a return greater or less than 5%.
Long-term shareholders 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').

2
<PAGE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------

Because of the nature of the Fund's investments and certain strategies it may
use, such as investing in Private Funds (as defined below), an investment in the
Fund should be considered only for the aggressive portion of an investor's
portfolio and may not be appropriate for all investors.

The Fund seeks long-term growth of capital. This objective is a fundamental
policy and may not be amended without first obtaining the approval of a majority
of the outstanding shares of the Fund. Any investment involves risk and,
therefore, there can be no assurance that the 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
investment objective by investing primarily in equity securities of U.S. and
foreign issuers considered by Warburg, Pincus Counsellors, Inc., the Fund's
investment adviser ('Warburg'), to be in their post-venture capital stage of
development and pursues an aggressive investment strategy. The Fund intends to
invest in post-venture capital companies, as defined below, traded on national
securities exchanges and in over-the-counter markets and other public markets in
various developed countries, including the United States, the United Kingdom,
continental Europe and Japan, as well as emerging securities markets.

Although the Fund may invest up to 10% of its assets in venture capital and
other investment funds, the Fund is not designed primarily to provide venture
capital financing. Rather, under normal market conditions, the Fund will invest
at least 65% of its total assets in equity securities of 'post-venture capital
companies' located in at least three countries, including the United States. A
post-venture capital company is a company that has received venture capital
financing either (a) during the early stages of the company's existence or the
early stages of the development of a new product or service or (b) as part of a
restructuring or recapitalization of the company. The investment of venture
capital financing, distribution of such company's securities to venture capital
investors, or initial public offering ('IPO'), whichever is later, will have
been made within ten years prior to the Fund's purchase of the company's
securities. The Fund currently intends to invest at least 35% of total assets in
non-U.S. post-venture capital and other companies. A company will be considered
to be located in the country where (i) the company is organized, (ii) where its
principal business activities are conducted and where at least 50% of its
revenues or profits from goods produced and sold are derived, investments are
made or services are performed or (iii) where the principal trading market for
the company's securities is located.

Fortune 500 or the Morgan Stanley Capital International Europe, Australasia and
Far East ('EAFE') Index. Venture capitalists finance start-up companies,
companies in the early stages of developing new products or services and
companies undergoing a restructuring or recapitalization, since these companies
may not have access to conventional forms of financing (such as bank loans or
public issuances of stock). Venture capitalists may hold substantial positions
in companies that may have been acquired at prices significantly below the
initial public offering price. This may create a potential adverse impact in the
short-term on the market price of a company's stock due to sales in the open
market by a venture capitalist or others who acquired the stock at lower prices
prior to the company's IPO. Warburg will consider the impact of such sales in
selecting post-venture capital investments. Venture capitalists may be
individuals or funds organized by venture capitalists which are typically
offered only to large institutions, such as pension funds and endowments, and
certain accredited investors. Outside of the United States, venture capitalists
may also consist of merchant banks and other banking institutions that provide
venture capital financing in a manner similar to U.S. venture capitalists.
Venture capital participation in a company is often reduced when the company
engages in an IPO of its securities or when it is involved in a merger, tender
offer or acquisition.

Warburg has experience in researching smaller companies, companies in the
early stages of development and venture capital-financed companies. Its team of
analysts, led by Elizabeth Dater, portfolio manager of the Fund, regularly
monitors portfolio companies whose securities are held by over 250 of the larger
domestic venture capital funds. Ms. Dater, also a portfolio manager of the
Warburg Pincus Post-Venture Capital Fund, has managed post-venture equity
securities in separate accounts for institutions since 1989 and currently
manages over $1 billion of such assets for investment companies and other
institutions. Robert Janis, an associate portfolio manager and research analyst
for the Fund, is also an associate portfolio manager and research analyst for
the Warburg Pincus Post-Venture Capital Fund. Warburg's international equity
management team manages over $5 billion in assets for investment companies and
separate accounts. Managers travel world-wide to meet with corporate management
as well as government and economic leaders. The managers evaluate each company's
value as a going concern as if they were buying the company itself, an approach
similar to that employed by venture capital and post-venture capital investors.
Harold Ehrlich, an associate portfolio manager and research analyst for the
Fund, is also an associate portfolio manager and research analyst for the
Warburg Pincus International Equity Fund and other international Warburg Pincus
Funds.

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companies in the venture capital or post-venture capital stages of development
or (b) companies engaged in special situations or changes in corporate control,
including buyouts. In selecting Private Funds for investment, Abbott Capital
Management, L.P., the Fund's sub-investment adviser with respect to Private
Funds ('Abbott'), attempts to invest in a mix of Private Funds that will provide
an above average internal rate of return (i.e., the discount rate at which the
present value of an investment's future cash inflows (dividend income and
capital gains) are equal to the cost of the investment). Warburg believes that
the Fund's investments in Private Funds offers individual investors a unique
opportunity to participate in venture capital and other private investment
funds, providing access to investment opportunities typically available only to
large institutions and accredited investors. Although the Fund's investments in
Private Funds are limited to a maximum of 10% of the Fund's assets, these
investments are highly speculative and volatile and may produce gains or losses
in this portion of the Fund that exceed those of the Fund's other holdings and
of more mature companies generally.

Because Private Funds generally are investment companies for purposes of the
Investment Company Act of 1940, as amended (the '1940 Act'), the Fund's ability
to invest in them will be limited. In addition, Fund shareholders will remain
subject to the Fund's expenses while also bearing their pro rata share of the
operating expenses of the Private Funds. The ability of the Fund to dispose of
interests in Private Funds is very limited and will involve the risks described
under 'Risk Factors and Special Considerations -- Non-Publicly Traded
Securities; Rule 144A Securities.' In valuing the Fund's holdings of interests
in Private Funds, the Fund will be relying on the most recent reports provided
by the Private Funds themselves prior to calculation of the Fund's net asset
value. These reports, which are provided on an infrequent basis, often depend on
the subjective valuations of the managers of the Private Funds and, in addition,
would not generally reflect positive or negative subsequent developments
affecting companies held by the Private Fund. See 'Net Asset Value.' Debt
securities held by a Private Fund will tend to be rated below investment grade
and may be rated as low as C by Moody's Investors Service, Inc. ('Moody's') or D
by Standard & Poor's Ratings Group ('S&P'). For a discussion of the risks of
investing in below investment grade debt, see 'Investment Policies -- Below
Investment Grade Debt Securities' in the Statement of Additional Information.
For a discussion of the possible tax consequences of investing in foreign
Private Funds, see 'Additional Information Concerning Taxes -- Investment in
Passive Foreign Investment Companies' in the Statement of Additional
Information.

<PAGE>
<PAGE>
opportunities and other factors. The Fund's illiquid assets, including Private
Funds and other non-publicly traded securities, may not exceed 15% of the Fund's
net assets.

OTHER STRATEGIES. The Fund will invest in securities of post-venture capital
companies that are traded on a national securities exchange or in an organized
over-the-counter market, such as The Nasdaq Stock Market, Inc., the Japan
Securities Dealers Association Automated Quotation System ('JASDAQ'), the
European Association of Securities Dealers Automated Quotation ('Easdaq') and
the U.K. Alternative Investment Market ('AIM'). The Fund may invest up to 35% of
its assets in exchange-traded and over-the-counter securities that do not meet
the definition of post-venture capital companies. Up to 10% of the Fund's assets
may be invested, directly or through Private Funds, in securities of issuers
engaged at the time of purchase in 'special situations,' such as a restructuring
or recapitalization; an acquisition, consolidation, merger or tender offer; a
change in corporate control or investment by a venture capitalist. For temporary
defensive purposes, such as during times of international political or economic
uncertainty, all of the Fund's investments may be made temporarily in the United
States.

Warburg believes that opportunities for growth of capital exist in post-
venture capital securities across global markets and that the Fund will provide
access to those opportunities. To attempt to reduce risk, the Fund will
diversify its investments over a broad range of issuers operating in a variety
of industries in various countries. Although the Fund may invest anywhere in the
world, the Fund will not be invested in all countries at all times depending
upon available investments, market conditions and other factors. The Fund may
hold securities of companies of any size, and will not limit capitalization of
companies it selects to invest in. However, due to the nature of the venture
capital to post-venture cycle, the Fund anticipates that the average market
capitalization of companies in which it invests will be less than $1 billion at
the time of investment. Equity securities in which the Fund will invest are
common stock, preferred stock, warrants, securities convertible into or
exchangeable for common stock and partnership interests. The Fund may engage in
a variety of strategies to reduce risk or seek to enhance return, including
currency hedging and engaging in short selling (see 'Certain Investment
Strategies').

PORTFOLIO INVESTMENTS
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INVESTMENT GRADE DEBT. The Fund may invest up to 20% of its total assets in
investment grade debt securities (other than money market obligations). The
interest income to be derived may be considered as one factor in selecting debt
securities for investment by Warburg. Because the market value of debt
obligations can be expected to vary inversely to changes in prevailing interest
rates, investing in debt obligations may provide an opportunity for capital
appreciation when interest rates are expected to decline. The success of such a
strategy is dependent upon Warburg's ability to accurately forecast changes

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

A security will be deemed to be investment grade if it is rated within the
four highest grades by Moody's or S&P or, if unrated, is determined to be of
comparable quality by Warburg. Bonds rated in the fourth highest grade 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. Subsequent to
its purchase by the Fund, an issue of securities may cease to be rated or its
rating may be reduced below the minimum required for purchase by the Fund.
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 total assets in domestic and foreign
short-term (one year or less remaining to maturity) and medium-term (five years
or less remaining to maturity) money market obligations and for temporary
defensive purposes may invest in these securities without limit. These
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 or, if unrated, deemed by Warburg to be 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

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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 in which the Fund seeks to assert this right. Warburg, acting under the
supervision of the Fund's Board of Directors (the '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 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.

U.S. GOVERNMENT SECURITIES. U.S. government securities in which the Fund may
invest include: direct obligations of the U.S. Treasury and obligations issued
by U.S. government agencies and instrumentalities, including instruments that
are supported by the full faith and credit of the United States, 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.

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.

RISK FACTORS AND SPECIAL CONSIDERATIONS
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Investing in common stocks and securities convertible into common stocks is
subject to the inherent risk of fluctuations in the prices of such securities.
For certain additional risks relating to the Fund's investments, see 'Portfolio
Investments' beginning at page 6 and 'Certain Investment Strategies' beginning
at page 11.

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volatile. 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. 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. Securities of issuers in 'special situations'
also may be more volatile, since the market value of these securities may
decline in value if the anticipated benefits do not materialize. Companies in
'special situations' include, but are not limited to, companies involved in an
acquisition or consolidation; reorganization; recapitalization; merger,
liquidation or distribution of cash, securities or other assets; a tender or
exchange offer, a breakup or workout of a holding company; or litigation which,
if resolved favorably, would improve the value of the companies' securities.
Although investing in securities of emerging growth companies or 'special
situations' 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, an
investment in the Fund may involve a greater degree of risk than an investment
in other mutual funds that seek capital appreciation by investing in
better-known, larger companies.

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 '1933 Act'), but that can be sold to 'qualified institutional buyers' in
accordance with Rule 144A under the 1933 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.

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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. 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.

EMERGING MARKETS. The Fund may invest in securities of issuers located in
less developed countries considered to be 'emerging markets.' Investing in
securities of issuers located in emerging markets involves not only the risks
described below, with respect to investing in foreign securities, but also other
risks, including exposure to economic structures that are generally less diverse
and mature than, and to political systems that can be expected to have less
stability than, those of developed countries. Other characteristics of emerging
markets that may affect investment there include certain national policies that
may restrict investment by foreigners in issuers or industries deemed sensitive
to relevant national interests and the absence of developed legal structures
governing private and foreign investments and private property. The typically
small size of the markets for securities of issuers located in emerging markets
and the possibility of a low or nonexistent volume of trading in those
securities may also result in a lack of liquidity and in price volatility of
those securities.

PORTFOLIO TRANSACTIONS AND TURNOVER RATE
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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 the Fund's portfolio turnover rate. However, it is anticipated that the
Fund's annual turnover rate should not exceed 150%. High portfolio turnover
rates (100% or more) may result in dealer mark ups 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
Fund's 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

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exceed usual and customary levels and when doing so is consistent with
guidelines adopted by the Board.

CERTAIN INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------

Although there is no intention of doing so during the coming year, the Fund
is authorized to engage in the following investment strategies: (i) purchasing
securities on a when-issued basis and purchasing or selling securities for
delayed delivery, (ii) lending portfolio securities and (iii) entering into
reverse repurchase agreements and dollar rolls. Detailed information concerning
the Fund's strategies and related risks is contained below and in the Fund's
Statement of Additional Information.

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

OPTIONS, FUTURES AND CURRENCY 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) to seek
to generate income to offset expenses or

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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 the NASD and by the
Internal Revenue Code of 1986, as amended (the 'Code').

Securities and Stock Index Options. The Fund may write covered call and put
options on up to 25% of the net asset value of the stock and debt securities in
its portfolio and will realize fees (referred to as 'premiums') for granting the
rights evidenced by the options. The Fund may utilize up to 10% of its assets to
purchase options on stocks and debt securities that are traded on U.S. and
foreign exchanges, as well as OTC options. 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 has the right to purchase the
underlying security from the writer. In addition to purchasing and writing
options on securities, the Fund may also utilize up to 10% of its total assets
to purchase exchange-listed and OTC put and call options on stock indexes, and
may also write such options. A stock index measures the movement of a certain
group of stocks by assigning relative values to the common 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 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 foreign currency or an interest rate
sensitive security or, in the case of stock index and certain other futures
contracts, are settled in cash with reference to a specified multiplier times
the change in the specified index, exchange rate or interest rate. 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

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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. The Fund will only engage in currency
exchange transactions for hedging purposes.

Hedging Considerations. The Fund may engage in options, futures and currency
transactions for, among other reasons, hedging purposes. 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, 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 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.

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 certain liquid securities that are acceptable as
collateral to the appropriate regulatory authority 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, financial instrument or currency 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 SELLING. The Fund may from time to time sell securities short. A short
sale is a transaction in which the Fund sells borrowed securities in
anticipation of a decline in the market price of the securities. Possible losses
from short sales differ from losses that could be incurred from a purchase of a
security, because losses from short sales may be unlimited, whereas losses from
purchases can equal only the total amount invested. The current market value of
the securities sold short will not exceed 10% of the Fund's assets.

When the Fund makes a short sale, the proceeds it receives from the sale are
retained by a broker until the Fund replaces the borrowed securities. To deliver
the securities to the buyer, the Fund must arrange through a broker to borrow
the securities and, in so doing, the Fund becomes obligated to replace the
securities borrowed at their market price at the time of replacement, whatever
that price may be. The Fund may have to pay a premium to borrow the securities
and must pay any dividends or interest payable on the securities until they are
replaced.

The Fund's obligation to replace the securities borrowed in connection with a
short sale will be secured by cash or U.S. government securities deposited as
collateral with the broker. In addition, the Fund will place in a segregated
account with its custodian or a qualified subcustodian an amount of cash or U.S.
government securities equal to the difference, if any, between (i) the market
value of the securities sold at the time they were sold short and (ii) any cash
or U.S. government securities deposited as collateral with the broker in
connection with the short sale (not including the proceeds of the short sale).
Until it replaces the borrowed securities, the Fund will maintain the segregated
account daily at a level so that (a) the amount deposited in the account plus
the amount deposited with the broker (not including the proceeds from the short
sale) will equal the current market value of the securities sold short and (b)
the amount deposited in the account plus the amount deposited with the broker
(not including the proceeds from the short sale) will not be less than the
market value of the securities at the time they were sold short.

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Short Sales Against the Box. The Fund may, in addition to engaging in short
sales as described above, 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,' will be entered into by the Fund for the purpose of receiving a portion of
the interest earned by the executing broker from the proceeds of the sale. The
proceeds of the sale will generally be held by the broker until the settlement
date when the Fund delivers securities to close out its short position. Although
prior to delivery the Fund will have to pay an amount equal to any dividends
paid on the securities sold short, the Fund will receive the dividends from the
securities sold short or the dividends from the preferred stock or interest from
the debt securities convertible or exchangeable into the securities sold short,
plus a portion of the interest earned from the proceeds of the short sale. 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. The
Fund will endeavor to offset transaction costs associated with short sales
against the box with the income from the investment of the cash proceeds. 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.

The extent to which the Fund may make short sales may be limited by Code
requirements for qualification as a regulated investment company. See
'Dividends, Distributions and Taxes' for other tax considerations applicable to
short sales.

