WARBURG PINCUS ADVISOR FUNDS OCTOBER 31, 1999
INTERNATIONAL EQUITY FUND
EMERGING MARKETS FUND
GLOBAL POST-VENTURE CAPITAL FUND
A
ANNUAL REPORT
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 800-222-8977 or by writing to Warburg Pincus Advisor Funds,
P.O. Box 9030, Boston, MA 02205-9030.
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WARBURG PINCUS
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CREDIT SUISSE
ASSET MANAGEMENT
<PAGE>
From time to time, the Funds' investment adviser and co-administrators may waive
some fees and/or reimburse some expenses, without which performance would be
lower. Waivers and/or reimbursements are subject to change.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
than original cost.
International investing entails special risk considerations, including currency
fluctuations, lower liquidity, economic and political risks, and differences in
accounting methods.
The views of the Funds' management are as of the date of the letters and
portfolio holdings described in this document are as of October 31, 1999; these
views and portfolio holdings may have changed subsequent to these dates. Nothing
in this document is a recommendation to purchase or sell securities.
Fund shares are not deposits or other obligations of Credit Suisse Asset
Management, LLC ("CSAM LLC") or any affiliate, are not FDIC insured and are not
guaranteed by CSAM LLC or any affiliate. Fund investments are subject to
investment risks, including loss of your investment.
<PAGE>
Warburg Pincus International Equity Fund
Annual Investment Adviser's Report -- October 31, 1999
- --------------------------------------------------------------------------------
December 9, 1999
Dear Shareholder:
For the 12 months ended October 31, 1999, Warburg Pincus International
Equity Fund Advisor Class shares had a return of 30.78%, vs. a return of 25.98%
for the Morgan Stanley All Country World Excluding the U.S. Index. Harold W.
Ehrlich, P. Nicholas Edwards, Vincent J. McBride and Harold E. Sharon serve as
Co-Portfolio Managers.
Manager Commentary
The period was a positive one for almost all foreign stock markets, though
results varied by region. Asian/Pacific markets were the clear standouts, fueled
by growing confidence that the worst of the region's economic difficulties were
finally behind it. European markets had generally solid returns in
local-currency terms, though for dollar-based, or unhedged, investors, these
gains were pared by weakness in European currencies vs. the dollar during the
period. Latin American markets, shaking off a mid-period financial crisis in
Brazil, the region's economic powerhouse, ultimately saw healthy gains, as did
most of the rest of the emerging-market universe.
Against this backdrop, the Fund registered a healthy gain for the 12
months, and outperformed its benchmark. Supporting the Fund's performance was
our decision to increase its exposure to Asia, given the impressive rebound in
these markets through the period (our concentration on Japanese technology and
financial stocks proved particularly beneficial). One factor that hampered the
Fund somewhat was its exposure to European currencies, which were hindered by
the surprisingly weak debut of the euro vs. the dollar. This reduced the
local-currency share-price returns (which, overall, were solid) generated by the
Fund's European holdings.
With respect to regional strategies, we increased, as noted, our weighting
in Asia during the period (Asian/Pacific markets accounted for roughly 44% of
the fund on October 31, up from about a 15% weighting at the start of the
period.) This reflected our view that a large number of long-struggling stocks
here were attractively priced, given improving financial and economic conditions
across the region. Our increased presence here was also based on the fair amount
of genuine restructuring taking place within Asia on both industry and company
levels. By country, our particular focus was on Japan, where we were modestly
overweighted at the end of the period. We also held small but still-meaningful
weightings in Singapore (where we favored banking stocks) and South Korea (where
our bias was toward electronics companies).
1
<PAGE>
Warburg Pincus International Equity Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
We decreased our emphasis on Europe during the period, in general because
we saw more compelling stocks in Asia. That notwithstanding, we believe the
backdrop for European equities will remain supportive (and we could well raise
our weighting here over the near-to-intermediate term). One obvious reason for
optimism concerning Europe is the general improvement in the region's economic
health. While forecasts vary widely by country, aggregate output is projected to
continue to rise, with positive implications for corporate earnings,
particularly within certain sectors. Also favorable for equity markets is the
ongoing crush of merger and acquisition ("M&A") activity, which for 1999 is
projected to reach record levels, perhaps exceeding the level of M&A activity
within the U.S. for the first time. Expectations of continued, if not
accelerated, activity should maintain broad upward pressure on share prices,
especially in those industries in which such activity is heaviest, particularly
banking, energy and telecommunications.
Elsewhere of note, we raised our weighting in Canada during the period,
adding several energy-services and technology-related issues that we judged to
represent good value. We largely avoided Latin American markets through the
period, deeming most stocks here to be expensive from a risk-reward perspective,
though we will continue to closely monitor the region for buying opportunities.
Looking out over the next 12 months, we believe that foreign stock markets
generally stand to continue to benefit from an improving global economy,
particularly if Japan and/or Europe surprise on the up side (we believe that
each has the potential to show better-than-expected growth). That said, these
markets are likely to remain volatile, necessitating in our view continued
careful stock selection. Set within this environment, we will continue to strive
to identify markets and companies we deem to have the brightest long-term
prospects.
Harold W. Ehrlich P. Nicholas Edwards
Co-Portfolio Manager Co-Portfolio Manager
Vincent J. McBride Harold E. Sharon
Co-Portfolio Manager Co-Portfolio Manager
International investing entails special risk considerations, including
currency fluctuations, lower liquidity, economic and political risks, and
differences in accounting methods. These are detailed in the Fund's Prospectus,
which should be read carefully before investing.
2
<PAGE>
Warburg Pincus International Equity Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Advisor Class shares of Warburg Pincus
International Equity Fund since Inception as of October 31, 1999
The graph below illustrates a hypothetical investment of $10,000 in Advisor
Class shares of Warburg Pincus International Equity Fund (the "Fund") from April
5, 1991 (inception) to October 31, 1999, compared to the Morgan Stanley All
Country World Excluding the U.S. Index ("MSCI")* for the same time period.
[GRAPHIC]
In the printed version of the document, a line graph appears
which depicts the following plot points:
Fund MSCI
------- -------
10000 10000
Apr-91 9847.79 10127.9
May-91 10000 10260.8
Jun-91 9519.33 9580.69
Jul-91 10069.8 10029.7
Aug-91 9993.39 9835.87
Sep-91 10337.5 10327.9
Oct-91 10444.5 10478.1
Nov-91 10062.2 10018.5
Dec-91 10409.2 10520.3
Jan-92 10510.4 10429.6
Feb-92 10417 10098.7
Mar-92 10222.5 9507.69
Apr-92 10401.5 9534.12
May-92 10821.6 10089.7
Jun-92 10346.6 9613.44
Jul-92 9909.67 9392.33
Aug-92 9933.07 9862.04
Sep-92 9753.61 9641.72
Oct-92 9519.52 9248.92
Nov-92 9738 9314.95
Dec-92 9906.62 9378.48
Jan-93 10143.1 9376.14
Feb-93 10363.7 9686.49
Mar-93 11025.8 10486.4
Apr-93 11679.9 11386.2
May-93 11884.8 11624
Jun-93 11606.2 11478
Jul-93 12032 11842.1
Aug-93 12788.9 12447.2
Sep-93 12733.7 12203
Oct-93 13332.9 12638.9
Nov-93 13104.3 11735.1
Dec-93 14917.1 12714.9
Jan-94 16323.5 13756.8
Feb-94 15936.3 13629.8
Mar-94 14648.5 13001
Apr-94 14956.6 13454.2
May-94 15446.5 13469
Jun-94 15225.2 13561.4
Jul-94 15730.9 13811.6
Aug-94 16410.4 14284.6
Sep-94 16031.2 13985.1
Oct-94 16102.3 14316.1
Nov-94 15407 13635.1
Dec-94 14878.8 13618.7
Jan-95 13592.8 12961.8
Feb-95 13348.6 12890.1
Mar-95 14219.5 13608.3
Apr-95 14642.7 14092.1
May-95 14626.4 14016.3
Jun-95 14479.4 13821.6
Jul-95 15392.1 14574.6
Aug-95 15620.2 14056.3
Sep-95 15962.4 14316.3
Oct-95 15612.1 13935.8
Nov-95 15848.4 14227.2
Dec-95 16345 14781.2
Jan-96 16805.3 14946.3
Feb-96 16830.4 14948.9
Mar-96 16989.4 15239.5
Apr-96 18002.1 15781.1
May-96 17608.8 15517.9
Jun-96 17818 15609.6
Jul-96 16930.9 15073.8
Aug-96 17081.5 15160.5
Sep-96 17349.3 15532.9
Oct-96 17156.8 15372.9
Nov-96 17893.3 15956.6
Dec-96 17989.7 15764.3
Jan-97 17981 15487
Feb-97 18172.2 15777.7
Mar-97 18024.4 15751.5
Apr-97 18372 15895.2
May-97 19623.5 16855.4
Jun-97 20457.8 17795.1
Jul-97 21066.1 18160.1
Aug-97 19293.2 16771.4
Sep-97 20153.6 17619.3
Oct-97 17850.6 16070.6
Nov-97 17293.7 15865.2
Dec-97 17117.3 16035.3
Jan-98 17168.6 16510.9
Feb-98 18446 17634.6
Mar-98 19510.3 18230.8
Apr-98 20017.6 18343.1
May-98 19967.5 17987.5
Jun-98 19258.7 17907.4
Jul-98 19553.3 18080.1
Aug-98 16573.4 15522.6
Sep-98 15812.7 15204
Oct-98 16695 16795.9
Nov-98 17576.5 17695.2
Dec-98 17840.2 18293.8
Jan-99 17961.5 18275.7
Feb-99 17352.6 17887.6
Mar-99 18031.1 18769.4
Apr-99 18335.8 19728.5
May-99 17686.7 18833.8
Jun-99 19055.7 19746.3
Jul-99 20099.9 20166.9
Aug-99 20475.8 20281.9
Sep-99 20850.5 20389.4
Oct-99 21834.6 21160.1
Fund
------
1 Year Total Return (9/30/98 to 9/30/99) .............................. 31.86%
3 Year Average Annual Total Return (9/30/96 to 9/30/99) ............... 6.31%
5 Year Average Annual Total Return (9/30/94 to 9/30/99) ............... 5.39%
Average Annual Total Return Since Inception
(4/05/91 to 9/30/99) ............................................... 9.03%
- ----------
* The Morgan Stanley All Country World Excluding the U.S. Index is a
market-capitalization weighted index of companies listed on stock exchanges
outside of the United States.
3
<PAGE>
Warburg Pincus Emerging Markets Fund
Annual Investment Adviser's Report -- October 31, 1999
- --------------------------------------------------------------------------------
December 9, 1999
Dear Shareholder:
For the 12 months ended October 31, 1999, Warburg Pincus Emerging Markets
Fund Advisor Class shares had a return of 40.22%, vs. a return of 44.62% for the
Morgan Stanley Emerging Markets Free Index. Harold E. Sharon joins Vincent J.
McBride as the Fund's Co-Portfolio Manager.
Manager Commentary
Most emerging markets had impressive gains for the 12 months, buoyed by a
vast improvement in investor sentiment toward the group. This reflected a global
easing of monetary policy early in the period, an apparent rebound in Japan's
long-dormant economy and a flow of encouraging news regarding emerging-market
economies. Combined, these developments helped reverse the risk-avoidance
mindset that had plagued the group since the Asia crisis erupted in late 1997.
Against this backdrop, the Fund had a substantial gain in absolute terms,
performing roughly in line with its benchmark. The Fund benefited from the
generally healthy environment for emerging markets, and from good showings from
a number of its holdings, in particular its technology stocks. One factor that
hampered the Fund, in relative terms at least, was its underweighting in Latin
America early in 1999, when these markets rose strongly.
We remained, through the period, fairly broadly diversified in terms of
sector exposure, with a bias in favor of the technology and financial areas.
With regard to the former, roughly 20% of the Fund was invested in
semiconductor, software and other technology stocks at the end of the period. In
general, we believe that emerging-market technology companies have good
longer-term prospects, given an improving global economy and the increasing
demand for outsourcing services from developed-world companies. We also had an
approximately 20% weighting in the financial segment at the end of the period.
Many emerging-market financial companies are in the midst of aggressive
restructuring programs, lowering costs and improving their capital management
and returns. These companies also stand to benefit from a more-supportive
interest-rate backdrop (while absolute interest rates within emerging markets
remain generally high, most are considerably below levels seen a year ago).
4
<PAGE>
Warburg Pincus Emerging Markets Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
With respect to the Fund's regional allocation, we raised our exposure to
Asia during the period, ending the 12 months with a modest overweighting. This
reflected our view that a large number of Asian stocks were attractively priced,
given the region's improving macroeconomic prospects and ongoing restructuring
activity here. By country, we significantly increased our weighting in South
Korea, where the economy is growing at a healthy clip, boosted by rising
exports. We also raised our position in India over the course of the period, a
move based on company-specific considerations as well as top-down ones (e.g., we
believe that India's macroeconomic backdrop could improve as a result of
political trends, given the increasing popularity of India's reform-minded
Bharatiya Janata Party, or BJP). Asian countries in which we had smaller, though
still-meaningful weightings included Singapore and Malaysia.
