<PAGE>
Old Westbury
International Fund
----------------------------------
Annual Report
October 31, 1995
Bessemer Trust
------------------
Investment Advisor
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT ADVISOR'S REPORT
November 1995
- --------------------------------------------------------------------------------
International markets have continued to be volatile throughout the year.
Most markets recovered well in the first half of the six month period covered by
this report. Developed markets have largely stabilized since then but emerging
markets have fallen back once again led by Latin America. The developed markets
continue to represent good value relative to anticipated growth rates. We
believe the emerging markets are undervalued and are at levels where any
recovery in confidence could produce very substantial returns.
PERFORMANCE
The Old Westbury International Fund (the 'Fund') rose by 2.3% in the six
month period ending October 31, 1995. This compares with a fall of 1.2% in the
Morgan Stanley Capital International: Europe, Australia and Far East Index
('EAFE') over the same period while the Morgan Stanley Capital International
Emerging Markets Free Index ('MSCI') which measures the performance of the
'free' emerging markets rose 0.9%. The Fund fell 8.6% in the year as a whole
compared to a fall of 0.4% for the EAFE Index. This was due to the Fund's
exposure to Latin America which is not represented in EAFE and which performed
very poorly in the first quarter when Mexico devalued and the reverberations
unsettled all Latin American markets. The MSCI fell 19.4% in the year.
PORTFOLIO COMPOSITION
There were few significant changes in the overall asset distribution of the
Fund. The proportion invested in Asia rose slightly due to a combination of new
money and market action and the proportion in Latin America fell.
The Fund continues to be uninvested in Japan. The market had a good rebound
when the currency weakened and both factors have helped to boost corporate
earnings. We continue to believe the market is overvalued on fundamentals and
remain concerned about the bad debt problems of the financial sector.
CONCLUSION
We continue to believe that the developed markets of Europe, Australia and
Canada represent an extremely good value relative to their growth rates and that
superior rates of economic growth in the emerging markets will translate into
faster earnings growth and that this will attract investors once confidence
returns and the momentum of the U.S. market starts to moderate.
1
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT ADVISOR'S REPORT
November 1995 (Continued)
- --------------------------------------------------------------------------------
Line graph with two axes: the X-axis represents years of operations; the Y-axis
represents dollar value. The graph plots three lines: the first line represents
the growth of a ten thousand dollar investment in the Fund from October 22, 1993
to October 31, 1995; the second line represents the growth of a ten thousand
dollar investment in a portfolio of securities reflecting the composition of the
Morgan Stanley Capital International: (EAFE) for the same time period; and the
third line represents the growth of a ten thousand dollar investment in a
portfolio of securities reflecting the composition of the Morgan Stanley Capital
International Emerging Markets Free Index (MSCI) for the same time period. The
graph points are as follows:
[CHART]
Morgan Stanley Morgan Stanley
Capital International: Capital International
Old Westbury Europe, Australia and Emerging Markets
International Far East Index Free Index
Fund (EAFE) (MSCI)*
------------- ---------------------- ---------------------
10/22/93 $ 9,551 $10,000 --
10/31/93 9,685 9,993 $10,000
10/31/94 10,325 11,002 12,936
10/31/95 9,440 10,961 10,423
* Start value as of 10/31/93
Past performance is not predictive of future performance.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED OCTOBER 31, 1995
- --------------------------------------
SINCE
OLD WESTBURY INTERNATIONAL FUND 1 YEAR INCEPTION*
------ ----------
Without sales charge................................... -8.6% -0.6%
With 4.5% sales charge................................. -12.7% -2.8%
- ------------------
* October 22, 1993
The chart above illustrates the total value of a $10,000 investment from
inception (assuming a 4.5% sales charge) with dividends and capital gains
reinvested. The EAFE index is a weighted index comprised of approximately 1,100
securities listed on the stock exchanges of Europe, Australia and the Far East.
The EAFE index also includes the reinvestment of dividends, net of withholding
taxes, but does not include fees and expenses associated with an investment in
the Fund. The MSCI Index is a weighted index comprised of approximately 1,100
securities in 20 'free' emerging markets. A free market is defined as a market
with no restrictions on foreign investors. The MSCI Index includes the
reinvestment of gross dividends, but does not include fees and expenses
associated with an investment in the Fund.
2
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
November 1995
- --------------------------------------------------------------------------------
JAPAN
Japan has had a difficult year. The earthquake and the surge of the Yen hit
personal consumption and caused a further scaling back of corporate investment
plans for all except electrical machinery companies. The recent weakness of the
Yen and a reasonably constructive supplementary budget will help, but growth in
1995 looks likely to be below 1.0%. A recovery in confidence should permit
growth of 2.0% in 1996. In addition to the Yen, the economy has to contend with
continuing problems in the financial sector which are exacerbated by the equity
market's fall. We are concerned that the government will have to arrange a
formal bailout which will involve a substantial increase in bond issuance.
