TROON PARTNERS, L.P.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
PERIOD FROM FEBRUARY 27, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
<PAGE>
TROON PARTNERS, L.P.
FINANCIAL STATEMENTS
PERIOD FROM FEBRUARY 27, 1997 (COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
CONTENTS
Report of Independent Auditors............................................. 1
Statement of Assets, Liabilities and Partners' Capital..................... 2
Statement of Operations.................................................... 3
Statement of Changes in Partners' Capital - Net Assets..................... 4
Notes to Financial Statements.............................................. 5
Proxy Results (Unaudited).................................................. 12
Schedule of Portfolio Investments.......................................... 13
<PAGE>
[Graphic Omitted]
Ernst & Young LLP 787 Seventh Avenue Phone: 212 773 3000
New York, New York 10019
REPORT OF INDEPENDENT AUDITORS
To the Partners of
Troon Partners, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of Troon Partners, L.P., including the schedules of portfolio
investments, securities sold, not yet purchased, and written options, as of
December 31, 1997, and the related statements of operations and changes in
partners' capital - net assets for the period from February 27, 1997
(commencement of operations) to December 31, 1997. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence with
the custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Troon Partners, L.P. at
December 31, 1997, the results of its operations, and the changes in its
partners' capital - net assets for the period from February 27, 1997 to December
31, 1997, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
[GRAPHIC OMITTED]
New York, New York
February 9, 1998
-1-
Ernst & Young LLP is a member of Ernst & Young International, Ltd.
<PAGE>
TROON PARTNERS, L.P.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL (IN THOUSANDS)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
ASSETS
Investments in securities, at market
(identified cost - $80,394) $108,573
Due from broker 41
Due from affiliate 2
Dividends receivable 93
Organizational costs (net of accumulated amortization of $41) 195
Other assets 19
--------
TOTAL ASSETS 108,923
--------
LIABILITIES
Loan payable 3,188
Management fee payable 82
Accrued expenses 254
--------
TOTAL LIABILITIES 3,524
--------
NET ASSETS $105,399
========
PARTNERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions (net of syndications costs of $50) $ 77,200
Accumulated net investment loss (345)
Accumulated net realized gain on investments 365
Accumulated net unrealized appreciation on investments 28,179
--------
PARTNERS' CAPITAL - NET ASSETS $105,399
========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
TROON PARTNERS, L.P.
STATEMENT OF OPERATIONS (IN THOUSANDS)
- --------------------------------------------------------------------------------
PERIOD FROM FEBRUARY 27, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
INVESTMENT INCOME
Dividends $ 858
Interest 69
-------
927
-------
EXPENSES
OPERATING EXPENSES:
Management fee 683
Professional fees 220
Administration fees 134
Custodian fees 67
Amortization of organizational costs 41
Insurance expense 38
Individual General Partners' fees and expenses 27
Miscellaneous 10
-------
1,220
INTEREST EXPENSE 52
-------
TOTAL EXPENSES 1,272
-------
NET INVESTMENT LOSS (345)
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
REALIZED GAIN (LOSS) ON INVESTMENTS:
Investment securities 2,564
Purchased options (2,199)
-------
NET REALIZED GAIN ON INVESTMENTS 365
-------
NET UNREALIZED APPRECIATION ON INVESTMENTS 28,179
-------
NET REALIZED AND UNREALIZED GAIN 28,544
-------
INCREASE IN PARTNERS' CAPITAL DERIVED FROM
INVESTMENT ACTIVITIES $28,199
=======
The accompanying notes are an integral part of these financial statements.
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<PAGE>
TROON PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL - NET ASSETS (IN THOUSANDS)
- --------------------------------------------------------------------------------
PERIOD FROM FEBRUARY 27, 1997
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1997
FROM INVESTMENT ACTIVITIES
Net investment loss $ (345)
Net realized gain on investments 365
Net unrealized appreciation on investments 28,179
--------
Increase in partners' capital derived
from investment activities 28,199
PARTNERS' CAPITAL TRANSACTIONS
Capital contributions 77,250
Syndication costs (50)
--------
INCREASE IN PARTNERS' CAPITAL DERIVED
FROM CAPITAL TRANSACTIONS 77,200
PARTNERS' CAPITAL AT BEGINNING OF PERIOD 0
--------
PARTNERS' CAPITAL AT END OF PERIOD $105,399
========
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
1. ORGANIZATION
Troon Partners, L.P. (the "Partnership") was organized under the
Delaware Revised Uniform Limited Partnership Act on December 12, 1996.
