Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ProFutures Long/Short Growth Fund, L.P.
Commission File Number 0-25585
Dear Sirs:
This filing contains Form 10-Q for the quarter ended September 30, 2004.
Very truly yours,
PROFUTURES LONG/SHORT 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, 2004
--------------
Commission File Number 0-25585
-------
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
---------------------------------------
(Exact name of registrant)
Delaware 74-2849862
- ----------------------- ------------------------------------
(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)
Registrant's telephone number
(800) 348-3601
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X
No
Indicate by check mark 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.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF FINANCIAL CONDITION
September 30, 2004 (Unaudited) and December 31, 2003 (Audited)
-------------
September 30, December 31,
2004 2003
---- ----
ASSETS
Equity in broker trading accounts
Cash $ 7,057,240 $ 9,431,077
Net option premiums (received) (39,162) (96,000)
Unrealized gain on open contracts 811,700 325,895
----------- -----------
Deposits with broker 7,829,778 9,660,972
Cash 3,277 3,490
----------- -----------
Total assets $ 7,833,055 $ 9,664,462
=========== ===========
LIABILITIES
Accounts payable $ 16,629 $ 13,775
Commissions and other trading fees
on open contracts 7,312 4,193
Incentive fees payable 57,218 158,749
Management fees payable 25,593 31,412
Redemptions payable 226,756 507,201
----------- -----------
Total liabilities 333,508 715,330
----------- -----------
PARTNERS' CAPITAL (Net Asset Value)
General Partner - 61 units outstanding at
September 30, 2004 and December 31, 2003 66,327 66,976
Limited Partners - 6,886 and 8,149 units
outstanding at September 30, 2004 and
December 31, 2003 7,433,220 8,882,156
----------- -----------
Total partners' capital
(Net Asset Value) 7,499,547 8,949,132
----------- -----------
$ 7,833,055 $ 9,664,462
=========== ===========
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
CONDENSED SCHEDULES OF INVESTMENTS
September 30, 2004 (Unaudited) and December 31, 2003 (Audited)
-----------
September 30, 2004 December 31, 2003
------------------ -------------------
% of % of
Net Asset Net Asset
Description Value Value Value Value
----------- ----- --------- ----- ---------
LONG FUTURES CONTRACTS
- ----------------------
Agricultural $ 19,288 0.26 % $ 27,330 0.30 %
Currency 115,171 1.54 % 201,070 2.25 %
Energy 234,270 3.12 % 8,020 0.09 %
Interest rate 36,317 0.49 % 5,830 0.07 %
Metal 318,780 4.25 % 73,905 0.82 %
Stock index (18,508) (0.25)% 0 0.00 %
-------- ------- -------- -------
Total long futures contracts $705,318 9.41 % $316,155 3.53 %
-------- ------- -------- -------
SHORT FUTURES CONTRACTS
- -----------------------
Agricultural $ 86,583 1.15 % $ (1,260) (0.01)%
Currency (25) 0.00 % 0 0.00 %
-------- ------- -------- -------
Total short futures contracts $ 86,558 1.15 % $ (1,260) (0.01)%
-------- ------- -------- -------
Total futures contracts $791,876 10.56 % $314,895 3.52 %
======== ======= ======== =======
WRITTEN OPTIONS ON FUTURES CONTRACTS
- ------------------------------------
Stock index options
(premiums received of $39,162
and $96,000, respectively) $(19,338) (0.26)% $(85,000) (0.95)%
======== ======= ======== =======
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2004 and 2003
(Unaudited)
-------------
Three months ended
September 30,
2004 2003
---- ----
TRADING GAINS (LOSSES)
Realized $ (286,323) $ (400,216)
Change in unrealized 813,164 376,419
Brokerage commissions (50,142) (54,217)
------------ ------------
Total trading gains (losses) 476,699 (78,014)
------------ ------------
NET INVESTMENT INCOME (LOSS)
Income
Interest income 28,537 21,134
------------ ------------
Expenses
Incentive fees 57,218 19,813
Management fees 50,581 66,471
Operating expenses 26,835 29,331
------------ ------------
Total expenses 134,634 115,615
------------ ------------
Net investment (loss) (106,097) (94,481)
------------ ------------
NET INCOME (LOSS) $ 370,602 $ (172,495)
============ ============
NET INCOME (LOSS) PER GENERAL
AND LIMITED PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
7,284 and 9,383, respectively) $ 50.88 $ (18.38)
============ ============
INCREASE (DECREASE) IN NET ASSET VALUE
PER GENERAL AND LIMITED PARTNER UNIT $ 52.14 $ (16.51)
============ ============
