WARBURG PINCUS POST VENTURE CAPITAL FUND INC
485BPOS, 1995-12-28
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<PAGE>1
   
           As filed with the U.S. Securities and Exchange Commission
                             on December 28, 1995
    
                       Securities Act File No. 33-61225
                   Investment Company Act File No. 811-07327

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                   FORM N-1A

            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933        [x]

                         Pre-Effective Amendment No.                       [ ]
   
                        Post-Effective Amendment No. 1                     [x]
    
                                    and/or

        REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940    [x]
   
                                Amendment No. 3                            [x]
    
                       (Check appropriate box or boxes)

                Warburg, Pincus Post-Venture Capital Fund, Inc.

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
              (Exact Name of Registrant as Specified in Charter)

     466 Lexington Avenue
     New York, New York                                     10017-3147
 ........................................               ..................
(Address of Principal Executive Offices)                    (Zip Code)

Registrant's Telephone Number, including Area Code:  (212) 878-0600

                              Mr. Eugene P. Grace
                Warburg, Pincus Post-Venture Capital Fund, Inc.
                             466 Lexington Avenue
                         New York, New York 10017-3147
                   .........................................
                    (Name and Address of Agent for Service)

                                   Copy to:

                            Rose F. DiMartino, Esq.
                           Willkie Farr & Gallagher
                              One Citicorp Center
                             153 East 53rd Street
                        New York, New York  10022-4677















<PAGE>2
   
It is proposed that this filing will become effective (check appropriate box):

  [ ]  immediately upon filing pursuant to paragraph (b)
  [x]  on December 29, 1995 pursuant to paragraph (b)
  [ ]  60 days after filing pursuant to paragraph (a)(1)
  [ ]  on (date) pursuant to paragraph (a)(1)
  [ ]  75 days after filing pursuant to paragraph (a)(2)
  [ ]  on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

  [ ]  This post-effective amendment designates a new effective date for a
       previously filed post-effective amendment.






                      DECLARATION PURSUANT TO RULE 24f-2


Registrant has registered an indefinite number or amount of securities under
the Securities Act of 1933, as amended, pursuant to Section (a)(1) of Rule
24f-2 under the Investment Company of 1940, as amended (the "1940 Act"), and
to the number or amount presently registered is added an indefinite number or
amount of such securities.  The Rule 24f-2 Notice for Registrant's fiscal year
ended October 31, 1995 was filed on December 19, 1995.

    




































<PAGE>3

                WARBURG, PINCUS POST-VENTURE CAPITAL FUND, INC.

                                   FORM N-1A

                             CROSS REFERENCE SHEET



                                             Heading for the Common Shares
          Part A                             and the Advisor Shares
          Item No.                           Prospectuses*
          --------                           -----------------------------
          1.     Cover Page . . . . . .      Cover Page

          2.     Synopsis . . . . . . .      The Funds' Expenses

          3.     Condensed Financial
                 Information  . . . . .      Financial Highlights
   
          4.     General Description of
                 Registrant . . . . . .      Cover Page; Investment
                                             Objective and Policies;
                                             Portfolio Investments; Risk
                                             Factors and Special
                                             Considerations; Certain
                                             Investment Strategies;
                                             Investment Guidelines;
                                             General Information
    
          5.     Management of the Fund      Management of the Funds

          6.     Capital Stock and Other
                 Securities . . . . . .      General Information
   
          7.     Purchase of Securities
                 Being Offered  . . . .      How to Open an Account; How to
                                             Purchase Shares; Net Asset
                                             Value
    
          8.     Redemption or               How to Redeem and Exchange
                 Repurchase . . . . . .      Shares

          9.     Legal Proceedings  . .      Not applicable




- ------------------------
  *    With respect to the Advisor Prospectus, all references to "the Funds"
       in this cross reference sheet should be read as "the Fund."












<PAGE>4


          Part B                             Statement of Additional
          Item No.                           Information Heading
          --------                           -----------------------
   
          10.    Cover Page . . . . . .      Cover Page

          11.    Table of Contents  . .      Contents
    
          12.    General Information and
                 History  . . . . . . .      Management of the Fund;
                                             Notes to Financial Statements;
                                             See Prospectuses--"General
                                             Information"

          13.    Investment Objectives
                 and Policies . . . . .      Investment Objective;
                                             Investment Policies

          14.    Management of the
                 Registrant . . . . . .      Management of the Fund; See
                                             Prospectuses--"Management of
                                             the Fund"

          15.    Control Persons and
                 Principal Holders of
                 Securities . . . . . .      Management of the Fund;
                                             Miscellaneous; See
                                             Prospectuses -- "General
                                             Information"

          16.    Investment Advisory and
                 Other Services . . . .      Management of the Fund; See
                                             Prospectuses--"Management of
                                             the Fund" and "Shareholder
                                             Servicing"
   
          17.    Brokerage Allocation .      Investment Policies; See
                                             Prospectuses -- "Portfolio
                                             Transactions and Turnover
                                             Rate"

          18.    Capital Stock and Other
                 Securities . . . . . .      Management of the Fund--
                                             Organization of the Fund; See
                                             Prospectuses -- "General
                                             Information"
    























<PAGE>5

          Part B                             Statement of Additional
          Item No.                           Information Heading
          --------                           -----------------------
   
          19.    Purchase, Redemption
                 and Pricing of
                 Securities Being            Additional Purchase and
                 Offered  . . . . . . .      Redemption Information; See
                                             Prospectuses-- "How to Open an
                                             Account," "How to Purchase
                                             Shares," "How to Redeem and
                                             Exchange Shares" and "Net
                                             Asset Value"
    
          20.    Tax Status . . . . . .      Additional Information
                                             Concerning Taxes; See
                                             Prospectuses--"Dividends,
                                             Distributions and Taxes"
   
          21.    Underwriters . . . . .      Investment Policies--Portfolio
                                             Transactions; See
                                             Prospectuses--"Management of
                                             the Fund" and "Shareholder
                                             Servicing"
    
          22.    Calculation of
                 Performance Data . . .      Determination of Performance
   
          23.    Financial Statements .      Report of Independent
                                             Auditors; Financial Statements
    
Part C

       Information required to be included in Part C is set forth after the
appropriate item, so numbered, in Part C to this Registration Statement.





<PAGE>


                                  PROSPECTUS

          The Fund's Common Share Prospectus is incorporated by reference to
the Prospectus that forms part of Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A of Warburg, Pincus Capital Appreciation
Fund (Securities Act File No. 33-12344; Investment Co. Act File No.
811-5041).




















































<PAGE>
                                     [Logo]


                                   PROSPECTUS

   
                               DECEMBER 29, 1995
    

                  [ ] WARBURG PINCUS POST-VENTURE CAPITAL FUND

<PAGE>
<PAGE>
   
                 SUBJECT TO COMPLETION, DATED DECEMBER 28, 1995
    


                          WARBURG PINCUS ADVISOR FUNDS
                                 P.O. BOX 9030
                        BOSTON, MASSACHUSETTS 02205-9030
                        TELEPHONE NUMBER: (800) 888-6878

   
                                                               December 29, 1995
PROSPECTUS
    

   
Warburg  Pincus Advisor  Funds are  a family of  open-end mutual  funds that are
offered to investors who wish to buy shares through an investment  professional,
to  financial  institutions  investing  on  behalf  of  their  customers  and to
retirement plans that  elect to  make one or  more Advisor  Funds an  investment
option  for participants  in the  plans. One Advisor  Fund is  described in this
Prospectus:
    

   
WARBURG PINCUS POST-VENTURE CAPITAL  FUND seeks long-term  growth of capital  by
investing  primarily  in  equity  securities of  issuers  in  their post-venture
capital stage  of development  and pursues  an aggressive  investment  strategy.
Because  of the nature of  the Fund's investments and  certain strategies it may
use, an investment in the Fund involves certain risks and may not be appropriate
for all investors.
    

   
The Fund  currently offers  two classes  of shares,  one of  which, the  Advisor
Shares,  is offered pursuant to this Prospectus. The Advisor Shares of the Fund,
as well as  Advisor Shares of  certain other Warburg  Pincus-advised funds,  are
sold  under the  name 'Warburg Pincus  Advisor Funds.'  Individual investors may
purchase Advisor  Shares  only  through institutional  shareholders  of  record,
broker-dealers,  financial  institutions,  depository  institutions,  retirement
plans and other  financial intermediaries ('Institutions').  The Advisor  Shares
impose  a 12b-1 fee of up to .75% per annum, which is the economic equivalent of
a sales  charge.  The  Fund's  Common  Shares  are  available  for  purchase  by
individuals directly and are offered by a separate prospectus.
    

NO MINIMUM INVESTMENT

There  is no minimum amount of initial or subsequent purchases of shares imposed
on Institutions. See 'How to Purchase Shares.'

   
This Prospectus  briefly sets  forth  certain information  about the  Fund  that
investors  should  know before  investing. Investors  are  advised to  read this
Prospectus and retain it for future reference. Additional information about  the
Fund,  contained in a  Statement of Additional Information,  has been filed with
the Securities and Exchange Commission (the 'SEC') and is available to investors
without charge  by  calling Warburg  Pincus  Advisor Funds  at  (800)  888-6878.
Information regarding the status of shareholder accounts may also be obtained by
calling  Warburg  Pincus  Advisor  Funds at  (800)  888-6878.  The  Statement of
Additional Information, as amended or supplemented from time to time, bears  the
same  date as this Prospectus  and is incorporated by  reference in its entirety
into this Prospectus.
    

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY ANY  BANK  AND  SHARES ARE  NOT  FEDERALLY  INSURED BY  THE  FEDERAL  DEPOSIT
INSURANCE   CORPORATION,  THE  FEDERAL  RESERVE  BOARD,  OR  ANY  OTHER  AGENCY.
INVESTMENTS IN  SHARES  OF THE  FUND  INVOLVE INVESTMENT  RISKS,  INCLUDING  THE
POSSIBLE LOSS OF PRINCIPAL.

- --------------------------------------------------------------------------------

THESE  SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
   EXCHANGE COMMISSION  OR  ANY STATE  SECURITIES  COMMISSION NOR  HAS  THE
     SECURITIES   AND  EXCHANGE   COMMISSION  OR   ANY  STATE  SECURITIES
       COMMISSION  PASSED  UPON  THE  ACCURACY  OR  ADEQUACY  OF   THIS
         PROSPECTUS.     ANY   REPRESENTATION   TO    THE    CONTRARY
                           IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
INFORMATION   CONTAINED  HEREIN  IS  SUBJECT   TO  COMPLETION  OR  AMENDMENT.  A
REGISTRATION STATEMENT  RELATING TO  THESE SECURITIES  HAS BEEN  FILED WITH  THE
SECURITIES  AND EXCHANGE  COMMISSION. THESE SECURITIES  MAY NOT BE  SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR  TO THE TIME THE REGISTRATION STATEMENT  BECOMES
EFFECTIVE.  THIS  PROSPECTUS  SHALL  NOT  CONSTITUTE AN  OFFER  TO  SELL  OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE  SECURITIES
IN  ANY STATE IN WHICH SUCH OFFER,  SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.


<PAGE>
<PAGE>
THE FUND'S EXPENSES

   
     The Fund currently offers two separate classes of shares: Common Shares and
Advisor  Shares. See 'General  Information.' Because of the  higher fees paid by
Advisor Shares, the total return on such shares can be expected to be lower than
the total return on Common Shares.
    

   
<TABLE>
<S>                                                                                                          <C>
Shareholder Transaction Expenses
     Maximum Sales Load Imposed on Purchases (as a percentage of offering price)..........................           0
Annual Fund Operating Expenses (as a percentage of average net assets)
     Management Fees......................................................................................         .69%
     12b-1 Fees...........................................................................................         .75%*
     Other Expenses.......................................................................................         .71%
                                                                                                             ---------
     Total Fund Operating Expenses (after fee waivers)`D'.................................................        2.15%
</TABLE>
    

   
<TABLE>
<S>                                                                                                            <C>
EXAMPLE
You would pay the following expenses
  on a $1,000 investment, assuming (1) 5% annual return and (2) redemption at the end
  of each time period:
1 year......................................................................................................   $22
3 years.....................................................................................................   $67
</TABLE>
    

- ------------

* Current 12b-1 fees are .50% out of a maximum .75% authorized under the Advisor
  Shares' Distribution  Plan.  At  least  a portion  of  these  fees  should  be
  considered by the investor to be the economic equivalent of a sales charge.

   
 `D' Absent  the anticipated waiver of fees by the Fund's investment adviser and
     co-administrator, Management Fees would  equal 1.25%, Other Expenses  would
     equal  .75%  and  Total  Fund Operating  Expenses  would  equal  2.75%. The
     investment adviser and co-administrator are under no obligation to continue
     these waivers. Other Expenses and  Total Fund Operating Expenses are  based
     on  annualized estimates of expenses for the fiscal year ending October 31,
     1996.
    

   
                            ------------------------

     The expense table shows the costs  and expenses that an investor will  bear
directly  or indirectly as an Advisor Shareholder of the Fund. Institutions also
may charge their clients fees in connection with investments in Advisor  Shares,
which  fees are not reflected in the table. The Example should not be considered
a representation of past or future expenses; actual Fund expenses may be greater
or less  than those  shown. Moreover,  while  the Example  assumes a  5%  annual
return,  the Fund's  actual performance  will vary  and may  result in  a return
greater or less than 5%. Long-term holders  of Advisor Shares may pay more  than
the  economic equivalent of the maximum front-end sales charges permitted by the
National Association of Securities Dealers, Inc. (the 'NASD').
    

                                       2
<PAGE>
<PAGE>
   
FINANCIAL HIGHLIGHTS
    
   
(FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
    

   
     The  following information regarding  the Fund for  the fiscal period ended
October 31, 1995 has been derived from information audited by Coopers &  Lybrand
L.L.P.,  independent auditors, whose  report dated December  14, 1995 appears in
the Fund's Statement of Additional  Information.  Further information  about the
performance of the Fund is contained in  the Fund's annual report, dated October
31,  1995, copies of  which may be obtained without  charge  by calling  Warburg
Pincus Funds at (800) 257-5614.
    

   
<TABLE>
<CAPTION>
                                                                                                  FOR THE PERIOD
                                                                                                  SEPTEMBER 29,
                                                                                                       1995
                                                                                                 (COMMENCEMENT OF
                                                                                                   OPERATIONS)
                                                                                                     THROUGH
                                                                                                 OCTOBER 31, 1995
                                                                                                 ----------------
<S>                                                                                              <C>
Net Asset Value, Beginning of Period..........................................................        $10.00
                                                                                                     -------
  Income from Investment Operations:
  Net Investment Income (Loss)................................................................           .00
  Net Gains (Loss) from Securities (both realized and unrealized).............................           .68
                                                                                                     -------
       Total from Investment Operations.......................................................           .68
                                                                                                     -------
  Less Distributions:
     Dividends from net investment income.....................................................           .00
     Distributions from capital gains.........................................................           .00
                                                                                                     -------
       Total Distributions....................................................................           .00
                                                                                                     -------
Net Asset Value, End of Period................................................................        $10.68
                                                                                                     -------
                                                                                                     -------

Total Return..................................................................................          6.80%*

Ratios/Supplemental Data:

Net Assets, End of Period (000s)..............................................................            $1

Ratios to Average Daily Net Assets:
  Operating expenses..........................................................................          2.15%*
  Net investment income.......................................................................           .09%*
  Decrease reflected in above ratios due to
     waivers/reimbursements...................................................................          9.25%*

Portfolio Turnover Rate.......................................................................         16.90%*
</TABLE>
    

   
- ------------
    

   
* Non-annualized
    

                                       3
<PAGE>
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES

   
     The  Fund's  investment  objective  is long-term  growth  of  capital. This
objective is a fundamental policy and may not be amended without first obtaining
the approval of a majority of the outstanding shares of the Fund. Any investment
involves risk  and, therefore,  there can  be no  assurance that  the Fund  will
achieve  its  investment  objective. See  'Portfolio  Investments'  and 'Certain
Investment Strategies' for descriptions of certain types of investments the Fund
may make.
    

   
     The Fund is a  diversified management investment  company that pursues  its
investment  objective by investing  primarily in equity  securities of companies
considered by Warburg, Pincus Counsellors,  Inc., the Fund's investment  adviser
('Warburg')  to be in their post-venture capital stage. The Fund is not designed
to provide venture  capital financing. Rather,  under normal market  conditions,
the  Fund will invest at  least 65% of its total  assets in equity securities of
'post-venture capital companies.'  A post-venture capital  company is a  company
that  has received venture capital financing  either (a) during the early stages
of the company's  existence or  the early  stages of  the development  of a  new
product or service, or (b) as part of a restructuring or recapitalization of the
company.  The  investment of  venture  capital financing,  distribution  of such
company's securities to  venture capital investors,  or initial public  offering
('IPO'),  whichever is later, will have been  made within ten years prior to the
Fund's purchase of the company's securities.
    

   
     Warburg believes that venture capital participation in a company's  capital
structure can lead to revenue/earnings growth rates above those of older, public
companies  such as those in the Dow Jones Industrial Average or the Fortune 500.
Venture capitalists finance start-up companies, companies in the early stages of
developing new products or services and companies undergoing a restructuring  or
recapitalization,  since  these companies  may not  have access  to conventional
forms of financing (such  as bank loans or  public issuances of stock).  Venture
capitalists  may  hold substantial  positions in  companies  that may  have been
acquired at prices significantly below  the initial public offering price.  This
may create a potential adverse impact in the short-term on the market price of a
company's  stock due  to sales  in the  open market  by a  venture capitalist or
others who  acquired the  stock at  lower  prices prior  to the  company's  IPO.
Warburg will consider the impact of such sales in selecting post-venture capital
investments.  Venture  capitalists  may  be individuals  or  funds  organized by
venture capitalists which are typically offered only to large institutions, such
as pension  funds  and endowments,  and  certain accredited  investors.  Venture
capital  participation in a company is often reduced when the company engages in
an IPO of its  securities or when it  is involved in a  merger, tender offer  or
acquisition.
    

   

     Warburg has experience in researching  smaller companies,  companies in the
early stages of development and venture capital-financed  companies. Its team of
analysts,  led  by  Elizabeth  Dater  and  Stephen  Lurito,  regularly  monitors
portfolio companies whose securities are held by over 250 of the larger domestic
venture capital funds. Ms. Dater and Mr. Lurito have managed post-venture equity
securities in separate accounts for institutions since 1989 and currently manage
over $800  million of such  assets  for  institutions.  The Fund will  invest in
securities  of  post-venture  capital  companies  that are  traded on a national
securities  exchange or in an organized  over-the-counter  market.  The Fund may
also hold non-publicly  traded equity securities of companies in the venture and
post-venture stages of development,  such as those of closely-held  companies or
private  placements  of public  companies.  The  portion  of the  Fund's  assets
invested in these  non-publicly  traded securities will vary over time depending
on  investment  opportunities  and other  factors.  Illiquid  assets,  including
illiquid non-publicly traded

    

                                       4

<PAGE>
<PAGE>
   

securities, may not exceed 15% of the Fund's assets. The Fund may also invest up
to 35% of its assets in exchange-traded and over-the-counter  securities that do
not meet the  definition of  post-venture  capital  companies  without regard to
market  capitalization.  Up to 10% of  the  Fund's  assets  may be  invested  in
securities of issuers  engaged at the time of purchase in 'special  situations,'
such as a restructuring  or  recapitalization;  an  acquisition,  consolidation,
merger or tender offer; a change in corporate control or investment by a venture
capitalist.
    

     To  attempt to reduce risk, the Fund  will diversify its investments over a
broad range of issuers operating in a  variety of industries. The Fund may  hold
securities  of  companies of  any  size, and  will  not limit  capitalization of
companies it selects to  invest in. However,  due to the  nature of the  venture
capital  to post-venture  cycle, the  Fund anticipates  that the  average market
capitalization of companies in which it invests will be less than $1 billion  at
the  time  of  investment.  Although  the Fund  will  invest  primarily  in U.S.
companies, up to  20% of  the Fund's  assets may  be invested  in securities  of
issuers located in any foreign country. Equity securities in which the Fund will
invest  are common stock,  preferred stock, warrants  and securities convertible
into or exchangeable  for common  stock. The  Fund may  engage in  a variety  of
strategies to reduce risk or seek to enhance return, including engaging in short
selling (see 'Certain Investment Strategies').

PORTFOLIO INVESTMENTS

   
INVESTMENT  GRADE DEBT.  The Fund may  invest up to  20% of its  total assets in
investment grade debt securities (other  than money market obligations) for  the
purpose  of seeking capital appreciation. The  interest income to be derived may
be considered  as one  factor in  selecting debt  securities for  investment  by
Warburg.  Because the market value  of debt obligations can  be expected to vary
inversely to changes in prevailing interest rates, investing in debt obligations
may provide  an  opportunity for  growth  of  capital when  interest  rates  are
expected  to decline. The success of such a strategy is dependent upon Warburg's
ability to accurately forecast  changes in interest rates.  The market value  of
debt  obligations  may also  be  expected to  vary  depending upon,  among other
factors, the ability of the issuer  to repay principal and interest, any  change
in  investment rating and general economic conditions. A security will be deemed
to be investment grade if it is rated within the four highest grades by  Moody's
Investors  Service, Inc. ('Moody's') or Standard  & Poor's Ratings Group ('S&P')
or, if unrated,  is determined  to be of  comparable quality  by Warburg.  Bonds
rated  in  the fourth  highest grade  may  have speculative  characteristics and
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity  to make principal  and interest payments  than is the  case
with  higher grade bonds.  Subsequent to its  purchase by the  Fund, an issue of
securities may cease to be rated or its rating may be reduced below the  minimum
required  for purchase  by the  Fund. Neither  event will  require sale  of such
securities. Warburg will consider such event in its determination of whether the
Fund should continue to hold the securities.
    

   
     When Warburg believes that a defensive  posture is warranted, the Fund  may
invest  temporarily without  limit in investment  grade debt  obligations and in
domestic and foreign money market obligations, including repurchase agreements.
    

   

MONEY MARKET OBLIGATIONS.  The Fund is authorized to invest, under normal market
conditions,  up to 20% of its total  assets in domestic  and foreign  short-term
(one year or less) and  medium-term  (five years or less  remaining to maturity)
money market  obligations  and for  temporary  defensive  purposes may invest in
these securities without limit. These instruments  consist of obligations issued
or guaranteed by the
    

                                       5

<PAGE>
<PAGE>
   

U.S. government or a foreign government, its agencies or instrumentalities; bank
obligations  (including  certificates  of deposit,  time  deposits  and bankers'
acceptances of domestic or foreign banks, domestic savings and loans and similar
institutions)  that are high  quality  investments  or,  if  unrated,  deemed by
Warburg to be high quality investments; commercial paper rated no lower than A-2
by S&P or Prime-2 by Moody's or the equivalent from another major rating service
or, if unrated,  of an issuer having an  outstanding,  unsecured debt issue then
rated within the three highest rating categories; and repurchase agreements with
respect to the foregoing.
    

   
     Repurchase   Agreements.  The  Fund  may  invest  in  repurchase  agreement
transactions on portfolio securities  with member banks  of the Federal  Reserve
System  and certain non-bank dealers.  Repurchase agreements are contracts under
which the buyer of a security  simultaneously commits to resell the security  to
the  seller  at an  agreed-upon price  and date.  Under the  terms of  a typical
repurchase agreement,  the Fund  would  acquire any  underlying security  for  a
relatively  short  period  (usually  not  more  than  one  week)  subject  to an
obligation of the seller to repurchase,  and the Fund to resell, the  obligation
at  an  agreed-upon price  and time,  thereby determining  the yield  during the
Fund's holding period. This arrangement results  in a fixed rate of return  that
is  not subject  to market  fluctuations during  the Fund's  holding period. The
value of the underlying securities  will at all times be  at least equal to  the
total  amount of the  purchase obligation, including interest.  The Fund bears a
risk of  loss in  the  event that  the other  party  to a  repurchase  agreement
defaults  on its  obligations or  becomes bankrupt  and the  Fund is  delayed or
prevented from exercising  its right  to dispose of  the collateral  securities,
including  the  risk  of a  possible  decline  in the  value  of  the underlying
securities during the period while the Fund seeks to assert this right. Warburg,
acting under the  supervision of the  Fund's Board of  Directors (the  'Board'),
monitors  the creditworthiness of those bank and non-bank dealers with which the
Fund enters  into repurchase  agreements  to evaluate  this risk.  A  repurchase
agreement  is considered to be  a loan under the  Investment Company Act of 1940
(the '1940 Act').
    

   
     Money Market  Mutual  Funds.  Where  Warburg  believes  that  it  would  be
beneficial  to the  Fund and appropriate  considering the factors  of return and
liquidity, the Fund may  invest up to  5% of its assets  in securities of  money
market  mutual funds that are unaffiliated with  the Fund, Warburg or the Fund's
co-administrator, PFPC Inc. ('PFPC'). As a  shareholder in any mutual fund,  the
Fund  will  bear its  ratable  share of  the  mutual fund's  expenses, including
management fees, and will remain subject to payment of the Fund's administration
fees and other expenses with respect to assets so invested.
    

U.S. GOVERNMENT SECURITIES.  U.S. government  securities in which  the Fund  may
invest  include: direct obligations of the  U.S. Treasury and obligations issued
by U.S. government  agencies and instrumentalities,  including instruments  that
are  supported by the  full faith and  credit of the  United States, instruments
that are supported by the right of  the issuer to borrow from the U.S.  Treasury
and instruments that are supported by the credit of the instrumentality.

CONVERTIBLE  SECURITIES.  Convertible  securities  in which the Fund may invest,
including  both  convertible  debt  and  convertible  preferred  stock,  may  be
converted  at either a stated  price or stated  rate into  underlying  shares of
common stock. Because of this feature, convertible securities enable an investor
to benefit from  increases in the market price of the  underlying  common stock.
Convertible   securities  provide  higher  yields  than  the  underlying  equity
securities,  but generally offer lower yields than nonconvertible  securities of
similar quality. The value of convertible  securities  fluctuates in relation to
changes in

                                       6

<PAGE>
<PAGE>

interest  rates like bonds and,  in  addition,  fluctuates  in  relation  to the
underlying common stock.

RISK FACTORS AND SPECIAL CONSIDERATIONS

   
EMERGING GROWTH AND SMALL COMPANIES.  Investing in common stocks and  securities
convertible  into common stocks is subject  to the inherent risk of fluctuations
in the prices of such securities. Investing in securities of emerging growth and
small-sized companies may involve greater risks since these securities may  have
limited  marketability  and,  thus, may  be  more volatile.  Because  small- and
medium-sized companies  normally  have  fewer  shares  outstanding  than  larger
companies,  it may  be more difficult  for the  Fund to buy  or sell significant
amounts of such shares  without an unfavorable impact  on prevailing prices.  In
addition,  small- and medium-sized companies are  typically subject to a greater
degree of  changes in  earnings and  business prospects  than are  larger,  more
established  companies. There  is typically less  publicly available information
concerning smaller companies than for larger, more established ones.  Securities
of  issuers in 'special situations' also may  be more volatile, since the market
value of these securities  may decline in value  if the anticipated benefits  do
not  materialize. Companies in 'special situations' include, but are not limited
to, companies  involved  in  an acquisition  or  consolidation;  reorganization;
recapitalization;  merger, liquidation  or distribution  of cash,  securities or
other assets; a  tender or exchange  offer; a  breakup or workout  of a  holding
company;  or litigation which, if resolved favorably, would improve the value of
the companies' securities. Although investing  in securities of emerging  growth
companies  or 'special situations' offers potential for above-average returns if
the companies  are successful,  the  risk exists  that  the companies  will  not
succeed  and the prices of the  companies' shares could significantly decline in
value. Therefore, an investment in the Fund may involve a greater degree of risk
than an  investment in  other mutual  funds that  seek capital  appreciation  by
investing  exclusively in better-known, larger companies. For certain additional
risks relating to the Fund's investments, see 'Portfolio Investments'  beginning
at page 5 and 'Certain Investment Strategies' beginning at page 8.
    

   
NON-PUBLICLY  TRADED  SECURITIES; RULE  144A SECURITIES.  The Fund  may purchase
securities that are not registered under the Securities Act of 1933, as  amended
(the  '1933 Act'), but that  can be sold to  'qualified institutional buyers' in
accordance with  Rule 144A  under  the 1933  Act  ('Rule 144A  Securities').  An
investment  in Rule  144A Securities will  be considered  illiquid and therefore
subject to the Fund's limitation on the purchase of illiquid securities,  unless
the  Board determines on an ongoing basis that an adequate trading market exists
for the security.  In addition  to an adequate  trading market,  the Board  will
consider  factors  such  as  trading activity,  availability  of  reliable price
information and other relevant  information in determining  whether a Rule  144A
Security is liquid. This investment practice could have the effect of increasing
the  level of illiquidity in the Fund to the extent that qualified institutional
buyers become uninterested for  a time in purchasing  Rule 144A Securities.  The
Board  will  carefully  monitor  any  investments  by  the  Fund  in  Rule  144A
Securities. The Board may adopt guidelines and delegate to Counsellors the daily
function of determining and  monitoring the liquidity  of Rule 144A  Securities,
although  the Board  will retain  ultimate responsibility  for any determination
regarding  liquidity.  Non-publicly  traded  securities  (including  Rule   144A
Securities)  may involve a  high degree of  business and financial  risk and may
result in substantial losses. These securities may be less liquid than  publicly
traded  securities, and  the Fund may  take longer to  liquidate these positions
than would be the case for publicly traded securities. Although these securities
may be resold in privately negotiated transactions,  the
    

                                       7

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<PAGE>
   

prices  realized on such sales could be less than those  originally  paid by the
Fund.  Further,  companies  whose  securities are not publicly traded may not be
subject to the disclosure and other investor protection  requirements applicable
to companies  whose  securities are publicly  traded.  The Fund's  investment in
illiquid  securities  is subject to the risk that should the Fund desire to sell
any of these  securities  when a ready buyer is not available at a price that is
deemed to be  representative  of their value, the value of the Fund's net assets
could be adversely affected.
    
PORTFOLIO TRANSACTIONS AND
TURNOVER RATE

   
     The  Fund will  attempt to purchase  securities with the  intent of holding
them for  investment but  may purchase  and sell  portfolio securities  whenever
Warburg  believes it to be in the best  interests of the Fund. The Fund will not
consider  portfolio  turnover  rate  a  limiting  factor  in  making  investment
decisions  consistent  with its  investment objective  and  policies. It  is not
possible  to  predict  the  Fund's  portfolio  turnover  rate.  However,  it  is
anticipated  that the Fund's annual turnover rate should not exceed 100%. Higher
portfolio turnover  rates  (100% or  more)  may result  in  dealer mark  ups  or
underwriting   commissions  as  well  as   other  transaction  costs,  including
correspondingly higher  brokerage  commissions. In  addition,  short-term  gains
realized  from portfolio  turnover may  be taxable  to shareholders  as ordinary
income. See 'Dividends, Distributions and Taxes -- Taxes' below and  'Investment
Policies -- Portfolio Transactions' in the Statement of Additional Information.
    

   
     All  orders for transactions in securities or options on behalf of the Fund
are placed by Warburg with broker-dealers that it selects, including Counsellors
Securities Inc., the Fund's distributor ('Counsellors Securities'). The Fund may
utilize Counsellors  Securities  in  connection  with  a  purchase  or  sale  of
securities  when Warburg believes  that the charge for  the transaction does not
exceed usual  and  customary  levels  and  when  doing  so  is  consistent  with
guidelines adopted by the Board.
    

CERTAIN INVESTMENT STRATEGIES

   
     Although there is no intention of doing so during the coming year, the Fund
is  authorized to engage in the  following investment strategies: (i) purchasing
securities on  a when-issued  basis  and purchasing  or selling  securities  for
delayed-delivery  and (ii) lending portfolio  securities and (iii) entering into
reverse repurchase agreements and dollar rolls. Detailed information  concerning
these strategies and their related risks is contained below and in the Statement
of Additional Information.
    

FOREIGN  SECURITIES. The Fund  may invest up to  20% of its  total assets in the
securities of foreign issuers. There are certain risks involved in investing  in
securities of companies and governments of foreign nations which are in addition
to  the usual risks inherent in  domestic investments. These risks include those
resulting  from  fluctuations  in   currency  exchange  rates,  revaluation   of
currencies,  future adverse political and economic developments and the possible
imposition of currency exchange blockages or other foreign governmental laws  or
restrictions, reduced availability of public information concerning issuers, the
lack of uniform accounting, auditing and financial reporting standards and other
regulatory  practices and  requirements that  are often  generally less rigorous
than those applied in  the United States. Moreover,  securities of many  foreign
companies  may  be less  liquid and  their  prices more  volatile than  those of
securities of comparable U.S. companies. Certain foreign countries are known  to
experience  long delays  between the  trade and  settlement dates  of securities
purchased or sold. In addition, with respect to certain foreign countries, there
is the possibility of expropriation, nationalization, confiscatory taxation  and
limitations on the use or removal  of funds  or other  assets of  the Fund,

                                       8

<PAGE>
<PAGE>

including the  withholding  of dividends.  Foreign  securities may be subject to
foreign  government  taxes that would  reduce the net yield on such  securities.
Moreover,  individual foreign economies may differ favorably or unfavorably from
the U.S. economy in such respects as growth of gross national  product,  rate of
inflation,  capital  reinvestment,  resource  self-sufficiency  and  balance  of
payments positions.  Investment in foreign securities will also result in higher
operating  expenses due to the cost of  converting  foreign  currency  into U.S.
dollars, the payment of fixed brokerage commissions on foreign exchanges,  which
generally are higher than  commissions on U.S.  exchanges,  higher valuation and
communications  costs and the expense of  maintaining  securities  with  foreign
custodians.

   
OPTIONS, FUTURES AND CURRENCY  TRANSACTIONS. At the  discretion of Warburg,  the
Fund  may, but is  not required to,  engage in a  number of strategies involving
options, futures  and forward  currency  contracts. These  strategies,  commonly
referred to as 'derivatives,' may be used (i) for the purpose of hedging against
a decline in value of the Fund's current or anticipated portfolio holdings, (ii)
as  a substitute for purchasing or selling portfolio securities or (iii) to seek
to generate income to offset expenses or increase return. TRANSACTIONS THAT  ARE
NOT  CONSIDERED  HEDGING  SHOULD  BE CONSIDERED  SPECULATIVE  AND  MAY  SERVE TO
INCREASE  THE  FUND'S  INVESTMENT  RISK.  Transaction  costs  and  any  premiums
associated  with  these strategies,  and any  losses  incurred, will  affect the
Fund's net asset value and performance. Therefore, an investment in the Fund may
involve a greater  risk than an  investment in  other mutual funds  that do  not
utilize  these strategies. The Fund's use of  these strategies may be limited by
position and exercise limits established by securities and commodities exchanges
and the NASD and by the Internal Revenue Code of 1986, as amended (the 'Code').
    

   
     Securities and Stock Index Options. The Fund may write covered call and put
options on up to 25% of the net asset value of the stock and debt securities  in
its portfolio and will realize fees (referred to as 'premiums') for granting the
rights evidenced by the options. The Fund may utilize up to 10% of its assets to
purchase  options on  stocks and  debt securities  that are  traded on  U.S. and
foreign exchanges, as well as over-the-counter ('OTC') options. The purchaser of
a put option on a security has the right to compel the purchase by the writer of
the underlying security, while the purchaser of a call option on a security  has
the  right to purchase the  underlying security from the  writer. In addition to
purchasing and writing options  on securities, the Fund  may also utilize up  to
10% of its total assets to purchase exchange-listed and OTC put and call options
on  stock indexes, and may  also write such options.  A stock index measures the
movement of a certain group of stocks by assigning relative values to the common
stocks included in the index.
    

   
     The potential loss associated with purchasing  an option is limited to  the
premium paid, and the premium would partially offset any gains achieved from its
use.  However, for an option  writer the exposure to  adverse price movements in
the underlying security or  index is potentially  unlimited during the  exercise
period. Writing securities options may result in substantial losses to the Fund,
force  the sale or purchase  of portfolio securities at  inopportune times or at
less advantageous  prices,  limit the  amount  of appreciation  the  Fund  could
realize  on its  investments or  require the  Fund to  hold securities  it would
otherwise sell.
    

   
     Futures Contracts  and Related  Options. The  Fund may  enter into  foreign
currency, interest rate and stock index futures contracts and purchase and write
(sell)  related  options  that  are  traded on  an  exchange  designated  by the
Commodity Futures Trading Commission  (the 'CFTC') or,  if consistent with  CFTC
regulations,  on  foreign exchanges.  These  futures contracts  are standardized
contracts for  the future  delivery  of foreign  currency  or an  interest  rate
sensitive security or, in the case of stock index and certain
    

                                       9

<PAGE>
<PAGE>
   

other  futures  contracts,  are  settled in cash with  reference  to a specified
multiplier  times the change in the specified  index,  exchange rate or interest
rate. An option on a futures  contract gives the purchaser the right,  in return
for the premium paid, to assume a position in a futures contract.

    

   
     Aggregate initial margin and premiums required to establish positions other
than those considered by the CFTC to  be 'bona fide hedging' will not exceed  5%
of  the Fund's net asset value, after taking into account unrealized profits and
unrealized losses on  any such contracts.  Although the Fund  is limited in  the
amount  of assets  that may  be invested  in futures  transactions, there  is no
overall limit on the percentage of Fund assets that may be at risk with  respect
to futures activities.
    

   
     Currency Exchange Transactions. The Fund will conduct its currency exchange
transactions  either (i) on a spot (i.e.,  cash) basis at the rate prevailing in
the currency exchange market,  (ii) through entering  into futures contracts  or
options  on futures contracts (as described  above), (iii) through entering into
forward  contracts  to  purchase  or   sell  currency  or  (iv)  by   purchasing
exchange-traded  currency  options.  A  forward  currency  contract  involves an
obligation to purchase or sell a specific  currency at a future date at a  price
set  at  the time  of the  contract. An  option on  a foreign  currency operates
similarly to an  option on a  security. Risks associated  with currency  forward
contracts and purchasing currency options are similar to those described in this
Prospectus  for futures  contracts and  securities and  stock index  options. In
addition, the  use of  currency transactions  could result  in losses  from  the
imposition  of  foreign exchange  controls,  suspension of  settlement  or other
governmental actions or unexpected events.
    

   
     Hedging Considerations.  The  Fund  may  engage  in  options,  futures  and
currency  transactions for,  among other reasons,  hedging purposes.  A hedge is
designed to offset  a loss  on a  portfolio position with  a gain  in the  hedge
position;  at the same time, however, a properly correlated hedge will result in
a gain in the portfolio position being  offset by a loss in the hedge  position.
As  a  result,  the use  of  options,  futures contracts  and  currency exchange
transactions for  hedging  purposes  could  limit any  potential  gain  from  an
increase  in value  of the  position hedged.  In addition,  the movement  in the
portfolio position hedged may not  be of the same  magnitude as movement in  the
hedge.  The Fund will engage in  hedging transactions only when deemed advisable
by Warburg, and successful use of hedging transactions will depend on  Warburg's
ability  to correctly predict movements in the hedge and the hedged position and
the correlation  between  them, which  could  prove  to be  inaccurate.  Even  a
well-conceived  hedge may be  unsuccessful to some  degree because of unexpected
market behavior or trends.
    

   
     Additional Considerations.  To the  extent  that the  Fund engages  in  the
strategies described above, the Fund may experience losses greater than if these
strategies  had not  been utilized.  In addition  to the  risks described above,
these instruments may be illiquid and/or subject to trading limits, and the Fund
may be  unable to  close out  an option  or futures  position without  incurring
substantial losses, if at all. The Fund is also subject to the risk of a default
by a counterparty to an off-exchange transaction.
    