The Partnership is registered under the Investment Company Act of 1940
(the "Act") as a closed-end, non-diversified management investment
company. The Partnership will operate until December 31, 2021 unless
further extended or sooner terminated as provided for in the Limited
Partnership Agreement (the "Agreement"), dated December 19, 1996, as
amended October 29, 1997 (see Proxy Results on page 12). The
Partnership's investment objective is to seek long-term capital
appreciation. The Partnership pursues this objective by investing
principally in equity securities of publicly traded U.S. companies. The
Partnership may also invest in equity securities of foreign issuers,
bonds, options and other fixed-income securities of U.S. issuers.
There are four "Individual General Partners" and a "Manager." The
Manager is Troon Management, L.L.C. which is a joint venture between
CIBC Oppenheimer Corp. (formerly Oppenheimer & Co., Inc.) and Mark
Asset Management Corporation ("MAMC"). Investment professionals at MAMC
manage the Partnership's investment portfolio on behalf of the Manager
under CIBC Oppenheimer Corp.'s ("CIBC Opco") supervision.
The acceptance of initial and additional contributions is subject to
approval by the Manager. The Partnership may from time to time offer to
repurchase interests pursuant to written tenders by Partners. Such
repurchases will be made at such times and on such terms as may be
determined by the Individual General Partners, in their complete and
exclusive discretion. Beginning in 1998, the Manager expects that
generally it will recommend to the Individual General Partners that the
Partnership repurchase interests from Partners once in each year
effective as of the end of each such year.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Manager to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The Manager believes that the
estimates utilized in preparing the Partnership's financial statements
are reasonable and prudent; however, actual results could differ from
these estimates.
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<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997 (CONTINUED)
- --------------------------------------------------------------------------------
a. PORTFOLIO VALUATION
Securities transactions, including related revenue and expenses,
are recorded on a trade-date basis and dividends are recorded on
an ex-dividend date basis. Interest income is recorded on the
accrual basis.
Domestic exchange traded or NASDAQ listed equity securities will
be valued at their last composite sale prices as reported on the
exchanges where such securities are traded. If no sales of such
securities are reported on a particular day, the securities will
be valued based upon their composite bid prices for securities
held long, or their composite ask prices for securities held
short, as reported by such exchanges. Securities traded on a
foreign securities exchange will be valued at their last sale
prices on the exchange where such securities are primarily traded,
or in the absence of a reported sale on a particular day, at their
bid prices (in the case of securities held long) or ask prices (in
the case of securities held short) as reported by such exchange.
Listed options will be valued using last sales prices as reported
by the exchange with the highest reported daily volume for such
options or, in the absence of any sales on a particular day, at
their bid prices as reported by the exchange with the highest
volume on the last day a trade was reported. Other securities for
which market quotations are readily available will be valued at
their bid prices (or ask prices in the case of securities held
short) as obtained from one or more dealers making markets for
such securities. If market quotations are not readily available,
securities and other assets will be valued at fair value as
determined in good faith by, or under the supervision of, the
Individual General Partners.
Debt securities will be valued in accordance with the procedures
described above, which with respect to such securities may include
the use of valuations furnished by a pricing service which employs
a matrix to determine valuation for normal institutional size
trading units. The Individual General Partners will periodically
monitor the reasonableness of valuations provided by any such
pricing service. Debt securities with remaining maturities of 60
days or less will, absent unusual circumstances, be valued at
amortized cost, so long as such valuation is determined by the
Individual General Partners to represent fair value.
All assets and liabilities initially expressed in foreign
currencies will be converted into U.S. dollars using foreign
exchange rates provided by a pricing service compiled as of 4:00
p.m. London time. Trading in foreign securities generally is
completed, and the values of such securities are determined, prior
to the close of securities markets in the U.S. Foreign exchange
rates are also determined prior to such close.
-6-
<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997 (CONTINUED)
- --------------------------------------------------------------------------------
On occasion, the values of such securities and exchange rates may
be affected by events occurring between the time such values or
exchange rates are determined and the time that the net asset
value of the Partnership is determined. When such events
materially affect the values of securities held by the Partnership
or its liabilities, such securities and liabilities will be valued
at fair value as determined in good faith by, or under the
supervision of, the Individual General Partners.
b. PARTNERSHIP EXPENSES
The expenses incurred by the Partnership in connection with its
organization, which were $236,274, are being amortized over a 60
month period beginning with the commencement of operations,
February 27, 1997.