We lowered our exposure to Latin America, in general because we saw more
compelling stocks in Asia. That said, we believe our holdings here represent
good value, and we continued to find buying opportunities within the region.
Most specifically, we added a few economically-sensitive stocks from Brazil and
Mexico during the latter part of the period, deeming their valuations to be
attractive on both an absolute and relative (i.e., compared to valuations on
stocks of similar global companies) basis.
Elsewhere, noteworthy country allocations for the Fund continued to include
South Africa, where our focus remained on financial-services and resources
companies that we believe will benefit from a recovery in certain commodity
prices. One area in which we were underweighted at the end of the period was
Eastern Europe, reflecting our near-term concerns regarding current-account
deficits, inflation and interest rates here.
Looking ahead, our outlook on the longer-term prospects for emerging
markets remains positive. This largely reflects optimism over the global
economy. Notably, the world's economic powerhouses-Japan, Europe and the U.S.,
regions that account for the bulk of emerging markets' customers-are all
projected to grow over the next year and beyond, in welcome contrast to recent
years. Assuming those projections are accurate, numerous emerging-market
companies across a range of industries stand to continue to see significant
revenue and earnings improvements. Our optimism is also based on the group's
valuations, which, despite these markets' recent rally, range from reasonable to
very compelling. We would caution investors, however, that emerging markets can
be extremely volatile over the short term, and therefore individuals with
relatively low tolerance for risk would probably
5
<PAGE>
Warburg Pincus Emerging Markets Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
be best served by a more conservative investment. But for those with a
longer-term investment horizon, and a sufficiently high threshold for risk, we
believe emerging markets remain attractive for their significant
long-term-return potential, and we will continue to strive to identify companies
with the best long-term prospects.
Harold E. Sharon Vincent J. McBride
Co-Portfolio Manager Co-Portfolio Manager
International investing entails special risk considerations, including
currency fluctuations, lower liquidity, economic and political risks, and
differences in accounting methods; these risks are generally heightened for
emerging-market investments. These are detailed in the Fund's Prospectus, which
should be read carefully before investing.
6
<PAGE>
Warburg Pincus Emerging Markets Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Advisor Class shares of Warburg Pincus
Emerging Markets Fund since Inception as of October 31, 1999
The graph below illustrates a hypothetical investment of $10,000 in Advisor
Class shares of Warburg Pincus Emerging Markets Fund (the "Fund") from December
30, 1994 (inception) to October 31, 1999, compared to the Morgan Stanley
Emerging Markets Free Index for the same time period.
[GRAPHIC]
In the printed version of the document, a line graph appears
which depicts the following plot points:
Fund MSCI
------- -------
10000 10000
Jan-95 9860 8936.2
Feb-95 9890 8707.08
Mar-95 10410 8762.45
Apr-95 10570 9155.54
May-95 11230 9642.52
Jun-95 10928 9671.06
Jul-95 11770.2 9888.08
Aug-95 11639.8 9655.31
Sep-95 11840.3 9609.64
Oct-95 11329 9241.98
Nov-95 11248.8 9077.2
Dec-95 11702.7 9479.77
Jan-96 12422.1 10153.5
Feb-96 12553.8 9992.26
Mar-96 12867.9 10070
Apr-96 13931.8 10472.6
May-96 13577.2 10426.1
Jun-96 13415.1 10491.2
Jul-96 12452.5 9774.3
Aug-96 12523.4 10024.4
Sep-96 12746.3 10111.2
Oct-96 12371.4 9841.77
Nov-96 12746.3 10007.1
Dec-96 12842.5 10052.1
Jan-97 13653.4 10737.7
Feb-97 13977.7 11197.7
Mar-97 13663.5 10903.5
Apr-97 13987.9 10923
May-97 14727.8 11235.5
Jun-97 15224.5 11836.9
Jul-97 15366.4 12013.5
Aug-97 13572.3 10484.9
Sep-97 13764.9 10775.5
Oct-97 11018 9007.49
Nov-97 10409.8 8678.71
Dec-97 10251.6 8887.87
Jan-98 9463.22 8190.88
Feb-98 10795.6 9045.77
Mar-98 11073.1 9438.17
Apr-98 10944.6 9335.39
May-98 9410.2 8056.16
Jun-98 8813.59 7211.07
Jul-98 8706.95 7439.66
Aug-98 6127.95 5288.85
Sep-98 6330.17 5624.38
Oct-98 6863.17 6216.68
Nov-98 7129.47 6733.72
Dec-98 7054.61 6636.09
Jan-99 6617.93 6529.05
Feb-99 6490.2 6592.57
Mar-99 7150.9 7461.28
Apr-99 8099.11 8384.24
May-99 8365.57 8335.61
Jun-99 9420.47 9281.7
Jul-99 9378.08 9029.24
Aug-99 9453.1 9111.4
Sep-99 9218.67 8803.44
Oct-99 9623.37 8990.95
Fund
------
1 Year Total Return (9/30/98 to 9/30/99) .............................. 45.62%
3 Year Average Annual Total Return (9/30/96 to 9/30/99) ............... -10.24%
Average Annual Total Return Since Inception
(12/30/94 to 9/30/99) .............................................. -1.70%
- ----------
* The Morgan Stanley Emerging Markets Free Index is a market-capitalization
weighted index of emerging-market countries determined by Morgan Stanley.
The index includes only those countries open to non-local investors.
7
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Annual Investment Adviser's Report -- October 31, 1999
- --------------------------------------------------------------------------------
December 9, 1999
Dear Shareholder:
For the 12 months ended October 31, 1999, Warburg Pincus Global
Post-Venture Capital Fund Advisor Class shares had a return of 83.06%, vs.
returns of 23.89% for the Lipper Global Funds Index, 23.50% for the Morgan
Stanley World Index and 29.28% for the Russell 2000 Growth Index.
The period was a positive one for the vast majority of the world's stock
markets, supported by improving financial and economic conditions within
emerging markets, an apparent revival in Japan's economy and
better-than-expected growth in the U.S. These factors encouraged investors to
embrace risk in pursuit of potentially significant longer-term rewards, a
sentiment that particularly benefited the aggressive-growth stocks targeted by
the Fund.
Against this backdrop, the Fund had solid performance, both in absolute
terms and compared to its benchmarks. Driving the Fund's return were good
showings from a number of its holdings, both foreign and domestic, with
particularly noteworthy performances from its technology, communications, media
and consumer-related stocks.
We continued, through the period, to increase the Fund's exposure to
foreign companies (as of October 31, roughly 75% of the Fund was invested in
non-U.S. companies, up from approximately 35% at the start of the period). This
reflected the more-hospitable environment for foreign investing as well as
venture capital's expanding presence overseas. We added a number of stocks from
Europe, where venture capitalists are aggressively targeting opportunities
created by a region-wide deregulation trend (one that is revitalizing
traditional industries while spawning entire new industries). We also added
several Asian stocks. Venture-capital activity in Asia, while relatively modest,
is on the rise, and continues to play an important role in the wave of
restructurings sweeping the region, often with very positive results.
With respect to sector allocation, we remained fairly heavily biased toward
the technology area-broadly defined to include computer-related firms,
electronics manufacturers and telecommunications companies-which remains by far
the largest recipient of venture financing globally (at period end, technology
companies accounted for roughly a third of the Fund). The remainder of the Fund
was broadly diversified, with weightings in such diverse sectors as the media,
business-services, real-estate, financial, health-care, energy and
consumer-services areas.
8
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
Looking ahead, we expect to see an ever-lengthening list of investment
opportunities from which to choose, given continued strong flows into
venture-capital pools both at home and abroad. In terms of regional emphasis, we
plan to maintain a healthy weighting in the U.S., while seeking opportunities to
further increase our foreign exposure (many foreign venture-backed companies
receive little analyst coverage, and hence can be significantly undervalued).
Overall, our focus will remain on highly innovative companies with proactive,
motivated managements, and we will continue to strive to identify stocks with
the best long-term-growth potential.
Elizabeth B. Dater Harold E. Sharon J. H. Cullum Clark
Co-Portfolio Manager Co-Portfolio Manager Co-Portfolio Manager
International investing entails special risk considerations, including
currency fluctuations, lower liquidity, economic and political risks, and
differences in accounting methods. There are also special risk considerations
associated with post-venture-capital investments. These are detailed in the
Fund's Prospectus, which should be read carefully before investing.
9
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Annual Investment Adviser's Report -- October 31, 1999 (cont'd)
- --------------------------------------------------------------------------------
Growth of $10,000 Invested in Advisor Class shares of Warburg Pincus
Global Post-Venture Capital Fund since Inception as of October 31, 1999
The graph below illustrates a hypothetical investment of $10,000 in Advisor
Class shares of Warburg Pincus Global Post-Venture Capital Fund (the "Fund")
from September 30, 1996 (inception) to October 31, 1999, compared to the Lipper
Global Funds Index ("Lipper")*, the Morgan Stanley World Index ("MSCI")** and
the Russell 2000 Growth Index ("Russell")*** for the same period.
[GRAPHIC]
In the printed version of the document, a line appears
which depicts the following plot points:
Fund Russell Lipper MSCI
------- ------- ------- -------
10000 10000 10000 10000
Oct-96 9850 9568.7 10003 10055.9
Nov-96 10009.6 9834.81 10476.1 10603.2
Dec-96 10049.6 10026.6 10492.9 10419.2
Jan-97 10330 10277 10726.9 10529.6
Feb-97 9740.15 9656.52 10792.3 10635.5
Mar-97 9119.7 8975.16 10662.8 10410.1
Apr-97 9159.83 8871.4 10798.2 10735.2
May-97 10089.5 10204.9 11458 11382.4
Jun-97 10360 10550.9 11948.4 11935
Jul-97 11120.4 11091.5 12545.8 12469.7
Aug-97 10940.2 11424.4 11850.8 11620.4
Sep-97 11720.3 12336.1 12589.1 12236.6
Oct-97 11110.8 11595.2 11797.2 11577.3
Nov-97 10970.8 11319.2 11822 11767
Dec-97 10885.2 11326 11962.7 11895.1
Jan-98 10646.8 11175 12096.9 12211.4
Feb-98 11840.4 12161.5 12913.5 13021.8
Mar-98 12650.2 12671.7 13563.3 13555.9
Apr-98 13366.2 12749.4 13760.8 13672.5
May-98 12847.6 11823.2 13643.1 13485.4
Jun-98 13044.2 11944.1 13685.5 13789.7
Jul-98 12411.6 10946.7 13691.4 13751.6
Aug-98 9806.38 8419.73 11697.3 11901.7
Sep-98 10221.2 9273.4 11704 12096.1
Oct-98 10853.9 9757.1 12478.8 13173.4
Nov-98 11787.3 10514 13166.2 13940.6
Dec-98 12947.2 11465.5 13713.1 14605.3
Jan-99 13507.8 11981.2 13999.7 14908.6
Feb-99 14058.9 10885.2 13595.8 14495.6
Mar-99 15149.9 11272.9 14062.4 15082.7
Apr-99 16064.9 12268.4 14700.4 15660.7
May-99 15804.7 12287.8 14268.1 15071.8
Jun-99 18308.2 12935.1 14987.1 15758.4
Jul-99 19056.9 12534.1 15027.5 15694.2
Aug-99 19150.3 12065.3 15011.9 15648.7
Sep-99 19223.1 12298.2 14881.3 15479.7
Oct-99 19836.3 12613.2 15460.2 16267.6
Fund
------
1 Year Total Return (9/30/98 to 9/30/99) .............................. 88.39%
3 Year Average Annual Total Return (9/30/96 to 9/30/99) ............... 24.41%
Average Annual Total Return Since Inception
(9/30/96 to 9/30/99) ............................................... 24.38%
- ----------
* The Lipper Global Funds Index is an equal-weighted performance index,
adjusted for capital-gains distributions and income dividends, of the
largest qualifying funds in this investment objective, and is compiled by
Lipper Inc.
** The Morgan Stanley World Index is a market-weighted average of the
performance of securities listed on the stock exchanges of all developed
countries.
*** The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. It includes reinvestment of
dividends, and is compiled by Frank Russell Company.
