UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-Q[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the Act)For the quarterly period ended June 30, 2011[ ] Transition Report Pursuant to Section 13 or 15(d) of the ActFor the transition period from __________ to ____________Commission File Number:000-30509Belcrest Capital Fund LLC(Exact Name of Registrant as Specified in Its Charter) Massachusetts
     04-3453080(State of Organization)
     (I.R.S. Employer Identification No.)Two International PlaceBoston, Massachusetts
     02110(Address of Principal Executive Offices)
     (Zip Code)Registrants Telephone Number, Including Area Code:
     617-482-8260
  None (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 Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                                  Yes X No __ Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (¶232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes __ No __ Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Act. Large Accelerated FilerXAcceleratedFiler__      Non-Accelerated Filer __      Smaller Reporting Company __ (Do not check if a smaller reporting company) Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes __ NoX




Belcrest Capital Fund LLCIndex to Form 10-QPART I. FINANCIAL INFORMATION
     PageItem 1.
     Financial Statements (Unaudited).
     3Condensed Consolidated Statements of Assets and Liabilities as of
     3June 30, 2011 and December 31, 2010Condensed Consolidated Statements of Operations for the Three Months Ended
     4June 30, 2011 and 2010 and for the Six Months Ended June 30, 2011 and 2010Condensed Consolidated Statements of Changes in Net Assets for the Six
     6Months Ended June 30, 2011 and the Year Ended December 31, 2010Condensed Consolidated Statements of Cash Flows for the Six Months
     7Ended June 30, 2011 and 2010Financial Highlights for the Six Months Ended June 30, 2011 and the
     8Year Ended December 31, 2010Notes to Condensed Consolidated Financial Statements as of June 30, 2011
     9Item 2.
     Managements Discussion and Analysis of Financial Condition
     20and Results of Operations (MD&A).Item 3.
     Quantitative and Qualitative Disclosures About Market Risk.
     23Item 4.
     Controls and Procedures.
     25PART II.
     OTHER INFORMATIONItem 1.
     Legal Proceedings.
     26Item 1A.
     Risk Factors.
     26Item 2.
     Unregistered Sales of Equity Securities and Use of Proceeds.
     26Item 3.
     Defaults Upon Senior Securities.
     26Item 4.
     (Removed and Reserved).
     26Item 5.
     Other Information.
     26Item 6.
     Exhibits.
     27SIGNATURES
     28EXHIBIT INDEX
     29
  2




PART I. FINANCIAL INFORMATIONItem 1. Financial Statements.BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Assets and Liabilities (Unaudited)June 30, 2011
     December 31, 2010Assets:Investment in Belvedere Capital Fund Company LLC(Belvedere Company)
     $                    670,817,935
     $                659,946,022Investment in Partnership Preference Units
     15,749,770
     72,580,818Investment in Real Estate Joint Venture
     69,133,726
     55,149,311Investment in Co-owned Property
     2,639,365
     2,926,700Short-term investment
     2,537,607
     3,230,918Total investments, at value
     $                   760,878,403
     $                793,833,769Cash
     135,987
     1,222,976Interest receivable from affiliated investment
     247
     663Other assets
     106,923
     260,879Total assets
     $                   761,121,560
     $                795,318,287Liabilities:Loan payable  Credit Facility
     $                     78,000,000
     $                144,000,000Payable for Fund shares redeemed
     80,000
     1,546,143Interest payable for open interest rate swap agreements
     2,496
     1,848Open interest rate swap agreements, at value
     689,727
     710,801Payable to affiliate for investment advisory and administrative fees
     213,846
     238,957Payable to affiliate for servicing fee
     84,829
     70,992Other accrued expenses:Interest expense
     48,718
     137,324Other expenses and liabilities
     509,470
     576,091Total liabilities
     $                   79,629,086
     $                147,282,156Net assets
     $                 681,492,474
     $                648,036,131Shareholders capital
     $                 681,492,474
     $               648,036,131Shares outstanding (unlimited number of shares authorized)
     6,451,898
     6,671,766Net asset value and redemption price per share
     $                          105.63
     $                          97.13
  See notes to unaudited condensed consolidated financial statements 3




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Operations (Unaudited)Three Months Ended
     Six Months EndedJune 30, 2011
     June 30, 2010
     June 30, 2011
     June 30, 2010Investment Income:Dividends allocated from Belvedere Company(net of foreign taxes, $172,570, $112,055, $186,797 and $142,739,respectively)
     $                  3,533,803
     $              3,370,892
     $                6,476,149
     $           6,538,880Interest allocated from Belvedere Company
     2,376
     2,366
     4,900
     4,448Expenses allocated from Belvedere Company
     (1,052,545)
     (1,052,364)
     (2,108,123)
     (2,141,511)Net investment income allocated from Belvedere Company
     $                  2,483,634
     $              2,320,894
     $                4,372,926
     $           4,401,817Net investment income allocated from Real Estate Joint Ventures
     2,009,286
     4,528,404
     4,142,918
     8,732,589Distributions from Partnership Preference Units
     308,856
     1,515,390
     1,480,835
     3,030,781Net investment income allocated from Co-owned Property
     155,205
     145,486
     312,665
     293,474Interest
     -
     -
     -
     240Interest allocated from affiliated investments
     2,089
     1,320
     7,574
     2,526Expenses allocated from affiliated investments
     (205)
     (126)
     (566)
     (616)Total investment income
     $                  4,958,865
     $               8,511,368
     $              10,316,352
     $         16,460,811Expenses:Investment advisory and administrative fees
     $                    650,111
     $               1,088,369
     $               1,372,436
     $           2,198,851Servicing fee
     84,828
     56,189
     164,288
     115,597Interest expense on Credit Facility
     480,654
     1,146,818
     1,317,571
     1,686,390Custodian and transfer agent fee
     13,230
     15,617
     26,831
     29,564Miscellaneous
     92,642
     97,424
     221,885
     246,726Total expenses
     $                 1,321,465
     $              2,404,417
     $              3,103,011
     $          4,277,128Deduct Reduction of custodian and transfer agent fee
     $                              -
     $                        17
     $                       398
     $                    17Net expenses
     $                 1,321,465
     $              2,404,400
     $              3,102,613
     $          4,277,111Net investment income
     $                 3,637,400
     $              6,106,968
     $              7,213,739
     $        12,183,700
  See notes to unaudited condensed consolidated financial statements 4




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Operations (Unaudited) (Continued)Three Months Ended
     Six Months EndedJune 30, 2011
     June 30, 2010
     June 30, 2011
     June 30, 2010Realized and Unrealized Gain (Loss)Net realized gain (loss) Investment and foreign currency transactions allocated fromBelvedere Company (identified cost basis)(1)
     $       2,051,838
     $        (933,500)
     $      5,632,155
     $        540,189Investment transactions in Partnership Preference Units(identified cost basis)
     (390,410)
     19,543
     (2,820,044)
     39,427Investment transactions in Real Estate Joint Ventures
     -
     -
     1,327,381
     -Investment transactions allocated from affiliated investments
     82
     24
     149
     274Interest rate swap agreements(2)
     (56,495)
     (1,048,186)
     (111,935)
     (2,781,940)Net realized gain (loss)
     $       1,605,015
     $      (1,962,119)
     $      4,027,706
     $    (2,202,050)Change in unrealized appreciation (depreciation) Investments and foreign currency allocatedfrom Belvedere Company (identified cost basis)
     $      (1,725,962)
     $      (90,936,938)
     $      21,947,303
     $   (55,029,003)Investment in Partnership Preference Units(identified cost basis)
     2,253,378
     592,013
     13,685,614
     1,020,552Investment in Real Estate Joint Ventures
     9,971,169
     17,555,400
     12,600,263
     4,859,814Investment in Co-owned Property
     (600,000)
     (325,000)
     (600,000)
     (700,000)Interest rate swap agreements
     (50,639)
     856,369
     21,074
     2,476,428Net change in unrealized appreciation (depreciation)
     $       9,847,946
     $      (72,258,156)
     $      47,654,254
     $    (47,372,209)Net realized and unrealized gain (loss)
     $     11,452,961
     $      (74,220,275)
     $      51,681,960
     $    (49,574,259)Net increase (decrease) in net assets from operations
     $     15,090,361
     $      (68,113,307)
     $      58,895,699
     $    (37,390,559)
  (1)
     Amounts include net realized gain (loss) from redemptions in-kind of $2,428,072, $(519,917), $6,176,679 and $564,841, respectively.(2)
     Amounts represent net interest incurred in connection with periodic settlement of interest rate swap agreements (Note 7). See notes to unaudited condensed consolidated financial statements 5




