<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 10-Q

     (Mark One)

     [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 for the quarterly period ended September 30, 1998

                                      OR

     [_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934
          For the transition period from________________ to __________________

                         Commission File Number 1-9597

                          PIMCO ADVISORS HOLDINGS L.P.
             (Exact name of Registrant as specified in its charter)

                  Delaware                           13-3412614
       (State or other jurisdiction of            (I.R.S. Employer
        incorporation or organization)           Identification No.)


                              800 Newport Center Drive
                          Newport Beach, California 92660
                   ----------------------------------------
                   (Address of principal executive offices)

                                (949) 717-7022
             ----------------------------------------------------
             (Registrant's telephone number, including area code)


                                NOT APPLICABLE
------------------------------------------------------------------------------
  (Former name, former address and former fiscal year, if changed since last
                                    report)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]  No [_]


    APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                             PRECEDING FIVE YEARS:
                                        
     Indicate by check mark whether the registrant has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a plan confirmed by a
court.

Yes [_]  No [_]

                     APPLICABLE ONLY TO CORPORATE ISSUERS:
                                        
     As of September 30, 1998, there were 48,290,615 units of limited partner
interest issued and outstanding.

                              Page 1 of 31 pages
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                                        
                         PART I--FINANCIAL INFORMATION
                                        

Item 1     Financial Statements (Unaudited)
------                                     
                                                                          Page
                                                                          ----
 PIMCO Advisors Holdings L.P.
 
 Statements of Financial Condition as of September 30, 1998 and 
     December 31, 1997                                                     15
 
 Statements of Operations for the three months ended September 30, 
     1998 and July 31, 1997 and the nine months ended September 30, 
     1998 and July 31, 1997                                                16
 
 Statements of Cash Flows for the nine months ended September 30, 
     1998 and July 31, 1997                                                17
 
 Notes to Financial Statements                                             18
 
 PIMCO Advisors L.P.
 
 Consolidated Statements of Financial Condition as of September 30, 
     1998 and December 31, 1997                                            21
 
 Consolidated Statements of Operations for the three months ended
     September 30, 1998 and September 30, 1997 and the nine months
     ended September 30, 1998 and September 30, 1997                       22
 
 Consolidated Statements of Cash Flows for the nine months ended
     September 30, 1998 and September 30, 1997                             23
 
 Notes to Consolidated Financial Statements                                24

                           FORWARD LOOKING STATEMENTS

     Except for the historical information and discussions contained herein,
statements contained in this Form 10-Q may constitute "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.  These statements involve a number of risks, uncertainties and other
factors that could cause actual results to differ materially, including the
performance of financial markets, the investment performance of PIMCO Advisors
L.P.'s sponsored investment products and separately managed accounts, general
economic conditions, future acquisitions, competitive conditions and government
regulations, including changes in tax laws.  PIMCO Advisors Holdings L.P.
cautions readers to carefully consider such factors.  Further, such forward-
looking statements speak only as of the date on which such statements are made.
PIMCO Advisors Holdings L.P. undertakes no obligation to update any forward-
looking statements to reflect events or circumstances after the date of such
statements.

                                       2
<PAGE>
 
Item 2:  Management's Discussion and Analysis of Financial Condition and Results
--------------------------------------------------------------------------------
of Operations General
--------------------- 

     PIMCO Advisors Holdings L.P. ("PIMCO Holdings") (formerly Oppenheimer
Capital, L.P.) is a publicly traded Delaware limited partnership owned .01% by
its general partner, PIMCO Partners, G.P. and 99.99% by its public limited
partners ("Unitholders").  PIMCO Holdings sole business is its ownership of
approximately a 44% interest (approximately 48.3 million General Partner units)
in PIMCO Advisors L.P. ("PIMCO Advisors"), an investment advisor registered
under the Investment Advisers Act of 1940.  PIMCO Partners, G.P. and other
private holders hold the remaining interest in PIMCO Advisors.  PIMCO Partners,
G.P. is the sole general partner of PIMCO Holdings and is the controlling
general partner of PIMCO Advisors.

     PIMCO Advisors is one of the largest investment management companies in the
U.S. with approximately $225.9 billion under management at September 30, 1998.
PIMCO Advisors provides high quality fixed income and equity investment
management to institutional and retail clients, offering the investment
management expertise, performance record and reputations of its institutional
investment managers, which include the fixed income oriented Pacific Investment
Management Company and the equity oriented Oppenheimer Capital.  PIMCO Advisors'
business focuses on:

     Institutional Fixed Income.  PIMCO Advisors provides fixed income
investment management to large and medium-sized foreign and domestic corporate
and public clients.  Fixed income management is led by Pacific Investment
Management Company, which offers impressive long-term performance records across
a diverse range of product offerings such as total return, international and
other duration or sector specific strategies.

     Institutional Equity.  PIMCO Advisors provides equity investment management
to institutional clients offering the investment management expertise of six
equity management groups, including the highly regarded Oppenheimer Capital.
PIMCO Advisors offers investors a variety of management styles, including value,
growth, quantitative and international management styles, as well as an enhanced
index based strategy.

     Institutional clients invest through separate accounts and pooled vehicles
such as the institutional share classes of the PIMCO Funds, the PIMCO Advisors
family of 48 proprietary mutual funds.  PIMCO Advisors offers its investment
management services to institutional clients through client service
representatives of its investment management groups.

     Retail Distribution.  PIMCO Advisors offers the investment expertise of its
institutional investment managers to retail investors through the retail share
classes of the PIMCO Funds, which are distributed primarily through broker
dealers including PIMCO Funds Distributors LLC ("PFD"), formerly known as PIMCO
Funds Distribution Company, a wholly-owned broker-dealer which distributes and
markets shares of the retail mutual funds of PIMCO Advisors.  In addition, PIMCO
Advisors offers retail investors wrap fee accounts, variable annuity products,
401K programs and various investment products through sponsored investment
companies.

     PIMCO Advisors' strategy is to increase the amount and diversification of
its assets under management through (i) growth in the institutional market by
providing high levels of client service and entering new markets, (ii) growth in
the retail market by building brand awareness and marketing of the PIMCO Funds
through its broker dealer network and through penetrating additional
distribution channels and (iii) new product offerings to institutions and retail
investors.

     The financial condition and results of operations of PIMCO Advisors are
discussed below under "PIMCO ADVISORS L.P."

                                       3
<PAGE>
 
Combination of Oppenheimer Capital and PIMCO Advisors
-----------------------------------------------------

     On November 4, 1997, PIMCO Advisors acquired Oppenheimer Group, Inc.
("Opgroup"), whose subsidiary Oppenheimer Financial Corp. ("Opfin") owned the
32.4% managing general partner interest in Oppenheimer Capital and the one-
percent general partner interest in PIMCO Holdings.  In the transaction, Opgroup
became a subsidiary of PIMCO Advisors, and the Opgroup stockholders received 2.1
million PIMCO Advisors Class A units and rights to exchange up to $230 million
of outstanding term notes of Opgroup for an additional 6.9 million PIMCO
Advisors Class A units at $33 1/3 per unit.  In connection with the transaction,
PIMCO Advisors split the one-percent general partner interest in PIMCO Holdings
into a .01% general partner interest and a .99% limited partner interest, and
sold the general partner interest to its general partner.

     On November 30, 1997, Oppenheimer Capital merged with a subsidiary of PIMCO
Advisors, with Oppenheimer Capital surviving (the "OpCap Merger").  In the OpCap
Merger, PIMCO Advisors acquired from PIMCO Holdings its 67.6% general partner
interest in Oppenheimer Capital in exchange for 26.1 million PIMCO Advisors
Class A units, representing an approximate 24% general partner interest in PIMCO
Advisors.  As a result, Oppenheimer Capital became a wholly-owned subsidiary of
PIMCO Advisors, and the limited partner units of PIMCO Holdings came to
represent an investment in the business of PIMCO Advisors.  On December 1, 1997,
PIMCO Holdings effected a 1.67 for 1 split of the PIMCO Holdings units, so that
each PIMCO Holdings unit outstanding after the split represented an economic
interest in one PIMCO Advisors unit.

     On December 31, 1997, PIMCO Advisors caused its 19.5 million publicly held
units to be contributed to PIMCO Holdings in exchange for an equal number of
PIMCO Holdings units.  As a result, PIMCO Advisors ceased to be publicly traded,
and PIMCO Holdings' general partner interest in PIMCO Advisors increased to
approximately 43%.

