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

                                    FORM 10-Q

                Quarterly report pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                For the quarterly period ended September 30, 2000
                          Commision File No. 0002-25767


                             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  and  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










                                  Page 1 of 27
<PAGE>
                             Belair Capital Fund LLC
                                Index to Form 10Q

PART I - FINANCIAL INFORMATION

                                                                            Page
Item 1.   Consolidated Financial Statements                                    3

          Consolidated  Statements of Assets and
          Liabilities as of September 30, 2000
          (unaudited) and December 31, 1999                                    3

          Consolidated  Statements  of  Operations
          For the Three  Months  Ended September  30,
          2000 and 1999  (unaudited)  for the Nine  Months
          Ended September 30, 2000 and 1999 (unaudited)                        4

          Consolidated  Statements  of Changes in Net Assets
          For the Nine Months Ended September 30, 2000 and
          1999 (unaudited)                                                     6

          Consolidated  Statements  of Cash  Flows  for the
          Nine  Months  Ended September 30, 2000 and 1999
          (unaudited)                                                          7

          Notes to Financial Statements as of September 30, 2000
          (unaudited)                                                          9


Item 2.   Management's  Discussion  and  Analysis  of  Financial
          Condition  and Results of Operations                                19

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          21

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                                                   25

Item 2.   Changes in Securities and Use of Proceeds                           25

Item 3.   Defaults Upon Senior Securities                                     25

Item 4.   Submission of Matters to a Vote of Security Holders                 25

Item 5.   Other Information                                                   25

Item 6.   Exhibits and Reports on Form 8-K                                    25


SIGNATURES                                                                    26

                                       2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------

<TABLE>
 BELAIR CAPITAL FUND LLC
 Consolidated Statements of Assets and Liabilities

                                                                              September 30,
                                                                                  2000              December 31,
                                                                               (Unaudited)              1999
                                                                           -------------------   ------------------
<S>                                                                            <C>                  <C>
 Assets:
     Investment in Belvedere Capital LLC                                       $2,247,172,734       $2,228,073,699
     Investment in real estate partnership preference units                       519,518,264          502,999,255
     Investment in other real estate                                              346,596,989                    -
     Short-term investments                                                         7,135,351                    -
                                                                           -------------------   ------------------
                    Total investments                                          $3,120,423,338       $2,731,072,954
     Cash                                                                          15,193,232            3,802,594
     Receivable for open swap contracts                                            11,605,222           23,158,186
     Prepaid and deferred expenses                                                  7,294,119              338,678
     Escrow deposits - restricted                                                  11,692,254                    -
     Swap interest receivable                                                         461,778               24,814
     Dividends receivable                                                               9,236              608,281
     Other assets                                                                     654,301                    -
                                                                           -------------------   ------------------
             Total Assets                                                      $3,167,333,480       $2,759,005,507
                                                                           -------------------   ------------------
 Liabilities:
    Loan payable                                                                 $710,000,000         $655,000,000
    Mortgage payable                                                              259,790,536                    -
    Minority interest in controlled subsidiaries                                   33,659,403              208,000
    Special distributions payable                                                   3,100,036                    -
    Security deposits                                                               1,101,862                    -
    Payable for Fund shares redeemed                                                1,402,500            1,072,380
    Accrued Expenses
        Interest expense                                                            8,297,191            8,156,260
        Accrued property taxes                                                      2,896,696                    -
        Other liabilities and accrued expenses                                      1,628,681              199,114
                                                                           -------------------   ------------------
             Total Liabilities                                                 $1,021,876,905         $664,635,754
                                                                           -------------------   ------------------
 Net assets                                                                    $2,145,456,575       $2,094,369,753
                                                                           ===================   ==================

 Shareholders' Capital
                                                                           -------------------   ------------------
     Shareholders' capital                                                     $2,145,456,575       $2,094,369,753
                                                                           -------------------   ------------------

                                                                           -------------------   ------------------
Shares Outstanding                                                                 15,110,588           15,900,744
                                                                           -------------------   ------------------

                                                                           -------------------   ------------------
Net Asset Value and Redemption Price Per Share                                        $141.98              $131.72
                                                                           -------------------   ------------------
</TABLE>


                                       3
<PAGE>
<TABLE>
BELAIR CAPITAL FUND LLC
 Consolidated Statements of Operations
 (Unaudited)                                                Three months       Three months       Nine months        Nine months
                                                                ended              ended              ended             ended
                                                            September 30,      September 30,     September 30,      September 30,
                                                                2000               1999               2000              1999
                                                          ------------------ ------------------ -----------------  ----------------
<S>                                                              <C>                <C>              <C>               <C>
 Investment Income:
      Dividends allocated from Belvedere Capital                 $4,561,646         $4,661,462       $14,355,477       $14,020,021
         (net of foreign taxes of $26,473, $148,
          $114,895 and 141,505, respectively)
      Interest allocated from Belvedere Capital                   1,867,157          1,481,654         3,941,550         3,901,182
      Expenses allocated from Belvedere Capital                 (3,379,134)        (3,153,084)      (10,031,422)       (9,516,927)
                                                          ------------------ ------------------ -----------------  ----------------
      Net investment income allocated from
      Belvedere Capital                                          $3,049,669         $2,990,032        $8,265,605        $8,404,276
      Dividends from partnership preference units                 4,432,023         10,757,794        33,617,226        34,413,868
      Interest income on swaps                                      736,216                  -           641,984                 -
      Rental income                                               7,779,044                  -         7,779,044                 -
      Interest                                                      227,045            109,384           434,673           274,954
                                                          ------------------ ------------------ -----------------  ----------------
              Total investment income                           $16,223,997        $13,857,210       $50,738,532       $43,093,098
                                                          ------------------ ------------------ -----------------  ----------------
 Expenses:
     Investment advisor fees                                     $1,950,850         $1,672,556        $5,478,299        $4,847,333
     Property management fees                                       302,112                  -           302,112                 -
     Service fees                                                   212,781            222,936           640,187           692,017
     Interest expense on credit facility                         12,979,682          9,296,362        36,778,445        26,227,265
     Interest expense on mortgages                                3,174,021                  -         3,174,021                 -
     Interest expense on swap contracts                                   -          1,840,990                 -         5,313,558
     Depreciation and amortization                                1,635,182             27,666         1,690,013            66,436
     Property taxes and insurance                                   777,168                  -           777,168                 -
     Property and maintenance expenses                            1,985,385                  -         1,985,385                 -
     Custodian and transfer agent fees                               21,887             17,886           102,026            49,837
     Legal and accounting services                                  387,416            128,007           791,633           554,423
     Printing and postage                                             2,493                419             7,293             5,279
     Miscellaneous                                                 (23,035)             11,562            26,666            13,860
                                                          ------------------ ------------------ -----------------  ----------------
             Total expenses                                     $23,405,942        $13,218,384       $51,753,248       $37,770,008
                                                          ------------------ ------------------ -----------------  ----------------
Net investment income before minority interest
In share of net loss of controlled
subsidiaries                                                   $(7,181,945)                  -      $(1,014,716)                 -
               Minority interest net loss of
                controlled subsidiaries                              42,579                  -            42,579                 -
                                                          ------------------ ------------------ -----------------  ----------------
 Net investment income (loss)                                  $(7,139,366)           $638,826        $(972,137)        $5,323,090
                                                          ------------------ ------------------ -----------------  ----------------


                                       4
<PAGE>
Realized and Unrealized Gain (Loss)
 Net realized gain (loss) -
      Investment transactions from Belvedere                  $(18,424,329)         $2,783,853       $29,873,588        $9,177,648
      Capital
      Investment transactions in partnership                   (15,231,759)        (8,937,720)      (18,177,972)      (17,179,148)
      preference units
      Termination of interest rate swap contracts                 2,241,000                  -         2,241,000                 -
                                                          ------------------ ------------------ -----------------  ----------------
              Net realized gain (loss)                        $(31,415,088)       $(6,153,867)       $13,936,616      $(8,001,500)
                                                          ------------------ ------------------ -----------------  ----------------
 Change in unrealized appreciation
 (depreciation) -
      Investment in Belvedere Capital                           $42,372,981     $(169,040,091)     $ 102,843,747      $(8,061,449)
      Investments in partnership preference units                62,495,119        (2,940,299)        61,127,867      (16,703,277)
      Interest rate swap contracts                             (12,077,601)        (1,316,821)      (11,552,964)        26,779,122
                                                          ------------------ ------------------ -----------------  ----------------
     Net change in unrealized
             appreciation/(depreciation)                        $92,790,499     $(173,297,211)      $152,418,650        $2,014,396
                                                          ------------------ ------------------ -----------------  ----------------
      Net realized and unrealized gain (loss)                   $61,375,411     $(179,451,078)     $ 166,355,266      $(5,987,104)
                                                          ------------------ ------------------ -----------------  ----------------
      Net increase (decrease) in net assets from
                      operations                                $54,236,045     $(178,812,252)      $165,383,129        $(664,014)
                                                          ================== ================== =================  ================
</TABLE>


