The IPO Plus
Aftermarket Fund
................................................................................
Dear Shareholder:
We are pleased to report that for the six months ended March 31, 2000, the IPO
Plus Aftermarket Fund produced a total return of +99.5%, as compared with 26.8%
for the Russell 2000.
The IPO Fund's good six-month performance was the result of investing in several
strong areas of the new economy, including internet infrastructure, wireless
data, and genomics. In the Internet infrastructure sector, the IPO Fund saw high
returns from optical switch provider Sycamore Networks and optical components
maker E-Tek Dynamics. In the wireless data area the IPO Fund benefited from
holding wireless systems integrator Aether Systems and wireless operating
software vendor Phone.com. In the biotechnology sector, the completion of human
genome mapping and the increase in gene therapy research helped our investments
in the leading biotech drug discovery and pharmaceutical giant Genentech and
protein research kit provider Invitrogen.
In addition to targeting leading companies in strong industries, we added to the
IPO Fund's short positions to hedge the IPO Fund's portfolio during market
downturns. Because we research every IPO, we are able to identify the lowest
rated IPOs, such as consumer internet portals with high losses, and successfully
profit from shorting them.
While the Fund's six-month return is high, since mid-March the IPO Fund, as well
as the equity market in general, has experienced a large correction. Investors
looking for growth opportunities had bid up new economy stocks to high levels.
Facing concerns over high interest rates and a larger choice of companies being
funded in these new fields, investors are causing a shakeout as they separate
the leaders from the laggards.
The IPO Plus Aftermarket Fund is now in its third year of operation. The IPO
Fund contains a carefully selected portfolio of the leading new economy stocks.
We use our fundamental research to find these stocks and we expect them to
benefit as the market recovers.
Sincerely,
Renaissance Capital
May 15, 2000
PORTFOLIO OF INVESTMENTS
................................................................................
March 31, 2000
(unaudited)
Shares Value
Common Stock (83.1%)
Business Services (3.4%)
Aether Systems, Inc.* 20,000 $ 3,630,000
Corporate Executive Board Co.* 4,000 203,000
School Specialty, Inc.* 20,100 432,150
Tenfold Corp.* 26,000 1,573,000
---------------
---------------
5,838,150
Computer Equipment (2.1%)
Palm, Inc.* 81,000 3,634,875
---------------
Electronic Components / Semiconductor
Manufacturing (2.3%)
Infineon Technologies AG ADR* 60,000 3,446,250
Intersil Holding Corp.* 3,170 163,849
ST Assembly Test Services Ltd.* 10,000 485,000
---------------
---------------
4,095,099
Financial (1.9%)
E*Trade Group, Inc.* 100,000 3,012,500
Gabelli Asset Management, Inc.* 13,000 222,625
---------------
---------------
3,235,125
Health Care (8.2%)
Caliper Technologies Corp.* 40,000 3,235,000
Diversa Corp.* 27,500 1,292,500
Genentech, Inc.* 45,000 6,840,000
Invitrogen Corp.* 50,000 2,903,125
---------------
14,270,625
<PAGE>
PORTFOLIO OF INVESTMENTS
.........................................................................
(Continued)
Internet - Infrastructure (12.5%) Shares Value
------ -----
724 Solutions, Inc.* 20,000 $
2,490,000
Brocade Communications System, Inc.* 30,000 5,379,375
Cacheflow, Inc.* 30,000 3,555,000
Foundry Networks, Inc.* 30,000 4,312,500
Redback Networks, Inc.* 20,000 5,998,750
---------------
---------------
21,735,625
Internet - Retail (0.4%)
Lastminute.com plc ADR* 40,100 766,913
---------------
Internet - Services (10.4%)
Avenue A, Inc.* 40,000 1,220,000
Exodus Communications, Inc.* 10,000 1,405,000
FreeMarkets, Inc.* 10,150 1,228,150
HearMe* 40,000 1,010,000
HomeStore.com, Inc.* 45,100 2,198,625
Internet Initiative Japan, Inc., ADR* 55,000 3,836,250
Korea Thrunet Co., Ltd., Class A* 80,000 3,095,000
Lante Corp.* 500 15,188
Mediaplex, Inc.* 10,000 520,000
NaviSite, Inc.* 5,000 608,750
NetCreations, Inc.* 15,000 637,500
Preview Systems, Inc.* 15,000 709,688
Universal Access, Inc.* 50,000 1,675,000
---------------
18,159,151
<PAGE>
PORTFOLIO OF INVESTMENTS
...........................................................................
