SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-K



                     ANNUAL REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

           For the year ended                         01-16532
           December 31, 1995                  Commission File Number

               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
      (Exact name of registrant as specified in its governing instruments)


            Delaware                                 13-3486106
  (State or other jurisdiction of         (IRS Employer Identification No.)
  incorporation or organization)

                          1345 Avenue of the Americas
                            New York, New York 10105
              (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code:  (212) 969-1000


           Securities registered pursuant to Section 12(b) of the Act:
      Title of each class          Name of each exchange on which registered
            None                                Not Applicable


           Securities registered pursuant to Section 12(g) of the Act:
                      Units of Limited Partnership Interest
                                (Title of Class)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes X No ___.

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Selected  information  from the Prospectus,  dated July 15, 1988, and filed with
the Securities and Exchange Commission on July 19, 1988 (File No. 33-20093),  is
incorporated by reference into Parts I, II and III of this Annual Report on Form
10-K.


<PAGE>


                                     Part I


Item 1.    Business

Formation


      Equitable Capital Partners  (Retirement Fund), L.P. (the "Retirement Fund"
or the  "Registrant")  was formed along with Equitable  Capital  Partners,  L.P.
(collectively  with  the  Retirement  Fund  referred  to as  the  "Funds").  The
Certificates  of Limited  Partnership  were  filed  under the  Delaware  Revised
Uniform Limited  Partnership  Act on February 2, 1988 and the Funds'  operations
commenced on October 13, 1988.  The  Retirement  Fund seeks  current  income and
capital appreciation  potential by investing in privately  structured,  friendly
leveraged  acquisitions  and leveraged  recapitalizations.  The Retirement  Fund
pursues this objective by investing  primarily in subordinated  debt and related
equity  securities  ("Mezzanine  Investments")  issued in  conjunction  with the
"mezzanine financing" of leveraged acquisitions and leveraged recapitalizations.
Mezzanine  Investments,  follow-on  investments,  bridge investments and certain
other  investments  which  the  Retirement  Fund is  permitted  to invest in are
referred to herein as "Enhanced Yield Investments."

      On July 22, 1993,  Equitable Capital  Management  Corporation  ("Equitable
Capital"),  formerly the Managing General Partner and investment  adviser of the
Funds,  transferred   substantially  all  of  the  assets  comprising  Equitable
Capital's business to Alliance Capital Management L.P. ("Alliance  Capital") and
its  wholly-owned  subsidiary,  Alliance  Corporate  Finance Group  Incorporated
("Alliance  Corporate").  In  connection  with  such  transaction,  the  limited
partners  of the Funds,  voted to approve a new  investment  advisory  agreement
between  the Funds  and  Alliance  Corporate  and also  voted to admit  Alliance
Corporate  as  Managing  General  Partner  of the  Funds the  "Managing  General
Partner"  to succeed  Equitable  Capital.  Accordingly,  on July 22,  1993,  the
closing date of the transaction described above, Alliance Corporate was admitted
as the  successor  Managing  General  Partner  of the Funds.  Equitable  Capital
assigned all of its interest as General Partner to Alliance Corporate. Robert F.
Shapiro,  Robert W. Lear, Alton G. Marshall and William G. Sharwell, who are not
affiliated  with  Alliance  Corporate or  "interested  persons" of the Funds for
purposes  of the  Investment  Company  Act of 1940 as amended  (the  "Investment
Company  Act"),   serve  as  the  Funds'   independent   general  partners  (the
"Independent General Partners"). Messrs. Shapiro and Lear have served since June
1988, and Mr. Marshall and Dr. Sharwell since 1989. The Managing General Partner
is an  indirect  partially-owned  subsidiary  of the  Equitable  Life  Assurance
Society of the United States ("Equitable  Life") and is a registered  investment
adviser  under the  Investment  Advisers Act of 1940,  as amended.  In addition,
Alliance Corporate was admitted as the successor investment adviser to the Funds
(the  "Investment  Adviser")  pursuant to a new  investment  advisory  agreement
executed as of July 22, 1993 and since such date, has been responsible,  subject
to the supervision of the Independent  General  Partners,  for the management of
the Funds' investments.

      The Retirement Fund elected to operate as a business  development  company
under the Investment Company Act of 1940, as amended.  As such, it is subject to
certain  provisions  of the  Investment  Company  Act.  The  description  of the
Retirement Fund's investment objective and policies, its management arrangements
and  certain  provisions  of  the  Investment  Company  Act  applicable  to  the
Retirement Fund are set forth in the information  contained in the Prospectus of
the  Retirement  Fund,  dated July 15, 1988 (the  "Prospectus"),  filed with the
Securities and Exchange  Commission (the  "Commission")  pursuant to Rule 424(b)
under the Securities Act of 1933, as amended (the "Securities Act"), on July 19,
1988  under  the  following  captions:   "Investment  Objective  and  Policies,"
"Management  Arrangements" and "Regulation." Such information is incorporated by
reference into this Item 1.

      The Funds  jointly  offered an  aggregate  of  1,000,000  units of limited
partnership  interest  ("Units") to investors  in a public  offering  registered
under the Securities Act pursuant to a Registration  Statement on Form N-2 (File
No.  33-20093),  which was declared  effective  under the  Securities Act by the
Commission  on July  15,  1988.  Merrill  Lynch,  Pierce,  Fenner  & Smith  (the
"Agent"),   an   affiliate   of  ML  Fund   Administrators   Inc.,   (the  "Fund
Administrator")  acted as selling agent for the Units offered by the  Retirement
Fund.


<PAGE>



      On  October  13,  1988,  the  Retirement  Fund  issued  221,072  Units  to
investors,  and Equitable Capital, as Managing General Partner,  admitted 26,304
investors as limited  partners of the Retirement Fund (the "Limited  Partners").
The net  proceeds  of the  offering  of such  Units to the  Retirement  Fund was
$205,596,960 after giving effect to volume discounts of $223,270 and the payment
of $15,251,770  in sales  commissions to the Agent.  Equitable  Capital,  in its
capacity as Managing  General Partner,  contributed a demand  promissory note in
the  principal  amount of  $2,052,050  as required  by the Amended and  Restated
Agreement of Limited Partnership, dated as of October 13, 1988 (the "Partnership
Agreement"), pursuant to which the Retirement Fund had been organized. Equitable
Capital reduced this note by $218,504 resulting from actual syndication expenses
paid in excess of original estimates. The public offering has been concluded.

      In connection  with its  organization  and offering,  the Retirement  Fund
incurred $431,479 in organizational  expenses and $2,043,437 in offering,  sales
and  marketing  expenses.  The  organizational  expenses  were  amortized  on  a
straight-line  basis over a sixty  month  period that  commenced  on October 13,
1988.  Such expenses were fully  amortized as of October 31, 1993. The offering,
sales and marketing  expenses incurred by the Retirement Fund have been paid and
have been  accounted  for as a charge to the capital  account of the  Retirement
Fund's  partners.  The net proceeds  available for  investment by the Retirement
Fund after such offering  less the return of capital to the Limited  Partners of
$65,065,910 equaled $138,066,135.

Investments

      As  set  forth  in  the  Partnership  Agreement,   the  Retirement  Fund's
investment  period ended on October 12, 1991,  three years after the  Retirement
Fund's operations commenced. Thereafter, the Retirement Fund is not permitted to
acquire new Enhanced Yield  Investments,  but can make follow-on  investments in
existing  portfolio  companies.  During the year ended  December 31,  1995,  the
Retirement  Fund made a follow-on  investment in one Managed Company (as defined
in the  Prospectus)  at a total  cost  of  $920  and  paid  $359  in  additional
consideration to exercise warrants.

      During  the year ended  December  31,  1994,  the  Retirement  Fund made a
follow-on  investment in one Managed Company at a total cost of $227. During the
year ended December 31, 1993, the Retirement Fund made two follow-on investments
in one Managed Company at a total cost of $483.

      As of December 31, 1995,  the  Retirement  Fund had a total of 14 Enhanced
Yield  Investments  at a net cost of  $85,451,445  (inclusive  of the receipt of
securities  having a capitalized  cost of $422,439  received as  payment-in-kind
interest on certain Enhanced Yield Investments). During 1995, 1994 and 1993, the
Retirement   Fund   received   $13,479,835,    $28,095,324,   and   $31,274,287,
respectively, in principal payments and prepayments relating to certain Enhanced
Yield Investments.

      Pending investments in Enhanced Yield Investments, the net proceeds of the
public  offering  were  invested in certain  temporary  investments,  consisting
principally  of  commercial  paper  with  maturities  of less than  sixty  days.
Currently,  proceeds  that are not  invested in Enhanced  Yield  Investments  or
returned to Limited Partners are held in such temporary investments.

      New Investments in 1995

      The  Retirement  Fund's  investment  period  ended on  October  12,  1991.
Accordingly, the Retirement Fund made no new investments in 1995.



<PAGE>


Follow-on Investments in 1995

      In 1995,  the  Retirement  Fund  made a  single  follow-on  investment  as
discussed below:

RI Holdings, Inc. ("Rowe")

      Rowe is engaged in the design, engineering and manufacturing of jukeboxes,
bill acceptors and currency changers.

      Under the terms of Rowe's senior  subordinated  notes, the Retirement Fund
receives  common stock at a nominal cost of one cent per share for each interest
payment date on which Rowe delivers payment-in-kind securities in lieu of making
a cash payment. On May 9, 1995, the Retirement Fund acquired 92,045.09 shares of
Common Stock of RI Holdings, Inc., for a total cost of $920.

      As of December 31, 1995, the Retirement  Fund's investment in RI Holdings,
Inc. totaled $7,330,251, which includes the senior subordinated PIK note.

Competition

      The  Retirement  Fund  competes  with  other  entities  having  a  similar
investment objective. In addition, since Enhanced Yield Investments are selected
and managed  exclusively by Alliance Corporate on behalf of the Retirement Fund,
other  entities  which  compete  with  Alliance  Corporate  with respect to such
investments  therefore  compete with the Retirement  Fund.  Competitors  include
other private and public mezzanine funds, other business development  companies,
investment  partnerships and corporations,  small business investment  companies
and large  industrial  and  financial  companies  investing  directly or through
affiliates and individuals.

Employees

      The  Retirement  Fund has no  employees.  The  Managing  General  Partner,
subject to the  supervision of the  Independent  General  Partners,  manages and
controls  the  Retirement  Fund's  investments.  Certain  officers  of  Alliance
Corporate  have been  designated  as agents of the  Retirement  Fund with titles
corresponding  to the titles of the offices held by such  persons with  Alliance
Corporate.  The Retirement Fund Administrator performs  administrative  services
for the Retirement Fund on behalf of the Managing General Partner.

Item 2.    Properties

      The Retirement Fund does not own or lease any physical properties.

Item 3.    Legal Proceedings

      The  Retirement   Fund  is  not  party  to  any  material   pending  legal
proceedings.

Item 4.    Submission of Matters to a Vote of Security Holders

      None.


                                     Part II


Item 5.    Market for Registrant's Common Equity and Related
           Stockholder Matters

      The  Units  are  illiquid   securities  and  are  subject  to  significant
restrictions on transfer.  The  information in the Prospectus  under the caption
"Transferability of Units" is incorporated in this Item 5 by reference. There is
no established trading market for the Units. The Partnership  Agreement contains
restrictions that are intended to prevent the development of a public market.

      The number of holders of Units as of December  31,  1995 was  26,037.  The
Managing General Partner holds a general partner interest in the Retirement Fund
and does not hold any Units. Pursuant to the terms of the Partnership Agreement,
the Retirement Fund generally makes  distributions  of cash interest,  dividends
and other income  received from  investments  in excess of expenses of operation
and reserves for expenses and certain investments and liabilities within 45 days
after  the  end  of  each  calendar  quarter.  Net  cash  receipts  representing
cumulative  income and gains are  distributed as soon as  practicable  after the
related disposition. Such distributions are allocated among the Managing General
Partner, and the Limited Partners, in general, first 99% to the Limited Partners
and 1% to the Managing  General Partner until the Limited Partners have received
a cumulative  priority return of 10%  non-compounded on an annual basis on their
investments in Enhanced Yield  Investments,  second, 70% to the Limited Partners
and 30% to the Managing  General Partner until the Managing  General Partner has
received 20% of all current and prior  distributions  on such  investments  and,
thereafter, 80% to the Limited Partners and 20% to the Managing General Partner.
The  Retirement  Fund's  distribution  procedures are described in detail in the
Prospectus under the caption  "Distributions  and Allocations";  the information
under such caption is incorporated by reference in this Item 5.

      On  February  7,  1996,  the  Independent  General  Partners  approved  an
aggregate cash  distribution  of $10,274,966 for the three months ended December
31, 1995 which was paid on February 14, 1996. The amount  distributed to Limited
Partners  was  $10,259,951  or $46.41 per Unit (of which  $3,610,106  is capital
returned  from  investments  during  the  fourth  quarter  of 1995),  to Limited
Partners of record at December 31, 1995. On a per Unit basis,  this distribution
to Limited  Partners  includes  $23.36 of realized  gains,  $6.72 of income from
operations and $16.33 of return of capital.  The Managing General  Partner's one
percent allocation of $103,636 was reduced, in accordance with the provisions of
the Partnership  Agreement,  by its one percent allocation of realized gains and
capital returned from investments  during the fourth quarter of 1995 of $88,621,
resulting in a net distribution of $15,015.


