[GRAPHIC OMITTED]
WARBURG PINCUS
CREDIT SUSSE ASSET MANAGEMENT
ANNUAL
REPORT
AUGUST 31, 1999
WARBURG PINCUS
INTERNATIONAL GROWTH FUND
(BULLET)
WARBURG PINCUS
EUROPEAN EQUITY FUND
(BULLET)
WARBURG PINCUS
EMERGING MARKETS II FUND
(BULLET)
WARBURG PINCUS
GLOBAL TELECOMMUNICATIONS FUND
More complete information about the funds, including charges and expenses, is
provided in the PROSPECTUS, which must precede or accompany this document and
which should be read carefully before investing. You may obtain additional
copies by calling 800-WARBURG (800-927-2874) or by writing to Warburg Pincus
Funds, P.O. Box 9030, Boston, MA 02205-9030.
Credit Suisse Asset Management Securities, Inc., Distributor, 466 Lexington
Avenue,New York, NY 10017. Telephone: 800-888-6878. Warburg Pincus Funds is a
division of Credit Suisse Asset Management Securities, LLC.
<PAGE>
FROM TIME TO TIME, THE FUNDS' INVESTMENT ADVISER AND CO-ADMINISTRATORS MAY
WAIVE SOME FEES AND/OR REIMBURSE SOME EXPENSES, WITHOUT WHICH PERFORMANCE WOULD
BE LOWER. WAIVERS AND/OR REIMBURSEMENTS ARE SUBJECT TO CHANGE.
RETURNS ARE HISTORICAL AND INCLUDE CHANGE IN SHARE PRICE AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS.
RETURNS AND SHARE PRICE WILL FLUCTUATE, AND REDEMPTION VALUE MAY BE MORE OR LESS
THAN ORIGINAL COST.
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING
CURRENCY FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND
DIFFERENCES IN ACCOUNTING METHODS.
THE VIEWS OF THE FUNDS' MANAGEMENT ARE AS OF THE DATE OF THE LETTERS AND
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF AUGUST 31, 1999; THESE
VIEWS AND PORTFOLIO HOLDINGS MAY HAVE CHANGED SUBSEQUENT TO THESE DATES. NOTHING
IN THIS DOCUMENT IS A RECOMMENDATION TO PURCHASE OR SELL SECURITIES.
FUND SHARES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF CREDIT SUISSE ASSET
MANAGEMENT, LLC (CSAM) OR ANY AFFILIATE, ARE NOT FDICINSURED AND ARE NOT
GUARANTEED BY CSAM OR ANY AFFILIATE. FUND INVESTMENTS ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
<PAGE>
Warburg Pincus International Growth Fund
Portfolio Managers' Letter -- August 31, 1999
- --------------------------------------------------------------------------------
September 15, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus International
Growth Fund (the "Fund") for the fiscal year ended August 31, 1999.
At August 31, 1999, the NAV of the Fund's institutional shares was $23.47,
compared to an NAV of $22.70 on August 31, 1998. As a result, the institutional
shares' total return was 13.9% (assuming the reinvestment of dividends and
distributions totaling $2.27 per share). By comparison, the MSCI EAFE Index
("EAFE Index") returned 26.0% during the same period.
At August 31, 1999, the net asset value ("NAV") of the Fund's common shares
was $23.25, compared to an NAV of $22.56 on August 31, 1998. As a result, the
common shares' total return was 13.5% (assuming the reinvestment of dividends
and distributions totaling $2.26 per share). By comparison, EAFE Index returned
26.0% during the same period.
The Fund underperformed its EAFE benchmark primarily due to the effects of
our exposure to Europe, Asia and Japan:
(BULLET) EUROPE. Our sectoral positioning in Europe proved unsuccessful. We
adopted a defensive orientation late in the third quarter of 1998, for instance,
at a time when market sentiment was intensely negative. This included the
elimination of most of our holdings in major European banks. The Fund was thus
heavily underweight in the latter sector during the fourth quarter, when
interest-rate-sensitive companies worldwide sharply rallied as global rates
fell. Our overall approach of "growth at a reasonable price" detracted from
performance in the first half of 1999, furthermore, when investor preferences
shifted toward value-oriented cyclical sectors.
(BULLET) ASIA. We remained prudently cautious about the ability of most Asian
economies to bounce back from the severe macroeconomic downturn that struck the
region in 1997 and 1998. As a result, we were largely absent from major Asian
markets like Singapore and Hong Kong, both of which generated extraordinary
returns during the fiscal year.
1
<PAGE>
Warburg Pincus International Growth Fund Portfolio Managers' Letter -- (cont'd)
August 31, 1999
- --------------------------------------------------------------------------------
(BULLET) JAPAN. In Japan, we emphasized large blue-chip exporters such as Sony,
Canon, TDK and Honda, which we believed would benefit from a weakening yen and a
relatively low exposure to the depressed domestic economy. This positioning hurt
performance particularly in the fourth quarter of 1998, when many of these
stocks experienced profit-taking as the yen began to strengthen and investors
favored the shares of the large Japanese banks and other sectors that had
previously lagged the domestic market.
As other developments occur in the international equity markets or at Credit
Suisse Asset Management, we will be sure to keep you informed. Meanwhile, if you
have questions, please feel free to call upon us at any time.
Sincerely yours,
Credit Suisse Asset Management International Equities Management Team
Steven D. Bleiberg, Managing Director
Richard W. Watt, Managing Director
Emily Alejos, Director
Robert B. Hrabchak, Director
Alan Zlatar, Vice President
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS.
2
<PAGE>
Warburg Pincus International Growth Fund
Portfolio Managers' Letter -- August 31, 1999 (cont'd)
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[GRAPHIC OMITTED]
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Comparison of Change in Value of $10,000 Investment in the Warburg Pincus
International Growth Institutional Shares and the MSCIEAFE Index 1 from
Inception (9/30/92) and at each Quarter End. (Unaudited)
- --------------------------------------------------------------------------------
AVERAGE ANNUAL 1 YEAR 3 YEARS 5 YEARS SINCE INCEPTION
TOTAL RETURNS 13.88% 15.51% 8.64% (9/30/92)
FOR THE PERIODS ENDED 11.76%
8/31/99
(INSTITUTIONAL SHARES)
(UNAUDITED)
Warburg Pincus International
Growth Institutional Shares MSCI EAFE Index
10/01/92 $10,000 $10,000
11/30/92 $ 9,947 $ 9,571
02/28/93 $10,173 $ 9,918
05/31/93 $11,520 $12,062
08/31/93 $12,487 $12,962
11/30/93 $12,447 $11,928
02/28/94 $14,154 $13,841
05/31/94 $13,349 $13,735
08/31/94 $14,264 $14,405
11/30/94 $13,432 $13,732
02/28/95 $11,741 $13,258
05/31/95 $12,834 $14,451
08/31/95 $13,115 $14,517
11/30/95 $12,849 $14,815
02/29/96 $13,849 $15,539
05/31/96 $14,426 $16,041
08/31/96 $14,008 $15,706
11/30/96 $14,701 $16,606
02/28/97 $15,165 $16,090
05/31/97 $15,940 $17,303
08/31/97 $16,240 $17,179
11/30/97 $16,693 $16,588
02/28/98 $18,790 $18,633
05/31/98 $20,823 $19,278
08/31/98 $18,956 $17,201
11/30/98 $19,650 $19,370
02/28/99 $19,923 $19,610
05/31/99 $19,537 $20,175
08/31/99 $21,588 $21,678
Comparison of Change in Value of $10,000 Investment in the Warburg Pincus
International Growth Common Shares and the MSCIEAFE Index 1 from Inception
(11/1/96) and at each Quarter End. (Unaudited)
AVERAGE ANNUAL 1 YEAR SINCE INCEPTION
TOTAL RETURNS 13.52% (11/1/96)
FOR THE PERIODS ENDED 15.59%
8/31/99
(COMMON SHARES)
(UNAUDITED)
Warburg Pincus International
Growth Common Shares MSCI EAFE Index
11/1/96 $10,000 $10,000
11/30/96 $10,356 $10,369
02/28/97 $10,673 $10,046
05/31/97 $11,208 $10,803
08/31/97 $11,414 $10,726
11/30/97 $11,728 $10,357
02/28/98 $13,189 $11,634
05/31/98 $14,596 $12,037
08/31/98 $13,278 $10,740
11/30/98 $13,754 $12,094
2/28/99 $13,939 $12,244
5/31/99 $13,660 $12,597
8/31/99 $15,073 $13,535
Note:Past performance is not predictive of future performance. Investment return
and principle value of an investment will fluctuate so that an investor's shares
upon redemption may be worth more or less than their original cost.
1 The Morgan Stanley Europe, Australia and Far East Index is an unmanaged index
(with no defined investment objective) of equities that includes
reinvestments of dividends, and is the exclusive property of Morgan Stanley
Capital Co., Incorporated.
3
<PAGE>
Warburg Pincus European Equity Fund
Portfolio Managers' Letter -- August 31, 1999
- --------------------------------------------------------------------------------
September 15, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus European Equity
Fund (the "Fund") from its inception of investment operations on January 28,
1999 to the end of its fiscal year on August 31, 1999.
European equity markets were fairly flat during the period, as reflected by
the 0.3% return of the MSCI Europe Index1. A number of meaningful positive and
negative factors tended to offset each other. On the positive side, the European
Central Bank unexpectedly cut short-term interest rates in Euroland by half a
percentage point in April, and there was an ongoing stream of announcements of
high-profile mergers or acquisitions in a variety of industries.
The supportive effects of these and other developments, though, were
ultimately canceled out by concern about U.S. interest rates and inflation;
nervousness about persistent weakness in Continental economies, particularly
that of Germany; disappointing weakness in the euro versus the U.S. dollar for
much of the period; and the conflict in Kosovo.
The Fund's results were most favorable in France, where we owned six of the
ten strongest stocks during the period. Effective country allocations included
our complete absence from Belgium, overweight in Germany and underweight in
Finland. Conditions proved most challenging in the U.K.
At August 31, 1999, the net asset value ("NAV") of the Fund's institutional
and common shares was $9.80 and $9.79, respectively, compared to an NAV of
$10.00 for both share classes on January 28, 1999 (Inception date).
Looking ahead, we are optimistic about the prospects for European equity
markets. Stocks on the Continent and in the U.K. should benefit from clearer
signs of economic recovery; the likelihood that Euroland interest rates will
remain stable; and vibrant corporate consolidation activity.
The fundamental elements of our strategy include an emphasis on companies
poised to benefit from an anticipated pick-up in economic activity, both
regionally and globally. Overweight positions have been established in capital
goods manufacturers, oil and oil service companies and information technology
service providers, which reflect our belief that earnings will surprise on the
upside as we move into the year 2000.
4
<PAGE>
Warburg Pincus European Equity Fund
Portfolio Managers' Letter -- August 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
Geographically, we have moved to underweight the U.K., where the
interest-rate environment appears less favorable than on the Continent. However,
we continue to find individual U.K. companies that are poised to benefit from
the trends mentioned above.
As other developments occur in the European equity markets or at Credit
Suisse Asset Management, we will be sure to keep you informed. Meanwhile, if you
have questions, please feel free to call upon us at any time.
Sincerely yours,
Credit Suisse Asset Management European Equities Management Team
Harold W. Ehrlich, Managing Director
Nancy Nierman, Director
J. H. Cullum Clark, Director
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES IN
EUROPE, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF RISK THAN AN
INVESTMENT IN A MORE GEOGRAPHICALLY DIVERSIFIED EQUITY FUND.
1 The Morgan Stanley Capital International Europe Index is a market
capitalization-weighted index of 15 European countries. The index is
calculated on a total return basis with net dividends reinvested.
5
<PAGE>
Warburg Pincus Emerging Markets II Fund
Portfolio Managers' Letter -- August 31, 1999
- --------------------------------------------------------------------------------
September 14, 1999
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus Emerging
Markets II Fund (the "Fund") for the fiscal year ended August 31, 1999.
At August 31, 1999, the NAV of the Fund was $14.88, compared to an NAV of
$10.44 on August 31, 1998. As a result, the Fund's total return was 45.1%
(assuming the reinvestment of distributions totaling $0.21 per share). By
comparison, the MSCI Emerging Markets Free Index ("EMF Index") returned 72.3%
during the same period.
At August 31, 1999, the net asset value ("NAV") of the Fund's common shares
was $14.91, compared to an NAV of $10.48 on August 31, 1998. The common shares'
total return between August 31, 1998 and August 31, 1999 was 44.7% (assuming the
reinvestment of distributions totaling $0.19 per share). By comparison, the EMF
Index returned 72.3% during the same period.
Several factors were responsible for the Fund's underperformance of its EMF
benchmark:
(BULLET) SOUTH KOREA. Stock selection in South Korea was particularly
ineffective, as we chose to emphasize growth-oriented Korean
companies based on the impressive momentum of the nation's economic
recovery. Unfortunately for the Fund, we did so during a period in
which the shares of banks, brokers and other value-oriented sectors
dramatically outperformed.
(BULLET) BRAZIL. Returns were subpar in Brazil, particularly in February and
March. We adopted a cautious stance in Brazil following its
mid-January devaluation of the real. This was due both to the harsh
"contagion" effect of Asian devaluations on financial markets
throughout the emerging world and the historical tendency among
Latin American nations to raise interest rates in devaluationary
times. This approach proved unsuccessful, however, as the real's
devaluation had little impact on other markets and Brazil
subsequently pursued a course of sharply reducing interest rates.
(BULLET) CASH. Prudence and long experience with the volatile nature of
emerging equity markets prompted us to maintain a small -- yet
meaningful -- level of the Fund's assets in cash reserves. The
extraordinary performance of emerging equities caused this to be a
drag on the Fund's overall return.
6
<PAGE>
Warburg Pincus Emerging Markets II Fund
Portfolio Managers' Letter -- August 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
(BULLET) POLAND AND HUNGARY. Our choice of stocks in Poland and Hungary
proved unfavorable, notably our insufficient exposure to the strong
Polish banking sector.
Thank you for your support, and please feel free to call upon us at any time
if you have questions.
Sincerely yours,
Credit Suisse Asset Management Emerging Markets Equities
Management Team
Richard W. Watt, Managing Director
Steven D. Bleiberg, Managing Director
Emily Alejos, Director
Robert B. Hrabchak, Director
Alan Zlatar, Vice President
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR EMERGING MARKETS
INVESTMENTS.
