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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K
Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended Commission File Number 0-17555
December 31, 2003
The Everest Fund, L.P.
(Exact name of registrant as specified in its charter)
Iowa 42-1318186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 North 4th Street, Suite 143, Fairfield, Iowa 52556
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(641) 472-5500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
Indicate by check mark 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 __
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation SK is not contained herein
and will not be contained to the best of the Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of Form 10K: [ X ]
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Exchange Act Rule 12b-2).
Yes __ No X
The aggregate market value of the voting and non-voting common
equity held by non-affiliates of the Registrant as of June 30,
2003 : $29,208,675.
Part 1
Item 1. Business
The Everest Fund, L.P. (the "Partnership") is a limited
partnership organized on June 20, 1988 under the Iowa Uniform
Limited Partnership Act. The business of the Partnership is the
speculative trading of commodity futures contracts and other
commodity interests, including forward contracts on foreign
currencies (Commodity Interests) either directly or through
investing in other, including subsidiary, partnerships, funds or
other limited liability entities. The Partnership commenced its
trading operations on February 1, 1989. Its General Partner is
Everest Asset Management, Inc. (the "General Partner") a
Delaware corporation organized in December, 1987.
The Partnership was initially organized on June 20, 1988 under
the name Everest Energy Futures Fund, L.P. and its initial
business was the speculative trading of Commodity Interests,
with a particular emphasis on the trading of energy-related
commodity interests. However, effective September 12, 1991, the
Partnership changed its name to "Everest Futures Fund, L.P." and
at the same time eliminated its energy concentration trading
policy. The Partnership thereafter has traded futures contracts
and options on futures contracts on a diversified portfolio of
financial instruments and precious metals as well as forward
contracts on currencies. In November 2003 the Partnership
changed its name to its present form.
The initial public offering of the Partnership's Units of
limited partnership interests (Units) pursuant to a
registration statement on Form S-18 and Prospectus was declared
effective and commenced on or about December 6, 1988. On
February 1, 1989, the initial offering period for the
Partnership was terminated, by which time the Net Asset Value of
the Partnership was $2,140,315.74. Beginning February 2, 1989,
an extended offering period commenced which terminated on July
31, 1989, by which time a total of 5,065.681 Units of Limited
Partnership Interest were sold. Effective May, 1995 the
Partnership ceased to report as a public offering. On July 1,
1995 the Partnership recommenced the offering of its Units as a
Regulation D, Rule 506 private placement, which continues to the
present with a total of 53558.62 additional Units sold for
$100,216,376 since July 1, 1995 through December 31, 2003.
During its operation, the Partnership has had various advisors.
In December 1990, John W. Henry & Company, Inc. (JWH) began
trading for the Partnership as one of the Partnership's trading
advisors. In May 1994, JWH became the sole advisor to the
Partnership. In March 1996, the Partnership transferred all of
its assets to, and became the sole limited partner of, Everest
Futures Fund II, L.P. (Everest II) and JWH began trading for
Everest II. In July 2000, the Partnership redeemed approximately
50% of its assets from Everest II and allocated them to Trilogy
Capital Management, LLC's (Trilogy) Barclay Futures Index Program
(BFIP). The Partnership instructed Trilogy to trade its account
using twice the leverage of Trilogy's un-leveraged portfolio to
attempt to achieve a return greater than the return of the Index
before fees and expenses. Effective as of the close of business
August 31, 2000, the Partnership liquidated the balance of its
investment in Everest II and opened a trading account directly
with JWH. JWH has used its Financial and Metals Portfolio while
trading for Everest II and the Partnership through June 30, 2001.
Beginning July 1, 2001, JWH began trading its Strategic
Allocation Program for the Partnership with a trading allocation
of $40 million. Trilogy was terminated as trading advisor June
30, 2001. Effective September 1, 2001, Mount Lucas Management
Corporation (MLM) was added as trading advisor with an initial
allocation of $10 million. This allocation represented notional
funding for the Partnership. Effective June 12, 2003 JWH began
trading its GlobalAnalyticsR Family of Programs, Worldwide Bond
Program and Currency Strategic Allocation Programs for the
Partnership. Mount Lucas Management was terminated as trading
advisor on October 31, 2003.
The Partnership clears all of its futures and options on futures
trades through Cargill Investor Services, Inc. (CIS), its
clearing broker, and all of its cash trading through CIS
Financial Services, Inc. (CISFS), an affiliate of CIS.
On September 13, 1996 the Commission accepted a voluntary filing
by the Partnership of a Form 10 - General Form for Registration
of Securities, and public reporting of Units of the Partnership
sold as a private placement commenced at that time and has
continued to the present.
Upon fifteen days written notice, a Limited Partner may require
the Partnership to redeem all or part of his Units effective as
of the close of business (as determined by the General Partner)
on the last day of any month at the Net Asset Value thereof on
such date. Notwithstanding the above, pursuant to the Amended and
Restated Agreement of Limited Partnership, the General Partner
may, in its sole discretion, and on ten days' notice, require a
Limited Partner to redeem all or part of his Units in the
Partnership as of the end of any month. There are no additional
charges to the Limited Partner at redemption. The Partnership's
Amended and Restated Agreement of Limited Partnership contains a
full description of redemption and distribution procedures.
Since commencing trading operations, the Partnership has engaged
in the speculative trading of Commodity Interests and will
continue to do so until its dissolution and liquidation, which
will occur on the earlier of December 31, 2020 or the
occurrence of any of the events set forth in Paragraph 4(a) of
the Agreement of Limited Partnership. Such events are (i) an
election to dissolve the Partnership made by over 50% of the
Limited Partnership Units at least 90 days prior to dissolution,
(ii) withdrawal, insolvency, or dissolution of the General
Partner (unless a new general partner is substituted), (iii)
decline in the Net Asset Value of the Partnership at the close
of any business day to less than $300,000, or (iv) any event
which will make it unlawful for the existence of the Partnership
to be continued or requiring termination of the Partnership.
The address of the General Partner and the Partnership is 1100
North 4th Street, Suite 143, Fairfield, Iowa 52556, and the
telephone number is (641) 472-5500. The General Partner changed
its name as of March 1, 1994 and amended its Certificate of
Incorporation, with no other changes, accordingly. In
accordance with the provisions of the Commodity Exchange Act and
the rules of the National Futures Association (NFA), the General
Partner is registered as a commodity pool operator and a
commodity trading advisor, JWH is registered as a commodity
trading advisor and the Commodity Broker is registered as a
futures commission merchant, each subject to regulation by the
Commodity Futures Trading Commission (CFTC). Each is also a
member of the NFA in such capacity.
The General Partner to the exclusion of the limited partners of
the Partnership (the "Limited Partners"), manages and conducts
the business of the Partnership. Thus the General Partner (i)
selects and monitors the independent commodity trading advisor(s)
and the Commodity Broker; (ii) allocates and/or reallocates
assets of the Partnership to or from JWH and/or the advisor(s);
(iii) determines if an advisor or commodity broker should be
removed or replaced; (iv) negotiates management fees, incentive
fees and brokerage commissions; (v) determines its own
compensation with respect to management and administrative fees;
and (vi) performs such other services as the Partnership may from
time to time request, except that all trading decisions are made
by JWH and not the General Partner. In addition, the General
Partner selects the commodity broker(s) that will clear trades
for the advisor(s). Cargill Investor Services, Inc. currently
acts as Everest's commodity broker and CIS Financial Services,
Inc., an affiliate of Cargill Investor Services, Inc., acts as
Everest's currency dealer.
The General Partner is responsible for the preparation of
monthly and annual reports to the Limited Partners; filing
reports required by the CFTC, the NFA, the SEC and any other
federal or state agencies having jurisdiction over the
Partnership's operations; calculation of the Net Asset Value
(meaning the total assets less total liabilities of the
Partnership {for a more precise definition, see the Exhibit
"Form 10 - General Form for Registration of Securities"
incorporated by reference hereto}) and directing payment of the
management and incentive fees payable to JWH or the
advisor(s)under an advisory agreement(s) entered into with the
commodity trading advisor(s).
Everest pays the Commodity Broker a brokerage commission
charge equal to 0.50% of the Partnership's Beginning Net Asset
Value as of the beginning of each month (approximately 6.0%
annually). Prior to November 1, 2003, the brokerage commission
charge was equal to 0.5166% per month (approximately 6.1875%
annually.) Approximately 83% of this amount is rebated by the
Commodity Broker to the General Partner. If there is a material
change in Everest's brokerage commission structure, investors and
Limited Partners will be informed in writing. The Commodity
Broker may, in the future, increase the fee charged to Everest.
The General Partner in turn pays a portion of such amount to the
Selling Agent and additional selling agents as ongoing
compensation. In addition, the Partnership reimburses the
General Partner for the actual organization and offering
expenses advanced by it, not to exceed one percent of the Net
Asset Value of Units sold. Organization and offering expenses
shall mean all expenses incurred by the Partnership or the
General Partner in connection with and in preparation to offer
and distribute the Units to investors, including, but not
limited to, expenses for traveling, printing, engraving,
mailing, salaries of employees while engaged in sales activity,
charges of transfer agents, registrars, trustees, escrow holder,
depositories, experts, expenses of qualification of the sales of
its securities under state law, including taxes and fees and
accountants' and attorneys' fees.
Everest pays John W. Henry & Company, Inc., its current commodity
trading advisor, a monthly management fee equal to 0.167%
(approximately 2% annually) of Everest's month-end Allocated
Assets, as defined, and a quarterly incentive fee equal to 20%
(15% April 1, 1995 through October 1, 2000) of Everest's trading
profits allocable to its trading exclusive of interest income on
Allocated Assets, as defined. The incentive fee is retained by
JWH even though trading losses may occur in subsequent quarters;
however, no further incentive fees are payable until any such
trading losses (other than losses attributable to redeemed units
and losses attributable to assets reallocated to another advisor)
are recouped by Everest. Prior to October 1, 2000, the
management fee paid to JWH was 4% annually.
MLM received a monthly management fee of 0.0625% (0.75% annually)
of the Partnership's month-end allocated assets as defined. As
MLM used the MLM Index-Unleveraged, they did not receive an
incentive fee. Effective February 2003, the management fee was
reduced to 0.04167% (0.50% annually).
Trilogy received a monthly management fee equal to 0.075%
(approximately 0.90% annually) of Everest's month-end allocated
assets, as defined. Trilogy did not receive an incentive fee.
The Commodity Broker has agreed to pay Everest interest on the
Everest assets (including open trade equity) deposited with
it during a month at the average of 91-day U.S. Treasury Bills
purchased by the Commodity Broker during each month. The
Commodity Broker will retain all excess interest, if any, earned
on the Everest assets, above the amount of interest paid to
Everest. The interest rate to be paid by the Commodity
Broker to Everest is a negotiated rate which has been
negotiated between the Commodity Broker and the General Partner.
The actual interest income on Everest's assets earned by the
Commodity Broker may be greater than or less than the negotiated
rate to be paid by the Commodity Broker to Everest. The
Commodity Broker will also be responsible for execution and
clearance of futures contracts (and possibly certain other
Commodity Interests).
The Partnership pays no selling commission but does pay an
ongoing compensation fee equal to 3% of the Net Asset Value of
Units sold unless waived in whole or in part by the General
Partner, to Capital Management Partners, Inc. ("Capital") or the
additional selling agents in connection with the sale of the
Units. Capital is a CFTC-regulated introducing broker, and an
NFA member. Capital is also registered with the National
Association of Securities Dealers (NASD) as a broker dealer. The
General Partner may pay up to 100% of the funds it receives from
the Commodity Broker to Capital and the additional selling agents
as additional selling commission.
