[GRAPHIC OMITTED] [GRAPHIC OMITTED]
WARBURG PINCUS FUNDS CREDIT SUISSE ASSET MANAGEMENT
SEMIANNUAL
REPORT
FEBRUARY 29, 2000
(UNAUDITED)
WARBURG PINCUS
EUROPEAN EQUITY FUND
o
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.
Provident Distributors, Inc., Distributor, located at Four Falls Corporate
Center, 6th Floor, West Conshohocken, PA 19428-2961 is not affiliated with
Credit Suisse Asset Management, LLC. Warburg Pincus Funds are advised by Credit
Suisse Asset Management, 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 FEBRUARY 29, 2000; 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 EUROPEAN EQUITY FUND
PORTFOLIO MANAGERS' LETTER -- FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
April 3, 2000
Dear Shareholders:
We are writing to report on the results of the Warburg Pincus European Equity
Fund (the "Fund") for the six months ended February 29, 2000.
On February 29, 2000, the net asset value ("NAV") of the Fund's common shares
was $12.88, vs. a NAV of $9.79 on August 31, 1999. The common shares' total
return was 32.12% (assuming the reinvestment of dividends and distributions at
$0.0499 a share). By comparison, the Morgan Stanley Capital International Europe
Index* (the "MSCI Europe") had a return of 13.98% for the period. The Fund's
common shares' one-year return through February 29, 2000 was 35.30%. The Fund's
common shares' since-inception (on January 28, 1999) average annual total return
through February 29, 2000 was 26.62%.
The Fund's institutional shares had a NAV of $12.90 on February 29, 2000, vs.
a NAV of $9.80 on August 31, 1999. The institutional shares' total return was
32.38% for the six months (assuming the reinvestment of dividends and
distributions at $0.0667 a share). The MSCI Europe had a return of 13.98% for
the six months. The Fund's institutional shares' one-year return through
February 29, 2000 was 35.71%. The Fund's institutional shares' since-inception
(on January 28, 1999) average annual total return through February 29, 2000 was
26.67%.
The period was a positive one for almost all European stock markets, buoyed
by optimism over the region's economic prospects and an improving outlook for
earnings in general. Market leadership, however, was limited to a handful of
sectors, largely those relating to telecommunications, media and technology.
Against this backdrop, the Fund had a solid gain in absolute terms, and
handily outpaced its benchmark for the six months. The Fund's results reflected
a strong showing from its substantial position in stocks in the above-mentioned
areas.
We made few noteworthy changes during the period in terms of country
emphasis. We maintained a primary focus on the Continent's "core" economies
(most specifically, France and Germany), where we generally saw the most
compelling value. We also saw attractively priced stocks in smaller European
markets within the EMU block, including Finland, Europe's strongest-performing
market for the six months. We established a modest position in Turkey, where
significant macroeconomic changes occurred during the period. We maintained our
underweight stance in the U.K., reflecting our near-term concerns over the
country's interest-rate policies.
1
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
PORTFOLIO MANAGERS' LETTER -- FEBRUARY 29, 2000 (CONCLUDED)
- --------------------------------------------------------------------------------
The relatively low allocation to the U.K. proved beneficial, as the country's
stock market was a laggard for the six months.
Looking ahead, our outlook for Europe's equity markets remains positive based
on our expectation that GDP growth in the region is set to accelerate.
Furthermore, we believe that continued growth is possible without a material
pickup in inflation as unemployment rates (though falling) remain relatively
high and price transparency resulting from a single currency and the Internet
act as deflationary forces within the region. We feel that merger & acquisition
activity is likely to remain high, particularly in segments of the market
related to the "new economy." All these factors stand to provide a strong
backdrop for equity investors going forward. The Fund, we believe, is currently
well positioned to benefit from the positive impact of economic recovery on
traditional industries as well as the emergence of new trends and technologies.
Our favorable long-term outlook aside, Europe's stock markets will likely
remain volatile, necessitating careful stock selection as well as country
allocation. As ever, we will continue to strive to identify markets and
companies we deem to have the brightest long-term prospects.
Sincerely yours,
Credit Suisse Asset Management European Equities Management Team
Harold W. Erlich, Managing Director
Nancy Nierman, 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.
*The Morgan Stanley 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.
2
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO MANAGERS' LETTER -- FEBRUARY 29, 2000
- --------------------------------------------------------------------------------
March 22, 2000
Dear Shareholders:
We are pleased to report on the results of the Warburg Pincus
Global Telecommunications Fund (the "Fund") for the six months ended February
29, 2000.
At February 29, 2000, the net asset value ("NAV") of the Fund was $82.65,
compared to an NAV of $41.22 on August 31, 1999. As a result, the Fund's total
return was 104.5%, (assuming the reinvestment of dividends and distributions
totaling $1.23 per share). By comparison, the MSCI Global Telecommunications
Index* returned 36.6% during the same period.
The Fund outperformed as a result of effective stock selection across all
geographies in which we invested. In order of their positive contributions to
overall performance during the fiscal half-year, these were the U.S., Japan,
Europe, Asia/Pacific, other emerging markets and Latin America.
o THE U.S. We emphasized two telecommunications subsectors in the Fund's
U.S. exposure. The first was non-traditional service carriers, best
exemplified by companies known as CLECs (i.e., competitive local-exchange
carriers). Our analysis concluded that CLECs, which are fairly young
companies that provide advanced data and Internet services in addition to
traditional telephony, offered unusually strong growth potential. The
portfolio thus benefited as CLEC names enjoyed significant appreciation.
The other subsector we highlighted in the U.S. was wireless. Wireless
companies, which sold at valuations that were quite reasonable compared to
their bright growth prospects, also outperformed.
o JAPAN. Japanese stock selection favored competitive entrants and wireless
companies. Among the latter was NTT Mobile Communications, one of the
world's top wireless providers and the Fund's largest individual holding,
whose shares more than doubled during the half-year.
o EUROPE. Results in Europe were strong in several nations, especially the
U.K. Our biggest U.K. position (and one of the Fund's biggest as well) was
Vodafone Airtouch, the global wireless giant whose shares surged in the
wake of its bid to acquire Germany's Mannesmann. The Vodafone bid for
Mannesmann, incidentally, was announced in November and proved to be a
catalytic event in terms of its upward impact on telecom stocks worldwide.
Elsewhere in Europe, relative returns were best in Finland, the
Netherlands and Italy.
3
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
PORTFOLIO MANAGERS' LETTER -- FEBRUARY 29, 2000 (CONCLUDED)
- --------------------------------------------------------------------------------
o ASIA/PACIFIC. Asian performance was highest in China, India and South
Korea, each of which benefited from one of the portfolio's major
positions. Respectively by market, these were China Telecom, VSNL and SK
Telecom.
o OTHER EMERGING MARKETS. Among other emerging markets, we fared
particularly well in Russia and Israel.
o LATIN AMERICA. Our decision to focus on the key markets of Mexico and
Brazil drove outperformance in Latin America. In Mexico, we invested in a
combination of incumbent providers and newer competitive entrants.
