FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 30, 1998
Commission File Number 0-28350
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
(Exact name of registrant as specified in its charter)
New York 13-3823300
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Smith Barney Futures Management Inc.
390 Greenwich St. - 1st Fl.
New York, New York 10013
(Address and Zip Code of principal executive offices)
(212) 723-5424
(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 for 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.
Yes X No
<PAGE>
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
FORM 10-Q
INDEX
Page
Number
PART I - Financial Information:
Item 1. Financial Statements:
Statement of Financial Condition
at June 30, 1998 and December 31,
1997. 3
Statement of Income and Expenses
and Partners' Capital for the
three and six months ended June 30,
1998 and 1997. 4
Notes to Financial Statements 5 - 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 9 - 11
Item 3. Quantitative and Qualitative
Disclosures of Market Risk 12
PART II - Other Information 13 - 14
2
<PAGE>
PART I
Item 1. Financial Statements
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
STATEMENT OF FINANCIAL CONDITION
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
(Unaudited)
ASSETS:
Equity in commodity futures trading account:
Cash and cash equivalents $ 11,472,260 $ 13,346,392
Net unrealized appreciation (depreciation)
on open future contracts (265,046) 1,079,612
Zero Coupons, $27,322,000 and $29,201,000
principal amount in 1998 and 1997,
respectively, due February 15, 2003 at
market value (amortized cost $20,928,931 and
$21,727,880 in 1998 and 1997, respectively) 21,259,248 21,834,171
------------ ------------
32,466,462 36,260,175
Receivable from SB on sale of Zero Coupons 775,480 575,066
Interest receivable 36,993 48,485
------------ ------------
$ 33,278,935 $ 36,883,726
============ ============
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Accrued expenses:
Commissions $ 92,408 $ 114,693
Management fees 39,700 50,926
Incentive fees 13,904 154,823
Other 35,635 27,024
Redemption payable 1,168,610 939,857
------------ ------------
1,350,257 1,287,323
------------ ------------
Partners' Capital:
General Partner, 376 Unit
equivalents outstanding in 1998 and 1997 439,397 458,348
Limited Partners, 26,946 and 28,825
Units of Limited Partnership Interest
outstanding in 1998 and 1997 , respectively 31,489,281 35,138,055
------------ ------------
31,928,678 35,596,403
------------ ------------
$ 33,278,935 $ 36,883,726
============ ============
See Notes to Financial Statements.
3
<PAGE>
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Income:
Net gains (losses) on trading of commodity futures:
Realized losses on closed positions $ (366,936) $ (1,049,059) $ (260,078) $ (44,089)
Change in unrealized gains/losses on open
positions (591,850) (412,418) (1,344,658) 166,921
------------ ------------ ------------ ------------
(958,786) (1,461,477) (1,604,736) 122,832
Less, brokerage commissions and clearing fees
($9,575, $9,362, $21,820 and $19,052, respectively) (313,512) (356,038) (659,349) (737,273)
------------ ------------ ------------ ------------
Net realized and unrealized losses (1,272,298) (1,817,515) (2,264,085) (614,441)
Gain (loss) on sale of Zero Coupons 9,471 (62,059) 12,956 (81,941)
Unrealized appreciation (depreciation)
on Zero Coupons 167,037 573,639 224,026 (109,673)
Interest income 427,647 492,977 881,651 992,101
------------ ------------ ------------ ------------
(668,143) (812,958) (1,145,452) 186,046
------------ ------------ ------------ ------------
Expenses:
Management fees 122,687 139,466 259,152 291,424
Incentive fees (16,601) (88,256) 13,904 121,506
Other 14,742 17,112 28,918 104,440
------------ ------------ ------------ ------------
120,828 68,322 301,974 517,370
------------ ------------ ------------ ------------
Net loss (788,971) (881,280) (1,447,426) (331,324)
Redemptions (1,168,610) (2,757,319) (2,220,299) (3,332,768)
------------ ------------ ------------ ------------
Net decrease in Partners' capital (1,957,581) (3,638,599) (3,667,725) (3,664,092)
Partners' capital, beginning of period 33,886,259 38,228,211 35,596,403 38,253,704
------------ ------------ ------------ ------------
Partners' capital, end of period $ 31,928,678 $ 34,589,612 $ 31,928,678 $ 34,589,612
============ ============ ============ ============
Net asset value per Unit
(27,322 and 31,625 Units outstanding
at June 30, 1998 and 1997, respectively) $ 1,168.61 $ 1,093.74 $ 1,168.61 $ 1,093.74
============ ============ ============ ============
Net loss per Unit of Limited Partnership
Interest and General Partner Unit equivalent $ (27.85) $ (25.81) $ (50.40) $ (9.94)
============ ============ ============ ============
</TABLE>
See Notes to Finanacial Statements
4
<PAGE>
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(Unaudited)
1. General:
Smith Barney Principal Plus Futures Fund L.P. (the "Partnership") is a
limited partnership which was initially organized on January 25, 1993 under the
partnership laws of the State of New York and was capitalized on April 12, 1995.
