<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
---------------
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 0-16746
ML FUTURES INVESTMENTS II L.P.
------------------------------
(Exact Name of Registrant as
specified in its charter)
Delaware 13-3481305
- ---------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
c/o Merrill Lynch Investment Partners Inc.
Merrill Lynch World Headquarters - South Tower, 6th Fl.
World Financial Center New York, New York 10080-6106
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
212-236-5662
---------------------------------------------
(Registrant's telephone number, including area code)
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
This document contains 11 pages.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF FINANCIAL CONDITION
---------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- ------------
<S> <C> <C>
ASSETS
- ------
Accrued interest $ 27,870 $ 43,202
Equity in commodity futures trading
accounts:
Cash and option premiums 6,604,250 10,849,816
Net unrealized profit on open contracts 52,065 3,892
Investments 6,970,338 3,680,154
Receivable from outside investments 20,444 39,689
------------- ------------
TOTAL $13,674,967 $14,616,753
============= ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Redemptions payable $ 212,669 $ 153,870
Brokerage commissions payable 48,867 88,521
Profit shares payable 49,003 75,440
Administrative fees payable 1,396 2,270
------------- ------------
Total liabilities 311,935 320,101
------------- ------------
PARTNERS' CAPITAL:
General Partners (1229 and 1229 Units) 216,364 208,266
Limited Partners (74676 and 83137 Units) 13,146,668 14,088,386
------------- ------------
Total partners' capital 13,363,032 14,296,652
------------- ------------
TOTAL $13,674,967 $14,616,753
============= ============
NET ASSET VALUE PER UNIT
(Based on 75905 and 84366 Units outstanding) $176.05 $169.46
============= ============
See notes to financial statements.
</TABLE>
2
<PAGE>
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF OPERATIONS
------------------------
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Trading profits (loss):
Realized $52,873 $648,930 $441,363 $1,831,078
Change in unrealized 13,962 (1,138,996) 48,173 (1,344,250)
------------- ------------- ------------ ------------
Total trading results 66,835 (490,066) 489,536 486,828
------------- ------------- ------------ ------------
Interest income 89,530 184,368 180,484 367,008
Income from investments (82,821) - 266,754 -
------------- ------------- ------------ ------------
Total revenues 73,544 (305,698) 936,774 853,836
------------- ------------- ------------ ------------
EXPENSES:
Profit shares 850 9,369 50,956 232,311
Brokerage commissions 152,396 386,702 318,355 794,887
Administrative fees 4,354 9,916 8,922 20,382
------------- ------------- ------------ ------------
Total expenses 157,600 405,987 378,233 1,047,580
------------- ------------- ------------ ------------
NET INCOME (LOSS) $(84,056) $(711,685) $558,541 $(193,744)
============= ============= ============ ============
NET INCOME (LOSS) PER UNIT:
Weighted average number of units
outstanding 79,948 92,483 81,799 94,361
============= ============= ============ ============
Weighted average net income (loss)
per Limited Partner
and General Partner Unit $(1.05) $(7.70) $6.83 $(2.05)
============= ============= ============ ============
</TABLE>
See notes to financial statements.
3
<PAGE>
ML FUTURES INVESTMENTS II L.P.
------------------------------
(a Delaware limited partnership)
------------------------------
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
------------------------------------------
For the six months ended June 30, 1997 and 1996
-----------------------------------------------
<TABLE>
<CAPTION>
Units Limited General Total
Partners Partner
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
PARTNERS' CAPITAL,
December 31, 1995 97,165 $15,931,370 $204,068 $16,135,438
Net loss - (190,728) (3,016) (193,744)
Redemptions (7,505) (1,272,618) - (1,272,618)
--------- ------------ --------- ------------
PARTNERS' CAPITAL,
June 30, 1996 89,660 $14,468,024 $201,052 $14,669,076
========= ============ ========= ============
PARTNERS' CAPITAL,
December 31, 1996 84,366 $14,088,386 $208,266 $14,296,652
Net income - 550,443 8,098 558,541
Redemptions (8,461) (1,492,161) - (1,492,161)
--------- ------------ --------- ------------
PARTNERS' CAPITAL,
June 30, 1997 75,905 $13,146,668 $216,364 $13,363,032
========= ============ ========= ============
</TABLE>
See notes to financial statements.
4
<PAGE>
ML FUTURES INVESTMENTS II L.P.
