Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Alternative Asset Growth Fund, L.P.
Commission File #0-18500
Dear Sirs:
This filing contains Form 10-Q for the quarter ended September 30, 2002.
Very truly yours,
ALTERNATIVE ASSET GROWTH FUND, L.P.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 2002
------------
Commission File Number 0-18500
------------
ALTERNATIVE ASSET GROWTH FUND, L.P.
-----------------------------------
(Exact name of Partnership)
Delaware 74-2546493
- ----------------------- ------------------------------------
(State of Organization) (I.R.S. Employer Identification No.)
ProFutures, Inc.
11612 Bee Cave Road, Suite 100
Austin, Texas 78738
------------------------------
(Address of principal executive office)
Partnership's telephone number
(800) 348-3601
--------------
Indicate by check mark whether the Partnership (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 Partnership 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 whether the registrant is an accelerated filer (as
Defined in Rule 12b-2 of the Exchange Act).
Yes
No X
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
ALTERNATIVE ASSET GROWTH FUND, L.P.
STATEMENTS OF FINANCIAL CONDITION
September 30, 2002 (Unaudited) and December 31, 2001 (Audited)
-----------
September 30, December 31,
2002 2001
---- ----
ASSETS
Equity in broker trading accounts
Cash $ 6,433,915 $ 6,425,296
Unrealized gain on open contracts 470,639 280,179
----------- -----------
Deposits with broker 6,904,554 6,705,475
Cash 2,493 1,688
----------- -----------
Total assets $ 6,907,047 $ 6,707,163
=========== ===========
LIABILITIES
Accounts payable $ 14,832 $ 14,985
Commissions and other trading fees
on open contracts 8,708 11,109
Incentive fee payable 209,676 0
Management fees payable 69,553 74,604
Redemptions payable 37,556 274,525
----------- -----------
Total liabilities 340,325 375,223
----------- -----------
PARTNERS' CAPITAL (Net Asset Value)
General Partner - 101 and 92 units outstanding
at September 30, 2002 and December 31, 2001 135,981 106,803
Limited Partners - 4,797 and 5,346 units
outstanding at September 30, 2002 and
December 31, 2001 6,430,741 6,225,137
----------- -----------
Total partners' capital
(Net Asset Value) 6,566,722 6,331,940
----------- -----------
$ 6,907,047 $ 6,707,163
=========== ===========
See accompanying notes.
ALTERNATIVE ASSET GROWTH FUND, L.P.
CONDENSED SCHEDULE OF INVESTMENTS
September 30, 2002
(Unaudited)
-----------
LONG FUTURES CONTRACTS
- ----------------------
% of Net
Description Value Asset Value
----------- ----- -----------
Agricultural $ 54,610 0.83 %
Currency 24,448 0.37 %
Energy 60,565 0.92 %
Interest rate 290,192 4.42 %
Metal 951 0.01 %
Stock index (2,423) (0.04)%
-------- -------
Total long futures contracts $428,343 6.51 %
-------- -------
SHORT FUTURES CONTRACTS
- -----------------------
Agricultural $ 121 0.00 %
Currency 1,415 0.02 %
Interest rate (4,714) (0.07)%
Metal 12,204 0.19 %
Stock index 33,270 0.51 %
-------- -------
Total short futures contracts $ 42,296 0.65 %
-------- -------
Total futures contracts $470,639 7.16 %
======== =======
See accompanying notes.
ALTERNATIVE ASSET GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2002 and 2001
(Unaudited)
-----------
Three Months Ended
September 30,
2002 2001
--------- ---------
INCOME
Trading gains
Realized $ 1,367,270 $ 345,859
Change in unrealized 3,022 417,577
----------- -----------
Gain from trading 1,370,292 763,436
Interest income 27,743 58,991
----------- -----------
Total income 1,398,035 822,427
----------- -----------
EXPENSES
Brokerage commissions 42,113 85,297
Incentive fees 209,675 65,210
Management fees 121,394 134,905
Operating expenses 29,490 26,823
----------- -----------
Total expenses 402,672 312,235
----------- -----------
NET INCOME $ 995,363 $ 510,192
=========== ===========
NET INCOME PER GENERAL AND LIMITED
PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
4,938 and 5,926, respectively) $ 201.55 $ 86.10
=========== ===========
INCREASE IN NET ASSET VALUE PER
GENERAL AND LIMITED PARTNER UNIT $ 201.45 $ 86.79
=========== ===========
See accompanying notes.
