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Previous: NATIONAL MUNICIPAL TRUST SERIES 165, 497, 1995-09-11 |
Next: MUNICIPAL INVT TR FD INTERM TERM SER 232 DEFINED ASSET FDS, 497, 1995-09-11 |
<PAGE> 1
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Trustees of The Reserve Private Equity Series:
We have audited the accompanying statement of assets and liabilities,
including the schedule of portfolio investments, of the Informed Investors Fund
(one of the Funds of the Reserve Private Equity Series) as of May 31, 1995,
and the related statement of operations, the statement of changes in net assets
and the financial highlights for the period December 28, 1994 (commencement of
operations) through May 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of May 31, 1995 by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Informed Investors Fund of the Reserve Private Equity Series as
of May 31, 1995, the results of its operations, the changes in its net assets,
and its financial highlights for the period referred to above, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
June 23, 1995
<PAGE> 2
RESERVE INFORMED INVESTORS GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reserve Informed Investors Growth Fund is a seperate series of shares
issued by Reserve Private Equity Series (the "Trust"). The Trust was
formed under Delaware law as a Delaware business trust. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
non-diversified open-end management investment company. There are an
unlimited number of shares of beneficial interest of $.001 par value
authorized in each series. The accounting policies summarized below are
consistently followed in the preparation of the financial statements in
conformity with generally accepted accounting principles.
SECURITY VALUATION
Portfolio securities are stated at value. A security listed or traded on
an exchange is valued at its last sale price on the exchange where the
security is principally traded or, lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked
prices on that day. Each security traded in the over-the-counter market
is valued at the mean between its quoted bid and asked prices.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on the trade date. Dividend income
and distributions to shareholders are recorded on the ex-dividend dates.
Interest income is accrued daily. Realized gains and losses from
securities transactions and unrealized appreciation or depreciation of
securities are reported on the identified cost basis for both financial
statement and Federal income tax purposes.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for net operating losses. The effect of these
differences for the year ended May 31, 1995 decreased undistributed net
investment loss by $38,948 and decreased aggregate paid in capital by
$38,948.
EXPENSES
Each series charged only for its direct or allocated (in proportion to net
assets) share of expenses.
FEDERAL INCOME TAXES
It is the Trust's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute substantially all of its taxable income to
its shareholders. Accordingly, no Federal income tax provision is
required.
2. INVESTMENT ACTIVITY
Purchases and sales of securities for the period December 28, 1994
(Commencement of Operations) through May 31, 1995, other than short-term
securities, aggregated $8,905,639 and $3,189,520 respectively.
<PAGE> 3
RESERVE INFORMED INVESTORS GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 - (CONTINUED)
3. INVESTMENT MANAGEMENT AGREEMENT
Reserve Management Company, Inc. (RMCI), serves as the Fund's investment
adviser and pays substantially all ordinary operating expenses of the Fund
for which it receives a comprehensive fee at an annual rate of 1.50% of
the average daily net assets of the Fund. RMCI is a shareholder of the
Fund.
4. DISTRIBUTION ASSISTANCE
Pursuant to a Distribution Plan, the Fund will make payments of .25% per
annum of the average daily net assets of shareholder accounts as to which
the payee has rendered distribution assistance. During the period, the
Fund paid $6,015 in distribution expenses to RMCI.
5. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock for the period December 28, 1994
(commencement of operations) through May 31, 1995 were as follows:
<TABLE>
<CAPTION>
Shares Amount
--------- ----------
<S> <C> <C>
Share sold 634,326 $6,422,521
Redeemed (64,254) (656,742)
--------- ----------
Net Increase 570,072 $5,765,779
========= ==========
</TABLE>
<PAGE> 4
RESERVE INFORMED INVESTORS GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value
(cost $5,495,629) $6,826,488
Cash 184,181
Receivable for investment securities sold 110,002
Dividends receivable 875
----------
Total Assets 7,121,546
----------
LIABILITIES
Payable for fund shares redeemed 12,000
Payable for investment securities purchased 272,346
----------
Total Liabilities 284,346
----------
NET ASSETS $6,837,200
==========
NET ASSETS CONSIST OF (Note 1)
Capital Stock (Par Value $.001 per share) $ 570
Additional paid in capital 5,726,261
Accumulated net realized loss on investments (220,490)
Net unrealized appreciation on investments (Note 1) 1,330,859
----------
NET ASSETS, at value, applicable to 570,072 outstanding shares
of Beneficial Interest (Note 5) $6,837,200
==========
NET ASSET VALUE, and redemption price per share ($6,837,200 / 570,072) $11.99
=======
Maximum offering price per share (100/95.5 of $11.99) $12.55
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 5
RESERVE INFORMED INVESTORS GROWTH FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
DECEMBER 28, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-----------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 3,154
EXPENSES
Comprehensive fee (Note 3) $36,087
12b-1 Fee (Note 4) 6,015
---------
Total Expenses 42,102
----------
NET INVESTMENT LOSS (38,948)
----------
Realized and Unrealized Gain on Investments
Net realized loss on investment securities: (Note 1)
Proceeds from sales of securities 3,189,520
Cost of securities sold (3,410,010) (220,490)
----------
Net unrealized appreciation on investments 1,330,859
----------
Net realized and unrealized gain on investments 1,110,369
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,071,421
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 6
RESERVE INFORMED INVESTORS GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DECEMBER 28, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-----------------------
<S> <C>
INCREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment loss $ (38,948)
Net realized loss from investments (220,490)
Net unrealized appreciation 1,330,859
----------
Net increase in net assets resulting from
operations 1,071,421
FROM CAPITAL SHARE TRANSACTIONS (Note 5)
Net proceeds from sales of shares 6,422,521
Cost of shares redeemed (656,742)
----------
Net increase in net assets resulting from
share transactions 5,765,779
----------
NET INCREASE IN NET ASSETS 6,837,200
NET ASSETS:
Beginning of period 0
----------
End of period $6,837,200
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 7
RESERVE INFORMED INVESTORS GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 - (CONTINUED)
6. FINANCIAL HIGHLIGHTS (FOR ONE SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
DECEMBER 28, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
--------------------
<S> <C>
Net asset value, beginning of period $ 10.00
-------
Income from investment operations
Net investment loss (.07)
Net realized and unrealized gain 2.06
-------
Total from investment operations 1.99
-------
Net asset value, end of period $ 11.99
=======
Total Return (2) 19.90%(2)
RATIOS/SUPPLEMENTAL DATA
------------------------
Net assets in thousands, end of period $6,837
Ratio of expenses to average net assets 1.75%(1)
Ratio of net investment loss to average
net assets (1.62)%(1)
Portfolio turnover rate 59%(1)
</TABLE>
---------------------------------
(1) Annualized.
(2) Total return is not annualized, and does not reflect impact of sales
load.
