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, 1998                  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.  Following  liquidation  and  winding-up  of the
Funds,  Certificates of Cancellation of the Certificates of Limited  Partnership
were filed by the Funds on January 27, 1999. The Retirement Fund's objective was
to seek  current  income and capital  appreciation  potential  by  investing  in
privately   structured,    friendly   leveraged   acquisitions   and   leveraged
recapitalizations.  The  Retirement  Fund  pursued  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 was  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"),   served  as  the  Funds'  independent   general  partners  (the
"Independent General Partners").  Messrs. Shapiro and Lear served from June 1988
until the  Retirement  Funds'  dissolution,  and Mr.  Marshall and Dr.  Sharwell
served from 1989 until the Retirement Funds'  dissolution.  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,  was  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 was subject to
certain provisions of the Investment Company Act. The Retirement Fund filed Form
N-54C to withdraw its election to be treated as a business  development  company
on January  27,  1999.  The  description  of the  Retirement  Fund's  investment
objective and policies,  its management  arrangements and certain  provisions of
the Investment  Company Act that were  applicable to the Retirement  Fund during
its term 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 was not  permitted to
acquire new Enhanced  Yield  Investments,  but was  permitted to make  follow-on
investments in existing portfolio companies.  During the year ended December 31,
1998 and 1997, the Retirement Fund made no follow-on investment.

     During  the year  ended  December  31,  1996,  the  Retirement  Fund made a
follow-on  investment in one Managed  Company at a total cost of $2,232.  

     The  Retirement  Fund was liquidated and dissolved as of December 31, 1998,
and as of that  date the  Retirement  Fund had no  Enhanced  Yield  Investments.
During  1998,  1997  and  1996  the Fund  receive  $4,714,134,  $50,807,443  and
$20,659,748,  respectively,  in principal  payments and  prepayment  relating to
certain Enhanced Yield Investments.

     During  its  term,  the  Retirement  Fund  invested  in  certain  temporary
investments,  consisting principally of commercial paper with maturities of less
than sixty days.  Proceeds that were not invested in Enhanced Yield  Investments
or returned to Limited Partners were held in such temporary investments.

Competition

     The Retirement  Fund has completed its investment  period and  reinvestment
period and was  liquidated and dissolved as of December 31, 1998. The Retirement
Fund liquidated its investments  during fiscal year 1998 and, as of December 31,
1998, held no portfolio investments.

Employees

     The Retirement Fund has no employees. The Managing General Partner, subject
to the supervision of the Independent  General Partners,  managed and controlled
the Retirement Fund's  investments.  Certain officers of Alliance Corporate were
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   performed   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.
<PAGE>
                                     Part II


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

     The  Retirement  Fund filed Form 15 with the Commission on January 27, 1999
to terminate the registration of the Units under the Securities  Exchange Act of
1934.

     The  Units  were  illiquid  securities  and  were  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
was no  established  trading  market for the Units.  The  Partnership  Agreement
contained restrictions that were intended to prevent the development of a public
market.

     The number of holders of Units as of  December  31,  1998 was  23,945.  The
Managing  General Partner held a general partner interest in the Retirement Fund
and did not hold any Units. Pursuant to the terms of the Partnership  Agreement,
the Retirement Fund generally made 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 were  distributed as soon as practicable  after the
related  disposition.  Such  distributions  were  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
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.

<PAGE>
<TABLE>
<CAPTION>

Item 6. Selected Financial Data
                                                                             For the Years Ended

<S>                              <C>                  <C>                 <C>                  <C>                <C>
                                   December 31, 1998   December 31, 1997   December 31, 1996   December 31, 1995   December 31, 1994
TOTAL FUND INFORMATION:            -----------------   -----------------   -----------------   -----------------  -----------------
Cash Distributions to Partners        $ 9,965,927(a)      $  65,855,797(c)     $19,384,272(d)      $26,397,957        $ 30,860,830
Net Assets                                      -            17,402,161         85,429,641          88,842,112         115,578,330
Total Assets                                    -            17,506,475         85,552,314          88,926,178         115,662,552
Net Investment (Loss) Income           (1,586,094)              516,140          4,579,169           4,999,345           5,797,964
Net Change in Unrealized
 Appreciation (Depreciation)
 on Investments                        12,791,052           (16,270,956)        18,779,614          (6,915,689)         (5,675,676)
Net Realized (Losses)
 Gains on Investments                 (17,990,948)           13,929,328         (7,321,494)          1,744,317             642,557 


PER UNIT OF LIMITED
PARTNERSHIP INTEREST:

Cash Distributions                    $     45.08(a)      $      297.81(c)     $    87.44(d)       $    119.13        $     139.31


Cumulative Cash
 Distributions                           1,305.32(b)           1,260.24             962.43              874.99              755.86 
Investment Income                            1.25                  9.50              29.00               32.00               38.24
Expenses                                    (8.42)                 7.19               8.49               (9.62)             (12.28)
Net Investment Income                       (7.17)                 2.31              20.51               22.38               24.09 
Net Unrealized Appreciation
  (Depreciation) on Investments             57.28                (72.86)             84.10              (30.97)             (25.42)
Net Realized (Losses) Gains  
 on Investments                            (80.57)                62.38             (32.79)               7.81                2.88
Net Asset Value                                 0                 75.47             381.46              397.85              516.98

</TABLE>

(a) Includes Return of Capital of $6,879,760 or $31.12 per LP Unit.
(b) Includes Return of Capital of $587.00 per LP Unit.
(c) Includes Return of Capital of $34,277,214 or $155.05 per LP Unit.
(d) Includes Return of Capital of $6,484,042 or $29.33 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

     As of  December  31,  1998,  the  Retirement  Fund  had no  Enhanced  Yield
Investments.

