LEPERCQ-ISTEL FUND
THIRD-QUARTER REPORT
SEPTEMBER 30, 2000
[OBJECT OMITTED]
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, 2000.
LEPERCQ-ISTEL FUND
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November 20, 2000
Dear Shareholders:
The performance of 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
2000 2000
Lepercq-Istel Fund -7.06% -16.07%
Lipper Multicap Core Index 0.54% 4.58%
Standard & Poor's 500 -0.97% -1.39%
Economic growth in the U.S. has slowed to the 3% area from the 5% to 6% range
earlier this year. The 3% rate approximates the non-inflationary growth rate of
the economy and presumably is the level that the Federal Reserve is currently
targeting. The moderation of growth improves the likelihood that the current
economic expansion and corporate profit growth cycle will continue.
The adjustment to lower profit growth has sent jitters through the stock market.
All major stock indices in the U.S. are now posting losses for the year.
While economic growth is clearly moderating, the evidence does not suggest an
imminent end to the current cycle. We believe that after the present period of
adjustment, the stock market will once again be in a position to anticipate a
favorable earnings outlook.
Starting in April, we raised the cash position to a higher than normal level to
serve as a cushion against market volatility. There are signs that this period
of adjustment to lower growth is approaching its conclusion. We expect to soon
start deploying a portion of the cash reserves in high quality companies, some
of which are now trading at attractive entry points.
Thank you for your continued support.
Sincerely,
/s/Tsering Ngudu /s/ Jerry Getsos
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Tsering Ngudu Jerry Getsos
President & Portfolio Manager Executive Vice President &
Portfolio Manager
Past performance is not predictive of future performance.
LEPERCQ-ISTEL FUND
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PERFORMANCE (UNAUDITED) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
Net Asset Value per Share, December 31, 1999 $25.57
Distribution during the Period: None
Net Asset Value per Share, September 30, 2000 $21.46
Total Return, Year to Date (16.07%)
Past performance is not predictive of future performance.
LEPERCQ-ISTEL FUND
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SCHEDULE OF INVESTMENTS (UNAUDITED) AS OF SEPTEMBER 30, 2000
NUMBER OF MARKET
SHARES VALUE
U.S. EQUITIES - 68.21%
CONSUMER CYCLICAL - 19.45%
INTERNET ADVERTISING - 1.16%
11,000 DoubleClick Inc. * $352,000
--------
INTERNET COMMERCE - 1.13%
5,000 eBay Inc. * 343,438
-------
INTERNET MEDIA - 1.99%
20,000 StarMedia Network, Inc. * 150,000
5,000 Yahoo! Inc. * 455,000
-------
605,000
MEDIA - 11.10%
35,000 The Walt Disney Company 1,338,750
34,720 Viacom Inc. * 2,031,120
---------
3,369,870
RETAILERS - 4.07%
25,000 The Gap, Inc. 503,125
62,000 J.C. Penney Company, Inc. 732,375
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1,235,500
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Total Consumer Cyclicals 5,905,808
---------
CONSUMER NON-CYCLICAL - 11.47%
HEALTH CARE - 5.57%
18,000 Johnson & Johnson 1,690,875
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PHARMACEUTICALS - 5.90%
29,750 Pharmacia Corporation 1,790,578
---------
Total Consumer Non-Cyclicals 3,481,453
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ENERGY - 2.54%
OIL & GAS - 2.54%
50,000 Ocean Energy Inc. * 771,875
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Total Energy 771,875
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FINANCIAL - 5.05%
BANKS - 5.05%
15,000 The Bank of New York Company, Inc. 840,937
15,000 The Chase Manhattan Corporation 692,813
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Total Financial 1,533,750
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INDUSTRIAL - 9.19%
COMMERCIAL SERVICES - 9.19%
3,000 Akamai Technologies, Inc. * 157,547
13,000 Commerce One, Inc. * 1,020,500
15,000 Exodus Communications, Inc. * 740,625
4,300 VeriSign, Inc. * 871,019
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Total Industrial 2,789,691
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LEPERCQ-ISTEL FUND
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SCHEDULE OF INVESTMENTS (UNAUDITED) AS OF SEPTEMBER 30, 2000 (CONTINUED)
NUMBER OF MARKET
SHARES VALUE
TECHNOLOGY - 18.47%
BIOTECHNOLOGY - 4.58%
5,000 ImClone Systems Incorporated * $585,313
10,000 Immunex Corporation * 435,000