Syndication costs totaling $50,000 related to the Partnership's
initial offering have been charged directly to the capital
accounts of the limited partners of record as of April 30, 1997.
c. INCOME TAXES
No federal, state or local income taxes will be provided on the
profits of the Partnership since the partners are individually
liable for their share of the Partnership's income.
3. MANAGEMENT FEE, RELATED PARTY TRANSACTIONS AND OTHER
CIBC Opco provides certain management and administrative services to
the Partnership including, among other things, providing office space
and other support services to the Partnership. In exchange for such
services, the Partnership pays CIBC Opco a monthly management fee of
.08333% (1% on an annualized basis) of the Partnership's net assets
determined as of the beginning of the month, excluding assets
attributable to the Manager's capital account.
During the period ended December 31, 1997, CIBC Opco earned $10,500 in
brokerage commissions from portfolio transactions executed on behalf of
the Partnership.
At the end of the twelve month period following the admission of a
limited partner to the Partnership, and generally at the end of each
fiscal year thereafter, the Manager is entitled to an incentive
allocation of 20% of net profits, if any, that have been credited to
the
-7-
<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997 (CONTINUED)
- --------------------------------------------------------------------------------
capital account of such limited partner during such period. The
incentive allocation will be charged to a limited partner only to the
extent that cumulative net profits with respect to such limited partner
through the close of any period exceeds the highest level of cumulative
net profits with respect to such limited partner through the close of
any prior period. There was no incentive allocation for the period
ended December 31, 1997.
Each Independent Individual General Partner, who is not an "interested
person" of the Partnership, as defined by the Act, receives an annual
retainer of $5,000 plus a fee for each meeting attended. Any Individual
General Partner who is an "interested person" does not receive any
annual or other fees from the Partnership. All Individual General
Partners are reimbursed by the Partnership for all reasonable
out-of-pocket expenses incurred by them in performing their duties. For
the period from February 27, 1997 to December 31, 1997, fees paid to
the Individual General Partners (including meeting fees and the annual
retainer) and expenses totaled $26,572. One Individual General Partner,
who is an "interested person" of the Partnership holds a limited
partnership interest in the Partnership.
Morgan Stanley Trust Company serves as Custodian of the Partnership's
assets.
PFPC Inc. serves as Administrator and Accounting Agent to the
Partnership, and in that capacity provides certain accounting,
recordkeeping, tax and investor related services.
4. SECURITIES TRANSACTIONS
Aggregate purchases and sales of investment securities, excluding
short-term securities, for the period from February 27, 1997 to
December 31, 1997, amounted to $123,074,401 and $47,346,578,
respectively.
At December 31, 1997, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see Schedule of Portfolio Investments). At December 31, 1997,
accumulated net unrealized appreciation on investments was $28,178,859,
consisting of $29,658,068 gross unrealized appreciation and $1,479,209
gross unrealized depreciation.
Due from broker primarily represents receivables and payables from
unsettled security trades.
-8-
<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997 (CONTINUED)
- --------------------------------------------------------------------------------
5. SHORT-TERM BORROWINGS
The Partnership has the ability to trade on margin and, in that
connection, borrow funds from brokers and banks for investment
purposes. Trading in equity securities on margin involves an initial
cash requirement representing at least 50% of the underlying security's
value with respect to transactions in U.S. markets and varying
percentages with respect to transactions in foreign markets. The Act
requires the Partnership to satisfy an asset coverage requirement of
300% of its indebtedness, including amounts borrowed, measured at the
time the Partnership incurs the indebtedness. As of December 31, 1997,
the Partnership had outstanding margin borrowings of $3,188,472. The
Partnership pays interest on outstanding margin borrowings at an
annualized rate of LIBOR plus .875%. The Partnership pledges securities
as collateral for the margin borrowings, which are maintained in a
segregated account held by the Custodian.
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATIONS OF CREDIT RISK
The risk associated with purchasing an option is that the Partnership
pays a premium whether or not the option is exercised. Additionally,
the Partnership bears the risk of loss of premium and change in market
value should the counterparty not perform under the contract. Put and
call options purchased are accounted for in the same manner as
investment securities.