<PAGE> 8
RESERVE INFORMED INVESTORS GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MAY 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS VALUE
SHARES (NOTE 1)
------ --------
<S> <C> <C>
COMPUTER COMMUNICATIONS EQUIPMENT (7.5%)
* Adaptec Inc. 7,200 $ 216,900
* 3 Com Corp. 4,600 294,400
----------
511,300
----------
ELECTRIC MEASUREMENT & TESTING INSTRUMENTS (9.7%)
* Tencor Instruments 4,400 295,900
* Teradyne Inc. 6,800 368,050
----------
663,950
----------
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT (1.6%)
Helix Technology Corp. 3,000 114,000
----------
OPTICAL INSTRUMENTS AND LENSES (4.1%)
* KLA Instruments Corp. 4,000 279,000
----------
PACKAGED SOFTWARE (9.6%)
* Broderbund Software Inc. 3,100 139,500
* Cadence Design Systems 9,400 279,650
Computer Associates International Inc. 3,600 235,800
----------
654,950
----------
RADIO, TV AND BROADCAST COMMUNICATION EQUIPMENT (8.0%)
* Andrew Corp. 11,250 548,438
----------
SEMICONDUCTOR, RELATED DEVICE (34.9%)
* Altera Corp. 4,000 311,500
* Atmel Corp. 7,200 316,800
* Cypress Semiconductor Corp. 5,100 165,112
* Integrated Device Technology Inc. 4,400 191,400
Intel Corp. 2,000 224,500
Linear Technology Corp. 3,800 232,750
Micron Technology Inc. 17,500 780,938
* Xilinx Inc. 1,900 160,075
----------
2,383,075
----------
SPECIAL INDUSTRIAL MACHINERY (12.7%)
* Applied Materials Inc. 2,800 215,600
* Kulicke & Soffa Industries Inc. 3,300 140,250
* Lam Research Corp. 6,300 360,675
* Novellus Systems Inc. 2,500 155,000
----------
871,525
----------
TELEPHONE & TELGRAPH APPARATUS (11.7%)
* Tellabs Inc. 15,900 524,700
* U.S. Robotics Corp. 3,300 275,550
----------
800,250
----------
TOTAL COMMON STOCKS (Cost $5,495,629) (99.8%) 6,826,488
Other assets, less liabilities (.2%) 10,712
----------
NET ASSETS (100%) $6,837,200
==========
</TABLE>
Value of investments are shown as a percentage of Net Assets.
* Non-income producing security.
For Federal income tax purposes the tax basis of investments owned at May
31, 1995 was $5,495,629, the aggregated gross unrealized appreciation for
all investments was $1,418,732 and aggregate gross unrealized depreciation
for all investments was $87,873.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 9
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Trustees of The Reserve Private Equity Series:
We have audited the accompanying statement of assets and liabilities,
including the schedule of portfolio investments, of the Blue Chip Fund (one of
the Funds of the Reserve Private Equity Series) as of May 31, 1995, and the
related statement of operations, the statement of changes in net assets and the
financial highlights for the period October 28, 1994 (commencement of
operations) through May 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of May 31, 1995 by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Blue Chip Fund of the Reserve Private Equity Series as of May
31, 1995, the results of its operations, the changes in its net assets, and its
financial highlights for the period referred to above, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
June 23, 1995
<PAGE> 10
RESERVE BLUE CHIP GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reserve Blue Chip Growth Fund is a seperate series of shares issued by
Reserve Private Equity Series (the "Trust"). The Trust was formed under
Delaware law as a Delaware business trust. The Fund is registered under
the Investment Company Act of 1940, as amended, as a non-diversified
open-end management investment company. There are an unlimited number of
shares of beneficial interest of $.001 par value authorized in each
series. The accounting policies summarized below are consistently
followed in the preparation of the financial statements in conformity with
generally accepted accounting principles.
SECURITY VALUATION
Portfolio securities are stated at value. A security listed or traded on
an exchange is valued at its last sale price on the exchange where the
security is principally traded or, lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked
prices on that day. Each security traded in the over-the-counter market
is valued at the mean between its quoted bid and asked prices.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on the trade date. Dividend income
and distributions to shareholders are recorded on the ex-dividend dates.
Interest income is accrued daily. Realized gains and losses from
securities transactions and unrealized appreciation or depreciation of
securities are reported on the identified cost basis for both financial
statement and Federal income tax purposes.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for net operating losses. The effect of these
differences for the year ended May 31, 1995 decreased undistributed net
investment loss by $5,361, and decreased aggregate paid in capital by
$5,361.
EXPENSES
Each series is charged only for its direct or allocated (in proportion to
net assets) share of expenses.
FEDERAL INCOME TAXES
It is the Trust's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute substantially all of its taxable income to
its shareholders. Accordingly, no Federal income tax provision is
required.