   
     Asset   Coverage.  The   Fund  will   comply  with   applicable  regulatory
requirements designed to eliminate  any potential for  leverage with respect  to
options  written by the Fund on  securities and indexes; currency, interest rate
and stock index futures  contracts and options on  these futures contracts;  and
forward  currency contracts.  The use of  these strategies may  require that the
Fund maintain cash or certain liquid high-grade debt obligations or other assets
that are acceptable as collateral to  the appropriate regulatory authority in  a
segregated  account  with its  custodian or  a  designated sub-custodian  to the
extent  the   Fund's  obligations   with  respect   to  these   strategies   are
not  otherwise 'covered' through ownership of
    

                                       10

<PAGE>
<PAGE>
   

the underlying security,  financial instrument or currency or by other portfolio
positions or by other means  consistent  with  applicable  regulatory  policies.
Segregated  assets cannot be sold or transferred  unless  equivalent  assets are
substituted in their place or it is no longer  necessary to segregate them. As a
result,  there is a possibility  that  segregation of a large  percentage of the
Fund's assets could impede  portfolio  management or the Fund's  ability to meet
redemption requests or other current obligations.
    

SHORT  SELLING. The Fund  may from time  to time sell  securities short. A short
sale  is  a  transaction  in  which  the  Fund  sells  borrowed  securities   in
anticipation of a decline in the market price of the securities. Possible losses
from  short sales differ from losses that could be incurred from a purchase of a
security, because losses from short sales may be unlimited, whereas losses  from
purchases  can equal only the total amount invested. The current market value of
the securities sold short will not exceed 10% of the Fund's assets.

     When the Fund makes a  short sale, the proceeds  it receives from the  sale
are  retained by a  broker until the  Fund replaces the  borrowed securities. To
deliver the securities to the buyer, the  Fund must arrange through a broker  to
borrow  the securities and, in  so doing, the Fund  becomes obligated to replace
the securities  borrowed at  their  market price  at  the time  of  replacement,
whatever  that price may  be. The Fund may  have to pay a  premium to borrow the
securities and must  pay any  dividends or  interest payable  on the  securities
until they are replaced.

     The Fund's obligation to replace the securities borrowed in connection with
a  short sale will be secured by cash or U.S. government securities deposited as
collateral with the  broker. In addition,  the Fund will  place in a  segregated
account with its custodian or a qualified subcustodian an amount of cash or U.S.
government  securities equal to  the difference, if any,  between (i) the market
value of the securities sold at the time they were sold short and (ii) any  cash
or  U.S.  government  securities  deposited as  collateral  with  the  broker in
connection with the short  sale (not including the  proceeds of the sort  sale).
Until it replaces the borrowed securities, the Fund will maintain the segregated
account  daily at a level  so that (a) the amount  deposited in the account plus
the amount deposited with the broker (not including the proceeds from the  short
sale)  will equal the current market value  of the securities sold short and (b)
the amount deposited in  the account plus the  amount deposited with the  broker
(not  including the  proceeds from  the short  sale) will  not be  less than the
market value of the securities at the time they were sold short.

     Short Sales Against the Box. The Fund may, in addition to engaging in short
sales as described  above,  enter into a short sale of securities such that when
the short position is open the Fund owns an equal amount of the securities  sold
short or owns preferred stocks or debt  securities,  convertible or exchangeable
without  payment of further  consideration,  into an equal number of  securities
sold short.  This kind of short sale,  which is referred to as one  'against the
box,' will be entered into by the Fund for the purpose of receiving a portion of
the interest  earned by the executing  broker from the proceeds of the sale. The
proceeds of the sale will  generally be held by the broker until the  settlement
date when the Fund delivers securities to close out its short position. Although
prior to  delivery  the Fund will have to pay an amount  equal to any  dividends
paid on the securities sold short,  the Fund will receive the dividends from the
securities sold short or the dividends from the preferred stock or interest from
the debt securities  convertible or exchangeable into the securities sold short,
plus a portion of the interest  earned from the proceeds of the short sale.  The
Fund will  deposit,  in a segregated  account with its  custodian or a qualified
subcustodian, the securities sold short or convertible or

                                       11

<PAGE>
<PAGE>

exchangeable  preferred stocks or debt securities in connection with short sales
against the box. The Fund will endeavor to offset  transaction  costs associated
with short sales against the box with the income from the investment of the cash
proceeds.  Not more than 10% of the Fund's net assets  (taken at current  value)
may be held as collateral for short sales against the box at any one time.

     The  extent to which the  Fund may make short sales  may be limited by Code
requirements  for  qualification   as  a  regulated   investment  company.   See
'Dividends,  Distributions and Taxes' for other tax considerations applicable to
short sales.

   
INVESTMENT GUIDELINES
    

   
     The Fund  may  invest up  to  15% of  its  net assets  in  securities  with
contractual  or other restrictions on resale  and other investments that are not
readily marketable,  including (i)  securities  issued as  part of  a  privately
negotiated  transaction between  an issuer and  one or more  purchasers and (ii)
repurchase agreements  with  maturities  greater than  seven  days;  (iii)  time
deposits  maturing in more than seven calendar  days; and (iv) certain Rule 144A
Securities. In addition, up to 5% of the Fund's total assets may be invested  in
the  securities of issuers that have been  in continuous operation for less than
three years,  and an  additional  5% of  its total  assets  may be  invested  in
warrants.  The  Fund may  borrow from  banks and  enter into  reverse repurchase
agreements for  temporary or  emergency purposes,  such as  meeting  anticipated
redemption  requests, provided that reverse  repurchase agreements and any other
borrowing by the Fund may  not exceed 30% of the  Fund's total assets. The  Fund
may  pledge its assets  to the extent necessary  to secure permitted borrowings.
Whenever borrowings (including reverse repurchase  agreements) exceed 5% of  the
value  of  the  Fund's  net  assets, the  Fund  will  not  make  any investments
(including roll-overs). Except for the limitations on borrowing, the  investment
guidelines  set  forth in  this paragraph  may  be changed  at any  time without
shareholder consent by vote of the  Board, subject to the limitations  contained
in  the 1940 Act. A  complete list of investment  restrictions that the Fund has
adopted identifying additional restrictions that  cannot be changed without  the
approval  of the majority of  the Fund's outstanding shares  is contained in the
Statement of Additional Information.
    

MANAGEMENT OF THE FUND

   
INVESTMENT ADVISER. The Fund employs Warburg as investment adviser to the  Fund.
Warburg,  subject to the control  of the Fund's officers  and the Board, manages
the investment and reinvestment of the assets of the Fund in accordance with its
investment objective and  stated investment policies.  Warburg makes  investment
decisions  for the  Fund and  places orders  to purchase  or sell  securities on
behalf of the Fund. Warburg also employs a support staff of management personnel
to provide  services to  the Fund  and  furnishes the  Fund with  office  space,
furnishings and equipment.
    

   
     For  the  services  provided  by  Warburg,  the  Fund  pays  Warburg  a fee
calculated at an annual rate  of 1.25% of the  Fund's average daily net  assets.
Although  this advisory fee  is higher than  that paid by  most other investment
companies, including money market and fixed income funds, Warburg believes  that
it is comparable to fees charged by other mutual funds with similar policies and
strategies.  The advisory agreement  between the Fund  and Warburg provides that
Warburg will  reimburse  the  Fund  to the  extent  certain  expenses  that  are
described  in the  Statement of  Additional Information  exceed applicable state
expense limitations. Warburg  and the Fund's  co-administrators may  voluntarily
waive  a  portion of  their fees  from time  to time  and temporarily  limit the
expenses to be borne by the Fund.
    

                                       12

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<PAGE>
   
     Warburg is  a  professional  investment  counselling  firm  which  provides
investment  services to investment companies,  employee benefit plans, endowment
funds, foundations and other  institutions and individuals.  As of November  30,
1995,   Warburg  managed  approximately  $11.9   billion  of  assets,  including
approximately $6.2 billion  of assets  of twenty-three  investment companies  or
portfolios.  Incorporated  in  1970, Warburg  is  a wholly  owned  subsidiary of
Warburg, Pincus  Counsellors  G.P.  ('Counsellors G.P.'),  a  New  York  general
partnership.  E.M. Warburg, Pincus & Co.,  Inc. ('EMW') controls Warburg through
its ownership of a class of voting preferred stock of Warburg. Counsellors  G.P.
has  no  business  other  than  being  a  holding  company  of  Warburg  and its
subsidiaries. Warburg's  address is  466 Lexington  Avenue, New  York, New  York
10017-3147.
    

   
PORTFOLIO MANAGERS. The co-portfolio managers of the Fund are Elizabeth B. Dater
and  Stephen J. Lurito. Ms. Dater  is a managing director of  EMW and has been a
portfolio manager of Warburg  since 1978. Mr. Lurito  is a managing director  of
EMW  and has been with  Warburg since 1987, before which  time he was a research
analyst at Sanford C. Bernstein & Company, Inc.
    

   
     Robert S. Janis and  Christopher M. Nawn  are associate portfolio  managers
and  research  analysts for  the Fund.  Mr.  Janis has  been with  Warburg since
October 1994, before  which time  he was a  vice president  and senior  research
analyst  at U.S. Trust Company of New York. Mr. Nawn has been with Warburg since
September 1994, before which time he  was a senior sector analyst and  portfolio
manager at the Dreyfus Corporation.
    

   
CO-ADMINISTRATORS.   The   Fund   employs   Counsellors   Funds   Service,  Inc.
('Counsellors Service'),  a  wholly  owned  subsidiary  of  Warburg,  as  a  co-
administrator.  As  co-administrator, Counsellors  Service  provides shareholder
liaison services to the Fund, including responding to shareholder inquiries  and
providing  information  on  shareholder  investments.  Counsellors  Service also
performs a variety of other services, including furnishing certain executive and
administrative services,  acting as  liaison between  the Fund  and its  various
service  providers,  furnishing  corporate secretarial  services,  which include
preparing materials for meetings  of the Board,  preparing proxy statements  and
annual,  semiannual and quarterly  reports, assisting in  the preparation of tax
returns and monitoring  and developing  compliance procedures for  the Fund.  As
compensation,  the Fund pays  Counsellors Service a fee  calculated at an annual
rate of .10% of the Fund's average daily net assets.
    
   
    

   
     The Fund employs  PFPC, an indirect,  wholly owned subsidiary  of PNC  Bank
Corp.,  as a co-administrator. As a co-administrator, PFPC calculates the Fund's
net asset value, provides  all accounting services for  the Fund and assists  in
related  aspects of the Fund's operations. As compensation, the Fund pays PFPC a
fee calculated at a maximum annual rate of .10% of the Fund's average daily  net
assets, subject to a minimum annual fee and exclusive of out-of-pocket expenses.
PFPC  has its  principal offices at  400 Bellevue  Parkway, Wilmington, Delaware
19809.
    

   
CUSTODIANS. PNC Bank, National  Association ('PNC') serves  as custodian of  the
Fund's  U.S. assets  and State  Street Bank  and Trust  Company ('State Street')
serves as  custodian  of  the  Fund's  non-U.S. assets.  Like  PFPC,  PNC  is  a
subsidiary  of PNC Bank  Corp. and its  principal business address  is Broad and
Chestnut Streets,  Philadelphia, Pennsylvania  19101. State  Street's  principal
business address is 225 Franklin Street, Boston, Massachusetts 02110.
    

TRANSFER  AGENT.  State  Street  also  serves  as  shareholder  servicing agent,
transfer agent and dividend disbursing agent  for the Fund. It has delegated  to
Boston   Financial  Data  Services,  Inc.,  a  50%  owned  subsidiary  ('BFDS'),
responsibility  for  most  shareholder  servicing  functions.  BFDS's  principal
business address is 2 Heritage Drive, North Quincy, Massachusetts 02171.

                                       13

<PAGE>
<PAGE>
   
DISTRIBUTOR.  Counsellors Securities serves as distributor  of the shares of the
Fund. Counsellors Securities  is a  wholly owned  subsidiary of  Warburg and  is
located  at 466 Lexington Avenue, New York, New York 10017-3147. No compensation
is payable  by the  Advisor Shares  to Counsellors  Securities for  distribution
services.
    

   
     Warburg  or its affiliates  may, at their  own expense, provide promotional
incentives to parties who support the sale of shares of the Fund, consisting  of
securities  dealers who  have sold  Fund shares  or others,  including banks and
other financial  institutions, under  special arrangements.  In some  instances,
these   incentives   may  be   offered  only   to  certain   institutions  whose
representatives provide services in connection with the sale or expected sale of
significant amounts of Fund shares.
    

DIRECTORS  AND  OFFICERS.  The  officers  of  the  Fund  manage  its  day-to-day
operations  and  are directly  responsible to  the Board.  The Board  sets broad
policies for the  Fund and chooses  its officers.  A list of  the Directors  and
officers  of  the Fund  and a  brief  statement of  their present  positions and
principal occupations during the past five  years is set forth in the  Statement
of Additional Information.


HOW TO PURCHASE SHARES

   
     Individual  investors may only purchase  Warburg Pincus Advisor Fund shares
through Institutions.  The  Fund  reserves  the right  to  make  Advisor  Shares
available  to other  investors in the  future. References in  this Prospectus to
shareholders or investors are generally to Institutions as the record holders of
the Advisor Shares.
    

     Each  Institution  separately  determines  the  rules  applicable  to   its
customers  investing  in  the  Fund, including  minimum  initial  and subsequent
investment requirements and the procedures  to be followed to effect  purchases,
redemptions  and  exchanges of  Advisor Shares.  There is  no minimum  amount of
initial or  subsequent  purchases of  Advisor  Shares imposed  on  Institutions,
although the Fund reserves the right to impose minimums in the future.

     Orders for the purchase of Advisor Shares are placed with an Institution by
its customers. The Institution is responsible for the prompt transmission of the
order to the Fund or its agent.

     Institutions  may  purchase  Advisor  Shares by  telephoning  the  Fund and
sending payment by wire. After  telephoning (800) 888-6878 for instructions,  an
Institution  should then wire federal funds to Counsellors Securities Inc. using
the following wire address:

State Street Bank and Trust Co.
225 Franklin St.
Boston, MA 02101
ABA# 0110 000 28
Attn: Mutual Funds/Custody Dept.
Warburg Pincus Advisor Post-Venture Capital Fund
DDA# 9904-649-2
[Shareowner name]
[Shareowner account number]

     Orders by wire will not be  accepted until a completed account  application
has been received in proper form, and an account number has been established. If
a  telephone order is received  by the close of regular  trading on the New York
Stock Exchange ('NYSE') (currently 4:00 p.m., Eastern time) and payment by  wire
is  received on the same day in  proper form in accordance with instructions set
forth above, the shares will be priced  according to the net asset value of  the
Fund  on that day and  are entitled to dividends  and distributions beginning on
that day. If payment by wire is received in proper form by the close of the NYSE
without a prior telephone  order, the purchase will  be priced according to  the
net  asset  value of  the Fund  on that  day  and is  entitled to  dividends and
distributions beginning on that day. However, if  a wire in proper form that  is
not preceded by a telephone order is

                                       14

<PAGE>
<PAGE>
   
received  after the close  of regular trading  on the NYSE,  the payment will be
held uninvested until the order is effected at the close of business on the next
business day. Payment for  orders that are not  accepted will be returned  after
prompt  inquiry. Certain  organizations or  Institutions that  have entered into
agreements with the  Fund or its  agent may enter  confirmed purchase orders  on
behalf  of customers, with payment to follow no later than the Fund's pricing on
the following  business  day. If  payment  is not  received  by such  time,  the
organization could be held liable for resulting fees or losses.
    

     After an investor has made his initial investment, additional shares may be
purchased  at any  time by mail  or by wire  in the manner  outlined above. Wire
payments for initial and subsequent investments  should be preceded by an  order
placed  with the Fund  or its agent  and should clearly  indicate the investor's
account  number.  In   the  interest  of   economy  and  convenience,   physical
certificates representing shares in the Fund are not normally issued.

   
     The  Fund  understands  that some  broker-dealers  (other  than Counsellors
Securities), financial  institutions,  securities  dealers  and  other  industry
professionals  may impose certain conditions on  their clients or customers that
invest in the Fund, which are in  addition to or different than those  described
in  this  Prospectus, and  may charge  their clients  or customers  direct fees.
Certain features of  the Fund,  such as  the initial  and subsequent  investment
minimums,  redemption fees and certain trading  restrictions, may be modified or
waived in these  programs, and  administrative charges  may be  imposed for  the
services   rendered.  Therefore,  a  client   or  customer  should  contact  the
organization acting  on his  behalf  concerning the  fees  (if any)  charged  in
connection  with a purchase  or redemption of  Fund shares and  should read this
Prospectus in light of the terms governing his account with the organization.
    

HOW TO REDEEM AND EXCHANGE
SHARES

REDEMPTION OF SHARES. An investor  of the Fund may  redeem (sell) shares on  any
day that the Fund's net asset value is calculated (see 'Net Asset Value' below).
Requests  for the redemption (or exchange) of  Advisor Shares are placed with an
Institution  by  its  customers,  which  is  then  responsible  for  the  prompt
transmission of this request to the Fund or its agent.

     Institutions  may redeem Advisor  Shares by calling  Warburg Pincus Advisor
Funds at (800) 888-6878 between  9:00 a.m. and 4:00  p.m. (Eastern time) on  any
business  day. An  investor making a  telephone withdrawal should  state (i) the
name of the Fund,  (ii) the account number  of the Fund, (iii)  the name of  the
investor(s) appearing on the Fund's records, (iv) the amount to be withdrawn and
(v) the name of the person requesting the redemption.

     After  receipt of  the redemption request  the redemption  proceeds will be
wired to the investor's bank as indicated in the account application  previously
filled  out by the investor. The Fund does not currently impose a service charge
for effecting wire  transfers but reserves  the right  to do so  in the  future.
During  periods of significant economic  or market change, telephone redemptions
may be  difficult to  implement. If  an investor  is unable  to contact  Warburg
Pincus  Advisor  Funds  by telephone,  an  investor may  deliver  the redemption
request to Warburg Pincus Advisor Funds by mail at Warburg Pincus Advisor Funds,
P.O. Box 9030, Boston, Massachusetts 02205-9030.

   
     If a redemption order is received prior to the close of regular trading  on
the NYSE, the redemption order will be effected at the net asset value per share
as  determined on that day. If a redemption order is received after the close of
regular trading on the NYSE,  the redemption order will  be effected at the  net
asset  value as next determined. Except as noted above, redemption proceeds will
normally be wired to
    

                                       15

<PAGE>
<PAGE>
   
an investor on the next  business day following the  date a redemption order  is
effected.  If,  however, in  the judgment  of  Warburg, immediate  payment would
adversely affect the Fund, it reserves the right to pay the redemption  proceeds
within  seven days after the redemption order is effected. Furthermore, the Fund
may suspend  the  right of  redemption  or postpone  the  date of  payment  upon
redemption  (as well as  suspend or postpone  the recordation of  an exchange of
shares) for such periods as are permitted under the 1940 Act.
    

     The proceeds  paid upon  redemption may  be more  or less  than the  amount
invested  depending upon a share's net asset value at the time of redemption. If
an  investor  redeems  all  the  shares  in  his  account,  all  dividends   and
distributions declared up to and including the date of redemption are paid along
with the proceeds of the redemption.

EXCHANGE  OF SHARES. An Institution may exchange  Advisor Shares of the Fund for
Advisor Shares of the other Warburg Pincus Advisor Funds at their respective net
asset  values.  Exchanges  may  be  effected  in  the  manner  described   under
'Redemption  of Shares'  above. If  an exchange  request is  received by Warburg
Pincus Advisor Funds prior to 4:00 p.m. (Eastern time) the exchange will be made
at each fund's  net asset  value determined  at the  end of  that business  day.
Exchanges  may be effected without a sales charge. The exchange privilege may be
modified or terminated at any time upon 60 days' notice to shareholders.

     The exchange privilege is available  to shareholders residing in any  state
in  which Advisor Shares  being acquired may  legally be sold.  When an investor
effects an exchange of  shares, the exchange is  treated for federal income  tax
purposes  as a redemption. Therefore, the investor may realize a taxable gain or
loss in  connection with  the exchange.  Investors wishing  to exchange  Advisor
Shares  of the  Fund for  shares in another  Warburg Pincus  Advisor Fund should
review the prospectus of the other fund prior to making an exchange. For further
information regarding the exchange privilege  or to obtain a current  prospectus
for  another Warburg  Pincus Advisor  Fund, an  investor should  contact Warburg
Pincus Advisor Funds at (800) 888-6878.

DIVIDENDS, DISTRIBUTIONS AND TAXES

   
DIVIDENDS  AND  DISTRIBUTIONS.  The  Fund  calculates  its  dividends  from  net
investment income. Net investment income includes interest accrued and dividends
earned  on  the  Fund's  portfolio securities  for  the  applicable  period less
applicable expenses. The Fund declares dividends from its net investment  income
and  net realized short-term and long-term  capital gains annually and pays them
in the  calendar year  in which  they  are declared,  generally in  November  or
December. Net investment income earned on weekends and when the NYSE is not open
will  be computed as of the next  business day. Unless an investor instructs the
Fund to pay dividends or distributions in cash, dividends and distributions will
automatically be reinvested  in additional  Advisor Shares  of the  Fund at  net
asset  value.  The election  to receive  dividends in  cash may  be made  on the
account application or, subsequently, by writing to Warburg Pincus Advisor Funds
at the address set forth  under 'How to Purchase  Shares' or by calling  Warburg
Pincus Advisor Funds at (800) 888-6878.
    

     The  Fund may be required to withhold  for U.S. federal income taxes 31% of
all distributions payable  to shareholders  who fail  to provide  the Fund  with
their correct taxpayer identification number or to make required certifications,
or  who have been  notified by the  U.S. Internal Revenue  Service that they are
subject to backup withholding.

TAXES. The Fund intends to qualify each year as a 'regulated investment company'
within the  meaning of  the  Code. The  Fund, if  it  qualifies as  a  regulated
investment  company, will be subject to  a 4% non-deductible excise tax measured
with

                                       16

<PAGE>
<PAGE>
respect to certain undistributed  amounts of ordinary  income and capital  gain.
The  Fund expects to pay  such additional dividends and  to make such additional
distributions as are necessary to avoid the application of this tax.

     Dividends paid from net investment income and distributions of net realized
short-term capital  gains  are taxable  to  investors as  ordinary  income,  and
distributions  derived from net realized long-term  capital gains are taxable to
investors as long-term capital gains, in  each case regardless of the length  of
time  shareholders have held the  Advisor Shares or whether  received in cash or
reinvested in additional Advisor Shares. As  a general rule, an investor's  gain
or  loss on a sale or redemption of  its Fund shares will be a long-term capital
gain or loss if  it has held  its shares for more  than one year  and will be  a
short-term  capital gain or loss if it has held its shares for one year or less.
However, any loss  realized upon  the sale or  redemption of  shares within  six
months  from the date of  their purchase will be  treated as a long-term capital
loss to the extent of any amounts treated as distributions of long-term  capital
gain  during such six-month period with respect to such shares. Investors may be
proportionately liable for taxes on income and gains of the Fund, but  investors
not  subject to tax on their  income will not be required  to pay tax on amounts
distributed to them. The Fund's investment activities, including short sales  of
securities, will not result in unrelated business taxable income to a tax-exempt
investor.  The  Fund's  dividends,  to the  extent  not  derived  from dividends
attributable to certain  types of  stock issued by  U.S. domestic  corporations,
will not qualify for the dividends received deduction for corporations.

     Dividends  and interest received by the  Fund may be subject to withholding
and other taxes imposed by  foreign countries. However, tax conventions  between
certain  countries and the U.S. may reduce  or eliminate such taxes. If the Fund
qualifies as a regulated investment  company, if certain asset and  distribution
requirements  are satisfied and if  more than 50% of  the Fund's total assets at
the close  of  its  fiscal  year  consist of  stock  or  securities  of  foreign
corporations,  the Fund may elect for U.S.  income tax purposes to treat foreign
income taxes paid by it  as paid by its shareholders.  The Fund may qualify  for
and  make this election in some, but  not necessarily all, of its taxable years.
If the Fund were to make an election, shareholders of the Fund would be required
to take into account an amount equal to their pro rata portions of such  foreign
taxes  in computing their taxable income and then treat an amount equal to those
foreign taxes as a U.S. federal income tax deduction or as a foreign tax  credit
against  their U.S. federal  income taxes. Shortly  after any year  for which it
makes such an election, the Fund will report to its shareholders the amount  per
share  of such  foreign tax  that must be  included in  each shareholder's gross
income and the amount which  will be available for  the deduction or credit.  No
deduction for foreign taxes may be claimed by a shareholder who does not itemize
deductions.  Certain  limitations will  be imposed  on the  extent to  which the
credit (but not the deduction) for foreign taxes may be claimed.

     Certain provisions of the  Code may require that  a gain recognized by  the
Fund  upon the closing of a short sale  be treated as a short-term capital gain,
and that a  loss recognized  by the Fund  upon the  closing of a  short sale  be
treated  as a long-term capital loss, regardless  of the amount of time that the
Fund held the securities used to close  the short sale. The Fund's use of  short
sales may also affect the holding periods of certain securities held by the Fund
if  such securities are 'substantially identical' to securities used by the Fund
to close the short sale. The Fund's short selling activities will not result  in
unrelated business taxable income to a tax-exempt investor.

GENERAL.  Statements  as to  the  tax status  of  each investor's  dividends and
distributions are mailed

                                       17

<PAGE>
<PAGE>
annually. Each  investor  will  also receive,  if  applicable,  various  written
notices after the close of the Fund's prior taxable year with respect to certain
dividends  and distributions which were received from the Fund during the Fund's
prior taxable  year.  Investors  should  consult their  own  tax  advisers  with
specific  reference to their own tax situations, including their state and local
tax liabilities. Individuals investing in  the Fund through Institutions  should
consult  those  Institutions  or  their  own  tax  advisers  regarding  the  tax
consequences of investing in the Fund.


NET ASSET VALUE

     The Fund's net  asset value  per share  is calculated  as of  the close  of
regular trading on the NYSE (currently 4:00 p.m., Eastern time) on each business
day,  Monday through Friday, except on days when the NYSE is closed. The NYSE is
currently scheduled to be closed on New Year's Day, Washington's Birthday,  Good
Friday,  Memorial Day (observed), Independence  Day, Labor Day, Thanksgiving Day
and Christmas Day, and on the preceding Friday or subsequent Monday when one  of
these  holidays falls on a Saturday or Sunday, respectively. The net asset value
per share of the Fund generally changes each day.

   
     The net asset value per Advisor Share of the Fund is computed by adding the
Advisor Shares' pro rata share of the value of the Fund's assets, deducting  the
Advisor  Shares' pro  rata share of  the Fund's liabilities  and the liabilities
specifically allocated to  Advisor Shares and  then dividing the  result by  the
total number of outstanding Advisor Shares.
    

   
     Securities  listed  on  a U.S.  securities  exchange  (including securities
traded through the NASDAQ National Market System) or foreign securities exchange
or traded in an over-the-counter market will  be valued at the most recent  sale
price  when the valuation  is made. Debt  obligations that mature  in 60 days or
less from the valuation date are valued  on the basis of amortized cost,  unless
the  Board determines  that using  this valuation  method would  not reflect the
investments' value. Securities, options and  futures contracts for which  market
quotations  are not readily available  and other assets will  be valued at their
fair value  as  determined  in  good  faith  pursuant  to  consistently  applied
procedures  established by  the Board.  Further information  regarding valuation
policies is contained in the Statement of Additional Information.
    

PERFORMANCE

     The Fund quotes the  performance of Advisor  Shares separately from  Common
Shares.  The net asset value of the Advisor  Shares is listed in The Wall Street
Journal each business day under the  heading Warburg Pincus Advisor Funds.  From
time  to time, the Fund may advertise the average annual total return of Advisor
Shares over various periods of time. These total return figures show the average
percentage change  in value  of an  investment in  the Advisor  Shares from  the
beginning  of  the measuring  period to  the  end of  the measuring  period. The
figures reflect changes  in the price  of the Advisor  Shares assuming that  any
income  dividends and/or capital gain distributions  made by the Fund during the
period were reinvested in Advisor Shares. Total return will be shown for  recent
one-,  five- and ten-year  periods, and may  be shown for  other periods as well
(such as on a year-by-year, quarterly or current year-to-date basis).

     When  considering  average total return figures for periods longer than one
year,  it is  important to note that the annual total return for one year in the
period might have been  greater or less than the average for the entire  period.
When  considering  total  return  figures  for  periods  shorter  than one year,
investors  should bear in mind that the Fund seeks  long-term  appreciation  and
that such return may not be  representative  of the Fund's  return over a longer
market cycle. The Fund may also advertise aggregate total

                                       18

<PAGE>
<PAGE>
return   figures  of  Advisor  Shares  for  various  periods,  representing  the
cumulative change  in value  of an  investment  in the  Advisor Shares  for  the
specific   period  (again  reflecting  changes  in  share  prices  and  assuming
reinvestment of  dividends  and  distributions).  Aggregate  and  average  total
returns  may be shown by  means of schedules, charts  or graphs and may indicate
various components of total return (i.e., change in value of initial investment,
income dividends and capital gain distributions).

     Investors should note  that total  return figures are  based on  historical
earnings  and are not intended to  indicate future performance. The Statement of
Additional Information  describes the  method used  to determine  total  return.
Current  total return figures may be  obtained by calling Warburg Pincus Advisor
Funds at (800) 888-6878.

   
     In reports or other communications to investors or in advertising material,
the Fund may describe general economic and market conditions affecting the  Fund
and may compare its performance with (i) that of other mutual funds as listed in
the  rankings prepared by Lipper Analytical Services, Inc. or similar investment
services that monitor the  performance of mutual  funds or as  set forth in  the
publications  listed below; (ii) with the Venture Capital 100 Index (compiled by
Venture Capital Journal),  the Russell 2000  Small Stock Index  and the S&P  500
Index,  which are unmanaged indexes of common stocks; or (iii) other appropriate
indexes of investment securities or with data developed by Warburg derived  from
such indexes. The Fund may also make comparisons using data and indexes compiled
by  the  National Venture  Capital  Association, VentureOne  and  Private Equity
Analysts Newsletter and  similar organizations  and publications.  The Fund  may
also include evaluations published by nationally recognized ranking services and
by  financial  publications that  are nationally  recognized,  such as  The Wall
Street Journal, Investor's Daily, Money, Inc., Institutional Investor, Barron's,
Fortune, Forbes,  Business Week,  Mutual Fund  Magazine, Morningstar,  Inc.  and
Financial Times.
    

   
     In reports or other communications to investors or in advertising, the Fund
may  also describe  the general  biography or  work experience  of the portfolio
managers of the Fund  and may include quotations  attributable to the  portfolio
managers  describing  approaches  taken  in  managing  the  Fund's  investments,
research  methodology  underlying  stock  selection  or  the  Fund's  investment
objective.  In addition, the Fund and  its portfolio managers may render updates
of Fund  activity,  which may  include  a discussion  of  significant  portfolio
holdings and analysis of holdings by industry, country, credit quality and other
characteristics.  The  Fund  may  discuss  characteristics  of  venture  capital
financed companies and the  benefits expected to be  achieved from investing  in
these  companies. The Fund may  also discuss measures of  risk, the continuum of
risk and return relating  to different investments and  the potential impact  of
foreign  stocks  on  a  portfolio  otherwise  composed  of  domestic securities.
Morningstar, Inc. rates funds in broad categories based on risk/reward  analyses
over  various time periods. In addition, the  Fund may from time to time compare
the expense ratio of Advisor Shares to that of investment companies with similar
objectives and policies, based on data generated by Lipper Analytical  Services,
Inc. or similar investment services that monitor mutual funds.
    

GENERAL INFORMATION

   
ORGANIZATION.  The Fund was incorporated on July  12, 1995 under the laws of the
State of Maryland  under the  name 'Warburg, Pincus  Post-Venture Capital  Fund,
Inc.'  The Fund's charter authorizes  the Board to issue  three billion full and
fractional shares of  capital stock,  $.001 par value  per share,  of which  one
billion   shares  are  designated  Advisor  Shares.  Under  the  Fund's  charter
documents, the  Board has  the  power to  classify  or reclassify  any  unissued
    

                                       19

<PAGE>
<PAGE>
shares of the Fund into one or more additional classes by setting or changing in
any  one or  more respects their  relative rights,  voting powers, restrictions,
limitations  as  to  dividends,  qualifications  and  terms  and  conditions  of
redemption.  The Board  may similarly  classify or  reclassify any  class of its
shares into one or more series  and, without shareholder approval, may  increase
the number of authorized shares of the Fund.

   
MULTI-CLASS  STRUCTURE. The Fund  offers a separate class  of shares, the Common
Shares, directly to  individuals pursuant  to a separate  prospectus. Shares  of
each  class represent equal pro rata interests  in the Fund and accrue dividends
and calculate net  asset value and  performance quotations in  the same  manner,
except  that Advisor Shares  bear fees payable  by the Fund  to Institutions for
services they provide to the beneficial owners of such shares and enjoy  certain
exclusive voting rights on matters relating to these fees. Because of the higher
fees paid by the Advisor Shares, the total return on such shares can be expected
to  be  lower than  the  total return  on  Common Shares.  Investors  may obtain
information concerning the Common Shares  from their investment professional  or
by calling Counsellors Securities at (800) 888-6878.
    
   
VOTING  RIGHTS. Investors  in the Fund  are entitled  to one vote  for each full
share held and fractional votes for fractional shares held. Shareholders of  the
Fund  will vote  in the  aggregate except  where otherwise  required by  law and
except that each class will vote separately on certain matters pertaining to its
distribution and shareholder servicing arrangements.  There will normally be  no
meetings  of investors for the  purpose of electing members  of the Board unless
and until such time as less than  a majority of the members holding office  have
been  elected by investors. Any  member of the Board  may be removed from office
upon the  vote  of  shareholders holding  at  least  a majority  of  the  Fund's
outstanding  shares, at  a meeting  called for that  purpose. A  meeting will be
called for the purpose of voting on the removal of a Board member at the written
request of holders of 10% of the outstanding shares of the Fund. John L.  Furth,
a  Director of the Fund,  and Lionel I. Pincus, Chairman  of the Board and Chief
Executive Officer of EMW, may be deemed to be controlling persons of the Fund as
of November 30, 1995 because they may  be deemed to possess or share  investment
power over shares owned by clients of Warburg and certain other entities.
    

SHAREHOLDER  COMMUNICATIONS. Each investor will receive a quarterly statement of
its account, as well as  a statement of its  account after any transaction  that
affects  its share balance or share registration (other than the reinvestment of
dividends or  distributions).  The  Fund  will also  send  to  its  investors  a
semiannual report and an audited annual report, each of which includes a list of
the investment securities held by the Fund and a statement of the performance of
the  Fund. Each Institution that is the record owner of Advisor Shares on behalf
of its customers will send a  statement to those customers periodically  showing
their   indirect  interest  in  Advisor  Shares,  as  well  as  providing  other
information about the Fund. See 'Shareholder Servicing.'

SHAREHOLDER SERVICING

   
     The  Fund  is  authorized  to  offer  Advisor  Shares  exclusively  through
Institutions  whose  clients  or  customers  (or  participants  in  the  case of
retirement plans)  ('Customers')  are owners  of  Advisor Shares.  Either  those
Institutions  or companies  providing certain  services to  Customers (together,
'Service Organizations') will enter into agreements ('Agreements') with the Fund
and/or Counsellors  Securities  pursuant to  a  Distribution Plan  as  described
below.  Such entities  may provide certain  distribution, shareholder servicing,
administrative  and/or  accounting  services  for  its  Customers.  Distribution
services  would be marketing or other  services in connection with the promotion
and sale of Advisor  Shares. Shareholder services that  may be provided  include
responding to Customer inquiries,
    

                                       20

<PAGE>
<PAGE>
   
providing  information on  Customer investments and  providing other shareholder
liaison services. Administrative and accounting services related to the sale  of
Advisor   Shares  may  include  (i)  aggregating  and  processing  purchase  and
redemption requests  from  Customers and  placing  net purchase  and  redemption
orders  with the Fund's  transfer agent, (ii)  processing dividend payments from
the Fund on behalf  of Customers and (iii)  providing sub-accounting related  to
the sale of Advisor Shares beneficially owned by Customers or the information to
the  Fund necessary  for sub-accounting. The  Board has  approved a Distribution
Plan (the 'Plan') pursuant  to Rule 12b-1  under the 1940  Act under which  each
participating  Service Organization will be paid, out  of the assets of the Fund
(either directly  or  by  Counsellors  Securities on  behalf  of  the  Fund),  a
negotiated  fee on  an annual  basis not  to exceed  .75% (up  to a  .25% annual
service fee and  a .50% annual  distribution fee)  of the value  of the  average
daily  net assets of its Customers invested in Advisor Shares. The current 12b-1
fee is .50% per annum. The Board evaluates the appropriateness of the Plan on  a
continuing basis and in doing so considers all relevant factors.
    

   
     Warburg,  Counsellors Securities  and Counsellors  Service or  any of their
affiliates may, from time to time, at their own expense, provide compensation to
Service Organizations. To  the extent  they do  so, such  compensation does  not
represent  an additional expense  to the Fund or  its shareholders. In addition,
Warburg, Counsellors Securities  or any of  their affiliates may,  from time  to
time,  at their own expense,  pay certain Fund transfer  agent fees and expenses
related to accounts of  Customers. A Service Organization  may use a portion  of
the  fees  paid pursuant  to  the Plan  to  compensate the  Fund's  custodian or
transfer agent for costs related to accounts of its Customers.
    

                            ------------------------
     NO PERSON  HAS BEEN  AUTHORIZED TO  GIVE  ANY INFORMATION  OR TO  MAKE  ANY
REPRESENTATIONS  OTHER  THAN  THOSE  CONTAINED IN  THIS  PROSPECTUS,  THE FUND'S
STATEMENT OF ADDITIONAL INFORMATION OR  THE FUND'S OFFICIAL SALES LITERATURE  IN
CONNECTION  WITH THE OFFERING OF SHARES OF THE  FUND, AND IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR  REPRESENTATIONS MUST  NOT BE  RELIED UPON  AS HAVING  BEEN
AUTHORIZED  BY THE  FUND. THIS  PROSPECTUS DOES NOT  CONSTITUTE AN  OFFER OF THE
ADVISOR SHARES IN ANY STATE IN WHICH, OR  TO ANY PERSON TO WHOM, SUCH OFFER  MAY
NOT LAWFULLY BE MADE.

                                       21

<PAGE>
<PAGE>
                               TABLE OF CONTENTS

   
  THE FUND'S EXPENSES ...................................................... 2
  FINANCIAL HIGHLIGHTS ..................................................... 3
  INVESTMENT OBJECTIVE AND POLICIES ........................................ 4
  PORTFOLIO INVESTMENTS .................................................... 5
  RISK FACTORS AND SPECIAL
     CONSIDERATIONS ........................................................ 7
  PORTFOLIO TRANSACTIONS AND TURNOVER
     RATE .................................................................. 8
  CERTAIN INVESTMENT STRATEGIES ............................................ 8
  INVESTMENT GUIDELINES ................................................... 12
  MANAGEMENT OF THE FUND .................................................. 12
  HOW TO PURCHASE SHARES .................................................. 14
  HOW TO REDEEM AND EXCHANGE
     SHARES ............................................................... 15
  DIVIDENDS, DISTRIBUTIONS AND TAXES ...................................... 16
  NET ASSET VALUE ......................................................... 18
  PERFORMANCE ............................................................. 18
  GENERAL INFORMATION ..................................................... 19
  SHAREHOLDER SERVICING ................................................... 20
    

                                     [LOGO]

                         [ ] WARBURG PINCUS
                             POST-VENTURE CAPITAL FUND


                                   PROSPECTUS

   
                               DECEMBER 29, 1995
    

ADPVC-1-0995



                              STATEMENT OF DIFFERENCES
                              ------------------------

The dagger symbol shall be expressed as 'D'






<PAGE>1

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.  A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.  THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE.  THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE A
PROSPECTUS.

