Corporate earnings have benefited from the recent decline in the Yen and
the market rebound. This could cause a rise of 15-20% by March 1996 and a
recovery in the economy and more serious restructuring could result in a further
rise of 30% by March 1997. This puts the market on a P/E ratio of 53.9 times
March 1997 earnings, which we continue to find relatively unattractive. Failure
to deal with the financial crisis also continues to be a concern.
PACIFIC BASIN
The Australian and New Zealand economies have responded to the steady rise
in interest rates in both countries in 1994 and 1995 and have slowed down.
Housing starts and consumer spending have been first to respond. Real GDP which
exceeded 5.0% in the year through June 1995 should slow to around 3.0% in the
year by June 1996. Inflation should continue to be moderate and this should
permit bond yields to decline modestly from current levels. Earnings should grow
10-15% per annum for the next two years. This puts New Zealand on 12.3 times and
Australian Industrial shares on 10.8 times June 1997 earnings which we find
attractive.
Weak consumer confidence has moderated the growth of the Hong Kong economy.
However capital spending, notably the airport and railway projects, will
continue to support growth. Signs that the Chinese economy is slowing and that
the tight monetary policy could be eased soon is also very encouraging for Hong
Kong. Sentiment in Hong Kong has already recovered as evidence of a moderating
U.S. economy suggested a benign
3
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
November 1995 (Continued)
- --------------------------------------------------------------------------------
interest rate environment and residential property prices stabilized. With
earnings likely to grow 13% in 1995 and 1996 and to benefit from China's
recovery thereafter, we continue to find the market, selling on 11.3 times 1996
earnings, attractive.
The rest of the Pacific Rim has suffered from rising interest rates but
with inflation probably now peaking we expect these markets selling on around
14.0 times 1996 earnings to perform well.
EUROPE
Though economic growth has been sluggish, corporate profits have in many
cases exceeded expectations and markets have improved as a result. Looking
ahead, we believe that the French market should provide the best opportunities
among the larger markets while Spain and Ireland seem to have the best prospects
elsewhere. Eastern European markets have recently shown some recovery and we
believe that investors will return to the Polish market which we consider to be
attractive, after the Presidential elections.
LATIN AMERICA
After a strong recovery in the summer, all Latin American markets have been
again badly hit by nervousness due to the renewed weakness of the Mexican
currency. Share prices fell sharply again, exacerbated in the case of Mexico by
the reduction in the value of the Peso. Economic stability is returning to the
region, with reasonable growth and reduced inflation anticipated for 1996. We
have maintained our stake in these markets on the basis that, provided no
further shocks are seen, valuations should continue to improve from the current
very depressed levels.
4
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
November 1995 (Continued)
- --------------------------------------------------------------------------------
PORTFOLIO ALLOCATION AT
------------------------------- EAFE
GEOGRAPHICAL AREA 10/31/95 4/30/95 10/31/94 INDEX
- ----------------------------- -------- ------- -------- -----
Australia.................... 9.8% 10.3% 9.2% 2.7%
Hong Kong.................... 8.6 9.1 10.5 3.2
Rest of Asia................. 21.6 19.3 17.5 3.7
UK........................... 8.6 10.9 9.0 17.1
France....................... 6.2 6.3 5.2 6.5
Spain........................ 3.5 3.0 3.1 1.7
Germany...................... -- -- -- 6.9
Netherlands.................. 3.4 3.6 2.5 4.0
Switzerland.................. 2.9 2.8 2.4 6.1
Italy........................ 2.4 2.6 2.3 2.3
Rest of Europe............... 10.7 11.7 9.9 5.9
Latin America................ 13.3 14.9 16.0 --
South Africa................. 4.4 4.7 4.6 --
Canada....................... 2.4 3.0 2.5 --
Japan........................ -- -- -- 39.9
Other assets and
liabilities, net*.......... 2.2 (2.2) 5.3 --
------ ------ ------ ------
100.0% 100.0% 100.0% 100.0%
====== ====== ====== ======
- ------------------
* Includes cash, unrealized gains/losses on forward foreign currency contracts,
pending trades and fund share transactions, interest and dividends receivable
and accrued expenses payable.
5
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
COMMON & PREFERRED STOCKS--95.6%
ARGENTINA--3.2%
69,868 Banco De Galicia Y Buenos Aires (Banks) $ 329,777
60,738 Capex (Utilities) 391,760
35,000 Central Puerto--Class 'B' (Utilities) 106,750
207,024 Perez Companc--Class 'B' (Energy) 912,975
272,100 Telefonica De Argentina ORD--Class 'B' (Services) 574,131
56,470 YPF Sociedad Anonima--Class 'D' (Energy) 974,108
------------
TOTAL ARGENTINA 3,289,501
------------
AUSTRALIA--9.8%
195,300 Amcor Ltd. (Consumer Goods) 1,461,300
66,000 Brambles Industries, Ltd. (Services) 700,602
305,000 CSR Ltd. (Materials) 945,683
104,069 Lend Lease Corporation Ltd.
