UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 For the quarterly period ended March 31, 2004 --------------

[ ]  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange  Act  of  1934
    For the transition period from  _________ to _____________


                          Commission File No. 000-25767
                                             ---------


                             Belair Capital Fund LLC
                             -----------------------
             (Exact name of registrant as specified in its charter)


             Massachusetts                             04-3404037
             -------------                             ----------
        (State of organization)          ( I.R.S. Employer Identification No.)

       The Eaton Vance Building
           255 State Street
        Boston, Massachusetts                            02109
        ---------------------                            -----
(Address of principal executive offices)               (Zip Code)


         Registrant's telephone number:               617-482-8260
                                                      ------------

                                      None
                                      ----
              (Former Name, Former Address and Former Fiscal Year,
                          if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the 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  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934).

                                   YES  [X]      NO  [ ]

<PAGE>

                             BELAIR CAPITAL FUND LLC
                               Index to Form 10-Q

PART I  FINANCIAL INFORMATION                                              Page

Item 1. Condensed Consolidated Financial Statements                          3

        Condensed Consolidated Statements of Assets and Liabilities
        as of March 31, 2004 (Unaudited) and December 31, 2003               3

        Condensed Consolidated Statements of Operations (Unaudited
        for the Three Months Ended March 31, 2004 and 2003                   4

       Condensed Consolidated Statements of Changes in Net Assets for
       the Three Months Ended March 31, 2004 (Unaudited) and the Year
       Ended December 31, 2003                                               6

       Condensed Consolidated Statements of Cash Flows (Unaudited) for
       the Three Months Ended March 31, 2004 and 2003                        7

       Financial Highlights (Unaudited) for the Three Months Ended
       March 31, 2004                                                        9

       Notes to Condensed Consolidated Financial Statements
       as of March 31, 2004 (Unaudited)                                     10

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                           15

Item 3. Quantitative and Qualitative Disclosures About Market Risk          18

Item 4. Controls and Procedures                                             21

PART II OTHER INFORMATION

Item 1. Legal Proceedings                                                   21

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases
        of Equity Securities                                                21

Item 3. Defaults Upon Senior Securities                                     21

Item 4. Submission of Matters to a Vote of Security Holders                 21

Item 5. Other Information                                                   21

Item 6. Exhibits and Reports on Form 8-K                                    22

SIGNATURES                                                                  23

EXHIBIT INDEX                                                               24

                                        2
<PAGE>

PART I.   FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Assets and Liabilities

                                                                                           March 31, 2004         December 31,
                                                                                            (Unaudited)               2003
                                                                                           ---------------        ------------
<S>                                                                                        <C>                   <C>
Assets:
 Investment in Belvedere Capital Fund Company LLC
  (Belvedere Company)                                                                       $ 1,604,097,252      $1,588,195,284
 Investment in Partnership Preference Units                                                     311,437,195         318,042,995
 Investment in other real estate                                                                162,906,906         162,585,380
 Short-term investments                                                                          28,460,000          11,765,330
                                                                                            ---------------      ---------------
Total investments                                                                           $ 2,106,901,353      $2,080,588,989
 Cash                                                                                             8,195,416           8,687,577
 Escrow deposits - restricted                                                                        80,839              80,839
 Open interest rate swap agreements, at value                                                             -           1,644,344
 Distributions and interest receivable                                                            1,252,330             694,054
 Other assets                                                                                     1,055,941           1,144,720
                                                                                            ---------------      ---------------
Total assets                                                                                $ 2,117,485,879      $2,092,840,523
                                                                                            ---------------      ---------------

Liabilities:
 Loan payable - Credit Facility                                                             $   468,000,000      $  447,000,000
 Mortgage payable                                                                               112,630,517         112,630,517
 Payable for Fund shares redeemed                                                                   350,000           1,180,000
 Distributions payable to minority shareholders                                                           -              16,800
 Open interest rate swap agreements, at value                                                     3,229,510                   -
 Swap interest payable                                                                              246,209             243,920
 Security deposits                                                                                  394,979             372,900
 Accrued expenses:
  Interest expense                                                                                  939,114             920,797
  Property taxes                                                                                    791,481             576,590
  Other expenses and liabilities                                                                    669,045             669,458
 Minority interests in controlled subsidiaries                                                    8,966,059           6,947,692
                                                                                            ---------------      ---------------
Total liabilities                                                                           $   596,216,914      $  570,558,674
                                                                                            ---------------      ---------------
Net assets                                                                                  $ 1,521,268,965      $1,522,281,849
                                                                                            ---------------      ---------------
Shareholders' Capital                                                                       $ 1,521,268,965      $1,522,281,849
                                                                                            ---------------      ---------------
Shares outstanding                                                                               12,654,268          12,728,157
                                                                                            ---------------      ---------------
Net asset value and redemption price per Share                                              $        120.22      $       119.60
                                                                                            ---------------      ---------------
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       3
<PAGE>
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
                                                                       Three Months        Three Months
                                                                          Ended               Ended
                                                                      March 31, 2004      March 31, 2003
                                                                      --------------      --------------
<S>                                                                   <C>                 <C>
Investment Income:
 Dividends allocated from Belvedere Company
  (net of foreign taxes of $66,409, and $59,957, respectively)         $  5,557,427       $  4,921,576
 Interest allocated from Belvedere Company                                   26,538             91,847
 Expenses allocated from Belvedere Company                               (2,410,134)        (2,002,351)
                                                                      --------------      --------------
 Net investment income allocated from Belvedere Company                $  3,173,831       $  3,011,072
  Distributions from Partnership Preference Units                         8,470,877          9,652,791
  Rental income                                                           5,511,218          5,584,172
  Interest                                                                  105,148             46,219
                                                                      --------------      --------------
Total investment income                                                $ 17,261,074       $ 18,294,254
                                                                      --------------      --------------

Expenses:
 Investment advisory and administrative fees                           $  1,401,115       $  1,284,962
 Property management fees                                                   218,537            222,627
 Servicing fees                                                             167,543            115,814
 Interest expense on mortgage                                             2,386,111          2,386,111
 Interest expense on Credit Facility                                      1,670,880          2,548,872
 Property and maintenance expenses                                        1,576,526          1,550,253
 Property taxes and insurance                                               700,781            754,647
 Amortization of deferred expenses                                                -              9,099
 Miscellaneous                                                              136,386            126,598
                                                                      --------------      --------------
Total expenses                                                         $  8,257,879       $  8,998,983
                                                                      --------------      --------------

Net investment income before minority interest
 in net income of controlled subsidiary                                $  9,003,195       $  9,295,271
Minority interest in net income of controlled subsidiary                   (110,236)          (172,159)
                                                                      --------------      --------------
Net investment income                                                  $  8,892,959       $  9,123,112
                                                                      --------------      --------------
</TABLE>

       See notes to unaudited condensed consolidated financial statements

                                       4
<PAGE>
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Operations (Unaudited) (Continued)
<TABLE>
<CAPTION>
                                                                                        Three Months        Three Months
                                                                                           Ended               Ended
                                                                                       March 31, 2004      March 31, 2003
                                                                                       ---------------    ----------------
<S>                                                                                     <C>                <C>
Realized and Unrealized Gain (Loss)
 Net realized gain (loss) -
  Investment transactions from Belvedere Company (identified cost basis)                $  5,850,913       $  (5,896,539)
  Investment transactions in Partnership Preference Units (identified cost basis)          2,399,543                  92
  Interest rate swap agreements (1)                                                       (3,051,795)         (7,108,679)
                                                                                       ---------------    ----------------
Net realized gain (loss)                                                                $  5,198,661       $ (13,005,126)
                                                                                       ---------------    ----------------

Change in unrealized appreciation (depreciation) -
 Investment in Belvedere Company (identified cost basis)                                $ 24,013,775       $ (61,019,845)
 Investment in Partnership Preference Units (identified cost basis)                       (6,958,051)         24,137,176
 Investment in other real estate (net of minority interests in unrealized
  gain (loss) of controlled subsidiary of $1,908,131 and $(349,150),
  respectively)                                                                           (1,958,342)           (433,145)
 Interest rate swap agreements                                                            (4,873,854)          6,242,253
                                                                                       ---------------    ----------------
Net change in unrealized appreciation (depreciation)                                    $ 10,223,528       $ (31,073,561)
                                                                                       ---------------    ----------------

Net realized and unrealized gain (loss)                                                 $ 15,422,189       $ (44,078,687)
                                                                                       ---------------    ----------------

Net increase (decrease) in net assets from operations                                   $ 24,315,148       $ (34,955,575)
                                                                                       ===============    ================
</TABLE>
(1)  Amount  represents  periodic payments made in connection with interest rate
     swap agreements. (Note 4)