      Proceeds from Investments

      During the year ended December 31, 1998, the Retirement  Fund received the
following proceeds:

     During the year ended  December 31, 1998,  the  Retirement  Fund received a
total of $161,436 from Pergament Home Centers,  Inc. as a principal  paydown of
the Floating  Rate Demand Note held by the  Retirement  Fund.  No gain,  loss or
income was recorded on this transaction.

     During the year ended  December  31, 1998,  the  Retirement  Fund  received
additional  proceeds of $48,189 from Polaris Pool Systems,  Inc. This represents
proceeds  from the sale of the  investments  from prior  years that were held in
escrow for future adjustments and expenses.

     During the first quarter ended March 31, 1998, the Retirement Fund sold the
remaining  69,683 shares of Lexmark  International  Group,  Inc. Class B common
stock for $2,801,847 resulting in a gain of $2,337,292 to the Retirement Fund.

     During the year ending  December 31, 1998, the Retirement Fund sold its MTI
Holdings,  Inc. 12% Senior Secured Note,  common stock and warrants for $608,495
and realized a gain of $373,234 on the sale.

     On June 17, 1998, the Fund sold $278,384 par value of R&S/Strauss, Inc. 15%
Senior Subordinated Note for $36,470 resulting in a loss of $241,914.

     On July 24, 1998, the Fund sold its Pergament Home Centers,  Inc.  Floating
Rate Demand Note , Class B and Class C common stocks for $448,800 resulting in a
loss of $8,404,160 to the Fund.

     On September 15, 1998, the Fund sold its Western  Pioneer,  Inc. 10% Senior
Subordinated Note and common stock purchase warrants for $275,000 resulting in a
loss of $378,289 to the Fund.

     On October 7, 1998, the Fund sold its Leather U.S.,  Inc.  common stock for
$124,380 resulting in a loss of $7,183,620 to the Fund.

     On November 5, 1998,  the Fund sold its remaining  portion of  R&S/Strauss,
Inc. 15% Senior  Subordinated Note for $18,559 resulting in a loss of $1,828,057
to the Fund.

     On December 22, 1998, the Fund sold its Quantegy  Acquisition  Corp. common
stock for $8,667 resulting in a loss of $2,713,623 to the Fund.

     All proceeds not used to pay  expenses  during the year ended  December 31,
1998 were distributed to Limited  Partners.  The final  distribution was paid on
December  21, 1998.  The  Retirement  Fund was  liquidated  and  dissolved as of
December 31, 1998, and a Certificate of  Cancellation  of Certificate of Limited
Partnership was filed on January 27, 1999.

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

     The Retirement  Fund's Enhanced Yield  Investments were typically issued in
private  placement  transactions  and were  subject to certain  restrictions  on
transfer, and were thus relatively illiquid.

      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  were  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 analyzed the then current cash  projections  and determined the
amount of any additional reserves it deemed necessary.

Participation in Enhanced Yield Investments

     The  Retirement  Fund was liquidated and dissolved as of December 31, 1998,
and had no assets as of that date. During its term, the Retirement Fund invested
primarily in Enhanced Yield Investments,  also known in the securities  industry
as "high yield securities". The securities in which the Retirement Fund invested
were issued in conjunction with the mezzanine financing of privately structured,
friendly   leveraged   acquisitions,   recapitalizations   and  other  leveraged
financings,  and were 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 could not eliminate its risks  associated with
participation  in Enhanced Yield  Investments,  it established  risk  management
policies.  The Retirement Fund subjected each prospective investment to rigorous
analysis,  and made only those investments that were recommended by the Managing
General  Partner and that meet the Retirement  Fund's  investment  guidelines or
that were otherwise approved by the Independent General Partners.

     Retirement Fund investments were 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 limited the amount of
its  investment in a particular  issuer.  The Retirement  Fund also  continually
monitored  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,  1998,  the  Retirement  Fund had a net
investment loss of $1,586,094,  a decrease of $2,102,234 from the net investment
income of $516,140 for the year ended December 31, 1997. The Retirement Fund had
net investment  income of $4,579,169 for the same period in 1996. Net investment
income is  comprised  of  investment  income  (primarily  interest  and dividend
income)  offset by  expenses.  The  decrease in the 1998 net  investment  income
versus the  comparative  period in 1997  reflects  the  decrease in interest and
dividend income and a increase in Fund Administration Fees and Expenses.

     For the year ended December 31, 1998,  the  Retirement  Fund had investment
income of $275,799,  as compared to  $2,120,811  for the same period in 1997 and
$6,475,628 for the same period in 1996. The decrease in 1998  investment  income
of 87% versus  1997 was  primarily  due to a  decrease  in the amount of accrual
status debt  securities held by the Fund due to sales and repayments of Enhanced
Yield Investments  during 1998. The decrease in the 1997 of investment income of
67% versus the  comparative  period in 1996 was  primarily due to a decrease in
the amount of accrual status debt  securities held by the Retirement Fund due to
the sales and repayments of Enhanced Yield Investments during 1997.

