UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the period ended March 31, 1998 or
[ ] Transition report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File No. 33-21532
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3469595
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
c/o Demeter Management Corporation
Two World Trade Center, 62 Fl. New York, NY 10048
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code (212) 392-5454
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(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
<PAGE>
<TABLE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
March 31, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition March 31, 1998
(Unaudited) and December 31, 1997......................
2
Statements of Operations for the Quarters Ended
March 31, 1998 and 1997 (Unaudited)....................3
Statements of Changes in Partners' Capital for
the Quarters Ended March 31, 1998 and 1997
(Unaudited)............................................4
Statements of Cash Flows for the Quarters Ended
March 31, 1998 and 1997 (Unaudited)....................5
Notes to Financial Statements (Unaudited)...........6-10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations......................................11-14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................15-16
Item 6. Exhibits and Reports on Form 8-K...................17
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
March 31, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 10,239,056 9,294,823
Net unrealized gain (loss) on open contracts (136,363)
1,697,865
Total Trading Equity 10,102,693 10,992,688
Interest receivable (DWR) 35,595 34,348
Due from DWR 18,464 8,258
Total Assets 10,156,752 11,035,294
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 125,779 206,863
Accrued management fee (DWFCM) 25,392 27,588
Total Liabilities 151,171 234,451
Partners' Capital
Limited Partners (8,921.645 and
9,154.865 Units, respectively) 9,673,784 10,451,503
General Partner (306 Units) 331,797 349,340
Total Partners' Capital 10,005,581 10,800,843
Total Liabilities and Partners' Capital 10,156,752 11,
035,294
NET ASSET VALUE PER UNIT 1,084.30 1,141.63
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 1,430,693 865,768
Net change in unrealized (1,834,228) 168,721
Total Trading Results (403,535) 1,034,489
Interest Income (DWR) 102,396 123,450
Total Revenues (301,139) 1,157,939
EXPENSES
Brokerage commissions (DWR) 146,083 200,142
Management fee (DWFCM) 78,183 96,008
Transaction fees and costs 13,485 17,775
Total Expenses 237,751 313,925
NET INCOME (LOSS) (538,890) 844,014
NET INCOME (LOSS) ALLOCATION
Limited Partners (521,347) 822,465
General Partner (17,543) 21,549
NET INCOME (LOSS) PER UNIT
Limited Partners (57.33) 70.42
General Partner (57.33) 70.42
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Quarters Ended March 31, 1998 and 1997
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C>
<C>
Partners' Capital,
December 31, 1996 11,845.388 $11,628,908 $308,374
$11,937,282
Net Income - 822,465 21,549 844,014
Redemptions (547.550) (600,209) -
(600,209)
Partners' Capital,
March 31, 1997 11,297.838 $11,851,164 $329,923 $12,
181,087
Partners' Capital,
December 31, 1997 9,460.865 $10,451,503 $349,340 $10,800
,843
Net Loss - (521,347) (17,543) (538,890)
Redemptions (233.220) (256,372)
- - (256,372)
Partners' Capital,
March 31, 1998 9,227.645 $9,673,784$331,797 $10,005
,581
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Quarters Ended March 31,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) (538,890) 844,014
Noncash item included in net income (loss):
Net change in unrealized 1,834,228 (168,721)
Increase in operating assets:
Interest receivable (DWR) (1,247) (3,207)
Due from DWR (10,206) (22,950)
Increase (decrease) in operating liabilities:
Accrued management fee (DWFCM) (2,196) 16,018
Accrued brokerage commissions (DWR)- 2,080
Accrued transaction fees and costs -
97
Net cash provided by operating activities 1,281,689 667,331
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in redemptions payable (81,084) (42,968)
Redemptions of units (256,372) (600,209)
Net cash used for financing activities (337,456)(643,177)
Net increase in cash 944,233 24,154
Balance at beginning of period 9,294,823 11,906,105
Balance at end of period 10,239,056 11,930,259
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition of Dean Witter Multi-Market
Portfolio L.P. (the "Partnership"). The financial statements and
condensed notes herein should be read in conjunction with the
Partnership's December 31, 1997 Annual Report on Form 10-K.