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. In addition, up to 5% of the Fund's total assets may be
invested in the securities of issuers which have been in continuous operation
for less than three years, and up to an additional 5% of its total assets may be
invested in warrants. 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 and may pledge its assets to the extent necessary to secure
permitted borrowings. Whenever borrowings (including reverse repurchase
agreements) exceed 5% of the value of the Fund's net assets, the Fund will not
make any investments (including roll-overs). Except for the limitations on
borrowing, the investment

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guidelines set forth in this paragraph may be changed at any time without
shareholder consent by vote of the Board, 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
Fund's Statement of Additional Information.

MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

INVESTMENT ADVISERS. The Fund employs Warburg as its investment adviser. The
Fund also employs Abbott as its sub-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
objective and stated investment policies. Warburg makes investment decisions for
the Fund, places orders to purchase or sell securities on behalf of the Fund and
supervises the activities of Abbott. 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. Abbott, in accordance with the
investment objective and policies of the Fund, makes investment decisions for
the Fund regarding investments in Private Funds, effects transactions in
interests in Private Funds on behalf of the Fund and assists in administrative
functions relating to investments in Private Funds.

For the services provided by Warburg, the Fund pays Warburg a fee calculated
at an annual rate of 1.25% of the Fund's average daily net assets, out of which
Warburg pays Abbott for sub-advisory services. The advisory agreement between
the Fund and Warburg provides that Warburg will reimburse the Fund to the extent
certain expenses that are described in the Statement of Additional Information
exceed applicable state expense limitations. 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.

Warburg. 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, 1996,
Warburg managed approximately $16.8 billion of assets, including approximately
$9.2 billion of investment company assets. Incorporated in 1970, Warburg is a
wholly owned subsidiary of Warburg, Pincus Counsellors G.P. ('Warburg G.P.'), a
New York general partnership. E.M. Warburg, Pincus & Co., Inc. ('EMW') controls
Warburg through its ownership of a class of voting preferred stock of Warburg.
Warburg G.P. has no business other than being a holding company of Warburg and
its subsidiaries. Warburg's address is 466 Lexington Avenue, New York, New York
10017-3147.

Abbott. Abbott, which was founded in 1986, is an independent specialized
investment firm with assets under management of approximately $3 billion. Abbott
is a registered investment adviser which concentrates on venture

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capital, buyout and special situations partnership investments. Abbott's
management team provides full-service private equity programs to clients.
Abbott's principal office is located at 50 Rowes Wharf, Suite 240, Boston,
Massachusetts 02110-3328.

For tax and other business purposes, the partners of Abbott plan to merge
Abbott with and into, or transfer all of the assets of Abbott to, a newly-formed
Delaware limited liability company ('Abbott LLC'), with Abbott LLC to survive
and assume all of the liabilities of Abbott as part of the transaction. This
transaction, which is expected to occur before December 31, 1996 and is subject
to certain contingencies, will not involve any material change in the
management, ownership, personnel, operations or activities of Abbott. The
present partners of Abbott will be members of Abbott LLC and will hold
officerships and other positions in Abbott LLC carrying responsibilities
generally commensurate with their present responsibilities. Pursuant to a new
sub-advisory agreement, Abbott LLC, as successor to Abbott, will perform the
services then being performed by Abbott. The new sub-advisory agreement will be
substantially identical to the current sub-advisory agreement among Warburg, the
Fund and Abbott, except for the change of the service provider from Abbott to
Abbott LLC.

PORTFOLIO MANAGER. The portfolio manager of the Fund is Elizabeth B. Dater.
Ms. Dater is a managing director of EMW and has been a portfolio manager of
Warburg since 1978. Harold W. Ehrlich, Robert S. Janis and Christopher M. Nawn
are associate portfolio managers and research analysts for the Fund. Mr. Ehrlich
is a senior vice president of Warburg and has been with Warburg since February
1995, before which time he was a senior vice president, portfolio manager and
analyst at Templeton Investment Counsel Inc. Mr. Janis has been with Warburg
since October 1994, before which time he was a vice president and senior
research analyst at U.S. Trust Company of New York. Mr. Nawn has been with
Warburg since September 1994, before which time he was a senior sector analyst
and portfolio manager at the Dreyfus Corporation.

Raymond L. Held and Gary H. Solomon, investment managers and general partners
of Abbott, manage the Fund's investments in Private Funds.

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 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 other regulatory filings
as necessary and monitoring and developing compliance procedures for the Fund.
As compensation, the Fund pays Counsellors

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Service a fee calculated at an annual rate of .10% of the Fund's average daily
net assets.

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 .12% of the Fund's first $250 million in
average daily net assets, .10% of the next $250 million in average daily net
assets, .08% of the next $250 million in average daily net assets, and .05% of
average daily net assets over $750 million, subject in each case to a minimum
annual fee and exclusive of out-of-pocket expenses. PFPC has its principal
offices at 400 Bellevue Parkway, Wilmington, Delaware 19809.

CUSTODIANS. PNC Bank, National Association ('PNC') serves as custodian of the
Fund's U.S. assets, and Fiduciary Trust Company International ('Fiduciary')
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 Broad and
Chestnut Streets, Philadelphia, Pennsylvania 19101. Fiduciary's principal
business address is Two World Trade Center, New York, New York 10048.

TRANSFER AGENT. State Street Bank and Trust Company ('State Street') acts as
shareholder servicing agent, transfer agent and dividend disbursing agent for
the Fund. It has delegated to Boston Financial Data Services, Inc., a 50% owned
subsidiary ('BFDS'), responsibility for most shareholder servicing functions.
State Street's principal business address is 225 Franklin Street, Boston,
Massachusetts 02110. 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. Counsellors
Securities receives a fee at an annual rate equal to .25% of the average daily
net assets of the 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 the 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, subaccounting 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 evaluates the appropriateness
of the 12b-1 Plan on a continuing basis and in doing so considers all relevant
factors, including

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expenses borne by Counsellors Securities and amounts received under the 12b-1
Plan.

Warburg or its affiliates may, at their own expense, provide promotional
incentives to parties who support the sale of shares of the Fund, consisting of
securities dealers who have sold Fund shares or others, including banks and
other financial institutions, under special arrangements. 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 Fund shares.

DIRECTORS AND OFFICERS. The officers of the Fund manage its day-to-day
operations and are directly responsible to its 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 occupations during the past five years is set forth in the Fund's
Statement of Additional Information.

HOW TO OPEN AN ACCOUNT
- --------------------------------------------------------------------------------

In order to invest in the 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 UGMA ACCOUNTS. For information (i) about investing in
the Fund 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 Gifts to Minors Act or Uniform Transfers to Minors
Act ('UGMA') 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 UGMA 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
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Common Shares of the Fund may be purchased either by mail or, with special
advance instructions, by wire. The minimum initial investment in the Fund is
$2,500 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 UGMA accounts, the minimum
initial investment is $500. The Fund reserves the right to change the initial
and subsequent investment minimum requirements at

any time. In addition, the Fund may, in its sole discretion, waive the initial
and subsequent investment minimum requirements with respect to investors who are
employees of EMW or its affiliates or persons with whom Warburg has entered into
an investment advisory agreement. 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. The Fund reserves
the right to suspend the offering of shares for a period of time or to reject
any specific purchase order. In the interest of economy and convenience,
physical certificates representing shares in the Fund 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 through its distributor, Counsellors Securities Inc., 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 (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 the 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

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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.
Warburg Pincus Global Post-Venture Capital Fund
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 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 the 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. Generally, these programs do not require
customers to pay a transaction fee in connection with purchases or redemptions.
The Fund is also available through certain broker-dealers, financial
institutions and other industry professionals (including the programs described
above, collectively, 'Service Organizations'). Certain features of the Fund,
such as the initial and subsequent investment minimums, redemption fees and
certain trading restrictions, may be modified or waived by Service
Organizations, and administrative charges or other direct fees may be imposed.
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 Fund in accordance with their agreements
with the Fund and with clients or customers. Service

Organizations that have entered into agreements with the Fund or its agent may
enter confirmed purchase orders on behalf of clients and customers, with payment
to follow no later than the Fund's 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 a fee up to .35% (the
'Service Fee') of the average annual value of accounts with the Fund maintained
by such Service Organizations or recordkeepers. A portion of the Service Fee may
be borne by the Fund 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 services provided, the operations processing
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 the 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.

HOW TO REDEEM AND EXCHANGE SHARES
- --------------------------------------------------------------------------------

REDEMPTION OF SHARES. An investor in the 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 Fund 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

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<PAGE>
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 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. 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 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 the Fund will redeem shares
purchased by check or through the Automatic Investment Program before the funds
or check clear, payments of the redemption proceeds will be delayed for five
days (for funds received through the Automatic Investment Program) or 10 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 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 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
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.

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<PAGE>
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
$2,000 ($250 in the case of a retirement plan or UGMA account), the 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 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
the 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 the 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. The Fund offers investors an automatic cash
withdrawal plan under which investors may elect to receive periodic cash
payments of at least $250 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 the Fund 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 may 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, the 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 with the
following other funds:

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<PAGE>
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;

WARBURG PINCUS TAX FREE FUND -- a bond fund seeking maximum current income
exempt from federal income taxes, consistent with preservation of capital;

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 BALANCED FUND -- a fund seeking maximum total return through a
combination of long-term growth of capital and current income consistent with
preservation of capital through diversified investments in equity and debt
securities;

WARBURG PINCUS GROWTH & INCOME FUND -- an equity fund seeking long-term growth
of capital and income and a reasonable current return;

WARBURG PINCUS CAPITAL APPRECIATION FUND -- an equity fund seeking long-term
capital appreciation by investing principally in equity securities of
medium-sized domestic 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 EMERGING GROWTH FUND -- an equity fund seeking maximum capital
appreciation by investing in emerging growth 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 INTERNATIONAL EQUITY FUND -- an equity fund seeking long-term
capital appreciation by investing primarily in equity securities of non-United
States issuers;

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<PAGE>
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

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 the 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. 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 less
applicable expenses. The Fund declares dividends from its net investment income
and 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 Common 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) 927-2874.

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. The Fund, if it qualifies as a
regulated investment company, 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 additional dividends

<PAGE>
<PAGE>
and to make such additional 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. As a general rule, an investor's gain or loss on a sale
or redemption of his Fund shares will be a long-term capital gain or loss if he
has held his shares for more than one year and will be a 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 investors 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's dividends, to the extent not derived from dividends attributable to
certain types of stock issued by U.S. domestic corporations, will not qualify
for the dividends received deduction for corporations.

Certain provisions of the Code may require that a gain recognized by the Fund
upon the closing of a short sale be treated as a short-term capital gain, and
that a loss recognized by the Fund upon the closing of a short sale be treated
as a long-term capital loss, regardless of the amount of time that the Fund held
the securities used to close the short sale. The Fund's use of short sales may
also affect the holding periods of certain securities held by the Fund if such
securities are 'substantially identical' to securities used by the Fund to close
the short sale. The Fund's short selling activities will not result in unrelated
business taxable income to a tax-exempt investor.

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 which were received
from 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
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
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 Common Share of the 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 the Board determines that
using this valuation method would not reflect the investments' value.
Investments in Private Funds will be valued initially at cost and, thereafter,
in accordance with periodic reports received by Abbott from the Private Funds
(generally quarterly). Because the issuers of securities held by Private Funds
are generally not subject to the reporting requirements of the federal
securities laws, interim changes in value of investments in Private Funds will
not generally be reflected in the Fund's net asset value. However, Warburg will
report to the Board of Directors information about certain holdings of Private
Funds that, in its judgment, could have a material impact on the valuation of a
Private Fund. The Board of Directors will take these reports into account in
valuing Private Funds. Securities, options and futures contracts for which
market quotations are not readily available and other assets, including Private
Funds, 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 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, the Fund may advertise the average annual total return of its Common
Shares over various periods of time. These 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

<PAGE>
<PAGE>
commencement of the Fund's operations or on a year-by-year, quarterly or current
year-to-date basis).

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 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 total return figures are based on historical
earnings and are not intended to indicate future performance. The Fund's
Statement of Additional Information describes the method used to determine the
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,
the Fund may describe general economic and market conditions affecting the Fund.
The Fund may compare its performance with (i) 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 Venture Capital 100 Index
(compiled by Venture Capital Journal), the Russell 2000 Small Stock Index, the
EAFE Index, the Salomon Russell Global Equity Index, the FT-Actuaries World
Indices (jointly compiled by The Financial Times, Ltd., Goldman, Sachs & Co. and
NatWest Securities Ltd.) and the S&P 500 Index; all of which are unmanaged
indexes of common stocks; or (iii) other appropriate indexes of investment
securities or with data developed by Warburg derived from such indexes. The Fund
may also make comparisons using data and indexes compiled by the National
Venture Capital Association, VentureOne and Private Equity Analysts Newsletter
and similar organizations and publications. The Fund may include evaluations of
the Fund published by nationally recognized ranking services and by financial
publications that are nationally recognized, such as The Wall Street Journal,
Investor's Daily, Money, Inc., Institutional Investor, Barron's, Fortune,
Forbes, Business Week, Mutual Fund Magazine, Morningstar, Inc. and Financial
Times.

In reports or other communications to investors or in advertising, the Fund
may also describe the general biography or work experience of the portfolio
managers of the Fund and may include quotations attributable to the portfolio
managers describing approaches taken in managing the Fund's

<PAGE>
<PAGE>
investments, research methodology underlying stock selection or the Fund's
investment objective. In addition, the Fund and its portfolio managers may
render periodic updates of Fund activity, which may include a discussion of
significant portfolio holdings and analysis of holdings by industry, country,
credit quality and other characteristics. The Fund may discuss characteristics
of venture capital financed companies and the benefits expected to be achieved
from investing in these companies. The Fund may also discuss measures of risk,
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. 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 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.

GENERAL INFORMATION
- --------------------------------------------------------------------------------

ORGANIZATION. The Fund was incorporated on July 16, 1996 under the laws of
the State of Maryland under the name 'Warburg, Pincus Global Post-Venture
Capital Fund, Inc.' 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 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 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
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 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.

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<PAGE>
unless and until such time as less than a majority of the members holding office
have been elected by investors. Any Director of the Fund 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 Funds at (800) 927-2874.

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

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
COMMON SHARES OF THE FUND IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH
OFFER MAY NOT LAWFULLY BE MADE.

31
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<PAGE>
TABLE OF CONTENTS

<TABLE>
<S> <C>
The Fund's Expenses..................................................... 2
Investment Objective and Policies....................................... 3
Portfolio Investments................................................... 6
Risk Factors and Special Considerations................................. 8
Portfolio Transactions and Turnover Rate................................ 10
Certain Investment Strategies........................................... 11
Investment Guidelines................................................... 15
Management of the Fund.................................................. 16
How to Open an Account.................................................. 19
How to Purchase Shares.................................................. 19
How to Redeem and Exchange Shares....................................... 22
Dividends, Distributions and Taxes...................................... 26
Net Asset Value......................................................... 27
Performance............................................................. 28
General Information..................................................... 30
</TABLE>

[Logo]

P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874)
WPGPV-1-0996

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

The dagger symbol shall be expressed as `D'

<PAGE>

WARBURG PINCUS ADVISOR

GLOBAL
POST-VENTURE
CAPITAL FUND

September, 1996

[LOGO]

<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.<PAGE>

<PAGE>

SUBJECT TO COMPLETION, DATED SEPTEMBER 20, 1996

WARBURG PINCUS ADVISOR FUNDS
P.O. BOX 9030
BOSTON, MASSACHUSETTS 02205-9030
TELEPHONE NUMBER: (800) 369-2728

September 30, 1996

PROSPECTUS

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:

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 up to .75% 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') 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
to investors 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. The
Statement of Additional Information, 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.

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

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>
THE FUND'S EXPENSES

The Warburg Pincus Global Post-Venture Capital 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...................................................................................... .69%
12b-1 Fees........................................................................................... .75%`D'
Other Expenses....................................................................................... .71%
---------
Total Fund Operating Expenses*....................................................................... 2.15%
</TABLE>

<TABLE>
<S> <C>
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...................................................................................................... $22
3 years..................................................................................................... $67
</TABLE>

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

`D' Current 12b-1 fees are .50% out of a maximum .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.

* Absent the waiver of fees by the Fund's investment adviser and
co-administrator, Management Fees would equal 1.25%, Other Expenses would
equal .75% and Total Fund Operating Expenses would equal 2.75%. Other Expenses
for the Fund are based on annualized estimates of expenses for the fiscal year
ending October 31, 1997, net of any fee waivers or expense reimbursements. The
investment adviser and co-administrator are under no obligation to continue
these waivers.

