Attached files
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 June 30, 2014
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 3
Statements of Financial Condition 3
June 30, 2014 (Unaudited) and December 31, 2013 (Audited)
Condensed Schedule of Investments 4
June 30, 2014 (Unaudited)
Condensed Schedule of Investments 5
December 31, 2013 (Audited)
Statements of Operations 5-6
For the Three and Six Months Ended June 30, 2014 and 2013 (Unaudited)
Statements of Changes in Partners' Capital (Net Asset Value) 6-7
For the Six Months Ended June 30, 2014 and 2013 (Unaudited)
Statements of Cash Flows
For the Six Months Ended June 30, 2014 and 2013 (Unaudited) 7-8
Notes to Financial Statements June 30, 2014 8
Item 2. Management's Discussion and Analysis of Financial 18
Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about 20
Market Risk
Item 4. Controls and Procedures 21
Part II: Other Information 21
Item 1. Legal Proceedings 21
Item 1A. Risk Factors 21
Item 2. Unregistered Sales of Equity Securities and Use 21
of Proceeds
Item 3. Defaults upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits 22
2
PART I. FINANCIAL INFORMATION
Item 1 Financial Statements
Following are Financial Statements for the three months ended June 30, 2014
EVEREST FUND, L.P.
(An Iowa Limited Partnership)
STATEMENTS OF FINANCIAL CONDITION
June 30, 2014 (UNAUDITED) AND DECEMBER 31, 2013 (AUDITED)
UNAUDITED AUDITED
June 30, 2014 DECEMBER 31, 2013
----------------- -----------------
ASSETS
Equity in broker trading accounts:
Cash and investments in marketable securities $1,302,703 $3,172,539
Cash in broker trading accounts 1,756,875 2,072,126
Net unrealized trading gains(losses)
on open contracts 537,894 431,081
----------------- ----------------
Total cash & equity in broker trading accounts 3,597,472 5,675,746
Other assets
Investments in marketable securities 2,077,960 1,200,421
Interest receivable 20 20
----------------- ----------------
TOTAL ASSETS $5,675,452 $6,876,187
============== ================
LIABILITIES AND PARTNERS' CAPITAL (NET ASSETS)
LIABILITIES:
Management fee payable $9,358 $11,310
General partner fees payable 21,293 25,865
Redemptions payable 260,186 442,723
Accounts payable & accrued expenses 39,250 64,569
----------- ------------
TOTAL LIABILITIES 330,087 544,467
----------- ------------
PARTNERS' CAPITAL
Limited partners, A Shares (2,858.17562
and 3,072.20091 units outstanding) 5,345,365 6,331,720
------------- ------------
TOTAL PARTNERS' CAPITAL 5,345,365 6,331,720
------------- ------------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $5,675,452 $6,876,187
============= ============
The accompanying notes are an integral part of this statement.
3
EVEREST FUND, L.P.
(AN IOWA LIMITED PARTNERSHIP)
CONDENSED SCHEDULE OF INVESTMENTS
June 30, 2014
UNAUDITED
EXPIRATION NUMBER OF MARKET % OF PARTNERS'
DATES CONTRACTS VALUE (OTE) CAPITAL
------------ --------- ------------ --------------
LONG POSITIONS:
FUTURES POSITIONS
Interest rates Sep 14-Sep 15 443 $159,198 2.98%
Metals Aug 14-Oct 14 36 30,893 0.58%
Energy Aug 14-Sep 14 41 17,668 0.33%
Agriculture Aug 14-Dec 14 41 177,026 3.31%
Currencies Sep 14 132 105,782 1.98%
Indices Jul 14-Sep 14 53 14,623 0.27%
----------- ---------- -------
505,190 9.45%
Forward positions
Currencies (12,382) -0.23%
---------- -------
Total long positions 492,808 9.22%
SHORT POSITIONS:
FUTURES POSITIONS
Interest rates Sep 14 68 $(4,530) -0.08%
Metals Sep 14 2 (5,724) -0.11%
Agriculture Aug 14-Dec 14 103 67,943 1.27%
Currencies Sep 14 15 (21,663) -0.41%
----------- ---------- ----------
36,026 0.67%
Forward positions
Currencies 9,060 0.17%
---------- ---------
Total short positions 45,086 0.84%
---------- ----------
TOTAL OPEN CONTRACTS 537,894 10.06%
