<PAGE>
<PAGE>
SEMIANNUAL
REPORT
April 30, 1996
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- INTERNATIONAL EQUITY PORTFOLIO
- SMALL COMPANY GROWTH PORTFOLIO
[Logo]
<PAGE>
<PAGE>
The views of the Portfolios' management are as of the date of the letters and
holdings described in this semiannual report are as of April 30, 1996; these
views and holdings may have changed subsequent to these dates.
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: June 21, 1996
The objective of Warburg Pincus Institutional Fund -- International Equity
Portfolio (the 'Portfolio') is long-term capital appreciation. 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, 1996, the Portfolio gained 15.20%, vs.
gains of 12.09% in the Lipper International Fund Index and 13.21% in the Morgan
Stanley Europe, Australasia and Far East ('EAFE') Index.
The Portfolio's performance for the six months was driven by timely stock
selection and, broadly, by its emphasis on Asian-Pacific markets, which saw
strong returns over the period. The Portfolio's largest country weighting
throughout remained Japan (29.1% of net assets as of April 30), which rose on
signs of continued economic recovery, an improved earnings outlook for many
companies, and an expansionary monetary policy from the Bank of Japan. We
believe that the prospects for the Japanese economy and Japanese equities
remain, in general, favorable, and that the Portfolio is well-positioned in
terms of its specific holdings. By sector, the Portfolio's largest weightings
are in two areas, machinery & industrial components and retail, reflecting our
view that Japan's economic recovery will be led by capital spending and
consumption.
As a defensive measure, we continue to hedge a substantial portion of the
Portfolio's yen exposure, reflecting our view that the Japanese currency will
weaken vs. the U.S. dollar. This strategy worked to the Portfolio's advantage
over the reporting period.
Other Asian-Pacific stocks that contributed positively to the Portfolio's
performance include its holdings in Hong Kong, Indonesia, South Korea and
Taiwan. The latter two markets, which combined represented 10.1% of the
Portfolio as of April 30, rebounded strongly in April -- rising 11% and 25%,
respectively, for the month per Morgan Stanley Capital International -- after
underperforming in 1995 and through the first three months of 1996. Our long-
term outlook on both markets, and on Asian-Pacific markets generally, remains
very positive, given what we consider to be their excellent growth prospects and
reasonable valuations.
<PAGE>
<PAGE>
The Portfolio remained underweighted in Europe through the period, reflecting
our general view that better growth prospects exist elsewhere. But the Portfolio
saw positive results from many of its European holdings, notably its German
stocks (Adidas and SGL Carbon, which both rose strongly despite general weakness
in the German equity market) and its French stocks. The French stock market,
after lagging in 1995, was Europe's strongest performer in local-currency terms
through the first four months of 1996, driven by signs that its economic
troubles have begun to ease. The Portfolio benefited from this strength, with
several of its holdings (e.g., Lagardere Groupe, Fives-Lille and Scor) enjoying
particularly impressive gains. The Portfolio also benefited from our decision to
hedge its franc exposure, since the French currency weakened against the U.S.
dollar during the period. We remain positive on the outlook for our French
stocks, believing that they are strong, well-managed businesses.
Richard H. King
Portfolio Manager
2
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
SEMIANNUAL REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: June 21, 1996
The objective of Warburg Pincus Institutional Fund -- Small Company Growth
Portfolio (the 'Portfolio') is capital growth. The Portfolio is a non-
diversified management investment company that pursues its objective by
investing primarily in equity securities of domestic companies with small market
capitalizations (i.e., less than $1 billion at the time of initial purchase).
For the four months ended April 30, 1996 (the Portfolio's inception was
December 29, 1995), the Portfolio gained 25.00%, vs. a gain of 10.72% in the
Russell 2000 Index.
The Portfolio's outperformance of its benchmark was the result of good stock
selection and the generally strong gains shown by its more heavily weighted
industries. These included computers (15.8% of assets as of April 30), business
services (11.4%) and health care (10.4%), and we believe that our holdings in
these areas continue to hold favorable prospects. The Portfolio also saw
generally strong performances from holdings in other sectors and industries that
we have emphasized, including electronics (5.4% of assets at the end of April),
oil services (5.2%), pharmaceuticals (4.6%) and transportation (4.6%), and we
remain similarly bullish on their prospects.
We believe that the Portfolio represents an attractive opportunity for
investors seeking exposure to smaller U.S. companies, and that the long-term
argument for investing in such companies remains a persuasive one. Historically,
smaller companies have demonstrated the potential for explosive earnings growth,
which has often translated into outsized gains in their share prices. Indeed,
over extended periods, stocks of smaller companies in aggregate have handily
outperformed those of larger-capitalization firms, albeit with an elevated level
of volatility.