The Partnership is obligated to pay its periodic operating
expenses and extraordinary expenses. Although those expenses
will vary depending on the Partnership's size, it is estimated
that the periodic operating expenses will be approximately
$65,000 annually. Extraordinary expenses for these purposes
include expenses associated with significant non-recurring
litigation including, but not limited to, class action suits and
suits involving the indemnification provisions of the Agreement
of Limited Partnership or any other agreement to which the
Partnership is a party. By their nature, the dollar amount of
extraordinary expenses cannot be estimated. All expenses shall
be billed directly and paid for by the Partnership. The
Partnership's operating expenses for the years 1999-2003 can be
found in the table in Item 6 below.
The Partnership has no Employees. As of December 31, 2003, the
General Partner had 4 employees. Further, the General Partner,
in its capacity as a CFTC-regulated commodity pool operator,
contracts certain services of research, administration, client
support and management information systems and analysis to
Capital Management Partners, Inc. (Capital). As of December
31, 2003 Capital had 12 employees.
The Partnership's business constitutes only one segment for
financial reporting purposes; and the purpose of this limited
partnership is to trade, buy, sell, spread or otherwise acquire,
hold or dispose of Commodity Interests including futures
contracts, forward contracts, physical commodities and related
options thereon. The objective of the Partnership's business is
appreciation of its assets through speculative trading in such
Commodity Interests. Financial information about the
Partnership's business, as of December 31, 2003 is set forth
under Items 6 and 7 herein.
For a description of commodity trading and its regulation, see
the Prospectus filed on Form S-18 and the Confidential Private
Placement Memorandum filed as part of the Form 10 and included
in the exhibits hereto.
The Current Offering
On July 1, 1995 the Partnership reopened for investment as a
Regulation D, Rule 506 private placement offering an unlimited
amount of limited partnership interests. On September 19, 1996
the Commission accepted a Form 10 - General Form for
Registration of Securities submitted by the Partnership thereby
making the Partnership a public reporting private placement
offering. It also qualified the Partnership as a "publicly
offered security" as defined in the Employee Retirement Income
Security Act of 1974 (ERISA) rules permitted it to accept
investment of an unlimited amount of plan assets as defined in
ERISA. Hitherto, as a private placement the Partnership could
accept ERISA plan assets representing no more than 25% of the
total investment in the Partnership. The limited partnership
interests are offered by the Selling Agent and additional
selling agents with a minimum subscription amount of $25,000
(the minimum subscription amount for employee benefit plans and
individual retirement accounts is $10,000).
Competition
JWH and any other advisor(s) of the Partnership, its or their
respective principals, affiliates and employees are free to
trade for their own accounts and to manage other commodity
accounts during the term of the Advisory Agreement and to use
the same information and trading strategy which JWH obtains,
produces or utilizes in the performance of services for the
Partnership through its investment in Everest. To the extent
that JWH recommends similar or identical trades to the
Partnership and other accounts which it manages, the Partnership
may compete with those accounts for the execution of the same or
similar trades.
Other trading advisors who are not affiliated with the
Partnership may utilize trading methods which are similar in
some respects to those methods used by JWH, or any other future
Partnership's advisor(s). These other trading advisors could
also be competing with the Partnership for the same or similar
trades as requested by the Partnership's advisor(s).
Item 2. Properties
The Partnership does not utilize any physical properties in the
conduct of its business. The General Partner uses the offices of
the Selling Agent at no additional charge to the Partnership, to
perform their administrative functions, and the Partnership uses
the offices of the Selling Agent, again at no additional charge
to the Partnership, as its principal administrative offices.
Item 3. Legal Proceedings
In October 2000, there was a discrepancy between the performance
of the Barclay Futures Index Program (BFIP) as traded for the
Partnership and the Barclay Futures Index (BFI). Certain
transactions executed by Trilogy on behalf of the Partnership
resulted in a loss of approximately $520,000 that was recorded in
the statement of operations. The General Partner believes that
these transactions were not executed in accordance with the
provisions of BFIP and has demanded that Trilogy reimburse the
Partnership for the loss. The parties are currently attempting to
resolve the issue.
Until a final resolution is reached, the parties have agreed that
the management fees otherwise payable to Trilogy under its
advisory contract would be applied as a credit to offset the
losses. The offset is not in settlement, partial settlement, or
indemnification of any kind and is without prejudice to any
rights or claims by either side. Beginning in November 2000, and
until approximately July 1, 2001, at which time Trilogy was
terminated, all of the management fees that would otherwise be
paid to Trilogy were deposited into a separate account for the
benefit of those limited partners that were limited partners on
November 1, 2000 and to cover the expenses associated with the
collection of the losses. The separate account is not included in
the financial statements of the Partnership. After its
termination, Trilogy demanded that such fees be returned to it.
The General Partner rejected Trilogy's demand and is assessing
its options for collection.
A demand for arbitration was filed with the NFA on October 3,
2002. Trilogy has responded to the demand for arbitration and
has counterclaimed for the amount of $130,210, together with
attorney's fees, interest and costs of suit. That figure
represents the amount of management fees, otherwise payable to
Trilogy under its advisory contract, that both parties agreed
would be held as a credit to the Partnership to offset the
losses. The General Partner has a letter to that effect which
was signed by the president of Trilogy on January 29, 2001.
The General Partner anticipates a hearing in front of an NFA
arbitration panel in the coming months, but no date has been set
for the hearing. At the present time, the General Partner is
unable to determine whether any of the losses will be recovered.
Item 4. Submission of Matters to a Vote of Security Holders
A solicitation of consent to changes in the Agreement of Limited
Partnership was mailed to all Limited Partners in November 2003.
Summary of voting results: 14,662 units approving through consent
without response; 105 units approving through written consent; 62
units opposed.
Summary of matters voted upon:
1) Creation of multiple series for the fund.
2) Wider latitude for the General Partner to make changes in
the fund without seeking consent from the Limited Partners,
assuming such changes do not materially affect the Limited
Partners.
PART II
Item 5. Market for Registrant's Units & Related Security
Holder Matters
(a) There is no established public market for the Units
and none is expected to develop.
(b) As of December 31, 2003, there were 14,828.57 Units
held by Limited Partners and 0.42 held by the General Partner.
A total of 23,187.57 Units were redeemed by Limited Partners
and 198.07 units were redeemed by the General Partner from
January 1, 2001 to December 31, 2003. The Sixth
Amended and Restated Agreement of Limited Partnership for the
Partnership contains a full description of redemption and
distribution procedures.
(c) To date no distributions have been made to partners
of the Partnership.
The Agreement of Limited Partnership does not provide for a
regular or periodic cash distributions, but gives the General
Partner sole discretion in determining what distributions, if
any, the Partnership will make to its partners. The General
Partner has not declared any such distributions to date, and
does not currently intend to declare any such distributions.
Item 6. Selected Financial Data
1999 2000 2001 2002 2003
(In thousands, except amounts per Unit)
1. Operating Revenues $(4,695) $ (186) $4,688 $14,528 $8,613
2. Income (Loss) from
Continuing Operations (9,713) (3,969) 1,284 8,454 $4,846
3. Income (Loss)
Per Unit (405.66) (133.98) 48.46 405.48 184.01
4. Total Assets 41,849 43,075 42,235 43,174 34,590
5. Long Term Obligations 0 0 0 0 0
6. Cash Dividend per Unit 0 0 0 0 0
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Liquidity and Capital Resources
Most U.S. commodity exchanges limit by regulations the amount of
fluctuation in commodity futures contract prices during a single
trading day. These regulations specify what are referred to as
"daily price fluctuation limits" or "daily limits". The daily
limits establish the maximum amount the price of a futures
contract may vary either up or down from the previous day's
settlement price at the end of a trading session. Once the
daily limit has been reached in a particular commodity, no
trades may be made at a price beyond the limit. Positions in
the commodity could then be taken or liquidated only if traders
are willing to effect trades at or within the limit during the
period from trading on such day. Because the "daily limit" rule
only governs price movement for a particular trading day, it
does not limit losses. In the past, futures prices have moved
the daily limit for numerous consecutive trading days and
thereby prevented prompt liquidation of futures positions one
side of the market, subjecting commodity futures traders holding
such positions to substantial losses for those days.
It is also possible for an exchange or the CFTC to suspend
trading in a particular contract, order immediate settlement of
a particular contract, or direct that trading in a particular
contract be for liquidation only.
For the year ended December 31, 2003, Limited Partners redeemed
a total of 14,709.70 Units for $35,369,317 and the General
Partner redeemed a total of 21.54 Units for $52,069. For the
year ended December 31, 2002, Limited Partners redeemed a total
of 6191.54 Units for $11,104,729 and the General Partner redeemed
a total of 176.42 units for $325,526.
During 2003, investors purchased 8,946.66 Units (none of the
units were purchased by the General Partner) for $21,315,646.
As of December 31, 2003, Everest had no credit risk exposure
to a counterparty which is a foreign commodities exchange which
was material. Everest trades on recognized global futures
exchanges. In addition, over the counter contracts in the form
of forward foreign currency transactions are traded by Everest.
As of December 31, 2003, the Partnership had $1,842,505 on
deposit at CISFS. CISFS does not deal in foreign exchange
forwards, but acts as a broker, placing the trades immediately
with large banks having assets in excess of $100 million. At
the settlement date, all transactions with each of the banks are
netted and any excess or deficit is received from or sent to the
bank. All of the Partnership's foreign exchange transactions
are transacted in US dollars.
See Footnote 4 of the Financial Statements for procedures
established by the General Partner to monitor and minimize
market and credit risks for the Partnership. The General Partner
of Everest, reviews on a daily basis reports of the performance
of Everest, including monitoring of the daily net asset value of
Everest. The financial situation of the Commodity Broker is
monitored on a monthly basis to monitor specific credit risks.
The Commodity Broker does not engage in proprietary trading and
thus has no direct market exposure which provides the general
partner with assurance that the Partnership, will not suffer
trading losses through the
Commodity Broker.
Results of Operations
Effective June 12, 2003 JWH began trading its GlobalAnalyticsR
Family of Programs, Worldwide Bond Program and Currency Strategic
Allocation Programs for the Partnership. Mount Lucas Management
was terminated as trading advisor on October 31, 2003.
The Partnership's assets were traded 50% by the John W. Henry &
Company, Inc. Financial and Metals Portfolio (JWH) until June 30,
2001. Beginning July 1, 2001 The Partnership invested 100% of
its cash position in the John W. Henry & Company, Inc. Strategic
Allocation Program. The 50% allocation to the Trilogy Barclay
Futures Index Program was terminated June 30, 2001.
In September 2001 the Partnership began an allocation to another
futures index fund, the MLM Index Program (Unleveraged), managed
by Mount Lucas Management Corporation (MLM) in Princeton, NJ.
At December 31, 2003 the Partnership had approximately $34.6
million in assets. The JWH allocation was approximately $33.2
million.
The Partnership recorded a gain of $4,845,876, or $184.01 per
unit, for the year 2003. That represents a gain of 8.88% for the
year.
The Partnership recorded a gain of $6,420,752 or $311.51 per Unit
for the first quarter of 2003. This compares to a loss of
$5,278,393 or $212.95 per Unit for the first quarter of 2002.
The Partnership continued to employ the John W. Henry & Company,
Inc. Strategic Allocation Program (JWH SAP) as its core manager,
and the Mount Lucas Management Corporation MLM Index
(Unleveraged) (MLM) for an overlay program. In January the fund
gained 16.02%. JWH was up 14.43%, with MLM adding 2.66%. The
JWH investment style took advantage of uncertainty in the energy
markets, a weakening dollar, and a poor global economic outlook.
All sectors of the program made a positive contribution in
January. MLM had profits in energies primarily, followed by
financials and currencies. Although the media had focused on the
impending war with Iraq and the strike in Venezuela and the
effect these events were having on crude oil prices, the best
performing part of the energy sector was natural gas. The
Partnership posted a gain of $6,842,542 or $331.95 per Unit in
January.
