LETTER TO SHAREHOLDERS
Dear Investor:
Dreyfus Strategic Growth, L.P. was affected by stock market
cross-currents during its latest fiscal year, which ended December 31, 1994.
Nonetheless, the Fund outperformed the Standard & Poor's 500 Composite Stock
Price Index for the year, but did not do as well as the Dow Jones Industrial
Average Index of blue chip stocks.
The Fund's total return for the 12-month period ended December 31, 1994
was 3.01% based upon net asset value per share,* which compares with 1.31%
for the Standard & Poor's 500 Composite Stock Price Index and 5.02% for the
Dow Jones Industrial Average for the same period.**
For most of the year, the Fund stayed with the fundamental approach that
had been followed previously, which included making considerable use of
speculative investment techniques, including short selling and futures
contracts. We continued to employ a contrarian, value-oriented approach,
utilizing a bottom-up microanalysis to select a mixture of long and short
positions.
While the strategy worked very well in the first half of the fiscal year,
it was not as successful later in the year, particularly as the Federal
Reserve Board continued with its program, begun in February, to raise
interest rates as a preventive measure against inflation.
In the first half of the year the Fund was heavily into short positions,
which proved profitable up to that point. On the long side, the portfolio
stressed consumer issues, financials, mining and metals, transportation and
technology, as well as some holdings in Japanese securities.
In the second half of the year it appeared that the Fund overstayed the
market with some of its short positions, while a number of the long holdings
eroded in value. On the short side, the portfolio held on too long to some of
the technology issues. Net asset value benefitted from shorting of Standard &
Poor's futures, but holdings in gold stocks and in cyclical industrials
worked against us.
As the year's end approached, arrangements were made for a change in
management of the Fund that became effective January 1, 1995. You were
advised of this in a letter, which you should have received in early January.
As of January 1, Osprey Funds Management no longer serves as Dreyfus
Strategic Growth's sub-investment advisor, and The Dreyfus Corporation, which
previously supervised and assisted the overall management of the Fund, has
resumed day-to-day management of the Fund's investments. For the time being,
I am acting once again as portfolio manager until a permanent portfolio
manager is chosen.
In anticipation of different market conditions in January, we moved the
portfolio to a more neutral position.
At year-end, long equity holdings amounted to 21.69% of the portfolio,
with the largest holdings on a percentage basis in Consumer Durables,
Financial Companies, Health Care and Transportation. Offsetting this were
short positions in U.S. stocks equalling 13.5% of the U.S. common stocks. The
balance of funds was invested in Treasury bills.
We appreciate your investment in Dreyfus Strategic Growth and will make
every effort to justify your confidence in Dreyfus management.
Sincerely,
(Howard Stein Signature Logo)
Howard Stein
Portfolio Manager
Chairman, The Dreyfus Corporation
January 11, 1995
New York, N.Y.
*Total return represents the change during the period in a hypothetical
account with distributions reinvested.
** SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the
reinvestment of income dividends and, where applicable, capital gain
distributions. Unlike the Fund, which can utilize a broad range of
investment techniques, both the Standard & Poor's 500 Composite Stock
Price Index and the Dow Jones Industrial Average are widely accepted
unmanaged indexes of U.S. stock market performance composed of only
equity securities.
DREYFUS STRATEGIC GROWTH, L.P. DECEMBER 31, 1994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS STRATEGIC
GROWTH, L.P. AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A]
*Source: Lipper Analytical Services, Inc.
AVERAGE ANNUAL TOTAL RETURNS
% RETURN REFLECTING
% RETURN WITHOUT MAXIMUM INITIAL
PERIOD ENDED 12/31/94 SALES CHARGE SALES CHARGE (3.0%)
- ------------------------- ------------------- ---------------------
1 Year 3.01% (.08%)
5 Years 6.04 5.39
From Inception (3/27/87) 13.23 12.79
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Strategic
Growth, L.P. on 3/27/87 (Inception Date) to a $10,000 investment made in the
Standard & Poor's 500 Composite Stock Price Index on that date. For
comparative purposes, the value of the Index on 3/31/87 is used as the
beginning value on 3/27/87. All dividends and capital gain distributions are
reinvested.
