<PAGE>
<PAGE>
ANNUAL
REPORT
October 31, 1996
WARBURG PINCUS INSTITUTIONAL FUND, INC.
- INTERNATIONAL EQUITY PORTFOLIO
- SMALL COMPANY GROWTH PORTFOLIO
- EMERGING MARKETS PORTFOLIO
[Logo]
A Prospectus containing more complete information, including
charges and expenses and, where applicable, the special
considerations and risks associated with international
investing, may be obtained by calling 800-369-2728 or by writing
to Warburg Pincus Funds, P.O. Box 9030, Boston, MA 02205-9030.
Investors should read the Prospectus carefully before investing.
<PAGE>
<PAGE>
The views of the Portfolios' management are as of the date of the letters and
portfolio holdings described in this annual report are as of October 31, 1996;
these views and portfolio holdings may have changed subsequent to these dates.
Nothing in this annual report is a recommendation to purchase or sell
securities.
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: December 11, 1996
The objective of Warburg Pincus Institutional Fund, Inc. -- 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 12 months ended October 31, 1996, the Portfolio gained 10.48%, vs.
gains of 12.65% in the Lipper International Funds Index and 10.47% in the Morgan
Stanley Europe, Australasia and Far East ('EAFE') Index.
The Portfolio's largest country weighting throughout the Period remained
Japan, whose stock market performed well through much of the 12 months but
suffered in the latter part of the period, primarily due to fears that the
country's economic recovery might be faltering. We believe that Japan's recovery
remains very much intact, however, supported by a continued expansionary
monetary policy from the Bank of Japan and, over the longer term, by the ongoing
restructuring of Japanese industry. Accordingly, we maintained the country's
weighting in the Portfolio through the period, as well as our emphasis on the
machinery & industrial components and retail sectors, where we believe some of
the best long-term investment opportunities exist.
We hedged, as a defensive measure, most of the Portfolio's yen exposure
through the period. This had a positive effect on the Portfolio's performance,
as the Japanese currency weakened against the U.S. dollar.
The Portfolio benefited from positive performances from a number of its other
Asian-Pacific stocks. Particularly strong performers for the Portfolio included
selected holdings in Hong Kong and Taiwan. One market that weighed on the
Portfolio's performance during the 12 months was South Korea, which was
negatively impacted by the country's unsettled political climate and by concerns
over a deteriorating trade balance. But South Korean stocks remain inexpensive
and we believe that the market has good prospects for improvement, thus we have
maintained its weighting in the Portfolio. We have also maintained the
Portfolio's general emphasis on Asian-Pacific markets collectively, reflecting
our positive outlook on their longer-term (i.e., three to five-year) prospects.
These economies boast the world's fastest growth rates and the most attractive
fundamentals (e.g., high domestic savings rates, strong currencies and generally
pro-business governmental policies), which should, we believe, result in some
very attractive investment opportunities.
1
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
- --------------------------------------------------------------------------------
European equity markets appreciated strongly during the period, though they
were as a group underweighted versus the index and other international funds.
The Portfolio benefited from this broad-based strength, with particularly
impressive gains coming from German holdings SGL Carbon and Adidas and from its
Nordic stocks collectively. The markets' performance notwithstanding, we
continued to find attractively valued companies on a selective basis across
Europe during the period. Further, we believe that lower interest rates stand to
lead to improved economic growth across the Continent in 1997, resulting in
higher corporate earnings and proportionately more investment opportunities.
Richard H. King
Portfolio Manager
2
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WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- INTERNATIONAL EQUITY PORTFOLIO
SINCE INCEPTION AS OF OCTOBER 31, 1996
The graph below illustrates the hypothetical investment of $10,000 in Warburg
Pincus Institutional Fund, Inc. -- International Equity Portfolio (the
'Portfolio') from September 1, 1992 (inception) to October 31, 1996, compared to
the Morgan Stanley -- Europe, Australasia, and Far East Index ('EAFE')* for the
same time period.
AVERAGE ANNUAL
TOTAL RETURNS
FOR PERIODS ENDED
INSTITUTIONAL INT'L MS-EAFE 10/31/96
Sep-92 10,000 10,000 1 YEAR
Oct-92 9,620.00 9,288.26 10.48%
Oct-93 13,623.27 12,767.90
Oct-94 16,705.24 14,057.77 SINCE INCEPTION
Oct-95 16,232.10 14,006.40 (9/01/92)
Oct-96 17,932.40 15,473.49 15.03%
<TABLE>
<CAPTION>
PORTFOLIO
---------
<S> <C>
1 Year Total Return (9/30/95-9/30/96).................................... 9.11%
Average Annual Total Return Since Inception (9/01/92-9/30/96)............ 15.65%
</TABLE>
Returns are historical and include changes 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.
From time to time, the Fund's 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.
- ------------
* EAFE is an unmanaged index of international equities with no defined
investment objective that is compiled by Morgan Stanley Capital International.
3
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: December 11, 1996
The objective of Warburg Pincus Institutional Fund, Inc. -- Small Company
Growth Portfolio (the 'Portfolio') is capital growth. The Portfolio is a non-
diversified 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 10 months ended October 31, 1996 (the Portfolio's inception date was
December 29, 1995), the Portfolio gained 29.20%, vs. a gain of 9.03% for the
Russell 2000 Index.
The Portfolio's outperformance of its benchmark resulted from good stock
selection across a broad range of industries. Particularly strong gains came
from the Fund's business-services stocks, its largest area of concentration.
Collectively, these companies are benefiting from businesses' cost-cutting and
outsourcing efforts, a dominant theme across Corporate America in recent years
and one that shows few signs of slowing. The Portfolio's holdings include
companies whose prospects we view particularly favorably, and their strong
performance through the reporting period was encouraging.
The Portfolio's technology stocks also contributed positively to its
performance, notwithstanding the sector's broad sell-off in June and July. The
general argument for these stocks -- that technological advances afford
corporations the ability to substitute capital for high-cost labor, permitting
continued profit expansion despite potentially slower top-line growth -- remains
a valid one, hence we will continue to emphasize these stocks in the Portfolio
going forward. Selectivity will remain critical, however, given the industry's
rapid rate of evolution and the resulting potential for new products and
services to quickly become obsolete. We believe that our current holdings are
well-managed companies that are well-positioned strategically within their
respective areas, which augurs well for their stock-price performance on a
long-term basis.
Other significant contributors to the Portfolio's performance during the
period included its holdings in energy and oil services, which also were well-
represented in the Portfolio. One disappointing area for the Portfolio was
health care, a sector that suffered due to investor concerns over pricing and
margin pressures. Nonetheless, we continue to view the group favorably, given
the rapidly aging U.S. population and the potential for proportionally increased
demand for health-care products and services, and we believe that the
Portfolio's specific holdings have particularly good prospects.
<TABLE>
<S> <C>
Elizabeth B. Dater Stephen J. Lurito
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
4
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT (CONT'D)
- --------------------------------------------------------------------------------
GROWTH OF $10,000 INVESTED IN
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO SINCE
INCEPTION AS OF OCTOBER 31, 1996
The graph below illustrates the hypothetical investment of $10,000 in Warburg
Pincus Institutional Fund, Inc. -- Small Company Growth Portfolio (the
'Portfolio') from December 29, 1995 (inception) to October 31, 1996, compared to
the Russell 2000 Index ('Russell')* for the same time period.
