BlackRock Fund Investors I
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Annual Report
December 31, 1995
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BlackRock Fund Investors I
Statement of Assets and Liabilities
December 31, 1995
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Assets
Investment in BlackRock Asset Investors, at estimated
fair value (cost $37,687,147) (Note 1) $ 35,226,267
Notes receivable (Note 4) 64,000
Deferred organization expenses and other assets (Note 1) 112,700
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35,402,967
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Liabilities
Payable to BlackRock Asset Investors 678,962
Master administration fee payable (Note 2) 165,166
Payable for organization expenses 113,087
Notes payable (Note 4) 64,000
Directors' fee payable 27,154
Other accrued expenses 37,813
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1,086,182
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Net Assets $ 34,316,785
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Net assets were comprised of:
Shares of beneficial interest, at par (Note 4) $ 501
Paid-in capital in excess of par 42,050,725
Receivable for shares of beneficial interest (Note 4) (4,359,993)
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37,691,233
Net investment loss (913,568)
Net unrealized depreciation on investments (2,460,880)
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Net assets, December 31, 1995 $ 34,316,785
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Net asset value per share $ 684.36
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Total shares outstanding at end of period 50,144.70
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See Notes to Financial Statements.
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BlackRock Fund Investors I
Statement of Operations
For the Period March 29, 1995* through December 31,1995
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Net Investment Loss
Income
Interest (net of interest expense of $4,161) $ --
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Expenses
Master administration (Note 2) 791,482
Directors 60,791
Amortization of deferred organization expenses 19,734
Audit 14,440
Legal 10,153
Custodian 9,867
Transfer agent 3,970
Miscellaneous 3,131
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Total expenses 913,568
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Net investment loss (913,568)
Realized and Unrealized Loss
on Investments (Note 3)
Net unrealized depreciation on investments (2,460,880)
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Net Decrease In Net Assets
Resulting from Operations $ (3,374,448)
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* Commencement of investment operations.
See Notes to Financial Statements.
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BlackRock Fund Investors I
Statement of Cash Flows
For the Period March 29, 1995* through December 31, 1995
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Increase (Decrease) in Cash
Cash flows used for operating activities:
Interest received $ 4,161
Expenses paid (8,247)
Purchase of long-term portfolio investments (37,687,147)
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Net cash flows used for operating activities (37,691,233)
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Cash flows provided by financing activities:
Proceeds from Trust shares issued 37,691,233
Proceeds from notes sold 64,000
Cost of notes purchased (64,000)
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Net cash flows provided by financing activities 37,691,233
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Net increase in cash --
Cash, beginning of period --
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Cash, end of period $ --
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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 $ (3,374,448)
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Increase in investments (37,687,147)
Increase in unrealized depreciation 2,460,880
Increase in deferred organization expenses and
other assets (112,700)
Increase in accrued expenses and other liabilities 1,022,182
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Total adjustments (34,316,785)
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Net cash flows used for operating activities $ (37,691,233)
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* Commencement of investment operations.
See Notes to Financial Statements.
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BlackRock Fund Investors I
Statement of Changes in Net Assets
For the Period March 29, 1995* through December 31, 1995
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Increase (Decrease) in Net Assets
Operations:
Net investment loss $ (913,568)
Net unrealized depreciation
on investments (2,460,880)
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Net decrease in net assets resulting
from operations (3,374,448)
Proceeds from shares of beneficial interest issued 37,691,233
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Net increase (34,316,785)
Net Assets
Beginning of period --
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End of period $ 34,316,785
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* Commencement of investment operations.
See Notes to Financial Statements.
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BlackRock Fund Investors I
Financial Highlights
For the Period March 29, 1995* through December 31, 1995
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PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period $ 1,000.00
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Net investment loss (88.36)
Net unrealized loss on
investments (227.28)
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Net decrease from investment operations (315.64)
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Net asset value, end of period $ 684.36
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TOTAL INVESTMENT RETURN (a) (31.56%)
RATIOS TO AVERAGE NET ASSETS:
Expenses (7.73%)(b)(c)
Net investment loss (7.73%)(b)(c)
SUPPLEMENTAL DATA:
Average net assets (in thousands) $15,573
Portfolio turnover --
Net assets, end of period (in thousands) $34,317
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* 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.
(c) The ratio of expenses and net investment loss to total investor capital
commitments of $194,950,055 on an annualized basis is 0.62% and 0.62%,
respectively.
Contained above is audited 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.
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BlackRock Fund Investors I
Notes to Financial Statements
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Note 1. Organization and Accounting Policies
BlackRock Fund Investors I ("Fund I") is a non-diversified closed-end
investment company organized as a Delaware business trust. Fund I invests all of
its investable 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 company and has the same investment
objective as Fund I. The value of Fund I's investment in BAI reflects Fund I's
proportionate interest in the net assets of BAI. The performance of Fund I 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 I's
financial statements.
The following is a summary of significant accounting policies followed by
Fund I.
Securities Valuation: Fund I's interest in BAI is valued by Fund I at its
proportionate interest in the net asset value of BAI (34.89% at December 31,
1995). 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 I amortizes premium or accretes discount on securities
purchased using the interest method.
Taxes: It is Fund I's intention 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 I declares and distributes dividends at least
annually first from net investment income, then from realized short-term capital
gains and other sources. Fund I 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.
Master Administration, Administration and Other Expenses: Master administration
and other expenses are recorded on the accrual basis.
