Item 1. Business
Everest Futures Fund, L.P. (the "Partnership") is a limited partnership organized on June 20, 1988 under the Iowa Uniform Limited Partnership Act. The business of the Partnership is the speculative trading of commodity futures contracts and other commodity interests, including forward contracts on foreign currencies (Commodity Interests) either directly or through investing in other, including subsidiary, partnerships, funds or other limited liability entities. The Partnership commenced its trading operations on February 1, 1989. Its General Partner is Everest Asset Management, Inc. (the "General Partner") a Delaware corporation organized in December, 1987.
The Partnership was initially organized on June 20, 1988 under the name Everest Energy Futures Fund, L.P. and its initial business was the speculative trading of Commodity Interests, with a particular emphasis on the trading of energy-related commodity interests. However, effective September 12, 1991, the Partnership changed its name to "Everest Futures Fund, L.P." and at the same time eliminated its energy concentration trading policy. The Partnership thereafter has traded futures contracts and options on futures contracts on a diversified portfolio of financial instruments and precious metals as well as forward contracts on currencies.
The initial public offering of the Partnership's Units of limited partnership interests (Units) pursuant to a registration statement on Form S-18 and Prospectus was declared effective and commenced on or about December 6, 1988. On February 1, 1989, the initial offering period for the Partnership was terminated, by which time the Net Asset Value of the Partnership was $2,140,315.74. Beginning February 2, 1989, an extended offering period commenced which terminated on July 31, 1989, by which time a total of 5,065.681 Units of Limited Partnership Interest were sold. Effective May, 1995 the Partnership ceased to report as a public offering. On July 1, 1995 the Partnership recommenced the offering of its Units as a Regulation D, Rule 506 private placement, which continues to the present with a total of 42,736.19 additional Units sold for $75,054,598 since July 1, 1995 through December 31, 2001.
During its operation, the Partnership has had various advisors. In December 1990, John W. Henry & Company, Inc. (JWH) began trading for the Partnership as one of the Partnership's trading advisors. In May 1994, JWH became the sole advisor to the Partnership. In March 1996, the Partnership transferred all of its assets to, and became the sole limited partner of, Everest Futures Fund II, L.P. (Everest II) and JWH began trading for Everest II. In July 2000, the Partnership redeemed approximately 50% of its assets from Everest II and allocated them to Trilogy Capital Management, LLC's (Trilogy) Barclay Futures Index Program (BFIP). The Partnership instructed Trilogy to trade its account using twice the leverage of Trilogy's un-leveraged portfolio to attempt to achieve a return greater than the return of the Index before fees and expenses. Effective as of the close of business August 31, 2000, the Partnership liquidated the balance of its investment in Everest II and opened a trading account directly with JWH. JWH has used its Financial and Metals Portfolio while trading for Everest II and the Partnership through June 30, 2001. Beginning July 1, 2001, JWH began trading its Strategic Allocation Program for the Partnership with a trading allocation of $40 million. Trilogy was terminated as trading advisor June 30, 2001. Effective September 1, 2001, Mount Lucas Management Corporation (MLM) was added as trading advisor with an initial allocation of $10 million. This allocation represented notional funding for the Partnership.
The Partnership clears all of its futures and options on futures trades through Cargill Investor Services, Inc. (CIS), its clearing broker, and all of its cash trading through CIS Financial Services, Inc. (CISFS), an affiliate of CIS.
On September 13, 1996 the Commission accepted a voluntary filing by the Partnership of a Form 10 - General Form for Registration of Securities, and public reporting of Units of the Partnership sold as a private placement commenced at that time and has continued to the present.
Upon ten days written notice, a Limited Partner may require the Partnership to redeem all or part of his Units effective as of the close of business (as determined by the General Partner) on the last day of any month at the Net Asset Value thereof on such date. Notwithstanding the above, pursuant to the Amended and Restated Agreement of Limited Partnership, the General Partner may, in its sole discretion, and on ten days' notice, require a Limited Partner to redeem all or part of his Units in the Partnership as of the end of any month. There are no additional charges to the Limited Partner at redemption. The Partnership's Amended and Restated Agreement of Limited Partnership contains a full description of redemption and distribution procedures.
Since commencing trading operations, the Partnership has engaged in the speculative trading of Commodity Interests and will continue to do so until its dissolution and liquidation, which will occur on the earlier of December 31, 2020 or the occurrence of any of the events set forth in Paragraph 4(a) of the Agreement of Limited Partnership. Such events are (i) an election to dissolve the Partnership made by over 50% of the Limited Partnership Units at least 90 days prior to dissolution, (ii) withdrawal, insolvency, or dissolution of the General Partner (unless a new general partner is substituted), (iii) decline in the Net Asset Value of the Partnership at the close of any business day to less than $300,000, or (iv) any event which will make it unlawful for the existence of the Partnership to be continued or requiring termination of the Partnership.
The address of the General Partner and the Partnership is 2280 West Tyler Street, Suite 105, Fairfield, Iowa 52556, and the telephone number is (641) 472-5500. The General Partner changed its name as of March 1, 1994 and amended its Certificate of Incorporation, with no other changes, accordingly. In accordance with the provisions of the Commodity Exchange Act and the rules of the National Futures Association (NFA), the General Partner is registered as a commodity pool operator and a commodity trading advisor, JWH and MLM are registered as commodity trading advisors and the Commodity Broker is registered as a futures commission merchant, each subject to regulation by the Commodity Futures Trading Commission (CFTC). Each is also a member of the NFA in such capacity.
The General Partner to the exclusion of the limited partners of the Partnership (the "Limited Partners"), manages and conducts the business of the Partnership. Thus the General Partner (i) selects and monitors the independent commodity trading advisor(s) and the Commodity Broker; (ii) allocates and/or reallocates assets of the Partnership to or from JWH, MLM and/or the advisor(s); (iii) determines if an advisor or commodity broker should be removed or replaced; (iv) negotiates management fees, incentive fees and brokerage commissions; (v) determines its own compensation with respect to management and administrative fees; and (vi) performs such other services as the Partnership may from time to time request, except that all trading decisions are made by JWH and MLM and not the General Partner. In addition, the General Partner selects the commodity broker(s) that will clear trades for the advisor(s). Cargill Investor Services, Inc. currently acts as Everest's commodity broker and CIS Financial Services, Inc., an affiliate of Cargill Investor Services, Inc., acts as Everest's currency dealer.
The General Partner is responsible for the preparation of monthly and annual reports to the Limited Partners; filing reports required by the CFTC, the NFA, the SEC and any other federal or state agencies having jurisdiction over the Partnership's operations; calculation of the Net Asset Value (meaning the total assets less total liabilities of the Partnership {for a more precise definition, see the Exhibit "Form 10 - General Form for Registration of Securities" incorporated by reference hereto}) and directing payment of the management and incentive fees payable to JWH and MLM or the advisor(s)under an advisory agreement(s) entered into with the commodity trading advisor(s).
Everest pays the Commodity Broker a brokerage commission charge equal to 0.5052% of the Partnership's Beginning Net Asset Value as of the beginning of each month (approximately 6.0625% annually). Monthly brokerage commissions will increase incrementally to 0.5208% (approximately 6.25% annually) as the trading allocation to MLM increases. Approximately 83% of this amount is rebated by the Commodity Broker to the General Partner. If there is a material change in Everest's brokerage commission structure, investors and Limited Partners will be informed in writing. The Commodity Broker may, in the future, increase the fee charged to Everest.
The General Partner in turn pays a portion of such amount to the Selling Agent and additional selling agents as selling commissions. In addition, the Partnership reimburses the General Partner for the actual organization and offering expenses advanced by it, not to exceed one percent of the Net Asset Value of Units sold. Organization and offering expenses shall mean all expenses incurred by the Partnership or the General Partner in connection with and in preparation to offer and distribute the Units to investors, including, but not limited to, expenses for traveling, printing, engraving, mailing, salaries of employees while engaged in sales activity, charges of transfer agents, registrars, trustees, escrow holder, depositories, experts, expenses of qualification of the sales of its securities under state law, including taxes and fees and accountants' and attorneys' fees.
Everest pays John W. Henry & Company, Inc., one of its current commodity trading advisors, a monthly management fee equal to 0.167% (approximately 2% annually) of Everest's month-end Allocated Assets, as defined, and a quarterly incentive fee equal to 20% (15% April 1, 1995 through October 1, 2000) of Everest's trading profits allocable to its trading exclusive of interest income on Allocated Assets, as defined. 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 Everest. Prior to October 1, 2000, the management fee paid to JWH was 4% annually.
MLM receives a monthly management fee of 0.0625% (0.75% annually) of the Partnership's month-end allocated assets as defined. As MLM uses the MLM Index-Unleveraged, they do not receive an incentive fee.
Trilogy received a monthly management fee equal to 0.075% (approximately 0.90% annually) of Everest's month-end allocated assets, as defined. Trilogy did not receive an incentive fee.
The Commodity Broker has agreed to pay Everest interest on Everest's assets (including open trade equity) deposited with it during a month at the average of 91-day U.S. Treasury Bills purchased by the Commodity Broker during each month. The Commodity Broker will retain all excess interest, if any, earned on Everest assets, above the amount of interest paid to Everest. The interest rate to be paid by the Commodity Broker to Everest is a negotiated rate which has been negotiated between the Commodity Broker and the General Partner. The actual interest income on Everest's assets earned by the Commodity Broker may be greater than or less than the negotiated rate to be paid by the Commodity Broker to Everest. The Commodity Broker will also be responsible for execution and clearance of futures contracts (and possibly certain other Commodity Interests).
