(LOGO)
WARBURG PINCUS FUNDS PART OF CREDIT | ASSET
SUISSE | MANAGEMENT
[GRAPHIC OMITTED]
ANNUAL
REPORT
OCTOBER 31, 2000
WARBURG PINCUS
EMERGING GROWTH FUND
(BULLET)
WARBURG PINCUS
SMALL COMPANY VALUE FUND
(BULLET)
WARBURG PINCUS
SMALL COMPANY GROWTH FUND
More complete information about the Funds, including charges and expenses, is
provided in the PROSPECTUS, which must precede or accompany this document and
which should be read carefully before investing. You may obtain additional
copies by calling 800-WARBURG (800-927-2874) or by writing to Warburg Pincus
Funds, P.O. Box 9030, Boston, MA 02205-9030.
Credit Suisse Asset Management Securities, Inc., Distributor, located at 466
Lexington Avenue, New York, NY 10017-3147. Telephone: 800-927-2874. Warburg
Pincus Funds are advised by Credit Suisse Asset Management, LLC.
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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.
THE VIEWS OF THE FUNDS' MANAGEMENT ARE AS OF THE DATE OF THE LETTERS AND
PORTFOLIO HOLDINGS DESCRIBED IN THIS DOCUMENT ARE AS OF OCTOBER 31, 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 FDIC INSURED AND ARE NOT
GUARANTEED BY CSAM OR ANY AFFILIATE. FUND INVESTMENTS ARE SUBJECT TO INVESTMENT
RISKS, INCLUDING LOSS OF YOUR INVESTMENT.
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WARBURG PINCUS EMERGING GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000
--------------------------------------------------------------------------------
December 6, 2000
Dear Shareholder:
For the 12 months ended October 31, 2000, the Common Class shares of Warburg
Pincus Emerging Growth Fund had a gain of 30.60%, vs. gains of 16.16% and
29.71%, respectively, for the Russell 2000 Growth Index and the Russell 2500
Growth Index.
The period was a positive yet volatile one for growth-oriented small- and
mid-cap stocks. The group initially surged, benefiting from investors' strong
appetite for risk as Y2K fears evaporated and as a healthy U.S. economy buoyed
profits. However, as in the large-cap market, these shares came under pressure
as the economy's strength began to fuel inflation and interest-rate worries.
Technology and telecommunications stocks, which had risen to generally lofty
valuations, were especially volatile, falling sharply in April and May. Stocks
were generally lackluster over the remainder of the period, with the economic
and profit outlook becoming more clouded. However, certain market sectors
performed well over the May-through-October span, with investors favoring
defensive areas such as health care.
Within this environment, the Fund had a good showing, both in absolute terms
and compared to its benchmark. A number of the Fund's holdings contributed
positively to its return, the late-period turmoil notwithstanding. Good
performers for the Fund included its computer, oil-services, health-care and
financial-services holdings. Stocks that hampered the Fund included certain of
its telecommunications & equipment names.
With regard to sector allocation, one notable change we made during the
period was to raise the Fund's health-care position. Our heightened emphasis
here was based on company-specific factors as well as on our belief that
health-care fundamentals are improving. Companies that we added included a
biotechnology/emerging pharmaceutical company whose technologies are used to
develop products with enhanced therapeutic value. Other health-care companies we
purchased included a medical-devices supplier.
We also raised the Fund's weighting in the financial-services sector, where
we generally focused on mid-cap companies with strong brand names. We added
several companies we deemed attractive, given their valuations and their
potential to benefit from what we believe will be a more-supportive
interest-rate backdrop heading into 2001.
1
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WARBURG PINCUS EMERGING GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
We lowered the Fund's technology exposure over the course of the period,
eliminating positions that we judged to have deteriorating prospects. Most of
our selling activity was in the telecommunications area, where certain stocks in
our view had become less attractive from a risk/reward perspective. That said,
technology will continue to be a major theme in the Fund. The group in our view
will remain a fount of opportunity, given such factors as a global emphasis on
productivity enhancements and the rapid acceleration of Internet usage.
Elsewhere of note, we ended the period with a roughly 10% weighting in the
energy area, where we remained biased in favor of oil-services companies. We
continue to have a positive view on the longer-term prospects for our energy
holdings, and believe they can achieve good earnings growth even if energy
prices began to decline going forward.
Looking ahead, while the outlook for small- and mid-cap stocks over the next
few months is certainly clouded, we remain of the view that a "soft landing"
environment will prevail. Historically, a combination of subdued inflation and
modest economic growth has tended to encourage investment in smaller companies,
especially within the growth-oriented sectors targeted by the Fund. Of course,
we will continue to monitor the flow of macroeconomic data and make adjustments
to the portfolio as we deem appropriate from a risk/reward perspective.
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
INVESTING IN EMERGING-GROWTH COMPANIES ENTAILS SPECIAL RISK CONSIDERATIONS.
THESE ARE DETAILED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE
INVESTING.
2
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WARBURG PINCUS EMERGING GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN COMMON CLASS SHARES OF WARBURG PINCUS
EMERGING GROWTH FUND SINCE INCEPTION AS OF OCTOBER 31, 2000
The graph below illustrates a hypothetical investment of $10,000 in Common
Class shares of Warburg Pincus Emerging Growth Fund (the "Fund") from January
21, 1988 (inception) to October 31, 2000, compared to the Russell 2000 Growth
Index ("R2000G")* and the Russell 2500 Growth Index ("R2500G")** for the same
time period.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Fund R2000G R2500G
1/21/88 $10,000.00 $10,000.00 $10,000.00
Feb-88 $10,480.00 $10,901.40 $10,926.20
Mar-88 $10,760.00 $11,411.20 $11,279.20
Apr-88 $10,860.00 $11,670.60 $11,393.90
May-88 $10,690.00 $11,357.00 $11,104.20
Jun-88 $11,696.60 $12,166.90 $11,925.10
Jul-88 $11,546.10 $12,051.50 $11,617.50
Aug-88 $11,104.80 $11,744.40 $11,192.20
Sep-88 $11,506.00 $12,055.80 $11,578.50
Oct-88 $11,245.20 $11,922.30 $11,444.00
Nov-88 $11,084.70 $11,527.30 $11,088.50
Dec-88 $11,696.20 $11,979.80 $11,557.80
Jan-89 $12,546.30 $12,514.90 $12,151.60
Feb-89 $12,720.40 $12,606.10 $12,194.30
Mar-89 $12,853.50 $12,903.50 $12,440.20
Apr-89 $13,601.20 $13,466.60 $13,116.30
May-89 $14,246.40 $14,046.60 $13,787.90
Jun-89 $14,183.10 $13,725.50 $13,442.60
Jul-89 $14,882.50 $14,255.80 $14,214.40
Aug-89 $15,067.60 $14,603.40 $14,632.30
Sep-89 $14,892.80 $14,649.80 $14,724.80
Oct-89 $13,967.10 $13,782.80 $14,074.40
Nov-89 $14,070.00 $13,875.30 $14,242.20
Dec-89 $14,238.40 $13,928.20 $14,390.30
Jan-90 $13,108.70 $12,711.40 $12,953.10
Feb-90 $13,503.00 $13,106.10 $13,342.90
Mar-90 $13,854.70 $13,615.80 $13,976.40
Apr-90 $13,396.40 $13,171.40 $13,620.70
May-90 $14,728.60 $14,103.70 $14,905.10
Jun-90 $14,821.50 $14,132.70 $15,016.00
Jul-90 $14,371.40 $13,510.80 $14,507.90
Aug-90 $12,903.20 $11,711.50 $12,514.20
Sep-90 $11,981.50 $10,675.30 $11,399.30
Oct-90 $11,606.50 $10,023.70 $10,887.50
Nov-90 $12,313.80 $10,788.00 $11,967.10
Dec-90 $12,834.80 $11,216.00 $12,635.10
Jan-91 $14,008.50 $12,230.30 $13,810.70
Feb-91 $15,149.80 $13,594.10 $15,303.60
Mar-91 $16,226.60 $14,551.00 $16,282.60
Apr-91 $15,645.10 $14,514.50 $15,917.20
May-91 $16,485.00 $15,206.40 $16,728.50
Jun-91 $15,249.50 $14,320.30 $15,810.60
Jul-91 $15,993.20 $14,822.80 $16,700.90
Aug-91 $16,920.00 $15,371.40 $17,423.40
Sep-91 $17,114.00 $15,491.80 $17,623.20
Oct-91 $18,288.70 $15,901.50 $18,219.90
Nov-91 $17,555.80 $15,166.20 $17,452.10
Dec-91 $20,039.30 $16,380.60 $19,587.40
Jan-92 $21,193.50 $17,707.90 $20,416.00
Feb-92 $21,215.50 $18,224.40 $20,617.30
Mar-92 $20,193.20 $17,607.70 $19,441.90
Apr-92 $18,808.10 $16,991.10 $18,428.60
May-92 $19,028.00 $17,217.10 $18,461.00
Jun-92 $18,401.40 $16,403.10 $17,457.10
Jul-92 $18,907.10 $16,973.90 $18,135.60
Aug-92 $18,709.20 $16,495.10 $17,600.60
Sep-92 $19,346.80 $16,875.40 $17,869.60
Oct-92 $20,094.30 $17,411.90 $18,629.00
Nov-92 $22,160.80 $18,744.20 $20,128.70
Dec-92 $22,472.20 $19,397.30 $20,721.90
Jan-93 $22,920.00 $20,053.90 $20,866.70
Feb-93 $21,755.60 $19,590.90 $19,819.00
Mar-93 $22,808.10 $20,226.60 $20,461.30
Apr-93 $22,427.40 $19,671.60 $19,698.10
May-93 $23,547.10 $20,542.00 $20,911.10
Jun-93 $23,871.80 $20,670.20 $20,961.70
Jul-93 $24,442.80 $20,955.70 $20,978.90
Aug-93 $25,909.60 $21,860.90 $22,084.50
Sep-93 $26,984.50 $22,477.90 $22,651.60
Oct-93 $26,581.40 $23,056.40 $23,097.20
Nov-93 $25,472.90 $22,297.90 $22,259.90
Dec-93 $26,541.10 $23,060.30 $23,238.70
Jan-94 $27,326.30 $23,783.20 $23,908.70
Feb-94 $26,874.20 $23,697.30 $23,949.30
Mar-94 $25,173.00 $22,446.40 $22,556.20
Apr-94 $24,744.70 $22,579.70 $22,530.70
May-94 $24,173.70 $22,326.30 $22,078.70
Jun-94 $23,804.90 $21,558.30 $21,098.70
Jul-94 $24,126.10 $21,922.70 $21,557.10
Aug-94 $25,553.70 $23,144.20 $23,142.00
Sep-94 $26,005.80 $23,066.90 $23,130.90
Oct-94 $26,624.40 $22,976.00 $23,528.50
Nov-94 $25,327.70 $22,048.20 $22,486.40
Dec-94 $26,160.40 $22,640.70 $22,942.70
Jan-95 $25,767.80 $22,355.20 $22,718.50
Feb-95 $27,088.40 $23,285.10 $23,954.00
Mar-95 $27,825.90 $23,686.10 $24,883.20
Apr-95 $28,611.10 $24,212.90 $25,164.80
May-95 $28,944.20 $24,629.10 $25,550.80
Jun-95 $31,430.60 $25,906.60 $27,101.80
Jul-95 $33,750.40 $27,399.10 $29,238.20
Aug-95 $34,975.70 $27,965.40 $29,481.80
Sep-95 $36,807.80 $28,465.20 $30,113.30
Oct-95 $35,653.80 $27,192.50 $29,049.40
Nov-95 $36,569.90 $28,334.90 $30,238.10
Dec-95 $38,251.40 $29,082.60 $30,639.30
Jan-96 $37,721.20 $29,051.80 $30,734.00
Feb-96 $39,160.40 $29,957.00 $32,086.30
Mar-96 $39,829.40 $30,566.70 $32,783.20
Apr-96 $43,163.20 $32,201.10 $35,027.60
May-96 $43,732.90 $33,470.10 $36,277.00
Jun-96 $42,106.10 $32,096.20 $34,458.80
Jul-96 $37,560.90 $29,292.90 $31,034.60
Aug-96 $39,770.40 $30,993.90 $33,171.70
Sep-96 $42,005.10 $32,205.20 $34,932.10
Oct-96 $41,412.80 $31,709.20 $33,845.40
Nov-96 $41,677.90 $33,015.60 $35,086.10
Dec-96 $42,032.20 $33,881.00 $35,258.00
Jan-97 $43,563.10 $34,558.20 $36,312.60
Feb-97 $41,627.30 $33,720.60 $34,721.80
Mar-97 $39,223.30 $32,129.60 $32,437.40
Apr-97 $39,311.90 $32,219.30 $32,583.40
May-97 $43,752.90 $35,803.60 $36,488.80
Jun-97 $45,574.90 $37,338.20 $37,709.40
Jul-97 $48,232.00 $39,075.50 $40,102.80
Aug-97 $49,244.20 $39,969.60 $41,081.30
Sep-97 $52,927.70 $42,895.00 $43,982.90
Oct-97 $50,180.70 $41,011.00 $41,238.80
Nov-97 $49,874.60 $40,744.40 $40,606.60
Dec-97 $50,966.90 $41,457.50 $40,462.40
Jan-98 $49,682.50 $40,803.70 $39,934.00
Feb-98 $54,645.80 $43,821.10 $43,362.30
Mar-98 $57,236.00 $45,628.30 $44,972.40
Apr-98 $57,762.60 $45,881.10 $45,381.20
May-98 $54,267.90 $43,409.90 $42,468.10
Jun-98 $56,536.30 $43,501.50 $42,779.40