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

The expense table shows the costs and expenses that an investor will bear
directly or indirectly as an Advisor Shareholder of the Fund. Institutions also
may charge their clients fees in connection with investments in 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 holders 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').

2
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<PAGE>
INVESTMENT OBJECTIVE AND POLICIES

Because of the nature of the Fund's investments and certain strategies it
may use, such as investing in Private Funds (as defined below), an investment in
the Fund should be considered only for the aggressive portion of an investor's
portfolio and may not be appropriate for all investors.

The Fund is a diversified management investment company that pursues its
investment objective by investing primarily in equity securities of U.S. and
foreign issuers considered by Warburg, Pincus Counsellors, Inc., the Fund's
investment adviser ('Warburg') to be in their post-venture capital stage of
development and pursues an aggressive investment strategy. The Fund intends to
invest in post-venture capital companies, as defined below, traded on national
securities exchanges and in over-the-counter markets and other public markets in
various developed countries, including the United States, the United Kingdom,
continental Europe and Japan, as well as emerging securities markets.

Although the Fund may invest up to 10% of its assets in venture capital and
other investment funds, the Fund is not designed primarily to provide venture
capital financing. Rather, under normal market conditions, the Fund will invest
at least 65% of its total assets in equity securities of 'post-venture capital
companies' located in at least three countries, including the United States. A
post-venture capital company is a company that has received venture capital
financing either (a) during the early stages of the company's existence or the
early stages of the development of a new product or service or (b) as part of a
restructuring or recapitalization of the company. The investment of venture
capital financing, distribution of such company's securities to venture capital
investors, or initial public offering ('IPO'), whichever is later, will have
been made within ten years prior to the Fund's purchase of the company's
securities. The Fund currently intends to invest at least 35% of total assets in
non-U.S. post-venture capital and other companies. A company will be considered
to be located in the country where (i) the company is organized, (ii) where its
principal business activities are conducted and where at least 50% of its
revenues or profits from goods produced or sold are derived, investments are
made or services are performed or (iii) where the principal trading market for
the company's securities is located.

Warburg believes that venture capital participation in a company's capital
structure can lead to revenue/earnings growth rates above those of older, public
companies such as those in the Dow Jones Industrial Average, the Fortune 500 or
the Morgan Stanley Capital International Europe, Australasia and Far East
('EAFE') Index. Venture capitalists finance start-up companies, companies in the
early stages of developing new products or services and companies undergoing a
restructuring or recapitalization, since these companies may not have access to
conventional forms of financing (such as bank loans or public issuances of
stock). Venture capitalists may hold substantial positions in companies that may
have been acquired at prices significantly below the initial public offering
price. This may create a potential adverse impact in the short-term on the
market price of a company's stock due to sales in the open market by a venture
capitalist or others who acquired the stock at lower prices prior to the
company's IPO. Warburg will consider the impact of such sales in selecting
post-venture capital investments. Venture capitalists may be individuals or
funds organized by venture capitalists which are typically offered only to large
institutions, such as pension funds and endow-

ments, and certain accredited investors. Outside of the United States, venture
capitalists may also consist of merchant banks and other banking institutions
that provide venture capital financing in a manner similar to U.S. venture
capitalists. Venture capital participation in a company is often reduced when
the company engages in an IPO of its securities or when it is involved in a
merger, tender offer or acquisition.

PRIVATE FUND INVESTMENTS. Up to 10% of the Fund's assets may be invested in U.S.
or foreign private limited partnerships or other investment funds ('Private
Funds') that themselves invest in equity or debt securities of (a) companies in
the venture capital or post-venture capital stages of development or (b)
companies engaged in special situations or changes in corporate control,
including buyouts. In selecting Private Funds for investment, Abbott Capital
Management, L.P., the Fund's sub-investment adviser with respect to Private
Funds ('Abbott'), attempts to invest in a mix of Private Funds that will provide
an above average internal rate of return (i.e., the discount rate at which the
present value of an investment's future cash inflows (dividend income and
capital gains) are equal to the cost of the investment). Warburg believes that
the Fund's investments in Private Funds offers individual investors a unique
opportunity to participate in venture capital and other private investment
funds, providing access to investment opportunities typically available only to
large institutions and accredited investors. Although the Fund's investments in
Private Funds are limited to a maximum of 10% of the Fund's assets, these
investments are highly speculative and volatile and may produce gains or losses
in this portion of the Fund that exceed those of the Fund's other holdings and
of more mature companies generally.

<PAGE>
<PAGE>
managers of the Private Funds and, in addition, would not generally reflect
positive or negative subsequent developments affecting companies held by the
Private Fund. See 'Net Asset Value.' Debt securities held by a Private Fund will
tend to be rated below investment grade and may be rated as low as C by Moody's
Investors Service, Inc. ('Moody's') or D by Standard & Poor's Ratings Group
('S&P'). For a discussion of the risks of investing in below investment grade
debt, see 'Investment Policies -- Below Investment Grade Debt Securities' in the
Statement of Additional Information. For a discussion of the possible tax
consequences of investing in foreign Private Funds, see 'Additional Information
Concerning Taxes -- Investment in Passive Foreign Investment Companies' in the
Statement of Additional Information.

The Fund may also hold non-publicly traded equity securities of companies
in the venture capital and post-venture capital stages of development, such as
those of closely-held companies or private placements of public companies. The
portion of the Fund's assets invested in these non-publicly traded securities
will vary over time depending on investment opportunities and other factors. The
Fund's illiquid assets, including Private Funds and other non-publicly traded
securities, may not exceed 15% of the Fund's net assets.

OTHER STRATEGIES. The Fund will invest in securities of post-venture capital
companies that are traded on a national securities exchange or in an organized
over-the-counter market, such as The Nasdaq Stock Market, Inc., the Japan
Securities Dealers Association Automated Quotation System ('JASDAQ'), the
European Association of Securities Dealers Automated Quotation ('Easdaq')
and the U.K. Alternative Investment Market ('AIM'). The Fund may invest up to
35% of its assets in exchange-traded and over-the-counter securities that do not
meet the definition of post-venture capital companies without regard to market
capitalization. Up to 10% of the Fund's assets may be invested, directly or
through Private Funds, in securities of issuers engaged at the time of purchase
in 'special situations,' such as a restructuring or recapitalization; an
acquisition, consolidation, merger or tender offer; a change in corporate
control or investment by a venture capitalist. For temporary defensive
purposes, such as during times of international political or economic
uncertainty, all of the Fund's investments may be made temporarily in the United
States.

Warburg believes that opportunities for growth of capital exist in
post-venture capital securities across global markets and that the Fund will
provide access to those opportunities. To attempt to reduce risk, the Fund will
diversify its investments over a broad range of issuers operating in a variety
of industries in various countries. Although the Fund may invest anywhere in the
world, the Fund will not be invested in all countries at all times depending
upon available investments, market conditions and other factors. The Fund may
hold securities of companies of any size, and will not limit capitalization of
companies it selects to invest in. However, due to the nature of the venture
capital to post-venture cycle, the Fund anticipates that the average market
capitalization of companies in which it invests will be less than $1 billion at
the time of investment. Equity securities in which the Fund will invest are
common stock, preferred stock, warrants, securities convertible into or
exchangeable for common stock and partnership interests. The Fund may engage in
a variety of strategies to reduce risk or seek to enhance return, including
currency hedging and engaging in short selling (see 'Certain Investment
Strategies').

PORTFOLIO INVESTMENTS

INVESTMENT GRADE DEBT. The Fund may invest up to 20% of its total assets in
investment grade debt securities (other than money market obligations) for the
purpose of seeking capital appreciation. The interest income to be derived may
be considered as one factor in selecting debt securi-

<PAGE>
<PAGE>
ties for investment by Warburg. Because the market value of debt obligations can
be expected to vary inversely to changes in prevailing interest rates, investing
in debt obligations may provide an opportunity for growth of capital when
interest rates are expected to decline. The success of such a strategy is
dependent upon Warburg's ability to accurately forecast changes in interest
rates. The market value of debt obligations may also be expected to vary
depending upon, among other factors, the ability of the issuer to repay
principal and interest, any change in investment rating and general economic
conditions.

MONEY MARKET OBLIGATIONS. The Fund is authorized to invest, under normal market
conditions, up to 20% of its total assets in domestic and foreign short-term
(one year or less) and medium-term (five years or less remaining to maturity)
money market obligations and for temporary defensive purposes may invest in
these securities without limit. These instruments consist of obligations issued
or guaranteed by the U.S. government or a foreign government, its 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 or, if
unrated, deemed by Warburg to be 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 on portfolio securities 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 in which the Fund seeks to assert this right.
Warburg, acting under the supervision of the Fund's Board

<PAGE>
<PAGE>
of Directors (the '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
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 nonconvertible 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.

RISK FACTORS AND SPECIAL
CONSIDERATIONS

Investing in common stocks and securities convertible into common stocks is
subject to the inherent risk of fluctuations in the prices of such securities.
For certain additional risks relating to the Fund's investments, see 'Portfolio
Investments' beginning at page 5 and 'Certain Investment Strategies' beginning
at page 9.

EMERGING GROWTH AND SMALL COMPANIES. Investing in securities of emerging growth
and small-sized companies may involve greater risks since these securities may
have limited marketability and, thus, may be more volatile. 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. 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 smaller companies than for larger, more established ones. Securities
of issuers in 'special situations' also may be more volatile, since the market
value of these securities may decline in value if the anticipated benefits do
not materialize. Companies in 'special situations' include, but are not limited
to, companies involved in an acquisition or consolidation; reorganization;
recapitalization; merger, liquidation or distribution of cash, securities or
other assets; a tender or exchange offer; a breakup or workout of a holding
company; or litigation which, if resolved favorably, would improve the value of
the companies' securities. Although investing in securities of emerging growth
companies or 'special situations' 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, an investment

<PAGE>
<PAGE>
in the Fund may involve a greater degree of risk than an investment in other
mutual funds that seek capital appreciation by investing exclusively in
better-known, larger companies.

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 '1933 Act'), but that can be sold to 'qualified institutional buyers' in
accordance with Rule 144A under the 1933 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
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 Counsellors 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 interests in Private Funds and
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 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.

EMERGING MARKETS. The Fund may invest in securities of issuers located in less
developed countries considered to be 'emerging markets.' Investing in securities
of issuers located in emerging markets involves not only the risks described
below with respect to investing in foreign securities, but also other risks,
including exposure to economic structures that are gener-ally less diverse and
mature than, and to political systems that can be expected to have less
stability than, those of developed countries. Other characteristics of emerging
markets that may affect investment there include certain national policies that
may restrict investment by foreigners in issuers or industries deemed sensitive
to relevant national interests and the absence of developed legal structures
governing private and foreign investments and private property. The typically
small size of the markets for securities of issuers located in emerging markets
and the possibility of a low or nonexistent volume of trading in those
securities may also result in a lack of liquidity and in price volatility of
those securities.

PORTFOLIO TRANSACTIONS AND
TURNOVER RATE

<PAGE>
<PAGE>
rate. However, it is anticipated that the Fund's annual turnover rate should not
exceed 150%. Higher portfolio turnover rates (100% or more) may result in dealer
mark ups 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.

CERTAIN INVESTMENT STRATEGIES

Although there is no intention of doing so during the coming year, the Fund
is authorized to engage in the following investment strategies: (i) purchasing
securities on a when-issued basis and purchasing or selling securities for
delayed-delivery, (ii) lending portfolio securities and (iii) entering into
reverse repurchase agreements and dollar rolls. Detailed information concerning
these strategies and their related risks is contained below and in the Statement
of Additional Information.

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

<PAGE>
<PAGE>
(ii) as a substitute for purchasing or selling portfolio securities or (iii) 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 the NASD and by the Internal Revenue Code of 1986, as amended (the 'Code').

Securities and Stock Index Options. The Fund may write covered call and put
options on up to 25% of the net asset value of the stock and debt securities in
its portfolio and will realize fees (referred to as 'premiums') for granting the
rights evidenced by the options. The Fund may utilize up to 10% of its assets to
purchase options on stocks and debt securities that are traded on U.S. and
foreign exchanges, as well as over-the-counter ('OTC') options. 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. In addition to
purchasing and writing options on securities, the Fund may also utilize up to
10% of its total assets to purchase exchange-listed and OTC put and call options
on stock indexes, and may also write such options. A stock index measures the
movement of a certain group of stocks by assigning relative values to the common
stocks included in the index.

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.

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<PAGE>
tracts 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. The Fund may engage in options, futures and
currency transactions for, among other reasons, hedging purposes. 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, 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 be inaccurate. Even a
well-conceived hedge may be unsuccessful to some degree because of unexpected
market behavior or trends.

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 certain liquid securities that are acceptable as
collateral to the appropriate regulatory authority 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, financial instrument or currency 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.

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When the Fund makes a short sale, the proceeds it receives from the sale
are retained by a broker until the Fund replaces the borrowed securities. To
deliver the securities to the buyer, the Fund must arrange through a broker to
borrow the securities and, in so doing, the Fund becomes obligated to replace
the securities borrowed at their market price at the time of replacement,
whatever that price may be. The Fund may have to pay a premium to borrow the
securities and must pay any dividends or interest payable on the securities
until they are replaced.

The Fund's obligation to replace the securities borrowed in connection with
a short sale will be secured by cash or U.S. government securities deposited as
collateral with the broker. In addition, the Fund will place in a segregated
account with its custodian or a qualified subcustodian an amount of cash or U.S.
government securities equal to the difference, if any, between (i) the market
value of the securities sold at the time they were sold short and (ii) any cash
or U.S. government securities deposited as collateral with the broker in
connection with the short sale (not including the proceeds of the sort sale).
Until it replaces the borrowed securities, the Fund will maintain the segregated
account daily at a level so that (a) the amount deposited in the account plus
the amount deposited with the broker (not including the proceeds from the short
sale) will equal the current market value of the securities sold short and (b)
the amount deposited in the account plus the amount deposited with the broker
(not including the proceeds from the short sale) will not be less than the
market value of the securities at the time they were sold short.

Short Sales Against the Box. The Fund may, in addition to engaging in short
sales as described above, 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,' will be entered into by the Fund for the purpose of receiving a portion of
the interest earned by the executing broker from the proceeds of the sale. The
proceeds of the sale will generally be held by the broker until the settlement
date when the Fund delivers securities to close out its short position. Although
prior to delivery the Fund will have to pay an amount equal to any dividends
paid on the securities sold short, the Fund will receive the dividends from the
securities sold short or the dividends from the preferred stock or interest from
the debt securities convertible or exchangeable into the securities sold short,
plus a portion of the interest earned from the proceeds of the short sale. 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. The
Fund will endeavor to offset transaction costs associated with short sales
against the box with the income from the investment of the cash proceeds. 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.

INVESTMENT GUIDELINES

The Fund may invest up to 15% of its net assets in securities with
contractual or other restrictions on resale and other investments that are not
readily marketable, including (i) securities issued as part of a privately
negotiated transaction between an issuer and one or

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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. In addition, up to 5% of the Fund's total assets
may be invested in the securities of issuers that have been in continuous
operation for less than three years, and an additional 5% of its total assets
may be invested in warrants. The Fund may borrow from banks and enter into
reverse repurchase agreements 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 the Fund's
total assets. The Fund may pledge its assets to the extent necessary to secure
permitted borrowings. Whenever borrowings (including reverse repurchase
agreements) exceed 5% of the value of the Fund's net assets, the Fund will not
make any 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, 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.

MANAGEMENT OF THE FUND

INVESTMENT ADVISERS. The Fund employs Warburg as investment adviser to the Fund
and Abbott as the sub-investment adviser to the Fund. 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 its investment
objective and stated investment policies. Warburg makes investment decisions for
the Fund, places orders to purchase or sell securities on behalf of the Fund and
supervises the activities of Abbott. 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. Abbott, in accordance with the
investment objective and policies of the Fund, makes investment decisions for
the Fund regarding investments in Private Funds, effects transactions in Private
Funds on behalf of the Fund and assists in other administrative functions
relating to investments in Private Funds.

For the services provided by Warburg, the Fund pays Warburg a fee
calculated at an annual rate of 1.25% of the Fund's average daily net assets,
out of which Warburg pays Abbott for sub-advisory services. The advisory
agreement between the Fund and Warburg provides that Warburg will reimburse the
Fund to the extent certain expenses that are described in the Statement of
Additional Information exceed applicable state expense limitations. 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 borne by the Fund.

