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, 2001
                         Commission 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 24
<PAGE>
                             Belair Capital Fund LLC
                                Index to Form 10Q

PART I - FINANCIAL INFORMATION

                                                                            Page

Item 1.   Condensed Consolidated Financial Statements

          Condensed  Consolidated  Statements  of Assets
          and  Liabilities  as of September 30, 2001 (Unaudited)
          and December 31, 2000                                                3

          Condensed  Consolidated  Statements of Operations
          (Unaudited) for the Three Months Ended
          September 30, 2001 and 2000 and for the Nine
          Months Ended September 30, 2001 and 2000                             4

          Condensed Consolidated Statements of Changes in
          Net Assets (Unaudited)for the Nine  Months  Ended
          September  30,  2001 and 2000                                        6

          Condensed  Consolidated  Statements of Cash Flows
          (Unaudited) for the Nine Months Ended
          September 30, 2001 and 2000                                          7

          Notes to Condensed  Consolidated  Financial
          Statements as of September 30, 2001 (Unaudited)                      9


Item 2.   Management's  Discussion  and  Analysis  of
          Financial  Condition  and Results of Operations                     14

Item 3.   Quantitative and Qualitative Disclosures About Market Risk          17

PART II - OTHER INFORMATION

Item 1.   Legal Proceedings                                                   22

Item 2.   Changes in Securities and Use of Proceeds                           22

Item 3.   Defaults Upon Senior Securities                                     22

Item 4.   Submission of Matters to a Vote of Security Holders                 22

Item 5.   Other Information                                                   22

Item 6.   Exhibits and Reports                                                22


SIGNATURES                                                                    23

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

BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Assets and Liabilities

<TABLE>
                                                                                September 30,
                                                                                     2001             December 31,
                                                                                 (Unaudited)              2000
                                                                            ---------------------  -------------------
<S>                                                                               <C>                  <C>
 Assets:
     Investment in Belvedere Capital LLC                                          $1,700,296,368       $2,132,795,139
     Investment in real estate Partnership Preference Units                          448,619,380          439,043,259
     Investment in other real estate                                                 327,210,174          157,812,925
     Short-term investments                                                            3,738,290            6,665,871
                                                                             --------------------  -------------------
              Total investments                                                   $2,479,864,212       $2,736,317,194
     Cash                                                                              6,183,497           46,875,064
     Dividends receivable                                                                      -            8,021,686
     Deferred expenses                                                                   147,125            1,379,102
     Escrow deposits - restricted                                                      5,961,391            2,143,464
     Swap interest receivable                                                                  -              526,653
     Other assets                                                                        274,999              286,469
                                                                             --------------------  -------------------
             Total assets                                                         $2,492,431,224       $2,795,549,632
                                                                             --------------------  -------------------
 Liabilities:
    Loan payable                                                                   $ 663,000,000       $  643,000,000
    Mortgage payable, net of unamortized debt issuance costs                         226,355,502          111,088,447
    Open interest rate swap contracts, at value                                       35,502,366            4,834,653
    Swap interest payable                                                              2,815,691                    -
    Security deposits                                                                    889,520              394,546
    Accrued expenses:
        Interest expense                                                               5,111,762            7,430,119
        Accrued property taxes                                                         2,918,761              659,702
        Other accrued expenses and other liabilities                                   1,941,736            4,172,804
    Minority interest in controlled subsidiaries                                      28,783,655           12,971,521
                                                                             --------------------  -------------------
             Total liabilities                                                      $967,318,993        $ 784,551,792
                                                                             --------------------  -------------------
 Net assets                                                                       $1,525,112,231       $2,010,997,840
                                                                             --------------------  -------------------

 Shareholders' Capital                                                       --------------------  -------------------
     Shareholders' capital                                                        $1,525,112,231       $2,010,997,840
                                                                             --------------------  -------------------

Shares Outstanding                                                                    14,607,075           15,106,086
                                                                             --------------------  -------------------

Net Asset Value and Redemption Price Per Share                                           $104.41              $133.13
                                                                             --------------------  -------------------
</TABLE>


                                       3
<PAGE>
BELAIR CAPITAL FUND LLC
 Condensed Consolidated Statements of
 Operations (Unaudited)