2. INVESTMENT ACTIVITY
Purchases and sales of securities, for the period October 28, 1994
(commencement of operations) through May 31, 1995, other than short-term
securities, aggregated $2,462,898 and $843,868 respectively.
<PAGE> 11
RESERVE BLUE CHIP GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 - (CONTINUED)
3. INVESTMENT MANAGEMENT AGREEMENT
Reserve Management Company, Inc. (RMCI), serves as the Fund's investment
adviser and pays substantially all ordinary operating expenses of the Fund
for which it receives a comprehensive fee at an annual rate of 1.50% of
the average daily net assets of the Fund. RMCI waived comprehensive fees
of $120. Both RMCI and the Sub-Adviser, Trainer, Wortham & Company are
shareholders of the Fund.
4. DISTRIBUTION ASSISTANCE
Pursuant to a Distribution Plan, the Fund will make payments of .25% per
annum of the average daily net assets of shareholder accounts as to which
the payee has rendered distribution assistance. RMCI waived distribution
assistance of $20. During the period, the Fund paid $1923 in distribution
expenses to RMCI.
5. CAPITAL SHARE TRANSACTIONS
Transactions in capital stock for the period October 28, 1994
(commencement of operations) through May 31, 1995 were as follows:
<TABLE>
<CAPTION>
Shares Amount
------- ----------
<S> <C> <C>
Share sold 214,923 $2,257,822
Redeemed (49,164) (520,420)
------- ----------
Net Increase 165,759 $1,737,402
======= ==========
</TABLE>
<PAGE> 12
RESERVE BLUE CHIP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value
(cost $1,711,582) $ 1,880,444
Cash 506,014
Dividends receivable 2,207
-----------
Total Assets 2,388,665
-----------
LIABILITIES
Payable for investment securities purchased 395,210
-----------
NET ASSETS $ 1,993,455
===========
Net Assets consist of (Note 1)
Capital Stock (Par Value $.001 per share) $ 166
Additional paid in capital 1,731,875
Undistributed net realized gain on investments 92,552
Net unrealized appreciation on investments (Note 1) 168,862
-----------
NET ASSETS, at value, applicable to 165,759 outstanding shares
of Beneficial Interest (Note 5) $ 1,993,455
===========
NET ASSET VALUE, and redemption price per share ($1,993,455 / 165,759) $12.03
======
Maximum offering price per share (100/95.5 of $12.03) $12.60
======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 13
RESERVE BLUE CHIP GROWTH FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
OCTOBER 28, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 7,957
EXPENSES
Comprehensive fee (Note 3) $11,535
12b-1 Fee (Note 4) 1,923
-------
Total expenses 13,458
Less: Fees voluntarily waived by
RMCI (Notes 3 and 4) 140
-------
Net Expenses 13,318
---------
NET INVESTMENT LOSS (5,361)
---------
Realized and Unrealized Gain on Investments
Net realized gain on investment securities: (Note 1)
Proceeds from sales of securities 843,868
Cost of securities sold (751,316) 92,552
-------
Net unrealized appreciation on investments 168,862
---------
Net realized and unrealized gain on investments 261,414
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 256,053
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 14
RESERVE BLUE CHIP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
OCTOBER 28, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-------------------
<S> <C>
INCREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment loss $ (5,361)
Net realized gain from investments 92,552
Net unrealized appreciation from investments 168,862
-------------
Net increase in net assets resulting from
operations 256,053
-------------
FROM CAPITAL SHARE TRANSACTIONS (Note 5)
Net proceeds from sales of shares 2,257,822
Cost of shares redeemed (520,420)
-------------
Net increase in net assets resulting from
share transactions 1,737,402
-------------
NET INCREASE IN NET ASSETS 1,993,455
NET ASSETS:
Beginning of period 0
-------------
End of period $ 1,993,455
=============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 15
RESERVE BLUE CHIP GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 - (CONTINUED)
6. FINANCIAL HIGHLIGHTS (FOR ONE SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
OCTOBER 28, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-------------------
<S> <C>
Net asset value, beginning of period $10.00
------
Income from investment operations
Net investment loss (.03)
Net realized and unrealized gain 2.06
------
Total from investment operations 2.03
------
Net asset value, end of period $12.03
======
Total Return 20.30%(2)
RATIOS/SUPPLEMENTAL DATA
------------------------
Net assets in thousands, end of period $1,993
Ratio of expenses to average net assets
before waivers (Notes 3 and 4) 1.75%(1)
Ratio of expenses to average net assets,
net of waiver 1.73%(1)
Ratio of net investment loss to average
net assets, before waivers (Notes 3 and 4) (.72)%(1)
Ratio of net investment loss to average
net assets, net of waiver (.70)%(1)
Portfolio turnover rate 68%
</TABLE>
----------------------
(1) Annualized
(2) Total return is not annualized, and does not reflect impact of sales
load.