No activity occurred between January 25, 1993 and April 12, 1995. The
Partnership engages in the speculative trading of a diversified portfolio of
commodity interests including futures contracts, options and forward contracts.
The commodity interests that are traded by the Partnership are volatile and
involve a high degree of market risk. The Partnership maintains a portion of its
assets in interest payments stripped from U.S. Treasury Bonds under the
Treasury's STRIPS program which payments are due approximately seven years from
the date trading commenced ("Zero Coupons").
Smith Barney Futures Management Inc. is the general partner (the "General
Partner") of the Partnership. Smith Barney Inc. ("SB"), an affiliate of the
General Partner, acts as the commodity broker for the Partnership. All trading
decisions are made for the Partnership by John W. Henry & Company, Inc., Abraham
Trading Co. and Rabar Market Research Inc. (collectively, the "Advisors"). On
November 28, 1997, Smith Barney Holdings Inc. was merged with Salomon Inc to
form Salomon Smith Barney Holdings Inc. ("SSBH"), a wholly owned subsidiary of
Travelers Group. SB is a wholly owned subsidiary of SSBH.
The accompanying financial statements are unaudited but, in the opinion of
management, include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the Partnership's financial
condition at June 30, 1998 and the results of its operations for the three and
six months ended June 30, 1998 and 1997. These financial statements present the
results of interim periods and do not include all disclosures normally provided
in annual financial statements. It is suggested that these financial statements
be read in conjunction with the financial statements and notes included in the
Partnership's annual report on Form 10-K filed with Securities and Exchange
Commission for the year ended December 31, 1997.
Due to the nature of commodity trading, the results of operations for the
interim periods presented should not be considered indicative of the results
that may be expected for the entire year.
5
<PAGE>
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
NOTES TO FINANCIAL STATEMENTS
(continued)
2. Net Asset Value Per Unit:
Changes in net asset value per Unit for the three and six months ended June
30, 1998 and 1997 were as follows:
THREE-MONTHS ENDED SIX-MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
Net realized and unrealized
losses $ (44.92) $ (53.23) $ (78.88) $ (18.52)
Realized and unrealized
gains (losses) on Zero
Coupons 6.24 14.98 8.31 (5.31)
Interest income 15.11 14.44 30.65 28.84
Expenses (4.28) (2.00) (10.48) (14.95)
--------- --------- --------- ---------
Decrease for period (27.85) (25.81) (50.40) (9.94)
Net Asset Value per Unit,
beginning of period 1,196.46 1,119.55 1,219.01 1,103.68
--------- --------- --------- ---------
Net Asset Value per Unit,
end of period $1,168.61 $1,093.74 $1,168.61 $1,093.74
========= ========= ========= =========
3. Trading Activities:
The Partnership was formed for the purpose of trading contracts in a
variety of commodity interests, including derivative financial instruments and
derivative commodity instruments. The results of the Partnership's trading
activity are shown in the statements of income and expenses.
The Customer Agreement between the Partnership and SB gives the
Partnership the legal right to net unrealized gains and losses.
All of the commodity interests owned by the Partnership are held for
trading purposes. The fair value of these commodity interests, including options
thereon, at June 30, 1998 and December 31, 1997 was $(265,046) and $1,079,612,
respectively, and the average fair value during the six and twelve months then
ended, based on monthly calculation, was $426,396 and $1,182,103, respectively.
6
<PAGE>
4. Financial Instrument Risk:
The Partnership is party to financial instruments with off- balance sheet
risk, including derivative financial instruments and derivative commodity
instruments, in the normal course of its business. These financial instruments
include forwards, futures and options, whose value is based upon an underlying
asset, index, or reference rate, and generally represent future commitments to
exchange currencies or cash flows, to purchase or sell other financial
instruments at specific terms at specified future dates, or, in the case of
derivative commodity instruments, to have a reasonable possibility to be settled
in cash or with another financial instrument. These instruments may be traded on
an exchange or over-the-counter ("OTC"). Exchange traded instruments are
standardized and include futures and certain option contracts. OTC contracts are
negotiated between contracting parties and include forwards and certain options.
