UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly period ended March 31, 1998
Commission File Number: 2-73692
The Balanced Opportunity Fund L.P.
(Exact name of registrant as specified in its charter)
Illinois 36-3655854
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
Registrant's telephone number, including area code:(312) 984-5900
Indicate by check mark whether the registrant (1) 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>
The Balanced Opportunity Fund L.P.
Index
Page
Part I - Financial Information
Item 1. Financial Statements
Statements of Financial Condition (unaudited)
as of March 31, 1998 and March 31, 1997 3
Statements of Operations (unaudited) for the three
month and nine month periods ended March 31, 1998
and 1997 4
Statements of Changes in Partners' Capital (unaudited)
for the nine month period ended March 31, 1998 and the
year ended December 31, 1997 5
Note to Unaudited Financial Statements -
March 31, 1998 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II - Other Information 8
Item 3. Exhibits and Reports on Form 8-K 8
Signatures 9<PAGE>
Part I. Financial Information
Item 1. Financial Statements
The Balanced Opportunity Fund
Statement of Financial Condition
March 31,
1998 June 30
Assets (Unaudited) 1997
Equity in futures and forward trading accounts:
Cash $ 762,308 $ 714,000
Net unrealized gain/(loss) on open contracts 100,272 103,000
-------- --------
Total equity in futures and forward trading account 862,580 817,000
Guaranteed yield pool, at market 2,590,656 2,783,000
Other receivable 2,489 5,000
-------- --------
Total Assets $3,455,724 $3,605,000
Liabilities and Partners' Capital
Liabilities:
Accrued administrative expenses $ 31,865 $ 20,000
Accrued brokerage commission and fees 23,289 24,000
Accrued management fees 5,634 -
Accrued incentive fees - -
Redemption Payable - -
Miscellaneous payables 2,985 -
-------- --------
63,773 44,000
Partners' Capital
Limited Partners (units outstanding 1,374.8557;
1,967.8520) 3,178,772 3,371,000
General Partner (units outstanding : 111.1143) 213,179 190,000
-------- --------
3,391,951 3,561,000
-------- --------
Total Liabilities and Partners' Capital $3,455,724 $3,605,000
======== ========
Net Asset Value per Unit $ 1,918.56 $ 1,712.76
See Note to the unaudited financial statements <PAGE>
The Balanced Opportunity Fund L.P.
Statement of Operations
(unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
Revenues 1998 1997 1998 1997
Trading profit/(loss):
Realized $70,941 $182,000 $340,226 $359,000
Change in unrealized 88,538 (50,000) (2,701) (20,000)
Foreign currency gain/(loss) (178) (4,000) (2,811) (3,000)
-------- -------- -------- --------
Total trading profit and
foreign currency gain/(loss) 159,301 128,000 334,714 336,000
Guaranteed yield pool:
Accrued Interest 45,155 102,000 146,702 498,000
Unrealized market value gain (loss) 4,186 (69,000) 90,547 (322,000)
-------- -------- -------- --------
Total guaranteed yield pool revenue49,341 33,000 37,249 176,000
Interest Income 9,038 21,000 26,726 29,000
-------- -------- -------- --------
Total Assets 217,680 182,000 598,689 541,000
Expenses
Brokerage commissions $ 34,125 $ 51,000 $105,623 $170,000
Management fees 8,373 12,000 25,801 40,000
Other administrative expenses 19,500 7,000 75,557 37,000
State taxes - - 1,305 -
-------- -------- -------- --------
61,998 70,000 208,286 247,000
-------- -------- -------- --------
Net Income/(Loss) $ 155,682 $ 112,000 $ 390,403 $294,000
======== ======== ======== ========
Net Income/(Loss) Allocated To:
Limited Partners $ 145,898 $ 109,000 $ 367,536 $285,000
======== ======== ======== ========
General Partners $ 9,784 $ 3,000 $ 22,867 $ 9,000
======== ======== ======== ========
Net Income/(Loss) per unit
outstanding for entire period $ 88.06 $ 26.99 $ 205.80 $ 79.46
========= ======== ======== ========
See Note to the unaudited financial statements<PAGE>
The Balanced Opportunity Fund L.P.
Statement of Changes in Partners' Capital
Total Units
of Partnership Limited General
Interest Partners Partners Total
Partners Capital June 30, 1996 3,504 $5,305,000 $ 174,000 $5,479,000
Redemption (1,425) (2,356,000) (2,356,000)
Net Income (loss) 422,000 16,000 438,000
------- --------- --------- ---------
Partners Capital December 31,1997 2,079 $3,371,000 $ 190,000 $3,561,000
Redemption (311) (559,223) (559,223)
Net Income (loss) 367,536 22,867 390,403
------- --------- --------- ---------
Partners Capital March 31,1998 1,768 $3,179,313 $ 212,867 $3,392,180
======= ========= ========= ========= <PAGE>
The Balanced Opportunity Fund L.P.