We are encouraged by the Portfolio's relative strength over the last several
months, and look forward to the months ahead.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
3
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (93.1%)
Argentina (3.3%)
Banco de Galicia & Buenos Aires SA 106,796 $ 639,408
Banco de Galicia & Buenos Aires SA ADR 11,003 258,571
Banco Frances del Rio de la Plata SA 129,030 1,236,301
Banco Frances del Rio de la Plata SA ADR 187,105 5,379,269
Capex SA GDR 58,400 835,996
Telefonica de Argentina SA ADR 263,800 7,716,150
YPF SA ADR 325,600 7,122,500
------------
23,188,195
------------
Australia (2.4%)
Lend Lease Corp., Ltd. 267,100 4,070,258
Niugini Mining Ltd. 353,750 805,825
Pasminco Ltd. 911,000 1,330,998
Qantas Airways Ltd. 2,236,500 3,970,302
Reinsurance Australia Corp., Ltd. 1,788,600 4,622,270
Woodside Petroleum Ltd. 353,500 2,043,682
------------
16,843,335
------------
Austria (2.5%)
Boehler-Uddeholm AG `D' 75,220 6,139,696
Maculan Holdings AG Vorzuege # 9,290 43,133
V.A. Technologie AG 83,250 11,062,378
------------
17,245,207
------------
Brazil (1.4%)
Panamerican Beverages, Inc. Class A 225,600 9,898,200
------------
Chile (0.1%)
Enersis SA ADR 21,000 624,750
------------
China (0.7%)
Ek Chor China Motorcycle Co., Ltd. 10,000 147,500
Henderson China Holding Ltd. `D' 735,000 2,038,235
Jilin Chemical Industrial Co., Ltd. Class H 5,656,000 1,133,394
Jilin Chemical Industrial Co., Ltd. ADR 72,500 1,413,750
------------
4,732,879
------------
Denmark (1.8%)
International Service System AS Class B 269,150 7,616,377
Tele Danmark AS ADR 160,100 4,042,525
Tele Danmark AS Class B 16,800 845,480
------------
12,504,382
------------
</TABLE>
See Accompanying Notes to Financial Statements.
4
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Finland (1.6%)
Metra Oy Class B 60,650 $ 2,507,856
Metsa-Serla Class B 574,000 4,189,175
Valmet Corp. Class A 311,500 4,314,940
------------
11,011,971
------------
France (5.2%)
Cetelem 13,458 2,888,788
Fives-Lille (Compagnie De) 26,740 2,825,905
Lagardere Groupe 304,550 8,175,958
Scor SA 73,251 2,669,731
Total Cie Franc Des Petroles Class B 169,447 11,501,996
Usinor Sacilor SA `D' 556,300 8,608,572
------------
36,670,950
------------
Germany (2.6%)
Adidas AG 95,000 7,173,558
Adidas AG ADS 42,100 1,599,169
SGL Carbon AG 97,708 9,126,817
------------
17,899,544
------------
Hong Kong (4.5%)
Citic Pacific Ltd. 2,813,000 11,055,617
Hong Kong Land Holdings Ltd. 1,575,000 3,370,500
Hong Kong Land Holdings Ltd. ADR 275,000 2,942,500
HSBC Holdings PLC 289,925 4,329,197
Jardine Matheson Holdings Ltd. ADR 1,223,715 9,789,720
------------
31,487,534
------------
India (3.1%)
Associated Cement Companies Ltd. 5,185 609,602
Bharat Petroleum Corp. Ltd. 14,000 148,159
Hindalco Industries Ltd. 56,750 2,147,253
Hindalco Industries Ltd. GDR 137,800 6,097,650
India Cements Ltd. 20,250 92,472
Reliance Industries Ltd. 693,500 5,237,946
Reliance Industries Ltd. GDS 60,700 1,001,550
State Bank of India 548,350 4,825,289
The India Fund Inc. `D' 144,000 1,602,000
------------
21,761,921
------------
</TABLE>
See Accompanying Notes to Financial Statements.
5
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Indonesia (1.8%)
P.T. Bank International Indonesia 457,350 $ 2,249,503
P.T. Mulia Industrindo 1,615,800 3,116,631
P.T. Semen Gresik 646,000 2,235,941
P.T. Sinar Mas Multiartha `D' 107,000 136,444
P.T. Telekomunikasi Indonesia 2,076,500 3,448,966
P.T. Telekomunikasi Indonesia ADR 26,100 890,663
P.T. Tri Polyta Indonesia ADR 40,500 506,250
------------
12,584,398
------------
Israel (1.3%)
Ampal-American Israel Corp. Class A 233,000 1,368,875
ECI Telecommunications Limited Designs 299,850 7,833,581
------------
9,202,456
------------
Japan (27.8%)
Canon Inc. 470,000 9,338,046
Canon Inc. ADR 25,200 2,507,400
Daibiru Corp. 147,000 1,979,845
Daimaru Inc. 314,000 2,474,448
DDI Corp. 1,095 9,403,047
East Japan Railway Co. 413 2,205,244
Fujitsu Ltd. 312,000 3,218,646
Hankyu Realty 216,000 2,125,131
Hitachi Ltd. 452,750 4,886,880
Honda Motor Co. 425,000 9,702,455
Itochu Corp. 335,000 2,550,339
Jusco Co., Ltd. 158,000 4,889,865
Kao Corp. 500 6,686
Keyence Corp. 30,000 3,954,532
Kirin Beverage Corp. 144,000 2,035,725
Kyocera Corp. 42,000 3,161,333
Mitsubishi Corp. 180,000 2,561,849
Mitsubishi Estate Co., Ltd. 428,000 6,009,743
Mitsubishi Heavy Industries Ltd. 994,000 8,868,049
Murata Mfg. Co., Ltd. 70,290 2,725,928
NEC Corp. 612,000 7,774,955
Nikko Securities Company Ltd. 482,000 6,123,412
Nikon Corp. 506,000 6,814,978
Nippon Communication Systems Corp. 405,300 5,226,430
Nippon Telephone & Telegraph Corp. 1,437 11,131,360
NKK Corp. `D' 2,635,000 8,255,612
</TABLE>
See Accompanying Notes to Financial Statements.
