UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21201
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UBS Technology Partners L.L.C.
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(Exact name of registrant as specified in charter)
1285 Avenue of the Americas, 37th Floor
New York, NY 10019
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(Address of principal executive offices) (Zip code)
Mark D. Goldstein, Esq.
c/o UBS Financial Services, Inc.
1285 Avenue of the Americas
New York, NY 10019
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(Name and address of agent for service)
registrant's telephone number, including area code: 212-713-9036
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Date of fiscal year end: December 31, 2003
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Date of reporting period: December 31, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
UBS TECHNOLOGY PARTNERS, L.L.C.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
YEAR ENDED
DECEMBER 31, 2003
UBS TECHNOLOGY PARTNERS, L.L.C.
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT AUDITORS
YEAR ENDED
DECEMBER 31, 2003
CONTENTS
Report of Independent Auditors ...................................... 1
Statement of Assets, Liabilities and Members' Capital ............... 2
Statement of Operations ............................................. 3
Statements of Changes in Members' Capital ........................... 4
Statement of Cash Flows ............................................. 5
Notes of Financial Statements ....................................... 6
[GRAPHIC OMITTED] ERNST & YOUNG
[GRAPHIC OMITTED] ERNST & YOUNG LLP
5 Times Square
New York, New York 10036-6530
[GRAPHIC OMITTED] Phone: (212) 773-3000
www.ey.com
Report of Independent Auditors
To the Members and Board of Directors of
UBS Technology Partners, L.L.C.
We have audited the accompanying statement of assets, liabilities and members'
capital of UBS Technology Partners, L.L.C. (the "Fund") as of December 31, 2003,
and the related statements of operations and cash flows for the year then ended
and the statements of changes in members' capital for each of the two years in
the period then ended. These financial statements are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements 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 investments owned as of December 31, 2003,
by correspondence with management of the investment funds. 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 audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of UBS Technology Partners, L.L.C.
at December 31, 2003, the results of its operations and its cash flows for the
year then ended and the changes in its members' capital for each of the two
years in the period then ended, in conformity with accounting principles
generally accepted in the United States.
/s/Ernst & Young LLP
New York, New York
February 16, 2004
A Member Practice of Ernst & Young Global
1
UBS TECHNOLOGY PARTNERS, L.L.C.
STATEMENT OF ASSETS, LIABILITIES AND MEMBERS' CAPITAL
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DECEMBER 31, 2003
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ASSETS
Investments in Investment Funds, at value (cost $405,856,539) $525,371,248
Cash and cash equivalents 83,462,733
Receivable from Investment Funds 4,361,778
Interest receivable 8,236
Other assets 2,931
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TOTAL ASSETS 613,206,926
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LIABILITIES
Payables:
Withdrawals payable 108,933,527
Management fee 511,148
Professional fees 263,955
Administration fee 100,011
Other 18,185
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TOTAL LIABILITIES 109,826,826
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NET ASSETS $503,380,100
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MEMBERS' CAPITAL
Represented by:
Net capital contributions $383,865,391
Accumulated net unrealized appreciation on investments 119,514,709
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MEMBERS' CAPITAL $503,380,100
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The accompanying notes are an integral part of these financial statements.
2
UBS TECHNOLOGY PARTNERS, L.L.C.
STATEMENT OF OPERATIONS
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YEAR ENDED DECEMBER 31, 2003
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INVESTMENT INCOME
Interest $ 485,803
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TOTAL INVESTMENT INCOME 485,803
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EXPENSES
Management fee 6,238,054
Professional fees 620,675
Administration fee 609,890
Miscellaneous 175,819
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TOTAL EXPENSES 7,644,438
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NET INVESTMENT LOSS (7,158,635)
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REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS
Net realized gain from investments 29,297,626
Change in net unrealized appreciation/depreciation from investments (4,039,441)
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NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS 25,258,185
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NET INCREASE IN MEMBERS' CAPITAL
DERIVED FROM OPERATIONS $18,099,550
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The accompanying notes are an integral part of these financial statements.
3
UBS TECHNOLOGY PARTNERS, L.L.C.
