SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 For the quarterly period ended
September 30, 1998,
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission File Number 000-23529
THE WILLOWBRIDGE FUND L.P.
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(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation or organization)
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22-2678474
(IRS Employer Identification Number)
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4 Benedek Road, Princeton, New Jersey
(Address of principal executive offices)
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08540
(Zip Code)
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(609) 921-0717
(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant: (1) has 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, and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
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THE WILLOWBRIDGE FUND L.P.
INDEX TO FORM 10-Q
PART I - FINANCIAL INFORMATION
Page
Item 1. Unaudited Consolidated Financial Statements .......................3
Statement of Financial Condition as of September 30, 1998
(unaudited) and December 31, 1997 .................................3
Statement of Operations For the Three Months
Ended September 30, 1998 and 1997 and For the Nine Months Ended
September 30, 1998 and 1997 (unaudited)............................4
Statement of Changes in Partners' Capital For the Nine Months
Ended September 30, 1998 (unaudited) and the Years Ended
December 31, 1997 and 1996.........................................5
Notes to Financial Statements for the Nine Months Ended
September 30, 1998 (unaudited) and the Years Ended December 31,
1997 and 1996......................................................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operation...........................................8
Item 3. Quantitative and Qualitative Disclosures About Market Risk........12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.................................................13
Item 2. Changes in Securities and Use of Proceeds.........................13
Item 3. Defaults Upon Senior Securities...................................13
Item 4. Submission of Matters to a Vote of Security Holders...............13
Item 5. Other Information.................................................13
Item 6. Exhibits and Reports on Form 8-K..................................13
SIGNATURES
2
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Willowbridge Fund L.P.
STATEMENTS OF FINANCIAL CONDITION
September 30, 1998 (unaudited) and December 31, 1997
(in thousands, except per unit data)
Sept. 30, 1998 Dec. 31, 1997
ASSETS:
Equity in Commodity Futures Trading
Account:
Due from Broker $ 8,353,608 $ 11,176,071
Net Unrealized Appreciation 6,383,328 1,249,145
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Deposit with Brokers $ 14,736,936 12,425,216
Cash and Cash Equivalents 573,181 443,053
Fixed Income Securities 8,768,468 5,676,722
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Total Assets $ 24,078,585 $ 18,544,991
============= ==============
LIABILITIES:
Due to Partners $ 326,989 $ 89,875
Accrued Management Fees 130,550 42,883
Advanced Subscriptions 70,494 177,378
Accounts Payable 23,511 24,671
Commission Rebates 7,105 -
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Total Liabilities $ 558,649 $ 334,807
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PARTNERS' CAPITAL:
General Partner - 250.58 and 195.63 units
Outstanding at September 30, 1998
and December 31, 1997 $ 1,024,508 $ 680,879
Limited Partners - 5,502.06 and
5,036.43 units
Outstanding at September 30, 1998
and December 31, 1997 22,495,428 17,529,305
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23,519,936 18,210,184
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TOTAL LIABILITIES AND PARTNERS'
CAPITAL $24,078,585 $ 18,544,991
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NET ASSET VALUE PER UNIT $ 4,088.55 $ 3,480.50
============= ===============
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The Willowbridge Fund L.P.
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 1998 and 1997 and
For the Nine Months Ended September 30, 1998 and 1997
(unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
INCOME: 1998 1997 1998 1997
---- ---- ---- ----
Commodity Trading
Gains/(Losses):
Realized $3,957,834 $(737,313) $(1,007,101) $1,060,347
Change in Unrealized 5,582,990 80,135 5,144,278 (181,641)
----------- ---------- ------------ ----------
Gain (Loss) from
Commodity Trading 9,540,824 (657,178) 4,137,177 878,706
Interest Income 151,418 211,442 540,370 565,789
----------- ---------- ---------- ---------
Total Income (Loss) $9,692,242 $(445,736) $ 4,677,547 $1,444,495
----------- ---------- ---------- ---------
EXPENSES:
Brokerage Commissions $(135,998) $(154,198) $(445,806) $ (341,284)
Management Fees (46,762) (43,738) (130,550) (114,983)
Incentive Fees - - - (874,575)
General Partner
Management Fees - - (182,102) (108,033)
Operation Fees (69,784) (33,804) (237,659) (64,721)
=========== ============ =========== ==========
Total Expenses $ (252,544) $(231,740) $(996,117 $(1,503,596)
NET (LOSS)/GAIN: $ 9,439,698 $(677,476) $3,681,430 $( 59,101)
============ ========== =========== ===========
NET INCOME/(LOSS)
PER UNIT:
(based on weighted
average number of
units outstanding
during the period) $ 1,689.74 $ (148.10) $ 656.42 $ (14.83)
============ ========= ========= ===========
INCREASE/(DECREASE) IN $ 1,630.26 $ (101.92) $ 608.05 $ 152.25
NET ASSET VALUE PER UNIT: ========== ========= ========= ==========
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The Willowbridge Fund L.P.
