<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: 6/30/97 COMMISSION FILE NUMBER: 33-33982
------- --------
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 Road, Greenwich, Connecticut 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
JUNE 30, DECEMBER 31,
1997 1996
(UNAUDITED) (AUDITED)
----------- -----------
ASSETS
------
Cash $ 3,898,536 $ 2,220,395
Equity in commodity trading accounts:
Due from broker 1,405,591 1,005,276
U.S. Government obligations 7,424,205 8,773,008
Net unrealized gain on open commodity 15,572 114,755
interests
----------- -----------
Total equity 8,845,368 9,893,039
Other assets -- 25,272
----------- -----------
Total assets $12,743,904 $12,138,706
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
LIABILITIES:
Redemptions payable $ 276,034 $ 1,218,064
Pending partner additions 647,633 2,327,305
Incentive fees payable 7,874 --
Management fees payable 37,493 17,014
Accrued professional fees and other 65,783 49,957
----------- -----------
Total liabilities 1,034,817 3,612,340
----------- -----------
PARTNERS' CAPITAL:
Limited Partners, 10,000 units
authorized and 2,936.700 and
2,521.886 outstanding at June 30, 1997
and December 31, 1996 10,974,463 7,909,798
General Partner, 196.580 units
outstanding at June 30, 1997 and
196.580 units outstanding at December
31, 1996 734,624 616,568
----------- -----------
Total partners' capital 11,709,087 8,526,366
----------- -----------
Total liabilities and partners'
capital $12,743,904 $12,138,706
=========== ===========
The accompanying notes are an integral part of these statements.
<PAGE>
TUDOR FUND FOR EMPLOYEES L.P.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES:
Net realized trading gains $1,067,382 $ 691,846 $2,063,847 $1,807,925
Change in net unrealized trading (859,003) (281,672) (80,975) (151,244)
(losses)
Interest income 147,287 142,552 270,839 261,147
---------- --------- ---------- ----------
Total revenues 355,666 552,726 2,253,711 1,917,828
---------- --------- ---------- ----------
EXPENSES:
Brokerage commissions and fees 52,625 29,192 112,302 69,606
Incentive fee 7,874 34,331 93,743 166,073
Management fees 56,014 54,367 106,248 102,329
Professional fees and other 21,734 24,501 45,748 49,231
---------- --------- ---------- ----------
Total expenses 138,247 142,391 358,041 387,239
---------- --------- ---------- ----------
Net income $ 217,419 $ 410,335 $1,895,670 $1,530,589
========== ========= ========== ==========
Limited Partners' Net Income 204,873 332,916 1,777,614 1,221,983
General Partner's Net Income 12,546 77,419 118,056 308,606
---------- --------- ---------- ----------
$ 217,419 $ 410,335 $1,895,670 $1,530,589
========== ========= ========== ==========
Change in Net Asset Value Per Unit $63.82 $120.41 $600.54 $479.99
========== ========= ========== ==========
Average Net Income Per Unit $65.82 $121.82 $591.45 $471.23
========== ========= ========== ==========
</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, 1997 AND THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
NET ASSET
LIMITED PARTNERS GENERAL PARTNER TOTAL VALUE
UNITS CAPITAL UNITS CAPITAL CAPITAL PER UNIT
-------------- -------------- ---------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Partners' Capital, January 1, 1996 2,190.191 $ 6,272,162 642.943 $ 1,841,231 $ 8,113,393 $2,863.75
Net income -- 645,415 -- 175,337 820,752
TIC 401(k) Plan unit adjustment (a) 5.462 -- -- -- --
Capital Contributions 931.637 2,926,549 (446.363) -- 2,926,549
Redemptions (605.404) (1,934,328) -- (1,400,000) (3,334,328)
---------- ----------- -------- ----------- ----------
Partners' Capital, December 31, 1996 (b) 2,521.886 7,909,798 196.580 616,568 8,526,366 3,136.46
---------- ----------- -------- ----------- ----------
Net income -- 1,777,614 -- 118,056 1,895,670
TIC 401(k) Plan unit adjustment (a) 4.666 -- -- -- --
Capital Contributions 618.215 2,062,381 -- -- 2,062,381
Redemptions (208.067) (775,330) -- -- (775,330)
---------- ----------- -------- ----------- -----------
Partners' Capital, June 30, 1997 (b) 2,936.700 $10,974,463 196.580 $ 734,624 $11,709,087 $3,737.01
========== =========== ======== =========== ===========
</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, 1997
(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" or the "General
Partner"), was the general partner for the Partnership during the quarter
ended June 30, 1997 and owned approximately 197 units of general
partnership interest. Ownership of limited partnership units is restricted
to employees of Tudor Investment Corporation ("TIC" or the "Trading
Advisor") and its affiliates and certain employee benefit plans. Prior to
April 4, 1996, Second Management Company, Inc., a Delaware Corporation
("SMCI") was the general partner of the Partnership. SML is the successor-
in-interest to SMCI by virtue of merger with SMCI.
