<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED: 6/30/96 COMMISSION FILE NUMBER: 033-33982
TUDOR FUND FOR EMPLOYEES L.P.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3543779
- ----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 Steamboat Rd. Greenwich, CT 06830
- ----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 863-6700
- ----------------------------------------------------------------------------
(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 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.
X YES NO
--- ---
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. - Financial Statements
TUDOR FUND FOR EMPLOYEES L.P.
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
(UNAUDITED) (AUDITED)
----------- ------------
ASSETS
------
<S> <C> <C>
Cash $ 1,651,602 $ 2,986,405
Equity in commodity trading accounts:
Due from broker 1,973,827 1,349,843
U.S. Government obligations 7,798,274 4,845,289
Net unrealized gain (loss) on open commodity interests (13,774) 142,353
-------------- --------------
Total equity 9,758,327 6,337,485
-------------- --------------
Total assets $ 11,409,929 $ 9,323,890
============== ==============
LIABILITIES AND PARTNERS CAPITAL
- --------------------------------
LIABILITIES:
Pending partner additions $ --- $ 718,024
Redemptions payable 288,325 392,382
Incentive fees payable 34,331 42,095
Management fees payable 54,367 13,636
Accrued professional fees and other 55,511 44,360
Total liabilities 432,534 1,210,497
-------------- --------------
PARTNERS CAPITAL
- ----------------
Limited Partners, 10,000 units authorized and 2,640.024 and
2,190.191 outstanding at June 30, 1996 and December 31, 1995 8,827,558 6,272,162
General Partner, 642.943 units outstanding at
June 30, 1996 and December 31, 1995 2,149,837 1,841,231
-------------- --------------
Total partners capital 10,977,395 8,113,393
-------------- --------------
Total liabilities and partners capital $ 11,409,929 $ 9,323,890
============== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
TUDOR FUND FOR EMPLOYEES L.P.
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
1996 1995 1996 1995
---- ---- ---- -----
<S> <C> <C> <C> <C>
REVENUES:
Net realized trading gain (loss) $ 691,846 $(285,613) $ 1,807,925 $ 1,076,933
Unrealized trading gain (loss) (281,672) (212,496) (151,244) 60,002
Interest income 142,552 99,057 261,147 188,425
Total revenues 552,726 (399,052) 1,917,828 1,325,360
----------------------- ----------------------------------------------
EXPENSES:
Brokerage commissions and fees 29,192 54,047 69,606 117,087
Incentive fees 34,331 ---- 166,073 152,508
Management fees 54,367 38,112 102,329 77,030
Professional fees and other 24,501 18,000 49,231 36,000
Amortization expense ---- 2,500 ---- 5,000
----------------------- ----------------------------------------------
Total expenses 142,391 112,659 387,239 387,625
----------------------- ----------------------------------------------
Net income $ 410,335 $(511,711) $ 1,530,589 $ 937,735
======================= ==============================================
1,221,,983
Limited Partners Net Income 332,916 (400,031) 1,221,983 753,268
General Partners Net Income 77,419 (111,680) 308,606 184,467
----------------------- ----------------------------------------------
$ 410,335 $(511,711) $ 1,530,589 $ 937,735
======================= ==============================================
Change in Net Asset Value Per $120.41 $ (173.71) $479.99 $286.91
Unit
======================= ==============================================
Average Net Income Per Unit $121.82 $ (173.22) $471.23 $306.39
======================= ==============================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
TUDOR FUND FOR EMPLOYEES L.P.