Brazilian exposure focused on incumbents, wireless providers and
data-focused companies spun off from Telebras, the privatized telecom
holding company.
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
Scott T. Lewis, Director
Vincent J. McBride, 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.
PERFORMANCE
SINCE
INCEPTION
SIX MONTHS ONE YEAR 12/4/96
2/29/00 (3/1/99 - 2/29/00) (ANNUALIZED)
- --------------------------------------------------------------------------------
Warburg Pincus Global
Telecommunications Fund 104.5% 170.4% 78.4%
Morgan Stanley Global
Telecommunications Index* 36.6% 35.1% 37.7%
- --------------------------------------------------------------------------------
* THE MORGAN STANLEY GLOBAL TELECOMMUNICATIONS INDEX IS AN UNMANAGED INDEX
(WITH NO DEFINED INVESTMENT OBJECTIVE) OF TELECOMMUNICATIONS EQUITIES THAT
INCLUDES REINVESTMENT OF DIVIDENDS AND IS COMPILED BY MORGAN STANLEY & CO.,
INCORPORATED.
4
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (83.1%)
AUSTRIA (2.0%)
ELECTRICAL COMP. & INSTRUMENTS (0.8%)
Austria Technologie & Systemtechnik AG** 4,304 $ 327,367
-----------
ENERGY SOURCES (1.2%)
OMV AG 5,855 458,359
-----------
TOTAL AUSTRIA 785,726
-----------
DENMARK (1.3%)
BUSINESS & PUBLIC SERVICES (1.3%)
ISS International Service System A/S CL. B 7,675 512,442
-----------
TOTAL DENMARK 512,442
-----------
FINLAND (7.2%)
ELECTRICAL & ELECTRONICS (2.6%)
Nokia Oyj 5,022 1,000,880
-----------
MACHINERY & ENGINEERING (2.1%)
Metso Oyj 62,760 821,782
-----------
TELEPHONE - INTEGRATED (2.5%)
Helsingin Puhelin Oyj (Helsinki Telephone Corp.)# 9,060 968,247
-----------
TOTAL FINLAND 2,790,909
-----------
FRANCE (14.0%)
BANKING (1.6%)
Banque Nationale de Paris 7,924 625,595
-----------
BROADCASTING & PUBLISHING (2.5%)
Hachette Filipacchi Medias 7,560 618,694
Thomson Multimedia** 2,670 351,668
-----------
970,362
-----------
DIVERSIFIED OPERATIONS/COMMERCIAL SERVICES (1.4%)
Vivendi 4,644 545,490
-----------
ELECTRONIC COMP. & INSTRUMENTS (1.7%)
STMicroelectronics N.V.# 3,375 669,385
-----------
ENERGY EQUIPMENT & SERVICES (1.2%)
Coflexip S.A. ADR#** 10,175 455,967
-----------
ENERGY SOURCES (2.0%)
Total Fina S.A. CL. B 5,853 774,847
-----------
INSURANCE (1.5%)
AXA S.A.** 4,610 579,224
-----------
See Accompanying Notes to Financial Statements.
5
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
FRANCE (CONT'D)
METALS - NON-FERROUS (0.8%)
Pechiney S.A. CL. A 5,041 $ 294,120
-----------
MULTI-INDUSTRY (1.3%)
Lagardere S.C.A 5,351 503,344
-----------
TOTAL FRANCE 5,418,334
-----------
GERMANY (12.6%)
BANKING (3.4%)
Deutsche Bank AG 5,950 500,684
Dresdner Bank AG 16,500 791,131
-----------
1,291,815
-----------
ELECTRICAL & ELECTRONICS (1.9%)
Siemens AG 4,166 744,043
-----------
FINANCIAL SERVICES (2.1%)
Marschollek, Lautenschlaeger und Partner AG 1,611 822,065
-----------
INTERNET SOFTWARE (1.0%)
Intershop Communications AG** 760 387,815
-----------
REINSURANCE (1.9%)
Hannover Rueckversicherungs AG 12,515 747,063
-----------
UTILITIES - ELECTRICAL & GAS (2.3%)
Viag AG 49,350 876,634
-----------
TOTAL GERMANY 4,869,435
-----------
HUNGARY (1.7%)
BANKING (1.7%)
OTP Bank Rt. GDR 144A 11,150 636,601
-----------
TOTAL HUNGARY 636,601
-----------
IRELAND (3.2%)
BANKING (0.9%)
Bank of Ireland 59,850 349,198
-----------
TELECOMMUNICATIONS (2.3%)
eircom plc** 200,000 881,345
-----------
TOTAL IRELAND 1,230,543
-----------
ITALY (4.7%)
TELEPHONE - INTEGRATED (2.7%)
Tecnost S.p.A.# 248,600 1,033,998
-----------
See Accompanying Notes to Financial Statements.
6
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
ITALY (CONT'D)
TRANSPORT - SERVICES (2.0%)
Concessioni e Costruzioni Autostrade S.p.A.# 89,351 $ 786,286
-----------
TOTAL ITALY 1,820,284
-----------
NETHERLANDS (5.2%)
APPLIANCES & HOUSEHOLD DURABLES (1.6%)
Koninklijke Philips Electronics
N.V 3,366 623,039
-----------
BROADCASTING & PUBLISHING (0.8%)
VNU N.V 4,400 303,532
-----------
CONSTRUCTION & HOUSING (0.9%)
IHC Caland N.V 10,450 352,143
-----------
ELECTRICAL & ELECTRONICS (1.9%)
Equant** 6,628 749,179
-----------
TOTAL NETHERLANDS 2,027,893
-----------
PORTUGAL (3.5%)
MULTI-INDUSTRY (1.0%)
PT MULTIMEDIA - Servicos de
Telecomunicacoes e Multimedia SGPS S.A.** 3,150 400,634
-----------
TELECOMMUNICATIONS (2.5%)
Portugal Telecom S.A 66,760 949,362
-----------
TOTAL PORTUGAL 1,349,996
-----------
SPAIN (3.3%)
BANKING (1.8%)
Banco Bilbao Vizcaya S.A.** 49,003 712,417
-----------
RETAIL - HYPERMARKETS (1.5%)
Centros Comerciales Continente, S.A 16,750 283,026
Centros Comerciales Pryca, S.A.# 21,700 286,648
-----------
569,674
-----------
TOTAL SPAIN 1,282,091
-----------
SWEDEN (5.2%)
BANKING (2.0%)
Nordbanken Holding AB 143,600 753,482
-----------
ELECTRICAL & ELECTRONICS (3.2%)
Telefonaktiebolaget L.M. Ericsson Cl. B 13,069 1,250,733
-----------
TOTAL SWEDEN 2,004,215
-----------
See Accompanying Notes to Financial Statements.
