WARBURG PINCUS ADVISOR FUNDS
ANNUAL REPORT
August 31, 1995
Warburg Pincus Advisor
Growth & Income Fund
Warburg Pincus Advisor
Balanced Fund
A PROSPECTUS CONTAINING MORE COMPLETE
INFORMATION, INCLUDING MANAGEMENT FEES AND
EXPENSES, MAY BE OBTAINED BY CALLING 1-800-
369-2728 OR BY WRITING TO WARBURG PINCUS
ADVISOR FUNDS, P.O. BOX 9030, BOSTON, MA
02205-9030. INVESTORS SHOULD READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
[WARBURG PINCUS ADVISOR FUNDS LOGO]
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WARBURG PINCUS ADVISOR GROWTH & INCOME FUND
ANNUAL INVESTMENT ADVISER'S REPORT
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The Warburg Pincus Advisor Growth & Income Fund (the "Fund") commenced
operations on May 15, 1995. Since the commencement of operations, the Fund
appreciated 10.49% vs. an increase of 7.27% in the S&P 500 Index.
For the 12 months ended August 31, 1995, the Common Shares of the Warburg
Pincus Growth & Income Fund appreciated 15.62% vs. an increase of 21.38% in the
S&P 500 Index. Much of the Fund's underperformance relative to the S&P 500
during the period is attributable to its underweighting in technology, the
sector that has led the market for the last several quarters. While we concur,
in general, with the market's assessment of the long-term earnings potential for
many of these companies, we differ in our views of what constitutes fair value
for the companies' securities. Many technology stocks, we believe, had been bid
up to levels unjustified by their fundamentals, hence our decision to exclude
them from the portfolio. We continue to monitor the sector closely, however, and
will use any periods of price weakness over the coming months to establish and
build positions that we think have particularly favorable prospects.
Among our top performers during the 12 months ended August 31, 1995 were
banking and financial-services stocks. We had established our position in these
issues last year, when rising interest rates and derivatives-related scandals
had driven their prices down to what we deemed to be attractive levels. This
year, though, the sector, particularly the banking area, has rebounded strongly,
buoyed by falling interest rates, merger activity and subsiding fears of the
industry's vulnerability to derivatives. We saw especially strong gains from
BankAmerica and First Interstate Bancorporation, two of our largest positions.
Industrial cyclical stocks, another heavily weighted area in our portfolio,
also performed well during the 12 months ended August 31, 1995. We took profits
in some of our top performers--e.g., Inco, whose share price jumped nearly 50%
from June through September. The company produces roughly 25% of the world's
nickel, in addition to copper and other metals and metal-related products. Less
impressive was the performance of our steel companies, which include Bethlehem
Steel, Inland Steel and USX-U.S. Steel Group. The steel group has significantly
underperformed the market thus far in 1995, but we believe shifts in the global
supply/demand balance will provide considerable support for steel prices, and
these companies' earnings, going forward. Hence we have viewed the stocks'
short-term price weakness as a buying opportunity.
Supply/demand factors argue strongly for higher prices in many of the
metals, but the case is particularly strong for precious metals. Accordingly, we
have maintained our exposure to gold- and silver-mining companies, including
Hecla Mining, Homestake Mining, Newmont Mining, Pegasus Gold and Placer Dome. We
believe these stocks have considerable upside potential, especially over the
intermediate and long term.
1
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WARBURG PINCUS ADVISOR GROWTH & INCOME FUND
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
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We remain similarly committed to the telecommunications sector, an area that
has done quite well for us in 1995. We expect these stocks to continue to excel
through the rest of this year and well into 1996, particularly after the new
telecommunications bill becomes law. Our holdings here include AirTouch
Communications, which provides cellular-telephone communication services and
related products, and Qualcomm, whose technology to multiply tenfold the number
of telephone calls that can be carried over a single channel stands to
revolutionize the industry.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
WARBURG PINCUS GROWTH & INCOME FUND AND THE S&P 500
FROM 5/15/95* AND THE FISCAL YEAR END
----------------------------------------------------------
FUND S&P 500
--------------------------
--------------------------
$10,000 $10,000
5/15/95 - 08/31/95 $11,049 $10,727
From 05/15/95 to 08/31/95 10.49%
----------------------------------------------------------
* Hypothetical illustration of $10,000 investment since May 15, 1995
(commencement of operations of the Advisor Class).
Note: All figures cited here represent past performance and do not guarantee
future results. Investment return and the principal value of an investment
will fluctuate so that an investor's shares upon redemption may be more or
less than original shares.
2
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WARBURG PINCUS ADVISOR BALANCED FUND
ANNUAL INVESTMENT ADVISER'S REPORT
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The Warburg Pincus Advisor Balanced Fund (the "Fund") commenced operations
on July 31, 1995. Since the commencement of operations, the Fund gained 3.82%,
vs. a gain of 0.78% for the Lipper Balanced Fund Index.
For the 12 months ended August 31, 1995, the Common Shares of the Warburg
Pincus Balanced Fund gained 21.56% vs. a gain of 13.11% for the Lipper Balanced
Fund Index. Falling interest rates, continued economic growth and the absence of
significant inflationary pressures provided an ideal backdrop for both stock and
bond markets through most of the period. Throughout, we attempted to maintain an
optimal mix of stocks and bonds, one intended to provide solid returns at a
relatively low level of volatility.