STATEMENTS OF CHANGES IN MEMBERS' CAPITAL
YEARS ENDED DECEMBER 31, 2003 AND 2002
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UBS FUND
ADVISOR, L.L.C. MEMBERS TOTAL
- -----------------------------------------------------------------------------------------------------------------------
MEMBERS' CAPITAL AT JANUARY 1, 2002 $ 1,865,918 $ 830,307,585 $ 832,173,503
INCREASE (DECREASE) FROM OPERATIONS
Pro rata allocation:
Net investment loss (4,634) (8,683,802) (8,688,436)
Net realized gain from investments 51,200 17,134,061 17,185,261
Change in net unrealized
appreciation/depreciation from investments (65,902) (25,746,902) (25,812,804)
- -----------------------------------------------------------------------------------------------------------------------
NET DECREASE IN MEMBERS' CAPITAL
DERIVED FROM OPERATIONS (19,336) (17,296,643) (17,315,979)
- -----------------------------------------------------------------------------------------------------------------------
MEMBERS' CAPITAL TRANSACTIONS
Proceeds from Members' subscriptions - 29,599,768 29,599,768
Members' withdrawals - (191,389,914) (191,389,914)
Offering costs (64) (27,105) (27,169)
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NET DECREASE IN MEMBERS' CAPITAL
FROM CAPITAL TRANSACTIONS (64) (161,817,251) (161,817,315)
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MEMBERS' CAPITAL AT DECEMBER 31, 2002 $ 1,846,518 $ 651,193,691 $ 653,040,209
- -----------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) FROM OPERATIONS
Pro rata allocation:
Net investment loss (359) (7,158,276) (7,158,635)
Net realized gain from investments 75,194 29,222,432 29,297,626
Change in net unrealized
appreciation/depreciation from investments (72,568) (3,966,873) (4,039,441)
- -----------------------------------------------------------------------------------------------------------------------
NET INCREASE IN MEMBERS' CAPITAL
DERIVED FROM OPERATIONS 2,267 18,097,283 18,099,550
- -----------------------------------------------------------------------------------------------------------------------
MEMBERS' CAPITAL TRANSACTIONS
Proceeds from Members' subscriptions - 9,043,385 9,043,385
Members' withdrawals (1,833,664) (174,938,470) (176,772,134)
Offering costs (1) (30,909) (30,910)
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NET DECREASE IN MEMBERS' CAPITAL DERIVED
FROM CAPITAL TRANSACTIONS (1,833,665) (165,925,994) (167,759,659)
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MEMBERS' CAPITAL AT DECEMBER 31, 2003 $ 15,120 $ 503,364,980 $ 503,380,100
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The accompanying notes are an integral part of these financial statements.
4
UBS TECHNOLOGY PARTNERS, L.L.C.
STATEMENT OF CASH FLOWS
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YEAR ENDED DECEMBER 31, 2003
- ------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in Members' capital derived from operations $ 18,099,550
Adjustments to reconcile net increase in Members' capital derived from operations
to net cash provided by operating activities:
Purchases of investments (153,550,000)
Proceeds from disposition of investments 331,727,537
Net realized gain from investments (29,297,626)
Change in net unrealized appreciation/depreciation from investments 4,039,441
Changes in assets and liabilities:
(Increase) decrease in assets:
Receivable from Investment Funds (4,361,778)
Interest receivable 1,521
Other assets (2,931)
Increase (decrease) in payables:
Management fee (76,919)
Professional fees 46,759
Administration fee (140,275)
Other (10,669)
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NET CASH PROVIDED BY OPERATING ACTIVITIES 166,474,610
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Members' subscriptions 9,043,385
Members' withdrawals (128,226,950)
Manager withdrawals (1,833,664)
Offering costs (30,910)
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NET CASH USED IN FINANCING ACTIVITIES (121,048,139)
Net increase in cash and cash equivalents 45,426,471
Cash and cash equivalents--beginning of year 38,036,262
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CASH AND CASH EQUIVALENTS--END OF YEAR $ 83,462,733
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The accompanying notes are an integral part of these financial statements.
5
UBS TECHNOLOGY PARTNERS, L.L.C.