Warburg. 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, 1996, Warburg managed approximately $16.8 billion of assets, including
approximately $9.2 billion of investment company assets. Incorporated in 1970,
Warburg is a wholly owned subsidiary of Warburg, Pincus Counsellors G.P.
('Counsellors G.P.'), a New York general partnership. E.M. Warburg, Pincus &
Co., Inc. ('EMW') controls Warburg through its ownership of a class of voting
preferred stock of Warburg. Counsellors G.P. has no business other than being a
holding company of Warburg and its subsidiaries. Warburg's address is 466
Lexington Avenue, New York, New York 10017-3147.

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special situations partnership investments. Abbott's management team provides
full-service private equity programs to clients. Abbott's principal office is
located at 50 Rowes Wharf, Suite 240, Boston, Massachusetts 02110-3328.

PORTFOLIO MANAGER. The portfolio manager of the Fund is Elizabeth B. Dater. Ms.
Dater is a managing director of EMW and has been a portfolio manager of Warburg
since 1978.

Harold W. Ehrlich, Robert S. Janis and Christopher M. Nawn are associate
portfolio managers and research analysts for the Fund. Mr. Erhlich is a senior
vice president of Warburg and has been with Warburg since February 1995, before
which time he was a senior vice president, portfolio manager and analyst at
Templeton Investment Counsel Inc. Mr. Janis has been with Warburg since October
1994, before which time he was a vice president and senior research analyst at
U.S. Trust Company of New York. Mr. Nawn has been with Warburg since September
1994, before which time he was a senior sector analyst and portfolio manager at
the Dreyfus Corporation.

Raymond L. Held and Gary H. Solomon, investment managers and general
partners of Abbott, manage the Fund's investments in Private Funds.

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 Fund. As
compensation, the Fund pays Counsellors Service a fee calculated at an annual
rate of .10% of the Fund's average daily net assets.

CUSTODIANS. PNC Bank, National Association ('PNC') serves as custodian of the
Fund's U.S. assets and Fiduciary Trust Company International ('Fiduciary')
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 Broad and
Chestnut Streets, Philadelphia, Pennsylvania 19101. Fiduciary's principal
business address is Two World Trade Center, New York, New York 10048.

TRANSFER AGENT. State Street Bank and Trust Company ('State Street') also serves
as shareholder servicing agent, transfer agent and dividend disbursing agent for
the Fund. It has delegated to Boston Financial Data Services, Inc., a 50% owned
subsidiary ('BFDS'), responsibility for most shareholder servicing functions.
State Street's principal business address is 225 Franklin Street, Boston,
Massachusetts 02110. 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.

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 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. The Fund also reserves the right to
suspend the offering of Advisor Shares for a period of time or to reject any
specific purchase order. References in this Prospectus to shareholders or
investors are generally to Institutions as the 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 Global Post-Venture Capital Fund
DDA# 9904-649-2
[Shareowner name]
[Shareowner account number]

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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 ('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 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 the Fund's pricing on the following business day. 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.

HOW TO REDEEM AND EXCHANGE
SHARES

REDEMPTION OF SHARES. An investor of the Fund 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 this 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.

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 redemp-

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tions 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, it
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 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 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 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 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 less
applicable expenses. The Fund declares dividends from its net investment income
and 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, subse-

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quently, by writing to Warburg Pincus Advisor Funds at the address set forth
under 'How to Purchase Shares' or by calling Warburg Pincus Advisor 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. The Fund, if it qualifies as a regulated
investment company, 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 additional dividends and to make such
additional 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 the length of
time shareholders have held the Advisor Shares or whether received in cash or
reinvested in additional Advisor Shares. As a general rule, an investor's gain
or loss on a sale or redemption of its Fund shares will be a long-term capital
gain or loss if it has held its shares for more than one year and will be a
short-term capital gain or loss if it has held its 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 investors
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's dividends, to the extent not derived from dividends
attributable to certain types of stock issued by U.S. domestic corporations,
will not qualify for the dividends received deduction for corporations.

Dividends and interest received by the Fund may be subject to withholding
and other taxes imposed by foreign countries. However, tax conventions between
certain countries and the U.S. may reduce or eliminate such taxes. If the Fund
qualifies as a regulated investment company, if certain asset and distribution
requirements are satisfied and if more than 50% of the Fund's total assets at
the close of its fiscal year consist of stock or securities of foreign
corporations, the Fund may elect for U.S. income tax purposes to treat foreign
income taxes paid by it as paid by its shareholders. The Fund may qualify for
and make this election in some, but not necessarily all, of its taxable years.
If the Fund were to make an election, shareholders of the Fund would be required
to take into account an amount equal to their pro rata portions of such foreign
taxes in computing their taxable income and then treat an amount equal to those
foreign taxes as a U.S. federal income tax deduction or as a foreign tax credit
against their U.S. federal income taxes. Shortly after any year for which it
makes such an election, the Fund will report to its shareholders the amount per
share of such foreign tax that must be included in each shareholder's gross
income and the amount which will be available for the deduction or credit. No
deduction for foreign taxes may be claimed by a shareholder who does not itemize
deductions. Certain limitations will be imposed on the extent to which the
credit (but not the deduction) for foreign taxes may be claimed.

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Certain provisions of the Code may require that a gain recognized by the
Fund upon the closing of a short sale be treated as a short-term capital gain,
and that a loss recognized by the Fund upon the closing of a short sale be
treated as a long-term capital loss, regardless of the amount of time that the
Fund held the securities used to close the short sale. The Fund's use of short
sales may also affect the holding periods of certain securities held by the Fund
if such securities are 'substantially identical' to securities used by the Fund
to close the short sale. The Fund's short selling activities will not result in
unrelated business taxable income to a tax-exempt investor.

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, Washington's Birthday, Good
Friday, Memorial Day (observed), 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.
Investments in Private Funds will be valued initially at cost and, thereafter,
in accordance with periodic reports received by Abbott from the Private Funds
(generally quarterly). Because the issuers of securities held by Private Funds
are generally not subject to the reporting requirements of the federal
securities laws, interim changes in value of investments in Private Funds will
not generally be reflected in the Fund's net asset value. However, Warburg will
report to the Board of Directors information about certain holdings of Private
Funds that, in its judgment, could have a material impact on the valuation of a
Private Fund. The Board of Directors will take these reports into account in
valuing Private Funds. Securities, options and futures contracts for which
market quotations are not readily available and other assets, including Private
Funds, 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.

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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 the average annual total return of Advisor
Shares over various periods of time. 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. Total return will be shown for recent
one-, five- and ten-year periods, and may be shown for other periods as well
(such as on a year-by-year, quarterly or current year-to-date basis).

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 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
and may compare its performance with (i) 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 Venture Capital 100 Index (compiled by
Venture Capital Journal), the Russell 2000 Small Stock Index, the EAFE Index,
the Salomon Russell Global Equity Index and the FT-Actuaries World Indices
(jointly complied by The Financial Times, Ltd., Goldman, Sachs & Co. and NatWest
Securities Ltd.) and the S&P 500 Index, which are unmanaged indexes of common
stocks; or (iii) other appropriate indexes of investment securities or with data
developed by Warburg derived from such indexes. The Fund may also make
comparisons using data and indexes compiled by the National Venture Capital
Association, VentureOne and Private Equity Analysts Newsletter and similar
organizations and publications. The Fund may also include evaluations published
by nationally recognized ranking services and by financial publications that are
nationally recognized, such as The Wall Street Journal, Investor's Daily, Money,
Inc., Institutional Investor, Barron's, Fortune, Forbes, Business Week, Mutual
Fund Magazine, Morningstar, Inc. and Financial Times.

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describing approaches taken in managing the Fund's investments, research
methodology underlying stock selection or the Fund's investment objective. In
addition, the Fund and its portfolio managers may render updates of Fund
activity, which may include a discussion of significant portfolio holdings and
analysis of holdings by industry, country, credit quality and other
characteristics. The Fund may discuss characteristics of venture capital
financed companies and the benefits expected to be achieved from investing in
these companies. The Fund may also discuss measures of risk, 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.
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
the expense ratio of Advisor 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.

GENERAL INFORMATION

ORGANIZATION. The Fund was incorporated on July 16, 1996 under the laws of the
State of Maryland under the name 'Warburg, Pincus Global Post-Venture Capital
Fund, Inc.' The Fund's charter 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 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 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
its account, as well as a statement of its account after any transaction that
affects its share balance or share registration (other than the reinvestment of
dividends or distributions). 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.'

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 its 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 fee) 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.

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 pay a portion of the fees paid pursuant
to the Plan to the Fund's custodian or transfer agent for costs related to
accounts of its Customers.

------------------------
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.

ADGPV-1-0996

Warburg Pincus Advisor Funds
Counsellors Securities Inc., distributor

Table of Contents

2 THE FUND'S EXPENSES
3 INVESTMENT OBJECTIVE AND POLICIES
5 PORTFOLIO INVESTMENTS
7 RISK FACTORS AND SPECIAL CONSIDERATIONS
8 PORTFOLIO TRANSACTIONS AND TURNOVER RATE
9 CERTAIN INVESTMENT STRATEGIES
12 INVESTMENT GUIDELINES
13 MANAGEMENT OF THE FUND
15 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

[LOGO]

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

The dagger symbol shall be expressed as `D'

<PAGE>

<PAGE>1

Subject to completion, dated September 20, 1996

STATEMENT OF ADDITIONAL INFORMATION

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

September 30, 1996

WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND

P.O. Box 9030, Boston, Massachusetts 02205-9030
For information, call 800-WARBURG

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

Contents

Page
----
Investment Objective..................................................2
Investment Policies...................................................2
Management of the Fund................................................25
Additional Purchase and Redemption
Information...........................................................33
Exchange Privilege....................................................34
Additional Information Concerning Taxes...............................34
Determination of Performance..........................................37
Independent Accountants and Counsel...................................39
Financial Statement...................................................39
Appendix--Description of Ratings......................................A-1
Report of Coopers & Lybrand, L.L.P., Independent Accountants..........A-5

This Statement of Additional Information is meant to be read
in conjunction with the Prospectus for the Common Shares and with the Prospectus
for the Advisor Shares of the Fund, each dated September 30, 1996, 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 also be obtained by calling the Fund at the same number or by
writing to the Fund, P.O. Box 9030, Boston, Massachusetts 02205-9030.

<PAGE>2

INVESTMENT OBJECTIVE

The investment objective of the Fund is long-term growth of
capital. The Fund will pursue its objective by investing primarily in equity
securities of U.S. and foreign issuers in their post-venture capital stage of
development and pursues an aggressive investment strategy.

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 put and call
options on stock and debt securities and may purchase such options that are
traded on foreign and U.S. 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.

<PAGE>3

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

<PAGE>4

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

<PAGE>5

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 common stocks included in the index, fluctuating with changes in the
market values of the stocks included in the index. Some stock 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 stock
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.

<PAGE>6

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 or, with respect to currency
options, currencies 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 currency values, 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 ability of the Fund to trade in futures contracts and options
on futures contracts may be limited by the requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), applicable to a regulated investment
company.

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. Stock indexes are capitalization weighted
indexes which reflect the market value of the stock listed on the indexes. A
stock 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

<PAGE>7

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 currency, financial
instrument or stock 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 stock 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 stock 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

<PAGE>8

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.

<PAGE>9

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

<PAGE>10

gain in the portfolio position being offset by a loss in the hedged position.
As a result, the use of options, futures, contracts 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 the stock
index and movements in the price of stock 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 currency, interest
rate 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 forward

<PAGE>11

currency contracts; options written by the Fund on securities and indexes; and
currency, 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 certain liquid securities that are
acceptable as collateral to the appropriate regulatory authority.

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

Foreign Investments. 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 invest 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 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

<PAGE>12

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 value of foreign currencies against the U.S. dollar,
particularly the forward market in foreign exchange, currency options and
currency futures. See "Currency Transactions" and "Futures Activities" above.

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 reporting standards, practices and
requirements comparable to those applicable to U.S. companies. In addition, 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.

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.

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,

<PAGE>13

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.

Special Situation Companies. The Fund may invest up to 10% of
its assets, directly or indirectly, in the securities of "special situation
companies" involved in an actual or prospective acquisition or consolidation;
reorganization; recapitalization; merger, liquidation or distribution of cash,
securities or other assets; a tender or exchange offer; a breakup or workout of
a holding company; or litigation which, if resolved favorably, would improve the
value of the company's stock. If the actual or prospective situation does not
materialize as anticipated, the market price of the securities of a "special
situation company" may decline significantly. The Fund believes, however, that
if "special situation companies" are analyzed carefully and invested in at the
appropriate time, the Fund may achieve capital growth. There can be no
assurance, however, that a special situation that exists at the time the Fund
makes its investment will be consummated under the terms and within the time
period contemplated.

Securities of Other Investment Companies. The Fund may invest
in securities of other investment companies and partnerships and other
investment vehicles deemed to be investment companies under the Investment
Company Act of 1940, as amended (the "1940 Act"), to the extent permitted under
that 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"). These loans, if and when made, may not
exceed 20% of the Fund's total assets taken at value. The Fund will not lend
portfolio securities to affiliates of Warburg 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

<PAGE>14

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.

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, U.S. Government
Securities or other liquid high-grade debt obligations or other 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.

Securities of Smaller Companies. The Fund's investments
involves considerations that are not applicable to investing in securities of
established, larger-capitalization issuers, including reduced and less reliable
information about issuers and markets, less stringent accounting standards,
illiquidity of securities and markets, higher

<PAGE>15

brokerage commissions and fees and greater market risk in general. In
addition, securities of smaller companies may involve greater risks since
these securities may have limited marketability and, thus, may be more
volatile.

American, European and Continental Depositary Receipts. The
assets of the Fund may be invested in the securities of foreign issuers in the
form of American Depositary Receipts ("ADRs") and European Depositary Receipts
("EDRs"). 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 typically 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 and CDRs in bearer form are
designed for use in European securities markets.

Warrants. The Fund may invest up to 5% of net assets in
warrants (valued at the lower of cost or market) (other than warrants acquired
by the Fund as part of a unit or attached to securities at the time of purchase)
provided that not more than 2% of net assets may be invested in warrants not
listed on a recognized U.S. or foreign stock exchange. Because a warrant does
not carry with it the right to dividends or voting rights with respect to the
securities which it entitles a holder to purchase, and because it does not
represent any rights in the assets of the issuer, warrants may be considered
more speculative than certain other types of investments. Also, the value of a
warrant does not necessarily change with the value of the underlying securities
and a warrant ceases to have value if it is not exercised prior to its
expiration date.

Reverse Repurchase Agreements and Dollar Rolls. 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 certain liquid
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 the 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.

<PAGE>16

The Fund also may enter into "dollar rolls," in which the Fund
sells fixed-income securities for delivery in the current month and
simultaneously contracts to repurchase similar but not identical (same type,
coupon and maturity) securities on a specified future date. During the roll
period, the Fund would forego principal and interest paid on such securities.
The Fund would be compensated by the difference between the current sales price
and the forward price for the future purchase, as well as by the interest earned
on the cash proceeds of the initial sale. At the time the Fund enters into a
dollar roll transaction, it will place in a segregated account maintained with
an approval custodian cash or other liquid obligations having a value not less
than the repurchase price (including accrued interest) and will subsequently
monitor the account to ensure that its value is maintained. Reverse repurchase
agreements are considered to be borrowings under the 1940 Act.

Non-Publicly Traded and Illiquid Securities. The Fund may not
invest more than 15% of its net assets in 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, Private Funds (as
defined in the Prospectuses), 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.

<PAGE>17

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 15% 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).

Private Funds. Although investments in Private Funds offer the
opportunity for significant capital gains, these investments involve a high
degree of business and financial risk that can result in substantial losses in
the portion of the Fund's portfolio invested in these investments. Among these
are the risks associated with investment in companies in an early stage of
development or with little or no operating history, companies operating at a
loss or with substantial variation in operation results from period to period,
companies with the need for substantial additional capital to support expansion
or to maintain a competitive position, or companies with significant financial
leverage. Such companies may also face intense competition from others including
those with greater financial resources or more extensive development,
manufacturing, distribution or other attributes, over which the Fund will have
no control.