Jul-98 $52,166.10 $39,980.10 $39,594.10
Aug-98 $41,925.90 $32,216.80 $30,596.70
Sep-98 $43,519.10 $34,738.00 $33,279.40
Oct-98 $45,464.40 $36,155.00 $35,526.50
Nov-98 $48,255.90 $38,049.10 $38,053.50
Dec-98 $53,935.60 $40,403.60 $41,717.30
Jan-99 $54,760.80 $40,940.60 $42,924.60
Feb-99 $49,306.60 $37,624.40 $39,441.70
Mar-99 $51,910.00 $38,211.70 $41,278.10
Apr-99 $51,910.00 $41,635.90 $44,571.20
May-99 $52,771.70 $42,244.20 $45,031.60
Jun-99 $56,872.10 $44,154.50 $48,214.50
Jul-99 $56,087.20 $42,944.60 $47,231.90
Aug-99 $54,830.90 $41,355.70 $46,211.20
Sep-99 $54,885.70 $41,364.80 $46,542.10
Oct-99 $59,002.20 $41,532.30 $48,808.70
Nov-99 $65,439.30 $44,012.20 $54,571.00
Dec-99 $76,478.90 $48,994.40 $64,863.10
Jan-00 $73,993.30 $48,205.60 $64,499.90
Feb-00 $89,028.80 $56,164.30 $81,044.10
Mar-00 $86,081.90 $52,463.10 $74,685.40
Apr-00 $77,077.80 $49,304.80 $67,408.80
May-00 $71,481.90 $46,431.30 $61,406.70
Jun-00 $79,473.60 $50,478.70 $69,525.30
Jul-00 $76,700.00 $48,854.80 $63,827.70
Aug-00 $85,888.60 $52,582.50 $72,147.00
Sep-00 $85,227.30 $51,037.10 $67,481.20
Oct-00 $77,062.50 $48,758.80 $63,308.20
Average Annual
Total Returns
for periods ended
10/31/00
(Common Shares)
------------------
1 YEAR
30.60%
------------------
3 YEAR
15.38%
------------------
5 YEAR
16.67%
------------------
10 YEAR
20.84%
------------------
FUND
------
1 Year Total Return (9/30/99 to 9/30/00) ............................ 55.26%
3 Year Average Annual Total Return (9/30/97 to 9/30/00) ............. 17.21%
5 Year Average Annual Total Return (9/30/95 to 9/30/00 .............. 18.28%
10 Year Average Annual Total Return (9/30/90 to 9/30/00) ............ 21.68%
Average Annual Total Return Since Inception
(1/21/88 to 9/30/00) ............................................. 18.37%
-----------------
* The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) that measures the performance of those Russell 2000
companies with higher price-to-book ratios and higher forecasted growth
values.It includes reinvestment of dividends, and is compiled by Frank
Russell Company.
** The Russell 2500 Growth Index measures the performance of those companies in
the Russell 2500 Index with higher price-to-book values and higher forecasted
growth rates. The Russell 2500 Index is composed of the 2500 smallest
companies in the Russell 3000 Index, which measures the performance of the
3000 largest US companies based on total market capitalization. The Russell
2500 Index represents approximately 17% of the total market capitalization of
the Russell 3000 Index.
3
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WARBURG PINCUS SMALL COMPANY VALUE FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000
--------------------------------------------------------------------------------
December 6, 2000
Dear Shareholder:
For the 12 months ended October 31, 2000, the Common Class shares of Warburg
Pincus Small Company Value Fund (the "Fund") had a gain of 22.56%. For the six
months ended October 31, 2000, the Fund had a gain of 8.15%, vs. a same-period
gain of 8.41% for the Russell 2000 Value Index, the Fund's new benchmark
effective May 2, 2000 (replacing the Russell 2000 Index). For the six months
ended April 30, 2000, the Fund had a return of 13.07%, vs. a return of 18.72%
for the Russell 2000 Index.
The period was a positive one for small-capitalization stocks, though the
group was volatile, as were stocks broadly. While the group's growth and value
components posted roughly equal gains for the 12 months (with a slight edge to
the value stocks), they hardly performed in tandem. Growth stocks dominated
early in the period, when investors' tolerance for risk was high, buoyed by a
strong economy and a rally in the technology sector. However, they tumbled over
the March-through-May period on inflation and interest-rate uncertainties, and
remained volatile. Value stocks outperformed their growth counterparts late in
the period (within the small-cap arena and elsewhere), as investors took a more
defensive stance due to worries over a slowing economy.
Against this backdrop, the Fund had a competitive showing, with the Fund
outpacing both Russell indexes cited above for the 12 months. Stocks that aided
the Fund's return included its financial-services, health-care and utilities
holdings. The Fund was also helped by its overweighting in the technology sector
early in the period, when these stocks rallied (we subsequently reduced this
position). On the negative side, stocks that hindered the Fund included certain
of its materials & processing and consumer-related names.
Our general strategy throughout the period was to focus on stocks that had
good potential, in our estimation, to benefit from visible catalysts, such as
positive earnings surprises or new product launches. This reflected our concerns
that, amid general uncertainty and high market volatility, companies with
visible improvements were the most likely to garner favorable investor attention
(as opposed to companies merely trading at discounts to their underlying worth,
for example).
We made several noteworthy sector-weighting changes during the period. We
raised our exposure to the financial segment, where we deemed a number of stocks
to be attractive based on their valuations and on the prospects for a
more-favorable interest-rate environment. These included insurance companies as
well as real-estate investment trusts (we view REITs
4
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WARBURG PINCUS SMALL COMPANY VALUE FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
as financial stocks due to their interest-rate sensitivity), with our
position in REITs rising considerable late in the period.
We also increased our weighting in the health-care sector, were our focus
remained on services providers such as hospitals and acute-care companies. The
major catalyst in this area is the restoration of "reimbursement" rates. These
rates were reduced by the Balance Budget Act of 1997, sparking a slump in
care-provider stocks, but Congress has recently been increasing the funding, and
could continue to do so. Our health-care holdings also included
laboratory-testing companies. We believe that these companies' profit margins
will widen due to rising demand for testing related to new-drug development.
Another increased area of emphasis for the Fund in the period was energy. We
added companies that stood to benefit from an improving supply/demand backdrop
for energy, including a number of electric-utility stocks we believed to
represent good value.
One sector weighting we reduced was technology. We had a significant position
early in the period, based on the large amount of promising company-specific
catalysts we were seeing here. We sold most of our technology holdings based on
valuation factors as the period progressed; fortunately for the Fund, our
exposure was minimal when the technology group declined sharply in April and
May.
Going forward, we will continue our efforts to identify companies with
compelling valuations and good potential to benefit from industry trends and
from company-specific catalysts. While the overall backdrop for equities could
remain difficult for a spell, we believe that good opportunities will continue
to exist within a range of sectors. As ever, we will attempt to ferret out
hidden values that will receive wider market recognition over time.
Kyle F. Frey
Portfolio Manager
INVESTING IN SMALL COMPANIES ENTAILS SPECIAL RISK CONSIDERATIONS. THESE ARE
DETAILED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING.
5
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WARBURG PINCUS SMALL COMPANY VALUE FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN COMMON CLASS SHARES OF WARBURG PINCUS
SMALL COMPANY VALUE FUND SINCE INCEPTION AS OF OCTOBER 31, 2000
The graph below illustrates a hypothetical investment of $10,000 in Common
Class shares of Warburg Pincus Small Company Fund (the "Fund") from December 29,
1995 (inception) to October 31, 2000, compared to the Russell 2000 Index
("R2000")* and the Russell 2000 Value Index ("R2000 Value")** for the same time
period.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
FUND R2000 R2000 VALUE
12/29/95 $10,000.00 $10,000.00 $10,000.00
Jan-96 $10,000.00 $9,989.40 $10,066.40
Feb-96 $10,650.00 $10,300.70 $10,224.10
Mar-96 $11,550.00 $10,510.30 $10,438.80
Apr-96 $12,619.50 $11,072.30 $10,723.60
May-96 $13,449.90 $11,508.60 $10,995.10
Jun-96 $13,339.60 $11,036.20 $10,865.40
Jul-96 $12,849.60 $10,072.30 $10,287.80
Aug-96 $13,539.60 $10,657.20 $10,734.20
Sep-96 $14,109.60 $11,073.70 $11,027.20
Oct-96 $14,379.10 $10,903.20 $11,155.10
Nov-96 $14,989.00 $11,352.40 $11,755.40
Dec-96 $15,618.60 $11,649.90 $12,137.00
Jan-97 $15,881.60 $11,882.80 $12,323.50
Feb-97 $15,598.30 $11,594.80 $12,440.50
Mar-97 $15,052.10 $11,047.70 $12,106.90
Apr-97 $15,112.80 $11,078.50 $12,284.90
May-97 $16,053.60 $12,311.00 $13,262.90
Jun-97 $17,156.20 $12,838.70 $13,934.00
Jul-97 $18,056.40 $13,436.00 $14,518.80
Aug-97 $18,663.20 $13,743.50 $14,749.20
Sep-97 $20,100.20 $14,749.40 $15,730.10
Oct-97 $18,986.70 $14,101.60 $15,302.50
Nov-97 $18,531.00 $14,009.90 $15,470.20
Dec-97 $18,608.80 $14,255.10 $15,994.70
Jan-98 $18,087.80 $14,030.30 $15,705.50
Feb-98 $19,154.90 $15,067.80 $16,654.90
Mar-98 $19,972.80 $15,689.20 $17,330.40
Apr-98 $20,098.70 $15,776.10 $17,416.00
May-98 $19,572.10 $14,926.40 $16,801.20
Jun-98 $19,742.40 $14,957.90 $16,706.50
Jul-98 $18,301.20 $13,747.10 $15,397.90
Aug-98 $15,396.80 $11,077.70 $12,986.40
Sep-98 $15,544.60 $11,944.60 $13,719.80
Oct-98 $15,193.30 $12,431.80 $14,127.10
Nov-98 $15,567.00 $13,083.10 $14,509.50
Dec-98 $15,839.50 $13,892.70 $14,964.40
Jan-99 $15,464.10 $14,077.30 $14,624.70
Feb-99 $14,270.20 $12,937.10 $13,626.30
Mar-99 $14,070.50 $13,139.00 $13,513.80
Apr-99 $15,065.20 $14,316.40 $14,747.50
May-99 $15,136.00 $14,525.60 $15,200.90
Jun-99 $15,862.60 $15,182.40 $15,751.30
Jul-99 $15,499.30 $14,766.40 $15,377.50
Aug-99 $14,504.30 $14,220.10 $14,815.50
Sep-99 $14,375.20 $14,223.20 $14,519.30
Oct-99 $14,598.00 $14,280.80 $14,228.80
Nov-99 $16,143.90 $15,133.50 $14,302.50
Dec-99 $17,035.10 $16,846.60 $14,742.00
Jan-00 $15,794.90 $16,575.40 $14,356.50
Feb-00 $15,610.10 $19,312.00 $15,234.00
Mar-00 $16,651.30 $18,039.30 $15,305.40
Apr-00 $16,506.40 $16,953.40 $15,396.00
May-00 $15,927.10 $15,965.30 $15,161.10
Jun-00 $16,376.20 $17,357.00 $15,604.10
Jul-00 $16,548.20 $16,798.60 $16,124.00
Aug-00 $17,642.00 $18,080.40 $16,844.90
Sep-00 $18,116.60 $17,549.00 $16,749.40
Oct-00 $17,891.90 $16,765.60 $16,689.90
Average Annual
Total Returns
for periods ended
10/31/00
(Common Shares)
------------------
1 YEAR
22.56%
------------------
3 YEAR
-1.96%
------------------
SINCE INCEPTION
(12/29/95)
12.76%
------------------
FUND
------
1 Year Total Return (9/30/99 to 9/30/00) .............................. 26.01%
3 Year Average Annual Total Return (9/30/97 to 9/30/00) ............... -3.40%
Average Annual Total Return Since Inception
(12/29/95 to 9/30/00) . ............................................ 13.30%
----------------
* The Russell 2000 Index is an unmanaged index (with no defined investment
objective) of approximately 2,000 small-cap stocks, includes reinvestment of
dividends, and is compiled by Frank Russell Company.