                                       5
<PAGE>
<TABLE>
BELAIR CAPITAL FUND LLC
Consolidated Statements of Changes in Net Assets   (Unaudited)
                                                                              Nine Months         Nine Months
                                                                                 ended               Ended
                                                                              September 30,      September 30,
                                                                                 2000                1999
                                                                          -------------------  ------------------
<S>                                                                             <C>                  <C>
 Increase (Decrease) in Net Assets:
     Net investment income (loss)                                                 $(972,137)          $5,323,090
     Net realized gain (loss) on investment transactions                          13,936,616         (8,001,500)
     Net change in unrealized appreciation (depreciation) of
      investments                                                                152,418,650           2,014,396
                                                                          -------------------  ------------------
             Net increase (decrease) in net assets from
            operations                                                          $165,383,129          $(664,014)
                                                                          -------------------  ------------------

 Transactions in Fund shares -
     Net asset value of shares redeemed                                       $(107,183,581)       $(62,997,811)
                                                                          -------------------  ------------------
    Net decrease in net assets from Fund share transactions                   $(107,183,581)       $(62,997,811)
                                                                          -------------------  ------------------

Distributions to shareholders -
   Special distributions to Shareholders                                        $(7,112,726)                  -
                                                                          -------------------  ------------------
                  Total distributions                                           $(7,112,726)                  -
                                                                          -------------------  ------------------

 Net increase (decrease) in net assets                                           $51,086,822       $(63,661,825)

 Net assets:
    Beginning of period                                                        2,094,369,753       1,932,848,372
                                                                          -------------------  ------------------
     End of period                                                            $2,145,456,575   $1,869,186,547
                                                                          ===================  ==================
</TABLE>


                                       6
<PAGE>
<TABLE>
BELAIR CAPITAL FUND LLC
Consolidated Statements of Cash Flows (Unaudited)
                                                                                      Nine months         Nine months
                                                                                         Ended               Ended
                                                                                     September 30,       September 30,
                                                                                         2000                1999
                                                                                   ------------------  ------------------
<S>                                                                                     <C>                 <C>
Cash flows from (for) Operating Activities -
Net investment income(loss)                                                              $ (972,137)        $  5,323,090
Adjustments to reconcile net investment income to net
cash flows used for operating activity -
       Amortization of organization and other deferred expenses                           1,690,022               66,436
       Net investment income allocated from Belvedere Capital                            (8,265,605)         (8,404,276)
       Payment of organization and offering expenses                                               -           (443,560)
       (Increase) decrease in dividends receivable                                           599,045         (5,094,955)
       Increase in interest receivable for open swap contracts                             (436,964)                   -
       Increase in interest payable for open swap contracts                                        -             475,260
       Increase in deferred expenses                                                     (1,902,659)                   -
       Increase in prepaid expenses                                                        (121,758)                   -
       Decrease in escrow deposits                                                            87,691            (12,139)
       Decrease in other assets                                                              487,328                   -
       Increase in accrued property taxes                                                  1,203,892                   -
       Increase (decrease) in accrued interest and operating expenses                      (726,900)             101,646
       Purchases of partnership preference units                                       (101,895,368)       (409,000,000)
       Payments for investments in other real property                                  (66,714,705)                   -
       Improvements to real estate                                                       (1,030,729)
       Sales of partnership preference units                                             128,326,254         358,486,052
       Gain on terminated swaps                                                            2,241,000                   -
       Net decrease in investment in Belvedere Capital                                    45,494,018          43,557,536
       Minority interest in share of net investment loss of                                                            -
               controlled subsidiaries                                                        42,579                   -
       Increase in short-term investments                                                (7,135,351)                   -
                                                                                   --------------------------------------
       Net cash flows used for operating activities                                     $(9,030,347)      $ (14,944,910)
Cash Flows for Financing Activities -
       Proceeds from loan                                                                $55,000,000        $ 62,000,000
       Payments for Fund shares redeemed                                                (30,566,325)        (23,852,610)
       Special distributions paid                                                        (4,012,690)                   -
                                                                                   --------------------------------------
       Net cash flows from financing activities                                    $    20,420,985          $ 38,147,390

Net increase in cash                                                                      11,390,638          23,202,480

Cash at beginning of period                                                                3,802,594           2,711,580
                                                                                   ------------------  ------------------
Cash at end of period                                                                   $ 15,193,232        $ 25,914,060
                                                                                   ==================  ==================


                                       7
<PAGE>
Supplemental Disclosure and Non-cash Investing and
Financing Activities-
       Unrealized appreciation of investments and open swap contracts                  $ 658,953,731       $ 215,374,591
       Interest paid for loan                                                           $ 38,221,787       $  25,947,174
       Interest received (paid) for swap contracts                                       $   205,020       $ (4,838,298)
       Interest paid for mortgages                                                        $1,589,748                   -
       Market value of securities distributed in payment of redemptions                 $ 76,287,136       $  39,145,201
       Market value of real property and other assets, net of current
          liabilities, contributed to Bel Residential                                   $359,843,727                   -
       Mortgage assumed in connection with acquisition of real property                $ 259,790,536                   -
</TABLE>




                                        8
<PAGE>
BELAIR CAPITAL FUND LLC as of September 30, 2000
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS  (UNAUDITED)

1 Organization

A  Investment   Objective--Belair   Capital  Fund  LLC  (Belair  Capital)  is  a
Massachusetts limited liability company established to offer diversification and
tax-sensitive  investment  management to persons holding large and  concentrated
positions  in equity  securities  of  selected  publicly-traded  companies.  The
investment  objective  of Belair  Capital  is to  achieve  long-term,  after-tax
returns for  shareholders.  Belair Capital  pursues this objective  primarily by
investing  indirectly  in  Tax-Managed  Growth  Portfolio  (the  Portfolio),   a
diversified,   open-end  management  investment  company  registered  under  the
Investment  Company Act of 1940,  as amended.  The  Portfolio  is organized as a
trust  under the laws of the state of New York.  Belair  Capital  maintains  its
investment in the  Portfolio by investing in Belvedere  Capital Fund Company LLC
(Belvedere  Capital),  a separate  Massachusetts  limited liability company that
invests  exclusively  in the  Portfolio.  The  performance of Belair Capital and
Belvedere Capital are directly and substantially  affected by the performance of
the Portfolio.  Separate from its investment in the Portfolio  through Belvedere
Capital, Belair Capital invests in real estate assets including income-producing
preferred equity interests in real estate  operating  partnerships  (partnership
preference units) affiliated with  publicly-traded real estate investment trusts
(REITs) and interests in controlled real property subsidiaries.

B  Subsidiaries--Belair  Capital  invests in real estate  through its subsidiary
Belair Real Estate  Corporation  (BREC).  BREC invests  directly in  partnership
preference   units  and   indirectly   in  real  property   through   controlled
subsidiaries,  Bel  Residential  Properties  Trust  (Bel  Residential)  and  Bel
Alliance Communities, LLC (Bel Communities).

BREC - BREC  invests  directly in  partnership  preference  units and also holds
majority  interests in Bel  Residential  and Bel  Communities.  At September 30,
2000,  Belair  Capital owned 100% of the common stock issued by BREC and intends
to hold all of BREC's common stock at all times.  Approximately  105  charitable
organizations  own preferred stock of BREC which has been recorded as a minority
interest on the Statement of Assets and  Liabilities.  The preferred stock has a
par value of $.01 per share and is redeemable  by BREC at a redemption  price of
$100 after the  occurrence  of certain tax events or after  December  31,  2004.
Dividends on the preferred stock are cumulative and payable  annually in arrears
in December in an amount equal to $8 per share per annum.