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2004 and 2003
(Unaudited)
-----------
Nine months ended
September 30,
2004 2003
---- ----
TRADING GAINS (LOSSES)
Realized $ (43,062) $ 1,014,843
Change in unrealized 485,805 (546,368)
Brokerage commissions (177,307) (207,824)
------------ ------------
Total trading gains 265,436 260,651
------------ ------------
NET INVESTMENT INCOME (LOSS)
Income
Interest income 71,336 78,974
------------ ------------
Expenses
Incentive fees 196,965 19,813
Management fees 160,123 233,046
Operating expenses 87,409 80,368
------------ ------------
Total expenses 444,497 333,227
------------ ------------
Net investment (loss) (373,161) (254,253)
------------ ------------
NET INCOME (LOSS) $ (107,725) $ 6,398
============ ============
NET INCOME (LOSS) PER GENERAL
AND LIMITED PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
7,634 and 10,017, respectively) $ (14.11) $ 0.64
============ ============
(DECREASE) IN NET ASSET VALUE PER
GENERAL AND LIMITED PARTNER UNIT $ (10.57) $ (2.94)
============ ============
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
For the Nine Months Ended September 30, 2004 and 2003
(Unaudited)
-------------
Total Partners' Capital
Number of ----------------------------------
Units General Limited Total
--------- -------- ----------- -----------
Balances at
December 31, 2003 8,210 $ 66,976 $ 8,882,156 $ 8,949,132
Net (loss) for the
nine months ended
September 30, 2004 (649) (107,076) (107,725)
Redemptions (1,263) 0 (1,341,860) (1,341,860)
------ -------- ----------- -----------
Balances at
September 30, 2004 6,947 $ 66,327 $ 7,433,220 $ 7,499,547
====== ======== =========== ===========
Balances at
December 31, 2002 10,704 $ 63,353 $10,973,670 $11,037,023
Net income (loss) for the
nine months ended
September 30, 2003 (180) 6,578 6,398
Redemptions (1,781) 0 (1,868,628) (1,868,628)
------ -------- ----------- -----------
Balances at
September 30, 2003 8,923 $ 63,173 $ 9,111,620 $ 9,174,793
====== ======== =========== ===========
Net asset value
per unit at
December 31, 2002 $ 1,031.12
===========
September 30, 2003 $ 1,028.18
===========
December 31, 2003 $ 1,090.08
===========
September 30, 2004 $ 1,079.51
===========
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-------------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
A. General Description of the Partnership
ProFutures Long/Short 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 and option contracts.
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 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 total number of 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.
PROFUTURES LONG/SHORT 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. Statements of Cash Flows
The Partnership has elected not to provide statements of cash
flows as permitted by Statement of Financial Accounting Standards
No. 102 - "Statement of Cash Flows - Exemption of Certain
Enterprises and Classification of Cash Flows from Certain
Securities Acquired for Resale."
H. 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, 2004, and the results of operations
for the three and nine months ended September 30, 2004 and 2003.
Note 2. GENERAL PARTNER
---------------
The General Partner of the Partnership is ProFutures, Inc., which
conducts and manages the business of the Partnership. The Limited
Partnership Agreement requires the General Partner and/or its
principals and affiliates to maintain capital accounts equal to at
least 1% of the total capital of the Partnership. At September 30,
2004 and December 31, 2003, the capital accounts of the General
Partner and/or its affiliates totaled $566,679 and $583,537,
respectively.
The Limited Partnership Agreement was amended effective February 16,
1999 and generally requires that the General Partner maintain a net
worth of up to $1,000,000. ProFutures, Inc. has a callable
stock subscription agreement with ABN AMRO Incorporated (ABN), the
Partnership's broker, whereby ABN has subscribed to purchase (up to
$7,000,000 subject to the 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 net worth requirements.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-------------
Note 2. GENERAL PARTNER (CONTINUED)
---------------------------
The Partnership pays the General Partner a monthly management fee
equal to 1/6 of 1% (2% annually) of month-end Net Assets (as defined
in the Limited Partnership Agreement).
