<PAGE>
NEUBERGER BERMAN
Neuberger Berman
EQUITY SERIES-Registered Trademark-
-----------------------------------------------------------
Genesis Institutional ANNUAL REPORT
AUGUST 31, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE FUND
CHAIRMAN'S LETTER A-4
PORTFOLIO COMMENTARY A-5
GROWTH OF A DOLLAR
CHART A-9
COMPARISON OF A
$10,000 INVESTMENT
FINANCIAL STATEMENTS B-1
FINANCIAL HIGHLIGHTS B-7
PER SHARE DATA
REPORT OF INDEPENDENT
AUDITORS B-9
THE PORTFOLIO
SCHEDULE OF INVESTMENTS C-1
TOP TEN EQUITY
HOLDINGS
FINANCIAL STATEMENTS C-6
FINANCIAL HIGHLIGHTS C-13
REPORT OF INDEPENDENT
AUDITORS C-14
DIRECTORY D-1
OFFICERS AND TRUSTEES D-2
</TABLE>
The "Neuberger Berman" name and logo are service marks of Neuberger Berman, LLC.
"Neuberger Berman Management Inc." and the fund name in this report are either
service marks or registered trademarks of Neuberger Berman Management Inc.
-C-2000 Neuberger Berman Management Inc.
A-3
<PAGE>
CHAIRMAN'S LETTER October 20, 2000
Dear Shareholder,
In recent years many growth stocks have excelled while value stocks have
languished. Some market observers declared value investing dead. We disagreed,
praising the long-term benefits of style diversification.
As measured by the growth and value stock benchmarks, growth stock investing
continued to be the most productive style in our fiscal year 2000. But, value
stocks came back to life, and Neuberger Berman value-oriented funds, including
Genesis Institutional, delivered attractive returns. Going forward, we can't
predict which investment style will provide the most generous short- to
intermediate-term returns. Over the longer term, however, we believe style
diversification will work to shareholders' advantage.
We have witnessed a similar pattern in the relative performance of stocks in
different capitalization sectors. In recent years, large-cap stocks materially
outperformed small and mid-cap stocks.(1) In fiscal 2000, small-and mid-cap
stocks generally excelled. We don't know which market capitalization sectors
will be the best relative performers in the year ahead, but again, we believe
diversification is advantageous over the long haul.
Diversification and patience -- the twin foundations of a prudent long-term
investment strategy -- paid off handsomely in fiscal 2000. We believe they will
continue to benefit shareholders in the years ahead.
In closing, it is with great sadness that we report the recent passing of John
T. Patterson, Jr. John served as a Trustee of our equity funds since 1992. He
was widely respected for his intelligence and caring nature, a gracious man
whose pleasant vitality was a continuous inspiration. We will miss him deeply.
Sincerely,
/s/Peter Sundman
Peter Sundman
Chairman of the Board
Neuberger Berman Equity Series
(1)Mid-cap stocks, as represented by the Russell Midcap Index, returned 28.83%
for the fiscal year ending August 31, 2000. Small-cap stocks, as represented
by the Russell 2000 Index, returned 27.15%. Large-cap stocks, as represented
by the Russell 1000 Index, returned 20.14%. In the previous three fiscal
years ending August 31, the Russell 1000 had outperformed both the Russell
Midcap Index and the Russell 2000 Index.
A-4
<PAGE>
PORTFOLIO COMMENTARY
Neuberger Berman
----------------------------------------------------------------------
Genesis Institutional
For the six and twelve month periods concluding August 31, 2000, Genesis
Institutional gained 17.97% and 26.22% respectively, compared to the Russell
2000's drop of 6.38% and gain of 27.15% over the same time periods (see
page A-9 for comparison of a $10,000 investment and average annual total returns
as of August 31, 2000).*
Small-cap value stocks delivered solid returns in fiscal 2000. The Spring 2000
collapse of red-hot small-cap growth stocks with "more sizzle than substance"
(particularly in the Internet sector) appeared to give investors a renewed
appreciation of the fundamental merits of small-cap value stocks. Even after
this year's good performance, we believe small-cap value stocks remain
attractively valued. We think earnings prospects look good and valuations are
still modest compared to other equity asset classes. Value has continued to be
brought to fruition by corporate acquirers targeting bargains in the small-cap
value sector. Importantly, the outflow of capital from small-cap value mutual
funds appears to be abating, or perhaps even turning positive. This may provide
additional momentum for small-cap value stocks going forward.
Our technology stock investments made the greatest performance contribution in
fiscal 2000. As a result of our value discipline, we were materially
under-weighted, relative to our benchmark, in technology stocks throughout the
year. However, our holdings produced returns exceeding 70%, which is why the
technology sector was such a positive contributor. Some of our biggest winners
were somewhat mundane technology companies with small divisions in more
glamorous tech niches. For example, Methode Electronics, which is primarily an
auto electronics systems company, soared when it began talking about spinning
off its much smaller, but more exciting bandwidth enhancing optical electronic
components division. We exited our Methode position with a big gain. Over the
course of fiscal 2000, we booked profits in tech holdings that moved out of our
value range. We redirected some of our profits to technology stock opportunities
that seemed to us more
A-5
<PAGE>
----------------------------------------------------------------------
Genesis Institutional (Cont'd)
reasonably priced and took some money off the tech table to deploy in other
sectors. We will continue to invest in technology stocks on our own value terms.
Our energy investments also produced excellent gains. We were materially
over-weighted in this sector, with a bias toward oil services companies and
drillers, the leading performers in the energy group. We have taken some
profits, but are still committed to the energy sector. Inventories remain tight
and capacity is constrained. We believe the fundamental prospects for our energy
investments remain attractive, even if oil prices decline modestly from their
current highs.
The portfolio also benefited from the takeover of two portfolio holdings,
Cordant Technology and Central Newspapers. The former soared after the deal
announcement and the latter doubled after putting itself up for sale. We expect
more of the bargains in the portfolio to attract corporate suitors in the years
ahead.