ALTERNATIVE ASSET GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2002 and 2001
(Unaudited)
-----------
Nine Months Ended
September 30,
2002 2001
--------- ---------
INCOME
Trading gains
Realized $ 1,344,803 $ 741,697
Change in unrealized 190,460 48,035
----------- -----------
Gain from trading 1,535,263 789,732
Interest income 76,426 218,461
----------- -----------
Total income 1,611,689 1,008,193
----------- -----------
EXPENSES
Brokerage commissions 168,342 163,523
Incentive fees 209,968 139,705
Management fees 337,523 401,088
Operating expenses 79,841 79,075
----------- -----------
Total expenses 795,674 783,391
----------- -----------
NET INCOME $ 816,015 $ 224,802
=========== ===========
NET INCOME PER GENERAL AND LIMITED
PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
5,144 and 6,196, respectively) $ 158.62 $ 36.28
=========== ===========
INCREASE IN NET ASSET VALUE PER
GENERAL AND LIMITED PARTNER UNIT $ 176.39 $ 40.68
=========== ===========
See accompanying notes.
ALTERNATIVE ASSET GROWTH FUND, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
For the Nine Months Ended September 30, 2002 and 2001
(Unaudited)
-----------
Total Partners' Capital
Number of ----------------------------------
Units General Limited Total
----------- --------- ----------- -----------
Balances at
December 31, 2001 5,438 $106,803 $ 6,225,137 $ 6,331,940
Net income for the
nine months ended
September 30, 2002 19,178 796,837 816,015
Additions 10 10,000 0 10,000
Redemptions (550) 0 (591,233) (591,233)
------ --------- ----------- -----------
Balances at
September 30, 2002 4,898 $ 135,981 $ 6,430,741 $ 6,566,722
====== ========= =========== ===========
Balances at
December 31, 2000 6,667 $ 109,373 $ 7,840,545 $ 7,949,918
Net income for the
nine months ended
September 30, 2001 3,731 221,071 224,802
Redemptions (861) 0 (1,015,397) (1,015,397)
------ --------- ----------- -----------
Balances at
September 30, 2001 5,806 $ 113,104 $ 7,046,219 $ 7,159,323
====== ========= =========== ===========
Net asset value
per unit at
December 31, 2000 $ 1,192.34
===========
September 30, 2001 $ 1,233.02
===========
December 31, 2001 $ 1,164.33
===========
September 30, 2002 $ 1,340.72
===========
See accompanying notes.
ALTERNATIVE ASSET GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-----------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
A. General Description of the Partnership
Alternative Asset Growth Fund, L.P. (the Partnership) is a Delaware
limited partnership which operates as a commodity investment pool.
The Partnership engages in the speculative trading of futures
contracts and other financial instruments.
B. Regulation
As a registrant with the Securities and Exchange Commission, the
Partnership is subject to the regulatory requirements under the
Securities Act of 1933 and the Securities Exchange Act of 1934. As a
commodity investment pool, the Partnership is subject to the
regulations of the Commodity Futures Trading Commission, an agency of
the United States (U.S.) government which regulates most aspects of
the commodity futures industry; rules of the National Futures
Association, an industry self-regulatory organization; and the
requirements of commodity exchanges and Futures Commission Merchants
(brokers) through which the Partnership trades.
C. Method of Reporting
The Partnership's financial statements are presented in accordance
with accounting principles generally accepted in the United States of
America, which require the use of certain estimates made by the
Partnership's management. Transactions are accounted for on the trade
date. Gains or losses are realized when contracts are liquidated.
Unrealized gains or losses on open contracts (the difference between
contract trade price and quoted market price) are reflected in the
statement of financial condition as a net gain or loss, as there
exists a right of offset of unrealized gains or losses in accordance
with Financial Accounting Standards Board Interpretation No. 39 -
"Offsetting of Amounts Related to Certain Contracts." Any change in
net unrealized gain or loss from the preceding period is reported in
the statement of operations.
For purposes of both financial reporting and calculation of
redemption value, Net Asset Value per Unit is calculated by dividing
Net Asset Value by the number of outstanding units outstanding.