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 Second Amended and Restated Limited Partnership
Agreement.
DUTIES OF THE GENERAL PARTNER
-----------------------------
The General Partner acts as 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.
<PAGE>
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.
INCENTIVE FEE
-------------
The Partnership pays TIC, as trading advisor, an incentive fee equal to 12%
of the Trading Profits (as defined in the Limited Partnership Agreement)
earned as of the end of each fiscal quarter of the Partnership. Effective
August 1, 1995, TIC has waived its right to receive incentive fees
attributable to units held at the beginning of each month 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 has waived its right to receive
management fees attributable to units held at the beginning of each month
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 margin requirements. U.S. Treasury bills, with varying
maturities through December 1997, 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 $7,500,000 and $9,000,000
(cost $7,201,141 and $8,548,403) at June 30, 1997 and December 31, 1996.
<PAGE>
(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 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) Plan's capital account with the Partnership's per unit
value.
(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 Second Amended and
Restated Limited Partnership Agreement. However, monthly redemptions have
been required in the case of employee resignations. 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. 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 Partnership's foreign exchange forward and
commodity contracts.
Bellwether Futures LLC ("BFL"), a Delaware limited liability company,
formerly Bellwether Futures Corporation is an affiliate of the General
Partner and is qualified to do business in Illinois. Effective January 1,
1996, BFL ceased collecting give-up fees from the Partnership as
compensation for managing the execution of treasury bond futures by floor
brokers on the Chicago Board of Trade.
<PAGE>
TIC, an affiliate of the General Partner, receives incentive and management
fees as compensation for acting 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.
Exchange traded futures contracts are marked to market daily, with
variations in value settled on a daily basis with the exchange upon which
they are traded and with 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, 1997 and December 31, 1996, the Partnership held financial
instruments with the following approximate aggregate notional value (000's
omitted):
June 30, December 31,
1997 1996
------------------------------
Exchange Traded Contracts:
- --------------------------
Interest Rate Futures and Option
Contracts
- --------------------------------
Domestic $ --- $ 565
Foreign 265,827 28,977
Foreign Exchange Contracts
- --------------------------
Financial Futures Contracts 945 1,673
Forward Currency Contracts 7,926 3,399
Equity Index Futures
- --------------------
Domestic 2,215 ---
Foreign 1,450 505
Over-the Counter Contracts:
- ---------------------------
Equity Index Swaps 489 ---
-------- -------
Total $278,852 $35,119
======== =======
<PAGE>
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, 1997 and December 31,
1996 mature through, or matured on, the following dates:
June 30, December 31,
1997 1996
--------------- -------------
Interest Rate Futures and Option December 1998 March 1997
Contracts
Foreign Exchange Contracts December 1997 June 1997
Equity Index Futures September 1997 March 1997
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 statement of financial condition based on month-end balances (in
thousands):
Assets Liabilities
-------------------- --------------------
June 30, June 30,
1997 Average 1997 Average
--------- --------- --------- ---------
Exchange Traded Contracts:
- --------------------------
Interest Rate Contracts
- ------------------------------
Domestic -- 23 -- 18
Foreign 44 76 2 39
Foreign Exchange Contracts 8 35 2 21
- ------------------------------
Equity Index Futures
- ------------------------------
Domestic -- 84 42 13
Foreign 15 66 -- 2
Over-the-Counter Contracts:
- ------------------------------
Forward Currency Contracts -- 12 -- 14
------ ------ ------ ------
Total 67 296 46 107
====== ====== ====== ======
<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 and fees, for the three and six months ended June 30,
1997 and 1996.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ---------------
1997 1996 1997 1996
-------- -------- ------- ------
<S> <C> <C> <C> <C>
Interest Rate Futures and Option
Contracts
- --------------------------------
Domestic $ 78 $ 506 399 673
Foreign 421 (340) 291 (247)
Foreign Exchange Contracts 50 288 402 827
- --------------------------
Equity Index Futures
- --------------------
Domestic (100) (192) 78 (309)
Foreign (243) 1 36 603
Over-the-Counter Contracts 185 178 161 106
- --------------------------
Non-Derivative Financial Instruments (235) (60) 504 (66)
- ------------------------------------
------ ------ ------ ------
Total $ 156 $ 381 $1,871 $1,587
====== ====== ====== ======
</TABLE>
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 FCM's to segregate client funds to insure ample customer protection
in the event of an FCM's default. The Partnership monitors the
creditworthiness of its FCM's and counterparties and, when deemed necessary,
reduces its exposure to these FCM's and counterparties. The Partnership's
exposure to credit risk associated with the non-performance of these FCM's
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 were transacted with major
international FCM's. 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 FCM's 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 close-out 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 $844,317 and redemptions of $647,633 during
the quarter ended June 30, 1997 (the "Current Quarter"). From its
inception through July 1, 1997, the Partnership received total Limited
Partner contributions of $14,830,972 and had total withdrawals of
$10,238,107. In addition, the General Partner contributed $1,900,000 since
inception. The General Partner redeemed $2,000,000 on March 31, 1994 and
$1,400,000 on December 31, 1996. The General Partner's equity in the
Partnership as of June 30, 1997 was approximately $735,000, representing
approximately 6% of the Partnership's equity. At July 1, 1997, the
Partnership had a total of 101 Limited Partners.