A selling commission of 3% of the Net Asset Value of Units sold will be paid, unless waived in whole or in part by the General Partner, by the Limited Partners to Capital Management Partners, Inc. ("Capital") or the additional selling agents in connection with the sale of the Units. Capital is a CFTC-regulated introducing broker, an NFA member, and an affiliate of the General Partner. Capital is also registered with the National Association of Securities Dealers (NASD) as a broker dealer. The General Partner may pay up to 100% of the funds it receives from the Commodity Broker to Capital and the additional selling agents as additional selling commission.
The Partnership is obligated to pay its periodic operating expenses and extraordinary expenses. Although those expenses will vary depending on the Partnership's size, it is estimated that the periodic operating expenses will be approximately $65,000 annually. Extraordinary expenses for these purposes include expenses associated with significant non-recurring litigation including, but not limited to, class action suits and suits involving the indemnification provisions of the Agreement of Limited Partnership or any other agreement to which the Partnership is a party. By their nature, the dollar amount of extraordinary expenses cannot be estimated. All expenses shall be billed directly and paid for by the Partnership. The Partnership's operating expenses for the years 1997-2001 can be found in the table in Item 6 below.
Neither the Partnership nor the General Partner has any employees other than their officers and directors, all of whom are employees of affiliated companies of the Partnership and General Partner. Rather, the General Partner, in its capacity as a CFTC-regulated commodity pool operator, contracts the services of research, fund administration, client support (marketing) and management information systems and analysis to Capital. As of December 31, 2001 Capital had 11 employees.
The Partnership's business constitutes only one segment for financial reporting purposes; and the purpose of this limited partnership is to trade, buy, sell, spread or otherwise acquire, hold or dispose of Commodity Interests including futures contracts, forward contracts, physical commodities and related options thereon. The objective of the Partnership's business is appreciation of its assets through speculative trading in such Commodity Interests. Financial information about the Partnership's business, as of December 31, 2001 is set forth under Items 6 and 7 herein.
For a description of commodity trading and its regulation, see the Prospectus filed on Form S-18 and the Confidential Private Placement Memorandum filed as part of the Form 10 and included in the exhibits hereto.
The Current Offering
On July 1, 1995 the Partnership reopened for investment as a Regulation D, Rule 506 private placement offering an unlimited amount of limited partnership interests. On September 19, 1996 the Commission accepted a Form 10 - General Form for Registration of Securities submitted by the Partnership thereby making the Partnership a public reporting private placement offering. It also qualified the Partnership as a "publicly offered security" as defined in the Employee Retirement Income Security Act of 1974 (ERISA) rules permitted it to accept investment of an unlimited amount of plan assets as defined in ERISA. Hitherto, as a private placement the Partnership could accept ERISA plan assets representing no more than 25% of the total investment in the Partnership. The limited partnership interests are offered by the Selling Agent and additional selling agents with a minimum subscription amount of $26,000 (the minimum subscription amount for employee benefit plans and individual retirement accounts is $10,000).
Competition
JWH, MLM, and any other advisor(s) of the Partnership, its or their respective principals, affiliates and employees are free to trade for their own accounts and to manage other commodity accounts during the term of the Advisory Agreement and to use the same information and trading strategy which JWH and/or MLM obtains, produces or utilizes in the performance of services for the Partnership through its investment in Everest. To the extent that JWH or MLM recommends similar or identical trades to the Partnership and other accounts which it manages, the Partnership may compete with those accounts for the execution of the same or similar trades.
Other trading advisors who are not affiliated with the Partnership may utilize trading methods which are similar in some respects to those methods used by JWH, MLM, or any other future Partnership's advisor(s). These other trading advisors could also be competing with the Partnership for the same or similar trades as requested by the Partnership's advisor(s).
Item 2.
Item 2.	Properties
The Partnership does not utilize any physical properties in the conduct of its business. The General Partner uses the offices of the Selling Agent at no additional charge to the Partnership, to perform their administrative functions, and the Partnership uses the offices of the Selling Agent, again at no additional charge to the Partnership, as its principal administrative offices.
Item 3.
Item 3.	Legal Proceedings
The General Partner is not aware of any material pending legal proceedings to which the Partnership or the General Partner is a party or to which any of their assets is subject.
Item 4.
Item 4.	Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5.	Market for Registrant's Units & Related Security Holder Matters
(a) There is no established public market for the Units and none is expected to develop.
(b) As of December 31, 2001, there were 24,907.39 Units held by Limited Partners and 198.49 held by the General Partner. A total of 13,478.59 Units were redeemed by Limited Partners and 69.5 units were redeemed by the General Partner from January 1, 1999 to December 31, 2001. The Partnership's Fifth Amended and Restated Agreement of Limited Partnership contains a full description of redemption and distribution procedures.
(c) To date no distributions have been made to partners of the Partnership.
The Agreement of Limited Partnership does not provide for a regular or periodic cash distributions, but gives the General Partner sole discretion in determining what distributions, if any, the Partnership will make to its partners. The General Partner has not declared any such distributions to date, and does not currently intend to declare any such distributions.
Item 6.
Item 6.	Selected Financial Data
1997 1998 1999 2000	2001
(In thousands, except amounts per Unit)
1. Operating Revenues $7,337 $9,170 $(4,695) (186) 4,688 2. Income (Loss) from Continuing Operations 4,190 3,756 (9,713)(3,969 1,284 3. Income (Loss) Per Unit 240.0 594.80 (405.66)(133.98) 48.46 4. Total Assets 39,462 57,221 41,849 43,075 42,235 5. Long Term Obligations 0 0 0 0 0 6. Cash Dividend per Unit 0 0 0 0 0
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Liquidity and Capital Resources
Most U.S. commodity exchanges limit by regulations the amount of fluctuation in commodity futures contract prices during a single trading day. These regulations specify what are referred to as "daily price fluctuation limits" or "daily limits". The daily limits establish the maximum amount the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular commodity, no trades may be made at a price beyond the limit. Positions in the commodity could then be taken or liquidated only if traders are willing to effect trades at or within the limit during the period from trading on such day. Because the "daily limit" rule only governs price movement for a particular trading day, it does not limit losses. In the past, futures prices have moved the daily limit for numerous consecutive trading days and thereby prevented prompt liquidation of futures positions one side of the market, subjecting commodity futures traders holding such positions to substantial losses for those days.
It is also possible for an exchange or the CFTC to suspend trading in a particular contract, order immediate settlement of a particular contract, or direct that trading in a particular contract be for liquidation only.
For the year ended December 31, 2001, Limited Partners redeemed a total of 2,286.33 Units for $3,783,769 and the General Partner did not redeem any Units. For the year ended December 31, 2000, Limited Partners redeemed a total of 6,538.33 Units for $9,768,550 and the General Partner did not redeem any Units.
During 2001, investors purchased 1,288.52 Units (none of the units were purchased by the General Partner) for $2,101,548.
As of December 31, 2001, Everest had no credit risk exposure to a counterparty which is a foreign commodities exchange which was material. Everest trades on recognized global futures exchanges. In addition, over the counter contracts in the form of forward foreign currency transaction are traded by Everest. As of December 31, 2001, the Partnership had 4,245,024 on deposit at CISFS. CISFS does not deal in foreign exchange forwards, but acts as a broker, placing the trades immediately with large banks having assets in excess of $100 million. At the settlement date, all transactions with each of the banks are netted and any excess or deficit is received from or sent to the bank. All of the Partnership's foreign exchange transactions are transacted in US dollars.
See Footnote 5 of the Financial Statements for procedures established by the General Partner to monitor and minimize market and credit risks for the Partnership. The General Partner of Everest, reviews on a daily basis reports of Everest's performance, including monitoring of the daily net asset value of Everest. The financial situation of the Commodity Broker is monitored on a monthly basis to monitor specific credit risks. The Commodity Broker does not engage in proprietary trading and thus has no direct market exposure which provides the general partner with assurance that the Partnership, will not suffer trading losses through the Commodity Broker.
Results of Operations
The Partnership's assets were traded 50% by the John W. Henry & Company, Inc. Financial and Metals Portfolio (JWH) until June 30, 2001. Beginning July 1, 2001 The Partnership invested 100% of its cash position in the John W. Henry & Company, Inc. Strategic Allocation Program. The 50% allocation to Trilogy's Barclay Futures Index Program was terminated June 30, 2001.
In September the Partnership began an allocation to another futures index fund, the MLM Index Program unleveraged, managed by Mount Lucas Management Corporation (MLM) in Princeton, NJ.
At December 31, 2001 the Partnership had approximately $41.9 million in assets. JWH's allocation was approximately $40 million and MLM's was approximately $9.9 million.
For the year, the Partnership was negatively correlated to the equity indices. The Partnership was positive for the first and third quarters and negative for the second and fourth quarters. The S&P 500 was just the opposite. The Partnership had a positive result of 2.78% for the year, while the S&P 500 was negative 13.04%.
The Partnership recorded a gain of $4,275,321 or $163.15 per Unit for the first quarter of 2001. This compares to a loss of $5,502,945 or $200.52 per Unit for the first quarter of 2000.