Interests in the Private Funds in which the Fund may invest
will be subject to substantial restrictions on transfer and, in some instances,
may be non-transferable for a period of years. Private Funds may participate in
only a limited number of investments and, as a consequence, the return of a
particular Private Fund may be substantially adversely affected by the
unfavorable performance of even a single investment. Certain of the Private
Funds in which the Fund may invest may pay their investment managers a fee based
on the performance of the Fund, which may create an incentive for the manager to
make investments that are riskier or more speculative than would be the case if
the manager was paid a fixed fee. Private Funds are not registered under the
1940 Act and, consequently, are not subject to the restrictions on affiliated
transactions and other protections applicable to regulated investment companies.
The valuation of companies held by Private Funds, the securities of which are
generally unlisted and illiquid, may be very difficult and will often depend on
the subjective valuation of the managers of the Private Funds, which may prove
to be inaccurate. Inaccurate

<PAGE>18

valuations of a Private Fund's portfolio holdings may affect the Fund's net
asset value calculations. Private Funds in which the Fund invests will not
borrow to increase the amount of assets available for investment or otherwise
engage in leverage.

Below Investment Grade Securities. Although the Fund may
directly invest only in investment grade debt securities (as described in the
Prospectuses), securities held by Private Funds may be rated below investment
grade. In addition, the Fund may invest in below investment grade convertible
debt and preferred securities and it is not required to dispose of securities
downgraded below investment grade subsequent to acquisition by the Fund. 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.

Certain of these securities may be difficult to dispose of
because there may be a thin trading market. Because there is no established
retail secondary market for many of these securities, it is anticipated 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 ability to dispose of particular
issues when necessary to meet 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 to obtain accurate market quotations for purposes of valuation
and calculation of 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. Normally, medium-and lower-rated and comparable
unrated securities are not intended for short-term investment. Additional
expenses may be incurred, to the extent required to seek recovery upon a default
in the payment of principal or interest on its portfolio holdings of such
securities. Recent

<PAGE>19

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.

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. Additional
investments (including roll-overs) will not be made when borrowings 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.

Other Investment Limitations

The investment limitations numbered 1 through 9 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. Investment limitations 10 through 16 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, dollar roll
transactions that are accounted for as financings 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. For purposes of this restriction,
short sales, the entry into currency transactions, options, futures contracts,
options on futures contracts, forward commitment transactions and dollar roll
transactions that are not accounted for as financings (and the segregation of
assets in connection with any of the foregoing) shall not constitute borrowing.

2. 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.

3. 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, 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.

<PAGE>20

4. Make loans, except that the Fund may purchase or hold
fixed-income securities, including loan participations, assignments and
structured securities, lend portfolio securities and enter into repurchase
agreements.

5. Underwrite any securities issued by others except to the
extent that the investment in restricted securities and the sale of securities
in accordance with the Fund's investment objective, policies and limitations may
be deemed to be underwriting.

6. Purchase or sell real estate or invest in oil, gas or
mineral exploration or development programs, except that the Fund may invest in
(a) securities secured by real estate, mortgages or interests therein and (b)
securities of companies that invest in or sponsor oil, gas or mineral
exploration or development programs.

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 currencies,
options, futures contracts or related options 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, including those relating to securities, currencies
and indexes, and options on futures contracts, securities, currencies or
indexes, purchase and sell currencies on a forward commitment or
delayed-delivery basis and enter into stand-by commitments.

9. Issue any senior security except as permitted in
the Fund's investment limitations.

10. Purchase securities of other investment companies except
in connection with a merger, consolidation, acquisition, reorganization or offer
of exchange, or as otherwise permitted under the 1940 Act.

11. Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related to the
deposit of assets in escrow in connection with the purchase of securities on a
forward commitment or delayed-delivery basis and collateral and initial or
variation margin arrangements with respect to currency transactions, options,
futures contracts, and options on futures contracts.

12. 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.

13. Purchase any security if as a result the Fund would then
have more than 5% of its total assets invested in securities of companies
(including predecessors) that have been in continuous operation for fewer than
three years.

<PAGE>21

14. Purchase or retain securities of any company if any of the
Fund's officers or Directors or any officer or director of Warburg individually
owns more than 1/2 of 1% of the outstanding securities of such company and
together they own beneficially more than 5% of the securities.

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
5% of the value of the Fund's net assets.

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

Certain non-fundamental investment limitations are currently
required by one or more states in which shares of the Fund are sold. These may
be more restrictive than the limitations set forth above. Should the Fund
determine that any such commitment is no longer in the best interest of the Fund
and its shareholders, the Fund will revoke the commitment by terminating the
sale of Fund shares in the state involved. In addition, the relevant state may
change or eliminate its policy regarding such investment limitations.

If a percentage restriction (other than the percentage
limitation set forth in No. 1 above) 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.

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 and 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. Short-term obligations with maturities of 60 days or less are
valued at amortized cost, which constitutes fair value as determined by the
Board. Amortized cost involves valuing a portfolio instrument at its initial
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. 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

<PAGE>22

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 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. Private Funds may be
purchased directly from the issuer or may involve a broker or placement agent.
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. Purchases
of Private Funds through a broker or placement agent will also involve a
commission or other fee. There is generally no stated commission in

<PAGE>23

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.

Except for Private Funds managed by Abbott Capital Management,
L.P., the Fund's sub-investment adviser with respect to Private Funds
("Abbott"), 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. 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.

Investment decisions for the Fund concerning specific
portfolio securities are made independently from those for other clients advised
by Warburg or Abbott. 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,

<PAGE>24

transactions are averaged as to price and available investments allocated as
to amount, in a manner which Warburg or Abbott, as the case may be, 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, securities to be sold or purchased for the Fund may be
aggregated 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, Abbott or Counsellors Securities or any affiliated person of
such companies. In addition, the Fund will not give preference to any
institutions with whom the Fund enters into distribution or shareholder
servicing agreements concerning the provision of distribution services or
support services.

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

<PAGE>25

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. The Fund's investment in
special situation companies could result in high portfolio turnover. 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. Consequently, the annual portfolio turnover rate of the Fund may be
higher than mutual funds having a similar objective that do not invest in
special situation companies.

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 (62) ................................ Director
Harvard University National Intelligence Counsel; Professor at Harvard
1737 Cambridge Street University; Director or Trustee of CircuitCity
Cambridge, Massachusetts 02138 Stores, Inc. (retail electronics and appliances) and
Phoenix Home Life Insurance Co.

</TABLE>

<PAGE>26

<TABLE>

<S> <C>
Donald J. Donahue (72) ................................ Director
27 Signal Rd. Chairman of Magma Copper Company from January 1987;
Stamford, Connecticut 06902 until March 1996; Director or Trustee of GEV
Corporation and Signet Star Reinsurance Company;
Chairman and Director of NAC Holdings from
September 1990-June 1993; Director of Chase Brass
Industries, Inc. since December 1994; Vice Chairman
and Director of Pioneer Companies, Inc. (a chlor-alkali
chemical producer) since March 1996.

Jack W. Fritz (69) .................................... Director
2425 North Fish Creek Road Private investor; Consultant and Director of Fritz
P.O. Box 483 Broadcasting, Inc. and Fritz Communications
Wilson, Wyoming 83014 (developers and operators of radio stations);
Director of Advo, Inc. (direct mail advertising).

John L. Furth* (65) ................................... Chairman of the Board and Chief Executive Officer
466 Lexington Avenue Vice Chairman and Director of E.M. Warburg, Pincus &
New York, New York 10017-3147 Co., Inc. ("EMW"); Associated with EMW since 1970;
Chairman of the Board and officer of other
investment companies advised by Warburg.

Thomas A. Melfe (64) .................................. Director
30 Rockefeller Plaza Partner in the law firm of Donovan Leisure Newton &
New York, New York 10112 Irvine; Director of Municipal Fund for New York
Investors, Inc.

Arnold M. Reichman* (48) .............................. Director and President
466 Lexington Avenue Managing Director and Assistant Secretary of EMW; Associated
New York, New York 10017-3147 with EMW since 1984; Senior Vice President, Secretary
and Chief Operating Officer of Counsellors
Securities; Officer of other investment
companies advised by Warburg.

</TABLE>

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

<PAGE>27

<TABLE>

<S> <C>

Alexander B. Trowbridge (66) .......................... Director
1155 Connecticut Avenue, N.W. President of Trowbridge Partners, Inc. (business
Suite 700 consulting) from January 1990- January 1994;
Washington, DC 20036 President of the National Association of
Manufacturers from 1980-1990; Director or Trustee of
New England Mutual Life Insurance Co., ICOS
Corporation (biopharmaceuticals), P.H.H. Corporation
(fleet auto management; housing and plant relocation
service), WMX Technologies Inc. (solid and hazardous
waste collection and disposal), The Rouse Company
(real estate development), SunResorts International
Ltd. (hotel and real estate management), Harris Corp.
(electronics and communications equipment), The
Gillette Co. (personal care products) and Sun Company
Inc. (petroleum refining and marketing).

Eugene L. Podsiadlo (39) .............................. Senior Vice President
466 Lexington Avenue Managing Director of EMW; Associated with EMW since
New York, New York 10017-3147 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 (42) .................................. Vice President and Chief Financial Officer Managing
466 Lexington Avenue Director, Controller and Assistant Secretary of EMW;
New York, New York 10017-3147 Associated with EMW since 1984; Treasurer of
Counsellors Securities; Vice President, Treasurer and
Chief Accounting Officer or Vice President and Chief
Financial Officer of other investment companies
advised by Warburg.

</TABLE>

<PAGE>28

<TABLE>

<S> <C>

Eugene P. Grace (44) .................................. Vice President and Secretary
466 Lexington Avenue Associated with EMW since April 1994; Attorney-at-law
New York, New York 10017-3147 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 and Chief Compliance
Officer and Assistant Secretary of
Counsellors Securities; Vice
President and Secretary of other
investment companies advised by Warburg.

Howard Conroy (42) .................................... Vice President, Treasurer and Chief Accounting Officer
466 Lexington Avenue Associated with EMW since 1992; Associated with
New York, New York 10017-3147 Martin Geller, C.P.A. from 1990-1992; Vice President,
Finance with Gabelli/Rosenthal & Partners, L.P. until
1990; Vice President, Treasurer and Chief Accounting
Officer of other investment companies advised by
Warburg

Janna Manes, Esq. (28) ................................ Assistant Secretary
466 Lexington Avenue Associated with EMW since 1996; Associated with the
New York, New York 10017-3147 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.

<PAGE>29

Directors' Compensation

Total Total Compensation from
Name of Director Compensation from all Investment Companies
the Fund+ Managed by Warburg+*
---------------- ----------------- ------------------------
<S> <C> <C>
John L. Furth None** None**
Arnold M. Reichman None** None**
Richard N. Cooper $1,500 $48,500
Donald J. Donahue $1,500 $48,500
Jack W. Fritz $1,500 $48,500
Thomas A. Melfe $1,500 $48,500
Alexander B. Trowbridge $1,500 $48,500

</TABLE>
- -----------------------------
+ Amounts shown are estimates of future payments to be made in the
fiscal year ending October 31, 1997 pursuant to existing arrangements.

* Each Director also serves as a Director or Trustee of 20 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.

Ms. Elizabeth B. Dater, portfolio manager of the Fund, is
also co-portfolio manager of Warburg Pincus Emerging Growth Fund, Warburg
Pincus Post-Venture Capital Fund and the Small Company Growth Portfolio of
Warburg Pincus Trust. Ms. Dater also manages an institutional post-venture
capital fund and is the former Director of Research for Warburg's investment
management activities. Prior to joining Warburg in 1978, she was a vice
president of research at Fiduciary Trust Company of New York and an
institutional sales assistant at Lehman Brothers. Ms. Dater has been a
regular panelist on Maryland Public Television's Wall Street Week with Louis
Rukeyser since 1976. Ms. Dater earned a B.A. degree from Boston University in
Massachusetts.

Mr. Harold W. Ehrlich, Mr. Robert S. Janis and Christopher
M. Nawn are associate portfolio managers and research analysts of the Fund and
of other Warburg Pincus Funds. Prior to joining Warburg in February 1995, Mr.
Ehrlich was a senior vice president, portfolio manager and analyst at
Templeton Investment Counsel Inc. from 1987 to 1995. He earned a B.S.B.A.
degree from the University of Florida and earned his Chartered Financial

<PAGE>30

Analyst designation in 1990. Prior to joining Warburg in October 1994, Mr.
Janis was a vice president and senior research analyst at U.S. Trust Company
of New York. He earned B.A. and M.B.A. degrees from the University of
Pennsylvania. Prior to joining Warburg in September 1994, Mr. Nawn was a
senior sector analyst and portfolio manager at the Dreyfus Corporation. He
earned a B.A. degree from the Colorado College and an M.B.A. degree from the
University of Texas.

Investment Advisers and Co-Administrators

Warburg serves as investment adviser to the Fund, Abbott
serves as sub-investment adviser to the Fund, Counsellors Funds Service, Inc.
("Counsellors Service") serves as a co-administrator to the Fund and PFPC serves
as a co-administrator to the Fund pursuant to separate written agreements (the
"Advisory Agreement," the "Sub-Advisory Agreement," the "Counsellors Service
Co-Administration Agreement" and the "PFPC Co-Administration Agreement,"
respectively). The services provided by, and the fees payable by the Fund to,
Warburg under the Advisory Agreement, Abbott under the Sub-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.
These fees are calculated at an annual rate based on a percentage of the Fund's
average daily net assets. See the Prospectuses, "Management of the Funds."

Warburg agrees that if, in any fiscal year, the expenses borne
by the Fund exceed the applicable expense limitations imposed by the securities
regulations of any state in which shares of the Fund are registered or qualified
for sale to the public, it will reimburse the Fund to the extent required by
such regulations. Unless otherwise required by law, such reimbursement would be
accrued and paid on a monthly basis. At the date of this Statement of Additional
Information, the most restrictive annual expense limitation applicable to the
Fund is 2.5% of the first $30 million of the average net assets of the Fund, 2%
of the next $70 million of the average net assets of the Fund and 1.5% of the
remaining average net assets of the Fund.

Custodians and Transfer Agent

PNC Bank, National Association ("PNC") and Fiduciary Trust
Company International ("Fiduciary") serve as custodians of the Fund's U.S. and
foreign assets, respectively, pursuant to separate custodian agreements (the
"Custodian Agreements"). Under the Custodian Agreements, PNC and Fiduciary, 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

<PAGE>31

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, Fiduciary 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 Fiduciary is Two World Trade Center, New York, New York
10048.

State Street Bank and Trust Company ("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. State
Street's principal business address is 225 Franklin Street, Boston,
Massachusetts 02110. BFDS's principal business address is 2 Heritage Drive,
Boston, Massachusetts 02171.

Organization of the Fund

The Fund's charter authorizes the Board to issue three billion
full and fractional shares of common stock, $.001 par value per share. Common
Stock ("Common Shares"), of which two billion shares are designated Common Stock
- - Series 1 and one billion shares are designated Common Stock - Series 2 (the
"Advisor Shares"). Only Common Shares and Advisor Shares have been issued by the
Fund.

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

Common Shares. The Fund has entered into a Shareholder
Servicing and Distribution Plan (the "12b-1 Plan"), pursuant to Rule 12b-1 under
the 1940 Act, pursuant to which the Fund will pay Counsellors Securities, in
consideration for Services (as defined below), a fee calculated at an annual
rate of .25% of the average daily net assets of the Common Shares of the Fund.
Services performed by Counsellors Securities include (i) the sale of the Common
Shares, as set forth in the 12b-1 Plan ("Selling Services"), (ii) ongoing
servicing and/or maintenance of the accounts of Common Shareholders of the Fund,
as set forth in the 12b-1 Plan ("Shareholder Services"), and (iii) sub-transfer
agency services, subaccounting services or administrative services related to
the sale of the Common Shares, as set forth in the 12b-1 Plan ("Administrative
Services" and collectively with Selling Services

<PAGE>32

and Administrative Services, "Services") including, without limitation, (a)
payments reflecting an allocation of overhead and other office expenses of
Counsellors Securities related to providing Services; (b) payments made to,
and reimbursement of expenses of, persons who provide support services in
connection with the distribution of the Common Shares including, but not
limited to, office space and equipment, telephone facilities, answering
routine inquiries regarding the Fund, and providing any other Shareholder
Services; (c) payments made to compensate selected dealers or other authorized
persons for providing any Services; (d) costs relating to the formulation and
implementation of marketing and promotional activities for the Common Shares,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising, and related travel and
entertainment expenses; (e) costs of printing and distributing prospectuses,
statements of additional information and reports of the Fund to prospective
shareholders of the Fund; and (f) costs involved in obtaining whatever
information, analyses and reports with respect to marketing and promotional
activities that the Fund may, from time to time, deem advisable.

Pursuant to the 12b-1 Plan, Counsellors Securities provides
the Board with periodic reports of amounts expended under the 12b-1 Plan and the
purpose for which the expenditures were made.