(Continued)
Internet - Software (13.6%) Shares Value
------ -----
Active Software, Inc.* 25,000 $ 1,590,234
Allaire Corp.* 40,000 3,025,000
Ariba, Inc.* 15,000 3,144,375
Centra Software, Inc.* 20,000 420,000
E.piphany, Inc.* 15,000 2,003,437
Intertrust Technologies Corp.* 500 21,250
Niku Corp.* 35,000 1,655,937
Phone.com, Inc.* 30,000 4,893,750
Quest Software, Inc.* 30,000 3,382,500
RADVision Ltd.* 20,000 1,047,500
TIBCO Software, Inc.* 30,000 2,445,000
Vitria Technology, Inc.* 400 40,325
---------------
---------------
23,669,308
Leisure (4.7%)
Fox Entertainment Group, Inc., Class A* 24,500 733,469
Martha Stewart Living Omnimedia, Inc., Class A 67,100 1,811,700
Radio One, Inc.* 63,000 4,197,375
Spanish Broadcasting System, Inc., Class A* 25,000 586,328
World Wrestling Federation Entertainment, 50,000 886,719
Inc.*
---------------
---------------
8,215,591
Telecom Equipment (14.3%)
Avanex Corp.* 30,000 4,552,500
E-Tek Dynamics, Inc.* 15,000 3,528,750
Extreme Networks, Inc.* 25,000 1,975,000
Finisar Corp.* 40,000 5,860,625
Kana Communications, Inc.* 25,000 1,700,000
Sycamore Networks, Inc.* 57,000 7,353,000
---------------
24,969,875
<PAGE>
PORTFOLIO OF INVESTMENTS
...........................................................................
(Continued)
Telecom Services (9.3%) Shares Value
------ -----
Adelphia Business Solutions, Inc.* 15,000 $ 924,375
American Tower Corp., Class A* 65,000 3,209,375
Covad Communications Group, Inc.* 55,000 3,987,500
Cypress Communications, Inc.* 100,000 2,450,000
GT Group Telecom, Class B* 70,500 1,471,688
KPNQWest N.V. Class C* 20,000 1,085,000
Triton PCS Holdings, Inc., Class A* 10,100 603,475
United Pan-Europe Communications NV ADR* 51,000 2,527,687
---------------
16,259,100
Total Common Stocks (Cost $126,969,437) 144,849,437
---------------
Face
Amount Value
U.S. Government Securities (12.2%)
U.S. Treasury Bill due 04/20/00 $ 2,474,000 $ 2,467,107
U.S. Treasury Bill due 04/27/00 2,535,000 2,525,182
U.S. Treasury Bill due 05/04/00 2,625,000 2,611,935
U.S. Treasury Bill due 05/11/00 6,348,000 6,309,538
U.S. Treasury Bill due 06/01/00 2,074,000 2,054,660
U.S. Treasury Bill due 06/08/00 4,087,000 4,044,140
U.S. Treasury Bill due 06/22/00 1,192,000 1,176,901
Total U.S. Government Securities (Cost $21,186,646) 21,189,463
Total Investments (95.3%) (Cost $148,156,083) (a) 166,038,900
Total Short Sales (-8.8%) (Proceeds $16,301,769) (15,395,550)
Other Assets and Liabilities (Net) (13.5%) 23,654,208
----------------
Net Assets (100.0%) $ 174,297,558
================
<PAGE>
PORTFOLIO OF INVESTMENTS
.........................................................................
