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Previous: NATIONAL MUNICIPAL TRUST MULTISTATE SERIES 49, 497J, 1995-07-05 |
Next: GREEN TREE FINANCIAL CORP, S-1, 1995-07-05 |
<PAGE>
[Logo]
SEMIANNUAL
REPORT
APRIL 30, 1995
[ ] WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
June 15, 1995
Dear Shareholder:
The objective of Warburg Pincus Institutional Fund -- International Equity
Portfolio (the 'Portfolio') is long-term capital appreciation and international
diversification. The Portfolio aims to tap into the strong growth potential of
today's world stock markets by investing primarily in companies whose principal
business activities and interests are outside the U.S.
For the six months ended April 30, 1995, the Portfolio fell 8.94%, vs. a
loss of 5.03% in the Lipper International Fund Index and a gain of 1.25% in the
Morgan Stanley -- Europe, Australia and Far East ('EAFE') Index. For the
trailing 12 months, the Portfolio lost 1.27%, vs. a loss of 1.31% in the Lipper
Index and a gain of 5.59% in the EAFE Index. Shareholders should note that
although the EAFE Index outperformed the Portfolio in the six- and 12-month
periods ended April 30, the Portfolio's long-term record is superior. From its
inception on September 1, 1992, through April 30, 1995, the Portfolio generated
an average annual return of 17.09%, compared to 14.15% for the EAFE Index. In
addition, relative to the Index, the Portfolio's diversification across more
countries has historically provided a lower level of volatility.
Foreign markets displayed considerable volatility over the past several
months, with European markets on balance outperforming their Pacific Rim
counterparts in both dollar and local-currency terms. One European market on
which we are particularly positive is France, which represented 8% of the
Portfolio's assets through April. The French market has been impacted by high
real interest rates, which have largely been a consequence of German monetary
policies. Recently, however, corporate earnings have begun to improve, and we
believe that our holdings will likely benefit from both continued restructuring
efforts and the potential for a further easing of interest rates across Europe.
Our largest country weighting among Far Eastern markets remains Japan,
which comprised 25% of the Portfolio through April. While we think the Japanese
market will likely remain volatile over the short term, we believe there are
many attractively priced stocks at the market's current level based on
traditional long-term measures of value (e.g., price relative to book value,
sales and cash flow). It is inevitable that Japan's government will at some
point be forced to pursue more expansionary economic policies, which should have
a direct and substantial impact on stock prices.
Another Pacific Rim market we are emphasizing is South Korea (5% of the
Portfolio), a high-growth emerging market that suffered unduly following
Mexico's peso crisis in December. Other markets we favor due to their attractive
valuations include Australia and New Zealand, which combined account for over
10% of the Portfolio.
Richard H. King
Portfolio Manager
1
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON STOCK (87.1%)
Argentina (2.5%)
Banco De Galicia & Buenos Aires SA 90,505 $ 371,516
Banco De Galicia & Buenos Aires SA ADR 16,525 266,466
Banco Frances del Rio de la Plata SA 107,200 681,538
Banco Frances del Rio de la Plata SA ADR 90,300 1,659,263
Capex SA GDR + 126,900 1,919,363
YPF SA ADR 227,000 4,596,750
------------
9,494,896
------------
Australia (4.6%)
BTR Nylex Ltd. 2,534,425 4,940,689
News Corp., Ltd. 204,028 991,379
Niugini Mining Ltd. + 283,000 895,466
Pasminco Ltd. + 1,012,000 1,089,471
Reinsurance Australia Corp., Ltd. + 1,788,600 3,122,466
United Construction Group Ltd. 300,000 139,661
Woodside Petroleum Ltd. 1,469,500 6,007,298
------------
17,186,430
------------
Austria (3.1%)
Bohler-Uddeholm 47,600 2,843,483
Maculan Holdings AG Vorzuege 9,290 389,996
V.A. Technologie AG + 77,300 8,537,141
------------
11,770,620
------------
Denmark (0.5%)
Copenhagen Airport 18,524 1,195,097
International Service System Class B 20,500 586,356
------------
1,781,453
------------
Finland (1.5%)
Metsa-Serla Class B 127,500 5,557,248
------------
</TABLE>
See Accompanying Notes to Financial Statements.
