WYNSTONE FUND, L.L.C.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
FOR THE YEAR ENDED
DECEMBER 31, 1999
<PAGE>
WYNSTONE FUND, L.L.C.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1999
CONTENTS
Report of Independent Auditors.................................... 1
Statement of Assets, Liabilities and Members' Capital............. 2
Statement of Operations........................................... 3
Statement of Changes in Members' Capital - Net Assets............. 4
Notes to Financial Statements..................................... 5
Proxy Results (Unaudited)......................................... 13
Schedule of Portfolio Investments................................. 14
Schedule of Securities Sold, Not Yet Purchased.................... 17
Schedule of Written Options....................................... 18
<PAGE>
Report of Independent Auditors
To the Members of
Wynstone Fund, L.L.C.
We have audited the accompanying statement of assets, liabilities and members'
capital of Wynstone Fund, L.L.C. (the "Company"), including the schedules of
portfolio investments, securities sold, not yet purchased and written options as
of December 31, 1999, and the related statement of operations for the year then
ended, and the statement of changes in members' capital--net assets for the year
then ended and for the period from November 16, 1998 (commencement of
operations) to December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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, 1999, by
correspondence with the custodian and broker. 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 referred to above present fairly, in
all material respects, the financial position of Wynstone Fund, L.L.C. at
December 31, 1999, the results of its operations for the year then ended, and
the changes in its members' capital--net assets for the year then ended and for
the period from November 16, 1998 to December 31, 1998, in conformity with
accounting principles generally accepted in the United States.
February 11, 2000
-1-
<PAGE>
WYNSTONE FUND, L.L.C.
STATEMENT OF ASSETS, LIABILITIES AND MEMBERS' CAPITAL (IN THOUSANDS)
- --------------------------------------------------------------------------------
December 31, 1999
ASSETS
Cash $ 4,408
Investments in securities, at market (cost - $10,319) 10,008
Dividends receivable 11
Interest receivable 6
Other assets 21
---------
TOTAL ASSETS 14,454
---------
LIABILITIES
Securities sold, not yet purchased, at market (proceeds - $72) 93
Outstanding options written, at value (premiums - $254) 335
Due to broker 118
Management fee payable 12
Withdrawals payable 1,322
Payable to affiliate 68
Accrued expenses 144
---------
TOTAL LIABILITIES 2,092
---------
NET ASSETS $ 12,362
=========
MEMBERS' CAPITAL
Represented by:
Capital contributions $ 14,425
Capital withdrawals (1,344)
Accumulated net investment loss (311)
Accumulated net realized gain on investments 5
Accumulated net unrealized depreciation on investments (413)
---------
MEMBERS' CAPITAL - NET ASSETS $ 12,362
=========
The accompaning notes are an integral part of these financial statements.
-2-
<PAGE>
WYNSTONE FUND, L.L.C.
STATEMENT OF OPERATIONS (IN THOUSANDS)
- --------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31, 1999
INVESTMENT INCOME
Interest $ 81
Dividends 214
---------
295
---------
EXPENSES
OPERATING EXPENSES:
Administration fee 143
Professional fees 162
Accounting and investor services fees 128
Insurance expense 40
Board of Managers' fees and expenses 28
Custodian fees 16
Miscellaneous 15
---------
TOTAL OPERATING EXPENSES 532
---------
Interest expense 1
Dividends on securities sold, not yet purchased 1
---------
TOTAL EXPENSES 534
---------
NET INVESTMENT LOSS (239)
---------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
REALIZED GAIN (LOSS) ON INVESTMENTS:
Investment securities (465)
Purchased options 76
Written options 437
Securities sold, not yet purchased (48)
---------
NET REALIZED GAIN ON INVESTMENTS -
NET CHANGE IN UNREALIZED DEPRECIATION ON INVESTMENTS (553)
---------
NET REALIZED AND UNREALIZED LOSS (553)
---------
DECREASE IN MEMBERS' CAPITAL DERIVED FROM
INVESTMENT ACTIVITIES $ (792)
=========
The accompaning notes are an integral part of these financial statements.
-3-
<PAGE>
WYNSTONE FUND, L.L.C.