<PAGE>



Item 6. Selection Financial Data


<TABLE>
<CAPTION>
                                                          For the Years Ended

<S>                        <C>              <C>                 <C>                <C>            <C>           
                            December 31,      December 31,       December 31,       December 31,   December 31,
                                1995              1994               1993               1992           1991
TOTAL FUND INFORMATION:
Cash Distributions to       $26,397,957  (a) $ 30,860,830   (c) $ 45,145,869        $ 39,262,688   $ 17,328,472
Partners
Net Assets                   88,842,112       115,578,330        145,821,277         174,588,494    196,621,691
Total Assets                 88,926,178       115,662,552        145,923,297         174,662,492     19,670,258
Net Investment Income         4,999,345         5,797,964         10,909,633          16,145,611     19,095,327
Net Change in Unrealized
 Appreciation (Depreciation)
 on Investments              (6,915,689)       (5,675,676)         4,082,028          12,769,101   (19,452,041)
Net Realized Gains
  (Losses) on Investments     1,744,317           642,557          1,633,125        (11,466,984)              -


PER UNIT OF LIMITED
PARTNERSHIP INTEREST:

Cash Distributions          $    119.13  (a) $    139.31    (c) $   203.56         $    176.91     $      77.60


Cumulative Cash         
Distributions                    874.99  (b)      755.86            615.55              412.99           236.08

Investment Income                 32.00             38.24            61.20               86.84            96.13
Expenses                          (9.62)           (12.28)          (12.34)             (14.54)          (10.62)
Net Investment Income             22.38             24.09            52.93               75.10            86.43
Net Unrealized Appreciation 
  (Depreciation) on Investments (30.97)           (25.42)           18.28               57.18           (87.11)              
Net Realized Gain (Losses)
 on Investments                    7.81              2.88             7.45              (51.35)              -
Net Asset Value                  397.85            516.98           652.87              781.84           880.62

</TABLE>

(a) Includes Return of Capital of $16,458,810 or $74.45 per LP Unit.
(b) Includes Return of Capital of $368.77 per LP Unit.
(c) Includes Return of Capital of $16,118,359 or $72.91 per LP Unit.



<PAGE>



Item 7.    Management's Discussion and Analysis
           of Financial Condition and Results of Operations

Liquidity and Capital Resources

      Net Proceeds of Offering

      On October 13, 1988,  the  Retirement  Fund  completed the initial  public
offering of Units,  admitting  26,304  Limited  Partners who  purchased  221,072
Units.  The net proceeds  available for investment by the Retirement  Fund after
such offering less return of capital to Limited Partners were $181,514,467 after
volume discounts,  sales  commissions and  organizational,  offering,  sales and
marketing expenses.

      Investments


      During  the year ended  December  31,  1995,  the  Retirement  Fund made a
follow-on  investment  in one  Managed  Company at a total cost of $920 and paid
$359 in additional consideration to exercise warrants.

      As of December 31, 1995,  the  Retirement  Fund had a total of 14 Enhanced
Yield  Investments  at a net cost of  $85,451,445  (inclusive  of the receipt of
securities  having a capitalized  cost of $422,439  received as  payment-in-kind
interest on certain Enhanced Yield Investments).

      Proceeds from Investments

      During the year ended December 31, 1995, the Retirement  Fund received the
following proceeds:


        During the year ended December 31, 1995, the Retirement  Fund received a
total of $473,000 and $14,733 from Western Pioneer, Inc. and MTI Holdings, Inc.,
respectively,  as principal  paydowns of the senior notes held by the Retirement
Fund. No gain or loss has been recorded on the transactions and the amounts will
be distributed as return of capital to the Limited Partners.


        On August 3, 1995,  the Retirement  Fund sold its American  Safety Razor
Company 13.5% Series B  Subordinated  Notes for $1,529,928 and recognized a gain
of $29,999 on the sale.


        During the year ended December 31, 1995,  the  Retirement  Fund received
$48,755 and $78,108 from Polaris Pool Systems, Inc. and Haddon Craftsman,  Inc.,
respectively.  The monies  represent  proceeds from the sale of the  investments
from  prior  years  that have been held in escrow  for  future  adjustments  and
expenses  not  paid  on  the  sale  dates.  These  proceeds  were  recorded  and
distributed as gains.


      On September 15, 1995 the Retirement Fund sold its common stock investment
in JP  Foodservice,  Inc.  for  $4,109,845,  which  resulted  in a  gain  to the
Retirement Fund of $1,947,481.


        During the year ended December 31, 1995,  the  Retirement  Fund received
total proceeds of $268,723 from Multi-Turf,  Inc. as paydown of the equity held,
which resulted in a gain of $248,472 to the Retirement Fund.


      On October 26, 1995,  Apollo Radio Holding Company,  Inc. repaid its 15.0%
Subordinated  Note.  The  Retirement  Fund received total proceeds of $1,809,915
which  represented all outstanding  principal,  accrued  interest and a realized
gain of $272,730.





<PAGE>



      On November  21,  1995,  Lexmark  International  Group,  Inc.  ("Lexmark")
(formerly Lexmark Holding, Inc.) completed the initial public offering of shares
of common  stock held by  certain  existing  shareholders  of  Lexmark.  After a
fifteen to one stock split,  Equitable Capital Partners  (Retirement Fund), L.P.
(the  "Retirement  Fund") held  1,403,011  shares of Lexmark  common stock.  The
Retirement  Fund sold 401,581 shares in the offering  representing  28.6% of the
shares held by the Retirement Fund for total net proceeds of $7,569,801 or a net
price of $18.85 per share. The initial cost of the shares sold by the Retirement
Fund was  $2,677,207.  As a  result,  the  Retirement  Fund  realized  a gain of
$4,892,595.  The shares of Lexmark common stock are listed on the New York Stock
Exchange under the symbol LXK.


      For additional information, refer to the Supplemental Schedule of Realized
Gains and Losses and Note 10 to the Financial Statements.


      The Retirement  Fund's Enhanced Yield  Investments are typically issued in
private  placement  transactions  and are  subject  to certain  restrictions  on
transfer, and are thus relatively illiquid. The balance of the Retirement Fund's
assets at the end of the period covered by this report was invested in Temporary
Investments,  comprised of commercial  paper with  maturities of less than sixty
days.


      The Retirement  Fund, which is designed for tax-exempt  investors,  is not
permitted to borrow to finance  investments.  The Partnership  Agreement imposes
certain limits on the use of proceeds from the  disposition  of investments  for
reinvestments.


      All cash  dividends,  interest and other income received by the Retirement
Fund in excess of expenses of  operation  and  reserves for expenses and certain
investments  and  liabilities  is  distributed  to the  Limited  Partners of the
Retirement Fund and to the Managing  General  Partner,  within 45 days after the
end of each calendar  quarter.  Before each  quarterly  cash  distribution,  the
Retirement Fund will analyze the then current cash projections and determine the
amount of any additional reserves it deems necessary.


Participation in Enhanced Yield Investments


      The Retirement Fund is invested  primarily in Enhanced Yield  Investments,
also known in the securities industry as "high yield securities". The securities
in which the Retirement  Fund has invested were issued in  conjunction  with the
mezzanine financing of privately  structured,  friendly leveraged  acquisitions,
recapitalizations and other leveraged financings,  and are generally linked with
an equity  participation.  Enhanced  Yield  Investments  are debt and  preferred
equity  securities that are below investment  grade,  i.e.,  unrated or rated by
Standard & Poor's  Corporation as BB or lower or by Moody's  Investor  Services,
Inc. as Ba or lower.  Risk of loss upon  default by the issuer is  significantly
greater with Enhanced Yield  Investments  than with investment  grade securities
because  Enhanced  Yield  Investments  are  generally  unsecured  and are  often
subordinated to other creditors of the issuer.  Also, these issuers usually have
high  levels  of  indebtedness  and  are  more  sensitive  to  adverse  economic
conditions,  such as a recession or increasing  interest rates,  than investment
grade issuers. Most of these securities are subject to resale restrictions,  and
generally there is no quoted market for such securities.

      Although the Retirement  Fund cannot  eliminate its risks  associated with
participation in Enhanced Yield Investments,  it has established risk management
policies.  The Retirement Fund subjects each prospective  investment to rigorous
analysis,  and makes only those  investments  that have been  recommended by the
Managing  General  Partner  and  that  meet  the  Retirement  Fund's  investment
guidelines  or that have  otherwise  been  approved by the  Independent  General
Partners.

      Retirement Fund investments are measured against specified Retirement Fund
investment and performance  guidelines.  To limit the exposure of the Retirement
Fund's  capital in any single issuer,  the Retirement  Fund limits the amount of
its  investment in a particular  issuer.  The Retirement  Fund also  continually
monitors  portfolio  companies  in order to minimize the risks  associated  with
participation in Enhanced Yield Investments.



<PAGE>


Results of Operations


      For the  year  ended  December  31,  1995,  the  Retirement  Fund  had net
investment income of $4,999,345,  a decrease of $798,619 from the net investment
income of $5,797,964 for the year ended  December 31, 1994. The Retirement  Fund
had net  investment  income of  $10,909,633  for the same  period  in 1993.  Net
investment income is comprised of investment  income (primarily  interest income
and  accrual of  discount)  offset by  expenses.  The  decrease  in the 1995 net
investment income versus the comparative period in 1994 reflects the decrease in
interest and discount income (excluding temporary  investments) partially offset
by the  decrease in  Investment  Advisory  Fees,  Fund  Administration  Fees and
Expenses and Valuation Expenses.


      For the year ended December 31, 1995,  the Retirement  Fund had investment
income of $7,146,704,  as compared to $8,539,846 for the same period in 1994 and
$13,664,951 for the same period in 1993. The decrease in 1995 investment  income
of 16% versus 1994 was primarily due a decrease in the amount of accrual  status
debt  securities  held by the Retirement Fund due to the sales and repayments of
two  investments  during 1995.  (See Note 12 to the Financial  Statements).  The
decrease in the 1994 of investment income of 3.8% versus the comparative  period
in 1993 was primarily  due to the sale and  non-accrual  status of  investments.
Additionally,  investment  income  decreased  due to  the  reversal  of  accrued
interest on obligations issued by Western Pioneer, Inc. and Tulip Holdings Corp.
in 1994.


      The  Retirement  Fund incurred  expenses of $2,147,359  for the year ended
December 31,  1995,  as compared to  $2,741,882  for the same period in 1994 and
$2,755,318 for the same period in 1993. The decrease in the 1995 expenses versus
the 1994 expenses of $594,523 was primarily due to a decrease in the  Investment
Advisory Fee and the Fund Administration  Fees and Expenses.  The small decrease
in expenses from 1993 to 1994 of $13,436 reflects the decrease in the Investment
Advisory Fee and  amortization of deferred  organization  expenses offset by the
increase in the Fund Administrative Fees and Expenses and professional fees.


      The Retirement  Fund  experienced a decrease in net assets  resulting from
operations  for the year ended  December 31, 1995 in the amount of $172,027,  as
compared to an increase of $764,845 for the same period in 1994. The decrease in
net assets in 1995 versus 1994 is  attributable  to a decrease in net investment
income of $798,619,  an increase in net  unrealized  depreciation  of $1,240,013
offset by net realized gains of $1,101,760  (see Statements of Operations in the
Financial  Statements).  The decrease in net assets resulting from operations in
1994  versus 1993 is  attributable  to a decrease  in net  investment  income of
$5,111,669,  a decrease in net realized  gains of $1,020,568  and an increase in
net unrealized depreciation of $9,757,704.

      For the year ended  December 31, 1995,  the  Retirement  Fund  incurred an
Investment  Advisory Fee of $1,037,207  (as described in Note 6 to the Financial
Statements). For the years ended December 31, 1994 and 1993, the Retirement Fund
incurred  Investment  Advisory Fees of $1,278,599 and $1,581,950,  respectively.
The decrease in Investment  Advisory Fees is due to a decrease in the Retirement
Fund's  Available  Capital  on  which  the  Investment  Advisory  Fee is  based,
resulting  primarily  from  the  redemption  of  debt  obligations  held  by the
Retirement Fund.

      The Fund  Administration  Fees and Expenses (as described in Note 7 to the
Financial Statements) for the years ended December 31, 1995, 1994 and 1993, were
$837,092, $1,133,720 and $830,638,  respectively.  The decrease of $296,628 from
1994  to  1995  is  due  primarily  to a  decrease  in  administrative  expenses
reimbursed  to  the  Fund  Administrator   pursuant  to  the  Retirement  Fund's
Administrative  Services Agreement.  During the year ended December 31, 1995 and
1994,  the   Retirement   Fund  incurred  a  total  of  $135,139  and  $367,552,
respectively,  of  administrative  expenses,  consisting  primarily of printing,
audit  and tax  return  preparation  and  custodian  fees  paid  for by the Fund
Administrator.

      Independent  General  Partners'  Fees and Expenses  incurred for the years
ended December 31, 1995, 1994 and 1993, were $161,236,  $160,979,  and $166,441,
respectively.  The  changes  are  attributable  to  fluctuations  in legal  fees
incurred  by the  Independent  General  Partners  (See  Note 9 to the  Financial
Statements).

      The Retirement Fund incurred  professional fees of $105,443,  $146,956 and
$60,721 for the years ended  December  31,  1995,  1994 and 1993,  respectively,
which are primarily  comprised of legal fees  reimbursed  to Equitable  Life for
legal services (see Note 9 to the Financial Statements).