2
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
COMMON STOCK (CONT'D)
<S> <C> <C>
France (8.2%)
Bouygues 26,555 $ 3,237,953
Cetelem 8,879 1,877,920
Fives-Lille (Compagnie De) 26,740 2,558,331
Lagardere Groupe 237,000 5,321,343
Scor SA 115,296 2,581,692
Societe Nationale Elf Aquitaine SA 4,470 357,327
Societe Nationale Elf Aquitaine SA ADR 178,400 7,091,400
Total Cie Franc Des Petroles Class B 124,825 7,805,850
------------
30,831,816
------------
Hong Kong (2.2%)
Hong Kong Electric 559,000 1,715,610
HSBC Holdings PLC 255,700 2,965,571
HSBC Holdings PLC (UK) 35,000 412,379
Jardine Matheson 404,800 3,218,160
------------
8,311,720
------------
India (1.7%)
Hindalco Industries Ltd. GDR 148,000 3,922,000
Reliance Industries Ltd. GDS 153,000 2,467,125
------------
6,389,125
------------
Indonesia (0.7%)
P.T. Dynaplast Ltd. 340,800 366,616
P.T. Modern Photo Film Co. 280,000 1,173,465
P.T. Tri Polyta Indonesia ADR + 51,600 1,109,400
------------
2,649,481
------------
Israel (0.8%)
Ampal-American Israel Corp. Class A + 233,000 1,485,375
ECI Telecommunications Ltd. 85,000 1,434,375
------------
2,919,750
------------
</TABLE>
See Accompanying Notes to Financial Statements.
3
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
COMMON STOCK (CONT'D)
<S> <C> <C>
Japan (24.5%)
Canon Inc. 360,000 $ 5,957,143
Canon Inc. ADR 25,200 2,101,050
DDI Corp. 972 8,562,857
East Japan Railway Co. 1,813 9,431,917
Fujitsu Ltd. 385,000 3,937,083
Hitachi Ltd. 337,750 3,437,813
Japan Securities Finance Co., Ltd. 208,000 3,268,571
Kao Corp. 510,000 6,192,857
Kirin Beverage 35,000 545,833
Murata Mfg. Co., Ltd. 33,290 1,339,526
NEC Corp. 20,000 221,429
Nippon Communication Systems Corp. 275,300 3,834,536
Nippon Express Co., Ltd. 221,000 2,186,321
Nippon Telegraph & Telephone Corp. 863 7,633,440
Sankyo Co., Ltd. (Gunma) 19,000 1,101,548
Seikisui House Ltd. 282,000 3,726,429
Shin-Etsu Chemical Co., Ltd. 345,600 6,706,286
Sony Corp. 77,200 3,896,762
Sony Corp. ADR 36,900 1,877,288
TDK Corp. 158,000 7,222,857
Toho Co., Ltd. 22,000 3,954,762
Tsuchiya Home Co. 89,180 1,539,417
York-Benimaru Co., Ltd. 81,500 3,221,190
------------
91,896,915
------------
Korea (4.7%)
Daewoo Heavy Industries 83,394 1,028,340
Hana Bank 82,200 1,477,292
Hanil Bank 372,373 4,701,679
Korea Electric Power Corp. 72,300 2,778,471
Korea Europe Fund Ltd. 289 1,029,563
Korea Long Term Credit Bank 42,368 1,289,719
Samsung Electronics Co., Ltd. 10,328 1,792,572
Samsung Electronics Co., Ltd. GDR 18,964 933,957
Samsung Heavy Industries Co., Ltd. 82,010 2,452,877
------------
17,484,470
------------
</TABLE>
See Accompanying Notes to Financial Statements.
4
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
COMMON STOCK (CONT'D)
<S> <C> <C>
Malaysia (0.4%)
Arab-Malaysian Merchant Bank BHD 24,000 $ 237,210
Westmont BHD 322,000 1,395,633
------------
1,632,843
------------
Mexico (1.8%)
Cemex SA de CV ADR 526,062 3,287,887
Grupo Financiero Banamex Accival SA de CV Class B 30,000 50,400
Grupo Financiero Banamex Accival SA de CV Class C 586,500 977,500
Telefonos de Mexico SA de CV ADR 86,400 2,613,600
------------
6,929,387
------------
New Zealand (5.6%)
Brierley Investments Ltd. 6,263,583 4,719,134
Fletcher Challenge Ltd. 2,244,050 6,038,290
Fletcher Forestry 1,497,900 2,095,886
Lion Nathan Ltd. 2,446,700 5,332,700
Wrightson Ltd. 3,271,735 2,641,075
------------
20,827,085
------------
Norway (2.1%)
Norsk Hydro AS ADR 198,144 7,950,528
------------
Pakistan (0.5%)
Pakistan Telecommunications Corp. 345 37,713
Pakistan Telecommunications Corp. GDR + 16,000 1,672,000
------------
1,709,713
------------
Singapore (1.8%)
DBS Land Ltd. 741,500 2,043,755
Development Bank of Singapore Ltd. 176,562 1,888,296
Development Bank of Singapore Ltd. ADR 34,750 1,489,906
IPC Corp., Ltd. + 2,216,000 1,192,937
------------
6,614,894
------------
</TABLE>
See Accompanying Notes to Financial Statements.
