<PAGE>
<PAGE>
NEUBERGER&BERMAN MANAGEMENT INC. - Registered Trademark-
605 THIRD AVENUE 2ND FLOOR
NEW YORK, NY 10158-0180
SHAREHOLDER SERVICES
800.877.9700
INSTITUTIONAL SERVICES
800.366.6264
Statistics and projections in this report are derived from sources deemed to be
reliable but cannot be regarded as a representation of future results of the
Fund. This report is prepared for the general information of shareholders and is
not an offer of shares of the Fund. Shares are sold only through the currently
effective prospectus, which must precede or accompany this report.
[LOGO] PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS NBEAAR020896
ANNUAL REPORT
- --------------------------------------------------------------------------------
August 31, 1996
[LOGO]
NEUBERGER&BERMAN
EQUITY ASSETS -SM-
Neuberger&Berman
PARTNERS ASSETS
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
THE FUND
GROWTH OF A DOLLAR
CHART 4
COMPARISON OF A
$10,000 INVESTMENT
FINANCIAL STATEMENTS 5
FINANCIAL HIGHLIGHTS 12
PER SHARE DATA
REPORT OF
INDEPENDENT AUDITORS 14
THE PORTFOLIO
SCHEDULE OF
INVESTMENTS 15
TOP TEN EQUITY
HOLDINGS
FINANCIAL STATEMENTS 19
FINANCIAL HIGHLIGHTS 25
REPORT OF
INDEPENDENT AUDITORS 26
OTHER INFORMATION
Directory/Officers and
Trustees 27
</TABLE>
3
<PAGE>
COMPARISON OF A $10,000 INVESTMENT
Neuberger&Berman August 31, 1996
- ----------------------------------------------------------------------
Partners Assets
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Average Annual Total Return*
Partners S&P "500"
1 Year +13.88% +18.70%
5 Year +15.22% +13.59%
10 Year +12.59% +13.35%
Partners Assets S&P "500"
1986 $10,000 $10,000
1987 $12,618 $13,464
1988 $11,130 $11,043
1989 $14,656 $15,373
1990 $13,657 $14,585
1991 $16,119 $18,522
1992 $17,489 $19,992
1993 $22,411 $23,029
1994 $23,656 $24,298
1995 $28,749 $29,503
1996 $32,739 $35,019
</TABLE>
The performance information for Neuberger&Berman Partners Assets is as of
August 31, 1996. Neuberger&Berman Partners Assets started operating on August
19, 1996. It has identical investment objectives and policies, and invests in
the same Portfolio as Neuberger&Berman Partners Fund ("Sister Fund"), which is
also managed by Neuberger&Berman Management Inc. The performance information
shown in the above chart for the period before August 19, 1996, is for the
Sister Fund. Neuberger&Berman Management Inc. voluntarily bears certain
operating expenses of Partners Assets and its pro rata share of the Portfolio's
operating expenses which, in the aggregate, exceed 1.50% per annum of Partners
Assets' average daily net assets, until December 31, 1997. Absent such
arrangement, the average annual total returns of Partners Assets would have been
less. The total returns for the periods prior to Partners Assets' commencement
of operations would have been lower had they reflected the higher expense ratios
of Partners Assets as compared to those of Neuberger&Berman Partners Fund.
*"Total Return" includes reinvestment of all income dividends and capital gain
distributions. Results represent past performance and do not indicate future
results. The value of an investment in Partners Assets and the return on the
investment both will fluctuate, and redemption proceeds may be higher or lower
than an investor's original cost.
The S&P "500" Index is an unmanaged index generally considered to be
representative of stock market activity. Please note that indices do not take
into account any fees and expenses of investing in the individual securities
that they track, and that individuals cannot invest directly in any index. Data
about the performance of this index are prepared or obtained by Neuberger&
Berman Management Inc. and include reinvestment of all dividends and capital
gain distributions. The Portfolio invests in many securities not included in the
above-described index.