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Changes in Net Assets (Unaudited)Six Months Ended
     Year EndedJune 30, 2011
     December 31, 2010Increase (Decrease) in Net Assets:From operations Net investment income
     $                         7,213,739
     $                  22,397,199Net realized gain (loss) from investment transactions, foreigncurrency transactions and interest rate swap agreements
     4,027,706
     (137,648,888)Net change in unrealized appreciation (depreciation) of investments,foreign currency and interest rate swap agreements
     47,654,254
     234,813,836Net increase in net assets from operations
     $                       58,895,699
     $                119,562,147Transactions in Fund shares Net asset value of Fund shares issued to Shareholdersin payment of distributions declared
     $                            843,077
     $                       600,452Net asset value of Fund shares redeemed
     (23,616,619)
     (122,796,610)Net decrease in net assets from Fund share transactions
     $                    (22,773,542)
     $             (122,196,158)Distributions Distributions to Shareholders
     $                      (2,665,814)
     $                 (2,007,089)Total distributions
     $                      (2,665,814)
     $                 (2,007,089)Net increase (decrease) in net assets
     $                      33,456,343
     $                 (4,641,100)Net assets:At beginning of period
     $                    648,036,131
     $                652,677,231At end of period
     $                    681,492,474
     $                648,036,131
  See notes to unaudited condensed consolidated financial statements 6




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Cash Flows (Unaudited)Six Months EndedIncrease (Decrease) in Cash:
     June 30, 2011
     June 30, 2010Cash Flows From Operating Activities Net increase (decrease) in net assets from operations
     $                   58,895,699
     $             (37,390,559)Adjustments to reconcile net increase (decrease) in net assets fromoperations to net cash flows provided by operating activities Net investment income allocated from Belvedere Company
     (4,372,926)
     (4,401,817)Net investment income allocated from Real Estate Joint Ventures
     (4,142,918)
     (8,732,589)Payments from Real Estate Joint Ventures
     4,086,147
     7,381,690Net investment income allocated from Co-owned Property
     (312,665)
     (293,474)Amortization of deferred loan costsCredit Facility
     153,956
     153,956(Increase) decrease in affiliated investment and interest receivable from affiliated investment
     693,876
     (571,025)Increase in other assets
     -
     (4,000)Increase (decrease) in interest payable for open interest rate swap agreements
     648
     (58,212)Decrease in payable to affiliate for investment advisory and administrative fees
     (25,111)
     (9,103)Increase (decrease) in payable to affiliate for servicing fee
     13,837
     (19)Increase (decrease) in accrued interest and other accrued expenses and liabilities
     (155,227)
     22,533Increases in Partnership Preference Units
     (3,495)
     (933)Proceeds from sales of Partnership Preference Units
     67,700,113
     404,088(Increase) decrease in investment in Belvedere Company
     (4,000,000)
     1,500,000Net interest incurred on interest rate swap agreements
     (111,935)
     (2,781,940)Net realized (gain) loss from investment transactions, foreign currencytransactions and interest rate swap agreements
     (4,027,706)
     2,202,050Net change in unrealized (appreciation) depreciation of investments,foreign currency and interest rate swap agreements
     (47,654,254)
     47,372,209Net cash flows provided by operating activities
     $              66,738,039
     $               4,792,855Cash Flows From Financing Activities Proceeds from Credit Facility
     $                            -
     $            193,000,000Repayments of Credit Facility
     (66,000,000)
     (197,000,000)Payment for deferred loan costs  Credit Facility
     -
     (575,000)Payments for Fund shares redeemed
     (2,291)
     (3,363)Distributions paid to Shareholders
     (1,822,737)
     (1,406,637)Net cash flows used in financing activities
     $           (67,825,028)
     $              (5,985,000)Net decrease in cash
     $            (1,086,989)
     $              (1,192,145)Cash at beginning of period
     $              1,222,976
     $                1,212,932Cash at end of period
     $                 135,987
     $                    20,787Supplemental Disclosure and Non-cash Operating andFinancing Activities Interest paid on loan  Credit Facility
     $             1,252,221
     $               1,468,912Interest paid on interest rate swap agreements, net
     $               111,287
     $               2,840,152Reinvestment of distributions paid to Shareholders
     $               843,077
     $                  600,452Market value of securities distributed in payment of redemptions
     $           25,080,471
     $             69,612,316
  See notes to unaudited condensed consolidated financial statements 7




BELCREST CAPITAL FUND LLCFinancial Highlights (Unaudited)Six Months Ended
     Year EndedJune 30, 2011
     December 31, 2010Net asset value  Beginning of period
     $                97.130
     $                  80.330Income (loss) from operationsNet investment income(1)
     $                  1.098
     $                   3.048Net realized and unrealized gain
     7.802
     14.002Total income from operations
     $                8.900
     $               17.050DistributionsDistributions to Shareholders
     $               (0.400)
     $                 (0.250)Total distributions
     $              (0.400)
     $               (0.250)Net asset value  End of period
     $            105.630
     $               97.130Total Return(2)
     9.19%(3)
     21.26%Ratios as a percentage of average net assetsInvestment advisory and administrative fees, servicing feeand other operating expenses(4)(5)
     1.17%(8)
     1.50%Interest and other borrowing costs(4)(6)
     0.40%(8)
     0.63%Total expenses
     1.57%(8)
     2.13%Net investment income(6)
     2.17%(8)
     3.66%Ratios as a percentage of average gross assets(7)Investment advisory and administrative fees, servicing feeand other operating expenses(4)(5)
     0.81%(8)
     0.77%Interest and other borrowing costs(4)(6)
     0.28%(8)
     0.32%Total expenses
     1.09%(8)
     1.09%Net investment income(6)
     1.50%(8)
     1.87%Supplemental DataNet assets, end of period (000s omitted)
     $            681,492
     $         648,036Portfolio turnover of Tax-Managed Growth Portfolio
     2%(3)
     2%
  (1)
     Calculated using average shares outstanding.(2)
     Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested.(3)
     Not annualized.(4)
     Includes the expenses of Belcrest Capital Fund LLC (Belcrest Capital) and Belcrest Realty Corporation (Belcrest Realty).(5)
     Includes Belcrest Capital's share of Belvedere Capital Fund Company LLC's allocated expenses, including those expenses allocated from Tax- Managed Growth Portfolio.(6)
     Ratios do not include net interest earned or incurred in connection with interest rate swap agreements. Had such amounts been included, ratios would be lower or higher.(7)
     Average gross assets means the average daily amount of the value of all assets of Belcrest Capital (not including its investment in Belcrest Realty) plus all assets of Belcrest Realty minus the sum of their liabilities other than the principal amount of money borrowed. For this purpose, the assets and liabilities of Belcrest Realty include its ratable share of the assets and liabilities of its direct and indirect subsidiaries, real estate joint ventures and co-owned real property investments.(8)
     Annualized. See notes to unaudited condensed consolidated financial statements 8




