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Filed pursuant to Rule 424(B)(3)
Registration No. 333-7593
Merrill Lynch Investment Partners Inc.
[PICTURE APPEARS HERE]
ML Principal
Protection L.P.
Monthly Statement November 1997
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[LOGO OF MERRILL LYNCH] Merrill Lynch
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ML Principal Protection L.P.
Dear Limited Partner,
The Net Asset Value ("NAV") of ML Principal Protection L.P. (the "Fund")
increased during November. Please see the accompanying summary financial
information for the NAV of your series of Units.
In November, despite the continued economic problems in Asia and their effect on
commodity markets that are sensitive to Asian demand, profitable trading in
currencies, metals and agriculture offset losses in stock index, energy and
interest rate markets.
As global financial markets were fixed on the currency and banking-system
problems afflicting the Japanese and Korean economies, the U.S. dollar rose
throughout November, eventually climbing to a 5-year high against the Japanese
yen on November 26 as currency traders continued to sell the yen in connection
with the closing of the Yamaichi Securities Company, the oldest securities firm
in Japan. In addition to the Japanese yen, the Canadian dollar also trended
downward throughout November, although the Bank of Canada bought Canadian
dollars to defend the Canadian currency at month-end in hopes of stemming its
drop versus the U.S. dollar. The Swiss franc was more volatile than the Japanese
yen and the Canadian dollar, as it surged dramatically on November 7 only to
trend downward for the remainder of the month. Currency trading for the Fund
recorded strong gains overall for the month.
Just as it had done through most of October, gold fell throughout November, and
once again dropped to its lowest levels in over twelve years as the Governor of
the Bank of England said that a new European central bank would not need much
gold in its reserves. Silver prices, however, rose as robust demand from
jewelers and other manufacturers kept United States exchange stockpiles at a 12-
year low. In base metals, copper prices fell 3.6 percent on November 18,
dropping to the lowest level in more than a year, as output is rising at a time
of weaker demand, particularly from Asia. The Fund generated profits in metals
trading during the month.
In November, energy prices generally moved sideways early in the month, before
trending downward at mid-month. Natural gas prices fell as an industry report
showed an unexpected rise in stockpiles, coupled with forecasts for warm weather
which raised expectations for ample supplies in the months ahead. As Iraq
ordered the expulsion of American arms inspectors, crude oil prices rose
briefly, only to fall 3.2% on
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November 21 after Iraq appeared to retreat from a standoff with the United
Nations. Additionally, crude oil, as well as heating oil, fell sharply at month-
end on expectations that OPEC will raise its production output at a time of
substantial world supplies. Trading in natural gas and heating oil resulted in
losses, which offset profits in crude oil.
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The General Partner has determined that there may have been a miscalculation in
the interest credited to the Fund for a period prior to November 1996.
Accordingly, Merrill Lynch is crediting the Fund's investors. For current
Merrill Lynch clients, this credit, which includes compounded interest, will
appear on the December 1997 account statements. The total amount of the
adjustment is approximately $54,000. The General Partner has determined that
interest has been calculated appropriately since November 1996.
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Principal Changes at
John W. Henry & Company, Inc.
The principals of John W. Henry & Company, Inc. ("JWH(R)") are: John W. Henry,
Mark H. Mitchell, David R. Bailin, Elizabeth A.M. Kenton, David M. Kozak, Kevin
S. Koshi, Barry S. Fox, Michael D. Gould, Michael J. Scoyni, Christopher E.
Deakins, Chris J. Lautenslager, Edwin B. Twist, Nancy O. Fox, Wendy B. Goodyear,
Julius A. Staniewicz, Melanie A. Caldwell and Andrew D. Willard.
Ms. Elizabeth A.M. Kenton is also chief administrative officer of JWH.
Additionally Eilene Nicoll, Paul D. Braica, Kevin J. Treacy, Mark W. Sprankel,
Matthew J. Driscoll, Kenneth S. Webster and Michael P. Flannery have been added
as principals of JWH. Mr Sprankel, Mr. Driscoll, Mr. Webster and Mr. Flannery
are assistant vice presidents of JWH. The biographies of Ms. Nicoll, Mr. Braica
and Mr. Treacy are set forth below in full.