(Continued)
Schedule of Short Sales (-8.8%) Shares Value
Alloy Online, Inc. 34,400 $ 574,050
Buy.com 50,000 487,500
Caldera Systems 67,500 1,586,250
ebookers.com, plc 41,600 1,040,000
Edison Schools, Inc. 30,000 588,750
eMerge Interactive, Inc. 25,000 753,125
GigaMedia Ltd 25,000 1,356,250
HeadHunter.Net, Inc. 20,000 361,250
I-CABLE Communications Ltd 20,000 305,000
Interactive Investors International plc 500 18,250
Interep National Radio Sales, Inc., Class A 20,000 133,750
Loislaw.com, Inc. 46,000 882,625
Loudeye Technologies, Inc. 15,000 $ 523,125
Riverdeep Group, plc 40,000 1,612,500
Skillsoft Corp. 50,000 1,453,125
Savvis Communications Corp 50,000 881,250
Somera Communications, Inc. 25,000 303,125
TiVo, Inc. 15,000 519,375
Webvan Group, Inc. 40,000 307,500
WorldQuest Networks, Inc. 40,000 990,000
Xcare.net, Inc. 50,000 718,750
-----------------
(Proceeds $16,301,770) $15,395,550
=================
* Non-income producing
ADR American depository receipt
(a) The cost for federal income tax purposes was $148,156,083. At March 31,
2000, net unrealized appreciation for all securities (excluding securities
sold short ) based on tax cost was $17,882,817. This consists of aggregate
gross unrealized appreciation for all securities of $34,248,889 and
aggregate gross unrealized depreciation for all securities of $16,366,072.
Financial Highlights
...........................................................................
For a Share Outstanding Throughout the Period
Six Months December 19,
Ended 1997 +
March 31, Through
2000 September
(unaudited) 30, 1998
Year Ended
September
30, 1999
-------------- -------------- --------------
Net Asset Value, Beginning of Period $18.58 $11.19 $12.50
-------------- -------------- --------------
Income From Investment Operations
Net Investment Loss (0.03) (0.16) (0.08)
Net Realized and Unrealized
Gain / Loss
18.52 7.55 (1.23)
-------------- -------------- --------------
Total from Investment Operations 18.49 7.39 (1.31)
-------------- -------------- --------------
Net Asset Value, End of Period $37.07 $18.58 $11.19
============== ============== ==============
Total Return 99.52%** 66.04% (10.48)%**
Ratios and Supplement Data
Net Assets, End of Period
(Thousands) $174,298 $15,422 $7,288
Ratio of Expenses to Average
Net Assets 2.50%* 2.50% 2.50%*
Ratio of Net Investment Loss to
Average Net Assets (0.38)%* (1.17)% (0.96)%*
Ratio of Expenses to Average Net
Assets (excluding waivers)
2.53%* 3.41% 4.45%*
Ratio of Net Investment Loss to
Average Net Assets (excluding
waivers) (0.41)%* (2.08)% (2.99)%*
Portfolio Turnover Rate 20.37% 145.78% 71.26%
+ Commencement of Operations
* Annualized
** Not Annualized
See Notes to Financial Statements
Statement of Assets and Liabilities
................................................................................
.
March 31, 2000 (unaudited)
Assets
Investment Securities, at Value, (cost $148,156,083)
$166,038,900
Cash
62,358
Deposits with Brokers for Securities Sold Short
23,406,079
Receivable for Investments Sold
2,925,815
Receivable for Portfolio Shares Sold
1,081,586
Organizational Costs--Note A
62,726
Other Assets 875
------------------
Total Assets 193,578,339
Liabilities
Securities Sold Short, at Value (proceeds $16,301,769)
15,395,550
Payable for Portfolio Shares Redeemed
1,744,469
Payable for Investments Purchased 1,623,909
Payable for Advisory Fee - Note B 280,543
Payable for Distribution Fees--Note D
83,407
Payable for Administrative Fees - Note C 62,010
Payable for Shareholder Services Fees--Note D
41,036
Accrued Expenses 49,857
------------------
Total Liabilities 19,280,781
Net Assets $174,297,558
============
Net Assets Consist of:
Paid in Capital
$152,031,336
Accumulated Net Investment Loss (154,596)
Accumulated Net Realized Gain on Investments
3,631,782
Net Unrealized Appreciation on:
Investment Securities 17,882,817
Short Sales 906,219
------------------
Net Assets $174,297,558
Net Asset Value, Offering and Redemption Price per Share ($174,297,558 /
4,702,386 shares of beneficial interest, without par value, unlimited
number of shares authorized) $37.07
==================
See Notes to Financial Statements
Statement of Operations
..........................................................