7
<PAGE>
Warburg Pincus Emerging Markets II Fund
Portfolio Managers' Letter -- August 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WARBURG PINCUS
EMERGING MARKETS II INSTITUTIONAL SHARES AND THE MSCIEMERGING MARKETS
FREE INDEX 1 FROM INCEPTION (1/29/93) AND AT EACH QUARTER END. (UNAUDITED)
AVERAGE ANNUAL 1 YEAR 3 YEARS FIVE YEARS SINCE INCEPTION
TOTAL RETURNS 45.12% (3.59)% (6.88)% (1/29/93)
FOR THE PERIODS ENDED 2.37%
8/31/99
(INSTITUTIONAL SHARES)
(UNAUDITED)
Warburg Pincus MSCI
02/01/93 $10,000 $10,000
02/28/93 $ 9,967 $10,159
05/31/93 $10,707 $10,923
08/31/93 $12,253 $12,443
11/30/93 $14,507 $14,648
02/28/94 $16,908 $17,058
05/31/94 $14,691 $15,724
08/31/94 $16,664 $18,257
11/30/94 $15,722 $17,189
02/28/95 $11,347 $13,765
05/31/95 $12,552 $15,243
08/31/95 $12,594 $15,263
11/30/95 $11,718 $14,349
02/29/96 $12,863 $15,795
5/31/96 $13,743 $16,481
8/31/96 $13,013 $15,846
11/30/96 $13,164 $15,817
2/28/97 $14,790 $17,699
5/31/97 $14,460 $17,759
8/31/97 $14,094 $16,573
11/30/97 $12,559 $13,717
2/28/98 $12,767 $14,298
5/31/98 $11,520 $12,734
8/31/98 $ 8,039 $ 8,360
11/30/98 $ 9,110 $10,644
2/28/99 $ 8,970 $10,420
5/31/99 $10,522 $13,175
8/31/99 $11,667 $14,402
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WARBURG PINCUS
EMERGING MARKETS II COMMON SHARES AND THE MSCI EMERGING MARKETS FREE
INDEX 1 FROM INCEPTION (11/1/96) AND AT EACH QUARTER END. (UNAUDITED)
AVERAGE ANNUAL 1 YEAR SINCE INCEPTION
TOTAL RETURNS 44.67% (11/1/96)
FOR THE PERIODS ENDED (3.80)%
8/31/99
(INSTITUTIONAL SHARES)
(UNAUDITED)
Warburg MSCI
11/1/96 $10,000 $10,000
11/30/96 $10,171 $10,106
2/28/97 $11,394 $11,309
5/31/97 $11,134 $11,347
8/31/97 $10,841 $10,589
11/30/97 $ 9,652 $ 8,765
2/28/98 $ 9,818 $ 9,135
5/31/98 $ 8,867 $ 8,136
8/31/98 $ 6,195 $ 5,341
11/30/98 $ 7,016 $ 6,800
2/28/99 $ 6,900 $ 6,657
5/31/99 $ 8,078 $ 8,417
8/31/99 $ 8,962 $ 9,201
Note:Past performance is not predictive of future performance. Investment return
and principle value of an investment will fluctuate so that an investor's shares
upon redemption may be worth more or less than their original cost.
1 The Morgan Stanley Emerging Markets Free Index is an unmanaged index (with no
defined investment objective) of equities that include reinvestment of
dividends and is compiled by Morgan Stanley Capital International.
8
<PAGE>
Warburg Pincus Global Telecommunications Fund
Portfolio Managers' Letter -- August 31, 1999
- --------------------------------------------------------------------------------
September 14, 1999
Dear Shareholders:
We are pleased to report on the results of the Warburg Pincus Global
Telecommunications Fund (the "Fund") for the fiscal year ended August 31, 1999.
At August 31, 1999, the net asset value ("NAV") of the Fund was $41.22,
compared to an NAV of $20.54 on August 31, 1998. As a result, the Fund's total
return was 120.7% (assuming the reinvestment of distributions totaling $2.84 per
share). By comparison, the MSCI Telecommunications Index returned 36.6% during
the same period.
Several elements contributed to the Fund's outstanding performance:
(BULLET) We effectively managed the balance of the portfolio's exposure to
developed markets relative to emerging markets. During the first
half of the year, for example, we generally steered clear of
emerging markets, whose telecom stocks did not perform as well as
those of most other emerging sectors.
We gradually re-entered Latin America in the fourth quarter of 1998,
though, when major Latin telecoms like Brazil's Telebras and Telesp
were selling at bargain-basement valuations -- and in time for the
early-1999 Latin rally. We deployed assets more meaningfully
elsewhere in the emerging world starting in the second quarter of
1999.
(BULLET) Stock selection was notably successful in developed Europe, where we
fared especially well in the U.K. and Finland.
(BULLET) We raised the Fund's allocation to Japan, where there is
historically high positive correlation between the economy's
strength and the performance of telecom stocks like the giant Nippon
Telephone & Telegraph (NTT). Evidence of recovery in the Japanese
economy now appears indisputable, which thus augurs well for telecom
shares there. Another plus is that NTT, for instance, is undergoing
a major corporate restructuring. We believe this will have very
favorable implications for NTT's own shares as well as those of the
broader Japanese telecom sector, in which we have built widely
diversified exposure.
9
<PAGE>
Warburg Pincus Global Telecommunications Fund
Portfolio Managers' Letter -- August 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
Thank you for your support, and please feel free to call upon us at any time
if you have questions.
Sincerely yours,
Credit Suisse Asset Management Global Telecommunications
Management Team
Steven D. Bleiberg, Managing Director
Richard W. Watt, Managing Director
Scott Lewis, Director
James A. Abate, Director
Emily Alejos, Director
Robert B. Hrabchak, Director
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED
IN TELECOMMUNICATIONS, 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 A BROADER MIX OF ISSUES. MORE INFORMATION ABOUT THE FUND, INCLUDING
CHARGES AND EXPENSES AND THE SPECIAL RISK CONSIDERATIONS ASSOCIATED WITH A
SINGLE-INDUSTRY FUND, IS PROVIDED IN THE PROSPECTUS.
10
<PAGE>
Warburg Pincus Global Telecommunications Fund
Portfolio Managers' Letter -- August 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WARBURG PINCUS
GLOBAL TELECOMMUNICATIONS COMMON SHARES AND THE MSCI TELECOMMUNICATIONS
INDEX 1 FROM INCEPTION (12/4/96) AND AT EACH QUARTER END. (UNAUDITED)
AVERAGE ANNUAL 1 YEAR SINCE INCEPTION
TOTAL RETURNS 120.73% (12/4/96)
FOR THE PERIODS ENDED (52.69)%
8/31/99
(COMMON SHARES)
(UNAUDITED)
Warburg Pincus Morgan Stanley
12/04/96 $10,000 $10,000
2/28/97 $10,787 $10,253
5/31/97 $11,460 $10,727
8/31/97 $11,533 $10,729
11/30/97 $12,859 $12,107
2/28/98 $15,178 $13,864
5/31/98 $16,664 $15,022
8/31/98 $14,461 $15,079
11/30/98 $19,460 $17,255
2/28/99 $24,138 $20,840
5/31/99 $28,188 $21,044
8/31/99 $31,920 $20,598
Note:Past performance is not predictive of future performance. Investment return
and principle value of an investment will fluctuate so that an investor's shares
upon redemption may be worth more or less than their original cost.
1 The Morgan Stanley Telecommunications Index is an unmanaged index (with no
defined investment objective) of telecommunciations equities that include
reinvestment of dividends and is compiled by Morgan Stanley Capital
International.
11
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (97.7%)
AUSTRALIA (1.8%)
BANKING (0.4%)
National Australia Bank, Ltd.# 160,200 $ 2,418,110
------------
BROADCASTING & PUBLISHING (0.3%)
Publishing & Broadcasting, Ltd. 331,538 1,947,658
------------
BUSINESS & PUBLIC SERVICES (0.0%)
ecorp Limited** 66 83
------------
ENERGY SOURCES (0.6%)
Broken Hill Proprietary Co., Ltd. 396,073 4,252,298
------------
MULTI-INDUSTRY (0.3%)
Southcorp Limited 474,903 1,784,066
------------
REAL ESTATE (0.2%)
Lend Lease Corp., Ltd. 138,380 1,687,754
------------
TOTAL AUSTRALIA 12,089,969
------------
BRAZIL (0.3%)
ENERGY SOURCES (0.3%)
Petroleo Brasileiro S.A. ADR** 160,200 2,142,162
------------
TOTAL BRAZIL 2,142,162
------------
CHILE (0.1%)
TELECOMMUNICATIONS (0.1%)
Compania de Telecomunicaciones
de Chile S.A. ADR#** 29,000 652,500
------------
TOTAL CHILE 652,500
------------
CHINA (0.2%)
METALS - STEEL (0.2%)
China Steel Corp. ADR 71,400 1,292,340
------------
TOTAL CHINA 1,292,340
------------
FINLAND (2.6%)
ELECTRICAL & ELECTRONICS (1.8%)
Nokia Oyj 145,262 12,120,893
------------
FOREST PRODUCTS & PAPER (0.8%)
UPM-Kymmene Oyj# 167,249 5,785,359
------------
TOTAL FINLAND 17,906,252
------------
See Accompanying Notes to Financial Statements
12
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
FRANCE (15.9%)
AUTOMOBILES (0.9%)
Renault S.A. 116,344 $ 6,267,144
------------
BANKING (2.5%)
Banque Nationale de Paris - CVG** 24,869 218,280
Banque Nationale de Paris# 133,538 10,211,721
Compagnie Financiere de Paribas 18 1,914
Credit Lyonnais S.A.** 219,812 6,732,943
------------
17,164,858
------------
BUSINESS & PUBLIC SERVICES (2.8%)
Cap Gemini S.A.# 37,571 6,448,543
Suez Lyonnaise des Eaux 25,064 4,180,113
Vivendi# 112,167 8,660,401
------------
19,289,057
------------
ELECTRICAL & ELECTRONICS (1.2%)
Alcatel 52,789 8,084,757
------------
ELECTRONIC COMP. & INSTRUMENTS (1.3%)
STMicroelectronics N.V. 133,388 8,854,775
------------
ENERGY SOURCES (1.2%)
Total Fina S.A. Cl. B# 65,395 8,426,746
------------
FOOD & HOUSEHOLD PRODUCTS (1.2%)
Groupe Danone 32,993 8,161,391
------------
HEALTH & PERSONAL CARE (0.6%)
Rhone-Poulenc S.A. 83,431 4,046,549
------------
INSURANCE (1.1%)
AXA S.A. 62,145 7,732,270
------------
MERCHANDISING (1.6%)
Carrefour S.A.# 66,166 10,762,449
------------
RECREATION & OTHER CONSUMER GOODS (1.5%)
Louis Vuitton Moet Hennessy# 32,701 9,950,841
------------
TOTAL FRANCE 108,740,837
------------
See Accompanying Notes to Financial Statements
13
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
GERMANY (7.7%)
BANKING (1.2%)
Deutsche Bank AG 116,772 $ 7,949,085
------------
BUSINESS & PUBLIC SERVICES (0.9%)
Systeme, Anwendungen, Produkte in
der Datenverarbeitung AG Pfd. 5,913 2,344,228
Systeme, Anwendungen, Produkte
in der Datenverarbeitung AG 11,897 4,121,609
------------
6,465,837
------------
CHEMICALS (0.8%)
BASF AG 116,983 5,226,592
------------
ELECTRICAL & ELECTRONICS (0.7%)
Siemans AG# 62,172 5,194,298
------------
INSURANCE (0.9%)
Allianz AG Registered Shares# 23,498 6,150,178
------------
MULTI-INDUSTRY (1.1%)
Preussag AG# 128,944 7,327,215
------------
TELECOMMUNICATIONS (1.3%)
Mannesmann AG 57,223 8,648,997
------------
UTILITIES - ELECTRICAL & GAS (0.8%)
Veba AG 90,003 5,670,521
------------
TOTAL GERMANY 52,632,723
------------
GREECE (0.5%)
BANKING (0.2%)
National Bank of Greece S.A. GDR** 106,508 1,560,342
------------
TELECOMMUNICATIONS (0.3%)
Hellenic Telecommunications
Organization S.A. ADR#** 205,320 2,117,362
------------
TOTAL GREECE 3,677,704
------------
HONG KONG (1.0%)
BANKING (0.2%)
Hang Seng Bank Limited 120,510 1,361,861
------------
MULTI-INDUSTRY (0.3%)
Hutchison Whampoa, Ltd. 72,000 702,389
Swire Pacific, Ltd. 242,000 1,249,747
------------
1,952,136
------------
See Accompanying Notes to Financial Statements
14
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (cont'd)
HONG KONG (CONT'D)
REAL ESTATE (0.3%)
Cheung Kong Holdings, Ltd. 156,000 $ 1,356,097
Henderson Land Development Co., Ltd. 160,900 851,648
------------
2,207,745
------------
TELECOMMUNICATIONS (0.2%)
China Telecom (Hong Kong), Ltd.** 460,800 1,433,151
------------
TOTAL HONG KONG 6,954,893
------------
ISRAEL (0.1%)
ELECTRICAL & ELECTRONICS (0.1%)
ECI Telecommunications, Ltd. ADR# 28,670 813,511
------------
INVESTMENT COMPANY (0.0%)
Geotek Communications, Inc.Series M** 600 0
------------
TOTAL ISRAEL 813,511
------------
ITALY (3.1%)
BANKING (0.8%)
Istituto Bancario San Paolo di Torino S.p.A.# 406,421 5,456,036
------------
ENERGY SOURCES (1.2%)
ENI S.p.A. 1,351,474 8,122,234
------------
INSURANCE (1.1%)
Assicurazioni Generali S.p.A. 219,461 7,406,000
------------
TOTAL ITALY 20,984,270
------------
JAPAN (27.4%)
APPLIANCES & HOUSEHOLD DURABLES (1.8%)
Aiwa Co., Ltd. 48,900 1,409,356
Morgan Stanley "Sony Corp." - (CPS) 1,750 3,707,468
Sony Corp. 53,900 6,970,913
Sony Corp. ADR 1,100 140,044
------------
12,227,781
------------
AUTOMOBILES (2.6%)
Fuji Heavy Industries, Ltd.# 333,000 2,648,411
Mabuchi Motor Co., Ltd.# 30,248 3,763,013
Merrill Lynch "Honda Motor Corp." - (CPS) 3,200 3,043,840
Toyota Motor Corp. 286,600 8,443,127
------------
17,898,391
------------
See Accompanying Notes to Financial Statements
15
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
JAPAN (CONT'D)
BANKING (3.0%)
Asahi Bank, Ltd. (The) 409,000 $ 2,499,325
Bank of Tokyo - Mitsubishi, Ltd. (The) 310,000 4,622,789
Sanwa Bank, Ltd. (The)# 253,000 3,461,277
Sumitomo Bank, Ltd. (The) 285,000 3,899,068
Sakura Bank, Ltd. (The) 611,000 3,232,167
Tokai Bank, Ltd. (The) 397,000 2,520,138
------------
20,234,764
------------
BROADCASTING & PUBLISHING (0.3%)
Kadokawa Shoten Publishing Co., Ltd. 8,700 1,944,061
------------
BUSINESS & PUBLIC SERVICES (2.1%)
Bellsystem 24, Inc. 1,900 953,105
Fuji Soft ABC, Inc. 32,200 2,232,000
Fujitsu Support & Service, Inc. 8,500 2,193,967
Konami Co., Ltd. 36,200 3,166,298
NTT Data Corp. 385 3,722,127
Toyo Information Systems Co., Ltd.# 47,000 2,036,180
------------
14,303,677
------------
CHEMICALS (1.4%)
Mitsui Chemicals Industries 495,800 3,617,605
Sumitomo Chemical Co., Ltd. 442,000 2,265,600
Takeda Chemical Industries 73,000 3,661,931
------------
9,545,136
------------
CONSTRUCTION & HOUSING (0.6%)
Daiwa House Industry Co., Ltd. 210,000 2,106,865
Sekisui House, Ltd. 209,000 2,243,610
------------
4,350,475
------------
DATA PROCESSING & REPRODUCTION (1.0%)
Canon, Inc. 62,000 1,809,532
Fujitsu Limited 108,000 3,161,939
Morgan Stanley "Canon Corp." - (CPS) 1,860 2,068,671
------------
7,040,142
------------
ELECTRICAL & ELECTRONICS (0.9%)
Hikari Tsushin, Inc.# 6,500 3,426,619
NEC Corp.# 156,000 2,532,615
------------
5,959,234
------------
See Accompanying Notes to Financial Statements
16
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
JAPAN (CONT'D)
ELECTRONIC COMP. & INSTRUMENTS (2.7%)
Fanuc, Ltd. 41,300 $ 2,486,100
Hoya Corp. 24,000 1,435,951
I-O Data Device, Inc. 12,300 445,369
Nemic-Lambda K.K. 11,300 608,072
NIDEC Corp.# 10,300 2,028,217
Rohm Co., Ltd. 27,700 5,507,581
TDK Corp. 28,100 3,408,651
Tokyo Seimitsu Co., Ltd. 24,500 2,413,318
------------
18,333,259
------------
FINANCIAL SERVICES (2.4%)
Acom Company, Ltd.# 37,700 3,820,147
Daiwa Securities Group, Inc.# 174,000 1,572,706
Jafco Co., Ltd. 25,000 1,901,650
Nichiei Co., Ltd.# 32,468 2,990,898
Nomura Securities Co., Ltd. (The) 298,000 4,362,304
Orix Corp.# 21,200 2,037,986
------------
16,685,691
------------
FOOD & HOUSEHOLD PRODUCTS (0.5%)