Ms. Eilene Nicoll is the vice president of trading administration and a member
of the Investment Policy Committee of JWH. Prior to joining JWH in July 1997,
Ms. Nicoll was a vice president beginning in January 1997 at Commercial
Materials, L.L.C., a newly organized corporation which had not yet begun
operations. She was a vice president and director at West Course Capital, Inc.,
a CTA, from January 1994 until it dissolved in December 1996. At West Course
Capital, Inc., Ms. Nicoll was responsible for operations
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and administration. Prior to joining West Course Capital, Inc., she was a vice
president at REFCO, Inc. from May 1991 to December 1993. While at REFCO, Inc.,
she was also a principal of Nikkhah & Nicoll Asset Management, Inc., a CPO. Ms.
Nicoll was at Shearson Lehman Brothers from January 1987 to December 1990 as
vice president-futures, and subsequently from January 1991 to May 1991 at Moore
Capital Management, Inc. where she was involved in all aspects of the commodity
trading advisor business, including administration, marketing, and allocation of
proprietary capital. From 1984 through 1986 she was an independent discretionary
trader. Ms. Nicoll was employed at Commodities Corporation (USA) N.V. from 1978
to 1984 where she was an assistant vice president. Ms. Nicoll received her B.A.
in psychology from Brooklyn College.
Mr. Paul D. Braica, C.P.A. is the managing director of administration and a
member of the Operating Committee of JWH. He is also treasurer of JWH Financial
Products, Inc. Since joining JWH in April, 1996, Mr. Braica has held positions
of increasing responsibility in internal audit, risk management and
administration. Prior to joining JWH, he was employed with Ernst & Young LLP as
an Auditor from December 1994 to March 1996 and as a Tax Manager from July 1986
to September 1993. From October 1993 to November 1994, he was the director of
fund accounting at Organizer Systems, Inc. Mr. Braica received his B.A. in
Economics from Gettysburg College, his M.B.A. from Rutgers University and his
M.S. in Taxation from Seton Hall University.
Mr. Kevin J. Treacy is a vice president and internal auditor and a member of the
Operating Committee of JWH. Prior to joining JWH in September 1997, Mr. Treacy
was the chief financial officer of Kenmar Advisory Corp. ("Kenmar"), a
registered CPO, from August 1993 to August 1997. While at Kenmar, Mr. Treacy was
also a principal of multiple Kenmar affiliates which were registered as CTAs,
CPOs and an Introducing Broker. At Kenmar, he was responsible for corporate
finance and administration for the firm and its affiliates. Beginning in
September 1986, Mr. Treacy worked for E.S. Jacobs & Co., a corporation
specializing in leveraged buy outs and venture capital investments, where he
held positions of increasing responsibility, lastly as the firm's chief
financial officer until July 1993. He received his Bachelor of Commerce and
Masters in accounting from University College Dublin.
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<TABLE>
<CAPTION>
As of December 1, 1997, the Fund's assets were allocated as follows:
Trading Advisor % Allocation
- --------------- ------------
<S> <C>
John W. Henry & Company, Inc. 7.56
Chesapeake Capital Corporation 7.15
AIS Futures Management LLC 5.80
Trendstat Capital Management, Inc. 5.46
ARA Portfolio Management Company, L.L.C. 5.44
Millburn Ridgefield Corporation 4.57
Quantitative Financial Strategies, Inc. 3.90
Graham Capital Management, L.P. 3.71*
Millennium Global Investments Ltd. 3.18
Range Wise, Inc. 3.16
Hill Financial Group, Ltd. 3.13
Allied Irish Capital Management Ltd. 2.79
Dominion Capital Management, Inc. 2.57
Grinham Managed Futures Pty Ltd. 2.50
Fundamental Futures, Inc. 1.61
Telesis Management, Inc. 1.59
Northfield Trading L.P. 1.28
Cash 34.60**
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100.00
</TABLE>
* Graham Capital Management, L.P. is currently managing the Fund's assets
allocated to it as if Graham were managing 50% more equity than the capital
allocation indicated above.