       See notes to unaudited condensed consolidated financial statements

                                       5
<PAGE>

BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Changes in Net Assets
<TABLE>
<CAPTION>
                                                                                          Three Months
                                                                                              Ended              Year Ended
                                                                                         March 31, 2004         December 31,
                                                                                           (Unaudited)              2003
                                                                                         ---------------       ---------------
<S>                                                                                      <C>                   <C>
Increase (Decrease) in Net Assets:
 Net investment income                                                                   $    8,892,959        $   34,029,533
 Net realized gain (loss) from investment transactions                                        5,198,661            (6,702,427)
 Net change in unrealized appreciation (depreciation) of investments                         10,223,528           335,001,122
                                                                                         ---------------       ---------------
Net increase in net assets from operations                                               $   24,315,148        $  362,328,228
                                                                                         ---------------       ---------------

Transactions in Fund Shares -
 Net asset value of Fund Shares issued to Shareholders in payment of
  distributions declared                                                                 $    7,259,756        $    2,956,829
 Net asset value of Fund Shares redeemed                                                    (16,308,309)          (82,202,891)
                                                                                         ---------------       ---------------
Net decrease in net assets from Fund Share transactions                                  $   (9,048,553)       $  (79,246,062)
                                                                                         ---------------       ---------------

Distributions -
 Distributions to Shareholders                                                           $  (16,279,479)       $   (6,607,973)
                                                                                         ---------------       ---------------
Total distributions                                                                      $  (16,279,479)       $   (6,607,973)
                                                                                         ---------------       ---------------

Net (decrease) increase in net assets                                                    $   (1,012,884)       $  276,474,193

Net assets:
 At beginning of period                                                                  $1,522,281,849        $1,245,807,656
                                                                                         ---------------       ---------------
 At end of period                                                                        $1,521,268,965        $1,522,281,849
                                                                                         ===============       ===============
</TABLE>

       See notes to unaudited condensed consolidated financial statements

                                       6
<PAGE>

BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
<CAPTION>
                                                                                              Three Months         Three Months
                                                                                                  Ended                Ended
                                                                                             March 31, 2004       March 31, 2003
                                                                                             ---------------      ---------------
<S>                                                                                           <C>                  <C>
Cash Flows From (For) Operating Activities -
Net increase (decrease) in net assets from operations                                         $  24,315,148        $ (34,955,575)
Adjustments to reconcile net increase (decrease) in net assets from
 operations to net cash flows (for) from operating activities -
  Net investment income allocated from Belvedere Company                                         (3,173,831)          (3,011,072)
  Decrease in escrow deposits                                                                             -              993,440
  Decrease in receivable for investments sold                                                             -            4,952,435
  Increase in interest receivable from other real estate investments                                (43,174)             (24,234)
  Decrease in other assets                                                                           88,779               73,308
  (Increase) decrease in distributions and interest receivable                                     (558,276)             546,855
  Increase (decrease) in interest payable for open swap agreements                                    2,289             (956,538)
  Increase (decrease) in security deposits, accrued interest and accrued
   other expenses and liabilities                                                                    39,983             (115,079)
  Increase in accrued property taxes                                                                214,891              114,810
  Purchases of Partnership Preference Units                                                     (48,668,050)                   -
  Proceeds from sales of Partnership Preference Units                                            50,715,342                    -
  Improvements to rental property                                                                  (328,563)            (403,695)
  Net increase in investment in Belvedere Company                                                         -           (3,500,002)
  Interest incurred on interest rate swap agreements                                             (3,051,795)          (7,108,679)
  (Increase) decrease in short-term investments                                                 (16,694,670)           1,995,811
  Minority interest in net income of controlled subsidiary                                          110,236              172,159
  Net realized (gain) loss from investment transactions                                          (5,198,661)          13,005,126
  Net change in unrealized (appreciation) depreciation of investments                           (10,223,528)          31,073,561
                                                                                             ---------------      ---------------
Net cash flows (for) from operating activities                                                $ (12,453,880)       $   2,852,631
                                                                                             ---------------      ---------------

Cash Flows From (For) Financing Activities -
 Proceeds from (repayment of) Credit Facility                                                 $  21,000,000       $  (10,000,000)
 Payments for Fund Shares redeemed                                                                   (1,758)                (698)
 Distributions paid to Shareholders                                                              (9,019,723)          (3,652,999)
 Distributions paid to minority shareholders                                                        (16,800)                   -
                                                                                             ---------------      ---------------
Net cash flows from (for) financing activities                                                $  11,961,719       $  (13,653,697)
                                                                                             ---------------      ---------------

Net decrease in cash                                                                          $    (492,161)      $  (10,801,066)

Cash at beginning of period                                                                   $   8,687,577       $   16,067,430
                                                                                             ---------------      ---------------
Cash at end of period                                                                         $   8,195,416       $    5,266,364
                                                                                             ===============      ===============
</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       7
<PAGE>

BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)
<TABLE>
<CAPTION>
                                                                                              Three Months         Three Months
                                                                                                  Ended                Ended
                                                                                             March 31, 2004       March 31, 2003
                                                                                             ---------------      ---------------
<S>                                                                                           <C>                  <C>
Supplemental Disclosure and Non-cash Investing and Financing Activities -
 Interest paid on loan - Credit Facility                                                      $   1,627,008        $   2,579,816
 Interest paid on swap agreements                                                             $   3,049,506        $   6,043,609
 Interest paid on mortgage                                                                    $   2,345,531        $   2,345,531
 Market value of securities distributed in payment of redemptions                             $  17,136,551        $   6,903,489
 Partnership Preference Units exchanged for an equity investment in real
  estate companies and an investment in note receivable                                       $           -        $  (3,977,592)
 Market value of an equity investment in real estate companies                                $           -        $   1,907,012
 Investment in note receivable                                                                $           -        $   2,070,580

</TABLE>
       See notes to unaudited condensed consolidated financial statements

                                       8
<PAGE>

BELAIR CAPITAL FUND LLC as of March 31, 2004
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31, 2004
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                            <C>
Net asset value - Beginning of period                                                                          $ 119.600
-----------------------------------------------------------------------------------------------------------------------------------

Income (loss) from operations
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income (6)                                                                                      $   0.699
Net realized and unrealized gain                                                                                   1.201
-----------------------------------------------------------------------------------------------------------------------------------
Total income from operations                                                                                   $   1.900
-----------------------------------------------------------------------------------------------------------------------------------

Distributions
-----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders                                                                                  $  (1.280)
-----------------------------------------------------------------------------------------------------------------------------------
Total distributions                                                                                            $  (1.280)
-----------------------------------------------------------------------------------------------------------------------------------

Net asset value - End of period                                                                                $ 120.220
-----------------------------------------------------------------------------------------------------------------------------------

Total Return (1)                                                                                                    1.60%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                                     As a Percentage           As a Percentage
                                                                                     of Average Net            of Average Gross
Ratios                                                                                  Assets(5)               Assets (2)(5)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                      <C>
Expenses of Consolidated Real Property Subsidiary
 Interest and other borrowing costs (7)                                                  0.52% (9)                0.38% (9)
 Operating expenses (7)                                                                  0.54% (9)                0.40% (9)
Belair Capital Fund LLC Expenses
 Interest and other borrowing costs (4)(8)                                               0.44% (9)                0.32% (9)
 Investment advisory and administrative fees,
  servicing fees and other Fund operating expenses (3)(4)                                1.07% (9)                0.79% (9)
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses                                                                           2.57% (9)                1.89% (9)

Net investment income                                                                    2.33% (9)                1.71% (9)
-----------------------------------------------------------------------------------------------------------------------------------

Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000's omitted)                                                                       $ 1,521,269
Portfolio turnover of Tax-Managed Growth Portfolio (the Portfolio)                                                     0.61%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  Returns are  calculated by determining  the percentage  change in net asset
     value with all distributions reinvested. Total return is not computed on an
     annualized basis.
(2)  Average  Gross Assets is defined as the average  daily amount of all assets
     of Belair  Capital Fund LLC (Belair  Capital) (not including its investment
     in Belair Real Estate Corporation  (Belair Real Estate)) plus all assets of
     Belair  Real  Estate  minus  the sum of their  liabilities  other  than the
     principal amount of money borrowed.  For this purpose, the assets of Belair
     Real  Estate's  controlled  subsidiary  are  reduced  by the  proportionate
     interests therein of investors other than Belair Real Estate.
(3)  Includes  Belair  Capital's  share of Belvedere  Capital Fund Company LLC's
     allocated expenses, including those expenses allocated from the Portfolio.
(4)  Includes  the expenses of Belair  Capital and Belair Real Estate.  Does not
     include  expenses of the real estate  subsidiary  majority-owned  by Belair
     Real Estate.
(5)  For the purpose of  calculating  ratios,  the income and expenses of Belair
     Real  Estate's  controlled  subsidiaries  are reduced by the  proportionate
     interests therein of investors other than Belair Real Estate.
(6)  Calculated using average shares outstanding.
(7)  Includes Belair Real Estate's  proportional  share of expenses  incurred by
     its majority-owned subsidiary.
(8)  Ratios do not include  interest  incurred in  connection  with the interest
     rate swap  agreements.  Had such  amounts  been  included,  ratios would be
     higher.
(9)  Annualized.

