<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X Annual Report Pursuant to Section 13 or 15(d)
----- of the Securities Exchange Act of 1934
[Fee Required]
For the Fiscal Year Ended: October 31, 1995
----- Transition Report Pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
[No Fee Required]
Commission File Number: 0-9202
THE FUTURE FUND
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 36-3033727
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o HEINOLD ASSET MANAGEMENT, INC.
440 South LaSalle
20th Floor
Chicago, Illinois 60605
----------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code:
(312)663-7500
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
-----
The registrant is a limited partnership and, accordingly, has no voting stock
held by nonaffiliates or otherwise.
<PAGE> 2
PART I
Item 1. Business.
(a) General development of business. The Future Fund (the
"Partnership") is a limited partnership organized on November 30, 1978 pursuant
to a Limited Partnership Agreement (the "Limited Partnership Agreement") and
under the Uniform Limited Partnership Act of the State of Illinois. On July
31, 1987, the Partnership elected to be governed under the Illinois Revised
Uniform Limited Partnership Act. The Partnership engages in speculative
trading of futures and forward contracts.
Until November 1, 1988, Heinold Commodities, Inc., a Delaware
corporation, was the General Partner of the Partnership and, in that capacity,
performed various administrative services for it. On November 1, 1988, in
order to effect a consolidation of the commodity pool operations of Geldermann,
Inc. ("Geldermann"), Heinold Commodities, Inc.'s commodity pool assets,
including its investment in the Partnership, were transferred to Heinold Asset
Management, Inc., an affiliate of Heinold Commodities, Inc.
Heinold Asset Management, Inc., a Delaware corporation and a
subsidiary of Heinold Holdings, Inc. at the time of its formation in 1982, was
organized to serve as the general partner and pool operator for public and
private commodity pools. Heinold Commodities, Inc. and Heinold Asset
Management, Inc. became wholly owned subsidiaries of Geldermann, an Illinois
corporation, on February 24, 1986. Until December 1994, Geldermann was an
independent operating subsidiary of ConAgra, Inc., a Delaware corporation with
headquarters in Omaha, Nebraska. On December 12, 1994, Geldermann was acquired
by E. D. & F. Man International Inc. (formerly known as E. D. & F. Man
International Futures Inc.), a New York corporation with headquarters in New
York, New York. References herein to the "General Partner" refer to Heinold
Commodities, Inc. for the periods prior to November 1, 1988 and to Heinold
Asset Management, Inc. for periods on and after November 1, 1988.
Until June 1, 1995, Geldermann acted as the Partnership's
futures commission merchant or commodity broker. On that date, E.D. & F. Man
International Inc. (the "Commodity Broker") replaced Geldermann as the
Partnership's commodity broker. The General Partner and the Commodity Broker
perform various services related to the Partnership's trading pursuant to a
Customer Agreement.
The General Partner invested $128,000 in the Partnership at
the outset of trading and purchased additional Units for $6,500 during fiscal
year 1985. The net asset value of the General Partner's interest in the
Partnership, after the redemption of 583 Unit-equivalents for $355,239 on
October 1, 1988, 379 Unit-equivalents for $248,362 on November 1, 1991 and 111
Unit-equivalents for $91,757 on October 31, 1994, was $188,495 as of October
31, 1995.
The Partnership's trading manager from the inception of
trading until August 1, 1988 had been Millburn Partners, a New Jersey
partnership. On August 1, 1988, Millburn Ridgefield Corporation, a Delaware
corporation whose sole shareholders consisted of the former
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partners of Millburn Partners, became the commodity trading advisor for all
public commodity pools previously managed by Millburn Partners.
Effective January 1, 1990, the General Partner replaced
Millburn Ridgefield Corporation as the Partnership's trading manager with
Baldwin Financial Corporation, a Delaware corporation. The Management Contract
with Baldwin Financial Company was assigned to MC Baldwin Financial Company as
of January 1, 1992.
Pursuant to a Management Agreement between the General
Partner, the Partnership, Geldermann and the Trading Manager dated December 15,
1989 and effective as of January 1, 1990, the Trading Manager began serving as
the Partnership's trading manager and selected a number of trading advisors to
direct the Partnership's futures and forward trading. This Agreement continued
in effect until December 31, 1995. Effective January 1, 1996, the General
Partner assumed the role of trading manager for the Partnership (the "Trading
Manager"). References to the Trading Manager prior to January 1, 1996, refer to
MC Baldwin Financial Company and on and after January 1, 1996 to Heinold Asset
Management, Inc.
The Trading Manager receives a Management Fee at an annual
rate of 4% of the average month-end Net Asset Value, as defined, of the
Partnership. The Trading Manager will also receive a Profit Share equal to 20%
of any New Trading Profit attributable to each trading advisor (including
interest income) to be calculated and paid quarterly.
The Trading Manager has entered into a number of Sub-Advisory
Agreements with trading advisors (the "Trading Advisors") selected to direct
the Partnership's futures and forward trading. The General Partner and the
Partnership are third party beneficiaries to these Sub-Advisory Agreements and
the Trading Manager, not the Partnership, compensates the Trading Advisors for
their services.
