SEMIANNUAL
REPORT
April 30, 1999
WARBURG PINCUS INSTITUTIONAL FUND, INC.
o VALUE PORTFOLIO
o SMALL COMPANY VALUE PORTFOLIO
o SMALL COMPANY GROWTH PORTFOLIO
o POST-VENTURE CAPITAL PORTFOLIO
More complete information about the portfolios, including charges and expenses,
is provided in the Prospectus, which must precede or accompany this document
and which should be read carefully before investing. You may obtain additional
copies by calling 800-222-8977 or by writing to Warburg Pincus Funds, P.O. Box
9030, Boston, MA 02205-9030.
[WARBURG PINCUS FUNDS GRAPHIC]
<PAGE>
From time to time, the portfolios' investment adviser and co-administrator may
waive some fees and/or reimburse some expenses, without which performance would
be lower. Waivers and/or reimbursements are subject to change.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
than original cost.
The views of the portfolios' management are as of the date of the letters and
holdings described in this document are as of April 30, 1999; these views and
holdings may have changed subsequent to these dates. Nothing in this document is
a recommendation to purchase or sell securities.
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND -- VALUE PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Institutional Fund --
Value Portfolio had a gain of 20.85%, vs. a gain of 22.32% for the S&P 500
Index.* The portfolio's one-year return through April 30, 1999 was 11.65%. Its
since-inception (on June 30, 1997) average annual total return through April 30,
1999 was 20.65%.
The period was a positive one for the U.S. stock market as a whole. Buoyed by
better-than-expected economic data and continued subdued inflation, most major
domestic stock indexes rallied to finish the six months standing at or near
all-time highs. Notably, while a relatively small group of large-cap growth
stocks paced the market's advance through most of the period, investors
"rotated" heavily toward value-type stocks (including recently out-of-favor
cyclical stocks) in April. This may or may not imply a longer-term trend, but we
view the recent broadening of the market's rally as a welcome development, and a
sign that investors are focusing more intensely on valuations, both on an
absolute and relative basis.
Against this backdrop, the portfolio had a positive return, performing roughly
in line with its benchmark. The portfolio trailed its benchmark by a fairly
significant margin through much of the six months, but ended the period on a
strong note, reflecting the April rally in value stocks.
We made no noteworthy changes to the portfolio during the period in terms of
broad strategies. We continued to emphasize companies with good cash flows and
improving longer-term earnings potential, due, for example, to a restructuring
or to the launch of new products or services. In terms of sector strategies, we
remained well-diversified, seeing little incentive to aggressively overweight
any particular areas. That said, we significantly increased our weighting in the
financial area, with a particular focus on bank stocks. We took advantage of
weakness in the area (largely caused by concerns, late last year, that slowing
economic growth would have a negative impact on credit quality) to add a number
of bank stocks we deemed to be attractively priced.
We also raised our exposure to cyclical stocks, primarily by adding to our
weighting in the capital-equipment sector. Stocks we purchased included
agricultural-equipment manufacturers that we judged to have improving earnings
prospects.
- ------------------
* The S&P 500 Index is an unmanaged index (with no defined investment objective)
of common stocks, includes reinvestment of dividends, and is a registered
trademark of McGraw-Hill Co., Inc.
1
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WARBURG PINCUS INSTITUTIONAL FUND -- VALUE PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
Sector weightings we lowered during the period included food, beverages &
tobacco, reflecting our valuation-based decision to eliminate certain positions
here as well as our desire to further increase our weighting in cyclical-type
stocks. Another area we de-emphasized was the telecommunications & equipment
sector, also due to generally high valuations in the sector.
Looking ahead, we believe that, the market's generally high valuations
notwithstanding, many attractive investment opportunities exist. In this
context, we will continue to strive to identify stocks that we deem to be
fundamentally undervalued, based on factors such as price-to-book and debt-
to-equity ratios.
Brian S. Posner
Portfolio Manager
2
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND -- SMALL COMPANY VALUE PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Institutional Fund --
Small Company Value Portfolio had a gain of 1.21%, vs. a gain of 15.17% for the
Russell 2000 Index.* The portfolio's one-year return through April 30, 1999 was
- -22.34%. Its since-inception (on October 31, 1997) average annual total return
through April 30, 1999 was -13.28%.
The reporting period was a difficult one for the portfolio's holdings and,
more broadly, the underfollowed small-capitalization stocks targeted by the
portfolio. While investors warmed to small caps collectively, thanks to three
Federal Reserve interest-rate cuts late last year, they focused almost
exclusively on the group's better-known growth stocks, especially its technology
names. (The growth component of the Russell 2000 Index outperformed the value
component by about 20 percentage points during the period.) This preference for
growth stocks clearly hampered the portfolio (though small-cap value stocks did
manage to finish the period on a bright note). Also weighing on the portfolio
was weakness in certain areas, most specifically the financial area, which was
hindered by growing fears that a strong economy would prompt the Federal Reserve
to reverse course and raise short-term rates.
The portfolio's disappointing performance for the six months not-
withstanding, we believe that adherence to strict value disciplines stands to
benefit investors over time. In this context, we made no material changes to the
portfolio during the period in terms of broad strategies. We remained focused on
underfollowed, undervalued stocks that we believe stand to receive wider market
recognition over the longer term, due, e.g., to improving cash flows.
With respect to sector allocation, we made few significant changes to the
portfolio through the period, though we did make a number of adjustments. One
was to increase our exposure to consumer stocks, broadly defined. We added
several consumer-type stocks we deemed to represent good value against an
improving economic backdrop.
- ------------------
* The Russell 2000 Index is an unmanaged index (with no defined investment
objective) of approximately 2,000 small-cap stocks, includes reinvestment of
dividends, and is compiled by Frank Russell Company.
3
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WARBURG PINCUS INSTITUTIONAL FUND -- SMALL COMPANY VALUE PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999 (CONT'D)
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We also purchased several energy stocks, an area we largely avoided throughout
1998 due to our concerns regarding commodity prices. Our decision to add some
energy exposure reflected our more-positive view of the industry's fundamentals
(specifically, the stabilization of oil prices early this year and the prospects
for production cuts by both OPEC and non-OPEC countries). Our focus here was on
oil-services companies specializing in maintenance services (which tend to have
more-stable cash flows compared to companies that focus on, for example, rig
construction).
Looking ahead, we are optimistic regarding the longer-term prospects for
small-cap stocks, both in absolute and relative terms. Notably, valuations on
these stocks remain historically compelling compared to those on large-cap
stocks. In addition, the earnings outlook for most of these companies appears
likely to remain healthy, at minimum, supported by the strong economy. Set
within this environment, we will continue to strive to identify underfollowed
stocks we deem to have the best longer-term appreciation potential, focusing on
factors such as price-to-book and price-to-cash flow ratios.
Kyle F. Frey
Portfolio Manager
Investing in small companies entails special risk considerations. These are
detailed in the Prospectus, which should be read carefully before investing.
4
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND -- SMALL COMPANY GROWTH PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Institutional Fund --
Small Company Growth Portfolio had a gain of 13.58%, vs. a gain of 25.74% for
the Russell 2000 Growth Index.* The portfolio's one-year return through April
30, 1999 was -14.88%. Its since-inception (on December 29, 1995) average annual
total return through April 30, 1999 was 12.09%. Note: Effective March 31, 1999,
Elizabeth B. Dater and Sammy Oh serve as Co-Portfolio Managers of the portfolio.
Stephen J. Lurito, formerly Portfolio Manager, continues to serve as
Co-Portfolio Manager.
MANAGER COMMENTARY
Small-cap stocks rallied during the six months, supported by a buoyant
domestic economy, a series of Federal Reserve interest-rate cuts, and a
perception that financial conditions abroad were improving. All told, this
increased investors' willingness to assume more risk in pursuit of potentially
higher longer-term rewards, to the benefit of small caps, in particular growth-
oriented small caps.
Against this backdrop, the portfolio had a positive return, yet trailed its
benchmark for the six months. The portfolio performed roughly in line with its
benchmark through much of the period, but lagged in April, due largely to its
avoidance of certain larger-cap Internet stocks that finished the period on a
strong note. While this clearly hampered the portfolio, we continued to view
those stocks as expensive based on their long-term growth prospects.
We made few material changes to the portfolio during the period with respect
to overall strategies. We continued to emphasize companies offering
productivity-enhancing products and services (including outsourcing services),
as well as those standing to benefit from higher levels of discretionary income.
