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EX-31 - DOC 31 - EVEREST FUND L Pex-31cert302.txt
EX-32 - DOC 32 - EVEREST FUND L Pex-32cert906.txt

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C.  20549

                              FORM 10-Q
        Quarterly report pursuant to Section 12(b) or (g) of the
                   Securities Exchange Act of 1934

              For the quarterly period ended September 30, 2011

                    Commission File Number 0-17555
                        THE EVEREST FUND, L.P.
          (Exact name of registrant as specified in its charter)
        Iowa                                                 42-1318186
        State or other jurisdiction of               (I.R.S. Employer
        incorporation or organization)              Identification No.)

        1100 North 4th Street, Suite 143, Fairfield, Iowa   52556
        (Address of principal executive offices)          (Zip Code)

Registrant's telephone number, including area code:  (641) 472-5500

                            Not Applicable
         (Former name, former address and former fiscal year, if changed
since last report.)

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 a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of
accelerated filer and large accelerated filer  in Rule 12b-2 of the Exchange
Act. (Check one): Large accelerated filer		Accelerated filer
Non-accelerated filer
Small Reporting Company Filer  X

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act). Yes No  X


Table of Contents
Part I:	Financial Information

Item 1.	Financial Statements                                   4

Statements of Financial Condition                              5
September 30, 2011 (Unaudited) and December 31, 2010 (Audited)

Condensed Schedule of Investments                              7
September 30, 2011 (Unaudited)

Condensed Schedule of Investments                              8-9
December 31, 2010 (Audited)

Statements of Operations                                       10-13
For the three and nine Months Ended September 30, 2011 and 2010 (Unaudited)

Statements of Changes in Partners' Capital (Net Asset Value)   14-15
For the nine Months Ended September 30, 2011 and 2010 (Unaudited)

Statements of Cash Flows                                       15-17
For the nine Months Ended September 30, 2011 and 2010 (Unaudited)

Notes to Financial Statements September 30, 2011               18

Item 2.    Management's Discussion and Analysis of Financial   37
                         Condition and Results of Operations

Item 3.    Quantitative and Qualitative Disclosures about      44
                                              Market Risk

Item 4.    Controls and Procedures	                       44-45

Part II:   Other Information                                   45

Item 1.	   Legal Proceedings                                   45

Item 1A.   Risk Factors	                                       45

Item 2.    Unregistered Sales of Equity Securities and Use     45
                                                 of Proceeds

