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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the year ended December 31, 2000 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the transition period from
________________to___________________
Commission File Number 0-19901
DEAN WITTER GLOBAL PERSPECTIVE PORTFOLIO L.P.
(Exact name of registrant as specified in its Limited Partnership
Agreement)
DELAWARE 13-3642323
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization)
Identification No.)
c/o Demeter Management Corporation
Two World Trade Center, - 62nd Flr., New York, N.Y.
10048 (Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code (212)
392-5454
Securities registered pursuant to Section 12(b) of the Act:
Name of each
exchange
Title of each class on which
registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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 _____ No ______
Indicate by check-mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (section 229.405 of this
chapter) is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment of this Form 10-K. [X]
State the aggregate market value of the Units of Limited Partnership
Interest held by non-affiliates of the registrant. The aggregate
market value shall be computed by reference to the price at which
units were sold as of a specified date within 60 days prior to the
date of filing: $11,451,697 at January 31, 2001.
DOCUMENTS INCORPORATED BY REFERENCE
(See Page 1)
DEAN WITTER GLOBAL PERSPECTIVE PORTFOLIO L.P.
INDEX TO ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 2000
Page No.
DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . .
. . . . 1
Part I .
Item 1.Business. . . . . . . . . . . . . . . . . . . . . . . .
2-4
Item 2.Properties. . . . . . . . . . . . . . . . . . . . . . .
. 4
Item 3.Legal Proceedings. . . . . . . . . . . . . . . . . . .
5-6
Item 4.Submission of Matters to a Vote of Security Holders. .
. .6
Part II.
Item 5.Market for the Registrant's Partnership Units
and Related Security Holder Matters . . . . . . . .
. . 7
Item 6.Selected Financial Data . . . . . . . . . . . . . .
. . 8
Item 7. Management's
Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . .
.9-19
Item 7A.Quantitative and Qualitative Disclosures About
Market Risk . . . . . . . . . . . . . . . . . . . . .
19-32
Item 8.Financial Statements and Supplementary Data. . . . . .
. .32
Item 9.Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . .
. .33
Part III.
Item 10. Directors and
Executive Officers of the Registrant . 34-38
Item 11. Executive Compensation . . . . . . . . . . . . . . . .
. .38
Item 12.Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . .
. .38
Item 13. Certain Relationships and Related Transactions . . . .
38-39
Part IV.
Item 14. Exhibits,
Financial Statement Schedules, and
Reports on Form 8-K. . . . . . . . . . . . . . . . .
. .40
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference
as follows:
Documents Incorporated Part of Form 10-K
Partnership's Prospectus dated December
31, 1991, together with the Supplement
to the Prospectus dated April 27, 1992 I and IV
Annual Report to the Dean Witter
Global Perspective Portfolio L.P.
Limited Partners for the year ended
December 31, 2000 II, III and IV
PART I
Item 1. BUSINESS
(a) General Development of Business. Dean Witter Global
Perspective Portfolio L.P. (the "Partnership") is a Delaware
limited partnership organized to engage primarily in the
speculative trading of futures and forwards contracts, options on
futures contracts, physical commodities and other commodity
interests.
The general partner is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Dean Witter
Reynolds, Inc. ("DWR"). The clearing commodity brokers are
Morgan Stanley & Co. Inc. ("MS & Co.") and Morgan Stanley & Co.
International Limited ("MSIL"), which provide clearing and
execution services. Prior to May 2000, Carr Futures Inc.
provided clearing and execution services to the Partnership.
Demeter, DWR, MS & Co. and MSIL are wholly-owned subsidiaries of
Morgan Stanley Dean Witter & Co. ("MSDW"). The trading advisors
for the Partnership are EMC Capital Management, Inc. ("EMC") and
Millburn Ridgefield Corporation ("Millburn"), (collectively, the
"Trading Advisors").
Prior to July 31, 2000, ELM Financial, Inc. ("ELM") was also a
trading advisor in the Partnership. Effective August 1, 2000,
ELM was removed as a trading advisor to the Partnership and
assets previously managed by ELM were equally reallocated to EMC
and
Millburn. Redemptions are allocated among EMC and Millburn in
proportion to the percentage of monthly average equity managed by
each trading advisor.
The Partnership's net asset value per unit of limited partnership
interest ("Unit(s)") as of December 31, 2000, was $1,005.36,
representing an increase of 3.6 percent from the net asset value
per Unit of $970.18 on December 31, 1999. For a more detailed
description of the Partnership's business, see subparagraph (c).
(b) Financial Information about Segments. For financial
information reporting purposes, the Partnership is deemed to
engage in one industry segment, the speculative trading of
futures, forwards, and options. The relevant financial
information is presented in Items 6 and 8.
(c) Narrative Description of Business. The Partnership is in the
business of speculative trading of futures, forwards, and
options, pursuant to trading instructions provided by its Trading
Advisors. For a detailed description of the different facets of
the Partnership's business, see those portions of the
Partnership's prospectus, dated December 31, 1991 (the
"Prospectus"), incorporated by reference in this Form 10-K, set
forth below.
Facets of Business
1. Summary 1. "Summary of the Prospectus"
(Pages 1-6 of the
Prospectus).
2. Commodities Markets 2. "The Commodities Markets"
(Pages 66-73 of the
Prospectus).
3. Partnership's Commodity 3. "Trading Policies" (Page
Trading Arrangements and 61 of the Prospectus).
Policies "The Trading Advisors"
(Pages 32-60 of the
Prospectus).
4. Management of the Part- 4. "The Management
Agreement"
nership (Pages 63-66 of the
Prospectus). "The
General Partner" (Pages 28-30 of the
Prospectus).
"The Commodity Broker"
(Pages 61-63 of the
Prospectus) and "The
Limited Partnership
Agreement" (Pages 75-78 of
the Prospectus).
5. Taxation of the Partner- 5. "Material Federal
Income ship's Limited Partners
Tax Considerations" and
"State and Local Income
Tax Aspects" (Pages 81-
89 of the Prospectus).
(d) Financial Information about Geographic Areas
The Partnership has not engaged in any operations in foreign
countries; however, the Partnership (through the commodity
brokers) enters into forward contract transactions where foreign
banks are the contracting party and trades in futures, forwards,
and options on foreign exchanges.
Item 2. PROPERTIES
The executive and administrative offices are located within the
offices of DWR. The DWR offices utilized by the Partnership are
located at Two World Trade Center, 62nd Floor, New York, NY
10048.
Item 3. LEGAL PROCEEDINGS
Similar class actions were filed in 1996 in California and in New
York State courts. Each of these actions were dismissed in 1999.
However, the New York State class action discussed below is still
pending because plaintiffs appealed the trial court's dismissal
of their case on March 3, 2000.
On September 18 and 20, 1996, purported class actions were filed
in the Supreme Court of the State of New York, New York County,
on behalf of all purchasers of interests in limited partnership
commodity pools sold by DWR. Named defendants include DWR,
Demeter, MSDW, certain limited partnership commodity pools of
which Demeter is the general partner, and certain trading
advisors to those pools. A consolidated and amended complaint in
the action pending in the Supreme Court of the State of New York
was filed on August 13, 1997, alleging that the defendants
committed fraud, breach of fiduciary duty, and negligent
misrepresentation in the sale and operation of the various
limited partnership commodity pools. The complaints sought
unspecified amounts of compensatory and punitive damages and
other relief. The New York Supreme Court dismissed the New York
action in November 1998, but granted plaintiffs leave to file an
amended complaint, which they did in early December 1998. The
defendants filed a motion to dismiss the amended complaint with
prejudice on February 1, 1999. By decision dated December 21,
1999, the New York Supreme Court
dismissed the case with prejudice. However, on March 3, 2000,
plaintiffs appealed the trial court's dismissal of their case.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS
(a) Market Information
There is no established public trading market for Units of the
Partnership.