On December 15, 1989, the Trading Manager entered into
Sub-Advisory Agreements with Stuart Weilgus, James P. Meholic, LaSalle
Portfolio Management Inc., Lotsoff Capital Management and Bleinheim
Investments, Inc. In June 1990, James P. Meholic assigned his Sub-Advisory
Agreement to Cristo Commodities, Inc., a corporation in which Mr. Meholic is
the sole shareholder. On August 6, 1990, Stuart Weilgus assigned his
Sub-Advisory Agreement to Primeco International Ltd., a corporation in which
Mr. Weilgus is the sole shareholder. Cristo Commodities, Inc. and Primeco
International Ltd. ceased trading for the Partnership in September 1992 and
November 1992, respectively. Moore Capital Management, Inc., retained on
January 1, 1990 as a Trading Advisor pursuant to an oral agreement, ceased
trading for the Partnership on June 30, 1991. On July 1, 1990, the Trading
Manager entered in a Sub-Advisory Agreement with Saxon Investment Corporation.
Lotsoff Capital Management ceased trading for the Partnership on August 7, 1990
and the assets managed by it were reallocated to Chang-Crowell Management
Corporation pursuant to a Sub-Advisory Agreement dated September 1, 1990.
The Trading Manager entered into Sub-Advisory Agreements with
John W. Henry & Co., Inc., Sunrise Commodities, Inc., Chesapeake Capital
Corporation and Greenwich Asset Management Incorporated on July 1, 1991,
September 30, 1991, April 1, 1992 and December 14,
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1992, respectively. On October 1, 1993 the Sub-Advisory Agreement with
Greenwich Asset Capital Management was assigned to Athena Global Investments,
L.P. On December 31, 1993, the Sub-Advisory agreement with Blenheim
Investments, Inc. expired. In addition, effective January 3, 1994, the
Sub-Advisory Agreement with John W. Henry & Co., Inc. with respect to its KT
Diversified Program was terminated. John W. Henry & Co., Inc. continues to
trade its Financials and Metals Portfolio for the Partnership. Gelber
Management, Inc. entered into a Sub-Advisory Agreement on January 3, 1994.
On June 30, 1994 the Sub-Advisory Agreements with LaSalle
Portfolio Management Inc., Chang-Crowell Management Corporation and Sunrise
Commodities, Inc. were terminated and Sub-Advisory Agreements were entered
into with Range Wise, Inc., SJO, Inc., Zack Hampton Bacon, III, Willowbridge
Associates, Inc. and Chescor Limited. A Sub-Advisory Agreement was entered into
with Rabar Market Research, Inc. on November 1, 1995. The Sub-Advisory
Agreements with Chesapeake Capital Corporation; Gelber Management, Inc.; Athena
Global Investments, L.P.; Zack Hampton Bacon, III and Chescor Limited were
terminated on November 1, 1995, November 30, 1995, February 28, 1995, October
1, 1995 and January 1, 1996, respectively. In addition, the Trading Manager
entered into a Sub-Advisory Agreement with Zimlev, Inc. on October 1, 1995
which was terminated on January 1, 1996.
As of January 1, 1996 the following were the Trading Advisors
for the Partnership: John W. Henry & Co., Inc.; SJO, Inc.; Willowbridge
Associates, Inc.; Rabar Market Research, Inc.and Range Wise, Inc.
The Partnership shall pay commodity brokerage commissions to
the Commodity Broker at an annual rate of 7% of average month-end Net Assets
per year, plus National Futures Association ("NFA") and give-up fees.
Regulation
Under the Commodity Exchange Act, as amended (the "Act"),
commodity exchanges and futures trading are subject to regulation by the
Commodity Futures Trading Commission (the "CFTC"). The National Futures
Association, a "registered futures association" under the Act, is the only
non-exchange self-regulatory organization for futures industry professionals.
The CFTC has delegated to the NFA responsibility for the registration of
"commodity trading advisors," "commodity pool operators," "futures commission
merchants," "introducing brokers" and their respective associated persons and
"floor brokers." The Act requires "commodity pool operators," such as the
General Partner, "commodity trading advisors," such as the Trading Manager and
the Trading Advisors, and commodity brokers or "futures commission merchants,"
such as the Commodity Broker, to be registered and to comply with various
reporting and record keeping requirements. The General Partner, the Trading
Advisors, and the Commodity Broker are all members of the NFA. The CFTC may
suspend a commodity pool operator's or commodity trading advisor's registration
if it finds that its trading practices tend to disrupt orderly market
conditions or in certain other situations. In the event that the registration
of the General Partner as a commodity pool operator or the Trading Advisors'
registrations as commodity trading advisors were terminated or suspended, the
General Partner
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and the Trading Advisors would be unable to continue to manage the business of
the Partnership, select the Trading Advisors and direct the Partnership's
futures and forward trading, respectively. Should the General Partner's
registration be suspended, termination of the Partnership might result.
As members of the NFA, the General Partner, the Trading
Manager, the Trading Advisors and the Commodity Broker are subject to NFA
standards relating to fair trade practices, financial condition and customer
protection. As the self-regulatory body of the futures industry, the NFA
promulgates rules governing the conduct of futures industry professionals and
disciplines those professionals which do not comply with such standards.