Statements of Changes in Partners' Capital
For the Nine Months Ended September 30, 1998 (unaudited)
and the Years Ended December 31, 1997 and 1996
(in thousands, except unit data)
Total
Partners'
General Partner Limited Partners Capital
Units Dollars Units Dollars Dollars
- -------------------------------------------------------------------------------
PARTNERS' CAPITAL
12/31/95 28.8172 $ 87,940 930.6552 $2,838,743 $2,926,683
Additions 52.8522 $148,410 2,339.7640 6,809,415 6,957,825
Redemptions - - ( 151.5778) ( 460,574) ( 460,574)
Net Income 39,360 1,340,030 1,379,390
-------- -------- ---------- ---------- -----------
PARTNERS' CAPITAL
12/31/96 81.6694 275,710 3,118.8414 10,527,614 10,803,324
Additions 113.9754 406,274 2,404.7715 9,009,671 9,415,945
Redemptions (.0180) (65) (487.1799) (1,734,136) (1,734,201)
Net Income (1,040) (273,844) (274,884)
--------- --------- --------- ---------- ----------
PARTNERS' CAPITAL
12/31/97 195.6268 680,879 5,036.4330 17,529,305 18,210,184
Additions 67.1976 223,308 1,508.8546 4,522,350 4,745,657
Redemptions (12.2444) (30,100) (1,043.3276) (3,087,235) (3,117,335)
Net Income 150,422 3,531,008 3,681,430
---------- --------- ----------- --------- ---------
PARTNERS' CAPITAL
9/30/98 250.5800 $1,024,508 5,501.9600 $22,495,428 $23,519,936
========= ========== ========== =========== ===========
5
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THE WILLOWBRIDGE FUND L.P.
NOTES TO FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (Unaudited)
AND THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1. GENERAL
The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-Q.
Accordingly, certain information and footnotes required by generally
accepted accounting principles for complete financial statements are not
included herein.
Interim statements are subject to possible adjustments in connection with
the annual audit of the Partnership's financial statements for the full
year. In the Partnership's opinion, all adjustments necessary for a fair
presentation of these interim statements have been included and are of a
normal and recurring nature.
2. ORGANIZATION
The Willowbridge Fund L.P. (the "Partnership"), a Delaware limited
partnership, was organized on January 24, 1986. The Partnership is engaged
in the speculative trading of commodity futures contracts, options on
commodities or commodity futures contracts and forward contracts. Ruvane
Investment Corporation is the general partner of the Partnership (the
"General Partner"). The General Partner is registered as a Commodity Pool
Operator and a Commodity Trading Advisor ("CTA") with the Commodity Futures
Trading Commission. The General Partner is required by the Limited
Partnership Agreement, as amended and restated (the "Agreement"), to
contribute an amount equal to one percent of the aggregate capital raised
by the Partnership. The Agreement requires that all subscriptions are
subject to a one percent administrative charge payable to the General Partner.
The Partnership shall end on December 31, 2006, or earlier upon withdrawal,
insolvency or dissolution of the General Partner or a decline of greater
than fifty percent of the net assets of the Partnership, as defined in the
Agreement, or the occurrence of any event which shall make it unlawful for
the existence of the Partnership to be continued.
3. SIGNIFICANT ACCOUNTING POLICIES
Due from Broker - Due from broker represents cash required to meet margin
requirements and excess funds not required for margin that are typically
invested in 30 day commercial paper and U.S.
Treasury bills by the broker.
Revenue Recognition - Commodity futures, options and forward contract
transactions are recorded on the trade date and open contracts are
reflected in the financial statements at their fair value on the last
business day of the reporting period. The difference between the original
contract amount and fair value is reflected in income as an unrealized gain
or loss. Fair value is based on quoted market prices. All commodity
futures, options and forward contracts and financial instruments are
reflected at fair market value in the financial statements.