6
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Japan (cont'd)
NTT Data Communications Systems Co. 164 $ 5,733,499
Orix Corp. 186,700 7,721,951
Rohm Co., Ltd. 80,000 5,089,311
Shin-Etsu Chemical Co., Ltd. 73,080 1,598,560
Sony Corp. 110,500 7,177,381
Sony Corp. ADR 36,900 2,380,050
TDK Corp. 169,000 9,669,596
Toho Co., Ltd. 25,850 4,493,934
Tokyo Electron Ltd. 119,000 4,421,721
Tsuchiya Home Co. 78,180 1,530,891
Uny Co., Ltd. 277,500 5,380,886
Yokogawa Electric 422,000 4,917,757
York-Benimaru Co., Ltd. 107,400 4,308,721
------------
194,356,196
------------
Malaysia (0.3%)
Land & General BHD 171,000 456,174
Westmont Industries BHD 353,000 764,682
Westmont Industries BHD Class A `D' 494,200 1,030,905
------------
2,251,761
------------
Mexico (0.6%)
Gruma SA de CV Class B 982,000 3,970,350
------------
New Zealand (5.2%)
Brierley Investments Ltd. 8,882,083 8,354,860
Fletcher Challenge Building `D' 1,499,913 3,552,948
Fletcher Challenge Energy `D' 570,513 1,222,147
Fletcher Challenge Forestry 5,220,251 6,738,342
Fletcher Challenge Paper `D' 1,141,025 2,350,283
Lion Nathan Ltd. 3,200,800 7,977,539
Sky City Ltd. `D' 862,075 3,663,865
Wrightson Ltd. 3,271,735 2,336,228
------------
36,196,212
------------
Norway (0.6%)
Norsk Hydro AS ADR 98,144 4,514,624
------------
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Pakistan (0.2%)
Pakistan Telecommunications Corp. `D' 345 $ 34,386
Pakistan Telecommunications Corp. GDR `D' 14,400 1,483,200
------------
1,517,586
------------
Portugal (0.9%)
Portugal Telecom SA 131,400 2,857,468
Portugal Telecom SA ADR 149,100 3,224,288
------------
6,081,756
------------
Singapore (1.6%)
DBS Land Ltd. 1,097,500 4,451,541
Development Bank of Singapore Ltd. 315,562 3,997,014
Development Bank of Singapore Ltd. ADR 34,750 1,763,563
IPC Corp., Ltd. 1,795,000 913,275
------------
11,125,393
------------
South Korea (4.9%)
Daewoo Electronics Co., Ltd. 419,450 4,581,502
Daewoo Heavy Industries 78,194 869,157
Hana Bank 215,051 4,781,306
Hanil Bank 484,453 6,771,883
Inchon Iron & Steel Co., Ltd. 17,000 552,686
Korea Europe Fund Ltd. 289 1,319,285
Korea Long Term Credit Bank 59,157 1,882,693
Korea Mobile Telecommunications Corp. 500 70,059
L.G. Construction Ltd. 12,530 318,805
Mando Machinery Corp. 6,000 340,524
Samsung Electronics Co., Ltd. 43,017 5,859,431
Samsung Electronics Co., Ltd. GDR 15,347 629,220
Samsung Electronics Co., Ltd. GDR 4,824 365,421
Samsung Heavy Industries Co., Ltd. 112,453 2,384,316
Ssangyong Investment & Securities Co., Ltd. `D' 141,630 3,366,943
------------
34,093,231
------------
Spain (3.5%)
Banco de Santander 30,300 1,408,914
Banco de Santander ADR 249,000 11,671,875
Repsol SA ADR 303,500 11,229,500
------------
24,310,289
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Sweden (2.5%)
Asea AB Series B 59,200 $ 6,002,093
Astra AB Series B 266,100 11,744,492
------------
17,746,585
------------
Switzerland (0.9%)
BBC Brown Boveri AG 3,674 4,428,218
Danzas Holding AG 1,369 1,571,725
------------
5,999,943
------------
Taiwan (4.6%)
China Steel Corp. 7,023,000 6,591,575
Hocheng Group Corp. 1,210,000 2,583,091
Kwang Hua Growth Fund 346,000 128,625
Phoenixtec Power Co., Ltd. `D' 1,280,000 2,732,526
Taiwan Semiconductor Mfg. Co. 1,621,000 6,145,349
Ton Yi Industrial Corp. 4,115,560 5,907,720
Yang Ming Marine Transport Corp. 5,588,000 7,980,213
------------
32,069,099
------------
Thailand (1.4%)
Bangkok Bank Public Co., Ltd. 170,400 2,476,823
Industrial Finance Corp. of Thailand 1,310,832 5,309,963
Ruam Pattana Fund II 86,000 56,354
Thai Military Bank Ltd. 340,560 1,650,052
------------
9,493,192
------------
United Kingdom (5.8%)
AAF Industries PLC `D' 208,500 90,915
British Air Authority PLC 852,034 7,007,717
Cookson Group PLC 1,246,700 5,904,795
Grand Metropolitan PLC 992,600 6,522,109
London Pacific Group Ltd. 606,000 2,314,401
Prudential Corp. PLC 81,242 558,861
Reckitt & Colman PLC 473,986 5,188,347
Rolls-Royce PLC 1,734,000 6,179,164
Singer & Friedlander Group PLC 2,210,000 3,688,481
Takare PLC 1,222,900 2,758,129
Trio Holdings PLC `D' 1,648,500 173,508
------------
40,386,427
------------
Zimbabwe (0.0%)
Delta Corp. Ltd. 37,000 90,953
------------
TOTAL COMMON STOCK (Cost $564,439,574) 649,859,319
------------
</TABLE>
See Accompanying Notes to Financial Statements.
