WHISTLER FUND, L.L.C.
FINANCIAL STATEMENTS
PERIOD FROM OCTOBER 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<PAGE>
WHISTLER FUND, L.L.C.
FINANCIAL STATEMENTS
PERIOD FROM OCTOBER 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
CONTENTS
Report of Independent Auditors ............................................ 1
Statement of Assets, Liabilities and Members' Capital - Net Assets ........ 2
Statement of Operations ................................................... 3
Statement of Changes in Members' Capital - Net Assets ..................... 4
Statement of Cash Flows ................................................... 5
Notes to Financial Statements ............................................. 6
<PAGE>
Report of Independent Auditors
To the Members of
Whistler Fund, L.L.C.
We have audited the accompanying statement of assets, liabilities and members'
capital - net assets of Whistler Fund, L.L.C. (the "Company") and the related
statements of operations, changes in members' capital - net assets and cash
flows for the period from October 1, 1999 (commencement of operations) to March
31, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our 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 March 31, 2000 by
correspondence with management of the underlying 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 Whistler Fund, L.L.C. at March
31, 2000, and the results of its operations, its cash flows and the changes in
its members' capital - net assets for the period from October 1, 1999 to March
31, 2000, in conformity with accounting principles generally accepted in the
United States.
May 19, 2000
1
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WHISTLER FUND, L.L.C.
STATEMENT OF ASSETS, LIABILITIES AND MEMBERS' CAPITAL - NET ASSETS
(IN THOUSANDS)
--------------------------------------------------------------------------------
MARCH 31, 2000
ASSETS
Cash and cash equivalents $ 6,275
Investments in investment funds, at fair value
(identified cost - $36,458) 40,360
Interest receivable 14
Other assets 6
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TOTAL ASSETS 46,655
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LIABILITIES
Management fee payable 37
Contributions received in advance 3,346
Accrued expenses 187
-------
TOTAL LIABILITIES 3,570
-------
NET ASSETS $43,085
=======
MEMBERS' CAPITAL - NET ASSETS
Represented by:
Capital contributions, (net of syndication costs of $100) $39,907
Capital withdrawals (177)
Accumulated net investment loss (555)
Accumulated net realized gains 8
Accumulated net unrealized appreciation 3,902
-------
MEMBERS' CAPITAL - NET ASSETS $43,085
=======
The accompanying notes are an integral part of these financial statements.
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WHISTLER FUND, L.L.C.
STATEMENT OF OPERATIONS (IN THOUSANDS)
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FOR THE PERIOD FROM
OCTOBER 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
INVESTMENT INCOME
Interest $ 32
------
EXPENSES
OPERATING EXPENSES:
Organizational expenses 189
Management fee 163
Professional fees 153
Administration fees 33
Board of Managers' fees and expenses 25
Insurance expense 11
Miscellaneous 9
Custodian fees 4
------
TOTAL OPERATING EXPENSES 587
------
NET INVESTMENT LOSS (555)
------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
NET CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS 3,902
NET REALIZED GAIN ON INVESTMENTS 8
------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 3,910
------
INCREASE IN MEMBERS' CAPITAL DERIVED FROM
INVESTMENT ACTIVITIES $3,355
======
The accompanying notes are an integral part of these financial statements.
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WHISTLER FUND, L.L.C.
STATEMENT OF CHANGES IN MEMBERS' CAPITAL - NET ASSETS (IN THOUSANDS)
--------------------------------------------------------------------------------
FOR THE PERIOD FROM
OCTOBER 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
FROM INVESTMENT ACTIVITIES
Net investment loss $ (555)
Net change in unrealized appreciation on
investments 3,902
Net realized gain on investments 8
-------
INCREASE IN MEMBERS' CAPITAL DERIVED
FROM INVESTMENT ACTIVITIES 3,355
MEMBERS' CAPITAL TRANSACTIONS
Capital contributions 40,007
Capital withdrawals (177)
Syndication costs (100)
-------
INCREASE IN MEMBERS' CAPITAL
DERIVED FROM CAPITAL TRANSACTIONS 39,730
MEMBERS' CAPITAL AT BEGINNING OF PERIOD -
-------
MEMBERS' CAPITAL AT END OF PERIOD $43,085
=======
The accompanying notes are an integral part of these financial statements.
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WHISTLER FUND, L.L.C.
