BLACKROCK FUND INVESTORS I
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SEMI-ANNUAL REPORT
JUNE 30, 1997 (UNAUDITED)
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BLACKROCK FUND INVESTORS I
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
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ASSETS
Investment in BlackRock Asset Investors, at estimated
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fair value (cost $190,124,338) (Notes 1 and 3) $ 191,889,797
Repurchase agreement dated 6/30/97
with State Street Bank and Trust, Co. 5.60% due 7/1/97,
collateralized by $1,225,000 United States Treasury Note
4.75% due 10/31/98 (market value $1,216,078)
(repurchase proceeds $1,190,185) (cost $1,190,000) 1,190,000
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Total investments (cost $191,314,338) 193,079,797
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Cash 4,529
Notes receivable (Note 4) 64,000
Deferred organization expenses and other assets (Note 1) 75,148
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Total assets 193,223,474
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LIABILITIES
Master administration fee payable (Note 2) 483,370
Notes payable (Note 4) 64,000
Other accrued expenses 38,536
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Total liabilities 585,906
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NET ASSETS $ 192,637,568
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Net assets were comprised of:
Shares of beneficial interest, at par (Note 5) 2,783
Paid-in capital in excess of par $ 192,196,381
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192,199,164
Distribution in excess of net investment income (1,327,055)
Net unrealized appreciation on investment companies 1,765,459
Total net assets $ 192,637,568
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Net asset value per share $ 692.24
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Total shares outstanding at end of period 278,283.29
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See Notes to Financial Statements.
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BLACKROCK FUND INVESTORS I
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
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NET INVESTMENT INCOME
Income
Interest (net of interest expense of $2,555) $ 33,531
Dividend income 7,967,246
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Total income 8,000,777
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Expenses
Master administration (Note 2) 483,370
Directors 31,241
Amortization of deferred organization expenses 12,941
Audit 8,627
Amortization of prepaid insurance 2,861
Transfer Agent 2,603
Custodian 2,479
Legal 2,479
Miscellaneous 7,043
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Total expenses 553,644
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Net investment income 7,447,133
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UNREALIZED GAIN
ON INVESTMENTS (NOTE 3)
Net change in unrealized appreciation on investment companies 3,800,398
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Net unrealized gain 3,800,398
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NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 11,247,531
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See Notes to Financial Statements.
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BLACKROCK FUND INVESTORS I
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
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INCREASE (DECREASE) IN CASH
Cash flows provided by operating activities:
Dividends and interest received $ 8,004,691
Expenses paid (1,085,445)
Paid to affiliates (45,559)
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Net cash flows provided by operating activities 6,873,687
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Net purchase of investments (62,169,111)
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Cash flows provided by financing activities:
Proceeds from Fund shares issued 62,999,109
Distributions to shareholders (7,711,259)
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Net cash flows provided by financing activities 55,287,850
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Net decrease in cash (7,574)
Cash beginning of period 12,103
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Cash end of period 4,529
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RECONCILIATION OF NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS
TO NET CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net increase in net assets resulting from operations $ 11,247,531
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Increase in unrealized appreciation (3,800,398)
Decrease in deferred organization expenses and other assets 13,056
Decrease in payable to BAI (45,559)
Decrease in accrued expenses and other liabilities (540,943)
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Total adjustments (4,373,844)
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Net cash flows provided by operating activities $ 6,873,687
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See Notes to Financial Statements.
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BLACKROCK FUND INVESTORS I
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
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FOR THE SIX MONTHS FOR THE YEAR ENDED
ENDED JUNE 30, 1997 DECEMBER 31, 1996
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INCREASE (DECREASE) IN NET ASSETS
Operations:
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Net investment income $ 7,447,133 $ 20,843,684
Net realized gain -- 2,593,722
Net change in unrealized appreciation
on investment companies 3,800,398 425,941
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Net increase in net assets resulting
from operations 11,247,531 23,863,347
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Dividends and distributions to shareholders from:
Net investment income (7,711,259) (19,930,116)
In excess of net investment income -- (1,086,752)
Net realized gain -- (2,593,722)
Return of capital -- (13,326,234)
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Total dividends and distributions to shareholders (7,711,259) (36,936,824)
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Fund share transactions:
Proceeds from shares issued 62,999,109 104,858,879
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Net increase in net assets resulting
from fund share transactions 62,999,109 104,858,879
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Net increase 66,535,381 91,785,402
NET ASSETS
Beginning of period 126,102,187 34,316,785
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End of period $ 192,637,568 $ 126,102,187
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See Notes to Financial Statements.