7
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
SWITZERLAND (0.8%)
TELECOMMUNICATIONS (0.8%)
Carrier 1 International S.A.** 1,900 $ 296,349
Carrier 1 International S.A. - ADR** 400 12,975
-----------
309,324
-----------
TOTAL SWITZERLAND 309,324
-----------
TURKEY (1.3%)
COMMERCIAL BANKS-EUROPE (0.7%)
Yapi ve Kredi Bankasi A.S 8,930,000 264,118
-----------
DIVERSIFIED OPERATIONS (0.6%)
Haci Omer Sabanci Holding A.S 4,851,000 223,653
-----------
TOTAL TURKEY 487,771
-----------
UNITED KINGDOM (17.1%)
AEROSPACE & MILITARY TECHNOLOGY (1.7%)
British Aerospace plc 131,185 649,268
-----------
BANKING (3.4%)
Bank of Scotland 64,000 570,862
Lloyds TSB Holdings Group plc 79,194 728,892
-----------
1,299,754
-----------
BROADCASTING & PUBLISHING (1.3%)
Reed International plc 67,300 493,784
-----------
HEALTH & PERSONAL CARE (2.3%)
Astrazeneca Group plc 9,731 316,312
Smithkline Beecham plc 52,850 591,970
-----------
908,282
-----------
INSURANCE (1.7%)
Prudential Corporation plc 45,956 677,628
-----------
TELECOMMUNICATIONS (6.7%)
British Telecommunications plc 53,373 931,921
Cable & Wireless Communications plc** 18,912 320,958
Viatel, Inc.** 8,850 498,366
Vodafone AirTouch PLC 147,724 828,491
-----------
2,579,736
-----------
TOTAL UNITED KINGDOM 6,608,452
-----------
TOTAL COMMON STOCKS (Cost $28,798,417) $32,134,016
-----------
See Accompanying Notes to Financial Statements.
8
<PAGE>
WARBURG PINCUS EUROPEAN EQUITY FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
PAR
(000) VALUE
------- -------
SHORT-TERM INVESTMENT (5.5%)
BBH Grand Cayman U.S. Dollar Time Deposit
4.850% 03/01/00 $2,110 $ 2,110,000
(Cost $2,110,000) -----------
TOTAL INVESTMENTS (88.6%) (Cost $30,908,417*) $34,244,016
OTHER ASSETS IN EXCESS OF LIABILITIES (11.4%) $ 4,409,145
-----------
TOTAL NET ASSETS (100.0%) $38,653,161
===========
* The cost for Federal income tax purposes at February 29, 2000 is $31,020,267.
The gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $ 5,164,873
Gross Depreciation (1,941,124)
-----------
Net Appreciation $ 3,223,749
===========
** 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.
9
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (88.7%)
ARGENTINA (0.4%)
TELECOMMUNICATIONS (0.4%)
Telecom Argentina S.A. ADR#** 40,000 $ 1,667,500
------------
TOTAL ARGENTINA 1,667,500
------------
BELGIUM (0.0%)
TELECOMMUNICATIONS (0.0%)
Telinfo NV-strip VVPR** 61 1
------------
TOTAL BELGIUM 1
------------
BERMUDA (0.9%)
MULTI-INDUSTRY (0.6%)
Tyco International LTD. ADR 123,300 4,677,694
------------
TELECOMMUNICATIONS (0.3%)
Flag Telecom Holdings, LTD.** 95,000 2,719,375
------------
TOTAL BERMUDA 7,397,069
------------
BRAZIL (2.1%)
TELECOMMUNICATIONS (2.1%)
Celular crt Participacoes S.A. Pfd. A** 3,172,000 1,045,971
Embratel Participacoes S.A. ADR** 118,300 2,839,200
Tele Centro Oeste Celular
Participacoes S.A. ADR** 317,000 2,853,000
Telecomunicacoes Brasileiras S.A.
Pfd. Block ADR#** 27,100 3,990,475
------------
TOTAL BRAZIL 10,728,646
------------
CANADA (2.8%)
TELECOMMUNICATIONS (2.8%)
Clearnet Communications, Inc., Cl. A** 47,000 1,976,937
Descartes Systems Group, Inc. (The)** 71,800 3,949,000
OCI Communications, Inc. Cl. B 11,800 143,535
Research in Motion, Ltd.** 35,500 4,801,375
Telesystem International Wireless, Inc.** 80,000 3,220,000
------------
TOTAL CANADA 14,090,847
------------
CHILE (0.5%)
TELECOMMUNICATIONS (0.5%)
Cia. de Telecomunicaciones de Chile S.A. ADR** 111,300 2,226,000
------------
TOTAL CHILE 2,226,000
------------
See Accompanying Notes to Financial Statements.
10
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
FINLAND (3.0%)
TELECOMMUNICATIONS (3.0%)
Comptel Oyj 22,000 $ 2,670,993
Nokia Corp. ADR 29,800 5,909,712
Sonera Oyj 82,980 6,399,424
------------
TOTAL FINLAND 14,980,129
------------
FRANCE (0.9%)
BUILDING MATERIALS & COMPONENTS (0.6%)
Bouygues S.A. 3,614 3,009,811
------------
ELECTRICAL & ELECTRONICS (0.3%)
Alcatel 6,676 1,563,201
------------
TOTAL FRANCE 4,573,012
------------
GERMANY (0.3%)
TELECOMMUNICATIONS (0.3%)
Telegate AG** 9,200 1,381,807
------------
TOTAL GERMANY 1,381,807
------------
GREECE (1.8%)
TELECOMMUNICATIONS (1.8%)
Hellenic Telecommunications
Organization S.A. ADR#** 486,135 7,292,025
Stet Hellas Telecommunications S.A. ADR** 60,900 1,823,194
------------
TOTAL GREECE 9,115,219
------------
HONG KONG (2.2%)
MULTI-INDUSTRY (0.6%)
Hutchison Whampoa, Ltd. 173,000 2,711,968
------------
TELECOMMUNICATIONS (1.6%)
China Telecom (Hong Kong), Ltd. ADR** 44,300 8,234,262
------------
TOTAL HONG KONG 10,946,230
------------
HUNGARY (0.7%)
TELECOMMUNICATIONS (0.7%)
Magyar Tavkozlesi ADR 74,200 3,408,562
------------
TOTAL HUNGARY 3,408,562
------------
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
INDIA (2.1%)
TELECOMMUNICATIONS (2.1%)
Mahanagar Telephone Nigam, Ltd. 144A GDR** 119,000 $ 2,305,625
Videsh Sanchar Nigam, Ltd. 144A GDR 226,600 8,327,550
------------
TOTAL INDIA 10,633,175
------------
IRELAND (1.0%)
TELECOMMUNICATIONS (1.0%)
eircom plc** 1,127,210 4,967,304
------------
TOTAL IRELAND 4,967,304
------------
ISRAEL (0.4%)
TELECOMMUNICATIONS (0.4%)
Gilat Satellite Networks, Ltd. ADR#** 12,100 1,814,244
------------
TOTAL ISRAEL 1,814,244
------------
ITALY (1.3%)
TELECOMMUNICATIONS (1.3%)
Telecom Italia S.p.A.# 381,279 6,684,790
------------
TOTAL ITALY 6,684,790
------------
JAPAN (7.5%)
BUSINESS & PUBLIC SERVICES (0.7%)
Trans Cosmos, Inc. 7,900 3,682,061
------------
ELECTRONIC COMP. & INSTRUMENTS (1.1%)
Internet Intitiative Japan, Inc. ADR** 10,000 1,060,000
Sony Corp. 7,200 2,130,148
Sony Corp. ADR 7,200 2,256,300
------------
5,446,448
------------
MULTI-INDUSTRY (1.1%)
Furukawa Electric Co., Ltd. 389,000 5,945,580
------------
TELECOMMUNICATIONS (4.6%)
DDI Corp.# 411 3,816,242
KDD Corp. 30,200 2,817,895
NTT Mobile Communication Network, Inc. 303 12,219,130
Softbank Corp. 3,100 4,515,186
------------
23,368,453
------------
TOTAL JAPAN 38,442,542
------------
See Accompanying Notes to Financial Statements.