NOTES TO FINANCIAL STATEMENTS
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DECEMBER 31, 2003
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1. ORGANIZATION
UBS Technology Partners, L.L.C. (the "Fund") (formerly, UBS PW
Technology Partners, L.L.C.) was initially organized as a limited
partnership under the laws of Delaware on December 28, 1998 and was
subsequently reorganized as a limited liability company effective
October 15, 2002. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a closed-end,
non-diversified, management investment company. The Fund's investment
objective is to maximize capital appreciation over the long-term. The
Fund pursues its investment objective by deploying its assets primarily
among a select group of portfolio managers who invest primarily in, or
who have particular knowledge within, the technology sector. Generally,
such portfolio managers conduct their investment programs through
unregistered investment funds (collectively, the "Investment Funds") in
which the Fund invests as a limited partner or member along with other
investors. The Fund commenced operations on April 1, 1999.
The Fund's Board of Directors (the "Directors") has overall
responsibility to manage and control the business affairs of the Fund,
including the exclusive authority to oversee and to establish policies
regarding the management, conduct and operation of the Fund's business.
The Directors have engaged UBS Fund Advisor, L.L.C. (the "UBSFA" or
"Manager") (formerly, PW Fund Advisor, L.L.C.), a Delaware limited
liability company and the Manager of the Fund, to provide investment
advice regarding the selection of Investment Funds and the
responsibility of the day-to-day management of the Fund.
The Manager is an indirect wholly-owned subsidiary of UBS Americas,
Inc., which is a wholly-owned subsidiary of UBS AG, and is registered
as an investment adviser under the Investment Advisers Act of 1940, as
amended.
Initial and additional applications for interests by eligible investors
may be accepted at such times as the Manager may determine and are
generally accepted monthly. The Fund reserves the right to reject any
application for interests in the Fund.
The Fund from time to time may offer to repurchase interests pursuant
to written tenders to Members. These repurchases will be made at such
times and on such terms as may be determined by the Directors, in their
complete and exclusive discretion. The Manager expects that generally,
it will recommend to the Directors that the Fund offer to repurchase
interests from Members twice in each year, near mid-year and year-end.
Members can only transfer or assign their membership interests (i) by
operation of law pursuant to the death, bankruptcy, insolvency or
dissolution of a Member, or (ii) with the written approval of the
Directors, which may be withheld in their sole and absolute discretion.
2. SIGNIFICANT ACCOUNTING POLICIES
a. PORTFOLIO VALUATION
Net asset value of the Fund is determined by or at the direction of the
Manager as of the close of business at the end of any fiscal period in
accordance with the valuation principles set forth below or as may be
determined from time to time pursuant to policies established by the
Directors.
6
UBS TECHNOLOGY PARTNERS, L.L.C.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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DECEMBER 31, 2003
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
a. PORTFOLIO VALUATION (CONTINUED)
The Fund's investments in Investment Funds are subject to the terms and
conditions of the respective operating agreements and offering
memoranda, as appropriate. The Fund's investments in Investment Funds
are carried at fair value as determined by the Fund's pro-rata interest
in the net assets of each Investment Fund. All valuations utilize
financial information supplied by each Investment Fund and are net of
management and performance incentive fees or allocations payable to the
Investment Funds' managers or pursuant to the Investment Funds'
agreements. The underlying investments of each Investment Fund are
accounted for at fair value as described in each Investment Fund's
financial statements.
Distributions received or withdrawn from Investment Funds, whether in
the form of cash or securities, are first applied as a reduction of the
investment's cost.
b. INCOME RECOGNITION
Interest income is recorded on the accrual basis. Realized gains and
losses from Investment Fund transactions are calculated on the
identified cost basis.
c. FUND COSTS
The Fund bears all expenses incurred in its business, including, but
not limited to, the following: all costs and expenses related to
portfolio transactions and positions for the Fund's account; legal
fees; accounting and auditing fees; custodial fees; costs of computing
the Fund's net asset value; costs of insurance; registration expenses;
certain organization costs; due diligence, including travel and related
expenses; expenses of meetings of Directors and Members; all costs with
respect to communications to Members; and other types of expenses
approved by the Directors. Offering costs are charged to capital as
incurred.
d. INCOME TAXES
No provision for the payment of Federal, state or local income taxes
has been provided, since the Fund is not subject to income tax. Each
Member is individually required to report on its own tax return its
distributive share of the Fund's taxable income or loss.