** The Russell 2000 Value Index is an unmanaged index (with no defined
investment objective) that measures the performance of those Russell 2000
companies with lower price-to-book ratios and lower forecasted growth values.
It includes reinvestment of dividends, and is compiled by Frank Russell
Company.
6
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000
--------------------------------------------------------------------------------
December 6, 2000
Dear Shareholder:
For the 12 months ended October 31, 2000, the Common Class shares of Warburg
Pincus Small Company Growth Fund had a gain of 43.65%, vs. a gain of 16.16% for
the Russell 2000 Growth Index.
The period was an ultimately positive but very volatile one for
small-capitalization stocks. The group had a strong start, but turned sharply
down in April and May due to interest-rate worries and general concerns over
valuations on technology companies. Small-cap stocks remained volatile, and
ended the period on a difficult note due to some highly visible profit
disappointments that tarnished stocks broadly. All told, most small-cap stocks
gave up some but by no means all of their initial gains over the
April-through-October span.
Against this backdrop, the Fund had a strong showing, both in absolute terms
and compared to that of its benchmark. The Fund's return was aided by good stock
selection in general, especially within the computer, electronics and
health-care sectors. Stocks that hindered the Fund, at least in relative terms,
included specific consumer-related and communications holdings.
We made no major changes to the Fund during the period with regard to overall
strategy, remaining focused on rapidly growing companies with innovative, viable
products and services. We continued to see a large number of such companies
within the technology area, defined to include software, electronics and
telecommunications companies. Notwithstanding the group's typically volatile
nature, our longer-term outlook on these stocks remains positive based on
accelerating Internet usage, the worldwide embrace of wireless technologies and
a global push for better productivity.
One noteworthy sector-weighting increase we made during the period was health
care. We added several services providers as well as pharmaceutical companies
and more-aggressive biotechnology stocks. On the services side, we deemed
certain managed-care and hospital names to be attractive in the latter half of
the period, based on what we viewed as improving fundamentals within the
health-care industry. In addition, while the group's earnings-growth prospects
remain relatively modest, these companies have good potential to meet
expectations over the near-to-intermediate term. We believe that investors will
continue to reward companies that can deliver such consistency. In the
pharmaceutical/biotech area, we added several companies that stand to benefit
over the longer term from breakthroughs in gene research and the launch of new
products.
7
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
We ended the period with a modest overweighting in the energy area, where we
continued to emphasize oil-services providers. We believe these companies will
continue to benefit from demand for their services, even if oil prices begin to
decline. In our view, oil prices would have to fall dramatically to throttle
activity in the oil-services industry.
Despite the recent volatility in small caps, and the potential for choppy
waters over the near term, we have a positive longer-term outlook on the group.
We remain of the view that these stocks--and the group's growth-oriented names
in particular--will benefit in due course from a historically supportive
combination of benign inflation, relatively stable interest rates and modest
economic growth. In addition, small caps currently trade at compelling
valuations vs. those on larger-cap stocks, which should only add to their appeal
from a risk-reward perspective as the economic picture becomes clearer. Our
focus, as always, will remain on companies we deem to have the brightest
long-term growth prospects.
Stephen J. Lurito Sammy Oh
Co-Portfolio Manager Co-Portfolio Manager
INVESTING IN SMALL COMPANIES ENTAILS SPECIAL RISK CONSIDERATIONS. THESE ARE
DETAILED IN THE PROSPECTUS, WHICH SHOULD BE READ CAREFULLY BEFORE INVESTING.
8
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
ANNUAL INVESTMENT ADVISER'S REPORT -- OCTOBER 31, 2000 (CONT'D)
--------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN COMMON CLASS SHARES OF WARBURG PINCUS
SMALL COMPANY GROWTH FUND SINCE INCEPTION AS OF OCTOBER 31, 2000
The graph below illustrates a hypothetical investment of $10,000 in Common
Class shares of Warburg Pincus Small Company Growth Fund (the "Fund") from
December 31, 1996 (inception) to October 31, 2000, compared to the Russell 2000
Growth Index ("R2000G")* for the same time period.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
FUND R2000G
12/31/96 $10,000.00 $10,000.00
Jan-97 $10,350.00 $10,249.80
Feb-97 $10,020.00 $9,630.92
Mar-97 $9,250.00 $8,951.36
Apr-97 $8,940.00 $8,847.88
May-97 $10,280.00 $10,177.80
Jun-97 $10,840.00 $10,522.90
Jul-97 $11,370.00 $11,062.10
Aug-97 $11,650.00 $11,394.10
Sep-97 $12,930.00 $12,303.40
Oct-97 $12,250.00 $11,564.40
Nov-97 $12,069.90 $11,289.20
Dec-97 $12,229.20 $11,296.00
Jan-98 $11,927.20 $11,145.40
Feb-98 $12,802.60 $12,129.30
Mar-98 $13,637.40 $12,638.10
Apr-98 $13,496.90 $12,715.60
May-98 $12,360.50 $11,791.80
Jun-98 $12,591.60 $11,912.40
Jul-98 $11,414.30 $10,917.60
Aug-98 $8,949.95 $8,397.40
Sep-98 $9,844.94 $9,248.81
Oct-98 $10,166.90 $9,731.23
Nov-98 $11,092.10 $10,486.10
Dec-98 $12,057.10 $11,435.10
Jan-99 $12,620.10 $11,949.40
Feb-99 $11,644.60 $10,856.30
Mar-99 $12,499.30 $11,243.00
Apr-99 $12,991.80 $12,235.90
May-99 $13,061.90 $12,255.20
Jun-99 $14,570.60 $12,900.80
Jul-99 $14,400.10 $12,501.90
Aug-99 $14,390.00 $12,034.30
Sep-99 $15,154.20 $12,266.50
Oct-99 $16,692.30 $12,580.60
Nov-99 $19,136.00 $13,910.90
Dec-99 $24,021.50 $16,362.00
Jan-00 $23,824.50 $16,209.80
Feb-00 $32,634.80 $19,981.80
Mar-00 $28,921.00 $17,881.60
Apr-00 $24,530.80 $16,076.10
May-00 $22,195.40 $14,668.40
Jun-00 $26,625.60 $16,563.30
Jul-00 $23,710.10 $15,143.80
Aug-00 $27,425.50 $16,736.80
Sep-00 $25,609.90 $15,905.30
Oct-00 $23,981.20 $14,614.30
Average Annual
Total Returns
for periods ended
10/31/00
(Common Shares)
------------------
1 YEAR
43.65%
------------------
3 YEAR
25.10%
------------------
SINCE INCEPTION
(12/31/96
25.59%
------------------
FUND
-----
1 Year Total Return (9/30/99 to 9/30/00) ............................. 68.99%
3 Year Average Annual Total Return
(9/30/97 to 9/30/00) .............................................. 25.56%
Average Annual Total Return Since Inception
(12/31/96 to 9/30/00) ............................................. 28.47%
------------------
* The Russell 2000 Index is an unmanaged index (with no defined investment
objective) of approximately 2,000 small-cap stocks, includes reinvestment of
dividends, and is compiled by Frank Russell Company.
9
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- --------------
COMMON STOCKS (90.6%)
BUILDING & BUILDING MATERIALS (1.2%)
Lennar Corp. 927,600 $ 29,799,150
--------------
BUSINESS SERVICES (6.2%)
Cacheflow, Inc. 1 80,800 8,726,400
Commerce One, Inc. 1 512,500 32,896,094
New York Restaurant Group, Inc. 1,2 336,786 3,249,985
On Assignment, Inc. 1 1,472,520 37,089,097
Paychex, Inc. 509,550 28,885,116
TMP Worldwide, Inc. 1 374,550 26,072,191
West Teleservices Corp.1 430,500 10,977,750
--------------
147,896,633
--------------
COMMUNICATIONS & MEDIA (2.6%)
Ariba, Inc. 1 319,000 40,313,625
Finisar Corp. 1 687,000 19,794,187
Youthstream Media Networks, Inc. 1 995,344 1,928,479
--------------
62,036,291
--------------
COMPUTERS (11.2%)
Agile Software Corp. 1 25,200 1,899,450
BEA Systems, Inc. 1 670,000 48,072,500
Brocade Communications Systems, Inc. 173,000 39,335,875
Mercury Interactive Corp. 1 261,475 29,023,725
National Instruments Corp. 1 611,765 28,561,778
Network Appliance, Inc. 1 230,500 27,429,500
NVIDIA Corp. 1 390,200 24,247,272
Palm, Inc. 1 480,000 25,710,000
Phone.com, Inc. 1 190,000 17,586,875
Tech Data Corp. 1 641,000 26,681,625
--------------
268,548,600
--------------
CONSUMER SERVICES (2.0%)
DeVRY, Inc. 1 1,007,321 37,207,919
ITT Educational Services, Inc. 1 679,050 10,695,037
--------------
47,902,956
--------------
ELECTRONICS (14.9%)
Applied Micro Circuits Corp. 1 210,000 16,038,750
Bookham Technology PLC - ADR 1 662,500 22,317,969
Celestica, Inc. ADR 1 325,400 23,388,125
Emulex Corp. 1 172,000 25,262,500
Maxim Integrated Products, Inc. 1 1,132,390 75,091,612
Molex, Inc. 582,300 31,444,200
PMC-Sierra, Inc. 1 210,825 35,734,837
QLogic Corp. 1 240,000 23,220,000
Texas Instruments, Inc. 716,524 35,154,459
TranSwitch Corp. 1 575,000 33,206,250
See Accompanying Notes to Financial Statements.