       See notes to unaudited condensed consolidated financial statements

                                       9
<PAGE>

BELAIR CAPITAL FUND LLC as of March 31, 2004
Notes To Condensed Consolidated Financial Statements (Unaudited)

1    Basis of Presentation

The condensed  consolidated  interim financial statements of Belair Capital Fund
LLC (Belair  Capital) and its  subsidiaries  (collectively,  the Fund) have been
prepared,  without audit,  in accordance with  accounting  principles  generally
accepted in the United States of America for interim  financial  information and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  certain information and footnote  disclosures normally included in
annual financial  statements  prepared in accordance with accounting  principles
generally  accepted  in the United  States of  America  have been  condensed  or
omitted as permitted by such rules and regulations. All adjustments,  consisting
of normal recurring  adjustments,  have been included.  Management believes that
the disclosures are adequate to present fairly the financial  position,  results
of operations,  cash flows and financial  highlights as of the dates and for the
periods  presented.  It is suggested that these interim financial  statements be
read in conjunction with the financial statements and the notes thereto included
in the Fund's latest annual report on Form 10-K. Results for interim periods are
not necessarily indicative of those to be expected for the full fiscal year.

The balance  sheet at December  31, 2003 has been  derived from the December 31,
2003 audited  financial  statements but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States  of  America  for  complete  financial  statements  as  permitted  by the
instructions to Form 10-Q and Article 10 of Regulation S-X.

Certain  amounts  in  the  prior  period's  condensed   consolidated   financial
statements   have  been   reclassified   to  conform  with  the  current  period
presentation.

2    Investment Transactions

The following table summarizes the Fund's investment  transactions for the three
months ended March 31, 2004 and March 31, 2003:
<TABLE>
<CAPTION>
                                                 Three Months Ended          Three Months Ended
       Investment Transaction                      March 31, 2004              March 31, 2003
------------------------------------------------------------------------------------------------
<S>                                                <C>                         <C>
Increases in investment in Belvedere Company       $          -                $  4,000,000
Decreases in investment in Belvedere Company       $ 17,136,551                $  7,403,487
Purchases of Partnership Preference Units (1)      $ 48,668,050                $          -
Sales of Partnership Preference Units (2)          $ 50,715,342                $          -
------------------------------------------------------------------------------------------------
</TABLE>
(1)  Purchases  of  Partnership  Preference  Units during the three months ended
     March 31, 2004 include  Partnership  Preference  Units purchased from other
     investment  funds  advised  by  Boston   Management  and  Research  (Boston
     Management).
(2)  Sales of Partnership  Preference Units for the three months ended March 31,
     2004 include  Partnership  Preference Units sold to another investment fund
     advised by Boston Management for which a loss of $997,698 was recognized.

During the three  months ended March 31, 2003,  the Fund  exchanged  Partnership
Preference  Units in the amount of  $3,977,592  for an equity  investment in two
private real estate  companies  affiliated with the issuer of such formerly held
Partnership  Preference Units and a note receivable in the amounts of $1,907,012
and $2,070,580,  respectively. The secured note receivable (valued at $2,262,886
as of March 31, 2004 and  $2,094,814 as of March 31, 2003) earns  interest of 8%
per annum and matures in February 2013 or on demand.

                                       10
<PAGE>

3    Indirect Investment in the Portfolio

The following  table  summarizes  the Fund's  investment in  Tax-Managed  Growth
Portfolio (the Portfolio)  through Belvedere Capital Fund Company LLC (Belvedere
Company),  for the  three  months  ended  March 31,  2004 and  March  31,  2003,
including allocations of income,  expenses and net realized and unrealized gains
(losses) for the respective periods then ended:

<TABLE>
<CAPTION>
                                                                              Three Months Ended     Three Months Ended
                                                                                March 31, 2004         March 31, 2003
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                            <C>                    <C>
Belvedere Company's interest in the Portfolio (1)                              $ 11,520,846,141       $  8,400,349,853
The Fund's investment in Belvedere Company (2)                                 $  1,604,097,252       $  1,294,107,014
Income allocated to Belvedere Company from the Portfolio                       $     39,365,471       $     32,398,573
Income allocated to the Fund from Belvedere Company                            $      5,583,965       $      5,013,423
Expenses allocated to Belvedere Company from the Portfolio                     $     12,634,511       $      9,667,954
Expenses allocated to the Fund from Belvedere Company                          $      2,410,134       $      2,002,351
Net realized gain (loss) allocated to Belvedere Company from the
 Portfolio                                                                     $     41,048,575       $    (37,772,155)
Net realized gain (loss) allocated to the Fund from Belvedere Company          $      5,850,913       $     (5,896,539)
Change in unrealized appreciation (depreciation) allocated to Belvedere
 Company from the Portfolio                                                    $    163,577,445       $   (389,828,192)
Change in unrealized appreciation (depreciation) allocated to the Fund
 from Belvedere Company                                                        $     24,013,775       $    (61,019,845)
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  As of March 31, 2004 and 2003, the value of Belvedere Company's interest in
     the Portfolio  represents  63.9% and 61.1% of the  Portfolio's  net assets,
     respectively.
(2)  As of March 31, 2004 and 2003, the Fund's  investment in Belvedere  Company
     represents 13.9% and 15.4% of Belvedere Company's net assets, respectively.

A summary of the  Portfolio's  Statement of Assets and  Liabilities at March 31,
2004,  December  31,  2003 and March 31, 2003 and its  operations  for the three
months  ended March 31, 2004,  for the year ended  December 31, 2003 and for the
three months ended March 2003 follows:

<TABLE>
<CAPTION>
                                        March 31,               December 31,               March 31,
                                          2004                      2003                      2003
                                     --------------------------------------------------------------------
<S>                                 <C>                       <C>                       <C>
Investments, at value               $ 18,003,359,532          $ 17,584,390,762          $13,797,517,752
Other assets                              25,944,066                25,462,745               24,535,362
---------------------------------------------------------------------------------------------------------
Total assets                         $ 18,029,303,598         $ 17,609,853,507          $13,822,053,114
Total liabilities                             254,697                  264,502               73,659,303
---------------------------------------------------------------------------------------------------------
Net assets                           $ 18,029,048,901         $ 17,609,589,005          $13,748,393,811
=========================================================================================================
Dividends and interest               $     62,101,320         $    232,925,912          $    53,431,732
---------------------------------------------------------------------------------------------------------
Investment adviser fee               $     19,348,796         $     67,584,543          $    15,490,999
Other expenses                                598,921                  2,295,653                  477,083
---------------------------------------------------------------------------------------------------------
Total expenses                       $     19,947,717         $     69,880,196          $    15,968,082
---------------------------------------------------------------------------------------------------------
Net investment income                $     42,153,603         $    163,045,716          $    37,463,650
Net realized gain (loss)                   64,894,806               70,909,770              (62,969,970)
Net change in unrealized
 appreciation (depreciation)              261,922,214            3,174,709,110             (649,928,537)
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
 assets from operations              $    368,970,623        $   3,408,664,596          $  (675,434,857)
---------------------------------------------------------------------------------------------------------
</TABLE>

                                       11
<PAGE>

4    Interest Rate Swap Agreements

Belair Capital has entered into interest rate swap agreements with Merrill Lynch
Capital  Services,  Inc. in connection with its real estate  investments and the
associated borrowings. Under such agreements,  Belair Capital has agreed to make
periodic payments at fixed rates in exchange for payments at floating rates. The
notional  or  contractual  amounts  of  these  instruments  may not  necessarily
represent the amounts  potentially subject to risk. The measurement of the risks
associated  with  these  investments  is  meaningful  only  when  considered  in
conjunction with all related assets,  liabilities and agreements.  Interest rate
swap agreements open at March 31, 2004 and December 31, 2003 are listed below.
<TABLE>
<CAPTION>
  Notional                                          Initial                        Unrealized        Unrealized
   Amount                                           Optional          Final       Depreciation      Appreciation
  (000's)         Fixed           Floating         Termination     Termination    At March 31,     At December 31,
  omitted)         Rate             Rate              Date            Date            2004              2003
----------------------------------------------------------------------------------------------------------------------
  <C>             <C>           <C>                   <C>             <C>         <C>                <C>
  $20,000         4.045%        LIBOR + 0.30%          -              6/10        $   (350,722)      $   230,597
   95,952         5.00%         LIBOR + 0.30%         8/04            6/10            (745,551)                -
   95,952         5.05%         LIBOR + 0.30%         2/04            6/10                   -*          218,976
   61,500         4.865%        LIBOR + 0.30%         7/04            6/10            (286,726)          212,857
   75,000         4.795%        LIBOR + 0.30%         9/04            6/10            (420,663)          304,067
   42,000         4.69%         LIBOR + 0.30%         2/05            6/10            (303,822)          201,570
   49,000         4.665%        LIBOR + 0.30%         3/05            6/10            (380,485)          240,892
   35,330         4.18%         LIBOR + 0.30%         7/09            6/10            (741,541)          235,385
----------------------------------------------------------------------------------------------------------------------
                                                                                  $ (3,229,510)      $ 1,644,344
----------------------------------------------------------------------------------------------------------------------
</TABLE>
*    Agreement was terminated on the Initial Optional Termination Date.