Unrealized Appreciation/Depreciation, and Non-Accrual of Investments

      The General  Partners of the  Retirement  Fund  determine,  on a quarterly
basis, the fair value of the Retirement Fund's portfolio  securities that do not
have a readily  ascertainable market value. They are assisted in connection with
such  determination  by the Managing  General  Partner,  which has established a
valuation  committee  comprised of senior  executives  to assess the  Retirement
Fund's portfolio and make  recommendations  regarding the value of its portfolio
securities.  This  valuation  committee uses available  market  information  and
appropriate valuation  methodologies.  In addition, the Managing General Partner
has  retained  Arthur D.  Little,  Inc.,  a  nationally  recognized  independent
valuation consultant, to review such valuations.


      For privately  issued  securities in which the  Retirement  Fund typically
invests,  the fair value of an  investment  is its initial  cost,  adjusted  for
amortization of discount or premium and as subsequently  adjusted to reflect the
occurrence of significant developments. "Significant developments" are business,
economic or market events that may affect a company in which an  investment  has
been made or the securities comprising such investment. For example, significant
developments  that could result in a write-down  in value  include,  among other
things,  events  of  default  with  respect  to  payment  obligations  or  other
developments indicating that a portfolio company's performance may fall short of
acceptable  levels. A write-up in value of an investment could take place when a
significant favorable development occurs, such as a transaction representing the
partial  sale of an  investment  that would  result in a capital gain or company
performance exceeding expected levels on a sustained basis.

      Although the General  Partners use their best judgment in determining  the
fair value of these investments, there are inherent limitations in any valuation
technique involving securities of the type in which the Retirement Fund invests.
Therefore,  the fair values presented  herein are not necessarily  indicative of
the amount which the Retirement Fund could realize in a current transaction.

      For the years  ended  December  31,  1995 and 1994,  the  Retirement  Fund
recorded net unrealized depreciation on Enhanced Yield Investments of $6,915,689
and  $5,675,676,  respectively.  For the  year  ended  December  31,  1993,  the
Retirement   Fund  recorded  net  unrealized   appreciation  on  Enhanced  Yield
Investments of $4,082,028. The increase of $1,240,013 in unrealized depreciation
from  1994 to 1995 was  primarily  the  result  of  writedowns  in U.S.  Leather
Holdings,  Inc., Pergament Home Centers, Inc. and Tulip Holding Corp., offset by
unrealized appreciation in Lexmark International Group, Inc. and the reversal of
unrealized  depreciation  in Ampex  Recording  Media  Corp.  (See Note 12 to the
Financial Statements).

      Alliance  Corporate  continues to monitor the Retirement  Fund's portfolio
closely.  As a matter of standard  procedure,  Alliance  Corporate  reviews each
portfolio company's financial statements at least quarterly,  and often monthly.
Investment managers routinely review and discuss financial and operating results
with the companies' management and equity sponsors, and attend periodic board of
directors meetings, as appropriate.  In some cases, Alliance Corporate officers,
acting on behalf of the Funds  serve as  directors  on the  boards of  portfolio
companies. When problems arise, communication with management and sponsors often
occurs on a daily basis.




<PAGE>


        The  following  investments  have been on  non-accrual  status as of the
respective dates:

        U.S. Leather Holdings, Inc. 15%
          Senior Subordinated Note                 October 1, 1995
        MTI Holdings, Inc. 5%
          Senior Secured Note                      October 1, 1995
        Western Pioneer, Inc. 10%
          Senior Subordinated Note                 November 30, 1994
        RI Holdings, Inc. 16%
          Senior Subordinated Notes                April 25, 1994
        Tulip Holding, Corp. 14.5% and 16.5%
          Subordinated Notes                       January 1, 1994

Realized Gains and Losses on Investments


        For the year ended December 31, 1995,  the Retirement  Fund recorded net
gains of $1,744,317 on transactions  involving eight Enhanced Yield Investments.
(See  Note 10 to the  Financial  Statements  and the  Supplemental  Schedule  of
Realized Gains and Losses).  For the years ended December 31, 1994 and 1993, the
Retirement  Fund realized a net gain on investments of $642,557 and  $1,663,125,
respectively.


<PAGE>


Item 8. Financial Statements and Supplementary Data


               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.


                                TABLE OF CONTENTS


Independent Auditors' Report

Statements of Assets, Liabilities and Partners' Capital as of
  December 31, 1995 and 1994

Statements of Operations
  For the Years Ended December 31, 1995, 1994, and 1993

Statements of Cash Flows
  For the Years Ended December 31, 1995, 1994 and 1993

Statements of Changes in Net Assets 
For the Years Ended December 31, 1995, 1994 and 1993

Statements of Changes in  Partners' Capital
 For the Years  Ended  December  31, 1995, 1994 and 1993

Schedule of Portfolio Investments - December 31, 1995

Supplemental Schedule of Realized Gains and Losses
  For the Year Ended December 31, 1995

Notes to Financial Statements




<PAGE>


                          INDEPENDENT AUDITORS' REPORT

Equitable Capital Partners (Retirement Fund), L.P.:

We have audited the accompanying statements of assets, liabilities and partners'
capital of Equitable Capital Partners  (Retirement  Fund), L.P. (the "Retirement
Fund") as of December  31, 1995 and 1994,  including  the  schedule of portfolio
investments,  as of December 31, 1995, and the related statements of operations,
cash flows,  changes in net assets and changes in partners'  capital for each of
the  three  years  in the  period  ended  December  31,  1995.  These  financial
statements  are  the   responsibility  of  the  Fund's  General  Partners.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995, by correspondence with
the custodian.  An audit also includes assessing the accounting  principles used
and significant estimates made by management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial position of the Retirement Fund as of December 31, 1995
and 1994, the results of its  operations,  its cash flows and the changes in its
net  assets  and  partners'  capital  for  the  respective  stated  periods,  in
conformity with generally accepted accounting principles.

As explained in Note 2, the financial  statements of the Retirement Fund include
securities  valued at  $28,806,626  and  $86,914,728 as of December 31, 1995 and
1994,  respectively,  representing  32.4  and  75.1  percent  of  total  assets,
respectively,  whose values have been  estimated by the General  Partners of the
Retirement Fund in the absence of readily  ascertainable  market values. We have
reviewed  the  procedures  used by the  General  Partners  in  arriving at their
estimate   of  value  of  such   securities   and  have   inspected   underlying
documentation,  and,  in  the  circumstances,  we  believe  the  procedures  are
reasonable and the documentation  appropriate.  However, because of the inherent
uncertainty of valuation,  those estimated values may differ  significantly from
the  values  that would  have been used had a ready  market  for the  securities
existed, and the differences could be material.

Our audits  were  conducted  for the  purpose of forming an opinion on the basic
financial  statements taken as a whole.  The  supplemental  schedule of realized
gains and losses for the year  ended  December  31,  1995 is  presented  for the
purpose of additional analysis and is not a required part of the basic financial
statements. This schedule is the responsibility of the Retirement Fund's General
Partners. Such schedule has been subjected to the auditing procedures applied in
our audit of the basic  financial  statements  and,  in our  opinion,  is fairly
stated  in all  material  respects  when  considered  in  relation  to the basic
financial statements taken as a whole.

Deloitte & Touche LLP
New York, New York
February 20, 1996


<PAGE>


               EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
             STATEMENTS OF ASSETS, LIABILITIES AND PARTNERS' CAPITAL

<TABLE>
<S>                                           <C>      <C>               <C>
ASSETS:                                       Notes        December 31,      December 31,
                                                               1995              1994

  Investments                                2,10,12
     Enhanced Yield Investments at
         Value-Managed Companies
         (amortized cost of $83,389,283
         at December 31, 1995 and 
         $93,252,115 at December 31, 1994)                 $  67,489,913      $   83,511,586
         Non-Managed Companies                  
         (amortized cost of $2,121,174 at
         December 31, 1995 and $3,534,916
         at December 31, 1994)                                 2,720,868           4,891,456
     Temporary Investments
         (at amortized cost)                                  16,536,723          23,524,901

  Cash                                                            39,180              85,291
  Interest Receivable                          2,12              886,589           2,238,868
  Note Receivable                              3,4             1,245,982           1,410,450
  Prepaid Expenses                                                 6,923                   -

TOTAL ASSETS                                               $  88,926,178      $  115,662,552


TOTAL LIABILITIES AND PARTNERS' CAPITAL

  Liabilities
         Professional Fees Payable              9                40,833               24,161
         Independent General Partners'    
            Fees Payable                        8                10,547                9,566              
         Fund Administrative 
            Expenses Payble                     7                28,445               40,168
         Other Accrued Liabilities                                4,241               10,327
Total Liabilities                                                84,066               84,222

  Partners' Capital
         Managing General Partner             3,4             1,058,667            1,288,272
         Limited Partners (221,072)            4             87,783,445          114,290,058
Total Partner's Capital                                      88,842,112          115,578,330

TOTAL LIABILITIES AND PARTNERS' CAPITAL                    $ 88,926,178       $  115,662,552

</TABLE>


                             See the Accompanying Notes to Financial Statements


<PAGE>


<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                             STATEMENTS OF OPERATIONS

<S>                                      <C>               <C>                    <C>
                                                             For the Years Ended
                                         December 31, 1995      December 31, 1994  December 31, 1993
                                                               
INVESTMENT INCOME - Notes 2,12
  Interest                               $       7,121,657      $  7,622,188      $  12,864,576
  Discount                                          25,047           917,658            800,375
       TOTAL INVESTMENT INCOME                   7,146,704         8,539,846         13,664,951

EXPENSES:
  Investment Advisory Fee - Note 6               1,037,207         1,278,599          1,581,950
  Fund Administration Fees and                    
   Expenses - Note 7                               837,092         1,133,720            830,638  
  Independent General Partners'
   Fees and Expenses - Note 8                      161,236           160,979            166,441
  Amortization of Deferred
   Organization Expenses - Note 2                        -                 -             71,633
  Professional Fees - Note 9                       105,443           146,956             60,721
  Insurance Fees                                         -             2,755             25,830
  Valuation Expenses                                 6,381            18,873             18,105
       TOTAL EXPENSES                            2,147,359         2,741,882          2,755,318

NET INVESTMENT INCOME                            4,999,345         5,797,964         10,909,633

NET CHANGE IN UNREALIZED
(DEPRECIATION) APPRECIATION ON                  
INVESTMENTS-Note 12                             (6,915,689)       (5,675,676)         4,082,028


NET REALIZED GAINS ON INVESTMENTS - Note 10      1,744,317           642,557          1,663,125

NET (DECREASE) INCREASE IN NET ASSETS
 RESULTING FROM OPERATIONS                 $      (172,027)       $  764,845      $  16,654,786
                                                      
</TABLE>


                             See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                           STATEMENTS OF CASH FLOWS



<S>                                                <C>               <C>                <C>
                                                             For the Years Ended
INCREASE IN CASH                                   December 31, 1995      December 31, 1994  December 31, 1993
                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES:
    Interest and Discount Income                   $      7,249,650         $    9,648,662     $  11,455,752
    Fund Administration Fees and Expenses                  (848,815)            (1,093,552)         (830,638)
    Investment Advisory Fee                              (1,037,207)            (1,278,599)       (1,581,950)
    Independent General Partners' Fees and Expenses        (161,259)              (160,413)         (179,018)
    Valuation Expenses                                      (12,466)               (23,346)          (21,305)
    Sale (Purchase) of Temporary Investments, Net         7,779,486             (4,156,369)        5,122,687
    Purchase of Enhanced Yield Investments                     (920)                  (227)             (483)
    Proceeds from Sales and Principal
      Payments of Enhanced Yield Investments             13,479,835             28,095,324        31,274,287
    Professional Fees                                       (89,535)              (149,295)          (68,642)
    Insurance Fees                                           (6,923)                (4,318)           (4,882)
Net Cash Provided by Operating Activitites               26,351,846             30,877,867        45,165,808
     
CASH FLOWS FROM FINANCING ACTIVITIES
    Cash Distributions to Partners                      (26,397,957)            (30,860,830)      (45,098,287)
Net Cash Applied to Financing Activities                (26,397,957)            (30,860,830)      (45,098,287)
Net (Decrease) Increase in Cash                             (46,111)                 17,037            67,521
Cash at the Beginning of the Period                          85,291                  68,254               733
Cash at the End of the Period                       $        39,180         $        85,291     $      68,254
</TABLE>






                    RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING FROM
                      OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES
<TABLE>
<S>                                                 <C>                     <C>                <C>
Net Increase in Net Assets Resulting
   From Operations                                  $      (172,027)        $   764,845         $  16,654,786
Adjustments to Reconcile Net Increase
   in Net Assets Resulting from Operations 
   to Net Cash Provided by Operating Activities:
Decrease in Investments                                  19,514,082          23,343,753            34,687,934
(Increase) Decrease in Accrued Interest                     101,181           1,108,636            (2,211,349)
Amortization of Deferred Organization Expenses                    -                   -                71,633
(Decrease) Increase in Other Accrued Liabilities             (6,086)            (56,193)               48,520
(Decrease) Increase in Fund Administration Expenses         
    Payable                                                 (11,723)             40,168                     -
(Increase) Decrease in Prepaid Expenses                      (6,923)              2,755                16,810
Net Change In Unrealized Depreciation
    (Appreciation) on Investments                         6,915,689           5,675,676            (4,082,028)
Increase (Decrease) in Independent General
    Partners' Fees Payable                                      981                 566               (12,578)
Increase (Decrease) in Professional Fees Payable             16,672              (2,339)               (7,920)
Total Adjustments                                        26,523,873          30,113,022            28,511,022
Net Cash Provided by Operating Activities           $    26,351,846      $   30,877,867        $   45,165,808
</TABLE>

                              See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                     STATEMENTS OF CHANGES IN NET ASSETS

