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, 1995
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 was organized
in 1982 to serve as the general partner and pool operator for public and
private commodity pools sponsored by Heinold Commodities, Inc. The General
Partner is a wholly owned 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 with headquarters in New York, New York.
Until June 1, 1995, Geldermann acted as the Partnership's
futures commission merchant or commodity broker. On that date, E.D. & F. Man
International, Inc. (the "Commodity Broker") replaced Geldermann as the
Partnership's commodity broker. The General Partner and the Commodity Broker
perform various services related to the Partnership's Limited Partnership
Agreement and customer agreement with the Commodity Broker. References to the
"Commodity Broker" refer to Geldermann, Inc. for the period prior to June 1,
1995 and to E.D. & F. Man International Inc. for the period on and after June
1, 1995.
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 $99,770 as of December 31, 1995.
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Under the terms of the Customer Agreement, the Partnership
will not pay brokerage commissions on the basis of the number of trades made on
its behalf, but will instead pay the Commodity Broker 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, the Commodity Broker 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 ("ARA"), LaSalle Portfolio Management,
Inc.("LaSalle"), Sunrise Capital Management Inc. ("Sunrise") and Welton
Investment Systems Corporation ("Welton"), 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. ("Parthenon") and Michael Tym, Jr. ("Tym") were retained as trading
advisors for the Partnership. The Advisory Agreement with Welton was
terminated on September 15, 1994 and Lawless Commodities, Inc. ("Lawless") was
retained as a trading advisor effective January 24, 1995.
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On February 28, 1995, the Trading Manager terminated the
Advisory Agreements with ARA, LaSalle, Sunrise, Parthenon and Lawless. On March
10, 1995, the Trading Manager retained Sabre Fund Management Limited ("Sabre"),
Telesis Management, Inc. ("Telesis"), Gandon Fund Management, Ltd. ("Gandon")
and First October Trading Company, Inc. ("First October") to trade on behalf
of the Partnership. The Advisory Agreements with Sabre and First October were
terminated on July 31, 1995 and September 30, 1995, respectively. The Advisory
Agreements with Telesis, Tym and Gandon were terminated on October 31, 1995.
On November 1, 1995, the Trading Manager entered into
Management Contracts with Hyman, Beck & Company, Inc., Marathon Capital Growth
Partners, L.L.C., RXR, Inc. and Willowbridge Associates, Inc. These four
trading advisors are collectively referred to herein as 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, 1995, 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 Advisors, recognized with respect
to the assets of the Partnership allocated to each of the
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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 the Commodity Broker, to be registered and to comply with various
reporting and record keeping requirements. The General Partner, the Trading
Advisors and the Commodity Broker 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 the Commodity Broker 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 which are not subject to
regulation by any United States government agency.
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(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, 1995 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 the Commodity Broker
(pursuant to which the Commodity Broker 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 aggregate
management fees, incentive fees, brokerage commissions and other expenses
incurred or accrued by the Partnership during the month.
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(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 addition, there are no pending legal proceedings involving the
General Partner or the Commodity Broker.
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 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.
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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, 1996, there were 365 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.
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, 1995.
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Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Ended Ended Ended Ended Ended
December 31, December 31, December 31, December 31, December 31,
1995 1994 1993 1992 1991
---------- ------------ -------- -------- --------
Net trading gain (loss)
on futures and
forward contracts $ (120,044) $ 460,008 $3,406,786 $ 263,807 $ 2,736,403
Interest income 298,247 307,314 226,370 391,251 692,442
---------- ---------- ---------- ----------- -----------
Total income (loss) 178,203 767,322 3,633,156 655,058 3,428,845
Brokerage commissions 606,997 735,811 869,772 1,047,306 1,371,702
Management fee 108,608 190,485 517,992 620,402 810,207
Incentive fee 83,493 287,295 249,920 0 0
Other administrative
expenses 39,868 35,449 57,027 43,602 92,150
---------- ---------- ---------- ----------- -----------
Total expenses 838,966 $1,249,040 $1,694,711 $ 1,711,310 $ 2,274,059
---------- ---------- ---------- ----------- -----------
Income (loss) before
equity in income
(loss) of Advisors
L.P., net N/A N/A N/A N/A 1,154,786
---------- ---------- ---------- ----------- -----------
Equity in income (loss)
of Advisors L.P.,
net at allocated
expenses N/A N/A N/A N/A (1,315,153)
---------- ---------- ---------- ----------- -----------
Net income (loss) $ (660,763) $ (481,718) $1,938,445 $(1,056,252) $ (160,367)
========== ========== ========== =========== ===========
Net income (loss)
allocated to
General Partner $ (10,351) $ (17,301) $ 43,094 $ (14,044) $ (33,009)
========== ========== ========== =========== ===========
Net income (loss)
allocated to
limited partners $ (650,412) $ (464,417) $1,895,351 $(1,042,208) $ (127,358)
========== ========== ========== =========== ===========
Increase (decrease) in
Net Asset Value for
a Unit outstanding
throughout each year/
period $ (16.94) $ (9.61) $ 38.79 $ (12.64) $ .75
========== ========== ========== =========== ===========
Total assets $5,737,944 $7,369,654 $9,066,332 $ 8,776,900 $16,554,929
========== ========== ========== =========== ===========
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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 years ended
December 31, 1995 and December 31, 1994 and a gain for the fiscal year ended
December 31, 1993.