5    Debt

Credit Facility - On March 16, 2004, Belair Capital amended its credit agreement
with DrKW Holdings,  Inc. to establish a borrowing limit of  $468,000,000  under
that agreement.  Borrowings under this credit  arrangement  accrue interest at a
rate of one month LIBOR plus 0.30% per annum. As of March 31, 2004,  outstanding
borrowings under this credit arrangements totaled $468,000,000.

6    Segment Information

Belair  Capital  pursues  its  investment   objective   primarily  by  investing
indirectly  in the  Portfolio  through  Belvedere  Company.  The  Portfolio is a
diversified  investment company that emphasizes  investments in common stocks of
domestic and foreign growth  companies that are considered to be high in quality
and  attractive  in their  long-term  investment  prospects.  Separate  from its
investment in Belvedere  Company,  Belair Capital  invests in real estate assets
through its subsidiary,  Belair Real Estate. Belair Real Estate invests directly
and indirectly in Partnership  Preference Units, debt and equity  investments in
private  real  estate  companies  and in  real  property  through  a  controlled
subsidiary, Bel Residential Properties Trust.

Belair Capital evaluates performance of the reportable segments based on the net
increase  (decrease) in net assets from  operations of the  respective  segment,
which  includes net  investment  income  (loss),  net  realized  gain (loss) and
unrealized   appreciation   (depreciation).   The  accounting  policies  of  the
reportable  segments are the same as those for the Fund on a consolidated basis.
No reportable segments have been aggregated.  Reportable  information by segment
is as follows:

                                       12
<PAGE>
<TABLE>
<CAPTION>
                                                            Tax-Managed
For the Three Months Ended                                    Growth               Real
March 31, 2004                                              Portfolio*            Estate                Total
--------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>                   <C>                  <C>
Revenue                                                  $     3,173,831       $  14,034,549        $  17,208,380
Interest expense on mortgage                                           -          (2,386,111)          (2,386,111)
Interest expense on Credit Facility                                    -          (1,570,627)          (1,570,627)
Operating expenses                                              (699,664)         (3,275,833)          (3,975,497)
Minority interest in net income of controlled
 subsidiary                                                            -            (110,236)            (110,236)
--------------------------------------------------------------------------------------------------------------------
Net investment income                                    $     2,474,167       $   6,691,742        $    9,165,909
Net realized gain (loss)                                       5,850,913            (652,252)            5,198,661
Change in unrealized appreciation (depreciation)              24,013,775         (13,790,247)           10,223,528
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from
 operations of reportable segments                       $    32,338,855       $  (7,750,757)       $   24,588,098
--------------------------------------------------------------------------------------------------------------------


                                                            Tax-Managed
For the Three Months Ended                                    Growth               Real
March 31, 2003                                              Portfolio*            Estate                Total
--------------------------------------------------------------------------------------------------------------------
Revenue                                                  $     3,011,072       $  15,240,385        $   18,251,457
Interest expense on mortgage                                           -          (2,386,111)           (2,386,111)
Interest expense on Credit Facility                                    -          (2,472,406)           (2,472,406)
Operating expenses                                              (503,739)         (3,370,259)           (3,873,998)
Minority interest in net income of controlled
 subsidiary                                                           -             (172,159)             (172,159)
--------------------------------------------------------------------------------------------------------------------
Net investment income                                    $     2,507,333       $   6,839,450        $    9,346,783
Net realized loss                                             (5,896,539)         (7,108,587)          (13,005,126)
Change in unrealized appreciation (depreciation)             (61,019,845)         29,946,284           (31,073,561)
--------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in net assets from
 operations of reportable segments                       $   (64,409,051)      $  29,677,147        $  (34,731,904)
--------------------------------------------------------------------------------------------------------------------


                                                            Tax-Managed
                                                              Growth               Real
At March 31, 2004                                           Portfolio*            Estate                Total
--------------------------------------------------------------------------------------------------------------------
Segment assets                                           $ 1,604,097,252       $ 480,708,602        $2,084,805,854
Segment liabilities                                              350,000         548,139,137           548,489,137
--------------------------------------------------------------------------------------------------------------------
Net assets (liabilities) of reportable segments          $ 1,603,747,252       $ (67,430,535)       $1,536,316,717
--------------------------------------------------------------------------------------------------------------------

At December 31, 2003
--------------------------------------------------------------------------------------------------------------------
Segment assets                                           $ 1,588,195,284       $ 487,471,604        $2,075,666,888
Segment liabilities                                            1,180,000         544,629,124           545,809,124
--------------------------------------------------------------------------------------------------------------------
Net assets (liabilities) of reportable segments          $ 1,587,015,284       $ (57,157,520)       $1,529,857,764
--------------------------------------------------------------------------------------------------------------------
</TABLE>
*    Belair Capital invests  indirectly in Tax-Managed  Growth Portfolio through
     Belvedere Company.

The following tables reconcile the reported segment information to the condensed
consolidated financial statements for the periods indicated:
<TABLE>
<CAPTION>
                                                                                   Three Months       Three Months
                                                                                      Ended              Ended
                                                                                  March 31, 2004     March 31, 2003
                                                                                 ----------------   ----------------
<S>                                                                               <C>                 <C>
Revenue:
 Revenue from reportable segments                                                 $   17,208,380      $   18,251,457
 Unallocated amounts:
  Interest earned on cash not invested in the Portfolio or in subsidiaries                52,694              42,797
                                                                                 ----------------   ----------------
Total revenue                                                                     $   17,261,074      $   18,294,254
                                                                                 ----------------   ----------------

                                       13
<PAGE>

Net increase (decrease) in net assets from operations:
 Net increase (decrease) in net assets from operations of reportable segments     $   24,588,098      $  (34,731,904)
 Unallocated amounts:
  Interest earned on cash not invested in the Portfolio or in subsidiaries                52,694              42,797
 Unallocated amounts (1):
  Servicing fees                                                                        (167,543)           (115,814)
  Interest expense on Credit Facility                                                   (100,253)            (76,466)
  Audit, tax and legal fees                                                              (45,101)            (47,931)
  Other operating expenses                                                               (12,747)            (26,257)
                                                                                 ----------------   ----------------
Total net increase (decrease) in net assets from operations                       $   24,315,148      $  (34,955,575)
                                                                                 ----------------   ----------------


                                                                                  March 31, 2004     December 31, 2003
                                                                                 ----------------   -------------------
Net assets:
 Net assets of reportable segments                                                $1,536,316,717      $1,529,857,764
 Unallocated cash (2)                                                                  4,220,025           5,408,305
 Short-term investments (2)                                                           28,460,000          11,765,330
 Loan payable - Credit Facility (3)                                                  (47,626,774)        (24,579,481)
 Other liabilities                                                                      (101,003)           (170,069)
                                                                                 ----------------   -------------------
Total net assets                                                                  $1,521,268,965      $1,522,281,849
                                                                                 ----------------   -------------------
</TABLE>

(1)  Unallocated amounts represent expenses incurred that pertain to the overall
     operation  of  Belair  Capital,  and do not  pertain  to  either  operating
     segment.
(2)  Unallocated  cash  and  short-term  investments  represent  cash  and  cash
     equivalents not currently invested in the Portfolio or real estate assets.
(3)  Unallocated amount of loan payable - Credit Facility  primarily  represents
     borrowings  on hand to be used for  acquiring  investments.  However,  such
     borrowings  have also been used to pay  selling  commissions,  organization
     expenses and other liquidity needs of the Fund.

7    Subsequent Events

On May 3, 2004, Belair Real Estate entered an agreement to establish and acquire
a majority interest in a controlled subsidiary.  This controlled subsidiary will
indirectly  own  certain  industrial  properties  with  an  estimated  value  of
approximately $193,000,000 at acquisition. Belair Real Estate is expected to own
an 80% interest in the controlled subsidiary and a minority shareholder will own
the remaining  interest.  Based on the terms of the current  agreements,  Belair
Real Estate  expects to acquire the investment in the third quarter of 2004. The
minority shareholder of the controlled subsidiary, or an affiliate thereof, will
manage the real property.