BELCREST CAPITAL FUND LLCas of June 30, 2011 Notes to Condensed Consolidated Financial Statements (Unaudited) 1 Basis of Presentation The condensed consolidated interim financial statements of Belcrest Capital Fund LLC (Belcrest Capital) and its subsidiaries (collectively, the Fund) have been prepared, without audit, in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations. All adjustments, consisting of normal recurring adjustments, have been included. Management believes that the disclosures are adequate to present fairly the financial position, results of operations, cash flows and financial highlights as of the dates and for the periods presented. It is suggested that these interim financial statements be read in conjunction with the annual consolidated financial statements and notes for the year ended December 31, 2010 included in the Funds Annual Report on Form 10-K dated February 28, 2011. Results for interim periods are not necessarily indicative of those to be expected for the full fiscal year. The condensed consolidated statement of assets and liabilities at December 31, 2010 and the condensed consolidated statement of changes in net assets and the financial highlights for the year then ended have been derived from the December 31, 2010 audited financial statements but do not include all of the information and footnotes required by GAAP for complete financial statements as permitted by the instructions to Form 10-Q and Article 10 of Regulation S-X. 2 Investment and Other Valuations The Fund invests in shares of Belvedere Capital Fund Company LLC (Belvedere Company). Belvedere Companys only investment is an interest in Tax-Managed Growth Portfolio (the Portfolio), a diversified, open-end management investment company registered under the Investment Company Act of 1940, as amended (the 1940 Act), the value of which is derived from a proportional interest therein. Valuation of the Portfolios securities is discussed in Note 1A of the Portfolios Notes to Financial Statements, which are included in the Funds Annual Report on Form 10-K dated February 28, 2011. The Fund also invests in real estate investments through a controlled subsidiary, Belcrest Realty Corporation (Belcrest Realty). Such investments include preferred equity interests in real estate operating partnerships (Partnership Preference Units) affiliated with publicly traded real estate investment trusts (REITs), an investment in a real estate joint venture (Real Estate Joint Venture) and a tenancy-in-common interest in real property (Co-owned Property). In November 2010, Belcrest Realty sold its interest in the Allagash Property Trust (Allagash) Real Estate Joint Venture. The Real Estate Joint Venture and Co-owned Property are referred to herein collectively as Subsidiary Real Estate Investments. The Fund may also invest cash on a temporary basis in Eaton Vance Cash Reserves Fund, LLC (Cash Reserves Fund). Cash Reserves Fund is an affiliated investment company managed by Eaton Vance Management (Eaton Vance). Additionally, Belcrest Capital has entered into interest rate swap agreements (Note 7). Boston Management and Research (Boston Management), a subsidiary of Eaton Vance, makes valuation determinations in accordance with the Funds policies. The valuation policies followed by the Fund are as follows: Market prices for the Funds investments in Partnership Preference Units and Subsidiary Real Estate Investments are not readily available. Such investments are stated in the Funds condensed consolidated financial statements at fair value which represents the amount at which Boston Management, as manager of Belcrest Realty, believes would be received to sell an asset in an orderly transaction (that is, not a 9




forced liquidation or distressed sale) between market participants under current market conditions. In valuing these investments, Boston Management considers relevant factors, data and information. Valuations of the Funds Partnership Preference Units and Subsidiary Real Estate Investments are inherently uncertain because they involve the use of assumptions and estimates. If the assumptions and estimates used in the valuations were to change, it could materially impact the fair value of the Funds holdings of Partnership Preference Units and Subsidiary Real Estate Investments. The fair value of property held by the Funds Subsidiary Real Estate Investments is based on appraisals provided by independent, licensed appraisers (Appraisers) and valuations, if applicable, prepared by Boston Management. The appraisals of properties are conducted by Appraisers on at least an annual basis. Appraisals of properties may be conducted more frequently than once a year if Boston Management determines that significant changes in economic circumstances, that may materially impact fair values, have occurred since the most recent appraisal. Each appraisal is conducted in accordance with the Uniform Standards of Professional Appraisal Practices (as well as other relevant standards). Boston Management reviews the appraisal of each property and generally relies on the assumptions and estimates made by the Appraiser when determining fair value. In deriving the fair value of a property, an Appraiser considers numerous factors, including the expected future cash flows from the property, recent sale prices for similar properties and, if applicable, the replacement cost of the property, in order to derive an indication of the amount that a prudent, informed purchaser-investor would pay for the property. For those properties not appraised by Appraisers in a given quarter, Boston Management will review the fair values of such properties and, if Boston Management believes it is warranted based on the appraisals of appraised properties or for other reasons, Boston Management may prepare a valuation of such properties considering results of operations, market conditions, significant changes in economic circumstances, recent independent appraisals of similar properties and/or other relevant facts or circumstances. In determining valuations, Boston Management follows a process consistent with industry practice and the practice of Appraisers, as described above. Valuations may occur more frequently than quarterly if it is determined by Boston Management that the current property valuation has changed materially since the most recent appraisal or valuation. Boston Management determines the fair value of the Funds equity interest in a Real Estate Joint Venture based on an estimate of the allocation of equity interests between Belcrest Realty and the unaffiliated minority investor of the Real Estate Joint Venture (the Operating Partner). This allocation is generally calculated by a third party specialist, using current valuations of the properties owned by the Real Estate Joint Venture. The specialist uses a financial model that considers (i) the terms of the joint venture agreement relating to allocation of distributable cash flow, (ii) the expected duration of the joint venture, and (iii) the projected property values and cash flows from the properties based on estimates used in the property valuations. The estimated allocation of equity interests between Belcrest Realty and the Operating Partner of a Real Estate Joint Venture is prepared quarterly and reviewed by Boston Management. Interim allocations of equity interests may be conducted more frequently than quarterly if Boston Management determines that significant changes in economic circumstances that may materially impact the allocation of equity interests have occurred since the most recent allocation. Boston Management determines the fair value of the Funds interest in Co-owned Property by applying the Funds ownership interest to the net asset value of the Co-owned Property. The fair value of the Partnership Preference Units is based on analysis and calculations performed on at least a monthly basis by a third party service provider. The service provider calculates an estimated price and yield (before accrued distributions) for each issue of Partnership Preference Units based on descriptions of such issue provided by Boston Management and certain publicly available information 10




including, but not limited to, the trading prices of publicly issued debt and/or preferred stock instruments of the same or similar issuers, which may be adjusted to reflect the illiquidity and other structural characteristics of the Partnership Preference Units (such as call provisions). Daily valuations of Partnership Preference Units are determined by adjusting prices from the service provider to account for accrued distributions under the terms of the Partnership Preference Units. If changes in relevant markets, events that materially affect an issuer or other events that have a significant effect on the price or yield of Partnership Preference Units occur, relevant prices or yields may be adjusted to take such occurrences into account. Boston Management reviews the analysis and calculations performed by the service provider. Boston Management generally relies on the assumptions and estimates made by the service provider when determining the fair value of the Partnership Preference Units. Cash Reserves Fund generally values its investment securities utilizing the amortized cost valuation technique in accordance with Rule 2a-7 under the 1940 Act. This technique involves initially valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. If amortized cost is determined not to approximate fair value, Cash Reserves Fund may value its investment securities based on available market quotations provided by a third party pricing service. Interest rate swap agreements are normally valued on the basis of valuations furnished daily by a third party pricing service. The valuations are based on the present value of fixed and projected floating rate cash flows over the term of the agreement. Future cash flows are discounted to their present value using swap quotations provided by electronic data services or by broker-dealers. Changes in the fair value of the Funds investments are recorded as unrealized appreciation (depreciation) in the condensed consolidated statements of operations. 3 Fair Value Measurements GAAP establishes a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three levels of the fair value hierarchy are described below. Level 1  Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;Level 2  Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly;Level 3  Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. In determining the fair value of its investments, the Fund uses appropriate valuation techniques based on available inputs. The Fund maximizes its use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. If market data is not readily available, fair value is based upon other significant unobservable inputs such as inputs that reflect the Funds own assumptions about the inputs market participants would use in valuing the investment. Investments valued using unobservable inputs are classified to the lowest level of any input that is most significant to the valuation. Thus, a valuation may be classified as Level 3 even though the valuation may include significant inputs that are readily observable. The Funds assets classified as Level 3 as of June 30, 2011 and December 31, 2010 represent 11.5% and 16.4%, respectively, of the Funds total assets. The following tables present for each of the hierarchy levels, the Funds assets and liabilities that are measured at fair value as of June 30, 2011 and December 31, 2010. 11