<PAGE>1
   
                Subject to Completion, dated December 28, 1995
    
                      STATEMENT OF ADDITIONAL INFORMATION

                               December 29, 1995


                   WARBURG PINCUS POST-VENTURE CAPITAL FUND

                P.O. Box 9030, Boston, Massachusetts 02205-9030
                     For information, call (800) 888-6878



                                   Contents

                                                          Page
   
Investment Objective  . . . . . . . . . . . . . . . .      2
Investment Policies . . . . . . . . . . . . . . . . .      2
Management of the Fund  . . . . . . . . . . . . . . .     25
Additional Purchase and Redemption Information  . . .     33
Exchange Privilege  . . . . . . . . . . . . . . . . .     34
Additional Information Concerning Taxes . . . . . . .     35
Determination of Performance  . . . . . . . . . . . .     38
Auditors and Counsel  . . . . . . . . . . . . . . . .     39
Miscellaneous . . . . . . . . . . . . . . . . . . . .     39
Financial Statements  . . . . . . . . . . . . . . . .     40
Appendix -- Description of Ratings  . . . . . . . . .    A-1
Report of Coopers & Lybrand L.L.P.,
  Independent Auditors  . . . . . . . . . . . . . . .    A-3


          This Statement of Additional Information is meant to be read in
conjunction with the combined Prospectus for the Common Shares of Warburg
Pincus Post-Venture Capital Fund (the "Fund"), Warburg Pincus Capital
Appreciation Fund, Warburg Pincus Emerging Growth Fund, Warburg Pincus
International Equity Fund and Warburg Pincus Japan OTC Fund, and with the
Prospectus for the Advisor Shares of the Fund, each dated December 29, 1995,
as amended or supplemented from time to time and is incorporated by reference
in its entirety into those Prospectuses.  Because this Statement of Additional
Information is not itself a prospectus, no investment in shares of the Fund
should be made solely upon the information contained herein.  Copies of the
Fund's Prospectuses and information regarding the Fund's current performance
may be obtained by calling the Fund at (800) 257-5614.  Information regarding
the status of shareholder accounts may be obtained by calling the Fund at
(800) 888-6878 or by writing to the Fund, P.O. Box 9030, Boston, Massachusetts
02205-9030.
    

















<PAGE>2

                             INVESTMENT OBJECTIVE

          The investment objective of the Fund is long-term growth of capital.


                              INVESTMENT POLICIES

          The following policies supplement the descriptions of the Fund's
investment objective and policies in the Prospectuses.
   
Options, Futures and Currency Exchange Transactions

          Securities Options.  The Fund may write covered put and call options
on stock and debt securities and may purchase such options that are traded on
foreign and U.S. exchanges, as well as over-the-counter ("OTC").

          The Fund realizes fees (referred to as "premiums") for granting the
rights evidenced by the options it has written.  A put option embodies the
right of its purchaser to compel the writer of the option to purchase from the
option holder an underlying security at a specified price for a specified time
period or at a specified time.  In contrast, a call option embodies the right
of its purchaser to compel the writer of the option to sell to the option
holder an underlying security at a specified price for a specified time period
or at a specified time.

          The principal reason for writing covered options on a security is to
attempt to realize, through the receipt of premiums, a greater return than
would be realized on the securities alone.  In return for a premium, the Fund
as the writer of a covered call option forfeits the right to any appreciation
in the value of the underlying security above the strike price for the life of
the option (or until a closing purchase transaction can be effected).
Nevertheless, the Fund as a put or call writer retains the risk of a decline
in the price of the underlying security.  The size of the premiums that the
Fund may receive may be adversely affected as new or existing institutions,
including other investment companies, engage in or increase their
option-writing activities.

          If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the premium it
received.  If security prices remain the same over time, it is likely that the
writer will also profit, because it should be able to close out the option at
a lower price.  If security prices fall, the put writer would expect to suffer
a loss.  This loss should be less than the loss from purchasing the underlying
instrument directly, however, because the premium received for writing the
option should mitigate the effects of the decline.

          In the case of options written by the Fund that are deemed covered
by virtue of the Fund's holding convertible or exchangeable preferred stock or
debt securities, the time

















<PAGE>3

required to convert or exchange and obtain physical delivery of the underlying
common stock with respect to which the Fund has written options may exceed the
time within which the Fund must make delivery in accordance with an exercise
notice.  In these instances, the Fund may purchase or temporarily borrow the
underlying securities for purposes of physical delivery.  By so doing, the
Fund will not bear any market risk, since the Fund will have the absolute
right to receive from the issuer of the underlying security an equal number of
shares to replace the borrowed securities, but the Fund may incur additional
transaction costs or interest expenses in connection with any such purchase or
borrowing.

          Additional risks exist with respect to certain of the securities for
which the Fund may write covered call options.  For example, if the Fund
writes covered call options on mortgage-backed securities, the mortgage-backed
securities that it holds as cover may, because of scheduled amortization or
unscheduled prepayments, cease to be sufficient cover.  If this occurs, the
Fund will compensate for the decline in the value of the cover by purchasing
an appropriate additional amount of mortgage-backed securities.

          Options written by the Fund will normally have expiration dates
between one and nine months from the date written.  The exercise price of the
options may be below, equal to or above the market values of the underlying
securities at the times the options are written.  In the case of call options,
these exercise prices are referred to as "in-the-money," "at-the-money" and
"out-of-the-money," respectively.  The Fund may write (i) in-the-money call
options when Warburg expects that the price of the underlying security will
remain flat or decline moderately during the option period, (ii) at-the-money
call options when Warburg expects that the price of the underlying security
will remain flat or advance moderately during the option period and
(iii) out-of-the-money call options when Warburg expects that the premiums
received from writing the call option plus the appreciation in market price of
the underlying security up to the exercise price will be greater than the
appreciation in the price of the underlying security alone.  In any of the
preceding situations, if the market price of the underlying security declines
and the security is sold at this lower price, the amount of any realized loss
will be offset wholly or in part by the premium received.  Out-of-the-money,
at-the-money and in-the-money put options (the reverse of call options as to
the relation of exercise price to market price) may be used in the same market
environments that such call options are used in equivalent transactions.  To
secure its obligation to deliver the underlying security when it writes a call
option, the Fund will be required to deposit in escrow the underlying security
or other assets in accordance with the rules of the Options Clearing
Corporation (the "Clearing Corporation") and of the securities exchange on
which the option is written.

          Prior to their expirations, put and call options may be sold in
closing sale or purchase transactions (sales or purchases by the Fund prior to
the exercise of options that it has purchased or written, respectively, of
options of the same series) in which the Fund may realize a profit or loss
from the sale.  An option position may be closed out only where there exists a
secondary market for an option of the same series on a recognized securities
exchange or in the over-the-counter market.  When the Fund has purchased an
option and













<PAGE>4

engages in a closing sale transaction, whether the Fund realizes a profit or
loss will depend upon whether the amount received in the closing sale
transaction is more or less than the premium the Fund initially paid for the
original option plus the related transaction costs.  Similarly, in cases where
the Fund has written an option, it will realize a profit if the cost of the
closing purchase transaction is less than the premium received upon writing
the original option and will incur a loss if the cost of the closing purchase
transaction exceeds the premium received upon writing the original option.
The Fund may engage in a closing purchase transaction to realize a profit, to
prevent an underlying security with respect to which it has written an option
from being called or put or, in the case of a call option, to unfreeze an
underlying security (thereby permitting its sale or the writing of a new
option on the security prior to the outstanding option's expiration).  The
obligation of the Fund under an option it has written would be terminated by a
closing purchase transaction, but the Fund would not be deemed to own an
option as a result of the transaction.  So long as the obligation of the Fund
as the writer of an option continues, the Fund may be assigned an exercise
notice by the broker-dealer through which the option was sold, requiring the
Fund to deliver the underlying security against payment of the exercise price.
This obligation terminates when the option expires or the Fund effects a
closing purchase transaction.  The Fund can no longer effect a closing
purchase transaction with respect to an option once it has been assigned an
exercise notice.

          There is no assurance that sufficient trading interest will exist to
create a liquid secondary market on a securities exchange for any particular
option or at any particular time, and for some options no such secondary
market may exist.  A liquid secondary market in an option may cease to exist
for a variety of reasons.  In the past, for example, higher than anticipated
trading activity or order flow or other unforeseen events have at times
rendered certain of the facilities of the Clearing Corporation and various
securities exchanges inadequate and resulted in the institution of special
procedures, such as trading rotations, restrictions on certain types of orders
or trading halts or suspensions in one or more options.  There can be no
assurance that similar events, or events that may otherwise interfere with the
timely execution of customers' orders, will not recur.  In such event, it
might not be possible to effect closing transactions in particular options.
Moreover, the Fund's ability to terminate options positions established in the
over-the-counter market may be more limited than for exchange-traded options
and may also involve the risk that securities dealers participating in
over-the-counter transactions would fail to meet their obligations to the
Fund.  The Fund, however, intends to purchase over-the-counter options only
from dealers whose debt securities, as determined by Warburg, are considered
to be investment grade.  If, as a covered call option writer, the Fund is
unable to effect a closing purchase transaction in a secondary market, it will
not be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise.  In either case, the Fund
would continue to be at market risk on the security and could face higher
transaction costs, including brokerage commissions.

          Securities exchanges generally have established limitations
governing the maximum number of calls and puts of each class which may be held
or written, or exercised













<PAGE>5

within certain time periods by an investor or group of investors acting in
concert (regardless of whether the options are written on the same or
different securities exchanges or are held, written or exercised in one or
more accounts or through one or more brokers).  It is possible that the Fund
and other clients of Warburg and certain of its affiliates may be considered
to be such a group.  A securities exchange may order the liquidation of
positions found to be in violation of these limits and it may impose certain
other sanctions.  These limits may restrict the number of options the Fund
will be able to purchase on a particular security.

          Stock Index Options.  The Fund may purchase and write
exchange-listed and OTC put and call options on stock indexes.  A stock index
measures the movement of a certain group of stocks by assigning relative
values to the common stocks included in the index, fluctuating with changes in
the market values of the stocks included in the index.  Some stock index
options are based on a broad market index, such as the NYSE Composite Index,
or a narrower market index such as the Standard & Poor's 100.  Indexes may
also be based on a particular industry or market segment.

          Options on stock indexes are similar to options on stock except that
(i) the expiration cycles of stock index options are monthly, while those of
stock options are currently quarterly, and (ii) the delivery requirements are
different.  Instead of giving the right to take or make delivery of stock at a
specified price, an option on a stock index gives the holder the right to
receive a cash "exercise settlement amount" equal to (a) the amount, if any,
by which the fixed exercise price of the option exceeds (in the case of a put)
or is less than (in the case of a call) the closing value of the underlying
index on the date of exercise, multiplied by (b) a fixed "index multiplier."
Receipt of this cash amount will depend upon the closing level of the stock
index upon which the option is based being greater than, in the case of a
call, or less than, in the case of a put, the exercise price of the index and
the exercise price of the option times a specified multiple.  The writer of
the option is obligated, in return for the premium received, to make delivery
of this amount.  Stock index options may be offset by entering into closing
transactions as described above for securities options.

          OTC Options.  The Fund may purchase OTC or dealer options or sell
covered OTC options.  Unlike exchange-listed options where an intermediary or
clearing corporation, such as the Clearing Corporation, assures that all
transactions in such options are properly executed, the responsibility for
performing all transactions with respect to OTC options rests solely with the
writer and the holder of those options.  A listed call option writer, for
example, is obligated to deliver the underlying stock to the clearing
organization if the option is exercised, and the clearing organization is then
obligated to pay the writer the exercise price of the option.  If the Fund
were to purchase a dealer option, however, it would rely on the dealer from
whom it purchased the option to perform if the option were exercised.  If the
dealer fails to honor the exercise of the option by the Fund, the Fund would
lose the premium it paid for the option and the expected benefit of the
transaction.

          Listed options generally have a continuous liquid market while
dealer options have none.  Consequently, the Fund will generally be able to
realize the value of a dealer












<PAGE>6

option it has purchased only by exercising it or reselling it to the dealer
who issued it.  Similarly, when the Fund writes a dealer option, it generally
will be able to close out the option prior to its expiration only by entering
into a closing purchase transaction with the dealer to which the Fund
originally wrote the option.  Although the Fund will seek to enter into dealer
options only with dealers who will agree to and that are expected to be
capable of entering into closing transactions with the Fund, there can be no
assurance that the Fund will be able to liquidate a dealer option at a
favorable price at any time prior to expiration.  The inability to enter into
a closing transaction may result in material losses to the Fund.  Until the
Fund, as a covered OTC call option writer, is able to effect a closing
purchase transaction, it will not be able to liquidate securities (or other
assets) used to cover the written option until the option expires or is
exercised.  This requirement may impair the Fund's ability to sell portfolio
securities or, with respect to currency options, currencies at a time when
such sale might be advantageous.  In the event of insolvency of the other
party, the Fund may be unable to liquidate a dealer option.

          Futures Activities.  The Fund may enter into foreign currency,
interest rate and stock index futures contracts and purchase and write (sell)
related options traded on  exchanges designated by the Commodity Futures
Trading Commission (the "CFTC") or consistent with CFTC regulations on foreign
exchanges.  These transactions may be entered into for "bona fide hedging"
purposes as defined in CFTC regulations and other permissible purposes
including hedging against changes in the value of portfolio securities due to
anticipated changes in currency values, interest rates and/or market
conditions and increasing return.

          The Fund will not enter into futures contracts and related options
for which the aggregate initial margin and premiums (discussed below) required
to establish positions other than those considered to be "bona fide hedging"
by the CFTC exceed 5% of the Fund's net asset value after taking into account
unrealized profits and unrealized losses on any such contracts it has entered
into.  The ability of the Fund to trade in futures contracts and options on
futures contracts may be limited by the requirements of the Internal Revenue
Code of 1986, as amended (the "Code"), applicable to a regulated investment
company.

          Futures Contracts.  A foreign currency futures contract provides for
the future sale by one party and the purchase by the other party of a certain
amount of a specified non-U.S. currency at a specified price, date, time and
place.  An interest rate futures contract provides for the future sale by one
party and the purchase by the other party of a certain amount of a specific
interest rate sensitive financial instrument (debt security) at a specified
price, date, time and place.  Stock indexes are capitalization weighted
indexes which reflect the market value of the stock listed on the indexes.  A
stock index futures contract is an agreement to be settled by delivery of an
amount of cash equal to a specified multiplier times the difference between
the value of the index at the close of the last trading day on the contract
and the price at which the agreement is made.
















<PAGE>7

          No consideration is paid or received by the Fund upon entering into
a futures contract.  Instead, the Fund is required to deposit in a segregated
account with its custodian an amount of cash or cash equivalents, such as U.S.
government securities or other liquid high-grade debt obligations, equal to
approximately 1% to 10% of the contract amount (this amount is subject to
change by the exchange on which the contract is traded, and brokers may charge
a higher amount).  This amount is known as "initial margin" and is in the
nature of a performance bond or good faith deposit on the contract which is
returned to the Fund upon termination of the futures contract, assuming all
contractual obligations have been satisfied.  The broker will have access to
amounts in the margin account if the Fund fails to meet its contractual
obligations.  Subsequent payments, known as "variation margin," to and from
the broker, will be made daily as the currency, financial instrument or stock
index underlying the futures contract fluctuates, making the long and short
positions in the futures contract more or less valuable, a process known as
"marking-to-market."  The Fund will also incur brokerage costs in connection
with entering into futures transactions.

          At any time prior to the expiration of a futures contract, the Fund
may elect to close the position by taking an opposite position, which will
operate to terminate the Fund's existing position in the contract.  Positions
in futures contracts and options on futures contracts (described below) may be
closed out only on the exchange on which they were entered into (or through a
linked exchange).  No secondary market for such contracts exists.  Although
the Fund intends to enter into futures contracts only if there is an active
market for such contracts, there is no assurance that an active market will
exist at any particular time.  Most futures exchanges limit the amount of
fluctuation permitted in futures contract prices during a single trading day.
Once the daily limit has been reached in a particular contract, no trades may
be made that day at a price beyond that limit or trading may be suspended for
specified periods during the day.  It is possible that futures contract prices
could move to the daily limit for several consecutive trading days with little
or no trading, thereby preventing prompt liquidation of futures positions at
an advantageous price and subjecting the Fund to substantial losses.  In such
event, and in the event of adverse price movements, the Fund would be required
to make daily cash payments of variation margin.  In such situations, if the
fund had insufficient cash, it might have to sell securities to meet daily
variation margin requirements at a time when it would be disadvantageous to do
so.  In addition, if the transaction is entered into for hedging purposes, in
such circumstances the Fund may realize a loss on a futures contract or option
that is not offset by an increase in the value of the hedged position.  Losses
incurred in futures transactions and the costs of these transactions will
affect the Fund's performance.

          Options on Futures Contracts.  The Fund may purchase and write put
and call options on foreign currency, interest rate and stock index futures
contracts and may enter into closing transactions with respect to such options
to terminate existing positions.  There is no guarantee that such closing
transactions can be effected; the ability to establish and close out positions
on such options will be subject to the existence of a liquid market.
















<PAGE>8

          An option on a currency, interest rate or stock index futures
contract, as contrasted with the direct investment in such a contract, gives
the purchaser the right, in return for the premium paid, to assume a position
in a futures contract at a specified exercise price at any time prior to the
expiration date of the option.  The writer of the option is required upon
exercise to assume an offsetting futures position (a short position if the
option is a call and a long position if the option is a put).  Upon exercise
of an option, the delivery of the futures position by the writer of the option
to the holder of the option will be accompanied by delivery of the accumulated
balance in the writer's futures margin account, which represents the amount by
which the market price of the futures contract exceeds, in the case of a call,
or is less than, in the case of a put, the exercise price of the option on the
futures contract.  The potential loss related to the purchase of an option on
futures contracts is limited to the premium paid for the option (plus
transaction costs).  Because the value of the option is fixed at the point of
sale, there are no daily cash payments by the purchaser to reflect changes in
the value of the underlying contract; however, the value of the option does
change daily and that change would be reflected in the net asset value of the
Fund.

          Currency Exchange Transactions.  The value in U.S. dollars of the
assets of the Fund that are invested in foreign securities may be affected
favorably or unfavorably by changes in exchange control regulations, and the
Fund may incur costs in connection with conversion between various currencies.
Currency exchange transactions may be from any non-U.S. currency into U.S.
dollars or into other appropriate currencies.  The Fund will conduct its
currency exchange transactions (i) on a spot (i.e., cash) basis at the rate
prevailing in the currency exchange market, (ii) through entering into futures
contracts or options on such contracts (as described above), (iii) through
entering into forward contracts to purchase or sell currency or (iv) by
purchasing exchange-traded currency options.

          Forward Currency Contracts.   A forward currency contract involves
an obligation to purchase or sell a specific currency at a future date, which
may be any fixed number of days from the date of the contract as agreed upon
by the parties, at a price set at the time of the contract.  These contracts
are entered into in the interbank market conducted directly between currency
traders (usually large commercial banks and brokers) and their customers.
Forward currency contracts are similar to currency futures contracts, except
that futures contracts are traded on commodities exchanges and are
standardized as to contract size and delivery date.
    
          At or before the maturity of a forward contract, the Fund may either
sell a portfolio security and make delivery of the currency, or retain the
security and fully or partially offset its contractual obligation to deliver
the currency by negotiating with its trading partner to purchase a second,
offsetting contract.  If the Fund retains the portfolio security and engages
in an offsetting transaction, the Fund, at the time of execution of the
offsetting transaction, will incur a gain or a loss to the extent that
movement has occurred in forward contract prices.
















<PAGE>9

          Currency Options.  The Fund may purchase exchange-traded put and
call options on foreign currencies.  Put options convey the right to sell the
underlying currency at a price which is anticipated to be higher than the spot
price of the currency at the time the option is exercised.  Call options
convey the right to buy the underlying currency at a price which is expected
to be lower than the spot price of the currency at the time the option is
exercised.
        
          Currency Hedging.  The Fund's currency hedging will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward currency with respect
to specific receivables or payables of the Fund generally accruing in
connection with the purchase or sale of its portfolio securities.  Position
hedging is the sale of forward currency with respect to portfolio security
positions.  The Fund may not position hedge to an extent greater than the
aggregate market value (at the time of entering into the hedge) of the hedged
securities.
   
          A decline in the U.S. dollar value of a foreign currency in which
the Fund's securities are denominated will reduce the U.S. dollar value of the
securities, even if their value in the foreign currency remains constant.  The
use of currency hedges does not eliminate fluctuations in the underlying
prices of the securities, but it does establish a rate of exchange that can be
achieved in the future.  For example, in order to protect against diminutions
in the U.S. dollar value of securities it holds, the Fund may purchase
currency put options.  If the value of the currency does decline, the Fund
will have the right to sell the currency for a fixed amount in dollars and
will thereby offset, in whole or in part, the adverse effect on the U.S.
dollar value of its securities that otherwise would have resulted.
Conversely, if a rise in the U.S. dollar value of a currency in which
securities to be acquired are denominated is projected, thereby potentially
increasing the cost of the securities, the Fund may purchase call options on
the particular currency.  The purchase of these options could offset, at least
partially, the effects of the adverse movements in exchange rates.  The
benefit to the Fund derived from purchases of currency options, like the
benefit derived from other types of options, will be reduced by premiums and
other transaction costs.  Because transactions in currency exchange are
generally conducted on a principal basis, no fees or commissions are generally
involved.  Currency hedging involves some of the same risks and considerations
as other transactions with similar instruments.  Although currency hedges
limit the risk of loss due to a decline in the value of a hedged currency, at
the same time, they also limit any potential gain that might result should the
value of the currency increase.  If a devaluation is generally anticipated,
the Fund may not be able to contract to sell a currency at a price above the
devaluation level it anticipates.

          While the values of currency futures and options on futures, forward
currency contracts and currency options may be expected to correlate with
exchange rates, they will not reflect other factors that may affect the value
of the Fund's investments and a currency hedge may not be entirely successful
in mitigating changes in the value of the Fund's investments denominated in
that currency.  A currency hedge, for example, should protect a














<PAGE>10

Yen-denominated bond against a decline in the Yen, but will not protect the
Fund against a price decline if the issuer's creditworthiness deteriorates.

          Hedging.  In addition to entering into options, futures and currency
exchange transactions for other purposes, including generating current income
to offset expenses or increase return, the Fund may enter into these
transactions as hedges to reduce investment risk, generally by making an
investment expected to move in the opposite direction of a portfolio position.
A hedge is designed to offset a loss in a portfolio position with a gain in
the hedged position; at the same time, however, a properly correlated hedge
will result in a gain in the portfolio position being offset by a loss in the
hedged position.  As a result, the use of options, futures, contracts and
currency exchange transactions for hedging purposes could limit any potential
gain from an increase in the value of the position hedged.  In addition, the
movement in the portfolio position hedged may not be of the same magnitude as
movement in the hedge.  With respect to futures contracts, since the value of
portfolio securities will far exceed the value of the futures contracts sold
by the Fund, an increase in the value of the futures contracts could only
mitigate, but not totally offset, the decline in the value of the Fund's
assets.

          In hedging transactions based on an index, whether the Fund will
realize a gain or loss from the purchase or writing of options on an index
depends upon movements in the level of stock prices in the stock market
generally or, in the case of certain indexes, in an industry or market
segment, rather than movements in the price of a particular stock.  The risk
of imperfect correlation increases as the composition of the Fund's portfolio
varies from the composition of the index.  In an effort to compensate for
imperfect correlation of relative movements in the hedged position and the
hedge, the Fund's hedge positions may be in a greater or lesser dollar amount
than the dollar amount of the hedged position.  Such "over hedging" or "under
hedging" may adversely affect the Fund's net investment results if market
movements are not as anticipated when the hedge is established.  Stock index
futures transactions may be subject to additional correlation risks.  First,
all participants in the futures market are subject to margin deposit and
maintenance requirements.  Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which would distort the normal relationship between the stock
index and futures markets.  Secondly, from the point of view of speculators,
the deposit requirements in the futures market are less onerous than margin
requirements in the securities market.  Therefore, increased participation by
speculators in the futures market also may cause temporary price distortions.
Because of the possibility of price distortions in the futures market and the
imperfect correlation between movements in the stock index and movements in
the price of stock index futures, a correct forecast of general market trends
by Warburg still may not result in a successful hedging transaction.

          The Fund will engage in hedging transactions only when deemed
advisable by Warburg, and successful use by the Fund of hedging transactions
will be subject to Warburg's ability to predict trends in currency, interest
rate or securities markets, as the case may be, and to correctly predict
movements in the directions of the hedge and the hedged














<PAGE>11

position and the correlation between them, which predictions could prove to be
inaccurate.  This requires different skills and techniques than predicting
changes in the price of individual securities, and there can be no assurance
that the use of these strategies will be successful.  Even a well-conceived
hedge may be unsuccessful to some degree because of unexpected market behavior
or trends.  Losses incurred in hedging transactions and the costs of these
transactions will affect the Fund's performance.

          Asset Coverage for Forward Contracts, Options, Futures and Options
on Futures.  As described in the Prospectuses, the Fund will comply with
guidelines established by the SEC with respect to coverage of forward currency
contracts; options written by the Fund on securities and indexes; and
currency, interest rate and index futures contracts and options on these
futures contracts.  These guidelines may, in certain instances, require
segregation by the Fund of cash or liquid high-grade debt securities or other
securities that are acceptable as collateral to the appropriate regulatory
authority.
    
          For example, a call option written by the Fund on securities may
require the Fund to hold the securities subject to the call (or securities
convertible into the securities without additional consideration) or to
segregate assets (as described above) sufficient to purchase and deliver the
securities if the call is exercised.  A call option written by the Fund on an
index may require the Fund to own portfolio securities that correlate with the
index or to segregate assets (as described above) equal to the excess of the
index value over the exercise price on a current basis.  A put option written
by the Fund may require the Fund to segregate assets (as described above)
equal to the exercise price.  The Fund could purchase a put option if the
strike price of that option is the same or higher than the strike price of a
put option sold by the Fund.  If the Fund holds a futures or forward contract,
the Fund could purchase a put option on the same futures or forward contract
with a strike price as high or higher than the price of the contract held.
The Fund may enter into fully or partially offsetting transactions so that its
net position, coupled with any segregated assets (equal to any remaining
obligation), equals its net obligation.  Asset coverage may be achieved by
other means when consistent with applicable regulatory policies.
   
Additional Information on Investment Practices

          Foreign Investments.  The Fund may not invest more than 20% of its
total assets in the securities of foreign issuers.  Investors should recognize
that investing in foreign companies involves certain risks, including those
discussed below, which are not typically associated with investing in U.S.
issuers.  Since the Fund may invest in securities denominated in currencies
other than the U.S. dollar, and since the Fund may temporarily hold funds in
bank deposits or other money market investments denominated in foreign
currencies, the Fund may be affected favorably or unfavorably by exchange
control regulations or changes in the exchange rate between such currencies
and the dollar.  A change in the value of a foreign currency relative to the
U.S. dollar will result in a corresponding change in the dollar value of the
Fund's assets denominated in that foreign currency.  Changes in foreign
currency exchange rates may also affect the value of dividends














<PAGE>12

and interest earned, gains and losses realized on the sale of securities and
net investment income and gains, if any, to be distributed to shareholders by
the Fund.  The rate of exchange between the U.S. dollar and other currencies
is determined by the forces of supply and demand in the foreign exchange
markets.  Changes in the exchange rate may result over time from the
interaction of many factors directly or indirectly affecting economic and
political conditions in the United States and a particular foreign country,
including economic and political developments in other countries.  Of
particular importance are rates of inflation, interest rate levels, the
balance of payments and the extent of government surpluses or deficits in the
United States and the particular foreign country, all of which are in turn
sensitive to the monetary, fiscal and trade policies pursued by the
governments of the United States and foreign countries important to
international trade and finance.  Governmental intervention may also play a
significant role.  National governments rarely voluntarily allow their
currencies to float freely in response to economic forces.  Sovereign
governments use a variety of techniques, such as intervention by a country's
central bank or imposition of regulatory controls or taxes, to affect the
exchange rates of their currencies.  A Portfolio may use hedging techniques
with the objective of protecting against loss through the fluctuation of the
value of foreign currencies against the U.S. dollar, particularly the forward
market in foreign exhcnage, currency options and currency futures.  See
"Currency Transactions" and "Futures Activities" above.

          Many of the foreign securities held by the Fund will not be
registered with, nor the issuers thereof be subject to reporting requirements
of, the SEC.  Accordingly, there may be less publicly available information
about the securities and about the foreign company or government issuing them
than is available about a domestic company or government entity.  Foreign
companies are generally not subject to uniform financial reporting standards,
practices and requirements comparable to those applicable to U.S. companies.
In addition, with respect to some foreign countries, there is the possibility
of expropriation or confiscatory taxation, limitations on the removal of funds
or other assets of the Fund, political or social instability, or domestic
developments which could affect U.S. investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably
from the U.S. economy in such respects as growth of gross national product,
rate of inflation, capital reinvestment, resource self-sufficiency, and
balance of payments positions.  The Fund may invest in securities of foreign
governments (or agencies or instrumentalities thereof), and many, if not all,
of the foregoing considerations apply to such investments as well.

          Securities of some foreign companies are less liquid and their
prices are more volatile than securities of comparable U.S. companies.
Certain foreign countries are known to experience long delays between the
trade and settlement dates of securities purchased or sold.  Due to the
increased exposure of the Fund to market and foreign exchange fluctuations
brought about by such delays, and due to the corresponding negative impact on
Fund liquidity, the Fund will avoid investing in countries which are known to
experience settlement delays which may expose the Fund to unreasonable risk of
loss.















<PAGE>13

          U.S. Government Securities.  The Fund may invest in debt obligations
of varying maturities issued or guaranteed by the United States government,
its agencies or instrumentalities ("U.S. Government Securities").  Direct
obligations of the U.S. Treasury include a variety of securities that differ
in their interest rates, maturities and dates of issuance.  U.S. Government
Securities also include securities issued or guaranteed by the Federal Housing
Administration, Farmers Home Loan Administration, Export-Import Bank of the
United States, Small Business Administration, Government National Mortgage
Association ("GNMA"), General Services Administration, Central Bank for
Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks, Federal Home
Loan Mortgage Corporation ("FHLMC"), Federal Intermediate Credit Banks,
Federal Land Banks, Federal National Mortgage Association ("FNMA"), Maritime
Administration, Tennessee Valley Authority, District of Columbia Armory Board
and Student Loan Marketing Association.  The Fund may also invest in
instruments that are supported by the right of the issuer to borrow from the
U.S. Treasury and instruments that are supported by the credit of the
instrumentality.  Because the U.S. government is not obligated by law to
provide support to an instrumentality it sponsors, the Fund will invest in
obligations issued by such an instrumentality only if Warburg determines that
the credit risk with respect to the instrumentality does not make its
securities unsuitable for investment by the Fund.

          Special Situation Companies.  The Fund may invest up to 10% of its
assets in the securities of "special situation companies" involved in an
actual or prospective acquisition or consolidation; reorganization;
recapitalization; merger, liquidation or distribution of cash, securities or
other assets; a tender or exchange offer; a breakup or workout of a holding
company; or litigation which, if resolved favorably, would improve the value
of the company's stock.  If the actual or prospective situation does not
materialize as anticipated, the market price of the securities of a "special
situation company" may decline significantly.  The Fund believes, however,
that if Warburg analyzes "special situation companies" carefully and invests
in the securities of these companies at the appropriate time, the Fund may
achieve capital growth.  There can be no assurance, however, that a special
situation that exists at the time the Fund makes its investment will be
consummated under the terms and within the time period contemplated.

          Securities of Other Investment Companies.  The Fund may invest in
securities of other investment companies to the extent permitted under the
Investment Company Act of 1940, as amended (the "1940 Act").  Presently, under
the 1940 Act, the Fund may hold securities of another investment company in
amounts which (i) do not exceed 3% of the total outstanding voting stock of
such company, (ii) do not exceed 5% of the value of the Fund's total assets
and (iii) when added to all other investment company securities held by the
Fund, do not exceed 10% of the value of the Fund's total assets.

          Lending of Portfolio Securities.  The Fund may lend portfolio
securities to brokers, dealers and other financial organizations that meet
capital and other credit requirements or other criteria established by the
Fund's Board of Directors (the "Board").  These loans, if and when made, may
not exceed 20% of the Fund's total assets taken at















<PAGE>14

value.  The Fund will not lend portfolio securities to affiliates of Warburg
unless it has applied for and received specific authority to do so from the
SEC.  Loans of portfolio securities will be collateralized by cash, letters of
credit or U.S. Government Securities, which are maintained at all times in an
amount equal to at least 100% of the current market value of the loaned
securities.  Any gain or loss in the market price of the securities loaned
that might occur during the term of the loan would be for the account of the
Fund.  From time to time, the Fund may return a part of the interest earned
from the investment of collateral received for securities loaned to the
borrower and/or a third party that is unaffiliated with the Fund and that is
acting as a "finder."

          By lending its securities, the Fund can increase its income by
continuing to receive interest and any dividends on the loaned securities as
well as by either investing the collateral received for securities loaned
in short-term instruments or obtaining yield in the form of interest paid by
the borrower when U.S. Government Securities are used as collateral.  Although
the generation of income is not an investment objective of the Fund, income
received could be used to pay the Fund's expenses and would increase an
investor's total return.  The Fund will adhere to the following conditions
whenever its portfolio securities are loaned:  (i) the Fund must receive at
least 100% cash collateral or equivalent securities of the type discussed in
the preceding paragraph from the borrower; (ii) the borrower must increase
such collateral whenever the market value of the securities rises above the
level of such collateral; (iii) the Fund must be able to terminate the loan at
any time; (iv) the Fund must receive reasonable interest on the loan, as well
as any dividends, interest or other distributions on the loaned securities and
any increase in market value; (v) the Fund may pay only reasonable custodian
fees in connection with the loan; and (vi) voting rights on the loaned
securities may pass to the borrower, provided, however, that if a material
event adversely affecting the investment occurs, the Board must terminate the
loan and regain the right to vote the securities.  Loan agreements involve
certain risks in the event of default or insolvency of the other party
including possible delays or restrictions upon the Fund's ability to recover
the loaned securities or dispose of the collateral for the loan.

          When-Issued Securities and Delayed-Delivery Transactions.  The Fund
may utilize up to 20% of its total assets to purchase securities on a
"when-issued" basis or purchase or sell securities for delayed delivery (i.e.,
payment or delivery occur beyond the normal settlement date at a stated price
and yield).  When-issued transactions normally settle within 30-45 days.  The
Fund will enter into a when-issued transaction for the purpose of acquiring
portfolio securities and not for the purpose of leverage, but may sell the
securities before the settlement date if Warburg deems it advantageous to do
so.  The payment obligation and the interest rate that will be received on
when-issued securities are fixed at the time the buyer enters into the
commitment.  Due to fluctuations in the value of securities purchased or sold
on a when-issued or delayed-delivery basis, the yields obtained on such
securities may be higher or lower than the yields available in the market on
the dates when the investments are actually delivered to the buyers.
















<PAGE>15

          When the Fund agrees to purchase when-issued or delayed-delivery
securities, its custodian will set aside cash, U.S. Government Securities or
other liquid high-grade debt obligations or other securities that are
acceptable as collateral to the appropriate regulatory authority equal to the
amount of the commitment in a segregated account.  Normally, the custodian
will set aside portfolio securities to satisfy a purchase commitment, and in
such a case the Fund may be required subsequently to place additional assets
in the segregated account in order to ensure that the value of the account
remains equal to the amount of the Fund's commitment.  It may be expected that
the Fund's net assets will fluctuate to a greater degree when it sets aside
portfolio securities to cover such purchase commitments than when it sets
aside cash.  When the Fund engages in when-issued or delayed-delivery
transactions, it relies on the other party to consummate the trade.  Failure
of the seller to do so may result in the Fund's incurring a loss or missing an
opportunity to obtain a price considered to be advantageous.
    
          American, European and Continental Depositary Receipts.  The assets
of the Fund may be invested in the securities of foreign issuers in the form
of American Depositary Receipts ("ADRs") and European Depositary Receipts
("EDRs").  These securities may not necessarily be denominated in the same
currency as the securities into which they may be converted.  ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation.  EDRs,
which are sometimes referred to as Continental Depositary Receipts ("CDRs"),
are receipts issued in Europe typically by non-U.S. banks and trust companies
that evidence ownership of either foreign or domestic securities.  Generally,
ADRs in registered form are designed for use in U.S. securities markets and
EDRs and CDRs in bearer form are designed for use in European securities
markets.

          Convertible Securities.  Convertible securities in which the Fund
may invest, including both convertible debt and convertible preferred stock,
may be converted at either a stated price or stated rate into underlying
shares of common stock.  Because of this feature, convertible securities
enable an investor to benefit from increases in the market price of the
underlying common stock.  Convertible securities provide higher yields than
the underlying equity securities, but generally offer lower yields than
non-convertible securities of similar quality.  Like bonds, the value of
convertible securities fluctuates in relation to changes in interest rates
and, in addition, also fluctuates in relation to the underlying common stock.

          Warrants.  The Fund may invest up to 5% of net assets in warrants
(valued at the lower of cost or market) (other than warrants acquired by the
Fund as part of a unit or attached to securities at the time of purchase).
Because a warrant does not carry with it the right to dividends or voting
rights with respect to the securities which it entitles a holder to purchase,
and because it does not represent any rights in the assets of the issuer,
warrants may be considered more speculative than certain other types of
investments.  Also, the value of a warrant does not necessarily change with
the value of the underlying securities and a warrant ceases to have value if
it is not exercised prior to its expiration date.















<PAGE>16

          Non-Publicly Traded and Illiquid Securities.  The Fund may not
invest more than 15% of its net assets in illiquid securities, including
securities that are illiquid by virtue of the absence of a readily available
market, repurchase agreements which have a maturity of longer than seven days
and time deposits maturing in more than seven days.  Securities that have
legal or contractual restrictions on resale but have a readily available
market are not considered illiquid for purposes of this limitation.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the notice period.

          Historically, illiquid securities have included securities subject
to contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), securities which are otherwise not readily marketable and repurchase
agreements having a maturity of longer than seven days.  Securities which have
not been registered under the Securities Act are referred to as private
placements or restricted securities and are purchased directly from the issuer
or in the secondary market.  Mutual funds do not typically hold a significant
amount of these restricted or other illiquid securities because of the
potential for delays on resale and uncertainty in valuation.  Limitations on
resale may have an adverse effect on the marketability of portfolio securities
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days.  A mutual fund might also
have to register such restricted securities in order to dispose of them
resulting in additional expense and delay.  Adverse market conditions could
impede such a public offering of securities.

          In recent years, however, a large institutional market has developed
for certain securities that are not registered under the Securities Act
including repurchase agreements, commercial paper, foreign securities,
municipal securities and corporate bonds and notes.  Institutional investors
depend on an efficient institutional market in which the unregistered security
can be readily resold or on an issuer's ability to honor a demand for
repayment.  The fact that there are contractual or legal restrictions on
resale to the general public or to certain institutions may not be indicative
of the liquidity of such investments.
   
          Rule 144A Securities.  Rule 144A under the Securities Act adopted by
the SEC allows for a broader institutional trading market for securities
otherwise subject to restriction on resale to the general public.  Rule 144A
establishes a "safe harbor" from the registration requirements of the
Securities Act for resales of certain securities to qualified institutional
buyers.  Warburg anticipates that the market for certain restricted securities
such as institutional commercial paper will expand further as a result of this
regulation and use of automated systems for the trading, clearance and
settlement of unregistered securities of domestic and foreign issuers, such as
the PORTAL System sponsored by the National Association of Securities Dealers,
Inc.
    