(Financial Services & Property) 1,444,988
223,600 National Australia Bank Ltd. (Banks) 1,911,086
270,077 News Corporation Ltd. (Services) 1,359,527
80,339 News Corporation Ltd. Preferred (Services) 366,536
324,135 Western Mining Corporation (Materials) 2,075,297
------------
TOTAL AUSTRALIA 10,265,019
------------
BRAZIL--2.2%
27,190,552 Banco Nacional--Preferred (Banks) 537,080
31,000 Companian Energitica De Sao Paulo ADR (Utilities)* 310,000
1,020 Companian Energitica De Sao Paulo--Restricted ADR
(Utilities) 10,200
35,343,000 Telebras Preferred (Services) 1,424,525
------------
TOTAL BRAZIL 2,281,805
------------
CANADA--2.4%
138,000 Air Canada Class 'A' (Services)* 451,719
23,512 Canadian Imperial Bank of Commerce (Banks) 636,251
78,533 Laidlaw Transportation--Class 'B' (Services) 708,386
50,480 MacMillan Bloedel Ltd. (Materials) 666,582
------------
TOTAL CANADA 2,462,938
------------
6
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
CHINA--0.0%
1,560 China Southern Glass (Materials) $ 868
6,500 Dazhong Taxi (Services) 5,265
7,800 Jin Qiao Export (Financial Services & Property) 3,588
------------
TOTAL CHINA 9,721
------------
COLOMBIA--1.1%
105,209 Cementos Diamante--Ordinary Shares (Materials) 511,697
80,997 Nacional De Chocolates (Consumer Goods) 645,734
------------
TOTAL COLOMBIA 1,157,431
------------
EASTERN EUROPE--0.4%
60,000 First N.I.S. Regional Fund (Mutual Fund)* 420,000
------------
ECUADOR--0.3%
1,282,504 Banco Popular (Banks) 282,801
------------
FINLAND--1.5%
14,700 Metra--Class 'B' (Capital Goods) 637,955
11,300 Metsa Serla (Materials) 413,109
24,600 Repola Oy Sedol (Capital Goods) 476,937
------------
TOTAL FINLAND 1,528,001
------------
FRANCE--5.0%
3,878 Accor (Services) 461,705
12,005 Elf Aquitaine Societe Nationale (Energy) 819,194
13,978 Lafarge Coppee (Materials) 928,311
11,400 Michelin (Capital Goods) 461,373
21,888 Schneider (Capital Goods) 845,917
8,019 Television Francais 1 (Services) 829,835
17,925 Valeo (Consumer Goods) 811,400
------------
TOTAL FRANCE 5,157,735
------------
HONG KONG--8.6%
996,768 ASM Pacific Technology Ltd. (Electronics &
Electrical Equipment) 941,223
300,300 Citic Pacific Ltd. (Diversified) 938,098
640,000 Gold Peak (Consumer Goods) 310,447
7
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
HONG KONG (Continued)
1,454,730 Guangdong Investment Ltd. (Diversified) $ 856,188
176,969 HSBC Holdings Ltd. (Banks) 2,575,285
1,661,000 M.C. Pakaging A.K. Ltd. (Capital Goods) 709,021
355,149 Swire Pacific Ltd.--Class 'A' (Diversified) 2,664,490
------------
TOTAL HONG KONG 8,994,752
------------
INDIA--1.7%
50,100 Indian Rayon Industries GDR (Materials) 576,150
105,700 Mahindra & Mahindra GDR (Capital Goods) 1,215,550
------------
TOTAL INDIA 1,791,700
------------
INDONESIA--4.6%
185,015 Indofood Sukses Makmur (Consumer Goods) 851,721
28,300 Indonesia Satellite Corporate ADR's (Services) 937,437
303,658 Lippo Bank (Banks) 635,408
678,492 Mayora Indah (Consumer Goods) 493,177
227,000 Semen Gresik (Materials) 580,000
172,000 Tigaraksa Satria (Consumer Goods) 608,062
334,000 Trias Sentosa (Materials) 735,683
------------
TOTAL INDONESIA 4,841,488
------------
IRELAND--4.6%
190,199 Allied Irish Banks (Banks) 959,918
57,000 Bank of Ireland (Banks) 378,494
126,400 Cement Roadstone Holdings (Materials) 834,216
150,000 Irish Life (Financial Services) 548,366
382,512 Smurfit (Jefferson) Group (Materials) 1,020,940
1,225,350 Waterford Wedgwood (Consumer Goods) 1,090,169
------------
TOTAL IRELAND 4,832,103
------------
ITALY--2.4%
518,100 Fiat--Preferred (Consumer Goods) 1,023,496
698,100 Montedison (Materials)* 480,177
342,000 Stet (Services) 969,125
------------
TOTAL ITALY 2,472,798
------------
8
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
KOREA--0.6%
14,000 Korea Electric Power (Energy) $ 576,395
------------
MEXICO--4.0%
268,189 Cementos Astsk--Class 'B' (Materials) 866,106
52,500 Empresas Ica Sociedad Controladora (Materials) 512,359
1,758,000 Grupo Financiero Bancomer--Class 'B' (Banks)* 463,156
65,000 Grupo Financiero Bancomer--Class 'L' (Banks)* 15,283