=========== ==========
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, 2013
AUDITED
EXPIRATION NUMBER OF MARKET % OF PARTNERS'
DATES CONTRACTS VALUE (OTE) CAPITAL
------------ --------- ------------ --------------
Long U.S. Futures Contracts
Interest rates Sep 14 - Mar 15 148 (68,958) -1.34%
Metals Mar 14 (55,181) -1.08%
Energy Feb 14 - Mar 14 30 32,890 0.64%
Agriculture Feb 14 - Mar 14 98 (6,509) -0.13%
Currencies Mar 14 86 45,775 0.89%
Indices Jan 14 - Mar 14 45 207,506 4.04%
---------- ----------
Total Long Futures Contracts 155,523 3.03%
---------- ----------
Forward Positions
Currencies 30,344 0.59%
---------- ----------
Total Long Positions 185,868 3.62%
Short U.S. Futures Contracts
Interest rates Mar 14 - Jun 14 362 54,445 1.06%
Metals Feb 14 - Apr 14 52 (11,516) -0.22%
Energy Feb 14 1 (1,747) -0.03%
Agriculture Mar 14 - Mar 14 140 130,342 2.54%
Currencies Mar 14 57 64,730 1.26%
---------- ----------
Total Short Futures Contracts 236,253 4.60
---------- ----------
Forward Positions
Currencies 8,960 0.17%
---------- ----------
Total Short Positions 245,213 4.78%
---------- ----------
Total Futures Contracts 431,081 8.40%
========= ==========
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 June 30, 2014 AND 2013
UNAUDITED
THREE MONTHS ENDED THREE MONTHS ENDED
June 30, 2014 June 30, 2013
-------------------- -------------------
TRADING INCOME (LOSS)
Net realized trading gain(loss)
on closed contracts $(119,480) $(455,087)
Change in net unrealized trading gain
(loss) on open contracts 297,151 54,732
Net foreign currency translation loss 817 (2,146)
Brokerage Commissions (14,174) (14,060)
-------------------- -------------------
NET TRADING INCOME (LOSS) 164,313 (416,561)
Interest income, net of cash management fees 229 537
---------------- -------------------
TOTAL INCOME 164,542 (416,024)
---------------- -------------------
EXPENSES:
General partner management fees 69,851 111,105
Advisor Management fees 28,136 40,806
Incentive fees 0 0
Professional fees 16,249 20,725
Administrative expenses 1,594 1,329
---------------- -------------------
TOTAL EXPENSES 115,830 173,965
---------------- -------------------
NET INCOME $ 48,712 $(589,989)
================ ===================
NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST
A SHARES, OUTSTANDING ENTIRE PERIOD $17.04 $(173.19)
================ ===================
The accompanying notes are an integral part of these statements.
5
EVEREST FUND, L.P.
(AN IOWA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED June 30, 2014 AND 2013
UNAUDITED
SIX MONTHS ENDED SIX MONTHS ENDED
June 30, 2014 June 30, 2013
-------------------- ------------------
TRADING INCOME (LOSS)
Net realized trading gain(loss)
on closed contracts $(508,551) $263,008
Change in net unrealized trading gain
(loss) on open contracts 153,029 (120,242)
Net foreign currency translation loss 34,540 342
Brokerage Commissions (27,027) (26,297)
-------------------- ------------------
NET TRADING INCOME (LOSS) (348,009) 116,810
Interest income, net of cash management fees 402 2,862
---------------- ------------------
TOTAL INCOME (LOSS) (347,607) 119,672
---------------- ------------------
EXPENSES:
General partner management fees 148,438 228,216
Advisor Management fees 57,608 84,679
Incentive fees 0 0
Professional fees 29,642 35,322
Administrative expenses 2,331 3,104
---------------- ------------------
TOTAL EXPENSES 238,019 351,321
---------------- ------------------
NET INCOME (LOSS) $ (585,626) $(231,649)
================ ==================
NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST
A SHARES, OUTSTANDING ENTIRE PERIOD $ (204.89) $(68.00)
================ ==================
The accompanying notes are an integral part of these statements.