The Partnership continued to employ two different trading strategies for the first quarter 2001. The Fund was down 1.08% in January. The John W. Henry & Company Financial and Metals Portfolio (JWH) was profitable for the month due to interest rate positions. A significant portion of the positive returns occurred during the last days of the month surrounding the Fed cut in rates on January 21st. In spite of the unusual action of two 50 basis point rate cuts by the Fed in a single month, bond prices actually declined by just over 2 points for January. All the remaining sections traded, currencies, non-US stock indices and metals, incurred losses. The Barclay Futures Index Program (BFIP) had an allocation of approximately 50% of the Fund's assets for the first quarter 2001. In January the Index had a decline for the Fund of 6.03%. The largest losses came in the energies and grains and overall six of the seven sub-indexes (or sectors) were negative. The only exception was profits in softs, especially sugar. All in all, the Partnership posted a loss of $455,012 or $17.43 per Unit in January.
The Fund was up 0.78% in February. The JWH allocation was again positive with gains in short term interest rates. The short term rates reacted to central bank easing and the massive rally in the Japanese government Bond as the Japanese economy showed signs of sputtering, realized gains. After eliminating their zero interest rate policy last August because of the belief that a recovery was around the corner, the Bank of Japan is again following a monetary policy of easing as rates were brought down 15 basis points. The Japanese stock market reacted and the Nikkei stock index hit a 15 year low during February. Currencies suffered losses for the month as they were affected by a weakening in the euro, which offset some of the earlier gains from the beginning of the year. Late in the month, the euro tumbled to two-month lows against the dollar in the wake of Turkey's lira currency float. Market concerns about European bank exposure to Turkish assets helped push the euro, already trending lower during the month, to fresh troughs. Metals were slightly unprofitable for the month. The BFIP allocation of the Fund lost 1.35%. The passive index had losses in metals and currencies and profits in meats, softs, and energies. Overall, the Partnership posted a gain of $318,381 or $12.51 per Unit in February.
The Fund was up 10.42% in March. The JWH program was up 12.88% with all four sectors being profitable. Currencies led the way due to continued weakness in the Japanese yen, although the other currencies were also profitable. Declining interest rates also helped for the month, led by the Euro Bund and the Japanese government bond. Many attributed the strength in bond prices to be the result of the 'flight to safety' due to continued weakness in the equity markets. Stock index trading was mixed and there was a small gain in metals. The BFIP gained back its losses from January and February with a positive 7.49% result in March. The gains came in the softs, metals, grains, currencies and energies. Smaller losses came in meats and financials. Overall, the Partnership posted a gain of $4,411,952 or $168.07 per Unit in March.
The Partnership recorded a loss of $3,358,859 or $128.90 per Unit for the second quarter of 2001. This compares to a loss of $4,221,518 or $151.95 per Unit for the second quarter of 2000.
The Partnership continued to employ two different trading advisors for the second quarter 2001. The Fund had a loss of 7.31% in April as both advisors suffered losses. The JWH firm had reversals of the trends that had created profits in the first quarter, mostly in currencies and interest rates. The Barclay Futures Index Program (BFIP) gave back most of its gains from March with losses in six out of seven sectors traded. The Partnership recorded a loss of $3,394,496 or $130.21 per unit in April.
May was a positive month for the Fund (up 1.51%), with both JWH and the BFIP showing profits. On the JWH side, currencies led the way with the dollar showing strength against the Euro and Swiss franc. Profits were also seen in the British pound. Interest rate positions were slightly negative for JWH, as were overseas stock indexes and metals. The BFIP had gains in 5 out of 7 sectors traded. They were, in this order, softs, energies, grains, financials and currencies. The two losing sectors were metals and meats. The Partnership recorded a gain of $641,062 or $24.92 per unit in May.
June saw a loss of 1.41% for the Fund. The JWH programs were down 4.29% coming from losses in interest rate and currency sectors. However, the JWH losses were somewhat offset by the BFIP gain of 1.92% coming in six of their seven sectors traded. The largest gain for BFIP came in softs, following by metals and energies. The Partnership recorded a loss of $605,424 or $23.61 per Unit in June.
The Partnership recorded a gain of $2,164,094 or $84.89 per Unit for the third quarter of 2001. This compares to a loss of $1,597,603 or $58.14 per Unit for the third quarter of 2000.
At September 30, 2001, John W. Henry & Company, Inc. (JWH) was managing approximately $42 million in allocated assets for the Partnership, and Mount Lucas Management Corporation's MLM Index (MLM) was managing approximately $10 million in allocated assets. As of September 30, the Partnership had approximately $44 million in assets.
In July, the Partnership had a loss of 3.92%. The JWH Strategic Allocation Program replaced the JWH Financial and Metals Program beginning in July. The month was one of transition, especially for the currency markets, with a key reversal in the dollar's upward movement and growing talk that the dollar trend may be reaching an end. The currency sector under performed, while diversified programs had more modest declines.
In July the MLM Index Program had not yet begun trading. The Partnership had a loss of 1,651,375 or $64.87 per Unit in July.
In August, the Partnership had a gain of 5.63%. The monthly performance was dominated by the active behavior of the central banks, with easing by the Fed, the Bank of Japan, and the European Central Bank (ECB). These actions drove trends in interest rates and currencies. The most significant gains came in European interest rates and the dollar/Euro exchange rate.
The MLM Program did not trade in August. The Partnership had a gain of $2,282,136 or $89.45 per Unit in August.
In September, the Partnership had a gain of 3.59%. The JWH SAP Program had a gain of 3.69%, making profits in the global bond markets. Bond prices rose as investors came out of equities and into bonds after the September 11th attacks on America. Profits were made in precious metals, where prices rose as they often do in a crisis. Profits were also made in overseas stock indices, which tended to sell off as a reaction to the economic uncertainties of the month.
The MLM Index Program received its first allocation in the month of September and posted a gain of 0.67%. The Partnership recorded a gain of $1,533,334 or $60.16 per Unit in September.
The Partnership had JWH's Strategic Allocation (SAP) program for its core investment of approximately $44 million at the beginning of the fourth quarter. In addition, the Partnership had a $10 million notional allocation to the MLM Index Program (unleveraged).
In October JWH SAP had a profit of 3.94%, mostly from gains in the interest rate sector and energies. The MLM overlay program was also slightly positive at 0.31% overall. The Partnership was up 3.82% for the month.
In November the Partnership had a loss of 14.72%. At JWH losses were concentrated in the fixed-income markets. Bonds had rallied much of the year, but this rally was reversed in November with one of the sharpest sell offs in decades. Given the previous strength in fixed income trends, these positions dominated risk exposure and there were no trends in other markets to offset the interest rate losses. The MLM Index Program (unleveraged) had losses in five out of seven sectors traded. As sentiment switched from prolonged recession to swift recovery, commodity and bond markets were driven against the trends.
In December the Partnership recovered some of November's loss with a gain of 8.35%. JWH's gain was 8.61%, primarily from currencies, especially the Japanese yen. Although profits were posted in the European and North American bond positions with new trends toward higher rates, the interest rate sector was down for the month due to a loss in the Japanese 10 year bond. The MLM had a gain of 0.48% from softs, grains, and currencies.
Overall, the Partnership had a loss of 4.07% for the fourth quarter.
The Partnership ended the year with gain of $1,283,739.
Despite a robust positive 20.61% for the fourth quarter, the Partnership had a losing year in 2000. The lack of trends in the markets traded by JWH brought a decline through the month of September, which itself was carried over from the year 1999. Due to the fact that JWH had exceeded its worst draw down, its longest draw down and its previous worst 12, 18, and 24 month performance, the General Partner reallocated approximately 50% of the Partnership's assets to the Barclay Futures Index Program effective August 1, 2000. This resulted in better results for August and September than the Partnership would have had with JWH, as that firm continued to struggle. However, JWH had a very strong fourth quarter, while the BFIP was essentially flat. This limited the Fund's recovery.
The first quarter saw losses in trading from currencies and global interest rates. The period saw large capital shifts out of the U.S. dollar and overall currency destabilization.
The second quarter saw mixed results, with profits in April exceeded by losses in May and June. Early in the quarter, volatility in stocks led to a stronger U.S. dollar versus the euro, and profitability for the Partnership. Later, however, mixed inflationary signals set the scene for the two major trend reversals: the U.S. interest rate markets headed lower and the euro abruptly reversed its long term downtrend versus the dollar. The concentration of trading losses was again in the euro for the end of the second quarter.
The third quarter's losses were essentially half of what they would have been had the Partnership not allocated approximately 50% of its assets away from JWH to the Barclay Futures Index Program. The BFIP was up 1.77% and JWH was down 8.69% for the quarter. JWH continued to struggle with interest rates and currency losses, some due to European Central Bank intervention to boost the euro. The BFIP gained overall for the two months they traded, mostly coming in the energy sector.
The fourth quarter saw large gains by JWH and slightly negative return from the BFIP. JWH had profits in currencies and interest rates. Despite a positive 20.6% fourth quarter, the Partnership finished the year with a loss of $3,969,456.
The Partnership experienced a disappointing year in 1999. John W. Henry & Company, Inc (JWH), the trading advisor to the Fund, experienced the most difficult performance year in its history. A lack of sustained price movements coupled with abrupt trend reversals in many market sectors resulted in a very difficult trading environment. The forces that supported strong returns in the equity markets such as strong consumer confidence and the perception of economic equilibrium caused volatile, sideways price patterns in the futures markets. This type of price movement is extremely difficult for long-term trend followers such as JWH.