Item 3.    Defaults upon Senior Securities	               47

Item 4. Submission of Matters to a Vote of Security Holders    47

Item 5.    Other Information	                               47

Item 6.    Exhibits	                                       47-48




2 PART I. FINANCIAL INFORMATION Item 1 Financial Statements Following are Financial Statements for the nine and three months ended September 30, 2011 EVEREST FUND, L.P. (An Iowa Limited Partnership) STATEMENTS OF FINANCIAL CONDITION September 30, 2011 (UNAUDITED) AND DECEMBER 31, 2010 (AUDITED) UNAUDITED AUDITED September 30, 2011 DECEMBER 31, 2010 ----------------- ----------------- ASSETS Cash and cash equivalents $14,605,387 $14,708,768 Equity in broker trading accounts: Cash and cash equivalents 2,022,565 1,623,908 Net unrealized trading gains(losses) on open contracts 1,021,969 1,035,839 Interest receivable 111 198 ----------------- ---------------- TOTAL ASSETS $17,650,032 $17,368,713 =============== ================ LIABILITIES AND PARTNERS' CAPITAL LIABILITIES: Redemptions payable $61,775 $ 0 Management fee payable 28,682 28,685 Brokerage commissions and fees payable 84,667 75,486 Incentive fee payable 0 119,237 O&O Payable 2,970 0 Accounts payable & accrued expenses 56,477 82,135 ----------- ------------ TOTAL LIABILITIES 234,571 305,543 ----------- ------------ PARTNERS' CAPITAL Limited partners, A Shares (4,533.49069 and 4,504.57959 units outstanding) 17,415,461 17,063,170 ------------- ------------ TOTAL PARTNERS' CAPITAL 17,415,461 17,063,170 ------------- ------------ TOTAL LIABILITIES AND PARTNERS' CAPITAL $17,650,032 $17,368,713 ============= ============ The accompanying notes are an integral part of this statement. 3
EVEREST FUND, L.P. (AN IOWA LIMITED PARTNERSHIP) CONDENSED SCHEDULE OF INVESTMENTS September 30, 2011 UNAUDITED EXPIRATION NUMBER OF MARKET % OF PARTNERS' DATES CONTRACTS VALUE (OTE) CAPITAL ---------------- --------- ------------ -------------- LONG POSITIONS: FUTURES POSITIONS Interest rates DEc 11 - Jun 12 170 $199,355 1.14% Currencies Sep 11 - Jun 12 51 (12,713) -0.07% ----------- ---------- ---------- Total long positions 186,643 1.07% SHORT POSITIONS: FUTURES POSITIONS Interest rates Dec 11 6 (12,240) -0.07% Metals Dec 11 20 18,500 0.11% Energy Jan 12 55 166,724 0.96% Agriculture Nov 11 - Jan 12 217 488,750 2.81% Currencies Dec 11 84 181,375 1.04% Indices Dec 11 12 (7,783) -0.04% ----------- ---------- ----------- Total short positions 835,326 4.80% ----------- ----------- TOTAL OPEN CONTRACTS 1,021,970 5.87% =========== =========== The accompanying notes are an integral part of this statement. THE EVEREST FUND, L.P. (an Iowa Limited Partnership) CONDENSED SCHEDULE OF INVESTMENTS December 31, 2010 AUDITED Unrealized % of(Loss) Expiration Number Partners' On Open Date of Contracts Capital Contracts ________ ____________ _________ __________ Long U.S. Futures Contracts Interest rates Sep 11 9 0.01% $1,053 Metals Feb 11 - Mar 11 56 3.02% 515,000 Energy Mar 11 - Apr 11 50 0.49% 84,126 Agriculture Mar 11 230 1.54% 262,745 Currencies Mar 11 80 0.87% 147,700 Indices Mar 11 16 0.07% 12,212 ---------- ---------- Total Long Futures Contracts 5.99 % 1,022,836 ---------- ---------- Short U.S. Futures Contracts Interest rates Mar 11 118 0.17% $29,347 Energy Apr 11 1 -0.01% (1,250) Currencies Mar 11 - Dec 11 22 -0.09% (15,094) ---------- ---------- Total Short Futures Contracts 0.08 % $13,004 ---------- ---------- Total Futures Contracts 6.07 % $1,035,839 ========== ========== The accompanying notes are an integral part of these financial statements.
4 EVEREST FUND, L.P. (AN IOWA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED September 30, 2011 AND 2010 UNAUDITED THREE MONTHS ENDED THREE MONTHS ENDED September 30, 2011 September 30, 2010 -------------------- ------------------- TRADING INCOME (LOSS) Net realized trading gain(loss) on closed contracts $831,293 $909,493 Change in net unrealized trading gain (loss) on open contracts 950,479 900,827 Net foreign currency translation loss 11,555 (9,030) Brokerage Commissions (11,236) (9,598) -------------------- ------------------- NET TRADING INCOME (LOSS) 1,782,091 1,791,693 Interest income, net of cash management fees 7,772 11,790 ---------------- ------------------- TOTAL INCOME 1,789,863 1,803,483 ---------------- ------------------- EXPENSES: General partner management fees 245,088 197,670 Advisor Management fees 88,228 71,721 Incentive fees 0 0 Professional fees 7,155 25,841 Administrative expenses 2,775 951 ---------------- ------------------- TOTAL EXPENSES 343,247 296,183 ---------------- ------------------- NET INCOME $1,446,616 $1,507,301 ================ =================== NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST A SHARES, OUTSTANDING ENTIRE PERIOD $318.94 $330.19 ================ =================== The accompanying notes are an integral part of these statements. EVEREST FUND, L.P. (AN IOWA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED September 30, 2011 AND 2010 UNAUDITED NINE MONTHS ENDED NINE MONTHS ENDED September 30, 2011 September 30, 2010 -------------------- ------------------- TRADING INCOME (LOSS) Net realized trading gain(loss) on closed contracts $1,388,527 $978,743 Change in net unrealized trading gain (loss) on open contracts (13,871) 1,378,773 Net foreign currency translation loss 5,040 (19,364) Brokerage Commissions (34,547) (33,030) -------------------- ------------------- NET TRADING INCOME (LOSS) 1,345,149 2,305,122 Interest income, net of cash management fees 27,203 42,848 ---------------- ------------------- TOTAL INCOME 1,372,352 2,347,970 ---------------- ------------------- EXPENSES: General partner management fees 753,184 567,434 Advisor Management fees 264,761 202,986 Incentive fees 143,073 0 Professional fees 30,602 78,406 Administrative expenses 6,265 3,526 ---------------- ------------------- TOTAL EXPENSES 1,197,885 852,351 ---------------- ------------------- NET INCOME $174,467 $1,495,619 ================ =================== NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST A SHARES, OUTSTANDING ENTIRE PERIOD $45.41 $336,87 ================ =================== The accompanying notes are an integral part of these statements.
