SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended September 30, 1999
------------------
Commission File Number 0-16898
-------
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
- ----------------------------------------------
(Exact name of registrant)
Delaware 75-2197831
- ----------------------- ------------------------------------
(State of Organization) (I.R.S. Employer Identification No.)
ATA Research, Inc. ProFutures, Inc.
8144 Walnut Hill Lane 11612 Bee Cave Road
Suite 300 Suite 100
Dallas, Texas 75231 Austin, Texas 78733
- -------------------------- --------------------
(Address of principal executive offices)
Registrant's telephone numbers
(214) 346-4900 (800) 348-3601
- -------------- --------------
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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
STATEMENTS OF FINANCIAL CONDITION
September 30, 1999 (Unaudited) and December 31, 1998 (Audited)
-----------
September 30, December 31,
1999 1998
---- ----
ASSETS
Equity in broker trading accounts
Cash $70,953,689 $19,438,737
Net option premiums (received) (47,079) (954,350)
Unrealized gain on open contracts 6,863,320 933,131
----------- -----------
Deposits with brokers 77,769,930 19,417,518
----------- -----------
Cash and cash equivalents 1,446 69,406,640
----------- -----------
Total assets $77,771,376 $88,824,158
=========== ===========
LIABILITIES
Accounts payable $ 4,449 $ 7,914
Commissions and other trading fees
on open contracts 78,356 71,578
Incentive fees payable 231,619 1,743,052
Management fees payable 496,743 544,769
Redemptions payable 814,772 900,346
----------- -----------
Total liabilities 1,625,939 3,267,659
----------- -----------
PARTNERS' CAPITAL (Net Asset Value)
General Partners - 428 and 434 units
outstanding at September 30, 1999
and December 31, 1998 1,097,124 1,111,029
Limited Partners - 29,247 and
32,993 units outstanding
at September 30, 1999 and
December 31, 1998 75,048,313 84,445,470
----------- -----------
Total partners' capital
(Net Asset Value) 76,145,437 85,556,499
----------- -----------
$77,771,376 $88,824,158
=========== ===========
See accompanying notes.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 1999 and 1998
(Unaudited)
-----------
Nine Months Ended
September 30,
1999 1998
---- ----
INCOME
Trading gains (losses)
Realized $(1,885,175) $ 8,467,156
Change in unrealized 5,930,189 2,496,502
----------- -----------
Gain from trading 4,045,014 10,963,658
Interest income 2,673,650 3,219,836
----------- -----------
Total income 6,718,664 14,183,494
----------- -----------
EXPENSES
Brokerage commissions 1,956,622 2,725,782
Management fees 3,176,581 3,180,773
Incentive fees 1,235,526 2,612,675
Operating expenses 157,888 250,907
----------- -----------
Total expenses 6,526,617 8,770,137
----------- -----------
NET INCOME $ 192,047 $ 5,413,357
=========== ===========
NET INCOME PER GENERAL AND LIMITED
PARTNER UNIT
(based on weighted average number
of units outstanding during the
period of 31,662 and 36,726,
respectively) $ 6.07 $ 147.40
=========== ===========
INCREASE IN NET ASSET VALUE PER
GENERAL AND LIMITED PARTNER UNIT $ 6.51 $ 167.91
=========== ===========
See accompanying notes.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 1999 and 1998
(Unaudited)
-----------
Three Months Ended
September 30,
1999 1998
---- ----
INCOME
Trading gains (losses)
Realized $(4,532,879) $ 8,881,165
Change in unrealized 3,174,877 5,446,142
----------- -----------
Gain (loss) from trading (1,358,002) 14,327,307
Interest income 866,753 1,001,288
----------- -----------
Total income (loss) (491,249) 15,328,595
----------- -----------
EXPENSES
Brokerage commissions 613,276 761,363
Management fees 1,008,165 1,047,495
Incentive fees 231,620 1,622,922
Operating expenses 35,758 71,743
----------- -----------
Total expenses 1,888,819 3,503,523
----------- -----------
NET INCOME (LOSS) $(2,380,068) $11,825,072
=========== ===========
NET INCOME (LOSS) PER GENERAL AND
LIMITED PARTNER UNIT
(based on weighted average number
of units outstanding during the
period of 30,306 and 35,185,
respectively) $ (78.53) $ 336.08
=========== ===========
INCREASE (DECREASE) IN NET ASSET
VALUE PER GENERAL AND LIMITED
PARTNER UNIT $ (76.37) $ 339.87
=========== ===========
See accompanying notes.