Each of these instruments is subject to various risks similar to those related
to the underlying financial instruments including market and credit risk. In
general, the risks associated with OTC contracts are greater than those
associated with exchange traded instruments because of the greater risk of
default by the counterparty to an OTC contract.
Market risk is the potential for changes in the value of the financial
instruments traded by the Partnership due to market changes, including interest
and foreign exchange rate movements and fluctuations in commodity or security
prices. Market risk is directly impacted by the volatility and liquidity in the
markets in which the related underlying assets are traded.
Credit risk is the possibility that a loss may occur due to the failure of
a counterparty to perform according to the terms of a contract. Credit risk with
respect to exchange traded instruments is reduced to the extent that an exchange
or clearing organization acts as a counterparty to the transactions. The
Partnership's risk of loss in the event of counterparty default is typically
limited to the amounts recognized in the statement of financial condition and
not represented by the contract or notional amounts of the instruments. The
Partnership has concentration risk because the sole counterparty or broker with
respect to the Partnership's assets is SB.
The General Partner monitors and controls the Partnership's risk exposure
on a daily basis through financial, credit and risk management monitoring
systems and, accordingly believes that it has effective procedures for
evaluating and limiting the credit and market risks to which the Partnership is
subject. These monitoring systems allow the General Partner to statistically
analyze actual trading results with risk adjusted performance indicators and
correlation statistics. In addition, on-line monitoring systems provide account
analysis of futures, forwards and options positions by sector, margin
requirements, gain and loss transactions and collateral positions.
7
<PAGE>
The notional or contractual amounts of these instruments, while not
recorded in the financial statements, reflect the extent of the Partnership's
involvement in these instruments. At June 30, 1998, the notional or contractual
amounts of the Partnership's commitment to purchase and sell these instruments
was $147,180,690 and $148,346,802 respectively, as detailed below. All of these
instruments mature within one year of June 30, 1998. However, due to the nature
of the Partnership's business, these instruments may not be held to maturity. At
June 30, 1998, the fair value of the Partnership's derivatives, including
options thereon, was $(265,046)as detailed below.
JUNE 30, 1998
NOTIONAL OR CONTRACTUAL
AMOUNT OF COMMITMENTS
TO PURCHASE TO SELL FAIR VALUE
Currencies
- - Exchange Traded Contracts $ 1,902,695 $ 12,963,230 $ 26,672
- - OTC Contracts 12,780,711 24,166,269 (476,127)
Energy 340,600 1,320,374 8,069
Grains 1,000,225 1,295,813 (18,824)
Interest Rates U.S. 57,371,750 - 118,531
Interest Rates Non-U.S 70,641,200 92,767,165 51,788
Livestock - 2,156,570 41,970
Metals 1,197,547 10,509,282 (37,702)
Softs 1,302,480 1,390,815 58,889
Indices 643,482 1,777,284 (38,312)
------------ ------------ ------------
Totals $147,180,690 $148,346,802 $ (265,046)
============ ============ ============
At December 31, 1997, the notional or contractual amounts of the
Partnership's commitment to purchase and sell these instruments was $103,740,103
and $104,099,896, respectively, and, the fair value of the Partnership's
derivatives, including options thereon, was $1,079,612, as detailed below.
DECEMBER 31,1997
NOTIONAL OR CONTRACTUAL
AMOUNT OF COMMITMENTS
TO PURCHASE TO SELL FAIR VALUE
Currencies
- - Exchange Traded Contracts $ 1,852,635 $ 13,543,743 $ 130,111
- - OTC Contracts 11,577,189 22,737,095 (43,636)
Energy - 2,330,053 81,274
Interest Rates U.S. 16,567,737 - 99,253
Interest Rates Non-U.S 68,669,047 47,748,762 101,593
Grains - 3,197,466 76,852
Livestock - 1,949,300 55,800
Softs 1,709,720 1,695,191 11,764
Metals 3,314,600 9,844,978 485,359
Indices 49,175 1,053,308 81,242
------------ ------------ ------------
Totals $103,740,103 $104,099,896 $ 1,079,612
============ ============ ============
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources
The Partnership does not engage in the sale of goods or services. Its only
assets are its equity in its commodity futures trading account, consisting of
cash and cash equivalents, Zero Coupons, net unrealized appreciation
(depreciation) on open futures contracts, commodity options and interest
receivable. Because of the low margin deposits normally required in commodity
futures trading, relatively small price movements may result in substantial
losses to the Partnership. While substantial losses could lead to a substantial
decrease in liquidity no such losses occurred in the Partnership's second
quarter of 1998.
The Partnership's capital consists of capital contributions, as increased
or decreased by gains or losses on commodity futures trading and Zero Coupons,
expenses, interest income, redemptions of Units and distributions of profits, if
any.