10
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- --------------
COMMON STOCKS (CONT'D)
ELECTRONICS (cont'd)
Vishay Intertechnology, Inc. 1 570,057 $ 17,101,710
Vitesse Semiconductor Corp. 1 264,000 18,463,500
--------------
356,423,912
--------------
ENERGY (3.7%)
Apache Corp. 562,500 31,113,281
Chaparral Resources, Inc. 1 13,889 90,278
Devon Energy Corp. 509,000 25,653,600
Noble Affiliates, Inc. 646,500 23,718,469
Southern Energy, Inc. 1 276,500 7,534,625
--------------
88,110,253
--------------
FINANCIAL SERVICES (9.7%)
Capital One Financial Corp. 205,000 12,940,625
Enhance Financial Services Group, Inc. 295,050 5,732,144
Franklin Resources, Inc. 560,100 23,994,684
Indymac Mortgage Holdings, Inc. 1 1,848,900 38,595,787
John Hancock Financial Services, Inc. 1 400,000 12,650,000
Lehman Brothers Holdings, Inc. 400,000 25,800,000
MBIA, Inc. 445,000 32,345,937
Reinsurance Group of America, Inc. 1,139,095 42,573,676
Sun Life Financial Services 550,000 11,275,000
XL Capital, Ltd., Class A 350,000 26,906,250
--------------
232,814,103
--------------
FOOD, BEVERAGES & TOBACCO (0.1%)
Foodtrader.Com, Inc. 1,2 966,183 2,000,000
--------------
HEALTHCARE (13.9%)
ALZA Corp. 1 461,400 37,344,562
Coherent, Inc. 1 366,400 12,755,300
Community Health Systems, Inc. 1 557,600 15,717,350
Focal, Inc. 1 1 2
HCA-The Healthcare Co. 755,000 30,152,812
Health Management Associates, Inc.,
Class A 1 1,444,500 28,619,156
Inhale Therapeutic Systems, Inc. 1 275,000 13,681,250
Ivax Corp. 1,222,950 53,198,325
PE Corp - PE Biosystems Group 375,800 43,968,600
Stryker Corp. 282,000 13,289,250
Tenet Healthcare Corp. 964,000 37,897,250
Wellpoint Health Networks, Inc. 1 374,300 43,769,706
Softcom, Inc. 1,2 454,545 999,999
--------------
331,393,562
--------------
LODGING & RESTAURANTS (0.7%)
Park Place Entertainment Corp. 1 1,386,100 17,672,775
--------------
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- --------------
COMMON STOCKS (CONT'D)
OIL SERVICES (5.3%)
Cooper Cameron Corp. 1 367,790 $ 20,044,555
Nabors Industries, Inc. 1 982,675 50,018,157
Noble Drilling Corp. 1 538,490 22,380,991
Pogo Producing Co. 424,000 10,600,000
Pride International, Inc. 1 913,100 23,112,844
--------------
126,156,547
--------------
PHARMACEUTICALS (8.6%)
Abgenix, Inc. 1 162,500 12,817,187
Barr Laboratories, Inc. 1 299,800 18,924,875
Biovail Corp. 1 1,055,100 44,380,144
Celgene Corp. 1 405,700 26,116,938
Elan Corp. PLC ADR 1 543,000 28,202,063
Gemini Genomics PLC ADR1 99,400 1,130,675
Human Genome Sciences, Inc. 1 155,000 13,700,547
Icos Corp.1 145,400 7,469,925
IDEC Pharmaceuticals Corp. 1 50,000 9,806,250
ImClone Systems, Inc. 1 65,000 3,554,688
Medarex, Inc. 1 230,300 14,077,088
Millennium Pharmaceuticals, Inc. 1 340,000 24,671,250
Protein Design Labs, Inc. 1 5,000 675,391
--------------
205,527,021
--------------
REAL ESTATE (1.2%)
Apartment Investment & Management Co, Class A 300,000 13,706,250
Boston Properties, Inc. 300,000 12,150,000
Prologis Trust 146,100 3,068,100
--------------
28,924,350
--------------
TELECOMMUNICATIONS & EQUIPMENT (9.3%)
ANTEC Corp. 1 250,000 3,046,875
Audiocodes, Ltd. 1 1,017,480 40,254,053
Avanex Corp. 1 220,600 22,404,688
McLeodUSA, Inc. 1 1,190,875 22,924,344
MRV Communications, Inc. 1 437,900 17,297,050
Polycom, Inc. 1 1,023,650 66,537,250
Redback Networks, Inc. 1 279,000 29,696,063
Scientific Atlanta, Inc. 313,400 21,448,313
--------------
223,608,636
--------------
TOTAL COMMON STOCKS (Cost $1,509,482,200) 2,168,814,788
--------------
See Accompanying Notes to Financial Statements.
12
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- --------------
WARRANTS (0.0%)
Women First Healthcare, Inc. 1,2 (Cost $0) 5,516 $ 0
--------------
SHORT TERM INVESTMENTS (8.5%)
Institutional Money Market Trust 90,491,206 90,491,206
RBB Money Market Portfolio 111,546,591 111,546,591
--------------
TOTAL SHORT TERM INVESTMENTS (Cost $202,037,797) 202,037,797
--------------
PREFERRED RATES (1.5%)
BreezeCom, Ltd., Series B 1,2 1,509,955 28,028,540
Celltra, Ltd. 2 1,102,524 7,000,002
Opal Concepts, Inc., Series B 2 792,603 199,998
--------------
TOTAL PREFERRED (Cost $15,223,300) 35,228,540
--------------
PAR
-----
BONDS (0.3%)
Orckit Communications, Inc. (NR)
5.750% 04/01/05 $15,000,000 8,043,750
TimesSquareMedia.com, Inc. (NR)3,4
6.000% 11/22/02 2 2,900,000 0
--------------
TOTAL BONDS (Cost $17,900,000) 8,043,750
--------------
TOTAL INVESTMENTS AT VALUE (100.9%)
(Cost $1,744,643,297 5) 2,414,124,875
LIABILITIES IN EXCESS OF OTHER ASSETS (0.9%) (21,585,381)
--------------
NET ASSETS (100.0%) $2,392,539,494
==============
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
NR = Not Rated
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Restricted security.
3 Bond is currently in deafult.
4 Illiquid security.
5 Cost for federal income tax purposes is $1,753,820,121.
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
SCHEDULE OF INVESTMENTS--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (84.6%)
BANKS & SAVINGS & LOANS (5.9%)
Century Bancorp, Inc. Class A 30,300 $ 416,625
Dime Bancorp, Inc. 18,500 452,094
Prosperity Bancshares, Inc. 38,000 717,250
-----------
1,585,969
-----------
BUILDING & BUILDING MATERIALS (3.3%)
LSI Industries, Inc. 12,300 230,625
The Stanley Works 10,200 271,575
Walter Industries, Inc. 50,500 375,594
-----------
877,794
-----------
BUSINESS SERVICES (0.9%)
National Data Corp. 3,400 129,625
Sensormatic Electronics Corp. 1 6,000 108,000
-----------
237,625
-----------
COMPUTERS (1.5%)
Avid Technology, Inc. 1 7,200 99,900
JDA Software Group, Inc. 1 4,820 72,601
Silicon Graphics, Inc. 1 18,700 84,150
Storage Technology Corp. 1 7,700 75,075
Transactions Systems Architects, Inc.
Class A 1 4,700 63,450
-----------
395,176
-----------
CONSUMER DURABLES (4.4%)
Aftermarket Technology Corp. 1 45,800 243,312
Harman International Industries, Inc. 13,400 643,200
Lear Corp. 1 10,000 272,500
-----------
1,159,012
-----------
CONSUMER NON-DURABLES (3.6%)
Borg-Warner Automotive, Inc. 7,000 264,250
Cutter & Buck, Inc. 1 12,600 129,150
Phillips-Van Heusen Corp. 46,900 556,937
-----------
950,337
-----------
CONSUMER SERVICES (1.6%)
Lo-Jack Corp. 1 51,400 411,200
-----------
ELECTRONICS (2.6%)
Avant Corp. 1 21,200 356,425
Integrated Device Technology, Inc. 1 1,300 73,206
M.D.C. Holdings, Inc. 9,332 255,464
-----------
685,095
-----------
ELECTRIC - UTILITIES (9.1%)
Energy East Corp. 17,000 357,319
Sierra Pacific Resources 23,100 397,031
DTE Energy Co. 9,200 332,350
See Accompanying Notes to Financial Statements.
14
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (CONT'D)
ELECTRIC UTILITIES (cont'd)
NSTAR 10,900 $ 421,694
UniSource Energy Corp. 16,200 241,988
Public Service Company of New Mexico 23,300 642,206
-----------
2,392,588
-----------
ENERGY (3.3%)
Cross Timbers Oil Co. 8,850 166,491
HS Resources, Inc. 1 5,400 168,075
Ocean Energy, Inc. 1 13,400 185,925
Newfield Exploration Co. 1 4,700 177,425
Tesoro Petroleum Corp. 1 17,900 185,712
-----------
883,628
-----------
FINANCIAL SERVICES (14.5%)
AmeriCredit Corp. 1 22,100 593,937
Delphi Financial Group, Inc. Class A 1 10,000 370,000
Fremont General Corp. 159,200 577,100
GATX Corp. 13,900 584,669
HCC Insurance Holdings, Inc. 12,000 228,750
National Western Life Insurance Co.
Class A 1 2,500 221,250
Radian Group, Inc. 3,905 276,767
StanCorp Financial Group, Inc. 14,900 607,175
Webster Financial Corp. 15,200 370,500
-----------
3,830,148
-----------
GAS UTILITIES (1.3%)
MCN Energy Group, Inc. 14,300 352,138
-----------
HEALTHCARE (8.4%)
Bergen Brunswig Corp. Class A 13,700 124,156
Health Management Associates, Inc. Class A 1 12,900 255,581
ICU Medical, Inc. 1 9,100 227,500
LifePoint Hospitals, Inc. 1 5,200 201,500
Morrison Management Specialists, Inc. 8,450 283,075
Omnicare, Inc. 28,500 498,750
Sunrise Assisted Living, Inc. 1 13,200 308,550
Universal Health Services, Inc. 3,700 310,337
-----------
2,209,449
-----------
LEISURE & ENTERTAINMENT (1.1%)
SCP Pool Corp. 1 11,319 292,879
-----------
OIL SERVICES (3.1%)
Evergreen Resources, Inc. 1 13,100 360,250
Newpark Resources, Inc. 1 23,200 208,800
Pride International, Inc. 1 10,200 258,187
-----------
827,237
-----------
See Accompanying Notes to Financial Statements.
15
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (CONT'D)
PAPER & FORESTRY PRODUCTS (3.8%)
Caraustar Industries, Inc. 30 $ 302
Ivex Packaging Corp. 1 68,900 676,081
Packaging Corporation of America 1 22,500 330,469
-----------
1,006,852
-----------
REAL ESTATE (12.5%)
BRE Properties, Inc. Class A 17,100 540,788
CenterPoint Properties Corp. 11,800 524,363
Essex Property Trust, Inc. 9,800 509,600
Home Properties of New York, Inc. 7,800 212,063
Manufactured Home Communities, Inc. 13,200 328,350
Mission West Properties, Inc. 49,386 663,624
Urban Shopping Centers, Inc. 10,900 522,519
-----------
3,301,307
-----------
RETAIL (2.3%)
Pathmark Stores, Inc. 1 38,700 607,106
-----------
TRANSPORTATION (1.4%)
Landstar Systems, Inc. 1 7,700 363,825
-----------
TOTAL COMMON STOCKS (Cost $18,145,058) 22,369,365
-----------
SHORT TERM INVESTMENTS (14.9%)
Institutional Money Market Trust 2,721,794 2,721,795
RBB Money Market Portfolio 1,205,652 1,205,652
-----------
TOTAL SHORT TERM INVESTMENTS (Cost $3,927,447) 3,927,447
-----------
RIGHTS & WARRANTS (0.0%)
EA Industries, Inc. 2,3 (Cost $110,438) 1 0
-----------
TOTAL INVESTMENTS AT VALUE (99.5%)
(Cost $22,182,943 4) 26,296,812
OTHER ASSETS IN EXCESS OF LIABILITIES (0.5%) 136,061
-----------
NET ASSETS (100.0%) $26,432,873
===========
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Restricted security.