STATEMENT OF CHANGES IN MEMBERS' CAPITAL - NET ASSETS (IN THOUSANDS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
NOVEMBER 16, 1998
YEAR ENDED (COMMENCEMENT OF OPERATIONS)
DECEMBER 31, 1999 TO DECEMBER 31, 1998
<S> <C> <C>
FROM INVESTMENT ACTIVITIES
Net investment loss $ (239) $ (72)
Net realized gain on investments - 5
Net change in unrealized appreciation
(depreciation) on investments (553) 140
-------- --------
INCREASE (DECREASE) IN MEMBERS' CAPITAL
DERIVED FROM INVESTMENT ACTIVITIES (792) 73
MEMBERS' CAPITAL TRANSACTIONS
Capital contributions 3,750 10,675
Capital withdrawals (1,344) -
-------- --------
INCREASE IN MEMBERS' CAPITAL
DERIVED FROM CAPITAL TRANSACTIONS 2,406 10,675
MEMBERS' CAPITAL AT BEGINNING OF PERIOD 10,748 --
-------- --------
MEMBERS' CAPITAL AT END OF PERIOD $12,362 $10,748
======== ========
</TABLE>
The accompaning notes are an integral part of these financial statements.
-4-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION
Wynstone Fund, L.L.C. (the "Company") was organized as Wynstone
Partners, L.P. (the "Partnership") under the Delaware Revised Uniform
Limited Partnership Act on August 13, 1998. Effective July 1, 1999 the
Limited Partners of record as of May 12, 1999 elected to approve the
conversion of the Partnership to a Delaware limited liability company.
The Company is registered under the Investment Company Act of 1940 (the
"Act") as a closed-end, non-diversified management investment company.
The Company's term is perpetual unless the Company is otherwise
terminated under the terms of the Limited Liability Company Agreement
dated as of July 1, 1999.
The Company's investment objective is to achieve capital appreciation.
The Company pursues this objective by investing principally in equity
securities of U.S. companies engaged in the financial services
industry, but it may also invest up to 25% of the value of its total
assets in the securities of foreign issuers, including depository
receipts relating to foreign securities. Except during periods of
adverse market conditions in the financial services industry or in the
U.S. equity market generally, the Company will invest more than 25% of
the value of its total assets in issuers engaged in the financial
services industry. The Company's investments may include long and short
positions in equity securities, fixed-income securities, and various
derivatives, including options on securities and stock index options.
Responsibility for the overall management and supervision of the
operations of the Company is vested in the individuals who serve as the
Board of Managers of the Company (the "Board of Managers"). There are
four members of the Board of Managers and an "Adviser." CIBC
Oppenheimer Advisers, L.L.C. (the "Adviser") serves as the investment
adviser of the Company and is responsible for managing the Company's
investment activities pursuant to an Investment Advisory Agreement.
CIBC World Markets Corp. ("CIBC WM") (formerly CIBC Oppenheimer Corp.)
is the managing member and controlling person of the Adviser and KBW
Asset Management Inc. ("KBWAM") is a non-managing member of the
Adviser. Investment professionals employed by KBWAM will manage the
Company's investment portfolio on behalf of the Adviser under the
supervision of CIBC WM.
The acceptance of initial and additional capital contributions from
Members is subject to approval by the Board of Managers. The Company
may from time to time offer to repurchase interests pursuant to written
tenders by Members. Such repurchases will be made at such times and on
such terms as may be determined by the Board of Managers, in their
complete and exclusive discretion. The Adviser expects that generally
it will recommend to the Board of Managers that the Company repurchase
interests from Members twice each year effective at the end of the
second fiscal quarter and again at the end of the year.
-5-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENT - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Adviser to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying notes. The Adviser believes that the
estimates utilized in preparing the Company's financial statements are
reasonable and prudent; however, actual results could differ from these
estimates.
A. PORTFOLIO VALUATION
Securities transactions, including related revenue and expenses, are
recorded on a trade-date basis and dividends are recorded on the
ex-dividend date. 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
asked prices for securities sold 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 asked
prices (in the case of securities sold short) as reported by such
exchange. Listed options will be valued at their bid prices (or asked
prices in the case of listed options sold short) 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 asked prices in the case of
securities sold 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 Board of
Managers.
Debt securities will be valued in accordance with the procedures
described above, which with respect to such securities may include the
use of the valuations furnished by a pricing service which employs a
matrix to determine valuation for normal institutional size trading
units. The Board of Managers 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 Board of Managers 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>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENT - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATION (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
Company is determined. When such events materially affect the values of
securities held by the Company 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 Board of Managers.