5
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
COMMON STOCK (CONT'D)
<S> <C> <C>
South Africa (0.0%)
Anglovaal Ltd. 4,800 $ 164,443
------------
Spain (3.6%)
Banco De Santander 30,300 1,108,657
Banco De Santander ADR 220,300 7,985,875
Repsol SA ADR 133,700 4,278,400
------------
13,372,932
------------
Sweden (3.4%)
Asea AB Series B 42,000 3,536,501
Astra AB Series B 168,750 4,806,039
Celsius Industrier Series B 117,550 1,843,744
Foreningsbanken AB Series A + 1,378,000 2,388,872
------------
12,575,156
------------
Switzerland (2.0%)
BBC Brown Boveri AG 6,594 6,513,375
Danzas Holding AG 1,369 1,123,895
------------
7,637,270
------------
Taiwan (1.2%)
Baring International Taiwan Fund + 100,000 1,000,000
Evergreen Marine Corp., Ltd. + 381,000 795,031
Kwang Hua Growth Fund 346,000 153,935
Tuntex Distinct Corp. 965,945 1,110,500
Tuntex Distinct Corp. GDS + 127,312 1,464,088
------------
4,523,554
------------
Thailand (1.1%)
Industrial Finance Corp. of Thailand 1,535,832 3,288,384
Thai Military Bank Ltd. 244,050 786,295
------------
4,074,679
------------
</TABLE>
See Accompanying Notes to Financial Statements.
6
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
COMMON STOCK (CONT'D)
<S> <C> <C>
United Kingdom (8.6%)
AAF Industries PLC + 208,500 $ 117,380
British Air Authority PLC 661,020 5,039,808
BTR PLC 1,183,400 6,262,511
Govett and Co., Ltd. 606,000 2,797,535
International Cabletel Inc. 5,500 162,250
Queens Moat Houses PLC + 646,700 0
Reckitt & Colman PLC 416,500 4,294,317
Singer and Friedlander Group PLC 2,210,000 2,986,019
Takare PLC 1,182,900 3,786,362
Thorn EMI PLC 339,362 6,206,471
Trio Holdings PLC 1,648,500 437,516
------------
32,090,169
------------
Zimbabwe (0.0%)
Delta Corp., Ltd. 10,500 146,867
------------
TOTAL COMMON STOCK (Cost $311,890,037) 326,523,444
------------
PREFERRED STOCK (1.2%)
Australia (0.4%)
News Corp. 350,825 1,549,006
------------
Austria (0.3%)
Maculan Holdings AG Vorzuege 31,100 1,283,238
------------
Korea (0.3%)
Samsung Electronics Co., Ltd. 12,135 1,092,651
------------
United Kingdom (0.2%)
Queens Moat Houses PLC, 7.50% Convertible + 15,300 0
Singer & Friedlander Group PLC, 8.50% Convertible 348,947 593,555
------------
593,555
------------
TOTAL PREFERRED STOCK (Cost $5,225,258) 4,518,450
------------
STOCK RIGHTS AND WARRANTS (0.2%)
India (0.1%)
Hindalco Industries Ltd. Wts., 11/02/95 + 36,500 419,750
------------
</TABLE>
See Accompanying Notes to Financial Statements.