The first quarter was marked by the advent of the newly formed Euro currency. In March, the conflict in Kosovo led to the U.S. dollar gaining dramatically on the Euro and Swiss franc. As the conflict in Kosovo escalated, the crisis-related selling of these two currencies continued, resulting in profits for the Partnership. However, erratic markets in interest rates in Europe and the Far East along with agricultural markets created losses.
The second quarter was the most profitable for the Partnership. Highlights included the rising Nikkei and S&P 500 stock indices and the continued rise of the dollar relative to the Euro and Swiss franc. During May, the U.K. rendered its decision to sell over 50% of its gold reserves. This drove gold prices lower and the Partnership's short positions accrued profits. Short U.S. and European interest rate positions performed well as the Federal Reserve increased the discount rate a one fourth point in June.
The third quarter was the most difficult quarter for the Partnership. As the crisis in Kosovo began to abate, the Partnership's currency positions in the Euro and Swiss franc quickly reversed and open trade profits were reduced dramatically. Despite another one fourth point interest rate increase in August, short positions in the U.S. interest rate sector suffered. In the final week of September, 15 European Central Banks announced that they had decided to stop selling gold for the next five years. Subsequently, gold prices rose a staggering $50/ounce and handed gold sellers such as the Partnership a significant loss.
After the final interest rate increase in October, yields on the U.S. 30 year bond moved from 6.4% to 6.1% and up to 6.5% in the fourth quarter further emphasizing the difficult trading year. Similar trading patterns occurred in offshore interest rates which in turn led to negative performance. The Japanese yen and crude oil helped offset these losses as their positive trends continued. The Partnership ended the year with a loss of $9,712,984.
Since the commencement of trading on February 1, 1989 the Partnership has experienced a cumulative gain of 69.94% through December 31, 2001. For further discussion and analysis of financial condition please refer to the Notes to the Combined Financial Statements attached hereto.
Inflation
Inflation does have an effect on commodity prices and the volatility of commodity markets; however, inflation is not expected to have an adverse effect on the Partnership's operations or assets.
Item 7(A). Quantitative and Qualitative Disclosures About Market Risk
Introduction
Past Results Are Not Necessarily Indicative of Future Performance
The Partnership is a speculative commodity pool. The market sensitive instruments held by it are acquired for speculative trading purposes, and all or substantially all of the Partnership's assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Partnership's main line of business.
Market movements result in frequent changes in the fair market value of the Partnership's open positions and, consequently, in its earnings and cash flow. The Partnership's market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments, the diversification effects among the Partnership's open positions and the liquidity of the markets in which it trades.
The Partnership can acquire and/or liquidate both long and short positions in a wide range of different financial and metals markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Partnership's past performance is not necessarily indicative of its future results.
Value at Risk is a measure of the maximum amount which the Partnership could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership's speculative trading and the recurrence in the markets traded by the Partnership of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Partnership's experience to date (i.e., "risk of ruin"). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification included in this section should not be considered to constitute any assurance or representation that the Partnership's losses in any market sector will be limited to Value at Risk or by the Partnership's attempts to manage its market risk.
Standard of Materiality
Materiality as used in this section, "Qualitative and Quantitative Disclosures About Market Risk," is based on an assessment of reasonably possible market movements and the potential losses caused by such movements, taking into account the leverage, optionality and multiplier features of the Partnership's market sensitive instruments.
Quantifying the Partnership's Trading Value at Risk
Qualitative Forward-Looking Statements
The following quantitative disclosures regarding the Partnership's market risk exposures contain "forward-looking statements" within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934). All quantitative disclosures in this section are deemed to be forward-looking statements for purposes of the safe harbor, except for statements of historical fact.
The Partnership's risk exposure in the various market sectors traded by the commodity trading advisor is quantified below in terms of Value at Risk. Due to the Partnership's mark-to-market accounting, any loss in the fair value of the Partnership's open positions is directly reflected in the Partnership's earnings (realized or unrealized) and cash flow (at least in the case of exchange-traded contracts in which profits and losses on open positions are settled daily through variation margin).
Exchange maintenance margin requirements have been used by the Partnership as the measure of its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day intervals. The maintenance margin levels are established by dealers and exchanges using historical price studies as well as an assessment of current market volatility (including the implied volatility of the options on a given futures contract) and economic fundamentals to provide a probabilistic estimate of the maximum expected near-term one-day price fluctuation. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component which is not relevant to Value at Risk.
In the case of market sensitive instruments which are not exchange traded (almost exclusively currencies in the case of the Partnership), the margin requirements for the equivalent futures positions have been used as Value at Risk. In those rare cases in which a futures-equivalent margin is not available, dealers' margins have been used.
In quantifying the Partnership's Value at Risk, 100% positive correlation in the different positions held in each market risk category has been assumed. Consequently, the margin requirements applicable to the open contracts have simply been aggregated to determine each trading category's aggregate Value at Risk. The diversification effects resulting from the fact that the Partnership's positions are rarely, if ever, 100% positively correlated have not been reflected.
The Partnership's Trading Value at Risk in Different Market Sectors
The following table indicates the trading Value at Risk associated with the Partnership's open positions by market category as of December 31, 2001. All open position trading risk exposures of the Partnership have been included in calculating the figures set forth below. As of December 31, 2001, the Partnership's total capitalization was approximately $41.9 million.
December 31, 2001
% of Total Market Sector Value at Risk Capitalization
Interest Rates $ 0.98 million 2.34% Currencies $ 2.16 million 5.16% Stock Indices $ 0.46 million 1.10% Precious Metals $ 0.41 million 0.98% Commodities $ 0.45 million 1.07% Energies $ 1.37 million 3.27%
Total $ 5.83 million 13.92%
Material Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the Partnership is typically many times the applicable maintenance margin requirement (maintenance margin requirements generally ranging between approximately 1% and 10% of contract face value) as well as many times the capitalization of the Partnership. The magnitude of the Partnership's open positions creates a "risk of ruin" not typically found in most other investment vehicles. Because of the size of its positions, certain market conditions - unusual, but historically recurring from time to time - could cause the Partnership to incur severe losses over a short period of time. The foregoing Value at Risk table - as well as the past performance of the Partnership - give no indication of this "risk of ruin."
Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash balances not needed for margin. However, these balances (as well as any market risk they represent) are immaterial.
The Partnership holds a portion of its assets in cash on deposit with CIS and CISFS with the remainder on deposit with Horizon Cash Management, LLC. (Horizon) in short term, highly liquid investments. The Partnership has cash flow risk on these cash deposits because if interest rates decline, so will the interest paid out by CIS and CISFS at the 90-day Treasury bill rate. In addition, should short term interest rates decline, so will the interest earnings for assets on deposit with Horizon. The Partnership assets managed by Horizon are deposited in an account in the custodial department of Brown Brothers Harriman & Co., and invested in U.S. government securities and other interest-bearing obligations at the direction of Horizon. Horizon is responsible for the investment management of the Partnership's assets not deposited with CIS as margin monies or held in partnership operating accounts. Horizon is registered with the Securities and Exchange Commission (SEC) as an investment adviser. Horizon may invest in U.S. government securities and other instruments as permitted by the Agreement. Horizon receives an annual fee of 0.25% payable monthly on the assets it manages. However, Horizon only receives its service fee if the accrued monthly interest income earned on the Partnership's assets managed by Horizon exceeds the 91-day U.S. Treasury Bill rate. As of December 31, 2001, the Partnership had approximately $39.7 million in cash on deposit with CIS, CISFS and Horizon.
Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's market risk exposures - except for (i) those disclosures that are statements of historical fact and (ii) the descriptions of how the Partnership and the Trading Advisor manage the Partnership's primary market risk exposures - constitute forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. The Partnership's primary market risk exposures as well as the strategies used and to be used by the Trading Advisor for managing such exposures are subject to numerous uncertainties, contingencies and risks, any one of which could cause the actual results of the Partnership's risk controls to differ materially from the objectives of such strategies. Government interventions, defaults and expropriations, illiquid markets, the emergence of dominant fundamental factors, political upheavals, changes in historical price relationships, an influx of new market participants, increased regulation and many other factors could result in material losses as well as in material changes to the risk exposures and the risk management strategies of the Partnership. There can be no assurance that the Partnership's current market exposure and/or risk management strategies will not change materially or that any such strategies will be effective in either the short- or long-term. Investors must be prepared to lose all or substantially all of their investment in the Partnership.
The following were the primary trading risk exposures of the Partnership as of December 31, 2001, by market sector.
Interest Rates. Interest rate risk is a major market exposure of the Partnership. Interest rate movements directly affect the price of the sovereign bond positions held by the Partnership and indirectly the value of its stock index and currency positions. Interest rate movements in one country as well as relative interest rate movements between countries materially impact the Partnership's profitability. The Partnership's primary interest rate exposure is to interest rate fluctuations in the United States and the other G-7 countries. However, the Partnership also takes positions in the government debt of smaller nations - e.g., Australia. The General Partner anticipates that G-7 interest rates will remain the primary market exposure of the Partnership for the foreseeable future. The changes in interest rates which have the most effect on the Partnership are changes in long-term, as opposed to short-term, rates. Most of the speculative positions held by the Partnership are in medium to long-term instruments. However, since February 2000, the JWH program added a European short rate, the Euribor, which is closely tied to the actions of the European Central Bank. This was done to add short term interest rate diversification.
