<PAGE>
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
July 10, 1997
To Our Shareholders:
We would like to take this opportunity to welcome you as shareholders of
Cohen & Steers Special Equity Fund and submit to you the Fund's semi-annual
report for the period ended June 30, 1997. The Fund commenced operations on May
8, 1997 at an initial net asset value of $25.00 per share and at June 30, 1997
the Fund's net asset value was $27.16 per share. In addition, a semi-annual
dividend of $0.13 per share was declared for shareholders of record on June 23,
1997 and paid on June 24, 1997.
FUND OVERVIEW
As described in the prospectus, the Fund's primary investment objective is
maximum capital appreciation. We intend to achieve this objective by investing
in the equity securities of companies which are primarily engaged in the real
estate industry or related industries, or which own significant real estate
assets. While we seek a degree of portfolio diversification, we expect the
portfolio to be concentrated in a limited number of issues which our research
department considers to have the greatest appreciation potential. This policy of
concentration may introduce an element of risk that is not present in a
portfolio that is more diversified.
A large number of our holdings are real estate investment trusts ('REITs'),
but a significant number of issues in the portfolio are real estate companies
that elect the more traditional C-corporation tax structure. Most REITs invest
primarily in income-producing properties, are required to distribute 95% of
their taxable income to shareholders in the form of dividends, and are subject
to a number of other investment restrictions imposed by the rules which govern
the industry. REITs tend to have returns which have a low correlation to the
stock market in general, and a significant amount of their investment return
comes from dividend income. In contrast, the companies the Fund will hold that
are not REITs may be engaged in service businesses or are active in land and
other development activities. In addition, they may employ shorter-term asset
holding strategies. These companies tend to employ greater financial leverage
and pay little in the way of dividends, choosing instead to reinvest their
earnings in the business. For all of these reasons, C-corporations' stock prices
tend to be more volatile. The inclusion of these companies raises the volatility
of the portfolio compared to one which is principally made up of REITs.
The Fund will cease offering its shares to new investors for at least six
months when total net assets reach $150 million. This limitation will facilitate
maximum investment flexibility, in our opinion.
INVESTMENT REVIEW
We are pleased to report that the Fund enjoyed a 9.2% total return from its
inception date to June 30, 1997. During this period both the stock market and
real estate securities in general performed very well. At mid-year, the Fund's
assets were fully invested in a diverse portfolio of companies engaged in
various aspects of the real estate industry. Whereas the enclosed listing of
holdings is arranged by property type orientation, our current strategy
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1
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
emphasizes three themes which we believe embody the most important means to
success in the real estate industry for the foreseeable future.
First, the Fund is currently focused on companies which maintain strong
positions in markets which are enjoying above-average growth and where there are
substantial barriers to entry. The second theme centers on companies that have
unique expertise, economies of scale and business plans which allow them to
achieve higher rates of return than their competitors. The third involves
companies that are currently experiencing a turnaround or positive change in
their business. This may be evidenced by new management or a cyclical change in
market conditions. A description of several of our largest holdings will serve
to illustrate these themes.
FOREST CITY ENTERPRISES is one of the oldest and largest publicly traded
real estate companies in the U.S. An active developer, Forest City also owns a
substantial portfolio of office, retail and multifamily properties. Under the
leadership of a new generation of management, it has adopted a more aggressive
and opportunistic posture towards its business, recently raising equity capital
from the public market for the first time in many years.
LENNAR CORPORATION is one the nation's leading home building and financial
service companies with operations in Florida, Texas, Arizona and California. In
the past several years it has been an active acquirer of property and loans from
failed financial institutions. Also under the leadership of a younger generation
of management, Lennar is in the process of acquiring a major California home
builder. In addition, the company intends to spin off its financial services and
investment businesses as a separate company.
