1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/ x / Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
[Fee Required]
/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
[No Fee Required]
For the Fiscal Year Ended: December 31, 1994
Commission File Number: 0-14738
THE FUTURES DIMENSION FUND
(Exact name of registrant as specified in its charter)
Illinois 36-3428400
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o HEINOLD ASSET MANAGEMENT, INC.
440 S. LaSalle
20th Floor
Chicago, Illinois 60605
(Address of principal executive offices)
Registrant's telephone number, including area code:
(312) 663-7900
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Assignee Units
Indicate by check mark whether the registrant (1) 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 _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulations S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
The registrant is a limited partnership and, accordingly, has no voting stock
held by non-affiliates or otherwise.
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PART I
Item 1. Business
(a) General development of business
The Futures Dimension Fund (the "Partnership") is a limited
partnership organized on January 31, 1986, pursuant to a Limited Partnership
Agreement (the "Limited Partnership Agreement") and under the Uniform Limited
Partnership Act of the State of Illinois, and funded through an offering of
Limited Partnership Assignee Units (the "Units"). On July 31, 1987, the
Partnership elected to be governed under the Illinois Revised Uniform Limited
Partnership Act. Each Unit represents the assignment of one unit of limited
partnership interest in the Partnership. Limited Partners and holders of
Limited Partnership Assignee Units are collectively referred to herein as
"Unitholders." The Partnership engages in speculative trading of futures and
forward contracts under the direction of multiple trading advisors.
The public offering resulted in the sale of 1,001,410 Units
and trading began on June 18, 1986. The offering was registered under the
Securities Act of 1933, as amended, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Selling Agent") acted as the selling agent.
Heinold Asset Management, Inc., a Delaware corporation, is the General
Partner of the Partnership (the "General Partner") and performs various
administrative services for the Partnership. The General Partner is a
subsidiary of Geldermann, Inc., an Illinois corporation ("Geldermann"). Until
December 12, 1994, Geldermann was an independent operating subsidiary of
ConAgra, Inc., a Delaware corporation with headquarters in Omaha, Nebraska. On
that date, Geldermann was acquired by E. D. & F. Man International Inc.
(formerly known as E. D. & F. Man International Futures Inc.), a New York
corporation registered as a futures commission merchant with headquarters in
New York, New York.
Pursuant to a Customer Agreement (the "Customer Agreement"), Geldermann
acts as the commodity broker for the Partnership. The Customer Agreement may
be terminated by the Partnership or Geldermann upon 30 days' notice. The
General Partner invested $987,000 in the Partnership at the outset of trading;
after reflecting redemptions of $500,159, $271,597, $71,116, $330,991 and
$83,490 on September 1, 1987, July 1, 1988, October 1, 1988, September 1, 1991
and September 30, 1994, respectively, this investment was worth $110,121 as of
December 31, 1994.
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Under the terms of the Customer Agreement, the Partner-ship will not
pay brokerage commissions on the basis of the number of trades made on its
behalf, but will instead pay Geldermann a monthly brokerage fee of 0.8333% of
the Partnership's month-end Net Assets, as defined, (a 10% annual rate).
From inception until March 1, 1994, the Partnership's trading manager
was Commodities Corporation (U.S.A.) N.V. (the "Initial Trading Manager"), a
corporation formed under the laws of the Netherlands Antilles in June 1983, and
a wholly-owned subsidiary of Commodities Corporation, originally a Delaware
corporation formed in 1969 and reincorporated under the laws of the Cayman
Islands in 1980. Neither Commodities Corporation nor the Initial Trading
Manager is affiliated with the General Partner, Geldermann or the Selling
Agent. The Initial Trading Manager provided futures and forward trading advice
to the Partnership pursuant to a management contract which was terminated, upon
the resignation of the Initial Trading Manager, effective March 1, 1994.
Pursuant to a trading manager agreement with the Partnership (the
"Management Agreement"), the General Partner assumed the duties of the trading
manager of the Partnership effective March 1, 1994 (the "Trading Manager").
Under the terms of the Management Agreement, the Trading Manager's duties
include, among other things, selecting, hiring, monitoring and replacing
trading advisors, allocating and reallocating assets among the trading advisors
and terminating and engaging additional or replacement trading advisors.
The Partnership's assets were initially allocated among nine different
Trading Advisors (the "Initial Trading Advisors"), selected by the General
Partner on the recommendation of the Initial Trading Manager. One of the
Initial Trading Advisors, I.C.S.C., Inc., ceased trading on behalf of the
Partnership during 1987 and the Partnership added a new trading advisor,
Tiverton Trading Incorporated, on November 1, 1987. Until March 1, 1994, five
trading advisors traded on behalf of the Partnership: Blenheim Investments,
Inc.; Knightsbridge Capital Management; Mark J. Walsh & Co.; Princeton Paris
Research Corporation; and Reynwood Trading Corporation. The Initial Trading
Manager terminated the Advisory Agreements with the above-referenced trading
advisors effective February 28, 1994.