AGGREGATE
TOTAL RETURNS
FOR THE PERIOD ENDED
INSTITUTIONAL SMALL CO. MS-EAFE 10/31/96
Dec-95 10,000.00 10,000.00 SINCE INCEPTION
Oct-96 12,920.00 10,903.15 (12/29/95)
29.20%'D'
<TABLE>
<CAPTION>
PORTFOLIO
--------------
<S> <C>
Aggregate Total Return Since Inception (12/29/95-9/30/96)................ 33.00%`D'
</TABLE>
Returns are historical and include changes 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.
From time to time, the Fund's 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.
- ------------
* The Russell 2000 Index is an unmanaged index of the smallest 2,000 securities
in the Russell 3000 Index. The Russell 3000 Index is an index of the 3,000
largest U.S. securities, as determined by total market capitalization.
`D' Non-annualized
5
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<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- EMERGING MARKETS PORTFOLIO
ANNUAL INVESTMENT ADVISER'S REPORT
- --------------------------------------------------------------------------------
Dear Shareholder: December 11, 1996
The objective of Warburg Pincus Institutional Fund, Inc. -- Emerging Markets
Portfolio (the 'Portfolio') is growth of capital. The Portfolio is a non-
diversified investment management company that invests primarily in equity
securities of companies in emerging securities markets around the world.
For the one month ended October 31, 1996 (the Portfolio's inception date was
September 30, 1996), the Portfolio had a total return of - 1.40%*, vs. a total
return of - 2.31% for the Lipper Emerging Markets Funds Index.
We believe that the Portfolio represents an attractive way for long-term
investors to participate in the rapid growth of emerging markets. Emerging-
market economies, collectively, are growing at rates well in excess of those of
developed countries, offering the prospects for proportionately higher
investment returns (albeit at a higher level of volatility). And we believe that
careful stock selection within these markets, encompassing a thorough analysis
of both company fundamentals and country specifics (e.g., economic, political
and currency stability), can lead to particularly attractive results over time,
given the relative inefficiency of these markets.
Our efforts are geared toward identifying the most promising companies within
the rapidly expanding emerging markets. We welcome investors to the Portfolio,
and will strive to provide a rewarding investment experience.
<TABLE>
<S> <C>
Richard H. King Nicholas P.W. Horsley
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
- ------------
* Returns are historical and include changes 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.
From time to time, the Fund's 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.
6
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<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
<S> <C> <C>
COMMON STOCK (93.8%)
Argentina (2.9%)
Banco de Galicia & Buenos Aires SA 127,086 $ 584,025
Banco de Galicia & Buenos Aires SA ADR 58,908 1,067,708
Banco Frances del Rio de la Plata SA 129,030 1,130,369
Banco Frances del Rio de la Plata SA ADR 220,605 5,790,881
Telefonica de Argentina SA ADR 355,300 8,260,725
YPF SA ADR 457,400 10,405,850
------------
27,239,558
------------
Australia (4.2%)
Boral Ltd. 3,734,102 9,288,608
David Jones Ltd. 584,893 801,599
Lend Lease Corp., Ltd. 477,900 8,098,091
Niugini Mining Ltd. `D' 353,750 938,807
Oil Search Ltd. 4,974,890 7,488,105
Pasminco Ltd. 911,000 1,414,521
Qantas Airways Ltd. 3,572,700 5,207,739
Qantas Airways Ltd. ADR 66,200 965,990
Reinsurance Australia Corp., Ltd. 1,788,600 5,355,991
------------
39,559,451
------------
Austria (2.0%)
Boehler-Uddeholm AG 88,239 6,604,045
V.A. Technologie AG 86,868 12,154,505
------------
18,758,550
------------
Belgium (0.5%)
Barco Industries N.V. 28,000 4,606,799
------------
Brazil (1.2%)
Panamerican Beverages, Inc. Class A 255,300 11,137,463
------------
Canada (1.4%)
Alcan Aluminum Ltd. 385,400 12,670,025
------------
Chile (0.3%)
Enersis SA ADR 103,800 3,049,125
------------
</TABLE>
See Accompanying Notes to Financial Statements.
7
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
China (1.3%)
Cheung Kong Infrastructure Holdings Ltd. `D' 1,827,400 $ 3,403,464
Guangshen Railway Co., Ltd. `D' 4,181,053 1,554,707
Guangshen Railway Co., Ltd. ADR `D' 161,021 2,999,016
Henderson China Holding Ltd. `D' 945,500 2,140,053
Jilin Chemical Industrial Co., Ltd. ADR 65,500 859,688
Jilin Chemical Industrial Co., Ltd. Class H 5,656,000 753,480
------------
11,710,408
------------
Denmark (0.8%)
International Service System AS Class B 269,150 7,639,073
------------
Finland (1.5%)
Metra Oy Class B 60,650 3,383,722
Metsa-Serla Class B 574,000 3,990,334
Valmet Corp. Class A 447,500 6,834,172
------------
14,208,228
------------
France (6.8%)
Assurances Generales de France 229,400 6,769,504
Axime (Ex Segin) 34,858 3,731,229
Cetelem 10,908 2,328,799
Compagnie Bancaire SA 63,700 6,357,285
Compagnie Generale Des Eaux `D' 52,900 6,324,977
Fives-Lille (Compagnie De) 26,740 2,422,727
Lagardere S.C.A. 402,764 12,728,736
Total Cie Franc Des Petroles Class B 173,256 13,558,192
Usinor Sacilor SA 644,300 9,563,257
------------
63,784,706
------------
Germany (2.5%)
Adidas AG 30,900 2,603,244
BASF AG 145,000 4,637,241
SGL Carbon AG 80,108 8,882,068
Siemens AG 148,400 7,678,871
------------
23,801,424
------------
</TABLE>
See Accompanying Notes to Financial Statements.
8
<PAGE>
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Hong Kong (4.0%)
Citic Pacific Ltd. 2,296,200 $ 11,166,641
Hong Kong Land Holdings Ltd. 3,875,400 8,642,142
Hong Kong Land Holdings Ltd. ADR 275,000 3,066,250
HSBC Holdings PLC 237,323 4,834,431
HSBC Holdings PLC (UK) 819 17,192
Jardine Matheson Holdings Ltd. 1,678,515 9,483,610
------------
37,210,266
------------
India (1.7%)
Associated Cement Companies Ltd. 8,296 358,481
Bharat Petroleum Corp. Ltd. 59,600 470,704
Hindalco Industries Ltd. 145,125 2,411,232
Hindalco Industries Ltd. GDR 88,650 1,629,387
India Cements Ltd. 20,250 57,220
Reliance Industries Ltd. 524,500 3,001,166
Reliance Industries Ltd. GDS 103,700 1,166,625
State Bank of India 865,050 5,634,191
State Bank of India GDR `D' 100,000 1,510,000
------------
16,239,006
------------
Indonesia (1.4%)
P.T. Bank International Indonesia 1,141,620 1,838,752
P.T. Indosat 83,000 251,326
P.T. Indosat ADR 131,700 3,967,463
P.T. Mulia Industrindo 2,262,120 2,137,513
P.T. Semen Gresik 517,000 1,487,770
P.T. Sinar Mas Multiartha 139,100 140,399
P.T. Telekomunikasi Indonesia 1,661,200 2,479,403
P.T. Telekomunikasi Indonesia ADR 13,100 393,000
------------
12,695,626
------------
Israel (0.9%)
Ampal-American Israel Corp. Class A 233,000 1,106,750
ECI Telecommunications Limited Designs 375,350 7,507,000
------------
8,613,750
------------
</TABLE>
See Accompanying Notes to Financial Statements.