5 EVEREST FUND, L.P. (An Iowa Limited Partnership) STATEMENT OF CHANGES IN PARTNERS' CAPITAL FOR THE NINE MONTHS ENDED September 30, 2011 UNAUDITED UNITS LIMITED PTRS A SHARES A SHARES TOTAL ---------- ---------------- ------------ BALANCES, January 1, 2011 4,504.58 17,063,171 17,063,171 Additional Units Sold 181.46 713,010 713,010 Redemptions (142.92) (528,127) (528,127) Less Offering Costs -- (7,060) (7,060) Net profit (Loss) -- 174,467 174,467 ----------- --------------- ------------- BALANCES, September 30,2011 4,543.1142 $17,415,461 $17,415,461 =========== =============== ============= Net asset value per unit, January 1, 2011 $3,787.96 Net profit (loss) per unit 45.41 ------------ Net asset value per unit September 30, 2011 $3,833.38 ============ The accompanying notes are an integral part of these statements.
6 EVEREST FUND, L.P. (An Iowa Limited Partnership) STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED September 30, 2011 AND 2010 UNAUDITED 7 EVEREST FUND, L.P. NOTES TO FINANCIAL STATEMENTS September 30, 2011 (1) GENERAL INFORMATION AND SUMMARY The Everest Fund, L.P., formerly Everest Futures Fund, L.P. (an Iowa Limited Partnership), (the "Partnership'') is a limited partnership organized in June 1988, under the Iowa Uniform Limited Partnership Act (the "Act'') for the purpose of engaging in the speculative trading of commodity futures and options thereon and forward contracts (collectively referred to as "Commodity Interests''). The sole General Partner of the Partnership is Everest Asset Management, Inc. (the "General Partner''). On July 1, 1995, the Partnership recommenced its offering under a Regulation D, Rule 506 private placement. The private placement offering is continuing at a gross subscription price per unit equal to net asset value (NAV) per unit, plus an organization and offering cost reimbursement fee payable to the General Partner, and an ongoing compensation fee equal to 3% of the net asset value of Class A Units sold. The Class A Units (retail shares) continue to be charged an initial 1% Offering and Organization fee as a reduction to capital. The Partnership clears all of its futures and options on futures trades through Newedge USA, LLC. (NE), its clearing broker, and all of its foreign currency trading through Newedge Group an affiliate of NE. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue Recognition Commodity futures contracts, forward contracts, physical commodities, and related options are recorded on the trade-date basis and realized gains or losses are recognized when contracts are liquidated. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains or losses on open contracts (the difference between contract trade price and market price) are reported in the statement of financial condition as a net unrealized gain or loss, as there exists a right of offset of unrealized gains or losses in accordance with the 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. Fair value of exchange-traded contracts is based upon exchange settlement prices. Fair value of non-exchange-traded contracts is based on third party quoted dealer values on the Interbank market. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents represent short-term highly liquid investments with maturities of 90 days or less at the date of acquisition. The Partnership maintains deposits with high quality financial institutions in amounts that are in excess of federally insured limits; however, the Partnership does not believe it is exposed to any significant credit risk. Redemptions Payable Pursuant to the provisions of FASB ASC 480, Distinguishing Liabilities from Equity, redemptions approved by the General Partner prior to month end with a fixed effective date and fixed amount are recorded as redemptions payable as of month end. Fair Value of Financial Instruments The financial instruments held by the Company are reported in the statements of financial condition at fair value, or at carrying amounts that approximate fair value, due to their highly liquid nature and short-term maturity. Foreign Currency Translation 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 foreign currencies are translated at the prevailing exchange rates as of the date of the statement of financial conditions. Gains and losses on investment activity are translated at the prevailing exchange rate on the date of each respective transaction while period end balances are translated at the period end currency rates. Realized and unrealized foreign exchange gains or losses are included in trading income or loss in the statements of operations. Income Taxes No provision for income taxes has been made in the accompanying financial statements as each partner is responsible for reporting income (loss) based upon the pro rata share of the profits or losses of the Partnership. The Partnership files U.S. federal and state tax returns. (3) FAIR VALUE OF FINANCIAL INSTRUMENTS Effective January 1, 2008, the Partnership adopted FASB ASC 820 (formerly Statement of Financial Accounting Standard No. 157, Fair Value Measurement), issued by the FASB. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and sets out a fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined under ASC 820 as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy under ASC 820 are described below: Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2. Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly; and fair value is determined through the use of models or other valuation methodologies. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement. Level 3. Inputs are unobservable for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. The following section describes the valuation techniques used by the Partnership to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized. Fair value of exchange-traded contracts is based upon exchange settlement prices. Fair value of non-exchange-traded contracts is based on third party quoted dealer values on the Interbank market. These financial instruments are classified in Level 1 of the fair value hierarchy. The following table presents the Partnership's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2011: Fair Value Measurements Using ------------------------------------------------------------- Quoted Prices in Significant Significant Active Markets for Other Unobservable Identical Assets Observable Inputs Inputs Total (Level I) (Level II) (Level III) ----------- ----------------- ----------------- -------------- Assets Cash and equivalents $16,627,952 $16,627,952 $- $- ------------- --------------- --------------- -------------- Investments Long Futures Contracts 186,643 186,643 - - Short Futures Contracts 835,326 835,326 - - --------------- --------------- --------------- -------------- 1,021,969 1,021,969 - - -------------- --------------- --------------- -------------- Total assets at fair value $16,303,349 $16,303,349 $- $- ============== =============== =============== ============== The following table presents the Partnership's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of September 30, 2010: Fair Value Measurements Using ------------------------------------------------------------------- Quoted Prices in Significant Significant Active Markets for Other Unobservable Identical Assets Observable Inputs Inputs Total (Level I) (Level II) (Level III) ------------------ ---------------- --------------- -------------- Assets Cash and equivalents $13,704,201 $13,704,201 $ - $ - --------------- ----------------- ----------- ----------- Investments Long Futures Contracts 1,513,930 1,513,930 - - Short Futures Contracts 17,148 17,148 - - ------------- ----------------- --------------- -------------- 1,531,078 1,531,078 - - ------------- ----------------- --------------- -------------- Total assets at fair value $15,235,279 $15,235,279 $ - $ - =============== ================== =============== ============== (4) LIMITED PARTNERSHIP AGREEMENT The Limited Partners and General Partner share in the profits and losses of the Partnership in proportion to the number of units or unit equivalents held by each. However, no Limited Partner is liable for obligations of the Partnership in excess of their capital contribution and profits, if any, and such other amounts as they may be liable for pursuant to the Act. Distributions of profits are made solely at the discretion of the General Partner. Responsibility for managing the Partnership is vested solely in the General Partner. The General Partner has delegated complete trading authority to an unrelated party (see Note 5). Although the Partnership Agreement does not permit redemptions for the first six months following a Limited Partner's admission to the Partnership, the Agreement does permit the Partnership to declare additional regular redemption dates. The Partnership will be dissolved on December 31, 2020, or upon the occurrence of certain events, as specified in the Limited Partnership agreement. (5) AGREEMENTS AND RELATED PARTY TRANSACTIONS John W. Henry & Company, Inc. (JWH) serves as the Partnership's commodity trading advisor. JWH receives a monthly management fee equal to 0.167% (2% annually) of the Partnership's month-end net asset value, (as defined), and a quarterly incentive fee of 20% of the Partnership's new net trading profits. The incentive fee is retained by JWH even though trading losses may occur in subsequent quarters; however, no further incentive fees are payable until any such trading losses (other than losses attributable to redeemed units and losses attributable to assets reallocated to another advisor) are recouped by the Partnership. In addition, the General Partner charges the Partnership a monthly management fee equal to 0.50% of the Partnership's Class A beginning-of-month net asset value. From the monthly management fee the General Partner deducts the round turn trading costs and related exchange fees (between $5.80 to $10.70 per round turn trade on domestic exchanges, and higher for foreign exchanges) and pays the selling agents and certain other parties, if any, up to 50% of the fee retained by the General Partner. The General Partner may replace or add trading advisors at any time. The clearing agreements with the clearing brokers provide that the clearing brokers charge the Partnership brokerage commissions at the rate of between $5.80 to $10.70 per round-turn trade, plus applicable exchange, give up fees and National Futures Association fees for futures contracts and options on futures contracts executed on domestic exchanges and over the counter markets. For trades on certain foreign exchanges, the rates may be higher. The Partnership also reimburses the clearing brokers for all delivery, insurance, storage or other charges incidental to trading and paid to third parties. The Partnership earns interest on 95% of the Partnership's average monthly cash balance on deposit with its clearing brokers at a rate equal to the average 91-day Treasury Bill rate during that month. The Partnership has also entered into an investment advisory agreement with Horizon Cash Management L.L.C. ("HCM''). At September 30, 2011 and 2010 approximately 99.82% and 99.86%, respectively of the partnership's capital were funds deposited with a commercial bank and invested under the direction of HCM. HCM receives a monthly cash management fee equal to 1/12 of .25% (.25% annually) of the average daily assets under management if the accrued monthly interest income earned on the Partnership's assets managed by HCM exceeds the 91-day U.S. Treasury bill rate. (6) DERIVATIVE INSTRUMENTS In the normal course of business, the Partnership engages in trading derivatives by purchasing and selling futures contracts and options on future contracts for its own account. All such trading is effectuated as speculative as opposed to hedging. Effective January 1, 2009, the Partnership adopted the provisions of Accounting Standards Codification 815, Derivatives & Hedging, which requires enhanced disclosures about the objectives and strategies for using derivatives and quantitative disclosures about the fair value amounts, and gains and losses on derivatives. See below for such disclosures. Asset Derivatives Balance Sheet Location Fair Value #of contracts Agricultural Net unrealized trading gains on open contracts 0 0 Currencies Net unrealized trading gains on open contracts (12,713) 51 Energy Net unrealized trading gains on open contracts 0 0 Metals Net unrealized trading gains on open contracts 0 0 Interest rates Net unrealized trading gains on open contracts 199,355 170 Indices Net unrealized trading gains on