In terms of sector/industry emphasis, our largest areas of concentration
remained the technology, business-services, leisure & entertainment and
communications areas. One sector weighting we lowered was financial services,
reflecting profit-taking in specific issues.
Looking ahead, we remain optimistic regarding the longer-term prospects for
small-cap stocks, for several reasons. Foremost, despite the group's recent
- ------------------
* The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater-than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell Company.
5
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WARBURG PINCUS INSTITUTIONAL FUND -- SMALL COMPANY GROWTH PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
rally, valuations on small caps remain well below those on large-cap stocks.
Buttressing these valuations is the potential for a brighter earnings picture,
given the ongoing health of the U.S. economy (most small-cap companies are
domestically oriented businesses, in contrast to large-cap companies, many of
which derive a substantial portion of their revenues from overseas operations).
Set within this environment, we will continue to strive to identify stocks that
we deem to have the best long-term growth prospects.
<TABLE>
<S> <C> <C>
Stephen J. Lurito Elizabeth B. Dater Sammy Oh
Co-Portfolio Manager Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
Investing in small companies entails special risk considerations. These are
detailed in the Prospectus, which should be read carefully before investing.
6
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND -- POST-VENTURE CAPITAL PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999
- --------------------------------------------------------------------------------
June 15, 1999
Dear Shareholder:
For the six months ended April 30, 1999, Warburg Pincus Institutional Fund --
Post-Venture Capital Portfolio (the "Portfolio") had a gain of 22.53%, vs. gains
of 25.74% for the Russell 2000 Growth Index,* 25.47% for the Russell 2500 Growth
Index** and 33.62% for the NASDAQ Industrial Index.*** The portfolio's one-year
total return through April 30, 1999 was -9.56%. Its since-inception (on October
31, 1997) average annual total return through April 30, 1999 was 0.56%. Note:
Effective March 31, 1999, Stephen J. Lurito and Christopher M. Nawn no longer
serve as Co-Portfolio Manager and Associate Co-Portfolio Manager, respectively.
Robert S. Janis, formerly Associate Portfolio Manager, joins Elizabeth B. Dater
as Co-Portfolio Manager.
MANAGER COMMENTARY
The period was a positive one for the smaller-cap and aggressive-growth stocks
targeted by the portfolio, buoyed by growing optimism regarding global financial
markets and a related increase in investors' risk tolerance. The portfolio
benefited from this relatively favorable backdrop, and good performances from
the portfolio's technology, communications and media holdings in particular. One
weak spot for the portfolio, in relative terms at least, was the financial area,
which was hampered somewhat by fears of rising interest rates.
We made no noteworthy changes to the portfolio during the period in terms of
broad strategies, remaining focused on well-financed, well-managed companies
offering breakthrough products and services. That said, we made several notable
sector-weighting adjustments, foremost an increase in our exposure to the
communications & media and telecommunications &
- ------------------
* The Russell 2000 Growth Index is an unmanaged index (with no defined
investment objective) of those securities in the Russell 2000 Index with a
greater- than-average growth orientation. The Russell 2000 Growth Index
includes reinvestment of dividends, and is compiled by Frank Russell
Company.
** The Russell 2500 Growth Index measures the performance of those companies in
the Russell 2500 Index with higher price-to-book values and higher
forecasted growth rates. The Russell 2500 Index is composed of the 2,500
smallest companies in the Russell 3000 Index, which measures the performance
of the 3,000 largest U.S. companies based on total market capitalization.
The Russell 2500 Index represents approximately 22% of the total market
capitalization of the Russell 3000 Index.
*** The NASDAQ Industrial Index measures the stock price performance of more
than 3,000 industrial issues included in the NASDAQ OTC Composite Index. The
NASDAQ OTC Composite Index represents 4,500 stocks traded over the counter.
7
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WARBURG PINCUS INSTITUTIONAL FUND -- POST-VENTURE CAPITAL PORTFOLIO
SEMIANNUAL INVESTMENT ADVISER'S REPORT -- APRIL 30, 1999 (CONT'D)
- --------------------------------------------------------------------------------
equipment sectors. This largely reflected our desire to further extend our
already-significant Internet theme.
Other notable sector weightings continued to include financial services, where
we maintained a mix of asset-management and insurance companies; computers,
where we remained biased toward domestically oriented software companies; and
business services. We lowered our weighting in the last area, however,
reflecting profit-taking in certain stocks as well as our desire to take
advantage of opportunities we saw developing elsewhere.
Going forward, we remain positive on the collective prospects for stocks of
post-venture-capital companies. (We define a post-venture capital company as one
that has received venture-capital financing either during the early stages of
the company's existence or the development of a new product or service, or as
part of a restructuring or recapitalization. The investment of venture-capital
financing, distribution of securities to venture-capital investors or initial
public offering, whichever is later, will have been made within 10 years of the
portfolio's investment.) As ever, we will continue to devote our efforts to
identifying those companies we deem to have best long-term prospects.
<TABLE>
<S> <C>
Elizabeth B. Dater Robert S. Janis
Co-Portfolio Manager Co-Portfolio Manager
</TABLE>
Because of the nature of the portfolio's holdings and certain strategies it
may use, an investment in the portfolio involves certain risks and may not be
appropriate for all investors. The Prospectus contains more complete information
on the special risk considerations associated with post-venture-capital
investments. It should be read carefully before investing.
8
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
Aerospace & Defense (4.1%)
Boeing Co. 4,400 $ 178,750
Gulfstream Aerospace Corp.+ 7,500 365,625
Litton Industries, Inc.+ 7,200 450,900
Raytheon Co. Class A 10,500 726,469
----------
1,721,744
----------
Banks & Savings & Loans (8.5%)
Bank One Corp. 15,300 902,700
Citigroup, Inc. 5,100 383,775
Comerica, Inc. 12,900 839,306
Compass Bancshares, Inc 5,300 144,425
UnionBanCal Corp. 6,400 218,400
Wachovia Corp. 5,500 483,312
Washington Mutual, Inc 15,900 653,887
----------
3,625,805
----------
Building & Building Materials (1.5%)
USG Corp.+ 11,100 647,962
----------
Business Services (0.9%)
WPP Group PLC 45,200 399,543
----------
Capital Equipment (8.6%)
AlliedSignal, Inc. 5,200 305,500
American Standard Cos., Inc.+ 9,900 452,925
Case Corp. 13,200 457,050
Deere & Co. 7,200 309,600
Emerson Electric Co. 3,700 238,650
Federal-Mogul Corp. 11,100 487,012
Ingersoll-Rand Co. 11,000 761,062
ITT Industries, Inc. 6,100 219,600
Kennametal, Inc. 2,500 66,406
Navistar International Corp.+ 6,900 360,956
----------
3,658,761
----------
Chemicals (2.8%)
Dow Chemical Co. 3,200 419,800
Ferro Corp. 13,000 359,937
Rhone Poulenc SA ADR
Series A 8,800 414,700
----------
1,194,437
----------
NUMBER
OF
SHARES VALUE
--------- ---------
Computers (7.2%)
BMC Software, Inc.+ 16,800 $ 723,450
COMPAQ Computer Corp. 7,800 174,037
Hewlett-Packard Co. 9,000 709,875
International Business Machines
Corp 3,600 753,075
Unisys Corp.+ 22,200 697,912
----------
3,058,349
----------
Conglomerates (1.1%)
Harsco Corp. 14,000 459,375
----------
Consumer Durables (2.0%)
Ford Motor Co. 13,100 837,581
----------
Consumer Non-Durables (0.8%)
Premark International, Inc. 8,800 323,950
----------
Energy (7.6%)
Amerada Hess Corp. 7,900 450,300
BP Amoco PLC
Sponsored ADR 7,800 882,862
Royal Dutch Petroleum Co. ADR 22,500 1,320,469
Total SA ADR 5,000 340,000
Union Pacific
Resources Group, Inc. 17,800 249,200
----------
3,242,831
----------
Environmental Services (2.7%)
Allied Waste
Industries, Inc.+ 14,800 261,775
Waste Management, Inc. 15,300 864,450
----------
1,126,225
----------
Financial Services (11.1%)
Ace, Ltd. 4,200 127,050
American Express Co. 1,100 143,756
Countrywide Credit
Industries, Inc. 11,100 502,969
FINOVA Group, Inc. 5,600 270,550
Household International, Inc. 13,500 679,219
Lehman Brothers Holdings, Inc. 8,700 483,394
MBIA, Inc. 10,300 692,675
MGIC Investment Corp 9,700 471,056
See Accompanying Notes to Financial Statements.