1,247,822 Grupo Situr (Consumer Goods)* 390,607
125,418 Nadro--Class 'L' (Health Care) 399,703
556,173 Soriana--Class 'B' (Consumer Goods) 559,324
670,050 Telmex--Class 'L' (Services) 939,589
------------
TOTAL MEXICO 4,146,127
------------
NETHERLANDS--3.4%
12,160 ABN Amro Holdings (Banks) 510,970
34,290 IHC Caland (Consumer Goods) 975,802
20,900 K.L.M. NLG 20 (Services) 690,132
23,000 Nedlloyd Group (Services)* 584,548
8,285 Wolters Kluwer (Consumer Goods) 754,041
------------
TOTAL NETHERLANDS 3,515,493
------------
NEW ZEALAND--3.3%
168,100 Air New Zealand- Class 'B' (Services) 577,734
530,146 Lion Nathan Ltd. (Consumer Goods) 1,200,726
394,600 New Zealand Telecommunications (Services) 1,634,171
------------
TOTAL NEW ZEALAND 3,412,631
------------
PERU--2.3%
347,864 Backus and Johnson--Class 'T' (Consumer Goods) 622,994
63,633 Cementos Lima--Class 'C' (Materials) 944,817
123,928 Minsur--Class 'T' (Materials) 862,629
------------
TOTAL PERU 2,430,440
------------
9
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
PHILIPPINES--4.1%
116,300 Bacnotan Consolidated Industries--Class 'B'
(Materials) $ 761,008
878,000 J.G. Summit (Diversified) 246,705
104,000 Jardine Davies Inc. (Diversified) 580,447
18,340 Philippine Long Distance Telephone (Services) 1,023,595
93,734 Philippine National Bank (Banks)* 790,134
6,186,000 Robinson Land Corporation--Class 'B'
(Financial Services & Property)* 916,709
------------
TOTAL PHILIPPINES 4,318,598
------------
POLAND--1.4%
134,202 Elektrim (Capital Goods) 448,799
414,820 Mostostal Export (Capital Goods)* 972,763
------------
TOTAL POLAND 1,421,562
------------
SINGAPORE--3.3%
203,120 City Developments (Financial Services & Property) 1,257,375
412,998 Hong Kong Land Holdings Ltd. (Financial Services &
Property) 743,396
8,000 Jardine Matheson Holdings (Diversified) 48,800
114,769 Oversea Chinese Bank--Class 'F' (Banks) 1,347,836
------------
TOTAL SINGAPORE 3,397,407
------------
SOUTH AFRICA--4.1%
191,700 East Rand Property Mines (Materials)* 107,770
122,631 Free State Consolidated Gold Mines Ltd. (Materials) 1,143,410
1,058,823 Iron and Steel Corporation of South Africa
(Materials) 1,074,357
565 Murray & Roberts Ord. (Diversified)* 3,952
61,263 Sasol (Energy) 529,214
45,100 South African Pulp and Paper Industries (Materials) 853,394
38,645 Western Areas Gold Mining (Materials) 540,490
------------
TOTAL SOUTH AFRICA 4,252,587
------------
10
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
SPAIN--3.5%
50,492 Aumar (Services) $ 581,724
27,000 Enher (Utilities) 549,078
28,914 Repsol (Energy) 864,219
91,700 Telefonica De Espanol (Services) 1,157,999
33,035 Vallehermoso (Financial Services & Property) 535,007
------------
TOTAL SPAIN 3,688,027
------------
SWITZERLAND--2.9%
743 BBC Brown Boveri (Capital Goods) 862,691
4,930 Interdiscount Bearer Shares (Consumer Goods)* 564,173
4,585 Swiss Bank Corporation--Registered (Banks) 940,409
1,090 Sulzer--Registered (Capital Goods) 698,521
------------
TOTAL SWITZERLAND 3,065,794
------------
THAILAND--3.2%
106,000 Alphatec Electronics (Electronics & Electrical
Equipment) 1,331,320
515,633 Bangkok Metropolitan Bank (Banks) 522,601
19,382 Bumrungrad Hospital (Services) 32,451
158,715 Nation Publishing Group (Consumer Goods) 223,154
150,000 Thai Farmers Bank FS (Banks) 1,240,063
------------
TOTAL THAILAND 3,349,589
------------
TURKEY--2.9%
3,024,000 AK Bank (Banks) 795,945
1,739,000 Eregli Demir Celik Fabrikalari (Materials) 206,822
540,000 Global Securities (Financial Services & Property)* 67,382
5,738,685 NETAS (Consumer Goods) 1,985,994
------------
TOTAL TURKEY 3,056,143
------------
UNITED KINGDOM--8.6%
97,000 Albright & Wilson ORD (Materials) 243,683
63,950 B A T Industries ORD (Consumer Goods) 524,403
158,210 Cable & Wireless PLC (Electronics & Electrical
Equipment) 1,034,883
11
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
SHARES SECURITY (NOTE 1)
- ----------- ---------------------------------------------------- ------------
UNITED KINGDOM (Continued)
