UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly period ended December 31, 1999
Commission File Number: 2-73692
The Balanced Opportunity Fund L.P.
(Exact name of registrant as specified in its charter)
Illinois 36-3655854
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
Registrant's telephone number, including area code:(312) 460-9200
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_____
The Balanced Opportunity Fund L.P.
Index
Page
Part I - Financial Information
Item 1. Financial Statements
Statements of Financial Condition (unaudited)
as of December 31, 1999 and 1998 3
Statements of Operations (unaudited) for the three
And six month periods ended December 31, 1999 and 1998 4
Statements of Changes in Partners' Capital (unaudited)
for the six month period ended December 31, 1999
and the years ended June 30, 1999, 1998 and 1997 5
Notes to Unaudited Financial Statements -
December 31, 1999 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
Part II - Other Information 8
Item 3. Exhibits and Reports on Form 8-K 8
Signatures 9
Part I. Financial Information
Item 1. Financial Statements
The Balanced Opportunity Fund
Statement of Financial Condition
(Unaudited)
December 31, December 31
1999 1998
Assets
Equity in futures and forward trading accounts:
Cash $346,303 $610,339
Net unrealized gain/(loss) on open contracts 12,766 58,056
--------- ---------
Total equity in futures and forward trading account 359,069 668,395
Guaranteed yield pool, at market 1,798,609 2,284,842
Other receivable 2,132 2,126
-------- ---------
Total Assets $2,163,170 $2,954,514
========== ==========
Liabilities and Partners' Capital
Liabilities:
Accrued administrative expenses $ 29,448 $26,138
Accrued brokerage commission and fees 6,368 7,604
Accrued management fees 3,564 2,444
Accrued incentive fees - -
Redemption Payable - -
Miscellaneous payables - -
-------- ---------
39,380 36,186
Partners' Capital
Limited Partners (units outstanding 1,002.0000;
1,296.8520) 1,911,787 2,688,019
General Partner (units outstanding : 111.1143) 212,002 230,309
-------- ---------
2,123,789 2,918,328
-------- --------
Total Liabilities and Partners' Capital $2,163,169 $2,954,514
======== ==========
Net Asset Value per Unit $ 1,907.97 $ 2,072.73
======== ==========
See Notes to the unaudited financial statements
The Balanced Opportunity Fund L.P.
Statement of Operations
(unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
Revenues 1999 1998 1999 1998
Trading profit/(loss):
Realized $ (27,464) $122,007 $ (33,580) $77,314
Change in unrealized 15,709 (64,436) 4,308 57,469
Foreign currency gain/(loss) (2,373) (771) (1,002) 1,561
-------- -------- -------- --------
Total trading profit and
foreign currency gain/(loss) (14,128) 56,800 (30,544) 136,344
Guaranteed yield pool:
Accrued Interest 29,464 35,228 58,439 71,713
Unrealized market value gain (loss) (24,747) (26,623) (29,041) 74,175
-------- -------- -------- --------
Total guaranteed yield pool revenue 4,717 8,606 29,397 145,888
Interest Income 4,202 5,838 9,250 10,355
-------- -------- -------- --------
Total Revenues (5,209) 71,244 8,103 292,587
Expenses
Brokerage commissions $21,902 $ 28,299 $45,009 $58,339
Management fees 5,357 7,276 10,930 14,317
Other administrative expenses 15,000 19,500 31,500 39,000
State taxes - - - -
-------- -------- -------- --------
42,259 55,075 87,438 111,656
-------- -------- -------- --------
Net Income/(Loss) $(47,468) $ 16,169 $(79,335) $ 180,931
======== ======== ======== ========
Net Income/(Loss) Allocated To:
Limited Partners $(42,730) $ 15,335 $(71,499) $ 166,886
======== ======== ======== ========
General Partners $ (4,738) $ 834 $ (7,836) $ 14,045
======== ======== ======== ========
Net Income/(Loss) per unit
outstanding for entire period $ (42.64) $ 7.51 $ (70.52) $ 126.40
========= ======== ======== ========
See Notes to the unaudited financial statements
The Balanced Opportunity Fund L.P.
Statement of Changes in Partners' Capital
Total Units
of Partnership Limited General
Interest Partners Partners Total
Partners Capital June 30, 1996 3,504 $5,305,000 $ 174,000 $5,479,000
Redemption (1,425) (2,356,000) (2,356,000)
Net Income (loss) 422,000 16,000 438,000
------- --------- --------- ---------
Partners Capital June 30, 1997 2,079 $3,371,000 $ 190,000 $3,561,000
Redemption (646) (1,198,000) - (1,198,000)
Net Income (loss) 405,000 26,000 431,000
------- --------- --------- ---------
Partners Capital June 30, 1998 1,434 2,578,000 216,000 2,794,000
Redemption (290) (585,000) - (585,000)
Net Income (loss) - 49,000 4,000 53,000
------- --------- --------- ---------
Partners Capital June 30, 1999 1,143 2,042,000 220,000 2,262,000
Redemption (115) (325,000) - (325,000)
Net Income (loss) - (71,000) (8,000) (79,000)
------- --------- --------- ---------
Partners Capital
December 31, 1999 1,028 $1,646,000 $ 212,000 $1,858,000
======= ========= ========= =========
See Notes to unaudited financial statements.
The Balanced Opportunity Fund L.P.
Notes to Unaudited Financial Statements
December 31, 1999
Note - Basis of Presentation
The unaudited financial statements of The Balanced Opportunity Fund L.P.
(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 financial statements and footnotes thereto included
in the Partnership's annual report on Form 10-K for the year ended June 30,
1999.
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
advisors' activity to maximize the market and credit risks of the Fund. The
General Partner also monitors the trading advisors' compliance with investment
objectives as set forth in the prospectus. Redemption of additional units in
the future will impact the amount of funds available for trading commodity
interest. The amount of funds available was reduced by $58,518 from
redemptions of units during the quarter ended December 31, 1999.
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 liquidation 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 and over-the counter contracts was Rosenthal Collins Group LP.
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 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 can fluctuate significantly and are not indicative of the
expected results for the fiscal year.
In the three month period ending December 31, 1999, the Fund experienced
trading losses of $14,128 compared to trading gains of $56,800 for the same
periods in 1998. In the three month period ending December 31, 1999, the
total guaranteed yield pool revenue was $4,717 compared to $8,606 for the same
periods in 1998.
At December 31, 1999 there was no material credit risk exposure exceeding
10% of total assets for either exchange traded or over-the-counter contracts.
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 3. Exhibits and Reports on Form 8-K
No reports were filed on Form 8-K during the three months ended December
31, 1999.
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 and to the extent possible due to the acquisition of the
registrant by the undersigned on April 24, 1998; the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
The Balanced Opportunity Fund L.P.
(Registrant)
By: Rosenthal Collins Futures Management, Inc., General Partner
By: /s/ J. Robert Collins
- ----------------------------
J. Robert Collins, President
Date: January 20, 2000