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 September 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
     3September 30, 2011 and December 31, 2010Condensed Consolidated Statements of Operations for the Three Months Ended
     4September 30, 2011 and 2010 and for the Nine Months Ended September 30, 2011and 2010Condensed Consolidated Statements of Changes in Net Assets for the Nine
     5Months Ended September 30, 2011 and the Year Ended December 31, 2010Condensed Consolidated Statements of Cash Flows for the Nine Months
     6Ended September 30, 2011 and 2010Financial Highlights for the Nine Months Ended September 30, 2011 and the
     7Year Ended December 31, 2010Notes to Condensed Consolidated Financial Statements as of September 30, 2011
     8Item 2.
     Managements Discussion and Analysis of Financial Condition
     19and Results of Operations (MD&A).Item 3.
     Quantitative and Qualitative Disclosures About Market Risk.
     22Item 4.
     Controls and Procedures.
     24PART II.
     OTHER INFORMATION
     35Item 1.
     Legal Proceedings.
     25Item 1A.
     Risk Factors.
     25Item 2.
     Unregistered Sales of Equity Securities and Use of Proceeds.
     25Item 3.
     Defaults Upon Senior Securities.
     25Item 4.
     (Removed and Reserved).
     25Item 5.
     Other Information.
     25Item 6.
     Exhibits.
     26SIGNATURES
     27EXHIBIT INDEX
     28
  2




PART I. FINANCIAL INFORMATIONItem 1. Financial Statements.BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Assets and Liabilities (Unaudited)September 30, 2011
     December 31, 2010Assets:Investment in Belvedere Capital Fund Company LLC(Belvedere Company)
     $                        561,131,085
     $                         659,946,022Investment in Partnership Preference Units
     15,625,381
     72,580,818Investment in Real Estate Joint Venture
     74,532,202
     55,149,311Investment in Co-owned Property
     2,395,869
     2,926,700Short-term investment
     1,805,332
     3,230,918Total investments, at value
     $                      655,489,869
     $                      793,833,769Cash
     138,323
     1,222,976Interest receivable from affiliated investment
     110
     663Other assets
     24,668
     260,879Total assets
     $                     655,652,970
     $                       795,318,287Liabilities:Loan payable  Credit Facility
     $                       78,000,000
     $                       144,000,000Payable for Fund shares redeemed
     -
     1,546,143Interest payable for open interest rate swap agreements
     3,094
     1,848Open interest rate swap agreements, at value
     755,857
     710,801Payable to affiliate for investment advisory and administrative fees
     206,069
     238,957Payable to affiliate for servicing fee
     82,990
     70,992Other accrued expenses:Interest expense
     53,837
     137,324Other expenses and liabilities
     536,136
     576,091Total liabilities
     $                      79,637,983
     $                      147,282,156Net assets
     $                    576,014,987
     $                      648,036,131Shareholders capital
     $                   576,014,987
     $                      648,036,131Shares outstanding (unlimited number of shares authorized)
     6,251,513
     6,671,766Net asset value and redemption price per share
     $                             92.14
     $                               97.13
  See notes to unaudited condensed consolidated financial statements 3




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Operations (Unaudited)Three Months Ended
     Nine Months EndedSeptember 30, 2011
     September 30, 2010
     September 30, 2011
     September 30, 2010Investment Income:Dividends allocated from Belvedere Company(net of foreign taxes, $5,936, $4,870, $192,733 and $147,609,respectively)
     $                          2,911,785
     $                  2,847,183
     $                 9,387,934
     $              9,386,063Interest allocated from Belvedere Company
     1,375
     
     2,336
     6,275
     
     6,784Expenses allocated from Belvedere Company
     (980,229)
     (973,856)
     (3,088,352)
     (3,115,367)Net investment income allocated from Belvedere Company
     $                          1,932,931
     $                 1,875,663
     $                6,305,857
     $              6,277,480Net investment income allocated from Real Estate Joint Ventures
     2,000,888
     
     4,751,769
     6,143,806
     
     13,484,358Distributions from Partnership Preference Units
     116,406
     
     1,515,391
     1,597,241
     
     4,546,172Net investment income allocated from Co-owned Property
     155,890
     
     145,969
     468,555
     
     439,443Interest
     -
     
     -
     -
     
     240Interest allocated from affiliated investments
     633
     
     1,667
     8,207
     
     4,193Expenses allocated from affiliated investments
     (141)
     (32)
     (707)
     (648)Total investment income
     $                           4,206,607
     $                8,290,427
     $              14,522,959
     $             24,751,238Expenses:Investment advisory and administrative fees
     $                             632,179
     $               1,098,208
     $               2,004,615
     $               3,297,059Servicing fee
     82,991
     