     The  Retirement  Fund incurred  expenses of  $1,861,893  for the year ended
December 31,  1998,  as compared to  $1,604,671  for the same period in 1997 and
$1,896,459 for the same period in 1996. The increase in the 1998 expenses versus
the  1997   expenses  of  $257,222  was   primarily  due  to  an  increase  Fund
Administration  Fees  and  Expenses  due to a new Fund  Administrative  Services
Agreement  entered into as of December  31, 1998 (as  described in Note 7 to the
Financial Statements) and Independent General Partners' Fees and Expense paid by
the Fund  offset by a  decrease  in  Professional  Fees.  The  decrease  in 1997
expenses  versus 1996  expenses of $291,788 was primarily due to the decrease in
the  Professional  Fees  and the  Fund  Administrative  Fees  and  Expenses  and
Independent General Partner's Fees paid by the Fund.

     The  Retirement  Fund  experienced a decrease in net assets  resulting from
operations for the year ended December 31, 1998 in the amount of $6,785,990,  as
compared to a decrease of $1,825,488  for the same period in 1997.  The decrease
in net assets in net in 1998 versus 1997 is  attributable  to an increase in net
unrealized  appreciation of $29,062,008,  a decrease in net investment income of
$2,102,234 and an increase in net realized loss of $31,920,276.  (see Statements
of Operations in the Financial Statements). The decrease in net assets resulting
from operations in 1997 versus 1996 is attributable to an increase in unrealized
depreciation  of $35,050,570  offset by a decrease in net  investment  income of
$4,063,029 and an increase in net realized gain of $21,250,822.

     For the years ended December 31, 1998,  1997, and 1996 the Retirement  Fund
incurred  Investment  Advisory  Fees  of  $874,348,   $906,195,   and  $842,503,
respectively, (as described in Note 6 to the Financial Statements).

     The Fund  Administration  Fees and Expenses (as  described in Note 7 to the
Financial Statements) for the years ended December 31, 1998, 1997 and 1996, were
$813,910,  $414,349 and  $680,441,  respectively.  The increase of $399,561 from
1997 to 1998 is primarily the result of the Fund  Administration Fee changing to
an  annual  fee of  $100,000  plus  100% of all  direct  out-of-pocket  expenses
incurred by the Retirement Fund  Administrator on behalf of the Fund. During the
years ended December 31, 1998,  1997 and 1996,  the  Retirement  Fund incurred a
total of  $638,910,  $314,349  and  $146,468,  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 Expense incurred for the years ended
December  31,  1998,  1997 and  1996,  were  $148,951,  $147,671  and  $183,611,
respectively.  The  changes  are  attributable  to  fluctuations  in legal  fees
incurred  by the  Independent  General  Partners.  (See Note 8 to the  Financial
Statements.)

     The Retirement  Fund incurred  professional  fees of $22,426,  $125,730 and
$171,200 for the years ended  December 31,  1998,  1997 and 1996,  respectively,
which included  reimbursed legal fees to Debevoise & Plimpton and Equitable Life
for legal services. (See Note 9 to Financial Statements.)
<PAGE>
Unrealized Appreciation/Depreciation, and Non-Accrual of Investments

     During its term, the General Partners of the Retirement Fund determined, on
a quarterly basis, the fair value of the Retirement Fund's portfolio  securities
that did not have a readily  ascertainable  market value.  They were assisted in
connection  with such  determination  by the  Managing  General  Partner,  which
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 used available market information
and  appropriate  valuation  methodologies.  In addition,  the Managing  General
Partner  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
invested,  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 have resulted 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 have taken place
when  a  significant  favorable  development  occured,  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 used 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
invested.  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, 1998 and 1997 the Retirement Fund recorded
net unrealized appreciation on Enhanced Yield Investments of $12,791,052 and net
unrealized  depreciation  of  $16,270,956,  respectively.  For  the  year  ended
December 31, 1996, the Retirement  Fund recorded net unrealized  appreciation on
Enhanced Yield  Investments of $18,779,614.  The change of $29,062,008 from 1997
to 1998, in unrealized  depreciation was primarily the result of the reversal of
unrealized  depreciation on Pergament Home Centers,  Inc., Quantegy  Acquisition
Corp.,  R&S/Strauss,  Inc. and Leather U.S., Inc. and the reversal of unrealized
appreciation on Lexmark International Group, Inc. and Western Pioneer, Inc. (See
Note 12 to the Financial Statements.)
      
