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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to ____________________
Commission file number
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
(Exact name of registrant as specified in its charter)
ILLINOIS 36-4368292
(State of organization) (I.R.S. Employer Identification No.)
BEELAND MANAGEMENT COMPANY, L.L.C.
GENERAL PARTNER
1000 HART ROAD, SUITE 210
BARRINGTON, ILLINOIS 60010 (847) 304-0450
(Address of principal executive offices) (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to section 12(g) of the Act:
LIMITED PARTNERSHIP UNITS
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.
[X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss. 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 to this Form 10-K. [ ]
The aggregate market value of Limited Partnership Units held by non-affiliates
of the registrant, as of December 31, 2001, was approximately $4 million based
on the last sale price reported for such date. For purposes of this disclosure,
units held by officers or principals of the General Partner have been excluded
because such persons may be deemed to be affiliates. This determination is not
necessarily conclusive.
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PART I
ITEM 1. BUSINESS.
Rogers International Raw Materials Fund, L.P. (the "Fund") is an
Illinois Limited Partnership established in May 2000 under the laws of
the State of Illinois relating to limited partnerships. The Fund
invests and trades in a portfolio of commodity futures and forward
contracts. Futures contracts are contracts made on a commodity exchange
that provide generally for the future delivery of various commodities
at a specified date, time and place. When traded on an exchange,
forward contracts are the equivalent of a futures contract. When not
traded on an exchange, forward contracts are contracts for the purchase
or sale of a commodity (such as currencies) for delivery at a future
date, which contain terms and conditions specifically negotiated by the
parties. Although Beeland Management, L.L.C. ("Beeland Management"),
the general partner of the Fund, does not initially intend to do so,
the Fund may also purchase forward contracts in the off exchange or
"OTC" marketplace under certain circumstances if, in the sole
discretion of Beeland Management, there is sufficient liquidity and
depth in the relevant off exchange markets. The Fund invests and trades
exclusively on the "long side" of the market. This means that the Fund
only buys positions in commodities and does not engage in any
short-selling. The Fund closes out all positions by making an
offsetting sale and does not take delivery of the actual commodities.
Funds for its business are obtained only by the sale of units and from
the retention of any profits generated from the Fund's trading.
The Fund's trading is designed to replicate the positions which
comprise the Rogers International Commodity Index. The Index consists
of a compendium, commonly known as a basket, of raw materials employed
within the world economy and traded in seasoned markets as futures and
forward contracts. There are no "short" positions within the Index.
The Index was developed by James Beeland Rogers, Jr., the majority
owner-member of Beeland Management, to be a balanced, representative,
international raw materials index. Beeland Management believes that the
Index includes most of the publicly traded raw materials used in
international commerce for which futures contracts or forward contracts
are regularly traded in recognized markets. It is designed to address
the needs of expanding world trade. As the owner of the Index, Beeland
Management controls the components of the Index which the fund is
designed to track. The weightings of the Index were selected by Beeland
Management based on its perception of the relative importance of those
raw materials.
The Fund's principal objective is to provide an alternative investment
vehicle for investors with diversified investment portfolios. The
performance of the Fund is not correlated with the traditional
securities markets. In other words, the performance of the Fund is
largely independent from how the traditional equity and debt markets
perform. Accordingly, the Fund's returns will not necessarily increase
when that of stocks or bonds increase and will not necessarily decrease
when that of stocks or bonds decrease. However, the fact that the
Fund's performance is non-correlated with traditional securities
markets does not mean that the Fund's performance has a negative
correlation with such markets. In other words, the Fund will not
necessarily perform better when traditional markets decline, or perform
worse when the traditional markets are rising. Rather, the Fund's
results may parallel either stocks or bonds, or both, during
significant periods of time.
The Fund commenced trading during November 2001. The Partnership will
terminate December 31, 2020 or earlier upon certain circumstances as
defined in the Limited Partnership Agreement.
ITEM 2. PROPERTIES.
The Partnership owns no properties.
2
ITEM 3. LEGAL PROCEEDINGS.
See Notes to Financial Statements for information regarding legal
proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of partners during the fourth
quarter of fiscal 2001.
PART II
ITEM 5. MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP UNITS AND RELATED PARTNER
MATTERS.
There is no established market for the partnership units. The units are
offered on a best efforts basis by both representatives of Beeland
Management and certain broker-dealers. An offering on a best efforts
basis is one in which the securities dealers participating in the
offering are under no obligation to purchase any of the securities
being offered and, therefore, no specified number of securities are
guaranteed to be sold and no specified amount of money is guaranteed to
be raised. Derivatives Portfolio Management, L.L.C., Two Worlds Fair
Drive, P.O. Box 6741, Somerset, New Jersey, serves as the Fund's
subscription agent, as well as the Fund's redemption agent.
The Fund's initial public offering was held during Fiscal Year 2001.
