SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE TO
(RULE 14D-100)
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
PW TECHNOLOGY PARTNERS, L.P.
(Name of Issuer)
PW TECHNOLOGY PARTNERS, L.P.
(Name of Person(s) Filing Statement)
PARTNERSHIP INTERESTS
(Title of Class of Securities)
N/A
(CUSIP Number of Class of Securities)
Mark D. Goldstein, Esq.
c/o PW Fund Advisor, L.L.C.
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
(212) 713-2000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Stuart H. Coleman, Esq.
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038
(212) 806-5400
February 23, 2000
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
- --------------------------------------------- ---------------------------------
Transaction Valuation: $100,000,000(a) Amount of Filing Fee: $20,000(b)
- --------------------------------------------- ---------------------------------
(a) Calculated as the aggregate maximum purchase price for partnership
interests.
(b) Calculated at 1/50th of 1% of the Transaction Valuation.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-1l(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: ________________________
Form or Registration No.: ______________________
Filing Party: __________________________________
Date Filed: ____________________________________
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[x] issuer tender offer subject to Rule 13e-4.
[ ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
ITEM 1. SUMMARY TERM SHEET.
As we said we would in your Partnership's offering documents, we will
buy your partnership interests at their estimated net asset value (that is, the
estimated value of the Partnership's assets minus its liabilities, multiplied by
the proportionate interest in the Partnership you desire to sell). This offer
will remain open until midnight on March 22, 2000. Estimated net asset value
will be calculated for this purpose on March 31, 2000.
To make sure we have calculated net asset value correctly, we will
check it during the Partnership's audit for calendar year 2000, which we expect
will be completed in February 2001. If you tender your entire interest in the
Partnership, we will pay you in cash by April 10, 2000, 95% of our calculation
of the estimated net asset value as of March 31, 2000. We will owe you the
balance, for which we will give you a promissory note that, if you have a
PaineWebber account, will be included in your PaineWebber account. If you do not
have a PaineWebber account, the note will be held for you by the Partnership's
Administrator, PFPC Inc. If you tender part of your interest, leaving a
remainder at least equal to $125,000 ($25,000 for certain eligible investors who
are identified in the Partnership's Confidential Memorandum), we will pay all
your proceeds in cash by April 10th. We will obtain the cash to pay you, either
from cash on hand, selling portfolio securities or through borrowings (which we
do not intend to do).
Following this summary is a formal notice of our offer to purchase
your partnership interests. Our offer remains open to you until midnight on
March 22, 2000. Until this time, you have the right to change your mind and
withdraw your partnership interests from consideration for purchase. If we do
not accept your interests by midnight, March 22, 2000, you may still withdraw
your partnership interests at any time after April 18, 2000, assuming your offer
has not been accepted. Please note that tendering your partnership interests may
trigger the payment by you of a performance bonus to the Partnership's manager
for managing the Partnership's assets.
If you would like us to purchase your partnership interests, you
should mail a Letter of Transmittal (the last page of the letter will suffice),
attached to this document as Exhibit C, to PFPC Inc. at P.O. Box 358, Claymont,
Delaware 19703, or fax it to PFPC Inc. at (302) 791-3225 or (302) 791-2386, so
that it is received before midnight, March 22, 2000. If you choose to fax the
Letter of Transmittal, you should mail the original last page of the Letter of
Transmittal to PFPC Inc. promptly after you fax it (although the original page
does not have to be received before midnight, March 22, 2000). Of course, the
value of your partnership interests is likely to change between January 31st
(the last time estimated net asset value was calculated) and February 29th (the
next time it will be calculated) and March 31st, when the value of your
investment will be determined for purposes of calculating your purchase price.
If you would like to obtain the estimated net asset value of your partnership
interests, which we calculate monthly based on the information we receive from
the managers of the investment funds in which we invest, you may contact PFPC
Inc., at (877) 431-1973 or at the address listed above, Monday through Friday,
except holidays, during normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern
Time).
Please note that just as you have the right to withdraw your
partnership interests, we have the right to cancel, amend or postpone this offer
at any time before midnight, March 22, 2000. Also realize that although the
tender offer expires on March 22, 2000, you remain a partner in the Partnership
until March 31, 2000, when the estimated net asset value of your partnership
interests is calculated.
ITEM 2. ISSUER INFORMATION.
(a) The name of the issuer is PW Technology Partners, L.P. (the
"Partnership"). The Partnership is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as a closed-end, non-diversified,
management investment company and is organized as a Delaware limited
partnership. The principal executive office of the Partnership is located at
1285 Avenue of the Americas, New York, New York 10019 and the telephone number
is (212) 713-2000.
(b) The title of the securities that are the subject of the offer to
purchase ("Offer to Purchase" and the tender offer made thereby, the "Offer") is
partnership interests or portions thereof in the Partnership. (As used herein,
the term "Interest" or "Interests," as the context requires, shall refer to the
partnership interests in the Partnership and portions thereof that constitute
the class of security that is the subject of this tender offer or the
partnership interests in the Partnership or portions thereof that are tendered
by partners to the Partnership pursuant to the Offer to Purchase.) As of the
close of business on January 31, 2000, there were approximately $413,433,000
outstanding in capital of the Partnership held in Interests. Subject to the
conditions set forth in the Offer to Purchase, the Partnership will purchase up
to $100,000,000 of Interests that are tendered by and not withdrawn prior to
12:00 midnight, New York time, on March 22, 2000, subject to any extension of
the Offer to Purchase.
(c) Interests are not traded in any market, and any transfer thereof
is strictly limited by the terms of the Partnership's Amended and Restated
Limited Partnership Agreement dated as of February 17, 1999 (the "L.P.
Agreement").
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) The name of the filing person is PW Technology Partners, L.P. The
Partnership's principal executive office is located at 1285 Avenue of the
Americas, New York, New York 10019 and the telephone number is (212) 713-2000.
The General Partner of the Partnership is PW Fund Advisor, L.L.C. (the
"Manager"). The principal executive office of the Manager is located at 1285
Avenue of the Americas, New York, New York 10019 and the telephone number is
(212) 713-2000. The Partnership's Directors are E. Garrett Bewkes, Jr., Meyer
Feldberg and George W. Gowen. Their address is c/o PaineWebber Incorporated,
attention: Alternative Investment Group, at 1285 Avenue of the Americas, New
York, New York 10019.
ITEM 4. TERMS OF THIS TENDER OFFER.
(a) (1) (i) Subject to the conditions set forth in the Offer to
Purchase, the Partnership will purchase up to $100,000,000 of Interests that are
tendered by and not withdrawn prior to 12:00 midnight, New York time, on March
22, 2000, subject to any extension of the Offer to Purchase.
(ii) The purchase price of Interests tendered to the Partnership
will be their estimated net asset value as of the close of business on March 31,
2000, if the Offer to Purchase expires on the expected expiration date of March
22, 2000. If the Partnership elects to extend the tender period, for the purpose
of determining the purchase price for tendered Interests, the estimated net
asset value of such Interests will be determined at the close of business on the
last business day of the month in which the tender offer actually expires.
For partners who tender their entire Interest, payment of
the purchase price will consist of: (1) cash in an aggregate amount equal to 95%
of the estimated unaudited net asset value of Interests tendered and accepted by
the Partnership, determined as of March 31, 2000, payable by April 10, 2000 (the
"95% Cash Payment") and (2) a promissory note (the "Note"), entitling the holder
thereof to a contingent payment equal to the excess, if any, of (a) the net
asset value of the Interests tendered and accepted by the Partnership as of the
expiration date, determined based on the audited financial statements of the
Partnership for calendar year 2000, over (b) the 95% Cash Payment. The Note will
be delivered to the tendering partner in the manner set forth in the Letter of
Transmittal, attached hereto as Exhibit C, within ten days after the
Partnership's estimated net asset value is calculated and will not be
transferable. The Note will be payable in cash within ten days after completion
of the audit of the financial statements of the Partnership for calendar year
2000, or on such earlier date as the Partnership's Directors may determine. It
is anticipated that the audit of the Partnership's financial statements for
calendar year 2000 will be completed by no later than 60 days after the end of
the year. Any amounts payable under the Note will include interest, if any,
earned by the Partnership on an amount, deposited by the Partnership in a
segregated custodial account, equal to 5% of the estimated unaudited net asset
value of Interests tendered and accepted by the Partnership.
Partners who tender a portion of their Interests (subject to
maintenance of a minimum capital account balance) will receive cash in an
aggregate amount equal to 100% of the estimated unaudited net asset value of
Interests tendered and accepted by the Partnership, determined as of March 31,
2000, payable by April 10, 2000 (the "100% Cash Payment").
A copy of: (i) the Cover Letter to the Offer to Purchase and
Letter of Transmittal; (ii) the Offer to Purchase; (iii) a form of Letter of
Transmittal; (iv) a form of Notice of Withdrawal of Tender; and (v) forms of
Letters to Partners in connection with acceptances of offers of tender are
attached hereto as Exhibits A, B, C, D and E, respectively.
(iii) The scheduled expiration date is 12:00 midnight, New York
time, Wednesday, March 22, 2000.
(iv) Not applicable.
(v) The Partnership reserves the right, at any time and from time
to time, to extend the period of time during which the Offer is pending by
notifying partners of such extension. If the Partnership elects to extend the
tender period, for the purpose of determining the purchase price for tendered
Interests, the estimated net asset value of such Interests will be determined at
the close of business on the last business day of the month in which the tender
offer actually expires. During any such extension, all Interests previously
tendered and not withdrawn will remain subject to the Offer. The Partnership
also reserves the right, at any time and from time to time, up to and including
acceptance of tenders pursuant to the Offer, to: (a) cancel the Offer in the
circumstances set forth in Section 7 of the Offer to Purchase and in the event
of such cancellation, not to purchase or pay for any Interests tendered pursuant
to the Offer; (b) amend the Offer; or (c) postpone the acceptance of Interests.
If the Partnership determines to amend the Offer or to postpone the acceptance
of Interests tendered, it will, to the extent necessary, extend the period of
time during which the Offer is open as provided above and will promptly notify
partners.
(vi) Interests may be withdrawn at any time before 12:00
midnight, New York time, Wednesday March 22, 2000 and, if Interests have not
then been accepted by the Partnership, at any time after April 18, 2000.
(vii) Partners wishing to tender Interests pursuant to the Offer
should send or deliver a completed and executed Letter of Transmittal (the last
page will suffice) to PFPC Inc. ("PFPC"), to the attention of Annie Mussoni, at
the address set forth on page 2 of the Offer to Purchase, or fax a completed and
executed Letter of Transmittal to PFPC, also to the attention of Annie Mussoni,
at the fax numbers set forth on page 2 of the Offer to Purchase. The completed
and executed Letter of Transmittal must be received by PFPC, either by mail or
by fax, no later than the expiration date. The Partnership recommends that all
documents be submitted to PFPC by certified mail, return receipt requested, or
by facsimile transmission. A partner choosing to fax a Letter of Transmittal to
PFPC must also send or deliver the original completed and executed Letter of
Transmittal (the last page will suffice) to PFPC promptly thereafter.