74,607 Carlton Communications PLC (Electronics & Electrical
Equipment) $ 1,135,765
151,880 Grand Metropolitan PLC (Consumer Goods) 1,051,070
133,000 Mirror Group Newspaper PLC (Consumer Goods) 350,934
137,000 Penninsula & Oriental DFD (Diversified) 1,043,337
187,942 Royal Insurance Holdings PLC
(Financial Services & Property) 1,159,583
102,767 Siebe PLC (Diversified) 1,221,848
90,158 The Boots Company PLC (Health Care) 797,006
72,458 The General Electric Company PLC (Capital Goods) 359,479
------------
TOTAL UNITED KINGDOM 8,921,991
------------
VENEZUELA--0.2%
379,633 Electricidad De Caracas (Energy) 239,119
------------
TOTAL COMMON & PREFERRED STOCKS 99,579,696
------------
CONVERTIBLE BONDS--1.0%
PRINCIPAL
AMOUNT
- -----------
INDIA--0.7%
$920,000 Sterlite Industries, 3 1/2%, 6/30/99 (Capital Goods) 749,800
----------
SOUTH AFRICA--0.3%
300,000 South African Pulp and Paper Industries, 7.5%, 1/8/02
(Materials) 306,750
----------
TOTAL CONVERTIBLE BONDS 1,056,550
----------
12
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
MARKET
VALUE
UNITS SECURITY (NOTE 1)
- --------- ------------------------------------------------------- ------------
WARRANTS--1.2%
FRANCE
56,252 Christian Dior, 6/30/98 (Consumer Goods)* $ 587,880
7,106 Pinault au Printemps Redoute, 8/2/96 (Consumer Goods)* 648,422
------------
TOTAL FRANCE 1,236,302
------------
TOTAL WARRANTS 1,236,302
------------
TOTAL INVESTMENTS--97.8%
(Identified cost $103,095,276)(a) 101,872,548
CASH AND OTHER ASSETS NET OF LIABILITIES--2.2% 2,321,938
------------
NET ASSETS--100.0% $104,194,486
============
- ------------------
* Non-income producing security.
(a) The aggregrate cost for federal income tax purposes at October 31, 1995
was $104,064,760, the aggregate gross unrealized appreciation is
$9,512,301, and the aggregate gross unrealized depreciation is
$11,704,513, resulting in net unrealized depreciation of $2,192,212.
ADR: American Depositary Receipts.
ORD: Ordinary Shares.
See Notes to Financial Statements.
13
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------
ASSETS:
Investment in securities, at market value
(Cost $103,095,276)........................................ $101,872,548
Cash.......................................................... 3,485,594
Unrealized appreciation on foreign currency contracts sold.... 362,850
Receivable for:
Investment securities sold.............................. 165,028
Fund shares sold........................................ 39,700
Dividends............................................... 175,738
Interest................................................ 24,685
Other................................................... 140,171
Deferred organization expense................................. 55,279
------------
Total assets............................................. 106,321,593
------------
LIABILITIES:
Payable for investment securities purchased.................... 1,814,290
Unrealized depreciation on foreign currency contracts sold..... 111,851
Payable for Fund shares redeemed............................... 45,000
Accrued expenses............................................... 155,966
------------
Total liabilities........................................ 2,127,107
------------
NET ASSETS....................................................... $104,194,486
============
Net Assets consist of:
Paid-in capital................................................ $110,622,218
Distributions in excess of net investment income............... (113,533)
Accumulated net realized loss on investments and foreign
currency transactions....................................... (5,348,822)
Net unrealized depreciation on investments and
foreign currency translations............................... (965,377)
------------
NET ASSETS....................................................... $104,194,486
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($104,194,486/10,635,020)...................................... $9.80
============
MAXIMUM OFFERING PRICE PER SHARE ($9.80/.955).................... $10.26
============
See Notes to Financial Statements.