<TABLE>
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
For the Nine Months Ended September 30, 1999 and 1998
(Unaudited)
-----------
<CAPTION>
General Limited
Partners Partners Total
----------------- -------------------- --------------------
Units Amount Units Amount Units Amount
<S> <C> <C> <C> <C> <C> <C>
Balances
at
December 31,
1998 434 $1,111,029 32,993 $84,445,470 33,427 $85,556,499
Net income
for the
nine months
ended
September 30,
1999 2,206 189,841 192,047
Redemptions (6) (16,111) (3,746) (9,586,998) (3,752) (9,603,109)
---- ---------- ------ ----------- ------ -----------
Balances
at
September 30,
1999 428 $1,097,124 29,247 $75,048,313 29,675 $76,145,437
==== ========== ====== =========== ====== ===========
Balances
at
December 31,
1997 574 $1,328,151 37,927 $87,741,893 38,501 $89,070,044
Net income
for the
nine months
ended
September 30,
1998 96,397 5,316,960 5,413,357
Redemptions 0 0 (4,218) (9,416,080) (4,218) (9,416,080)
---- ---------- ------ ----------- ------ -----------
Balances
at
September 30,
1998 574 $1,424,548 33,709 $83,642,773 34,283 $85,067,321
==== ========== ====== =========== ====== ===========
Net asset value
per unit at
December 31, 1997 $ 2,313.44
===========
September 30, 1998 $ 2,481.35
===========
December 31, 1998 $ 2,559.49
===========
September 30, 1999 $ 2,566.00
===========
</TABLE>
See accompanying notes.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-----------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General Description of the Partnership
ATA Research/ProFutures Diversified Fund, L.P. (the Partnership) is a
Delaware limited partnership which operates as a commodity investment
pool. The Partnership's objective is to achieve appreciation of its
assets through the trading of futures contracts and other financial
instruments.
B. Regulation
As a registrant with the Securities and Exchange Commission, the
Partnership is subject to the regulatory requirements under the
Securities Acts of 1933 and 1934. As a commodity investment pool,
the Partnership is subject to the regulations of the Commodity
Futures Trading Commission, an agency of the United States (U.S.)
government which regulates most aspects of the commodity futures
industry; rules of the National Futures Association, an industry
self-regulatory organization; and the requirements of commodity
exchanges and Futures Commission Merchants (brokers) through which
the Partnership trades.
C. Method of Reporting
The Partnership's financial statements are presented in accordance
with generally accepted accounting principles, which require the use
of certain estimates made by the Partnership's management.
Transactions are accounted for on the trade date. Gains or losses
are realized when contracts are liquidated. Unrealized gains or
losses on open contracts (the difference between contract purchase
price and market price) are reported in the statement of financial
condition as a net gain or loss, as there exists a right of offset of
unrealized gains or losses in accordance with Financial Accounting
Standards Board Interpretation No. 39 - "Offsetting of Amounts
Related to Certain Contracts." Any change in net unrealized gain or
loss from the preceding period is reported in the statement of
operations.
For purposes of both financial reporting and calculation of
redemption value, Net Asset Value per Unit is calculated by dividing
Net Asset Value by the number of outstanding Units.
D. Cash and Cash Equivalents
Cash and cash equivalents includes cash and short-term investments in
fixed income securities.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
-----------------------------------------------------------
E. Brokerage Commissions
Brokerage commissions include other trading fees and are charged to
expense when contracts are opened.
F. Income Taxes
The Partnership prepares calendar year U.S. and state information tax
returns and reports to the partners their allocable shares of the
Partnership's income, expenses and trading gains or losses.
G. Foreign Currency Transactions
The Partnership's functional currency is the U.S. dollar; however, it
transacts business in currencies other than the U.S. dollar. Assets
and liabilities denominated in currencies other than the U.S. dollar
are translated into U.S. dollars at the rates in effect at the date
of the statement of financial condition. Income and expense items
denominated in currencies other than the U.S. dollar are translated
into U.S. dollars at the rates in effect during the period. Gains
and losses resulting from the translation to U.S. dollars are
reported in income currently.