12
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
MALAYSIA (0.7%)
TELECOMMUNICATIONS (0.7%)
Telekom Malaysia Berhad 847,300 $ 3,589,971
------------
TOTAL MALAYSIA 3,589,971
------------
MEXICO (2.8%)
BROADCASTING & PUBLISHING (0.8%)
Grupo Televisa S.A. GDR** 56,300 4,324,544
------------
TELECOMMUNICATIONS (2.0%)
Neuvo Grupo Iusacell S.A. de C.V. ADR** 74,832 1,590,180
Telefonos De Mexico S.A. Cl. L ADR 130,200 8,560,650
------------
10,150,830
------------
TOTAL MEXICO 14,475,374
------------
NETHERLANDS (2.1%)
ELECTRICAL & ELECTRONICS (0.4%)
Equant N.V.** 18,984 $ 2,145,808
------------
TELECOMMUNICATIONS (1.7%)
United Pan-Europe Communications N.V.** 29,658 5,843,709
Versatel Telecom International N.V.#** 44,100 2,670,694
------------
8,514,403
------------
TOTAL NETHERLANDS 10,660,211
------------
PERU (0.2%)
TELECOMMUNICATIONS (0.2%)
Telefonica Del Peru S.A.A. ADR** 42,100 826,212
------------
TOTAL PERU 826,212
------------
PHILIPPINES (0.4%)
TELECOMMUNICATIONS (0.4%)
Philippine Long Distance Telephone Co. 44,000 955,618
Philippine Long Distance Telephone Co. ADR# 38,200 830,850
------------
TOTAL PHILIPPINES 1,786,468
------------
PORTUGAL (1.5%)
MULTI-INDUSTRY (0.2%)
PT Multimedia - Servicos de Telecomunicacoes e
Multimedia SGPS S.A.** 7,500 953,892
------------
TELECOMMUNICATIONS (1.3%)
Portugal Telecom S.A. 458,720 6,523,237
------------
TOTAL PORTUGAL 7,477,129
------------
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
RUSSIA (0.6%)
TELECOMMUNICATIONS (0.6%)
Golden Telecom, Inc. ADR#** 70,000 $ 2,940,000
------------
TOTAL RUSSIA 2,940,000
------------
SOUTH KOREA (3.0%)
ELECTONIC COMP. & INSTRUMENTS (0.8%)
Samsung Electronics Co. 17,400 3,938,220
------------
TELECOMMUNICATIONS (2.2%)
Korea Telecom Corp. ADR** 58,100 2,527,350
SK Telecom Co., Ltd. ADR** 201,110 9,037,381
------------
11,564,731
------------
TOTAL SOUTH KOREA 15,502,951
------------
SPAIN (0.7%)
BROADCASTING & PUBLISHING (0.2%)
Sogecable S.A.** 17,000 1,095,808
------------
TELECOMMUNICATIONS (0.5%)
Telefonica S.A.** 53,000 1,523,194
Telefonica S.A. ADR#** 11,934 1,034,529
------------
2,557,723
------------
TOTAL SPAIN 3,653,531
------------
SWEDEN (1.7%)
ELECTRICAL & ELECTRONICS (1.7%)
Telefonaktiebolaget L.M. Ericsson ADR 25,000 2,400,000
Telefonaktiebolaget L.M. Ericsson Cl. B 65,550 6,273,285
------------
TOTAL SWEDEN 8,673,285
------------
TAIWAN (0.0%)
ELECTRONIC COMP. & INSTRUMENTS (0.0%)
Yageo Corp. 144A GDR# 400 3,026
------------
TOTAL TAIWAN 3,026
------------
THAILAND (0.3%)
TELECOMMUNICATIONS (0.3%)
TelecomAsia Corp. Public Co., Ltd.** 891,600 1,239,833
------------
TOTAL THAILAND 1,239,833
------------
See Accompanying Notes to Financial Statements.
14
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
UNITED KINGDOM (4.9%)
ELECTRONIC COMP. & INSTRUMENTS (0.3%)
Arm Holdings plc** 17,744 $ 1,337,603
------------
TELECOMMUNICATIONS (4.6%)
British Telecommunications plc 239,012 4,173,282
British Telecommunications plc ADR 3,800 677,350
Colt Telecom Group plc ADR** 15,963 3,719,130
Filtronic PLC 36,600 1,289,956
NDS Group plc ADR#** 28,700 2,134,562
Vodafone Airtouch plc 1,441,979 8,087,150
Vodafone Airtouch plc ADR# 63,500 3,663,156
------------
23,744,586
------------
TOTAL UNITED KINGDOM 25,082,189
------------
UNITED STATES (41.9%)
AEROSPACE & MILITARY TECHNOLOGY (1.6%)
General Motors Corp. Cl. H#** 24,143 2,909,231
Loral Space & Communications, Ltd.** 198,260 2,986,291
Titan Corporation (The)** 55,000 2,062,500
------------
7,958,022
------------
BROADCASTING & PUBLISHING (4.0%)
CBS Corp.** 51,000 3,037,687
Emmis Communications Corp.** 80,000 2,920,000
Fox Entertainment Group, Inc.** 195,600 5,146,725
Infinity Broadcasting Corp.** 65,000 2,075,937
TCI Satellite Entertainment, Inc.** 57,615 727,389
Time Warner, Inc.** 43,597 3,727,543
TV Guide, Inc. Cl. A** 60,000 2,827,500
------------
20,462,781
------------
BUSINESS & PUBLIC SERVICES (1.2%)
Microsoft Corporation** 50,000 4,468,750
Walt Disney Co. (The) 55,000 1,842,500
------------
6,311,250
------------
DATA PROCESSING & REPRODUCTION (1.1%)
Sun Microsystems, Inc.** 59,000 5,619,750
------------
ELECTRONIC COMP. & INSTRUMENTS (7.3%)
America Online** 60,108 3,546,372
Applied Materials, Inc.** 9,000 1,646,437
Cabletron Systems, Inc.** 155,000 7,595,000
See Accompanying Notes to Financial Statements.