In addition to such registration requirements, the CFTC and
certain futures exchanges have established limits on the maximum net long or
net short position which any person may hold or control in particular futures
contracts. The CFTC has adopted a rule requiring all domestic futures
exchanges to submit for approval speculative position limits for all futures
contracts traded on such exchanges. Many exchanges also limit the changes in
futures contract prices that may occur during a single trading day. The
Partnership may trade on foreign commodity exchanges which are not subject to
regulation by any United States government agency.
(b) Financial information about industry segments. The
Partnership's business constitutes only one segment, speculative trading of
futures and forward contracts for financial reporting purposes. The
Partnership does not engage in sales of goods or services. The Partnership's
revenue, operating profit and total assets for each of the five fiscal years in
the period ended October 31, 1995 are set forth under "Item 6. Selected
Financial Data."
(c) Narrative description of business.
(1) See Items 1(a) and (b) above.
(i) through (xii) -- not applicable.
(xiii) -- the Partnership has no employees.
(d) Financial information about foreign and domestic
operations and export sales. The Partnership does not engage in sales of goods
or services. See "Item 1(b). Financial information about industry segments."
Item 2. Properties.
The Partnership does not own any properties. Under the terms
of the Limited Partnership Agreement, the General Partner performs the
following services for the Partnership:
(1) Manages the business of the Partnership. Pursuant to
this authority, the General Partner has entered into a Management Agreement
with the Trading Manager (under
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which the Trading Manager will serve as trading manager and will retain trading
advisors who will have complete discretion with respect to determination of the
Partnership's trading decisions) and a Customer Agreement with the Commodity
Broker (pursuant to which the Commodity Broker executes all trades on behalf of
the Partnership based on instructions of the trading advisors selected by the
Trading Manager).
(2) Maintains the Partnership's books and records, which
Limited Partners or their duly authorized representatives may inspect during
normal business hours for any proper purpose upon 10 days' written notice to
the General Partner.
(3) Furnishes each Limited Partner with a monthly statement
describing the performance of the Partnership which sets forth aggregate profit
share allocations, brokerage commissions and other expenses incurred or accrued
by the Partnership during the month.
(4) Forwards annual audited financial statements (including a
statement of financial condition and a statement of operations) to each Limited
Partner.
(5) Provides to each Limited Partner tax information
necessary for the preparation of his or her annual federal income tax return.
(6) Performs secretarial and other clerical responsibilities
and furnishes office space, equipment and supplies as may be necessary for
supervising the affairs of the Partnership.
(7) Administers the redemption of Units.
Item 3. Legal Proceedings.
The General Partner is not aware of any pending legal
proceedings to which the Partnership is a party or to which any of its assets
are subject. In addition, there are no pending material proceedings involving
the General Partner or the Commodity Broker.
In the ordinary course of its business, Geldermann is involved
in numerous legal actions, some of which seek substantial damages. In view of
the number and diversity of the claims, the number of jurisdictions involved,
and the inherent difficulty of predicting the outcome of litigation, Geldermann
cannot state what the eventual outcome of these pending claims will be. As a
matter of policy, Geldermann vigorously defends civil litigation, reparations
or arbitration proceedings pending against it, and in all proceedings currently
so pending believes it has defenses which are factually and legally sound.
Geldermann is contesting the allegations of each complaint and believes that
there are meritorious defenses in the lawsuits.
Although the CFTC's staff's interpretation that any matter
filed by the CFTC against a registrant is, on its face (even though it has not
been litigated), material litigation which has to be disclosed, Geldermann
takes exception to this. Notwithstanding the preceding, Geldermann herewith
discloses a CFTC Enforcement Action titled In the Matter of Thomas Collins, et
al., CFTC Docket No. 94-13.
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The Complaint in this case alleges that Geldermann, in 1986,
carried and cleared accounts in joint tenancy for a Mid-America local floor
trader and/or ten individuals with whom the floor trader maintained a separate
joint account with each of the ten individuals. None of the afore-mentioned
persons were ever employees of Geldermann. Geldermann's function was only that
of clearing broker. Over a period of approximately four years, at the
direction of the account holder(s), Geldermann transferred certain positions
amongst and between the accounts. It is those transfers that the CFTC is
alleging are non-competitive, fictitious transactions. The CFTC's complaint
also alleges that Geldermann failed to properly supervise the employees who
accepted the transfer instructions from the account holder(s). Geldermann
takes exception to the CFTC's allegation and is vigorously defending this
litigation.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters.
(a) Market Information. There is no trading market for the
Units, and none is likely to develop. The Units are transferable only after
written notice has been given to and approved by the General Partner. Units
may be and have been redeemed upon 10 days' notice at their Net Asset Value as
of the end of any month, as provided in the Limited Partnership Agreement. In
the event that all Units for which redemption is requested cannot be redeemed
as of any redemption date, Units of Limited Partners will be redeemed in the
order that requests for redemption have been received by the General Partner.
(b) Holders. As of November 1, 1995, there were 866 holders
of Units.
(c) Dividends. No distributions or dividends have been made
on the Units and the General Partner has no present intention to make any.
Item 6. Selected Financial Data.
The following is a summary of operations of the Partnership
for each of the five fiscal years in the period ended October 31, 1995.