Transactions in purchased options were as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------------ ------------------------------
NUMBER NUMBER
OF CONTRACTS COST OF CONTRACTS COST
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Beginning balance -- $ 0 -- $ 0
Options purchased 14,126 12,569,092 14,412 10,740,990
Options closed (12,790) (10,990,373) (13,338) (9,905,406)
Expired options (226) (267,054) (418) (268,697)
-------- ------------ ------- -----------
Options outstanding at
December 31, 1997 1,110 $ 1,311,665 656 $ 566,887
========= ============= ======== ===========
</TABLE>
-9-
<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997 (CONTINUED)
- --------------------------------------------------------------------------------
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES
The Partnership maintains positions in a variety of financial
instruments. The following table summarizes the components of net
realized and unrealized gains from investment transactions:
NET GAINS / (LOSSES)
FOR THE PERIOD ENDED
DECEMBER 31, 1997
--------------------
Equity securities $ 30,557,274
Equity options ( 366,788)
Equity index options ( 1,646,649)
------------
$ 28,543,837
============
The following table presents the market values of derivative financial
instruments and the average market values of those instruments:
AVERAGE MARKET VALUE
MARKET VALUE AT FOR THE PERIOD ENDED
DECEMBER 31, 1997 DECEMBER 31, 1997
----------------- ---------------------
ASSETS:
Equity options $1,940,190 $964,800
Equity index options 121,550 167,388
Average market values presented above are based upon month-end market
value during the period ended December 31, 1997.
-10-
<PAGE>
TROON PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1997 (CONTINUED)
- --------------------------------------------------------------------------------
8. SELECTED FINANCIAL RATIOS AND OTHER SUPPLEMENTAL INFORMATION
The following represents the ratios to average net assets and other
supplemental information for the period indicated:
FEBRUARY 27, 1997
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1997
-----------------
Ratio of net investment loss to average net assets (0.49%)*
Ratio of operating expenses to average net assets 1.73%*
Ratio of interest expense to average net assets 0.07%*
Portfolio turnover rate 58.73%
Average commission rate paid $0.0566**
Total return 37.60%***
Average debt ratio 1.06%
* Annualized.
** Average commission rate paid on purchases and sales of investment
securities held long.
*** Total return assumes a purchase of a Limited Partnership interest
in the Partnership on the first day and a sale of the Partnership
interest on th last day of the period noted, before incentive
allocation to the Manager, if any. Total returns for a period of
less than a full year are not annualized.
9. SUBSEQUENT EVENT
Effective January 1, 1998, the Partnership received additional
Limited Partner capital contributions of approximately $6,370,000.
In February, 1998, the Individual General Partners determined that the
Partnership will make an offer to repurchase up to $25,000,000 in
interests in the Partnership, effective as of March 31, 1998.
-11-
<PAGE>
TROON PARTNERS, L.P.
PROXY RESULTS (UNAUDITED) - DECEMBER 31, 1997
- --------------------------------------------------------------------------------
On September 30, 1997, a Special Meeting of the Partners of the
Partnership was held to approve a proposed amendment to the Limited
Partnership Agreement which authorized the Manager to continue to
provide investment advice and management to the Partnership upon the
consummation of the acquisition of Oppenheimer & Co., Inc. by CIBC
Wood Gundy Securities Corp. A total of 253 Partners, representing
$55,543,862 of interests in the Partnership and 65.8% of the votes
eligible to be cast at the Special Meeting voted to approve the
amended Limited Partnership Agreement as follows:
FOR AGAINST ABSTAIN
--------- ------- ---------
53,297,562 837,310 1,408,990
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<PAGE>
TROON PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS
DECEMBER 31, 1997
MARKET VALUE
SHARES
COMMON STOCKS - 99.04%
APPLICATIONS SOFTWARE - .27%
6,793 Intuit, Inc. * $ 280,211
-----------
BANKING - REGIONAL - 2.38%
7,403 Wells Fargo & Co.(a) 2,512,860
-----------
BEVERAGES NON-ALCOHOLIC - 2.09%
33,092 Coca-Cola Co. 2,206,839
-----------
BROADCASTING - 1.68%
33,124 Grupo Televisa S.A. - Sponsored GDR* 1,281,501
71,536 TCI Satellite Entertainment, Inc., Class A* 491,810
-----------
1,773,311
-----------
BUILDING - RESIDENTIAL/COMMERCIAL - 1.21%
59,100 Lennar Corp. 1,274,373
-----------
CABLE TV - 24.12%
21,381 Cablevision Systems Corp., Class A* 2,047,231
52,565 Comcast Corp., Class A 1,675,509
99,239 Comcast Corp., Special Class A 3,132,281
18,052 Comcast UK Cable Partners, Ltd., Class A* 170,375
96,848 Cox Communications, Inc., Class A* 3,880,021
77,440 HSN, Inc. * 3,988,160
161,828 Tele-Communications Liberty Media Group.,
Inc., Series A* 5,866,265
166,831 Tele-Communications-TCI Group,
Series A* 4,660,924
-----------
25,420,766
-----------
CASINO HOTELS - 1.52%
70,687 Mirage Resorts, Inc.* 1,608,129
-----------
CHEMICALS - DIVERSIFIED - 1.14%
28,490 Monsanto Co. 1,196,580
-----------
The accompanying notes are an integral part of these financial statements.