In February the Partnership gained 8.56%. JWH had a gain of 7.45%
as the program continued to profit from long term trends,
primarily in the energy and fixed income markets. The impending
war with Iraq, slowing global economies, weaker US dollar and
high energy prices are the factors that propelled market prices
in the Fund's favor.
MLM had a profit of approximately 1%, and as was the case in
January, the positive performance was driven by the energy
sector. Gains were also seen in the currencies, financials and
grains with smaller overall losses in meats, metals and softs.
The Partnership posted a gain of $4,252,181 or $205.92 per Unit
in February.
In March the Fund had a loss of 8.67%. JWH was down 6.81% for
March with the US-led coalition's war on Iraq taking center stage
in financial and energy markets. A week before the actual war
started, the markets anticipated a quick victory. The US dollar
strengthened, interest rates rose, and energy markets collapsed.
The quick change in direction of the markets resulted in negative
performance for the month of March.
MLM lost approximately 2% for the Fund in March, not surprisingly
driven by market reaction to the war. The largest losses came in
the energy sector followed by metals, softs and financials.
Grains were positive. The Partnership posted a loss of
$4,673,971 or $226.36 per Unit in March.
During the quarter, additional Units sold consisted of 1,955.36
limited partnership units; there were no general partnership
units sold during the quarter. Additional Units sold during the
quarter represented a total of $4,857,896. Investors redeemed a
total of 8,173.04 Units during the quarter and the General
Partner redeemed 21.65 Units. At the end of the quarter there
were 14,374.35 Units outstanding (including 0.42 Units owned by
the General Partner).
Effective February 1, 2003, Peter Lamoureux, President of Everest
Asset Management, Inc. (EAM) became the majority shareholder and
sole director of EAM. Steven Foster and Steven Rubin are no
longer principals, directors or shareholders.
Effective March 7, 2003, EAM dismissed KPMG LLP as certifying
accountant for the Partnership. Spicer, Jeffries, & Co. was
engaged as the Registrant's independent accountant effective
March 10, 2003.
During the fiscal quarter ended March 31, 2003, the Partnership
had no credit exposure to a counterparty, which is a foreign
commodities exchange, or to any counter party dealing in over the
counter contracts, which was material.
The Partnership recorded a gain of $230,943 or $18.77 per Unit
for the second quarter of 2003. This compares to a gain of
$10,469,356.00 or $456.94 per Unit for the second quarter of
2002.
The Partnership continued to employ John W. Henry & Company, Inc.
(JWH) as its core manager, and Mount Lucas Management
Corporation's MLM Index (Unleveraged) (MLM) for an overlay
program. In April the fund gained 1.67%. JWH was up 2.41%,
while MLM lost 0.73%. For JWH, energies were the best performing
sector as the end of the war in Iraq put considerable downside
pressure on the price per barrel. Currencies, fixed income and
stock indices were also profitable. Agriculturals were down
slightly. The initial enthusiasm for the U.S. Dollar after the
war was short-lived, bond prices continued higher. Most equity
markets rallied around the world, encouraged by the swift victory
by coalition forces in Iraq. The exception was the NIKKEI 225 in
Japan, which succumbed to continuing Japanese domestic problems.
The MLM Index Program (Unleveraged) had losses in energy and
softs, which were only partially offset by gains in currencies,
grains and livestock. The Partnership posted a gain of
$572,164.00 or $39.80 per Unit in April.
In May 2003 the Partnership gained 5.30%. JWH had a gain of
5.61% with fixed income being the best performing sector. Yields
continued to trend lower in Japan and the U.S. Currencies were
positive with the U.S. Dollar still weakening. JWH had losses in
stock indices, energies and metals. The MLM Index Program
(Unleveraged) was essentially flat for the month, down .25 basis
points. The Partnership posted a gain of $1,259,525 or $128.52
per Unit in May.
In June 2003 the Fund had a loss of 5.86%. In mid June the
General Partner effected a re-allocation within the JWH
investment. The Partnership withdrew from the JWH SAP Program
and allocated approximately 55% to the JWH GlobalAnlaytics
Program, 23% to the JWH Currency Strategic Allocation Program,
and 22% to the JWH Worldwide Bond Program.
The month started out promising for JWH but turned abruptly
negative during the last two weeks of the month. Two trends that
were re-established after the war-a weakening dollar and falling
global interest rates- reversed course sharply as hints of
improving economic times forced liquidation of large positions in
fixed income and currency markets. JWH lost in fixed income,
energies, currencies, metals, and agriculturals. MLM lost
approximately 1.32% for the Fund in June. Gains in energy and
grain sectors were not enough to overcome losses in currencies,
financials, metals and softs. The Partnership posted a loss of
$1,600,746.00 or $149.55 per Unit in June.
During the quarter, additional Units sold consisted of 3,511.51
limited partnership units; there were no general partnership
units sold during the quarter. Additional Units sold during the
quarter represented a total of $8,606,645. Investors redeemed a
total of 5,723.74 Units during the quarter and the General
Partner redeemed zero Units. At the end of the quarter there
were 12,162.13 Units outstanding (including 0.42 Units owned by
the General Partner). During the second quarter 2003, Randy
Kelsey, branch manager of the Minneapolis office was terminated.
His duties have been taken over by Everest Asset Management
president, Peter Lamoureux.
During the fiscal quarter ended June 30, 2003, the Partnership
had no credit exposure to a counterparty, which is a foreign
commodities exchange, or to any counter party dealing in over the
counter contracts, which was material.
The Partnership recorded a loss of $2,312,751or $ 178.73 per Unit
for the third quarter of 2003. This compares to a gain of
$7,031,585 or $354.40 per Unit for the third quarter of 2002.
The Partnership continued to employ John W. Henry & Company, Inc.
as its core manager, and the Mount Lucas Management Corporation
MLM Index TM (Unleveraged) (MLM) for an overlay program.
In July 2003 the Fund was down 4.39%. JWH was down 0.99% in
July. July was a difficult trading month, as there were
significant trend reversals in major markets that resulted in a
loss for the month. Signs of economic recovery have strengthened
the US dollar, caused global interest rates to rise, stock prices
to rise and higher base metal prices. JWH had profits in energy,
fixed income and equity index sectors with (overall) larger
losses in foreign exchange, metals and agriculturals. The MLM
Index TM Program (Unleveraged) was down 3.53% in July. This was
the second largest monthly loss for the MLM Index since it began
trading for the fund in September of 2001. The Index had a gain
in only one market sector- livestock. Losses came in financials,
softs, grains, currencies and energies. High levels of
volatility moved into the financial sector, as the bond market
had one of its biggest drops on record. This action combined
with the continued choppiness in the physical commodities, is the
prototype for tough performance for the Index. Positions in the
Index were flipping sides (long to short, short to long) more
than is typical.
The Partnership recorded a loss of $1,283,432 or $105.53 per unit
in July. Effective July 30, 2003, Janet Mullen retired as Vice
President of Everest Asset Management.
In August 2003 the Partnership posted a gain of 1.51%. In August
JWH was up 1.56% and the MLM Index Program (Unleveraged) was down
0.04%. As a result of global markets responding to improving
economic conditions in the US, Japan and to a lesser degree,
Europe, interest rates continue to move higher and the US dollar
has strengthened against most major currencies. Energy markets,
with the exception of natural gas, continued to grind higher.
These trending markets resulted in a profitable August for JWH.
Gains came in fixed income, equity indices, energies and metals.
Smaller overall losses came in currencies and agriculturals. MLM
Index Program (Unleveraged) was essentially flat for the month.
The Partnership recorded a gain of $449,550 or $34.59 per unit in
August 2003.
September 2003 saw a loss of 4.62% for the Fund. JWH posted a
loss of 2.72% in September. The trend that provided profits in
August abruptly turned around in September, resulting in a loss
for the month. The strength of the US recovery was in doubt
resulting in lower interest rates and the US dollar giving back
its recent gains. In addition OPEC announcements reversed the
decline in energy prices. For JWH the fixed income sector
incurred the largest loss in September, with energies following.
Currencies were positive, mostly from the Japanese yen. Metals
and agriculturals were up as well. The MLM Index Program
(Unleveraged) had a loss of 1.97% in September 2003. The Index
had gains in currencies, livestock and metals that were more than
offset by losses in energy, financials, grains and softs.
Positions continue to be flipping quite a lot as many markets
consolidate. The Partnership recorded a loss of $1,478,868 or
$107.79 per Unit in September 2003.
During the third quarter 2003, additional Units sold consisted of
2297.60 limited partnership units; there were no general
partnership units sold during the quarter. Additional Units sold
during the quarter represented a total of $5,252,765. Investors
redeemed a total of 132.98 Units during the quarter and the
General Partner redeemed 0 Units. At the end of the quarter
there were 14,326.75 Units outstanding (including 0.42 Units
owned by the General Partner).
During the fiscal quarter ended September 30, 2003, the
Partnership had no material credit exposure to a counter-party
which is a foreign commodities exchange or to any counter-party
dealing in over the counter contracts which was material.
During the fourth quarter 2003 the Partnership gained 1.46% In
October the Partnership continued to employ John W. Henry and
Company, Inc. (JWH) as its core manager and Mount Lucas
Management Corporation (MLM) and MLM Index (Unleveraged) for an
overlay program. The Fund was up 0.73% in October, with JWH down
2.66% and MLM up 3.49%
For JWH the tug of war between market fundamentals, government
policies and perceived economic growth and weakness provided
enough confusion in the financial markets to make trend following
very difficult. Losses were concentrated in fixed income,
energies and metals sectors. Smaller overall gains came in
currencies, equity indices and agriculturals.
MLM had gains in physical commodities and currencies, with
smaller losses in financials, for a gain of 3.49%. However, due
to disappointing performance over the last 24 months and the fact
that the Index and JWH have been more correlated than in the
previous two years while researching the combination, the
Partnership terminated its trading advisory agreement with MLM at
the end of October 2003.
In November 2003 the fund was traded solely by JWH, who had a
loss of 4.45% for the month. Smaller overall gains were posted
in currencies with the continued weakening of the US Dollar
against other major currencies, metals and gold. Losses came in
the fixed income sector, with the largest sector loss in the
Japanese 10 year government bonds. Indices were down in November
with the largest loss in the Osaka Nikkei as it fell 7% under
heavy selling, primarily from Japanese bank stocks. Energy and
agricultural products were also negative for November.
In December 2003 JWH was up 5.40% for the Fund. The end of the
year witnessed the continuation of the global rebalancing in
terms of a weaker US dollar against most major currencies.
Fixed-income markets had trouble developing sustainable tends in
the past few months. The energy markets remained strong most of
the year, despite anticipation that crude oil would return to a
lower twenty-dollar per barrel range after the Iraqi war.
Finally the effects of China's phenomenal economic growth and
appetite for raw materials propelled the price of base metals and
crude oil.
JWH had profits in currencies, energies and metals which more
than offset smaller losses in the fixed-income, stock indices and
agriculturals.
Since the commencement of trading on February 1, 1989 the
Partnership has experienced a cumulative gain of 127.85% through
December 31, 2003. For further discussion and analysis of
Financial condition please refer to the Notes to the Combined
Financial Statements attached hereto.
See Footnote 4 of the Financial Statements for procedures
established by the General Partner to monitor and minimize market
and credit risks for the Partnership. In addition to the
procedures set out in Footnote 4, the General Partner reviews on
a daily basis reports of the Partnership's performance, including
monitoring of the daily net asset value of the Partnership. The
General Partner also reviews the financial situation of the
Partnership's Clearing Broker on a monthly basis. The General
Partner relies on the policies of the Clearing Broker to monitor
specific credit risks. The Clearing Broker does not engage in
proprietary trading and thus has no direct market exposure, which
provides the General Partner assurance that the Partnership will
not suffer trading losses through the Clearing Broker.