Currencies. The Partnership's currency exposure is to exchange rate fluctuations, primarily fluctuations which disrupt the historical pricing relationships between different currencies and currency pairs. These fluctuations are influenced by interest rate changes as well as political and general economic conditions. The Partnership trades in a large number of currencies, including cross-rates - i.e., positions between two currencies other than the U.S. dollar. However, the Partnership's major exposures have typically been in the dollar/yen, dollar/Euro, dollar/Swiss franc, dollar/Australian dollar and dollar/pound positions. The General Partner does not anticipate that the risk profile of the Partnership's currency sector will change significantly in the future. The currency trading Value at Risk figure includes foreign margin amounts converted into U.S. dollars with an incremental adjustment to reflect the exchange rate risk inherent to the dollar-based Partnership in expressing Value at Risk in a functional currency other than dollars.
Stock Indices. The Partnership's primary equity exposure is to equity price risk in the G-7 countries. The stock index futures traded by the Partnership are by law limited to futures on broadly based indices. As of December 31, 2001, the Partnership had no exposure in stock index futures. Ordinarily the primary exposures are in the FTSE (England), Nikkei (Japan) and All Ordinaries (Australia) stock indices. However, in February 2000, the JWH firm added the German DAX Index Futures. The General Partner anticipates little trading in non-G-7 stock indices. The Partnership is primarily exposed to the risk of adverse price trends or static markets in the major U.S., European and Japanese indices. (Static markets would not cause major market changes but would make it difficult for the Partnership to avoid being "whipsawed" into numerous small losses.)
Metals. The Partnership's metals market exposure is to fluctuations in the price of gold and silver (precious metals) and the base metals of copper, aluminum, zinc, and nickel at JWH. At MLM the exposure is gold, silver and copper.
Commodities. The Partnership's exposure to commodities from MLM includes corn, soybeans, soybean meal, soybean oil, wheat, and the softs of coffee, cotton, and sugar. The program trades live cattle as well. JWH also trades a full complement of commodities in the SAP strategy.
Energy. The Partnership's exposure to energy contracts on the MLM side is heating oil, unleaded gasoline, crude oil and natural gas. The Partnership also has energy exposure from the JWH SAP strategy.
Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following were the only non-trading risk exposures of the Partnership as of December 31, 2001.
Foreign Currency Balances. The Partnership's primary foreign currency balances are in Japanese yen, Euros, British pounds and Australian dollars. The Partnership controls the non-trading risk of these balances by regularly converting these balances back into dollars (no less frequently than twice a month).
Cash Position. The Partnership holds a portion of its assets in cash at CIS and CISFS, earning interest at 90% of the average 90-day Treasury bill rate for Treasury bills issued during each month. The remainder is held at Horizon in short term liquid investments.
Qualitative Disclosures Regarding Means of Managing Risk Exposure
The General Partner monitors the Partnership's performance and the concentration of its open positions, and consults with the commodity trading advisor concerning the Partnership's overall risk profile. If the General Partner felt it necessary to do so, the General Partner could require the commodity trading advisor to close out individual positions as well as entire programs traded on behalf of the Partnership. However, any such intervention would be a highly unusual event. The General Partner primarily relies on the commodity trading advisor's own risk control policies while maintaining a general supervisory overview of the Partnership's market risk exposures.
Risk Management
JWH attempts to control risk in all aspects of the investment Process - from confirmation of a trend to determining the optimal exposure in a given market, and to money management issues such as the startup or upgrade of investor accounts. JWH double checks the accuracy of market data, and will not trade a market without multiple price sources for analytical input. In constructing a portfolio, JWH seeks to control overall risk as well as the risk of any one position, and JWH trades only markets that have been identified as having positive performance characteristics. Trading discipline requires plans for the exit of a market as well as for entry. JWH factors the point of exit into the decision to enter (stop loss). The size of JWH's positions in a particular market is not a matter of how large a return can be generated but of how much risk it is willing to take relative to that expected return.
To attempt to reduce the risk of volatility while maintaining the potential for excellent performance, proprietary research is conducted on an ongoing basis to refine the JWH investment strategies. Research may suggest substitution of alternative investment methodologies with respect to particular contracts; this may occur, for example, when the testing of a new methodology has indicated that its use might have resulted in different historical performance. In addition, risk management research and analysis may suggest modifications regarding the relative weighting among various contracts, the addition or deletion of particular contracts from a program, or a change in position size in relation to account equity. The weighting of capital committed to various markets in the investment programs is dynamic, and JWH may vary the weighting at its discretion as market conditions, liquidity, position limit considerations and other factors warrant.
JWH may determine that risks arise when markets are illiquid or erratic, such as may occur cyclically during holiday seasons, or on the basis of irregularly occurring market events. In such cases, JWH at its sole discretion may override computer-generated signals and may at times use discretion in the application of its quantitative models, which may affect performance positively or negatively.
Adjustments in position size in relation to account equity have been and continue to be an integral part of JWH's investment strategy. At its discretion, JWH may adjust the size of a position in relation to equity in certain markets or entire programs. Such adjustments may be made at certain times for some programs but not for others. Factors which may affect the decision to adjust the size of a position in relation to account equity include ongoing research, program volatility, assessments of current market volatility and risk exposure, subjective judgment, and evaluation of these and other general market conditions.
The Barclay Futures Index Program is an attempt to replicate the results of the Barclay Futures Index. It is implemented by Trilogy Capital Management, LLC in Princeton, New Jersey.
The Barclay Futures Index (the Index) is a passive benchmark designed to capture and represent the returns inherent in commercial futures markets. The Index invests in 25 of the most liquid, U.S. exchange-traded futures markets, categorized by the following sectors: currencies, energy, fixed income, grains, metals, meats, and softs. All markets are equally weighted and there is no leverage. Though the Index is passive, the positions taken by the Index will vary, from long to short and have different contract months, for two reasons.
First, in order to capture returns through price movements, the Index employs a momentum-following process and takes long or short positions in each market. Using the closing prices of the nearby contract month, a daily Unit Asset Value (UAV) is derived for each market. Market positions are generated after the system compares the various markets' UAV to the prior 13-week moving average UAVs for those markets. For markets in which the current UAV is higher than the moving average, the system indicates a long signal and if the UAV is lower, it indicates a short signal. The benchmark can be described as momentum-following in that its objective is to capture returns in those markets that are exhibiting a sustained movement in price away from their historical average.
Second, in order to deal effectively with the relatively short duration of futures contracts, the Index must implement a periodic roll strategy. Current month contracts are rolled when the open interest in the deferred month contract exceeds that of the current month. This method closely follows the activity of hedgers and maintains exposure in the most liquid contract month.
The objective of the Barclay Futures Index Program is to replicate the return distribution of the Barclay Futures Index. In order to achieve this objective, Trilogy may have to alter the weightings of markets in the Index, from the equal-weighted assumption employed by the Index, due to the fact that futures contracts must trade in round lots, and the various contract amounts are not the same for each market.
The trading rules employed by Trilogy can be described as momentum following in that they seek to capture returns associated with short to medium-term price trends. The current prices of the securities in the program are compared to recent historical prices and depending on that relationship, the system generates a long or short trading signal.
Trilogy also employs a set of rules that define its risk control and asset allocation systems. Trilogy may vary its risk control systems based on market conditions, such as volatility, and will manage those controls according to each account's specific risk parameters. Some of the risk control measures utilized by Trilogy include, but are not limited to, margin and leverage limits, standard and semi-deviation of returns, maximum negative returns, and maximum peak to trough draw-down. Trilogy employs a non-linear, dynamic asset allocation method, which incorporates the risk control measures previously described, to determine the optimal mix of assets which is expected to achieve an attractive return distribution.
The trading and risk management systems employed by Trilogy are predominantly systematic and disciplined and involve very little human discretion. However, human discretion may be used to manage positions during periods of unusual market activity or when Trilogy believes the risk parameters should be increased or reduced (within the predefined limits), or in decisions involving the number of futures contracts required to be purchased or sold in order to arrive at the specified target allocation prescribed by the asset allocation program.
Mount Lucas Management Corporation's MLM Index is a recognized benchmark of the returns available to a futures investor. It is based on daily closing prices of the nearby contract month of a portfolio of the most active futures markets. Only highly liquid U.S. futures markets are currently included in the Index; the choice of markets for a calendar year is made in the December preceding the start of the year, and markets are not added to or deleted from the Index during a year. If a commodity is traded on more than one futures exchange, only the one with the largest open interest is included in the Index. For example, Chicago Board of Trade wheat has larger open interest than Kansas City Board of Trade wheat; consequently, Chicago Board of Trade wheat is included in the Index but Kansas City wheat is not.
The MLM Index trades the following commodities: Chicago corn, Chicago soybeans, Chicago soybean meal, Chicago soybean oil, Chicago wheat, 5-year T-Notes, 10-year T-Notes, Treasury bonds, heating oil, natural gas, crude oil, unleaded gas, live cattle, New York gold, New York copper, New York silver, Australian Dollar, British Pound, Canadian Dollar, Swiss Franc, Japanese Yen, Euro Currency, New York coffee, New York cotton, and New York sugar.
All the programs that MLM offers are highly systematized and limit the extent to which judgmental, discretionary decisions influence trading. Consequently, the programs may have less trading success in markets in which underlying economic conditions have undergone rapid change. MLM believes however that such systematic methods are in the interest of the client who focuses on long-term performance. MLM reserves the right to refine or modify its programs, including, but not limited to, adding or deleting commodities from the portfolio without approval by, or prior notice to, the client.