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Assets
<TABLE>
<CAPTION>
August 31,
1996
-------------
<S> <C>
ASSETS
Investment in Portfolio, at value (Note A) $ 103,499
Deferred organization costs (Note A) 58,580
Receivable from administrator -- net (Note
B) 13,840
-------------
175,919
-------------
LIABILITIES
Payable for Fund expenses (Note B) 54,920
Accrued expenses 13,418
Accrued organization costs (Note A) 4,080
-------------
72,418
-------------
NET ASSETS at value $ 103,501
-------------
NET ASSETS consist of:
Par value $ 10
Paid-in capital in excess of par value 104,263
Accumulated undistributed net investment
income 3
Accumulated net realized losses on
investment (4 )
Net unrealized depreciation in value of
investment (771 )
-------------
NET ASSETS at value $ 103,501
-------------
SHARES OUTSTANDING
($.001 par value; unlimited shares
authorized) 10,446
-------------
NET ASSET VALUE, offering and redemption price per
share $9.91
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
STATEMENT OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Assets
<TABLE>
<CAPTION>
For the
Period from
August 19,
1996
(Commencement
of
Operations)
to August
31,
1996
-----------
<S> <C>
INVESTMENT INCOME
Investment income from Portfolio (Note A) $ 5
-----------
Expenses:
Shareholder reports 7,500
Auditing fees 5,000
Amortization of deferred organization and
initial offering expenses (Note A) 420
Custodian fees 417
Legal fees 200
Trustees' fees and expenses 195
Registration and filing fees 100
Shareholder servicing agent fees 6
Expenses from Portfolio (Notes A & B) 4
-----------
Total expenses 13,842
Deduct -- expenses reimbursed by
administrator (Note B) (13,840 )
-----------
Total net expenses 2
-----------
Net investment income 3
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS FROM
PORTFOLIO (NOTE A)
Net realized loss on investment securities (4 )
Net unrealized depreciation of investment
securities (771 )
-----------
Net loss on investments from Portfolio
(Note A) (775 )
-----------
Net decrease in net assets resulting from
operations $ (772 )
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Assets
<TABLE>
<CAPTION>
Period from
August 19,
1996
(Commencement
of
Operations)
to August
31,
1996
------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 3
Net realized loss on investments
from Portfolio (Note A) (4 )
Net unrealized depreciation of
investments from Portfolio (Note
A) (771 )
------------
Net decrease in net assets resulting
from operations (772 )
------------
FROM TRUST SHARE TRANSACTIONS:
Proceeds from shares sold 104,273
------------
NET INCREASE IN NET ASSETS 103,501
NET ASSETS:
Beginning of period --
------------
End of period $ 103,501
------------
Accumulated undistributed net
investment income at end of period $ 3
------------
NUMBER OF TRUST SHARES:
Sold 10,446
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Neuberger&Berman August 31, 1996
- ----------------------------------------------------------------------
Equity Assets
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Partners Assets (the "Fund") is a separate
operating series of Neuberger&Berman Equity Assets (the "Trust"), a Delaware
business trust organized pursuant to a Trust Instrument dated October 18,
1993. The Trust is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and its shares are registered under the Securities Act of 1933,
as amended (the "1933 Act"). The Fund had no operations until August 19, 1996
other than matters relating to its organization and registration as a
diversified, open-end management investment company under the 1940 Act, and
registration of its shares under the 1933 Act and state law. The trustees of
the Trust may establish additional series or classes of shares without the
approval of shareholders.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
The Fund seeks to achieve its investment objective by investing all of its
net investable assets in the Neuberger&Berman Partners Portfolio of Equity
Managers Trust (the "Portfolio") having the same investment objective and
policies as the Fund. The value of the Fund's investment in the Portfolio
reflects the Fund's proportionate interest in the net assets of the
Portfolio. The performance of the Fund is directly affected by the
performance of the Portfolio. The financial statements of the Portfolio,
including the Schedule of Investments, are included elsewhere in this report
and should be read in conjunction with the Fund's financial statements.
2) PORTFOLIO VALUATION: The Fund records its investment in the Portfolio at
value. Investment securities held by the Portfolio are valued as indicated in
the notes following the Portfolio's Schedule of Investments.
3) FEDERAL INCOME TAXES: Each series of the Trust is treated as a separate
entity for Federal income tax purposes. It is the intention of the Fund to
qualify as a regulated investment company by complying with the provisions
available to certain investment companies, as defined in applicable sections
of the Internal Revenue Code, and to make distributions of investment company
taxable income and net capital gains (after reduction for any amounts
available for Federal income tax purposes as capital loss carryforwards)
sufficient to relieve it from all, or substantially all, Federal income
taxes. Accordingly, the Fund paid no Federal income taxes and no provision
for Federal income taxes was required.
8
<PAGE>
4) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund earns income, net
of Portfolio expenses, daily on its investment in the Portfolio. Dividends
and distributions from net realized capital gains, if any, are normally
distributed in December. Income dividends and capital gain distributions to
shareholders are recorded on the ex-dividend date. To the extent the Fund's
net realized capital gains, if any, can be offset by capital loss
carryforwards, it is the policy of the Fund not to distribute such gains.
The Fund distinguishes between dividends on a tax basis and a financial
reporting basis and only distributions in excess of tax basis earnings and
profits are reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
5) ORGANIZATION EXPENSES: Expenses incurred by the Fund in connection with its
organization are being amortized on a straight-line basis over a five-year
period. At August 31, 1996, the unamortized balance of such expenses amounted
to $58,580. The accrued organization costs are payable to Neuberger & Berman
Management Inc. ("Management"), the administrator of the Fund.