Any partner tendering an Interest pursuant to this Offer may
withdraw its tender at any time on or before on the expiration date and, if
Interests have not then been accepted by the Partnership, at any time after
April 18, 2000. To be effective, any notice of withdrawal must be timely
received by PFPC at the address or fax numbers set forth on page 2 of the Offer
to Purchase. A form to use to give notice of withdrawal is available by calling
PFPC at the phone number indicated on page 2 of the Offer to Purchase. Interests
properly withdrawn shall not thereafter be deemed to be tendered for purposes of
the Offer. However, withdrawn Interests may be tendered prior to the expiration
date by following the procedures described above.
(viii) For purposes of the Offer, the Partnership will be deemed
to have accepted (and thereby purchased) Interests that are tendered as, if and
when it gives oral or written notice to the tendering partner of its election to
purchase such Interest.
(ix) If more than $100,000,000 of Interests are duly tendered to
the Partnership prior to the expiration of the Offer and not withdrawn, the
Partnership will in its sole discretion either (a) accept the additional
Interests permitted to be accepted pursuant to Rule 13e-4(f)(1)(ii) under the
Securities Exchange Act of 1934, as amended; (b) extend the Offer, if necessary,
and increase the amount of Interests that the Partnership is offering to
purchase to an amount it believes sufficient to accommodate the excess Interests
tendered as well as any Interests tendered during the extended Offer; or (c)
accept Interests tendered on or before the expiration date for payment on a pro
rata basis based on the aggregate estimated net asset value of tendered
Interests. The Offer may be extended, amended or canceled in various other
circumstances described in (v) above.
(x) The purchase of Interests pursuant to the Offer will have the
effect of increasing the proportionate interest in the Partnership of partners
who do not tender Interests. Partners who retain their Interests may be subject
to increased risks that may possibly result from the reduction in the
Partnership's aggregate assets resulting from payment for the Interests
tendered. These risks include the potential for greater volatility due to
decreased diversification. However, the Partnership believes that this result is
unlikely given the nature of the Partnership's investment program. A reduction
in the aggregate assets of the Partnership may result in partners who do not
tender Interests bearing higher costs to the extent that certain expenses borne
by the Partnership are relatively fixed and may not decrease if assets decline.
These effects may be reduced or eliminated to the extent that additional
subscriptions for Interests are made by new and existing partners from time to
time.
(xi) Not applicable.
(xii) A partner who tenders its entire Interest to the
Partnership for repurchase generally will recognize capital gain or loss to the
extent of the difference between the proceeds received by such partner
(consisting of the 95% Cash Payment and the principal payment under the Note)
and such partner's adjusted tax basis in its Interest. Gain, if any, will be
recognized by a tendering partner only as and after the total proceeds received
by such partner exceed the partner's adjusted tax basis in its Interest. A loss,
if any, will be recognized only after the tendering partner has received full
payment under the Note. This capital gain or loss will be short-term or
long-term depending upon the partner's holding period for its Interest at the
time the gain or loss is recognized. However, a tendering partner will recognize
ordinary income to the extent such partner's allocable share of the
Partnership's "unrealized receivables" exceeds the partner's basis in such
unrealized receivables, as determined pursuant to the Treasury Regulations. For
these purposes, accrued but untaxed market discount if any, on securities held
by the Partnership will be treated as an unrealized receivable with respect to
the tendering partner. A partner who tenders less than its entire Interest to
the Partnership for repurchase will recognize gain (but not loss) in a similar
manner only to the extent that the amount of the proceeds received (consisting
of the 100% Cash Payment) exceeds such partner's adjusted tax basis in its
Interest.
Pursuant to the authority granted to it under the L.P.
Agreement, the Manager intends to specially allocate items of Partnership
capital gain, including short-term capital gain, to a withdrawing partner to the
extent its liquidating distribution would otherwise exceed its adjusted tax
basis in its Interest. Such a special allocation may result in the withdrawing
partner recognizing capital gain, which may include short-term gain, in the
partner's last taxable year in the Partnership, thereby reducing the amount of
any long-term capital gain recognized during the tax year in which it receives
its liquidating distribution upon withdrawal.
(a)(2) Not applicable.
(b) No Interests will be acquired from the Manager or any of the
Directors in this tender offer.
ITEM 5. PAST CONTRACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS WITH
RESPECT TO THE ISSUER'S SECURITIES.
The Partnership's Confidential Memorandum dated February, 1999, as
supplemented (the "Confidential Memorandum"), and the L.P. Agreement, which were
provided to each partner in advance of subscribing for Interests, provide that
the Partnership's Directors have the discretion to determine whether the
Partnership will purchase Interests from partners from time to time pursuant to
written tenders. The Confidential Memorandum also states that the Manager of the
Partnership expects that generally, beginning in 2001, it will recommend to the
Directors that the Partnership purchase Interests from partners twice each year,
in June and December, and intends to recommend the making of an offer to
repurchase interests effective as of April 2000 and December 2000. The
Partnership is not aware of any contract, arrangement, understanding or
relationship relating, directly or indirectly, to this tender offer (whether or
not legally enforceable) between: (i) the Partnership and the Manager or
Directors of the Partnership or any person controlling the Partnership or
controlling the Manager or Directors of the Partnership; and (ii) any person,
with respect to Interests. However, the L.P. Agreement provides that the
Partnership shall be dissolved if the interest of any partner that has submitted
a written request, in accordance with the terms of the L.P. Agreement, to tender
its entire interest for repurchase by the Partnership has not been repurchased
within a period of two years of the request.
ITEM 6. PURPOSES OF THIS TENDER OFFER AND PLANS OR PROPOSALS OF THE
ISSUER OR AFFILIATE.
(a) The purpose of the Offer to Purchase is to provide liquidity to
partners who hold Interests as contemplated by and in accordance with the
procedures set forth in the Confidential Memorandum and the L.P. Agreement.
(b) Interests that are tendered to the Partnership in connection with
the Offer to Purchase will be retired, although the Partnership may issue
Interests from time to time in transactions not involving any public offering,
conducted pursuant to Rule 506 of Regulation D under the Securities Act of 1933,
as amended.
(c) Neither the Partnership nor the Manager nor the Directors have any
plans or proposals that relate to or would result in: (1) the acquisition by any
person of additional Interests in the Partnership (other than the Partnership's
intention to accept subscriptions for Interests from time to time in the
discretion of the Partnership), or the disposition of Interests in the
Partnership; (2) an extraordinary transaction, such as a merger, reorganization
or liquidation, involving the Partnership; (3) any material change in the
present distribution policy or indebtedness or capitalization of the
Partnership; (4) any change in the identity of the Manager or the Directors of
the Partnership, or in the management of the Partnership including, but not
limited to, any plans or proposals to change the number or the term of the
Directors of the Partnership, to fill any existing vacancy for a Director of the
Partnership or to change any material term of the investment advisory
arrangements with the Manager; (5) a sale or transfer of a material amount of
assets of the Partnership (other than as the Directors determine may be
necessary or appropriate to fund all or a portion of the purchase price for
Interests acquired pursuant to the Offer to Purchase or in connection with the
ordinary portfolio transactions of the Partnership); (6) any other material
change in the Partnership's structure or business, including any plans or
proposals to make any changes in its fundamental investment policies, as
amended, for which a vote would be required by Section 13 of the 1940 Act; or
(7) any changes in the L.P. Agreement or other actions that might impede the
acquisition of control of the Partnership by any person. Because Interests are
not traded in any market, Items (6), (7) and (8) of Item 1006(c) are not
applicable to the Partnership.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The Partnership expects that the purchase price for Interests
acquired pursuant to the Offer to Purchase, which will not exceed $100,000,000
(unless the Partnership elects to purchase a greater amount), will be derived
from: (1) cash on hand; (2) the proceeds of the sale of and/or delivery of
securities and portfolio assets held by the Partnership; and/or (3) possibly
borrowings, as described in paragraph (b), below. The Partnership will
segregate, with its custodian, cash or U.S. government securities or other
liquid securities equal to the value of the amount estimated to be paid under
any Notes as described above.
(b) Neither the Partnership nor the Manager nor Directors have
determined at this time to borrow funds to purchase Interests in connection with
the Offer to Purchase. However, depending on the dollar amount of Interests
tendered and prevailing general economic and market conditions, the Partnership,
in its sole discretion, may decide to seek to borrow money to fund all or a
portion of the purchase price. No borrowing facilities have been entered into to
date.
ITEM 8. INTEREST IN SECURITIES OF THE ISSUER.
(a) Based on February 1, 2000 estimated values, the Manager
beneficially owns $1,565,000, and a trust in which E. Garrett Bewkes, one of the
Partnership's Directors, has an interest (the "Trust"), beneficially owns
$1,000,000, of the Interests.
(b) During the past 60 business days, the only transaction involving
the Interests that were effected by the Partnership, the Manager of the
Partnership, the Directors or any person controlling the Partnership or
controlling the Manager or any Directors of the Partnership was the aggregate
subscription, on February 1, 2000, of $1,000,000 (based on the then determined
net asset value) in Interests by the Trust.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
No persons have been employed, retained or are to be compensated by
the Partnership to make solicitations or recommendations in connection with the
Offer to Purchase.
ITEM 10. FINANCIAL STATEMENTS.
(a)(1) Reference is hereby made to the audited financial statements
which are being furnished herewith and are incorporated herein by reference.
(2) Also included and incorporated herein are the unaudited financial
statements of the Partnership for the three-month period ended June 30, 1999,
which the Partnership has prepared and furnished to the partners pursuant to
Rule 30d-l under the 1940 Act, and filed with the Securities and Exchange
Commission pursuant to Rule 30b2-1 under the 1940 Act. The Partnership is not
required to and does not file quarterly unaudited financial statements under the
Securities Exchange Act of 1934, as amended. The Partnership does not have
shares, and consequently does not have earnings per share information.
(3) Not Applicable.
(4) The Partnership does not have shares, and consequently does not
have book value per share information.
(b) The Partnership's assets will be reduced by the amount of the
tendered Interests. Thus, income relative to assets may be affected by the
tender offer. The Partnership does not have shares and consequently does not
have earnings or book value per share information.
ITEM 11. ADDITIONAL INFORMATION.
(a)(1) None.
(2) None.
(3) Not Applicable.
(4) None.
(5) None.
(b) None.
ITEM 12. EXHIBITS.
A. Cover Letter to Offer to Purchase and Letter of Transmittal.
B. Offer to Purchase (with financial statements enclosed).
C. Form of Letter of Transmittal.
D. Form of Notice of Withdrawal of Tender.
E. Forms of Letters dated April 10, 2000 from the Partnership to
Partners in connection with acceptance of offers of tender.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
PW TECHNOLOGY PARTNERS, L.P.
By: PW Fund Advisor, L.L.C.
General Partner
By: /S/ DANIEL ARCHETTI
-------------------------
Name: Daniel Archetti
Title: Authorized Signatory
February 23, 2000
<PAGE>
EXHIBIT INDEX
EXHIBIT
A Cover Letter to Offer to Purchase and Letter of Transmittal.