The Fund's performance takes into account all applicable fees and expenses.
Unlike the Fund which can utilize a broad range of investment techniques, the
Standard & Poor's 500 Composite Stock Price Index is a widely accepted,
unmanaged index of overall stock market performance composed only of equity
securities which does not take into account charges, fees and other expenses.
Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Condensed Financial
Information section of the Prospectus and elsewhere in this report.
DREYFUS STRATEGIC GROWTH, L.P. DECEMBER 31, 1994
BROAD SECTOR ALLOCATION
[Exhibit B] [Exhibit A]
LONG POSITIONS STOCKS SOLD SHORT
<TABLE>
<CAPTION>
Portfolio composition is subject to change at any time.
ASSET ALLOCATION
LONG SHORT
<S> <C> <S> <C>
Common Stocks.................... 21.7% Common Stocks.................... 13.5%
Cash Equivalents................. 78.3
-------
100.0%
TEN LARGEST EQUITY HOLDINGS
LONG SHORT
First Colony..................... 1.8% Oxford Health Plans.............. 1.6%
Cedar Fair, L.P.................. 1.5 Cobra Golf....................... 1.1
Physician Corp. of America....... 1.2 Applied Materials................ 0.9
Microsoft........................ 1.2 Cracker Barrel Old Country Store. 0.7
CSX.............................. 1.1 Columbia/HCA Healthcare.......... 0.7
Reebok International............. 1.0 Caremark International........... 0.7
American President Cos........... 1.0 PacifiCare Health Systems, Cl. B. 0.7
Mark IV Industries............... 1.0 Advanced Micro Devices........... 0.6
Overseas Shipholding Group....... 0.9 Sports & Recreation.............. 0.6
Temple-Inland.................... 0.9 Quantum Health Resources......... 0.4
</TABLE>
All percentages shown above are based on Total Net Assets.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF INVESTMENTS DECEMBER 31, 1994
COMMON STOCKS--21.7% SHARES VALUE
------------- -------------
<S> <C> <C>
CONSUMER DURABLES--2.6% Cavalier Homes 21,700 $ 235,987
Chrysler............................... 10,000 490,000
General Motors......................... 20,000 845,000
Leggett & Platt........................ 25,000 875,000
Shaw Industries........................ 10,000 148,750
-------------
2,594,737
-------------
CONSUMER
NON-DURABLES--1.3% Chic by H.I.S.......................... (a) 25,000 237,500
Reebok International................... 26,000 1,027,000
-------------
1,264,500
-------------
CONSUMER SERVICES--1.7% Cedar Fair, L.P 50,000 1,475,000
Renaissance Communications............. 7,500 208,125
-------------
1,683,125
-------------
ENERGY--.6% Camco International 33,000 622,875
-------------
FINANCE--4.2% Allied Group 15,000 371,250
First Colony........................... 80,000 1,790,000
FirstFed Michigan...................... 20,000 410,000
Frontier Insurance Group............... 30,000 656,250
Salomon................................ 10,000 375,000
20th Century Industries................ 50,000 525,000
-------------
4,127,500
-------------
HEALTH CARE--2.3% Bard (C.R.) 10,000 270,000
McKesson............................... 10,000 326,250
National Health Laboratories Holdings... 10,000 132,500
Physician Corp. of America........... (a) 60,000 1,230,000
Unilab............................... (a) 80,000 320,000
-------------
2,278,750
-------------
PROCESS INDUSTRIES--1.6% Longview Fibre 45,000 708,750
Temple-Inland.......................... 20,000 902,500
-------------
1,611,250
-------------
PRODUCER
MANUFACTURING--1.6% Mark IV Industries..................... 50,000 987,500
Pentair................................ 14,000 591,500
-------------
1,579,000
-------------
RETAIL TRADE--1.5% Fay's 15,000 97,500
Federated Department Stores.......... (a) 25,000 481,250
Government Technology Services....... (a) 55,000 591,250
House of Fabrics..................... (a) 100,000 112,500
Perry Drug Stores.................... (a) 13,000 143,000
-------------
1,425,500
-------------
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1994
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- -------------
TECHNOLOGY--1.3% JetForm (a) 10,000 $ 72,500
Microsoft............................ (a) 20,000 1,222,500
-------------
1,295,000
-------------
TRANSPORTATION--3.0% American President Cos 40,000 1,010,000
CSX.................................... 15,000 1,044,375
Overseas Shipholding Group............. 40,000 920,000
-------------
2,974,375
-------------
TOTAL COMMON STOCKS
(cost $22,100,951)................... $21,456,612
=============
PRINCIPAL
SHORT-TERM INVESTMENTS--74.4% AMOUNT
-------------
U.S. TREASURY BILLS: 4.75%, 1/5/95 (b) $15,774,000 $15,765,668
4.98%, 1/12/95......................... 7,667,000 7,655,334
5.01%, 1/19/95....................... (b) 11,063,000 11,035,273
5.15%, 2/2/95.......................... 2,342,000 2,331,279
5.18%, 3/2/95.......................... 169,000 167,541
5.37%, 3/16/95....................... (c) 36,028,000 35,630,311
5.35%, 3/23/95......................... 1,040,000 1,027,481
-------------
TOTAL SHORT-TERM INVESTMENTS