Although our capital goods holdings posted a modest gain for the year -- every
sector represented in the portfolio finished in positive performance
territory -- we had some major disappointments in this sector. Five of the
stocks on our Worst 10 Performance List, AAR Corp, Wallace Computer Services,
Kaydon Corp., Aviall Inc., and Dionex Corp., are in the capital goods category.
Each declined as a result of company specific earnings problems. Our inclination
is to be patient with these investments that we believe can get back on the
earnings track.
Returns from our financial services investments were not as lofty as the gains
in our technology and energy holdings, but we believe we have identified some
excellent bargains. Let us give you an example. Mutual Risk provides
administrative and claims handling services to companies that insure themselves.
Mutual Risk's revenue and earnings growth has been tempered by declining prices
for property and casualty and workman's compensation insurance. Cutthroat
competition in the insurance industry has abated, however, and insurance rates
are now on the rise. This should materially increase the number of companies
A-6
<PAGE>
----------------------------------------------------------------------
Genesis Institutional (Cont'd)
choosing the self-insurance option, and therefore, the demand for Mutual Risk's
services. We see Mutual Risk's earnings beginning to accelerate in the next two
or three quarters and believe the company can grow earnings at 20% or better
annually over the next several years. At the close of this reporting period,
Mutual Risk stock was trading at 14 times our 2001 earnings estimate. Of course,
Mutual Risk may not live up to our earnings and stock appreciation expectations
and should not be considered a recommendation. However, we think the stock is an
excellent addition to the Genesis Portfolio.
In closing, we are delighted by the rebound in the small-cap value sector and
pleased that the fund performed as it did. Looking ahead, we believe we will
continue to enjoy a fertile environment for our value-oriented discipline.
Sincerely,
/s/ Judith Vale /s/ Robert D'Alelio
Judith Vale and Robert D'Alelio
Portfolio Co-Managers
*For index definitions, refer to page A-8, titled "Glossary of Indices." The
Portfolio invests in many securities not included in the indices listed.
The composition, industries and holdings of the Portfolio are subject to
change. Genesis Portfolio is invested in a wide array of stocks and no single
holding makes up more than a small fraction of the Portfolio's total assets.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY
IN COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE PROSPECTUS.
Past performance is no guarantee of future results. Shares when redeemed may be
worth more or less than original cost.
A-7
<PAGE>
GLOSSARY OF INDICES
<TABLE>
<S> <C>
S&P 500 INDEX: The S&P 500 Index is widely regarded
as the standard for measuring
large-cap U.S. stock markets
performance and includes a
representative sample of leading
companies in leading industries.
RUSSELL 1000-REGISTERED TRADEMARK- INDEX: Measures the performance of the 1,000
largest companies in the Russell
3000-Registered Trademark- Index
(which measures the performance of
the 3,000 largest U.S. companies
based on total market
capitalization). The Russell 1000
Index represents approximately 92% of
the total market capitalization of
the Russell 3000 Index.
RUSSELL 1000-REGISTERED TRADEMARK- VALUE Measures the performance of those
INDEX: Russell 1000 companies with lower
price-to-book ratios and lower
forecasted growth values.
RUSSELL 1000-REGISTERED TRADEMARK- GROWTH Measures the performance of the
INDEX: Russell 1000-Registered Trademark-
companies with higher price-to-book
ratios and higher forecasted growth
values.
RUSSELL 2000-REGISTERED TRADEMARK- INDEX: An unmanaged index consisting of
securities of the 2,000 issuers
having the smallest capitalization in
the Russell 3000-Registered
Trademark- Index, representing
approximately 8% of the Russell 3000
total market capitalization. The
smallest company's market
capitalization is roughly $178
million.
RUSSELL 2000-REGISTERED TRADEMARK- GROWTH Measures the performance of those
INDEX: Russell 2000-Registered Trademark-
Index companies with higher price-
to-book ratios and higher forecasted
growth values.
RUSSELL 2000-REGISTERED TRADEMARK- VALUE Measures the performance of those
INDEX: Russell 2000-Registered Trademark-
Index companies with lower price-to-
book ratios and lower forecasted
growth values.
EAFE-REGISTERED TRADEMARK- INDEX: Also known as the Morgan Stanley
Capital International Europe,
Australasia, Far East Index. An
unmanaged index of over 1,000 foreign
stock prices. The index is translated
into U.S. dollars and includes
reinvestment of all dividends and
capital gain distributions.
RUSSELL MIDCAP-REGISTERED TRADEMARK- An unmanaged index that measures the
GROWTH INDEX: performance of those Russell Midcap-
Trademark- Index (the 800 smallest
companies in the Russell 1000 Index)
companies with higher price-to-book
ratios and higher forecasted growth
values.
RUSSELL MIDCAP-REGISTERED TRADEMARK- VALUE An unmanaged index that measures the
INDEX: performance of those Russell Midcap-
Trademark- Index (the 800 smallest
companies in the Russell 1000 Index)
companies with lower price-to-book
ratios and lower forecasted growth
values.
</TABLE>
Please note that indices do not take into account any fees and expenses of the
individual securities that they track and that individuals cannot invest
directly in any index. Data about the performance of these indices are prepared
or obtained by Neuberger Berman Management Inc. and include reinvestment of all
dividends and capital gain distributions. The Portfolios may invest in many
securities not included in the above-described indices.
A-8
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Genesis Institutional
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN(1)
1 5 10 YEAR
YEAR YEAR
<S> <C> <C> <C>
GENESIS
INSTITUTIONAL(2) +26.22% +16.44% +16.84%
RUSSELL 2000-registered trademark-(2) +27.15% +13.46% +16.20%
</TABLE>
<TABLE>
<CAPTION>
GENESIS INSTITUTIONAL RUSSELL 2000
1990 $10,000 $10,000
<S> <C> <C>
1991 $13,536 $13,125
1992 $14,226 $14,083
1993 $17,670 $18,664
1994 $18,512 $19,759
1995 $22,157 $23,875
1996 $26,881 $26,459
1997 $38,794 $34,120
1998 $31,492 $27,502
1999 $37,569 $35,301
2000 $47,421 $44,887
</TABLE>
The performance information for Neuberger Berman Genesis Institutional is as
of August 31, 2000. Neuberger Berman Genesis Institutional started operating on
July 1, 1999. It has identical investment objectives and policies, and invests
in the same Portfolio as Neuberger Berman Genesis Fund ("Sister Fund"), which is
also managed by Neuberger Berman Management Inc. ("Management"). The performance
information shown in the above chart for the period before July 1, 1999, is for
the Sister Fund. Management voluntarily bears certain operating expenses that
exceed, in the aggregate, 0.85% of average daily net assets per annum of Genesis
Institutional. Absent such arrangement, the average annual total returns of
Genesis Institutional would have been less.