STATEMENT OF CASH FLOWS (IN THOUSANDS)
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<TABLE>
<CAPTION>
FOR THE PERIOD FROM
OCTOBER 1, 1999
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Increase in members' capital derived from investment activities $ 3,355
Adjustments to reconcile net increase in members' capital derived
from investment activities to net cash used in operating activities:
Increase in investments in investment funds at fair value (40,360)
Increase in interest receivable (14)
Increase in other assets (6)
Increase in accrued expenses 187
Increase in management fee payable 37
--------
NET CASH USED IN OPERATING ACTIVITIES (36,801)
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributions - (net of syndication costs of $100) 39,907
Capital withdrawals (177)
Contributions received in advance 3,346
--------
NET CASH PROVIDED BY FINANCING ACTIVITIES 43,076
NET CHANGE IN CASH 6,275
Cash at beginning of period -
--------
Cash at end of period $ 6,275
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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<PAGE>
WHISTLER FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000
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1. ORGANIZATION
Whistler Fund, L.L.C. (the "Company") is a newly organized Delaware limited
liability company, registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a closed-end, non-diversified, management
investment company. The Company seeks to achieve capital appreciation while
attempting to limit risk through the use of multi-strategy, multi-manager,
diversified investment philosophy. It pursues the objective through
investment strategies which have a low correlation with the equity and fixed
income markets, or which, when balanced with other strategies, lower the
correlation of the Company's total performance to the equity and fixed
income markets.
CIBC Oppenheimer Advisers, L.L.C. (the "Adviser"), a Delaware limited
liability company, serves as the investment advisor of the Company. CIBC
World Markets Corp.("CIBC WM"), the managing member of the Adviser, will
rely on its Hedge Fund Due Diligence Committee to oversee the Adviser's
investment decision making on behalf of the Company.
Generally, initial and additional subscriptions for interests by eligible
investors may be accepted as of the first day of each calendar quarter. The
Company reserves the right to reject any subscriptions for interests in the
Company. The Adviser, from time to time and in its complete and exclusive
discretion, may determine to cause the Company to repurchase interests or
portions thereof from members other than the Adviser in its capacity as the
Special Advisory Member pursuant to written tenders by members on such terms
and conditions as it may determine.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the Adviser to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. The Adviser believes that the
estimates utilized in preparing the Company's financial statements are
reasonable and prudent; however, actual results could differ from these
estimates.
Investments in investment funds ("investee companies") are subject to the
terms of the respective limited partnership agreements, limited liability
company agreements and offering memorandums. The Company values these
investments at fair value based on financial data supplied by the investee
companies. Substantially all of the underlying investments of the investee
companies are comprised of readily marketable securities.
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.
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WHISTLER FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000 (continued)
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
a. PORTFOLIO VALUATION
The net asset value of the Company is determined 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 Board of Managers.
The Company's investments in investment funds are carried at fair value as
determined by the Company'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 Company will bear all expenses incurred in the business of the Company,
including, but not limited to, the following: all costs and expenses related
to portfolio transactions and positions for the Company'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 members.
c. INCOME TAXES
No provision for the payment of Federal, state or local income taxes has
been provided on the profits of the Company. Each member is individually
required to report on its own tax return its distributive share of the
Company's taxable income or loss.
3. MANAGEMENT FEE, PROFIT ALLOCATION, RELATED PARTY TRANSACTIONS AND OTHER
CIBC WM provides certain management and administrative services to the
Company, including, among other things, providing office space and other
support services. In consideration for such services, the Company will pay
CIBC WM a monthly management fee at a monthly rate of .08333% (1% on an
annualized basis) of the Company's net assets. CIBC WM will pay a portion of
the fee to its affiliates. CIBC WM acts as a non-exclusive placement agent
for the Company and will bear costs associated with its activities as
placement agent.
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<PAGE>
WHISTLER FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000 (continued)
--------------------------------------------------------------------------------
3. MANAGEMENT FEE, PROFIT ALLOCATION, RELATED PARTY TRANSACTIONS AND OTHER
(CONTINUED)
Net profits or net losses of the Company for each fiscal period will be
allocated among and credited to or debited against the capital accounts of
all members (but not the Special Advisory Account, as defined) as of the
last day of each fiscal period in accordance with members' respective
investment percentages for the fiscal period. Generally at the end of each
fiscal year, an incentive allocation of 10% of the profits, if any, that
have been credited to the capital account of a member during the period (an
"Incentive Allocation") will be debited from the member's capital account
(including the Adviser's capital account) and credited to the Special
Advisory Account. For October 1, 1999 (commencement of operations) to March
31, 2000, the incentive allocation earned was $342,420.
Each member of the Board of Managers ("Manager") who is not an "interested
person" of the Company, as defined by the Act, receives an annual retainer
of $5,000 plus a fee for each meeting attended. Currently, no Manager is an
"interested person" of the Company. All Managers are reimbursed by the
Company for all reasonable out-of-pocket expenses incurred by them in
performing their duties.
PFPC Trust Company (an affiliate of PNC Bank, N.A.) serves as custodian of
the Company's assets and provides custodial services for the Company. PFPC
Inc. (also an affiliate of PNC Bank, N.A.) serves as administrator and
accounting agent to the Company and in that capacity provides certain
accounting, record keeping, tax and investor related services. The Company
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 and sales of investment funds for the period ended March
31, 2000, amounted to $36,958,175 and $508,175 respectively. At March 31,
2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes. At
March 31, 2000, accumulated net unrealized appreciation on investments was
$3,901,464, consisting of $5,503,532 gross unrealized appreciation and
$1,602,068 gross unrealized depreciation.