Item 8.
Item 8.	Financial Statements and Supplementary Data
Reference is made to the financial statements and the notes thereto attached to this report.
Item 9.
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item III
Item 10.
Item 10.	Directors and Executive Officers of the Registrant.
The General Partner, Everest Asset Management, Inc., is the sole general partner and commodity pool operator of the Partnership. It is a Delaware corporation incorporated in 1987, is and has been registered with the CFTC as a commodity pool operator since July 1, 1988 and is and has been a member of the National Futures Association since that date. Its address is 2280 West Tyler Street, Suite 105, Fairfield, Iowa 52556 and its telephone number is (641) 472-5500.
The officers and directors of the General Partner as of December 31, 2001 are listed below:
Peter Lamoureux. Mr. Lamoureux, (born in 1950), has been President, Treasurer and Secretary of the General Partner since November 1996. He joined the General Partner and Capital Management Partners, Inc., a selling agent and affiliate of the Partnership, in 1991 and has had primary responsibility for Partnership syndication for the past two years. Prior to joining the General Partner, Mr. Lamoureux was Manager of Refined Products with United Fuels International, Inc., an energy brokerage firm in Waltham, Massachusetts. He received his B.S. in Education from Rhode Island College, R.I.
Teresa Prange. Ms. Teresa Prange (born in 1954) became Chief Financial Officer of the General Partner in 1993. She joined Capital Management Partners, Inc., a selling agent and affiliate of the Partnership, in March 1992 where she was responsible for various financial, accounting and back office activities. Prior to this, she was self-employed as a copyrighting research consultant from October 1991 through March 1992. From 1987 through October 1991, Ms. Prange worked as an accountant for Zimmerman Capital Group. She possesses a B.A. and M.B.A. from M.I.U., Fairfield, Iowa and became a Certified Public Accountant in 1988.
Janet A. Mullen. Ms. Mullen, (born in 1948), became Vice President of Everest in August 2000. She joined Everest in October 1993 with responsibility for fund administration, investor services, and certain compliance and regulatory functions. Prior to joining Everest, Ms. Mullen was associated with Zimmerman Capital Group (ZCG) from February 1985 to February 1993, holding positions in the accounting, legal, insurance, and property management departments. She was self-employed as an accountant from February 1993 to October 1993 for ZCG and other clients. Ms. Mullen graduated cum laude from Indiana State University and received an M.S. degree from there in 1975.
Steven L. Foster. Mr. Foster, (born in 1948), has been associated with the General Partner since 1987, initially as its Chief Executive Officer and a director and since 1991 as a director. His term of office as director is annual. Since 1987, Mr. Foster has been a director of Capital Management Partners, Inc. Mr. Foster has served as Executive Vice President of United Fuels International, Inc., an oil brokerage firm based in Waltham, Massachusetts, since 1980. From 1990 to 1994, he served as President of Jillian's Entertainment Corp. and now serves as Chairman of the Board. During 1978-1979, Mr. Foster served as President of Spin Off, Inc., a Boston based entertainment firm. From May 1977 until June 1978, Mr. Foster served as a law clerk and from July 1978 until May 1979 as an attorney with the firm of Gordon, Hurwitz, Butowski, Baker, Weitzen and Shalov in New York City. Mr. Foster received his J.D. from Boston University, graduating Magna Cum Laude in 1978. Mr. Foster received his B.A. degree from Brandeis University.
Steven L. Rubin. Mr. Rubin, (born in 1952), has been associated with the General Partner as a director since 1987. His term of office as director is annual. Since 1987, Mr. Rubin has been a director of Capital Management Partners, Inc. Mr. Rubin has served as President of United Fuels International, Inc., an oil brokerage firm based in Waltham, Massachusetts, since 1980. United Fuels International's affiliated companies include: United Crude Oil, Inc. based in Westport, Connecticut; United Crude U.K. based in London; and United Fuels International. Mr. Rubin served for one year as an oil broker with Amerex Oil Associates in Livingston Manor, New York. Mr. Rubin is a graduate of Brown University.
The General Partner does not trade commodities for its own account but its principals may. Because of their confidential nature, records of such trading will not be available to Limited Partners for inspection.
There have been no material criminal, civil or administrative actions during the preceding five years or ever against the General Partner or its principals.
Item 11.
Item 11. Executive Compensation.
The Partnership has no directors or executive officers. As a limited partnership, the business of the Partnership is managed by its General Partner which is responsible for the administration of the business affairs of the Partnership and receives the compensation described in Item 1 "Business" hereof. The officers and directors of the General Partner receive no compensation from the Partnership for acting in their respective capacities with the General Partner.
Item 12.
Item 12. Security Ownership of Certain Owners and Management.
(a) As of December 31, 2001 the following persons were known to the Partnership to own beneficially more than 5% of the outstanding Units:
Title of Name & Address Amount & Nature Percent Class of Beneficial Owner of Beneficial Interest of Class
Units W. Duke Kimbrell 	3,595.80 Units 14.32% P.O. Drawer 1787 Gastonia, NC 28053
Units Pamela K. Warlick Trust 	4,121.20 Units 16.42% P.O. Box 995 Gastonia, NC 28052
Units Shepard C. Kimbrell Trust 4,694.90 Units 18.70% P.O. Box 995 Gastonia, NC 28052
Units SSIHM Charitable Trust	2,973.96 Units 11.85% P. O. Box 180 Monroe, MI 48161
(b) As of December 31, 2001, the General Partner beneficially owned 198.49 Units or approximately 0.79% of the outstanding Units of the Partnership. Mr. Peter Lamoureux, President of the General Partner owned 17.18697 Units or 0.068% of the outstanding Units.
(c) As of December 31, 2001, no arrangements were known to the Partnership, including no pledge by any person of Units of the Partnership or shares of the General Partner or the affiliates of the General Partners, such that a change in control of the Partnership may occur at a subsequent date.
Item 13.
Item 13. Certain Relationships and Related Transactions.
(a) None other than the compensation arrangements described herein.
(b) None.
(c) None.
(d) The Partnership filed Registration Statements on Form S-18 and Form 10, therefore this information is not required to be included.
Part IV
Item 14.
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
(a) The following documents are included herein:
(1) Financial Statements:
	a. 	Independent Auditors Report.
b. Statements of Financial Condition as of December 31, 2001 and 2000.
c.	Statements of Operations, Statements of Changes in Partners' Equity, and Statements of Cash Flows for the years ended December 31, 2001, 2000, and 1999.
d.	Notes to Financial Statements.
e.	Schedule of Investments as of December 31, 2001.
(2) All financial statement schedules have been omitted because the information required by the schedules not applicable, or because the information required is contained in the financial statements included herein or the notes thereto.
(3) Exhibits:
See the Index to Exhibits annexed hereto.
(b) Reports of Form 8-K:
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date:	March ______ 2002		Everest Futures Fund, L.P.
By: Everest Asset Management, Inc. (General Partner)
By: /s/ Peter Lamoureux Peter Lamoureux, President Secretary and Treasurer
By: /s/ Teresa Prange Teresa Prange, Chief Financial Officer
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 Partnership and in the capacities and on the date indicated.
Date:	March ______________, 2002
By: /s/ Steven Rubin By: /s/ Peter Lamoureux Steven Rubin, Director Peter Lamoureux, President Secretary & Treasurer
By: /s/ Steven Foster By: /s/ Teresa Prange Steven Foster, Director Teresa Prange, Chief Financial Officer
Index to Exhibits:
Exhibit No. Description
3.4 Amended and Restated Agreement of Limited Partnership dated as of May 1, 1995.
10.5	Advisory Contract between the Partnership, the General Partner and John W. Henry & Company, Inc. dated December 1, 1990.
10.6	 Amendment to Advisory Contract between the Partnership, the General Partner and John W. Henry & Company, Inc. dated April 1, 1995.
10.9	 Certificate of Limited Partnership for Everest Futures Fund II L.P. dated March 15, 1996.
10.10	 Limited Partnership Agreement for Everest Futures Fund II L.P. dated as of March 29, 1996.
28.1	Confidential Private Placement Memorandum and Disclosure Document dated August 21, 1996.
Notes to the Exhibits:
Exhibits 3.4, 10.5, 10.6, 10.9, 10.10 and 28.1 are incorporated by reference to the Partnership's Form 10 accepted on September 19, 1996.
The Exhibits referenced above bear the exhibit numbers corresponding to those indicated in the Partnership's Registration Statements.
Number of Attached Exhibits
None.
