<PAGE> PAGE 1
000 B000000 10/31/97
000 C000000 0000865827
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000 F000000 Y
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000 J000000 A
001 A000000 THE BAUPOST FUND
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<PAGE> PAGE 2
012 C040001 9125
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013 B010001 BOSTON
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<PAGE> PAGE 3
015 E040008 X
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<PAGE> PAGE 4
015 D010017 FINLAND
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<PAGE> PAGE 5
015 A000026 THE CHASE MANHATTAN BANK
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015 E040028 X
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<PAGE> PAGE 6
020 A000002 SBC WARBURG
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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<PAGE> PAGE 10
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<PAGE> PAGE 11
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<PAGE> PAGE 12
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<PAGE> PAGE 13
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SIGNATURE PAUL GANNON
TITLE VICE-PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Baupost
Fund's audited financial statements at 10/31/97 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 131,241,269
<INVESTMENTS-AT-VALUE> 153,239,227
<RECEIVABLES> 2,064,032
<ASSETS-OTHER> 4,520,237
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 159,823,496
<PAYABLE-FOR-SECURITIES> 2,224,352
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4,640,828
<TOTAL-LIABILITIES> 6,865,180
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 113,718,323
<SHARES-COMMON-STOCK> 8,948,897
<SHARES-COMMON-PRIOR> 8,681,774
<ACCUMULATED-NII-CURRENT> 670,056
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 20,948,534
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 17,621,403
<NET-ASSETS> 152,958,316
<DIVIDEND-INCOME> 1,352,384
<INTEREST-INCOME> 3,506,505
<OTHER-INCOME> 0
<EXPENSES-NET> 2,902,546
<NET-INVESTMENT-INCOME> 1,956,343
<REALIZED-GAINS-CURRENT> 23,702,878
<APPREC-INCREASE-CURRENT> 5,899,569
<NET-CHANGE-FROM-OPS> 31,558,790
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,845,958
<DISTRIBUTIONS-OF-GAINS> 11,985,697
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,137,346
<NUMBER-OF-SHARES-REDEEMED> 1,250,566
<SHARES-REINVESTED> 989,255
<NET-CHANGE-IN-ASSETS> 44,170,274
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 13,233,949
<OVERDISTRIB-NII-PRIOR> 2,403,943
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,353,786
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,902,546
<AVERAGE-NET-ASSETS> 134,172,998
<PER-SHARE-NAV-BEGIN> 15.38
<PER-SHARE-NII> .30
<PER-SHARE-GAIN-APPREC> 3.47
<PER-SHARE-DIVIDEND> .40
<PER-SHARE-DISTRIBUTIONS> 1.66
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.09
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
To the Trustees and Shareholders of
The Baupost Fund
In planning and performing our audit of the financial statements of The Baupost
Fund for the year ended October 31, 1997, we considered its internal control,
including control activities for safeguarding securities, in order to determine
our auditing procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form N-SAR, not to
provide assurance on the internal control.
The management of The Baupost Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of controls. Generally, controls that are relevant to an audit pertain to
the entity's objective of preparing financial statements for external purposes
that are fairly presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or irregularities
may occur and not be detected. Also, projection of any evaluation of internal
control to future periods is subject to the risk that it may become inadequate
because of changes in conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more of the internal control components does not reduce to a relatively low
level the risk that errors or irregularities in amounts that would be material
in relation to the financial statements being audited may occur and not be
detected within a timely period by employees in the normal course of performing
their assigned functions. However, we noted no matters involving the internal
control and its operation, including controls for safeguarding securities, that
we consider to be material weaknesses as defined above at October 31, 1997.
This report is intended solely for the information and use of the trustees and
management of The Baupost Fund and the Securities and Exchange Commission.
ERNST & YOUNG LLP
December 5, 1997