B Offer to Purchase (with financial statements enclosed).
C Form of Letter of Transmittal.
D Form of Notice of Withdrawal of Tender.
E Forms of Letters dated April 10, 2000 from the Partnership to Partners
in connection with acceptance of offers of tender.
<PAGE>
EXHIBIT A
Cover Letter to Offer to Purchase and Letter of Transmittal
<PAGE>
IF YOU DO NOT WANT TO SELL YOUR PARTNERSHIP INTERESTS AT
THIS TIME, PLEASE DISREGARD THIS NOTICE. THIS IS SIMPLY NOTIFICATION
OF THE PARTNERSHIP'S TENDER OFFER.
February 23, 2000
Dear PW Technology Partners, L.P. Partner:
We are writing to inform you of important dates related to the tender
offer by PW Technology Partners, L.P. (the "Partnership"). If you are not
interested in selling your partnership interests at this time, please disregard
this notice and take no action.
The tender offer period will begin on February 23, 2000 and end on
March 22, 2000. The purpose of the tender offer is to provide liquidity to
partners who hold partnership interests. Partnership interests can be redeemed
by means of a tender offer only during one of the Partnership's announced tender
offers.
Should you wish to sell any of your partnership interests during this
tender offer period, please complete and return the enclosed Letter of
Transmittal (the last page will suffice) in the enclosed postage-paid envelope
no later than March 22, 2000. If you do not wish to sell partnership interests,
simply disregard this notice. NO ACTION IS REQUIRED IF YOU DO NOT WISH TO REDEEM
AT THIS TIME.
All requests to tender partnership interests must be received by the
Partnership's Administrator, PFPC Inc., either by mail or by fax (if by fax,
please deliver an original, executed copy promptly thereafter) in good order by
MARCH 22, 2000.
If you have any questions, please refer to the attached Offer to
Purchase document, which contains additional important information about the
tender offer, or call your Financial Advisor or Annie Mussoni at our
Administrator, (877) 431-1973.
Sincerely,
PW Technology Partners, L.P.
<PAGE>
EXHIBIT B
Offer to Purchase
(with financial statements enclosed)
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
1285 Avenue of the Americas
New York, New York 10019
OFFER TO PURCHASE $100,000,000 OF OUTSTANDING
PARTNERSHIP INTERESTS AT NET ASSET VALUE
DATED FEBRUARY 23, 2000
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK TIME, ON WEDNESDAY, MARCH 22, 2000,
UNLESS THE OFFER IS EXTENDED
To the Partners of
PW Technology Partners, L.P.:
PW Technology Partners, L.P., a closed-end, non-diversified,
management investment company organized as a Delaware limited partnership (the
"Partnership"), is offering to purchase for cash on the terms and conditions set
forth in this offer to purchase ("Offer to Purchase") and the related Letter of
Transmittal (which together with the Offer to Purchase constitutes the "Offer")
up to $100,000,000 of interests in the Partnership or portions thereof pursuant
to tenders by partners at a price equal to their estimated net asset value as of
March 31, 2000, if the Offer expires on March 22, 2000. If the Partnership
elects to extend the tender period, for the purpose of determining the purchase
price for tendered Interests, the estimated net asset value of such Interests
will be determined at the close of business on the last business day of the
month in which the tender offer actually expires. (As used in this Offer, the
term "Interest," or "Interests," as the context requires, shall refer to the
interests in the Partnership and portions thereof representing beneficial
interests in the Partnership.) This Offer is being made to all partners of the
Partnership and is not conditioned on any minimum amount of Interests being
tendered, but is subject to certain conditions described below. Interests are
not traded on any established trading market and are subject to strict
restrictions on transferability pursuant to the Partnership's Amended and
Restated Limited Partnership Agreement dated as of February 17, 1999 (the "L.P.
Agreement").
Partners should realize that the value of the Interests tendered in
this Offer likely will change between January 31st (the last time net asset
value was calculated) and February 29th (the next time net asset value will be
calculated) and March 31st, when the value of the Interests tendered to the
Partnership will be determined for purposes of calculating the purchase price of
such Interests. Partners should also note that although the tender offer expires
on March 22, 2000, they remain partners in the Partnership until March 31, 2000,
when the estimated net asset value of their partnership interests is calculated.
The Partnership determines the estimated net asset value monthly based on the
information it receives from the managers of the investment funds in which it
invests. Any tendering partners that wish to obtain the estimated net asset
value of their interests on this basis should contact PFPC Inc., at the
telephone number or address set forth below, Monday through Friday, except
holidays, during normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern Time).
Partners desiring to tender all or any portion of their Interest in
the Partnership in accordance with the terms of the Offer should complete and
sign the attached Letter of Transmittal (the last page will suffice) and send or
deliver it to the Partnership in the manner set forth below.
IMPORTANT
NEITHER THE PARTNERSHIP NOR THE MANAGER NOR ANY OF THE DIRECTORS MAKES
ANY RECOMMENDATION TO ANY PARTNER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING INTERESTS. PARTNERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER
INTERESTS, AND, IF SO, THE PORTION OF THEIR INTERESTS TO TENDER.
BECAUSE EACH PARTNER'S INVESTMENT DECISION IS A PERSONAL ONE, BASED ON
ITS FINANCIAL CIRCUMSTANCES, NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY
RECOMMENDATION ON BEHALF OF THE PARTNERSHIP AS TO WHETHER PARTNERS SHOULD TENDER
INTERESTS PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE,
SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED
ON AS HAVING BEEN AUTHORIZED BY THE PARTNERSHIP.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED ON THE FAIRNESS OR MERITS
OF SUCH TRANSACTION OR ON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
Questions and requests for assistance and requests for additional
copies of the Offer may be directed to the Partnership's service agent.
PFPC Inc.
P.O. Box 358
Claymont, Delaware 19703
Phone: (877) 431-1973
Fax: (302) 791-3225
(302) 791-2386
<PAGE>
TABLE OF CONTENTS
1. Background and Purpose of the Offer.................................5
2. Offer to Purchase and Price.........................................6
3. Amount of Tender....................................................6
4. Procedure for Tenders...............................................7
5. Withdrawal Rights...................................................8
6. Purchases and Payment...............................................8
7. Certain Conditions of the Offer.....................................9
8. Certain Information About the Partnership..........................10
9. Certain Federal Income Tax Consequences............................11
10. Miscellaneous......................................................12
Financial Statements (enclosed)
<PAGE>
SUMMARY TERM SHEET
o As we said in your Partnership's offering documents, we will buy your
partnership interests at their estimated net asset value (that is, the
estimated value of the Partnership's assets minus its liabilities,
multiplied by the proportionate interest in the Partnership you desire
to sell). This offer will remain open until midnight on March 22,
2000. Estimated net asset value will be calculated for this purpose on
March 31, 2000.
o To make sure we have calculated net asset value correctly, we will
check it during the Partnership's audit for calendar year 2000, which
we expect will be completed in February 2001. If you tender your
entire interest in the Partnership, we will pay you in cash by April
10, 2000, 95% of our calculation of the estimated net asset value as
of March 31, 2000. We will owe you the balance, for which we will give
you a promissory note that, if you have a PaineWebber account, will be
included in your PaineWebber account. If you do not have a PaineWebber
account, the note will be held for you by the Partnership's
Administrator, PFPC Inc. If you tender part of your interest, leaving
a remainder at least equal to $125,000 ($25,000 for certain eligible
investors who are identified in the Partnership's Confidential
Memorandum), we will pay all your proceeds in cash by April 10th. We
will obtain the cash to pay you, either from cash on hand, selling
portfolio securities or through borrowings (which we do not intend to
do).
o Following this summary is a formal notice of our offer to purchase
your partnership interests. Our offer remains open to you until
midnight on March 22, 2000. Until this time, you have the right to
change your mind and withdraw your partnership interests from
consideration for purchase. If we do not accept your interests by
midnight, March 22, 2000, you may still withdraw your partnership
interests at any time after April 18, 2000, assuming your offer has
not been accepted. Please note that tendering your partnership
interests may trigger the payment by you of a performance bonus to the
Partnership's manager for managing the Partnership's assets.
o If you would like us to purchase your partnership interests, you
should mail a Letter of Transmittal (the last page of the letter will
suffice), enclosed with our offer, to PFPC Inc. at P.O. Box 358,
Claymont, Delaware 19703, or fax it to PFPC Inc. at (302) 791-3225 or
(302) 791-2386, so that it is received before midnight, March 22,
2000. If you choose to fax the Letter of Transmittal, you should mail
the original last page of the Letter of Transmittal to PFPC Inc.
promptly after you fax it (although the original page does not have to
be received before midnight, March 22, 2000). Of course, the value of
your partnership interests is likely to change between January 31st
(the last time estimated net asset value was calculated) and February
29th (the next time it will be calculated) and March 31st, when the
value of your investment will be determined for purposes of
calculating your purchase price.
o If you would like to obtain the estimated net asset value of your
partnership interests, which we calculate monthly based on the
information we receive from the managers of the investment funds in
which we invest, you may contact PFPC Inc., at (877) 431-1973 or at
the address listed above, Monday through Friday, except holidays,
during normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern Time).
o Please note that just as you have the right to withdraw your
partnership interests, we have the right to cancel, amend or postpone
this offer at any time before midnight, March 22, 2000. Also realize
that although the tender offer expires on March 22, 2000, you remain a
partner in the Partnership until March 31, 2000, when the estimated
net asset value of your partnership interests is calculated.
1. BACKGROUND AND PURPOSE OF THE OFFER. The purpose of the Offer is to
provide liquidity to partners who hold Interests as contemplated by and in
accordance with the procedures set forth in the Partnership's Confidential
Memorandum dated February 1999, as supplemented (the "Confidential Memorandum")
and the L.P. Agreement. The Confidential Memorandum and the L.P. Agreement,
which were provided to each partner in advance of subscribing for Interests,
provide that the Directors have the discretion to determine whether the
Partnership will purchase Interests from partners from time to time pursuant to
written tenders. The Confidential Memorandum also states that PW Fund Advisor,
L.L.C., the manager of the Partnership (the "Manager"), expects that generally,
beginning in 2001, it will recommend to the Directors that the Partnership
purchase Interests from partners twice each year, in June and December, and
intends to recommend the making of an offer to repurchase interests effective as
of April 2000 and December 2000. Because there is no secondary trading market
for Interests and transfers of Interests are prohibited without prior approval
of the Partnership, the Directors have determined, after consideration of
various matters, including, but not limited to, those set forth in the
Confidential Memorandum, that the Offer is in the best interests of partners of
the Partnership to provide liquidity for Interests as contemplated in the
Confidential Memorandum and the L.P. Agreement. The Directors intend to consider
the continued desirability of the Partnership making an offer to purchase
Interests twice each year, but the Partnership is not required to make any such
offer.
The purchase of Interests pursuant to the Offer will have the effect
of increasing the proportionate interest in the Partnership of partners who do
not tender Interests. Partners who retain their Interests may be subject to
increased risks that may possibly result from the reduction in the Partnership's
aggregate assets resulting from payment for the Interests tendered. These risks
include the potential for greater volatility due to decreased diversification.
