THE MALLARD FUND, INC.
Investments / March 31, 2000
(Showing Percentage of Total Value of Net Assets)
______________________________________________________________________________
Shares Value
COMMON STOCK - 0.6%
Broadcom Corporation 1,050 $ 255,019
Cisco Systems, Inc. 6,578 508,562
Fusion Medical Technologies 8,070 157,365
Kana Communications, Inc. 5,546 377,128
Seagate Technology, Inc. 2,243 138,505
Usinternetworking, Inc. 3,180 123,225
TOTAL COMMON STOCK (COST $100,839) $ 1,559,804
MUTUAL FUNDS - 54.5%
American Funds - EuroPacfic 298,143 $ 13,300,168
CI Emerging Markets Growth 337,662 25,854,792
Morgan Stanley Emerging Mar 957,238 19,939,277
Templeton Institutional Eme 1,381,082 16,614,416
Vanguard Extended Market In 304,217 12,059,148
Vanguard Institutional Inde 433,075 59,214,280
TOTAL MUTUAL FUNDS (COST $133,033,896) $ 146,982,081
LIMITED PARTNERSHIPS - 46.7% (a)
Accel Internet Fund III, L.P. $ 531,296
Adams Capital Management II, L.P. 239,406
Alloy Ventures 98, L.P. 3,660,859
Atlas Venture Fund IV, L.P. 2,254,722
Atlas Venture Fund V, L.P. 257,051
Audax Private Equity Fund, L.P. -
Austin Ventures VII, L.P. 259,405
Bain Capital Fund VI, L.P. 1,064,788
Bain Capital VI Coinvestment Fund L.P. 775,773
BC European Capital VI, L.P. 998,444
Berkshire Fund V, L..P. 118,234
Blackstone Capit 2,357,843
Bowman Offshore Founders Fund, L.P. 2,990,000
Bowman Technology Fund, L.P. 8,068,126
Brookside Capital Partners Fund, L.P. 2,806,306
Carlyle Asia Partners, L.P. 375,492
Centennial Fund VI, L.P. 1,295,392
CIBC Oppenheimer Emerging Markets Liquidatin 91,360
Code Hennessy & Simmons 524,774
ComVentures IV, LP 470,495
Delphi Ventures IV, L.P. 9,591,688
Doughty Number 6 920,899
Everest Capital Frontier, L.P. 5,995,670
Hicks, Muse, Tate & Furst Equity Fund IV, L. 5,340,056
Highfields Capital Ltd. 7,542,987
Hummer Winblad Venture Partners IV 1,404,438
Insight Capital Partners Cayman III, L.P. 1,742,727
J. H. Whitney Equity Partners III, L.P. 7,060,759
J. H. Whitney IV, L.P. 2,152,543
J. H. Whitney Mezzanine Fund, L.P. 699,015
J. W. Childs Equity Partners II, L.P. 1,034,146
Knightsbridge Integrated IV 2,653,879
Knightsbridge Integrated V 100,000
Knightsbridge Post Venture IV, L.P. 469,829
Lone Redwood, L.P. 5,799,547
Maverick Fund USA, Ltd. 7,056,258
Meritech Capital Partners 4,094,349
ML - Silver Lake Special Trust 155,000
Mohr, Davidow Ventures VI, L.P. 289,156
Morgenthaler Venture Partners V 2,500,354
Morgenthaler Partners VI 100,000
Oak Investment Partners IX 237,371
Pequot Technology Perennial Fund 5,933,308
Redpoint Ventures I, L.P. 784,735
Sankaty High Yield Partners, L.P. 882,900
Sevin Rosen Fund VI L.P. 911,436
Sevin Rosen Fund VII, L.P. 312,318
Spectrum Equity Investors III, L.P. 5,106,396
Summit Accelerator Fund, L.P. 93,767
Summit Ventures V, L.P. 1,872,630
T/A Atlantic & Pacific IV, L.P. 1,364,162
TCV III (Q), L.P. 6,262,524
TCV IV, L.P. 828,728
The Varde Fund IV-A, L.P. 529,355
Tiger Management 3,792,657
Weston Presidio Capital III, L.P. 1,054,656
Worldview Technology Partners III, L.P. 271,552
TOTAL LIMITED PARTNERSHIPS(COST 89,195,849)$ 126,081,561
FUND OF FUNDS - 3.9% (a)
Knightsbridge Integrated Holdings 3,000 $ 10,625,430
TOTAL INVESTMENTS (COST $224,492,654) $ 285,248,876
OTHER ASSETS AND LIABILITIES, NET-105.7% (15,431,580)
NET ASSETS - 100.00% $ 269,817,296
*Cost for federal income tax purposes at March 31, 2000 has not been
determined due to the Fund not having received tax information on all of
the Fund's investments in limited partnerships.