Kao Corp. 94,000 2,666,324
Yakult Honsha Co., Ltd. 69,000 1,000,624
------------
3,666,948
------------
INDUSTRIAL COMPONENTS (0.4%)
Minebea Company# 151,000 1,817,923
Sumitomo Rubber Industries, Ltd. 140,000 962,773
------------
2,780,696
------------
MERCHANDISING (1.4%)
Avex, Inc. 1,800 356,252
Don Quijote Co., Ltd.# 4,200 907,867
FamilyMart Co., Ltd. 56,400 2,890,947
Ito-Yokado Co., Ltd.# 42,000 3,087,514
Ryohin Keikaku Co., Ltd. - New 3,900 768,322
Ryohin Keikaku Co., Ltd.# 3,900 782,550
Shimamura Co. 5,500 727,370
------------
9,520,822
------------
REAL ESTATE (0.5%)
Sumitomo Realty & Development Co., Ltd.# 793,000 3,175,136
------------
See Accompanying Notes to Financial Statements
17
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
JAPAN (CONT'D)
RECREATION & OTHER CONSUMER GOODS (1.9%)
Aruze Corp. 17,000 $ 1,612,527
Heiwa Corp. 41,700 1,262,696
Nintendo Co., Ltd. 42,900 7,434,222
Noritsu Koki Co., Ltd. 11,000 487,589
Sankyo Co., Ltd. 30,400 2,290,226
------------
13,087,260
------------
TELECOMMUNICATIONS (2.2%)
Nippon Telegraph & Telephone 967 10,848,163
NTT Mobile Communication Network, Inc.# 36 597,583
NTT Mobile Communication Network, Inc. - New 200 3,301,667
------------
14,747,413
------------
TEXTILES & APPAREL (0.3%)
WORLD Co., Ltd.# 14,900 1,732,691
------------
TRANSPORTATION - ROAD & RAIL (0.4%)
Nippon Express Co., Ltd. 390,000 2,977,246
------------
TRANSPORTATION - SHIPPING (0.1%)
Mitsui O.S.K. Lines Ltd. 418,000 800,609
------------
WHOLESALE & INTERNATIONAL TRADE (0.9%)
Softbank Corp. 18,200 6,241,427
------------
TOTAL JAPAN 187,252,859
------------
MEXICO (1.1%)
MERCHANDISING (0.3%)
Cifra S.A. de C.V. Cl. V ADR#** 94,020 1,567,877
------------
TELECOMMUNICATIONS (0.8%)
Cemex S.A. de C.V., Cl. A ADR 6,745 59,980
Cemex S.A. de C.V., Cl. B ADR 175,600 1,559,644
Telefonos de Mexico S.A.,Cl. L ADR 53,900 4,008,813
------------
5,628,437
------------
TOTAL MEXICO 7,196,314
------------
NETHERLANDS (4.5%)
APPLIANCES & HOUSEHOLD DURABLES (1.3%)
Koninklijke Philips Electronics N.V. 84,521 8,708,581
------------
BROADCASTING & PUBLISHING (1.0%)
VNU Verenigd Bezit 177,491 6,805,162
------------
See Accompanying Notes to Financial Statements
18
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
NETHERLANDS (CONT'D)
CHEMICALS (1.0%)
Akzo Nobel N.V. 147,159 $ 6,846,810
------------
FINANCIAL SERVICES (0.6%)
ING Groep N.V.# 71,496 3,919,265
------------
INSURANCE (0.6%)
Fortis (NL) N.V. 123,457 4,179,259
------------
TOTAL NETHERLANDS 30,459,077
------------
PORTUGAL (1.2%)
TELECOMMUNICATIONS (1.2%)
Portugal Telecom S.A. 190,205 7,953,585
------------
TOTAL PORTUGAL 7,953,585
------------
SINGAPORE (0.7%)
ELECTRONIC COMP. & INSTRUMENTS (0.2%)
Natsteel Electronics, Ltd. 231,100 1,152,571
------------
REAL ESTATE (0.4%)
City Developments, Ltd. 208,790 1,264,440
DBS Land, Ltd. 835,387 1,904,615
------------
3,169,055
------------
TRANSPORTATION - AIRLINES (0.1%)
Singapore Airlines, Ltd. 85,300 800,192
------------
TOTAL SINGAPORE 5,121,818
------------
SOUTH AFRICA (0.6%)
BEVERAGES & TOBACCO (0.2%)
South African Breweries plc 186,303 1,531,634
------------
INSURANCE (0.2%)
Liberty Life Association of Africa, Ltd. 80,540 944,205
------------
MULTI-INDUSTRY (0.2%)
Anglo American plc 23,431 1,289,856
------------
REAL ESTATE (0.0%)
Liberty International plc 37,551 280,930
------------
TOTAL SOUTH AFRICA 4,046,625
------------
SOUTH KOREA (1.4%)
APPLIANCES & HOUSEHOLD DURABLES (0.1%)
Samsung Electronics Co.
GDR#** 5,948 552,867
------------
See Accompanying Notes to Financial Statements
19
<PAGE>
WARBURG PINCUS INTERNATIONAL GROWTH FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
SOUTH KOREA (CONT'D)
METALS - STEEL (0.2%)
Pohang Iron & Steel Company, Ltd. ADR# 42,421 $ 1,558,972
------------
TELECOMMUNICATIONS (0.5%)
Korea Telecom Corp. ADR** 76,400 2,483,000
SK Telecom Co., Ltd. ADR** 90,080 1,019,030
------------
3,502,030
------------
UTILITIES - ELECTRICAL & GAS (0.6%)
Korea Electric Power Corp. ADR 226,520 4,077,360
------------
TOTAL SOUTH KOREA 9,691,229
------------
SPAIN (2.5%)
BANKING (0.8%)
Banco Santander Central Hispano SA 560,730 5,632,352
------------
TELECOMMUNICATIONS (1.7%)
Telefonica S.A. 718,267 11,455,614
------------
TOTAL SPAIN 17,087,966
------------
SWEDEN (1.9%)
ELECTRICAL & ELECTRONICS (0.9%)
Telefonaktiebolaget L.M. Ericsson Cl. B 190,997 6,151,667
------------
INSURANCE (1.0%)
Skandia Forsakrings AB# 332,048 6,754,524
------------
TOTAL SWEDEN 12,906,191
------------
SWITZERLAND (4.6%)
BANKING (1.1%)
United Bank of Switzerland S.A. 26,871 7,582,161
------------
ELECTRICAL & ELECTRONICS (0.6%)
ABB AG - Bearer#** 44,281 4,515,636
------------
HEALTH & PERSONAL CARE (1.9%)
Novartis AG Registered Shares 3,832 5,513,851
Roche Holding AG 632 7,308,432
------------
12,822,283
------------
INSURANCE (1.0%)
Zurich Allied AG** 11,440 6,712,755
------------
TOTAL SWITZERLAND 31,632,835
------------
See Accompanying Notes to Financial Statements
20
<PAGE>
Warburg Pincus International Growth Fund
Schedule of Investments
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
TAIWAN (0.8%)
ELECTRICAL & ELECTRONICS (0.6%)
Taiwan Semiconductor Manufacturing
Co., Ltd. ADR#** 143,442 $ 4,150,870
------------
Structured Investment (0.2%)
Morgan Stanley Taiwan Opals 12,964 1,688,302
------------
TOTAL TAIWAN 5,839,172
------------
UNITED KINGDOM (17.7%)
BANKING (2.9%)
Abbey National plc 260,098 4,466,777
Bank of Scotland 563,767 7,030,197
LLoyds TSB Holdings Group plc 592,792 8,202,368
------------
19,699,342
------------
BUSINESS & PUBLIC SERVICES (0.6%)
Reuters Group plc 308,457 4,521,030
------------
ELECTRICAL & ELECTRONICS (1.3%)
General Electric Co. plc 892,294 8,924,510
------------
ENERGY SOURCES (4.4%)
BP Amoco plc 992,111 18,425,882
Shell Transport & Trading Co. plc 1,435,614 11,449,998
------------
29,875,880
------------
FINANCIAL SERVICES (0.3%)
AMVESCAP plc 257,161 2,204,034
------------
HEALTH & PERSONAL CARE (3.0%)
Glaxo Wellcome 397,059 10,445,383
SmithKline Beecham plc 762,243 9,934,191
------------
20,379,574
------------
TELECOMMUNICATIONS (4.4%)
British Telecommunications plc 639,459 9,799,223
Orange plc 370,125 6,243,239
Vodafone AirTouch plc 709,284 14,302,230
------------
30,344,692
------------
TRANSPORTATION - SHIPPING (0.8%)
Peninsular & Oriental Steam Navigation
Company (The) 322,344 5,289,549
------------
TOTAL UNITED KINGDOM 121,238,611
------------
TOTAL COMMON STOCKS
(Cost $595,998,532) $668,313,443
------------
See Accompanying Notes to Financial Statements
21
<PAGE>
Warburg Pincus International Growth Fund
Schedule of Investments
August 31, 1999
- --------------------------------------------------------------------------------
PAR
(000) VALUE
------- ------
SHORT-TERM INVESTMENT (2.6%)
BBH Grand Cayman U.S. Dollar Time Deposit
4.500% 09/01/99 $18,025 $ 18,025,000
------------
(Cost $18,025,000)
TOTAL INVESTMENTS (100.3%) (Cost $614,023,532*) $686,338,443
LIABILITIES IN EXCESS OF OTHER ASSETS (0.3%) (2,444,873)
------------
TOTAL NET ASSETS (100.0%) $683,893,570
============
* Cost for Federal income tax purposes at August 31, 1999 is $618,110,693. The
gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 94,064,154
Gross Depreciation (25,836,404)
------------
Net Appreciation $ 68,227,750
============
** Non-income producing securities.
# Security or a portion thereof is out on loan.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
CPS = Currency Protected Shares
GDR = Global Depository Receipts
See Accompanying Notes to Financial Statements
22
<PAGE>
Warburg Pincus European Equity Fund
Schedule of Investments
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (93.6%)
AUSTRIA (1.1%)
ENERGY SOURCES (1.1%)
OMV AG 2,600 $ 260,750
-----------
TOTAL AUSTRIA 260,750
-----------
DENMARK (2.0%)
BUSINESS & PUBLIC SERVICES (2.0%)
ISS International Service System A/S Cl. B 9,100 501,615
-----------
TOTAL DENMARK 501,615
-----------
FINLAND (4.5%)
ELECTRICAL & ELECTRONICS (1.8%)
Nokia Oyj 5,242 437,401
-----------
FOREST PRODUCTS & PAPER (2.7%)
Metsa-Serla Oyj B Shares 23,300 220,505
UPM-Kymmene Oyj 12,679 438,583
-----------
659,088
-----------
TOTAL FINLAND 1,096,489
-----------
FRANCE (20.9%)
BANKING (1.4%)
Banque Nationale de Paris 4,519 345,570
-----------
BUILDING MATERIALS & COMPONENTS (1.2%)
Compagnie de Saint-Gobain 1,505 290,900
-----------
BUSINESS & PUBLIC SERVICES (1.5%)
Cap Gemini S.A. 2,174 373,137
-----------
ELECTRICAL & ELECTRONICS (2.0%)
Alstom# 14,700 494,984
-----------
ELECTRONIC COMP. & INSTRUMENTS (2.1%)
STMicroelectronics N.V. 7,770 515,801
-----------
ENERGY EQUIPMENT & SERVICES (0.9%)
Coflexip S.A. ADR** 4,900 221,725
-----------
ENERGY SOURCES (2.1%)
Total Fina S.A. Cl. B# 4,083 526,132
-----------
INDUSTRIAL COMPONENTS (1.1%)
Valeo S.A. 3,208 259,210
-----------
INSURANCE (1.8%)
AXA S.A. 3,480 432,992
-----------
See Accompanying Notes to Financial Statements
23
<PAGE>
Warburg Pincus European Equity Fund
Schedule of Investments
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
FRANCE (CONT'D
METALS - NON-FERROUS (2.5%)
Pechiney SA Cl. A 10,600 $ 616,897
-----------
MISC. MATERIALS & COMMODITIES (1.0%)
Imetal SA 1,600 254,845
-----------
MULTI-INDUSTRY (1.7%)
Lagardere SCA 10,166 412,322
-----------
RECREATION AND OTHER CONSUMER GOODS (1.6%)
Louis Vuitton Moet Hennessy 1,303 396,500
-----------
TOTAL FRANCE 5,141,015
-----------
GERMANY (10.3%)
CHEMICALS (1.8%)
BASF AG 10,029 448,078
-----------
ELECTRONICAL & ELECTRONICS (1.1%)
Siemens AG 3,316 277,043
-----------
ELECTRONIC COMP. & INSTRUMENTS (2.8%)
Austria Technologie & Systemtechnik AG** 21,900 674,277
-----------
MULTI-INDUSTRY (3.4%)
Metallgesellschaft AG# 24,000 545,011
Preussag AG 4,984 283,215
-----------
828,226
-----------
TELECOMMUNICATIONS (1.2%)
Mannesmann AG 2,000 302,291
-----------
TOTAL GERMANY 2,529,915
-----------
HUNGARY (0.8%)
BANKING (0.8%)
OTP Bank Rt. GDR 144A 4,400 201,072
-----------
TOTAL HUNGARY 201,072
-----------
IRELAND (2.6%)
BANKING (1.5%)
Bank of Ireland 40,000 362,073
-----------
TELECOMMUNICATIONS (1.1%)
Bord Telecom Eireann plc** 62,200 283,351
-----------
TOTAL IRELAND 645,424
-----------
See Accompanying Notes to Financial Statements
24
<PAGE>
Warburg Pincus European Equity Fund
Schedule of Investments (cont'd)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
ITALY (2.0%)
INSURANCE (2.0%)
Mediolanum S.p.A. 62,765 $ 501,181
-----------
TOTAL ITALY 501,181
-----------
NETHERLANDS (7.7%)
APPLIANCES & HOUSEHOLD DURABLES (1.6%)
Koninklijke Philips Electronics N.V. 3,888 400,598
-----------
BUSINESS & PUBLIC SERVICES (1.8%)
Getronics N.V. 9,000 440,603
-----------
CONSTRUCTION & HOUSING (1.3%)
IHC Caland N.V. 6,600 310,561
-----------
FOOD & HOUSEHOLD PRODUCTS (0.8%)
Koninklijke Numico N.V.# 4,626 190,069
-----------
INSURANCE (0.8%)
AEGON N.V.# 2,321 202,984
-----------
TELECOMMUNICATIONS (1.4%)
Versatel Telecom International N.V.** 26,200 359,749
-----------
TOTAL NETHERLANDS 1,904,564
-----------
PORTUGAL (1.4%)
TELECOMMUNICATIONS (1.4%)
Portugal Telecom S.A. 8,400 351,253
-----------
TOTAL PORTUGAL 351,253
-----------
SPAIN (5.2%)
BANKING (1.4%)
Banco Santander Central Hispano SA 35,280 354,376
-----------
BROADCASTING & PUBLISHING (2.8%)
Sogecable S.A.** 25,000 680,736
-----------
ENERGY SOURCES (1.0%)
Repsol-YPF, SA 12,000 251,339
-----------
TOTAL SPAIN 1,286,451
-----------
SWEDEN (6.9%)
APPLIANCES & HOUSEHOLD DURABLES (1.0%)
Electrolux AB Series B 12,825 257,780
-----------
ELECTRICAL & ELECTRONICS (1.6%)
Telefonaktiebolaget L.M. Ericsson Cl. B 12,477 401,862
-----------
See Accompanying Notes to Financial Statements
25
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
SWEDEN (CONT'D)
INDUSTRIAL COMPONENTS (2.9%)
SKF AB Cl. B# 31,000 $ 705,674
-----------
INSURANCE (1.4%)
Skandia Forsakrings AB 17,066 347,157
-----------
TOTAL SWEDEN 1,712,473
-----------
SWITZERLAND (5.5%)
BANKING (1.9%)
United Bank of Switzerland S.A. 1,635 461,346
-----------
HEALTH & PERSONAL CARE (2.0%)
Roche Holding 43 497,251
-----------
INSURANCE (1.6%)
Zurich Allied AG 662 388,448
-----------
TOTAL SWITZERLAND 1,347,045
-----------
UNITED KINGDOM (22.0%)
AEROSPACE & MILITARY TECHNOLOGY (2.1%)
British Aerospace plc 71,800 524,452
-----------
BANKING (2.0%)
LLoyds TSB Holdings Group plc 34,558 478,174
-----------
BROADCASTING & PUBLISHING (1.4%)
Reed International plc 50,200 333,986
-----------
ENERGY SOURCES (3.4%)
BP Amoco plc 22,056 409,633
Shell Transport & Trading Co. plc 54,644 435,823
-----------
845,456
-----------
HEALTH & PERSONAL CARE (3.4%)
AstraZeneca Group plc 11,600 460,724
SmithKline Beecham plc 28,500 371,436
-----------
832,160
-----------
INSURANCE (2.0%)
Prudential Corporation plc 33,500 500,164
-----------
MERCHANDISING (1.1%)
Marks & Spencer plc 40,516 270,697
-----------
See Accompanying Notes to Financial Statements
26
<PAGE>
Warburg Pincus European Equity Fund
Schedule of Investments
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
UNITED KINGDOM (CONT'D)
TELECOMMUNICATIONS (5.4%)
British Telecommunications plc 28,673 $ 439,392
Cable & Wireless Communications plc** 18,912 197,516
Orange plc** 22,463 378,904
Vodafone AirTouch plc 16,116 324,968
-----------
1,340,780
-----------
TRANSPORTATION - SHIPPING (1.2%)
Peninsular & Oriental Steam Navigation
Company (The) 18,222 299,016
-----------
TOTAL UNITED KINGDOM 5,424,885
-----------
UNITED STATES (0.7%)
TELECOMMUNICATIONS (0.7%)
Viatel, Inc.** 4,400 170,225
-----------
TOTAL UNITED STATES 170,225
-----------
TOTAL COMMON STOCKS (Cost $22,125,067) $23,074,357
-----------
PAR
(000)
-------
SHORT-TERM INVESTMENT (5.8%)
BBH Grand Cayman U.S. Dollar Time Deposit
4.500% 09/01/99 $1,430 $ 1,430,000
-----------
(Cost $1,430,000)
TOTAL INVESTMENTS (99.4%) (Cost $23,555,067*) $24,504,357
OTHER ASSETS IN EXCESS OF LIABILITIES (0.6%) 152,087
-----------
TOTAL NET ASSETS (100.0%) $24,656,444
===========
* The cost for Federal income tax purposes at August 31, 1999 is $23,662,430.
The gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 1,706,230
Gross Depreciation (864,303)
-----------
Net Appreciation $ 841,927
===========
** Non-income producing securities.
# Security or a portion thereof is out on loan.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
GDR = Global Depository Receipts
See Accompanying Notes to Financial Statements
27
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (94.7%)
BRAZIL (3.5%)
BEVERAGES & TOBACCO (0.5%)
Companhia Cervejaria Brahma 47,103 $ 24,976
Companhia Cervejaria Brahma ADR 1,160 12,252
-----------
37,228
-----------
ENERGY SOURCES (1.0%)
Petroleo Brasileiro S.A. ADR 2,360 31,557
Petroleo Brasileiro S.A. PN 264,669 35,464
-----------
67,021
-----------
METALS - STEEL (0.5%)
Companhia Vale do Rio Doce ADR 800 17,732
Companhia Vale do Rio Doce PN 752 16,702
Companhia Vale do Rio Doce PN Cl. B 39,000 0
-----------
34,434
-----------
MULTI-INDUSTRY (0.1%)
Serrana S.A. ON 10,210 2,715
Serrana S.A. PN 12,175 3,174
-----------
5,889
-----------
TELECOMMUNICATIONS (1.2%)
Telecomunicacoes Brasileiras S.A. PN Block 500 37,094
Telecomunicacoes de Minas Gerais Celular S.A. PN 71,636 586
Telecomunicacoes de Minas Gerais S.A. PN 71,636 1,662
Telecomunicacoes de Sao Paulo S.A. PN 505,034 44,497
Telecomunicacoes do Rio de Janeiro S.A. PN 8,733 125
-----------
83,964
-----------
UTILITIES - ELECTRICAL & GAS (0.2%)
Centrais Eletricas Brasileiras S.A. ADR** 2,086 16,335
-----------
TOTAL BRAZIL 244,871
-----------
CHILE (2.6%)
BEVERAGES & TOBACCO (0.3%)
Embotelladora Andina S.A. ADR, Series B 1,400 18,506
-----------
MERCHANDISING (0.3%)
Distribucion Y Servicio D & S S.A. ADR 1,325 21,862
-----------
TELECOMMUNICATIONS (1.3%)
Compania de Telecomunicaciones de Chile S.A. ADR 3,802 85,545
-----------
See Accompanying Notes to Financial Statements
28
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
CHILE (CONT'D)
UTILITIES - ELECTRICAL & GAS (0.7%)
Chilectra S.A. ADR 2,167 $ 42,525
Gener S.A. ADR 481 8,845
-----------
51,370
-----------
TOTAL CHILE 177,283
-----------
CHINA (3.0%)
METALS - STEEL (3.0%)
China Steel Corp. ADR#** 11,300 204,530
-----------
TOTAL CHINA 204,530
-----------
COLUMBIA (0.0%)
Building Materials & Components (0.0%)
Cementos Paz del Rio ADR 118 710
-----------
TOTAL COLUMBIA 710
-----------
GREECE (0.4%)
ELECTRICAL & ELECTRONICS (0.4%)
Intracom S.A. 286 24,797
-----------
TOTAL GREECE 24,797
-----------
HONG KONG (3.3%)
APPLIANCES & HOUSEHOLD DURABLES (0.4%)
Guangdong Kelon Electrical Holdings Co., Ltd. 27,300 27,951
-----------
CHEMICALS (0.4%)
Yizheng Chemical Fibre Co., Ltd. Cl. H 96,000 28,436
-----------
ELECTRONIC COMP. & INSTRUMENTS (0.5%)
Legend Holdings, Ltd. 36,000 34,772
-----------
MISC. MATERIALS & COMMODITIES (0.2%)
Yanzhou Coal Mining Co., Ltd. 36,000 15,879
-----------
MULTI-INDUSTRY (0.5%)
Beijing Enterprises Holdings, Ltd. 17,100 34,134
-----------
TELECOMMUNICATIONS (0.7%)
China Telecom (Hong Kong), Ltd.** 15,600 48,518
-----------
UTILITIES - ELECTRICAL & GAS (0.6%)
Shandong International Power Development
Co., Ltd.** 197,700 39,464
-----------
TOTAL HONG KONG 229,154
-----------
See Accompanying Notes to Financial Statements
29
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
HUNGARY (2.9%)
BANKING (0.7%)
OTP Bank GDR 1,000 $ 45,698
-----------
ENERGY SOURCES (1.2%)
MOL Magyar Olaj - es Gazipari GDR 144A 3,200 81,508
-----------
TELECOMMUNICATIONS (1.0%)
Magyar Tavkozlesi Rt. ADR 2,300 69,862
-----------
TOTAL HUNGARY 197,068
-----------
INDIA (10.7%)
AUTOMOBILE (0.2%)
Mahindra & Mahindra Ltd. Participation Notes 1,750 16,588
-----------
BANKING (1.3%)
Infosys Technologies, Ltd. ADR 900 89,269
-----------
BEVERAGES & TOBACCO (1.5%)
ITC Agro-Tech, Ltd. GDR 3,500 107,275
-----------
CHEMICALS (0.9%)
Reliance Industries Ltd. 144A GDR 5,304 59,272
-----------
ELECTRICAL & ELECTRONICS (0.8%)
Bharat Heavy Electricals Ltd.
Participation Notes 8,035 58,692
-----------
ENERGY SOURCES (2.8%)
Hindustan Petroleum Corporation Ltd.
Participation Notes 32,400 191,383
-----------
HEALTH & PERSONAL CARE (0.9%)
Ranbaxy Laboratories, Ltd. 144A GDR 2,500 65,275
-----------
INVESTMENT COMPANY (0.7%)
Morgan Stanley India Investment Fund, Inc. 4,200 52,237
-----------
MACHINERY & ENGINEERING (0.3%)
Larsen & Toubro Ltd. Participation Notes 2,093 18,852
-----------
METALS - NON-FERROUS (0.9%)
Hindalco Industries Ltd. GDR 2,300 63,538
-----------
TELECOMMUNCATIONS (0.4%)
Mahanagar Telephone Nigam, Ltd. 144A GDR 2,700 29,363
-----------
Total India 751,744
-----------
See Accompanying Notes to Financial Statements
30
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
INDONESIA (2.6%)
BANKING (0.0%)
P.T. Bank Dagang Nasional Indonesia Warrants **/*** 400 $ 0
P.T. Bank International Indonesia *** 34 0
P.T. Bank International Indonesia Options 100 0
P.T. Bank International Indonesia Warrants 4 0
-----------
0
-----------
BEVERAGES & TOBACCO (1.2%)
P.T. Hanjaya Mandala Sampoerna Tbk 40,000 83,129
-----------
FOOD & HOUSEHOLD PRODUCTS (0.7%)
P.T. Indofood Sukses Makmur Tbk 48,000 51,285
-----------
TELECOMMUNICATIONS (0.7%)
P.T. Telekomunikasi Indonesia 79,300 30,481
P.T. Telekomunikasi Indonesia ADR 2,400 18,450
-----------
48,931
-----------
TOTAL INDONESIA 183,346
-----------
ISRAEL (2.3%)
BANKING (1.0%)
Bank Hapoalim Ltd. 30,408 70,111
-----------
BUILDING MATERIALS & COMPONENTS (0.9%)
Check Point Software Technologies, Ltd.** 800 61,700
-----------
HEALTH & PERSONAL CARE (0.4%)
Teva Pharmaceutical Industries Ltd. ADR 600 28,237
-----------
TOTAL ISRAEL 160,048
-----------
MEXICO (9.9%)
BEVERAGES & TOBACCO (0.5%)
Grupo Modelo S.A. de C.V. Cl. C 13,403 35,893
-----------
BROADCASTING & PUBLISHING (1.6%)
Grupo Televisa S.A. de C.V. GDS 3,001 109,161
-----------
BUILDING MATERIALS & COMPONENTS (1.2%)
Cementos Mexicanos S.A. de C.V. Cl. B** 18,349 81,603
-----------
HEALTH & PERSONAL CARE (1.0%)
Kimberly-Clark de Mexico S.A. de C.V. Cl. A 22,437 71,240
-----------
MERCHANDISING (1.8%)
Cifra S.A. de C.V. Cl. V ADR** 7,483 124,786
-----------
See Accompanying Notes to Financial Statements
31
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
MEXICO (CONT'D)
TELECOMMUNICATIONS (3.8%)
Telefonos de Mexico S.A., Cl. L ADR 3,500 $ 260,312
-----------
TOTAL MEXICO 682,995
-----------
PHILIPPINES (1.6%)
REAL ESTATE (0.4%)
SM Prime Holdings 118,500 21,804
-----------
TELECOMMUNICATIONS (0.9%)
Philippine Long Distance Telephone Company ADR 2,701 63,980
-----------
UTILITIES - ELECTRICAL & GAS (0.3%)
Manila Electric Company 7,400 22,009
-----------
TOTAL PHILIPPINES 107,793
-----------
POLAND (2.0%)
BANKING (0.7%)
Bank Handlowy W. Warszawie 144A ADR 1,303 18,815
Bank Rozwoju Eksportu S.A. 871 28,436
-----------
47,251
-----------
METALS - NON-FERROUS (0.4%)
KGHM Polska Miedz S.A. 4,183 26,998
-----------
MULTI-INDUSTRY (0.3%)
Elektrim Spolka Akcyjna S.A. 1,634 20,518
-----------
TELECOMMUNICATIONS (0.6%)
Telekomunikacja Polska GDR 6,450 43,736
-----------
TOTAL POLAND 138,503
-----------
RUSSIA (0.8%)
ENERGY SOURCES (0.8%)
Lukoil Holding ADR 900 27,000
Surgutneftegaz ADR 3,800 30,020
-----------
57,020
-----------
TOTAL RUSSIA 57,020
-----------
SINGAPORE (0.5%)
BANKING (0.0%)
Oversea-Chinese Banking Corp. Ltd. *** 231 1,618
-----------
Broadcasting & Publishing (0.0%)
Singapore Press Holdings Ltd.*** 39 648
-----------
See Accompanying Notes to Financial Statements
32
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
SINGAPORE (CONT'D)
FOREST PRODUCTS & PAPER (0.5%)
Asia Pulp & Paper Co. Ltd. ADR** 4,200 $ 32,025
Asia Pulp & Paper Warrants** 1,060 1,458
-----------
33,483
-----------
TOTAL SINGAPORE 35,749
-----------
SOUTH AFRICA (6.4%)
BANKING (0.8%)
Nedcor Limited 2,876 57,219
Nedcor Rights 3,476 6
-----------
57,225
-----------
BEVERAGES & TOBACCO (1.0%)
South African Breweries plc 8,148 66,986
-----------
BUSINESS & PUBLIC SERVICES (1.1%)
Dimension Data Holdings Ltd. 17,282 71,750
-----------
INSURANCE (0.9%)
Liberty Life Association of Africa, Ltd. 5,566 65,253
-----------
MULTI-INDUSTRY (2.6%)
Anglo American Corp. of South Africa Ltd. 1,367 75,252
C.G. Smith Ltd. 26,713 71,155
Johnnies Industrial Corp. Ltd. 4,960 33,845
-----------
180,252
-----------
REAL ESTATE (0.0%)
Liberty International plc 1 7
-----------
TOTAL SOUTH AFRICA 441,473
-----------
SOUTH KOREA (17.6%)
APPLIANCES & HOUSEHOLD DURABLES (3.6%)
Samsung Electronics Co. 1,300 246,683
-----------
BANKING (1.1%)
Housing & Commercial Bank, Korea 3,400 79,494
-----------
ELECTRICAL & ELECTRONICS (3.1%)
L.G. Information & Communication Ltd. 2,400 214,492
-----------
METALS - STEEL (2.7%)
Pohang Iron & Steel Company, Ltd. ADR 5,000 183,750
-----------
See Accompanying Notes to Financial Statements
33
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
SOUTH KOREA (CONT'D)
TELECOMMUNICATIONS (3.8%)
Korea Telecom Corp. 1,200 $ 75,225
Korea Telecom Corp. ADR 5,800 188,500
-----------
263,725
-----------
UTILITIES - ELECTRICAL & GAS (3.3%)
Korea Electric Power Corp.** 2,800 104,366
Korea Electric Power Corp. ADR** 7,100 127,800
-----------
232,166
-----------
TOTAL SOUTH KOREA 1,220,310
-----------
TAIWAN (16.0%)
ELECTRIC COMP. & INSTRUMENTS (0.5%)
Advanced Semiconductor Engineering Inc. 2,080 37,606
-----------
ELECTRICAL & ELECTRONICS (5.4%)
Taiwan Semiconductor Manufacturing Co., Ltd. ADR 7,872 227,796
Yageo Corp. - GDR (Reg. S)** 29,600 148,000
-----------
