BlackRock Fund Investors II
- --------------------------------------------------------------------------------
Semi-Annual Report
April 30, 1995
(Unaudited)
<PAGE>
<TABLE>
BlackRock Fund Investors II
Statement of Assets and Liabilities
April 30, 1995
(Unaudited)
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<S> <C>
Assets
Investment in BlackRock Asset Investors, at value (cost $4,183,801)
(Note 1)....................................................................... $ 3,814,093
Notes receivable (Note 4)........................................................... 21,000
Deferred organization expenses and other assets (Note 1)............................ 76,744
------
3,911,837
Liabilities
Payable for organization expenses................................................... 75,825
Advisory fee payable (Note 2)....................................................... 50,206
Notes payable (Note 4).............................................................. 21,000
Directors' fee payable ............................................................. 14,957
Other accrued expenses.............................................................. 10,133
------
172,121
Net Assets.......................................................................... $ 3,739,716
= =========
Net assets were comprised of:
Shares of beneficial interest, at par (Note 4)................................. $ 42
Paid-in capital in excess of par............................................... 4,385,828
Receivable for shares of beneficial interest (Note 4).......................... (202,069)
--------
4,183,801
Net investment income (loss)................................................... (74,377)
Net unrealized depreciation on investments..................................... (369,708)
--------
Net assets, April 30,1995...................................................... $ 3,739,716
= =========
Net asset value per share........................................................... $ 893.86
= ======
Total shares outstanding at end of period........................................... 4,183.801
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</TABLE>
See Notes to Financial Statements.
1
<PAGE>
<TABLE>
BlackRock Fund Investors II
Statement of Operations
For the Period March 30, 1995* through April 30,1995
(Unaudited)
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<S> <C>
Net Investment Income
Income
Interest (net of interest expense of $158)...................................... $ --
-
Expenses
Investment advisory............................................................. 50,206
Directors....................................................................... 14,957
Audit........................................................................... 4,138
Legal........................................................................... 2,493
Amortization of deferred organization expenses.................................. 1,288
Custodian....................................................................... 644
Transfer agent.................................................................. 446
Miscellaneous................................................................... 205
---
Total expenses............................................................... 74,377
------
Net investment income (loss).................................................... (74,377)
-------
Realized and Unrealized Loss
on Investments (Note 3)
Net unrealized depreciation on investments.......................................... (369,708)
--------
Net Decrease In Net Assets
Resulting from Operations....................................................... $ (444,085)
= ========
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</TABLE>
*Commencement of operations.
See Notes to Financial Statements.
2
<PAGE>
<TABLE>
BlackRock Fund Investors II
Statement of Cash Flows
For the Period March 30, 1995* through April 30, 1995
(Unaudited)
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<S> <C>
Increase (Decrease) in Cash Cash flows used for operating activities:
Purchase of long-term portfolio investments ...................... $ (4,183,801)
- ----------
Net cash flows used for operating activities ......................... (4,183,801)
----------
Cash flows provided by financing activities:
Proceeds from Trust shares issued ................................ 4,183,801
Proceeds from notes sold ......................................... 21,000
Cost of notes purchased .......................................... (21,000)
-------
Net cash flows provided by financing activities ...................... 4,183,801
---------
Net increase in cash ................................................. --
Cash at beginning of period........................................... --
Cash at end of period ................................................ $ --
=
Reconciliation of Net Decrease in Net
Assets Resulting from Operations
to Net Cash Flows Used for
Operating Activities
Net decrease in net assets resulting from operations ................. $ (444,085)
- --------
Increase in investments .............................................. (4,183,801)
Increase in unrealized depreciation .................................. 369,708
Increase in deferred organization expenses and other assets .......... (76,744)
Increase in accrued expenses and other liabilities.................... 151,121
-------
Total adjustments ................................................ (3,739,716)
----------
Net cash flows used for operating activities ......................... $ (4,183,801)
= ==========
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</TABLE>
*Commencement of operations.