<S>                                      <C>                 <C>                     <C>
                                                             For the Years Ended
                                         December 31, 1995      December 31, 1994    December 31, 1993

FROM OPERATIONS:

    Net Increase (Decrease) in Net
      Assets Resulting from Operations     $     (172,027)       $     764,845        $    16,654,786
     
    Cash Distributions to Partners            (26,397,957)         (30,860,830)          (45,145,869)

    Reduction in Managing General
      Partners' Contribution                     (166,234)            (146,962)             (276,134)
     
    Total Decrease                            (26,736,218)         (30,242,947)          (28,767,217)

NET ASSETS:

    Beginning of Period                        115,578,330         145,821,277           174,588,494

    End of Period                          $    88,842,112      $  115,578,330        $  145,821,277

</TABLE>


                             See the Accompanying Notes to Financial Statements



<PAGE>


                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                  STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
<TABLE>
<S>                                                <C>        <C>                 <C>              <C>
                                                                 Managing          Limited
                                                   Notes      General Partner      Partners         Total
FOR THE YEAR ENDED DECEMBER 31, 1993

Partners' Capital at January 1, 1993                           $   1,744,914    $ 172,843,580   $ 174,588,494
Cash Distributions to Partners                                      (144,453)     (45,001,416)    (45,145,869)
Reduction in Managing General Partners'
    Contribution                                     3              (276,134)               -        (276,134)
Allocation of Net Investment Income                 11               109,097       10,800,536      10,909,633
Allocation of Net Unrealized
    Appreciation on Investments                     12                40,820        4,041,208       4,082,028
Allocation of Net Realized Gains on                 
    Investments                                     10                16,631        1,646,494       1,663,125  
Partners' Capital at December 31, 1993                         $   1,490,875    $ 144,330,402   $ 145,821,277

FOR THE YEAR ENDED DECEMBER 31, 1994

Partners' Capital at January 1, 1994                           $   1,490,875    $ 144,330,402   $ 145,821,277
Cash Distributions to Partners                                       (63,290)     (30,797,540)    (30,860,830)
Reduction in Managing General Partners'
    Contribution                                     3              (146,962)               -        (146,962)
Allocation of Net Investment Income                 11                57,980        5,739,984       5,797,964
Allocation of Net Unrealized
    Depreciation on Investments                     12               (56,757)      (5,618,919)     (5,675,676)
Allocation of Net Realized Gains on                 
    Investments                                     10                 6,426          636,131         642,557
Partners' Capital at December 31, 1994                         $   1,288,272    $ 114,290,058   $ 115,578,330

FOR THE YEAR ENDED DECEMBER 31, 1995

Partners' Capital at January 1, 1995                           $   1,288,272    $ 114,290,058   $ 115,578,330
Cash Distributions to Partners                                       (61,650)     (26,336,307)    (26,397,957)
Reduction in Managing General Partners'
    Contribution                                     3              (166,234)               -        (166,234)
Allocation of Net Investment Income                 11                49,993        4,949,352       4,999,345
Allocation of Net Unrealized Depreciation
    on Investments                                  12               (69,157)      (6,846,532)     (6,915,689)
Allocation of Net Realized Gains on                 
    Investments                                     10                17,443        1,726,874       1,744,317
Partners' Capital at December 31, 1995                         $   1,058,667    $  87,783,445   $  88,842,112
</TABLE>



                            See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                          SCHEDULE OF PORTFOLIO INVESTMENTS
                                                  DECEMBER 31, 1995

 <S>               <C>                                                <C>      <C>        <C>           <C>              <C>        
  PRINCIPAL                                                       INVESTMENT  INVESTMENT     AMORTIZED       VALUE       % OF TOTAL
AMOUNT/SHARES                    INVESTMENT                         DATE         COST          COST        (NOTE 2)      INVESTMENTS
--------------  -----------------------------------------------   ----------   ----------    -------------  ----------    ----------



                     ENHANCED YIELD INVESTMENTS
                     MANAGED COMPANIES

                     CONSUMER PRODUCTS MANUFACTURING

                     LEXMARK INTERNATIONAL GROUP, INC.
$      24,103,269    Lexmark International Inc.,
                        Sr. Sub. Nts. 14.25% due 03/31/01*         03/27/91   $ 24,103,269       24,103,269     24,103,269
1,001,430 Warrants   Lexmark International Group, Inc.,
                        Class B Common Stock**(d)                  03/27/91      6,676,200        6,676,200     16,448,488
                                                                              --------------  -------------- --------------
                                                                                30,779,469       30,779,469     40,551,757     46.75
                                                                              --------------  -------------- -----------------------

                     TULIP HOLDING CORPORATION - NOTE 12
$       4,394,288    Tulip Holding Corp.,
                       Sub. Nt. 14.5% due 12/29/97*(a)(b)         12/29/89       4,378,513        4,387,394        219,714
$         222,161    Tulip Holding Corp.,
                       Sub. Nt. 16.5% due 06/30/94*(a)(b)(c)      12/31/91         222,161          222,161              0
$         716,680    Tulip Holding Corp.,
                       Sub. Nt. 16.5% due 06/30/94*(a)(b)(c)      12/31/92         716,680          716,680              0
$         323,462    Tulip Holding Corp.,
                       Sub. Nt. 16.5% due 06/30/94*(a)(b)(c)      12/31/93         323,462          323,462              0
 1,464.763 Shares    Tulip Holding Corp.,
                       Series A Exchangeable Pref. Stock 15%*(b)  12/29/89       1,464,763        1,464,763              0
  78,872 Warrants    Tulip Holding Corp., 
                       Common Stock Purchase Warrants**           12/29/89          15,774           15,774              0
                                                                              -------------- ---------------- --------------
                                                                                 7,121,353        7,130,234        219,714      0.25
                                                                              -------------- ---------------- ----------------------

                     BANKING AND FINANCE

                     USAT HOLDINGS INC.
       297 Shares    USAT Holdings Inc., Common Stock**          01/05/90 &
                                                                 12/19/91        3,560,182       3,560,182       3,560,182
                                                                              -------------- ---------------- --------------
                                                                                 3,560,182       3,560,182       3,560,182      4.11
                                                                              -------------- ---------------- ----------------------
 </TABLE>

                              See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                                DECEMBER 31, 1995
                                                   (CONTINUED)

 <S>               <C>                                              <C>           <C>        <C>           <C>              <C>     
  PRINCIPAL                                                          INVESTMENT  INVESTMENT     AMORTIZED      VALUE     % OF TOTAL
AMOUNT/SHARES                        INVESTMENT                         DATE        COST          COST       (NOTE 2)    INVESTMENTS
---------------   -----------------------------------------------   ----------- ------------- ------------ ------------ ------------

                  MISCELLANEOUS MANUFACTURING

                  QUANTEGY ACQUISITION CORP.
                  (FORMERLY AMPEX RECORDING MEDIA)
  123.50 Shares   Quantegy Acquisition Corp., Common Stock             11/13/95  $ 2,722,290   $ 2,722,290   $  2,722,290
35,882 Warrants   Ampex Recording Media Corp.,
                    Warrants to Purchase Class A Common Stock**(e)     12/31/90 &
                                                                       06/28/91      288,251       288,251        143,528
                                                                                -------------- ------------- -------------
                                                                                   3,010,541     3,010,541      2,865,818       3.30
                                                                                -------------- ------------- -----------------------

                  RI HOLDINGS, INC. - NOTES 10, 12
 $     11,123,914 RI Holdings, Inc., 
                    Sr. Sub. Nts. 16% due 08/31/01*(a)(b)             04/25/94    5,826,150      5,826,150     4,660,920
   150,191 Shares RI Holdings, Inc., Common Stock**                   09/01/89    1,501,910      1,501,910             0
104,211.03 Shares RI Holdings, Inc., Common Stock**                    various        1,044          1,044             0
  22,687.5 Shares RI Holdings, Inc., Common Stock**                   04/25/94          227            227             0
 92,045.09 Shares RI Holdings, Inc., Common Stock**                   05/09/95          920            920             0
                                                                                --------------- ------------- ------------
                                                                                  7,330,251      7,330,251     4,660,920        5.37
                                                                                --------------- ------------- ----------------------

                  LEATHER AND LEATHER PRODUCTS

                  UNITED STATES LEATHER HOLDINGS, INC.
$     14,616,000  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Deb. 15% due 1/31/04*                     08/06/93   14,515,886     14,526,875     8,769,600
$         36,251  U.S. Leather Holdings, Inc., 
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  11/30/93       36,251         36,251             0
$        439,565  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  02/28/94      439,565        439,565             0
$        414,946  U.S. Leather Holdings, Inc., 
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  11/30/94      414,946        414,946             0
$        571,130  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  02/28/95      571,130        571,130             0
$        250,334  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  05/31/95      250,334        250,334             0 
$        402,926  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  08/31/95      402,926        402,926             0
$        565,943  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Deb. 15% due 8/05/98*(a)                  11/30/95      565,943        565,943             0
 2,986.41 Shares  U.S. Leather Holdings, Inc.,
                   Sr. Sub. Pref. Stock 8% 
                   redeemable 03/31/01*(a)(b)                         08/06/93    2,024,000      2,024,000             0
  150,231 Shares  U.S. Leather Holdings, Inc.,
                   Jr. Sub. Pref. Stock *(a)(b)                       08/06/93            0              0             0
150,231 Warrants  U.S. Leather Holdings, Inc.,  
                   Non-Voting Common Stock Purchase Warrants**        08/06/93      186,918        186,918             0
                                                                                -------------- -------------- ------------
                                                                                 19,407,899     19,418,888     8,769,600       10.11
                                                                                -------------- -------------- ----------------------
</TABLE>

                              See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                         SCHEDULE OF PORTFOLIO INVESTMENTS
                                                  DECEMBER 31, 1995
                                                     (CONTINUED)

 <S>               <C>                                                <C>         <C>          <C>          <C>          <C>        
  PRINCIPAL                                                         INVESTMENT    INVESTMENT    AMORTIZED      VALUE     % OF TOTAL
AMOUNT/SHARES                        INVESTMENT                        DATE          COST         COST       (NOTE 2)    INVESTMENTS
--------------  ------------------------------------------------   -----------  ------------- ------------ ------------ ------------

                 DISTRIBUTION SERVICES

                 WB BOTTLING CORPORATION - NOTE 12
  1,615 Shares   WB Bottling Corp., Preferred Stock**                09/12/90    $  161,500    $  161,500   $        0
 21,463 Shares   WB Bottling Corp., Common Stock**                   09/12/90 &
                                                                     08/11/92        87,296        87,296            0
                                                                                -------------- ------------ ------------
                                                                                    248,796       248,796            0          0.00
                                                                                -------------- ------------ ------------------------

                 MISCELLANEOUS RETAIL

                 PERGAMENT HOME CENTERS, INC.- Note 12
$     2,543,200  Pergament Acq. Corp., Home Centers, Inc.
                   Floating Rate Demand Note due 07/31/00*           10/18/91     2,543,200     2,543,200    2,543,200
   299.2 Shares  Pergament Holdings, Corp.,
                   Common Stock Class B**                            02/28/89     6,732,000     6,732,000    1,683,000
109.2571 Shares  Pergament Holdings, Corp.,
                   Common Stock Class C **                           02/28/89             0             0            0
                                                                                -------------- ------------ ----------
                                                                                  9,275,200     9,275,200    4,226,200          4.87
                                                                                -------------- ------------ ------------------------


                 R&S STRAUSS, INC.
                 (FORMERLY WSR ACQUISITION CORP.)
$       935,000  R&S Strauss, Inc., 
                   Sr. Sub. Nt. 15% due 05/31/00*                   06/13/90       935,000        935,000      935,000
$     1,190,000  R&S Strauss, Inc.,
                   Sr. Sub. Nt. 15% due 05/31/00*                   06/13/90     1,190,000      1,190,000    1,190,000
                                                                                -------------- ------------ -----------
                                                                                 2,125,000      2,125,000    2,125,000          2.45
                                                                                -------------- ------------ ------------------------

                 PRINTING, PUBLISHING AND ALLIED LINES

                 AMERICAN PAPER GROUP, LTD.
$       595,683  American Paper Group, Ltd., 
                   Sub. Nts. 5% due 12/31/00*                       01/18/94       404,111        443,253      443,253
     996 Shares  American Paper Holdings Inc., Common Stock**       01/18/94        67,469         67,469       67,469
                                                                                -------------- ------------ -----------
                                                                                   471,580        510,722      510,722          0.59
                                                                                -------------- ------------ ------------------------


                 TOTAL INVESTMENT IN  MANAGED  COMPANIES                      $ 83,330,271    $83,389,283   $67,489,913        77.80
                 ----------------------------------------                     -------------- -------------- ------------------------


</TABLE>

                              See the Accompanying Notes to Financial Statements


<PAGE>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                         SCHEDULE OF PORTFOLIO INVESTMENTS
                                                 DECEMBER 31, 1995
                                                    (CONTINUED)
<TABLE>
<S>               <C>                                              <C>          <C>           <C>            <C>        <C>         
   PRINCIPAL                                                       INVESTMENT    INVESTMENT    AMORTIZED       VALUE     % OF TOTAL
 AMOUNT/SHARES                        INVESTMENT                      DATE          COST          COST       (NOTE 2)    INVESTMENTS
---------------   ----------------------------------------------   -----------  ------------  ------------  ---------- -------------