The Fund finished the reporting period with a 51.5% commitment to domestic
common stocks, with its heaviest weightings in, respectively, the technology,
financial services, metals and mining, manufacturing, and oil sectors. Good
stock selection within these sectors, especially in the technology and
financial-services groups, played a significant role in the Fund's relatively
strong performance during the period, and we believe the prospects of our
holdings in these categories remain positive going forward.
The Fund's foreign-equity exposure (8.7% of assets at the close of the
period) consists of a diversified mix of issues among Asian and European
countries, with the largest weightings in Japan (1.9%) and the United Kingdom
(1.8%). We continue to find attractive opportunities in Asian markets, broadly
speaking, and in European markets on a stock-by-stock basis.
The Fund's fixed-income weighting remains concentrated most heavily in
short-term U.S. Treasury obligations. We maintained a minimal exposure to the
fixed-income sector through much of the reporting period, reflecting our bullish
view on the relative prospects of stocks vs. bonds. Looking ahead, we believe
conditions remains favorable for both markets, but particularly so for stocks,
and we have allocated the Fund's assets accordingly.
3
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WARBURG PINCUS ADVISOR BALANCED FUND
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
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COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE
WARBURG PINCUS BALANCED FUND, S&P 500, AND LIPPER BALANCED FUND INDEX
FROM 7/31/95* AND THE FISCAL YEAR END
----------------------------------------------------------
FUND *LIPPER S&P 500
-------------------------------
-------------------------------
$10,000 $10,000 $10,000
7/31/95 - 08/31/95 10,382 10,078 10,017
TOTAL RETURN (07/31/95 - 08/31/95) 3.82%
* LIPPER BALANCED FUND INDEX
----------------------------------------------------------
* Hypothetical illustration of $10,000 investment since July 31, 1995
(commencement of operations of the Advisor Class).
Note: All figures cited here represent past performance and do not guarantee
future results. Investment return and the principal value of an investment
will fluctuate so that an investor's shares upon redemption may be more or
less than original shares.
4
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WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS
August 31, 1995
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- --------------
COMMON STOCKS AND WARRANTS (82.2%)
Aerospace (1.3%)
Allied-Signal, Inc. 325,000 $ 14,421,875
--------------
Agriculture Production Corporations (0.4%)
Terra Industries, Inc. 320,300 4,284,013
--------------
Air Conditioning & Heating (0.9%)
Management Systems Johnson Controls, Inc. 170,000 10,348,750
--------------
Automobiles (1.3%)
Navistar International** 1,130,000 14,690,000
--------------
Banking (3.2%)
First Interstate Bancorp 368,000 35,144,000
--------------
Chemicals (1.4%)
PPG Industries, Inc. 355,000 15,176,250
--------------
Construction (2.2%)
Stone & Webster, Inc. 655,000 24,235,000
--------------
Electronic Computers (6.2%)
GRC International, Inc.** 667,000 16,341,500
Honeywell, Inc. 655,000 28,656,250
International Business Machines Corp. 221,000 22,845,875
--------------
67,843,625
--------------
Electronics (1.2%)
Motorola, Inc. 175,000 13,081,250
--------------
Entertainment (3.8%)
Acclaim Entertainment, Inc.** 1,420,000 35,855,000
Boardwalk Casino, Inc.** 525,000 4,528,125
Boardwalk Casino, Inc. Warrants
(expire 02/14/98)** 375,000 1,453,125
--------------
41,836,250
--------------
Financial Services (7.0%)
BankAmerica Corp. 655,000 37,007,500
Crestar Financial Corp. 270,000 15,221,250
Loyola Capital Corp. 247,500 8,662,500
Midlantic Corp. 302,000 15,553,000
--------------
76,444,250
--------------
Insurance (3.3%)
Chubb Corp. 150,000 13,687,500
USF&G Corp. 1,234,000 22,366,250
--------------
36,053,750
--------------
See Accompanying Notes to Financial Statements.
5
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WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- --------------
COMMON STOCKS AND WARRANTS (CONT'D)
Manufacturing (4.5%)
Corning Glass, Inc. 909,000 $ 29,656,125
Rauma OY Sponsored ADR** 102,900 2,443,875
Trinity Industries, Inc. 500,000 16,187,500
Whitman Corp. 50,000 1,006,250
--------------
49,293,750
--------------
Medical & Medical Services (1.9%)
Acuson Corp.** 210,000 2,756,250
Foxmeyer Health Corp.** 689,000 17,741,750
--------------
20,498,000
--------------
Metals & Mining (19.0%)
Echo Bay Mines Ltd. 500,000 5,187,500
Hecla Mining Co.** 1,940,000 22,310,000
Homestake Mining Co. 2,282,500 37,661,250
Inco Ltd. 985,000 34,475,000
Newmont Mining Corp. 903,000 39,280,500
Pegasus Gold, Inc.** 1,419,000 17,737,500
Placer Dome, Inc. 1,519,600 39,699,550
Prime Resources Group, Inc.** 1,400,000 11,210,360
--------------
207,561,660
--------------
Oil (1.0%)
Quaker State Corp. 715,000 10,725,000
--------------
Oil Services (4.4%)
Baker Hughes, Inc. 871,500 19,608,750
Halliburton Co. 521,000 22,077,375
Occidental Petroleum Corp. 280,000 6,090,000
--------------
47,776,125
--------------
Steel (13.0%)
AK Steel Holding Corp.** 454,000 14,471,250
Bethlehem Steel Corp.** 1,581,000 23,122,125
CBI Industries, Inc. 1,160,000 28,420,000
Inland Steel Industries, Inc. 585,000 16,014,375
LTV Corp.** 1,122,500 17,539,062
USX-US Steel Group 1,050,000 34,387,500
WHX Corp.** 623,000 7,865,376
--------------
141,819,688
--------------
Telecommunications (5.6%)
Airtouch Communications, Inc.** 363,400 11,810,500
Comcast Corp. Special Class A Non-Voting 1,000,000 21,375,000
Qualcomm, Inc.** 280,000 13,650,000
Tele-Communications, Inc. Class A** 800,000 14,800,000
--------------
61,635,500
--------------
See Accompanying Notes to Financial Statements.