The units were initially offered for sale at a fixed price of $100 per
unit. An initial closing on the subscription proceeds was held after a
minimum of 50,000 units was received. The purchase price for units is
now the net asset value per unit as of the close of trading on the
trading day preceding the effective date of the purchase. The net asset
value per unit is determined by dividing the Fund's net assets (total
assets, including the value of its portfolio of futures positions,
minus total liabilities of the Fund) by the aggregate number of units
outstanding as of the time of calculation. This net asset value may be
more than or less than $100 per unit. Investors may obtain information
concerning the net asset value per unit from Derivatives Portfolio
Management. Its telephone number is (732) 563-0030. In addition, each
limited partner will be given a password for access to a web site for
the Fund that will report net asset value on a weekly basis.
There were approximately 100 Limited Partners at December 31, 2001. The
following table shows for the periods indicated the high and low sales
prices for our units.
High Low
---- ---
September 2001 $100.00 $100.00
October 2001 $100.00 $100.00
November 2001 $100.00 $ 96.49
December 2001 $ 96.49 $ 92.29
3
ITEM 6. SELECTED FINANCIAL DATA.
2001
-------------
Net revenues (losses) $ (3,664)
Total expenses 391,956
-------------
Net loss $ (395,620)
=============
Net loss per unit $ (7.45)
Total units outstanding 53,124
Total assets $5,090,518
Total obligations $ 187,815
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
RESULTS OF OPERATIONS
NET REVENUES (LOSSES)
2001
-------------
Realized net trading gains (losses) $ (42,935)
Unrealized trading gains 12,180
Interest income 27,091
-------------
Total net revenues (losses) (3,664)
=============
The realized net trading losses are the result of one month of trading
in December 2001. The unrealized trading gains include unrealized
losses on securities of $17,075. The interest income includes accrued
interest income on securities of $24,000.
OPERATING EXPENSES
2001
-------------
Brokerage commissions $ 7,518
Management fees 16,417
Administrative fees 24,889
Organizational cost amortization 343,132
-------------
Total operating expenses $ 391,956
=============
4
The Fund pays substantial fees and expenses which include:
Management fees of 0.1875% per month (2.25% per year) of the average
monthly sum of all capital accounts contributed by limited partners,
computed as of the close of each month. The management fee is payable
monthly to Beeland Management, as the Fund's general partner.
Subscription fee of up to 5% of the gross offering proceeds payable to
Beeland Management. A portion of the subscription fee may be reallowed
by Beeland Management to soliciting dealers as selling commissions for
each unit they sell. Subject to certain conditions and exceptions,
investors purchasing specified minimum numbers of units will be
entitled to a reduction of the 5% subscription fee. These fees are
reflected as a subtraction from the Limited Partner contributions.
Advisory fee to Hart Capital Management, an affiliate of Beeland
Management. The fee is in the amount of 50 basis points per year of the
average month end market value of the net assets of the Fund invested
and being managed by Hart Capital Management.
Brokerage commissions and transactions fees estimated at 1% of net
assets per year, payable to futures commission merchants utilized by
the Fund. Futures commission merchants execute trades of futures
contracts for the Fund. The above fees include delivery, insurance,
storage and other charges incidental to trading and exchange fees.
Affiliates of members of Beeland Management may be engaged to provide
trading execution services for the Fund.
Clearinghouse and other similar fees, and National Futures Association
(NFA) fees estimated at between 10 to 15 basis points annually. One
basis point is 1/100 of one percent.
General Partner Allocation if the amount of management fees paid to the
Fund's general partner during a year does not equal or exceed one
percent (1%) of the amount of the Fund's net profits for that year. The
general partner will receive an allocation of profits in an amount
equal to the difference between one percent of the net profits and the
amount of the management fees paid. For this purpose, net profits
equals the Fund's total profits minus losses and any expenses charged
to the Fund, if any, without taking into account the management fees
allocated and paid to the Fund's general partner for that year.
Organizational Costs for the Fund equaled $364,698. These costs are
being amortized over the three-month period beginning November 2001.
These costs include legal fees, accounting fees and printing costs
LIQUIDITY AND CAPITAL RESOURCES
2001
-------------
Cash and cash equivalents $ 872,197
Percentage of total assets 16.64%
Cash used in operating activities $(4,391,126)
Cash provided by financing activities $ 5,263,323
-------------
Net increase in cash and cash equivalents $ 872,197
=============
Cash flows used in operating activities were used primarily to purchase
Federal Bonds with a face value of $4,000,000. The remaining cash was
used for operating expenses, net of any payables and receivables.
Cash flows provided by financing activities were from the sale of
Partnership units, net of any subscription fees paid and any
subscriptions receivable.