10
<PAGE>
Warburg Pincus International Equity Fund
Statement of Net Assets--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- -----------
COMMON STOCKS (86.7%)
Canada (4.1%)
Anderson Exploration, Ltd.+ 439,800 $ 5,666,062
Berkley Petroleum Corp.+ 294,300 2,601,061
Canadian Hunter Exploration, Ltd. 244,300 3,986,131
Canadian Natural Resources, Ltd.+ 418,000 9,207,424
OCI Communications, Inc.+# 380,700 3,105,854
Precision Drilling Corp.+ 97,700 2,288,235
Research in Motion, Ltd.+ 178,100 5,527,408
Rogers Communications, Inc. Class B+ 810,000 16,410,361
-----------
48,792,536
-----------
Denmark (1.2%)
International Service System AS Class B+ 80,000 4,287,348
Tele Danmark AS Class B 157,000 9,570,114
-----------
13,857,462
-----------
France (8.0%)
Alstom SA+ 340,400 10,303,985
Coflexip SA 18,800 1,481,980
Coflexip SA ADR 39,100 1,549,337
Elf Aquitaine SA 11 1,619
Lagardere Groupe SCA 274,400 11,103,707
Publicis SA 15,025 3,793,243
Rhone Poulenc, Ltd. Class A 295,863 16,543,426
Societe Generale d'Entreprises SA 447,300 20,779,942
Suez Lyonnaise des Eaux SA 64,800 10,454,579
Total Cie Franc des Petroles Class B 145,407 19,638,649
-----------
95,650,467
-----------
Germany (6.4%)
Fresenius Medical Care AG 142,600 9,914,539
Hannover Rueckversicherungs AG 94,600 7,109,194
Mannesmann AG 84,000 12,951,872
Metallgesellschaft AG 700,000 14,589,618
Siemens AG 255,500 22,826,167
Viag AG 528,400 9,796,807
-----------
77,188,197
-----------
Hong Kong (0.6%)
SmarTone Telecommunications Holdings, Ltd. 2,176,000 7,673,885
-----------
Hungary (1.3%)
Magyar Tavkozlesi 916,600 5,331,588
OTP Bank 229,100 10,401,863
-----------
15,733,451
-----------
India (0.0%)
Bharat Petroleum Corp., Ltd. 200 1,337
Hindalco Industries, Ltd. 203 3,383
Mahanagar Telephone Nigam, Ltd. 300 1,185
Reliance Industries, Ltd. 11,974 64,451
State Bank of India, Ltd. 6,250 35,722
-----------
106,078
-----------
See Accompanying Notes to Financial Statements.
11
<PAGE>
Warburg Pincus International Equity Fund
Statement of Net Assets (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
--------- ------------
COMMON STOCKS (cont'd)
Ireland (0.7%)
Bank of Ireland 1,084,200 $ 8,455,445
------------
Israel (1.1%)
ECI Telecommunications Limited Designs 141,600 4,124,100
Orbotech, Ltd. 124,100 9,695,312
------------
13,819,412
------------
Italy (2.7%)
Banca Nazionale del Lavoro SpA+ 4,000,000 13,537,517
Mediolanum SpA 1,586,800 12,892,135
Tecnost SpA 3,203,680 6,162,024
------------
32,591,676
------------
Japan (32.6%)
Advantest Corp. 100,900 15,179,468
Fuji Bank, Ltd. 652,000 8,934,070
Fujitsu, Ltd. 467,000 14,051,162
Hikari Tsushin, Inc. 11,100 8,923,817
Hoya Corp. 202,000 14,517,049
Industrial Bank of Japan, Ltd. 1,099,000 14,848,498
KDD Corp. 100,000 12,552,696
Matsushita Electric Industrial Group 144,000 24,174,768
Nikko Securities Co., Ltd. 1,300,000 12,207,737
Nippon Telegraph & Telephone Corp. 300 4,599,461
NTT Mobile Communications Network, Inc. 2,250 59,721,129
Orix Corp. 189,400 25,408,190
Rohm Co., Ltd. 105,000 23,543,492
Sakura Bank, Ltd. 1,113,000 9,555,841
Sanwa Bank, Ltd. 783,000 11,636,953
Shohkoh Fund & Co., Ltd. 52,560 32,132,296
Softbank Corp. 59,800 24,811,602
Sony Corp. 162,500 25,318,597
Sumitomo Bank, Ltd. 437,000 7,026,501
Sumitomo Rubber Industries, Ltd. 1,046,000 6,204,232
Tokyo Electron, Ltd. 120,000 9,957,833
Tokyo Seimitsu Co., Ltd. 90,000 10,961,091
Toshiba Corp. 2,478,000 15,576,535
------------
391,843,018
------------
Netherlands (2.9%)
Corus Group PLC 5,984,351 11,510,424
Getronics NV 113,200 5,639,595
IHC Caland NV 150,000 6,503,369
Libertel NV 275,000 5,202,695
Vendex KBB NV 218,011 6,358,645
------------
35,214,728
------------
See Accompanying Notes to Financial Statements.
12
<PAGE>
Warburg Pincus International Equity Fund
Statement of Net Assets (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
--------- -----------
COMMON STOCKS (cont'd)
Norway (0.2%)
Tandberg Television ASA+ 232,000 $ 2,750,427
-----------
Portugal (1.9%)
Portugal Telecom SA 507,220 22,604,004
-----------
Singapore (4.3%)
Chartered Semiconductor Manufacturing ADR+ 101,300 3,361,894
DBS Land, Ltd. 6,745,000 12,485,936
Neptune Orient Lines, Ltd.+ 7,147,000 10,352,119
Overseas Union Bank, Ltd. 5,826,288 25,212,324
-----------
51,412,273
-----------
South Korea (2.5%)
Housing & Commercial Bank, Korea+ 244,000 6,448,353
Hyundai Industrial Development & Construction 553,080 5,786,705
Korea Electric Power Corp. 218,000 6,379,157
Shinhan Bank 1,126,400 11,926,034
-----------
30,540,249
-----------
Spain (2.1%)
Amadeus Global Travel Distribution SA+ 483,800 2,893,352
Banco Santander Central Hispano SA 510,600 5,296,892
Inmobiliaria Colonial SA+ 60,000 943,422
Repsol SA 781,700 16,103,465
-----------
25,237,131
-----------
Sweden (2.3%)
SKF AB Series B 670,100 13,583,845
Telefonaktiebolaget LM Ericsson ADR 326,700 13,966,425
-----------
27,550,270
-----------
Switzerland (1.9%)
Roche Holding AG 1,141 13,703,322
United Bank of Switzerland SA 31,300 9,110,183
-----------
22,813,505
-----------
Taiwan (2.5%)
Taiwan Semiconductor Manufacturing Co. 6,842,850 30,398,275
-----------
Turkey (0.6%)
Yapi ve Kredi Bankasi AS 470,000,000 6,843,189
-----------
United Kingdom (6.8%)
AstraZeneca Group PLC 432,400 19,526,132
British Aerospace PLC 1,784,100 10,407,368
British Telecommunications PLC 580,157 10,505,095
Corus Group PLC 4,168,000 7,933,555
Corus Group PLC ADR 89,000 1,718,812
See Accompanying Notes to Financial Statements.
13
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus International Equity Fund
Statement of Net Assets (cont'd)--October 31, 1999
- ---------------------------------------------------------------------------------------------------
Number
of
Shares Value
--------- --------------
<S> <C> <C>
COMMON STOCKS (cont'd)
United Kingdom (cont'd)
<S> <C> <C>
Marks & Spencer PLC 1,360,000 $ 6,248,547
Prudential Corp. PLC 505,000 7,909,507
Reed International PLC 1,174,500 6,841,692
Smithkline Beecham PLC 853,800 10,983,843
--------------
82,074,551
--------------
TOTAL COMMON STOCK (Cost $792,018,202) 1,043,150,229
--------------
SINGAPORE EQUITY SWAP BASKETS (1.2%)
Singapore Equity Swap Basket 2
Equity swap with Indosuez W.I. Carr, Ltd.
dated 01/08/99 to expire on 01/08/01
Development Bank of Singapore, Ltd.+ 167,844 1,242,852
Oversea-Chinese Banking Corp., Ltd. 24,750 183,150
United Overseas Bank, Ltd. 72,427 536,268
Overseas Union Bank, Ltd. 203,440 1,506,477
--------------
3,468,747
Singapore Equity Swap Basket 3
Equity swap with Indosuez W.I. Carr, Ltd.
dated 01/11/99 to expire on 01/08/01
Development Bank of Singapore, Ltd.+ 437,663 2,856,677
Oversea-Chinese Banking Corp., Ltd. 15,000 97,683
United Overseas Bank, Ltd. 214,290 1,399,034
Overseas Union Bank, Ltd. 995,912 6,500,242
--------------
10,853,636
--------------
TOTAL EQUITY SWAPS (Cost $8,358,829) 14,322,383
==============
SHORT TERM INVESTMENTS (10.7%)
Institutional Money Market Trust 73,166,288 73,166,288
RBB Money Market Portfolio 55,692,647 55,692,647
--------------
TOTAL SHORT TERM INVESTMENTS (Cost $128,858,935) 128,858,935
--------------
TOTAL INVESTMENTS AT VALUE (98.6%) (Cost $929,235,966*) 1,186,331,547
--------------
OTHER ASSETS IN EXCESS OF LIABILITIES (1.4%) 16,188,975
--------------
NET ASSETS (100.0%) (applicable to 44,365,547
Common Class shares and 10,769,314 Advisor Class shares) $1,202,520,522
==============
NET ASSET VALUE, offering and redemption price
per Common Class share ($970,530,299 (divided by) 44,365,547) $ 21.88
==============
NET ASSET VALUE, offering and redemption price
per Advisor Class share ($231,990,223 (divided by) 10,769,314) $ 21.54
==============
</TABLE>
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- ----------
+ Non-income producing security.
# Priced at cost.
* Cost for federal income tax purposes is $929,405,551.
See Accompanying Notes to Financial Statements.
14
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus Emerging Markets Fund
Schedule of Investments--October 31, 1999
- ---------------------------------------------------------------------------------------
Number
of
Shares Value
--------- ----------
<S> <C> <C>
COMMON STOCKS (89.2%)
Australia (2.0%)
Novus Petroleum, Ltd. 718,875 $ 655,077
Oil Search, Ltd. 574,100 669,486
----------
1,324,563
----------
Brazil (3.0%)
Companhia Brasileira de Distribuicao Grupo Pao de Acucar 13,050 285,469
Tele Norte Leste Participacoes SA ADR 91,900 1,550,813
Ultrapar Participacoes SA+ 16,456 183,073
----------
2,019,355
----------
Croatia (1.9%)
Pliva DD GDR 115,400 1,253,359
----------
Czech Republic (0.9%)
Ceska Sporitelna AS+ 112,700 624,871
----------
Egypt (1.6%)
Commercial International Bank, Ltd. 26 310
Egyptian Company for Mobile Services 40,400 1,038,854
----------
1,039,164
----------
Greece (1.6%)
Hellenic Telecommunication Organization SA ADR 101,600 1,079,500
----------
Hong Kong (2.5%)
Global Tech Holdings, Ltd. 642,000 375,969
Guoco Group, Ltd. 338,000 904,869
SmarTone Telecommunications Holdings, Ltd. 106,340 375,019
----------
1,655,857
----------
Hungary (2.7%)
OTP Bank 40,260 1,827,931
----------
India (10.6%)
Aptech, Ltd. 64,500 1,308,135
Grasim Industries, Ltd. 500 4,866
Icici, Ltd.+ 95,790 1,053,690
Mahanagar Telephone Nigam, Ltd. 266,950 1,054,510
Pentafour Software & Exports, Ltd. 91,600 1,272,984
Reliance Industries, Ltd. 659 3,547
Satyam Computers 56,800 1,665,120
Tata Tea 55,600 698,363
----------
7,061,215
----------
Israel (1.9%)
Blue Square Israel Co., Ltd. ADR 34,800 454,575
ECI Telecommunications Limited Designs+ 3,100 90,288
Orbotech, Ltd. 9,400 734,375
----------
1,279,238
----------
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
Warburg Pincus Emerging Markets Fund
Schedule of Investments (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- ----------
COMMON STOCKS (cont'd)
Malaysia (2.3%)
Commerce Asset Holdings BHD 274,000 $ 605,686
Tenaga Nasional BHD 157,000 361,514
Unisem (M) BHD 146,100 595,936
----------
1,563,136
----------
Mexico (12.5%)
Alfa SA de CV Series A 373,800 1,431,943
Carso Global Telecom+ 118,400 786,668
Fomento Economico Mexicano SA de CV ADR+ 41,500 1,361,719
Grupo Financiero Banorte SA de CV+ 316,400 394,165
Grupo Industrial Bimbo SA de CV 507,100 928,650
Grupo Industrial Saltillo SA de CV 255,500 664,445
Grupo Iusacell SA ADR+ 118,400 1,406,000
Telefonos de Mexico SA ADR 16,600 1,419,300
----------
8,392,890
----------
Peru (2.0%)
Credicorp, Ltd. ADR 125,600 1,334,500
----------
Philippines (1.1%)
ABS-CBN Broadcasting Corp.+ 696,300 763,068
----------
Poland (0.6%)
Bank Slaski SA 7,307 398,249
----------
Singapore (6.4%)
Chartered Semiconductor Manufacturing ADR+ 66,100 2,193,694
Neptune Orient Lines, Ltd.+ 701,000 1,015,368
Overseas Union Bank, Ltd. 253,524 1,097,084
----------
4,306,146
----------
South Africa (9.6%)
Amalgamated Banks of South Africa, Ltd. 156,930 639,719
Billiton PLC 248,800 1,085,077
C.G. Smith, Ltd. 413,600 1,339,396
Sanlam, Ltd.+ 1,316,200 1,510,032
Sappi, Ltd. 90,500 749,621
South African Breweries, Ltd. 127,400 1,115,391
----------
6,439,236
----------
See Accompanying Notes to Financial Statements.