The Fund has reclassified $7,158,635 and $29,297,626 from accumulated
net investment loss and accumulated net realized gain from investments,
respectively, to net capital contributions during the year ended
December 31, 2003. The reclassification was to reflect, as an
adjustment to net capital contributions, the amount of taxable income
or loss that have been allocated to the Fund's Members and had no
effect on net assets.
7
UBS TECHNOLOGY PARTNERS, L.L.C.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of monies invested in a PNC Bank, NA
account which pays money market rates and are accounted for at cost
plus accrued interest which is included in interest receivable on the
Statement of Assets, Liabilities and Members' Capital.
f. REPURCHASE AGREEMENTS
From time to time the Fund may enter into repurchase agreements. In
connection with such transactions it is the Fund's policy that its
custodian take possession of the underlying collateral securities, the
fair value of which exceeds the principal amount of the repurchase
transaction, including accrued interest, at all times. If the seller
defaults, and the fair value of the collateral declines, realization of
the collateral by the Fund may be delayed or limited. As of December
31, 2003 there were no open repurchase agreements.
g. USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the Manager
to make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The Manager believes
that the estimates utilized in preparing the Fund's financial
statements are reasonable and prudent; however, actual results could
differ from these estimates.
3. MANAGEMENT FEE, PERFORMANCE BONUS AND RELATED PARTY TRANSACTIONS
UBSFA provides certain management and administrative services to the
Fund, including, among other things, providing office space and other
support services. In consideration for such services, the Fund pays
UBSFA a monthly management fee (the "Fee") at an annual rate of 1% of
the Fund's net assets, excluding assets attributable to the Manager's
capital account. The Fee is paid to UBSFA out of the Fund's assets and
debited against the Members' capital accounts, excluding the Manager's
capital account. A portion of the fee is paid by UBSFA to its
affiliates.
UBS Financial Services Inc. ("UBS FSI") (formerly, UBS PaineWebber
Inc.), a wholly-owned subsidiary of UBS Americas, Inc., acts as a
placement agent for the Fund, without special compensation from the
Fund, and bears its own costs associated with its activities as
placement agent. Placement fees, if any, charged on contributions are
debited against the contribution amounts, to arrive at a net
subscription amount. The placement fee does not constitute assets of
the Fund.
The net increase (or decrease) in Members' capital derived from
operations (net income or loss) is initially allocated to the capital
accounts of all Members on a pro-rata basis, other than the Fee which
is similarly allocated to all Members other than the Manager as
described above. In accordance with the Limited Liability Company
Agreement, the Manager is then allocated an amount based on the
performance of the Fund (the "Performance Bonus") for the Measurement
Period, as defined in the Confidential Memorandum (i.e., the period
commencing on the admission of a Member to the Fund, and
8
UBS TECHNOLOGY PARTNERS, L.L.C.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
3. MANAGEMENT FEE, PERFORMANCE BONUS AND RELATED PARTY TRANSACTIONS
(CONTINUED)
thereafter each period commencing on the day following the last
Measurement Period and ending generally on the first to occur of (1) a
fiscal year-end or (2) a whole or partial redemption). The Performance
Bonus is calculated separately with respect to each Member.
The Performance Bonus is equal to 1% of the balance of the Member's
capital account at the end of the Measurement Period, provided that
appreciation in the Member's capital account (net of any Performance
Bonus) exceeds the Member's threshold return. The threshold return is
the amount that a Member would have earned for a fiscal year if it had
received an annualized rate of return of 20% on its opening capital
account balance, as adjusted. No Performance Bonus was earned for the
years ended December 31, 2003 and December 31, 2002.
Each Director who is not an "interested person" of the Fund, as defined
by the 1940 Act, receives an annual retainer of $5,000 plus a fee for
each meeting attended. Any Director who is an "interested person" does
not receive any annual or other fee from the Fund. All Directors are
reimbursed by the Fund for all reasonable out of pocket expenses. Total
amounts expensed related to Directors by the Fund for the year ended
December 31, 2003 were $22,634.
PFPC Trust Company (an affiliate of PNC Bank, NA) serves as custodian
of the Fund's assets and provides custodial services for the Fund.