D. Brokerage Commissions
Brokerage commissions include other trading fees and are charged to
expense when contracts are opened.
E. Income Taxes
The Partnership prepares calendar year U.S. and applicable state
information tax returns and reports to the partners their allocable
shares of the Partnership's income, expenses and trading gains or
losses.
ALTERNATIVE ASSET GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
-----------------------------------------------------------
F. Foreign Currency Transactions
The Partnership's functional currency is the U.S. dollar; however, it
transacts business in currencies other than the U.S. dollar. Assets
and liabilities denominated in currencies other than the U.S. dollar
are translated into U.S. dollars at the rates in effect at the date
of the statement of financial condition. Income and expense items
denominated in currencies other than the U.S. dollar are translated
into U.S. dollars at the rates in effect during the period. Gains
and losses resulting from the translation to U.S. dollars are
reported in income currently.
G. Interim Financial Statements
In the opinion of management, the unaudited interim financial
statements reflect all adjustments, which were of a normal and
recurring nature, necessary for a fair presentation of financial
position as of September 30, 2002, and the results of operations
for the three and nine months ended September 30, 2002 and 2001.
Note 2. GENERAL PARTNER
---------------
The General Partner of the Partnership is ProFutures, Inc., which
conducts and manages the business of the Partnership. The Agreement
of Limited Partnership requires the General Partner to contribute to
the Partnership an amount equal to at least the greater of (i) 3% of
aggregate capital contributions of all partners or $100,000,
whichever is less, or (ii) the lesser of 1% of the aggregate capital
contributions of all partners or $500,000.
The Agreement of Limited Partnership also requires that the General
Partner maintain a net worth at least equal to the sum of (i) the
lesser of $250,000 or 15% of the aggregate capital contributions of
any limited partnerships for which it acts as general partner and
which are capitalized at less than $2,500,000; and (ii) 10% of the
aggregate capital contributions of any limited partnerships for which
it acts as general partner and which are capitalized at greater than
$2,500,000.
ProFutures, Inc. has callable subscription agreements with ABN AMRO
Incorporated (ABN), the Partnership's primary broker, whereby ABN has
subscribed to purchase (up to $7,000,000 subject to conditions set
forth in the subscription agreement as amended effective May 20, 2002)
the number of shares of common stock of ProFutures, Inc. necessary to
maintain the General Partner's net worth requirements.
The Partnership pays the General Partner a monthly management fee of
1/6 of 1% (2% annually) of month-end Net Asset Value.
ALTERNATIVE ASSET GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 2. GENERAL PARTNER (CONTINUED)
---------------------------
Total management fees earned by ProFutures, Inc. for the nine months
ended September 30, 2002 and 2001 were $88,004 and $110,342,
respectively. Such management fees earned for the three months ended
September 30, 2002 and 2001 were $31,790 and $35,350, respectively.
Management fees payable to ProFutures, Inc. as of September 30, 2002
and December 31, 2001 were $11,053 and $11,057, respectively.
Note 3. COMMODITY TRADING ADVISORS
--------------------------
The Partnership has trading advisory contracts with several commodity
trading advisors to furnish investment management services to the
Partnership. Certain advisors receive management fees ranging from
1% to 2% annually of Allocated Net Asset Value (as defined in each
respective trading advisory contract). In addition, the trading
advisors receive quarterly incentive fees ranging from 20% to 23% of
Trading Profits (as defined).
Note 4. DEPOSITS WITH BROKER
--------------------
The Partnership deposits funds with ABN to act as broker, subject to
Commodity Futures Trading Commission regulations and various exchange
and broker requirements. Margin requirements are satisfied by the
deposit of cash with such broker. The Partnership earns interest
income on its assets deposited with the broker.
Note 5. OTHER MANAGEMENT FEES
---------------------
The Partnership employs a consultant who is paid a monthly fee of 1/6
of 1% (2% annually) of month-end Net Asset Value for administrative
services rendered to the Partnership. Total fees earned by this
consultant for the nine months ended September 30, 2002 and 2001 were
$88,004 and $110,342, respectively. Such fees earned for the three
months ended September 30, 2002 and 2001 were $31,790 and $35,350,
respectively.