375,796
-----------
INVESTMENT COMPANIES (2.6%)
R.O.C. Taiwan Fund 11,900 93,713
Taiwan Fund 4,800 87,900
-----------
181,613
-----------
STRUCTURED INVESTMENT (6.0%)
Morgan Stanley Taiwan Opals 3,200 416,736
-----------
TEXTILES & APPAREL (0.8%)
Siliconware Precision Industries GDR 3,868 52,411
-----------
TRANSPORTATION - SHIPPING (0.7%)
Evergreen Marine Corp. 3,388 45,230
-----------
TOTAL TAIWAN 1,109,392
-----------
THAILAND (3.7%)
BANKING (1.5%)
Siam Commercial Bank Pfd.** 63,800 72,360
Siam Commerical Bank - Warrants 75,000 33,732
-----------
106,092
-----------
BROADCASTING & PUBLISHING (0.9%)
BEC World Public Co., Ltd.*** 9,800 58,258
-----------
See Accompanying Notes to Financial Statements
34
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS, WARRANTS AND RIGHTS (CONT'D)
THAILAND (CONT'D)
BUILDING MATERIALS & COMPONENTS (0.3%)
Siam City Cement Public Co. Ltd.**/*** 800 $ 20,692
-----------
TELECOMMUNICATIONS (1.0%)
Advanced Information Services Public Co. Ltd.*** 5,100 69,943
-----------
Total Thailand 254,985
-----------
TURKEY (4.2%)
APPLIANCES & HOUSEHOLD DURABLES (1.1%)
Arcelik A.S. 3,430,668 78,917
-----------
BANKING (2.4%)
Akbank T.A.S. 7,453,432 98,691
Yapi Ve Kredi Bankasi A.S. 5,235,831 68,153
-----------
166,844
-----------
MERCHANDISING (0.7%)
Migros Turk T.A.S. 114,400 45,571
-----------
TOTAL TURKEY 291,332
-----------
UNITED STATES (0.7%)
ELECTRONIC COMP. & INSTRUMENTS (0.7%)
Comverse Technology, Inc.** 600 46,800
-----------
TOTAL UNITED STATES 46,800
-----------
VENEZUELA (0.0%)
UTILITIES - ELECTRICAL & GAS (0.0%)
La Electricidad de Caracas 2 1
-----------
TOTAL VENEZUELA 1
-----------
TOTAL COMMON STOCKS, WARRANTS AND RIGHTS (Cost $6,108,414) $ 6,559,904
-----------
See Accompanying Notes to Financial Statements
35
<PAGE>
WARBURG PINCUS EMERGING MARKETS II FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
PAR
(000) VALUE
------- -------
SHORT-TERM INVESTMENT (5.8%)
BBH Grand Cayman U.S. Dollar Time
(4.500%) 09/01/99 (Cost $402,000) $402 $ 402,000
-----------
TOTAL INVESTMENTS (100.5%) (Cost $6,510,414*) $ 6,961,904
LIABILITIES IN EXCESS OF OTHER ASSETS (0.5%) (37,165)
-----------
TOTAL NET ASSETS (100.0%) $ 6,924,739
===========
* Cost for Federal income tax purposes at August 31, 1999 is $6,658,596. The
gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 814,276
Gross Depreciation (510,968)
----------
Net Appreciation $ 303,308
==========
** Non-incoming producing.
*** Denotes foreign shares.
# Security or a portion thereof is out on loan.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
ADS = American Depository Shares
GDR = Global Depository Receipts
See Accompanying Notes to Financial Statements
36
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (92.7%)
AUSTRIA (0.5%)
ELECTRONIC COMP. & INSTRUMENTS (0.5%)
Austria Technologie & Systemtechnik AG** 9,750 $ 300,192
-----------
TOTAL AUSTRIA 300,192
-----------
BELGIUM (0.0%)
TELECOMMUNICATIONS (0.0%)
Telinfo NV-Strip VVPR** 61 1
-----------
TOTAL BELGIUM 1
-----------
CANADA (1.1%)
TELECOMMUNICATIONS (1.1%)
BCE, Inc. 4,317 201,820
Research in Motion Ltd.#** 18,000 535,500
-----------
TOTAL CANADA 737,320
-----------
CHINA (1.4%)
TELECOMMUNICATIONS (1.4%)
China Telecom (Hong Kong), Ltd. ADR#** 14,300 889,281
-----------
TOTAL CHINA 889,281
-----------
FINLAND (2.5%)
TELECOMMUNICATIONS (2.5%)
Nokia Corp. ADR 10,700 892,112
Sonera Group Oyj 30,700 744,178
-----------
TOTAL FINLAND 1,636,290
-----------
GERMANY (2.1%)
TELECOMMUNICATIONS (2.1%)
Mannesmann AG 6,969 1,053,333
Telegate AG** 9,200 296,376
-----------
TOTAL GERMANY 1,349,709
-----------
GREECE (1.2%)
TELECOMMUNICATIONS (1.2%)
Hellenic Telecommunications
Organization S.A. ADR#** 73,760 760,650
-----------
TOTAL GREECE 760,650
-----------
See Accompanying Notes to Financial Statements
37
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
INDIA (2.1%)
TELECOMMUNICATIONS (2.1%)
Mahanagar Telephone Nigam, Ltd. 144A GDR** 48,000 $ 522,000
Videsh Sanchar Nigam, Ltd. GDR# 61,100 864,565
-----------
TOTAL INDIA 1,386,565
-----------
ITALY (0.4%)
TELECOMMUNICATIONS (0.4%)
Telecom Italia S.p.A. 27,024 272,018
-----------
TOTAL ITALY 272,018
-----------
JAPAN (20.1%)
BUSINESS & PUBLIC SERVICES (3.0%)
Fuji Soft ABC, Inc. 24,470 1,696,181
Trans Cosmos, Inc. 2,700 274,576
-----------
1,970,757
-----------
ELECTRONIC COMP. & INSTRUMENTS (2.8%)
Internet Intitiative Japan, Inc. ADR** 10,000 516,250
Megachips Corp. 3,000 413,164
Sony Corp. ADR 7,200 916,650
-----------
1,846,064
-----------
TELECOMMUNICATIONS (14.3%)
Japan Telecom Co., Ltd. 35 692,712
KDD Corp. 20,300 1,583,021
Nippon Telegraph & Telephone 248 2,782,156
NTT Data Corp. 236 2,281,616
NTT Mobile Communication Network, Inc.# 55 912,975
NTT Mobile Communication Network, Inc. - New 64 1,056,533
-----------
9,309,013
-----------
TOTAL JAPAN 13,125,834
-----------
NETHERLANDS (1.4%)
ELECTRICAL & ELECTRONICS (0.5%)
Equant N.V.** 3,484 308,190
-----------
TELECOMMUNICATIONS (0.9%)
Versatel Telecom International N.V.** 44,100 605,532
-----------
TOTAL NETHERLANDS 913,722
-----------
See Accompanying Notes to Financial Statements
38
<PAGE>
Warburg Pincus Global Telecommunications Fund
Schedule of Investments (cont'd)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
PORTUGAL (3.4%)
TELECOMMUNICATIONS (3.4%)
Portugal Telecom S.A. 6,815 $ 284,975
Telecel-Comunicacoes Pessoais S.A. 14,751 1,903,918
-----------
TOTAL PORTUGAL 2,188,893
-----------
SOUTH KOREA (0.7%)
TELECOMMUNICATIONS (0.7%)
SK Telecom Co., Ltd. ADR** 38,310 433,382
-----------
TOTAL SOUTH KOREA 433,382
-----------
SPAIN (1.3%)
BROADCASTING & PUBLISHING (0.7%)
Sogecable S.A.** 17,000 462,900
-----------
TELECOMMUNICATIONS (0.6%)
Telefonica S.A. ADR 8,100 390,319
-----------
TOTAL SPAIN 853,219
-----------
SWEDEN (1.0%)
TELECOMMUNICATIONS (1.0%)
Telefonaktiebolaget L.M. Ericsson ADR 5,054 164,571
Telefonaktiebolaget L.M. Ericsson Cl. B 14,550 468,629
-----------
TOTAL SWEDEN 633,200
-----------
UNITED KINGDOM (8.0%)
ELECTRONIC COMP. & INSTRUMENTS (0.8%)
Arm Holdings plc** 35,744 505,217
-----------
TELECOMMUNICATIONS (7.2%)
British Telecommunications plc 70,700 1,083,424
COLT Telecom Group plc ADR** 15,963 1,398,758
Filtronic plc 26,000 346,170
Orange plc** 73,885 1,246,286
Vodafone AirTouch plc 18,026 363,492
Vodafone AirTouch plc ADR 1,467 294,225
-----------
4,732,355
-----------
TOTAL UNITED KINGDOM 5,237,572
-----------
See Accompanying Notes to Financial Statements
39
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
UNITED STATES (45.5%)
AEROSPACE & MILITARY TECHNOLOGY (1.2%)
General Motors Corp. Cl. H** 4,543 $ 233,964
Loral Space & Communications, Ltd.** 30,260 556,027
-----------
789,991
-----------
BROADCASTING & PUBLISHING (0.9%)
TCI Satellite Entertainment, Inc.** 57,615 205,253
Time Warner, Inc. 6,197 367,560
-----------
572,813
-----------
BUSINESS & PUBLIC SERVICES (1.1%)
Microsoft Corporation** 7,500 694,219
-----------
DATA PROCESSING & REPRODUCTION (2.1%)
Sun Microsystems, Inc.** 17,500 1,391,250
-----------
ELECTRONIC COMP. & INSTRUMENTS (7.6%)
America Online** 6,204 566,503
Cisco Systems** 31,894 2,162,812
Go2Net, Inc.#** 11,700 760,500
JDS Uniphase Corp.** 8,380 888,804
Network Appliance, Inc.** 2,640 173,415
Yahoo, Inc.** 2,566 378,485
-----------
4,930,519
-----------
TELECOMMUNICATIONS (32.6%)
Allegiance Telecom, Inc.** 16,500 992,062
American Tower Corp., Cl. A** 19,500 443,625
AT&T Corp. - Liberty Media Group Cl. A** 17,600 563,200
Bell Atlantic Corp. 16,500 1,010,625
BellSouth Corp. 18,800 850,700
Broadcom Corp. Cl. A** 13,712 1,765,420
Cincinnati Bell, Inc. 30,300 560,550
Comcast Corp. - Special Cl. A** 20,804 678,730
Cox Communications, Inc.** 15,400 572,688
CTC Communications Corp.** 33,000 497,062
EchoStar Communications Corp.** 4,800 401,400
Global Crossing, Ltd.#** 11,327 293,086
Lucent Technologies 17,146 1,098,416
MCI WorldCom, Inc.** 21,495 1,628,246
MediaOne Group, Inc.** 2,372 155,959
Motorola, Inc. 7,300 673,425
Nextel Communications, Inc. Cl. A** 9,000 520,313
NEXTLINK Communications, Inc.** 10,000 503,750
See Accompanying Notes to Financial Statements
40
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- -------
COMMON STOCKS (CONT'D)
UNITED STATES (CONT'D)
TELECOMMUNICATIONS (cont'd)
Pacific Gateway Exchange, Inc.#** 30,400 $ 619,400
PMC-Sierra, Inc.** 16,200 1,506,600
QUALCOMM, Inc.** 4,000 768,750
Qwest Communications International, Inc.** 10,000 287,500
SBC Communications, Inc. 10,121 485,808
Sprint Corp. (FON Group) 21,000 931,875
Sprint Corp. (PCS Group)** 10,708 639,803
Teligent, Inc. Cl. A** 10,792 680,571
Time Warner Telecom, Inc. Cl. A** 16,000 432,000
Viatel, Inc.** 21,600 835,650
WinStar Communications, Inc.** 18,000 914,625
-----------
21,311,839
-----------
TOTAL UNITED STATES 29,690,631
-----------
TOTAL COMMON STOCKS (Cost $55,305,677) $60,408,479
-----------
PAR
(000)
------
SHORT-TERM INVESTMENT (8.1%)
BBH Grand Cayman U.S. Dollar Time Deposit
4.500% 09/01/99 $5,250 $ 5,250,000
-----------
(Cost $5,250,000)
TOTAL INVESTMENTS (100.8%) (Cost $60,555,677*) $65,658,479
LIABILITIES IN EXCESS OF OTHER ASSETS (0.8%) (492,988)
-----------
TOTAL NET ASSETS (100.0%) $65,165,491
===========
* Cost for Federal income tax purposes at August 31, 1999 is $60,556,454. The
gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 6,641,183
Gross Depreciation (1,539,158)