(b) Holders
The number of holders of Units at December 31, 2000 was
approximately 1,548.
(c) Distributions
No distributions have been made by the Partnership since it
commenced trading operations on March 1, 1992. Demeter has sole
discretion to decide what distributions, if any, shall be made to
investors in the Partnership. Demeter currently does not intend
to make any distribution of Partnership profits.
Item 6. SELECTED FINANCIAL DATA (in dollars)
For the Years Ended December 31,
2000 1999 1998 1997
1996 .
Total Revenues
(including interest) 1,436,980 268,597 4,169,027 4,917,569
4,375,881
Net Income (Loss) 148,781 (1,674,974) 2,022,979
2,420,203 1,766,076
Net Income (Loss)
Per Unit (Limited
& General Partners) 35.18 (105.82) 108.77 97.12
73.76
Total Assets 11,818,856 15,203,903 19,185,631 21,221,634
22,267,408
Total Limited
Partners' Capital 11,443,935 14,636,245 18,754,867 20,276,293
21,020,037
Net Asset Value Per
Unit 1,005.36 970.18 1,076.00 967.23
870.11
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership deposits its assets with DWR as non-
clearing broker and MS & Co. and MSIL as clearing brokers in
separate futures, forwards, and options trading accounts
established for each Trading Advisor, which assets are used as
margin to engage in trading. The assets are held in either non-
interest-bearing bank accounts or in securities and instruments
permitted by the Commodity Futures Trading Commission ("CFTC")
for investment of customer segregated or secured funds. The
Partnership's assets held by the commodity brokers may be used as
margin solely for the Partnership's trading. Since the
Partnership's sole purpose is to trade in futures, forwards, and
options, it is expected that the Partnership will continue to own
such liquid assets for margin purposes.
The Partnership's investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be
taken nor liquidated unless traders are willing to effect trades
at or within the limit. Futures prices have occasionally moved
the daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts and
result in restrictions on redemptions.
There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
The Partnership has never had illiquidity affect a material
portion of its assets.
Capital Resources. The Partnership does not have, or expect to
have, any capital assets. Redemptions of Units in the future
will affect the amount of funds available for investments in
futures, forwards, and options in subsequent periods. It is not
possible to estimate the amount and therefore the impact of
future redemptions of Units.
Results of Operations.
General. The Partnership's results depend on its Trading
Advisors and the ability of each Trading Advisor's trading
programs to take
advantage of price movements or other profit opportunities in the
futures, forwards, and options markets. The following presents a
summary of the Partnership's operations for the three years ended
December 31, 2000 and a general discussion of its trading
activities during each period. It is important to note, however,
that the Trading Advisors trade in various markets at different
times and that prior activity in a particular market does not
mean that such market will be actively traded by the Trading
Advisors or will be profitable in the future. Consequently, the
results of operations of the Partnership are difficult to discuss
other than in the context of its Trading Advisors' trading
activities on behalf of the Partnership as a whole and how the
Partnership has performed in the past.
At December 31, 2000, the Partnership's total capital was
$11,661,054, a decrease of $3,184,713 from the Partnership's
total capital of $14,845,767 at December 31, 1999. For the year
ended December 31, 2000, the Partnership generated net income of
$148,781, and total redemptions aggregated $3,333,494.
For the year ended December 31, 2000, the Partnership recorded
total trading revenues, including interest income, of $1,436,980
and posted an increase in net asset value per Unit. The most
significant gains of approximately 3.6% were recorded in the
energy markets as long futures positions in both crude oil and
its refined products proved profitable during the first quarter
on growing speculation that OPEC would extend production cuts.
Additional gains of approximately 3.2% resulted from long
positions in natural gas futures as prices skyrocketed to all-
time highs during the fourth quarter on cold winter weather
across much of the U.S. and due to continued concerns regarding
supply. Gains of approximately 2.0% were also experienced from
long futures positions in sugar futures as prices trended to 22-
month highs during June due to strong demand and declining
production from Brazil. Smaller gains of approximately 1.0% were
experienced in the fourth quarter from long positions in the euro
as the value of the European common currency strengthened
relative to the U.S. dollar on concerns about slowing U.S. growth
and persistent declines in U.S. stocks. A portion of the
Partnership's gains was offset by losses of approximately 4.1%
experienced in global stock index futures markets as the
Partnership experienced difficulty trading Asian and Australian
stock indices throughout the first half of the year. Losses of
approximately 3.4% were also recorded in the metals markets as
erratic price activity resulted in the predominance of trendless
markets. Total expenses for the year were $1,288,199, resulting
in net income of $148,781. The net asset value of a Unit
increased from $970.18 at December 31, 1999 to $1,005.36 at
December 31, 2000.
At December 31, 1999, the Partnership's total capital was
$14,845,767, a decrease of $4,141,476 from the Partnership's
total
capital of $18,987,243 at December 31, 1998. For the year ended
December 31, 1999, the Partnership generated a net loss of
$1,674,974 and total redemptions aggregated $2,466,502.
For the year ended December 31, 1999, the Partnership recorded
total trading revenues, including interest income, of $268,597
and, after expenses, posted a decrease in net asset value per
Unit. The most significant losses of approximately 7.02% were
experienced from global interest rate futures trading as the
volatile and choppy price movement experienced during the year
limited the ability to capitalize on trends. During the fourth
quarter, most global bond markets dropped on a resurgence of
inflation and interest rate fears initiated by consistently
strong U.S. economic data, evidence of rising inflation in
Germany and increases in oil prices. Additional losses of
approximately 5.40% were recorded in the global stock index
futures markets primarily from short European stock index
futures, particularly German, as prices in these markets were
boosted higher by gains on Wall Street and in Japan early in the
year. As a result of a widespread contraction of a number of
major stock markets, some downward price trends became
established in the late summer/early fall that caused the
Partnership's trend-following managers to establish short
positions. Given the upward snapback exhibited in many of these
markets, especially the U.S., these previously existing short
positions were negatively impacted during the fourth quarter.
Smaller losses of 1.71% and 1.65% were recorded in the
agricultural markets and soft commodities markets, respectively.
A portion of the Partnership's overall losses for the year were
offset by gains of approximately 0.85% recorded in the energy
markets from long crude oil futures positions as oil prices
increased on supply cuts by oil producing nations. Total
expenses for the year were $1,943,571, resulting in a net loss of
$1,674,974. The net asset value of a Unit decreased from
$1,076.00 at December 31, 1998 to $970.18 at December 31, 1999.
At December 31, 1998, the Partnership's total capital was
$18,987,243, a decrease of $1,981,552 from the Partnership's
total capital of $20,968,795 at December 31, 1997. For the year
ended December 31, 1998, the Partnership generated net income of
$2,022,979 and total redemptions aggregated $4,004,531.
For the year ended December 31, 1998, the Partnership recorded
total trading revenues, including interest income, of $4,169,027
and posted an increase in net asset value per Unit. In 1998, the
Partnership recorded gains of approximately 14.75% in the global
interest rate markets primarily as prices moved higher during
August and September. The most significant gains were recorded
from German, U.S. and Japanese interest rate futures as investors
sought the safety of fixed income investments in response to a
decline in the global equity markets amid political and economic
turmoil in Russia, Asia and Latin America. These gains were
partially offset by losses of approximately 5.62% experienced in
the currency markets and approximately 5.04% experienced in the
metals markets, as prices in these markets moved in a short-term
volatile pattern during a good portion of the year as investors
nervously shifted their capital from market to market in an
effort to limit risk and increase return in the face of global
economic uncertainty. Total expenses for the year were
$2,146,048, resulting in net income of $2,022,979. The net asset
value of a Unit increased from $967.23 at December 31, 1997 to
$1,076.00 at December 31, 1998.