7
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
STOCK RIGHTS AND WARRANTS (CONT'D)
<S> <C> <C>
Israel (0.0%)
Ampal-American Israel Corp. Class A Wts., 01/31/99 + 95,000 $ 50,469
------------
Japan (0.1%)
Bandai Industries Wts., 11/04/97 + 440 220,000
------------
Switzerland (0.0%)
Danzas Holding AG Wts., 08/02/96 + 2,000 1,310
------------
Thailand (0.0%)
Thai Military Bank Rts., 05/08/95 + 48,810 97,540
------------
TOTAL STOCK RIGHTS AND WARRANTS (Cost $876,769) 789,069
------------
OPTIONS (0.4%) CONTRACTS
---------------
Japan (0.3%)
Topix Index, 03/08/96, strike price 1,251.24 + 3,647 497,597
Topix Index, 03/08/96, strike price 1,261.12 + 3,755 486,160
Topix Index, 03/08/96, strike price 1,349.00 + 1,830 139,085
------------
1,122,842
------------
Korea (0.1%)
Korea Composite Index, 09/24/95 + 1,500,000 338,550
------------
Mexico (0.0%)
Mexican Index, 09/95 + 48 1,200
Mexican Inmex, 03/29/96 + 62,434 1,249
------------
2,449
------------
TOTAL OPTIONS (Cost $1,626,261) 1,463,841
------------
CONVERTIBLE BONDS/NOTES (4.3%)
PAR
----
Argentina (0.3%)
Banco De Galicia 7.00%, 08/01/02 $ 1,574,000 1,101,800
------------
Australia (0.2%)
BTR Nylex 9.00%, 11/30/49 (C) 11,200,000 888,010
------------
India (0.1%)
Reliance Industries Ltd. 3.50%, 11/03/99 $ 500,000 505,000
------------
Japan (1.8%)
Matsushita Electric Works Ltd. 2.70%, 05/31/02 (B) 501,000,000 6,650,179
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
------ -----
<S> <C> <C>
CONVERTIBLE BONDS/NOTES (CONT'D)
New Zealand (0.2%)
Brierley Investments Ltd. 9.00%, 06/30/98 (A) 1,028,875 $ 705,967
------------
Taiwan (1.7%)
United Microelectronics Corp. 1.25%, 06/08/04 $ 1,790,000 2,814,775
Yang Ming Marine Transport Corp. 2.00%, 10/06/01 3,372,000 3,456,300
------------
6,271,075
------------
TOTAL CONVERTIBLE BONDS/NOTES (Cost $14,556,972) 16,122,031
------------
SHORT-TERM INVESTMENTS (7.2%)
Repurchase agreement with State Street Bank & Trust Co. dated 04/28/95
at 5.87% to be repurchased at $27,144,272 on 05/01/95. (Collateralized
by $27,470,000 U.S. Treasury Note 6.25%, due 08/31/96, with a market
value of $27,676,025.) (Cost $27,131,000) 27,131,000 27,131,000
------------
TOTAL INVESTMENTS AT VALUE (100.4%) (Cost $361,306,297*) 376,547,835
OTHER LIABILITIES IN EXCESS OF ASSETS (0.4%) (1,458,789)
------------
NET ASSETS (100.0%) (applicable to 26,495,950 shares) $375,089,046
------------
------------
NET ASSET VALUE, offering and redemption price per share
($375,089,046[div]26,495,950) $14.16
------
------
</TABLE>
+ Non-income producing security.
* Also cost for Federal income tax purposes.
Unless as otherwise indicated below, all Convertible Bonds/Notes are
denominated in $U.S.
(A) Denominated in New Zealand Dollars.
(B) Denominated in Japanese Yen.
(C) Denominated in Australian Dollars.
See Accompanying Notes to Financial Statements.
9
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of $431,424) $ 2,592,602
Interest 1,173,175
------------
Total investment income 3,765,777
------------
EXPENSES:
Investment advisory 1,276,260
Administrative services 343,860
Audit 10,989
Custodian/Sub-custodian 164,491
Directors 3,719
Insurance 4,194
Legal 9,918
Organizational 10,561
Printing 9,518
Registration 66,274
Transfer agent 16,255
Miscellaneous 4,998
------------
1,921,037
Less fees waived (405,478)
------------
Total expenses 1,515,559
------------
Net investment income 2,250,218
------------
NET REALIZED AND UNREALIZED LOSS FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS:
Net realized loss from security transactions (6,965,517)
Net realized gain from foreign currency related items 686,529
Net change in unrealized appreciation (depreciation) from investments and
foreign currency related items (23,573,523)
------------
Net realized and unrealized loss from investments and
foreign currency related items (29,852,511)
------------
Net decrease in net assets resulting from operations $(27,602,293)
------------
------------
</TABLE>
See Accompanying Notes to Financial Statements.