It is expected that the real property  will be financed  through first  mortgage
loans secured by the  properties  and an assignment of certain leases and rents.
The loans are expected to be without  recourse to Belair Capital and Belair Real
Estate. No financing agreement has been entered into at this time.

On May 3,  2004,  Belair  Capital  entered  into a  forward  interest  rate swap
agreement  with Merrill  Lynch Capital  Services,  Inc. in  anticipation  of its
future  investment in the  controlled  subsidiary for the purpose of hedging the
interest rate of substantially all of the expected fixed-rate mortgage financing
of the real property over an expected 8-year term. Under such agreement,  Belair
Capital has agreed to made  periodic  payments  at fixed  rates in exchange  for
payments at floating rates. The notional amount of the contract is $104,176,000,
which  approximates  Belair  Capital's  expected 80% interest in the anticipated
secured debt of the  controlled  subsidiary.  The floating  interest  rate to be
received by Belair Capital is  three-month  LIBOR and the fixed interest rate to
be paid by Belair Capital is 4.875%.  The swap agreement  entered into by Belair
Capital is effective in June 2004 and terminates in June 2012.

                                       14
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.
        ------------------------------------------------------------------------

THE INFORMATION IN THIS REPORT CONTAINS  FORWARD-LOOKING  STATEMENTS  WITHIN THE
MEANING OF THE FEDERAL SECURITIES LAWS. FORWARD-LOOKING STATEMENTS TYPICALLY ARE
IDENTIFIED BY USE OF TERMS SUCH AS "MAY," "WILL," "SHOULD,"  "MIGHT,"  "EXPECT,"
"ANTICIPATE,"  "ESTIMATE,"  AND SIMILAR  WORDS,  ALTHOUGH  SOME  FORWARD-LOOKING
STATEMENTS ARE EXPRESSED DIFFERENTLY.  THE ACTUAL RESULTS OF BELAIR CAPITAL FUND
LLC  (THE  FUND)  COULD   DIFFER   MATERIALLY   FROM  THOSE   CONTAINED  IN  THE
FORWARD-LOOKING  STATEMENTS DUE TO A NUMBER OF FACTORS.  THE FUND  UNDERTAKES NO
OBLIGATION  TO UPDATE  PUBLICLY  ANY  FORWARD-LOOKING  STATEMENTS,  WHETHER AS A
RESULT OF NEW INFORMATION,  FUTURE EVENTS,  OR OTHERWISE,  EXCEPT AS REQUIRED BY
APPLICABLE  LAW.  FACTORS  THAT COULD  AFFECT THE FUND'S  PERFORMANCE  INCLUDE A
DECLINE IN THE U.S.  STOCK MARKETS OR IN GENERAL  ECONOMIC  CONDITIONS,  ADVERSE
DEVELOPMENTS  AFFECTING THE REAL ESTATE  INDUSTRY,  OR  FLUCTUATIONS IN INTEREST
RATES.

The following discussion should be read in conjunction with the Fund's unaudited
condensed consolidated financial statements and related notes in Item 1 above.

RESULTS OF  OPERATIONS  FOR THE QUARTER  ENDED  MARCH 31,  2004  COMPARED TO THE
QUARTER ENDED MARCH 31, 2003
--------------------------------------------------------------------------------

(a) RESULTS OF OPERATIONS.
--------------------------

Increases and decreases in the Fund's net asset value per share are derived from
net investment  income or loss, and realized and unrealized  gains and losses on
investments.  The  Fund's  net  investment  income  (or loss) is  determined  by
subtracting  the  Fund's  total  expenses  from its  investment  income and then
deducting the minority  interest in net income of the  controlled  subsidiary of
Belair Real Estate  Corporation  (Belair  Real  Estate).  The Fund's  investment
income includes the net investment  income  allocated to the Fund from Belvedere
Capital Fund Company LLC (Belvedere Company),  rental income from the properties
owned  by  Belair  Real  Estate's  controlled  subsidiary,   partnership  income
allocated  to the  income-producing  preferred  equity  interests in real estate
operating  partnerships  (Partnership  Preference  Units)  owned by Belair  Real
Estate and interest  earned on the Fund's  short-term  investments (if any). The
net  investment  income of  Belvedere  Company  allocated  to the Fund  includes
dividends,  interest and expenses  allocated to Belvedere Company by Tax-Managed
Growth  Portfolio  (the  Portfolio)  less  the  expenses  of  Belvedere  Company
allocated to the Fund. The Fund's total expenses  include the Fund's  investment
advisory  and  administrative   fees,  servicing  fees,  interest  expense  from
mortgages on  properties  owned by Belair Real Estate's  controlled  subsidiary,
interest  expense on the  Fund's  credit  arrangements  (the  Credit  Facility),
property  management  fees,  property  taxes,  insurance,  maintenance and other
expenses  relating to the  properties  owned by Belair Real Estate's  controlled
subsidiary, and other miscellaneous expenses. The Fund's realized and unrealized
gains and  losses  are the  result of  transactions  in, or changes in value of,
security   investments  held  through  the  Fund's  indirect  interest  (through
Belvedere Company) in the Portfolio, real estate investments held through Belair
Real  Estate,  the Fund's  interest  rate swap  agreements  and any other direct
investments of the Fund, as well as periodic  payments made by the Fund pursuant
to interest rate swap agreements.

Realized  and  unrealized   gains  and  losses  on  investments  have  the  most
significant  impact on the Fund's net asset value per Share and result primarily
from sales of such  investments  and  changes  in their  underlying  value.  The
investments of the Portfolio  consist primarily of common stocks of domestic and
foreign  growth  companies  that  are  considered  to be  high  in  quality  and
attractive  in their  long-term  investment  prospects.  Because the  securities
holdings  of the  Portfolio  are broadly  diversified,  the  performance  of the
Portfolio  cannot  be  attributed  to one  particular  stock  or one  particular
industry or market  sector.  The  performance  of the Portfolio and the Fund are
substantially influenced by the overall performance of the U.S. stock market, as
well as by the relative performance versus the overall market of specific stocks
and classes of stocks in which the Portfolio maintains large positions.

PERFORMANCE  OF THE  FUND.(1)  The  Fund's  investment  objective  is to achieve
long-term,  after-tax  returns for  Shareholders.  Eaton Vance Management (Eaton
Vance),  as the Fund's  manager,  measures the Fund's  success in achieving  its
objective  based on the  investment  returns of the Fund,  using the  Standard &
Poor's  500  Composite  Index (the S&P 500) as the  Fund's  primary  performance
benchmark.  The S&P 500 is a broad-based unmanaged index of common stocks widely
used as a measure of U.S. stock market performance.  Eaton Vance's primary focus
in pursuing total return is on the Fund's common stock portfolio, which consists
of its indirect  interest in the Portfolio.  In measuring the performance of the
Fund's real estate  investments  held through  Belair Real  Estate,  Eaton Vance
considers  whether,  through current returns and changes in valuation,  the real









-----------------------------
(1)  Past performance is no guarantee of future results.  Investment  return and
     principal value will fluctuate so that shares, when redeemed,  may be worth
     more  or  less  than  their  original  cost.   Returns  are  calculated  by
     determining the percentage change in net asset value with all distributions
     reinvested.  The Portfolio's total return for the period reflects the total
     return of another fund that invests in the Portfolio,  adjusted for certain
     fund  expenses.  Performance  is for the stated time period only and is not
     annualized; due to market volatility, the Fund's current performance may be
     lower or higher.  The performance of the Fund and the Portfolio is compared
     to that of their  benchmark,  the S&P 500.  It is not  possible  to  invest
     directly in an Index.

                                       15
<PAGE>
estate  investments  achieve returns that over the long-term  exceed the cost of
the  borrowing  incurred  to acquire  such  investments  and thereby add to Fund
returns. The Fund has entered into interest rate swap agreements to fix the cost
of its borrowings under the Credit Facility used to acquire Belair Real Estate's
equity in its real  estate  investments  and to  mitigate  in part the impact of
interest rate changes on the Fund's net asset value.

The Fund's  total return was 1.60% for the quarter  ended March 31,  2004.  This
return reflects an increase in the Fund's net asset value per share from $119.60
to  $120.22  and a  distribution  of $1.28  per share  during  the  period.  For
comparison,  the S&P 500 had a total return of 1.69% over the same  period.  The
performance  of the Fund trailed that of the  Portfolio by  approximately  0.52%
during the period. Last year, the Fund's total return was -2.81% for the quarter
ended March 31, 2003.  This return  reflected a decrease in the Fund's net asset
value per share  from  $92.38 to $89.32  and a  distribution  of $0.49 per share
during the period. For comparison, the S&P 500 had a total return of -3.15% over
the same period.  The  performance of the Fund exceeded that of the Portfolio by
approximately 1.90% during that period.