9
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
PREFERRED STOCK (0.3%)
<S> <C> <C>
Austria (0.0%)
Maculan Holdings AG Vorzuege # 31,100 $ 144,396
------------
South Korea (0.2%)
Samsung Electronics Co., Ltd. 16,264 1,358,177
------------
United Kingdom (0.1%)
Singer & Friedlander Group PLC, 8.50% Convertible 348,947 682,080
------------
TOTAL PREFERRED STOCK (Cost $3,961,744) 2,184,653
------------
STOCK RIGHTS & WARRANTS (0.0%)
Hong Kong (0.0%)
Jardine Strategic Holdings Ltd. Wts., 05/02/98 `D' 384,600 18,894
------------
Israel (0.0%)
Ampal-American Israel Corp. Class A Wts., 01/31/99 `D' 95,000 29,688
------------
Japan (0.0%)
Bandai Industries Wts., 11/04/97 `D' 60 83,250
------------
South Korea (0.0%)
Samsung Heavy Industries Rts., 05/14/96 `D' 10,907 82,692
------------
Switzerland (0.0%)
Danzas Holdings AG Wts., 08/02/96 `D' 2,000 6,848
------------
TOTAL STOCK RIGHTS & WARRANTS (Cost $409,880) 221,372
------------
CALL OPTIONS (0.8%)
Japan (0.4%)
Topix Index, 05/10/96, (Strike Price $1,323.64) `D' 3,126 1,215,326
Topix Index, 06/14/96, (Strike Price $1,275.00) `D' 3,141 1,357,917
------------
2,573,243
------------
Taiwan (0.4%)
Taiwan Weighted Index, 07/11/96, (Strike Price $183.42)
`D' 21,193 937,771
Taiwan Weighted Index, 07/16/96, (Strike Price $184.01)
`D' 22,136 973,087
Taiwan Weighted Index, 08/02/96, (Strike Price $174.89)
`D' 16,984 898,280
------------
2,809,138
------------
TOTAL CALL OPTIONS (Cost $1,667,483) 5,382,381
------------
</TABLE>
See Accompanying Notes to Financial Statements.
10
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR= VALUE
----------- ------------
CONVERTIBLE BONDS/NOTES (1.4%)
<S> <C> <C>
Argentina (0.2%)
Banco de Galicia & Buenos Aires SA 7.00%, 08/01/02 $ 1,574,000 $ 1,652,700
------------
Japan (0.9%)
Matsushita Electric Works Ltd. 2.70%, 05/31/02 (A)521,000,000 6,315,303
------------
New Zealand (0.1%)
Brierley Investments Ltd. 9.00%, 06/30/98 (B) 1,028,875 904,225
------------
Thailand (0.2%)
Bangkok Bank Public Co., Ltd. 3.25%, 03/03/04 800,000 988,000
------------
TOTAL CONVERTIBLE BONDS/NOTES (Cost $8,710,921) 9,860,228
------------
<CAPTION>
SHORT-TERM INVESTMENTS (2.0%)
<S> <C> <C>
Repurchase agreement with State Street Bank & Trust Co.
dated 04/30/96 at 5.24% to be repurchased at $14,104,053
on 05/01/96. (Collateralized by $14,720,000 U.S. Treasury
Bill due 10/03/96, with a market value of $14,388,800.)
(Cost $14,102,000) 14,102,000 14,102,000
------------
TOTAL INVESTMENTS AT VALUE (97.6%) (Cost $593,291,602*) 681,609,953
OTHER ASSETS IN EXCESS OF LIABILITIES (2.4%) 16,950,188
------------
NET ASSETS (100.0%) (applicable to 41,500,090 shares) $698,560,141
------------
------------
NET ASSET VALUE, offering and redemption price per share
($698,560,141[div]41,500,090 shares) $16.83
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
GDR = Global Depository Receipt
GDS = Global Depository Share
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-income producing security.
# Illiquid security.
* Cost for Federal income tax purposes is $593,470,851.
= Unless otherwise indicated below, all bonds are denominated in U.S. Dollars.
(A) Denominated in Japanese Yen.
(B) Denominated in New Zealand Dollars.
See Accompanying Notes to Financial Statements.