5
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
RISKS RELATING TO COMMODITY TRADING AND MARKETS
YOU MAY LOSE ALL OF YOUR INVESTMENT IF FUTURES PRICES, WHICH ARE HIGHLY
UNPREDICTABLE AND VOLATILE, DO NOT INCREASE. Participation in a
volatile market could produce substantial losses for the Fund. This
could result in the possible loss of your entire investment in the
Fund. Price movements of futures contracts are highly volatile and are
influenced by many factors. Some of those factors are changing supply
and demand relationships; weather and other environmental conditions;
acts of God; agricultural, fiscal, monetary and exchange control
programs and policies of governments; national and international
political and economic events and policies; changes in rates of
inflation; and the general emotions and psychology of the marketplace,
which at times can be irrational and totally unrelated to other more
tangible factors. Beeland Management can control none of these factors.
Even if current and correct information as to substantially all factors
is known or thought to be known, prices still will not always react as
predicted. The profitability of the Fund will depend on whether the
futures and forward contracts which Beeland Management purchases for
the Fund's portfolio to replicate the Index increase in price. If these
prices increase, the Fund will be profitable if such trading profits
exceed the fees and expenses of the Fund. If these prices do not
increase, the Fund will not be profitable and will incur losses. The
volatility of the futures markets is one reason that an investment in
units should be viewed as a long-term investment.
THE ROGERS INTERNATIONAL COMMODITY INDEX IS LIKELY TO BE VOLATILE AND
COULD SUFFER FROM PERIODS OF PROLONGED DECLINE IN VALUE. The Rogers
International Commodity Index, upon which the Fund's trading will be
based, is likely to be volatile and could suffer from periods of
prolonged decline in value. The Index is comprised of 35 different
commodities. At any time, the price of any component commodity of the
Index may be affected by various factors, such as the weather or world
political or economic events. The Fund's success depends on the
increasing price of the raw materials represented by the Index.
Investors will receive a positive return on investment only if the
price of raw materials increases at a rate that exceeds the cost of
inflation and the management, subscription and other fees involved.
Given the highly unpredictable and volatile nature of futures prices,
the price movements of the raw materials comprising Index should be
viewed over a longer period of time. Beeland Management believes that
investors should view their investments as at least a two-year
commitment.
BECAUSE THE ROGERS INTERNATIONAL COMMODITY INDEX IS HIGHLY CONCENTRATED
IN ENERGY ORIENTED RAW MATERIALS, PROLONGED DECLINE IN VALUE IN THOSE
COMMODITIES WOULD HAVE A NEGATIVE IMPACT ON THE FUND'S PERFORMANCE.
Approximately 44% of the component commodities on the Rogers
International Commodity Index are energy oriented, including 35% in
crude oil. Accordingly, a decline in value in such raw materials would
adversely affect the performance of the Fund. Technological advances or
the discovery of new oil reserves could lead to increases in worldwide
production of oil and corresponding decreases in the price of crude
oil. In addition, further development and commercial exploitation of
alternative energy sources, including solar, wind or geothermal energy,
could lessen the demand for crude oil products and result in lower
prices. Absent amendment of the Index to lessen or eliminate the
concentration of existing energy contracts in the Index or to broaden
the Index to account for such developments, the price of the Index and
the value of the Fund could decline.
INVESTING IN UNITS MIGHT NOT PROVIDE THE DESIRED DIVERSIFICATION OF
YOUR OVERALL PORTFOLIO. A principal objective of the Fund is to add
diversification to a traditional portfolio of securities. Price
performance on the basket of raw material contracts in the Fund and the
Index are non-correlated to the performance of traditional securities
markets. Ordinarily and for most investors, an investment in the Fund
should be made only if an investor's overall portfolio is diversified
into other markets and an investment in the Fund represents only a
small percentage of the investor's overall investment portfolio. The
performance of the Fund is not correlated with the traditional
securities markets. In other words, the performance of the Fund is
largely independent from how the traditional equity and debt markets
perform. Accordingly, the Fund's returns will not necessarily increase
when that of stocks or bonds increase and will not necessarily decrease
when that of stocks or bonds decrease. However, the fact that the
Fund's performance is non-correlated with traditional securities
markets does not mean that the Fund's performance has a negative
correlation with such markets. In other words, the Fund will not
necessarily perform better when traditional markets decline, or perform
worse when the traditional markets are rising. Rather, the Fund's
results may parallel either stocks or bonds, or both, during
significant periods of time. An investment in the Fund could increase
rather than reduce overall portfolio losses during periods when the
Fund, as well as stocks and bonds, decline in value.
6
ILLIQUID MARKETS COULD MAKE IT IMPOSSIBLE TO REALIZE PROFITS OR LIMIT
LOSSES. All futures markets will sometimes be illiquid. In illiquid
markets, the Fund may not be able to execute a buy or sell order at the
desired price, or to close out an open position in a timely manner.