For the six months ended June 30, 1998, Partnership capital decreased
10.3% from $35,596,403 to $31,928,678. This decrease was attributable to the
redemption of 1,879 Units totaling $2,220,299 coupled with net loss from
operations of $1,447,426 for the six months ended June 30, 1998. Future
redemptions can impact the amount of funds available for investments in
commodity contract positions in subsequent periods.
Operational Risk
The General Partner administers the business of the Partnership through
various systems and processes maintained by SSBH. SSBH has analyzed the impact
of the year 2000 on its systems and processes and modifications for compliance
are proceeding according to plan. All modifications necessary for year 2000
compliance are expected to be completed by the first quarter of 1999. In July
1998, SB participated in successful industry-wide testing coordinated by the
Securities Industry Association and plans to participate in such tests in the
future. The purpose of industry-wide testing is to confirm that exchanges,
clearing organizations, and other securities industry participants are prepared
for the year 2000. The failure of vendors, clients, or regulators to resolve
their own Year 2000 compliance issues in a timely manner could result in
material financial risk to the Partnership.
9
<PAGE>
Results of Operations
During the Partnership's second quarter of 1998, the net asset value per
Unit decreased 2.3% from $1,196.46 to $1,168.61, as compared to an decrease of
2.3% in the second quarter of 1997. The Partnership experienced a net trading
loss before commissions and expenses in the second quarter of 1998 of $958,786.
Losses were recognized in the trading of commodity futures in currencies, U.S.
and non U.S. interest rates, metals, indices and energy products and were
partially offset by gains recognized in grains, livestock and softs. The
Partnership experienced a net trading loss before commissions and expenses in
the second quarter of 1997 of $1,461,477. Losses were recognized in the trading
of commodity futures in currencies, livestock, U.S. and non U.S. interest rates
and energy products and were partially offset by gains recognized in grains,
softs, metals and indices.
Commodity futures markets are highly volatile. Broad price fluctuations
and rapid inflation increase the risks involved in commodity trading, but also
increase the possibility of profit. The profitability of the Partnership depends
on the existence of major price trends and the ability of the Advisors to
identify correctly those price trends. Price trends are influenced by, among
other things, changing supply and demand relationships, weather, governmental,
agricultural, commercial and trade programs and policies, national and
international political and economic events and changes in interest rates. To
the extent that market trends exist and the Advisors are able to identify them,
the Partnership expects to increase capital through operations.
Interest income on 80% of the Partnership's daily average equity
maintained in cash was earned at a 30 day Treasury bill rate. Also included in
interest income is the amortization of original issue discount on the Zero
Coupons based on the interest method. Interest income for the three and six
months ended June 30, 1998 decreased by $65,330 and $110,450, respectively, as
compared to the corresponding periods in 1997. The decrease in interest income
is primarily due to the effect of redemptions on the Partnership's Zero Coupons
and equity maintained in cash.
Brokerage commissions are calculated on the adjusted net asset value on
the last day of each month and, therefore, vary according to trading performance
and redemptions. Accordingly, they must be compared in relation to the
fluctuations in the monthly net asset values. Commissions and clearing fees for
the three and six months ended June 30, 1998 decreased by $42,526 and $77,924,
respectively, as compared to the corresponding periods in 1997.
All trading decisions for the Partnership are currently being made by the
Advisors. Management fees are calculated as a percentage of the Partnership's
net asset value as of the end of each month and are affected by trading
performance and redemptions. Management fees for the three and six months ended
June 30, 1998
10
<PAGE>
decreased by $16,779 and $32,272 respectively, as compared to the
corresponding periods in 1997.
Incentive fees are based on the new trading profits generated by each
Advisor as defined in the advisory agreements between the Partnership, the
General Partner and each Advisor. Trading performance for the three and six
months ended June 30, 1998 resulted in 0 incentive fees. Trading performance for
the three and six months ended June 30, 1997 resulted in incentive fees of $0
and $121,506, respectively.
11
<PAGE>
Item. 3 Quantitative and Qualitative Disclosures of Market Risk
The fund is subject to SEC Financial Reporting Release No. 48,
Quantitative and Qualitative Disclosures of Market Risk and will comply with the
disclosure and reporting requirements in its form 10K as of December 31, 1998.
12
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Between May 1994 and the present, Salomon Brothers Inc. ("SBI"), SB and
The Robinson Humphrey Company, Inc. ("R- H"), all currently subsidiaries
of Salomon Smith Barney Holdings Inc. ("SSBHI"), along with a number of
other broker-dealers, were named as defendants in approximately 25
federal court lawsuits and two state court lawsuits, principally
alleging that companies that make markets in securities traded on NASDAQ
violated the federal antitrust laws by conspiring to maintain a minimum
spread of $.25 between the bid and asked price for certain securities.