For the Six Months Ended March 31, 2000 (unaudited)
Investment Income
Interest $418,084
Other Income 444,515
------------
Total Investment Income 862,599
Expenses
Investment Adviser -- Note B
Basic Fees $672,911
Less: Fees Waived (8,580) 664,331
-------
Administrative Fee -- Note C 69,223
Legal 14,560
Distributions Fee --Note D 101,769
Shareholder Services Fees--Note D 101,769
Amortization of Organizational Costs - Note A 11,593
Federal and State Registration 18,205
Shareholder Reports 8,150
Auditing 4,371
Trustees' Fees --- Note E
Basic Fees 3,250
Less: Fees Waived (3,250) -
---------
Custody Fees 3,188
Other Expenses 20,036
------------
Net Expenses 1,017,195
Net Investment Loss (154,596)
------------
Realized and Unrealized Gain (Loss) on Investments
Net Realized Gain on:
Investment Securities 1,805,360
Short Sales 970,158
------------
Net Realized Gain on Investments 2,775,518
Net Change in Unrealized Appreciation during the period
on:
Investment Securities
16,848,652
Short Sales 762,442
------------
Net Unrealized Appreciation on Investments 17,611,094
------------
Net Realized and Unrealized Gain on Investments 20,386,612
Net Increase in Net Assets Resulting from Operations $20,232,016
============
See Notes to Financial Statements
Statement of Changes in Net Assets
...........................................................
Six Months Ended Year
March 31, 2000 Ended
(unaudited) September 30, 1999
--------- ------------------
Increase in Net Assets from Operations
Net Investment Loss $ (154,596) $ (135,273)
Net Realized Gain from Investments 2,775,518 1,012,584
Net Unrealized Appreciation
on Investments 17,611,094 3,583,467
-------------------- ----------------
Net Increase in Net Assets
Resulting from Operations 20,232,016 4,460,778
-------------------- ----------------
Fund Share Transactions
Proceeds from Shares Sold 171,285,497 9,922,133
Cost of Shares Redeemed (32,641,556) (6,249,024)
-------------------- ----------------
Net Increase from Fund Share Transactions 138,643,941 3,673,109
Total Increase in Net Assets 158,875,957 8,133,887
-------------------- ----------------
Net Assets
Beginning of Period 15,421,601 7,287,714
-------------------- ----------------
End of Period $174,297,558 $15,421,601
==================== ================
Increase in Fund Shares Issued
Number of Shares Sold 4,806,883 553,443
Number of Shares Redeemed (934,452) (374,789)
--------------------
----------------
Net Increase in Fund Shares 3,872,431 178,654
==================== ================
See Notes to Financial Statements
Notes to Financial Statements
............................
March 31, 2000 (unaudited)
The IPO Plus Aftermarket Fund ("IPO Fund") is a series of Renaissance Capital
Greenwich Funds ("Renaissance Capital Funds"), a Delaware Trust, operating as a
registered, diversified, open-end investment company. Renaissance Capital Funds,
organized on February 3, 1997, may issue an unlimited number of shares and
classes of the IPO Fund.
The investment objective of the IPO Fund is to seek capital appreciation by
investing in the common stocks of Initial Public Offerings on the offering and
in the aftermarket.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are followed by the IPO Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: Portfolio securities are valued at the last sale price on
the securities exchange or national securities market on which such securities
primarily are traded. Securities not listed on an exchange or national
securities market, or securities in which there were not transactions, are
valued at the average of the most recent bid and asked prices. Short-term
investments are carried at amortized cost, which approximates value. Any
securities or other assets for which recent market quotations are not readily
available are valued at fair value as determined in good faith by the IPO Fund's
Board of Trustees.
Restricted securities, as well as securities or other assets for which market
quotations are not readily available, or are not valued by a pricing service
approved by the Board of Trustees, are valued at fair value as determined in
good faith by the Board of Trustees.
2. FEDERAL INCOME TAXES: It is the IPO Fund's intention to qualify as a
regulated investment company under Subchapter M of the
Internal Revenue Code and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in
the financial statements.
3. DISTRIBUTIONS TO SHAREHOLDERS: The IPO Fund will normally distribute
substantially all of its net investment income in December. Any realized net
capital gains will be distributed annually. All distributions are recorded on
the ex-dividend date. The amount and character of income and capital gain
distributions to be paid are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and gains
on various investment securities held by the Fund, timing differences and
differing characterization of distributions made by the Fund.