open contracts 0 0 ========= ====== 186,643 221 Liability Derivatives Balance Sheet Location Fair Value #of contracts Net Agricultural Net unrealized trading gains on open contracts 488,750 217 488,750 Currencies Net unrealized trading gains on open contracts 181,375 84 168,663 Energy Net unrealized trading gains on open contracts 166,724 55 166,724 Metals Net unrealized trading gains on open contracts 18,500 20 18,500 Interest rates Net unrealized trading gains on open contracts (12,240) 6 187,115 Indices Net unrealized trading gains on open contracts (7,783) 12 (7,783) ============ ===== ========== 835,326 394 1,021,969 Trading Revenue for the Nine Months Ended September 30, 2011 Line Item in Income Statement Realized 1,359,020 Change in unrealized (13,871) =========== 1,345,149 Includes net foreign currency translation gain(loss) Trading Revenue for the Nine Months Ended September 30, 2010 Line Item in Income Statement Realized 926,349 Change in unrealized 1,378,773 =========== 2,305,122 Includes net foreign currency translation gain (loss) Total average of futures contracts bought and sold Nine months ended September 30, 2011 Total 1,359,020 ============ 9 month average 151,002 Total average of futures contracts bought and sold Three months ended September 30, 2011 Total 831,612 ============ 3 month average 277,204 For the three months ended September 30, 2011, the monthly average of futures contracts bought and sold was approximately 277,204. (7) FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND CONTINGENCIES The Partnership engages in the speculative trading of U.S. and foreign futures contracts, options on U.S. and foreign futures contracts, and forward contracts ("collectively derivatives''). These derivatives include both financial and non-financial contracts held as part of a diversified trading strategy. The Partnership is exposed to both market risk, the risk arising from changes in the market value of the contracts; and credit risk, the risk of failure by another party to perform according to the terms of a contract. The purchase and sale of futures and options on futures contracts requires margin deposits with a Futures Commission Merchant ("FCM"). Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires an FCM to segregate all customer transactions and assets from the FCM's proprietary activities. A customer's cash and other property such as U.S. Treasury Bills, deposited with an FCM are considered commingled with all other customer funds subject to the FCM's segregation requirements. In the event of an FCM's insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than the total of cash and other property deposited. For derivatives, risks arise from changes in the market value of the contracts. Theoretically, the Partnership is exposed to a market risk equal to the value of futures and forward contracts purchased and unlimited liability on such contracts sold short. As both a buyer and seller of options, the Partnership pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. In the case of forward contracts, over-the-counter options contracts or swap contracts, which are traded on the interbank or other institutional market rather than on exchanges, the counterparty is generally a single bank or other financial institution, rather than a clearinghouse backed by a group of financial institutions; thus, there likely will be greater counterparty credit risk. The Partnership trades only with those counterparties that it believes to be creditworthy. All positions of the Partnership are valued each day on a mark-to-market basis. There can be no assurance that any clearing member, clearinghouse or other counterparty will be able to meet its obligations to the Partnership. (8) FINANCIAL HIGHLIGHTS The following financial highlights show the Partnership's financial performance for the Nine months ended September 30, 2011 and September 30, 2010. September 30, 2011 September 30, 2010 -------------------- --------------- Class A Class A -------------------- --------------- Total return before distributions* 1.20% 11.32% ==================== =============== Ratio to average net assets: Net investment Income (loss)** (8.92)% (7.99)% ==================== =============== Management fees 5.74% 5.60% Incentive fees 1.09% 0% Other expenses 2.30% 2.81% -------------------- --------------- Total expenses** 9.13% 8.41% ==================== =============== *Not annualized **Annualized Interim Financial Statements The statements of financial condition, including the consolidated schedule of investments, as of September 30, 2011, the statements of operations for the three and nine months ended September 30, 2011 and 2010, the statements of cash flows and changes in partners' capital (net asset value) for the nine months ended September 30, 2011 and 2010 and the accompanying notes to the financial statements are unaudited. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles may be omitted pursuant to such rules and regulations. In the opinion of management, such financial statements and accompanying disclosures reflect all adjustments, which were of a normal and recurring nature, necessary for a fair presentation of financial position as of September 30, 2011, results of operations for the three and nine months ended September 30, 2011 and 2010, cash flows and changes in partners' capital (net asset value) for the nine months ended September 30, 2011 and 2010. The results of operations for the full three And nine months ended September 30, 2011 and 2010 are not necessarily indicative of the results to be expected for the full year or any other period. These financial statements should be read in conjunction with the audited financial statements and the notes thereto included in our form 10-k as filed with the Securities and Exchange Commission. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation Each months ended September 30, 2011 compared to each months ended September 30, 2010 Class A Units were positive 1.40% in January 2011 resulting in a Net Asset Value per unit of $3,841.11 as of January 31, 2011. Class A Units were negative 3.48% in January 2010 resulting in a Net Asset Value per unit of $2,873.42 as of January 31, 2010. The interest rate sector produced slightly positive results as global rates moved modestly higher amid signs the economy was improving. The currency sector was unprofitable in January as directionless price patterns prevailed. Gains from trading in the British pound were not enough to offset losses from other markets in the sector. Trading in the equity sector was slightly profitable as stocks continued to move higher. Positions in Asian, European and U.S. stock index futures were all profitable. Oil and petroleum products moved higher in January, contributing to gains for the month. Positions in heating oil were buoyed by unseasonably cold temperatures in many parts of the United States. Trading in the metals sector was unprofitable for the month. The trend in precious metals prices may have come to an end in January as gold failed to participate in an otherwise broad-based rally in commodity prices. Silver also produced negative performance in January. Trading in the agricultural sector continued to be an important source of Fund's returns. All of the positions in the sector were profitable in January. Class A Units were positive 3.09% in February 2011 resulting in a Net Asset Value per unit of $3,959.69 as of February 28, 2011. Class A Units were negative 3.62% in February 2010 resulting in a Net Asset Value per unit of $2,769.41 as of February 28, 2010. Performance in February was strong as the Fund gained 3.09% for the month. The consistency of the Fund's returns is in part due to a rotation in performance leadership across the portfolio. While one sector is undergoing a correction, performance from another sector has been strong enough to generate gains in the overall Fund. This was the case in February. As key markets in the agricultural sector suffered from meaningful pullbacks, certain energy prices, such as crude oil, surged. On the surface, it may seem that the good performance in February was simply an extension of January's positive results; generally, commodity prices were up on the month and equities continued their movement higher. The energy sector was the difference maker for the Fund in February as the price of crude oil, heating oil and gasoline all surged during the month. Positions in crude oil and crude oil products were all profitable and more than sufficient to offset small losses from trading in natural gas. The agricultural sector, which has been an important influence on the Fund's positive performance in recent months, was once again profitable in February. Cotton, for example, was the best-performing single market in the Fund during the month. Sugar, which had been rallying along with other agricultural markets, suffered a sharp pull back and was the worst-performing market in the Fund. The metals sector produced positive results despite mixed performance from the normally correlated gold and silver markets. Significant gains from trading in silver more than offset losses from trading in gold. Positions in U.S., European and Japanese equity futures were all profitable for the month. Trading in the interest rate sector was flat in February. Trading in currencies was slightly unprofitable as the Fund suffered from intra-month reversals. The price action observed in the Japanese yen and Swiss franc was consistent with the price action in the Treasury market and an indication of the strong safe haven flows that upset trends in both bonds and currencies. Class A Units were negative 1.14% in March 2011 resulting in a Net Asset Value per unit of $3,914.46 as of March 31, 2011. Class A Units were positive 1.04% in March 2010 resulting in a Net Asset Value per unit of $2,798.33 as of March 31, 2010. Performance for the Fund declined one percent in March as a number of long-standing trends were disrupted by the tragic events that occurred in Japan during the month. The metals sector was a bright spot for the Fund as precious metals, and silver in particular, surged amidst the global turmoil. The energy market was also profitable in March, helping to offset losses from the Fund's Japanese exposures. In general, the price pattern of crude oil and crude oil products was similar to that of other risk assets, including equities; they moved lower following the news from Japan and then traded higher in the second half of the month. Price patterns across the agriculture sector were diverse with some markets following the direction of overall investor risk sentiment while other markets were more tethered to idiosyncratic fundamentals. Performance from the sector was negative as gains from trading in the coffee and cotton markets were insufficient to offset losses from trading in grains and sugar. Trading in global interest rates was unprofitable in March as the sector was hit by sudden reversals that followed news of the Japanese earthquake. Trading in currencies was slightly unprofitable, with the largest losses coming from positions in the U.S. dollar against the Japanese yen. The Fund's systematic non-predictive approach to trading these markets allowed it to maintain exposure and profit from the extension of ongoing trends in many markets, while limiting losses and adjusting positions to newly formed trends in others. Class A Units were positive 7.53% in April 2011 resulting in a Net Asset Value per unit of $4,209.22 as of April 30, 2011. Class A Units were positive 3.01% in April 2010 resulting in a Net Asset Value per unit of $2,882.66 as of April 30, 2010. The Fund's strong gains came as interest rate markets rallied into the close of the month as did certain commodities while the dollar continued to decline. Interest rates posted negative performance for the month. Also, the agricultural sector has cooled in recent weeks with performance from the sector being slightly negative in April despite strong gains from positions in sugar. Sugar fell more than 10 percent on the month as supplies increased as a result of higher exports from India. Gains in sugar and coffee were not sufficient to offset losses in grain prices and cotton. Positive performance in April came from a continuation of trends in place in the European currencies, energy and precious metals sectors. The Fund was able to benefit from the continued weakness of the dollar and increasing speculation in a number of commodities that have spiked to historic levels during the month. The