Total management fees earned by ProFutures, Inc. for the nine months
ended September 30, 2004 and 2003 were $121,530 and $158,669,
respectively. Such management fees earned for the three months ended
September 30, 2004 and 2003 were $37,888 and $47,629, respectively.
Management fees payable to ProFutures, Inc. as of September 30, 2004
and December 31, 2003 were $12,899 and $15,787, respectively.
Note 3. COMMODITY TRADING ADVISORS
--------------------------
The Partnership has advisory contracts with several commodity trading
advisors to furnish investment management services to the Partnership.
Certain advisors receive management fees equal to 1% 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 25% 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. The Partnership earns interest income on its
assets deposited with the broker.
At September 30, 2004 and December 31, 2003, the initial margin
requirement of $2,288,271 and $1,822,556, respectively, is satisfied
by the deposit of cash with such broker.
Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
--------------------------------------------
Investments in the Partnership were made by subscription agreement,
subject to acceptance by the General Partner. Effective November
2000, the Partnership is closed to new investment; however, the
General Partner may reopen the Partnership to new investments in the
future.
The Partnership is not required to make distributions, but may do so
at the sole discretion of the General Partner. A Limited Partner may
require the Partnership to redeem any or all of such Limited Partner's
units at Net Asset Value as of the close of business on the last day
of any month upon advance written notice to the General Partner. The
Limited Partnership Agreement contains a complete description of the
Partnership's redemption policies and procedures.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-------------
Note 6. TRADING ACTIVITIES AND RELATED RISKS
------------------------------------
The Partnership engages in the speculative trading of U.S. and foreign
futures contracts and options on 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.
Open contracts generally mature within three months, however, the
Partnership intends to close all contracts prior to maturity. At
September 30, 2004, the latest maturity date for open contracts is
June 2005.
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 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.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-------------
Note 7. 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, 2004 and 2003. This information has been
derived from information presented in the financial statements.
Three months ended
September 30,
2004 2003
(Unaudited) (Unaudited)
----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at
beginning of period $1,027.37 $1,044.69
--------- ---------
Income (loss) from operations:
Total trading gains (losses) (1) 66.70 (6.44)
Net investment (loss) (1) (14.56) (10.07)
--------- ---------
Total income (loss) from operations 52.14 (16.51)
--------- ---------
Net asset value per unit at
end of period $1,079.51 $1,028.18
========= =========
Total Return (3) 5.08 % (1.58)%
======= =======
Supplemental Data
Ratios to average net asset value:
Expenses prior to incentive fees (4) 4.18 % 4.14 %
Incentive fees (3) 0.77 % 0.21 %
------- -------
Total expenses 4.95 % 4.35 %
======= =======
Net investment (loss) (2), (4) (2.64)% (3.23)%
======= =======
Nine months ended
September 30,
2004 2003
(Unaudited) (Unaudited)
----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at
beginning of period $1,090.08 $1,031.12
--------- ---------
Income (loss) from operations:
Total trading gains (1) 38.31 22.44
Net investment (loss) (1) (48.88) (25.38)
--------- ---------
Total (loss) from operations (10.57) (2.94)
--------- ---------
Net asset value per unit at
end of period $1,079.51 $1,028.18
========= =========
Total Return (3) (0.97)% (0.29)%
======= =======
Supplemental Data
Ratios to average net asset value:
Expenses prior to incentive fees (4) 4.16 % 4.04 %
Incentive fees (3) 2.48 % 0.19 %
------- -------
Total expenses 6.64 % 4.23 %
======= =======
Net investment (loss) (2), (4) (2.96)% (3.02)%
======= =======
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 redemptions.
--------------------
(1) The net investment (loss) per unit is calculated by dividing the
net investment (loss) by the average number of units outstanding
during the period. Total trading gains (losses)is a balancing
amount necessary to reconcile the change in net asset value per
unit with the other per unit information. Such balancing amount
may differ from the calculation of total trading gains (losses)
per unit due to the timing of trading gains and losses during the
period relative to the number of units outstanding.