5. INVESTMENTS IN INVESTMENT FUNDS
As of March 31, 2000, the Company had investments in investment funds, none
of which were related parties.
The following table lists the Company's investments in investment funds as
of March 31, 2000. The agreements related to investments in investment funds
provide for compensation to the members in the form of management fees of 1%
to 2% (per annum) of net assets and performance incentive fees or
allocations of 15% to 25% of net profits earned.
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WHISTLER FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000 (continued)
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5. INVESTMENTS IN INVESTMENT FUNDS (CONTINUED)
<TABLE>
<CAPTION>
% OF COMPANY'S
INVESTMENT FUND: COST FAIR VALUE CAPITAL
---------------- ---- ---------- --------
<S> <C> <C> <C>
Adelphi Europe Partners, L.P. $1,250,000 $1,908,249 4.43%
Aries Domestic Fund II, L.P. 1,200,000 2,159,725 5.01%
Avery Partners, L.P. 1,250,000 1,326,136 3.08%
Basswood Financial Partners, L.P. 1,450,000 1,412,075 3.28%
Bay Harbour, 90-1, Ltd. 1,250,000 1,303,818 3.03%
Bedford Falls Investors, L.P. 1,150,000 1,381,656 3.21%
Clinton Amsterdam Fund, L.P. 658,175 689,188 1.60%
Conseiller Fund, L.P. 1,000,000 1,027,824 2.38%
Dancing Bear Partners, L.P. 1,850,000 1,800,595 4.18%
EOS Partners, L.P. 1,125,000 1,355,996 3.15%
Everest Capital Fund, L.P. 1,450,000 1,915,476 4.45%
Highbridge Capital Corp. 1,700,000 1,947,975 4.52%
Icarus Partners, L.P. 1,600,000 1,401,507 3.25%
IIU Convertible Fund, Plc. 675,000 935,520 2.17%
Ivory Capital II, L.P. 1,250,000 1,296,000 3.01%
Kodiak Capital, L.P. 1,700,000 1,520,005 3.53%
Lipper Convertibles Series II, L.P. 1,000,000 1,069,974 2.48%
Maverick Fund USA, Ltd. 2,000,000 2,381,726 5.53%
Millgate Partners, L.P. 1,700,000 1,346,698 3.12%
MSC Partners, L.P. 1,650,000 1,710,067 3.97%
Palladin Enhanced Return Partners, L.P. 1,000,000 1,081,098 2.51%
Pequod Investments, L.P. 1,250,000 1,620,709 3.76%
Polar Bear Fund 850,000 492,129 1.14%
Rocker Partners, L.P. 1,850,000 1,425,002 3.31%
Stonehill Institutional Partners, L.P. 1,000,000 1,059,391 2.46%
Wellington Partners, L.P. 1,500,000 1,824,284 4.23%
Willis Coroon Catastrophe Investment Fund, L.P. 850,000 849,922 1.97%
WPG Farber Present Fund, L.P. 1,250,000 2,116,894 4.91%
--------- --------- -----
Total $36,458,175 $40,359,639 93.67%
===========
Other Assets, less Liabilities 2,725,414 6.33%
----------- -------
Members' Capital - Net Assets $43,085,053 100.00%
=========== =======
</TABLE>
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the investment funds in which the Company
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. The Company's risk of loss in
these investment funds is limited to the value of these investments reported
by the Company. The investment funds provide for periodic redemptions with
lock up provisions for some investments. These lock up provisions range from
six months to two years from the initial investment.
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<PAGE>
WHISTLER FUND, L.L.C.
NOTES TO FINANCIAL STATEMENTS - MARCH 31, 2000 (continued)
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6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (CONTINUED)
At March 31, 2000 cash equivalents consist of approximately $3,025,000 held
by one U.S. financial institution.
7. FINANCIAL HIGHLIGHTS
The following represents the ratios to average net assets and other
supplemental information for the period indicated:
PERIOD FROM OCTOBER 1, 1999,
(COMMENCEMENT OF OPERATIONS)
TO MARCH 31, 2000
Ratio of net investment loss to average net assets (3.47%)*
Ratio of expenses to average net assets 3.67%*
Total return 11.53%**
* Annualized.
** Total return assumes a purchase of an interest in the Company on the
first day and a sale of the interest on the last day of the period
noted, before incentive allocation to the Special Advisory Member, if
any. Total returns for a period of less than a full year are not
annualized.
8. SUBSEQUENT EVENTS
On April 1, 2000 the Partnership received initial and additional
contributions from members of approximately $ 3,944,000.
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