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
BlackRock Fund Investors II
Statement of Changes in Net Assets
For the Period March 30, 1995* through April 30, 1995
(Unaudited)
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<S> <C>
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss).................................................... $ (74,377)
Net unrealized depreciation
on investments............................................................... (369,708)
--------
Net decrease in net assets resulting
from operations.............................................................. (444,085)
--------
Transactions in shares of beneficial interest:
Proceeds from shares issued..................................................... 4,183,801
---------
Net increase.................................................................... 3,739,716
Net Assets
Beginning of period................................................................. --
End of period....................................................................... $ 3,739,716
= =========
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</TABLE>
* Commencement of operations.
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
BlackRock Fund Investors II
Financial Highlights
For the Period March 30, 1995* through April 30, 1995
(Unaudited)
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<S> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period...................... $ 1,000.00
- --------
Net investment income (loss)........................... (17.78)
Net unrealized loss on
investments......................................... (88.36)
------
Net decrease from investment operations................... (106.14)
-------
Net asset value, end of period............................ $ 893.86
= ======
TOTAL INVESTMENT RETURN (a)............................... (10.61)%
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................................. 21% (b)
Net investment loss ...................................... (21)% (b)
SUPPLEMENTAL DATA:
Average net assets (in thousands) ........................ $3,977
Portfolio turnover ....................................... --
Net assets, end of period (in thousands).................. $3,740
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</TABLE>
* Commencement of investment operations.
(a) Total investment return is calculated assuming a purchase of a share of
beneficial interest at net asset value per share on the first day and a
sale at net asset value per share on the last day of the period reported.
Dividends are assumed, for purposes of this calculation, to be reinvested
at the net asset value per share on the payment date. Total investment
return for periods of less than one full year are not annualized.
(b) Annualized.
Contained above is unaudited operating performance based on an average
share of beneficial interest outstanding, total investment return, ratios
to average net assets and other supplemental data, for the period
indicated. This information has been determined based upon financial
information provided in the financial statements.
See Notes to Financial Statements.
5
<PAGE>
BlackRock Fund Investors II
Notes to Financial Statements
(Unaudited)
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Note 1. Organization and Accounting Policies
BlackRock Fund Investors II ("Fund II") is a non-diversified closed-end
investment company organized as a Delaware business trust. Fund II invests all
of its assets in BlackRock Asset Investors ("BAI" or the "Trust") which is a
Delaware business trust registered under the Investment Company Act of 1940 as a
non-diversified closed-end investment compaFund II invests all of its investable
assets in BAI which has the same investment objective as Fund II. The value of
Fund II's investment in BAI reflects Fund II's proportionate interest in the net
assets of BAI (22.31% at April 30, 1995). The performance of Fund II is directly
affected by the performance of BAI. The financial statements of BAI are included
in this report and should be read in conjunction with Fund II's financial
statements.
The following is a summary of significant accounting policies followed by
Fund II.
Securities Valuation: Fund II's interest in BAI is valued by Fund II at its
proportionate interest in the Net Asset Value of BAI. Valuation of securities by
BAI is discussed in Note 1 of BAI's Notes to Financial Statements which are
included elsewhere in this report.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and Fund II accretes premium or amortizes discount on securities
purchased using the interest method.
Taxes: It is Fund II's intention to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders.
Therefore, no federal income or excise tax provision is required.
Dividends and Distributions: Fund II declares and distributes dividends at least
annually first from net investment income, then from realized short-term capital
gains and other sources. Fund II also expects to pay distributions in the form
of return of paid-in capital. Net long-term capital gains, if any, in excess of
loss carryforwards are distributed at least annually. Dividends and
distributions are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
Investment Advisory, Administration and Other Expenses: Investment advisory,
administration and other expenses are recorded on the accrual basis.
Deferred Organization Expenses: A total expenditure of $75,825 was incurred in
connection with the organization of Fund II. These costs have been deferred and
are being amortized ratably over a period of 60 months from the date Fund II
commenced investment operations.