(cost $73,612,887)................... $73,612,887
=============
TOTAL INVESTMENTS (cost $95,713,838)........................................ 96.1% $95,069,499
====== =============
CASH AND RECEIVABLES (NET) ......................................... 3.9% $ 3,824,210
====== =============
NET ASSETS.................................................................. 100.0% $98,893,709
====== =============
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Partially held by broker as collateral for open short positions.
(c) Partially held by the custodian in a segregated account as
collateral for open financial futures positions.
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL FUTURES DECEMBER 31,1994
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
FINANCIAL FUTURES SOLD SHORT CONTRACTS BY CONTRACTS EXPIRATION AT 12/31/94
- -------------------------------- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C>
Standard & Poor's 500........................ 108 ($24,912,900) March '95 $86,591
==========
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF SECURITIES SOLD SHORT DECEMBER 31, 1994
COMMON STOCKS SHARES VALUE
- ----------------- ------- -------------
<S> <C> <C>
Advanced Micro Devices...................................................... 25,000 $ 621,875
American Express............................................................ 5,000 147,500
Applied Materials........................................................... 20,000 845,000
Caremark International...................................................... 40,000 685,000
Caterpillar................................................................. 5,000 275,625
Cerner...................................................................... 2,000 88,250
Circus Circus Enterprises................................................... 10,000 232,500
Cobra Golf.................................................................. 30,000 1,072,500
Columbia/HCA Healthcare..................................................... 20,000 730,000
Compaq Computer............................................................. 5,000 197,500
Computer Associates International........................................... 5,000 242,500
Conrail..................................................................... 5,000 252,500
Cracker Barrel Old Country Store............................................ 40,000 740,000
Dresser Industries.......................................................... 10,000 188,750
EMC......................................................................... 10,000 216,250
FHP International........................................................... 5,000 128,750
FMC......................................................................... 5,000 288,750
Hasbro...................................................................... 5,000 146,250
HEALTHSOUTH Rehabilitation.................................................. 5,000 185,000
Illinois Tool Works......................................................... 5,000 218,750
Mentor Graphics............................................................. 10,000 152,500
Microsoft................................................................... 2,500 152,812
Molten Metal Technology..................................................... 12,500 203,125
Motorola.................................................................... 5,000 289,375
National Gaming............................................................. 2,000 24,000
Oracle Systems.............................................................. 2,000 88,250
Oxford Health Plans......................................................... 20,000 1,585,000
PacifiCare Health Systems, Cl. B............................................ 10,000 660,000
Quantum Health Resources.................................................... 15,000 431,250
Schwab (Charles)............................................................ 10,000 348,750
Scientific-Atlanta.......................................................... 5,000 105,000
Sequent Computer Systems.................................................... 5,000 98,750
Southland................................................................... 50,000 225,000
Sports & Recreation......................................................... 22,500 579,375
Symbol Technologies......................................................... 5,000 154,375
U.S. HealthCare............................................................. 5,000 206,250
United Healthcare........................................................... 5,000 225,625
Varity...................................................................... 10,000 362,500
-------------
TOTAL SECURITES SOLD SHORT
(proceeds $12,747,227).................................................. $13,395,187
============
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $95,713,838)_see statement...................................... $ 95,069,499
Cash.................................................................... 74,492