<PAGE> 16
RESERVE BLUE CHIP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MAY 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS VALUE
SHARES (NOTE 1)
------ --------
<S> <C> <C>
BUSINESS EQUIPMENT (4.5%)
Xerox Corp. 800 $ 90,700
--------
CHEMICALS (3.5%)
First Mississippi Corp. 3,000 69,375
--------
COMMUNICATION - NETWORK (6.0%)
Capital Cities/ABC Inc. 700 67,550
Comcast Corp. Special - Cl.A 3,000 52,500
--------
120,050
--------
COMPUTER SOFTWARE (8.2%)
* Microsoft Corp. 700 59,281
National Data Corp. 5,000 103,750
--------
163,031
--------
DRUGS (4.0%)
Abbott Laboratories 2,000 80,000
--------
ELECTRICAL EQUIPMENT (1.1%)
* American Superconductor Corp. 1,500 22,875
--------
ELECTRONIC COMPONENTS - SEMICONDUCTOR (3.4%)
Intel Corp. 600 67,350
--------
ELECTRONICS (3.7%)
General Signal Corp. 2,000 74,000
--------
ENTERTAINMENT (2.3%)
* Viacom Inc. - CI.B 1,000 46,625
--------
FINANCIAL SERVICES (4.6%)
Citicorp 1,700 90,950
--------
FOOD WHOLESALERS (2.0%)
Sysco Corp. 1,500 40,688
--------
MACHINERY - INDUSTRY/SPEC (4.3%)
Thermo Electron Corp. 2,400 86,400
--------
MULTI-LINE INSURANCE (4.0%)
American International Group Inc. 700 79,625
--------
</TABLE>
<PAGE> 17
RESERVE BLUE CHIP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MAY 31, 1995 - (CONTINUED)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED) VALUE
SHARES (NOTE 1)
------ --------
<S><C> <C> <C>
OIL/GAS EQUIPMENT SERVICES (5.4%)
* Petroleum Geo-Services - ADR 2,000 $ 55,000
Schlumberger Ltd. 800 52,000
----------
107,000
----------
OIL - INTERNATIONAL (2.7%)
Texaco Inc. 800 54,800
----------
PHARMACEUTICALS (8.5%)
Johnson & Johnson 1,500 99,375
Merck & Co. 1,500 70,688
----------
170,063
----------
PUBLISHING (2.5%)
* Harte-Hanks Communications Inc. 2,000 49,000
----------
RESTAURANTS (2.9%)
McDonalds Corp. 1,500 56,812
----------
RETAIL (2.4%)
Tandy Corp. 1,000 46,750
----------
RETAIL - SPECIALTIES (3.7%)
* Department 56 Inc. 2,000 73,250
----------
RETAIL STORES-DEPARTMENT (2.3%)
* Federated Department Stores Inc. 2,000 46,000
----------
TELECOMMUNICATIONS (2.7%)
* Commnet Cellular Inc. 2,000 53,750
----------
TELECOMMUNICATIONS EQUIPMENT (9.6%)
* Glenayre Technologies Inc. 1,700 107,525
Motorola Inc. 1,400 83,825
----------
191,350
----------
TOTAL COMMON STOCKS (Cost $1,711,582) (94.30%) 1,880,444
Other assets, less liabilities (5.70%) 113,011
----------
NET ASSETS (100%) $1,993,455
==========
</TABLE>
Value of investments are shown as a percentage of Net Assets.