Realized Gains and Losses on Investments

     For the year ended  December 31, 1998,  the  Retirement  Fund  recorded net
realized  losses of $17,990,948 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 year ended  December 31, 1997,
the Retirement Fund realized a net gain on investments of  $13,929,328.  For the
year  ended  December  31,  1996,  the  Retirement  Fund  realized a net loss of
$7,321,494.
<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, 1998 and 1997

Statements of Operations
  For the Years Ended December 31, 1998, 1997 and 1996

Statements of Cash Flows
  For the Years Ended December 31, 1998, 1997 and 1996

Statements of Changes in Net Assets 
  For the Years Ended December 31, 1998, 1997 and 1996

Statements of Changes in  Partners'  Capital 
  For the Years Ended December 31, 1998, 1997 and 1996

Supplementary Schedule of Realized Gains and Losses
  For the Year Ended December 31, 1998

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, 1998 and 1997 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, 1998. These
financial statements are the responsibility of the Fund's General Partners.  Our
responsibility is to express an opinion on these financial statements based upon
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 include
confirmation of securities owned as of December 31, 1998, 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, 1998
and 1997, the results of  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 $7,083,787  as of December 31, 1997  representing
40.5 percent of total  assets,  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, 1998 is presented for
the  purposes 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 22, 1998
<PAGE>


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

<TABLE>
<S>                                                           <C>                    <C>                      <C>
                                                                                                          
ASSETS:                                                             Notes             December 31, 1998         December 31, 1997
                                                                   -------            -----------------         -----------------

    Investments                                                    2,10,12
        Enhanced Yield Investments at Value-
            Managed Companies
            (amortized cost of $0 at
            December 31, 1998 and $12,155,290
            at December 31, 1997)                                                           $         -              $  4,847,290
            Non-Managed Companies
            (amortized cost of $0 at
            December 31, 1998 and $10,367,470
            at December 31, 1997)                                                                     -                 4,884,451
        Temporary Investments
            (at amortized cost)                                                                       -                 6,898,850

    Cash                                                                                              -                    24,028
    Interest Receivable                                             2,12                              -                    19,322
    Note Receivable                                                  3,4                              -                   832,534

TOTAL ASSETS                                                                                $         -              $ 17,506,475
                                                                                            ===========              ============


LIABILITIES AND PARTNERS' CAPITAL

    Liabilities                                                                                           
        Professional Fees Payable                                     9                     $         -              $     52,721
        Independent General Partners' Fees Payable                    8                               -                     9,788
        Fund Administrative Expenses Payable                          7                               -                    38,958
        Other Accrued Liabilities                                                                     -                     2,847
            Total Liabilities                                                                         -                   104,314

    Partners' Capital
        Managing General Partner                                     3,4                              -                   717,018
        Limited Partners (221,072 Units)                              4                               -                16,685,143
            Total Partners' Capital                                                                   -                17,402,161

TOTAL LIABILITIES AND PARTNERS' CAPITAL                                                     $         -              $ 17,506,475
                                                                                            ===========              ============
</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,     December 31,     December 31, 
                                                                   1998             1997              1996
                                                                ------------     ------------    -------------
INVESTMENT INCOME- NOTES 2,12:
      Interest                                                 $     275,799    $   2,053,480    $   4,603,229
      Dividend                                                          --             67,331        1,872,399
                    TOTAL INVESTMENT INCOME                          275,799        2,120,811        6,475,628

EXPENSES:
      Investment Advisory Fee- Note 6                                874,348          906,195          842,503
      Fund Administration Fees and Expenses- Note 7                  813,910          414,349          680,441
      Independent General Partners'
       Fees and Expenses - Note 8                                    148,951          147,671          183,611
      Professional Fees - Note 9                                      22,426          125,730          171,200
      Insurance Fees                                                                    5,126            4,410
      Valuation Expenses                                               2,258            5,600           14,294
                    TOTAL EXPENSES                                 1,861,893        1,604,671        1,896,459

NET INVESTMENT (LOSS) INCOME                                      (1,586,094)         516,140        4,579,169

NET CHANGE IN UNREALIZED APPRECIATION
      (DEPRECIATION) ON INVESTMENTS- NOTE 12                      12,791,052      (16,270,956)      18,779,614

NET REALIZED (LOSS) GAIN ON INVESTMENTS- NOTE 10                 (17,990,948)      13,929,328       (7,321,494)

NET (DECREASE) INCREASE IN NET ASSETS
      RESULTING FROM OPERATIONS                                $  (6,785,990)   $  (1,825,488)   $  16,037,289
                                                               =============    =============    =============
</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
                                                                         -----------------------------------------------  
                                                                          December 31,    December 31,      December 31,     
                                                                               1998            1997               1996
INCREASE (DECREASE) IN CASH                                              -------------    -------------    -------------       
CASH FLOWS FROM OPERATING ACTIVITIES:
       Interest and Discount Income                                      $      11,080    $   2,054,172    $   3,990,822
       Fund Administration Fees and Expenses                                  (852,868)        (418,476)        (665,800)
       Investment Advisory Fee                                                (874,348)        (906,195)        (842,503)
       Independent General Partners' Fees and Expenses                        (158,739)        (158,730)        (172,309)
       Valuation Expenses                                                       (5,105)          (8,854)         (12,435)
       Sale (Purchase) of Temporary Investments, Net                         7,182,892       14,575,782       (3,390,853)
       Proceeds from Sales and Principal Payments of
            Enhanced Yield Investments                                       4,714,134       50,807,443       20,659,748
       Professional Fees                                                       (75,147)        (125,275)        (158,255)
       Insurance Fees                                                             --             (2,990)            (375)
Net Cash Provided by Operating Activities                                    9,941,899       65,816,877       19,408,040
CASH FLOWS FROM FINANCING ACTIVITIES:
       Cash Distributions to Partners                                       (9,965,927)     (65,855,797)     (19,384,272)
Net Cash Used in Financing Activities                                       (9,965,927)     (65,855,797)     (19,384,272)
Net Increase in Cash                                                           (24,028)         (38,920)          23,768
Cash at the Beginning of the Period                                             24,028           62,948           39,180
Cash at the End of the Period                                            $        --      $      24,028    $      62,948
                                                                         =============    =============    =============