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<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal Fiscal Fiscal
Year Ended Year Ended Year Ended Year Ended Year Ended
October 31, October 31, October 31, October 31, October 31,
1995 1994 1993 1992 1991
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net gain (loss) on
trading of
futures and
forward contracts $ 2,226,647 $ 257,407 $ 5,680,415 $ 5,124,546 $ 3,779,609
Interest income 845,122 599,540 536,710 723,436 1,325,379
----------- ----------- ----------- ----------- -----------
Total income 3,071,769 856,947 6,217,125 5,847,982 5,104,988
=========== =========== =========== =========== ===========
Brokerage commissions 1,181,262 1,289,379 1,388,149 1,373,097 1,624,919
Management fee 675,007 736,788 793,228 776,204 914,062
Profit share 452,602 167,041 768,327 964,899 870,144
Other administrative
expenses 95,150 82,639 95,554 64,194 109,196
----------- ----------- ----------- ----------- -----------
Total expenses 2,404,021 2,275,847 3,045,258 3,178,394 3,518,321
=========== =========== =========== =========== ===========
Net income (loss) $ 667,748 $(1,418,900) $ 3,171,867 $ 2,669,588 $ 1,586,667
----------- ----------- ----------- ----------- -----------
Net income (loss)
allocated to
General Partner $ 6,634 $ (21,004) $ 44,763 $ 32,950 $ 31,205
----------- ----------- ----------- ----------- -----------
Net income (loss)
allocated to
Limited Partners $ 661,114 $(1,397,896) $ 3,127,104 $ 2,636,638 $ 1,555,462
----------- ----------- ----------- ----------- -----------
Increase (decrease) in
Net Asset Value for
a Unit Outstand-
ing throughout
each year $ 30.16 $ (63.46) $ 135.24 $ 99.55 $ 43.95
----------- ----------- ----------- ----------- -----------
Total assets $15,244,909 $17,666,836 $20,201,846 $19,276,069 $20,998,589
=========== =========== =========== =========== ===========
</TABLE>
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Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Reference is made to "Item 6. Selected Financial Data." and
"Item 8. Financial Statements and Supplementary Data." The information
contained therein is essential to, and should be read in conjunction with, the
following analysis.
Capital Resources
The Partnership does not intend to raise any additional
capital through borrowing and because it is a closed-end fund, it cannot sell
any additional Units unless it undertakes a new public offering, which would
require another registration with the Securities and Exchange Commission. Due
to the nature of the Partnership's business, it will make no significant
capital expenditures, and substantially all its assets are and will be
represented by cash, U.S. Treasury securities and investments in futures and
forward contracts.
Liquidity
Many United States commodity exchanges limit fluctuations in
futures contract prices during a single day by regulations referred to as
"daily price fluctuation limits" or "daily limits." During a single trading
day, no trades may be executed at prices beyond the daily limit. Once the
price of a futures contract has reached the daily limit for that day, positions
in that contract can neither be taken nor liquidated. Futures prices have
occasionally moved the daily limit for several consecutive days with little or
no trading. Similar occurrences could prevent the Partnership from promptly
liquidating unfavorable positions and subject the Partnership to substantial
losses which could exceed the margin initially committed to such trades. In
addition, even if futures prices have not moved the daily limit, the
Partnership may not be able to execute futures trades at favorable prices if
little trading in such contracts is taking place. Generally, forward contracts
can be closed out at the discretion of the Trading Advisor. However, if the
market is not liquid, it could prevent the timely closeout of an unfavorable
position until the delivery date, regardless of the changes in their value or
the Trading Advisors' investment strategies. Other than these limitations on
liquidity, which are inherent in the Partnership's trading operations, the
Partnership's assets are highly liquid and are expected to remain so.
Results of Operations
Operating results showed a profit for tthe fiscal year ended
October 31, 1995, a loss for the fiscal year ended October 31, 1994 and a
profit for the fiscal year ended October 31, 1993.
The Net Asset Value per Unit as of October 31, 1995 and
October 31, 1994 was $856.80 and $826.64, respectively.
The trading losses which occurred in fiscal year 1994 did not
continue in fiscal year 1995. For the fiscal year ended October 31, 1995, the
Partnership showed a gain as the Partnership's profitable trading in the
currencies, energy and financial instrument sectors more
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than offset its unprofitable trading in the agricultural and metal sectors.
Losses were incurred in short metal positions and, due to the drought in the
second and third quarters, the Partnership incurred additional losses in short
agricultural positions. Despite such losses, the Partnership made significant
gains in long bond positions due to the decline in interest rates. Other
profitable trades were made in the energy markets, primarily in crude oil
positions.
The Partnership showed a loss for the fiscal year ended
October 31, 1994 as the Partnership's profitable trading in the metals, energy
and agricultural sectors was more than offset by its unprofitable trading in
the currencies.
The Partnership showed a profit for the fiscal year ended
October 31, 1993 as the Partnership's profitable trading in the agricultural,
currencies, metals and financial instruments sectors more than offset the
Partnership's losses in the energy sector.
Inflation is not a significant factor in the Partnership's
profitability.
Item 8. Financial Statements and Supplementary Data.
Financial statements are listed on page F-1 of this report.
The supplementary financial information specified by Item 302
of Regulation S-K is not applicable.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The Partnership has no directors or executive officers. The
Partnership is managed by its General Partner. There are no "significant
employees" of the Partnership.
The General Partner is a commodity pool operator registered
with the NFA.
Item 11. Executive Compensation.