6
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<TABLE><CAPTION>
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WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF NET ASSETS (CONCLUDED)
August 31, 1995
- ---------------------------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- --------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS (CONT'D)
Tire & Rubber (0.4%)
Cooper Tire & Rubber Co. 160,000 $ 4,160,000
--------------
Transportation (0.2%)
Consolidated Freightways, Inc. 100,000 2,587,500
--------------
TOTAL COMMON STOCKS AND WARRANTS (Cost $781,860,824) 899,616,236
--------------
</TABLE>
<TABLE>
<CAPTION>
MATURITY PAR (000)
-------- ---------
<S> <C> <C> <C>
UNITED STATES TREASURY OBLIGATIONS (2.7%)
U.S. Treasury Bills 5.40% (Cost $29,973,000) 09/07/95 $ 30,000 29,973,000
--------------
REPURCHASE AGREEMENTS (13.8%)
Greenwich Capital Markets Inc. 5.83% 09/01/95 151,138 151,138,000
(Agreement dated 08/31/95 to be repurchased at
$151,162,476, collateralized by $150,000,000 U.S.
Treasury Notes 7.50% due 01/31/97. Market value of
collateral is $154,312,500).
(Cost $151,138,000)
--------------
TOTAL INVESTMENTS AT VALUE (Cost $962,971,826*) (98.7%) 1,080,727,236
OTHER ASSETS IN EXCESS OF LIABILITIES (1.3%) 14,368,010
--------------
NET ASSETS (Applicable to 63,295,201 Common Shares and
3,472,875 Advisor Shares) (100.0%) $1,095,095,246
--------------
--------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
COMMON SHARE ($1,038,193,292 : 63,295,201) $16.40
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER ======
ADVISOR SHARE ($56,901,954 : 3,472,875) $16.38
======
</TABLE>
* Cost for Federal income tax purposes at August 31, 1995, is $963,365,013. The
gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $126,262,394
Gross Depreciation (8,900,171)
------------
Net Appreciation $117,362,223
------------
------------
** Non-income producing.
See Accompanying Notes to Financial Statements.
7
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WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF OPERATIONS
For the Year Ended August 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 10,389,100
Interest 11,731,546
------------
Total investment income 22,120,646
------------
EXPENSES:
Investment advisory fees 5,824,947
Administration fees 1,941,649
Distribution fees 71,233
Custodian fees 162,248
Transfer agent fees 1,060,279
Legal fees 63,384
Audit fees 55,268
Registration fees 264,509
Insurance expense 23,560
Printing expense 86,973
Other expenses 26,827
------------
Total expenses 9,580,877
------------
Net investment income 12,539,769
------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions 41,087,749
Futures contracts (2,798,582)
------------
38,289,167
------------
Net change in unrealized appreciation of investments 96,772,046
------------
Net gain on investments and future contracts 135,061,213
------------
Net increase in net assets resulting from operations $147,600,982
------------
------------
See Accompanying Notes to Financial Statements.
8
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<TABLE><CAPTION>
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WARBURG PINCUS GROWTH & INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------
For the For the
Year Ended Year Ended
August 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 12,539,769 $ 572,031
Net gain on investments and future contracts 135,061,213 17,971,937
--------------- ---------------
Net increase in net assets resulting from operations 147,600,982 18,543,968
--------------- ---------------
Distributions to shareholders:
Dividends to shareholders from net investment income:
Common shares ($.1824 and $.0785, respectively,
per share) (9,949,389) (572,031)
Advisor shares ($.0459 per share for 1995) (137,213) --
Distributions to shareholders from net realized capital
gains:
Common shares ($.1834 and $3.9751, respectively,
per share) (8,067,592) (10,054,939)
--------------- ---------------
Total distributions to shareholders (18,154,194) (10,626,970)
--------------- ---------------
Net capital share transactions 554,990,830 342,051,251
--------------- ---------------
Total increase in net assets 684,437,618 349,968,249
Net assets:
Beginning of year 410,657,628 60,689,379
--------------- ---------------
End of year $ 1,095,095,246 $ 410,657,628
--------------- ---------------
--------------- ---------------
</TABLE>
See Accompanying Notes to Financial Statements.