16
<PAGE>
Warburg Pincus Emerging Markets Fund
Schedule of Investments (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- ----------
COMMON STOCKS (cont'd)
South Korea (13.1%)
Daelim Industrial Co., Ltd. 40,564 $ 510,643
Haansoft, Inc.+ 48,100 352,880
Hankuk Electric Glass Co., Ltd.+ 34,220 1,626,127
Hite Brewery Co., Ltd.+ 25,816 903,937
Hyundai Electronics Industries Co. 30,000 498,958
Korea Data System 9,443 168,470
Korea Mobile Telecommunications Corp., Ltd. 6,600 762,067
Samsung Electronics Co. 7,563 1,261,025
Shinhan Bank 150,600 1,594,514
Trigem Computer, Inc. 14,920 1,110,759
----------
8,789,380
----------
Taiwan (8.6%)
Far Eastern Textile, Ltd. 503,970 689,108
Phoenixtec Power Co., Ltd.+ 598,343 1,215,914
Taishin International Bank+ 1,588,080 905,615
Taiwan Semiconductor Manufacturing Co.+ 312,310 1,387,388
United Microelectronics Co., Ltd.+ 601,350 1,563,054
----------
5,761,079
----------
Thailand (1.6%)
Hana Microelectronics Public Co., Ltd.+ 296,900 1,046,071
----------
Turkey (2.7%)
Akbank TAS 47,445,000 740,141
Yapi ve Kredi Bankasi AS 73,196,804 1,065,744
----------
1,805,885
----------
TOTAL COMMON STOCKS (Cost $49,479,908) 59,764,693
----------
PREFERRED STOCK (4.5%)
Brazil (4.0%)
Companhia Vale do Rio Doce PN 40,200 798,835
Banco Itau SA 8,160,000 468,187
Petroleo Brasileiro SA 8,751,400 1,392,036
----------
2,659,058
----------
South Korea (0.4%)
Daelim Industrial Co., Ltd. 46,530 283,175
----------
Taiwan (0.1%)
Taishin International Bank+ 306,735 96,640
----------
TOTAL PREFERRED STOCK (Cost $2,838,899) 3,038,873
----------
See Accompanying Notes to Financial Statements.
17
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus Emerging Markets Fund
Schedule of Investments (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------------
Number
of
Shares Value
--------- -----------
<S> <C> <C>
SINGAPORE EQUITY SWAP BASKETS (0.9%)
Singapore Equity Swap Basket 2
Equity swap with Indosuez W.I. Carr, Ltd.
dated 01/08/99 to expire on 01/08/01
Development Bank of Singapore, Ltd.+ 6,938 $ 51,374
Oversea-Chinese Banking Corp., Ltd. 1,022 7,569
United Overseas Bank, Ltd. 2,993 22,161
Overseas Union Bank, Ltd. 8,406 62,240
-----------
143,344
Singapore Equity Swap Basket 3
Equity swap with Indosuez W.I. Carr, Ltd.
dated 01/11/99 to expire on 01/08/01
Development Bank of Singapore, Ltd.+ 18,090 118,094
Oversea-Chinese Banking Corp., Ltd. 620 4,035
United Overseas Bank, Ltd. 8,850 57,747
Overseas Union Bank, Ltd. 41,131 268,469
-----------
448,345
-----------
TOTAL EQUITY SWAPS (Cost $345,354) 591,689
===========
SHORT TERM INVESTMENTS (5.4%)
Institutional Money Market Trust 404,410 404,410
RBB Money Market Portfolio 3,177,584 3,177,584
-----------
TOTAL SHORT TERM INVESTMENTS (Cost $3,581,994) 3,581,994
-----------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $56,246,155*) $66,977,249
===========
</TABLE>
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
GDR = Global Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $56,960,085.
See Accompanying Notes to Financial Statements.
18
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Statement of Net Assets--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- ----------
COMMON STOCK (18.3%)
Business Services (1.4%)
Lason Holdings, Inc.+ 550 $ 20,436
On Assignment, Inc.+ 850 24,437
QRS Corp.+ 1,050 58,406
----------
103,279
----------
Communications & Media (5.2%)
America Online, Inc.+ 380 49,281
CMG Information Services, Inc. 1,300 142,269
Outdoor Systems, Inc.+ 1,662 70,427
Westwood One, Inc.+ 1,400 64,575
Yahoo!, Inc.+ 319 57,121
----------
383,673
----------
Computers (3.4%)
Citrix Systems, Inc. + 800 51,300
Concord Communications, Inc.+ 880 45,705
Network Appliance, Inc.+ 1,115 82,510
VeriSign, Inc. + 600 74,100
----------
253,615
----------
Electronics (2.5%)
JDS Uniphase Corp.+ 500 83,437
Maxim Integrated Products, Inc.+ 470 37,101
Vitesse Semiconductor Corp.+ 1,400 64,225
----------
184,763
----------
Food, Beverages & Tobacco (0.2%)
Ben & Jerry's Homemade, Inc. Class A+ 700 11,812
----------
Healthcare (0.1%)
Alterra Healthcare Corp.+ 700 4,112
----------
Leisure & Entertainment (0.6%)
Premier Parks, Inc.+ 1,435 41,525
----------
Retail (0.6%)
Amazon.com, Inc.+ 600 42,375
----------
Telecommunications & Equipment (4.3%)
Amdocs, Ltd.+ 1,260 35,044
CIENA Corp.+ 1,435 50,584
Cisco Systems, Inc.+ 1,230 91,020
MCI WorldCom, Inc.+ 480 41,190
Pinnacle Holdings, Inc.+ 1,680 40,320
TTI Team Telecom International, Ltd.+ 5,500 58,094
----------
316,252
----------
TOTAL COMMON STOCK (Cost $708,509) 1,341,406
----------
See Accompanying Notes to Financial Statements.
19
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Statement of Net Assets (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- --------
FOREIGN COMMON STOCK (75.3%)
Australia (0.4%)
ANZoil NL+ 250,400 $ 19,148
Cue Energy Resources NL 157,400 8,325
--------
27,473
--------
Canada (10.7%)
Assante Corp.+ 12,100 53,471
Chapters Online, Inc.+ 6,450 62,487
Corus Entertainment, Inc.+ 600 9,382
Envoy Communications Group, Inc.+ 5,200 18,737
OCI Communications, Inc.+# 2,400 19,580
Research in Motion, Ltd.+ 6,170 191,489
Richland Petroleum Corp.+ 24,300 70,212
Rogers Communications, Inc. Class B 3,900 79,013
Shaw Communications, Inc. Class B 1,950 58,500
Versus Technologies, Inc.+ 12,675 66,783
Westjet Airlines, Ltd.+ 15,300 150,826
--------
780,480
--------
Denmark (4.3%)
Damgaard AS+ 4,800 254,526
Navision Software AS+ 1,600 63,349
--------
317,875
--------
France (1.5%)
Atos SA+ 440 56,328
Laurent-Perrier Group+ 1,350 51,081
--------
107,409
--------
Germany (4.9%)
GFK AG+ 4,465 125,771
GFT Technologies AG+ 960 57,513
Marbert AG 3,341 56,220
Personal & Informatik AG+ 2,150 18,643
Telegate AG+ 1,000 34,159
Trintech Group+ 4,000 70,420
--------
362,726
--------
Greece (0.4%)
Antenna TV SA ADR+ 3,400 30,600
--------
Ireland (1.6%)
Esat Telecom Group PLC ADR+ 2,630 117,693
--------
Israel (3.4%)
Audiocodes, Ltd. 1,850 111,925
Backweb Technologies, Ltd. 3,400 71,612
Gilat Satellite Networks, Ltd. 800 41,700
Orbotech, Ltd. 260 20,312
--------
245,549
--------
See Accompanying Notes to Financial Statements.
20
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Statement of Net Assets (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- --------
FOREIGN COMMON STOCK (cont'd)
Italy (2.5%)
Locazione Attrezzature SpA 77,200 $ 73,838
SEAT Pagine Gialle SpA 16,000 22,787
Unione Immobiliare SpA 168,200 86,449
--------
183,074
--------
Japan (3.3%)
Densei-Lambda K.K. 2,100 100,613
Shohkoh Fund & Co., Ltd. 100 61,135
Trans Cosmos, Inc. 600 76,179
--------
237,927
--------
Mexico (2.1%)
Nuevo Grupo Iusacell SA ADR Series V+ 12,800 152,000
--------
Netherlands (5.1%)
Libertel NV 4,400 83,243
Meta4 NV+ 1,050 10,815
Ordina NV+ 3,010 73,081
Pinkroccade NV+ 880 22,198
Qiagen NV+ 1,350 72,056
Seagull Holding NV+ 4,550 47,584
Versatel Telecom International NV+ 5,400 66,973
--------
375,950
--------
Norway (1.7%)
Tandberg Television ASA+ 10,400 123,295
--------
Portugal (1.0%)
SIVA-SGPS SA 5,700 76,625
--------
Singapore (2.0%)
Datapulse Technology, Ltd. 68,000 43,321
Pacific Internet, Ltd. 1,040 32,500
Venture Manufacturing, Ltd. 8,000 71,161
--------
146,982
--------
South Korea (1.5%)
Hankuk Electric Glass Co., Ltd.+ 550 26,136
Trigem Computer, Inc. 1,157 86,136
--------
112,272
--------
Spain (5.6%)
Dinamia Capital Privado Sociedad de Capital Riesgo SA 12,000 114,144
Inmoliliaria Colonial SA+ 5,000 78,619
Prima Inmobiliaria SA+ 14,200 125,668
Transportes Azkar SA 10,700 93,569
--------
412,000
--------
See Accompanying Notes to Financial Statements.
21
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Statement of Net Assets (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------
Number
of
Shares Value
------- ----------
FOREIGN COMMON STOCK (cont'd)
Sweden (4.0%)
Biora AB ADR+ 8,200 $ 71,750
Framtidsfabriken AB+ 2,550 102,455
Icon Medialab International AB+ 960 50,924
Kungsleden AB+ 8,400 64,747
----------
289,876
----------
Switzerland (5.6%)
Fantastic Corp.+ 1,200 81,730
Gretag Imaging Group+ 345 43,698
SAIA-Burgess Electronics AG 110 31,764
TAG Heuer International SA 1,020 143,253
4M Technologies Holding SA+ 500 108,286
----------
408,731
----------
United Kingdom (13.7%)
3i Group PLC 2,058 25,631
Diagonal PLC 23,100 96,657
Electronics Boutique PLC 108,600 172,856
EMAP PLC 2,970 38,500
Holmes Place PLC 15,333 81,392
Itnet PLC 4,700 43,767
PowderJect Pharmaceuticals PLC+ 9,900 128,741
Saatchi & Saatchi PLC ADR 2,100 40,162
Sage Group PLC 2,200 112,667
Schroders PLC 3,030 60,508
The Exchange Holdings PLC+ 35,100 99,640
The Future Network PLC+ 8,770 102,534
----------
1,003,055
----------
TOTAL FOREIGN COMMON STOCK (Cost $4,821,488) 5,511,592
----------
See Accompanying Notes to Financial Statements.
22
<PAGE>
<TABLE>
<CAPTION>
Warburg Pincus Global Post-Venture Capital Fund
Statement of Net Assets (cont'd)--October 31, 1999
- --------------------------------------------------------------------------------------
Number
of
Shares Value
------- ----------
<S> <C> <C>
SHORT TERM INVESTMENT (4.7%)
RBB Money Market Portfolio 340,383 $ 340,383
(Cost $340,383) ----------
TOTAL INVESTMENTS AT VALUE (98.3%) (Cost $5,870,380*) 7,193,381
----------
OTHER ASSETS IN EXCESS OF LIABILITIES (1.7%) 123,086
----------
NET ASSETS (100.0%) (applicable to 377,329
Common Class shares and 2,808 Advisor Class shares) $7,316,467
==========
NET ASSET VALUE, offering and redemption price
per Common Class share ($7,262,857 (divided by) 377,329) $ 19.25
==========
NET ASSET VALUE, offering and redemption price
per Advisor Class share ($53,610 (divided by) 2,808) $ 19.09
==========
</TABLE>
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- --------------------------------------------------------------------------------
+ Non-income producing security.
# Priced at cost.
* Cost for federal income tax purposes is $5,953,297.
See Accompanying Notes to Financial Statements.