1. "Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in Genesis Institutional and the return on
the investment both will fluctuate, and redemption proceeds may be higher or
lower than an investor's original cost.
2. The Russell 2000 Index is an unmanaged index that measures the performance of
the 2,000 issuers having the smallest capitalization in the Russell
3000-Registered Trademark- Index, representing approximately 8% of the Russell
2000 total market capitalization. The smallest company's market capitalization
is roughly $178 million. Please note that indices do not take into account any
fees and expenses of investing in the individual securities that they track, and
that individuals cannot invest directly in any index. Data about the performance
of this index are prepared or obtained by Management and include reinvestment of
all dividends and capital gain distributions. The Portfolio may invest in many
securities not included in the above-described index.
THE RISKS INVOLVED IN SEEKING CAPITAL APPRECIATION FROM INVESTMENTS PRIMARILY IN
COMPANIES WITH SMALL MARKET CAPITALIZATION ARE SET FORTH IN THE PROSPECTUS.
A-9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
----------------------------------------------------------------------
Genesis Institutional
<TABLE>
<CAPTION>
August 31,
(000'S OMITTED EXCEPT PER SHARE AMOUNT) 2000
<S> <C>
-------------
ASSETS
Investment in Portfolio, at value (Note A) $ 233,251
-------------
LIABILITIES
Payable for Trust shares redeemed 1,101
Payable to administrator -- net (Note B) 20
Accrued expenses 19
-------------
1,140
-------------
NET ASSETS at value $ 232,111
-------------
NET ASSETS consist of:
Par value $ 9
Paid-in capital in excess of par value 191,526
Accumulated undistributed net investment
income 315
Accumulated net realized gains on investment 19,589
Net unrealized appreciation in value of
investment 20,672
-------------
NET ASSETS at value $ 232,111
-------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 9,134
-------------
NET ASSET VALUE, offering and redemption price per
share $25.41
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-1
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman
----------------------------------------------------------------------
Genesis Institutional
<TABLE>
<CAPTION>
For the
Year Ended
August 31,
(000'S OMITTED) 2000
<S> <C>
-----------
INVESTMENT INCOME
Investment income from Portfolio (Note A) $ 2,547
-----------
Expenses:
Administration fee (Note B) 322
Registration and filing fees 94
Legal fees 11
Shareholder reports 10
Custodian fees 10
Auditing fees 8
Shareholder servicing agent fees 5
Trustees' fees and expenses 3
Miscellaneous 5
Expenses from Portfolio (Notes A & B) 1,622
-----------
Total expenses 2,090
Expenses reimbursed by administrator and
reduced by custodian fee expense offset
arrangement (Note B) (264)
-----------
Total net expenses 1,826
-----------
Net investment income 721
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS FROM
PORTFOLIO (NOTE A)
Net realized gain on investment securities 19,687
Change in net unrealized appreciation
(depreciation) of investment securities 29,379
-----------
Net gain on investments from Portfolio
(Note A) 49,066
-----------
Net increase in net assets resulting from
operations $ 49,787
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-2
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
----------------------------------------------------------------------
Genesis Institutional
<TABLE>
<CAPTION>
Period from
July 1, 1999
Year (Commencement
Ended of Operations) to
August 31, August 31,
(000'S OMITTED) 2000 1999
<S> <C> <C>
-------------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 721 $ 190
Net realized gain on investments
from Portfolio (Note A) 19,687 454
Change in net unrealized
appreciation (depreciation) of
investments from Portfolio
(Note A) 29,379 (8,707)
-------------------------------
Net increase (decrease) in net
assets resulting from operations 49,787 (8,063)
-------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (420) --
Net realized gain on investments (1,154) --
-------------------------------
Total distributions to shareholders (1,574) --
-------------------------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 23,464 241,112
Proceeds from reinvestment of
dividends and distributions 1,574 --
Payments for shares redeemed (65,364) (8,825)
-------------------------------
Net increase (decrease) from Trust
share transactions (40,326) 232,287
-------------------------------
NET INCREASE IN NET ASSETS 7,887 224,224
NET ASSETS:
Beginning of year 224,224 --
-------------------------------
End of year $ 232,111 $ 224,224
-------------------------------
Accumulated undistributed net
investment income at end of year $ 315 $ 190
-------------------------------
NUMBER OF TRUST SHARES:
Sold 1,077 11,479
Issued on reinvestment of dividends
and distributions 78 --
Redeemed (3,079) (421)
-------------------------------
Net increase (decrease) in shares
outstanding (1,924) 11,058
-------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
B-3
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Equity Series
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger Berman Genesis Institutional (the "Fund") is a separate
operating series of Neuberger Berman Equity Series (the "Trust"), a Delaware
business trust organized pursuant to a Trust Instrument dated September 22,
1998. The Trust is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and its shares are registered under the Securities Act of 1933,
as amended (the "1933 Act"). The Fund had no operations until July 1, 1999,
other than matters relating to its organization and registration as a
diversified, open-end management investment company under the 1940 Act, and
registration of its shares under the 1933 Act. The trustees of the Trust may
establish additional series or classes of shares without the approval of
shareholders.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
The Fund seeks to achieve its investment objective by investing all of its
net investable assets in the Neuberger Berman Genesis Portfolio of Equity
Managers Trust (the "Portfolio") having the same investment objective and
policies as the Fund. The value of the Fund's investment in the Portfolio
reflects the Fund's proportionate interest in the net assets of the Portfolio
(12.60% at August 31, 2000). The performance of the Fund is directly affected
by the performance of the Portfolio. The financial statements of the
Portfolio, including the Schedule of Investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements.