The Partnership has no directors or officers. The General
Partner performs the services described in "Item 2. Properties." herein.
Geldermann acts as the Partnership's commodity broker pursuant to the Customer
Agreement described in "Item 1(a). General development of business."
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<PAGE> 11
The General Partner participates in any appreciation in the
net assets of the Partnership in proportion to its investment in it.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security ownership of certain beneficial owners.
The Partnership knows of no person who owns beneficially more
than 5% of the Units.
(b) Security ownership of management.
Under the terms of the Limited Partnership Agreement, the
Partnership's affairs are managed by the General Partner. The Trading Manager
pursuant to its Management Agreement with the Partnership, enters into Sub-
Advisory Agreements with the Trading Advisors who have discretionary authority
over the Partnership's futures and forward contract trading. The General
Partner owned 220 Unit-equivalents valued at $188,495 as of October 31, 1995,
1.25% of the Partnership's total equity.
(c) Changes in control.
None
Item 13. Certain Relationships and Related Transactions.
See "Item 11. Executive Compensation" and "Item 12. Security
Ownership of Certain Beneficial Owners and Management."
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K.
(a)(1) Financial Statements:
See Index to Financial Statements, infra.
(a)(2) Financial Statement Schedules:
All Schedules are omitted for the reason that they are not
required, are not applicable, or because equivalent information has been
included in the financial statements or the notes thereto.
(a)(3) Exhibits as required by Item 601 of
Regulation S-K:
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(3) Articles of Incorporation and By-Laws:
(a) Limited Partnership Agreement dated as of November 27,
1978, as amended on February 15, 1979.
(b) Certificate of Limited Partnership of the Partnership as
filed with the Cook County Recorder of Deeds on November 30, 1978.
The above exhibits are incorporated by reference from the Form
10-K Annual Report filed by the Partnership for the period ended October 31,
1978.
(c) Form LP-1205 of the Partnership, as filed with the
Illinois Secretary of State on July 31, 1987, electing to be governed under the
Illinois Revised Uniform Limited Partnership Act.
The above exhibit is incorporated by reference from the
Partnership's report on Form 10-K for the fiscal year ended October 31, 1987.
(10) Material Contracts:
(a) Joint Venture Agreement dated as of April 1, 1987 between
the Partnership and Millburn Partners.
(b) Customer Agreement dated as of April 1, 1987 between the
Joint Venture and Geldermann.
The above exhibits are incorporated by reference from the
Partnership's report on Form 10-K for the fiscal year ended October 31, 1987.
(c) Amendment No. 1 to the Joint Venture Agreement between
the Partnership and Millburn Partners dated December 31, 1987.
(d) Amendment No. 1 to the Customer Agreement between the
Joint Venture and Geldermann dated December 31, 1987.
(e) Amendment No. 2 to the Joint Venture Agreement between
the Partnership and Millburn Ridgefield Corporation dated December 31, 1988.
The above exhibits are incorporated by reference from the
Partnership's report on Form 10-K for the Fiscal Year ended October 31, 1988.
(f) Management Agreement dated December 14, 1989 between
the Partnership and the Trading Manager.
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The above exhibit is incorporated by reference from the
Partnership's report on Form 10-K filed on January 16, 1990.
(g) Amendment No. 1 to the Management Contract dated December
31, 1991 between the Partnership and the Trading Manager.
The above exhibit is incorporated by reference from the
Partnership's report on Form 8-K filed on January 28, 1991.
(h) Amendment No. 2 to the Management Contract dated December
31, 1992 between the Partnership and the Trading Manager.
The above exhibit is incorporated by reference from the
Partnership's report on Form 10-K filed on January 31, 1993.
(i) Amendment No. 3 to the Management Contract dated
December 31, 1993 between the Partnership and the Trading Manager.
The above exhibit is incorporated by reference from the
Partnership's report on Form 10-K filed on January 31, 1994.
(j) Amendment No. 4 to the Management Contract dated
December 31, 1994 between the Partnership and the Trading Manager.
The above exhibit is incorporated by reference from the
Partnership's report on Form 10-K filed on January 31, 1995.
(27) Financial Data Schedule
(b) Reports on Form 8-K
The Partnership did not file any reports on Form 8-K during
the quarter ended October 31, 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Chicago and State of Illinois on the 29th day of January, 1996.
THE FUTURE FUND
By HEINOLD ASSET MANAGEMENT, INC.
General Partner
By /s/ Daniel E. Ragen
--------------------
Daniel E. Ragen
President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the General Partner of the Registrant in the capacities and on the date
indicated.
<TABLE>
<S> <C> <C>
/s/ James R. Curley Chief Executive January 29, 1996
- ------------------------ Officer and Director
James R. Curley
/s/ Robert Ledvora Chief Financial Officer January 29, 1996
- ------------------------ (principal accounting officer)
Robert Ledvora
/s/ Thomas M. Harte Director January 29, 1996
- ------------------------
Thomas M. Harte
/s/ Ira Polk Director January 29, 1996
- ------------------------
Ira Polk
/s/ Ned W. Bennett Director January 29, 1996
- --------------------------
/s/ Daniel E. Ragen President January 29, 1996
- -------------------- (principal executive
Daniel E. Ragen officer) and Director
</TABLE>
(Being the principal executive officer, the principal
financial and accounting officer, and a majority of the directors of Heinold
Asset Management, Inc.)