Receivable from brokers for proceeds on securities sold short........... 12,747,227
Receivable for investment securities sold............................... 6,183,666
Dividends and interest receivable....................................... 93,328
Receivable for futures variation margin_Note 4(a)....................... 86,591
Receivable for shares of Partnership Interest sold...................... 19,399
Prepaid expenses........................................................ 25,124
--------------
114,299,326
LIABILITIES:
Due to The Dreyfus Corporation.......................................... $ 63,818
Due to Distributor...................................................... 21,273
Securities sold short, at value
(proceeds $12,747,227)_see statement.................................. 13,395,187
Payable for investment securities purchased............................. 1,518,890
Payable for shares of Partnership Interest redeemed..................... 254,298
Loan commitment fees and interest payable............................... 6,086
Accrued expenses........................................................ 146,065 15,405,617
------------- --------------
NET ASSETS ................................................................ $ 98,893,709
==============
REPRESENTED BY:
Paid-in capital......................................................... $ 62,180,631
Accumulated undistributed investment income_net......................... 14,195,798
Accumulated undistributed net realized gain on investments and
foreign currency transactions......................................... 23,722,988
Accumulated net unrealized depreciation on investments and securities sold
short (including $86,591 net unrealized appreciation on financial
futures)_Note 4(b).................................................... (1,205,708)
--------------
NET ASSETS at value applicable to 2,512,129 outstanding shares of
Partnership Interest, equivalent to $39.37 per share
(unlimited number of Limited Partners).................................. $ 98,893,709
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1994
INVESTMENT INCOME:
INCOME:
<S> <C> <C>
Interest.............................................................. $ 2,470,764
Cash dividends (net of $7,806 foreign taxes withheld at source)....... 342,296
------------
TOTAL INCOME...................................................... $ 2,813,060
EXPENSES:
Management fee_Note 3(a).............................................. 556,411
Investor servicing costs_Note 3(b).................................... 290,005
Professional fees..................................................... 81,352
Dividends on securities sold short.................................... 79,317
Prospectus and investors' reports_Note 3(b)........................... 66,182
Loan commitment fees and interest expense_Note 2...................... 37,318
Custodian fees........................................................ 35,708
Managing General Partners' fees and expenses_Note 3(c)................ 26,428
Registration fees..................................................... 25,614
Miscellaneous......................................................... 1,914
------------
TOTAL EXPENSES.................................................... 1,200,249
------------
INVESTMENT INCOME--NET............................................ 1,612,811
------------
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments_Note 4(a):
Long transactions (including options transactions and
foreign currency transactions).................................... $(2,020,684)
Short sale transactions............................................... 1,126,186
Net realized (loss) on forward currency exchange contracts_Note 4(a):
Long transactions..................................................... (546,537)
Short transactions.................................................... (145,207)
Net realized gain on financial futures_Note 4(a):
Long transactions..................................................... 673,555
Short transactions.................................................... 2,525,630
------------
NET REALIZED GAIN..................................................... 1,612,943
Net unrealized (depreciation) on investments (including options transactions), foreign
currency transactions, forward currency exchange contracts and securities sold
short (including $122,841 net unrealized appreciation on financial futures) (3,309,863)
------------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (1,696,920)
------------
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS...................... $ (84,109)
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS STRATEGIC GROWTH, L.P.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
-------------------------------
1993 1994
------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 338,723 $ 1,612,811
Net realized gain on investments........................................ 5,737,378 1,612,943