------------------------------
(A Delaware Limited Partnership)
------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These financial statements have been prepared without audit. In the opinion of
management, the financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the financial position
of ML Futures Investments II L.P. (the "Partnership" or the "Fund") as of June
30, 1997 and the results of its operations for the six months ended June 30,
1997 and 1996. However, the operating results for the interim periods may not be
indicative of the results expected for the full year.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with general accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's Annual Report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1996 (the "Annual Report").
2. INVESTMENTS
At June 30, 1997 the Partnership had investments in the ML Chesapeake
Diversified L.L.C. ("Chesapeake LLC")and the Sjo Prospect Diversified Portfolio
L.L.C. ("SJO LLC").
Total revenues and fees with respect to such investments are set forth as
follows:
<TABLE>
<CAPTION>
For the three months Total Brokerage Administrative Profit Income (loss)
ended June 30, 1997 Revenue Commissions Fees Shares from Investments
--------- ------------ ---------------- -------- ------------------
<S> <C> <C> <C> <C> <C>
Chesapeake LLC ($86,539) $78,800 $2,251 ($33,569) ($134,021)
SJO LLC 137,791 79,555 2,273 4,763 51,200
--------- ------------ ---------------- -------- ------------------
Total $51,252 $158,355 $4,524 ($28,806) ($82,821)
========= ============ ================ ======== ==================
<CAPTION>
For the six months Total Brokerage Administrative Profit Income (loss)
ended June 30, 1997 Revenue Commissions Fees Shares from Investments
--------- ------------ ---------------- -------- ------------------
<S> <C> <C> <C> <C> <C>
Chesapeake LLC $267,672 $167,289 $4,689 $19,909 $75,785
SJO LLC 387,301 165,854 4,649 25,829 190,969
--------- ------------ ---------------- -------- ------------------
Total $654,973 $333,143 $9,338 $45,738 $266,754
========= ============ ================ ======== ==================
</TABLE>
5
<PAGE>
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
The Partnership's revenues by reporting category for the respective periods
are as follows:
<TABLE>
<CAPTION>
For the three For the three For the six For the six
months ended months ended months ended months ended
June 30, June 30, June 30, June 30,
1997 1996 1997 1996
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Interest rates &
Stock indices $ 8,701 $(111,929) $105,383 $ 4,079
Commodities (68,376) (52,810) (77,889) (40,046)
Currencies 143,361 337,254 459,041 720,114
Energy (41,804) 158,596 (18,287) 497,035
Metals 24,953 (821,177) 21,288 (694,354)
-------------- --------------- -------------- --------------
$ 66,835 $(490,066) $489,536 $ 486,828
============== =============== ============== ==============
</TABLE>
Fair Value
- ----------
The contract/notional values of the Partnership's open derivative instrument
positions as of June 30, 1997 and December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
---------------------------------------- -----------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Interest rate &
Stock Indices $6,171,666 $ 1,132,108 $ - $ -
Commodities 384,055 423,587 - -
Currencies 8,289,853 8,061,886 4,983,334 8,047,276
Energy 19,800 189,204 - -
Metals - 268,240 203,772 203,772
------------------- ------------------- ------------------- -------------------
$14,865,374 $10,075,025 $5,187,106 $8,251,048
=================== =================== =================== ===================
</TABLE>
The contract/notional value of the Partnership's exchange-traded and non-
exchange-traded open derivative instrument positions as of June 30, 1997 and
December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
---------------------------------------- -----------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Exchange
traded $ 7,337,489 $ 3,359,217 $ - $ -
Non-Exchange
traded 7,527,885 6,715,808 5,187,106 8,251,048
------------------- ------------------- ------------------- -------------------
$14,865,374 $10,075,025 $5,187,106 $8,251,048
=================== =================== =================== ===================
</TABLE>
6
<PAGE>
The average fair value of the Partnership's derivative instrument positions
which were open as of the end of each calendar month during the six months ended
June 30, 1997 and the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
---------------------------------------- -----------------------------------------
Commitment to Commitment to Commitment to Commitment to
Purchase (Futures, Sell (Futures, Purchase (Futures, Sell (Futures,
Options & Forwards) Options & Forwards) Options & Forwards) Options & Forwards)
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Interest rate &
Stock Indices $6,052,657 $3,006,385 $63,801,511 $29,975,829
Commodities 445,185 308,670 7,411,870 670,528
Currencies 6,638,884 9,956,272 9,913,048 12,448,727
Energy 315,454 235,514 2,537,389 613,726
Metals 88,569 189,493 9,385,390 2,926,264
------------------- ------------------- ------------------- -------------------
$13,540,749 $13,696,334 $93,049,208 $46,635,074
=================== =================== =================== ===================
</TABLE>
As of June 30, 1997 and December 31, 1996, $2,279,846 and $6,275,690 of the
Partnership's assets, respectively, were held in segregated accounts at MLF in
accordance with Commodity Futures Trading Commission regulations.