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Commissions - Prior to March 31, 1997, commission charges to open and close
contracts were expensed at the time the contract positions were opened.
Commencing April 1, 1998, commission charges were based on a percentage of
the net asset value of the fund at the beginning of the month. As of
September 30, 1998, the commission rate charged was 3.5 percent annually of
the net asset value of the Partnership.
Statement of Cash Flows - The Partnership has elected not to provide a
statement of Cash Flows as permitted by Statement of Financial Accounting
Standard No 102, Statement of Cash Flows- Exemption of Certain Enterprises
and Classification of Cash Flows from Certain Securities Acquired for
Resale.
Allocation of Profits (Loss) and Fees - New realized and unrealized trading
gains and losses, interest income and other operating income and expenses
are allocated to the partners monthly in proportion to their capital
account balance, as defined in the Agreement.
The General Partner was paid a management fee equal to one percent of the
net assets of the Partnership, as defined in the Agreement, as of the last
day of the previous fiscal year-end. Such fees amounted to $182,102,
$108,033 and $29,267 in the nine months ended September 31, 1998 and the
years ended December 31, 1997 and 1996, respectively.
Willowbridge Associates Inc. is the Partnership's trading advisor (the
"Advisor"). The Advisor is entitled to an incentive fee based on an
increase in the adjusted net asset value of the allocated assets of the
Partnership. The CTA received 25% of any new profits, as defined in the
Agreement. The term "new profits" is defined as the increase, if any, in
the adjusted net asset value of the allocated assets. In addition, the
Partnership pays a quarterly management fee of 0.25% (1% per year) of the
net asset value of the Partnership to the Advisor.
The Advisor rebates to the Partnership the incentive and management fees
incurred by certain partners, including employees of the Advisor who are
also limited partners in the Partnership. Incentive and management fees are
presented in the Partnership's financial statements gross of any amounts
rebated by the Advisor. The rebate to the Partnership is recorded on the
Partnership's financial statements as a capital contribution. The incentive
and management fees rebated to these partners in the nine months ended
September 31, 1998 and the years ended December 31, 1997 and 1996 were
$34,179, $116,051, and $37,049, respectively.
Administrative Expense - Administrative expenses include professional fees,
bookkeeping costs, and other charges such as registration fees, printing
costs and bank fees.
Income Taxes - Income taxes have not been provided in the accompanying
financial statements as each partner is individually liable for taxes, if
any, on their share of the Partnership profits.
Redemptions - Limited partners may redeem some or all of their units at the
net asset value per unit as of the last business day of each month on at
least ten days written notice to the General Partner.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
General
- -------
The Willowbridge Fund L.P. (the "Partnership") is engaged in the
speculative trading of commodity futures contracts, options on commodities
or commodity futures contracts and forward contracts. The objective of the
Partnership is the appreciation of its assets through speculative trading.
Ruvane Investment Corporation is the general partner of the Partnership
(the "General Partner") and Willowbridge Associates Inc. is the
Partnership's trading advisor (the "Advisor").
The success of the Partnership is dependent upon the ability of the Advisor
to generate trading profits through the speculative trading of commodity
interests sufficient to produce capital payments after payment of all fees
and expenses. Future results will depend in large part upon the commodity
interests markets in general, the performance of the Advisor, the amount of
additions to and redemptions from the Partnership and changes in interest
rates. Due to the highly leveraged nature of the Partnership's trading
activity, small price movements in commodity interests may result in
substantial gains or losses to the Partnership. As a result of these
factors, the Partnership's past performance is not indicative of future
results and any recent increases in net realized or unrealized gains may
have no bearing on any results that may be obtained in the future.
Until the close of business on December 31, 1996, the assets of the
Partnership were allocated entirely to the Advisor's Primary Program. The
Primary Program consists of three computer-based, quantitative trading
systems. To further diversify the Partnership's investment methodologies,
as of January 1, 1997, the General Partner allocated approximately one-half
of the Partnership's assets to the Primary Program and approximately
one-half to the Advisor's Mtech Trading Approach. The Mtech Trading
Approach is a highly discretionary approach managed by Michael Y. Gan, the
Executive Vice President of the Advisor. Effective June 1, 1998, the
General Partner re-allocated all of the Partnership's assets to the Primary
Program because the Mtech Trading Approach experienced year to date losses
of greater than 35%.