The Partnership's overall performance record represents varied
results of trading in different futures, forwards, and options
markets. For a further description of 2000 trading results,
refer to the letter to the Limited Partners in the accompanying
Annual Report to Limited Partners for the year ended December 31,
2000, which is incorporated by reference to Exhibit 13.01 of this
Form 10-K. The Partnership's gains and losses are allocated
among its partners for income tax purposes.
Credit Risk.
Financial Instruments. The Partnership is a party to financial
instruments with elements of off-balance sheet market and credit
risk. The Partnership may trade futures, forwards, and options
in a portfolio of agricultural commodities, energy products,
foreign currencies, interest rates, precious and base metals,
soft commodities, and stock indices. In entering into these
contracts, the Partnership is subject to the market risk that
such contracts may be significantly influenced by market
conditions, such as interest rate volatility, resulting in such
contracts being less valuable. If the markets moved against all
of the positions held by the Partnership at the same time, and if
the Trading Advisors were unable to offset positions of the
Partnership, the Partnership could lose all of its assets and
investors would realize a 100% loss.
In addition to the Trading Advisors' internal controls, each
Trading Advisor must comply with the trading policies of the
Partnership. These trading policies include standards for
liquidity and leverage with which the Partnership must comply.
The Trading Advisors and Demeter monitor the Partnership's
trading activities to ensure compliance with the trading
policies. Demeter may require the Trading Advisors to modify
positions of the Partnership if Demeter believes they violate the
Partnership's trading policies.
In addition to market risk, in entering into futures, forwards,
and options contracts there is a credit risk to the Partnership
that the counterparty on a contract will not be able to meet its
obligations to the Partnership. The ultimate counterparty or
guarantor of the Partnership for futures contracts traded in the
United States and the foreign exchanges on which the Partnership
trades is the clearinghouse associated with such exchange. In
general, a clearinghouse is backed by the membership of the
exchange and will act in the event of non-performance by one of
its members or one of its member's customers, which should
significantly reduce this credit risk. For example, a
clearinghouse may cover a default by drawing upon a defaulting
member's mandatory contributions and/or non-defaulting members'
contributions to a clearinghouse guarantee fund, established
lines or letters of credit with banks, and/or the clearinghouse's
surplus capital and other available assets of the exchange and
clearinghouse, or assessing its members. In cases where the
Partnership trades off-exchange forward contracts with a
counterparty, the sole recourse of the Partnership will be the
forward contracts counterparty.
There is no assurance that a clearinghouse or exchange will meet
its obligations to the Partnership, and Demeter and the commodity
brokers will not indemnify the Partnership against a default by
such parties. Further, the law is unclear as to whether a
commodity broker has any obligation to protect its customers from
loss in the event of an exchange or clearinghouse defaulting on
trades effected for the broker's customers. Any such obligation
on the part of a broker appears even less clear where the default
occurs in a non-U.S. jurisdiction.
Demeter deals with these credit risks of the Partnership in
several ways. First, it monitors the Partnership's credit
exposure to each exchange on a daily basis, calculating not only
the amount of margin required for it but also the amount of its
unrealized gains at each exchange, if any. The commodity brokers
inform the Partnership, as with all their customers, of its net
margin requirements for all its existing open positions, but do
not break that net figure down, exchange by exchange. Demeter,
however, has installed a system which permits it to monitor the
Partnership's potential margin liability, exchange by exchange.
As a result, Demeter is able to monitor the Partnership's
potential net credit exposure to each exchange by adding the
unrealized trading gains on that exchange, if any, to the
Partnership's margin liability thereon.
Second, the Partnership's trading policies limit the amount of
its net assets that can be committed at any given time to futures
contracts and require, in addition, a minimum amount of
diversification in the Partnership's trading, usually over
several different products. One of the aims of such trading
policies has been to reduce the credit exposure of the
Partnership to a single exchange and, historically, the
Partnership's exposure to any one exchange has typically amounted
to only a small percentage of its total net assets. On those
relatively few occasions where the Partnership's credit exposure
may climb above such level, Demeter deals with the situation on a
case by case basis, carefully weighing whether the increased
level of credit exposure remains appropriate. Material changes
to the trading policies may be made only with the prior written
approval of the Limited Partners owning more than 50% of Units
then outstanding.
Third, with respect to forward contract trading, the Partnership
trades with only those counterparties which Demeter, together
with DWR, have determined to be creditworthy. The Partnership
presently deals with MS & Co. as the sole counterparty on forward
contracts.
See "Financial Instruments" under Notes to Financial Statements
in the Partnership's Annual Report to Limited Partners for the
year ended December 31, 2000, which is incorporated by reference
to Exhibit 13.01 of this Form 10-K.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Introduction
The Partnership is a commodity pool involved in the speculative
trading of futures, forwards, and options. The market-sensitive
instruments held by the Partnership are acquired for speculative
trading purposes only and, as a result, all or substantially all
of the Partnership's assets are at risk of trading loss. Unlike
an operating company, the risk of market-sensitive instruments is
central, not incidental, to the Partnership's main business
activities.
The futures forwards, and options traded by the Partnership
involve varying degrees of related market risk. Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities. Fluctuations in market risk based
upon these factors result in frequent changes in the fair value
of the Partnership's open positions, and, consequently, in its
earnings and cash flow.
The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,
each of these factors may act to increase or decrease the market
risk associated with the Partnership.
The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e. "risk of ruin") that far
exceed the Partnership's experiences to date or any reasonable
expectations based upon historical changes in market value.
Quantifying the Partnership's Trading Value at Risk
The following quantitative disclosures regarding the
Partnership's market risk exposures 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 of 1933 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 Partnership accounts for open positions using mark-to-market
accounting principles. Any loss in the market value of the
Partnership's open positions is directly reflected in the
Partnership's earnings, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin.
The Partnership's risk exposure in the market sectors traded by
the Trading Advisors is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the
VaR model include equity and commodity prices, interest rates,
foreign exchange rates, and correlation among these variables.
The hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the
Partnership's VaR is approximately four years. The one-day 99%
confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days.
VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that
the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Advisors in their daily risk management
activities.
The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership's open positions as a percentage of total net assets
by primary market risk category as of December 31, 2000 and 1999.
As of December 31, 2000 and 1999, the Partnership's total
capitalization was approximately $12 million and $15 million,
respectively.
Primary Market December 31, 2000 December 31, 1999
Risk Category Value at Risk Value at Risk
Interest Rate (2.36)% (1.06)%
Currency (1.10) (1.08)
Equity (0.58) (0.90)
Commodity (0.81) (0.60)
Aggregate Value at Risk (2.79)% (1.89)%
Aggregate Value at Risk represents the aggregate VaR of all the
Partnership's open positions and not the sum of the VaR of the
individual market categories listed above. Aggregate VaR will be
lower as it takes into account correlation among different
positions and categories.
The table above represents the VaR of the Partnership's open
positions at December 31, 2000 and 1999 only and is not
necessarily representative of either the historic or future risk
of an investment in the Partnership. Because the Partnership's
only business is the speculative trading of futures, forwards,
and options, the composition of its trading portfolio can change
significantly over any given time period, or even within a single
trading day. Any changes in open positions could positively or
negatively materially impact market risk as measured by VaR.
The table below supplements the December 31, 2000 VaR by
presenting the Partnership's high, low and average VaR, as a
percentage of total net assets for the four quarterly reporting
periods from January 1, 2000 through December 31, 2000.
Primary Market Risk Category High Low Average
Interest Rate (2.36)% (1.13)% (1.70)%
Currency (1.58) (1.10) (1.29)
Equity (1.12) (0.58) (0.76)
Commodity (1.29) (0.70) (0.98)
Aggregate Value at Risk (2.79)% (2.25)% (2.54)%
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 margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by
the Partnership to typically be many times the total
capitalization of the Partnership. The value of the
Partnership's open positions thus creates a "risk of ruin" not
usually found in other investments. The relative size of the
positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in
light of the methodology's limitations, which include the
following:
past changes in market risk factors will not always result
in accurate predictions of the distributions and correlations of
future market movements;
changes in portfolio value in response to market movements
may differ from those of the VaR model;
VaR results reflect past trading positions while future risk
depends on future positions;
VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
the historical market risk factor data used for VaR
estimation may provide only limited insight into losses that
could be incurred under certain unusual market movements.