     Prior to the OpCap Merger, PIMCO Holdings reported its results of
operations and its financial position based on an April 30 fiscal year end.
Upon completion of the OpCap Merger, PIMCO Holdings changed its fiscal year to a
calendar year to correspond with that of PIMCO Advisors.

PIMCO ADVISORS HOLDINGS L.P.
----------------------------

Comparative Results of Operations
---------------------------------

Quarter And Nine Months Ended September 30, 1998 Compared To Pro Forma Quarter
And Nine Months Ended September 30, 1997

     Because of the different ownership interests during the historical
reporting periods and the different fiscal quarter end dates of the historical
reporting periods, management has included below certain pro forma financial
information as if the above discussed transactions had been completed as of
January 1, 1996.  Pro forma results eliminate the significant comparative
differences in the historical results of operations arising primarily from the
inclusion of 67% of Oppenheimer Capital's stand alone results prior to November
30, 1997 as compared with 43% of the consolidated results of PIMCO Advisors
after December 31, 1997, and from certain events effected in the transactions
principally related to the creation and amortization of intangible assets.

                                       4
<PAGE>
 
     The pro forma results of PIMCO Advisors are discussed separately under
"PIMCO Advisors L.P." The following tables compare actual results of operations
of PIMCO Holdings and PIMCO Advisors for the quarter and nine months ended
September 30, 1998 and the pro forma results of operations for the quarter and
nine months ended September 30, 1997 as if the acquisition discussed above had
occurred on January 1, 1996.

<TABLE>
<CAPTION>
                                                                  PIMCO Advisors Holdings L.P.
                                                     -------------------------------------------------------
                                                      For The Three Months           For The Nine Months 
                                                       Ended September 30,           Ended September 30,
                                                       1998           1997           1998           1997
                                                     -------------------------------------------------------        
                                                      Actual        Pro Forma       Actual        Pro Forma
                                                        (Dollars in thousands, except per unit amounts)
<S>                                                  <C>            <C>             <C>           <C>
Equity in earnings of PIMCO Advisors L.P.             $22,740        $19,728        $66,440        $47,629
Other expenses                                          2,920             --         10,721             --
                                                      -------        -------        -------        -------
Net income                                            $19,820        $19,728        $55,719        $47,629
                                                      =======        =======        =======        =======
Basic net income per unit                             $  0.41        $  0.43        $  1.18        $  1.04
                                                      =======        =======        =======        =======
Diluted net income per unit                           $  0.39        $  0.41        $  1.11        $  1.00
                                                      =======        =======        =======        =======
Distributions declared per unit                       $  0.55           N/A         $  1.61           N/A
                                                      =======        =======        =======        =======
</TABLE>

<TABLE>
<CAPTION>
                                                                        PIMCO Advisors L.P.
                                                     -------------------------------------------------------
                                                      For The Three Months           For The Nine Months 
                                                       Ended September 30,           Ended September 30,
                                                       1998           1997           1998           1997
                                                     -------------------------------------------------------        
                                                      Actual        Pro Forma       Actual        Pro Forma
                                                                     (Dollars in thousands)
<S>                                                  <C>            <C>             <C>           <C>
REVENUES
Investment advisory fees:
  Private accounts                                    $135,109       $123,601       $406,470       $344,868
  Proprietary Funds                                     57,518         43,679        158,141        119,876
Distribution and servicing fees                         21,310         17,752         59,795         45,953
                                                      --------       --------       --------       --------
       Total revenues                                  213,937        185,032        624,406        510,697
                                                      --------       --------       --------       --------
EXPENSES                                                                                        
 Compensation and benefits                              88,898         78,489        262,990        214,634
 Commissions                                            20,048         15,004         57,073         42,201
 Amortization of intangible assets, Restricted                                                  
  Unit and Option Plans                                 20,374         25,925         60,205         77,166
 General and administrative                             11,449          8,438         31,256         23,321
 Occupancy and equipment                                 6,169          4,282         16,729         12,766
 Other expense, net                                     15,747          5,831         42,999         26,989
                                                      --------       --------       --------       --------
   Total expenses                                      162,685        137,969        471,252        397,077
                                                      --------       --------       --------       --------
Net income                                            $ 51,252       $ 47,063       $153,154       $113,620
                                                      ========       ========       ========       ========
</TABLE>

                                       5
<PAGE>
 
The above pro forma operating results give effect to:

(i)    Conversion of PIMCO Holdings to a calendar year reporting basis;
(ii)   The issuance of 2.1 million restricted Class A limited partner units in
       connection with the acquisition of the privately held 33% interest in
       Oppenheimer Capital which occurred on November 4, 1997 ("Opgroup
       Transaction");
(iii)  The assumed exchange of $230 million of previously existing exchangeable
       debt for an additional 6.9 million PIMCO Advisors Class A units, of which
       $149.5 million had been exchanged as of September 30, 1998;
(iv)   The contribution of the 67% interest in Oppenheimer Capital by PIMCO
       Holdings for 26.1 million PIMCO Advisors Class A units which occurred on
       November 30, 1997 in the OpCap Merger;
(v)    The addition of approximately $897.5 million of intangible assets at
       PIMCO Advisors which arose on November 4, 1997 as result of the Opgroup
       Transaction and which will be amortized over 20 years;
(vi)   The issuance of approximately 2.2 million restricted unit rights
       resulting in a deferred compensation charge of $67.8 million to be
       amortized over a 5 year period that occurred on November 4, 1997;
(vii)  The elimination of the priority distribution structure related to pre -
       December 31, 1997 rights of PIMCO Advisors Class A units; and
(viii) The repayment of the Equities Note in November 1997 and the resulting
       elimination of interest income and related expense.

     This pro forma information is not intended to reflect the results that
actually would have been obtained if the operations were consolidated during the
periods presented, nor is it an indication of future results.

     PIMCO Holdings realized $22.7 million as its proportionate share of the
earnings of PIMCO Advisors (approximately 44%) during the quarter ended
September 30, 1998 as compared with $19.7 million pro forma during the quarter
ended September 30, 1997, an increase of $3.0 million (or 15.3%).  PIMCO
Holdings' proportionate share of earnings of PIMCO Advisors for the nine months
ended September 30, 1998 was $66.4 million compared with $47.6 million pro forma
for the nine months ended September 30, 1997, an increase of $18.8 million (or
39.5%).  The increases in earnings were the result of increases in the net
income of PIMCO Advisors, resulting principally from its increased managed
assets and the related revenues, offset by operating expense increases.

     The amortization of intangible assets at PIMCO Advisors in 1997 includes a
charge of approximately $6.4 million per quarter related to the amortization of
the intangible value (approximately $80.7 million) assigned to PIMCO Advisors'
master limited partnership ("MLP") structure, originally scheduled to expire on
December 31, 1997.  Under the change in the tax laws enacted in August of 1997,
PIMCO Holdings elected to continue to be treated as a publicly traded
partnership, subject to a 3.5% federal tax on allocable gross income from active
businesses, however, there is no specific intangible amortization related to
this structure in the future.  It is expected, therefore, that amortization of
the remaining intangibles, including both the amortization of goodwill and
restricted unit and option plans, will approximate $77 to $81 million annually.
Based upon current operating margins, the newly enacted tax amounts to an
approximate 17% to 18% reduction in otherwise reportable net income and an 11%
to 12% reduction in cash flow otherwise available for distribution, aggregating
approximately $2.9 million in the quarter ended September 30, 1998.  The current
quarter expense reflected a reversal of approximately $860,000 related to over
provision in the first two quarters of 1998 as the expected effective tax rate
has declined from levels anticipated earlier in the year.

                                       6
<PAGE>
 
Quarter And Nine Months Ended September 30, 1998 Compared To The Historical
Fiscal Quarter And Nine Months Ended July 31, 1997

     PIMCO Holdings recorded equity in earnings of PIMCO Advisors for the three
months ended September 30, 1998 of $22.7 million and $66.4 million for the nine
months ended September 30, 1998 compared to equity in earnings of $18.7 million
for the three months ended July 31, 1997 and $47.6 million for the nine months
ended July 31, 1997.

     PIMCO Holdings recorded no amortization of intangible assets during the
three months and nine months ended September 30, 1998 compared to $652,000
during the three months ended July 31, 1997 and $1.9 million for the nine months
ended July 31, 1997.  Other expenses amounted to $2.9 million during the quarter
ended September 30, 1998 and $10.7 million for the nine months ended September
30, 1998 compared to $33,000 for the quarter ended July 31, 1997 and $99,000 for
the nine months ended July 31, 1997.  The increase in other expenses was
primarily a result of the newly enacted federal and state taxes imposed on
publicly traded master limited partnerships starting in January 1998.