<TABLE>
                                                           Three Months      Three Months        Nine Months       Nine Months
                                                               Ended             Ended              Ended              Ended
                                                          September 30,      September 30,      September 30,     September 30,
                                                               2001              2000               2001               2000
                                                         ----------------- ------------------ ------------------ -----------------
<S>                                                            <C>                <C>              <C>                <C>
Investment Income:
     Dividends allocated from Belvedere Capital                $4,874,695         $4,561,646       $ 14,280,241       $14,355,477
        (net of foreign taxes of $44,221, $26,473,
         $105,714 and $114,895, respectively)
     Interest allocated from Belvedere Capital                    305,015          1,867,157          1,410,055         3,941,550
     Expenses allocated from Belvedere Capital                 (2,773,700)        (3,379,134)        (8,800,292)      (10,031,422)
                                                         ----------------- ------------------ ------------------ -----------------
         Net investment income allocated from
             Belvedere Capital                                 $2,406,010         $3,049,669         $6,890,004        $8,265,605
     Dividends from Partnership Preference
         Units                                                 10,990,418          4,432,023         25,947,746        33,617,226
     Interest income from swaps                                         -            736,216                  -           641,984
     Rental income                                             11,799,211          7,779,044         26,217,134         7,779,044
     Interest                                                     133,957            227,045            435,192           434,673
                                                         ----------------- ------------------ ------------------ -----------------
             Total investment income                          $25,329,596        $16,223,997        $59,490,076       $50,738,532
                                                         ----------------- ------------------ ------------------ -----------------
Expenses:
    Investment advisory and administrative fees                $1,769,268         $1,950,850         $5,283,226        $5,478,299
    Property management fees                                      477,876            302,112          1,055,018           302,112
    Service fees                                                  148,829            212,781            537,892           640,187
    Interest expense on credit facility                         7,331,251         12,979,682         26,315,577        36,778,445
    Interest expense on mortgages                               4,363,500          4,772,855          9,984,380         4,772,855
    Interest expense on swap contracts                          4,034,455                  -          7,575,195                 -
    Property and maintenance                                    2,915,737          1,985,385          6,452,652         1,985,385
    Property taxes and insurance                                1,363,655            777,168          2,857,539           777,168
    Legal and accounting services                                 179,094            387,416            420,159           791,633
    Amortization of deferred expenses                              27,063             36,348             81,492            91,179
    Custodian and transfer agent fees                              13,124             21,887             67,168           102,026
    Printing and postage                                            2,466              2,493              9,084             7,293
    Miscellaneous                                                 149,721            (23,035)           674,241            26,666
                                                         ----------------- ------------------ ------------------ -----------------
            Total expenses                                    $22,776,039        $23,405,942        $61,313,623       $51,753,248
                                                         ----------------- ------------------ ------------------ -----------------
Net investment income (loss) before minority
    interest in net (income) loss of controlled
    subsidiaries                                               $2,553,557        $(7,181,945)       $(1,823,547)      $(1,014,716)
Minority interest in net (income) loss of
    controlled subsidiaries                                      (562,905)            42,579           (752,948)           42,579
                                                         ----------------- ------------------ ------------------ -----------------

Net investment income (loss)                                   $1,990,652        $(7,139,366)       $(2,576,495)        $(972,137)
                                                         ----------------- ------------------ ------------------ -----------------
</TABLE>


                                       4
<PAGE>
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of
    Operations (Unaudited) (Continued)

<TABLE>
                                                           Three Months      Three Months        Nine Months       Nine Months
                                                               Ended             Ended              Ended              Ended
                                                          September 30,      September 30,      September 30,     September 30,
                                                               2001              2000               2001               2000
                                                         ----------------- ------------------ ------------------ -----------------
<S>                                                         <C>                <C>                <C>                 <C>
Realized and Unrealized Gain (Loss)
Net realized gain (loss) -
       Investment transactions from Belvedere
         Capital (identified cost basis)                    $(22,669,199)      $(18,424,329)      $(23,927,100)       $29,873,588
       Termination of interest rate swap contracts                     -          2,241,000                  -          2,241,000
       Investment transactions in Partnership
         Preference Units (identified cost basis)             (1,784,999)       (15,231,759)        (2,927,609)       (18,177,972)
                                                        ------------------ -----------------  ----------------- ------------------
Net realized gain (loss)                                    $(24,454,198)      $(31,415,088)      $(26,854,709)       $13,936,616
                                                        ------------------ -----------------  ----------------- ------------------
Change in unrealized appreciation
         (depreciation) -
    Investment in Belvedere Capital
         (identified cost basis)                           $(252,359,949)       $42,372,981      $(396,904,169)      $102,843,747
    Investments in Partnership Preference
         Units (identified cost basis)                        (8,565,113)        62,495,119         36,218,730         61,127,867
    Interest rate swap contracts                             (20,961,445)       (12,077,601)       (30,667,713)       (11,552,964)
    Investment in real property                               (1,032,376)                 -         (3,219,608)                 -
                                                         ----------------- ------------------ ------------------ -----------------
Net change in unrealized
    appreciation(depreciation)                             $(282,918,883)       $92,790,499      $(394,572,760)      $152,418,650
                                                         ----------------- ------------------ ------------------ -----------------

Net realized and unrealized gain (loss)                    $(307,373,081)       $61,375,411      $(421,427,469)     $ 166,355,266
                                                         ----------------- ------------------ ------------------ -----------------
Net increase (decrease) in net assets from
     operations                                            $(305,382,429)       $54,236,045      $(424,003,964)      $165,383,129
                                                         ================= ================== ================== =================
</TABLE>


                                       5
<PAGE>
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Changes in Net Assets
(Unaudited)

<TABLE>
                                                                               Nine Months       Nine Months
                                                                                 Ended             Ended
                                                                              September 30,     September 30,
                                                                                 2001                2000
                                                                          -------------------  ------------------
<S>                                                                          <C>                  <C>
 Increase (Decrease) in Net Assets:
     Net investment loss                                                     $   (2,576,495)      $     (972,137)
     Net realized gain (loss) on investment transactions                        (26,854,709)          13,936,616
     Net change in unrealized appreciation (depreciation) of
           investments                                                         (394,572,760)         152,418,650
                                                                          -------------------  ------------------
             Net increase (decrease) in net assets from
             operations                                                      $ (424,003,964)      $  165,383,129
                                                                          -------------------  ------------------
 Transactions in Fund Shares -
    Net asset value of Fund Shares redeemed                                  $  (61,030,200)      $ (107,183,581)
                                                                          -------------------  ------------------
             Net decrease in net assets from Fund Share transactions         $  (61,030,200)      $ (107,183,581)
                                                                          -------------------  ------------------