AMERICAN RETIREMENT CORPORATION, which recently had its initial public
offering, is an owner/operator of assisted living facilities. We believe that
demand for such facilities, used to house and care for America's elderly
population, will increase significantly in years to come. American Retirement is
small, but has an outstanding management team which we believe will capitalize
on the sector's positive fundamentals. For similar reasons, we also have a large
position in SUNRISE ASSISTED LIVING, which is the industry's market leader.
VORNADO REALTY TRUST is a well-run company that has traditionally owned
neighborhood shopping centers but has recently expanded its focus to include New
York City office buildings. New York is the largest office market in the U.S.
and, due to its complexity, requires the skills of an established operator in
order to succeed. Accordingly, Vornado acquired the Mendik Company, one of the
city's leading real estate firms. We expect the company to make many more
opportunistic acquisitions that will establish it as one of the premier owners
of New York office properties.
GENERAL GROWTH PROPERTIES is one of the nation's leading owners and
operators of regional shopping malls, a property sector which is currently
undergoing a substantial consolidation. General Growth has been on the forefront
of this consolidation, making a number of advantageous portfolio acquisitions
over the past several years. We expect the company to maintain its leadership
position for some time to come.
PUBLIC STORAGE, INC. is the country's leading owner and operator of
mini-warehouse and self-storage facilities, with over 1,100 properties under its
control. It is establishing a nationwide reservation system and utilizing its
properties for the sale of ancillary products and services. The company has
developed a national brand
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2
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
name and is maximizing revenues from its properties while enjoying economies of
scale unlike any of its competitors.
We believe that we have reached a period of maturity in the real estate
cycle but one in which a substantial number of investment opportunities still
exist. It is our goal to position the Fund to take maximum advantage of the best
of these opportunities. We are employing the talents of our entire research
department in order to achieve this goal, and therefore have confidence that we
will fulfill the Fund's investment objective and attain satisfactory returns.
Sincerely,
/s/ MARTIN COHEN /s/ ROBERT H. STEERS
MARTIN COHEN ROBERT H. STEERS
President Chairman
/s/ JOSEPH M. HARVEY
JOSEPH M. HARVEY
Director of Research
Cohen & Steers Capital Management, Inc.
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3
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
----------- -----------
<S> <C> <C>
EQUITIES 92.56%
APARTMENT/RESIDENTIAL 15.78%
Asset Investors Corp......................................... 395,100 $ 1,333,463
Evans Withycombe Residential................................. 100,000 2,075,000
Lennar Corp.................................................. 139,900 4,468,056
-----------
7,876,519
-----------
DIVERSIFIED 19.38%
*Crescent Operating........................................... 84,000 1,008,000
Forest City Enterprises -- Class A........................... 106,800 5,099,700
*HFS.......................................................... 33,000 1,914,000
*Wellsford Real Properties.................................... 150,200 1,652,200
-----------
9,673,900
-----------
HEALTH CARE 11.87%
*American Retirement Corp. ................................... 231,700 4,112,675
*Sunrise Assisted Living...................................... 51,800 1,813,000
-----------
5,925,675
-----------
HOTEL 2.67%
*Bristol Hotel Co. ........................................... 34,600 1,332,100
-----------
INDUSTRIAL 0.72%
*Pierce Leahy Corp............................................ 20,000 360,000
-----------
OFFICE 9.25%
Alexandria Real Estate Equities.............................. 92,300 2,024,831
Brandywine Realty Trust...................................... 77,600 1,571,400
Cali Realty Corp............................................. 30,000 1,020,000
-----------
4,616,231
-----------
OFFICE/INDUSTRIAL 3.79%
Kilroy Realty Corp........................................... 75,000 1,893,750
-----------
SELF STORAGE 4.64%
Public Storage............................................... 79,200 2,316,600
-----------
</TABLE>
See notes to financial statements.