In addition, Kenmar Global Strategies Inc. (Kenmar) serves as a
consultant and assists the General Partner in making decisions about
which commodity trading advisors to hire, the allocations among the
advisors and the day-to-day monitoring and risk management of the
Partnership's trading activities. Kenmar receives a monthly
management fee of 1/12 of 1% (1% annually) of month-end Net Asset
Value. Fees earned by Kenmar totaled $44,002 and $55,171 for the
nine months ended September 30, 2002 and 2001, respectively. Such
fees earned by Kenmar for the three months ended September 30, 2002
and 2001 totaled $15,895 and $17,675, respectively.
Note 6. DISTRIBUTIONS AND REDEMPTIONS
-----------------------------
The Partnership is not required to make distributions, but may do so
at the sole discretion of the General Partner. A Limited Partner may
request and receive redemption of units owned, subject to restrictions
in the Agreement of Limited Partnership.
ALTERNATIVE ASSET GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 7. TRADING ACTIVITIES AND RELATED RISKS
------------------------------------
The Partnership engages in the speculative trading of U.S. and
foreign futures contracts and options on U.S. and foreign futures
contracts (collectively, "derivatives"). 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.
Purchase and sale of futures and options on futures contracts
requires margin deposits with the broker. Additional deposits may
be necessary for any loss on contract value. The Commodity Exchange
Act requires a broker to segregate all customer transactions and
assets from such broker's proprietary activities. A customer's cash
and other property (for example, U.S. Treasury bills) deposited with
a broker are considered commingled with all other customer funds
subject to the broker's segregation requirements. In the event of a
broker'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 total cash and other property deposited.
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 notional contract value of futures 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. Written options
expose the Partnership to potentially unlimited liability, and
purchased options expose the Partnership to a risk of loss limited to
the premiums paid.
The Partnership has a portion of its assets on deposit with a
financial institution in connection with its cash management
activities. In the event of a financial institution's insolvency,
recovery of Partnership assets on deposit may be limited to account
insurance or other protection afforded such deposits.
The General Partner has established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that it will, in fact, succeed in doing so. The General
Partner's basic market risk control procedures consist of
continuously monitoring the trading activity of the various trading
advisors, with the actual market risk controls being applied by the
advisors themselves. The General Partner seeks to minimize credit
risk primarily by depositing and maintaining the Partnership's assets
at financial institutions and brokers which the General Partner
believes to be creditworthy. The Limited Partners bear the risk of
loss only to the extent of the market value of their respective
investments and, in certain specific circumstances, distributions and
redemptions received.
ALTERNATIVE ASSET GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 8. FINANCIAL HIGHLIGHTS
--------------------
The following information presents per unit operating performance data
and other supplemental financial data for the three months and nine
months ended September 30, 2002 and 2001. This information has been
derived from information presented in the financial statements.
Three months ended
September 30,
2002 2001
(Unaudited) (Unaudited)
----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at
beginning of period $1,139.27 $1,146.23
--------- ---------
Income (loss) from operations:
Net investment (loss) (1), (3) (67.39) (28.34)
Net realized and change in
unrealized gain from
trading (2), (3) 268.84 115.13
--------- ---------
Total income from operations 201.45 86.79
--------- ---------
Net asset value per unit at
end of period $1,340.72 $1,233.02
========= =========
Total Return (4) 17.68 % 7.57 %
======= =======
Supplemental Data
Ratios to average net asset value: (5)
Expenses prior to incentive fees (1) 9.83 % 9.32 %
Incentive fees 13.65 % 3.75 %
------- -------
Total expenses (1) 23.48 % 13.07 %
======= =======
Net investment (loss) (1) (21.68)% (9.68)%
======= =======
Nine months ended
September 30,
2002 2001
(Unaudited) (Unaudited)
----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at
beginning of period $1,164.33 $1,192.34
--------- ---------
Income (loss) from operations:
Net investment (loss) (1), (3) (107.09) (64.78)
Net realized and change in unrealized
gain from trading (2), (3) 283.48 105.46
--------- ---------
Total income from operations 176.39 40.68
--------- ---------
Net asset value per unit at
end of period $1,340.72 $1,233.02
========= =========
Total Return (4) 15.15 % 3.41 %
======= =======
Supplemental Data
Ratios to average net asset value: (5)
Expenses prior to incentive fees (1) 9.54 % 8.79 %
Incentive fees 4.80 % 2.55 %
------- -------
Total expenses (1) 14.34 % 11.34 %
======= =======
Net investment (loss) (1) (12.59)% (7.35)%
======= =======
Total returns are calculated based on the change in value of a unit
during the period. An individual partner's total returns and ratios
may vary from the above total returns and ratios based on the timing
of additions and redemptions.