2002
The Partnership recorded a gain of $8,454,389, or $405.48 per
unit, for the year 2002. That represents a gain of 24.32% for the
year.
The most difficult period for the Partnership in 2002 was the
first quarter, which saw a loss of 12.77%. In March both
managers, the JWH Strategic Allocation Program and the MLM Index
(Unleveraged), were substantially negative. JWH had losses in
currencies, particularly the Japanese Yen where government
intervention abruptly brought the yen above the 132 level and
created a volatile trading environment. The JWH positions in the
US dollar versus the British pound, the Swiss franc and the Euro
were negative as well as the yen. Losses were also incurred in
the global stock indices, particularly the Nikkei, DAX, Eurostoxx
and NASDAQ which all started the month on a positive note, but
either failed to continue or simply faltered and reversed trend.
JWH did post smaller overall profits in energies, interest rates,
and metals. After a small gain in January and a small loss in
February, the MLM Index (Unleveraged) had a loss of 5.88% for the
month, but the effect for the Partnership was somewhat mitigated
by the fact that the Index program was only approximately one
half allocated to the Partnership. Therefore, the loss from the
Index was approximately 2.96%. For the Index in March, dramatic
reversals, particularly in the energy markets, spurred by the
hope of a US recovery and escalating tension in the Middle East,
resulted in a very difficult month.
For the second quarter of 2002, the Partnership gained 31.43%.
Most of the gains came in May and June, particularly June, and
all of the gains came from JWH. In May JWH had a gain of 9.39%.
The theme for JWH was the weakening of the US dollar. The US
crisis in confidence brought about by corporate accounting
scandals and constant government warnings of possible further
terrorist attacks created a widespread repatriation of assets out
of the US. JWH also had profits in metals, with gold and silver
continuing to shine. In June the JWH program had a gain of
20.37%, coming largely form the continued weakness in the US
dollar against the major currencies. Continued accounting
irregularities further depressed the stock market while
triggering a flight from the US dollar. JWH also had profits from
interest rates and agriculturals, with losses coming from metals
as gold retreated form its highs. The MLM Index was negative for
the Partnership in all three months of the second quarter.
In the third quarter 2002 the Partnership had a gain of 18.55%.
JWH had solid gains in each month with MLM posting profits in
each month except July. JWH continued to take full advantage of
two recurring themes that have spurred significant trends: the
global economic slowdown and a possible war with Iraq. JWH had
profits in the interest rate sector as rates continued to decline
and in energies as prices continued to go up.
In the fourth quarter 2002, the Partnership had a overall loss of
8.52%. October and November saw losses of 8.97% and 6.84%
respectively, with a gain of 7.88% for December. As had been the
case for the whole year except the first quarter, JWH drove the
performance in both directions, with MLM essentially flat overall
for the quarter. The JWH program was adversely affected in
October by reversals in the fixed income, equity and energy
markets. Stronger than expected third quarter corporate earnings
as a result of increased operating leverage, one-time asset
sales, and reduced expenses propelled global equity indices
higher. This erased much of the deflationary fears in the market,
pushing interest rates higher. The energy markets acted keenly to
the US government's deferral to the United Nations on the subject
of Iraq. As a result the perceived war premium subsided, reducing
the price of crude oil. In November JWH had its largest losses in
the currency sector, with the Japanese yen the leading looser
followed by the British pound and the Swiss franc. Fixed income
was the second largest losing sector in November with the almost
daily alternation of positive and negative economic releases form
around the world making trading very difficult. JWH had losses in
the global stock indices, especially the Nikkei 225. The Middle
East tensions and the United Nations resolutions continued to
affect the energy markets, creating a challenging environment,
with losses for the JWH program. Fortunately for the Partnership,
the JWH program had a strong performance in December, mostly
coming from foreign exchange and fixed income. A last minute
shift out of US assets for year-end considerations put heavy
pressure on the US dollar, and fears of continued slow economic
growth spurred a renewed rally in the bond market.
In summary, the core program of the partnership, the JWH
Strategic Allocation Program, had a very good year. The year 2002
for JWH can be broken up into four parts that closely correspond
to each quarter. The first quarter showed negative performance
due to a lack of trends in any of the major market sectors.
Markets were unable to decide on a direction in the aftermath of
September 11 and the first mild US recession in a decade. The
second quarter corresponded to a major dollar sell off and was
the best performing quarter of the year for JWH with significant
profits being generated in the currency markets. A wider interest
rate differential in favor of Europe, looser monetary policy in
the United States, and an outflow of capital in response to the
poor equity markets, all contributed to this dollar weakening.
This was the most significant adjustment in the dollar rally in
years. The third quarter saw a great decline in interest rates,
with global bond markets rallying in all major countries. This
rally led to significant returns from trading the interest rate
sector. The backdrop for this decline was somewhat anticipated
due to poor to modest economic growth around the world. The
fourth quarter started out with a significant retracement in
interest rates; however, December saw another lowering in the
value of the dollar, and a clear signal ending the long-term
dollar rally, which has lasted since before the introduction of
the Euro.
Behind these adjustments in currencies and bonds, the bear market
in equities around the world continued for the third straight
year. There were significant stock declines, particularly in the
third quarter. In the commodity markets, droughts in the wheat,
corn and soybean belts for the US as well as in Canada and
Australia caused a spike in prices. In spite of the sluggish
world economic growth, the oil market moved higher in response to
Iraq War fears and the Venezuelan oil strike. The gold market saw
one of the biggest moves in years in response to overall market
uncertainty.
The MLM Index (Unleveraged) had a losing year for the
partnership. The major loss came in March as a result of reversal
in the energy sector that the system does not rebalance until the
end of each month. Historically, the MLM Index has underperformed
in transition years between expanding and contracting economic
growth of which 2002 was an example. In 2003 we intend to
increase the allocation to MLM to a 100% overlay by the end of
the first quarter or the beginning of the second quarter.
Since the commencement of trading on February 1, 1989 the
Partnership has experienced a cumulative gain of 159.47% through
December 31, 2002. For further discussion and analysis of
financial condition please refer to the Notes to the Combined
Financial Statements attached hereto.
2001
For the year, the Partnership was negatively correlated to the
equity indices. The Partnership was positive for the first and
third quarters and negative for the second and fourth quarters.
The S&P 500 was just the opposite. The Partnership had a
positive result of 2.78% for the year, while the S&P 500 was
negative 13.04%.
The Partnership recorded a gain of $4,275,321 or $163.15 per Unit
for the first quarter of 2001. This compares to a loss of
$5,502,945 or $200.52 per Unit for the first quarter of 2000.
The Partnership continued to employ two different trading
strategies for the first quarter 2001. The Fund was down 1.08%
in January. The John W. Henry & Company Financial and Metals
Portfolio (JWH) was profitable for the month due to interest rate
positions. A significant portion of the positive returns
occurred during the last days of the month surrounding the Fed
cut in rates on January 21st. In spite of the unusual action of
two 50 basis point rate cuts by the Fed in a single month, bond
prices actually declined by just over 2 points for January. All
the remaining sections traded, currencies, non-US stock indices
and metals, incurred losses. The Barclay Futures Index Program
(BFIP) had an allocation of approximately 50% of the Fund's
assets for the first quarter 2001. In January the Index had a
decline for the Fund of 6.03%. The largest losses came in the
energies and grains and overall six of the seven sub-indexes (or
sectors) were negative. The only exception was profits in softs,
especially sugar. All in all, the Partnership posted a loss of
$455,012 or $17.43 per Unit in January.
The Fund was up 0.78% in February. The JWH allocation was again
positive with gains in short term interest rates. The short term
rates reacted to central bank easing and the massive rally in the
Japanese government Bond as the Japanese economy showed signs of
sputtering, realized gains. After eliminating their zero
interest rate policy last August because of the belief that a
recovery was around the corner, the Bank of Japan is again
following a monetary policy of easing as rates were brought down
15 basis points. The Japanese stock market reacted and the
Nikkei stock index hit a 15 year low during February. Currencies
suffered losses for the month as they were affected by a
weakening in the euro, which offset some of the earlier gains
from the beginning of the year. Late in the month, the euro
tumbled to two-month lows against the dollar in the wake of
Turkey's lira currency float. Market concerns about European
bank exposure to Turkish assets helped push the euro, already
trending lower during the month, to fresh troughs. Metals were
slightly unprofitable for the month. The BFIP allocation of the
Fund lost 1.35%. The passive index had losses in metals and
currencies and profits in meats, softs, and energies. Overall,
the Partnership posted a gain of $318,381 or $12.51 per Unit in
February.
The Fund was up 10.42% in March. The JWH program was up 12.88%
with all four sectors being profitable. Currencies led the way
due to continued weakness in the Japanese yen, although the other
currencies were also profitable. Declining interest rates also
helped for the month, led by the Euro Bund and the Japanese
government bond. Many attributed the strength in bond prices to
be the result of the 'flight to safety' due to continued weakness
in the equity markets. Stock index trading was mixed and there
was a small gain in metals. The BFIP gained back its losses from
January and February with a positive 7.49% result in March. The
gains came in the softs, metals, grains, currencies and energies.
Smaller losses came in meats and financials. Overall, the
Partnership posted a gain of $4,411,952 or $168.07 per Unit in
March.
The Partnership recorded a loss of $3,358,859 or $128.90 per Unit
for the second quarter of 2001. This compares to a loss of
$4,221,518 or $151.95 per Unit for the second quarter of 2000.
The Partnership continued to employ two different trading
advisors for the second quarter 2001. The Fund had a loss of
7.31% in April as both advisors suffered losses. The JWH firm
had reversals of the trends that had created profits in the first
quarter, mostly in currencies and interest rates. The Barclay
Futures Index Program (BFIP) gave back most of its gains from
March with losses in six out of seven sectors traded. The
Partnership recorded a loss of $3,394,496 or $130.21 per unit in
April.
May was a positive month for the Fund (up 1.51%), with both JWH
and the BFIP showing profits. On the JWH side, currencies led
the way with the dollar showing strength against the Euro and
Swiss franc. Profits were also seen in the British pound.
Interest rate positions were slightly negative for JWH, as were
overseas stock indexes and metals. The BFIP had gains in 5 out
of 7 sectors traded. They were, in this order, softs, energies,
grains, financials and currencies. The two losing sectors were
metals and meats. The Partnership recorded a gain of $641,062 or
$24.92 per unit in May.
June saw a loss of 1.41% for the Fund. The JWH programs were
down 4.29% coming from losses in interest rate and currency
sectors. However, the JWH losses were somewhat offset by the
BFIP gain of 1.92% coming in six of their seven sectors traded.
The largest gain for BFIP came in softs, following by metals and
energies. The Partnership recorded a loss of $605,424 or $23.61
per Unit in June.
The Partnership recorded a gain of $2,164,094 or $84.89 per Unit
for the third quarter of 2001. This compares to a loss of
$1,597,603 or $58.14 per Unit for the third quarter of 2000.
At September 30, 2001, John W. Henry & Company, Inc. (JWH) was
managing approximately $42 million in allocated assets for the
Partnership, and Mount Lucas Management Corporation's MLM Index
(MLM) was managing approximately $10 million in allocated assets.
As of September 30, the Partnership had approximately $44 million
in assets.
In July, the Partnership had a loss of 3.92%. The JWH Strategic
Allocation Program replaced the JWH Financial and Metals Program
beginning in July. The month was one of transition, especially
for the currency markets, with a key reversal in the dollar's
upward movement and growing talk that the dollar trend may be
reaching an end. The currency sector under performed, while
diversified programs had more modest declines.