6) EXPENSE ALLOCATION: The Fund bears all costs of its operations. Expenses
incurred by the Trust with respect to any two or more funds are allocated in
proportion to the net assets of such funds, except where a more appropriate
allocation of expenses to each fund can otherwise be made fairly. Expenses
directly attributable to a fund are charged to that fund.
7) OTHER: All net investment income and realized and unrealized capital gains
and losses of the Portfolio are allocated pro rata among its respective funds
and any other investors in the Portfolio.
NOTE B -- ADMINISTRATION FEES, DISTRIBUTION ARRANGEMENTS, AND OTHER TRANSACTIONS
WITH AFFILIATES:
The Fund retains Management as its administrator under an Administration
Agreement ("Agreement") dated as of February 13, 1996. Pursuant to this
Agreement the Fund pays Management an administration fee at the annual rate of
.40% of the Fund's average daily net assets and indirectly pays for investment
management services through its investment in the Portfolio (see Note B of Notes
to Financial Statements of the Portfolio). The Agreement provides that, if with
respect to any fiscal year of the Fund, its total operating expenses plus its
pro rata portion of the Portfolio's operating expenses (including the fees
payable to Management but excluding interest, taxes, brokerage commissions, and
extraordinary expenses) exceed the most restrictive of the expense limitations
imposed by securities laws of the states in which the Fund's shares are
qualified for sale, the administration fees for that fiscal year will be reduced
by the amount of such excess, provided that Management has no obligation to
9
<PAGE>
reimburse the Fund for any such expenses that exceed the administration fee. The
most restrictive expense limitation to which the Fund is currently subject is
2 1/2% of the first $30 million of average daily net assets, 2% of the next $70
million of average daily net assets, and 1 1/2% of any additional average daily
net assets. No reduction in the administration fee as a result of the state
expense limitation was required for the period from August 19, 1996 to August
31, 1996.
Management acts as agent in arranging for the sale of Fund shares without
commission and bears advertising and promotion expenses. The trustees of the
Trust have adopted a plan pursuant to Rule 12b-1 under the 1940 Act ("Plan").
The Plan provides that, as compensation for administrative and other services
provided for the Fund, its activities and expenses related to the sale and
distribution of Fund shares, and ongoing services provided to investors in the
Fund, Management receives from the Fund a fee at the annual rate of .25% of the
Fund's average daily net assets. Management pays this amount to Institutions
that distribute Fund shares and provide services to the Fund and its
shareholders. Those Institutions may use the payments for, among other purposes,
compensating employees engaged in sales and/or shareholder servicing. The amount
of fees paid by the Fund during any year may be more or less than the cost of
distribution and other services provided to the Fund. NASD rules limit the
amount of annual distribution fees that may be paid by a mutual fund and impose
a ceiling on the cumulative distribution fees paid. The Trust's Plan complies
with those rules.
Management has voluntarily undertaken until December 31, 1997 to reimburse
the Fund for its operating expenses and its pro rata share of the Portfolio's
operating expenses (excluding interest, taxes, brokerage commissions, and
extraordinary expenses) which exceed, in the aggregate, 1.50% per annum of the
Fund's average daily net assets. For the period from August 19, 1996 to August
31, 1996, such excess expenses amounted to $13,840.
Prior to the inception of the Fund, Management had voluntarily undertaken to
pay certain organizational expenses of the Fund as an advance. Those expenses
will be repaid by the Fund to Management in the future, and are included under
the caption Payable for Fund expenses in the Statement of Assets and
Liabilities.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger&Berman, L.P. ("Neuberger"), a member firm of The
New York Stock Exchange and sub-adviser to the Portfolio. Several individuals
who are officers and/or trustees of the Trust are also partners of Neuberger
and/or officers and/or directors of Management.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statement
of Operations, under the caption Expenses from Portfolio, is less than .01% of
the Fund's average daily net assets.
10
<PAGE>
The Fund also has a distribution agreement with Management, which receives no
compensation therefor and no commissions for sales or redemptions of shares of
beneficial interest of the Fund.
NOTE C -- INVESTMENT TRANSACTIONS:
During the period from August 19, 1996 to August 31, 1996, additions and
reductions in the Fund's investment in the Portfolio amounted to $104,273 and
$0, respectively.
11
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Assets
The following table includes selected data for a share outstanding throughout
the period and other performance information derived from the Financial
Statements. The per share amounts and ratios which are shown reflect income and
expenses, including the Fund's proportionate share of the Portfolio's income and
expenses. It should be read in conjunction with the Portfolio's Financial
Statements and notes thereto.