B. INCOME TAXES
No provision for the payment of Federal, state or local income taxes on
the profits of the Company have been made. The Members are individually
liable for their share of the Company's income.
3. ADMINISTRATION FEE, RELATED PARTY TRANSACTIONS AND OTHER
CIBC WM provides certain administrative services to the Company
including, among other things, providing office space and other support
services. In exchange for such services, the Company pays CIBC WM a
monthly administration fee of .08333% (1% on an annualized basis) of
the Company's net assets determined as of the beginning of the month.
Payable to affiliate represents insurance premiums paid in th
amount of $67,769 paid on behalf of the Company by CIBC WM.
During the year ended December 31, 1999, CIBC WM earned no brokerage
commissions from portfolio transactions executed on behalf of the
Company. Keefe, Bruyette & Woods, Inc., an affiliated broker of KBWAM,
earned $14,853 in brokerage commissions from portfolio transactions
executed on behalf of the Company.
The Adviser will serve as the Special Advisory Member of the Company.
In such capacity, the Adviser will be entitled to receive an incentive
allocation (the "Incentive Allocation"), charged to the capital account
of each Member as of the last day of each allocation period, of 20% of
the amount by which net profits, if any, exceed the positive balance in
the Member's "loss recovery account." The Incentive Allocation will be
credited to the Special Advisory Account of the Adviser. During the
year ended December 31, 1999, there was no Incentive Allocation to the
Special Advisory Account.
Each member of the Board of Managers (a "Manager") who is not an
"interested person" of the Company, as defined by the Act, receives an
annual retainer of $5,000 plus a fee for each meeting attended.
Currently, no Manager is an "interested person" of the Company. All
Managers are reimbursed by the Company for all reasonable out-of-pocket
expenses incurred by them in performing their duties. For the year
ended, December 31, 1999, fees paid to the Board of
-7-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENT - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
3. ADMINISTRATION FEE, RELATED PARTY TRANSACTIONS AND OTHER (CONTINUED)
Managers (including meeting fees and a pro-rata annual retainer) and
expenses totaled $27,621.
The Chase Manhattan Bank serves as Custodian of the Company's assets.
PFPC Inc. serves as Investor Services and Accounting Agent to the
Company, 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 year ended December 31, 1999, amounted
to $24,203,847 and $18,933,608, respectively.
At December 31, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. At December 31, 1999, accumulated net unrealized depreciation
on investments was $413,132, consisting of $285,323 gross unrealized
appreciation and $698,455 gross unrealized depreciation.
Due to broker primarily represents receivables and payables from
unsettled security trades and proceeds from securities sold, not yet
purchased.
5. SHORT-TERM BORROWINGS
The Company has the ability to trade on margin and, in that connection,
borrow 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
Company to satisfy an asset coverage requirement of 300% of its
indebtedness, including amounts borrowed, measured at the time the
Company incurs the indebtedness. As of December 31, 1999, and for the
year then ended, the Company had no margin borrowings. The Company pays
interest on outstanding margin borrowings at an annualized rate of
LIBOR plus 0.875%. The Company 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
In the normal course of business, the Company may trade various
financial instruments and enter into various investment activities with
off-balance sheet risk. These financial instruments include forward
contracts, options and securities sold, not yet purchased. Generally,
these financial instruments represent future commitments to purchase or
sell other financial instruments at specific
-8-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENT - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATION OF CREDIT RISK (CONTINUED)
terms at future dates. Each of these financial instruments contains
varying degrees of off-balance sheet risk whereby changes in the market
value of the securities underlying the financial instruments may be in
excess of the amounts recognized in the statement of assets,
liabilities and members' capital.
The Company maintains cash in bank deposit accounts which, at times,
may exceed Federally insured limits. The Company has not experienced
any losses in such accounts and does not believe it is exposed to any
significant credit risk on cash.
Securities sold, not yet purchased represent obligations of the Company
to deliver specified securities and thereby creates a liability to
purchase such securities in the market at prevailing prices.
Accordingly, these transactions result in off-balance sheet risk as the
Company's ultimate obligation to satisfy the sale of securities sold,
not yet purchased may exceed the amount indicated in the statement of
assets, liabilities and members' capital.