Bel  Residential-  Bel  Residential,   a  majority  owned  subsidiary  of  BREC,
indirectly owns eleven multi-family  residential properties  (collectively,  the
Bel Residential  properties) located in seven states (Texas,  Arizona,  Georgia,
North Carolina,  Washington,  Colorado and Florida).  BREC owns Class A units of
Bel Residential,  representing a 75% equity interest in Bel  Residential,  and a
minority  shareholder (the Bel Residential  minority  shareholder)  owns Class B
units,  representing  a 25%  equity  interest  in Bel  Residential.  The  equity
interest of the Bel Residential  minority  shareholder is recorded as a minority
interest on the  Statement of Assets and  Liabilities.  The primary  distinction
between  the two  classes  of shares is the  distribution  priority  and  voting
rights.  BREC has priority in  distributions  and has greater voting rights than
the holder of Class B units.


                                       9
<PAGE>
Bel  Communities  --- Bel  Communities,  a majority  owned  subsidiary  of BREC,
indirectly owns twenty multi-family  residential properties  (collectively,  the
Bel  Communities  properties)  located in eight states ( North  Carolina,  South
Carolina,  Texas,  Virginia,  Nevada,  Tennessee,  Florida  and  Georgia).  BREC
indirectly owns 100% of the Class A units of Bel  Communities,  representing 60%
of the equity interests in Bel Communities,  and a minority shareholder (the Bel
Communities minority  shareholder) owns 100% of the Class B units,  representing
40% of the equity interests in Bel  Communities.  The Class B equity interest is
recorded as a minority interest on the Statement of Assets and Liabilities.  The
primary  distinction  between  the two  classes  of shares  is the  distribution
priority and voting rights.  BREC has priority in distributions  and has greater
voting rights than the holders of the Class B units.

The  accompanying  consolidated  financial  statements  include the  accounts of
Belair Capital,  BREC, Bel Residential  and Bel Communities  (collectively,  the
Fund). All material intercompany accounts and transactions have been eliminated.

2  Significant  Accounting  Policies The  following is a summary of  significant
accounting policies  consistently followed by the Fund in the preparation of its
financial  statements.  The policies are in conformity  with generally  accepted
accounting principles.

A  Investment   Costs--The   Fund's  investment  assets  were  acquired  through
contributions  of common stock by  shareholders in exchange for Shares of Belair
Capital,  in private  purchases  of  partnership  preference  units and  through
contributions of real estate  investments in exchange for minority  interests in
controlled  subsidiaries.  Upon receipt of common stock from shareholders Belair
Capital immediately exchanged the contributed  securities into Belvedere Capital
for shares  thereof,  and Belvedere  Capital,  in turn,  immediately  thereafter
exchanged the  contributed  securities into the Portfolio for an interest in the
Portfolio.  The cost at which the Fund's investments of contributed common stock
are  carried on the books and in the  financial  statements  is the value of the
contributed  common  stock as of the close of business on the day prior to their
contribution to the Fund. The initial tax basis of the Fund's  investment in the
Portfolio   through   Belvedere   Capital  is  the  same  as  the   contributing
shareholders'  basis in securities and cash contributed to the Fund. The initial
tax and  financial  reporting  basis of securities  and real estate  investments
purchased  by the Fund is the purchase  cost.  The initial  financial  reporting
basis of real estate investments  contributed to the Fund is the market value of
the  investments  on  contribution  date.  The  initial tax basis of real estate
investments  contributed to the Fund is the  contributor's tax basis at the time
of  contribution  or  value  at  the  time  of  contribution,  depending  on the
taxability of the contribution.

B  Investment   Valuations--The   Fund's  investments   consist  of  partnership
preference units, other real property  investments,  shares of Belvedere Capital
and  short-term  debt  securities.  Belvedere  Capital's  only  investment is an
interest in the  Portfolio,  the value of which is derived  from a  proportional
interest  therein.  Additionally,  the Fund has entered into  interest rate swap
contracts  (see Note 8). The valuation  policy  followed by the Fund,  Belvedere
Capital  and the  Portfolio  for all  assets,  other than real  property,  is as
follows:

Marketable  securities,  including  options,  that are listed on foreign or U.S.
securities  exchanges  or in the  NASDAQ  National  Market  System are valued at
closing  sale  prices on the  exchange  where such  securities  are  principally
traded.  Futures  positions on securities or currencies are generally  valued at


                                       10
<PAGE>
closing settlement prices.  Unlisted or listed securities for which closing sale
prices are not available are valued at the mean between the latest bid and asked
prices.  Short-term debt securities with a remaining maturity of 60 days or less
are valued at amortized cost, which  approximates  value. Other fixed income and
debt  securities,  including  listed  securities  and securities for which price
quotations  are  available,  are  normally  valued  on the  basis of  valuations
furnished by a pricing  service.  Investments  held by the  Portfolio  for which
valuations or market  quotations are  unavailable are valued at fair value using
methods  determined  in  good  faith  by or at the  direction  of the  Trustees.
Interest  rate swap  contracts  are valued by obtaining  dealer or  counterparty
quotes.

The value of the Fund's real estate assets is determined in good faith by Boston
Management  and Research,  as Manager of BREC,  taking into account all relevant
factors,  data and  information,  including,  with  respect  to  investments  in
partnership  preference  units,  information from dealers and similar firms with
knowledge  of  such  issues  and  the  prices  of  comparable  preferred  equity
securities  and  other  fixed or  adjustable  rate  instruments  having  similar
investment  characteristics.  Real  estate  investments  other than  partnership
preference  units are  generally  stated at estimated  market  values based upon
independent  valuations.  Detailed  investment  valuations,  which  include  the
discounted  cash flow method of appraisal,  are performed  annually and reviewed
periodically  and  adjusted if there has been a  significant  change in economic
circumstances since the previous  valuation.  The discounted cash flow method of
appraisal projects future cash inflows and outflows,  and presumes a sales price
at the end of a holding  period.  Such amounts are  discounted at an appropriate
rate of return that a prudent buyer would currently require to purchase the real
estate assets. The valuation of investments  assumes the orderly  disposition of
all assets.

C Escrow  Accounts--The  escrow  accounts  related  to Bel  Residential  and Bel
Communities consist of deposits for real estate taxes, insurance, environmental,
renovation,  reserve for  replacements  and capital  repairs  required under the
mortgage agreement, debt service, and security deposit accounts. Bel Residential
and Bel Communities have no access to these funds once deposited into the escrow
accounts.  Amounts are held by the financial  institution  and controlled by the
lender (Note 9).

D Interest Rate  Swaps--The  Fund has entered into interest rate swap agreements
with  respect  to its  borrowings  and  investments  in  fixed-rate  partnership
preference  units.  Pursuant  to  these  agreements,  the Fund  makes  quarterly
payments to the  counterparty  at  predetermined  fixed  rates,  in exchange for
floating-rate  payments  from the  counterparty  at a  predetermined  spread  to
three-month  LIBOR, based on notional values  approximately  equal to the Fund's
acquisition cost for the fixed-rate  partnership  preference  units.  During the
terms of the outstanding  swap agreements,  changes in the underlying  values of
the swaps are  recorded as  unrealized  gains or losses.  The Fund is exposed to
credit loss in the event of non-performance by the swap counterparty.

E  Written   Options--The   Portfolio   and  the  Fund  may  write   listed  and
over-the-counter call options on individual securities, on baskets of securities
and on stock market indices.  Upon the writing of a call option, an amount equal
to the premium received by the Portfolio or Fund is included in the Statement of
Assets and Liabilities of the respective  entity, as a liability.  The amount of
the liability is subsequently  marked-to-market  to reflect the current value of
the  option  written  in  accordance  with  the  investment  valuation  policies
discussed above.  Premiums received from writing options that expire are treated
as realized gains.  Premiums received from writing options that are exercised or
are closed are added to or offset  against  the  proceeds  or amount paid on the


                                       11
<PAGE>
transaction  to determine the realized gain or loss.  The Portfolio or Fund as a
writer of an option may have no control over whether the  underlying  securities
may be sold and as a result  bears the market risk of an  unfavorable  change in
the price of the securities underlying the written option.