STATEMENTS OF CHANGES IN PARTNERS CAPITAL
FOR THE PERIOD ENDED JUNE 30, 1996 AND THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
LIMITED PARTNERS GENERAL PARTNER TOTAL NET ASSET VALUE
UNITS CAPITAL UNITS CAPITAL CAPITAL PER UNIT
------------------------------------ ---------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Partners Capital, January 1, 1995 2,409.778 $ 5,297,977 642.943 $ 1,413,533 $ 6,711,510 $2,198.53
Net income --- 1,621,026 --- 427,698 2,048,724
TIC 401(k) Plan unit 0.674 --- --- --- ---
adjustment (a)
Capital Contributions 489.296 1,197,007 --- --- 1,197,007
Redemptions (709.557) (1,843,848) --- --- (1,843,848)
---------- ------------ -------- ----------- ------------
Partners Capital, December 31, 1995 2,190.191 6,272,162 642.943 1,841,231 8,113,393 $2,863.75
---------- ------------ -------- ----------- ------------
Net income --- 1,221,983 --- 308,606 1,530,589
TIC 401(k) Plan unit 3.444 --- --- --- ---
adjustment (a)
Capital Contributions 650.826 2,002,764 --- --- 2,002,764
Redemptions (204.437) (669,351) --- --- (669,351)
---------- ------------ -------- ----------- ------------
Partners Capital, June 30, 1996 (b) 2,640.024 $ 8,827,558 642.943 $ 2,149,837 $10,977,395 $3,343.74
========== ============ ======== =========== ============
</TABLE>
(a) (See Note 3 - Capital Accounts)
(b) (See Note 4 - Redemption of Units)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
(1) ORGANIZATION
-------------
Tudor Fund For Employees L.P. (the "Partnership") was organized under the
Delaware Revised Uniform Limited Partnership Act (the "Act") on November
22, 1989, and commenced trading operations on July 2, 1990. Second
Management LLC, a Delaware limited liability company (SML), is the general
partner and owned approximately 643 units of general partnership interest
as of June 30, 1996. Ownership of limited partnership units is restricted
to employees of Tudor Investment Corporation ("TIC"), its affiliates and
certain employee benefit plans.
The objective of the Partnership is to realize capital appreciation through
speculative trading of commodity futures, forward, and option contracts and
other commodity interests ("commodity interests"). The Partnership will
terminate on December 31, 2010 or at an earlier date if certain conditions
occur as outlined in its Limited Partnership Agreement.
DUTIES OF THE GENERAL PARTNER
-------------------------------
The General Partner is the commodity pool operator for the Partnership
and is responsible for the selection and monitoring of the commodity
trading advisor and the commodity brokers used by the Partnership. The
General Partner is also responsible for the performance of all
administrative services necessary to the Partnership's operations.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------
ACCOUNTING POLICY
-----------------
The financial statements presented have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC") and, in
the opinion of management of the General Partner, include all adjustments
necessary for a fair statement of each period presented.
REVENUE RECOGNITION
---------------------
Commodity interests are recorded on the trade date at the transacted
contract price and valued at market.
BROKERAGE COMMISSIONS AND FEES
--------------------------------
These expenses represent all brokerage commissions, exchange, National
Futures Association and other fees incurred in connection with the
execution of commodity interest trades. Commissions and fees associated
with open commodity interests at the end of the period are accrued on a
round-turn basis.
<PAGE>
INCENTIVE FEE
-------------
The Partnership pays TIC, as trading advisor, an incentive fee equal to 12%
of the Trading Profits (as defined by the Limited Partnership Agreement)
earned as of the end of each fiscal quarter of the Partnership. Effective
August 1, 1995, TIC waived its right to receive incentive fees attributable
to units held by the Tudor Investment Corporation 401(k) Savings and Profit
Sharing Plan (the TIC 401(k) Plan).
MANAGEMENT FEE
--------------
The Partnership also pays TIC, for the performance of its duties, a monthly
management fee equal to 1/6 of 1% (2% per annum) of the Partnership's net
assets. Effective August 1, 1995, TIC waived its right to receive
management fees attributable to units held by the TIC 401(k) plan.
ORGANIZATIONAL AND OFFERING COSTS
----------------------------------
The General Partner paid all of the offering and organizational costs
incurred in connection with the start up of the Partnership and the initial
offering of units. The General Partner was reimbursed by the Partnership
for offering expenses of $106,728 over the first 12 months of its
operations and was reimbursed for organizational expenses of $48,200 from
commencement of trading operations (July 1990) through June 1995.
FOREIGN CURRENCY TRANSLATION
----------------------------
Assets and liabilities denominated in foreign currencies are translated at
month-end exchange rates. Gains and losses resulting from foreign currency
transactions are calculated using daily exchange rates and are included in
the accompanying statements of operations.