In July the MLM Index Program had not yet begun trading. The
Partnership had a loss of 1,651,375 or $64.87 per Unit in July.
In August, the Partnership had a gain of 5.63%. The monthly
performance was dominated by the active behavior of the central
banks, with easing by the Fed, the Bank of Japan, and the
European Central Bank (ECB). These actions drove trends in
interest rates and currencies. The most significant gains came
in European interest rates and the dollar/Euro exchange rate.
The MLM Program did not trade in August. The Partnership had a
gain of $2,282,136 or $89.45 per Unit in August.
In September, the Partnership had a gain of 3.59%. The JWH SAP
Program had a gain of 3.69%, making profits in the global bond
markets. Bond prices rose as investors came out of equities and
into bonds after the September 11th attacks on America. Profits
were made in precious metals, where prices rose as they often do
in a crisis. Profits were also made in overseas stock indices,
which tended to sell off as a reaction to the economic
uncertainties of the month.
The MLM Index Program received its first allocation in the month
of September and posted a gain of 0.67%. The Partnership
recorded a gain of $1,533,334 or $60.16 per Unit in September.
The Partnership had the JWH Strategic Allocation (SAP) program
for its core investment of approximately $44 million at the
beginning of the fourth quarter. In addition, the Partnership
had a $10 million notional allocation to the MLM Index Program
(Unleveraged).
In October JWH SAP had a profit of 3.94%, mostly from gains in
the interest rate sector and energies. The MLM overlay program
was also slightly positive at 0.31% overall. The Partnership was
up 3.82% for the month.
In November the Partnership had a loss of 14.72%. At JWH losses
were concentrated in the fixed-income markets. Bonds had rallied
much of the year, but this rally was reversed in November with
one of the sharpest sell offs in decades. Given the previous
strength in fixed income trends, these positions dominated risk
exposure and there were no trends in other markets to offset the
interest rate losses. The MLM Index Program (Unleveraged) had
losses in five out of seven sectors traded. As sentiment
switched from prolonged recession to swift recovery, commodity
and bond markets were driven against the trends.
In December the Partnership recovered some of the November loss
with a gain of 8.35%. The JWH gain was 8.61%, primarily from
currencies, especially the Japanese yen. Although profits were
posted in the European and North American bond positions with new
trends toward higher rates, the interest rate sector was down for
the month due to a loss in the Japanese 10 year bond. The MLM
had a gain of 0.48% from softs, grains, and currencies.
Overall, the Partnership had a loss of 4.07% for the fourth
quarter.
The Partnership ended the year 2001 with gain of $1,283,739.
Inflation
Inflation does have an effect on commodity prices and the
volatility of commodity markets; however, inflation is not
expected to have an adverse effect on the Partnership's
operations or assets.
Item 7(A). Quantitative and Qualitative Disclosures About Market
Risk
Introduction
Past Results Are Not Necessarily Indicative of Future Performance
The Partnership is a speculative commodity pool. The market
sensitive instruments held by it are acquired for speculative
trading purposes, and all or substantially all of the
Partnership's assets are subject to the risk of trading loss.
Unlike an operating company, the risk of market sensitive
instruments is integral, not incidental, to the main line of
business of the Partnership.
Market movements result in frequent changes in the fair market
value of the open positions of the Partnership and,
consequently, in its earnings and cash flow. The market risk of
the Partnership is influenced by a wide variety of factors,
including the level and volatility of interest rates, exchange
rates, equity price levels, the market value of financial
instruments, the diversification effects among the open positions
of the Partnership and the liquidity of the markets in which it
trades.
The Partnership can acquire and/or liquidate both long and short
positions in a wide range of different financial and metals
markets. Consequently, it is not possible to predict how a
particular future market scenario will affect performance, and
the past performance of the Partnership is not necessarily
indicative of its future results.
Value at Risk is a measure of the maximum amount which the
Partnership could reasonably be expected to lose in a given
market sector. However, the inherent uncertainty of the
Partnership's speculative trading and the recurrence in the
markets traded by the Partnership of market movements far
exceeding expectations could result in actual trading or
non-trading losses far beyond the indicated Value at Risk or the
experience of the Partnership to date (i.e., "risk of ruin"). In
light of the foregoing as well as the risks and uncertainties
intrinsic to all future projections, the inclusion of the
quantification included in this section should not be considered
to constitute any assurance or representation that the losses of
the Partnership in any market sector will be limited to
Value at Risk or by the attempts of the Partnership to manage its
market risk.
Standard of Materiality
Materiality as used in this section, "Qualitative and
Quantitative Disclosures About Market Risk," is based on an
assessment of reasonably possible market movements and the
potential losses caused by such movements, taking into account
the leverage, optionality and multiplier features of the market
sensitive instruments of the Partnership.
Quantifying the Trading Value at Risk of the Partnership
Qualitative Forward-Looking Statements
The following quantitative disclosures regarding the
market risk exposures of the Partnership contain "forward-looking
statements" within the meaning of the safe harbor from civil
liability provided for such statements by the Private Securities
Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of
1934). All quantitative disclosures in this section are deemed
to be forward-looking statements for purposes of the safe
harbor, except for statements of historical fact.
The risk exposure of the Partnership in the various market
sectors traded by the commodity trading advisor is quantified
below in terms of Value at Risk. Due to the mark-to-market
accounting of the Partnership, any loss in the fair value of the
Partnership's open positions is directly reflected in the
earnings (realized or unrealized) of the Partnership and cash
flow (at least in the case of exchange-traded contracts in which
profits and losses on open positions are settled daily through
variation margin).
Exchange maintenance margin requirements have been used by the
Partnership as the measure of its Value at Risk. Maintenance
margin requirements are set by exchanges to equal or exceed the
maximum losses reasonably expected to be incurred in the fair
value of any given contract in 95%-99% of any one-day intervals.
The maintenance margin levels are established by dealers and
exchanges using historical price studies as well as an
assessment of current market volatility (including the implied
volatility of the options on a given futures contract) and
economic fundamentals to provide a probabilistic estimate of the
maximum expected near-term one-day price fluctuation.
Maintenance margin has been used rather than the more generally
available initial margin, because initial margin includes a
credit risk component which is not relevant to Value at Risk.
In the case of market sensitive instruments which are not
exchange traded (almost exclusively currencies in the case of
the Partnership), the margin requirements for the equivalent
futures positions have been used as Value at Risk. In those
rare cases in which a futures-equivalent margin is not
available, margins of the dealers have been used.
In quantifying the Value at Risk of the Partnership, 100%
positive correlation in the different positions held in each
market risk category has been assumed. Consequently, the margin
requirements applicable to the open contracts have simply been
aggregated to determine each the aggregate Value
at Risk for each trading category. The diversification effects
resulting from the fact that the positions of the Partnership are
rarely, if ever, 100% positively correlated have not been
reflected.
The Trading Value at Risk in Different Market
Sectors of the Partnership
The following table indicates the trading Value at Risk
associated with the open positions of the Partnership by market
category as of December 31, 2003. All open position trading
risk exposures of the Partnership have been included in
calculating the figures set forth below. As of December 31,
2003, the total capitalization of the Partnership was
approximately $33.5 million.
December 31, 2003
% of Total
Market Sector Value at Risk Capitalization
Interest Rates $ 0.76 million 2.27%
Currencies $ 1.96 million 5.86%
Stock Indices $ 0.13 million 0.38%
Precious Metals $ 0.15 million 0.45%
Commodities $ 0.17 million 0.49%
Energies $ 0.94_million 2.81%
Total $ 4.11 million 12.26%
Material Limitations on Value at Risk as an Assessment of Market
Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable maintenance
margin requirement (maintenance margin requirements generally
ranging between approximately 1% and 10% of contract face value)
as well as many times the capitalization of the Partnership.
The magnitude of the open positions of the Partnership creates a
"risk of ruin" not typically found in most other investment
vehicles. Because of the size of its positions, certain market
conditions that are unusual, but historically recurring from time
to time, could cause the Partnership to incur severe losses over
a short period of time. The foregoing Value at Risk table, as
well as the past performance of the Partnership, give no
indication of this "risk of ruin."
Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. However, these balances (as
well as any market risk they represent) are immaterial.
The Partnership holds a portion of its assets in cash on deposit
with CIS and CISFS with the remainder on deposit with Horizon
Cash Management, LLC. (Horizon) in short term, highly liquid
investments. The Partnership has cash flow risk on these cash
deposits because if interest rates decline, so will the interest
paid out by CIS and CISFS at the 90-day Treasury bill rate. In
addition, should short term interest rates decline, so will the
interest earnings for assets on deposit with Horizon. The
Partnership assets managed by Horizon are deposited in an account
in the custodial department of Brown Brothers Harriman & Co., and
invested in U.S. government securities and other interest-bearing
obligations at the direction of Horizon. Horizon is responsible
for the investment management of the assets of the Partnership
not deposited with CIS as margin monies or held in partnership
operating accounts. Horizon is registered with the Securities
and Exchange Commission (SEC) as an investment adviser. Horizon
may invest in U.S. government securities and other instruments as
permitted by the Agreement. Horizon receives an annual fee of
0.25% payable monthly on the assets it manages. However, Horizon
only receives its service fee if the accrued monthly interest
income earned on the assets of the Partnership managed by Horizon
exceeds the 91-day U.S. Treasury Bill rate. As of December 31,
2003, the Partnership had approximately $32.9 million in cash on
deposit with CIS, CISFS and Horizon.
Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the
market risk exposures of the Partnership, except for (i) those
disclosures that are statements of historical fact and (ii) the
descriptions of how the Partnership and the Trading Advisor
manage the primary market risk exposures of the Partnership,
constitute forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. The primary market risk
Exposures of the Partnership as well as the strategies used and
to be used by the Trading Advisor for managing such exposures are
subject to numerous uncertainties, contingencies and risks, any
one of which could cause the actual results of the risk controls
of the Partnership to differ materially from the objectives of
such strategies. Government interventions, defaults and
expropriations, illiquid markets, the emergence of dominant
fundamental factors, political upheavals, changes in historical
price relationships, an influx of new market participants,
increased regulation and many other factors could result in
material losses as well as in material changes to the risk
exposures and the risk management strategies of the Partnership.
There can be no assurance that the current market
exposure and/or risk management strategies of the Partnership
will not change materially or that any such strategies will be
effective in either the short- or long-term. Investors must be
prepared to lose all or substantially all of their investment in
the Partnership.
The following were the primary trading risk exposures of the
Partnership as of December 31, 2003, by market sector.
Interest Rates. Interest rate risk is a major market exposure
of the Partnership. Interest rate movements directly
affect the price of the sovereign bond positions held by the
Partnership and indirectly the value of its stock index and
currency positions. Interest rate movements in one country as
well as relative interest rate movements between countries
materially impact the profitability of the Partnership. The
primary interest rate exposure of the Partnership is to interest
rate fluctuations in the United States and the other G-7
countries. However, the Partnership also takes positions in the
government debt of smaller nations - e.g., Australia. The
General Partner anticipates that G-7 interest rates will remain
the primary market exposure of the Partnership for the
foreseeable future. The changes in interest rates which have the
most effect on the Partnership are changes in long-term, as
opposed to short-term, rates. Most of the speculative positions
held by the Partnership are in medium to long-term instruments.
However, since February 2000, the JWH program added a European
short rate, the Euribor, which is closely tied to the actions of
the European Central Bank. This was done to add short term
interest rate diversification.