This would make it impossible for the Fund to realize profits or limit
losses. Market illiquidity can arise from the various regulations that
are applicable to futures trading, such as the "daily price fluctuation
limits" or "daily limits" regulations. The daily limits are the maximum
amount the price of a futures contract may vary either up or down from
the previous day's settlement price. No trades may be made at a price
beyond the daily limits. Market illiquidity also occurs in a "thin"
market where the volume of buy and sell orders in a market is
relatively small. Market illiquidity can also occur because many
trading approaches use similar analyses. This can lead to the bunching
of buy and sell orders, which makes it more difficult for a position to
be acquired or liquidated. It is also possible that an exchange or the
Commodity Futures Trading Commission (CFTC) may suspend trading in a
particular contract, order immediate liquidation and settlement of a
particular contract, or order that trading in a particular contract be
conducted for liquidation only. The Fund may even be required in
extreme circumstances to make or take delivery of the interest
underlying a particular position if the position cannot be offset or
liquidated prior to its expiration date.
THE FUND COULD HAVE ITS TRADING DISRUPTED DUE TO THE FAILURE OF
EXCHANGES OR CLEARINGHOUSES OR COULD LOSE ASSETS DEPOSITED WITH FUTURES
COMMISSION MERCHANTS OR BROKERS. Futures contracts are traded on a
commodity exchange. The Fund could have its trading disrupted if the
exchanges on which the Fund trades or any of their clearinghouses were
to discontinue operations or to experience disruptions in trading, due
to computer problems, unsettled markets or other factors. Assets of the
Fund are deposited with futures commission merchants who execute
futures contracts, as well as with broker-dealers who execute
government contracts and brokers or dealers who execute forward
contracts. The Fund could lose these assets if, for example, any of the
above parties were to become insolvent or bankrupt. In such event, the
Fund would likely be able to recover only part of the assets held by
its futures commission merchant or broker-dealer. None of these factors
or occurrences can be controlled by the Fund or its general partner.
THE FUND WILL TRADE ON FOREIGN EXCHANGES THAT ARE LESS REGULATED THAN
U.S. MARKETS AND ARE SUBJECT TO RISKS THAT DO NOT ALWAYS APPLY TO U.S.
MARKETS. The Fund will trade on exchanges located outside the United
States. The Fund currently anticipates that approximately 7% of its
assets will be traded on foreign exchanges. The regulations of the CFTC
do not apply to trading on foreign exchanges, and trading on foreign
exchanges may involve different and greater risks than trading on
United States exchanges. Certain foreign markets may be more
susceptible to disruption than United States exchanges due to the lack
of a government-regulated clearinghouse system. Trading on foreign
exchanges also involves certain other risks that are not applicable to
trading on United States exchanges. Those risks include: varying
exchange rates; exchange controls; expropriation; burdensome or
confiscatory taxation; and moratoriums, and political or diplomatic
events. It will also likely be more costly and difficult for the Fund
to enforce the laws or regulations of a foreign country or exchange,
and it is possible that the foreign country or exchange may not have
laws or regulations that adequately protect the rights and interests of
the Fund.
THE TRADING METHODOLOGY UTILIZED BY THE FUND MAY NOT BE SUCCESSFUL
UNDER ALL OR ANY MARKET CONDITIONS. Beeland Management utilizes a
series of rules which, in turn, generally generate trading instructions
designed to produce a portfolio of trades in commodities which should
track the Index. Pursuant to these rules, futures contracts are rolled
from near delivery months to later months. However, because trading in
such later months may be more volatile, due to less liquidity, the
rules and Beeland Management's program choose delivery months where
there is greater depth and liquidity. In addition, at any moment in
time, some commodities in the Fund will be over-represented while
others will be under-represented when compared to the index.
Accordingly, as the total value of the Fund increases and decreases
(typically because of new subscriptions or withdrawals), trades will be
effected in order to better correlate the composition of the Fund with
the composition of the Index. Beeland Management enters trades
consistent with those instructions. No assurance can be given that the
rules and trading methodology utilized by Beeland Management will prove
successful under all or any market conditions.
EXCHANGE TRADING LIMITS MAY REQUIRE THE FUND TO LIQUIDATE POSITIONS AT
UNDESIRABLE TIMES, RESULTING IN REDUCED PROFITABILITY. Most exchanges
limit the amount of fluctuation in commodity futures contract prices on
a single trading day. Trading instructions may have to be modified and
positions held by the Fund may have to be liquidated, in order to avoid
exceeding these trading limits. Such modification or liquidation could
adversely affect the operations and profitability of the Fund.
7
RISKS RELATING TO TAX AND OTHER REGULATORY RISKS
REGULATIONS GOVERNING THE FUTURES MARKET MAY CHANGE AND COULD ADVERSELY
AFFECT THE FUND'S OPERATIONS. Federal agencies including the CFTC, the
SEC and the Board of Governors of the Federal Reserve System regulate
certain activities of the Fund and the Fund's general partner. The CFTC
is the governmental agency having responsibility for regulation of U.S.
commodity exchanges and commodity futures trading. Its function is to
implement the objectives of preventing price manipulation and excessive
speculation and promoting orderly and efficient commodity futures
markets. The regulation of the United States and foreign futures
markets has undergone substantial change over the years, and further
changes should be expected. It is impossible to predict, however, what
changes may occur, or the effect of any such changes on the Fund. The
effects could be substantial. The Fund is not aware of any pending or
threatened regulatory developments that might materially affect the
Fund. However, regulatory initiatives could develop suddenly and
without notice.