(a) See Note 8.
(b) Closed-end investment company.
The accompanying notes are an integral part of the financial statements.
The Mallard Fund, Inc.
Statement of Assets and Liabilities
For the Year Ended March 31, 2000
Assets:
Investments, at value (Cost $224,492,654) $ 285,248,876
Cash 283,864
Total Assets $ 285,532,740
Liabilities:
Bank loan $ 15,582,076
Other accrued expenses 133,368
Total Liabilities $ 15,715,444
Commitments (Note 8)
Net Assets $ 269,817,296
Net Assets consist of:
Common Stock, $0.001 par value
Authorized 100,000,000 shares;
11,883,910 shares
issued and outstanding $ 11,884
Paid-in capital 213,155,490
Contributed capital 21,218,750
Distributions in excess of net inves inc (25,373,357)
Accumulated net realized gain on inv 48,307
Net unrealized appreciation on investments 60,756,222
Net Assets $ 269,817,296
Net Asset Value Per Share
($269,817,296 / 11,883,910 shares) $ 22.70
The accompanying notes are an integral part of the financial statements.
The Mallard Fund, Inc.
Statement of Operations
For the Year Ended March 31, 2000
INVESTMENT INCOME
Income:
Interest Income $ 35,708
Dividend Income 5,960,080
Total Income $ 5,995,788
Expenses:
Investment consulting fees (Note $ 192,500
Investment management fees 20,867
Administration fee (Note 4) 73,994
Custodian fees (Note 4) 4,280
Legal fees 41,146
Audit fees 27,501
Directors fees and expenses 13,314
Insurance 2,821
Interest on bank loan 862,165
Miscellaneous expenses 8,374
Total Expenses $ 1,246,962
NET INVESTMENT INCOME $ 4,748,826
Net realized gain on investments dur 7,349,893
Net unrealized appreciation of inves 77,331,213
Net realized and unrealized g $ 84,681,106
NET INCREASE IN NET ASSETS RESULTING FROM $ 89,429,932
The accompanying notes are an integral part of the financial statements.
The Mallard Fund, Inc.
Statement of Cash Flows
For the Year Ended March 31, 2000
INCREASE (DECREASE) IN CASH FROM:
Operating Activities
Net increase in net assets from operations $ 89,429,932
Adjustments:
Increase in other acc exp 62,259
Decrease in pay for inv purchased (125,000)
Net realized and unrealized gain on inv (84,681,106)
Purchases of portfolio investments (181,399,339)
Proceeds from disposition of investments 116,984,950
Investment paydowns 1,165,001
Net decrease in cash $ (58,563,303)
Financing Activities
Increase in Bank loan $ 5,472,212
Dividends Paid (5,000,000)
CRAT Asset Transfer 55,628,268
CRUT I and CRUT II Contribution 2,133,930
Net increase in cash $ 58,234,410
Net decrease in cash (328,893)
Cash at beginning of year 612,757
Cash at end of year $ 283,864
Supplemental cash flow information:
Cash paid for interest $ 809,719
Non cash transfers $ 15,262,599
Appreciation on inv $ 77,331,213
The accompanying notes are an integral part of the financial statements.
The Mallard Fund, Inc.