                                     RECONCILIATION OF NET (DECREASE) INCREASE IN NET ASSETS RESULTING FROM
                                             OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Net (Decrease) Increase In Net Assets
     Resulting From Operations                                           $  (6,785,990)   $  (1,825,488)   $  16,037,289

Adjustments to Reconcile Net (Decrease) Increase in Net Assets
       Resulting from Operations to Net Cash Provided by Operating
       Activities:
Decrease in Investments                                                     29,887,974       51,453,897       24,590,390
Increase in Accrued Interest and Other Investment Income                      (264,719)         (66,640)      (2,484,809)
Decrease in Prepaid Expenses                                                      --              2,511            4,412
(Decrease) Increase  in Other Accrued Liabilities                               (2,847)          (3,254)           1,859
(Decrease) Increase in Fund Administration Expenses Payable                    (38,958)          (4,127)          14,640
Net Change in Unrealized (Appreciation) Depreciation on Investments        (12,791,052)      16,270,956      (18,779,614)
(Decrease) Increase in Independent General Partners' Fees Payable               (9,788)         (11,058)          11,303
(Decrease) Increase in Professional Fees Payable                               (52,721)              80           12,570
Total Adjustments                                                           16,727,889       67,642,365        3,370,751
Net Cash Provided by Operating Activities                                $   9,941,899    $  65,816,877    $  19,408,040
                                                                         =============    =============    =============


</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 Year Ended
                                                                     ----------------------------------------------
                                                                     December 31,     December 31,     December 31,
                                                                         1998             1997             1996
                                                                     ------------    -------------    ------------- 
FROM OPERATIONS:

     Net (Decrease) Increase in Net Assets
       Resulting from Operations                                    $  (6,785,990)   $  (1,825,488)   $  16,037,289

     Cash Distributions to Partners                                    (9,965,927)     (65,855,797)     (19,384,272)

     Reduction in Managing General Partners'
       Contribution                                                      (650,244)        (346,195)         (65,488)

     Total Decrease                                                   (17,402,161)     (68,027,480)      (3,412,471) 

NET ASSETS:

     Beginning of Period                                               17,402,161       85,429,641        88,842,112

     End of Period                                                  $           0    $  17,402,161     $  85,429,641
                                                                    =============    =============     ============= 

</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, 1996

Partners' Capital at January 1, 1996                                $1,058,667   $  87,783,445    $ 88,842,112
Cash Distributions to Partners                                         (53,737)    (19,330,535)    (19,384,272)
Reduction in Managing General Partners' Contribution         3         (65,488)           --           (65,488)
Allocation of Net Investment Income                         11          45,791       4,533,378       4,579,169
Allocation of Net Unrealized Appreciation
  on Investments                                            12         187,796      18,591,818      18,779,614
Allocation of Net Realized Loss on Investments                         (73,215)     (7,248,279)     (7,321,494)
Partners' Capital at December 31, 1996                              $1,099,814   $  84,329,827    $ 85,429,641
                                                                    ==========   =============    ============

FOR THE YEAR ENDED DECEMBER 31, 1997

Partners' Capital at January 1, 1997                                $1,099,814   $  84,329,827    $ 85,429,641
Cash Distributions to Partners                                         (18,345)    (65,837,452)    (65,855,797)
Reduction in Managing General Partners' Contribution         3        (346,195)           --          (346,195)
Allocation of Net Investment Income                         11           5,161         510,979         516,140
Allocation of Net Unrealized Depreciation
  on Investments                                            12        (162,710)    (16,108,246)    (16,270,956)
Allocation of Net Realized Gain on Investments                         139,293      13,790,035      13,929,328
Partners' Capital at December 31, 1997                               $ 717,018    $ 16,685,143    $ 17,402,161
                                                                  ============    ============    ============

FOR THE YEAR ENDED DECEMBER 31, 1998

Partners' Capital at January 1, 1998                                 $ 717,018    $ 16,685,143    $ 17,402,161
Cash Distributions to Partners                                            --        (9,965,927)     (9,965,927)
Reduction in Managing General Partners' Contribution         3        (650,244)           --          (650,244)
Allocation of Net Investment Loss                           11         (14,777)     (1,571,317)     (1,586,094)
Allocation of Net Unrealized Appreciation
  on Investments                                            12         127,911      12,663,141      12,791,052
Allocation of Net Realized Loss on Investments                        (179,908)    (17,811,040)    (17,990,948)
Partners' Capital at December 31, 1998                            $        --     $        --     $       --
                                                                  ============    ============    ============



</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, 1998



<S>                                          <C>           <C>             <C>            <C>            <C>
                         
                                                                    PAR VALUE OR
                                                     DATE OF         NUMBER OF      AMORTIZED          NET            REALIZED
SECURITY                                           TRANSACTION         SHARES          COST          PROCEEDS        GAIN (LOSS)
------------------------------------              -------------     ------------   -----------     -------------   --------------
Lexmark International Group, Inc. 
   Common Stock                                      various             69,683    $   464,555      $   2,801,847   $  2,337,292