SINCE THE FUND IS NOT A REGULATED INVESTMENT COMPANY YOU WILL NOT HAVE
THE PROTECTIONS PROVIDED BY STATUTES REGULATING THOSE COMPANIES. The
Fund is not a registered securities investment company or "mutual fund"
subject to the Investment Company Act of 1940. Therefore, you do not
have the protections provided by that statute.
A CHANGE IN TAX LAWS COULD ADVERSELY AFFECT THE TAX TREATMENT OF AN
INVESTMENT IN THE FUND. It is possible that the current federal income
tax treatment accorded an investment in the units will be modified by
subsequent legislative, administrative or judicial action, possibly
with retroactive effect. Any such changes could significantly alter the
tax consequences and decrease the after-tax rate of return on an
investment in the units.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS
Page
----
Independent Auditor's Report 9
Statement of Financial Condition at December 31, 2001 and 2000 10
Statement of Operations for the years ended December 31, 2001 and 2000 11
Statement of Partner's Equity for the years ended December 31, 2001 and 2000 12
Notes to Financial Statements 13
Affirmation of Management 14
8
INDEPENDENT AUDITOR'S REPORT
To the Partners of Rogers International Raw Materials Fund, L.P.:
(A Limited Partnership)
We have audited the accompanying statement of financial condition of
Rogers International Raw Materials Fund, L.P. as of December 31, 2001
and 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 generally accepted auditing
standards. These standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents
fairly, in all material respects, the financial position of Rogers
International Raw Materials Fund, L.P. as of December 31, 2001 and 2000
in conformity with generally accepted accounting principles.
Vorisek & Company, LLC /s/ Vorisek & Company LLC
Certified Public Accountants
McHenry, IL
February 28, 2002
9
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 2001 AND 2000
12/31/2001 12/31/2000
---------- ----------
ASSETS
Cash at Bank $ 144,853 $ 5,000
Cash at Broker 727,344 --
Investment in securities 4,100,000 --
Unrealized net trading gain 29,255 --
Interest Receivable - Securities 32,500 --
Subscriptions Receivable 35,000 --
Organizational Costs (net of accumulated amortization) 21,566 --
----------- ---------
Total Assets $ 5,090,518 $ 5,000
=========== =========
LIABILITIES
Commissions payable $ 6,141 --
Accrued management fees 19,187 --
Administrative fees payable 162,487 --
----------- ---------
Total Liabilities 187,815 --
PARTNERSHIP EQUITY
Limited Partners 4,902,703 --
General Partner -- $ 5,000
----------- ---------
Total Equity 4,902,703 5,000
Total Liabilities and Partnership Equity $ 5,090,518 $ 5,000
=========== =========
See accompanying notes to financial statements.
10
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
REVENUE 2001 2000
---- ----
Realized net trading gain (loss) $ (42,290) --
Change in unrealized net trading gain 29,255 --
Change in unrealized gain (loss)
on securities (17,075) --
Foreign exchange gain (loss) (645) --
Interest income securities 24,000 --
Interest income 3,091 --
------------ ------------
Total Revenue (3,664) --
------------ ------------
EXPENSE
Commissions 7,518 --
Management fees 16,417 --
Administrative fees 24,889 --
Amortization expense 343,132 --
------------ ------------
Total Expense 391,956 --
------------ ------------
Net Loss $(395,620) --
============ ============
See accompanying notes to financial statements.
11
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
STATEMENT OF CHANGES IN PARTNER'S EQUITY
For the years ended December 31, 2001 and 2000
Limited General
Partners Partner Total
-------- ------- -----
Beginning Equity -- -- --
Additions -- $ 5,000 $ 5,000
Net Income -- -- --
Withdrawals -- -- --
------------------------------------------------------------
12/31/2000 Equity -- $ 5,000 $ 5,000
Additions $ 5,298,323 -- 5,298,323
Net loss (395,620) -- (395,620)
Withdrawals -- (5,000) (5,000)
------------------------------------------------------------
12/31/2001 Equity $ 4,902,703 -- $ 4,902,703
============================================================
12/31/2000 Limited General
Per unit data Partners Partner Total
------------- -------- ------- -----
Net asset value
-- $ 100
=========================================
Units outstanding -- 50 50
============================================================
12/31/2001
Per unit data
-------------
Net asset value $ 92.29 --
=========================================
Units outstanding 53,124 -- 53,124
============================================================
See accompanying notes to financial statements.