     58,544
     247,279
     
     174,141Interest expense on Credit Facility
     449,433
     
     1,181,938
     1,767,004
     
     2,868,328Custodian and transfer agent fee
     15,502
     
     4,244
     42,333
     
     33,808Miscellaneous
     117,706
     198,219
     339,591
     444,945Total expenses
     $                        1,297,811
     $               2,541,153
     $              4,400,822
     $               6,818,281Deduct Reduction of custodian and transfer agent fee
     $                                    2
     $                         23
     $                       400
     $                         40Net expenses
     $                        1,297,809
     $              2,541,130
     $              4,400,422
     $               6,818,241Net investment income
     $                        2,908,798
     $              5,749,297
     $            10,122,537
     $             17,932,997Realized and Unrealized Gain (Loss)Net realized gain (loss) Investment and foreign currency transactions allocated fromBelvedere Company (identified cost basis)(1)
     $                         (97,205)
     $               1,684,569
     $               5,534,950
     $              2,224,758Investment transactions in Partnership Preference Units(identified cost basis)
     56,585
     
     39,394
     (2,763,459)
     
     78,821Investment transactions in Real Estate Joint Ventures
     -
     
     -
     1,327,381
     
     -Investment transactions allocated from affiliated investments
     41
     
     33
     190
     
     307Interest rate swap agreements(2)
     (57,261)
     (56,202)
     (169,196)
     (2,838,142)Net realized gain (loss)
     $                       (97,840)
     $                1,667,794
     $              3,929,866
     $               (534,256)Change in unrealized appreciation (depreciation) Investments and foreign currency allocatedfrom Belvedere Company (identified cost basis)
     $                (93,066,455)
     $              64,588,534
     $          (71,119,152)
     $              9,559,531Investment in Partnership Preference Units(identified cost basis)
     27,226
     
     4,299,017
     13,712,840
     
     5,319,569Investment in Real Estate Joint Ventures
     4,593,643
     
     2,982,088
     17,193,906
     
     7,841,902Investment in Co-owned Property
     (400,000)
     
     -
     (1,000,000)
     
     (700,000)Interest rate swap agreements
     (66,130)
     (92,701)
     (45,056)
     2,383,727Net change in unrealized appreciation (depreciation)
     $               (88,911,716)
     $             71,776,938
     $          (41,257,462)
     $             24,404,729Net realized and unrealized gain (loss)
     $               (89,009,556)
     $             73,444,732
     $          (37,327,596)
     $             23,870,473Net increase (decrease) in net assets from operations
     $              (86,100,758)
     $             79,194,029
     $         (27,205,059)
     $            41,803,470
  (1)
     Amounts include net realized gain from redemptions in-kind of $351,606, $1,752,303, $6,528,285 and $2,317,144, 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 4




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Changes in Net Assets (Unaudited)Nine Months Ended
     Year EndedSeptember 30, 2011
     December 31, 2010Increase (Decrease) in Net Assets:From operations Net investment income
     $                     10,122,537
     $                22,397,199Net realized gain (loss) from investment transactions, foreigncurrency transactions and interest rate swap agreements
     3,929,866
     (137,648,888)Net change in unrealized appreciation (depreciation) of investments,foreign currency and interest rate swap agreements
     (41,257,462)
     234,813,836Net increase (decrease) in net assets from operations
     $                    (27,205,059)
     $               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
     (42,993,348)
     (122,796,610)Net decrease in net assets from Fund share transactions
     $                   (42,150,271)
     $            (122,196,158)Distributions Distributions to Shareholders
     $                     (2,665,814)
     $                (2,007,089)Total distributions
     $                     (2,665,814)
     $                (2,007,089)Net decrease in net assets
     $                   (72,021,144)
     $                (4,641,100)Net assets:At beginning of period
     $                    648,036,131
     $               652,677,231At end of period
     $                    576,014,987
     $               648,036,131
  See notes to unaudited condensed consolidated financial statements 5