Fair Value Measurements at June 30, 2011Description
     Total
     Level 1
     Level 2
     Level 3AssetsInvestment in Belvedere Company
     $          670,817,935
     $                            -
     $           670,817,935
     $                       -Partnership Preference Units
     15,749,770
     -
     -
     15,749,770Real Estate Joint Venture
     69,133,726
     -
     -
     69,133,726Co-owned Property
     2,639,365
     -
     -
     2,639,365Short-term investment
     2,537,607
     -
     2,537,607
     -Total
     $          760,878,403
     $                             -
     $           673,355,542
     $       87,522,861LiabilitiesInterest rate swap agreements
     $                689,727
     $                           -
     $                 689,727
     $                        -Fair Value Measurements at December 31, 2010Description
     Total
     Level 1
     Level 2
     Level 3AssetsInvestment in Belvedere Company
     $      659,946,022
     $                         -
     $        659,946,022
     $                           -Partnership Preference Units
     72,580,818
     -
     -
     72,580,818Real Estate Joint Venture
     55,149,311
     -
     -
     55,149,311Co-owned Property
     2,926,700
     -
     -
     2,926,700Short-term investment
     3,230,918
     -
     3,230,918
     -Total
     $      793,833,769
     $                          -
     $       663,176,940
     $       130,656,829LiabilitiesInterest rate swap agreements
     $            710,801
     $                          -
     $              710,801
     $                          -
  The following tables present the changes in the Level 3 fair value category for the three months and six months ended June 30, 2011 and 2010. Level 3 Fair Value Measurements for theThree Months Ended June 30, 2011PartnershipPreference
     Real Estate
     Co-ownedUnits
     Joint Venture
     Property
     TotalBeginning balance as ofMarch 31, 2011
     $               28,864,427
     $           58,699,969
     $           3,084,160
     $         90,648,556Net realized loss
     (390,410)
     -
     -
     (390,410)Net change in unrealizedappreciation (depreciation)
     2,253,378
     9,971,169
     (600,000)
     11,624,547Proceeds from sales
     (14,977,625)
     -
     -
     (14,977,625)Net investment income(1)
     -
     2,009,286
     155,205
     2,164,491Other(2)
     -
     (1,546,698)
     -
     (1,546,698)Ending balance as ofJune 30, 2011
     $             15,749,770
     $            69,133,726
     $          2,639,365
     $          87,522,861Net change in unrealizedappreciation (depreciation) frominvestments still held atJune 30, 2011
     $                 353,290
     $               9,971,169
     $          (600,000)
     $           9,724,459
  12




Level 3 Fair Value Measurements for theThree Months Ended June 30, 2010PartnershipPreference
     Real Estate
     Co-ownedUnits
     Joint Ventures
     Property
     TotalBeginning balance as ofMarch 31, 2010
     $             69,529,804
     $            60,447,346
     $             2,108,851
     $          132,086,001Net realized gain
     19,543
     -
     -
     19,543Net change in unrealizedappreciation (depreciation)
     592,013
     17,555,400
     (325,000)
     17,822,413Net sales
     (209,899)
     -
     -
     (209,899)Net investment income(1)
     -
     4,528,404
     145,486
     4,673,890Other(2)
     -
     (3,745,093)
     -
     (3,745,093)Ending balance as ofJune 30, 2010
     $            69,931,461
     $           78,786,057
     $           1,929,337
     $          150,646,855Net change in unrealizedappreciation (depreciation) frominvestments still held atJune 30, 2010
     $                 605,805
     $           17,555,400
     $            (325,000)
     $           17,836,205Level 3 Fair Value Measurements for theSix Months Ended June 30, 2011PartnershipPreference
     Real Estate
     Co-ownedUnits
     Joint Venture
     Property
     TotalBeginning balance as ofDecember 31, 2010
     $             72,580,818
     $             55,149,311
     $             2,926,700
     $         130,656,829Net realized loss
     (2,820,044)
     -
     -
     (2,820,044)Net change in unrealizedappreciation (depreciation)
     13,685,614
     12,600,263
     (600,000)
     25,685,877Cost of purchases
     3,495
     -
     -
     3,495Proceeds from sales
     (67,700,113)
     -
     -
     (67,700,113)Net investment income(1)
     -
     4,142,918
     312,665
     4,455,583Other(2)
     -
     (2,758,766)
     -
     (2,758,766)Ending balance as ofJune 30, 2011
     $            15,749,770
     $            69,133,726
     $           2,639,365
     $           87,522,861Net change in unrealizedappreciation (depreciation) frominvestments still held atJune 30, 2011
     $                977,188
     $           12,600,263
     $            (600,000)
     $          12,977,451
  13




Level 3 Fair Value Measurements for theSix Months Ended June 30, 2010PartnershipPreference
     Real Estate
     Co-ownedUnits
     Joint Ventures
     Property
     TotalBeginning balance as ofDecember 31, 2009
     $           69,274,637
     $           72,575,344
     $           2,335,863
     $           144,185,844Net realized gain
     39,427
     -
     -
     39,427Net change in unrealizedappreciation (depreciation)
     1,020,552
     4,859,814
     (700,000)
     5,180,366Net sales
     (403,155)
     -
     -
     (403,155)Net investment income(1)
     -
     8,732,589
     293,474
     9,026,063Other(2)
     -
     (7,381,690)
     -
     (7,381,690)Ending balance as ofJune 30, 2010
     $           69,931,461
     $            78,786,057
     $           1,929,337
     $           150,646,855Net change in unrealizedappreciation (depreciation) frominvestments still held atJune 30, 2010
     $              1,046,926
     $              4,859,814
     $            (700,000)
     $              5,206,740
  (1)
     Represents net investment income recorded using the equity method of accounting.(2)
     Represents net capital distributions recorded using the equity method of accounting. 4 Investment Transactions The following table summarizes the Funds investment transactions, other than short-term investments, for the six months ended June 30, 2011 and 2010. Six Months EndedInvestment Transactions
     June 30, 2011
     June 30, 2010Increases in investment in Belvedere Company
     $                                 4,000,000
     $                                       -Decreases in investment in Belvedere Company
     $                               25,080,471
     $                      71,112,316Increases in Partnership Preference Units
     $                                        3,495
     $                                  933Decreases in Partnership Preference Units(1)
     $                               67,700,113
     $                           404,088Decreases in investment in Real Estate Joint Ventures
     $                                 4,086,147
     $                        7,381,690
  (1)
     In March 2011, Belcrest Realty exchanged Partnership Preference Units for preferred stock of the respective issuer and subsequently sold the preferred stock for $52,522,511, for which an aggregate realized loss of $2,477,489 was recognized on the transaction. The aggregate realized loss on this transaction is included in investment transactions in Partnership Preference Units in the condensed consolidated statements of operations. 5 Indirect Investment in the Portfolio The following table summarizes the Funds investment in the Portfolio through Belvedere Company for the six months ended June 30, 2011 and 2010, including allocations of income, expenses and net realized and unrealized gains (losses). 14