11
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
<S> <C> <C>
COMMON STOCK (82.7%)
Banks and Savings & Loans (0.3%)
Great Financial Corp. 1,100 $ 30,112
-----------
Business Services (11.4%)
American Management Systems, Inc. `D' 5,800 154,425
Catalina Marketing Corp. `D' 1,600 124,600
CDI Corp. `D' 3,300 97,350
Checkpoint System, Inc. `D' 3,300 98,588
Continuum, Inc. `D' 2,000 114,000
Copart, Inc. `D' 3,300 89,925
Daisytek International Corp. `D' 3,300 134,475
Health Payment Review, Inc. `D' 3,300 141,900
Norrell Corp. 3,300 127,875
Quickresponse Services, Inc. `D' 3,300 96,525
-----------
1,179,663
-----------
Capital Equipment (1.1%)
Roper Industries, Inc. 2,500 116,250
-----------
Communications & Media (3.1%)
Central European Media Enterprises Ltd. Class A `D' 5,100 145,988
Harte-Hanks Communications, Inc. 3,900 92,138
TCA Cable TV, Inc. 2,700 78,975
-----------
317,101
-----------
Computers (15.8%)
Borland International, Inc. `D' 4,900 80,238
Citrix Systems, Inc. `D' 3,300 257,400
Cognex Corp. `D' 5,100 136,425
FileNet Corp. `D' 2,500 140,000
Learning Tree International, Inc. `D' 3,300 82,500
National Instruments Corp. `D' 3,400 83,300
OrCad, Inc. `D' 10,700 143,112
Platinum Technology, Inc. `D' 5,800 84,825
Raptor Systems, Inc. `D' 4,000 132,000
Synopsys, Inc. `D' 6,600 272,249
System Software Associates, Inc. 6,600 157,575
Tecnomatix Technologies, Ltd. `D' 3,400 62,050
-----------
1,631,674
-----------
Consumer Non-Durables (2.0%)
Central Garden & Pet Co. `D' 5,800 61,625
Nature's Sunshine Products, Inc. 5,800 145,000
-----------
206,625
-----------
Consumer Services (1.8%)
DeVRY, Inc. `D' 5,100 189,975
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
12
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCK (CONT'D)
<S> <C> <C>
Electronics (5.4%)
Burr-Brown Corp. `D' 3,900 $ 75,075
Glenayre Technologies, Inc. `D' 2,500 116,250
Maxim Integrated Products, Inc. `D' 3,700 126,725
Methode Electronics, Inc. Class A 6,600 110,550
ThermoTrex Corp. `D' 2,500 130,937
-----------
559,537
-----------
Energy (4.5%)
Brown (Tom), Inc. `D' 6,400 99,200
Flores & Rucks, Inc. `D' 12,900 269,288
Texas Merdian Resources Corp. `D' 9,200 96,600
-----------
465,088
-----------
Environmental Services (2.3%)
Allied Waste Industries, Inc. `D' 12,900 125,775
Sanifill, Inc. `D' 2,500 108,437
-----------
234,212
-----------
Financial Services (3.7%)
Sirrom Capital Corp. 3,300 83,325
Transactions Systems Architects, Inc. Class A `D' 2,000 107,000
United Companies Financial Corp. 3,300 105,600
Vesta Insurance Group, Inc. 2,700 86,738
-----------
382,663
-----------
Healthcare (10.4%)
American Oncology Resources, Inc. `D' 2,500 119,375
Ballard Medical Products 3,400 67,575
Conmed Corp. `D' 4,900 145,775
EMCare Holdings, Inc. `D' 5,800 162,400
Endosonics Corp. `D' 6,600 114,675
Equimed, Inc. `D' 3,400 27,625
IDX Systems Corp. `D' 3,300 121,275
Medcath, Inc. `D' 2,300 89,700
Physicians Resource Group, Inc. `D' 2,700 81,337
Rexall Sundown, Inc. `D' 4,900 139,650
-----------
1,069,387
-----------
Lodging & Restaurants (1.5%)
Doubletree Corp. `D' 3,900 125,775
Renaissance Hotel Group NV `D' 1,400 26,600
-----------
152,375
-----------
</TABLE>
See Accompanying Notes to Financial Statements.
13
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- -----------
COMMON STOCK (CONT'D)
<S> <C> <C>
Oil Services (5.2%)
Input/Output, Inc. `D' 6,600 $ 229,350
Nabors Industries, Inc. `D' 9,700 149,137
Petroleum Geo Services ADR `D' 5,100 161,288
-----------
539,775
-----------
Pharmaceuticals (4.6%)
Alpharma Inc. Class A `D' 3,900 95,550
Gilead Sciences, Inc. `D' 4,900 149,450
La Jolla Pharmaceutical Co. `D' 16,000 136,000
Ligand Pharmaceuticals, Inc. Class B `D' 6,600 96,525
-----------
477,525
-----------
Real Estate (1.5%)
NHP, Inc. `D' 7,800 151,125
-----------
Retail (1.6%)
Borders Group, Inc. `D' 5,100 163,200
-----------
Telecommunications & Equipment (1.9%)
Teledata Communications Ltd. `D' 16,200 194,400
-----------
Transportation (4.6%)
Heartland Express, Inc. `D' 6,600 193,050
Hub Group, Inc. Class A `D' 6,600 153,450
Mark VII, Inc. `D' 6,400 128,400
-----------
474,900
-----------
TOTAL COMMON STOCK (Cost $7,888,106) 8,535,587
-----------
<CAPTION>
PAR
----------
SHORT-TERM INVESTMENTS (53.1%) +
<S> <C> <C>
Repurchase agreement with State Street Bank & Trust Co. dated
04/30/96 at 5.24% to be repurchased at $5,479,798 on
05/01/96. (Collateralized by $5,530,000 U.S. Treasury Note at
6.00%, due 08/15/97, with a market value of $5,592,213.)
(Cost $5,479,000) $5,479,000 5,479,000
-----------
TOTAL INVESTMENTS AT VALUE (135.8%) (Cost $13,367,106*) 14,014,587
LIABILITIES IN EXCESS OF OTHER ASSETS (35.8%) # (3,693,619)
-----------
NET ASSETS (100.0%) (applicable to 825,833 shares) $10,320,968
-----------
-----------
NET ASSET VALUE, offering and redemption price per share
($10,320,968[div]825,833) $12.50
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-income producing security.
* Also cost for Federal income tax purposes.
+ Consists of $5,000,000 subscription received on 04/29/96.