Heinold Asset Management, Inc., the Trading Manager, retained ARA
Portfolio Management Company, LaSalle Portfolio Management, Inc., Sunrise
Capital Management Inc. and Welton Investment Systems Corporation, effective
March 7, 1994, March 8, 1994, March 7, 1994 and March 1, 1994, respectively,
to act as the trading advisors for the Partnership. On June 6, 1994, Parthenon
Futures Management, Inc. and Michael Tym, Jr. were
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retained as trading advisors for the Partnership. The Advisory Agreement with
Welton Investment Systems Corporation was terminated on September 15, 1994 and
Lawless Commodities, Inc. was retained as a trading advisor effective January
24, 1995.
As of January 31, 1995, the following were the trading advisors for the
Partnership: LaSalle Portfolio Management, Inc., Sunrise Capital Management
Inc., Parthenon Futures Management, Inc., Michael Tym, Jr. and Lawless
Commodities, Inc. (the "Trading Advisors").
The Initial Trading Manager, which itself did not direct any trading on
behalf of the Partnership, advised the General Partner on the selection of the
Initial Trading Advisors and, among other things, monitored the performance of
the trading advisors and consulted with the General Partner in reviewing
certain aspects of the Trading Advisors' performance through February 28, 1994.
The Initial Trading Manager was responsible for providing satisfactory
replacement trading advisors throughout the term of the management contract,
should a replacement be required. The Trading Advisors are each allocated a
percentage of the Partnership's assets for trading. The General Partner
intends at all times to retain multiple trading advisors for the Partnership
that, collectively, will trade a diverse group of futures and forward contracts
pursuant to a mixture of systematic and discretionary trading approaches and
technical and fundamental analyses.
The Initial Trading Manager purchased 500 Units prior to the time the
Partnership commenced trading, which it agreed not to redeem so long as it
acted as the Initial Trading Manager. These Units, valued at $84,720, were
redeemed on March 1, 1994.
Prior to March 1, 1994, the Partnership paid the Initial Trading
Manager: (i) a monthly management fee of 1/2 of 1% of the month-end Net Assets
(as defined in the Limited Partnership Agreement, subject to certain
adjustments) of the Partnership; and (ii) a quarterly incentive fee of 20% of
New Appreciation, as defined in the management contract, as of the end of each
calendar quarter. The Partnership paid no fees to the trading advisors, who
were compensated solely by the Initial Trading Manager.
Effective March 1, 1994, each Trading Advisor is paid a management and
incentive fee by the Partnership at the rates negotiated at arm's-length on
behalf of the Partnership by the Trading Manager. At December 31, 1994, each
Trading Advisor receives: (i) a monthly management fee equal to 0.167 of 1% (a
2% annual rate) of the month-end Net Assets of the Partnership allocated to the
management of the trading advisors; and (ii) a quarterly incentive fee equal to
20% of any new trading profit, as defined in the Advisory Agreement with each
of the Trading
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Advisors, recognized with respect to the assets of the Partnership allocated to
each of the Trading Advisors. The Trading Manager will receive no compensation
for its services to the Partnership.
Regulation
Under the Commodity Exchange Act, as amended (the "Act"), futures
exchanges and futures trading are subject to regulation by the Commodity
Futures Trading Commission (the "CFTC"). The National Futures Association
("NFA"), a "registered futures association" under the Act, is the only
non-exchange self-regulatory organization for futures industry professionals.
The CFTC has delegated to the NFA responsibility for the registration of
"commodity trading advisors," "commodity pool operators," "futures commission
merchants," "introducing brokers" and their respective associated persons and
"floor brokers." The Act requires "commodity pool operators," such as the
General Partner, "commodity trading advisors," such as the Trading Advisors,
and commodity brokers or a "futures commission merchant," such as Geldermann,
to be registered and to comply with various reporting and record keeping
requirements. The General Partner, the Trading Advisors and Geldermann are all
members of NFA. The CFTC may suspend a commodity pool operator's or commodity
trading advisor's registration if it finds that its trading practices tend to
disrupt orderly market conditions or in certain other situations. In the event
that the registration of the General Partner as a commodity pool operator or
any of the Trading Advisors' registration as commodity trading advisors were
terminated or suspended, the General Partner and any of the Trading Advisors,
respectively, would be unable to continue to manage the business of the
Partnership. Should the General Partner's registration be suspended,
termination of the Partnership might result.
As members of NFA, the General Partner, the Trading Advisors and
Geldermann are subject to NFA standards relating to fair trade practices,
financial condition and customer protection. As the self-regulatory body of
the futures industry, the NFA promulgates rules governing the conduct of
futures industry professionals and disciplines those professionals which do not
comply with such standards.
In addition to such registration requirements, the CFTC and certain
futures exchanges have established limits on the maximum net long or net short
position which any person may hold or control in particular commodities. The
CFTC has adopted a rule requiring all domestic futures exchanges to submit for
approval speculative position limits for all futures contracts traded on such
exchanges. Many exchanges also limit the changes in futures contract prices
that may occur during a single trading day. The Partnership may trade on
foreign commodity exchanges
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which are not subject to regulation by any United States government agency.
(b) Financial information about industry segments
The Partnership's business constitutes only one segment, speculative
trading of futures and forward contracts, for financial reporting purposes.
The Partnership does not engage in sales of goods and services. The
Partnership's revenue, operating results and total assets for each of the five
fiscal years in the period ended December 31, 1994 are set forth under "Item 6.