<TABLE>
<CAPTION>
Period from
August 19,
1996(1)
to August 31,
1996
----------------
<S> <C>
Net Asset Value, Beginning of Period $ 10.00
------
Income From Investment Operations
Net Investment Income --
Net Gains or Losses on Securities (both realized and
unrealized) (.09 )
------
Total From Investment Operations (.09 )
------
Net Asset Value, End of Period $ 9.91
------
Total Return+ -0.90%(2)
------
Ratios/Supplemental Data
Net Assets, End of Period (in thousands) $ 103.5
------
Ratio of Expenses to Average Net Assets(3) 1.50%(4)
------
Ratio of Net Investment Income to Average Net Assets(3) 2.38%(4)
------
</TABLE>
SEE NOTES TO FINANCIAL HIGHLIGHTS
12
<PAGE>
NOTES TO FINANCIAL HIGHLIGHTS
Neuberger&Berman August 31, 1996
- ----------------------------------------------------------------------
Partners Assets
1)The date investment operations commenced.
2)Not annualized.
3)After reimbursement of expenses by the administrator as described in Note B of
Notes to Financial Statements. Had the administrator not undertaken such
action the annualized ratios to average daily net assets would have been:
<TABLE>
<CAPTION>
PERIOD FROM
AUGUST 19,
1996
TO AUGUST
31, 1996
- -------------------------------------------------
<S> <C>
Expenses 2.50%
-----
Net Investment Income 1.38%
-----
</TABLE>
4)Annualized.
+ Total return based on per share net asset value reflects the effects of
changes in net asset value on the performance of the Fund during the period
and assumes dividends and capital gain distributions, if any, were reinvested.
Results represent past performance and do not guarantee future results.
Investment returns and principal may fluctuate and shares when redeemed may be
worth more or less than original cost. Total return would be lower if
Management had not reimbursed certain expenses.
13
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees
Neuberger&Berman Equity Assets and
Shareholders of Neuberger&Berman Partners Assets
We have audited the accompanying statement of assets and liabilities of
Neuberger&Berman Partners Assets, one of the series comprising Neuberger& Berman
Equity Assets (the "Trust"), as of August 31, 1996, and the related statements
of operations and changes in net assets, and financial highlights for the period
from August 19, 1996 (commencement of operations) to August 31, 1996. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit.
We conducted our audit 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Neuberger&Berman Partners Assets at August 31, 1996, the results of its
operations, and changes in its net assets, and financial highlights for the
period from August 19, 1996 (commencement of operations) to August 31, 1996, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Ernst & Young LLP
Boston, Massachusetts
October 3, 1996
14
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1996
- --------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
TOP TEN EQUITY HOLDINGS
---------------------------------------------------
HOLDING PERCENTAGE
<C> <S> <C>
1. Wells Fargo 2.4%
2. Price/Costco 2.3%
3. Columbia/HCA Healthcare 2.3%
4. Travelers Group 2.1%
5. W.R. Grace 2.1%
6. Knight-Ridder 2.1%
7. Progressive Corp. 2.1%
8. Revco D.S. 2.0%
9. Warner-Lambert 2.0%
10. Comcast Corp. Class A Special 2.0%
</TABLE>
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
COMMON STOCKS (89.8%)
AEROSPACE (2.7%)
559,400 Litton Industries $ 26,082
322,400 Lockheed Martin 27,122
------------
53,204
------------
BANKING & FINANCIAL
SERVICES (9.0%)
630,300 American Express 27,576
782,100 Capital One Financial 23,561
459,100 CITICORP 38,220
1,403,400 Countrywide Credit Industries 33,857
410,100 H & R Block 10,252
190,566 Wells Fargo 47,403
------------
180,869
------------
BUILDING, CONSTRUCTION &
REFURNISHING (1.9%)
1,300,000 USG Corp. $ 37,050 (2)
------------