The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at December 31, 2000 and 1999, and for the end of
the four quarterly reporting periods during calendar year 2000.
Since VaR is based on historical data, VaR should not be viewed
as predictive of the Partnership's future financial performance
or
its ability to manage or monitor risk. There can be no assurance
that the Partnership's actual losses on a particular day will not
exceed the VaR amounts indicated above or that such losses will
not occur more than 1 in 100 trading days.
Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial. At December 31, 2000,
the Partnership's cash balance at DWR was approximately 83% of
its total net asset value. A decline in short-term interest
rates will result in a decline in the Partnership's cash
management income. This cash flow risk is not considered to be
material.
Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments.
Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures -
constitute forward-looking statements within the meaning of
Section 27A of
the Securities Act and Section 21E of the Securities Exchange
Act. The Partnership's primary market risk exposures as well as
the strategies used and to be used by Demeter and the Trading
Advisors for managing such exposures are subject to numerous
uncertainties, contingencies and risks, any one of which could
cause the actual results of the Partnership's risk controls 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. 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, 2000, by market sector. It may be
anticipated however, that these market exposures will vary
materially over time.
Interest Rate. The primary market exposure of the Partnership at
December 31, 2000 was in the global interest rate complex.
Exposure was primarily spread across the U.S., European, and
Japanese interest rate sectors. Interest rate movements directly
affect the price of the sovereign bond futures positions held by
the Partnership and indirectly affect 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 Partnership's profitability. The
Partnership's primary interest rate exposure is generally to
interest rate fluctuations in the United States and the other G-7
countries. The G-7 countries consist of France, U.S., Britain,
Germany, Japan, Italy and Canada. However, the Partnership also
takes futures positions in the government debt of smaller nations
- - e.g. Australia. Demeter anticipates that G-7 interest rates
will remain the primary interest rate 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
futures positions held by the Partnership are in medium- to long-
term instruments. Consequently, even a material change in short-
term rates would have little effect on the Partnership, were the
medium- to long-term rates to remain steady.
Currency. The second largest market exposure at December 31, 2000
was in the currency sector. The Partnership's currency exposure
is to exchange rate fluctuations, primarily fluctuations which
disrupt the historical pricing relationships between different
currencies and currency pairs. Interest rate changes as well as
political and general economic conditions influence these
fluctuations. The Partnership trades in a large number of
currencies, including cross-rates - i.e., positions between two
currencies other than the U.S. dollar. For the fourth quarter of
2000, the Partnership's major exposures were to the euro currency
crosses and outright U.S. dollar positions. Outright positions
consist of the U.S. dollar vs. other currencies. These other
currencies include major and minor currencies. Demeter does not
anticipate that the risk profile of the Partnership's currency
sector will change significantly in the future. The currency
trading VaR 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 VaR in a functional currency other than U.S. dollars.
Equity. The primary equity exposure at December 31, 2000 was 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. At December 31, 2000, the Partnership's
primary exposures were to the DAX (Germany), TOPIX (Japan), and
NASDAQ (U.S.) stock indices. The Partnership is primarily
exposed to the risk of adverse price trends or static markets in
the 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.
Commodity.
Energy. At December 31, 2000, the Partnership's energy exposure
was shared primarily by futures contracts in the crude oil and
natural gas markets. Price movements in these markets result
from political developments in the Middle East, weather patterns,
and other economic fundamentals. It is possible that volatility
and losses, which have been experienced in the past, are expected
to continue to be experienced in this market. Natural gas has
exhibited volatility in prices resulting from weather patterns
and supply and demand factors and may continue in this choppy
pattern.
Metals. The Partnership's primary metals market exposure at
December 31, 2000 was to fluctuations in the price of gold and
silver. Although certain Trading Advisors will, from time to
time, trade base metals such as copper, aluminum, nickel, and
zinc, the principal market exposures of the Partnership have
consistently been in precious metals, such as gold and silver.
Market exposure to precious metals was evident, as gold prices
continued to be volatile during the quarter. Silver prices
remained volatile over this period as well. The Trading Advisors
have, from time to time, taken positions when market
opportunities developed.
Soft Commodities and Agriculturals. At December 31, 2000, the
Partnership had exposure to the markets that comprise these
sectors. Most of the exposure, however, was in the coffee,
cotton, and corn markets. Supply and demand inequalities, severe
weather disruption, and market expectations affect price
movements in these markets.
Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at December 31, 2000:
Foreign Currency Balances. The Partnership's primary
foreign currency balances were in Japanese yen and Hong Kong
dollars. The Partnership controls the non-trading risk of
these balances by regularly converting these balances back
into U.S. dollars upon liquidation of the respective
position.
Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisors, separately, attempt to
manage the risk of the Partnership's open positions in
essentially the same manner in all market categories traded.
Demeter attempts to manage market exposure by diversifying the
Partnership's assets among different Trading Advisors, each of
whose strategies focus on different market sectors and trading
approaches, and monitoring the performance of the Trading
Advisors daily. In addition, the Trading Advisors establish
diversification guidelines, often set in terms of the maximum
margin to be committed to positions in any one market sector or
market-sensitive instrument.
Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership
investment directed by Demeter, rather than the Trading Advisors.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements are incorporated by reference to the
Partnership's Annual Report, which is filed as Exhibit 13.01
hereto.
Supplementary data specified by Item 302 of Regulation S-K:
Summary of Quarterly Results (Unaudited)
Net
Income/
(Loss) Per
Quarter Net Unit of Limited
Ended Revenue Income/(Loss)
Partnership Interest
2000
March 31 $ (51,780) $ (449,952) $(31.17)
June 30 (628,693) (966,439) (70.42)
September 30 (380,076) (671,200) (52.36)
December 31 2,497,529 2,236,372 189.13
Total $ 1,436,980 $ 148,781 $ 35.18
1999
March 31 $ 75,320 $ (432,411) $ (24.69)
June 30 1,866,989 1,333,222 78.54
September 30 (421,388) (902,710) (55.02)
December 31 (1,252,324) (1,673,075) (104.65)
Total $ 268,597 $ (1,674,974) $(105.82)
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
Directors and Officers of the General Partner
The directors and officers of Demeter are as follows:
Robert E. Murray, age 40, is Chairman of the Board, President and
a Director of Demeter. Mr. Murray is also Chairman of the Board,
President and a Director of Dean Witter Futures & Currency
Management Inc. ("DWFCM"). Mr. Murray is currently a Senior Vice
President of DWR's Managed Futures Department. Mr. Murray began
his career at DWR in 1984 and is currently the Director of the
Managed Futures Department. In this capacity, Mr. Murray is
responsible for overseeing all aspects of the firm's Managed
Futures Department. Mr. Murray previously served as Vice
Chairman and a Director of the Managed Funds Association, an
industry association for investment professionals in futures,
hedge funds and other alternative investments. Mr. Murray
graduated from Geneseo State University in May 1983 with a B.A.
degree in Finance.
Mitchell M. Merin, age 47, is a Director of Demeter. Mr. Merin
is also a Director of DWFCM. Mr. Merin was appointed the Chief
Operating Officer of Individual Asset Management for MSDW in
December 1998 and the President and Chief Executive Officer of
Morgan Stanley Dean Witter Advisors in February 1998. He has
been an Executive Vice President of DWR since 1990, during which
time he has been Director of DWR's Taxable Fixed Income and
Futures divisions, Managing Director in Corporate Finance and
Corporate Treasurer. Mr. Merin received his Bachelor's degree
from Trinity College in Connecticut and his M.B.A. degree in
Finance and Accounting from the Kellogg Graduate School of
Management of Northwestern University in 1977.