The federal lawsuits and one state court case were consolidated for
pre-trial purposes in the Southern District of New York in the fall of
1994 under the caption In re NASDAQ Market- Makers Antitrust Litigation,
United States District Court, Southern District of New York No.
94-CIV-3996 (RWS); M.D.L. No. 1023. The other state court suit, Lawrence
A. Abel v. Merrill Lynch & Co., Inc. et al.; Superior Court of San
Diego, Case No. 677313, has been dismissed without prejudice in
conjunction with a tolling agreement.
In consolidated action, the plaintiffs purport to represent a class of
persons who bought one or more of what they currently estimate to be
approximately 1,650 securities on NASDAQ between May 1, 1989 and May 27,
1994. They seek unspecified monetary damages, which would be trebled
under the antitrust laws. The plaintiffs also seek injunctive relief, as
well as attorney's fees and the costs of the action. (The state cases
seek similar relief.) Plaintiffs in the consolidated action filed an
amended consolidated complaint that defendants answered in December
1995. On November 26, 1996, the Court certified a class composed of
retail purchasers. A motion to include institutional investors in the
class and to add class representatives was granted. In December 1997,
SBI, SB and R-H, along with several other broker-dealer defendants,
executed a settlement agreement with the plaintiffs. This agreement has
been preliminarily approved by the U.S. District Court for the Southern
District of New York but is subject to final approval.
On July 17, 1996, the Antitrust Division of the Department of Justice
filed a complaint against a number of firms that act as market makers in
NASDAQ stocks. The complaint basically alleged that a common
understanding arose among NASDAQ market makers which
13
<PAGE>
worked to keep quote spreads in NASDAQ stocks artificially wide.
Contemporaneous with the filing of the complaint, SBI, SB and other
defendants entered into a stipulated settlement agreement, pursuant to
which the defendants would agree not to engage in certain practices
relating to the quoting of NASDAQ securities and would further agree to
implement a program to ensure compliance with federal antitrust laws and
with the terms of the settlement. In entering into the stipulated
settlement, SBI and SB did not admit any liability. There are no fines,
penalties, or other payments of monies in connection with the
settlement. In April 1997, the U.S. District Court for the Southern
District of New York approved the settlement. In May 1997, plaintiffs in
the related civil action (who were permitted to intervene for limited
purposes) appealed the district court's approval of the settlement. The
appeal was argued in March 1998 and was affirmed in August 1998.
The Securities and Exchange Commission ("SEC") is also conducting a
review of the NASDAQ marketplace, during which it has subpoenaed
documents and taken the testimony of various individuals including SBI
and SB personnel. In July 1996, the SEC reached a settlement with the
National Association of Securities Dealers and issued a report detailing
certain conclusions with respect to the NASD and the NASDAQ market.
In December 1996, a complaint seeking unspecified monetary damages was
filed by Orange County, California against numerous brokerage firms,
including SB, in the U.S. Bankruptcy Court for the Central District of
California. Plaintiff alleged, among other things, that the defendants
recommended and sold to plaintiff unsuitable securities. The case
(County of Orange et al. v. Bear Stearns & Co. Inc. et al.) had been
subject to a stay by agreement of the parties which will expire on
August 21, 1998.
Item 2. Changes in Securities and Use of Proceeds - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other Information - None
Item 6. (a) Exhibits - None
(b) Reports on Form 8-K - None
14
<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.
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
By: Smith Barney Futures Management Inc.
(General Partner)
By: /s/ David J. Vogel, President
David J. Vogel, President
Date: 8/14/98
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: Smith Barney Futures Management Inc.
(General Partner)
By: /s/ David J. Vogel, President
David J. Vogel, President
Date: 8/14/98
By /s/ Daniel A. Dantuono
Daniel A. Dantuono
Chief Financial Officer and
Director
Date: 8/14/98
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000944697
<NAME> SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 11,472,260
<SECURITIES> 20,994,202
<RECEIVABLES> 812,473
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 33,278,935
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 33,278,935
<CURRENT-LIABILITIES> 1,350,257
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 31,928,678
<TOTAL-LIABILITY-AND-EQUITY> 33,278,935
<SALES> 0
<TOTAL-REVENUES> (1,145,452)
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 301,974
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,447,426)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,447,426)
<EPS-PRIMARY> (50.40)
<EPS-DILUTED> 0
</TABLE>