U.S. GOVERNMENT OBLIGATIONS
---------------------------
The Partnership invests a varying amount of its assets in U.S. Treasury
bills. A portion of such bills is held in commodity trading accounts and
used to fulfill initial margin requirements. U.S. Treasury bills, with
varying maturities through October 1996, are valued in the statements of
financial condition at original cost plus accrued discount which
approximates the market value. These bills had a face value of $8,000,000
and $5,000,000 (cost $7,615,282 and $4,782,246) at June 30, 1996 and
December 31, 1995.
(3) CAPITAL ACCOUNTS
----------------
Each partner, including the General Partner, has a capital account with an
initial balance equal to the amount such partner paid for its units. The
Partnership's net assets are determined monthly, and any increase or
decrease from the end of the preceding month is added to or subtracted from
the capital accounts of the partner based on the ratio that each capital
account bears to all capital accounts as of the beginning of the month. The
number of units of limited partnership interests held by the TIC 401(k)
Plan will be restated as necessary for management and incentive fees
attributable to units held at the beginning of each month by the TIC 401(k)
Plan to equate the per unit value of the TIC 401(k) Plans capital account
with the Partnerships per unit value.
<PAGE>
(4) REDEMPTION OF UNITS
-------------------
At each quarter-end, units are redeemable at the discretion of the limited
partner. Redemption of units in $1,000 increments or a full redemption of
all units are made at 100% of the net asset value per unit effective as of
the last business day of any quarter as defined in the Limited Partnership
Agreement. However, monthly redemptions have been required in the case of
employee terminations. Partial redemptions of units which would reduce the
net asset value of a limited partner's unredeemed units to less than the
minimum investment then required of new limited partners or such partner's
initial investment, whichever is less, will be honored only to the extent
of such limitation.
(5) INCOME TAXES
------------
No provision for income taxes has been made in the accompanying financial
statements. Partners are responsible for reporting income or loss based
upon their respective shares of revenue and expenses of the Partnership.
(6) RELATED PARTY TRANSACTIONS
--------------------------
The General Partner, due to its relationship with its affiliates and
certain other parties, may enter into certain related party transactions.
Bellwether Partners LLC, ("BPL"), a Delaware limited liability company and
an affiliate of the General Partner, is the Partnership's spot and forward
contract counterparty and receives commissions on foreign exchange forward
and commodity forward contracts. The Partnership typically has on deposit
with BPL, as collateral for forward contract transactions, no more than 20%
of the Partnership's net assets. Effective August 1, 1995, BPL ceased
receiving commissions for transacting the Partnerships foreign exchange
forward and commodity forward contracts.
Bellwether Futures LLC, a Delaware limited liability company and an
affiliate of the General Partner, manages the execution of treasury bond
futures by floor brokers on the Chicago Board of Trade.
TIC, an affiliate of the General Partner, receives incentive and management
fees as the Partnership's trading advisor (see Note 2).
(7) FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK AND CONCENTRATION OF
----------------------------------------------------------------------
CREDIT RISK
-----------
The Partnership is a party to financial instruments with elements of off-
balance sheet credit and market risk in excess of the amount recognized in
the statements of financial condition through its trading of financial
futures, forwards, swaps and exchange traded and negotiated over-the-
counter option contracts.
<PAGE>
Exchange traded futures contracts are marked to market daily, with
variations in value settled on a daily basis with both the exchange upon
which they are traded and the futures commission merchant through which the
commodity futures and options are executed. The Partnership has not taken
or made physical delivery on futures contracts. The forward contracts are
generally settled with the counterparty at least two business days after
the trade.
At June 30, 1996 and December 31, 1995, the Partnership held financial
instruments with the following approximate aggregate notional value (in
millions):
<TABLE>
<CAPTION>
June December
1996 1995
------- ----------
<S> <C> <C>
Exchange Traded Contracts:
- --------------------------
Interest Rate Futures and Option
Contracts
- --------------------------------
Domestic $ --- $ 2.4
Foreign 1.6 5.2
Foreign Exchange Contracts
- --------------------------
Financial Futures Contracts 1.8 .4
Forward Currency Contracts 1.3 4.8
Equity Index Futures
- --------------------
Domestic --- 6.2
Foreign --- 1.9
Over-the Counter Contracts:
- ---------------------------
Forward Currency Contracts --- 4.9
------- --------
Total $ 4.7 $25.8
======== ========
</TABLE>
As of June 30, 1996 and December 31, 1995, there were no swaps outstanding.