                   NON-MANAGED  COMPANIES

                   CONSUMER PRODUCTS MANUFACTURING

                   AMERICAN SAFETY RAZOR COMPANY - NOTE 12
  106,670 Shares   ASR Acquisition Corp., Common Stock (d)            04/14/89   $   16,778   $   16,778    $ 840,026
    1,571 Shares   ASR Acquisition Corp., Common Stock (d)            05/22/89          246          246       12,372
                                                                                ------------  ------------  ----------
                                                                                     17,024       17,024      852,398          0.99
                                                                                ------------  ------------  ------------------------

                   DISTRIBUTION SERVICES

                   WESTERN PIONEER, INC. - Note 10
$      4,730,800   Western Pioneer, Inc., 
                     Sr. Sub. Nts. 10% due 12/01/02*(b)               11/30/94    1,008,040    1,008,040   1,008,040
 81,081 Warrants   Western Pioneer, Inc., 
                     Common Stock Purchase Warrants **                11/30/94            0            0           0
                                                                                ------------  -----------  ------------
                                                                                  1,008,040    1,008,040   1,008,040           1.16
                                                                                ------------  -----------  -------------------------

                   BROADCASTING

                   APOLLO RADIO HOLDING CO., INC.
     29.75 Shares  Apollo Radio Holding Co., Inc., Common Stock**     06/01/90       61,788       61,788     336,401
      25.5 Shares  Apollo Radio Holding Co., Inc., Common Stock**     04/03/90       52,962       52,962     288,349
  9.2083 Warrants  Apollo Radio Holding Co., Inc., Common Stock
                     Purchase Warrants**                              04/03/90            0            0           0
                                                                                ------------  ------------  ----------
                                                                                    114,750      114,750     624,750           0.72
                                                                                ------------  ------------  ------------------------

</TABLE>

                              See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                        SCHEDULE OF PORTFOLIO INVESTMENTS
                                                DECEMBER 31, 1995
                                                   (CONTINUED)

<S>               <C>                                                <C>         <C>            <C>           <C>        <C>       
   PRINCIPAL                                                         INVESTMENT    INVESTMENT    AMORTIZED     VALUE     % OF TOTAL
 AMOUNT/SHARES                        INVESTMENT                        DATE          COST         COST      (NOTE 2)    INVESTMENTS
---------------  --------------------------------------------------  ----------- -------------  ----------- ----------  ------------


                 HEALTH SERVICES

                 MTI HOLDINGS, INC. - NOTES 10, 12
$     471,360    MTI Holdings, Inc., Sr. Sec. Nt. 5% due 08/15/99*     07/01/94  $  471,360     $    471,360   $   235,680
22,376 Shares    MTI Holdings, Inc., Class B Common Stock**            07/01/94     510,000          510,000             0
                                                                                -------------  --------------  ------------
                                                                                    981,360          981,360       235,680      0.27
                                                                                -------------  --------------  ---------------------



                 TOTAL INVESTMENT IN NON-MANAGED  COMPANIES                     $ 2,121,174     $  2,121,174   $  2,720,868     3.14
                 ------------------------------------------                     -------------  --------------  ---------------------


                 TOTAL INVESTMENT IN PORTFOLIO                                  $85,451,445     $ 85,510,457   $ 70,210,781    80.94
                 -----------------------------


                 TEMPORARY INVESTMENTS

                 COMMERCIAL PAPER

$     7,500,000  Greenwich Funding, 5.67% due 02/21/96                 12/15/95 $ 7,419,675     $  7,439,756    $ 7,439,756
$     9,100,000  International Securitization, 6.00% due 01/03/96      12/29/95   9,092,417        9,096,967      9,096,967
                                                                                -------------  ----------------  ------------
                 TOTAL INVESTMENT IN COMMERCIAL PAPER                           $16,512,092     $ 16,536,723    $16,536,723    19.06
                 ------------------------------------                           -------------  ---------------- --------------------

</TABLE>
                              See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                              EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                                          SCHEDULE OF PORTFOLIO INVESTMENTS
                                                   DECEMBER 31, 1995
                                                       (CONCLUDED)

 <S>               <C>                                             <C>          <C>           <C>           <C>         <C>
     PRINCIPAL                                                     INVESTMENT    INVESTMENT    AMORTIZED      VALUE     % OF TOTAL
   AMOUNT/SHARES                     INVESTMENT                       DATE          COST          COST       (NOTE 2)    INVESTMENTS
-------------------- -------------------------------------------    ---------- -------------  -----------  -----------  ------------


                     TOTAL TEMPORARY INVESTMENTS                                $ 16,512,092  $ 16,536,723  $16,536,723       19.06
                     ---------------------------                                ------------  ------------  ------------------------

                     TOTAL INVESTMENT PORTFOLIO                                 $101,963,537  $102,047,180  $86,747,504      100.00%
                     --------------------------                                 ============  ============  ========================


                     SUMMARY OF  INVESTMENTS
                     
                     Subordinated Notes                                         $ 59,318,927  $ 59,377,939  $44,108,676       50.85
                     Preferred Stock                                               3,650,263     3,650,263            -        0.00
                     Common Stock and Warrants                                    22,482,255    22,482,255   26,102,105       30.09
                     Temporary Investments                                        16,512,092    16,536,723   16,536,723       19.06
                                                                                -------------  ------------  -----------------------

                     TOTAL INVESTMENT PORTFOLIO                                 $101,963,537  $102,047,180  $86,747,504      100.00%
                     --------------------------                                 ============  =============  =======================

                  *  Restricted Security
                 **  Restricted Non-income Producing Security
                ***  Affiliated Companies
                (a)  Includes receipt of payment-in-kind securities.
                (b)  Non-accrual investment status.
                (c)  Includes capitalized deferred income.
                (d)  Publicly traded class of securities.
                (e)  Underlying security publicly traded.

</TABLE>

                              See the Accompanying Notes to Financial Statements


<PAGE>
<TABLE>
<CAPTION>
                             EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                             SUPPLEMENTAL SCHEDULE OF REALIZED GAINS AND LOSSES
                                    FOR THE YEAR ENDED DECEMBER 31, 1995

<S>                                                               <C>           <C>          <C>         <C>         <C>    
                                                                                 PAR VALUE
                                                                     DATE OF     OR NUMBER   AMORTIZED      NET        REALIZED
SECURITY                                                           TRANSACTION   OR SHARES      COST      PROCEEDS    GAIN (LOSS)
Polaris Pool Systems, Inc.
   Common Stock                                                      3/22/95   $         -   $      -    $   40,754   $  40,754

Total Net Realized Gains for the Three Months Ended March 31, 1995                                           40,754      40,754
                                                                                                
Total Net Realized Gains for the Three Months Ended June 30, 1995                                   -             -           -
Haddon Craftsman, Inc.
     Common Stock                                                    8/9/95              -          -        27,879      27,879
Polaris Pool Systems, Inc.
     Common Stock                                                    8/9/95              -          -         8,001       8,001
ASR Acquisition Corp.
     Series B Subordinated 13.5% Notes                               8/29/95  $  1,499,929   1,499,929    1,529,928      29,999
J.P. Foodservice, Inc.
     Common Stock                                                    9/19/95       249,957   2,162,364    4,109,845   1,947,481
Multi-Turf, Inc.
     Common Stock                                                    9/20/95         78.54      20,251      268,723     248,472

Total Net Realized Gains for the Three Months Ended September 30, 1995                       3,682,544    5,944,376   2,261,832
                                                                       
Apollo Radio Holding Co., Inc.
     Subordinated 15.0% Note                                        10/27/95  $    850,000   1,537,185    1,809,915     272,730
Ampex Recording Media
     Subordinated Notes Series A & B                                11/13/95  $  8,496,113   8,496,113    2,722,290  (5,773,823)
Lexmark International Group, Inc.
     Common Stock                                                   11/22/95       401,581   2,677,207    7,569,802   4,892,595
Haddon Craftsman, Inc.
     Common Stock                                                    12/7/95             -           -       50,229      50,229
                                                                                         
Total Net Realized Losses for the Three Months Ended December 31, 1995                      12,710,505   12,152,236    (558,269)
Total Net Realized Gains for the Year Ended December 31, 1995                              $16,393,049  $18,137,366  $1,744,317  
                                                                                           =========== ============= ===========
                                                                                     
(A) Proceeds represent a distribution to the Retirement Fund from the
      escrow account.
</TABLE>
                             See the Accompanying Notes to Financial Statements.


<PAGE>


                   EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.
                            NOTES TO FINANCIAL STATEMENTS
                                  DECEMBER 31, 1995



1.    Organization and Purpose



      Equitable  Capital  Partners,  L.P.  (the  "Fund")  was formed  along with
Equitable Capital Partners  (Retirement  Fund), L.P. (the "Retirement Fund," and
collectively  with the Fund referred to as the "Funds") and the  Certificates of
Limited  Partnership  were filed  under the  Delaware  Revised  Uniform  Limited
Partnership Act on February 2, 1988. The Funds' operations  commenced on October
13, 1988.


      On July 22, 1993,  Equitable Capital  Management  Corporation  ("Equitable
Capital"),  formerly the Managing General Partner and investment  adviser of the
Funds,  transferred   substantially  all  of  the  assets  comprising  Equitable
Capital's business to Alliance Capital Management L.P. ("Alliance  Capital") and
its  wholly-owned  subsidiary,  Alliance  Corporate  Finance Group  Incorporated
("Alliance  Corporate").  In  connection  with  such  transaction,  the  limited
partners of the Funds (the "Limited Partners") voted to approve a new investment
advisory  agreement  between the Funds and Alliance  Corporate and also voted to
admit  Alliance  Corporate as Managing  General  Partner of the Funds to succeed
Equitable  Capital.  Accordingly,  on July 22,  1993,  the  closing  date of the
transaction  described  above,  (l)  Alliance  Corporate  was  admitted  as  the
successor Managing General Partner of the Funds, (ll) Equitable Capital withdrew
from the Funds as Managing  General  Partner and assigned all of its interest as
General  Partner to Alliance  Corporate and (lll) Alliance  Corporate  succeeded
Equitable  Capital  as the  investment  advisor to the Funds  pursuant  to a new
investment advisory agreement.  Alliance Corporate (the "Investment Adviser") is
a registered investment adviser under the Investment Advisers Act of 1940.


      Prior to July 22, 1993, Equitable Capital was responsible,  subject to the
supervision of the independent  general partners of the Funds (the  "Independent
General Partners"), for the management of the Funds' investments. As of July 22,
1993,  Alliance  Corporate  assumed  such  responsibilities  in its  capacity as
Managing General Partner and Investment Adviser of the Funds.



      The Funds have elected to operate as business development  companies under
the  Investment  Company Act of 1940, as amended.  The Funds seek current income
and capital appreciation potential through investments in  privately-structured,
friendly leveraged acquisitions and other leveraged transactions. The Funds have
pursued this objective by investing  primarily in subordinated  debt and related
equity securities  ("Enhanced Yield Investments") issued in conjunction with the
"mezzanine   financing"  of  friendly   leveraged   acquisitions  and  leveraged
recapitalizations.

      As stated in the Partnership Agreement, the Retirement Fund will terminate
on October 13, 1998, subject to the right of the Independent General Partners to
extend  the  term of the  Retirement  Fund  for up to two  additional  one  year
periods,   after  which  the  Retirement   fund  will  liquidate  any  remaining
investments within five years.


2.    Significant Accounting Policies



      Basis of Accounting


      For  financial  reporting  purposes,  the  Retirement  Fund's  records are
maintained using the accrual method of accounting.




<PAGE>



      Valuation of Investments


      Securities  are valued at market or fair value.  Market  value is used for
securities  for which market  quotations are readily  available.  For securities
without a readily  ascertainable  market value,  fair value is determined,  on a
quarterly  basis, in good faith by the General  Partners of the Retirement Fund.
The total value of securities  without a readily  ascertainable  market value is
$28,806,626  and  $86,914,728  as of December  31, 1995 and 1994,  respectively,
representing 32.4% and 75.1% of total assets,  respectively.  In connection with
such  determination,  the Managing  General  Partner has established a valuation
committee  comprised  of senior  executives  to  assess  the  Retirement  Fund's
portfolio and make recommendations  regarding the value of the Retirement Fund's
portfolio securities. This valuation committee uses available market information
and  appropriate  valuation  methodologies.  In addition,  the Managing  General
Partner has retained Arthur D. Little, Inc., a nationally recognized independent
valuation consultant, to review such valuations.


      For privately  issued  securities in which the  Retirement  Fund typically
invests,  the fair value of an  investment  is its initial  cost,  adjusted  for
amortization of discount or premium and as subsequently  adjusted to reflect the
occurrence of significant developments. "Significant developments" are business,
economic or market events that may affect a company in which an  investment  has
been made or the securities comprising such investment. For example, significant
developments  that could  result in a writedown  in value  include,  among other
things,  events  of  default  with  respect  to  payment  obligations  or  other
developments indicating that a portfolio company's performance may fall short of
acceptable  levels. A write-up in value of an investment could take place when a
significant favorable development occurs, such as a transaction representing the
partial sale of an  investment  that would result in a capital  gain, or company
performance exceeding expected levels on a sustained basis. Although the General
Partners  use  their  best  judgment  in  determining  the  fair  value of these
investments, there are inherent limitations in any valuation technique involving
securities of the type in which the Retirement Fund invests. Therefore, the fair
value estimates  presented  herein are not necessarily  indicative of the amount
which the Retirement Fund could realize in a current transaction.


      Temporary  Investments  with  maturities  of 60 days or less are valued at
amortized cost, which  approximates  market value.  Temporary  Investments which
mature in more than 60 days, for which market quotations are readily  available,
are valued at the most recent bid price or the equivalent  quoted yield obtained
from one or more of the market makers.


