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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
/x/ Quarterly report pursuant to Section 13 of 15(d) of the Securities Exchange
Act of 1934
For the Quarterly period ended March 31, 1997 or
/ / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from __________ to __________
Commission File Number 2-73692
The Balanced Opportunity Fund Limited Partnership
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(Exact name of registrant as specified in its charter)
Illinois 36-3655854
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
c/o Rodman & Renshaw Futures Management, Inc.
233 South Wacker Drive, Suite 4500
Chicago, Illinois 60606
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(Address of principal (Zip Code)
executive offices)
(312) 526-2000
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(Registrant's telephone number, including area code)
Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES /X/ NO / /
Total Pages In This Report - 9
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The Balanced Opportunity Fund Limited Partnership
INDEX
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements -
Consolidated Statements of Financial Condition as of
March 31, 1997 (unaudited) and June 30, 1996 3
Consolidated Statements of Operations (unaudited) for the
three-month and nine-month periods ended March 31, 1997
and 1996 4
Consolidated Statements of Changes in Partners' Capital
for the nine-month period ended March 31, 1997 (unaudited)
and the year ended June 30, 1996 5
Note to Unaudited Consolidated Financial Statements --
March 31, 1997 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II - OTHER INFORMATION 8
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 9
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
THE BALANCED OPPORTUNITY FUND LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
MARCH 31,
1997 JUNE 30,
(UNAUDITED) 1996
-------------- ----------
ASSETS
Equity in commodity futures trading accounts:
Cash $ 779,000 $ 568,000
Net unrealized gain/(loss) on open contracts (20,000)
---------- ----------
Total equity in commodity futures
trading accounts 759,000 568,000
Investment in United States Treasury securities, at cost plus
accrued interest which approximates market value
segregated from trading assets 2,922,000
Guaranteed yield pool, at market 4,987,000
Illinois replacement tax receivable 1,000 1,000
Other receivables 1,000 1,000
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Total assets $3,683,000 $ 5,557,000
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accrued administrative expenses $ 32,000 $ 40,000
Accrued commissions and fees 18,000 38,000
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Total liabilities 50,000 78,000
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Partners' capital
Limited partners (units outstanding: 2,099.9824
and 3,392.4502) 3,450,000 5,305,000
General partner (units outstanding: 111.1143) 183,000 174,000
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Total partners' capital 3,633,000 5,479,000
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $3,683,000 $ 5,557,000
========== ===========
NET ASSET VALUE PER UNIT $ 1,643.21 $ 1,563.75
========== ===========
See note to the unaudited consolidated financial statements.
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THE BALANCED OPPORTUNITY FUND LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1997 1996 1997 1996
-------- --------- -------- --------
REVENUES:
Trading profit/(loss):
Realized $182,000 $(223,000) $359,000 $(17,000)
Change in unrealized (50,000) (91,000) (20,000) (61,000)
Foreign currency gain/(loss) (4,000) 3,000 (3,000) $(18,000)
-------- --------- -------- --------
Total trading profit and
foreign currency gain 128,000 (311,000) 336,000 (96,000)
Guaranteed yield pool:
Accrued interest 102,000 161,000 498,000 382,000
Unrealized market value gain/(loss) (69,000) (74,000) (322,000) (62,000)
-------- --------- -------- --------
Total guaranteed yield pool
revenue 33,000 87,000 176,000 320,000
Interest income:
United States Treasury Bills 21,000 21,000
Interest on equity 12,000 8,000 31,000
-------- --------- -------- --------
Total interest income 21,000 12,000 29,000 31,000
TOTAL REVENUES 182,000 (212,000) 541,000 255,000
-------- --------- -------- --------
EXPENSES:
Brokerage commissions 51,000 70,000 170,000 205,000
Advisory fees 12,000 15,000 40,000 47,000
Administrative expenses 7,000 12,000 37,000 34,000
-------- --------- -------- --------
TOTAL EXPENSES 70,000 97,000 247,000 286,000
-------- --------- -------- --------
NET INCOME/(LOSS) $112,000 $(309,000) $294,000 $(31,000)
======== ========= ======== ========
NET INCOME/(LOSS) ALLOCATED TO:
Limited partners $109,000 $(300,000) $285,000 $(30,000)
======== ========= ======== ========
General partner $ 3,000 $ (9,000) $ 9,000 $ (1,000)
======== ========= ======== ========
NET INCOME/(LOSS) PER UNIT
OUTSTANDING FOR ENTIRE PERIOD $ 26.99 $ (83.61) $ 79.46 $ (12.20)
======== ========= ======== ========
See note to the unaudited consolidated financial statements.