(2) Excludes incentive fees.
(3) Not annualized.
(4) Annualized.
Note 8. SUBSEQUENT EVENTS
-----------------
During October 2004, the General Partner decided to change the
Partnerships primary broker from ABN to Man Financial Inc. (MFI).
On October 22, 2004, ProFutures, Inc. entered into a callable stock
subscription agreement with MFI, whereby MFI has subscribed to
purchase (up to $7,000,000, subject to conditions set forth in the
stock subscription agreement dated October 22, 2004) the number of
shares of common stock of ProFutures, Inc. necessary to maintain the
General Partners net worth requirements. On October 28, 2004,
ProFutures, Inc. terminated the callable stock subscription agreement
with ABN.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Critical Accounting Policies
----------------------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of income and expense during the reporting period. Management
believes that the estimates utilized in preparing the financial
statements are reasonable and prudent; however, actual results could
differ from those estimates. The Partnership's significant accounting
policies are described in detail in Note 1 to the Financial
Statements.
The Partnership records all investments at fair value in its financial
statements, with changes in fair value reported as a component of
realized and change in unrealized trading gain (loss) in the
Statements of Operations. Generally, fair values are based on market
prices; however, in certain circumstances, estimates are involved in
determining fair value in the absence of an active market closing
price (e.g., swap and forward contracts which are traded in the
inter-bank market).
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 exchanges could adversely affect the liquidity
of open futures contracts. There are no restrictions on the
liquidity of these assets except for amounts on deposit with the
broker 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 raises additional capital only through the sale of
Units and trading profits (if any) and does not engage in borrowing.
The Partnership sells no securities other than the Units. Effective
November 2000, the Partnership is closed to new investment; however,
the General Partner may reopen the Partnership to new investments in
the future.
C. RESULTS OF OPERATIONS: The Partnership's net income for the nine
months ended September 30, 2004 and 2003 consisted of the following:
2004 2003
---- ----
Three months ended March 31 $ 154,214 $ 264,882
Three months ended June 30 (632,541) (85,989)
Three months ended September 30 370,602 (172,495)
---------- ----------
Nine months ended September 30 $ (107,725) $ 6,398
========== ==========
At September 30, 2004, partners' capital totaled $7,499,547, a net
decrease of $(1,449,585) from December 31, 2003, due to redemptions of
limited partner units and a net loss for the nine months ended
ended September 30, 2004.
At September 30, 2003, partners' capital totaled $9,174,793, a net
decrease of $(1,862,230) from December 31, 2002, due to redemptions
of limited partner units exceeding net income for the nine months
ended September 30, 2003.
Third Quarter 2004
------------------
The economy continued to grow in the third quarter of 2004, though at
a slower pace. The economic news was a little more mixed, with both
good news and not-so-good news. Overall though, the growth is
continuing, though rising oil prices, trading above $50 a barrel,
could put a damper on things in the coming months.
The Partnership had a gain of 1.14% in July 2004. It was once again a
very difficult month in the markets, especially for trend followers,
though the Partnership did manage a small gain. The Partnership had
large gains in energy, with smaller gains in agricultural commodities
and metals. There were losses in equities, foreign currencies and
interest rates.
The Partnership had a loss of 3.98% for August 2004. The Partnership
had gains in bonds, interest rates and equities. There were losses
mainly in foreign currencies, energy, metals and agricultural
commodities.
The Partnership had a gain of 8.20% in September 2004. The
Partnership had large gains in energy, capitalizing on surging oil
prices. There were also large gains in base metals, with smaller
gains in equities and foreign currencies. There were some losses in
agricultural commodities, interest rates and precious metals.
The Partnership ended the third quarter of 2004 with a gain of 5.08%
and a loss of (0.97)% for the nine months ended September 30, 2004.
The majority of the Partnership's trading gains were in the energy,
equity and metals market sectors, offset by losses in the
agricultural, interest rates and foreign currencies market sectors.
Second Quarter 2004
-------------------
The economic recovery continued in the second quarter of 2004, and
most economic news was positive, though there was a little slowdown
in June. The futures markets were again volatile, especially in
energy, interest rates and currencies.