The gross unrealized profit and the net unrealized profit (loss) on the
Partnership's open derivative instrument positions as of June 30, 1997 and
December 31, 1996 were as follows:
<TABLE>
<CAPTION>
1997 1996
--------------------------------- -----------------------------------
Gross Net Gross Net
Unrealized Unrealized Unrealized Unrealized
Profit Profit (Loss) Profit Profit (Loss)
------------ ----------------- -------------- -----------------
<S> <C> <C> <C> <C>
Exchange
traded $69,397 $50,559 $ - $ -
Non-Exchange
traded 47,000 1,506 59,798 3,892
------------ ----------------- -------------- -----------------
$116,397 $52,065 $59,798 $3,892
============ ================= ============== =================
</TABLE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Operational Overview; Advisor Selections
- ----------------------------------------
Due to the nature of the Fund's business, its results of operations
depend on Merrill Lynch Investment Partners Inc.'s ("MLIP") ability to select
Advisors and determine the appropriate percentage of assets to allocate to them
for trading, as well as the Advisors' ability to recognize and capitalize on
trends and other profit opportunities in different sectors of the world
commodity markets. MLIP's Advisor selection procedure and leveraging analysis,
as well as the Advisors' trading methods, are confidential, so that
substantially the only information that can be furnished regarding the Fund's
results of operations is contained in the performance record of its trading.
Unlike operating businesses, general economic or seasonal conditions do not
directly affect the profit potential of the Fund, and its past performance is
not necessarily indicative of future results. Because of the speculative nature
of its trading, operational or economic trends have little relevance to the
Fund's results. MLIP believes, however, that there are certain market
conditions, for example, markets with strong price trends, in which the Fund has
a better likelihood of being profitable than in others.
7
<PAGE>
As of July 1, 1997, the Partnership's assets were allocated as follows:
<TABLE>
<CAPTION>
Trading Advisor Markets Traded % Allocation
- --------------- -------------- -------------
<S> <C> <C>
Chesapeake Capital Corporation Diversified 25.27
Sjo, Inc. Diversified 26.08
Northfield Trading L.P. Diversified 20.52
Trendstat Capital Management, Inc. Currencies 28.13
------
100.00%
</TABLE>
MLIP expects to continue to change both allocations and Advisor
selections from time to time without advance notice to existing investors.
MLIP has no timetable or schedule for making Advisor changes or
reallocations, and generally intends to make a medium- to long-term commitment
to all Advisors selected. However, there can be no assurance as to the
frequency or number of the Advisor changes which may take place in the future,
or as to how long any of the current Advisors will continue to manage assets for
the Fund.
Results of Operations - General
- -------------------------------
MLIP believes that multi-Advisor futures funds should be regarded as
medium- to long-term investments but, unlike an operating business, it is
difficult to identify "trends" in the Fund's operations and virtually impossible
to make any predictions regarding future results based on results to date.
Markets in which sustained price trends occur with some frequency tend
to be more favorable to managed futures investments than "whipsaw," "choppy"
markets, but (i) this is not always the case, (ii) it is impossible to predict
when trending markets will occur and (iii) different Advisors are affected
differently by trends in general as well as by particular types of trends.
The Fund controls credit risk in its trading in the derivatives markets
by trading only through Merrill Lynch entities which MLIP believes to be
creditworthy. The Fund attempts to control the market risk inherent in its
derivatives trading by utilizing a multi-advisor, multi-strategy structure.
This structure purposefully attempts to diversify the Fund's Advisor group among
different strategy types and market sectors in an effort to reduce risk
(although the Fund's portfolio currently emphasizes technical and trend-
following approaches).
Performance Summary
- -------------------
During the first six months of 1996, the Fund's average month-end Net
Assets equaled $15,997,480, and the Fund recognized gross trading gains of
$486,828 or 3.04% of average month-end Net Assets. Brokerage commissions of
$794,887 or 4.97%, Administrative fees of $20,382 or .13%, and Profit shares of
$232,311 or 1.45% of average month-end Net Assets were paid. Interest income of
$367,008 or 2.29% of average month-end Net Assets resulted in a net loss of
$193,744 or 1.21% of average month-end Net Assets, which resulted in a 1.48%
decrease in the Net Asset Value per Unit since December 31, 1995.