EVEREST FUTURES FUND, L.P. (An Iowa Limited Partnership) Financial Statements Years Ended December 31, 2001, 2000 and 1999 (With Independent Auditors' Report Thereon)
EVEREST FUTURES FUND, L.P. (An Iowa Limited Partnership) Page Independent Auditors' Report	1 Financial Statements: Statements of Financial Condition, December 31, 2001 and 2000	2 Statements of Operations, Years Ended December 31, 2001, 2000 and 1999	3 Statements of Changes in Partners' Equity, Years Ended December 31, 2001, 2000 and 1999	4 Notes to Financial Statements	5 Schedule of Investments, December 31, 2001	10 Acknowledgment	12
Independent Auditors' Report The Partners Everest Futures Fund, L.P.: We have audited the accompanying statements of financial condition, including the schedule of investments, of Everest Futures Fund, L.P., (the Partnership) as of December 31, 2001 and 2000, and the related statements of operations and changes in partners' equity for each of the years in the three-year period ended December 31, 2001. These financial statements are the responsibility of the Partnership's General Partner. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit 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 statements referred to above present fairly, in all material respects, the financial position of the Partnership at December 31, 2001 and 2000 and the results of its operations and changes in partners' equity for each of the years in the three-year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. March 8, 2002
(1)	Organization of the Partnership Everest Futures Fund, L.P. (Partnership) is a limited partnership organized in June 1988, under the Iowa Uniform Limited Partnership Act (Act) for the purpose of engaging in the speculative trading of commodity futures and options thereon and forward contracts (Commodity Interests). The sole General Partner of the Partnership is Everest Asset Management, Inc. (General Partner). The Partnership clears futures and options on futures trades through Cargill Investor Services, Inc. (CIS or Clearing Broker) and forward trading through CIS Financial Services, Inc. (CISFS or Forwards Currency Broker) (collectively referred to as the Brokers). On March 29, 1996, the Partnership transferred all of its assets to and became the sole limited partner of Everest Futures Fund II, L.P. (Trading Partnership), a newly formed limited partnership that invested directly in commodity interests. The co-general partners of the Trading Partnership were CIS Investments, Inc. (CISI) and the General Partner (collectively, the General Partners). In July 2000, the Partnership redeemed approximately 50% of its assets from the Trading Partnership. Effective as of the close of business August 31, 2000, the Partnership liquidated its remaining investment in the Trading Partnership. CISI also liquidated its investment in the Trading Partnership and the Trading Partnership was dissolved in September 2000. The Partnership was closed to new investors from July 31, 1989 to June 30, 1995. Effective July 1, 1995, the Partnership recommenced the offering as 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 per unit, plus an organization and offering cost reimbursement fee payable to the General Partner, and a selling commission equal to 1% and 3%, respectively, of net asset value per unit. The General Partner may waive, in whole or in part, the selling commission. Partnership interests are distributed through Capital Management Partners, Inc., an affiliate of the General Partner, and certain Additional Sellers. (2)	Summary of Significant Accounting Policies 	Basis of Presentation Prior to the dissolution of the Trading Partnership, the accompanying financial statements were prepared on a combined basis and included the accounts of the Partnership and the Trading Partnership. All significant intercompany transactions and balances have been eliminated in the accompanying financial statements. Certain prior year amounts have been reclassified to be consistent with the current year presentation.
	Cash and Cash Equivalents Cash equivalents represent short-term highly liquid investments with remaining maturities of 60 days or less and include money market accounts, securities purchased under agreements to resell, commercial paper, and U.S. Government and agency obligations with variable rate and demand features that qualify them as cash equivalents. These cash equivalents, with the exception of securities purchased under agreement to resell, are stated at amortized cost, which approximates fair value. Securities purchased under agreements to resell, with overnight maturity, are collateralized by U.S. Government and agency obligations, and are carried at the amounts at which the securities will subsequently be resold plus accrued interest. 	Fair Value of Financial Instruments The financial instruments held by the Company are reported in the statements of financial condition at market or fair value, or at carrying amounts which approximate fair value, because of their highly liquid nature and short-term maturity. 	Revenue Recognition Commodity futures contracts, forward contracts, physical commodities, and related options are recorded on the trade date. All such transactions are recorded on the identified cost basis and marked to market daily. Unrealized gains and losses on open contracts reflected in the statements of financial condition represent the difference between original contract amount and market value (as determined by exchange settlement prices for futures contracts and related options and cash dealer prices at a predetermined time for forward contracts, physical commodities, and their related options) as of the last business day of the year or as of the last date of the financial statements. The Partnership earns interest on 100% of the Partnership's average monthly cash balance on deposit with the Brokers at a rate equal to the average 91-day Treasury bill rate for U.S. Treasury bills issued during that month. 	Foreign Currency Translation Assets and liabilities denominated in foreign currencies are translated at the prevailing exchange rates as of the valuation date. Gains and losses on investment activity are translated at the prevailing exchange rate on the date of each respective transaction while year-end balances are translated at the year-end currency rates. Realized and unrealized foreign exchange gains or losses are included in trading income (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.
	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. (3)	The 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 4). Prior to the dissolution of the Trading Partnership, the Trading Partnership bore all expenses incurred in connection with its trading activities, including commodity brokerage commissions and fees payable to the trading advisor, as well as legal, accounting, auditing, printing, mailing, and extraordinary expenses. In addition, the Trading Partnership bore all of its administrative expenses. After the dissolution, the Partnership bears all of these expenses. Limited Partners may cause any or all of their units to be redeemed as of the end of any month at net asset value on fifteen days' prior written notice to the Partnership, or such lesser period as is acceptable to the Partnership. 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 at December 31, 2020, or upon the occurrence of certain events, as specified in the Limited Partnership agreement. (4)	Fees Prior to August 1, 2000, the Partnership's trading advisor was John W. Henry & Company, Inc. (JWH). Beginning July 1, 2001 JWH began trading its Strategic Allocation Program with a trading allocation of $40 million. Previously JWH traded its Financial and Metals program. JWH receives a monthly management fee equal to 0.167% (2% annually) of the Partnership's or Trading Partnership's (prior to September 2000) month-end net asset value, as defined, and a quarterly incentive fee of 20% of the Partnership's or Trading Partnership's (prior to September 2000) new net trading profits, as defined. The monthly management fee was reduced as of October 1, 2000 from 0.33% (4% annually). 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 or Trading Partnership (prior to September 2000).
Effective August 1, 2000, Trilogy Capital Management, LLC (Trilogy) was added as a trading advisor. Trilogy was terminated effective June 30, 2001. Trilogy received a monthly management fee of 0.075% (0.9% annually) of the Partnership's month- end allocated assets as defined and did not receive an incentive fee. Effective September 1, 2001, Mount Lucas Management Corporation (MLM) was added as trading advisor with an initial allocation of $10 million. This allocation represented notional funding for the Partnership. MLM receives a monthly management fee of 0.0625% (0.75% annually) of the Partnership's month-end allocated assets as defined. As MLM uses the MLM Index Unleveraged, they do not receive an incentive fee. Effective September 1, 2001, CIS charges the Partnership or Trading Partnership (prior to September 2000) monthly brokerage commissions equal to 0.5052% of the Partnership or Trading Partnership's beginning- of-month net asset value, as defined. Prior to September 1, 2001, the monthly brokerage commission was 0.5%. Monthly brokerage commissions will increase incrementally to 0.5208% as the trading allocation to MLM increases. The General Partner receives a management fee of approximately 83% of the brokerage commission charged by CIS. Net brokerage commissions are recorded in the statements of operations as a reduction of trading income and the amounts paid to the General Partner are recorded as management fees. Prior to September 2000, CISI received a co-general partner fee from the General Partner equal to 1/12 of .25% of the month-end net asset value, as defined. Prior to January 1, 1999, CISI received 1/12 of .40% of the month-end net asset value. CISI no longer acts as co-general partner and no longer receives a co- general partner fee. As of December 31, 2001, the Partnership had approximately $41.8 million in net assets. JWH's allocation was approximately $40 million and MLM's was approximately $9.9 million of notional funding. The General Partner may replace or add trading advisors at any time. A portion of assets (73.3% and 79.6% at December 31, 2001 and 2000, respectively) are deposited with a commercial bank and invested under the direction of Horizon Cash Management, Inc. (Horizon). Horizon will receive 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 Horizon exceeds the 91-day U.S. Treasury bill rate. (5)	Trading Activities and Related Risks 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 (CEAct) 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. The Partnership has cash on deposit with an interbank market maker in connection with its trading of forward contracts. In the event of interbank market maker's insolvency, recovery of the Partnership assets on deposit may be limited to account insurance or other protection afforded such deposits. In the normal course of business, the Partnership does not require collateral from such interbank market maker. Because forward contracts are traded in unregulated markets between principals, the Partnership also assumes a credit risk, the risk of loss from counter party non-performance. 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. The notional amounts of open contracts at December 31, 2001, as disclosed in the Schedule of Investments, do not represent the Partnership's risk of loss due to market and credit risk, but rather represent the Partnership's extent of involvement in derivatives at the date of the statement of financial condition. Net trading results from derivatives for the years ended December 31, 2001, 2000, and 1999, are reflected in the statement of operations and equal gains (losses) from trading less brokerage commissions. Such trading results reflect the net gain arising from the Partnership's speculative trading of futures contracts, options on futures contracts, and forward contracts. The Limited Partners bear the risk of loss only to the extent of the net asset value of their Partnership units. (6)	Trading Discrepancy In October 2000, there was a discrepancy between the performance of the Barclay Futures Index Program (BFIP) as traded for the Partnership and the Barclay Futures Index (BFI). Certain transactions executed by Trilogy on behalf of the Partnership resulted in a loss of approximately $520,000 that was recorded in the statement of operations. The General Partner believes that these transactions were not executed in accordance with the provisions of BFIP and has demanded that Trilogy reimburse the Partnership for the loss. The parties are currently attempting to resolve the issue.