1. Organization
Dean Witter Multi-Market Portfolio L.P., (formerly Dean Witter
Principal Guaranteed Fund L.P.), is a limited partnership
organized to engage in the speculative trading of commodity
futures contracts and forward contracts on foreign currencies.
The general partner for the Partnership is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
Dean Witter Reynolds Inc. ("DWR"), with an unaffiliated broker,
Carr Futures, Inc. ("Carr"), providing clearing and execution
services. Dean Witter Futures & Currency Management ("DWFCM"), an
affiliate of Demeter, is the sole trading advisor. Demeter, DWR
and DWFCM are all wholly-owned subsidiaries of Morgan Stanley
Dean Witter & Co. ("MSDW").
2. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in
commodity trading accounts to meet margin requirements as needed.
DWR pays interest on these funds based on current 13-week U.S.
<PAGE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Treasury Bill rates. Brokerage expenses incurred by the
Partnership are paid to DWR. Management fees and incentive fees
(if any) are paid to DWFCM.
3. Financial Instruments
The Partnership trades futures and forward contracts in interest
rates, stock indices, commodities and currencies. Futures and
forwards represents contracts for delayed delivery of an
instrument at a specified date and price. Risk arises from
changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the
contracts. There are numerous factors which may significantly
influence the market value of these contracts, including interest
rate volatility. At March 31, 1998 and December 31, 1997, open
contracts were:
Contract or Notional Amount
March 31, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 1,388,000 3,178,000
Commitments to Sell 9,656,000 -
Commodity Futures:
Commitments to Purchase 706,000 419,000
Commitments to Sell 2,937,000 6,476,000
Foreign Futures:
Commitments to Purchase 13,033,000 20,855,000
Commitments to Sell 10,126,000 4,651,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 36,351,000 21,650,000
Commitments to Sell 42,870,000 41,462,000
<PAGE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward commit-
ments to purchase and to sell the same currency on the same date
in the future. These commitments are economically offsetting, but
are not offset in the forward market until the settlement date.
The net unrealized gain (loss) on open contracts is reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $(136,363) and
$1,697,865 at March 31, 1998 and December 31, 1997, respectively.
Of the $(136,363) net unrealized loss on open contracts at March
31, 1998, $224,338 was related to exchange-traded futures
contracts and $(360,701) related to off-exchange-traded forward
currency contracts.
Of the $1,697,865 net unrealized gain on open contracts at
December 31, 1997, $704,925 related to exchange-traded futures
contracts and $992,940 related to off-exchange-traded forward
currency contracts.
Exchange-traded futures contracts held by the Partnership at
March 31, 1998 and December 31, 1997 mature through December 1998
and June 1998, respectively. Off-exchange-traded forward
currency contracts held at March 31, 1998 and December 31, 1997
mature through July 1998 and April 1998, respectively.
<PAGE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The contract amounts in the above table represent the
Partnership's extent of involvement in the particular class of
financial instrument, but not the credit risk associated with
counterparty nonperformance. The credit risk associated with
these instruments is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.
The Partnership also has credit risk because either DWR or Carr
acts as the futures commission merchant or the counterparty, with
respect to most of the Partnership's assets. Exchange-traded
futures contracts are marked to market on a daily basis, with
variations in value settled on a daily basis. DWR and Carr, as
the futures commission merchants for all of the Partnership's
exchange-traded futures contracts, are required pursuant to
regulations of the Commodity Futures Trading Commission ("CFTC")
to segregate from their own assets and for the sole benefit of
their commodity customers, all funds held by them with respect to
exchange-traded futures contracts including an amount equal to
the net unrealized gain (loss) on all open futures contracts,
which funds totaled $10,463,394 and $9,999,748 at March 31, 1998
and December 31, 1997, respectively. With respect to the Partner-
ship's off-exchange-traded forward currency contracts, there are
no daily settlements of variations in value nor is there any
requirement that an amount equal to the net unrealized gain
<PAGE>
DEAN WITTER MULTI-MARKET PORTFOLIO L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
(loss) on open forward contracts be segregated. With respect to
those off-exchange-traded forward currency contracts, the
Partnership is at risk to the ability of Carr, the sole
counterparty on all of such contracts, to perform. Carr's
parent, Credit Agricole Indosuez, has guaranteed Carr's
obligations to the Partnership.