4. REPURCHASE AGREEMENTS: The IPO Fund may enter into repurchase agreements.
Under the terms of a repurchase agreement, the IPO Fund acquires securities from
financial institutions or registered broker-dealers, subject to the seller's
agreement to repurchase such securities at a mutually agreed upon date and
price. The seller is required to maintain the value of collateral held pursuant
to the agreement at not less than the repurchase price (including accrued
interest). If the seller were to default on its repurchase obligation or become
insolvent, the IPO Fund would suffer a loss to the extent that the proceeds from
a sale of the underlying portfolio securities were less than the repurchase
price, or to the extent that the disposition of such securities by the IPO Fund
was delayed pending court action.
Notes to Financial Statements
............................
(continued)
5. ORGANIZATIONAL COSTS: Costs incurred by the IPO Fund in connection with its
organization and initial registration of shares have been deferred and are
being amortized on a straight-line basis over a five-year period.
6. OTHER: Security transactions are accounted for on a trade date basis.
Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
B. INVESTMENT ADVISER: Under the terms of an Investment Advisory Agreement with
Renaissance Capital Corporation ("Renaissance Capital"), a registered investment
adviser, the IPO Fund agrees to pay Renaissance Capital an annual fee equal to
1.50% of the average daily net assets of the IPO Fund and payable monthly.
Additionally, Renaissance Capital has voluntarily agreed to defer or waive fees
or absorb some or all of the expenses of the IPO Fund in order to limit Total
Fund Operating Expenses to 2.50%. During the six months ended March 31, 2000,
Renaissance Capital deferred fees of $8,580. These deferrals are subject to
later recapture by the Renaissance Capital for a period of three years. Total
deferrals subject to recapture by Renaissance Capital are $212,009. In addition,
the IPO Fund recouped previously deferred fees totaling $62,349 during the six
months ended March 31, 2000. This amount has been included with current annual
advisory fees in the Statement of Operations. The effective management fee
annual rate for the six months ended March 31, 2000, including current-year
accrued fees and recoupement of prior-year deferrals, but not including the
effect of current-year deferrals or expense absorptions is 1.65%.
C. FUND ADMINISTRATION: Under an Administration and Fund Accounting Agreement
(the "Administration Agreement"), Chase Global Funds Services Company (the
"Administrator"), generally supervises certain operations of the IPO Fund,
subject to the over-all authority of the Board of Trustees. For its services,
the Administrator receives a maximum annual fee of 0.17%, computed daily and
payable monthly as a percent of assets under management.
D. SHAREHOLDER SERVICES: The IPO Fund has adopted a Distribution and Shareholder
Services Plan ("the Plan") pursuant to Rule 12b-1 under the 1940 Act. The Plan
authorizes the IPO Fund, as determined from time to time by the Board of
Trustees, to pay up to 0.50% of the IPO Fund's average daily net assets for
distribution and shareholder servicing.
Total annual fee for distribution of the IPO Fund's shares which is payable
monthly, will not exceed 0.25% of the average daily net asset value of shares
invested in the IPO Fund by customers of the broker-dealers or distributors.
Each shareholder servicing agent receives an annual fee which is payable monthly
up to 0.25% of the average daily net assets of shares of the IPO Fund held by
investors for whom the shareholder servicing agent maintains a servicing
relationship.
To discourage short term investing and recover certain administrative, transfer
agency, shareholders servicing and other costs associated with such short term
investing, the IPO Fund charges a 2% fee on such redemption of shares held less
than 90 days. Such fees amounted to $444.515 for the six months ending March 31,
2000, representing 1.09% of average net assets.
E. TRUSTEES' FEES: Beginning January 1, 2000, Trustees fees are $6,000 per
year plus $1,000 for each meeting attended. Prior to that date, the Trustees
had agreed to waive their fees.
F. PURCHASES AND SALES: For the six months ended March 31, 2000, the IPO
Fund made purchases of approximately $128,857,182 and sales of approximately
$14,567,753 of investment securities other than long-term U.S. Government and
short-term securities.
G. OTHER: Investing in Initial Public Offerings entails special risks,
including limited operating history of the companies, unseasoned trading,
high portfolio turnover and limited liquidity.