9
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCKS (CONT'D)
Financial Services (cont'd)
Old Republic
International Corp. 10,600 $ 207,362
PMI Group, Inc. 12,800 714,400
Terra Nova (Bermuda)
Holdings, Ltd. Class A 14,600 327,587
Waddell & Reed
Financial, Inc. 4,700 106,044
----------
4,726,062
----------
Food, Beverages & Tobacco (4.8%)
Anheuser-Busch
Companies, Inc. 4,400 321,750
Corn Products
International, Inc.+ 8,800 254,100
Heinz (H.J.) Co. 4,400 205,425
Keebler Foods Co.+ 14,300 459,387
Philip Morris Cos., Inc. 22,500 788,906
----------
2,029,568
----------
Healthcare (3.7%)
Baxter International, Inc. 7,700 485,100
Tenet Healthcare Corp.+ 12,300 290,587
Trigon Healthcare, Inc.+ 12,000 381,000
Wellpoint Health
Networks, Inc.+ 5,700 400,425
----------
1,557,112
----------
Industrial Manufacturing &
Processing (3.5%)
Dana Corp. 4,700 221,488
Eaton Corp. 3,700 339,244
Raychem Corp. 5,200 137,475
UNOVA, Inc.+ 59,100 801,544
----------
1,499,751
----------
Metals & Mining (1.8%)
Alcoa, Inc. 12,400 771,900
----------
Office Equipment & Supplies (0.6%)
Pitney Bowes, Inc. 3,400 237,788
----------
Oil Services (1.7%)
Baker Hughes, Inc. 9,700 289,788
Halliburton Co. 6,400 272,800
Weatherford
International, Inc.+ 4,200 142,275
----------
704,863
----------
NUMBER
OF
SHARES VALUE
--------- ---------
Real Estate (0.5%)
Equity Residential
Properties Trust 4,400 $ 203,500
----------
Retail (7.6%)
Consolidated Stores Corp.+ 12,700 436,563
Federated Department Stores, Inc.+ 8,900 415,519
May Department Stores Co. 10,600 422,013
OfficeMax, Inc.+ 17,100 173,138
Payless ShoeSource, Inc.+ 4,100 198,594
Ross Stores, Inc. 13,900 638,531
Saks, Inc.+ 9,800 277,463
Sears, Roebuck and Co. 7,200 331,200
TJX Cos., Inc. 9,300 309,806
----------
3,202,827
----------
Telecommunications &
Equipment (4.3%)
Ameritech Corp. 8,500 581,719
Bell Atlantic Corp. 13,700 789,463
SBC Communications, Inc. 8,000 448,000
----------
1,819,182
----------
Transportation (0.5%)
Burlington Northern
Santa Fe Corp. 6,200 227,075
----------
Utilities -- Electric (2.6%)
Allegheny Energy, Inc. 9,800 333,813
American Electric
Power Co., Inc. 6,200 256,913
DQE, Inc. 1,600 65,900
Illinova Corp. 6,500 170,625
Wisconsin Energy Corp. 9,700 260,688
----------
1,087,939
----------
TOTAL COMMON STOCK
(Cost $31,856,009) 38,364,130
----------
PREFERRED STOCK (0.2%)
Real Estate (0.2%)
Equity Residential
Properties Series G
7.25% (Convertible)
(Callable 09/15/02
at $25.91) REIT
(Cost $110,379) 4,400 100,925
----------
See Accompanying Notes to Financial Statements.
10
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
PAR
(000) VALUE
--------- ---------
CORPORATE BONDS (0.7%)
National Semiconductor Corp.
(Convertible)(Cost $322,693) $ 340 $290,700
--------
NUMBER
SHARES
---------
SHORT-TERM INVESTMENTS (9.2%)
Institutional Money
Market Trust 1,857,567 1,857,567
RBB Money
Market Fund 2,057,030 2,057,030
------------
TOTAL SHORT TERM
INVESTMENTS
(Cost $3,914,597) 3,914,597
------------
TOTAL INVESTMENTS AT
VALUE (100.6%)
(Cost $36,203,678*) 42,670,352
LIABILITIES IN EXCESS
OF OTHER ASSETS (0.6%) (271,694)
------------
NET ASSETS (100%)
(applicable to
3,077,640 shares
outstanding) $ 42,398,658
============
NET ASSET VALUE,
offering and
redemption price per
share ($42,398,658
divided by 3,077,640) $ 13.78
============
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipts
REIT = Real Estate Investment Trust
- --------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $36,340,377.
See Accompanying Notes to Financial Statements.
11
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY VALUE PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCK (94.2%)
Aerospace & Defense (3.1%)
REMEC, Inc.+ 400 $ 5,175
TriStar Aerospace Co.+ 1,900 20,187
-------
25,362
-------
Banks & Savings & Loans (7.1%)
Century Bancorp, Inc.
Class A 1,155 20,646
Imperial Bancorp+ 650 12,512
Prosperity Bancshares, Inc. 900 11,812
Quaker City Bancorp, Inc.+ 350 5,469
Texas Regional Bancshares, Inc. 300 8,597
-------
59,036
-------
Building & Building Materials (6.4%)
Cavalier Homes, Inc. 471 4,445
Elcor Corp. 300 11,587
Juno Lighting, Inc. 964 21,931
Walter Industries, Inc.+ 1,300 14,787
-------
52,750
-------
Business Services (2.6%)
Graco, Inc. 421 13,261
Interim Services, Inc.+ 500 8,687
-------
21,948
-------
Capital Equipment (3.0%)
Applied Power, Inc.
Class A 800 25,250
-------
Chemicals (1.7%)
Ferro Corp. 500 13,844
-------
Conglomerates (4.4%)
Gaylord Containers
Corp., Class A+ 2,931 24,547
Watts Industries, Inc.
Class A 755 11,608
-------
36,155
-------
Consumer Durables (10.8%)
Harman International
Industries, Inc. 550 25,266
Heilig-Meyers Co. 3,754 22,055
La-Z-Boy, Inc. 578 11,379
Sturm, Ruger & Co., Inc. 1,200 12,750
Superior Industries
International, Inc. 727 18,175
-------
89,625
-------
NUMBER
OF
SHARES VALUE
--------- ---------
Consumer Non-Durables (8.7%)
Central Garden & Pet Co.+ 1,225 $ 17,150
Home Products
International, Inc.+ 1,281 11,049
Nautica Enterprises, Inc.+ 200 2,712
Nine West Group, Inc.+ 100 2,850
Packaged Ice, Inc.+ 700 4,200
Timberland Co. (The), Class A+ 150 10,388
WestPoint Stevens, Inc. 700 23,975
--------
72,324
--------
Electronics (1.1%)
Avant! Corp.+ 500 6,750
Burr-Brown Corp.+ 100 2,650
--------
9,400
--------
Financial Services (12.5%)
Amerin Corp.+ 900 21,094
Commerce Group, Inc. 400 9,100
HCC Insurance
Holdings, Inc. 882 18,632
National Western Life
Insurance Co. Class A+ 100 9,925
StanCorp Financial Group, Inc.+ 1,000 24,062
Terra Nova (Bermuda)
Holdings, Ltd. Class A 400 8,975
Webster Financial Corp. 400 12,300
--------
104,088
--------
Healthcare (3.0%)
Foundation Health
Systems, Inc. Class A+ 400 5,525
Morrison Health Care, Inc. 500 9,375
Total Renal Care
Holdings, Inc.+ 700 9,713
--------
24,613
--------
Leisure & Entertainment (3.3%)
Coach USA, Inc.+ 500 11,875
SCP Pool Corp.+ 850 15,619
--------
27,494
--------
See Accompanying Notes to Financial Statements.