H. Interim Financial Statements
In the opinion of management, the unaudited interim financial
statements reflect all adjustments, which were of a normal and
recurring nature, necessary for a fair presentation of financial
position as of September 30, 1999, and the results of operations
for the nine and three months ended September 30, 1999 and 1998.
Note 2. GENERAL PARTNERS
----------------
The General Partners of the Partnership are ATA Research, Inc. and
ProFutures, Inc., who conduct and manage the business of the
Partnership. The Agreement of Limited Partnership requires the
General Partners to contribute to the Partnership an amount in the
aggregate equal to at least the greater of (i) 3% of the aggregate
initial capital contributions of all partners or $100,000, whichever
is less, or (ii) 1% of the aggregate initial capital contributions of
all partners. As of September 30, 1999, approximately $737,000 has
been contributed to the Partnership by the General Partners and their
principals.
The Agreement of Limited Partnership also requires that the General
Partners maintain in the aggregate a net worth at least equal to
(i) the lesser of $250,000 or 15% of the aggregate initial capital
contributions of any limited partnerships for which they act as
general partners and which are capitalized at less than $2,500,000;
and (ii) 10% of the aggregate initial capital contributions of any
limited partnerships for which they act as general partners and which
are capitalized at greater than $2,500,000.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 2. GENERAL PARTNERS (CONTINUED)
----------------------------
ProFutures, Inc. has callable subscription agreements with
Internationale Nederlanden (U.S.) Securities, Futures & Options, Inc.
(ING), the Partnership's primary broker, whereby ING has subscribed
to purchase (up to $14,000,017) the number of shares of common stock
of ProFutures, Inc. necessary to maintain the General Partners' net
worth requirements.
A monthly management fee is paid by the Partnership to each General
Partner. ATA Research, Inc. receives 1/12 of 1% of month-end Net
Asset Value (approximately 1% annually) and ProFutures, Inc. receives
1/4 of 1% of month-end Net Asset Value (approximately 3% annually).
Total management fees earned by ATA Research, Inc. for the nine months
ended September 30, 1999 and 1998 were $609,924 and $627,673,
respectively, and for the three months ended September 30, 1999 and
1998 were $192,230 and $204,084, respectively. Total management fees
earned by ProFutures, Inc. for the nine months ended September 30,
1999 and 1998 were $1,829,771 and $1,883,019, respectively, and for
the three months ended September 30, 1999 and 1998 were $576,691 and
$612,252, respectively.
Note 3. COMMODITY TRADING ADVISORS
--------------------------
The Partnership has trading advisory contracts with several unrelated
commodity trading advisors to furnish management investment services
to the Partnership. Certain advisors receive management fees ranging
from 1% to 2% annually of Allocated Net Asset Value (as defined in
the trading advisory contracts). In addition, the trading advisors
receive quarterly incentive fees ranging from 20% to 27.5% of Trading
Profits (as defined).
Note 4. DEPOSITS WITH BROKERS
---------------------
The Partnership deposits funds with brokers subject to Commodity
Futures Trading Commission regulations and various exchange and
broker requirements. Margin requirements are satisfied by the
deposit of cash with such brokers. The Partnership earns interest
income on its assets deposited with the brokers.
Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
--------------------------------------------
Investments in the Partnership were made by subscription agreement,
subject to acceptance by the General Partners. The Partnership's
most recent offering of Units of Limited Partnership Interest
terminated on April 30, 1995.
The Partnership is not required to make distributions, but may do so
at the sole discretion of the General Partners. A Limited Partner
may request and receive redemption of units owned, subject to
restrictions in the Agreement of Limited Partnership.