Taxes

     PIMCO Holdings is not subject to federal, state, or local income taxes,
which are the obligations of individual partners.  However, beginning in
calendar year 1998, PIMCO Holdings elected to be subject to a 3.5% federal tax
on its share of PIMCO Advisors' gross income from the active conduct of a trade
or business in order to retain its partnership status.  The imposition of this
tax will reduce both net income and cash available for distribution to partners
from levels that would otherwise be available.  Similar taxes may be imposed by
states in which PIMCO Holdings operates.  As of September 30, 1998 PIMCO
Holdings anticipates an effective tax on gross income, including any state
imposed taxes, to approximate 4%.

Liquidity And Capital Resources

     PIMCO Holdings is dependent upon the operating cash flow of PIMCO Advisors
for its liquidity and capital resources.  For the quarter ended September 30,
1998, PIMCO Holdings declared distributions to holders of PIMCO Holdings units
of $0.55 per unit compared to distributions declared during the quarter ended
July 31, 1997 of  $0.57 per unit.  PIMCO Holdings' policy is to distribute
substantially all its net operating cash flow on an annual basis.  Distributions
are declared to unitholders of record on March 31, June 30, September 30 and
December 31 and paid within thirty days following the end of each calendar
quarter.  Because PIMCO Holdings' sole business is to hold an investment as a
general partner of PIMCO Advisors, the operating cash flow of PIMCO Holdings
consists of distributions from PIMCO Advisors.  Because PIMCO Advisors currently
pays all expenses of PIMCO Holdings other than taxes, PIMCO Holdings' per unit
distributions generally equal the PIMCO Advisors distributions, less applicable
taxes.  Effective with the third quarter distribution declared in September, the
Management Board of PIMCO Advisors has indicated its intent to evaluate the
distribution rate on a quarterly basis.

     Distribution levels will depend on the financial performance of PIMCO
Advisors.  There can be no assurance that current distribution rates will be
maintained.  Distributions made by PIMCO Holdings will depend on the
profitability of the investment management business of PIMCO Advisors, which is
affected in part by overall economic conditions and other factors affecting
capital markets generally, which are beyond the control of PIMCO Holdings and
PIMCO Advisors.

                                       7
<PAGE>
 
PIMCO ADVISORS L.P.

Comparative Results of Operations
---------------------------------

Quarter And Nine Months Ended September 30, 1998 Compared To Pro Forma Quarter
And Nine Months Ended September 30, 1997

Revenues

     PIMCO Advisors derives substantially all its revenues from advisory fees
for investment management services provided through its investment management
subsidiaries to its institutional and individual clients and advisory,
distribution and servicing fees for services provided principally to the PIMCO
Funds.

     Generally, such fees are determined based upon a percentage of client
assets under management and are billed quarterly to institutional clients,
either in advance or arrears, depending on the agreement with the client and
monthly in arrears to the PIMCO Funds. Revenues are determined in large part
based upon the level of assets under management, which itself is dependent upon
factors including market conditions, client decisions to add or withdraw assets
from PIMCO Advisors' management, and PIMCO Advisors' ability to attract new
clients. In addition, PIMCO Advisors has certain accounts which are subject to
performance based fee schedules wherein performance relative to the S&P 500
Index or other benchmarks over a particular time period can result in additional
fees. Such performance based fees can have a significant effect on revenues, and
provide an opportunity to earn higher fees (as well as lower) than could be
obtained under fee arrangements based solely on a percentage of assets under
management.

The following table sets forth the composition of PIMCO Advisors assets under
management as of September 30, 1998 compared to pro forma September 30, 1997:

<TABLE>
<CAPTION>
                                            September 30, 1998       September 30, 1997
                                            ------------------       ------------------
                                                 Actual                  Pro forma
                                            ------------------       ------------------
                                                      (Dollars in millions)
<S>                                         <C>                      <C>
Assets under management by source:             
 Institutional separate accounts               
       Fixed income                              $102,119                  $ 76,155
       Equity                                      45,260                    52,331
 Retail products and mutual funds                  78,507                    63,062
                                                 --------                  --------
          Total                                  $225,886                  $191,548
                                                 ========                  ========
Assets under management by type:                          
 Fixed income                                    $141,828                  $102,981
 Equity                                            80,981                    85,254
 Money market                                       3,077                     3,313
                                                 --------                  --------
          Total                                  $225,886                  $191,548
                                                 ========                  ========
</TABLE>

     PIMCO Advisors' consolidated revenues, including those of its wholly-owned
subsidiary PIMCO Funds Distributors LLC ("PFD"), increased $28.9 million (15.6%)
to $213.9 million for the three months ended September 30, 1998 compared to
$185.0 million pro forma for the three months ended September 30, 1997.  PIMCO
Advisors consolidated revenues for the nine months ended September 30, 1998
increased $113.7 million (22.3%) to  $624.4 million compared to $510.7 million
pro forma for the nine months ended September 30, 1997.  Advisory revenues
increased $25.3 million (15.2%) to $192.6 million for the three months ended
September 30, 1998 and $99.9 million (21.5%) to $564.6 million for the nine
months ended September 30, 1998 compared to $167.3 million and $464.7 million,
respectively, for the same pro forma periods in 1997.  Distribution and
servicing revenues increased to $21.3 million for the three months ended
September 30, 1998 and to $59.8 million for the nine months ended 

                                       8
<PAGE>
 
September 30, 1998, compared to $17.8 million and $46.0 million, respectively,
for the same pro forma periods in 1997.

     The increases in PIMCO Advisors' revenues for the quarter and nine months
ended September 30, 1998 resulted primarily from a pro forma $34.3 billion (or
17.9%) year-over-year increase in assets under management as of September 30,
1998, which included a pro forma $20.8 billion of net cash inflows.  Assets
under management reached $225.9 billion at September 30, 1998.  Assets under
management decreased by $2.9 billion during the three months ended September 30,
1998 and increased by $26.3 billion during the nine months ended September 30,
1998, including net cash inflows of $4.3 billion for the three months ended
September 30, 1998 and $15.6 billion for the nine months ended September 30,
1998.  Performance based fees were $6.4 million for the three months ended
September 30, 1998 and $22.9 million for the nine months ended September 30,
1998 compared to $9.3 million and $20.8 million, respectively, during the same
pro forma periods in 1997.  The increase in performance based fees for the nine
month period ended September 30, 1998 occurred principally in an equity product
seeking to outperform the S&P 500 Index.  There can be no assurances that future
increases in assets under management, cash flows or performance based fees will
occur at the rates experienced recently.

Expenses

     Compensation and benefits were $88.9 million for the three months ended
September 30, 1998 and $263.0 million for the nine months ended September 30,
1998, which was $10.4 million (or 13.3%) higher and $48.4 million (or 22.5%)
higher, respectively, than the same pro forma periods in 1997.  This increase
reflects additional staffing, including substantial additions at both Pacific
Investment Management Company and Oppenheimer Capital, as well as higher profit
sharing expenses due to increased profits of the investment management
subsidiaries.

     Commission expenses related to sales and servicing of retail mutual funds
and similar products increased $5.0 million to $20.0 million in the three months
ended September 30, 1998 and $14.9 million to $57.1 million in the nine months
ended September 30, 1998 compared to the same pro forma periods in 1997.  These
increases reflect increased sales and asset levels in our proprietary PIMCO
Funds mutual fund family, both through higher "trail" commissions due to an
increased level of qualifying assets, as well as through increased "up front"
commissions on higher current sales levels.  Commission expenses are primarily
incurred by PFD and are paid primarily to broker-dealers and their sales people
for the sale of PIMCO Advisors retail-oriented mutual funds.  These include "up-
front" commissions paid at the time of sale of the mutual funds, "trail"
commissions for the maintenance of assets in the mutual funds and service fee
commissions paid for services provided to mutual fund shareholders.  The level
of commission expense will vary according to the level of assets in the mutual
funds (on which trail and service fee commissions are determined) and on the
level of sales of mutual funds (on which up-front commissions are determined).
Trail and service fee commissions are generally paid quarterly beginning one
year after sale of the mutual funds.

     General and administrative expenses were $11.4 million for the three months
ended September 30, 1998, and $31.3 million for the nine months ended September
30, 1998, an increase of $3.0 million (35.7%) and $7.9 million (34.0%),
respectively, over the same pro forma periods in 1997.  This increase can be
primarily attributed to the 1997 conversion of the retail share classes of the
PIMCO Funds to a fixed administrative fee basis resulting in increases to this
cost category for expenses previously borne directly by the funds and a
corresponding increase in such asset levels since last year.  Occupancy and
equipment costs increased by $1.9 million to $6.2 million for the three months
ended September 30, 1998 and increased $4.0 million to $16.7 million for the
nine months ended September 30, 1998 in comparison to the same pro forma period
in 1997.  The increase can be attributed primarily to additional office space
and equipment as a result of recently increased staffing and preparation for
future growth.