Currencies. The currency exposure of the Partnership is to
exchange rate fluctuations, primarily fluctuations which disrupt
historical pricing relationships between different currencies
and currency pairs. These fluctuations are influenced by
interest rate changes as well as political and general economic
conditions. The Partnership trades in a large number of
currencies, including cross-rates - i.e., positions between two
currencies other than the U.S. dollar. However, the
Partnership's major exposures have typically been in the
dollar/yen, dollar/Euro, dollar/Swiss franc, dollar/Australian
dollar and dollar/pound positions. The General Partner does not
anticipate that the risk profile of the Partnership's currency
sector will change significantly in the future. The currency
trading Value at Risk figure includes foreign margin amounts
converted into U.S. dollars with an incremental adjustment
to reflect the exchange rate risk inherent to the dollar-based
Partnership in expressing Value at Risk in a functional currency
other than dollars.
Stock Indices. The primary equity exposure of the Partnership is
to equity price risk in the G-7 countries. The stock index
futures traded by the Partnership are by law limited to futures
on broadly based indices. As of December 31, 2001, the
Partnership had no exposure in stock index futures. Ordinarily
the primary exposures are in the FTSE (England), Nikkei (Japan)
and All Ordinaries (Australia) stock indices. However, in
February 2000, the JWH firm added the German DAX Index Futures.
The General Partner anticipates little trading in non-G-7 stock
indices. The Partnership is primarily exposed to the risk of
adverse price trends or static markets in the major U.S.,
European and Japanese indices. (Static markets would not cause
major market changes but would make it difficult for the
Partnership to avoid being "whipsawed" into numerous small
losses.)
Metals. The metals market exposure of the Partnership is to
fluctuations in the price of gold and silver (precious metals)
and the base metals of copper, aluminum, zinc, and nickel at JWH.
Commodities. The exposure to commodities of the Partnership
from JWH GAP includes corn, soybeans, soybean meal, soybean oil,
wheat, and the softs of coffee, cotton, and sugar. as well as a
full complement of other agricultural commodities.
Energy. The exposure of the Partnership to energy contracts in
the JWH GAP is heating oil, unleaded gasoline, crude oil natural
gas and others.
Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following were the only non-trading risk exposures of the
Partnership as of December 31, 2003.
Foreign Currency Balances. The primary foreign currency balances
of the Partnership are in Japanese yen, Euros, British
pounds and Australian dollars. The Partnership controls the
non-trading risk of these balances by regularly converting these
balances back into dollars (no less frequently than twice a
month).
Cash Position. The Partnership holds a portion of its assets in
cash at CIS and CISFS, earning interest at 90% of the average
90-day Treasury bill rate for Treasury bills issued during each
month. The remainder is held at Horizon in short term liquid
investments.
Qualitative Disclosures Regarding Means of Managing Risk Exposure
The General Partner monitors the performance of the Partnership
and the concentration of its open positions, and consults with
the commodity trading advisor concerning the overall risk profile
of the Partnership. If the General Partner felt it necessary to
do so, the General Partner could require the commodity trading
advisor to close out individual positions as well as entire
programs traded on behalf of the Partnership. However, any such
intervention would be a highly unusual event. The General
Partner primarily relies on the commodity trading advisor's own
risk control policies while maintaining a general supervisory
overview of the Partnership's market risk exposures.
Risk Management
JWH attempts to control risk in all aspects of the investment
Process - from confirmation of a trend to determining the
optimal exposure in a given market, and to money management
issues such as the startup or upgrade of investor accounts. JWH
double checks the accuracy of market data, and will not trade a
market without multiple price sources for analytical input. In
constructing a portfolio, JWH seeks to control overall risk as
well as the risk of any one position, and JWH trades only
markets that have been identified as having positive performance
characteristics. Trading discipline requires plans for the exit
of a market as well as for entry. JWH factors the point of exit
into the decision to enter (stop loss). The size of the JWH
positions in a particular market is not a matter of how large a
return can be generated but of how much risk it is willing to
take relative to that expected return.
To attempt to reduce the risk of volatility while maintaining
the potential for excellent performance, proprietary research is
conducted on an ongoing basis to refine the JWH investment
strategies. Research may suggest substitution of alternative
investment methodologies with respect to particular contracts;
this may occur, for example, when the testing of a new
methodology has indicated that its use might have resulted in
different historical performance. In addition, risk management
research and analysis may suggest modifications regarding the
relative weighting among various contracts, the addition or
deletion of particular contracts from a program, or a change in
position size in relation to account equity. The weighting of
capital committed to various markets in the investment programs
is dynamic, and JWH may vary the weighting at its discretion as
market conditions, liquidity, position limit considerations and
other factors warrant.
JWH may determine that risks arise when markets are illiquid or
erratic, such as may occur cyclically during holiday seasons, or
on the basis of irregularly occurring market events. In such
cases, JWH at its sole discretion may override computer-generated
signals and may at times use discretion in the application of
its quantitative models, which may affect performance positively
or negatively.
Adjustments in position size in relation to account equity have
been and continue to be an integral part of the JWH investment
strategy. At its discretion, JWH may adjust the size of a
position in relation to equity in certain markets or entire
programs. Such adjustments may be made at certain times for
some programs but not for others. Factors which may affect the
decision to adjust the size of a position in relation to account
equity include ongoing research, program volatility, assessments
of current market volatility and risk exposure, subjective
judgment, and evaluation of these and other general market
conditions.
Item 8. Financial Statements and Supplementary Data
Reference is made to the financial statements and the notes
thereto attached to this report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
Part III
Item 10. Directors and Executive Officers of the Registrant.
The General Partner, Everest Asset Management, Inc., is the sole
General Partner and commodity pool operator of the Partnership.
It is a Delaware corporation incorporated in 1987, is and has
been registered with the CFTC as a commodity pool operator since
July 1, 1988 and is and has been a member of the National
Futures Association since that date. Its address is 1100 North
4th Street, Suite 143, Fairfield, Iowa 52556 and its
telephone number is (641) 472-5500.
The officers and directors of the General Partner as of December
31, 2003 are listed below:
Peter Lamoureux. Mr. Lamoureux, (born in 1950), has been
President, Treasurer and Secretary of the General Partner since
November 1996. He joined the General Partner and Capital
Management Partners, Inc., a selling agent and affiliate of the
Partnership, in 1991 and has had primary responsibility for
Partnership syndication since October 1994.. Prior to
joining the General Partner, Mr. Lamoureux was Manager of
Refined Products with United Fuels International, Inc., an
energy brokerage firm in Waltham, Massachusetts. He received
his B.S. in Education from Rhode Island College, R.I.
Effective June 20, 2002, Teresa M. Prange resigned as Principal
and Chief Financial Officer of Everest Asset Management, Inc.
Effective February 1, 2003, Mr. Lamoureux, President of the
General Partner became the majority shareholder and sole director
of Everest Asset Management, Inc., the General Partner. Mr.
Rubin and Mr. Foster are no longer principals, directors, or
shareholders. Effective July 30, 2003 Janet A. Mullen retired as
Vice-President of Client Services There are no material changes
in the operations of the firm.
The General Partner does not trade commodities for its own
account but its principals may. Because of their confidential
nature, records of such trading will not be available to Limited
Partners for inspection.
There have been no material criminal, civil or administrative
actions during the preceding five years or ever against the
General Partner or its principals.
Item 11. Executive Compensation.
The Partnership has no directors or executive officers. As a
limited partnership, the business of the Partnership is managed
by its General Partner which is responsible for the
administration of the business affairs of the Partnership and
receives the compensation described in Item 1 "Business" hereof.
The officers and directors of the General Partner receive no
compensation from the Partnership for acting in their respective
capacities with the General Partner.
Item 12. Security Ownership of Certain Owners and Management.
(a) As of December 31, 2003 the following persons
were known to the Partnership to own beneficially
more than 5% of the outstanding Units: NONE
(b) As of December 31, 2003, the General Partner
beneficially owned 0.42 Units or approximately 0.00% of the
outstanding Units of the Partnership. Mr. Peter Lamoureux,
President of the General Partner owned 5.187 Units or 0.003% of
the outstanding Units.
(c) As of December 31, 2003, no arrangements were known
to the Partnership, including no pledge by any person of Units of
the Partnership or shares of the General Partner or the
affiliates of the General Partners, such that a change in control
of the Partnership may occur at a subsequent date.
Item 13. Certain Relationships and Related Transactions.
(a) None other than the compensation arrangements
described herein.
(b) None.
(c) None.
(d) The Partnership filed Registration Statements on
Form S-18 and Form 10, therefore this information is
not required to be included.
Part IV
Item 14. Exhibits, Financial Statements, Schedules and
Reports on Form 8-K
(a) The following documents are included herein:
(1) Financial Statements:
a. Independent Auditors Report.
b. Statements of Financial Condition as of
December 31, 2003 and 2002.
c. Statements of Operations, Statements of
Changes in Partners' Equity, and
Statements of Cash Flows for the years
ended December 31, 2003, 2002, and 2001.
d. Notes to Financial Statements.
e. Schedule of Investments as of December 31,
2003.
(2) All financial statement schedules have been
omitted because the information required by the schedules
not applicable, or because the information required is
contained in the financial statements included herein or
the notes thereto.
(3) Exhibits:
See the Index to Exhibits annexed hereto.
(b) Reports of Form 8-K:
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Partnership has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: March 18, 2004 The Everest Fund, L.P.
By: Everest Asset Management, Inc.
(General Partner)
By: /s/ Peter Lamoureux
Peter Lamoureux, President
Secretary, Treasurer, and Director
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 Partnership and in the capacities and on the
date indicated.
Date: March 18, 2004
By: /s/ Peter Lamoureux
Peter Lamoureux, President,
Secretary, Treasurer, and Director
Index to Exhibits:
Exhibit
No. Description
3.4 Amended and Restated Agreement of Limited Partnership
dated as of May 1, 1995.
10.5 Advisory Contract between the Partnership, the General
Partner and John W. Henry & Company, Inc. dated
December 1, 1990.
10.6 Amendment to Advisory Contract between the Partnership,
the General Partner and John W. Henry & Company, Inc.
dated April 1, 1995.
10.9 Certificate of Limited Partnership for Everest Futures
Fund II L.P. dated March 15, 1996.
10.10 Limited Partnership Agreement for Everest Futures Fund
II L.P. dated as of March 29, 1996.
28.1 Confidential Private Placement Memorandum and Disclosure
Document dated August 21, 1996.
Notes to the Exhibits:
Exhibits 3.4, 10.5, 10.6, 10.9, 10.10 and 28.1 are incorporated
by reference to the Partnership's Form 10 accepted on September
19, 1996.
The Exhibits referenced above bear the exhibit numbers
corresponding to those indicated in the Partnership's
Registration Statements.
Number of Attached Exhibits
None.
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
I, Peter Lamoureux, certify that:
1. I have reviewed this annual report on Form 10-K of The Everest
Fund, L.P.;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this annual
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this annual report;
4. I am responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14
and 15d-14) for the registrant and have:
(a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this annual report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this annual report (the "Evaluation Date"); and
(c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. I have disclosed, based on my most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. I have indicated in this annual report whether there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
THE EVEREST FUND, L.P.
Date: March 18, 2004 By: Everest Asset Management, Inc.,
its General Partner
By: /s/ Peter Lamoureux
Peter Lamoureux
Director, President, and Treasurer
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2003,
2002 AND 2001
Page
Independent Auditors' Reports 2-3
Financial Statements:
Statements of Financial Condition, December 31, 2003 and 2002 4
Statements of Operations,
Years Ended December 31, 2003, 2002 and 2001 5
Statements of Changes in Partners' Capital,
Years Ended December 31, 2003, 2002 and 2001 6
Schedule of Investments, December 31, 2003 7-8
Schedule of Investments, December 31, 2002 9-10
Notes to Financial Statements 11
Acknowledgement 16
INDEPENDENT AUDITORS' REPORT
To the Partners of Everest Fund, L.P. (formerly Everest Futures Fund, L.P.)
We have audited the accompanying statement of financial condition,
including the condensed schedule of investments, of Everest Fund, L.P.