9
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Japan (26.1%)
Canon, Inc. 659,000 $ 12,634,069
Canon, Inc. ADR 25,200 2,428,650
Daibiru Corp. 156,000 1,769,765
Daimaru, Inc. 297,000 1,791,769
DDI Corp. 1,537 11,556,899
East Japan Railway Co. 414 1,904,160
Fujitsu Ltd. 265,000 2,330,490
Hankyu Realty Co., Ltd. 511,000 4,628,705
Hitachi Ltd. 452,750 4,021,436
Honda Motor Co. 435,000 10,405,417
Isuzu Motors Ltd. 1,631,000 8,075,394
Itochu Corp. 215,000 1,298,962
Japan Tobacco Inc. 845 5,974,672
Jusco Co., Ltd. 365,000 10,849,530
Kao Corp. 500 5,892
Kawasaki Heavy Industries 1,925,000 8,820,025
Keyence Corp. 30,000 3,482,543
Kirin Beverage Corp. 144,000 1,924,897
Mitsubishi Corp. 23,000 256,882
Mitsubishi Estate Co., Ltd. 720,000 8,991,294
Mitsubishi Heavy Industries Ltd. 1,074,000 8,264,445
Murata Manufacturing Co., Ltd. 143,290 4,612,096
Mycal Corp. 615,500 9,472,562
Nikko Securities Co., Ltd. 482,000 4,620,350
Nippon Communication Systems Corp. 379,300 4,870,091
Nippon Telephone & Telegraph Corp. 1,317 9,207,206
NKK Corp. `D' 2,999,000 7,542,995
NTT Data Communications Systems Co. 164 4,860,434
Orix Corp. 237,200 8,844,675
Pioneer Electronic Corp. 522,000 10,328,907
Rohm Co., Ltd. 80,000 4,748,923
Sharp Corp. 589,000 8,961,129
Sony Corp. 140,500 8,439,143
Sony Corp. ADR 36,900 2,227,838
TDK Corp. 214,000 12,571,630
Toho Co., Ltd. 25,850 3,978,322
Toray Industries, Inc. 1,294,000 7,817,940
Tsuchiya Home Co. 79,398 1,249,867
Uny Co., Ltd. 277,500 4,807,625
</TABLE>
See Accompanying Notes to Financial Statements.
10
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Japan (cont'd)
West Japan Railway Co. `D' 2,400 $ 7,851,552
Yokogawa Electric 290,000 2,575,851
York-Benimaru Co., Ltd. 107,400 3,532,460
------------
244,537,492
------------
Malaysia (0.2%)
Land & General BHD 171,000 372,328
Westmont Industries BHD 847,200 1,428,770
------------
1,801,098
------------
Mexico (0.5%)
Gruma SA de CV Class B `D' 1,031,100 5,129,787
------------
New Zealand (4.8%)
Brierley Investments Ltd. 8,246,083 7,519,611
Fletcher Challenge Building 3,387,112 9,170,358
Fletcher Challenge Energy 12 34
Fletcher Challenge Forestry 6,250,551 10,427,694
Fletcher Challenge Paper 1,141,025 2,064,872
Lion Nathan Ltd. 3,101,200 8,001,670
Sky City Ltd. `D' 803,275 4,599,464
Wrightson Ltd. 3,271,735 2,867,859
------------
44,651,562
------------
Norway (1.6%)
Den Norske Bank AS 3,155,500 10,489,306
Norsk Hydro AS ADR 98,144 4,502,356
------------
14,991,662
------------
Pakistan (0.1%)
Pakistan Telecommunications Corp. GDR `D' 10,000 770,000
------------
Philippines (0.4%)
Millicom International Cellular SA GDR `D' 89,700 3,565,575
------------
Portugal (1.7%)
Cimpor Cimentos de Portugal SA 233,500 4,909,925
Portugal Telecom SA 251,400 6,540,114
Portugal Telecom SA ADR 168,800 4,367,700
------------
15,817,739
------------
</TABLE>
See Accompanying Notes to Financial Statements.
11
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Singapore (2.0%)
DBS Land Ltd. 2,703,900 $ 8,524,687
Development Bank of Singapore Ltd. 751,562 9,018,957
Development Bank of Singapore Ltd. ADR 34,750 1,667,236
------------
19,210,880
------------
South Korea (3.8%)
Daewoo Electronics Co., Ltd. 684,150 5,562,870
Daewoo Heavy Industries 78,194 597,842
Hana Bank 215,051 3,376,483
Hana Bank (New) 37,237 556,589
Hanil Bank 521,053 4,794,193
Inchon Iron & Steel Co., Ltd. 11,700 252,743
Keum Kang Development Ind. Co. 57,600 971,650
Kookmin Bank GDR `D' 128,000 2,672,000
Korea Electric & Power Co. 63,000 1,857,888
Korea Europe Fund Ltd. 289 903,125
Korea Long Term Credit Bank 89,657 1,936,765
Korea Mobile Telecommunications Corp. 50 50,152
L.G. Construction Ltd. `D' 112,630 2,241,665
Samsung Electronics Co., Ltd. 56,148 3,958,979
Samsung Electronics Co., Ltd. (New) `D' 10,062 689,931
Samsung Electronics Co., Ltd. GDR (Non-Voting) `D' 15,346 329,939
Samsung Electronics Co., Ltd. GDR (Voting) `D' 5,068 233,128
Samsung Heavy Industries Co., Ltd. 41,143 504,301
Samsung Heavy Industries Co., Ltd. (New) `D' 10,908 127,216
Ssangyong Investment & Securities Co., Ltd. `D' 254,520 3,891,932
------------
35,509,391
------------
Spain (3.6%)
Banco de Santander 30,300 1,555,978
Banco de Santander ADR 249,000 12,916,875
Iberdrola SA 1,083,900 11,514,579
Repsol SA ADR 230,100 7,507,013
------------
33,494,445
------------
Sweden (2.3%)
ABB AB Series B 68,700 7,667,854
Astra AB Series B 266,100 12,155,680
Mo Och Domsjo AB Series B 71,000 1,956,816
------------
21,780,350
------------
</TABLE>
See Accompanying Notes to Financial Statements.