PFPC Inc. (also an affiliate of PNC Bank, NA) serves as Administrator
and Accounting Agent to the Fund and in that capacity provides certain
administrative, accounting, record keeping, tax and investor related
services. PFPC Inc. receives a monthly fee primarily based upon (i) the
average net assets of the Fund, subject to a minimum monthly fee, and
(ii) the aggregate net assets of the Fund and certain other investment
funds sponsored or advised by UBS Americas, Inc. or it affiliates.
Additionally, the Fund reimburses certain out of pocket expenses
incurred by PFPC Inc.
4. SECURITIES TRANSACTIONS
Aggregate purchases and sales of Investment Funds for the year ended
December 31, 2003, amounted to $153,550,000 and $331,727,537,
respectively.
The cost of investments for Federal income tax purposes is adjusted for
items of taxable income allocated to the Fund from the Investment
Funds. The allocated taxable income is reported to the Fund by the
Investment Funds on Schedule K-1. The Fund has not yet received all
such Schedules K-1 for the year ended December 31, 2003.
5. INVESTMENTS
As of December 31, 2003, the Fund had investments in Investment Funds,
none of which were related parties. The Fund's investments are
summarized below based on the investment objectives of the specific
Investment Funds at December 31, 2003.
9
UBS TECHNOLOGY PARTNERS, L.L.C.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
5. INVESTMENTS (CONTINUED)
INVESTMENT OBJECTIVE COST FAIR VALUE
-------------------- ---- ----------
Long/Short Equity $405,856,539 $525,371,248
The following table lists the Fund's investments in Investment Funds as
of December 31, 2003. The agreements related to investments in
Investment Funds provide for compensation to the general
partners/managers in the form of management fees of 1% to 2% (per
annum) of net assets and performance incentive fees or allocations of
20% of net profits earned. The Investment Funds provide for periodic
redemptions, with lock up provisions ranging up to three years from
initial investment. Detailed information about the Investment Funds'
portfolios is not available.
REALIZED AND
UNREALIZED
GAIN/(LOSS) % OF
FROM MEMBERS'
INVESTMENT FUNDS: COST INVESTMENTS FAIR VALUE CAPITAL LIQUIDITY
- ----------------- ---- ----------- ---------- -------- ---------
Andor Technology Perennial Fund, L.P.* $ -- $(7,833,880) $ 53,876,392 10.70% Quarterly
Andor Technology Small Cap Fund, L.P.** 30,000,000 1,155,581 32,293,560 6.42 Quarterly
Artis Technology Qualified Partners, L.P. 31,000,000 3,509,975 34,509,975 6.86 Quarterly
Bowman Capital Founders Fund, L.P. 2,194,539 (273,823) 214,932 0.04 ***
Cavalry Technology, L.P. 30,000,000 5,735,213 35,735,213 7.10 Quarterly
Chilton New Era Partners, L.P. 60,000,000 7,473,690 63,610,523 12.64 Annually
Coatue Qualified Partners, L.P. 40,000,000 (884,583) 40,168,360 7.98 Quarterly
Frontier Science & Technology Fund, L.P. 1,300,000 26,408 1,016,049 0.20 Quarterly
Grange Park Technology Fund, L.P. 38,500,000 499,182 39,951,245 7.94 Quarterly
Intrepid Capital Fund (QP), L.P. 40,312,000 5,965,078 55,889,921 11.10 Quarterly
Kaintuck Opportunity Fund B, LLC 25,000,000 (823,337) 25,450,116 5.06 Annually
Loch Capital Fund I, L.P. 7,550,000 357,740 7,907,740 1.57 Quarterly
Minot Capital II, LP 40,000,000 3,820,559 42,516,730 8.45 Quarterly
Mosaic Technology Fund, L.P. 3,000,000 435,776 3,435,776 0.68 Quarterly
Mosaic Technology Fund II, L.P. 6,000,000 855,691 6,855,691 1.36 Quarterly
PAW Partners, L.P. 16,000,000 5,118,627 40,931,154 8.13 Quarterly
TCS Capital Fund II, L.P. 25,000,000 687,519 25,687,519 5.10 Quarterly
Tiger Technology, L.P. 10,000,000 1,934,591 15,320,352 3.04 Annually
Redeemed Investment Funds -- (2,501,822) -- --
------------ ----------- ------------ ------
-
TOTAL $405,856,539 $25,258,185 525,371,248 104.37
============ ===========
LIABILITIES, LESS OTHER ASSETS (21,991,148) (4.37)
------------ ------
MEMBERS' CAPITAL - NET ASSETS $503,380,100 100.00%
============ ======
<FN>
* Formerly, Pequot Technology Perennial Fund, L.P.