10
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended For the
April 30, 1995 Year Ended
(Unaudited) October 31, 1994
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 2,250,218 $ 1,276,813
Net realized gain (loss) from security transactions (6,965,517) 11,710,325
Net realized gain (loss) from foreign currency related items 686,529 (456,151)
Net change in unrealized appreciation (depreciation) from investments and
foreign currency related items (23,573,523) 22,452,714
-------------- ----------------
Net increase (decrease) in net assets resulting from operations (27,602,293) 34,983,701
-------------- ----------------
FROM DISTRIBUTIONS:
Dividends from net investment income (3,614,604) (526,855)
Distributions from capital gains (11,710,991) (1,146,187)
-------------- ----------------
Net decrease from distributions (15,325,595) (1,673,042)
-------------- ----------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 99,767,308 196,715,545
Reinvested dividends 13,607,234 1,270,243
Net asset value of shares redeemed (26,654,820) (9,279,255)
-------------- ----------------
Net increase in net assets from capital share
transactions 86,719,722 188,706,533
-------------- ----------------
Net increase in net assets 43,791,834 222,017,192
NET ASSETS:
Beginning of period 331,297,212 109,280,020
-------------- ----------------
End of period $ 375,089,046 $331,297,212
-------------- ----------------
-------------- ----------------
</TABLE>
See Accompanying Notes to Financial Statements.
11
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Fund Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended September 1, 1992
April 30, October 31, (Commencement of
1995 --------------------- Operations) through
(Unaudited) 1994 1993 October 31, 1992
------------ ------- ---------- -------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.34 $ 13.49 $ 9.62 $ 10.00
------------ ------- ---------- -------
Income from Investment Operations:
Net Investment Income .12 .17 .10 .02
Net Gain (Loss) from Securities and Foreign
Currency Related Items (both realized and
unrealized) (1.55) 2.87 3.87 (.40)
------------ ------- ---------- -------
Total From Investment Operations (1.43) 3.04 3.97 (.38)
------------ ------- ---------- -------
Less Distributions:
Dividends from net investment income (.18) (.07) (.10) .00
Distributions from capital gains (.57) (.12) .00 .00
------------ ------- ---------- -------
Total Distributions (.75) (.19) (.10) .00
------------ ------- ---------- -------
NET ASSET VALUE, END OF PERIOD $14.16 $ 16.34 $13.49 $ 9.62
------------ ------- ---------- -------
------------ ------- ---------- -------
Total Return (17.10%)* 22.62% 41.61% (20.69%)*
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $375,089 $331,297 $109,280 $18,613
Ratios to average daily net assets:
Operating expenses .95%* .95% .95% .95%*
Net investment income 1.41%* .59% .75% 1.22%*
Decrease reflected in above expense ratios due
to waivers/reimbursements .25%* .29% .44% .85%*
Portfolio turnover rate 25.43%* 19.34% 19.40% 50.16%
</TABLE>
* Annualized
12
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<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Institutional Fund, Inc. (the 'Fund') is an open-end
management investment company and currently offers two managed investment funds
(the 'Portfolios'): the International Equity Portfolio, which commenced
operations on September 1, 1992, which seeks long-term capital appreciation by
investing in equity securities of principally non-United States issuers; and the
Global Fixed Income Portfolio, which as of April 30, 1995 had not commenced
operations, which seeks to maximize total investment return consistent with
prudent investment management while preserving capital by investing in
investment grade fixed income securities of issuers throughout the world,
including United States issuers.
The net asset values of the Portfolios are determined daily as of the close
of regular trading on the New York Stock Exchange. The Fund's investments are
valued at market value, which is currently determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
last reported bid price. In the absence of market quotations, investments are
generally valued at fair value as determined by or under the direction of the
Fund's Board of Directors. Short-term investments that mature in 60 days or less
are valued on the basis of amortized cost, which attempts to approximate market
value.
The books and records of the Portfolios 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.
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 Fund does not isolate that portion of gains and losses on
investments in equity securities which is due to changes in the foreign exchange
rate from that which is due to changes in market prices of equity securities.
Security transactions are accounted for on trade date. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
The cost of investments sold is determined by use of the specific
indentification method for both financial reporting and income tax purposes.
Dividends from net investment income are declared and paid annually.
Distributions of net realized capital gains, if any, are declared annually.
However, to the extent that a net realized capital gain can be reduced by a
capital loss carryover, such gain will not be distributed. Income and capital
gain distributions are determined in accordance with Federal income tax
regulations which may differ from generally accepted accounting principles.
The Fund intends to continue to comply with the special provisions of the
Internal Revenue Code available to investment companies and therefore no Federal
income tax provision is required.
Costs incurred by the Portfolios in connection with their organization have
been deferred and are amortized over a period of five years from the date of
each Portfolio's commencement of operations.