BUSINESS SERVICES (0.9%)
300,000 Dun & Bradstreet 17,288
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
CHEMICALS (3.4%)
300,000 duPont 24,637
11,000 Eastman Chemical 615
648,500 W.R. Grace 42,558
------------
67,810
------------
COMMUNICATIONS (0.9%)
500,000 Vodafone Group ADR 18,938
------------
CONSUMER GOODS & SERVICES (1.3%)
610,000 Tupperware Corp. 26,687
------------
DIVERSIFIED (1.9%)
210,000 Anheuser Busch 15,907
60,000 Mannesmann AG ADR 21,681
------------
37,588
------------
ELECTRONICS (2.1%)
900,000 KLA Instruments 17,775 (2)
500,000 Loral Space & Communications 7,000
450,300 Sundstrand Corp. 16,830
------------
41,605
------------
ENTERTAINMENT (4.0%)
1,000,000 Mirage Resorts 23,250 (2)
760,300 Royal Caribbean Cruises 20,053
1,071,700 Time Warner 35,768
------------
79,071
------------
FOOD & DRUG STORES (2.1%)
1,590,500 Revco D.S. $ 40,955 (2)
------------
FOOD & TOBACCO (2.5%)
1,200,000 IBP, Inc. 28,050
800,000 RJR Nabisco Holdings 21,100
------------
49,150
------------
HEALTH CARE (4.0%)
550,000 Ciba-Geigy ADR 34,513
799,900 Columbia/HCA Healthcare 45,094
------------
79,607
------------
</TABLE>
15
<PAGE>
SCHEDULE OF INVESTMENTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
INDUSTRIAL GOODS & SERVICES (6.4%)
702,500 AK Steel Holding 26,168
600,000 Crown Cork & Seal 28,050
357,400 Goodyear Tire & Rubber 16,306
1,455,000 Owens-Illinois 22,371 (2)
326,300 Varity Corp. 16,396 (2)
450,000 XTRA Corp. 19,519
------------
128,810
------------
INSURANCE (12.1%)
722,400 Allstate Corp. 32,237
1,142,500 Equitable Cos. 28,134
1,164,200 EXEL Ltd. 39,001
325,000 MBIA, Inc. 26,487
641,775 Orion Capital 32,249
770,000 Progressive Corp. 41,869
988,200 Travelers Group 42,863
------------
242,840
------------
MEDIA (4.9%)
8,671,205 Australis Media (Ordinary
Shares) $ 1,235 (2)
2,500,000 Comcast Corp. Class A Special 40,312
1,245,000 Knight-Ridder 42,019
450,000 Viacom Inc. Class B 14,175 (2)
------------
97,741
------------
MINING (1.4%)
798,200 Freeport-McMoRan 27,438
------------
OIL & GAS (4.2%)
2,400,000 Gulf Canada Resources 14,400
467,600 Noble Affiliates 18,763
269,800 Schlumberger, Ltd. 22,764
800,950 Tejas Gas 27,833 (2)
------------
83,760
------------
PAPER & FOREST PRODUCTS (1.7%)
1,475,000 Fort Howard 34,847 (2)
------------
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
PHARMACEUTICAL (2.0%)
680,000 Warner-Lambert 40,460
------------
PUBLISHING & BROADCASTING (0.5%)
961,000 Hollinger International 10,451
------------
RAILROADS (1.6%)
427,100 Union Pacific 31,125
------------
REAL ESTATE (6.0%)
400,000 Beacon Properties 10,900
350,700 CBL & Associates Properties 8,066
575,000 Del Webb 10,350
742,300 Hospitality Properties Trust $ 19,857
2,555,100 Host Marriott 35,133 (2)
316,700 Irvine Apartment Communities 7,126
377,000 Macerich Co. 8,105
367,300 Starwood Lodging Trust 13,957
155,000 Vornado Realty Trust 6,452
------------
119,946
------------
RETAILING (1.8%)
475,000 Harcourt General 22,741
300,000 Melville Corp. 12,675
------------
35,416
------------
RETAILING & APPAREL (3.4%)
555,200 Nordstrom, Inc. 21,653
2,350,000 Price/Costco 46,706 (2)
------------
68,359
------------
SPECIALTY CHEMICAL (0.3%)
180,000 Millipore Corp. 6,885
------------
TECHNOLOGY (6.8%)
400,000 Applied Materials 9,700 (2)
474,700 Autodesk, Inc. 10,918
1,200,000 Komag, Inc. 25,500 (2)
500,000 Seagate Technology 24,000 (2)
</TABLE>
16
<PAGE>
August 31, 1996
- --------------------------------------------------------------------------------
Partners Portfolio (Cont'd)
<TABLE>
<CAPTION>
Market
Value(1)
Number (000's
of Shares omitted)
- ----------- ------------
<C> <S> <C>
600,000 Texas Instruments 28,050
702,500 Xerox Corp. 38,550
------------
136,718
------------
TOTAL COMMON STOCKS (COST
$1,563,649) 1,794,618
------------
PREFERRED STOCKS (0.6%)
2,277,000 RJR Nabisco, Ser. C, Dep.