      Interest Receivable on Investments


      Investments will generally be placed on non-accrual status in the event of
a default (after  applicable  grace period  expires) or if the Managing  General
Partner  determines  that  there  is no  reasonable  expectation  of  collecting
interest.


      Payment-In-Kind Securities


      All payment-in-kind  securities received in lieu of cash interest payments
from the  Retirement  Fund's  portfolio  companies  are  recorded at face value,
unless the  Managing  General  Partner  determines  that there is no  reasonable
expectation of collecting the full principal amounts of such securities.




<PAGE>



      Income Taxes


      As discussed in Note 13, no provision for income taxes has been made since
all  income  and  losses  are  allocated  to  the  Retirement   Fund's  partners
("Partners") for inclusion in their respective tax returns.


      Deferred Organization Expenses


      Organization  expenses of $431,479 were fully amortized on a straight-line
basis as of October 31, 1993.


      Investment Transactions


      Enhanced Yield  Investments - The Retirement Fund records  transactions on
the date on which it obtains an  enforceable  right to demand the  securities or
payment thereof.


      Temporary  Investments - The Retirement  Fund records  transactions on the
trade date.


      Realized  gains and losses on  investments  are determined on the basis of
specific identification for accounting and tax purposes.


      Sales, Marketing and Offering Expenses and Sales Commissions


      Sales  commissions  and selling  discounts  are  allocated to the specific
Partners' accounts to which they are applicable.  Sales,  marketing and offering
expenses are  allocated  between the Funds in  proportion to the number of units
issued  by  each  Fund  and to the  Partners  in  proportion  to  their  capital
contributions.

3.    Note Receivable


        On July 22, 1993, pursuant to the terms of the Retirement Fund's Amended
and  Restated  Agreement  of Limited  Partnership,  Alliance  Corporate,  as the
successor  Managing  General  Partner of the Retirement  Fund, has contributed a
non-interest  bearing  promissory note (the "Note") to the Retirement Fund in an
aggregate  amount equal to 1.01% of the aggregate Net Capital  Contributions  of
all Limited Partners (less distributions  representing returns of capital).  Net
Capital  Contributions  are comprised of gross offering  proceeds,  after giving
effect  to  volume   discounts   (and  after   netting  of  sales   commissions,
organization,  offering  and sales and  marketing  expenses),  less  returns  of
capital  distributed to Limited  Partners.  The principal  amount of the Note is
reduced   proportionally   as  such  Limited  Partners   receive   distributions
representing  additional returns of capital. Such distributions received for the
year ended December 31, 1995,  resulted in a $166,234 reduction of the principal
amount of the Note. The promissory  note of Equitable  Capital was canceled upon
the contribution of Alliance Corporate's Note.



4.    Capital Contributions



      On October  13,  1988,  the  Retirement  Fund  closed the  initial  public
offering of its units of Limited Partner interests ("Units"). Equitable Capital,
the  Retirement   Fund's  Managing  General  Partner  at  that  time,   accepted
subscriptions for 221,072 Units and admitted 26,304 Limited Partners.


      The Limited Partners' total capital contributions were $220,848,730, after
giving  effect to volume  discounts  allowed of  $223,270.  Equitable  Capital's
aggregate  capital  contribution  was in the  form of a  promissory  note in the
principal amount of $2,051,783.  On July 22, 1993,  Equitable Capital's note was
canceled and Alliance  Corporate  made a capital  contribution  in the form of a
promissory  note on such date,  as  described  in note 3. Sales,  marketing  and
offering  expenses and selling  commissions  have been charged against  proceeds
resulting in net capital contributed by Limited Partners of $203,146,793.

      Allocation  of  income,  loss  and  distributions  of  cash  are  made  in
accordance with the Partnership Agreement as further discussed in Note 11.

5.    Sales, Marketing and Offering Expenses and Sales Commissions



      The Retirement Fund expended a total of $416,052 for the  reimbursement of
sales and marketing  expenses.  Aggregate  sales and  marketing  expenses of the
Funds may not exceed  $2,528,415 or .5% of the aggregate  capital  contributions
and were allocated  proportionately  to the number of Units issued by each Fund.
Aggregate sales and marketing expenses for the Funds totaled $951,683.


      The Retirement Fund also paid $1,627,385 for the reimbursement of offering
expenses.  These expenses, along with the offering expenses of Equitable Capital
Partners  and  the  organizational   expenses  of  the  Funds,  may  not  exceed
$6,000,000.  Aggregate offering and  organizational  expenses for the Retirement
Funds  totaled  $4,711,806  (see Note 2 regarding the  amortization  of deferred
organizational expenses).


      For their  services  as  selling  agent,  the  Retirement  Fund paid sales
commissions to Merrill Lynch, Pierce,  Fenner & Smith Incorporated in the amount
of  $15,251,770,  of  which  Equico  Securities  Corporation,  an  affiliate  of
Equitable Capital, a related party, received $168,150 as a selected dealer.



6.    Investment Advisory Fee


      As of July 22, 1993,  Alliance  Corporate  has been  receiving a quarterly
Investment  Advisory  Fee, at the annual rate of 1.0% of the  Retirement  Fund's
Available Capital, with a minimum annual payment of $2,000,000  collectively for
the  Funds,  less  80%  of  commitment,   transaction,  investment  banking  and
"break-up"  or  other  fees  related  to  the  Retirement   Fund's   investments
("Deductible  Fees").  Available  Capital is defined as the sum of the aggregate
Net Capital  Contributions of the Partners less the cumulative amount of returns
of Capital  distributed to Partners and realized losses from investments.  Since
becoming the successor Managing General Partner of the Retirement Fund, Alliance
Corporate has not received any Deductible Fees.  Alliance Corporate is a related
party of the Retirement Fund.

      The Investment Advisory Fee is calculated and paid quarterly,  in advance.
The  Investment  Advisory Fees paid by the  Retirement  Fund for the years ended
December 31, 1995,  1994 and 1993 were  $1,037,207,  $1,278,599 and  $1,581,950,
respectively.  The decrease in the Investment Advisory Fees, is due primarily to
the  return of  capital  distributed  to  Limited  Partners  which  reduced  the
Retirement  Fund's  Available  Capital on which the  Investment  Advisory Fee is
based.

7.    Fund Administration Fee and Expenses


      As compensation for its services during the fourth through seventh year of
operation  of  the  Funds,  ML  Fund  Administrators,  Inc.  ("MLFAI"),  as  the
Retirement Fund  administrator,  is entitled to receive from the Funds an annual
amount equal to the greater of the (I) Minimum Fee and (II) the Funds'  prorated
proportion  (based on the  number of Units  issued by the Funds) of 0.45% of the
excess of the aggregate  net offering  proceeds of the Units issued by the Funds
over 50% of the aggregate amount of capital  reductions of the Funds (subject to
an annual maximum of $3.2 million).  The Minimum Fee is 1% of the gross offering
price of Units in the Funds, but not greater than $500,000.  The Retirement Fund
Administration Fee is calculated and paid quarterly,  in advance. The Retirement
Fund  Administration  Fees  paid by the  Retirement  Fund  for the  years  ended
December  31,  1995,  1994  and  1993  were  $701,954,  $766,168  and  $830,638,
respectively.


      In addition to the Retirement Fund  Administration  Fee, MLFAI is entitled
to receive reimbursement for a portion of direct out-of-pocket expenses incurred
in connection  with the  administration  of the Retirement  Fund,  commencing on
October 13, 1992. For the years ended December 31, 1995 and 1994, the Retirement
Fund  incurred  Administrative  expenses of $135,139 and $367,552  respectively,
which  consisted  primarily of printing,  audit and tax return  preparation  and
custodian fees paid for by MLFAI on behalf of the Retirement Fund.




<PAGE>




8.    Independent General Partners' Fees and Expenses



      As compensation for their services,  each  Independent  General Partner is
entitled to a $30,000 annual fee (payable quarterly) from the Retirement Fund in
addition  to  $500  for  each  meeting  attended  plus   reimbursement  for  any
out-of-pocket  expenses.  In accordance with the Retirement  Fund's  Partnership
Agreement,  the  amount  of such fee is  reviewed  annually  by the  Independent
General Partners.


      For the years ended December 31, 1995,  1994 and 1993, the Retirement Fund
incurred $161,236, $160,979 and $166,441,  respectively,  of Independent General
Partners' Fees and Expenses.



9.    Related Party Transactions



      For the years ended December 31, 1995,  1994 and 1993, the Retirement Fund
incurred   expenses  of  $105,443,   $68,512  and  $38,509,   respectively,   as
reimbursement  for amounts paid for legal services provided by Equitable Life in
connection with the Retirement Fund's Enhanced Yield Investments. The Retirement
Fund is paying Alliance Corporate an Investment Advisory Fee for its services as
described in Note 6. Additionally, the Retirement Fund paid sales commissions to
Equico Securities, a related party, as described in Note 5.



10.   Investment Transactions



      The Retirement Fund is invested  primarily in Enhanced Yield  Investments,
also known in the securities industry as "high yield securities". The securities
in which the Retirement  Fund has invested were issued in  conjunction  with the
mezzanine financing of privately  structured,  friendly leveraged  acquisitions,
recapitalizations and other leveraged financings,  and are generally linked with
an equity  participation.  Enhanced  Yield  Investments  are debt and  preferred
equity securities that are unrated or are rated by Standard & Poor's Corporation
as BB or lower and by Moody's Investor  Services,  Inc. as Ba or lower.  Risk of
loss upon default by the issuer is  significantly  greater with  Enhanced  Yield
Investments  than  with  investment  grade  securities  because  Enhanced  Yield
Investments  are  generally  unsecured  and  are  often  subordinated  to  other
creditors  of the  issuer.  Also,  these  issuers  usually  have high  levels of
indebtedness  and are more sensitive to adverse economic  conditions,  such as a
recession or increasing  interest rates, than investment grade issuers.  Most of
these  securities are subject to resale  restrictions  and generally there is no
quoted market for such securities.

      Although the Retirement  Fund cannot  eliminate its risks  associated with
participation in Enhanced Yield Investments,  it has established risk management
policies.  The Retirement Fund subjects each prospective  investment to rigorous
analysis and will make only those  investments that have been recommended by the
Managing  General  Partner  and  that  meet  the  Retirement  Fund's  investment
guidelines  or that have  otherwise  been  approved by the  Independent  General
Partners.  Fund investments are measured  against  specified Fund investment and
performance  guidelines.  To limit the exposure of the Retirement Fund's capital
in any single issuer, the Retirement Fund limits the amount of its investment in
a particular  issuer.  The Retirement Fund also continually  monitors  portfolio
companies  in order to  minimize  the risks  associated  with  participation  in
Enhanced Yield Investments.

        During the year ended December 31, 1995, the Retirement  Fund received a
total of $473,000 and $14,733 from Western Pioneer, Inc. and MTI Holdings, Inc.,
respectively,  as principal  paydowns of the senior notes held by the Retirement
Fund. No gain or loss has been recorded on the transactions and the amounts will
be distributed as return of capital to the Limited Partners.


        On August 3, 1995,  the Retirement  Fund sold its American  Safety Razor
Company 13.5% Series B  Subordinated  Notes for $1,529,928 and recognized a gain
of $29,999 on the sale.




<PAGE>


        During the year ended December 31, 1995,  the  Retirement  Fund received
$48,755 and $78,108 from Polaris Pool Systems, Inc. and Haddon Craftsman,  Inc.,
respectively.  The monies  represent  proceeds from the sale of the  investments
from  prior  years  that have been held in escrow  for  future  adjustments  and
expenses  not  paid  on  the  sale  dates.  These  proceeds  were  recorded  and
distributed as gains.


        On  September  15,  1995  the  Retirement  Fund  sold its  common  stock
investment in JP Foodservice,  Inc. for $4,109,845,  which resulted in a gain to
the Retirement Fund of $1,947,481.

        During the year ended December 31, 1995,  the  Retirement  Fund received
total proceeds of $268,723 from Multi-Turf,  Inc. as paydown of the equity held,
which resulted in a gain of $248,472 to the Retirement Fund.

        On October 26, 1995, Apollo Radio Holding Company, Inc. repaid its 15.0%
Subordinated  Note.  The  Retirement  Fund received total proceeds of $1,809,915
which  represented all outstanding  principal,  accrued  interest and a realized
gain of $272,730.

      On November  21,  1995,  Lexmark  International  Group,  Inc.  ("Lexmark")
(formerly Lexmark Holding, Inc.) completed the initial public offering of shares
of common  stock held by  certain  existing  shareholders  of  Lexmark.  After a
fifteen to one stock split,  Equitable Capital Partners  (Retirement Fund), L.P.
(the  "Retirement  Fund") held  1,403,011  shares of Lexmark  common stock.  The
Retirement  Fund sold 401,581 shares in the offering  representing  28.6% of the
shares held by the Retirement Fund for total net proceeds of $7,569,801 or a net
price of $18.85 per share. The initial cost of the shares sold by the Retirement
Fund was  $2,677,207.  As a  result,  the  Retirement  Fund  realized  a gain of
$4,892,595.  The shares of Lexmark common stock are listed on the New York Stock
Exchange under the symbol LXK.

      As of December  31,  1995,  the  Retirement  Fund had  investments  in ten
Managed  Companies (a Managed  Company is one to which the Retirement  Fund, the
Managing  General  Partner or other persons in the  Retirement  Fund's  investor
group makes significant  managerial  assistance  available) and four Non-Managed
Companies  (a  Non-Managed  Company  is  one to  which  such  assistance  is not
provided)  totaling   $85,451,445   (including  $422,439   capitalized  cost  of
payment-in-kind  securities),  consisting  of  $59,318,927  in senior  notes and
subordinated  notes,  $3,650,263  in preferred  stock and purchase  warrants and
$22,482,255 in common stock and purchase warrants.