Notional amounts of these financial instruments are indicative only of the
volume of activity and should not be used as a measure of market and credit
risk. The various financial instruments held at June 30, 1996 and December
31, 1995 mature through, or matured on, the following dates:
<TABLE>
<CAPTION>
June 1996 December 1995
--------------- -----------------
<S> <C> <C>
Interest Rate Futures and Option December 1996 March 1996
Contracts
Foreign Exchange Contracts December 1996 March 1996
Equity Index Futures ----- March 1996
Over-the Counter Contracts ----- January 5, 1996
</TABLE>
<PAGE>
The following table summarizes the quarter-end and the average assets and
liabilities resulting from unrealized gains and losses on derivative
instruments included in the statements of financial condition based on
month-end balances (in thousands):
<TABLE>
<CAPTION>
Assets Liabilities
June 30, June 30,
1996 Average 1996 Average
------------ ------- -------- -------
<S> <C> <C> <C> <C>
Exchange Traded Contracts:
- --------------------------
Interest Rate Contracts
- -----------------------
Domestic $ --- $ 43 $ --- $ 8
Foreign --- 7 2 9
Foreign Exchange Contracts --- 49 7 2
- --------------------------
Equity Index Futures
- --------------------
Domestic --- 1 --- ---
Foreign --- 103 --- ---
Over-the-Counter Contracts: 26 7
- -----------------------------
Forward Currency Contracts --- --- ---
-------- ----- ------- -----
Total $ --- $229 $9 $26
======== ===== ======= =====
</TABLE>
Net trading gains and losses from strategies that use a variety of
derivative financial instruments are recorded in the statements of
operations. The following table summarizes the components (in thousands) of
trading gains and losses, net of commissions and fees, for the three and
six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Interest Rate Contracts
- ----------------------------
Domestic $ 506 $(158) $ 672 $ (377)
Foreign (340) (102) (247) (128)
Foreign Exchange Contracts 288 (480) 828 479
- ----------------------------
Equity Index Futures
- ----------------------------
Domestic (192) (307) (309) (372)
Foreign 1 299 603 1,170
Over-the-Counter Contracts 178 202 106 190
- ----------------------------
Non-Financial Instruments (60) (6) (66) 58
- ----------------------------
------ ------ ------- ------
Total $ 381 $(552) $1,587 $1,020
====== ====== ======= ======
</TABLE>
<PAGE>
In general, exchange traded futures and option contracts possess low credit
risk as most exchanges act as principal to a futures commission merchant
("FCM") on all commodity transactions. Furthermore, most global exchanges
require FCMs to segregate client funds to insure ample customer protection
in the event of an FCM's default. The Partnership monitors the
creditworthiness of its FCMs and counterparties and, when deemed necessary,
reduces its exposure to these FCMs and counterparties. The Partnership's
exposure to credit risk associated with the non-performance of these FCMs
and counterparties in fulfilling contractual obligations can be directly
impacted by volatile financial markets. A substantial portion of the
Partnership's open financial futures positions are transacted with major
international FCMs. BPL is the Partnership's spot and forward contract
counterparty (see Note (6) above). Notwithstanding the risk monitoring and
credit review performed by the Partnership with respect to its FCMs and
counterparties, including BPL, there always is a risk of non-performance.
The Partnership's exposure to credit risk associated with the non-
performance of these counterparties in fulfilling contractual obligations
can be directly impacted by volatile financial markets.
Generally, financial contracts can be closed out at the discretion of the
trading advisor. However, an illiquid market could prevent the closeout of
positions.
<PAGE>
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF
----------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The Partnership commenced operations on July 2, 1990. Following the closing of
the initial offering period, the Partnership had 37 Limited Partners who
subscribed for 421 units for $421,000. In addition, the General Partner
purchased 400 units of general partnership interest for $400,000. The
Partnership had additions of $1,080,068 and redemptions of $288,325 during the
quarter ended June 30, 1996 (the "Current Quarter"). From its inception through
July 1, 1996, the Partnership received total Limited Partner contributions of
$11,568,771 and had total withdrawals of $8,197,800. In addition, the General
Partner contributed $1.9 million since inception. The General Partner redeemed
$2 million on March 31, 1994. The General Partner continues to maintain the
largest equity interest in the Partnership. The General Partner's equity in the
Partnership as of June 30, 1996 was approximately $2.15 million, representing
approximately 20% of the Partnership's equity. At July 1, 1996, the Partnership
had a total of 90 Limited Partners.