14
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
STATEMENT OF OPERATIONS
For the fiscal year ended October 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
INCOME:
Dividends (net of foreign withholding tax of
$317,274)...................................... $ 2,582,047
Interest.......................................... 214,425
-----------
Total income................................ $ 2,796,472
-----------
EXPENSES:
Investment Advisory............................... 771,294
Shareholder Servicing............................. 237,518
Custody........................................... 193,103
Administration.................................... 143,716
Audit............................................. 36,650
Transfer Agent.................................... 30,706
Printing and Postage.............................. 25,134
Legal............................................. 23,581
Registration...................................... 22,798
Amortization of organization expense.............. 21,293
Insurance......................................... 15,627
Directors......................................... 10,000
Distribution...................................... 8,042
Miscellaneous..................................... 873
-----------
Total expenses.............................. 1,540,335
-----------
Less fees waived by Administrator................. (84)
Less fees waived by Advisor....................... (91,974)
-----------
Net expenses................................ 1,448,277
-----------
NET INVESTMENT INCOME............................. 1,348,195
-----------
NET REALIZED AND UNREALIZED LOSS:
NET REALIZED LOSS ON:
Investments.................................... (1,984,313)
Foreign currency transactions.................. (2,954,776) (4,939,089)
----------- -----------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON:
Investments.................................... (7,374,788)
Translations of assets and liabilities in
foreign currencies and foreign currency
contracts................................... 2,091,096 (5,283,692)
----------- -----------
NET REALIZED AND UNREALIZED LOSS.................... (10,222,781)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ ($8,874,586)
===========
See Notes to Financial Statements.
15
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
FISCAL YEAR ENDED
OCTOBER 31,
------------------------------
1995 1994
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income...................... $ 1,348,195 $ 642,716
Net realized loss on investments and
foreign currency transactions........... (4,939,089) (1,758,572)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency translations........... (5,283,692) 4,164,535
------------- -------------
Net increase (decrease) in net assets from
operations.............................. (8,874,586) 3,048,679
------------- -------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income................. (755,605) --
------------- -------------
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sales of capital stock... 26,859,241 92,332,258
Reinvestment of dividends.................. 751,802 --
Net cost of capital stock redeemed......... (18,315,186) (2,808,785)
------------- -------------
Net increase in net assets resulting from
capital stock transactions.............. 9,295,857 89,523,473
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS...... (334,334) 92,572,152
NET ASSETS:
Beginning of period........................ 104,528,820 11,956,668
------------- -------------
End of period (including accumulated
undistributed/ (distributions in excess
of) net investment income of $(113,533)
and $643,896 respectively).............. $ 104,194,486 $ 104,528,820
============= =============
See Notes to Financial Statements.
16
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected per share data for a share outstanding throughout each period
and ratios/supplemental data
OCTOBER 22, 1993
FISCAL YEAR ENDED (COMMENCEMENT OF
OCTOBER 31, OPERATIONS) TO
--------------------- OCTOBER 31,
1995 1994 1993
-------- ---------- ------------
Net asset value, beginning of period.... $ 10.81 $ 10.14 $ 10.00
Income from investment operations:
Net investment income................. 0.04 0.07 --
Net realized and unrealized gain
(loss) on investments and foreign
currencies......................... (0.97) 0.60 0.14
-------- --------- --------
Total from investment operations...... (0.93) 0.67 0.14
-------- --------- --------
Dividends to shareholders:
From net investment income............ (0.08) -- --
-------- --------- --------
Net asset value, end of period.......... $ 9.80 $ 10.81 $ 10.14
======== ========= ========
Total return*......................... (8.6%) 6.6% 1.4%
Ratios/Supplemental data:
Net assets, end of period (in 000's).. $104,194 $104,529 $ 11,957
Ratio of expenses to average net
assets before waiver of expenses... 1.60% 1.70% 2.50%**+
Ratio of expenses to average net
assets............................. 1.50% 1.50% 1.50%**
Ratio of net investment income (loss)
to average net assets.............. 1.40% 0.90% (0.91%)**
Portfolio turnover rate............... 32% 23% 0%
- ------------------
* Total return is calculated without a sales charge assuming a purchase of
shares on the first day and a sale on the last day of the period.
** Annualized.
+ The calculation takes state expense limitations into consideration.
See Notes to Financial Statements.
17
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. Old Westbury International
Fund (the 'Portfolio') is a separate series of Old Westbury Funds, Inc. (the
'Fund'), a Maryland corporation registered under the Investment Company Act of
1940 (the 'Act'), as a diversified, open-end management investment company. The
Fund's Articles of Incorporation permit the Directors to create an unlimited
number of series, each of which is a separate class of shares. At October 31,
1995, the Portfolio was the only series of the Fund. The Fund was incorporated
under the laws of the state of Maryland on August 26, 1993 and commenced
operations on October 22, 1993.
The following is a summary of the significant accounting policies followed
by the Portfolio:
A. VALUATION OF INVESTMENTS. Securities listed on an exchange are valued,
except as indicated below, at the last sale price reflected at the close of the
regular trading session of the exchange on the business day as of which such
value is being determined. If there has been no sale on such day, the securities
are valued at the mean of the closing bid and asked prices. If no bid or asked
prices are quoted, then the security is valued by such method as the Board of
Directors shall determine in good faith to reflect its fair market value.
Portfolio securities traded on more than one national securities exchange are
valued at the last sale price on the exchange representing the principal market
for such securities.
Securities traded in the over-the-counter market, including listed
securities whose primary market is believed by Bessemer Trust Company, N.A.