     Amortization of intangible assets was $13.8 million for the three months
ended September 30, 1998 and $41.3 million for the nine months ended September
30, 1998 compared to $20.2 million and 

                                       9
<PAGE>
 
$60.6 million, respectively, for the same pro forma periods in 1997, a decrease
of $6.4 million (31.8%) and $19.3 million (31.9%) over the same pro forma
periods in 1997. The amortization of intangible assets in 1997 includes a
quarterly charge of approximately $6.4 million related to the amortization of
the intangible value (approximately $80.7 million) assigned to PIMCO Advisors'
MLP structure, originally scheduled to expire on December 31, 1997. It is
expected that amortization of the remaining intangibles will approximate $55.0
million annually.

   Restricted unit and option plan costs amounted to $6.6 million in the three
months ended September 30, 1998 and $18.9 million for the nine months ended
September 30, 1998 compared to $5.7 million and $18.9 million, respectively, for
the same pro forma periods in 1997.  It is expected that such charges will
approximate $22 to $26 million annually.

     Other expenses increased by $9.5 million to $15.7 million for the three
months ended September 30, 1998 and increased by $22.5 million to $43.0 million
for the nine months ended September 30, 1998 in comparison to the same pro forma
periods in 1997.  The increases in other expenses are primarily due to market
losses on seed portfolios and increases in marketing and promotional costs,
interest expense and professional fees as well as other increases reflective of
increased staffing and slight inflation.  In addition, the third quarter of 1997
reflected a non-recurring gain of approximately $4.4 million related to the sale
by Oppenheimer Capital of its Dual Purpose Fund.

Liquidity and Capital Resources

     PIMCO Advisors and its predecessor entities' combined business have not
historically been capital intensive.  In general, working capital requirements
have been satisfied out of operating cash flow or short-term borrowings.  PIMCO
Advisors' policy is to make quarterly distributions to its unitholders.

     PIMCO Advisors had approximately $163.8 million of cash and cash
equivalents and short-term investments at September 30, 1998 compared to
approximately $67.9 million at December 31, 1997.  PIMCO Advisors' liquidity not
otherwise used for quarterly distributions will be used for general purposes
including profit-sharing payments, seed money for new mutual funds and brokers'
commissions on sales of mutual fund shares distributed without a front-end sales
load.  The level of such commissions may increase in the future due to the
introduction of new products and mutual fund pricing structures which may
require an alternate financing source.

     For the quarter ended September 30, 1998, PIMCO Advisors declared
distributions to holders of PIMCO Advisors units of $0.63.  PIMCO Advisors'
policy is to distribute substantially all of its net cash flow on an annual
basis after establishing reasonable reserves for prudent operation of its
business.  Distributions are declared and paid to unitholders within thirty days
following the end of each calendar quarter to holders of record on March 31,
June 30, September 30 and December 31 of each year.  Effective with the third
quarter distribution declared in September, the Management Board of PIMCO
Advisors has indicated its intent to evaluate the distribution rate on a
quarterly basis.  Actual distribution levels will depend on the financial
performance of PIMCO Advisors.  There can be no assurance that previous
distribution rates will be achieved.  Distributions made by PIMCO Holdings will
depend on the profitability of the investment management business of PIMCO
Advisors, which is affected in part by overall economic conditions and other
factors affecting capital markets generally, many of which are beyond the
control of PIMCO Holdings and PIMCO Advisors.

  PIMCO Advisors assumed $230.0 million of 6% exchangeable debt in connection
with the Oppenheimer Capital acquisition in November 1997.  Through September
30, 1998, $149.5 million of that debt has been exchanged for units at a rate of
$33 1/3 per unit.  The remaining $80.5 million of such debt is expected (but is
not required) to be exchanged for units on the same terms upon the expiration of
certain tax contingencies over the next 6 to 7 years.

                                       10
<PAGE>
 
     On May 12, 1998, PIMCO Advisors secured a syndicated $500 million credit
facility to provide liquidity for working capital and strategic opportunities.
This credit facility consists of (i) a Long-Term Credit Facility, providing for
a $250 million five-year revolving credit facility and (ii) a Short-Term Credit
Facility, providing for a $250 million 364-day revolving credit facility.  As of
September 30, 1998, $75.0 million was outstanding under the Long-Term Credit
Facility.

Other Factors

     Performance Factors.  During the quarter ended September 30, 1998, assets
under management for PIMCO Advisors and its subsidiaries decreased $2.9 billion
to $225.9 billion.  The decline in assets is the result of $12.1 billion in
equity market depreciation, offset by $4.9 billion of bond market appreciation
and $4.3 billion of net inflows, consisting of inflows of $5.2 billion into the
Pacific Investment Management Company fixed income franchise less net outflows
of $900 million from the PIMCO Advisors' equity subsidiaries.  While net cash
inflows for PIMCO Advisors, as a whole, were significant ($4.3 billion during
the three months ended September 30, 1998 and $15.6 billion during nine months
ended September 30, 1998), Columbus Circle Investors ("CCI") and Oppenheimer
Capital experienced net outflows.  During the nine months ended September 30,
1998, CCI experienced net cash outflows of $1.7 billion, significantly slowing
the negative trend seen during 1997.  Oppenheimer Capital experienced net cash
outflows of $3.0 billion during the nine months ended September 30, 1998,
including $840 million in the current quarter.  Net cash flows are dependent on
external factors such as popularity of investment style, general asset
allocation trends among clients, as well as internal factors like performance,
dispersion and client service, which are being addressed at these subsidiaries.
There can be no assurance that these efforts will be successful at reversing,
halting or reducing these negative cash flows.

     General Economic Factors.  The general economy including interest rates,
inflation and client responses to economic factors will affect, to some degree,
the operations of PIMCO Advisors.  As a significant portion of assets under
management are fixed income funds, fluctuations in interest rates could have a
material impact on the operations of PIMCO Advisors.  PIMCO Advisors' advisory
business is generally not capital intensive and therefore any effect of
inflation, other than on interest rates, is not expected to have a significant
impact on its operations or financial condition.  Client responses to the
economy, including decisions as to the amount of assets deposited may also
impact the operations of PIMCO Advisors.  Any resulting revenue fluctuations may
or may not be recoverable in the pricing of services offered by PIMCO Advisors.

     European Monetary Unit

     On January 1, 1999, a single currency for the European Economic and
Monetary Union (the "Euro") is scheduled to replace the national currency for
participating member countries which includes countries in which PIMCO Advisors
has offices, subsidiary locations or with which it does substantial business.
Many of PIMCO Advisors' managed funds and financial products have substantial
investments in countries whose currencies will be replaced by the Euro. Many
aspects of PIMCO Advisors and its subsidiaries investment processes, including
trading, foreign exchange, payments, settlements, cash accounts, custodial
accounts and accounting will be affected by the implementation of the Euro (the
"Euro Issue").

Pimco Advisors is in the process of determining changes that will be required in
connection with the Euro Issue in order to process transactions accurately with
minimal disruption to business activities. Pimco Advisors is also communicating
with its subsidiaries and vendors to assess their readiness to manage the Euro
Issue without disruption to PIMCO Advisors' or the PIMCO Funds' business or
operations.

                                       11
<PAGE>
 
PIMCO Advisors is not presently able to assess the cost impact of the Euro
Issue, but does not presently anticipate that such impact will materially affect
the PIMCO Advisors cash flows, operations or operating results.  Costs incurred
relating to the Euro Issue are generally being expensed by the Company during
the period in which they are incurred.

     Year 2000 Readiness Disclosure

     Many of the world's computer systems record years in a two-digit format.
These systems may be unable to correctly recognize, interpret or use dates
beyond the year 1999.  This inability to process date information might lead to
significant business disruptions.  PIMCO Advisors and its subsidiaries are
taking steps to assure that their computer systems will function properly after
1999.  PIMCO Advisors and its subsidiaries have designated a team of information
and business professionals to address the Year 2000 problem and developed a
written Year 2000 Plan to address Year 2000 issues.  PIMCO Advisors presently
estimates that its Year 2000-related expenditures will be approximately $14.3
million and that Year 2000 will not have a material affect on its operations.
As of September 20, 1998, PIMCO Advisors and subsidiaries have expended $1.2
million on Year 2000 related expenses.  PIMCO Advisors and its subsidiaries are
in various stages of reviewing, testing and making software repairs and upgrades
to those systems and programs that they believe will become affected by the Year
2000 problem.  Because the Year 2000 project is an ongoing company-wide
endeavor, the state of progress changes daily.  Year 2000 budget estimates are
subject to change and revision.  See "Uncertainty" below.  The PIMCO Advisors'
Year 2000 Plan consists of five general phases:  Awareness, Assessment,
Remediation, Testing, and Implementation.