Net unrealized appreciation (depreciation) on investments for the year.. 3,373,357 (3,309,863)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS....... 9,449,458 (84,109)
------------- -------------
PARTNERSHIP INTEREST TRANSACTIONS:
Net proceeds from shares sold........................................... 3,226,194 72,386,547
Cost of shares redeemed................................................. (12,043,177) (18,806,148)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM PARTNERSHIP INTEREST TRANSACTIONS (8,816,983) 53,580,399
------------- -------------
TOTAL INCREASE IN NET ASSETS...................................... 632,475 53,496,290
NET ASSETS:
Beginning of year....................................................... 44,764,944 45,397,419
------------- -------------
End of year (including undistributed investment income_net:
$12,582,987 in 1993 and $14,195,798 in 1994).......................... $45,397,419 $98,893,709
============ =============
SHARES SHARES
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 93,622 1,799,462
Shares redeemed......................................................... (367,091) (475,280)
------------- -------------
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... (273,469) 1,324,182
============ =============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Partnership Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
PER SHARE DATA: 1990 1991 1992 1993 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $29.37 $27.27 $36.19 $30.63 $38.22
------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income_net........................ 2.37 2.07 1.38 2.21 .87(1)
Net realized and unrealized gain (loss) on investments (4.47) 6.85 (6.94) 5.38 .28
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS........... (2.10) 8.92 (5.56) 7.59 1.15
------- ------- ------- ------- -------
Net asset value, end of year................. $27.27 $36.19 $30.63 $38.22 $39.37
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2) (7.15%) 32.71% (15.36%) 24.78% 3.01%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets 1.50%(3) 1.50%(3) 1.50%(3) 1.59%(3) 1.46%
Ratio of interest expense, loan commitment fees
and dividends on securities sold short
to average net assets...................... .96% .08% .22% .03% .16%
Ratio of net investment income to average net assets 1.79% 1.48% .83% .79% 2.17%
Decrease reflected in above expense ratios due to
undertaking by the Manager................. -- -- -- .06% --
Portfolio Turnover Rate...................... 188.16% 95.49% 209.38% 301.07% 269.41%
Net Assets, end of year (000's Omitted)...... $60,383 $61,063 $44,765 $45,397 $98,894
- -------------------------
(1) Based on an average of shares outstanding at each month end.
(2) Exclusive of sales load.
(3) Net of expenses reimbursed.
See notes to financial statements.
</TABLE>
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940 ("Act")
as a non-diversified open-end management investment company. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. Osprey Funds
Management, a Maryland Limited Partnership ("Osprey") serves as the Fund's
sub-investment adviser. Effective January 1, 1995, Osprey, will no longer
serve as the Fund's sub-investment adviser. As of such date, the Manager will
assume the day-to-day management of the Fund's investments. Dreyfus Service
Corporation, until August 24, 1994, acted as the distributor of the Fund's
shares. As of December 31, 1994, Dreyfus Partnership Management, Inc. held
30,207 shares. Dreyfus Service Corporation and Dreyfus Partnership
Management, Inc. are wholly-owned subsidiaries of the Manager. Effective
August 24, 1994, the Manager became a direct subsidiary of Mellon Bank, N.A.
On August 24, 1994, Premier Mutual Fund Services, Inc. (the
"Distributor") was engaged as the Fund's distributor. The Distributor,
located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned
subsidiary of Institutional Administration Services, Inc., a provider of
mutual fund administration services, the parent company of which is Boston
Institutional Group, Inc.
(A) PORTFOLIO VALUATION: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Managing General
Partners. Short-term investments are carried at amortized cost, which
approximates value. Investments denominated in foreign currencies are
translated to U.S. dollars at the prevailing rates of exchange.
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
and maturities of short-term securities, sales of foreign currencies,
currency gains or losses realized on securities transactions, the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books, and the U.S. dollar equivalent of the amounts
actually received or paid. Net unrealized foreign exchange gains and losses
arise from changes in the value of assets and liabilities at fiscal year end,
resulting from changes in exchange rates.
(C) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) DISTRIBUTIONS TO INVESTORS: Distributions from investment income-net
and distributions from net realized capital gains may be allocated and paid
annually after the end of the year in which earned.