Deferred Organization Expenses: A total of $130,484 was incurred in connection
with the organization of Fund I. These costs have been deferred and are being
amortized ratably over a period of 60 months from the date Fund I commenced
investment operations.
Note 2. Agreements
Fund I has a Master Administration Agreement with BlackRock Financial
Management, Inc. (the "Master Administrator ") which provides that during the
Commitment Period the Trust will pay to the Master Administrator for its
services (which are solely administrative in nature) a semi-annual fee, in
arrears, in an amount equal to .50% of the aggregate Capital Commitments, on an
annualized basis. Subsequent to the Commitment Period, the semi-annual fee
payable in arrears to the Master Administrator is .50% of the weighted average
capital invested during the relevant period on an annualized basis.
Fund I 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 I.
Pursuant to the agreements, the Master Administrator provides various
administrative services, provides office space and pays the compensation of
officers of Fund I, who are affiliated persons of the Master Administrator.
State Street pays occupancy and certain clerical and accounting costs of Fund I.
Fund I bears all other costs and expenses.
Certain trustees of BAI and Fund I, who are not interested parties, are paid
a fee for their services in the amount of $40,000 each on an annual basis plus
telephonic meeting fees not to be exceed $500 annually and certain out-of-pocket
expenses.
Note 3. Portfolio Securities
Purchases of investment securities for the period ended December 31, 1995
aggregated $37,687,147. The federal income tax basis of the investments of Fund
I at December 31, 1995 was substantially the same as the basis for financial
reporting.
Note 4. Notes
Fund I has issued and sold notes in the aggregate principal amount of
$64,000 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 Fund I.
Note 5. Capital
Fund I has obtained capital commitments from investors in the form of
subscription agreements to engage in the real estate debt investment activities
described herein. When notified by Fund I, in accordance with the Declaration of
Trust, the investors shall make capital contributions as are required to satisfy
their outstanding capital commitments. Fund I must give fourteen days advance
notice before contributions are due. As of December 31, 1995, the total capital
commitments from investors was $194,950,055 of which $37,691,233 had been called
and received. On December 29, 1995, Fund I made a capital call, received on
January 12, 1996, totaling $4,359,993 which is recorded net in the capital
account of Fund I at December 31, 1995.
Note 6. Quarterly Data (Unaudited)
<TABLE>
<CAPTION>
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Net realized and
unrealized
Net investment loss on Dividends and Period end
Quarterly Total loss investments Distributions net asset
Period income Amount Per Share Amount Per Share Amount Per Share value
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 29, 1995*
to April 30, 1995 - ($197,081) ($38.30) ($454,714) ($88.36) - - $ 873.33
May 1, 1995
to June 30, 1995 - ($158,177) ($20.15) ($352,836) ($45.52) - - $812.78
July 1, 1995
to Sept. 30, 1995 - ($280,317) ($23.03) ($894,647) ($74.05) - - $720.68
October 1, 1995
to Dec. 31, 1995 - ($277,992) ($6.88) ($758,678) ($19.35) - - $684.36
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<FN>
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* Commencement of investment operations.
</FN>
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BLACKROCK FUND INVESTORS I
REPORT OF INDEPENDENT AUDITORS
The Shareholders and Board of Trustees of
BlackRock Fund Investors I:
We have audited the accompanying statement of assets and liabilities of
BlackRock Fund Investors I as of December 31, 1995 and the related statements of
operations, cash flows, changes in net assets and financial highlights for the
period March 29, 1995 (commencement of investment operations) to December 31,
1995. These financial statements are the responsibility of the Trustis
management. Our responsibility is to express an opinion on these financial
statements 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. Our
procedures included confirmation of securities owned as of December 31, 1995, by
correspondence with BlackRock Asset Investors. 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, such financial statements present fairly, in all material
respects, the financial position of BlackRock Fund Investors I as of December
31, 1995, and the results of its operations, its cash flows, the changes in its
net assets and the financial highlights for the period March 29, 1995
(commencement of operations) to December 31, 1995 in conformity with generally
accepted accounting principles.
As explained in Note 1, the financial statements include investment in BlackRock
Asset Investors valued at $35,226,272 (102.7% of net assets), whose value of
underlying investments have been estimated by the Board of Trustees in the
absence of readily ascertainable market values. We have reviewed the procedures
used by the Board of Trustees in arriving at its estimate of value of such
investments and have inspected underlying documentation, and, in the
circumstances, we believe the procedures are reasonable and the documentation
appropriate. However, because of the inherent uncertainty of valuation, those
estimated values may differ significantly from the values that would have been
used had a ready market for the investments existed, and the differences could
be material.
Deloitte & Touche LLP
New York, New York
February 9, 1996
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Trustees
Laurence D. Fink, Chairman
John C. Deterding
Charles Froland
Donald G. Drapkin
Wesley R. Edens
James Grosfeld
Philip Halpern
Laurence E. Hirsch
Kendrick R. Wilson, III
Officers
Ralph L. Schlosstein, President
Wesley R. Edens, Chief Operating Officer
John R. Herbert, Managing Director
Robert I. Kauffman, Managing Director
Randal A. Nardone, Managing Director
Erik P. Nygaard, Managing Director
Henry Gabbay, Treasurer
Susan L. Wagner, Secretary
James Kong, Assistant Treasurer
J. Robert Small, Managing Director and Assistant Secretary
Master Administrator
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
Two World Financial Center
New York, NY 10281-1431
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
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 I
Two Heritage Drive
North Quincy, MA 02171