* Non-income producing security.
For federal income tax purposes the tax basis for investments owned at May
31, 1995 was $1,711,582, the aggregate gross unrealized appreciation for all
investments was $194,550 and aggregate gross unrealized depreciation for all
investments was $25,688.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
To The Shareholders and Board of Trustees of The Reserve Private Equity Series:
We have audited the accompanying statement of assets and liabilities,
including the schedule of portfolio investments, of the Emerging Growth Fund
(one of the Funds of the Reserve Private Equity Series) as of May 31, 1995,
and the related statement of operations, the statement of changes in net assets
and the financial highlights for the period November 14, 1994 (commencement of
operations) through May 31, 1995. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of May 31, 1995 by correspondence with the custodian and brokers or
other auditing procedures where confirmations from brokers were not received.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of the Emerging Growth Fund of the Reserve Private Equity Series as of
May 31, 1995, the results of its operations, the changes in its net assets, and
its financial highlights for the period referred to above, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
June 23, 1995
<PAGE> 19
RESERVE EMERGING GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reserve Emerging Growth Fund is a seperate series of shares issued by
Reserve Private Equity Series (the "Trust"). The Trust was formed under
Delaware law as a Delaware business trust. The Fund is registered under
the Investment Company Act of 1940, as amended, as a non-diversified
open-end management investment company. There are an unlimited number of
shares of beneficial interest of $.001 par value authorized in each series.
The accounting policies summarized below are consistently followed in the
preparation of the financial statements in conformity with generally
accepted accounting principles.
SECURITY VALUATION
Portfolio securities are stated at value. A security listed or traded on
an exchange is valued at its last sale price on the exchange where the
security is principally traded or, lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices
on that day. Each security traded in the over-the-counter market is valued
at the mean between its quoted bid and asked prices.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on the trade date. Dividend income
and distributions to shareholders are recorded on the ex-dividend dates.
Interest income is accrued daily. Realized gains and losses from
securities transactions and unrealized appreciation or depreciation of
securities are reported on the identified cost basis for both financial
statement and Federal income tax purposes.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for net operating losses. The effect of these
differences for the year ended May 31, 1995 decreased undistributed net
investment loss by $9,569, and decreased aggregate paid in capital by
$9,569.
EXPENSES
Each series is charged only for its direct or allocated (in proportion to
net assets) share of expenses.
FEDERAL INCOME TAXES
It is the Trust's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute substantially all of its taxable income to
its shareholders. Accordingly, no Federal income tax provision is
required.
2. INVESTMENT ACTIVITY
Purchases and sales of securities for the period November 14, 1994
(commencement of operations) through May 31, 1995, other than short-term
securities, aggregated $1,377,800 and $406,988 respectively.
<PAGE> 20
RESERVE EMERGING GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 - (CONTINUED)
3. INVESTMENT MANAGEMENT AGREEMENT
Reserve Management Company, Inc. (RMCI), serves as the Fund's investment
adviser and pays substantially all ordinary operating expenses of the Fund
for which it receives a comprehensive fee at an annual rate of 1.50% of the
average daily net assets of the Fund. RMCI is a majority shareholder of the
Fund.
4. DISTRIBUTION ASSISTANCE
Pursuant to a Distribution Plan, the Fund will make payments of 25% per
annum of the average daily net assets of shareholder accounts as to which
the payee has rendered distribution assistance. During the period the Fund
paid $1,475 in distribution expenses to RMCI.
5. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares for the period November 14, 1994
(commencement of operations) through May 31, 1995 were as follows:
<TABLE>
<CAPTION>
Shares Amount
--------- ------------
<S> <C> <C>
Shares sold 218,209 $2,268,282
Redeemed (116,596) (1,251,282)
--------- -----------
Net Increase 101,613 $1,017,000
========= ===========
</TABLE>
<PAGE> 21
RESERVE EMERGING GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
<TABLE>
<S> <C>
ASSETS
Investment in securities, at value
(cost $1,036,354) $1,204,251
Cash 51,093
Dividends receivable 60
----------
Total Assets 1,255,404
----------
LIABILITIES
Payable for investment securities purchased 14,534
----------
NET ASSETS $1,240,870
==========
NET ASSETS CONSIST OF (NOTE 1)
Capital Stock (Par Value $.001 per share) $ 102
Additional paid in capital 1,007,329
Undistributed net realized gain on investments 65,542
Net unrealized appreciation on investments (Note 1) 167,897
----------
NET ASSETS, at value, applicable to 101,613 outstanding shares
of Beneficial Interest (Note 5) $1,240,870
==========
NET ASSET VALUE, and redemption price per share ($1,240,870 / 101,613) $12.21
=======
Maximum offering price per share (100/95.5 of $12.21) $12.79
=======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 22
RESERVE EMERGING GROWTH FUND
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NOVEMBER 14, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-----------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 755
EXPENSES
Comprehensive fee (Note 3) $8,849
12b-1 Fee (Note 4) 1,475
--------
Total Expenses 10,324
---------
NET INVESTMENT LOSS (9,569)
---------
Realized and Unrealized Gain on Investments
Net realized gain on investment securities: (Note 1)
Proceeds from sales of securities 406,988
Cost of securities sold (341,446) 65,542
--------
Net unrealized appreciation on investments 167,897
---------
Net realized and unrealized gain on investments 233,439
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 223,870
=========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 23
RESERVE EMERGING GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 14, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
-----------------------
<S> <C>
INCREASE IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment loss $ (9,569)
Net realized gain from investments 65,542
Net unrealized appreciation 167,897
----------
Net increase in net assets resulting from
operations 223,870
----------
FROM CAPITAL SHARE TRANSACTIONS (Note 5)
Net proceeds from sales of shares 2,268,282
Cost of shares redeemed (1,251,282)
----------
Net increase in net assets resulting from
share transactions 1,017,000
----------
NET INCREASE IN NET ASSETS 1,240,870
NET ASSETS:
Beginning of period 0
----------
End of period $1,240,870
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> 24
RESERVE EMERGING GROWTH FUND (THE "FUND")
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 - (CONTINUED)
6. FINANCIAL HIGHLIGHTS (FOR ONE SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
NOVEMBER 14, 1994
(COMMENCEMENT OF
OPERATIONS) THROUGH
MAY 31, 1995
--------------------
<S> <C>
Net asset value, beginning of period $ 10.00
--------
Income from investment operations
Net investment loss (.09)
Net realized and unrealized gain 2.30
--------
Total from investment operations 2.21
--------
Net asset value, end of period $ 12.21
========
Total Return 22.10%(2)
RATIOS/SUPPLEMENTAL DATA
------------------------
Net assets in thousands, end of period $1,241
Ratio of expenses to average net assets 1.75%(1)
Ratio of net investment loss to average
net assets (1.62)%(1)
Portfolio turnover rate 43%
</TABLE>
---------------------------------
(1) Annualized
(2) Total return is not annualized, and does not reflect impact of sales load.