12
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Switzerland (2.0%)
ABB AG 5,074 $ 6,282,172
Ciba-Geigy AG B 9,005 11,063,530
Danzas Holding AG 1,369 1,546,310
------------
18,892,012
------------
Taiwan (2.9%)
China Steel Corp. 5,604,000 4,989,026
Hocheng Group Corp. 1,508,800 2,412,326
Phoenixtec Power Co., Ltd. `D' 2,812,440 4,598,830
Tatung Co., Ltd. 3,441,250 6,564,885
Ton Yi Industrial Corp. `D' 5,123,210 6,180,616
Wan Hai Lines Ltd. 1,000,000 2,816,134
------------
27,561,817
------------
Thailand (1.0%)
Bangkok Bank Public Co., Ltd. 210,400 2,249,560
Industrial Finance Corp. of Thailand 1,310,833 3,864,484
Siam Cement Public Co., Ltd. 55,500 1,902,358
Thai Military Bank Public Co., Ltd. 567,360 1,315,811
------------
9,332,213
------------
United Kingdom (7.4%)
AAF Industries PLC `D' 158,700 86,509
British Airport Authority PLC 1,037,712 8,400,611
Cookson Group PLC 3,223,368 11,880,071
Grand Metropolitan PLC 1,020,063 7,693,389
London Pacific Group Ltd. 606,000 2,302,504
Rolls-Royce PLC 2,606,000 10,770,827
Singer & Friedlander Group PLC 1,768,000 3,610,496
TC Group PLC 1,222,900 2,885,359
Thistle Hotels PLC `D' 2,748,652 7,491,616
Trio Holdings PLC `D' 1,648,500 147,534
Vodafone Group PLC 3,597,800 13,904,058
------------
69,172,974
------------
TOTAL COMMON STOCK (Cost $837,257,221) 879,142,455
------------
</TABLE>
See Accompanying Notes to Financial Statements.
13
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------- ------------
PREFERRED STOCK (0.2%)
<S> <C> <C>
South Korea (0.1%)
Samsung Electronics Co., Ltd. 12,134 $ 439,121
Samsung Electronics Co., Ltd. (New) `D' 3,657 127,145
------------
566,266
------------
United Kingdom (0.1%)
Singer & Friedlander Group PLC, 8.50% Convertible 348,947 860,227
------------
TOTAL PREFERRED STOCK (Cost $3,931,007) 1,426,493
------------
RIGHTS & WARRANTS (0.0%)
Hong Kong (0.0%)
Jardine Strategic Holdings Ltd. Wts., 05/02/98 `D' 384,600 14,426
------------
Israel (0.0%)
Ampal-American Israel Corp. Class A Wts., 01/31/99 `D' 95,000 17,813
------------
Japan (0.0%)
Bandai Industries Wts., 11/04/97 `D' 60 15,000
------------
TOTAL RIGHTS & WARRANTS (Cost $341,377) 47,239
------------
CALL OPTIONS (0.1%)
Japan (0.1%)
Topix Index, 03/14/97 (Strike Price 1,539.20) `D' 1,062,727 642,525
------------
New Zealand (0.0%)
Air New Zealand Ltd., 05/01/98 (Strike Price $2.4615)
`D' 3,750,000 37,500
Air New Zealand Ltd., 05/01/98 (Strike Price $2.5895)
`D' 3,750,000 24,750
------------
62,250
------------
South Korea (0.0%)
Kospi 200 Index, 12/04/96 (Strike Price $.126002) `D' 23,296,620 0
Kospi 200 Index, 12/06/96 (Strike Price $.125812) `D' 22,994,313 23
Kospi 200 Index, 12/13/96 (Strike Price $.118539) `D' 31,954,705 863
Kospi 200 Index, 01/24/97 (Strike Price $.108243) `D' 31,894,727 40,698
Kospi 200 Index, 02/07/97 (Strike Price $.110156) `D' 29,827,829 38,299
------------
79,883
------------
TOTAL CALL OPTIONS (Cost $3,072,806) 784,658
------------
</TABLE>
See Accompanying Notes to Financial Statements.
14
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR
-----------
CONVERTIBLE BONDS/NOTES (1.2%)
<S> <C> <C>
Argentina (0.2%)
Banco de Galicia & Buenos Aires SA 7.00%, 08/01/02 $ 1,574,000 $ 1,542,520
------------
Japan (0.6%)
Matsushita Electric Works Ltd. 2.70%, 05/31/02 (A) 521,000,000 5,498,197
------------
New Zealand (0.1%)
Brierley Investments Ltd. 9.00%, 06/30/98 (B) 1,028,875 865,501
------------
Thailand (0.3%)
Bangkok Bank Public Co., Ltd., 3.25%, 03/03/04 $ 3,435,000 3,529,463
------------
TOTAL CONVERTIBLE BONDS/NOTES (Cost $11,745,665) 11,435,681
------------
SHORT-TERM INVESTMENTS (4.2%)
Repurchase agreement with State Street Bank & Trust Co.
dated 10/31/96 at 5.51% to be repurchased at $39,811,092
on 11/01/96. (Collateralized by $40,150,000 U.S. Treasury
Note 6.125%, due 03/31/98. Market value of collateral is
$40,601,688.) (Cost $39,805,000) 39,805,000 39,805,000
------------
TOTAL INVESTMENTS AT VALUE (99.5%) (Cost $896,153,076*) 932,641,526
OTHER ASSETS IN EXCESS OF LIABILITIES (0.5%) 4,801,674
------------
NET ASSETS (100.0%) (applicable to 58,069,977
shares outstanding) $937,443,200
------------
------------
NET ASSET VALUE, offering and redemption price per share
($937,443,200[div]58,069,977) $16.14
------
------
</TABLE>
INVESTMENT ABBREVIATIONS
<TABLE>
<C> <S>
ADR = American Depository Receipt
GDR = Global Depository Receipt
GDS = Global Depository Share
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-income producing security.
* Cost for Federal income tax purposes is $896,226,893.
(A) Denominated in Japanese Yen.
(B) Denominated in New Zealand Dollars.
See Accompanying Notes to Financial Statements.
15
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUNDS, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCK (95.9%)
Banks & Savings & Loans (1.0%)
HUBCO, Inc. 45,011 $ 967,737
------------
Business Services (13.9%)
Abacus Direct Corp.`D' 4,100 107,625
American Management Systems, Inc.`D' 35,300 1,116,363
Catalina Marketing Corp.`D' 19,056 969,474
CCC Information Services Group`D' 42,600 798,750
CDI Corp.`D' 34,129 938,547
Checkpoint System, Inc.`D' 41,629 931,449
Claremont Technology Group, Inc.`D' 26,000 793,000
Daisytek International Corp.`D' 31,654 1,210,764
Getty Communications PLC ADR`D' 62,600 860,750
ICTS International BV`D' 68,800 834,200
International Network Services`D' 1,600 57,200
National Educational Corp.`D' 51,100 830,375
Norrell Corp. 35,412 885,300
Pharmaceutical Product Development, Inc.`D' 45,300 866,363
Professional Staff, Inc. ADR 35,000 341,250
QuickResponse Services, Inc.`D' 26,433 981,325
Wilmar Industries, Inc.`D' 39,700 853,550
XLConnect Solutions, Inc.`D' 3,700 108,225
------------
13,484,510
------------
Capital Equipment (0.9%)
Roper Industries, Inc. 20,127 850,366
Valmont Industries, Inc. 600 20,700
------------
871,066
------------
Communications & Media (2.9%)
Central European Media Enterprises Ltd. Class A`D' 55,147 1,544,116
Harte-Hanks Communications, Inc. 49,850 1,289,869
------------
2,833,985
------------
</TABLE>
See Accompanying Notes to Financial Statements.