** Initial lock-up is three years from initial investment; approximately one year remaining.
*** The liquidity of the Fund's investments is driven by the Investment Fund's ability to liquidate its Private
Investments.
</FN>
10
UBS TECHNOLOGY PARTNERS, L.L.C.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
DECEMBER 31, 2003
- --------------------------------------------------------------------------------
6. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, the Investment Funds in which the
Fund invests trade various financial instruments and enter into various
investment activities with off-balance sheet risk. These include, but
are not limited to, short selling activities, writing option contracts,
contracts for differences, and equity swaps. The Fund's risk of loss in
these Investment Funds is limited to the value of these investments as
reported by the Fund.
7. FINANCIAL HIGHLIGHTS
The following represents the ratios to average net assets and other
supplemental information for the periods indicated:
PERIOD FROM
APRIL 1, 1999
(COMMENCEMENT
OF OPERATIONS)
YEARS ENDED DECEMBER 31, THROUGH
2003 2002 2001 2000 DECEMBER 31, 1999
---- ---- ---- ---- -----------------
Ratio of net investment loss to
average net assets*** (1.14)% (1.11)% (1.06)% (1.11)% (1.38)%*
Ratio of total expenses to average
net assets*** 1.22% 1.16% 1.15% 1.20% 1.41%*
Portfolio turnover rate 27.53% 26.80% 9.74% -- --
Total return** 3.02% (1.90)% (4.80)% 14.24% 50.96%
Net asset value at end of period $503,380,100 $653,040,209 $832,173,503 $753,481,256 $385,681,474
<FN>
* Annualized.
** Total return assumes a purchase of an interest in the Fund at the beginning of the period and a sale of the Fund
interest on the last day of the period noted, after Performance Bonus to the Manager, and does not reflect the
deduction of placement fees, if any, incurred when subscribing to the Fund. Total returns for a period of less than a
full year are not annualized.
*** The average net assets used in the above ratios are calculated by adding any withdrawals payable effective at the end
of a period to the net assets for such period.
</FN>
8. SUBSEQUENT EVENTS
Effective January 1, 2004, the Fund has redeemed $50,150,000 in
interests from Investment funds.
11
THIS PAGE INTENTIONALLY LEFT BLANK
DIRECTORS AND OFFICERS (Unaudited)
Information pertaining to the Directors and officers of the Fund is set forth
below. The statement of additional information (SAI) includes additional
information about the Directors and is available without charge, upon request,
by calling UBS Financial Service Inc.'s, Alternative Investment Group at
800-580-2359.
- ------------------------------------------------------------------------------------------------------------------------------------
NUMBER OF
PORTFOLIOS
IN FUND
COMPLEX OTHER TRUSTEESHIPS/
TERM OF OFFICE OVERSEEN DIRECTORSHIPS
NAME, AGE, ADDRESS AND AND LENGTH OF PRINCIPAL OCCUPATION(S) BY HELD BY DIRECTOR
POSITION(S) WITH FUND TIME SERVED 1 DURING PAST 5 YEARS DIRECTOR 2 OUTSIDE FUND COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
DISINTERESTED DIRECTORS
- ------------------------------------------------------------------------------------------------------------------------------------
Meyer Feldberg, (61) Term - Dean and Professor of Mgmt of 36 Director of: Primedia, Inc.,
UBS Financial Services Inc. Indefinite Graduate School of Business, Federated Department Stores, Inc.,
1285 Avenue of the Americas Length-since Columbia University Revlon, Inc., Select Medical, Inc.
New York, NY 10019 Inception and SAPPI Ltd.