23
<PAGE>
Warburg Pincus Emerging Markets Fund
Statement of Assets and Liabilities
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
Assets
<S> <C>
Investments at value (Cost $56,246,155) $66,977,249
Receivable for investment sold unsettled 2,707,707
Receivable for fund shares sold 1,463,013
Foreign currency (Cost $432,273) 432,466
Dividends and interest receivable 168,276
Prepaid organizational cost 7,386
Prepaid insurance 837
-----------
Total Assets 71,756,934
-----------
Liabilities
Payable for investments purchased unsettled 3,315,725
Payable for fund shares redeemed 461,852
Accrued expenses payable 99,454
Deferred tax on unrealized capital gains 46,365
Payable for Taiwan stock dividend tax 2,343
Other liabilities 6,468
-----------
Total Liabilities 3,932,207
-----------
Net Assets, applicable to 7,312,618 Common Class shares and 4,654 Advisor Class
shares outstanding $67,824,727
===========
Net Asset Value, offering and redemption price per Common Class share ($67,782,721 / 7,312,618) $ 9.27
===========
Net Asset Value, offering and redemption price per Advisor Class share ($42,006 / 4,654) $ 9.03
===========
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
This page intentionally left blank
<PAGE>
Warburg Pincus International Equity Funds
Statements of Operations
For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International
Equity
-------------
Investment Income:
<S> <C>
Dividends $ 26,856,347
Interest 1,229,038
Foreign taxes withheld (2,561,286)
-------------
Total investment income 25,524,099
-------------
Expenses:
Investment advisory 12,603,946
Administrative services 2,281,661
Custodian/Sub-custodian 792,232
Transfer agent 1,273,857
Directors 17,814
Interest 513,144
Legal 82,955
Offering/Organizational costs 0
Printing 248,604
Registration 129,648
Shareholder servicing/distribution 1,277,567
Audit 64,150
Insurance expenses 32,830
Miscellaneous 27,362
-------------
19,345,770
Less: fees waived, expenses reimbursed and
transfer agent offsets (86,767)
-------------
Total expenses 19,259,003
-------------
Net investment income (loss) 6,265,096
-------------
Net Realized and Unrealized Gain from Investments
and Foreign Currency Related Items:
Net realized gain from security and other related transactions
(net of capital gains taxes of $722,400 for Emerging Markets) 171,063,104
Net realized loss from foreign currency related items (3,429,906)
Net realized forward foreign currency contract loss (26,136,336)
Net change in unrealized appreciation (depreciation) from investments and
foreign currency related items (net of estimated deferred capital gains
taxes of $46,366
for Emerging Markets) 205,467,968
-------------
Net realized and unrealized gain from investments
and foreign currency related items 346,964,830
-------------
Net increase in net assets resulting from operations $ 353,229,926
=============
</TABLE>
See Accompanying Notes to Financial Statements.
26
<PAGE>
<TABLE>
<CAPTION>
Global
Emerging Post-Venture
Markets Capital
------------- -------------
Investment Income:
<S> <C> <C>
Dividends $ 1,251,245 $ 48,585
Interest 320,462 10,146
Foreign taxes withheld (121,126) (2,839)
------------- -------------
Total investment income 1,450,581 55,892
------------- -------------
Expenses:
Investment advisory 824,963 67,434
Administrative services 152,684 21,341
Custodian/Sub-custodian 95,438 20,687
Transfer agent 141,779 9,327
Directors 12,760 12,700
Interest 20,052 165
Legal 8,476 8,815
Offering/Organizational costs 47,001 1,186
Printing 31,379 6,241
Registration 56,450 26,968
Shareholder servicing/distribution 165,050 13,526
Audit 13,605 7,745
Insurance expenses 2,633 580
Miscellaneous 1,364 4,034
------------- -------------
1,573,634 200,749
Less: fees waived, expenses reimbursed and
transfer agent offsets (484,626) (111,694)
------------- -------------
Total expenses 1,089,008 89,055
------------- -------------
Net investment income (loss) 361,573 (33,163)
------------- -------------
Net Realized and Unrealized Gain from Investments
and Foreign Currency Related Items:
Net realized gain from security and other related transactions
(net of capital gains taxes of $722,400 for Emerging Markets) 3,365,256 1,895,467
Net realized loss from foreign currency related items (759,014) (14,579)
Net realized forward foreign currency contract loss 0 0
Net change in unrealized appreciation (depreciation) from investments and
foreign currency related items (net of estimated deferred capital gains
taxes of $46,366
for Emerging Markets) 20,089,488 1,068,574
------------- -------------
Net realized and unrealized gain from investments
and foreign currency related items 22,695,730 2,949,462
------------- -------------
Net increase in net assets resulting from operations $ 23,057,303 $ 2,916,299
============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
27
<PAGE>
Warburg Pincus International Equity Funds
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
International Equity
-----------------------------------
For the For the
Year Ended Year Ended
October 31, 1999 October 31, 1998
---------------- ----------------
From Operations:
<S> <C> <C>
Net investment income (loss) $ 6,265,096 $ 12,302,990
Net realized gain (loss) from security and other
related transactions 171,063,104 (213,451,199)
Net realized gain (loss) from foreign currency related items (29,566,242) 51,944,476
Net change in unrealized appreciation (depreciation) from
investments and foreign currency related items (net of
estimated deferred capital gains taxes of $46,366
for Emerging Markets) 205,467,968 47,688,281
--------------- ---------------
Net increase (decrease) in net assets resulting from
operations 353,229,926 (101,515,452)
--------------- ---------------
From Dividends and Distributions:
Dividends from net investment income
Common Class shares 0 (13,983,166)
Advisor Class shares 0 (776,129)
Distributions from realized gains
Common Class shares 0 (276,226,122)
Advisor Class shares 0 (61,851,043)
--------------- ---------------
Net decrease in net assets from dividends and distributions 0 (352,836,460)
--------------- ---------------
From Capital Share Transactions:
Proceeds from sale of shares 1,825,106,334 945,589,502
Reinvested dividends and distributions 0 335,103,766
Net asset value of shares redeemed (2,559,755,180) (2,054,917,142)
--------------- ---------------
Net increase (decrease) in net assets from capital
share transactions (734,648,846) (774,223,874)
--------------- ---------------
Net increase (decrease) in net assets (381,418,920) (1,228,575,786)
Net Assets:
Beginning of year 1,583,939,442 2,812,515,228
--------------- ---------------
End of year $ 1,202,520,522 $ 1,583,939,442
--------------- ---------------
--------------- ---------------
Undistributed net investment income: $ 5,901,701 $ 0
=============== ===============
</TABLE>
See Accompanying Notes to Financial Statements.
28
<PAGE>
<TABLE>
<CAPTION>
Emerging Markets Global Post-Venture Capital
--------------------------------- ---------------------------------
For the For the For the For the
Year Ended Year Ended Year Ended Year Ended
October 31, 1999 October 31, 1998 October 31, 1999 October 31, 1998
---------------- ---------------- ---------------- ----------------
From Operations:
<S> <C> <C> <C> <C>
Net investment income (loss) $ 361,573 $ 990,189 $ (33,163) $ (35,282)
Net realized gain (loss) from security and other
related transactions 3,365,256 (62,658,535) 1,895,467 16,393
Net realized gain (loss) from foreign currency related items (759,014) (420,100) (14,579) (1,517)
Net change in unrealized appreciation (depreciation) from
investments and foreign currency related items (net of
estimated deferred capital gains taxes of $46,366
for Emerging Markets) 20,089,488 21,064,753 1,068,574 (224,948)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets resulting from
operations 23,057,303 (41,023,693) 2,916,299 (245,354)
--------------- --------------- --------------- ---------------
From Dividends and Distributions:
Dividends from net investment income
Common Class shares 0 (427,377) 0 (80,461)
Advisor Class shares 0 (880) 0 (30)
Distributions from realized gains
Common Class shares 0 (5,226,322) (11,449) (29,917)
Advisor Class shares 0 (10,768) (4) (12)
--------------- --------------- --------------- ---------------
Net decrease in net assets from dividends and distributions 0 (5,665,347) (11,453) (110,420)
--------------- --------------- --------------- ---------------
From Capital Share Transactions:
Proceeds from sale of shares 164,611,366 120,358,207 4,476,418 1,626,747
Reinvested dividends and distributions 0 5,383,994 11,073 108,155
Net asset value of shares redeemed (180,058,486) (174,910,995) (3,738,167) (915,348)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets from capital
share transactions (15,447,120) (49,168,794) 749,324 819,554
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets 7,610,183 (95,857,834) 3,654,170 463,780
Net Assets:
Beginning of year 60,214,544 156,072,378 3,662,297 3,198,517
--------------- --------------- --------------- ---------------
End of year $ 67,824,727 $ 60,214,544 $ 7,316,467 $ 3,662,297
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Undistributed net investment income: $ 0 $ 0 $ 0 $ 0
=============== =============== =============== ===============
</TABLE>
See Accompanying Notes to Financial Statements.
29
<PAGE>
Warburg Pincus International Equity Fund
Financial Highlights
(For an Advisor Class share of the Fund Outstanding Throughout Each Year)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended October 31,
------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
YEAR ENDED:
Per-share data
Net asset value, beginning of year $ 16.47 $ 20.54 $ 20.50 $ 19.16 $ 20.38
-------- -------- -------- -------- --------
Investment activities:
Net investment income 0.03 0.04(a) 0.04 0.18 0.03
Net gains (losses) on investments
and foreign currency related items
(both realized and unrealized) 5.04 (1.36) 0.78 1.68 (0.67)
-------- -------- -------- -------- --------
Total from investment activities 5.07 (1.32) 0.82 1.86 (0.64)
-------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income 0.00 (0.03) (0.04) (0.52) (0.05)
Distributions from realized capital gains 0.00 (2.72) (0.74) 0.00 (0.53)
-------- -------- -------- -------- --------
Total dividends and distributions 0.00 (2.75) (0.78) (0.52) (0.58)
-------- -------- -------- -------- --------
Net asset value, end of year $ 21.54 $ 16.47 $ 20.54 $ 20.50 $ 19.16
======== ======== ======== ======== ========
Total return 30.78% (6.49)% 4.04% 9.89% (3.04)%
Ratios and supplemental data:
Net assets, end of year (000s omitted) $231,990 $300,266 $500,473 $500,465 $317,736
Ratio of expenses to average net assets 1.94%@ 1.76%@ 1.76%@ 1.81%@ 1.89%
Ratio of net income to average net assets .14% .21% .15% .18% .20%
Portfolio turnover rate 116.35% 95.44% 61.80% 32.49% 32.24%
</TABLE>
- -----------
(a) Per share information is calculated using the average shares outstanding
method.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
the Advisor Class shares' expenses by .01%, .00%, .01% and .01% for the
years ending October 31, 1999, 1998, 1997 and 1996, respectively. The
Advisor Class shares' operating expense ratios after reflecting these
arrangements were 1.93%, 1.76%, 1.75% and 1.80% for the years ended October
31, 1999, 1998, 1997 and 1996, respectively.
See Accompanying Notes to Financial Statements.
30
<PAGE>
Warburg Pincus Emerging Markets Fund
Financial Highlights
(For an Advisor Class share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended October 31,
-----------------------------------------------------
1999 1998 1997 1996 1995**
------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value, beginning of period $ 6.44 $ 10.87 $ 12.21 $ 11.30 $10.00
------- ------- ------- ------- ------
Investment activities:
Net investment income (loss) 0.04 0.21 0.00 (0.08) 0.14
Net gains (losses) on investments and
foreign currency related items (both
realized and unrealized) 2.55 (4.16) (1.33) 1.11 1.19
------- ------- ------- ------- ------
Total from investment activities 2.59 (3.95) (1.33) 1.03 1.33
------- ------- ------- ------- ------
Less dividends and distributions:
Dividends from net investment income 0.00 (0.04) 0.00 (0.05) (0.03)
Distributions from realized capital gains 0.00 (0.44) (0.01) (0.07) 0.00
------- ------- ------- ------- ------
Total dividends and distributions 0.00 (0.48) (0.01) (0.12) (0.03)
------- ------- ------- ------- ------
Net asset value, end of period $ 9.03 $ 6.44 $ 10.87 $ 12.21 $11.30
======= ======= ======= ======= ======
Total return 40.22% (37.71)% (10.94)% 9.20% 13.29%+
Ratios/Supplemental Data:
Net assets, end of period (000s omitted) $ 42 $ 26 $ 266 $ 149 $ 1
Ratio of expenses to average net assets 1.91%@ 1.90%@ 1.90%@ 1.90%@ 1.22%*
Ratio of net income (loss) to average net assets .81% 1.01% (.09)% (.57)% 1.76%*
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .80% .94% .58% .65% 16.36%*
Portfolio turnover rate 196.07% 125.59% 92.48% 61.84% 57.76%+
</TABLE>
- -------------
** For the period December 30, 1994 (commencement of operations) through
October 31, 1995.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expense. These arrangements resulted in a reduction to
the Advisor Class shares' expenses by .01%, .00%, .00% and .00% for the
years ended October 31, 1999, 1998, 1997 and 1996, respectively. The
Advisor Class shares' operating expense ratios after reflecting these
arrangements were 1.90%, 1.90%, 1.90% and 1.90% for the years ended October
31, 1999, 1998, 1997 and 1996, respectively.