F Purchased  Options--Upon the purchase of a put option, the premium paid by the
Portfolio or Fund is included in the Statement of Assets and  Liabilities of the
respective entity as an investment. The amount of the investment is subsequently
marked-to-market to reflect the current market value of the option purchased, in
accordance with the investment  valuation policies discussed above. If an option
which the Portfolio or Fund has purchased  expires on the stipulated  expiration
date, the Portfolio or Fund will realize a loss in the amount of the cost of the
option.  If the  Portfolio or Fund enters into a closing sale  transaction,  the
Portfolio  or Fund will  realize a gain or loss,  depending on whether the sales
proceeds from the closing sale  transaction are greater or less than the cost of
the option.  If the Portfolio or Fund exercises a put option,  it will realize a
gain or loss from the sale of the underlying security and the proceeds from such
sale will be decreased by the premium originally paid.

G Rental Operations-- The apartment units held indirectly by Bel Residential are
leased to residents  generally for a term of one year  renewable upon consent of
both parties on a year-to-year or month-to-month basis. The apartment units held
indirectly by Bel  Communities  are leased to residents for terms of one year or
less, with monthly payments due in advance.

H  Income--Dividend  income is recorded on the ex-dividend date and interest and
rental income are recorded on the accrual basis.

Belvedere  Capital's  net  investment  income  or  loss  consists  of  Belvedere
Capital's pro-rata share of the net investment income of the Portfolio, less all
actual or accrued expenses of Belvedere  Capital,  determined in accordance with
generally accepted  accounting  principles.  The Fund's net investment income or
loss  consists  of the Fund's  pro-rata  share of the net  investment  income of
Belvedere Capital,  plus all income earned on the Fund's investments  (including
partnership  preference  units and other  real  property),  less all  actual and
accrued  expenses of the Fund determined in accordance  with generally  accepted
accounting principles.

I  Rental   Property  and   Depreciation--Costs   incurred  in  connection  with
acquisitions of properties have been  capitalized.  Significant  betterments and
improvements  are  capitalized  as  part  of  the  building  and   improvements.
Depreciation  of the buildings and  improvements  is computed using the straight
line and  accelerated  methods  over the  estimated  useful lives of the related
assets,  which  range up to 30  years  for  buildings  and up to ten  years  for
building and land  improvements and up to ten years for furniture,  fixtures and
equipment.

J  Organization  Costs  and  Deferred  Expenses--Costs  incurred  by the Fund in
connection with its  organization  are being amortized on a straight-line  basis
over  five  years.  Costs  incurred  in  connection  with BREC are  expensed  as
incurred.  Deferred  costs of Bel  Residential  and Bel  Communities  consist of
deferred mortgage origination expenses which are amortized over the terms of the
loan.

K Income Taxes--Belair Capital,  Belvedere Capital and the Portfolio are treated
as partnerships  for federal income tax purposes.  As a result,  Belair Capital,
Belvedere  Capital and the Portfolio do not incur federal  income tax liability,


                                       12
<PAGE>
and the shareholders and partners thereof are individually responsible for taxes
on items of partnership income,  gain, loss, and deduction.  The policy of BREC,
Bel Residential and Bel Communities is to comply with the Internal  Revenue Code
applicable to REITs.  BREC, Bel Residential  and Bel Communities  will generally
not be subject to federal  income tax to the extent that they  distribute  their
earnings to their  stockholders each year and maintain their  qualification as a
REIT.

L Other--Investment transactions are accounted for on a trade date basis.

M Use of Estimates--The  preparation of financial  statements in conformity with
generally accepted  accounting  principles requires management to make estimates
and  assumptions  that affect the reported  amounts of assets and liabilities at
the date of the  financial  statements  and the  reported  amounts of income and
expense  during the  reporting  period.  Actual  results could differ from those
estimates.

N Interim Financial  Statements--The  interim financial  statements  relating to
September  30, 2000 and for the nine months then ended have not been  audited by
independent  certified  public  accountants,  but in the  opinion  of the Fund's
management,  reflect  all  adjustments,  consisting  only  of  normal  recurring
adjustments, necessary for the fair presentation of the financial statements.

3 Distributions to Shareholders

The Fund intends to distribute  each year all of its net  investment  income for
the year, if any, and  approximately  22% of its net realized  capital gains for
such year, if any, other than  precontribution  gains allocated to a shareholder
in connection  with a tender offer or other  extraordinary  corporate event with
respect to a security contributed by such shareholder, for which no capital gain
distribution  is made.  In  addition,  whenever a  distribution  in respect to a
precontribution  gain  is  made,  the  Fund  makes  a  special  distribution  to
compensate  shareholders  receiving such distributions for taxes that may be due
in connection  with the  precontribution  gain and  supplemental  distributions.
Special  distributions  accrued for or paid during the nine month  period  ended
September 30, 2000 totaled $7,112,726.

4 Shareholder Transactions

The  Fund  may  issue  an  unlimited  number  of  full  and  fractional  shares.
Transactions in Fund shares were as follows:

                                        Nine Months Ended    Nine Months Ended
                                          September 30,        September 30,
                                              2000                 1999
                                       -------------------- --------------------
  Redemptions                               (790,156)                 (515,352)
                                       -------------------- --------------------
  Net decrease                              (790,156)                 (515,352)
                                       -------------------- --------------------

Redemptions  of shares  held less than three  years are  generally  subject to a
redemption fee of 1% of the net asset value of shares  redeemed.  The redemption
fee is paid to Eaton Vance Distributors, Inc. (EVD) by the Fund on behalf of the


                                       13
<PAGE>
redeeming  shareholder.  No charge is levied on redemptions  of shares  acquired
through the reinvestment of distributions,  shares redeemed in connection with a
tender  offer  or  other  extraordinary   corporate  event  with  respect  to  a
contributed  security  or  shares  redeemed  following  the  death of all of the
initial  holders  of  the  shares  redeemed.  In  addition,  no fee  applies  to
redemptions by shareholders,  who, during any 12-month period, redeems less than
8% of the total number of shares held by the  shareholder as of the beginning of
the 12-month period.  For the nine months ended September 30, 2000 and September
30, 1999, EVD received $778,730 and $360,657, respectively, in redemption fees.

5 Investment Transactions

Increases  and decreases of the Fund's  investment in Belvedere  Capital for the
nine months ended September 30, 2000 aggregated  $126,179,202  and  $248,063,107
respectively,  and for the nine  months  ended  September  30,  1999  aggregated
$21,680,018 and $104,382,755,  respectively.  Purchases and sales of partnership
preference  units  aggregated  $101,895,368 and $128,326,254 for the nine months
ended September 30, 2000, and  $409,000,000 and $358,486,052 for the nine months
ended  September  30,  1999.  For the nine  months  ended  September  30,  2000,
acquisitions  of other  real  property,  through  purchases  and  contributions,
totaled  $346,847,008.  There were no  acquisitions  of real property other than
partnership preference units for the nine months ended September 30, 1999.

Purchases  and sales of  partnership  preference  units  during the period ended
September 30, 2000 and sales of partnership  preference  units during the period
ended September 30, 1999 include amounts  purchased from and sold to other funds
sponsored by Eaton Vance Management.

6 Indirect Investment in Portfolio

Belvedere  Capital's  interest  in the  Portfolio  at  September  30,  2000  was
$9,826,270,245,  representing  53.8%  of  the  Portfolio's  net  assets,  and at
September 30, 1999 was  $6,567,348,215,  representing  51.5% of the  Portfolio's
assets.  The Fund's  investment  in Belvedere  Capital at September 30, 2000 was
$2,247,172,734,  representing  22.9% of Belvedere  Capital's net assets,  and at
September 30, 1999 was $1,931,317,944, representing 29.4% of Belvedere Capital's
net assets.  Investment income allocated to Belvedere Capital from the Portfolio
for the nine months  ended  September  30, 2000  totaled  $70,963,408,  of which
$18,297,027 was allocated to the Fund.  Investment income allocated to Belvedere
Capital from the Portfolio for the nine months ended  September 30, 1999 totaled
$43,288,145,  of which $17,921,203 was allocated to the Fund. Expenses allocated
to Belvedere  Capital from the Portfolio for the nine months ended September 30,
2000  totaled  $28,888,244,  of which  $7,467,956  was  allocated  to the  Fund.
Expenses  allocated to Belvedere  Capital from the Portfolio for the nine months
ended September 30, 1999 totaled $16,940,614,  of which $7,116,523 was allocated
to the Fund.  Belvedere  Capital  allocated  additional  expenses to the Fund of
$2,563,466 for the nine months ended September 30, 2000, representing $71,506 of
operating  expenses and $2,491,960 of service fees.  Belvedere Capital allocated
additional  expenses  to the  Fund of  $2,400,404  for  the  nine  months  ended
September 30, 1999,  representing  $103,753 of operating expenses and $2,296,651
of service fees (see Note 10).