Selected Financial Data."
(c) Narrative description of business
(1) See Items 1(a) and (b) above.
(i) through (xii) - not applicable.
(xiii) - the Partnership has no employees.
(d) Financial information about foreign and domestic operations and
export sales
The Partnership does not engage in sales of goods or services. See
"Item 1(b). Business - Financial information about industry segments."
Item 2. Properties
The Partnership does not own any properties. Under the terms of the
Limited Partnership Agreement, the General Partner performs the following
services for the Partnership:
(1) Manages the business of the Partnership. Pursuant to this
authority, the General Partner, as Trading Manager, has entered into a
Management Agreement with the Partnership (under which the Trading Advisors
have complete discretion with respect to determination of the Partnership's
trading decisions pursuant to the Advisory Agreement between each Trading
Advisor and the Partnership) and a Customer Agreement with Geldermann (pursuant
to which Geldermann, Inc. executes all trades on behalf of the Partnership
based on the instructions of the Partnership's Trading Advisors).
(2) Maintains the Partnership's books and records, which Unitholders
or their duly authorized representatives may inspect during normal business
hours for any proper purpose upon reasonable written notice to the General
Partner.
(3) Furnishes each Unitholder with a monthly statement describing the
performance of the Partnership, which sets forth
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aggregate management fees, incentive fees, brokerage commissions and other
expenses incurred or accrued by the Partnership during the month.
(4) Forwards annual audited financial statements (including a
statement of financial condition and statement of operations) to each
Unitholder.
(5) Provides to each Unitholder tax information necessary for the
preparation of his annual federal income tax return and such other information
as the CFTC may by regulation require.
(6) Performs secretarial and other clerical responsibilities and
furnishes office space, equipment and supplies as may be necessary for
supervising the affairs of the Partnership.
(7) Administers the redemption of Units.
Item 3. Legal Proceedings
The General Partner is not aware of any pending legal proceedings to
which the Partnership is a party or to which any of its property is subject.
In the ordinary course of its business, Geldermann is involved in numerous
legal actions, some of which seek substantial damages. In view of the number
and diversity of the claims, the number of jurisdictions involved, and the
inherent difficulty of predicting the outcome of litigation, Geldermann cannot
state what the eventual outcome of these pending claims will be. As a matter
of policy, Geldermann vigorously defends civil litigation, reparations or
arbitration proceedings pending against it, and in all proceedings currently so
pending believes it has defenses which are factually and legally sound.
Geldermann is contesting the allegations of each complaint and believes that
there are meritorious defenses in most of the lawsuits.
Although the CFTC's staff's interpretation that any matter filed by the
CFTC against a registrant is, on its face (even though it has not been
litigated), material litigation which has to be disclosed, Geldermann takes
exception to this. Notwithstanding the preceding, Geldermann herewith discloses
a CFTC Enforcement Action titled In the Matter of Thomas Collins, et al., CFTC
Docket No. 94-13.
The Complaint in this case alleges that Geldermann, in 1986, carried
and cleared accounts in joint tenancy for a Mid-America local floor trader
and/or ten individuals with whom the floor trader maintained a separate joint
account with each of the ten individuals. None of the afore-mentioned persons
were ever employees of Geldermann. Geldermann's function was only that of
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clearing broker. Over a period of approximately four years, at the direction
of the account holder(s), Geldermann transferred certain positions amongst and
between the accounts. It is those transfers that the CFTC is alleging are
non-competitive, fictitious transactions. The CFTC's complaint also alleges
that Geldermann failed to properly supervise the employees who accepted the
transfer instructions from the account holder(s). Geldermann takes exception
to the CFTC's allegation and is vigorously defending this litigation.
In any event, no pending proceeding affects Geldermann's ability to
provide its service to the Partnership. Neither the Trading Advisors nor the
Partnership have any connection with this litigation.
Item 4. Submission of Matters to a Vote
of Security Holders
None.
PART II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters
(a) Market Information
There is no trading market for the Units, and none is likely to
develop. They are transferable only after written notice has been given to and
approved by the General Partner. Units may be redeemed as of the first day of
any month after the Partnership commences trading, upon ten days' written
notice at their Net Asset Value (as defined in the Limited Partnership
Agreement) as of the end of the immediately preceding month, without redemption
charge or penalty, as provided in the Limited Partnership Agreement. In the
event that all Units for which redemption is requested cannot be redeemed as of
any redemption date, Units of limited partners will be redeemed in the order
that requests for redemption have been received by the General Partner.
(b) Holders
As of January 1, 1995, there were 442 holders of Units.
(c) Dividends
No distributions or dividends have been made on the Units, and the
General Partner has no present intention to make any.
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Item 6. Selected Financial Data
The following is a summary of operations and total assets of the
Partnership for each of the five fiscal years in the period ended December 31,
1994.