6
EVEREST FUND, L.P.
(An Iowa Limited Partnership)
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED June 30, 2014
UNAUDITED
UNITS LIMITED PTRS
A SHARES A SHARES TOTAL
---------- ---------------- -----------
BALANCES, January 1, 2014 3,072.20 6,331,720 6,331,720
Additional Units Sold 0 0 0
Redemptions (214.03) (400,730) (400,730)
Less Offering Costs -- 0 0
Net profit (Loss) -- (585,625) (585,625)
----------- --------------- ------------
BALANCES, JUNE 30,2014 2,858.17 $5,345,365 $5,345,365
=========== =============== ============
Net asset value per unit
January 1, 2014 $2,060.97
Net profit (loss) per unit (190.77)
--------------
Net asset value per unit
JUNE 30, 2014 $1,870.20
==============
The accompanying notes are an integral part of these statements.
7
EVEREST FUND, L.P.
(An Iowa Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED June 30, 2014 AND 2013
UNAUDITED
THREE MONTHS ENDED THREE MONTHS ENDED
June 30, 2014 June 30, 2013
------------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $(585,626) $(231,649)
Net changes to reconcile net income(loss) to net cash
provided (used) in operating activities:
Unrealized gain or loss on open contracts (106,813) 101,920
Interest receivable 0 28
Incentive fees payable 0 0
General partner fees payable (4,572) (938)
Redemptions payable (182,537) (541,387)
Management fees payable (1,952) (2,097)
Accounts payable & accrued expenses (25,319) (23,288)
---------------- ----------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (906,819) (697,411)
---------------- ----------------
CASH FLOWS FROM (FOR) FINANCING ACTIVITIES:
Cash Redemptions paid (400,730) (619,049)
Partner addition of units,net of offering costs 0 0
---------------- ----------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (400,730) (619,049)
---------------- ----------------
NET INCREASE (DECREASE)IN CASH AND CASH EQUIVALENTS (1,307,549) (1,316,460)
CASH AND CASH EQUIVALENTS, AT BEGINNING OF PERIOD 6,445,086 8,902,829
---------------- ----------------
CASH AND CASH EQUIVALENTS, AT END OF PERIOD $5,137,537 $7,586,369
================ ================
END OF THE YEAR CASH AND CASH EQUIVALENTS CONSIST OF:
Cash in Banks 15,755 16,363
Cash in broker trading accounts 1,756,875 1,642,548
Cash and cash equivalents 3,364,907 5,927,458
----------------- ----------------
TOTAL END OF THE YEAR CASH AND CASH EQUIVALENTS $5,137,537 $7,586,369
================= ================
The accompanying notes are an integral part of these statements
8
EVEREST FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2014
(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.
Currently, R.J. O'Brien and Associates, LLC ("RJO"), 222 South
Riverside Plaza, Suite 900, Chicago, Illinois 60606, serves as the Fund's
clearing broker to execute and clear Fund's futures and equities
transactions and provide other brokerage-related services. RJO
Professional FX is a division of RJO. RJO Professional FX may execute
foreign exchange or other over the counter transaction with the Fund
as principal. RJO is a subsidiary of R.J. O'Brien Holdings Corporation.
RJO is registered with the U.S. Commodity Futures Trading Commission
("CFTC") as a Futures Commission Merchant ("FCM") and is a member of
the National Futures Association ("NFA") in several capacities, including
as a Forex Dealer Member ("FDM") and is a member of certain principal
U.S. contracts markets. RJO is a full clearing member of the CME Group,
the IntercontinentalExchange, NYSE Liffe U.C., and the CBOE Futures
Exchange ("CFE").
(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
Fair value is defined 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. The Financial Accounting Standards
Board has defined a hierarchy for fair value measurements. 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). The three levels of the fair value
hierarchy 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 table below demonstrates the Partnership's fair value hierarchy for
those assets and liabilities measured at fair value on a recurring basis
as of June 30, 2014 and June 30, 2013:
Level 1 Level 2 Level 3
Assets at June 30,2014:
Open positions in futures and
option contracts $537,894
---------- ---------- ---------
Total assets at fair value $537,894 $0 $0
========== ========== ==========
Level 1 Level 2 Level 3
Assets at June 30,2013:
Open positions in futures and
option contracts $290,772
---------- ---------- ---------
Total assets at fair value $290,772 $0 $0
========== ========== ==========
(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 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
EMC Capital Management, Inc. (EMC), 2201 Waukegan
Road, Suite West 240, Bannockburn, IL 60015; telephone: 847-267-8700,
serves as the Partnership's Commodity Trading Advisor (CTA).