BELCREST CAPITAL FUND LLCCondensed Consolidated Statements of Cash Flows (Unaudited)Nine Months EndedIncrease (Decrease) in Cash:
     September 30, 2011
     September 30, 2010Cash Flows From Operating Activities Net increase (decrease) in net assets from operations
     $                       (27,205,059)
     $            41,803,470Adjustments to reconcile net increase (decrease) in net assets fromoperations to net cash flows provided by operating activities Net investment income allocated from Belvedere Company
     (6,305,857)
     (6,277,480)Net investment income allocated from Real Estate Joint Ventures
     (6,143,806)
     (13,484,358)Payments from Real Estate Joint Ventures
     5,282,202
     11,571,783Net investment income allocated from Co-owned Property
     (468,555)
     (439,443)Payment to Co-owned Property
     (614)
     -Amortization of deferred loan costsCredit Facility
     232,211
     232,210(Increase) decrease in affiliated investment and interest receivable from affiliated investment
     1,426,329
     (1,284,691)(Increase) decrease in other assets
     4,000
     (4,000)Increase (decrease) in interest payable for open interest rate swap agreements
     1,246
     (59,386)Increase (decrease) in payable to affiliate for investment advisory and administrative fees
     (32,888)
     149Increase in payable to affiliate for servicing fee
     11,998
     2,335Increase (decrease) in accrued interest and other accrued expenses and liabilities
     (123,442)
     36,804Increases in Partnership Preference Units
     (5,249)
     (2,681)Proceeds from sales of Partnership Preference Units
     67,910,067
     614,088(Increase) decrease in investment in Belvedere Company
     (5,000,000)
     1,500,000Net interest incurred on interest rate swap agreements
     (169,196)
     (2,838,142)Net realized (gain) loss from investment transactions, foreign currencytransactions and interest rate swap agreements
     (3,929,866)
     534,256Net change in unrealized (appreciation) depreciation of investments,foreign currency and interest rate swap agreements
     41,257,462
     (24,404,729)Net cash flows provided by operating activities
     $                      66,740,983
     $              7,500,185Cash Flows From Financing Activities Proceeds from Credit Facility
     $                                    -
     $          193,000,000Repayments of Credit Facility
     (66,000,000)
     (198,500,000)Payment for deferred loan costs  Credit Facility
     -
     (575,000)Payments for Fund shares redeemed
     (2,899)
     (4,275)Distributions paid to Shareholders
     (1,822,737)
     (1,406,637)Net cash flows used in financing activities
     $                    (67,825,636)
     $           (7,485,912)Net increase (decrease) in cash
     $                      (1,084,653)
     $                 14,273Cash at beginning of period
     $                        1,222,976
     $             1,212,932Cash at end of period
     $                           138,323
     $             1,227,205Supplemental Disclosure and Non-cash Operating andFinancing Activities Interest paid on loan  Credit Facility
     $                        1,618,280
     $            2,568,810Interest paid on interest rate swap agreements, net
     $                           167,950
     $            2,897,528Reinvestment of distributions paid to Shareholders
     $                           843,077
     $              600,452Market value of securities distributed in payment of redemptions
     $                      44,536,592
     $          92,996,125
  See notes to unaudited condensed consolidated financial statements 6




BELCREST CAPITAL FUND LLCFinancial Highlights (Unaudited)Nine Months Ended
     Year EndedSeptember 30, 2011
     December 31, 2010Net asset value  Beginning of period
     $                              97.130
     $                            80.330Income (loss) from operationsNet investment income(1)
     $                                1.558
     $                              3.048Net realized and unrealized gain (loss)
     (6.148)
     14.002Total income (loss) from operations
     $                            (4.590)
     $                          17.050DistributionsDistributions to Shareholders
     $                             (0.400)
     $                           (0.250)Total distributions
     $                           (0.400)
     $                         (0.250)Net asset value  End of period
     $                           92.140
     $                         97.130Total Return(2)
     (4.75)%(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)
     0.36%(8)
     0.63%Total expenses
     1.53%(8)
     2.13%Net investment income(6)
     2.06%(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)
     0.25%(8)
     0.32%Total expenses
     1.06%(8)
     1.09%Net investment income(6)
     1.43%(8)
     1.87%Supplemental DataNet assets, end of period (000s omitted)
     $                            576,015
     $                            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 7




BELCREST CAPITAL FUND LLCas of September 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 8




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 9




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 September 30, 2011 and December 31, 2010 represent 14.1% 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 September 30, 2011 and December 31, 2010. 10