However, the Partnership believes that this result is unlikely given the nature
of the Partnership's investment program. A reduction in the aggregate assets of
the Partnership may result in partners who do not tender Interests bearing
higher costs to the extent that certain expenses borne by the Partnership are
relatively fixed and may not decrease if assets decline. These effects may be
reduced or eliminated to the extent that additional subscriptions for Interests
are made by new and existing partners from time to time.
Interests that are tendered to the Partnership in connection with this
Offer will be retired, although the Partnership may issue new Interests from
time to time in transactions not involving any public offering conducted
pursuant to Rule 506 of Regulation D under the Securities Act of 1933, as
amended.
2. OFFER TO PURCHASE AND PRICE. The Partnership will purchase, upon
the terms and subject to the conditions of the Offer, up to $100,000,000 of
those outstanding Interests that are properly tendered by and not withdrawn (in
accordance with Section 5 below) before 12:00 midnight, New York time, on
Wednesday, March 22, 2000 (such time and date being hereinafter called the
"Initial Expiration Date"). If the Partnership elects to extend the tender
period, for the purpose of determining the purchase price for tendered
Interests, the estimated net asset value of such Interests will be determined at
the close of business on the last business day of the month in which the tender
offer actually expires. The later of the Initial Expiration Date or the latest
time and date to which the Offer is extended hereinafter is called the
"Expiration Date." The Partnership reserves the right to extend, amend or cancel
the Offer as described in Sections 3 and 7 below. The purchase price of an
Interest tendered will be its estimated net asset value as of the close of
business on the Expiration Date, payable as set forth in Section 6. As of the
close of business on February 1, 2000, the estimated unaudited net asset value
of an Interest corresponding to an initial capital contribution of $250,000 on
the following closing dates of the Partnership was:
UNAUDITED ESTIMATED NET ASSET VALUE
CLOSING DATE AS OF FEBRUARY 1, 2000
------------ ----------------------
April 1, 1999 384,209
May 1, 1999 375,081
June 1, 1999 379,796
July 1, 1999 357,492
August 1, 1999 354,009
September 1, 1999 342,351
October 1, 1999 337,520
November 1, 1999 324,749
December 1, 1999 298,496
January 1, 2000 254,506
As of the close of business on January 31, 2000, there were
approximately $413,433,000 outstanding in capital of the Partnership held in
Interests (based on the unaudited estimated net asset value of such Interests).
The Partnership determines its estimated net asset value monthly based on
information it receives from the managers of the investment funds in which it
invests. Partners may obtain this information by contacting PFPC Inc. ("PFPC"),
at the telephone number or address set forth on page 2, Monday through Friday,
except holidays, during normal business hours of 9:00 a.m. to 5:00 p.m. (Eastern
Time). Of course, the value of the Interests tendered by the partners likely
will change between January 31st (the last time net asset value was calculated)
and February 29th (the next time it will be calculated) and March 31st, when the
value of the Interests tendered by partners will be determined for purposes of
calculating the purchase price of such Interests and the time that partners will
cease to be partners in the Partnership.
3. AMOUNT OF TENDER. Subject to the limitations set forth below,
partners may tender their entire Interest or a portion of their Interest.
However, a partner who tenders for repurchase only a portion of such partner's
Interest shall be required to maintain a capital account balance equal to
$125,000 ($25,000 for certain eligible investors who are identified in the
Partnership's Confidential Memorandum), net of the amount of the performance
bonus, if any, that is to be debited from the capital account of the partner and
credited to the capital account of the Manager on the Expiration Date (the
"Performance Bonus"). If a partner tenders an amount that would cause the
partner's capital account balance to fall below the required minimum, the
Partnership reserves the right to reduce the amount to be purchased from such
partner so that the required minimum balance is maintained. The Offer is being
made to all partners of the Partnership and is not conditioned on any minimum
amount of Interests being tendered.
If the amount of the Interests that are properly tendered pursuant to
the Offer and not withdrawn pursuant to Section 5 below is less than or equal to
$100,000,000 (or such greater amount as the Partnership may elect to purchase
pursuant to the Offer), the Partnership will, on the terms and subject to the
conditions of the Offer, purchase all of the Interests so tendered unless the
Partnership elects to cancel or amend the Offer, or postpone acceptance of
tenders made pursuant to the Offer, as provided in Section 7 below. If more than
$100,000,000 of Interests are duly tendered to the Partnership before the
expiration of the Offer and not withdrawn pursuant to Section 5 below, the
Partnership will, in its sole discretion, either (a) accept the additional
Interests permitted to be accepted pursuant to Rule 13e-4(f)(1)(ii) under the
Securities Exchange Act of 1934, as amended; (b) extend the Offer, if necessary,
and increase the amount of Interests that the Partnership is offering to
purchase to an amount it believes sufficient to accommodate the excess Interests
tendered as well as any Interests tendered during the extended Offer; or (c)
accept Interests tendered on or before the Expiration Date for payment on a pro
rata basis based on the aggregate estimated net asset value of tendered
Interests. The Offer may be extended, amended or canceled in various other
circumstances described in Section 7 below. No Interests will be acquired from
the Manager or any of the Directors in this offer.
4. PROCEDURE FOR TENDERS. Partners wishing to tender Interests
pursuant to the Offer should send or deliver a completed and executed Letter of
Transmittal (the last page will suffice) to PFPC, to the attention of Annie
Mussoni, at the address set forth on page 2, or fax a completed and executed
Letter of Transmittal to PFPC, also to the attention of Annie Mussoni, at the
fax numbers set forth on page 2. The completed and executed Letter of
Transmittal must be received by PFPC, either by mail or by fax, no later than
the Expiration Date. The Partnership recommends that all documents be submitted
to PFPC by certified mail, return receipt requested, or by facsimile
transmission. A partner choosing to fax a Letter of Transmittal to PFPC must
also send or deliver the original completed and executed Letter of Transmittal
(the last page will suffice) to PFPC promptly thereafter.
Partners wishing to confirm receipt of a Letter of Transmittal may
contact PFPC at the address and phone number set forth on page 2. The method of
delivery of any documents is at the election and complete risk of the partner
tendering an Interest, including, but not limited to, the failure of PFPC to
receive any Letter of Transmittal or other document submitted by facsimile
transmission. All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of tenders will be determined by the
Partnership, in its sole discretion, and such determination shall be final and
binding. The Partnership reserves the absolute right to reject any or all
tenders determined by it not to be in appropriate form or the acceptance of or
payment for which would, in the opinion of counsel for the Partnership, be
unlawful. The Partnership also reserves the absolute right to waive any of the
conditions of the Offer or any defect in any tender with respect to any
particular Interest or any particular partner, and the Partnership's
interpretation of the terms and conditions of the Offer will be final and
binding. Unless waived, any defects or irregularities in connection with tenders
must be cured within such time as the Partnership shall determine. Tenders will
not be deemed to have been made until the defects or irregularities have been
cured or waived. Neither the Partnership nor the Manager nor Directors of the
Partnership shall be obligated to give notice of any defects or irregularities
in tenders, nor shall any of them incur any liability for failure to give such
notice.
5. WITHDRAWAL RIGHTS. Any partner tendering an Interest pursuant to
this Offer may withdraw its Interest at any time on or before the Expiration
Date and, if Interests have not then been accepted by the Partnership, at any
time after April 18, 2000. To be effective, any notice of withdrawal must be
timely received by PFPC at the address or fax numbers set forth on page 2. A
form to use to give notice of withdrawal is available by calling PFPC at the
phone number indicated on page 2. All questions as to the form and validity
(including time of receipt) of notices of withdrawal will be determined by the
Partnership, in its sole discretion, and such determination shall be final and
binding. Interests properly withdrawn shall not thereafter be deemed to be
tendered for purposes of the Offer. However, withdrawn Interests may be tendered
prior to the Expiration Date by following the procedures described in Section 4.
6. PURCHASES AND PAYMENT. For purposes of the Offer, the Partnership
will be deemed to have accepted (and thereby purchased) Interests that are
tendered as, if and when it gives oral or written notice to the tendering
partner of its election to purchase such Interest. As stated in Section 2 above,
the purchase price of an Interest tendered by any partner will be the estimated
net asset value thereof as of the close of business on March 31, 2000, if the
Offer expires on the Initial Expiration Date. If the Partnership elects to
extend the tender period, for the purpose of determining the purchase price for
tendered Interests, the estimated net asset value of such Interests will be
determined at the close of business on the last business day of the month in
which the tender offer actually expires. The estimated net asset value will be
determined after all allocations to capital accounts of the partners required to
be made by the L.P. Agreement, including any Performance Bonus payable to the
Manager, have been made.
For partners who tender their entire Interest, payment of the purchase
price will consist of: (1) cash in an aggregate amount equal to 95% of the
estimated unaudited net asset value of Interests tendered and accepted by the
Partnership, determined as of March 31, 2000, payable by April 10, 2000 (the
"95% Cash Payment") and (2) a promissory note (the "Note"), entitling the holder
thereof to a contingent payment equal to the excess, if any, of (a) the net
asset value of the Interests tendered and accepted by the Partnership as of the
Expiration Date, determined based on the audited financial statements of the
Partnership for calendar year 2000, over (b) the 95% Cash Payment. The Note will
be delivered to the tendering partner in the manner set forth below within ten
days after the Partnership's estimated net asset value is calculated and will
not be transferable. The Note will be payable in cash (in the manner set forth
below) within ten days after completion of the audit of the financial statements
of the Partnership for calendar year 2000, or on such earlier date as the
Partnership's Directors may determine. It is anticipated that the audit of the
Partnership's financial statements for calendar year 2000 will be completed by
no later than 60 days after the end of the year. Any amounts payable under the
Note will include interest, if any, earned by the Partnership on an amount,
deposited by the Partnership in a segregated custodial account, equal to 5% of
the estimated unaudited net asset value of Interests tendered and accepted by
the Partnership.
Partners who tender a portion of their Interests (subject to
maintenance of a minimum capital account balance) will receive cash in an
aggregate amount equal to 100% of the estimated unaudited net asset value of
Interests tendered and accepted by the Partnership, determined as of March 31,
2000, payable by April 10, 2000 (the "100% Cash Payment").
Both the 95% Cash Payment and the 100% Cash Payment (together, the
"Cash Payment") will be made by wire transfer directly to the tendering
partner's brokerage account with PaineWebber Incorporated ("PaineWebber") if
such partner has a PaineWebber account. Cash Payments wired directly to
brokerage accounts will be subject upon withdrawal from such accounts to any
fees that PaineWebber would customarily assess upon the withdrawal of cash from
such brokerage account. If such partner does not have a PaineWebber account, the
Cash Payment will be sent directly to its mailing address as listed in the
Partnership's records, unless such partner advises the Partnership in writing of
a change in its mailing address.
The Note will be deposited directly to the tendering partner's
brokerage account with PaineWebber if such partner has a PaineWebber account.