markets remain susceptible to upside and downside overreactions to the continued flood of fundamental data released across the globe as well as an unfortunate continuation of natural disasters both domestic and abroad. Class A Units were negative 13.27% in May 2011 resulting in a Net Asset Value per unit of $3,650.59 as of May 31, 2011. Class A Units were positive 1.98% in May 2010 resulting in a Net Asset Value per unit of $2,939.63 as of 31, 2010. The Fund declined in May as long-standing trends in certain commodity markets came to a violent end. The Fund was specifically affected by abrupt reversals in the price of energy and metals. Silver positions, which had been among the most profitable positions in the Fund to date, were particularly hard hit as the price of the metal declined by 30 percent in just four days. The price of crude oil fell by more than 15 percent in just three days. The absolute decline in prices witnessed over such a short period of time was the worst on record for both markets. The models used by the program were designed to capture long-term trends and will usually have difficulty during the rare times when markets reverse the way they did in May. The interest rate sector was profitable in May. Bond prices benefited as investor flows moved out of stocks and commodities amid concerns that rising global interest rates would negatively impact economic growth.The currency sector was unprofitable with the largest loss coming from positions in the euro. The EUR/USD exchange rate fell more than 5 percent during the month as the difficult debate on how to handle the European debt problem weighs on policy makers. The agricultural sector was also unprofitable with the largest losses coming from positions in grains. While the magnitude of the decline was not as severe, corn and wheat both tracked commodity and other risk assets lower during the first half of the month, leading to losses. The coffee market bucked the trend for the month as expectation for cold weather in Brazil added to the positive fundamental backdrop for the commodity. However, gains from positions in coffee were unable to offset losses from other positions in the sector. Class A Units were negative 3.73% in June 2011 resulting in a Net Asset Value per unit of $3,514.44 as of June 30, 2011. Class A Units were positive 1.50% in June 2010 resulting in a Net Asset Value per unit of $2,983.83 as of June 30, 2010. The Fund declined in June as markets remained choppy throughout the month following May's sharp corrections. The interest rate sector was essentially flat for the month as gains in Asian and European debt markets were offset by a drop in the U.S. market. Trading in the currency markets provided slightly positive returns as investors continued to flee from risk assets and into safe-haven currencies such as the Japanese yen and Swiss franc. Positive returns in these currencies more than offset losses in higher-yielding currencies, such as the euro and the British pound. The Fund's performance in equity indices was slightly negative in June. Trading in the metals sector was unprofitable. The energy markets were the Fund's worst-performing sector for the month. Short-term volatility and price swings in Brent Crude affected the Fund's positioning in that market. The agricultural sector was also negative in June. Grain markets steadily declined throughout the month after hitting highs during the first week of the month following a strong May. June performance was the result of the continued risk-on and risk-off reactions to the global sovereign debt crisis. The global economic picture remains cloudy in the near-term with mixed signals being reported on a daily basis making it difficult for trends to gain traction in many markets. Class A Units were positive 9.46% in July 2011 resulting in a Net Asset Value per unit of $3,847.03 as of July 31, 2011. Class A Units were negative -0.53% in July 2010 resulting in a Net Asset Value per unit of $2,967.96 as of July 31, 2010. The Fund performed well in July as it gained 9.4 percent for the month. Trends in currencies, metals and interest rates extended during the course of July, thus leading to gains for the Fund. Positions in the interest rate sector benefited directly as a result of the global credit maelstrom. Despite concerns about downgrades from credit rating agencies, U.S. and European government bond prices actually rose and yields declined during the month. All positions traded in the sector were profitable in July. The currency sector also contributed to the month's gains as positions in the Swiss franc and Japanese yen led the way. The Swiss franc, often regarded as a haven in times of turmoil, rallied to record levels against both the dollar and euro during the month. The metals markets made a meaningful contribution to July's performance. The continued rally in gold prices was fueled by many of the same factors that were underpinning the move in the Swiss franc. Silver prices also moved higher in July, adding to the month's gains. The agricultural sector was profitable as significant gains in soft commodities from both long and short positions offset losses from trading in grains. Sugar prices rallied while coffee prices were declining. Trading in the energy markets was remarkably subdued considering the tumult in other sectors, was slightly unprofitable in July. Trading in the equity sector was essentially flat. The Fund delivered the diversification and strong uncorrelated performance to our investors during this period of ongoing market turbulence. Class A Units were positive 4.93% in August 2011 resulting in a Net Asset Value per unit of $4,036.56 as of August 31, 2011. Class A Units were positive 5.55% in August 2010 resulting in a Net Asset Value per unit of $3,3132.56 as of August 31, 2010. The Fund posted another positive month in August as a surge in market volatility during the month upset the summer calm. Trading gains from positions in government bonds and gold were sufficient to overcome losses from other parts of the Fund where trading conditions were more difficult. The Fund was aided by excellent performance from the interest rate sector in August as government bond yields fell precipitously despite the move by Standard and Poor's. Equity