EMC 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 EMC 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.
Effective November 2003, 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 June 30, 2014 and 2013
approximately 99.534% and 99.725%, 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 0.25%
0.25% 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.
Fair Value of Derivative Instruments
2014 2013
Speculative Instruments Location- Statement of Fair Value Fair Value
Financial Condition
______________________ ________________________ __________ ___________
Futures Contracts Net unrealized gain (loss) $537,894 $290,772
on open contracts
2014 2013
Speculative Instruments Location- Statement of Fair Value Fair Value
Operations
_______________________ _______________________ ____________ __________
Futures Contracts Net realized trading ($508,551) $263,008
gains(losses)
Futures Contracts Change in unrealized $153,029 ($120,242)
gains(losses)
Asset Derivatives
Balance Sheet
Location Fair Value #of contracts
_____________________ ____________ _____________
Agricultural
Net unrealized trading gains on open contracts 177,026 41
Currencies
Net unrealized trading gains on open contracts 105,782 132
Energy
Net unrealized trading gains on open contracts 17,668 41
Metals
Net unrealized trading gains on open contracts 30,893 36
Interest rates
Net unrealized trading gains on open contracts 159,198 443
Indices
Net unrealized trading gains on open contracts 14,623 53
Currencies-Forward positions
Net unrealized trading gains on open contracts (12,382)
============ ===========
492,808 746
Liability Derivatives
Balance Sheet Location
Fair Value #of contracts Net
_____________ ___________ ______
Agricultural
Net unrealized trading gains on open contracts 67,943 103 244,969
Currencies
Net unrealized trading gains on open contracts (21,663) 15 84,119
Energy
Net unrealized trading gains on open contracts 0 0 17,668
Metals
Net unrealized trading gains on open contracts (5,724) 2 25,169
Interest rates
Net unrealized trading gains on open contracts (4,530) 68 154,668
Indices
Net unrealized trading gains on open contracts 0 0 14,623
Currencies-Forward positions
Net unrealized trading gains on open contracts 9,060 (3,322)
============ ======= =======
45,086 188 537,894
Trading Revenue for the six Months Ended June 30, 2014
Line Item in Income Statement
Realized (501,038)
Change in unrealized 153,029
=========
(348,009)
Includes net foreign currency translation gain(loss)
Trading Revenue for the six Months Ended June 30, 2013
Line Item in Income Statement
Realized 237,053
Change in unrealized (120,242)
===========
116,811
Includes net foreign currency translation gain(loss)
Total average of futures contracts bought and sold
six months ended June 30, 2014
Total (501,038)
==============
6 month average (167,013)
Total average of futures contracts bought and sold
six months ended June 30, 2013
Total 237,053
============
6 month average 39,509
For the three months ended June 30, 2014, the monthly average of futures
contracts bought and sold was approximately (44,279).
(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 six months ended June 30, 2014 and
June 30, 2013.
June 30, 2014 June 30, 2013
--------------------- -----------------
Class A Class A
-------------------- -----------------
Total return before distributions* (9.26)% (3.19)%
=============== ===============
Ratio to average net assets:
Net investment Income (loss)** (8.23)% (8.30)%
=============== ===============
Management fees 2.57% 2.72%
Incentive fees 0.00% 0.00%
Other expenses 1.55% 1.47%
--------------- ---------------
Total expenses** 8.24% 8.37%
=============== ===============
*Not annualized
**Annualized
Interim Financial Statements
The statements of financial condition, including the consolidated schedule
of investments, as of June 30, 2014, the statements of operations for
the three and six months ended June 30, 2014 and 2013, the statements
of cash flows and changes in partners' capital (net asset value) for the
six months ended June 30, 2014 and 2013 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 June 30, 2014, results of operations for the
Six months ended June 30, 2014 and 2013, cash flows and changes in
partners' capital (net asset value) for the six months ended June 30,
2014 and 2013. The results of operations for the full six months ended
June 30, 2014 and 2013 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 June 30, 2014 compared to each months ended
June 30, 2013.