-----------
Net Appreciation $ 5,102,025
===========
** Non-income producing securities.
# Security or a portion thereof is out on loan.
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
GDR = Global Depository Receipts
See Accompanying Notes to Financial Statements
41
<PAGE>
WARBURG PINCUS FUND
STATEMENTS OF ASSETS AND LIABILITIES
August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
INTERNATIONAL EUROPEAN EMERGING TELECOMMUNICATIONS
GROWTH FUND EQUITY FUN MARKETS II FUND FUND
------------- ----------- --------------- ------------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value
(cost - $614,023,532,
$23,555,067, $6,510,414
and $60,555,677 , respectively) $686,338,443 $24,504,357 $ 6,961,904 $65,658,479
Collateral received for securities
loaned 91,414,446 2,260,671 171,200 4,614,130
Receivable for investments sold 3,649,284 255,921 -- --
Receivable for Fund shares sold 62,694 378,750 -- 278,772
Receivable from investment advisor -- 33,778 53,845 --
Receivable for foreign tax reclaims 344,400 22,197 -- 15,964
Dividends and interest receivable 1,079,063 106,798 54,827 53,732
Prepaid expenses and other assets 96,863 45,669 40,314 --
------------ ----------- ------------ -----------
Total Assets 782,985,193 27,608,141 7,282,090 70,621,077
------------ ----------- ------------ -----------
Liabilities
Payable on securities loaned 91,414,446 2,260,671 171,200 4,614,130
Payable for investments purchased 5,506,983 619,771 -- 491,198
Payable for Fund shares repurchased 790,421 11,748 2,170 127,588
Overdraft liability -- -- 141,390 71,594
Advisory fee payable 437,570 -- 1,432 --
Distribution fee payable
(Common shares) 13,302 -- 913 --
Accrued expenses payable 928,901 59,507 40,246 151,076
------------ ----------- ------------ -----------
Total Liabilities 99,091,623 2,951,697 357,351 5,455,586
------------ ----------- ------------ -----------
NET ASSETS
Capital stock, $0.001 par value 29,144 2,520 61,706 1,580
Paid-in capital 531,100,512 25,305,835 28,703,213 58,048,744
Undistributed net investment
income/(loss) 2,441,057 135,265 -- --
Accumulated net realized gain/(loss)
from investments, securities sold
short, futures and foreign currency
related transactions, if any 78,004,899 (1,740,365) (22,282,438) 2,012,194
Net unrealized appreciation on
investments and other, if any 72,317,958 953,189 442,258 5,102,973
------------ ----------- ------------ -----------
Net Assets $683,893,570 $24,656,444 $ 6,924,739 $65,165,491
============ =========== ============ ===========
INSTITUTIONAL SHARES
Net assets $675,117,900 $ 98,055 $ 5,972,215
------------ ----------- ------------
Shares outstanding 28,766,447 10,003 401,418
------------ ----------- ------------
Net asset value, offering price and
redemption price per share $ 23.47 $ 9.80 $ 14.88
============ =========== ============
COMMON SHARES
Net assets $ 8,775,670 $24,558,389 $ 952,524 $65,165,491
------------ ----------- ------------ -----------
Shares outstanding 377,380 2,509,751 63,899 1,580,761
------------ ----------- ------------ -----------
Net asset value, offering price and
redemption price per share $ 23.25 $ 9.79 $ 14.91 $ 41.22
============ =========== ============ ===========
</TABLE>
See Accompanying Notes to Financial Statements
42
<PAGE>
WARBURG PINCUS FUNDS
STATEMENTS OF OPERATIONS
For the year ended August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
INTERNATIONAL EUROPEAN EMERGING TELECOMMUNICATIONS
GROWTH FUND EQUITY FUN MARKETS II FUND FUND
------------- ----------- --------------- ------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 11,323,865 $ 402,172 $ 362,796 $ 126,076
Interest 1,466,580 48,985 68,974 126,868
Securities lending 423,412 4,484 13,354 11,271
Foreign taxes withheld (754,665) (20,970) (43,521) (10,016)
------------ ----------- ------------ -----------
Total Investment Income 12,459,192 434,671 401,603 254,199
------------ ----------- ------------ -----------
EXPENSES
INVESTMENT ADVISORY FEES 5,508,687 152,482 188,384 194,860
Administration fees 1,001,399 18,085 28,187 34,101
Custodian fees 804,105 78,560 138,105 63,707
Audit fees 59,220 10,196 1,659 10,419
Printing fees 422,209 21,279 4,734 16,060
Registration fees 46,928 27,345 19,604 49,352
Legal fees 162,937 28,021 2,582 14,318
Transfer agent fees 258,895 8,984 3,198 39,476
Insurance expense 77,528 -- 988 1,011
Directors fees 12,541 11,829 10,916 13,001
Organization expense -- -- -- --
Distribution fees 47,318 37,979 2,146 48,715
Miscellaneous fees 25,541 5,803 3,866 5,139
------------ ----------- ------------ -----------
8,427,308 400,563 404,369 490,159
Less fees waived and reimbursed (70,067) (179,633) (123,904) (168,639)
------------ ----------- ------------ -----------
Total Expenses 8,357,241 220,930 280,465 321,520
------------ ----------- ------------ -----------
Net Investment Income/(Loss) 4,101,951 213,741 121,138 (67,321)
------------ ----------- ------------ ------------
Realized and Unrealized Gain/
(Loss)on Investments and
Foreign Currency Transactions
Net realized gain/(loss) from:
Security transactions 92,124,562 (1,734,841) (3,565,121) 2,165,040
Foreign exchange transactions (4,942,605) (84,000) (258,257) (85,679)
------------ ----------- ------------ -----------
87,181,957 (1,818,841) (3,823,378) 2,079,361
------------ ----------- ------------ -----------
Net change in unrealized appreciation/
(depreciation):
Investments 1,243,617 949,290 11,209,302 5,118,086
Translation of assets and
liabilities in foreign currencies (131,019) 3,899 (6,645) (426)
------------ ----------- ------------ -----------
1,112,598 953,189 11,202,657 5,117,660
------------ ----------- ------------ -----------
Net Gain/(Loss) On Investments And
Foreign Currency Transactions 88,294,555 (865,652) 7,379,279 7,197,021
------------ ----------- ------------ -----------
Net Increase/(Decrease) In Net Assets
Resulting From Operations $92,396,506 $ (651,911) $ 7,500,417 $ 7,129,700
============ =========== ============ ===========
<FN>
- ---------------------
*Inception date January 28, 1999.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements
43
<PAGE>
WARBURG PINCUS FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EUROPEAN
INTERNATIONAL GROWTH FUND EQUITY FUND
-------------------------------- ------------------
FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED JANUARY 28, 1999*
AUGUST 31, 1999 AUGUST 31, 1998 TO AUGUST 31, 1999
--------------- --------------- ------------------
<S> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 4,101,951 $ 4,459,649 $ 213,741
Net gain/(loss) on investments and
foreign currency transactions 88,294,555 78,134,835 (865,652)
------------ ------------ -----------
Net increase/(decrease) in net assets
resulting from operations 92,396,506 82,594,484 (651,911)
------------ ------------ -----------
Dividends and Distributions to
shareholders:
From net investment income:
Institutional shares (7,632,495) -- --
Common shares (344,430) -- --
From net realized capital gains:
INSTITUTIONAL SHARES (54,241,925) (73,424,625) --
Common shares (2,569,737) (167,102) --
From capital:
Institutional shares -- -- --
Common shares -- -- --
------------ ------------ -----------
Total distributions to shareholders (64,788,587) (73,591,727) --
------------ ------------ -----------
Net capital share transactions 31,183,186 47,441,934 25,308,355
------------ ------------ -----------
Total increase/(decrease)
in net assets 58,791,105 56,444,691 24,656,444
Net Assets:
Beginning of period 625,102,465 568,657,774 --
------------ ------------ -----------
End of period $683,893,570 $625,102,465 $24,656,444
============ ============ ===========
* Inception Date.
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
EMERGING MARKETS II FUND GLOBAL TELECOMMUNICATIONS FUND
----------------------------------- ---------------------------------
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED
AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1999 AUGUST 31, 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 121,138 $ 374,101 $ (67,321) $ (298)
Net gain/(loss) on investments and
foreign currency transactions 7,379,279 (25,007,447) 7,197,021 142,046
----------- ------------ ------------ ---------
Net increase/(decrease) in net assets
resulting from operations 7,500,417 (24,633,346) 7,129,700 141,748
----------- ------------ ------------ ---------
Dividends and Distributions to
shareholders:
From net investment income:
Institutional shares -- (732,736) -- --
Common shares -- (83) -- (138)
From net realized capital gains:
Institutional shares -- (649,941) -- --
Common shares -- (115) (179,290) (37,787)
From capital:
Institutional shares (312,194) (3,255,728) -- --
Common shares (12,381) (580) -- --
----------- ------------ ------------ ---------
Total distributions to shareholders (324,575) (4,639,183) (179,290) (37,925)
----------- ------------ ------------ ---------
Net capital share transactions (25,105,168) (28,889,378) 57,496,988 44,798
----------- ------------ ------------ ---------
Total increase/(decrease)
in net assets (17,929,326) (58,161,907) 64,447,398 148,621
Net Assets:
Beginning of period 24,854,065 83,015,972 718,093 569,472
----------- ------------ ------------ ---------
End of period $ 6,924,739 $ 24,854,065 $ 65,165,491 $ 718,093
=========== ============ ============ =========
* Inception Date.
</TABLE>
See Accompanying Notes to Financial Statements
45
<PAGE>
WARBURG PINCUS FUNDS
INTERNATIONAL GROWTH FUND FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL COMMON
------------------------------------------------ -----------------------------------
FOR THE YEAR ENDED FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, AUGUST 31, NOVEMBER 1, 1996*
------------------------------------------------ --------------------- to August 31,
1999 1998 1997 1996 1995 1999 1998 1997
-------- -------- -------- -------- -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 22.70 $ 22.22 $ 19.41 $ 18.24 $ 20.73 $ 22.56 $22.17 $19.67
-------- -------- -------- -------- -------- ------- ------ --------
Income from investment operations
Net investment income 0.14 0.15 0.18 0.19 0.06 0.12(DAGGER) 0.03 0.36
Net gain/(loss) on investments and
foreign currency transactions
(both realized and unrealized) 2.90 3.26 2.89 1.05 (1.75) 2.83 3.29 2.40
-------- -------- -------- -------- -------- ------- ------ --------
Total from investment operations 3.04 3.41 3.07 1.24 (1.69) 2.95 3.32 2.76
-------- -------- -------- -------- -------- ------- ------ --------
Less Distributions
Dividends from net investment income (0.28) -- (0.26) (0.07) -- (0.27) -- (0.26)
Distributions from capital gains (1.99) (2.93) -- -- (0.80) (1.99) (2.93) --
-------- -------- -------- -------- -------- ------- ------ --------
Total distributions (2.27) (2.93) (0.26) (0.07) (0.80) (2.26) (2.93) (0.26)
-------- -------- -------- -------- -------- ------- ------ --------
Net asset value, end of period $ 23.47 $ 22.70 $ 22.22 $ 19.41 $ 18.24 $ 23.25 $22.56 $22.17
======== ======== ======== ======== ======== ======= ====== ========
Total return 13.88% 16.74% 15.93% 6.81%(d) 8.06)%(d) 13.52% 16.33% 14.14%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $675,118 $623,482 $568,510 $682,271 $773,255 $ 8,776 $1,620 $147
Ratio of expenses to average net assets 1.21%(a) 1.14%(a) 1.16%(a) 1.19%(a) 1.25%(a) 1.50%(a) 1.40%(a) 1.43%(a)(b)
Ratio of net investment income (loss)
to average net assets 0.60% 0.72% 0.71% 0.84% 0.35% 0.31% 0.58% 1.15%(b)
Fund turnover rate 182% 141% 126% 86% 78% 182% 141% 126%(c)
<FN>
- --------------------
(a) Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Institutional Class would
have been 1.22%, 1.23%, 1.25%, 1.22% and 1.26% for the years ended August
31, 1999, 1998, 1997, 1996 and 1995, respectively.Without the voluntary
waiver of advisory fees and administration fees, the ratios of expenses to
average net assets for the Common Class would have been 1.51% and 1.48% for
the years ended August 31, 1999 and 1998, respectively, and 1.53% annualized
for the period ended August 31, 1997.
(b) Annualized.
(c) Not annualized.
(d) Redemption fees not reflected in total return.
* Inception Date.
(DAGGER)PER SHARE INFORMATION IS CALCULATED USING THE AVERAGE SHARE OUTSTANDING
METHOD.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements
46-47
<PAGE>
WARBURG PINCUS FUNDS
EUROPEAN EQUITY FUND FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL COMMON
------------------ -------------------
FOR THE PERIOD FOR THE PERIOD
JANUARY 28, 1999* JANUARY 28, 1999*
TO AUGUST 31, 1999 TO AUGUST 31, 1999
------------------ -------------------
<S> <C> <C>
Net asset value, beginning of period $10.00 $ 10.00
------ -------
Income from investment operations
Net investment income 0.09 0.08
Net loss on investments and
foreign currency transactions
(both realized and unrealized) (0.29) (0.29)
------ -------
Total from investment operations (0.20) (0.21)
------ -------
Less Distributions
Dividends from net investment income -- --
Distributions from capital gains -- --
------ -------
Total distributions -- --
------ -------
Net asset value, end of period $ 9.80 $ 9.79
====== =======
Total return (2.00)%(c) (2.10)%(c)
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $98 $24,588
Ratio of expenses to average net assets 1.16%(a)(b) 1.46%(a)(b)
Ratio of net investment income (loss)
to average net assets 1.67%(b) 1.41%(b)
Fund turnover rate 161%(c) 161%(c)
<FN>
- -------------------
(a Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Institutional Class would
have been 2.29% annualized for the period ended August 31, 1999. Without the
voluntary waiver of advisory fees and administration fees, the ratios of
expenses to average net assets for the Common Class would have been 2.64%
annualized for the period ended August 31, 1999.
(b) Annualized.
(c) Not Annualized.
* Inception Date.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
48
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
49
<PAGE>
WARBURG PINCUS FUNDS
EMERGING MARKETS II FUND FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL COMMON
------------------------------------------------ -----------------------------------
FOR THE YEAR ENDED FOR THE PERIOD
FOR THE YEAR ENDED AUGUST 31, AUGUST 31, NOVEMBER 1, 1996*
------------------------------------------------ --------------------- to August 31,
1999 1998 1997 1996 1995 1999 1998 1997
-------- -------- -------- -------- -------- ------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.44 $ 19.64 $ 18.20 $ 17.67 $ 24.58 $10.48 $19.60 $18.08
------- ------- ------- ------- ------- ------- ------ --------
Income from investment operations
Net investment income 0.08(DAGGER) 0.12 0.21 0.10 0.02 0.04 0.03 0.18
Net gain/(loss) on investments and
foreign currency transactions
(both realized and unrealized) 4.57 (8.08) 1.30 0.48 (5.94) 4.58 (7.99) 1.40
------- ------- ------- ------- ------- ------- ------ --------
Total from investment operations 4.65 (7.96) 1.51 0.58 (5.92) 4.62 (7.96) 1.58
------- ------- ------- ------- ------- ------- ------ --------
Less Distributions
Dividends from net investment income -- (0.20) (0.07) (0.05) (0.07) -- (0.12) (0.06)
DISTRIBUTIONS FROM CAPITAL GAINS -- (0.17) -- -- (0.92) -- (0.17) --
Return of Capital (0.21) (0.87) -- -- -- (0.19) (0.87) --
------- ------- ------- ------- ------- ------- ------ --------
Total distributions (0.21) (1.24) (0.07) (0.05) (0.99) (0.19) (1.16) (0.06)
------- ------- ------- ------- ------- ------- ------ --------
Net asset value, end of period $ 14.88 $ 10.44 $ 19.64 $ 18.20 $ 17.67 $14.91 $10.48 $19.60
======= ======= ======= ======= ======= ====== ====== ======
Total return 45.12% (42.96)% 8.31% 3.33%(d)(24.42)%(d) 44.67% (42.86)% 8.76%(c)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $ 5,972 $24,217 $83,012 $114,691 $128,323 $ 953 $ 636 $ 4
Ratio of expenses to average net assets 1.48%(a) 1.50%(a) 1.49%(a) 1.49%(a) 1.50%(a) 1.75%(a) 1.75%(a) 1.75%(a)(b)
Ratio of net investment income (loss)
to average net assets 0.66% 0.61% 0.99% 0.63% 0.02% 0.28% 1.08% 0.88%(b)
Fund turnover rate 230% 179% 147% 79% 79% 230% 179% 147%(c)
<FN>
- --------------------
(a) Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Institutional Class would
have been 2.13%, 2.01%, 1.63%, 1.62%, and 1.61% for the three years ended
August 31, 1999, 1998, 1997, 1996 and 1995, respectively. Without the
voluntary waiver of advisory fees and administration fees, the ratios of
expenses to average net assets for the Common Class would have been 2.42%
and 2.33% for the years ended August 31, 1999 and 1998, respectively, and
1.88% annualized for the period ended August 31, 1997.