(An Iowa Limited Partnership), (the "Partnership") as of December 31, 2003
and 2002, and the related statements of operations and changes in
partners' capital for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audits 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 financial statements referred to above present
fairly, in all material respects, the financial position of the Everest
Fund, L.P. (An Iowa Limited Partnership) as of December 31, 2003 and
2002, and the results of its operations and changes in partners' capital
for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.
/s/SPICER JEFFRIES LLP
Greenwood Village, Colorado
February 6, 2004
INDEPENDENT AUDITORS' REPORT
To the Partners of
Everest Futures Fund, L.P.
We have audited the accompanying statements of operations and changes
in partners' capital of Everest Futures Fund, L.P. (the Partnership)
for the year ended December 31, 2001. 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 audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 audit provides
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of operations and changes in partners'
capital of the Partnership for the year ended December 31, 2001, in
conformity with accounting principles generally accepted in the United
States of America.
/s/ KPMG LLP
Chicago, Illinois
March 8, 2002
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
STATEMENTS OF FINANCIAL CONDITION
December 31,
2003 2002
ASSETS
Cash and cash equivalents $17,674,473 $ 466129
Equity in Cargill Investor Services, Inc.
trading accounts:
Cash 4,480,683 14,452,134
Net unrealized trading gains on open contracts 1,670,155 5,429,931
Investments, at fair value 10,720,039 22,810,860
Interest receivable 44,467 14,624
TOTAL ASSETS $34,589,817 $43,173,678
TOTAL LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES:
Redemptions payable $ 898,770 $ 167,638
Commissions payable 143,319 150,029
Advisor management fee payable 56,183 84,985
Accrued expenses 30,705 50,322
TOTAL LIABILITIES 1,128,977 452,974
PARTNERS' CAPITAL:
General Partner 0.42 and 22.07 units outstanding 938 45,742
Limited Partners 14,828.57 and 20,591.62
units outstanding 33,459,902 42,674,962
TOTAL PARTNERS' CAPITAL 33,460,840 42,720,704
TOTAL LIABILITIES AND PARTNERS' CAPITAL 34,589,817 $43,173,678
The accompanying notes are an integral part of these statements
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
STATEMENTS OF OPERATIONS
Year Ended December 31,
2003 2002 2001
TRADING INCOME:
Net realized trading gain on closed contracts $11,820,247 $10,740,775 $5,404,495
Change in net unrealized trading gain (loss)
on open contracts (3,759,776) 3,036,849 (2,533,546)
Net foreign currency translation gain 111,596 13,908 73,233
Brokerage commissions (2,160,598) (2,413,505) (2,563,850)
TOTAL TRADING INCOME 6,011,469 11,378,027 380,332
Interest income, net of cash management fees 441,270 737,211 1,744,048
TOTAL INCOME 6,452,739 12,115,238 2,124,380
EXPENSES:
Management fees 841,768 951,117 751,263
Incentive fees 712,054 2,645,119 29,399
Administrative expenses 53,041 64,613 59,979
TOTAL EXPENSES 1,606,863 3,660,849 840,641
NET INCOME $ 4,845,876 $ 8,454,389 $ 1,283,739
NET INCOME PER UNIT OF
PARTNERSHIP INTEREST (FOR A UNIT
OUTSTANDING THROUGHOUT EACH YEAR) $ 184.01 $ 405.48 $ 48.46
The accompanying notes are an intergal part of these statements
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
YEAR ENDED DECEMBER 31, 2003, 2002 AND 2001
Total General Limited
Partner Partners
BALANCES, December 31, 2000 $ 42,249,922 $ 321,258 $ 41,927,664
Sale of 1,288.52 partnership units,
net of offering costs 2,101,547 0 2,101,547
Redemption of 2,286.33
partnership units (3,783,769) 0 (3,783,769)
Net income 1,283,739 9,616 1,274,123
BALANCES, December 31, 2001 41,850,439 330,874 41,519,565
Sale of 1,875.77 partnership units,
net of offering costs 3,846,131 0 3,846,131
Redemption of 6,367.96
partnership units (11,430,255) (325,526) (11,104,729)
Net income 8,454,389 40,394 8,413,995
BALANCES, December 31, 2002 42,720,704 45,742 42,674,962
Sale of 8,946.66 partnership units,
net of offering costs 21,315,646 0 21,315,646
Redemption of 14,731.36
partnership units (35,421,386) (52,069) (35,369,317)
Net income 4,845,876 7,265 4,838,611
BALANCES, December 31, 2003 $ 33,460,840 $ 938 $ 33,459,902
The accompanying notes are an integral part of these statements.
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
CONDENSED SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
Carrying
Long Positions: Number of Principal Value
Futures Positions: (1.82%) Contracts (Notional) (OTE)
Interest Rates 530 $ 82,606,630 $ (117,961)
Metals 180 6,782,700 431,400
Energy 235 7,325,704 174,704
Agriculture 280 5,575,320 71,028
Currencies 105 25,683,000 15,275
Indices 35 1,462,180 36,089
129,435,534 610,535
Forward Positions: (3.97%)
Currencies 91,521,631 1,327,609
Total long positions $ 220,957,165 $ 1,938,144
Short Positions:
Futures Positions: (-0.15%)
Indices 8 (797,946) (49,918)
Forward Positions: (-0.65%)
Currencies (16,789,211) (218,071)
Total short positions $ (17,587,157) (267,989)
Total open contracts (4.99%) $ 1,670,155
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
CONDENSED SCHEDULE OF INVESTMENTS
DECEMBER 31, 2003
Carrying
Value
Coupon Maturity (OTE)
Investments, at fair value:
Maturity Over 60 Days: (32.04%)
Federal Home Loan Bank Bond 1.75% 06/17/05 $ 499,414
Federal Home Loan Bank Bond 1.45% 07/22/05 246,371
Federal Home Loan Bank Bond 2.22% 08/26/05 499,700
Fannie Mae Medium Term Note 2.00% 05/05/05 550,000
Federal Home Loan Bank Bond 1.80% 11/18/05 1,200,000
Federal Home Loan Bank Bond 1.25% 11/26/04 800,000
Federal Home Loan Bank Bond 1.75% 06/17/05 499,550
Fannie Mae Medium Term Note 2.00% 02/05/05 300,807
Federal Home Loan Bank Bond 1.75% 06/17/05 249,875
Federal Home Loan Bank Bond 1.50% 12/22/04 2,800,000
U.S. Treasury Note 6.13% 08/15/07 1,475,322
Federal Home Loan Bank Bond 2.75% 12/28/05 1,600,000
Total securities with maturities over 60 days 10,720,039
Cash and cash equivalents (52.82%) 17,674,473
Cash on deposit with brokers (13.39%) 4,480,683
Liabilities in excess of other assets (-3.24%) (1,084,510)
21,070,646
Net assets (100.00%) $ 33,460,840
The accompanying notes are an integral part of these statements.
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
CONDENSED SCHEDULE OF INVESTMENTS
DECEMBER 31, 2002
Carrying
Number of Principal Value
Contracts (Notional) (OTE)
Long Positions:
Futures Positions: (6.41%)
Number of
Contracts
Interest Rates 141 $ 24,782,050 $ 144,331
Metals 475 17,267,824 (122,802)
Energy 627 20,776,101 1,051,192
Agriculture 756 11,373,995 252,849
Currencies 297 50,220,743 430,590
Indices 1,031 234,910,156 983,319
Forward Positions: (8.16%)
Currencies 729,609,867 3,485,982
Total long positions $1,088,940,736 $ 6,225,461
Short Positions:
Futures Positions: (0.57%)
Interest Rates 105 $ (11,948,220) $ (391,000)
Metals 165 (4,518,400) 461,064
Agriculture 406 (5,670,320) 167,461
Currencies 17 (1,074,740) (170)
Indices 33 (2,189,898) 6,254
(25,401,578) 243,609
Forward Positions: (-2.43%)
Currencies 4,523,422 (1,039,139)
Total short positions $ 29,925,000 (795,530)
Total open contracts (12.71%) $ 5,429,931
The accompanying notes are an integral part of these statements.
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
CONDENSED SCHEDULE OF INVESTMENTS
DECEMBER 31, 2002
(continued)
Carrying
Value
Coupon Maturity (OTE)
Invesments, at fair value:
Maturity Over 60 Days: (53.40%)
Fannie Mae Medium Term Note 5.75% 04/15/03 $ 2,129,876
Fannie Mae Medium Term Note 5.00% 02/14/03 728,012
Fannie Mae Medium Term Note 3.90% 04/29/04 403,718
Fannie Mae Medium Term Note 3.80% 04/30/04 1,008,803
Fannie Mae Medium Term Note 3.75% 05/12/04 706,186
Fannie Mae Medium Term Note 3.50% 05/21/04 503,669
Fannie Mae Medium Term Note 3.50% 06/24/04 2,921,684
Fannie Mae Medium Term Note 3.15% 07/29/04 709,942
Fannie Mae Medium Term Note 3.00% 07/29/04 2,789,980
Fannie Mae Note Term RP 7.25% 01/15/10 818,059
Freddie Mac Note 2.45% 01/23/04 902,175
GMAC Mortgage Co LP NT 01/02/03 3,493,297
GMAC Mortgage Co LP NT 01/13/03 1,900,000
Oneok Inc CP 01/07/03 499,133
Oneok Inc CP 01/13/03 1,896,777
Oneok Inc CP 01/15/03 499,567
Prime Property Fund Inc LP NT 01/17/03 900,000
Total securities with maturities over 60 days 22,810,860
Cash and cash equivalents (1.09%) 466,129
Cash on deposit with brokers (33.83%) 14,452,134
Liabilities in excess of other assets (-1.03%) (438,350)
Net assets (100.00%) 14,479,913
$ 42,720,704
The accompanying notes are an integral part of these statements.
Notes to Financial Statements
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Everest Fund, L.P., formerly Everest Futures Fund, L.P. (An Iowa Limited
Partnership"), (the "Partnership) is a limited partnership organized in
June 1988, under the Iowa Uniform Limited Partnership Act (the "Act") for
the purpose of engaging in the speculative trading of commodity futures
and options thereon and forward contracts (collectively referred to as
"Commodity Interests"). The sole General Partner of the Partnership is
Everest Asset Management, Inc. (the "General Partner"). The Partnership
clears futures and options on futures trades through Cargill Investor
Services, Inc. ("CIS" or the Clearing Broker") and forward trading
through CIS Financial Services, Inc. ("CISFS" or the "Forwards Currency
Broker") (collectively referred to as the "Brokers").
The Partnership was closed to new investors from July 31, 1989 to
June 30, 1995. Effective July 1, 1995, the Partnership recommenced the
offering as a Regulation D, Rule 506 private placement. The private
placement offering is continuing at a gross subscription price per unit
equal to net asset value per unit, plus an organization and offering
cost reimbursement fee payable to the General Partner, and an ongoing
compensation fee equal to 3% of the net asset value of Units sold.
Partnership interests are distributed through Capital Management
Partners, Inc. an affiliate of the General Partner and certain
Additional Sellers.
Cash and Cash Equivalents
Cash equivalents represent short-term highly liquid investments with
original maturities of 60 days or less and include money
market accounts, securities purchased under agreements to resell,
commercial paper, and U.S. Government and agency obligations with
variable rate and demand features that qualify them as cash equivalents.
These cash equivalents, with the exception of securities purchased
under agreement to resell, are stated at amortized cost, which
approximates fair value. Securities purchased under agreements
to resell, with overnight maturity, are collateralized by U.S.
Government and agency obligations, and are carried at the amounts at
which the securities will subsequently be resold plus accrued interest.