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4
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS -- (CONTINUED)
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NUMBER VALUE
OF SHARES (NOTE 1)
----------- -----------
<S> <C> <C>
SHOPPING CENTER 24.46%
COMMUNITY CENTER 15.67%
*Alexanders, Inc.............................................. 18,800 $ 1,323,050
Alexander Haagen Properties.................................. 94,400 1,534,000
Burnham Pacific Properties................................... 161,600 2,222,000
Vornado Realty Trust......................................... 38,000 2,740,750
-----------
7,819,800
-----------
REGIONAL MALL 8.79%
General Growth Properties.................................... 80,500 2,696,750
Rouse Co..................................................... 57,400 1,693,300
-----------
4,390,050
-----------
TOTAL SHOPPING CENTER........................................ 12,209,850
-----------
TOTAL EQUITIES (Identified cost $43,563,811)........... 46,204,625
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
----------
<S> <C> <C> <C>
COMMERCIAL PAPER 30.47%
IES Utilities, 5.75%, 7/1/97................................ $2,000,000 2,000,000
International Lease, 5.75%, 7/1/97.......................... 1,209,000 1,209,000
Legget & Platt, 5.75%, 7/1/97............................... 2,000,000 2,000,000
Pacific Mutual, 5.75%, 7/1/97............................... 2,000,000 2,000,000
Preferred Financial, 5.75%, 7/1/97.......................... 2,000,000 2,000,000
Premium Financial, 5.75%, 7/1/97............................ 2,000,000 2,000,000
Sherwin Williams, 5.75%, 7/1/97............................. 2,000,000 2,000,000
TransAmerica Financial, 5.75%, 7/1/97....................... 2,000,000 2,000,000
-----------
TOTAL COMMERCIAL PAPER (Identified cost
$15,209,000)....................................... 15,209,000
-----------
TOTAL INVESTMENTS (Identified cost $58,772,811)................. 123.03% 61,413,625
LIABILITIES IN EXCESS OF OTHER ASSETS........................... (23.03)% (11,494,271)
------ -----------
NET ASSETS (Equivalent to $27.16 per share based on 1,838,183
shares of capital stock outstanding)......................... 100.00% $49,919,354
------ -----------
------ -----------
</TABLE>
- ------------
* Non-income producing security.
See notes to financial statements.
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5
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (Identified cost $58,772,811) (Note 1).................... $61,413,625
Cash.......................................................................................... 647
Receivable for fund shares sold............................................................... 1,291,939
Receivable for investment securities sold..................................................... 852,013
Dividends receivable.......................................................................... 105,995
Receivable from investment adviser............................................................ 10,050
Other assets.................................................................................. 111,910
-----------
Total Assets............................................................................ 63,786,179
-----------
LIABILITIES:
Payable for investment securities purchased................................................... 13,689,567
Payable for organization costs (Note 1)....................................................... 114,875
Payable to administrator...................................................................... 11,123
Payable for fund shares redeemed.............................................................. 5,566
Payable to directors.......................................................................... 5,445
Other liabilities............................................................................. 40,249
-----------
Total Liabilities....................................................................... 13,866,825
-----------
NET ASSETS applicable to 1,838,183 shares of $.001 par value common stock
outstanding (Note 4)............................................................................. $49,919,354
-----------
-----------
NET ASSET VALUE PER SHARE:
($49,919,354 [div] 1,838,183 shares outstanding).............................................. $ 27.16
-----------
-----------
NET ASSETS consist of:
Capital paid in (Notes 1 and 4)............................................................... $46,954,413
Undistributed net investment income........................................................... 42,881
Accumulated net realized gain on investments.................................................. 281,246
Net unrealized appreciation on investments.................................................... 2,640,814
-----------
$49,919,354
-----------
-----------
</TABLE>
See notes to financial statements.