+ Non annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
31
<PAGE>
Warburg Pincus Global Post-Venture Capital Fund
Financial Highlights
(For an Advisor Class share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended October 31,
----------------------------------------------------------
1999 1998 1997 1996**
------- ------- ------- ------
<S> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value, beginning of period $ 10.46 $ 11.11 $ 9.85 $10.00
------- ------- ------- ------
Investment activities:
Net investment loss (0.12)(a) (0.15) (0.15) 0.00
Net gains (losses) on investments and
foreign currency related items (both
realized and unrealized) 8.78 (0.11) 1.41 (0.15)
------- ------- ------- ------
Total from investment activities 8.66 (0.26) 1.26 (0.15)
------- ------- ------- ------
Less dividends and distributions:
Dividends from net investment income 0.00 (0.28) 0.00 0.00
Distributions from realized capital gains (0.03) (0.11) 0.00 0.00
------- ------- ------- ------
Total dividends and distributions (0.03) (0.39) 0.00 0.00
------- ------- ------- ------
Net asset value, end of period $ 19.09 $ 10.46 $ 11.11 $ 9.85
======= ======= ======= ======
Total return 83.06% (2.31)% 12.79% (1.50)%+
Ratios and supplemental data
Net assets, end of period (000s omitted) $ 54 $ 1 $ 1 $ 6
Ratio of expenses to average net assets 1.91%@ 1.90%@ 1.90%@ 1.90%@*
Ratio of net loss to average net assets (1.24)% (1.26)% (1.15)% (.78)%*
Decrease reflected in above operating expense ratios
due to waivers/reimbursements 1.27% 45.95% 11.16% 22.23%*
Portfolio turnover rate 239.88% 186.67% 207.25% 5.85%+
</TABLE>
- -------------
** For the period September 30, 1996 (commencement of operations) through
October 31, 1996.
(a) Per share information is calculated using the average shares outstanding
method.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
the Advisor Class shares' expenses by .01%, .00%, .00% and .00% for the
years ended October 31, 1999, 1998 and 1997 and for the period ended
October 31, 1996, respectively. The Advisor Class shares' operating expense
ratios after reflecting these arrangements were 1.90%, 1.90%, 1.90% and
1.90% for the years ended October 31, 1999, 1998, and 1997 and for the
period ended October 31, 1996, respectively.
+ Non annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
32
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements
October 31, 1999
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
The Warburg Pincus International Equity Fund ("International Equity") and
the Warburg Pincus Global Post-Venture Capital Fund ("Global Post-Venture
Capital") are registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as diversified, open-end management investment companies, and
the Warburg Pincus Emerging Markets Fund ("Emerging Markets") which is
registered under the 1940 Act as a non-diversified, open-end management
investment company (each, a "Fund" and collectively, the "Funds").
Investment objectives for each Fund are as follows: International Equity
seeks long-term capital appreciation; Emerging Markets seeks growth of capital;
and Global Post-Venture Capital seeks long-term growth of capital.
Each Fund offers two classes of shares, one class being referred to as the
Common Class and one class being referred to as the Advisor Class. Common 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 Emerging Markets
and Global Post-Venture Capital 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. Common Class shares of
International Equity are not subject to shareholder servicing or distribution
fees. 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
relevant Fund's Advisor Class shares. Advisor Class shares are currently bearing
expenses of .50% of average daily net assets.
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 the last reported
sales price. If no sales are reported, investments are generally valued at the
mean between the last reported bid and asked prices. 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
33
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
value. Debt obligations that will mature in 60 days or less are valued on the
basis of amortized cost, which approximates market value, unless the Board
determines that using this method would not reflect an investment's value.
Global Post-Venture Capital initially values its investments in
private-equity portfolios at cost. After that, the Fund values these investments
according to reports from the private-equity portfolios that Abbott Capital
Management, LLC ("Abbott"), the Fund's sub-investment adviser, generally
receives on a quarterly basis. The Fund's net asset value typically will not
reflect interim changes in the values of its private-equity-portfolio
investments.
When a Fund writes or purchases a call or a put option, an amount equal to
the premium received or paid by the Fund is recorded as a liability or asset,
the value of which is marked-to-market daily to reflect the current market value
of the option. When the option expires, the Fund realizes a gain or loss equal
to the amount of the premium received or paid. When the Fund exercises an option
or enters into a closing transaction by purchasing or selling an offsetting
option, it realizes a gain or loss without regard to any unrealized gain or loss
on the underlying security. The potential loss associated with purchasing an
option is limited to the premium paid, and the premium would partially offset
any gains achieved from its use.
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 are 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.
The Funds may invest in securities of foreign countries and governments
which involve certain risks in addition to those inherent in domestic
investments. Such risks generally include, among others, currency risks
(fluctuations in currency exchange rates), information risk (key information may
34
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the imposition of capital or currency controls or punitive taxes). Other
risks of investing in foreign securities include liquidity and valuation risks.
Each Fund's investments in securities of issuers located in less developed
countries considered to be "emerging markets" involve risks in addition to those
generally applicable to foreign securities. Focusing on emerging (less
developed) markets involves higher levels of risk, including increased currency,
information, liquidity, market, political and valuation risks. Deficiencies in
regulatory oversight, market infrastructure, shareholder protections and company
laws could expose the Fund to operational and other risks as well. Some
countries may have restrictions that could limit the Funds' access to attractive
opportunities. Additionally, emerging markets often face serious economic
problems (such as high external debt, inflation and unemployment) that could
subject the Fund to increased volatility or substantial declines in value.
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. Effective November 1, 1998,
class specific expenses no longer include transfer agent fees; accordingly these
fees will be allocated proportionately based upon the relative net asset value
of outstanding shares. The cost of investments sold is determined by use of the
specific identification method for both financial reporting and income tax
purposes.
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 for 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 foreign currency contracts primarily for hedging
purposes. Forward foreign 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, 1999, none of the Funds
had open forward foreign currency contracts.
35
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
Dividends from net investment income and distributions of net realized
capital gains, if any, are declared and paid at least annually for all Funds.
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.
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.
The Funds may be subject to taxes imposed by countries in which they
invest, with respect to their investments in issuers existing or operating in
such countries. Such taxes are generally based on income earned or repatriated
and capital gains realized on the sale of such investments. The Funds accrue
such taxes when the related income or capital gains are earned.
Costs incurred in connection with organization and offering of shares have
been deferred and are being amortized over a period of five years and one year,
respectively, 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, the Funds' investment adviser ("CSAM LLC") (collectively the
Warburg Funds), may transfer uninvested cash balances to a pooled cash account,
which is invested 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
other party to the agreement, retention of the collateral may be subject to
legal proceedings. At October 31, 1999, 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.
36
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
1. Significant Accounting Policies -- (cont'd)
The Funds have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances is used to offset a portion of the transfer
agent expense.
For the year ended October 31, 1999, the Funds received credits or
reimbursements under this arrangement as follows:
Fund Amount
---- -------
International Equity $86,767
Emerging Markets 4,039
Global Post-Venture Capital 397
2. Investment Adviser, Co-Administrators and Distributor
On July 6, 1999, CSAM LLC became each Fund's investment adviser as a result
of the previously announced acquisition of Warburg Pincus Asset Management, Inc.
("Warburg Pincus") by Credit Suisse Group ("Credit Suisse"). Warburg Pincus was
combined with CSAM LLC, which is an indirect wholly-owned U.S. subsidiary of
Credit Suisse. For its investment advisory services, CSAM LLC receives the
following fees based on each Fund's average daily net assets:
Fund Annual Rate
------ ---------------------------------
International Equity 1.00% of average daily net assets
Emerging Markets 1.25% of average daily net assets
Global Post-Venture Capital 1.25% of average daily net assets
For the year ended October 31, 1999, investment advisory fees, waivers, and
reimbursements were as follows:
<TABLE>
<CAPTION>
Gross Net Expense
Fund Advisory Fee Waiver Advisory Fee Reimbursements
---- ------------ ----------- ------------ --------------
<S> <C> <C> <C> <C>
International Equity $12,603,946 $ 0 $12,603,946 $ 0
Emerging Markets 824,963 (447,804) 377,159 (16,276)
Global Post-Venture Capital 67,434 (60,242) 7,192 (44,581)
</TABLE>
Abbott Capital Management, LLC ("Abbott") serves as sub-investment adviser
for Global Post-Venture Capital's assets invested in U.S. or foreign private
limited partnerships or other investment funds ("Private Fund Investments").
Pursuant to the sub-advisory agreement between Abbott and CSAM LLC, Abbott is
entitled to a quarterly fee from CSAM LLC at the annual rate of 1.00% of the
value of the Fund's Private Fund Investments as
37
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
2. Investment Adviser, Co-Administrators and Distributor -- (cont'd)
of the end of each calendar quarter. No compensation is paid by Global
Post-Venture Capital to Abbott for its sub-investment advisory services.
Counsellors Funds Service, Inc. ("CFSI"), a wholly-owned subsidiary of CSAM
LLC served as co-administrator of each Fund until November 1, 1999. On November
1, 1999, Credit Suisse Asset Management Securities, Inc. ("CSAMSI") replaced
CFSI as co-administrator to each Fund. PFPC Inc. ("PFPC"), an indirect,
wholly-owned subsidiary of PNC Bank Corp. ("PNC"), also serves as each Fund's
co-administrator. For its administrative services, CSAMSI currently receives a
fee calculated at an annual rate of .10% of each Fund's average daily net
assets.
For the year ended October 31, 1999, administrative services fees earned by
CFSI were as follows:
Fund Co-Administration Fee
---- ---------------------
International Equity $1,260,395
Emerging Markets 65,997
Global Post-Venture Capital 5,395
For administrative services, PFPC currently receives a fee calculated at an
annual rate of .12% on each Fund's first $250 million in average daily net
assets, .10% on the next $250 million in average daily net assets, .08% on the
next $250 million in average daily net assets and .05% of the average daily net
assets over $750 million, exclusive of out-of-pocket expenses.
For the year ended October 31, 1999, administrative service fees earned and
voluntarily waived by PFPC (including out of pocket expenses) were as follows:
<TABLE>
<CAPTION>
Gross Net
Fund Co-Administration Fee Waiver Co-Administration Fee
---- --------------------- ------ ---------------------
<S> <C> <C> <C>
International Equity $1,021,266 $ 0 $1,021,266
Emerging Markets 86,687 (16,507) 70,180
Global Post-Venture Capital 15,946 (6,474) 9,472
</TABLE>
CSAMSI also serves as each Fund's distributor. Provident Distributors, Inc.
will become each Fund's distributor effective January 3, 2000. No compensation
is paid by International Equity to CSAMSI for distribution services. For its
shareholder servicing and selling services, CSAMSI receives a fee at an annual
rate of .25% of the average daily net assets of each Fund's Common Class shares
(other than International Equity) pursuant to a shareholder
38
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
2. Investment Adviser, Co-Administrators and Distributor -- (cont'd)
servicing and distribution plan adopted by each Fund pursuant to Rule 12b-1
under the 1940 Act. CSAMSI receives a fee at an annual rate of .50%, of the
average daily net assets of International Equity, Emerging Markets, and Global
Post-Venture Capital's Advisor Class shares pursuant to a distribution plan
adopted by each Fund pursuant to Rule 12b-1 under the 1940 Act which CSAMSI may
use to compensate service organizations for shareholder servicing and
distribution services.
For the year ended October 31, 1999, shareholder servicing and distribution
fees paid to CSAMSI were as follows:
Shareholder Servicing/
Fund Distribution Fee
---- ----------------------
International Equity
Advisor Class shares $1,277,567
==========
Emerging Markets
Common Class shares $ 164,936
Advisor Class shares 114
----------
$ 165,050
==========
Global Post-Venture Capital
Common Class shares $ 13,445
Advisor Class shares 81
----------
$ 13,526
==========
3. Line of Credit
The Funds, together with other Funds advised by CSAM LLC, have established
a $250 million committed, unsecured, line of credit facility ("Credit Facility")
with Deutsche Bank AG as administrative agent, State Street Bank and Trust
Company as operations agent, Bank of Nova Scotia as syndication agent as well as
certain other lenders, for temporary or emergency purposes primarily relating to
unanticipated Fund share redemptions. Under the terms of the Credit Facility,
the Funds with access to the Credit Facility pay an aggregate commitment fee at
a rate of .075% per annum on the average daily balance of the Credit Facility
that is undisbursed and uncanceled during the preceding quarter allocated among
the participating Funds in such manner as is determined by the governing Boards
of the various Funds. In addition, the participating Funds will pay interest on
borrowing at the Federal funds rate plus .50%. At October 31, 1999, there were
no loans outstanding for any of the Funds. During the year
39
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
3. Line of Credit -- (cont'd)
ended October 31, 1999, the Funds had the following borrowings under the Credit
Facility:
Average Maximum
Average Daily Interest Daily Loan
Fund Loan Balance Rate% Outstanding
---- ------------- -------- -----------
International Equity $7,712,644 5.57% $65,819,000
Emerging Markets 335,732 5.56% 7,169,000
Global Post-Venture Capital 9,893 5.75% 626,000
4. Investments in Securities
For the year ended October 31, 1999, purchases and sales of investment
securities (excluding short-term investments) were as follows:
Fund Purchases Sales
---- -------------- --------------
International Equity $1,440,175,680 $2,214,755,469
Emerging Markets 121,460,932 138,386,748
Global Post-Venture Capital 13,077,839 12,677,370
At October 31, 1999, 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:
Unrealized Unrealized Net Unrealized
Fund Appreciation Depreciation Appreciation
---- ------------ ------------ --------------
International Equity $289,367,909 $(32,441,913) $256,925,996
Emerging Markets 12,649,769 (2,632,605) 10,017,164
Global Post-Venture Capital 1,592,156 (352,072) 1,240,084
5. Equity Swap Transactions
International Equity and Emerging Markets each entered into equity swap
agreements dated January 8, 1999 and January 11, 1999. Each Fund paid a notional
amount plus a 1.25% upfront fee for a basket of Singapore local common stocks.