Revenue Recognition
Commodity futures contracts, forward contracts, physical commodities,
and related options are recorded on the trade-date basis. All such
transactions are recorded on the identified cost basis and marked to
market daily. Unrealized gains and losses on open contracts reflected
in the statements of financial condition represent the difference
between original contract amount and market value (as determined by
exchange settlement prices for futures contracts and related options
and cash dealer prices at a predetermined time for forward contracts,
physical commodities, and their related options) as of the last business
day of the year or as of the last date of the financial statements.
The Partnership earns interest on 100% of the Partnership's average
monthly cash balance on deposit with the Brokers at a rate equal to the
average 91-day Treasury bill rate for U.S. Treasury bills issued during
that month.
NOTE 1- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Net Income Per Unit of Partnership Interest
Net income per unit of partnership interest is the difference between the
net asset value per unit at the beginning and end of each period.
Fair Value of Financial Instruments
The financial instruments held by the Company are reported in statements
of financial condition at market or fair value, or at carrying amounts
that approximate fair value, because of their highly liquid nature and
short-term maturity.
Foreign Currency Translation
Assets and liabilities denominated in foreign currencies are translated
at the prevailing exchange rates as of the valuation date. Gains and
losses on investment activity are translated at the prevailing exchange
rate on the date of each respective transaction while year-end balances
are translated at the year-end currency rates. Realized and unrealized
foreign exchange gains or losses are included in trading income in the
statements of operations.
Income Taxes
No provision for income taxes has been made in the accompanying
financial statements as each partner is responsible for reporting
income (loss) based upon the pro rata share of the profits or losses
of the Partnership.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of
America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
NOTE 2- LIMITED PARTNERSHIP AGREEMENT
The Limited Partners and 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 their capital
contribution and profits, if any, and such other amounts as they
may be liable for pursuant to the Act. Distributions of profits
are made solely at the discretion of the General Partner.
Responsibility for managing the Partnership is vested solely in
the General Partner. The General Partner has delegated
complete trading authority to an unrelated party (see Note 3).
Limited Partners may cause any or all of their units to be redeemed
as of the end of any month at net asset value on fifteen
days' prior written notice to the Partnership, or such lesser period
as is acceptable to the Partnership. Although the
Agreement does not permit redemptions for the first six months following
a Limited Partner's admission to the Partnership,
the Agreement does permit the Partnership to declare additional
regular redemption dates. The Partnership will be dissolved
at December 31, 2020, or upon the occurrence of certain events,
as specified in the Limited Partnership agreement.
NOTE 3- CONTRACTS AND AGREEMENTS
Prior to August 1, 2000, the Partnership's trading advisor was John W.
Henry& Company, Inc. (JWH). Beginning July 1, 2001 JWH began trading
its Strategic Allocation Program with a trading allocation of $40
million. Previously JWH traded its Financial and Metals program. JWH
receives a monthly management fee equal to 0.167% (2% annually) of the
Partnership's month-end net asset value, as defined, and a quarterly
incentive fee of 20%of the Partnership's new net trading profits,
as defined. The incentive fee is retained by JWH even though trading
losses may occur in subsequent quarters; however, no further incentive
fees are payable until any such trading losses (other than losses
attributable to redeemed units and losses attributable to assets
reallocated to another advisor) are recouped by the Partnership.
Effective August 1, 2000, Trilogy Capital Management, LLC ("Trilogy")
was added as a trading advisor. Trilogy was terminated effective
June 30, 2001. Trilogy received a monthly management fee of 0.075%
(0.9% annually) of the Partnership's month-end allocated assets
as defined and did not receive an incentive fee.
Effective September 1, 2001, Mount Lucas Management Corporation ("MLM")
was added as a trading advisor with an initial allocation of $10 million.
This allocation represented notional funding for the Partnership. MLM
receives a monthly management fee of 0.0625% (0.75% annually) of the
Partnership's month-end allocated assets as defined. Effective February
2003, the management fee was reduced to 0.04167% (0.50% annually).
As MLM uses the MLM Index Unleveraged, they do not receive an
incentive fee. MLM was terminated effective October 31, 2003.
Beginning in June 2003, John W. Henry & Company, Inc. ("JWH") began
trading JWH Global Analytics Program ("GAP"); Currency Strategic
Allocation Program ("CSAP") and Worldwide Bond Program ("WBP") with
a trading allocation of $27 million.
Effective November 2003, CIS charges the Partnership monthly brokerage
commissions equal to 0.50% of the Partnership's
beginning-of-month net asset value. From May 2002 through October
2003, CIS charged the Partnership monthly brokerage
commissions of either 0.5104% or 0.5156%, depending on the total
amount which the Partnership had allocated to trading,
including notional funding. Prior to May 2002, CIS charged the
Partnership monthly brokerage commissions equal to 0.5052% of the
Partnership beginning-of-month net asset value, as defined. Prior
to September 1, 2001, the monthly
brokerage commission was 0.5%. The General Partner receives a management
fee of approximately 83% of the brokerage commission charged by CIS.
Net brokerage commissions are recordedin the statements of operations
as a reduction of trading income and the amounts paid to the
General Partner are recorded as management fees.
As of December 31, 2003 and 2002, the Partnership had approximately
$33.5 million and $42.7 million in net assets. As of December 31, 2003
and 2002, JWH's allocation was approximately $33 and $41 million,
respectively, and MLM's was approximately $0 and $26.6 million of
notional funding, respectively. The General Partner may replace or
add trading advisors at any time.
A portion of assets (82.1% and 53.9% at December 31, 2003 and 2002,
respectively) are deposited with a commercial bank and invested under
the direction of Horizon Cash Management, Inc. (Horizon). Horizon will
receive a monthly cash management fee equal to 1/12 of .25%
(.25% annually) of the average daily assets under management
if the accrued monthly interest income earned on the Partnership's
assets managed by Horizon exceeds the 91-day U.S. Treasury bill rate.
NOTE 4- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES
The Partnership engages in the speculative trading of U.S. and
foreign futures contracts, options on U.S. and foreign futures
contracts, and forward contracts ("collectively derivatives").
These derivatives include both financial and non-financial
contracts held as part of a diversified trading strategy. The
Partnership is exposed to both market risk, the risk arising from
changes in the market value of the contracts; and credit risk,
the risk of failure by another party to perform according to the
terms of a contract.
NOTE 4- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES
(Concluded)
The purchase and sale of futures and options on futures contracts
requires margin deposits with a Futures Commission Merchant ("FCM").
Additional deposits may be necessary for any loss on contract value.
The Commodity Exchange Act ("The CEAct") requires an FCM to segregate
all customer transactions and assets from the FCM's proprietary
activities.
A customer's cash and other property such as U.S. Treasury Bills,
deposited with an FCM are considered commingled with all other customer
funds subject to the FCM's segregation requirements. In the event of an
FCM's insolvency, recovery may be limited to a pro rata share of
segregated funds available. It is possible that the recovered amount
could be less than the total of cash and other property deposited.
The Partnership has cash on deposit with an interbank market maker
in connection with its trading of forward contracts. In the event of
the interbank market maker's insolvency, recovery of the Partnership
assets on deposit may be limited to account insurance or other
protection afforded such deposits. In the normal course of business,
the Partnership does not require collateral from such interbank
market maker. Because forward contracts are traded in unregulated
markets between principals, the Partnership also assumes a credit risk,
the risk of loss from counter party non-performance.
For derivatives, risks arise from changes in the market value of the
contracts. Theoretically, the Partnership is exposed to a market risk
equal to the value of futures and forward contracts purchased and
unlimited liability on such contracts sold short. As both a buyer
and seller of options, the Partnership pays or receives a premium at
the outset and then bears the risk of unfavorable changes in the
price of the contract underlying the option.
The notional amounts of open contracts at December 31, 2003 and
2002, as disclosed in the Condensed Schedule of Investments,
do not represent the Partnership's risk of loss due to market
and credit risk, but rather represent the Partnership's extent of
involvement in derivatives at the date of the statement of
financial condition.
Net trading results from derivatives for the years ended December 31,
2003, 2002 and 2001, are reflected in the statement of operations
and equal to gains (losses) from trading less brokerage commissions.
Such trading results reflect the net gain arising from the Partnership's
speculative trading of futures contracts, options on futures contracts,
and forward contracts.
The Limited Partners bear the risk of loss only to the extent
of the net asset value of their Partnership units.
NOTE 5- TRADING DISCREPANCY
In October 2000, there was a discrepancy between the performance
of the Barclay Futures Index Program ("BFIP") as traded for the
Partnership and the Barclay Futures Index (BFI). Certain transactions
executed by Trilogy on behalf of the Partnership resulted in a loss
of approximately $520,000 that was recorded in the statement of
operations. The General Partner believes that these transactions
were not executed in accordance with the provisions of BFIP and
has demanded that Trilogy reimburse the Partnership for the loss.
The parties are currently attempting to resolve the issue.
Until a final resolution is reached, the parties have agreed
that the management fees otherwise payable to Trilogy under its
advisory contract would be applied as a credit to offset the losses.
The offset is not in settlement, partial settlement, or indemnification
of any kind and is without prejudice to any rights or claims by either
side. Beginning in November 2000, and until approximately July 1, 2001,
at which time Trilogy was terminated, all of the management fees that
would otherwise be paid to Trilogy were deposited into a separate
account for the benefit of those limited partners that were limited
partners on November 1, 2000 and to cover the expenses associated
with the collection of the losses. The separate account is not
included in the financial statements of the Partnership. After
its termination, Trilogy demanded that such fees be returned to
it. The General Partner rejected Trilogy's demand and is assessing
its options for collection.
NOTE 5- TRADING DISCREPANCY (Continued)
A demand for arbitration was filed with the NFA on October 3, 2002.
Trilogy has responded to the demand for arbitration
and has counterclaimed for the amount of $130,210, together with
attorney's fees, interest and costs of suit. That figure
represents the amount of management fees, otherwise payable to
Trilogy under its advisory contract, that both parties agreed
would be held as a credit to the Partnership to offset the losses.
The General Partner has a letter to that effect which was
signed by the president of Trilogy on January 29, 2001.
The General Partner anticipates a hearing in front of an NFA
arbitration panel in the coming months, but no date has been set
for the hearing. At the present time, the General Partner is
unable to determine whether any of the losses will be recovered.
NOTE 6- FINANCIAL HIGHLIGHTS
The following financial highlights show the Partnership's financial
performance for the years ended December 31, 2003,
2002 and 2001. This information has been derived from information
presented in the financial statements.
2003 2002 2001
Per unit operating performance (1):
Total income (loss) $ 245.03 $ 581.06 $ 80.19
Total expenses (61.02) (175.58) (31.73)
Net increase in net asset value 184.01 405.48 48.46
Net asset value, beginning of year 2,072.44 1,666.96 1,618.50
Net asset value, end of year $ 2,256.45 $ 2,072.44 $ 1,666.96
Selected financial statistics and ratios:
Total return (2) 8.88 % 24.32 % 2.99 %
Ratio to average net assets:
Trading Income 16.94 % 30.69 % 5.03 %
Expenses, not including incentive fee (2.35) (2.57) (1.92)
Incentive fees (1.87) (6.70) (0.07)
Total expenses (4.22) (9.27) (1.99)
Net income 12.72 21.42 3.04
(1) Selected data for a unit of beneficial interest outstanding throughout
the year.
(2) An individual partner's total returns and ratios may vary from the
above returns based on the timing of contributions and withdrawals.
EVEREST FUND, L.P.
(formerly Everest Futures Fund, L.P.)
(An Iowa Limited Partnership)
ACKNOWLEDGEMENT
YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001
Acknowledgement
To the best of my knowledge and belief, the information contained
here is accurate and complete.
/s/Peter Lamoureux
President
Everest Asset Management, Inc.
General Partner of Everest Fund, L.P.
(formerly Everest Futures Fund, L.P.)