Shares (COST $15,318) $ 12,239
------------
<CAPTION>
Principal
Amount
- -----------
<C> <S> <C>
U.S. TREASURY SECURITIES (8.4%)
$169,230,000 U.S. Treasury Bills, 4.925% -
5.26%, due 9/19/96 - 12/12/96
(COST $167,943) 168,009
------------
<CAPTION>
Principal
Amount
- -----------
<C> <S> <C>
SHORT-TERM CORPORATE NOTES (1.5%)
30,000,000 General Electric Capital
Corp., 5.233%, due 9/9/96
(COST $30,000) 30,000 (3)
------------
TOTAL INVESTMENTS (100.3%)
(COST $1,776,910) 2,004,866 (4)
Liabilities, less cash,
receivables and other assets
[(0.3%)] (5,263 )
------------
TOTAL NET ASSETS (100.0%) $ 1,999,603
------------
</TABLE>
17
<PAGE>
NOTES TO SCHEDULE OF INVESTMENTS
Neuberger&Berman August 31, 1996
- ----------------------------------------------------------------------
Partners Portfolio
1)Investment securities of the Portfolio are valued at the latest sales price;
securities for which no sales were reported, unless otherwise noted, are
valued at the mean between the closing bid and asked prices. The Portfolio
values all other securities by a method that the trustees of Equity Managers
Trust believes accurately reflects fair value. Foreign security prices are
furnished by independent quotation services expressed in local currency
values. Foreign securities are translated from the local currency into U.S.
dollars using current exchange rates. Short-term debt securities with less
than 60 days until maturity at the time of purchase may be valued at cost
which, when combined with interest earned, approximates market value.
2)Non-income producing security.
3)At cost, which approximates market value.
4)The cost of investments for Federal income tax purposes was $1,781,852,000. At
August 31, 1996, gross unrealized appreciation of investments was
$268,475,000 and gross unrealized depreciation of investments was $45,461,000,
resulting in net unrealized appreciation of $223,014,000, based on cost for
Federal income tax purposes.
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
August 31,
(000'S OMITTED) 1996
-------------
<S> <C>
ASSETS
Investments in securities, at market value*
(Note A) -- see Schedule of Investments $ 2,004,866
Cash 49
Receivable for securities sold 3,761
Dividends and interest receivable 1,710
Prepaid expenses and other assets 73
Deferred organization costs (Note A) 34
-------------
2,010,493
-------------
LIABILITIES
Payable for securities purchased 9,975
Payable to investment manager (Note B) 802
Accrued expenses 113
-------------
10,890
-------------
NET ASSETS Applicable to Investors' Beneficial
Interests $ 1,999,603
-------------
NET ASSETS consist of:
Paid-in capital $ 1,771,647
Net unrealized appreciation in value of
investment securities 227,956
-------------
NET ASSETS $ 1,999,603
-------------
*Cost of investments $ 1,776,910
-------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
STATEMENT OF OPERATIONS
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
For the
Year
Ended
August 31,
(000'S OMITTED) 1996
-----------
<S> <C>
INVESTMENT INCOME
Income:
Dividend income $ 29,261
Interest income 3,659
Foreign taxes withheld (Note A) (150 )
-----------
Total income 32,770
-----------
Expenses:
Investment management fee (Note B) 8,868
Custodian fees (Note B) 349
Insurance expense 43
Auditing fees 43
Trustees' fees and expenses 28
Amortization of deferred organization and
initial offering expenses (Note A) 18
Legal fees 14
Accounting fees 10
Miscellaneous 3
-----------
Total expenses 9,376
-----------
Net investment income 23,394
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investment securities
sold 240,765
Change in net unrealized appreciation of
investment securities (30,217 )
-----------
Net gain on investments 210,548
-----------
Net increase in net assets resulting from
operations $ 233,942
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Neuberger&Berman
- ----------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
Year
Ended
August 31,
(000'S OMITTED) 1996 1995
--------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income $ 23,394 $ 15,524
Net realized gain on investments
sold 240,765 165,254
Change in net unrealized
appreciation of investments (30,217) 109,257
--------------------------
Net increase in net assets resulting
from operations 233,942 290,035
--------------------------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Additions 309,196 100,895
Reductions (167,061) (107,688)
--------------------------
Net increase (decrease) in net
assets resulting from transactions
in investors' beneficial interests 142,135 (6,793)
--------------------------
NET INCREASE IN NET ASSETS 376,077 283,242
NET ASSETS:
Beginning of year 1,623,526 1,340,284
--------------------------
End of year $ 1,999,603 $ 1,623,526
--------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
August 31, 1996
- ----------------------------------------------------------------------
Equity Managers Trust
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
1) GENERAL: Neuberger&Berman Partners Portfolio (the "Portfolio") is a separate
operating series of Equity Managers Trust ("Managers Trust"), a New York
common law trust organized as of December 1, 1992. Managers Trust is
registered as a diversified, open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). Other regulated
investment companies sponsored by Neuberger&Berman Management Incorporated
("Management"), whose financial statements are not presented herein, also
invest in the Portfolio and other portfolios of Managers Trust.
The assets of each series belong only to that series, and the liabilities
of each series are borne solely by that series and no other.
2) PORTFOLIO VALUATION: Investment securities are valued as indicated in the
notes following the Portfolio's Schedule of Investments.