11.   Allocation of Profits and Losses


      Pursuant to the terms of the Partnership Agreement,  net investment income
and gains and losses on investments are generally allocated between the Managing
General  Partner  and the  Limited  Partners  based upon cash  distributions  as
follows:

      first,  99% to the Limited Partners and 1% to the Managing General Partner
      until the Limited  Partners have received a cumulative  priority return of
      10%  non-compounded  on an annual basis on their  investments  in Enhanced
      Yield Investments,

      second,  70% to the  Limited  Partners  and  30% to the  Managing  General
      Partner until the Managing General Partner has received 20% of all current
      and prior distributions on such investments,

      and thereafter, 80% to the Limited Partners and 20% to the Managing
      General Partner.

      For the year ended  December 31, 1995,  earnings were allocated 99% to the
Limited Partners, as a class, and 1% to the Managing General Partner.

12.   Unrealized Appreciation/Depreciation, and Non-Accrual of Investments

      For the year ended  December 31, 1995,  the  Retirement  Fund recorded net
unrealized  depreciation  on Enhanced  Yield  Investments  of  $6,915,689.  Such
depreciation  was the result of  adjustments  in value made with  respect to the
following investments during 1995:

      On March 31, 1995,  Pergament Home Centers,  Inc. Class B Common Stock was
written down from 75% to 25% of cost,  resulting in unrealized  depreciation  of
$3,366,000.

     The RI Holdings,  Inc.  common stock purchased on May 9, 1995 was valued at
zero, resulting in unrealized depreciation of $920 to the Retirement Fund.

      On June 30, 1995, MTI Holdings, Inc. Class B Common Stock was written down
from 100% to zero and the 5% Senior  Secured  Note was written down from 100% to
75% of par. On September 30, 1995, MTI Holdings, Inc. 5% Senior Secured Note was
written down from 75% to 50% of par value.  These  writedowns  resulted in total
unrealized  depreciation  of $746,886 to the  Retirement  Fund. Due to principal
paydowns during the three months ended September 30, 1995,  $1,206 of unrealized
depreciation was reversed.

     The Tulip Holding Corp. 14.5%  Subordinated  Note was written down from 50%
to 25% of par at June 30,1995 and 25% to 5% of par at September  30, 1995.  This
resulted in total unrealized depreciation of $1,977,430 to the Retirement Fund.

      On June 30, 1995, due to a default of an interest  payment on senior notes
held by a third party,  the WB Bottling  Corporation  preferred and common stock
held by the  Retirement  Fund were  written  down  from 100% to 10% of cost.  On
December 31, 1995, WB Bottling Corporation preferred stock and common stock were
written down from 10% to zero. This resulted in total unrealized depreciation of
$248,796 to the Retirement Fund.

      Due to an increase in the quoted  market  price of JP  Foodservice  common
stock held by the Retirement Fund at June 30, 1995, the Retirement Fund recorded
unrealized  appreciation  of  $1,068,566.  The  equity  was valued at 90% of the
closing  market  price at June 30,  1995,  due to  contractual  restrictions  on
resale.  Due to the sale of the common stock investment in JP Foodservice,  Inc.
on September 15, 1995, the Retirement Fund reversed the unrealized  appreciation
recorded of $987,090.

      On September 30, 1995,  Ampex  Recording  Media Corp. 14% and 18.4% Senior
Subordinated  Series A & B Notes were written down from 50% to 25% of par value,
which resulted in unrealized  depreciation of $2,722,289 to the Retirement Fund.
Due to an increase in the quoted  market  price of Ampex  Recording  Media Corp.
warrants held by the Retirement  Fund at December 31, 1995, the Retirement  Fund
recorded unrealized appreciation of $62,669. Due to a restructuring,  $5,773,823
of unrealized depreciation was reversed at December 31, 1995.

     On September 30, 1995, U.S. Leather Holdings,  Inc. 8% Senior  Subordinated
Preferred Stock and the 15% Senior  Subordinated  PIK Notes were written down to
zero. On December 31, 1995, U.S. Leather Holdings,  Inc. 15% Senior Subordinated
Note was  written  down from 100% to 60% of par.  These  writedowns  resulted in
total unrealized depreciation of $10,259,970 to the Retirement Fund.

      Due to a 15-to-1 stock split and initial public offering of Lexmark common
stock on November 21, 1995, the Retirement Fund recorded unrealized appreciation
of  $6,498,596.  The  equity was valued at 90% of the  closing  market  price at
December 31, 1995, due to contractual restrictions on resale.

      Due to the decline in the quoted  market  price of American  Safety  Razor
Company  common  stock,   the  Retirement  Fund  recorded  a  total   unrealized
depreciation of $635,916 at December 31, 1995.

     On December 31,  1995,  Apollo Radio  Holding  Co.,  Inc.  common stock was
written up from zero,  resulting in unrealized  appreciation  of $624,750 to the
Retirement Fund.

      For the years  ended  December  31,  1994 and 1993,  the  Retirement  Fund
recorded  net   unrealized   depreciation   of  $5,675,676  and  net  unrealized
appreciation of $4,082,028, respectively.



<PAGE>


        The  following  investments  have been on  non-accrual  status as of the
respective dates:

        U.S. Leather Holdings, Inc. 15%
          Senior Subordinated Note                 October 1, 1995
        MTI Holdings, Inc. 5%
          Senior Secured Note                      October 1, 1995
        Western Pioneer, Inc. 10%
          Senior Subordinated Note                 November 30, 1994
        RI Holdings, Inc. 16%
          Senior Subordinated Notes                April 25, 1994
        Tulip Holding, Corp. 14.5% and 16.5%
          Subordinated Notes                       January 1, 1994

      Alliance  Corporate  continues to monitor the Retirement  Fund's portfolio
closely.  As a matter of standard  procedure,  Alliance  Corporate  reviews each
portfolio company's financial statements at least quarterly,  and often monthly.
Investment managers routinely review and discuss financial and operating results
with the companies' management and equity sponsors, and attend periodic board of
directors meetings, as appropriate.  In some cases, Alliance Corporate officers,
acting on behalf of the Funds  serve as  directors  on the  boards of  portfolio
companies. When problems arise, communication with management and sponsors often
occurs on a daily basis.

13.   Income Taxes

      No  provision  for income  taxes has been made since all income and losses
are  allocated  to  the  Retirement  Fund's  partners  for  inclusion  in  their
respective tax returns.

      Pursuant  to  Statement  of  Financial  Accounting  Standards  No.  109  -
Accounting  for Income Taxes,  the  Retirement  Fund is required to disclose any
difference between the tax basis of the Retirement Fund's assets and liabilities
versus the amounts  reported in the  Financial  Statements.  Generally,  the tax
basis of the  Retirement  Fund's assets  approximate  the amortized cost amounts
reported in the Financial Statements. This amount is computed annually and as of
December 31, 1995,  the tax basis of the  Retirement  Fund's  assets was greater
than the amounts  reported in the  Financial  Statements  by  $38,950,769.  This
difference is primarily  attributable to unrealized  depreciation on investments
which has not been recognized for tax purposes.  Additionally,  certain realized
gains and losses due to restructuring were treated differently for tax purposes,
but not for financial reporting purposes.

14.   Subsequent Distributions

      On  February  7,  1996,  the  Independent  General  Partners  approved  an
aggregate cash  distribution  of $10,274,966 for the three months ended December
31, 1995, which was paid on February 14, 1996. The amount distributed to Limited
Partners  was  $10,259,951  or $46.41 per Unit (of which  $3,610,106  is capital
returned  from  investments  during  the  fourth  quarter  of 1995),  to Limited
Partners of record at December 31, 1995. On a per Unit basis,  this distribution
to Limited  Partners  includes  $23.36 of realized  gains,  $6.72 of income from
operations and $16.33 of return of capital.  The Managing General  Partner's one
percent allocation of $103,636 was reduced, in accordance with the provisions of
the Partnership  Agreement,  by its one percent allocation of realized gains and
capital returned from investments  during the fourth quarter of 1995 of $88,621,
resulting in a net distribution of $15,015.


<PAGE>



Item 9.    Disagreements on Accounting and Financial Disclosure

      None.

                                  Part III

Item 10.   Directors and Executive Officers of the Registrant

The Retirement Fund

      The  Retirement  Fund's  general  partners  (the "General  Partners")  are
responsible for the management and  administration  of the Retirement  Fund. The
General Partners consist of Alliance Corporate  succeeding Equitable Capital, as
the  Managing  General  Partner,  and four  individuals  serving as  Independent
General Partners. Each Independent General Partner is not an "interested person"
of the Retirement Fund as such term is defined in the Investment  Company Act of
1940, as amended (the "Investment Company Act").

Independent General Partners

      The Independent  General Partners provide overall guidance and supervision
with respect to the  operations of the  Retirement  Fund and perform the various
duties  imposed  on the  directors  of  business  development  companies  by the
Investment  Company Act of 1940. The Independent  General Partners supervise the
Managing   General  Partner  and  must,  with  respect  to  any  Enhanced  Yield
Investment,  either  certify  that it meets  the  Retirement  Fund's  investment
guidelines or specifically approve it. The Independent General Partners are also
responsible for approving certain transactions  pursuant to the conditions of an
exemptive   order  issued  by  the  Securities  and  Exchange   Commission  (the
"Commission")  under which the  Retirement  Fund  operates.  In  addition,  if a
portfolio company is in material default with respect to its payment obligations
under any  lending  agreement  to which it is a party or has a ratio of earnings
before  interest,  taxes and  depreciation  to cash fixed charges of 1.1 to 1 or
less for the latest fiscal year for which  financial  statements  are available,
the  Independent  General  Partners  are  required to approve any changes in the
terms of the Fund's investment in such a portfolio company.

     Messrs.  Robert W. Lear and Robert F.  Shapiro  have served as  Independent
General  Partners of the Retirement  Fund and the Enhanced Yield Fund since June
1988. On April 12, 1989,  Mr. Alton G. Marshall and Dr. William G. Sharwell were
admitted to the  Retirement  Fund and the Enhanced  Yield Fund,  increasing  the
total number of Independent  General Partners to four. Each Independent  General
Partner  shall hold  office  until his  removal or  withdrawal  pursuant  to the
provisions of the Partnership Agreement.

     Mr. Lear, age 78, has been an Executive-in-Residence and Visiting Professor
at the Columbia  University Graduate School of Business since 1977. He is also a
director of Cambrex Corp. and the Korea Fund (a closed-end investment fund). Mr.
Lear is a trustee of the Scudder Institutional Funds (mutual funds) and a member
of the advisory  board of the Welsh,  Carson,  Anderson,  Stowe Venture  Capital
Funds.

     Mr.  Shapiro,  age  61,  is  the  President  of  RFS  &  Associates,   Inc.
(consultants  and  investments).  From  1986 to 1987 he was the  Co-Chairman  of
Wertheim Schroeder & Co. Inc.  (investment bankers) and from 1974 to 1986 he was
the President of its predecessor,  Wertheim & Co. Inc. Mr. Shapiro is a director
of TJX Companies,  Inc. (specialty  retailing),  a director of American Building
Companies and the Burnham Fund Inc.  (mutual fund).  Mr. Shapiro was Chairman of
the Securities Industry Association in 1985.

     Mr.  Marshall,  age 74, is  Senior  Fellow  of the  Nelson  A.  Rockefeller
Institute of Government.  He is also President of Alton G. Marshall  Associates,
Inc. (real estate  consultants).  He was Chairman and Chief Executive Officer of
Lincoln  Savings Bank from 1984 to 1991. He is also a Director of New York State
Electric and Gas Corporation.  He is a Trustee of EQK Realty Investors I and EQK
Green Acres (real  estate  investors),  and a Trustee of The Hudson River Trust,
which is a mutual fund receiving investment advice from Alliance Capital.

     Dr. Sharwell,  age 75, served as the President of Pace University from 1984
to 1990,  after  retiring in 1984 as Senior Vice President of AT&T. He is also a
director of USLife Corporation,  American Biogenetic  Sciences,  Inc. and United
States Life Insurance Company.

Managing General Partner

      The Managing General Partner is responsible for purchasing investments for
the Retirement  Fund which the  Independent  General  Partners have reviewed for
compliance with the investment  guidelines or otherwise approved,  for providing
administrative services to the Retirement Fund and for the admission of assignee
Limited Partners to the Retirement Fund.

Management of Alliance Corporate and the Retirement Fund

      The senior officers of Alliance  Corporate  responsible for overseeing the
management of the Retirement Fund are:

                         Position with Alliance Corporate Finance
                         Group Incorporated

Frank Savage             Chairman of the Board of Directors

James R. Wilson          President

William Gobbo, Jr.       Senior Vice President

James D. Neidhart        Senior Vice President

Laura Mah                Vice President and Chief Accounting
                         Officer


     Mr. Frank Savage,  age 57, is Chairman of Alliance  Corporate,  Chairman of
Alliance Capital Management International and a member of the Board of Directors
of Alliance Capital Management  Corporation.  He is Senior Vice President of The
Equitable  Life  Assurance  Society of the United  States.  He was  formerly the
Chairman of Equitable Capital Management  Corporation,  an investment management
subsidiary of Equitable Life,  which was combined with Alliance  Capital in July
of 1993.  Mr.  Savage is a  director  of  Lockheed  Corporation,  ARCO  Chemical
Company,  Lexmark Corporation,  Essence Communications,  Inc. and The Council on
Foreign Relations.  He is a member of the Board of Trustees of The Johns Hopkins
University  and Howard  University  and Chairman of the Advisory  Council of the
Johns Hopkins University Nitze School of Advanced International Studies.