          An investment in Rule 144A Securities will be considered illiquid
and therefore subject to the Fund's 15% limit on the purchase of illiquid
securities unless the













<PAGE>17

Board or its delegates determines the Rule 144A Securities to be liquid.  In
reaching liquidity decisions, the Board and its delegates may consider, inter
alia, the following factors:  (i) the unregistered nature of the security;
(ii) the frequency of trades and quotes for the security; (iii) the number of
dealers wishing to purchase or sell the security and the number of other
potential purchasers; (iv) dealer undertakings to make a market in the
security and (v) the nature of the security and the nature of the marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of the transfer).

          Borrowing.  The Fund may borrow up to 30% of its total assets for
temporary or emergency purposes, including to meet portfolio redemption
requests so as to permit the orderly disposition of portfolio securities or to
facilitate settlement transactions on portfolio securities.  Investments
(including roll-overs) will not be made when borrowings exceed 5% of the
Fund's net assets.  Although the principal of such borrowings will be fixed,
the Fund's assets may change in value during the time the borrowing is
outstanding.  The Fund expects that some of its borrowings may be made on a
secured basis.  In such situations, either the custodian will segregate the
pledged assets for the benefit of the lender or arrangements will be made with
a suitable subcustodian, which may include the lender.

Other Investment Limitations

          The investment limitations numbered 1 through 9 may not be changed
without the affirmative vote of the holders of a majority of the Fund's
outstanding shares.  Such majority is defined as the lesser of (i) 67% or more
of the shares present at the meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (ii)
more than 50% of the outstanding shares.  Investment limitations 10 through 16
may be changed by a vote of the Board at any time.

          The Fund may not:

          1.  Borrow money except that the Fund may (a) borrow from banks for
temporary or emergency purposes and (b) enter into reverse repurchase
agreements; provided that reverse repurchase agreements, dollar roll
transactions that are accounted for as financings and any other transactions
constituting borrowing by the Fund may not exceed 30% of the value of the
Fund's total assets at the time of such borrowing.  For purposes of this
restriction, short sales, the entry into currency transactions, options,
futures contracts, options on futures contracts, forward commitment
transactions and dollar roll transactions that are not accounted for as
financings (and the segregation of assets in connection with any of the
foregoing) shall not constitute borrowing.
   
          2.  Purchase any securities which would cause 25% or more of the
value of the Fund's total assets at the time of purchase to be invested in the
securities of issuers conducting their principal business activities in the
same industry; provided that there shall be no limit on the purchase of U.S.
Government Securities.















<PAGE>18

          3.  Purchase the securities of any issuer if as a result more than
5% of the value of the Fund's total assets would be invested in the securities
of such issuer, except that this 5% limitation does not apply to U.S.
Government Securities and except that up to 25% of the value of the Fund's
total assets may be invested without regard to this 5% limitation.
    
          4.  Make loans, except that the Fund may purchase or hold
fixed-income securities, including loan participations, assignments and
structured securities, lend portfolio securities and enter into repurchase
agreements.

          5.  Underwrite any securities issued by others except to the extent
that the investment in restricted securities and the sale of securities in
accordance with the Fund's investment objective, policies and limitations may
be deemed to be underwriting.

          6.  Purchase or sell real estate or invest in oil, gas or mineral
exploration or development programs, except that the Fund may invest in (a)
securities secured by real estate, mortgages or interests therein and (b)
securities of companies that invest in or sponsor oil, gas or mineral
exploration or development programs.

          7.  Purchase securities on margin, except that the Fund may obtain
any short-term credits necessary for the clearance of purchases and sales of
securities.  For purposes of this restriction, the deposit or payment of
initial or variation margin in connection with transactions in currencies,
options, futures contracts or related options will not be deemed to be a
purchase of securities on margin.

          8.  Invest in commodities, except that the Fund may purchase and
sell futures contracts, including those relating to securities, currencies and
indexes, and options on futures contracts, securities, currencies or indexes,
purchase and sell currencies on a forward commitment or delayed-delivery basis
and enter into stand-by commitments.

          9.  Issue any senior security except as permitted in the Fund's
investment limitations.

          10.  Purchase securities of other investment companies except in
connection with a merger, consolidation, acquisition, reorganization or offer
of exchange, or as otherwise permitted under the 1940 Act.

          11.  Pledge, mortgage or hypothecate its assets, except to the
extent necessary to secure permitted borrowings and to the extent related to
the deposit of assets in escrow in connection with the purchase of securities
on a forward commitment or delayed-delivery basis and collateral and initial
or variation margin arrangements with respect to currency transactions,
options, futures contracts, and options on futures contracts.

          12.  Invest more than 15% of the Fund's net assets in securities
which may be illiquid because of legal or contractual restrictions on resale
or securities for which there are














<PAGE>19

no readily available market quotations.  For purposes of this limitation,
repurchase agreements with maturities greater than seven days shall be
considered illiquid securities.

          13.  Purchase any security if as a result the Fund would then have
more than 5% of its total assets invested in securities of companies
(including predecessors) that have been in continuous operation for fewer than
three years.
   
          14.  Purchase or retain securities of any company if any of the
Fund's officers or Directors or any officer or director of Warburg
individually owns more than 1/2 of 1% of the outstanding securities of such
company and together they own beneficially more than 5% of the securities.
    
          15.  Invest in warrants (other than warrants acquired by the Fund as
part of a unit or attached to securities at the time of purchase) if, as a
result, the investments (valued at the lower of cost or market) would exceed
5% of the value of the Fund's net assets.

          16.  Make additional investments (including roll-overs) if the
Fund's borrowings exceed 5% of its net assets.
   
          Certain non-fundamental investment limitations are currently
required by one or more states in which shares of the Fund are sold.  These
may be more restrictive than the limitations set forth above.  Should the Fund
determine that any such commitment is no longer in the best interest of the
Fund and its shareholders, the Fund will revoke the commitment by terminating
the sale of Fund shares in the state involved.  In addition, the relevant
state may change or eliminate its policy regarding such investment
limitations.
    
          If a percentage restriction is adhered to at the time of an
investment, a later increase or decrease in the percentage of assets resulting
from a change in the values of portfolio securities or in the amount of the
Fund's assets will not constitute a violation of such restriction.

Portfolio Valuation

          The Prospectuses discuss the time at which the net asset value of
the Fund is determined for purposes of sales and redemptions.  The following
is a description of the procedures used by the Fund in valuing its assets.
   
          Securities listed on a U.S. securities exchange (including
securities traded through the NASDAQ National Market System) or on a foreign
securities exchange will be valued on the basis of the closing value on the
date on which the valuation is made or, in the absence of sales, at the mean
between the bid and asked quotations.  If there are no such quotations, the
value of the securities will be taken to be the highest bid quotation on the
exchange or market.  Options or futures contracts will be valued similarly.  A
security which is listed or traded on more than one exchange is valued at the
quotation on the exchange















<PAGE>20

determined to be the primary market for such security.  Short-term obligations
with maturities of 60 days or less are valued at amortized cost, which
constitutes fair value as determined by the Board.  Amortized cost involves
valuing a portfolio instrument at its initial cost and thereafter assuming a
constant amortization to maturity of any discount or premium, regardless of
the impact of fluctuating interest rates on the market value of the
instrument.  The amortized cost method of valuation may also be used with
respect to debt obligations with 60 days or less remaining to maturity.  In
determining the market value of portfolio investments, the Fund may employ
outside organizations (a "Pricing Service") which may use a matrix, formula or
other objective method that takes into consideration market indexes, matrices,
yield curves and other specific adjustments.  The procedures of Pricing
Services are reviewed periodically by the officers of the Fund under the
general supervision and responsibility of the Board, which may replace any
such Pricing Service at any time.  All other securities and other assets of
the Fund will be valued at their fair value as determined in good faith
pursuant to consistently applied procedures established by the Board.  In
addition, the Board or its delegates may value a security at fair value if it
determines that such security's value determined by the methodology set forth
above does not reflect its fair value.

          Trading in securities in certain foreign countries is completed at
various times prior to the close of business on each business day in New York
(i.e., a day on which the NYSE is open for trading).  In addition, securities
trading in a particular country or countries may not take place on all
business days in New York.  Furthermore, trading takes place in various
foreign markets on days which are not business days in New York and days on
which the Fund's net asset value is not calculated.  As a result, calculation
of the Fund's net asset value may not take place contemporaneously with the
determination of the prices of certain portfolio securities used in such
calculation.  Events affecting the values of portfolio securities that occur
between the time their prices are determined and the close of regular trading
on the NYSE will not be reflected in the Fund's calculation of net asset value
unless the Board or its delegates deems that the particular event would
materially affect net asset value, in which case an adjustment may be made.
All assets and liabilities initially expressed in foreign currency values will
be converted into U.S. dollar values at the prevailing rate as quoted by a
Pricing Service.  If such quotations are not available, the rate of exchange
will be determined in good faith pursuant to consistently applied procedures
established by the Board.
    
Portfolio Transactions
   
          Warburg is responsible for establishing, reviewing and, where
necessary, modifying the Fund's investment program to achieve its investment
objective.  Purchases and sales of newly issued portfolio securities are
usually principal transactions without brokerage commissions effected directly
with the issuer or with an underwriter acting as principal.  Other purchases
and sales may be effected on a securities exchange or over-the-counter,
depending on where it appears that the best price or execution will be
obtained.  The purchase price paid by the Fund to underwriters of newly issued
securities usually includes a














<PAGE>21

concession paid by the issuer to the underwriter, and purchases of securities
from dealers, acting as either principals or agents in the after market, are
normally executed at a price between the bid and asked price, which includes a
dealer's mark-up or mark-down.  Transactions on U.S. stock exchanges and some
foreign stock exchanges involve the payment of negotiated brokerage
commissions.  On exchanges on which commissions are negotiated, the cost of
transactions may vary among different brokers.  On most foreign exchanges,
commissions are generally fixed.  There is generally no stated commission in
the case of securities traded in domestic or foreign over-the-counter markets,
but the price of securities traded in over-the-counter markets includes an
undisclosed commission or mark-up.  U.S. government securities are generally
purchased from underwriters or dealers, although certain newly issued U.S.
Government Securities may be purchased directly from the U.S. Treasury or from
the issuing agency or instrumentality.

          Warburg will select specific portfolio investments and effect
transactions for the Fund and in doing so seeks to obtain the overall best
execution of portfolio transactions.  In evaluating prices and executions,
Warburg will consider the factors it deems relevant, which may include the
breadth of the market in the security, the price of the security, the
financial condition and execution capability of a broker or dealer and the
reasonableness of the commission, if any, for the specific transaction and on
a continuing basis.  Warburg may, in its discretion, effect transactions in
portfolio securities with dealers who provide brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934) to the Fund and/or other accounts over which Warburg exercises
investment discretion.  Warburg may place portfolio transactions with a broker
or dealer with whom it has negotiated a commission that is in excess of the
commission another broker or dealer would have charged for effecting the
transaction if Warburg determines in good faith that such amount of commission
was reasonable in relation to the value of such brokerage and research
services provided by such broker or dealer viewed in terms of either that
particular transaction or of the overall responsibilities of Warburg.
Research and other services received may be useful to Warburg in serving both
the Fund and its other clients and, conversely, research or other services
obtained by the placement of business of other clients may be useful to
Warburg in carrying out its obligations to the Fund.  Research may include
furnishing advice, either directly or through publications or writings, as to
the value of securities, the advisability of purchasing or selling specific
securities and the availability of securities or purchasers or sellers of
securities; furnishing seminars, information, analyses and reports concerning
issuers, industries, securities, trading markets and methods, legislative
developments, changes in accounting practices, economic factors and trends and
portfolio strategy; access to research analysts, corporate management
personnel, industry experts, economists and government officials; comparative
performance evaluation and technical measurement services and quotation
services; and products and other services (such as third party publications,
reports and analyses, and computer and electronic access, equipment, software,
information and accessories that deliver, process or otherwise utilize
information, including the research described above) that assist Warburg in
carrying out its responsibilities.  For the fiscal year ended October 31,
1995, $         of total brokerage commissions was paid to brokers and dealers
who provided such research and other services













<PAGE>22

on portfolio transactions of $         . Research received from brokers or
dealers is supplemental to Warburg's own research program.  The fees to
Warburg under its advisory agreements with the Fund are not reduced by reason
of its receiving any brokerage and research services.

          During the fiscal period ended October 31, 1995, the Fund paid an
aggregate of approximately $2,616 in commissions to broker-dealers for
execution of portfolio transactions.

          As of October 31, 1995, the Fund owned $       worth of shares of
common stock of            , one of the Fund's regular broker-dealers.

          Investment decisions for the Fund concerning specific portfolio
securities are made independently from those for other clients advised by
Warburg.  Such other investment clients may invest in the same securities as
the Fund.  When purchases or sales of the same security are made at
substantially the same time on behalf of such other clients, transactions are
averaged as to price and available investments allocated as to amount, in a
manner which Warburg believes to be equitable to each client, including the
Fund.  In some instances, this investment procedure may adversely affect the
price paid or received by the Fund or the size of the position obtained or
sold for the Fund.  To the extent permitted by law, Warburg may aggregate the
securities to be sold or purchased for the Fund with those to be sold or
purchased for such other investment clients in order to obtain best execution.

          Any portfolio transaction for the Fund may be executed through
Warburg Securities Inc., the Fund's distributor ("Counsellors Securities"),
if, in Warburg's judgment, the use of Counsellors Securities is likely to
result in price and execution at least as favorable as those of other
qualified brokers, and if, in the transaction, Counsellors Securities charges
the Fund a commission rate consistent with those charged by Counsellors
Securities to comparable unaffiliated customers in similar transactions.  All
transactions with affiliated brokers will comply with Rule 17e-1 under the
1940 Act.  No portfolio transactions have been executed through Counsellors
Securities since the commencement of the Fund's operations.

          In no instance will portfolio securities be purchased from or sold
to Warburg or Counsellors Securities or any affiliated person of such
companies.  In addition, the Fund will not give preference to any institutions
with whom the Fund enters into distribution or shareholder servicing
agreements concerning the provision of distribution services or support
services to customers.  See the Prospectuses, "Shareholder Servicing."
    
          Transactions for the Fund may be effected on foreign securities
exchanges.  In transactions for securities not actively traded on a foreign
securities exchange, the Fund will deal directly with the dealers who make a
market in the securities involved, except in those circumstances where better
prices and execution are available elsewhere.  Such dealers usually are acting
as principal for their own account.  On occasion, securities may be

















<PAGE>23

purchased directly from the issuer.  Such portfolio securities are generally
traded on a net basis and do not normally involve brokerage commissions.
Securities firms may receive brokerage commissions on certain portfolio
transactions, including options, futures and options on futures transactions
and the purchase and sale of underlying securities upon exercise of options.
   
          The Fund may participate, if and when practicable, in bidding for
the purchase of securities for the Fund's portfolio directly from an issuer in
order to take advantage of the lower purchase price available to members of
such a group.  The Fund will engage in this practice, however, only when
Warburg, in its sole discretion, believes such practice to be otherwise in the
Fund's interest.
    
Portfolio Turnover

          The Fund does not intend to seek profits through short-term trading,
but the rate of turnover will not be a limiting factor when the Fund deems it
desirable to sell or purchase securities.  The Fund's portfolio turnover rate
is calculated by dividing the lesser of purchases or sales of its portfolio
securities for the year by the monthly average value of the portfolio
securities.  Securities with remaining maturities of one year or less at the
date of acquisition are excluded from the calculation.

          Certain practices that may be employed by the Fund could result in
high portfolio turnover.  For example, options on securities may be sold in
anticipation of a decline in the price of the underlying security (market
decline) or purchased in anticipation of a rise in the price of the underlying
security (market rise) and later sold.  The Fund's investment in special
situation companies could result in high portfolio turnover.  To the extent
that its portfolio is traded for the short-term, the Fund will be engaged
essentially in trading activities based on short-term considerations affecting
the value of an issuer's stock instead of long-term investments based on
fundamental valuation of securities.  Because of this policy, portfolio
securities may be sold without regard to the length of time for which they
have been held.  Consequently, the annual portfolio turnover rate of the Fund
may be higher than mutual funds having a similar objective that do not invest
in special situation companies.

                            MANAGEMENT OF THE FUND

Officers and Board of Directors

          The names (and ages) of the Fund's Directors and officers, their
addresses, present positions and principal occupations during the past five
years and other affiliations are set forth below.





















<PAGE>24

Richard N. Cooper (61). . .     Director
Room 7E47OHB                    National Intelligence Counsel;
Central Intelligence Agency     Professor at Harvard University;
930 Dolly Madison Blvd.         Director or Trustee of Circuit
McClain, Virginia 22107         City Stores, Inc. (retail electronics and
                                appliances) and Phoenix Home Life Insurance
                                Co.

Donald J. Donahue (71). . .     Director
99 Indian Field Road            Chairman of Magma Copper Company
Greenwich, Connecticut 06830    since January 1987; Director or Trustee of GEV
                                Corporation and Signet Star Reinsurance
                                Company; Chairman and Director of NAC Holdings
                                from September 1990-June 1993.

Jack W. Fritz (68)  . . .       Director
2425 North Fish Creek Road      Private investor; Consultant and
P.O. Box 483                    Director of Fritz Broadcasting, Inc. and
Wilson, Wyoming 83014           Fritz Communications (developers and operators
                                of radio stations); Director of Advo, Inc.
                                (direct mail advertising).
   
John L. Furth* (65) . . .       Chairman of the Board
466 Lexington Avenue            Vice Chairman and Director of EMW;
New York, New York 10017-3147   Associated with EMW since 1970; Chairman of
                                the Board or Chief Executive Officer of 15
                                other investment companies advised by Warburg;
                                President of one other investment company
                                advised by Warburg.
    
Thomas A. Melfe (63)  . .       Director
30 Rockefeller Plaza            Partner in the law firm of Donovan Leisure
New York, New York 10112        Newton & Irvine; Director of Municipal Fund
                                for New York Investors, Inc.

Alexander B. Trowbridge (66)    Director
1155 Connecticut Avenue, N.W.   President of Trowbridge Partners, Inc.
Suite 700                       (business consulting) from January 1990-
Washington, DC 20036            January 1994; President of the National
                                Association of Manufacturers from 1980-1990;



- ------------------------
* Indicates a Director who is an "interested person" of the Fund as defined
  in the 1940 Act.


<PAGE>25

                                Director or Trustee of New England Mutual
                                Life Insurance Co., ICOS Corporation
                                (biopharmaceuticals), P.H.H.  Corporation
                                (fleet auto management; housing and plant
                                relocation service), WMX Technologies Inc.
                                (solid and hazardous waste collection and
                                disposal), The Rouse Company (real estate
                                development), SunResorts International Ltd.
                                (hotel and real estate management), Harris
                                Corp.  (electronics and communications
                                equipment), The Gillette Co.  (personal care
                                products) and Sun Company Inc.  (petroleum
                                refining and marketing).
   
Arnold M. Reichman (47) .       President
466 Lexington Avenue            Managing Director and Assistant Secretary
New York, New York 10017-3147   of EMW; Associated with EMW since 1984; Senior
                                Vice President, Secretary and Chief Operating
                                Officer of Counsellors Securities; Officer of
                                other investment companies advised by Warburg.

Eugene L. Podsiadlo (38)        Senior Vice President
466 Lexington Avenue            Managing Director of EMW;
New York, New York 10017-3147   Associated with EMW since 1991; Vice President
                                of Citibank, N.A. from 1987-1991; Senior Vice
                                President of Counsellors Securities and
                                officer of other investment companies advised
                                by Warburg.

Stephen Distler (42)  . .       Vice President and Chief Financial Officer
466 Lexington Avenue            Managing Director, Controller and Assistant
New York, New York  10017-3147  Secretary of EMW; Associated with EMW since
                                1984; Treasurer of Counsellors Securities;
                                Vice President, Treasurer and Chief Accounting
                                Officer or Vice President and Chief Financial
                                Officer of other investment companies advised
                                by Warburg.



































<PAGE>26

Eugene P. Grace (44)  . .       Vice President and Secretary
466 Lexington Avenue            Associated with EMW since April 1994;
New York, New York 10017-3147   Attorney-at-law from September 1989-April
                                1994; life insurance agent, New York Life
                                Insurance Company from 1993-1994; General
                                Counsel and Secretary, Home Unity Savings Bank
                                from 1991-1992; Vice President and Chief
                                Compliance Officer of Warburg Securities; Vice
                                President and Secretary of other investment
                                companies advised by Warburg.


Howard Conroy (41)  . . .       Vice President, Treasurer and Chief
466 Lexington Avenue            Accounting Officer
New York, New York 10017-3147   Associated with EMW since 1992;
                                Associated with Martin Geller, C.P.A. from
                                1990-1992; Vice President, Finance with
                                Gabelli/Rosenthal & Partners, L.P. until 1990;
                                Vice President, Treasurer and Chief Accounting
                                Officer of other investment companies advised
                                by Warburg.

Karen Amato (32)  . . . .       Assistant Secretary
466 Lexington Avenue            Associated with EMW since 1987;
New York, New York 10017-3147   Assistant Secretary of other investment
                                companies advised by Warburg.

          No employee of Warburg or PFPC Inc., the Fund's co-administrator
("PFPC"), or any of their affiliates receives any compensation from the Fund
for acting as an officer or director of the Fund.  Each Director who is not a
director, trustee, officer or employee of Warburg, PFPC or any of their
affiliates receives an annual fee of $500, and $250 for each meeting of the
Board attended by him for his services as Director and is reimbursed for
expenses incurred in connection with his attendance at Board meetings.

Directors' Compensation
<TABLE>
<CAPTION>


                                                                    Total                          Total Compensation from
                                                              Compensation from                    all Investment Companies
      Name of Director                                               Fund                            Managed by Warburg+*
      ----------------                                        -----------------                    ------------------------
<S>                                                          <C>                                    <C>

 John L. Furth                                                      None**                                  None**
 Richard N. Cooper                                                  $1,500                                $42,500
 Donald J. Donahue                                                  $1,500                                $42,500
 Jack W. Fritz                                                      $1,500                                $42,500
 Thomas A. Melfe                                                    $1,500                                $42,500
 Alexander B. Trowbridge                                            $1,500                                $42,500

</TABLE>

















<PAGE>27


- ------------------------
+    Estimates of future payments to be made in the fiscal year ending October
     31, 1996 pursuant to existing arrangements.

*    Each Director also serves as a Director or Trustee of 15 other investment
     companies advised by Warburg.

**   Mr. Furth is considered to be an interested person of the Fund and
     Warburg, as defined under Section 2(a)(19) of the 1940 Act, and,
     accordingly, receives no compensation from the Fund or any other
     investment company managed by Warburg.

          As of November 30, 1995, directors and officers of the Fund as a
group owned of record 51,313 of the Fund's outstanding Common Shares.  As of
the same date, Mr. Furth may be deemed to have beneficially owned 43.49% of
the Fund's outstanding Common Shares, including shares owned by clients for
which Warburg has investment discretion.  Mr. Furth disclaims ownership of
these shares and does not intend to exercise voting rights with respect to
these shares.  No Director or officer owned of record any Advisor Shares.

          Ms. Elizabeth B. Dater, co-portfolio manager of the Fund, is also
co-portfolio manager of Warburg Pincus Emerging Growth Fund and the Small
Company Growth Portfolio of Warburg Pincus Trust.  Ms. Dater also manages an
institutional post-venture capital fund and is the former Director of Research
for Warburg's investment management activities.  Prior to joining Warburg in
1978, she was a vice president of research at Fiduciary Trust Company of New
York and an institutional sales assistant at Lehman Brothers.  Ms. Dater has
been a regular panelist on Maryland Public Television's Wall Street Week with
Louis Rukeyser since 1976.  Ms. Dater earned a B.A. degree from Boston
University in Massachusetts.
    
          Mr. Stephen J. Lurito, co-portfolio manager of the Fund, is also co-
portfolio manager of Warburg Pincus Emerging Growth Fund and the Small Company
Growth Portfolio of Warburg Pincus Trust.  Mr. Lurito, also the research
coordinator and a portfolio manager for micro-cap equity and post-venture
products, has been with EMW since 1987.  Prior to that he was a research
analyst at Sanford C. Bernstein & Company, Inc.  Mr. Lurito earned a B.A.
degree from the University of Virginia and an M.B.A. from The Wharton School,
University of Pennsylvania.



















<PAGE>28
   
          Mr. Robert S. Janis and Mr. Christopher M. Nawn are associate
portfolio managers and research analysts of the Fund.  Prior to joining
Counsellors in October 1994, Mr. Janis was a vice president and senior
research analyst at U.S. Trust Company of New York.  He earned B.A. and M.B.A.
degrees from the University of Pennsylvania.  Prior to joining Warburg in
September 1994, Mr. Nawn was a senior sector analyst and portfolio manager at
the Dreyfus Corporation.  He earned a B.A. degree from the Colorado College
and an M.B.A. degree from the University of Texas.
    
Investment Adviser and Co-Administrators
   
          Warburg serves as investment adviser to the Fund, Counsellors Funds
Service, Inc. ("Counsellors Service") serves as a co-administrator to the Fund
and PFPC serves as a co-administrator to the Fund pursuant to separate written
agreements (the "Advisory Agreement," the "Counsellors Service Co-
Administration Agreement" and the "PFPC Co-Administration Agreement,"
respectively).  The services provided by, and the fees payable by the Fund to,
Warburg under the Advisory Agreement, Counsellors Service under the
Counsellors Service Co-Administration Agreement and PFPC under the PFPC Co-
Administration Agreement are described in the Prospectuses.  Each class of
shares of the Fund bears its proportionate share of fees payable to Warburg,
Counsellors Service and PFPC in the proportion that its assets bear to the
aggregate assets of the Fund at the time of calculation.  These fees are
calculated at an annual rate based on a percentage of the Fund's average daily
net assets.  See the Prospectuses, "Management of the Funds."

          Warburg agrees that if, in any fiscal year, the expenses borne by
the Fund exceed the applicable expense limitations imposed by the securities
regulations of any state in which shares of the Fund are registered or
qualified for sale to the public, it will reimburse the Fund to the extent
required by such regulations.  Unless otherwise required by law, such
reimbursement would be accrued and paid on a monthly basis.  At the date of
this Statement of Additional Information, the most restrictive annual expense
limitation applicable to the Fund is 2.5% of the first $30 million of the
average net assets of the Fund, 2% of the next $70 million of the average net
assets of the Fund and 1.5% of the remaining average net assets of the Fund.

          During the fiscal period ended October 31, 1995, Warburg earned, and
voluntarily waived, $1,756, the full amount due it under the Advisory
Agreement; Warburg also reimbursed the Fund $31,458 during the fiscal period
ended October 31, 1995.  During the fiscal year ended October 31, 1995,
Counsellors Service and PFPC each earned $140 in co-administrative fees.  PFPC
voluntarily waived all of such fees.
    
Custodians and Transfer Agent

          PNC Bank, National Association ("PNC") and State Street Bank and
Trust Company ("State Street") serve as custodians of the Fund's U.S. and
foreign assets, respectively, pursuant to separate custodian agreements (the
"Custodian Agreements").
















<PAGE>29

Under the Custodian Agreements, PNC and State Street each (i) maintains a
separate account or accounts in the name of the Fund, (ii) holds and transfers
portfolio securities on account of the Fund, (iii) makes receipts and
disbursements of money on behalf of the Fund, (iv) collects and receives all
income and other payments and distributions for the account of the Fund's
portfolio securities held by it and (v) makes periodic reports to the Board
concerning the Fund's custodial arrangements.  PNC may delegate its duties
under its Custodian Agreement with the Fund to a wholly owned direct or
indirect subsidiary of PNC or PNC Bank Corp. upon notice to the Fund and upon
the satisfaction of certain other conditions.  With the approval of the Board,
State Street is authorized to select one or more foreign banking institutions
and foreign securities depositories to serve as sub-custodian on behalf of the
Fund.  PNC is an indirect, wholly owned subsidiary of PNC Bank Corp., and its
principal business address is Broad and Chestnut Streets, Philadelphia,
Pennsylvania  19101.  The principal business address of State Street is 225
Franklin Street, Boston, Massachusetts 02110.

          State Street also serves as the shareholder servicing, transfer and
dividend disbursing agent of the Fund pursuant to a Transfer Agency and
Service Agreement, under which State Street (i) issues and redeems shares of
the Fund, (ii) addresses and mails all communications by the Fund to record
owners of Fund shares, including reports to shareholders, dividend and
distribution notices and proxy material for its meetings of shareholders,
(iii) maintains shareholder accounts and, if requested, sub-accounts and
(iv) makes periodic reports to the Board concerning the transfer agent's
operations with respect to the Fund.  State Street has delegated to Boston
Financial Data Services, Inc., a 50% owned subsidiary ("BFDS"), responsibility
for most shareholder servicing functions.  BFDS's principal business address
is 2 Heritage Drive, Boston, Massachusetts 02171.
   
Organization of the Fund

          The Fund's charter authorizes the Board to issue three billion full
and fractional shares of common stock, $.001 par value per share.  Common
Stock ("Common Shares"), of which 1 billion shares are designated Common Stock
- -- Series 1 and 1 billion shares are designated Common Stock Series 2 (the
"Advisor Shares").  Only Common Shares and Advisor Shares have been issued by
the Fund.

          All shareholders of the Fund in each class, upon liquidation, will
participate ratably in the Fund's net assets.  Shares do not have cumulative
voting rights, which means that holders of more than 50% of the shares voting
for the election of Directors can elect all Directors.  Shares are
transferable but have no preemptive, conversion or subscription rights.
    





















<PAGE>30

Distribution and Shareholder Servicing
   
          Common Shares.  The Fund has entered into a Shareholder Servicing
and Distribution Plan (the "12b-1 Plan"), pursuant to Rule 12b-1 under the
1940 Act, pursuant to which the Fund will pay Counsellors Securities, in
consideration for Services (as defined below), a fee calculated at an annual
rate of .25% of the average daily net assets of the Common Shares of the Fund.
Services performed by Counsellors Securities include (i) the sale of the
Common Shares, as set forth in the 12b-1 Plan ("Selling Services"), (ii)
ongoing servicing and/or maintenance of the accounts of Common Shareholders of
the Fund, as set forth in the 12b-1 Plan ("Shareholder Services"), and (iii)
sub-transfer agency services, subaccounting services or administrative
services related to the sale of the Common Shares, as set forth in the 12b-1
Plan ("Administrative Services" and collectively with Selling Services and
Administrative Services, "Services") including, without limitation, (a)
payments reflecting an allocation of overhead and other office expenses of
Counsellors Securities related to providing Services; (b) payments made to,
and reimbursement of expenses of, persons who provide support services in
connection with the distribution of the Common Shares including, but not
limited to, office space and equipment, telephone facilities, answering
routine inquiries regarding the Fund, and providing any other Shareholder
Services; (c) payments made to compensate selected dealers or other authorized
persons for providing any Services; (d) costs relating to the formulation and
implementation of marketing and promotional activities for the Common Shares,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising, and related travel and
entertainment expenses; (e) costs of printing and distributing prospectuses,
statements of additional information and reports of the Fund to prospective
shareholders of the Fund; and (f) costs involved in obtaining whatever
information, analyses and reports with respect to marketing and promotional
activities that the Fund may, from time to time, deem advisable.  During the
period commencing September 30, 1995 (commencement of operations) to October
31, 1995, the Fund paid $351.00 in 12b-1 fees, all of which was spent on
advertising and marketing communications.
    
          Pursuant to the 12b-1 Plan, Counsellors Securities provides the
Board with periodic reports of amounts expended under the 12b-1 Plan and the
purpose for which the expenditures were made.
   
          Advisor Shares.  The Fund may, in the future, enter into agreements
("Agreements") with institutional shareholders of record, broker-dealers,
financial institutions, depository institutions, retirement plans and
financial intermediaries ("Institutions") to provide certain distribution,
shareholder servicing, administrative and/or accounting services for their
clients or customers (or participants in the case of retirement plans)
("Customers") who are beneficial owners of Advisor Shares.  See the Advisor
Prospectus, "Shareholder Servicing."  Agreements will be governed by a
distribution plan (the "Distribution Plan") pursuant to Rule 12b-1 under the
1940 Act.  The Distribution Plan requires the Board, at least quarterly, to
receive and review written reports of amounts
















<PAGE>31

expended under the Distribution Plan and the purpose for which such
expenditures were made.

          An Institution with which the Fund has entered into an Agreement
with respect to its Advisor Shares may charge a Customer one or more of the
following types of fees, as agreed upon by the Institution and the Customer,
with respect to the cash management or other services provided by the
Institution: (i) account fees (a fixed amount per month or per year); (ii)
transaction fees (a fixed amount per transaction processed); (iii)
compensation balance requirements (a minimum dollar amount a Customer must
maintain in order to obtain the services offered); or (iv) account maintenance
fees (a periodic charge based upon the percentage of assets in the account or
of the dividend paid on those assets).  Services provided by an Institution to
Customers are in addition to, and not duplicative of, the services to be
provided under the Fund's co-administration and distribution and shareholder
servicing arrangements.  A Customer of an Institution should read the relevant
Prospectus and this Statement of Additional Information in conjunction with
the Agreement and other literature describing the services and related fees
that would be provided by the Institution to its Customers prior to any
purchase of Fund shares.  Prospectuses are available from the Fund's
distributor upon request.  No preference will be shown in the selection of
Fund portfolio investments for the instruments of Institutions.

          General.  The Distribution Plan and the 12b-1 Plan will continue in
effect for so long as their continuance is specifically approved at least
annually by the Board, including a majority of the Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of the Distribution Plan or the 12b-1 Plan, as the
case may be ("Independent Directors").  Any material amendment of the
Distribution Plan or the 12b-1 Plan would require the approval of the Board in
the manner described above.  The Distribution Plan or the 12b-1 Plan may not
be amended to increase materially the amount to be spent thereunder without
shareholder approval of the Advisor Shares or the Common Shares, as the case
may be.  Neither the Distribution Plan nor the 12b-1 Plan may be terminated at
any time, without penalty, by vote of a majority of the Independent Directors
or by a vote of a majority of the outstanding voting securities of the Advisor
Shares or the Common Shares, as the case may be.
    

                ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

          The offering price of the Fund's shares is equal to the per share
net asset value of the relevant class of shares of the Fund.  Information on
how to purchase and redeem Fund shares and how such shares are priced is
included in the Prospectuses under "Net Asset Value."

          Under the 1940 Act, the Fund may suspend the right of redemption or
postpone the date of payment upon redemption for any period during which the
NYSE is closed, other than customary weekend and holiday closings, or during
which trading on the
















<PAGE>32

NYSE is restricted, or during which (as determined by the SEC) an emergency
exists as a result of which disposal or fair valuation of portfolio securities
is not reasonably practicable, or for such other periods as the SEC may
permit.  (The Fund may also suspend or postpone the recordation of an exchange
of its shares upon the occurrence of any of the foregoing conditions.)
   
          If the Board determines that conditions exist which make payment of
redemption proceeds wholly in cash unwise or undesirable, the Fund may make
payment wholly or partly in securities or other investment instruments which
may not constitute securities as such term is defined in the applicable
securities laws.  If a redemption is paid wholly or partly in securities or
other property, a shareholder would incur transaction costs in disposing of
the redemption proceeds.  The Fund intends to comply with Rule 18f-1
promulgated under the 1940 Act with respect to redemptions in kind.
    
          Automatic Cash Withdrawal Plan.  An automatic cash withdrawal plan
(the "Plan") is available to shareholders who wish to receive specific amounts
of cash periodically.  Withdrawals may be made under the Plan by redeeming as
many shares of the Fund as may be necessary to cover the stipulated withdrawal
payment.  To the extent that withdrawals exceed dividends, distributions and
appreciation of a shareholder's investment in the Fund, there will be a
reduction in the value of the shareholder's investment and continued
withdrawal payments may reduce the shareholder's investment and ultimately
exhaust it.  Withdrawal payments should not be considered as income from
investment in the Fund.  All dividends and distributions on shares in the Plan
are automatically reinvested at net asset value in additional shares of the
Fund.


                              EXCHANGE PRIVILEGE
   
          An exchange privilege with certain other funds advised by Warburg is
available to investors in the Fund.  The funds into which exchanges can be
made by holders of Common Shares currently are the Common Shares of Warburg
Pincus Cash Reserve Fund, Warburg Pincus New York Tax Exempt Fund, Warburg
Pincus New York Intermediate Municipal Fund, Warburg Pincus Tax Free Fund,
Warburg Pincus Intermediate Maturity Government Fund, Warburg Pincus Fixed
Income Fund, Warburg Pincus Short-Term Tax-Advantaged Bond Fund, Warburg
Pincus Global Fixed Income Fund, Warburg Pincus Balanced Fund, Warburg Pincus
Growth & Income Fund, Warburg Pincus Capital Appreciation Fund, Warburg Pincus
Small Company Value Fund, Warburg Pincus Emerging Growth Fund, Warburg Pincus
International Equity Fund, Warburg Pincus Emerging Markets Fund, Warburg
Pincus Japan Growth Fund and Warburg Pincus Japan OTC Fund.  Common
Shareholders of the Fund may exchange all or part of their shares for Common
Shares of these or other mutual funds organized by Warburg in the future on
the basis of their relative net asset values per share at the time of
exchange.  Exchanges of Advisor Shares may currently be made with Advisor
Shares of Warburg Pincus Balanced Fund, Warburg Pincus Capital Appreciation
Fund, Warburg Pincus Emerging Growth Fund,
    
















<PAGE>33

Warburg Pincus Growth & Income Fund and Warburg Pincus International Equity
Fund at their relative net asset values at the time of the exchange.

          The exchange privilege enables shareholders to acquire shares in a
fund with a different investment objective when they believe that a shift
between funds is an appropriate investment decision.  This privilege is
available to shareholders residing in any state in which the Common Shares or
Advisor Shares being acquired, as relevant, may legally be sold.  Prior to any
exchange, the investor should obtain and review a copy of the current
prospectus of the relevant class of each fund into which an exchange is being
considered.  Shareholders may obtain a prospectus of the relevant class of the
fund into which they are contemplating an exchange from Counsellors
Securities.
   
          Upon receipt of proper instructions and all necessary supporting
documents, shares submitted for exchange are redeemed at the then-current net
asset value of the relevant class and the proceeds are invested on the same
day, at a price as described above, in shares of the relevant class of the
fund being acquired.  Warburg reserves the right to reject more than three
exchange requests by a shareholder in any 30-day period.  The exchange
privilege may be modified or terminated at any time upon 60 days' notice to
shareholders.
    

                    ADDITIONAL INFORMATION CONCERNING TAXES

          The discussion set out below of tax considerations generally
affecting the Fund and its shareholders is intended to be only a summary and
is not intended as a substitute for careful tax planning by prospective
shareholders.  Shareholders are advised to consult their own tax advisers with
respect to the particular tax consequences to them of an investment in the
Fund.

          The Fund intends to qualify each year as a "regulated investment
company" under Subchapter M of the Code.  If it qualifies as a regulated
investment company, the Fund will pay no federal income taxes on its taxable
net investment income (that is, taxable income other than net realized capital
gains) and its net realized capital gains that are distributed to
shareholders.  To qualify under Subchapter M, the Fund must, among other
things:  (i) distribute to its shareholders at least 90% of its taxable net
investment income (for this purpose consisting of taxable net investment
income and net realized short-term capital gains); (ii) derive at least 90% of
its gross income from dividends, interest, payments with respect to loans of
securities, gains from the sale or other disposition of securities, or other
income (including, but not limited to, gains from options, futures, and
forward contracts) derived with respect to the Fund's business of investing in
securities; (iii) derive less than 30% of its annual gross income from the
sale or other disposition of securities, options, futures or forward contracts
held for less than three months; and (iv) diversify its holdings so that, at
the end of each fiscal quarter of the Fund (a) at least 50% of the market
value of the Fund's assets is represented by cash, U.S. Government Securities
and other securities, with those other securities limited, with respect to any
one issuer, to an amount no













<PAGE>34
   
greater in value than 5% of the Fund's total assets and to not more than 10%
of the outstanding voting securities of the issuer, and (b) not more than 25%
of the market value of the Fund's assets is invested in the securities of any
one issuer (other than U.S. Government Securities or securities of other
regulated investment companies) or of two or more issuers that the Fund
controls and that are determined to be in the same or similar trades or
businesses or related trades or businesses.  In meeting these requirements,
the Fund may be restricted in the selling of securities held by the Fund for
less than three months and in the utilization of certain of the investment
techniques described above and in the Fund's Prospectuses.  As a regulated
investment company, the Fund will be subject to a 4% non-deductible excise tax
measured with respect to certain undistributed amounts of ordinary income and
capital gain required to be but not distributed under a prescribed formula.
The formula requires payment to shareholders during a calendar year of
distributions representing at least 98% of the Fund's taxable ordinary income
for the calendar year and at least 98% of the excess of its capital gains over
capital losses realized during the one-year period ending October 31 during
such year, together with any undistributed, untaxed amounts of ordinary income
and capital gains from the previous calendar year.  The Fund expects to pay
the dividends and make the distributions necessary to avoid the application of
this excise tax.
    