(E) INCOME TAXES: As a partnership, the Fund itself will not be subject
to Federal, State and City income taxes. Instead, each investor will be
allocated, and subject to tax on, his distributive share of the Fund's
income. Therefore, no income tax provision is required.
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--BANK LINE OF CREDIT:
Effective December 1, 1994, in accordance with an agreement with a bank,
the Fund may borrow up to $25 million under a short-term unsecured line of
credit. In connection therewith, the Fund has agreed to pay commitment fees
at an annual rate of .125 of 1% on the total line of credit. Prior to
December 1, 1994, in accordance with an agreement with a bank, the Fund could
borrow up to $10 million under a short-term unsecured line of credit.
Interest on borrowings is charged at rates which are related to Federal Funds
rates in effect from time to time.
At December 31, 1994, there were no outstanding borrowings under the line
of credit.
The average daily amount of short-term debt outstanding during the year
ended December 31, 1994 was approximately $556,000, with a related weighted
average annualized interest rate of 6.22%. The maximum amount borrowed at any
time during the year ended December 31, 1994 was $10 million.
NOTE 3--INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a Management Agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the average
daily value of the Fund's net assets and is payable monthly. The Manager and
Osprey have agreed that if in any full year the Fund's aggregate expenses,
exclusive of taxes, brokerage, interest on borrowings (which, in the view of
Stroock & Stroock & Lavan, counsel to the Fund, also contemplates loan
commitment fees and dividends and interest accrued on securities sold short),
and extraordinary expenses, exceed the expense limitation of any state having
jurisdiction over the Fund, the Manager and Osprey will bear the excess
expense in proportion to their management fee and sub-investment advisory fee
to the extent required by state law. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement of expenses
in any full year that such expenses (exclusive of distribution expenses and
certain expenses as described above) exceed 2 1/2% of the first $30 million,
2% of the next $70 million and 1 1/2% of the excess over $100 million of the
average value of the Fund's net assets in accordance with California "blue
sky" regulations. There was no expense reimbursement for the year ended
December 31, 1994.
Pursuant to a Sub-Investment Advisory Agreement between the Manager and
Osprey, the sub-investment advisory fee is payable monthly by the Manager and
computed on the average daily value of the Fund's net assets at the following
annual rates:
AVERAGE NET ASSETS OSPREY
----------------------- --------------
0 up to $25 million..................... .15 of 1%
$25 up to $75 million................... .25 of 1%
$75 up to $200 million.................. .30 of 1%
$200 up to $300 million................. .35 of 1%
in excess of $300 million............... .375 of 1%
The Distributor retained $1,111,127 during the year ended December 31,
1994 from commissions earned on sales of Fund shares.
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) On August 3, 1994, Fund investors approved a revised Service Plan
(the "Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Plan,
effective August 24, 1994, the Fund (a) reimburses the Distributor for
payments to third parties for distributing the Fund's shares and servicing
investor accounts and (b) pays the Manager, Dreyfus Service Corporation or
any affiliate (collectively "Dreyfus") for advertising and marketing relating
to the Fund and servicing investor accounts, at an annual rate of .25 of 1%
of the value of the Fund's average daily net assets. Each of the Distributor
and Dreyfus may pay Service Agents (a securities dealer, financial
institution or other industry professional) a fee in respect of the Fund's
shares owned by investors with whom the Service Agent has a servicing
relationship or for whom the Servicing Agent is the dealer or holder of
record. Each of the Distributor and Dreyfus determine the amounts to be paid
to Service Agents to which it will make payments and the basis on which such
payments are made. The Plan also separately provides for the Fund to bear the
costs of preparing, printing and distributing certain of the Fund's
prospectuses and statements of additional information and costs associated
with implementing and operating the Plan, not to exceed the greater of
$100,000 or .005 of 1% of the Fund's average net assets for any full year.