15
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
UNITED STATES (CONT'D)
CISCO SYSTEMS** 15,894 $ 2,100,988
Gemstar International Group Ltd.** 32,500 2,465,938
i2 Technologies, Inc.** 10,000 1,635,000
JDS Uniphase Corp.** 22,960 6,055,700
Sanmina Corp.** 35,000 4,097,188
Texas Instruments, Inc. 44,000 7,326,000
Yahoo, Inc.** 6,732 1,075,016
------------
37,543,639
------------
ENERGY SOURCES (0.3%)
Montana Power Co. (The) 40,000 1,575,000
------------
TELECOMMUNICATIONS (26.4%)
Adelphia Communications Corp. Cl. A#** 28,000 1,538,250
Allegiance Telecom, Inc.** 21,900 2,165,363
ALLTEL Corp. 75,000 4,350,000
AT&T Corp. 41,000 2,026,938
AT&T Corp. - Liberty Media Group Cl. A** 40,500 2,116,125
Bell Atlantic Corp. 16,500 807,469
Bellsouth Corp. 70,300 2,864,725
Broadcom Corp. Cl. A** 20,424 4,031,187
Broadwing, Inc.** 89,600 2,660,000
Centurytel, Inc. 75,000 2,521,875
Crown Castle International Corp.** 87,500 2,821,875
Global Crossing, Ltd.** 22,827 1,064,309
Go2net, Inc.** 57,300 4,985,100
GTE Corp. 40,600 2,395,400
Harris Corp. 135,000 4,303,125
Inktomi Corp.** 25,000 3,428,125
Internet Capital Group, Inc.#** 24,200 2,559,150
Leap Wireless International, Inc.** 48,500 4,252,844
MCI Worldcom, Inc.** 95,292 4,252,406
McLeodUSA, Inc. Cl.A#** 81,400 7,163,200
Motorola, Inc. 17,300 2,949,650
Network Solutions, Inc.** 6,000 1,934,625
Next Level Communication, Inc.** 21,000 2,824,500
Nextel Communications, Inc. Cl. A** 22,000 2,998,875
NEXTLINK Communications, Inc.#** 75,600 8,330,175
NTL, Inc.#** 27,375 2,504,813
PanAmSat Corp.** 110,000 5,369,375
PMC-Sierra, Inc.** 34,400 6,641,350
PNV.Net, Inc.** 161,200 664,950
QUALCOMM, Inc.** 26,200 3,731,863
See Accompanying Notes to Financial Statements.
16
<PAGE>
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
SCHEDULE OF INVESTMENTS (CONT'D)
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
------- ------
COMMON STOCKS (CONT'D)
UNITED STATES (CONT'D)
Qwest Communications International, Inc.#** 108,000 $ 5,008,500
Rhythms Netconnections, Inc.#** 55,000 1,962,812
SBA Communications Corp.** 75,000 3,037,500
SBC Communications, Inc. 123,321 4,686,198
Tellabs, Inc.** 75,000 3,600,000
Time Warner Telecom, Inc. Cl. A** 68,100 5,243,700
Western Wireless Corp.** 102,200 4,956,700
Williams Communications Group, Inc.#** 67,000 2,981,500
WinStar Communications, Inc.#** 40,000 3,095,000
------------
134,829,552
------------
TOTAL UNITED STATES 214,299,994
------------
TOTAL COMMON STOCKS (Cost $332,328,378) $453,267,251
------------
PAR
(000)
--------
SHORT-TERM INVESTMENT (10.3%)
BBH Grand Cayman U.S. Dollar Time Deposit
4.950% 03/01/00 $52,930 $ 52,930,000
------------
(COST $52,930,000)
TOTAL INVESTMENTS (99.0%) (Cost $385,258,378*) $506,197,251
OTHER ASSETS IN EXCESS OF LIABILITIES (1.0%) 5,069,910
------------
TOTAL NET ASSETS (100.0%) $511,267,161
============
* Also cost for Federal income tax purposes at February 29, 2000. The gross
appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $131,766,079
Gross Depreciation (10,827,206)
------------
Net Appreciation $120,938,873
============
** 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.
17
<PAGE>
WARBURG PINCUS FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
February 29, 2000 (Unaudited)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
EUROPEAN TELECOMMUNICATIONS
EQUITY FUND FUND
------------ ------------------
<S> <C> <C>
ASSETS
Investments, at value (cost - $30,908,417 and
$385,258,378, respectively) $34,244,016 $506,197,251
Cash 1,333,119 --
Collateral received for securities loaned 3,001,500 56,298,740
Receivable for investments sold 744,075 5,926,094
Receivable for fund shares sold 2,980,482 12,649,767
Receivable from investment adviser 7,186 --
Receivable from foreign tax reclaims 26,727 --
Dividends and interest receivable 29,721 164,622
Prepaid expenses and other assets 44,104 111,396
----------- ------------
Total Assets 42,410,930 581,347,870
----------- ------------
LIABILITIES
Payable upon return of securities loaned 3,001,500 56,298,740
Payable for investments purchased 426,419 12,135,788
Payable for Fund shares repurchased 322,598 1,001,287
Advisory fee payable -- 363,318
Distribution fee payable (Common shares) 7,252 86,845
Accrued expenses payable -- 194,731
----------- ------------
Total Liabilities 3,757,769 70,080,709
----------- ------------
NET ASSETS
Capital stock, $0.001 Par value 3,001 6,186
Paid-in capital 30,169,083 363,413,546
Undistributed net investment loss (312,273) (1,046,579)
Accumulated net realized gain from investments,
and foreign currency related transactions, if any 5,459,438 27,955,424
Net unrealized appreciation on investments, foreign
currency related translations and other, if any 3,333,912 120,938,584
----------- ------------
Net Assets $38,653,161 $511,267,161
=========== ============
INSTITUTIONAL SHARES
Net assets $ 129,657
-----------
Shares outstanding 10,051
-----------
Net asset value, offering price and redemption price
per share $ 12.90
===========
COMMON SHARES
Net assets $38,523,504 $511,267,161
----------- ------------
Shares outstanding 2,991,321 6,185,960
----------- ------------
Net asset value, offering price and redemption price
per share $ 12.88 $ 82.65
=========== ============
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
WARBURG PINCUS FUNDS
STATEMENTS OF OPERATIONS
For the Six Months Ended February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
EUROPEAN TELECOMMUNICATIONS
EQUITY FUND FUND
----------- ------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 89,260 $ 271,448
Interest 46,751 549,803
Securities lending 2,134 69,453
Foreign taxes withheld (5,994) (7,779)
---------- ------------
Total Investment Income 132,151 882,925
---------- ------------
EXPENSES
Investment advisory fees 150,121 1,044,183
Administration fees 33,773 182,732
Printing fees 68,198 19,968
Custodian fees 40,663 53,611
Distribution fees 37,391 261,135
Registration fees 32,897 88,915
Legal fees 28,061 8,357
Interest expense 13,846 --
Audit fees 6,259 4,524
Directors fees 6,080 5,377
Transfer agent fees 4,249 73,439
Insurance expense 88 289
Miscellaneous fees 6,129 5,095
---------- ------------
427,755 1,747,625
Less fees waived and reimbursed (197,975) (24,723)