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6
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD MAY 8, 1997`D' TO JUNE 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
Investment Income:
Dividend income................................................................................ $ 210,729
Interest income................................................................................ 109,099
----------
Total Income............................................................................. 319,828
----------
Expenses:
Investment advisory fees (Note 2).............................................................. 43,035
Registration and filing fees................................................................... 16,336
Administrative and transfer agent fees (Note 2)................................................ 11,437
Professional fees.............................................................................. 9,756
Reports to shareholders........................................................................ 6,897
Custodian fees................................................................................. 6,855
Directors' fees and expenses (Note 2).......................................................... 5,445
Amortization of organization expenses (Note 1)................................................. 3,399
Miscellaneous.................................................................................. 351
----------
Total Expenses........................................................................... 103,511
Reduction of expenses (Note 2)................................................................. (38,959)
----------
Net Expenses............................................................................. 64,552
----------
Net Investment Income................................................................................ 255,276
----------
Realized and Unrealized Gain on Investments:
Net realized gain on investments............................................................... 281,246
Increase in unrealized appreciation on investments............................................. 2,640,814
----------
Net realized and unrealized gain on investments.......................................... 2,922,060
----------
Net Increase in Net Assets Resulting From Operations................................................. $3,177,336
----------
----------
</TABLE>
- ------------------------
`D' Commencement of Operations
See notes to financial statements.
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7
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<PAGE>
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MAY 8, 1997`D' TO
JUNE 30, 1997
(UNAUDITED)
-----------------
<S> <C>
Change in Net Assets:
From Operations:
Net investment income.......................................................... $ 255,276
Net realized gain on investments............................................... 281,246
Increase in unrealized appreciation on investments............................. 2,640,814
-----------------
Net increase in net assets resulting from operations..................... 3,177,336
-----------------
Dividends From:
Net investment income.......................................................... (212,395)
-----------------
Capital Stock Transactions (Note 4):
Increase in net assets from Fund share transactions............................ 46,854,413
-----------------
Total increase in net assets............................................. 49,819,354
Net Assets:
Beginning of period............................................................ 100,000
-----------------
End of period (including undistributed net investment income of $42,881)....... $49,919,354
-----------------
-----------------
</TABLE>
- ------------------------
`D' Commencement of Operations
See notes to financial statements.
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8
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share outstanding
throughout the period and other performance information derived from the
Financial Statements. It should be read in conjunction with the Financial
Statements and notes thereto.
<TABLE>
<CAPTION>
PERIOD MAY 8, 1997`D'
TO
JUNE 30, 1997
PER SHARE OPERATING PERFORMANCE (UNAUDITED)
- ------------------------------------------------------------------------------------ -----------------------
<S> <C>
Net asset value, beginning of period................................................ $ 25.00
-------
Income from investment operations
Net investment income.......................................................... 0.15
Net realized and unrealized gains on investments............................... 2.14
-------
Total from investment operations......................................... 2.29
-------
Less dividends from:
Net investment income.......................................................... (0.13)
-------
Net asset value, end of period...................................................... $ 27.16
-------
-------
- ------------------------------------------------------------------------------------------------------------
Total investment return`D'`D'....................................................... 9.17%**
- ------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data:
Net assets, end of period (in millions)........................................ $49.919
-------
-------
Ratio of expenses to average daily net assets (before expense reduction)....... 2.16%*
-------
-------
Ratio of expenses to average daily net assets (net of expense reduction)....... 1.35%*
-------
-------
Ratio of net investment income to average daily net assets (net of expense
reduction)................................................................... 5.34%*
-------
-------
Ratio of net investment income to average daily net assets (before expense
reduction)................................................................... 4.52%*
-------
-------
Portfolio turnover rate........................................................ 18.51%**
-------
-------
Average Commission Rate Per Share.............................................. $0.0607
-------
-------
</TABLE>
- ------------------------
`D' Commencement of Operations.
`D'`D' Total investment return would have been lower had certain fees not been
reimbursed by the Adviser
* Annualized.
** Not Annualized.
See notes to financial statements.
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9
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
Cohen & Steers Special Equity Fund, Inc. (the 'Fund') was incorporated
under the laws of the State of Maryland on February 14, 1997 and is registered
under the Investment Company Act of 1940, as amended, as an open-end,
non-diversified management investment company. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles. The preparation of the financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures on
the financial statements. Actual results could differ from those estimates.