2) PORTFOLIO VALUATION: The Fund records its investment in the Portfolio at
value. Investment securities held by the Portfolio are valued as indicated in
the notes following the Portfolio's Schedule of Investments.
3) TAXES: The Fund is treated as a separate entity for U.S. Federal income tax
purposes. It is the policy of the Fund to qualify as a regulated investment
company by complying with the provisions available to certain investment
companies, as defined in applicable sections of the Internal Revenue Code,
and to make distributions of investment company taxable income and net
capital gains (after reduction for any amounts available for U.S. Federal
income tax purposes as capital loss carryforwards) sufficient to relieve it
from all, or substantially all, U.S. Federal income taxes. Accordingly, the
Fund paid no U.S. Federal income taxes and no provision for U.S. Federal
income taxes was required.
B-4
<PAGE>
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund earns income, net of
Portfolio expenses, daily on its investment in the Portfolio. Income
dividends and distributions from net realized capital gains, if any, are
normally distributed in December. Income dividends and capital gain
distributions to shareholders are recorded on the ex-dividend date. To the
extent the Fund's net realized capital gains, if any, can be offset by
capital loss carryforwards, it is the policy of the Fund not to distribute
such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) EXPENSE ALLOCATION: The Fund bears all costs of its operations. Expenses
incurred by the Trust with respect to any two or more funds are allocated in
proportion to the net assets of such funds, except where a more appropriate
allocation of expenses to each fund can otherwise be made fairly. Expenses
directly attributable to a fund are charged to that fund.
6) OTHER: All net investment income and realized and unrealized capital gains
and losses of the Portfolio are allocated pro rata among its respective Funds
and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS
WITH AFFILIATES:
The Fund retains Neuberger Berman Management Inc. ("Management") as its
administrator under an Administration Agreement ("Agreement"). Pursuant to this
Agreement the Fund pays Management an administration fee at the annual rate of
0.15% of the Fund's average daily net assets. The Fund indirectly pays for
investment management services through its investment in the Portfolio (see Note
B of Notes to Financial Statements of the Portfolio).
Management has contractually undertaken to reimburse the Fund through
December 31, 2002, for its operating expenses plus its pro rata portion of the
Portfolio's operating expenses (including the fees payable to Management, but
excluding interest, taxes, brokerage commissions, and extraordinary expenses)
which exceed, in the aggregate, 0.85% per annum of the Fund's average daily net
assets. For the year ended August 31, 2000, such excess expenses amounted to
$263,954.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of The New
York Stock Exchange and sub-adviser to the Portfolio, are wholly owned
subsidiaries of Neuberger Berman Inc., a publicly held company. Several
individuals who are officers and/or trustees of the Trust are also employees of
Neuberger and/or Management.
B-5
<PAGE>
The Fund also has a distribution agreement with Management. Management
receives no compensation therefor and no commissions for sales or redemptions of
shares of beneficial interest of the Fund.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statement
of Operations under the caption Expenses from Portfolio, was a reduction of
$354.
NOTE C -- INVESTMENT TRANSACTIONS:
During the year ended August 31, 2000, additions and reductions in the Fund's
investment in the Portfolio amounted to $20,152,000 and $60,898,000,
respectively.
B-6
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Genesis Institutional(1)
The following table includes selected data for a share outstanding throughout
each year and other performance information derived from the Financial
Statements. It should be read in conjunction with its corresponding Portfolio's
Financial Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
Year Ended July 1, 1999(2)
August 31, to August 31,
2000 1999
<S> <C> <C>
-----------------------------
Net Asset Value, Beginning of Year $20.28 $21.01
-----------------------------
Income From Investment Operations
Net Investment Income .08 .02
Net Gains or Losses on Securities
(both realized and unrealized) 5.20 (.75)
-----------------------------
Total From Investment Operations 5.28 (.73)
-----------------------------
Less Distributions
Dividends (from net investment
income) (.04) --
Distributions (from net capital
gains) (.11) --
-----------------------------
Total Distributions (.15) --
-----------------------------
Net Asset Value, End of Year $25.41 $20.28
-----------------------------
Total Return(3) +26.22% -3.47%(4)
-----------------------------
Ratios/Supplemental Data
Net Assets, End of Year (in
millions) $232.1 $224.2
-----------------------------
Ratio of Gross Expenses to Average
Net Assets(5) .85% .85%(6)
-----------------------------
Ratio of Net Expenses to Average Net
Assets(7) .85% .85%(6)
-----------------------------
Ratio of Net Investment Income to
Average Net Assets .34% .48%(6)
-----------------------------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
B-7
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Genesis Institutional
1) The per share amounts and ratios which are shown reflect income and expenses,
including the Fund's proportionate share of the Portfolio's income and
expenses.
2) The date investment operations commenced.
3) Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Fund during each fiscal
period and assumes dividends and other distributions, if any, were
reinvested. Results represent past performance and do not guarantee future
results. Investment returns and principal may fluctuate and shares when
redeemed may be worth more or less than original cost. Total return would
have been lower if Management had not reimbursed certain expenses.
4) Not annualized.
5) The Fund is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
6) Annualized.