Any contingent payment due pursuant to the Note will also be deposited directly
to the tendering partner's brokerage account at PaineWebber, and will be subject
upon withdrawal from such account to any fees that PaineWebber would customarily
assess upon the withdrawal of cash from such brokerage account. If such partner
does not have a PaineWebber account, the Note will be held for such partner by
the Partnership's Administrator, PFPC.
The Partnership expects that the purchase price for Interests acquired
pursuant to the Offer to Purchase, which will not exceed $100,000,000 (unless
the Partnership elects to purchase a greater amount), will be derived from: (1)
cash on hand; (2) the proceeds of the sale of and/or delivery of securities and
portfolio assets held by the Partnership; and/or (3) possibly borrowings, as
described below. The Partnership will segregate, with its custodian, cash or
U.S. government securities or other liquid securities equal to the value of the
amount estimated to be paid under any Notes as described above. Neither the
Partnership nor the Manager nor Directors have determined at this time to borrow
funds to purchase Interests in connection with the Offer to Purchase. However,
depending on the dollar amount of Interests tendered and prevailing general
economic and market conditions, the Partnership, in its sole discretion, may
decide to seek to borrow money to fund all or a portion of the purchase price.
No borrowing facilities have been entered into to date.
7. CERTAIN CONDITIONS OF THE OFFER. The Partnership reserves the
right, at any time and from time to time, to extend the period of time during
which the Offer is pending by notifying partners of such extension. If the
Partnership elects to extend the tender period, for the purpose of determining
the purchase price for tendered Interests, the estimated net asset value of such
Interests will be determined at the close of business on the last business day
of the month in which the tender offer actually expires. During any such
extension, all Interests previously tendered and not withdrawn will remain
subject to the Offer. The Partnership also reserves the right, at any time and
from time to time, up to and including acceptance of tenders pursuant to the
Offer, to: (a) cancel the Offer in the circumstances set forth in the following
paragraph and in the event of such cancellation, not to purchase or pay for any
Interests tendered pursuant to the Offer; (b) amend the Offer; or (c) postpone
the acceptance of Interests. If the Partnership determines to amend the Offer or
to postpone the acceptance of Interests tendered, it will, to the extent
necessary, extend the period of time during which the Offer is open as provided
above and will promptly notify partners.
The Partnership may cancel the Offer, amend the Offer or postpone the
acceptance of tenders made pursuant to the Offer if: (a) the Partnership would
not be able to liquidate portfolio securities in a manner that is orderly and
consistent with the Partnership's investment objectives and policies in order to
purchase Interests tendered pursuant to the Offer; (b) there is, in the
Directors' judgment, any (i) legal action or proceeding instituted or threatened
challenging the Offer or that otherwise would have a material adverse affect on
the Partnership, (ii) declaration of a banking moratorium by Federal or state
authorities or any suspension of payment by banks in the United States or New
York State that is material to the Partnership, (iii) limitation imposed by
Federal or state authorities on the extension of credit by lending institutions,
(iv) suspension of trading on any organized exchange or over-the-counter market
where the Partnership has a material investment, (v) commencement of war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States that is material to the Partnership, (vi) material
decrease in the estimated net asset value of the Partnership from the estimated
net asset value of the Partnership as of the commencement of the Offer, or (vii)
other event or condition that would have a material adverse effect on the
Partnership or its partners if Interests tendered pursuant to the Offer were
purchased; or (c) the independent Directors of the Partnership determine that it
is not in the best interest of the Partnership to purchase Interests pursuant to
the Offer. However, there can be no assurance that the Partnership will exercise
its right to extend, amend or cancel the Offer or to postpone acceptance of
tenders pursuant to the Offer.
8. CERTAIN INFORMATION ABOUT THE PARTNERSHIP. The Partnership is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a closed-end, non-diversified, management investment company and is
organized as a Delaware limited partnership. The principal executive office of
the Partnership is located at 1285 Avenue of the Americas, New York, New York
10019 and the telephone number is (212) 713-2000. Interests are not traded on
any established trading market and are subject to strict restrictions on
transferability pursuant to the L.P. Agreement. The Partnership's Directors are
E. Garrett Bewkes, Jr., Meyer Feldberg and George W. Gowen. Their address is c/o
PaineWebber Incorporated, attention: Alternative Investment Group, at 1285
Avenue of the Americas, New York, New York 10019. On February 1, 2000, a trust
in which E. Garrett Bewkes has an interest (the "Trust"), subscribed for
$1,000,000 in Interests.
The Partnership does not have any plans or proposals that relate to or
would result in: (a) the acquisition by any person of additional Interests
(other than the Partnership's intention to accept subscriptions for Interests
from time to time in the discretion of the Partnership) or the disposition of
Interests; (b) an extraordinary transaction, such as a merger, reorganization or
liquidation, involving the Partnership; (c) any material change in the present
distribution policy or indebtedness or capitalization of the Partnership; (d)
any change in the identity of the Manager or Directors of the Partnership, or in
the management of the Partnership including, but not limited to, any plans or
proposals to change the number or the term of the Directors of the Partnership,
to fill any existing vacancy for a Director of the Partnership or to change any
material term of the investment advisory arrangements with the Manager; (e) a
sale or transfer of a material amount of assets of the Partnership (other than
as the Directors determine may be necessary or appropriate to fund any portion
of the purchase price for Interests acquired pursuant to this Offer to Purchase
or in connection with the ordinary portfolio transactions of the Partnership);
(f) any other material change in the Partnership's structure or business,
including any plans or proposals to make any changes in its fundamental
investment policy for which a vote would be required by Section 13 of the 1940
Act; or (g) any changes in the L.P. Agreement or other actions that may impede
the acquisition of control of the Partnership by any person.
During the past 60 business days, the only transaction involving the
Interests that were effected by the Partnership, the Manager of the Partnership,
the Directors or any person controlling the Partnership or controlling the
Manager or any Directors of the Partnership was the aggregate subscription, on
February 1, 2000, of $1,000,000 (based on the then determined net asset value)
in Interests by the Trust.
Based on February 1, 2000 estimated values, the Manager beneficially
owns $1,565,000 of the Interests. The Manager is entitled under the terms of the
L.P. Agreement to receive, subject to certain limitations, the Performance
Bonus, as specified in the L.P. Agreement and described in the Confidential
Memorandum.
9. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion
is a general summary of the federal income tax consequences of the purchase of
Interests by the Partnership from partners pursuant to the Offer. Partners
should consult their own tax advisers for a complete description of the tax
consequences to them of a purchase of their Interests by the Partnership
pursuant to the Offer.
A partner who tenders its entire Interest to the Partnership for
repurchase generally will recognize capital gain or loss to the extent of the
difference between the proceeds received by such partner (consisting of the 95%
Cash Payment and the principal payment under the Note) and such partner's
adjusted tax basis in its Interest. Gain, if any, will be recognized by a
tendering partner only as and after the total proceeds received by such partner
exceed the partner's adjusted tax basis in its Interest. A loss, if any, will be
recognized only after the tendering partner has received full payment under the
Note. This capital gain or loss will be short-term or long-term depending upon
the partner's holding period for its Interest at the time the gain or loss is
recognized. However, a tendering partner will recognize ordinary income to the
extent such partner's allocable share of the Partnership's "unrealized
receivables" exceeds the partner's basis in such unrealized receivables, as
determined pursuant to the Treasury Regulations. For these purposes, accrued but
untaxed market discount if any, on securities held by the Partnership will be
treated as an unrealized receivable with respect to the tendering partner. A
partner who tenders less than its entire Interest to the Partnership for
repurchase will recognize gain (but not loss) in a similar manner only to the
extent that the amount of the proceeds received (consisting of the 100% Cash
Payment) exceeds such partner's adjusted tax basis in its Interest.
Pursuant to the authority granted to it under the L.P. Agreement, the
Manager intends to specially allocate items of Partnership capital gain,
including short-term capital gain, to a withdrawing partner to the extent its
liquidating distribution would otherwise exceed its adjusted tax basis in its
Interest. Such a special allocation may result in the withdrawing partner
recognizing capital gain, which may include short-term gain, in the partner's
last taxable year in the Partnership, thereby reducing the amount of any
long-term capital gain recognized during the tax year in which it receives its
liquidating distribution upon withdrawal.
10. MISCELLANEOUS. The Offer is not being made to, nor will tenders be
accepted from, partners in any jurisdiction in which the Offer or its acceptance
would not comply with the securities or Blue Sky laws of such jurisdiction. The
Partnership is not aware of any jurisdiction in which the Offer or tenders
pursuant thereto would not be in compliance with the laws of such jurisdiction.
However, the Partnership reserves the right to exclude partners from the Offer
in any jurisdiction in which it is asserted that the Offer cannot lawfully be
made. The Partnership believes such exclusion is permissible under applicable
laws and regulations, provided the Partnership makes a good faith effort to
comply with any state law deemed applicable to the Offer.
The Partnership has filed an Issuer Tender Offer Statement on Schedule
TO with the Securities and Exchange Commission, which includes certain
information relating to the Offer summarized herein. A free copy of such
statement may be obtained from the Partnership by contacting PFPC at the address
and phone number set forth on page 2 or from the Securities and Exchange
Commission's internet web site, http://www.sec.gov. For a fee, a copy may be
obtained from the public reference office of the Securities and Exchange
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
FINANCIAL STATEMENTS
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
FINANCIAL STATEMENTS
FOR THE PERIOD FROM APRIL 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
FINANCIAL STATEMENTS
FOR THE PERIOD FROM APRIL 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
CONTENTS
Statement of Assets, Liabilities and Partners' Capital.................... 1
Statement of Operations................................................... 2
Statement of Changes in Partners' Capital - Net Assets.................... 3
Notes to Financial Statements............................................. 4
Schedule of Investments in Funds.......................................... 8
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
- -------------------------------------------------------------------------------
JUNE 30, 1999
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 704,261
Investments in funds, at market (identified cost -
$113,000,000) 120,593,749
-----------
TOTAL ASSETS 121,298,010
-----------
LIABILITIES
Management fee payable 210,827
Professional fees payable 26,869
Custody fee payable 1,800
Organizational fees payable 186,619
Accrued expenses 16,667
------
TOTAL LIABILITIES 442,782
-------
NET ASSETS $120,855,228
============
PARTNERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions $113,704,095
Accumulated net investment loss (442,616)
Accumulated net unrealized appreciation on investments 7,593,749
---------
PARTNERS' CAPITAL - NET ASSETS $120,855,228
============
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------
PERIOD FROM APRIL 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
INVESTMENT INCOME
Interest $ 3,449
---------
OPERATING EXPENSES
Management fee 210,827
Organizational costs 189,902
Professional fees 26,869
Custody fees 1,800
Miscellaneous 16,667
------
TOTAL OPERATING EXPENSES 446,065
-------
NET INVESTMENT LOSS (442,616)
--------
UNREALIZED GAIN ON INVESTMENTS IN FUNDS:
NET CHANGE IN UNREALIZED APPRECIATION ON
INVESTMENTS IN FUNDS 7,593,749
---------
INCREASE IN PARTNERS' CAPITAL
DERIVED FROM INVESTMENT ACTIVITIES $ 7,151,133
===========
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL - NET ASSETS
- -------------------------------------------------------------------------------
PERIOD FROM APRIL 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO JUNE 30, 1999
(UNAUDITED)
FROM INVESTMENT ACTIVITIES
Net investment loss $ (442,616)
Net change in unrealized appreciation on
investments in funds 7,593,749
---------
INCREASE IN PARTNERS' CAPITAL
DERIVED FROM INVESTMENT ACTIVITIES 7,151,133
PARTNERS' CAPITAL TRANSACTIONS
General Partner's capital contribution 1,000,000
Limited Partners' capital contributions 112,704,095
-----------
INCREASE IN PARTNERS' CAPITAL DERIVED
FROM CAPITAL TRANSACTIONS 113,704,095
PARTNERS' CAPITAL AT BEGINNING OF PERIOD -
------------
PARTNERS' CAPITAL AT END OF PERIOD $120,855,228
============
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW Technology Partners, L.P.