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Fiscal Year Fiscal Year Fiscal Year Fiscal Year Period
Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31,
1994 1993 1992 1991 1990
------------ ------------ ----------- ------------ ------------
Net trading gain (loss)
on futures and
forward contracts $ 460,008 $ 3,406,786 $ 263,807 $ 2,736,403 $ 2,700,079
Interest income 307,314 226,370 391,251 692,442 839,051
----------- ------------ ----------- ----------- -----------
Total income (loss) 767,322 3,633,156 655,058 3,428,845 3,539,130
Brokerage commissions 735,811 869,772 1,047,306 1,371,702 1,215,312
Management fee 190,485 517,992 620,402 810,207 714,885
Incentive fee 287,295 249,920 0 0 69,961
Other administrative
expenses 35,449 57,027 43,602 92,150 111,225
----------- ------------ ----------- ----------- -----------
Total expenses 1,249,040 1,694,711 1,711,310 2,274,059 2,111,383
----------- ------------ ----------- ----------- -----------
Income (loss) before
equity in income
(loss) of Advisors
L.P., net (481,718) N/A N/A 1,154,786 1,427,747
----------- ------------ ----------- ----------- -----------
Equity in income (loss)
of Advisors L.P.,
net at allocated
expenses N/A N/A N/A (1,315,153) 1,484,666
----------- ------------ ----------- ----------- -----------
Net income (loss) $ (481,718) $ 1,938,445 $(1,056,252) $ (160,367) $ 2,912,413
=========== ============ =========== =========== ===========
Net income (loss)
allocated to
General Partner $ (17,301) $ 43,094 $ (14,044) $ (33,009) $ 68,963
=========== ============ =========== =========== ===========
Net income (loss)
allocated to
limited partners $ (464,417) $ 1,895,351 $(1,042,208) $ (127,358) $ 2,843,450
=========== ============ =========== =========== ===========
Increase (decrease) in
Net Asset Value for
a Unit outstanding
throughout each year/
period $ (9.61) $ 38.79 $ (12.64) $ .75 $ 20.58
=========== ============ =========== =========== ===========
Total assets $ 7,369,654 $ 9,066,332 $ 8,776,900 $16,554,929 $20,382,145
=========== ============ =========== =========== ===========
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Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Reference is made to "Item 6. Selected Financial Data" and "Item 8.
Financial Statements and Supplementary Data." The information contained therein
is essential to, and should be read in conjunction with, the following analysis.
Capital Resources
The Partnership does not intend to raise any additional capital through
borrowing and, because it is a closed-end fund, it cannot sell any more Units
unless it undertakes a new public offering, which would require another
registration with the Securities and Exchange Commission. Due to the nature of
the Partnership's business, it will make no significant capital expenditures,
and substantially all its assets are and will be represented by cash, United
States Treasury securities and investments in futures and forward contracts.
Liquidity
Many United States commodity exchanges limit fluctuations in futures
contract prices during a single day by regulations referred to as "daily price
fluctuation limits" or "daily limits." During a single trading day no trades
may be executed at prices beyond the daily limit. Once the price of a futures
contract has reached the daily limit for that day, positions in that contract
can neither be taken nor liquidated. Futures prices have occasionally moved the
daily limit for several consecutive days with little or no trading. Similar
occurrences could prevent the Partnership from promptly liquidating unfavorable
positions and subject the Partnership to substantial losses which could exceed
the margin initially committed to such trades. In addition, even if futures
prices have not moved the daily limit, the Partnership may not be able to
execute futures trades at favorable prices if little trading in such contracts
is taking place. Other than these limitations on liquidity, which are inherent
in the Partnership's futures trading operations, the Partnership's assets are
highly liquid and are expected to remain so. Generally, forward contracts can
be offset at the discretion of the Trading Advisor. However, if the market is
not liquid, it could prevent the timely closeout or offset of an unfavorable
position until the delivery date, regardless of the changes in their value or
the Trading Advisor's investment strategies.
Results of Operations
Operating results showed a loss for the fiscal year ended December 31,
1994, a gain for the fiscal year ended
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December 31, 1993 and a loss for the fiscal year ended December 31, 1992.
The Net Asset Value per Unit as of December 31, 1994 and December 31,
1993 was $180.23 and $189.84, respectively.
The Partnership had a net loss for the fiscal year ended December 31,
1994 as the Partnership's unprofitable trading in the currency, financial
instruments and agricultural sectors more than offset its profitable trading in
the coffee and cotton sectors.
The Partnership had a net gain for the fiscal year ended December 31,
1993 as the Partnership's profitable trading in the currency, financial
instruments, grains, meats and energy sectors more than offset the Partnership's
unprofitable trading in the metals sector.
The Partnership had a net loss for the fiscal year ended December 31,
1992 as the Partnership's profitable trading in the currency and financial
instruments sectors was more than offset by the Partnership's unprofitable
trading in the grains, metals, meats and energy sectors.
Inflation is not a significant factor in the Partnership's
profitability.
Item 8. Financial Statements and Supplementary Data
Financial statements are listed on page F-l of this report.
The supplementary financial information specified by Item 302 of
Regulation S-K is not applicable.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or executive officers. The Partnership
is managed by its General Partner. There are no "significant employees" of the
Partnership. Trading decisions for the Partnership are made by the Trading
Advisors and monitored by the Trading Manager.
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Item 11. Executive Compensation
The Partnership has no directors or officers. The General Partner
performs the services described in "Item 2. Properties" herein. Geldermann acts
as the Partnership's commodity broker pursuant to the Customer Agreement
described in "Item 1(a). Business - General development of business."