A summary of the Portfolio's  Statement of Assets and Liabilities,  at September
30, 2000,  December 31, 1999 and September 30, 1999 and its  operations  for the
nine months ended  September 30, 2000,  the year ended December 31, 1999 and the
nine months ended September 30, 1999 follows:


                                       14
<PAGE>
<TABLE>
                                       September 30,          December 31,           September 30,
                                           2000                   1999                    1999
                                    -------------------- ------------------------ ---------------------
<S>                                     <C>                      <C>                   <C>
Investments, at value                   $18,195,602,562          $15,009,514,121       $12,750,511,786
Other Assets                                279,625,633              105,404,490            11,587,842
----------------------------------- -------------------- ------------------------ ---------------------
Total Assets                            $18,475,228,195          $15,114,918,611       $12,762,099,628
Total Liabilities                           215,812,049                  269,652               174,903
----------------------------------- -------------------- ------------------------ ---------------------
Net Assets                              $18,259,416,146          $15,114,648,959       $12,761,924,725
=================================== ==================== ======================== =====================
Dividends and interest                     $135,806,873             $135,795,086           $94,362,172
Investment adviser fee                       53,698,628               51,368,943            36,125,499
Other expenses                                1,603,375                1,599,875             1,022,728
----------------------------------- -------------------- ------------------------ ---------------------
Total expenses                              $55,302,003              $52,968,818           $37,148,227
----------------------------------- -------------------- ------------------------ ---------------------
Net investment income                       $80,504,870              $82,826,268           $57,213,945
Net realized gains                          203,183,788               19,281,587            46,838,127
Net unrealized gains (losses)               787,635,595            1,954,982,313         (205,241,641)
----------------------------------- -------------------- ------------------------ ---------------------
Net increase (decrease) in net
assets from operations                   $1,071,324,253           $2,057,090,168        $(101,189,569)
----------------------------------- -------------------- ------------------------ ---------------------
</TABLE>

7 Rental Property

The average occupancy rate for real property held by Bel Residential, consisting
of 2,681  residential  units, was  approximately  96% at September 30, 2000. The
average occupancy rate for real property held by Bel Communities,  consisting of
5,014  residential  units,  was  approximately  92% at September  30, 2000.  The
carrying  value of real property owned by the Fund through Bel  Residential  and
Bel Communites at September 30, 2000 is as follows:

Land                                                               $ 62,047,686
Buildings, improvements and other depreciable assets                294,024,475
Accumulated depreciation                                             (9,475,172)
                                                                   -------------
Carrying value                                                     $346,596,989
                                                                   -------------
                                                                   -------------

8 Cancelable Interest Rate Swap Agreements

The Fund may enter into  cancelable  interest rate swap agreements in connection
with  its  investments  in  partnership  preference  units  and  the  associated
borrowings. Under such agreements, the Fund 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.  As of September 30, 2000, the
Fund has entered into  cancelable  interest  rate swap  agreements  with Merrill
Lynch  Capital  Services,  Inc.  (MLCS) with  respect to each of its holdings of
partnership  preference  units and the associated  borrowings.  The Fund has the
right to terminate the interest rate swap agreements beginning in the first half
of 2003, at dates  corresponding  approximately to the initial call dates of the
partnership preference units held by the Fund.


                                       15
<PAGE>
<TABLE>
                                                                                       Unrealized
               Notional                                      Initial                 Appreciation/      Unrealized
                Amount                                       Optional                (Depreciation)    Appreciation
 Effective      (000's          Fixed         Floating     Termination    Maturity    At September    At December 31,
   Date        omitted)         Rate            Rate           Date         Date        30, 2000           1999
------------------------------------------------------------------------------------------------------------------------
   <S>               <C>           <C>             <C>         <C>          <C>     <C>                   <C>
   2/98              $60,000       6.72%     Libor+.45%        2/03         2/05    $              -      $   2,190,325
   2/98              120,000      6.715%     Libor+.45%        2/03         2/05           2,887,854          4,404,500
   4/98               50,000       6.84%     Libor+.45%        2/03         2/05           1,004,870          1,579,937
   4/98              150,000      6.835%     Libor+.45%        4/03         4/05           3,103,542          4,983,531
   6/98               20,000       6.67%     Libor+.45%        6/03         2/05             485,226            747,192
   6/98               75,000       6.68%     Libor+.45%        6/03         2/05           1,794,138          2,768,906
   6/98               80,000      6.595%     Libor+.45%        6/03         2/05           2,135,569          3,236,267
   11/98              14,709       6.13%     Libor+.45%       11/03         2/05             608,631            871,658
   2/99               34,951       6.34%     Libor+.45%        2/04         2/05           1,168,667          1,732,927
   4/99                5,191       6.49%     Libor+.45%        2/04         2/05             146,349            223,114
   7/99               24,902      7.077%     Libor+.45%        7/04         2/05             143,191            396,636
   9/99               10,471       7.37%     Libor+.45%        9/04         2/05            (59,602)             23,193
   3/00               19,149       7.89%     Libor+.45%        2/04         2/05           (365,614)                  -
   3/00               70,000       7.71%     Libor+.45%         -           2/05         (1,447,599)                  -
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Total                                                                                   $ 11,605,222       $ 23,158,186
------------------------------------------------------------------------------------------------------------------------
</TABLE>

9 Debt

A Mortgage - Real property held by Bel  Residential  is financed  through a loan
secured by cross-collateralized  first mortgage liens on such real property. The
balance at September 30, 2000 is as follows:

                       Annual           Monthly
                      Interest          Interest            Balance at
Maturity Date           Rate            Payment*        September 30, 2000
-------------         --------          --------        ------------------
May 1, 2010             8.33%           $781,844           $112,630,517

* Mortgage  provides for monthly  payments of interest only through May 1, 2010,
with the entire principal balance due on May 1, 2010.

Real property held by Bel Communities is financed  through loans  collateralized
by its  real  estate  assets,  mortgage  loan  deposit  accounts  including  all
subaccounts thereunder,  and an assignment of certain leases and rents. Balances
at September 30, 2000 are as follows:

                       Annual        Principal and       Balance at
                      Interest          Interest        September 30,
Maturity Date           Rate            Payment             2000
-------------         -----------------------------------------------
October 1, 2010         8.54%           $  540,643      $ 70,054,090
October 1, 2010         8.53%              594,518        77,105,929
                                        ----------------------------
                                        $1,135,161      $147,160,019
                                        ----------------------------


                                       16
<PAGE>
The maturities of mortgages for the five years  subsequent to September 30, 2000
are as follows:


Years Ending September 30,                                         Amount
--------------------------                                         ------
2001                                                            $  1,009,031
2002                                                               1,187,898
2003                                                               1,291,121
2004                                                               1,405,729
2005                                                               1,530,510
Thereafter                                                       253,366,247
                                                                ------------
                                                                $259,790,536

B Credit  Facility--Belair  Capital has obtained a $790,000,000  Credit Facility
with a term of seven years from Merrill Lynch International Bank Limited. Belair
Capital's  obligations  under the Credit Facility are secured by a pledge of its
assets, excluding the assets of Bel Residential and Bel Communities. Interest on
borrowed funds is based on the prevailing LIBOR rate for the respective interest
period plus a spread of 0.45% per annum.  Belair Capital may borrow for interest
periods  of one  month  to  five  years.  In  addition,  Belair  Capital  pays a
commitment  fee at a rate of 0.10%  per annum on the  unused  amount of the loan
commitment.  Borrowings  under the Credit  Facility  have been used to  purchase
qualifying assets, pay selling commissions and organizational  expenses,  and to
provide for the short-term  liquidity needs of the Fund.  Additional  borrowings
under the  Credit  Facility  may be made in the future  for these  purposes.  At
September 30, 2000, and December 31, 1999, amounts  outstanding under the Credit
Facility totaled $710,000,000 and $655,000,000, respectively.