-13-
<PAGE>
TROON PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
MARKET VALUE
SHARES
COMMON STOCKS - (CONTINUED)
COMMERCIAL SERVICES - 3.63%
111,362 Cendant Corp.* $ 3,828,075
-----------
COMMERCIAL SERVICES - FINANCE - 1.07%
45,816 Crescent Operating, Inc. * 1,122,492
-----------
COMMUNICATIONS SOFTWARE - .02%
17,543 General Magic, Inc.* 24,121
-----------
COMPUTER SOFTWARE - 6.24%
43,761 Microsoft Corp. * 5,656,109
8,458 SAP AG - Sponsored ADR 921,846
-----------
6,577,955
-----------
COMPUTERS - MICRO - 4.48%
56,232 Dell Computer Corp.* 4,723,488
-----------
DIVERSIFIED MANUFACTURING OPERATIONS - 2.67%
95,440 CBS Corp. 2,809,563
-----------
FINANCE - CREDIT CARDS - 2.48%
29,235 American Express Co. (a) 2,609,224
-----------
FINANCIAL GUARANTEE INSURANCE - 2.88%
45,699 MGIC Investment Corp. 3,038,984
-----------
GOLD MINING - .03%
12,186 Echo Bay Mines Ltd. 29,709
-----------
HOTELS & MOTELS - 2.87%
154,369 Host Marriott Corp.* 3,029,492
-----------
INTERNET CONTENT - .88%
36,917 At Home Corp., Series A* 927,540
-----------
The accompanying notes are an integral part of these financial statements.
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<PAGE>
TROON PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
MARKET VALUE
SHARES
COMMON STOCKS - (CONTINUED)
INTERNET SOFTWARE - .34%
11,834 Excite, Inc.* $ 355,020
-----------
INVESTMENT COMPANIES - 2.98%
110,866 Telecom-TCI Ventures Group, Series A* 3,138,949
-----------
MULTIMEDIA - 4.12%
90,118 News Corp. Ltd. - Sponsored ADR 2,010,803
37,676 Time Warner, Inc. (a) 2,335,912
-----------
4,346,715
-----------
OIL COMPANIES - EXPLORATION & PRODUCTION - 2.58%
93,611 Pioneer Natural Resources, Co. 2,714,719
-----------
RADIO - .31%
23,054 Grupo Radio Centro S.A. de C.V. - Sponsored ADR 328,520
-----------
REAL ESTATE INVESTMENT/MANAGEMENT - 1.04%
46,375 LNR Property Corp. 1,095,609
-----------
REAL ESTATE INVESTMENT TRUST - HOTEL/RESTAURANT - 4.90%
89,283 Starwood Lodging Trust 5,167,254
-----------
REAL ESTATE INVESTMENT TRUST - OFFICE PROPERTY - 9.41%
104,748 Boston Properties, Inc. 3,463,283
153,886 Crescent Real Estate Equities Company 6,059,261
12,375 Equity Office Properties Trust 390,592
-----------
9,913,136
-----------
REAL ESTATE INVESTMENT TRUST - SHOPPING CENTERS - 4.99%
112,075 Vornado Realty Trust 5,260,576
-----------
RETAIL - DISCOUNT - .82%
21,818 Wal-Mart Stores, Inc. 860,458
-----------
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
TROON PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
MARKET VALUE
SHARES COMMON STOCKS - (CONTINUED)
RETAIL - RESTAURANTS - 2.79%
44,439 Host Marriott Services Corp.* $ 661,030
47,842 McDonald's Corp. 2,284,456
------------
2,945,486
------------
SATELLITE TELECOMMUNICATIONS - 2.86%
32,615 Globalstar Telecommunications Ltd.* 1,602,212
66,113 Loral Space and Communications Ltd.*(a) 1,417,331
------------
3,019,543
------------
TELECOMMUNICATIONS EQUIPMENT - .24%
14,051 NextLevel Systems, Inc.* 251,162
------------
TOTAL COMMON STOCKS (COST $76,585,164) 104,390,859