 Distributions to Shareholders
    Special Distributions                                                    $            -       $   (7,112,726)
    Minority shareholders of controlled subsidiaries                               (851,445)                   -
                                                                          -------------------  ------------------
             Total distributions to Shareholders                             $     (851,445)      $   (7,112,726)
                                                                          -------------------  ------------------

 Net increase (decrease) in net assets                                       $ (485,885,609)      $   51,086,822

 Net assets:
     Beginning of period                                                     $2,010,997,840       $2,094,369,753
                                                                          -------------------  ------------------
     End of period                                                           $1,525,112,231       $2,145,456,575
                                                                          ===================  ==================
</TABLE>


                                       6
<PAGE>
BELAIR CAPITAL FUND LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)

<TABLE>
                                                                                       Nine Months        Nine Months
                                                                                          Ended              Ended
                                                                                       September 30,     September 30,
                                                                                          2001               2000
                                                                                   ------------------- ------------------
<S>                                                                                     <C>                 <C>
Cash Flows From (For) Operating Activities -
Net investment loss                                                                     $ (2,576,495)       $  (972,137)
Adjustments to reconcile net investment loss to net
     cash flows used for operating activities -
       Amortization of deferred expenses                                                      81,492             91,179
       Amortization of debt issuance costs                                                   145,760             45,225
       Net investment income allocated from Belvedere Capital                             (6,890,004)        (8,265,605)
       Decrease in dividends receivable                                                    8,021,686            599,045
       Increase (decrease) in interest payable for open swap contracts                     3,342,344           (436,964)
       (Increase) decrease in escrow deposits                                             (1,733,312)            87,691
       Decrease in other assets and prepaid expenses                                          11,470            365,570
       Increase in accrued property taxes                                                  1,626,572          1,203,892
       Increase in deferred expenses                                                               -         (1,902,659)
       Decrease in accrued interest, other accrued
            expenses and other liabilities                                                (5,380,826)          (726,900)
       Decrease in minority interest                                                         (52,500)                 -
       Payments for investments in other real property                                   (41,261,497)       (66,714,705)
       Cash assumed in connection with acquisition of real estate
            investments                                                                    1,745,868                  -
       Purchases of Partnership Preference Units                                          (9,386,616)      (101,895,368)
       Sales of Partnership Preference Units                                              33,101,616        128,326,254
       Proceeds from terminated interest rate swap contracts                                       -          2,241,000
       Improvements to property                                                           (1,685,371)        (1,030,729)
       Net (increase) decrease in investment in Belvedere Capital                        (36,690,122)        47,047,636
       (Increase) decrease in short-term investments                                       2,927,581         (7,135,351)
       Minority interest in net income of controlled subsidiaries                            752,948             42,579
                                                                                   ------------------- ------------------
Net cash flows used for operating activities                                            $(53,899,406)      $ (9,030,347)
Cash Flows From (For) Financing Activities -
       Proceeds from Credit Facility                                                     $20,000,000       $ 55,000,000
       Return of capital to minority shareholder                                            (268,065)                 -
       Payments for Fund Shares redeemed                                                  (5,672,651)       (30,566,325)
       Distributions paid                                                                   (851,445)        (4,012,690)
                                                                                   ------------------- ------------------
Net cash flows from financing activities                                                 $13,207,839       $ 20,420,985

Net increase (decrease) in cash                                                         $(40,691,567)      $ 11,390,638

Cash at beginning of period                                                              $46,875,064       $  3,802,594
                                                                                   ------------------- ------------------
Cash at end of period                                                                    $ 6,183,497       $ 15,193,232
                                                                                   =================== ==================
</TABLE>


                                       7
<PAGE>
SUPPLEMENTAL DISCLOSURE AND NON-CASH INVESTING AND FINANCING ACTIVITIES-

<TABLE>
<S>                                                                                         <C>                     <C>
       Change in unrealized appreciation(depreciation) of investments and
           open swap contracts                                                              $ (394,572,760)         $152,418,650
       Interest paid for Credit Facility                                                    $   29,176,035          $ 38,221,787
       Interest paid for swap contracts                                                     $    4,232,851          $    205,020
       Interest paid for mortgages                                                          $    9,185,516          $  1,589,748
       Market value of securities distributed in payment of redemptions                     $   55,357,549          $ 76,287,136
       Market value of real property and other assets, net of current
           liabilities, contributed                                                         $  170,124,083          $359,843,727
       Mortgage assumed in connection with the acquisition of real property                 $  115,850,000          $259,790,536
</TABLE>


                                       8
<PAGE>
BELAIR CAPITAL FUND LLC as of September 30, 2001
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1 Organization

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.

During the nine months ended September 30, 2001, Belair Real Estate  Corporation
(BREC) purchased a majority interest in Katahdin Property Trust, LLC (Katahdin).
Katahdin owns six  multi-family  residential  properties  located in five states
(Florida,  North Carolina, New Mexico, Texas and Washington).  BREC owns Class A
units  of  Katahdin,  representing  approximately  75% of  equity  interests  in
Katahdin,   and  a  minority  shareholder  owns  Class  B  units,   representing
approximately  25% of equity  interests in Katahdin.  The equity interest of the
Katahdin  minority  shareholder  is  recorded  as a  minority  interest  on  the
Consolidated  Statement  of Assets  and  Liabilities.  The  primary  distinction
between the two classes of shares is the  distribution  priority  and the voting
rights.  BREC has priority in  distributions  and has greater voting rights than
the holder of Class B units.