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THE BALANCED OPPORTUNITY FUND LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL
TOTAL UNITS
OF PARTNERSHIP LIMITED GENERAL
INTEREST PARTNERS PARTNER TOTAL
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PARTNERS' CAPITAL
June 30, 1995 4,217.5645 $6,544,000 $ 177,000 $ 6,721,000
Redemptions (714.0000) (1,150,000) (1,150,000)
Net loss (89,000) (3,000) (92,000)
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PARTNERS' CAPITAL
June 30, 1996 3,503.5645 $ 5,305,000 $ 174,000 $ 5,479,000
=========== =========== ============ ===========
Redemptions (1,292.4678) (2,140,000) (2,140,000)
Net income 285,000 9,000 294,000
----------- ----------- ------------ -----------
PARTNERS' CAPITAL
March 31, 1997
(unaudited) 2,211.0967 $ 3,450,000 $183,000 $ 3,633,000
=========== =========== ============ ===========
See note to the unaudited consolidated financial statements.
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THE BALANCED OPPORTUNITY FUND LIMITED PARTNERSHIP
NOTE TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
NOTE A - BASIS OF PRESENTATION
The unaudited consolidated financial statements of The Balanced Opportunity
Fund Limited Partnership (the "Partnership") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation of the financial condition and results of operations of the
Partnership for the periods presented have been included. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-K for the year
ended June 30, 1996.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources
The purpose of the Partnership is to trade commodity interests; as such, the
Partnership does not have, nor does it expect to make, any capital expenditures
or have any capital assets that are not operating capital or assets. The
Partnership's use of assets is solely to provide necessary margin or premiums
for, and to pay any losses incurred in connection with, its trading activity.
The Net Asset Values are calculated and equity reports are reviewed by the
General Partner on a daily basis to monitor the trading manager's activity to
minimize the market and credit risks of the Fund. The General Partner also
monitors the trading manager's compliance with ivnestment objectives as set
forth in the prospectus. Redemption of additional units in the future will
impact the amount of funds available for trading commodity interests.
Redemptions of units during the quarter ended March 31, 1997 reduced the amount
of funds available by $2,066,000.
Liquidity
Most United States commodity exchanges limit fluctuations in commodity 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 a price 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. Commodity futures prices have
occasionally reached 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 commodity futures prices have not reached 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 trading of
commodity interests, the Partnership's assets are highly liquid and are
expected to remain so. The counterparty for all exchange-traded contracts
through March 24, 1997 was ED&F Man International, Inc. and Rand Financial
Services, Inc. after that date. For over-the-counter contracts, the
counterparty was ED&F Man Capital Inc. through March 24, 1997 and Rand
Financial Services, Inc. thereafter. A portion of the Fund's assets have been
invested in certain United States treasury obligations. This investment is
designed to provide ultimate repayment of the
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investors' initial contributions. These securities are not used for
trading purposes.
Results of Operations
Given the volatility of the markets in which the Partnership trades, its
quarterly results could fluctuate significantly and are not indicative of the
expected results for the fiscal year.
In the three month and nine month periods ending March 31, 1997, the Fund
experienced trading profits of $128,000 and $336,000 respectively compared to
losses during the same periods in 1996. Throughout the nine months ended March
31, 1997, the Fund profited from its positions in the international sector
where it especially benefitted from the US Dollar's strength against most world
currencies during the first two months of 1997. The loss from its currency
positions in March, 1997 were offset by its fixed income and bond positions
reflecting the higher prevailing rates. The Fund's energy positions were
profitable during the first nine months of the fiscal year except for a short
setback in January. January also saw a significant loss in the Fund's soybean
positions which were adversely affected by the USDA's production estimates.
At March 31, 1997 there were no material credit risk exposure exceeding 10%
total assets for either exchange-traded or over-the-counter contracts.
During the nine-month period ended March 31, 1997, the Fund sold zero coupon
United States Treasury securities in order to pay redemptions and maintain an
approximate ratio of 20% trading assets to 80% Guaranteed Yield Pool. This
resulted in lower revenues from the Guaranteed Yield Pool as compared with both
the quarter and nine month periods a year ago. In February, 1997 the zero
coupon United States Treasury securities held by the Fund matured and United
States Treasury Bills were purchased as an interim interest-bearing instrument
pending the purchase of additional zero coupon United States Treasury
securities. With this maturity investors were offered a special redemption
date in accordance with the prospectus.
Brokerage commissions and advisory fees, which are based on the net assets of
the Fund, declined as a direct result of redemptions.
PART II. OTHER INFORMATION
ITEM 6. REPORTS ON FORM 8-K
No reports were filed on Form 8-K during the three months ended March 31, 1997.
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SIGNATURES
Pursuant to the requirements 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.
The Balanced Opportunity Fund Limited Partnership
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(Registrant)
BY: Rodman & Renshaw Futures Management, Inc., General Partner
BY:
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F. L. Kirby
President and a Director
Date: May 13, 1997
BY:
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Thomas G. Pinou
Treasurer and a Director
Date: May 13, 1997
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