     Awareness:  During the Awareness phase, the Year 2000 team informed the
employees of PIMCO Advisors and its subsidiaries, including the highest levels
of PIMCO Advisors' management, about the Year 2000 problem.  A written Year 2000
Plan was prepared and Year 2000 budget estimates were compiled.  The Management
Board of PIMCO Advisors formally approved the proposed Year 2000 Plan and a
preliminary budget on July 21, 1998, and approved the amended Plan and revised
budget October 27, 1998.

     Assessment:  During the Assessment phase, the Year 2000 team prepares an
inventory of information technology ("IT") and non-IT systems used in PIMCO
Advisors and its subsidiaries business.  Systems are classified as software,
hardware, and embedded chips.  Separately, systems are also classified as
mission critical systems and non-mission critical systems.  Except for security,
fire, electrical, voice, and data lines, PIMCO Advisors does not currently
believe that the failure of its non-IT systems would have a material adverse
effect upon its business. As the inventory is compiled and verified, each system
is preliminarily assessed for Year 2000 compliance. This preliminary assessment
is made by obtaining manufacturers' representations that a given product is Year
2000 compliant or other evidence of compliance. Systems for which no such
evidence can be obtained are identified as candidates for correction or
replacement ("Remediation"). With respect to its mission-critical systems, the
assessment phase is substantially complete. PIMCO Advisors and its subsidiaries
currently plan to substantially complete the Assessment phase with respect to
their non-mission-critical systems by December 3, 1998.

     Remediation:  During this phase, software, hardware, and embedded chips
identified during the Assessment phase to be non-Year 2000 compliant will be
corrected or replaced.  PIMCO Advisors and its subsidiaries plan to 
substantially complete Remediation of the mission-critical software, hardware,
and non-IT systems identified as non-compliant in the Assessment stage by
December 7, 1998, except with respect to the portfolio management and accounting
system utilized by Oppenheimer Capital, which is expected to be remediated by
June 7, 1999. Non-mission critical systems are anticipated to be substantially
completed by February 1, 1999. Necessarily, further corrections and replacements
may need to be made after the Remediation phase has been completed as a result
of problems identified during the Testing phase or otherwise.

                                       12
<PAGE>
 
     Testing:  The testing phase includes internal testing, point-to-point
testing, and industry testing. Testing will be conducted on both existing and
new systems as they are added.  PIMCO Advisors generally plans to test its
systems in order of criticality (mission critical, then non-mission critical).
PIMCO Advisors does not plan to test non-mission critical systems that are not
used in its business (e.g., software applications incidentally installed on PCs
with other software that is used in PIMCO Advisors and its subsidiaries'
business).  PIMCO Advisors will design and implement internal, point-to-point,
and industry testing programs that use test scripts, portfolios, and various
hypothetical dates generated by PIMCO Advisors and its subsidiaries, vendors,
and industry groups.  Some internal testing already has taken place at PIMCO
Advisors' major subsidiaries, Pacific Investment Management Company and
Oppenheimer Capital.  PIMCO Advisors and each of its SEC-registered investment
advisory and brokerage subsidiaries intend to participate in an industry-wide
testing forum sponsored by the Securities Industry Association.  Pacific
Investment Management Company has been at the forefront of this process through
its participation in the Bond Market Association's Asset Managers' Forum, a
committee which is advising the Securities Industry Association on issues
associated with investment managers and Year 2000 issues.  PIMCO Advisors
currently expects that internal testing of its mission-critical systems will be
substantially complete by February 1, 1999; point-to-point testing will be
substantially complete by April 1, 1999; and industry testing may be
substantially complete by May 1, 1999.  These dates may change significantly
depending upon whether PIMCO Advisors and its subsidiaries, their
counterparties, and the securities industry in general meet their anticipated
deadlines.  PIMCO Advisors anticipates that it will conduct tests with as yet
unidentified third parties until December 31, 1999, as circumstances warrant.

     Implementation:  During the Implementation phase, systems that have been
tested and identified as being Year 2000 Compliant will be put into normal
business operation.  PIMCO Advisors and its subsidiaries currently plan to
complete Implementation with respect to their mission critical systems by March
1, 1999 (with the exception of the portfolio management system utilized by
Oppenheimer Capital), and of other systems as soon as possible thereafter, but
in any event by June 1, 1999. PIMCO Advisors and its subsidiaries are in the
process of developing written contingency plans addressing possible failures of
technology and services in their various business operations.  PIMCO Advisors
anticipates that its contingency plans will be substantially complete by June 1,
1999.  PIMCO Advisors also anticipates that it will continuously revise its
contingency plans until December 31, 1999, as new risks become apparent.
Although PIMCO Advisors and its subsidiaries are preparing plans, no assurance 
can be given that contingency plans can be developed that would avoid all
problems in the event of the failure of certain mission-critical systems,
counterparties, and third-party providers.

     Third Parties: PIMCO Advisors and its subsidiaries' business operations are
heavily dependent upon a complex worldwide network of systems that contain date
fields, including data feeds to trading systems, securities transfer agent
operations and stock markets.  PIMCO Advisors and its subsidiaries' ability to
assess the effects of the Year 2000 Problem upon their clients is highly
dependent upon the efforts of third parties, particularly brokers, dealers, and
clients' custodians.  The failure of third party organizations to resolve their
own processing issues with respect to the Year 2000 Problem in a timely manner
could have a material adverse effect on PIMCO Advisors' business.  PIMCO
Advisors and its subsidiaries are taking steps to verify the Year 2000 readiness
of material third parties with which they do business.  PIMCO Advisors and its
subsidiaries have substantially completed an inventory of brokers, dealers,
custodians, and other material third parties with which they have direct,
significant business relationships.  PIMCO Advisors and its subsidiaries have
sent written questionnaires to the identified third parties inquiring about the
status of their Year 2000 compliance programs.  The results of these
questionnaires will be collected, analyzed, and distributed to appropriate
internal personnel.  Follow-up or additional questionnaires and inquiries will
be sent to third parties that did not respond satisfactorily to the initial
questionnaire.  PIMCO Advisors currently anticipates that its efforts with
respect to assessing the Year 2000 status of its counterparties and other third
parties will continue into the Year 2000.

     Uncertainty:  This discussion of PIMCO Advisors and its subsidiaries Year
2000 program contains forward-looking statements.  At present, the management of
PIMCO Advisors believes that 

                                       13
<PAGE>
 
costs associated with the Year 2000 problem will not have a material adverse
effect on PIMCO Advisors' business or operations. However, PIMCO Advisors
expects that its Year 2000 expense estimates will change as the Year 2000
approaches and PIMCO Advisors and its subsidiaries execute the Testing and
Implementation phases. Although PIMCO Advisors' efforts and expenditures on Year
2000 issues are substantial, there can be no assurances that its clients,
unitholders, counterparties or others will not suffer from disruptions or
adverse results arising as a consequence of entering Year 2000. PIMCO Advisors'
current expectations regarding its and its counterparties transition to Year
2000 are based upon unfinished remediation and testing, and are subject to a
number of uncertainties and factors that are beyond its control and which could
cause actual costs to differ materially from those currently expected.
Furthermore, although management currently anticipates that its expenditures and
efforts are appropriate, complications as yet unidentified in internal or
external systems, with data providers, with other securities firms or
institutions, with other counterparties, and with general economic conditions
related to the Year 2000 in general may trigger significantly greater expenses
or losses.