9
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WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS
August 31, 1995
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- -----------
COMMON STOCKS (60.1%)
U.S. COMMON STOCKS
Aerospace (0.2%)
Allied-Signal, Inc. 300 $ 13,313
-----------
Banking (2.5%)
Bank of Boston Corp. 2,200 96,800
First Interstate Bancorp 400 38,200
-----------
135,000
-----------
Business Services (1.2%)
Paging Network, Inc.** 1,600 63,200
-----------
Chemicals (0.2%)
PPG Industries, Inc. 300 12,825
-----------
Communications & Media (1.1%)
Infinity Broadcast Corp.** 1,600 57,400
-----------
Computer & Office Equipment (2.1%)
Shared Medical Systems Corp. 1,800 66,375
Synopsys, Inc.** 800 46,400
-----------
112,775
-----------
Construction (0.7%)
Stone & Webster, Inc. 1,000 37,000
-----------
Electronic Computers (7.4%)
Cabletron Systems, Inc.** 500 26,438
GRC International, Inc.** 2,100 51,450
Honeywell, Inc. 800 35,000
International Business Machines Corp. 300 31,013
Linear Technology Corp. 400 32,400
Netscape Communications Corp.** 1,500 74,250
Platinum Technology, Inc. 2,400 56,700
System Software Associates, Inc. 800 25,250
Xilinx, Inc.** 1,500 64,312
-----------
396,813
-----------
See Accompanying Notes to Financial Statements.
10
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<PAGE>
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WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- -----------
COMMON STOCKS (CONT'D)
Electronics (1.5%)
Motorola, Inc. 200 $ 14,950
Thermospectra Corp.** 3,500 62,563
-----------
77,513
-----------
Entertainment (1.2%)
Acclaim Entertainment, Inc.** 1,500 37,875
Boardwalk Casino, Inc.** 3,000 25,875
-----------
63,750
-----------
Financial Services (5.2%)
BankAmerica Corp. 700 39,550
Citicorp Bank 800 53,100
Crestar Financial Corp. 500 28,188
Midlantic Corp. 300 15,450
Olympic Financial Ltd.** 3,300 75,488
United Companies Financial Corp. 1,100 68,475
-----------
280,251
-----------
Insurance (1.0%)
Chubb Corp. 300 27,375
USF&G Corp. 1,300 23,563
-----------
50,938
-----------
Manufacturing (3.8%)
Allied Products Corp. 1,500 32,438
Corning Glass, Inc. 800 26,100
Maxim Integrated Products, Inc. 1,000 76,250
Roper Industries, Inc. 1,500 51,000
Trinity Industries, Inc. 500 16,188
-----------
201,976
-----------
Medical & Medical Services (1.0%)
Foxmeyer Health Corp.** 2,000 51,500
-----------
See Accompanying Notes to Financial Statements.
11
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<PAGE>
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WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- -----------
COMMON STOCKS (CONT'D)
Metals & Mining (5.3%)
Coeur D'Alene Mines Corp. 2,100 $ 40,163
Hecla Mining Co.** 3,000 34,500
Homestake Mining Co. 2,100 34,650
Inco LTD. 1,000 35,000
Newmont Mining Corp. 1,000 43,500
Pegasus Gold, Inc.** 2,500 31,250
Placer Dome, Inc. 1,500 39,188
Prime Resources Group, Inc.** 3,000 24,022
-----------
282,273
-----------
Office Furniture (1.3%)
Viking Office Products, Inc.** 1,900 68,400
-----------
Oil (3.4%)
Barrett Resources Corp.** 2,500 53,750
Petroleum Geo Services** 2,500 64,063
Quaker State Corp. 500 7,500
Texas Meridian Resources Corp.** 5,000 55,000
-----------
180,313
-----------
Oil Services (0.8%)
Baker Hughes, Inc. 1,000 22,500
Halliburton Co. 500 21,188
-----------
43,688
-----------
Paper Mills (0.8%)
Champion International Corp. 800 45,300
-----------
Pharmaceuticals (1.8%)
Al Laboratories, Inc. Class A 2,000 42,000
Gilead Sciences, Inc.** 2,500 54,375
-----------
96,375
-----------
Retail--Retail Stores (1.1%)
Borders Group, Inc.** 3,000 60,750
-----------
Retail--Women's Clothing Stores (1.0%)
Talbots, Inc. 1,500 51,750
-----------
See Accompanying Notes to Financial Statements.
12
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<PAGE>
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WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- -----------
COMMON STOCKS (CONT'D)
Steel (3.0%)
Bethlehem Steel Corp.** 2,000 $ 29,250
CBI Industries, Inc. 1,000 24,500
LTV Corp. 1,500 23,438
Republic Engineered Steels** 3,000 20,625
USX-US Steel Group 1,300 42,575
WHX Corp.** 1,600 20,200
-----------
160,588
-----------
Telecommunications (3.2%)
Airtouch Communications, Inc.** 300 9,750
Comcast Corp. Special Class A Non-Voting 1,000 21,375
Mobile Telecommunications Technologies Corp.** 1,900 58,425
Qualcomm, Inc.** 300 14,625
Tele-Communications, Inc. Series A Liberty
Media Group** 2,000 53,125
Tele-Communications, Inc. Class A** 800 14,800
-----------
172,100
-----------
Textiles (0.6%)
Westpoint Stevens, Inc.** 1,500 33,562
-----------
FOREIGN COMMON STOCKS
Australia (0.4%)
BTR Nylex Limited 8,500 22,610
-----------
Austria (0.7%)
Va Technologie AG 330 36,446
-----------
Denmark (1.0%)
International Service System B 1,900 51,716
-----------
France (0.8%)
Bouygues 240 29,196
Compagnie Francaise de Petroleum Total 280 16,443
-----------
45,639
-----------
Hong Kong (0.6%)
Jardine Matheson Holdings LTD. 4,400 31,680
-----------
See Accompanying Notes to Financial Statements.