The General Partner will participate in any appreciation in the net
assets of the Partnership in proportion to its investment in it.
Item 12. Security Ownership of Certain Beneficial Owners
and Management
(a) Security ownership of certain beneficial owners
The Partnership knows of no person who owns beneficially more than 5% of the
Units.
(b) Security ownership of management
Under the terms of the Limited Partnership Agreement, the Partnership's
affairs are managed by the General Partner and the Trading Advisors have
discretionary authority over the Partnership's futures and forward trading,
which is monitored by the General Partner as Trading Manager. The General
Partner owned 1,111 Unit-equivalents valued at $110,121 as of December 31, 1994,
1.5% of the Partnership's total equity. The Initial Trading Manager owned 500
Units as of December 31, 1993 valued at $94,920. These Units were redeemed on
March 1, 1994 for $84,720.
(c) Changes in control
None.
Item 13. Certain Relationships and Related Transactions
See "Item 11. Executive Compensation" and "Item 12. Security Ownership
of Certain Beneficial Owners and Management."
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements
See Index to Financial Statements, infra.
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(a)(2) Financial Statement Schedules
All Schedules are omitted for the reason that they are not required, are
not applicable, or because equivalent information has been included in the
financial statements or the notes thereto.
(a)(3) Exhibits as required by Item 601 of Regulation S-K
(3) Articles of Incorporation and By-laws
a. Limited Partnership Agreement dated as of January 31, 1986, and
amended as of April 1, 1986.
b. Certificate of Limited Partnership of the Partnership as filed with
the Cook County Recorder of Deeds on January 31, 1986.
The above exhibits are incorporated herein by reference from the the
Partnership's Registration Statement on Form S-1, file no. 33-3514.
(10) Material Contracts
a. Customer Agreement between the Partnership and Geldermann.
b. Management Contract between the Partnership, Commodities Corporation
(U.S.A.) N.V. and the Trading Advisors.
c. Assignment Agreement among the Partnership, the General Partner,
Heinold Asset Management Service Corporation and each Unitholder.
d. Guarantor and Net Worth undertaking of Commodities Corporation.
The above exhibits are incorporated herein by reference from the
Partnership's Registration Statement on Form S-1, file no. 33-3514.
(e) Trading Manager Agreement dated March 1, 1994 between Heinold Asset
Management, Inc. and the Partnership.
(f) Advisory Agreement dated March 7, 1994 between ARA Portfolio
Management Company, the Trading Manager and the Partnership.
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(g) Advisory Agreement dated March 8, 1994 between LaSalle Portfolio
Management, Inc., the Trading Manager and the Partnership.
(h) Advisory Agreement dated March 7, 1994 between Sunrise Capital
Management Inc., the Trading Manager and the Partnership.
(i) Advisory Agreement dated February 22, 1994 between Welton
Investment Systems Corporation, the Trading Manager and the Partnership.
The above exhibits are incorporated herein by reference from the the
Partnership's report on Form 10-K filed on March 30, 1994.
(j) Advisory Agreement dated June 6, 1994 between Parthenon Futures
Management, Inc., the Trading Manager and the Partnership.
(k) Advisory Agreement dated June 6, 1994 between Michael Tym, Jr., the
Trading Manager and the Partnership.
(l) Advisory Agreement dated January 24, 1995 between Lawless
Commodities, Inc., the Trading Manager and the Partnership.
The above exhibits are filed herewith.
(b) Reports on Form 8-K
The Partnership did not file a report on Form 8-K during the quarter
ended December 31, 1994.
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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, in the City of Chicago
and State of Illinois on the 27th day of March, 1995.
THE FUTURES DIMENSION FUND
By HEINOLD ASSET MANAGEMENT, INC.
General Partner
By /s/ Ned W. Bennett
----------------------
Ned W. Bennett
President
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
General Partner of the Registrant in the capacities and on the date indicated.
Title with
Signature General Partner Date
- --------- --------------- ----
/s/ James R. Curley Chief Executive March 27, 1995
- ----------------------- Officer and Director
James R. Curley
/s/ Robert Ledvora Chief Financial Officer March 27, 1995
- ---------------------- (principal accounting
Robert Ledvora officer)
/s/ Thomas M. Harte Director March 27, 1995
- ----------------------
Thomas M. Harte
/s/ Ira Polk Director March 27, 1995
- ----------------------
Ira Polk
/s/ Ned W. Bennett President (principal March 27, 1995
- ---------------------- executive officer)
Ned W. Bennett and Director
(Being the principal executive officer, the principal financial and
accounting officer, and a majority of the directors of Heinold Asset Management,
Inc.)