Joseph G. Siniscalchi, age 55, is a Director of Demeter. Mr.
Siniscalchi joined DWR in July 1984 as a First Vice President,
Director of General Accounting and served as a Senior Vice
President and Controller for DWR's Securities Division through
1997. He is currently Executive Vice President and Director of
the Operations Division of DWR. From February 1980 to July 1984,
Mr. Siniscalchi was Director of Internal Audit at Lehman Brothers
Kuhn Loeb, Inc.
Edward C. Oelsner, III, age 59, is a Director of Demeter. Mr.
Oelsner is currently an Executive Vice President and head of the
Product Development Group at Morgan Stanley Dean Witter Advisors,
an affiliate of DWR. Mr. Oelsner joined DWR in 1981 as a
Managing Director in DWR's Investment Banking Department
specializing in coverage of regulated industries and,
subsequently, served as head of the DWR Retail Products Group.
Prior to joining DWR, Mr. Oelsner held positions at The First
Boston Corporation as a member of the Research and Investment
Banking Departments from 1967 to 1981. Mr. Oelsner received his
M.B.A. in Finance from the Columbia University Graduate School of
Business in 1966 and an A.B. in Politics from Princeton
University in 1964.
Richard A. Beech, age 49, is a Director of Demeter. Mr. Beech
has been associated with the futures industry for over 23 years.
He has been at DWR since August 1984 where he is presently Senior
Vice President and head of Branch Futures. Mr. Beech began his
career at the Chicago Mercantile Exchange, where he became the
Chief Agricultural Economist doing market analysis, marketing and
compliance. Prior to joining DWR, Mr. Beech also had worked at
two investment banking firms in operations, research, managed
futures and sales management.
Raymond A. Harris, age 44, is a Director of Demeter. Mr. Harris
is currently Executive Vice President, Planning and
Administration for Morgan Stanley Dean Witter Asset Management
and has worked at DWR or its affiliates since July 1982, serving
in both financial and administrative capacities. From August
1994 to January 1999, he worked in two separate DWR affiliates,
Discover Financial Services and Novus Financial Corp.,
culminating as Senior Vice President. Mr. Harris received his
B.A. degree from Boston College and his M.B.A. in finance from
the University of Chicago.
Anthony J. DeLuca, age 38, became a Director of Demeter on
September 14, 2000. Mr. DeLuca is also a Director of DWFCM. Mr.
DeLuca was appointed the Controller of Asset Management for MSDW
in June 1999. Prior to that, Mr. DeLuca was a partner at the
accounting firm of Ernst & Young LLP, where he had MSDW as a
major client. Mr. DeLuca had worked continuously at Ernst &
Young LLP ever since 1984, after he graduated from Pace
University with a B.B.A. degree in Accounting.
Raymond E. Koch, age 45, is Chief Financial Officer of Demeter.
Effective July 10, 2000, Mr. Koch replaced Mr. Raibley as Chief
Financial Officer of Demeter. Mr. Koch began his career at MSDW
in 1988, has overseen the Managed Futures Accounting function
since 1992, and is currently First Vice President, Director of
Managed Futures and Realty Accounting. From November 1979 to
June 1988, Mr. Koch held various positions at Thomson McKinnon
Securities, Inc. culminating as Manager, Special Projects in the
Capital Markets Division. From August 1977 to November 1979 he
was an auditor, specializing in financial services at Deloitte
Haskins and Sells. Mr. Koch received his B.B.A. in accounting
from Iona College in 1977, an M.B.A. in finance from Pace
University in 1984 and is a Certified Public Accountant.
Lewis A. Raibley, III, age 38, served as Vice President, Chief
Financial Officer, and a Director of Demeter and DWFCM until his
resignation from MSDW on July 1, 2000.
All of the foregoing directors have indefinite terms.
Item 11. EXECUTIVE COMPENSATION
The Partnership has no directors and executive officers. As a
limited partnership, the business of the Partnership is managed
by Demeter, which is responsible for the administration of the
business affairs of the Partnership but receives no compensation
for such services.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners - As of
December 31, 2000, there were no persons known to be beneficial
owners of more than 5 percent of the Units.
(b) Security Ownership of Management - At December 31, 2000,
Demeter owned 215.962 Units of General Partnership Interest in
the Partnership, representing a 1.86 percent interest in the
Partnership.
(c) Changes in Control - None
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Refer to Note 2 - "Related Party Transactions" of "Notes to
Financial Statements", in the accompanying Annual Report to
Limited Partners for the year ended December 31, 2000, which is
incorporated by reference to Exhibit 13.01 of this Form 10-K. In
its capacity as the Partnership's retail commodity broker, DWR,
received commodity brokerage commissions (paid and accrued by the
Partnership) of $807,298 for the year ended December 31, 2000.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) 1. Listing of Financial Statements
The following financial statements and report of independent
auditors, all appearing in the accompanying Annual Report to
Limited Partners for the year ended December 31, 2000 are
incorporated by reference to Exhibit 13.01 of this Form 10-K:
- - Report of Deloitte & Touche LLP, independent auditors, for
the years ended December 31, 2000, 1999 and 1998.
- - Statements of Financial Condition as of December 31, 2000
and
1999.
- - Statements of Operations, Changes in Partners' Capital, and
Cash Flows for the years ended December 31, 2000, 1999 and 1998.
- - Notes to Financial Statements.
With the exception of the aforementioned information and the
information incorporated in Items 7, 8, and 13, the Annual Report
to Limited Partners for the year ended December 31, 2000 is not
deemed to be filed with this report.
2. Listing of Financial Statement Schedules
No financial statement schedules are required to be filed with
this report.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed by the Partnership during
the last quarter of the period covered by this report.
(c) Exhibits
Refer to Exhibit Index on Page E-1.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
DEAN WITTER GLOBAL
PERSPECTIVE PORTFOLIO L.P.
(Registrant)
BY: Demeter Management
Corporation,
General Partner
March 30, 2001 BY: /s/ Robert E. Murray .
Robert E. Murray, Director,
Chairman of the Board and
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
Demeter Management Corporation.
BY: /s/ Robert E. Murray March 30, 2001
Robert E. Murray, Director,
Chairman of the Board and
President
/s/ Mitchell M. Merin March 30, 2001
Mitchell M. Merin, Director
/s/ Joseph G. Siniscalchi March 30, 2001
Joseph G. Siniscalchi, Director
/s/ Edward C. Oelsner III March 30, 2001
Edward C. Oelsner III, Director
/s/ Mitchell M. Merin March 30, 2001
Mitchell M. Merin, Director
/s/ Richard A. Beech March 30, 2001
Richard A. Beech, Director
/s/ Raymond A. Harris March 30, 2001
Raymond A. Harris, Director
/s/ Anthony J. DeLuca March 30, 2001
Anthony J. DeLuca, Director
/s/ Raymond E. Koch March 30, 2001
Raymond E. Koch, Chief
Financial Officer and Principal
Accounting Officer
EXHIBIT INDEX
ITEM
3.01 Limited Partnership Agreement of the Partnership, dated as
of November 7, 1991 is incorporated by reference to Exhibit
3.01 and Exhibit 3.02 of the Partnership's Registration
Statement on Form S-1.
10.01Management Agreements among the Partnership, Demeter and
A.O. Management, Inc., Chang Crowell and Millburn each
dated as of December 31, 1991 is incorporated by reference
to Exhibit 10.02 of the Partnership's Registration
Statement on Form S-1.
10.02Management Agreement among the Partnership, Demeter
Management Corporation and ELM Financial Incorporated dated
as of May 1, 1994 is incorporated by reference to Exhibit
10.03 of the Partnership's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994.