10 Management Fee and Other Transactions with Affiliates

The Fund and the Portfolio have engaged Boston  Management and Research (BMR), a
wholly-owned  subsidiary of Eaton Vance Management (EVM) as investment  adviser.
Under the terms of the advisory  agreement  with the  Portfolio,  BMR receives a
monthly fee of 5/96 of 1% (0.625%  annually) of the average  daily net assets of
the Portfolio up to $500,000,000 and at reduced rates as daily net assets exceed
that level. For the nine months ended September 30, 2000, and September 30, 1999
the advisory fee  applicable to the Portfolio was 0.43%  (annualized)  and 0.45%
(annualized),  respectively,  of  average  daily net  assets  for such  periods.
Belvedere  Capital's  allocated  portion of the advisory fee was  $28,049,372 of
which  $7,270,843 was allocated to the Fund, for the nine months ended September
30, 2000, and  $16,474,285,  of which  $6,903,616 was allocated to the Fund, for
the nine months ended September 30, 1999. In addition, Belair Capital pays BMR a
monthly  advisory and  administrative  fee of 1/20 of 1% (0.60% annually) of the
average daily gross investment assets of Belair Capital  (including the value of
all assets of Belair  Capital  other than Belair  Capital's  investment in BREC,
minus the sum of Belair Capital's liabilities other than the principal amount of


                                       17
<PAGE>
money  borrowed) and BREC pays BMR a monthly  management fee at a rate of 1/20th
of 1%  (equivalent  to 0.60%  annually)  of the average  daily gross  investment
assets of BREC  (which  consist  of all  assets of BREC  minus the sum of BREC's
liabilities other than the principal amount of money borrowed. For this purpose,
the assets and liabilities of BREC's controlled  subsidiaries are reduced by the
proportionate interests therein of investors other than BREC.). The advisory fee
payable by the Portfolio in respect of Belair Capital's  indirect  investment in
the Portfolio is credited toward Belair  Capital's  advisory and  administrative
fee payment. For the nine months ended September 30, 2000 and September 30, 1999
the advisory and  administrative fee payable to BMR by the Fund, less the Fund's
allocated  share  of  the  Portfolio's  advisory  fee,  totaled  $5,478,299  and
$4,847,333, respectively.

Eaton Vance Management (EVM) serves as manager of Belair Capital and receives no
separate compensation for services provided in such capacity.

Pursuant to a servicing  agreement between Belvedere Capital and EVD,  Belvedere
Capital  pays  a  servicing  fee to  EVD  for  providing  certain  services  and
information to  shareholders.  The servicing fee is paid on a quarterly basis at
an annual  rate of 0.15% of  Belvedere  Capital's  average  daily net assets and
totaled  $9,645,180 and $5,476,924 for the nine months ended  September 30, 2000
and September 30, 1999,  respectively,  of which  $2,491,960  and $2,296,651 was
allocated to Belair Capital for the respective periods.  Pursuant to a servicing
agreement between Belair Capital and EVD, Belair Capital pays a servicing fee to
EVD on a quarterly basis at an annual rate of 0.20% of Belair Capital's  average
daily net assets,  less Belair  Capital's  allocated  share of the servicing fee
payable by Belvedere  Capital.  For the nine months ended September 30, 2000 and
September 30, 1999 the servicing  fee paid  directly by Belair  Capital  totaled
$640,187 and $692,017, respectively. Of the amounts allocated to and incurred by
the Fund,  for the nine months ended  September 30, 2000 and September 30, 1999,
$3,132,147 and $1,835,305, respectively, were paid to subagents.

Equity Residential  Properties  Management Corp. (ERPM), an affiliate of the Bel
Residential  minority  shareholder,  provides  day  to  day  management  of  Bel
Residential pursuant to a management agreement which expires June 30, 2010 (Note
1B). The management  agreement provides for a management fee in the amount of 4%
of gross  collections and allows for  reimbursement  to ERPM of payroll expenses
incurred by ERPM. For the period from inception, June 30, 2000, to September 30,
2000,  Bel  Residential  paid or  accrued  management  fees and  payroll to ERPM
amounting to $227,050 and $587,017, respectively.

Bel   Communities   indirectly   holds  real  property   through  two  operating
partnerships.   Each  operating  partnership  has  entered  into  or  assumed  a
management agreement with Alliance Residential Management,  LLC, an affiliate of
the Bel Communities minority shareholder (Note 1B), for a period of 10 years. If
neither  BREC nor the Bel  Communities  minority  shareholder  gives  notice  to
terminate,  the agreement automatically renews from year to year. The management
agreements provide for a management fee in the amount of 4% of gross collections
and allows for  reimbursement to the manager for all direct expenses incurred by
the manager for managing  the Bel  Communities  properties.  For the period from
inception,  September 8, 2000, to September 30, 2000,  Bel  Communities  paid or
accrued  management fees to Alliance  Residential  Management,  LLC amounting to
$75,062.


                                       18
<PAGE>
ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Increases  and  decreases  in Belair  Capital's  net  asset  value per share are
derived from net investment income, and realized and unrealized gains and losses
on Belair Capital's interest (through Belvedere Capital) in the Portfolio,  real
estate  investments  held  through  BREC and any  direct  investments  of Belair
Capital.  Expenses of Belair Capital  include its pro-rata share of the expenses
of Belvedere  Capital,  and indirectly the Portfolio,  as well as the actual and
accrued  expenses of Belair  Capital and BREC,  including its  subsidiaries  Bel
Residential and Bel Communities.  Belair  Capital's most significant  expense is
interest  incurred on  borrowings  incurred in  connection  with its real estate
investments.  Belair  Capital's  realized  and  unrealized  gains and  losses on
investments  are based on its  allocated  share of the realized  and  unrealized
gains and losses of Belvedere Capital, and indirectly, the Portfolio, as well as
realized and  unrealized  gains and losses on investments in real estate through
BREC. The realized and unrealized  gains and losses on investments have the most
significant impact on Belair Capital's net asset value per share and result 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  holding 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 Belair Capital are substantially influenced
by the overall  performance of the United States 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.  The  Portfolio  is
registered as a diversified  management  investment company under the Investment
Company Act of 1940,  as amended,  and makes  filings  with the  Securities  and
Exchange  Commission  that include  information  about its investment  holdings.
Through  the  impact of  interest  rates on the  valuation  of Belair  Capital's
investments  in Partnership  Preference  Units through BREC and its positions in
interest  rate  swap  agreements,  the  performance  of Belair  Capital  is also
affected by movements in interest  rates,  and  particularly,  changes in credit
spread  relationships.   On  a  combined  basis,  Belair  Capital's  Partnership
Preference Units and interest rate swaps generally  decline in value when credit
spreads  widen (as fixed income  markets grow more  risk-averse)  and  generally
increase in value when credit spreads tighten.


RESULTS OF  OPERATIONS  FOR THE QUARTER  ENDED  SEPTEMBER  30, 2000 AND THE NINE
MONTHS ENDED SEPTEMBER 30, 2000

The  Fund  achieved  total  return  performance  of 2.5% for the  quarter  ended
September  30,  2000.  This return  reflects an increase in the Fund's net asset
value per share  from  $138.55  to  $141.98.  For  comparison,  the S&P 500,  an
unmanaged index of large capitalization  stocks commonly used as a benchmark for
the U.S.  equity market,  had a total return of -1.0% over the same period.  The
Fund had a total return of -8.7% for the quarter ended September 30, 1999.

During the third quarter of 2000, U.S. equity market leadership was concentrated
in defensive sectors such as utilities,  financial  services,  aerospace/defense
and energy.  Stocks  viewed as  particularly  vulnerable  to a slowing  economy,
including  most  retail  and  basic  industries   stocks  were  generally  weak.
Technology  stocks were also generally  weak, as a number of leading  technology


                                       19
<PAGE>
companies  reported  slowdowns or  disappointment  in their business results and
investors became more sensitized to valuation and risk considerations.  A number
of  speculative  technology and  Internet-related  stocks saw their stock prices
plunge  during the third  quarter.  In this more cautious  environment  the Fund
benefited from Tax-Managed  Growth  Portfolio's  valuation-sensitive  investment
approach and broad diversification.