(b) Annualized.
(c) Not annualized.
(d) Redemption fees not reflected in total return.
* INCEPTION DATE.
(DAGGER)Per share information is calculated using the average share outstanding
method.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
50-51
<PAGE>
WARBURG PINCUS FUNDS
GLOBAL COMMUNICATIONS FUND FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON
----------------------------------------
FOR THE YEAR ENDED FOR THE PERIOD
AUGUST 31, DECEMBER 4, 1996*
--------------------- TO AUGUST 31,
1999 1998 1997
------- ------ -----------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 20.54 $17.30 $15.00
------- ------ ------
Income from investment operations
Net investment income/(loss) (0.04) (0.01) 0.02
Net gain on investments and
foreign currency transactions
(both realized and unrealized) 23.56 4.29 2.28
------- ------ ------
Total from investment operations 23.52 4.28 2.30
------- ------ ------
Less Distributions
Dividends from net investment income -- -- --
Distributions from capital gains (2.84) (1.04) --
------- ------ ------
Total distributions (2.84) (1.04) --
------- ------ ------
Net asset value, end of period $ 41.22 $20.54 $17.30
======= ====== ======
Total return 120.73% 25.38% 15.33%(c)
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $65,165 $ 718 $ 569
Ratio of expenses to average net assets 1.65%(a) 1.65%(a) 1.65%(a)(b)
Ratio of net investment income (loss)
to average net assets (0.35)% (0.03)% 0.16%(b)
Fund turnover rate 203% 169% 43%(c)
<FN>
(a) Without the voluntary waiver of advisory fees and administration fees, the
ratios of expenses to average net assets for the Common Class would have
been 2.52% and 6.86% for the years ended August 31, 1999 and 1998 and 8.38%
annualized for the period ended August 31, 1997.
(b) Annualized.
(c) Not Annualized.
* Inception Date.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
52
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Funds covered in this report are comprised of Warburg,
Pincus International Growth Fund, Inc. ("International"), Warburg, Pincus
Emerging Markets II Fund, Inc. ("Emerging Markets"), Warburg, Pincus European
Equity Funds, Inc. ("European Equity"), Warburg, Pincus Global
Telecommunications Funds, Inc. ("Global Telecommunications"), (each, a "Fund"
and collectively, the "Funds"), which are registered under the Investment
Company Act of 1940 , as amended (the "1940 Act"), as non-diversified (other
than European Equity which is diversified), open-end management investment
companies. Each Fund is authorized to offer three classes of shares: Common,
Advisor and Institutional, although only Common shares and Institutional shares
of each Fund are currently offered. Common shares for each Fund bear expenses
paid pursuant to a shareholder servicing and distribution at an annual rate not
to exceed .25% of the average daily net asset value of the Fund's outstanding
Common shares. In addition, the Common Shares bear a co-administrative fee.
On October 23, 1998, pursuant to an Agreement and Plan of Reorganization,
each Fund (other than European Equity) acquired all of the assets and
liabilities of a corresponding investment series of The RBB Fund, Inc. (each an
"Acquired Fund" and collectively, the "Acquired Funds"). The acquisitions were
accomplished by a tax-free exchange of the following shares of each Fund (other
than European Equity), in each case for the same amount of shares of the
corresponding class of the applicable Acquired Fund. Shares were reissued to
shareholders at the time of the reorganization.
FUND COMMON SHARES INSTITUTIONAL SHARES
-------------------------- ------------- --------------------
International 145,719 27,622,659
Emerging Markets 62,181 1,508,675
Global Telecommunications 40,351 --
The net assets of each Fund (other than European Equity) directly after the
reorganization were the same as the corresponding Acquired Fund as described in
the table below. Each Fund (other than European Equity) assumed the prior
operating history of the corresponding Acquired Fund.
UNREALIZED
FUND NET ASSETS APPRECIATION/(DEPRECIATION)*
------ ------------ ----------------------------
International $615,300,445 $46,755,858
Emerging Markets 17,766,403 (4,401,793)
Global Telecommunications 943,831 112,975
Certain of the Funds are permitted to engage in the investment strategies
described in the Notes to Financial Statements. The Funds are not obligated to
pursue any of the following strategies and do not represent that these
techniques are available now or will be available at any time in the future.
- --------------------
* The amount of each Fund's net assets includes the amount of unrealized
appreciation/(depreciation) listed above.
53
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Please refer to each Fund's prospectus(es) and statements of additional
information for a description of its investment strategies.
A) SECURITY VALUATION -- The net asset value of each Fund is
determined daily as of the close of regular trading on The New York Stock
Exchange Inc. Each Fund's securities for which market quotations are
readily available are valued at market value, which is currently determined
using the last reported sales price. If no sales are reported, as in the
case of some securities traded over-the-counter, the securities are valued
at the mean between the last reported bid and asked prices. All other
securities and assets are valued as determined in good faith by the Fund's
Board of Directors. Short-term obligations with a remaining maturity of 60
days or less are valued at amortized cost, which approximates market value.
B) FOREIGN CURRENCY TRANSACTIONS -- Transactions denominated in
foreign currencies are recorded in each Fund's records at the current
prevailing exchange rates. Asset and liability accounts that are
denominated in a foreign currency are adjusted daily to reflect current
exchange rates. Transaction gains or losses resulting from changes in
exchange rates during the reporting period or upon settlement of the
foreign currency transaction are reported in operations for the current
period. It is not practical to isolate that portion of both realized and
unrealized gains and losses on investments in the statement of operations
that result from fluctuations in foreign currency exchange rates. Each Fund
reports certain foreign currency related transactions as components of
realized gains for financial reporting purposes, whereas such components
are treated as ordinary income (loss) for Federal income tax purposes.
C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security
transactions are accounted for on the trade date. The cost of investments
sold is determined by use of the specific identification method for both
financial reporting and income tax purposes. Interest income is recorded on
the accrual basis. Dividends are recorded on the ex-dividend date. Certain
expenses are class specific expenses and vary by class. Expenses not
directly attributable to a specific Fund or class are allocated based on
relative net assets of each Fund and class, respectively.
54
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Each 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 expense.
International, Emerging Markets, European Equity, Global
Telecommunications,will distribute substantially all of its net realized
capital gains and all net investment income, if any, to its shareholders at
least annually.
The character of distributions made during the year for net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes due to generally accepted
accounting principles (GAAP) and tax differences in the character of income
and expense recognition. These differences are primarily due to differing
treatments for net operating losses, paydowns on mortgage-backed
securities, passive foreign investment companies, and forward foreign
currency contracts. To the extent these differences are permanent in
nature, such amounts are reclassified within capital accounts based on
their U.S. federal tax-basis treatment. Temporary differences do not
require reclassification. At August 31, 1999, International, European
Equity, Emerging Markets, Global Telecommunications, $9,529,177, $(78,476),
$(42,334), and $67,581, respectively, from accumulated net realized
gain/(loss) to undistributed net investment income. Emerging Markets
reclassified, $(202,844), from accumulated net investment income/(loss) to
capital contributions. Emerging Markets reclassified, $(5,371,360), from
accumulated net realized gain/(loss) to capital contriutions.
E) FEDERAL INCOME TAXES -- No provision is made for Federal taxes
as it is each Fund's intention to qualify for and elect the tax treatment
applicable to regulated investment companies under the Internal Revenue
Code of 1986, as amended, and make the requisite distributions to its
shareholders which will be sufficient to relieve it from Federal income and
excise taxes.
F) USE OF ESTIMATES -- The preparation of financial statements in
conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
55
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G) REPURCHASE AGREEMENTS -- Money market instruments may be
purchased from banks and non-bank dealers subject to the seller's agreement
to repurchase them at an agreed upon date and price. Collateral for
repurchase agreements may have longer maturities than the maximum
permissible remaining maturity of portfolio investments. The seller will be
required on a daily basis to maintain the value of the securities subject
to the agreement at not less than the repurchase price. The agreements are
conditional upon the collateral being deposited under the Federal Reserve
book-entry system or held in a separate account by each Fund's custodian or
an authorized securities depository.
H) FUTURES TRANSACTIONS -- A Fund invests in futures contracts for
the purpose of hedging its existing portfolio securities, or securities
that the Fund intends to purchase, against fluctuations in fair value
caused by changes in prevailing market interest rates or securities prices,
or for other purposes. Certain Fund's may enter into futures contracts
subject to certain limitations. Upon entering into a futures contract, each
Fund is required to deposit cash or pledge U.S. Government securities of an
initial margin. Subsequent payments, which are dependent on the daily
fluctuations in the value of the underlying instrument, are made or
received by the Fund each day (daily variations margin) and are recorded as
unrealized gains or losses until the contracts are closed. When the
contracts are closed, the Fund records a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction
and the Fund's basis in the contracts. Risks of entering into futures
contracts include the possibility that there will be an imperfect price
correlation between the futures contracts and the underlying securities.
Second, it is possible that a lack of liquidity for futures contracts could
exist in the secondary market, resulting in an inability to close a futures
position prior to its maturity date. Third, the purchase of a futures
contract involves the risk that a Fund could lose more than the original
margin deposit required to initiate a futures transaction.
56
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I) OPTION TRANSACTIONS -- When a Fund writes or purchases a call
or a put option, an amount equal to the premium received or paid by the
Fund is recorded as a liability or asset, the value of which is
marked-to-market daily to reflect the current market value of the option.
When the option expires, the Fund realizes a gain or loss equal to the
amount of the premium received or paid. When the Fund exercises an option
or enters into a closing transaction by purchasing or selling an offsetting
option, it realizes a gain or loss without regard to any unrealized gain or
loss to underlying security. 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.
J) TBA PURCHASE COMMITMENTS -- The Funds may enter into "TBA" (to
be announced) purchases commitments to purchase securities for a fixed
price at a future date, typically not exceeding 45 days. TBA purchase
commitments may be considered securities in themselves, and involve a risk
of loss if the value of the security to be purchased declines prior to
settlement date. This risk is in addition to the risk of decline in each
Fund's other assets. Unsettled TBA purchase commitments are valued at the
current market value of the underlying securities, according to the
procedures described under "Security Valuation" above.
K) SECURITIES LENDING -- Loans of securities are required at all
times to be secured by collateral at least equal to 102% of the market
value of domestic securities on loan including any accrued interest thereon
and 105% of the market value of foreign securities on loan including any
accrued interest thereon. Cash collateral received by the Funds in
connection with securities lending activity is invested in the Boston
Global Investment Trust. However, in the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. The market value of
securities on loan to brokers and the value of collateral held by each Fund
with respect to such loans (including right to draw on letter of credit) at
August 31, 1999 is as follows:
MARKETS VALUE OF VALUE OF
FUND SECURITIES LOANED COLLATERAL RECORDED
-------------------------- ----------------- -------------------
International $86,757,007 $91,414,446
European Equity 2,145,915 2,260,671
Emerging Markets 165,305 171,200
Global Telecommunications 4,436,746 4,614,130
57
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
L) SHORT SALES -- When a Fund's investment adviser believes that a
security is overvalued, it may sell the security short by borrowing the
same security from a broker or other institution and selling the security.
A Fund will incur a loss as a result of the short sale if the price of the
borrowed security increases between the date of the short sale and the date
on which the Fund replaces such security. A Fund will realize a gain if
there is a decline in price of the security between those dates, which
decline exceeds the cost of the borrowing the security and other
transaction costs. There can be no assurance that a Fund will be able to
close out a short position at any particular time or at an acceptable
price. Although a Fund's gain is limited to the amount at which it has sold
a security short, its potential loss is limited only by the maximum
attainable price of the security less the price at which the security was
sold. Until a Fund replaces a borrowed security, it will maintain at all
times cash or liquid securities in an amount which, when added to any
amount deposited with a broker as collateral will at least equal the
current market value of the security sold short. Depending on arrangements
made with brokers, a Fund may not receive any payments (including interest)
on collateral deposited with them.
M) OTHER -- Securities denominated in currencies other than U.S.
dollars are subject to changes in value due to fluctuations in exchange
rates.
Some countries in which the Funds invest require governmental
approval for the repatriation of investment income, capital or the proceeds
of sales of securities by foreign investors. In addition, if there is a
deterioration in a country's balance of payments or for other reasons, a
country may impose temporary restrictions on foreign capital remittances
abroad.
The securities exchanges of certain foreign markets are
substantially smaller, less liquid and more volatile than the major
securities markets in the United States. Consequently, acquisition and
disposition of securities by each Fund may be inhibited. In addition, a
significant proportion of the aggregate market value of equity securities
listed on the major securities exchanges in emerging markets are held by a
smaller number of investors. This may limit the number of shares available
for acquisition or disposition by a Fund.
58
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Lower-rated debt securities (commonly known as "junk bonds")
possess speculative characteristics and are subject to greater market
fluctuations and risk of lost income and principal than higher-rated debt
securities for a variety of reasons. Also, during an economic downturn or
substantial period of rising interest rates, highly leveraged issuers may
experience financial stress which would adversely affect their ability to
service their principal and interest payment obligations, to meet projected
business goals and to obtain additional financing.
In addition, periods of economic uncertainty and change can be
expected to result in increased volatility of market prices of lower-rated
debt securities and (to the extent a fund invest in junk bonds) the fund's
net asset value.
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Effective July 6, 1999, the Funds' investment adviser, Credit Suisse Asset
Management became Credit Suisse Asset Management, LLC. In addition, in
connection with the closing of the acquisition of Warburg Pincus Asset
Management, Inc. by Credit Suisse Group, Warburg Pincus Asset Management, Inc.
was merged into Credit Suisse Asset Management, LLC. Credit Suisse Asset
Management had previously changed its name from BEA Associates effective January
1, 1999.
PUrsuant to Investment Advisory Agreements, Credit Suisse ASSET Management,
LLC ("CSAM") an indirect, wholly-owned subsidiary of Credit Suisse Group, serves
as investment advisor for each of the four Funds described herein.
For its advisory services, CSAM is entitled to receive the following fees,
computed daily and payable monthly on each Fund's average daily net assets:
FUND ANNUAL RATE
- -------------------------- ---------------------------------
International 0.80% of average daily net assets
European Equity 1.00% of average daily net assets
Emerging Markets 1.00% of average daily net assets
Global Telecommunications 1.00% of average daily net assets
59
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
CSAM may, at its discretion, voluntarily waive all or any portion of its
advisory fee for any of the Funds. For the year ended August 31, 1999 advisory
fees and waivers for each of the four investment Funds were as follows:
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
------ ------------ --------- ------------
International $5,508,687 -- $5,508,687
European Equity 152,482 (152,482) --
Emerging Markets 188,384 (120,352) 68,032
Global Telecommunications 194,860 (101,660) 93,200
CSAM reimbursed expenses of European Equity and Global Telecommunications, in
the amounts of $19,556 and $33,124 respectively, for the year ended August 31,
1999.
For its-sub-advisory services, Credit Suisse Asset Management Limited ("CSAM
Limited"), an indirect, wholly-owned subsidiary of Credit Suisse Group, is
entitled to receive from CSAM .30% of the daily net assets of Emerging Markets
and .50% of the average daily net assets of European Equity. For the year ended,
August 31, 1999, CSAM Limited was entitled to receive $56,515, and $76,241 from
CSAM for sub-advisory services provided to Emerging Markets, and European
Equity, respectively, all of which were waived.