The Partnership had a loss of 5.63% in April 2004. There were gains
in interest rates, equities and energy. However, these were offset
by losses in metals, foreign currencies and agriculture.
The Partnership had a gain of 1.80% in May 2004. There were gains in
energy, interest rates and metals. There were losses in agriculture,
equities and foreign currencies. Clarke Capital had a stellar month,
up nearly 9%, which was partially offset by losses from Meyer Capital.
The Partnership had a loss of 3.67% in June 2004. There were losses
in all sectors except equities. The largest losses were in foreign
currencies and energy.
Overall, the Partnership's total return was (7.46)% for the quarter
and (5.75)% for the six months ended June 30, 2004. The majority of
the Partnership's trading gains were in the energy sector and the
largest loss was in agricultural commodities.
First Quarter 2004
------------------
The economy continued to improve in the first quarter of 2004, and
most economic news was positive. The futures markets continued to
be volatile, especially energy and currencies.
The Partnership had a loss of 1.79% in January 2004. There were gains
in stock indexes, metals and energy. These were offset by losses in
agricultural commodities, foreign currencies and interest rates.
The Partnership had a gain of 1.92% in February 2004. There were
large gains in stock indexes, with smaller gains in interest rates,
metals, energy and grains. There were some losses in agricultural
commodities and foreign currencies.
The Partnership had a gain of 1.75% in March 2004. There were gains
in metals, interest rates and equities, with smaller gains in certain
agricultural commodities. There were some losses in energy and
foreign currencies.
Overall, the Partnership ended the quarter with a total return of
1.84%. The majority of the trading gains were in equities and metals
and the largest loss was in foreign currencies.
Third Quarter 2003
------------------
The economy continued to improve in the third quarter. The equity
markets were mostly up. Most analysts expect the economy to continue
to improve for the remainder of the year.
In July 2003, the Partnership had a loss of 4.03%. There were losses
in bonds and other interest rates, and foreign currencies. There were
gains in agricultural commodities and energy.
In August 2003, the Partnership had a gain of 0.80%. The gain was
related to stock indexes as no other types of contracts were traded
during the month.
In September 2003, the Partnership had a gain of 1.74%. There were
gains in stock indexes, agricultural commodities, foreign currencies
and interest rates. There were losses in energy and metals.
Overall, the Partnership had a total return of (1.58)% for the quarter
and (0.29)% for the nine months ended September 30, 2003. The
majority of the Partnership's trading gains for the third quarter 2003
were in stock indexes and the largest loss occurred in interest rate
futures. In September 2003, a new trader, Clarke Capital Management,
was added to the Partnership.
Second Quarter 2003
-------------------
Futures were somewhat more stable in the second quarter as compared
to the first. The war with Iraq ended, and the stock markets began
a steady climb that lasted through the end of the quarter.
In April 2003, the Partnership had a loss of 0.11%. There were gains
in grains and currencies. However, these were mostly offset by losses
in other sectors, including stock indexes.
In May 2003, the Partnership had a gain of 1.47%. There were gains
in currencies and interest rates, especially bonds and stock indexes.
There were losses in agricultural commodities, metals and energy.
In June 2003, the Partnership had a loss of 2.23%. There were losses
in agricultural commodities, bonds, metals, energy and currencies.
There were gains in stock indexes and short-term interest rates.
Overall, the Partnership's rate of return was (0.90)% for the quarter
and 1.32% for the six months ended June 30, 2003. The majority of the
Partnership's trading gains for the second quarter were in foreign
currencies and equities and the largest loss was in agricultural
commodities.
First Quarter 2003
------------------
The futures markets were volatile in the first quarter of 2003. The
looming war with Iraq caused energy prices to skyrocket. Many other
markets were choppy due to this uncertainty. Consumer confidence
dropped dramatically. The traders were able to capitalize on the
volatility in the markets.
In January 2003, the Partnership had a gain of 7.02%. There were very
large gains in the energy, foreign currencies, stock indexes, precious
and base metals, and certain agricultural commodities. The losses
were primarily limited to grains and short-term interest rates.
In February 2003, the Partnership had a gain of .45%. There were
large gains in energy, with smaller gains in currencies and interest
rates. These gains were primarily offset by losses in stock indexes
and metals.