MTI Holdings, Inc. 
   12% Sr. Sec. Note                                 3/12/98         $  113,386        113,386            113,386             --
   Common Stock                                                           8,125        121,875            121,875             --
   Common Stock Purchase Warrants                                         2,264             --                 --             --


Total Net Realized Gain for the
  Three Months Ended March 31, 1998                                                $   699,816      $   3,037,108   $  2,337,292
                                                                                   ===========      =============   ============


MTI Holdings, Inc. 
   Common Stock                                                           8,125    $        --      $     318,105   $    318,105
   Common Stock Purchase Warrants                                         2,264             --             55,129         55,129

Polaris Pool Systems, Inc. 
  Common Stock                                       4/23/98                 --             --              1,754          1,754 (A)

R&S/ Strauss, Inc. 
   15% Sr. Sub. Note                                 6/17/98         $  278,384        278,384             36,470       (241,914)
 
Total Net Realized Gain for the
  Three Months Ended June 30, 1998                                                 $   278,384      $     411,458   $    133,074
                                                                                   ===========      =============   ============
Pergament Home Centers, Inc.
    Floating Rate Demand Note                        7/24/98         $2,543,200    $ 2,120,960      $     448,800   $ (1,672,160)
    Common Stock Class B                                                299.200      6,732,000                 --     (6,732,000) 
    Common Stock Class C                                                106.778             --                 --             --

Western Pioneer, Inc.
    10% Sr. Sub. Note                                9/15/98         $4,730,000        653,289            275,000       (378,289)
    Common Stock Purchase Warrants                                       81,081             --                 --             --   

Total Net Realized Loss for the
  Three Months Ended September 30, 1998                                            $ 9,506,249      $     723,800   $ (8,782,449)
                                                                                   ===========      =============   ============
Leather U.S., Inc.
    Common Stock                                     10/7/98             621.90    $ 7,308,000      $     124,380   $ (7,183,620)

R&S/Strauss, Inc.
    15% Sr. Sub. Note.                               11/5/98         $1,846,616      1,846,616             18,559     (1,828,057)

Quantegy Acquisition Corp.
    Common Stock                                    12/22/98             123.50      2,722,290              8,667     (2,713,623)

Polaris Pool Systems, Inc.
    Common Stock                                    12/31/98                  -              -             46,435         46,435 (A)


Total Net Realized Loss for the 
  Three Months Ended December 31, 1998                                             $11,876,906      $     198,041   $(11,678,865) 
                                                                                   ===========      =============   ============

Total Net Realized Loss for the
  Year Ended December 31, 1998                                                     $22,361,355      $    4,370,407  $(17,990,948)
                                                                                   ===========      ==============  ============ 




(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, 1998

1.  Partnership Dissolution and Liquidation

     Equitable Capital Partners, L. P. (the "Fund") sold its last Enhanced Yield
Investment  on December  22,1998  and,  thereby,  dissolved in  accordance  with
Article 4, Section  4.01 (iv) of its Amended and  Restated  Agreement of Limited
Partnership.

     Final  distributions were paid to the Limited Partners on December 21,1998.
Accordingly,  the  accompanying  financial  statements  are the final  financial
statements of the Partnership.

     A Certificate of  Cancellation  of Certificate of Limited  Partnership  was
accepted for filing by the  Secretary of State of the State  Delaware on January
27, 1999.

    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 (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 to succeed
Equitable  Capital.  Accordingly,  on July 22,  1993,  the  closing  date of the
transaction  described  above,  (i)  Alliance  Corporate  was  admitted  as  the
successor Managing General Partner of the Funds, (ii) Equitable Capital withdrew
from the Funds as Managing  General  Partner and assigned all of its interest as
General  Partner to Alliance  Corporate and (iii) 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 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
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 reached the end
of its ten year term on  October  13,  1998.  The  Retirement  Fund made a final
distribution on December 21, 1998.
<PAGE>
2.    Significant Accounting Policies

      Basis of Accounting

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

      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 $0
and  $7,083,787  as of December  31, 1998 and 1997,  respectively,  representing
40.5% of 1997 total assets. 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 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.

      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  were 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.

      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 returns of capital are  received  by the Fund.  Such
return of capital  received for the year ended December 31, 1998,  resulted in a
$650,244  reduction of the  principal  amount of the Note.  The remainder of the
Note was paid by Alliance Capital at year ended December 31, 1998.

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 $2,052,059.  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 0.5% 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 Funds totaled
$4,711,806.

     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.
<PAGE>
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.

     As stated in the Partnership  Agreement,  the Retirement  Fund's  allocable
share of the Minimum  Amount is $874,350 or  $218,588  per  quarter.  

     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,  1998,  1997  and  1996  were  $874,348,  $906,195  and  $842,503,
respectively.  The decrease from 1997 to 1998 in the Investment  Advisory Fee is
due primarily to 1997  reflecting an adjustment for the  difference  between the
Minimum Amount due to the Investment  Advisor and what was paid for the quarters
ending December 31, 1996 and March 31, 1997.

     The Investment Advisory Agreement was terminated on December 31, 1998.

7.    Fund Administration Fee and Expenses

     In accordance with the Partnership  Agreement  beginning  October 13, 1996,
the Fund Administration Fee is an annual fee of $100,000 plus 100% of all direct
out-of-pocket expenses incurred by the Fund Administator on behalf of the Fund.