<PAGE> 25
RESERVE EMERGING GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MAY 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS VALUE
SHARES (NOTE 1)
------ --------
<S> <C> <C>
BIO-TECHNOLOGY (2.1%)
* Genzyme Corp. 700 $ 25,900
--------
CAPITAL GOODS - DIVERSIFIED (2.4%)
Danaher Corp. 1,000 30,250
--------
CAPITAL GOODS/INDUSTRIAL (12.0%)
* Benchmark Electronics Inc. 1,000 21,500
Magna International Inc. Cl. A 700 26,600
* Quad Systems Corp. 2,300 20,700
* Richey Electronics Inc. 3,500 24,063
* Vishay Intertechnology Inc. 840 55,545
--------
148,408
--------
COMMUNICATION - CONTENT (1.8%)
* Wescott Communications 1,500 22,500
--------
COMMUNICATION - EQUIPMENT (8.9%)
* Anadrigics Inc. 1,500 25,875
E.C.I. Telecom Ltd 900 15,188
* Premisys Communications Inc. 1,000 50,750
Scientific-Atlanta Inc. 1,000 18,625
--------
110,438
--------
COMMUNICATION - NETWORK (5.4%)
* Heartland Wireless Communications Inc. 1,500 34,500
* Intelcom Group Inc. 1,000 8,875
* People's Choice TV Corp. 1,000 24,187
--------
67,562
--------
COMPUTER NETWORKING (7.4%)
* Ascend Communications Inc. 900 34,875
* Lin Television Corp. 400 14,400
* Network Peripherals Inc. 1,000 22,000
* Shiva Corp. 500 19,375
--------
90,650
--------
COMPUTER SOFTWARE (8.1%)
Autodesk Inc. 800 29,600
* Data Translation Inc. 1,000 27,250
* Symantec Corp. 800 18,400
* Tivoli Systems Inc. 700 25,375
--------
100,625
--------
CONSUMER GROWTH (3.7%)
* Conso Products Co. 1,800 25,200
* Electronic Arts Co. 800 20,600
--------
45,800
--------
ELECTRONIC COMPONENTS - SEMICONDUCTOR (16.3%)
* Cirrus Logic Inc. 500 24,625
* Gasonics International Corp. 2,000 49,000
* Integrated Device Technology Inc. 700 30,450
* KLA Instruments Corp. 500 34,875
* Kulicke & Soffa Industries Inc. 1,500 63,750
--------
202,700
--------
</TABLE>
<PAGE> 26
RESERVE EMERGING GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MAY 31, 1995 - (CONTINUED)
<TABLE>
<CAPTION>
COMMON STOCKS (CONTINUED) VALUE
SHARES (NOTE 1)
------ --------
<S> <C> <C>
ENERGY (1.9%)
Cross Timbers Oil Co. 1,500 $ 23,625
----------
HEALTH (5.8%)
* National Dentex Corp. 3,000 39,000
* Pacificare Health Systems Inc. CI.B 500 33,125
----------
72,125
----------
MANAGED CARE (7.2%)
* Healthsource Inc. 700 27,650
* Horizon Healthcare Corp. 1,000 18,250
* Humana Inc. 1,000 21,125
* Phycor Inc. 750 22,594
----------
89,619
----------
MISC. CONSUMER (2.2%)
* On Assignment Inc. 1,500 26,812
----------
RESTAURANTS (2.9%)
* Cheesecake Factory Inc. 700 17,412
* Outback Steakhouse Inc. 600 17,925
----------
35,337
----------
RETAIL - SPECIALTY (5.6%)
* AnnTaylor Stores Corp. 600 12,525
* Staples Inc. 1,000 28,250
* The Sports Authority Inc. 1,500 28,875
----------
69,650
----------
SYSTEM SOFTWARE/CLIENT SERVER (3.4%)
* Informix Corp. 1,000 42,250
----------
TOTAL COMMON STOCKS (Cost $1,036,354) (97.10%) 1,204,251
Other assets, less liabilities (2.90%) 36,619
----------
NET ASSETS ( 100%) $1,240,870
==========
</TABLE>
Value of investments are shown as a percentage of Net Assets
* Non-income producing security.
For Federal income tax purposes the tax basis of investments owned at May
31, 1995 was $1,036,354, the aggregate gross unrealized appreciation for all
investments was $225,397 and aggregate gross unrealized depreciation for all
investments was $57,500.
SEE NOTES TO FINANCIAL STATEMENTS.
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