PERFORMANCE  OF THE  PORTFOLIO.  For the  quarter  ended  March  31,  2004,  the
Portfolio's  total  return was 2.12%,  compared to -4.71% for the quarter  ended
March 31, 2003.  International unrest coupled with weak employment, a struggling
dollar and surging oil prices pressured domestic markets in the first quarter of
2004.  Like the quarter  ended March 31,  2003,  volatility  was high during the
first quarter of 2004. However,  unlike the first quarter of 2003, major indices
experienced  positive returns in 2004 as fiscal and monetary  stimuli  supported
robust corporate earnings and productivity  growth.  During the first quarter of
2004, companies on average reported better than expected sales trends, increased
dividends  and  initiated  sizeable  share  buybacks  reflecting a steady global
economic  recovery.  While  large  capitalization  stocks  outperformed  smaller
capitalization  stocks  during the first quarter of 2003,  small  capitalization
stocks  outperformed  large-cap  companies  during the later months of 2003, and
continued to do so in the first quarter of 2004.  In addition,  during the first
quarter of 2004 higher quality stocks regained performance  leadership over last
year's prevailing higher volatility stocks.

During the quarter  ended March 31,  2004,  the  Portfolio's  sector  allocation
remained  similar to its allocation at March 31, 2003. The Portfolio's  stronger
quarterly  performance  relative to the S&P 500 during the first quarter of 2004
resulted from its  diversified  industry  exposure and positive stock  selection
decisions.  During the quarter  ended March 31,  2004,  the  Portfolio  remained
underweight  in  the  information   technology   sector,  the  market's  weakest
performing sector. Stock selection by the Portfolio's investment adviser, Boston
Management and Research  (Boston  Management),  in the computer  peripherals and
electronic equipment  industries was particularly  beneficial to the Portfolio's
performance  during the first  quarter of 2004.  Similar to the first quarter of
2003, valuation concerns prompted a de-emphasis of the telecommunication  sector
during the first quarter of 2004.  However,  telecommunication  services  stocks
generally  performed well during the first quarter of 2004. Similar to the first
quarter of 2003, the Portfolio was overweight the industrials sector. During the
first  quarter of 2004,  attractive  valuations  and positive  secular  business
trends  helped  machinery,  building  products  and  airfreight  stocks  of  the
aforementioned sector advance higher.

In the first quarter of 2003, Boston Management began increasing the Portfolio's
exposure to the energy  sector,  a change from its previous  underweight  stance
versus  the S&P  500.  This  allocation  shift  has  aided  performance,  as oil
exploration  and other energy  equipment and service names benefited from rising
oil prices.  Although the  Portfolio's  relative  overweight  of the  financials
sector  contributed  to its positive  return  during the quarter ended March 31,
2004, the sub-par  performance of its commercial  bank and capital market stocks
hindered returns during the quarter. While Boston Management remained optimistic
on the consumer,  it slightly trimmed the Portfolio's relative overweight in the
consumer  discretionary  and  staples  sectors.  Portfolio  holdings in leisure,
retail,  and personal products benefited from continued consumer spending driven
by tax refunds, strong refinancing activity and increases in wages and salaries.
The Portfolio maintained an underweight of the healthcare sector relative to the
S&P 500 during the  quarter  ended  March 31,  2004,  but added to  holdings  of
stronger  quarterly   performers  such  as  healthcare   equipment  and  service
companies.

PERFORMANCE OF REAL ESTATE  INVESTMENTS.  The Fund's real estate investments are
held through Belair Real Estate.  As of March 31, 2004, real estate  investments
included  a  portfolio  of  Partnership  Preference  Units  that  generally  are
affiliated  with  publicly  traded and  private  real estate  investment  trusts
(REITs) and a majority  interest in a real estate joint venture (the Real Estate
Joint  Venture).  As of March 31, 2004,  the estimated  fair value of the Fund's
real estate investments represented 22.4% of the Fund's total assets.  Adjusting
for the  minority  interest of the real  estate  operating  company  that is the
principal  minority  investor in the Real Estate  Joint  Venture as of March 31,
2004,  the Fund's real estate  investments  represented  29.3% of the Fund's net
assets.

During the quarter ended March 31, 2004, Belair Real Estate sold (or experienced
scheduled  redemptions  of)  certain  of its  Partnership  Preference  Units for
approximately  $50.7 million (including sales to another investment fund advised
by Boston  Management),  recognizing  gains of $2.4 million on the transactions.

                                       16
<PAGE>
During the quarter  ended  March 31,  2004,  Belair  Real  Estate also  acquired
interests in additional  Partnership  Preference  Units from another  investment
fund advised by Boston Management for approximately $48.7 million.

At March 31, 2004, the estimated fair value of the Fund's Partnership Preference
Units was approximately  $311.4 million compared to approximately $411.4 million
at March 31,  2003, a decrease of $100.0  million or 24%.  While the decrease in
value was principally due to fewer  Partnership  Preference  Units held at March
31, 2004,  the decrease also  reflects the lower per unit values of  Partnership
Preference Units held at March 31, 2004 due to their lower average coupon rates.
In the  current low  interest  rate  environment,  issuers  have been  redeeming
Partnership  Preference Units as Belair Real Estate's call protections expire or
restructuring the terms of outstanding  Partnership  Preference Units in advance
of their  call  dates.  As a  result,  many of the  higher-yielding  Partnership
Preference  Units held by Belair Real Estate  during the quarter ended March 31,
2003 were no longer held at March 31, 2004. Boston Management expects this trend
to continue through 2004.

The  Fund  saw  unrealized  depreciation  of the  estimated  fair  value  in its
Partnership  Preference Units of  approximately  $7.0 million during the quarter
ended  March 31, 2004  compared to  approximately  $24.1  million of  unrealized
appreciation   for  the  quarter  ended  March  31,  2003.  The  net  unrealized
depreciation  in the first  quarter  of 2004  consisted  of  approximately  $3.3
million of unrealized  depreciation  resulting from decreases in per unit values
of the Partnership Preference Units held by Belair Real Estate at March 31, 2004
(as described above) and approximately  $3.7 million of unrealized  depreciation
resulting  from  the   reclassification   of  previously   recorded   unrealized
appreciation  as realized  gains due to sales of  Partnership  Preference  Units
during the quarter  ended  March 31,  2004.  During the quarter  ended March 31,
2003, Belair Real Estate's investments in Partnership Preference Units generally
benefited  from  declining  interest  rate  levels  and  tightening  spreads  in
income-oriented securities, particularly in real estate-related securities.

Distributions from Partnership  Preference Units for the quarter ended March 31,
2004 totaled $8.5 million  compared to $9.7 million for the quarter  ended March
31, 2003, a decrease of $1.2 million or 12%. The decrease was principally due to
fewer Partnership  Preference Units held on average, as well as to lower average
yields for the Partnership  Preference Units held during the quarter ended March
31, 2004.

Like the quarter  ended March 31, 2003,  operations of Belair Real Estate's Real
Estate  Joint  Venture were  impacted by weak  multifamily  market  fundamentals
during  the  quarter  ended  March 31,  2004.  Rental  income  from real  estate
operations  decreased to approximately  $5.5 million for the quarter ended March
31, 2004 from approximately $5.6 million for the quarter ended March 31, 2003, a
decrease  of $0.1  million  or 2%.  This  decrease  in rental  income was due to
reduced  apartment  rental rates and increased  rent  concessions  at properties
owned by Belair Real Estate's Real Estate Joint  Venture,  trends that continued
from 2003.

Property  operating  expenses for Belair Real Estate's Real Estate Joint Venture
were  approximately  $2.5 million for each of the quarters  ended March 31, 2004
and March 31, 2003 (property  operating  expenses are before  certain  operating
expenses  of Belair Real Estate of  approximately  $0.8  million for each of the
quarters  ended March 31, 2004 and March 31, 2003).  The  near-term  outlook for
multifamily property operations continues to be weak. While anticipated economic
and employment  growth is expected to lead to improvements over the longer-term,
significant  employment  growth has not yet  occurred  in most  markets  and low
interest rates have contributed to continued apartment move-outs due to new home
purchases and increased  competition for new residents from ongoing  development
of new  multifamily  properties.  As a result,  Boston  Management,  Belair Real
Estate's  manager,  expects  that real  estate  operating  results  in 2004 will
continue to be similar to 2003's results.