Six Months EndedJune 30, 2011
     June 30, 2010Belvedere Companys interest in the Portfolio(1)
     $                 6,408,368,663
     $            5,629,028,525The Funds investment in Belvedere Company(2)
     $                    670,817,935
     $               584,245,612Income allocated to Belvedere Company from the Portfolio
     $                      62,530,493
     $                 62,569,237Income allocated to the Fund from Belvedere Company
     $                        6,481,049
     $                   6,543,328Expenses allocated to Belvedere Company from the Portfolio
     $                      15,359,316
     $                 15,470,225Expenses allocated to the Fund from Belvedere Company(3)
     $                        2,108,123
     $                   2,141,511Net realized gain from investment and foreign currencytransactions allocated to Belvedere Company from the Portfolio
     $                     54,451,137
     $                   5,439,034Net realized gain from investment and foreign currencytransactions allocated to the Fund from Belvedere Company
     $                      5,632,155
     $                     540,189Net change in unrealized appreciation (depreciation) of investmentsand foreign currency allocated to Belvedere Company from thePortfolio
     $                 210,697,464
     $            (538,118,805)Net change in unrealized appreciation (depreciation) of investmentsand foreign currency allocated to the Fund from BelvedereCompany
     $                    21,947,303
     $             (55,029,003)
  (1)
     As of June 30, 2011 and 2010, the value of Belvedere Companys interest in the Portfolio represents 71.2% and 70.6% of the Portfolios net assets, respectively.(2)
     As of June 30, 2011 and 2010, the Funds investment in Belvedere Company represents 10.5% and 10.4% of Belvedere Companys net assets, respectively.(3)
     Expenses allocated to the Fund from Belvedere Company represent: Six Months EndedJune 30, 2011
     June 30, 2010Expenses allocated from the Portfolio
     $ 1,592,720
     $ 1,620,642Servicing fee
     $ 501,380
     $ 506,715Operating expenses
     $ 14,023
     $ 14,154
  A summary of the Portfolios Statement of Assets and Liabilities at June 30, 2011, December 31, 2010 and June 30, 2010 and its operations for the six months ended June 30, 2011, for the year ended December 31, 2010 and for the six months ended June 30, 2010 follows: June 30, 2011
     December 31, 2010
     June 30, 2010Investments, at value
     $                     8,980,188,860
     $                      9,029,003,397
     $                  7,959,822,749Receivable for investments sold (1)
     43,791,077
     7,012,596
     6,387,721Other assets
     12,243,461
     13,226,287
     11,243,819Total assets
     $                     9,036,223,398
     $                     9,049,242,280
     $                 7,977,454,289Investment adviser fee payable
     $                            3,343,097
     $                            3,440,053
     $                        3,220,115Payable for investments purchased
     27,017,090
     -
     -Other liabilities
     382,165
     585,010
     657,348Total liabilities
     $                          30,742,352
     $                            4,025,063
     $                        3,877,463Net assets
     $                     9,005,481,046
     $                     9,045,217,217
     $                 7,973,576,826
  15




June 30, 2011
     December 31, 2010
     June 30, 2010Total investment income
     $                          88,071,548
     $                         169,933,356
     $                       88,490,921Investment adviser fee
     $                          20,846,306
     $                           40,626,632
     $                       20,916,721Other expenses
     789,777
     1,710,294
     953,918Total expenses
     $                          21,636,083
     $                           42,336,926
     $                       21,870,639Net investment income
     $                          66,435,465
     $                         127,596,430
     $                       66,620,282Net realized gain from investment andforeign currency transactions(2)
     123,298,154
     232,540,068
     86,327,876Net change in unrealized appreciation(depreciation) of investments andforeign currency
     251,550,382
     705,390,449
     (842,681,069)Net increase (decrease) in net assetsfrom operations
     $                         441,284,001
     $                     1,065,526,947
     $                  (689,732,911)
  (1)
     Receivable for investments sold as of December 31, 2010 and June 30, 2010 was previously presented in other assets.(2)
     Amounts include net realized gain from redemptions in-kind of $129,920,672, $268,975,439 and $86,419,296, respectively. 6 Investment in Real Estate Joint Ventures At June 30, 2011 and December 31, 2010, Belcrest Realty held an investment in one Real Estate Joint Venture, Lafayette Real Estate LLC (Lafayette). Belcrest Realty held an estimated majority economic interest of 66.1% and 65.7% in Lafayette as of June 30, 2011 and December 31, 2010, respectively. Lafayette owns office properties. In November 2010, Belcrest Realty sold its interest in Allagash to a third party. Combined and condensed financial data of the Real Estate Joint Ventures is presented below. June 30, 2011
     December 31, 2010Investment in real estate
     $                              355,300,000
     $                                 336,400,000Other assets
     9,141,608
     8,048,778Total assets
     $                              364,441,608
     $                                 344,448,778Mortgage notes payable, at face(1)
     $                              254,960,561
     $                                255,408,696Other liabilities
     4,641,445
     4,848,969Total liabilities
     $                              259,602,006
     $                                260,257,665Shareholders equity
     $                              104,839,602
     $                                  84,191,113Total liabilities and shareholders equity
     $                              364,441,608
     $                                344,448,778
  Three Months Ended
     Six Months EndedJune 30, 2011
     June 30, 2010(2)
     June 30, 2011
     June 30, 2010(2)Revenues
     $                10,021,618
     $            19,924,064
     $          20,382,579
     $          40,397,577Expenses
     7,001,503
     14,086,882
     14,114,927
     29,082,423Net investment income before unrealizedappreciation (depreciation)
     $                 3,020,115
     $             5,837,182
     $            6,267,652
     $          11,315,154Change in net unrealized appreciation(depreciation)
     14,439,649
     22,737,266
     17,808,530
     6,887,653Net increase in net assets resulting fromoperations
     $              17,459,764
     $           28,574,448
     $          24,076,182
     $          18,202,807
  16




(1)
     The mortgage notes payable generally cannot be prepaid or otherwise disposed of without incurring a substantial prepayment penalty. The Real Estate Joint Venture generally has no current plans to prepay or otherwise dispose of the mortgage notes payable without the sale of the related real property.(2)
     Includes the results of operations of Allagash. 7 Interest Rate Swap Agreements Belcrest Capital has entered into interest rate swap agreements with Merrill Lynch Capital Services, Inc. to fix the cost of a portion of its borrowings under the Credit Facility (Note 8). Pursuant to the agreements, Belcrest Capital makes periodic payments to the counterparty at predetermined fixed rates in exchange for floating rate payments that fluctuate with the one-month London Interbank Offered Rate (LIBOR). The notional or contractual amounts of these instruments may not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these investments is meaningful only when considered in conjunction with all related assets, liabilities and agreements. The risks of interest rate swap agreements include changes in market conditions that will affect the value of the agreement or the cash flows and the possible inability of the counterparty to fulfill its obligations under the agreement. Belcrest Capitals maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the agreements remaining life, to the extent that the amount is positive. See Note 2 for additional information. The following table summarizes Belcrest Capitals interest rate swap agreements. Liability Derivatives atDerivatives Not Designated as Hedging Instruments
     June 30, 2011
     December 31, 2010Notional amount
     $                                    3,870,000
     $                        3,870,000Average notional amount during the respective period
     $                                    3,870,000
     $                      82,554,000Weighted average fixed interest rate
     6.29%
     6.29%Floating rate
     LIBOR + 0.30%
     LIBOR + 0.30%Final termination date
     7/2015
     7/2015Fair value
     $                                    (689,727)
     $                        (710,801)
  8 Debt Credit Facility  Belcrest Capital has a credit arrangement with Bank of America (the Credit Facility). The Credit Facility may be terminated by the lender on or after September 24, 2012 provided 180 days notice is given. Belcrest Capital may terminate the Credit Facility upon 30 days notice. In March 2011, Belcrest Capital amended the Credit Facility to decrease its total commitment by $65,000,000 to an aggregate amount available for borrowing of $135,000,000. At June 30, 2011, Belcrest Capital had outstanding borrowings under the Credit Facility of $78,000,000. The fair value of the Credit Facility approximates its carrying value. Belcrest Capital pays a rate of interest equal to three-month LIBOR plus 1.50% per annum, reduced from 1.75% in March 2011, on outstanding borrowings under the Credit Facility. A commitment fee is paid on the unused commitment amount equal to 0.25% per annum, reduced from 0.40% in March 2011. Belcrest Capital will incur an additional fee if outstanding borrowings fall below certain levels. Obligations under the Credit Facility are without recourse to Shareholders. Belcrest Capital is required under the Credit Facility to maintain at all times a specified asset coverage ratio. The rights of the lender to receive payments of interest on and repayments of principal of borrowings are senior to the rights of Shareholders. Under the terms of the Credit Facility, Belcrest Capital is not permitted to make 17