3) FOREIGN CURRENCY TRANSLATION: The accounting records of the Portfolio are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange of such currency against the U.S.
dollar to determine the value of investments, other assets and liabilities.
Purchase and sale prices of securities, and income and expenses are
translated into U.S. dollars at the prevailing rate of exchange on the
respective dates of such transactions.
4) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Portfolio
becomes aware of the dividends. Interest income, including original issue
discount, where applicable, and accretion of discount on short-term
investments, is recorded on the accrual basis. Realized gains and losses from
securities transactions are recorded on the basis of identified cost.
5) FEDERAL INCOME TAXES: Managers Trust intends to comply with the
requirements of the Internal Revenue Code of 1986, as amended. Each portfolio of
Managers Trust also intends to conduct its operations so each of its
investors will be able to qualify as a regulated investment company. Each
portfolio will be treated as a partnership for Federal income tax purposes
and is therefore not subject to Federal income tax.
6) FOREIGN TAXES: Foreign taxes withheld represent amounts withheld by foreign
tax authorities, net of refunds recoverable.
22
<PAGE>
7) ORGANIZATION EXPENSES: Expenses incurred by the Portfolio in connection
with its organization are being amortized by the Portfolio on a straight-line
basis over a five-year period. At August 31, 1996, the unamortized balance of
such expenses amounted to $34,014.
8) EXPENSE ALLOCATION: The Portfolio bears all costs of its operations. Expenses
incurred by Managers Trust with respect to any two or more portfolios are
allocated in proportion to the net assets of such portfolios, except where a
more appropriate allocation of expenses to each portfolio can otherwise be
made fairly. Expenses directly attributable to a portfolio are charged to
that portfolio.
9) SECURITY LENDING: Portfolio securities loans involve certain risks in the
event a borrower should fail financially, including delays or inability to
recover the lent securities or foreclose against the collateral. The
investment manager, under the supervision of Managers Trust's Board of
Trustees, monitors the creditworthiness of the parties to whom the Portfolio
makes security loans. The Portfolio will not lend securities on which covered
call options have been written, or lend securities on terms which would
prevent each of their investors from qualifying as a regulated investment
company. Portfolio securities loans to Neuberger&Berman, L.P. ("Neuberger"),
the Portfolio's principal broker, are made in accordance with an exemptive
order issued by the Securities and Exchange Commission under the 1940 Act.
The Portfolio receives cash as collateral against the lent securities, which
must be maintained at not less than 100% of the market value of the lent
securities during the period of the loan. The Portfolio receives income
earned on the lent securities and a portion of the income earned on the cash
collateral. During the year ended August 31, 1996, the Portfolio lent
securities to Neuberger.
10)REPURCHASE AGREEMENTS: The Portfolio may enter into repurchase agreements
with institutions that the Portfolio's investment manager has determined are
creditworthy. Each repurchase agreement is recorded at cost. The Portfolio
requires that the securities purchased in a repurchase transaction be
transferred to the custodian in a manner sufficient to enable the Portfolio
to obtain those securities in the event of a default under the repurchase
agreement. The Portfolio monitors, on a daily basis, the value of the
securities transferred to ensure that their value, including accrued
interest, is greater than amounts owed to the Portfolio under each such
repurchase agreement.
NOTE B -- MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
The Portfolio retains Management as its investment manager under a Management
Agreement. For such investment management services, the Portfolio pays
Management a fee at the annual rate of 0.55% of the first $250 million of the
23
<PAGE>
Portfolio's average daily net assets, 0.525% of the next $250 million, 0.50% of
the next $250 million, 0.475% of the next $250 million, 0.45% of the next $500
million, and 0.425% of average daily net assets in excess of $1.5 billion.
All of the capital stock of Management is owned by individuals who are also
general partners of Neuberger, a member firm of The New York Stock Exchange and
sub-adviser to the Portfolio. Neuberger is retained by Management to furnish it
with investment recommendations and research information without cost to the
Portfolio. Several individuals who are officers and/or trustees of Managers
Trust are also partners of Neuberger and/or officers and/or directors of
Management.
The Portfolio has an expense offset arrangement in connection with its
custodian contract. The impact of this arrangement, reflected in the Statement
of Operations, is less than .01% of the Portfolio's average daily net assets.
NOTE C -- SECURITIES TRANSACTIONS:
During the year ended August 31, 1996, there were purchase and sale
transactions (excluding short-term securities) of $1,715,861,680 and
$1,705,874,758, respectively.
During the year ended August 31, 1996, brokerage commissions on securities
transactions amounted to $4,697,854, of which Neuberger received $2,741,666 and
other brokers received $1,956,188.
In addition, Neuberger's share of the total interest income earned for the
year ended August 31, 1996, from the collateralization of securities loaned to
or through Neuberger was $118,041.