============
PREFERRED STOCKS - 2.01%
MULTIMEDIA - 2.01%
106,707 News Corp. Ltd. - Sponsored ADR Preferred 2,120,802
------------
TOTAL PREFERRED STOCKS (COST $1,930,826) 2,120,802
============
NUMBER OF
CONTRACTS
CALL OPTIONS - 1.70%
AIRLINES - .24%
176 UAL Corp., 01/17/98, $80.00 257,400
------------
BANKING - REGIONAL - .39%
24 Wells Fargo & Co., 01/17/98, $250.00 215,100
24 Wells Fargo & Co., 01/17/98, $260.00 193,200
------------
408,300
------------
BROADCASTING SERVICE/PROGRAMMING - .04%
44 Grupo Televisa S.A.- Sponsored GDR,
01/17/98, $30.00 37,950
------------
The accompanying notes are an integral part of these financial statements.
-16-
<PAGE>
TROON PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
NUMBER OF MARKET VALUE
CONTRACTS
CALL OPTIONS - (CONTINUED)
CABLE TV - .28%
176 HSN, Inc., 01/17/98, $35.00 $ 297,000
-----------
COMMERCIAL SERVICES - .12%
88 Cendant Corp., 01/17/98, $20.00 124,300
-----------
COMPUTER SOFTWARE - .09%
45 Microsoft Corp., 01/17/98, $110.00 97,875
-----------
FINANCE - CREDIT CARDS - .03%
39 American Express Co., 01/17/98, $80.00 35,588
-----------
MEDICAL - DRUGS - .16%
96 Pfizer, Inc., 01/17/98, $60.00 142,800
24 Pfizer, Inc., 01/17/98, $65.00 24,000
-----------
166,800
-----------
REAL ESTATE INVESTMENT TRUST - HOTEL/RESTAURANT - .25%
88 Starwood Lodging Trust, 01/17/98, $50.00 69,300
154 Starwood Lodging Trust, 02/21/98, $45.00 196,350
-----------
265,650
-----------
RETAIL - RESTAURANTS - .10%
132 McDonald's Corp., 01/17/98, $40.00 102,300
-----------
TOTAL CALL OPTIONS (COST $1,311,665) 1,793,163
===========
PUT OPTIONS - .26%
ATHLETIC FOOTWEAR - .05%
88 Nike, Inc., 01/17/98, $45.00 50,600
-----------
The accompanying notes are an integral part of these financial statements.
-17-
<PAGE>
TROON PARTNERS, L.P.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1997
NUMBER OF MARKET VALUE
CONTRACTS
PUT OPTIONS - (CONTINUED)
COMPUTER SOFTWARE - .02%
18 Avant! Corp., 01/17/98, $25.00 $ 15,300
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ELECTRONIC COMPONENTS - SEMICONDUCTORS - .02%
44 Intel Corp., 01/17/98, $75.00 24,750
------------
OIL COMPANIES - INTEGRATED - .02%
44 Texaco, Inc., 01/17/98, $60.00 23,650
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OIL & GAS DRILLING - .03%
44 Diamond Offshore Drilling, Inc., 01/17/98, $50.00 12,377
44 Rowan Companies, Inc., 01/17/98, $35.00 20,350
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32,727
------------
STOCK INDEX - .12%
374 S&P 100 Index, 01/17/98, $440.00 121,550
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TOTAL PUT OPTIONS (COST $566,887) 268,577
============
TOTAL INVESTMENTS (COST $80,394,542) - 10 108,573,401
============
OTHER ASSETS, LESS LIABILITIES - (3.01%) (3,174,540)
NET ASSETS - 100.00% $105,398,861
============
(a) Partially held in a pledged account by the Custodian as collateral for
borrowings.
* Non-income Producing Security
The accompanying notes are an integral part of these financial statements.
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