3 Illiquid security.
4 Cost for federal income tax purposes is $22,230,177.
See Accompanying Notes to Financial Statements.
16
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (92.6%)
BUSINESS SERVICES (2.7%)
Acxiom Corp. 1 17,800 $ 716,450
Getty Images, Inc. 1 11,200 355,600
QRS Corp. 1 5,650 47,672
Radvision Ltd. 1 2,700 59,737
Titan Corp. 1 8,200 109,675
-----------
1,289,134
-----------
COMMUNICATIONS & MEDIA (2.8%)
About.com, Inc. 2,200 52,800
IntraNet Solutions, Inc. 9,500 441,750
Pegasus Communications Corp. 1,004 35,705
Puma Technology, Inc. 3,500 47,469
Seachange International, Inc. 12,400 272,800
ValueVision International, Inc. 23,700 479,925
-----------
1,330,449
-----------
COMPUTERS (12.3%)
BackWeb Technologies, Ltd. 21,700 193,944
Concurrent Computer Corp. 1 31,700 558,712
Documentum, Inc. 1 8,700 739,500
Great Plains Software, Inc. 1 4,800 186,900
Informatica Corp. 1,500 141,750
Iona Technologies PLC ADR 1 7,500 493,125
Manugistics Group, Inc. 7,000 797,562
Marimba, Inc. 8,700 51,656
NetIQ Corp. 1 5,500 473,687
Peregrine Systems, Inc. 27,600 662,400
Planetweb, Inc. 1,2 27,600 150,144
Radiant Systems, Inc. 1 23,300 429,594
Remedy Corp. 1 8,900 152,412
RSA Security, Inc. 7,700 446,600
Unify Corp. 1 3,700 1,850
Zoran Corp. 1 7,900 395,987
-----------
5,875,823
-----------
CONSUMER SERVICES (1.5%)
Advantage Learning Systems, Inc. 13,800 409,687
Praecis Pharmaceuticals, Inc. 1 11,400 289,275
-----------
698,962
-----------
ELECTRONICS (16.2%)
Alpha Industries, Inc. 19,500 777,562
ANADIGICS, Inc. 1 15,750 352,406
Anaren Microwave, Inc. 1 5,350 556,400
Apw, Ltd. 1 18,200 840,612
Asyst Technologies, Inc. 1 11,500 172,500
Avant! Corp. 1 4,899 82,364
C-Cube Microsystems, Inc. 1 25,000 487,500
See Accompanying Notes to Financial Statements.
17
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (CONT'D)
ELECTRONICS (cont'd)
Caliper Technologies Corp. 1 3,800 $ 214,225
Cymer, Inc. 9,700 242,500
DSP Group, Inc. 1 17,600 499,400
EMCORE Corp. 1 16,400 672,400
Exar Corp. 1 10,500 469,219
Interlink Electronics, Inc. 9,000 201,375
Mips Technologies, Inc. Class A 1 11,600 465,450
Photronics, Inc. 1 16,700 376,794
Plexus Corp. 1 1,467 92,513
PRI Automation, Inc. 9,200 208,150
Sipex Corp. 1 13,100 515,812
Telcom Semiconductor, Inc. 1 1,500 21,094
Varian Semiconductor Equipment Associates,
Inc. 1 7,800 179,400
Veeco Instruments, Inc. 1 2,900 191,989
Zygo Corp. 1 2,205 109,147
-----------
7,728,812
-----------
ENERGY (1.2%)
Stone Energy Corp. 1 11,000 563,200
-----------
FINANCIAL SERVICES (3.9%)
AmeriCredit Corp. 1 17,500 470,312
Compucredit Corp. 1 4,500 138,937
Enhance Financial Services Group, Inc. 4,200 48,825
Fidelity National Financial, Inc. 22,700 557,569
Mutual Risk Management, Ltd. 13,000 235,625
Reinsurance Group, Inc. 10,731 401,071
-----------
1,852,339
-----------
FOOD, BEVERAGES & TOBACCO (0.7%)
Hain Celestial Group, Inc. 1 8,300 329,406
-----------
HEALTHCARE (17.4%)
Advance Paradigm, Inc. 1 21,800 1,065,475
AmeriSource Health Corp. Class A 1 18,100 786,219
Bindley Western Industries, Inc. 19,000 682,813
Coherent, Inc. 1 8,700 302,869
Community Health Care 1 29,600 834,350
Foundation Health Systems, Inc. Class A 1 42,700 862,006
Inhale Therapeutic Systems, Inc. 1 6,900 343,275
LifePoint Hospitals, Inc. 1 11,300 437,875
Mid Atlantic Medical Services, Inc. 1 29,100 494,700
MiniMed, Inc. 1 5,800 423,038
Oxford Health Plans, Inc. 1 28,000 945,000
Renal Care Group, Inc. 1 17,500 411,250
Universal Health Services, Inc. Class B 8,400 704,550
-----------
8,293,420
-----------
See Accompanying Notes to Financial Statements.
18
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (CONT'D)
LEISURE & ENTERTAINMENT (3.1%)
American Classic Voyages Co. 1 17,900 $ 247,244
Championship Auto Racing 1 16,600 412,925
Mandalay Resort Group 1 17,200 357,975
THQ, Inc. 1 21,600 442,800
-----------
1,460,944
-----------
OIL SERVICES (5.8%)
BJ Services Co. 1 8,000 419,500
Cooper Cameron Corp. 1 7,600 414,200
National-Oilwell, Inc. 1 14,100 412,425
Petroleum Geo - Services ADR 1 19,300 264,169
Precision Drilling Corp. 1 14,100 403,613
Rowan Companies, Inc. 1 16,000 403,000
Smith International, Inc. 1 6,300 444,150
-----------
2,761,057
-----------
PHARMACEUTICALS (11.4%)
Aclara Biosciences, Inc. 1 12,400 221,650
Alkermes, Inc. 1 21,000 778,313
Caremark Rx, Inc. 1 51,700 646,250
Cell Therapeutics, Inc. 1 9,000 602,016
Genencor International, Inc. 1 13,700 376,750
Intermune Pharmaceuticals, Inc. 2,900 145,000
K-V Pharmaceutical Co. 8,000 311,500
Lynx Therapeutics, Inc. 1 8,400 147,000
Maxim Pharmaceuticals, Inc. 4,800 213,000
Maxygen, Inc. 1 7,700 309,925
Medarex, Inc. 1 9,600 586,800
Medicis Pharmaceutical Corp. Class A 1 9,800 721,525
Titan Pharmaceuticals, Inc. 1 2,700 113,616
United Therapeutics Corp. 1 4,300 230,050
-----------
5,403,395
-----------
TELECOMMUNICATIONS & EQUIPMENT (13.6%)
Adaptive Broadband Corp. 1 1,900 30,519
Advanced Fibre Communications, Inc. 1 17,200 560,075
Aeroflex, Inc. 8,400 499,800
Antec Corp. 1 13,200 160,875
Audiocodes, Ltd. 1 11,900 470,794
Clarent Corp. 1 8,400 260,925
CTC Communications Corp. 1 8,850 85,458
Integrated Telecom Express, Inc. 1 22,700 320,638
MRV Communications, Inc. 1 10,800 426,600
Natural Microsystems Corp. 1 7,000 316,313
PECO II, Inc. 1 16,900 665,438
See Accompanying Notes to Financial Statements.
19
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
SCHEDULE OF INVESTMENTS (CONT'D)--OCTOBER 31, 2000
--------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
-------- -----------
COMMON STOCKS (CONT'D)
TELECOMMUNICATIONS & EQUIPMENT (cont'd)
Polycom, Inc. 9,800 $ 637,000
Powerwave Technologies, Inc. 1 14,700 707,438
Proxim, Inc. 10,400 630,500
Tekelec1 17,900 658,944
Viatel, Inc. 1 9,400 90,475
-----------
6,521,792
-----------
TOTAL COMMON STOCKS (Cost $43,250,587) 44,108,733
-----------
SHORT TERM INVESTMENTS (6.6%)
Institutional Money Market Trust 959,143 959,143
RBB Money Market Fund 2,208,176 2,208,176
-----------
TOTAL SHORT TERM INVESTMENTS (Cost $3,167,319) 3,167,319
-----------
TOTAL INVESTMENTS AT VALUE (98.9%)
(COST $46,417,906 3) 47,276,052
OTHER ASSETS IN EXCESS OF LIABILITIES (1.1%) 623,460
-----------
NET ASSETS (100.0%) $47,899,512
===========
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
--------------------------------------------------------------------------------
1 Non-income producing security.
2 Restricted security.
3 Cost for federal income tax purposes is $46,615,044.
See Accompanying Notes to Financial Statements.
20
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS WARBURG PINCUS
EMERGING GROWTH SMALL COMPANY SMALL COMPANY
FUND VALUE FUND GROWTH FUND
--------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Investments at value (cost - $1,744,643,297,
$22,182,943 and $46,417,906, respectively) $2,414,124,875 $26,296,812 $47,276,052
Dividends and interest receivable 653,633 80,054 9,777
Receivable for fund shares sold 5,629,081 1,084,648 388,152
Receivable for investment sold unsettled 7,256,473 0 1,067,141
Cash 0 0 200
Prepaid expenses and other assets 86,657 190,043 35,801
-------------- ----------- -----------
2,427,750,719 27,651,557 48,777,123
-------------- ----------- -----------
LIABILITIES
Advisory fee payable 1,856,259 10,792 0
Administration services fee payable 206,251 2,113 3,942
Directors fee payable 3,000 2,725 3,869
Payable for investments purchased 25,894,563 1,162,562 792,321
Payable for fund shares redeemed 6,166,647 0 23,164
Payable for as of fund share 0 4,861 0
Accrued expenses payable 1,084,505 35,631 54,315
-------------- ----------- -----------
35,211,225 1,218,684 877,611
-------------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value 47,876 6,947 2,073
Paid-in capital 1,334,006,077 18,771,524 48,704,964
Undistributed net investment income 0 26,001 0
Accumulated net realized gain (loss)
from security transactions 389,003,962 3,514,532 (1,665,672)
Net unrealized appreciation from investments 669,481,579 4,113,869 858,146
-------------- ----------- -----------
Net Assets $2,392,539,494 $26,432,873 $47,899,512
============== =========== ===========
COMMON SHARES
Net assets $2,114,737,396 $26,403,491 $47,899,512
-------------- ----------- -----------
Shares outstanding 42,096,024 1,945,293 2,072,823
-------------- ----------- -----------
Net asset value, offering price and redemption
price per share $50.24 $13.57 $23.11
====== ====== ======
ADVISOR SHARES
Net assets $ 277,802,098 $ 29,382
-------------- -----------
Shares outstanding 5,784,998 2,185
-------------- -----------
Net asset value, offering price and redemption
price per share $48.02 $13.45
====== ======
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Year Ended October 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS WARBURG PINCUS
EMERGING GROWTH SMALL COMPANY SMALL COMPANY
FUND VALUE FUND GROWTH FUND
--------------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 3,109,706 $ 399,806 $ 9,675
Interest 9,542,601 86,841 194,327
Foreign taxes withheld (4,575) 0 0
------------ ---------- -----------
Total investment income 12,647,732 486,647 204,002
------------ ---------- -----------
EXPENSES:
Investment advisory fees 21,973,038 265,466 338,862
Administrative services fees 4,205,534 56,829 72,008
Shareholder servicing/Distribution fees 1,538,827 66,277 84,716
Transfer agent fees 1,783,382 13,455 28,499
Custodian/Sub-custodian fees 411,399 33,033 38,405
Printing fees 302,962 14,419 10,545
Legal fees 108,685 15,894 12,040
Audit fees 60,395 12,000 13,400
Registration fees 48,362 25,196 53,089
Insurance expense 15,175 1,524 1,453
Directors fees 12,825 10,624 13,517
Interest expense 12,425 0 1,631
Offering/Organizational costs 0 14,944 0
Miscellaneous expense 86,156 0 1,293
------------ ---------- -----------
30,559,165 529,661 669,458
------------ ---------- -----------
Less: fees waived, expenses reimbursed and
transfer agent offsets (477,369) (66,476) (195,051)
------------ ---------- -----------
Total expenses 30,081,796 463,185 474,407
------------ ---------- -----------
Net investment income (loss) (17,434,064) 23,462 (270,405)
------------ ---------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM
INVESTMENTS:
Net realized loss from investments 419,040,087 3,733,200 (1,581,984)
Net change in unrealized appreciation (depreciation)
from investments 132,236,335 1,967,554 (1,139,253)
------------ ---------- -----------
Net realized and unrealized gain (loss) from
investments 551,276,422 5,700,754 (2,721,237)
------------ ---------- -----------
Net increase (decrease) in net assets resulting
from operations $533,842,358 $5,724,216 $(2,991,642)
============ ========== ===========
</TABLE>
See Accompanying Notes to Financial Statements.