Class A Units were negative 3.80% in January 2014 resulting in
a Net Asset Value per unit of $1,982.56 as of January 31, 2014.
Class A Units were positive 6.17% in January 2013 resulting in
a Net Asset Value per unit of $2,506.77 as of January 31, 2013.
The Fund had a loss as did the S&P 500 for the month of January.
It was a volatile month with very few lasting trends and prices
moving up down, up down for most of the month. Losses came
in metals, currencies and stock indices. Smaller gains were seen
in grains/agriculturals and softs. January was pretty much a
textbook example of poor trending conditions for trend following
with prices reversing and choppy all month.
Class A Units were negative 2.83% in February 2014 resulting in
a Net Asset Value per unit of $1,926.45 as of February 28, 2014.
Class A Units were negative 4.17% in February 2013 resulting in
a Net Asset Value per unit of $2,402.34 as of February 28, 2013.
February was a month of volatile markets as witnessed by the
fluctuations of the S&P 500, which had a mini sell off, only to
finish at new highs. Other markets had similar moves, with
abrupt reversals the norm. The Fund lost just under 3%, with
conditions once again not favorable for trend following. Gains
in currencies, grains and meats were not enough to offset losses
in metals, softs and stock indices.
Class A Units were negative 3.76% in March 2014 resulting in
a Net Asset Value per unit of $1,853.93 as of March 31, 2014.
Class A Units were positive 2.32% in March 2013 resulting in
a Net Asset Value per unit of $2,457.99 as of March 31, 2013.
March was a month much like January and February for
trend following. False price trends, followed by abrupt reversals.
EMC's trading program was able to extract profits in metals, grains
and softs but larger losses in currencies, energies, interest rates
and stock indices resulted in another down month.
Class A Units were negative 0.05% in April 2014 resulting in
a Net Asset Value per unit of $1,853.03 as of April 30, 2014.
Class A Units were positive 1.85% in April 2013 resulting in
a Net Asset Value per unit of $2,503.40 as of April 30, 2013.
April was essentially a break even month for the Fund. Gains
in currencies, grains, interest rates, and metals were offset by
losses in energies and stock indices. While no one is satisfied
with a break even month, it does put an end to a 4 month
decline, and we did see less abrupt price reversals this month.
In a rare coincidence, the Fund and the S&P 500 total return
result were essentially the same for the month.
Class A Units were negative 0.04% in May 2014 resulting in
a Net Asset Value per unit of $1,852.22 as of May 31, 2014.
Class A Units were negative 6.32% in May 2013 resulting in
a Net Asset Value per unit of $2,345.31 as of May 31, 2013.
May was another essentially break even month for the Fund.
Gains in interest rates and stock indices were negated by
similar losses in currencies, softs and to a smaller extent,
energies. This marks the second month in a row with slightly
negative almost flat performance. There were stretches of
positive performance and some price trending throughout
the month. The trends were, however, short lived.
Class A Units were positive 0.97% in June 2014 resulting in
a Net Asset Value per unit of $1,870.20 as of June 30, 2014.
Class A Units were negative 2.54% in June 2013 resulting in
a Net Asset Value per unit of $2,285.75 as of June 30, 2013.
In June the Fund had a gain of just under 1%. Profits came
in meats, interest rates, softs, energies and stock indices,
with smaller losses in currencies and grains.
There were some trending prices and for the first time
in a number of months the last few days were not
characterized by abrupt reversals and that allowed for
a positive result.
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, 2013.
Item 4. Controls and Procedures
As of June 30, 2014 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, 2013.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
RECENT SALES OF UNREGISTERED SECURITIES A UNITS
Six months Six months
ended June 30, 2014 ended June 30,2013
Units Sold 0 0
Value of Units Sold $0 $0
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: August 14, 2014 By: Everest Asset Management, Inc.,
its General Partner
By:__/s/ Peter
Lamoureux_______________________________
Peter Lamoureux
President
32