-------------------
(1) Excludes brokerage commissions and other trading fees.
(2) Includes brokerage commissions and other trading fees.
(3) The net investment (loss) per unit is calculated by dividing
the net investment (loss) by the average number of units
outstanding during the period. The net realized and change in
unrealized gain from trading is a balancing amount necessary
to reconcile the change in net asset value per unit with the
other per unit information. Such balancing amount for the nine
months ended September 30, 2002 differs from the calculation of
net trading gain per unit due to the timing of trading gains and
losses during the period relative to the number of units
outstanding.
(4) Not annualized.
(5) Annualized.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
A. LIQUIDITY: Substantially all of the Partnership's assets are
highly liquid, such as cash and open futures and option contracts.
It is possible that extreme market conditions or daily price
fluctuation limits at certain exchanges could adversely affect the
liquidity of open futures and option contracts. There are no
restrictions on the liquidity of these assets except for amounts
on deposit with the brokers needed to meet margin requirements on
open futures contracts.
B. CAPITAL RESOURCES: Since the Partnership's business is the
purchase and sale of various commodity interests, it will make
few, if any, capital expenditures.
The Partnership's offering of Units of Limited Partnership
Interest terminated in 1991.
C. RESULTS OF OPERATIONS: The Partnership's net income (loss) for
the nine months ended September 30,2002 and 2001 consisted of the
following:
2002 2001
---- ----
Three months ended March 31 $(465,616) $ 221,982
Three months ended June 30 286,268 (507,372)
Three months ended September 30 995,363 510,192
--------- ---------
Nine months ended September 30 $ 816,015 $ 224,802
========= =========
As of September 30, 2002, 4,898 Units are outstanding, including
101 General Partner Units, with an aggregate Net Asset Value of
$6,566,722 ($1,340.72 per Unit). This represents an increase
in Net Asset Value of $234,782 compared with December 31, 2001.
The increase is caused by a net gain for the nine months ended
September 30, 2002 offset by redemptions of limited partner units.
As of September 30, 2001, 5,806 Units are outstanding, including
92 General Partner Units, with an aggregate Net Asset Value of
$7,159,323 ($1,233.02 per Unit). This represents a decrease
in Net Asset Value of $790,595 compared with December 31, 2000.
The decrease relates to redemptions of limited partner units
offset by net income.
Third Quarter 2002
------------------
The futures markets continued to be volatile in the third quarter
of 2002. The equity markets suffered losses during the quarter,
which significantly impacted the commodities markets. The looming
threat of war with Iraq also had an impact on the markets,
especially oil and gas futures.
In July, the Partnership gained 8.13%. There were gains in
interest rates and stock indexes along with gains in certain
agricultural commodities. Those gains were partially offset
by losses in the energy complex and metals.
In August, the Partnership gained another 3.42%. Again, there
were gains in interest rate markets. There were also gains in
energy, precious metals, grains and livestock. There were losses
in foreign currencies, stock index futures, and base metals.
In September, the Partnership had another gain of 5.24%. There
were gains in interest rates along with additional gains in stock
indexes and energy. There were losses in precious metals.
The Partnership had a total return of 17.68% for the quarter and
15.15% for the nine months ended September 30, 2002. For the
third quarter 2002, the majority of the Partnership's trading
gains were in interest rate futures and stock index futures and
the largest loss was in foreign currencies.
Second Quarter 2002
-------------------
The futures markets continued to be volatile in the second quarter
of 2002, though there was a surge at the end of the quarter. The
extreme volatility of the equity markets, mainly on the downside,
had a major impact on the commodities markets. Many of the US and
overseas stock indexes and foreign currencies were very active.
Some of this was the result of the corporate scandals that
continue to rock the markets.
In April, the Partnership lost 5.15%. Although there were gains
in Swiss Francs, natural gas, and Euros, they were more than
offset by losses in the German Stock Index, the Japanese Yen,
Euribor futures, the NASDAQ 100, and various bond futures.
In May, the Partnership was essentially flat, with a loss of .17%.