The initial notional amount represented the then-current market value of the
common stock of the underlying securities on that date. The notional amount is
marked-to-market daily. The swap agreements expire on January 8, 2001, but are
terminable by either party on one business day's notice. The final notional
amount at termination will be the average execution price of unwinding the
counterparty's hedge for the swap (the sale of the basket of common stocks) at
termination. Each Fund will receive the final notional amount, less a 1.25% fee,
five business days after the termination date.
40
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
5. Equity Swap Transactions -- (cont'd)
During the term of the equity swap agreements, each Fund is entitled to
dividends on the stock less a dividend withholding tax of 26% and a 1%
processing fee (not to exceed $1,000). Each Fund recognizes the net dividend
amount received as dividend income on the ex-dividend date and will receive each
dividend five business days after the payment date. In addition, a Fund may
instruct the counterparty regarding participation in any rights offerings of the
common stock, in exchange for the subscription price plus a .75% fee to the
counterparty.
6. 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 two billion shares of each
Fund are classified as Advisor Class shares. Transactions in classes of each
Fund were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
Common Class shares Advisor Class shares
---------------------------------- ----------------------------------
For the Year Ended October 31,
------------------------------------------------------------------------
1999 1998 1999 1998
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Shares sold 93,224,012 49,208,088 2,460,276 2,638,046
Shares issued to shareholders on
reinvestment of dividends and distributions 0 16,336,304 0 3,778,779
Shares redeemed (126,018,150) (99,781,019) (9,926,602) (12,548,585)
--------------- --------------- --------------- ---------------
Net decrease in shares outstanding (32,794,138) (34,236,627) (7,466,326) (6,131,760)
=============== =============== =============== ===============
Proceeds from sale of shares $ 1,778,780,264 $ 896,359,095 $ 46,326,070 $ 49,230,407
Reinvested dividends and distributions 0 272,489,395 0 62,614,371
Net asset value of shares redeemed (2,378,091,713) (1,826,723,786) (181,663,467) (228,193,356)
--------------- --------------- --------------- ---------------
Net decrease from capital share transactions $ (599,311,449) $ (657,875,296) $ (135,337,397) $ (116,348,578)
=============== =============== =============== ===============
</TABLE>
41
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
6. Capital Share Transactions -- (cont'd)
<TABLE>
<CAPTION>
EMERGING MARKETS
COMMON CLASS SHARES ADVISOR CLASS SHARES
------------------------------ -------------------------------
For the Year Ended October 31,
-----------------------------------------------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold 20,639,374 13,544,543 3,005 235,380
Shares issued to shareholders on reinvestment
of dividends and distributions 0 582,196 0 1,113
Shares redeemed (22,454,708) (19,392,450) (2,367) (256,959)
------------- ------------- ------------- -------------
Net increase (decrease) in shares outstanding (1,815,334) (5,265,711) 638 (20,466)
============= ============= ============= =============
Proceeds from sale of shares $ 164,584,361 $ 118,390,331 $ 27,005 $ 1,967,876
Reinvested dividends and distributions 0 5,373,673 0 10,321
Net asset value of shares redeemed (180,042,232) (172,692,012) (16,254) (2,218,983)
------------- ------------- ------------- -------------
Net increase (decrease) from capital share
transactions $ (15,457,871) $ (48,928,008) $ 10,751 $ (240,786)
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
GLOBAL POST-VENTURE CAPITAL
Common Class shares Advisor Class shares
-------------------------- --------------------------
For the Year Ended October 31,
--------------------------------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Shares sold 251,394 131,789 2,700 0
Shares issued to shareholders on
reinvestment of dividends and distributions 971 10,620 0 4
Shares redeemed (222,874) (81,397) (4) 0
----------- ----------- ----------- -----------
Net increase in shares outstanding 29,491 61,012 2,696 4
=========== =========== =========== ===========
Proceeds from sale of shares $ 4,427,359 $ 1,626,747 $ 49,059 $ 0
Reinvested dividends and distributions 11,069 108,115 4 40
Net asset value of shares redeemed (3,738,096) (915,348) (71) 0
----------- ----------- ----------- -----------
Net increase from capital share transactions $ 700,332 $ 819,514 $ 48,992 $ 40
=========== =========== =========== ===========
</TABLE>
7. Proposed Acquisition
On October 23, 1999, the Board of Directors reviewed and unanimously
approved two proposals for the Warburg, Pincus Global Post-Venture Capital Fund,
Inc. and the Warburg, Pincus Emerging Markets Fund, Inc. (each the "Acquiring
Fund") to acquire the Warburg, Pincus Post-Venture Capital Fund, Inc. and the
Warburg, Pincus Emerging Markets II Fund, Inc. (each the "Acquired Fund"),
respectively. Under the terms of the proposal, the Acquiring Fund would acquire
all or substantially all of the assets and liabilities of the Acquired Fund.
42
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
7. Proposed Acquisition -- (cont'd)
Upon completion of the acquisition, each shareholder of the Acquired Fund
would become a shareholder of the corresponding Acquiring Fund and receive
shares of the same Class of the Acquired Fund with a value equal to the value of
the shareholder's investment in the Fund. Each Acquired Fund will be liquidated
upon consummation of the acquisition. Shareholders of record as of November 16,
1999 will be entitled to vote on this proposal. Proxy materials describing the
proposed acquisition were mailed to shareholders of the respective Acquired Fund
in anticipation of a special meeting of shareholders, which is scheduled for
January 27, 2000. Completion of the acquisition is expected to occur January 28,
2000.
8. Liabilities
At October 31, 1999, the Funds had the following affiliated and investment
related liabilities:
<TABLE>
<CAPTION>
Global
International Emerging Post-Venture
Equity Markets Capital
------------- ----------- ------------
<S> <C> <C> <C>
Payable for investments purchased unsettled $ 5,131,854 $ 3,315,725 $ 19,580
Investment advisory fee payable 950,424 0 3,377
Administrative services fee payable 174,583 13,439 4,418
Shareholder servicing/distribution fee payable 386,021 14,559 1,749
Payable for Fund shares redeemed 9,805,952 461,852 520
----------- ----------- -----------
$16,448,834 $ 3,805,575 $ 29,644
=========== =========== ===========
</TABLE>
43
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
9. Net Assets
At October 31, 1999, capital contributions, undistributed net investment
income, accumulated net realized gain (loss) from security transactions and
current period dividends and distributions have been adjusted for current period
permanent book/tax differences which arose principally from differing book/tax
treatments of foreign currency, equity swap transactions and foreign taxes on
capital gains. International Equity, Emerging Markets, and Global Post-Venture
Capital reclassified $3,429,911, $774,105 and $14,579, respectively, from
accumulated net realized loss on security transactions and foreign currency
related items to undistributed net investment income. Emerging Markets
reclassified $1,008,188 from accumulated net investment loss to capital
contributions. Global Post-Venture Capital reclassified $47,742 from accumulated
net investment loss to accumulated net realized gain from security transactions.
International Equity and Emerging Markets reclassified $3,066,516 and $126,744,
respectively from accumulated net realized gain from security transactions to
undistributed net investment income. Emerging Markets reclassified $722,400 from
accumulated net realized gain from security transactions to ordinary income. Net
investment income, net realized gain (loss) on investments and net assets were
not affected by these reclassifications.
Net assets at October 31, 1999, consisted of the following:
<TABLE>
<CAPTION>
Global
International Emerging Post-Venture
Equity Markets Capital
--------------- --------------- ---------------
<S> <C> <C> <C>
Capital contributed, net $ 962,104,022 $ 117,500,162 $ 4,146,427
Undistributed net investment income 5,901,701 0 0
Accumulated net realized gain (loss)
from security transactions (22,428,004) (60,317,796) 1,847,169
Net unrealized appreciation
(depreciation) from investments and
foreign currency related items 256,942,803 10,642,361 1,322,872
--------------- --------------- ---------------
Net assets $ 1,202,520,522 $ 67,824,727 $ 7,316,468
=============== =============== ===============
</TABLE>
44
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
10. Capital Loss Carryover
At October 31, 1999, capital loss carryovers available to offset possible
future capital gains of each Fund were as follows:
Capital Loss Carryover
Fund Expiring in 2006
---- ----------------------
International Equity $22,258,329
Emerging Markets 59,603,866
During the year ended October 31, 1999, International Equity and Emerging
Markets utilized $159,602,694 and $4,320,379 of capital losses, respectively.
45
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
11. Other Financial Highlights
Each Fund currently offers one other class of shares, the Common Class
shares, representing equal pro rata interests in each of the Funds. The
financial highlights for a Common Class share of each Fund are as follows:
<TABLE>
<CAPTION>
International Equity
---------------------------------------------------------------------------------
Common Class
---------------------------------------------------------------------------------
For the Year Ended October 31,
---------------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED:
Per-share data
Net asset value, beginning of year $ 16.64 $ 20.76 $ 20.69 $ 19.30 $ 20.51
-------- ---------- ---------- --------- ----------
Investment activities:
Net investment income 0.13 0.12(a) 0.04 0.22 0.12
Net gains (losses) on investments and
foreign currency related items
(both realized and unrealized) 5.11 (1.38) 0.88 1.73 (0.67)
-------- ---------- ---------- --------- ----------
Total from investment activities 5.24 (1.26) 0.92 1.95 (0.55)
-------- ---------- ---------- --------- ----------
Less dividends and distributions:
Dividends from net investment income 0.00 (0.14) (0.11) (0.56) (0.13)
Distributions from realized capital gains 0.00 (2.72) (0.74) 0.00 (0.53)
-------- ---------- ---------- --------- ----------
Total dividends and distributions 0.00 (2.86) (0.85) (0.56) (0.66)
-------- ---------- ---------- --------- ----------
Net asset value, end of year $ 21.88 $ 16.64 $ 20.76 $ 20.69 $ 19.30
======== ========== ========== ========= ==========
Total return 31.49% (6.12)% 4.54% 10.35% (2.55)%
Ratios and supplemental data
Net assets, end of year (000s omitted) $970,530 $1,283,673 $2,312,042 $2,885,453 $2,068,207
Ratio of expenses to average net assets 1.44%@ 1.36%@ 1.33%@ 1.38%@ 1.39%
Ratio of net income to average net assets .59% .65% .56% .62% .69%
Portfolio turnover rate 116.35% 95.44% 61.80% 32.49% 39.24%
</TABLE>
- -------------
(a) Per share information is calculated using the average shares outstanding
method.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
the Common Class shares' expenses by .01%, .00%, .01% and .01%, for the
years ended October 31, 1999, 1998, 1997 and 1996, respectively. The Common
Class shares' operating expense ratios after reflecting these arrangements
were 1.43%, 1.36%, 1.32% and 1.37% for the years ended October 31, 1999,
1998, 1997 and 1996, respectively.
46
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
11. Other Financial Highlights -- (cont'd)
<TABLE>
<CAPTION>
Emerging Markets
----------------------------------------------------
Common Class
----------------------------------------------------
For the Year Ended October 31,
----------------------------------------------------
1999 1998 1997 1996 1995**
------- ------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value,
beginning of period $ 6.59 $ 10.82 $ 12.19 $ 11.28 $10.00
------- ------- -------- -------- ------
Investment activities:
Net investment income 0.05 0.11 0.04 0.07 0.08
Net gains (losses) on investments and
foreign currency related items
(both realized and unrealized) 2.63 (3.86) (1.34) 0.99 1.25
------- ------- -------- -------- ------
Total from investment activities 2.68 (3.75) (1.30) 1.06 1.33
------- ------- -------- -------- ------
Less dividends and distributions:
Dividends from net investment income 0.00 (0.04) (0.03) (0.08) (0.05)
Distributions from realized capital gains 0.00 (0.44) (0.04) (0.07) 0.00
------- ------- -------- -------- ------
Total dividends and distributions 0.00 (0.48) (0.07) (0.15) (0.05)
------- ------- -------- -------- ------
Net asset value, end of period $ 9.27 $ 6.59 $ 10.82 $ 12.19 $11.28
======= ======= ======== ======== ======
Total return 40.67% (35.95)% (10.71)% 9.46% 13.33%+
Ratios and supplemental data:
Net assets, end of period (000s omitted) $67,783 $60,189 $155,806 $218,421 $6,780
Ratio of expenses to average net assets 1.66%@ 1.65%@ 1.66%@ 1.62%@ 1.00%*
Ratio of net income to average net assets .55% 1.00% .24% .31% 1.25%*
Decrease reflected in above operating expense
ratios due to waivers/reimbursements .73% .63% .46% .77% 11.08%*
Portfolio turnover rate 196.07% 125.59% 92.48% 61.84% 57.76%+
</TABLE>
- --------------
** For the period December 30, 1994 (commencement of operations) through
October 31, 1995.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
the Common Class shares' expenses by .01%, .00%, .01% and .01%, for the
years ended October 31, 1999, 1998, 1997 and 1996, respectively. The Common
Class shares' operating expense ratios after reflecting these arrangements
were 1.65%, 1.65%, 1.65% and 1.61% for the years ended October 31, 1999,
1998, 1997 and 1996, respectively.