Director
- ------------------------------------------------------------------------------------------------------------------------------------
George W. Gowen, (74) Term - Law partner for Dunnington, 14 None
UBS Financial Services Inc. Indefinite Bartholow & Miller
1285 Avenue of the Americas Length-since
New York, NY 10019 Inception
Director
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M. Cabell Woodward, Jr., (74) Term - Retired 14 None
UBS Financial Services Inc. Indefinite
1285 Avenue of the Americas Length-since
New York, NY 10019 June 2001
Director
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OFFICER(S) WHO ARE NOT DIRECTORS
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Michael Mascis, (36) Term-Indefinite First Vice President / CFO of N/A N/A
UBS Financial Services Inc. Length- since UBS Financial Services Inc.'s,
1285 Avenue of the Americas July 2002 Alternative Investment Group,
New York, NY 10019 since July 2002. Prior to
Principal Accounting Officer July 2002, Partner Arthur
Andersen LLP
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Mark D. Goldstein, (39) Term-Indefinite Senior Associate General N/A N/A
UBS Financial Services Inc. Length- since Counsel and First Vice
1285 Avenue of the Americas Inception President of UBS Financial
New York, NY 10019 Services Inc., since May 1998.
Secretary
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<FN>
1 For Directors, their terms are for the duration of the term of the Fund, unless
his status as a Director shall be sooner terminated by death, adjudicated
incompetent, voluntarily withdraw, physically unable to perform duties, removed
either by vote or written consent of at least two-thirds of the Directors or
vote or written consent of Members holding not less than two-thirds of the total
number of votes eligible to be cast by all Members.
2 Of the 36 funds/portfolios in the complex, 22 are advised by an affiliate of
UBS Financial Services, Inc., and 14 comprise UBS Financial Services Inc.'s,
Alternative Investment Group of Funds.
</FN>
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(b) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(c) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's board of
directors has determined that M. Cabell Woodward, Jr. is qualified to serve as
an audit committee financial expert serving on its audit committee and that he
is "independent," as defined by this Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$75,000 for 2002 and $77,000 for 2003. Such audit fees include fees
associated with the annual audits and filing of the registrant's Form
N-2 and Form N-SAR.
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $4,000 for 2002 and $4,500 for 2003. Audit-related fees
principally include fees associated with reading and providing comments
on semi-annual reports.
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $160,000 for 2002 and
$144,000 for 2003. Tax fees include fees for tax compliance services.
The 2003 fees also include assisting management in the preparation of
tax estimates.
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are $0
for 2002 and $8,000 for 2003. Fees for all other services include fees
for administrative services associated with preparing the 2003 K-1's
for mailing.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of
Regulation S-X.
The registrant does not have pre-approval policies and procedures.
(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X
are as follows:
(b) 100%
(c) 100%
(d) 100%
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was less than fifty percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen by
another investment adviser), and any entity controlling, controlled by,
or under common control with the adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was approximately $1.9 million for 2002 and approximately
$1.4 million for 2003.
(h) The registrant's audit committee of the board of directors HAS
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
UBS FUND ADVISOR, L.L.C.
PROXY VOTING POLICIES AND PROCEDURES
I. GENERAL GUIDELINES AND POLICY
UBS Fund Advisor, L.L.C. (the "Adviser") votes proxies for each fund (the
"Fund") for which it acts as the Adviser. Certain of the Funds are funds of
funds that invest primarily in unregistered investment vehicles ("Investment
Funds") which have investors other than the Fund. Each of these Funds may invest
a majority of its assets in non-voting securities of Investment Funds. In
addition, Investment Funds typically do not submit matters to investors for
vote. If an Investment Fund submits a matter to a Fund for vote (and the Fund
holds voting interests in the Investment Fund), The Adviser will vote on the
matter in a way that it believes is in the best interest of the Fund and in
accordance with these policies and procedures.
In voting proxies, the Adviser is guided by general fiduciary principles.
The Adviser's goal is to act prudently, solely in the best interest of each
client. The Adviser attempts to consider all factors of its vote that could
affect the value of the investment and will vote proxies in the manner that it
believes will be consistent with efforts to maximize shareholder values.
It is the Adviser's general policy, absent a particular reason to the
contrary, to vote with management's recommendations on routine matters. Other
matters will be voted on a case-by-case basis.
II. CONFLICTS OF INTEREST
In furtherance of the Adviser's goal to vote proxies in the best interests
of clients, the Adviser follows procedures designed to identify and address
material conflicts that may arise between the Adviser's interests and those of
its clients before voting proxies on behalf of such clients.
(1) Procedures for Identifying Conflicts of Interest.