---------- ------------
Total Expenses 229,780 1,722,902
---------- ------------
Net Investment Loss (97,629) (839,977)
---------- ------------
Realized and Unrealized Gain/(Loss) on Investments
and Foreign Currency Transactions
Net realized gain/(loss) from:
Security transactions 7,199,803 29,697,789
Foreign exchange transactions (214,538) (206,602)
---------- ------------
6,985,265 29,491,187
---------- ------------
Net change in unrealized appreciation/(depreciation):
Investments 2,386,309 115,836,071
Translation of assets and
liabilities in foreign currencies (5,585) (460)
---------- ------------
2,380,724 115,835,611
---------- ------------
Net Gain on Investments and Foreign Currency Transactions 9,365,989 145,326,798
---------- ------------
Net Increase in Net Assets Resulting From Operations $9,268,360 $144,486,821
========== ============
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
WARBURG PINCUS FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EUROPEAN EQUITY FUND GLOBAL TELECOMMUNICATIONS FUND
------------------------------------- ------------------------------------
FOR THE SIX MONTHS FOR THE PERIOD FOR THE SIX MONTHS FOR THE YEAR
ENDED JANUARY 28, 1999* ENDED ENDED
FEBRUARY 29, 2000 TO AUGUST 31, 1999 FEBRUARY 29, 2000 AUGUST 31, 1999
------------------ ------------------ ------------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income/(loss) $ (97,629) $ 213,741 $ (839,977) $ (67,321)
Net gain/(loss) on investments
and foreign currency
transactions 9,365,989 (865,652) 145,326,798 7,197,021
----------- ----------- ------------ -----------
Net increase/(decrease) in
net assets resulting from
operations 9,268,360 (651,911) 144,486,821 7,129,700
----------- ----------- ------------ -----------
Dividends and Distributions to
shareholders:
From net investment income:
Institutional shares (667) -- -- --
Common shares (134,704) -- -- --
From net realized capital gains:
Institutional shares -- -- -- --
Common shares -- -- (3,754,559) (179,290)
----------- ----------- ------------ -----------
Total distributions to
shareholders (135,371) -- (3,754,559) (179,290)
----------- ----------- ------------ -----------
Net capital share transactions 4,863,728 25,308,355 305,369,408 57,496,988
----------- ----------- ------------ -----------
Total increase in
net assets 13,996,717 24,656,444 446,101,670 64,447,398
NET ASSETS:
Beginning of period 24,656,444 -- 65,165,491 718,093
----------- ----------- ------------ -----------
End of period $38,653,161 $24,656,444 $511,267,161 $65,165,491
=========== =========== ============ ===========
Undistributed net investment
income/(loss) $ (312,273) $ 135,265 $ (1,046,579) $ --
=========== =========== ============ ===========
<FN>
* Inception Date
</FN>
</TABLE>
20
<PAGE>
WARBURG PINCUS FUNDS
EUROPEAN EQUITY FUND FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INSTITUTIONAL COMMON
---------------------------------------- ------------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
FEBRUARY 29, 2000 JANUARY 28, 1999* FEBRUARY 29, 2000 JANUARY 28, 1999*
(UNAUDITED) TO AUGUST 31, 1999 (UNAUDITED) TO AUGUST 31, 1999
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 9.80 $10.00 $ 9.79 $ 10.00
------ ------ ------- -------
Income from investment operations
Net investment income (0.01) 0.09 (0.04) 0.08
Net gain/(loss) on investments
and foreign currency
transactions (both realized
and unrealized) 3.18 (0.29) 3.18 (0.29)
------ ------ ------- -------
Total from investment operations 3.17 (0.20) 3.14 (0.21)
------ ------ ------- -------
Dividends from net investment
income (0.07) -- (0.05) --
------ ------ ------- -------
Net asset value, end of period $12.90 $ 9.80 $ 12.88 $ 9.79
====== ====== ======= =======
Total return 32.38%(c) (2.00)%(c) 32.12%(c) (2.10)%(c)
Ratios/Supplemental Data:
Net assets, end of period
(000s omitted) $ 130 $ 98 $38,524 $24,588
Ratio of expenses to average
net assets 1.23%(a)(b) 1.16%(a)(b) 1.53%(a)(b) 1.46%(a)(b)
Ratio of net investment income/
(loss) to average net assets (0.37)%(b) 1.67%(b) (0.65)%(b) 1.41%(b)
Fund turnover rate 112%(c) 161%(c) 112%(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 2.39% annualized for the six months ended February 29, 2000 and
2.29% annualized for the period ended August 31, 1999. Without the volunary
waiver of advisory fees and administration fees, the ratios of expenses to
average net assets for the Common Class would have been 2.72% annualized for
the six months ended February 29, 2000 and 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.
21
<PAGE>
WARBURG PINCUS FUNDS
GLOBAL TELECOMMUNICATIONS FUND FINANCIAL HIGHLIGHTS
(For a Share Outstanding Throughout each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON
------------------------------------------------------------
FOR THE SIX FOR THE YEAR ENDED FOR THE PERIOD
MONTHS ENDED AUGUST 31, DECEMBER 4, 1996*
FEBRUARY 29, 2000 ------------------- TO AUGUST 31,
(UNAUDITED) 1999 1998 1997
---------------- -------- ------ ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 41.22 $ 20.54 $17.30 $15.00
-------- ------- ------ ------
Income from investment operations
Net investment income/(loss) (0.10) (0.04) (0.01) 0.02
Net gain on investments and foreign
currency transactions
(both realized and unrealized) 42.76 23.56 4.29 2.28
-------- ------- ------ ------
Total from investment operations 42.66 23.52 4.28 2.30
-------- ------- ------ ------
Distributions from capital gains (1.23) (2.84) (1.04) --
-------- ------- ------ ------
Net asset value, end of period $ 82.65 $ 41.22 $20.54 $17.30
======== ======= ====== ======
Total return 104.49%(c) 120.73% 25.38% 15.33%(c)
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $511,267 $65,165 $ 718 $ 569
Ratio of expenses to average net assets 1.65%(a)(b) 1.65%(a) 1.65%(a) 1.65%(a)(b)
Ratio of net investment income (loss) to
average net assets (0.80)%(b) (0.35)% (0.03)% 0.16%(b)
Fund turnover rate 50%(c) 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 1.67% annualized for the six months ended February 29, 2000 and 2.52%
and 6.86% for the years ended August 31, 1999 and 1998, respectively, 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.