distributions of cash or securities while there is outstanding any event of default under the Credit Facility. During such periods, Belcrest Capital would not be able to honor redemption requests or make cash distributions. The Credit Facility is secured by a pledge of Belcrest Capitals assets, excluding the Funds real estate investments. Borrowings under the Credit Facility have been used to purchase the Funds interests in real estate investments, to pay selling commissions and organizational expenses and to provide for the liquidity needs of the Fund. Additional borrowings under the Credit Facility may be made in the future for these purposes. Average Borrowings and Average Interest Rate  During the six months ended June 30, 2011, the average balance of borrowings under the Credit Facility was approximately $109,800,000 with a weighted average interest rate of 2.40%. The weighted average interest rate includes all costs of borrowings under the Credit Facility. 9 Segment Information Belcrest Capital pursues its investment objective primarily by investing indirectly in the Portfolio through Belvedere Company. The Portfolio is a diversified investment company that emphasizes investments in common stocks of domestic and foreign growth companies that are considered by its investment adviser to be high in quality and attractive in their long-term investment prospects. The Funds investment income includes the Funds pro rata share of Belvedere Companys net investment income. Separate from its investment in Belvedere Company, Belcrest Capital invests in real estate investments through Belcrest Realty. The Funds investment income from real estate investments primarily consists of distribution income from Partnership Preference Units, and net investment income from Real Estate Joint Ventures and Co-owned Property. Belcrest Capital evaluates performance of the reportable segments based on the net increase (decrease) in net assets from operations of the respective segment, which includes net investment income (loss), net realized gain (loss) and the net change in unrealized appreciation (depreciation). The Funds Credit Facility borrowings and related interest expense are centrally managed by the Fund. A portion of the Credit Facility borrowings and related interest expense have been approximated and allocated to the real estate segment for presentation purposes herein. Credit Facility borrowings allocated to the real estate segment primarily represent estimated net amounts borrowed to purchase the Funds interests in real estate investments. The Funds interest rate swap agreement balances are presented as part of the real estate segment for presentation purposes herein. The accounting policies of the reportable segments are the same as those for Belcrest Capital on a consolidated basis. No reportable segments have been aggregated. Reportable information by segment is as follows: 18




Three Months Ended
     Six Months EndedJune 30, 2011
     June 30, 2010
     June 30, 2011
     June 30, 2010Investment incomeThe Portfolio*
     $                    2,483,634
     $                     2,320,894
     $                  4,372,926
     $              4,401,817Real estate
     2,473,347
     6,189,280
     5,936,418
     12,056,844Unallocated
     1,884
     1,194
     7,008
     2,150Total investment income
     $4,958,865
     $                     8,511,368
     $                10,316,352
     $            16,460,811Net increase (decrease) in netassets from operationsThe Portfolio*
     $                     2,561,426
     $                (89,788,777)
     $               31,443,661
     $         (50,578,492)Real estate
     12,799,038
     21,899,149
     28,000,903
     13,594,274Unallocated
     (270,103)
     (223,679)
     (548,865)
     (406,341)Net increase (decrease) in netassets from operations
     $                   15,090,361
     $                 (68,113,307)
     $               58,895,699
     $         (37,390,559)June 30, 2011
     December 31, 2010Net assetsThe Portfolio*
     $                670,659,195
     $                     658,320,276Real estate
     23,378,511
     528,030Unallocated(1)
     (12,545,232)
     (10,812,175)Net assets
     $               681,492,474
     $                     648,036,131
  *
     Belcrest Capital invests indirectly in the Portfolio through Belvedere Company.(1)
     Amounts include unallocated liabilities, net of unallocated assets. Unallocated liabilities primarily consist of outstanding Credit Facility borrowings that are used to finance ongoing operations of the Fund and are not allocable to reportable segments. As of June 30, 2011 and December 31, 2010, such borrowings totaled approximately $14,989,000.  Unallocated assets primarily consist of direct cash held by the Fund and the Funds investment in Cash Reserves Fund. As of June 30, 2011 and December 31, 2010, such amounts totaled approximately $2,690,000 and $4,480,000, respectively. 19




Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A). The information in this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the Act). Forward-looking statements typically are identified by use of terms such as may, will, should, might, expect, anticipate, estimate, and similar words, although some forward-looking statements are expressed differently. The actual results of Belcrest Capital Fund LLC (the Fund) could differ materially from those contained in the forward-looking statements due to a number of factors. The Fund undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Factors that could affect the Funds performance include a decline in the U.S. stock markets or in general economic conditions, adverse developments affecting the real estate industry, or fluctuations in interest rates. The following discussion should be read in conjunction with the Funds unaudited condensed consolidated financial statements and related notes in Item 1. MD&A for the Quarter Ended June 30, 2011 Compared to the Quarter Ended June 30, 2010.(1) Performance of the Fund.The Funds investment objective is to achieve long-term, after-tax returns for shareholders. Eaton Vance Management (Eaton Vance), as the Funds manager, measures the Funds success in achieving its objective based on the investment returns of the Fund, using the S&P 500 Index (the Index) as the Funds primary performance benchmark. The Index is an unmanaged index of large-cap stocks commonly used as a measure of U.S. stock market performance. Eaton Vances primary focus in pursuing total return is on the Funds common stock portfolio, which consists of its indirect interest in Tax-Managed Growth Portfolio (the Portfolio). The Fund invests in the Portfolio through its interest in Belvedere Capital Fund Company LLC (Belvedere Company). The Funds performance will differ from that of the Portfolio primarily due to its investments outside the Portfolio. In measuring the performance of the Funds real estate investments, Eaton Vance considers whether, through current returns and changes in valuation, the real estate investments achieve returns that over the long-term exceed the cost of the borrowings incurred to acquire such investments and thereby add to Fund returns. The Funds total return was 2.23% for the quarter ending June 30, 2011. This return reflects an increase in the Funds net asset value per share from $103.33 to $105.63 during the period. The total return of the Index was 0.10% over the same period. Last year, the Fund had a total return of -11.87% for the quarter ending June 30, 2010. This return reflected a decrease in the Funds net asset value per share from $84.74 to $74.68 during the period. The Index had a total return of -11.43% over the same period. Performance of the Portfolio.The Portfolio invests on a long-term basis in a broadly diversified portfolio consisting primarily of common stocks of established growth companies. For the quarter ending June 30, 2011, the Portfolio had a total return of 0.41% while the Index had a total return of 0.10%. For comparison, the total return of the Portfolio for the quarter ending June 30, 2010 was -13.17% compared to the -11.43% return of the Index during the period. Global equity markets struggled to keep their heads above water during the second quarter of 2011, as a mid-year correction eclipsed earlier-in-the-quarter gains and essentially leveled returns across most equity markets. Persistent worries about sovereign debt in the eurozone, emerging markets inflation and political inertia in the United States were among the catalysts driving the correction in equities. A slowing of the U.S. economic recovery also cast a long shadow, although a late-June rally brought brighter skies. During the quarter ending June 30, 2011, largecap stocks outperformed small-caps, while value stocks trailed their growth-oriented peers in both the large- and small-cap categories. Within the Index, the health care sector recordedthe strongest (1)Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Total returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. Performance is for the stated time period only and is not annualized; due to market volatility, current performance of the Fund and of the Portfolio may be lower or higher than the quoted return. The performance of the Fund and the Portfolio is compared to that of their benchmark, the Index. It is not possible to invest directly in an index. 20