Fair Value Measurements at September 30, 2011Description
     Total
     Level 1
     Level 2
     Level 3AssetsInvestment in Belvedere Company
     $                       561,131,085
     $                                       -
     $                      561,131,085
     $                               -Partnership Preference Units
     15,625,381
     -
     -
     15,625,381Real Estate Joint Venture
     74,532,202
     -
     -
     74,532,202Co-owned Property
     2,395,869
     -
     -
     2,395,869Short-term investment
     1,805,332
     -
     1,805,332
     -Total
     $                       655,489,869
     $                                       -
     $                      562,936,417
     $              92,553,452LiabilitiesInterest rate swap agreements
     $                              755,857
     $                                       -
     $                             755,857
     $                              -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 nine months ended September 30, 2011 and 2010. Level 3 Fair Value Measurements for theThree Months Ended September 30, 2011PartnershipPreference
     Real Estate
     Co-ownedUnits
     Joint Venture
     Property
     TotalBeginning balance as ofJune 30, 2011
     $                      15,749,770
     $                     69,133,726
     $                     2,639,365
     $                     87,522,861Net realized gain
     56,585
     -
     -
     56,585Net change in unrealizedappreciation (depreciation)
     27,226
     4,593,643
     (400,000)
     4,220,869Cost of purchases
     1,754
     -
     -
     1,754Proceeds from sales
     (209,954)
     -
     -
     (209,954)Net investment income(1)
     -
     2,000,888
     155,890
     2,156,778Other(2)
     -
     (1,196,055)
     614
     (1,195,441)Ending balance as ofSeptember 30, 2011
     $                      15,625,381
     $                    74,532,202
     $                     2,395,869
     $                   92,553,452Net change in unrealizedappreciation (depreciation) frominvestments still held atSeptember 30, 2011
     $                            63,180
     $                    4,593,643
     $                     (400,000)
     $                   4,256,823
  11




Level 3 Fair Value Measurements for theThree Months Ended September 30, 2010PartnershipPreference
     Real Estate
     Co-ownedUnits
     Joint Ventures
     Property
     TotalBeginning balance as ofJune 30, 2010
     $                     69,931,461
     $                   78,786,057
     $                     1,929,337
     $                   150,646,855Net realized gain
     39,394
     -
     -
     39,394Net change in unrealizedappreciation (depreciation)
     4,299,017
     2,982,088
     -
     7,281,105Net sales
     (208,252)
     -
     -
     (208,252)Net investment income(1)
     -
     4,751,769
     145,969
     4,897,738Other(2)
     -
     (4,190,093)
     -
     (4,190,093)Ending balance as ofSeptember 30, 2010
     $                    74,061,620
     $                    82,329,821
     $                    2,075,306
     $                  158,466,747Net change in unrealizedappreciation (depreciation) frominvestments still held atSeptember 30, 2010
     $                    4,311,093
     $                      2,982,088
     $                                   -
     $                     7,293,181Level 3 Fair Value Measurements for theNine Months Ended September 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
     (2,763,459)
     -
     -
     (2,763,459)Net change in unrealizedappreciation (depreciation)
     13,712,840
     17,193,906
     (1,000,000)
     29,906,746Cost of purchases
     5,249
     -
     -
     5,249Proceeds from sales
     (67,910,067)
     -
     -
     (67,910,067)Net investment income(1)
     -
     6,143,806
     468,555
     6,612,361Other(2)
     -
     (3,954,821)
     614
     (3,954,207)Ending balance as ofSeptember 30, 2011
     $                           15,625,381
     $                       74,532,202
     $                         2,395,869
     $                        92,553,452Net change in unrealizedappreciation (depreciation) frominvestments still held atSeptember 30, 2011
     $                           1,040,368
     $                      17,193,906
     $                     (1,000,000)
     $                       17,234,274
  12




Level 3 Fair Value Measurements for theNine Months Ended September 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
     78,821
     -
     -
     78,821Net change in unrealizedappreciation (depreciation)
     5,319,569
     7,841,902
     (700,000)
     12,461,471Net sales
     (611,407)
     -
     -
     (611,407)Net investment income(1)
     -
     13,484,358
     439,443
     13,923,801Other(2)
     -
     (11,571,783)
     -
     (11,571,783)Ending balance as ofSeptember 30, 2010
     $                  74,061,620
     $                    82,329,821
     $                 2,075,306
     $                       158,466,747Net change in unrealizedappreciation (depreciation) frominvestments still held atSeptember 30, 2010
     $                   5,358,019
     $                     7,841,902
     $                  (700,000)
     $                          12,499,921
  (1)
     Represents net investment income recorded using the equity method of accounting.(2)
     Represents net capital contributions (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 nine months ended September 30, 2011 and 2010. Nine Months EndedInvestment Transactions
     September 30, 2011
     September 30, 2010Increases in investment in Belvedere Company
     $                              5,000,000
     $                                              -Decreases in investment in Belvedere Company
     $                            44,536,592
     $                             94,496,125Increases in Partnership Preference Units
     $                                     5,249
     $                                      2,681Decreases in Partnership Preference Units(1)
     $                            67,910,067
     $                                  614,088Decreases in investment in Real Estate Joint Ventures
     $                              5,282,202
     $                             11,571,783Increase in investment in Co-owned Property
     $                                        614
     $                                              -
  (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 nine months ended September 30, 2011 and 2010, including allocations of income, expenses and net realized and unrealized gains (losses). 13