12
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
Note 1. Significant Accounting Policies:
NATURE OF BUSINESS AND ORGANIZATION: Rogers International Raw
Materials Fund, L.P. (the "Partnership") is an Illinois Limited
Partnership established in May 2000 under the laws of the State of
Illinois relating to limited partnerships. The Partnership trades a
portfolio of commodity futures contracts and forward contracts,
exclusively on the long side of the market; that is the Partnership
will not sell short any commodity futures contracts or forward
contracts. The Partnership commenced trading during November 2001. The
Partnership will terminate December 31, 2020 or earlier upon certain
circumstances as defined in the Limited Partnership Agreement.
NET ASSETS: The valuation of net assets includes unliquidated
commodity futures and forward contracts owned by the Partnership, if
any, at the end of the period. The unrealized gain or loss on these
contracts if any, has been calculated based on closing prices on the
last business day of the year. Foreign currency is translated into US
dollars at the exchange rate prevailing on the last business day of the
year. Net asset value is determined by subtracting liabilities from
assets, which also equals Partnership equity.
PROFIT AND LOSS ALLOCATION: Limited Partners share in the
profits and losses in the Partnership in the proportion in which each
partner's capital account bears to all partner's capital accounts.
INCOME TAXES: No provision for income taxes has been made
since the Partnership is not subject to taxes on income. Each partner
is individually liable for the tax on its share of income or loss. The
Partnership prepares a calendar year information tax return. However,
the Fund is subject to a 1.5% Illinois State replacement tax on its net
earnings.
REVENUE RECOGNITION: Commodity futures contracts are recorded
on the trade date, and open positions are reflected in the accompanying
statement of financial condition as the difference between the original
contract value and the market value on the last business day of the
reporting period. The market value of the commodity futures and options
contracts is based upon the most recent available settlement price on
the appropriate commodity exchanges. Securities are reported at cost
plus accrued interest, net of unrealized gains or (losses), which
approximates market. Changes in unrealized gains or (losses) represent
the total increases (decreases) in unrealized gains or (increases)
decreases in unrealized losses on open positions during the period.
Interest Income Recognition: The Partnership records interest income in
the period it is earned.
STATEMENT OF CASH FLOWS: The Partnership has elected not to
provide a statement of cash flows as permitted by Statement of
Accounting Standards 102 "Statement of Cash Flows".
Note 2. Agreements and Related Party Transactions:
The Agreement of Limited Partnership vests all responsibility
and powers for the management of the business and affairs of the
Partnership with the General Partner, Beeland Management Company, LLC.
The General Partner is the commodity pool operator for the Partnership
and is responsible for the trading decisions of the Partnership.
The General Partner advanced $162,484 in regulatory filing
fees, legal fees and expenses on behalf of the Partnership. These fees
were reimbursed to the General Partner in November 2001. The General
Partner rebated $150,000 of these expenses to the Partnership in
February 2002.
The Partnership pays a Subscription fee to the General Partner
of up to 5% of the gross offering proceeds, a portion of which will be
reallowed to soliciting dealers as selling commissions.
The Partnership pays a monthly management fee to the General
Partner of 0.1875% of the average monthly sum of all Capital Accounts
contributed by Limited Partners at the close of each month.
If the amount of management fees paid to the Partnership's
general partner during a year does not equal or exceed one percent (1%)
of the amount of the Partnership's net profits for that year, the
general partner will receive an allocation of profits in an amount
equal to the difference between one percent of the net profits and the
amount of the management fees paid.
Hart Capital Management, Inc. is the investment manager for
the Partnership. Hart Capital Management is a division of Arbor
Research & Trading, Inc., which is a member of the General Partner.
Three members of the General Partner are also principals of Arbor
Research & Trading. Hart Capital Management provides certain investment
management, advisory and research services with respect to the
investing and trading activities of the Partnership. Hart Capital
Management will be paid an annual advisory fee of 0.5% of the average
month end market value of the Portfolio under management.
13
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
Note 3. Partnership Capital and Redemptions:
Limited Partners may withdraw capital, with no less than 60
days prior written notice to the General Partner, after a three-month
initial holding period.
Until the initial closing, the purchase price of a unit was
$100. Thereafter, the purchase price of a unit is the net asset value
per unit as of the end of each calendar month. Net asset value per unit
is calculated as the net asset value at month end divided by the number
of outstanding units at month end.
The General Partner and its principals are required to make a
minimum investment of $25,000 in the Partnership. This requirement was
exceeded at December 31, 2001.
Note 4. Financial Instruments with Off-Balance Sheet Credit and Market
Risk:
Included in the definition of financial instruments are
forward contracts and futures. The Partnership invests in various
commodity-related futures and forward contracts. These contracts are
marked to market daily, with variations in the value settled on a daily
basis with the exchange upon which they are traded. For these contracts
the unrealized gain or loss rather than the notional amounts,
represents the approximate future cash requirements.
At December 31, 2001 the Partnership owned open positions that
would have earned approximately $29,255 if settled. The average fair
value of open positions at December 31, 2001 was $27,098.
Theoretically, the Partnership is exposed to a market risk
(loss) equal to the notional value of financial instruments purchased.