gains, followed by the utilities and consumer staples sectors. In contrast, the energy, financials, information technology (IT) and materials sectors were Index laggards during the quarter, each posting negative returns. The Portfolios outperformance of the Index for the quarter ending June 30, 2011 was the result of both security selection and sector allocation decisions relative to the Index. In the Portfolio, security selection was strongest in the IT and consumer staples sectors, while sector allocation proved most valuable in financials, energy and consumer staples. From an allocation standpoint, the Portfolios overweight to the defensive-oriented consumer staples sector during the quarter added value, as did an underweight to the struggling financials and energy sectors. Stock selection in the industrials, healthcare and financial sectors created a drag on performance. Performance of Real Estate Investments.The Funds real estate investments are held through Belcrest Realty Corporation (Belcrest Realty). As of June 30, 2011, real estate investments included: a real estate joint venture (Real Estate Joint Venture), Lafayette Real Estate LLC (Lafayette); a tenancy-in-common interest in real property (Co-owned Property), Bel Stamford I LLC (Bel Stamford I); and preferred equity interests in real estate operating partnerships (Partnership Preference Units) affiliated with publicly traded real estate investment trusts. Lafayette owns office properties and Bel Stamford I owns an interest in an office property leased to a single tenant. During the quarter ending June 30, 2011, Belcrest Realty sold certain of its Partnership Preference Units back to the issuer for approximately $14.8 million. The sale resulted in a gain of $1.4 million as compared to the fair value at March 31, 2011, but a $0.4 million loss against the aggregate cost basis of the investment. The net proceeds from the sale were used to pay down a portion of the Funds credit facility. The Funds real estate investments produced positive returns for the quarter ending June 30, 2011, due principally to the gain on the sale of Partnership Preference Units, an increase in the fair value of Lafayette and net investment income generated during the period. Despite a slowing of the U.S. economic recovery in the second quarter of 2011, the performance of commercial real estate in general continues to benefit from improvements in capital market conditions and to a lesser extent operating fundamentals. The recovery of commercial real estate markets has varied by property sector and market. Transaction volume in the first half of 2011 has more than doubled year-over-year with investors and lenders focused on core assets in prime markets. Further improvements in property values and fundamentals in the broader market will be largely dependent on continued economic recovery, job growth and availability of capital. The fair value of the Funds continuing investments in Partnership Preference Units was generally flat during the quarter. During the quarter ending June 30, 2011, the Funds net investment income from real estate investments was approximately $2.5 million compared to approximately $6.2 million for the quarter ending June 30, 2010, a decrease of $3.7 million, or 60%. The decrease was principally due to the sale of Belcrest Realtys interest in a Real Estate Joint Venture, Allagash Property Trust (Allagash), in November 2010, as well as lower distributions from investments in Partnership Preference Units principally due to fewer average holdings of Partnership Preference Units during the quarter. During the quarter ending June 30, 2010, the Funds net investment income from real estate investments was generally flat. MD&A for the Six Months Ended June 30, 2011 Compared to the Six Months Ended June 30, 2010.(1) Performance of the Fund.The Funds total return was 9.19% for the six months ending June 30, 2011. This return reflects an increase in the Funds net asset value per share from $97.13 to $105.63 and a distribution of $0.40 per share during the period. The total return of the Index was 6.02% over the same period. Last year, the Fund had a total return of -6.77% for the six months ending June 30, 2010. This return reflected a decrease in the Funds net asset value per share from $80.33 to $74.68 and a distribution of $0.25 per share during the period. The Index had a total return of -6.65% over the same period. Performance of the Portfolio.Global equity markets turned in positive performance during the first half of 2011, although this gain was achieved primarily in the first calendar quarter of the year. Markets struggled to keep their heads above water late in the period due to a mid-year correction, which mitigated the gains seen earlier in the period. Persistent worries about sovereign debt in the eurozone, emerging markets inflation and political inertia in the United States were among the catalysts driving the correction in equities. A slowing of the U.S. economic recovery also cast a long shadow, although a late-June rally brought brighter skies. In April 2011, the Federal Reserve Bank revised downward its April forecast for 2011 U.S. gross domestic product from a range of 3.1% to 3.3% to one of 2.7% to 2.9%. In addition, it cited that unemployment is likely to 21




remain persistently higher than forecast just a few months ago. Weak housing data have continued to weigh on the U.S. economy, as the S&P/Case-Shiller Composite-20 City Home Price Index2showed that housing prices in 20 U.S. metropolitan markets continued to drop in May 2011, albeit at a slower rate. In addition, purchases of new U.S. homes fell in May, for the first time in three months. During the six months ending June 30, 2011, small-cap stocks outperformed large-caps, while growth stocks trailed their value-oriented peers in both the large- and small-cap categories. Within the Index, the health care sector recorded the strongest gains, followed by the energy and industrials sectors. In contrast, the financials, IT and materials sectors were Index laggards during the period. For the six months ending June 30, 2011, the Portfolio had a total return of 4.94% while the Index had a total return of 6.02%. For comparison, the total return of the Portfolio for the six months ending June 30, 2010 was -8.08% compared to the -6.65% return of the Index during the period. The Portfolios underperformance of the Index for the six months ending June 30, 2011 was the result of both security selection and sector allocation decisions relative to the Index. In the Portfolio, security selection was weakest in the consumer discretionary and health care sectors. An overweight allocation to the IT sector, an underperforming sector in the period, reversed positive stock selection decisions. An underweight of the lagging financials and materials sectors however benefited overall Portfolio returns. During the period the Portfolio remained overweight in the consumer staples and discretionary sectors, while it was underweight in the telecommunications and utilities sectors. Performance of Real Estate Investments.The Funds real estate investments produced positive returns during the period, due principally to the gain on the sale of Partnership Preference Units, an increase in the fair value of Lafayette and net investment income generated during the period. Despite a slowing of the U.S. economic recovery in the second quarter of 2011, the performance of commercial real estate in general continues to benefit from improvements in capital market conditions and to a lesser extent operating fundamentals. The recovery of commercial real estate markets has varied by property sector and market. Transaction volume in the first half of 2011 has more than doubled year-over-year with investors and lenders focused on core assets in prime markets. Further improvements in property values and fundamentals in the broader market will be largely dependent on continued economic recovery, job growth and availability of capital. The fair value of the Funds continuing investments in Partnership Preference Units was generally flat during the period. In March 2011, Belcrest Realty exchanged Partnership Preference Units for shares of the respective issuers preferred stock and subsequently sold the preferred stock for approximately $52.5 million. The sale resulted in a gain of $8.4 million as compared to the fair value at December 31, 2010, but a $2.5 million loss against the aggregate cost basis of the investments. The net proceeds from the sale were used to pay down a portion of the Funds credit facility. In April 2011, Belcrest Realty sold certain of its Partnership Preference Units back to the issuer for approximately $14.8 million. The sale resulted in a gain of $1.4 million as compared to the fair value at December 31, 2010, but a $0.4 million loss against the aggregate cost basis of the investment. The net proceeds from the sale were used to pay down a portion of the Funds credit facility. During the six months ending June 30, 2011, the Funds net investment income from real estate investments was approximately $5.9 million compared to approximately $12.1 million for the six months ending June 30, 2010, a decrease of $6.2 million, or 51%. The decrease was principally due to the sale of Belcrest Realtys interest in a Real Estate Joint Venture,  (2)The S&P/Case-Shiller Composite-20 City Home Price Index tracks changes in the value of residential real estate in 20 metropolitan regions. 22