13
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<PAGE>
<TABLE><CAPTION>
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WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
August 31, 1995
- ---------------------------------------------------------------------------------------------------
NUMBER
OF SHARES VALUE
--------- -----------
COMMON STOCKS (CONT'D)
<S> <C> <C>
Israel (0.4%)
Clal Electronics Industries LTD.** 180 $ 21,505
-----------
Japan (1.9%)
Keyence Corp. 800 102,301
-----------
Malaysia (0.5%)
Westmont B. 6,000 25,496
-----------
Sweden (0.6%)
Astra B Free 960 31,180
-----------
United Kingdom (1.8%)
Central European Media Enterprises LTD.** ADR 2,700 67,837
Takare PLC 8,200 26,715
-----------
94,552
-----------
TOTAL COMMON STOCKS (Cost $2,772,251) 3,212,478
-----------
</TABLE>
<TABLE>
<CAPTION>
PAR
MATURITY (000) VALUE
-------- ----- ----------
<S> <C> <C> <C>
AGENCY OBLIGATIONS (0.2%)
Government National Mortgage Association 6.50% (Cost $12,661) 08/15/03 $ 13 $ 12,858
----------
UNITED STATES TREASURY OBLIGATIONS (26.4%)
U.S. Treasury Notes
5.875% 05/31/96 300 300,390
6.875% 10/31/96 200 202,572
8.125% 02/15/98 20 21,007
8.50% 11/15/00 800 885,536
----------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,384,454) 1,409,505
----------
</TABLE>
See Accompanying Notes to Financial Statements.
14
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<PAGE>
<TABLE><CAPTION>
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WARBURG PINCUS BALANCED FUND
STATEMENT OF NET ASSETS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------------------------
PAR
MATURITY (000) VALUE
-------- ----- ----------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS (8.8%)
State Street Bank & Trust Co. 5.78% 09/01/95 468 $ 468,000
(Agreement dated 08/31/95 to be repurchased at $468,081,
collateralized by $480,000 U.S Treasury Notes 6.25% due
08/31/96. Market value of collateral is $481,800.) (Cost
$468,000)
----------
TOTAL INVESTMENTS AT VALUE (Cost $4,637,366*) (95.6%) 5,102,841
OTHER ASSETS IN EXCESS OF LIABILITIES (4.4%) 239,008
----------
NET ASSETS (Applicable to 480,061 Common Shares and 110 Advisor Shares)
(100.0%) $5,341,849
----------
----------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
COMMON SHARE ($5,340,625 : 480,061) $11.12
======
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
ADVISOR SHARE ($1,224 : 110) $11.13
======
</TABLE>
* Cost for Federal income tax purposes at August 31, 1995 is $4,641,506. The
gross appreciation (depreciation) on a tax basis is as follows:
Gross Appreciation $487,617
Gross Depreciation (26,282)
--------
Net Appreciation $461,335
--------
--------
** Non-income producing.
See Accompanying Notes to Financial Statements.
15
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<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS BALANCED FUND
STATEMENT OF OPERATIONS
For the Year Ended August 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 52,298
Dividends 11,828
Foreign taxes withheld (202)
--------
Total investment income 63,924
--------
EXPENSES:
Investment advisory fees 14,729
Administration fees 3,991
Distribution fees 4,155
Custodian fees 21,198
Transfer agent fees 27,158
Registration fees 15,075
Printing expense 10,393
Other expenses 4,330
--------
101,029
Less fees waived (17,123)
Less expense reimbursement by advisor (58,364)
--------
Total expenses 25,542
--------
Net investment income 38,382
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from:
Investment transactions 115,816
Foreign currency related transactions (679)
--------
115,137
--------
Net change in unrealized appreciation (depreciation) on:
Investments 380,862
Foreign currency related transactions (7)
--------
380,855
--------
Net gain on investments and foreign currency
transactions 495,992
--------
Net increase in net assets resulting from operations $534,374
--------
--------
See Accompanying Notes to Financial Statements.
16
- --------------------------------------------------------------------------------
<PAGE>
<TABLE><CAPTION>
- -----------------------------------------------------------------------------------------------------
WARBURG PINCUS BALANCED FUND
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------
For the For the
Year Ended Year Ended
August 31, 1995 August 31, 1994
--------------- ---------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 38,382 $ 29,100
Net gain on investments 495,992 23,057
--------------- ---------------
Net increase in net assets resulting from operations 534,374 52,157
--------------- ---------------
Distributions to shareholders:
Dividends to shareholders from net investment income:
Common shares ($.3136 and $.4586, respectively, per share) (38,909) (31,049)
Distributions to shareholders from net realized capital
gains:
Common shares ($1.5069 and $.9794, respectively, per
share) (111,945) (63,790)
--------------- ---------------
Total distributions to shareholders (150,854) (94,839)
--------------- ---------------
Net capital share transactions 4,150,301 88,893
--------------- ---------------
Total increase in net assets 4,533,821 46,211
Net Assets:
Beginning of year 808,028 761,817
--------------- ---------------
End of year $ 5,341,849 $ 808,028
--------------- ---------------
--------------- ---------------
</TABLE>
See Accompanying Notes to Financial Statements.