+ Non annualized.
* Annualized.
47
<PAGE>
Warburg Pincus International Equity Funds
Notes to Financial Statements (cont'd)
October 31, 1999
- --------------------------------------------------------------------------------
11. Other Financial Highlights -- (cont'd)
<TABLE>
<CAPTION>
Global Post-Venture Capital
-------------------------------------------------
Common Class
-------------------------------------------------
For the Year Ended October 31,
-------------------------------------------------
1999 1998 1997 1996**
------- ------- ------- ------
<S> <C> <C> <C> <C>
PERIOD ENDED:
Per-share data
Net asset value, beginning of period $ 10.53 $ 11.15 $ 9.86 $10.00
------- ------- ------- ------
Investment activities:
Net investment loss (0.09) (0.02) (0.13) 0.00
Net gains (losses) on investments and foreign
currency related items (both realized
and unrealized) 8.84 (0.20) 1.42 (0.14)
------- ------- ------- ------
Total from investment activities 8.75 (0.22) 1.29 (0.14)
------- ------- ------- ------
Less dividends and distributions:
Dividends from net investment income 0.00 (0.29) 0.00 0.00
Distributions from realized capital gains (0.03) (0.11) 0.00 0.00
------- ------- ------- ------
Total dividends and distributions (0.03) (0.40) 0.00 0.00
------- ------- ------- ------
Net asset value, end of period $ 19.25 $ 10.53 $ 11.15 $ 9.86
======= ======= ======= ======
Total return 83.36% (1.91)% 13.08% (1.40)%+
Ratios and supplemental data
Net assets, end of period (000s omitted) $ 7,263 $ 3,661 $ 3,197 $3,007
Ratio of expenses to average net assets 1.66%@ 1.65%@ 1.66%@ 1.65%@*
Ratio of net loss to average net assets (.61)% (1.01)% (.96)% (.20)%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements 2.07% 3.90% 6.48% 21.71%*
Portfolio turnover rate 239.88% 186.67% 207.25% 5.85%+
</TABLE>
- -------------
** For the period September 30, 1996 (commencement of operations) through
October 31, 1996.
@ Interest earned on uninvested cash balances is used to offset portions of
the transfer agent expenses. These arrangements resulted in a reduction to
the Common Class shares' expenses by .01%, .00%, .01% and .00%, for the
years ended October 31, 1999, 1998, 1997 and 1996, respectively. The Common
Class shares' expense ratios after reflecting these arrangements were
1.65%, 1.65%, 1.65% and 1.65% for the years ended October 31, 1999, 1998,
1997 and 1996, respectively.
+ Non annualized.
* Annualized.
48
<PAGE>
Warburg Pincus Funds
Report of Independent Accountants
- --------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
Warburg, Pincus International Equity Fund, Inc.;
Warburg, Pincus Emerging Markets Fund, Inc. And
Warburg, Pincus Global Post-Venture Capital Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments of Warburg, Pincus Emerging Markets Fund, Inc. and
the statements of net assets of Warburg, Pincus International Equity Fund, Inc.,
and Warburg, Pincus Global Post-Venture Capital Fund, Inc. (all funds
collectively referred to as the "Funds") and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of each of the Funds at
October 31, 1999, and 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 the financial highlights for each of the years (or
periods) presented, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 10, 1999
49
<PAGE>
ANNUAL REPORT
October 31, 1999
WARBURG PINCUS MAJOR FOREIGN MARKETS FUND
WARBURG PINCUS INTERNATIONAL EQUITY FUND
WARBURG PINCUS INTERNATIONAL SMALL COMPANY FUND
WARBURG PINCUS EMERGING MARKETS FUND
WARBURG PINCUS GLOBAL POST-VENTURE CAPITAL FUND
Shareholder Meeting Results
A special meeting of shareholders of each Fund was held on May 21, 1999. At the
special meeting, the following persons were elected as directors of each Fund,
constituting the entire Board of Directors: Richard H. Francis, Jack W. Fritz,
Jeffrey E. Garten, James S. Pasman, Jr., William W. Priest, Steven N. Rappaport,
Arnold M. Reichman and Alexander B. Trowbridge.
In addition, shareholders of each Fund voted on the following matters:
Proposal 1: Approval of a new investment advisory agreement
between each Fund and Credit Suisse Asset
Management, LLC.
Proposal 2: Ratification of the selection of PricewaterhouseCoopers
LLP as the independent accountants for each of the
Funds for the fiscal year ending October 31, 1999.
Shareholders of the Global Post-Venture Capital Fund also voted on the following
matter:
Proposal 3: Approval of a new sub-investment advisory agreement
between the Fund, Credit Suisse Asset Management,
LLC and Abbott Capital Management, LLC.
The voting results for each Fund were as follows:
Election of Directors:
<TABLE>
<S> <C> <C>
|MAJOR FOREIGN MARKETS FOR | WITHHELD |
|Richard H. Francis 2,534,781.4610 | 14,008.2530 |
|Jack W. Fritz 2,534,442.1640 | 14,347.5500 |
|Jeffrey E. Garten 2,534,647.7190 | 14,141.9950 |
|James S. Pasman, Jr. 2,534,781.4610 | 14,008.2530 |
|William W. Priest 2,534,781.4610 | 14,008.2530 |
|Steven N. Rappaport 2,534,781.4610 | 14,008.2530 |
|Arnold M. Reichman 2,534,442.1640 | 14,347.5500 |
|Alexander B. Trowbridge 2,534,647.7190 | 14,141.9950 |
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
|INTERNATIONAL EQUITY FOR | WITHHELD |
|Richard H. Francis 44,252,251.0506 | 1,262,814.9486 |
|Jack W. Fritz 44,266,541.1066 | 1,248,524.8926 |
|Jeffrey E. Garten 44,292,472.3236 | 1,222,593.6756 |
|James S. Pasman, Jr. 44,257,282.8356 | 1,257,783.1636 |
|William W. Priest 44,267,427.9096 | 1,247,638.0896 |
|Steven N. Rappaport 44,270,116.8816 | 1,244,949.1176 |
|Arnold M. Reichman 44,292,838.9206 | 1,222,227.0786 |
|Alexander B. Trowbridge 44,256,370.9036 | 1,258,695.0956 |
|INTERNATIONAL SMALL COMPANY FOR | WITHHELD |
|Richard H. Francis 375,617.5988 | 14,205.8252 |
|Jack W. Fritz 375,617.5988 | 14,205.8252 |
|Jeffrey E. Garten 375,617.5988 | 14,205.8252 |
|James S. Pasman, Jr. 375,617.5988 | 14,205.8252 |
|William W. Priest 375,617.5988 | 14,205.8252 |
|Steven N. Rappaport 375,617.5988 | 14,205.8252 |
|Arnold M. Reichman 375,617.5988 | 14,205.8252 |
|Alexander B. Trowbridge 375,617.5988 | 14,205.8252 |
|EMERGING MARKETS FOR | WITHHELD |
|Richard H. Francis 6,077,638.1640 | 91,382.6210 |
|Jack W. Fritz 6,075,770.0260 | 93,250.7590 |
|Jeffrey E. Garten 6,050,204.3550 | 118,816.4300 |
|James S. Pasman, Jr. 6,057,252.2110 | 111,768.5740 |
|William W. Priest 6,069,593.5060 | 99,427.2790 |
|Steven N. Rappaport 6,050,204.3550 | 118,816.4300 |
|Arnold M. Reichman 6,066,659.9340 | 102,360.8510 |
|Alexander B. Trowbridge 6,078,149.3620 | 90,871.4230 |
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
|GLOBAL POST-VENTURE CAPITAL FOR | WITHHELD |
|Richard H. Francis 258,640.2500 | 6,584.5680 |
|Jack W. Fritz 286,640.2500 | 6,584.5680 |
|Jeffrey E. Garten 258,306.4640 | 6,918.3540 |
|James S. Pasman, Jr. 258,640.2500 | 6,584.5680 |
|William W. Priest 258,557.3480 | 6,667.4700 |
|Steven N. Rappaport 258,306.4640 | 6,918.3540 |
|Arnold M. Reichman 258,306.4640 | 6,918.3540 |
|Alexander B. Trowbridge 258,223.5620 | 7,001.2560 |
</TABLE>
Proposal 1:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
| MAJOR | | INTERNATIONAL | | GLOBAL |
| FOREIGN | INTERNATIONAL | SMALL | EMERGING | POST-VENTURE |
| MARKETS | EQUITY | COMPANY | MARKETS | CAPITAL |
-------------- --------------- ------------- -------------- ------------
| TOTAL | TOTAL | TOTAL | TOTAL | TOTAL |
| NUMBER | NUMBER | NUMBER | NUMBER | NUMBER |
| OF VOTES | OF VOTES | OF VOTES | OF VOTES | OF VOTES |
Approve | 2,435,625.7200 | 43,631,474.4944 | 167,404.8670 | 5,923,788.1774 | 255,949.5658 |
Disapprove | 1,221.2330 | 668,159.0348 | 0 | 146,922.6169 | 3,417.8182 |
Abstain | 111,942.7610 | 1,215,432.7700 | 851.0770 | 98,309.9907 | 5,857.4340 |
</TABLE>
Proposal 2:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
| MAJOR | | INTERNATIONAL | | GLOBAL |
| FOREIGN | INTERNATIONAL | SMALL | EMERGING | POST-VENTURE |
| MARKETS | EQUITY | COMPANY | MARKETS | CAPITAL |
-------------- --------------- ------------- -------------- ------------
| TOTAL | TOTAL | TOTAL | TOTAL | TOTAL |
| NUMBER | NUMBER | NUMBER | NUMBER | NUMBER |
| OF VOTES | OF VOTES | OF VOTES | OF VOTES | OF VOTES |
Approve | 2,535,443.2050 | 44,317,841.8269 | 372,886.5090 | 6,041,984.4736 | 263,267.4876 |
Disapprove | 537.3040 | 325,584.6807 | 3,300.5910 | 53,645.4970 | 814.8296 |
Abstain | 12,809.2050 | 871,639.4916 | 13,636.3240 | 73,390.8144 | 1,142.5008 |
</TABLE>
Proposal 3:
<TABLE>
<S> <C>
| GLOBAL POST-VENTURE CAPITAL |
---------------------------
| TOTAL NUMBER |
| OF VOTES |
|Approve 256,814.5580 |
|Disapprove 2,551.7500 |
|Abstain 5,858.5100 |
</TABLE>
<PAGE>
Warburg Pincus International Equity Funds
Shareholder Tax Information (Unaudited)
- --------------------------------------------------------------------------------
Each Fund is required by Subchapter M of the Code to advise its
shareholders within 60 days of each Fund's fiscal year end as to the U.S.
federal tax status of dividends and distributions received by the Fund's
shareholders in respect of such fiscal year. During the fiscal year ended
October 31, 1999, the following dividends and distributions per share were paid
by each of the Funds:
<TABLE>
<CAPTION>
Ordinary Long-term Foreign Source Foreign taxes
income Capital Gains Income Paid or Withheld
Fund Per share Per share Per share Per share
- ---- --------- --------- -------------- ----------------
Payment date 12/04/98 12/04/98
--------- --------
Global Post-Venture Capital
<S> <C> <C> <C> <C>
Common Class shares 0.0000 0.0345 N/A N/A
Advisor Class shares 0.0000 0.0345 N/A N/A
</TABLE>
International Equity and Emerging Markets 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 on Form 1099-DIV
mailed in January of 1999.
Because the fiscal year of the Funds is not a calendar year, another
notification will be sent with respect to calendar year 1999. 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 2000.
50
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<PAGE>
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<PAGE>
WARBURG PINCUS
ADVISOR FUNDS
CREDIT SUISSE
ASSET MANAGEMENT
SECURITIES, INC.,
DISTRIBUTOR
Credit Suisse Asset Management Securities, Inc., Distributor, 466 Lexington
Avenue, New York, NY 10017. Telephone: 800-927-2874. Warburg Pincus Advisor
Funds are advised by Credit Suisse Asset Management, LLC.
[GRAPHIC OMITTED]
ADISF-2-1099