12
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY VALUE PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCK (CONT'D)
Lodging & Restaurants (1.3%)
Ryan's Family Steak
Houses, Inc.+ 900 $11,138
-------
Metals & Mining (2.6%)
Freeport-McMoRan
Copper & Gold, Inc. Class B 300 4,594
Kaiser Aluminum Corp.+ 300 2,344
Ryerson Tull, Inc. 633 14,361
-------
21,299
-------
Oil Services (4.8%)
Evergreen Resources, Inc.+ 400 9,100
Global Industries, Ltd.+ 1,400 17,238
Varco International, Inc.+ 1,225 13,858
-------
40,196
-------
Paper & Forest Products (4.3%)
Caraustar Industries, Inc. 497 12,674
Wausau-Mosinee Paper Corp. 1,412 23,298
-------
35,972
-------
Real Estate (2.1%)
Western Water Co.+ 4,600 17,250
-------
Retail (2.0%)
Ross Stores, Inc. 200 9,188
The Finish Line, Inc. Class A+ 500 7,531
-------
16,719
-------
Transportation (3.6%)
Landstar Systems, Inc.+ 548 21,338
M.S. Carriers, Inc.+ 264 8,415
-------
29,753
-------
NUMBER
OF
SHARES VALUE
--------- ---------
Utilities-Electric (5.8%)
Commonwealth Energy
System, Inc. 500 $ 20,281
Idacorp, Inc. 600 18,900
UniSource Energy Corp.+ 800 8,650
--------
47,831
--------
TOTAL COMMON STOCK
(Cost $733,139) 782,047
--------
SHORT-TERM INVESTMENTS (5.0%)
Institutional Money
Market Trust 434 434
RBB Money Market Fund 41,481 41,481
--------
TOTAL SHORT-TERM
INVESTMENTS (Cost $41,915) 41,915
--------
TOTAL INVESTMENTS AT
VALUE (99.2%)
(Cost $775,054*) 823,962
OTHER ASSETS IN EXCESS
OF LIABILITIES (0.8%) 6,327
--------
NET ASSETS (100.0%)
(applicable to 103,736
shares outstanding) $830,289
========
NET ASSET VALUE,
offering and redemption price per
share ($830,289 divided by 103,736) $ 8.00
========
- -----------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $811,758.
See Accompanying Notes to Financial Statements.
13
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCKS (90.5%)
Aerospace & Defense (2.1%)
Prescient Systems, Inc.# 21,615 $ 1,999,999
TriStar Aerospace Co.+ 257,100 2,731,687
----------
4,731,686
----------
Business Services (10.3%)
Acxiom Corp.+ 127,340 3,215,335
Getty Images, Inc.+ 138,400 3,598,400
INSpire Insurance
Solutions, Inc.+ 180,400 3,923,700
Jones Lang Lasalle, Inc.+ 62,300 1,662,631
Kroll-O'Gara Co.+ 116,100 2,779,144
Lason Holdings, Inc.+ 33,900 1,341,169
MedQuist, Inc.+ 52,300 1,791,275
On Assignment, Inc.+ 63,200 1,915,750
QRS Corp.+ 61,533 3,384,315
----------
23,611,719
----------
Communications & Media (9.6%)
Central European
Media Enterprises, Ltd. Class A+ 97,647 799,485
Earthlink Network, Inc.+ 16,300 1,123,681
Granite Broadcasting Corp.+ 216,600 1,638,037
Heftel Broadcasting Corp.+ 59,400 3,229,875
Infoseek Corp.+ 34,000 1,736,125
Infospace.com, Inc.+ 21,300 3,052,556
Metro Networks, Inc.+ 75,500 3,397,500
Network Event Theater, Inc.+# 283,968 4,170,780
Verticalnet, Inc.+ 19,100 2,167,850
Xoom.Com, Inc.+ 8,910 623,700
----------
21,939,589
----------
Computers (9.1%)
Adaptec, Inc.+ 119,900 2,885,094
Business Objects SA ADR+ 98,600 2,310,937
Legato Systems, Inc.+ 47,300 1,912,694
Mercury Interactive Corp.+ 70,500 1,987,219
NUMBER
OF
SHARES VALUE
--------- ---------
Computers (cont'd)
Mindspring Enterprises, Inc.+ 11,100 $ 1,076,006
National Instruments Corp.+ 71,982 2,447,388
Radiant Systems, Inc.+ 142,800 1,624,350
Remedy Corp.+ 112,800 1,974,000
Safeguard Scientifics, Inc.+ 10,100 818,100
Transaction Systems
Architects, Inc. Class A+ 71,700 2,325,769
Women.com Networks# 455,927 1,500,000
-----------
20,861,557
-----------
Consumer Non-Durables (0.9%)
Central Garden & Pet Co.+ 151,800 2,125,200
-----------
Consumer Services (2.9%)
DeVRY, Inc.+ 146,304 3,858,768
ITT Educational Services, Inc.+ 23,200 569,850
Strayer Education, Inc. 63,200 2,188,300
-----------
6,616,918
-----------
Distribution (0.7%)
U.S. Foodservice+ 40,000 1,682,500
-----------
Electronics (12.0%)
ATMI, Inc.+ 100,400 2,309,200
Avant! Corp.+ 142,531 1,924,168
Burr-Brown Corp.+ 108,951 2,887,201
DII Group, Inc.+ 59,800 1,853,800
Electronics for Imaging, Inc.+ 64,500 3,051,656
Etec Systems, Inc.+ 86,900 2,683,037
Maxim Integrated Products, Inc.+ 37,900 2,122,400
Novellus Systems, Inc.+ 97,700 4,616,325
Photronics, Inc.+ 79,600 1,905,425
QLogic Corp.+ 15,900 1,112,006
Uniphase Corp.+ 25,600 3,107,200
-----------
27,572,418
-----------
See Accompanying Notes to Financial Statements.
14
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCKS
(CONT'D)
Energy (1.1%)
Stone Energy Corp.+ 72,000 $ 2,443,500
-----------
Environmental Services (1.1%)
Casella Waste Systems, Inc.+ 98,100 2,452,500
-----------
Financial Services (0.5%)
Enhance Financial
Services Group, Inc. 61,100 1,264,006
-----------
Food, Beverages & Tobacco (1.5%)
Ben & Jerry's Homemade, Inc.
Class A+ 117,900 3,426,469
-----------
Healthcare (8.7%)
Advanced Paradigm, Inc.+ 74,800 3,927,000
Core, Inc.+ 228,400 2,141,250
Hanger Orthopedic Group, Inc.+ 129,800 1,898,325
MiniMed, Inc.+ 70,200 4,387,500
Oxford Health Plans, Inc.+ 5,400 107,662
Renal Care Group, Inc.+ 102,250 2,134,469
Sunrise Assisted Living, Inc.+ 63,600 2,544,000
VWR Scientific Products Corp.+ 111,400 2,854,625
-----------
19,994,831
-----------
Leisure & Entertainment (7.4%)
Championship Auto Racing+ 141,200 4,350,725
Coach USA, Inc.+ 97,600 2,318,000
Fairfield Communities, Inc.+ 231,100 2,975,412
Premier Parks, Inc.+ 105,900 3,660,169
Sunterra Corp.+ 120,900 1,299,675
Vistana, Inc.+ 149,400 2,222,325
-----------
16,826,306
-----------
NUMBER
OF
SHARES VALUE
--------- ---------
Oil Services (3.7%)
BJ Services Co.+ 44,900 $ 1,201,075
Cooper Cameron Corp.+ 76,600 2,958,675
Petroleum Geo-Services ADR+ 179,262 3,002,639
Smith International, Inc.+ 26,800 1,202,650
Southern Mineral Corp.+# 58,875 25,758
-----------
8,390,797
-----------
Pharmaceuticals (5.2%)
Alkermes, Inc.+ 117,600 3,145,800
ChiRex, Inc.+ 111,500 2,899,000
GelTex Pharmaceuticals, Inc.+ 104,700 1,792,988
Sepracor, Inc.+ 36,100 3,050,450
Serologicals Corp.+ 125,450 940,875
-----------
11,829,113
-----------
Retail (3.5%)
99 Cents Only Stores+ 37,325 1,758,941
ONSALE, Inc.+ 37,900 961,713
Pacific Sunwear of
California, Inc.+ 93,500 3,468,266
Value America, Inc.+ 45,700 1,802,294
-----------
7,991,214
-----------
Telecommunications & Equipment (8.3%)
Concentric Network Corp.+ 49,200 4,108,200
Exodus Communications, Inc.+ 23,900 2,153,988
Gilat Satellite Networks, Ltd.+ 64,400 3,348,800
Harmonic Lightwaves, Inc.+ 49,400 2,253,875
Omnipoint Corp.+ 57,500 1,020,625
Stanford Communications, Inc.+ 161,400 2,905,200
Viatel, Inc.+ 68,800 3,164,800
-----------
18,955,488
-----------
See Accompanying Notes to Financial Statements.