Advisor Shares. 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/or 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 pursuant to which the Fund will pay in consideration for services, a
fee calculated at an annual rate of .50% of the average daily net assets of the
Advisor Shares of the Fund. 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

<PAGE>33

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.

General. The Distribution Plan and the 12b-1 Plan will
continue in effect for so long as their 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 or the 12b-1 Plan, as the
case may be ("Independent Directors"). Any material amendment of the
Distribution Plan or the 12b-1 Plan would require the approval of the Board in
the manner described above. The Distribution Plan or the 12b-1 Plan may not be
amended to increase materially the amount to be spent thereunder without
shareholder approval of the Advisor Shares or the Common Shares, as the case may
be. Neither the Distribution Plan nor the 12b-1 Plan 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
or the Common Shares, as the case may be.

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

<PAGE>34

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 discussion set out below of tax considerations generally
affecting the Fund and its shareholders is intended to be only a summary and is
not intended as a substitute for careful tax planning by prospective
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.

The Fund intends to qualify each year as a "regulated
investment company" under Subchapter M of the Code. If it qualifies as a
regulated investment company, the Fund will pay no federal income taxes on its
taxable net investment income (that is, taxable income other than net realized
capital gains) and its net realized capital gains that are distributed to

<PAGE>35

shareholders. To qualify under Subchapter M, the Fund must, among other
things: (i) distribute to its shareholders at least 90% of its taxable net
investment income (for this purpose consisting of taxable net investment
income and net realized short-term capital gains); (ii) derive at least 90% of
its gross income from dividends, interest, payments with respect to loans of
securities, gains from the sale or other disposition of securities, or other
income (including, but not limited to, gains from options, futures, and
forward contracts) derived with respect to the Fund's business of investing in
securities; (iii) derive less than 30% of its annual gross income from the
sale or other disposition of securities, options, futures or forward contracts
held for less than three months; and (iv) diversify its holdings so that, at
the end of each fiscal quarter of the Fund (a) at least 50% of the market
value of the Fund's assets is represented by cash, U.S. Government Securities
and other securities, with those other securities limited, with respect to any
one issuer, to an amount no greater in value than 5% of the Fund's total
assets and to not more than 10% of the outstanding voting securities of the
issuer, and (b) not more than 25% of the market value of the Fund's assets is
invested in the securities of any one issuer (other than U.S. Government
Securities or securities of other regulated investment companies) or of two or
more issuers that the Fund controls and that are determined to be in the same
or similar trades or businesses or related trades or businesses. In meeting
these requirements, the Fund may be restricted in the selling of securities
held by the Fund for less than three months and in the utilization of certain
of the investment techniques described above and in the Fund's Prospectuses.
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 required to be but not distributed
under a prescribed formula. The formula requires payment to shareholders
during a calendar year of distributions representing at least 98% of the
Fund's taxable ordinary income for the calendar year and at least 98% of the
excess of its capital gains over capital losses realized during the one-year
period ending October 31 during such year, together with any undistributed,
untaxed amounts of ordinary income and capital gains from the previous
calendar year. The Fund expects to pay the dividends and make the
distributions necessary to avoid the application of this excise tax.

The Fund's transactions, if any, in foreign currencies,
forward contracts, options and futures contracts (including options and forward
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
recognized by the Fund (i.e., may affect whether gains or losses are ordinary or
capital), accelerate recognition of income to the Fund, defer Fund losses and
cause the Fund to be subject to hyperinflationary currency rules. These rules
could therefore affect the character, amount and timing of distributions to
shareholders. These provisions also (i) will require the Fund to mark-to-market
certain types of its positions (i.e., treat them as if they were closed out) and
(ii) may cause the Fund 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 so
that (a) neither the Fund nor its shareholders will be treated as receiving a
materially greater amount of capital gains or distributions than actually
realized

<PAGE>36

or received, (b) the Fund will be able to use substantially all of its losses
for the fiscal years in which the losses actually occur and (c) the Fund will
continue to qualify as a regulated investment company.

Upon the sale or exchange of shares, a shareholder will
realize a taxable gain or loss depending upon the amount realized and the basis
in the 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, as described in the
Prospectuses, will be long-term or short-term depending upon the shareholder's
holding period for the shares. Any loss realized on a sale or exchange will be
disallowed to the extent the shares disposed of are replaced, including
replacement through the reinvestment of dividends and capital gains
distributions in the Fund, within a period of 61 days 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.

A shareholder of the Fund receiving dividends or distributions
in additional shares should be treated for federal income tax purposes as
receiving a distribution in an amount equal to the amount of money that a
shareholder receiving cash dividends or distributions receives, and should have
a cost basis in the shares received equal to that amount. Investors considering
buying shares just prior to a dividend or capital gain distribution should be
aware that, although the price of shares purchased at that time may reflect the
amount of the forthcoming distribution, those who purchase just prior to a
distribution will receive a distribution that will nevertheless be taxable to
them. Proposed legislation would reduce the dividends received deduction
available to corporations (as discussed in the Prospectuses) from 70% to 50% of
dividends received.

Each shareholder will receive an annual statement as to the
federal income tax status of his dividends and distributions from the Fund for
the prior calendar year. Furthermore, shareholders will also receive, if
appropriate, various written notices after the close of the Fund's taxable year
regarding the federal income tax status of certain dividends and distributions
that were paid (or that are treated as having been paid) by the Fund to its
shareholders during the preceding year.

If a shareholder fails to furnish a correct taxpayer
identification number, fails to report fully dividend or interest income, or
fails to certify that he has provided a correct taxpayer identification number
and that he is not subject to "backup withholding," the shareholder may be
subject to a 31% "backup withholding" tax with respect to (i) taxable dividends
and distributions and (ii) the proceeds of any sales or repurchases of shares of
the Fund. An individual's taxpayer identification number is his social security
number. Corporate shareholders and other shareholders specified in the Code are
or may be exempt from backup withholding. The backup withholding tax is not an
additional tax and may be credited against a taxpayer's federal income tax
liability. Dividends and distributions also may be subject to state and local
taxes depending on each shareholder's particular situation.

<PAGE>37

Investment in Passive Foreign Investment Companies

If the Fund purchases shares in certain foreign entities
classified under the Code as "passive foreign investment companies" ("PFICs"),
the Fund may be subject to federal income tax on a portion of an "excess
distribution" or gain from the disposition of the shares, even though the income
may have to be distributed as a taxable dividend by the Fund to its
shareholders. In addition, gain on the disposition of shares in a PFIC generally
is treated as ordinary income even though the shares are capital assets in the
hands of the Fund. Certain interest charges may be imposed on either the Fund or
its shareholders with respect to any taxes arising from excess distributions or
gains on the disposition of shares in a PFIC.

The Fund may be eligible to elect to include in its gross
income its share of earnings of a PFIC on a current basis. Generally, the
election would eliminate the interest charge and the ordinary income treatment
on the disposition of stock, but such an election may have the effect of
accelerating the recognition of income and gains by the Fund compared to a fund
that did not make the election. In addition, information required to make such
an election may not be available to the Fund.

On April 1, 1992 proposed regulations of the Internal Revenue
Service (the "IRS") were published providing a mark-to-market election for
regulated investment companies. The IRS subsequently issued a notice indicating
that final regulations will provide that regulated investment companies may
elect the mark-to-market election for tax years ending after March 31, 1992 and
before April 1, 1993. Whether and to what extent the notice will apply to
taxable years of the Fund is unclear. If the Fund is not able to make the
foregoing election, it may be able to avoid the interest charge (but not the
ordinary income treatment) on disposition of the stock by electing, under
proposed regulations, each year to mark-to-market the stock (that is, treat it
as if it were sold for fair market value). Such an election could result in
acceleration of income to the Fund. Recently proposed legislation would codify
the mark-to-market election for regulated investment companies.

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. These figures are 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)[*GRAPHIC OMITTED-SEE FOOTNOTE] =
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 expression (1 + T) is being raised to the nth power.

<PAGE>38

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.

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.

The Fund intends to diversify its assets among countries, and
in doing so, would expect to be able to reduce the risk arising from economic
problems affecting a single country. Warburg thus believes that, by spreading
risk throughout many diverse markets outside the United States, the Fund will
reduce its exposure to country-specific economic problems. Warburg also believes
that a diversified portfolio of international equity securities, when combined
with a similarly diversified portfolio of domestic equity securities, tends to
have a lower volatility than a portfolio composed entirely of domestic
securities. Furthermore, international equities have been shown to reduce
volatility in single asset portfolios regardless of whether the investments are
in all domestic equities or all domestic fixed-income instruments, and research
indicates that volatility can be significantly decreased when international
equities are added.

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.

<PAGE>39

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 statement of assets and liabilities of
the Fund, as of September 13, 1996, that appears in this Statement of Additional
Information has been audited by Coopers & Lybrand, whose report thereon appears
elsewhere herein and has been included herein 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.

FINANCIAL STATEMENT

The Fund's financial statement follows the Report of
Independent Accountants.

<PAGE>A-1

APPENDIX

DESCRIPTION OF RATINGS

Commercial Paper Ratings

Commercial paper rated A-1 by Standard and Poor's Ratings
Group ("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.

<PAGE>A-2

BB, B and CCC - 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.

<PAGE>A-3

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. 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.

<PAGE>A-4

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.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors
of Warburg, Pincus Global Post-Venture Capital Fund, Inc.

We have audited the accompanying Statement of Assets and Liabilities
of Warburg, Pincus Global Post-Venture Capital Fund, Inc. (the "Fund") as of
September 13, 1996. This financial statement is the responsibility of the
Fund's management. Our responsibility is to express an opinion on this
financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Warburg, Pincus
Global Post-Venture Capital Fund, Inc. as of September 13, 1996 in conformity
with generally accepted accounting principles.

/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
September 18, 1996

<PAGE>

Warburg, Pincus Global Post-Venture Capital Fund, Inc.
STATEMENT OF ASSETS AND LIABILITIES
as of September 13, 1996

Assets:

Cash $100,000

Deferred Organizational Costs 24,600

Deferred Offering Costs 96,455
--------
Total Assets 221,055
--------

Liabilities:

Accrued Organizational Costs 24,600

Accrued Offering Costs 96,455
--------
Total Liabilities 121,055
--------

Net Assets $100,000
========

Net Asset Value, Redemption and Offering
Price Per Share (three billion
shares authorized, consisting of 2 billion
Common Shares and 1 billion Advisor
Shares - $.001 per share) applicable to 9,900
Common Shares and 100 Advisor Shares outstanding. $10.00
======

The accompanying notes are an integral part of this financial statement

<PAGE>

WARBURG, PINCUS GLOBAL POST-VENTURE CAPITAL FUND, INC.
Notes to Financial Statement
September 13, 1996

1. Organization:

Warburg, Pincus Global Post-Venture Capital Fund, Inc. (the "Fund")
was incorporated on July 16, 1996 under the laws of the State of
Maryland. The Fund is registered under the Investment Company Act
of 1940, as amended, as an open-end management investment
company. The Fund's charter authorizes its Board of Directors to
issue three billion full and fractional shares of capital stock,
$.001 par value per share, of which one billion shares are designated
Advisor Shares. Common Shares bear fees of .25% of average daily
net asset value pursuant to a 12b-1 distribution plan. Advisor
Shares bear fees not to exceed .75% of average daily net asset
value pursuant to a 12b-1 distribution plan. The assets of each class
are segregated, and a shareholder's interest is limited to the
class in which shares are held. The Fund has not commenced
operations except those related to organizational matters and the
sale of 9,900 Common Shares and 100 Advisor Shares (collectively,
the "Initial Shares") to Warburg, Pincus Counsellors, Inc., the
Fund's investment adviser (the "Adviser"), on September 13, 1996.

2. Organizational Costs, Offering Costs and Transactions with
Affiliates:

Organizational costs have been capitalized by the Fund and are
being amortized over sixty months commencing with operations. In the
event any of the Initial Shares of the Fund are redeemed by any
holder thereof during the period that the Fund is amortizing its
organizational costs, the redemption proceeds payable to the holder
thereof by the Fund will be reduced by unamortized
organizational costs in the same ratio as the number of Initial
Shares outstanding at the time of redemption. Offering costs,
including initial registration costs, have been deferred and will be
charged to expense during the Fund's first year of operation.

Certain officers and a director of the Fund are also officers and
a director of the Adviser. These officers and director are paid no
fees by the Fund for serving as an officer or director of the Fund.

<PAGE>C-1

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements --
(1) Financial Statements included in Part B.*
(a) Report of Coopers & Lybrand L.L.P., Independent
Accountants*

(b) Statement of Net Assets and Liabilities

(b) Exhibits:

Exhibit No. Description of Exhibit
- ----------- ----------------------

1 Articles of Incorporation.**

2 By-Laws.**

3 Not applicable.

4 Registrant's Forms of Stock Certificates.**

5(a) Form of Investment Advisory Agreement
with Warburg, Pincus Counsellors, Inc.**

(b) Form of Sub-Investment Advisory Agreement
with Abbott Capital Management L.P.**

6 Form of Distribution Agreement.**

7 Not applicable.

8(a) Form of Custodian Agreement with PNC Bank, National
Association.***

(b) Form of Custodian Agreement with Fiduciary Trust Company
International.

9(a) Form of Transfer Agency and Service Agreement.***

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

- ----------------------
* To be filed by amendment.

** Incorporated by reference to Registrant's Registration Statement on
Form N-1A filed on July 19, 1996 (Securities Act file No. 33-08459).

*** 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).

<PAGE>C-2

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

(b) Opinion and Consent of Venable, Baetjer and Howard, LLP,
Maryland counsel to the Fund.

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

12 Not applicable.

13 Form of Purchase Agreement.**

14 Not applicable

15(a) Form of Shareholder Servicing and Distribution Plan.**

(b) Form of Shareholder Services Plan.**

16 Schedule for Computation of Total Return Performance
Quotation.*

17 Financial Data Schedule.*

Item 25. Persons Controlled by or Under Common Control with Registrant

All of the outstanding shares of common stock of Registrant
on the date Registrant's Registration Statement becomes effective will be
owned by Warburg, Pincus Counsellors, Inc. ("Warburg"), a corporation formed
under New York law.

Item 26. Number of Holders of Securities

It is anticipated that Warburg will hold all Registrant's
shares of common stock, par value $.001 per share, on the date Registrant's
Registration Statement becomes effective.

Item 27. Indemnification

Registrant, officers and directors of Counsellors, 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. These policies provide insurance
for any "Wrongful Act" of an officer, director or trustee. Wrongful Act is
defined as breach of duty, neglect, error, misstatement, misleading statement,
omission or other act done or wrongfully attempted by

- --------------------
* To be filed by amendment.

** Incorporated by reference to Registrant's Registration Statement on
Form N-1A filed on July 19, 1996 (Securities Act file No. 33-08459).

<PAGE>C-3

an officer, director or trustee in connection with the operation of
Registrant. Insurance coverage does not extend to (a) conflicts of interest
or gain in fact any profit or advantage to which one is not legally entitled,
(b) intentional non-compliance with any statute or regulation or (c)
commission of dishonest, fraudulent acts or omissions. Insofar as it related
to Registrant, the coverage is limited in amount and, in certain
circumstances, is subject to a deductible.

Under Article VIII of the Articles of Incorporation
(the "Articles"), the Directors and officers of Registrant shall not have any
liability to Registrant or its stockholders for money damages, to the fullest
extent permitted by Maryland law. This limitation on liability applies to
events occurring at the time a person serves as a Director or officer of
Registrant whether or not such person is a Director or officer at the time of
any proceeding in which liability is asserted. No provision of Article VIII
shall protect or purport to protect any Director or officer of Registrant
against any liability to Registrant or its stockholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Registrant shall indemnify and advance expenses to its currently
acting and its former Director to the fullest extent that indemnification of
Directors and advancement of expenses to Directors is permitted by the
Maryland General Corporation Law.

Registrant shall indemnify and advance expenses to
its officers to the same extent as its Directors and to such further extent as
is consistent with such law. The Board of Directors may, through a by-law,
resolution or agreement, make further provisions for indemnification of
directors, officers, employees and agents to the fullest extent permitted by
the Maryland General Corporation Law.