In the interim, the parties have agreed that the management fees otherwise payable to Trilogy under its advisory contract would be applied as a credit to offset the losses. The offset is not in settlement, partial settlement, or indemnification of any kind and is without prejudice to any rights or claims by either side. Beginning in November 2000 through June 30, 2001 all of the management fees that would otherwise be paid to Trilogy were deposited into a separate account for the benefit of those limited partners that were limited partners on October 31, 2000 and to cover the expenses associated with the collection of the losses. The separate account is not included in the financial statements of the Partnership. At the present time, the General Partner is unable to determine whether any of the losses will be recovered. (7)	Financial Highlights The following financial highlights show the Partnership's financial performance for the year ended December 31, 2001. Total return is calculated as the change in a theoretical limited partner's investment over the entire period. Total return is calculated based on the aggregate return of the Partnership taken as a whole. Total return
. %
Ratio to average net assets:
Net income
. %
General and administrati ve expenses:
Expenses
. Incentive fees
.
Total gene ral and admi nist rati ve expe nses
. %
The net investment income and general and administrative expenses ratios are computed based upon the weighted average net assets for the Partnership for the period ended December 31, 2001.
Acknowledgement To the best of my knowledge and belief, the information contained here is accurate and complete. __________________________ Peter Lamoureux President Everest Asset Management, Inc. General Partner of Everest Futures Fund, L.P. "EVEREST FUTURES FUND, L.P."
(An Iowa Limited Partnership)
Statements of Financial Condition
"December 31, 2001 and 2000"
Assets								2001 Cash and cash equivalents 	$	"20,938,678 "		"19,699,842 " Equity in commodity trading accounts:
	Cash on deposit with brokers 	"8,768,736 "		"3,679,722 " 	Net unrealized trading gains on open contracts 				"2,486,233 "		"5,019,780 " "Investments, at fair value" 	"9,988,541 "		"14,340,365 " Tax receivable 	"36,445 " Interest receivable 	"52,501 "		"299,333 " 					Total assets		$ 	"42,234,689 "		"43,075,487 " Liabilities and Partners' Equity
Liabilities:
	Redemptions payable						$ 	"118,786 "		"572,530 " 	Commissions payable 	"157,564 "		"160,192 " 	Advisor's management fee payable 		"73,208 "		"68,143 " 	Accrued expenses 	"34,692 "		"25,700 " 					Total liabilities 	"384,250 "		"826,565 " Partners' equity:
	"Limited Partners 24,907.39 and 25,905.20 units outstanding"
		"at December 31, 2001 and 2000, respectively" 				"41,519,565 "		"41,927,664 " 	General Partner 198.49 unit equivalents outstanding
		"at December 31, 2001 and 2000" 		"330,874 "		"321,258 " 					Total partners' equity 	"41,850,439 "		"42,248,922 " 					Total liabilities and partners' equity		$	"42,234,689 "		"43,075,487 " Net asset value per outstanding unit of Partnership interest 						$	"1,667 " 	"1,619 " See accompanying notes to the financial statements.
"EVEREST FUTURES FUND, L.P."
(An Iowa Limited Partnership)
Statements of Operations
"Years ended December 31, 2001, 2000 and 1999"
								2001 		2000 Trading income (loss):
	Net realized trading gain (loss)
		on closed contracts					$ 	"5,404,495 "		"(6,612,772) "		"(2,116,772) " 	Change in net unrealized trading gain (loss)
		on open contracts 	"(2,533,546) "		"4,349,673 "		"(5,132,478) " 	Net foreign currency translation gain (loss) 				"73,233 "		"(360,080) " 	"46,852 " 	Brokerage commissions 	"(2,563,850) "		"(2,492,949) "		"(3,045,619) " 	Other income 	"36,899 " 					Total trading income (loss) 	"380,332 "		"(5,079,229) " 	"(10,248,017) " "Interest income, net of cash management fees" 				"1,744,048 "		"2,436,839 " 	"2,507,482 " 					Total income (loss) 	"2,124,380 "		"(2,642,390) "		"(7,740,535) " General and administrative expenses:
	Management fees 	"751,263 "		"1,262,055 "		"2,004,411 " 	Incentive fees 	"29,399 	Administrative expenses 	"59,979 "		"65,011 "		"72,692 " 					Total general and administrative
						expenses		"840,641 " 		"1,327,066 "		"2,077,103 " Minority interest 		"104,654 " 					Net income (loss)		$ 	"1,283,739 "		"(3,969,456) "		"(9,712,984) " Income (loss) per unit of partnership
	interest (for a unit outstanding
	throughout each year):
		General Partner					$	48 	(134) 		(406) 		Limited Partners						48 	(134) 		(406) Net income (loss) allocated to:
	General Partner						$ 	"9,616 "		"(26,592) "		"(80,530) " 	Limited Partners 	"1,274,123 "		"(3,942,864) "		"(9,632,454) " See accompanying notes to the financial statements.
"EVEREST FUTURES FUND, L.P."
(An Iowa Limited Partnership)
Statements of Changes in Partners' Equity
"Years ended December 31, 2001, 2000 and 1999"
								Total 	Limited		General 								units 	Partners		Partner		Total "Partners' equity at December 31, 1998" 			"25,576.54 "	$	"54,769,377 " 	"428,380 "		"55,197,757 " Partner contributions 	"1,891.18 "		"3,876,849 " 	"3,876,849 " Partner redemptions 	"(4,653.93)"		"(9,381,012) " 	"(9,381,012) " Net loss 	"(9,632,454) "		"(80,530) "		"(9,712,984) " "Partners' equity at December 31, 1999" 			"22,813.79 "		"39,632,760 " 	"347,850 "		"39,980,610 " Partner contributions 	"9,828.23 "		"16,006,318 " 	"16,006,318 " Partner redemptions 	"(6,538.33)"		"(9,768,550) " 	"(9,768,550) " Net loss 	"(3,942,864) "		"(26,592) "		"(3,969,456) " "Partners' equity at December 31, 2000" 			"26,103.69 "		"41,927,664 " 	"321,258 "		"42,248,922 " Partner contributions 	"1,288.52 "		"2,101,547 " 	"2,101,547 " Partner redemptions 	"(2,286.33)"		"(3,783,769) " 	"(3,783,769) " Net loss 	"1,274,123 "		"9,616 "		"1,283,739 " "Partners' equity at December 31, 2001" 			"25,105.88 "	$	"41,519,565 " 	"330,874 "		"41,850,439 " See accompanying notes to the financial statements.
	"EVEREST FUTURES FUND, L.P."
(An Iowa Limited Partnership)
Schedule of Investments
"December 31, 2001"
										Number of		Principal
	contracts		(notional)		Value (OTE) Long positions:
Futures positions (-0.46%)
Interest rates 	104 	$	"41,913,844 "		"(107,775)" Metals 	145 		"4,566,544 "		"(138,335)" Energy 	10 		"164,750 "		"(5,650)" Agriculture 	238 		"2,646,302 "		"23,737 " Currencies 	17 		"1,144,320 "		"(13,158)" Indices 	102 		"6,568,547 "		"48,711 "
	"57,004,307 "		"(192,469)" Forward positions (0.33%)
Currencies 		"36,966,187 "		"137,325 " 	Total long positions 				"93,970,494 "		"(55,144)" Short positions:
Futures positions (0.56%)
Interest rates 	"1,353 "	$	"175,470,925 "		"468,266 " Metals 	257 		"7,462,044 "		"(301,266)" Energy 	417 		"8,772,217 "		"(15,901)" Agriculture 	556 		"7,389,058 "		"132,450 " Currencies 	93 		"20,230,048 "		"(50,927)"
	"219,324,291 "		"232,621 "
"EVEREST FUTURES FUND, L.P."
(An Iowa Limited Partnership)
Schedule of Investments
"December 31, 2001"
			Carrying
	Principal		value/value 								Coupon 	Maturity		(notional)		(OTE) Forward positions (5.52%)
Currencies
	Swiss Franc 	$	" 20,897,415 "		" (105,400)" 	Euro 	" 16,448,175 "		" (72,934)" 	British Pound 			" 7,371,000 "		" (43,841)" 	Japanese Yen 			" 55,261,995 "		" 2,436,964 " 	Norway Krone 			" 1,386,320 "		" (8,535)" 	Singapore Dollar 			" 2,708,000 "		" 23,741 " 	South Africa Rand 			" 3,594,540 "		" 78,759 "
	"107,667,445 "		"2,308,755 " 					Total short positions 			$	"326,991,737 "		"2,541,376 " Total open contracts (5.94%) 							"2,486,233 " Securities Held
Maturity Over 60 days (23.41%)
Fannie Mae Medium Term Note 	4.55%		07/23/03				"1,032,794 " Fannie Mae Medium Term Note 	5.38%		01/22/03				"1,894,028 " Fannie Mae Medium Term Note 	4.20%		09/18/03				"507,379 " Fannie Mae Medium Term Note 	4.31%		08/15/03				"1,017,169 " Federal Home Loan Bank 	3.60%		12/18/03				"1,500,000 " Freddie Mac Note 								4.97% 	03/28/03				"1,018,214 " Freddie Mac Note 								4.02% 	07/02/02				"1,935,239 " U.S. Treasury Note 	5.50%		01/31/03				"1,083,718 " 					Total securities maturity over 60 days									"9,988,541 "
Cash and cash equivalents (50.03%) 								"20,938,678 " Cash on deposit with brokers (20.95%) 									"8,768,736 "
Liabilities in excess of other assets (-0.34%)
	"(331,749)" Net assets (100.0%) 					$	"41,850,439 "
EVEREST FUTURES FUND, L.P. (An Iowa Limited Partnership) Notes to Financial Statements December 31, 2001
		(Continued)