15
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
Transportation (1.9%)
Heartland Express, Inc.+ 17,750 $ 247,391
Mark VII, Inc.+ 133,962 1,908,959
Swift Transportation Co., Inc.+ 115,200 2,116,800
-----------
4,273,150
-----------
TOTAL COMMON STOCK
(Cost $172,636,175) 206,988,961
-----------
PAR
(000)
---------
CORPORATE BOND (0.9%)
Mansur Industries 8.25%,
02/23/03 (Cost $2,168,403) # 2,168 2,168,403
---------
NUMBER
OF
SHARES VALUE
--------- ---------
SHORT-TERM INVESTMENTS (7.5%)
Institutional Money Market
Trust 6,326,984 6,326,984
RBB Money Market Fund 10,890,879 10,890,879
----------
TOTAL SHORT-TERM
INVESTMENTS
(Cost $17,217,863) 17,217,863
----------
NUMBER
OF
SHARES VALUE
--------- ---------
TOTAL INVESTMENTS AT VALUE (98.9%)
(Cost $192,022,441*) $226,375,227
OTHER ASSETS IN
EXCESS OF LIABILITIES (1.1%) 2,478,879
------------
NET ASSETS (100.0%)
(applicable to 15,634,456
shares outstanding) $228,854,106
============
NET ASSET VALUE, offering and
redemption price per share
($228,854,106 divided by 15,634,456) $ 14.64
============
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- ----------------------------------------
+ Non-income producing security.
# Restricted security.
* Cost for federal income tax purposes is $192,065,072.
See Accompanying Notes to Financial Statements.
16
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCKS (92.9%)
Aerospace & Defense(0.7%)
Orbital Sciences Corp.+ 400 $ 8,425
--------
Business Services (11.5%)
BISYS Group, Inc.+ 300 15,225
CB Richard Ellis Services, Inc.+ 700 14,087
CSG Systems International, Inc.+ 400 15,450
Lason Holdings, Inc.+ 500 19,781
On Assignment, Inc.+ 400 12,125
Pharmaceutical Product
Development, Inc.+ 500 14,562
QRS Corp.+ 400 22,000
Saatchi & Saatchi PLC ADR 1,000 19,250
SunGard Data Systems, Inc.+ 400 12,775
--------
145,255
--------
Communications & Media (18.3%)
America Online, Inc.+ 200 28,550
At Home Corp. Series A+ 200 28,787
Central European
Media Enterprises,
Ltd. Class A+ 900 7,369
Chancellor Media Corp.+ 300 16,462
Heftel Broadcasting Corp.+ 600 32,625
Infoseek Corp.+ 200 10,212
Outdoor Systems, Inc.+ 700 17,631
Shaw Communications, Inc. Class B 900 36,450
USA Networks, Inc.+ 500 18,687
Yahoo!, Inc.+ 200 34,937
--------
231,710
--------
Computers (6.7%)
Citrix Systems, Inc.+ 400 17,000
Concord Communications, Inc.+ 300 13,425
Intuit, Inc.+ 200 17,225
Novell, Inc.+ 600 13,350
Transactions Systems
Architects, Inc. Class A+ 400 12,975
Verisign, Inc.+ 100 11,500
--------
85,475
--------
NUMBER
OF
SHARES VALUE
--------- ---------
Consumer Non-Durables (1.1%)
Dial Corp. 400 $ 13,600
--------
Consumer Services(1.7%)
DeVRY, Inc.+ 800 21,100
--------
Electronics (9.2%)
KLA-Tencor Corp.+ 200 9,925
Maxim Integrated Products, Inc.+ 600 33,600
Uniphase Corp.+ 300 36,413
Vitesse Semiconductor Corp.+ 400 18,525
Xilinx, Inc.+ 400 18,250
--------
116,713
--------
Financial Services (6.3%)
Amvescap PLC ADR 300 16,369
E*Trade Group, Inc.+ 200 23,100
Nationwide Financial Services, Inc. 400 18,550
Reinsurance Group of America, Inc.+ 300 9,075
3i Group PLC 1,200 13,013
--------
80,107
--------
Food, Beverages & Tobacco (1.6%)
Ben & Jerry's Homemade, Inc.
Class A+ 700 20,344
--------
Healthcare (3.1%)
AmeriSource Health Corp. Class A+ 400 11,075
Concentra Managed Care, Inc.+ 1,100 14,919
Total Renal Care Holdings, Inc.+ 1,000 13,875
--------
39,869
--------
Leisure & Entertainment (3.7%)
Coach USA, Inc.+ 400 9,500
Fairfield Communities, Inc.+ 500 6,438
Premier Parks, Inc.+ 900 31,106
--------
47,044
--------
Lodging & Restaurants (1.0%)
Tricon Global Restaurants, Inc.+ 200 12,875
--------
See Accompanying Notes to Financial Statements.
17
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- POST-VENTURE CAPITAL PORTFOLIO
STATEMENT OF NET ASSETS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
NUMBER
OF
SHARES VALUE
--------- ---------
COMMON STOCK (CONT'D)
Oil Services (2.3%)
Cooper Cameron Corp.+ 400 $ 15,450
Petroleum Geo - Services ADR+ 800 13,400
--------
28,850
--------
Pharmaceuticals (7.5%)
Alkermes, Inc.+ 800 21,400
ChiRex, Inc.+ 1,400 36,400
GelTex Pharmaceuticals,
Inc.+ 500 8,563
MedImmune, Inc.+ 200 11,025
SangStat Medical Corp.+ 400 5,800
Watson Pharmaceuticals, Inc.+ 300 12,150
--------
95,338
--------
Publishing (4.0%)
Central Newspapers, Inc. Class A 800 27,150
Scholastic Corp.+ 500 23,641
--------
50,791
--------
Retail (4.2%)
Amazon.com, Inc.+ 100 17,206
CDnow, Inc.+ 700 13,563
Staples, Inc.+ 750 22,500
--------
53,269
--------
Telecommunications & Equipment (10.0%)
Cisco Systems, Inc.+ 300 34,219
Exodus Communications, Inc.+ 200 18,025
Gilat Satellite Networks+ 400 20,800
MCI WorldCom, Inc.+ 500 41,094
Pinnacle Holdings, Inc.+ 600 12,300
--------
126,438
--------
NUMBER
OF
SHARES VALUE
--------- ---------
TOTAL COMMON STOCK
(Cost $954,425) $1,177,203
----------
SHORT TERM INVESTMENTS (6.8%)
Institutional Money
Market Trust 26,250 26,250
RBB Money Market Fund 60,346 60,346
----------
TOTAL SHORT TERM INVESTMENTS
(Cost $86,596) 86,596
----------
TOTAL INVESTMENTS AT VALUE (99.7%)
(Cost $1,041,021*) 1,263,799
OTHER ASSETS IN EXCESS OF
LIABILITIES (0.3%) 3,927
----------
NET ASSETS (100.0%)
(applicable to 125,900 shares
outstanding) $1,267,726
==========
NET ASSET VALUE, offering and
redemption price per share ($1,267,726
divided by 125,900) $ 10.07
==========
INVESTMENT ABBREVIATIONS
ADR = American Depository Receipt
- --------------------------------------------
+ Non-income producing security.
* Cost for federal income tax purposes is $1,048,671.
See Accompanying Notes to Financial Statements.
18
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY SMALL COMPANY POST-VENTURE
VALUE VALUE GROWTH CAPITAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net) $ 377,336 $ 4,037 $ 52,922 $ 443
Interest 105,889 2,118 367,651 1,792
------------ ------------ ------------ ------------
Total investment income 483,225 6,155 420,573 2,235
------------ ------------ ------------ ------------
EXPENSES:
Investment advisory 214,330 6,180 1,001,312 6,867
Administrative services 59,419 2,470 224,558 1,665
Audit 6,012 5,467 7,260 5,370
Custodian/Sub-custodian 14,128 16,242 29,935 8,847
Directors 1,019 1,078 1,028 892
Insurance 348 31 1,158 38
Interest 58 854 21 17
Legal 3,052 2,473 12,682 207
Offering costs 0 7,054 0 0
Printing 1,318 1,094 7,660 773
Registration 12,517 7,687 14,291 6,063
Transfer agent 2,387 1,986 7,305 750
Miscellaneous 606 523 1,866 589
------------ ------------ ------------ ------------
315,194 53,139 1,309,076 32,078
Less: fees waived, expenses
reimbursed and transfer
agent offsets (100,864) (46,342) (207,633) (24,275)
------------ ------------ ------------ ------------
Total expenses 214,330 6,797 1,101,443 7,803
------------ ------------ ------------ ------------
Net investment income
(loss) 268,895 (642) (680,870) (5,568)
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS AND
FOREIGN CURRENCY RELATED ITEMS:
Net realized gain (loss) from
security and other related
transactions 6,515,863 (179,066) 847,164 (125,188)
Net realized gain (loss) from
foreign currency related
items (49) 0 (1,672) 16
Net change in unrealized
appreciation from
investments and foreign
currency related items 3,447,008 154,225 27,197,799 383,388
------------ ------------ ------------ ------------
Net realized and unrealized
gain (loss) from investments
and foreign currency related
items 9,962,822 (24,841) 28,043,291 258,216
------------ ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations $ 10,231,717 $ (25,483) $ 27,362,421 $ 252,648
============ ============ ============ ============
</TABLE>
See Accompanying Notes to Financial Statements.