16
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUNDS, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Computers (11.7%)
ANSYS, Inc.`D' 29,200 $ 357,700
Arbor Software Corp.`D' 27,400 993,250
Aspect Development, Inc.`D' 32,300 803,462
Citrix Systems, Inc.`D' 33,246 1,836,841
Clarify, Inc.`D' 34,600 1,669,450
Cognex Corp.`D' 50,500 650,187
Integrated Systems, Inc.`D' 32,500 877,500
Intelligroup, Inc.`D' 3,000 47,250
Learning Tree International, Inc.`D' 13,300 561,925
Memco Software Ltd.`D' 7,000 127,750
National Instruments Corp.`D' 35,755 1,019,018
Rational Software Corp.`D' 39,500 1,515,813
Tecnomatix Technologies, Ltd. Ord`D' 51,900 901,763
------------
11,361,909
------------
Consumer Durables (0.8%)
Chicago Miniature Lamp, Inc.`D' 7,700 229,075
Dura Automotive Systems, Inc.`D' 23,200 556,800
------------
785,875
------------
Consumer Non-Durables (3.1%)
Carson, Inc. Class A`D' 10,300 167,375
Central Garden & Pet Co.`D' 42,900 1,013,512
Marker International`D' 28,800 219,600
North Face, Inc.`D' 33,100 670,275
Sola International, Inc.`D' 24,400 881,450
------------
2,952,212
------------
Consumer Services (2.6%)
DeVRY, Inc.`D' 35,526 1,771,859
Veterinary Centers of America, Inc.`D' 40,000 735,000
------------
2,506,859
------------
</TABLE>
See Accompanying Notes to Financial Statements.
17
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUNDS, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Electronics (11.2%)
Analogic Corp. 30,300 $ 825,675
Burr-Brown Corp.`D' 56,823 1,207,489
Epic Design Technology, Inc.`D' 38,200 935,900
Glenayre Technologies, Inc.`D' 43,800 1,127,850
Intelligent Electronics, Inc.`D' 90,000 798,750
Methode Electronics, Inc. Class A 71,697 1,398,092
Microchip Technology, Inc.`D' 19,000 688,750
Photronics, Inc.`D' 32,100 866,700
Sawtek, Inc.`D' 29,700 898,425
Select Software Tools Ltd. ADR`D' 5,000 110,000
Synopsys, Inc.`D' 43,900 1,975,500
------------
10,833,131
------------
Energy (4.2%)
Brown (Tom), Inc.`D' 76,489 1,443,730
Chieftain International, Inc.`D' 40,100 937,337
Texas Meridian Resources Corp.`D' 91,046 1,638,828
------------
4,019,895
------------
Environmental Services (3.2%)
Allied Waste Industries, Inc.`D' 149,297 1,353,004
USA Waste Services, Inc.`D' 53,843 1,722,976
------------
3,075,980
------------
Financial Services (4.7%)
Aames Financial Corp. 26,300 1,173,637
PMT Services, Inc.`D' 45,400 908,000
Transaction Systems Architects, Inc. Class A`D' 46,400 1,925,600
Triad Guaranty, Inc.`D' 17,800 538,450
------------
4,545,687
------------
Healthcare (6.1%)
Ballard Medical Products 41,914 738,734
Core, Inc.`D' 76,600 785,150
EmCare Holdings, Inc.`D' 49,918 1,247,950
Endosonics Corp.`D' 27,900 352,237
Endovascular Technologies, Inc.`D' 66,600 699,300
IDX Systems Corp.`D' 32,933 971,524
InControl, Inc.`D' 62,100 504,563
Nitinol Medical Technologies, Inc.`D' 15,200 159,600
Physician Reliance Network, Inc.`D' 72,300 424,763
Trex Medical Corp.`D' 790 13,924
------------
5,897,745
------------
</TABLE>
See Accompanying Notes to Financial Statements.
18
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUNDS, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Industrial Mfg. & Processing (0.8%)
Elbit Vision Systems, Inc.`D' 44,300 $ 265,800
Waters Corp.`D' 17,900 554,900
------------
820,700
------------
Leisure & Entertainment (2.8%)
Family Golf Centers, Inc.`D' 41,500 1,219,063
Golden Bear Golf, Inc.`D' 3,200 57,600
Premier Parks, Inc.`D' 46,500 1,476,374
------------
2,753,037
------------
Lodging & Restaurants (2.1%)
Doubletree Corp.`D' 30,224 1,225,961
Planet Hollywood International, Inc. Class A`D' 39,000 809,250
------------
2,035,211
------------
Oil Services (5.3%)
Forcenergy Gas Exploration, Inc.`D' 35,000 958,125
Global Industry Ltd.`D' 65,900 1,186,200
Input/Output, Inc.`D' 50,000 1,487,500
Petroleum Geo Services ADR`D' 44,531 1,525,187
------------
5,157,012
------------
Pharmaceuticals (4.3%)
Applied Analytical Industries, Inc.`D' 2,000 43,500
EntreMed, Inc.`D' 400 6,100
Gilead Sciences, Inc.`D' 44,035 1,029,318
Ligand Pharmaceuticals, Inc. Class B`D' 79,918 988,985
NaPro Biotherapeutics, Inc.`D' 42,000 383,250
Regeneron Pharmaceuticals, Inc.`D' 49,800 946,200
Serologicals Corp.`D' 24,400 744,200
------------
4,141,553
------------
Real Estate (2.7%)
Fairfield Communities, Inc.`D' 30,000 641,250
NHP, Inc.`D' 72,598 1,197,867
U.S. Restaurant Properties Master Limited Partnership 31,600 738,650
------------
2,577,767
------------
Retail (3.3%)
Borders Group, Inc.`D' 45,000 1,417,500
Kenneth Cole Productions, Inc. Class A`D' 51,000 841,500
Stage Stores, Inc.`D' 10,000 182,500
Urban Outfitters, Inc.`D' 48,500 763,875
------------
3,205,375
------------
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUNDS, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
---------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Telecommunications & Equipment (5.0%)
Brooks Fiber Properties, Inc.`D' 34,000 $ 998,750
Intermedia Communications of Florida, Inc.`D' 39,500 1,264,000
InterVoice, Inc.`D' 60,000 780,000
Teledata Communications Ltd.`D' 61,000 968,375
Tollgrade Communications, Inc.`D' 31,600 821,600
------------
4,832,725
------------
Transportation (3.3%)
Coach USA, Inc.`D' 16,700 455,075
Heartland Express, Inc.`D' 48,450 1,065,900
Mark VII, Inc.`D' 63,631 1,662,360
------------
3,183,335
------------
TOTAL COMMON STOCK (Cost $89,632,782) 92,843,306
------------
<CAPTION>
PAR
----------
SHORT-TERM INVESTMENTS (8.3%)
<S> <C> <C>
Repurchase agreement with State Street Bank & Trust Co.
dated 10/31/96 at 5.51% to be repurchased at $8,067,235 on
11/01/96. (Collateralized by $8,140,000 U.S. Treasury Note
6.125%, due 03/31/98. Market value of collateral is
$8,231,575.) (Cost $8,066,000) $8,066,000 8,066,000
------------
TOTAL INVESTMENTS AT VALUE (104.2%) (Cost $97,698,782*) 100,909,306
LIABILITIES IN EXCESS OF OTHER ASSETS (4.2%) (4,082,223)
------------
NET ASSETS (100.0%) (applicable to 7,493,639 shares outstanding) $ 96,827,083
------------
------------
NET ASSET VALUE, offering and redemption price per share
($96,827,083[div]7,493,639) $12.92
------
------
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-income producing security.