# Unsettled security purchases were 36.7% of the Portfolio's net assets.
See Accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
------------------------------ ------------------------------
FOR THE PERIOD
DECEMBER 29, 1995
FOR THE SIX (COMMENCEMENT OF
MONTHS ENDED OPERATIONS) THROUGH
APRIL 30, 1996 APRIL 30, 1996
(UNAUDITED) (UNAUDITED)
------------------------------ ------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign taxes withheld of
$893,419) $ 5,451,611 $ 1,974
Interest 591,004 7,896
---------- -------
Total investment income 6,042,615 9,870
---------- -------
EXPENSES:
Investment advisory 2,345,980 8,035
Administrative services 602,436 1,786
Audit 12,264 5,942
Custodian/Sub-custodian 247,315 10,403
Directors 4,350 1,672
Insurance 3,687 397
Interest 92,890 0
Legal 20,011 10,889
Organizational 11,845 10,967
Printing 7,049 5,951
Registration 54,654 13,281
Transfer agent 9,778 15,872
Miscellaneous 6,893 2,974
---------- -------
3,419,152 88,169
Less fees waived and expenses reimbursed (633,301) (78,520)
---------- -------
Total expenses 2,785,851 9,649
---------- -------
Net investment income 3,256,764 221
---------- -------
NET REALIZED AND UNREALIZED GAIN FROM
INVESTMENTS AND FOREIGN CURRENCY RELATED
ITEMS:
Net realized gain from security transactions 11,462,601 180,469
Net realized gain from foreign currency
related items 15,471,951 0
Net change in unrealized appreciation from
investments and
foreign currency related items 56,627,008 647,481
---------- -------
Net realized and unrealized gain from
investments and
foreign currency related items 83,561,560 827,950
---------- -------
Net increase in net assets resulting
from operations $ 86,818,324 $828,171
---------- -------
---------- -------
</TABLE>
See Accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY PORTFOLIO SMALL COMPANY GROWTH PORTFOLIO
---------------------------------- ------------------------------
FOR THE PERIOD
DECEMBER 29, 1995
FOR THE SIX (COMMENCEMENT OF
MONTHS ENDED FOR THE OPERATIONS) THROUGH
APRIL 30, 1996 YEAR ENDED APRIL 30, 1996
(UNAUDITED) OCTOBER 31, 1995 (UNAUDITED)
-------------- ---------------- ------------------------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 3,256,764 $ 4,659,886 $ 221
Net realized gain (loss) from security
transactions 11,462,601 (1,094,116) 180,469
Net realized gain from foreign currency
related items 15,471,951 3,076,737 0
Net change in unrealized appreciation
from investments and foreign currency
related items 56,627,008 (6,017,482) 647,481
-------------- ---------------- ----------
Net increase in net assets resulting
from operations 86,818,324 625,025 828,171
-------------- ---------------- ----------
FROM DISTRIBUTIONS:
Dividends from net investment income (17,882,333) (3,614,605) 0
Distributions from capital gains 0 (11,710,991) 0
-------------- ---------------- ----------
Net decrease from distributions (17,882,333) (15,325,596) 0
-------------- ---------------- ----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 143,443,192 253,425,787 9,491,797
Reinvested dividends 13,380,860 13,607,235 0
Net asset value of shares redeemed (34,958,793) (75,870,772) 0
-------------- ---------------- ----------
Net increase in net assets from
capital share transactions 121,865,259 191,162,250 9,491,797
-------------- ---------------- ----------
Net increase in net assets 190,801,250 176,461,679 10,319,968
NET ASSETS:
Beginning of period 507,758,891 331,297,212 1,000
-------------- ---------------- ----------
End of period $698,560,141 $507,758,891 $ 10,320,968
-------------- ---------------- ----------
-------------- ---------------- ----------
</TABLE>
See Accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR ENDED SEPTEMBER 1, 1992
MONTHS ENDED OCTOBER 31, (COMMENCEMENT OF
APRIL 30, 1996 ---------------------------- OPERATIONS) THROUGH
(UNAUDITED) 1995 1994 1993 OCTOBER 31, 1992
-------------- ------ ------ ------ -------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $15.10 $16.34 $13.49 $ 9.62 $ 10.00
----- ------ ------ ------ -----
Income from Investment Operations:
Net Investment Income .12 .15 .17 .10 .02
Net Gain (Loss) from Securities and
Foreign Currency Related Items (both
realized and unrealized) 2.11 (.64) 2.87 3.87 (.40)
----- ------ ------ ------ -----
Total from Investment Operations 2.23 (.49) 3.04 3.97 (.38)
----- ------ ------ ------ -----
Less Distributions:
Dividends from net investment income (.50) (.18) (.07) (.10) .00
Distributions from capital gains .00 (.57) (.12) .00 .00
----- ------ ------ ------ -----
Total Distributions (.50) (.75) (.19) (.10) .00
----- ------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD $16.83 $15.10 $16.34 $13.49 $ 9.62
----- ------ ------ ------ -----
----- ------ ------ ------ -----
Total Return 15.20%`D' (2.83%) 22.62% 41.61% (3.80%)`D'
RATIOS /SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $698,560 $507,759 $331,297 $109,280 $18,613
Ratios to average daily net assets:
Operating expenses .95%* .95% .95% .95% .95%*
Net investment income 1.11%* 1.20% .59% .75% 1.22%*
Decrease reflected in above expense
ratios due to waivers/reimbursements .21%* .23% .29% .44% .85%*
Portfolio Turnover Rate 17.21%`D' 39.70% 19.34% 19.40% 8.25%`D'
Average Commission Rate # $ .0191 -- -- -- --
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
# Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charge.
See Accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 29, 1995
(COMMENCEMENT OF
OPERATIONS) THROUGH
APRIL 30, 1996
(UNAUDITED)
-------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-----
Net Investment Income 0.00
Net Gain on Securities (both realized and unrealized) 2.50
-----
Total from Investment Operations 2.50
-----
NET ASSET VALUE, END OF PERIOD $ 12.50
-----
-----
Total Return 25.00%`D'
RATIOS /SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $10,321
Ratio to average daily net assets:
Operating expenses 1.08%*
Net investment income 0.02%*
Decrease reflected in above expense ratios due to waivers/reimbursements 8.79%*
Portfolio Turnover Rate 40.65%`D'
Average Commission Rate # $ .0564
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
# Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charge.
See Accompanying Notes to Financial Statements.
18
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Institutional Fund, Inc. (the 'Fund') is an open-end
management investment company and currently offers three managed investment
funds (the 'Portfolios'): International Equity Portfolio, which commenced
operations on September 1, 1992, seeks long-term capital appreciation by
investing in equity securities of principally non-United States issuers; Small
Company Growth Portfolio, which commenced operations on December 29, 1995, seeks
capital growth by investing primarily in equity securities of small-sized
domestic companies; and Global Fixed Income Portfolio, which as of April 30,
1996, had not commenced operations, 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 Portfolio'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 mean 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 approximates
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
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 Fund does not isolate that portion of
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 Fund isolates that portion of gains and losses on
investments in debt securities which are due to changes in the foreign exchange
rate from that which are due to changes in market prices of debt securities.
Security transactions are accounted for on a trade date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date. The cost of investments sold is determined by use of the
specific identification method for both financial reporting and income tax
purposes.
Dividends from net investment income and distributions of net realized
capital gains, if any, are declared and paid annually. However, to the extent
that a
19
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
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 the Fund's intention to have
each portfolio continue to qualify for and elect the tax treatment applicable to
regulated investment companies under the Internal Revenue Code and make the
requisite distributions to its shareholders which will be sufficient to relieve
it from Federal income and excise taxes.
Costs incurred by the Portfolios in connection with their organization have
been deferred and are being amortized over a period of five years from the date
each Portfolio commences its operations. Costs incurred by the Portfolios in
connection with the offering of its shares have been deferred and are being
amortized over a one year period from the date each Portfolio commences its
operations.
The Portfolios 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.
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 statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
The Portfolios have an arrangement with their transfer agent whereby interest
earned on uninvested cash balances was used to offset a portion of the transfer
agent expense. For the period ended April 30, 1996, the International Equity
Portfolio and the Small Company Growth Portfolio had credits or reimbursements
of $9,778 and $3, respectively under this arrangement.
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of
Warburg, Pincus Counsellors G.P. ('Counsellors G.P.'), serves as each
Portfolio's investment adviser. For its investment advisory services, Warburg
receives the following fees based on each Portfolio's average daily net assets:
<TABLE>
<CAPTION>
PORTFOLIO ANNUAL RATE
- ------------------------------------------------- ---------------------------------
<S> <C>
International Equity .80% of average daily net assets
Small Company Growth .90% of average daily net assets
</TABLE>
20
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
For the period ended April 30, 1996, investment advisory fees, waivers and
reimbursements were as follows:
<TABLE>
<CAPTION>
GROSS NET EXPENSE
PORTFOLIO ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENTS
- ------------------------- ------------ -------- ------------ --------------
<S> <C> <C> <C> <C>
International Equity $2,345,980 ($550,846) $1,795,134 $ 0
Small Company Growth 8,035 (8,035) 0 (69,589)
</TABLE>
Counsellors Funds Service, Inc. ('CFSI'), a wholly owned subsidiary of
Warburg, and PFPC Inc. ('PFPC'), an indirect, wholly owned subsidiary of PNC
Bank Corp. ('PNC'), serve as each Portfolio's co-administrators. For its
administrative services, CFSI receives a fee calculated at an annual rate of
.10% of the Portfolios' average daily net assets. For the period ended April 30,
1996, administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
PORTFOLIO CO-ADMINISTRATION FEE
- ------------------------------------------------------ ---------------------
<S> <C>
International Equity $ 293,248
Small Company Growth 893
</TABLE>
For its administrative services, PFPC currently receives a fee calculated at
an annual rate of .10% of the average daily net assets of the Small Company
Growth Portfolio. For the International Eqity Portfolio, PFPC receives a fee
based on the following fee structure:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL RATE
- ------------------------------------------------- ---------------------------------
<S> <C>
First $250 million .12% of average daily net assets
Second $250 million .10% of average daily net assets
Third $250 million .08% of average daily net assets
Over $750 million .05% of average daily net assets
</TABLE>
For the period ended April 30, 1996, administrative service fees earned and
waived by PFPC were as follows:
<TABLE>
<CAPTION>
NET
PORTFOLIO CO-ADMINISTRATION FEE WAIVER CO-ADMINISTRATION FEE
- --------------------------- --------------------- -------- ---------------------
<S> <C> <C> <C>
International Equity $ 309,188 $(72,677) $ 236,511
Small Company Growth 893 (893) 0
</TABLE>
Counsellors Securities Inc. ('CSI'), also a wholly owned subsidiary of
Warburg, acts as distributor of each Portfolio's shares. No compensation is
payable by the Portfolios to CSI for its distribution services.