Until the close of business on March 31, 1997, the Partnership paid
commodity brokerage commissions to its clearing brokers on a per-trade
basis. Effective April 1, 1997, the Partnership began paying to the General
Partner a flat-rate monthly brokerage commission of 0.29% of the net asset
value of the Partnership at the beginning of each month (a 3.5% annual
rate). The General Partner pays from this amount all commission charges and
fees with respect to the Partnership's trading commodity interests.
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Results of Operations
- ----------------------
Comparison of Three Months Ended September 30, 1998 and 1997
For the quarter ended September 30, 1998, the Partnership had gains
comprised of $3,957,834 of realized gains on closed positions, $5,582,990
in net change in unrealized gains on open futures and options contracts and
$151,418 in interest income. For the same quarter in 1997, the Partnership
had losses comprised of $737,313 of realized losses on closed positions,
$80,135 in net change in unrealized gains on open futures and options
contracts and $211,442 in interest income.
In July 1998, trading was unprofitable in financial instruments, the
soybean complex and copper. Gains made in the Japanese Yen, foreign
financial instruments and gold failed to offset the losses. The Partnership
recorded a loss of $237,432 or $41.20 per unit. In August 1998, trading was
extremely profitable in both foreign and domestic financial instruments.
Unprofitable positions in foreign currencies produced some offsetting
losses. The Partnership recorded a gain of $4,420,675 or $770.25 per unit.
In September 1998, trading was extremely profitable in both foreign and
domestic financial instruments and in foreign currencies. Trading was
unprofitable in gold and the energy sector. The Partnership recorded a gain
of $5,256,455 or $901.21 per unit.
In July 1997, trading was profitable in the U.S. Dollar versus European
currencies, domestic financial instruments and the soybean complex.
Offsetting losses occurred in copper and foreign financial instruments. The
Partnership recorded a gain of $2,338,440 or $541.88 per unit. In August
1997, trading was unprofitable in domestic and foreign financial
instruments, currencies and base metals. Profitable positions in natural
gas, cocoa and coffee failed to offset the losses. The Partnership recorded
a loss of $1,696,214 or $370.78 per unit. In September 1997, trading was
unprofitable in domestic financial instruments, grains, coffee, sugar and
European currencies. Profits were derived from precious metals and the
energy complex. The Partnership recorded a loss of $1,319,702 or $273.02
per unit.
For the quarter ended September 30, 1998, the Partnership had expenses
comprised of $135,998 in brokerage commissions (including clearing and
exchange fees), $46,762 in management fees and $69,784 in administrative
expenses. For the same quarter in 1997, the Partnership had expenses
comprised of $154,198 in brokerage commissions (including clearing and
exchange fees), $43,738 in management fees and $33,804 in administrative
expenses. Brokerage commissions and management fees vary primarily as a
result of changes in assets under management. Administrative fees consist
primary of legal and other expenses relating to the Partnership's reporting
requirements under the Securities Exchange Act of 1934, as amended. The
Partnership became subject to such reporting requirements in April 1998.
As a result of the above, the Partnership recorded a gain of $9,439,698 or
$1,630 per unit for the quarter compared to a loss of $677,476 or
$101.92 per unit for the same quarter in 1997.
At September 30, 1998, the net asset value of the Partnership was
$23,519,936 compared to its net asset value of $18,210,184 at December 31,
1997. The net asset value per unit at September 30, 1998 was $4,088.55
compared to $3,480.50 at December 31, 1997.
During the quarter, the Partnership had no credit exposure to a
counterparty that is a foreign commodities exchange or to any counterparty
dealing in over the counter contracts which was material.
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Comparison of Nine Months Ended September 30, 1998 and 1997
For the nine months ended September 30, 1998, the Partnership had income
comprised of $1,007,101 of realized losses on closed positions, $5,144,278
in net change in unrealized gains on open futures and options contracts and
$540,370 in interest income. For the same period in 1997, the Partnership
had income comprised of $1,060,347 of realized gains on closed positions,
$181,641 in net change in unrealized losses on open futures and options
contracts and $565,789 in interest income.
In January 1998, trading was profitable in domestic and foreign financial
instruments, silver and food products. The Partnership recorded a gain of
$1,666,031 or $305.17 per unit. In February 1998, the Partnership recorded
its second worst month in its history. Trading losses were incurred in the
Japanese Yen, food products, grains and domestic financial instruments.