* Cost for Federal income tax purposes is $97,708,244.
See Accompanying Notes to Financial Statements.
20
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCK (87.2%)
Argentina (5.4%)
Disco SA ADR `D' 26,900 $ 605,250
YPF SA ADR 44,000 1,001,000
------------
1,606,250
------------
Australia (5.4%)
Oil Search Ltd. 665,300 1,001,396
Orogen Minerals Ltd. GDR `D' 38,000 601,806
------------
1,603,202
------------
Brazil (4.2%)
Centrais Electricas de Santa Catarina SA GDR `D' 14,800 1,246,900
------------
Chile (6.8%)
Enersis SA ADR 31,000 910,625
Santa Isabel SA ADR 39,000 1,096,875
------------
2,007,500
------------
China (2.3%)
Cheung Kong Infrastructure Holdings Ltd. `D' 364,000 677,936
------------
Egypt (2.2%)
Commercial International Bank Ltd. GDR `D' 44,600 646,700
------------
Hong Kong (5.2%)
Hong Kong Land Holdings Ltd. ADR 257,000 573,110
Wing Hang Bank Ltd. 237,000 953,309
------------
1,526,419
------------
India (5.2%)
Hindalco Industries Ltd. GDR 41,300 759,094
State Bank of India Ltd. GDR `D' 52,000 785,200
------------
1,544,294
------------
Indonesia (6.7%)
P.T. Bank Nisp 546,000 606,797
P.T. Indosat ADR 46,300 1,394,788
------------
2,001,585
------------
Israel (3.9%)
ECI Telecommunications Limited Designs 58,000 1,160,000
------------
Malaysia (2.5%)
Land and General BHD 344,000 749,010
------------
Philippines (4.8%)
Millicom International Cellular SA ADR `D' 36,000 1,431,000
------------
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
--------- ------------
COMMON STOCK (CONT'D)
<S> <C> <C>
Portugal (3.1%)
Cimpor-Cimentos de Portugal SA 44,300 $ 931,519
------------
Singapore (6.5%)
DBS Land Ltd. 338,000 1,065,625
Development Bank of Singapore Ltd. 73,000 876,021
------------
1,941,646
------------
South Korea (5.7%)
Keum Kang Development Ind. Co. `D' 34,400 580,291
Kookmin Bank GDR `D' 26,000 542,750
Korea Electric & Power Co. 19,000 560,316
------------
1,683,357
------------
Taiwan (7.7%)
Pacific Electrical Wire and Cable Co. `D' 916,000 765,552
Tatung Co., Ltd. 254,000 484,557
Ton Yi Industrial Corp.`D' 394,400 475,802
Wan Hai Lines Co., Ltd. 195,000 549,146
------------
2,275,057
------------
Thailand (9.0%)
Industrial Finance Corp. of Thailand 82,000 241,745
Jasmine International Public Co., Ltd. 104,000 286,164
Ruam Pattana Fund II 2,365,500 1,092,556
Siam Cement Public Co., Ltd. 17,000 582,704
Thai Military Bank Public Co., Ltd. 197,000 456,879
------------
2,660,048
------------
Zimbabwe (0.6%)
Trans Zambesi Industries GDR 84,000 172,200
------------
TOTAL COMMON STOCK (Cost $26,089,082) 25,864,623
------------
CALL OPTIONS (0.3%)
South Korea (0.1%)
Kospi 200 Index, 04/11/97 (Strike Price .105651) `D' 9,808,421 39,038
------------
Thailand (0.2%)
Set Index, 04/11/97 (Strike Price 36.683445) `D' 31,995 60,344
------------
TOTAL CALL OPTIONS (Cost $200,000) 99,382
------------
</TABLE>
See Accompanying Notes to Financial Statements.
22
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. --
EMERGING MARKETS PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONVERTIBLE BONDS (6.8%) PAR VALUE
--------- ------------
<S> <C> <C>
China (2.9%)
Henderson Capital International 5.00%, 03/28/97 $1,005,000 $ 869,325
------------
South Korea (3.9%)
Samsung Electronics Co., Ltd. 0.25%, 12/31/06 1,075,000 1,158,312
------------
TOTAL CONVERTIBLE BONDS (Cost $2,141,831) 2,027,637
------------
SHORT-TERM INVESTMENTS (6.8%)
Repurchase agreement with State Street Bank & Trust Co.,
dated 10/31/96 at 5.51% to be repurchased at $2,020,309 on
11/01/96. (Collateralized by $2,005,000 U.S. Treasury Note
6.00%, due 05/31/98. Market value of collateral is
$2,064,372.) (Cost $2,020,000) 2,020,000 2,020,000
------------
TOTAL INVESTMENTS AT VALUE (101.1%) (Cost $30,450,913*) 30,011,642
LIABILITIES IN EXCESS OF OTHER ASSETS (1.1%) (313,520)
------------
NET ASSETS (100.0%) (applicable to 3,012,008 shares outstanding) $ 29,698,122
------------
------------
NET ASSET VALUE, offering and redemption price per share
($29,698,122[div]3,012,008) $9.86
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-income producing security.
* Also cost for Federal income tax purposes.
See Accompanying Notes to Financial Statements.
23
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH PORTFOLIO EMERGING MARKETS PORTFOLIO
------------------------------ ---------------------------
INTERNATIONAL EQUITY PORTFOLIO FOR THE PERIOD FOR THE PERIOD
------------------------------ DECEMBER 29, 1995 SEPTEMBER 30, 1996
FOR THE (COMMENCEMENT OF (COMMENCEMENT OF
YEAR ENDED OPERATIONS) THROUGH OPERATIONS) THROUGH
OCTOBER 31, 1996 OCTOBER 31, 1996 OCTOBER 31, 1996
------------------------------ ------------------------------ ---------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 14,328,000 $ 32,544 $ 8,995
Interest 1,587,858 209,964 57,226
Foreign taxes withheld (1,830,522) (50) (1,732)
---------- -------- -------
Total investment income 14,085,336 242,458 64,489
---------- -------- -------
EXPENSES:
Investment advisory 5,644,429 268,768 21,487
Administrative services 1,408,094 59,726 4,727
Audit 30,996 13,674 12,000
Custodian/Sub-Custodian 516,854 35,528 11,004
Directors 5,625 1,875 208
Insurance 16,248 326 0
Interest 131,146 0 0
Legal 78,927 7,505 3,000
Offering/Organizational
Costs 23,819 65,575 6,231
Printing 8,084 8,798 3,000
Registration 162,495 34,209 9,621
Transfer Agent 15,421 886 500
Miscellaneous 21,272 6,944 2,000
---------- -------- -------
8,063,410 503,814 73,778
Less fees waived and
expenses reimbursed (1,360,650) (207,359) (46,919)
---------- -------- -------
Total expenses 6,702,760 296,455 26,859
---------- -------- -------
Net investment income
(loss) 7,382,576 (53,997) 37,630
---------- -------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY RELATED
ITEMS:
Net realized gain (loss)
from security transactions 19,372,193 (783,063) (5,175)
Net realized gain from
foreign currency related
items 21,564,400 0 5,335
Net change in unrealized
appreciation
(depreciation) from
investments and foreign
currency related items 4,818,352 3,210,524 (439,668)
---------- -------- -------
Net realized and unrealized
gain (loss) from
investments and foreign
currency related items 45,754,945 2,427,461 (439,508)
---------- -------- -------
Net increase (decrease) in
net assets resulting from
operations $ 53,137,521 $2,373,464 $(401,878)
---------- -------- -------
---------- -------- -------
</TABLE>
See Accompanying Notes to Financial Statements.