<TABLE>
<S> <C> <C>
HEINOLD ASSET General Partner of January 29, 1996
MANAGEMENT, INC. Registrant
</TABLE>
By /s/ Daniel E. Ragen
-------------------
Daniel E. Ragen
President
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DELOITTE &
TOUCHE LLP
(LOGO)
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
FINANCIAL STATEMENTS AS OF
OCTOBER 31, 1995 AND 1994 AND FOR THE
THREE YEARS ENDED OCTOBER 31, 1995 AND
INDEPENDENT AUDITORS' REPORT
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL (LOGO)
<PAGE> 16
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
TABLE OF CONTENTS
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PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1
FINANCIAL STATEMENTS:
Statements of Financial Condition as of
October 31, 1995 and 1994 F-2
Statements of Operations for the
Years Ended October 31, 1995, 1994, and 1993 F-3
Statements of Partners' Capital for the
Years Ended October 31, 1995, 1994, and 1993 F-4
Statements of Cash Flows for the
Years Ended October 31, 1995, 1994, and 1993 F-5
Notes to Financial Statements F-6
</TABLE>
<PAGE> 17
(DELOITTE &
TOUCHE LLP LOGO) (LETTERHEAD)
INDEPENDENT AUDITORS' REPORT
To the General Partner and
Limited Partners of
The Future Fund:
We have audited the accompanying statements of financial condition of The
Future Fund (an Illinois Limited Partnership, the "Partnership") as of October
31, 1995 and 1994, and the related statements of operations, partners' capital,
and cash flows for each of the three years in the period ended October 31,
1995. These financial statements are the responsibility of the Partnership's
General Partner. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of The Future Fund as of October 31, 1995 and
1994, and the results of its operations and its cash flows for each of the
three years in the period ended October 31, 1995, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
January 2, 1996
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL (LOGO)
<PAGE> 18
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
STATEMENTS OF FINANCIAL CONDITION
OCTOBER 31, 1995 AND 1994
- ---------------------------------------------------------------------------------------
ASSETS 1995 1994
<S> <C> <C>
CASH $ - $ 21,307
EQUITY IN FUTURES AND FORWARD TRADING
United States Treasury securities, at cost
accrued interest which approximates 13,884,966 15,491,824
Net unrealized appreciation on open futures
forward contracts 224,329 1,084,916
Amount due from E.D.& F. Man International
(formerly Geldermann) 1,135,614 1,068,789
----------- ------------
Total equity in futures and 15,244,909 17,645,529
----------- ------------
TOTAL ASSETS $15,244,909 $ 17,666,836
=========== ============
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accrued brokerage commissions payable to
International (formerly Geldermann) $ 88,932 $ 103,055
Accrued management fee 50,818 58,889
Accrued profit share - 5,813
Redemptions payable 47,440 226,375
Other accrued expenses 5,421 6,147
----------- ------------
Total liabilities 192,611 400,279
PARTNERS' CAPITAL:
Limited Partners (units outstanding: 1995
1994 - 20,668) 14,863,803 17,084,696
General Partner (unit equivalents
1995 - 220; 1994 - 220) 188,495 181,861
----------- ------------
Total partners' capital 15,052,298 17,266,557
----------- ------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $15,244,909 $ 17,666,836
=========== ============
NET ASSET VALUE PER OUTSTANDING UNIT OF
PARTNERSHIP INTEREST $ 856.80 $ 826.64
=========== ============
</TABLE>
See notes to financial statements.
F-2
<PAGE> 19
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
YEARS ENDED OCTOBER 31, 1995, 1994, AND 1993
- -------------------------------------------------------------------------------------------------------------
1995 1994 1993
<S> <C> <C> <C>
REVENUES:
Net realized trading gains (losses) on
futures and forward contracts $ 3,087,234 $ (255,170) $ 5,736,485
Increase (decrease) in net unrealized
on open futures and forward contracts (860,587) 512,577 (56,070)
Interest income 845,122 599,540 536,710
-------------- --------------- -------------
Total revenues 3,071,769 856,947 6,217,125
EXPENSES:
Brokerage commissions 1,181,262 1,289,379 1,388,149
Management fee 675,007 736,788 793,228
Profit share 452,602 167,041 768,327
Other administrative expenses 95,150 82,639 95,554
-------------- --------------- -------------
Total expenses 2,404,021 2,275,847 3,045,258
-------------- --------------- -------------
NET INCOME (LOSS) $ 667,748 $ (1,418,900) $ 3,171,867
============== =============== =============
NET INCOME (LOSS) ALLOCATED TO:
General Partner $ 6,634 $ (21,004) $ 44,763
============== =============== =============
Limited Partners $ 661,114 $ (1,397,896) $ 3,127,104
============== =============== =============
INCREASE (DECREASE) IN NET ASSET
VALUE FOR A UNIT OUTSTANDING
THROUGHOUT EACH YEAR $ 30.16 $ (63.46) $ 135.24
============== =============== =============
</TABLE>
See notes to financial statements.