     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, received 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,  1998,  1997 and 1996 were  $175,000,  $100,000  and
$533,973, respectively.

     Beginning October 13, 1997, MLFAI is entitled to receive  reimbursement for
all  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,  1998,  1997 and 1996 the  Retirement  Fund  incurred
Administrative expenses of $638,910, $314,349 andd $146,468 respectively,  which
consisted primarily of printing,  audit and tax return preparation and custodian
fees paid for by MLFAI on behalf of the Retirement Fund.

     Upon  termination  of the  Fund  on  December  31,  1998,  the  prior  Fund
Administrative  Services  Agreement with MLFAI was  terminated.  A new agreement
commencing January 1, 1999, will provide certain post termination administrative
services.

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, 1998,  1997 and 1996, the Retirement  Fund
incurred $148,951, $147,671, and $183,611,  respectively, of Independent General
Partners' Fees and Expenses.

9.    Related Party Transactions

     For the years ended December 31, 1998, the Retirement  Fund paid no related
party  expenses.  For the years ended 1997 and 1996,  the  Retirement  Fund paid
expenses of $21,995,  and $102,008,  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.
<PAGE>
10.   Investment Transactions

     The Retirement Fund 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, 1998,  the  Retirement  Fund received a
total of $161,436 from  Pergament Home Centers,  Inc. as a principal  paydown of
the Floating  Rate Demand Note held by the  Retirement  Fund.  No gain,  loss or
income was recorded on this transaction.

     During the year ended  December  31, 1998,  the  Retirement  Fund  received
additional  proceeds of $48,189 from Polaris Pool Systems,  Inc. This represents
proceeds  from the sale of the  investments  from prior  years that were held in
escrow for future adjustments and expenses.

     During the first quarter ended March 31, 1998, the Retirement Fund sold the
remaining  69,683 shares of Lexmark  International  Group,  Inc.  Class B common
stock for $2,801,847 resulting in a gain of $2,337,292 to the Retirement Fund.

     During the year ending  December 31, 1998, the Retirement Fund sold its MTI
Holdings,  Inc. 12% Senior Secured Note,  common stock and warrants for $608,495
and realized a gain of $373,234 on the sale.

     On June 17, 1998, the Fund sold $278,384 par value of R&S/Strauss, Inc. 15%
Senior Subordinated Note for $36,470 resulting in a loss of $241,914.

     On July 24, 1998, the Fund sold its Pergament Home Centers,  Inc.  Floating
Rate Demand Note , Class B and Class C common stocks for $448,800 resulting in a
loss of $8,404,160 to the Fund.

     On September 15, 1998,  the Fund sold its Western  Pioneer,  Inc 10% Senior
Subordinated Note and common stock purchase warrants for $275,000 resulting in a
loss of $378,289 to the Fund.

     On October 7, 1998, the Fund sold its Leather U.S.,  Inc.  common stock for
$124,380 resulting in a loss of $7,183,620 to the Fund.

     On November 5, 1998,  the Fund sold its remaining  portion of  R&S/Strauss,
Inc. 15% Senior  Subordinated Note for $18,559 resulting in a loss of $1,828,057
to the Fund.

     On December 22, 1998, the Fund sold its Quantegy  Acquisition  Corp. common
stock for $8,667 resulting in a loss of $2,713,623 to the Fund.

     All proceeds not used to pay  expenses  during the year ended  December 31,
1998 were distributed to Limited  Partners.  The final  distribution was paid on
December  21, 1998.  The  Retirement  Fund was  liquidated  and  dissolved as of
December 31, 1998, and a Certificate of  Cancellation of Certificates of Limited
Partnership was filed on January 27, 1999.

     As of December 31, 1998, the Retirement Fund had no investments in Enhanced
Yeild Investments.
<PAGE>
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, 1998,  earnings were  allocated 99% to the
Limited Partners, as a class, and 1% to the Managing General Partner, except for
certain adjustments which were necessary in allocating investment loss.

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

     For the year ended  December 31, 1998,  the  Retirement  Fund  recorded net
unrealized  appreciation  on Enhanced  Yield  Investments of  $12,791,052.  Such
appreciation  was the result of  adjustments  in value made with  respect to the
following investments during 1998:

     The amount  includes the reversal of $2,183,398 of unrealized  appreciation
of Lexmark  International  Group,  Inc. Class B Common Stock, due to the sale of
the remaining 69,683 shares.

     On March 31, 1998, Quantegy Acquisition Corp. common stock was written down
from 100% to 15% of remaining  cost,  resulting in  unrealized  depreciation  of
$2,313,946 to the Retirement Fund.

     On March 31, 1998, the R&S/Strauss,  Inc. 15% Senior  Subordinated Note was
written down from 100% to 25% of par,  resulting in unrealized  depreciation  of
$1,593,750 to the Retirement Fund.

     On March 31, 1998, the Western Pioneer,  Inc. 10% Senior  Subordinated Note
par value was reduced resulting in unrealized depreciation of $240.

     On June 30, 1998, Quantegy  Acquisition Corp. common stock was written down
from 15% to 6.4% of remaining  cost,  resulting in  unrealized  depreciation  of
$234,431 to the Retirement Fund.