17
- --------------------------------------------------------------------------------
<PAGE>
<TABLE><CAPTION>
- --------------------------------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
FINANCIAL HIGHLIGHTS (D)
(For a Share Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------------------------------
Warburg Pincus Warburg Pincus
Growth & Income Balanced
Fund Fund
--------------- -----------------
<S> <C> <C>
For the Period
May 15, 1995 For the Period
(Commencement July 31, 1995
of Operations) (Commencement
to of Operations) to
August 31, 1995 August 31, 1995
--------------- -----------------
<CAPTION>
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.87 $10.72
Income From Investment Operations:
Net Investment Income 0.0236 0.0170
Net Gains (Losses) on Securities (both realized and
unrealized) 1.5323 0.3930
Total from Investment Operations 1.5559 0.4100
Less Distributions:
Dividends (from net investment income) (0.0459) 0.0000
------ -----
Total Distributions (0.0459) 0.0000
NET ASSET VALUE, END OF PERIOD $16.38 $11.13
Total Returns 10.49%(c) 3.82%(c)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000) $56,902 $1
Ratios of Expenses to Average Net Assets 1.92%(b) 1.76%(a)(b)
Ratios of Net Investment Income to Average Net Assets 0.43%(b) 2.00%(b)
Portfolio Turnover Rate 109%(b) 107%(b)
</TABLE>
(a) Without the waiver of advisory and administration fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Balanced Fund would have been 628.47% annualized
for the period ended August 31, 1995.
(b) Annualized.
(c) Not Annualized.
(d) Financial Highlights relate solely to the Advisor Class of shares within the
Fund.
See Accompanying Notes to Financial Statements.
TAX STATUS OF 1995 DIVIDENDS (unaudited)
Dividends paid by the Warburg Pincus Growth & Income Fund Advisor shares
taxable as ordinary income amounted to $0.0459 per share. 100.0% of ordinary
income dividends qualify for the dividend received deduction available to
corporate shareholders for U.S. income tax purposes.
Because the Fund's fiscal year is not the calendar year, amounts to be used
by calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1996.
18
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS
August 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
The RBB Fund, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment company.
The Company was incorporated in Maryland on February 29, 1988, and currently has
seventeen investment Portfolios, two of which are included in these financial
statements.
The Company has authorized capital of thirty billion shares of common stock
of which 12.2 billion are currently classified into sixty-one classes. Each
class represents an interest in one of seventeen investment portfolios of the
Company, fifteen of which are currently in operation. The classes have been
grouped into fifteen separate "families", eight of which have begun investment
operations including the Warburg Pincus Family. The Warburg Pincus Family
represents interests in three funds, two of which, the Warburg Pincus Growth &
Income Fund (the "Growth & Income Fund") and the Warburg Pincus Balanced Fund
(the "Balanced Fund"), are covered in this report. The Growth & Income Fund and
Balanced Fund each have two classes of shares: Common Class and Advisor Class.
The Advisor Class (also referred to as Series 2 shares) are sold by financial
institutions and operate under the name Warburg Pincus Advisor Funds.
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 securities are
valued at market value, which is currently determined using the last reported
sales price. If no sales are reported, as in the case of some securities traded
over-the-counter, portfolio securities are valued at the mean between the last
reported bid and asked prices. Corporate bonds and government securities are
valued on the basis of quotations provided by an independent pricing service
which uses information with respect to transactions on bonds, quotations from
bond dealers, market transactions in comparable securities and various
relationships between securities in determining value. Short-term obligations
with maturities of 60 days or less are valued at amortized cost which
approximates market value.
Security transactions are accounted for on the trade date. The cost of
investments sold is determined by use of the specific identification method for
both financial reporting and income tax purposes. Interest income is recorded on
the accrual basis. Dividends are recorded on the ex-dividend date. Certain
expenses, principally distribution, transfer agent and printing, are class
specific expenses and vary by class. Expenses not directly attributable to a
specific portfolio or class are allocated based on relative net assets of each
Portfolio and class, respectively.
Dividends from net investment income, if any, are declared and paid at least
quarterly. Any net realized capital gains will be distributed at least annually.
Income distributions and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principals.
No provision is made for Federal taxes as it is the Company's intention to
have each portfolio continue to qualify for and elect the tax treatment
applicable to regulated investment companies under the Internal Revenue Code and
make the requisite distributions to its shareholders which will be sufficient to
relieve it from Federal income and excise taxes.
19
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------
Money market instruments may be purchased subject to the seller's agreement
to repurchase them at an agreed upon date and price. The seller will be required
on a daily basis to maintain the value of the securities subject to the
agreement at not less than the repurchase price. The agreements are conditioned
upon the collateral being deposited under the Federal Reserve book-entry system
or with the Fund's custodian or a third party sub-custodian.
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ("Counsellors"), a wholly owned subsidiary
of Warburg, Pincus Counsellors G.P. ("Counsellors G.P.") serves as investment
advisor for the Growth & Income Fund. The advisory fee is computed daily and
payable monthly at the annual rate of .75% of the Growth & Income Fund's average
daily net assets.
Pursuant to a vote on September 30, 1994, shareholders approved a new
advisory contract between the Balanced Fund and Counsellors. Under the new
agreement, the Balanced Fund pays Counsellors an advisory fee at an annual rate
of .90% of the Fund's average daily net assets. The prior advisory agreement
between the Fund and PNC Institutional Management Corp. ("PIMC") was terminated
as of that date.