19
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE PORTFOLIO
-------------------------------
FOR THE
SIX MONTHS
ENDED FOR THE
APRIL 30, YEAR ENDED
1999 OCTOBER 31,
(UNAUDITED) 1998
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $ 268,895 $ 646,777
Net realized gain (loss) from security and other related
transactions 6,515,863 (2,230,950)
Net realized gain (loss) from foreign currency related
items (49) (547)
Net change in unrealized appreciation (depreciation) from
investments and foreign currency related items 3,447,008 3,269,632
------------ ------------
Net increase (decrease) in net assets resulting from
operations 10,231,717 1,684,912
------------ ------------
FROM DISTRIBUTIONS:
Dividends from net investment income (687,635) (122,223)
Distributions from realized gains 0 (79,452)
------------ ------------
Net decrease in net assets from distributions (687,635) (201,675)
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 5,877,744 58,860,184
Reinvested dividends 687,039 201,675
Net asset value of shares redeemed (32,620,294) (17,199,887)
------------ ------------
Net increase (decrease) in net assets from capital share
transactions (26,055,511) 41,861,972
------------ ------------
Net increase (decrease) in net assets (16,511,429) 43,345,209
NET ASSETS:
Beginning of period 58,910,087 15,564,878
------------ ------------
End of period $42,398,658 $ 58,910,087
============ ============
UNDISTRIBUTED NET INVESTMENT INCOME: $ 186,228 $ 605,017
============ ============
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
SMALL COMPANY SMALL COMPANY POST-VENTURE
VALUE PORTFOLIO GROWTH PORTFOLIO CAPITAL PORTFOLIO
- --------------------------------- --------------------------------- ---------------------------------
FOR THE FOR THE FOR THE
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED FOR THE ENDED FOR THE ENDED FOR THE
APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED
1999 OCTOBER 31, 1999 OCTOBER 31, 1999 OCTOBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998 (UNAUDITED) 1998
- ------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ (642) $ 5,666 $ (680,870) $ (1,206,170) $ (5,568) $ (12,385)
(179,066) (394,793) 847,164 (5,366,049) (125,188) (106,357)
0 0 (1,672) 0 16 0
154,225 (105,317) 27,197,799 (38,365,672) 383,388 (160,610)
- ------------- ------------- ------------- ------------- ------------- -------------
(25,483) (494,444) 27,362,421 (44,937,891) 252,648 (279,352)
- ------------- ------------- ------------- ------------- ------------- -------------
(15,984) 0 0 0 (1,664) 0
0 0 0 0 0 0
- ------------- ------------- ------------- ------------- ------------- -------------
(15,984) 0 0 0 (1,664) 0
- ------------- ------------- ------------- ------------- ------------- -------------
435,220 12,534,862 21,317,382 44,664,142 0 1,915,476
15,976 0 0 0 471 0
(1,363,309) (10,257,549) (13,989,466) (23,423,489) (163,881) (456,972)
- ------------- ------------- ------------- ------------- ------------- -------------
(912,113) 2,277,313 7,327,916 21,240,653 (163,410) 1,458,504
- ------------- ------------- ------------- ------------- ------------- -------------
(953,580) 1,782,869 34,690,337 (23,697,238) 87,574 1,179,152
1,783,869 1,000 194,163,769 217,861,007 1,180,152 1,000
- ------------- ------------- ------------- ------------- ------------- -------------
$ 830,289 $ 1,783,869 $228,854,106 $ 194,163,769 $ 1,267,726 $ 1,180,152
============= ============= ============= ============= ============= =============
$ 0 $ 15,999 $ 0 $ 0 $ 0 $ 1,662
============= ============= ============= ============= ============= =============
</TABLE>
See Accompanying Notes to Financial Statements.
21
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30,
1999
PERIOD ENDED: (UNAUDITED) 1998 1997**
------------- --------- ---------
<S> <C> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period $ 11.53 $ 10.64 $ 10.00
--------- --------- ---------
INVESTMENT ACTIVITIES:
Net investment income 0.07 0.16 0.03
Net gains on investments and foreign
currency related items (both realized and
unrealized) 2.31 0.86 0.61
--------- --------- ---------
Total from investment activities 2.38 1.02 0.64
--------- --------- ---------
DISTRIBUTIONS:
From net investment income (0.13) (0.08) 0.00
From realized capital gains 0.00 (0.05) 0.00
--------- --------- ---------
Total distributions (0.13) (0.13) 0.00
--------- --------- ---------
Net asset value, end of period $ 13.78 $ 11.53 $ 10.64
========= ========= =========
Total return 20.85%+ 9.76% 6.40%+
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $ 42,399 $ 58,910 $ 15,565
Ratio of expenses to average net assets .75%*@ .75%@ .75%*@
Ratio of net income to average net assets .94%* 1.27% 1.60%*
Decrease reflected in above operating
expense ratios due to
waivers/reimbursements .35%* .44% 1.67%*
Portfolio turnover rate 37.85%+ 70.74% 34.81%+
</TABLE>
- --------------------------------------------------------------------------------
** For the period June 30, 1997 (commencement of operations) through October 31,
1997.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the Portfolio's
expense ratio.
+ Non annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
22
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY VALUE FUND
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30,
1999
PERIOD ENDED: (UNAUDITED) 1998**
------------- -----------
<S> <C> <C>
PER-SHARE DATA
Net asset value, beginning of period $ 7.98 $ 10.00
--------- ---------
INVESTMENT ACTIVITIES:
Net investment income (loss) (0.06) 0.03
Net gains (losses) on investments and foreign currency
related items (both realized and unrealized) 0.16 (2.05)
--------- ---------
Total from investment activities 0.10 (2.02)
--------- ---------
DISTRIBUTIONS:
From net investment income (0.08) 0.00
--------- ---------
Net asset value, end of period $ 8.00 $ 7.98
========= =========
Total return 1.21%+ (20.20)%+
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $ 830 $ 1,784
Ratio of expenses to average net assets .99%*@ .99%@
Ratio of net income (loss) to average net assets (.09)%* .09%
Decrease reflected in above operating expense ratios due
to waivers/reimbursements 6.75%* 1.65%
Portfolio turnover rate 100.31%+ 248.40%
</TABLE>
- --------------------------------------------------------------------------------
** For the period October 31, 1997 (commencement of operations) through October
31, 1998.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the Portfolio's
expense ratio.
+ Non annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
23
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- SMALL COMPANY GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS
ENDED
APRIL 30,
1999
(UNAUDITED) 1998 1997 1996**
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 12.89 $ 15.89 $ 12.92 $ 10.00
--------- --------- --------- ---------
INVESTMENT ACTIVITIES:
Net investment loss (0.04) (0.08) (0.05) (0.01)
Net gains (losses) on investments
and foreign currency related items
(both realized and unrealized) 1.79 (2.92) 3.02 2.93
--------- --------- --------- ---------
Total from investment activities 1.75 (3.00) 2.97 2.92
--------- --------- --------- ---------
Net asset value, end of period $ 14.64 $ 12.89 $ 15.89 $ 12.92
========= ========= ========= =========
Total return 13.58%+ (18.88)% 22.99% 29.20%+
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s
omitted) $ 228,854 $ 194,164 $ 217,861 $ 96,827
Ratio of expenses to average net
assets .99%*@ .99%@ .99%@ .99%*@
Ratio of net loss to average net
assets (.61)%* (.54)% (.53)% (.18)%*
Decrease reflected in above
operating expense ratios due to
waivers/reimbursements .18%* .18% .20% .69%*
Portfolio turnover rate 57.60%+ 75.20% 91.59% 57.38%+
</TABLE>
- --------------------------------------------------------------------------------
** For the period December 29, 1995 (commencement of operations) through October
31, 1996.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the Portfolio's
expense ratio.