In the fixed income markets,  the third quarter saw declining  interest rates on
benchmark  long-term  government bonds.  Spreads versus Treasuries for long-term
corporate bonds widened to reflect credit concerns in a weakening economy.  Real
estate  fixed  income   securities  were  relatively  strong   performers.   The
performance of the Fund during the quarter was favorably  impacted by changes in
valuation of its holdings of real estate partnership preference units.

The Fund  achieved  total return  performance  of 7.8% for the nine months ended
September  30,  2000.  This return  reflects an increase in the Fund's net asset
value per share  from  $131.72  to  $141.98.  For  comparison,  the S&P 500,  an
unmanaged index of large capitalization  stocks commonly used as a benchmark for
U.S.  stocks,  had a total return of -1.4% over the same period.  The Fund had a
total return of -0.2% for the nine months ended September 30, 1999.

During the nine months ended  September 30, 2000,  the U.S.  equity markets were
lead by health care,  financial  services,  utilities and energy  stocks.  Value
stocks outperformed growth stocks.  Retail stocks and basic industry stocks were
hurt by increased concerns about a slowing economy. After a very strong start to
the year,  technology  stocks generally turned weaker.  Particularly  during the
third  quarter,  a number of  leading  technology  companies  reported  business
slowdowns or disclosed  reduced  expectations for future growth. As the year has
progressed,  stock  investors  have become more risk  averse.  A large number of
speculative technology and Internet-related  stocks saw plunging stock prices in
the  second  and third  quarters.  In this more  cautious  environment  the Fund
benefited from Tax-Managed  Growth  Portfolio's  valuation-sensitive  investment
approach and broad diversification.

In the fixed  income  markets,  the  first  nine  months  of 2000 saw  declining
interest  rates on benchmark  long-term  government  bonds.  Credit  spreads for
corporate issues widened  appreciably to reflect increased concerns about credit
issues in a weakening  economy.  Real estate fixed income securities were strong
performers compared to fixed income issues in general. The Fund's investments in
real  estate  partnership  preference  units  and  associated  borrowings  had a
positive impact on the Fund's performance during the first nine months of 2000.

Liquidity and Capital Resources

As of September 30, 2000,  Belair Capital had  outstanding  borrowings of $710.0
million under the Credit Facility  established with Merrill Lynch  International
Bank Limited,  the term of which extends until February 6, 2005.  Belair Capital
has  available  under the  Credit  Facility  $80.0  million  to meet  short-term
liquidity need and for other purposes.

Belair  Capital  may  redeem  shares of  Belvedere  Capital  at any  time.  Both
Belvedere  Capital and the  Portfolio  follow the  practice of normally  meeting
redemptions  by  distributing  securities  drawn from the  Portfolio.  Belvedere
Capital and the Portfolio may also meet redemptions by distributing  cash. As of
September 30, 2000, the Portfolio had cash and short-term  investments  totaling
$767.6  million.  The  Portfolio  participates  in  a  $150  million  multi-fund


                                       20
<PAGE>
unsecured  line of credit  agreement  with a group of banks.  The  Portfolio may
temporarily  borrow  from the line of credit to satisfy  redemption  requests in
cash or to settle  investment  transactions.  The Portfolio  had no  outstanding
borrowings  under the $150 million line of credit at September 30, 2000, and, as
of that date,  the net assets of the Portfolio  totaled  $18,259.4  million.  To
ensure  liquidity for investors in the  Portfolio,  the Portfolio may not invest
more than 15% of its net assets in illiquid  assets.  As of September  30, 2000,
restricted  securities,  which are considered illiquid,  constituted 2.3% of the
net assets of the Portfolio.

The  Partnership  Preference  Units  held by BREC are not  registered  under the
Securities Act and are subject to substantial restrictions on transfer. As such,
they are considered illiquid.

BREC's  investments in real estate apart from  Partnership  Preference  Units is
also  considered  illiquid.  Bel  Residential  and  Bel  Communities  have  been
structured as  investments  of at least ten years (until 2010),  at which time a
buy/sell  mechanism  may  offer a  measure  of  liquidity  to both  BREC and its
minority shareholders.

Redemptions of Fund shares are met primarily by  distributing  securities  drawn
from  the  Portfolio,  although  cash  may  also  be  distributed.  Shareholders
generally do not have the right to receive the proceeds of Fund  redemptions  in
cash.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The value of Fund shares may not increase or may  decline.  The  performance  of
Belair Capital  fluctuates.  There can be no assurance  that the  performance of
Belair  Capital  will match that of the United  States  stock  market or that of
other equity  funds.  In managing the  Portfolio  for the  long-term,  after-tax
returns, the Portfolio's investment adviser generally seeks to avoid or minimize
sales of securities with large accumulated capital gains,  including contributed
securities.  Such securities  constitute a substantial  portion of the assets of
the Portfolio.  Although the Portfolio may utilize certain management strategies
in lieu of selling  appreciated  securities,  the Portfolio's,  and hence Belair
Capital's,  exposure to losses during stock market  declines may  nonetheless be
higher  than  funds  that do not follow a general  policy of  avoiding  sales of
highly-appreciated securities.

The  Portfolio  invests in  securities  issued by foreign  companies  and Belair
Capital  may  acquire   foreign   investments.   Foreign   investments   involve
considerations and possible risks not typically associated with investing in the
United  States.  The  value of  foreign  investments  to U.S.  investors  may be
adversely affected by changes in currency rates. Foreign brokerage  commissions,
custody  fees and other  costs of  investing  are  generally  higher than in the
United States,  and foreign  investments  may be less liquid,  more volatile and
more  subject  to  government  regulation  than in the  United  States.  Foreign
investments  could be  adversely  affected  by other  factors not present in the
United States, including  expropriation,  confiscatory taxation, lack of uniform
accounting and auditing standards,  armed conflict,  and potential difficulty in
enforcing contractual obligations.

In  managing  the  Portfolio,  the  investment  adviser  may  purchase  or  sell
derivative   instruments  (which  derive  their  value  by  reference  to  other
securities,  indices,  instruments,  or currencies) to hedge against  securities
price declines and currency movements to enhance returns.  Such transactions may
include,  without  limitation,  the  purchase  and sale of stock  index  futures


                                       21
<PAGE>
contracts  and options on stock index  futures;  the purchase of put options and
the sale of call options on securities held;  equity swaps; and the purchase and
sale of forward currency exchange contracts and currency futures.  The Portfolio
may make short sales of securities  provided that an equal amount is held of the
security  sold  short  (a  covered  short  sale)  and may  also  lend  portfolio
securities.  Belair Capital  utilizes  interest rate swap  agreements to fix the
cost of its  borrowings  over the term of the Credit  Facility.  In the  future,
Belair Capital may use other interest rate hedging  arrangements  (such as caps,
floors and collars) to fix or limit borrowing costs. The use of these investment
techniques is a specialized  activity  that may be  considered  speculative  and
which can expose Belair Capital and the Portfolio to  significant  risk of loss.
Successful  use of these  investment  techniques  is subject to the  ability and
performance  of the investment  adviser.  Belair  Capital's and the  Portfolio's
ability to meet their investment objectives may be adversely affected by the use
of these  techniques.  The writer of an option or a party to an equity  swap may
incur losses that  substantially  exceed the payments,  if any,  received from a
counterparty.  Swaps, caps,  floors,  collars and  over-the-counter  options are
private  contracts  in  which  there  is also a risk of loss in the  event  of a
default on an obligation to pay by the  counterparty.  Such  instruments  may be
difficult  to  value,  may be  illiquid  and may be  subject  to wide  swings in
valuation  caused by changes  in the price of the  underlying  security,  index,
instrument  or currency.  In addition,  if Belair  Capital or the  Portfolio has
insufficient cash to meet margin, collateral or settlement requirements,  it may
have to sell  assets to meet such  requirements.  Alternatively,  should  Belair
Capital or the Portfolio fail to meet these  requirements,  the  counterparty or
broker may liquidate positions of Belair Capital or the Portfolio. The Portfolio
may also have to sell or deliver securities holdings in the event that it is not
able to purchase  securities on the open market to cover its short  positions or
to close out or satisfy an exercise notice with respect to options  positions it
has  sold.  In any of  these  cases,  such  sales  may be made at  prices  or in
circumstances that the investment adviser considers unfavorable.