Profits were derived from silver. The Partnership recorded a loss of
$2,993,297 or $547.65 per unit. In March 1998, positions in the U.S. dollar
produced most of the gains, however, these were largely offset by losses in
domestic and foreign financial instruments, food products and grains. The
Partnership recorded a loss of $122,742 or $20.87 per unit. In April 1998,
trading was unprofitable in financial instruments, currencies, precious
metals and the energy complex. The Partnership recorded a loss of
$3,273,418 or $575.90 per unit. In May 1998, trading losses were incurred
in silver and grains. Profitable positions in the Japanese Yen and foreign
financial instruments failed to offset the losses. The Partnership recorded
a loss of $614,511 or $107.16 per unit. In June 1997, positions in foreign
currencies produced most of the losses. Trading also was unprofitable in
grains. Profits were incurred in domestic and foreign financial
instruments. The Partnership recorded a loss of $420,331 or $75.79 per
unit. Results for July, August and September 1998 are set forth above.
In January 1997, trading was profitable in coffee and the U.S. dollar
versus European currencies. The Partnership's positions in soybean meal and
natural gas also were profitable. Losses were incurred in global fixed
income and livestock. The Partnership recorded a gain of $398,088 or
$119.75 per unit. In February 1997, trading profits were incurred in
coffee, soybeans and corn. Additional profits were derived from currency
and metals positions. Losses were incurred in the energy complex. The
Partnership recorded a gain of $1,433,070 or $424.59 per unit. In March
1997, positions in the soybean complex produced most of the profits.
Positions in domestic and foreign financial instruments also were
profitable. Losses were incurred in the Japanese Yen. The Partnership
recorded a gain of $656,612 or $181.70 per unit. In April 1997, trading was
unprofitable in domestic financial instruments, foreign bonds, the Japanese
Yen and precious metals. Offsetting gains occurred in grains, coffee and
European currencies. The Partnership recorded a loss of $514,595 or $138.83
per unit. In May 1997, trading losses were incurred in wheat, global stock
indices and the Deutsche Mark. Profitable positions in copper, the Japanese
Yen and coffee failed to offset the losses. The Partnership recorded a loss
of $626,217 or $157.98 per unit. In June 1997, positions in grains and the
energy complex produced most of the losses. Trading also was unprofitable
in base metals and Japanese bonds. Profits were incurred in the U.S. dollar
and food products. The Partnership recorded a loss of $728,583 or $175.06
per unit. Results for July, August and September 1997 are set forth above.
For the nine months ended September 30, 1998, the Partnership had expenses
comprised of $445,806 in brokerage commissions (including clearing and
exchange fees), $312,652 in management fees (including the General
Partner's management fee) and $237,659 in administrative expenses. For the
same quarter in 1997, the Partnership had expenses comprised of $341,284 in
brokerage commissions (including clearing and exchange fees), $223,016 in
management fees (including the General Partner's management fee),
10
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$64,721 in administrative expenses and an incentive fee of $874,575.
Effective April 1, 1997, the Partnership ceased paying commodity brokerage
commissions to its brokers on a per-trade basis. Instead, the Partnership
pays to the General Partner a flat-rate monthly brokerage commission of
0.29% of the net asset value at the beginning of each month. The General
Partner pays from this amount all commission charges and fees with respect
to the Partnership's trading.
As a result of the above, the Partnership recorded a gain of $3,681,430 or
$608.05 per unit for the period compared to a loss of $59,101 or $152.25
per unit for the same period in 1997.
During the nine months ended September 30, 1998, the Partnership had no
credit exposure to a counterparty that is a foreign commodities exchange or
to any counterparty dealing in over the counter contracts which was
material.
Liquidity and Capital Resources
In general, the Advisor trades only those commodity interests that have
sufficient liquidity to enable it to enter and close out positions without
causing major price movements. Notwithstanding the foregoing, most United
States commodity exchanges limit the amount by which certain commodities
may move during a single day by regulations referred to as "daily price
fluctuation limits" or "daily limits." Pursuant to such regulations, no
trades may be executed on any given day at prices beyond daily limits. The
price of a futures contract occasionally has exceeded the daily limit for
several consecutive days, with little or no trading, thereby effectively
preventing a party from liquidating its position. While the occurrence of
such an event may reduce or eliminate the liquidity of a particular market,
it will not eliminate losses and may, in fact, substantially increase
losses because of the inability to liquidate unfavorable positions. In
addition, if there is little or no trading in a particular futures or
forward contract that the Partnership is trading, whether such illiquidity
is caused by any of the above reasons or otherwise, the Partnership may be
unable to liquidate its position prior to its expiration date, thereby
requiring the Partnership to make or take delivery of the underlying
interests of the commodity investment.