Nine Months EndedSeptember 30, 2011
     September 30, 2010Belvedere Companys interest in the Portfolio(1)
     $                         5,404,212,936
     $                      6,084,957,656The Funds investment in Belvedere Company(2)
     $                            561,131,085
     $                         629,010,569Income allocated to Belvedere Company from the Portfolio
     $                              90,430,555
     $                           89,983,176Income allocated to the Fund from Belvedere Company
     $                                9,394,209
     $                             9,392,847Expenses allocated to Belvedere Company from the Portfolio
     $                              22,430,101
     $                           22,544,245Expenses allocated to the Fund from Belvedere Company(3)
     $                                3,088,352
     $                             3,115,367Net realized gain from investment and foreign currencytransactions allocated to Belvedere Company from the Portfolio
     $                              53,425,976
     $                           21,677,988Net realized gain from investment and foreign currencytransactions allocated to the Fund from Belvedere Company
     $                                5,534,950
     $                             2,224,758Net change in unrealized appreciation (depreciation) of investmentsand foreign currency allocated to Belvedere Company from thePortfolio
     $                         (679,237,302)
     $                           83,174,366Net change in unrealized appreciation (depreciation) of investmentsand foreign currency allocated to the Fund from BelvedereCompany
     $                           (71,119,152)
     $                            9,559,531
  (1)
     As of September 30, 2011 and 2010, the value of Belvedere Companys interest in the Portfolio represents 71.6% and 70.7% of the Portfolios net assets, respectively.(2)
     As of September 30, 2011 and 2010, the Funds investment in Belvedere Company represents 10.4% and 10.3% of Belvedere Companys net assets, respectively.(3)
     Expenses allocated to the Fund from Belvedere Company represent: Nine Months EndedSeptember 30, 2011
     September 30, 2010Expenses allocated from the Portfolio
     $                                           2,331,357
     $                                  2,355,830Servicing fee
     $                                              735,143
     $                                     738,533Operating expenses
     $                                                21,852
     $                                       21,004
  A summary of the Portfolios Statement of Assets and Liabilities at September 30, 2011, December 31, 2010 and September 30, 2010 and its operations for the nine months ended September 30, 2011, for the year ended December 31, 2010 and for the nine months ended September 30, 2010 follows: September 30, 2011
     December 31, 2010
     September 30, 2010Investments, at value
     $                                  7,516,513,523
     $                                 9,029,003,397
     $                             8,590,228,547Receivable for investments sold(1)
     26,058,905
     7,012,596
     9,118,823Other assets
     10,760,397
     13,226,287
     10,652,301Total assets
     $                                  7,553,332,825
     $                                9,049,242,280
     $                            8,609,999,671Investment adviser fee payable
     $                                         3,005,838
     $                                       3,440,053
     $                                   3,225,447Other liabilities
     421,883
     585,010
     823,014Total liabilities
     $                                         3,427,721
     $                                       4,025,063
     $                                   4,048,461Net assets
     $                                  7,549,905,104
     $                                9,045,217,217
     $                            8,605,951,210
  14




September 30, 2011
     December 31, 2010
     September 30, 2010Total investment income
     $                              127,137,924
     $                            169,933,356
     $                           127,311,275Investment adviser fee
     $                                30,340,195
     $                              40,626,632
     $                             30,484,908Other expenses
     1,197,244
     1,710,294
     1,403,430Total expenses
     $                                31,537,439
     $                              42,336,926
     $                              31,888,338Net investment income
     $                                95,600,485
     $                            127,596,430
     $                              95,422,937Net realized gain from investment andforeign currency transactions(2)
     133,192,716
     232,540,068
     127,063,746Net change in unrealized appreciation(depreciation) of investments andforeign currency
     (1,006,143,441)
     705,390,449
     20,025,003Net increase (decrease) in net assets fromoperations
     $                         (777,350,240)
     $                       1,065,526,947
     $                         242,511,686
  (1)
     Receivable for investments sold as of December 31, 2010 and September 30, 2010 was previously presented in other assets.(2)
     Amounts include net realized gain from redemptions in-kind of $146,315,489, $268,975,439 and $127,939,695, respectively. 6 Investment in Real Estate Joint Ventures At September 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 65.9% and 65.7% in Lafayette as of September 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. September 30, 2011
     December 31, 2010Investment in real estate
     $                                             363,000,000
     $                                  336,400,000Other assets
     10,952,853
     8,048,778Total assets
     $373,952,853
     $344,448,778Mortgage notes payable, at face(1)
     $                                             254,734,046
     $                                  255,408,696Other liabilities
     5,869,866
     4,848,969Total liabilities
     $ 260,603,912
     $260,257,665Shareholders equity
     $113,348,941
     $84,191,113Total liabilities and shareholders equity
     $373,952,853
     $344,448,778
  15