Article V of the By-Laws further limits the liability
of the Directors by providing that any person who was or is a party or is
threatened to be made a party in any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
by reason of the fact that such person is a current or former director or
officer of Registrant, or is or was serving while a director or officer of
Registrant at the request of Registrant as a director, officer, partner,
trustee, employee, agent or fiduciary of another corporation, partnership,
joint venture, trust, enterprise or employee benefit plan, shall be
indemnified by Registrant against judgments, penalties, fines, excise taxes,
settlements and reasonable expenses (including attorneys' fees) actually
incurred by such person in connection with such action, suit or proceeding to
the full extent permissible under the Maryland General Corporation Law, the
1993 Act and the 1940 Act, as such statutes are now or hereafter in force,
except that such indemnity shall not protect any such person against any
liability to Registrant or any stockholder thereof to which such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of this
office.

<PAGE>C-4

Item 28. Business and Other Connections of Investment Adviser

Warburg, a wholly owned subsidiary of Warburg, Pincus,
Counsellors G.P., acts as investment adviser to the 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).

Abbott Capital Management, L.P. ("Abbott") act as
sub-investment advisor for the Registrant's Post-Venture Capital Portfolio.
Abbott renders investment advice and provides full-service private equity
programs to clients. The list required by this Item 28 of officers and
partners of Abbott, 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
Abbott (SEC File No. 801-27914).

Item 29. Principal Underwriter

(a) Counsellors Securities will act as distributor for
Registrant, as well as 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 Growth & Income Fund, Inc.; 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 Value Fund; Warburg Pincus Tax Free Fund; and
Warburg Pincus Trust.

(b) For information relating to each director, officer or
partner of Counsellors Securities, reference is made to Form BD (SEC File No.
8-32482) filed by Counsellors Securities under the Securities Exchange Act of
1934.

<PAGE>C-5

Item 30. Location of Accounts and Records

(1) Warburg, Pincus Institutional Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(Fund'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)

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

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

(5) Fiduciary Trust Company International
Two World Trade Center
New York, New York 10048
(records relating to its functions as custodian)

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

(7) Boston Financial Data Services, Inc.
2 Heritage Drive
North Quincy, Massachusetts 02171
(records relating to its functions as transfer
agent and dividend disbursing agent)

(8) PNC Bank, National Association
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
(records relating to its functions as custodian)

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

<PAGE>C-6

Item 31. Management Services

Not applicable.

Item 32. Undertakings.

(a) Registrant hereby undertakes to file a post-effective amendment,
with financial statements which need not be certified, within four to six
months from the effective date of this Registration Statement Amendment.

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

(c) 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.

<PAGE>C-7

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 20th day of September, 1996.

WARBURG, PINCUS
GLOBAL POST-VENTURE
CAPITAL FUND, INC.

By:/s/Arnold S. Reichman
Arnold M. Reichman
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/Arnold S. Reichman President and September 20, 1996
Arnold M. Reichman Director

/s/Stephen Distler Vice President and September 20, 1996
Stephen Distler Chief Financial
Officer

/s/Howard Conroy Vice President, September 20, 1996
Howard Conroy Treasurer and
Chief Accounting Officer

/s/Richard N. Cooper Director September 20, 1996
Richard N. Cooper

/s/Donald J. Donahue Director September 20, 1996
Donald J. Donahue

/s/Jack W. Fritz Director September 20, 1996
Jack W. Fritz

/s/Thomas A. Melfe Director September 20, 1996
Thomas A. Melfe

<PAGE>C-8

Signature Title Date
- --------- ----- ----

/s/John L. Furth Chief Executive September 20, 1996
John L. Furth Officer and Director

/s/Alexander B. Trowbridge Director September 20, 1996
Alexander B. Trowbridge

<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description of Exhibit
- ----------- ----------------------

8(b) Form of Custodian Agreement with Fiduciary Trust
Company International.

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

(b) Opinion and Consent of Venable, Baetjer and Howard,
LLP, Maryland counsel to the Fund.

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

<PAGE>1

AGREEMENT dated between FIDUCIARY TRUST COMPANY
INTERNATIONAL ("Bank") and WARBURG PINCUS GLOBAL POST - VENTURE
CAPITAL FUND, INC. ("Fund")

1. Custody Account. The Bank agrees to establish and maintain (a) a
custody account in the name of the Fund ("Custody Account") for any and all
stocks, shares, bonds, debentures, notes, mortgages or other obligations for the
payment of money and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same or evidencing
or representing any other rights or interests therein and other similar property
(hereinafter called "Securities") from time to time received by the Bank or its
subcustodian (as defined in the last sentence of Section 3) for the account of
the Fund, and (b) a deposit account in the name of the Fund ("Deposit Account")
for any and all cash in any currency received by the Bank or its subcustodian
for the account of the Fund, which cash shall not be subject to withdrawal by
draft or check.

2. Maintenance of Securities. Securities in the Custody Account shall be
held in the country or other jurisdiction as shall be specified from time to
time in Instructions (as defined in Section 9 hereof), provided that such
country or other jurisdiction shall be one in which the principal trading market
for such Securities is located or the country or other jurisdiction in which
such Securities are to be presented for payment or are acquired for the Custody
Account and cash in the Deposit Account shall be credited to an account in such
amounts and in the country or other jurisdiction as shall be specified from time
to time in Instructions, provided that such country or other jurisdiction shall
be one in which such cash is the legal currency for the payment of public or
private debts.

3. Eligible Subcustodians. The Board of the Fund authorizes the Bank to
hold the Securities in the Custody Account and the cash in the Deposit Account
in custody and deposit accounts, respectively, which have been established by
the Bank with (a) a securities system, (b) one of the Bank's branches, a branch
of a qualified U.S. bank, an eligible foreign custodian or an eligible foreign
securities depository and (c) a subcustodian of an eligible foreign custodian,
that itself is an eligible foreign custodian or an eligible foreign securities
depository with which that subcustodian has entered into an agreement for the
custody of Fund assets; provided, however, that the Board of the Fund has
approved the use of the securities system and the Bank's or its subcustodian's
contract with, such eligible foreign custodian or eligible foreign securities
depository by resolution, and Instructions to such effect have been provided to
the Bank. For purposes of this Agreement, "qualified U.S. bank." "eligible
foreign custodian" and "eligible foreign securities depository" shall have the
meanings provided in Rule 17f-5 under the Investment Company Act of 1940 as
interpreted by the staff of the Securities and Exchange Commission and a
"securities system" shall mean a clearing agency registered with the Securities
and Exchange Commission under Section 17A of the Securities Exchange Act of
1934, which acts as a securities depository, or a book-entry system authorized
by the U.S. Department of the Treasury and certain federal agencies.

<PAGE>2

Hereinafter the term "subcustodian" will refer to (a) any securities system, (b)
any branch of a qualified U.S. bank, any eligible foreign custodian or any
eligible foreign securities depository with which the Bank has entered into an
agreement of the type contemplated hereunder regarding Securities and/or cash
held in or to be acquired for the Custody Account or the Deposit Account, and
(c) any subcustodian of an eligible foreign custodian with which the eligible
foreign custodian has entered into an agreement like that between the Bank and
such eligible foreign custodian or an eligible foreign securities depository in
which the subcustodian participates.

4. Use of Subcustodian. With respect to Securities and other assets
which are maintained by the Bank in the physical custody of a subcustodian
pursuant to Section 3 (as used in this Section 4, the term "Securities" means
such Securities and other assets):

(a) The Bank will identify on its books as belonging to the Fund any
Securities held by such subcustodian.

(b) In the event that a subcustodian permits any of the Securities
placed in its care to be held in an eligible foreign securities depository such
subcustodian will be required by its agreement with the Bank to identify on its
books such Securities as being held for the account of the bank as a custodian
for its customers.

(c) Any Securities in the Custody Account held by a subcustodian of the
Bank will be subject only to the instructions of the Bank or its agents, and any
Securities held in an eligible foreign securities depository for the account of
a subcustodian will be subject only to the instructions of such subcustodian.

(d) The Bank will only deposit Securities other than cash in an account
with a subcustodian which includes exclusively the assets held by the Bank for
its customers, and the Bank will cause such account to be designated by such
subcustodian as a special custody account for the exclusive benefit of customers
of the Bank.

(e) Any agreement the Bank shall enter into with a subcustodian with
respect to the holding of Securities shall require that (i) the Securities are
not subject to any right, charge, security interest, lien or claim of any kind
in favor of such subcustodian or its creditors except for their safe custody or
administration and (ii) beneficial ownership of such Securities is freely
transferable without the payment of money or value other than for safe custody
or administration; provided, however, that the foregoing shall not apply to the
extent that any of the above-mentioned rights, charges, etc. result from any
compensation or other expenses arising with respect to the safekeeping of
Securities pursuant to such agreement or from any arrangements made by the Fund
with any such subcustodian.

(f) The Bank shall allow independent public accountants of the Fund such
reasonable access to the records of the Bank relating to the Securities held in
the Custody Account as required by such accountants in connection with their
examination of the books and records pertaining to the affairs of the Fund. The
Bank shall, subject to restrictions under applicable

<PAGE>3

law, also obtain from any subcustodian with which the Bank maintains the
physical possession of any Securities in the Custody Account an undertaking to
permit independent public accountants of the Fund such reasonable access to the
records of such subcustodian as may be required in connection with their
examination of the books and records pertaining to the affairs of the Fund. Upon
a reasonable request from the Fund, the Bank shall furnish to the Fund such
reports (or portions thereof) of the Bank's external auditors as relate directly
to the Bank's system of internal accounting controls applicable to the Bank's
duties under this Agreement. The Bank shall use its best efforts to obtain and
furnish the Fund with such similar reports as the Fund may reasonable request
with respect to each eligible foreign custodian and eligible foreign securities
depository holding Securities of the Fund.

(g) The Bank will supply to the Fund at least monthly a statement in
respect to any Securities in the Custody Account held by a subcustodian,
including an identification of the entity having possession of the Securities,
and the Bank will send to the Fund an advice or notification of any transfers of
Securities to or from the Custody Account, indicating, as to Securities acquired
for the Fund, the identity of the entity having physical possession of such
Securities. In the absence of the filing in writing with the Bank by the Fund of
exceptions or objections to any such statement within sixty (60) days of the
Fund's receipt of such statement, or within sixty (60) days after the date that
a material defect is reasonable discoverable, the Fund shall be deemed to have
approved such statement, the Bank shall, to the extent permitted by law, be
released, relieved and discharged with respect to all matters and things set
forth in such statement as though such statement had been settled by the decree
of a court of competent jurisdiction in an action in which the Fund and all
persons having any equity interest in the Fund were parties.

(h) The Bank hereby warrants to the Fund that in the Bank's opinion,
after due inquiry, the established procedures to be followed by each of its
branches, each branch of a qualified U.S. bank, each eligible foreign custodian
and each eligible foreign securities depository holding Securities of the Fund
pursuant to this Agreement afford protection for such Securities at least equal
to that afforded by the Bank's established procedures with respect to similar
securities held by the Bank (and its securities depositories) in New York.

(i) The Bank hereby warrants to the Fund that, as of the date of this
Agreement, the Bank is maintaining a Bankers Blanket Bond, and the Bank hereby
agrees to notify the Fund in the event its Bankers Blanket Bond is cancelled or
otherwise lapses.

5. Deposit Account Payments. Subject to the provisions of Section 7,
the Bank shall make, or cause its subcustodians to make, payments of cash
credited to the Deposit Account only:

(a) in connection with the purchase of Securities for the Fund and the
delivery of such securities to, or the crediting of such Securities to, or the
crediting of such Securities to the account of, the Bank or its subcustodian,
each such payment to be made at prices as confirmed by Instructions;

<PAGE>4

(b) for the purchase or redemption of shares of the capital stock of
the Fund and the delivery to, or crediting to the account of, the Bank or is
subcustodian of such shares to be so purchased or redeemed;

(c) for the payment for the account of the Fund of dividends,
interest, taxes, management or supervisory fees, capital distributions or
operating expenses;

(d) for the payments to be made in connection with the conversion,
exchange or surrender of Securities held in the Custody Account;

(e) for other proper corporate purposes of the Fund; or

(f) upon the termination of the Custody Agreement as hereinafter set
forth.

All payments of cash for a purpose permitted by subsection (a), (b), (c) or (d)
of this Section 5 will be made only upon receipt by the Bank of Instructions
which shall specify the purpose for which the payment is to be made. In the case
of any payment to be made for the purpose permitted by subsection (e) of the
Section 5, the Bank must first receive a certified copy of a resolution of the
Board of the Fund adequately describing such payment, declaring such purpose to
be a proper corporate purpose, and naming the person or persons to whom such
payment is to be made. Any payment pursuant to subsection (f) of this Section 5
will be made in accordance with Section 17.

In the event that any payment made under this Section 5 exceeds the
funds available in the Deposit Account, the Bank may, in its discretion, advance
the Fund an amount equal to such excess and such advance shall be deemed a loan
from the Bank to the Fund, payable on demand, bearing interest at the rate of
interest customarily charged by the Bank on similar loans.

If the Bank causes the Deposit Account to be credited on the payable
date for interest, dividends or redemptions, the Fund will promptly return to
the Bank any such amount or property so credited upon oral or written
notification that neither the Bank nor its subcustodian can collect such amount
or property in the ordinary course of business. The Bank or its subcustodian, as
the case may be, shall have no duty or obligation to institute legal
proceedings, file a claim or proof of claim in any insolvency proceeding or take
any other action with respect to the collection of such amount or property
beyond its ordinary collection procedures.

6. Custody Account Transactions. Subject to the provisions of Section
7, Securities in the Custody Account will be transferred, exchanged or
delivered by the Bank or its subcustodians only:

(a) upon sale of such Securities for the Fund and receipt by the Bank
or its subcustodian only of payment therefor, each such payment to be in the
amount confirmed by Instructions from Authorized Persons;

<PAGE>5

(b) when such Securities are called, redeemed or retired, or otherwise
become payable;

(c) in exchange for or upon conversion into other Securities alone or
other Securities and cash pursuant to any plan of merger, consolidation,
reorganization, recapitalization or readjustment;

(d) upon conversion of such Securities pursuant to their terms into
other Securities;

(e) upon exercise of subscription, purchase or other similar rights
represented by such Securities;

(f) for the purpose of exchanging interim receipts or temporary
Securities for definitive Securities;

(g) for the purpose of redeeming in kind shares of the capital stock
of the Fund against delivery to the Bank or its subcustodian of such shares to
be so redeemed;

(h) for other proper corporate purposes of the Fund; or

(i) upon the termination of this Custody Agreement as hereinafter
set forth.

All transfers, exchanges or deliveries of Securities in the Custody Account for
a purpose permitted by either subsection (a), (b), (c), (d), (e), or (f) of this
Section 6 will be made, except as provided in Section 8, only upon receipt by
the Bank of Instructions which shall specify the purpose of the transfer,
exchange or delivery to be made. In the case of any transfer or delivery to be
made for the purpose permitted by subsection (g) of this Section 6, the Bank
must first receive Instructions from Authorized Persons specifying the shares
held by the Bank or its subcustodian to be so transferred or delivered and
naming the person or persons to whom transfers or delivery of such shares shall
be made. In the case of any transfer, exchange or delivery to be made for the
purpose permitted by subsection (h) of this Section 6, the Bank must first
receive a certified copy of a resolution of the Board of the Fund adequately
describing such transfer. exchange or delivery, declaring such purpose to be a
proper corporate purpose, and naming the person or persons to whom delivery of
such securities shall be made. Any transfer or delivery pursuant to subsection
(i) of this Section 6 will be made in accordance with Section 17.

7. Custody Account Procedures. With respect to any transaction involving
Securities held in or to be acquired for the Custody Account, the Bank shall
cause the Deposit Account to be credited on the contractual settlement date with
the proceeds of any sale or exchange of Securities from the Custody Account and
to be debited on the contractual settlement date for the cost of Securities
purchased or acquired for the Custody Account. The Bank may reverse any such
credit or debit if the transaction with respect to which such credit or debit
was made fails to settle within a reasonable period, determined by the Bank in
its discretion, after the contractual settlement date, except, that if any
Securities delivered pursuant to this Section 7

<PAGE>6

are returned by the recipient thereof, the Bank may cause any such credits and
debits to be reversed at any time.

Notwithstanding the preceding paragraph, settlement and payment for
Securities received for, and delivery of Securities out of, the Custody Account
may be effected in accordance with the customary or established securities
trading or securities processing practices and procedures in the jurisdiction or
market in which the transaction occurs, including, without limitation,
delivering Securities to the purchaser thereof or to a dealer therefore (or an
agent for such purchaser or dealer) against a receipt with the expectation of
receiving later payment for such Securities from such purchaser or dealer.