          The Fund's transactions, if any, in foreign currencies, forward
contracts, options and futures contracts (including options and forward
contracts on foreign currencies) will be subject to special provisions of the
Code that, among other things, may affect the character of gains and losses
recognized by the Fund (i.e., may affect whether gains or losses are ordinary
or capital), accelerate recognition of income to the Fund, defer Fund losses
and cause the Fund to be subject to hyperinflationary currency rules.  These
rules could therefore affect the character, amount and timing of distributions
to shareholders.  These provisions also (i) will require the Fund to
mark-to-market certain types of its positions (i.e., treat them as if they
were closed out) and (ii) may cause the Fund to recognize income without
receiving cash with which to pay dividends or make distributions in amounts
necessary to satisfy the distribution requirements for avoiding income and
excise taxes.  The Fund will monitor its transactions, will make the
appropriate tax elections and will make the appropriate entries in its books
and records when it acquires any foreign currency, forward contract, option,
futures contract or hedged investment so that (a) neither the Fund nor its
shareholders will be treated as receiving a materially greater amount of
capital gains or distributions than actually realized or received, (b) the
Fund will be able to use substantially all of its losses for the fiscal years
in which the losses actually occur and (c) the Fund will continue to qualify
as a regulated investment company.

          A shareholder of the Fund receiving dividends or distributions in
additional shares should be treated for federal income tax purposes as
receiving a distribution in an amount equal to the amount of money that a
shareholder receiving cash dividends or distributions receives, and should
have a cost basis in the shares received equal to that amount.
















<PAGE>35

          Investors considering buying shares just prior to a dividend or
capital gain distribution should be aware that, although the price of shares
purchased at that time may reflect the amount of the forthcoming distribution,
those who purchase just prior to a distribution will receive a distribution
that will nevertheless be taxable to them.  Upon the sale or exchange of
shares, a shareholder will realize a taxable gain or loss depending upon the
amount realized and the basis in the shares.  Such gain or loss will be
treated as capital gain or loss if the shares are capital assets in the
shareholder's hands, and, as described in the Prospectuses, will be long-term
or short-term depending upon the shareholder's holding period for the shares.
Any loss realized on a sale or exchange will be disallowed to the extent the
shares disposed of are replaced, including replacement through the
reinvestment of dividends and capital gains distributions in the Fund, within
a period of 61 days beginning 30 days before and ending 30 days after the
disposition of the shares.  In such a case, the basis of the shares acquired
will be increased to reflect the disallowed loss.

          Each shareholder will receive an annual statement as to the federal
income tax status of his dividends and distributions from the Fund for the
prior calendar year.  Furthermore, shareholders will also receive, if
appropriate, various written notices after the close of the Fund's taxable
year regarding the federal income tax status of certain dividends and
distributions that were paid (or that are treated as having been paid) by the
Fund to its shareholders during the preceding year.

          If a shareholder fails to furnish a correct taxpayer identification
number, fails to report fully dividend or interest income, or fails to certify
that he has provided a correct taxpayer identification number and that he is
not subject to "backup withholding," the shareholder may be subject to a 31%
"backup withholding" tax with respect to (i) taxable dividends and
distributions and (ii) the proceeds of any sales or repurchases of shares of
the Fund.  An individual's taxpayer identification number is his social
security number.  Corporate shareholders and other shareholders specified in
the Code are or may be exempt from backup withholding.  The backup withholding
tax is not an additional tax and may be credited against a taxpayer's federal
income tax liability.  Dividends and distributions also may be subject to
state and local taxes depending on each shareholder's particular situation.

Investment in Passive Foreign Investment Companies

          If the Fund purchases shares in certain foreign entities classified
under the Code as "passive foreign investment companies" ("PFICs"), the Fund
may be subject to federal income tax on a portion of an "excess distribution"
or gain from the disposition of the shares, even though the income may have to
be distributed as a taxable dividend by the Fund to its shareholders.  In
addition, gain on the disposition of shares in a PFIC generally is treated as
ordinary income even though the shares are capital assets in the hands of the
Fund.  Certain interest charges may be imposed on either the Fund or its
shareholders with respect to any taxes arising from excess distributions or
gains on the disposition of shares in a PFIC.
















<PAGE>36

          The Fund may be eligible to elect to include in its gross income its
share of earnings of a PFIC on a current basis.  Generally, the election would
eliminate the interest charge and the ordinary income treatment on the
disposition of stock, but such an election may have the effect of accelerating
the recognition of income and gains by the Fund compared to a fund that did
not make the election.  In addition, information required to make such an
election may not be available to the Fund.

          On April 1, 1992 proposed regulations of the Internal Revenue
Service (the "IRS") were published providing a mark-to-market election for
regulated investment companies.  The IRS subsequently issued a notice
indicating that final regulations will provide that regulated investment
companies may elect the mark-to-market election for tax years ending after
March 31, 1992 and before April 1, 1993.  Whether and to what extent the
notice will apply to taxable years of the Fund is unclear.  If the Fund is not
able to make the foregoing election, it may be able to avoid the interest
charge (but not the ordinary income treatment) on disposition of the stock by
electing, under proposed regulations, each year to mark-to-market the stock
(that is, treat it as if it were sold for fair market value).  Such an
election could result in acceleration of income to the Fund.


                         DETERMINATION OF PERFORMANCE
   
          From time to time, the Fund may quote the total return of its Common
Shares and/or Advisor Shares in advertisements or in reports and other
communications to shareholders.  With respect to the Fund's Common Shares, the
actual (non-annualized) total return for the period commencing September 30,
1995 (commencement of operations) and ended October 31, 1995 was 6.90% (5.60%
without waivers), and the average annual total return for the same period was
109.18% (82.70% without waivers).  These figures are calculated by finding the
average annual compounded rates of return for the one-, five- and ten-
(or such shorter period as the relevant class of shares has been offered) year
periods that would equate the initial amount invested to the ending redeemable
value according to the following formula:  P (1 + T)[*GRAPHIC OMITTED-SEE
FOOTNOTE BELOW] = ERV.  For purposes of this formula, "P" is a hypothetical
investment of $1,000; "T" is average annual total return; "n" is number of
years; and "ERV" is the ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one-, five- or ten-year periods (or
fractional portion thereof).  Total return or "T" is computed by finding the
average annual change in the value of an initial $1,000 investment over the
period and assumes that all dividends and distributions are reinvested during
the period.  With respect to Advisor Shares, the Fund's actual
(non-annualized) total return for the period commencing September 30, 1995
(commencement of operation) and ended October 31, 1995 was 6.80% (2.70%
without waivers), and the Fund's average annual total return for the same
period was 107.02% (34.27% without waivers).  Investors should note that this
performance may not be representative of the Fund's total return in longer
market cycles.


- ------------------------
* - The expression (1 + T) is being raised to the nth power.














<PAGE>37

          The Fund may advertise, from time to time, comparisons of the
performance of its Common Shares and/or Advisor Shares with that of one or
more other mutual funds with similar investment objectives.  The Fund may
advertise average annual calendar-year-to-date and calendar quarter returns,
which are calculated according to the formula set forth in the preceding
paragraph, except that the relevant measuring period would be the number of
months that have elapsed in the current calendar year or most recent three
months, as the case may be.
    
          The performance of a class of Fund shares will vary from time to
time depending upon market conditions, the composition of the Fund's portfolio
and operating expenses allocable to it.  As described above, total return is
based on historical earnings and is not intended to indicate future
performance.  Consequently, any given performance quotation should not be
considered as representative of performance for any specified period in the
future.  Performance information may be useful as a basis for comparison with
other investment alternatives.  However, the Fund's performance will
fluctuate, unlike certain bank deposits or other investments which pay a fixed
yield for a stated period of time.  Any fees charged by Institutions or other
institutional investors directly to their customers in connection with
investments in Fund shares are not reflected in the Fund's total return, and
such fees, if charged, will reduce the actual return received by customers on
their investments.
   
          Reference may be made in advertising a class of Fund shares to
opinions of Wall Street economists and analysts regarding economic cycles and
their effects historically on the performance of small companies, both as a
class and relative to other investments.  The Fund may also discuss its beta,
or volatility relative to the market, and make reference to its relative
performance in various market cycles in the United States.
    

                             AUDITORS AND COUNSEL
   
          Coopers & Lybrand L.L.P. ("Coopers & Lybrand"), with principal
offices at 2400 Eleven Penn Center, Philadelphia, Pennsylvania 19103, serves
as independent auditors for the Fund.  The Fund's financial statement for the
fiscal period ended October 31, 1995 that appears in this Statement of
Additional Information has been audited by Coopers & Lybrand, whose report
thereon appears elsewhere herein and has been included herein in reliance upon
the report of such firm of independent auditors given upon their authority as
experts in accounting and auditing.

          Willkie Farr & Gallagher serves as counsel for the Fund as well as
counsel to Warburg, Counsellors Service and Counsellors Securities.





















<PAGE>38

                                 MISCELLANEOUS

          As of November 30, 1995, the name, address and percentage of
ownership of each person (other than Mr. Furth, see "Management of Fund") that
owns of record 5% or more of the Fund's outstanding shares where as follows:

Common Shares

          Charles Schwab & Co., Inc. ("Schwab"), Attn:  Mutual Funds Dept.,
101 Montgomery Street, San Francisco, CA 94104-4122 -- 22.24%.  The Fund
believes that Schwab is not the beneficial owner of shares held of record by
it.  Mr. Lionel I. Pincus, Chairman of the Board and Chief Executive Officer
of EMW, may be deemed to have beneficially owned 44.07% of the Common Shares
outstanding, including shares owned by clients for which Warburg has
investment discretion and by companies that EMW may be deemed to control.  Mr.
Pincus disclaims ownership of these shares and does not intend to exercise
voting rights with respect to these shares.

Advisor Shares

          Warburg, Pincus Counsellors, Inc., 466 Lexington Avenue, 10th Floor,
New York, NY  10017 -- 83.88%.  Warburg holds these shares as a result of
limited distribution activities of the Advisor Shares since commencement of
the Fund's operations.  Mr. Pincus may be deemed to have beneficially owned
84.03% of the Advisor Shares outstanding, including shares owned by clients
for which Warburg has investment discretion and by companies that EMW may be
deemed to control.  Mr. Pincus disclaims ownership of these shares and does
not intend to exercise voting rights with respect to these shares.


                             FINANCIAL STATEMENTS

          The Fund's audited financial statements for the fiscal year ended
October 31, 1995 follow the Report of Independent Auditors.
    































<PAGE>A-1

                                   APPENDIX

                            DESCRIPTION OF RATINGS

Commercial Paper Ratings

          Commercial paper rated A-1 by Standard and Poor's Ratings Group
("S&P") indicates that the degree of safety regarding timely payment is
strong.  Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign designation.  Capacity for timely
payment on commercial paper rated A-2 is satisfactory, but the relative degree
of safety is not as high as for issues designated A-1.

          The rating Prime-1 is the highest commercial paper rating assigned
by Moody's Investors Services, Inc. ("Moody's").  Issuers rated Prime-1 (or
related supporting institutions) are considered to have a superior capacity
for repayment of short-term promissory obligations.  Issuers rated Prime-2 (or
related supporting institutions) are considered to have a strong capacity for
repayment of short-term promissory obligations.  This will normally be
evidenced by many of the characteristics of issuers rated Prime-1 but to a
lesser degree.  Earnings trends and coverage ratios, while sound, will be more
subject to variation.  Capitalization characteristics, while still
appropriate, may be more affected by external conditions.  Ample alternative
liquidity is maintained.

Corporate Bond Ratings

          The following summarizes the ratings used by S&P for corporate
bonds:

          AAA - This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to pay interest and
repay principal.

          AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from AAA issues only in small degree.

          A - Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher-rated
categories.

          BBB - This is the lowest investment grade.  Debt rated BBB is
regarded as having an adequate capacity to pay interest and repay principal.
Although it normally exhibits adequate protection parameters, adverse economic
conditions or changing circumstances are more likely to lead to a weakened
capacity to pay interest and repay principal for bonds in this category than
for bonds in higher rated categories.


















<PAGE>A-2

          To provide more detailed indications of credit quality, the ratings
from "AA" to "BBB" may be modified by the addition of a plus or minus sign to
show relative standing within this major rating category.

          The following summarizes the ratings used by Moody's for corporate
bonds:

          Aaa - Bonds that are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edged."  Interest payments are protected by a large or
exceptionally stable margin and principal is secure.  While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.

          Aa - Bonds that are rated Aa are judged to be of high quality by all
standards.  Together with the Aaa group they comprise what are generally known
as high grade bonds.  They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

          A - Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium-grade obligations.
Factors giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment sometime
in the future.

          Baa - Bonds which are rated Baa are considered as medium-grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time.  Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

          Moody's applies numerical modifiers (1, 2 and 3) with respect to the
bonds rated "Aa" through "Baa".  The modifier 1 indicates that the bond being
rated ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the bond
ranks in the lower end of its generic rating category.


























<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
 WARBURG PINCUS POST-VENTURE CAPITAL FUND
- --------------------------------------------------------------------------------

                                                                December 8, 1995

Dear Shareholder:

     The  objective of Warburg Pincus Post-Venture  Capital Fund (the 'Fund') is
long-term growth  of  capital.  The  Fund pursues  its  objective  by  investing
primarily   in  equity   securities  of   companies  deemed   to  be   in  their
post-venture-capital stage.

     From the Fund's inception on September 29, 1995, through October 31,  1995,
it gained 6.90%*. Its total net assets were $3,025,429.

     We are quite optimistic about the Fund's prospects. A major study assessing
the  impact of venture-capital financing  on firms' performance** concluded that
venture-backed companies generate superior results relative to those that lacked
such backing. According  to the  study, venture-backed  firms create  innovative
products  and services. Relative to Fortune 500 companies, they create jobs at a
faster pace, spend more on research and development, and create sales-especially
export sales-at a faster rate.  Our own considerable experience researching  and
evaluating   the  performance  of   venture-backed  companies  yields  similarly
favorable conclusions.

     We believe that  the Fund's  focus on such  companies offers  a unique  and
attractive opportunity to aggressive investors.

<TABLE>
<S>                                      <C>
Elizabeth B. Dater                       Stephen J. Lurito
Co-Portfolio Manager                     Co-Portfolio Manager
</TABLE>

 * Non-annualized.   This  figure  represents  past  performance  and  does  not
   guarantee future  results.  Investment  return  and  principal  value  of  an
   investment will fluctuate so that an investor's shares upon redemption may be
   worth more or less than original cost.

**Fifth  Annual  Economic  Impact  of Venture  Capital  Study,  National Venture
  Capital Association/ Coopers & Lybrand L.L.P. (U.S.A.), 1995.

12
- --------------------------------------------------------------------------------



<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

To the Boards of Directors, Trustees and Shareholders of
  Warburg Pincus Equity Funds:

We  have audited the accompanying statements of net assets of the Warburg Pincus
Capital Appreciation  Fund,  Warburg Pincus  Emerging  Growth Fund  and  Warburg
Pincus  International Equity Fund and the  accompanying statements of assets and
liabilities including the schedules of  investments of Warburg Pincus Japan  OTC
Fund,  Warburg  Pincus Emerging  Markets  Fund and  Warburg  Pincus Post-Venture
Capital Fund (all Funds collectively referred  to as the 'Warburg Pincus  Equity
Funds') as of October 31, 1995, and the related statements of operations for the
year  (or period) then  ended, and the  statements of changes  in net assets for
each of the two years (or period)  and the financial highlights for each of  the
three years (or period) in the period then ended. These financial statements and
financial  highlights  are  the  responsibility of  the  Funds'  management. Our
responsibility is  to  express an  opinion  on these  financial  statements  and
financial  highlights  based  on our  audits.  The financial  highlights  of the
Warburg Pincus  Equity Funds  for each  of the  two years  in the  period  ended
October  31, 1992, were  audited by other auditors,  whose report dated December
15, 1992, expressed an unqualified opinion.

We  conducted  our  audits  in  accordance  with  generally  accepted   auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance  about  whether  the  financial  statements  and  financial
highlights  are free of material misstatement. An audit includes examining, on a
test basis, evidence  supporting the  amounts and disclosures  in the  financial
statements.  Our  procedures included  confirmation  of securities  owned  as of
October 31, 1995, by  correspondence with the custodians  and brokers. 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  each
of  the Warburg Pincus Equity  Funds as of October 31,  1995, and the results of
their operations for the year (or period)  then ended, and the changes in  their
net  assets for each of  the two years (or  period) and the financial highlights
for each of the three years (or period) in the period then ended, in  conformity
with generally accepted accounting principles.

Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA
December 14, 1995

                                                                              67
- --------------------------------------------------------------------------------




<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                SHARES       VALUE
                                                                                               --------    ----------
<S>                                                                                            <C>         <C>
COMMON STOCK (81.2%)

CAPITAL GOODS

Computers (26.7%)
  Applix, Inc. +                                                                                  2,400    $   66,600
  Atria Software, Inc. +                                                                            400        14,300
  Auspex Systems, Inc. +                                                                          1,100        15,537
  Boca Research, Inc. +                                                                           1,100        27,775
  Brock Control Systems, Inc. +                                                                   5,000        39,375
  Cheyenne Software, Inc. +                                                                       1,500        31,125
  Continuum, Inc. +                                                                                 800        31,500
  FileNet Corp. +                                                                                 1,300        58,987
  Hyperion Software Corp. +                                                                       1,300        64,025
  Logic Works, Inc. +                                                                             3,000        45,750
  Macromedia, Inc. +                                                                                500        18,500
  Manugistics Group, Inc. +                                                                       3,400        58,650
  McAfee Associates, Inc. +                                                                       1,200        69,900
  Network General Corp. +                                                                         1,300        53,950
  Parametric Technology Corp. +                                                                     500        33,437
  Softkey International, Inc. +                                                                   2,200        69,300
  Synopsys, Inc. +                                                                                  800        30,000
  System Software Associates, Inc.                                                                2,000        61,750
  Verity, Inc. +                                                                                  2,000        73,500
                                                                                                           ----------
                                                                                                              863,961
                                                                                                           ----------
Electronics (5.5%)
  Asyst Technologies, Inc. +                                                                      1,300        54,600
  Maxim Integrated Products, Inc. +                                                                 400        29,900
  Watkins Johnson Co.                                                                             1,100        52,938
  Xilinx, Inc. +                                                                                    900        41,400
                                                                                                           ----------
                                                                                                              178,838
                                                                                                           ----------
Office Equipment & Supplies (1.1%)
  Viking Office Products, Inc. +                                                                    800        35,600
                                                                                                           ----------

CONSUMER

Business Services (4.9%)
  Norrell Corp.                                                                                     600        18,525
  On Assignment, Inc. +                                                                           1,100        29,700
  PMT Services, Inc. +                                                                            1,200        32,250
  QuickResponse Services, Inc. +                                                                  1,200        30,000
  Solectron Corp. +                                                                               1,200        48,300
                                                                                                           ----------
                                                                                                              158,775
                                                                                                           ----------
Consumer Services (0.5%)
  DEVRY, Inc. +                                                                                     700        15,575
                                                                                                           ----------
</TABLE>

                   See Accompanying Notes to Financial Statements.
                                                                              33
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                SHARES       VALUE
                                                                                               --------    ----------

<S>                                                                                            <C>         <C>
COMMON STOCK (CONT'D)
Healthcare (16.9%)
  American Oncology Resources, Inc. +                                                               600    $   21,000
  Arbor Health Care Co. +                                                                         2,200        37,400
  EMcare Holdings, Inc. +                                                                         2,700        62,100
  Endosonics Corp. +                                                                              2,000        31,750
  Enterprise Systems, Inc. +                                                                      3,500        81,813
  Health Care & Retirement Corp. +                                                                  200         5,875
  Health Managment System, Inc. +                                                                 1,600        51,200
  Healthsource, Inc. +                                                                            1,300        68,900
  Oxford Health Plans, Inc. +                                                                       800        62,600
  ThermoTrex Corp. +                                                                                600        21,525
  Total Renal Care Holdings, Inc. +                                                               5,000       101,875
                                                                                                           ----------
                                                                                                              546,038
                                                                                                           ----------
Leisure & Entertainment (1.1%)
  Regal Cinemas, Inc. +                                                                             900        35,325
                                                                                                           ----------

Lodging & Restaurants (0.4%)
  Doubletree Corp. +                                                                                600        13,200
                                                                                                           ----------

Pharmaceuticals (4.2%)
  Cephalon, Inc. +                                                                                  900        27,000
  DepoTech Corp. +                                                                                2,000        29,000
  Genzyme Corp. +                                                                                   800        46,600
  Genzyme Corp. -- Tissue Repair Division +                                                       1,900        33,963
                                                                                                           ----------
                                                                                                              136,563
                                                                                                           ----------
Retail (4.4%)
  Borders Group, Inc. +                                                                           1,500        25,688
  Micro Warehouse, Inc. +                                                                           600        26,700
  Neostar Retail Group, Inc. +                                                                    1,900        28,975
  Office Depot, Inc. +                                                                            1,100        31,487
  PETsMART, Inc. +                                                                                  900        30,150
                                                                                                           ----------
                                                                                                              143,000
                                                                                                           ----------
ENERGY AND RELATED

Oil Services (0.9%)
  Input/Output, Inc. +                                                                              800        29,900
                                                                                                           ----------

FINANCE

Financial Services (1.1%)
  MS Financial Corp. +                                                                            1,100        12,375
  Mutual Risk Management Ltd.                                                                       300        11,063
  United Companies Financial Corp.                                                                  400        11,300
                                                                                                           ----------
                                                                                                               34,738
                                                                                                           ----------
</TABLE>

                     See Accompanying Notes to Financial Statements.
34
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                SHARES       VALUE
                                                                                               --------    ----------

<S>                                                                                            <C>         <C>
COMMON STOCK (CONT'D)
MEDIA

Communications & Media (1.1%)
  America Online, Inc. +                                                                            300    $   24,000
  Central European Media Enterprises Ltd. Class A +                                                 500        11,500
                                                                                                           ----------
                                                                                                               35,500
                                                                                                           ----------
Telecommunications (12.4%)
  Ascend Communications, Inc. +                                                                     200        13,000
  Bay Networks, Inc. +                                                                              400        26,500
  Cascade Communications Corp. +                                                                    500        35,625
  Cisco Systems, Inc. +                                                                             200        15,500
  DSP Communications, Inc. +                                                                        800        29,000
  Gilat Satellite Networks Ltd. +                                                                   800        17,800
  Paging Network, Inc. +                                                                            900        20,700
  Pairgain Technologies, Inc. +                                                                   1,000        42,750
  PictureTel Corp. +                                                                                400        26,400
  QUALCOMM, Inc.                                                                                    300        11,550
  StrataCom, Inc. +                                                                               1,100        67,650
  Tellabs, Inc. +                                                                                 1,200        40,800
  US Robotics Corp. +                                                                               600        55,500
                                                                                                           ----------
                                                                                                              402,775
                                                                                                           ----------

TOTAL COMMON STOCK (Cost $2,465,347)                                                                        2,629,788
                                                                                                           ----------
                                                                                                 PAR
                                                                                               --------
SHORT-TERM INVESTMENTS (18.8%)

  Repurchase agreement with State Street Bank and Trust Co.
  dated 10/31/95 at 5.83% to be repurchased at $610,099 on 11/01/95.
  (Collateralized by $620,000 U.S. Treasury Note at 6.875%,
  due 10/31/96, with a market value of $627,750.) (Cost $610,000)                              $610,000       610,000
                                                                                                           ----------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $3,075,347*)                                                     $3,239,788
                                                                                                           ----------
                                                                                                           ----------
</TABLE>

+ Non-income producing security.

* Also cost for Federal income tax purposes.

                     See Accompanying Notes to Financial Statements.
                                                                              35
- --------------------------------------------------------------------------------


<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<S>                                                                                                   <C>
ASSETS

     Investments at value (Cost $3,075,347)                                                           $ 3,239,788
     Receivable for Fund shares sold                                                                      125,583
     Cash                                                                                                 108,361
     Deferred organizational costs (Note 1)                                                               108,338
     Receivable for investment securities sold                                                             57,748
     Other receivables                                                                                      6,557
                                                                                                      -----------
          Total assets                                                                                  3,646,375
                                                                                                      -----------

LIABILITIES

     Payable for investment securities purchased                                                          484,782
     Organizational costs payable                                                                         110,270
     Accrued expenses                                                                                      25,894
                                                                                                      -----------
          Total liabilities                                                                               620,946
                                                                                                      -----------

NET ASSETS applicable to 282,937 Common Shares outstanding and
  119 Advisor Shares outstanding                                                                      $ 3,025,429
                                                                                                      -----------
                                                                                                      -----------

NET ASSET VALUE, offering and redemption price per Common Share
($3,024,158[div]282,937)                                                                                   $10.69
                                                                                                           ------
                                                                                                           ------

NET ASSET VALUE, offering and redemption price per Advisor Share
($1,271[div]119)                                                                                           $10.68
                                                                                                           ------
                                                                                                           ------
</TABLE>

                   See Accompanying Notes to Financial Statements.
38
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Year or Period Ended October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                             Warburg Pincus      Warburg Pincus       Warburg Pincus
                                                          Capital Appreciation   Emerging Growth   International Equity
                                                                  Fund                Fund                 Fund
                                                          --------------------   ---------------   --------------------
<S>                                                       <C>                    <C>               <C>
INVESTMENT INCOME:
     Dividends                                                $  2,107,232        $     772,834        $ 40,091,101
     Interest                                                      684,526            2,112,707           7,110,116
     Foreign taxes withheld                                         (2,423)                   0          (5,031,072)
                                                          --------------------   ---------------   --------------------
          Total investment income                                2,789,335            2,885,541          42,170,145
                                                          --------------------   ---------------   --------------------
EXPENSES:
     Investment advisory                                         1,367,729            3,824,061          20,225,631
     Administrative services                                       390,780              849,790           3,408,846
     Audit                                                          27,208               27,469              69,286
     Custodian/Sub-custodian                                        63,554              145,277           1,753,400
     Directors/Trustees                                             10,500               10,500              11,500
     Distribution/Shareholder servicing                             45,989              531,359           1,274,343
     Insurance                                                      10,104               14,770              58,340
     Legal                                                          90,851               76,677             102,549
     Organizational                                                      0                    0                   0
     Printing                                                       27,954               41,914             172,129
     Registration                                                   62,918              159,555             428,595
     Transfer agent                                                 92,488              149,133           1,538,272
     Miscellaneous                                                  35,776               37,625             380,319
                                                          --------------------   ---------------   --------------------
                                                                 2,225,851            5,868,130          29,423,210
     Less: fees waived and expenses reimbursed                           0                    0                   0
                                                          --------------------   ---------------   --------------------
          Total expenses                                         2,225,851            5,868,130          29,423,210
                                                          --------------------   ---------------   --------------------
            Net investment income (loss)                           563,484           (2,982,589)         12,746,935
                                                          --------------------   ---------------   --------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
  AND FOREIGN CURRENCY RELATED ITEMS:
     Net realized gain (loss) from security transactions        31,649,453           49,113,782         (34,444,203)
     Net realized gain (loss) from foreign currency
       related items                                                     0                    0          16,792,905
     Net change in unrealized appreciation (depreciation)
       from investments and foreign currency related items       12,386,702          84,670,426          (4,675,049)
                                                          --------------------   ---------------   --------------------
            Net realized and unrealized gain (loss) from
               investments and foreign currency related
               items                                            44,036,155          133,784,208         (22,326,347)
                                                          --------------------   ---------------   --------------------
            Net increase (decrease) in net assets
               resulting from operations                      $ 44,599,639        $ 130,801,619        $ (9,579,412)
                                                          --------------------   ---------------   --------------------
                                                          --------------------   ---------------   --------------------

</TABLE>

40
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
            Warburg Pincus    Warburg Pincus       Warburg Pincus
              Japan OTC      Emerging Markets   Post-Venture Capital
                 Fund            Fund (1)             Fund (2)
            --------------   ----------------   --------------------
            <S>              <C>                <C>
              $  221,577         $ 33,788             $      0
                 412,522           22,711                2,675
                 (33,237)          (3,250)                   0
            --------------   ----------------      -----------
                 600,862           53,249                2,675
            --------------   ----------------      -----------
                 599,720           29,641                1,756
                 138,679            5,217                  280
                  25,700           16,000                9,000
                  60,612           45,701                5,771
                  11,290           14,625                1,250
                 119,941            5,926                  351
                   2,761              855                    0
                  96,359           54,987                5,000
                  42,449           37,432                1,932
                   2,579           14,765                1,000
                 115,649           26,664                6,000
                 100,690           28,656                2,833
                  10,620            6,070                  500
            --------------   ----------------      -----------
               1,327,049          286,539               35,673
                (652,386)        (262,824)             (33,354)
            --------------   ----------------      -----------
                 674,663           23,715                2,319
            --------------   ----------------      -----------
                 (73,801)          29,534                  356
            --------------   ----------------      -----------
              (4,629,196)         102,219              (26,884)
               7,895,010           (4,992)                   0
                (195,368)          (9,058)             164,441
            --------------   ----------------      -----------
               3,070,446           88,169              137,557
            --------------   ----------------      -----------
              $2,996,645         $117,703             $137,913
            --------------   ----------------      -----------
            --------------   ----------------      -----------

(1) For the period December 30, 1994 (Commencement of Operations) through October 31, 1995.

(2) For the period September 29, 1995 (Commencement of Operations) through October 31, 1995.

</TABLE>

                       See Accompanying Notes to Financial Statements.
                                                                              41
- --------------------------------------------------------------------------------





<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
 WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                      Warburg Pincus                         Warburg Pincus
                                                   Capital Appreciation                      Emerging Growth
                                                           Fund                                   Fund
                                            -----------------------------------    -----------------------------------
                                              For the Year Ended October 31,         For the Year Ended October 31,
                                                 1995                1994               1995                1994
                                            ---------------    ----------------    ---------------    ----------------
<S>                                         <C>                <C>                 <C>                <C>
FROM OPERATIONS:
    Net investment income (loss)             $     563,484       $    384,246       $  (2,982,589)      $ (1,678,646)
    Net realized gain (loss) from
      security transactions                     31,649,453         11,173,174          49,113,782         (5,721,525)
    Net realized gain (loss) from foreign
      currency related items                             0                  0                   0                  0
    Net change in unrealized appreciation
      (depreciation) from investments and
      foreign currency related items            12,386,702         (9,106,613)         84,670,426         10,930,919
                                            ---------------    ----------------    ---------------    ----------------
        Net increase (decrease) in net
          assets resulting from
          operations                            44,599,639          2,450,807         130,801,619          3,530,748
                                            ---------------    ----------------    ---------------    ----------------
FROM DISTRIBUTIONS:
    Dividends from net investment income:
        Common Shares                             (563,484)          (419,337)                  0                  0
        Advisor Shares                                   0            (27,724)                  0                  0
    Distributions in excess of net
      investment income:
        Common Shares                                    0                  0                   0                  0
    Distributions from capital gains:
        Common Shares                          (10,419,627)       (12,899,141)                  0        (10,576,150)
        Advisor Shares                            (575,892)          (852,608)                  0         (1,639,316)
                                            ---------------    ----------------    ---------------    ----------------
        Net decrease from distributions        (11,559,003)       (14,198,810)                  0        (12,215,466)
                                            ---------------    ----------------    ---------------    ----------------
FROM CAPITAL SHARE TRANSACTIONS:
    Proceeds from sale of shares                88,963,455         45,617,531         335,569,078        180,813,270
    Reinvested dividends                        11,246,752         13,809,167                   0         12,758,387
    Net asset value of shares redeemed         (53,459,471)       (49,851,500)       (116,280,844)       (71,767,717)
                                            ---------------    ----------------    ---------------    ----------------
        Net increase in net assets from
          capital share transactions            46,750,736          9,575,198         219,288,234        121,803,940
                                            ---------------    ----------------    ---------------    ----------------
        Net increase (decrease) in net
          assets                                79,791,372         (2,172,805)        350,089,853        113,119,222
NET ASSETS:
    Beginning of period                        167,514,493        169,687,298         304,672,758        191,553,536
                                            ---------------    ----------------    ---------------    ----------------
    End of period                            $ 247,305,865       $167,514,493       $ 654,762,611       $304,672,758
                                            ---------------    ----------------    ---------------    ----------------
                                            ---------------    ----------------    ---------------    ----------------
</TABLE>

42
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                       Warburg Pincus                   Warburg Pincus         Warburg Pincus
                                                          Japan OTC                    Emerging Markets         Post-Venture
              Warburg Pincus                                Fund                             Fund               Capital Fund
           International Equity            ---------------------------------------    -------------------    -------------------
                   Fund                                          For the Period         For the Period         For the Period
    -----------------------------------                        September 30, 1994      December 30, 1994     September 29, 1995
                                               For the          (Commencement of       (Commencement of       (Commencement of
      For the Year Ended October 31,          Year Ended       Operations) through    Operations) through    Operations) through
         1995                1994          October 31, 1995     October 31, 1994       October 31, 1995       October 31, 1995
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------

   <S>                 <C>                 <C>                 <C>                    <C>                    <C>
    $   12,746,935      $    1,310,933       $    (73,801)         $     5,115            $    29,534            $       356

       (34,444,203 )        48,091,665         (4,629,196)                   0                102,219                (26,884)

        16,792,905          (2,772,944)         7,895,010             (294,437)                (4,992)                     0

        (4,675,049 )        82,484,415           (195,368)             (35,099)                (9,058)               164,441
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------

        (9,579,412 )       129,114,069          2,996,645             (324,421)               117,703                137,913
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------
       (11,671,023 )        (1,764,380)                 0                    0                (14,321)                     0
          (629,473 )          (218,961)                 0                    0                     (3)                     0

                 0            (223,659)                 0                    0                      0                      0
       (42,332,078 )        (1,047,367)                 0                    0                      0                      0
        (5,756,403 )          (129,979)                 0                    0                      0                      0
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------
       (60,388,977 )        (3,384,346)                 0                    0                (14,324)                     0
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------

     1,383,361,959       1,430,739,923        200,565,875           20,287,158              7,753,908              2,792,403
        54,872,977           2,950,772                  0                    0                 13,802                      0
      (715,598,203 )      (249,050,078)       (44,871,674)            (185,101)            (1,191,160)                (4,887)
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------

       722,636,733       1,184,640,617        155,694,201           20,102,057              6,576,550              2,787,516
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------

       652,668,344       1,310,370,340        158,690,846           19,777,636              6,679,929              2,925,429
     1,733,275,503         422,905,163         19,878,636              101,000                101,000                100,000
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------
    $2,385,943,847      $1,733,275,503       $178,569,482          $19,878,636            $ 6,780,929            $ 3,025,429
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------
    ---------------    ----------------    ----------------    -------------------    -------------------    -------------------
</TABLE>

                       See Accompanying Notes to Financial Statements.
                                                                              43
- --------------------------------------------------------------------------------


<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
 WARBURG PINCUS POST-VENTURE CAPITAL FUND
FINANCIAL HIGHLIGHTS
(For a Common Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                            For the Period
                                                                                          September 29, 1995
                                                                                           (Commencement of
                                                                                          Operations) through
                                                                                           October 31, 1995
                                                                                      ---------------------------

<S>                                                                                   <C>
NET ASSET VALUE, BEGINNING OF PERIOD                                                            $ 10.00
                                                                                                -------
     Income from Investment Operations:
     Net Investment Income                                                                          .00
     Net Gain on Securities (both realized and unrealized)                                          .69
                                                                                                -------
          Total from Investment Operations                                                          .69
                                                                                                -------
     Less Distributions:
     Dividends from Net Investment Income                                                           .00
     Distributions from Capital Gains                                                               .00
                                                                                                -------
          Total Distributions                                                                       .00
                                                                                                -------
NET ASSET VALUE, END OF PERIOD                                                                  $ 10.69
                                                                                                -------
                                                                                                -------

Total Return                                                                                       6.90%+

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                                $ 3,024

Ratios to average daily net assets:
     Operating expenses                                                                            1.65%*
     Net investment income                                                                          .25%*
     Decrease reflected in above operating expense ratio due to
      waivers/reimbursements                                                                      23.76%*

Portfolio Turnover Rate                                                                           16.90%*

* Annualized
+ Non-annualized
</TABLE>

                See Accompanying Notes to Financial Statements.

                                                                              49
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

     The  Warburg Pincus  Equity Funds are  comprised of  Warburg Pincus Capital
Appreciation  Fund   (the   'Capital   Appreciation   Fund'),   Warburg   Pincus
International  Equity Fund (the 'International  Equity Fund') and Warburg Pincus
Post-Venture Capital Fund (the 'Post-Venture Capital Fund') which are registered
under the  Investment Company  Act of  1940,  as amended  (the '1940  Act'),  as
diversified,  open-end  management  investment  companies,  and  Warburg  Pincus
Emerging Growth Fund (the 'Emerging Growth Fund'), Warburg Pincus Japan OTC Fund
(the 'Japan OTC Fund') and Warburg  Pincus Emerging Markets Fund (the  'Emerging
Markets  Fund', together with  the Capital Appreciation  Fund, the International
Equity Fund, the  Post-Venture Capital Fund,  the Emerging Growth  Fund and  the
Japan  OTC Fund, the  'Funds') which are  registered under the  1940 Act as non-
diversified, open-end management investment companies.

     Investment  objectives  for   each  Fund  are   as  follows:  the   Capital
Appreciation  Fund, the  International Equity Fund  and the Japan  OTC Fund seek
long-term capital appreciation; the Emerging  Growth Fund seeks maximum  capital
appreciation;   the  Emerging  Markets   Fund  seeks  growth   of  capital;  the
Post-Venture Capital Fund seeks long-term growth of capital.

     Each Fund offers  two classes  of shares, one  class being  referred to  as
Common  Shares and  one class  being referred to  as Advisor  Shares. Common and
Advisor Shares in each Fund represent an  equal pro rata interest in such  Fund,
except  that they  bear different expenses  which reflect the  difference in the
range of services provided to  them. Common Shares for  the Japan OTC Fund,  the
Emerging  Markets  Fund and  the Post-Venture  Capital  Fund bear  expenses paid
pursuant to a shareholder servicing and  distribution plan adopted by each  Fund
at  an annual rate  not to exceed .25%  of the average daily  net asset value of
each Fund's  outstanding  Common  Shares.  Advisor Shares  for  each  Fund  bear
expenses  paid pursuant to a distribution plan adopted by each Fund at an annual
rate not to  exceed .75% of  the average daily  net asset value  of each  Fund's
outstanding  Advisor Shares.  The Common  and the  Advisor Shares  are currently
bearing expenses of .25% and .50% of average daily net assets, respectively.

     The net asset value  of each Fund  is determined daily as  of the close  of
regular  trading on  the New  York Stock  Exchange. Each  Fund's investments are
valued at market value,  which is currently determined  using the last  reported
sales  price. If no sales are reported,  investments are generally valued at the
last reported bid price.  In the absence of  market quotations, investments  are
generally  valued at fair value  as determined by or  under the direction of the
Fund's governing Board. Short-term  investments that mature in  60 days or  less
are valued on the basis of amortized cost, which approximates market value.