In March 2003, the Partnership had a loss of 4.90%. There were some
small gains in stock indexes and short-term interest rates. However,
the losses in other sectors, especially energy, were far greater.
Overall, the Partnership had a total return of 2.24% for the quarter.
The majority of the Partnership's trading gains were in energy and
foreign currencies and the largest loss was in metal futures.
Market and Credit Risk
----------------------
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 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 derivatives, 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 trading advisors or
change any of the Partnership's clearing arrangements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable.
Item 4. Controls and Procedures
ProFutures, Inc., as General Partner of ProFutures Long/Short 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 (as
defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or
15d-15(e)) with respect to the Partnership as of the end of the period
covered by this quarterly report. Based on their evaluation, the
President and Chief Financial Officer have concluded that these
disclosure controls and procedures are effective. There were no
changes in the General Partner's internal control over financial
reporting applicable to the Partnership identified in connection with
the evaluation required by paragraph (d) of Exchange Act Rules 13a-15
or 15d-15 that occurred during the last fiscal quarter that have
materially affected, or are reasonably likely to materially affect,
internal control over financial reporting applicable to the
Partnership.
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 filed herewith:
31.01 Certification of Gary D. Halbert, President, pursuant to Rules
13a-14 and 15d-14 of the Securities Exchange Act of 1934.
31.02 Certification of Debi B. Halbert, Chief Financial Officer,
pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange
Act of 1934.
32.01 Certification of Gary D. Halbert, President, pursuant to 18
U.S.C. Section 1350 as enacted by Section 906 of The Sarbanes-
Oxley Act of 2002.
32.02 Certification of Debi B. Halbert, Chief Financial Officer,
pursuant to 18 U.S.C. Section 1350 as enacted by Section 906
of The Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
(Registrant)
November 11, 2004 By /s/ GARY D. HALBERT
- ------------------------ -----------------------------------------
Date Gary D. Halbert, President and Director
ProFutures, Inc.
General Partner
November 11, 2004 By /s/ DEBI B. HALBERT
- ------------------------ -----------------------------------------
Date Debi B. Halbert, Chief Financial Officer,
Treasurer and Director
ProFutures, Inc.
General Partner
EXHIBIT 31.01
CERTIFICATION
-------------
I, Gary D. Halbert, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ProFutures Long/Short
Growth Fund, L.P.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, 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 report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: November 11, 2004
----------------------------------
/s/ GARY D. HALBERT
- -----------------------------------------
Gary D. Halbert, President
ProFutures, Inc., General Partner
EXHIBIT 31.02
CERTIFICATION
-------------
I, Debi B. Halbert, certify that:
1. I have reviewed this quarterly report on Form 10-Q of ProFutures Long/Short
Growth Fund, L.P.;
2. Based on my knowledge, this 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 report;
3. Based on my knowledge, the financial statements, and other financial
information included in this 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 report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, 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 report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: November 11, 2004
----------------------------------
/s/ DEBI B. HALBERT
- -----------------------------------------
Debi B. Halbert, Chief Financial Officer
ProFutures, Inc., General Partner
EXHIBIT 32.01
CERTIFICATION
-------------
I, Gary D. Halbert, the President of ProFutures, Inc., as General Partner of
ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form 10-Q for the
quarter ended September 30, 2004 of ProFutures Long/Short 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, 2004 fairly presents, in all material
respects, the financial condition and results of operations of ProFutures
Long/Short Growth Fund, L.P.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
By: ProFutures, Inc., General Partner
By: /s/ GARY D. HALBERT
----------------------------------
Gary D. Halbert
President
November 11, 2004
EXHIBIT 32.02
CERTIFICATION
-------------
I, Debi B. Halbert, the Chief Financial Officer of ProFutures, Inc., as General
Partner of ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form
10-Q for the quarter ended September 30, 2004 of ProFutures Long/Short 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, 2004 fairly presents, in all
material respects, the financial condition and results of operations of
ProFutures Long/Short Growth Fund, L.P.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
By: ProFutures, Inc., General Partner
By: /s/ DEBI B. HALBERT
----------------------------------
Debi B. Halbert
Chief Financial Officer
November 11, 2004