9,000 Incyte Genomics, Inc. * 370,125
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1,390,438
COMMUNICATIONS EQUIPMENT - 7.17%
15,000 Cisco Systems, Inc. * 828,750
22,500 Motorola, Inc. 635,625
10,000 QUALCOMM Inc. * 712,500
-------
2,176,875
COMMUNICATIONS SOFTWARE - 2.62%
7,000 Phone.com, Inc. * 795,375
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SEMICONDUCTORS - 4.10%
20,000 Atmel Corporation * 303,750
2,500 Broadcom Corporation * 609,375
8,000 Intel Corporation 332,500
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1,245,625
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Total Technology 5,608,313
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UTILITIES - 2.04%
COMMUNICATIONS SERVICES - 2.04%
20,000 Global Crossing Ltd. * 620,000
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Total Utilities 620,000
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TOTAL U.S. EQUITIES 20,710,890
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INTERNATIONAL EQUITIES - 14.28%
BASIC MATERIALS - 0.82%
STEEL - 0.82%
50,000 Ispat International NV 250,000
-------
Total Basic Materials 250,000
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CONSUMER CYCLICAL - 2.00%
CONSUMER ELECTRONICS - 1.16%
3,500 Sony Corporation 353,281
-------
MEDIA - 0.84%
5,500 NTL Incorporated * 254,719
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Total Consumer Cyclical 608,000
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TECHNOLOGY - 11.46%
COMMUNICATIONS EQUIPMENT - 8.24%
19,000 Telefonaktiebolaget LM Ericsson AB 281,437
20,000 Nortel Networks Corporation 1,191,250
8,000 Siemens AG 1,028,908
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2,501,595
LEPERCQ-ISTEL FUND
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SCHEDULE OF INVESTMENTS (UNAUDITED) AS OF SEPTEMBER 30, 2000 (CONTINUED)
NUMBER OF MARKET
SHARES VALUE
SOFTWARE - 1.25%
8,000 SmartForce Public Limited Company * $379,000
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TELECOMMUNICATIONS EQUIPMENT - 1.97%
15,000 Nokia Oyj 597,187
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Total Technology 3,477,782
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TOTAL INTERNATIONAL EQUITIES 4,335,782
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TOTAL EQUITIES (COST $22,906,631) $25,046,672
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PRINCIPAL
AMOUNT SHORT-TERM INVESTMENTS - 18.46%
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U.S. TREASURIES - 16.31%
$3,000,000 U.S. Treasury Bill, due 11/9/00 2,980,451
2,000,000 U.S. Treasury Bill, due 12/21/00 1,973,334
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Total U.S. Treasuries 4,953,785
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VARIABLE RATE DEMAND NOTES# - 2.15%
91,879 American Family Financial Services, Inc., 6.2352% 91,879
373,262 Sara Lee Corporation, 6.2200% 373,262
186,783 Wisconsin Electric Power Company, 6.2352% 186,783
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Total Variable Rate Demand Notes 651,924
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TOTAL SHORT-TERM INVESTMENTS (COST $5,605,556) 5,605,709
---------
Total Investments - 100.95% (Cost $28,512,187) 30,652,381
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Liabilities, less Other Assets - (0.95)% (288,898)
---------
NET ASSETS - 100.00% $30,363,483
===========
Net Asset Value Per Share $21.46
======
(Based on 1,414,766.975 outstanding)
* Non-income producing security.
# Variable rate demand notes are considered short-term obligations and are
payable on demand. Interest rates change periodically on specified dates. The
rates shown are as of September 30, 2000.
LEPERCQ-ISTEL FUND
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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.
+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, DEMACHY
*Marvin Schiller, Ph.D. DIRECTOR, TUTOR TIME LEARNING SYSTEMS, INC.;
GENERAL PARTNER, REPRISE CAPITAL CORP.
*Franz Skryanz FINANCIAL CONSULTANT
Marie-Monique Steckel CONSULTANT; 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.
+Jean-Michel Terrein MANAGING DIRECTOR, LEPERCQ CORPORATION MANAGEMENT
LTD.
* 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
Transfer Agent, Dividend
Paying Agent, Administrator
and Fund Accountant FIRSTAR MUTUAL FUND SERVICES, LLC, MILWAUKEE
Custodian FIRSTAR BANK, N.A., CINCINNATI
Legal Counsel PAUL, HASTINGS, JANOFSKY & WALKER LLP,
NEW YORK
Independent Auditors KPMG LLP, CHICAGO