The risk associated with purchasing an option is that the Company pays
a premium whether or not the option is exercised. Additionally, the
Company 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 -- $ -- 20 $ 4,060
Options purchased 28 69,384 -- --
Options closed (28) (69,384) -- --
Options expired -- -- (20) (4,060)
--------- --------- --------- --------
Options outstanding at
December 31, 1999 -- $ -- -- $ --
========= ========= ========= ========
</TABLE>
When the Company writes an option, the premium received by the Company
is recorded as a liability and is subsequently adjusted to the current
market value of the option written. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying
security or currency in determining whether the Company has realized a
gain or loss. In writing an option, the Company bears the market risk
of an unfavorable change in the price of the security, index or
currency underlying the written option.
-9-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENT - DECEMBER 31, 1999 (CONTINUED)
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK OR
CONCENTRATION OF CREDIT RISK (CONTINUED)
Exercise of an option written by the Company could result in the
Company selling or buying a security or currency at a price different
from the current market value.
Transactions in written options were as follows:
<TABLE>
<CAPTION>
CALL OPTIONS PUT OPTIONS
------------------------------ ---------------------------
NUMBER AMOUNT NUMBER AMOUNT
OF CONTRACTS OF PREMIUM OF CONTRACTS OF PREMIUM
------------ ---------- ------------ ----------
<S> <C> <C> <C> <C>
Beginning balance 29 $ 8,719 735 $ 116,014
Options written 2,803 897,184 3,194 949,277
Options closed (2,607) (755,534) (2,828) (782,725)
Options expired (120) (23,826) (831) (155,073)
Options split 132 -- 118 --
--------- --------- --------- ---------
Options outstanding at
December 31, 1999 237 $ 126,543 388 $ 127,493
========= ========= ========= =========
</TABLE>
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES
The Company maintains positions in a variety of financial instruments.
The following table summarizes the components of net realized and
unrealized gains from investment transactions:
GAINS/(LOSSES)
FOR THE YEAR ENDED
DECEMBER 31, 1999
Equity securities $ (973,714)
Equity options 75,073
Written options 345,487
----------
$ (553,154)
==========
-10-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
7. FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING PURPOSES (CONTINUED)
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 YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1999
----------------- ----------------------
ASSETS:
Equity options $ - $ 63,117
LIABILITIES:
Written options (334,962) (399,563)
Average market values presented above are based upon month-end market
values during the year ended December 31, 1999.
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:
<TABLE>
<CAPTION>
NOVEMBER 16, 1998
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------
<S> <C> <C>
Ratio of net investment loss to average net assets (1.73%) (8.39%)*
Ratio of operating expenses to average net assets 3.84% 13.39% *
Ratio of interest expense to average net assets 0.01% ---
Ratio of dividends on securities sold, not yet purchased
to average net assets 0.01% ---
Portfolio turnover 201.05% 10.75%
Total return ** (5.58%) (1.40%)
<FN>
* Annualized.
** Total return assumes a purchase of an interest in the Company on
the first day and a sale of the interest on the last day of the
period noted, before incentive allocation to the Special Advisory
Member, if any. Total returns for a period of less than a full
year are not annualized.
</FN>
</TABLE>
-11-
<PAGE>
WYNSTONE FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
9. SUBSEQUENT EVENT
On January 1, 2000, the Company received initial and additional capital
contributions from Members of approximately $1,300,000.
-12-
<PAGE>
WYNSTONE FUND, L.L.C.
RESULTS OF SPECIAL MEETING (UNAUDITED) - DECEMBER 31, 1999
- --------------------------------------------------------------------------------
The Partnership held a Special Meeting of the Limited Partners on June
25, 1999. The purpose of the meeting was to vote on proposals to
convert Wynstone Partners, L.P. from a Delaware limited partnership to
a Delaware limited liability company and to adopt the proposed Limited
Liability Company Agreement. A total of 21 partners, representing
$10,288,490 of interests in Wynstone Partners, L.P. and 67.78% of the
votes eligible to be cast at the Special Meeting, voted to approve the
conversion and adopt the Agreement. The Limited Partners also elected
four persons to serve as Managers of the Limited Liability Company and
ratified the selection of Ernst & Young LLP to serve as the independent
accountant for the Company for the year ending December 31, 1999. The
following provides information concerning the matters voted on at the
meeting:
I. PROPOSALS TO CONVERT WYNSTONE PARTNERS, L.P. FROM A DELAWARE
LIMITED PARTNERSHIP TO A DELAWARE LIMITED LIABILITY COMPANY AND TO
ADOPT THE PROPOSED LIMITED LIABILITY COMPANY AGREEMENT
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- -------------- ---------------
$ 10,288,490 $ 0 $ 0
Effective July 1, 1999, the conversion was completed
and the Partnership changed its name to Wynstone
Fund, L.L.C.