22
<PAGE>
This page intentionally left blank
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
WARBURG PINCUS WARBURG PINCUS
EMERGING GROWTH SMALL COMPANY VALUE
FUND FUND
-------------------------------- --------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
--------------- --------------- ------------ -----------
2000 1999 2000 1999
--------------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (17,434,064) $ (15,518,919) $ 23,462 $ (354,167)
Net realized gain (loss) from investments 419,040,087 300,644,500 3,733,200 3,792,545
Net change in unrealized appreciation (depreciation) from
investments 132,236,335 205,391,594 1,967,554 (4,750,334)
--------------- --------------- ------------ -----------
Net increase (decrease) in net assets resulting from operations 533,842,358 490,517,175 5,724,216 (1,311,956)
--------------- --------------- ------------ -----------
FROM DISTRIBUTIONS:
Distributions from realized gains (losses):
Common Class Shares (225,635,097) 0 (3,505,579) (2,280,474)
Advisor Class Shares (31,683,347) 0 (2,470) (1,680)
--------------- --------------- ------------ -----------
Net decrease in net assets from distributions (257,318,444) 0 (3,508,049) (2,282,154)
--------------- --------------- ------------ -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 1,307,801,851 724,682,855 18,117,399 30,617,506
Reinvested distributions 248,328,679 225 3,045,568 2,155,694
Net asset value of shares redeemed (1,260,954,165) (1,237,905,127) (26,177,249) (80,318,997)
--------------- --------------- ------------ -----------
Net increase (decrease) in net assets from capital share
transactions 295,176,365* (513,222,047) (5,014,282) (47,545,797)
--------------- --------------- ------------ -----------
Net increase (decrease) in net assets 571,700,279 (22,704,872) (2,798,115) (51,139,907)
NET ASSETS:
Beginning of year 1,820,839,215 1,843,544,087 29,230,988 80,370,895
--------------- --------------- ------------ -----------
End of year $ 2,392,539,494 $ 1,820,839,215 $ 26,432,873 $29,230,988
=============== =============== ============ ===========
UNDISTRIBUTED NET INVESTMENT INCOME: $ 0 $ 0 $ 26,001 $ 0
=============== =============== ============ ===========
</TABLE>
<TABLE>
<CAPTION>
WARBURG PINCUS
SMALL COMPANY GROWTH
FUND
-----------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
------------ ------------
2000 1999
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ (270,405) $ (69,300)
Net realized gain (loss) from investments (1,581,984) 1,359,344
Net change in unrealized appreciation (depreciation) from
investments (1,139,253) 1,785,904
------------ ------------
Net increase (decrease) in net assets resulting from operations (2,991,642) 3,075,948
------------ ------------
FROM DISTRIBUTIONS:
Distributions from realized gains (losses):
Common Class Shares (393,861) 0
Advisor Class Shares 0 0
------------ ------------
Net decrease in net assets from distributions (393,861) 0
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 97,628,775 11,768,644
Reinvested distributions 350,461 0
Net asset value of shares redeemed (55,714,596) (10,367,900)
------------ ------------
Net increase (decrease) in net assets from capital share
transactions 42,264,640 1,400,744
------------ ------------
Net increase (decrease) in net assets 38,879,137 4,476,692
NET ASSETS:
Beginning of year 9,020,375 4,543,683
------------ ------------
End of year $ 47,899,512 $ 9,020,375
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME: $ 0 $ 0
============ ============
<FN>
*Includes redemption of 7,924,407 as a result of redemption in-kind on March 31, 2000.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
24 & 25
<PAGE>
WARBURG PINCUS EMERGING GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Common Class share of the Fund Outstanding Throughout Each Year)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
-------------------------------------------------------------------------------
2000 1999 1998 1997 1996
---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of year $ 43.73 $ 33.69 $ 39.66 $ 32.80 $ 29.97
---------- ---------- --------- ---------- ----------
INVESTMENT ACTIVITIES:
Net investment loss (0.33) (0.33) (0.12) (0.19) (0.02)
Net gains (losses) on investments
(both realized and unrealized) 13.07 10.37 (3.46) 7.12 4.60
---------- ---------- --------- ---------- ----------
Total from investment activities 12.74 10.04 (3.58) 6.93 4.58
---------- ---------- --------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from realized capital gains (6.23) 0.00 (2.39) (0.07) (1.75)
---------- ---------- --------- ---------- ----------
Total distributions 0.00 0.00 (2.39) (0.07) (1.75)
---------- ---------- --------- ---------- ----------
NET ASSET VALUE, END OF YEAR $ 50.24 $ 43.73 $ 33.69 $ 39.66 $ 32.80
========== ========== ========= ========== ==========
Total return 30.60% 29.80% (9.40)% 21.18% 16.14%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $2,114,737 $1,592,595 $1,532,521 $1,515,385 $1,104,684
Ratio of expenses to average net assets 1.19%1 1.23%1 1.22%1 1.22%1 1.28%
Ratio of net loss to average net assets (.65)% (.75)% (.48)% (.59)% (.63)%
Portfolio turnover rate 190.82% 154.08% 91.60% 87.03% 65.77%
<FN>
--------------------------------------------------------------------------------
1 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Class shares' expenses by .02% annualized for the year ended October
31, 2000, and by .01%, .00%, .01% and .01% for the years ending 1999, 1998,
1997 and 1996, respectively. The Common Class shares' operating expense ratio
after reflecting these arrangements were 1.17% for the year ended October 31,
2000, and 1.22%, 1.22%, 1.21% and 1.27% for the years ending 1999, 1998, 1997
and 1996, respectively.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
26
<PAGE>
WARBURG PINCUS SMALL COMPANY VALUE FUND
FINANCIAL HIGHLIGHTS
(For a Common Class share of the Fund Outstanding Throughout Each Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
----------------------------------------------------------------------------
2000 1999 1998 1997 1996 4
------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period $ 12.47 $ 13.39 $ 18.77 $ 14.38 $ 10.00
------- ------- ------- -------- -------
INVESTMENT ACTIVITIES:
Net investment income/(loss) 0.01 (0.15) (0.12) (0.08) (0.02)
Net gains (losses) on investments
(both realized and unrealized) 2.65 (0.34) (3.33) 4.64 4.40
------- ------- ------- -------- -------
Total from investment activities 2.66 (0.49) (3.45) 4.56 4.38
------- ------- ------- -------- -------
LESS DISTRIBUTIONS:
Distributions from realized capital gains (1.56) (0.43) (1.93) (0.17) 0.00
------- ------- ------- -------- -------
Total distributions (1.56) (0.43) (1.93) (0.17) 0.00
------- ------- ------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 13.57 $ 12.47 $ 13.39 $ 18.77 $ 14.38
======= ======= ======= ======== =======
Total return 22.56% (3.91)% (19.97)% 32.05% 43.80%2
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $26,403 $29,201 $80,318 $223,675 $84,045
Ratio of expenses to average net assets 1.76%1 1.76%1 1.70%1 1.70%1 1.75%1,3
Ratio of net gain to average net assets .09% (.76)% (.46)% (.63)% (.43)%3
Decrease reflected in above operating
expense ratios due to waivers/
reimbursements .23% .38% .01% .03% .44%3
Portfolio turnover rate 155.35% 168.57% 77.92% 105.87% 43.14%2
<FN>
--------------------------------------------------------------------------------
1 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Class shares' expenses by .02% annualized for the year ended October
31, 2000, and by .01%, .00%, .01% and .00% for the year or period ending
1999, 1998, 1997 and 1996, respectively. The Common Class shares' operating
expense ratio after reflecting these arrangements were 1.74% for the year
ended October 31, 2000, and 1.75%, 1.70%, 1.69% and 1.75% for the year or
period ending 1999, 1998, 1997 and 1996, respectively.
2 Non-annualized.
3 Annualized.
4 For the period December 29, 1995 (commencement of operations) through October
31, 1996.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
WARBURG PINCUS SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
(For a Common Class share of the Fund Outstanding Throughout Each Period)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31,
-------------------------------------------
2000 1999 1998 4 1997 4
------- ------- ------- -------
<S> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period $ 16.60 $ 10.11 $ 12.25 $ 10.00
------- ------- ------- -------
INVESTMENT ACTIVITIES:
Net investment loss (0.13) (0.13) (0.34) (0.04)
Net gains (losses) on investments and foreign currency
related items (both realized and unrealized) 7.28 6.62 (1.74) 2.29
------- ------- ------- -------
Total from investment activities 7.15 6.49 (2.08) 2.25
------- ------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (loss) 0.00 0.00 (0.06) 0.00
Distributions from net realized gains (0.64) 0.00 0.00 0.00
------- ------- ------- -------
Total dividends and distributions (0.64) 0.00 (0.06) 0.00
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 23.11 $ 16.60 $ 10.11 $ 12.25
======= ======= ======= =======
Total return 43.65% 64.19% (17)% 22.50%2
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $47,900 $ 9,020 $ 4,544 $11,977
Ratio of expenses to average net assets 1.42%1 1.41%1 1.40%1 1.41%1,3
Ratio of net loss to average net assets (.80)% (1.06)% (.95)% (.53)%3
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .56% 2.13% 1.10% 3.66%3
Portfolio turnover rate 93.65% 191.65% 114.97% 123.24%2
<FN>
--------------------------------------------------------------------------------
1 Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements resulted in a reduction to the
Common Class shares' expenses by .02% annualized for the year ended October
31, 2000, by .01%, .00%, .01%, for the year or period ended October 31, 1999,
1998 and 1997, respectively. The Common Class shares' operating expense ratio
after reflecting these arrangements were 1.40% for the year ended October 31,
2000, 1.40%, 1.40% and 1.40% for the year or period ended October 31, 1999,
1998 and 1997, respectively.
2 Non-annualized.
3 Annualized.
4 For the period December 31, 1996 (commencement of operations) through October
31, 1997.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
28
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The Warburg Pincus Emerging Growth Fund (the "Emerging Growth Fund"), Warburg
Pincus Small Company Value (the "Small Company Value Fund"), and Warburg Pincus
Small Company Growth Fund (the "Small Company Growth Fund") (each a "Fund" and
collectively the "Funds") each a Maryland Corporation, are registered under the
Investment Company Act of 1940, as amended (the "1940 Act") as diversified
open-end management investment companies (except the Emerging Growth Fund),
which is not diversified.