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

2 Interim Financial Statements

The condensed  consolidated  interim financial  statements of Belair Capital and
subsidiaries  as of September  30, 2001 and  September 30, 2000 and for the nine
months ended September 30, 2001 and September 30, 2000 have been prepared by the
Fund, without audit, pursuant to the rules and regulations of the Securities and
Exchange  Commission.  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  and cash flows at 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


                                       9
<PAGE>
included  in the  Fund's  latest  annual  report on Form 10-K.  Results  for the
interim  period are not  necessarily  indicative of those to be expected for the
full fiscal year.

Reclassifications  have been made to the prior period's financial  statements to
conform to the current period's presentation.

3 Investment Transactions

Increases  and decreases of the Fund's  investment in Belvedere  Capital for the
nine months ended September 30, 2001 aggregated $101,770,233,  and $120,327,739,
respectively,  and for the nine  months  ended  September  30,  2000  aggregated
$126,179,202 and $248,063,107,  respectively. Purchases and sales of Partnership
Preference Units aggregated  $9,386,616 and $33,101,616,  respectively,  for the
nine  months  ended  September  30,  2001  and  $101,895,368  and  $128,326,254,
respectively,  for the nine months ended September 30, 2000. For the nine months
ended  September  30,  2001,  acquisitions  of other  real  property  aggregated
$41,261,497. For the nine months ended September 30, 2000, acquisitions of other
real property aggregated $66,714,705.

Purchases and sales of Partnership Preference Units during the nine months ended
September  30, 2001 and September 30, 2000 include  amounts  purchased  from and
sold to other funds sponsored by Eaton Vance Management (EVM).

4 Indirect Investment in Portfolio

Belvedere  Capital's  interest  in the  Portfolio  at  September  30,  2001  was
$8,914,385,448,  representing  55.5%  of  the  Portfolio's  net  assets  and  at
September 30, 2000 was $9,826,270,245  representing 53.8% of the Portfolio's net
assets.  The Fund's  investment  in Belvedere  Capital at September 30, 2001 was
$1,700,296,368  representing  19.1% of  Belvedere  Capital's  net  assets and at
September 30, 2000 was $2,247,172,734, representing 22.9% of Belvedere Capital's
net assets.  Investment income allocated to Belvedere Capital from the Portfolio
for the nine months  ended  September  30, 2001  totaled  $77,460,677,  of which
$15,690,296 was allocated to the Fund.  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. Expenses allocated
to Belvedere  Capital from the Portfolio for the nine months ended September 30,
2001  totaled  $32,264,414,  of which  $6,538,815  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.  Belvedere  Capital  allocated  additional  expenses to the Fund of
$2,261,477 for the nine months ended September 30, 2001, representing $54,852 of
operating  expenses and $2,206,625 of service fees.  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 (Note 8).

A summary of the Portfolio's  Statement of Assets and Liabilities,  at September
30, 2001,  December 31, 2000 and September 30, 2000 and its  operations  for the
nine months ended  September 30, 2001,  the year ended December 31, 2000 and the
nine months ended September 30, 2000 follows:


                                       10
<PAGE>
<TABLE>
                                              September 30,          December 31,           September 30,
                                                  2001                   2000                    2000
                                           -------------------- ------------------------ ---------------------
<S>                                            <C>                      <C>                   <C>
       Investments, at value                   $15,879,363,685          $18,318,105,043       $18,195,602,562
       Other assets                                247,862,763              251,324,504           279,625,633
       ----------------------------------- -------------------- ------------------------ ---------------------
       Total Assets                            $16,127,226,448          $18,569,429,547       $18,475,228,195
       Total Liabilities                            63,436,483              184,360,662           215,812,049
       ----------------------------------- -------------------- ------------------------ ---------------------
       Net Assets                              $16,063,789,965          $18,385,068,885       $18,259,416,146
       =================================== ==================== ======================== =====================
       Dividends and interest                     $141,895,798             $189,740,537          $135,806,873
       ----------------------------------- -------------------- ------------------------ ---------------------
       Investment adviser fee                      $57,512,662              $73,317,616           $53,698,628
       Other expenses                                1,602,705                2,500,093             1,603,375
       ----------------------------------- -------------------- ------------------------ ---------------------
       Total Expenses                              $59,115,367              $75,817,709           $55,302,003
       ----------------------------------- -------------------- ------------------------ ---------------------
       Net investment income                       $82,780,431             $113,922,828           $80,504,870
       Net realized gains (losses)                (226,406,730)             196,962,539           203,183,788
       Net change in unrealized
           gains (losses)                       (3,614,091,583)             141,360,943           787,635,595
       ----------------------------------- -------------------- ------------------------ ---------------------
       Net increase (decrease) in net
       assets from operations                  $(3,757,717,882)            $452,246,310        $1,071,324,253
       ----------------------------------- -------------------- ------------------------ ---------------------
</TABLE>


5 Rental Property

The average occupancy rate for real property held by Bel Residential, consisting
of 2,681  residential  units,  was  approximately  95% at September 30, 2001 and
December 31, 2000. The fair value of real property owned by the Fund through Bel
Residential at September 30, 2001 and December 31, 2000 is as follows:


<TABLE>
                                                                 September 30,          December 31,
                                                                      2001                  2000
                                                                      -----                 -----
<S>                                                              <C>                    <C>
Land                                                             $ 23,565,000           $ 23,565,000
Buildings, improvements and other assets                          135,750,713            134,247,925
                                                             ---------------------- ----------------------
Fair value                                                       $159,315,713           $157,812,925
                                                              ---------------------- ----------------------
</TABLE>

The average  occupancy  rate for real property  held by Katahdin,  consisting of
2,476  residential  units, was approximately 95% at September 30, 2001. The fair
value of real property owned by the Fund through  Katahdin at September 30, 2001
is as follows:


                                                                 September 30,
                                                                     2001
                                                                     -----
Land                                                            $ 26,378,087
Buildings, improvements and other assets                         141,516,374
                                                           ---------------------
Fair value                                                      $167,894,461
                                                           ---------------------

                                       11
<PAGE>
6 Cancelable Interest Rate Swap Agreements

The Fund has entered into cancelable interest rate swap agreements in connection
with its real  estate  investments  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, 2001 and December 31, 2000, the
Fund has entered into  cancelable  interest  rate swap  agreements  with Merrill
Lynch Capital Services, Inc.

<TABLE>
                                                                                                   Unrealized      Unrealized
                    Notional                                         Initial                      Depreciation    Appreciation/
                     Amount                                         Optional                      At September   (Depreciation)
   Effective         (000's         Fixed          Floating        Termination       Maturity       30, 2001     At December 31,
      Date          omitted)         Rate            Rate             Date             Date       (Unaudited)         2000
----------------------------------------------------------------------------------------------------------------------------------
      <S>                <C>           <C>              <C>           <C>              <C>         <C>                  <C>
      2/98               120,000       6.715%     Libor+.45%          2/03             2/05        $ (4,765,116)        $ 158,467
      4/98                50,000        6.84%     Libor+.45%          2/03             2/05          (2,090,519)         (105,708)
      4/98               150,000       6.835%     Libor+.45%          4/03             4/05          (6,893,437)         (413,833)
      6/98                20,000        6.67%     Libor+.45%          6/03             2/05            (917,931)            1,994
      6/98                75,000        6.68%     Libor+.45%          6/03             2/05          (3,459,583)          (14,230)
      6/98                80,000       6.595%     Libor+.45%          6/03             2/05          (3,550,134)          181,644
     11/98                14,709        6.13%     Libor+.45%          11/03            2/05            (577,342)          210,991
      2/99                34,951        6.34%     Libor+.45%          2/04             2/05          (1,647,671)          221,768
      4/99                 5,191        6.49%     Libor+.45%          2/04             2/05            (264,615)            6,770
      7/99                24,902       7.077%     Libor+.45%          7/04             2/05          (1,808,147)         (524,587)
      9/99                10,471        7.37%     Libor+.45%          9/04             2/05            (875,838)         (341,770)
      3/00                19,149        7.89%     Libor+.45%          2/04             2/05          (1,639,422)         (809,750)
      3/00                70,000        7.71%     Libor+.45%            -              2/05          (7,012,611)       (3,406,409)
----------------------------------------------------------------------------------------------------------------------------------
Total                                                                                             $ (35,502,366)      $(4,834,653)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

7 Debt

A  Mortgages - Rental  property  held by the Fund is  financed  through  various
mortgages issued to the real estate subsidiaries. Mortgages payable are reported
on the  Condensed  Consolidated  Statement  of  Assets  and  Liabilities  net of
unamortized  debt issuance costs. A description of the mortgages  issued to each
of the real estate subsidiaries, excluding debt issuance costs, is as follows:

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, 2001 and December 31, 2000,  excluding  unamortized  debt issuance
costs, is as follows:

                                        Monthly      Balance at     Balance at
                            Annual      Interest    September 30,  December 31,
Maturity Date           Interest Rate   Payment*        2001            2000
-------------           -------------   --------        ----            ----
May 1, 2010                 8.33%       $781,844    $112,630,517   $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.


                                       12
<PAGE>
Real  property  held by Katahdin is financed  through a mortgage loan secured by
the  six  real  properties.   The  balance  at  September  30,  2001,  excluding
unamortized debt issuance costs, is as follows:

                                       Monthly
                       Annual          Interest             Balance at
Maturity Date       Interest Rate      Payment*         September 30, 2001
-------------       -------------      --------         ------------------
June 1, 2011          6.765%           $653,104            $115,850,000

*Mortgage  provides for monthly  payments of interest only through June 1, 2011,
with the entire principal balance due on June 1, 2011.

B Credit Facility -- Belair Capital has obtained a $790,000,000  credit facility
(the Credit Facility) with a term of seven years (expiring in 2005) 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 Katahdin.  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, 2001 and December 31, 2000, amounts
outstanding  under the Credit Facility totaled  $663,000,000  and  $643,000,000,
respectively.

8 Management Fee and Other Transactions with Affiliates

The Fund and the Portfolio have engaged Boston  Management and Research (BMR), a
wholly-owned  subsidiary of 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, 2001 and  September  30, 2000 the advisory fee
applicable to the Portfolio was 0.43%  (annualized) of average daily net assets.
Belvedere  Capital's  allocated  portion of the advisory fee was  $31,645,569 of
which  $6,413,673 was allocated to the Fund for the nine months ended  September
30, 2001, and $28,049,372 of which $7,270,843 was allocated to the Fund, for the
nine months ended September 30, 2000.