II. ELECTION OF MANAGERS OF LIMITED LIABILITY COMPANY
NOMINEE VOTES FOR VOTES WITHHELD
------- --------- --------------
JESSE H. AUSUBEL $ 3,859,471 $ 6,429,019
PAUL BELICA $ 3,859,471 $ 6,429,019
CHARLES F. BARBER $ 3,859,471 $ 6,429,019
THOMAS W. BROCK $ 3,859,471 $ 6,429,019
III. RATIFICATION OF ERNST & YOUNG LLP AS THE INDEPENDENT ACCOUNTANT OF
THE COMPANY
VOTES FOR VOTES AGAINST VOTES ABSTAINED
--------- -------------- ---------------
$ 10,288,490 $ 0 $ 0
-13-
<PAGE>
WYNSTONE FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - 80.96%
COMMERCIAL BANKS - CENTRAL U.S. - 3.36%
11,050 Cullen/Frost Bankers, Inc. (a) $ 284,537
7,700 Sterling Bancshares, Inc. 86,148
1,550 Texas Regional Bancshares, Inc. 44,950
-----------
415,635
-----------
COMMERCIAL BANKS - EASTERN U.S. - 12.79%
5,100 Banknorth Group, Inc. 136,425
1,330 M & T Bank Corp. 550,953
7,850 Summit Bancorp (a) 240,406
5,500 U.S. Trust Corp. 441,034
4,400 Wilmington Trust Corp. 212,300
-----------
1,581,118
-----------
COMMERCIAL BANKS - SOUTHERN U.S. - 14.07%
20,856 Amsouth Bancorporation 402,792
10,450 CCB Financial Corp. 455,233
2,900 Centura Banks, Inc. (a) 127,962
6,400 Colonial BancGroup, Inc. 66,400
14,900 First Tennessee National Corp. 424,650
13,550 Triangle Bancorp, Inc. 262,531
-----------
1,739,568
-----------
COMMERCIAL BANKS - WESTERN U.S. - 5.62%
2,250 City National Corp. 74,111
16,400 First Security Corp. (a) 418,708
2,750 UCBH Holdings, Inc. * 56,548
5,200 Westamerica Bancorp. 145,278
-----------
694,645
-----------
FINANCE - CREDIT CARD - 11.68%
1,000 American Express Co. 166,250
19,700 Capital One Financial Corp. (a) 949,304
3,600 Providian Financial Corp. 327,827
-----------
1,443,381
-----------
The accompanying notes are an integral part of these financial statements.
-14-
<PAGE>
WYNSTONE FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
COMMON STOCK - (CONTINUED)
INVESTMENT MANAGEMENT/ADVISORY SERVICES - 4.29%
20,450 Blackrock, Inc. * $ 351,495
7,200 Neuberger Berman, Inc. * 179,100
-----------
530,595
-----------
LIFE/HEALTH INSURANCE - 0.72%
3,900 Liberty Financial Companies, Inc. 89,456
-----------
MONEY CENTER BANKS - 3.43%
5,450 The Chase Manhattan Corp. 423,400
-----------
MULTI-LINE INSURANCE - 1.03%
5,300 Allstate Corp. 127,534
-----------
PROPERTY/CASUALTY INSURANCE - 0.32%
1,150 Travelers Property Casualty Corp. 39,388
-----------
S&L/THRIFTS - CENTRAL U.S. - 2.88%
18,584 Charter One Financial, Inc.(a) 355,419
-----------
S&L/THRIFTS - EASTERN U.S. - 2.73%
18,350 American Financial Holdings, Inc. * 230,531
3,100 Reliance Bancorp, Inc. 106,950
-----------
337,481
-----------
S&L/THRIFTS - WESTERN U.S. - 0.73%
3,500 Washington Mutual, Inc. 90,563
-----------
SUPER-REGIONAL BANKS - U.S. - 17.31%
10,000 Comerica, Inc.(a) 466,880
4,100 First Union Corp. 135,046
6,650 Firstar Corp. 140,481
7,800 FleetBoston Financial Corp. 271,541
12,000 Mellon Financial Corp. 408,756
6,450 PNC Bank Corp. 287,025
18,052 U.S. Bancorp 429,872
-----------
2,139,601
-----------
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
WYNSTONE FUND, L.L.C.