                                       14
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                       STATEMENTS OF FINANCIAL CONDITION
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                September 30, 1998   December 31, 1997
                                                                ------------------   ------------------
                                                                         (Dollars in thousands)
-------------------------------------------------------------------------------------------------------
<S>                                                             <C>                  <C>
ASSETS                                                                                
Current assets:                                                                       
   Cash and cash equivalents                                    $ 22,579                 $ 15,522
   Distribution receivable and other current assets               30,516                   15,187
                                                                --------                 -------- 
    Total current assets                                          53,095                   30,709
 Investment in operating partnership                             467,936                  408,137
 Other non current assets                                            153                      118
                                                                --------                 -------- 
TOTAL ASSETS                                                    $521,184                 $438,964
                                                                ========                 ========
LIABILITIES                                                                           
 Distribution payable                                           $ 26,563                 $ 15,112
 Other current liabilities                                        26,742                   15,515
                                                                --------                 --------
    Total liabilities                                             53,305                   30,627
                                                                --------                 --------
PARTNERS' CAPITAL                                                                     
 General Partner                                                      52                       41
 Limited Partners (48,290,615 units issued and outstanding                            
  at September 30, 1998 and 45,531,583 units issued and                               
  outstanding at December 31, 1997)                              467,827                  408,296
                                                                --------                 --------
    Total Partners' Capital                                      467,879                  408,337
                                                                --------                 --------
                                                                                      
TOTAL LIABILITIES AND PARTNERS' CAPITAL                         $521,184                 $438,964
                                                                ========                 ========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       15
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)
                                        
<TABLE>
<CAPTION>
                                                           For The             For The             For The             For The
                                                        Three Months         Three Months        Nine Months         Nine Months
                                                            Ended               Ended               Ended               Ended 
                                                        September 30,          July 31,          September 30,         July 31,
                                                        -------------        ------------        -------------       -----------
                                                            1998                 1997                1998                1997
                                                        -------------        ------------        -------------       -----------
                                                                     (Dollars in thousands, except per unit amounts)
<S>                                                     <C>                  <C>                 <C>                 <C> 
REVENUES:
   Equity in earnings of operating partnership:
       Operating earnings                                   $22,740             $15,963             $66,440               $43,022
       Gain on Quest sales                                       --               2,809                  --                 4,609
                                                            -------             -------             -------               -------
       Total equity in earnings of operating 
        partnership                                          22,740              18,772              66,440                47,631
   Interest                                                      --                 813                  --                 2,412
                                                            -------             -------             -------               -------
                 Total revenues                              22,740              19,585              66,440                50,043
                                                            -------             -------             -------               -------
EXPENSES:
   Amortization of intangible assets                             --                 652                  --                 1,936
   Other                                                      2,920                  33              10,721                    98
                                                            -------             -------             -------               -------
                 Total expenses                               2,920                 685              10,721                 2,034
                                                            -------             -------             -------               -------
Net income                                                  $19,820             $18,900             $55,719               $48,009
                                                            =======             =======             =======               ======= 
Basic net income per unit                                   $  0.41             $  0.73             $  1.18               $  1.85
                                                            =======             =======             =======               ======= 
Diluted net income per unit                                 $  0.39             $  0.73             $  1.11               $  1.84
                                                            =======             =======             =======               ======= 
Distributions declared per unit                             $  0.55             $  0.57             $  1.61               $  1.82
                                                            =======             =======             =======               ======= 
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       16
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                       For The            For The
                                                     Nine Months         Nine Months 
                                                        Ended              Ended
                                                     September 30,        July 31,
                                                     -------------       -----------
                                                         1998                1997
                                                     -------------       -----------
                                                         (Dollars in thousands)
<S>                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                           $ 55,719            $ 48,009
 Adjustments to reconcile net income to net cash                          
  provided by operating activities:                                       
 Distributions received greater (less) than the                           
  equity in earnings of operating partnerships          4,495              (5,646)
 Amortization of intangibles                                                1,936
Change in operating assets and liabilities:                               
     Change in other assets                               (64)                 (6)
     Change in other liabilities                       11,226                  --
                                                     --------            -------- 
Net cash provided by operating activities              71,376              44,293
                                                     --------            -------- 
Cash Flows from Investing Activities:                                     
Investment in operating partnerships                     (120)               (781)
                                                     --------            -------- 
Net cash used in investing activities                    (120)               (781)
                                                     --------            -------- 
Cash Flows from Financing Activities:                                     
Cash distributions paid                               (64,336)            (44,247)
Capital contribution from General Partner                  17             
Issuance of limited partnership units on                                  
 Exercise of options                                      120                 781
                                                     --------            -------- 
Net cash used in financing activities                 (64,199)            (43,466)
                                                     --------            -------- 
Net increase in cash and cash equivalents               7,057                  46
Cash and cash equivalents, beginning of period         15,522                  55
                                                     --------            -------- 
Cash and cash equivalents, end of period             $ 22,579            $    101
                                                     ========            ========  
Supplemental disclosure                                                   
New York City unincorporated business tax paid       $    106            $    104
                                                     ========            ========  
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                       17
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)
                                        


(1)  The condensed financial statements included herein have been prepared
     without audit in accordance with the instructions to Form 10-Q pursuant to
     the rules and regulations of the Securities and Exchange Commission.
     Certain information and footnote disclosures normally included in financial
     statements prepared in accordance with generally accepted accounting
     principles have been condensed or omitted pursuant to such rules and
     regulations.  In the opinion of PIMCO Partners, G.P., the General Partner,
     all adjustments, consisting only of normal recurring adjustments, necessary
     for a fair presentation of (a) the financial condition at September 30,
     1998 and December 31, 1997, (b) the results of operations for the three and
     nine month periods ended September 30, 1998 and July 31, 1997, and (c) the
     cash flows for the nine-month periods ended September 30, 1998 and July 31,
     1997, for PIMCO Advisors Holdings L.P. ("PIMCO Holdings")  (formerly
     Oppenheimer Capital, L.P) have been made.  It is suggested that these
     unaudited condensed financial statements be read in conjunction with the
     financial statements and notes included in PIMCO Holdings' Annual Report on
     Form 10-K for the year ended December 31, 1997.  Certain reclassifications
     have been made to conform the prior period presentation to the current
     period presentation.  These interim results may not be indicative of the
     results which may occur in the future.  (See - Management's Discussion and
     Analysis of Financial Condition and Results of Operations - Comparative
     Results of Operations).

(2)  PIMCO Holdings is a publicly traded limited partnership owned .01% by its
     general partner, PIMCO Partners, G.P. and 99.99% by its public limited
     partners ("Unitholders").  PIMCO Holdings' sole business is its ownership
     of an approximate 44% interest (approximately 48.3 million GP Units) in
     PIMCO Advisors L.P. ("PIMCO Advisors"), a registered investment advisor.
     PIMCO Partners, G.P. and other private holders hold the remaining interests
     in PIMCO Advisors.  The financial statements of PIMCO Holdings should be
     read in conjunction with the consolidated financial statements of PIMCO
     Advisors.

     On November 4, 1997, PIMCO Advisors acquired Oppenheimer Group, Inc.
     ("Opgroup"), whose subsidiary Oppenheimer Financial Corp. ("Opfin") owned
     the 32.4% managing general partner interest in Oppenheimer Capital and the
     one percent general partner interest in PIMCO Holdings.  In the
     transaction, Opgroup became a subsidiary of PIMCO Advisors, and the Opgroup
     stockholders received 2.1 million PIMCO Advisors Class A units and rights
     to exchange up to $230 million of outstanding term notes of Opgroup for an
     additional 6.9 million PIMCO Advisors Class A units at $33 1/3 per unit.
     In connection with the transaction, PIMCO Advisors split the one percent
     general partner interest in PIMCO Holdings into a .01% general partner
     interest and a .99% limited partner interest, and sold the general partner
     interest to its general partner for $80,000, its approximate book value.
     The purchase method of accounting was used by PIMCO Advisors to record the
     acquisition of Opgroup.

     On November 30, 1997, Oppenheimer Capital merged with a subsidiary of PIMCO
     Advisors, with Oppenheimer Capital surviving (the "OpCap Merger").  In the
     OpCap Merger, PIMCO Advisors acquired from PIMCO Holdings its 67.6% general
     partner interest in Oppenheimer Capital in exchange for 26.1 million PIMCO
     Advisors Class A units, representing an approximate 24% general partner
     interest in PIMCO Advisors.  As a result, Oppenheimer Capital became a
     wholly-owned subsidiary of PIMCO Advisors and the limited partner units of
     PIMCO Holdings came to represent an indirect investment in the business of
     PIMCO Advisors.  On December 1, 1997, PIMCO Holdings effected a 1.67 for 1
     split of the PIMCO Holding units, so

                                       18
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)
                                  (continued)
                                        
     that each PIMCO Holdings unit outstanding after the split represented an
     economic interest in one PIMCO Advisors unit.  The transaction was
     accounted for at book value of PIMCO Advisors, as a transaction between
     related parties.