F-3
<PAGE> 20
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED OCTOBER 31, 1995, 1994, AND 1993
- ----------------------------------------------------------------------------------------------------------
TOTAL
LIMITED GENERAL PARTNERS'
PARTNERS PARTNER CAPITAL
<S> <C> <C> <C>
BALANCE, OCTOBER 31, 1992 $ 18,805,109 $ 249,859 $ 19,054,968
Redemption of 2,907 units of
limited partnership interest (2,345,565) - (2,345,565)
Net income 3,127,104 44,763 3,171,867
--------------- ------------ ---------------
BALANCE, OCTOBER 31, 1993 19,586,648 294,622 19,881,270
Redemption of 1,337 units of limited
partnership interest and 111 general
partnership unit equivalents (1,104,056) (91,757) (1,195,813)
Net loss (1,397,896) (21,004) (1,418,900)
--------------- ------------ ---------------
BALANCE, OCTOBER 31, 1994 17,084,696 181,861 17,266,557
Redemption of 3,320 units of limited
partnership interest (2,882,007) - (2,882,007)
Net income 661,114 6,634 667,748
--------------- ------------ ---------------
BALANCE, OCTOBER 31, 1995 $ 14,863,803 $ 188,495 $ 15,052,298
=============== ============ ===============
</TABLE>
See notes to financial statements.
F-4
<PAGE> 21
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
YEARS ENDED OCTOBER 31, 1995, 1994, AND 1993
- ------------------------------------------------------------------------------------------------------------
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 667,748 $ (1,418,900) $ 3,171,867
Adjustments to reconcile net income to net
cash provided by operating activities:
Decrease (increase) in equity in futures
forward trading accounts 2,400,620 2,535,010 (925,777)
Increase (decrease) in liabilities (28,733) (46,163)
---------------- -------------- ---------------
Net cash flows from operating 3,039,635 1,069,947 2,345,565
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of limited and general
partnership units or unit equivalents (3,060,942) (1,069,947) (2,345,565)
---------------- -------------- ---------------
NET DECREASE IN CASH (21,307) -
CASH - Beginning of year 21,307 21,307
---------------- -------------- ---------------
CASH - End of year $ - $ 21,307 $ 21,307
================ =============== ===============
</TABLE>
See notes to financial statements.
F-5
<PAGE> 22
THE FUTURE FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED OCTOBER 31, 1995, 1994, AND 1993
1. ORGANIZATION OF THE PARTNERSHIP
The Future Fund (the "Partnership") was organized in November 1978, under
the Illinois Uniform Limited Partnership Act (the "Act"), for the
purposes of engaging in speculative trading of primarily futures and
forward contracts.
Heinold Asset Management, Inc. ("HAMI"), a wholly owned subsidiary of
Geldermann, Inc. ("Geldermann"), is the General Partner of the
Partnership. On December 12, 1994, the parent of Geldermann, ConAgra,
Inc., sold all of the common stock of Geldermann to E.D. & F. Man
International ("Man"). As a result, Geldermann and HAMI are wholly owned
by Man.
The Partnership has a brokerage contract with Man, previously Geldermann,
which provides that the Partnership will pay Man brokerage commissions at
an annual rate of 7% of average month-end net assets as defined, plus
"give-up" and NFA fees.
The Partnership's funds held at Man, previously Geldermann, are in
segregated accounts, as required by the Commodity Futures Trading
Commission. These funds are used to meet minimum margin requirements for
all of the Partnership's open positions, as set by the exchange upon
which each futures contract is traded. These requirements are adjusted,
as needed, due to daily fluctuations in the values of the underlying
positions. If necessary, certain positions may be liquidated to satisfy
resulting changes in margin requirements.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition - Futures and forward contracts are recorded on trade
dates and are reflected in the accompanying statements of financial
condition at the market value on the last business day of the reporting
period. The difference between the original contract amount and the
market value of the futures and forward contracts is reflected as the
change in net unrealized appreciation. Market values of futures
contracts are based upon exchange settlement prices. Market values of
forward contracts are based upon quoted rates provided by major financial
institutions.
OPERATING EXPENSES - The Partnership bears all expenses incurred in
connection with its activities. These include brokerage commissions,
trading manager's management fee, trading advisors' profit share,
"give-up" charges and NFA fees, and periodic legal, auditing, tax return
preparation and filing fees. The General Partner bears all other
operating expenses.
INCOME TAXES - No provision for federal income taxes has been made in the
accompanying financial statements since the net income (loss) of the
Partnership is not taxable as such but is includable in the income tax
returns of the individual partners.
STATEMENTS OF CASH FLOWS - For purposes of reporting cash flows, cash
includes only cash on deposit at financial institutions.
F-6
<PAGE> 23
3. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATION OF
CREDIT RISK
The Partnership invests in various financial and commodity futures,
options on futures and forward contracts for speculative purposes. These
contracts are marked to market daily, with variations in value settled on
a daily basis with the exchange upon which they are traded. The
Partnership held long and short financial futures positions with
aggregate notional values of approximately $122,841,000 and $5,927,000,
respectively, at October 31, 1995; approximately $147,803,000 and
$264,340,000, respectively, at October 31, 1993; and approximately
$204,660,000 and $42,416,000, respectively, at October 31, 1993.
The exchange upon which financial futures and options on futures
contracts are traded acts as the counterparty and, accordingly, bears the
risk of performance. A substantial portion of the Partnership's open
financial futures and options on financial futures contracts was
transacted with the Chicago Mercantile Exchange.