Investment objectives for each Fund are as follows: the Emerging Growth Fund
seeks maximum capital appreciation; the Small Company Value Fund seeks long-term
capital appreciation; the Small Company Growth Fund seeks capital growth.
Each Fund except the Small Company Growth Fund may invest up to 10% of its
total assets in non-publicly traded securities (the Small Company Growth Fund
may invest up to 15% of its net assets in such securities). Non-publicly traded
securities may be less liquid than publicly traded securities, and they may be
difficult or impossible to sell at the time and the price the Fund would like.
In addition, the lack of an active market may make it difficult to obtain an
accurate price for a Fund security.
Each Fund (except the Small Company Growth Fund) offers two classes of
shares, one class being referred to as the Common Class shares and one class
being referred to as the Advisor Class shares. The Small Company Growth Fund
offers only Common Class shares. Common Class and Advisor Class shares in each
Fund represent an equal pro rata interest in such Fund, except that they bear
different expenses which reflect the difference in the range of services
provided to them. Common Class shares for the Small Company Value Fund and the
Small Company Growth Fund each bear expenses paid pursuant to a shareholder
servicing and distribution plan at an annual rate of .25% of the average daily
net asset value of each Fund's Common Class shares. Advisor Class shares bear
expenses paid pursuant to a distribution plan at an annual rate not to exceed
.75% of the average daily net asset value of the applicable Fund's Advisor Class
shares. Advisor Class shares are currently bearing expenses of .50% of average
daily net assets. At October 31, 2000, there were no outstanding Advisor Class
shares for the Small Company Growth Fund.
29
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
The net asset value of each Fund is determined daily as of the close of
regular trading on the New York Stock Exchange. Each Fund's investments are
valued at market value, which is generally determined using market quotations.
If no sales are reported, investments are generally valued at the most recent
bid price and if there is no bid price available, at the most recent ask price.
If market quotations are not readily available, securities and other assets are
valued by another method that the Board of Directors believes accurately
reflects fair value. Debt that will mature in 60 days or less is valued on the
basis of amortized cost, which approximates market value, unless the Board
determines that using this method would not accurately reflect an investment's
value.
The books and records of the Funds are maintained in U.S. dollars.
Transactions denominated in foreign currencies are recorded at the current
prevailing exchange rates. All assets and liabilities denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange rate
at the end of the period. Translation gains or losses resulting from changes in
the exchange rate during the reporting period and realized gains and losses on
the settlement of foreign currency transactions are reported in the results of
operations for the current period. The Funds do not isolate that portion of
realized gains and losses on investments in equity securities which are due to
changes in the foreign exchange rate from that which is due to changes in market
prices of equity securities. The Funds isolate that portion of realized gains
and losses on investments in debt securities which are due to changes in the
foreign exchange rate from that which are due to changes in market prices of
debt securities.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. Income, expenses (excluding class-specific expenses,
principally distribution and shareholder servicing fees) and realized/unrealized
gains/losses are allocated proportionately to each class of shares based upon
the relative net asset value of outstanding shares of that class. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes.
Dividends from net investment income and net realized capital gains, if any,
are declared and paid at least annually. However, to the extent that a net
realized capital gain can be reduced by a capital loss carryover, such gain will
not be distributed. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
30
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
No provision is made for federal taxes, as it is each Fund's intention to
continue to qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code of 1986, as amended, (the
"Code") and make the requisite distributions to its shareholders, which will be
sufficient to relieve it from federal income and excise taxes.
Costs incurred in connection with organization of each Fund other than
Emerging Growth Fund have been deferred and are being amortized over a period of
five years from the date each Fund commenced its operations.
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, each Fund, along with other Funds advised by Credit Suisse Asset
Management, LLC ("CSAM"), can transfer uninvested cash balances to a pooled cash
account, which can invest in repurchase agreements secured by U.S. government
securities. Securities, pledged as collateral for repurchase agreements, are
held by the Funds' custodian bank until the agreements mature. Each agreement
requires that the market value of the collateral be sufficient to cover payments
of interest and principal; however, in the event of default or bankruptcy by the
counterpart to the agreement, retention of the collateral may be subject to
legal proceedings. As of October 31, 2000, the Funds had no investments in
repurchase agreements.
The preparation of financial statements in conformity with generally accepted
accounting principles 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 these estimates.
The Funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of their
transfer agent expense. For the year ended October 31, 2000, the Funds received
credits or reimbursements under this arrangement as follows:
FUND AMOUNT
---- --------
Emerging Growth Fund $477,369
Small Company Value Fund 5,175
Small Company Growth Fund 6,058
31
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Pursuant to Investment Advisory Agreement, CSAM, an indirect, wholly-owned
subsidiary of Credit Suisse Group, serves as investment advisor for each of the
Funds described herein. For its investment advisory services, CSAM receives the
following fees based on each Fund's average daily net assets:
FUND ANNUAL RATE
------ ---------------------------------
Emerging Growth Fund .90% of average daily net assets
Small Company Value Fund 1.00% of average daily net assets
Small Company Growth Fund 1.00% of average daily net assets
For the year ended October 31, 2000, investment advisory fees and voluntary
waivers were as follows:
GROSS NET
FUND ADVISORY FEE WAIVER ADVISORY FEE
---- ------------ --------- ------------
Emerging Growth Fund $21,973,038 $ 0 $21,973,038
Small Company Value Fund 265,467 (43,515) 221,952
Small Company Growth Fund 338,862 (166,999) 171,913
Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate of
CSAM, serves as each Fund's co-administrator. PFPC Inc. ("PFPC") an indirect,
wholly-owned subsidiary of PNC Bank Corp. ("PNC"), also serves as each Fund's
co-administrator. For administrative services, CSAMSI currently receives a fee
calculated at the rate of .10% of each Fund's daily net assets. For the year
ended October 31, 2000, administrative services fees were as follows:
FUND CO-ADMINISTRATION FEE
---- ---------------------
Emerging Growth Fund $2,441,449
Small Company Value Fund 26,547
Small Company Growth Fund 33,886
For its administrative services through July 31, 2000, PFPC received a fee,
exclusive of out-of-pocket expenses, based on the following fee structure:
AVERAGE DAILY
NET ASSETS ANNUAL RATE
------------------ --------------------------------
First $500 million .10% of average daily net assets
Next $1 billion .075% of average daily net assets
Over $1.5 billion .05% of average daily net assets
Effective August 1, 2000, for its administrative services, PFPC receives a
fee, exclusive of out-of-pocket expenses, based on the following fee structure:
AVERAGE DAILY
NET ASSETS ANNUAL RATE
------------------ --------------------------------
First $500 million .10% of average daily net assets
Next $1 billion .08% of average daily net assets
Over $1.5 billion .06% of average daily net assets
32
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
For the year ended October 31, 2000, administrative services fees earned and
voluntarily waived by PFPC (including out-of-pocket expenses) were as follows:
<TABLE>
<CAPTION>
NET
FUND CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
---- --------------------- -------- ---------------------
<S> <C> <C> <C>
Emerging Growth Fund $1,764,085 $ 0 $1,764,085
Small Company Value Fund 30,282 (17,786) 12,496
Small Company Growth Fund 38,122 (22,044) 16,078
</TABLE>
In addition to serving as each Fund's 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 for each
Fund. On August 1, 2000 CSAMSI replaced PDI as distributor to each Fund. No
compensation was paid by any of the Funds to PDI for distribution services.
Pursuant to a distribution plan adopted by each Fund pursuant to Rule 12B-1
under the 1940 Act, CSAMSI receives a fee for its selling services. This fee is
calculated at an annual rate of .25% of the average daily net assets of the
Common Class shares of the Small Company Value and Small Company Growth and at
.50% of the average daily net assets of each Funds' Advisor Class shares. CSAMSI
may use this fee to compensate service organizations for shareholder servicing
and distribution services. For the year ended October 31, 2000, shareholder
servicing and distribution fees were as follows:
SHAREHOLDER SERVICING/
FUND DISTRIBUTION FEE
---- ----------------------
Emerging Growth Fund
Advisor Class shares $1,538,827
==========
Small Company Value Fund
Common Class shares $ 66,098
Advisor Class shares 179
----------
$ 66,277
==========
Small Company Growth Fund
Common Class shares $ 84,716
==========
33
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
3. LINE OF CREDIT
The Funds, together with other funds advised by CSAM, have established a $350
million committed and a $75 million uncommitted, unsecured, line of credit
facility ("Credit Facility") with Deutsche Bank, AG as administrative agent,
State Street Bank and Trust Company as operations agents, Bank of Nova Scotia as
syndication agent and certain other lenders, for temporary or emergency purposes
primarily relating to unanticipated Fund 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 entire amount of
the Credit Facility which is allocated among the participating Funds in such
manner as is determined by the governing Boards of the various funds. In
addition, the participating Funds will pay interest on borrowing at the Federal
funds rate plus .50%. During the year ending October 31, 2000, the following
fund had borrowings under the line of credit agreement:
<TABLE>
<CAPTION>
MAXIMUM LOAN
AVERAGE DAILY AVERAGE DAILY LOAN OUTSTANDING
FUND LOAN BALANCE INTEREST RATE % OUTSTANDING 10/31/00
---- ------------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
Small Company Growth Fund $7,967 6.02 $671,000 $0
</TABLE>
4. INVESTMENTS IN SECURITIES
At October 31, 2000, purchases and sales of investment securities (excluding
short-term investments) were as follows:
FUND PURCHASES SALES
---- -------------- -----------
Emerging Growth Fund $4,281,122,199 $ 4,347,801
Small Company Value Fund 39,040,498 49,333,769
Small Company Growth Fund 68,172,491 31,291,489
At October 31, 2000, the net unrealized appreciation from investments for
those securities having an excess of value over cost and net unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
FUND APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ --------------
<S> <C> <C> <C>
Emerging Growth Fund $756,233,330 $(95,928,576) $660,304,754
Small Company Value Fund 4,804,848 (738,213) 4,066,635
Small Company Growth Fund 8,558,541 (7,897,533) 661,008
</TABLE>
34
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
5. RESTRICTED SECURITIES
Certain Funds' investments are restricted as to resale, are not readily
marketable and are valued as determined by or under the direction of each Fund's
Board in good faith, at fair value. The table below shows the number of shares
held, the acquisition dates, aggregate cost, fair value as of October 31, 2000,
and share value of the securities and percent of net assets, which the
securities comprise.
<TABLE>
<CAPTION>
PERCENTAGE
SECURITY ACQUISITION MARKET OF NET
FUND SECURITY DESCRIPTION TYPE DATE(S) COST VALUE ASSETS
---- -------------------- -------- ----------- ----------- ---------- ----------
Emerging Growth
Fund
<S> <C> <C> <C> <C> <C> <C>
Foodtrader.com, Inc. Preferred 09/12/00 $ 2,000,000 $ 2,000,000 0.08%
SoftCom, Inc. Preferred 12/21/99 999,999 999,999 0.04
Breeze Com, Ltd Series B Preferred 11/04/99 6,223,300 28,028,540 1.17
Celletra Limited Series C Preferred 04/05/00 7,000,000 7,000,002 0.29
TimesSquareMedia.com Bond 11/23/99 2,900,000 0 0.00
Chaparral Resources, Inc. Common 07/28/98 1,250,000 90,278 0.00
New York Restaurant Group, Inc. Common 10/30/97 3,249,985 3,249,985 0.14
Opal Concepts, Inc. Series B Preferred 08/31/95 2,000,000 199,998 0.01
Women First Healthcare, Inc. Warrants 03/18/99 0 0 0.00
----------- ----------- ----
$25,623,284 $41,568,802 1.73%
=========== =========== =====
Small Company
Value Fund
EA Industries, Inc. Warrants 03/31/98 $ 110,438 $ 0 0.00%
Small Company
Growth Fund
Planetweb, Inc. Common 09/08/00 $ 150,144 $ 150,144 0.31%
</TABLE>
6. FORWARD FOREIGN CURRENCY CONTRACTS
Each Fund may enter into forward currency contracts for the purchase or sale
of a specific foreign currency at a fixed price on a future date. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar. Each
Fund will enter into forward contracts primarily for hedging purposes. Forward
currency contracts are adjusted by the daily exchange rate of the underlying
currency and any gains or losses are recorded for financial statement purposes
as unrealized until the contract settlement date or an offsetting position is
entered into. At October 31, 2000, there were no open forward foreign currency
contracts.