State Street Bank and Trust Company ("State Street"), serves as each Fund's
transfer and dividend disbursement agent. State Street has delegated most of its
Fund service obligations to Boston Financial Data Services, Inc. (BFDS), a 50%
owned subsidiary of State Street.
Counsellors Funds Service, Inc. ("CFSI"), a wholly-owned subsidiary of Credit
Suisse Asset Management, LLC, and PFPC, Inc. ("PFPC"), an indirect, wholly-owned
subsidiary of PNC Bank Corp., serve as each Fund's co-administrator. For
administration services, each Fund, except European Equity, pays CFSI a fee
calculated at an annual rate .05% of the Fund's first $125 million in average
daily nets assets of the Common shares and .10% of average daily net assets of
the Common shares over $125 million. For European Equity, CFSI is entitled to
recieve from the Fund a monthly fee equal to an annual rate of .10% of average
daily net asset of the Common shares. No compensation is payable by the Funds to
CFSI for co-administration services for the Institutional shares. CFSI may, at
its discretion, voluntarily waive all or any portion of its co-administration
fees for any of
60
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
the Funds. For the period October 24, 1998 to August 31, 1999, co-administration
fees earned by CFSI on the Common shares were as follows:
GROSS NET
FUND ADMINISTRATION FEE WAIVER ADMINISTRATION FEE
------ ------------------ ------- ------------------
International $ 9,292 $ -- $9,292
European Equity 15,192 (7,596) 7,596
Emerging Markets 377 (142) 235
Global Telecommunications 9,709 (9,463) 246
Prior to October 23, 1998, Provident Distributors, Inc. ("PDI") served as
administrative service agent. An administrative service fee was computed daily
and payable quarterly at an annual rate of .15% of the average daily net assets
of each Fund's (except European Equity) corresponding portfolio of The RBB Fund.
The administrative agent may at its discretion voluntarily waive all or any
portion of its administrative fee for any of the Funds. For the period September
1, 1998 through October 23, 1998, administrative service fees earned and waived
by PDI were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE
FUND SERVICE FEE WAIVER SERVICE FEE
------ -------------------- -------- ------------------
International $131,374 $(70,067) $61,307
Emerging Markets 4,262 (3,409) 853
Global Telecommunications 34 (34) --
For administration services, PFPC currently receives a fee calculated at
annual rate of .125% on each Fund's average daily net assets, subject to a
minimum annual fee and exclusive of out-of-pocket expenses. PFPC may, at its
discretion, voluntarily waive all or any portion of its administration fee for
any of the Funds. For the year ended August 31, 1999, the co-administration fees
earned and waived by PFPC were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE
FUND SERVICE FEE WAIVER SERVICE FEE
------ -------------------- -------- ------------------
International $860,732 $ -- $860,732
European Equity 2,894 -- 2,894
Emerging Markets 23,548 -- 23,548
Global Telecommunications 24,357 (24,357) --
61
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
Credit Suisse Asset Management Securities Inc. ("CSI"), also a wholly-owned
subsidiary of Credit Suisse Asset Management, LLC, serves as each Fund's
distributor. No compensation is payable by any Fund to CSI for its distribution
services for Institutional shares. For its distribution services for the Common
shares, CSI receives a fee calculated at an annual rate .25% of the average
daily net assets of the Common shares of each Fund. For the year ended August
31, 1999, distribution fees earned by CSI were as follows:
FUND DISTRIBUTION FEE
------ ----------------
International $47,318
European Equity 37,979
Emerging Markets 2,146
Global Telecommunications 48,715
NOTE 3. PURCHASES AND SALES OF SECURITIES
For the period ended August 31, 1999, purchases and sales of investment
securities (other than short-term investments) were as follows:
INVESTMENT SECURITIES
----------------------------------
FUND PURCHASES SALES
------ --------------- ------------------
International $1,194,403,607 $ 1,190,202,178
European Equity 63,543,115 39,683,207
Emerging Markets 38,225,168 60,244,926
Global Telecommunications 89,335,347 36,815,339
NOTE 4. CAPITAL SHARES
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL GROWTH FUND
-------------------------------------------------------------------------------------------------------
INSTITUTIONAL COMMON
--------------------------------------------------- --------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1999 AUGUST 31, 1998
-------------------------- ----------------------- -------------------------- ----------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
----------- ------------ --------- ------------ ---------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 11,591,187 $257,783,566 4,245,007 $102,490,297 3,185,532 $71,124,892 211,487 $ 4,990,229
Shares issued in
reinvestment of
dividends 2,671,406 59,839,501 3,354,933 68,910,317 127,644 2,838,791 8,163 167,087
Shares repurchased (12,967,216) (293,781,727)(5,715,329) (125,473,547) (3,007,619) (66,621,836) (154,474) (3,642,448)
----------- ------------ --------- ------------ ---------- ----------- -------- -----------
Net increase 1,295,377 $ 23,841,340 1,884,611 $ 45,927,067 305,557 $ 7,341,847 65,176 $ 1,514,868
=========== ============ ========= ============ ========== =========== ======== ===========
</TABLE>
62
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 4. CAPITAL SHARES (CONTINUED)
<TABLE>
<CAPTION>
EUROPEAN EQUITY FUND
--------------------------------------------------------------------
INSTITUTIONAL COMMON
--------------------------------- ----------------------------------
FOR THE PERIOD JANUARY 28, 1999* FOR THE PERIOD JANUARY 28, 1999*
THROUGH AUGUST 31, 1999 THROUGH AUGUST 31, 1999
-------------------------------- --------------------------------
SHARES VALUE SHARES VALUE
------ -------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 10,003 $100,030 4,115,201 $40,639,910
Shares issued in
reinvestment of
dividends -- -- -- --
Shares repurchased -- -- (1,605,450) (15,431,585)
------ -------- ---------- -----------
Net increase 10,003 $100,030 2,509,751 $25,208,325
====== ======== ========== ===========
*Inception Date.
</TABLE>
<TABLE>
<CAPTION>
EMERGING MARKETS II FUND
-------------------------------------------------------------------------------------------------------
INSTITUTIONAL COMMON
--------------------------------------------------- --------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED FOR THE YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998 AUGUST 31, 1999 AUGUST 31, 1998
-------------------------- ----------------------- -------------------------- ----------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
----------- ------------- --------- ------------ ---------- ----------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 46,493 $ 584,900 102,528 $ 1,830,455 69,187 $952,603 93,287 $1,457,394
Shares issued in
reinvestment of
dividends 27,063 308,248 245,801 4,154,034 60 690 46 775
Shares repurchased (1,991,203) (25,992,240)(2,256,500) (35,760,759) (66,044) (959,369) (32,820) (571,277)
---------- ------------ --------- ------------ ------- --------- ------- ----------
Net increase/
(decrease) (1,917,647) $(25,099,092)(1,908,171) $(29,776,270) 3,203 $ (6,076) 60,513 $ 886,892
========== ============ ========= ============ ======= ========= ======= ==========
</TABLE>
GLOBAL TELECOMMUNICATIONS FUND
-----------------------------------------------------------
COMMON
-----------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
AUGUST 31, 1999 AUGUST 31, 1998
------------------------- ----------------------
SHARES VALUE SHARES VALUE
--------- ------------ ------- ---------
Shares sold 1,820,386 $ 68,055,242 18,229 $ 414,135
Shares issued in
reinvestment of
dividends 5,883 167,194 2,037 37,921
Shares repurchased (280,472) (10,725,448) (18,228) (407,258)
--------- ------------ ------- ---------
Net increase 1,545,797 $ 57,496,988 2,038 $ 44,798
========= ============ ======= =========
63
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 4. CAPITAL SHARES (CONTINUED)
On August 31, 1999, the number of shareholders that held 5% or more of the
outstanding shares are as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
International Institutional shares 4 24.90%
International Common shares 3 89.83
European Equity Institutional shares 1 99.97
European Equity Common shares 1 81.40
Emerging Markets Institutional shares 4 89.49
Emerging Markets Common shares 3 89.74
NOTE 5. RESTRICTED SECURITIES
One of International's investments is restricted as to resale and is valued
at the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value available. The
table below shows the number of shares held, the acquisition date, value as of
August 31, 1999, percentage of net assets which the security comprises,
aggregate cost and unit value of the security.
<TABLE>
<CAPTION>
NUMBER OF ACQUISITION 08/31/99 PERCENTAGE O SECURITY VALUE PER
SHARES DATE FAIR VALUE NET ASSETS COST UNIT
---------- ---------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Geotek Communications, Inc.
Series M 600 5/26/95 0.00 0.0% $6,000,000 0.000
---- ----------
0.00 $6,000.000
==== ==========
</TABLE>
NOTE 6. FORWARD FOREIGN CURRENCY CONTRACTS
The Funds will generally enter into forward foreign currency exchange
contracts as a way of managing foreign exchange rate risk or to enhance total
return. Each Fund may enter into these contracts to fix the U.S. dollar value of
a security that it has agreed to buy or sell for the period between the date the
trade was entered into and the date the security is delivered and paid for. Each
Fund may also use these contracts to hedge the U.S. dollar value of securities
denominated in foreign currencies that it already owns. The Fund may enter into
these contracts for the purchase or sale of a specific foreign currency at a
fixed price on a future date as a hedge or cross-hedge against either
transactions or portfolio positions.
Forward foreign currency contracts are valued at the forward rate, and are
marked-to-market daily. The change in market value is recorded by each Fund as
an unrealized gain or loss. When the contract is closed, each Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
64
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS
August 31, 1999
- --------------------------------------------------------------------------------
NOTE 6. FORWARD FOREIGN CURRENCY CONTRACTS (CONTINUED)
Each Fund's policy is to include this portion of realized and unrealized
gains and losses on investments that result from foreign currency changes with
other foreign currency gains and losses on the Statement of Operations.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of each Fund's portfolio securities, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Fund could be
exposed to risks if the counterparty to the contract is unable to meet the terms
of their contract. None of the Funds had open forward currency contacts at
August 31, 1999.
NOTE 7. LINE OF CREDIT
The Funds, together with other funds advised by CSAM, have established a $250
million committed line of credit facility ("Credit Facility") with Deutche Bank,
AG as administrative agent, State Street Bank and Trust Company as operations
agent, Bank of Nova Scotia as syndication agent and certain other lenders, for
temporary or emergency purposes primarily relating to unanticipated portfolio
share redemptions. Under the terms of the Credit Facility, the funds with access
to the Credit Facility pay an aggregate commitment fee at a rate of .075% per
annum on the average daily balance of the Credit Facility that is undisbursed
and uncanceled during the preceding quarter allocated among the participating
funds in such manner as is determined by the governing Boards of the various
funds. In addition, the participating funds will pay interest on borrowing at
the Federal funds rate plus .50%. None of the Funds had borrowings under the
line of credit agreement.
NOTE 8. CAPITAL LOSS CARRYOVERS
At August 31, 1999, capital loss carryovers were available to offset future
realized gains as follows: $20,719,643 in Emerging Markets of which $88,398
expires in 2003, $9,829,561 expires in 2004, $68,462 expires in 2006 and
$10,733,222 expires in 2007.
65
<PAGE>
WARBURG PINCUS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders Of
Warburg Pincus International Growth Fund,
Warburg Pincus European Equity Fund,
Warburg Pincus Emerging Markets II Fund and
Warburg Pincus Global Telecommunications Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments of Warburg Pincus International Growth
Fund, Warburg Pincus European Equity Fund, Warburg Pincus Emerging Markets II
Fund and Warburg Pincus Global Telecommunications Fund (all funds collectively
referred to as the "Funds"), and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of the Funds at August 31, 1999, and
the results of each of their operations for the year (or period) then ended, the
changes in each of their net assets for each of the two years (or periods) in
the period then ended and their financial highlights for each of the years (or
periods) presented, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA
October 7, 1999
66
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WARBURG PINCUS FUNDS
TAX INFORMATION LETTERS
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IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF WARBURG PINCUS INTERNATIONAL
GROWTH FUND (UNAUDITED)
During the fiscal year ended August 31, 1999, the International Growth Fund -
Institutional Class distributed $5,684,280 of foreign source income on which the
Fund paid foreign taxes of $606,655. This information is being furnished to you
pursuant to notice requirements of Section 853(a) and 855(d) of the Internal
Revenue Code 1986, as amended the "Code", and the Treasury Regulations
thereunder.
During the fiscal year ended August 31, 1999, the International Growth Fund -
Common Class distributed $258,106 of foreign source income on which the Fund
paid foreign taxes of $28,741. This information is being furnished to you
pursuant to notice requirements of Section 853(a) and 855(d) of the Code and the
Treasury Regulations thereunder.
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS OF WARBURG PINCUS EMERGING MARKET II
FUND (UNAUDITED)
During the fiscal year ended August 31, 1999, the Emerging Market II Fund -
Institutional Class distributed $371,643 of foreign source income on which the
Fund paid foreign taxes of $62,881. This information is being furnished to you
pursuant to notice requirements of Section 853(a) and 855(d) of the Code and the
Treasury Regulations thereunder.
During the fiscal year ended August 31, 1999, the Emerging Market II Fund -
Common Class distributed $14,918 of foreign source income on which the Fund paid
foreign taxes of $2,683. This information is being furnished to you pursuant to
notice requirements of Section 853(a) and 855(d) of the Code and the Treasury
Regulations thereunder.
IMPORTANT TAX INFORMATION FOR SHAREHOLDERS (UNAUDITED)
During the year ended August 31, 1999, the Funds declared the following
dividends from realized capital gains:
Short-term Long-term
capital gain capital gain
per share per share
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Warburg Pincus International Growth Fund $0.4142 $1.5771
Warburg Pincus Global Telecommunication Fund -- 2.8396
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WARBURG PINCUS FUNDS
YEAR 2000 COMPLIANCE
Not Covered by Independent Accountants Reports
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Many services provided to the Fund's and their shareholders by CSAM and
certain of its affiliates ("CSAMService Providers") and the Fund's other service
providers rely on the functioning of their respective computer systems. Many
computer systems cannot distinguish the year 2000 from the year 1900, resulting
in potential difficulty in performing various calculations ("Year 2000 Issue").
The Year 2000 could potentially have an adverse impact on the handling of
security trades, the payment of interest and dividends, pricing, account
services and other Fund operations. It has been reported that foreign
institutions have made less progress in addressing the Year 2000 Issue than
major U.S. entities, which could adversely affect the portfolios' foreign
investments
The CSAM Service Providers recognize the importance of the Year 2000 Issue
and are taking appropriate steps necessary in preparation for the year 2000. The
CSAM Service Providers anticipate that their systems and those of the Fund's
other service providers will be adapted in time for the Year 2000. The CSAM
Service Providers have completed mission critical systems testing and have
participated in industry-wide testing programs. In addition, the CSAM Service
Providers are formulating a contingency plan to address the Year 2000 Issue and
anticipate completion of the plan by the end of the third quarter of 1999. The
CSAM Service Providers have also completed investigations of material operations
of the Fund's other major service providers. The CSAM Service Providers continue
to monitor the Year 2000 Issue and its potential impact on the Funds. However,
there can be no assurance that these steps will be sufficient to avoid any
adverse impact on the Funds nor can there be any assurance that the Year 2000
Issue will not have an adverse effect on the Fund's investments or on global
markets or economics, generally.
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[GRAPHIC OMITTED]
WARBURG PINCUS FUNDS
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874) (BULLET) www.warburg.com
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. WPIST-2-0899