During the first six months of 1997, the Fund's average month-end Net
Assets equaled $14,225,022, and the Fund recognized gross trading gains of
$489,536 or 3.44% of average month-end Net Assets. Brokerage commissions of
$318,355 or 2.24%, Administrative fees of $8,922 or .06% and Profit Shares of
$50,956 or .36% of average month-end Net Assets were paid. Interest income of
$180,484 or 1.27% and Income from Investments of $266,754 or 1.88% of average
month-end Net Assets resulted in net gain of $558,541 or 3.93% of average month-
end Net Assets which resulted in a 3.89% increase in the Net Asset Value per
Unit since December 31, 1996.
During the first six months of 1997 and 1996, the Fund experienced 7
profitable months and 5 unprofitable months.
<TABLE>
<CAPTION>
MONTH-END NET ASSET VALUE PER UNIT
- ------------------------------------------------------------
Jan. Feb. Mar. Apr. May Jun.
- ------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1996 $176.46 $165.47 $171.43 $177.03 $168.65 $163.61
- ------------------------------------------------------------
1997 $173.97 $178.86 $177.05 $174.27 $175.72 $176.05
- ------------------------------------------------------------
</TABLE>
Importance of Market Factors
- ----------------------------
Comparisons between the Fund's performance in a given period in one
fiscal year to the same period in a prior year are unlikely to be meaningful,
given the uncertainty of price movements in the markets traded by the Fund. In
general, MLIP expects that the Fund is most likely to trade successfully in
markets which exhibit strong and sustained price trends. The current Advisor
group emphasizes technical and trend-following methods. Consequently, one would
expect that in trendless, "choppy" markets the Fund would likely be
unprofitable, while in markets in which major price movements occur, the Fund
would have its best profit potential (although there could be no assurance that
the Fund would,
8
<PAGE>
in fact, trade profitably). However, trend-followers not infrequently will miss
major price movements, and market corrections can result in rapid and material
losses (sometimes as much as 5% in a single day). Although MLIP monitors market
conditions and Advisor performance on an ongoing basis in overseeing the Fund's
trading, MLIP does not attempt to "market forecast" or to "match" trading styles
with predicted market conditions. Rather, MLIP concentrates on quantitative and
qualitative analysis of prospective Advisors, as well as on statistical studies
of the historical performance parameters of different Advisor combinations in
selecting Advisors and allocating and reallocating Fund assets among them.
Because managed futures advisors' strategies are proprietary and
confidential and market movements unpredictable, selecting advisors to implement
speculative trading strategies involves considerable uncertainty. Furthermore,
the concentration of the Fund's current Advisor portfolio, both in terms of the
number of managers retained and the common emphasis of their strategies on
technical and trend-following methods, increases the risk that unexpectedly bad
performance, turbulent market conditions or a combination of the two will result
in significant losses.
Liquidity
- ---------
Most of the Partnership's assets are held as cash which, in turn, is
used to margin its futures positions and earn interest income and is withdrawn,
as necessary, to pay redemptions and fees.
The futures contracts in which the Partnership trades may become illiquid
under certain market conditions. Commodity exchanges limit fluctuations in
futures prices during a single day by regulations referred to as "daily limits."
During a single day no trades may be executed at prices beyond the daily limit.
Once the price of a futures contract for a particular commodity has increased or
decreased by an amount equal to the daily limit, positions in the commodity can
generally neither be taken nor liquidated unless traders are willing to effect
trades at or within the limit. Futures contracts have occasionally moved to the
daily limit for several consecutive days with little or no trading. Such market
conditions could prevent the Partnership from promptly liquidating its futures
(including its options) positions. There are no limitations on the daily price
moves in trading foreign currency forward contracts through banks, although
illiquidity may develop in the forward markets due to large spreads between
"bid" and "ask" prices quoted. (Forward contracts are the bank version of
currency futures contracts and are not traded on exchanges.)
Capital Resources
- -----------------
The Partnership does not have, nor does it expect to have, any capital
assets and has no material commitments for capital expenditures. The
Partnership uses its assets to supply the necessary margin or premiums for, and
to pay any losses incurred in connection with, its trading activity and to pay
redemptions and fees.
Inflation is not a significant factor in the Fund's profitability,
although inflationary cycles can give rise to the type of major price movements
which can have a materially favorable or adverse impact on the Fund's
performance.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending proceedings to which the Partnership or the General
Partner is a party.