24
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY GROWTH PORTFOLIO EMERGING MARKETS PORTFOLIO
PORTFOLIO ------------------------------ --------------------------
----------------------------- FOR THE PERIOD FOR THE PERIOD
DECEMBER 29, 1995 SEPTEMBER 30, 1996
FOR THE YEAR ENDED (COMMENCEMENT OF (COMMENCEMENT OF
OCTOBER 31, OPERATIONS) THROUGH OPERATIONS) THROUGH
1996 1995 OCTOBER 31, 1996 OCTOBER 31, 1996
------------ ------------ ------------------------------ --------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income
(loss) $ 7,382,576 $ 4,659,886 $ (53,997) $ 37,630
Net realized gain
(loss) from security
transactions 19,372,193 (1,094,116) (783,063) (5,175)
Net realized gain from
foreign currency
related items 21,564,400 3,076,737 0 5,335
Net change in
unrealized
appreciation
(depreciation) from
investments and
foreign currency
related items 4,818,352 (6,017,482) 3,210,524 (439,668)
------------ ------------ ---------- ----------
Net increase
(decrease) in net
assets resulting
from operations 53,137,521 625,025 2,373,464 (401,878)
------------ ------------ ---------- ----------
FROM DISTRIBUTIONS:
Dividends from net
investment income (17,882,333) (3,614,605) 0 0
Distributions from
realized gains 0 (11,710,991) 0 0
------------ ------------ ---------- ----------
Net decrease in
net assets from
distributions (17,882,333) (15,325,596) 0 0
------------ ------------ ---------- ----------
FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from sale of
shares 430,798,265 253,425,787 94,452,619 30,000,000
Reinvested dividends 13,380,860 13,607,235 0 0
Net asset value of
shares redeemed (49,750,004) (75,870,772) 0 0
------------ ------------ ---------- ----------
Net increase in
net assets from
capital share
transactions 394,429,121 191,162,250 94,452,619 30,000,000
------------ ------------ ---------- ----------
Net increase in
net assets 429,684,309 176,461,679 96,826,083 29,598,122
NET ASSETS:
Beginning of period 507,758,891 331,297,212 1,000 100,000
------------ ------------ ---------- ----------
End of period $937,443,200 $507,758,891 $ 96,827,083 $ 29,698,122
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
</TABLE>
See Accompanying Notes to Financial Statements.
25
<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 YEAR ENDED SEPTEMBER 1, 1992
OCTOBER 31, (COMMENCEMENT OF
--------------------------------------- OPERATIONS) THROUGH
1996 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 0.26 0.15 0.17 0.10 0.02
Net Gain/(Loss) from Securities and Foreign
Currency Related Items (both realized and
unrealized) 1.28 (0.64) 2.87 3.87 (0.40)
------ ------ ------ ------ -----
Total from Investment Operations 1.54 (0.49) 3.04 3.97 (0.38)
------ ------ ------ ------ -----
Less Distributions:
Dividends from net investment income (0.50) (0.18) (0.07) (0.10) 0.00
Distributions from net realized capital gains 0.00 (0.57) (0.12) 0.00 0.00
------ ------ ------ ------ -----
Total Distributions (0.50) (0.75) (0.19) (0.10) 0.00
------ ------ ------ ------ -----
NET ASSET VALUE, END OF PERIOD $16.14 $15.10 $16.34 $13.49 $ 9.62
------ ------ ------ ------ -----
------ ------ ------ ------ -----
Total Return 10.48% (2.83%) 22.62% 41.61% (3.80%)`D'
RATIOS /SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $937,443 $507,759 $331,297 $109,280 $18,613
Ratios to average daily net assets:
Operating expenses 0.95% 0.95% 0.95% 0.95% 0.95%*
Net investment income 1.05% 1.20% 0.59% 0.75% 1.22%*
Decrease reflected in above operating expense
ratios due to waivers/reimbursements. 0.19% 0.23% 0.29% 0.44% 0.85%*
Portfolio Turnover Rate 29.91% 39.70% 19.34% 19.40% 8.25%`D'
Average Commission Rate # $.0154 -- -- -- --
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
# Calculated 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.
TAX STATUS OF 1996 DIVIDENDS (Unaudited)
Dividends paid by the Portlfolio taxable as ordinary income amounted to $.50 per
share.
Because the Portfolio's fiscal year is not the calendar year, amounts to be used
by calendar year taxpayers on their Federal return will be reflected on Form
1099-DIV and will be mailed in January 1997.
26
<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
OCTOBER 31, 1996
-------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
-----
Income from Investment Operations:
Net Investment Loss (0.01)
Net Gain on Securities
(both realized and unrealized) 2.93
-----
Total from Investment Operations 2.92
-----
NET ASSET VALUE, END OF PERIOD $ 12.92
-----
-----
Total Return 29.20%`D'
RATIOS /SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $96,827
Ratios to average daily net assets:
Operating expenses 0.99%*
Net investment loss (0.18%)*
Decrease reflected in above operating expense ratios due to
waivers/reimbursements 0.69%*
Portfolio Turnover Rate 57.38%`D'
Average Commission Rate # $ .0560
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
# Calculated 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.
27
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- EMERGING MARKETS PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout the Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
(COMMENCEMENT OF
OPERATIONS)
THROUGH
OCTOBER 31, 1996
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.00
-----
Income from Investment Operations:
Net Investment Income 0.01
Net Loss on Securities (both realized and unrealized) (0.15)
-----
Total from Investment Operations (0.14)
-----
NET ASSET VALUE, END OF PERIOD $ 9.86
-----
-----
Total Return (1.40%)`D'
RATIOS /SUPPLEMENTAL DATA:
Net Assets, End of Period (000s) $29,698
Ratios to average daily net assets:
Operating expenses 1.25%*
Net investment income 1.75%*
Decrease reflected in above operating expense ratios due to
waivers/reimbursements 2.18%*
Portfolio Turnover Rate 2.39%`D'
Average Commission Rate # $ .0120
</TABLE>
- --------------------------------------------------------------------------------
`D' Non-Annualized
* Annualized
# Calculated 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.
28
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Institutional Fund, Inc. (the 'Fund') is an open-end
management investment company and currently offers four 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;
Global Fixed Income Portfolio, which as of October 31, 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; and Emerging Markets Portfolio, which commenced operations on September
30, 1996, seeks growth of capital by investing primarily in equity securities of
companies in emerging securities markets.
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.