10.03Management Agreement among the Partnership, Demeter
Management Corporation and EMC Capital Management, Inc.,
dated as of June 1, 1994 is incorporated by reference to
Exhibit 10.04 of the Partnership's Annual Report on Form 10-
K for the fiscal year ended December 31, 1994.
10.04Amended and Restated Customer Agreement, dated as of
December 1, 1997, between the Partnership and Dean Witter
Reynolds Inc. is incorporated by reference to Exhibit 10.05
of the Partnership's Form 10-K (File No. 0-19901) for the
fiscal year ended December 31, 1998.
10.05Customer Agreement, dated as of December 1, 1997, among the
Partnership, Carr Futures, Inc., and Dean Witter Reynolds
Inc. is incorporated by reference to Exhibit 10.05 of the
Partnership's Form 10-K (File NO. 0-19901) for the fiscal
year ended December 31, 1998.
10.06International Foreign Exchange Master Agreement, dated as
of August 1, 1997, between the Partnership and Carr
Futures, Inc. is incorporated by reference to Exhibit 10.06
of the Partnership's Form 10-K (File No. 0-19901) for the
fiscal year ended December 31, 1998.
10.07 Customer Agreement, dated as of May 1, 2000 between
Morgan Stanley & Co. Incorporated, the Partnership and Dean
Witter Reynolds Inc. is incorporated by reference to Exhibit
10.07 of the Partnership's Form 10-Q (File No. 0-19901) for the
quarter ended June 30, 2000.
13.01Annual Report to Limited Partners for the year ended
December 31, 2000 is filed herewith.
21.01Supplement (dated April 27, 1992) to the Prospectus is
incorporated by reference to the Partnership's Registration
Statement on Form S-1, Post Effective Amendment Number 1.
Global
Perspective
Portfolio
December 31, 2000
Annual Report
MORGAN STANLEY DEAN WITTER
Dean Witter Global Perspective Portfolio L.P.
Historical Fund Performance
Presented below is the percentage change in Net Asset Value per Unit from the
start of each calendar year the Fund has traded. Also provided is the incep-
tion-to-date return and the annualized return since inception for the Fund.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
Year Return
---- ------
1992 (10 months) 4.6%
1993 -4.7%
1994 -31.6%
1995 16.8%
1996 9.3%
1997 11.1%
1998 11.2%
1999 -9.8%
2000 3.6%
Inception-to-Date Return: 0.5%
Annualized Return: 0.1%
Demeter Management Corporation
Two World Trade Center
62nd Floor
New York, NY 10048
Telephone (212) 392-8899
Dean Witter Global Perspective Portfolio L.P.
Annual Report
2000
Dear Limited Partner:
This marks the ninth annual report for the Dean Witter Global Perspective
Portfolio L.P. (the "Fund"). The Fund began the year trading at a Net Asset
Value per Unit of $970.18 and finished 2000 at a Net Asset Value of $1,005.36,
a net gain of 3.6%.
Overall, the Fund recorded an increase in Net Asset Value per Unit during
2000. The most significant gains were recorded in the energy markets, as long
futures positions in both crude oil and its refined products proved profitable
during the first quarter on growing speculation that OPEC would extend produc-
tion cuts. Additional gains resulted from long positions in natural gas
futures, as prices skyrocketed to all-time highs during the fourth quarter on
cold winter weather across much of the U.S. and continued concerns regarding
supply. Gains were also experienced from long futures positions in sugar
futures, as prices trended to 22-month highs during June due to strong demand
and declining production from Brazil. Smaller gains were experienced in the
fourth quarter from long positions in the euro, as the value of the European
common currency strengthened relative to the U.S. dollar on concerns about
slowing U.S. growth and persistent declines in U.S. stocks. A portion of the
Fund's gains was offset by losses experienced in global stock index futures
markets, as the Fund experienced difficulty trading Asian and Australian stock
indices throughout the first half of the year. Losses were also recorded in
the metals markets as erratic price activity resulted in the predominance of
trendless markets.
Should you have any questions concerning this report, please feel free to con-
tact Demeter Management Corporation at Two World Trade Center, 62nd Floor, New
York, NY 10048, or your Morgan Stanley Dean Witter Financial Advisor.
I hereby affirm, that to the best of my knowledge and belief, the information
contained in this report is accurate and complete. Past performance is not a
guarantee of future results.
Sincerely,
/s/ Robert E. Murray
Robert E. Murray
Chairman
Demeter Management Corporation
General Partner
Dean Witter Global Perspective Portfolio L.P.
Independent Auditors' Report
The Limited Partners and the General Partner:
We have audited the accompanying statements of financial condition of Dean
Witter Global Perspective Portfolio L.P. (the "Partnership") as of December
31, 2000 and 1999 and the related statements of operations, changes in part-
ners' capital, and cash flows for each of the three years in the period ended
December 31, 2000. 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 audits.
We conducted our audits in accordance with auditing standards generally ac-
cepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements are free of material misstatement. An audit includes examin-
ing, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting princi-
ples used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits pro-
vide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material re-
spects, the financial position of Dean Witter Global Perspective Portfolio
L.P. at December 31, 2000 and 1999 and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2000
in conformity with accounting principles generally accepted in the United
States of America.
/S/ Deloitte & Touche LLP
New York, New York
February 16, 2001
Dean Witter Global Perspective Portfolio L.P.
Statements of Financial Condition
December 31,
----------------------
2000 1999
---------- ----------
$ $
ASSETS
Equity in futures interests trading accounts:
Cash 9,831,603 14,098,056
Net unrealized gain on open contracts (MS&Co.) 2,003,653 --
Net unrealized loss on open contracts (MSIL) (83,706) --
Net unrealized gain on open contracts (Carr) -- 987,025
---------- ----------
Total net unrealized gain on open contracts 1,919,947 987,025
---------- ----------
Total Trading Equity 11,751,550 15,085,081
Interest receivable (DWR) 44,060 53,212
Due from DWR 23,246 65,610
---------- ----------
Total Assets 11,818,856 15,203,903
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 123,597 310,659
Accrued management fees 29,535 37,986
Accrued administrative expenses 4,670 9,491
---------- ----------
Total Liabilities 157,802 358,136
---------- ----------
PARTNERS' CAPITAL
Limited Partners (11,382.944
and 15,086.096 Units, respectively) 11,443,935 14,636,245
General Partner (215.962 Units) 217,119 209,522
---------- ----------
Total Partners' Capital 11,661,054 14,845,767
---------- ----------
Total Liabilities and
Partners' Capital 11,818,856 15,203,903
========== ==========
NET ASSET VALUE PER UNIT 1,005.36 970.18
========== ==========
The accompanying notes are an integral part of these financial statements.
Dean Witter Global Perspective Portfolio L.P.