     The  books  and  records  of  the Funds  are  maintained  in  U.S. dollars.
Transactions denominated  in  foreign currencies  are  recorded at  the  current
prevailing  exchange rates.  All assets  and liabilities  denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange  rate
at  the end of the period. Translation gains or losses resulting from changes in
the exchange rate during the reporting  period and realized gains and losses  on
the settlement of foreign currency transactions are

50
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
reported  in the results of operations for  the current period. The Funds do not
isolate that portion  of gains and  losses on investments  in equity  securities
which are due to changes in the foreign exchange rate from that which are due to
changes in market prices of equity securities. The Funds isolate that portion of
gains  and losses on investments in debt  securities which are due to changes in
the foreign exchange rate from that which are due to changes in market prices of
debt securities.

     Security transactions are accounted for  on trade date. Interest income  is
recorded  on the accrual basis. Dividends  are recorded on the ex-dividend date.
Income, expenses (excluding  class-specific expenses, principally  distribution,
transfer  agent and printing) and realized/unrealized gains/losses are allocated
proportionately to each class of shares based upon the relative net asset  value
of  outstanding shares. The cost of investments sold is determined by use of the
specific identification  method  for both  financial  reporting and  income  tax
purposes.

     Dividends from net investment income are declared and paid semiannually for
all Funds. Distributions of net realized capital gains, if any, are declared and
paid  annually. However, to the  extent that a net  realized capital gain can be
reduced by a capital loss carryover,  such gain will not be distributed.  Income
and  capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.

     Certain amounts  in  the Financial  Highlights  have been  reclassified  to
conform with current year presentation.

     No  provision is made for  Federal taxes as it  is each Fund's intention to
continue to qualify  for and  elect the  tax treatment  applicable to  regulated
investment  companies under  the Internal  Revenue Code  and make  the requisite
distributions to its shareholders  which will be sufficient  to relieve it  from
Federal income and excise taxes.

     Costs  incurred by the  Japan OTC Fund,  the Emerging Markets  Fund and the
Post-Venture Capital  Fund  in  connection with  their  organization  have  been
deferred  and are being amortized over a period of five years from the date each
Fund commenced its operations.

     Each Fund may enter into repurchase agreement transactions. Under the terms
of a  typical  repurchase agreement,  a  Fund acquires  an  underlying  security
subject  to  an  obligation  of  the seller  to  repurchase.  The  value  of the
underlying security collateral will be maintained at an amount at least equal to
the total amount of the purchase obligation, including interest. The  collateral
is in the Fund's possession.

2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR

     Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of
Warburg,  Pincus Counsellors  G.P. ('Counsellors  G.P.'), serves  as each Fund's
investment adviser. For its investment  advisory services, Warburg receives  the
following fees based on each Fund's average daily net assets:

                                                                              51
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
              FUND                             ANNUAL RATE
- ---------------------------------   ----------------------------------
<S>                                 <C>
Capital Appreciation                  .70% of average daily net assets
Emerging Growth                       .90% of average daily net assets
International Equity                 1.00% of average daily net assets
Japan OTC                            1.25% of average daily net assets
Emerging Markets                     1.25% of average daily net assets
Post-Venture Capital                 1.25% of average daily net assets
</TABLE>

     For  the period or  year ended October 31,  1995, investment advisory fees,
waivers and reimbursements were as follows:

<TABLE>
<CAPTION>
                                                 GROSS                         NET            EXPENSE
                   FUND                       ADVISORY FEE     WAIVER      ADVISORY FEE    REIMBURSEMENTS
- -------------------------------------------   ------------    ---------    ------------    --------------
<S>                                           <C>             <C>          <C>             <C>
Capital Appreciation                          $  1,367,729    $       0    $  1,367,729      $        0
Emerging Growth                                  3,824,061            0       3,824,061               0
International Equity                            20,225,631            0      20,225,631               0
Japan OTC                                          599,720     (599,720)              0         (25,920)
Emerging Markets                                    29,641      (29,641)              0        (230,338)
Post-Venture Capital                                 1,756       (1,756)              0         (31,458)
</TABLE>

     SPARX  Investment  &   Research,  USA,   Inc.  ('SPARX   USA')  serves   as
sub-investment adviser for the Japan OTC Fund. From its investment advisory fee,
Warburg pays SPARX USA a fee at an annual rate of .625% of the average daily net
assets  of the Japan OTC Fund. No compensation  is paid by the Japan OTC Fund to
SPARX USA for its sub-investment advisory services.

     Counsellors Funds  Service, Inc.  ('CFSI'), a  wholly owned  subsidiary  of
Warburg,  and PFPC  Inc. ('PFPC'), an  indirect, wholly owned  subsidiary of PNC
Bank  Corp.  ('PNC'),   serve  as   each  Fund's   co-administrators.  For   its
administrative  services, CFSI currently receives a  fee calculated at an annual
rate of .10% of  each Fund's average  daily net assets. For  the period or  year
ended  October 31,  1995, administrative  services fees  earned by  CFSI were as
follows:

<TABLE>
<CAPTION>
                   FUND                           CO-ADMINISTRATION FEE
- -------------------------------------------   ------------------------------
<S>                                           <C>
Capital Appreciation                                    $  195,390
Emerging Growth                                            424,895
International Equity                                     2,022,563
Japan OTC                                                   47,978
Emerging Markets                                             2,372
Post-Venture Capital                                           140
</TABLE>

     For its administrative services, PFPC  currently receives a fee  calculated
at  an  annual rate  of .10%  of the  average  daily net  assets of  the Capital
Appreciation Fund, the Emerging Growth  Fund and the Post-Venture Capital  Fund.
For  the International Equity Fund, the Japan  OTC Fund and the Emerging Markets
Fund, PFPC currently receives a fee calculated at an annual rate of .12% on each
Fund's first $250 million  in average daily  net assets, .10%  on the next  $250
million in average daily net assets, .08%

52
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
 WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
on  the next $250 million  in average daily net assets,  and .05% of the average
daily net assets over $750 million.

     For the period or year ended October 31, 1995, administrative service  fees
earned and waived by PFPC were as follows:

<TABLE>
<CAPTION>
                                                                                            NET
                  FUND                      CO-ADMINISTRATION FEE     WAIVER       CO-ADMINISTRATION FEE
- -----------------------------------------   ---------------------    --------    -------------------------
<S>                                         <C>                      <C>         <C>
Capital Appreciation                             $   195,390         $      0           $   195,390
Emerging Growth                                      424,895                0               424,895
International Equity                               1,386,283                0             1,386,283
Japan OTC                                             90,701          (26,746)               63,955
Emerging Markets                                       2,845           (2,845)                    0
Post-Venture Capital                                     140             (140)                    0
</TABLE>

     Counsellors  Securities  Inc. ('CSI'),  also a  wholly owned  subsidiary of
Warburg, serves  as each  Fund's distributor.  No compensation  is paid  by  the
Capital  Appreciation Fund, the Emerging Growth Fund or the International Equity
Fund to  CSI  for  distribution  services. For  its  shareholder  servicing  and
distribution services, CSI currently receives a fee calculated at an annual rate
of  .25% of the average daily net assets  of the Common Shares for the Japan OTC
Fund, the Emerging Markets Fund and the Post-Venture Capital Fund pursuant to  a
shareholder servicing and distribution plan adopted by each Fund. For the period
or year ended October 31, 1995, distribution fees earned by CSI were as follows:

<TABLE>
<CAPTION>
                   FUND                              DISTRIBUTION FEE
- -------------------------------------------   ------------------------------
<S>                                           <C>
Japan OTC                                                $119,941
Emerging Markets                                            5,926
Post-Venture Capital                                          351
</TABLE>

3. INVESTMENTS IN SECURITIES

     For  the period  or year  ended October  31, 1995,  purchases and  sales of
investment securities (excluding short-term investments) were as follows:

<TABLE>
<CAPTION>
                           FUND                                 PURCHASES          SALES
- -----------------------------------------------------------   --------------    ------------
<S>                                                           <C>               <C>
Capital Appreciation                                          $  299,741,274    $269,962,070
Emerging Growth                                                  532,722,466     336,581,792
International Equity                                           1,457,609,458     735,613,078
Japan OTC                                                        189,768,420      36,507,703
Emerging Markets                                                   7,181,659       1,297,140
Post-Venture Capital                                               2,714,501         222,270
</TABLE>

                                                                              53
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

     At October 31, 1995, the  net unrealized appreciation from investments  for
those  securities  having  an  excess  of value  over  cost  and  net unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for Federal income tax purposes) was as follows:

<TABLE>
<CAPTION>
                                                                             NET UNREALIZED
                                         UNREALIZED        UNREALIZED         APPRECIATION
               FUND                     APPRECIATION      DEPRECIATION       (DEPRECIATION)
- -----------------------------------     ------------      -------------      --------------
<S>                                     <C>               <C>                <C>
Capital Appreciation                    $ 45,397,319      $  (3,203,157)      $ 42,194,162
Emerging Growth                          144,909,782         (9,681,675)       135,228,107
International Equity                     260,125,513       (171,560,066)        88,565,447
Japan OTC                                  6,205,079         (7,100,852)          (895,773)
Emerging Markets                             341,944           (352,944)           (11,000)
Post-Venture Capital                         233,929            (69,488)           164,441
</TABLE>

4. FORWARD FOREIGN CURRENCY CONTRACTS

     The International Equity  Fund, the  Japan OTC Fund,  the Emerging  Markets
Fund and the Post-Venture Capital Fund may enter into forward currency contracts
for  the purchase or sale of  a specific foreign currency at  a fixed price on a
future date.  Risks  may arise  upon  entering  into these  contracts  from  the
potential  inability of counterparties to meet  the terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to  the
U.S.  dollar. The Funds will enter  into forward contracts primarily for hedging
purposes. The forward currency contracts are adjusted by the daily exchange rate
of the underlying currency  and any gains or  losses are recorded for  financial
statement purposes as unrealized until the contract settlement date.

54
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

At  October 31, 1995, the  International Equity Fund and  the Japan OTC Fund had
the following open forward foreign currency contracts:


<TABLE>
<CAPTION>
                                         INTERNATIONAL EQUITY FUND
- -----------------------------------------------------------------------------------------------------------
                                         FOREIGN                                              UNREALIZED
 FORWARD CURRENCY      EXPIRATION        CURRENCY          CONTRACT         CONTRACT       FOREIGN EXCHANGE
     CONTRACT             DATE          TO BE SOLD          AMOUNT           VALUE           GAIN (LOSS)
- -------------------    -----------    --------------     ------------     ------------     ----------------
<S>                    <C>            <C>                <C>              <C>              <C>
French Francs           11/15/95         260,000,000     $ 52,170,074     $ 53,253,590       $ (1,083,516)
French Francs           11/16/95         122,216,250       25,050,833       25,032,515             18,318
German Marks            11/16/95         110,000,000       78,272,317       78,263,963              8,354
German Marks            05/17/96          78,928,380       55,400,000       56,652,584         (1,252,584)
Japanese Yen            03/21/96       5,547,240,000       57,000,000       55,475,507          1,524,493
Japanese Yen            03/21/96       4,764,377,500       47,298,496       47,646,443           (347,947)
Japanese Yen            03/21/96       4,764,377,500       47,276,203       47,646,443           (370,240)
Japanese Yen            03/21/96       1,385,445,000       13,761,286       13,855,226            (93,940)
Japanese Yen            05/13/96       8,731,990,000      109,000,000       88,008,212         20,991,788
Japanese Yen            05/16/96       9,247,700,000      110,000,000       93,246,752         16,753,248
Japanese Yen            05/16/96       4,586,012,000       55,400,000       46,241,847          9,158,153
Japanese Yen            09/18/96       4,660,000,000       50,000,000       47,860,895          2,139,105
                                                         ------------     ------------     ----------------
                                                         $700,629,209     $653,183,977       $ 47,445,232
                                                         ------------     ------------     ----------------
                                                         ------------     ------------     ----------------
</TABLE>

<TABLE>
<CAPTION>

                                         FOREIGN
                                         CURRENCY                                             UNREALIZED
 FORWARD CURRENCY      EXPIRATION         TO BE            CONTRACT         CONTRACT       FOREIGN EXCHANGE
     CONTRACT             DATE          PURCHASED           AMOUNT           VALUE           GAIN (LOSS)
- -------------------    -----------    --------------     ------------     ------------     ----------------
<S>                    <C>            <C>                <C>              <C>              <C>

German Marks            11/16/95          34,500,000     $ 25,050,828     $ 24,546,425       $   (504,403)
                                                         ------------     ------------     ----------------
                                                         ------------     ------------     ----------------
</TABLE>

<TABLE>
<CAPTION>
                                              JAPAN OTC FUND
- -----------------------------------------------------------------------------------------------------------
                                         FOREIGN                                              UNREALIZED
 FORWARD CURRENCY      EXPIRATION        CURRENCY          CONTRACT         CONTRACT       FOREIGN EXCHANGE
     CONTRACT             DATE          TO BE SOLD          AMOUNT           VALUE           GAIN (LOSS)
- -------------------    -----------    --------------     ------------     ------------     ----------------

<S>                    <C>            <C>                <C>              <C>              <C>
Japanese Yen            11/30/95      12,567,400,000     $124,000,000     $123,536,813       $    463,187
Japanese Yen            11/30/95       2,027,000,000       20,000,000       19,925,293             74,707
Japanese Yen            11/30/95       1,520,250,000       15,000,000       14,943,969             56,031
                                                         ------------     ------------     ----------------
                                                         $159,000,000     $158,406,075       $    593,925
                                                         ------------     ------------     ----------------
                                                         ------------     ------------     ----------------
</TABLE>

                                                                              55
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

5. EQUITY SWAP TRANSACTIONS

     The International Equity Fund (the 'Fund') entered into a Taiwanese  equity
swap agreement (which represents approximately .005% of the Fund's net assets at
October  31, 1995) dated  August 11, 1995,  where the Fund  receives a quarterly
payment, representing  the  total return  (defined  as market  appreciation  and
dividend income) on a basket of three Taiwanese common stocks ('Common Stocks').
In  return, the  Fund pays  quarterly the  Libor rate  (London Interbank Offered
Rate), plus 1.25% per annum  (7.125% on October 31,  1995) on the initial  stock
purchase  amount  ('Notional amount')  of  $12,000,000. The  Notional  amount is
marked to market  on each quarterly  reset date.  In the event  that the  Common
Stocks  decline in value, the Fund will be required to pay quarterly, the amount
of any depreciation in value from the notional amount. The equity swap agreement
will terminate on August 11, 1996.

     During the term of the equity swap transaction, changes in the value of the
Common Stocks as  compared to the  Notional amount is  recognized as  unrealized
gain  or  loss.  Dividend income  for  the  Common Stocks  are  recorded  on the
ex-dividend date. Interest expense  is accrued daily. At  October 31, 1995,  the
Fund  has  recorded  an unrealized  gain  of  $502,018 and  interest  payable of
$192,375 on the equity swap transaction.

56
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
 WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

6. CAPITAL SHARE TRANSACTIONS

     The Capital Appreciation Fund is authorized to issue three billion of  full
and  fractional shares  of beneficial  interest, $.001  par value  per share, of
which one billion shares are classified as Series 2 Shares (the Advisor Shares).
The Emerging Growth Fund, the International Equity Fund, the Japan OTC Fund, the
Emerging Markets Fund and the Post-Venture  Capital Fund are each authorized  to
issue three billion full and fractional shares of capital stock, $.001 par value
per  share, of which one billion shares of  each Fund are designated as Series 2
Shares (the Advisor Shares).

     Transactions in shares of each Fund were as follows:
<TABLE>
<CAPTION>
                                       CAPITAL APPRECIATION FUND
                             Common Shares                   Advisor Shares
                     -----------------------------     ---------------------------
                                    For the Year Ended October 31,
                     -------------------------------------------------------------
                         1995             1994            1995            1994
                     ------------     ------------     -----------     -----------
<S>                  <C>              <C>              <C>             <C>
Shares sold             6,020,619        2,958,494         201,782         290,193
Shares issued to
  shareholders on
  reinvestment of
  dividends               850,478          920,210          46,554          61,526
Shares redeemed        (3,638,974)      (3,126,497)       (110,027)       (460,020)
                     ------------     ------------     -----------     -----------
Net increase
  (decrease) in
  shares outstanding    3,232,123          752,207         138,309        (108,301)
                     ------------     ------------     -----------     -----------
                     ------------     ------------     -----------     -----------
Proceeds from sale
  of shares          $ 85,992,655     $ 41,570,590     $ 2,970,800     $ 4,046,941
Reinvested dividends   10,670,876       12,945,690         575,876         863,477
Net asset value of
  shares redeemed     (51,907,650)     (43,449,501)     (1,551,821)     (6,401,999)
                     ------------     ------------     -----------     -----------
Net increase
  (decrease) from
  capital share
  transactions       $ 44,755,881     $ 11,066,779     $ 1,994,855     $(1,491,581)
                     ------------     ------------     -----------     -----------
                     ------------     ------------     -----------     -----------

<CAPTION>
                                            EMERGING GROWTH FUND
                               Common Shares                    Advisor Shares
                       -----------------------------     ----------------------------
                                       For the Year Ended October 31,
                       --------------------------------------------------------------
                           1995             1994            1995             1994
                       ------------     ------------     -----------     ------------
<S>                    <C>             <C>              <C>             <C>
Shares sold               9,808,362        6,133,751       3,172,686        2,233,737
Shares issued to
  shareholders on
  reinvestment of
  dividends                       0          506,720               0           80,473
Shares redeemed          (4,294,179)      (2,859,413)       (383,922)        (517,898)
                       ------------     ------------     -----------     ------------
Net increase
  (decrease) in
  shares outstanding      5,514,183        3,781,058       2,788,764        1,796,312
                       ------------     ------------     -----------     ------------
                       ------------     ------------     -----------     ------------
Proceeds from sale
  of shares            $256,886,928     $132,922,995     $78,682,150     $ 47,890,275
Reinvested dividends              0       11,015,146               0        1,743,241
Net asset value of
  shares redeemed      (106,777,032)     (61,126,667)     (9,503,812)     (10,641,050)
                       ------------     ------------     -----------     ------------
Net increase
  (decrease) from
  capital share
  transactions         $150,109,896     $ 82,811,474     $69,178,338     $ 38,992,466
                       ------------     ------------     -----------     ------------
                       ------------     ------------     -----------     ------------
</TABLE>

                                                                              57
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
 WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

6. CAPITAL SHARE TRANSACTIONS (CONTINUED)

<TABLE>
<CAPTION>
                                               INTERNATIONAL EQUITY FUND                             EMERGING MARKETS FUND
                                                                                                Common Shares     Advisor Shares
                                     Common Shares                     Advisor Shares           -------------     --------------
                            --------------------------------    ----------------------------            For the Period
                                             For the Year Ended October 31,                            December 30, 1994
                            ----------------------------------------------------------------     (Commencement of Operations)
                                 1995              1994             1995            1994           through October 31, 1995
                            --------------    --------------    ------------    ------------    -------------------------------

<S>                         <C>               <C>               <C>             <C>             <C>              <C>
Shares sold                     68,096,606        64,218,907       7,225,150       7,956,088         694,008            22
Shares issued to
  shareholders on
  reinvestment of
  dividends                      2,623,005           147,031         346,377           6,879           1,267             0
Shares redeemed                (38,317,625)      (11,861,720)       (770,753)       (795,406)       (104,480)            0
                            --------------    --------------    ------------    ------------    -------------        -----
Net increase (decrease)
  in shares outstanding         32,401,986        52,504,218       6,800,774       7,167,561         590,795            22
                            --------------    --------------    ------------    ------------    -------------        -----
                            --------------    --------------    ------------    ------------    -------------        -----
Proceeds from sale of
  shares                    $1,251,776,887    $1,275,306,263    $131,585,072    $155,433,660     $ 7,753,651          $257
Reinvested dividends            48,487,109         2,820,903       6,385,868         129,869          13,802             0
Net asset value of shares
  redeemed                    (701,310,424)     (233,614,600)    (14,287,779)    (15,435,478)     (1,191,160)            0
                            --------------    --------------    ------------    ------------    -------------        -----
Net increase (decrease)
  from capital share
  transactions              $  598,953,572    $1,044,512,566    $123,683,161    $140,128,051     $ 6,576,293          $257
                            --------------    --------------    ------------    ------------    -------------        -----
                            --------------    --------------    ------------    ------------    -------------        -----
</TABLE>

7. NET ASSETS

     Net Assets at October 31, 1995, consisted of the following:

<TABLE>
<CAPTION>
                                                                          CAPITAL           EMERGING
                                                                     APPRECIATION FUND    GROWTH FUND
                                                                     -----------------    ------------

<S>                                                                  <C>                  <C>
Capital contributed, net                                               $ 173,327,827      $479,035,241
Accumulated net investment income (loss)                                           0                0
Accumulated net realized gain (loss) from security transactions           31,648,355       40,302,640
Net unrealized appreciation (depreciation) from investments and
  foreign currency related items                                          42,329,683      135,424,730
                                                                     -----------------    ------------
Net assets                                                             $ 247,305,865      $654,762,611
                                                                     -----------------    ------------
                                                                     -----------------    ------------
</TABLE>

58
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                            JAPAN OTC FUND
                        Common Shares                            Advisor Shares
            -------------------------------------     -------------------------------------
                                  For the Period                            For the Period         POST-VENTURE CAPITAL FUND
                                  September 30,                             September 30,                         Advisor Shares
                                       1994                                      1994                             --------------
                                  (Commencement                             (Commencement
                                                                                                Common Shares
                                                                                                -------------
                                                                                                         For the Period
                For the           of Operations)          For the           of Operations)             September 29, 1995
               Year Ended            through             Year Ended            through            (Commencement of Operations)
            October 31, 1995     October 31, 1994     October 31, 1995     October 31, 1994         through October 31, 1995
            ----------------     ----------------     ----------------     ----------------     --------------------------------

            <S>                  <C>                  <C>                  <C>                  <C>               <C>
                22,809,795            2,025,697               0                    15                273,510             19
                         0                    0               0                     0                      0              0
                (5,180,432)             (18,605)              0                     0                   (473)             0
            ----------------     ----------------            ---                -----           -------------         -----
                17,629,363            2,007,092               0                    15                273,037             19
            ----------------     ----------------            ---                -----           -------------         -----
            ----------------     ----------------            ---                -----           -------------         -----
              $200,565,875         $ 20,287,008              $0                  $150            $ 2,792,203           $200
                         0                    0               0                     0                      0              0
               (44,871,674)            (185,101)              0                     0                 (4,887)             0
            ----------------     ----------------            ---                -----           -------------         -----
              $155,694,201         $ 20,101,907              $0                  $150            $ 2,787,316           $200
            ----------------     ----------------            ---                -----           -------------         -----
            ----------------     ----------------            ---                -----           -------------         -----
</TABLE>

<TABLE>
<CAPTION>
         INTERNATIONAL        EMERGING                          POST-VENTURE
          EQUITY FUND       MARKETS FUND     JAPAN OTC FUND     CAPITAL FUND
         --------------     ------------     --------------     ------------

         <S>                <C>              <C>                <C>
         $2,271,007,433      $6,677,550       $175,619,527       $2,887,516
             19,124,669          10,218          7,821,209              356
            (40,671,086)        102,219         (4,640,787)         (26,884)
            136,482,831          (9,058)          (230,467)         164,441
         --------------     ------------     --------------     ------------
         $2,385,943,847      $6,780,929       $178,569,482       $3,025,429
         --------------     ------------     --------------     ------------
         --------------     ------------     --------------     ------------
</TABLE>

                                                                              59
- --------------------------------------------------------------------------------



<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

8. CAPITAL LOSS CARRYOVER

     At  October 31, 1995, the International Equity Fund, the Japan OTC Fund and
the Post-Venture  Capital  Fund  had capital  loss  carryovers  of  $40,671,086,
$4,629,196 and $26,884, respectively, expiring in 2003 to offset possible future
capital gains of each Fund.

9. OTHER FINANCIAL HIGHLIGHTS

     Each  Fund  currently offers  one other  class  of shares,  Advisor Shares,
representing equal prorata interests  in each of  the respective Warburg  Pincus
Equity  Funds. The financial highlights for an Advisor Share of each Fund are as
follows:
<TABLE>
<CAPTION>
                                                                              Capital Appreciation Fund
                                                           ----------------------------------------------------------------
                                                                                    Advisor Shares
                                                           ----------------------------------------------------------------
                                                                                                            April 4, 1991
                                                                                                               (Initial
                                                                 For the Year Ended October 31,               Issuance)
                                                           ------------------------------------------          through
                                                            1995        1994        1993        1992       October 31, 1991
                                                           ------      ------      ------      ------      ----------------
<S>                                                        <C>         <C>         <C>         <C>         <C>
NET ASSET VALUE, BEGINNING OF PERIOD                       $14.22      $15.28      $13.28      $12.16           $12.04
                                                           ------      ------      ------      ------          -------
     Income from Investment Operations:
     Net Investment Income (Loss)                             .00        (.08)        .00        (.01)             .05
     Net Gain on Securities (both realized and
       unrealized)                                           3.02         .23        2.76        1.20              .13
                                                           ------      ------      ------      ------          -------
          Total from Investment Operations                   3.02         .15        2.76        1.19              .18
                                                           ------      ------      ------      ------          -------
     Less Distributions:
     Dividends from Net Investment Income                     .00        (.02)        .00        (.02)            (.06)
     Distributions from Capital Gains                        (.98)      (1.19)       (.76)       (.05)             .00
                                                           ------      ------      ------      ------          -------
          Total Distributions                                (.98)      (1.21)       (.76)       (.07)            (.06)
                                                           ------      ------      ------      ------          -------
NET ASSET VALUE, END OF PERIOD                             $16.26      $14.22      $15.28      $13.28           $12.16
                                                           ------      ------      ------      ------          -------
                                                           ------      ------      ------      ------          -------

Total Return                                                23.41%       1.23%      21.64%       9.83%            2.66%*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                           $11,594     $8,169     $10,437      $1,655             $443

Ratios to average daily net assets:
     Operating expenses                                      1.62%       1.55%       1.51%       1.56%            1.63%*
     Net investment income (loss)                            (.18%)      (.24%)      (.25%)      (.11%)            .25%*
     Decrease reflected in above operating expense
       ratios due to waivers/reimbursements                   .00%        .01%        .00%        .01%             .01%*

Portfolio Turnover Rate                                    146.09%      51.87%      48.26%      55.83%           39.50%

* Annualized
</TABLE>

60
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

TAX STATUS OF 1995 DIVIDENDS (Unaudited)

Taxable dividends paid by the Fund on per share basis were as follows:

<TABLE>
<S>                                                         <C>
Ordinary income                                             $.02
Long-term capital gain                                       .96
</TABLE>

Ordinary income  dividends  qualifying  for  the  dividends  received  deduction
available to corporate shareholders was 100.00%.

Because  the Fund's fiscal year is not the  calendar year, amounts to be used by
calendar year  taxpayers on  their  Federal return  will  be reflected  on  Form
1099-DIV and will be mailed in January 1996.

                                                                              61
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                              Emerging Growth Fund
                                                            --------------------------------------------------------
                                                                                 Advisor Shares
                                                            --------------------------------------------------------
                                                                                                     April 4, 1991
                                                                                                        (Initial
                                                               For the Year Ended October 31,          Issuance)
                                                            ------------------------------------        through
                                                             1995      1994      1993      1992     October 31, 1991
                                                            ------    ------    ------    ------    ----------------
<S>                                                         <C>       <C>       <C>       <C>       <C>
NET ASSET VALUE, BEGINNING OF PERIOD                        $22.05    $23.51    $18.19    $16.99         $15.18
                                                            ------    ------    ------    ------        -------
     Income from Investment Operations:
     Net Investment Loss                                      (.09)     (.08)     (.08)     (.06)           .00
     Net Gain (Loss) on Securities (both
       realized and unrealized)                               7.42      (.02)     5.77      1.62           1.82
                                                            ------    ------    ------    ------        -------
          Total from Investment Operations                    7.33      (.10)     5.69      1.56           1.82
                                                            ------    ------    ------    ------        -------
     Less Distributions:
     Dividends from Net Investment Income                      .00       .00       .00       .00           (.01)
     Distributions from Capital Gains                          .00     (1.36)     (.37)     (.36)           .00
                                                            ------    ------    ------    ------        -------
          Total Distributions                                  .00     (1.36)     (.37)     (.36)          (.01)
                                                            ------    ------    ------    ------        -------
NET ASSET VALUE, END OF PERIOD                              $29.38    $22.05    $23.51    $18.19         $16.99
                                                            ------    ------    ------    ------        -------
                                                            ------    ------    ------    ------        -------

Total Return                                                 33.24%     (.29%)   31.67%     9.02%         23.43%*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                          $167,225   $64,009   $26,029    $5,398           $275

Ratios to average daily net assets:
     Operating expenses                                       1.76%     1.72%     1.73%     1.74%          1.74%*
     Net investment loss                                     (1.08%)   (1.08%)   (1.09%)    (.87%)         (.49%)*
     Decrease reflected in above operating expense ratios
       due to waivers/reimbursements                           .00%      .04%      .00%      .06%           .42%*

Portfolio Turnover Rate                                      84.82%    60.38%    68.35%    63.38%         97.69%

* Annualized
</TABLE>

62
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                     International Equity Fund
                                                                      --------------------------------------------------------
                                                                                           Advisor Shares
                                                                      --------------------------------------------------------
                                                                                                               April 4, 1991
                                                                                                                  (Initial
                                                                         For the Year Ended October 31,          Issuance)
                                                                      ------------------------------------        through
                                                                       1995      1994      1993      1992     October 31, 1991
                                                                      ------    ------    ------    ------    ----------------
<S>                                                                   <C>       <C>       <C>       <C>       <C>
NET ASSET VALUE, BEGINNING OF PERIOD                                  $20.38    $16.91    $12.20    $13.66         $13.14
                                                                      ------    ------    ------    ------        -------
     Income from Investment Operations:
     Net Investment Income (Loss)                                        .03       .16      (.01)      .13            .00
     Net Gain (Loss) on Securities and
       Foreign Currency Related Items
       (both realized and unrealized)                                   (.67)     3.35      4.86     (1.32)           .58
                                                                      ------    ------    ------    ------        -------
          Total from Investment Operations                              (.64)     3.51      4.85     (1.19)           .58
                                                                      ------    ------    ------    ------        -------
     Less Distributions:
     Dividends from Net Investment Income                               (.05)      .00      (.01)     (.12)          (.06)
     Distributions from Capital Gains                                   (.53)     (.04)     (.13)     (.15)           .00
                                                                      ------    ------    ------    ------        -------
          Total Distributions                                           (.58)     (.04)     (.14)     (.27)          (.06)
                                                                      ------    ------    ------    ------        -------
NET ASSET VALUE, END OF PERIOD                                        $19.16    $20.38    $16.91    $12.20         $13.66
                                                                      ------    ------    ------    ------        -------
                                                                      ------    ------    ------    ------        -------

Total Return                                                           (3.04%)   20.77%    40.06%    (8.86%)         7.85%*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                    $317,736  $199,404   $44,244    $1,472           $153

Ratios to average daily net assets:
     Operating expenses                                                 1.89%     1.94%     2.00%     2.00%          2.23%*
     Net investment income (loss)                                        .20%     (.29%)    (.36%)     .54%           .30%*
     Decrease reflected in above operating expense ratios due to
       waivers/reimbursements                                            .00%      .00%      .00%      .07%           .17%*

Portfolio Turnover Rate                                                39.24%    17.02%    22.60%    53.29%         54.95%

* Annualized
</TABLE>

TAX STATUS OF 1995 DIVIDENDS (Unaudited)

Taxable dividends paid by the Fund on per share basis were as follows:

<TABLE>
<S>                                                         <C>
Ordinary income                                             $.38
Long-term capital gain                                       .20
</TABLE>

Because  the Fund's fiscal year is not the  calendar year, amounts to be used by
calendar year  taxpayers on  their  Federal return  will  be reflected  on  Form
1099-DIV and will be mailed in January 1996.

                                                                              63
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                         Japan OTC Fund
                                                                            ----------------------------------------
                                                                                         Advisor Shares
                                                                            ----------------------------------------
                                                                                                   For the Period
                                                                                                 September 30, 1994
                                                                                For the           (Commencement of
                                                                               Year Ended        Operations) through
                                                                            October 31, 1995      October 31, 1994
                                                                            ----------------     -------------------
<S>                                                                         <C>                  <C>
NET ASSET VALUE, BEGINNING OF PERIOD                                              $9.85                 $10.00
                                                                                 ------                -------
     Income from Investment Operations:
     Net Investment Income (Loss)                                                  (.02)                   .00
     Net Loss on Securities and Foreign Currency Related Items (both
       realized and unrealized)                                                    (.75)                  (.15)
                                                                                 ------                -------
          Total from Investment Operations                                         (.77)                  (.15)
                                                                                 ------                -------
     Less Distributions:
     Dividends from Net Investment Income                                           .00                    .00
     Distributions from Capital Gains                                               .00                    .00
                                                                                 ------                -------
          Total Distributions                                                       .00                    .00
                                                                                 ------                -------
NET ASSET VALUE, END OF PERIOD                                                   $ 9.08                $  9.85
                                                                                 ------                -------
                                                                                 ------                -------

Total Return                                                                      (7.82%)               (15.84%)*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                     $1                     $1

Ratios to average daily net assets:
     Operating expenses                                                            1.31%                  1.18%*
     Net investment income (loss)                                                  (.19%)                  .12%*
     Decrease reflected in above operating expense ratios due to
       waivers/reimbursements                                                      1.83%                  4.74%*

Portfolio Turnover Rate                                                           82.98%                   .00%

* Annualized
</TABLE>

64
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                        Emerging Markets Fund
                                                                                                        ---------------------
                                                                                                           Advisor Shares
                                                                                                        ---------------------
                                                                                                          December 30, 1994
                                                                                                          (Commencement of
                                                                                                         Operations) through
                                                                                                          October 31, 1995
                                                                                                        ---------------------
<S>                                                                                                     <C>
NET ASSET VALUE, BEGINNING OF PERIOD                                                                           $ 10.00
                                                                                                               -------
     Income from Investment Operations:
     Net Investment Income                                                                                         .14
     Net Gain on Securities and Foreign Currency Related Items (both realized and unrealized)                     1.19
                                                                                                               -------
          Total from Investment Operations                                                                        1.33
                                                                                                               -------
     Less Distributions:
     Dividends from Net Investment Income                                                                         (.03)
     Distributions from Capital Gains                                                                              .00
                                                                                                               -------
          Total Distributions                                                                                     (.03)
                                                                                                               -------
NET ASSET VALUE, END OF PERIOD                                                                                 $ 11.30
                                                                                                               -------
                                                                                                               -------

Total Return                                                                                                     16.05%*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                                                    $1

Ratios to average daily net assets:
     Operating expenses                                                                                           1.22%*
     Net investment income                                                                                        1.76%*
     Decrease reflected in above operating expense ratio due to
       waivers/reimbursements                                                                                    16.36%*

Portfolio Turnover Rate                                                                                          69.12%*

* Annualized
</TABLE>

TAX STATUS OF 1995 DIVIDENDS (Unaudited)

Taxable dividends paid by the Fund on per share basis were as follows:

<TABLE>
<S>                                                         <C>
Ordinary income                                             $.03
</TABLE>

Because  the Fund's fiscal year is not the  calendar year, amounts to be used by
calendar year  taxpayers on  their  Federal return  will  be reflected  on  Form
1099-DIV and will be mailed in January 1996.

                                                                              65
- --------------------------------------------------------------------------------

<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                          Post-Venture Capital Fund
                                                                                          -------------------------
                                                                                               Advisor Shares
                                                                                          -------------------------
                                                                                               For the Period
                                                                                             September 29, 1995
                                                                                              (Commencement of
                                                                                             Operations) through
                                                                                              October 31, 1995
                                                                                          -------------------------
<S>                                                                                       <C>
NET ASSET VALUE, BEGINNING OF PERIOD                                                               $ 10.00
                                                                                                   -------
     Income from Investment Operations:
     Net Investment Income                                                                             .00
     Net Gain on Securities                                                                            .68
                                                                                                   -------
          Total from Investment Operations                                                             .68
                                                                                                   -------
     Less Distributions:
     Dividends from Net Investment Income                                                              .00
     Distributions from Capital Gains                                                                  .00
                                                                                                   -------
          Total Distributions                                                                          .00
                                                                                                   -------
NET ASSET VALUE, END OF PERIOD                                                                     $ 10.68
                                                                                                   -------
                                                                                                   -------

Total Return                                                                                          6.80%+

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                                        $1

Ratios to average daily net assets:
     Operating expenses                                                                               2.15%*
     Net investment income                                                                             .09%*
     Decrease reflected in above operating expense ratio due to
       waivers/reimbursements                                                                         9.25%*

Portfolio Turnover Rate                                                                              16.90%*

* Annualized

+ Non annualized
</TABLE>

66
- --------------------------------------------------------------------------------






<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND -- ADVISOR SHARES
- --------------------------------------------------------------------------------

                                                                December 8, 1995

Dear Shareholder:

     The objective in Advisor Shares of Warburg Pincus Post-Venture Capital Fund
(the  'Fund') is long-term growth of capital.  The Fund pursues its objective by
investing primarily in  equity securities  of companies  deemed to  be in  their
post-venture-capital stage.

     From  the Fund's inception on September 29, 1995, through October 31, 1995,
it gained 6.80%*. Its total net assets were $3,025,429.

     We are quite optimistic about the Fund's prospects. A major study assessing
the impact of venture-capital financing  on firms' performance** concluded  that
venture-backed companies generate superior results relative to those that lacked
such  backing. According  to the  study, venture-backed  firms create innovative
products and services. Relative to Fortune 500 companies, they create jobs at  a
faster   pace,   spend   more   on   research   and   development,   and  create
sales --  especially export  sales --  at a  faster rate.  Our own  considerable
experience   researching  and  evaluating   the  performance  of  venture-backed
companies yields similarly favorable conclusions.

     We believe that  the Fund's  focus on such  companies offers  a unique  and
attractive opportunity to aggressive investors.

<TABLE>
<S>                                      <C>
Elizabeth B. Dater                       Stephen J. Lurito
Co-Portfolio Manager                     Co-Portfolio Manager
</TABLE>

 * Non-annualized  return. This figure represents  past performance and does not
   guarantee future  results.  Investment  return  and  principal  value  of  an
   investment will fluctuate so that an investor's shares upon redemption may be
   worth more or less than original cost.

** Fifth  Annual  Economic Impact  of  Venture Capital  Study,  National Venture
   Capital Association/Coopers & Lybrand L.L.P. (U.S.A.), 1995.