Generally, financial futures, options on futures and forward contracts
can be closed out or offset at the discretion of the trading advisors.
However, if the market is not liquid, it could prevent the timely
closeout or offset of any unfavorable positions or require the
Partnership to hold those positions until the delivery date, regardless
of the changes in their value or the trading advisors' investment
strategies.
4. THE LIMITED PARTNERSHIP AGREEMENT
The Limited Partnership Agreement (the "Agreement") provides the
following:
Allocation of Profit and Loss for Partnership Accounting Purposes - The
Limited Partners and the General Partner share in the profits and losses
of the Partnership in proportion to the number of units or unit
equivalents held by each. However, no Limited Partner is liable for
obligations in excess of his capital contribution and profits, if any,
and such other amounts for which a limited partner may be liable pursuant
to the Act.
Distributions - Distributions (other than redemptions of units) are made
on a prorata basis at the sole discretion of the General Partner in
accordance with the respective capital accounts of the partners. The
General Partner has made no distributions from the Partnership to date.
Redemptions - A Limited Partner (or any assignee thereof) may cause any
or all of his units to be redeemed as of the first day of any month
following 10 days' written request for redemption, subject to certain
other conditions, as described in the Agreement. Redemption is at net
asset value as of the previous month-end.
Dissolution - The Partnership will be dissolved on July 1, 1998, or upon
the occurrence of certain future events, as specified in the Agreement.
F-7
<PAGE> 24
5. ADVISORY AGREEMENT
Effective January 1, 1990, the Partnership entered into a management
agreement with Baldwin Financial Corporation (the "Trading Manager").
Under the terms of the agreement, the Trading Manager has responsibility
for determining the Partnership's futures, options on futures and forward
trades through the recommendation of trading advisors. The Trading
Manager has contracted with nine independent trading advisors who have
assumed full responsibility for determining trades for that portion of
net assets allocated to each advisor's control. As compensation for
these services, the Trading Manager receives a quarterly profit share
equal to 20% of "new trading profits" attributable to each trading
advisor (including interest income) as defined in the agreement. The
Trading Manager then compensates the trading advisors. The profit share
is retained by the trading advisors even when "trading losses" occur in
subsequent years; however, no further profit share is payable until any
such trading losses (other than losses attributable to redeemed units)
are recouped by the Partnership.
Additionally, the Trading Manager receives a monthly management fee at an
annual rate of 4% of average month-end net asset value, as defined.
As of December 31, 1993, the trading advisory agreement with Bleinheim
Investments, Inc. expired. As of January 3, 1994, Gelber Management,
Inc. entered into a trading advisory agreement with the Partnership.
At October 31, 1995, carry-forward losses to be used in calculating new
trading profits for the current year advisors were as follows:
<TABLE>
<S> <C>
Bacon $(22,678)
SJO (18,266)
Rangewise (45,606)
John W. Henry & Co., Inc. (23,080)
Chesapeake Capital Corporation (39,374)
Chescor (13,607)
Willowbridge (41,233)
Zimlev (11,521)
</TABLE>
On December 31, 1995, the agreement with Baldwin Financial Corporation
was terminated.
Effective January 1, 1996, HAMI assumed the role of trading manager for
the partnership.
6. PROSPECTIVE ACCOUNTING STANDARDS
In October 1994, the FASB issued SFAS 119, "Disclosure About Derivative
Financial Instruments and Fair Value of Financial Instruments." This
Statement requires disclosures about amounts, nature, and terms of
derivative financial instruments that are not subject to Statement 105
because they do not result in off-balance-sheet risk of accounting loss.
This Statement is effective for financial statements issued for fiscal
years ending after December 15, 1994, except for entities with less than
$150 million in total assets. For those entities, this Statement is
effective for fiscal years ending after December 15, 1995. The adoption
of this Statement is not expected to have a significant impact on the
Partnership.
* * * * * *
F-8
<PAGE> 25
To the best of my knowledge and belief, the information in this statement is
accurate and complete.
Heinold Asset Management, Inc.
(Pool Operator)
/s/Robert Ledvora
- ----------------------------------------------------
Robert Ledvora
Executive Vice-President and Chief Financial Officer
F-9
<TABLE> <S> <C>
<ARTICLE> BD
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> OCT-31-1995 OCT-31-1994
<PERIOD-START> OCT-31-1994 OCT-31-1993
<PERIOD-END> OCT-31-1995 OCT-31-1994
<CASH> 1,135,614 1,090,096
<RECEIVABLES> 224,329 1,084,916
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 13,884,966 15,491,824
<PP&E> 0 0
<TOTAL-ASSETS> 15,244,909 17,666,836
<SHORT-TERM> 0 0
<PAYABLES> 192,611 400,279
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 15,052,298 17,266,557
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 15,244,909 17,666,836
<TRADING-REVENUE> 2,226,647 257,407
<INTEREST-DIVIDENDS> 845,122 599,540
<COMMISSIONS> (1,181,262) (1,289,379)
<INVESTMENT-BANKING-REVENUES> 0 0
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> (1,222,759) (986,468)
<INCOME-PRETAX> 0 0
<INCOME-PRE-EXTRAORDINARY> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 667,748 (1,418,900)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