Heinold Asset Management, General Partner March 27, 1995
Inc. of Registrant
By /s/ Ned W. Bennett
----------------------
Ned W. Bennett
President
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[LOGO]
- --------------------------------------------------------------------------------
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1994 AND 1993 AND FOR THE
THREE YEARS ENDED DECEMBER 31, 1994 AND
INDEPENDENT AUDITORS' REPORT
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18
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
TABLE OF CONTENTS
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PAGE
INDEPENDENT AUDITORS' REPORT F - 1 and F - 2
FINANCIAL STATEMENTS:
Statements of Financial Condition as of
December 31, 1994 and 1993 F - 3
Statements of Operations for the Years Ended
December 31, 1994, 1993, and 1992 F - 4
Statements of Partners' Capital for the Years Ended
December 31, 1994, 1993, and 1992 F - 5
Statements of Cash Flows for the Years Ended
December 31, 1994, 1993, and 1992 F - 6
Notes to Financial Statements F - 7
19
[DELOITTE & TOUCHE LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the General Partner and
Limited Partners of
The Futures Dimension Fund:
We have audited the accompanying statements of financial condition of The
Futures Dimension Fund (an Illinois Limited Partnership, the "Partnership") as
of December 31, 1994 and 1993, and the related statements of operations,
partners' capital and cash flows for the years then ended. These financial
statements are the responsibility of the Partnership's General Partner. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits 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 are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 1994 and 1993 financial statements present fairly, in all
material respects, the financial position of The Futures Dimension Fund as of
December 31, 1994 and 1993, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
February 28, 1995
F - 1
20
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the General Partner and Limited Partners of
The Futures Dimension Fund:
We have audited the accompanying statements of financial condition of THE
FUTURES DIMENSION FUND (an Illinois limited partnership) as of December 31,
1992 and 1991, and the related statements of operations, partners' capital and
cash flows for each of the three years in the period ended December 31, 1992.
These financial statements are the responsibility of the Partnership's General
Partner. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the financial statements of
The Advisors Private Limited Partnership (Note 6) for the years ended December
31, 1991 and 1990, the investment in which is reflected in the accompanying
financial statements using the equity method of accounting. The equity in
income (loss) of The Advisors Private Limited Partnership represents 820% and
51% of net income (loss) for the years ended December 31, 1991 and 1990,
respectively. The financial statements of The Advisors Private Limited
Partnership were audited by other auditors, whose report has been furnished to
us, and our opinion, insofar as it relates to the amounts included for The
Advisors Private Limited Partnership, is based solely on the report of the
other auditors.
We conducted our audits 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 are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 and the report of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of The Futures Dimension Fund as of December
31, 1992 and 1991, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1992, in conformity
with generally accepted accounting principles.
/s/ Arthur Andersen LLP
Chicago, Illinois,
February 5, 1993
21
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1994 AND 1993
- -------------------------------------------------------------------------------
ASSETS 1994 1993
CASH $ 23,013 $ 23,013
EQUITY IN FUTURES AND FORWARD TRADING ACCOUNTS:
U.S. Treasury securities -- 7,709,110
Net unrealized appreciation on open futures and forward contracts 719,050 1,201,915
Amount due from broker 6,627,591 132,294
----------- -----------
7,346,641 9,043,319
----------- -----------
TOTAL ASSETS $ 7,369,654 $ 9,066,332
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accrued brokerage commissions payable $ 62,450 $ 75,387
Redemption payable 45,058 47,460
Accrued management fee 11,165 44,855
Other accrued expenses 6,078 19,865
Accrued incentive fee 22,959 159,652
----------- -----------
Total liabilities 147,710 347,219
PARTNERS' CAPITAL:
Limited Partners (39,459 and 44,818 units outstanding
at December 31, 1994 and 1993, respectively) 7,111,823 8,508,201
General Partner (611 and 1,111 unit equivalents outstanding
at December 31, 1994 and 1993, respectively) 110,121 210,912
----------- -----------
Total partners' capital 7,221,944 8,719,113
----------- -----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 7,369,654 $ 9,066,332
=========== ===========
NET ASSET VALUE PER OUTSTANDING UNIT OF
PARTNERSHIP INTEREST $ 180.23 $ 189.84
=========== ===========
See notes to financial statements.
F-3
22
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
- -------------------------------------------------------------------------------
1994 1993 1992
REVENUES:
Net realized trading gains on closed
futures and forward contracts $ 942,873 $ 2,604,738 $ 1,364,500
Increase (decrease) in net
unrealized appreciation on open
futures and forward contracts (482,865) 802,048 (1,100,693)
Interest income 307,314 226,370 391,251
---------- ----------- -----------
767,322 3,633,156 655,058
EXPENSES:
Brokerage commissions 735,811 869,772 1,047,306
Management fee 190,485 517,992 620,402
Incentive fee 287,295 249,920 -
Other administrative expenses 35,449 57,027 43,602
---------- ----------- -----------
1,249,040 1,694,711 1,711,310
---------- ----------- -----------
NET INCOME (LOSS) $ (481,718) $ 1,938,445 $(1,056,252)
========== =========== ===========
NET INCOME (LOSS) ALLOCATED TO:
General Partner $ (17,301) $ 43,094 $ (14,044)
========== =========== ===========
Limited Partner $ (464,417) $ 1,895,351 $(1,042,208)
========== =========== ===========
INCREASE (DECREASE) IN
NET ASSET VALUE FOR A
UNIT OUTSTANDING
THROUGHOUT EACH YEAR $ (9.61) $ 38.79 $ (12.64)
========== =========== ===========
See notes to financial statements.