Note 6. TRADING ACTIVITIES AND RELATED RISKS
------------------------------------
The Partnership engages in the speculative trading of U.S. and
foreign futures contracts and options on U.S. and foreign futures
contracts (collectively, "derivatives"). These derivatives include
both financial and non-financial contracts held as part of a
diversified trading strategy. The Partnership is exposed to both
market risk, the risk arising from changes in the market value of
the contracts, and credit risk, the risk of failure by another party
to perform according to the terms of a contract.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 6. TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)
------------------------------------------------
Purchase and sale of futures and options on futures contracts
requires margin deposits with the brokers. Additional deposits may
be necessary for any loss on contract value. The Commodity Exchange
Act requires a broker to segregate all customer transactions and
assets from such broker's proprietary activities. A customer's cash
and other property (for example, U.S. Treasury bills) deposited with
a broker are considered commingled with all other customer funds
subject to the broker's segregation requirements. In the event of a
broker's insolvency, recovery may be limited to a pro rata share of
segregated funds available. It is possible that the recovered amount
could be less than total cash and other property deposited.
The Partnership has a substantial portion of its assets on deposit
with financial institutions in connection with its cash management
activities. In the event of a financial institution's insolvency,
recovery of Partnership assets on deposit may be limited to account
insurance or other protection afforded such deposits. In the normal
course of business, the Partnership does not require collateral from
such financial institutions.
For derivatives, risks arise from changes in the market value of the
contracts. Theoretically, the Partnership is exposed to a market
risk equal to the value of futures contracts purchased and unlimited
liability on such contracts sold short. As both a buyer and seller
of options, the Partnership pays or receives a premium at the outset
and then bears the risk of unfavorable changes in the price of the
contract underlying the option. Written options expose the
Partnership to potentially unlimited liability, and purchased options
expose the Partnership to a risk of loss limited to the premiums paid.
The fair value of derivatives represents unrealized gains and losses
on open futures contracts and long and short options at market value.
The average fair values of derivatives for the nine months ended
September 30, 1999 and 1998 are approximately $3,170,000 and
$2,380,000, respectively, and the related fair values as of
September 30, 1999 and December 31, 1998 are approximately $6,800,000
and $(21,000), respectively.
Net trading results from derivatives for the nine and three months
ended September 30, 1999 and 1998 are reflected in the statement of
operations and equal gain (loss) from trading less brokerage
commissions. Such trading results reflect the net gain (loss)
arising from the Partnership's speculative trading of derivatives.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 6. TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)
------------------------------------------------
Open contracts generally mature within one year, however, the
Partnership intends to close all contracts prior to maturity. At
September 30, 1999 and December 31, 1998, the notional amount of
open contracts is as follows:
September 30, December 31,
1999 1998
-------------------------- --------------------------
Contracts to Contracts to Contracts to Contracts to
Purchase Sell Purchase Sell
------------ ------------ ------------ ------------
Derivatives (excluding
purchased options):
Futures contracts
and written options
thereon:
- Agriculture $ 3,300,000 $ 5,300,000 $ 19,300,000 $ 25,900,000
- Currency and
currency
indices 159,000,000 34,400,000 34,350,000 133,100,000
- Energy 18,400,000 1,900,000 1,100,000 2,900,000
- Equity indices 25,200,000 197,800,000 75,700,000 99,700,000
- Interest rates 72,200,000 71,200,000 279,700,000 61,300,000
- Metals 55,100,000 16,000,000 5,750,000 14,000,000
- Other 0 50,000 50,000 0
Purchased options on
futures contracts:
- Agriculture 0 0 2,700,000 0
- Currency and
currency
indices 7,100,000 0 0 0
- Energy 0 0 550,000 0
- Metals 6,200,000 14,200,000 0 0
------------ ------------ ------------ ------------
$346,500,000 $340,850,000 $419,200,000 $336,900,000
============ ============ ============ ============
The above amounts do not represent the Partnership's risk of loss due
to market and credit risk, but rather represent the Partnership's
extent of involvement in derivatives at the date of the statement of
financial condition.
The General Partners have established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that they will, in fact, succeed in doing so. The General
Partners' basic market risk control procedures consist of
continuously monitoring the trading activity of the various trading
advisors, with the actual market risk controls being applied by the
advisors themselves. The General Partners seek to minimize credit
risk primarily by depositing and maintaining the Partnership's assets
at financial institutions and brokers which the General Partners
believe to be creditworthy. The Limited Partners bear the risk of
loss only to the extent of the market value of their respective
investments and, in certain specific circumstances, distributions and
redemptions received.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
A. LIQUIDITY: Substantially all of the Partnership's assets are highly
liquid, such as cash or cash equivalents, open futures and option
contracts and other financial instruments. It is possible that
extreme market conditions or daily price fluctuation limits at
certain exchanges could adversely affect the liquidity of open
futures and option contracts.