('Bessemer'), the Portfolio's investment advisor (the 'Advisor'), to be
over-the-counter, are valued at the mean of the last reported bid and asked
prices from such sources as the Board of Directors deems appropriate to reflect
their fair value.
Debt instruments having 60 days or less remaining until maturity are valued
at amortized cost. Debt instruments having a greater remaining maturity will be
valued at the bid price obtained from a dealer maintaining an active market in
that security or on the basis of prices obtained from
a pricing service approved as reliable by the Board of Directors. All
other investment assets, including restricted and not readily marketable
securities, are valued under procedures established by and under the general
18
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
supervision and responsibility of the Board of Directors designed to reflect in
good faith the fair value of such securities.
B. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are
maintained in United States dollars. Foreign currency amounts are translated
into United States dollars on the following basis:
(i) value of investment securities, other assets and liabilities--at
the current rates of exchange.
(ii) purchases and sales of investment securities, income and
expenses--at the rates of exchange prevailing on the respective dates of
such translations.
Although the net assets of the Fund are presented at the foreign exchange
rates and values at the close of the period, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the value
of securities held at the end of the period. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the value of portfolio securities sold during the
period.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. companies
as a result of, among other factors, the level of governmental supervision and
regulation of foreign securities markets and the possibility of political and
economic instability.
C. FORWARD FOREIGN CURRENCY CONTRACTS. The Fund enters into forward foreign
currency contracts in order to hedge its exposure to changes in foreign currency
exchange rates on its foreign portfolio holdings. A forward foreign currency
contract is a commitment to purchase or sell a foreign currency at a future date
at a negotiated forward rate. Risks may arise upon entering into these contracts
from the potential inability of the counterparties to meet the terms of their
contracts.
19
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
Forward foreign currency contracts open at October 31, 1995:
UNREALIZED
DELIVER APPRECIATION/
CONTRACTS FORWARD SALE DATE VALUE PROCEEDS (DEPRECIATION)
- ----------- --------------- -------- ----------- ----------- --------------
1,826,593 ECU............ 1/26/96 $ 2,376,580 $ 2,300,000 $(76,580)
13,388,177 ECU............ 6/28/96 17,356,970 17,617,064 260,094
5,494,956 ECU............ 6/28/96 7,150,586 7,253,342 102,756
3,792,570 ECU............ 6/28/96 4,935,271 4,900,000 (35,271)
----------- ----------- --------
$31,819,407 $32,070,406 $250,999
=========== =========== ========
- ------------------
ECU: European Currency Units.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security
transactions are accounted for on the trade date. Realized gains and losses on
security transactions are determined on the identified cost method. Dividend
income and other distributions from portfolio securities are recorded on the
ex-dividend date except that, if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as soon as the Portfolio is
informed of the ex-dividend date. Dividend income is recorded net of foreign
taxes withheld where recovery of such taxes is not assured. Interest income is
accrued daily.
E. DEFERRED ORGANIZATION EXPENSES. Expenses incurred by the Fund in
connection with its organization and the initial public offering of the
Portfolio's shares are being amortized on a straight-line basis over a five-year
period. The amount paid by the Portfolio on any redemption of the Portfolio's
initial shares will be reduced by the pro rata portion of any unamortized
organization expense which the number of the initial shares redeemed bears to
the total number of initial shares outstanding immediately prior to such
redemption.
F. FEDERAL TAXES. It is the Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income or excise tax provision is required.
For the years ended October 31, 1995 and October 31, 1994 the Fund had for
federal income tax purposes unused capital loss carryovers of approximately
$3,982,415 and $408,316, which will expire in 2003 and 2002, respectively.
20
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
G. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. The Portfolio anticipates
paying income dividends on an annual basis. Capital gains distributions, if any,
will be made on an annual basis. The treatment for financial statement purposes
of distributions made during the year from net investment income or net realized
gains may differ from their ultimate treatment for federal income tax purposes.
These differences are caused primarily by: differences in the timing of the
recognition of certain components of income, expense, and capital gain; and the
recharacterization of foreign exchange gains or losses to either ordinary income
or realized capital gain for federal income tax purposes. Where such differences
are permanent in nature, they are reclassified in the components of net assets
based on their characterization for federal income tax purposes. Any such
reclassifications will have no effect on net assets, results of operations or
net asset value per share of the Fund.
2. TRANSACTIONS WITH AFFILIATES.
A. INVESTMENT ADVISORY FEES. Pursuant to an advisory contract, dated
October 12, 1993, the Fund has retained Bessemer to make investment decisions
for the Portfolio. The investment advisory fee paid to the Advisor is computed
daily and paid monthly in accordance with the following schedule: 0.80% of the
first $100 million of the Portfolio's average net assets, 0.75% of the second
$100 million of such assets and 0.70% of such assets exceeding $200 million.