Three Months Ended
     Nine Months EndedSeptember 30,
     September 30,
     September 30,
     September 30,2011
     2010(2)
     2011
     2010(2)Revenues
     $                        10,238,067
     $                     20,263,641
     $                      30,620,646
     $60,661,218Expenses
     7,182,796
     13,964,272
     21,297,723
     43,046,695Net investment income before unrealizedappreciation (depreciation)
     $                         3,055,271
     $6,299,369
     $                   9,322,923
     $                  17,614,523Change in net unrealized appreciation(depreciation)
     6,712,955
     4,226,181
     24,521,485
     11,113,834Net increase in net assets resulting fromoperations
     $9,768,226
     $10,525,550
     $33,844,408
     $ 28,728,357
  (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
     September 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
     $                                  (755,857)
     $                                (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 March 25, 2013 provided 180 days notice is given. Belcrest Capital may terminate the Credit Facility upon 30 days notice. 16




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 September 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 1.25% per annum, reduced from 1.50% and 1.75% in August and March 2011, respectively, 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 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 nine months ended September 30, 2011, the average balance of borrowings under the Credit Facility was approximately $99,100,000 with a weighted average interest rate of 2.38%. 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 17




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: Three Months Ended
     Nine Months EndedSeptember 30, 2011
     September 30, 2010
     September 30, 2011
     September 30, 2010Investment incomeThe Portfolio*
     $                                 1,932,931
     $                                  1,875,663
     $                                6,305,857
     $                                 6,277,480Real estate
     2,273,184
     
     6,413,129
     8,209,602
     
     18,469,973Unallocated
     492
     1,635
     7,500
     3,785Total investment income
     $                                4,206,607
     $8,290,427
     $                              14,522,959
     $                               24,751,238Net increase (decrease) in netassets from operationsThe Portfolio*
     $                            (91,450,162)
     $                                 67,930,342
     $                           (60,006,501)
     $                              17,351,850Real estate
     5,591,730
     
     11,470,701
     33,592,633
     
     25,064,975Unallocated
     (242,326)
     (207,014)
     (791,191)
     (613,355)Net increase (decrease) in netassets from operations
     $                            (86,100,758)
     $                                79,194,029
     $                           (27,205,059)
     $                             41,803,470September 30, 2011
     December 31, 2010Net assetsThe Portfolio*
     $                              561,063,233
     $                             658,320,276Real estate
     28,264,841
     
     528,030Unallocated(1)
     (13,313,087)
     (10,812,175)Net assets
     $                              576,014,987
     $                            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 September 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 September 30, 2011 and December 31, 2010, such amounts totaled approximately $1,950,000 and $4,480,000, respectively. 18




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 September 30, 2011 Compared to the Quarter Ended September 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 -12.77% for the quarter ending September 30, 2011. This return reflects a decrease in the Funds net asset value per share from $105.63 to $92.14 during the period. The total return of the Index was -13.87% over the same period. Last year, the Fund had a total return of 14.80% for the quarter ending September 30, 2010. This return reflected an increase in the Funds net asset value per share from $74.68 to $85.73 during the period. The Index had a total return of 11.29% 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 September 30, 2011, the Portfolio had a total return of -13.70% while the Index had a total return of -13.87%. For comparison, the total return of the Portfolio for the quarter ending September 30, 2010 was 11.88% compared to the 11.29% return of the Index during the same period. Multiple fears gripped the global equity markets during the third quarter of 2011, creating a crisis of investor confidence and putting a virtual stranglehold on any market momentum during the period. Worries about sovereign debt in the eurozone intensified. The political stalemate in Washington persisted, even as long-term U.S. debt was downgraded by one rating agency for the first time in history. Inflation worries haunted China and other emerging market economies, and global economic activity began to show palpable signs of slowing. In response, investors beat a hasty retreat to safer havens, and volatility in the worlds equity markets was as acute as it has been since early 2009. (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. 19