Portfolio Valuation: Investments in securities that are listed on the New
York Stock Exchange are valued, except as indicated below, at the last sale
price reflected at the close of the New York Stock Exchange on the business day
as of which such value is being determined. If there has been no sale on such
day, the securities are valued at the mean of the closing bid and asked prices
for the day.
Securities not listed on the New York Stock Exchange but listed on other
domestic or foreign securities exchanges or admitted to trading on the National
Association of Securities Dealers Automated Quotations, Inc. ('NASDAQ') National
Market System are valued in a similar manner. Securities traded on more than one
securities exchange are valued at the last sale price on the business day as of
which such value is being determined as reflected on the tape at the close of
the exchange representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the Adviser to
be over-the-counter, but excluding securities admitted to trading on the NASDAQ
National List, are valued at the mean of the current bid and asked prices as
reported by NASDAQ, the National Quotation Bureau or such other comparable
sources as the Board of Directors deems appropriate to reflect their fair market
value. Where securities are traded on more than one exchange and also
over-the-counter, the securities will generally be valued using the quotations
the Board of Directors believes reflect most closely the value of such
securities.
Short-term debt securities, which have a maturity value of 60 days or less,
are valued at amortized cost which approximates value.
Security Transactions and Investment Income: Security transactions are
recorded on trade date. Realized gains and losses on investments sold are
recorded on the basis of identified cost for accounting and tax purposes.
Interest income is recorded on the accrual basis. Dividend income is recorded on
the ex-dividend date.
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10
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
Dividends and Distributions to Shareholders: Dividends from net investment
income are declared and paid semi-annually. Net realized capital gains, unless
offset by any available capital loss carryforward, are distributed to
shareholders annually. Distributions to shareholders are recorded on the
ex-dividend date.
Distributions will automatically be reinvested in full and fractional
shares of the Fund based on the net asset value per share at the close of
business on the payable date unless the shareholder has elected to have them
paid in cash.
Dividends from net income and capital gain distributions are determined in
accordance with U.S. Federal Income Tax regulations which may differ from
generally accepted accounting principles.
Federal Income Taxes: It is the policy of the Fund to qualify as a
regulated investment company, if such qualification is in the best interest of
the shareholders, by complying with the requirements of Subchapter M of the
Internal Revenue Code applicable to regulated investment companies, and by
distributing substantially all of its taxable earnings to its shareholders.
Accordingly, no provision for federal income or excise tax is necessary.
Organization Costs: All costs incurred in connection with organizing and
establishing the Fund are being amortized on the straight-line basis over a
period of five years from the date on which the Fund commenced operations.
NOTE 2. INVESTMENT ADVISORY AND ADMINISTRATIVE FEES AND OTHER TRANSACTIONS WITH
AFFILIATES
Investment Advisory Fees: Cohen & Steers Capital Management, Inc. (the
'Adviser') serves as the Fund's Investment Adviser pursuant to an investment
advisory agreement (the 'Advisory Agreement'). Under the terms of the Advisory
Agreement, the Adviser provides the Fund with the day-to-day investment
decisions and generally manages the Fund's investments in accordance with the
stated policies of the Fund, subject to the supervision of the Fund's Board of
Directors. For the services provided to the Fund, the Adviser receives a monthly
fee in an amount equal to 1/12th of .90% of the average daily net assets of the
Fund (approximately .90% on an annual basis). For the period May 8, 1997
(Commencement of Operations) to June 30, 1997, the Fund incurred $43,035 in
advisory fees.
The Investment Adviser has voluntarily agreed to limit the total expenses
of the Fund (excluding interest, taxes, brokerage, and extraordinary expenses)
to an annual rate of 1.35% of the Fund's average net assets until December 31,
1997. As long as this expense cap continues, it may lower the Fund's expenses
and increase its total return. After December 31, 1997, the expense limitation
may be terminated or revised at any time, at which time the Fund's expenses may
increase and its total return may be reduced depending on the total assets of
the Fund.