22
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Funds covered in this report are comprised of Warburg,
Pincus European Equity Fund, Inc. ("European Equity") and Warburg, Pincus Global
Telecommunication Fund, 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 agreement 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-administration fee.
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.
Please refer to each Fund's prospectus(es) and statement 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 maturities 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
23
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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. European
Equity and 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 U.S.
tax-basis treatment. Temporary differences do not require reclassification
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.
24
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
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. Neither Fund had open repurchase
agreements at February 29, 2000.
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 liquid securities 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
a perfect 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.
25
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
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 the 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 Fund 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
February 29, 2000 is as follows:
MARKETS VALUE OF VALUE OF
FUND SECURITIES LOANED COLLATERAL RECORDED
--------------------------- ----------------- -------------------
European Equity $ 2,880,312 $ 3,001,500
Global Telecommunications 55,116,669 56,298,740
26
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
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, and the
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 is 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 other 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.
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
27
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 changes can be
expected to result in increased volatility of market prices of lower-rated
debt securities and (to the extent a Fund invests in junk bonds) the Fund's
net asset value.
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
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 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
---------------------- ---------------------------------
European Equity 1.00% Of average daily net assets
Global Telecommunications 1.00% Of average daily net assets
CSAM may, at its discretion, voluntarily waive all or any portion of its
advisory fee for any of the Funds. For the six months ended February 29, 2000
advisory fees and waivers for each of the Funds were as follows:
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
---------------------- ------------- ---------- ------------
European Equity $ 150,121 $(150,121) $ --
Global Telecommunications 1,044,183 (11,032) 1,033,151
CSAM reimbursed expenses of European Equity, in the amount of $21,558 for
the six months ended February 29, 2000.
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 .50% of the average daily net assets of
European Equity. For the six months ended February 29, 2000, CSAM Limited was
entitled to receive $75,061 from CSAM for sub-advisory services provided to
European Equity, all of which were waived.
28
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
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 Fund Services, Inc. ("CFSI"), a wholly-owned subsidiary of
Credit Suisse Asset Management, LLC. served as co-administrator of each Fund
until November 1, 1999. On November 1, 1999, Credit Suisse Asset Management
Securities, Inc. ("CSAMSI") replaced CFSI as co-administrator to each portfolio.
PFPC Inc. ("PFPC"), an indirect subsidiary of PNC Financial Services Group, also
serves as each Fund's co-administrator. For administration services, each Fund,
except European Equity, pays CSAMSI 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, CSAMSI is entitled to receive from the Fund a monthly fee equal
to annual rate of.10% of average daily net assets of the Common shares. No
compensation is payable by the Funds to CSAMSI for co-administration services
for the Institutional shares.
CFSI, at its discretion, voluntarily waived a portion of its
co-administration fees for the Funds. For the period September 1, 1999 to
October 31, 1999, co-administration fees earned and waived by CFSI on the Common
shares were as follows:
<TABLE>
<CAPTION>
GROSS NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
--------------------- --------------------- ------- ---------------------
<S> <C> <C> <C>
European Equity $3,989 $(1,995) $1,994
Global Telecommunications 6,554 (6,554) --
</TABLE>
CSAMSI may, at its discretion, voluntarily waive all or any portion of its
administrative fee for any of the Funds. For the period November 1, 1999 to
February 29, 2000, co-administrative service fees earned and waived by CSAMSI on
the Common shares were as following:
<TABLE>
<CAPTION>
GROSS CO-ADMINISTRATIVE NET CO-ADMINISTRATIVE
FUND FEE WAIVER FEE
--------------------- ----------------------- ------- ---------------------
<S> <C> <C> <C>
European Equity $10,967 $(5,483) $ 5,484
Global Telecommunications 45,655 -- 45,655
</TABLE>
For administration services, PFPC currently receives a fee calculated at
annual rate of .125% on each Fund's average daily net asset, except European
Equity, subject to a minimum annual fee and exclusive of out-of-pocket expenses.
For European Equity, PFPC is entitled to receive a fee calculated at
29
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (CONTINUED)
an annual rate of .12% of the funds first $250 million in average daily net
assets, .10% of the next $250 million in average daily net assets, .08% of the
next $250 million in average daily net assets and .05% of average daily net
assets over $750 million, subject to minimum annual fee and exclusive of
out-of-pocket expense. PFPC may, at its discretion, voluntarily waive all or any
portion of its administration fee for any of the Funds. For the six months ended
February 29, 2000, the co-administration fee earned and waived by PFPC were as
follows:
<TABLE>
<CAPTION>
GROSS CO-ADMINISTRATIVE NET CO-ADMINISTRATIVE
FUND FEE WAIVER FEE
--------------------- ----------------------- ------- ---------------------
<S> <C> <C> <C>
European Equity $ 18,817 $(18,817) $ --
Global Telecommunications 130,523 (7,137) 123,386
</TABLE>
In addition to serving as each Funds co-administrator, CSAMSI served as
distributor of each Fund's shares until January 1, 2000. On January 1, 2000,
Provident Distributors, Inc. ("PDI") replaced CSAMSI as distributor to each
Fund. No compensation is payable by any of the Funds to PDI for distribution
services, but CSAMSI receives compensation from each Fund's Common shares under
the co-administration agreement for shareholder servicing and distribution. For
the Shareholder Servicing and Distribution Plan on the Common shares, CSAMSI
receives a fee calculated at an annual rate .25% of the average daily net assets
of the Common shares of each Fund. For the six months ended February 29, 2000,
shareholder servicing and distribution fees, earned by CSAMSI were as follows:
FUND DISTRIBUTION FEE
--------------------- ----------------
European Equity $ 37,391
Global Telecommunications 261,135
NOTE 3. PURCHASES AND SALES OF SECURITIES
For the six months ended February 29, 2000, purchases and sales of
investment securities (other than short-term investments) were as follows:
INVESTMENT SECURITIES
------------------------------
FUND PURCHASES SALES
--------------------- ------------ -----------------
European Equity $ 30,808,407 $ 31,334,860
Global Telecommunications 347,512,067 100,187,155
30
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 4. CAPITAL SHARES
Transactions in capital shares for each period were as follows:
<TABLE>
<CAPTION>
EUROPEAN EQUITY FUND
---------------------------------------------------------------------------------------------------
INSTITUTIONAL COMMON
------------------------------------------------ --------------------------------------------------
FOR THE SIX MONTHS ENDED FOR THE PERIOD FOR THE SIX MONTHS ENDED FOR THE PERIOD
FEBRUARY 29, 2000 JANUARY 28, 1999* FEBRUARY 29, 2000 JANUARY 28, 1999*
(UNAUDITED) THROUGH AUGUST 31, 1999 (UNAUDITED) THROUGH AUGUST 31, 1999
------------------------ ----------------------- ----------------------- -----------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
------- --------- ------ ---------- ---------- ------------ --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold -- $ -- 10,003 $100,030 6,223,639 $ 73,924,345 4,115,201 $40,639,910
Shares issued in
reinvestment
of dividends 48 566 -- -- 11,320 132,331 -- --
Shares repur-
chased -- -- -- -- (5,753,389) (69,193,513) (1,605,450) (15,431,585)
-- ---- ------ -------- ---------- ------------ ---------- -----------
Net increase 48 $566 10,003 $100,030 481,570 $ 4,863,163 2,509,751 $25,208,325
== ==== ====== ======== ========== ============ ========== ===========
<FN>
*Inception date.