During the quarter ending September 30, 2011, large-cap stocks generally outperformed small-caps, while value stocks trailed their growth-oriented peers in the large-cap category. Against this backdrop, only one of the 10 economic sectors included in the Index, utilities, had a modest positive return for the quarter. Spiking stock correlations proved to be a significant headwind to security selection in the Portfolio during the quarter as fundamentals became dislocated from prices, making it difficult for Boston Management and Research, the Portfolios investment adviser, to add value as a bottom-up manager. Overall, sector allocation decisions contributed positively to performance, while stock selection produced mixed results. In the Portfolio, security selection was most valuable in the consumer discretionary and health care sectors. The Portfolios underweights in some of the more cyclically geared sectors such as energy, materials and financials lifted relative results as these sectors each suffered declines of over 20% during the quarter. The information technology and consumer staples sectors acted defensively in the volatile market. Overweights in these sectors benefited the Portfolios relative performance throughout the quarter. Detracting from performance were a number of Portfolio positions in the energy and industrials sectors. Additionally, the Portfolios underweight to the small utilities sector held back relative returns. Performance of Real Estate Investments.The Funds real estate investments are held through Belcrest Realty Corporation (Belcrest Realty). As of September 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. The Funds real estate investments produced positive returns for the quarter ending September 30, 2011, due principally to an increase in the fair value of Lafayette and net investment income generated during the period. The pace of recovery of the commercial real estate sector was tempered during the third quarter as investors, lenders and tenants pulled back on activity given concerns over the slowdown and uncertainty of the U.S. economic recovery. Despite these concerns, transaction volumes and leasing activity continue to outpace prior year levels and core property values continue to be supported by a favorable low cost of financing environment. The fair value of Partnership Preference Units was generally flat during the quarter. During the quarter ending September 30, 2011, the Funds net investment income from real estate investments was approximately $2.3 million compared to approximately $6.4 million for the quarter ending September 30, 2010, a decrease of $4.1 million, or 64%. 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 September 30, 2010, the Funds net investment income increased due to higher net investment income from Lafayette. MD&A for the Nine Months Ended September 30, 2011 Compared to the Nine Months Ended September 30, 2010.(1) Performance of the Fund.The Funds total return was -4.75% for the nine months ending September 30, 2011. This return reflects a decrease in the Funds net asset value per share from $97.13 to $92.14 and a distribution of $0.40 per share during the period. The total return of the Index was -8.68% over the same period. Last year, the Fund had a total return of 7.03% for the nine months ending September 30, 2010. This return reflected an increase in the Funds net asset value per share from $80.33 to $85.73 and a distribution of $0.25 per share during the period. The Index had a total return of 3.89% over the same period. Performance of the Portfolio.Global equity markets moved squarely into the red by the close of the nine months ending September 30, 2011. A persistent string of macroeconomic data points and a mixed reaction to U.S. and European policy actions (or lack of action) overshadowed strong corporate earnings and business fundamentals. As the third quarter progressed, anxiety intensified to levels not seen since just prior to the financial crisis of 2008, erasing the gains achieved during the first quarter of 2011. The Chicago Board Options Exchange Volatility Index (VIX), a benchmark of the markets expectation of volatility, tripled during the third quarter, rising to above 40, the same level it reached prior to the fall of Lehman Brothers. Using Treasury yields as a gauge of investor fear, the markets appear even more anxious. The 10-year 20