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,  reduced by that  portion of the monthly  advisory fee for such
month payable by the Portfolio  which is attributable to the value of the Fund's
investment in Belvedere Capital.  The term gross investment assets is defined to
include 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 money borrowed.

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. The term
gross  investment  assets is defined to include all assets of BREC minus the sum


                                       13
<PAGE>
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. For
the nine months ended  September 30, 2001 and  September 30, 2000,  the advisory
fee paid or accrued to BMR by the Fund,  less the Fund's  allocated share of the
Portfolio's advisory fee, totaled $5,283,226 and $5,478,299, respectively.

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 Eaton Vance
Distributors,  Inc.  (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  $10,894,221,  and  $9,645,180 for the nine
months ended September 30, 2001 and September 30, 2000,  respectively,  of which
$2,206,625  and  $2,491,960,  respectively,  was  allocated  to Belair  Capital.
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, 2001 and  September  30, 2000,  the servicing fee paid directly by
Belair Capital totaled $537,892 and $640,187,  respectively.  All servicing fees
allocated to and incurred by the Fund,  for the nine months ended  September 30,
2001 and September 30, 2000, were paid to subagents.

An affiliate of the Bel Residential  minority  shareholder  provides  day-to-day
management of Bel Residential pursuant to a management agreement. The management
agreement  provides for a management fee and allows for reimbursement of payroll
expenses  incurred by the  manager  for  managing  the  properties  owned by Bel
Residential.  For the nine months  ended  September  30, 2001 and for the period
from  inception,  June 30, 2000 to September 30, 2000, Bel  Residential  paid or
accrued management fees amounting to $719,867 and $227,050, respectively.

An affiliate of the Katahdin minority shareholder provides day-to-day management
of  Katahdin  pursuant  to a  management  agreement.  The  management  agreement
provides for a management fee and allows for  reimbursement  of payroll expenses
incurred by the manager for managing the properties  owned by Katahdin.  For the
period from  inception,  May 23, 2001 to September  30, 2001,  Katahdin  paid or
accrued management fees amounting to $335,151.


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

Increases and decreases in Belair  Capital Fund LLC's (the Fund) net asset value
per share are derived  from net  investment  income or loss,  and  realized  and
unrealized  gains and losses on the Fund's interest  through  Belvedere  Capital
Fund  Company LLC  (Belvedere  Capital) in  Tax-Managed  Growth  Portfolio  (the
Portfolio),  real estate  investments  held through its subsidiary,  Belair Real
Estate Corporation  (BREC) and any direct  investments of the Fund.  Expenses of
the Fund include its pro-rata  share of the expenses of Belvedere  Capital,  and
indirectly the Portfolio, as well as the actual and accrued expenses of the Fund
and BREC,  including its  subsidiaries  Bel  Residential  Properties  Trust (Bel


                                       14
<PAGE>
Residential)  and  Katahdin  Property  Trust,  LLC  (Katahdin).  The Fund's most
significant  expense is interest  incurred on borrowings  incurred in connection
with its real estate  investments.  The Fund'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 the Fund'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 security 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 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.  Through the
impact of interest rates on the valuation of the Fund's real estate  investments
through BREC and its positions in interest rate swap agreements, the performance
of the Fund is also affected by movements in interest rates,  and  particularly,
changes in credit spread  relationships.  On a combined  basis,  the Fund's real
estate  investments  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, 2001

The Fund had total return  performance of -16.6% for the quarter ended September
30,  2001.  This  return  reflects a decrease  in the Fund's net asset value per
share from $125.23 to $104.41.  For  comparison,  the Standard & Poors 500 Index
(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 -14.7% over the same
period.

During the third quarter of 2001, the U.S. equity market fell sharply, initially
to reflect  deteriorating  domestic economic  conditions and then in response to
the events of September  11th. The coordinated  actions of the Federal  Reserve,
the Bush  Administration  and Congress  since  September  11th have attempted to
maintain  orderly and liquid  markets and to stimulate the economy.  Through the
end of  September,  the S&P 500  rallied  by nearly 8% from the lows  reached on
September 21st.

The relative  performance  of different  market sectors during the third quarter
was influenced  primarily by investors' initial assessment of the September 11th
events.  Market  leading  industries  and sectors in the third quarter  included
aerospace and defense  stocks,  gold mining  stocks and defensive  plays such as
consumer products, pharmaceuticals,  packaged foods and utilities. The quarter's
weakest  performers  included  airlines  and  other  travel-related  industries,
entertainment,  consumer  durables and specialty  retailers.  Technology  stocks
resumed  their  decline  from  the  highs  reached  in the  first  half of 2000.
Financial stocks were mixed, with the benefits of declining  short-term interest
rates largely offset by rising credit concerns.