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BLACKROCK FUND INVESTORS I
FINANCIAL HIGHLIGHTS (UNAUDITED)
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MARCH 29, 1995*
FOR THE SIX MONTHS FOR THE YEAR ENDED THROUGH
ENDED JUNE 30, 1997 DECEMBER 31, 1996 DECEMBER 31, 1995
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PER SHARE OPERATING
PERFORMANCE:
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Net asset value, beginning of period $ 678.38 $ 684.36 $ 1,000.00
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Net investment income (loss) (a) 26.76 207.34 (88.36)
Net realized and unrealized gain (loss) (a) 14.81 30.04 (227.28)
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Net increase (decrease) from investment operations 41.57 237.38 (315.64)
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Less dividends and distributions:
Net investment income (27.71) (131.31) --
In excess of net investment income -- (7.16) --
Net realized gain -- (17.09) --
Return of capital -- (87.80) --
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(27.71) (243.36) --
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Net asset value, end of period $ 692.24 $ 678.38 $ 684.36
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TOTAL INVESTMENT RETURN (B) 6.14% 53.11% (31.56)%
RATIOS TO AVERAGE NET ASSETS:
Expenses (d) 0.65(c) 1.55% 7.73%(c)
Net investment income (loss) (d) 8.71(c) 29.24% (7.73%)(c)
SUPPLEMENTAL DATA:
Average net assets (in thousands) $172,375 $71,295 $15,573
Portfolio turnover -- -- --
Net assets, end of period (in thousands) $192,638 $126,102 $34,317
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* Commencement of investment operations.
(a) Calculated based on average shares.
(b) 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.
(c) Annualized.
(d) The ratio of expenses and net investment income to total investor capital
commitments of $194,950,055 on an annualized basis is 0.57% and 7.70%,
respectively, for the six months ended June 30, 1997. The ratio of expenses
and net investment loss to total investor capital commitments of
$194,950,055 is 0.57% and 10.69%, respectively, for the year ended December
31, 1996. 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, for the year ended December 31, 1995.
Contained above is the 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.
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BLACKROCK FUND INVESTORS I
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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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 common shares is valued by Fund I
at its proportionate interest in the net asset value of BAI (approximately
34.80% at June 30, 1997). Fund I also holds 532.44 BAI preferred shares which
are valued at cost ($266,220). 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. Dividends and distributions received from
BAI are recorded based on the character of the dividend or distribution
received.
TAXES: It is Fund I'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.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
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.
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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, which is split ratably between BAI, Fund I, BlackRock Fund Investors
II and BlackRock Fund Investors III, for their services in the amount of $40,000
each on an annual basis plus telephonic meeting fees not to exceed $500 annually
and certain out-of-pocket expenses.
NOTE 3. PORTFOLIO SECURITIES
Purchases and proceeds from sales of investment securities other than
short-term investments for the period ended June 30, 1997 amounted to
$62,999,110 and $0, respectively. The federal income tax basis of the
investments of Fund I at June 30, 1997 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 June 30, 1997, the total capital
commitments from investors was $194,950,055 of which $192,222,950 had been
called and received.
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TRUSTEES
Laurence D. Fink, CHAIRMAN
Terry Blaney
John C. Deterding
Donald G. Drapkin
Wesley R. Edens
Charles Froland
James Grosfeld
Laurence E. Hirsch
Kendrick R. Wilson, III
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Wesley R. Edens, CHIEF OPERATING OFFICER
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
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 LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of June 30, 1997 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 I
Two Heritage Drive
North Quincy, MA 02171