As specified in the Second Amended and Restated Limited Partnership Agreement
dated May 22, 1996, the Partnership may accept investments from certain employee
benefit plans to the extent that such investment does not exceed 25% of the
aggregate value of outstanding units, excluding units held by the General
Partner and its affiliates. On August 1, 1995, the Partnership accepted its
first investment of $99,306 from the Tudor Investment Corporation 401(k)
Savings & Profit-Sharing Plan (the "TIC 401(k) Plan"), a qualified plan
organized for the benefit of employees of TIC and certain of its affiliates.
From its inception through July 1, 1996, the Partnership received a total of
$527,973 in contributions from the TIC 401(k) Plan. The TIC 401(k) Plans equity
in the Partnership as of July 1, 1996 was approximately $617,000, representing
approximately 5.6% of Partnership equity or approximately 9.9, excluding units
held by the General Partner and its affiliates. TIC has waived its right to
receive management and incentive fees attributable to units held by the TIC
401(k) Plan. The number of units of limited partnership interest held by the TIC
401(k) Plan will be restated as necessary to equate the per unit value of the
TIC 401(k) Plans capital account with the Partnerships per unit value.
Furthermore, BPL ceased charging commissions for transacting the Partnerships
foreign exchange spot, forward and options and commodity forward contracts.
(1) LIQUIDITY
---------
The Partnership's assets are deposited and maintained with BPL, banks or in
trading accounts with clearing brokers, and are used by the Partnership as
margin and collateral to engage in futures, option, and forward contract
trading. The Partnership invests in U.S. Government obligations approved by the
various contract markets to fulfill initial margin requirements. As of June 30,
1996 and December 31, 1995, U.S. Government obligations with varying maturities
through October 1996 represented approximately 68% and 52% of the total assets
of the Partnership. The percentage that U.S. Government obligations bear to the
total assets varies daily and monthly, as the market value of commodity interest
contracts changes, as Government obligations are purchased or mature, and as the
Partnership sells or redeems units. Since the Partnership's sole purpose is to
trade in futures, option, and forward contracts, and other commodity interest
contracts, it is anticipated that the Partnership will continue to maintain
substantial liquid assets for margin purposes. Interest income for the Current
Quarter was $142,552, compared to $99,057 during the quarter ended June 30,
1995. This increase was due to an increase in the Partnership's assets and
additional purchases of U.S. Government Obligations during the Current Quarter.
<PAGE>
In the context of the commodity or futures trading industry and cash
equivalents, cash and cash equivalents are part of the Partnership's inventory.
Cash deposited with banks represents approximately 14% and 32% of the
Partnership's assets as of June 30, 1996 and December 31, 1995. The cash and
U.S. Government obligations held at clearing brokers and banks at quarter-end
satisfy the Partnership's need for cash on both a short-term and long-term
basis.
Since futures contract trading generates a significant percentage of the
Partnership's income, any restriction or limit on that trading may render the
Partnership's investment in futures contracts illiquid. Most U. S. commodity
exchanges limit fluctuations in certain commodity futures and options contract
prices during a single day by regulations referred to as a "daily price
fluctuation limit" or "daily limit." Pursuant to such regulations, during a
single trading day, no trade may be executed at a price beyond the daily limits.
If the price for a contract has increased or decreased by an amount equal to the
"daily limit," positions in such contract can neither be taken nor liquidated
unless traders are willing to effect trades at or within the limit. Commodity
interest contract 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 interest
contract positions and impose restrictions on redemptions.
(2) CAPITAL RESOURCES
-----------------
The Partnership does not have, nor does it expect to have, any fixed assets.
Redemptions and additional sales of units in the future will affect the amount
of funds available for investments in commodity interest contracts in subsequent
periods.
The Partnership is currently open to new investments which can be made on a
quarterly basis. Such investments are limited to existing and future employees
of TIC, certain of its affiliates and certain employee benefit plans,
including, but not limited to, the TIC 401(k) Plan.