F-4
23
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
- --------------------------------------------------------------------------------
TOTAL
LIMITED GENERAL PARTNERS'
PARTNERS PARTNER CAPITAL
BALANCE, JANUARY 1, 1992 $16,103,879 $181,862 $16,285,741
Redemption of 42,334 units
of limited partnership
interest (6,596,025) - (6,596,025)
Net loss (1,042,208) (14,044) (1,056,252)
----------- -------- -----------
BALANCE, DECEMBER 31, 1992 8,465,646 167,818 8,633,464
Redemption of 11,227 units
of limited partnership
interest (1,852,796) - (1,852,796)
Net income 1,895,351 43,094 1,938,445
----------- -------- -----------
BALANCE, DECEMBER 31, 1993 8,508,201 210,912 8,719,113
Redemption of 5,359 units
of limited partnership
interest and 500 general
partnership units (931,961) (83,490) (1,015,451)
Net loss (464,417) (17,301) (481,718)
----------- -------- -----------
BALANCE, DECEMBER 31, 1994 $ 7,111,823 $110,121 $ 7,221,944
=========== ======== ===========
See notes to financial statements.
F-5
24
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
- --------------------------------------------------------------------------------
1994 1993 1992
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (481,718) $ 1,938,455 $(1,056,252)
Adjustments to reconcile net income
(loss) to net cash flows from operating
activities:
Decrease (increase) in equity in
futures and forward trading accounts 1,696,678 (289,432) 7,778,029
Decrease (increase) in accrued expenses (197,107) 203,783 (125,752)
----------- ----------- -----------
Net cash flows from
operating activities 1,017,853 1,852,796 6,596,025
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of limited and
general partnership units and
unit equivalents (1,017,853) (1,852,796) (6,596,025)
----------- ----------- -----------
NET CHANGE IN CASH - - -
CASH - Beginning of year 23,013 23,013 23,013
----------- ----------- -----------
CASH - End of year $ 23,013 $ 23,013 23,013
=========== =========== ===========
See notes to financial statements.
F-6
25
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
- --------------------------------------------------------------------------------
1. ORGANIZATION OF THE PARTNERSHIP
The Futures Dimension Fund (the "Partnership") was organized in January
1986, under the Illinois Uniform Limited Partnership Act (the "Act"),
for purposes of engaging in speculative trading of primarily futures and
forward contracts. Heinold Asset Management, Inc. ("HAMI"), a wholly
owned subsidiary of Geldermann, Inc. ("Geldermann"), is the General
Partner of the Partnership. On December 12, 1994, the parent of
Geldermann, ConAgra, Inc., sold all of the common stock of Geldermann to
E.D.& F. Man, International ("Man"). As a result, Geldermann and HAMI
are wholly owned by Man.
The Partnership's funds held at Geldermann are in segregated accounts as
required by the Commodity Exchange Act, as amended. These funds are
used to meet minimum margin requirements for all of the Partnership's
open positions, as set by the exchange upon which each futures contract
is traded. These requirements are adjusted, as needed, due to daily
fluctuations in the values of the underlying positions. If necessary,
certain positions may be liquidated to satisfy resulting changes in
margin requirements.
The Partnership has a brokerage contract with Geldermann, which provides
that the Partnership will pay a monthly brokerage fee of 0.8333%
(10% annually) of the Partnership's month-end net asset value, plus NFA
fees.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION - Futures and forward contracts are recorded on
trade date and are reflected in the accompanying statements of financial
condition at the difference between the original contract amount and the
market value on the last business day of the reporting period. The
difference between the original contract amount and the market value of
the futures and forward contracts is reflected as the change in net
unrealized appreciation. Market values of futures contracts are based
upon exchange settlement prices. Market values of forward contracts are
based upon quoted rates provided by major financial institutions.
OPERATING EXPENSES - The Partnership bears all expenses incurred in
connection with its activities. These include brokerage commissions,
trading manager's management and incentive fees, and periodic legal,
auditing, tax return preparation and filing fees. The General Partner
bears all other operating expenses.
INCOME TAXES - No provision for Federal income taxes has been made in
the accompanying financial statements since the net income (loss)
of the Partnership is not taxable as such but is included in the income
tax returns of the individual partners.
Statements of Cash Flows - For purposes of reporting cash flows for
each of the three years ended December 31, 1994, cash includes only cash
on deposit at financial institutions.
F - 7
26
Reclassifications - Certain reclassifications have been made in the 1993
financial statements to conform to classifications adopted in 1994.
3. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK AND CONCENTRATION OF
CREDIT RISK
The Partnership invests in various financial and commodity futures
contracts for speculative purposes. These contracts are marked to
market daily with variations in value settled on a daily basis with the
exchange upon which they are traded. At December 31, 1994, the
Partnership held long financial futures and forward contracts having an
aggregate notional value of approximately $10,764,000, short financial
futures contracts having an aggregate notional value of approximately
$122,121,000, and short options on financial futures contracts having an
aggregate notional value of approximately $3,200,000. At December 31,
1993, the Partnership held long and short financial futures and forward
contracts having an aggregate notional value of approximately
$66,245,000, short financial futures contracts having an aggregate
notional value of approximately $131,335,000 and short options on
financial futures contracts having an aggregate notional value of
approximately $8,546,000.