B. CAPITAL RESOURCES: Since the Partnership's business is the purchase
and sale of various commodity interests, it will make few, if any,
capital expenditures.
As of September 30, 1999, 29,674.7742 Units are outstanding, including
427.5619 General Partner Units, with an aggregate Net Asset Value of
$76,145,437 ($2,566.00 per Unit). This represents a decrease in
Net Asset Value of $9,411,062 compared with December 31, 1998. The
decrease primarily relates to redemptions of limited partner units.
The Partnership's offering of Units of Limited Partnership Interest
terminated in 1995.
C. RESULTS OF OPERATIONS:
The Partnership's net income (loss) for the nine months ended
September 30, 1999 and 1998 consisted of the following:
1999 1998
---- ----
Three months ended March 31 $ 452,250 $ (529,659)
Three months ended June 30 2,119,865 (5,882,056)
Three months ended September 30 (2,380,068) 11,825,072
----------- -----------
Nine months ended September 30 $ 192,047 $ 5,413,357
=========== ===========
The Partnership's trading losses for the three months ended
September 30, 1999 resulted from losses in the agricultural,
equity indices, foreign currency and interest rate markets and
were reduced by gains in the energy and metals markets.
For the nine months ended September 30, 1999, the net trading
gains resulted primarily from gains in the energy, interest rate
and metals markets and were reduced by losses in the agricultural
and foreign currency markets.
The Partnership's trading gain for the three months ended
September 30, 1998 resulted primarily from gains in the interest
rate markets.
For the nine months ended September 30, 1998, the Partnership had
net trading gains primarily from income in the interest rate
markets which were reduced by losses in the agricultural, equity
indices and metals markets.
The means by which the General Partners and the Advisors attempt to
manage the risk of the Partnership's open positions is essentially
the same in all market categories traded. The General Partners
attempt to manage market exposure by (i) diversifying the
Partnership's assets among different Advisors whose strategies focus
on different market sectors and trading approaches, and (ii)
monitoring the Partnership's actual market exposures on a daily
basis and reallocating assets away from Advisors, as necessary, if
an over-concentration develops and persists in any one market sector
or market sensitive commodity interest. Each Advisor applies its
own risk management policies to its trading. These Advisor policies
generally limit the total exposure that may be taken per "risk unit"
of assets under management. In addition, many Advisors follow
diversification guidelines (often formulated in terms of the maximum
margin which they will commit to positions in any one contract or
group of related contracts), as well as imposing "stop-loss" points
at which open positions must be closed out. Certain Advisors treat
their risk control policies as strict rules; others only as general
guidelines for controlling risk.
Due to the speculative nature of trading commodity interests,
the Partnership's income or loss from operations may vary widely
from period to period. Management cannot predict whether the
Partnership's future Net Asset Value per Unit will increase or
experience a decline. Inflation is not a significant factor in the
Partnership's operations, except to the extent that inflation may
affect future prices.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
D. POSSIBLE CHANGES: The General Partners reserve the right to
terminate certain and/or engage additional trading advisors or change
any of the Partnership's clearing arrangements.
E. The Year 2000 Problem:
Many existing computer systems use only two digits to refer to a
year. This technique can cause the systems to treat the year 2000 as
1900, an effect commonly known as the "Year 2000 Problem." The
Partnership, like other financial and business organizations, depends
on the smooth functioning of computer systems and could be adversely
affected if the computer systems on which it relies do not properly
process and calculate date-related information concerning dates on or
after January 1, 2000.