8. Actions of the Bank. Until the Bank receives Instructions from
Authorized Persons to the contrary, the Bank will, or will instruct its
subcustodian, to:

(a) present for payment any Securities in the Custody Account which are
called, redeemed or retired or otherwise become payable and all coupons and
other income items which call for payment upon presentation to the extent that
the Bank or subcustodian is aware of such opportunities for payment, and hold
cash received upon presentation of such Securities in accordance with the
provision of Sections 2, 3 and 4 of this Agreement;

(b) in respect of Securities in the Custody Account, execute in the name
of the Fund such ownership and other certificates as may be required to obtain
payments in respect thereof;

(d) in respect of trades reported on the Fund's behalf through
Depository Trust Company ("DTC"), accept instruction from DTC (whether in a
DTC report or otherwise) as though they were given by an Authorized Person;

(e) convert monies received with respect to Securities of foreign
issuers into United States dollars or any other currency necessary to effect
any transaction involving the Securities whenever it is practicable to do so
through customary banking channels, using any method or agency available,
including, but not limited to, the facilities of the Bank, its subsidiaries,
affiliates or subcustodians, which shall be entitled to receive compensation
for such services; and

(f) appoint brokers and dealers for any transaction involving the
Securities in the Custody Account in accordance with Section 11(a) of the
Securities and Exchange Act of 1934 and Rule 11a-2-2(T) thereunder, including,
without limitation, affiliates of the Bank or any subcustodian, which brokers
and dealers shall be entitled to receive compensation for their services.

9. Instructions. As used in the Agreement, the term "Instructions"
means instruction of (or on behalf of) the Fund received by the Bank, via
telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess
or electronic instruction system acceptable to the

<PAGE>7

Bank which the Bank believes in good faith to have been given by two
Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.

Any instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing signed by two Authorized Persons (which
confirmation may bear the facsimile signature of such Persons), but the Fund
will hold the Bank harmless for any failure on the part of the Fund or its
agents to send such confirmation in writing, the failure of such confirmation
to conform to the telephone instructions received, and the Bank's failure to
produce such confirmation at any subsequent time. Unless otherwise expressly
provided, all Instructions shall continue in full force and effect until
cancelled or superseded. If the Bank requires test arrangements,
authentication methods or other security devices to be used with respect to
Instructions, any Instructions thereafter shall be given and processed in
accordance with such terms and conditions for the use of such arrangements,
methods or devices as the Bank may put into effect and modify from time to
time. The Fund shall safeguard and shall cause its agents, if applicable, to
safeguard any testkeys, identification codes or other security devices which
the Bank shall make available to the Fund or its agents. The Bank may
electronically record any instructions given by telephone, and other telephone
discussions, with respect to the Custody Account.

10. Authorized Persons. As used in the Agreement, the term "Authorized
Person" means such officers or such agents of the Fund as have been designated
by a resolution of the Board of the Fund, a certified copy of which has been
provided to the Bank, to act on behalf of the Fund in the performance of any
acts which Authorized Persons may do under this Agreement. Such persons shall
continue to be Authorized Persons until such time as the Bank receives
Instructions from Authorized Persons that any such officer, or agent is no
longer an Authorized Person.

11. Nominees. Securities in the Custody Account which are ordinarily
held in registered form may be registered in the name of the Bank's nominee
or, as to any Securities in the possession of an entity other than the Bank,
in the name of such entity's nominee. The Fund agrees to hold any such nominee
harmless from any liability as a holder of record of such Securities, but not
if such liability is a result of such nominee's negligence. The Bank may
without notice to the Fund cause any such Securities to cease to be registered
in the name of any such nominee and to be registered in the name of the Fund.
In the event that any Securities registered in the name of the Bank's nominee
or held by one of its subcustodians and registered in the name of such
subcustodian's nominee are called for partial redemption by the issuer of such
Security, the Bank may allot, or cause to be allotted, the called portion to
the respective beneficial holders of such class of security in any manner the
Bank deems to be fair and equitable.

12. Standard of Care. The Bank shall be responsible for the
performance of only such duties as are set forth herein or contained in
Instructions given to the Bank by Authorized Persons which are not contrary to
the provisions of the Agreement. The Bank will use reasonable care with
respect to the safekeeping of Securities in the Custody Account and cash

<PAGE>8

in the Deposit Account. The Bank shall be liable to the Fund for any loss
which shall occur as the result of a failure of a subcustodian or an eligible
foreign securities depository engaged by such subcustodian to exercise
reasonable care with respect to the safekeeping of such Securities and other
assets to the same extent that the Bank would be liable to the Fund if the
Bank were holding such Securities and other assets in New York. In the event
of any loss to the Fund by reason of the failure of the Bank or its
subcustodian or an eligible foreign securities depository engaged by such
subcustodians to utilize reasonable care, the Bank shall be liable to the Fund
to the extent of the Fund's damages, to be determined based on the market
value of the property which is the subject of the loss at the date of
discovery of such loss and without reference to any special conditions or
circumstances. The Bank shall be held to the exercise of reasonable care in
carrying out this Agreement but shall be indemnified by, and shall be without
liability to, the Fund for any action authorized by this Agreement taken or
omitted by the Bank in good faith without negligence. The Bank shall be
entitled to rely, and may act, on the prior, written advice of counsel (who
may be counsel for the Fund) on all matters and shall be without liability for
any action reasonably taken or omitted in good faith pursuant to such advice.
The Bank need not maintain any insurance for the benefit of the Fund. The Bank
shall provide to the Fund, on an annual basis, a report stating whether any
events have occurred which would render the arrangements hereunder to cease to
be in compliance with the rules of the Securities and Exchange Commission
governing such arrangements and describing any such event.

All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Fund. The Bank shall have no liability for any loss occasioned by delay in the
actual receipt of notice by the Bank or by its subcustodian of any payment,
redemption or other transaction regarding Securities in the Custody Account in
respect of which the Bank has agreed to take action as provided in Section 8
hereof. The Bank shall not be liable for any action taken in good faith upon
Instructions or upon any certified copy of any resolution and may rely on the
genuineness of any such documents which it may in good faith believe to be
validly executed. The Bank shall not be liable for any loss resulting from, or
caused by, the direction of the Fund to maintain custody of any Securities or
cash in a foreign country including, but not limited to, losses resulting from
nationalization, expropriation, currency restriction, act of war or terrorism,
insurrection, revolution, nuclear fusion, fission or radiation, or acts of
God.

13. Compliance with Securities and Exchange Commission Rules and
Orders. Except to the extent the Bank has specifically agreed pursuant to
this Agreement to comply with a condition of a rule, regulation,
interpretation, or exemptive order promulgated by or under the authority of
the Securities and Exchange Commission, the Fund shall be solely responsible
to assure that the maintenance of Securities and cash under this Agreement
complies with any such rule, regulation, interpretation or exemptive order.

14. Corporate Action. The Bank or its subcustodian is to forward to
Provident National Bank ("Provident") (or any successor thereto appointed by
the Fund) only such communications relative to the Securities in the Custody
Account as call for voting or the exercise of rights or other specific action
(including material relative to legal proceedings

<PAGE>9

intended to be transmitted to security holders) to the extent sufficient
copies are received by the Bank or its subcustodian in time for forwarding to
Provident. The Bank or its subcustodian will cause its nominee to execute and
deliver to Provident (or its successor) proxies relating to Securities in the
Custody Account registered in the name of such nominee but without indicating
the manner in which such proxies are to be voted. Proxies relating to bearer
Securities will be delivered in accordance with written instructions from
Authorized Persons.

15. Fees and Expenses. The Fund agrees to pay to the Bank from time to
time such compensation for its services pursuant to the Agreement as may be
mutually agreed upon in writing from time to time. The Fund hereby agrees to
hold the Bank harmless from any liability or loss resulting from any taxes or
other governmental charges, and any expenses related thereto, which may be
imposed or assessed with respect to the Custody Account and also agrees to
hold the Bank, its subcustodian, and their respective nominees harmless from
any liability as a record holder of Securities in the Custody Account. The
Bank is authorized to charge any account of the Fund for such items and the
Bank shall have a lien on Securities in the Custody Account and on cash in the
Deposit Account for any amount owing to the Bank from time to time under this
Agreement.

16. Effectiveness. This Agreement shall be effective on the date
first noted above.

17. Termination. This Agreement may be terminated by the Fund or the
Bank by 60 days' written notice to the other, sent by registered mail,
provided that any termination by the Fund shall be authorized by a resolution
of the Board of the Fund, a certified copy of which shall accompany such
notice of termination, and provided further, that such resolution shall
specify the names of the persons to whom the Bank shall deliver the Securities
in the Custody Account and to whom the cash in the Deposit Account shall be
paid. If notice of termination is given by the Bank, the Fund shall, within 60
days following the giving of such notice, deliver to the Bank a certified copy
of a resolution of its Board specifying the names of the persons to whom the
Bank shall deliver such Securities and cash to the persons so specified, after
deducting therefrom any amounts which the Bank determines to be owed to it
under Section 15. If within 60 days following the giving of a notice of
termination by the Bank, the Bank does not receive from the Fund a certified
copy of a resolution of Board specifying the names of the persons to whom the
cash in the Cash Account shall be paid, the Bank, at its election, may deliver
such Securities and pay such cash to a bank or trust company doing business in
the State of New York to be held and disposed of pursuant to the provisions of
the Agreement, or to Authorized Persons, or may continue to hold such
Securities and cash until a certified copy of one or more resolutions as
aforesaid is delivered to the Bank. The obligations of the parties hereto
regarding the use of reasonable care, indemnities and payment of fees and
expenses shall survive the termination of this Agreement.

18. Notices. Any notice or other communication from the Fund or its
agents to the Bank is to be sent to the office of the Bank at Two World Trade
Center, New York, New York 10048, Attention: Global Custody Division, or such
other address as may hereafter be given to the Fund in accordance with the
notice provision hereunder, and any notice from the Bank

<PAGE>10

to the Fund is to be mailed postage prepaid, addressed to the Fund at the
address appearing below, or as the same may hereafter be changed on the Bank's
records in accordance with notice hereunder from the Fund.

19. Governing Law and Successors and Assigns. This Agreement shall
be governed by the law of the State of New York and shall not be assignable by
any party, but shall bind the respective successors and assigns of the Fund
and the Bank.

20. Headings. The headings of the paragraphs hereof are included for
convenience of reference only and do not form a part of this Agreement.

21. Counterpart Execution. This Agreement may be executed in any
number of counterparts with the same effect as if all parties hereto had
signed the same documents. All counterparts shall be construed together and
shall constitute one Agreement.

WARBURG PINCUS GLOBAL
POST-VENTURE CAPITAL FUND, INC.

By:/s/Eugene P. Grace

Title: VP & Secretary

Address for record: 466 Lexington Avenue
New York, NY 10017-3147

FIDUCIARY TRUST COMPANY
INTERNATIONAL

By:/s/Joseph A. Cajigal

Title: Senior Vice President

h:\isg\warburgg.pvc.wpd

<PAGE>1

Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022-4677

September 20, 1996

Warburg, Pincus Global Post-Venture Capital Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147

Ladies and Gentlemen:

We have acted as counsel to Warburg, Pincus Global Post-Venture Capital
Fund, Inc. (the "Fund"), a corporation organized under the laws of the
State of Maryland, in connection with the preparation of a registration
statement on Form N-1A covering the offer and sale of an indefinite number
of shares of Common Stock of the Fund, par value $.001 per share (the "Common
Stock").

We have examined copies of the Charter and By-Laws of the Fund, the
Fund's prospectuses and statement of additional information (the
"Statement of Additional Information") included in its Registration
Statement on Form N-1A, Securities Act File No. 333-08459 and Investment
Company Act File No. 811-07715 (the "Registration Statement"), all
resolutions adopted by the Fund's Board of Directors (the "Board") at its
initial meeting held on July 22, 1996, consents of the Board and other
records, documents and papers that we have deemed necessary for the
purpose of this opinion. We have also examined such other statutes and
authorities as we have deemed necessary to form a basis for the opinion
hereinafter expressed.

In our examination of material, we have assumed the genuineness of
all signatures and the conformity to original documents of all copies
submitted to us. As to various questions of fact material to our opinion, we
have relied upon statements and certificates of officers and
representatives of the Fund and others.

Based upon the foregoing, we are of the opinion that:

<PAGE>2

1. The Fund is duly organized and validly existing as a
corporation in good standing under the laws of the State of
Maryland.

2. The 10,000 presently issued and outstanding shares of
Common Stock, including 9,900 Common Shares and 100
Advisor Shares, of the Fund have been validly and legally
issued and are fully paid and nonassessable.

3. The Common Shares and Advisor Shares of the Fund to be
offered for sale pursuant to the Registration Statement
are, to the extent of the number of shares authorized to be
issued by the Fund in its Charter, duly authorized and,
when sold, issued and paid for as contemplated by
Registration Statement, will have been validly and
legally issued and will be fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement, to the reference to us in the Statement of
Additional Information and to the filing of this opinion as an exhibit to any
application made by or on behalf of the Fund or any distributor or dealer in
connection with the registration or qualification of the Fund, the Common
Shares or the Advisor Shares under the securities laws of any state or other
jurisdiction.

We are members of the Bar of the State of New York only and do not opine as
to the laws of any jurisdiction other than the laws of the State of New
York and the laws of the United States, and the opinions set forth
above are, accordingly, limited to the laws of those jurisdictions. As to
matters involving the application of the laws of the State of Maryland, we
have relied on the opinion of Messrs. Venable, Baetjer and Howard, LLP.

Very truly yours,

/s/ Willkie Farr & Gallagher

<PAGE>1

Venable, Baetjer and Howard, LLP
1800 Mercantile Bank & Trust Building
2 Hopkins Plaza
Baltimore, Maryland 21201

September 20, 1996

Willkie, Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4677

Re: Warburg, Pincus Global Post-Venture Capital Fund, Inc.

Ladies and Gentlemen:

We have acted as special Maryland counsel for Warburg,
Pincus Global Post-Venture Capital Fund, Inc., a Maryland corporation (the
"Fund"), in connection with the organization of the Fund and the issuance of
shares of its common stock, par value $.001 per share, including Common
Stock (the "Common Shares") and Common Stock - Series 2 Shares (the "Advisor
Shares").

As Maryland counsel for the Fund, we are familiar with
its Charter and Bylaws. We have examined its Registration Statement on Form
N-1A, Securities Act File No. 333-08459 and Investment Company Act File No.
811-07715, including the prospectuses and statement of additional
information contained therein, substantially in the form in which it is to
become effective (the "Registration Statement"). We have further
examined and relied upon a certificate of the Maryland State Department
of Assessments and Taxation to the effect that the Fund is duly incorporated
and existing under the laws of the State of Maryland and is in good
standing and duly authorized to transact business in the State of
Maryland.

We have also examined and relied upon such corporate
records of the Fund and other documents and certificates with respect to
factual matters as we have deemed necessary to render the opinion expressed
herein. We have assumed, without independent verification, the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity with originals of all documents submitted to
us as copies.

<PAGE>2

Based on such examination, we are of the opinion and so
advise you that:

1. The Fund is duly organized and validly
existing as a corporation in good standing
under the laws of the State of Maryland.

2. The 10,000 presently issued and
outstanding shares of common stock,
including 9,900 Common Shares and 100
Advisor Shares of the Fund have been
validly and legally issued and are fully
paid and nonassessable.

3. The Common Shares and Advisor Shares of
the Fund to be offered for sale pursuant
to the Registration Statement are, to the
extent of the number of shares authorized
to be issued by the Fund in its Charter,
duly authorized and, when sold, issued
and paid for as contemplated by the
Registration Statement, will have been
validly and legally issued and will be
fully paid and nonassessable.

This letter expresses our opinion with respect to the
Maryland General Corporation Law governing matters such as due
organization and the authorization and issuance of stock. It does not
extend to the securities or "Blue Sky" laws of Maryland, to federal
securities laws or to other laws.

You may rely upon our foregoing opinion in rendering
your opinion to the Fund that is to be filed as an exhibit to the
Registration Statement. We consent to the filing of this opinion as an
exhibit to the Registration Statement.

Very truly yours,

/s/ Venable, Baetjer and Howard, LLP
BA038582/28141:118569

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion of our report dated September 18, 1996 on our
audit of the Statement of Assets and Liabilities of Warburg, Pincus Global
Post-Venture Capital Fund, Inc. as of September 13, 1996 with respect to this
Pre-Effective Amendment No. 1 to the Registration Statement (No. 33-08459)
under the Securities Act of 1933 on Form N-1A. We also consent to the
reference to our Firm under the heading "Independent Accountants and Counsel"
in the filing.

/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
September 20, 1996