13
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
Each Portfolio may enter into repurchase agreement transactions. Under the
terms of a typical repurchase agreement, a Portfolio acquires an underlying
security subject to an obligation of the seller to repurchase. The value of the
underlying security collateral will be maintained at an amount at least equal to
the total amount of the purchase obligation, including interest. The collateral
is in the Portfolio's possession.
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Counsellors'), a wholly owned
subsidiary of Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as
the Portfolios' investment adviser. The International Equity Portfolio pays
Counsellors an investment advisory fee calculated at an annual rate of .80% of
the Portfolio's average daily net assets. For the six months ended April 30,
1995, Counsellors earned $1,276,260 for investment advisory services to the
International Equity Portfolio, of which $352,604 was voluntarily waived. The
Global Fixed Income Portfolio will pay Counsellors an investment advisory fee
calculated at an annual rate of .65% of the Portfolio's average daily net
assets.
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Counsellors, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as the Fund's co-administrators. For its
administrative services, CFSI receives a fee calculated at an annual rate of
.10% of the Fund's average daily net assets. For the six months ended April 30,
1995, CFSI earned $159,533 in administrative services fees. For the six months
ended April 30, 1995, PFPC earned $184,327 and voluntarily waived $52,874 in
administrative services fees.
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Counsellors, acts as distributor of the International Equity Portfolio's shares.
No compensation is payable by the International Equity Portfolio to CSI for its
distribution services.
3. INVESTMENTS IN SECURITIES
The International Equity Portfolio's purchases and sales of investment
securities for the six months ended April 30, 1995 (excluding short-term
investments) were $110,048,718 and $37,695,785, respectively.
At April 30, 1995, with respect to the International Equity Portfolio, the
net unrealized appreciation from investments of $15,241,538 was comprised of
appreciation of $39,391,026 for those securities having an excess of value over
cost, and depreciation of $24,149,488 for those securities having an excess of
cost over value (based on cost for Federal income tax purposes).
4. FOREIGN FORWARD CURRENCY CONTRACTS
The Portfolios 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
14
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<PAGE>
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WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1995 (Unaudited)
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from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. The Portfolios may enter into forward contracts for
hedging purposes or to increase income and total return. The forward currency
contracts are adjusted by the daily exchange rate of the underlying currency and
any gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date.
At April 30, 1995, the Fund had the following open forward foreign currency
contract and had recorded an unrealized loss of $284,063:
<TABLE>
<CAPTION>
SETTLEMENT CURRENCY CURRENCY
DATE BOUGHT SOLD
- ---------- ---------------------- ------------------------
<S> <C> <C>
06/21/95 9,400,000 U.S. Dollars 807,554,000 Japanese Yen
</TABLE>
5. CAPITAL SHARE TRANSACTIONS
The Fund is authorized to issue up to three billion full and fractional
shares of beneficial interest of separate series having a $.001 par value per
share. Shares of two series have been authorized, which constitute the interest
in the Portfolios.
Transactions in shares of the International Equity Portfolio were as
follows:
<TABLE>
<CAPTION>
For the Six
Months Ended For the
April 30, 1995 Year Ended
(Unaudited) October 31, 1994
-------------- ----------------
<S> <C> <C>
Shares sold 7,119,069 12,686,666
Shares issued to shareholders on reinvestment of dividends 939,078 85,000
Shares redeemed (1,831,230) (603,362)
-------------- ----------------
Net increase in shares outstanding 6,226,917 12,168,304
-------------- ----------------
-------------- ----------------
</TABLE>
6. NET ASSETS
Net assets of the International Equity Portfolio at April 30, 1995,
consisted of the following:
<TABLE>
<S> <C>
Capital contributed, net $367,175,798
Accumulated net investment income 2,541,665
Accumulated net realized loss from security transactions (9,601,309)
Net unrealized appreciation from investments and foreign currency related items 14,972,892
------------
Net assets $375,089,046
------------
------------
</TABLE>
15
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<PAGE>
FURTHER INFORMATION IS CONTAINED IN
THE PROSPECTUS, WHICH MUST PRECEDE OR
ACCOMPANY THIS REPORT.
WARBURG PINCUS FUNDS
P.O. BOX 9030
BOSTON, MASSACHUSETTS 02205-9030
SHAREHOLDER SERVICES
1-800-888-6878
PROSPECTUSES
1-800-257-5614
[LOGO]
SEMIANNUAL
REPORT
APRIL 30, 1995
[ ] WARBURG PINCUS
INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
COUNSELLORS SECURITIES INC., DISTRIBUTOR
WPINS-3-0495
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