The General Partners administer the business of the Partnership
through various systems and processes maintained by the General
Partners. The General Partners' modifications for Year 2000
compliance are proceeding according to plan and were substantially
completed by September 1999. Additional testing is scheduled to take
place during the remainder of 1999. Costs of this testing were
included in previously approved budgets of the General Partners and
future Year 2000 expenses are expected to be negligible. These
expenditures are not expected to have a material adverse impact on
the General Partners' financial position, results of operations or
cash flows in future periods. The General Partners have and will
continue to devote the necessary resources to address any remaining
Year 2000 issues in a timely manner. The Partnership itself has no
systems or information technology applications relevant to its
operations and, thus, has no expenses related to addressing the Year
2000 Problem.
In addition to the General Partners, the Partnership is dependent on
the capability of the Advisors, the various commodity exchanges, the
brokers, and other third parties with whom the Partnership has
material relationships to prepare adequately for the Year 2000
Problem and its impact on their systems and processes. The General
Partners will monitor the Partnership's direct service providers, and
may, where deemed appropriate, seek assurances from such service
providers that they are taking all necessary steps to ensure that
their computer systems will accurately reflect the Year 2000. No
assurance can be given that the service providers have anticipated
every step necessary to avoid any adverse effect attributable to the
Year 2000 Problem, and there can be no assurance that the General
Partners have anticipated every step necessary to avoid any adverse
effect on the Partnership attributable to the Year 2000 issue. The
failure of the Partnership's futures exchanges, clearing
organizations, venders or regulators to resolve their own processing
issues in a timely manner could result in a material financial risk.
The Advisors have taken action to identify any of their computer
systems that are Year 2000 vulnerable and have not reported any
problems to the General Partners. Advisors are expected to notify
the General Partners in a timely manner if they discover a Year 2000
vulnerable system and are unable to correct it by January 1, 2000.
Certain exchanges have successfully completed four industry-wide
tests in conjunction with the Futures Industry Association. These
tests revealed no problems related to the Year 2000 Problem for those
exchanges. The brokers are addressing their Year 2000 issues and have
participated in Year 2000 testing with various exchanges. The brokers
participated in the Futures Industry Association Y2K industry-wide
test for Year 2000 compliance during the first and second quarters of
1999. The General Partners are monitoring the progress of the brokers
and the exchanges in addressing their Year 2000 issues.
The most likely and most significant risk to the Partnership
associated with the lack of Year 2000 readiness is the failure of
third parties, including the Advisors, the brokers, the exchanges and
various regulators to resolve their Year 2000 issues in a timely
manner. This risk could involve the temporary inability to transfer
funds electronically or to determine the Net Asset Value of the
Partnership, in which case sales could be suspended and/or redemption
payments delayed until the Partnership's assets could be valued
and/or funds could be transferred. If the General Partners believe,
prior to December 31, 1999, that any of the Advisors, the brokers or
the exchanges have failed to resolve a Year 2000 issue likely to have
a material adverse impact on the Partnership, the General Partners
could direct the Advisors to attempt to close any Partnership
positions and to remain out of the market until such issue is
resolved.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There has been no material change during the nine and three months
ended September 30, 1999, in the sources of the Partnership's
exposure to market risk. The Partnership's market risk is influenced
by a wide variety of factors, including commodity price levels, the
level and volatility of interest rates, foreign currency exchange
rates, equity price levels, the market value of financial
instruments and contracts, the diversification effects among the
Partnership's open positions and the liquidity of the markets in
which it trades.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
There were no reports filed on Form 8-K.
Exhibits filed herewith:
None.
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.
ATA RESEARCH/PROFUTURES DIVERSIFIED FUND, L.P.
(Registrant)
/s/ Aladin T. Abughazaleh
Aladin T. Abughazaleh, President
ATA Research Inc., General Partner
ATA Research/ProFutures Diversified Fund, L.P.
/s/ Gary D. Halbert
Gary D. Halbert, President
ProFutures, Inc., General Partner
ATA Research/ProFutures Diversified Fund, L.P.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 70,955,135
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 77,771,376
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 77,771,376
<CURRENT-LIABILITIES> 1,625,939
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 76,145,437
<TOTAL-LIABILITY-AND-EQUITY> 77,771,376
<SALES> 0
<TOTAL-REVENUES> 6,718,664
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,526,617
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 192,047
<INCOME-TAX> 0
<INCOME-CONTINUING> 192,047
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 192,047
<EPS-BASIC> 6.07
<EPS-DILUTED> 6.07
</TABLE>