12

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS
October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                SHARES       VALUE
                                                                                               --------    ----------
<S>                                                                                            <C>         <C>
COMMON STOCK (81.2%)

CAPITAL GOODS

Computers (26.7%)
  Applix, Inc. +                                                                                  2,400    $   66,600
  Atria Software, Inc. +                                                                            400        14,300
  Auspex Systems, Inc. +                                                                          1,100        15,537
  Boca Research, Inc. +                                                                           1,100        27,775
  Brock Control Systems, Inc. +                                                                   5,000        39,375
  Cheyenne Software, Inc. +                                                                       1,500        31,125
  Continuum, Inc. +                                                                                 800        31,500
  FileNet Corp. +                                                                                 1,300        58,987
  Hyperion Software Corp. +                                                                       1,300        64,025
  Logic Works, Inc. +                                                                             3,000        45,750
  Macromedia, Inc. +                                                                                500        18,500
  Manugistics Group, Inc. +                                                                       3,400        58,650
  McAfee Associates, Inc. +                                                                       1,200        69,900
  Network General Corp. +                                                                         1,300        53,950
  Parametric Technology Corp. +                                                                     500        33,437
  Softkey International, Inc. +                                                                   2,200        69,300
  Synopsys, Inc. +                                                                                  800        30,000
  System Software Associates, Inc.                                                                2,000        61,750
  Verity, Inc. +                                                                                  2,000        73,500
                                                                                                           ----------
                                                                                                              863,961
                                                                                                           ----------
Electronics (5.5%)
  Asyst Technologies, Inc. +                                                                      1,300        54,600
  Maxim Integrated Products, Inc. +                                                                 400        29,900
  Watkins Johnson Co.                                                                             1,100        52,938
  Xilinx, Inc. +                                                                                    900        41,400
                                                                                                           ----------
                                                                                                              178,838
                                                                                                           ----------
Office Equipment & Supplies (1.1%)
  Viking Office Products, Inc. +                                                                    800        35,600
                                                                                                           ----------

CONSUMER

Business Services (4.9%)
  Norrell Corp.                                                                                     600        18,525
  On Assignment, Inc. +                                                                           1,100        29,700
  PMT Services, Inc. +                                                                            1,200        32,250
  QuickResponse Services, Inc. +                                                                  1,200        30,000
  Solectron Corp. +                                                                               1,200        48,300
                                                                                                           ----------
                                                                                                              158,775
                                                                                                           ----------
Consumer Services (0.5%)
  DEVRY, Inc. +                                                                                     700        15,575
                                                                                                           ----------
</TABLE>

                         See Accompanying Notes to Financial Statements.
                                                                              33
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                SHARES       VALUE
                                                                                               --------    ----------

COMMON STOCK (CONT'D)
<S>                                                                                            <C>         <C>
Healthcare (16.9%)
  American Oncology Resources, Inc. +                                                               600    $   21,000
  Arbor Health Care Co. +                                                                         2,200        37,400
  EMcare Holdings, Inc. +                                                                         2,700        62,100
  Endosonics Corp. +                                                                              2,000        31,750
  Enterprise Systems, Inc. +                                                                      3,500        81,813
  Health Care & Retirement Corp. +                                                                  200         5,875
  Health Managment System, Inc. +                                                                 1,600        51,200
  Healthsource, Inc. +                                                                            1,300        68,900
  Oxford Health Plans, Inc. +                                                                       800        62,600
  ThermoTrex Corp. +                                                                                600        21,525
  Total Renal Care Holdings, Inc. +                                                               5,000       101,875
                                                                                                           ----------
                                                                                                              546,038
                                                                                                           ----------
Leisure & Entertainment (1.1%)
  Regal Cinemas, Inc. +                                                                             900        35,325
                                                                                                           ----------

Lodging & Restaurants (0.4%)
  Doubletree Corp. +                                                                                600        13,200
                                                                                                           ----------

Pharmaceuticals (4.2%)
  Cephalon, Inc. +                                                                                  900        27,000
  DepoTech Corp. +                                                                                2,000        29,000
  Genzyme Corp. +                                                                                   800        46,600
  Genzyme Corp. -- Tissue Repair Division +                                                       1,900        33,963
                                                                                                           ----------
                                                                                                              136,563
                                                                                                           ----------
Retail (4.4%)
  Borders Group, Inc. +                                                                           1,500        25,688
  Micro Warehouse, Inc. +                                                                           600        26,700
  Neostar Retail Group, Inc. +                                                                    1,900        28,975
  Office Depot, Inc. +                                                                            1,100        31,487
  PETsMART, Inc. +                                                                                  900        30,150
                                                                                                           ----------
                                                                                                              143,000
                                                                                                           ----------
ENERGY AND RELATED

Oil Services (0.9%)
  Input/Output, Inc. +                                                                              800        29,900
                                                                                                           ----------

FINANCE

Financial Services (1.1%)
  MS Financial Corp. +                                                                            1,100        12,375
  Mutual Risk Management Ltd.                                                                       300        11,063
  United Companies Financial Corp.                                                                  400        11,300
                                                                                                           ----------
                                                                                                               34,738
                                                                                                           ----------
</TABLE>

                        See Accompanying Notes to Financial Statements.
34
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
SCHEDULE OF INVESTMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                SHARES       VALUE
                                                                                               --------    ----------

COMMON STOCK (CONT'D)
<S>                                                                                            <C>         <C>
MEDIA

Communications & Media (1.1%)
  America Online, Inc. +                                                                            300    $   24,000
  Central European Media Enterprises Ltd. Class A +                                                 500        11,500
                                                                                                           ----------
                                                                                                               35,500
                                                                                                           ----------
Telecommunications (12.4%)
  Ascend Communications, Inc. +                                                                     200        13,000
  Bay Networks, Inc. +                                                                              400        26,500
  Cascade Communications Corp. +                                                                    500        35,625
  Cisco Systems, Inc. +                                                                             200        15,500
  DSP Communications, Inc. +                                                                        800        29,000
  Gilat Satellite Networks Ltd. +                                                                   800        17,800
  Paging Network, Inc. +                                                                            900        20,700
  Pairgain Technologies, Inc. +                                                                   1,000        42,750
  PictureTel Corp. +                                                                                400        26,400
  QUALCOMM, Inc.                                                                                    300        11,550
  StrataCom, Inc. +                                                                               1,100        67,650
  Tellabs, Inc. +                                                                                 1,200        40,800
  US Robotics Corp. +                                                                               600        55,500
                                                                                                           ----------
                                                                                                              402,775
                                                                                                           ----------

TOTAL COMMON STOCK (Cost $2,465,347)                                                                        2,629,788
                                                                                                           ----------
</TABLE>

<TABLE>
<CAPTION>
                                                                                                 PAR
                                                                                               --------
<S>                                                                                            <C>         <C>
SHORT-TERM INVESTMENTS (18.8%)

  Repurchase agreement with State Street Bank and Trust Co.
  dated 10/31/95 at 5.83% to be repurchased at $610,099 on 11/01/95.
  (Collateralized by $620,000 U.S. Treasury Note at 6.875%,
  due 10/31/96, with a market value of $627,750.) (Cost $610,000)                              $610,000       610,000
                                                                                                           ----------
TOTAL INVESTMENTS AT VALUE (100.0%) (Cost $3,075,347*)                                                     $3,239,788
                                                                                                           ----------
                                                                                                           ----------
</TABLE>

+ Non-income producing security.

* Also cost for Federal income tax purposes.

                     See Accompanying Notes to Financial Statements.
                                                                              35
- --------------------------------------------------------------------------------


- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<S>                                                                                                   <C>
ASSETS

     Investments at value (Cost $3,075,347)                                                           $ 3,239,788
     Receivable for Fund shares sold                                                                      125,583
     Cash                                                                                                 108,361
     Deferred organizational costs (Note 1)                                                               108,338
     Receivable for investment securities sold                                                             57,748
     Other receivables                                                                                      6,557
                                                                                                      -----------
          Total assets                                                                                  3,646,375
                                                                                                      -----------

LIABILITIES

     Payable for investment securities purchased                                                          484,782
     Organizational costs payable                                                                         110,270
     Accrued expenses                                                                                      25,894
                                                                                                      -----------
          Total liabilities                                                                               620,946
                                                                                                      -----------

NET ASSETS applicable to 282,937 Common Shares outstanding and
  119 Advisor Shares outstanding                                                                      $ 3,025,429
                                                                                                      -----------
                                                                                                      -----------

NET ASSET VALUE, offering and redemption price per Common Share
($3,024,158[div]282,937)                                                                                   $10.69
                                                                                                           ------
                                                                                                           ------


NET ASSET VALUE, offering and redemption price per Advisor Share
($1,271[div]119)                                                                                           $10.68
                                                                                                           ------
                                                                                                           ------
</TABLE>

                 See Accompanying Notes to Financial Statements.
38

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF OPERATIONS
For the Year or Period Ended October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                             Warburg Pincus      Warburg Pincus       Warburg Pincus
                                                          Capital Appreciation   Emerging Growth   International Equity
                                                                  Fund                Fund                 Fund
                                                          --------------------   ---------------   --------------------
<S>                                                       <C>                    <C>               <C>
INVESTMENT INCOME:
     Dividends                                                $  2,107,232        $     772,834        $ 40,091,101
     Interest                                                      684,526            2,112,707           7,110,116
     Foreign taxes withheld                                         (2,423)                   0          (5,031,072)
                                                          --------------------   ---------------   --------------------
          Total investment income                                2,789,335            2,885,541          42,170,145
                                                          --------------------   ---------------   --------------------
EXPENSES:
     Investment advisory                                         1,367,729            3,824,061          20,225,631
     Administrative services                                       390,780              849,790           3,408,846
     Audit                                                          27,208               27,469              69,286
     Custodian/Sub-custodian                                        63,554              145,277           1,753,400
     Directors/Trustees                                             10,500               10,500              11,500
     Distribution/Shareholder servicing                             45,989              531,389           1,274,343
     Insurance                                                      10,104               14,770              58,340
     Legal                                                          90,851               76,677             102,549
     Organizational                                                      0                    0                   0
     Printing                                                       27,954               41,914             172,129
     Registration                                                   62,918              159,555             428,595
     Transfer agent                                                 92,488              149,133           1,538,272
     Miscellaneous                                                  35,776               37,625             380,319
                                                          --------------------   ---------------   --------------------
                                                                 2,225,851            5,868,130          29,423,210
     Less: fees waived and expenses reimbursed                           0                    0                   0
                                                          --------------------   ---------------   --------------------
          Total expenses                                         2,225,851            5,868,130          29,423,210
                                                          --------------------   ---------------   --------------------
            Net investment income (loss)                           563,484           (2,982,589)         12,746,935
                                                          --------------------   ---------------   --------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
  AND FOREIGN CURRENCY RELATED ITEMS:
     Net realized gain (loss) from security transactions        31,649,453           49,113,782         (34,444,203)
     Net realized gain (loss) from foreign currency
       related items                                                     0                    0          16,792,905
     Net change in unrealized appreciation (depreciation)
       from investments and foreign currency related items       12,386,702          84,670,426          (4,675,049)
                                                          --------------------   ---------------   --------------------
            Net realized and unrealized gain (loss) from
               investments and foreign currency related
               items                                            44,036,155          133,784,208         (22,326,347)
                                                          --------------------   ---------------   --------------------
            Net increase (decrease) in net assets
               resulting from operations                      $ 44,599,639        $ 130,801,619        $ (9,579,412)
                                                          --------------------   ---------------   --------------------
                                                          --------------------   ---------------   --------------------

</TABLE>

40
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
            Warburg Pincus    Warburg Pincus       Warburg Pincus
              Japan OTC      Emerging Markets   Post-Venture Capital
                 Fund            Fund (1)             Fund (2)
            --------------   ----------------   --------------------
<S>         <C>              <C>                <C>
              $  221,577         $ 33,788             $      0
                 412,522           22,711                2,675
                 (33,237)          (3,250)                   0
            --------------   ----------------      -----------
                 600,862           53,249                2,675
            --------------   ----------------      -----------
                 599,720           29,641                1,756
                 138,679            5,217                  280
                  25,700           16,000                9,000
                  60,612           45,701                5,771
                  11,290           14,625                1,250
                 119,941            5,926                  351
                   2,761              855                    0
                  96,359           54,987                5,000
                  42,449           37,432                1,932
                   2,579           14,765                1,000
                 115,649           26,664                6,000
                 100,690           28,656                2,833
                  10,620            6,070                  500
            --------------   ----------------      -----------
               1,327,049          286,539               35,673
                (652,386)        (262,824)             (33,354)
            --------------   ----------------      -----------
                 674,663           23,715                2,319
            --------------   ----------------      -----------
                 (73,801)          29,534                  356
            --------------   ----------------      -----------
              (4,629,196)         102,219              (26,884)
               7,895,010           (4,992)                   0
                (195,368)          (9,058)             164,441
            --------------   ----------------      -----------
               3,070,446           88,169              137,557
            --------------   ----------------      -----------
              $2,996,645         $117,703             $137,913
            --------------   ----------------      -----------
            --------------   ----------------      -----------

</TABLE>


(1) For the period December 30, 1994 (Commencement of Operations) through
    October 31, 1995.

(2) For the period September 29, 1995 (Commencement of Operations) through
    October 31, 1995.



                         See Accompanying Notes to Financial Statements.
                                                                              41


<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                      Warburg Pincus                         Warburg Pincus
                                                   Capital Appreciation                      Emerging Growth
                                                           Fund                                   Fund
                                            -----------------------------------    -----------------------------------
                                              For the Year Ended October 31,         For the Year Ended October 31,
                                                 1995                1994               1995                1994
                                            ---------------    ----------------    ---------------    ----------------
<S>                                         <C>                <C>                 <C>                <C>
FROM OPERATIONS:
    Net investment income (loss)             $     563,484       $    384,246       $  (2,982,589)      $ (1,678,646)
    Net realized gain (loss) from
      security transactions                     31,649,453         11,173,174          49,113,782         (5,721,525)
    Net realized gain (loss) from foreign
      currency related items                             0                  0                   0                  0
    Net change in unrealized appreciation
      (depreciation) from investments and
      foreign currency related items            12,386,702         (9,106,613)         84,670,426         10,930,919
                                            ---------------    ----------------    ---------------    ----------------
        Net increase (decrease) in net
          assets resulting from
          operations                            44,599,639          2,450,807         130,801,619          3,530,748
                                            ---------------    ----------------    ---------------    ----------------
FROM DISTRIBUTIONS:
    Dividends from net investment income:
        Common Shares                             (563,484)          (419,337)                  0                  0
        Advisor Shares                                   0            (27,724)                  0                  0
    Distributions in excess of net
      investment income:
        Common Shares                                    0                  0                   0                  0
    Distributions from capital gains:
        Common Shares                          (10,419,627)       (12,899,141)                  0        (10,576,150)
        Advisor Shares                            (575,892)          (852,608)                  0         (1,639,316)
                                            ---------------    ----------------    ---------------    ----------------
        Net decrease from distributions        (11,559,003)       (14,198,810)                  0        (12,215,466)
                                            ---------------    ----------------    ---------------    ----------------
FROM CAPITAL SHARE TRANSACTIONS:
    Proceeds from sale of shares                88,963,455         45,617,531         335,569,078        180,813,270
    Reinvested dividends                        11,246,752         13,809,167                   0         12,758,387
    Net asset value of shares redeemed         (53,459,471)       (49,851,500)       (116,280,844)       (71,767,717)
                                            ---------------    ----------------    ---------------    ----------------
        Net increase in net assets from
          capital share transactions            46,750,736          9,575,198         219,288,234        121,803,940
                                            ---------------    ----------------    ---------------    ----------------
        Net increase (decrease) in net
          assets                                79,791,372         (2,172,805)        350,089,853        113,119,222
NET ASSETS:
    Beginning of period                        167,514,493        169,687,298         304,672,758        191,553,536
                                            ---------------    ----------------    ---------------    ----------------
    End of period                            $ 247,305,865       $167,514,493       $ 654,762,611       $304,672,758
                                            ---------------    ----------------    ---------------    ----------------
                                            ---------------    ----------------    ---------------    ----------------
</TABLE>

42
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                               Warburg Pincus                   Warburg Pincus
                                                                  Japan OTC                    Emerging Markets
                      Warburg Pincus                                Fund                             Fund
                   International Equity            ---------------------------------------    -------------------
                           Fund                                          For the Period         For the Period
            -----------------------------------                        September 30, 1994      December 30, 1994
                                                       For the          (Commencement of       (Commencement of
              For the Year Ended October 31,          Year Ended       Operations) through    Operations) through
                 1995                1994          October 31, 1995     October 31, 1994       October 31, 1995
            ---------------    ----------------    ----------------    -------------------    -------------------

<S>         <C>                <C>                 <C>                 <C>                    <C>
            $   12,746,935      $    1,310,933       $    (73,801)         $     5,115            $    29,534

               (34,444,203 )        48,091,665         (4,629,196)                   0                102,219

                16,792,905          (2,772,944)         7,895,010             (294,437)                (4,992)

                (4,675,049 )        82,484,415           (195,368)             (35,099)                (9,058)
            ---------------    ----------------    ----------------    -------------------    -------------------

                (9,579,412 )       129,114,069          2,996,645             (324,421)               117,703
            ---------------    ----------------    ----------------    -------------------    -------------------
               (11,671,023 )        (1,764,380)                 0                    0                (14,321)
                  (629,473 )          (218,961)                 0                    0                     (3)

                         0            (223,659)                 0                    0                      0
               (42,332,078 )        (1,047,367)                 0                    0                      0
                (5,756,403 )          (129,979)                 0                    0                      0
            ---------------    ----------------    ----------------    -------------------    -------------------
               (60,388,977 )        (3,384,346)                 0                    0                (14,324)
            ---------------    ----------------    ----------------    -------------------    -------------------

             1,383,361,959       1,430,739,923        200,565,875           20,287,158              7,753,908
                54,872,977           2,950,772                  0                    0                 13,802
              (715,598,203 )      (249,050,078)       (44,871,674)            (185,101)            (1,191,160)
            ---------------    ----------------    ----------------    -------------------    -------------------

               722,636,733       1,184,640,617        155,694,201           20,102,057              6,576,550
            ---------------    ----------------    ----------------    -------------------    -------------------

               652,668,344       1,310,370,340        158,690,846           19,777,636              6,679,929
             1,733,275,503         422,905,163         19,878,636              101,000                101,000
            ---------------    ----------------    ----------------    -------------------    -------------------
            $2,385,943,847      $1,733,275,503       $178,569,482          $19,878,636            $ 6,780,929
            ---------------    ----------------    ----------------    -------------------    -------------------
            ---------------    ----------------    ----------------    -------------------    -------------------

<CAPTION>
             Warburg Pincus
              Post-Venture
              Capital Fund
           -------------------
             For the Period
           September 29, 1995
            (Commencement of
           Operations) through
            October 31, 1995
           -------------------
<S>         <C>
               $       356
                   (26,884)
                         0
                   164,441
           -------------------
                   137,913
           -------------------
                         0
                         0
                         0
                         0
                         0
           -------------------
                         0
           -------------------
                 2,792,403
                         0
                    (4,887)
           -------------------
                 2,787,516
           -------------------
                 2,925,429
                   100,000
           -------------------
               $ 3,025,429
           -------------------
           -------------------
</TABLE>

                    See Accompanying Notes to Financial Statements.

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS POST-VENTURE CAPITAL FUND
FINANCIAL HIGHLIGHTS
(For an Advisor Share of the Fund Outstanding Throughout the Period)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                               For the Period
                                                                                             September 29, 1995
                                                                                              (Commencement of
                                                                                             Operations) through
                                                                                              October 31, 1995
                                                                                          -------------------------
<S>                                                                                       <C>
NET ASSET VALUE, BEGINNING OF PERIOD                                                               $ 10.00
                                                                                                   -------
     Income from Investment Operations:
     Net Investment Income                                                                             .00
     Net Gain on Securities                                                                            .68
                                                                                                   -------
          Total from Investment Operations                                                             .68
                                                                                                   -------
     Less Distributions:
     Dividends from Net Investment Income                                                              .00
     Distributions from Capital Gains                                                                  .00
                                                                                                   -------
          Total Distributions                                                                          .00
                                                                                                   -------
NET ASSET VALUE, END OF PERIOD                                                                     $ 10.68
                                                                                                   -------
                                                                                                   -------

Total Return                                                                                          6.80%+

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                                        $1

Ratios to average daily net assets:
     Operating expenses                                                                               2.15%*
     Net investment income                                                                             .09%*
     Decrease reflected in above operating expense ratio due to
       waivers/reimbursements                                                                         9.25%*

Portfolio Turnover Rate                                                                              16.90%

* Annualized

+ Non-annualized
</TABLE>
                See Accompanying Notes to Financial Statements.

                                                                              49
- --------------------------------------------------------------------------------


<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS
October 31, 1995
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

     The  Warburg Pincus  Equity Funds are  comprised of  Warburg Pincus Capital
Appreciation  Fund   (the   'Capital   Appreciation   Fund'),   Warburg   Pincus
International  Equity Fund (the 'International  Equity Fund') and Warburg Pincus
Post-Venture Capital Fund (the 'Post-Venture Capital Fund') which are registered
under the  Investment Company  Act of  1940,  as amended  (the '1940  Act'),  as
diversified,  open-end  management  investment  companies,  and  Warburg  Pincus
Emerging Growth Fund (the 'Emerging Growth Fund'), Warburg Pincus Japan OTC Fund
(the 'Japan OTC Fund') and Warburg  Pincus Emerging Markets Fund (the  'Emerging
Markets  Fund', together with  the Capital Appreciation  Fund, the International
Equity Fund, the  Post-Venture Capital Fund,  the Emerging Growth  Fund and  the
Japan  OTC Fund, the  'Funds') which are  registered under the  1940 Act as non-
diversified, open-end management investment companies.

     Investment  objectives  for   each  Fund  are   as  follows:  the   Capital
Appreciation  Fund, the  International Equity Fund  and the Japan  OTC Fund seek
long-term capital appreciation; the Emerging  Growth Fund seeks maximum  capital
appreciation;   the  Emerging  Markets   Fund  seeks  growth   of  capital;  the
Post-Venture Capital Fund seeks long-term growth of capital.

     Each Fund offers  two classes  of shares, one  class being  referred to  as
Common  Shares and  one class  being referred to  as Advisor  Shares. Common and
Advisor Shares in each Fund represent an  equal pro rata interest in such  Fund,
except  that they  bear different expenses  which reflect the  difference in the
range of services provided to  them. Common Shares for  the Japan OTC Fund,  the
Emerging  Markets  Fund and  the Post-Venture  Capital  Fund bear  expenses paid
pursuant to a shareholder servicing and  distribution plan adopted by each  Fund
at  an annual rate  not to exceed .25%  of the average daily  net asset value of
each Fund's  outstanding  Common  Shares.  Advisor Shares  for  each  Fund  bear
expenses  paid pursuant to a distribution plan adopted by each Fund at an annual
rate not to  exceed .75% of  the average daily  net asset value  of each  Fund's
outstanding  Advisor Shares.  The Common  and the  Advisor Shares  are currently
bearing expenses of .25% and .50% of average daily net assets, respectively.

     The net asset value  of each Fund  is determined daily as  of the close  of
regular  trading on  the New  York Stock  Exchange. Each  Fund's investments are
valued at market value,  which is currently determined  using the last  reported
sales  price. If no sales are reported,  investments are generally valued at the
last reported bid price.  In the absence of  market quotations, investments  are
generally  valued at fair value  as determined by or  under the direction of the
Fund's governing Board. Short-term  investments that mature in  60 days or  less
are valued on the basis of amortized cost, which approximates market value.

     The  books  and  records  of  the Funds  are  maintained  in  U.S. dollars.
Transactions denominated  in  foreign currencies  are  recorded at  the  current
prevailing  exchange rates.  All assets  and liabilities  denominated in foreign
currencies are translated into U.S. dollar amounts at the current exchange  rate
at  the end of the period. Translation gains or losses resulting from changes in
the exchange rate during the reporting  period and realized gains and losses  on
the settlement of foreign currency transactions are

50
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
reported  in the results of operations for  the current period. The Funds do not
isolate that portion  of gains and  losses on investments  in equity  securities
which are due to changes in the foreign exchange rate from that which are due to
changes in market prices of equity securities. The Funds isolate that portion of
gains  and losses on investments in debt  securities which are due to changes in
the foreign exchange rate from that which are due to changes in market prices of
debt securities.

     Security transactions are accounted for  on trade date. Interest income  is
recorded  on the accrual basis. Dividends  are recorded on the ex-dividend date.
Income, expenses (excluding  class-specific expenses, principally  distribution,
transfer  agent and printing) and realized/unrealized gains/losses are allocated
proportionately to each class of shares based upon the relative net asset  value
of  outstanding shares. The cost of investments sold is determined by use of the
specific identification  method  for both  financial  reporting and  income  tax
purposes.

     Dividends from net investment income are declared and paid semiannually for
all Funds. Distributions of net realized capital gains, if any, are declared and
paid  annually. However, to the  extent that a net  realized capital gain can be
reduced by a capital loss carryover,  such gain will not be distributed.  Income
and  capital gain distributions are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.

     Certain amounts  in  the Financial  Highlights  have been  reclassified  to
conform with current year presentation.

     No  provision is made for  Federal taxes as it  is each Fund's intention to
continue to qualify  for and  elect the  tax treatment  applicable to  regulated
investment  companies under  the Internal  Revenue Code  and make  the requisite
distributions to its shareholders  which will be sufficient  to relieve it  from
Federal income and excise taxes.

     Costs  incurred by the  Japan OTC Fund,  the Emerging Markets  Fund and the
Post-Venture Capital  Fund  in  connection with  their  organization  have  been
deferred  and are being amortized over a period of five years from the date each
Fund commenced its operations.

     Each Fund may enter into repurchase agreement transactions. Under the terms
of a  typical  repurchase agreement,  a  Fund acquires  an  underlying  security
subject  to  an  obligation  of  the seller  to  repurchase.  The  value  of the
underlying security collateral will be maintained at an amount at least equal to
the total amount of the purchase obligation, including interest. The  collateral
is in the Fund's possession.

2. INVESTMENT ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR

     Warburg, Pincus Counsellors, Inc. ('Warburg'), a wholly owned subsidiary of
Warburg,  Pincus Counsellors  G.P. ('Counsellors  G.P.'), serves  as each Fund's
investment adviser. For its investment  advisory services, Warburg receives  the
following fees based on each Fund's average daily net assets:

                                                                              51
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
              FUND                             ANNUAL RATE
- ---------------------------------   ----------------------------------
<S>                                 <C>
Capital Appreciation                  .70% of average daily net assets
Emerging Growth                       .90% of average daily net assets
International Equity                 1.00% of average daily net assets
Japan OTC                            1.25% of average daily net assets
Emerging Markets                     1.25% of average daily net assets
Post-Venture Capital                 1.25% of average daily net assets
</TABLE>

     For  the period or  year ended October 31,  1995, investment advisory fees,
waivers and reimbursements were as follows:

<TABLE>
<CAPTION>
                                                 GROSS                         NET            EXPENSE
                   FUND                       ADVISORY FEE     WAIVER      ADVISORY FEE    REIMBURSEMENTS
- -------------------------------------------   ------------    ---------    ------------    --------------
<S>                                           <C>             <C>          <C>             <C>
Capital Appreciation                          $  1,367,729    $       0    $  1,367,729      $        0
Emerging Growth                                  3,824,061            0       3,824,061               0
International Equity                            20,225,631            0      20,225,631               0
Japan OTC                                          599,720     (599,720)              0         (25,920)
Emerging Markets                                    29,641      (29,641)              0        (230,338)
Post-Venture Capital                                 1,756       (1,756)              0         (31,458)
</TABLE>

     SPARX  Investment  &   Research,  USA,   Inc.  ('SPARX   USA')  serves   as
sub-investment adviser for the Japan OTC Fund. From its investment advisory fee,
Warburg pays SPARX USA a fee at an annual rate of .625% of the average daily net
assets  of the Japan OTC Fund. No compensation  is paid by the Japan OTC Fund to
SPARX USA for its sub-investment advisory services.

     Counsellors Funds  Service, Inc.  ('CFSI'), a  wholly owned  subsidiary  of
Warburg,  and PFPC  Inc. ('PFPC'), an  indirect, wholly owned  subsidiary of PNC
Bank  Corp.  ('PNC'),   serve  as   each  Fund's   co-administrators.  For   its
administrative  services, CFSI currently receives a  fee calculated at an annual
rate of .10% of  each Fund's average  daily net assets. For  the period or  year
ended  October 31,  1995, administrative  services fees  earned by  CFSI were as
follows:

<TABLE>
<CAPTION>
                   FUND                           CO-ADMINISTRATION FEE
- -------------------------------------------   ------------------------------
<S>                                           <C>
Capital Appreciation                                    $  195,390
Emerging Growth                                            424,895
International Equity                                     2,022,563
Japan OTC                                                   47,978
Emerging Markets                                             2,372
Post-Venture Capital                                           140
</TABLE>

     For its administrative services, PFPC  currently receives a fee  calculated
at  an  annual rate  of .10%  of the  average  daily net  assets of  the Capital
Appreciation Fund, the Emerging Growth  Fund and the Post-Venture Capital  Fund.
For  the International Equity Fund, the Japan  OTC Fund and the Emerging Markets
Fund, PFPC currently receives a fee calculated at an annual rate of .12% on each
Fund's first $250 million  in average daily  net assets, .10%  on the next  $250
million in average daily net assets, .08%

52
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
on  the next $250 million  in average daily net assets,  and .05% of the average
daily net assets over $750 million.

     For the period or year ended October 31, 1995, administrative service  fees
earned and waived by PFPC were as follows:

<TABLE>
<CAPTION>
                                                                                            NET
                  FUND                      CO-ADMINISTRATION FEE     WAIVER       CO-ADMINISTRATION FEE
- -----------------------------------------   ---------------------    --------    -------------------------
<S>                                         <C>                      <C>         <C>
Capital Appreciation                             $   195,390         $      0           $   195,390
Emerging Growth                                      424,895                0               424,895
International Equity                               1,386,283                0             1,386,283
Japan OTC                                             90,701          (26,746)               63,955
Emerging Markets                                       2,845           (2,845)                    0
Post-Venture Capital                                     140             (140)                    0
</TABLE>

     Counsellors  Securities  Inc. ('CSI'),  also a  wholly owned  subsidiary of
Warburg, serves  as each  Fund's distributor.  No compensation  is paid  by  the
Capital  Appreciation Fund, the Emerging Growth Fund or the International Equity
Fund to  CSI  for  distribution  services. For  its  shareholder  servicing  and
distribution services, CSI currently receives a fee calculated at an annual rate
of  .25% of the average daily net assets  of the Common Shares for the Japan OTC
Fund, the Emerging Markets Fund and the Post-Venture Capital Fund pursuant to  a
shareholder servicing and distribution plan adopted by each Fund. For the period
or year ended October 31, 1995, distribution fees earned by CSI were as follows:

<TABLE>
<CAPTION>
                   FUND                              DISTRIBUTION FEE
- -------------------------------------------   ------------------------------
<S>                                           <C>
Japan OTC                                                $119,941
Emerging Markets                                            5,926
Post-Venture Capital                                          351
</TABLE>

3. INVESTMENTS IN SECURITIES

     For  the period  or year  ended October  31, 1995,  purchases and  sales of
investment securities (excluding short-term investments) were as follows:

<TABLE>
<CAPTION>
                           FUND                                 PURCHASES          SALES
- -----------------------------------------------------------   --------------    ------------
<S>                                                           <C>               <C>
Capital Appreciation                                          $  299,741,274    $269,962,070
Emerging Growth                                                  532,722,466     336,581,792
International Equity                                           1,457,609,458     735,613,078
Japan OTC                                                        189,768,420      36,507,703
Emerging Markets                                                   7,181,659       1,297,140
Post-Venture Capital                                               2,714,501         222,270
</TABLE>

                                                                              53
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

     At October 31, 1995, the  net unrealized appreciation from investments  for
those  securities  having  an  excess  of value  over  cost  and  net unrealized
depreciation from investments for those securities having an excess of cost over
value (based on cost for Federal income tax purposes) was as follows:

<TABLE>
<CAPTION>
                                                                             NET UNREALIZED
                                         UNREALIZED        UNREALIZED         APPRECIATION
               FUND                     APPRECIATION      DEPRECIATION       (DEPRECIATION)
- -----------------------------------     ------------      -------------      --------------
<S>                                     <C>               <C>                <C>
Capital Appreciation                    $ 45,397,319      $  (3,203,157)      $ 42,194,162
Emerging Growth                          144,909,782         (9,681,675)       135,228,107
International Equity                     260,125,513       (171,560,066)        88,565,447
Japan OTC                                  6,205,079         (7,100,852)          (895,773)
Emerging Markets                             341,944           (352,944)           (11,000)
Post-Venture Capital                         233,929            (69,488)           164,441
</TABLE>

4. FORWARD FOREIGN CURRENCY CONTRACTS

     The International Equity  Fund, the  Japan OTC Fund,  the Emerging  Markets
Fund and the Post-Venture Capital Fund may enter into forward currency contracts
for  the purchase or sale of  a specific foreign currency at  a fixed price on a
future date.  Risks  may arise  upon  entering  into these  contracts  from  the
potential  inability of counterparties to meet  the terms of their contracts and
from unanticipated movements in the value of a foreign currency relative to  the
U.S.  dollar. The Funds will enter  into forward contracts primarily for hedging
purposes. The forward currency contracts are adjusted by the daily exchange rate
of the underlying currency  and any gains or  losses are recorded for  financial
statement purposes as unrealized until the contract settlement date.





54
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

At  October 31, 1995, the  International Equity Fund and  the Japan OTC Fund had
the following open forward foreign currency contracts:


<TABLE>
<CAPTION>
                                         INTERNATIONAL EQUITY FUND
- -----------------------------------------------------------------------------------------------------------
                                         FOREIGN                                              UNREALIZED
 FORWARD CURRENCY      EXPIRATION        CURRENCY          CONTRACT         CONTRACT       FOREIGN EXCHANGE
     CONTRACT             DATE          TO BE SOLD          AMOUNT           VALUE           GAIN (LOSS)
- -------------------    -----------    --------------     ------------     ------------     ----------------

<S>                    <C>            <C>                <C>              <C>              <C>
French Francs           11/15/95         260,000,000     $ 52,170,074     $ 53,253,590       $ (1,083,516)
French Francs           11/16/95         122,216,250       25,050,833       25,032,515             18,318
German Marks            11/16/95         110,000,000       78,272,317       78,263,963              8,354
German Marks            05/17/96          78,928,380       55,400,000       56,652,584         (1,252,584)
Japanese Yen            03/21/96       5,547,240,000       57,000,000       55,475,507          1,524,493
Japanese Yen            03/21/96       4,764,377,500       47,298,496       47,646,443           (347,947)
Japanese Yen            03/21/96       4,764,377,500       47,276,203       47,646,443           (370,240)
Japanese Yen            03/21/96       1,385,445,000       13,761,286       13,855,226            (93,940)
Japanese Yen            05/13/96       8,731,990,000      109,000,000       88,008,212         20,991,788
Japanese Yen            05/16/96       9,247,700,000      110,000,000       93,246,752         16,753,248
Japanese Yen            05/16/96       4,586,012,000       55,400,000       46,241,847          9,158,153
Japanese Yen            09/18/96       4,660,000,000       50,000,000       47,860,895          2,139,105
                                                         ------------     ------------     ----------------
                                                         $700,629,209     $653,183,977       $ 47,445,232
                                                         ------------     ------------     ----------------
                                                         ------------     ------------     ----------------

<CAPTION>

                                         FOREIGN
                                         CURRENCY                                             UNREALIZED
 FORWARD CURRENCY      EXPIRATION         TO BE            CONTRACT         CONTRACT       FOREIGN EXCHANGE
     CONTRACT             DATE          PURCHASED           AMOUNT           VALUE           GAIN (LOSS)
- -------------------    -----------    --------------     ------------     ------------     ----------------
<S>                    <C>            <C>                <C>              <C>              <C>

German Marks            11/16/95          34,500,000     $ 25,050,828     $ 24,546,425       $   (504,403)
                                                         ------------     ------------     ----------------
                                                         ------------     ------------     ----------------
</TABLE>

<TABLE>
<CAPTION>
                                              JAPAN OTC FUND
- -----------------------------------------------------------------------------------------------------------
                                         FOREIGN                                              UNREALIZED
 FORWARD CURRENCY      EXPIRATION        CURRENCY          CONTRACT         CONTRACT       FOREIGN EXCHANGE
     CONTRACT             DATE          TO BE SOLD          AMOUNT           VALUE           GAIN (LOSS)
- -------------------    -----------    --------------     ------------     ------------     ----------------

<S>                    <C>            <C>                <C>              <C>              <C>
Japanese Yen            11/30/95      12,567,400,000     $124,000,000     $123,536,813       $    463,187
Japanese Yen            11/30/95       2,027,000,000       20,000,000       19,925,293             74,707
Japanese Yen            11/30/95       1,520,250,000       15,000,000       14,943,969             56,031
                                                         ------------     ------------     ----------------
                                                         $159,000,000     $158,406,075       $    593,925
                                                         ------------     ------------     ----------------
                                                         ------------     ------------     ----------------
</TABLE>

                                                                              55
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

5. EQUITY SWAP TRANSACTIONS

     The International Equity Fund (the 'Fund') entered into a Taiwanese  equity
swap agreement (which represents approximately .005% of the Fund's net assets at
October  31, 1995) dated  August 11, 1995,  where the Fund  receives a quarterly
payment, representing  the  total return  (defined  as market  appreciation  and
dividend income) on a basket of three Taiwanese common stocks ('Common Stocks').
In  return, the  Fund pays  quarterly the  Libor rate  (London Interbank Offered
Rate), plus 1.25% per annum  (7.125% on October 31,  1995) on the initial  stock
purchase  amount  ('Notional amount')  of  $12,000,000. The  Notional  amount is
marked to market  on each quarterly  reset date.  In the event  that the  Common
Stocks  decline in value, the Fund will be required to pay quarterly, the amount
of any depreciation in value from the notional amount. The equity swap agreement
will terminate on August 11, 1996.

     During the term of the equity swap transaction, changes in the value of the
Common Stocks as  compared to the  Notional amount is  recognized as  unrealized
gain  or  loss.  Dividend income  for  the  Common Stocks  are  recorded  on the
ex-dividend date. Interest expense  is accrued daily. At  October 31, 1995,  the
Fund  has  recorded  an unrealized  gain  of  $502,018 and  interest  payable of
$192,375 on the equity swap transaction.





56
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

6. CAPITAL SHARE TRANSACTIONS

     The Capital Appreciation Fund is authorized to issue three billion of  full
and  fractional shares  of beneficial  interest, $.001  par value  per share, of
which one billion shares are classified as Series 2 Shares (the Advisor Shares).
The Emerging Growth Fund, the International Equity Fund, the Japan OTC Fund, the
Emerging Markets Fund and the Post-Venture  Capital Fund are each authorized  to
issue three billion full and fractional shares of capital stock, $.001 par value
per  share, of which one billion shares of  each Fund are designated as Series 2
Shares (the Advisor Shares).