Generally financial instruments can be closed out at the discretion of
the General Partner. However, if the market is not liquid, it could
prevent the timely closeout of any unfavorable positions or require the
Partnership to hold these and possibly all positions until maturity,
regardless of the changes in their value or the General Partner's
investment strategies.
The Partnership's trading is designed to replicate the
positions and trading which comprise the Rogers International Commodity
Index (the "Index"). This Index consists of a basket of commodities
employed within the world economy and traded in seasoned markets, as
futures and forward contracts. The broad based representation of
commodities contracts is intended to provide two important
characteristics: The large number of contracts and underlying raw
materials represents "diversification" and the global coverage of these
contracts reflects the current state of international trade and
commerce. In order to minimize market and credit risks, the General
Partner monitors the positions held by the Partnership on a daily basis
and no trading discretion is utilized other than the replication of the
Index. Contracts are purchased or liquidated according to the
replication of the index.
Futures contracts have little credit risk because futures
exchanges are the counter parties.
Note 5. Derivative Financial Instruments and Fair Value of Financial
Instruments:
A derivative financial instrument is a financial agreement
whose value is linked to, or derived from, the performance of an
underlying asset. The underlying asset can be currencies, commodities,
interest rates, stocks, or any combination. Changes in the underlying
asset indirectly affect the value of the derivative. All trading
instruments are subject to market risk, the risk that future changes in
market conditions may make an instrument less valuable or more onerous.
As the instruments are recognized at fair market value, those changes
directly affect reported income.
Futures and forward contracts used for trading purposes are
recorded in the statement of financial condition at fair value at the
reporting date. Per Financial Accounting Standards Board Interpretation
No. 39, the fair value of open contracts in a loss position is offset
against the fair value of open contracts in a gain position. The
Partnership applies this industry accepted accounting practice in the
financial statements. Realized and unrealized changes in fair values
are recognized in the period in which the changes occur.
Notional amounts are equivalent to the aggregate face value of
the derivative financial instruments. Notional amounts do not represent
the amounts exchanged by the parties to derivatives and do not measure
the Partnership's exposure to credit or market risks. The amounts
exchanged are based on the notional amounts and other terms of the
derivatives. At December 31, 2001 the Partnership owned open positions
with an approximate notional value of $6,155,000.
14
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
The Partnership invests in financial instruments, which
includes futures and forward contracts. All contracts are of the same
class of derivative instrument, commodity-related derivatives. Futures
contracts are commitments to either purchase or sell designated
financial instruments at a future date for a specified price and may be
settled in cash or through delivery.
The Partnership has funds at the Clearing Broker in accounts,
which are used to meet minimum margin requirements for all of the
Partnership's open positions. These requirements are adjusted, as
needed, due to daily fluctuations in the values of the underlying
assets.
Non-Regulated futures contracts have foreign exchange risk
since the contracts are traded in currency denominations other than US
dollars. Foreign currency trading gains or losses are reported under
realized and unrealized trading gains in the statement of operations.
Foreign currency gains or losses are the result of the conversion of
the foreign currency denomination to US dollars.
Foreign currency losses for the year ended December 31, 2001,
were $645.
The Partnership had realized losses from trading for the year
ended December 31, 2001 of $42,290 as reported in the statement of
operations. These realized losses included losses from non-regulated
contracts of $6,121 for the same period.
The Partnership had income from the change in unrealized gains
for the year ended December 31, 2001 of approximately $29,255, as
reported in the statement of operations. This included unrealized gains
from non-regulated contracts of $44,502.
UNREALIZED HOLDINGS AT 12/31/01
Regulated Futures Non-Regulated Futures
--------------------------------- -----------------------------------
Futures
Contract Values Fair Value Notional Value Fair Value Notional Value
--------------- ---------- -------------- ---------- --------------
Purchase Contracts
------------------
Assets $ 88,898 $ 1,136,000 $ 56,164 $ 780,000
Liabilities (104,145) 3,125,000 (26,339) 561,000
Sell Contracts
--------------
Assets -- -- 20,070 392,000
Liabilities -- -- (5,393) 161,000
------------ -------------- ------------ ---------------
Total $ (15,247) $ 4,261,000 $ 44,502 $ 1,894,000
============ ============== ============ ===============
Contract Maturity Dates Fair Value Notional Value Fair Value Notional Value
----------------------- ---------- -------------- ---------- --------------
February 2002 $ (54,092) $ 2,511,000 $ 68,398 $ 1,768,000
March 2002 31,645 1,660,000 (23,896) 126,000
April 2002 7,200 90,000 -- --
------------ -------------- ------------ ---------------
Total $ (15,247) $ 4,261,000 $ 44,502 $ 1,894,000
============ ============== ============ ===============
15
ROGERS INTERNATIONAL RAW MATERIALS FUND, L.P.
AFFIRMATION OF THE GENERAL PARTNER
To the best of my knowledge and belief, the information contained
herein is accurate and complete.