In this most  difficult of  environments,  the  performance of the Portfolio was
slightly better than that of the overall market.  The Fund  underperformed  both
the Portfolio and the S&P 500 in the quarter. The underperformance was primarily
in the month of September  and can be  attributed  to three  factors:  1) rising
credit  spreads  impacting the value of the Fund's real estate  investments,  2)
declining  intermediate-term  interest rates  impacting the Fund's interest rate


                                       15
<PAGE>
swap positions and 3) the Fund's slightly  leveraged  exposure to the Portfolio.
Although the U.S. real estate market remains in generally good balance,  fallout
from the September 11th events will likely have a negative effect.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

The Fund had total  return  performance  of  -21.6%  for the nine  months  ended
September  30,  2001.  This  return  reflects a decrease in the Fund's net asset
value per share  from  $133.13  to  $104.41.  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 -20.4% over the same period.

During the first nine months of 2001, the U.S. equity market  continued the weak
performance  pattern in place since early 2000. After a strong start in January,
the market fell through the balance of the first quarter,  rallied into May, and
then began a long slide that climaxed in the wake of the September 11th attacks.
The best  performing  industries and sectors in the nine-month  period  included
gold mining,  utilities,  healthcare  services,  foods, and tobacco. The weakest
performing  industries  and sectors  included  airlines,  oil and gas  drillers,
media,  and most  technology  groups.  The market  suffered from a deteriorating
economic outlook, a collapse in corporate profits and, finally,  the significant
economic and market  dislocation and heightened risk  sensitivity in the wake of
the September 11th events.

In this period of market weakness, the performance of the Portfolio was modestly
above that of the overall market. The Fund underperformed both the Portfolio and
the  S&P  500,  with  all of the  underperformance  in the  third  quarter.  The
underperformance  can be attributed to three  factors:  1) rising credit spreads
impacting  the  value  of the  Fund's  real  estate  investments,  2)  declining
intermediate-term  interest  rates  impacting  the  Fund's  interest  rate  swap
positions and 3) the Fund's slightly  leveraged  exposure to the Portfolio.  The
U.S. real estate  market  remains in generally  good  balance.  Fallout from the
September 11th events will likely have a negative effect, the full dimensions of
which are not yet evident.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2001, the Fund had outstanding  borrowings of $663.0 million
under the credit facility (the Credit  Facility)  established with Merrill Lynch
International  Bank Limited,  the term of which extends until  February 6, 2005.
The  Fund has  available  under  the  Credit  Facility  $127.0  million  to meet
short-term liquidity needs and for other purposes.

The Fund 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,
2001, the Portfolio had cash and short-term investments totaling $258.5 million.
The Portfolio participates in a $150 million multi-fund 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, 2001,  and, as of that date,  the net assets of
the Portfolio  totaled $16,063.8  million.  To ensure liquidity for investors in


                                       16
<PAGE>
the  Portfolio,  the Portfolio may not invest more than 15% of its net assets in
illiquid  assets.  As of  September,  2001,  restricted  securities,  which  are
considered illiquid, constituted 1.9% of the net assets of the Portfolio.

The  Partnership  Preference  Units  held by BREC are not  registered  under the
Securities  Act of 1933 (the  Securities  Act) and are  subject  to  substantial
restrictions  on  transfer.  As  such,  they  are  considered  illiquid.  BREC's
investments  in  real  estate  joint  ventures  are  extremely   illiquid.   Bel
Residential and Katahdin have been structured as investments of up to ten years,
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 RISK

(a) Quantitative Information About Market Risk

Interest Rate Risk
-------------------
The Fund's  primary  exposure to interest rate risk arises from  investments  in
real estate that are financed with floating rate bank  borrowings.  The interest
rate on  borrowings  under  the  Fund's  Credit  Facility  is reset  at  regular
intervals  based on a fixed and  predetermined  premium to LIBOR for  short-term
extensions of credit. The Fund utilizes cancelable interest rate swap agreements
to fix the cost of its  borrowings  over the term of the Credit  Facility and to
mitigate  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  three-month  LIBOR.  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 may be  considered  speculative  and which 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 Notes 6 and 7 to
the condensed consolidated financial statements.


                                       17
<PAGE>
<TABLE>
                                                       Interest Rate Sensitivity
                                          Principal (Notional) Amount by Contractual Maturity
                                               For the Twelve Months Ended September 30,

                         2002     2003     2004         2005        2006    Thereafter         Total         Fair Value
                        -------- -------- -------- --------------- ------- -------------- ---------------- ----------------
<S>                     <C>       <C>      <C>          <C>        <C>      <C>                 <C>          <C>
Rate sensitive
liabilities:
-----------------------
Long term debt-
   variable rate                                    $663,000,000                           $663,000,000     $663,000,000
Credit Facility
Average
 interest rate                                         3.04%                                   3.04%

Rate sensitive
 derivative financial
 instruments:
-----------------------
Pay fixed/
 Receive    variable
 interest rate swap
 contracts                                         $674,373,000                            $674,373,000     $(35,502,366)
Average
  pay rate                                             6.86%                                   6.86%
Average
  receive rate                                         3.04%                                   3.04%
</TABLE>

(b) Qualitative Information About Market Risk

The value of Fund Shares may not increase or may decline. The performance of the
Fund fluctuates. There can be no assurance that the performance of the Fund will
match that of the United States stock market or that of other equity  funds.  In
managing  the  Portfolio  for  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 the Fund's, exposure
to losses during stock market  declines may  nonetheless  be higher than that of
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 the Fund 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.