     Transactions in shares of each Fund were as follows:


<TABLE>
<CAPTION>
                                      CAPITAL APPRECIATION FUND                                    EMERGING GROWTH FUND
                           Common Shares                   Advisor Shares                    Common Shares           Advisor Shares
                   -----------------------------     ---------------------------     ------------------------------  --------------
                                  For the Year Ended October 31,                             For the Year Ended October 31,
                   -------------------------------------------------------------     ----------------------------------------------
                        1995             1994            1995            1994             1995              1994           1995
                    ------------     ------------     -----------     -----------     -------------     ------------    -----------
<S>                 <C>              <C>              <C>             <C>             <C>               <C>              <C>

Shares sold            6,020,619        2,958,494         201,782         290,193         9,808,362        6,133,751     3,172,686
Shares issued to
  shareholders on
  reinvestment of
  dividends              850,478          920,210          46,554          61,526                 0          506,720             0
Shares redeemed       (3,638,974)      (3,126,497)       (110,027)       (460,020)       (4,294,179)      (2,859,413)     (383,922)
                    ------------     ------------     -----------     -----------     -------------     ------------    -----------
Net increase
  (decrease) in
  shares
  outstanding          3,232,123          752,207         138,309        (108,301)        5,514,183        3,781,058     2,788,764
                    ------------     ------------     -----------     -----------     -------------     ------------   -----------
                    ------------     ------------     -----------     -----------     -------------     ------------   -----------
Proceeds from sale
  of shares         $ 85,992,655     $ 41,570,590     $ 2,970,800     $ 4,046,941     $ 256,886,928     $132,922,995   $78,682,150
Reinvested
  dividends           10,670,876       12,945,690         575,876         863,477                 0       11,015,146             0
Net asset value of
  shares redeemed    (51,907,650)     (43,449,501)     (1,551,821)     (6,401,999)     (106,777,032)     (61,126,667)   (9,503,812)
                    ------------     ------------     -----------     -----------     -------------     ------------   -----------
Net increase
  (decrease) from
  capital share
  transactions      $ 44,755,881     $ 11,066,779     $ 1,994,855     $(1,491,581)    $ 150,109,896     $ 82,811,474   $69,178,338
                    ------------     ------------     -----------     -----------     -------------     ------------   -----------
                    ------------     ------------     -----------     -----------     -------------     ------------   -----------

<CAPTION>


                         1994
                     ------------
<S>                    <C>
Shares sold             2,233,737
Shares issued to
  shareholders on
  reinvestment of
  dividends                80,473
Shares redeemed          (517,898)
                     ------------
Net increase
  (decrease) in
  shares
  outstanding           1,796,312
                     ------------
                     ------------
Proceeds from sale
  of shares          $ 47,890,275
Reinvested
  dividends             1,743,241
Net asset value of
  shares redeemed     (10,641,050)
                     ------------
Net increase
  (decrease) from
  capital share
  transactions       $ 38,992,466
                     ------------
                     ------------
</TABLE>

                                                                              57
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

6. CAPITAL SHARE TRANSACTIONS (CONT'D)

<TABLE>
<CAPTION>

                                                                                                 EMERGING MARKETS FUND
                                           INTERNATIONAL EQUITY FUND                        Common Shares    Advisor Shares
                                 Common Shares                     Advisor Shares          ---------------  -----------------
                        --------------------------------    ----------------------------             For the Period
                                         For the Year Ended October 31,                            December 30, 1994
                        ----------------------------------------------------------------      (Commencement of Operations)
                             1995              1994             1995            1994            through October 31, 1995
                        --------------    --------------    ------------    ------------   ----------------------------------
<S>                     <C>               <C>               <C>             <C>            <C>              <C>
Shares sold                 68,096,606        64,218,907       7,225,150       7,956,088         694,008               22
Shares issued to
  shareholders on
  reinvestment of
  dividends                  2,623,005           147,031         346,377           6,879           1,267                0
Shares redeemed            (38,317,625)      (11,861,720)       (770,753)       (795,406)       (104,480)               0
                        --------------    --------------    ------------    ------------   ---------------          -----
Net increase
  (decrease) in
  shares outstanding        32,401,986        52,504,218       6,800,774       7,167,561         590,795               22
                        --------------    --------------    ------------    ------------   ---------------          -----
                        --------------    --------------    ------------    ------------   ---------------          -----
Proceeds from sale of
  shares                $1,251,776,887    $1,275,306,263    $131,585,072    $155,433,660     $ 7,753,651        $     257
Reinvested dividends        48,487,109         2,820,903       6,385,868         129,869          13,802                0
Net asset value of
  shares redeemed         (701,310,424)     (233,614,600)    (14,287,779)    (15,435,478)     (1,191,160)               0
                        --------------    --------------    ------------    ------------   ---------------          -----
Net increase
  (decrease) from
  capital share
  transactions          $  598,953,572    $1,044,512,566    $123,683,161    $140,128,051     $ 6,576,293        $     257
                        --------------    --------------    ------------    ------------   ---------------          -----
                        --------------    --------------    ------------    ------------   ---------------          -----
</TABLE>

7. NET ASSETS

     Net Assets at October 31, 1995, consisted of the following:

<TABLE>
<CAPTION>
                                                                          CAPITAL           EMERGING
                                                                     APPRECIATION FUND    GROWTH FUND
                                                                     -----------------    ------------

<S>                                                                  <C>                  <C>
Capital contributed, net                                               $ 173,327,827      $479,035,241
Accumulated net investment income (loss)                                           0                0
Accumulated net realized gain (loss) from security transactions           31,648,355       40,302,640
Net unrealized appreciation (depreciation) from investments and
  foreign currency related items                                          42,329,683      135,424,730
                                                                     -----------------    ------------
Net assets                                                             $ 247,305,865      $654,762,611
                                                                     -----------------    ------------
                                                                     -----------------    ------------
</TABLE>

58
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                             JAPAN OTC FUND
                         Common Shares                            Advisor Shares
             -------------------------------------     -------------------------------------
                                   For the Period                            For the Period     POST-VENTURE CAPITAL FUND
                                   September 30,                             September 30,          Common Shares
                                        1994                                      1994            ------------------
                                  (Commencement of                          (Commencement of        For the Period
                 For the            Operations)            For the            Operations)          September 29, 1995
                Year Ended            through             Year Ended            through         (Commencement of Operations)
             October 31, 1995     October 31, 1994     October 31, 1995     October 31, 1994      through October 31, 1995
             ----------------     ----------------     ----------------     ----------------    --------------------------

<S>          <C>                  <C>                  <C>                  <C>                <C>
                 22,809,795            2,025,697               0                    15                  273,510
                          0                    0               0                     0                        0
                 (5,180,432)             (18,605)              0                     0                     (473)
                                                              --
             ----------------     ----------------                               -----           ------------------
                 17,629,363            2,007,092               0                    15                  273,037
                                                              --
                                                              --
             ----------------     ----------------                               -----           ------------------
             ----------------     ----------------                               -----           ------------------
               $200,565,875         $ 20,287,008              $0                  $150               $2,792,203
                          0                    0               0                     0                        0
                (44,871,674)            (185,101)              0                     0                   (4,887)
                                                              --
             ----------------     ----------------                               -----           ------------------
               $155,694,201         $ 20,101,907              $0                  $150               $2,787,316
                                                              --
                                                              --
             ----------------     ----------------                               -----           ------------------
             ----------------     ----------------                               -----           ------------------

<CAPTION>


                   Advisor Shares
               ---------------------
<S>        <C>
                        19
                         0
                         0
                     -----
                        19
                     -----
                     -----
                 $     200
                         0
                         0
                     -----
                 $     200
                     -----
                     -----
</TABLE>

<TABLE>
<CAPTION>
         INTERNATIONAL        EMERGING                          POST-VENTURE
          EQUITY FUND       MARKETS FUND     JAPAN OTC FUND     CAPITAL FUND
         --------------     ------------     --------------     ------------

<S>      <C>                <C>              <C>                <C>
         $2,271,007,433      $6,677,550       $175,619,527       $2,887,516
            19,124,669           10,218          7,821,209              356
           (40,671,086 )        102,219         (4,640,787)         (26,884)
           136,482,831           (9,058)          (230,467)         164,441
         --------------     ------------     --------------     ------------
         $2,385,943,847      $6,780,929       $178,569,482       $3,025,429
         --------------     ------------     --------------     ------------
         --------------     ------------     --------------     ------------
</TABLE>

                                                                              59
- --------------------------------------------------------------------------------


<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

8. CAPITAL LOSS CARRYOVER

     At  October 31, 1995, the International Equity Fund, the Japan OTC Fund and
the Post-Venture  Capital  Fund  had capital  loss  carryovers  of  $40,671,086,
$4,629,196 and $26,884, respectively, expiring in 2003 to offset possible future
capital gains of each Fund.

9. OTHER FINANCIAL HIGHLIGHTS

     Each  Fund  currently  offers one  other  class of  shares,  Common Shares,
representing equal prorata interests  in each of  the respective Warburg  Pincus
Equity  Funds. The financial highlights  for a Common Share  of each Fund are as
follows:


<TABLE>
<CAPTION>
                                                                      Capital Appreciation Fund
                                                        ------------------------------------------------------
                                                                            Common Shares
                                                        ------------------------------------------------------
                                                                    For the Year Ended October 31,
                                                        ------------------------------------------------------
                                                         1995        1994        1993        1992        1991
                                                        ------      ------      ------      ------      ------
<S>                                                     <C>         <C>         <C>         <C>         <C>
NET ASSET VALUE, BEGINNING OF YEAR                      $14.29      $15.32      $13.30      $12.16      $ 9.78
                                                        ------      ------      ------      ------      ------
     Income from Investment Operations:
     Net Investment Income                                 .04         .04         .05         .04         .15
     Net Gain on Securities (both
       realized and unrealized)                           3.08         .17        2.78        1.21        2.41
                                                        ------      ------      ------      ------      ------
          Total from Investment Operations                3.12         .21        2.83        1.25        2.56
                                                        ------      ------      ------      ------      ------
     Less Distributions:
     Dividends from Net Investment Income                 (.04)       (.05)       (.05)       (.06)       (.18)
     Distributions from Capital Gains                     (.98)      (1.19)       (.76)       (.05)        .00
                                                        ------      ------      ------      ------      ------
          Total Distributions                            (1.02)      (1.24)       (.81)       (.11)       (.18)
                                                        ------      ------      ------      ------      ------
NET ASSET VALUE, END OF YEAR                            $16.39      $14.29      $15.32      $13.30      $12.16
                                                        ------      ------      ------      ------      ------
                                                        ------      ------      ------      ------      ------

Total Return                                             24.05%       1.65%      22.19%      10.40%      26.39%

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Year (000s)                          $235,712    $159,346    $159,251    $117,900    $115,191

Ratios to average daily net assets:
     Operating expenses                                   1.12%       1.05%       1.01%       1.06%       1.08%
     Net investment income                                 .31%        .26%        .30%        .41%       1.27%
     Decrease reflected in above operating expense
       ratios due to waivers/reimbursements                .00%        .01%        .00%        .01%        .00%

Portfolio Turnover Rate                                 146.09%      51.87%      48.26%      55.83%      39.50%
</TABLE>



60
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------

TAX STATUS OF 1995 DIVIDENDS (Unaudited)

Taxable dividends paid by the Fund on per share basis were as follows:

<TABLE>
<S>                                                         <C>
Ordinary income                                             $.06
Long-term capital gain                                       .96
</TABLE>

Ordinary income  dividends  qualifying  for  the  dividends  received  deduction
available to corporate shareholders was 100.00%.

Because  the Fund's fiscal year is not the  calendar year, amounts to be used by
calendar year  taxpayers on  their  Federal return  will  be reflected  on  Form
1099-DIV and will be mailed in January 1996.

                                                                              61
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                         Emerging Growth Fund
                                                        ------------------------------------------------------
                                                                            Common Shares
                                                        ------------------------------------------------------
                                                                    For the Year Ended October 31,
                                                        ------------------------------------------------------
                                                         1995        1994        1993        1992        1991
                                                        ------      ------      ------      ------      ------
<S>                                                     <C>         <C>         <C>         <C>         <C>

NET ASSET VALUE, BEGINNING OF YEAR                      $22.38      $23.74      $18.28      $16.97      $10.83
                                                        ------      ------      ------      ------      ------
     Income from Investment Operations:
     Net Investment Income (Loss)                         (.05)       (.06)       (.10)       (.03)        .05
     Net Gain on Securities (both
       realized and unrealized)                           7.64         .06        5.93        1.71        6.16
                                                        ------      ------      ------      ------      ------
          Total from Investment Operations                7.59         .00        5.83        1.68        6.21
                                                        ------      ------      ------      ------      ------
     Less Distributions:
     Dividends from Net Investment Income                  .00         .00         .00        (.01)       (.07)
     Distributions from Capital Gains                      .00       (1.36)       (.37)       (.36)        .00
                                                        ------      ------      ------      ------      ------
          Total Distributions                              .00       (1.36)       (.37)       (.37)       (.07)
                                                        ------      ------      ------      ------      ------
NET ASSET VALUE, END OF YEAR                            $29.97      $22.38      $23.74      $18.28      $16.97
                                                        ------      ------      ------      ------      ------
                                                        ------      ------      ------      ------      ------

Total Return                                             33.91%        .16%      32.28%       9.87%      57.57%

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Year (000s)                          $487,537    $240,664    $165,525    $99,562     $42,061

Ratios to average daily net assets:
     Operating expenses                                   1.26%       1.22%       1.23%       1.24%       1.25%
     Net investment income (loss)                         (.58%)      (.58%)      (.60%)      (.25%)       .32%
     Decrease reflected in above operating expense
       ratios due to waivers/reimbursements                .00%        .04%        .00%        .08%        .47%

Portfolio Turnover Rate                                  84.82%      60.38%      68.35%      63.35%      97.69%
</TABLE>



62
- --------------------------------------------------------------------------------


<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                      International Equity Fund
                                                        ------------------------------------------------------
                                                                            Common Shares
                                                        ------------------------------------------------------
                                                                    For the Year Ended October 31,
                                                        ------------------------------------------------------
                                                         1995        1994        1993        1992        1991
                                                        ------      ------      ------      ------      ------
<S>                                                     <C>         <C>         <C>         <C>         <C>
NET ASSET VALUE, BEGINNING OF YEAR                      $20.51      $17.00      $12.22      $13.66      $11.81
                                                        ------      ------      ------      ------      ------
     Income from Investment Operations:
     Net Investment Income                                 .12         .09         .09         .15         .19
     Net Gain (Loss) on Securities and
       Foreign Currency Related Items (both
       realized and unrealized)                           (.67)       3.51        4.84       (1.28)       2.03
                                                        ------      ------      ------      ------      ------
          Total from Investment Operations                (.55)       3.60        4.93       (1.13)       2.22
                                                        ------      ------      ------      ------      ------
     Less Distributions:
     Dividends from Net Investment Income                 (.13)       (.04)       (.02)       (.16)       (.33)
     Distributions in Excess of
       Net Investment Income                               .00        (.01)        .00         .00         .00
     Distributions from Capital Gains                     (.53)       (.04)       (.13)       (.15)       (.04)
                                                        ------      ------      ------      ------      ------
          Total Distributions                             (.66)       (.09)       (.15)       (.31)       (.37)
                                                        ------      ------      ------      ------      ------
NET ASSET VALUE, END OF YEAR                            $19.30      $20.51      $17.00      $12.22      $13.66
                                                        ------      ------      ------      ------      ------
                                                        ------      ------      ------      ------      ------

Total Return                                             (2.55%)     21.22%      40.68%      (8.44%)     19.42%

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Year (000s)                          $2,068,207  $1,533,872  $378,661    $101,763    $72,553

Ratios to average daily net assets:
     Operating expenses                                   1.39%       1.44%       1.48%       1.49%       1.50%
     Net investment income                                 .69%        .19%        .38%        .88%       1.19%
     Decrease reflected in above operating expense
       ratios due to waivers/reimbursements                .00%        .00%        .00%        .07%        .17%

Portfolio Turnover Rate                                  39.24%      17.02%      22.60%      53.29%      54.95%
</TABLE>


TAX STATUS OF 1995 DIVIDENDS (Unaudited)

Taxable dividends paid by the Fund on per share basis were as follows:

<TABLE>
<S>                                                         <C>
Ordinary income                                             $.46
Long-term capital gain                                       .20
</TABLE>

Because  the Fund's fiscal year is not the  calendar year, amounts to be used by
calendar year  taxpayers on  their  Federal return  will  be reflected  on  Form
1099-DIV and will be mailed in January 1996.

                                                                              63
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                             Japan OTC Fund
                                                        ---------------------------------------------------------
                                                                              Common Shares
                                                        ---------------------------------------------------------
                                                                                             For the Period
                                                                                           September 30, 1994
                                                                                            (Commencement of
                                                            For the Year Ended            Operations) through
                                                             October 31, 1995               October 31, 1994
                                                        ---------------------------    --------------------------
<S>                                                     <C>                            <C>

NET ASSET VALUE, BEGINNING OF PERIOD                             $    9.85                      $  10.00
                                                               -----------                    ----------
     Income from Investment Operations:
     Net Investment Income                                             .00                           .00
     Net Loss on Securities and Foreign Currency
       Related Items (both realized and unrealized)                   (.76)                         (.15)
                                                               -----------                    ----------
          Total from Investment Operations                            (.76)                         (.15)
                                                               -----------                    ----------
     Less Distributions:
     Dividends from Net Investment Income                              .00                           .00
     Distributions from Capital Gains                                  .00                           .00
                                                               -----------                    ----------
          Total Distributions                                          .00                           .00
                                                               -----------                    ----------
NET ASSET VALUE, END OF PERIOD                                   $    9.09                      $   9.85
                                                               -----------                    ----------
                                                               -----------                    ----------

Total Return                                                         (7.72%)                      (15.84%)*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                 $ 178,568                      $ 19,878

Ratios to average daily net assets:
     Operating expenses                                               1.41%                         1.00%*
     Net investment income (loss)                                     (.15%)                         .49%*
     Decrease reflected in above operating expense
       ratios due to waivers/reimbursements                           1.35%                         4.96%*

Portfolio Turnover Rate                                              82.98%                          .00%

* Annualized
</TABLE>



64
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                         Emerging Markets Fund
                                                                                      ---------------------------
                                                                                             Common Shares
                                                                                      ---------------------------
                                                                                            For the Period
                                                                                           December 30, 1994
                                                                                           (Commencement of
                                                                                          Operations) through
                                                                                           October 31, 1995
                                                                                      ---------------------------
<S>                                                                                   <C>

NET ASSET VALUE, BEGINNING OF PERIOD                                                            $ 10.00
                                                                                                -------
     Income from Investment Operations:
     Net Investment Income                                                                          .08
     Net Gain on Securities and Foreign Currency Related Items (both
       realized and unrealized)                                                                    1.25
                                                                                                -------
          Total from Investment Operations                                                         1.33
                                                                                                -------
     Less Distributions:
     Dividends from Net Investment Income                                                          (.05)
     Distributions from Capital Gains                                                               .00
                                                                                                -------
          Total Distributions                                                                      (.05)
                                                                                                -------
NET ASSET VALUE, END OF PERIOD                                                                  $ 11.28
                                                                                                -------
                                                                                                -------

Total Return                                                                                      16.09%*

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                                $ 6,780

Ratios to average daily net assets:
     Operating expenses                                                                            1.00%*
     Net investment income                                                                         1.25%*
     Decrease reflected in above operating expense ratio due to
      waivers/reimbursements                                                                      11.08%*

Portfolio Turnover Rate                                                                           69.12%*

* Annualized
</TABLE>

TAX STATUS OF 1995 DIVIDENDS (Unaudited)

Taxable dividends paid by the Fund on per share basis were as follows:

<TABLE>
<S>                                                         <C>
Ordinary income                                             $.05
</TABLE>

Because  the Fund's fiscal year is not the  calendar year, amounts to be used by
calendar year  taxpayers on  their  Federal return  will  be reflected  on  Form
1099-DIV and will be mailed in January 1996.

                                                                              65
- --------------------------------------------------------------------------------

<PAGE>
- --------------------------------------------------------------------------------
WARBURG PINCUS EQUITY FUNDS
NOTES TO FINANCIAL STATEMENTS (CONT'D)
October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                       Post-Venture Capital Fund
                                                                                      ---------------------------
                                                                                             Common Shares
                                                                                      ---------------------------
                                                                                            For the Period
                                                                                          September 29, 1995
                                                                                           (Commencement of
                                                                                          Operations) through
                                                                                           October 31, 1995
                                                                                      ---------------------------
<S>                                                                                   <C>

NET ASSET VALUE, BEGINNING OF PERIOD                                                            $ 10.00
                                                                                                -------
     Income from Investment Operations:
     Net Investment Income                                                                          .00
     Net Gain on Securities (both realized and unrealized)                                          .69
                                                                                                -------
          Total from Investment Operations                                                          .69
                                                                                                -------
     Less Distributions:
     Dividends from Net Investment Income                                                           .00
     Distributions from Capital Gains                                                               .00
                                                                                                -------
          Total Distributions                                                                       .00
                                                                                                -------
NET ASSET VALUE, END OF PERIOD                                                                  $ 10.69
                                                                                                -------
                                                                                                -------

Total Return                                                                                       6.90%+

RATIOS/SUPPLEMENTAL DATA:

Net Assets, End of Period (000s)                                                                $ 3,024

Ratios to average daily net assets:
     Operating expenses                                                                            1.65%*
     Net investment income                                                                          .25%*
     Decrease reflected in above operating expense ratio due to
      waivers/reimbursements                                                                      23.76%*

Portfolio Turnover Rate                                                                           16.90%*

* Annualized
+ Non-annualized
</TABLE>


66
- --------------------------------------------------------------------------------




<PAGE>C-1

                                    PART C

                               OTHER INFORMATION
   
Item 24.    Financial Statements and Exhibits

       (a)  Financial Statements

            (1)  Financial Statements included in Part A:

                 (a)  Financial Highlights

            (2)  Audited Financial Statements included in Part B:

                 (a)  Report of Coopers & Lybrand L.L.P., Independent Auditors

                 (b)  Schedule of Investments

                 (c)  Statement of Assets and Liabilities

                 (d)  Statement of Changes in Net Assets

                 (e)  Financial Highlights

                 (f)  Notes to Financial Statements

       (b)  Exhibits:

Exhibit No.    Description of Exhibit
- -----------    ----------------------
   1           Articles of Incorporation.(1)

   2           By-Laws.(1)

   3           Not applicable.

   4           Forms of Share Certificates.(1)

   5           Form of Investment Advisory Agreement.(1)

   6           Distribution Agreement.(2)

   7           Not applicable.



- ------------------------
(1)         Incorporated by reference to Registrant's Pre-Effective Amendment
            No. 2 to its Registration Statement on Form N-1A, filed on
            September 22, 1995.

(2)         Contained in Exhibit No. 15 hereto.

<PAGE>C-2

Exhibit No.    Description of Exhibit
- -----------    ----------------------

   8(a)        Form of Custodian Agreement with PNC Bank, National
               Association.(3)

    (b)        Form of Custodian Agreement with State Street Bank and Trust
               Company.(3)

   9(a)        Form of Transfer Agency Agreement.(3)

    (b)        Form of Counsellors Service Co-Administration Agreement.(3)

    (c)        Form of PFPC Co-Administration Agreement.(4)

    (d)        Form of Services Agreements.(5)

  10(a)        Consent of Willkie Farr & Gallagher, counsel to the Fund.

    (b)        Opinion of Willkie Farr & Gallagher, counsel to the Fund.(6)

  11           Consent of Coopers & Lybrand L.L.P., Independent Auditors.

  12           Not applicable.

  13           Form of Purchase Agreement.(1)

  14           Retirement Plans.(7)

  15(a)        Form of Shareholder Services and Distribution Plan.(1)

    (b)        Form of Shareholder Services Plan.(4)

    

- ------------------------
(3)         Incorporated by reference; material provisions of this exhibit
            substantially similar to those of the corresponding exhibit in
            Pre-Effective Amendment No. 1 to the Registration Statement on
            Form N-1A of Warburg, Pincus Trust filed on June 14, 1995.
            (Securities Act File No. 33-58125)

(4)         Incorporated by reference; material provisions of this exhibit
            substantially similar to the corresponding of this exhibit in
            Post-Effective Amendment No. 10 to the Registration Statement on
            Form N-1A of Warburg, Pincus International Equity Fund, Inc. filed
            on September 22, 1995 (Securities Act File No. 33-27031)


<PAGE>C-3

Exhibit No.    Description of Exhibit
- -----------    ----------------------
   
    (c)        Form of Amended and Restated Distribution Plan.(5)

    (d)        Form of Distribution Agreement.(1)

    (e)        Rule 18f-3 Plan.(5)

  16           Schedule for Computation of Total Return Performance Quotation.

  17(a)        Financial Data Schedule relating to Common Shares.

    (b)        Financial Data Schedule relating to Advisor Shares.
    

Item 25.  Persons Controlled by or Under Common Control with
          Registrant
   
          Warburg, Pincus Counsellors, Inc. ("Warburg"), Registrant's
investment adviser, may be deemed a controlling person of Registrant because
it possesses or shares investment or voting power with respect to more than
25% of the outstanding securities of Registrant.  E.M. Warburg, Pincus & Co.,
Inc. ("EMW") controls Warburg through its ownership of a class of voting
preferred stock of Warburg.  John L. Furth, director of the Fund, and Lionel
I. Pincus, Chairman of the Board and Chief Executive Officer of EMW, may be
deemed to be controlling persons of the Fund because they may be deemed to
possess of share investment power over shares owned by clients of Warburg and
certain other entities.




- ------------------------
(5)         Incorporated by reference; material provisions of this exhibit
            substantially similar to those of the corresponding exhibit in
            Pre-Effective Amendment No. 1 to the Registration Statement on
            Form N-1A of Warburg, Pincus Japan Growth Fund, Inc., filed
            on December 18, 1995 (Securities Act File No. 33-63655).

(6)         Incorporated by reference to Opinion of Willkie Farr & Gallagher
            filed with Registrant's Rule 24f-2 Notice filed on December 19,
            1995.
    
(7)         Incorporated by reference to Post-Effective Amendment No. 1 to the
            Registration Statement on Form N-1A of Warburg, Pincus Managed
            Bond Trust, filed on February 28, 1995 (Securities Act File No.
            33-73672).


<PAGE>C-4

Item 26.  Number of Holders of Securities


                                        Number of Record Holders
          Title of Class                 as of November 30, 1995
          --------------                ------------------------
   
     Common Stock par value
     $.001 per share                              642

     Common Stock par value
     $.001 per share - Series 1                   0

     Common Stock par value
     $.001 per share - Series 2                   5
     (Advisor Shares)
    

Item 27.  Indemnification
   
          Registrant, officers and directors of Warburg, of Counsellors
Securities Inc. ("Counsellors Securities") and of Registrant are covered by
insurance policies indemnifying them for liability incurred in connection with
the operation of Registrant.  Discussion of this coverage is incorporated by
reference to Item 27 of Part C of Registrant's Registration Statement, filed
on July 21, 1995 (EDGAR Accession No. 899140-95-149).
    
Item 28.  Business and Other Connections of
          Investment Adviser
   
          Warburg is a wholly owned subsidiary of Warburg, Pincus Counsellors
G.P., acts as investment adviser to Registrant.  Warburg renders investment
advice to a wide variety of individual and institutional clients.  The list
required by this Item 28 of officers and directors of Warburg, together with
information as to their other business, profession, vocation or employment of
a substantial nature during the past two years, is incorporated by reference
to Schedules A and D of Form ADV filed by Warburg (SEC File No. 801-07321).
    
Item 29.  Principal Underwriter
   
          (a)  Counsellors Securities will act as distributor for Registrant.
Counsellors Securities currently acts as distributor for The RBB Fund, Inc.;
Warburg, Pincus Capital Appreciation Fund; Warburg, Pincus Cash Reserve Fund;
Warburg, Pincus Emerging Growth Fund; Warburg, Pincus Emerging Markets Fund;
Warburg, Pincus Fixed Income Fund;  Warburg, Pincus Global Fixed Income Fund;
Warburg, Pincus Institutional Fund, Inc.; Warburg, Pincus Intermediate
Maturity Government Fund; Warburg, Pincus International Equity Fund; Warburg,
Pincus Japan OTC Fund; Warburg, Pincus New York Intermediate Municipal Fund;
Warburg, Pincus New York Tax Exempt Fund; Warburg, Pincus Short-Term Tax-
Advantaged Bond Fund and Warburg, Pincus Trust.
    

















<PAGE>C-5

          (b)  For information relating to each director and officer of
Counsellors Securities, reference is made to Form BD (SEC File No. 15-654)
filed by Counsellors Securities under the Securities Exchange Act of 1934, as
amended.

          (c)  None.

Item 30.  Location of Accounts and Records

          (1)  Warburg, Pincus Post-Venture Capital Fund, Inc.
               466 Lexington Avenue
               New York, New York  10017-3147
               (Fund's Articles of Incorporation, By-laws and minute books)

          (2)  Warburg, Pincus Counsellors, Inc.
               466 Lexington Avenue
               New York, New York 10017-3147
               (records relating to its functions as investment adviser)

          (3)  Counsellors Funds Service, Inc.
               466 Lexington Avenue
               New York, New York  10017-3147
               (records relating to its functions as co-administrator)

          (4)  PFPC Inc.
               400 Bellevue Parkway
               Wilmington, Delaware  19809
               (records relating to its functions as co-administrator)

          (5)  Counsellors Securities Inc.
               466 Lexington Avenue
               New York, New York 10017-3147
               (records relating to its functions as distributor)

          (6)  PNC Bank, National Association
               Broad and Chestnut Streets
               Philadelphia, Pennsylvania 19101
               (records relating to its functions as custodian)

          (7)  State Street Bank and Trust Company
               225 Franklin Street
               Boston, Massachusetts 02110
               (records relating to its functions as shareholder servicing
               agent, transfer agent, dividend disbursing agent and custodian)






















<PAGE>C-6

Item 31.  Management Services

          Not applicable.

Item 32.  Undertakings
   
          (a)  Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the question of removal of a
director or directors of Registrant when requested in writing to do so by the
holders of at least 10% of Registrant's outstanding shares.  Registrant
undertakes further, in connection with the meeting, to comply with the
provisions of Section 16(c) of the 1940 Act relating to communications with
the shareholders of certain common-law trusts.

          (b)  Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's latest annual report to
shareholders, upon request and without charge.
    
















































<PAGE>C-7

                                  SIGNATURES
   

          Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant
has duly caused this Amendment to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of New
York and the State of New York, on the 26th day of December, 1995.
    
                              WARBURG, PINCUS POST-VENTURE CAPITAL FUND, INC.



                              By:/s/ Arnold M. Reichman
                                  Arnold M. Reichman
                                  President

ATTEST:


          Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:



Signature                     Title                 Date
- ---------                     -----                 ----
   
/s/  John L. Furth            Chairman of the       December 26, 1995
  John L. Furth               Board and Director

/s/  Arnold M. Reichman       President             December 26, 1995
  Arnold M. Reichman

/s/  Stephen Distler          Vice President        December 26, 1995
  Stephen Distler             and Chief Financial
                              Officer

/s/  Howard Conroy            Vice President,       December 26, 1995
  Howard Conroy               Treasurer and Chief
                              Accounting Officer

/s/  Richard N. Cooper        Director              December 26, 1995
  Richard N. Cooper

/s/  Donald J. Donahue        Director              December 26, 1995
  Donald J. Donahue


















<PAGE>C-8

Signature                     Title                 Date
- ---------                     -----                 ----

/s/  Jack W. Fritz            Director              December 26, 1995
  Jack W. Fritz

/s/  Thomas A. Melfe          Director              December 26, 1995
  Thomas A. Melfe

/s/  Alexander B. Trowbridge  Director              December 26, 1995
  Alexander B. Trowbridge

    





















































<PAGE>

                               INDEX TO EXHIBITS


Exhibit No.    Description of Exhibit
- -----------    ----------------------
   1           Articles of Incorporation.(1)

   2           By-Laws.(1)

   3           Not applicable.

   4           Forms of Share Certificates.(1)

   5           Form of Investment Advisory Agreement.(1)

   6           Distribution Agreement.(2)

   7           Not applicable.



- ------------------------
(1)         Incorporated by reference to Registrant's Pre-Effective Amendment
            No. 2 to its Registration Statement on Form N-1A, filed on
            September 22, 1995.

(2)         Contained in Exhibit No. 15 hereto.


<PAGE>

Exhibit No.    Description of Exhibit
- -----------    ----------------------

   8(a)        Form of Custodian Agreement with PNC Bank, National
               Association.(3)

    (b)        Form of Custodian Agreement with State Street Bank and Trust
               Company.(3)

   9(a)        Form of Transfer Agency Agreement.(3)

    (b)        Form of Counsellors Service Co-Administration Agreement.(3)

    (c)        Form of PFPC Co-Administration Agreement.(4)

    (d)        Form of Services Agreements.(5)

  10(a)        Consent of Willkie Farr & Gallagher, counsel to the Fund.

    (b)        Opinion of Willkie Farr & Gallagher, counsel to the Fund.(6)

  11           Consent of Coopers & Lybrand L.L.P., Independent Auditors.

  12           Not applicable.

  13           Form of Purchase Agreement.(1)

  14           Retirement Plans.(7)

  15(a)        Form of Shareholder Services and Distribution Plan.(1)

    (b)        Form of Shareholder Services Plan.(4)



- ------------------------
(3)         Incorporated by reference; material provisions of this exhibit
            substantially similar to those of the corresponding exhibit in
            Pre-Effective Amendment No. 1 to the Registration Statement on
            Form N-1A of Warburg, Pincus Trust filed on June 14, 1995.
            (Securities Act File No. 33-58125)

(4)         Incorporated by reference; material provisions of this exhibit
            substantially similar to the corresponding of this exhibit in
            Post-Effective Amendment No. 10 to the Registration Statement on
            Form N-1A of Warburg, Pincus International Equity Fund, Inc. filed
            on September 22, 1995 (Securities Act File No. 33-27031)


<PAGE>

Exhibit No.    Description of Exhibit
- -----------    ----------------------

    (c)        Form of Amended and Restated Distribution Plan.(5)

    (d)        Form of Distribution Agreement.(1)

    (e)        Rule 18f-3 Plan.(5)

  16           Schedule for Computation of Total Return Performance Quotation.

  17(a)        Financial Data Schedule relating to Common Shares.

    (b)        Financial Data Schedule relating to Advisor Shares.





- ------------------------
(5)         Incorporated by reference; material provisions of this exhibit
            substantially similar to those of the corresponding exhibit in
            Pre-Effective Amendment No. 1 to the Registration Statement on
            Form N-1A of Warburg, Pincus Japan Growth Fund, Inc., filed
            on December 18, 1995 (Securities Act File No. 33-63655).

(6)         Incorporated by reference to Opinion of Willkie Farr & Gallagher
            filed with Registrant's Rule 24f-2 Notice filed on December 19,
            1995.

(7)         Incorporated by reference to Post-Effective Amendment No. 1 to the
            Registration Statement on Form N-1A of Warburg, Pincus Managed
            Bond Trust, filed on February 28, 1995 (Securities Act File No.
            33-73672).




<PAGE>

                              CONSENT OF COUNSEL



                Warburg, Pincus Post-Venture Capital Fund, Inc.



           We hereby consent to being named in the Statement of Additional
Information included in Post-Effective Amendment No. 1 (the "Amendment") to
the Registration Statement on Form N-1A (Securities Act File No. 33-61225,
Investment Company Act File No. 811-07327) of Warburg, Pincus Post-Venture
Capital Fund, Inc. (the "Fund") under the caption "Auditors and Counsel" and
to the Fund's filing a copy of this Consent as an exhibit to the Amendment.







                                   Willkie Farr & Gallagher



December 22, 1995
New York, New York







































<PAGE>1





                      CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to  the inclusion in  this Post-Effective Amendment  No. 1 to  the
Registration Statement under the Securities Act of 1933 on Form N-1A ( No.
33-61225) of our report dated December 14, 1995 on our audit of the financial
statements and financial  highlights of  Warburg, Pincus Post-Venture Capital
Fund, Inc.  We  also  consent to  the  reference  to our  Firm  under  the
captions "Financial Highlights" and "Auditors and Counsel" in the filing.


/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
December 26, 1995














































<PAGE>1

Warburg Pincus Funds
Schedule 16 Calculations

Warburg Pincus Post-Venture Capital Fund
For the Period Inception to October 31, 1995

     Common Shares

          Aggregate Total Return With Waivers:

                    ((10,690-10,000)/10,000) = 6.90%

          Aggregate Total Return Without Waivers:

                    ((10,560-10,000)/10,000) = 5.60%

          Annualized Total Return With Waivers:

           ((10,690/10,000)[*GRAPHIC OMITTED-SEE FOOTNOTE BELOW]-1) = 109.18%

          Annualized Total Return Without Waivers:

            ((10,560/10,000)[*GRAPHIC OMITTED-SEE FOOTNOTE BELOW]-1) = 82.70%

     Series 2 Shares

          Aggregate Total Return With Waivers:

                    ((10,680-10,000)/10,000) = 6.80%

          Aggregate Total Return Without Waivers:

                    ((10,270-10,000)/10,000) = 2.70%

          Annualized Total Return With Waivers:

           ((10,680/10,000)[*GRAPHIC OMITTED-SEE FOOTNOTE BELOW]-1) = 107.02%

          Annualized Total Return Without Waivers:

           ((10,270/10,000)[*GRAPHIC OMITTED-SEE FOOTNOTE BELOW]-1) = 34.27%



- ------------------------
* - The preceding expression is being raised to the power of 1/.09041














<TABLE> <S> <C>

<ARTICLE> 6
<CIK> 0000948207
<NAME> WARBURG PINCUS POST-VENTURE CAPITAL FUND
<SERIES>
   <NUMBER> 001
   <NAME> COMMON SHARES
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          OCT-31-1995
<PERIOD-END>                               OCT-31-1995
<INVESTMENTS-AT-COST>                          3075347
<INVESTMENTS-AT-VALUE>                         3239788
<RECEIVABLES>                                   189888
<ASSETS-OTHER>                                  216699
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 3646375
<PAYABLE-FOR-SECURITIES>                        484782
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       136164
<TOTAL-LIABILITIES>                             620946
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                       2887516
<SHARES-COMMON-STOCK>                           283056
<SHARES-COMMON-PRIOR>                            10000
<ACCUMULATED-NII-CURRENT>                          356
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        (26884)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                        164441
<NET-ASSETS>                                   3025429
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                                 2675
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                    2319
<NET-INVESTMENT-INCOME>                            356
<REALIZED-GAINS-CURRENT>                       (26884)
<APPREC-INCREASE-CURRENT>                       164441
<NET-CHANGE-FROM-OPS>                           137913
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        2025697
<NUMBER-OF-SHARES-REDEEMED>                      18605
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         2925429
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                             1756
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  35673
<AVERAGE-NET-ASSETS>                           1600140
<PER-SHARE-NAV-BEGIN>                            10.00
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                            .69
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              10.69
<EXPENSE-RATIO>                                   1.65
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>

<TABLE> <S> <C>

<ARTICLE> 6
<CIK> 0000948207
<NAME> WARBURG PINCUS POST-VENTURE CAPITAL FUND
<SERIES>
   <NUMBER> 002
   <NAME> ADVISOR SHARES
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          OCT-31-1995
<PERIOD-END>                               OCT-31-1995
<INVESTMENTS-AT-COST>                          3075347
<INVESTMENTS-AT-VALUE>                         3239788
<RECEIVABLES>                                   189888
<ASSETS-OTHER>                                  216699
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 3646375
<PAYABLE-FOR-SECURITIES>                        484782
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                       136164
<TOTAL-LIABILITIES>                             620946
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                       2887516
<SHARES-COMMON-STOCK>                           283056
<SHARES-COMMON-PRIOR>                            10000
<ACCUMULATED-NII-CURRENT>                          356
<OVERDISTRIBUTION-NII>                               0
<ACCUMULATED-NET-GAINS>                        (26884)
<OVERDISTRIBUTION-GAINS>                             0
<ACCUM-APPREC-OR-DEPREC>                        164441
<NET-ASSETS>                                   3025429
<DIVIDEND-INCOME>                                    0
<INTEREST-INCOME>                                 2675
<OTHER-INCOME>                                       0
<EXPENSES-NET>                                    2319
<NET-INVESTMENT-INCOME>                            356
<REALIZED-GAINS-CURRENT>                       (26884)
<APPREC-INCREASE-CURRENT>                       164441
<NET-CHANGE-FROM-OPS>                           137913
<EQUALIZATION>                                       0
<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
<DISTRIBUTIONS-OTHER>                                0
<NUMBER-OF-SHARES-SOLD>                        2025697
<NUMBER-OF-SHARES-REDEEMED>                      18605
<SHARES-REINVESTED>                                  0
<NET-CHANGE-IN-ASSETS>                         2925429
<ACCUMULATED-NII-PRIOR>                              0
<ACCUMULATED-GAINS-PRIOR>                            0
<OVERDISTRIB-NII-PRIOR>                              0
<OVERDIST-NET-GAINS-PRIOR>                           0
<GROSS-ADVISORY-FEES>                             1756
<INTEREST-EXPENSE>                                   0
<GROSS-EXPENSE>                                  35673
<AVERAGE-NET-ASSETS>                              2432
<PER-SHARE-NAV-BEGIN>                            10.00
<PER-SHARE-NII>                                      0
<PER-SHARE-GAIN-APPREC>                            .68
<PER-SHARE-DIVIDEND>                                 0
<PER-SHARE-DISTRIBUTIONS>                            0
<RETURNS-OF-CAPITAL>                                 0
<PER-SHARE-NAV-END>                              10.68
<EXPENSE-RATIO>                                   2.15
<AVG-DEBT-OUTSTANDING>                               0
<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>


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