Allagash, in November 2010, as well as lower distributions from investments in Partnership Preference Units principally due to fewer average holdings of Partnership Preference Units during the period. During the six months ending June 30, 2010, the Funds net investment income from real estate investments was generally flat. The fair value of the Funds real estate investments was approximately $87.5 million at June 30, 2011 compared to approximately $130.7 million at December 31, 2010, a net decrease of $43.2 million, or 33%. The net decrease was due to the sale of Partnership Preference Units during the period partially offset by increases in the fair value of Lafayette. Liquidity and Capital Resources. Outstanding Borrowings.The Fund has entered into a credit arrangement with Bank of America (the Credit Facility). The Credit Facility may be terminated by the lender on or after September 24, 2012 provided 180 days notice is given. The Fund may terminate the Credit Facility upon 30 days notice. In the event the lender exercises its ability to terminate the Credit Facility, the Fund will seek alternative financing arrangements. In March 2011, the Credit Facility was amended to decrease the commitment by $65.0 million from an aggregate amount available for borrowing of $200.0 million to $135.0 million. In addition, the amendment extended the date after which the lender may terminate the Credit Facility (on 180 days written notice) from September 24, 2011 to September 24, 2012, reduced the rate of interest the Fund pays on outstanding borrowings from an amount equal to the three-month London Interbank Offered Rate (LIBOR) plus 1.75% per annum to three-month LIBOR plus 1.50% per annum and reduced the commitment fee the Fund pays on the unused commitment amount from 0.40% per annum to 0.25% per annum. As of June 30, 2011, the Fund had outstanding borrowings under the Credit Facility of $78.0 million. The unused portion of the Credit Facility totaled $57.0 million as of June 30, 2011. Obligations under the Credit Facility are without recourse to shareholders. The Fund is required under the Credit Facility to maintain at all times a specified asset coverage ratio. To comply with the terms of the Credit Facility, the Fund may be required to dispose of assets on unfavorable terms if market fluctuations or other factors reduce the required asset coverage to less than the prescribed amount. The rights of the lenders under the Credit Facility to receive payments of interest on and repayments of principal of borrowings are senior to the rights of the shareholders. Under the terms of the Credit Facility, the Fund is not permitted to make distributions of cash or securities while there is outstanding any event of default under the Credit Facility. During such periods, the Fund would not be able to honor redemption requests or make cash distributions. The Credit Facility is secured by a pledge of the Funds assets, excluding the Funds real estate investments. Following an event of default under the Credit Facility, the lender could elect to sell pledged assets of the Fund without regard to the tax or other consequences of such action for the shareholders. Item 3. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Risk.The Funds primary exposure to interest rate risk arises from its real estate investments that are financed by the Fund with floating rate borrowings under the Credit Facility and by fixed-rate mortgage notes secured by the real property of the Real Estate Joint Venture and Co-owned Property. Partnership Preference Units are fixed-rate instruments whose values will generally decrease when interest rates rise and increase when interest rates fall. The interest rates on borrowings under the Credit Facility are reset at regular intervals based on three-month LIBOR. The Fund has entered into an interest rate swap agreement to fix the cost of a portion of its borrowings under the Credit Facility. Pursuant to the agreement, the Fund makes periodic payments to the counterparty at predetermined fixed rates in exchange for floating rate payments that fluctuate with one-month LIBOR. The Funds interest rate swap agreement will generally increase in value when interest rates rise and decrease in value when interest rates fall. In the future, the Fund may use other interest rate hedging arrangements (such as caps, floors and collars) to fix or limit borrowing costs. The use of interest rate hedging arrangements is a specialized activity that can expose the Fund to significant loss. 23




The following table summarizes the contractual maturities and weighted-average interest rates associated with the Funds significant non-trading financial instruments. The Fund has no market risk sensitive instruments held for trading purposes. This information should be read in conjunction with Notes 7 and 8 to the Funds unaudited condensed consolidated financial statements in Item 1. Interest Rate SensitivityCost, Principal (Notional) Amountby Contractual Maturity and Callable Datefor the Twelve Months Ended June 30,* Fair Value asof June 30,2012
     2013
     2014
     2015
     2016
     Thereafter
     Total
     2011Rate sensitive liabilities:Long-term debt:Variable-rate Credit Facility
     
     $78,000,000
     
     
     
     
     $78,000,000
     $78,000,000Average interest rate
     
     1.75%
     
     
     
     
     1.75%Rate sensitive derivativefinancial instruments:Pay fixed/receive variable
     
     
     
     
     $3,870,000
     
     $3,870,000
     $(689,727)interest rate swap agreementsAverage pay rate
     
     
     
     
     6.29%
     
     6.29%Average receive rate
     
     
     
     
     0.49%
     
     0.49%Rate sensitiveInvestments:Fixed-rate PartnershipPreference Units:Liberty PropertyLimited Partnership,7.45% Series BCumulative RedeemablePreferred Units,Callable 8/31/09,Current Yield: 8.50%
     $6,250,000
     
     
     
     
     
     $6,250,000
     $5,477,500Vornado Realty L.P., 7%Series D-10 CumulativeRedeemable Preferred Units,Callable 11/17/08,Current Yield: 8.18%(1)
     $7,628,701
     
     
     
     
     
     $7,628,701
     $10,272,270
  *
     The amounts listed reflect the Funds positions as of June 30, 2011. The Funds current positions may differ.(1) Belcrest Realtys interest in these Partnership Preference Units is held through Bel Holdings LLC. 24




Item 4. Controls and Procedures. Fund Governance.As the Funds manager, the complete and entire management, control and operation of the Fund are vested in Eaton Vance. The Funds Chief Executive Officer and Chief Financial Officer intend to report to the Audit Committee of the Board of Directors of Eaton Vance, Inc. (the sole trustee of Eaton Vance) any significant deficiency in the design or operation of internal control over financial reporting which could adversely affect the Funds ability to record, process, summarize and report financial data, and any fraud, whether or not material, that involves management or other employees who have a significant role in the Funds internal control over financial reporting. Disclosure Controls and Procedures.Eaton Vance, as the Funds manager, evaluated the effectiveness of the Funds disclosure controls and procedures (as defined by Rule 13a-15(e) of the Act) as of the end of the period covered by this report, with the participation of the Funds Chief Executive Officer and Chief Financial Officer. The Funds disclosure controls and procedures are the controls and other procedures that the Fund designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commissions rules and forms. Based on that evaluation, the Funds Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2011, the Funds disclosure controls and procedures were effective. Internal Control Over Financial Reporting.There were no changes in the Funds internal control over financial reporting that occurred during the quarter ending June 30, 2011 that have materially affected or are reasonably likely to materially affect the Funds internal control over financial reporting. 25




PART II. OTHER INFORMATIONItem 1. Legal Proceedings. Although in the ordinary course of business the Fund and its subsidiaries may become involved in legal proceedings, the Fund is not aware of any material pending legal proceedings to which they are subject. Item 1A. Risk Factors. There have been no material changes from risk factors as previously disclosed in the Funds Form 10-K for the year ending December 31, 2010 in response to Item 1A to Part I of Form 10-K. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. As described in the Funds Annual Report on Form 10-K for the year ending December 31, 2010, shares of the Fund generally may be redeemed on any business day. The redemption price will be based on the net asset value next computed after receipt by the Fund of a written redemption request from a shareholder, including a proper form of signature guarantee and such other documentation the Fund and the transfer agent may then require. The Fund may, at its discretion, accept redemption requests submitted by facsimile transmission, although an original letter of instruction and supporting documents must be delivered before proceeds are delivered. Once accepted, a redemption request may not be revoked without the consent of the Fund. Settlement of redemptions will ordinarily occur within five business days of receipt by the Funds transfer agent of the original redemption request in good order, and (if applicable) promptly following registration and processing of stock certificates by the transfer agent of the issuer of the distributed securities. The right to redeem is available to all shareholders and all outstanding Fund shares generally are eligible for redemption. During each month in the quarter ending June 30, 2011, the total number of shares redeemed and the average price paid per share were as follows: Total No. of Shares
     Average Price PaidMonth Ending
     Redeemed(1)
     Per ShareApril 30, 2011
     85,555.499
     $104.25May 31, 2011
     20,394.103
     $105.99June 30, 2011
     13,055.229
     $100.84Total
     119,004.831
     $102.59
  (1)
     All shares redeemed during the periods were redeemed at the option of shareholders pursuant to the Funds redemption policy. The Fund has not announced any plans or programs to repurchase shares other than at the option of shareholders. Item 3. Defaults Upon Senior Securities.None.Item 4. Removed and Reserved.Item 5. Other Information.None. 26




Item 6. Exhibits. (a)
     The following is a list of all exhibits filed as part of this Form 10-Q:31.1
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 200231.2
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 200232.1
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 200232.2
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002(b)
     Reports on Form 8-K: None. 27




SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized officer on August 9, 2011. BELCREST CAPITAL FUND LLC /s/ Andrew C. FrenetteAndrew C. FrenetteChief Financial Officer(Duly Authorized Officer andPrincipal Financial Officer) 28




EXHIBIT INDEX 31.1
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 200231.2
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes- Oxley Act of 200232.1
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 200232.2
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 29