SCHEDULE OF PORTFOLIO INVESTMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
TOTAL COMMON STOCK (COST $10,319,103) $10,007,784
===========
TOTAL INVESTMENTS (COST $10,319,103) - 80.96% 10,007,784
OTHER ASSETS, LESS LIABILITIES - 19.04% 2,353,900
-----------
NET ASSETS - 100.00% $12,361,684
===========
(a) Partially or wholly held in a pledged account by the Custodian as collateral
for open written options.
* Non-income producing security.
The accompanying notes are an integral part of these financial statements.
-16-
<PAGE>
WYNSTONE FUND, L.L.C.
SCHEDULE OF SECURITIES SOLD, NOT YET PURCHASED
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
SHARES
SECURITIES SOLD, NOT YET PURCHASED - (0.75%)
DIVERSIFIED MANUFACTURING OPERATIONS - (0.75%)
600 General Electric Co. $(92,850)
---------
TOTAL SECURITIES SOLD, NOT YET PURCHASED
(PROCEEDS $71,962) $(92,850)
=========
The accompanying notes are an integral part of these financial statements.
-17-
<PAGE>
WYNSTONE FUND, L.L.C.
SCHEDULE OF WRITTEN OPTIONS
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
NUMBER OF
CONTRACTS
WRITTEN CALL OPTIONS - (1.66%)
COMMERCIAL BANKS - CENTRAL U.S. - (0.05%)
19 Fifth Third Bank, 02/19/00, $75.00 $ (5,700)
----------
COMMERCIAL BANKS - WESTERN U.S. - (0.11%)
50 Zions Bancorp, 04/22/00, $65.00 (13,125)
----------
FINANCE - CREDIT CARD - (0.76%)
10 American Express Co., 01/22/00, $140.00 (27,250)
66 Capital One Financial Corp., 03/18/00, $40.00 (66,825)
----------
(94,075)
----------
SUPER REGIONAL BANKS - U.S. - (0.74%)
32 Northern Trust, 01/22/00, $40.00 (44,400)
32 Northern Trust, 01/22/00, $42.50 (36,800)
28 Sun Trust Banks, Inc., 04/22/00, $70.00 (10,850)
----------
(92,050)
----------
TOTAL WRITTEN CALL OPTIONS (PREMIUMS $126,543) (204,950)
==========
WRITTEN PUT OPTIONS - (1.05%)
COMMERCIAL BANKS - EASTERN U.S. - (0.14%)
51 Summit Bancorp, 04/22/00, $30.00 (17,213)
----------
COMMERCIAL BANKS - SOUTHERN U.S. - (0.05%)
24 First Tennessee, 01/22/00, $30.00 (6,451)
----------
COMMERCIAL BANKS - WESTERN U.S. - (0.07%)
26 Westamerica Bancorp., 04/22/00, $30.00 (8,450)
----------
INVESTMENT BANKER/BROKER - (0.01%)
19 Goldman Sachs, 01/22/00, $75.00 (713)
----------
FINANCE - CREDIT CARD - (0.23%)
22 Providian Financial Corp., 03/18/00, $95.00 (28,875)
----------
The accompanying notes are an integral part of these financial statements.
-18-
<PAGE>
WYNSTONE FUND, L.L.C.
SCHEDULE OF WRITTEN OPTIONS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 1999
MARKET VALUE
NUMBER OF
CONTRACTS
WRITTEN PUT OPTIONS - (CONTINUED)
MONEY CENTER BANKS - (0.07%)
20 The Chase Manhattan Corp., 03/18/00, $75.00 $ (9,000)
----------
SUPER-REGIONAL BANKS - U.S. - (0.48%)
129 Firstar Corp., 06/17/00, $22.50 (45,150)
81 FleetBoston Financial Corp., 01/22/00, $35.00 (12,660)
16 PNC Bank Corp., 01/22/00, $42.50 (1,500)
----------
(59,310)
----------
TOTAL WRITTEN PUT OPTIONS (PREMIUMS $127,494) (130,012)
==========
TOTAL OPTIONS WRITTEN (PREMIUMS $254,037) $(334,962)
==========
The accompanying notes are an integral part of these financial statements.
-19-