24
<PAGE>
FINANCIAL HIGHLIGHTS
Neuberger&Berman
- --------------------------------------------------------------------------------
Partners Portfolio
<TABLE>
<CAPTION>
Period from
August 2
1993,
(Commencement
of
Operations)
to
Year Ended August 31, August 31,
1996 1995 1994 1993
-------------------------------------------
<S> <C> <C> <C> <C>
RATIOS TO AVERAGE NET ASSETS:
Expenses .51% .53% .54% .54%(1)
-------------------------------------------
Net Investment Income 1.26% 1.13% .75% 1.19%(1)
-------------------------------------------
Portfolio Turnover Rate 96% 98% 75% 8%
-------------------------------------------
Average Commission Rate Paid $ 0.0494 -- -- --
-------------------------------------------
Net Assets, End of Year (in millions) $1,999.6 $1,623.5 $1,340.3 $1,182.1
-------------------------------------------
</TABLE>
1) Annualized.
25
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Trustees
Equity Managers Trust and
Owners of Beneficial Interest of
Neuberger&Berman Partners Portfolio
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of the Neuberger&Berman Partners
Portfolio, one of the series comprising Equity Managers Trust (the "Trust"), as
of August 31, 1996, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Trust'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 audits 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 and financial highlights. Our procedures included confirmation of
securities owned as of August 31, 1996, by correspondence with the custodian and
brokers or other appropriate auditing procedures where replies from brokers were
not received. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Neuberger&Berman Partners Portfolio of Equity Managers Trust at August 31, 1996,
the results of their operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts Ernst & Young LLP
October 3, 1996
26
<PAGE>
OTHER INFORMATION
DIRECTORY OFFICERS AND TRUSTEES
INVESTMENT MANAGER, ADMINISTRATOR Stanley Egener
AND DISTRIBUTOR CHAIRMAN OF THE BOARD
Neuberger&Berman Management AND TRUSTEE
Incorporated Lawrence Zicklin
605 Third Avenue 2nd Floor PRESIDENT AND TRUSTEE
New York, NY 10158-0180 Faith Colish
800-877-9700 TRUSTEE
Institutional Services 800-366-6264 Donald M. Cox
SUB-ADVISER TRUSTEE
Neuberger&Berman, L.P. Alan R. Gruber
605 Third Avenue TRUSTEE
New York, NY 10158-3698 Howard A. Mileaf
CUSTODIAN AND SHAREHOLDER TRUSTEE
SERVICING AGENT Edward I. O'Brien
State Street Bank and Trust Company TRUSTEE
225 Franklin Street John T. Patterson, Jr.
Boston, MA 02110 TRUSTEE
ADDRESS CORRESPONDENCE TO: John P. Rosenthal
Neuberger&Berman Funds TRUSTEE
Institutional Services Cornelius T. Ryan
605 Third Avenue, 2nd Floor TRUSTEE
New York, NY 10158-0180 Gustave H. Shubert
800-366-6264LEGAL COUNSEL TRUSTEE
Kirkpatrick & Lockhart LLP Daniel J. Sullivan
1800 Massachusetts Avenue, NW VICE PRESIDENT
2nd Floor Michael J. Weiner
Washington, DC 20036-1800 VICE PRESIDENT
INDEPENDENT AUDITORSErnst & Young Richard Russell
LLP TREASURER
200 Clarendon Street Claudia A. Brandon
Boston, MA 02116 SECRETARY
Barbara DiGiorgio
ASSISTANT TREASURER
Celeste Wischerth
ASSISTANT TREASURER
Stacy Cooper-Shugrue
ASSISTANT SECRETARY
C. Carl Randolph
ASSISTANT SECRETARY
Neuberger&Berman Management Inc. and Neuberger&Berman Partners Assets are
service marks of Neuberger& Berman Management Inc.
- -C- 1996 Neuberger&Berman Management Inc.
27
<PAGE>
ANNUAL REPORT
-----------------------
August 31, 1996
Neuberger&Berman Mananagement Inc.-Registered Trademark-
605 THIRD AVENUE 2ND FLOOR Neuberger&Berman
NEW YORK, NY_10158-0180 EQUITY ASSETS-SM-
SHAREHOLDER SERVICES
800.877.9700 Neuberger&Berman
INSTITUTIONAL SERVICES PARTNERS ASSETS
800.366.6264
[LOGO]
Statistics and projections in this report are derived from sources deemed to be
reliable but cannot be regarded as a representation of future results of the
Fund. This report is prepared for the general information of shareholders and is
not an offer of shares of the Fund.
Shares are sold only through the currently effective prospectus, which must
precede or accompany this report.
PRINTED ON RECYCLED PAPER
WITH SOY BASED INKS NBEAAR020896
<PAGE>