prices, rising fear and a high profile U.S. Federal Reserve Board (the Fed) were positive for bond prices. All positions in the interest rate sector were profitable for the month. The euro and British pound remained relatively stable during the month, lacking a clear direction. Performance from the currency sector was slightly negative for the month. Trading in the equity sector was mixed as small gains from positions in European equity futures offset small losses from trading in U.S. and Japanese equity futures. Trading in the metals sector was significantly profitable as the price of gold surged to new all-time highs. . Gold, much like government bonds and the Swiss franc, has enjoyed its status as a safe-haven and a store of value during these turbulent times. Positions in silver were also profitable. Trading in the energy sector was difficult as crude oil experienced abrupt moves in both directions. This change of direction led to losses across the petroleum complex. Trading in natural gas, on the other hand, was modestly profitable as the long-term down trend in this market remains in place. Trading in the agricultural sector was mixed as gains from trends in corn and soybeans were not sufficient enough to offset losses from other markets. Class A Units were negative 5.03% in September 2011 resulting in a Net Asset Value per unit of $3,833.38 as of September 30, 2011. Class A Units were positive 5.79% in September 2010 resulting in a Net Asset Value per unit of $3,314.02 as of September 30, 2010. Despite the extension of trends in certain key sectors, performance declined in September. The negative result for the month can, in part, be linked to sudden and violent reversals in the price of metals and agricultural commodities. The abrupt reversal in trends in metals and agricultural commodities led to losses, which were significant enough to offset gains from other parts of the Fund. The interest rate sector was profitable as bond prices continued to benefit from the economic uncertainty overhanging the markets. The Fund's positions in bond futures in the U.S. and Europe were profitable and more than offset small losses from shorter-term interest rate futures. The currency market intervention conducted in August by the Swiss National Bank and the Bank of Japan limited gains from the sector and the much needed offset to losses from other parts of the Fund. Trading in the stock market contracts was especially erratic. While the Fund was able to generate a small profit from the sector, the magnitude of the gains did not match the headline numbers. The market traded in violent swings for most of September but did not extend below this initial move during the course of the month. The Fund's trading model in some cases adjusted to the change in direction but there was little net follow through on the move. Trading in the metals sector was difficult as both gold and silver suffered significant price reversals during the month. Gold fell 12 percent for the month, while silver fell a historic 27 percent. The speed at which the markets reversed was as much a problem for the Fund as the size of the reversal. The Fund was able to adjust to take advantage of the decline in energy prices that occurred during the month. Brent crude oil futures declined 11 percent month-on-month. All positions in the energy sector were profitable. Trading in the agricultural market was difficult in September as a number of market trends reversed sharply. The sugar market, which had been in an uptrend for more than a year due in part to supply issues in Brazil, fell more than 12 percent during the month. The corn market, which traded at an all-time high in August due to declining domestic stockpiles, fell more than 20 percent during the month - the largest single price change in history. Soybeans traded in a manner similar to corn. In short, trading in the agricultural markets was unprofitable due to large trend reversals across the sector. Item 3. Quantitative and Qualitative Disclosures About Market Risk There has been no material change with respect to market risk since the "Quantitative and Qualitative Disclosures About Market Risk" was made in the Form 10K of the Partnership dated December 31, 2010. Item 4. Controls and Procedures As of September 30, 2011 an evaluation was performed by the company under the supervision and with the participation of management, including the President of the Company, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the President, concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company that is required to be included in the Company's period filings with the Securities and Exchange Commission. There have been no significant changes in the company's internal controls or in other factors that could significantly affect those internal controls subsequent to the date the company carried out its evaluation. Part II. OTHER INFORMATION Item 1. Legal Proceedings Neither the Partnership, nor the General Partner, is party to any pending material legal proceeding. Item 1A. Risk Factors There has been no material change with respect to risk factors since the "Risk Factors" were disclosed in the Form 10K of the Partnership dated December 31, 2010. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds RECENT SALES OF UNREGISTERED SECURITIES A UNITS Nine months ended September 30, 2011 Nine months ended September 30, 2010 Units Sold 181.46 294.30 Value of Units Sold $713,010 $870,000 1% of the proceeds from the above sales were used to pay the Partnership's Organization and Offering charge. The remaining 99% was invested in the Partnership. See Part I, Statement of Changes in Partner's Capital Item 3. Defaults Upon Senior Securities None 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 a) Exhibits Exhibit Number Description of Document Page Number 31 Certification by Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 E- 1-2 32 Certification by Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 E - 3 b) Reports on Form 8-K None 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 and thereunto duly authorized. EVEREST FUND, L.P. Date: November 14, 2011 By: Everest Asset Management, Inc., its General Partner By:__/s/ Peter Lamoureux_______________________________ Peter Lamoureux President 32