The exchange upon which each financial futures and options on financial
futures contract is traded acts as the counterparty and, accordingly,
bears the risk of performance. A substantial portion of the
Partnership's open financial futures and options on financial futures
contracts was transacted with the Chicago Mercantile Exchange.
Generally, financial futures and forward contracts can be closed out or
offset, in the case of forward contracts, at the discretion of the
trading manager. However, illiquidity in the market could require the
Partnership to hold those positions until the delivery date, regardless
of the changes in their value or the trading manager's investment
strategies.
4. LIMITED PARTNERSHIP AGREEMENT
The Limited Partnership Agreement (the "Agreement") provides for the
following:
ALLOCATION OF PROFIT AND LOSS FOR PARTNERSHIP ACCOUNTING PURPOSES - The
Limited Partners and the General Partner share in the profits and losses
of the Partnership in proportion to the number of units or unit
equivalents held by each. However, no Limited Partner is liable for
obligations of the Partnership in excess of its capital contribution and
profits, if any, and such other amounts for which it may be liable
pursuant to the Act.
DISTRIBUTIONS - Distributions (other than redemption of units) are made
on a prorata basis at the sole discretion of the General Partner in
accordance with the respective capital accounts of the partners. The
General Partner has made no distributions from the Partnership to date.
REDEMPTIONS - A Limited Partner (or any assignee thereof) may cause any
or all of its units to be redeemed as of the first of any month
following 10 days' written request for redemption, subject to certain
other conditions, as described in the Agreement. Redemption is at net
asset value as of month-end.
DISSOLUTION - The Partnership will be dissolved on December 31, 2006
unless preceded by a decline in the Partnership's aggregate net assets
to less than $1,000,000 or upon the occurrence of certain future events,
as specified in the Agreement.
F - 8
27
5. MANAGEMENT AGREEMENT
As of December 31, 1993, the Partnership had a management contract with
Commodities Corporation (U.S.A.) N.V. (the "Trading Manager"). Under
the terms of the contract, the Trading Manager will not itself direct
any trading on behalf of the Partnership. Rather, all such trading
will be done solely by trading advisors selected by the Trading Manager.
The trading advisors are compensated by the Trading Manager. As
compensation for these services, the Trading Manager receives a monthly
management fee equal to 1/2 of 1% (6% annually) of the Partnership's net
asset value, as defined, as of the last day of each month and quarterly
incentive fees of 20% of "new trading profits," as defined in the
Agreement. The Trading Agreement with Commodities Corporation (U.S.A.)
N.V. was terminated on February 28, 1994. Effective March 31, 1994,
HAMI became the new Trading Manager replacing Commodities Corporation.
The Partnership entered into various trading advisor agreements (the
"Advisory Agreements") with effective dates as follows:
DATE TRADING ADVISOR
March 1, 1994 Welton Investment Systems Corporation
March 7, 1994 Sunrise Capital Management
March 7, 1994 ARA Portfolio Management Company
March 8, 1994 LaSalle Portfolio Management
June 6, 1994 Michael Tym Jr.
June 6, 1994 Parthenon Futures Management, Inc.
The net assets of the Partnership were allocated among the Trading
Advisors. Under the terms of the Advisory Agreements, the Trading
Advisors have sole responsibility for determining futures trades for the
Partnership. As compensation for these services, each Trading Advisor
receives a monthly management fee equal to 2% annually of the
Partnership's net asset value, as defined, as of the last day of each
month and quarterly incentive fees of 20% of "new trading profits," as
defined, on their respective share of the Partnership's net asset value.
Incentive fees are retained by the Trading Advisors even when "trading
losses," as defined, occur in subsequent quarters; however, no further
incentive fees are payable until any such trading losses (other than
those attributable to redeemed units) are recouped by the Trading
Advisors.
The Advisory Agreements with Welton Investment Systems Corporation were
terminated on September_15, 1994.
At December 31, 1994, carry-forward losses to be used in calculating
new trading profits for the advisors were as follows:
Sunrise Capital $(159,979)
LaSalle Portfolio (244,573)
Michael Tym Jr. (25,255)
Parthenon Futures (45,601)
Effective January 24, 1995, Lawless Commodities, Inc. entered into a
trading advisory agreement with the Partnership.
*****
F-9
28
To the best of my knowledge and belief, the information in this statement is
accurate and complete.
Heinold Asset Management, Inc.
(Pool Operator)
/s/ Robert Ledvora
- ---------------------------------------
Robert Ledvora
Executive Vice-President and Controller
F - 10
29
THE FUTURES DIMENSION FUND
EXHIBIT INDEX
Exhibits Included Herein
1. Advisory Agreement dated June 6, 1994 between Parthenon Futures
Management, Inc., the Trading Manager and the Partnership.
2. Advisory Agreement dated June 6, 1994 between Michael Tym, Jr., Inc., the
Trading Manager and the Partnership.
3. Advisory Agreement dated January 24, 1995 between Lawless Commodities,
Inc., the Trading Manager and the Partnership.
Exhibits Incorporated by Reference
See pages 14-15 for a list of exhibits incorporated by reference.
-16-