The Portfolio's ability to utilize covered short sales, certain equity swaps and
certain equity collar strategies (combining the purchase of a put option and the
sale of a call option) as a tax-efficient  management  technique with respect to
holdings of  appreciated  securities  is limited to  circumstances  in which the
hedging  transaction  is  closed  out  within  thirty  days  of  the  end of the
Portfolio's taxable year and the underlying  appreciated  securities position is
held  unhedged for at least the next ninety days after such hedging  transaction
is closed.  There can be no assurance that  counterparties  will at all times be
willing to enter into covered short sales,  interest  rate hedges,  equity swaps
and other  derivative  instrument  transaction on terms  satisfactory  to Belair
Capital or the Portfolio.  Belair Capital's and the Portfolio's ability to enter
into such  transactions  may also be  limited  by  covenants  under  the  Credit
Facility,  the federal margin  regulations and other laws and  regulations.  The
Portfolio's use of certain investment  techniques may be constrained because the
Portfolio is a diversified,  open-end  management  investment company registered
under the 1940 Act and because  other  investors in the  Portfolio are regulated
investment  companies under Subchapter M of the Code.  Moreover,  Belair Capital
and the Portfolio are subject to restrictions  under the federal securities laws
on their ability to enter into  transactions  in respect of securities  that are
subject to restrictions on transfer pursuant to the Securities Act.

Although  intended  to add to  returns,  the  borrowing  of  funds  to  purchase
Partnership  Preference  Units through BREC exposes  Belair  Capital to the risk
that the returns achieved on the Partnership Preference Units will be lower than
the cost of borrowing to purchase such assets and that the  leveraging of Belair
Capital to buy such assets will therefore diminish the returns to be achieved by
Belair Capital as a whole. In addition, there is a risk that the availability of


                                       22
<PAGE>
financing will be interrupted at some future time,  requiring  Belair Capital to
sell assets to repay  outstanding  borrowings  or a portion  thereof.  It may be
necessary to make such sales at unfavorable prices. Belair Capital's obligations
under the Credit  Facility and  mortgages are secured by a pledge of its assets.
In the event of default,  a lender could elect to sell assets of Belair  Capital
without regard to consequences of such action for shareholders.  The rights of a
lender to receive  payments  of  interest  on and  repayments  of  principal  of
borrowings is senior to the rights of the  shareholders.  Under the terms of the
Credit Facility,  Belair Capital is not permitted to make  distributions of cash
or securities  while there is  outstanding  an event of default under the Credit
Facility.  During  such  periods,  Belair  Capital  would  not be able to  honor
redemption requests or make cash distributions.

The Partnership  Preference  Units held by Belair Capital through its investment
in BREC  are  subject  to  restrictions  on  transfer,  including,  among  other
restrictions,  limitations on the manner of resale and the requirement  that the
general  partner of the issuer  consent to transfers.  In addition,  there is no
active  secondary  market for any Partnership  Preference Units that BREC holds.
Accordingly,  BREC's  investments in Partnership  Preference Units are illiquid.
The success of BREC's  investments  in Partnership  Preference  Units depends in
part on many  factors  related  to the real  estate  market  and to the  issuing
partnerships that may affect such partnerships'  profitability and their ability
to make distributions to holders of Partnership  Preference Units. These factors
include, without limitation,  general economic conditions, the supply and demand
for different types of real  properties,  the financial  health of tenants,  the
timing of lease expirations and  terminations,  fluctuations in rental rates and
operating costs,  exposure to adverse  environmental  conditions and losses from
casualty or condemnation,  interest rates, availability of financing, managerial
performance,  government rules and regulations, and acts of God. Although BREC's
investments in Partnership Preference Units are, to some degree,  insulated from
risk by virtue of their senior  position  relative to other equity  interests in
the issuing partnerships and by their diversification across a range of property
types and geographic  regions,  the  above-referenced  factors can substantially
affect the value and  marketability  of such investments over time. There can be
no assurance that the  investments in  Partnership  Preference  Units will be an
economic success.

The valuations of Partnership  Preference  Units held by Belair Capital  through
its  investment in BREC  fluctuate  over time to reflect,  among other  factors,
changes in interest  rates,  changes in the  perceived  riskiness  of such units
(including  call risk),  changes in the  perceived  riskiness of  comparable  or
similar  securities  trading in the public market and the  relationship  between
supply and demand for  comparable  or similar  securities  trading in the public
market.  Increases in interest rates and increases in the perceived riskiness of
such  units or  comparable  or  similar  securities  will  adversely  affect the
valuation of the  Partnership  Preference  Units.  As described in Note 7 to the
Fund's  Consolidated  Financial  Statements,  the Fund has entered into interest
rate swap  contracts to hedge  interest rate risks.  Fluctuation in the value of
Partnership  Preference Units derived from changes in general interest rates can
be expected to be offset in part (but not  entirely)  by changes in the value of
interest  rate swap  agreements or other  interest  rate hedges  entered into by
Belair  Capital  with  respect  to its  borrowings  under the  Credit  Facility.
Fluctuations  in the value of  Partnership  Preference  Units derived from other
factors besides general interest rate movements  (including  issuer-specific and
sector-specific   credit   concerns   and  changes  in   interest   rate  spread
relationships)  will not be offset by changes in the value of interest rate swap
agreements or other interest rate hedges entered into by Belair Capital. Changes
in the valuation of the  Partnership  Preference  Units not offset by changes in
the  valuation of interest rate swap  agreements  or other  interest rate hedges
entered into by Belair  Capital will cause the  performance of Belair Capital to
deviate from the performance of the Portfolio.


                                       23
<PAGE>
While  Belair  Capital's   manager  intends  that  BREC's   investments  in  Bel
Residential  and  Bel  Communities  will  reduce  overall   portfolio  risk  and
volatility and contribute to returns over time, these investments  expose Belair
Capital  to  certain  additional  risks  as  well.  The  performance  of  BREC's
investment  may be  influenced  by decisions  which Bel  Residential's  minority
shareholder and Bel Communities  minority  shareholder may make on behalf of Bel
Residential  and Bel  Communities,  respectively,  and potential  changes in the
submarkets  in  which  Bel  Residential's  and Bel  Communities'  buildings  are
located. The debt of Bel Residential and Bel Communities is fixed-rate,  secured
by the underlying properties and with limited recourse to BREC. However, changes
in interest rates, the availability of financing and other financial  conditions
can have a material  impact on  property  values and  therefore  on the value of
BREC's equity interest. Other factors bearing on the value of BREC's real estate
investments,  include,  without  limitation,  general economic  conditions,  the
supply and demand of comparable  real  properties,  fluctuations in rental rates
and operating  costs,  exposure to adverse  environmental  conditions and losses
from casualty or condemnation,  government  rules and  regulations,  and acts of
God.  There can be no assurance that BREC's real estate  investments  will be an
economic success.

Over time, the performance of Belair Capital can be expected to be more volatile
than the performance of the Portfolio.




                                       24
<PAGE>
PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Fund is not aware of any pending  legal  proceedings  to which the Fund is a
party or to which their assets are subject.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     None.

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

     None.

ITEM 5. OTHER INFORMATION.

     None.

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

     (a) Exhibits

     21 List of subsidiaries

     27 Financial Data Schedules

     (b) Reports on Form 8-K

     None.




                                       25
<PAGE>
                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned  officer of its  Manager,  Eaton Vance  Management,  thereunto  duly
authorized on November 14, 2000.

                                BELAIR CAPITAL FUND LLC
                                (Registrant)

                                By:  EATON VANCE MANAGEMENT,
                                     its Manager


                                     By:  /s/ James L. O'Connor
                                          ---------------------------------
                                          James L. O'Connor
                                          Vice President



                                     By:  /s/ William M. Steul
                                          ---------------------------------
                                          William M. Steul
                                          Chief Financial Officer




                                       26
<PAGE>
                                  EXHIBIT INDEX

21 List of subsidiaries

27 Financial Data Schedules




                                       27