There were gains in foreign currencies due to the drop of the U.S.
dollar. There were also gains in precious metals and agricultural
commodities. The gains were offset by losses in the energy
complex, interest rates and some metals.
In June, the Partnership had a gain of 11.46%. There were gains
in Euro futures and the Swiss Franc, and also a gain in EuroDollar
futures. There were also gains in various stock and bond indexes.
There were losses in British Pounds, the Nikkei Stock Index, and
Gold, but these were more than offset by the gains.
The Partnership had a total return of 5.53% for the quarter and
(2.15)% for the six months ended June 30, 2002. For the second
quarter 2002, the majority of the Partnership's trading gains
were in foreign currencies and the largest loss was in the energy
markets.
First Quarter 2002
------------------
The futures markets remained choppy in the first quarter of 2002.
While the economy was showing some signs of improvement, there
were also some negative signs that caused uncertainty. The
troubles in the Middle East lead to large increases in oil and gas
prices. Gold prices also moved higher early in the quarter, but
gave back some of their gains at the end of the quarter.
In January 2002, the Partnership lost 5.00%. There were large
losses in stock indexes and agricultural commodities. Large
losses were also incurred in interest rates and metals. Many of
the other sectors were essentially flat.
In February 2002, the Partnership lost 6.74%. The Partnership
once again experienced losses in stock indexes and interest rates.
In addition, there were also losses in the energy complex and
foreign currencies. There were some gains in agricultural
commodities and precious metals. These however, were not enough
to offset the losses for the month.
In March 2002, the Partnership managed to gain 4.66%. There were
gains in the energy complex, including Brent Crude Oil and
Unleaded Gas. There were also some gains in bonds and stock
indexes. There were losses in currencies, including the Japanese
Yen and the Swiss Franc. There were also some small losses in
cotton and aluminum. These losses however were not enough to
offset the gains.
For the first quarter 2002, the Partnership's losses overall were
primarily due to currencies and stock index futures.
Third Quarter 2001
------------------
The quarter ended September 30, 2001 started out with gains in
July in base metals, precious metals, stock index futures and
short-term interest rates. The Fed's continuing loose monetary
policy kept both short-term and long-term interest rates somewhat
volatile. August brought large gains in interest rates and
smaller gains in the base metals.
September 2001 was a very volatile month for the Fund due to the
events of September 11th. Although the US markets were closed for
the remainder of the week, most overseas markets remained open,
and significant gains were made during this period. The Fund had
significant profits in short-term interest rate futures (mostly
overseas). There were also large gains made in medium-term
interest rates, which were partially offset by losses in long-
term interest rates. There were also some significant gains in
base metals and losses in energy, which was especially volatile
after the attacks on the World Trade Center and the Pentagon. The
Fund was able to end the quarter with a profit of 7.57% and 3.41%
for the nine months ended September 30, 2001.
The Partnership's net trading gains for the quarter ended
September 30, 2001 resulted from gains in the agricultural,
equities, metals and interest rate market sectors, offset
slightly by losses in the energies and foreign currencies
markets.
Second Quarter 2001
-------------------
Those sectors which gained in March of 2001 showed losses of
similar magnitude in April 2001. A large part of the loss was a
direct result of a sudden and unexpected cut in U.S. interest
rates by the Federal Reserve on April 18th. This caused stock
indexes as well as other markets to sharply reverse their previous
trends. May brought a small gain from a variety of markets.
As of June 1, 2001, the General Partner made two significant
changes to the Fund. First, Gamma Capital Management was
terminated as a Trading Advisor and replaced with Winton Capital
Management, Ltd. Second, the Fund's leverage was increased
through the use of notional funds to approximately 150% of assets.
The General Partner instructed Winton to move into the market in
stages during the month of June rather than establish all
positions at once. The Fund ended the second quarter 2001 with a
loss of 6.68% and the first half of 2001 was a loss of 3.87%.
First Quarter 2001
------------------
The Partnership's Trading Advisors had small losses during January
and February 2001. March 2001 was a much more active month, and
the Advisors were able to show gains in almost all market sectors,
particularly foreign currencies, stock indexes, and interest
rates. The only negative sector in March was energy. For the
first quarter of 2001, the Partnership's net result was a gain of
3.02%.