** Reflects blended allocations of the different series.
1997 Year-to-Date
Gross Total Trading Results*
Through November 30
<TABLE>
<CAPTION>
<S> <C>
Agriculture $224,209
Currencies 3,300,946
Energy (1,814,499)
Financial Instruments 1,356,810
Metals 596,080
Stock Indices 298,236
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Total $3,961,782
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</TABLE>
*Before deduction of any fees and charges
We would like to take this opportunity to remind U.S. taxpayers that we
expect to send 1997 K-1 information in mid-March. Our customer service
representatives are available to assist you with any questions you may have,
and may be reached at our toll-free number in the U.S.: 1-800-765-0995.
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After a difficult period of trading in October, the Fund's performance improved
during November, as the Trading Advisors capitalized on clearer price trends,
particularly in the currency and metals markets.
Sincerely,
John R. Frawley, Jr.
President & Chief Executive Officer
Merrill Lynch Investment Partners Inc.
(General Partner)
FOR THE EXCLUSIVE USE OF INVESTORS IN ML PRINCIPAL PROTECTION L.P. THIS MONTHLY
REPORT IS NOT AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES. AN OFFER CAN ONLY BE MADE BY A CURRENT PROSPECTUS, AS SUPPLEMENTED,
TOGETHER WITH SUMMARY FINANCIAL INFORMATION FOR THE FUND CURRENT WITHIN 60 DAYS.
THESE MATERIALS CONTAIN IMPORTANT INFORMATION ABOUT RISK FACTORS, PERFORMANCE
AND OTHER ASPECTS OF THE FUND AND MUST BE READ CAREFULLY BEFORE INVESTING.
FUTURES TRADING IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. PAST
PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THIS MONTHLY REPORT MUST NOT BE REPRODUCED OR DISTRIBUTED IN ANY MANNER.
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<TABLE>
<CAPTION>
ML Principal Protection L.P.
November 30, 1997
Statement of Changes
in Net Asset Value
<S> <C>
Net Asset Value (956,751.66 Units) at October 31, 1997 $ 99,737,625
Net Income/(Loss) for November 1997 802,145
Redemptions of 8,301.00 Units (888,896)
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Net Asset Value (948,450.66 Units) at November 30, 1997 $ 99,650,874
============
Net Asset Value at November 30, 1997
Series A Units $ 111.50*
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Series B Units $ 111.91*
============
Series C Units $ 106.03*
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Series D Units $ 107.78*
============
Series E Units $ 107.25*
============
Series F Units $ 106.90*
============
Series G Units $ 104.43*
============
Series H Units $ 104.52*
============
Series K Units $ 102.16
============
Series L Units $ 99.43
============
Series M Units $ 101.27
============
</TABLE>
* The Net Asset Value per Unit does not include the annual distributions paid to
Unitholders.
<TABLE>
<CAPTION>
Statement of Income/(Loss)
November
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<S> <C>
Revenues:
Realized Profit/(Loss) $ 950,950
Change in Unrealized Profit/(Loss) 27,354
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Total Trading Results 978,304
Interest Income 458,466
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Total Revenues 1,436,770
Expenses:
Brokerage Commissions 488,695
Administrative Fees 13,963
Allocation of New Profit Share 128,031
Organizational Expenses (4,428)
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Total Expenses 626,261
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Net Income/(Loss) Before Minority Interest 810,509
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Minority Interest (8,364)
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Net Income/(Loss) $ 802,145
============
</TABLE>
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To the best of the knowledge and belief of the undersigned the information
contained in this report is accurate and complete.
/s/ Michael A. Karmelin
Michael A. Karmelin
Chief Financial Officer
Merrill Lynch Investment Partners Inc.
Please notify the following of any address changes:
Merrill Lynch Investment Partners Inc.
Merrill Lynch World Headquarters
South Tower
World Financial Center
New York, New York 10080-6106
1-800-765-0995
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