(3) RESULTS OF OPERATIONS
---------------------
As of June 30, 1996 and 1995, the Net Asset Value per unit was $3,343.74 and
$2,485.44. For the six months ended June 30, 1996, the Partnership had a gain of
16.76% or $479.99 per unit, compared to a gain of 13.05% or $286.91 per unit for
the six months ended June 30, 1995. For the Current Quarter, the Partnership
had a gain of 3.73% of $120.41 per unit, compared to a loss of (6.53%) or
($173.71) per unit for the three months ended June 30, 1995.
<PAGE>
Net trading gains and losses from strategies that use a variety of derivative
financial instruments are recorded in the statements of operations. The
following table summarizes the components (in thousands) of trading gains
and losses, net of commissions, for the three months and six months ended June
30, 1996 and 1995.
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
1996 1995 1996 1995
------ ----- ------ ------
<S> <C> <C> <C> <C>
Interest Rate Contracts
- ----------------------------
Domestic $ 506 $(158) $ 672 $ (377)
Foreign (340) (102) (247) (128)
Foreign Exchange Contracts 288 (480) 828 479
- ----------------------------
Equity Index Futures
- ----------------------------
Domestic (192) (307) (309) (372)
Foreign 1 299 603 1,170
Over-the-Counter Contracts 178 202 106 190
- ----------------------------
Non-Financial Instruments (60) (6) (66) 58
- ----------------------------
-------- ------ ------- -------
Total $ 381 $(552) $1,587 $1,020
======== ====== ======= =======
</TABLE>
Since the Partnership is a speculative trader in the commodities markets,
current year results are not comparable to previous years results. The
Partnership's net trading gains and losses represent a positive return on
average net assets of 3.4% for the Current Quarter compared to a negative return
of 7.1% for the second quarter of 1995. The Partnership's net trading gains
represent a positive return on average net assets of 15.0% for the six months
ended June 30, 1995 compared to a positive return of 13.6% for the six months
ended June 30, 1995 Brokerage commissions and fees were .3% and .7% of average
net assets for the quarters ended June 30, 1996 and 1995 and .7% and 1.5% for
the six months ended June 30, 1996 and 1995. In general, commission rates have
remained stable during the past three years.
Professional fees and other expenses increased during the Current Quarter, as
compared to the quarter ended June 30, 1995, due to increases in legal, audit
and bank charges. For the six months ended June 30, 1996, incebtuve fees were
10.5% of trading gains,net of commissions, compared to 15.0% for the six months
ended June 30, 1996.
Incentive fees are paid quarterly based on Net Trading Profits as described in
the Limited Partnership Agreement. For the quarter ended June 30, 1996,
incentive fees were 9.0% of trading gains, net of commissions and fees. During
the second quarter of 1995 there was no incentive fee earned due to net trading
losses for the quarter. For the six months ended June 30, 1996, incentive fees
were 10.5% of trading gains, net of commissions, compared to 15% for the six
months ended June 30, 1995.
Inflation is not expected to be a major factor in the Partnership's operations,
except that traditionally the commodities markets have tended to be more active,
and thus potentially more profitable during times of high inflation. Since the
commencement of the Partnership's trading operations in July 1990, inflation has
not been a major factor in the Partnership's operations.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TUDOR FUND FOR EMPLOYEES L.P.
By: /s/ Mark F. Dalton
------------------
Second Management LLC
General Partner
Mark F. Dalton
President and Chief
Operating Officer
By: /s/ Patrick A. Keenan
---------------------
Second Management LLC
General Partner
Patrick A. Keenan
Vice President and
Chief Financial Officer
August 14, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TUDOR FUND
FOR EMPLOYEES L.P. 6/30/96 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 1,651,602 1,651,602
<SECURITIES> 7,798,274 7,798,274
<RECEIVABLES> 1,960,054 1,960,054
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 11,409,929 11,409,929
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 11,409,929 11,409,929
<CURRENT-LIABILITIES> 432,534 432,534
<BONDS> 0 0
0 0
0 0
<COMMON> 0 0
<OTHER-SE> 10,977,395 10,977,395
<TOTAL-LIABILITY-AND-EQUITY> 11,409,929 11,409,929
<SALES> 552,726 1,917,828
<TOTAL-REVENUES> 552,726 1,917,828
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 142,391 387,239
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 410,335 1,530,589
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 410,335 1,530,589
<EPS-PRIMARY> 120.41 479.99
<EPS-DILUTED> 0 0
</TABLE>