Note to Unaudited Financial Statements March 31, 1998
Note - Basis of Presentation
The unaudited financial statements of The Balanced Opportunity Fund L.P.
(the "Partnership) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the financial condition and results of operations of the
Partnership for the periods presented have been included. For further
information, refer to the financial statements and footnotes thereto included
in the Partnership's annual report on Form 10-K for the year ended June 30,
1997.<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Capital Resources
The purpose of the Partnership is to trade commodity interests; as such,
the Partnership does not have, nor does it expect to make, any capital
expenditures or have any capital assets that are not operating capital or
assets. The Partnership's use of assets is solely to provide necessary margin
or premiums for, and to pay any losses incurred in connection with, its trading
activity. The Net Asset Values are calculated and equity reports are reviewed
by the General Partner on a daily basis to monitor the trading advisors'
activity to maximize the market and credit risks of the Fund. The General
Partner also monitors the trading advisors' compliance with investment
objectives as set forth in the prospectus. Redemption of additional units in
the future will impact the amount of funds available for trading commodity
interest. The amount of funds available was reduced by $139,118 from
redemptions of units during the quarter ended March 31, 1998 and by $559,223
for the nine months ended March 31, 1998.
Liquidity
Most United States commodity exchanges limit fluctuations in commodity
futures contract prices during a single day by regulations referred to as
"daily price fluctuation limits" or "daily limits". During a single trading
day, no trades may be executed at a price beyond the daily limit. Once the
price of a futures contract has reached the daily limit for that day, positions
in that contract can neither be taken nor liquidated. Commodity futures prices
have occasionally reached the daily limit for several consecutive days with
little or no trading. Similar occurrences could prevent the Partnership from
promptly liquidation unfavorable positions and subject the Partnership to
substantial losses which could exceed the margin initially committed to such
trades. In addition, even if commodity futures prices have not reached the
daily limit, the Partnership may not be able to execute futures trades at
favorable prices if little trading in such contracts is taking place. Other
than these limitations on liquidity, which are inherent in the Partnership's
trading of commodity interests, the Partnership's assets are highly liquid and
are expected to remain so. The counterparty for all exchange traded and
over-the counter contracts was Rand Financial Services. A portion of the
Fund's assets have been invested in certain United States treasury obligations.
This investment is designed to provide ultimate repayment of the investors'
initial contributions. These securities are not used for trading purposes.
Results of Operations
Given the volatility of the markets in which the Partnership trades, its
quarterly results can fluctuate significantly and are not indicative of the
expected results for the fiscal year. In the three month and nine month
periods ending March 31, 1998, the Fund experienced trading profits of
$155,682 and $390,403 respectively compared to $112,000 and $294,000 for the
same periods in 1997. In the three month and nine month periods ending March
31, 1998, the total guaranteed yield pool revenue was $49,341 and $237,249
respectively compared to $33,000 and $176,000 for the same periods in 1997.
At March 31, 1998 there was no material credit risk exposure exceeding
10% of total assets for either exchange traded or over-the-counter contracts.<PAGE>
Brokerage commissions and advisory fees, which are based on the net assets
of the Fund, declined as a direct result of redemptions.
Part II - Other Information
Item 3. Exhibits and Reports on Form 8-K
No reports were filed on Form 8-K during the nine months ended March 31,
1998.
<PAGE>
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 and to the extent possible due to the acquisition of the
registrant by the undersigned on April 24, 1998; the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
The Balanced Opportunity Fund L.P. (Registrant)
By: Rodman & Renshaw Futures Management, Inc., General Partner
By: /s/ J. Robert Collins
------------------------
J. Robert Collins, President
Date: August 10, 1998<PAGE>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 862,580
<SECURITIES> 2,590,656
<RECEIVABLES> 2,489
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,455,724
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,455,724
<CURRENT-LIABILITIES> 63,773
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,455,724
<SALES> 0
<TOTAL-REVENUES> 598,689
<CGS> 0
<TOTAL-COSTS> 208,286
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 390,403
<INCOME-TAX> 0
<INCOME-CONTINUING> 390,403
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 390,403
<EPS-PRIMARY> 205.80
<EPS-DILUTED> 0
</TABLE>