The Net Asset Value per Unit as of December 31, 1995 and
December 31, 1994 was $163.29 and $180.23, respectively.
The Partnership had a net loss for the fiscal year ended
December 31, 1995 as the Partnership's unprofitable trading in the agricultural
and metals sectors more than offset its
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profitable trading in the currency and financial sectors. The Partnership
realized profits in short positions in the British pound and Japanese yen and
long positions in U. S. treasury notes. Losses were greater, however, in long
Swiss franc and coffee positions as well as short aluminum, nickel and zinc
positions.
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.
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.
Item 11. Executive Compensation
The Partnership has no directors or officers. The General
Partner performs the services described in "Item 2. Properties" herein. The
Commodity Broker acts as the Partnership's commodity broker pursuant to the
Customer Agreement described in "Item l(a). Business - General development of
business."
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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 611 Unit-equivalents valued at $99,770 as of December
31, 1996, 1.8% of the Partnership's total equity.
(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.
(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.
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(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 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.
(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.
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The above exhibits are incorporated herein by reference from 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 incorporated herein by reference from the
Partnership's report on Form 10-K filed on March 30, 1995.
(m) Advisory Agreement dated March 10, 1995 between the
Partnership and First October Trading Company, Inc.
(n) Advisory Agreement dated March 10, 1995 between the
Partnership and Gandon Fund Management, Ltd.
(o) Advisory Agreement dated March 10, 1995 between the
Partnership and Telesis Management, Inc.
(p) Advisory Agreement dated March 10, 1995 between the
Partnership and Michael Tym, Jr.
(q) Management Contract dated November 1, 1995 between the
Partnership and Hyman, Beck & Company, Inc.
(r) Management Contract dated November 1, 1995 between the
Partnership and Marathon Capital Growth Partners, L.L.C.
(s) Management Contract dated November 1, 1995 between the
Partnership and RXR, Inc.
(t) Management Contract dated November 1, 1995 between the
Partnership and Willowbridge Associates Inc.
(27) Financial Data Schedule
The above exhibits are filed herewith.
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(b) Reports on Form 8-K
The Partnership did not file a report on Form 8-K during the
quarter ended December 31, 1995.
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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 28th day of March, 1996.
THE FUTURES DIMENSION FUND
By HEINOLD ASSET MANAGEMENT, INC.
General Partner
By /s/ Daniel E. Ragen
--------------------------
Daniel E. Ragen
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 28, 1996
- ------------------- Officer and Director
James R. Curley
/s/ Robert Ledvora Chief Financial Officer March 28, 1996
- ------------------ (principal accounting
Robert Ledvora officer)
/s/ Thomas M. Harte Director March 28, 1996
- -------------------
Thomas M. Harte
/s/ Ira Polk Director March 28, 1996
- ------------
Ira Polk
/s/ Ned W. Bennett Director March 28, 1996
- ------------------
Ned W. Bennett
/s/ Daniel E. Ragen President (principal March 28, 1996
- ------------------- executive officer)
Daniel E. Ragen 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, Inc. General Partner March 28, 1996
of Registrant
By /s/ Daniel E. Ragen
- ----------------------
Daniel E. Ragen
President
-16-
17
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1995 AND 1994 AND FOR THE
THREE YEARS ENDED DECEMBER 31, 1995 AND
INDEPENDENT AUDITORS' REPORT
18
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT F-1
FINANCIAL STATEMENTS:
Statements of Financial Condition as of December 31, 1995 and 1994 F-2
Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993 F-3
Statements of Partners' Capital for the Years Ended
December 31, 1995, 1994 and 1993 F-4
Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993 F-5
Notes to Financial Statements F-6 - F-8