Note 2. Agreements
Fund II has a Master Administration Agreement with BlackRock Financial
Management, Inc. (the "Advisor") which provides that during the Commitment
Period the Trust will pay to the Advisor for its services (which are solely
administrative in nature) a semi-annual fee, in arrears, in an amount equal to
.25% of the aggregate Capital Commitments, on an annualized basis. Subsequent to
the Commitment Period, the semi-annual fee payable in arrears to the
6
<PAGE>
Advisor is .25% of the weighted average capital invested during the relevant
period on an annualized basis.
Fund II has also entered into an Administration Agreement with State Street
Bank and Trust Company ("State Street"). For its services under the
Administration Agreement, State Street receives no fees from Fund II.
Pursuant to the agreements, the Advisor provides various administrative
services, provides office space and pays the compensation of officers of Fund
II, who are affiliated persons of the Advisor. State Street pays occupancy and
certain clerical and accounting costs of Fund II. Fund II bear all other costs
and expenses.
Certain trustees of Fund II who are not interested parties are paid a fee
for their services in the amount of $40,000 each on an annual basis.
Note 3. Portfolio Securities
Purchases of investment securities for the period ended April 30, 1995
aggregated $4,183,801. The federal income tax basis of the investments of Fund
II at April 30, 1995 was substantially the same as the basis for financial
reporting and, accordingly, net and gross unrealized depreciation for federal
income tax purposes was $369,708.
Note 4. Notes
Fund II has issued and sold $21,000 aggregate principal amount of notes
(the "Notes") paying interest at a per annum rate of 2.50% over the yield of the
one-year constant maturity Treasury, redeemable annually by the holder and due
on dissolution of the issuer.
Note 5. Capital
Fund II has obtained Capital Commitments from institutions and other
accredited investors in the form of subscription agreements to engage in the
real estate debt investment activities described herein. When notified by Fund
II, in accordance with the Declaration of Trust, the investors shall make
capital contributions as are required to fill their outstanding Capital
Commitments. Fund II must give fourteen days advance notice before contributions
are due. As of April 30, 1995, the total outstanding Capital Commitments from
investors was $108,787,577. On March 15, 1995, Fund II made a capital call,
received on March 30, 1995, totaling $4,183,801. Additionally, on April 28,
1995, Fund II made a capital call totaling $202,069. This amount was outstanding
as of April 30, 1995 and is recorded net in the capital account of Fund II. On
May 15, 1995, the outstanding capital call was received in cash by Fund II.
On May 24, 1995, Fund II made another capital call, received on June 8,
1995, totaling $2,121,888.
Note 6. Quarterly Data
<TABLE>
<CAPTION>
- -------------------- ---------------- ------------------------ ------------------------ ---------------------- -------------
Net realized and
unrealized
Net Investment gains (losses) on Dividends and Period end
Quarterly Total Income (loss) investments Distributions net asset
Period income (loss) Amount Per Share Amount Per Share Amount Per Share value
------ ------------- ------ --------- ------ --------- ------ --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 30, 1995*
to April 30, 1995 - ($74,377) ($17.78) ($369,708) ($88.36) - - $893.86
- -------------------- ---------------- ------------------------ ------------------------ ---------------------- -------------
</TABLE>
- ---------------
* Commencement of operations.
7
<PAGE>
Trustees
Laurence D. Fink, Chairman
John C. Deterding
Donald G. Drapkin
Wesley R. Edens
James Grosfeld
Philip Halpern
Laurence E. Hirsch
Thomas E. Dobrowski
Kendrick R. Wilson, III
Officers
Ralph L. Schlosstein, President
Wesley R. Edens, Chief Operating Officer
John R. Herbert, Vice President
Robert I. Kauffman, Vice President
Randal A. Nardone, Vice President
Erik P. Nygaard, Vice President
Henry Gabbay, Treasurer
Susan L. Wagner, Secretary
James Kong, Assistant Treasurer
J. Robert Small, Assistant Secretary
Investment Adviser
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
Administrator, Custodian and Transfer Agent
State Street Bank and Trust Company
Two Heritage Drive
North Quincy, MA 02171
Independent Auditors
Deloitte & Touche LLP
2 World Financial Center
New York, NY 10281-1431
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 1995 were not audited and,
accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of Trust shares.
BlackRock Fund Investors II
Two Heritage Drive
North Quincy, MA 02171