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1999 (UNAUDITED)
- -------------------------------------------------------------------------------
1. ORGANIZATION
PW Technology Partners, L.P. (the "Fund"), was organized as a limited
partnership under the laws of Delaware on February 28, 1999. The Fund is
registered under the Investment Company Act of 1940 (the "Act") as a
closed-end, non-diversified, management investment company. The Fund's
objective is to maximize capital appreciation over the long-term in a
variety of market conditions by allocating its assets among a select group
of portfolio managers who invest primarily in, or who have particular
knowledge within, the technology sector. Generally, such portfolio managers
conduct their investment programs through unregistered investment
partnerships, which have investors other than the Fund, and in other
registered investment companies (collectively the "Investment Funds").
Commencement of operations began April 1, 1999.
The General Partner of the Fund is PW Fund Advisor, L.L.C. (the "Manager"),
a Delaware limited liability company. The Manager is an indirect
wholly-owned subsidiary of Paine Webber Group Inc., and is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
The Fund's General Partner, to the fullest extent permitted by applicable
law, has irrevocably delegated to a group of individuals (the "Directors")
its rights and powers to manage and control the business affairs of the
Fund, including the exclusive authority to oversee and to establish
policies regarding the management, conduct and operation of the Fund's
business.
Initial and additional subscriptions for interests by eligible investors
may be accepted at such times as the Manager may determine. The Fund
reserves the right to reject any subscription for interests in the Fund.
Limited Partners can only transfer or assign their partnership interests
with the approval of the Manager.
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 Fund's financial statements are reasonable and prudent;
however, actual results could differ from these estimates.
A. PORTFOLIO VALUATION
The Fund's investments in Investment Funds are carried at fair value as
determined by the Fund's pro-rata interest in the net assets of each
Investment Fund based on the respective Investment Fund's unaudited
financial statements. All valuations are net of management and performance
incentive fees or allocations payable to the Investment Funds' managers as
required by the Investment Funds' agreements.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
A. PORTFOLIO VALUATION (CONTINUED)
The underlying investment in each Investment Fund is accounted for at fair
value as described in each Investment Fund's financial statements. The fair
value relating to certain underlying investments of these Investment
Funds', for which there is no ready market, has been estimated by the
respective Investment Funds' management and is based upon available
information in the absence of readily ascertainable market values and does
not necessarily represent amounts that might ultimately be realized.
Because of the inherent uncertainty of valuation, those estimated fair
values may differ significantly from the values that would have been used
had a ready market for the investments existed. These differences could be
material.
Distributions received, whether in the form of cash or securities, are
applied as a reduction of the investment's cost when identified by the
Investment Funds' as a return of capital.
B. PARTNERSHIP EXPENSES
Costs incurred to organize the limited partnership were expensed. The
Partnership will bear all expenses incurred in the business of the
Partnership, including, but not limited to, the following: all costs and
expenses related to portfolio transactions and positions for the
Partnership's account; legal fees; accounting and auditing fees; costs of
insurance; registration expenses; certain offering costs; and expenses of
meetings of Directors and limited partners.
C. CASH EQUIVALENTS
For purposes of the Statements of Assets, Liabilities and Partners'
Capital, cash equivalents represents amounts invested in the RBB Sansom
Street Money Market Portfolio.
D. INCOME TAXES
No provision for the payment of federal, state or local income taxes on the
profits of the Fund will be made. The Partners are individually liable for
the income taxes on their share of the Fund's income. In addition, the Fund
invests in securities partnerships that are primarily involved in the
purchase and sale of intangible property for their own accounts. As such,
it is not deemed to be engaged in an unincorporated business and thus is
not subject to New York City unincorporated business taxes.
3. INVESTMENTS
As of June 30, 1999, the Fund had investments in Investment Funds, none of
which were related parties. The Fund's investments are summarized below
based on the investment objectives of the specific Investment Funds at June
30, 1999.
INVESTMENT OBJECTIVE COST FAIR VALUE
-------------------- ----- ----------
Long/Short Equity $113,000,000 $120,593,749
The agreements related to investments in Funds provide for compensation to
the general partners/managers in the form of management fees of 1% to 2%
(per annum) of net assets and performance incentive fees or allocations of
20% of net profits earned.
4. MANAGEMENT FEE, PROFIT ALLOCATION, RELATED PARTY TRANSACTIONS AND OTHER
Certain administrative and operational support services are provided to the
Fund by entities related to the Manager. Pursuant to the Partnership
Agreement, the Fund pays a monthly management fee equal to .083% (1% per
annum) of the capital account of each Limited Partner, to PW Alternative
Asset Management Inc. ("PWAAM"), a wholly owned subsidiary of PaineWebber
Group Inc. and managing member of the General Partner.
In accordance with the Partnership Agreement, the Manager is allocated an
amount based on the performance of the Fund (the "Performance Bonus"),
which is calculated separately with respect to each Limited Partner.
The General Partner's capital account balance at June 30, 1999 was
$1,078,392.
PFPC Inc. serves as Administrator and Accounting Agent to the Fund, and in
that capacity provides certain accounting, record keeping, tax and investor
related services.
PFPC Trust Company serves as custodian of the Fund's assets.
5. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the Investment Funds in which the Fund
invests trade various financial instruments and enter into various
investment activities with off-balance sheet risk. These include, but are
not limited to, short selling activities, writing option contracts,
contracts for differences, and equity swaps.
<PAGE>
6. SELECTED FINANCIAL RATIOS
The following represents the ratios to average net assets and other
supplemental information for the period indicated:
FOR THE PERIOD FROM
APRIL 1, 1999
(COMMENCEMENT OF
OPERATIONS)
TO JUNE 30, 1999
-------------------
Ratio of net investment loss to average net assets (2.26%)*
Ratio of operating expenses to average net assets 2.28%*
Ratio of interest expense to average net assets N/A
Portfolio turnover rate 0.00%
Rate of return 7.46%**
Average debt ratio N/A
* Annualized.
** Rate of return assumes a purchase of a limited partnership interest in the
Fund on the first day and a sale of the limited partnership interest on the
last day of the period noted, after incentive allocation to the Manager, if
any. Rate of return calculations for a period of less than a full year are
not annualized.
7. YEAR 2000
Like other investment companies, financial and business organizations
around the world, the Fund could be adversely affected if the computer
systems it uses and those used by the Fund's other major service providers
do not properly process and calculate date-related information and data
from and after January 1, 2000. This is commonly known as the "Year 2000
Issue."
The Fund has assessed its computer systems and the systems compliance
issues of its other major service providers. The Fund has taken steps that
it believes are reasonably designed to address the Year 2000 Issue with
respect to the computer systems it uses and has obtained assurances that
comparable steps are being taken by its other major service providers. At
this time, however, there can be no assurance that these steps will be
sufficient to address all Year 2000 Issues. The inability of the Fund or
its third party providers to timely complete all necessary procedures to
address the Year 2000 Issue could have a material adverse effect on the
Fund's operations. Management will continue to monitor the status of and
its exposure to this issue. For the period ending June 30, 1999, the Fund
incurred no Year 2000 related expenses, and it does not expect to incur
significant Year 2000 expenses in the future.
<PAGE>
The Fund is in the process of establishing a contingency plan to address
recovery from unavoided or unavoidable Year 2000 problems, if any.
<PAGE>
- -------------------------------------------------------------------------------
PW Technology Partners, L.P.
- -------------------------------------------------------------------------------
Schedule of investments in funds at June 30, 1999 (Unaudited)
- ---------------------------------------------------------------------
Fund Name Cost Fair Value Revenues
CONFIDENIAL PORTION - FINANCIALS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC.
Total $ 113,000,000 $120,593,749 $ 7,593,749
------------- ------------ -----------
Other Assets, less Liabilities 261,479
-------
Partners' Capital - Net Assets 120,855,228
===========
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
PERIOD FROM APRIL 1, 1999
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1999
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
PERIOD FROM APRIL 1, 1999
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1999
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
<PAGE>
Report of Independent Auditors
To the Partners of PW Technology Partners, L.P.
We have audited the accompanying statement of assets, liabilities and partners'
capital of PW Technology Partners, L.P. as of December 31, 1999, and the related
statements of operations and changes in partners capital - net assets for the
period from April 1, 1999 (commencement of operations) to December 31, 1999.
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 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 investments owned as of December 31, 1999,
by correspondence with the general partners of the investment funds. 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 PW Technology Partners, L.P. at
December 31, 1999, and the results of its operations and changes in its partners
capital - net assets for the period from April 1, 1999 to December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
---------------------
New York, New York
February 17, 2000
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
STATEMENT OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL
- -------------------------------------------------------------------------------
DECEMBER 31, 1999
- -------------------------------------------------------------------------------
ASSETS
Investments in funds, at value (Cost $273,010,000) $ 385,577,206
Cash and cash equivalents 434,567
Prepaid assets 32,172
- -------------------------------------------------------------------------------
TOTAL ASSETS 386,043,945
- -------------------------------------------------------------------------------
LIABILITIES
Payables:
Management fee 272,203
Professional fees 39,000
Administration fee 27,001
Miscellaneous fees 24,267
- -------------------------------------------------------------------------------
TOTAL LIABILITIES 362,471
- -------------------------------------------------------------------------------
NET ASSETS $ 385,681,474
- -------------------------------------------------------------------------------
PARTNERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions $ 274,965,586
Accumulated net investment loss (1,851,318)
Accumulated net unrealized appreciation on investments 112,567,206
- -------------------------------------------------------------------------------
PARTNERS' CAPITAL - NET ASSETS $ 385,681,474
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
PERIOD FROM APRIL 1,1999 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Interest $ 30,281
- ---------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 30,281
- ---------------------------------------------------------------------------
OPERATING EXPENSES
Management 1,338,563
Organizational costs 208,449
Administration 206,659
Professional 80,478
Miscellaneous 47,450
- ---------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 1,881,599
- ---------------------------------------------------------------------------
NET INVESTMENT LOSS (1,851,318)
- ---------------------------------------------------------------------------
UNREALIZED GAIN FROM INVESTMENTS
- ---------------------------------------------------------------------------
Net change in unrealized appreciation from investments
during the period 112,567,206
- ---------------------------------------------------------------------------
UNREALIZED GAIN FROM INVESTMENTS 112,567,206
- ---------------------------------------------------------------------------
INCREASE IN PARTNERS' CAPITAL
DERIVED FROM OPERATIONS $ 110,715,888
- ---------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' CAPITAL - NET ASSETS
- -------------------------------------------------------------------------------
PERIOD FROM APRIL 1, 1999 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1999
- -------------------------------------------------------------------------------
FROM INVESTMENT ACTIVITIES
Net investment loss $ (1,851,318)
Change in unrealized appreciation from investments 112,567,206
- ---------------------------------------------------------------------------
INCREASE IN PARTNERS' CAPITAL
DERIVED FROM OPERATIONS 110,715,888
- ---------------------------------------------------------------------------
PARTNERS' CAPITAL TRANSACTIONS
Proceeds from Limited Partner subscriptions 273,965,586
Proceeds from General Partner subscriptions 1,000,000
- ---------------------------------------------------------------------------
INCREASE IN PARTNERS' CAPITAL
DERIVED FROM CAPITAL TRANSACTIONS 274,965,586
PARTNERS' CAPITAL AT BEGINNING OF PERIOD -
- ---------------------------------------------------------------------------
PARTNERS' CAPITAL AT END OF PERIOD $ 385,681,474
- ---------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
PW TECHNOLOGY PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
DECEMBER 31, 1999
- -------------------------------------------------------------------------------
1. ORGANIZATION
PW Technology Partners, L.P. (the "Fund") was organized as a limited
partnership under the laws of Delaware on December 28, 1998. The Fund is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a closed-end, non-diversified, management investment company. The
Fund's investment objective is to maximize capital appreciation over the
long-term. The Fund pursues its investment objective by deploying its
assets primarily among a select group of portfolio managers who invest
primarily in, or who have particular knowledge within, the technology
sector. Generally, such portfolio managers conduct their investment
programs through unregistered investment partnerships (collectively, the
"Investment Funds"), in which the Fund invests as a limited partner along
with other investors. Operations of the Fund commenced on April 1, 1999.