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, 1995 and 1994, and the related statements of operations,
partners' capital and cash flows for each of the three years in the period
ended December 31, 1995. 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, such financial statements present fairly, in all material
respects, the financial position of The Futures Dimension Fund as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
February 9, 1996
F-1
20
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1995 AND 1994
ASSETS 1995 1994
CASH $ - $ 23,013
EQUITY IN FUTURES AND FORWARD TRADING ACCOUNTS:
Net unrealized appreciation on open futures and forward contracts 367,101 719,050
Amount due from broker E.D. & F. Man
International (previously Geldermann) 5,370,843 6,627,591
---------------- ----------------
5,737,944 7,346,641
---------------- ----------------
TOTAL ASSETS $ 5,737,944 $ 7,369,654
================ ================
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Accrued brokerage commissions payable to
E.D. & F. Man International (previously Geldermann) $ 47,784 $ 62,450
Redemption payable 73,481 45,058
Accrued management fee 12,091 11,165
Other accrued expenses 3,892 6,078
Accrued incentive fee 2,169 22,959
---------------- ----------------
Total liabilities 139,417 147,710
PARTNERS' CAPITAL:
Limited Partners (33,674 and 39,459 units outstanding
at December 31, 1995 and 1994, respectively) 5,498,757 7,111,823
General Partner (611 unit equivalents outstanding
at December 31, 1995 and 1994) 99,770 110,121
---------------- ----------------
Total partners' capital 5,598,527 7,221,944
---------------- ----------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 5,737,944 $ 7,369,654
================ ================
NET ASSET VALUE PER OUTSTANDING UNIT OF
PARTNERSHIP INTEREST $ 163.29 $ 180.23
================ ================
See notes to financial statements.
F-2
21
THE FUTURES DIMENSION FUND
(aN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
1995 1994 1993
REVENUES:
Net realized trading gains on closed
futures and forward contracts $ 372,388 $ 942,873 $ 2,604,738
Increase (decrease) in net
unrealized appreciation on open
futures and forward contracts (492,432) (482,865) 802,048
Interest income 298,247 307,314 226,370
----------- ------------ -----------
178,203 767,322 3,633,156
EXPENSES:
Brokerage commissions 606,997 735,811 869,772
Management fee 108,608 190,485 517,992
Incentive fee 83,493 287,295 249,920
Other administrative expenses 39,868 35,449 57,027
----------- ------------ -----------
838,966 1,249,040 1,694,711
----------- ------------ -----------
NET INCOME (LOSS) $ (660,763) $ (481,718) $ 1,938,445
=========== ============ ===========
NET INCOME (LOSS) ALLOCATED TO:
General Partner $ (10,351) $ (17,301) $ 43,094
=========== ============ ===========
Limited Partners $ (650,412) $ (464,417) $ 1,895,351
=========== ============ ===========
INCREASE (DECREASE) IN
NET ASSET VALUE FOR A
UNIT OUTSTANDING
THROUGHOUT EACH YEAR $ (16.94) $ (9.61) $ 38.79
=========== ============ ===========
See notes to financial statements.
F-3
22
THE FUTURES DIMENSION FUND
(aN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
TOTAL
LIMITED GENERAL PARTNERS'
PARTNERS PARTNER CAPITAL
BALANCE, JANUARY 1, 1993 $ 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 partner 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
Redemption of 5,785 units of limited partnership
interest (962,654) - (962,654)
Net loss (650,412) (10,351) (660,763)
-------------- ----------- --------------
BALANCE, DECEMBER 31, 1995 $ 5,498,757 $ 99,770 $ 5,598,527
============== =========== ==============
See notes to financial statements.
F-4
23
THE FUTURES DIMENSION FUND
(aN ILLINOIS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (660,763) $ (481,718) $ 1,938,445
Adjustments to reconcile net income (loss) to
net cash flows from operating activities:
Decrease (increase) in equity in
futures and forward trading accounts 1,608,697 1,696,678 (289,432)
(Decrease) increase in accrued expenses (36,716) (197,107) 203,783
------------- ------------- -------------
Net cash flows from
operating activities 911,218 1,017,853 1,852,796
CASH FLOWS FROM FINANCING ACTIVITIES:
Redemption of limited and
general partnership units (934,231) (1,017,853) (1,852,796)
------------- ------------- -------------
NET CHANGE IN CASH (23,013) - -
CASH - Beginning of year 23,013 23,013 23,013
------------- ------------- -------------
CASH - End of year $ - $ 23,013 $ 23,013
============= ============= =============
See notes to financial statements.