     On June 30,  1998,  R&S/Strauss,  Inc.  15%  Senior  Subordinated  Note was
written down from 25% to 13% of par,  resulting in  unrealized  depreciation  of
$221,594 to the Retirement Fund.

     The  reversal  of $208,788 of  unrealized  depreciation  due to the sale of
$278,384 par value of R&S/Strauss, Inc. 15% Senior Subordinated Note.

     The reversal of $8,432,401 of  unrealized  depreciation  due to the sale of
its Pergament Home Centers, Inc. Floating Rate Demand Note , Class B and Class C
common stocks.

     The reversal of $765,711 of unrealized  appreciation due to the sale of its
Western  Pioneer,  Inc. 10% Senior  Subordinated  Note and common stock purchase
warrants.

     On September 30, 1998, Quantegy  Acquisition Corp. common stock was written
down from 6.4% of cost to zero resulting in unrealized  depreciation of $173,913
to the Fund.

     On  September  30,  1998,  the  remaining  R&S/Strauss,   Inc.  15%  Senior
Suborinated  Note  was  written  down  from  13%  of par to  zero  resulting  in
unrealized depreciation of $240,060 to the Fund.

     The reversal of $7,308,000 of  unrealized  depreciaiton  due to the sale of
its Leather U.S., Inc. common stock.

     The reversal of $2,722,290 of  unrealized  depreciation  due to the sale of
its Quantegy Acquistion Corp. common stock.

     The reveral of $1,846,616 of unrealized depreciation due to the sale of its
R&S/Strauss, Inc. 15% Senior Subordinated Note.
<PAGE>
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.  Due to the  termination,  the
partnership had no assets or liabilities at December 31, 1998.
<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")  were
responsible for the management and  administration  of the Retirement  Fund. The
General Partners consisted of Alliance Corporate  succeeding  Equitable Capital,
as the Managing  General Partner,  and four  individuals  serving as Independent
General  Partners.  Each  Independent  General  Partner  was 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 provided 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 supervised 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 were
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 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 held
office until the Retirement Fund was liquidated and dissolved.

     Mr. Lear, age 81, 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  64  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 77, 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 78, 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.
<PAGE>

Managing General Partner

     The Managing General Partner was responsible for purchasing investments for
the  Retirement  Fund  which  the  Independent  General  Partners  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
                         ----------------------------------------
   
James R. Wilson          President

William Gobbo, Jr.       Senior Vice President

Christopher Bricker      Vice President and Chief Accounting Officer


      James R. Wilson,  age 52, 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.

     Mr.  William  Gobbo,  Jr.,  age 54, 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.

     Christopher J. Bricker is a Vice President of Alliance Fund Services. He is
responsible  for the  Accounting  operations for  approximately  85 Offshore and
Partnership  Investment  Vehicles with approximately $20 billion in assets under
management.  Mr. Bricker has been with Alliance for 7 years and prior to joining
Alliance,   he  worked  at  Dean  Witter  in  their  Intercapital  Division  for
approximately  2 years.  Mr. Bricker has a BS in Accounting  from Marist College
and a MBA in Finance from Long Island University.

<PAGE>

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.  Under a new  agreement  that
commenced  on January 1, 1999,  the  Administrator  will  provide  certain  post
termination administrative services.


      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 $34,500, Mr. Shapiro $34,500, Mr. Marshall
$34,500 and Dr.  Sharwell  $34,500 in fees,  with  respect to their  services as
Independent General Partners in 1998.

     The information with respect to the "Fund  Administration Fee and Expenses"
payable  to  the   Administrator   set  forth  under  the  caption   "Management
Arrangements -- The Administator" in the Prospectus is incorporated by reference
into this Item 11. The  Retirement  Fund paid $852,868 to the  Administrator  in
1998.

     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  $874,348 with respect to
the Investment Advisory Fee for 1998.

     Alliance Corporate, as Managing General Partner,  received no distributions
of net investment income in 1998.
<PAGE>
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-invested 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, 1996, filed with the
           Securities and Exchange Commission on November 22, 1996.


<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 30th day of March,
1999.

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

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

Dated: March 30, 1999             /s/  James R. Wilson
                                  -----------------------------
                                  James R. Wilson
                                  Title:  President



Dated: March 30, 1999            /s/ Christopher Bricker
                                 ------------------------------
                                 Christopher Bricker
                                 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 30th day of March, 1999.

      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.

________________________
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

________________________
Frank Savage               Director of Alliance Corporate


________________________   Co-Chairman, Co-Chief Executive Officer and
Mark Arnold                Director of Alliance Corporate


________________________   Co-Chairman, Co-Chief Executive Officer and
Alastair Tedford           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 30th day of March,
1999.

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

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

Dated: March 30, 1999          /s/  James R. Wilson
                               ------------------------
                               James R. Wilson
                               Title:  President


Dated: March 30, 1999          /s/  Christopher Bricker
                               ------------------------
                               Christopher Bricker
                               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 30th day of March, 1999.

     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/  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

/s/  Frank Savage
Frank Savage                Director of Alliance Corporate

/s/  Mark Arnold            Co-Chairman, Co-Chief Executive Officer and
Mark Arnold                 Director of Alliance Corporate

/s/  Alastair Tedford       Co-Chairman, Co-Chief Executive Officer and
Alastair Tedford            Director of Alliance Corporate