7) After reimbursement of expenses by Management as described in Note B of Notes
to Financial Statements. Had Management not undertaken such action the
annualized ratios of net expenses to average daily net assets would have
been:
<TABLE>
<CAPTION>
Period from
Year Ended July 1, 1999 to
August 31, August 31,
2000 1999
------------------------------------------------------------------------------
<S> <C> <C>
Net Expenses .97% 1.15%
-----------------------------
</TABLE>
B-8
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees of
Neuberger Berman Equity Series and
Shareholders of Genesis Institutional
We have audited the accompanying statement of assets and liabilities of
Genesis Institutional, the only series constituting the Neuberger Berman Equity
Series (the "Trust"), as of August 31, 2000, and the related statement of
operations, the statement of changes in net assets, and the financial highlights
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Genesis Institutional of Neuberger Berman Equity Series at August 31, 2000, the
results of its operations, the changes in its net assets, and the financial
highlights for each of the periods indicated therein, in conformity with
accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
October 2, 2000
B-9
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
----------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. National-Oilwell 2.7%
2. Zebra Technologies 2.5%
3. Dallas Semiconductor 2.4%
4. Newport News Shipbuilding 2.4%
5. Alliant Techsystems 2.2%
6. AptarGroup Inc. 2.2%
7. Mutual Risk Management 2.1%
8. Fair, Isaac & Co. 2.1%
9. Trigon Healthcare 2.0%
10. United Stationers 1.7%
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
COMMON STOCKS (94.7%)
AEROSPACE (1.9%)
1,427,050 AAR Corp. $ 16,054(2)
754,100 Aviall Inc. 4,525(2)(3)
248,750 Ducommun Inc. 3,607(3)
329,700 Moog, Inc. Class A 10,715(3)
----------
34,901
----------
AUTOMOTIVE (0.8%)
674,100 Donaldson Co. 14,240
----------
BANKING & FINANCIAL (8.2%)
1,347,400 Banknorth Group 22,064
745,600 Cullen/Frost Bankers 23,114
100,000 Haven Bancorp 2,662
331,400 Highland Bancorp 8,368(2)
178,199 Hudson United Bancorp 4,488
28,200 M&T Bank 13,668
195,800 MBIA, Inc. 12,874
532,100 OceanFirst Financial 10,975
125,000 Queens County Bancorp 3,297
130,000 Richmond County Financial 2,616
1,031,975 Sterling Bancshares 14,625
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
317,350 Texas Regional Bancshares $ 8,092
1,014,100 Webster Financial 25,004
----------
151,847
----------
BUILDING, CONSTRUCTION & FURNISHING
(0.9%)
238,300 Lincoln Electric Holdings 3,485
298,500 Simpson Manufacturing 14,030(3)
----------
17,515
----------
BUSINESS SERVICES (0.1%)
789,400 SOS Staffing Services 2,171(2)(3)
----------
CONSUMER CYCLICALS (0.4%)
226,300 Valassis Communications 6,534(3)
----------
CONSUMER PRODUCTS & SERVICES (5.3%)
854,700 Alberto-Culver Class A 20,513
560,238 Block Drug 22,690
1,353,200 Church & Dwight 24,273
396,000 Matthews International 11,484
1,105,200 Ruddick Corp. 13,539
475,500 The First Years 5,230
----------
97,729
----------
DEFENSE (5.6%)
532,800 Alliant Techsystems 41,059(2)(3)
1,062,700 Newport News Shipbuilding 45,165
729,300 Primex Technologies 17,685(2)
----------
103,909
----------
ELECTRONICS (4.2%)
334,100 Benchmark Electronics 17,394(3)
1,092,000 Dallas Semiconductor 45,181
</TABLE>
C-1
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman
--------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
151,800 SCI Systems $ 9,374(3)
49,600 Technitrol, Inc. 6,324
----------
78,273
----------
ENERGY (3.7%)
677,300 Cabot Oil & Gas 13,546
655,200 Cross Timbers Oil 17,322
808,290 Swift Energy 23,390(3)
894,500 Unit Corp. 13,976(3)
----------
68,234
----------
FINANCIAL TECHNOLOGY (2.4%)
839,500 Fair, Isaac & Co. 38,565(2)
123,900 Investment Technology Group 5,947(3)
----------
44,512
----------
HEALTH CARE (9.9%)
148,000 Acuson Corp. 2,128(3)
303,700 Charles River Laboratories
International 8,333(3)
286,500 Datascope Corp. 10,099
669,300 DENTSPLY International 22,338
1,105,800 Haemonetics Corp. 27,852(3)
1,191,100 Mentor Corp. 25,236(2)
1,138,800 Patterson Dental 27,047(3)
198,700 STAAR Surgical 3,316(3)
714,000 Trigon Healthcare 36,860(3)
280,600 Universal Health Services
Class B 19,852(3)
----------
183,061
----------
INDUSTRIAL & COMMERCIAL PRODUCTS (7.4%)
615,500 Brady Corp. 17,811
733,700 Dionex Corp. 21,644(3)
689,600 IDEX Corp. 20,947
1,247,600 Kaydon Corp. 27,525
645,800 Roper Industries 20,908
2,135,300 Wallace Computer Services 24,823(2)
207,650 Woodhead Industries 4,101
----------
137,759
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
INSURANCE (8.5%)
949,200 Annuity and Life Re $ 24,916
514,200 Brown & Brown 13,723
652,800 FBL Financial Group 9,629
698,600 HCC Insurance Holdings 14,758
1,822,500 Mutual Risk Management 38,728
579,500 PartnerRe Ltd. 24,303
891,500 Scottish Annuity & Life
Holdings 8,135(2)
878,600 W. R. Berkley 23,283
----------
157,475
----------
INTERMEDIATES (0.8%)
612,900 Delta & Pine Land 14,978
----------
LODGING (0.2%)
441,700 Prime Hospitality 4,583(3)
----------
MACHINERY & EQUIPMENT (0.5%)
612,120 Gardner Denver Machinery 8,914(3)
----------
OFFICE EQUIPMENT (1.7%)
977,800 United Stationers 31,717(3)
----------
OIL SERVICES (9.4%)
302,700 Cal Dive International 17,405(3)
651,600 Friede Goldman Halter 3,665(3)
978,800 Global Industries 12,174(3)
320,400 Nabors Industries 15,239(3)
1,467,278 National-Oilwell 50,896(3)
798,400 Oceaneering International 13,922(3)
781,600 Offshore Logistics 13,580(3)
767,300 Pride International 18,895(3)
33,500 Smith International 2,663(3)
345,600 UTI Energy 12,874(3)
631,000 Varco International 12,739(3)
----------
174,052
----------
PACKING & CONTAINERS (2.2%)
1,723,900 AptarGroup Inc. 40,188
----------
</TABLE>
C-2
<PAGE>
August 31, 2000
--------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
PUBLISHING & BROADCASTING (1.0%)
258,300 Houghton Mifflin $ 12,705
232,900 Meredith Corp. 6,361
----------
19,066
----------
RESTAURANTS (1.1%)
650,050 Brinker International 20,639(3)
----------
RETAILING (4.7%)
28,224 99 Cents Only Stores 1,268(3)
212,800 Ann Taylor Stores 7,661(3)
1,299,900 Claire's Stores 25,592
693,900 Linens 'n Things 18,735(3)
181,500 Payless ShoeSource 9,688(3)
575,000 ShopKo Stores 6,577(3)
360,300 Whole Foods Market 18,195(3)
----------
87,716
----------
TECHNOLOGY (11.4%)
847,500 Analysts International 7,045
442,200 Black Box 26,311(3)
496,200 CACI International 11,164(3)
1,453,200 CIBER, Inc. 14,986(3)
807,900 Davox Corp. 10,200(2)(3)
1,085,500 Electronics for Imaging 28,223(3)
565,000 InterVoice-Brite 7,027(3)
126,400 Jack Henry & Associates 5,609
238,500 Keane, Inc. 4,129(3)
389,000 Kronos Inc. 14,539(3)
625,000 META Group 9,062(2)
625,400 MICROS Systems 10,984(3)
10,800 Power Intergrations 184(3)
</TABLE>
<TABLE>
<CAPTION>
Market
Number Value(1)
of Shares (000's omitted)