      James R. Wilson,  age 49, is the President of Alliance Corporate and is in
charge of Alliance Corporate's Finance Department. He has specialized in private
placement  investment  management for over 20 years. He joined Equitable Life in
1970. From 1975 to 1978, he was in charge of the Private Placement  Department's
Atlanta regional office, responsible for making direct placement loans to middle
market  companies.  He then  returned to the home office to supervise the credit
review and approval  procedures of all six regional offices. In 1980, Mr. Wilson
joined  the  Investment   Recovery  Division  of  Equitable  Capital  Management
Corporation and  subsequently  became its head.  During his tenure in investment
recovery,   he  was  instrumental  in  a  number  of  major   restructuring  and
recapitalizations  of  troubled  companies  and  served as  chairman  of several
creditors'  committees.  Mr. Wilson was elected senior vice president and deputy
head of Equitable Capital's Corporate Finance Department in 1985, and in 1991 he
became executive vice president and head of the Corporate Finance Department. He
was named  President of Alliance  Corporate  Finance Group in 1993 in connection
with the Alliance  Capital/Equitable  Capital  merger.  Mr. Wilson has served on
several  corporate Boards and presently is a director of US Leather,  Inc. He is
active in private placement industry events, has been a speaker at many industry
conferences on leveraged buyouts and mezzanine finance and served as Chairman of
the annual  Private  Placement  Conference in 1994.  Mr. Wilson is a graduate of
Denison University and holds an MBA from the University of Pittsburgh.



<PAGE>


     Mr.  William  Gobbo,  Jr.,  age 51, is a Senior Vice  President of Alliance
Corporate.  Mr. Gobbo joined Alliance  Corporate  through the  combination  with
Equitable  Capital.  Mr. Gobbo joined  Equitable Life in 1967 as an economist in
the office of  Equitable's  Chief  Economist.  He joined the  Private  Placement
Department  in 1976 and in 1984  became  head of an  investment  group  that was
responsible  for  the  Department's   lending  activities   involving  financial
institutions and heavy industrial companies.

      Mr.  James D.  Neidhart,  age 51, is a Senior Vice  President  of Alliance
Corporate.  He is head of the Investment Recovery Division of Alliance Corporate
responsible  for the  management of public and private  investments in companies
that  have  encountered  troubled  financial  situations.  He has been  actively
involved  in  over  20-25  restructuring,  playing  in  most a  leadership  role
including  chairmanship of committees critical to the restructuring process. Mr.
Neidhart,  who joined Alliance  Corporate through the combination with Equitable
Capital, had been employed by Equitable Capital in its workout group since 1986.
Prior to that, he had nine years of experience in private placement  investments
and workout transactions with the Prudential Insurance Company of America, three
years of commercial  lending  experience  with Harris Trust and Savings Bank and
served six years as an Officer in the U.S. Air Force.

     Mrs.  Laura  Mah,  age 40, is a Vice  President  of  Alliance  Capital  and
co-manages the Insurance  Services Group.  She is responsible for accounting and
reporting  for  assets  managed  by  Alliance  Capital  for  insurance  clients,
including mutual funds,  partnerships,  general, separate and advisory accounts.
Mrs. Mah joined Alliance Capital through the combination with Equitable Capital.
Prior to that, she was an Assistant  Vice President with Shearson  Lehman Hutton
for five years. She is a Certified Public Accountant.

The Investment Adviser

      As a result of the combination of the businesses of Equitable  Capital and
Alliance Capital,  Equitable  Capital's  investment  advisory agreement with the
Retirement  Fund  terminated in  accordance  with its terms on July 22, 1993. On
that date,  Alliance  Corporate  succeeded  Equitable  Capital as the Retirement
Fund's  investment  advisor.  As  investment  adviser  to the  Retirement  Fund,
Alliance  Corporate  is  responsible  for  the  identification,  management  and
liquidation of all investments for the Retirement Fund.

The Administrator

      The Administrator  performs certain operating and administrative  services
for the Retirement Fund on behalf of the Managing General Partner pursuant to an
administrative services agreement,  dated October 13, 1988, among the Retirement
Fund, Equitable Capital and the Administrator.

      The information  contained in the Prospectus under the caption "Management
Arrangements" is incorporated by reference into this Item 10.

Item 11.   Executive Compensation

      The information  with respect to  compensation of the Independent  General
Partners set forth under the caption "Management Arrangements -- The Independent
General  Partners" in the Prospectus is incorporated by reference into this Item
11. The Retirement Fund paid Mr. Lear $36,250, Mr. Shapiro $36,250, Mr. Marshall
$36,481 and Dr.  Sharwell  $36,250 in fees,  with  respect to their  services as
Independent General Partners in 1995.

      The information with respect to the "Fund Administration Fee and Expenses"
payable to the Managing  General Partner and the  Administrator  set forth under
the caption  "Management  Arrangements -- The Managing  General  Partner" in the
Prospectus is  incorporated  by reference into this Item 11. The Retirement Fund
paid $848,815 to the  Administrator,  through the Managing General  Partner,  in
1995.

      The information  with respect to the "Investment  Advisory Fee" payable to
Alliance  Corporate (and  distributions  from the Managing  General Partner) set
forth under the caption  "Management  Arrangements  -- Description of Investment
Advisory  Agreements" in the Prospectus is  incorporated  by reference into this
Item 11. The Retirement Fund paid Alliance Corporate  $1,037,207 with respect to
the  Investment  Advisory  Fee for  1995.  The  Managing  General  Partner's  1%
allocation of net investment  income from Temporary  Investments,  which in 1995
amounted to $5,157, is credited against the Investment Advisory Fees as required
by the Partnership Agreement.

      Alliance  Corporate,  as  Managing  General  Partner,   received  $61,650,
representing distributions of net investment income in 1995.

Item 12.   Security Ownership of Certain Beneficial Owners and Management

      As of the  date of this  report,  no  person  or  entity  is  known by the
Retirement  Fund to be the beneficial  owner of more than 5% of the total number
of outstanding Units.

      The  Independent  General  Partners and directors and officers of Alliance
Corporate  own as a  group,  13  Units,  or  less  than  1% of the  total  Units
outstanding.

Item 13.   Certain Relationships and Related Transactions

      The  Retirement  Fund  co-invests in Enhanced Yield  Investments  with the
Equitable  Capital  Partners,  L.P. and certain  affiliates of Equitable Capital
pursuant to the terms of an exemptive  order granted by the Commission on August
11, 1988 permitting  co-investments  on certain terms and conditions,  Equitable
Capital  Partners,  L.P.,  et al.  (812-6983)  IC-16522,  August  11,  1988 (the
"Order").  On December 31, 1990, the Commission granted a request to: (I) permit
any person serving as an officer,  director or employee of Equitable Life or any
of its  subsidiaries  to serve as a director of Equitable  Capital;  (ii) permit
Equitable Life and its subsidiaries  (other than Equitable  Capital) and certain
other  affiliates of Equitable  Capital to invest as limited partners in sponsor
limited  partnerships which invest in transactions in which the Retirement Funds
also invest;  and (iii) amend and restate all of the conditions and undertakings
contained in the August 11, 1988 Order to conform them to those contained in the
application  filed with the Commission on behalf of Equitable  Capital  Partners
II, L.P. and Equitable  Capital Partners  (Retirement  Fund) II, L.P.  Equitable
Capital Partners (Retirement Fund), L.P., et al.
(812-7328) IC - 17925, December 31, 1990.

      Pursuant to such  arrangements,  the  Retirement  Fund  co-invested in the
Enhanced  Yield  Investments  listed above in Item 1 with the Equitable  Capital
Partners, L.P. and one or more of the following: Equitable Deal Flow Fund, L.P.,
Equitable  Capital  Private Income and Equity  Partnership  II, L.P.,  Equitable
Life,  Equitable Variable Life Insurance  Company,  Tandem Insurance Group, Inc.
and Royal Tandem Insurance Company.

      In connection  with the  transaction  that  resulted in the  succession of
Alliance  Corporate as Managing General Partner of and Investment Adviser to the
Funds,  Equitable Capital and Alliance  Corporate  received two exemptive orders
from the  Securities and Exchange  Commission  permitting the Funds and Alliance
Corporate to rely on the exemptive orders previously issued to Equitable Capital
and the Funds, subject to the same conditions and undertakings under such orders
as applied to Equitable Capital.



<PAGE>


                                    Part IV


Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

      (a)  Financial Statements, Financial Statement
           Schedules and Exhibits

See Item 8.  Financial Statements and Supplementary Data "Table of Contents."


Exhibits

3.1        Amended and Restated Certificate of Limited Partnership,
           dated as of April 12, 1989*

4.1        Amended and Restated Agreement of Limited Partnership, dated
           as of October 13, 1988**

10.1       Investment Advisory Agreement, dated July 22, 1993, between
           Registrant and Alliance Corporate Finance Group
           Incorporated***

10.2       Administrative Services Agreement, dated October 13, 1988,
           among the Registrant, Equitable Capital Management
           Corporation and ML Fund Administrators, Inc.**

13.1       (a)  Forms 10-Q
                Form 8-K ****

28.1       Portions of Prospectus of Registrant and Equitable  Capital Partners,
           L.P., dated July 15, 1988, incorporated by reference into this Annual
           Report on Form 10-K

*          Incorporated  by reference to the Retirement  Fund's Annual Report on
           Form 10-K for the fiscal year ended December 31, 1989, filed with the
           Securities and Exchange Commission on March 29, 1990

**         Incorporated  by reference to the Retirement  Fund's Annual Report on
           Form 10-K for the fiscal year ended December 31, 1988, filed with the
           Securities and Exchange Commission on March 29, 1989

***        Incorporated  by reference to the Retirement  Fund's Annual Report on
           Form 10-K for the fiscal year ended December 31, 1993, filed with the
           Securities and Exchange Commission on March 28, 1994.

****       Incorporated  by reference to the Retirement  Fund's Annual Report of
           Form 10-K for the fiscal year ended December 31, 1995, filed with the
           Securities and Exchange Commission on November 22, 1995.


<PAGE>


                                   SIGNATURES


      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf  by the  undersigned,  thereunto  duly  authorized  on the 25th day of
March, 1996.

                          EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.

                          By:  Alliance Corporate Finance Group Incorporated,
                               as Managing General Partner,

Dated: March 25, 1996          _________________________________
                               Frank Savage
                               Title:  Chairman of the Board


Dated: March 25, 1996          _________________________________
                               Laura Mah
                               Title:  Vice President and Chief
                                       Accounting Officer





<PAGE>


      Pursuant to the  Requirements  of the  Securities and Exchange Act of 1934
this  report has been  signed  below by the  following  persons on behalf of the
Registrant in the capacities indicated on the 25th day of March, 1996.

      Signature                              Title

______________________     Independent General Partner of
Robert W. Lear             Equitable Capital Partners (Retirement Fund), L.P.

______________________     Independent General Partner of
Robert F. Shapiro          Equitable Capital Partners (Retirement Fund), L.P.

______________________     Independent General Partner of
Alton G. Marshall          Equitable Capital Partners (Retirement Fund), L.P.

______________________     Independent General Partner of
William G. Sharwell        Equitable Capital Partners (Retirement Fund), L.P.

______________________
Frank Savage               Chairman of the Board of Alliance Corporate

______________________
James R. Wilson            President and Director of Alliance Corporate

______________________
Dave H. Williams           Director of Alliance Corporate

______________________
Bruce W. Calvert           Director of Alliance Corporate

______________________
John D. Carifa             Director of Alliance Corporate



<PAGE>


                                   SIGNATURES


      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf  by the  undersigned,  thereunto  duly  authorized  on the 25th day of
March, 1996.

                          EQUITABLE CAPITAL PARTNERS (RETIREMENT FUND), L.P.

                          By:  Alliance Corporate Finance Group Incorporated,
                               as Managing General Partner,

Dated: March 25, 1996          /s/  Frank Savage
                               Frank Savage
                               Title:  Chairman of the Board


Dated: March 25, 1996          /s/  Laura Mah
                               Laura Mah
                               Title:  Vice President and Chief
                                       Accounting Officer



<PAGE>


      Pursuant to the  Requirements  of the  Securities and Exchange Act of 1934
this  report has been  signed  below by the  following  persons on behalf of the
Registrant in the capacities indicated on the 25th day of March, 1996.

     Signature                                 Title


/s/  Robert W. Lear         Independent General Partner of
Robert W. Lear              Equitable Capital Partners (Retirement Fund), L.P.

/s/  Robert F. Shapiro      Independent General Partner of
Robert F. Shapiro           Equitable Capital Partners (Retirement Fund), L.P.

/s/  Alton G. Marshall      Independent General Partner of
Alton G. Marshall           Equitable Capital Partners (Retirement Fund), L.P.

/s/  William G. Sharwell    Independent General Partner of
William G. Sharwell         Equitable Capital Partners (Retirement Fund), L.P.

/s/  Frank Savage
Frank Savage                Chairman of the Board of Alliance Corporate

/s/  James R. Wilson
James R. Wilson             President and Director of Alliance Corporate

/s/  Dave H. Williams
Dave H. Williams            Director of Alliance Corporate

/s/  Bruce W. Calvert
Bruce W. Calvert            Director of Alliance Corporate

/s/  John D. Carifa
John D. Carifa              Director of Alliance Corporate