As further 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 an 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, 1997, the Partnership
has received a total of $1,022,174 in contributions from the TIC 401(k)
Plan. The TIC 401(k) Plan's equity in the Partnership as of July 1, 1997
was approximately $1,230,000, representing approximately 10.3% of
Partnership equity or approximately 12.8% 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) Plan's capital account with the Partnership's per unit
value. Furthermore, BPL ceased charging commissions for transacting the
Partnership's foreign exchange spot and forward 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, 1997 and December 31, 1996, U.S. Government obligations with
varying maturities through December 1997 represented approximately 58% and
72% 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
<PAGE>
anticipated that the Partnership will continue to maintain substantial
liquid assets for margin purposes. Interest income for the Current Quarter
was $147,286, compared to $142,551 during the quarter ended June 30, 1996.
This increase was due to an increase in the Partnership's assets.
In the context of the commodity or futures trading industry, cash and cash
equivalents are part of the Partnership's inventory. Cash deposited with
banks represents approximately 31% and 18% of the Partnership's assets as
of June 30, 1997 and December 31, 1996. 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
contracts 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 and 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, 1997 and 1996, the Net Asset Value per unit was $3,737.01 and
$3,343.74. For the six months ended June 30, 1997, the Partnership had a
gain of 19.15% or $600.54 per unit, compared to a gain of 17.11% or $479.99
per unit for the six months ended June 30, 1996. For the Current Quarter,
the partnership had a gain of 1.73% or $63.82 per unit, compared to a gain
of 3.73% or $120.41 per unit for the three months ended June 30, 1996.
<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 and six months
ended June 30, 1997 and 1996.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ---------------
1997 1996 1997 1996
------------------ ---------------
<S> <C> <C> <C> <C>
Interest Rate Futures and Option
Contracts
- --------------------------------
Domestic $ 78 $ 506 399 673
Foreign 421 (340) 291 (247)
Foreign Exchange Contracts 50 288 402 827
- --------------------------
Equity Index Futures
- --------------------
Domestic (100) (192) 78 (309)
Foreign (243) 1 36 603
Over-the-Counter Contracts 185 178 161 106
- --------------------------
Non-Financial Derivative Instruments (235) (60) 503 (66)
- ------------------------------------
----- ----- ------ ------
Total $ 156 $ 381 $1,871 $1,587
===== ===== ====== ======
</TABLE>
Since the Partnership is a speculative trader in the commodities markets,
current year results are not comparable to previous year's results. The
Partnership's net trading gains and losses represent a positive return on
average net assets of 1.29% for the Current Quarter compared to a positive
return of 3.35% for the three months ended June 30, 1996. The Partnership's net
trading gains represent a positive return on average net assets of 15.87% for
the six months ended June 30, 1997 compared to a positive return of 12.28% for
the six months ended June 30, 1996. Brokerage commissions and fees were .4% and
.3% of average net assets for the quarters ended June 30, 1997 and 1996 and 1.0%
and .7% for the six months ended June 30, 1997 and 1996.
Professional fees and other expenses during the Current Quarter ended June 30,
1997 remained stable as compared to the quarter ended June 30, 1996.
Incentive fees are paid quarterly based on Net Trading Profits as described
further in the Limited Partnership Agreement. For the six months ended June 30,
1997 and 1996, incentive fees were 5.0% and 10.5% of trading gains, net of
commissions and fees. Trading losses of $866,300 which were incurred during the
last six months of 1996 resulted in lower incentive fees as a percentage of
Trading Profits during the first six months of 1997 because trading losses need
to be recouped by the Partnership prior to the Partnership's payment of
incentive fees to the Trading Advisor.
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: Second Management LLC,
General Partner
By: /s/ Mark F. Dalton
------------------
Mark F. Dalton,
President and Chief
Operating Officer of the
General Partner
By: /s/ Mark Pickard
----------------
Mark Pickard,
Vice President and
Chief Financial Officer of the
General Partner
August 14, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TUDOR FUND
FOR EMPLOYEES L.P. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,898,536
<SECURITIES> 7,424,205
<RECEIVABLES> 1,421,163
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,743,904
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 12,743,904
<CURRENT-LIABILITIES> 1,034,817
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 11,709,087
<TOTAL-LIABILITY-AND-EQUITY> 12,743,904
<SALES> 2,253,711
<TOTAL-REVENUES> 2,253,711
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 358,041
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,895,670
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,895,670
<EPS-PRIMARY> 600.54
<EPS-DILUTED> 0
</TABLE>