Statements of Operations
For the Years Ended
December 31,
--------------------------------
2000 1999 1998
--------- ---------- ---------
$ $ $
REVENUES
Trading profit (loss):
Realized (65,193) 447,017 2,823,992
Net change in unrealized 932,922 (823,956) 606,283
--------- ---------- ---------
Total Trading Results 867,729 (376,939) 3,430,275
Interest income (DWR) 569,251 645,536 738,752
--------- ---------- ---------
Total Revenues 1,436,980 268,597 4,169,027
--------- ---------- ---------
EXPENSES
Brokerage commissions (DWR) 807,298 1,203,533 1,308,493
Management fees 361,865 527,136 589,789
Transaction fees and costs 91,326 155,326 198,739
Administrative expenses 27,710 43,819 49,027
Incentive fee -- 13,757 --
--------- ---------- ---------
Total Expenses 1,288,199 1,943,571 2,146,048
--------- ---------- ---------
NET INCOME (LOSS) 148,781 (1,674,974) 2,022,979
========= ========== =========
Net Income (Loss) Allocation:
Limited Partners 141,184 (1,652,120) 1,934,545
General Partner 7,597 (22,854) 88,434
Net Income (Loss) per Unit:
Limited Partners 35.18 (105.82) 108.77
General Partner 35.18 (105.82) 108.77
Statements of Changes in Partners' Capital
For the Years Ended December 31, 2000, 1999 and 1998
Units of
Partnership Limited General
Interest Partners Partner Total
----------- ---------- -------- ----------
$ $ $
Partners' Capital,
December 31, 1997 21,679.155 20,276,293 692,502 20,968,795
Net income -- 1,934,545 88,434 2,022,979
Redemptions (4,033.062) (3,455,971) (548,560) (4,004,531)
---------- ---------- -------- ----------
Partners' Capital,
December 31, 1998 17,646.093 18,754,867 232,376 18,987,243
Net loss -- (1,652,120) (22,854) (1,674,974)
Redemptions (2,344.035) (2,466,502) -- (2,466,502)
---------- ---------- -------- ----------
Partners' Capital, December 31,
1999 15,302.058 14,636,245 209,522 14,845,767
Net income -- 141,184 7,597 148,781
Redemptions (3,703.152) (3,333,494) -- (3,333,494)
---------- ---------- -------- ----------
Partners' Capital,
December 31, 2000 11,598.906 11,443,935 217,119 11,661,054
========== ========== ======== ==========
The accompanying notes are an integral part of these financial statements.
Dean Witter Global Perspective Portfolio L.P.
Statements of Cash Flows
For the Years Ended
December 31,
----------------------------------
2000 1999 1998
---------- ---------- ----------
$ $ $
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) 148,781 (1,674,974) 2,022,979
Noncash item included in net income
(loss):
Net change in unrealized (932,922) 823,956 (606,283)
Decrease in operating assets:
Interest receivable (DWR) 9,152 1,242 19,170
Due from DWR 42,364 45,748 93,369
Net option premiums -- -- 53,391
Increase (decrease) in operating
liabilities:
Accrued management fees (8,451) (9,948) (5,120)
Accrued administrative expenses (4,821) (2,505) 11,996
---------- ---------- ----------
Net cash provided by (used
for) operating activities (745,897) (816,481) 1,589,502
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in redemptions payable (187,062) 172,201 (61,327)
Redemptions of Units (3,333,494) (2,466,502) (4,004,531)
---------- ---------- ----------
Net cash used for financing activities (3,520,556) (2,294,301) (4,065,858)
---------- ---------- ----------
Net decrease in cash (4,266,453) (3,110,782) (2,476,356)
Balance at beginning of period 14,098,056 17,208,838 19,685,194
---------- ---------- ----------
Balance at end of period 9,831,603 14,098,056 17,208,838
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
Dean Witter Global Perspective Portfolio L.P.
Notes to Financial Statements
1. Summary of Significant Accounting Policies
Organization--Dean Witter Global Perspective Portfolio L.P. (the "Partner-
ship") is a limited partnership organized to engage primarily in the specula-
tive trading of futures and forward contracts, options on futures contracts,
physical commodities and other commodity interests (collectively, "futures in-
terests").
The general partner is Demeter Management Corporation ("Demeter"). The non-
clearing commodity broker is Dean Witter Reynolds Inc. ("DWR"). Morgan Stanley
& Co., Inc. ("MS&Co.") and Morgan Stanley & Co. International Limited
("MSIL"), provide clearing and execution services. Prior to May 2000, Carr
Futures Inc. ("Carr") provided clearing and execution services to the Partner-
ship. Demeter, DWR, MS&Co. and MSIL are wholly-owned subsidiaries of Morgan
Stanley Dean Witter & Co. ("MSDW").
Effective February 19, 1998, Morgan Stanley, Dean Witter, Discover & Co.
changed its corporate name to Morgan Stanley Dean Witter & Co.
The trading advisors for the Partnership are EMC Capital Management, Inc.
("EMC") and Millburn Ridgefield Corporation ("Millburn") (the "Trading Advis-
ors").
Prior to July 31, 2000, ELM Financial, Inc. ("ELM") was also a trading advisor
in the Partnership. Effective August 1, 2000, ELM was removed as a trading ad-
visor to the Partnership and assets previously managed by ELM were equally
reallocated to EMC and Millburn. Future redemptions will be allocated among
EMC and Millburn in proportion to the percentage of monthly average equity
managed by each trading advisor.
Demeter is required to maintain a 1% minimum interest in the equity of the
Partnership and income (losses) are shared by Demeter and the limited partners
based upon their proportional ownership interests.
Use of Estimates--The financial statements are prepared in accordance with ac-
counting principles generally accepted in the United States of America, which
require management to make estimates and assumptions that affect the reported
amounts in the financial statements and related disclosures. Management be-
lieves that the estimates utilized in the preparation of the financial state-
ments are prudent and reasonable. Actual results could differ from those esti-
mates.
Revenue Recognition--Futures interests are open commitments until settlement
date. They are valued at market on a daily basis and the resulting net change
in unrealized gains and losses are reflected in the change in unrealized prof-
it (loss) on open contracts from one period to the next in the statements of
operations. Monthly, DWR pays the Partnership interest income based upon 80%
of its average daily Net Assets for the month at a rate equal to the average
yield on 13-week U.S.
Dean Witter Global Perspective Portfolio L.P.
Notes to Financial Statements--(Continued)
Treasury bills. For purposes of such interest payments, Net Assets do not in-
clude monies due the Partnership on futures interests, but not actually re-
ceived.
Net Income (Loss) per Unit--Net income (loss) per unit of limited partnership
interest ("Unit(s)") is computed using the weighted average number of Units
outstanding during the period.
Equity in Futures Interests Trading Accounts--The Partnership's asset "Equity
in futures interests trading accounts," reflected in the statements of finan-
cial condition consists of (A) cash on deposit with DWR, MS&Co. and MSIL to be
used as margin for trading; (B) net unrealized gains or losses on open con-
tracts, which are valued at market and calculated as the difference between
original contract value and market value, and (C) net option premiums, which
represent the net of all monies paid and/or received for such option premiums.
The Partnership, in the normal course of business, enters into various con-
tracts with MS&Co. and MSIL acting as its commodity brokers. Pursuant to bro-
kerage agreements with MS&Co. and MSIL, to the extent that such trading re-
sults in unrealized gains or losses, the amounts are offset and reported on a
net basis on the Partnership's statements of financial condition.
The Partnership has offset the fair value amounts recognized for forward con-
tracts executed with the same counterparty as allowable under terms of the
master netting agreement with MS&Co., the sole counterparty on such contracts.
The Partnership has consistently applied its right to offset.
Brokerage Commissions and Related Transaction Fees and Costs--The Partnership
accrues brokerage commissions on a half-turn basis at 80% of DWR's published
non-member rates. Transaction fees and costs are accrued on a half-turn basis.
Brokerage commissions and transaction fees combined are capped at 13/20 of 1%
per month (a maximum 7.8% annual rate) of Net Assets.
Operating Expenses--The Partnership bears all operating expenses related to
its trading activities, to a maximum of 1/4 of 1% annually of the Partner-
ship's average month-end Net Assets. These include filing fees, clerical, ad-
ministrative, auditing, accounting, mailing, printing, and other incidental
operating expenses as permitted by the Limited Partnership Agreement. In addi-
tion, the Partnership incurs a monthly management fee and may incur an incen-
tive fee. Demeter bears all other operating expenses.
Redemptions--Limited Partners may redeem some or all of their Units at 100% of
the Net Asset Value per Unit as of the last day of any month upon five busi-
ness days advance notice by redemption form to Demeter.
Dean Witter Global Perspective Portfolio L.P.
Notes to Financial Statements--(Continued)
Distributions--Distributions, other than redemptions of Units, are made on a
pro-rata basis at the sole discretion of Demeter. No distributions have been
made to date.
Income Taxes--No provision for income taxes has been made in the accompanying
financial statements, as partners are individually responsible for reporting
income or loss based upon their respective share of the Partnership's revenues
and expenses for income tax purposes.
