LEPERCQ-ISTEL FUND
THIRD-QUARTER REPORT
SEPTEMBER 30, 1999
[LEPERCQ LOGO APPEARS HERE]
1675 Broadway
New York, NY 10019
(212) 698-0749
(800) 497-1141
This report is issued for the information of shareholders of Lepercq-Istel Fund,
and is not authorized for distribution to prospective investors in the Fund
unless accompanied by the currently effective prospectus dated April 28, 1999.
LEPERCQ-ISTEL FUND
November 19, 1999
Dear Shareholders:
After recording a strong increase in the first half of the year, the U.S. market
surrendered some of its gains in the third quarter. Investors grew concerned
about rising interest rates and a weaker U.S. dollar.
The performance on your Fund for the third quarter and for the first nine months
of the year is provided in the table below. For comparative purposes, we have
also provided performance information for some relevant benchmarks.
Third Quarter Year-to-Date
1999 1999
Lepercq-Istel Fund -6.38 % -2.71 %
Lipper Multicap Core Average -6.38 % +4.04 %
Lipper General Equity Average -5.37 % +5.23 %
Standard & Poor's 500 -6.25 % +5.36 %
The third quarter saw a rise of interest rates on fears that the strong economy
was straining capacity and exerting inflationary pressures. The U.S. dollar also
weakened as the pick-up of activity in the economies abroad continues to gain
momentum and provides competition to the U.S. for global capital. We continue to
expect technology to exert downward pressure on business costs and remain
optimistic on inflation. Businesses continue to experience a lack of pricing
power. The need to continuously offer improved products for the same or lower
price has spread from the technology sector to the business world at large.
During the quarter we added two new stocks to the portfolio - Ispat and Siemens.
We also increased the Fund's position in eBay, Frontier and Qwest
Communications. Ispat is an innovative consolidator in the steel industry and
Siemens is undergoing a major overhaul as the restructuring wave invades Europe.
After enjoying a strong turnaround in the performance of First Data, the Fund
took profits on that investment. We also reduced our positions in DuPont,
Novell, Pharmacia & Upjohn and Russell.
Thank you for your continued support.
Sincerely,
/s/ Tersing Ngudu /s/ Jerry Getsos
Tsering Ngudu Jerry Getsos
President and Portfolio Manager Executive Vice President and Portfolio Manager
Past performance is not predictive of future performance
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LEPERCQ-ISTEL FUND
PERFORMANCE (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
Net Asset Value per Share, December 31, 1998 $19.91
Distribution during the Period: None
Net Asset Value per Share, September 30, 1999 $19.37
Total Return, Year to Date (2.71%)
Past performance is not predictive of future performance.
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LEPERCQ-ISTEL FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) AS OF SEPTEMBER 30, 1999
NUMBER OF MARKET
SHARES VALUE
COMMON STOCKS - 79.6%
AEROSPACE/DEFENSE - 1.6%
10,000 Raytheon-Class A $485,000
--------
APPAREL - 1.9%
42,000 Russell 595,875
-------
BANKS - 10.5%
40,000 Bank of New York 1,337,500
14,000 Chase Manhattan 1,055,250
30,000 U.S. Bancorp 905,625
-------
3,298,375
CHEMICALS - 3.8%
10,001 du Pont (E.I.) de Nemours 608,795
15,000 Great Lakes Chemical 570,937
-------
1,179,732
COMMUNICATIONS - 4.2%
15,000 Motorola 1,320,000
---------
COMPUTERS - 4.0%
30,000 Dell * 1,254,375
---------
HEALTH CARE - 7.6%
15,000 Bausch & Lomb 989,062
15,000 Johnson & Johnson 1,378,125
---------
2,367,187
INTERNET - 10.9%
10,000 CMGI * 1,025,000
7,000 eBay * 987,437
7,722 Yahoo! * 1,386,099
---------
3,398,536
MEDIA - 4.7%
32,000 CBS * 1,480,000
---------
OIL & GAS - 6.2%
24,568 Conoco-Class B 672,562
125,000 Ocean Energy * 1,273,437
---------
1,945,999
PHARMACEUTICALS - 2.4%
15,000 Pharmacia & Upjohn 744,375
-------
SOFTWARE - 2.7%
40,000 Novell * 827,500
-------
*Non-income producing security.