                                       18
<PAGE>
Risks of Certain Investment Techniques
--------------------------------------
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 and to enhance returns.  Such transactions
may include,  without  limitation,  the purchase and sale of stock index futures
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.  The use of these  investment  techniques is a specialized  activity
that  may be  considered  speculative  and  which  can  expose  the Fund 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.
The Fund'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 the  Fund 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 the Fund or the Portfolio fail to meet these requirements,
the counterparty or broker may liquidate positions of the Fund 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 sixty 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  transactions on terms satisfactory to the Fund
or the  Portfolio.  The  Fund's and the  Portfolio's  ability to enter into such
transactions  may also be  limited  by  covenants  under  the  Fund's  revolving
securitization  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  Investment  Company  Act of 1940 and
because other  investors in the Portfolio  are  regulated  investment  companies
under  Subchapter M of the Internal  Revenue  Code.  Moreover,  the Fund 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.


                                       19
<PAGE>
Risks of Investing in Qualifying Assets and Leverage
----------------------------------------------------
The success of BREC's real estate  investments  depends in part on many  factors
related to the real estate market.  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  (whether  or not  insured  against).
Partnership  Preference  Units also depend upon factors  relating to the issuing
partnerships that may affect such partnerships'  profitability and their ability
to make  distributions  to  holders  of  Partnership  Preference  Units.  BREC's
investments  in  interests  in real estate  joint  ventures  (Real  Estate Joint
Ventures) may be influenced by decisions which the principal  minority  investor
in each Real Estate Joint Venture (the Operating  Partner) may make on behalf of
the property  owned  thereby and  potential  changes in the specific real estate
sub-markets in which the  properties  are located.  The debt of each Real Estate
Joint  Venture 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.  There can
be no  assurance  that BREC's  ownership of real estate  investments  will be an
economic  success.  Moreover,  the  success  of any Real  Estate  Joint  Venture
investment  depends in large part upon the performance of the Operating Partner.
Operating  Partners  will be subject to  substantial  conflicts  of  interest in
structuring,  operating and winding up the Real Estate Joint Ventures. Operating
Partners  will have an economic  incentive  to maximize the prices at which they
sell  properties  to Real Estate  Joint  Ventures  and to minimize the prices at
which  they  acquire  properties  from Real  Estate  Joint  Ventures.  Operating
Partners  may devote  greater  attention  or more  resources  to managing  their
wholly-owned  properties  than  properties  held by Real Estate Joint  Ventures.
Future  investment  opportunities  identified  by Operating  Partners  will more
likely be pursued  independently,  rather than  through,  the Real Estate  Joint
Ventures.  Financial  difficulties  encountered  by Operating  Partners in their
other  businesses  may  interfere  with  the  operations  of Real  Estate  Joint
Ventures.

Although  intended to add to returns,  the  borrowing of funds to purchase  real
estate investments exposes the Fund to the risk that the returns achieved on the
real estate  investments  will be lower than the cost of  borrowing  to purchase
such  assets  and  that the  leveraging  of the  Fund to buy  such  assets  will
therefore  diminish  the  returns  to be  achieved  by the Fund as a  whole.  In
addition, there is a risk that the availability of financing will be interrupted
at some future  time,  requiring  the Fund to sell  assets to repay  outstanding
borrowings  or a portion  thereof.  It may be  necessary  to make such  sales at
unfavorable prices. The Fund's obligations under the Credit Facility are secured
by a pledge of its assets.  In the event of default,  the lender  could elect to
sell  assets of the Fund  without  regard to  consequences  of such  action  for
Shareholders.  The rights of the 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, the Fund 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, the Fund would not be
able to honor redemption requests or make cash distributions.

The  valuations  of  Partnership  Preference  Units held by the Fund 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


                                       20
<PAGE>
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.  The ongoing value of BREC's  investments in
Real Estate Joint Ventures will be substantially  uncertain.  BREC's investments
in Real Estate Joint Ventures generally will be stated at estimated market value
based on  independent  valuations,  assuming an orderly  disposition  of assets.
Detailed  investment   evaluations  will  be  performed  annually  and  reviewed
periodically.   Interim  valuations  will  reflect  results  of  operations  and
distributions,  and may be adjusted to reflect  significant  changes in economic
circumstances since the most recent independent evaluation.  Fluctuations in the
value of real estate investments  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
the Fund with respect to its borrowings under the Credit Facility.  Fluctuations
in the value of real  estate  investments  derived  from other  factors  besides
general interest rate movements  (including  issuer-specific and sector-specific
credit concerns,  property-specific 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 the Fund.  Changes in
the valuation of real estate  investments not offset by changes in the valuation
of interest rate swap  agreements or other  interest rate hedges entered into by
the Fund will cause the  performance of the Fund to deviate from the performance
of the Portfolio.  Over time, the  performance of the Fund can be expected to be
more volatile than the performance of the Portfolio.


                                       21
<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. THE FOLLOWING IS A LIST OF ALL EXHIBITS FILED AS PART OF THIS FORM 10Q:

     (a)       Exhibits

     10(1)(a)  Copy of Amendment  dated January 2, 2001 to  Investment  Advisory
               and   Administrative   Agreement  between  the  Fund  and  Boston
               Management and Research filed herewith.

     21        List of subsidiaries


                                       22
<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, 2001.

                                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


                                       23
<PAGE>
                                  EXHIBIT INDEX

10(2)(a)       Copy of Amendment  dated January 2, 2001 to  Investment  Advisory
               and   Administrative   Agreement  between  the  Fund  and  Boston
               Management and Research filed herewith.

21             List of subsidiaries


                                       24