35
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS
Each Fund is authorized to issue three billion full and fractional shares of
capital stock, $.001 par value per share, of which one billion shares (two
billion in the case of the Emerging Growth Fund) of each Fund are classified as
the Advisor Class.
Transactions in classes of each Fund were as follows:
<TABLE>
<CAPTION>
EMERGING GROWTH FUND
-------------------------------------------------------------------
COMMON CLASS SHARES
-------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31,1999
------------------------------- -------------------------------
SHARES VALUE SHARES VALUE
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold 23,543,013 $ 1,217,208,366 17,598,528 $ 690,945,900
Shares issued in
reinvestment
of dividends 4,767,193 217,193,291 6 225
Shares
repurchased (22,635,213) (1,156,532,309) (26,668,182) (1,047,436,237)
----------- --------------- ----------- ---------------
Net increase/
(decrease) 5,674,993 $ 277,869,348 (9,069,648) $ (356,490,110)
=========== =============== =========== ===============
</TABLE>
<TABLE>
<CAPTION>
EMERGING GROWTH FUND
-------------------------------------------------------------------
ADVISOR CLASS SHARES
-------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31,1999
------------------------------- -------------------------------
SHARES VALUE SHARES VALUE
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold 1,760,652 $ 90,593,485 882,074 $ 33,736,955
Shares issued in
reinvestment
of dividends 711,82 31,135,388 0 0
Shares
repurchased (2,123,029) (104,421,856) (5,013,511) (190,468,890)
---------- ------------- ---------- -------------
Net increase/
(decrease) 349,452 $ 17,307,017 (4,131,437) $(156,731,935)
========== ============= ========== =============
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND
-------------------------------------------------------------------
COMMON CLASS SHARES
-------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31,1999
------------------------------- -------------------------------
SHARES VALUE SHARES VALUE
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold 1,390,341 $ 17,797,30 2,370,859 $ 30,585,137
Shares issued in
reinvestment
of dividends 246,303 3,044,299 161,133 2,154,348
Shares
repurchased (2,033,476) (25,851,039) (6,189,358) (80,265,308)
---------- ------------ ---------- ------------
Net (decrease) (396,832) $ (5,009,431) (3,657,366) $(47,525,823)
========== ============ ========== ============
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY VALUE FUND
-------------------------------------------------------------------
ADVISOR CLASS SHARES
-------------------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31,1999
------------------------------- -------------------------------
SHARES VALUE SHARES VALUE
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Shares sold 25,991 $ 320,090 2,662 $ 32,369
Shares issued in
reinvestment
of dividends 103 1,269 101 1,346
Shares
repurchased (26,361) (326,210) (4,265) (53,689)
------- --------- ------ --------
Net (decrease) (267) $ (4,851) (1,502) $(19,974)
======= ========= ====== ========
</TABLE>
36
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
7. CAPITAL SHARE TRANSACTIONS -- (CONT'D)
SMALL COMPANY GROWTH FUND
----------------------------------------------------------
COMMON CLASS SHARES
----------------------------------------------------------
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2000 OCTOBER 31,1999
-------------------------- ---------------------------
SHARES VALUE SHARES VALUE
---------- ------------ -------- ------------
Shares sold 3,680,086 $ 97,628,775 859,778 $ 11,768,644
Shares issued in
reinvestment
of dividends 17,427 350,461 0 0
Shares
repurchased (2,168,206) (55,714,596) (765,739) (10,367,900)
---------- ------------ -------- ------------
Net increase 1,529,307 $ 42,264,639 94,039 $ 1,400,744
========== ============ ======== ============
37
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
8. OTHER FINANCIAL HIGHLIGHTS
Each fund (other than the Small Company Growth Fund) currently offers one
other class of shares, Advisor Class shares, representing equal pro rata
interests in each of the respective Funds. The financial highlights for an
Advisor Class share of each Fund are as follows:
<TABLE>
<CAPTION>
WARBURG PINCUS EMERGING GROWTH FUND
-----------------------------------------------------------
ADVISOR CLASS SHARES
-----------------------------------------------------------
YEAR ENDED: 2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period $ 41.99 $ 32.51 $ 38.50 $ 31.99 $ 29.38
-------- -------- -------- -------- --------
INVESTMENT ACTIVITIES:
Net investment loss (0.61) (0.65) (0.49) (0.33) (0.09)
Net gains or losses on investments
and foreign currency related items
(both realized and unrealized) 12.61 10.13 (3.11) 6.91 4.45
-------- -------- -------- -------- --------
Total from investment activities 12.00 9.48 (3.60) 6.58 4.36
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Distributions from net realized
capital gains (5.97) 0.00 (2.39) (0.07) (1.75)
-------- -------- -------- -------- --------
Total distributions (5.97) 0.00 (2.39) (0.07) (1.75)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 48.02 $ 41.99 $ 32.51 $ 38.50 $ 31.99
======== ======== ======== ======== ========
Total return 29.96% 29.16% (9.75)% 20.62% 15.69%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $277,802 $228,244 $311,023 $457,432 $362,696
Ratio of expenses to average
net assets 1.69%1 1.72%1 1.62%1 1.63%1 1.70%1
Ratio of net loss to average
net assets (1.15)% (1.25)% (.87)% (1.01)% (1.05)%
Portfolio turnover rate 190.82% 154.08% 91.60% 87.03% 65.77%
<FN>
--------------------------------------------------------------------------------
1 Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the net
expense ratio by .02% annualized for the year ended October 31, 2000 and by
.01%, .00%, .00% and .01% for the year ended October 31, 2000, 1999, 1998,
1997 and 1996, respectively. The operating expense ratios after reflecting
these arrangements were 1.67% for the year ended October 31, 2000, 1.71%,
1.62%, 1.63% and 1.69% for the year ended October 31, 2000, 1999, 1998, 1997
and 1996, respectively.
</FN>
</TABLE>
38
<PAGE>
WARBURG PINCUS DOMESTIC EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 2000
--------------------------------------------------------------------------------
8. OTHER FINANCIAL HIGHLIGHTS -- (CONT'D)
<TABLE>
<CAPTION>
WARBURG PINCUS SMALL COMPANY VALUE FUND
---------------------------------------------------------------
ADVISOR CLASS SHARES
-------------------------------------------------------------
DECEMBER 29, 1995
FOR THE YEAR ENDED OCTOBER 31, (COMMENCEMENT OF
-------------------------------------- OPERATIONS) THROUGH
PERIOD ENDED: 2000 1999 1998 1997 OCTOBER 31, 1996
------ ------ ------ ------ -------------------
<S> <C> <C> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period $12.35 $13.30 $18.65 $14.46 $10.00
------ ------ ------ ------ ------
INVESTMENT ACTIVITIES:
Net investment loss (0.01) (0.18) (0.40) (0.08) (0.02)
Net gains (losses) on investments
and foreign currency related items
(both realized and unrealized) 2.59 (0.34) (3.02) 4.44 4.48
------ ------ ------ ------ ------
Total from investment activities 2.58 (0.52) (3.42) 4.36 4.46
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Distributions from net realized
capital gains (1.48) (0.43) (1.93) (0.17) 0.00
------ ------ ------ ------ ------
Total distributions (1.48) (0.43) (1.93) (0.17) 0.00
------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $13.45 $12.35 $13.30 $18.65 $14.46
====== ====== ====== ====== ======
Total return 22.04% (4.17)% (19.93)% 30.47% 44.60%2
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $ 29 $ 30 $ 53 $ 255 $ 5
Ratio of expenses to average
net assets 2.01%1 2.01%1 1.97%1 1.89%1 1.97%1, 3
Ratio of net loss to average net assets (.07)% (1.02)% (.92)% (0.78)% (.52)%3
Decrease reflected in above
operating expense ratios due to
waivers/reimbursements .23% .39% .27% .65% 1.46%3
Portfolio turnover rate 155.35% 168.57% 77.92% 105.87% 43.14%2
<FN>
--------------------------------------------------------------------------------
1 Interest earned on uninvested cash balances is used to offset portions of
transfer agent expense. These arrangements resulted in a reduction to the net
expense ratio by .02% for the year ended October 31, 2000 and by .01%, .00%,
.01% and .00% for the year or period ended October 31, 1999, 1998, 1997 and
1996, respectively. The operating expense ratios after reflecting these
arrangements were 1.99% for the year ended October 31, 2000 and 2.00%, 1.97%,
1.88% and 1.97% for the year or period ended October 31, 2000, 1999, 1998,
1997 and 1996, respectively.
2 Non-annualized.
3 Annualized.
</FN>
</TABLE>
39
<PAGE>
WARBURG PINCUS FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
WARBURG, PINCUS EMERGING GROWTH FUND, INC.;
WARBURG, PINCUS SMALL COMPANY VALUE FUND, INC.;
WARBURG, PINCUS SMALL COMPANY GROWTH FUND, INC.:
In our opinion, the accompanying statements of assets and liabilities, including
the schedules of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects the financial position of the Warburg, Pincus Emerging Growth
Fund, Inc., Warburg, Pincus Small Company Value Fund, Inc. and Warburg, Pincus
Small Company Growth Fund, Inc., (all funds collectively referred to as the
"Funds") at October 31, 2000, the results of each of their operations for the
year then ended, the changes in each of their net assets for each of the two
years in the period then ended and their financial highlights for each of the
years (or periods) presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 2000 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
PRICEWATERHOUSECOOPERS LLP
Two Commerce Square
2001 Market Street
Philadelphia, Pennsylvania
December 15, 2000
40
<PAGE>
WARBURG PINCUS FUNDS
SHAREHOLDER TAX INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------
Each Fund is required by Subchapter M of the Code to advise its shareholders
within 60 days of Fund's fiscal year end as to the U.S. federal tax status of
distributions received by the Fund's shareholders in respect of such fiscal
year. During the fiscal year ended October 31, 2000, the following dividends and
distributions per share were paid by each of the Funds:
ORDINARY LONG-TERM % OF ORDINARY INCOME
INCOME CAPITAL GAINS DIVIDEND QUALIFYING FOR
FUND PER SHARE PER SHARE DIVIDENDS RECEIVED DEDUCTION*
---- --------- ------------- -----------------------------
1999
PAYMENT DATE 12/07/99 12/07/99
------------ -------- --------
Emerging Growth 0.00
Common shares $0.0000 $6.2321
Advisor shares 0.0000 5.9659
Small Company Value 0.00
Common shares $0.0000 $1.5602
Advisor shares 0.0000 1.4833
Small Company Growth 0.33
Common shares 0.2074 0.4331
Advisor shares 0.0000 0.0237
The Emerging Growth Fund and the Small Company Growth Fund did not pay any
ordinary income dividends or capital gain distributions during the current
fiscal year. Further, the above information was provided to calendar year
taxpayers via Form 1099-DIV mailed in January of 2000.
Because the fiscal year of the Funds is not a calendar year, another
notification will be sent with respect to calendar year 2000. The second
notification, which will reflect the amount to be used by calendar year
taxpayers on their U.S. federal income tax returns, will be made in conjunction
with Form 1099-DIV and will be mailed in January 20001.
-------------
* Available to Corporate Shareholders only.
41
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(LOGO)
WARBURG PINCUS FUNDS
PART OF CREDIT | ASSET
SUISSE | MANAGEMENT
[GRAPHIC OMITTED]
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874) o WWW.WARBURG.COM
CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. WPUSS-2-1000