For the quarter ended March 31, 1998 and the year ended December
31, 1997, the average fair value of financial instruments held
for trading purposes was as follows:
March 31, 1998
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 4,896,000 2,414,000
Commodity Futures 281,000 4,307,000
Foreign Futures 18,881,000 6,574,000
Off-Exchange-Traded Forward
Currency Contracts 32,337,000 43,195,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 3,083,000 10,659,000
Commodity Futures 4,259,000 4,933,000
Foreign Futures 13,116,000 7,910,000
Off-Exchange-Traded Forward
Currency Contracts 24,679,000 32,813,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership's assets are on deposit in separate
commodity interest trading accounts with DWR and Carr, the
commodity brokers, and are used by the Partnership as margin to
engage in commodity futures, forward contracts and other
commodity interest trading. DWR and Carr hold such assets in
either designated depositories or in securities approved by the
CFTC for investment of customer funds. The Partnership's assets
held by DWR and Carr may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is to
trade in commodity futures contracts and other commodity
interests, it is expected that the Partnership will continue to
own such liquid assets for margin purposes.
The Partnership's investment in commodity futures contracts,
forward contracts and other commodity interests may be illiquid.
If the price for a futures contract for a particular commodity
has increased or decreased by an amount equal to the "daily
limit", positions in the commodity can neither be taken nor
liquidated unless traders are willing to effect trades at or
within the limit. Commodity futures prices have occasionally
moved the daily limit for several consecutive days with little or
no trading. Such market conditions could prevent the Partnership
from promptly liquidating its commodity futures positions.
<PAGE>
There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
Capital Resources. The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions of additional
Units of Limited Partnership Interest in the future will affect
the amount of funds available for investments in subsequent
periods. As redemptions are at the discretion of Limited
Partners, it is not possible to estimate the amount and
therefore, the impact of future redemptions.
Results of Operations
For the Quarter Ended March 31, 1998
For the quarter ended March 31, 1998, the Partnership's total
trading losses net of interest income were $301,139. During the
first quarter, the Partnership posted a loss in Net Asset Value
per Unit. The most significant losses were recorded in currency
markets due primarily to short-term volatility caused by the
economic instability in the Far East. During January, the upward
trend in the value of the U.S. dollar reversed lower in response
to the Japanese government's proposed economic stimulus package.
This reversal resulted in losses for previously established short
<PAGE>
Japanese yen positions. Additional currency losses were recorded
in February as the value of the yen moved without consistent
direction. Smaller losses were recorded from transactions
involving the German mark, Australian dollar and British pound.
A small portion of these losses was offset by gains in March from
transactions involving the German mark, Swiss franc and Japanese
yen. In metals, losses were recorded from long silver futures
positions as silver prices reversed lower in February after
rallying higher during January. Smaller losses were recorded
from trading base metals futures during March. Additionally,
trendless movement in soybean futures prices during January and
March resulted in losses for the Partnership. A portion of the
Partnership's overall losses for the quarter was offset by gains
in financial futures trading. The most significant of these
gains were recorded from long European bond futures positions, as
well as from long S&P 500 Index futures positions, as prices in
these markets trended higher throughout a majority of the
quarter. In the soft commodities and energy markets, gains were
recorded from short sugar and crude oil futures positions as
prices trended lower during January and February before reversing
higher during March. Total expenses for the quarter were
$237,751, resulting in a net loss of $538,890. The value of an
individual Unit in the Partnership decreased from $1,141.63 at
December 31, 1997 to $1,084.30 at March 31, 1998.
For the Quarter Ended March 31, 1997
For the quarter ended March 31, 1997, the Partnership's total
trading revenues including interest income were $1,157,939.
<PAGE>
During the first quarter, the Partnership posted an increase in
Net Asset Value per Unit. The most significant trading gains
were recorded in the currency markets as a result of a
strengthening in the value of the U.S. dollar versus the Japanese
yen and most major European currencies during January and
February. A portion of these gains was offset by losses from
transactions involving the British pound, as well as the Canadian
and Australian dollars, during February and March. Gains were
also recorded in soft commodities from long coffee futures
positions as prices in this market trended steadily higher during
January and February, before reversing lower during March.