Statement of Changes in Net Assets
Year ended Year ended
March 31, 2000 March 31, 1999
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 4,748,826 $779,018
Net realized gain loss on inv 7,349,893 (5,559,879)
Net increase in unrealized apprec 77,331,213 (12,594,371)
Net increase (decrease) in net assets$ 89,429,932 $(17,375,232)
Distributions to Shareholders from:
Net investment income $ (4,748,826) $ (779,018)
In excess of net investment (25,373,357) (23,912,337)
Total Distributions $ (30,122,183) $ (24,691,355)
Capital Transactions:
Capital Contribution $ 21,218,750 $ -
Proceeds from 1,828,352 shares - 19,691,354
Proceeds from 2,203,700 shares 25,122,184 -
Proceeds from CRAT assst transfer 55,628,268 -
Common stock reacquire (12,196,989) -
Proceeds from CRUT I purchase 1,872,647 -
Proceeds from CRUT II purchase 2,004,010 -
Net increase in net asstes $ 72,430,120 $ 19,691,354
NET ASSETS:
Beginning of Period 116,860,677 139,235,910
End of Period (including $269,817,296 $116,860,677
investment income of $25,373,357 and $23,912,337, respectively)
The accompanying notes are an integral part of the financial statements.
THE MALLARD FUND, INC.
Financial Highlights
For a share outstanding throughout each period.
For the Year For the Year For the Period
April 1, 1999 April 1, 1998 May 30, 1997# to
March 31, 2000 March 31, 1999 March 31, 1998
Net Asset Value-Begin of Pd $11.52 $16.75 $19.97**
Investment Operations:
Net investment income 0.44 0.09 0.97
Net realized and unreal gain13.54 (2.55) (0.59)
Total from invest operations 13.98 (2.46) 0.38
Distributions
From net income (0.44) (0.09) (0.97)
In excess of nii (2.36) (2.68) (0.05)
In excess of real gain 0 0 (0.54)
Return of capital 0 0 (2.04)
Total Distributions (2.80) (2.77) (3.60)
Net Asset Value-End of Pd $22.70 $11.52 $16.75
Total Return (a) 148.39%*** (12.18%) 0.85%(b)
Ratios (to average net assets)/ Supplemental Information
Expensses(excluding int) 0.25% 0.58% 1.06%*
Expenses(including int) 0.81% 1.23% 1.95%*
Net Investment income 3.10% 0.66% 5.05%*
Portfolio turnover 64.92% 26.98% 28.87%
Net Assets end of pd $269,817 $116,820 $139,236
Number of shares outstanding 11,883,910 10,140,988 8,312,636
Amount of bank loans outstanding
At end of the period $15,582 $10,109 $24,170
Average amount of bank loan outstanding
during the period $15,108 $13,699 $17,713
Amount of maximum month end bank loans
during the period $22,098 $24,745 $24,170
Average amount of bank loans per share $1.41 $1.35 $2.13
Weighted average interest rate of bank loans
during the period 5.74% 5.69% 6.04%
* Annualized
** Initial public offering price of $20.00 per share less offering expenses
of $0.03 per share.
*** Total return affected by asset donation. (See note 7)
# Commencement of Operations.
(a) Based on per share net asset value. Per share market price is not
readily determinable since fund shares are not currently sold to the public.
Total return assumes reinvestment of dividends at the most recent quarterly
net asset value and does not reflect brokerage commissions or initial
underwriting discounts.
(b) Total investment return has not been annualized.
The accompanying notes are an integral part of the financial statements.
________________________________________________
Deloitte & Touche LLP Telephone (412) 338-7200
2500 One PPG Place Facsimile (412) 338-7380
Pittsburgh, Pennsylvania, 15222-5401
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
The Mallard Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the
Mallard Fund, Inc., including the schedule of investments, as of March 31,
2000, and the related statements of operations and cash flows for the year
then ended, the statement of changes in net assets for each of the two years
in the period then ended, and the financial highlights for each of the two
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits. The financial highlights for the period ended March 31,
1998 were audited by other auditors, whose report thereon dated June 5, 1998,
expressed an unqualified opinion.
We concluded our audits in accordance with auditing standards generally
accepted in the United States of America. These standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free from 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 March 31,
2000, by correspondence with the custodian and limited partnerships. 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
the Mallard Fund, Inc. as of March 31, 2000, the results of its operations
and its cash flows for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the two years in the period then ended, in conformity with
accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
June 7, 20000