F-5
24
THE FUTURES DIMENSION FUND
(AN ILLINOIS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
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 Man, previously 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 Man, previously
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 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 includable 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, 1995, cash includes only cash on
deposit at financial institutions.
F-6
25
3. FAIR VALUE AND OFF-BALANCE SHEET RISK
The Partnership trades both cash and derivative financial instruments.
The Company's principal source of revenues by reporting category is as
follows:
CHANGE IN
REALIZED UNREALIZED
TRADING APPRECIATION
GAINS (LOSSES) (DEPRECIATION) TOTAL
Futures contracts $ 248,962 $ (475,305) $ (226,343)
Forward contracts 250,139 (18,333) 231,806
Option contracts (126,713) 1,206 (125,507)
---------- ----------- -----------
Total $ 372,388 $ (492,432) $ (120,044)
========== =========== ===========
The Partnership was organized to engage in speculative trading of a
diversified portfolio of futures and forward contracts and commodity
options. SFAS 119, "Disclosure About Derivative Financial Instruments
and Fair Value of Financial Instruments," defines a derivative as a
future, forward, swap or option contract, or other financial instruments
with similar characteristics such as caps, floors and collars.
Generally, these financial instruments represent future commitments to
exchange interest payment streams or currencies or to purchase or to sell
other financial instruments at specific terms at specified future dates.
Option contracts provide the holder with the right, but not the
obligation, to purchase or sell a financial instrument at a specific
price before or on an established date. These financial instruments may
have market and/or credit risk in excess of amounts recorded in the
Statements of Financial Condition.
MARKET RISK - Derivative financial instruments involve varying degrees
of off-balance sheet market risk whereby changes in the level or
volatility of interest rates, foreign currency exchange rates or market
values of the underlying financial instruments or commodities may result
in changes in the value of the financial instrument in excess of the
amounts currently reflected in the Statements of Financial Condition.
The Partnership's exposure to market risk is influenced by a number of
factors, including the relationships among financial instruments with
off-balance sheet risk and between financial instruments with off-balance
sheet risk and the Partnership's proprietary commodities, as well as the
volatility and liquidity in the markets in which the financial
instruments are traded.
FAIR VALUE - The derivative instruments used in the Partnership's
trading activities are marked to market daily with the resulting
unrealized gains or losses recorded in the Statements of Financial
Condition and the related income or loss reflected in revenues derived
from these transactions. The fair value of derivative financial
instruments held or issued for trading purposes as of December 31, 1995
and the average monthly fair value of the instruments for the fiscal year
ended December 31, 1995 are as follows:
FAIR VALUES AT YEAR-END AVERAGE FAIR VALUES
ASSETS LIABILITIES ASSETS LIABILITIES
Futures contracts $ - $ 18,334 $ 313,460 $ 61,048
Forward contracts 422,664 37,229 37,813 58,718
Option contracts - - 11,451 3,711
F-7
26
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 Partners are liable for
obligations of the Partnership in excess of their capital contribution
and profits, if any, and such other amounts for which they 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 - Limited Partners (or any assignee thereof) may cause any
or all of their 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.
5. MANAGEMENT AGREEMENT
The Partnership enters into various advisory agreements (the "Advisory
Agreements"). As of December 31, 1995, the Partnership's trading
advisors are Hyman Beck & Co., Inc., RXR, Inc., Willowbridge Associates,
Inc., and Marathon Capital Growth Partners.
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 .166% (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.
******
F-8
27
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 Chief Financial Officer
F-9
28
THE FUTURES DIMENSION FUND
EXHIBIT INDEX
Exhibits Included Herein
- --------------------------
10(m) Advisory Agreement dated March 10, 1995 between the Partnership and First
October Trading Company, Inc.
10(n) Advisory Agreement dated March 10, 1995 between the Partnership and
Gandon Fund Management, Ltd.
10(o) Advisory Agreement dated March 10, 1995 between the Partnership and
Telesis Management, Inc.
10(p) Advisory Agreement dated March 10, 1995 between the Partnership and
Michael Tym, Jr.
10(q) Management Contract dated November 1, 1995 between the Partnership and
Hyman, Beck & Company, Inc.
10(r) Management Contract dated Nobember 1, 1995 between the Partnership and
Marathon Capital Growth Partners, L.L.C.
10(s) Management Contract dated November 1, 1995 between the Partnership and
RXR Inc.
10(t) Management Contract dated November 1, 1995 between the Partnership and
Willowbridge Associates, Inc.
27 Financial Data Schedule
Exhibits Incorporated Reference
- --------------------------------
See pages 13-14 for a list of exhibits incorporated by reference.