3. INVESTMENTS IN SECURITIES
Purchases and sales of investment securities for the period ended April 30,
1996 (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- ------------------------------------------------- ------------ -----------
<S> <C> <C>
International Equity $209,374,152 $96,947,607
Small Company Growth 8,875,710 1,168,073
</TABLE>
At April 30, 1996, the net unrealized appreciation from investments for those
securities having an excess of value over cost and net depreciation from
21
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
investments for those securities having an excess of cost over value (based on
cost for Federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED NET UNREALIZED
PORTFOLIO APPRECIATION DEPRECIATION APPRECIATION
- ----------------------------------- ------------ ------------ --------------
<S> <C> <C> <C>
International Equity $109,564,537 $(21,425,435) $ 88,139,102
Small Company Growth 711,031 (63,550) 647,481
</TABLE>
4. FORWARD FOREIGN 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 from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar. Each
Portfolio will enter into forward contracts primarily for hedging purposes. 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, 1996, the International Equity Portfolio had the following open
forward foreign currency contracts:
<TABLE>
<CAPTION>
FOREIGN UNREALIZED
FORWARD CURRENCY EXPIRATION CURRENCY CONTRACT CONTRACT FOREIGN EXCHANGE
CONTRACT DATE TO BE SOLD AMOUNT VALUE GAIN/(LOSS)
- ---------------- ---------- --------------- ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
French Francs 09/24/96 150,665,950 $ 30,034,676 $ 29,366,146 $ 668,530
Japanese Yen 03/05/97 3,972,915,600 39,300,000 39,511,723 (211,723)
Japanese Yen 03/05/97 3,398,640,000 33,600,000 33,800,397 (200,397)
Japanese Yen 03/05/97 2,673,850,000 26,500,000 26,592,163 (92,163)
Japanese Yen 03/05/97 1,766,012,500 17,500,000 17,563,473 (63,473)
Japanese Yen 03/05/97 971,424,000 9,600,000 9,661,075 (61,075)
Japanese Yen 03/05/97 202,400,000 2,000,000 2,012,923 (12,923)
Japanese Yen 03/05/97 124,596,500 1,232,409 1,239,146 (6,737)
------------ ------------ --------
$159,767,085 $159,747,046 $ 20,039
------------ ------------ --------
------------ ------------ --------
</TABLE>
5. EQUITY SWAP TRANSACTIONS
The International Equity Portfolio (the 'Portfolio') entered into a Taiwanese
equity swap agreement (which represents approximately .48% of the Portfolio's
net assets at April 30, 1996) dated August 11, 1995, where the Portfolio
receives a quarterly payment, representing the total return (defined as market
appreciation and dividend income) on a basket of three Taiwanese common stocks
('Common Stocks'). In return, the Portfolio pays quarterly the Libor rate
(London Interbank Offered Rate), plus 1.25% per annum (6.508% on April 30, 1996)
on the market value of the Common Stocks ('Notional amount') which is currently
$2,583,878. The Notional amount is marked to market on each quarterly reset
date. In the event that the Common Stocks decline in value, the Portfolio will
be required to pay quarterly, the amount of any depreciation in value from the
notional amount. The equity swap agreement will terminate on August 11, 1996.
22
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
During the term of the equity swap transaction, changes in the value of the
Common Stocks as compared to the Notional amount is recognized as unrealized
gain or loss. Dividend income for the Common Stocks are recorded on the
ex-dividend date. Interest expense is accrued daily. At April 30, 1996, the
Portfolio has recorded an unrealized gain of $778,199 and interest payable of
$36,433 on the equity swap transaction.
6. CAPITAL SHARE TRANSACTIONS
The Fund is authorized to issue up to three billion full and fractional
shares of common stock of separate series having a $.001 par value per share.
Shares of three series have been authorized, which constitute the interest in
the Portfolios.
Transactions in shares of each Portfolio were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY GROWTH
PORTFOLIO PORTFOLIO
--------------------------------------- --------------------
FOR THE PERIOD
DECEMBER 29, 1995
FOR THE SIX (COMMENCEMENT OF
MONTHS ENDED FOR THE OPERATIONS) THROUGH
APRIL 30, 1996 YEAR ENDED APRIL 30, 1996
(UNAUDITED) OCTOBER 31, 1995 (UNAUDITED)
-------------------- ---------------- --------------------
<S> <C> <C> <C>
Shares sold 9,188,484 17,573,932 825,733
Shares issued to shareholders on
reinvestment of dividends 898,044 939,078 0
Shares redeemed (2,222,462) (5,146,019) 0
-------- -------- ------
Net increase in shares
outstanding 7,864,066 13,366,991 825,733
-------- -------- ------
-------- -------- ------
</TABLE>
7. NET ASSETS
Net assets at April 30, 1996, consisted of the following:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY GROWTH
PORTFOLIO PORTFOLIO
-------------------- --------------------
<S> <C> <C>
Capital contributed, net $593,483,584 $ 9,492,797
Accumulated net investment income 8,296,436 221
Accumulated net realized gain from security
transactions 7,624,180 180,469
Net unrealized appreciation from
investments and foreign currency related
items 89,155,941 647,481
----------- ----------
Net assets $698,560,141 $ 10,320,968
----------- ----------
----------- ----------
</TABLE>
23
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
Further information is contained in the Prospectus, which must
precede or accompany this report.
[LOGO]
P.O. BOX 9030, BOSTON, MA 02205-9030
800-WARBURG (800-927-2874)
COUNSELLORS SECURITIES INC., DISTRIBUTOR WPINS-3-0496
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as `D'
The division sign shall be expressed as [div]