/s/ Clyde Harrison
------------------------------
Clyde Harrison, Managing Member
Beeland Management Company, LLC
General Partner
Rogers International Raw Materials Fund, LP
16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The General Partner and commodity pool operator of the Fund is Beeland
Management Company, L.L.C. The executive officers of Beeland Management
are as follows:
NAME AGE POSITION
---- --- --------
James Beeland Rogers, Jr. 58 Majority Owner
Clyde C. Harrison 57 Managing Member
Brian Cornell 43 Managing Member
Richard L. Chambers 58 Managing Member
James Beeland Rogers, Jr. has been the majority owner and a member of
Beeland Management since inception in 1998. Mr. Rogers, a co-founder of
the Quantum Fund in the 1970s, is the author of Investment Biker; On
the Road with Jim Rogers (Random House, 1994). He initially developed
and compiled the Index. Although Mr. Rogers' career spans over 30
years, during the last five years he has been semi-retired and
traveling extensively around the world. However, during that period, he
has been a regular commentator and columnist in various media dealing
with economy and finance matters and is an occasional Visiting
Professor at Columbia University. Mr. Rogers is an investor who has
been chronicled in John Train's The New Money Masters and Jack
Schwager's Market Wizards, as well as in Barons, Forbes, Fortune, The
Financial Times and The Wall Street Journal.
Clyde C. Harrison has been a Managing Member of Beeland Management
since its inception in 1998. Mr. Harrison has agreed to provide
administrative services to the Fund under a contract that contains
standard noncompete provisions. Since mid-1997, Mr. Harrison has
devoted most of his business time to the administration of the Index
and the Rogers Raw Materials Fund. For the immediately prior two years,
Mr. Harrison had been an official, first with Nutmeg Securities, Inc.,
where he served as a pension fund consultant and in the institutional
stock execution business and later, in a similar capacity with a
division of a New York-based broker-dealer. Since March 1998, Mr.
Harrison has been a registered representative of Oakbrook Investment
Brokers, Inc., a registered broker-dealer. Mr. Harrison has also been a
Member of the Managed Futures Committee of the Chicago Mercantile
Exchange. In the course of his over 25 year career, Mr. Harrison has
served as a Special Consultant to the Chairman of the Chicago Board
Options Exchange, Inc., particularly on the institutional investment
community, and as general partner of a number of private investment and
trading funds.
Brian Cornell has been a Managing Member of Beeland Management since
1998. His duties primarily involve the rules and procedures whereby the
Fund will effect trades corresponding to the Index, including but not
limited to (1) periodic adjustments to the Index and the Fund, (2)
contract market selection for contracts comprising the Index, (3)
procedures to correlate trading in the Fund with the composition of the
Index and regular, periodic valuation of the Fund and the Index.
Through a wholly owned company, Cornell Investment Advisory, L.L.C., he
also has provided the Rogers Raw Materials Fund and will provide the
Fund with a portfolio monitoring facility. The fees due to Cornell
Investment pursuant to its contract with Beeland Management are payable
by Beeland Management and not by the Fund. He has traded, managed and
provided brokerage services for futures portfolios since 1982, most
recently as a senior official at two well-known futures commission
merchants and commodity trading advisors. In addition, he has authored
numerous articles on risk management and has been featured in The New
York Times, The Wall Street Journal and in Institutional Investor.
17
Richard L. Chambers has been a Managing Member of Beeland Management
since 1998. Mr. Chambers serves as Treasurer of Beeland Management. He
is responsible for investment of funds not required for margin and is
also responsible for administrative activity. Mr. Chambers is also the
managing principal of Hart Capital Management, a registered investment
adviser and a division of Arbor Research & Trading, Inc. Mr. Chambers
has over 30 years experience in the fixed income securities business as
both a dealer and a portfolio manager.
ITEM 11. EXECUTIVE COMPENSATION.
See the notes to the financial statements incorporated above for a
description of management fees paid to the General Partner.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Richard L. Chambers, managing member of the General Partner, owns 9,189
units. These units have NAV of $848,063.61 at December 31, 2001.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated by reference from
the information contained in Item 7, Operating Expenses.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents filed as a part of the report:
(1) Financial Statements: See Index to Financial Statements under
Item 8 of this report
(2) Financial statement schedules: No additional schedules are
required.
(3) Exhibits: No exhibits are required
(b) Reports on Forms 8-K
No reports on Form 8-K were filed during the fourth quarter of
fiscal 2001.
18
SIGNATURES
Pursuant to the requirements of Section 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.
(Registrant) ROGERS RAW MATERIALS FUND, L.P.
---------------------------------------------------------------
By (Signature and Title)* /s/ Richard Chambers
--------------------------------------------------
Managing Member of Beeland Management Company, LLC
--------------------------------------------------
Date
-----------------------------------------------------------------------
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.
By (Signature and Title)* /s/ Clyde Harrison
--------------------------------------------------
Managing Member of Beeland Management Company, LLC
--------------------------------------------------
Date
-----------------------------------------------------------------------
19