At March 31, 2004, the estimated fair value of the real  properties held through
Belair Real Estate was  approximately  $158.7 million  compared to approximately
$157.1  million at March 31, 2003, an increase of $1.6 million or 1%. The modest
increase in estimated real property values at March 31, 2004 resulted from lower
capitalization  rates,  which more than offset the impact on property  values of
lower near-term income expectations. The Fund saw unrealized depreciation in the
estimated fair value of its other real estate investments (which includes Belair
Real Estate's  interest in the Real Estate Joint Venture) of approximately  $2.0
million during the quarter ended March 31, 2004 compared to  approximately  $0.4
million of unrealized  depreciation for the quarter ended March 31, 2003. During
the  quarter  ended  March 31,  2003,  Belair  Real  Estate  experienced  modest
decreases in property values due to declines in near-term earnings  expectations
and the economic  downturn.  However,  declines in asset values for  multifamily
properties  during the quarter  ended March 31,  2003  generally  were modest as
decreases  in  capitalization   rates  largely  offset  declining  income  level
expectations.

On May 3, 2004,  Belair Real Estate entered into agreements to establish Elkhorn
Property  Trust  (Elkhorn),  form ProLogis Six Rivers  Limited  Partnership  (in
association  with  subsidiaries  of other  investment  funds  advised  by Boston
Management and ProLogis, a publicly-held REIT) (Six Rivers) and merge Six Rivers
with Keystone  Property Trust, a publicly-held  REIT (Keystone).  It is expected

                                       17
<PAGE>

that the merger will be consummated during the third quarter of 2004, subject to
the satisfaction of certain conditions precedent. Upon the ultimate consummation
of the transactions,  Belair Real Estate will own an 80% interest in Elkhorn and
ProLogis  will own a 20%  interest in Elkhorn.  Elkhorn  will own a  partnership
interest in Six Rivers  through which it will own 100% of the economic  interest
in certain industrial  properties  acquired through the merger of Six Rivers and
Keystone and valued at  approximately  $193 million at the date of  acquisition.
Prologis, or an affiliate thereof, will manage the properties. It is anticipated
that Keystone's existing direct fixed-rate obligations will be retired after the
merger date. It is  anticipated  that first mortgage  financing  estimated to be
60-65% of the property value will be obtained in connection with the acquisition
and will be  secured  by the  properties.  There  can be no  assurance  that the
conditions  precedent to the  consummation of the  transactions  described above
will be satisfied or that the financing  required to acquire the properties will
be obtained.

PERFORMANCE  OF INTEREST RATE SWAP  AGREEMENTS.  For the quarter ended March 31,
2004,  net  realized  and  unrealized  losses on the Fund's  interest  rate swap
agreements  totaled  approximately  $7.9  million,  compared to net realized and
unrealized losses of approximately  $0.9 million for the quarter ended March 31,
2003.  Net realized and  unrealized  losses on swap  agreements  for the quarter
ended March 31, 2004 consisted of $4.9 million of unrealized depreciation due to
changes in swap agreement  valuations and $3.0 million of periodic payments made
pursuant to outstanding  swap  agreements (and classified as net realized losses
on  interest  rate swap  agreements).  For the  quarter  ended  March 31,  2003,
unrealized appreciation of $6.2 million on swap agreement valuation changes were
offset by $7.1 million of swap agreement periodic payments.  The negative impact
on Fund  performance  for the quarter  ended March 31, 2004 from changes in swap
agreement  valuations  was  attributable  to a decline in swap rates  during the
period.  The positive  contribution  to Fund  performance  for the quarter ended
March 31, 2003 from changes in swap  valuations  was due primarily to the Fund's
swap agreements  approaching  optional termination dates, as relevant swap rates
were substantially unchanged.

(b) LIQUIDITY AND CAPITAL RESOURCES.
------------------------------------

OUTSTANDING BORROWINGS.  The Fund has entered into credit arrangements with DrKW
Holdings,  Inc. and Merrill Lynch  Mortgage  Capital,  Inc.  (collectively,  the
Credit  Facility)  primarily  to finance  the Fund's  equity in its real  estate
investments and will continue to use the Credit Facility for such purpose in the
future.  The Credit Facility may also be used for other purposes,  including any
short-term liquidity needs of the Fund. In the future, the Fund may increase the
size of the  Credit  Facility  (subject  to lender  consent)  and the  amount of
outstanding  borrowings  thereunder.   As  of  March  31,  2004,  the  Fund  had
outstanding  borrowings of $468.0  million and unused loan  commitments of $98.5
million under the Credit Facility.  During the quarter ended March 31, 2004, the
Fund  amended  its loan  agreement  with DrKW  Holdings,  Inc.  to  establish  a
borrowing limit of $468 million under that agreement.

On May 3, 2004, Belair Real Estate entered an agreement to establish and acquire
a majority  interest  in a Real  Estate  Joint  Venture,  Elkhorn.  Belair  Real
Estate's  acquisition  of its  interest  in Elkhorn is  expected to occur in the
third  quarter  of 2004.  Elkhorn  is  expected  to  indirectly  own  industrial
properties with a value of approximately  $193 million at acquisition.  Belcrest
Realty  will own 80% of the  interests  in  Elkhorn.  The amount of Belair  Real
Estate's  net  investment  in  Elkhorn  will  depend in part on the terms of the
anticipated  mortgage  financing  to be  obtained  for the real  estate  assets,
closing costs and other consideration. The Fund plans to increase its borrowings
under the existing  Credit  Facility to fund its equity in Elkhorn and has begun
discussions with DrKW Holdings, Inc. and Merrill Lynch Mortgage Capital, Inc. in
anticipation of its investment in Elkhorn.

The Fund has entered into interest rate swap agreements with respect to its real
estate investments and associated borrowings.  Pursuant to these agreements, the
Fund makes periodic  payments to the counterparty at predetermined  fixed rates,
in exchange for floating-rate  payments at a predetermined spread plus one-month
LIBOR.  During  the terms of the  outstanding  interest  rate  swap  agreements,
changes in the  underlying  values of the  agreements are recorded as unrealized
appreciation or depreciation.  As of March 31, 2004, the unrealized depreciation
related to the interest rate swap agreements was approximately $3.2 million.  As
of March 31, 2003, the unrealized depreciation related to the interest rate swap
agreements was approximately $15.1 million.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
-------------------------------------------------------------------

INTEREST  RATE RISK.  The Fund's  primary  exposure to interest rate risk arises
from its real estate  investments  that are  financed by the Fund with  floating
rate  borrowings  under the Fund's  Credit  Facility and by  fixed-rate  secured
mortgage  debt  obligations  of  the  Real  Estate  Joint  Venture.  Partnership
Preference Units are fixed rate instruments whose values will generally decrease
when interest  rates rise and increase when  interest  rates fall.  The interest
rates on  borrowings  under the  Fund's  Credit  Facility  are reset at  regular
intervals based on one-month LIBOR. The Fund has entered into interest rate swap

                                       18

<PAGE>

agreements to fix the cost of its borrowings  under the Credit  Facility used to
acquire  Belair  Real  Estate's  equity in its real  estate  investments  and to
mitigate  in part the impact of  interest  rate  changes on the Fund's net asset
value. Under the terms of the interest rate swap agreements, the Fund makes cash
payments at fixed rates in exchange for floating rate  payments  that  fluctuate
with one-month  LIBOR.  The Fund's  interest rate swap agreements will generally
increase in value when  interest  rates rise and decrease in value when interest
rates  fall.  In the  future,  the  Fund may use  other  interest  rate  hedging
arrangements (such as caps, floors and collars) to fix or limit borrowing costs.
The use of interest rate hedging arrangements is a specialized activity that can
expose the Fund to significant loss.

The following table summarizes the contractual  maturities and  weighted-average
interest rates  associated  with the Fund's  significant  non-trading  financial
instruments.  The Fund has no market risk sensitive instruments held for trading
purposes.  This information should be read in conjunction with Note 4 and Note 5
to the Fund's unaudited condensed  consolidated  financial  statements in Item 1
above.