Market and Credit Risk
----------------------
The General Partner, directly and/or indirectly through its
consultant, has established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that it will, in fact, succeed in doing so. The
General Partner's basic market risk control procedures consist of
continuously monitoring the trading activity of the various
trading advisors, with the actual market risk controls being
applied by the advisors themselves. The General Partner seeks
to minimize credit risk primarily by depositing and maintaining
the Partnership's assets at financial institutions and brokers
which the General Partner believes to be creditworthy. The
Limited Partners bear the risk of loss only to the extent of the
market value of their respective investments and, in certain
specific circumstances, distributions and redemptions received.
Due to the speculative nature of trading commodity interests, the
Partnership's income or loss from operations may vary widely from
period to period. Management cannot predict whether the
Partnership's future Net Asset Value per Unit will increase or
experience a decline.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
D. POSSIBLE CHANGES: The General Partner reserves the right to
terminate certain and/or engage additional commodity trading
advisors in the future and reserves the right to change any of
the Partnership's clearing arrangements.
Item 4. Controls and Procedures.
ProFutures, Inc. as general partner of Alternative Asset Growth Fund, L.P.,
with the participation of the general partner's President and Chief Financial
Officer, has evaluated the effectiveness of the design and operation of its
disclosure controls and procedures with respect to the Partnership within 90
days of the filing date of this quarterly report, and, based on their
evaluation, have concluded that these disclosure controls and procedures are
effective. There were no significant changes in the general partner's internal
controls with respect to the Partnership or in other factors applicable to the
Partnership that could significantly affect these controls subsequent to the
date of their evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
There were no reports filed on Form 8-K.
Exhibits field herewith:
99.1 Form of Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code.
99.2 Form of Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code.
CERTIFICATIONS
- --------------
I, Gary D. Halbert, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Alternative Asset
Growth Fund, L.P.;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we 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 quarterly 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
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
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. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not 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.
Date: November 13, 2002
----------------------------------
/s/ Gary D. Halbert
- -----------------------------------------
Gary D. Halbert, President
ProFutures, Inc., General Partner
I, Debi B. Halbert, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Alternative Asset
Growth Fund, L.P.;
2. Based on my knowledge, this quarterly 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we 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 quarterly 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
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
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. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not 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.
Date: November 13, 2002
----------------------------------
/s/ Debi B. Halbert
- -----------------------------------------
Debi B. Halbert, Chief Financial Officer
ProFutures, Inc., General Partner
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Alternative Asset Growth Fund, L.P.
(Registrant)
/s/ Gary D. Halbert
-----------------------------------
Gary D. Halbert, President
ProFutures, Inc., General Partner
Alternative Asset Growth Fund, L.P.
EXHIBIT 99.1
CERTIFICATION PURSUANT TO SECTION 1350 OF
CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE
------------------------------------------------
I, Gary D. Halbert, the President of ProFutures, Inc. as general partner of
Alternative Asset Growth Fund, L.P., certify that (i) the Form 10-Q for the
quarter ended September 30, 2002 of Alternative Asset Growth Fund, L.P. fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and (ii) the information contained in the Form 10-Q for
the quarter ended September 30, 2002 fairly presents, in all material respects,
the financial condition and results of operations of Alternative Asset Growth
Fund, L.P.
ALTERNATIVE ASSET GROWTH FUND, L.P.
By: ProFutures, Inc., general partner
By: /s/ Gary D. Halbert
---------------------------------
Gary D. Halbert
President
November 13, 2002
EXHIBIT 99.2
CERTIFICATION PURSUANT TO SECTION 1350 OF
CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE
------------------------------------------------
I, Debi B. Halbert, the Chief Financial Officer of ProFutures, Inc. as general
partner of Alternative Asset Growth Fund, L.P., certify that (i) the Form 10-Q
for the quarter ended September 30, 2002 of Alternative Asset Growth Fund, L.P.
fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and (ii) the information contained in the Form
10-Q for the quarter ended September 30, 2002 fairly presents, in all material
respects, the financial condition and results of operations of Alternative
Asset Growth Fund, L.P.
ALTERNATIVE ASSET GROWTH FUND, L.P.
By: ProFutures, Inc., general partner
By: /s/ Debi B. Halbert
---------------------------------
Debi B. Halbert
Chief Financial Officer
November 13, 2002