--------------------- ---------------
<C> <S> <C>
289,200 SBS Technologies $ 14,912(3)
859,400 Zebra Technologies 46,408(3)
----------
210,783
----------
TRANSPORTATION (1.8%)
869,900 Circle International Group 31,153
213,600 Maritrans Inc. 1,228
----------
32,381
----------
UTILITIES, ELECTRIC & GAS (0.6%)
144,900 Montana Power 5,225
183,500 NUI Corp. 5,517
----------
10,742
----------
TOTAL COMMON STOCKS (COST
$1,439,732) 1,753,919
----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
---------------------
<C> <S> <C>
REPURCHASE AGREEMENTS (2.3%)
$42,140,000 State Street Bank and Trust
Co. Repurchase Agreement,
6.58%, due 9/1/00, dated
8/31/00, Maturity Value
$42,147,702, Collateralized
by $42,380,000 Fannie Mae,
Notes, 6.40%, due 9/27/01
(Collateral Value
$43,408,944) (COST $42,140) 42,140(4)
----------
</TABLE>
C-3
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
--------------------------------------------------------------------------------
Genesis Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Principal Value(1)
Amount (000's omitted)
--------------------- ---------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (5.2%)
$30,000,000 Prudential Funding Corp.,
6.48%, due 9/5/00 $ 29,978
30,000,000 American Express Credit Corp.,
6.46%, due 9/7/00 29,968
36,226,183 N&B Securities Lending Quality
Fund, LLC 36,226
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $96,172) 96,172(4)
----------
TOTAL INVESTMENTS (102.2%)
(COST $1,578,044) 1,892,231(5)
Liabilities, less cash,
receivables and other assets
[(2.2%)] (41,103)
----------
TOTAL NET ASSETS (100.0%) $1,851,128
----------
</TABLE>
SEE NOTES TO SCHEDULE OF INVESTMENTS
C-4
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
Neuberger Berman August 31, 2000
----------------------------------------------------------------------
Genesis Portfolio
1) Investment securities of the Portfolio are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices. The Portfolio
values all other securities by a method the trustees of Equity Managers Trust
believe accurately reflects fair value. Foreign security prices are furnished
by independent quotation services expressed in local currency values. Foreign
security prices are translated from the local currency into U.S. dollars
using current exchange rates. Short-term debt securities with less than 60
days until maturity may be valued at cost which, when combined with interest
earned, approximates market value.
2) Affiliated issuer (see Note E of Notes to Financial Statements).
3) Non-income producing security.
4) At cost, which approximates market value.
5) The cost of investments for U.S. Federal income tax purposes was
$1,579,972,000. At August 31, 2000, gross unrealized appreciation of
investments was $420,625,000 and gross unrealized depreciation of investments
was $108,366,000, resulting in net unrealized appreciation of $312,259,000,
based on cost for U.S. Federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
C-5
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger Berman
----------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
August 31,
(000'S OMITTED) 2000
<S> <C>
-------------
ASSETS
Investments in securities, at market value*
(Notes A & E) -- see Schedule of
Investments:
Unaffiliated issuers $ 1,686,348
Non-controlled affiliated issuers 205,883
-------------
1,892,231
Cash 1
Receivable for securities sold 1,994
Dividends and interest receivable 1,609
Other assets 28
-------------
1,895,863
-------------
LIABILITIES
Payable for collateral on securities loaned
(Note A) 36,226
Payable for securities purchased 7,124
Payable to investment manager (Note B) 1,088
Accrued expenses and other payables 297
-------------
44,735
-------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 1,851,128
-------------
NET ASSETS consist of:
Paid-in capital $ 1,536,941
Net unrealized appreciation in value of
investment securities 314,187
-------------
NET ASSETS $ 1,851,128
-------------
*Cost of investments:
Unaffiliated issuers $ 1,343,716
Non-controlled affiliated issuers 234,328
-------------
Total cost of investments $ 1,578,044
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-6
<PAGE>
STATEMENT OF OPERATIONS
Neuberger Berman
----------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
For the
Year
Ended
August 31,
(000'S OMITTED) 2000
<S> <C>
-----------
INVESTMENT INCOME
Income:
Dividend income -- unaffiliated issuers $ 12,039
Dividend income -- non-controlled affiliated
issuers 2,354
Interest income 5,017
-----------
Total income 19,410
-----------
Expenses:
Investment management fee (Note B) 11,889
Custodian fees (Note B) 320
Auditing fees 41
Trustees' fees and expenses 25
Insurance expense 21
Legal fees 20
Accounting fees 10
Miscellaneous 33
-----------
Total expenses 12,359
Expenses reduced by custodian fee expense
offset arrangement (Note B) (3)
-----------
Total net expenses 12,356
-----------
Net investment income 7,054
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment securities
sold in unaffiliated issuers 201,347
Net realized loss on investment securities
sold in non-controlled affiliated issuers (3,841)
Change in net unrealized appreciation of
investment securities 173,266
-----------
Net gain on investments 370,772
-----------
Net increase in net assets resulting from
operations $ 377,826
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-7
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger Berman
----------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
Year
Ended
August 31,
(000'S OMITTED) 2000 1999
<S> <C> <C>
--------------------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 7,054 $ 18,739
Net realized gain (loss) on
investments 197,506 (110,390)
Change in net unrealized
appreciation (depreciation) of
investments 173,266 413,682
--------------------------
Net increase in net assets resulting
from operations 377,826 322,031
--------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 242,189 528,302
Reductions (519,991) (911,584)
--------------------------
Net decrease in net assets resulting
from transactions in
investors' beneficial interests (277,802) (383,282)
--------------------------
NET INCREASE (DECREASE) IN NET ASSETS 100,024 (61,251)
NET ASSETS:
Beginning of year 1,751,104 1,812,355
--------------------------
End of year $ 1,851,128 $ 1,751,104
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
C-8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 2000
----------------------------------------------------------------------
Equity Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger Berman Genesis Portfolio (the "Portfolio") is a separate
operating series of Equity Managers Trust ("Managers Trust"), a New York
common law trust organized as of December 1, 1992. Managers Trust is
registered as a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). Other regulated
investment companies sponsored by Neuberger Berman Management Inc.