Prior to August 24, 1994, the Fund's Service Plan ("prior Service Plan")
provided that the Fund pay the Dreyfus Service Corporation at an annual rate
of .25 of 1% of the value of the Fund's average daily net assets, for costs
and expenses in connection with advertising, marketing and distributing the
Fund's shares and for servicing investor accounts. Dreyfus Service
Corporation made payments to one or more Service Agents based on the value of
the Fund's shares owned by clients of the Service Agent. The Prior Service
Plan also separately provides for the Fund to bear the costs of preparing,
printing and distributing certain of the Fund's prospectuses and statements
of additional information and costs associated with implementing and
operating the Plan, not to exceed the greater of $100,000 or .005 of 1% of
the Fund's average daily net assets for any full year.
During the year ended December 31, 1994, $97,988 was charged to the Fund
pursuant to the Plan and $106,446 was charged pursuant to the prior Service
Plan.
(C) Prior to August 24, 1994, certain officers and Managing General
Partners of the Fund were "affiliated persons," as defined in the Act, of the
Investment Adviser and/or Dreyfus Service Corporation. Each Managing General
Partner who is not an "affiliated person" receives an annual fee of $2,500
and an attendance fee of $250 per meeting.
NOTE 4--SECURITIES TRANSACTIONS:
(A) The following summarizes the aggregate amount of purchases and sales
of investment securities and securities sold short, excluding short-term
securities, forward currency exchange contracts and options transactions,
during the year ended December 31, 1994:
<TABLE>
<CAPTION>
PURCHASES SALES
----------------- -----------------
<S> <C> <C>
Long transactions.................... $ 73,306,252 $ 70,783,831
Short sale transactions.............. 68,803,950 81,124,174
----------------- -----------------
TOTAL.............................. $142,110,202 $151,908,005
================ ===============
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at
current market value. The Fund would incur a loss if the price of the
security increases between the date of the short sale and the date on which
the Fund replaces the borrowed
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
security. The Fund would realize a gain if the price of the security declines
between those dates. Until the Fund replaces the borrowed security, the Fund
will maintain daily, a segregated account with a broker and custodian, of
cash and/or U.S. Government securities sufficient to cover its short
position. Securities sold short at December 31, 1994 and their related market
values and proceeds are set forth in the Statement of Securities Sold Short.
When executing forward currency exchange contracts, the Fund is obligated
to buy or sell a foreign currency at a specified rate on a certain date in
the future. With respect to sales of forward currency exchange contracts, the
Fund would incur a loss if the value of the contract increases between the
date the forward contract is opened and the date the forward contract is
closed. The Fund realizes a gain if the value of the contract decreases
between those dates. With respect to purchases of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates. At December 31, 1994, there were no forward
currency exchange contracts outstanding.
In addition, the following table summarizes the Fund's call/put options
written transactions for the year ended December 31, 1994:
<TABLE>
<CAPTION>
OPTIONS TERMINATED
----------------------------
NET
NUMBER OF PREMIUMS REALIZED
CONTRACTS RECEIVED COST GAIN
------------ -------------- ------------ ----------
<S> <C> <C> <C> <C>
OPTIONS WRITTEN:
Contracts outstanding December 31, 1993..... 11 $ 322,414
Contracts written........................... 39,086 680,392
------------ --------------
39,097 1,002,806
------------ --------------
Contracts Terminated:
Closed.................................... 14,435 677,761 $414,849 $262,912
Expired................................... 24,662 325,045 ---- 325,045
------------ -------------- ------------ -----------
Total contracts terminated............ 39,097 1,002,806 $414,849 $587,957
------------ -------------- ========== ============
Contracts outstanding December 31, 1994..... --- $ ----
============ ============
</TABLE>
As a writer of call options, the Fund receives a premium at the outset and
then bears the market risk of unfavorable changes
in the price of the financial instrument underlying the option. Generally,
the Fund would incur a gain, to the extent of the premium, if the price of
the underlying financial instrument decreases between the date the option is
written and the date on which the option is terminated. Generally, the Fund
would realize a loss, if the price of the financial instrument increases
between those dates. At December 31, 1994, there were no call options written
outstanding.
As a writer of put options, the Fund receives a premium at the outset and
then bears the market risk of unfavorable changes in the price of the
financial instrument underlying the option. Generally, the Fund would incur a
gain, to the extent of the premium, if the price of the underlying financial
instrument increases between the date the option is written and the date on
which the option is terminated. Generally, the Fund would realize a loss, if
the price of the financial instrument declines between those dates. At
December 31, 1994, there were no put options written outstanding.