Additional trading gains were recorded in the metals markets from
short gold futures positions as gold prices, which began trending
lower during late 1996, continued to trend lower in January.
Gains were also recorded from long base metals futures positions
as copper and zinc futures prices increased from late January to
early March. Smaller gains were recorded in the agricultural
markets from long corn, soybean meal and soybean futures
positions. A portion of the Partner-ship's overall gains was
offset by short-term volatile price movement in global interest
rate futures. Smaller losses were recorded in the energy markets
during January and March. Total expenses for the period were
$313,925, generating net income of $844,014. The value of an
individual Unit in the Partnership increased from $1,007.76 at
December 31, 1996 to $1,078.18 at March 31, 1997.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On September 6, 10, and 20, 1996, and on March 13, 1997, similar
purported class actions were filed in the Superior Court of the
State of California, County of Los Angeles, on behalf of all
purchasers of interests in limited partnership commodity pools
sold by DWR. Named defendants include DWR, Demeter, DWFCM, MSDW
(all such parties referred to hereafter as the "Dean Witter
Parties"), certain other limited partnership commodity pools of
which Demeter is the general partner, and certain trading
advisors to those pools. On June 16, 1997, the plaintiffs in the
above actions filed a consolidated amended complaint, alleging,
among other things, that the defendants committed fraud, deceit,
negligent misrepresentation, various violations of the California
Corporations Code, intentional and negligent breach of fiduciary
duty, fraudulent and unfair business practices, unjust
enrichment, and conversion in the sale and operation of the
various limited partnership commodity pools. Similar purported
class actions were also filed on September 18 and 20, 1996, in
the Supreme Court of the State of New York, New York County, and
on November 14, 1996 in the Superior Court of the State of
Delaware, New Castle County, against the Dean Witter Parties and
certain trading advisors on behalf of all purchasers of interests
in various limited partnership commodity pools sold by DWR. A
consolidated and amended complaint in the action pending in the
Supreme Court of the State of New York was filed on August 13,
1997, alleging that the defendants committed fraud, breach of
fiduciary duty, and negligent misrepresentation in the sale and
operation of the
<PAGE>
various limited partnership commodity pools. On December 16,
1997, upon motion of the plaintiffs, the action pending in the
Superior Court of the State of Delaware was voluntarily dismissed
without prejudice. The complaints seek unspecified amounts of
compensatory and punitive damages and other relief. It is
possible that additional similar actions may be filed and that,
in the course of these actions, other parties could be added as
defendants. The Dean Witter Parties believe that they have
strong defenses to, and they will vigorously contest, the
actions. Although the ultimate outcome of legal proceedings
cannot be predicted with certainty, it is the opinion of
management of the Dean Witter Parties that the resolution of the
actions will not have a material adverse effect on the financial
condition or the results of operations of any of the Dean Witter
Parties.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits - None.
B) Reports on Form 8-K. - None.
<PAGE>
SIGNATURE
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.
Dean Witter Multi-Market Portfolio
L.P. (Registrant)
By: Demeter Management Corporation
(General Partner)
May 11, 1998 By:/s/ Patti L. Behnke
Patti L. Behnke
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter Multi Market Portfolio L.P. and is qualified in its entirety by
reference to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 10,239,056
<SECURITIES> 0
<RECEIVABLES> 54,059<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,156,752<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,156,752<F3>
<SALES> 0
<TOTAL-REVENUES> (301,139)<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 237,751
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (538,890)
<INCOME-TAX> 0
<INCOME-CONTINUING> (538,890)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (538,890)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable from DWR of $35,595 and due from
DWR of $18,464.
<F2>In addition to cash and receivables, total assets include net unrealized
loss on open contracts of $(136,363).
<F3>Liabilities include redemptions payable of $125,779 and accrued
management fee of $25,392.
<F4>Total revenue includes realized trading revenue of $1,430,693, net
change in unrealized of $(1,834,228) and interest income of $102,396.
</FN>
</TABLE>