Counsellors may, at its discretion, voluntarily waive all or any portion of
its advisory fees for any of the Funds. For the year ended August 31, 1995,
investment advisory fees and waivers were as follows:
GROSS NET
ADVISORY FEE WAIVER ADVISORY FEE
------------ ------- ------------
Growth & Income Fund $ 5,824,947 $ -- $ 5,824,947
Balanced Fund 14,729 (14,729) --
PFPC Inc. ("PFPC"), an indirect wholly owned subsidiary of PNC Bank Corp.,
and Counsellors Fund Services, Inc. ("CFSI"), a wholly owned subsidiary of
Counsellors, serve as co-administrators for each of the Funds. For the Growth &
Income Fund, the co-administration fees are computed daily and payable monthly
at an annual rate of .20% of the first $125 million of average daily net assets
and .15% of average daily net assets in excess of $125 million for PFPC and .05%
of the first $125 million of average daily net assets and .10% of average daily
net assets in excess of $125 million for CFSI.
For the Balanced Fund, the co-administration fees are computed daily and
payable monthly at an annual rate of .15% of average daily net assets for PFPC
and .10% of average daily net assets for CFSI.
20
- --------------------------------------------------------------------------------
<PAGE>
<TABLE><CAPTION>
- -----------------------------------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1995
- -----------------------------------------------------------------------------------------------------------
CFSI and PFPC may, at their discretion, voluntarily waive all or any portion
of their co-administration fees for any of the Funds. For the year ended August
31, 1995, CFSI and PFPC's co-administration fees and waivers were as follows:
GROSS NET
CO-ADMINISTRATION FEES WAIVERS CO-ADMINISTRATION FEES
---------------------- ------- ----------------------
<S> <C> <C> <C>
Growth & Income Fund $1,941,649 $ -- $1,941,649
Balanced Fund 3,991 (2,394) 1,597
</TABLE>
The Company, on behalf of each class of shares within the investment
portfolios, has adopted Distribution Plans pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, and has entered into Distribution
contracts with Counsellors Securities Inc. ("CSI"), also a wholly owned
subsidiary of Counsellors, which provide for each class to make monthly
payments, based on average daily net assets to CSI. No compensation is payable
by the Growth & Income Fund's Common Shares. For distribution services with
respect to the Balanced Fund's Common Shares, CSI receives a fee at the annual
rate of .25%, computed daily and payable monthly, on average daily net assets.
For distribution services with respect to the Growth & Income and the Balanced
Funds' Advisor shares, CSI receives a fee of .25% and .50%, respectively,
computed daily and payable montly on average daily net assets. For the year
ended August 31, 1995, distribution fees and waivers were as follows:
DISTRIBUTION FEES
-----------------
Growth & Income Fund
Advisor Shares $71,233
--------
--------
Balanced Fund
Common Shares $ 4,155
Advisor Shares --
--------
$ 4,155
--------
--------
3. INVESTMENT IN SECURITIES
For the year ended August 31, 1995, purchases and sales of investment
securities (other than short-term investments) were as follows:
INVESTMENT SECURITIES
------------------------------
PURCHASES SALES
-------------- ------------
Growth & Income Fund $1,108,363,903 $617,767,292
Balanced Fund $ 5,047,134 $ 1,602,287
21
- --------------------------------------------------------------------------------
<PAGE>
<TABLE><CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1995
- -------------------------------------------------------------------------------------------------------------------------
4. CAPITAL SHARES
Transactions in capital shares for each year were as follows:
GROWTH & INCOME FUND BALANCED FUND
---------------------------------------------------- ---------------------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Year Ended
August 31, 1995 August 31, 1994 August 31, 1995 August 31, 1994
------------------------- ------------------------- ----------------------- --------------------
<CAPTION>
Shares Value Shares Value Shares Value Shares Value
----------- ------------ ----------- ------------ ----------- ---------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold
Common Shares 46,345,660 $670,088,619 29,256,806 $410,956,025 423,825 $4,348,625 609 $ 6,495
Advisor Shares 3,521,620 52,908,038 -- -- 110 1,180 -- --
Shares issued in
reinvestment of
dividends
Common Shares 6,891 96,291 67,788 894,152 16,171 148,491 8,690 93,303
Advisor Shares 9,051 137,213 -- -- -- -- -- --
Shares repurchased
Common Shares (11,270,725) (167,348,709) (4,741,678) (69,798,926) (33,364) (347,995) (982) (10,905)
Advisor Shares (57,795) (890,622) -- -- -- -- -- --
----------- ------------ ----------- ------------ ----------- ---------- ----------- -------
Net increase 38,554,702 $554,990,830 24,582,916 $342,051,251 406,792 $4,150,301 8,317 $88,893
----------- ------------ ----------- ------------ ----------- ---------- ----------- -------
----------- ------------ ----------- ------------ ----------- ---------- ----------- -------
Advisor shares
authorized 100,000,000 100,000,000 100,000,000 100,000,000
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
5. NET ASSETS
At August 31, 1995, net assets consisted of the following:
<TABLE>
<CAPTION>
GROWTH & INCOME FUND BALANCED FUND
-------------------- --------------
<S> <C> <C>
Capital paid-in.......................... $ 943,969,297 $4,808,416
Undistributed net investment income...... 2,435,167 7,138
Accumulated net realized gain (loss) on
investment transactions, futures
contracts and foreign exchange
transactions........................... 30,926,372 60,835
Unrealized appreciation on investments... 117,755,410 465,460
-------------------- --------------
$1,095,095,246 $5,341,849
-------------------- --------------
-------------------- --------------
</TABLE>
6. FUTURES CONTRACTS
The Growth & Income Fund may enter into futures contracts for hedging or
portfolio management strategy purposes to the extent permitted by its investment
policies and objectives. To enter into a futures contract, the Growth & Income
Fund must make a deposit of an initial margin with its custodian in a segregated
account. Subsequent payments, which are dependent on the daily fluctuations in
the value of the underlying instrument, are made or received by the Fund each
day (daily variation margin) and are recorded as unrealized gains or losses
until the contracts are closed. When the contract
22
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1995
- --------------------------------------------------------------------------------
is closed, the Fund records a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transactions and the Fund's
basis in the contract. Risks of entering into futures contracts include the
possibility that a change in the value of the contract may not correlate with
changes in the value of the underlying instruments. The Growth & Income Fund
entered into futures transactions during the year ended August 31, 1995.