Treasury yield dropped precipitously from a mid-year point of 3.22% to a low of 1.72% in mid-September, a level not seen since the 1940s. Against this backdrop, large-cap stocks outperformed small-cap stocks, while growth stocks held up better than their value-oriented peers across capitalization ranges. Risk aversion was evident as higher quality stocks were more buoyant than lower quality stocks. In turn, the traditionally defensive utilities, health care and consumer staples sectors were the only Index sectors to record positive performance in the nine months ending September 30, 2011. For the nine months ending September 30, 2011, the Portfolio had a total return of -9.44%, while the Index had a total return of -8.68%. For comparison, the total return of the Portfolio for the nine months ending September 30, 2010 was 2.83% compared to the 3.89% return of the Index during the period. The Portfolios underperformance of the Index for the nine months ending September 30, 2011 was predominantly attributable to security selection. Sector allocation decisions proved additive during the period. The positive impact of stock selection in the information technology and consumer discretionary sectors was not enough to offset weaker selection decisions in the energy, industrials and consumer staples sectors. As was the case in the third quarter, sector allocation decisions in the Portfolio were generally beneficial to relative performance for the full nine month period. Specifically, the Portfolios underweight to the controversial and economically sensitive financials and materials sectors provided a lift. Return comparisons were also buoyed by the Portfolios above benchmark positions in the defensive oriented consumer staples and health care sectors. The Portfolios substantive underweight to the low-growth, but high-yielding utilities sectors dragged on returns as it was the best performing sector in the benchmark during the nine month period. At September 30, 2011, the Portfolio was most overweight in the information technology, consumer discretionary and staples sectors, while underweight in the utilities, energy and telecommunications services 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. The pace of recovery of the commercial real estate sector was tempered towards the end of the period as investors, lenders and tenants pulled back on activity given concerns over the slowdown and uncertainty of the U.S. economic recovery. Despite these concerns, transaction volumes and leasing activity continue to outpace prior year levels and core property values continue to be supported by a favorable low cost of financing environment. 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 nine months ending September 30, 2011, the Funds net investment income from real estate investments was approximately $8.2 million compared to approximately $18.5 million for the nine months ending September 30, 2010, a decrease of $10.3 million, or 56%. The decrease was principally due to the sale of Belcrest Realtys interest in a Real Estate Joint Venture, 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 nine months ending September 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 $92.6 million at September 30, 2011 compared to approximately $130.7 million at December 31, 2010, a net decrease of $38.1 million, or 29%. 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. 21




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 March 25, 2013 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. In August 2011, the Credit Facility was amended to extend the date after which the lender may terminate the Credit Facility (on 180 days written notice) from September 24, 2012 to March 25, 2013 and reduced the rate of interest the Fund pays on outstanding borrowings from an amount equal to three-month LIBOR plus 1.50% per annum to three-month LIBOR plus 1.25% per annum. As of September 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 September 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. 22




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 September 30,* Fair Value asof September2012
     2013
     2014
     2015
     2016
     Thereafter
     Total
     30, 2011Rate sensitive liabilities:Long-term debt:Variable-rate Credit Facility
     
     $78,000,000
     
     
     
     
     $78,000,000
     $78,000,000Average interest rate
     
     1.62%
     
     
     
     
     1.62%Rate sensitive derivativefinancial instruments:Pay fixed/receive variable
     
     
     
     $3,870,000
     
     
     $3,870,000
     $(755,857)interest rate swap agreementsAverage pay rate
     
     
     
     6.29%
     
     
     6.29%Average receive rate
     
     
     
     0.54%
     
     
     0.54%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: 8.28%(1)
     $7,477,086
     
     
     
     
     
     $7,477,086
     $10,147,881
  *
     The amounts listed reflect the Funds positions as of September 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. 23




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 September 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 September 30, 2011 that have materially affected or are reasonably likely to materially affect the Funds internal control over financial reporting. 24




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 September 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 ShareJuly 31, 2011
     40,924.763
     $104.33August 31, 2011
     123,284.042
     $94.37September 30, 2011
     36,176.238
     $93.31Total
     200,385.043
     $94.86
  (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. 25




Item 6. Exhibits. (a)
     The following is a list of all exhibits filed as part of this Form 10-Q:4.3(b)
     Second Amendment dated August 26, 2011 to Master Credit Agreement among the Fund, the otherborrowers thereunder, Bank of America N.A. and each of the other Lenders thereunder, and Bank ofAmerica N.A. as administrative agent filed herewith31.1
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the SarbanesOxley Act of 200231.2
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the SarbanesOxley Act of 200232.1
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the SarbanesOxley Act of 200232.2
     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the SarbanesOxley Act of 2002(b)
     Reports on Form 8-K:None.
  26




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 November 8, 2011. BELCREST CAPITAL FUND LLC /s/ Andrew C. Frenette Andrew C. FrenetteChief Financial Officer(Duly Authorized Officer andPrincipal Financial Officer) 27




EXHIBIT INDEX4.3(b)
	Second Amendment dated August 26, 2011 to Master Credit Agreement among the Fund, the otherborrowers thereunder, Bank of America N.A. and each of the other Lenders thereunder, and Bank ofAmerica N.A. as administrative agent filed herewith31.1
	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the SarbanesOxley Act of 200231.2
	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the SarbanesOxley Act of 200232.1
	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the SarbanesOxley Act of 200232.2
	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the SarbanesOxley Act of 2002
  28