29
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
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 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 Fund, together with other Warburg-advised funds (collectively the
'Warburg Funds'), has established committed and uncommitted line of credit
facilities with certain banks for temporary or emergency purposes primarily
relating to fund share redemptions and funding payments of dividend or capital
gain distributions. Under the terms of the committed line of credit, the Warburg
Funds with access to the facility pay a commitment fee at a rate of .10% per
annum on the amount of the line of credit. In addition, under the terms of both
the committed and uncommitted facilities, the Warburg Funds will pay interest on
borrowings at the banks base rate plus .55%. Aggregate borrowings for each fund
under these credit facilities may not exceed the lower of (a) the maximum amount
permitted by such fund's investment policies and restrictions or (b) thirty
three and one-third percent (33 1/3%) of such fund's total assets. At October
31, 1996 there were no outstanding balances under these line of credit
facilities for any of the Portfolios.
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
30
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
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 October 31, 1996, the International Equity
Portfolio, the Small Company Growth Portfolio and the Emerging Markets Portfolio
had credits or reimbursements of $58,005, $202 and $0, 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
Emerging Markets 1.00% of average daily net assets
</TABLE>
For the period ended October 31, 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 $5,644,429 $(1,182,795) $4,461,634 $ 0
Small Company Growth 268,768 (122,453) 146,315 (74,803)
Emerging Markets 21,487 (21,487) 0 (22,854)
</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 October
31, 1996, administrative services fees earned by CFSI were as follows:
<TABLE>
<CAPTION>
PORTFOLIO CO-ADMINISTRATION FEE
- ------------------------------------------------------ ---------------------
<S> <C>
International Equity $ 705,554
Small Company Growth 29,863
Emerging Markets 2,149
</TABLE>
For its administrative services for the Small Company Growth Portfolio, PFPC
currently receives a fee calculated at an annual rate of .10% on each Fund's
first $500 million in average daily net assets, .075% on the next $1 billion in
average daily net assets and .05% of average daily net assets in excess of $1.5
billion. For
31
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR (CONT'D)
the International Equity Portfolio and the Emerging Markets 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 October 31, 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 $ 702,540 $(119,850) $ 582,690
Small Company Growth 29,863 (9,901) 19,962
Emerging Markets 2,578 (2,578) 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 October 31,
1996 (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- ------------------------------------------------ ------------ ------------
<S> <C> <C>
International Equity $583,800,645 $200,686,055
Small Company Growth 108,756,717 18,332,136
Emerging Markets 28,751,679 334,650
</TABLE>
At October 31, 1996, the net unrealized appreciation from investments for
those securities having an excess of value over cost and net depreciation from
investments for those securities having an excess of cost over value (based on
cost for Federal income tax purposes) was as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION)
- ------------------------------------ ------------ ------------ --------------
<S> <C> <C> <C>
International Equity $94,324,502 $(57,909,869) $ 36,414,633
Small Company Growth 8,530,062 (5,329,000) 3,201,062
Emerging Markets 540,230 (979,501) (439,271)
</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
32
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
any gains or losses are recorded for financial statement purposes as unrealized
until the contract settlement date.
At October 31, 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 03/05/97 203,400,000 $ 39,995,281 $ 40,089,087 $ (93,806)
German Marks 04/02/97 72,366,816 48,000,000 48,292,836 (292,836)
Japanese Yen 10/24/97 6,535,619,300 61,000,000 60,458,398 541,602
Japanese Yen 10/24/97 5,900,180,000 55,000,000 54,580,203 419,797
Japanese Yen 10/24/97 5,252,751,000 49,000,000 48,591,097 408,903
------------ ------------ --------
$252,995,281 $252,011,621 $ 983,660
------------ ------------ --------
------------ ------------ --------
</TABLE>
5. 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>
SMALL COMPANY GROWTH EMERGING MARKETS
PORTFOLIO PORTFOLIO
INTERNATIONAL EQUITY -------------------- --------------------
PORTFOLIO FOR THE PERIOD FOR THE PERIOD
----------------------------------- DECEMBER 29, 1995 SEPTEMBER 30, 1996
FOR THE YEAR FOR THE (COMMENCEMENT OF (COMMENCEMENT OF
ENDED YEAR ENDED OPERATIONS) THROUGH OPERATIONS) THROUGH
OCTOBER 31, 1996 OCTOBER 31, 1995 OCTOBER 31, 1996 OCTOBER 31, 1996
---------------- ---------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Shares sold 26,659,175 17,573,932 7,493,539 3,002,008
Shares issued
to
shareholders
on
reinvestment
of dividends 898,044 939,078 0 0
Shares
redeemed (3,123,266) (5,146,019) 0 0
-------- -------- ------- -------
Net increase
in shares
outstanding 24,433,953 13,366,991 7,493,539 3,002,008
-------- -------- ------- -------
-------- -------- ------- -------
</TABLE>
33
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1996
- --------------------------------------------------------------------------------
6. NET ASSETS
Net assets at October 31, 1996, consisted of the following:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SMALL COMPANY GROWTH EMERGING MARKETS
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------- -------------------- ----------------
<S> <C> <C> <C>
Capital contributed, net $866,043,910 $ 94,399,622 $ 30,100,000
Accumulated net investment
income 18,518,234 0 42,965
Accumulated net realized gain
(loss) from security
transactions 15,533,772 (783,063) (5,175)
Net unrealized appreciation
(depreciation) from
investments and foreign
currency related items 37,347,284 3,210,524 (439,668)
----------- ---------- ----------------
Net assets $937,443,200 $ 96,827,083 $ 29,698,122
----------- ---------- ----------------
----------- ---------- ----------------
</TABLE>
7. CAPITAL LOSS CARRYOVER
At October 31, 1996, the Small Company Growth Portfolio and the Emerging
Markets Portfolio had capital loss carryovers of $773,601 and $5,175,
respectively, expiring in 2004 to offset possible future capital gains.
34
<PAGE>
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Directors, Trustees and Shareholders of
WARBURG PINCUS INSTITUTIONAL FUND
We have audited the accompanying statements of net assets of the Warburg Pincus
Institutional Fund, Inc. -- International Equity Portfolio, Small Company Growth
Portfolio and Emerging Markets Portfolio (all portfolios collectively referred
to as the 'Warburg Pincus Institutional Fund') as of October 31, 1996, and the
related statements of operations for the year (or periods) then ended, and the
statements of changes in net assets for each of the two years (or periods) in
the period then ended and the financial highlights for each of the four years
(or periods) in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights of the Warburg Pincus
Institutional Fund, Inc. -- International Equity Portfolio for the period ended
October 31, 1992, were audited by other auditors, whose report dated December
15, 1992, expressed an unqualified opinion.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Warburg Pincus Institutional Fund as of October 31, 1996, and the results of its
operations for the year (or periods) then ended, and the changes in its net
assets for each of the two years (or periods) in the period then ended and the
financial highlights for each of the four years (or periods) in the period then
ended, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
December 18, 1996
35
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as 'D'
The division sign shall be expressed as [div]
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
[Logo]
P.O. BOX 9030, BOSTON, MA 02205-9030
800-369-2728
COUNSELLORS SECURITIES INC., DISTRIBUTOR WPINS-2-1096
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as `D'
The division sign shall be expressed as [div]