</FN>
</TABLE>
GLOBAL TELECOMMUNICATIONS FUND
--------------------------------------------------------
COMMON
--------------------------------------------------------
FOR THE SIX MONTHS ENDED
FEBRUARY 29, 2000 FOR THE YEAR ENDED
(UNAUDITED) AUGUST 31, 1999
---------------------------- -------------------------
SHARES VALUE SHARES VALUE
------------- ------------- ----------- -----------
Shares sold 6,740,206 $ 450,096,204 1,820,386 $68,055,242
Shares issued in
reinvestment of
dividends 57,720 3,567,095 5,883 167,194
Shares repurchased (2,192,727) (148,293,891) (280,472) (10,725,448)
------------ ------------- ----------- -----------
Net increase 4,605,199 $ 305,369,408 1,545,797 $57,496,988
============ ============= =========== ===========
*Inception date.
On February 29, 2000, the number of shareholders that held 5% or more of
the outstanding shares are as follows:
NUMBER OF APPROXIMATE PERCENTAGE
SHAREHOLDERS OF OUTSTANDING SHARES
------------ ----------------------
European Equity Institutional shares 1 99.97%
European Equity Common shares 2 71.52
31
<PAGE>
WARBURG PINCUS FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 5. 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 agents, Bank of Nova Scotia as syndication agent and certain other
lender, for temporary or emergency purposes primarily relating to unanticipated
portfolio share redemption. 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
participation 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%. During the six months ending
February 29, 2000, the following fund had borrowings under line of credit
agreement.
<TABLE>
<CAPTION>
AVERAGE DAILY AVERAGE MAXIMUM DAILY LOAN OUTSTANDING
PORTFOLIO LOAN BALANCE INTEREST RATE % LOAN OUTSTANDING AT 02/29/00
--------------- ------------ --------------- ---------------- ----------------
<S> <C> <C> <C> <C>
EUROPEAN EQUITY $448,599 6.09% $5,858,000 $0
</TABLE>
32
<PAGE>
THE WARBURG PINCUS FUNDS
SPECIAL SHAREHOLDER MEETING RESULTS
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
WARBURG PINCUS EUROPEAN EQUITY FUND
WARBURG PINCUS GLOBAL TELECOMMUNICATIONS FUND
A special meeting of shareholders of each Fund was held on May 21, 1999. At the
special meeting, the following persons were elected as directors of each Fund,
constituting the entire Board of Directors: Richard H. Francis, Jack W. Fritz,
Jeffrey E. Garten, James S. Pasman, Jr., William W. Priest, Steven N. Rappaport,
Arnold M. Reichman and Alexander B.
Trowbridge.
In addition, shareholders of each Fund voted on the following matters:
Proposal 2: Ratification of the selection of PricewaterhouseCoopers
LLP as the independent accountants for each of the Funds
for the fiscal year ending August 31, 1999.
The voting results for each Fund were as follows:
Election of Directors:
- --------------------------------------------------------------------------------
EUROPEAN EQUITY For Withheld
- --------------------------------------------------------------------------------
Richard H. Francis 1,563,817.1831 46,857.0038
- --------------------------------------------------------------------------------
Jack W. Fritz 1,568,007.1941 42,666.9928
- --------------------------------------------------------------------------------
Jeffrey E. Garten 1,565,720.2961 44,953.8908
- --------------------------------------------------------------------------------
James S. Pasman, Jr. 1,565,842.6191 44,831.5678
- --------------------------------------------------------------------------------
William W. Priest 1,568,007.8711 42,666.3158
- --------------------------------------------------------------------------------
Steven N. Rappaport 1,567,490.5061 43,183.6808
- --------------------------------------------------------------------------------
Arnold M. Reichman 1,568,607.8711 43,066.3158
- --------------------------------------------------------------------------------
Alexander B. Trowbridge 1,565,051.0831 45,623.1038
- --------------------------------------------------------------------------------
Proposal 2:
- --------------------------------------------------------------------------------
% of Shares to Total % of Shares to Total Shares
Shares Outstanding Shares Vote
- --------------------------------------------------------------------------------
For 1,585,178.7222 56.4308% 98.4171%
- --------------------------------------------------------------------------------
Against 12,845.8637 0.4573% 0.7975%
- --------------------------------------------------------------------------------
Abstain 12,649.6010 0.4503% 0.7854%
- --------------------------------------------------------------------------------
33
<PAGE>
WARBURG PINCUS FUNDS
SPECIAL SHAREHOLDER MEETING RESULTS (CONT'D)
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GLOBAL TELECOMMUNICATIONS For Withheld
- --------------------------------------------------------------------------------
Richard H. Francis 129,882.0290 1,716.8970
- --------------------------------------------------------------------------------
Jack W. Fritz 129,217.0550 2,381.8710
- --------------------------------------------------------------------------------
Jeffrey E. Garten 129,404.0120 2,194.9140
- --------------------------------------------------------------------------------
James S. Pasman, Jr. 129,882.0290 1,716.8970
- --------------------------------------------------------------------------------
William W. Priest 129,930.6370 1,668.2890
- --------------------------------------------------------------------------------
Steven N. Rappaport 130,019.5860 1,579.3400
- --------------------------------------------------------------------------------
Arnold M. Reichman 129,930.6370 1,668.2890
- --------------------------------------------------------------------------------
Alexander B. Trowbridge 129,266.4550 2,332.4710
- --------------------------------------------------------------------------------
Proposal 2:
% of Shares to Total % of Shares to Total Shares
Shares Outstanding Shares Vote
- --------------------------------------------------------------------------------
For 129,971.3690 40.8565% 98.7632%
- --------------------------------------------------------------------------------
Against 712.5570 0.2240% 0.5415%
- --------------------------------------------------------------------------------
Abstain 915.0000 0.2876% 0.6953%
- --------------------------------------------------------------------------------
34
<PAGE>
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<PAGE>
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<PAGE>
[GRAPHIC OMITTED]
WARBURG PINCUS FUNDS
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874) o www.warburg.com
PROVIDENT DISTRIBUTORS, INC., DISTRIBUTOR. WPEGT-3-0200