B. ADMINISTRATION FEES. The Fund has retained Signature Broker-Dealer
Services, Inc. ('Signature') to serve as administrator, distributor and
shareholder servicing agent. Signature provides administrative services
necessary for the overall administration of the Fund including, among other
responsibilities, the negotiation of contracts and fees with, and the monitoring
of performance and billings of, the independent contractors and agents of the
Fund; the preparation and filing of all documents required for compliance by the
Portfolio with applicable laws and regulations; providing equipment and
personnel necessary for maintaining the organization of the Fund; preparation of
certain documents in connection with meetings of the Board of Directors and
shareholders; the maintenance of books and records of the Portfolio; and paying
the compensation of the Fund's officers and Directors affiliated with Signature.
For providing these services, Signature receives from the Portfolio a fee
accrued daily and paid monthly at an annual rate equal to 0.15% of the average
daily net assets of the Portfolio up
21
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
to $100 million; 0.10% of such assets from $100 million to $250 million; and
0.05% of such assets over $250 million.
C. DISTRIBUTION AND SERVICE PLAN AND DISTRIBUTION REIMBURSEMENT FEES. The
Directors have adopted a distribution and service plan (the 'Plan') for the
Portfolio pursuant to Rule 12b-1 of the Act, and pursuant to the Plan, the
Portfolio has entered into a distribution agreement and a shareholder servicing
agreement with Signature and a shareholder servicing agreement with Bessemer.
Under its shareholder servicing agreement, Signature is permitted to receive
payments from the Portfolio to permit it to make payments to broker-dealers for
providing shareholder services. Under its shareholder servicing agreement,
Bessemer is permitted (i) to receive a payment from the Portfolio attributable
to Bessemer's clients (and its affiliates) for providing shareholder services to
such clients and (ii) to receive payments to permit it to make payments to other
financial institutions as shareholder servicing agents. The total of shareholder
servicing fees in the aggregate payable to Signature and Bessemer will not
exceed 0.25% per annum of the Portfolio's average daily net assets.
The distribution agreement with Signature provides for reimbursement to
Signature by the Portfolio for its distribution, promotional and advertising
costs incurred in connection with the distribution of the Portfolio's shares in
an amount not to exceed 0.10% per annum of the Portfolio's average daily net
assets.
In addition, the Portfolio will pay for certain other expenses under the
Plan. These expenses shall not exceed an amount equal to 0.05% per annum of the
Portfolio's average daily net assets.
D. DIRECTORS' FEES. Each Director who is not an 'interested person' (as
defined in the Act) of the Fund receives a $5,000 annual retainer and is
reimbursed for out-of-pocket expenses incurred in connection with committee or
board meetings.
E. CUSTODY FEES. The Fund has retained Bessemer to serve as the Portfolio's
custodian. Bessemer is responsible for maintaining the books and records of the
Portfolio's securities and cash. For providing these services, Bessemer receives
from the Portfolio a fee accrued daily and paid monthly at an annual rate equal
to 0.20% of the average daily net assets of the Portfolio.
22
<PAGE>
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
October 31, 1995 (Continued)
- --------------------------------------------------------------------------------
3. CAPITAL STOCK. The Fund has authorized a total of 20 billion shares of common
stock (par value $0.001 per share) and is permitted to issue 4 billion of the
authorized shares in the Portfolio. Transactions in shares of capital stock were
as follows:
FISCAL YEAR ENDED
OCTOBER 31,
-------------------------
1995 1994
------------ -----------
Common stock sold................................... 2,725,287 8,770,277
Reinvestment of dividends........................... 78,231 --
Common stock redeemed............................... (1,842,187) (276,180)
------------ -----------
Net increase........................................ 961,331 8,494,097
============ ===========
4. PURCHASES AND SALES OF SECURITIES. For the fiscal year ended October 31,
1995, purchases and sales of investment securities other than short-term
investments aggregated $42,769,432 and $30,511,907, respectively.
23
<PAGE>
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Board of Directors and the Shareholders of Old Westbury Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Old Westbury Funds, Inc. (consisting of Old
Westbury International Fund) as of October 31, 1995, the related statements of
operations for the year then ended, and of changes in net assets for the two
years then ended and the financial highlights for the two years then ended, and
for the period October 22, 1993 (commencement of operations) to October 31,
1993. 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.
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 at October
31, 1995 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Old Westbury Funds,
Inc. at October 31, 1995, the results of its operations, the changes in its net
assets for the two years then ended and the financial highlights for the two
years then ended, and for the period October 22, 1993 to October 31, 1993, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, New York
December 11, 1995
24
<PAGE>
INVESTMENT ADVISOR:
Bessemer Trust Company, N.A.
630 Fifth Avenue
New York, New York 10111
(212) 708-9100
DISTRIBUTOR, ADMINISTRATOR, AND
SHAREHOLDER SERVICING AGENT:
Signature Broker-Dealer Services, Inc.
6 St. James Avenue
Boston, Massachusetts 02116
(617) 423-0800
SHAREHOLDER SERVICING AGENT:
Bessemer Trust Company, N.A.
630 Fifth Avenue
New York, New York 10111
(212) 708-9100