+ Non annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
24
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC. -- POST-VENTURE CAPITAL PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a Share of the Portfolio Outstanding Throughout The Period)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30,
1999
(UNAUDITED) 1998**
------------- -----------
<S> <C> <C> <C>
PERIOD ENDED:
PER-SHARE DATA
Net asset value, beginning of period $ 8.23 $ 10.00
--------- ---------
INVESTMENT ACTIVITIES:
Net investment loss (0.06) (0.09)
Net gains (losses) on investments and foreign currency
related items (both realized and unrealized) 1.91 (1.68)
--------- ---------
Total from investment activities 1.85 (1.77)
--------- ---------
DISTRIBUTIONS:
From net investment income (0.01) 0.00
--------- ---------
Net asset value, end of period $ 10.07 $ 8.23
========= =========
Total return 22.53%+ (17.70)%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $ 1,268 $ 1,180
Ratio of expenses to average net assets 1.25%*@ 1.25%@
Ratio of net loss to average net assets (.89)%* (.76)%
Decrease reflected in above operating expense ratios due to
waivers/reimbursements 3.88%* 4.19%
Portfolio turnover rate 63.05%+ 98.89%
</TABLE>
- --------------------------------------------------------------------------------
** For the year October 31, 1997 (commencement of operations) through October
31, 1998.
@ Interest earned on uninvested cash balances is used to offset portions of the
transfer agent expense. These arrangements had no effect on the Portfolio's
expense ratio.
+ Non annualized.
* Annualized.
See Accompanying Notes to Financial Statements.
25
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Warburg Pincus Institutional Fund, Inc. is an open-end management investment
company registered under the Investment Company Act of 1940, as amended, (the
1940 Act) and currently offers seven managed investment funds (Portfolios) of
which four are contained in this report. The Value Portfolio, the Small Company
Value Portfolio and the Post-Venture Capital Portfolio are classified as
diversified, and the Small Company Growth Portfolio is non-diversified.
Investment objectives for each portfolio are as follows: the Value Portfolio
seeks total return; the Small Company Value Portfolio seeks long-term capital
appreciation; the Small Company Growth Portfolio seeks capital growth; and the
Post-Venture Capital Portfolio seeks long-term growth of capital.
The net asset value of each portfolio is determined daily as of the close of
regular trading on the New York Stock Exchange. Each portfolio's investments are
valued at market value, which is generally determined using the last reported
sales price. If no sales are reported, investments are generally valued at the
mean between the last reported bid and asked prices. If market quotations are
not readily available, securities and other assets are valued by another method
that the Board of Directors believes accurately reflects fair value. Debt that
will in 60 days or less is valued on the basis of amortized cost, which
approximates market value, unless the Board determines that using this method
would not reflect an investment's value.
When a portfolio writes or purchases a call or a put option, an amount equal
to the premium received or paid by the portfolio is recorded as a liability or
asset, the value of which is marked-to-market daily to reflect the current
market value of the option. When the option expires, the portfolio realizes a
gain or loss equal to the amount of the premium received or paid. When the
portfolio exercises an option or enters into a closing transaction by purchasing
or selling an offsetting option, it realizes a gain or loss without regard to
any unrealized gain or loss on the underlying security. The potential loss
associated with purchasing an option is limited to the premium paid, and the
premium would partially offset any gains achieved from its use.
The books and records of the 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 portfolios do not isolate that portion of
26
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
realized gains and losses on investments in equity securities which are due to
changes in the foreign exchange rate from that which are due to changes in
market prices of equity securities. The portfolios isolate that portion of
realized gains and losses on investments in debt securities which are due to
changes in the foreign exchange rate from that which are due to changes in
market prices of debt securities.
The portfolios may invest in securities of foreign countries and governments
which involve certain risks in addition to those inherent in domestic
investments. Such risks generally include, among others, currency risk
(fluctuations in currency exchange rates), information risk (key information may
be inaccurate or unavailable) and political risk (expropriation, nationalization
or the imposition of capital or currency controls or punitive taxes). Other
risks of investing in foreign securities include liquidity and valuation risks.
In addition, focusing investments in a single country, such as Japan, involves
increased risks.
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 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 of 1986, as
amended, and make the requisite distributions to its shareholders which will be
sufficient to relieve it from federal income and excise taxes.
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, each portfolio, along with the other funds advised by Warburg Pincus
Asset Management Inc., the portfolios' investment adviser (Warburg)
(collectively the Warburg Funds), transfers uninvested cash balances to a
pooled cash account, which is invested in repurchase agreements secured by U.S.
government securities. Securities pledged as collateral for repurchase
agreements are held by the portfolios' custodian bank until the agreements
mature. Each agreement requires that the market value of the collateral be
27
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D)
sufficient to cover payments of interest and principal; however, in the event of
default or bankruptcy by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
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 their
transfer agent expense. For the six months ended April 30, 1999, the portfolios
received credits or reimbursements under this arrangement as follows:
<TABLE>
<S> <C>
PORTFOLIO AMOUNT
- --------- ------
Value 1,901
Small Company Value 20
Small Company Growth 7,695
Post-Venture Capital 24
</TABLE>
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR
Warburg, which is indirectly controlled by Warburg, Pincus & Co., serves as
each portfolio's investment adviser. On February 15, 1999, Warburg, Pincus & Co.
and Credit Suisse Group announced that they reached an agreement for Credit
Suisse to acquire Warburg. Under the terms of the arrangement, no immediate
changes are planned to investment portfolio managers and investment
professionals. The Warburg Pincus funds' Board of Directors/Trustees and
shareholders have approved the "assignment" of each fund's current investment
advisory agreement with Warburg. The transaction is expected to be completed in
mid-1999. For its investment advisory services, Warburg is entitled to receive
the following fees computed daily and payable monthly based on each portfolio's
average daily net assets:
<TABLE>
<CAPTION>
FUND ANNUAL RATE
- ---- ------------------------
<S> <C>
Value .75% of average daily net assets
Small Company Value .90% of average daily net assets
Small Company Growth .90% of average daily net assets
Post-Venture Capital 1.10% of average daily net assets
</TABLE>
28
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D)
For the six months ended April 30, 1999, investment advisory fees, voluntary
waivers and reimbursements were as follows:
<TABLE>
<CAPTION>
GROSS NET
ADVISORY ADVISORY EXPENSE
FUND FEE WAIVER FEE REIMBURSEMENTS
- ---- ----------- --------- ----------- -------------
<S> <C> <C> <C> <C>
Value $ 214,330 $ (85,836) $ 128,494 $ 0
Small Company Value 6,180 (6,180) 0 (39,456)
Small Company Growth 1,001,312 (199,938) 801,374 0
Post-Venture Capital 6,867 (6,867) 0 (16,759)
</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 administrative services,
CFSI receives a fee calculated at an annual rate of .10% of each portfolios'
average daily net assets.
For the six months ended April 30, 1999, administrative services fees earned
by CFSI were as follows:
<TABLE>
<CAPTION>
PORTFOLIO CO-ADMINISTRATION FEE
- --------- ---------------------
<S> <C>
Value $ 28,578
Small Company Value 687
Small Company Growth 111,257
Post-Venture Capital 624
</TABLE>
For administrative services, PFPC currently receives a fee calculated at an
annual rate of .10% on each portfolio'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 the six months ended April 30, 1999, administrative service fees earned
and voluntarily waived by PFPC (including out-of-pocket expenses) were as
follows:
<TABLE>
<CAPTION>
NET
CO-ADMINISTRATION CO-ADMINISTRATION
PORTFOLIO FEE WAIVER FEE
- --------- ----------------- --------- -----------------
<S> <C> <C> <C>
Value $ 30,841 $ (13,127) $ 17,714
Small Company Value 1,783 (686) 1,097
Small Company Growth 113,301 0 113,301
Post-Venture Capital 1,041 (625) 416
</TABLE>
Counsellors Securities Inc. (CSI), also a wholly-owned subsidiary of Warburg,
serves as distributor of each portfolio's shares without compensation.