The Adviser relies on the following to seek to identify conflicts of
interest with respect to proxy voting:
The Adviser's employees are under an obligation (i) to be aware of the
potential for conflicts of interest on the part of the Adviser with respect
to voting proxies on behalf of client accounts both as a result of an
employee's personal relationships and due to special circumstances that may
arise during the conduct of the Adviser's business, and (ii) to bring
conflicts of interest of which they become aware to the attention of Ruth
Goodstein and Mark Goldstein.
(2) Procedures for Assessing Materiality of Conflicts of Interest and for
Addressing Material Conflicts of Interest
A. All conflicts of interest identified must be brought to the attention
of Ms. Goodstein and Mr. Goldstein for resolution.
B. Ms. Goodstein and Mr. Goldstein will work with appropriate personnel
of the Adviser to determine whether a conflict of interest is
material. A conflict of interest will be considered material to the
extent that it is determined that such conflict has the potential to
influence the Adviser's decision-making in voting the proxy. All
materiality determinations will be based on an assessment of the
particular facts and circumstances. The Adviser shall maintain a
written record of all materiality determinations.
C. If it is determined that a conflict of interest is not material, the
Adviser may vote proxies notwithstanding the existence of the
conflict.
D. If it is determined that a conflict of interest is material, the
Adviser's Legal Department will work with appropriate personnel of the
Adviser to agree upon a method to resolve such conflict of interest
before voting proxies affected by the conflict of interest. Such
methods may include:
o disclosing the conflict to clients and obtaining their consent
before voting (which consent in the case of a Fund with a board
of directors may be obtained from the Fund's board of directors);
o engaging another party on behalf of the client to vote the proxy
on its behalf;
o engage a third party to recommend a vote with respect to the
proxy based on application of the policies set forth herein; or
o such other method as is deemed appropriate under the
circumstances given the nature of the conflict.
The Adviser shall maintain a written record of the method used to
resolve a material conflict of interest.
III. RECORD KEEPING AND OVERSIGHT
The Adviser shall maintain the following records relating to proxy
voting:
o a copy of these policies and procedures;
o a copy of each proxy form (as voted);
o a copy of each proxy solicitation (including proxy statements)
and related materials with regard to each vote;
o documentation relating to the identification and resolution of
conflicts of interest;
o any documents created by the Adviser that were material to a
proxy voting decision or that memorialized the basis for that
decision; and
o a copy of each written client request for information on how the
Adviser voted proxies on behalf of the client, and a copy of any
written response by the Adviser to any (written or oral) client
request for information on how the Adviser voted proxies on
behalf of the requesting client.
Such records shall be maintained and preserved in an easily accessible
place for a period of not less than five years from the end of the fiscal year
during which the last entry was made on such record, the first two years in the
Adviser's office.
In addition, with respect to proxy voting records for any fund
registered under the Investment Company Act of 1940, the Adviser shall maintain
such records as are necessary to allow such fund to comply with its
recordkeeping, reporting and disclosure obligations under applicable laws, rules
and regulations.
In lieu of keeping copies of proxy statements, the Adviser may rely on
proxy statements filed on the EDGAR system as well as on third party records of
proxy statements and votes cast if the third party provides an undertaking to
provide the documents promptly upon request.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) UBS Technology Partners L.L.C.
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By (Signature and Title)* /s/ Mitchell Tanzman
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Mitchell Tanzman, Co-Chief Executive Officer
(principal executive officer)
Date February 24, 2004
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By (Signature and Title)* /s/ Gregory Brousseau
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Gregory Brousseau, Co-Chief Executive Officer
(principal executive officer)
Date February 24, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, 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 (Signature and Title)* /s/ Mitchell Tanzman
-------------------------------------------------------
Mitchell Tanzman, Co-Chief Executive Officer
(principal executive officer)
Date February 24, 2004
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By (Signature and Title)* /s/ Gregory Brousseau
-------------------------------------------------------
Gregory Brousseau, Co-Chief Executive Officer
(principal executive officer)
Date February 24, 2004
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By (Signature and Title)* /s/ Michael Mascis
-------------------------------------------------------
Michael Mascis, Chief Financial Officer
(principal financial officer)
Date February 24, 2004
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* Print the name and title of each signing officer under his or her signature.