DREYFUS STRATEGIC GROWTH, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund is engaged in trading restricted options, which are not exchange
traded. The Fund's exposure to credit risk associated with counter party
nonperformance on these investments is typically limited to the unrealized
gains inherent in such investments that are recognized in the statement of
assets and liabilities. At December 31, 1994, there were no restricted
options outstanding.
The Fund is engaged in trading financial futures contracts. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments (see the Statement of Financial Futures). Investments
in financial futures require the Fund to "mark to market" on a daily basis,
which reflects the change in the market value of the contract at the close of
each day's trading. Accordingly, variation margin payments are made or
received to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments
require initial margin deposits with a custodian, which consist of cash or
cash equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on which
the contract is traded and is subject to change.
(B) At December 31, 1994, accumulated net unrealized depreciation on
investments was $1,205,708, consisting of $1,427,892 gross unrealized
appreciation and $2,633,600 gross unrealized depreciation.
At December 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
DREYFUS STRATEGIC GROWTH, L.P.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
INVESTORS AND MANAGING GENERAL PARTNERS
DREYFUS STRATEGIC GROWTH, L.P.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Strategic Growth, L.P., including the statements of investments,
financial futures and securities sold short, as of December 31, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
financial highlights for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights 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 and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1994 by correspondence with the custodian
and brokers. 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, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Strategic Growth, L.P. at December 31, 1994, the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the indicated years, in conformity with generally accepted
accounting principles.
(Logo Signature)
(Ernst & Young LLP)
New York, New York
February 2, 1995
(Dreyfus `D' Logo)
DREYFUS STRATEGIC
GROWTH, L.P.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
The Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
The Shareholder Services Group, Inc.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 038AR9412
(Dreyfus Logo)
Strategic
Growth, L.P.
Annual Report
December 31, 1994
(Dreyfus Lion Logo)
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS STRATEGIC GROWTH, L.P.
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE
INDEX
EXHIBIT A:
__________________________________________________________
| | STANDARD | |
| | & POOR'S 500 | DREYFUS |
| PERIOD | COMPOSITE STOCK | STRATEGIC |
| | PRICE INDEX * | GROWTH |
|--------- | ---------------- | ------------------|
| 3/27/87 | 10,000 | 9,702 |
|12/31/87 | 8,673 | 15,821 |
|12/31/88 | 10,109 | 16,630 |
|12/31/89 | 13,307 | 18,997 |
|12/31/90 | 12,893 | 17,639 |
|12/31/91 | 16,812 | 23,409 |
|12/31/92 | 18,092 | 19,812 |
|12/31/93 | 19,912 | 24,722 |
|12/31/94 | 20,174 | 25,466 |
|----------------------------------------------------------
*Source: Lipper Analytical Services, Inc.
Dreyfus Strategic Growth, L.P.
Broad Sector Allocation
| --------------------------------------|
| Cash Equivalents 78.3 % |
| Finance 4.2 % |
| Transportation 3.0 % |
| Consumer Durables 2.6 % |
| Health Care 2.3 % |
| Consumer Services 1.7 % |
| Process Industries 1.6 % |
| Producer Manufacturing 1.6 % |
| Retail Trade 1.5 % |
| Consumer Non-Durables 1.3 % |
| Technology 1.3 % |
| Energy 0.6 % |
| --------------------------------------|
Long Positions
Dreyfus Strategic Growth, L.P.
Broad Sector Allocation
| -------------------------------------------------|
| Health Care 4.9%|
| Technology 3.3%|
| Consumer Durables 1.2%|
| Consumer Services 1.0%|
| Producer Manufacturing 0.9%|
| Retail Trade 0.8%|
| Finance 0.5%|
| Process Industries 0.3%|
| Transportation 0.2%|
| Industrial Services 0.2%|
| Energy 0.2%|
| |
| -------------------------------------------------|
Stocks Sold Short