The Partnership's capital resources are dependent upon three factors: (a)
the income or losses generated by the Advisor; (b) the money invested or
redeemed by the limited partners; and (c) the capital invested or redeemed
by the General Partner.
The Partnership sells limited partnership units to investors from time to
time in private placements pursuant to Regulation D of the Securities Act
of 1933, as amended. As of the last day of any month, a limited partner may
redeem all of its limited partnership units on 10 days' prior written
notice to the General Partner. During the quarter ended September 30, 1998,
the Partnership sold 519.44 limited partnership units and 9.01 general
partnership units for a total of $1,425,036; investors redeemed 196.17
units for a total of $669,605. During the same quarter in 1997, the
Partnership sold 647.76 limited partnership units and 48.22 general
partnership units for a total of $2,715,124; investors redeemed 135.06
units for a total of $483,116. During the nine months ended September 30,
1998, the Partnership sold 1,508.95 limited partnership units and 67.19
general partnership units for a total of $4,745,650; investors redeemed
1,043.33 units for a total of $3,087,235. During the same period in 1997,
the Partnership sold 1,714.05 limited partnership units and 90.97 general
partnership units for a total of $6,959.935; investors redeemed 282.52
units for a total of $1,042,611. At September 30. 1998, there were 5,752.64
units outstanding (including 250.58 owned by the General Partner). At
September 30, 1997, there were 4,723 units outstanding (including 172.63
owned by the General Partner).
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The General Partner must maintain a capital account in such amount as is
necessary for the General Partner to maintain a one percent (1%) interest
in the capital, income and losses of the Partnership. All capital
contributions by the General Partner necessary to maintain such capital
account balance are evidenced by units of general partnership interest,
each of which has an initial value equal to the net asset value per unit at
the time of such contribution. The General Partner may withdraw any excess
above its required capital contribution without notice to the limited
partners and may also contribute any greater amount to the Partnership.
Year 2000 Issues
- ----------------
Commodity pools depend upon the smooth functioning of computer systems to
operate. Many computer systems in use today accept only two digit entries
in the date code field instead of four digit entries necessary to
distinguish 21st century dates from 20th century dates. As a result, many
companies' computer systems may need to be upgraded or replaced in order to
comply with such "Year 2000" requirements. The General Partner is in the
process of assessing the Partnership's Year 2000 issues. The Partnership
does not have its own computer system and relies on the Advisor to perform
most computer functions and to interface with other computer systems. As a
result, the Partnership expects to incur only minimal expenses in
connection with Year 2000 issues. The Advisor has established a working
group to address its Year 2000 issues and is in the process of ensuring
that its computer systems are Year 2000 compliant. The General Partner has
initiated communications with third parties with whom the Partnership has
important financial or operational relationships to determine the extent to
which they have Year 2000 issues. In addition, all United States futures
exchanges will be subject to monitoring by the Commodity Futures Trading
Commission of their Year 2000 preparedness and the major foreign futures
exchanges also are expected to be subject to market-wide testing of their
Year 2000 compliance programs during 1999. Nevertheless, there is no
assurance that the Advisor and other third parties will resolve all of
their year 2000 issues in a timely manner. The failure of the Advisor or
any third parties with whom the Partnership has important financial or
operational relationships to timely be Year 2000 compliant could have a
material adverse effect on the Partnership.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The General Partner is not aware of any pending legal proceedings to which
the Partnership or the General Partner is a party or to which any of their
assets are subject.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Items 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits--The following exhibit is filed as part of this report on
Form 10-Q:
27 Financial Data Schedule
Reports on Form 8-K--None.
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SIGNATURES
Pursuant to the requirements 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.
THE WILLOWBRIDGE FUND L.P.
Date: November 14, 1998 By: Ruvane Investment Corporation,
its General Partner
By: /s/ Robert L. Lerner
---------------------
Robert L. Lerner
President
14
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