The portfolios, together with certain other Warburg funds, have established
committed and uncommitted lines of credit facilities with PNC for temporary or
emergency purposes primarily relating to unanticipated fund share
29
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
3. LINE OF CREDIT -- (CONT'D)
redemptions. 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 .07% per
annum on the average daily balance of the line of credit, which is undisbursed
and uncanceled during the preceding quarter. In addition, the Warburg funds will
pay interest on borrowings at the bank's base rate plus .45%. Under the terms of
the uncommitted lines of credit, the Warburg funds will pay interest on
borrowings at the bank's base rate plus .55%. Aggregate borrowings for each fund
under the committed and uncommitted lines of credit with PNC may not exceed the
lowest of (a) thirty-three and one-third percent (33 1/3%) of the assets of such
fund, for any fund that does not invest at least sixty-five percent (65%) of its
assets in international equity or fixed income securities (an International
Fund) and twenty-five percent (25%) of the assets of any fund that is an
International Fund or (b) the maximum amount permitted by such fund's investment
policies and restrictions. At April 30, 1999 and during the six months ended
April 30, 1999, the following portfolio had borrowings under the line of credit
agreement:
<TABLE>
<CAPTION>
AVERAGE
DAILY MAXIMUM DAILY LOAN
LOAN AVERAGE LOAN OUTSTANDING
PORTFOLIO BALANCE INTEREST RATE % OUTSTANDING AT 04/30/99
- ---------- ----------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Small Company Value $ 3,187 5.35% $ 121,000 $ 0
</TABLE>
4. INVESTMENTS IN SECURITIES
For the six months ended April 30, 1999, purchases and sales of investment
securities (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
PORTFOLIO PURCHASES SALES
- --------- ---------- ----------
<S> <C> <C>
Value $19,978,801 $45,960,877
Small Company Value 1,307,461 2,121,542
Small Company Growth 122,590,743 123,205,127
Post-Venture Capital 748,913 966,185
</TABLE>
At April 30, 1999, 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>
Value $7,417,122 $(1,087,147) $6,329,975
Small Company Value 103,807 (91,603) 12,204
Small Company Growth 49,878,431 (15,568,276) 34,310,155
Post-Venture Capital 271,822 (56,694) 215,128
</TABLE>
5. RESTRICTED SECURITIES
Certain Small Company Growth portfolio's investments are restricted as to
resale and are valued as determined by or under the direction of the Board in
30
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
5. RESTRICTED SECURITIES -- (CONT'D)
good faith, at fair value. The table below shows the number of shares held, the
acquisition dates, aggregate cost, fair value as of April 30, 1999, share value
of the securities and percent of net assets which the securities represent.
<TABLE>
<CAPTION>
PERCENTAGE
SECURITY SECURITY ACQUISITION MARKET OF NET
PORTFOLIO DESCRIPTION TYPE DATE(S) COST VALUE ASSETS
--------- ----------- -------- ----------- ---- ----- ----------
<S> <C> <C> <C> <C> <C> <C>
Institutional -- Small
Company
Growth Portfolio
Prescient Systems,
Inc. Common 02/23/98 $2,000,000 $1,999,999 0.87%
Network Event
Theater, Inc. Common 06/24/97 1,000,000 3,730,155 1.63%
07/01/98 41,250 146,875 0.06%
07/06/98 82,500 293,750 0.13%
Women.com Networks Common 06/04/98 1,500,000 1,500,000 0.66%
Southern Mineral
Corp. Common 12/20/96 264,938 25,758 0.01%
Mansur Industries
8.25%, 02/23/03 Bond 02/23/99 85,903 85,903 0.04%
08/23/98 82,500 82,500 0.04%
02/23/98 2,000,000 2,000,000 0.87%
---------- ----------
$7,057,091 $9,864,940
========== ==========
</TABLE>
6. CAPITAL SHARE TRANSACTIONS
The fund is authorized to issue up to thirteen billion full and fractional
shares of common stock of separate series having a $.001 par value per share.
Shares of nine series have been classified, four of which constitute the
interests in the portfolios.
Transactions in shares of each portfolio were as follows:
<TABLE>
<CAPTION>
SMALL COMPANY VALUE
VALUE PORTFOLIO PORTFOLIO
------------------------ ------------------------
FOR THE SIX FOR THE SIX
MONTHS MONTHS
ENDED FOR THE ENDED FOR THE
APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED
1999 OCTOBER 31, 1999 OCTOBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Shares sold 471,534 5,143,230 51,790 1,249,442
Shares issued to shareholders on
reinvestment of dividends 57,158 18,726 1,948 0
Shares redeemed (2,561,518) (1,515,002) (173,448) (1,026,096)
--------- --------- --------- ---------
Net increase (decrease) in shares
outstanding (2,032,826) 3,646,954 (119,710) 223,346
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
SMALL COMPANY GROWTH POST-VENTURE CAPITAL
PORTFOLIO PORTFOLIO
------------------------ --------------------------
FOR THE SIX FOR THE SIX
MONTHS MONTHS
ENDED FOR THE ENDED FOR THE YEAR
APRIL 30, YEAR ENDED APRIL 30, ENDED
1999 OCTOBER 31, 1999 OCTOBER 31,
(UNAUDITED) 1998 (UNAUDITED) 1998
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 1,542,823 2,901,804 0 189,315
Shares issued to shareholders on
reinvestment of dividends 0 0 55 0
Shares redeemed (976,329) (1,547,500) (17,599) (45,971)
--------- --------- --------- ---------
Net increase (decrease) from capital
share transactions 566,494 1,354,304 (17,544) 143,344
========= ========= ========= =========
</TABLE>
31
<PAGE>
WARBURG PINCUS INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT'D)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
7. LIABILITIES
At April 30, 1999, each portfolio had the following affiliated and investment
related liabilities:
<TABLE>
<CAPTION>
SMALL
SMALL COMPANY COMPANY POST-VENTURE
VALUE VALUE GROWTH CAPITAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Payable for securities purchased
(at value) $ 490,679 $ 22,574 $2,869,008 $ 17,459
Administration services fee payable 4,066 68 18,729 106
Investment advisory fee payable 18,977 0 134,150 0
</TABLE>
8. NET ASSETS
At April 30, 1999, capital contributions, undistributed net investment income,
accumulated net realized gain/(loss) from security transactions and current
period distributions have been adjusted for current period permanent book/tax
differences. The Value Portfolio, the Small Company Growth Portfolio and the
Post-Venture Capital Portfolio reclassified ($49), ($1,672) and $16 from
accumulated net realized gain/(loss) from foreign currency related items to
undistributed net investment income. The Small Company Value Portfolio, the
Small Company Growth Portfolio and the Post-Venture Capital Portfolio
reclassified ($627), ($682,542) and ($5,554), respectively, from accumulated net
investment income (loss) to capital contributions.
Net assets at April 30, 1999, consisted of the following:
<TABLE>
<CAPTION>
SMALL SMALL
COMPANY COMPANY POST-VENTURE
VALUE VALUE GROWTH CAPITAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Capital contributed, net $31,471,036 $1,355,240 $201,329,233 $1,276,493
Undistributed net investment income 186,228 0 0 0
Accumulated net realized gain (loss)
from security transactions 4,274,723 (573,859) (6,827,913) (231,545)
Net unrealized appreciation from
investments and foreign currency
related items 6,466,671 48,908 34,352,786 222,778
----------- ---------- ------------ ----------
Net assets $42,398,658 $ 830,289 $228,854,106 $1,267,726
=========== ========== ============ ==========
</TABLE>
9. CAPITAL LOSS CARRYOVER
At April 30, 1999, capital loss carryovers available to offset possible future
gains of each portfolio were as follows:
<TABLE>
<CAPTION>
CAPITAL LOSS CARRYOVER EXPIRING IN
------------------------------------ TOTAL CAPITAL
2004 2005 2006 LOSS CARRYOVER
--------- --------- --------- --------------
<S> <C> <C> <C> <C>
Value Portfolio $ 0 $ 0 $2,079,786 $2,079,786
Small Company Value Portfolio 0 0 370,443 370,443
Small Company Growth Portfolio 773,601 1,532,594 5,229,027 7,535,222
Post-Venture Capital Portfolio 0 0 98,472 98,472
</TABLE>
32
<PAGE>
[WARBURG PINCUS FUNDS GRAPHIC]
P.O. BOX 9030, BOSTON, MA 02205-9030
800-222-8977 o www.warburg.com
COUNSELLORS SECURITIES INC., DISTRIBUTOR. WPINU-3-0499