The General Partner of the Fund is PW Fund Advisor, L.L.C. (the "Manager"
or "PWFA"), a Delaware limited liability company. The Manager is
an indirect wholly-owned subsidiary of Paine Webber Group Inc., and is
registered as an investment adviser under the Investment Advisers Act of
1940, as amended. The Fund's General Partner, to the fullest extent
permitted by applicable law, has irrevocably delegated to a group of
individuals (the "Directors") its rights and powers to manage and control
the business affairs of the Fund, including the exclusive authority to
oversee and to establish policies regarding the management, conduct and
operation of the Fund's business. The Directors have engaged the Manager to
provide investment advice regarding the allocation to Investment Funds
and the responsibility of the day-to-day management of the Fund.
Initial and additional subscriptions for interests by eligible investors
may be accepted at such times as the Manager may determine. The Fund
reserves the right to reject any subscription for interests in the Fund.
The Fund from time to time may offer to repurchase interests pursuant to
written tenders to Partners. These repurchases will be made at such times
and on such terms as may be determined by the Directors, in their complete
and exclusive discretion. The Manager expects that generally, beginning in
2001, it will recommend to the Directors that the Fund offer to repurchase
interests from Partners twice in each year, in June and December, and
intends to recommend the making of an offer to repurchase interests
effective as of March 31, 2000 and December 2000. Limited Partners can only
transfer or assign their partnership interests with the approval of the
Manager.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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 Fund's financial statements are
reasonable and prudent; however, actual results could differ from these
estimates.
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.
Cash and cash equivalents consist of monies invested in money market funds
and are accounted for at cost plus accrued interest as reported by the
money market funds.
A. PORTFOLIO VALUATION
Net asset value of the Fund will be determined by or at the direction of
the Manager as of the close of business at the end of any fiscal period in
accordance with the valuation principles set forth below or as may be
determined from time to time pursuant to policies established by the
Directors.
The Fund's investments in Investment Funds are carried at fair value as
determined by the Fund's pro-rata interest in the net assets of each
Investment Fund. All valuations utilize financial information supplied by
each Investment Fund and are net of management and performance incentive
fees or allocations payable to the Investment Funds' managers as required
by the Investment Funds' agreements. The underlying investments of each
Investment Fund are accounted for at fair value as described in each
Investment Fund's financial statements.
Distributions received, whether in the form of cash or securities, are
applied as a reduction of the investment's cost when identified by the
Investment Funds' as a return of capital.
B. FUND EXPENSES
The Fund will bear all expenses incurred in the business of the Fund,
including, but not limited to, the following: all costs and expenses
related to portfolio transactions and positions for the Fund's account;
legal fees; accounting and auditing fees; costs of insurance; registration
expenses; certain offering and organization costs; and expenses of meetings
of Directors and Limited Partners.
<PAGE>
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
C. INCOME TAXES
No provision for the payment of Federal, state or local income taxes has
been provided on the profits of the Fund. Each Partner is individually
required to report on its own tax return its distributive share of the
Fund's taxable income or loss.
3. MANAGEMENT FEE, PERFORMANCE BONUS, RELATED PARTY TRANSACTIONS AND OTHER
PWFA provides certain management and administrative services to the Fund,
including, among other things, providing office space and other support
services. In consideration for such services, the Fund will pay PWFA a
monthly management fee at an annual rate of 1% of the Fund's net assets,
excluding assets attributable to the General Partner's capital account (the
"Fee"). The Fee is debited against the Limited Partners' capital accounts.
A portion of the Fee will be paid by PWFA to its affiliates. PaineWebber
Inc. acts as a placement agent for the Fund, without special compensation
from the Fund, and will bear its own costs associated with its activities
as placement agent.
The increase in partners' capital derived from operations is initially
allocated to the capital accounts of all Partners on a pro-rata basis. In
accordance with the Partnership Agreement, the Manager is then allocated an
amount based on the performance of the Fund (the "Performance Bonus") for
the Measurement Period, as defined in the Confidential Memorandum (i.e. the
period commencing on the admission of a Limited Partner to the Fund, and
thereafter each period commencing on the day following the last Measuring
Period and ending generally on the first to occur of (1) a fiscal year-end
or (2) a whole or partial redemption). The Performance Bonus is calculated
separately with respect to each Limited Partner. The Performance Bonus is
equal to 1% of the balance of the Limited Partner's capital account at the
end of the Measurement Period, provided that such appreciation (net of any
Performance Bonus) exceeds the Limited Partner's threshold return. The
threshold return is the amount that a Limited Partner would have earned for
a fiscal year if it had received an annualized rate of return of 20% on its
opening capital account balance, as adjusted. The Performance Bonus for the
period ended December 31, 1999 totaled $3,575,388 and was recorded as an
increase to the General Partner's capital account.
Each Director, who is not an "interested person" of the Fund, as defined by
the 1940 Act, receives an annual retainer of $5,000 plus a fee for each
meeting attended. Any Director who is an "interested person" does not
receive any annual or other fee from the Fund. All Directors are reimbursed
by the Fund for all reasonable out-of-pocket expenses incurred by them in
performing their duties.
PFPC Trust Company (an affiliate of PNC Bank, N.A.) serves as custodian of
the Fund's assets and provides custodial services for the Fund. PFPC Inc.
(also an affiliate of PNC Bank, N.A.) serves as Administrator and
Accounting Agent to the Fund and in that capacity provides certain
accounting, record keeping, tax and investor related services. The Fund
pays a monthly fee to the Administrator based primarily upon average net
assets, subject to a minimum monthly fee, and will reimburse certain of the
Administrator's expenses.
4. SECURITIES TRANSACTIONS
Aggregate purchases of Investment Funds for the period ended December 31,
1999, amounted to $273,010,000.
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 appreciation on
investments was $112,567,206, consisting of $112,567,206 gross unrealized
appreciation.
5. INVESTMENTS
As of December 31, 1999, the Fund had investments in Investment Funds, none
of which were related parties. The Fund's investments are summarized below
based on the investment objectives of the specific Investment Funds at
December 31, 1999.
INVESTMENT OBJECTIVE COST FAIR VALUE
-------------------- ---- ----------
Long/Short Equity $273,010,000 $385,577,206
The following table lists the Fund's investments in Investment Funds as of
December 31, 1999. The agreements related to investments in Investment
Funds provide for compensation to the general partners/managers in the form
of management fees of 1% to 2% (per annum) of net assets and performance
incentive fees or allocations of 20% of net profits earned. The Investment
Funds provide for periodic redemptions, with lock up provisions ranging
from one to two years from initial investment.
<TABLE>
<CAPTION>
% of
Fund's
Investment Fund: Cost Revenues Fair Value Capital
<S> <C> <C> <C> <C>
CONFIDENIAL PORTION - FINANCIALS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SEC.
Total $ 273,010,000 $112,567,206 $385,577,206 100.0
------------- ------------ ------------ ------
Other Assets, less Liabilities 104,268 0.0
Partners' Capital - Net Assets $385,681,474 100.0
------------ -----
</TABLE>
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the Investment Funds in which the Fund
invests trade various financial instruments and enter into various
investment activities with off-balance sheet risk. These include, but are
not limited to, short selling activities, writing option contracts,
contracts for differences, and equity swaps.
7. FINANCIAL HIGHLIGHTS
The following represents the ratios to average net assets and other
supplemental information for the period indicated:
FOR THE PERIOD ENDED
DECEMBER 31, 1999
-------------------
Ratio of net investment loss to average net assets -1.38%*
Ratio of expenses to average net assets 1.41%*
Total return 50.96%**
<PAGE>
* Annualized.
** Total return assumes a purchase of a limited partnership interest in the
Fund on the first day and a sale of the Fund interest on the last day of
the period noted, after Performance Bonus to the Manager, if any. Total
return for a period of less than a full year is not annualized.
8. YEAR 2000 (UNAUDITED)
PFPC Inc. experienced no significant disruptions in mission critical
information technology and non-information technology systems and believes
those systems successfully responded to the Year 2000 date change. PFPC
Inc. is not aware of any material problems resulting from Year 2000 issues,
either with its products, its internal systems, or the products and
services of third parties. PFPC Inc. will continue to monitor its mission
critical computer applications and those of its suppliers and vendors
throughout the Year 2000 to ensure that any latent Year 2000 matters that
may arise are addressed promptly.
<PAGE>
EXHIBIT C
Form of Letter of Transmittal
<PAGE>
LETTER OF TRANSMITTAL
REGARDING INTERESTS
IN
PW TECHNOLOGY PARTNERS, L.P.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 23, 2000
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS LETTER OF TRANSMITTAL MUST BE
RECEIVED BY PFPC INC. EITHER BY MAIL OR BY
FAX BY 12:00 MIDNIGHT, NEW YORK TIME, ON
WEDNESDAY, MARCH 22, 2000, UNLESS THE
OFFER IS EXTENDED.
COMPLETE THE LAST PAGE OF THIS LETTER OF TRANSMITTAL AND RETURN
OR DELIVER IN THE ENCLOSED POSTAGE-PAID ENVELOPE TO:
PFPC Inc.