("Management"), whose financial statements are not presented herein, also
invest in the Portfolio and other portfolios of Managers Trust.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the
notes following the Portfolio's Schedule of Investments.
3) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Portfolio
becomes aware of the dividends. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, including accretion of original issue discount,
where applicable, and accretion of discount on short-term investments, is
recorded on the accrual basis. Realized gains and losses from securities
transactions are recorded on the basis of identified cost.
4) TAXES: Managers Trust intends to comply with the requirements of the Internal
Revenue Code. Each portfolio of Managers Trust also intends to conduct its
operations so that each of its investors will be able to qualify as a
regulated investment company. Each portfolio will be treated as a partnership
for U.S. Federal income tax purposes and is therefore not subject to U.S.
Federal income tax.
5) EXPENSE ALLOCATION: The Portfolio bears all costs of its operations. Expenses
incurred by Managers Trust with respect to any two or more portfolios are
allocated in proportion to the net assets of such portfolios, except where a
more appropriate allocation of expenses to each portfolio can otherwise be
made fairly. Expenses directly attributable to a portfolio are charged to
that portfolio.
6) SECURITY LENDING: Securities loans involve certain risks in the event a
borrower should fail financially, including delays or inability to recover
the lent securities or
C-9
<PAGE>
foreclose against the collateral. The investment manager, under the general
supervision of Managers Trust's Board of Trustees, monitors the
creditworthiness of the parties to whom the Portfolio makes security loans.
The Portfolio will not lend securities on which covered call options have
been written, or lend securities on terms which would prevent investors from
qualifying as a regulated investment company. The Portfolio entered into a
Securities Lending Agreement with Morgan Stanley & Co. Incorporated
("Morgan"). The Portfolio receives cash collateral equal to at least 100% of
the current market value of the loaned securities. The Portfolio invests the
cash collateral in the N&B Securities Lending Quality Fund, LLC ("investment
vehicle"), which is managed by State Street Bank and Trust Company ("State
Street") pursuant to guidelines approved by Managers Trust's investment
manager. Income earned on the investment vehicle is paid to Morgan monthly.
The Portfolio receives a fee, payable monthly, negotiated by the Portfolio
and Morgan, based on the number and duration of the lending transactions. At
August 31, 2000, the value of the securities loaned and the value of the
collateral were $35,516,000 and $36,226,000, respectively.
7) REPURCHASE AGREEMENTS: The Portfolio may enter into repurchase agreements
with institutions that the Portfolio's investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Portfolio
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Portfolio
to obtain those securities in the event of a default under the repurchase
agreement. The Portfolio monitors, on a daily basis, the value of the
securities transferred to ensure that their value, including accrued
interest, is greater than amounts owed to the Portfolio under each such
repurchase agreement.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Portfolio retains Management as its investment manager under a Management
Agreement. For such investment management services, the Portfolio pays
Management a fee at the annual rate of 0.85% of the first $250 million of the
Portfolio's average daily net assets, 0.80% of the next $250 million, 0.75% of
the next $250 million, 0.70% of the next $250 million, and 0.65% of average
daily net assets in excess of $1 billion.
Management and Neuberger Berman, LLC ("Neuberger"), a member firm of The New
York Stock Exchange and sub-adviser to the Portfolio, are wholly owned
subsidiaries of Neuberger Berman Inc., a publicly held company. Neuberger is
retained by Management to furnish it with investment recommendations and
research information without added cost to the Portfolio. Several individuals
who are officers and/or trustees of Managers Trust are also employees of
Neuberger and/or Management.
C-10
<PAGE>
The Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statement
of Operations under the caption Custodian fees, was a reduction of $2,694.
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended August 31, 2000, there were purchase and sale
transactions (excluding short-term securities) of $592,552,000 and $899,085,000,
respectively.
During the year ended August 31, 2000, brokerage commissions on securities
transactions amounted to $1,646,000, of which Neuberger received $681,000, and
other brokers received $965,000.
NOTE D -- LINE OF CREDIT:
At August 31, 2000, the Portfolio was a holder of a single committed,
unsecured $100,000,000 line of credit with State Street, to be used only for
temporary or emergency purposes. Interest is charged on borrowings under this
agreement at the overnight Federal Funds Rate plus 0.75% per annum. A facility
fee of 0.09% (0.07% prior to October 1, 1999) per annum of the available line of
credit is charged, of which the Portfolio has agreed to pay its pro rata share,
based on the ratio of its individual net assets to the net assets of all the
participants at the time the fee is due and payable. The fee is paid quarterly
in arrears. No compensating balance is required. Other investment companies
managed by Management also participate in this line of credit on the same terms.
Because several investment companies participate, there is no assurance that the
Portfolio will have access to the entire $100,000,000 at any particular time.
The Portfolio had no loans outstanding pursuant to this line of credit at
August 31, 2000, nor had the Portfolio utilized this line of credit at any time
prior to that date.