On June 24, 1997, the Commodity Futures Trading Commission("CFTC")
accepted an Offer of Settlement from Merrill Lynch Futures Inc. ("MLF") and
others, in a matter captioned "In the Matter of Mitsubishi Corporation and
Merrill Lynch Futures Inc., et al.", CFTC Docket No. 97-10, pursuant to which
MLF, without admitting or denying the allegations against it, consented to a
finding by the CFTC that MLF had violated Section 4c(a)(A) of the Commodity
Exchange Act (the "Act"), relating to wash sales, and CFTC Regulation 1.37(a),
relating to recordkeeping requirements . MLF agreed to cease and desist from
violating Section 4c(a)(A) of the Act and Regulation 1.37(a), and to pay a civil
monetary penalty of $175,000.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information.
James M. Bernard, formerly a Senior Vice President of MLIP is no longer
with the firm.
Michael A. Karmelin has been appointed Chief Financial Officer, Vice
President and Treasurer of MLIP. Mr. Karmelin assumed these positions on April
14, 1997, when he completed his tenure as Chief Financial Officer of Merrill
Lynch, Hubbard Inc. ("ML Hubbard"), a sponsor of real estate limited
partnerships. Mr. Karmelin was born in 1947. Mr. Karmelin joined ML Hubbard in
January 1994 as a Vice President. From May 1994 until he joined MLIP, Mr.
Karmelin was the Chief Financial Officer of ML Hubbard, responsible for its
accounting, treasury and tax functions. Prior to joining ML Hubbard, Mr.
Karmelin held several senior financial positions with Merrill Lynch & Co., Inc.
("ML&Co.") and Merrill Lynch, Pierce, Fenner & Smith Incorporated from December
1985 to December 1993, including Vice President/Senior Financial Officer
Corporate Real Estate and Purchasing, Manager Commitment Control/Capital
Budgeting, and Senior Project Manager/Project Analysis. Prior to joining
ML&Co., Mr. Karmelin was employed at Avco Corporation for 17 years, where he
held a variety of financial positions. Mr. Karmelin holds a B.B.A. degree in
Accounting from Baruch College, C.U.N.Y. and a Master of Business Administration
degree in Corporate Strategy and Finance from New York University. Mr. Karmelin
passed the Certified Public Accountant examination in 1974 and is a member of
the Treasury Management Association, the Institute of Management Accountants and
The Strategic Leadership Forum.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
--------
There are no exhibits required to be filed as part of this document.
(b) Reports on Form 8-K
-------------------
There were no reports on Form 8-K filed during the first six months of
fiscal 1997.
10
<PAGE>
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.
ML FUTURES INVESTMENTS II L.P.
By: MERRILL LYNCH INVESTMENT PARTNERS INC.
(General Partner)
Date: August 12, 1997 By /s/ JOHN R. FRAWLEY, JR.
------------------------
John R. Frawley, Jr.
President, Chief Executive Officer
and Director
Date: August 12, 1997 By /s/ MICHAEL A. KARMELIN
-----------------------
Michael A. Karmelin
Chief Financial Officer, Vice President
and Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> BD
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> JUN-30-1997 JUN-30-1996
<CASH> 0 0
<RECEIVABLES> 13,674,967 15,089,849
<SECURITIES-RESALE> 0 0
<SECURITIES-BORROWED> 0 0
<INSTRUMENTS-OWNED> 0 0
<PP&E> 0 0
<TOTAL-ASSETS> 13,674,967 15,089,849
<SHORT-TERM> 0 0
<PAYABLES> 311,935 420,773
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 0 0
<INSTRUMENTS-SOLD> 0 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 13,363,032 14,669,076
<TOTAL-LIABILITY-AND-EQUITY> 13,674,967 15,089,847
<TRADING-REVENUE> 489,536 486,828
<INTEREST-DIVIDENDS> 180,484 367,008
<COMMISSIONS> 378,233 1,047,580
<INVESTMENT-BANKING-REVENUES> 266,754 0
<FEE-REVENUE> 0 0
<INTEREST-EXPENSE> 0 0
<COMPENSATION> 0 0
<INCOME-PRETAX> 558,541 (193,744)
<INCOME-PRE-EXTRAORDINARY> 558,541 (193,744)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 558,541 (193,744)
<EPS-PRIMARY> 6.83 (2.05)
<EPS-DILUTED> 6.83 (2.05)
</TABLE>