However, the Warburg Pincus Growth & Income Fund had no futures contracts open
at August 31, 1995.
7. OTHER FINANCIAL HIGHLIGHTS
The Growth & Income and the Balanced Fund currently offer one other class of
shares, Common Shares, representing an additional interest in each of the Funds.
The financial highlights of each of the Common Shares are as follows:
23
- --------------------------------------------------------------------------------
<PAGE>
<TABLE><CAPTION>
- -------------------------------------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1995
- -------------------------------------------------------------------------------------------------------------
Growth and Income Fund
Common Class of Shares
For the Years Ended August 31,
-------------------------------------------------------------------
1995 1994 1993 1992 1991
---------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $14.56 $16.72 $11.99 $12.11 $11.00
Income From Investment
Operations:
Net Investment Income 0.2224 0.0785 0.0464 0.1912 0.3744
Net Gains on Securities (both
realized and unrealized) 1.9834 1.8151 4.8499 0.0402 1.6891
Total from Investment
Operations 2.2058 1.8936 4.8963 0.2314 2.0635
Less Distributions:
Dividends (from net investment
income) (0.1824) (0.0785) (0.0875) (0.1871) (0.4043)
Distributions (from capital
gains) (0.1834) (3.9751) (0.0788) (0.1643) (0.5492)
Total Distributions (0.3658) (4.0536) (0.1663) (0.3514) (0.9535)
NET ASSET VALUE, END OF YEAR $16.40 $14.56 $16.72 $11.99 $12.11
Total Return 15.62]% 14.41% 41.17% 1.99% 19.91%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (000) $1,038,193 $410,658 $60,689 $28,976 $24,726
Ratios of Expenses to Average Net
Assets 1.22% 1.28%(a) 1.14%(a) 1.25%(a) 1.30%(a)
Ratios of Net Investment Income to
Average Net Assets 1.64% 0.41% 0.30% 1.66% 3.42%
Portfolio Turnover Rate 109% 150% 344% 175% 41%
</TABLE>
(a) Without the waiver of advisory and administration fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Growth & Income Fund would have been 1.28%,
1.14%, 1.28% and 2.17% for the years ended August 31, 1994, 1993, 1992 and
1991, respectively.
24
- --------------------------------------------------------------------------------
<PAGE>
<TABLE><CAPTION>
- -------------------------------------------------------------------------------------------------------------
WARBURG PINCUS ADVISOR FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
August 31, 1995
- -------------------------------------------------------------------------------------------------------------
Balanced Fund
Common Class of Shares
For the Years Ended August 31,
---------------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $11.01 $11.71 $12.04 $12.05 $10.60
Income From Investment Operations:
Net Investment Income 0.2080 0.4132 0.5555 0.4408 0.4213
Net Gains on Securities (both
realized and unrealized) 1.7225 0.3248 1.1253 0.5155 1.7196
Total from Investment Operations 1.9305 0.7380 1.6808 0.9563 2.1409
Less Distributions:
Dividends (from net investment
income) (0.3136) (0.4586) (0.5412) (0.3713) (0.4128)
Distributions (from capital gains) (1.5069) (0.9794) (1.4696) (0.5950) (0.2781)
Total Distributions (1.8205) (1.4380) (2.0108) (0.9663) (0.6909)
NET ASSET VALUE, END OF YEAR $11.12 $11.01 $11.71 $12.04 $12.05
Total Return 21.56% 6.86% 15.27% 8.07% 21.18%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (000) $5,342 $808 $762 $1,026 $1,290
Ratios of Expenses to Average Net Assets 1.53%(a) 0%(a) 0%(a) .67%(a) 1.40%(a)
Ratios of Net Investment Income to
Average Net Assets 2.27% 3.76% 4.13% 3.68% 3.58%
Portfolio Turnover Rate 107% 32% 30% 93% 76%
</TABLE>
(a) Without the waiver of advisory and administration fees and without the
reimbursement of certain operating expenses, the ratios of expenses to
average net assets for the Balanced Fund would have been 6.04%, 5.46%,
5.37%, 3.88% and 3.89% for the years ended August 31, 1995, 1994, 1993, 1992
and 1991, respectively.
25
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<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of The RBB Fund, Inc.:
We have audited the accompanying statements of net assets of Warburg Pincus
Growth & Income Fund and Warburg Pincus Balanced Fund of The RBB Fund, Inc., as
of August 31, 1995, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments held as of
August 31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Warburg Pincus Growth & Income Fund and Warburg Pincus Balanced Fund of The RBB
Fund, Inc., as of August 31, 1995, and the results of their operations for the
year then ended, the changes in their net assets for each of the two years in
the period then ended, and their financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 16, 1995
- --------------------------------------------------------------------------------
<PAGE>
Warburg Pincus Advisor Funds
Counsellors Securities Inc., distributor
800-369-2728
[WARBURG PINCUS ADVISOR FUNDS LOGO]