P.O. Box 358
Claymont, DE 19703
Attn: Annie Mussoni
For additional information:
Phone: (877) 431-1973
Fax: (302) 791-3225
(302) 791-2386
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to PW Technology Partners, L.P., a
closed-end, non-diversified, management investment company organized under the
laws of the State of Delaware (the "Partnership"), the partnership interest in
the Partnership or portion thereof held by the undersigned, described and
specified below, on the terms and conditions set forth in the offer to purchase,
dated February 23, 2000 ("Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constituted the
"Offer"). THE TENDER AND THIS LETTER OF TRANSMITTAL ARE SUBJECT TO ALL THE TERMS
AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, INCLUDING, BUT NOT LIMITED
TO, THE ABSOLUTE RIGHT OF THE PARTNERSHIP TO REJECT ANY AND ALL TENDERS
DETERMINED BY IT, IN ITS SOLE DISCRETION, NOT TO BE IN THE APPROPRIATE FORM.
The undersigned hereby sells to the Partnership the partnership
interest in the Partnership or portion thereof tendered hereby pursuant to the
Offer. The undersigned hereby warrants that the undersigned has full authority
to sell the partnership interest in the Partnership or portion thereof tendered
hereby and that the Partnership will acquire good title thereto, free and clear
of all liens, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale thereof, and not subject to any adverse claim,
when and to the extent the same are purchased by it. Upon request, the
undersigned will execute and deliver any additional documents necessary to
complete the sale in accordance with the terms of the Offer.
The undersigned recognizes that under certain circumstances set forth
in the Offer, the Partnership may not be required to purchase any of the
partnership interests in the Partnership or portions thereof tendered hereby.
Payment of the cash portion of the purchase price for the partnership
interest in the Partnership or portion thereof of the undersigned (the "Cash
Payment"), as described in Section 6 of the Offer to Purchase, shall be sent to
the undersigned by wire transfer to the undersigned's brokerage account at
PaineWebber Incorporated ("PaineWebber") if such partner has a PaineWebber
account. (The undersigned hereby represents and warrants that the undersigned
understands that, for cash payments wired directly to a partner's brokerage
account, upon a withdrawal of such cash payment from such account, PaineWebber
will impose such fees as it would customarily assess upon the withdrawal of cash
from such brokerage account.) If such partner does not have a PaineWebber
account, the Cash Payment will be sent directly to its mailing address as listed
in the Partnership's records, unless such partner advises the Partnership in
writing of a change in its mailing address. A promissory note reflecting the
contingent payment portion of the purchase price, if any, as described in
Section 6 of the Offer to Purchase, will be deposited directly to the
undersigned's brokerage account with PaineWebber if such partner has a
PaineWebber account. (Any contingent payment due pursuant to the Note will also
be deposited directly to the tendering partner's brokerage account at
PaineWebber, and, upon a withdrawal of such contingent payment from such
account, PaineWebber will impose such fees as it would customarily assess upon
the withdrawal of cash from such brokerage account.) If such partner does not
have a PaineWebber account, the Note will be held for such partner by the
Partnership's Administrator, PFPC Inc. The undersigned recognizes that the
amount of the Cash Payment will be based on the unaudited estimated net asset
value as of March 31, 2000, of the partnership interest or portion thereof
tendered, and that the contingent payment portion of the purchase price, if any,
will be determined upon completion of the audit of the Partnership's financial
statements for calendar year 2000, which is anticipated to be completed not
later than 60 days after the Partnership's fiscal year end, and will be paid in
cash within ten days thereafter, or on such earlier date as the Partnership's
Directors may determine.
All authority herein conferred or agreed to be conferred shall survive
the death or incapacity of the undersigned and the obligation of the undersigned
hereunder shall be binding on the heirs, personal representatives, successors
and assigns of the undersigned. Except as stated in Section 5 of the Offer to
Purchase, this tender is irrevocable.
<PAGE>
PLEASE FAX OR MAIL (THIS PAGE ONLY) IN THE
ENCLOSED POSTAGE-PAID ENVELOPE TO:
PFPC Inc.
P.O. Box 358
Claymont, DE 19703
Attn: Annie Mussoni
For additional information:
Phone: (877) 431-1973
Fax: (302) 791-3225
(302) 791-2386
PART 1. NAME:
Name of Partner: ______________________________________________________
SS# or Taxpayer ID #: ___________________________ Phone #: ____________
PaineWebber Brokerage Account #: ______________________________________
Date: ___________________
PART 2. AMOUNT OF PARTNERSHIP INTEREST IN THE PARTNERSHIP TO BE TENDERED:
/ / Entire partnership interest.
/ / Portion of partnership interest expressed as a specific dollar value.
$_____________________ [Subject to maintenance of a minimum partnership
interest equal to $125,000 ($25,000 for certain eligible investors who
are identified in the Partnership's Confidential Memorandum), net of the
Performance Bonus (the "Required Minimum Balance").] The undersigned
understands that if the undersigned tenders an amount that would cause
the undersigned's capital account balance to fall below the Required
Minimum Balance, the Partnership reserves the right to reduce the amount
to be purchased from the undersigned so that the Required Minimum Balance
is maintained.
PART 3. SIGNATURE(S):
FOR INDIVIDUAL INVESTORS AND JOINT TENANTS:
SIGNATURE: ______________________________________________
(Signature of Owner(s) Exactly as Appeared on
Subscription Agreement/Investor Application)
PRINT NAME OF INVESTOR: _____________________________________________
JOINT TENANT SIGNATURE: _____________________________________________
(If joint tenants, BOTH MUST (Signature of Owner(s) Exactly as Appeared on
SIGN.) Subscription Agreement/Investor Application)
PRINT NAME OF JOINT TENANT: ______________________________________________
- -------------------------------------------------------------------------------
FOR OTHER INVESTORS:
PRINT NAME OF INVESTOR: ______________________________________________
SIGNATURE: ______________________________________________
(Signature of Owner(s) Exactly as Appeared on
Subscription Agreement/Investor Application)
PRINT NAME OF SIGNATORY AND ______________________________________________
TITLE:
CO-SIGNATORY IF NECESSARY: ______________________________________________
(Signature of Owner(s) Exactly as Appeared on
Subscription Agreement/Investor Application)
PRINT NAME AND TITLE OF _____________________________________________
CO-SIGNATORY:
<PAGE>
EXHIBIT D
Form of Notice of Withdrawal of Tender
<PAGE>
NOTICE OF WITHDRAWAL OF TENDER
REGARDING INTERESTS IN
PW TECHNOLOGY PARTNERS, L.P.
TENDERED PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 23, 2000
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT, AND THIS NOTICE OF WITHDRAWAL MUST BE
RECEIVED BY PFPC INC. EITHER BY MAIL OR BY
FAX BY 12:00 MIDNIGHT, NEW YORK TIME, ON
WEDNESDAY, MARCH 22, 2000, UNLESS THE
OFFER IS EXTENDED.
COMPLETE THIS NOTICE OF WITHDRAWAL AND RETURN OR DELIVER TO:
PFPC Inc.
P.O. Box 358
Claymont, DE 19703
Attn: Annie Mussoni
For additional information:
Phone: (877) 431-1973
Fax: (302) 791-3225
(302) 791-2386
Ladies and Gentlemen:
Please withdraw the tender previously submitted by the undersigned in
a Letter of Transmittal dated __________________.
Such tender was in the amount of: $______________
PaineWebber Brokerage Account: #______________
Date: _______________
<PAGE>
Signature(s).
FOR INDIVIDUAL INVESTORS AND JOINT TENANTS:
SIGNATURE: ______________________________________________
(Signature of Owner(s) Exactly as Appeared on
Subscription Agreement/Investor Application)
PRINT NAME OF INVESTOR: _____________________________________________
JOINT TENANT SIGNATURE: _____________________________________________
(If joint tenants, BOTH MUST (Signature of Owner(s) Exactly as Appeared on
SIGN.) Subscription Agreement/Investor Application)
PRINT NAME OF JOINT TENANT: ______________________________________________
- -------------------------------------------------------------------------------
FOR OTHER INVESTORS:
PRINT NAME OF INVESTOR: ______________________________________________
SIGNATURE: ______________________________________________
(Signature of Owner(s) Exactly as Appeared on
Subscription Agreement/Investor Application)
PRINT NAME OF SIGNATORY AND ______________________________________________
TITLE:
CO-SIGNATORY IF NECESSARY: ______________________________________________
(Signature of Owner(s) Exactly as Appeared on
Subscription Agreement/Investor Application)
PRINT NAME AND TITLE OF _____________________________________________
CO-SIGNATORY:
<PAGE>
EXHIBIT E
Forms of Letters dated April 10, 2000 from the Partnership
to Partners in connection with acceptance of offers of tender
<PAGE>
THIS LETTER IS BEING SENT TO YOU IF YOU TENDERED YOUR ENTIRE INTEREST IN THE
PARTNERSHIP.
April 10, 2000
Dear Partner:
PW Technology Partners, L.P. (the "Partnership") has received and accepted your
tender request. Enclosed is a statement showing the breakdown of your capital
withdrawal and the manner in which it is being distributed, in accordance with
the tender offer.
Since you have tendered your entire investment, you have been paid 95% of the
amount requested, in accordance with the terms of the tender offer. The funds
were wired directly into your PaineWebber brokerage account if you have a
PaineWebber account. If you do not have a PaineWebber account, the funds were
mailed directly to you at your mailing address as listed in the Partnership's
records, unless you advised the Partnership in writing of a change in your
mailing address.
The remaining 5% of the amount requested is a contingent portion of the
repurchased interest and is valued based on the unaudited estimated net asset
value of the Partnership as of March 31, 2000, and is subject to year-end audit
adjustments which may cause a change in the value of the contingent portion of
the repurchased interest. The contingent portion, together with interest, will
be paid (subject to audit adjustment) within ten days after the conclusion of
the 2000 year-end audit, or on such earlier date as the Partnership's Directors
may determine, according to the terms of the tender offer. We expect the audit
to be completed by the end of February 2001.
Should you have any questions, please feel free to contact the Partnership's
Administrator, PFPC Inc., at (877) 431-1973.
Sincerely,
PW Technology Partners, L.P.
Enclosure
<PAGE>
THIS LETTER IS BEING SENT TO YOU IF YOU TENDERED A PORTION OF YOUR INTEREST IN
THE PARTNERSHIP.
April 10, 2000
Dear Partner:
PW Technology Partners, L.P. (the "Partnership") has received and accepted your
tender request. Enclosed is a statement showing the breakdown of your capital
withdrawal.
Since you have tendered a portion of your investment, you have been paid 100% of
the amount requested in cash, in accordance with the terms of the tender offer.
The funds were wired directly into your PaineWebber brokerage account if you
have a PaineWebber account. If you do not have a PaineWebber account, the funds
were mailed directly to you at your mailing address as listed in the
Partnership's records, unless you advised the Partnership in writing of a change
in your mailing address. You remain a partner with respect to the interest that
you did not tender.
Should you have any questions, please feel free to contact the Partnership's
Administrator, PFPC Inc., at (877) 431-1973.
Sincerely,
PW Technology Partners, L.P.
Enclosure