Dissolution of the Partnership--The Partnership will terminate on December 31,
2025, or at an earlier date if certain conditions set forth in the Limited
Partnership Agreement occur.
2. Related Party Transactions
The Partnership pays brokerage commissions to DWR as described in Note 1. The
Partnership's cash is on deposit with DWR, MS&Co., and MSIL in futures inter-
ests trading accounts to meet margin requirements as needed. DWR pays interest
on these funds as described in Note 1.
3. Trading Advisors
Compensation to EMC and Millburn consists of a management fee and an incentive
fee as follows:
Management Fee--The Partnership pays a monthly management fee equal to 1/4 of
1% per month (a 3% annual rate) of the Partnership's adjusted Net Assets, as
defined in the Limited Partnership Agreement, as of the last day of each
month.
Incentive Fee--The Partnership pays a quarterly incentive fee to each Trading
Advisor equal to 17.5% of trading profits experienced by the Net Assets allo-
cated to such Trading Advisor as of the end of each calendar quarter. Trading
profits represent the amount by which profits from futures, forward and op-
tions trading exceed losses, after brokerage commissions, management fees,
transaction fees and costs and administrative expenses are deducted. If a
Trading Advisor has experienced trading losses with respect to its allocated
Net Assets at the time of any supplemental closing, the Trading Advisor must
earn back such losses plus a pro rata amount related to the funds allocated to
the Trading Advisor at such supplemental closing to be eligible for an incen-
tive fee. Such incentive fee is accrued in each month in which trading profits
occur. In those months in which trading profits are negative, previous
accruals, if any, during the incentive period will be reduced. In those in-
stances in which a limited partner redeems Units, the incentive fee (earned
through a redemption date) is paid to such Trading Advisor on those Units re-
deemed in the month of such redemptions.
4. Financial Instruments
The Partnership trades futures and forward contracts, options on futures con-
tracts, physical commodities and other commod-
Dean Witter Global Perspective Portfolio L.P.
Notes to Financial Statements--(Continued)
ity interests. Futures and forwards represent contracts for delayed delivery
of an instrument at a specified date and price. Risk arises from changes in
the value of these contracts and the potential inability of counterparties to
perform under the terms of the contracts. There are numerous factors which may
significantly influence the market value of these contracts, including inter-
est rate volatility.
In June 1998, the Financial Accounting Standards Board ("FASB") issued State-
ment of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Deriv-
ative Instruments and Hedging Activities" effective for fiscal years beginning
after June 15, 2000, as amended by SFAS No. 137. The Partnership adopted the
provisions of SFAS No. 133 beginning with the fiscal year ended December 31,
1998. SFAS No. 133 superceded SFAS Nos. 119 and 105, which required the dis-
closure of average aggregate fair values and contract/notional values, respec-
tively, of derivative financial instruments for an entity that carries its as-
sets at fair value. SFAS No. 133 was further amended by SFAS No. 138, which
clarifies issues surrounding interest rate risk, foreign currency denomina-
tions, normal purchases and sales and net hedging. The application of SFAS No.
133, as amended by SFAS No. 137 and SFAS No. 138, did not have a significant
effect on the Partnership's financial statements.
SFAS No. 133 defines a derivative as a financial instrument or other contract
that has all three of the following characteristics:
(1) One or more underlying notional amounts or payment provisions;
(2) Requires no initial net investment or a smaller initial net investment
than would be required relative to changes in market factors;
(3) Terms require or permit net settlement.
Generally derivatives include futures, forwards, swaps or option contracts, or
other financial instruments with similar characteristics such as caps, floors
and collars.
The net unrealized gain on open contracts is reported as a component of
"Equity in futures interests trading accounts" on the statements of financial
condition and totaled $1,919,947 and $987,025 at December 31, 2000 and 1999,
respectively.
Of the $1,919,947 net unrealized gain on open contracts at December 31, 2000,
$1,419,017 related to exchange-traded futures contracts and $500,930 related
to off-exchange-traded forward currency contracts.
Of the $987,025 net unrealized gain on open contracts at December 31, 1999,
$957,815 related to exchange-traded futures contracts and $29,210 related to
off-exchange-traded forward currency contracts.
Dean Witter Global Perspective Portfolio L.P.
Notes to Financial Statements--(Continued)
Exchange-traded futures contracts held by the Partnership at December 31, 2000
and 1999 mature through September 2001 and June 2000, respectively. Off-ex-
change-traded forward currency contracts held by the Partnership at December
31, 2000 and 1999 mature through March 2001 and March 2000, respectively.
The Partnership has credit risk associated with counterparty nonperformance.
The credit risk associated with the instruments in which the Partnership is
involved is limited to the amounts reflected in the Partnership's statements
of financial condition.
The Partnership also has credit risk because DWR, MS&Co., and MSIL act as the
futures commission merchants or the counterparties with respect to most of the
Partnership's assets. Exchange-traded futures and futures-styled options con-
tracts are marked to market on a daily basis, with variations in value settled
on a daily basis. DWR, MS&Co. and MSIL, each as a futures commission merchant
for all of the Partnership's exchange-traded futures and futures-styled op-
tions contracts, are required, pursuant to regulations of the Commodity
Futures Trading Commission to segregate from their own assets, and for the
sole benefit of their commodity customers, all funds held by them with respect
to exchange-traded futures and futures-styled option contracts including an
amount equal to the net unrealized gain on all open futures and futures-styled
options contracts, which funds, in the aggregate, totaled $11,250,620 and
$15,055,871 at December 31, 2000 and 1999, respectively. With respect to the
Partnership's off-exchange-traded forward currency and option contracts, there
are no daily settlements of variations in value nor is there any requirement
that an amount equal to the net unrealized gain on open forward and option
contracts be segregated. With respect to those off-exchange-traded forward
currency contracts, the Partnership is at risk to the ability of MS&Co., the
sole counterparty on all of such contracts, to perform. The Partnership has a
netting agreement with MS&Co. This agreement, which seeks to reduce both the
Partnership's and MS&Co.'s exposure on off-exchange-traded forward currency
contracts, should materially decrease the Partnership's credit risk in the
event of MS&Co.'s bankruptcy or insolvency.
5. Legal Matters
Similar class actions were filed in 1996 in California and New York State
courts. Each of the actions were dismissed in 1999. However, the New York
State class action discussed below is still pending because plaintiffs ap-
pealed the trial court's dismissal of their case on March 3, 2000.
On September 18 and 20, 1996, purported class actions were filed in the Su-
preme Court of the State of New York, New York County, on behalf of all pur-
chasers of interests in limited partnership commodity pools sold by DWR. Named
defendants
Dean Witter Global Perspective Portfolio L.P.
Notes to Financial Statements--(Concluded)
include DWR, Demeter, MSDW, certain limited partnership commodity pools of
which Demeter is the general partner and certain trading advisors to those
pools. A consolidated and amended complaint in the action pending in the Su-
preme Court of the State of New York was filed on August 13, 1997, alleging
that the defendants committed fraud, breach of fiduciary duty, and negligent
misrepresentation in the sale and operation of the various limited partnership
commodity pools. The complaints sought unspecified amounts of compensatory and
punitive damages and other relief. The New York Supreme Court dismissed the
New York action in November 1998, but granted plaintiffs leave to file an
amended complaint, which they did in early December 1998. The defendants filed
a motion to dismiss the amended complaint with prejudice on February 1, 1999.
By decision dated December 21, 1999, the New York Supreme Court dismissed the
case with prejudice. However, on March 3, 2000, plaintiffs appealed the trial
court's dismissal of their case.
MORGAN STANLEY DEAN WITTER & CO.
Two World Trade Center
62nd Floor
New York, NY 10048
Presorted
First Class Mail
U.S. Postage Paid
Brooklyn, NY
Permit No. 529
E-1