C-11
<PAGE>
NOTE E -- INVESTMENTS IN NON-CONTROLLED AFFILIATES*:
<TABLE>
<CAPTION>
BALANCE OF GROSS GROSS BALANCE OF
SHARES HELD PURCHASES SALES SHARES HELD VALUE
AUGUST 31, AND AND AUGUST 31, AUGUST 31,
NAME OF ISSUER: 1999 ADDITIONS REDUCTIONS 2000 2000
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
AAR Corp. 1,771,350 85,900 430,200 1,427,050 $16,054,000
Alliant Techsystems 663,200 6,000 136,400 532,800 41,059,000
Aviall Inc.** 1,219,500 0 465,400 754,100 4,525,000
Davox Corp.** 1,075,600 386,300 654,000 807,900 10,200,000
DONCASTERS PLC ADR** 478,300 0 478,300 0 0
Fair, Isaac & Co. 343,500 500,200 4,200 839,500 38,565,000
Highland Bancorp 331,400 0 0 331,400 8,368,000
Mentor Corp. 885,300 310,800 5,000 1,191,100 25,236,000
META Group 0 632,000 7,000 625,000 9,062,000
Primex Technologies 800,400 7,000 78,100 729,300 17,685,000
SOS Staffing Services 814,400 0 25,000 789,400 2,171,000
Scottish Annuity & Life
Holdings 857,900 33,600 0 891,500 8,135,000
Wallace Computer Services 1,247,400 892,100 4,200 2,135,300 24,823,000
</TABLE>
*AFFILIATED ISSUERS, AS DEFINED IN THE 1940 ACT, INCLUDE ISSUERS IN WHICH THE
PORTFOLIO HELD 5% OR MORE OF THE OUTSTANDING VOTING SECURITIES.
**AT AUGUST 31, 2000, THE ISSUERS OF THESE SECURITIES WERE NO LONGER AFFILIATED
WITH THE PORTFOLIO.
C-12
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger Berman
--------------------------------------------------------------------------------
Genesis Portfolio
<TABLE>
<CAPTION>
Year Ended August 31,
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
--------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Gross Expenses(1) .76% .75% .72% .77% .85%
--------------------------------------------------------
Net Expenses .75% .75% .72%(2) .77%(2) .85%(2)
--------------------------------------------------------
Net Investment Income .43% 1.02% 1.13% .32% .27%
--------------------------------------------------------
Portfolio Turnover Rate 38% 33% 18% 18% 21%
--------------------------------------------------------
Net Assets, End of Year (in millions) $1,851.1 $1,751.1 $1,812.4 $1,083.7 $259.9
--------------------------------------------------------
</TABLE>
1) The Portfolio is required to calculate an expense ratio without taking into
consideration any expense reductions related to expense offset arrangements.
2) Had the investment manager not waived a portion of the management fee, the
annualized ratios of net expenses to average daily net assets would have
been:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1998 1997 1996
<S> <C> <C> <C>
---------------------------------------------------------------------
Net Expenses .74% .87% .95%
</TABLE>
C-13
<PAGE>
REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS
To the Board of Trustees of
Equity Managers Trust and
Owners of Beneficial Interest of Genesis Portfolio
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Genesis Portfolio, one of the series
constituting Equity Managers Trust (the "Trust"), as of August 31, 2000, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2000, by correspondence with
the custodian and brokers or other appropriate auditing procedures where replies
from brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Genesis Portfolio of Equity Managers Trust at August 31, 2000, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for each
of the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
October 2, 2000
C-14
<PAGE>
DIRECTORY
INVESTMENT MANAGER, ADMINISTRATOR
AND DISTRIBUTOR
Neuberger Berman Management Inc.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
800.877.9700 or 212.476.8800
Institutional Services 800.366.6264
SUB-ADVISER
Neuberger Berman, LLC
605 Third Avenue
New York, NY 10158-3698
CUSTODIAN AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
ADDRESS CORRESPONDENCE TO:
Neuberger Berman Funds
Institutional Services
605 Third Avenue 2nd Floor
New York, NY 10158-0180
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, NW
2nd Floor
Washington, DC 20036-1800
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
-C- 2000 Neuberger Berman Management Inc.
D-1
<PAGE>
OFFICERS AND TRUSTEES
Peter E. Sundman
CHAIRMAN OF THE BOARD AND TRUSTEE
Michael M. Kassen
PRESIDENT AND TRUSTEE
Faith Colish
TRUSTEE
Howard A. Mileaf
TRUSTEE
Edward I. O'Brien
TRUSTEE
John P. Rosenthal
TRUSTEE
Cornelius T. Ryan
TRUSTEE
Gustave H. Shubert
TRUSTEE
Daniel J. Sullivan
VICE PRESIDENT
Richard Russell
TREASURER
Claudia A. Brandon
SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
D-2
<PAGE>
Statistics and projections in this report are
derived from sources deemed to be reliable
but cannot be regarded as a representation
of future results of the Fund. This report
is prepared for the general information of
shareholders and is not an offer of shares
of the Fund. Shares are sold only through
the currently effective prospectus, which
must precede or accompany this report.
NEUBERGER BERMAN
NEUBERGER BERMAN MANAGEMENT INC.
605 Third Avenue 2nd Floor
New York, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
WWW.NBFUNDS.COM
[RECYCLING LOGO] AO585 10/00
Kirkpatrick & Lockhart
1800 Massachusetts Avenue, N.W.
Washington, D.C. 20036
October 27, 2000
VIA EDGAR
---------
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: NEUBERGER BERMAN EQUITY SERIES:
Neuberger Berman Genesis Institutional
1933 Act File No. 333-66137
1940 Act File No. 811-09011
---------------------------
Dear Sir or Madam:
Transmitted herewith for filing is the Annual Report to Shareholders of
the above-referenced series of Neuberger Berman Equity Series for the period
ended August 31, 2000. This filing is being made pursuant to Section 30(b)(2) of
the Investment Company Act of 1940, as amended, and Rule 30b2-1 thereunder.
If you should have any questions regarding this filing, please contact the
undersigned at (202) 778-9223.
Sincerely,
/s/ Fatima Sulaiman
------------------
Fatima Sulaiman
Enclosures