                            Interest Rate Sensitivity
                        Cost, Principal (Notional) Amount
                    by Contractual Maturity and Callable Date
                     for the Twelve Months Ended March 31,*

<TABLE>
<CAPTION>
                                                                                                               Estimated
                                            2005      2006-2008     2009       Thereafter        Total        Fair Value
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>          <C>        <C>          <C>            <C>            <C>
Rate sensitive liabilities:
-----------------------------------------
Long-term debt:
-----------------------------------------
Fixed-rate mortgages                                                          $112,630,517   $112,630,517    $137,700,000
Average interest rate                                                                 8.33%          8.33%
-----------------------------------------
Variable-rate Credit Facility                                                 $468,000,000   $468,000,000    $468,000,000
Average interest rate                                                                 1.39%          1.39%
---------------------------------------------------------------------------------------------------------------------------
Rate sensitive derivative financial instruments:
-----------------------------------------
Pay fixed/ receive variable interest
rate swap agreements                                                          $378,782,000   $378,782,000    $ (3,229,510)
Average pay rate                                                                      4.73%          4.73%
Average receive rate                                                                  1.39%          1.39%
---------------------------------------------------------------------------------------------------------------------------
Rate sensitive investments:
-----------------------------------------
Fixed-rate Partnership Preference
Units:
-----------------------------------------
Cabot Industrial Properties, L.P.,
8.625% Series B Cumulative Redeemable
Preferred Units, Callable 4/29/04,
Current Yield: 8.30%                     $28,455,170                                         $ 28,455,170    $ 27,544,100

Colonial Realty Limited Partnership,
7.25% Series B Cumulative Redeemable
Perpetual Preferred Units, Callable
2/24/09, Current
Yield: 7.39%                                                     $19,013,123                 $ 19,013,123    $ 22,068,000

                                       19
<PAGE>
                                                                                                               Estimated
                                            2005      2006-2008     2009       Thereafter        Total        Fair Value
------------------------------------------------------------------------------------------------------------------------------------

Essex Portfolio, L.P., 9.3% Series D
Cumulative Redeemable Preferred Units,
Callable 7/28/10, Current Yield: 8.90%                                        $ 20,212,880   $ 20,212,880    $ 20,888,480

Kilroy Realty, L.P., 7.45% Series A
Cumulative Redeemable Preferred Units,
Callable 9/30/09,
Current Yield: 7.82%                                                          $ 20,000,000   $ 20,000,000    $ 19,064,520

Liberty Property L.P., 9.25% Series B
Cumulative Redeemable Preferred Units,
Callable 7/28/04, Current Yield: 9.06%   $30,875,000                                         $ 30,875,000    $ 31,529,550

MHC Operating Limited Partnership, 9%
Series D Cumulative Redeemable
Perpetual Preference Units, Callable
9/29/04, Current
Yield: 8.86%                             $50,000,000                                         $ 50,000,000    $ 50,800,000

National Golf Operating Partnership,
L.P., 9.30% Series A Cumulative
Redeemable Preferred Units, Callable
2/6/03, Current Yield: 9.26%             $31,454,184                                         $ 31,454,184    $ 33,161,195

National Golf Operating Partnership,
L.P., 9.30% Series B Cumulative
Redeemable Preferred Units, Callable
2/6/03, Current Yield: 9.26%             $ 5,000,000                                         $  5,000,000    $  5,020,000

PSA Institutional Partners, L.P., 6.4%
Series NN Cumulative Redeemable
Perpetual Preferred Units, Callable
3/17/10, Current Yield: 6.90%                                                 $ 48,250,000   $ 48,250,000    $ 44,737,400

Price Development Company, L.P., 8.95%
Series B Cumulative Redeemable
Preferred Partnership Units, Callable
7/28/04, Current Yield: 8.86%            $30,625,000                                         $ 30,625,000    $ 30,931,250

Urban Shopping Centers, L.P., 9.45%
Series D Cumulative Redeemable
Perpetual Preferred Units, Callable      $25,000,000                                         $ 25,000,000    $ 25,692,700
10/1/04, Current Yield: 9.20%
-----------------------------------------
Note Receivable:
-----------------------------------------

Fixed-rate note receivable, 8%                                                $  2,070,580   $  2,070,580    $  2,262,886
</TABLE>
*    The  investments  listed reflect  holdings as of March 31, 2004. The Fund's
     current holdings may differ.

                                       20
<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES.
---------------------------------

Eaton Vance, as the Fund's manager, conducted an evaluation of the effectiveness
of the Fund's  disclosure  controls and procedures (as defined by Rule 13a-15(e)
of the 1934 Act) as of the end of the period  covered by this  report,  with the
participation of the Fund's Chief Executive Officer and Chief Financial Officer.
Based on that  evaluation,  the Chief  Executive  Officer  and  Chief  Financial
Officer  concluded  that the Fund's  disclosure  controls  and  procedures  were
effective.  There were no changes in the Fund's internal  control over financial
reporting  that  occurred  during the  quarter  ended  March 31,  2004 that have
materially  affected,  or are reasonably likely to materially affect, the Fund's
internal control over financial reporting.

As the Fund's manager, the complete and entire management, control and operation
of the Fund are vested in Eaton Vance.  The Fund's Chief  Executive  Officer and
Chief  Financial  Officer  intend to report to the Board of  Directors  of Eaton
Vance, Inc. (the sole trustee of Eaton Vance) any significant  deficiency in the
design or operation of internal  control over  financial  reporting  which could
adversely  affect the Fund's  ability to record,  process,  summarize and report
financial data, and any fraud, whether or not material, that involves management
or other employees who have a significant  role in the Fund's  internal  control
over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.
---------------------------

Although in the ordinary  course of business,  the Fund,  Belair Real Estate and
Belair  Real  Estate's  controlled  subsidiaries  may become  involved  in legal
proceedings,  the Fund is not aware of any material pending legal proceedings to
which any of them is subject.

ITEM 2.  CHANGES IN  SECURITIES, USE OF PROCEEDS AND ISSUER  PURCHASES OF EQUITY
         SECURITIES.
--------------------------------------------------------------------------------

As  described  in the  Fund's  Annual  Report  on Form  10-K for the year  ended
December 31,  2003,  shares of the Fund may be redeemed by  Shareholders  on any
business day.  Redemptions are met at the net asset value per share of the Fund.
The right to redeem is available to all  Shareholders  and all outstanding  Fund
shares are eligible.  During each month in the quarter ended March 31, 2004, the
total  number of shares  redeemed  and the average  price paid per share were as
follows:

                                  Total No. of Shares    Average Price Paid Per
Month Ended                           Redeemed(1)                Share
--------------------------------------------------------------------------------
January 31, 2004                      25,864.66                 $120.57
--------------------------------------------------------------------------------
February 29, 2004                     49,597.46                 $122.06
--------------------------------------------------------------------------------
March 31, 2004                        59,648.83                 $121.77
--------------------------------------------------------------------------------
Total                                135,110.94                $121.55
--------------------------------------------------------------------------------
(1)  All shares  redeemed  during the  periods  were  redeemed  at the option of
     Shareholders  pursuant to the Fund's  redemption  policy.  The Fund has not
     announced  any plans or programs  to  repurchase  shares  other than at the
     option of Shareholders.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.
-----------------------------------------

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
-------------------------------------------------------------

No matters were submitted to a vote of security  holders during the three months
ended March 31, 2004.

ITEM 5.  OTHER INFORMATION.
---------------------------

None.

                                       21
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K:
------------------------------------------

(a)  The following is a list of all exhibits filed as part of this Form 10-Q:

4.1(a) Amendment  No. 1 dated March 16, 2004 to the Loan and Security  Agreement
       between Belair Capital Fund LLC and DrKW Holdings, Inc.

4.2(a) Amendment  No. 1 dated March 16, 2004 to the Loan and Security  Agreement
       between Belair Capital Fund LLC, Merrill Lynch Mortgage Capital, Inc.,
       the Lenders referred to therein and Merrill Lynch Capital Services, Inc.

21     List of Subsidiaries

31.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted  Pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002

31.2  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted  Pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002

32.1  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted  Pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002

32.2  Certification Pursuant to 18 U.S.C. Section 1350, as Adopted  Pursuant to
      Section 906 of the Sarbanes-Oxley Act of 2002

(b)  Reports on Form 8-K:

     None.

                                       22
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
     amended,  the  registrant  has duly  caused this report to be signed on its
     behalf by the undersigned duly authorized officer on May 10, 2004.




                                       BELAIR CAPITAL FUND LLC



                                       /s/ Michelle A. Alexander
                                       -------------------------
                                       Michelle A. Alexander
                                       Chief Financial Officer
                                       (Duly Authorized Officer and
                                       Principal Financial Officer)

                                       23
<PAGE>

                                  EXHIBIT INDEX
                                  -------------

4.1(a) Amendment  No. 1 dated March 16, 2004 to the Loan and Security  Agreement
       between Belair Capital Fund LLC and DrKW Holdings, Inc.

4.2(a) Amendment  No. 1 dated March 16, 2004 to the Loan and Security  Agreement
       between Belair Capital Fund LLC, Merrill Lynch Mortgage Capital, Inc.,
       the Lenders referred to therein and Merrill Lynch Capital Services, Inc.

21     List of Subsidiaries

31.1   Certification  Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to
       Section 302 of the Sarbanes-Oxley Act of 2002

31.2   Certification Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to
       Section 302 of the Sarbanes-Oxley Act of 2002

32.1   Certification Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to
       Section 906 of the Sarbanes-Oxley Act of 2002

32.2   Certification Pursuant to 18 U.S.C.  Section 1350, as Adopted Pursuant to
       Section 906 of the Sarbanes-Oxley Act of 2002



                                       24