     On December 31, 1997, PIMCO Advisors caused its 19.5 million publicly held
     units to be contributed to PIMCO Holdings in exchange for an equal number
     of PIMCO Holdings units.  As a result, PIMCO Advisors ceased to be publicly
     traded, and PIMCO Holdings' general partner interest in PIMCO Advisors
     increased to approximately 43%.  Concurrently, PIMCO Holdings New York
     Stock Exchange trading symbol was changed from "OCC" to "PA".


     Prior to November 4, 1997, PIMCO Holdings was a publicly traded limited
     partnership owned 1% by its general partner, Opfin and 99% by its public
     limited partners.  PIMCO Holdings sole business was its ownership of a
     67.6% interest in Oppenheimer Capital, a registered investment adviser.
     Opfin held the remaining 32.4% interest in Oppenheimer Capital.

(3)  Effective December 1, 1997, PIMCO Holdings effected a 1.67 for 1 unit split
     of PIMCO Holdings units.  For purposes of these financial statements, all
     units outstanding, and all per unit amounts, have been restated to reflect
     the split of the PIMCO Holdings units.

     Prior to the OpCap Merger, PIMCO Holdings reported its results of
     operations and its financial position based on an April 30 fiscal year end.
     Upon completion of the OpCap Merger, PIMCO Holdings changed its fiscal year
     to a calendar year to correspond with that of PIMCO Advisors.  Accordingly,
     current calendar quarter information is reported and compared with the
     historical quarterly information for the fiscal quarter ending within the
     corresponding calendar quarter of the prior year.

(4)  Basic net income per unit is computed based on the weighted average number
     of units outstanding.  Diluted net income per unit is computed assuming the
     exercise of dilutive unit options at the operating partnership and the
     resulting impact on the equity in earnings of that partnership attributable
     to PIMCO Holdings.  See Exhibit 11 for the computation of the effect of the
     dilution at the operating partnership on PIMCO Holdings' net income per
     unit during the periods.

     Distributions on the units outstanding are paid quarterly in arrears 30
     days after the end of the quarter to unitholders of record as of the last
     day of the quarter.

(5)  As a result of the Omnibus Budget Reconciliation Act of 1993 and a special
     tax election which PIMCO Holdings has made, units purchased in the open
     market after August 10, 1993 have a substantial portion of the purchase
     price amortized over a fifteen year period.  Taking into account such
     amortization tax benefits (which depend in part on the particular
     unitholder's purchase price), partnership distributions are expected to
     significantly exceed net taxable income for units purchased after August
     10, 1993.  Amortization deductions will decrease the unitholder's tax basis
     of such units, and will likely be recaptured as ordinary income upon
     disposition of the units.

                                       19
<PAGE>
 
                          PIMCO ADVISORS HOLDINGS L.P.
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)
                                  (continued)
                                        

     Each year, a Schedule K-1 is sent to each unitholder identifying their
     amortization tax benefit, if applicable.  Under federal tax law, a
     unitholder is required to pay tax on their allocable share of the
     partnership's income regardless of the amount of distributions made by the
     partnership.  As individual tax situations may vary, each prospective
     purchaser of units is urged to consult their tax advisor.

                                       20
<PAGE>
 
                     PIMCO ADVISORS L.P. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                  (Unaudited)
                                        
<TABLE>
<CAPTION>

                                                                     September 30,      December 31,
                                                                     -------------      ------------
                                                                         1998              1997  
                                                                         ----              ----
                                                                          (Dollars in thousands)
<S>                                                                    <C>                 <C>
ASSETS                                                     
Current assets:                                            
 Cash and cash equivalents                                             $   89,918        $   34,301
 Short term investments                                                    73,917            33,611
 Fees receivable                                                          161,381           148,283
 Other current assets                                                      11,323             8,044
                                                                       ----------        ----------
          Total current assets                                            336,539           224,239
Investment in unconsolidated partnerships                                   4,005             4,336
Fixed assets  net of accumulated depreciation and amortization             18,566            15,418
Intangible assets  net of accumulated amortization                      1,019,580         1,060,869
Other non current assets                                                   52,643            30,022
                                                                       ----------        ----------
          Total assets                                                 $1,431,333        $1,334,884
                                                                       ==========        ==========
LIABILITIES
Current liabilities:
  Accounts payable, accrued expenses and other current liabilities     $   52,349        $   46,258
  Accrued compensation                                                     88,087            50,033
  Distribution payable                                                     69,691            61,786
  Short term borrowings                                                    75,000            30,000
                                                                       ----------        ----------
  Total current liabilities                                               285,127           188,077
Long term notes                                                            80,484            83,129
Other non current liabilities                                               8,091             9,613
                                                                       ----------        ----------
          Total liabilities                                               373,702           280,819
                                                                       ----------        ----------
PARTNERS' CAPITAL
General Partner (49,095,713 units issued and outstanding at
 September 30, 1998 and 46,336,184 units issued and outstanding at
 December 31, 1997)                                                       795,969           812,884
 
 
Class A Limited Partners (60,087,422 units issued and outstanding at
 September 30, 1998 and 27,201,200 units issued and outstanding at
 December 31, 1997)                                                       344,245           246,950
 
 
Class B Limited Partners (no units outstanding at September 30, 1998
 and 32,993,050 units issued and outstanding at December 31, 1997)             --            65,662
 
Unamortized compensation                                                  (82,583)          (71,431)
                                                                       ----------        ----------
          Total Partners' Capital                                       1,057,631         1,054,065
                                                                       ----------        ----------
          Total liabilities and partners' capital                      $1,431,333        $1,334,884
                                                                       ==========        ==========
</TABLE>



The accompanying notes are an integral part of these financial statements.

                                       21
<PAGE>
 
                     PIMCO ADVISORS L.P. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                                        
<TABLE>
<CAPTION>
                                                           For The Three Months                For The Nine Months
                                                                  Ended                              Ended
                                                       September 30,  September 30,        September 30,  September 30,
                                                       -------------  -------------        -------------  -------------  
                                                           1998           1997                  1998           1997 
                                                           ----           ----                  ----           ----   
                                                                             (Dollars in thousands
                                                                            except per unit amounts)
<S>                                                    <C>            <C>                  <C>            <C> 
REVENUES
Investment advisory fees:
      Private accounts                                   $135,109        $ 66,550             $406,470       $182,365
      Proprietary Funds                                    57,518          43,679              158,141        119,876
 Distribution and servicing fees                           21,310          14,888               59,795         41,969
                                                         --------        --------             --------       --------
      Total revenues                                      213,937         125,117              624,406        344,210
                                                         --------        --------             --------       --------
EXPENSES                                                                                                  
 Compensation and benefits                                 88,898          55,533              262,990        151,560
 Commissions                                               20,048          11,654               57,073         32,189
 Amortization of intangible assets, Restricted Unit                                                       
  and   Option Plans                                       20,374          10,353               60,205         30,999
                                                                                                          
 General and administrative                                11,449           6,939               31,256         18,834
 Occupancy and equipment                                    6,169           2,452               16,729          7,483
 Other                                                     15,747           6,127               42,999         20,484
                                                         --------         -------             --------       --------
      Total expenses                                      162,685          93,058              471,252        261,549
                                                         --------         -------             --------       --------
Net income                                               $ 51,252         $32,059             $153,154       $ 82,661
                                                         ========         =======             ========       ========
                                                                                                          
Net income per unit: 
 Basic net income per General Partner and Class A                                                         
  Limited Partner Unit         
                                                         $   0.47         $  0.40             $   1.42       $   1.06
                                                         ========         =======             ========       ========
 Diluted net income per General Partner and Class A                                                       
  Limited Partner Unit                                   $   0.45         $  0.40             $   1.35       $   1.06
                                                         ========         =======             ========       ========
                                                         
</TABLE>




The accompanying notes are an integral part of these financial statements.