Administrative Fees: The Fund has entered into an administrative agreement
with the Adviser and Chase Global Funds Services Company ('CGFSC') under which
the Adviser performs certain administrative functions for
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
the Fund and receives a fee of .02% of the Fund's average daily net assets. The
Fund has paid the Adviser $956 in fees under this administrative agreement.
Directors' Fees: Certain directors of the Fund are also directors, officers
and/or employees of the Adviser. None of the directors so affiliated received
compensation for their services as directors of the Fund with the exception of
out-of-pocket expenses relating to attendance at Board and committee meetings.
Similarly, none of the Fund's officers received compensation from the Fund. Fees
and related expenses accrued for non-affiliated directors totaled $5,445 for the
period May 8, 1997 (commencement of operations) to June 30, 1997.
NOTE 3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term investments, for
the period May 8, 1997 (commencement of operations) to June 30, 1997 aggregated
$47,199,284 and $3,916,719, respectively.
At June 30, 1997, the cost and unrealized appreciation or depreciation in
value of the investments owned by the Fund, as computed on a federal income tax
basis, are as follows:
<TABLE>
<S> <C>
Aggregate cost.......................................................................... $58,772,811
-----------
Gross unrealized appreciation........................................................... $ 2,772,205
Gross unrealized depreciation........................................................... $ (131,391)
-----------
Net unrealized appreciation............................................................. $ 2,640,814
-----------
-----------
</TABLE>
NOTE 4. CAPITAL STOCK
The Fund is authorized to issue fifty million (50,000,000) shares of
capital stock, par value $.001 per share. The Board of Directors of the Fund may
increase or decrease the aggregate number of shares of common stock that the
Fund has authority to issue. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
MAY 8, 1997`D'
TO
JUNE 30, 1997
-----------------------
SHARES AMOUNT
--------- -----------
<S> <C> <C>
Sold........................................................................ 1,833,136 $46,822,733
Issued as reinvestment of dividends......................................... 7,361 196,895
Redeemed.................................................................... (6,314) (165,215)
--------- -----------
Net increase................................................................ 1,834,183 $46,854,413
--------- -----------
--------- -----------
</TABLE>
- ------------
`D' Commencement of Operations
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12
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COHEN & STEERS SPECIAL EQUITY FUND, INC.
<TABLE>
<S> <C>
OFFICERS AND DIRECTORS KEY INFORMATION
Robert H. Steers INVESTMENT ADVISER
Director and Chairman Cohen & Steers Capital Management, Inc.
757 Third Avenue
Martin Cohen New York, NY 10017
Director and President (212) 832-3232
Gregory C. Clark FUND ADMINISTRATOR AND TRANSFER AGENT
Director Chase Global Funds Services Co.
73 Tremont Street
George Grossman Boston, MA 02108
Director (800) 437-9912
Jeffrey H. Lynford CUSTODIAN
Director The Chase Manhattan Bank, N.A.
3 Chase MetroTech Center
Willard H. Smith, Jr. Brooklyn, NY 11245
Director
LEGAL COUNSEL
Elizabeth O. Reagan Dechert Price & Rhoads
Vice President 30 Rockefeller Plaza
New York, NY 10112
Adam Derechin
Vice President NASDAQ Symbol: CSSPX
Net asset value (NAV) can be found in the daily mutual
fund listings in the financial section of most major
newspapers under the Fund's abbreviation 'C&SSpEq'.
This report is authorized for delivery to other than
shareholders of Cohen & Steers Special Equity Fund, Inc.
only when accompanied or preceded by the delivery of a
currently effective prospectus setting forth details of
the Fund.
</TABLE>
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13
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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
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COHEN & STEERS
SPECIAL EQUITY FUND
757 THIRD AVENUE
NEW YORK, NY 10017
[LOGO]
SEMI-ANNUAL REPORT
JUNE 30, 1997
First Class Mail
U.S. Postage
PAID
Boston, MA
Permit No. 56712
STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as ................'D'
The division symbol shall be expressed as...............[div]