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LEPERCQ-ISTEL FUND
SCHEDULE OF INVESTMENTS (UNAUDITED) AS OF SEPTEMBER 30, 1999 (CONTINUED)
NUMBER OF MARKET
SHARES VALUE
TELEPHONE - 12.1%
25,000 AT&T $1,087,500
51,250 Global Crossing * 1,358,125
45,000 Qwest Communications * 1,330,313
---------
3,775,938
INTERNATIONAL EQUITIES - 7.0%
50,000 Ispat International NV 521,875
20,000 Nortel Networks 1,020,000
8,000 Siemens AG 651,771
-------
2,193,646
TOTAL COMMON STOCKS 24,866,538
RESTRICTED SECURITIES + - 0.0%
38,020 WestFed Holdings, Class B, Common * 1
128,290 WestFed Holdings, 15.50%, Convertible Preferred * 1
-
TOTAL RESTRICTED SECURITIES 2
PRINCIPAL AMOUNT
U.S. TREASURY BILLS - 14.3%
$3,500,000 U.S. Treasury Bill, due 10/21/99 3,491,114
1,000,000 U.S. Treasury Bill, due 12/16/99 990,521
-------
TOTAL U.S. TREASURY BILLS 4,481,635
VARIABLE RATE DEMAND NOTES - 5.9%
96,000 American Family 96,000
885,424 General Mills 885,424
218,329 Warner Lambert 218,329
654,398 Wisconsin Electric Power Company 654,398
-------
TOTAL VARIABLE RATE DEMAND NOTES 1,854,151
Total Investments - 99.8% 31,202,326
----------
Other Assets Less Liabilities - 0.2% 69,223
------
NET ASSETS - 100.0% $31,271,549
===========
Net Asset Value Per Share $19.37
(Based on 1,614,276.750 shares outstanding)
*Non-income producing security.
+The Westfed Holdings securities were acquired for a total cost of $2 in
conjunction with the Agreement on Transfer of Assets between Lepercq, de
Neuflize & Co. Incorporated and Pilgrim Management Corporation. As part of the
Agreement on Transfer, the Fund acquired net tax operating loss carryforwards.
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LEPERCQ-ISTEL FUND
TRUSTEES
+Bruno Desforges CHAIRMAN OF THE BOARD, LEPERCQ-ISTEL TRUST; MANAGING
DIRECTOR, LEPERCQ, DE NEUFLIZE & CO. INCORPORATED;
DIRECTOR AND CHAIRMAN OF THE BOARD,
LEPERCQ, DE NEUFLIZE SECURITIES INC.
Stanley A. Deitch PRINCIPAL, CPI ASSOCIATES, INC., MEMBER, AMERICAN
INSTITUTE OF CPA'S.
+Francois Letaconnoux DIRECTOR, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
LEPERCQ INC., LEPERCQ, DE NEUFLIZE & CO. INCORPORATED
AND LEPERCQ, DE NEUFLIZE SECURITIES INC.
Jean-Louis Milin MANAGING DIRECTOR, BANQUE DE NEUFLIZE, SCHLUMBERGER,
MALLET
*Marvin Schiller, Ph.D. DIRECTOR, TUTOR TIME LEARNING SYSTEMS, INC.; GENERAL
PARTNER, REPRISE CAPITAL CORP..
*Franz Skryanz FINANCIAL CONSULTANT
Marie-Monique Steckel PRESIDENT, FRANCE TELECOM NORTH AMERICA; DIRECTOR,
MICROCARD TECHNOLOGIES INC.; DIRECTOR, GLOBECAST NORTH
AMERICA INC.; DIRECTOR, C&P PRESS, INC.
Dennis Tarzian PRESIDENT AND CHIEF EXECUTIVE OFFICER, NEW CENTURY
EDUCATION CORP.; DIRECTOR, NATIONAL REGISTERED AGENTS,
INC.
* MEMBER OF AUDIT, ETHICS AND NOMINATING COMMITTEES
+ INTERESTED TRUSTEE
OFFICERS
Tsering Ngudu PRESIDENT
Jerry Getsos EXECUTIVE VICE PRESIDENT
Peter Hartnedy SECRETARY AND TREASURER
Investment Adviser LEPERCQ, DE NEUFLIZE & CO.
INCORPORATED, NEW YORK
Underwriter & Distributor LEPERCQ, DE NEUFLIZE SECURITIES INC.,
NEW YORK
Dividend Paying Agent, FIRSTAR MUTUAL FUND SERVICES, LLC
Transfer Agent, Administrator
and Accounting Services
Agent
Custodian FIRSTAR BANK MILWAUKEE, N.A.
Legal Counsel BATTLE FOWLER LLP, NEW YORK
Independent Auditors KPMG LLP, MILWAUKEE
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