                                       22
<PAGE>
 
                     PIMCO ADVISORS L.P. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                            For The Nine      For The Nine          
                                                               Months            Months            
                                                               Ended             Ended             
                                                           September 30,     September 30,          
                                                           -------------     -------------          
                                                                1998             1997              
                                                                ----             ----               
                                                                (Dollars in thousands)
Cash Flows from Operating Activities:
<S>                                                        <C>               <C>                   
Net income                                                     $153,154          $ 82,661          
Adjustments to reconcile net income to                                                             
net cash provided by operating activities:                                                         
 Depreciation, amortization                                                                        
 Restricted Unit & Option Plans                                  18,916             3,993          
 Equity in loss of unconsolidated partnership                        71               351          
 Unrealized loss (gain) on investments                              811            (1,257)          
 Gain on sale of securities                                        (195)               --          
 Issuance of restricted units in lieu of directors fees              40               121          
 Change in operating assets and liabilities:                                                        
    Change in fees receivable                                   (13,098)          (15,345)          
    Change in other assets                                      (31,250)          (14,843)          
    Change in accrued liabilities and other current                                                
     liabilities                                                  6,091            (9,626)          
    Change in accrued compensation                               38,054            27,058          
    Change in other long term liabilities                        (1,522)            7,073          
                                                              ---------         ---------          
Net cash provided by operating activities                       223,148           112,502          
                                                              ---------         ---------
Cash Flows from Investing Activities:                                                              
Purchase of fixed assets                                         (7,520)           (2,805)          
Proceeds from sale of fixed assets                                   33                 3          
Notes receivable advances                                        (1,096)             (521)          
Purchase of investments                                         (57,340)          (45,713)          
Sale of investments                                              16,955            35,201          
Distribution from (Investment in) unconsolidated
 limited partnership                                                603            (2,764)          
                                                              ---------         ---------          
Net cash used in investing activities                           (48,365)          (16,599)          
                                                              ---------         ---------          
Cash Flows from Financing Activities:                                                              
Short term borrowings                                            45,000                --          
Cash distributions paid                                        (192,687)         (104,042)          
Issuance of limited partnership units to deferred                                                  
 compensation plan trust                                         23,898                --          
Capital contribution from General Partner                            16                --          
Issuance of limited partnership units on exercise of                                               
 options                                                          4,607                --          
                                                              ---------         ---------          
Net cash used in financing activities                          (119,166)         (104,042)          
                                                              ---------         ---------          
Net increase (decrease) in cash and cash equivalents             55,617            (8,139)          
Cash and cash equivalents, beginning of period                   34,301            41,312          
                                                              ---------         ---------          
Cash and cash equivalents, end of period                      $  89,918         $  33,173          
                                                              =========         =========          
Supplemental disclosures                                                                           
Income tax paid                                               $   7,110         $     279          
                                                              =========         =========          
Interest paid                                                 $   5,941         $      67          
                                                              =========         =========           
</TABLE> 

The accompanying notes are an integral part of these financial statements.

                                       23
<PAGE>
 
                              PIMCO ADVISORS L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                                        
(1)  The condensed consolidated financial statements included herein have been
     prepared without audit in accordance with the instructions to Form 10-Q
     pursuant to the rules and regulations of the Securities and Exchange
     Commission. Certain information and footnote disclosures normally included
     in financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted pursuant to such rules
     and regulations. In the opinion of the general partners, all adjustments,
     consisting only of normal recurring adjustments, necessary for a fair
     statement of (a) the financial condition at September 30, 1998 and December
     31, 1997, (b) the results of operations for the three and nine month
     periods ended September 30, 1998 and 1997, and (c) the cash flows for the
     nine-month periods ended September 30, 1998 and 1997, for PIMCO Advisors
     L.P. ("PIMCO Advisors") have been made. It is suggested that these
     unaudited condensed consolidated financial statements be read in
     conjunction with the consolidated financial statements and notes included
     in PIMCO Advisors Holdings' Annual Report on Form 10-K for the year ended
     December 31, 1997. Certain reclassifications have been made to conform the
     prior period presentation to the current period presentation. These interim
     results may not be indicative of the results which may occur in the future.
     (See Item 2 - Management's Discussion and Analysis of Financial Condition
     and Results of Operations - Results of Operations).

(2)  PIMCO Advisors and its subsidiaries were formed on November 15, 1994, when
     Pacific Asset Management Company (a subsidiary of Pacific Life Insurance
     Company) merged certain of its investment management businesses and
     substantially all of its assets (the "PFAMCo Group") into Thomson Advisory
     Group L.P. ("TAG LP") (the "Consolidation").

     On November 4, 1997, PIMCO Advisors acquired Oppenheimer Group, Inc.
     ("Opgroup"), whose subsidiary Oppenheimer Financial Corp. ("Opfin") owned
     the 32.4% managing general partner interest in Oppenheimer Capital and the
     one percent general partner interest in PIMCO Advisors Holdings L.P.
     (formerly Oppenheimer Capital, L.P.) ("PIMCO Holdings"). In the
     transaction, Opgroup became a subsidiary of PIMCO Advisors, and the Opgroup
     stockholders received 2.1 million PIMCO Advisors Class A units and rights
     to exchange up to $230 million of outstanding term notes of Opgroup for an
     additional 6.9 million PIMCO Advisors Class A units at $33 1/3 per unit. In
     connection with the transaction, PIMCO Advisors split the one percent
     general partner interest in PIMCO Holdings into a .01% general partner
     interest and a .99% limited partner interest, and sold the general partner
     interest to its general partner for $80,000, its approximate book value.
     The purchase method of accounting was used by PIMCO Advisors to record the
     acquisition of Opgroup.  As a result, the consolidated statement of
     operations includes the operations of Oppenheimer Capital since November 4,
     1997.

     On November 30, 1997, Oppenheimer Capital merged with a subsidiary of PIMCO
     Advisors, with Oppenheimer Capital surviving (the "OpCap Merger"). In the
     OpCap Merger, PIMCO Advisors acquired from PIMCO Holdings its 67.6% general
     partner interest in Oppenheimer Capital in exchange for 26.1 million PIMCO
     Advisors Class A units, an approximate 24% general partner interest in
     PIMCO Advisors.  As a result, Oppenheimer Capital became a wholly-owned
     subsidiary of PIMCO Advisors and the limited partner units of PIMCO
     Holdings came to represent an indirect investment in the business of PIMCO
     Advisors.  The transaction was accounted for at book value of PIMCO
     Advisors, as a transaction between related parties.

                                       24
<PAGE>
 
                              PIMCO ADVISORS L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                                  (continued)


     On December 31, 1997, PIMCO Advisors caused its 19.5 million publicly held
     units to be contributed to PIMCO Holdings in exchange for an equal number
     of PIMCO Holdings units. As a result, PIMCO Advisors ceased to be publicly
     traded, and PIMCO Holdings general partner interest in PIMCO Advisors
     increased to approximately 43%. Concurrently, PIMCO Holdings' New York
     Stock Exchange trading symbol was changed from "OCC" to "PA".

(3)  Basic net income per unit is computed based on the weighted average number
     of units outstanding. Diluted net income per unit is computed assuming the
     exercise of dilutive unit options. See Exhibit 11 for the computation of
     the effect of the dilution per unit during the periods.

                                       25
<PAGE>
 
PART II: OTHER INFORMATION

Item 1.  Legal Proceedings.  None

Item 2.  Changes in Securities and Use of Proceeds.  None

Item 3.  Defaults Upon Senior Securities.  None

Item 4.  Submission of Matters to a Vote of Security Holders.  None

Item 5.  Other Information.

     Sale of Blairlogie Capital Management.

     PIMCO Advisors L.P. entered into a Purchase and Sale Agreement, dated as of
October 24, 1998 with a subsidiary of Alleghany Asset Management, providing for
the sale of Blairlogie Capital Management to Alleghany.  Blairlogie Capital
Management is an Edinburgh, Scotland based investment management subsidiary of
PIMCO Advisors, which currently manages approximately $800 million in assets,
principally in non-U.S. equities.  The transaction is subject to regulatory and
other conditions including approval of Blairlogie's clients.  The transaction is
scheduled to close in the first quarter of 1999.

     Settlement of Class Action.

     On October 20, 1998, the Court of Chancery of the State of Delaware
approved the agreed upon settlement of the Oppenheimer Capital, L.P. Unitholders
Litigation in settlement of class action suits filed last year in connection
with the acquisition of Oppenheimer Capital.  Members of the class (comprising
generally beneficial owners of units of Oppenheimer Capital, L.P. at the close
of business on November 4, 1997) are receiving a special distribution of $0.777
per unit rounded down to the nearest penny per unitholder, which funds were
delivered to the transfer agent on October 30, 1998.

Item 6.  Exhibits and Reports on Form 8-K

         (a)  Exhibits

Exhibit No.      Description
-----------      -----------


  11             Computations of Net Income Per Unit.

  27             Financial Data Schedule.

         (b)  Reports on Form 8-K.  None

                                       26
<PAGE>
 
                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                            PIMCO Advisors Holdings L.P.     
                                                                             
                                                                             
                                            By:  /s/ William D. Cvengros     
                                                 ----------------------------
                                                 William D. Cvengros         
                                                 Chief Executive Officer     
                                                                             
                                                                             
                                            By:  /s/  Robert M. Fitzgerald   
                                                 ----------------------------
                                                 Robert M. Fitzgerald        
                                                 Principal Accounting Officer 



Date:  November 12, 1998

                                       27